Pflueger, Inc. v. AIU Holdings, Inc. ( 2022 )

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Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
31-AUG-2022
09:15 AM
Dkt. 111 SO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI#I
PFLUEGER, INC., Plaintiff-Appellant, v.
AIU HOLDINGS, INC., NATIONAL UNION FIRE INSURANCE COMPANY OF
PITTSBURGH, PENNSYLVANIA, Defendants/Crossclaim Defendants-
Appellees, and NOGUCHI & ASSOCIATES, INC.,
Defendant/Crossclaim Plaintiff-Appellee, and
DOE CORPORATIONS 1-10; DOE PARTNERSHIPS 1-10;
and DOE ENTITIES 1-10, Defendants.
APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
(CIVIL NO. 09-1-1326)
SUMMARY DISPOSITION ORDER
(By: Wadsworth and McCullen, JJ.,
with Hiraoka, Presiding Judge, concurring separately)
Plaintiff-Appellant Pflueger, Inc. (Pflueger) appeals
from the Circuit Court of the First Circuit's March 14, 2017
Final Judgment, which was entered in favor of Pflueger's
insurance broker, Defendant/Crossclaim Plaintiff-Appellee Noguchi
& Associates, Inc. (Noguchi).1 In its points of error on appeal,
Pflueger contends that the circuit court erred in (1) granting
Noguchi's motion for summary judgment, (2) denying Pflueger's
motion for reconsideration, and (3) entering final judgment in
favor of Noguchi.
1
The Honorable Jeannette H. Castagnetti presided.
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Specifically, Pflueger argues that, "as to causation,
despite the deposition testimony of Mr. Van Dina and Ms. Ngeo,
there still exists a question of fact as to whether the insurer
would have found coverage and ultimately covered the claim, had
the subpoenas been timely tendered."
Upon careful review of the record and the briefs
submitted by the parties and the issues raised, we resolve this
case as discussed below, and vacate and remand.
Background
Because this case has a long history spanning
approximately fourteen years, we reiterate only the facts
relevant to resolving this appeal.
Subpoenas and Claims
During the relevant time, Pflueger was insured by
Defendant/Crossclaim Defendant-Appellee National Union Fire
Insurance Company of Pittsburgh, Pennsylvania (National Union).
Defendant/Crossclaim Defendant-Appellee AIU Holdings, Inc. (AIU)
was National Union's "authorized representative." In May 2008,
when Pflueger notified Noguchi that it had received certain
federal grand jury subpoenas, Noguchi informed Pflueger that the
subpoenas did not qualify as a "claim" under two insurance
policies issued by National Union to Pflueger (Policies).
Noguchi did not forward a claim or the subpoenas to AIU or
National Union, and did not seek clarification as to whether the
grand jury subpoenas were covered under the Policies. Relying on
Noguchi's representations, Pflueger took no further action until
its attorney submitted a demand letter tendering Pflueger's
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defense to National Union approximately nine months later, in
February 2009.
AIU's claims analyst, Dennis Van Dina (Van Dina),
responded to Pflueger's attorney in two letters dated April 29,
2009, one for each of the Policies. Van Dina concluded that
Pflueger's claim was untimely, as follows:
(1) "Policy no. 052-68-49 has a Policy Period
September 27, 2007 to September 27, 2008. Coverage B
states that the Policy provides coverage for Claims
first made against the Company or an Individual
Insured during the Policy Period or Discovery Period
(if applicable). The Grand Jury Subpoena was issued
on May 22, 2008. Thus, the matter will be deemed to
have been made on May 22, 2008. Clause 7 requires
that a Claim must be both made and reported during the
Policy Period or Discovery Period (if applicable) . .
. . However, this matter was submitted to National
Union on February 17, 2009; outside the applicable
reporting periods found with Clause 7 Notice/Claim
Reporting Provisions, and as amended by Endorsement
#2. Therefore, coverage is precluded."
(2) "Policy no. 052-68-49[ 2] [sic] has a Policy Period
September 27, 2008 to September 27, 2009. Coverage B
states that the Policy provides coverage for Claims
first made against the Company or an Individual
Insured during the Policy Period or Discovery Period
(if applicable). The Grand Jury Subpoena was issued
on May 22, 2008. Thus, the matter will be deemed to
have been made on May 22, 2008; outside the Policy
Period. Clause 7 requires that a Claim must be both
made and reported during the Policy Period or
Discovery Period (if applicable) . . . . However,
this Claim was made outside the Policy Period.
Therefore, coverage is precluded."
(Emphases added.) Regarding each of the Policies, Van Dina
added, "assuming this matter was both made and reported as per
the requirements of the Policy, the materials submitted to
National Union would not constitute a Claim." Van Dina stated,
"the language of the Policy requires that an indictment,
information or similar document is necessary for a Claim as
defined." Van Dina further stated, "National Union's preliminary
coverage position is based on the information presently
2
Van Dina incorrectly lists the Policy No. as 052-68-49. The correct
Policy No. is 01-277-00-32.
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available[,]" and asked that Pflueger provide "any additional
information . . . you feel would either cause us to review our
position or would assist us in our investigation or
determination[.]"
Following Van Dina's letters, Pflueger filed an action
against Noguchi, AIU, and National Union. Pflueger brought
negligence and negligent misrepresentation claims against
Noguchi. Pflueger alleged that Noguchi failed to tender the
grand jury proceeding to AIU and National Union, and that as a
proximate result of Noguchi's negligence, Pflueger was denied
coverage for the matter. Pflueger further alleged that Noguchi
made untrue representations that the grand jury proceeding was
not covered under the Policies, and that Pflueger reasonably
relied on these representations in declining for a time to tender
the grand jury matter directly to AIU and National Union; as a
proximate result, AIU and National Union denied Pflueger's
eventual tender of the grand jury matter as untimely and denied
coverage.
Tiffany Ngeo's Testimony
In preparation for litigation, AIU's Senior Complex
Claims Director, Tiffany Ngeo (Ngeo), was deposed. She was asked
whether it was AIU's "position that there was no coverage
afforded for the grand jury subpoenas, regardless of when they
were reported to . . . AIU . . . ." Ngeo responded, "Well, we
have two defenses. One of them for each of the policy [sic], is
that it was either not made or reported within the policy. And
the other defense is that the grand jury subpoenas were not a
claim per the policy."
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Ngeo was also asked, "Is it fair to say that [AIU's]
position is that, first, there's no coverage for the grand jury
subpoenas –- grand jury subpoenas under the policy; and second,
even if there was coverage, they were not reported timely[?]"
Ngeo responded, "the grand jury subpoenas do not meet the
definition of a claim under either policy."
Van Dina's Testimony
Van Dina was also deposed and was asked, "Even if it
had been made timely, it's not a covered claim; is that right?"
Van Dina responded, "Right. Well, no. I'm sorry. Let me
rephrase that. Not that –- it may not even constitute the
definition of a claim." (Emphasis added.)
Van Dina was later asked, "[a]ssuming this claim had
been reported to where you found it to be timely, would there
still have be [sic] coverage under the policy?" Van Dina
responded, "I do not believe, based on what I reviewed today,
that –- that a claim would have been made at that time. So I
would say that coverage would not be available."
Van Dina was asked again, "regardless of whether the
claim was reported in May of 2008 allegedly when the insured
received or was served with the subpoena or in February of 2009
when it came across your desk, your position with respect to
coverage would not change?" Van Dina answered, "No." Van Dina
confirmed that his position was the subpoenas were not claims
under the policy.
Pflueger Settles With AIU and National Union
Following these depositions, Pflueger settled with AIU
and National Union, as evinced by AIU and National Union's
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petition for finding of good faith settlement, which the circuit
court granted, leaving the negligence claims against Noguchi to
be litigated.
James Schratz's Testimony
In the meantime, Pflueger's witness, James Patrick
Schratz (Schratz), was deposed. Schratz was critical of National
Union, explaining that its "conduct fell below the standard of
care when it failed to even research or consider contrary or
supporting legal authority."
Schratz opined that "Noguchi failed to timely report
the grand jury subpoenas and the Internal Revenue Service's
criminal investigation as a possible claim to Defendant National
Union." Noguchi also "didn't explain the pros and cons, i.e.,
your defense fees of 1 million may be covered and your premium
may go up x percent. Let me call the carrier and ask."
Instead, Noguchi "rendered an opinion as to coverage under the
policy when it admitted that such a determination was to be made
by the insurance company."
Noguchi's counsel questioned Schratz about whether
Noguchi caused Pflueger's damages, and Schratz acknowledged that
he was not asked to look at damages or retained to render any
opinions regarding causation. When asked, "you have no opinion
and have not been retained to express an opinion whether or not
those coverage representations caused any damages to Pflueger[,]"
Pflueger's counsel objected as misstating the prior testimony.
Schratz then answered, "coverage is still an open issue. The
very fact that National Union paid [the settlement amount], they
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don't pay money without thinking there's a problem, but with the
–- the coverage is still an open issue . . . ."
Schratz explained, "[i]f the court decides there's no
coverage, . . . then Noguchi's conduct hasn't caused any problems
that I know of." Schratz continued, "If the court determines
there's coverage, and I've got to tell you I think there is, but
I'm not going to give an opinion on that, although I just did,
then I think Noguchi's –- I think Noguchi's got serious liability
here."
Schratz was then asked if he would agree, based on
Ngeo's and Van Dina's testimony, it was National Union's position
"that regardless of when Noguchi or any other entity had reported
this claim to National Union, National Union's coverage denial
decision would have been the same?" Schratz replied, "Based on
Dina's –- Van Dina's deposition testimony, yes."
When questioned again about causation, specifically,
"isn't the crux of this case whether or not the conduct of
Noguchi proximately caused any damage to the insured[,]" Schratz
responded that it was "way outside the scope of my retention" and
"I've never looked at that issue." Schratz was then asked, "is
it fair to say you're not going to express that opinion at
trial?" Schratz answered, "I'm going to express the opinion it's
way outside the scope of my retention. I'm not going to express
any opinion on causation or the causation of the damages."
Summary Judgment - Subpoenas Constituted A Claim
Prior to trial, the circuit court granted Pflueger's
motion for partial summary judgment, finding that "the Grand Jury
Subpoenas, dated May 22, 2008 and directed at Pflueger, Inc.
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constitute a 'claim' as that term is defined under Insurance
Policy No. 052-68-49 and Insurance Policy No. 01-277-00-32 issued
by National Union . . . to Pflueger, Inc., as the named insured."
Trial and Appeal
During trial, the circuit court excluded Van Dina's and
Ngeo's testimonies on hearsay grounds, and the jury returned a
special verdict in favor of Pflueger. Pflueger, Inc. v. Noguchi
& Assocs., Inc., 136 Hawai#i 372, 362 P.3d 805, No. CAAP-14-
0001032, 2015 WL 7723045 at *2-3 (App. Nov. 23, 2015) (Mem. Op.)
(Pflueger I). Noguchi appealed, and this court vacated the
judgment, holding that the circuit court erred in excluding Van
Dina's and Ngeo's testimonies because they were essential to
Noguchi's defense. Id. at *3-5. On appeal, Noguchi did not
challenge the circuit court's order finding that the grand jury
subpoenas constituted a "claim" under the Policies.
Summary Judgment - No Causation
On remand, Noguchi moved for summary judgment on the
issue of causation, arguing that the testimony of witnesses
"fails to put forth any evidence which might support a finding of
proximate cause against Noguchi." (Formatting altered.) The
circuit court agreed, finding that Pflueger "has put forward no
evidence to the contrary to establish that Noguchi's conduct was
a contributing or substantial factor in insurer's decision to
deny coverage." (Formatting altered.) The circuit court further
found that, even if Noguchi was negligent, "it is undisputed and
uncontroverted that the insurer was going to deny [Pflueger's]
claim anyway." The circuit court, thus, granted Noguchi's motion
for summary judgment.
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Discussion
We review the circuit court's grant of summary judgment
de novo. Dairy Rd. Partners v. Island Ins. Co., Ltd., 92 Hawai#i
398, 411, 992 P.2d 93, 106 (2000). "Summary judgment is
appropriate if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to judgment
as a matter of law." Id. (citations and brackets omitted). "A
fact is material if proof of that fact would have the effect of
establishing or refuting one of the essential elements of a cause
of action or defense asserted by the parties." Id. (citations
omitted). "The evidence must be viewed in the light most
favorable to the non-moving party." Id. (citations omitted).
The movant bears the burden of establishing that there
was no genuine issue of material fact and that the movant was
entitled to a judgment as a matter of law. Id. at 412, 992 P.2d
at 107. In defending against the motion, the non-moving party
"must set forth specific facts showing that there is a genuine
issue for trial." Id. (citation omitted).
In determining legal (proximate) cause, "the
defendant's negligence need not have been the whole cause or the
only factor in bringing about the harm. It was enough that his
negligence was a substantial factor in causing plaintiff's
injuries." Knodle v. Waikiki Gateway Hotel, Inc., 69 Haw. 376,
386, 742 P.2d 377, 390 (1987) (cleaned up). In particular, with
negligence and comparative negligence, "experience has
established that proximate cause, sole negligence, contributory
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negligence, concurring negligence, and, by extension, comparative
negligence are not absolutes." Taylor-Rice v. State, 91 Hawai#i
60, 69, 979 P.2d 1086, 1095 (1999) (cleaned up). "It is the
exceptional case when they can be determined and enforced as a
matter of law." Id."Only where there is no conflict from the evidence and
but one inference can be drawn from the facts is it the duty of
the court to pass upon the questions of negligence and proximate
cause as questions of law." Id. (cleaned up). But, "where there
is conflicting evidence . . . on the issue of proximate
causation, the question is one for the trier of fact." Id. at
75, 979 P.2d at 1101 (citation and brackets omitted).
In its motion for summary judgment, Noguchi asserted
there was no evidence of causation, and offered the deposition
testimonies of Ngeo and Van Dina to show that AIU had determined
that the grand jury subpoenas failed to meet the definition of a
claim under the Policies. Noguchi makes a similar argument on
appeal, arguing based on the same deposition testimony that "AIU
would have denied coverage even if Noguchi had requested coverage
in May 2008 because the subpoena did not meet AIU's definition of
a claim."
This assertion as to what AIU "would have done" had a
timely tender been made was the sole basis for the circuit
court's grant of summary judgment on the issue of causation. In
light of the full summary judgment record, however, we hold that
the causation issue as framed by Noguchi (i.e., whether AIU would
have denied coverage even if Noguchi had timely tendered the
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grand jury subpoena matter) involved a genuine issue of material
fact.
Again, the issue of causation is generally an issue
left to the fact finder, and "[i]t is the exceptional case when
[it] can be determined and enforced as a matter of law." Taylor-
Rice, 91 Hawai#i at 69, 979 P.2d at 1095. Here, Noguchi bore the
burden of establishing that there was no genuine issue as to
whether its conduct caused Pflueger's losses. See Dairy Rd., 92
Hawai#i at 411-12, 992 P.2d at 106-07. In an attempt to meet
this burden, Noguchi produced testimony that, regardless of
timing, AIU would have denied coverage because the subpoenas were
not a claim under the Policies.
This testimony, however, viewed in the light most
favorable to Pflueger, does not make this the exceptional case.
Although this testimony undermined the causation element, it was
not subject to only one inference and, thus, did not completely
dispose of the causation element. See Pflueger I at *4
(explaining that "Van Dina and Ngeo's testimonies undermine the
causation element . . ."); see also First Ins. Co. of Hawaii,
Ltd. v. Sariaslani, 80 Hawai#i 491, 495-96, 911 P.2d 126, 130-31
(App. 1996) (ruling that homeowners' insurer did not satisfy its
burden of showing that there was no genuine issue of material
fact as to whether the insureds would have been denied insurance
if the insurer had been aware of previous losses that the
insureds did not disclose in their insurance application).
Whether Noguchi's actions and inactions were legal causes of
Pflueger's losses in light of AIU's assertions were issues for
the fact finder and could not be decided as a matter of law.
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Thus, Noguchi failed to meet its burden of establishing that
there was no genuine issue of material fact and it was entitled
to judgment as a matter of law.
Even if Noguchi had met its burden, Pflueger submitted
opposing evidence, including Van Dina's April 29, 2009 letters,
stating in part that coverage under the respective Policies was
precluded because the claim was made outside of the relevant
policy period or the applicable reporting periods. Viewed in the
light most favorable to Pflueger, this statement raised a
question as to whether Noguchi's conduct in failing to timely
tender the grand jury subpoena matter to AIU and National Union
was a substantial factor in causing Pflueger's alleged loss.3
The evidence Pflueger submitted also raised a question as to
whether Noguchi's alleged negligent misrepresentations – that the
grand jury proceeding was not covered under the Policies – caused
loss to Pflueger. See Zanakis-Pico v. Cutter Dodge, Inc., 98
Hawai#i 309, 321, 47 P.3d 1222, 1234 (2002) ("Plaintiffs may
recover the pecuniary losses caused by their justifiable reliance
on a negligent misrepresentation."). These questions were
genuine issues of material fact.
3
Pflueger asserted that it had incurred significant attorneys' fees
and costs in responding to the grand jury subpoenas, caused by Noguchi's
alleged negligence and the resulting loss of insurance coverage. Pflueger
also submitted copies of the Policies, which provided Directors, Officers and
Private Company Liability Coverage as follows:
This policy shall pay the Loss of [Pflueger] arising from a:
(i) Claim first made against [Pflueger] . . .
during the Policy Period . . . and reported to the Insurer
pursuant to the terms of this policy for any Wrongful Act .
. . . Insurer shall, in accordance with Clause 4 of this
Coverage section, advance Defense Costs of such Claim prior
to its final disposition.
Based on Van Dina's April 29, 2009 letters, it appears that AIU and National
Union also refused to advance defense costs to Pflueger.
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We, therefore, hold that the circuit court erred in
granting Noguchi's motion for summary judgment. Given this
holding, we need not address Pflueger's remaining points of error
as they relate to the granting of Noguchi's motion for summary
judgment.
Based on the foregoing, we vacate the circuit court's
March 14, 2017 Final Judgment and remand this case for further
proceedings.
DATED: Honolulu, Hawai#i, August 31, 2022.
On the briefs: /s/ Clyde J. Wadsworth
Associate Judge
Lyle S. Hosoda
Kevin T. Morikone /s/ Sonja M.P. McCullen
Addison D. Bonner Associate Judge
Kristen A. Yamamoto
for Plaintiff-Appellant.
Richard B. Miller
Patricia Kehau Wall
Christopher Shea Goodwin
for Defendant/Crossclaim
Plaintiff-Appellee.
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CONCURRING OPINION OF HIRAOKA, J.
I concur that the circuit court erred by granting
Noguchi's motion for summary judgment. But in my view: (1) what
National Union (or AIU) "would have done" had Noguchi timely
tendered Pflueger's subpoena1 is not a material fact; and
(2) Noguchi did not satisfy its burden as the summary judgment
movant.
This is an insurance agent errors and omissions case.
Pflueger has the burden to prove (among other things2) that if
Noguchi had tendered the subpoena to National Union in May 2008,
National Union would have been obligated (under the insurance
policy then covering Pflueger (the 2007-08 Policy)) to advance
defense costs incurred by Pflueger to respond to the subpoena.3
(1) In my view, how National Union "would have"
responded to a timely tender is not material to Noguchi's tort
liability to Pflueger. For summary judgment purposes, "[a] fact
1
The record indicates that an Assistant United States Attorney
subpoenaed certain documents from Pflueger's custodian of records on May 22,
2008. Although the record indicates that other subpoenas were served upon
other entities, the record does not contain information sufficient to
determine whether any of the other entities qualify as an insured under
Pflueger's insurance policies.
2
"Tersely stated, the elements of a cause of action founded on
negligence are: 1. A duty, or obligation, recognized by the law, requiring the
defendant to conform to a certain standard of conduct, for the protection of
others against unreasonable risks; 2. A failure on the defendant's part to
conform to the standard required: a breach of the duty; 3. A reasonably close
causal connection between the conduct and the resulting injury[;] and
4. Actual loss or damage resulting to the interests of another[.]" Knodle v.
Waikiki Gateway Hotel, Inc., 69 Haw. 376, 384–85, 742 P.2d 377, 383 (1987)
(cleaned up) (reformatted).
3
The 2007-08 Policy provided Directors, Officers and Private
Company Liability Coverage as follows:
This policy shall pay the Loss of [Pflueger] arising from a:
(i) Claim first made against [Pflueger] . . .
. . . .
during the Policy Period . . . and reported to [National
Union] pursuant to the terms of this policy for any Wrongful
Act . . . . [National Union] shall, in accordance with
Clause 4 of this Coverage Section, advance Defense Costs of
such Claim prior to its final disposition.
(Emphasis added.) The difference between a duty to defend and a duty to
advance defense costs is not material to the issue presented by this appeal.
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is material if proof of that fact would have the effect of
establishing or refuting one of the essential elements of a cause
of action or defense asserted by the parties." Ralston v. Yim,
129 Hawai#i 46, 55–56, 292 P.3d 1276, 1285–86 (2013) (quoting
First Ins. Co. of Haw. v. A & B Props., Inc., 126 Hawai#i 406,
413-14, 271 P.3d 1165, 1172-73 (2012)).
Had Noguchi tendered the subpoena to National Union in
May 2008 — before the 2007-08 Policy expired — National Union
would have had three options: (1) advance Pflueger's defense
costs to respond to the subpoena; (2) decline to advance defense
costs; or (3) advance defense costs under a reservation of
rights.4 National Union's denial of a tender would not end the
story; Pflueger could have filed a declaratory relief action,5
with or without a claim for bad faith.6 If National Union agreed
to advance defense costs under a reservation of rights, National
Union could itself have filed a declaratory relief action, with
or without a claim for reimbursement of defense costs advanced.7
If a court were to rule that National Union was not
obligated to advance Pflueger's defense costs, Noguchi's failure
4
Concerning a liability insurer's reservation of rights, see
generally Finley v. Home Ins. Co., 90 Hawai #i 25, 975 P.2d 1145 (1998).
5
See Hawaii Revised Statutes § 632-1 (1993) (providing that courts
may grant declaratory relief where there is an actual controversy between the
parties).
6
See Best Place, Inc. v. Penn Am. Ins. Co., 82 Hawai #i 120, 132,
920 P.2d 334, 346 (1996) (holding that there is a legal duty, implied in a
first- and third-party insurance contract, that the insurer must act in good
faith in dealing with its insured, and a breach of that duty of good faith
gives rise to an independent tort cause of action).
7
See, e.g., Buss v. Superior Ct. of Los Angeles Cnty., 939 P.2d
766, 776 (Cal. 1997) (holding that insurer may seek reimbursement for
defending claims that were not even potentially covered by its insurance
policy) (citing cases); Scottsdale Ins. Co. v. Sullivan Props., Inc., Civil
No. 04–00550 HG–BMK, 2007 WL 2247795, *5-6 (D. Haw. Aug. 2, 2007) ("[T]he
concepts applied in Buss, and in other court decisions allowing insurer to
recoup defense costs, are well-established in Hawaii law."); but see GGA, Inc.
v. Kiewit Infrastructure W. Co., Civ. No. 18-00110 JMS-WRP, 2020 WL 369643, at
*26 (D. Haw. Jan. 22, 2020) (acknowledging "the still apparently unresolved
question of Hawaii law whether (or under what circumstances) an insurance
company defending an insured under a reservation of rights would be entitled
to seek reimbursement of defense costs"). I express no opinion on whether (or
under what circumstances) Hawai#i would recognize a liability insurer's right
to Buss reimbursement.
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to tender the subpoena to National Union could not have been the
legal cause of any damage to Pflueger; even if Noguchi had
tendered, National Union would not have been obligated to advance
defense costs. On the other hand, if a court were to rule that
National Union would have been obligated to advance defense
costs, Pflueger would satisfy the legal cause element of its
negligence claim against Noguchi.
Accordingly, I disagree that what National Union "would
have done" in response to a timely tender of the subpoena is
material to Noguchi's potential tort liability to Pflueger. In
my view, what is material is whether National Union would
actually have been obligated — under the 2007-08 Policy — to
advance Pflueger's defense costs if Noguchi had timely tendered
the subpoena. Cf. Thomas v. Kidani, 126 Hawai#i 125, 129, 267
P.3d 1230, 1234 (2011) ("The causation element of legal
malpractice is often thought of as requiring a plaintiff to
litigate a 'trial within a trial.' That is, a plaintiff must
show both the attorney's negligence and also what the outcome of
the mishandled litigation would have been if it had been properly
tried.") (cleaned up).
(2) For Pflueger to prevail in its professional
liability claim against Noguchi, Pflueger must prove a case
within a case — that National Union would have been obligated to
advance Pflueger's defense costs had Noguchi timely tendered the
subpoena. Accordingly, for Noguchi to sustain its burden as the
summary judgment movant, it had to show that even if Pflueger's
subpoena had been timely tendered to National Union, National
Union would not have been obligated to advance defense costs
under the 2007-08 Policy. Only then could Noguchi's failure to
tender the subpoena to National Union not have been a legal cause
of damage to Pflueger. See Ralston, 129 Hawai#i at 57, 292 P.3d
at 1287 (explaining that where the party opposing a motion for
summary judgment bears the burden of proof at trial, the moving
party "may demonstrate that there is no genuine issue of material
fact by either: (1) presenting evidence negating an element of
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the non-movant's claim, or (2) demonstrating that the non-movant
will be unable to carry [its] burden of proof at trial").
Noguchi's motion for summary judgment did not show that
National Union could not have been obligated to advance
Pflueger's defense costs under the 2007-08 Policy even if Noguchi
had tendered the subpoena in May 2008. Thus, in my view Noguchi
failed to meet its burden to show that it was entitled to
judgment as a matter of law, and the circuit court erred by
granting Noguchi's motion for summary judgment.
For the foregoing reasons I would vacate the summary
judgment but, respectfully, on grounds other than those expressed
by the majority.
/s/ Keith K. Hiraoka
Presiding Judge
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