Schmidt v. HSC, Inc.Annotate this Case
In this case involving $537,000 in excess foreclosure sale proceeds the Supreme Court vacated the judgment of the intermediate appellate court (ICA) and the circuit court's final judgment in favor of Respondents, holding that the circuit court's determination that Petitioners could have reasonably known of certain transfers and their fraudulent nature on or before February 21, 2005 contravened this Court's ruling in Schmidt II.
Petitioners obtained a final judgment for the excess proceeds but later learned that those same proceeds were already transferred. Petitioners then brought a complaint alleging that the proceeds were fraudulently transferred. The circuit court entered judgment in favor of Respondents. The ICA concluded that Petitioners' claim under Hawai'i Uniform Fraudulent Transfer Act (HUFTA), Haw. Rev. Stat. Chapter 651 C, should have been dismissed as untimely. The Supreme Court vacated the judgment, holding that the ICA incorrectly held that the statute of limitations ran from the date of the transfer rather than from the date that Petitioners discovered the fraudulent nature of the transfer. On remand, the circuit court concluded that Petitioners' claims were time barred. The ICA affirmed. The Supreme Court reversed, holding that the statute of limitations for Petitioners' HUFTA claim did not begin until July 26, 2005, and therefore, Petitioners timely raised their claims.