On November 13, 2014, the HAWSCT issued its unanimous opinion in Association of Apartment Owners of Discovery Bay v. Mitchell, SCWC-11-0000151, a case we designated as a writ to watch here, vacating the ICA’s decision and remanding to the circuit court to make a specific determination as to whether the refusal to participate in mediation impacted the award of attorneys' fees in the AOAO's favor.
In the underlying case, the AOAO sought declaratory and injunctive relief after Mitchell attempted to remove some of the AOAO’s board members, and was awarded summary judgment. The circuit court also entered a judgment in the AOAO’s favor for attorneys’ fees and costs. In opposing the AOAO’s request for fees and costs, Mitchell argued that the AOAO was statutorily precluded from seeking attorneys’ fees because it refused his request to mediate. Mitchell appealed the decision, but while the appeal was pending, sold his apartment in the condominium. Because he did so, the ICA determined that his appeal was moot. The ICA did, however, consider whether the award of attorneys’ fees was proper based on the prevailing party doctrine. According to the ICA, “viewing the outcome” of the proceedings but not “considering the underlying merits,” the AOAO was the prevailing party. On the issue of whether the AOAO was statutorily precluded from seeking attorneys’ fees, the ICA held that the statute did not mandate the circuit court consider the refusal to mediate in assessing fees. The ICA thus affirmed the attorneys’ fee award.
According to Section 514B-161(a): “If a party refuses to participate in the mediation of a particular dispute, a court may take this refusal into consideration when awarding expenses, costs, and attorneys’ fees.”
On cert, the HAWSCT disagreed and held that because the statute (HRS Section 514B-161(a)) contemplates that the circuit court may take into consideration the refusal to mediate, it was unclear whether the award of attorneys’ fees was appropriate since the record does not show that the circuit court did so. According to the court, “[g]iven the legislature’s intent to encourage mediation of condominium disputes, the circuit court should have address whether HRS § 524 B-161(a) applied.” Slip. Op. at 10 (footnote omitted). Thus, the HAWSCT remanded the case to the circuit court to consider, “on the record,” “whether the AOAO refused to participate in mediation, and if so, the circuit court should consider . . . such refusal in determining whether to award attorneys’ fees and costs.” Id. at 10-11.
The HAWSCT also ordered the circuit court to “scrutinize the propriety of  four time entries.” Id. at 11.
The HAWSCT’s full opinion, authored by Justice McKenna, is available here.