In rock and hard place, BoH files for interpleader
Faced with possible new legal action by both the American Samoa Government and Marisco Limited, the Bank of Hawai’i has filed with the federal court in Honolulu a motion for “interpleader”, which requests among other things, to order BoH to deposit the more than $800,000 in ASG frozen funds with the clerk of the federal court.
Interpleader is an equitable proceeding brought by a third person to have a court determine the ownership rights of rival claimants to the same money or property that is held by that third person, according to legal-dictionary thefreedictionary.com.
The new BoH motion filed Monday at federal court, comes just days after the High Court of American Samoa denied the bank’s motion for reconsideration of an earlier order to release some $811,000 in ASG money frozen by the bank, pursuant to a federal court's writ of execution ordering the bank to pay this money to Marisco, who alleges that ASG had failed to pay for services rendered.
BoH attorneys say the motion was necessary as both ASG and Marisco are threatening to proceed with new legal actions against the bank if it fails to comply with the High Court and the federal court orders.
ASG TO BANK
The High Court on Sept. 13 denied the bank motion for reconsideration and the following day, the Attorney General’s Office wrote to the bank’s local attorney to “comply with the High Court’s order to restore ASG’s unlawfully frozen bank deposits” required by the preliminary injunction relief order date July 11, 2012.
The High Court ruled that it sees no reason to the stay the preliminary injunction.
“With the High Court’s decision, there is absolutely no reason why BoH should ignore the Preliminary Injunction and continue to retain ASG’s money,” wrote Assistant Attorney General Eleasalo V. Ale on behalf of attorney general Fepuleai A. Ripley Jr. in the Sept. 14 letter, which BoH included in its new motion at the federal court.
ASG requests that BoH restore the frozen funds by 5 p.m. Sept. 17th (Monday) “or ASG will be forced to seek appropriate remedies from the High Court, including any possible sanctions that may result,” the letter says. (Samoa News was not unable to immediately confirm at press time if ASG did file a new action with the High Court)
“I hope that you will encourage your client to comply with the laws of American Samoa and the valid orders of the High Court,” it says.
(See yesterday’s edition for details of the High Court decision denying the bank’s motion to stay the injunction.)
Marisco, through its attorneys, sent an e-mail last Friday to the bank’s Honolulu attorney saying that the company had agreed to allow BoH an opportunity to have the High Court reconsider its prior order.
“We were dismayed that the High Court’s denial did not even mention the recent order” by U.S. District Court Judge Leslie Kobayashi, according to the e-mail from Marisco’s attorney Mark Desmarais, and the email message is included in the bank’s motion.
“We understand that BoH is in a difficult situation; however, Judge Kobayahi’s order was well reasoned and ASG should not complain since it agreed to [federal court] jurisdiction in this matter,” Desmarais said. “ASG’s forum shopping to try to involve the High Court should be seen for what it is.”
Desmarais also noted that there is no stay pending the current appeal by ASG of Kobayahi’s order and no bond has been posted.
“Marisco now demands payment of the funds due to it plus accrued interest in accordance with… Kobayahi’s order,” he said, adding that he is sure the bank understands that the “judgement has been unpaid for many months and unless the line is drawn now, ASG will continue to string things out.”
Kobayashi had declared that the federal court in Honolulu has “exclusive jurisdiction” over the federal lawsuit by Marisco against ASG, who waived all rights in this case under a federal Arbitration Agreement. Kobayashi ordered the bank to release to Marisco the more than $800,000 frozen at the ASG account to pay for the outstanding debts.
BOH’S NEW MOTION
“BoH has no interest whether Marisco or ASG ultimately prevails as to the disputed assets,” according to the bank’s motion. “However, it cannot comply with this Court’s Order to Pay Marisco, and at the same time comply with the High Court’s Order to Pay ASG.”
“Compliance with the orders of one court is tantamount to noncompliance with the orders of the other court,” it says and noted that BoH “is a neutral stakeholder in this dispute and, through no fault of its own, finds itself subject to conflicting judicial orders.”
BoH asked the federal court to grant its motion on such terms as this Court considers appropriate, including ordering BoH to deposit the disputed funds to the clerk of the federal court, and directing the clerk to make disposition of the funds consistent with this Court’s order.
Pursuant to federal regulation and federal court’s inherent powers, BoH further requests that ASG and Marisco be restrained from instituting or prosecuting any proceedings with respect to these funds, including further proceedings in the High Court.
“Specifically, BOH asks that all attorneys for ASG, including counsel of record in this action as well as Fepulea’i Arthur Ripley, Jr., Attorney General of American Samoa, a member of the bar of this Court, and those acting under color of his authority, including his regular and special deputies, be enjoined from further proceedings with respect to the disputed funds in the High Court,” it says.
According to the bank, “it would defeat the entire purpose and effect of the Hawaii litigation if ASG and its Attorney General, or his deputies — or Marisco — are permitted to run to another court to seek relief that is inconsistent with this Court’s rulings.”
It says an order restraining ASG and Marisco “is both appropriate and essential.”
In a separate motion, the bank requested the court for an expedited hearing on this matter.