Justia Hawaii Supreme Court Opinion Summaries

A food and beverage server brought a class action lawsuit against several hotel and resort entities, alleging that from 2010 to 2016, the hotels imposed service charges on customers but failed to distribute the full amount of those charges as gratuities to employees. Instead, the hotels retained a portion of the service charges without clearly informing customers that not all of the service charge would go to employees as tips. The disclosures provided by the hotels during this period stated that “a portion” of the service fee was allocated to employees as “tips or wages” and another portion to cover other costs, but did not specify the exact amount or percentage distributed to employees.In the Circuit Court of the First Circuit, both parties moved for summary judgment. The circuit court ruled in favor of the plaintiff, finding that the hotels’ disclosures were insufficient because they did not specify the portion of the service charge distributed to employees. The hotels appealed, and the Intermediate Court of Appeals (ICA) reversed the circuit court’s decision. The ICA held that the statute did not require disclosure of the specific amount or percentage distributed to employees and that the hotels’ disclosures were sufficient.The Supreme Court of the State of Hawai‘i reviewed the case and held that the ICA erred in concluding the hotels’ disclosures satisfied Hawai‘i Revised Statutes § 481B-14. The court determined that merely reciting statutory language or stating that “a portion” of the service charge goes to employees is ambiguous and does not clearly inform consumers. The court held that when only part of a service charge is distributed as tips, the employer must disclose the amount or percentage paid to employees. The Supreme Court vacated the ICA’s judgment, affirmed the circuit court’s judgment, and remanded for further proceedings. View "Rodriguez v. Mauna Kea Resort LLC." on Justia Law

A dispute arose between a Hawai‘i corporation and one of its directors after the director questioned the validity of a conflict-of-interest clause in the corporation’s articles. The corporation filed a declaratory judgment action against the director, seeking a ruling that the clause was valid. The director moved to dismiss the complaint, arguing there was no actual controversy. The Circuit Court of the First Circuit granted the motion and dismissed the complaint without prejudice, retaining jurisdiction to hear a motion for attorneys’ fees. The director then sought indemnification from the corporation for his legal expenses, relying on both the corporation’s articles and Hawai‘i Revised Statutes (HRS) § 414-243, which mandates indemnification for directors who are “wholly successful, on the merits or otherwise,” in defending proceedings brought against them due to their role as directors.The corporation partially indemnified the director for his defense costs but disputed his entitlement to further fees, particularly those incurred in seeking indemnification itself (“fees on fees”). The Circuit Court denied the director’s motion for additional fees, finding he was not “wholly successful” under the statute because the dismissal was without prejudice. The director appealed to the Intermediate Court of Appeals (ICA), which affirmed the Circuit Court’s decision. The ICA concluded that fees on fees were only available when indemnification was court-ordered, which was not the case here, and declined to address whether the director was “wholly successful” under HRS § 414-243.The Supreme Court of the State of Hawai‘i reviewed the case and reversed both lower courts. It held that a director whose case is dismissed without prejudice and who incurs no liability is “wholly successful” under HRS § 414-243 and thus entitled to mandatory indemnification. The court further held that this statutory indemnification includes reasonable expenses incurred in obtaining indemnification, such as fees on fees. The case was remanded to the Circuit Court to determine the reasonable amount of such expenses. View "Loyalty Development Company, LTD. v. Ching" on Justia Law

Several residential property owners in the Pauoa Beach Subdivision, part of the Mauna Lani Resort in Hawaiʻi, challenged the use of a residential lot (Lot B) owned by Exclusive Resorts PBL1, LLC (PBL1). PBL1’s parent company operates a luxury destination club, allowing its members to stay at properties like Lot B in exchange for annual dues. The plaintiffs argued that this arrangement constituted a prohibited “commercial use” under the subdivision’s governing documents, which restrict commercial activity but allow short-term rentals.The dispute began in the Circuit Court of the Third Circuit, where the court granted summary judgment in favor of PBL1, finding no violation of the residential use restrictions. On appeal, the Intermediate Court of Appeals (ICA) vacated that decision, holding there was a genuine issue of material fact as to whether PBL1’s use amounted to a “gainful occupation, profession or trade,” and remanded for further factual findings. On remand, the circuit court reinterpreted the project documents and initially found PBL1 to be a commercial owner, but ultimately determined, based on evidence of actual use, that PBL1’s activities did not rise to the level of commercial use. The court denied the plaintiffs’ request for an injunction, and both sides appealed again.The Supreme Court of the State of Hawaiʻi reviewed the case. It affirmed the ICA’s conclusion that PBL1’s use of Lot B did not violate the project documents, agreeing that the law of the case doctrine precluded reinterpreting the documents’ meaning. The court also held that the ICA did not abuse its discretion in awarding costs to PBL1. However, it reversed the ICA’s award of attorney fees to PBL1, holding that the relevant contract only allowed prevailing plaintiffs, not defendants, to recover such fees. The ICA’s judgment was affirmed in all other respects. View "Cowan v. Exclusive Resorts PBL1, LLC" on Justia Law

The case concerns a defendant who, after a domestic dispute, shot and killed his partner in the presence of others, including children. He was initially convicted by a jury of murder and several firearms offenses, and sentenced to life imprisonment with the possibility of parole, with additional consecutive sentences for the firearms charges. The defendant appealed, and the Supreme Court of Hawai‘i found errors in the trial, including the improper admission of prior bad acts and a failure to give a merger instruction, and remanded for a new trial. Instead of a retrial, the defendant entered a plea agreement, pleading guilty to manslaughter, use of a firearm in a separate felony, and felon in possession of a firearm. The parties agreed to use the original presentence report, which included mental health evaluations.Before sentencing, the defendant requested over $8,700 in court funds to hire an expert to assess his dangerousness for sentencing and future parole purposes. The Circuit Court of the Second Circuit denied most of the request, authorizing only $1,000, finding the request excessive and unnecessary since the expert had already evaluated the defendant. The court sentenced the defendant to forty years’ imprisonment: twenty years each for manslaughter and use of a firearm (to run consecutively), and ten years for felon in possession (to run concurrently). The defendant appealed, arguing the denial of expert fees and challenging the severity and rationale of his sentence.The Intermediate Court of Appeals affirmed the sentence and declined to address the expert fees issue, finding it unpreserved due to procedural technicalities. The Supreme Court of Hawai‘i held that the defendant had preserved the expert fees issue and addressed it on the merits. The court held that expert fees for indigent defendants are generally not required for regular sentencing, unless extended term sentencing is sought or unique circumstances exist. The court also held that the new forty-year sentence was not “more severe” than the original life sentence with the possibility of parole, adopting an aggregate approach to compare sentences. The court affirmed the circuit court’s judgment and sentence. View "State v. Lavoie" on Justia Law

In 2006, Brenda Merle White executed a $250,000 promissory note secured by a mortgage with Countrywide Home Loans, which was later assigned to The Bank of New York Mellon (BNYM). White stopped making payments in 2008, and BNYM initiated, then rescinded, a non-judicial foreclosure. In 2012, the Association of Apartment Owners of Kumelewai Court foreclosed on the property for unpaid fees, and Gabi Collins acquired an interest in the property in 2015 via quitclaim deed. Collins was not a party to the original mortgage. In 2017, BNYM sent White a notice of default and filed a foreclosure action in the Circuit Court of the First Circuit. White did not respond, but Collins contested the action, arguing, among other things, that the statute of limitations had expired.The Circuit Court of the First Circuit granted summary judgment to BNYM, finding the foreclosure action timely. Collins appealed, and the Intermediate Court of Appeals (ICA) affirmed, holding that the statute of limitations for a foreclosure action is twenty years under Hawaiʻi Revised Statutes (HRS) § 657-31.The Supreme Court of the State of Hawaiʻi reviewed whether the ICA erred in applying a twenty-year statute of limitations to mortgage foreclosure actions. The court held that such actions are more analogous to real property actions than to debt recovery actions, and thus the twenty-year limitations period under HRS § 657-31 applies. The court rejected Collins’ arguments that recent precedent required a different result and found that neither DW Aina Lea Development, LLC v. State Land Use Commission nor Adair v. Kona Corporation conflicted with this approach. The Supreme Court of Hawaiʻi affirmed the ICA’s judgment, holding that the statute of limitations for mortgage foreclosure actions is twenty years. View "The Bank of New York Mellon v. White" on Justia Law

A defendant, Jerome Rogan, was convicted of sexual assault, but his conviction was reversed by the Supreme Court of Hawai'i due to prosecutorial misconduct, preventing retrial. Alan Ahn, a former police officer, had his charges dismissed after a deferred acceptance of a no contest plea. Both Rogan and Ahn received expungement orders from the Department of the Attorney General and requested the court to seal their records.The Circuit Court of the First Circuit initially handled Ahn's case, where a grand jury indicted him on drug-related charges. After procedural complexities, including a motion to unseal records by Nick Grube, Ahn's charges were eventually dismissed. Rogan's case was straightforward, with his conviction being reversed by the Supreme Court of Hawai'i.The Supreme Court of the State of Hawai'i reviewed the consolidated cases of Rogan and Ahn. The court held that under Hawai'i Revised Statutes (HRS) § 831-3.2(f), judicial records must be removed from the judiciary’s publicly accessible electronic databases (eCourt Kōkua) but remain accessible for in-person review at the courthouse. The court emphasized that the public has a constitutional right to access court records under article I, section 4 of the Hawai'i Constitution, which cannot be overridden by automatic sealing. The court also noted that the judiciary has exclusive control over its records under article VI, section 7 of the Hawai'i Constitution. The court denied the motions to seal the records but granted the removal of the records from eCourt Kōkua. View "State v. Rogan." on Justia Law

A skilled nursing facility accepted a new resident who was receiving Medicaid benefits. The resident's husband was designated as her authorized representative. Nearly two years later, the Department of Human Services (DHS) terminated the resident's Medicaid benefits due to excess assets. Both the resident and her husband were incapacitated, and the resident's public guardian submitted a new Medicaid application, which was denied. The nursing facility continued to care for the resident without compensation until her death. The facility later sought an administrative hearing to challenge the eligibility decision, but the request was denied because the facility was not an authorized representative and the appeal was late.The circuit court and the Intermediate Court of Appeals (ICA) affirmed the denial, holding that the nursing home lacked standing to challenge the eligibility determination under Hawai'i Revised Statutes (HRS) § 346-12, which limits appeals to the applicant or recipient. The courts concluded that the nursing home did not have a close relationship with the resident for third-party standing purposes.The Supreme Court of the State of Hawai'i reviewed the case and disagreed with the lower courts regarding standing. The court held that skilled nursing facilities have constitutionally protected property interests in compensation for medical services performed for residents based on DHS eligibility determinations. The court ruled that these facilities have due process rights under the Hawai'i Constitution, including notice and the opportunity to appeal Medicaid eligibility determinations when the beneficiary is incapacitated and no authorized representative is available or willing to appeal. The court vacated the ICA's judgment and the circuit court's order, remanding the case for a new administrative hearing on the merits of the resident's Medicaid eligibility. View "In re FT" on Justia Law

Erik Willis was convicted of attempted murder for the unprovoked stabbing of a woman sunbathing on a beach. The main issue at trial was the identification of Willis as the assailant. Surveillance footage and witness testimonies placed Willis near the scene, and the victim identified him as her attacker. Willis appealed, arguing that the Deputy Prosecuting Attorney (DPA) committed prosecutorial misconduct by misstating evidence during closing arguments.The Intermediate Court of Appeals (ICA) vacated Willis’s conviction, agreeing that the DPA’s statements constituted prosecutorial misconduct. The ICA found that the DPA introduced new evidence of blood on Willis’s hands and shirt, which was not supported by the trial record, and concluded that there was a reasonable possibility that these statements contributed to Willis’s conviction.The State of Hawai‘i petitioned the Supreme Court of Hawai‘i to reverse the ICA’s decision. The State argued that the DPA’s statements were based on reasonable inferences from the evidence presented and, even if improper, were harmless beyond a reasonable doubt.The Supreme Court of Hawai‘i agreed with the State, holding that the DPA’s remarks did not rise to the level of prosecutorial misconduct. The court found that the DPA’s comments were based on reasonable inferences from the evidence and that there was no reasonable possibility that these comments alone affected the trial’s outcome. Consequently, the Supreme Court vacated the ICA’s judgment and affirmed the Circuit Court of the First Circuit’s amended judgment of conviction and sentence for attempted murder in the second degree. View "State v. Willis" on Justia Law

Two brothers, Roland and Robert, ran an automotive business together under Guieb Inc. Their relationship deteriorated when Robert made decisions that Roland disagreed with, including using their company for his own benefit and allegedly stealing the trade name and most profitable shop for his personal companies. Roland sued Robert, alleging unfair and deceptive trade practices, unfair methods of competition, and deceptive trade practices under Hawaii Revised Statutes (HRS) §§ 480-2 and 481A-3. He also sought punitive damages for fraud, misrepresentation, nondisclosure, and breach of fiduciary duty.The Circuit Court of the First Circuit granted Robert’s motion for partial summary judgment (MPSJ) and dismissed Roland’s claims under count 12, finding no genuine issue of material fact. The court also granted Robert’s motion for judgment as a matter of law (JMOL) on punitive damages, preventing the jury from considering them. Additionally, the court ruled that brotherhood did not establish a fiduciary duty, granting Robert’s MPSJ on that issue as well.The Intermediate Court of Appeals (ICA) reversed the circuit court on three issues. It held that Roland’s unfair and deceptive trade practices claim should have gone to the jury, as there was evidence that Robert represented Guieb Inc. and Guieb Group as the same entity. The ICA also held that the jury should have considered punitive damages, given the evidence of Robert’s actions that could justify such damages. Lastly, the ICA found that brotherhood created a kinship fiduciary duty, which should have been considered by the jury.The Supreme Court of Hawaii agreed with the ICA that the jury should have considered Roland’s claims under count 12 and punitive damages. However, it disagreed that kinship created a fiduciary duty, affirming the circuit court’s MPSJ on that issue. The case was remanded for further proceedings consistent with the opinion. View "Guieb v. Guieb" on Justia Law

The case involves a dispute over a renewable energy technologies income tax credit (RETITC) claimed by Blake and Blanca Goodman for solar energy systems installed on their home in 2012. The Goodmans claimed $17,250 in RETITC on their Hawai‘i income tax return using Form N-342. Despite having no excess tax credit (their tax credit did not exceed their tax liability), they were required to make an irrevocable election on how to treat the tax credit as either refundable or nonrefundable.The Department of Taxation audited the Goodmans' return and issued a Final Assessment reducing their claimed RETITC by 30%, resulting in an additional tax assessment of $5,416.50. The Goodmans appealed to the Board of Taxation Review, which ruled in their favor, allowing them to amend their elections. The Department then appealed to the Tax Appeal Court, which granted summary judgment for the Department, ruling that the Goodmans' election was irrevocable and that they owed additional taxes.The Intermediate Court of Appeals (ICA) vacated the Tax Appeal Court's decision, holding that the court exceeded its jurisdiction by increasing the Goodmans' tax liability beyond the Department's assessment. However, the ICA affirmed the Department's Final Assessment, finding that Form N-342 and its instructions were consistent with the statute.The Supreme Court of Hawai‘i reviewed the case and held that Form N-342 and its instructions were inconsistent with HRS § 235-12.5(f)-(h). The court found that the statute's provisions for refundable or nonrefundable elections only apply when a taxpayer's tax credit exceeds their tax liability. Since the Goodmans did not have excess tax credit, they should not have been required to make such elections. The court vacated the ICA's judgment and reversed the Tax Appeal Court's final judgment, ruling that the Goodmans are entitled to the $17,250 RETITC they claimed. View "Suganuma v. Goodman" on Justia Law