Opinion ID: 2630595
Heading Depth: 2
Heading Rank: 2

Heading: The circuit court has jurisdiction to expunge a lis pendens.

Text: Knauer argues that the circuit court lacked jurisdiction to expunge the lis pendens filed against land court property. Knauer relies on an Intermediate Court of Appeals' (ICA's) holding that the circuit court did not have jurisdiction to order that the lis pendens, supplemental lis pendens, or stipulated judgment and order be expunged. GGS (HI), Inc. v. New York Diamond (In re 2003 Ala Wai Blvd.), 85 Hawai`i 398, 406, 944 P.2d 1341, 1349 (App.1997). We overrule the ICA's holding in GGS that only the land court can expunge a lis pendens, and thus Knauer's reliance on GGS is unavailing. Conversely, the Association argues that the circuit court had jurisdiction to expunge the lis pendens pursuant to HRS §§ 507D-2 (2001) [9] and 507D-7 (2001) [10] . The Association wrongly applies HRS chapter 507D in the instant case. First, in GGS, New York Diamond had filed a breach of contract lawsuit against GGS's predecessor in interest, ECU Hawaii, prior to GGS filing its motion to expunge the lis pendens. GGS, 85 Hawai`i at 401, 944 P.2d at 1344. New York Diamond recorded a lis pendens after serving ECU Hawaii with its complaint. Id. On November 18, 1993, New York Diamond and ECU Hawaii filed a stipulation which dismissed all the claims. GGS then filed motions in the breach of contract action to vacate the lis pendens. On September 7, 1999, the circuit court granted the motion to expunge the lis pendens, stating that New York Diamond's complaint did not constitute an action which warrants the filing and recording of a Lis Pendens. It is unclear what specific issues were appealed, but the ICA addressed whether a circuit court had jurisdiction to (1) hear the merits of a motion to expunge a lis pendens that was recorded in the land court, (2) order a lis pendens expunged, and (3) determine whether the lis pendens was valid. Id. at 403, 944 P.2d at 1346. The ICA held that, while the circuit court had jurisdiction to hear the merits of the motion to expunge and even determine whether the lis pendens was valid, it did not have the jurisdiction to order the lis pendens expunged. Id. at 401, 944 P.2d at 1344. The ICA came to this conclusion after comparing recordation in the land court registration system with recordation in the bureau of conveyances. The ICA reasoned that, because a certificate of title issued by the land court was conclusive and unimpeachable with regard to all matters contained therein, only the land court could amend the certificate of title. Id. at 405, 944 P.2d at 1348. As support for this conclusion, the ICA cited Iaea v. Iaea, 59 Haw. 648, 586 P.2d 1015 (1978) [11] and HRS § 501-196 (1993). [12] Additionally, the ICA stated that case law and statutes dictated the conclusion that, although the circuit court had jurisdiction to hear the merits of the case and determine the validity of the claims, it did not have jurisdiction to actually order the registrar to expunge the lis pendens. Iaea stands for the narrow proposition that the circuit court had jurisdiction to hear the subject matter of the dispute, i.e., the validity of a signature on a deed, but that it did not have the jurisdiction to order the land court to expunge the deed upon a finding that the signature was forged. Iaea, 59 Haw. at 649-50, 586 P.2d at 1016. Iaea does not stand for the proposition that the circuit court lacks jurisdiction to expunge a lis pendens that acts as a burden on title as opposed to an alteration of or amendment to title. This is demonstrated by this court's statement in S. Utsunomiya that a lis pendens does not prevent title from passing to the grantee, but operates to cause the grantee to take the property subject to any judgment rendered in the action supporting the lis pendens.  S. Utsunomiya, 75 Haw. at 502, 866 P.2d at 963. A lis pendens cannot alter or amend a certificate of title because a certificate of title would not be transferable unless properly amended pursuant to HRS § 501-196. HRS § 501-196 is found under the heading amendment and alteration of certificate of title. This section expressly details the actions necessary to erase, alter, or amend the registration book after a certificate of title has been entered. Examples provided within the text of HRS § 501-196 include registered interests that have ceased, new interests that have arisen, errors, marriage, divorce, and dissolution of a corporation. HRS § 501-196. A registered owner or person in interest may petition the land court for the erasure, alteration, or amendment of the certificate of title, the purpose of which would be to have the court order the entry of a new certificate. A lis pendens does not effect any erasure, alteration, or amendment to the certificate of title. The sole function of the lis pendens is to notify prospective purchasers and encumbrancers that any interest acquired by them in property in litigation is subject to decision of court[.] Black's Law Dictionary 643 (6th ed.1990); see also S. Utsunomiya, 75 Haw. at 511-12, 866 P.2d at 966-67; Harada, 4 Haw.App. at 443, 667 P.2d at 838. Thus, in GGS, the ICA erred when it relied on HRS § 501-196 to support its holding, which we now overrule, that only the land court can expunge a lis pendens asserted against land court-registered real property. [13] It is also worth noting that the ICA's opinion in GGS is perplexing because, while the ICA opines that it is permissible for the circuit court to hear the merits of the motion to expunge a lis pendens and to decide its validity, the ICA also declares that the circuit court is without authority to effectuate its decision. Based on the ICA's analysis, a litigant could have its motion to expunge heard by the circuit court and even have the lis pendens declared invalid, but would then be required to go to the land court for a hearing on whether the lis pendens should be expunged. This is neither an effective use of judicial resources nor a meaningful way in which to divide the power of the land and circuit courts. See Dorrance v. Lee, 90 Hawai`i 143, 147, 976 P.2d 904, 908 (1999), for the proposition that, with the increase of civil litigation, escalating costs to the parties, and the strain on already scarce judicial resources, there is a dire need for prompt, equitable, and cost-efficient resolution of civil disputes before trial. Id. at 147, 976 P.2d at 908 (quoting Richardson v. Sport Shinko, 76 Hawai`i 494, 510, 880 P.2d 169, 185 (1994)). Second, the Association argues that the circuit court has jurisdiction to expunge a lis pendens pursuant to HRS §§ 507D-2 and 507D-7. However, HRS chapter 507D is inapposite to the instant case. HRS chapter 507D is titled Nonconsensual Common Law Liens. A nonconsensual common law lien is defined in the statute as one that [i]s not provided for by a specific statute. HRS § 507D-2. The statute further states that [n]othing in this chapter is intended to affect. . . [a]ny lien provided for by statute. . . . HRS § 507D-3. In the present case, Knauer filed the lis pendens pursuant to HRS §§ 501-151 and 634-51 (1993). HRS § 501-151 authorizes the filing or recording of a lis pendens against registered land for actions affecting the title to real property or the use and occupation thereof or the buildings thereon. HRS § 501-151. [14] See GGS, 85 Hawai`i at 400, 944 P.2d at 1343. Similarly, HRS § 634-51 [15] authorizes the recording of a lis pendens in the bureau of conveyances to provide constructive notice of the pendency of the action to a future purchaser. Because Knauer filed his lis pendens pursuant to HRS §§ 501-151 and 634-51, his lis pendens is a statutory lien, not a common law lien. Therefore, the circuit court's jurisdiction to expunge Knauer's lis pendens is not derived from HRS chapter 507D because HRS chapter 507D does not apply to statutory liens. Finally, the circuit court has jurisdiction to expunge Knauer's lis pendens pursuant to HRS § 501-151, HRS § 501-152, and TSA International. HRS § 501-151 (1993), [16] entitled Pending actions, judgments; recording of notice, provides that notice of pendency of an action filed in state court may be recorded. Upon resolution of an action or any other disposition, HRS §§ 501-152 (1993) [17] and 501-153 (1993) [18] dictate the process by which such dispositions are registered with the land court. In this case, the defendant's motion was granted by the circuit court. Pursuant to HRS § 501-152, when construed in the context of the entire statute, the defendants were entitled to register the court's disposition, expunging the lis pendens, in the land court. This action, by the terms of the statute, expunges the earlier recorded lis pendens. In TSA International, the plaintiff-appellant, TSA International, filed a lis pendens following a failed land deal in which TSA International and the defendant-appellee, Shimizu Corporation (Shimizu), formed a partnership to develop a hotel and golf course. TSA International brought an action against Shimizu for fraud, breach of fiduciary duty, fraudulent transfer, and violation of the Racketeer Influenced and Corrupt Organizations Act. Id. at 266, 990 P.2d at 736. In conjunction with this suit, TSA International recorded a lis pendens in the land court. Shimizu filed a motion for summary judgment as to all claims. The circuit court granted Shimizu's motion. Id. at 266, 990 P.2d at 736. After TSA International filed its notice of appeal, the trial court expunged the lis pendens. On appeal, TSA International argued that the trial court lacked jurisdiction to order the expungement because the appeal had already been filed and jurisdiction was transferred to the appellate courts. This court explained that the trial court retains jurisdiction to determine matters collateral or incidental to the judgment, and may act in aid of the appeal. Id. at 265, 990 P.2d at 735. The trial court's order was affirmed. Inasmuch as all of the claims against Shimizu had been resolved in Shimizu's favor, there was no claim to support the lis pendens. Although the more narrow issue, i.e., whether the circuit court had jurisdiction to expunge a lis pendens recorded in land court, was not addressed, this court did complete a jurisdictional analysis in the context of whether the circuit court retained jurisdiction to expunge a lis pendens filed in land court after the plaintiff-appellant had filed its appeal. The analysis in TSA International leads logically to our holding in this case that the circuit court has jurisdiction to expunge a lis pendens originally recorded in the land court. In summary, the circuit court has jurisdiction to expunge a lis pendens pursuant to HRS § 501-151, HRS § 501-152, and TSA International, and thus the circuit court did not err when it asserted jurisdiction over the case. [19]