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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