Opinion ID: 2630997
Heading Depth: 6
Heading Rank: 3

Heading: efforts as to ILWU and the Former Employees

Text: Hawaii Ventures maintains that the Receiver should not have charged for contacts with the ILWU and its counsel because [t]hese contacts were completely inconsistent with the responsibilities of an asset receiver. As other examples: (1) the Receiver charged for work on the ILWU's motion for interlocutory appeal. But the Receiver had no interest and in fact took no substantive position before the circuit court with respect to those claims[;] (2) the Receiver voluntarily participated as to the [F]ormer [E]mployees' motion for leave to sue receiver, but this did not benefit the Estate[;] (3) a motion regarding separation and vacation benefits for Letitia Pauso[, a former Hotel employee,] was filed only because of the Receiver's mistake in determining Pauso's entitlement[; and] (4) the Receiver and her consultants charged for time in responding to requests for information in the ILWU's federal action against Otaka and to prepare for and defend the deposition of Debra Lee, a former Otaka/HWB employee and officer[,] sought as a witness in an Otaka litigation. This was purely for Otaka's benefit. Lender noted these should be at the expenses of Otaka or the Receiver. (Numbering added.) Preliminarily, we briefly summarize the relevant background information pertaining to the above motions in the table below: DATE PROCEEDINGS 10/12/01 After the circuit court issued its order granting in part and denying in part ILWU's motion to treat severance and vacation pay as administrative expenses on September 28, 2001, ILWU filed a motion for leave to file an interlocutory appeal.  10/29/01 Receiver Park filed a memorandum in opposition to the motion.  12/05/01 The circuit court denied the motion. 06/17/02 The Former Employees sought leave to file a class action complaint against, inter alia, Receiver Park in her official capacity as the receiver of the Estate for wages and benefits in the form of vacation and severance pay owed to all Hotel employees who were terminated effective June 30, 2001.  07/01/02 Receiver Park filed a memorandum in opposition.  07/22/02 The circuit court denied the motion. 08/09/02 After the filing of her supplemental final report on June 21, 2002, Receiver Park filed a motion to correct her recommendation that the court offset sick leave benefits previously received by Letitia Pauso against the separation and vacation benefits ordered by the court. In support of her motion to correct, the Receiver indicated that her recommendation was based on the ground that Pauso received workers' compensation benefits for the same period of time that she previously received sick leave benefits. However, subsequent to making that recommendation, the Receiver learned that Pauso received a $15,000.00 settlement payment in exchange for withdrawal of her claim for workers' compensation benefits and $2,665.69 in temporary disability benefits for the period after she received sick leave benefits. As a result, the Receiver learned that Pauso did not receive workers' compensation benefits or temporary disability benefits for the same period of time that she received sick leave benefits. Therefore, Receiver Park requested to amend her recommendation that the sick leave benefits previously received by Pauso not be offset against the separation and vacation benefits.  09/17/02 The circuit court granted the motion. 10/01/02 Receiver Park filed a motion for instructions, suggesting that she was not authorized to provide the information requested by ILWU regarding employees' severance and vacation pay claims in connection with ILWU's federal action. ILWU also served subpoenas upon the Receiver, seeking such information.  10/22/02 The motion was apparently denied. Consequently, Receiver Park and her labor counsel have had to field and/or respond to various requests for information in connection with the ILWU's federal action, retrieve, review and assemble documents in response to subpoenas on the Receiver, as well as prepare for and defend the deposition of Debra Lee. Such discovery has required labor counsel to research and analyze various relevant issues, including work product doctrine, protective orders, res judicata, injunctions against collateral attack, and judicial immunity of court-appointed receivers. . . . Receiver's labor counsel prepared a motion for protective order, analyzed documents in response to the ILWU's subpoena, and conferred with [her professionals] regarding ILWU's inspection of documents. As previously quoted, the appointment order expressly authorized Receiver Park to defend . . . such actions or proceedings in state or federal court as [she deemed] necessary or proper for the . . . protection . . . of the Estate[.] Thus, the receiver was doing the very thing that the appointment order mandated her to do when she opposed ILWU's motion for interlocutory appeal and the Former Employees' motion for leave. Had she not done so, the Receiver could very well have exposed the Estate to additional liability. Thus, Receiver Park's participation in opposing both motions was reasonable and necessary to fulfill the broad mandates of the appointment order. With respect to Receiver Park's services rendered in filing the motion to correct her recommendation regarding Pauso's benefits, we likewise believe them to be reasonable and, in fact, necessary to protect the Estate from further litigation by Pauso. As an officer of the court, Receiver Park has a duty to correct the information submitted to the court once she became aware of Pauso's changed circumstances regarding her benefits, which she promptly did in seeking a revision of her recommendation. Thus, it would be unfair to deprive the Receiver of her right to compensation for amending her recommendation based on those changed circumstances. Lastly, as to fees charged in connection with work on the various ILWU's requests for information that the circuit court apparently required Receiver Park respond to via its denial of her motion for instructions that she not provide the information, we believe those fees are reasonable and appropriate. A receiver is an officer of the court who must obey the orders of the court so long as they are unimpeached. . . . Obedience to the orders of the court in [her] management of property under [her] control is [her] sufficient protection. This is true even if the order of the court is erroneous and subsequently reversed. First Nat'l Bank of Vandalia v. Trail Ridge Farm, Inc., 143 Ill.App.3d 244, 97 Ill.Dec. 371, 492 N.E.2d 1030, 1035 (1986) (emphasis added) (citations omitted). To deny the Receiver compensation under these circumstances would be to penalize her for obeying the court's order. Accordingly, the circuit court did not abuse its discretion in allowing fees for the aforementioned services. In sum, we conclude that the circuit court was within the bound of its discretion to award fees associated with Receiver Parks' and her professionals' work with regard to ILWU and the Former Employees.