LFG Holdings, LLC v. Schmidt ( 2022 )

NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER
Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
16-NOV-2022
11:31 AM
Dkt. 80 SO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI#I
LFG HOLDINGS, LLC, a Hawaii limited liability company
and MAXAM PROPERTIES, LLC, a Hawaii limited
liability company, Plaintiffs/Counterclaim
Defendants-Appellees, v. THOMAS F. SCHMIDT,
Defendant/Counterclaimant-Appellant, and
INTERNATIONAL BUSINESS BROKERS, LLC, a Hawaii
limited liability company, and LIFE OF THE LAND
PACIFIC, LLC, a Hawaii limited liability company,
Defendants/Counterclaimants-Appellees,
and
THOMAS F. SCHMIDT, Third-Party Plaintiff-Appellant, and
INTERNATIONAL BUSINESS BROKERS, LLC, a Hawaii
limited liability company, and LIFE OF THE LAND
PACIFIC, LLC, a Hawaii limited liability company,
Third-Party Plaintiffs-Appellees, v. JERRY
RUTHRUFF, LARRY WHITE, DAMON L. SCHMIDT, LINDA
LOUISE SIMON, CAREY SUTHERLAND, PATRICIA M. LOUIA,
MELCOLM K. PERREIRA, ALICIA A. PERREIRA, SIONA
FRUEAN, CARLEEN LEINA#ALA FRUEAN, RICHARD STEPHEN
WALL, SAMUEL BROWN, POMAIKA#I PROPERTIES, LLC, a
Hawaii limited liability company, COHO PROPERTIES,
LLC, a Hawaii limited liability company, FIDELITY
NATIONAL TITLE COMPANY, a California corporation,
Third-Party Defendants-Appellees, and JOHN DOES 1-
10, JANE DOES 1-10, DOE PARTNERSHIPS, CORPORATIONS
AND/OR OTHER ENTITIES 1-10, Third-Party Defendants
APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
(CIVIL NO. 15-1-1337-07 VLC)
SUMMARY DISPOSITION ORDER
(By: Leonard, Presiding Judge, and Wadsworth and Nakasone, JJ.)
Defendant/Counterclaimant/Third-Party Plaintiff-
Appellant Thomas F. Schmidt (Schmidt), self-represented, appeals
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from the September 19, 2018 Judgment, entered pursuant to Hawai#i
Rules of Civil Procedure (HRCP) Rule 54(b), by the Circuit Court
of the First Circuit (Circuit Court).1/ The Judgment: (1)
dismissed the August 17, 2015 amended third-party complaint
(Third-Party Complaint) with prejudice; (2) expunged the
September 22, 2016 Notice of Pendency of Action "with respect to
Lots 79 A and 79 B"; and (3) was entered in favor of Third-Party
Defendants-Appellees Siona Fruean and Carleen Leina#ala Fruean
(the Frueans) and Melcolm K. Perreira and Alicia A. Perreira (the
Perreiras) (collectively, Third-Party Defendants), and against
Schmidt and Defendants/Counterclaimants/Third-Party Plaintiffs-
Appellees International Business Brokers, LLC, and Life of the
Land Pacific, LLC (collectively, Third-Party Plaintiffs). The
Judgment followed entry of the Circuit Court's July 17, 2017
"Order Granting Motion of Third-Party Defendants . . . for
Summary Judgment Against Third-Party Plaintiffs . . . and Motion
to Expunge Notice of Pendency of Action (Motion Filed November 9,
2016 and Substantive Joinder Filed November 17, 2016)" (MSJ
Order).
On appeal, Schmidt contends that the Circuit Court
erred in granting the Frueans' November 9, 2016 motion for
summary judgment as to the Third-Party Complaint and motion to
expunge the Notice of Pendency of Action (Motion for Summary
Judgment).2/
1/
The Honorable Virginia L. Crandall presided.
2/
In his opening brief, Schmidt does not challenge the MSJ Order to
the extent it granted the Perreiras' November 17, 2016 substantive joinder in
the Motion for Summary Judgment (Substantive Joinder). Any alleged error in
granting the Substantive Joinder is thus deemed waived. See Hawai #i Rules of
Appellate Procedure (HRAP) Rule 28(b)(4) and (7).
We further note that the opening brief fails to comply with HRAP
Rule 28(b) in numerous material respects. For example, the opening brief
generally fails to provide: (1) "record references supporting each statement
of fact or mention of court . . . proceedings" in the statement of the case,
as required by HRAP 28(b)(3); (2) for each point of error, a statement of
"where in the record the alleged error was objected to or the manner in which
the alleged error was brought to the attention of the court[,]" as required by
HRAP 28(b)(4); and (3) "citations to the . . . parts of the record relied on"
in the argument section, as required by HRAP 28(b)(7). In particular, Schmidt
makes several factual assertions without any citation to the record, and the
argument section is general and conclusory. Nevertheless, because we have
"consistently adhered to the policy of affording litigants the opportunity 'to
(continued...)
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After reviewing the record on appeal and the relevant
legal authorities, and giving due consideration to the issues
raised and the arguments advanced by the parties, we resolve
Schmidt's contentions as follows and affirm.
I.
As a threshold matter, we address Third-Party
Defendants' contention, made in their answering brief, that this
appeal should be dismissed because Schmidt "did not obtain the
leave of court required of a vexatious litigant in order to
maintain this litigation."3/ Third-Party Defendants rely on the
arguments made in their August 31, 2019 motion seeking, among
other things, dismissal of this appeal for lack of appellate
jurisdiction, because Schmidt did not obtain leave of court to
file his notice of appeal.
On October 18, 2019, this court entered an order
denying the August 31, 2019 motion as follows:
[It] appears that we have appellate jurisdiction over
Schmidt's appeal from the . . . [J]udgment . . . pursuant to
[HRS] § 641-1(a) (2016) and Rule 54(b) of the [HRCP]. It
further appears that [Third-Party Defendants'] argument that
Schmidt's third-party complaint should have been dismissed
based on a vexatious litigant order should have been
presented, in the first instance, in the court below and
then in conjunction with arguments presented on the merits
of this appeal or perhaps a cross-appeal.
Therefore, IT IS HEREBY ORDERED that [Third-Party
Defendants'] Motion is denied without prejudice to any
arguments or requests made in conjunction with the briefing
on the merits and without prejudice to any further action by
the merits panel.
In their answering brief, Third-Party Defendants make
no new arguments or requests based on the vexatious-litigant
2/
(...continued)
have their cases heard on the merits, where possible[,]'" we address Schmidt's
arguments to the extent they are discernible. Morgan v. Planning Dep't, Cnty.
of Kauai, 104 Hawai#i 173, 180-81, 86 P.3d 982, 989-90 (2004) (quoting
O'Connor v. Diocese of Honolulu, 77 Hawai#i 383, 386, 885 P.2d 361, 364
(1994)).
3/
We take judicial notice that on April 29, 2003, the Circuit Court
of the Third Circuit entered an order in a separate and unrelated case, Civil
No. 03-1-0037K, declaring that Schmidt is a vexatious litigant pursuant to
Hawaii Revised Statutes (HRS) § 634J-7 (1993) and prohibiting him from "filing
any new litigation" without first obtaining leave of the presiding judge of
the court where the litigation is proposed.
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order, and do not specify where in the record they brought the
vexatious-litigant issue to the attention of the Circuit Court.
Their argument is thus deemed waived for purposes of this appeal.
See Ass'n of Apartment Owners of Wailea Elua v. Wailea Resort
Co., Ltd, 100 Hawai#i 97, 107, 58 P.3d 608, 618 (2002)(arguments
not raised in the trial court are ordinarily deemed waived on
appeal).4/
II.
We review a trial court's grant or denial of summary
judgment de novo using the same standard applied by the trial
court. Nozawa v. Operating Eng'rs Local Union No. 3, 142 Hawai#i
331, 338, 418 P.3d 1187, 1194 (2018) (citing Adams v. CDM Media
USA, Inc., 135 Hawai#i 1, 12, 346 P.3d 70, 81 (2015)). "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 a judgment
as a matter of law." Id. at 342, 418 P.3d at 1198 (brackets
omitted) (quoting Adams, 135 Hawai#i at 12, 346 P.3d at 81). "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. (quoting
Adams, 135 Hawai#i at 12, 346 P.3d at 81).
The moving party has the burden to establish that
summary judgment is proper. Id. (citing French v. Haw. Pizza
Hut, Inc., 105 Hawai#i 462, 470, 99 P.3d 1046, 1054 (2004)).
"Once a summary judgment movant has satisfied its initial burden
of producing support for its claim that there is no genuine issue
of material fact, the party opposing summary judgment must
'demonstrate specific facts, as opposed to general allegations,
that present a genuine issue worthy of trial.'" Id. (brackets
omitted) (quoting Lales v. Wholesale Motors Co., 133 Hawai#i 332,
359, 328 P.3d 341, 368 (2014)). The evidence and the inferences
4/
We also note that Third-Party Defendants cite no authority that
would require Schmidt to seek leave from this court before filing a notice of
appeal in these circumstances.
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drawn from the evidence must be viewed in the light most
favorable to the non-moving party. Yoneda v. Tom, 110 Hawai#i
367, 384, 133 P.3d 796, 813 (2006) (citing Coon v. City & Cnty.
of Honolulu, 98 Hawai#i 233, 244-45, 47 P.3d 348, 359-60 (2002)).
Here, the Frueans sought summary judgment on the Third-
Party Complaint, by which Schmidt claimed to have an ownership
interest in various properties pursuant to an option agreement,
including properties in the Kaloko II subdivision in North Kona,
County of Hawai#i, subsequently acquired by the Perreiras and the
Frueans and referred to, respectively, as Lots 79 A and 79 B (the
Properties). The Frueans argued that they were entitled to
summary judgment on all claims asserted in the Third-Party
Complaint because: (1) the claims were barred by the doctrine of
"res judicata/claim preclusion"; (2) the Frueans had not entered
into any transactions with any of the Third-Party Plaintiffs and
had not done anything else that could give rise to a claim
against them; and (3) the claims were barred by the applicable
statute of limitations.
As to their claim preclusion defense, the Frueans
argued that the claims asserted in the Third-Party Complaint were
barred by a final judgment dismissing Schmidt's complaint in a
2004 lawsuit filed in the Circuit Court of the Third Circuit
(2004 Lawsuit) in which Schmidt had claimed, among other things,
that he had an ownership interest in various properties,
including Lot 79 B. Specifically, the Frueans argued that there
was a final judgment on the merits of the 2004 Lawsuit; the
parties to the Third-Party Complaint are the same or in privity
with the parties in the 2004 Lawsuit; and the claims asserted in
the Third-Party Complaint are identical to those decided in, or
to claims that could have been properly litigated in, the 2004
Lawsuit. In support of their argument, the Frueans submitted,
along with other evidence, copies of the deeds showing the chain
of title of Lot 79 B from 1999, when Schmidt and his wife
conveyed their interest in the property to Phoenix Investments,
Inc., to 2005, when the Frueans acquired title to the property.
Schmidt filed a memorandum in opposition to the Motion
for Summary Judgment, contending that: (1) res judicata did not
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apply to the claims in the Third-Party Complaint because the
Frueans were not parties to the 2004 Lawsuit and only later
acquired Lot 79 B; (2) Schmidt was not involved in any business
dealings or transactions with the Frueans or the Perreiras, but
they benefitted from a fraud committed by Third-Party Defendant-
Appellee Jerry A. Ruthruff (Ruthruff); and (3) if Schmidt's
claims were barred by the statute of limitations, the court
should grant him leave to file an amended complaint alleging
facts to support equitable tolling of the relevant limitations
period.5/ Although Schmidt submitted his own declaration in
support of his opposition, it appears that he did not submit any
admissible evidence supporting: (a) his contention that he had a
current ownership interest in Kaloko Lot 79B; (b) any claims
asserted against the Frueans; or (c) his request for leave to
allege facts supporting equitable tolling of the relevant
statutes of limitations.
Following a hearing, the Circuit Court granted the
Motion for Summary Judgment and the Substantive Joinder "for the
reasons set forth in the motions and replies." (Formatting
altered.)
On appeal, Schmidt contends that the Circuit Court
erred in granting the Motion for Summary Judgment, but makes no
argument that there were any genuine issues of material fact that
Schmidt raised below which precluded summary judgment on any of
the grounds presented in the motion. Schmidt simply asserts that
the Circuit Court "fail[ed] to consider" that: (1) Schmidt never
sold the Properties to anyone, including the Frueans, and "never
got any money for real properties that were never sold"; (2)
Plaintiffs-Counterclaim Defendants-Appellees LFG Holdings, LLC
and MAXAM Properties, LLC, "by and through . . . Ruthruff's
fraudulent sale to [the Frueans], never had clean, clear and good
title to the . . . [P]roperties . . ., which were and are owned
by . . . Schmidt"; and (3) the Properties are subject to state
tax liens of approximately half a million dollars. None of
5/
Schmidt made the same or similar contentions with respect to the
Perreiras' Substantive Joinder, but as noted above, Schmidt has not challenged
the MSJ Order to the extent it granted the Substantive Joinder.
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Schmidt's factual assertions is supported by any reference to the
record, and no argument is made as to how any of these factual
allegations relate to the issues raised in the Motion for Summary
Judgment. See HRAP Rule 28(b)(4) and (7). Nor does the record
show that the Circuit Court "failed to consider" any relevant and
admissible evidence that was actually submitted in connection
with the motion.
In short, Schmidt does not present any discernible
argument explaining how the Circuit Court erred in granting
summary judgment in the Frueans' favor. Schmidt's "failure to
comply with HRAP 28(b)(4) [and (7)] is alone sufficient to affirm
the [C]ircuit [C]ourt's judgment." Morgan, 104 Hawai#i at 180,
86 P.3d at 989; see Hawaii Ventures, LLC v. Otaka, Inc., 114
Hawai#i 438, 478, 164 P.3d 696, 736 (2007) (stating that "an
appellate court is not obliged to address matters for which the
appellant has failed to present discernible arguments" (citing
HRAP Rule 28(b)(7))).
In any event, based on our de novo review, we conclude
that the Circuit Court did not err in granting summary judgment
in favor of the Frueans as to the Third-Party Complaint. In
support of the Motion for Summary Judgment, the Frueans presented
evidence establishing that there was a final judgment on the
merits of the 2004 Lawsuit; the parties to the Third-Party
Complaint are the same or in privity with the parties in the 2004
Lawsuit; and the claims asserted in the Third-Party Complaint are
identical to those decided in, or to claims that could have been
properly litigated in, the 2004 lawsuit.6/ See E. Sav. Bank, FSB
v. Esteban, 129 Hawai#i 154, 159-60, 296 P.3d 1062, 1067-68
(2013); see also Greenwell v. Palani Ranch Co., No. CAAP-17-
0000704, 2021 WL 5541895, at * 6 (App. Nov. 26, 2021) (mem.)
6/
The Frueans presented a claim-by-claim comparison of the 2004
Lawsuit and the Third-Party Complaint and thereby demonstrated that each of
the ten claims asserted in the Third-Party Complaint was identical to a claim
asserted in the 2004 Lawsuit, or involved facts and circumstances alleged in
the 2004 lawsuit, such that the claim asserted in the Third-Party Complaint
could have been properly litigated in the 2004 Lawsuit. See E. Sav. Bank, 129
Hawai#i at 160-61, 296 P.3d at 1068-69. In addition, Schmidt conceded that
"the claims against the Frueans . . . would be derivative of the claims of
fraud made against Ruthruff, et al.," which fraud allegations were asserted in
the 2004 Lawsuit. (Formatting altered.)
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(recognizing that "a grantee is in privity with his grantor" for
purposes of claim preclusion (quoting Tibbetts v. Damon, 17 Haw.
203, 205 (Haw. Terr. 1905))). At minimum, the Furueans
established that the doctrine of claim preclusion barred the
claims asserted in the Third-Party Complaint. Thus, the Circuit
court did not err in concluding there was no genuine issue as to
any material fact and that the Frueans were entitled to judgment
as a matter of law as to the Third-Party Complaint.
Schmidt appears to make no discernible argument in
support of his contention that the Circuit Court erred in
granting that part of the Motion for Summary Judgment that sought
to expunge the Notice of Pendency of Action. See HRAP Rule
28(b)(7). In any event, on this record, we conclude that the
Circuit Court did not abuse its discretion in granting the motion
to expunge the Notice of Pendency of Action.
For the reasons discussed above, we affirm the
September 19, 2018 Judgment, entered in favor of Third-Party
Defendants-Appellees Siona Fruean, Carleen Leina#ala Fruean,
Melcolm K. Perreira, and Alicia A. Perreira by the Circuit Court
of the First Circuit.
DATED: Honolulu, Hawai#i, November 16, 2022.
On the briefs:
/s/ Katherine G. Leonard
Thomas F. Schmidt, Presiding Judge
Self represented Defendant/
Counterclaimant/Third-Party
Plaintiff-Appellant. /s/ Clyde J. Wadsworth
Associate Judge
Jerry A. Ruthruff,
for Third-Party Defendants-
Appellees Melcolm K. Perreira, /s/ Karen T. Nakasone
Alicia A. Perreira, Siona Associate Judge
Fruean, and Carleen Leina#ala
Fruean.
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