Justia Hawaii Supreme Court Opinion Summaries

In this foreclosure case, the Supreme Court held that the circuit court's award of a forfeited down payment as damages to the Association of the Owners of the Kumulani of the Uplands at Mauna Kea, creditors in the judicial foreclosure action, was an abuse of discretion.In response to a pair of post-judgment motions, the circuit court entered two orders. The first order found OneWest Bank, F.S.B., the foreclosing mortgagee and winning bidder at the foreclosure auction, liable for damages in an amount equal to its down payment for failure to close the foreclosure sale. The second order awarded the down payment as expectation damages to the association, a junior lienholder. On appeal, OneWest challenged the circuit court's jurisdiction to assess damages against OneWest and award them to the association. The Supreme Court held that because, pursuant to Haw. Rev. Stat. 667-3, creditors in a judicial foreclosure action are entitled to payment according to the priority of their liens, the circuit court erred by awarding damages to the Association rather than by applying the down payment amount to reduce the debt owed to OneWest. View "OneWest Bank, F.S.B. v. Ass'n of the Owners of the Kumulani at the Uplands at Mauna Kea" on Justia Law

The Supreme Court affirmed in part and vacated in part the judgment of the intermediate court of appeals (ICA) in this litigation concerning a dispute arising from a 1999 contract regarding the sale of approximately twenty-three acres of land in Honualua Maui, holding the the ICA erred by holding that Wailea Resort Company was clearly entitled to certain funds but otherwise did not err.The parties in this consolidated appeal were Michael Szymanski, Wailea, and ADOA-Shinwa Development and Shinwa Golf Hawai'i Company (collectively, Shinwa). Szymanski filed this application seeking a writ of certiorari raising seven questions. The Supreme Court held (1) the questions relating to the disqualification of the Honorable Rhonda I.L. Loo were without merit; (2) the ICA did not err in its application of the law of the case doctrine to the issue of whether the ICA gravely erred when it declined to review whether the Honorable Peter T. Cahill's 2015 order entering final judgment improperly dismissed with prejudice Szymanski's third-party complaint against Shinwa; and (3) the ICA erred by holding that Wailea was clearly entitled to certain funds and by affirming the circuit court's disbursal of funds. View "Title Guaranty Escrow Services, Inc. v. Wailea Resort Co., Ltd." on Justia Law

The Supreme Court answered three modified questions certified to it by the United States District Court for the District of Hawai'i in a federal court lawsuit where a grantor asserted that an escrow company's alleged deletion of an easement from the property description attached to a deed he executed rendered the deed a forged deed that was void ab initio and the escrow company and grantee asserted that the grantor's claim sounded in fraud and was barred by a statute of limitations.The Supreme Court held (1) a deed is void ab initio for fraud such that a claim challenging the validity of the deed is not subject to a statute of limitations under certain circumstances; (2) the six-year "catch-all" statute of limitations under Haw. Rev. Stat. 647-1(4) applies to a claim that a deed was procured by fraud of the type that does not render it void ab initio, such as fraud in the inducement and constructive fraud; and (3) the statute of limitations begins to run on a grantor's claim that a deed was procured by fraud of the type that does not render it void ab initio when the grantor discovers or should have discovered the existence of the claim or the person liable for the claim. View "Hancock v. Kulana Partners, LLC" on Justia Law

In this case involving $537,000 in excess foreclosure sale proceeds the Supreme Court vacated the judgment of the intermediate appellate court (ICA) and the circuit court's final judgment in favor of Respondents, holding that the circuit court's determination that Petitioners could have reasonably known of certain transfers and their fraudulent nature on or before February 21, 2005 contravened this Court's ruling in Schmidt II.Petitioners obtained a final judgment for the excess proceeds but later learned that those same proceeds were already transferred. Petitioners then brought a complaint alleging that the proceeds were fraudulently transferred. The circuit court entered judgment in favor of Respondents. The ICA concluded that Petitioners' claim under Hawai'i Uniform Fraudulent Transfer Act (HUFTA), Haw. Rev. Stat. Chapter 651 C, should have been dismissed as untimely. The Supreme Court vacated the judgment, holding that the ICA incorrectly held that the statute of limitations ran from the date of the transfer rather than from the date that Petitioners discovered the fraudulent nature of the transfer. On remand, the circuit court concluded that Petitioners' claims were time barred. The ICA affirmed. The Supreme Court reversed, holding that the statute of limitations for Petitioners' HUFTA claim did not begin until July 26, 2005, and therefore, Petitioners timely raised their claims. View "Schmidt v. HSC, Inc." on Justia Law

The Supreme Court affirmed the trial court's determination that the State breached its constitutional trust duties by failing reasonably to monitor or inspect trust land at issue in this case, holding that an essential component of the State's duty to protect and preserve trust land is an obligation to reasonably monitor a third party's use of the property, regardless of whether the third party has in fact violated the terms of any agreement governing its use of the land.The State leased three tracts of ceded land to the United States for military purposes. Plaintiffs filed a complaint alleging that the State, as trustee of the state's ceded lands, breached its trust duty because it was aware of the possibility that the land leased to the United States contained munitions and explosives but had not taken concrete steps to investigate or ensure the United States's compliance with the lease. The trial court entered judgment in favor of Plaintiffs. The Supreme Court primarily affirmed, holding (1) the circuit court correctly determined that the State did not reasonably monitor the trust property, including the United States' compliance with the lease terms that protect trust property; and (2) the injunctive relief ordered by the circuit court was not entirely suited to remedy the breach. View "Ching v. Case" on Justia Law

In this foreclosure action, the Supreme Court affirmed the judgment of the intermediate court of appeals (ICA) vacating the circuit court's grant of summary judgment for Nationstar Mortgage, LLC but corrected the ICA's reasoning, holding that the ICA erred in holding that Nationstar's business records were trustworthy under the business records exception to hearsay and that Daniel Kaleoaloha Kanahele's affirmative defenses should have been addressed by the circuit court.After Kanahele defaulted on a loan, Nationstar initiated this foreclosure action. The circuit court issued final judgment in favor of Nationstar. Although the ICA vacated the judgment and remanded for further proceedings, Kanahele asked the Supreme Court to review additional issues he argued were either incorrectly resolved or left unresolved by the ICA. The Supreme Court held that the ICA erred with respect to two issues and that Kanahele would be prejudiced on remand absent the Court's further review. Specifically, the Court held (1) in light of Nationstar's failure adequately to explain material discrepancies in its business records and its presentation of contradictory declarations regarding which of several versions of Kanahele's note was the original, the ICA should have vacated the circuit court's order on this ground as well; and (2) the ICA should have clarified whether Nationstar was subject to Kanahele's affirmative defenses. View "Nationstar Mortgage LLC v. Kanahele" on Justia Law

The Supreme Court affirmed in part and vacated in part the judgment of the intermediate court of appeals (ICA) finding that no evidence was introduced at trial to support the jury's findings that Regal Capital Corporation (Regal Corp.) violated the terms of agreements of sale it entered into with Elesther Calipjo for two parcels of land, Regal Capital Co., LLC (Regal LLC) engaged in unfair and deceptive acts or practices, and Jack Purdy was the alter ego of Regal Corp. and Regal LLC, holding that the ICA's holding was error.Based on the alter ego finding, the jury determined that Purdy, too violated the agreements for the two properties and committed unfair and deceptive acts or practices. The Supreme Court held (1) there was evidence to support the jury's verdict that Regal Corp. violated the terms of the agreements, Regal LLC engaged in unfair and deceptive acts or practices, and Purdy was the alter ego of Regal Corp. and Regal LLC; and (2) the ICA erred when it reversed the circuit court's final judgment against Purdy on the breach of contract and unfair and deceptive acts or practices claims. View "Calipjo v. Purdy" on Justia Law

In this water use case, the Supreme Court affirmed the decision of the State of Hawaii Commission on Water Resource Management (Commission) concluding that Appellants waived the right to proceed on the contested case, holding that the Commission’s finding that Appellants waived the right to continue the case was not clearly erroneous or wrong.More than a decade ago, the Supreme Court vacated the issuance of two water use permits and remanded the matter to the Commission. On remand, the parties claiming to be the applicant’s successors in interest submitted a letter to the Commission stating that they did not have the financial resources to continue to pursue the case. Years later, Appellants filed a new water use application. The Commission treated the application as a continuation of the remanded case and then concluded that the letter constituted a waiver of Appellants’ right to continue the original proceedings. The Supreme Court affirmed, holding that the Commission did not err in finding that Appellants expressly waived their right to proceed with the contested case by their letter. View "In re Contested Case Hearing on the Water Use Permit Application Originally Filed by Kukui, Inc." on Justia Law

The Supreme Court affirmed the decision of the Board of Land and Natural Resources (BLNR) authorizing issuance of a Conservation District Use permit (CDUP) for a Thirty Meter Telescope (TMT) near the summit of Mauna Kea, holding that the BLNR property applied the law in analyzing whether the permit should be issued for the TMT.Appellants, Native Hawaiian cultural practitioners, argued that Mauna Kea, as a sacred manifestation of their ancestors, was desecrated by development of astronomy facilities near its summit. The BLNR authorized issuance of the CDUP of the TMT after Third Circuit judge Riki May Amano conducted a contested case hearing over forty-four days. The Supreme Court affirmed, holding (1) the BLNR did not err by refusing to disqualify Amano as the hearing officer, and certain Deputy Attorneys General; (2) the TMT project does not violate religious exercise rights of Native Hawaiians protected by federal statutes; (3) the TMT project does not violate public trust principles, and the conditions of Hawai’i Administrative Rules 13-5-30(c) for issuance of a CDUP were satisfied; and (4) the proceeding was legitimate. View "In re Contested Case Hearing re Conservation District Use Application" on Justia Law

The Supreme Court expressly rejected the Twombly/Iqbal “plausibility” pleading standard in this case and reaffirmed that in Hawai’i state courts, the traditional “notice” pleading standard governs.On the first appeal before the Supreme Court, the Court vacated a foreclosure decree based on issues of fact regarding whether Bank of America, N.A. held the note at the time the foreclosure lawsuit was filed. The Court remanded the case to the intermediate court of appeals (ICA) for a determination of whether the circuit court erred by dismissing the homeowner’s counterclaim before granting summary judgment for foreclosure in favor of Bank of America. On remand, the ICA upheld the dismissal of three counts, including a wrongful foreclosure count, in the homeowner’s counterclaim. The homeowner appealed, arguing that the ICA applied the wrong pleading standard. The Supreme Court vacated the ICA’s judgment on appeal, holding (1) a pleading must meet the traditional “notice” standard to overcome a Haw. R. Civ. P. 12(b)(6) motion to dismiss; and (2) a party may bring a claim for wrongful foreclosure before the foreclosure actually occurs. View "Bank of America, N.A. v. Reyes-Toledo" on Justia Law