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

Heading: failure to address the Receiver's alleged misconduct

Text: Hawaii Ventures argues that the Special Master failed to address numerous allegations of breaches of the appointment order and waste of the Estate's assets by the Receiver and her professionals. As such, Hawaii Ventures contends that the circuit court erred in approving and adopting the Special Master's report without conducting its own inquiry. The Special Master was specifically appointed to review, investigate, and make recommendations on the issues raised in the Receiver['s final report], including any related issues that must necessarily [be] addressed to perform his duties as the Special Master. The Special Master was informed of Hawaii Ventures' concern regarding Receiver Park's conduct, as Hawaii Ventures concedes that it detailed for the Special Master the many breaches of the appointment order in its position statement. Although the Special Master did not specifically address all of the allegations of breaches asserted by Hawaii Ventures, he indicated that he had considered all of the issues raised by the parties' position papers and respective responses and ha[d] chosen to address only those outstanding issues he deem[ed] relevant in regard to resolving this [r]eceivership. The [Special Master] recommend[ed] that issues which would reduce the . . . Estate without commensurate return be denied for purposes of preventing further erosion of the . . . Estate. (Emphasis added.) Thus, based upon his examination of the payments made by Receiver Park, the Special Master concluded that, [a]lthough your Special Master disagrees with the payment of certain pre-receivership liabilities by the Receiver, the [Special] Master finds that such disputed payments do not rise to the level of `bad faith' or `fraud.' (Emphasis added.) (Footnote omitted.) Accordingly, the Special Master did not fail to address issues concerning Receiver Park's misconduct. Moreover, there was no reason for the circuit court to conduct its own inquiry concerning the Receiver's conduct, particularly when (1) the issue had been considered by the Special Master and (2) Hawaii Ventures did not provide the circuit court with any reason to disregard the Special Master's finding and initiate its own inquiry into the Receiver's conduct. See Taomae v. Lingle, 108 Hawai`i 245, 257, 118 P.3d 1188, 1200 (2005) (stating that the court may disregard points of error when the appellant fails to present discernible arguments supporting those assignments of error). Nonetheless, Hawaii Ventures maintains that, [b]y accepting the Special Master's contention that bad faith is the only standard by which the Receiver is bound, the circuit court surrendered control of its receivers and any requirement of compliance with its [a]ppoint[ment o]rder. Such a contention, however, ignores the fact that 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 omissions constitute bad faith or fraud. (Emphases added.) The Special Master clearly acknowledged the standard dictated by the appointment order  which Hawaii Ventures itself drafted  in determining Receiver Park's conduct. [19] Accordingly, Hawaii Ventures' assertion that the circuit court erred in approving the Special Master's report without conducting its own inquiry into the Receiver's conduct is without merit.