From Court House News

A Hawaii family and a developer filed a federal class action against every Circuit Court judge in Hawaii, accusing them of using “ancient judge-made procedures” to enforce foreclosure judgments.

Jerry Agbannaoag, Ke Kailani Development et al. claim the judges’ practice fostered the “flipping” of properties and unjustly enriched lenders.

Michael J. Fuchs, the founder of Home Box Office, is also a plaintiff.

They sued the honorable judges of the First, Second, Third and Fifth Circuits of Hawaii – all 32 judges.

“Hawaii courts matter-of-factly merely assume routinely when determining and enforcing foreclosure deficiency judgments that the confirmed sale price minus the net proceeds of sale controls and mathematically determines by subtraction the monetary deficiency amount,” the complaint states.

“This procedure completely ignores reality,” the plaintiffs say. They call it an “arbitrary and mechanical method” that fails to protect borrowers.

The plaintiffs claim other states have passed laws against the practice.

“Today, many state legislatures have passed anti-deficiency statutes, requiring that after a foreclosure auction, state courts must hold a separate, evidentiary hearing to determine the ‘fair value’ of the foreclosed property, which is not necessarily the ‘auction price,'” they say in the complaint.

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