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The Honolulu Advertiser
Updated at 10:30 a.m., Wednesday, October 23, 2002

Child support agency must account for unpaid checks

By David Waite
Advertiser Courts Writer

A state judge has given the Child Support Enforcement Agency until March 31 to account for more than $3.5 million in uncashed child support checks, paving the way for thousands of parents to get payments they never received from the agency since its inception in 1986.

In a 52-page decision released yesterday, Circuit Judge Sabrina McKenna agreed with state lawyers that the state agency is meeting its obligations under state and federal law to get the child support payment checks out on time.

McKenna's ruling said the agency has a fiduciary duty to the children and custodial parents entitled to child support payments to account for outstanding and uncashed checks and checks with bad addresses since 1986.

The accounting would mean that as many as 10,000 parents could get child support payments they never received, according to lawyers who challenged the enforcement agency's practices.

McKenna's decision followed a two-week, jury-waived trial in September on a class-action lawsuit filed in 1998 by Anne Kemp, a divorced mother whose initial checks from the state agency were delayed for several months even though child support payments were being withheld from her ex-husband's paycheck and turned over to the state agency.

The agency has almost 200 employees and sends checks to about 35,000 child-support recipients a month, logging in an estimated $90 million to $95 million in child-support payments a year.

For years, parents have complained bitterly about the agency, conveying frustrations over having to chase down payments. Many have written letters to the agency and visited time and again in a story familiar to hundreds in the system.

Francis O'Brien and Christopher Ferrara, two of the Honolulu lawyers who worked on Kemp's case, hailed McKenna's ruling. They said the state Child Support Enforcement Agency will finally have to provide the detailed accounting they have sought for years.

Deputy Attorneys General Charles Fell and Diane Taira, who represented the state during the trial before McKenna, could not be reached for comment last night.

O'Brien said he believes McKenna's ruling marks the first time a state court has ruled in favor of a plaintiff class in a child support enforcement agency case. "It's a tremendous victory for people in this state who are entitled to child support," O'Brien said.

O'Brien said the lawyers will have discussions "with the court" over the next several months on how to notify people who might have claims against the agency.

In the ruling, McKenna said some $819,000 in child support checks were issued but never cashed before the agency implemented a new computer system in July 1998 and that another $1 million in child support checks have been issued since then, but never cashed.

McKenna also found that as of July 4, the agency had on hold checks totaling more than $1.7 million that had been returned to it after being marked as undeliverable because of incorrect addresses.

The judge ordered the Child Support Enforcement agency to come up with "a full and complete accounting" of the uncashed or "stale" checks. The accounting would include the first and last names of the custodial parents to whom the checks were sent arranged in alphabetical order, the check dates, the amounts and the check numbers.

The agency must also provide a second list, one that contains the same information but arranged in chronological order.

And, the agency must fully account for checks that were returned because of bad addresses.

The agency has made some headway in trying to reduce the number of checks held because of "bad address problems" by using computer cross-checks with other agencies such as the Department of Human Services, but must do more, McKenna said in her ruling.

"Despite knowing of this problem for years, the CSEA has not taken additional measures in an attempt to locate these persons," McKenna said.

As with the stale checks, McKenna ordered the agency to provide detailed alphabetical lists of the custodial parents to whom "bad address" checks were mailed, the date they were mailed, the check numbers and the amounts and to provide the same information in chronological order.

McKenna left open the option of appointing a neutral accountant to oversee the compilation of the stale checks and bad address checks.

Correction: Circuit Judge Sabrina McKenna's ruling said the agency has a fiduciary duty to the children and custodial parents entitled to child support payments to account for outstanding and uncashed checks and checks with bad addresses since 1986. A previous version of this story may have been unclear on that point.