Record on Appeal

Writ to Watch: In the Matter of the Appl. of Hon. Constr. & Draying Co.

Today, the HAWSCT will hear oral arguments at 9AM in In the Matter of the Application of Honolulu Construction and Draying Company, Ltd. v. State of Hawaii, Department of Land and Natural Resources et al., Scenic Hawaii, and Aloha Tower Development Corp., SCWC-30484, concerning the award of attorneys' fees under the private attorney general doctrine.  The Land Court awarded attorneys' fees and costs totaling over $135,000.00 to Scenic Hawaii, and the ICA reversed.

 The underlying case involved the land that is now known as Irwin Memorial Park, located mauka of the Aloha Tower Marketplace, and originally set aside as a public park.  The Aloha Tower Development Corporation later sought to expunge the public park deed restrictions in Land Court in order to build a parking structure on the land.  The Land Court denied the Corporation's petition, and awarded attorneys' fees and costs.

In an opinion authored by Judge Leonard (and jointed by Judges Foley and Fujise), the ICA held that the Land Court erred in awarded fees under the private attorney general doctrine.  The doctrine is a judicially created exception to the general rule that each party is responsible for paying its own attorneys' fees.  Fees may be awarded under the doctrine (1) if an important public policy is vindicated by the litigation, (2) consideration of the necessity for private enforcement and the magnitude of the resultant burden on the plaintiff, and (3) consideration of the number of people standing to benefit from the decision.  The ICA held that the first two elements had not been met, and thus did not address the third factor.  Therefore, the court held that the Land Court abused its discretion in awarding the fees.

On cert, Scenic Hawaii argues that (1) the ICA failed to consider the State's sudden filing of a petition which would have resulted in irreparable damage to Irwin Park and the public interest; (2) the ICA erred in reversing the Land Court's award of attorneys' fees as abuse of discretion; (3) Scenic Hawaii vindicated important public policy, (4) Scenic Hawaii's intervention into the litigation was necessary; and (5) the people of Hawaii and its visitors benefit from the decision.

For more information on this case, visit my colleage Robert Thomas's inversecondemnation.com blog here.

The HAWSCT accepted cert on May 1, 2013, and the order is available here.

The ICA's opinion is available here

The cert application is available here.

The opposition to cert is available here.

The Answering Brief filed in the ICA is available here.

The Reply Brief filed in the ICA is available here.

HAWSCT Adopts Minority Right of First Refusal Rule When a Larger Parcel of Land is Sold

Yesterday, May 14, 2013, the HAWSCT issued its opinion (authored by Justice McKenna) in Kutkowski v. Princeville Prince Golf Course, LLC, SCWC-28826, a case we designated as a writ to watch here, holding that "the sale of an undivided parcel of real property triggered a lessee's right of first refusal to purchase a small part of that property." Slip. Op. at 1-2.

The case concerned leases held by Mr. Kutkowski approximately one-half acre of land of an over thousand acre master parcel.  The License Agreement included a right of first refusal in the event that the land was offered for sale.  Later, the lease became month-to-month, and the owner eliminated rights of first refusal from its month-to-month tenancies.   The owner asked Mr. Kutkowski to sign an agreement noting the change, but he refused.  The master parcel was then sold to Princeville.  Mr. Kutkowski sued seeking to enforce his right of first refusal.  The circuit court held that he retained the right of first refusal, but that it wasn’t triggered because the decision to sell the master parcel was not a decision to sell the premises leased by Mr. Kutkowski.  The ICA agreed, but held that “the sale of the Master Parcel may not be taken as a manifestation of Princeville Corp.’s intention or desire to sell the Premises so as to entitle Kutkowski to specific performance of the Right of First Refusal[.]”  ICA Op. at 39.  According to the court, the contrary would “require judicial establishment of a price term, which would directly contradict the bargained-for rights of the parties.” Id.  The court recognized that its holding would mean that Mr. Kutkowski’s holdover tenancy would be terminated without the lessor’s consent. 

The HAWSCT reversed the ICA's judgment and remanded the case to the circuit court.  In doing so, the court reviewed the majority and minority rules adopted by other states.  "The majority rule holds that the sale of the larger parcel to a third party does not manifest the seller's intent to sell just the smaller parcel."  Slip. Op. at 14.  Under the minority rule, "the sale of the larger parcel to a third party does manifest the seller's intent to sell the smaller parcel as well."  Slip. Op. at 18.  The court adopted the minority rule.

According to the court, "[t]he minority rule accords primacy to the parties' intent in assenting to the ROFR in the first place," whereas "[t]he majority rule renders ROFR's over small parcels illusory upon the lessor's decision to include the smaller parcel as part of a larger  property sale to a third party[.]"  Slip Op. at 20-21.  Thus, the majority rule fails to enforce the parties' bargained for ROFR.

The court further held that the minority rule is in accord with Hawaii contract interpretation.  Finally, the court held that Mr. Kutkowski's remedy is specific enforcement.

The HAWSCT's full opinion is available here.

Chief Justice Recktenwald's opinion concurring in part and dissenting in part is available here. 

Appellate Attorney's Fees Justified Under Private Attorney General Doctrine

On May 2, 2013, the HAWSCT issued its opinion in Kaleikini v. Yoshioka, SCAP-11-0000611, holding that attorneys' fees could be awarded against the City and County of Honolulu to a party who successfully prosecuted an appeal, but not against the State because fees were barred by sovereign immunity.

The underlying case involved challenges to Honolulu's rail project. The challengers lost at the circuit court level, but prevailed on several of their claims on appeal. In the attorneys' fee appeal, the HAWSCT granted, in part, the request for appellate fees and denied the request for fees based on work performed at the trial court level.

As to the appellate attorney's fees, the HAWSCT held that even though the challengers (Kaleikini et al.) did not win on every appellate issue, they prevailed on the "disputed main issues" thus making them prevailing parties for purposes of the award of fees. According to the court, at the heart of each appellate issue was the "argument that an AIS must be completed in four phases of the rail project prior to any approval or commencement of the project." Slip. Op. at 10. As to this "primary argument on appeal," Kaleikini won – and, thus, was the prevailing party.

The court also held that the award of fees was justified under the private attorney general doctrine -- the doctrine that allows the award of attorneys' fees to plaintiffs "who have vindicated important public rights." Slip. Op. at 14. According to the court, Kaleikini's lawsuit (1) vindicated important public issues, including "the historic preservation and protection of iwi" (slip. op. at 15), (2) "private enforcement by Kaleikini was necessary to ensure the City and state complied" with the AIS requirements (slip. op. at 22-23), and (3) "the decision in this case benefits all citizens of the State" (slip. op. at 24).

Because the challengers to the rail project were the prevailing parties on appeal, the court awarded them attorneys' fees against the City & Count of Honolulu. However, the court declined to award fees against the State because the award of fees was barred by the doctrine of sovereign immunity. According to the court, there was no statutory or constitutional waiver by the State of sovereign immunity.

Finally, although the court awarded fees to Keleikini against the City, it reduced the award so that the fees were more in line with the prevailing hourly rate standards of the community.

The HAWSCT's full opinion is available here.

Hawaii Courts April 2013 Published Appellate Opinions

In April, the Hawaii Supreme Court issued four published opinion and the Intermediate Court of Appeals issued three. Below is a brief synopsis of each:

In State v. Cramer, SCWC-11-0000085 (April 29, 2013), the HAWSCT held that the denial of a continuance requested by the defendant to allow new counsel to prepare prior to sentencing was erroneous because the circuit court did not examine certain factors to determine whether the governmental interests outweighed the right to privately retained counsel, including the length of the delay requested, the impact the delay would have on the prosecution, witnesses, or the court, or whether the delay was for a dilatory purpose.

In Kobashigawa v. Silva, SCWC-30639 (April 26, 2013), the HAWSCT held that an objection in a motion in limine to exclude evidence is sufficient to preserve error for appellate review and no later objection at trial is needed as long as the trial court unequivocally rules that the evidence is admission in response to the motion in limine.

In Distr. Council 50 of Intern'l Union of Painters & Allied Trades v. Lopez, SCWC-28762 (April 17, 2013), the HAWSCT held that because the Department of Consumer Affair's Contractors License Board consideration of "the cost and extent of the work" is necessary in "determining if the work qualified as 'incidental and supplemental' to the project" in determining whether a C-5 specialty licensed contractor may perform jalousie window work if the contractor does not otherwise hold a specialty glazing license (generally necessary for jalousie work).

In Jou v. Schmidt, SCWC-29868 (April 16, 2013), that HAWSCT held that "[w]hen a medical provider has challenged a reduction or denial of payment from an insurer prior to exhaustion of benefits under an insured's policy, the provider's pursuit of his or her claim for those benefits, even if ultimately unsuccessful, is not unreasonable for purposes of seeking attorney's fees and costs."

In Kauai Springs, Inc. v. Planning Commission of the County of Kauai, 29440 (April 30, 2013), the ICA vacated and remanded the circuit court's decision that held that the Planning Commission of the County of Kauai erred in denying Kauai Spring's combined application for a permits that would allow the company to continue operating a spring water bottling facility on land zoned for agricultural use. Specifically, the ICA held that (1) two of the permits were not automatically approved based on the expiration of the applicable time periods, (2) the public trust doctrine related to water resources requiring the Planning Commission to consider public trust duties relating to Kauai Springs' use of the water. Because the ICA held hat the Planning Commission failed to consider the proper criteria related to its public trust duties, the court held that the case should be remanded to the Planning Commission.

In International Display Sys. v. Okimoto, 30488 (April 29, 2013), the ICA held that because a International Display Systems failed to establish that the State Department of Transportation-Airport Division acted in bad faith or arbitrarily and capriciously in cancelling the Kahului Airport Project (and the underlying solicitation of the project) due to declining economy and insufficient funds, the Administrative hearings officer did not err in dismissing the administrative hearing on IDS's bid protest (filed because the project was awarded to another bidder).

In Haw. State Teachers Ass'n v. Univ. Laboratory Sch., CAAP-12-0000295 (April 15, 2013), the ICA held that although the circuit court was correct in its decision that a motion to compel was premature, the circuit court exceeded its authority in dismissing the action. The ICA remanded the case to the circuit court to determine whether "unfair disadvantage" would result from its dismissal, and whether a stay or dismissal without prejudice is instead appropriate.

April 2013 Hawaii Appellate Statistic Round-Up

Once again we round-up the stats for the Hawaii appellate courts for the previous month.

In the month of April 2013, 102 (105 see note 1) opinions and orders were issued by the courts, up from 96 in March.  The following is a break-down of how the numbers fell:

	Hawaii Supreme Court	Intermediate Court of Appeals
Opinions	4	3
Memorandum Opinions		14 (15 see note 1)
Summary Disposition Orders		17 (19 see note 1)
Orders Granting Reconsideration		1
Orders Denying Reconsideration	6 + 2 dismissed	5
Dismissal Orders – Lack of Jurisdiction		12
Dismissal Orders – HRAP 30		6
Dismissal Orders - Other		9
Misc. Orders	2	5
Writs of Cert Accepted	4 + 1 misc.	XXXXXXXXXXXXXXXXXXXXXXXXXX
Writs of Cert Rejected	4 + 1 dismissed	XXXXXXXXXXXXXXXXXXXXXXXXXX
Mandamus Grants		XXXXXXXXXXXXXXXXXXXXXXXXXX
Mandamus Denials	6	XXXXXXXXXXXXXXXXXXXXXXXXXX
FOF/COL/Judgment		XXXXXXXXXXXXXXXXXXXXXXXXXX

HAWSCT judges issuing separate opinions this month:

Justice Acoba issued a concurring opinion (joined by Justice Pollack) in State v. Cramer here.

Justice Nakayama issued a dissenting opinion from an order accepting an amended application for cert in Assoc. of Condominium Homeowners of Tropics at Waikele v. Sakuma here.

Circuit Judge Kim (joined by Circuit Judge To'oto'o) issued a concurring and dissenting opinion in Distr. Council 50 of the International Union of Painters & Allied Trades v. Lopez here.

ICA judges issuing separate opinions this month:

Chief Judge Nakamura issued a dissenting opinion in State v. Amiral here.

Judge Leonard issued a dissenting opinion in Munoz v. Hata here.

*             *             *             *

A few observations about this month’s stats:

(1)       One of the ICA's memorandum opinions was a consolidation of two cases, and one of its SDOs was a consolidation of three opinions.  These are counted as a total of five dispositions by the Judiciary;

(2)       There were more cases disposed of this month than in any single month since we've been calculating the statistics;

(3)       The ICA issued more memorandum opinions this month than in any single month since we've been calculating the statistics;

(4)       There is slight decrease in the number of cert applications disposed of by the HAWSCT;

(5)       TIME TO DISPOSITION:

For ICA opinions, we track the time from the date the merit panel is assigned.  For HAWSCT opinions, we track the time from the date a cert application (or application to transfer or other direct appeal) is filed. The time to disposition for transfer application to the HAWSCT is generally longer than for cert applications because the parties must brief the case (if the briefing has not already been submitted to the ICA prior to transfer).  For a more detailed explanation on time to disposition visit our post on the topic here. 

HAWSCT Opinions

State v. Cramer

Cert Application =    7/31/12                                            

Disposition =              4/29/13                                    

Total time =                9 months        

Kobashigawa v. Silva

Cert Application =     3/21/12                                                                    

Disposition =              4/26/13                                      

Total time =                13 months

Distr. Council 50 of Intern'l Union of Painters & Allied Trades v. Lopez

Cert Application =    10/18/12                      

Disposition =               4/17/13                                                                            

Total time =                6 months

Jou v. Schmidt

Cert Application =     4/30/12                       

Disposition =              4/16/13                                                                            

Total time =                12 months

ICA Opinions           

Kauai Springs, Inc. v. Planning Commission of the County of Kauai

Notice of Appeal =     10/30/08                                                         

Merit Panel =              7/20/10     

Disposition =               4/30/13                                                                                  

Total time =                34 months      

International Display Sys. v. Okimoto

Notice of Appeal =     5/6/10                                                 

Merit Panel =              11/17/20       

Disposition =               4/29/13                                                                                  

Total time =                30 months

Haw. State Teachers Ass'n v. Univ. Laboratory Sch.

Notice of Appeal =     3/29/12                                                                       

Merit Panel =              12/26/12       

Disposition =               4/15/13                                                                                  

Total time =                4 months        

Law Day Interviews With Hawaii Trial & Appellate Court Judges

In celebration of Law Week, the Hawaii State Judiciary is releasing a series of videos this week featuring Hawaii trial and appellate court judges.  The interviews will be available on the Judiciary's YouTube channel here.

Here's the schedule:

Tuesday, April 30

Associate Justice Sabrina McKenna of the Hawaii Supreme Court explains the significance of Title IX.

Wednesday, May 1

First Circuit Senior Family Court Judge R. Mark Browning discusses how juveniles are treated in the family court system.

Thursday, May 2

Dan Foley, Associate Judge of the Intermediate Court of Appeals, shares how Access to Justice initiatives will help address the unmet legal needs of Hawaii residents.

Friday, May 3

Fifth Circuit District Court Judge Trudy Senda addresses the issue of fairness in state traffic court.

Limine Objection Sufficient to Preserve Appellate Error, Even if Objecting Party Admits the Evidence at Trial

On April 26, 2013, the HAWSCT issued an opinion in Lisa Kobashigawa et al. v. Joseph M.K. Silva, et al., SCWC-30639, holding that an objection in a motion in limine to exclude evidence is sufficient to preserve error for appellate review and no later objection at trial is needed as long as the trial court unequivocally rules that the evidence is admission in response to the motion in limine.

The case involved a negligence action brought by the estate of a man killed in an early morning cross-walk accident.  At trial, the trial court gave a cautionary jury instruction on the Kobashigawa's motive in bringing the lawsuit against the City and County of Honolulu.  On appeal to the ICA, the court vacated on the basis that the cautionary jury instruction had been given in error.  Because the Kobashigawa's had not objected at trial, the ICA's holding was based on the plain error doctrine.

The HAWSCT agreed with the ICA's ultimate outcome, but issued its opinion to clarify that the Kobashigawa's objection in its motion in limine was sufficient to preserve error for appellate review.

According to the HAWSCT, Hawaii case law "establishes that when a court makes a definitive pretrial ruling on the admissibility of evidence, the party that had unsuccessfully moved to exclude the evidence need not repeat essentially the same objection during trial to preserve a claim of error on appeal." Slip. Op. at 16.  Thus, the court clarified that this general rule applies to pretrial rulings that admit evidence.  Further, the court clarified "that subsequent introduction of the evidence by the party opposing the ruling also does not waive the party's claim of error on appeal." Slip. Op. at 17.

 On the Kobashigawas subsequent introduction themselves of evidence they unsuccessfully sought to have excluded from trial, the HAWSCT relied on case law out of Montana, Kentucky, and Florida to explain that such preemptive admission of adverse evidence is acceptable as "trial strategy" – a way to "minimize the prejudice that would result from admission of the evidence" by the other side. Slip. Op. at 49.

The HAWSCT's full opinion is available here.

Contractor Cannot Perform Specialty Glazing Work Without Specialty License

On April 17, 2013, the Hawaii Supreme Court issued its decision in District Council 50, of the International Union of Painters and Allied Trades and Aloha Glass Sales & Service, Inc. v. Kealii A. Lopez, SCWC-28762, holding that because the Department of Consumer Affair's Contractors License Board consideration of "the cost and extent of the work" is necessary in "determining if the work qualified as 'incidental and supplemental' to the project" in determining whether a C-5 specialty licensed contractor may perform jalousie window work if the contractor does not otherwise hold a specialty glazing license (generally necessary for jalousie work). Slip. Op. at 2.

 A C-5 specialty license allows a contractor to perform "cabinet, millwork, and carpentry remodeling and repairs."  A C-22 license allows for glazing work, including jalousie work.

 The project at issue was renovation work performed on Lanikila Elementary School.  Neither the general contractor awarded the work, nor any of its subcontractors, possessed a C-22 license. District Council 50 and Allied Trades filed a petition seeking a declaration that work requiring a C-22 license could not be performed under the general contractor's license.  According to District Council 50, to the extent that the relevant statute allows "incidental and supplemental" work to be performed under a different license, the terms should be interpreted narrowly. The Board disagreed and held that the jalousie work was "incidental and supplemental" to the renovation work. The circuit court affirmed reasoning that the Board was within its power to determine that the jalousie work fell within the "incidental and supplemental" exception. The ICA affirmed.

 On cert, the HAWSCT held that the Board's interpretation of the 'incidental and supplemental' provision was erroneous because, applying the ordinary meaning of the words, "it is apparent that the legislature meant to provide specialty contractors with a limited ability to perform work outside of their licensed specialty area."  Slip. Op. at 22.  Here, "[t]he Board's interpretation of the rules provides no limitation on the amount of specialty work that may be completed as incidental and supplemental to C-5 licensed work." Id. at 23.  Thus, the Board's "expansive interpretation" essentially created a "loophole for C-5 contractors to complete unlimited amounts of specialty work for which they do not hold the requisite licenses."  Id. at 24.  The court also held that the Board's interpretation was inconsistent with the legislative purpose of the statute  because allowing a C-5 licensed contractor such broad leeway could mean work that is poorly constructed and, thus, "present a grave risk to public health and safety."  Id. at 26.

 The full HAWSCT opinion is available here.

Circuit Judge Kim (sitting in place of Chief Justice Recktenwald, recused) concurred and dissented here.  He was joined by Circuit Judge To'oto'o (siting in place of Justice Acoba, recused).

The ICA's memorandum opinion is available here.

Writ to Watch: Minton v. Quintal

On April 17, 2013, the HAWSCT accepted cert in Eric J. Minton and Richard M. Stanley v. Sidney A. Quintal, SCWC-11-0000317, a case involving issues related to whether two stagehands were legally banned from working at events taking place at the Neil S. Blaisdell Center and the Waikiki Shell Amphitheatre.

Minton and Stanley were long-time stagehands with many years working at the Blaisdell and the Waikiki Shell when the City & County of Honolulu's Director of the Dep't of Enterprise Services banned them from working at future events after complaints were received related to their work at an Aloha Medical Mission event.  The complaints related to professionalism and the quality of sound.  Minton and Stanley challenged the ban in circuit court, but lost. 

On appeal, the ICA held that (1) the Director had "inherent and necessarily incidental" "authority to suspend persons from DES's facilities[.]" Slip. Op. at 4.  In that regard, the court also held that because the Director's action in banning the two men was part of his "internal management" authority, the decision was not subject to HRS Chapter 91 (Hawaii Administrative Procedures Act).   The ICA also held that the Director's action did not violate due process because the men failed to establish a property interest in working at DES facilities. The court further held that no protected liberty interests were violated "[b]ecause employment options within Appellants' profession remain[.]" Slip. Op. at 8.  Finally, the ICA held that the action was not arbitrary and capricious.

On cert, Minton and Stanley argue that (1) the Director's decision violated their due process rights, (2) they had a property interest protected by the Fifth Amendment, and (3) their liberty interest was violated.

The HAWSCT's order accepting cert is available here. 

The cert application is available here.

The ICA's Memorandum Opinion (Chief Judge Nakamura and Judges Foley and Leonard) is available here.

Appellate Attorney's Fee Request Not Unreasonable Even if Appeal is Ultimately Unsuccessful

Yesterday, April 16, 2013, the Hawaii Supreme Court issued its opinion in Emerson M.F. Jou, M.D. v. J.P. Schmidt, SCWC-29868, a case we designated as a writ to watch here.  In Jou, the HAWSCT held that "[w]hen a medical provider has challenged a reduction or denial of payment from an insurer prior to exhaustion of benefits under an insured's policy, the provider's pursuit of his or her claim for those benefits, even if ultimately unsuccessful, is not unreasonable for purposes of seeking attorney's fees and costs."

The underlying case involved a claim for no-fault/personal injury protection benefits.  Mr. Jou did not prevail at the administrative level, at the circuit court level, or on appeal to the ICA based on mootness because the PIP benefits had been exhausted.  However, he nevertheless requested attorneys’ fees pursuant to HRS § 431:10C-211(a).  The ICA remanded to the circuit court to determine whether the claim was unreasonable, and the circuit court denied the request for fees.  Mr. Jou argued that reasonableness must be determined at the time the claim is first instituted.

The ICA affirmed the denial of appellate attorneys’ fees, concluding:  “While that is certainly a proper consideration, it was also appropriate for the court to consider, when reviewing a request for appellate fees, whether it was reasonable to continue to pursue the claim through a secondary appeal, even though the PIP benefits had long been exhausted and the claimant had, in effect, conceded that the benefits were exhausted.”  ICA SDO at p. 4.

HRS § 431:10C-211(a) allows for the recovery of attorneys' fees even if a party is not successful on its claim for benefits.

The HAWSCT reversed the ICA and the circuit court, holding that the courts erred in concluding that Mr. Jou's claim "was unreasonable due to exhaustion of benefits were [Mr.] Jou had made his claim prior to that exhaustion." HAWSCT Slip. Op. at 20.  According to the court, "when Jou first appealed, it was uncertain whether he would recover on his claim under the circumstances, and, more importantly, there was favorable authority and policy supporting [his ultimately unsuccessful] position." Id. at 27.  Thus, Mr. Jou's appeal "was not irrational or without reason."  Id.

The HAWSCT also held that the appellate attorneys' fee request was "supported by the success of his prior claim that insurers are required to provide formal written notice of a denial or reduction of benefits to a medical provider." Id.

The HAWSCT's full opinion is available here.