Court Opinion

ID: 4385987
Source: CourtListenerOpinion
Date Created: 2019-04-11 00:02:42.950496+00
Date Added: 2024-06-11T14:50:24.914366
License: Public Domain

Electronically Filed
                                                      Supreme Court
                                                      SCAD-XX-XXXXXXX
                                                      10-APR-2019
                                                      11:18 AM
                          SCAD-XX-XXXXXXX

           IN THE SUPREME COURT OF THE STATE OF HAWAI#I

            IN RE: CHARLES J. FERRERA, ESQ., (Deceased)

                        ORIGINAL PROCEEDING

                               ORDER
(By: Recktenwald, C.J., Nakayama, McKenna, Pollack, and Wilson, JJ.)

           Upon consideration of the February 8, 2019 motion to

partially disburse funds, filed by attorney Allen K. Williams as

trustee over the legal practice of deceased attorney Charles J.

Ferrera, the declarations and exhibits attached thereto, the

February 20, 2019 submission from the Office of Disciplinary

Counsel (ODC) concerning the motion, and a review of the entire

record in this matter, we conclude that $47,000.00 of the funds

in the client trust account formerly maintained by attorney

Ferrera are the property of Anita Kinimaka-Davis and should be

disbursed to her.   We further conclude that the requested

disbursements of $5,645.38 to the Sue V. Hansen Client Trust

Account, and a disbursement of $7,499.91 to the Schutter Dias &

Smith Client Trust Account, for further disbursement to former

clients of Ferrera’s, are justified and warranted.   We also

concur with Trustee Williams’s assessment of $6,501.00 of the
funds in the account.   With regard to the remaining funds in the

client trust account, totaling $8,053.01, we note the thorough

investigation undertaken by Trustee Williams, unsuccessfully, to

establish the rightful owner or owners of the funds, and thank

him for his diligence and persistence in the matter.   We also

note that before January 1, 2014, Rules 1.15(a) and 1.15(c) of

the Hawai#i Rules of Professional Conduct (HRPC) (1994) required

attorneys to hold   client funds separately in a client trust

account, with the lawyer acting as a fiduciary, and required the

lawyer to immediately withdraw earned fees, in order to avoid

violating the prohibition against commingling the attorney’s

funds with client funds in the account.   We note that, since

January 1, 2014, HRPC Rule 1.15 (2014) and Rule 4(a) of the Rules

Governing Trust Accounting impose similar duties and

prohibitions.   We therefore conclude, based upon an assumption

that attorney Ferrera faithfully adhered to the obligations and

duties imposed upon him by the HRPC, that the remaining funds in

the account, absent evidence to the contrary, do not belong to

attorney Ferrera but, rather, to unknown clients.   Given the

unknown ownership of the funds, we conclude HRS Chapter 523A

applies to them and further conclude that, absent submission of

sufficient proof of ownership to Trustee Williams or a successor

trustee, by claimants, including the Personal Representative of

Ferrera’s estate, the funds will be deemed abandoned as of

December 2, 2023 (being five years from the date of the

publication of Trustee Williams’s trusteeship) and eligible to

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escheat to the State at that time.     See HRS §§ 523A-3(a)(15),

523A-5(3)(B) (2018).   Finally, we concur with ODC’s assessment

that, given the pro bono nature of Trustee Williams’s service,

the general record of Ferrera’s practice, and the cooperation of

the attorney and personal representative of Ferrera’s estate,

only minimal costs are likely to accrue during the completion of

this trusteeship, and no fees or claims.     Therefore,

          IT IS HEREBY ORDERED that Trustee Williams is

authorized to disburse $47,000.00 from Ferrera’s client trust

account to Anita Kinimaka-Davis.

          IT IS FURTHER ORDERED that Trustee Williams is

authorized to disburse $5,645.38 in funds from the client trust

account to the Sue V. Hansen Client Trust Account, in order that

former co-counsel, attorney Hansen, can further disburse those

funds to the care of Allicyn Hayes as guardian for Minor C.N.,

pursuant to the terms of the First Circuit Court’s April 6, 2018

order in the record.

          IT IS FURTHER ORDERED that Trustee Williams is

authorized to disburse $7,499.91 from the client trust account to

the Schutter Dias & Smith Client Trust Account, in order that

Ferrera’s former co-counsel, attorney Paul Smith, can disburse

those funds to the appropriate clients.

          IT IS FURTHER ORDERED that Trustee Williams shall

obtain appropriate written recognition from Ms. Kinimaka-Davis

and attorneys Hansen and Smith of the receipt of the funds, and

shall file the documents in the record of this case, with

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sensitive account information omitted or redacted.

          IT IS FURTHER ORDERED that Trustee Williams shall

maintain $6,501.00 in the client trust account, pending

completion of his investigations into the Ramos representation

and the possible identity of the rightful owners of those funds.

          IT IS FURTHER ORDERED that Trustee Williams may cease

further active attempts to discover the identity of the owner or

owners of the remaining $8,053.01 in funds held in the client

trust account.   Trustee Williams, and successor trustees, shall

maintain $8,053.01 in the client trust account until further

order of this court.

          IT IS FURTHER ORDERED that Trustee Williams shall, out

of an abundance of caution, reassert the unliquidated claims on

behalf of ODC, the Disciplinary Board of the Hawai#i Supreme

Court, and the Lawyers’ Fund for Client Protection in the probate

matter regarding Ferrera’s personal estate.

          DATED: Honolulu, Hawai#i, April 10, 2019.

                                     /s/ Mark E. Recktenwald

                                     /s/ Paula A. Nakayama

                                     /s/ Sabrina S. McKenna

                                     /s/ Richard W. Pollack

                                     /s/ Michael D. Wilson

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