Gailliard v. Rawsthorne. ( 2021 )

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Electronically Filed
Supreme Court
SCWC-XX-XXXXXXX
19-NOV-2021
07:56 AM
Dkt. 25 OP
IN THE SUPREME COURT OF THE STATE OF HAWAI‘I
---o0o---
JOHN S. GAILLIARD and JODI L. GAILLIARD,
Respondents/Plaintiffs-Appellees,
vs.
ELIZABETH RAWSTHORNE, Petitioner/Defendant-Appellant,
and
WILLIAM BATES, Defendant-Appellant.
SCWC-XX-XXXXXXX
CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
(CAAP-XX-XXXXXXX; 3CC14100366K)
NOVEMBER 19, 2021
RECKTENWALD, C.J., NAKAYAMA, McKENNA, WILSON, AND EDDINS, JJ.
OPINION OF THE COURT BY RECKTENWALD, C.J.
I. INTRODUCTION
Both parties to this breach of covenant case are
property owners in the Ali‘i Heights Subdivision in Kailua-Kona,
Hawai‘i. Plaintiffs John and Jodi Gailliard brought suit
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alleging that their directly-adjacent neighbor, Defendant
Elizabeth Rawsthorne, was in breach of a restrictive covenant
contained in the Ali‘i Heights Subdivision’s Declaration of
Covenants, Conditions and Restrictions for Ali‘i Heights
Subdivision, Phase I (Declaration). Section 3.14 of the
Declaration states: “Trees/Shrubs: Trees, shrubs, bushes, hedges
and all other plants on every lot shall be maintained at a
reasonable height so as not to interfere with the viewplanes
[sic] available to any other lot.” After a bench trial, the
circuit court ordered that Rawsthorne maintain any plants on her
property at a height not to exceed the roofline of her
residence, and awarded the Gailliards $40,000.00 in damages plus
attorney’s fees in the amount of $28,618.09. The Intermediate
Court of Appeals (ICA) affirmed in a summary disposition order
(SDO). 1 The ICA additionally granted the Gailliards’ motion for
attorney’s fees on appeal, awarding the Gailliards $15,706.00.
Rawsthorne’s application for writ of certiorari
argues, inter alia, that the ICA erred in awarding the
Gailliards appellate attorney’s fees for the total amount
requested, as Hawai‘i Revised Statutes (HRS) § 607-14 2 limits the
1 As set forth below, Rawsthorne did not challenge the circuit
court’s attorney’s fees award in her appeal to the ICA. Thus, the ICA did
not address that award.
2 HRS § 607-14 states in relevant part:
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amount a party may receive in attorney’s fees to 25% of the
total award. We agree and hold that the ICA should have limited
its appellate attorney’s fees award to $10,000 - 25% of the
$40,000 damages award the Gailliards received. Because
Rawsthorne did not appeal the circuit court’s order granting
attorney’s fees, we decline to address that award. We
accordingly vacate in part the ICA’s judgment on appeal awarding
the Gailliards attorney’s fees on appeal for the full amount
requested, and remand to the ICA with instructions to adjust the
appellate attorney’s fees award to $10,000 plus excise tax. We
otherwise affirm the ICA’s judgment on appeal.
II. BACKGROUND
Rawsthorne purchased her property in December 2009.
The Gailliards purchased their lot, located mauka 3 of
Rawsthorne’s lot, in September 2012. Both properties are
subject to the “Declaration of Covenants, Conditions and
Restrictions for Alii Heights Subdivision, Phase 1,” which was
In all the courts, in all actions in the nature of
assumpsit and in all actions on a promissory note or other
contract in writing that provides for an attorney’s fee,
there shall be taxed as attorney’s fees, to be paid by the
losing party and to be included in the sum for which
execution may issue, a fee that the court determines to be
reasonable . . . provided that this amount shall not exceed
twenty-five per cent of the judgment.
3 The Hawaiian Dictionary defines the term “Mauka” as “Uka” meaning
“inland, upland, towards the mountain[.]” See Mary Kawena Pukui & Samuel H.
Elbert, Hawaiian Dictionary 242, 365 (1986).
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recorded in the State of Hawai‘i Bureau of Conveyances on
January 28, 2003.
Jodi Gailliard first approached Rawsthorne on
November 21, 2013, to request that she trim her trees and other
plants in order to restore and preserve the Gailliards’ view
planes in conformity with the Declaration. Rawsthorne responded
by stating that there is no homeowners’ association at Ali‘i
Heights, therefore the Declaration is unenforceable, and the
Gailliards’ only remedy was to “move.” Following this
interaction, the Gailliards retained legal counsel and began to
send demand letters to Rawsthorne. After a second demand
letter, Rawsthorne removed or trimmed approximately 50 of her
plants.
Despite Rawsthorne’s attempts to meet the Gailliards’
demands, on or around July 14, 2014, John Gailliard went to
Rawsthorne’s property to discuss her plants and requested that
Rawsthorne “come up to his property so they could see how [the
Gailliards’] views were obstructed.” Rawsthorne refused,
“interpret[ing] the request as a demand that [Rawsthorne]
completely clear their backyard of any vegetation that [the
Gailliards] found objectionable.” The Gailliards filed a
complaint in the circuit court, which they later amended. In
the amended complaint, the Gailliards raised two claims: a
breach of contract claim, and a claim for injunctive relief.
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After a bench trial, the circuit court 4 found in favor
of the Gailliards on the breach of contract claim. In its
Findings of Fact, Conclusions of Law and Order Regarding Jury
Waived Trial (Order) filed on March 30, 2016, the circuit court
concluded that Rawsthorne’s plants “interfere[d] with [the
Gailliards’] view planes” and thus “violated Section 3.14 of the
Declaration,” and ordered Rawsthorne “trim and maintain” her
plants so they would not exceed “the roofline of” Rawsthorne’s
property. Moreover, the circuit court concluded that the
Gailliards’ “property value was diminished by $40,000 for the
period of [Rawsthorne’s] breach of contract, specifically of
Section 3.14 of the Declaration,” and awarded damages in the
amount of $40,000.00. The circuit court also awarded
“Plaintiffs reasonable attorney[’]s fees and costs pursuant to
Section 6.5(b)[ 5] of the Declaration.” The circuit court
determined that count two of the Gailliards’ complaint
requesting injunctive relief was moot.
Rawsthorne filed a motion for reconsideration
contending, among other things, that the circuit court “did not
4 The Honorable Melvin H. Fujino presided.
5 Section 6.5(b) of the Declaration states: “If a legal proceeding
is brought to enforce the requirements, restrictions and other provisions set
forth in this Declaration, or any of them, the prevailing party or parties
shall be entitled to have and recover from the losing party or parties
reasonable attorney[’]s fees and costs of suit.”
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enter a single finding of fact” supporting that Rawsthorne
violated the Covenant. The circuit court denied Rawsthorne’s
motion, concluding that “no new evidence and/or arguments were
presented which could not have been presented during the earlier
adjudicated motion.”
The Gailliards moved for attorney’s fees, requesting
$59,346.18. Rawsthorne opposed the request, arguing, inter
alia, that the requested amount exceeded the 25% cap under HRS §
607-14. The Gailliards argued in reply that the 25% cap did not
apply because the Ali‘i Heights Subdivision was a planned
community association, see HRS § 607-14, and because the
Gailliards sought and obtained non-monetary relief, see Food
Pantry, Ltd. v. Waikiki Bus. Plaza, Inc., 58 Haw. 606, 575 P.2d
869 (1978). 6 Following a hearing on the motion, the circuit
court issued its Order Regarding Plaintiffs’ Submission of
Attorney’s Fees and Costs on July 14, 2016, and granted the
Gailliards an attorney’s fees award of $28,618.09, reducing the
amount requested by half for the Gailliards’ failure to
apportion the work. 7 The circuit court did not expressly address
6 Neither the Gailliards nor Rawsthorne raised the applicability of
Food Pantry on appeal to the ICA or in this court, and accordingly, we do not
address it further here.
7 The court reduced the Gailliards’ amended request of $53,994.35
to $28,618.09 by removing the cost of the expert report for untimeliness,
reducing the fees for clerical matters, and reducing the remaining award by
50% for the Gailliards’ failure to “apportion the amount of time spent on
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Rawsthorne’s argument that HRS § 607-14 limited the attorney’s
fees the Gailliards may collect to 25% of the damages award.
However, the attorney’s fees awarded by the circuit court
exceeded 25% of the judgment. The circuit court entered its
Final Judgment against Rawsthorne on August 24, 2016.
Rawsthorne appealed. In her Opening Brief, Rawsthorne
argued the circuit court erred in concluding she violated the
Declaration. Rawsthorne did not challenge the circuit court’s
attorney’s fees award.
The ICA affirmed the judgment, and the Gailliards
filed a motion for appellate attorney’s fees requesting an
additional $15,706.00 8 pursuant to HRS § 607-14 and Sections 3.14
and 6.5 of the Declaration. Rawsthorne again argued that
“[b]ecause Appellees are requesting an award of attorney’s fees
pursuant to the authority in HRS § 607-14, which limits such
awards to 25% of the judgment exclusive of fees and costs,
Appellant objects to any award of attorney’s fees to Appellees
over $10,000.”
claims outside of the claims awarded.”
8 An attached declaration of counsel indicated that counsel had
“elected to defend this appeal for $15,000 plus excise tax of $706,
representing 75 hours at $200 an hour,” and attached an exhibit detailing 75
hours of work performed by counsel. Rawsthorne opposed the motion and
argued, as relevant here, that “[t]he billing statement attached . . .
contains charges for clerical work including 2.0 hours . . . to ‘Draft
Conclusion, Tables, Certificate of Service’ and 2.0 hours on March 16, 2018
to ‘Proof, reduce, E-File AB; email copy to Whittaker and John[.]’”
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In their reply brief, the Gailliards argued that the
Ali‘i Heights Subdivision was a planned community association,
and thus exempted from the 25% cap on attorney’s fees awards
under HRS § 607-14. 9 Gailliard also contended that:
Appellants challenged the fees and costs below, citing the
same 25% limitation in HRS Section 607-14, and the court
rejected that argument and awarded Appellees $28,618 in
fees and costs, or 70% of the $40,000 judgment. When they
appealed, Appellants did not challenge the fee award, the
amount of fees, or the court’s ruling on HRS Section 607-
14. That ruling is law of the case.
(Emphasis omitted and added.)
The ICA awarded the Gailliards attorney’s fees on
appeal for $15,706.00, the entire amount requested. The award
exceeded 25% of the circuit court’s damages award. 10 In its
order, the ICA concluded that “the attorney’s fees in the
requested amount of $15,706.00 [were] reasonable.”
Rawsthorne timely filed her application for writ of
certiorari and argues that the ICA erred by: (1) concluding the
language of the Covenant was not vague or ambiguous so as to
render the Covenant unenforceable; (2) concluding Rawsthorne
violated the Covenant; (3) concluding the circuit court properly
9 HRS § 607-14 additionally states, in relevant part, “Nothing in
this section shall limit the recovery of reasonable attorneys’ fees and costs
by a planned community association and its members in actions for the . . .
enforcement of any provision of the association’s governing documents[.]”
10 Although the ICA cited HRS § 607-14 in its order approving
attorney’s fees on appeal, it did not address Rawsthorne’s argument that a
planned community association did not exist at the Ali‘i Heights Subdivision
and thus the property is subject to the 25% statutory cap on attorney’s fees
under that statute.
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awarded the Gailliards damages for diminution of value without
first establishing the period of time for when such an award was
proper; (4) concluding the circuit court did not abuse its
discretion in denying Rawsthorne’s motion for reconsideration;
and (5) awarding the Gailliards attorney’s fees of $15,706.00.
In support of her fifth point, Rawsthorne argues that
the ICA erred in awarding the Gailliards $15,706.00 in
attorney’s fees on appeal because “there is no planned community
association for the Alii Heights Subdivision,” and thus the
“planned community association exception” is inapplicable.
Accordingly, the appellate fee award should have been capped at
$10,000.00. Additionally, Rawsthorne argues that “the ICA
awarded attorney’s fees for time spent on clerical tasks,” and
that “[c]ourts should reduce an award of attorney’s fees
for . . . performance of clerical functions.” (Quoting Schefke
v. Reliable Collection Agency, Ltd., 96 Hawai‘i 408, 458, 32 P.3d
52, 102 (2001).)
In response to Rawsthorne’s certiorari application,
the Gailliards argue, among other things, that the Ali‘i Heights
subdivision is a planned community association within the
meaning of HRS § 607-14, and thus, the 25% limit on attorney’s
fees does not apply. Moreover, the Gailliards contend that
Rawsthorne argued at the circuit court that HRS § 607-14 limited
the attorney’s fees award the Gailliards may recover, but the
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circuit court rejected this argument when it granted the
Gailliards’ attorney’s fees award exceeding 25% of the judgment.
The Gailliards argued that Rawsthorne “did not challenge that
ruling on appeal. As such, [Rawsthorne] clearly waived any
objection on these specific grounds on appeal.”
The Gailliards next contend that “proofing and
reducing a brief to bring it into compliance with court rules[ ]
is an essential task by appellate counsel, and not a clerical
function.” (Internal quotations omitted.)
Rawsthorne replied, and asserts that “[a]n award of
appellate attorney’s fees is not dependent on attorney’s fees
being awarded by the trial court,” and thus her decision not to
appeal the circuit court’s attorney’s fees award is irrelevant.
Stated differently, Rawsthorne believed that her decision not to
appeal the circuit court’s attorney’s fees award did not
preclude her from challenging the ICA’s appellate attorney’s
fees awards.
Rawsthorne additionally cites Employee Management
Corp. v. Aloha Group, Ltd., 87 Hawai‘i 350, 351, 956 P.2d 1282,
1283 (App. 1998), and contends, for the first time on appeal,
that HRS § 607-14 “places a twenty-five percent maximum combined
total limit that can be taxed against a losing party by both the
trial and appellate courts.” (Emphases added.) “The trial
court and ICA have together awarded [the Gailliards] $44,324 in
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attorney’s fees on a $40,000 judgment. Based on the express
words and holding of the ICA in Aloha Group, the award of
attorney’s fees over $10,000 . . . is a grave error.” In other
words, Rawsthorne contends that the total amount of attorney’s
fees awarded by both the circuit court and the ICA should not
have exceeded $10,000.00.
III. STANDARDS OF REVIEW
A. Attorney’s Fees
“It is well settled that no attorney’s fees may be
awarded as damages or costs unless so provided by statute,
stipulation, or agreement.” Hawaiian Isles Enters., Inc. v.
City & Cnty. of Honolulu, 76 Hawai‘i 487, 489, 879 P.2d 1070,
1072 (1994) (citations, brackets and quotations marks omitted).
“The construction and legal effect given a contract provision
governing the award of attorneys’ fees is a question of law,
which we review under the right/wrong standard.” Id. (citation
omitted).
“[The Hawai‘i Supreme Court] reviews the . . . denial
and granting of attorney’s fees under the abuse of discretion
standard. . . . An abuse of discretion occurs where the [court]
has clearly exceeded the bounds of reason or disregarded rules
or principles of law or practice to the substantial detriment of
a party litigant.” Oahu Publ’ns, Inc. v. Abercrombie, 134
Hawai‘i 16, 22, 332 P.3d 159, 165 (2014) (quotation marks and
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citations omitted).
B. Findings of Fact (FOF)/Conclusions of Law (COL)
“In this jurisdiction, a trial court’s FOFs are
subject to the clearly erroneous standard of review. An FOF is
clearly erroneous when, despite evidence to support the finding,
the appellate court is left with the definite and firm
conviction that a mistake has been committed.” Chun v. Bd. of
Trs. of the Emps.’ Ret. Sys. of the State of Hawai‘i, 106 Hawai‘i
416, 430, 106 P.3d 339, 353 (2005) (internal quotation marks,
citations, and ellipses omitted) (quoting State v. Hutch, 75
Haw. 307, 328, 861 P.2d 11, 22 (1993)).
A COL is not binding upon an appellate court and is freely
reviewable for its correctness. [The appellate court]
ordinarily reviews COLs under the right/wrong standard.
Thus, a COL that is supported by the trial court’s FOFs and
that reflects an application of the correct rule of law
will not be overturned. However, a COL that presents mixed
questions of fact and law is reviewed under the clearly
erroneous standard because the court's conclusions are
dependent upon the facts and circumstances of each
individual case.
Chun, 106 Hawai‘i at 430, 106 P.3d at 353 (internal quotation
marks, citations, and brackets omitted) (quoting Allstate Ins.
Co. v. Ponce, 105 Hawai‘i 445, 453, 99 P.3d 96, 104 (2004)).
C. Motion for Reconsideration
[T]he purpose of a motion for reconsideration is to allow
the parties to present new evidence and/or arguments that
could not have been presented during the earlier
adjudicated motion. Reconsideration is not a device to
relitigate old matters or to raise arguments or evidence
that could and should have been brought during the earlier
proceeding.
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Ass’n of Apartment Owners of Wailea Elua v. Wailea Resort Co.,
100 Hawai‘i 97, 110, 58 P.3d 608, 621 (2002) (quoting Sousaris v.
Miller, 92 Hawai‘i 505, 513, 993 P.2d 539, 547 (2000)).
The appellate court reviews a “trial court’s ruling on
a motion for reconsideration . . . under the abuse of discretion
standard.” Wailea Elua, 100 Hawai‘i at 110, 58 P.3d at 621. An
abuse of discretion occurs if the trial court has “clearly
exceeded the bounds of reason or disregarded rules or principles
of law or practice to the substantial detriment of a party
litigant.” Amfac, Inc. v. Waikiki Beachcomber Inv. Co., 74 Haw.
85, 114, 839 P.2d 10, 26 (1992).
IV. DISCUSSION
A. The ICA Erred in Awarding the Gailliards $15,706.00 in
Attorney’s Fees on Appeal
1. The twenty-five percent cap on attorney’s fees under
HRS § 607-14 applies to the Ali‘i Heights Subdivision
as it is not a “planned community association” as
defined by the statute.
HRS § 607-14 defines a planned community association
as “a nonprofit homeowners or community association existing
pursuant to covenants running with the land.” In order to
qualify under the planned community associations exception, the
court must determine whether: (1) there is a nonprofit community
association, and (2) the association “exist[s] pursuant to
covenants running with the land.” See Kaanapali Hillside
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Homeowners’ Ass’n ex rel. Bd. Of Dirs. v. Doran, 114 Hawai‘i 361,
372, 162 P.3d 1277, 1288 (2007). The Gailliards contend that
Rawsthorne raised this argument in her memorandum in opposition
to the Gailliards’ declaration requesting attorney’s fees
totaling $53,994.35 filed in the circuit court, but did not
appeal the circuit court’s order awarding attorney’s fees
totaling over 25% of the judgment, thus waiving the argument.
Stated another way, Rawsthorne’s decision not to challenge the
fee award accordingly resulted in the circuit court’s ruling as
to the “planned community association” question becoming the
“law of the case.”
The Gailliards are correct that Rawsthorne’s
application for writ of certiorari seeks review of only the
ICA’s attorney’s fees award, and thus any objection to the
circuit court’s attorney’s fees award is “deemed to have been
waived on appeal.” See State v. Moses, 102 Hawai‘i 449, 456, 77
P.3d 940, 947 (2003); Hawai‘i Rules of Appellate Procedure (HRAP)
Rule 28(b)(7) (“Points not argued may be deemed waived.”).
However, the Gailliards are incorrect that
Rawsthorne’s decision not to appeal the circuit court’s award of
attorney’s fees precludes our review of the ICA’s award of
appellate attorney’s fees. The awards are separate, and
Rawsthorne’s decision not to appeal the circuit court’s
attorney’s fees award does not bar her from challenging
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attorney’s fees awarded on appeal. Cf. S. Utsunomiya Enters.,
Inc. v. Moomuku Country Club, 76 Hawai‘i 396, 402, 879 P.2d 501,
507 (1994) (holding that attorney’s fees incurred at trial and
on appeal are separate).
Moreover, the Gailliards’ argument that the “law of
the case” doctrine bars Rawsthorne from reraising the argument
that the 25% limit on attorney’s fees awarded under HRS § 607-14
applies to the Ali‘i Heights Subdivision is no more persuasive.
This court recently held that “when a court decides upon a rule
of law, that decision should continue to govern the same issue
in subsequent stages in the same case.” PennyMac Corp. v.
Godinez, 148 Hawai‘i 323, 331, 474 P.3d 264, 272 (2020) (citing
Arizona v. California, 460 U.S. 605, 618 (1983)). In PennyMac,
this court recognized that “the [law of the case] doctrine can
also be invoked by a trial court with respect to its own
rulings, and in that instance, the doctrine is discretionary and
operates as a presumption against reconsideration.” Id. at 331,
474 P.3d at 272 (citation omitted). Moreover, “when the law of
the case has been established by an appellate court, the lower
court is obliged to apply it.” Id. at 331 n.10, 474 P.3d at 272
n.10 (citing Ditto v. McCurdy, 98 Hawai‘i 123, 128, 44 P.3d 274,
279 (2002) (quotation marks omitted)). However, we have not
previously addressed whether and how the doctrine operates in
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the circumstances of the instant case: where a circuit court
rules on an issue of law, a party chooses not to appeal, and the
appellate court is tasked with addressing the same issue in a
different circumstance.
However, other jurisdictions have concluded that the
law of the case doctrine does not bind appellate courts to a
ruling made by a lower court. Indeed, the United States Supreme
Court has held that the law of the case doctrine “cannot bind
[the Supreme Court] in reviewing decisions” of lower courts.
See Christianson v. Colt Indus. Operating Corp., 486 U.S. 800,
803 (1988) (emphasis added); accord In re Raynor, 617 F.3d 1065,
1069 (8th Cir. 2010) (holding that the law of the case doctrine
does not apply in a case “involv[ing] direct appellate
review . . . of trial and intermediary appellate decisions. In
doing so, [the reviewing court is] not bound by the decisions of
inferior courts, even lower courts acting as an appellate
court”). Therefore, we hold that the circuit court’s conclusion
that the 25% limit on attorney’s fees under HRS § 607-14 does
not apply to the Ali‘i Heights Subdivision is not binding on this
court.
We thus look to the language of the statute in guiding
our disposition. The statute defines a “planned community
association” as “a nonprofit homeowners or community association
existing pursuant to covenants running with the land.” HRS
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§ 607-14. In Doran, the court concluded that the Kaanapali
Hillside Homeowners’ Association was a planned community
association under HRS § 607-14, noting that “employees of [the
developers of the Kaanapali Hillside Subdivision,] filed a
Petition for Charter of Incorporation with the [Department of
Commerce and Consumer Affairs], State of Hawai‘i, seeking to form
[Kaanapali Hillside Homeowners’ Association] as a non[]profit
corporation.” Id. at 364, 162 P.3d at 1280. The Gailliards
have not identified any evidence in the record establishing the
creation of a similar homeowners association at Ali‘i Heights,
and the Declaration itself does not establish a homeowners’
association. The 25% cap on attorney’s fees thus applies. 11
However, although there is precedent for applying the
25% limit to the combined total of both the trial court and
appellate awards, see Aloha Group, 87 Hawai‘i at 352, 956 P.2d at
1285, we apply the 25% cap to the appellate award only – as
opposed to the aggregate of the trial and appellate awards.
Rawsthorne did not argue that the ICA should aggregate the
circuit court and ICA attorney’s fees awards when considering
11 Insofar as the circuit court erred in concluding that the 25%
statutory cap on attorney’s fees did not apply, Rawsthorne’s decision not to
challenge the circuit court’s attorney’s fees award precludes our review of
that award. As such, we decline to hold that the circuit court erred in
awarding the Gailliards an attorney’s fees award in excess of 25% of the
judgment.
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the 25% limit under HRS § 607-14 in her memo in opposition to
the requested attorney’s fees filed in the ICA, nor did she
raise it in her application for writ of certiorari. Rawsthorne
cites Aloha Group for the first time in her reply in response to
the opposition to the application for writ of certiorari. 12
Since Rawsthorne did not raise this argument until she
filed her reply brief, and because review of the circuit court
award is waived, we only consider the ICA award. See Hawaii
Ventures, LLC v. Otaka, Inc., 114 Hawai‘i 438, 472 n.17, 164 P.3d
696, 730 n.17 (2007) (“[Appellant’s] aforementioned point of
error is deemed waived for failure to present any argument in
its opening brief in the first instance and presenting such
arguments in its reply brief to which no answer could be made.”
(citation omitted)); Matter of Hawaiian Flour Mills, Inc., 76
Hawai‘i 1, 14 n.5, 868 P.2d 419, 432 n.5 (1994) (holding that
arguments raised for the first time in reply briefs on appeal
12 Indeed, Rawsthorne’s memo in opposition to the Gailliards’
requested attorney’s fees on appeal argued that “Appellant objects to any
award of attorney’s fees to Appellees over $10,000.” (Emphasis added.)
Stated another way, Rawsthorne was not arguing that HRS § 607-14 prohibited
the ICA from awarding any attorney’s fees to the Gailliards. Rather,
Rawsthorne objected to any attorney’s fees on appeal that exceeded
$10,000.00. Similarly, her application for writ of certiorari contends that
“[t]he ICA gravely erred by awarding attorney’s fees in the full amount
requested by Respondents.” (Emphasis added.) In other words, Rawsthorne’s
application did not argue that it was an error for the ICA to award the
Gailliards any attorney’s fees, but that it was an error for the ICA to award
the full amount requested by the Gailliards, which exceeded $10,000.00. Both
arguments thus implied that Rawsthorne believed it was an error for the ICA
to grant appellate attorney’s fees over $10,000.00. And neither argument
implied that the appellate attorney’s fees award must be aggregated with the
trial court’s attorney’s fees award.
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are deemed waived). We thus conclude that the ICA could award
the Gailliards no more than $10,000 plus excise tax on appeal,
and thus erred by awarding $15,706.00 in attorney’s fees on
appeal.
2. The ICA did not abuse its discretion in awarding the
Gailliards attorney’s fees for the work for which they
requested compensation
Rawsthorne additionally claims that the Gailliards’
calculation of attorney’s fees includes items similar to
clerical work we have previously determined was non-recoverable.
See Schefke, 96 Hawai‘i at 458, 32 P.3d at 102 (“Courts should
reduce an award of attorney’s fees for . . . performance of
clerical functions.”). Specifically, Rawsthorne argues that the
Gailliards’ request “includ[ed] [time] for drafting [t]ables and
a certificate of service, and e-filing a brief.” (Internal
quotation marks omitted.) However, HRS § 607-14 provides the
court with discretion in determining what fees are reasonable.
See HRS § 607-14 (“[I]n all actions on a promissory note or
other contract in writing that provides for an attorney’s fee,
there shall be taxed as attorneys’ fees, to be paid by the
losing party. . . a fee that the court determines to be
reasonable[.]” (emphasis added)). Because, as the Gailliards
correctly suggest, “proofing and reducing a brief to bring it
into compliance with court rules[ ] is an essential task by
appellate counsel, and not a clerical function,” the ICA did not
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abuse its discretion in determining that the fees for this work
were recoverable. (Internal quotations omitted.)
B. The ICA Correctly Affirmed the Circuit Court’s March 30,
2016 Order on the Merits
Turning to Rawsthorne’s remaining points on appeal
related to the merits of the Gailliards’ breach of covenant
claim, we conclude that the ICA did not err in affirming the
circuit court’s Order and Final Judgment.
1. Section 3.14 of the Covenant is not ambiguous.
Rawsthorne argues that the Covenant is similar to the
covenant this court concluded was ambiguous in Hiner v. Hoffman,
90 Hawai‘i 188, 977 P.2d 878 (1999). In Hiner, this court held
that the “covenant at issue provid[ing] that ‘no dwelling shall
be erected, altered, placed or permitted to remain . . . which
exceeds two stories in height’” was ambiguous. 90 Hawai‘i at
190, 977 P.2d at 880 (brackets and emphasis omitted). This
court reasoned that without a “numerical measure[ment],” the
covenant was ambiguous, leaving residents to guess what
constituted a reasonable height. Id. Essentially, the phrase
“two stories in height” was ambiguous because not all two-story
homes are the same height; without a numerical measurement of
what “exceeds” the permissible height limit, the covenant was
unenforceable. Thus, the Hiner covenant could be interpreted to
permit a two-story home that was 40-feet in height to be built,
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but not a three-story home that was 30-feet in height. If the
intent of the Hiner covenant - as the parties agreed - was to
“establish concrete height restrictions,” id. at 191, 977 P.2d
at 881, then the covenant failed to properly fulfill its
purpose.
Rawsthorne thus contends that the phrase “reasonable
height” is ambiguous without a specific numerical measurement.
Unlike Hiner, in the instant case, a mechanical rule requiring
that plants meet a specified numerical height would be
ineffective in carrying out the intent of the Covenant. For
example, a fifteen-foot height limit might protect the view
planes of some lots while not adequately protecting the view
planes of others. Additionally, a numerical height limit might
have the adverse effect of allowing lot owners whose views are
not impeded by their neighbors’ plants to nonetheless require
the “offending” neighbors trim their plants merely for exceeding
the limit.
Moreover, Rawsthorne’s argument that view planes
require a definite and clear definition is no more persuasive as
the view planes from one lot will differ from the view planes of
another lot. Therefore, the same concerns raised by the
plaintiffs seeking enforcement of the Hiner covenant is not
present here; the Covenant’s language clearly defines a
“reasonable height” for plants as one that does “not [ ]
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interfere with the view planes available to any other lot[.]”
As such, the circuit court did not err in concluding that the
Covenant was not ambiguous.
2. The circuit court’s conclusion that Rawsthorne was in
violation of the Covenant is not clearly erroneous.
Likewise, we cannot say the circuit court’s conclusion
that Rawsthorne was in violation of the Covenant was clearly
erroneous. In addition to citing testimony by two neighbors
supporting the Gailliards’ claim that Rawsthorne’s plants
violated the Covenant, the trial court’s FOFs also noted that:
22. The Court conducted a site visit after the conclusion
of trial, to observe if the Defendants’ trees, shrubs,
bushes, hedges and other plants are maintained “at a
reasonable height so as not to interfere with the view
planes available to any other lot[.]”
(Emphasis added.)
The circuit court additionally took into consideration
two pictures submitted by the Gailliards. In light of the
evidence in the record, we cannot say that the circuit court’s
conclusion that Rawsthorne violated the Covenant is clearly
erroneous.
3. The circuit court did not err in awarding the
Gailliards diminution of value damages for a four-year
period.
“[T]he question for the appellate court under Rule
52(a) is not whether it would have made the findings the trial
court did . . . but whether it is left with a definite and firm
conviction that a mistake has been made.” Sandstrom v. Larsen,
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59 Haw. 491, 495, 583 P.2d 971, 976 (1978) (citations omitted).
In its FOFs, the circuit court found:
23. Plaintiffs testified regarding the impact that
Defendants’ violation of Section 3.14 of the Declaration
had on the value of their property. [ ]
24. Plaintiffs testified during their depositions in
December 2015 that their property decreased in value by
approximately $40,000. [ ]
Additionally, the circuit court concluded in its COLs:
11. This court finds by a preponderance of the evidence,
the Plaintiffs’ property value was diminished by $40,000
for the period of Defendants’ breach of contract,
specifically of Section 3.14 of the Declaration.
Although the court did not specifically note the
period for which it was awarding the $40,000 damages award, the
court’s FOFs make clear that it considered various evidence,
including photographs from as early as November 2012, and
testimony from multiple individuals. Thus, the circuit court’s
award of $40,000 in damages is not clearly erroneous so as to
warrant “a definite and firm conviction that a mistake has been
made.” Sandstrom, 59 Haw. at 495, 583 P.2d at 976.
4. The circuit court did not abuse its discretion in
denying Rawsthorne’s motion for reconsideration.
In her motion for reconsideration, Rawsthorne raised
two arguments: first, the circuit court did not identify any
facts supporting its finding that the Gailliards had proven by a
preponderance of the evidence that Rawsthorne violated the
Covenant, and second, that the damages awarded to the Gailliards
constituted impermissible double recovery. Rawsthorne argued
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that the first ground for reconsideration is based on the
Findings of Fact and Conclusions of Law, and “[t]he second
ground . . . is based on the award issued” to the Gailliards for
diminution in value.
A motion for reconsideration is limited to “allow[ing]
the parties to present new evidence and/or arguments that could
not have been presented during” trial and is “not a device to
relitigate old matters or to raise arguments or evidence that
could and should have been brought during the earlier
proceeding.” Wailea Elua, 100 Hawai‘i at 110, 58 P.3d at 621(2002) (citation omitted). Rawsthorne challenged the Order
itself without presenting new evidence that she could not have
presented at trial. Although she argued that the evidence was
not available because the Order did not exist at the time of
trial, such an argument is unpersuasive. Rawsthorne knew that
the Gailliards sought both a permanent injunction and money
damages. And, at the Gailliards’ depositions, both Jodi and
John Gailliard testified that the value of their property
decreased by approximately $40,000.00 due to Rawsthorne’s plants
obstructing their view. Thus, Rawsthorne knew or should have
known that the Gailliards sought diminution in value damages of
at least $40,000.00. Moreover, Rawsthorne could have disputed
the Gailliards’ evidence supporting their request for $40,000.00
in damages at trial. Rawsthorne’s contention that she did not
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know the circuit court would have awarded the Gailliards
$40,000.00 in damages is thus unpersuasive and the circuit
court’s denial of Rawsthorne’s motion for reconsideration was
not an abuse of discretion.
V. CONCLUSION
For the foregoing reasons, we vacate in part the ICA’s
September 29, 2020 judgment on appeal awarding the Gailliards
$15,706.00 in appellate attorney’s fees and remand to the ICA
for further proceedings consistent with this opinion. We
otherwise affirm the ICA’s judgment on appeal.
Patrick K. Wong and /s/ Mark E. Recktenwald
Michelle Chi Dickinson
(Robert D. Triantos /s/ Paula A. Nakayama
on the briefs)
for petitioner /s/ Sabrina S. McKenna
Peter Van Name Esser /s/ Michael D. Wilson
for respondents
/s/ Todd W. Eddins
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