Prospective Due-Process Notice for Junior Judgment Lienholders in Hawaiʻi Execution Sales

1. Introduction

In Winn v. Brady, SCWC-17-0000806 (Haw. June 13 2025), the Hawaiʻi Supreme Court delivered a landmark opinion redefining the procedural safeguards owed to junior judgment lienholders when a creditor executes upon real property. The Court held that:

A judgment recorded under Hawaiʻi Revised Statutes (HRS) § 636-3 automatically creates a Constitutionally protected property interest.
Before an execution sale under HRS Chapter 651 can extinguish that lien, the junior lienholder is entitled to notice “consistent with due process,” which—on the facts of this case—required personal notice rather than mere notice by publication.
Because this is a new rule with potentially sweeping effects on past transactions, the Court applied it prospectively only, i.e., to writs of execution filed after June 13 2025.

The plaintiffs-appellants, Peter J. Winn and Westminster Realty, Inc. (collectively “Winn parties”), were junior judgment creditors whose lien was wiped out by an execution sale initiated by senior judgment creditors Beverly and James Spence (“Spences”). The Spences complied with the explicit statutory publication requirements but gave no individual notice to the Winn parties. Winn challenged the sale, asserting a due-process violation.

2. Summary of the Judgment

The Supreme Court affirmed in part and reversed in part the Intermediate Court of Appeals (ICA). Specifically, it agreed with the ICA that:

A recorded judgment lien under HRS § 636-3 is a protected property interest.
An execution sale is “state action,” so constitutional protections apply.
Publication alone was inadequate notice under the circumstances; personal notice was required.

However, the Court disagreed with the ICA’s decision to grant Winn any retroactive relief. Employing its discretionary power, the Court limited the new rule to future cases, leaving the Spences’ title undisturbed and the Winn lien extinguished.

3. Detailed Analysis

3.1 Precedents Cited and Their Influence

Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950) – The seminal U.S. Supreme Court decision holding that notice must be “reasonably calculated” to apprise interested parties.
Used by the Hawaiʻi Court (quoting via Klinger v. Kepano) to measure the sufficiency of the Spences’ publication notice.
Klinger v. Kepano, 64 Haw. 4, 635 P.2d 938 (1981) – Recognized publication notice as constitutionally adequate only when other methods are impracticable. Provided the “Hawaiʻi adaptation” of Mullane.
Protect & Preserve Kahoma Ahupuaʻa Ass’n v. Maui Planning Comm’n, 149 Haw. 304 (2021) – Articulated the two-step due-process inquiry: (1) existence of a protected interest, (2) adequacy of procedures. Supplied the analytic framework.
Bank of Hawaiʻi v. Shinn, 120 Haw. 1 (2008) – Had labeled § 636-3 liens “automatic,” but had not addressed constitutional status. The Court now built on that dictum to reach the constitutional conclusion.
Out-of-state cases—New Brunswick Sav. Bank v. Markouski (N.J.), In re Upset Sale (Pa.), Central Trust Co. v. Spencer (Ohio)— affirmed that many jurisdictions treat a judgment lien as a property right. These persuasive authorities bolstered the Court’s reading of § 636-3.

3.2 The Court’s Legal Reasoning

State Action. A writ of execution is issued and confirmed by a court; hence it is “state action” despite the involvement of a private process server (§ 651-1(c) notwithstanding).
Existence of a Protected Interest. The plain language of § 636-3—“shall be a lien”—shows legislative intent to grant a property interest. Historical context (1913 Act 32) aimed to protect creditors from “quick sales” by debtors. Consequently, a recorded judgment lien merits due-process protection under the Hawaiʻi Constitution, Article I, § 5.
Required Notice. Applying Mullane/Kepano, the Court held that where the senior creditor knows the lienholder’s identity and contact information, personal notice is feasible and publication is inadequate. The Spences had phoned Winn, so personal notice was plainly practicable.
Prospective Application. Employing the Jess / League of Women Voters three-factor test: (a) Purpose—fairness to lienholders; (b) Reliance—parties have long relied on § 651-43’s publication scheme; (c) Administration—retroactivity could cloud countless titles. Equity and stability therefore required prospectivity.

3.3 Potential Impact on Future Litigation and Practice

Execution-Sale Procedures Revised. From June 13 2025 forward, creditors pursuing execution sales must search the Bureau of Conveyances for junior judgment liens and provide those lienholders with individual notice (mail, personal service, or other method reasonably calculated to reach them).
Title Companies & Escrow. Underwriters will likely add due-diligence steps to confirm that any post-2025 execution deed stems from a sale where junior lienholders received proper notice.
Legislative Pressure. HRS § 651-43 dates from 1859; the decision effectively “modernizes” it judicially. The legislature may codify notice requirements, set timelines, or create a registry interface with the Bureau of Conveyances.
Litigation Strategy for Junior Creditors. Junior judgment creditors now have stronger leverage: failure to receive personal notice after 2025 can invalidate an execution sale (unless other equitable barriers arise).
Retroactivity Shield. By limiting the rule to future writs, the Court insulated past sales, reducing transactional risk for existing owners and lenders.

4. Complex Concepts Simplified

Judgment Lien (HRS § 636-3): When someone wins a money judgment in court and records it at the Bureau of Conveyances, the judgment automatically attaches to any real estate the debtor owns in Hawaiʻi. It’s like putting a “sticky note” on the property that says, “If the property is sold, this debt must be paid.”
Execution Sale (HRS Chapter 651): A court-supervised auction of the debtor’s property to satisfy a judgment. The winning bidder gets a deed; junior liens are usually wiped out, but senior liens survive.
State Action: Conduct that is fairly attributable to the government. When a court orders and confirms a sale, that sale becomes state action, triggering constitutional protections even if private parties conduct the auction.
Due Process Notice: The Constitution requires that the government give people adequate notification before taking away their property. The notice must be reasonably certain to reach them if feasible; “newspaper ads only” are usually a last resort.
Prospective Application: A court sometimes limits a new rule to future cases to avoid unfairly disrupting transactions that relied on older law. Here, any writ of execution filed after June 13 2025 must follow the new notice rule.

5. Conclusion

Winn v. Brady crystallizes two critical propositions in Hawaiʻi real-property enforcement:

Recording a judgment under HRS § 636-3 gives the creditor a constitutionally protected interest in the debtor’s real estate.
Senior creditors conducting execution sales after June 13 2025 must give junior judgment lienholders personal notice when they can easily identify them.

By simultaneously acknowledging due-process rights and shielding existing titles through prospective application, the Court balanced fairness to lienholders with stability in land markets. Creditors, title professionals, and legislators alike must now adjust procedures to honor these enhanced notice obligations.