Court Opinion

ID: 9563415
Source: CourtListenerOpinion
Date Created: 2023-08-21 18:39:28.89498+00
Date Added: 2024-06-11T09:17:50.018536
License: Public Domain

CONCURRING AND DISSENTING OPINION OF
CIRCUIT JUDGE M. DOI
I dissent in part.
I do not agree with a portion of part III-A of the majority opinion concerning attorney’s fees for American Security Bank.
The allowance of $17,500 for the proceedings before Judge Dyer is justified. However, the allowance of fees ($20,000) for legal activity on the part of American Security Bank subsequent to those proceedings is not.
After completion of the proceedings before Judge Dyer, the Akamines did absolutely nothing further to prevent American Security Bank from satisfying its mortgage. (But even if they had, the result of the subsequent litigation was such that they should not be held liable for American Security Bank’s counsel fees since *122they would have won.) All of the subsequent litigation was the result of the controversy between American Security Bank and Hawaii National Bank as to priorities, in which the sole question was the validity of American Security Bank’s assertion of certain liens on the Aka-mine’s mortgage proceeds. American Security Bank lost in that subsequent litigation and its claim was disallowed.
The question is whether the Akamines should pay for American Security Bank’s legal fees for those subsequent proceedings, and the answer lies in where the fault is to be placed for those proceedings. The principle of fault as the basis for a determination is adopted by the majority in its treatment of the interest issue and, more to the point, is also found in the accepted principle that counsel fees are awarded only to a prevailing party.
I agree with the majority that “without question attorneys’ fees incurred in the collection and foreclosure proceedings are chargeable against Akamine & Sons and are likewise secured.” But this proposition is limited to enforcement of American Security Bank’s secured claims and, although applicable to the proceedings before Judge Dyer, it is not applicable to the subsequent proceedings for the simple reason that those subsequent proceedings involved only the assertion of claims which were not secured by the mortgage. Furthermore, it should be noted that even though invalid, the assertion of those claims in the subsequent proceedings was not resisted at all by the Akamines.
However, the majority unfairly saddles the Akamines with American Security Bank’s further legal fees on the reasoning that they were “responsible for and the cause of the subsequent proceedings”, that is, they were at fault. The sole basis for placing fault on the Akamines is that they gave a second mortgage in breach of their covenant not to do so without the consent of American Security Bank. What is being said is that had not the second mortgage been given, Hawaii National Bank *123would not have been around to contest American Security Bank’s invalid claim on the proceeds belonging to the Akamines.
It is true that without the second mortgage, Hawaii National Bank would not have been in the case. However, this is strictly a “but-for” casual proposition which does not answer the question of fault at all. It is elementary that more than a “but-for” connection is necessary in order to establish substantial cause and consequent fault.
In this case, Hawaii National Bank did nothing to prevent or hinder American Security Bank from enforcing its legitimate mortgage claims. American Security Bank can point to no damage suffered by it because of the second mortgagee’s appearance in the case, unless, of course, one is to take the absurd position that it was prejudiced because it was prevented from impressing invalid liens on the Akamines’ mortgage proceeds. Thus, the giving of the second mortgage, which is the sole basis for the majority’s conclusion, is hardly a justifiable ground on which to assess fault and counsel fees against the Akamines
On the other hand, it is obvious that but for American Security Bank’s attempt to collect its unsecured claims from the mortgage proceeds, the subsequent litigation would not have ensued. And American Security Bank lost in that attempt. It is on this fact, the fact that it lost, that fault should be placed on the bank rather than on the Akamines. This is the usual reason given for assessing costs as well as counsel fees, and there is no reason for deviating from it.»
Why should American Security Bank be entitled to charge the Akamines with counsel fees incurred by it in its assertion of claims against them which it had no right to assert in the mortgage proceedings? To ask the question is to answer it.
*124Of course, had the bank prevailed in its claim for additional liens on the mortgage proceeds, there is no doubt that the Akamines should be held responsible for the additional counsel fees. Had the bank won, it could rightfully claim that the Akamines should be held responsible even though they did nothing after the proceedings in Judge Dyer’s court, because the proposition would then be that the bank incurred the further legal fees in enforcing their valid mortgage rights and were hindered by Hawaii National Bank which came into the case through the Akamines’ breach. But those are not the facts.
It is highly unusual to see a losing party be awarded counsel fees, but more so under the circumstances of this case where the one unfairly compelled to pay is the party who was declared the winner in absentia without even resisting the losing party’s unwarranted claims.