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§467-18  Statute of limitation; recovery from fund


Published: 2015

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     §467-18  Statute of limitation; recovery

from fund.  (a)  No action for a judgment that subsequently results in an

order for collection from the real estate recovery fund shall be started later

than two years from the accrual of the cause of action thereon.  When any

aggrieved person commences action for a judgment that may result in collection

from the real estate recovery fund, the aggrieved person shall notify the

commission in writing to this effect at the time of the commencement of the

action and shall submit prescribed documents.  The commission may intervene in

and defend any such action.

     (b)  When any aggrieved person recovers a valid

judgment in any circuit or district court where the violation occurred against

any real estate broker, or real estate salesperson, upon the grounds of fraud,

misrepresentation, or deceit, which occurred on or after January 1, 1968, the

aggrieved person may, upon the termination of all proceedings, including

reviews and appeals in connection with the judgment, file a verified claim in

the court in which the judgment was entered and, upon ten days written notice

to the commission, may apply to the court for an order directing payment out of

the real estate recovery fund, of the amount unpaid upon the judgment, subject to

the limitations stated in this section.  For any cause of action occurring

prior to January 1, 1968, the aggrieved person must proceed against the

existing bond covering the license which was in force prior to the

establishment of the real estate recovery fund.

     (c)  The court shall proceed upon the

application in a summary manner and, upon the hearing thereof, the aggrieved

person shall be required to show:

     (1)  The person is not a spouse of debtor, or the

personal representative of such spouse;

     (2)  The person has complied with all the requirements

of this section;

     (3)  The person has obtained a judgment as set out in

subsection (b) of this section, stating the amount thereof and the amount owing

thereon at the date of the application;

     (4)  The person has made all reasonable searches and

inquiries to ascertain whether the judgment debtor is possessed of real or

personal property or other assets, liable to be sold or applied in satisfaction

of the judgment;

     (5)  That by such search the person has discovered no

personal or real property or other assets liable to be sold or applied, or that

the person has discovered certain of them, describing them, owned by the

judgment debtor and liable to be so applied, and that the person has taken all

necessary action and proceedings for the realization thereof, and that the

amount thereby realized was insufficient to satisfy the judgment, stating the

amount so realized and the balance remaining due on the judgment after

application of the amount realized; and

     (6)  That where the real estate broker or real estate

salesperson is a debtor in a bankruptcy proceeding, the aggrieved person has

obtained an order from the bankruptcy court declaring the judgment against the

real estate broker or real estate salesperson to be non-dischargeable.

     (d)  The court shall make an order directed to

the commission requiring payment from the real estate recovery fund of whatever

sum it finds to be payable upon the claim, pursuant to and in accordance with

the limitations contained in this section, if the court is satisfied, upon the

hearing, of the truth of all matters required to be shown by the aggrieved

person by subsection (c) of this section and that the aggrieved person has

fully pursued and exhausted all remedies available to the person for recovering

the amount awarded by the judgment of the court.

     (e)  Should the commission pay from the real

estate recovery fund any amount in settlement of a claim or toward satisfaction

of a judgment against a licensed real estate broker or real estate salesperson,

the license of the real estate broker or real estate salesperson shall be

automatically terminated upon the issuance of a court order authorizing payment

from the real estate recovery fund.  No real estate broker or real estate

salesperson shall be eligible to receive a new license until the expiration of

at least five years from the effective date of the termination of the license

and until the terminated real estate broker or real estate salesperson has

repaid in full, plus interest at the rate provided for in section 478-3, the

amount paid from the real estate recovery fund on the terminated real estate

broker's or real estate salesperson's account.

     (f)  If, at any time, the money deposited in

the real estate recovery fund is insufficient to satisfy any duly authorized

claim or portion thereof, the commission, shall, when sufficient money has been

deposited in the real estate recovery fund, satisfy such unpaid claims or

portions thereof, in the order that such claims or portions thereof were

originally filed, plus accumulated interest at the rate of six per cent a year.

[L 1967, c 187, pt of §1; HRS §467-18; am L 1972, c 51, §1b; am L 1984, c 68,

§1; gen ch 1985; am L 1987, c 283, §37; am L 1989, c 203, §3 and c 217, §2; am

L 1994, c 100, §11; am L 1999, c 240, §8]

 

Case Notes

 

  Where pending claims exceed available funds, funds may be

distributed pro rata to claimants.  68 H. 550, 722 P.2d 460 (1986).

  Aggrieved party must notify the commission at the time the

action is commenced.  70 H. 536, 777 P.2d 709 (1989).

  Second complaint was timely; where appellants failed to

notify real estate commission of dismissal of first complaint and of filing of

second complaint, any technical noncompliance by appellants with the statutory

requirements of subsection (a) constituted harmless error.   76 H. 39, 868 P.2d

457 (1994).

  Appeal of denial of post-judgment motion for order directing

payment of judgment out of fund dismissed for lack of appellate jurisdiction as

circuit court's jurisdiction in case had not ceased; amended default judgment

was not final judgment where claims were still pending or unresolved against

some defendants.  80 H. 270 (App.), 909 P.2d 598 (1995).