§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).