On January 16, 2020, Circuit Court Judge James H. Ashford denied a motion to dismiss a lawsuit accusing attorney Dexter Kaiama of multiple violations of Hawaii’s Mortgage Rescue Fraud Prevention Act.

The decision means a lawsuit seeking to bar Kaiama and associates from providing any assistance in the future to consumers facing foreclosure actions can now move forward.

The civil lawsuit was originally filed by the Office of Consumer Protection in April 2019. It alleges Kaiama violated multiple provisions of Hawaii’s Mortgage Rescue Fraud Prevention Act when he accepted payments to make special courtroom appearances in foreclosure proceedings.

In cases described in the OCP complaint, Kaiama allegedly made the “special appearances” in court on behalf of consumers recruited and advised by sovereignty activist David Keanu Sai and a third person, Rose Dradi. Sai allegedly provided clients with legal documents to be filed in court on a “pro se” basis, where the clients represented themselves without the benefit of counsel. Sai and Dradi are not attorneys, so could not appear in court to make the critical sovereignty arguments on their client’s behalf. Instead, OCP alleges, Kaiama, as a licensed and practicing attorney, was paid to make “special appearances” in court to present Sai’s sovereignty argument.

Kaiama has gained a measure of prominence for actively promoting Sai’s theory that Hawaii courts lack jurisdiction in foreclosure cases because land titles were rendered invalid by “illegal” overthrow of the Hawaiian Kingdom and Hawaii’s annexation to the U.S. and eventual statehood. He has made similar arguments on behalf of sovereignty activists facing other charges, including criminal charges.

OCP’s lawsuit alleges violations of three specific provisions added to the law in 2016 that require (a) an attorney to have a written contract with a client, (b) to deposit client’s funds into a separate trust account, and (c) for the funds to remain in the trust account until all services were “fully performed.”

OCP has argued elsewhere that failure to comply with these provisions constitutes “unfair and deceptive trade practices.”

Kaiama’s attorney, Steve Laudig, maintained the mortgage rescue fraud statute’s provisions applying to lawyers are unconstitutional because the State Constitution gives the State Supreme Court, and not the legislature, the sole power to regulate the practice of law.

In addition, Laudig argued Kaiama is a victim of retaliation because of his advocacy of Hawaiian sovereignty in a variety of court proceedings.

The SOH (State of Hawaii) is using legal process against Attorney Ka?iama because he has made, and continues to make, a certain legal arguments which challenges the international and domestic lawfulness and constitutionality of the United States Government presence in the Hawaiian Islands. Attorney Ka’iama is targetted by the SOH because of his advocacy of a particular legal theory not for any business or commercial activities on behalf of a client.

As the case moves forward, the Office of Consumer Protection is seeking an injunction to prevent Kaiama or associates from representing any distressed property owners in foreclosure cases in the future, along with civil fines and penalties of $10,000 for each violation of state law, and additional fines for each case in which the clients allegedly harmed were over age 62. Finally, OCP has asked the court to declare all contracts between Kaiama and distressed homeowners “void and unenforceable.”

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