Koga Engineering & Construction, Inc. v. Castle Hills Ventures

OPINION OF THE COURT BY

BURNS, C. J.

Plaintiff Koga Engineering and Construction, Inc. (Koga), appeals the lower court’s September 24, 1986 Order Directing Lien to Attach, which partially granted and partially denied Koga’s March 12, 1986 Lien Application. The order apportioned liens totaling $359,832.86 against various fee and lease interests in the various land subdivisions and improvements involved in this case.¹ Being dissatisfied with less than a $379,101.70 lien against the entire property, Koga appealed. We conclude that the September 24, 1986 Order Directing Lien to Attach is a nonappealable interlocutory order.

The dispositive issue is whether Koga can immediately as of right appeal the September 24, 1986 order partially granting and pardally denying its lien application. Our answer is no. Koga must first obtain permission under Hawaii Revised Statutes (HRS) § 641-l(b) or Hawaii Rules of Civil Procedure (HRCP) Rule 54(b) as appropriate.

The issue decided by the lower court was whether there was probable cause for the attachment of the $379,101.70 lien sought by Koga on the entire property. See HRS § 507-43(a). The lien imposed expires “three months after the entry of the Order Directing Lien to Attach unless proceedings are commenced within that time to collect the amount due thereon by enforcing the same.” HRS § 507-43(e). On November 5, 1986 Koga filed First Circuit Civil No. 86-4150 for foreclosure of its lien and a deficiency judgment. That case is now in the pretrial stage.

In VTN Pacific, Inc. v. Bishop Development, Inc., 58 Haw. 104, 565 P.2d 980 (1977), the Hawaii Supreme Court held that a mortgagee could not immediately as of right appeal an order granting a lienor’s lien application. The court expressly left open the question of whether in some situations a lienor can immediately as of right appeal an order denying a lien application. The court did not specifically address the situation presented in the instant case where the lienor immediately appealed an order partially granting and partially denying its lien application.

In our view, an order directing a lien to attach which partially grants and partially denies a lienor’s lien application is merely an interlocutory step in the lienor’s quest for foreclosure, deficiency judgment, and payment. If an interlocutory appeal by the lienor is warranted, it can be authorized under HRS § 641-1(b) or HRCP Rule 54(b) as appropriate. There is no compelling reason to create an exception to the general rule by permitting the immediate as of right appeal of such interlocutory orders.

Wesley H. Sakai, Jr., and John A. Morris (Bendet, Fidell & Sakai) on brief for lienors-appellants Koga Engineering & Construction, Inc., and Grace Pacific Corporation. Neil F. Hulbert and Harlan Y. Kimura (Hong, Iwai and Hulbert) on brief for respondent-appellee Bank of Honolulu. John R. Aube (Cades Schutte Fleming Wright) on brief for respondent-appellee The Fathers of the Sacred Hearts. Michael D. Tom and Audrey E. J. Ng (Goodsill Anderson Quinn & Stifel) on brief for respondents-appellees American Savings and Loan Association and FCA American Mortgage Corporation. James T. Paul, Shelby Anne Floyd, and Deborah M. Gotthhel (Paul, Johnson & Alston) on brief for respondent-appellee Deseret Pacific Mortgage Corp. Wayne Nasser (Ashford & Wriston) on brief for respondentsappellees Individual Castle Hills Homeowners.

This appeal is dismissed for lack of appellate jurisdiction.

1 The lower court imposed the following liens:

1. The subdivision proper:

a. $3,699.03 on Castle Hill Venture’s (Developer’s) leasehold interest in each of the 85 unsold house lots, totaling $314,417.55.

b. $2,108.90 on the fee interest of the Fathers of the Sacred Hearts (Fathers) in the setback parcel.

c. No lien on the 38 lots sold in fee or leasehold to the Homeowners.

d. No lien on the subdivision stieets.

2. The agricultural lot: $4,695.24 on Developer’s leasehold interest.

3. The park: $23,655.81 on the Fathers’ fee interest.

4. The seminary lot: $14,955.36 on the Fathers’ fee inte;est.