Bringing civil suit against someone who has moved out of state

(The state is Hawaii, in case it matters.)

The local nonprofit I work with has filed a civil lawsuit against a trust endowment which has stolen/mismanaged our funds. (I am happy to provide sordid details if asked, but they are probably not relevant to the question so I’ll skip for now.)

The founder/chairperson of the trust seems to have sold her home and moved out of state while the wheels of the legal system were moving excruciatingly slowly (thanks, Covid). The only address we have for her is in state, and according to our attorney, who is painfully terse, it is a “bad address.”

I realize our attorney should probably be the one to answer my questions (and I’ve just sent him an email asking), but like I said, he is extremely terse so I don’t know how insightful/detailed a response I am likely to get. Anyway, the questions:

  1. The trust that we are suing maintains its own post office office box. Are the trustees legally required to monitor/respond to mail sent to that address?

  2. The trustees have an attorney of record. Is that attorney required to communicate with his clients and pass on legal documentation related to the case that has been filed in court?

Actually, I did not ask the attorney this, but …

  1. We do know where the treasurer of the trust is - she has not left town. Presumably she has access to all the details about whether the funds are and authority to disburse them. Is it legally within the realm of possibility that a judge would issue a default judgment, based on lack of response by the trustees or their attorney, and order that the money be turned over to us?

(Obviously none of this is legal advice and I know nothing about Hawaii, legal or otherwise).

Has the complaint been served on the trustees? You say “an attorney of record”. Does that mean someone has entered an appearance in the civil action?

If you’re looking for a way to serve the trustees, then service on an attorney who has represented the trust is generally going to be insufficient unless he has authority to accept service of the summons/complaint. If the trust has been served (and this attorney has entered an appearance), then the attorney is usually going to be the appropriate person to serve with correspondence related to the proceeding. (It’s certainly possible that Hawaii has a different rule, but that’s the general rule as I understand it).

Why were the non-profit’s assets in the possession of the Trust? Is this unpaid pledge obligations?

The lawsuit and petition have been filed in court. In terms of serving the trustees, I don’t know the mechanics, but I assume that an attempt has been made to serve each of them with some kind of summons to answer the complaint. (The petition asks them to step down as trustees, to pay our legal costs, and to pay damages.) Of the five people, one has left the state and we don’t know for sure where she is (though Uncle Google may have helped me find her), one simply hasn’t picked up her mail from her PO Box,* one is in her 90s and has been hospitalized for months so I assume someone else is picking up her mail, and the other two have apparently received the petition/summons/whatever they would need to get.

As to “attorney of record,” legal involvement in this matter began with a blistering letter from our attorney to the trustees asking them to step down (in which case my non-profit would have the right to appoint a new set of trustees and we could gain control over the money) or face legal action. We then received a letter back from a local attorney saying he was representing them and future communications were to go through him, and that no, they would not step down.

A little over 10 years ago, an individual who was simultaneously executive director and chairperson of the Board of Directors for the organization raised about $250,000. She then formed a separate trust with its own separate legal status and put all the money into it. Because she was chairman of our board, she got the people who were then on the board to vote in favor of this.

She then appointed her own trustee board and we’ve had no access to the money. A couple of attorneys have told us there would probably be a criminal case against her for doing this but sadly the statute of limitations for fraud has elapsed.

(*)Re the whole PO Box thing: this is a rural community and except for people living right in the middle of town, there is no home mail delivery. So alas, people’s mailing addresses are usually just PO Boxes. Physical addresses appear on driver licenses, property tax assessments, and not much else.

This is going to depend on HI law about what constitutes service of process on a trust. Is it the trustee? Is it a designated agent? Those will be issues of state law.

In general, if people have left the area for whatever reason, even if to avoid service, you still have to serve them. You might be in the position of many others who have to make the determination of whether finding the right person and getting a judgment against them is in your financial interests, not just in the service, but in the fact that they have fled, whether there is any money to be had in the first instance. Best of luck.

Hopefully none of those people are still on your board. If they are, they should be asked to step down, as they clearly failed their fiduciary responsibilities to the NGO.

Definitely. The new person who came in when the old chair stepped away said he’d only be chair if he could start over with new people. (He also made a bunch of other sensible changes, like separating the executive director position from the chairperson of the board position - that’s an awful lot of power for one person, especially in a small community like ours.)

I don’t know if anyone is paying attention to this thread, but just in case, a small update: we have a hearing date! (May 28.) I don’t know what that means vis-a-vis my original question, but it can’t be a bad thing.