Opinion ID: 2630997
Heading Depth: 2
Heading Rank: 4

Heading: Hawaii Ventures' Remaining Contentions

Text: In addition to its assertions concerning the Receiver's final report and the Special Master's report, Hawaii Ventures argues that the circuit court erred in: (1) failing to award Hawaii Ventures' full subrogation rights and judgment against the Otaka Defendants for the amount of Otaka's pre-receivership obligations paid from the Estate; (2) denying Hawaii Ventures' request to surcharge Receiver Park based on her alleged misconduct; (3) authorizing the payment of Receiver Park's fees from the Estate; and (4) authorizing Receiver Park to use the Estate's money to pay for the Special Master's fees. [21] Each of Hawaii Ventures' contentions is addressed in turn.
In appeal No. 25344, Hawaii Ventures contends that the circuit court erred by failing to enter judgment against the Otaka Defendants and in favor of Hawaii Ventures  not only for the $394,787.00 found by the Special Master to be a receivable, but also for the $964,826.00 deemed justified by the Special Master, totaling over $1.3 million. Hawaii Ventures asserts that, [i]f the asset of the Estate was used to pay a liability, that asset either paid the Estate's own liability or that of another. If an asset of the Estate was used to pay a liability not its own, that payment  even if permitted by the [a]ppoint[ment o]rder for the preservation of the Estate  created rights in the Estate. At a minimum, the Estate is entitled to recover against the person whose liability was discharged. The circuit court should have awarded full subrogation rights and judgment in favor of [the] Lender and against the Otaka [Defendants] for discharge obligations. Hawaii Ventures further states that: There is no basis for assets of the Estate to be used to pay Otaka['s] obligations without a corresponding asset of the Estate being created. Thus, the conclusion that $1.3 million of Estate assets was used to pay Otaka['s] liabilities requires a finding that the Estate is owed $1.3 million. If said $944,205.00 [sic] and $394,787.00 had not been paid to discharge debts using assets of, or due to, . . . Estate, [p]urchaser HWB 2507 Kalakaua LLC would have received those proceeds. (Emphasis in original.) Moreover, Hawaii Ventures asserts that rights of subrogation and equitable principles of quantum meruit and unjust enrichment dictate its entitlement to the aforementioned amount, chargeable to the Otaka Defendants. [22] We first turn to the issue whether Hawaii Ventures was entitled to a judgment in the amount that the Special Master deemed a receivable for the Estate, i.e., $394,787.00.
Hawaii Ventures believes that, because Receiver Park should not have paid $394,787.00 in pre-receivership obligations as the Special Master concluded, the circuit court erred in failing to enter judgment in that sum in favor of Hawaii Ventures. The Otaka Defendants, however, urge this court not to consider Hawaii Ventures' argument made for the first time on appeal because Hawaii Ventures did not request judgment against the Otaka [Defendants] (or any of them) on the receivable or any other pre-receivership expenses prior to raising the issue on appeal. Further, the Otaka Defendants argue that the $394,787.00 receivable, even if it is affirmed on appeal, gives Hawaii Ventures nothing more than the basis for a potential claim against Otaka and HWB. Until that claim and the defenses thereto are actually pled and litigated, no judgment can enter. (Emphasis in original.) Hawaii Ventures retorts that it expressly raised the issue with the circuit court via its response to the Special Master's report: [The] Lender objected to aspects of th[e Special Master's] report, including . . . the limited designation of $394,787.00 as a receivable. At the May 28, 2002 hearing on the Special Master's [r]eport, the circuit court adopted the Special Master's recommendations, as amended, reserving only specified matters for determination at the hearing on the Receiver's [f]inal [r]eport. The issue of the receivable was not one of the matters reserved. Thus, [the] Lender only had a single memorandum opportunity to respond to the Special Master's [r]eport recommending that a receivable be granted. In responding, [the] Lender sought reimbursement from Otaka, including a discussion at length in its Response to the Special Master's [r]eport captioned Who is Liable?. Under the section captioned Who is Liable[,] Hawaii Ventures argued, inter alia, that: The Special Master concludes that[,] if the discharge of an Otaka liability by the Receiver is deemed justified, then there is no recourse for the Estate, even from Otaka or [HWB]. There is no basis in law for the Estate to be further stripped of its assets in this manner. The discharge of the debt of another carried with it inherent rights of subrogation and recovery of unjust enrichment, at the very least. (Citation omitted.) Hawaii Ventures essentially concluded that, at a minimum, the Estate is entitled to recover against the person whose liability was discharged [by Receiver Park's pre-receivership payments]. There is no basis in law or the [o]rder for assets of the Estate to be used to pay non-receivership obligations without a corresponding receivable of the Estate being created. Hawaii Ventures suggested that Otaka and [HWB] should be ordered to reimburse the Estate for the full amount of pre-receivership liabilities of any type paid by the Receiver[.] Significantly, in approving the Special Master's report on July 11, 2002, the circuit court specifically stated that: As to the pre-receivership liabilities which are determined receivables on June 30, 2001, from [Otaka and HWB to Hawaii Ventures, i.e., $394,787.00,] the [c]ourt's adoption of the Special Master's recommendation in this regard does not preclude the Plaintiff[, i.e., Hawaii Ventures,] from pursuing a claim against other defendants for these receivables to the extent that [Hawaii Ventures] is able to demonstrate its entitlement to prevail on these claims against other defendants. (Emphasis added.) On February 12, 2003, Hawaii Ventures filed a motion for deficiency judgment, wherein it sought a deficiency judgment against the Otaka Defendants in the amount of $13,144,020.18. In addition, Hawaii Ventures requested, inter alia, an order declaring HWB Kalakaua as the assignee of all right, title and interest in the $394,787.00 designated as a receivable arising during the receivership due to `Plaintiff' in the Special Master's report filed on March 19, 2000, and for a judgment in favor of [HWB Kalakaua] and against [Otaka] in that regard. On May 12, 2003, the circuit court granted Hawaii Ventures' motion for deficiency judgment in the amount of $13,144,020.18. The circuit court reserved certain issues, none of which are relevant here, to be addressed in connection with the Receiver's final motion for instructions and denied the motion in all other respects. In other words, Hawaii Ventures' request for a judgment against the Otaka Defendants regarding the receivable was denied. Based on the foregoing, the Otaka Defendants' contention regarding Hawaii Ventures' failure to raise the argument before the circuit court is without merit. Moreover, Black's Law Dictionary defines the term receivable in the context of this case as [a]n amount owed[.] Black's Law Dictionary 1296 (8th ed.2004). It is undisputed that the circuit court adopted the Special Master' recommendation that $394,787.00 in pre-receivership payments be deemed a receivable, i.e., an amount owed to Hawaii Ventures from Otaka and HWB. In other words, because Receiver Park had used $394,787.00 from the Estate to pay liabilities of Otaka (and not those of the Estate), those payments created rights in the Estate, entitling it to recover against the person whose liability was discharged. In turn, that amount would become an asset of the Estate to be distributed to Hawaii Ventures, as the lender. Consequently, Hawaii Ventures' request for a judgment in the amount of $394,787.00 against Otaka and HWB should have been granted. We, therefore, hold that the circuit court erred in failing to do so. Accordingly, we vacate that portion of the May 12, 2003 order granting in part Hawaii Ventures' motion for deficiency judgment and denying in part its request regarding the $394,787.00. We also vacate the May 14, 2003 deficiency judgment. We remand with instructions that the circuit court amend the May 12, 2003 order to include a grant of Hawaii Ventures' aforementioned request and for entry of an amended deficiency judgment that includes the amount of $394,787.00 in favor of Hawaii Ventures as against Otaka and HWB.
Hawaii Ventures also argues that the circuit court erred in failing to issue a similar judgment for the remaining pre-receivership payments of $964,826.00. Hawaii Ventures believes that, if said amount had not been paid to discharge Otaka's debts using Estate monies, it would have received the proceeds. The Otaka Defendants, however, argue that [t]here is no basis, and certainly no equitable basis, for judgment against any of the Otaka [Defendants] with respect to the $964,826 in trade receivables that the Receiver was determined to have justifiably paid for the benefit of the Estate. We agree with the Otaka Defendants. As discussed in section III.B.2., Hawaii Ventures challenged several specific payments it believed should not have been paid by Receiver Park with Estate monies. Those payments represent $515,226.00 of the $964,826.00 deemed justified by the Special Master and approved by the circuit court, which we have upheld. See supra section III.B.2.a (regarding $316,188.00 for wages and vacation pay) and section III.B.2.b. (regarding $199,398.00 for Otaka's pre-receivership debts). Hawaii Ventures, however, does not provide any argument disputing the remaining $449,600.00 that was (1) paid out of the Estate by Receiver Park, (2) deemed justified by the Special Master, and (3) approved by the circuit court. Accordingly, we decline to determine the propriety of the remaining $449,600.00 that was paid out of the Estate. See, e.g., Norton, 80 Hawai`i at 200, 908 P.2d at 548 (disregarding an appellant's contention where he failed to provide any discernible argument). Nevertheless, Hawaii Ventures argues that it is entitled to the entire $1.3 million of pre-receivership payments based upon its rights of subrogation and equitable principles of quantum meruit and unjust enrichment. This court has defined subrogation as the substitution of another person in the place of a creditor, so that the person in whose favor it is exercised succeeds to the rights of the creditor in relation to the debt. Peters v. Weatherwax, 69 Haw. 21, 27, 731 P.2d 157, 161 (1987) (internal quotation marks omitted) (quoting Kapena v. Kaleleonalani, 6 Haw. 579, 583 (1885)). When subrogation occurs, the substitute is put in all respects in the place of the party to whose rights he is subrogated. In effect, he `steps into the shoes' of the party. Peters, 69 Haw. at 27, 731 P.2d at 161 (citations, internal quotation marks, and brackets omitted); see also Beneficial Hawai`i, Inc. v. Kida, 96 Hawai`i 289, 313-14, 30 P.3d 895, 919-20 (2001). Subrogation is broad enough to include every instance in which one party pays a debt for which another is primarily answerable, and which, in equity and good conscience, should have been discharged by the latter. Peters, 69 Haw. at 27, 731 P.2d at 161 (internal quotation marks, citation and brackets omitted). With respect to the principles of quantum meruit and unjust enrichment, this court has stated that: The basis of recovery on quantum meruit is that a party has received a benefit from another which it is unjust for him to retain without paying therefor. In Bouterie v. Carre, 6 So.2d 218, 220 (La.App.1942), it is stated that if a party derives any benefit from services rendered by another, the law reasonably implies a promise to pay on the part of the one who has received such benefit, such amount as it is reasonably worth. Maui Aggregates, Inc. v. Reeder, 50 Haw. 608, 610, 446 P.2d 174, 176 (1968). As such, a court may give restitution and prevent the unjust enrichment of the defendant, where the plaintiff's property has been used in discharging an obligation owed by the defendant. Grain Dealers Mut. Ins. Co. v. Pac. Ins. Co., 70 Haw. 211, 217, 768 P.2d 226, 229 (1989) (citation, internal quotation marks, and brackets omitted). As discussed supra, we held that the circuit court erred in denying Hawaii Ventures' request for a judgment in the amount of $394,787.00 that the Special Master deemed a receivable in favor of Hawaii Ventures. See section III.D.1 (regarding judgment of pre-receivership payments against the Otaka Defendants). Therefore, as to that amount of pre-receivership payments, we obviously need not determine whether subrogation or equitable principles warrants reimbursement of said amount to Hawaii Ventures. Nevertheless, as to the remaining $964,826.00 of pre-receivership payments, Hawaii Ventures fails to explain how the aforementioned equitable doctrines apply to the circumstances of this case, thereby entitling Hawaii Ventures to such sum. For example, Hawaii Ventures merely sets forth the law of subrogation and unjust enrichment without providing any corresponding analysis. Norton, 80 Hawai`i at 200, 908 P.2d at 548 (disregarding an appellant's contention where he failed to present discernible arguments). Hawaii Ventures, however, did provide this court with a two sentence argument in support of its quantum meruit argument, to wit: The[se pre-receivership payments] were for services rendered for and utilized by Otaka while it still possessed the [H]otel property. It would be unjust to allow Otaka to receive those benefits without paying for them. We previously concluded that the challenged $515,226.00 of the $964,826.00 pre-receivership payments were justifiably paid out of the Estate. In other words, the benefits from the payments of goods and services inured to the operation of the Hotel to generate revenues and accounts receivables. The Otaka Defendants, thus, did not receive any benefit from such payments of services and expenses that could be considered unjust for [them] to retain without paying therefor. Maui Aggregates, 50 Haw. at 610, 446 P.2d at 176. Additionally, we earlier declined to address the remaining $449,600.00 because of Hawaii Ventures' failure to specifically challenge it. For the same reason, we believe that Hawaii Ventures has not established that it is entitled to reimbursement of the pre-receivership payments based upon rights of subrogation and equitable principles of quantum meruit and unjust enrichment.
Hawaii Ventures attempts to impose personal liability on Receiver Park, arguing that the circuit court erred in denying its request for a surcharge of approximately $1.3 million, i.e., the total pre-receivership amount paid by Receiver Park. Although recognizing that the Special Master found only $394,787.00 to be a receivable, Hawaii Ventures nonetheless maintains that the entire sum ($394,787.00 receivable and $964,826.00 justifiable) discharged Otaka of its obligations to third parties and the Receiver had both the obligation and power under principals [sic] of subrogation to undertake to recover those sums from Otaka for the Estate. Failure to do so renders her subject to surcharge. In response, Receiver Park contends that the appointment order set the standard for the Receiver's personal liability and that the Special Master and the circuit court properly rejected allegations to impose such liability. She argues that Hawaii Ventures had the burden and obligation of showing to the [circuit] court and [the] Special Master in what particular manner the Receiver's actions constitute bad faith or fraud.  [Hawaii Ventures] did not supply a scintilla of such showing, did not relate any of its facts to the bad faith or fraud standard, in any way commensurate with the seriousness of the charges[.] (Emphasis in original.) As previously stated, the appointment order specifically contained a provision, entitled Receiver's Non-Liability, which read as follows: The Receiver is an officer of the [c]ourt and, as such, Receiver shall not be liable, in Receiver's individual capacity, for any claims or demands for loss or damage, arising out of or in connection with this lawsuit and [o]rder, including any acts or omissions in connection with the management and operation of the property of the Estate, whether such claims or demands arise during the pendency of or after the completion of this lawsuit, except in the event that Receiver's acts or omissions constitute bad faith or fraud. (Emphases added.) Hawaii Ventures, however, first argues that the exculpatory language of the appointment order cannot protect the Receiver from scrutiny in light of her misconduct. Specifically, Hawaii Ventures argues that the Receiver never provided the detailed accounting information required in the first instances of a Receiver, and sought by [the] Lender. The circuit court did not have such information in approving the Receiver's reports. The Special Master did not have such information in reviewing the Receiver's activities. The circuit court did not have such information in reviewing the Special Master's report. Hawaii Ventures' bald assertion is without merit. As discussed supra, Hawaii Ventures has not sustained its burden on appeal to show that the circuit court abused its discretion in denying Hawaii Ventures' requests for access to the Hotel's books and records. See supra section III.B.3. We also concluded that, in providing a detailed explanation of his recommendations, the Special Master had sufficient information to properly review the Receiver's final report. See supra section III.C.2.a. And, finally, we held that the Special Master did not, as Hawaii Ventures contends, fail to address issues concerning Receiver Park's misconduct when he specifically determined that Receiver Park's actions did not amount to bad faith or fraud. See supra section III.C.2.b. Thus, we concluded that, without providing any reason for the circuit court to disregard the Special Master's conclusion, the circuit court did not err in approving the Special Master's report. See supra section III.C.2.b. Consequently, we do not believe the circuit court abused its discretion in declining to surcharge Receiver Park. Nevertheless, in apparent recognition that this court may agree with the circuit court's decision, Hawaii Ventures next contends that the existence of bad faith or fraud is not required in order to find a receiver liable for negligently administering an estate. Specifically, Hawaii Ventures explains: [The] Lender sought a surcharge here because the Receiver did not, even with professional accounting advice, exercise proper stewardship in preserving Estate assets. Although the Receiver may have not profited directly in paying Otaka['s] debts, she was at the least negligent in, e.g., . . . paying more than a million dollars for those [debts], . . . failing to disclose and detail these payments in the face of demands and . . . comprehensively failing to pursue reimbursement to the Estate. (Emphasis added.) Thus, the issue before this court is whether  regardless of the directive contained in the appointment order  Receiver Park can be held personally liable for negligent violations of duties imposed upon her by law. We conclude she cannot. This court has held that: There is no doubt of the inherent power of a circuit [court] sitting in equity or in probate to call to [its] aid special masters, auditors, examiners or even translators for the purpose of assisting the court, in other words, the inherent power to provide [itself] with the appropriate instruments required for the performance of [its] duties. . . . [Thus,] a circuit court may designate a person to aid it in the performance of specific judicial duties as they arise in the progress of the cause, to clarify issues and make tentative findings when occasion arises[.] In re the Estate of Lee Chuck, 33 Haw. 220, 223 (1934). In this case, the circuit court appointed Park as the receiver to assist the court in managing the Estate during the pendency of the foreclosure action, and, thus, Park became an officer of the court. Booth, 58 U.S. at 331; see also HRCP Rule 66 (2007) (The practice in the administration of estates by receivers or by other similar officers appointed by the court shall be in accordance with the practice heretofore followed. (Emphasis added.)); Hawai`i Nat'l Bank v. Cook, 99 Hawai`i 334, 347, 55 P.3d 827, 840 (App.2000) (holding that a commissioner is a neutral party appointed by the court and acts as an arm of the court) (internal quotation marks and citation omitted), rev'd on other grounds, 100 Hawai`i 2, 58 P.3d 60 (2002). Although this court has yet to declare a receiver's entitlement to absolute judicial immunity based on her status as an officer of the court, we have held that court-appointed psychiatrists are entitled to such immunity, even if negligent. Seibel v. Kemble, 63 Haw. 516, 631 P.2d 173 (1981). In Seibel, this court acknowledged the overriding public policy reason for the immunity, i.e., that judges should be at liberty to exercise their functions with independence and without fear of consequences[,] id. (internal quotation marks and citations omitted), and concluded that such policy should apply equally to court-appointed officials. Id. As such, this court extended the immunity afforded to judges to court-appointed psychiatrists acting in their official capacity. Id. at 524, 631 P.2d at 178. In so holding, the Seibel court relied on a line of cases from other jurisdictions for the proposition that court-appointed officials acting as arms of the court and performing functions integral to the judicial process are entitled to absolute immunity. Id. at 523-27, 631 P.2d at 178-80. Of particular relevance is Kermit Constr. Corp. v. Banco Credito Y Ahorro Ponceno, 547 F.2d 1 (1st Cir.1976), of which we stated: In that case, the [First Circuit] held that court-appointed receivers were entitled to absolute immunity. In reaching this conclusion, the [First Circuit] stated[:] At the least, a receiver who faithfully and carefully carries out the orders of his appointing judge must share the judge's absolute immunity. To deny him this immunity would seriously encroach on the judicial immunity already recognized by the Supreme Court. It would make the receiver a lightning rod for harassing litigation aimed at judicial orders. In addition to the unfairness of sparing the judge who gives an order while punishing the receiver who obeys it, a fear of bringing down litigation on the receiver might color a court's judgment in some cases, and if the court ignores the danger of harassing suits, tensions between the receiver and judge seem inevitable. Seibel, 63 Haw. at 527, 631 P.2d at 180 (quoting Kermit Constr. Corp., 547 F.2d at 3). For the same reason, this court recognized that failure to extend absolute immunity to court-appointed psychiatrists would produce a chilling effect upon acceptances of future court appointments because [c]ourt appointees would not want to be exposed to litigation and be forced to spend time and money defending themselves in court. Id.; see also Hulsman v. Hemmeter Dev. Corp., 65 Haw. 58, 64, 647 P.2d 713, 719 (1982) (holding, inter alia, that a probation officer, as a functionary of the court, was absolutely immune, pursuant to the doctrine of judicial immunity, from liability for negligence in the preparation, investigation[,] and presentation of a pre-sentence report). The rationale underlying our decision in Seibel is, therefore, equally applicable in the instant case to court-appointed Receiver Park. [23] Accordingly, Hawaii Ventures' argument that Receiver Park should be held personally accountable for the $1.3 million that it claims she had negligently expended in her management of the Hotel is unavailing. Consequently, we hold that the circuit court did not abuse its discretion in denying Hawaii Ventures' request to surcharge Receiver Park. [24]
Hawaii Ventures maintains that the circuit court abused its discretion in approving fees exceeding $1 million to the Receiver and her professionals. As discussed more fully infra, Hawaii Ventures challenges as excessive and unreasonable the fees paid to both the Receiver and her retained professionals.
The appointment order specifically provided that the fees and costs of the Receiver and the Receiver's attorneys, accountants and other professionals, [25] if any, shall be submitted to the [c]ourt for its approval, in the form of either a request(s) for fees upon which a hearing is held and/or a stipulation(s) among all parties. Such fees and costs shall be deemed to be secured by a superpriority lien against the Estate. At the outset of the receivership, Receiver Park retained the services of various professionals to assist her in the operation and management of the Hotel, to wit: (1) Ke-ching Ning (from the law firm of Ning, Lilly & Jones), as the Receiver's general legal counsel; (2) Ronald Tom (of Ron Tom Realty, LLC), as general agent and accounting advisor; (3) Lorraine H. Akiba, as special counsel for environmental issues; (4) Robert S. Katz (of Torkildson, Katz, Fonseca, Moore & Hetherington), as special counsel for labor issues; and (5) Ernest Watari and his accounting firm  PKF Hawaii, LLP (PKF), as consultant and accountant. Two months after her appointment, Receiver Park, on October 24, 2000, filed a motion for an order establishing the procedure for monthly interim allowances and payment of compensation and reimbursement to the Receiver and her professionals. Therein, Receiver Park also requested fees and costs incurred from August 24, 2000 through September 31, 2000, totaling $47,904.03. However, on November 8, 2000, Receiver Park amended her motion to include fees and costs for the month of October 2000. As such, the fees and costs incurred from August 24, 2000 through October 31, 2000 amounted to $83,632.90. Hawaii Ventures filed its statement of no objection to the motion. Consequently, on December 1, 2000, the circuit court granted Receiver Park's motion, awarded the interim fees and costs requested, and established the procedures for interim payments. Those procedures specifically required the professionals to provide to the Receiver, by the 15th of each month, monthly time and service statements for professional services. Such statements shall set forth the date for each service, the general nature of the services rendered, and the time expended for each service. The Receiver shall, after review and approval, send copies of such monthly bills, as well as her own, to all parties, through counsel[.] Counsel will then have ten (10) days within which to object. If no objection is received, the Receiver may pay such fees. If any party objects, and the matter cannot be resolved, the Receiver will place the matter before the [circuit c]ourt by way of a fee application. (Emphasis added.) On October 2, 2001, Receiver Park filed a memorandum with the court and submitted a summary schedule of all fees and costs incurred during the previous year, i.e., from August 24, 2000 through August 31, 2001, totaling $717,221.16. Receiver Park also indicated that, pursuant to the established procedures, she had submitted monthly time and service statements to the parties, which she appended as exhibits, and that none of the parties made any objections thereto. Consequently, inasmuch as no objections were received, it appears that Receiver Park paid the monthly fees and costs once the objection period had expired. On October 9, 2001, Hawaii Ventures filed a reply, essentially asserting that, inasmuch as the appointment order specifically required that fees and costs be submitted to the court for approval, the court could disapprove any payment already made by the Receiver to herself or her professionals and that, therefore, Hawaii Ventures was not required to comply with the interim payment procedures. On November 28, 2001, Receiver Park filed an interim fee application with the circuit court, requesting a total of $55,777.24 incurred in September 2001 (in August 2001 for Katz), which amount was later reduced to $54,021.76. Receiver Park indicated that she had, consistent with her past practice, sent detailed fee and cost statements for the month of September 2001 to the parties. By letter dated October 17, 2001 (within the ten-day objection period), Hawaii Ventures  via its counsel  objected to the fees and costs, stating that: With respect to request for payment of the Receiver's and [the] Receiver's [c]onsultants [f]ees which were submitted with your letter of October 10, [2001], our client has objected to and continues to object to the payment of all further fee requests until completion of review with the Special Master and determination by this [c]ourt. . . . With in excess of $717,000 in fees already advanced, our client will not acquiesce to further advances to the Receiver or [the] Receiver's consultants[.] On December 11, 2001, Hawaii Ventures filed its objection to the requested fees and costs as being excessive. On January 15, 2002, the circuit court granted Receiver Park's fee application in the amount of $51,609.22 (as opposed to the requested $54,021.76). Thereafter, Receiver Park filed two additional interim fee applications. The second fee application (filed on January 9, 2002) sought a total of $32,540.32 in fees and costs for October 2001, and the third fee application (filed on January 23, 2002) sought a total of $51,178.86 for November 2001. Before the circuit court had a chance to rule on the second and third fee applications, Receiver Park filed a cumulative interim fee application on June 26, 2002. Therein, she requested $231,358.63 in fees and costs from October 2001 through May 2002. Hawaii Ventures opposed the cumulative fee application. The circuit court ultimately granted the cumulative fee application, but in the amount of $175,939.00. In her final motion for instructions, the Receiver requested an additional $99,453.44 in fees and costs for herself and her professionals for the period of June 2002 through November 2002, which the circuit court granted, but in the amount of $84,935.71. The circuit court also permitted a reserve of $150,000.00 to be held in an interest-bearing account for further fees and costs. In sum, the circuit court granted Receiver Park and her professionals fees and costs, totaling $312,483.93, over the objections of Hawaii Ventures as follows: DATE FEE APPLICATIONS REQUESTED AMOUNT AMOUNT AWARDED 11/28/01 The first fee application $54,021.76 $51,609.22 (September 2001) 01/09/02 The second fee application $32,540.32 No ruling (October 2001) 01/23/02 The third fee application $51,178.86 No ruling (November 2001) 06/26/02 The cumulative fee applications $231,358.63 $175,939.00 (October 2001-May 2002) 02/10/03 Final motion for instructions $99,453.44 $84,935.71 (June-November 2002) TOTAL $384,833.83 $312,483.93
On appeal, Hawaii Ventures maintains that the circuit court abused its discretion in approving over $1 million in fees ( i.e., $717,221.26 (August 2000-August 2001) plus $312,483.93 ( i.e., per the various interim fee applications) equals $1,029,705.10) to Receiver Park and her professionals. Hawaii Ventures argues that the sum was lavish and abusive and exceeded the net income of the Estate and [was] unreasonable by any standard of applicable fees properly incurred by a fiduciary in the administration of an estate. According to Hawaii Ventures, [t]he actions of the Receiver and her professionals were unworthy of the compensation awarded. To the knowledge of [the] Lender, not a single misapplied asset of the Estate was retrieved and no improper payment was halted without the direct involvement of [the] Lender and [the] Lender's advisers. . . . By any measure, this was a disastrous and failed receivership. Where more than $1.3 million of improper payments were misrepresented and repeatedly denied with the full support and advocacy of advisers, no fees were due to any of them. Specifically, Hawaii Ventures argues that: (1) there should be no compensation for activities not benefitting the Estate; (2) there should be no fees where there was willful neglect or misconduct; and (3) there should be no fees for defending fee applications. As an initial matter, we note that Hawaii Ventures purports to challenge all of the fees and costs approved and paid to Receiver Park and her professionals. However, as previously stated, Hawaii Ventures did not object to Receiver Park's October 24, 2000 request for $83,632.90 in fees and costs incurred from August 24, 2000 through October 31, 2000. In fact, Hawaii Ventures filed a statement of no opposition to the request on November 6, 2000. As to the fees and costs for November 2000 through August 2001 in the amount of $633,588.36 ($717,221.26 minus $83,632.90), there is no dispute that Hawaii Ventures failed to object to the fees and costs in the proper manner provided for in the circuit court's order establishing procedure for interim allowances. In fact, Hawaii Ventures concedes in its opening brief that [e]arly awards of fees may have been allowed without opposition, but continued and final payment was abusive[.] (Emphasis added.) Because failure to raise or properly reserve issues at the [circuit court] level would be deemed waived[,] Enoka v. AIG Hawai`i Ins. Co., 109 Hawai`i 537, 546, 128 P.3d 850, 859 (2006) (internal quotation marks and citation omitted), we hold that, in light of Hawaii Ventures' failure to object to fees paid through August 31, 2001, its challenge to the $717,221,26 in fees and costs is waived. See also In re Tax Appeal of Subway Real Estate Corp. v. Dir. of Taxation, State of Hawai`i, 110 Hawai`i 25, 30, 129 P.3d 528, 533 (2006) (as a general rule, if a party does not raise an argument at trial, that argument will be deemed to have been waived on appeal) (brackets, citation, and internal quotation marks omitted). Accordingly, the only contested fees on appeal are those additional fees awarded pursuant to the Receiver's fee applications and the final motion for instructions, totaling $312,483.93 (the disputed amounts). We, therefore, examine Hawaii Ventures' specific objections only as they relate to the disputed amounts.
Generally, [r]eceivers have a right to compensation for their services and expenses. Even though a receiver may not have increased or prevented a decrease in [the] value of the collateral, if a receiver reasonably and diligently discharges [her] duties, [she] is entitled to compensation. 65 Am.Jur.2d Receivers § 219 at 809 (footnotes omitted); see also Gaskill v. Gordon, 27 F.3d 248, 253 (7th Cir.1994) (same). The receiver bears the burden of proof to show entitlement to payment in the amount claimed, 2 Clark, A Treatise on the Law and Practice of Receivers § 641(f) at 1097, and the amount of the award lies within the sound discretion of the circuit court. Id. at 1089 (Allowances of fees to masters, receivers[,] and their counsel are largely discretionary with the trial judge[.]); see also Drilling & Exploration Corp. v. Webster, 69 F.2d 416, 418 (9th Cir. 1934). This is because the receiver acts under the authority of the court and is considered to be an officer of the court. The court supervises [her], knows [her] circumstances, the services rendered by [her], the amount of time [she] has expended, what is reasonable, and can judge the value of those services. Krist v. Aetna Cas. & Sur., 667 P.2d 665, 670 (Wyo.1983) (citation omitted). Thus, [w]hile the court is vested with discretion in the matter, and its action is presumptively correct, nevertheless its discretion must be properly exercised and not abused, and the matter is discretionary only in the sense that there are no fixed rules for determining the proper amount, and not in the sense that the court is at liberty to award more than fair and reasonable compensation, nor less than such compensation. King v. Premo & King, Inc., 258 N.C. 701, 129 S.E.2d 493, 500 (1963) (citation omitted). Thus, the allowance of fees to a receiver will not be reversed by a reviewing court except upon a showing of abuse of discretion. Moreover, compensation for the receiver is to be determined by the circumstances of the particular case. Stuart v. Boulware, 133 U.S. 78, 82, 10 S.Ct. 242, 33 L.Ed. 568 (1890) (holding that the receiver's salary is left entirely to the determination of the court from which [she] derives [her] appointment. The compensation is usually determined according to the circumstances of the particular case, and corresponds with the degree of responsibility and business ability required in the management of the affairs [e]ntrusted to [her], and the perplexity and difficulty involved in that management). Generally, the applicable considerations are the time and labor required, but not necessarily that actually expended, in the proper performance of the duties imposed by the court upon the receivers, the fair value of such time, labor and skill measured by conservative business standards, the degree of activity, integrity and dispatch with which the work is conducted and the result obtained. And in this process[,] vicarious generosity should receive no countenance. United States v. Larchwood Gardens, Inc., 404 F.2d 1108, 1110 (3d Cir.1968) (citations omitted). Here, Hawaii Ventures contends that Receiver Park and her professionals should not have been compensated for certain activities not benefitting the Estate, such as activities relating to the Receiver's work in: (1) correcting the wrongful payments; (2) defending HWB in a federal action; (3) responding to ILWU's various motions and the Former Employees' motion; and (4) participating in the Kona Surf Resort Hotel foreclosure case. We address each of these activities in turn.
Hawaii Ventures' argument, in its entirety, with respect to the correction of wrongful payments is that, [u]nder the supervision of the Receiver, with advice from the Receiver's highly-paid accountants, the Estate was severely damaged by many wrongful and misrepresented payments. A substantial amount of fees approved to be paid to the Receiver and her professionals were incurred to correct their initial and misleading accountings in the face of growing indications of false statements and denials of payment of pre-receivership obligations. (Emphases added.) In support of its contention, Hawaii Ventures points to an affidavit of its New York counsel, K.C. McDaniel, and to the Special Master's report. Specifically, the affidavit was attached to Hawaii Ventures' memorandum in opposition to Receiver Park's motion for order approving settlement with one of the Estate's creditors, intervenor-defendant/appellee/cross-appellee Argonaut Insurance Company (Argonaut). [26] Therein, McDaniel provided, inter alia, her view concerning workers' compensation insurance policies. [27] Hawaii Ventures also points to those sections within the Special Master's report wherein he explained each payment as being justified or a receivable. However, neither McDaniel's affidavit nor the identified sections of the Special Master's report provide any assistance in clarifying Hawaii Ventures' contention. A party opposing a fee application must carry the burden of explaining what therein is unreasonable or, at least, what would be reasonable under the circumstances. Absent such evidence by the objectant, the opposition fails. It is not for the [c]ourt to supply such evidence or the detail required to support the objectant's overly general pleading. Thus, just as the court should not justify a fee for the applicant, it should not have to fashion an objection for a complaining party. In re Blackwood Assocs., L.P., 165 B.R. 108, 112 (Bankr.E.D.N.Y.1994) (internal quotation marks, citations, brackets, and ellipsis omitted); In re Hunt's Health Care, Inc., 161 B.R. 971, 982 (Bankr.N.D.Ind.1993) ([T]his court should not heed a creditor's unexplained dissatisfaction. . . . The objector must, at some point, identify any allegedly improper, insufficient, or excessive entries and direct the court's attention to them.). Thus, Hawaii Ventures' general opposition, without more, must fail.
Hawaii Ventures argues that a substantial amount of fees and costs charged by Receiver Park and her professionals were for the specific defense of pre-receivership claims against HWB. Hawaii Ventures specifically contends that: Only in the January 9, 2002 fee application[, i.e., the second fee application, ] were thousands of dollars of charges revealed for defending a federal action against HWB. . . . The legal bills contain repeated references to HWB['s] matters and assistance to Otaka. Denied any accounting from the attorneys, [the] Lender cannot know what they actually defended. (Emphasis added.) (Citations to the record omitted.) In other words, Hawaii Ventures appears to maintain that, because Receiver Park was not the receiver for the Otaka's affiliate, i.e., HWB, fees for any work performed by the Receiver and her professionals on behalf and in defense of HWB should not have been at the cost to the Estate and, therefore, should have been disallowed. Hawaii Ventures, however, did not point to any portion of the January 9, 2002 fee application (the second fee application) to support its contention. Rather, Hawaii Ventures cites to several portions of the third fee application  namely, the invoices from the law firm of Ning, Lilly & Jones, the real estate firm of Ron Tom Realty LLC, and the accounting firm of PKF. Those portions, however, do not appear to contain any entries relating to the federal action against HWB, except for one entry in PKF's December 10, 2001 invoice: DATE DESCRIPTION HOURS 11/08/01 Analyze November 7, 2001 letter from Anna Elento Sneed and October 5, 2001 1.25 complaint in ILWU v. HWB (.25); investigate electronic docket (.25); e-mail to Ke-Ching Ning about Pat Park about same (.25); telephone call from Ning about same; e-mails from Park about same; analyze ILWU statement of position (.50). (Emphases added.) Nonetheless, an examination of the cumulative fee application reveals additional related entries. For example, Receiver Park's invoice, dated January 8, 2002, contained the entry numbered 1. below and an invoice from Torkildson, Katz, Fonseca, Moore & Hetherington, dated February 13, 2002, contained the entries numbered 2. through 4. below: DATE DESCRIPTION HOURS 1. 12/20/01 Telephone call to Ms. Ning on billings to court; status; status of sale of KSR 0.30 equipment and federal court action re. [HWB]. 2. 01/09/02 Outline and draft motion for instructions that Receiver not defend complaint in 3.25 Civil No. 01-00653 DAE LEK (D.Haw.) on behalf of [HWB] (1.0); update research about same (.75); revise and finalize same (.5); telephone call from Ke-Ching Ning about same (.25); e-mail and phone mail from Jeanne Jang about October 12, 2001 letter from Michael Murata (.25); analyze jurisdictional statement by plaintiff (.25). 3. 01/30/02 Further analyze Otaka's opposition to motion for instructions that [Receiver] 1.00 not defend [HWB] (.25); draft reply memorandum in support of motion (.65); e-mail to Pat Park and Ke-Ching Ning about same (.10). 4. 01/30/02 Work on response to Otaka['s] memo[randum] in opp[osition] to Receiver's 1.00 motion not to defend complaint to compel arbitration. As previously stated, Receiver Park, as a precautionary measure, filed a motion for instructions, on August 3, 2001, that she not defend HWB against the complaint to compel arbitration in the federal action. Receiver Park indicated that she did not represent HWB and, thus, was not the proper party to defend HWB. The circuit court granted the motion. See also section I.B., Procedural History, 08/03/01 entry. The appointment order expressly authorized Receiver Park to institute, prosecute and defend, compromise, adjust, intervene in or become a party to such actions or proceedings in state or federal court as the Receiver may in the Receiver's reasonable judgment deem necessary or proper for the management, protection, care, maintenance or preservation of the Estate or the carrying out the Receiver's duties [.] (Emphases added.) Consequently, had Receiver Park not expended her time to obtain guidance from the circuit court regarding the scope of her duty to defend, she risked being found in breach of her duties to maintain and preserve the Estate, as well as potentially exposing the Estate to additional burdens. Accordingly, we do not believe the circuit court abused its discretion in granting the fees incurred as a result of Receiver Park's efforts to secure such guidance from the court. [28]
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.
Hawaii Ventures objects to those fees incurred in connection with Receiver Park's participation in the foreclosure of the Kona Surf Resort Hotel, which, as previously stated, was owned by Otaka and under a contract of sale at the commencement of the instant foreclosure action. Specifically, Hawaii Ventures asserts that: The Receiver claims to have prevailed in the Kona Surf [Resort Hotel] foreclosure case, in establishing a first lien position on equipments. However, the claimed first lien was of no realizable value. The Receiver admitted that the tens of thousands of dollar spent on pursuing the lien on equipment was in vain. Yet the Receiver totally failed to pursue the genuinely valuable claims against the Kona Surf [Resort Hotel] collateral that were the basis of her appointment  that there was a diversion of funds from the Estate collateral to operate and maintain that hotel. (Emphasis added.) (Citations to the record and footnote omitted.) Subparagraph 3(i) of the August 24, 2000 appointment order expressly mandated Receiver Park to, inter alia, seek an accounting from [the] Otaka [Defendants] of all sums paid to Otaka's affiliates from December 4, 1994 and shall undertake reasonable efforts to recover such amounts paid to Otaka's affiliates. However, on March 30, 2001, the Otaka Defendants filed a motion to modify the aforementioned provision on the basis of an agreement reached between Hawaii Ventures and the Otaka Defendants. The Otaka Defendants requested the following modification to subparagraph 3(i): The Receiver shall accept from Otaka the amount of $550,000 plus interest . . . in satisfaction of the duty of [the Otaka Defendants] to account to the Receiver from sums paid to Otaka's affiliates from December 4, 1994 to the date of appointment of the Receiver, which duty was the original subject of this paragraph 3(i), and in satisfaction of the receivables shown on the balance sheets of the Hotel and HWB as of May 31, 2000 as due from Otaka and  due from Kona Surf [Resort Hotel] . Notwithstanding the preceding sentence, the Receiver shall retain any rights she may have to recover assets which are part of the Estate . . . and are subject to the pending foreclosure of the Kona Surf Resort Hotel in which she has been granted the right to intervene, which rights, if any, shall be satisfied solely from said assets in said foreclosure. But for the prosecution of such intervention and recovery of assets, no further actions by the Receiver shall be required or undertaken to recover the sums paid to Otaka's affiliates pursuant to the original paragraph 3(i) of this Order. (Emphases added.) Through its counsel, Hawaii Ventures indicated no objection to the motion and the amendment. Accordingly, on April 30, 2001, the circuit court granted the motion to modify and amended the appointment order as suggested by the Otaka Defendants. In other words, the aforementioned settlement left the Receiver with only the duty and power to recover assets which are part of the Estate . . . and are subject to the pending foreclosure of the Kona Surf Resort Hotel. Consequently, inasmuch as Hawaii Ventures voluntarily abandoned those genuinely valuable claims by settling with the Otaka Defendants, it cannot now assert that Receiver Park totally failed to pursue the genuinely valuable claims against the Kona Surf [Resort Hotel] collateral based on the diversion of hotel funds. Moreover, Receiver Park was within the power conferred upon her in the appointment order to pursue the claim for equipment against the Kona Surf Resort Hotel. [29] In fact, in a letter written to one of the Receiver's professionals, Hawaii Ventures' counsel pressed the Receiver to pursue the claim as it would be extremely important to avoid prejudice to the value of the Kona claim. As such, Hawaii Ventures cannot now complain about fees incurred with respect to a claim which it insisted Receiver Park pursue. [30]
Hawaii Ventures contends that: Where expenses have been caused by the negligence of the receiver, the receiver cannot maintain a claim for compensation. See Reardon v. Youngquist, 189 Ill.App. 3[, 7, 1914 WL 2783 (Ill.App.Ct.)] (1914) (The reckless and negligent manner in which the receiver conducted the affairs of the trust estate and the consequent loss to the creditors legally deprived the receiver of the right to commissions. The law does not compensate an officer for inefficiency and willful neglect of duty. [(Internal quotation marks and citation omitted.)]); Fed[.] Deposit Ins[.] Corp[.] v. 65 Lenox Road Owners Corp[.], 270 A.D.2d 303[, 704 N.Y.S.2d 613, (N.Y.App.Div.)] (2000) (well settled that compensation may be denied to a receiver who had grossly mismanaged the property). Where professional advisers have been complicit in the Receiver's actions, they must share the consequences. (Emphasis added.) Although stating that the Receiver should not be compensated for her negligence, Hawaii Ventures, in relying upon the aforementioned authorities, apparently asserts that Receiver Park and her professionals should not have been awarded their fees because of their willful neglect and misconduct. As previously discussed in section III.D.2 supra, Receiver Park, as a court-appointed official, is entitled to absolute judicial immunity when acting in the scope of [her] authority and in accordance with court order. Perry Center, Inc., 576 N.W.2d at 511 (citation omitted). However, [i]t is well settled that compensation may be denied a receiver who has grossly mismanaged the property in her possession, resulting in great loss to the estate. Title Guar. & Trust Co. v. Adlake Corp., 161 Misc. 27, 290 N.Y.S. 1007, 1010 (N.Y.Sup.1936) (citations omitted). As previously quoted, the appointment order specifically provided that the Receiver shall not be liable, in the Receiver's individual capacity, for any claims or demands for loss or damages, arising out of or in connection with this lawsuit . . . except in the event that Receiver's acts or omission constitute bad faith or fraud. The Special Master, in reviewing Receiver Park's final report, concluded that, [a]lthough [he] disagrees with the payment of certain pre-receivership liabilities by the Receiver, . . . such disputed payments do not rise to the level of `bad faith' or `fraud.' The aforementioned conclusion was ultimately adopted by the circuit court via its July 11, 2002 order approving the Special Master's report. However, as stated supra, Hawaii Ventures has not provided this court with any reason to suggest that the Special Master's conclusion and the circuit court's adoption thereof were erroneous. Accordingly, Hawaii Ventures' argument that Receiver Park's willful neglect and misconduct should preclude her from receiving fees for her services must fail.
Hawaii Ventures argues that Receiver Park's and her professionals' work in defending a fee application are not chargeable to the Estate. In support of its contention, Hawaii Ventures points to certain entries in Ning, Lilly & Jones' invoice (dated November 7, 2001), attached to the cumulative interim fee application: DATE DESCRIPTION HOURS AMOUNT 10/01/01 Review emails from Receiver; email Receiver; 4.70 $587.50 review redraft of supplemental order; confer with Ke-ching Ning regarding supplemental order and cover letter; draft summary of [Hawaii Ventures'] and Receiver's form of orders Fees & Costs pleadings; confer with Ke-ching Ning; conduct further research regarding receiver's compensation ; make revisions Kona Surf: confer Ke-ching Ning regarding our draft msj. 10/17/01 Draft letter to our parties informing 1.10 $ 71.50 them of [Hawaii Ventures'] objection to our October fees; pull documents in preparation to fee application. 10/17/01 Conference with Ke-ching Ning regarding 5.70 $712.50 [Hawaii Ventures'] objection to fees ; review emails regarding ILWU['s] motion; review [Hawaii Ventures'] objection to fees and Ke-ching Ning's email; review [Hawaii Ventures'] reply to Rec'r memorandum regarding procedure for interim allowances and payment of compensation and reimbursement of costs; research regarding burden of objecting party 2 telephone calls with Ron Tom regarding removal of equipment and fees objection ; telephone message to S. Mau[, i.e., Hawaii Ventures' counsel,] regarding equipment removal Kona Surf: Review draft of objection to Koa Hotel's submission. 10/17/01 Objection from [Hawaii Ventures'] on 1.20 $270.00 everyone's fees and costs; discuss need to file fee application. Letter to parties regarding statute of fund deposits. Communications on ILWU['s] interim appeal motion. Follow-up on transfer of equipment to [Hawaii Ventures]. 10/19/01 Review email from S. Mau and Receiver; draft 8.90 $1,112.50 fee application. 10/22/01 2 brief conferences with Ke-ching Ning 4.40 $550.00 regarding equipment removal; draft letter to S. Mau regarding equipment removal; telephone call with Ron Tom regarding equipment removal; telephone message to Receiver regarding fee application ; review research regarding and continue drafting opposition to ILWU['s] motion to file interlocutory appeal; telephone call with received regarding fee app; review Ke-ching Ning's comments to fee app draft; confer with Elsonne regarding fees memorandum; longer conference with Ke-Ching Ning regarding her comments to draft. (Emphases added.) Moreover, a brief review of the Receiver's final motion for instructions  particularly, the portion discussing her request for fees and costs, appears to indicate that work relating to fee applications were also charged: DATE DESCRIPTION HOURS AMOUNT 07/21/02 Summarize the objections to fees for 1.40 $175.00 Receiver. 07/22/02 Review draft billing to be sent to 2.30 $287.50 Receiver. Draft fee app[lication] replies. 07/22/02 Review/comment [Hawaii Ventures]'s 0.50 $112.50 objections to fee app[lications]. 07/25/02 Begin pulling exhibits for fee 1.50 $97.50 application reply; draft declaration of JHJ for same, continue drafting declaration incorporating JHJ's revisions. A receiver is generally entitled to compensation from the estate for services rendered in protecting the estate. See, e.g., Sec. & Exch. Comm'n v. Elliott, 953 F.2d 1560, 1577 (11th Cir.1992) (Even though a receiver may not have increased, or prevented a decrease in, the value of the collateral, if a receiver reasonably and diligently discharges [her] duties, [she] is entitled to compensation. (Citations omitted.)). However, several courts have held that receivers are not entitled to recover fees and expenses associated with litigation involving the propriety of the fees to be awarded to them because, as the United States Court of Appeals for the Third Circuit explained, the law imposes on a party the duty to pay [her] own fees and expenses in vindicating [her] personal interests. . . . It is our understanding that services necessarily involved in preparing [fee] application to the district court and defending them there are not compensable. Larchwood Gardens, 420 F.2d at 534; In re Imperial ÷ 400' Nat'l, Inc., 432 F.2d 232, 239 (3d Cir.1970) (time not legally compensable [includes] that spent in applying for or in defending interim fee awards) (footnote omitted); Sec. & Exch. Comm'n v. W.L. Moody & Co., Bankers ( Unincorporated ), 374 F.Supp. 465, 490 (S.D.Tex.1974) (holding that a [r]eceiver's preparation for and attendance at hearings on the fees will not be considered in setting [her] fee); In re Polycast Corp., 289 F.Supp. 712, 719 (D.Conn. 1968) (denying allowance for time charged for preparing the trustee's fee application); Depositors' Comm. v. Fin. Mgmt. Task Force, Inc., 809 P.2d 1095, 1098 (Colo.Ct. App.1991) (concluding that the services rendered in defending the receiver's fee request were of no benefit to the estate  the services rendered were for the sole benefit of the fiduciary and its counsel). As the above tables clearly demonstrate, Receiver Park's fee applications included fees relating to the preparation and defense of the charged fees, which are not chargeable against the Estate and should not have been considered in awarding fees. Although the circuit court, in ruling on the various fee applications, reduced the amount of fees requested, it is impossible to determine whether those reductions were attributable to the preparation and/or defense of the charged fees because the court did not provide any explanation for its reductions. Absent such explanation, we cannot effectively review whether the circuit court abused its discretion in awarding fees as it did. Accordingly, we vacate the awards of fees reflected in the circuit court orders filed on January 15, 2002, October 16, 2002, and May 12, 2003 (totaling $312,483.93) and remand this matter to the circuit court for clarification and, if necessary, a redetermination of the amount to be awarded to the Receiver and her professionals in light of the views expressed herein. Cf. Price v. AIG Hawai`i Ins. Co., 107 Hawai`i 106, 113, 111 P.3d 1, 8 (2005) (reminding all judges to specify the grounds for awards of attorneys' fees and the amounts awarded with respect to each ground. Without such an explanation, we must vacate and remand awards for redetermination and/or clarification. (Citations omitted.)). [31]
Lastly, Hawaii Ventures contends that additional fees of $35,804.84 to the Special Master and his accountant, Horwath Kam & Company, should not have been paid out of the Estate. [32] According to Hawaii Ventures, [t]here is no basis in law for the Estate to have been singled out to bear all of the charges of the Special Master, which were in fact caused by the breaches of the Receiver and which involved other parties. No benefit flowed to the Estate from this work. . . . The Estate did not in fact ask for the Special Master and strongly objected to the secret record, denial of discovery and process by which his report was prepared. As previously stated, in response to the parties' (particularly, Hawaii Ventures') objections to the August 14, 2001 final report, Receiver Park urged the circuit court to appoint a special master. The record does not indicate that Hawaii Ventures objected to the appointment. On September 21, 2001, the circuit court appointed Matsubara as the Special Master. Thereafter, the circuit court issued its first supplemental order, wherein the court directed that the Special Master's compensation shall be at the rate of $200.00 per hour, together with necessary and reasonable expenses, including the fees and expenses of the Special Master's retained expert(s), to be paid out of the funds of the [r]eceivership Estate.  (Emphasis added.) [33] Again, the record does not reveal that Hawaii Ventures objected to the circuit court's first supplemental order. Nor did Hawaii Ventures file a motion to amend the supplemental order. Hawaii Ventures, therefore, cannot now argue that fees for the Special Master and his consultant should not have been paid from the Estate because the Estate did not benefit from the Special Master's work. Enoka, 109 Hawai`i at 546, 128 P.3d at 859 (issues not preserved at the circuit court level are deemed waived); see also Querubin v. Thronas, 107 Hawai`i 48, 61 n. 5, 109 P.3d 689, 702 n. 5 (2005) (The rule in this jurisdiction prohibits an appellant from complaining for the first time on appeal of error to which he has acquiesced or to which he failed to object. (Internal quotation marks, citations, brackets, and ellipsis omitted.)). [34] The supplemental order explicitly mandated that the Special Master's and his retained accountant's fees and costs be paid out of the Estate. The circuit court, pursuant to the unopposed supplemental order, permitted the fees and costs to be paid from the Estate. Accordingly, the circuit court did not abuse its discretion in allowing the payment of the Special Master's services out of the funds of the Estate.