Peck v. Nakkim ( 2021 )

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Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
29-OCT-2021
08:29 AM
Dkt. 126 MO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI'I
LAWRENCE P. PECK; ROBBYN L. PECK; and PECK INC.,
a Hawaii Corporation, Plaintiffs-Appellees, v.
LYNN LINDER NAKKIM, Defendant-Appellant, and CONTINENTAL
PACIFIC, LLC, a Delaware Limited liability Company,
Defendant-Appellee, and JOHN DOES 1-10; JOHN DOE
PARTNERSHIPS 1-10; JOHN DOE CORPORATIONS 1-10;
JOHN DOE GOVERNMENTAL ENTITIES 1-10, Defendants
AND
LAWRENCE P. PECK; ROBBYN L. PECK; and PECK INC.,
a Hawaii Corporation, Plaintiffs-Appellees, v.
LYNN LINDER BOERNER NAKKIM, Defendant-Appellant, and LYNN
LINDER NAKKIM, as Trustee under the Lynn Linder Nakkim Trust
dated October 3, 2011, Defendant-Appellee, and
PAUL SULLA, Intervenor-Appellee, and JOHN DOES 1-10; JOHN DOE
PARTNERSHIPS 1-10; JOHN DOE CORPORATIONS 1-10, Defendants
APPEAL FROM THE CIRCUIT COURT OF THE THIRD CIRCUIT
(CIVIL NO. 04-1-374 AND 14-1-180}
MEMORANDUM OPINION
(By: Ginoza, Chief Judge, Leonard and Hiraoka, JJ.)
I. Introduction
This case arises from a contract dispute between
Defendant-Appellant Lynn Linder Nakkim (Nakkim) and Plaintiffs-
Appellees Lawrence P. Peck (Mr. Peck), Robbyn L. Peck (Mrs. Peck;
together, the Pecks), and Peck, Inc. (collectively, Plaintiffs).
In 2003, Nakkim and the Plaintiffs executed two documents: {1) an
Agreement of Sale for a 50-acre parcel of land (Mt. View
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Property) to be sold by Nakkim to the Pecks; and (2) a
Construction Contract between Nakkim and Peck, Inc. for the
construction of a residence for Nakkim on a separate parcel of
land (Nakkim Residence). The Pecks agreed to purchase the Mt.
View Property from Nakkim for $180,000 to be paid in two ways:
(i) the Pecks agreed to pay $87,412.42 through monthly payments
of $1,054.42 beginning December 1, 2003; and (2) the remaining
balance ($92,587.58) would be paid by providing credit to Nakkim
for the first payments due to Peck, Inc. under the Construction
Contract.
Nakkim appeals from the following: (1) “Order Denying
[Nakkim's] Motion to Prohibit Plaintiffs From Performing Without
a Valid State Contractor's License" (Order Denying Motion To
Prohibit) filed November 29, 2019; (2) "Order Granting Motion to
Release Deeds for Filing" (Order To Release Deeds} filed November
29, 2019; and (3) "Order Denying [Nakkim's] Non-Hearing Motion to
Reconsider, Alter or Amend '[Order To Release Deeds]'" (Order
Denying Reconsideration Re: Deeds) filed February 3, 2020, all
entered by the Circuit Court of the Third Circuit (Circuit
Court) ./
Nakkim contends the Circuit Court erred in (1) denying
her motion to prohibit Plaintiffs from performing without a valid
contractor's license; and (2) allowing the premature release of
the deeds to the Mt. View Property to the Pecks and allowing the
transfer of title which is the subject of the unsatisfied
contract between the parties.
We have appellate jurisdiction to address Nakkim's
appeal and we affirm the three orders challenged in this appeal.
II. Background
This is the second appeal arising from two consolidated
lawsuits between these parties. Plaintiffs initially filed a
"Complaint for Specific Performance, Injunctive Relief and
+ The Honorable Greg K. Nakamura entered the Order Denying Motion To
Prohibit and the Order To Release Deeds. The Honorable Darien W.L. Ching
Nagata entered the Order Denying Reconsideration Re: Deeds.
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Damages" against, inter alia, Nakkim, on November 12, 2004, in
Civil No. 04-1-374. On October 2, 2008, after a jury-waived
trial, the Circuit Court entered judgment against Nakkim and in
favor of the Plaintiffs. Nakkim appealed, challenging several of
the Circuit Court's findings of fact (FOFs) and conclusions of
law (COLs) in Peck v. Nakkim, No. 29480, 2013 WL 6762359 (Haw.
App. Dec. 20, 2013) (mem) (First Appeal}. ‘
In the First Appeal, we vacated the Circuit Court's
FOFs and COLs to the extent that the Circuit Court found that the
Agreement of Sale and the Construction Contract were intended to
form a single contract but ordered specific performance on only
one part of the agreement and reformed the contract by |
substituting monetary compensation for the construction of the
Nakkim Residence. Id. at *10-11. We also held that the Circuit
Court erred by failing to enter any FOFs or COLs as to whether
Nakkim was threatening to or in actual breach of either the
Agreement of Sale or the Construction Contract in rendering its
judgment of specific performance against Nakkim and in favor of
the Plaintiffs. Id. at *9. We remanded the case to the Circuit
Court for further proceedings.
On April 29, 2014, in Civil No. 14-1-180, the
Plaintiffs filed another Compiaint against, inter alia, Nakkim,
claiming among other things that Nakkim delayed the commencement
of construction for the Nakkim Residence by failing to obtain the
necessary approvals and breached the Agreement of Sale and
Construction Contract. The Pecks also claim that during pendency
of the First Appeal, Nakkim transferred the deeds to the Mt. View
Property and the land for the construction of the Nakkim
Residence to Nakkim as the sole trustee under the Lynn Linder
Nakkim Trust. On March 4, 2015, the Circuit Court consolidated
Civil Nos. 14-1-180 and 04-1-374.
On June 6, 2016, the Circuit Court entered Amended
Findings of Fact, Conclusions of Law (Amended FOFs/COLs) pursuant
to the holding in Peck, 2013 WL 6762359, which Nakkim does not
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challenge.? In the Amended FOFs/COLs, the Circuit Court found in
relevant part:
13. (T]he Court finds that the delay in the start of
construction on Defendant's Waiki'i Ranch property was not
the fault of Plaintiffs, but primarily attributable to
Defendant's failure to get approvals from the Design
Committee in a timely fashion.
16. [The Pecks] have expended in excess of
$120,000.00 in improvements upon the Mt. View land purchased
by them to construct a dwelling thereon and taken other
actions, in reliance on the Agreement cf Sale.
17. The Court determines that [the Pecks] are
entitled to specific performance of the Agreement of Sale.
18. After consideration of the Memorandum Opinion
entered in this case by the Intermediate Court of Appeals of
the State of Hawaii (the "ICA") the Court modifies its'
[sic] prior Decision and determines that both the Agreement
of Sale and the Construction Contract that are [sic]
specifically enforceable as a single agreement.
21. Based on the Findings of Fact, the court makes
the mixed Finding of Fact and Conclusion of Law, that
Defendant NAKKIM threatened to breach and/or breached the
agreement encompassed by the Agreement of Sale and the
Construction Contract and that Nakkim unequivocaily
repudiated the agreement.
22, Finally, in Paragraph 18 of the original Findings
of Fact, the finding was made that the Construction Contract
was "too imprecise to specifically enforce". The ICA
vacated that finding and made no comment on the effect of
the finding that the Construction Contract was "too
imprecise to specifically enforce." One possible inference
is that the ICA does not agree with the finding.
Accordingly, the court make [sic] no finding on this point
and specifically enforces the Construction Contract
component of the agreement as allowed by law.
After giving credit to the Pecks for monthly payments,
adding insurance premiums, real property taxes, and interest
payable at the judgment rate of interest of ten percent (10%) a
year on the principal amount due, the Circuit Court calculated
the Pecks' financial obligation to Nakkim under the Agreement of
2 "Pindings of fact ... that are not challenged on appeal are binding
on the appellate court." Okada Trucking Co. v. Bd. of Water Supply, 97 Hawai'i
450, 458, 40 P.3d 73, 81 (2002).
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Sale as $133,653 as of August 31, 2017 plus $20.75 for each day
after August 31, 2017. On September 27, 2017, the Circuit Court
ordered that the Pecks deposit the full amount due on the
Agreement of Sale with the exception of the Construction Contract
component (the first $92,587.58 credit for Peck, Inc.) within
sixty days from the date of the order. On or about November 17,
2017, the Pecks deposited $135,000.
On January 8, 2018, the Circuit Court entered its
"Order Granting Motion to Appoint Clerk to Sign Deed and Related
Closing Documents on Behalf of [Nakkim] Individually and as
Trustee or in the Alternative for an Order/Judgment Divesting
Title in Lieu of Directing a Conveyance," which directed Nakkim
to sign and deliver the deed to the Mt. View Property to be held
by the Circuit Court.
On October 11, 2019, the Pecks filed a "Motion to
Release Deeds for Filing" (Motion To Release Deeds) asking the
Circuit Court to release the deeds to the Mt. View Property so
that the Pecks could file and record title to the property in
their name. Also on October 11, 2019, Nakkim filed a "Motion to
Prohibit Plaintiffs From Performing Without a Valid State
Contractor's License" (Motion To Prohibit) arguing that Mr. Peck
no longer held a valid State contractor's license and thus could
not perform under the Construction Contract.
On November 29, 2019, the Circuit Court entered its
Order To Release Deeds, which states, in relevant part:
1. The Motion To Release Deeds for filing is hereby
GRANTED subject to the filing of a lien on the Mt. View
portion of the property regarding [the Pecks'] obligations
to perform under the Construction Contract portion of that
integrated Contract consisting of the Agreement of Sale and
the Construction Contract both dated November 29, 2003. The
Deeds heid by the Court shall be released to the [Pecks] or
their counsel of record upon the filing of this Order and
the lien.
2. A copy of this Order shall be filed in the Bureau
of Conveyances along with the Deeds released to [the Pecks]
and the lien herein.
3. The monies deposited by [the Pecks] on or about
November 17, 2017 ($135,000) and the interest earned thereon
shall be released to [Nakkim] or her counsel of record upon
presentation of this Order to the Clerk.
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Also on November 29, 2019, the Circuit Court entered its Order
Denying Motion to Prohibit. On December 1, 2019, Nakkim filed a
"Notice of Pendency of Action and Lien Re: TMK (3) 1-8-005:113."
III. Discussion
A. Appellate Jurisdiction Under the Forgay Doctrine
As a preliminary matter, we determine that we have
appellate jurisdiction over Nakkim's appeal. Hawaii Revised
Statutes (HRS) § 641-l(a) (2016) authorizes appeals to the ICA
from "final judgments, orders, or decrees[.]" Appeals under HRS
§ 641-1 “shall be taken in the manner . . . provided by the rules
of court.” HRS § 641-l(c) (2016). Hawai‘i Rules of Civil
Procedure (HRCP) Rule 58 requires that "[e]very judgment shall be
set forth on a separate document." Typically, an appeal may be
taken only after an appealable judgment has been entered
resolving claims in favor of and against the parties pursuant to
HRCP Rule 58 or 54(b). Jenkins v. Cades Schutte Fleming &
Wright, 76 Hawai‘i 115, 119, 869 P.2d 1334, 1338 (1994).
An exception to the general rule requiring a final
judgment is the Forgay doctrine, Forgay v. Conrad, 47 U.S. 201(1848), which "allows an appellant to immediately appeal a
judgment for execution upon property, even if all claims of the
parties have not been finally resolved." Ciesla v. Reddish, 78
Hawai‘i 18, 20, 889 P.2d 702, 704 (1995). Under the Forgay
doctrine, Hawai‘i appellate courts “have jurisdiction to consider
appeals from judgments which [1] require immediate execution of a
command that property be delivered to the appellant's adversary,
and [2] the losing party would be subjected to irreparable injury
if appellate review had to wait the final outcome of the
litigation." Id. (citations, internal quotation marks omitted;
some brackets added and some omitted); see also Lambert v.
Teisina, 131 Hawai‘i 457, 461-62, 319 P.3d 376, 380-81
(2014) (noting that "[f]loreclosure decrees, writs of possession,
and orders for the sale of specific property are examples of
orders and decrees that [the Hawai‘i Supreme Court] has held to
be appealable under the Forgay doctrine[,]" and holding there was
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appellate jurisdiction to review an order confirming a partition
sale and directing distribution of the proceeds).
In this case, although there is a lien on the Mt. View
Property and there was a release of $135,000 in favor of Nakkim,
the Nakkim Residence has not yet been constructed and the Circuit
Court's Order To Release Deeds required that deeds to the Mt.
View Property be delivered to Nakkim's adversary, the Pecks.
This allowed the Pecks to record title to the Mt. View Property
in their name and affected Nakkim's property rights.
Accordingly, we have appellate jurisdiction to review
the Circuit Court's Order To Release Deeds regarding the Mt. View
Property, and the Order Denying Reconsideration Re: Deeds.
Further, we have appellate jurisdiction to review the Circuit
Court's Order Denying Motion To Prohibit because Nakkim argues
that Mr. Peck cannot perform his obligation to build the Nakkim
Residence without his contractor's license. As we stated in the
First Appeal, the Agreement of Sale and the Construction Contract
were intended by the parties to be an expression of a single
agreement between Plaintiffs and Nakkim, and in that agreement,
Nakkim is to convey the Mt. View Property to the Pecks in
exchange for the construction of the Nakkim Residence by the
Plaintiffs. 2013 WL 6762359, at *11. The Circuit Court heard
arguments regarding the Motion To Prohibit and the Motion To
Release Deeds during the same hearing and filed the Order Denying
Motion To Prohibit and the Order To Release Deeds on the same
day. The Circuit Court's Order To Release Deeds is implicitly
dependent on a determination that the Pecks could fulfill their
obligation to build the Nakkim Residence without Mr. Peck's
contractor's license.
Therefore, we review Nakkim's points of error raised in
this interlocutory appeal.
B. The Circuit Court Did Not Err In Denying Nakkim's Motion To
Prohibit
Nakkim contends the Circuit Court erred in denying her
Motion To Prohibit because Mr. Peck is no longer a licensed
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contractor and is thus unable to perform under the Construction
Contract without her approval. "As a general rule, the
construction and legal effect to be given a contract is a
question of law freely reviewable by an appellate court.” Brown
v. KFC Nat'l Mgmt. Co., 82 Hawai‘i 226, 239, 921 P.2d 146, 159
(1996) (citations omitted).
Nakkim argues that under the Agreement of Sale, the
Pecks are prohibited from transferring their rights and duties
and cannot transfer the duty to perform the Construction Contract
to another person without Nakkim's consent.*? Nakkim also argues
that the Construction Contract is a "personal services contract"
involving the personal skill and relationship of confidence in
Mr. Peck and therefore, the Construction Contract is not
assignable without her express consent. We conclude the Circuit
Court did not err in its Order Denying Motion To Prohibit.
First, notwithstanding Nakkim's contention that Mr.
Peck is the contractor under the Construction Contract and/or the
Agreement of Sale, the Construction Contract is between Nakkim
and Peck, Inc. and specifically refers to Peck, Inc. as the
"Contractor". Furthermore, the Agreement of Sale contains the
following relevant definitions:
(B) "SELLER" LYNN NAKKIM, husband and wife [sic], will he
called the "SELLER."
{(C} "BUYER(S)" LAWRENCE P. PECK & ROBBYN L. PECK, will be
called the "BUYER".
(fF) "CONSTRUCTION CONTRACT" The Contract between the SELLER
and BUYER for the construction of a HOME on SELLER'S
property. Said CONSTRUCTION CONTRACT CONTRACT [sic] shall
be balance of the payment made for PROPERTY.
The Agreement of Sale also states, "[i]t is agreed that
BUYER shall build on SELLER'S property a HOME as defined in
4 Specificaliy, Nakkim cites the following provision from the Agreement
of Sale:
(f£) Consents. Any consents necessary under this agreement
will not be unreasonably withheld. Any. transfer of this
agreement by BUYERS to another party will require consent of
the SELLER.
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CONSTRUCTION CONTRACT documents." In other words, under the
Agreement of Sale, both Mr. Peck and Mrs. Peck, as the "Buyer[s]”
are required to build the Nakkim Residence. Neither agreement
states that Mr. Peck is a licensed contractor or that he is
required to maintain a valid state contractor's license in order
to perform.
Second, “[a]n ‘assignment’ is a transfer of property or
some other right from one person (the 'assignor'’) to another (the
'assignee'), which confers a complete and present right in the
subject matter to the assignee." 6 Am. Jur. 2d Assignments § 1
{footnotes omitted).
Here, Mr. Peck's declaration attached to the Memorandum
in Opposition to Motion to Prohibit states, inter alia, that he
did not need a license to supervise or manage a construction
project and that Kimo Kahele Construction has worked with Peck,
Inc. for over fifteen years. At the hearing on October 31, 2019,
Plaintiffs' counsel asserted that Mr. Peck controls Peck, Inec.,
that he will be on-site to assist in building the Nakkim
Residence and that there would be a licensed contractor of record
to work with Mr. Peck. Therefore, even if the Construction
Contract is an unassignable personal service contract between Mr.
Peck and Nakkim, the proposed arrangement between Mr. Peck and a
licensed contractor is not an "assignment" because the Plaintiffs
are not transferring any rights.‘ Instead, to have a licensed
contractor build the Nakkim Residence, Plaintiffs are delegating
The principle that most rights under contracts are
freely assignable is subject to the exception that
executory contracts for personal services or those
involving a relationship of confidence are not
assignable unless the contract so provides, the other
party consents to or ratifies the assignment, or the
assignment would not change the character of the
performance or the obligation.
6. Am. Jur. 2d Assignments § 26 {emphases added) (footnotes omitted).
Thus, even if the Construction Contract is an unassignable personal
services contract, and Peck, Inc.'s use of another licensed contractor is an
"assignment," Nakkim does not explain how the assignment would change the
character of the performance or the obligation of Mr. Peck who will still
supervise and work with the licensed contractor, or change the obligation of
the Pecks to build the Nakkim Residence for Nakkim under the Agreement of
Sale.
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their duties to a third party. Black's Law Dictionary defines
"delegation" as "[tJhe act of entrusting another with authority
or empowering another to act as an agent or representative[.]"
Black's Law Dictionary 536 (lith ed. 2019). "[DJelegation of
duties" is defined as "[a] transaction by which a party to a
contract arranges to have a third party perform the party's
contractual duties." Id. Such delegation would not relieve the
Pecks of their obligation under the Agreement of Sale to build
the Nakkim Residence.
Finally, contrary to Nakkim's assertion that
Plaintiffs' duties cannot be delegated, the Construction Contract
states, in pertinent part:
[Peck, Inc.] accepts the relationship or trust and
confidence established by this Agreement and convenience
with the Owner to cooperate and utilize [Peck, Inc.'s] best
skill, effort and judgment in furthering the interests of
the Owner. And to furnish efficient business administration
and supervision; to make best effort to furnish at all times
an adequate supply of workers and materials; and to perform
the Work in the best way and most expeditious and economical
manner consistent with the interests of the Owner.
5. SUPERVISION AND PROCEDURES: [Peck, Inc.ij shall supervise
and direct the Work, using [Peck, Inc.]‘'s best skill and
attention. [Peck, Inc.] shail be solely responsible for and
have control over construction means, methods, techniques,
sequences and procedures and coordinating all portions of
the Work under the Contract, unless Contract Documents give
other specific instructions concerning these matters.
(Emphases added). The Construction Contract allows for Peck,
Inc. to supply workers and have sole control over the
construction methods without seeking approval from Nakkim,
including delegation of work to a licensed contractor. Thus, the
Circuit Court did not err in denying Nakkim's Motion To Prohibit.
Cc. The Circuit Court Did Not Err In Granting The Pecks' Motion
To Release Deeds
Nakkim contends that the Circuit court erred in
prematurely releasing the Mt. View Property deed to the Pecks
because the Pecks have not started construction of the Nakkim
Residence and Nakkim did not receive the credit for the first
$92,587.58 of payments under the Construction Contract.
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"The awarding of specific performance is a matter
addressed to the sound discretion of the trial court ... and its
decision will be set aside only where there has been a manifest
abuse thereof." Clarkin v. Reimann, 2 Haw. App. 618, 623, 638
P.2d 857, 861 (1981) (citations omitted). A manifest abuse of
discretion occurs where the lower court's decision "clearly
exceeded the bounds of reason or disregarded rules or principles
of law or practice to the substantial detriment of a party
litigant." Id. at 624, 638 P.2d at 861 (citations omitted).
In the First Appeal, this court held the Circuit Court
erred in ordering specific performance "without entering a
finding that Nakkim was threatening to or in actual breach."
Peck v. Nakkim, 2013 WL 6762359 at *9 (citing Kaleikau v. Hail,
27 Haw. 420, 430 (Haw. Terr.1923) and Hawaiian Paradise Park
Corp. v. Friendly Broad. Co., 414 F.2d 750, 758 (9th Cir.1969)).
On remand after the First Appeal, however, the Circuit Court made
the following express finding in the Amended FOFs/COLs:
21. Based on the Findings of Fact, the court makes the
mixed Finding of Fact and Conclusion of Law, that Defendant
NAKKIM threatened to breach and/or breached the agreement
encompassed by the Agreement of Sale and the Construction
Contract and that Nakkim unequivocally repudiated the
agreement.
(Emphasis added). This finding is uncontested and we are thus
bound by it on appeal. Okada Trucking Co., 97 Hawai‘i at 458, 40
P.3d at 81. In the Amended FOFs/COLs, the Circuit Court made the
same ruling in its COL 4. Thus, in terms of ordering specific
performance against Nakkim, the Circuit Court on remand remedied
an error previously noted in the First Appeal.
In the Motion To Release Deeds, the Pecks sought to
file and record title to the property in their name "to protect
[their] beneficial interest in the Mt. View property."
Furthermore, in the Amended FOFs/COLs, the Circuit Court found
that "[the Pecks] have expended in excess of $120,000.00 in
improvements upon the Mt. View land purchased by them to
construct a dwelling thereon and taken other actions, in reliance
on the Agreement of Sale." During an evidentiary hearing on
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January 31, 2019, Mr. Peck testified that the Pecks could not
obtain liability insurance coverage for the Mt. View Property
because their names were not on the deed. During the same
hearing, Nakkim also testified that she was unable to obtain
insurance for the Pecks because she had no control or access to
the property.
Nakkim argues that transfer of title for the Mt. View
Property is premature because the Agreement of Sale provides,
"C(ljegal title to the [Mt. View Property] shall remain in the
SELLER until the BUYER has done everything they are required to
do under this agreement[,]" including the construction of the
Nakkim Residence under the Construction Contract and credit for
the first $92,587.58 for the construction.® In the First Appeal,
we held that "construction of the [Nakkim Residence] was clearly
an obligation, nonperformance of which would constitute default."
2013 WL 6762359, at *6. We further concluded that "construction
of the [Nakkim Residence] was not a condition precedent, but
rather, part of the consideration for the transfer of the [Mt .
View] Property." Id.Importantly, the Circuit Court made unchallenged FOFs
that the delay in the construction of the Nakkim Residence was
not the fault of Plaintiffs, but was primarily attributable to
5 MNakkim also cites the following provisions of the Agreement of Sale -
in support of her argument:
"CONSTRUCTION CONTRACT" The Contract between the SELLER and
BUYER for the construction of a HOME on SELLER'S property.
Said CONSTRUCTION CONTRACT CONTRACT [sic] shali be balance
of the payment made for PROPERTY.
FINAL CLOSING. Upon final payment of all principal and
interest due under this agreement, SELLER agrees to fully
convey all their rights, title and interest in the property
in BUYER, free and clear of all liens, mortgages, etc.
{d) Upon full payment SELLER will. execute a Warranty Deed in
favor of the BUYER.
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Nakkim's delays and failure to obtain necessary approvals for the
construction in a timely manner.®
§ In the Amended FOFs/COLs, the Circuit Court made the following
relevant findings:
10. The Court finds that increase in the cost of
construction costs which arose during delay in the
commencement date of construction is a reasonable ground for
seeking an increase in the Construction sum if the delay was
not the result of fault on the part of Plaintiff Peck Inc.
11. [Nakkim] was responsible for obtaining approvals
from the Design Committee of the Waiki‘i Ranch Homeowners’
[sic] Association ("Design Committee"). In order to build
her house, [Nakkim] was required to obtain a variance from
the [D]lesign [CJommittee to allow for a trapezoidal building
area. On August 19, 2004, the Design Committee gave notice
to the members of the Waiki‘i Ranch Homeowners Association
of a public hearing to consider [Nakkim's]} application for a
variance. ‘
12. On September 28, 2004, the Design Committee
approved the variance and also preliminarily approved
[Nakkim's] project plans. The preliminary approval required
that [Nakkim] meet certain conditions, including the
submission of a landscape plan. Therefore, (Nakkim] could
not have given notice to [Mr. Peck] to begin construction on
[Nakkim's] Waiki'i Ranch property until after November 5,
2004,
13. As a result, the Court finds that the delay in
the start of construction on [Nakkim's] Waiki‘i Ranch
property was not the fault of Plaintiffs, but primarily
attributable to [Nakkim's] failure to get approvals from the
Design Committee in a timely fashion.
19. On Page 4 of the Memorandum Opinion, the ICA
noted: .
"In response, Nakkim sent Peck a letter on July 21,
2004, in which she stated that "a deal was a deal," and
began to take over payments on the Continental Pacific
Mortgage "in anticipation of [Peck's] defection[.]"
Additicnally, Nakkim wrote that she would increase the sale
price of the Property if he wanted to renegotiate the price
of the Home."
"As early as October 7, 2004, Nakkim began listing the
Property for sale. Then, through a November 4, 2004 letter,
Nakkim gave Peck, Inc. seven days to complete the Home.
Citing the "Termination of Contract by Owner" clause of the
Construction Contract, Nakkim alleged that Peck had
“persistently and repeatedly failed to perform the work
according to the contract and its specifications,” and that
such delays entitled her to "finish the work by whatever
reasonable method [she] the owner may find expedient." This
ultimatum was reiterated in a November 5, 2004 letter, which
also informed Peck that the "entire matter" was cancelled.
(continued...)
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As noted, the Circuit Court also found that Nakkim threatened to
breach and/or breached the agreement, and that she unequivocally
repudiated the agreement. Finally, the Circuit Court made the
unchallenged conclusion of law that based upon the FOFs and
drawing all reasonable inferences therefrom, “{the Pecks] have
substantially complied with the terms and conditions of the
Agreement of Sale and are entitled to specific performance of the
Agreement of Sale." We further note that this litigation has
been ongoing for nearly seventeen years since Plaintiffs!
complaint against Nakkim in 2004. Given the Circuit Court's
unchallenged FOFs/COLs, the Circuit Court did not manifestly
abuse its discretion in awarding specific performance to the
Pecks.
Finally, Nakkim fails to provide any cogent argument
that the Circuit Court's Order To Release Deeds clearly exceeded
the bounds of reason or disregarded rules or principles of law or
practice to her substantial detriment. To the contrary, Nakkim
received the payment of the Pecks' outstanding financial
obligation and obtained a lien on the Mt. View Property to
protect her interest in the Mt. View Property should the Pecks
fail to perform according to the Agreement of Sale and the
Construction Contract. In the Order To Release Deeds, the
Circuit Court specifically stated:
1. The Motion to Release Deeds for Filing is hereby
GRANTED subject to the filing of a lien on the Mt. View
portion of the property regarding Plaintiffs’ obligations to
€(...continued)
However, it appears that, as of November 5, 2004, Nakkim had
not obtained final approval to begin construction of the
Home."
The above statements of fact in the Memorandum Opinion
of the ICA are hereby adopted as Findings of Fact by the
court.
20. In addition, based on Exhibit 80, the Court finds
by a letter dated August 12, 2004 from [Nakkim] to [Mr.
Peck], that Nakkim had offered to [Mr.] Peck to modify the
Agreement of Sale by increasing the amount payable under the
Agreement of Sale in exchange for an increase in the charges
under the Construction Contract or deleting the Construction
Contract and increasing the amount payable [in] the
Agreement of Sale.
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NOT FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER
perform under the Construction Contract portion of that
integrated contract consisting of the Agreement of Sale and
the Construction Contract both dated November 29, 2003. The
Deeds held by the Court shall be released to the Plaintiffs
or their counsel of record upon the filing of this Order and
the lien.
The Order To Release Deeds also benefitted Nakkim by releasing
the balance deposited by the Pecks for their outstanding
financial obligation of $135,000 to Nakkim under the Agreement of
Sale. Thus, the Circuit Court did not clearly exceed the bounds
of reason or disregard rules or principles of law or practice to
the substantial detriment of Nakkim by releasing the Mt. View
Property deed to the Pecks as specified in its Order To Release
Deeds.
IV. Conclusion
For the foregoing reasons, we affirm the following
entered by the Circuit Court of the Third Circuit: (1) "Order
Denying Defendant's Motion to Prohibit Plaintiffs From Performing
Without a Valid State Contractor's License" filed November 29,
2019; (2) "Order Granting Motion to Release Deeds for Filing"
filed November 29, 2019; and (3) "Order Denying Defendant's Non-
Hearing Motion to Reconsider, Alter or Amend ‘Order Granting
Plaintiff's Motion for Release of Deeds Filed October 11, 2019'"
filed February 3, 2020. The case is remanded to the Circuit
Court.
DATED: Honolulu, Hawai‘i, October 29, 2021.
On the briefs: /s/ Lisa M. Ginoza
Chief Judge
Michael S. Zola,
for Defendants-Appellants. /s/ Katherine G. Leonard
Associate Judge
Douglas L. Halsted,
for Plaintiffs-Appellees. /s/ Keith K. Hiraoka
Associate Judge
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