Association of Apartment Owners of Pacific Monarch, Inc. v. Furuya ( 2023 )

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER
Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
23-MAY-2023
07:58 AM
Dkt. 192 MO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI#I
ASSOCIATION OF APARTMENT OWNERS OF
PACIFIC MONARCH, INC., a Hawai#i non-profit corporation,
Plaintiff-Appellee,
v.
CLARENCE O. FURUYA and LONA LUM FURUYA,
Defendants-Appellants,
and
JOHN DOES 1-10; JANE DOES 1-10; DOE ENTITIES 1-10;
and DOE GOVERNMENTAL ENTITIES 1-10, Defendants.
APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
(CIVIL NO. 13-1-2344)
MEMORANDUM OPINION
(By: Ginoza, Chief Judge, Wadsworth and McCullen, JJ.)
Defendants-Appellants Clarence O. Furuya (Clarence) and
Lona Lum Furuya (collectively, the Furuyas) appeal from the
"Judgment," filed on October 6, 2017, by the Circuit Court of the
First Circuit (Circuit Court).1 The Furuyas challenge the
following: (1) an "Order Denying Defendants Clarence O. Furuya
and Lona Lum Furuya's Motion for Summary Judgment," filed April
20, 2017 (Order Denying Summary Judgment to Furuyas); (2) an
"Order Granting Plaintiff Association of Apartment Owners of
Pacific Monarch, Inc.'s Motion for Summary Judgment Against
Defendants Clarence O. Furuya and Lona Lum Furuya on Plaintiff's
First Amended Complaint," filed May 24, 2017 (Order Granting
1
The Honorable Gary W.B. Chang presided.
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Summary Judgment to AOAO);2 and (3) an "Order Granting in Part
and Denying in Part 'Plaintiff Association of Apartment Owners of
Pacific Monarch, Inc.'s Motion for Award of Attorney's Fees and
Costs Against Defendants Clarence O. Furuya and Lona Lum
Furuya'," filed December 27, 2017 (Award of Fees and Costs).
On appeal, the Furuyas contend the Circuit Court erred
by granting summary judgment to Plaintiff-Appellee Association of
Apartment Owners of Pacific Monarch, Inc. (AOAO) based on
preclusion grounds, thereby voiding the Furuyas' transfer of 106
parking stalls that are appurtenant to a unit in which the
Furuyas have a leasehold interest, to a unit in which they own
the fee interest. The Furuyas also contend the Circuit Court
improperly granted attorneys' fees and costs to the AOAO.
I. Background
The present suit is part of a lengthy battle between
the Furuyas and the AOAO over the parties' respective rights to
Apartment Unit 3206 (Unit 3206) and 106 parking stalls
appurtenant to Unit 3206 at the Pacific Monarch, a condominium
project in Waikīkī.3
In a prior lawsuit, the Furuyas filed suit against the
AOAO, claiming they had a right to purchase the AOAO's leased fee
interest in Unit 3206 and the 106 parking stalls, pursuant to a
contract. Clarence Furuya, et al, v. Ass'n of Apartment Owners
of Pacific Monarch, Inc., et al., Civil No. 06-1-1057-06 (Furuya
I).4 The circuit court ruled against the Furuyas in a jury-
2
An amended order and amended judgment were issued by the Circuit
Court to correct an inadvertent error in the initial order and judgment.
Therefore, the Furuyas also appeal the "First Amended Order Granting Plaintiff
Association of Apartment Owners of Pacific Monarch, Inc.'s Motion for Summary
Judgment Against Defendants Clarence O. Furuya and Lona Lum Furuya on
Plaintiff's First Amended Complaint," filed on July 24, 2018, and the "Amended
Final Judgment," filed on July 25, 2018.
3
Pursuant to the Declaration of Horizontal Property Regime
(Declaration) and Restated Declaration of the Association of Apartment Owners
of Pacific Monarch (Restated Declaration), parking elements, including parking
stalls, are appurtenant to a unit. Thus, the 106 parking stalls are
appurtenant to Unit 3206.
4
The Honorable Rom A. Trader presided.
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waived trial, finding that although the Furuyas own the fee to
Apartment Unit 3207 (Unit 3207) at the Pacific Monarch, they only
acquired a leasehold interest in Unit 3206 and the appurtenant
106 parking stalls because they failed to "purchase the fee
interest for 3206 and the 106 parking stalls attached to it."
Moreover, the circuit court found the AOAO was "the rightful
owner of the leased fee interests that were not purchased by the
FURUYAS[,]" i.e., Unit 3206 and the 106 parking stalls.
The Furuyas appealed in Furuya I, and while that appeal
was pending in this court, the Furuyas sought to transfer the 106
parking stalls to Unit 3207 through an "Amendment of Restated
Declaration of the Association of Apartment Owners of Pacific
Monarch and Condominium Conveyance Documents To Reflect Transfer
of Parking Stalls and Parking Elements from Apartment No. 3206 to
Apartment No. 3207" (Transfer Amendment).5 The Transfer
Amendment did not specify whether the Furuyas were purporting to
transfer a leasehold or fee simple interest in the stalls to Unit
3207.6
5
The Transfer Amendment provides, in relevant part:
WHEREAS, CLARENCE O. FURUYA and LONA LUM FURUYA
(hereinafter collectively referred to as the "Furuyas"), are
the owners of those certain Apartments Nos. 3206 and 3207
(together with the undivided interests in the common
elements) in the Pacific Monarch condominium project . . . .
. . . .
NOW, THEREFORE, the Furuyas, as grantor and as
grantee, hereby join in agreement that the Declaration and
the CCDs are hereby amended as follows:
1. The Parking Stalls be and are hereby transferred
and conveyed from Apartment No. 3206 together with the
Remaining Portions of the Parking Element thereto
appurtenant to Apartment No. 3207.
2. Pursuant to Section lA of the CCD for Apartment No.
3206, the Furuyas, in their capacity as the owners of
Apartment No. 3207 hereby assume the pro rata additional
rental obligation for the Parking Stalls.
6
Pursuant to the terms of the Transfer Amendment, it became effective
upon recordation in the Bureau of Conveyances of the State of Hawai#i on
September 22, 2011.
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On August 27, 2013, the AOAO initiated this lawsuit,
filing a Complaint (2013 Complaint) against the Furuyas in the
Circuit Court. On February 7, 2014, the AOAO filed a First
Amended Complaint. The 2013 Complaint and First Amended
Complaint both asserted claims for declaratory and injunctive
relief and sought, among other things, a determination that the
Transfer Amendment did not convert the Furuyas' leasehold
interest in the parking stalls to a fee simple interest and that
the Transfer Amendment be amended to reflect the Furuyas' actual
interest in the stalls. Alternatively, the First Amended
Complaint requested that the Transfer Amendment be deemed null
and void.
In their answer to the First Amended Complaint, the
Furuyas denied that the AOAO was the fee simple owner of Unit
3206 and that the Condominium Conveyance Document (CCD) for Unit
3206 conveyed only a leasehold interest in the unit and parking
stalls to the Furuyas. The Furuyas further denied they could
only convey a leasehold interest in the parking stalls via the
Transfer Amendment.
The Furuyas alleged that the interest in Unit 3206 and
the appurtenant parking stalls "conveyed by the Building
Conveyance [section of the CCD] including the parking and parking
easements was in fee and the interest conveyed by the Ground
Conveyance was leasehold" and "den[ied] that the Parking Elements
[would] revert to the Association" upon expiration of the
leasehold in 2054.
Two months after the AOAO filed the First Amended
Complaint in this case, this court decided Furuya I by affirming
in part the circuit court's decision and holding that the AOAO
had no obligation to sell the leased fee interest in Unit 3206
and the parking stalls.7 Furuya v. Ass'n of Apartment Owners of
Pac. Monarch, Inc., No. 30485, 2014 WL 1658331, at *16 (Haw. Ct.
App. Apr. 25, 2014) (mem.). On further appeal to the Hawai#i
7
This court vacated a portion of the circuit court's Findings of Fact,
Conclusions of Law and Order only as it pertained to the Furuyas' claim for
unjust enrichment from the use of certain parking stalls. Furuya I, 2014 WL
1658331, at *16 (mem. op.).
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Supreme Court in Furuya I, the Furuyas maintained they had an
enforceable contract with the AOAO to purchase the leased fee
interest in Unit 3206 and the 106 parking stalls. Furuya v.
Ass'n of Apartment Owners of Pac. Monarch, Inc., 137 Hawai#i 371,
374, 383, 375 P.3d 150, 153, 162 (2016). The supreme court
affirmed the ICA's decision, concluding the record supported the
circuit court's findings that the Furuyas were not ready, willing
and able to perform on the contract to purchase the AOAO's leased
fee interest in Unit 3206 and the stalls. Furuya I, 137 Hawai#i
at 384-86, 375 P.3d at 163-65.
On November 23, 2016, following the Hawai#i Supreme
Court's decision in Furuya I, the Furuyas and the AOAO each filed
motions for summary judgment in the present case. The Circuit
Court granted summary judgment for the AOAO and denied summary
judgment for the Furuyas. In the Order Granting Summary Judgment
to the AOAO, the Circuit Court ordered that the Transfer
Amendment be "abrogated, set aside, invalidated, and rendered
void and of no legal force and effect, ab initio." The Circuit
Court further concluded that "the Transfer Amendment was never
authorized" and never "had the force or effect of transferring
the ownership of any or all 106 parking stalls or parking
elements, to which the Transfer Amendment referred, from
Apartment No. 3206 to Apartment No. 3207 . . . ."
II. Discussion
A. The Furuyas Are Precluded from Relitigating
Their Interest in Unit 3206 and the 106 Parking Stalls
On appeal, the Furuyas allege the Circuit Court erred
in basing the Order Granting Summary Judgment to the AOAO on res
judicata grounds and for "other good cause[.]" The Furuyas argue
the Circuit Court abused its discretion by granting summary
judgment on res judicata grounds sua sponte because the Furuyas
did not have an opportunity to brief the issue. The AOAO
contends the Furuyas misstate the Circuit Court's ruling because
the court "did not sua sponte limit its decision to the doctrine
of res judicata or claim preclusion."
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The Furuyas also argue the Circuit Court erred in
granting summary judgment to the AOAO on collateral estoppel
(issue preclusion) grounds, contending the AOAO failed to
establish all the elements of collateral estoppel.
1. The Circuit Court did not err in ruling based on
collateral estoppel (issue preclusion)
The Circuit Court stated during the hearing on both
motions for summary judgment:
Okay. This case is a little odd, because the
plaintiffs are urging upon the Court some theories, like
estoppel, that are not classically applicable here, because
we have in this case not one single proceeding, but we have
multiple proceedings. We have a 2006 case, and the instant
2013 case. So there are some difficulties applying the
classic judicial estoppel principles.
Then you have res judicata. And I suppose -- and
collateral estoppel. And I suppose it is the offensive use
of collateral estoppel as a sword against the Furuyas in
this case, because the Association is the plaintiff in this
case, trying to use the prior adjudication.
And I am not foreclosing the possibility that
judicial estoppel may very well apply. But I did want to
note the reservation that we have multiple proceedings here.
And I'm not seeing authority that applies judicial estoppel
to multiple or successive proceedings. So it may or may not
apply. But I'm looking at collateral estoppel, and res
judicata more particularly.
When we look at the identity of issues, I think
that you have to bear in mind the rationale behind the res
judicata or collateral estoppel doctrines. And the purpose
of the -- those doctrines are to preclude multiplicity of
litigation, et cetera. And we have two cases that are very
closely related.
(Emphasis added.) In making its ruling, the Circuit Court then
stated:
So I do believe that the question of the ownership of
the parking stalls was essential to the final judgment. It
definitely was essential to the final judgment at trial. And
even on appeal, there were enough references to at least the
bylaws, the restated bylaws, to satisfy the element of
identity of issues. And, of course, all of the other
requirements of res judicata are met as well.
So I am not confining the Court's ruling only to
res judicata, but any other good cause, including perhaps
the doctrine of judicial estoppel. I'm not foreclosing that
as a basis to uphold this decision.
(Emphases added.) The Circuit Court did not base its decision to
grant summary judgment to the AOAO on res judicata grounds alone,
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but on other grounds as well, including judicial estoppel and
collateral estoppel (issue preclusion), both of which the AOAO
argued below and which the Furuyas had the opportunity to brief.
2. The AOAO established the elements of collateral
estoppel
"Res judicata, or claim preclusion, and collateral
estoppel, or issue preclusion, are [separate] doctrines that
limit a litigant to one opportunity to litigate aspects of the
case to prevent inconsistent results and multiplicity of suits
and to promote finality and judicial economy." Bremer v. Weeks,
104 Hawai#i 43, 53, 85 P.3d 150, 160 (2004) (citing Dorrance v.
Lee, 90 Hawai#i 143, 148-49, 976 P.2d 904, 909-10 (1999)).
"Issue preclusion . . . applies to a subsequent suit between the
parties or their privies on a different cause of action and
prevents the parties or their privies from relitigating any issue
that was actually litigated and finally decided in the earlier
action." Dorrance, 90 Hawai#i at 148, 976 P.2d at 909 (citation
omitted). The elements of issue preclusion are:
(1) the issue decided in the prior adjudication is identical
to the one presented in the action in question; (2) there is
a final judgment on the merits; (3) the issue decided in the
prior adjudication was essential to the final judgment; and
(4) the party against whom [issue preclusion] is asserted
was a party or in privity with a party to the prior
adjudication.
Bremer, 104 Hawai#i at 54, 85 P.3d at 161.
The central focus of whether issue preclusion is
satisfied here is whether the issue in the prior suit and the
case at bar are identical and whether the issue in the prior suit
was essential to the final judgment.8 The Furuyas argue that the
8
The second element of the issue preclusion test, i.e., a final
judgment on the merits, is satisfied. The Furuyas fully litigated Furuya I
through a bench trial in the circuit court and then in appeals to this court
and the supreme court. See Dorrance v. Lee, 90 Hawai#i at 150, 976 P.2d at
911 (final judgment from previous proceeding was "on the merits" where
appellant had opportunity to fully defend claims).
The fourth element, i.e., the party against whom issue preclusion
is asserted was a party or in privity with a party to the prior adjudication,
is also satisfied. The Furuyas are the parties against whom issue preclusion
is asserted and were the plaintiffs-appellants in Furuya I.
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Circuit Court did not actually decide an identical and
dispositive issue because the Circuit Court's decision here
pertained to the Furuyas' ability to transfer the 106 parking
stalls, which the lower court did not address in Furuya I.
According to the Furuyas, although the Circuit Court "noted the
Furuyas' argument that 'the Association does not have a
leased-fee interest in parking,'" the court "[did] not clearly
identify any issue decided relating to that claim" and further
"failed to connect a precise issue in the fee sale dispute with
any matter dispositive of the Furuyas' rights in the transfer
suit."
The Hawai#i Supreme Court has determined that an issue
is identical for the purposes of issue preclusion where an issue
had to be decided in a previous action and the court would need
to decide that same previously addressed issue in the present
case. Santos v. State, Dep't of Transp., Kauai Div., 64 Haw.
648, 646 P.2d 962 (1982) (per curiam). In Santos, the appellant
failed to follow the required grievance process in a collective
bargaining agreement when claiming he was improperly denied a
promotion over a junior employee. Id. at 649, 646 P.2d at 963-
64. Appellant appealed to the Hawaii Public Employment Relations
Board (HPERB) after his first appeal was declined by the civil
service commission for failure to follow the proper grievance
procedure and the time to file a proper grievance had expired.
Id. After a hearing on the merits, HPERB determined that denying
the appellant the promotion violated the collective bargaining
agreement and ordered the state to redo the selection. Id. at
649-50, 646 P.2d at 964. On appeal, however, the circuit court
reversed HPERB's decision in favor of the state on grounds that
HPERB should have deferred to the grievance process of the
collective bargaining agreement. Id. at 650, 646 P.2d at 964.
The appellant did not further appeal the case. Id. at 650-51,
646 P.2d at 964.
The appellant then initiated a new action, claiming
the state breached the collective bargaining agreement by failing
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to remove the junior employee from the position for allegedly
falsifying his application, intentionally causing the appellant
emotional distress, and denying the appellant due process. Id.
at 653, 646 P.2d at 966. The defendants filed motions for
summary judgment on grounds of, among other things, issue
preclusion, which the lower court granted. Id. at 651, 646 P.2d
at 965. The Hawai#i Supreme Court determined issue preclusion
applied where the issue at bar was whether the appellant was
required to exhaust contractual remedies in bringing the new
suit, which was "the very issue that HPERB had to decide before
making any ruling against the State on the prohibited practice
breach of contract charge, and which the First Circuit had to
examine before reversing HPERB." Id. at 655-56, 646 P.2d at 967.
Here, a key issue in this case is the same as a
previously litigated issue in Furuya I, specifically the Furuyas'
rights to the 106 parking stalls. In Furuya I, the circuit court
determined, in relevant part:
2. . . . . [O]n Plaintiffs' Count V for declaratory
relief . . . the Court hereby declares that: (I) the
Association is the legal and beneficial owner of the leased
fee interests to the Apartment Unit 3206 and the 106 Parking
Stalls; and (ii) the Association is not legally or morally
obligated to sell the leased fee interests to the Apartment
Unit 3206 and the 106 Parking Stalls to Plaintiffs[.]
. . . .
5. . . . . [T]he Association is the legal and
beneficial owner of the leased fee interests to the
Apartment Unit 3206 and the 106 Parking Stalls and that the
Association is not obligated to sell the leased fee
interests to the Apartment Unit 3206 and the 106 Parking
Stalls to Plaintiffs that the counterclaim for Breach of
Contract/Promissory Estoppel (Counterclaim IV)
is moot[.]
(Emphases added.)
In affirming the ICA's review of Furuya I, the Hawai#i
Supreme Court quoted Plaintiff's Proof of a Prima Facie Case
§ 7:2.50 for the following proposition: "[i]f real estate is
encumbered by a lease, the ownership interest in that property is
considered a leased fee interest rather than a fee simple
interest because 'the possessory interest has been granted to
another party by creation of a contractual landlord-tenant
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relationship (i.e., a lease).'" Furuya I, 137 Hawai#i at 373
n.2, 375 P.3d at 152 n.2.
In explaining the issue in the appeal, the supreme
court stated:
The heart of the dispute in this case is whether there was
an enforceable contract for the purchase of the leased fee
interest in unit 3206 and the parking stalls, and whether
following the signing of the DROA, the Furuyas elected not
to purchase the leased fee interest in the parking stalls.
Id. at 374, 375 P.3d at 153.
The supreme court also explained:
In sum, because—based on the circuit court's findings—the
Furuyas failed to demonstrate they were ready, willing, and
able to perform on the contract throughout the contract
term, their claim for specific performance fails. . . . The
fact that the Furuyas came forward in 2004, approximately
seven years after the initial closing date of the DROA, and
stated that they were ready to close on the DROA and that
they had always wanted to purchase the leased fee interest
in unit 3206 along with the appurtenant stalls was
considered and rejected by the circuit court. Substantial
evidence in the record supports the circuit court's
conclusion that prior to the closing of the DROA, the
Furuyas changed their minds and were not prepared to pay the
$459,131.19 for the parking stalls. Accordingly, the Furuyas
have failed to demonstrate error in the circuit court's
decision.
Id. at 386, 375 P.3d at 165. In Furuya I, the supreme court
rejected the Furuyas' claim that the AOAO had breached a contract
to sell the leased fee interest in Unit 3206 and the appurtenant
106 parking stalls to the Furuyas, and also rejected the Furuyas'
claim that they were entitled to specific performance. The
supreme court's decision in Furuya I thus clearly established
that the Furuyas did not have any rights to the leased fee
interest in Unit 3206 and the appurtenant 106 parking stalls.
In the instant case, before reaching the issue of
whether the Furuyas could transfer the leased fee interest in the
106 parking stalls from Unit 3206 to Unit 3207, it is necessary
to address the Furuyas' rights to the parking stalls.9 The
9
Although the Transfer Amendment does not explicitly state the
interest in the 106 parking stalls being transferred to Unit 3207, the
Furuyas' answer to the AOAO's First Amended Complaint expresses the Furuyas'
position that they transferred a leased fee interest in the stalls.
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Furuyas claim the transfer is proper because "the apartments and
the appurtenant parking were conveyed in fee simple [to them] and
the only interest leased was the land . . . ."
Section 6 of article IV in the CCD provides, in
relevant part:
6. Assignment and Subletting. The Apartment Owner may
assign, mortgage or sublet the interests conveyed hereunder,
without approval or consent of Developer; and the assignee
or sublessee shall have the same rights and obligations
hereunder as the original Apartment Owner; PROVIDED,
HOWEVER, that any assignment or sublease shall provide that
the assignee or sublessee undertakes to perform all the
obligations of Apartment Owner hereunder.
(Emphases added) (format altered). Although the Declaration10
and Restated Declaration11 permit the transfer of the 106 parking
stalls to another unit, the CCD explicitly states that the
Furuyas' assignee(s) can only possess the same rights as the
10
The Declaration provides, in relevant part:
(2) Parking Elements. The following limited common elements
("parking elements") are shown in green on the Condominium Map:
a. parking stalls on the 1st, 2nd, 3rd, 4th and 5th floors
of the building numbered 1 through 106 on the Condominium
Map, which are appurtenant to and for the exclusive use of
Apartment 3206. The Apartment Owner of any apartment to
which any parking stall is appurtenant shall have the right
from time to time with the consent of his mortgagee, if any,
to transfer such parking stall to another Apartment in the
Project by joining, with the Apartment Owner of such other
Apartment, in an amendment of this Declaration and their
respective condominium conveyance documents. Such amendment
shall be effective only upon recording the same of record in
the Bureau of Conveyances. Developer hereby gives its
irrevocable consent to all such parking stall transfers.
11
The Restated Declaration provides, in relevant part:
(B) Parking Elements. The following 1imited common elements
("parking elements") are shown in green on the Condominium Map:
a. parking sta1ls on the 1st, 2nd, 3rd, 4th and 5th floors of the
building numbered 1 through 106 on the Condominium Map, which are
appurtenant to and for the exclusive use of Apartment 3206. The
Apartment Owner of any apartment to which any parking stall is
appurtenant shall have the right from time to time with the
consent of his mortgagee, if any, to transfer such parking stall
to another Apartment in the Project by joining, with the Apartment
Owner of such other Apartment, in an amendment of this Declaration
and their respective condominium conveyance documents. Such
amendment shall be effective only upon recording the same of the
record in the Bureau of Conveyances. Developer hereby gives its
irrevocable consent to al1 such parking stall transfers.
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Furuyas. Given the Hawai#i Supreme Court's decision in Furuya I,
the Furuyas do not possess the leased fee interest in the 106
parking stalls. Thus, to the extent the Furuyas purport to
convey a leased fee interest in the parking stalls to Unit 3207,
they have no right to do so because they only possess a leasehold
interest in those parking stalls.
The issue of the Furuyas' rights to the leased fee
interest in the 106 parking stalls was decided in Furuya I. It
is the identical issue that was required to be decided in this
case to ultimately determine the Furuyas' rights to transfer the
parking stalls. Thus, the issue decided in the prior
adjudication is identical to the one presented in this case, and
the first element for issue preclusion is met.
Further, the issue of the Furuyas' rights to the leased
fee interest in the 106 parking stalls was essential to the prior
suit. Notwithstanding the Furuyas' arguments to the contrary,
the central issue in Furuya I was whether the Furuyas had a right
to specific performance, i.e., to purchase the leased fee
interest in Unit 3206 and the appurtenant 106 parking stalls.
Deciding this issue was essential to the final judgment in that
case, and thus the third element of issue preclusion is met.
Inasmuch as the four elements of the issue preclusion
test have been satisfied, we hold the Furuyas were precluded from
re-litigating whether they had rights to the leased fee interest
to the 106 parking stalls. See Dorrance, 90 Hawai#i at 150, 976
P.2d at 911. Thus, the Circuit Court properly granted summary
judgment for the AOAO.12 Moreover, the Circuit Court did not err
in rejecting the Furuyas' claim that the governing documents
permitted transfer of the parking stalls, because the CCD only
allows the transfer of the same rights the assignor possesses and
the Furuyas do not hold a leased fee interest in the parking
stalls.
12
Because we affirm the Circuit Court's ruling based on the
application of collateral estoppel (issue preclusion), we do not address the
Furuyas' claims that the Circuit Court erred in ruling against them on grounds
of judicial estoppel and Hawaii Revised Statutes (HRS) § 514A-14.
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B. The Circuit Court Properly Awarded the AOAO Attorneys' Fees
We review the Circuit Court's award of attorneys' fees
and costs for abuse of discretion. Booker v. Midpac Lumber Co.,
Ltd., 65 Haw. 166, 171, 649 P.2d 376, 379-80 (1982).
In a brief one-paragraph argument that fails to cite
any legal authority, the Furuyas summarily assert the Circuit
Court erred in awarding the AOAO attorneys' fees because the
Circuit Court's Judgment was in error and the award was excessive
and inadequately described. They cite only their memorandum in
opposition to the AOAO's motion for attorney's fees (Memorandum
in Opposition to Motion for Attorney's Fees) filed in the Circuit
Court, without further elaboration. The Furuyas essentially fail
to support this point of error with any substantive argument.
See Hawai#i Rules of Appellate Procedure Rule 28(b)(7) ("Points
not argued may be deemed waived").
Even if we consider the Furuyas' Memorandum in
Opposition to Motion for Attorney's Fees filed in the Circuit
Court, they argued that because the AOAO's Complaint and First
Amended Complaint failed to seek enforcement of a provision in
the Declaration, the AOAO is not entitled to attorney's fees and
costs pursuant to HRS § 514B-157(a)(3) (2006).
HRS § 514B-157(a)(3) provides:
(a) All costs and expenses, including reasonable attorneys'
fees, incurred by or on behalf of the association for:
. . . .
(3) Enforcing any provision of the declaration,
bylaws, house rules, and this chapter, or the rules of
the real estate commission;
against an owner, occupant, tenant, employee of an owner, or
any other person who may in any manner use the property,
shall be promptly paid on demand to the association by such
person or persons; provided that if the claims upon which
the association takes any action are not substantiated, all
costs and expenses, including reasonable attorneys' fees,
incurred by any such person or persons as a result of the
action of the association, shall be promptly paid on demand
to such person or persons by the association.
(Emphasis added.) Pertaining to the application of the CCD, the
Declaration and Restated Declaration both provide:
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13. Administration of Project. The
administration of the Project shall be governed by this
Declaration, the Bylaws, and the Condominium Conveyance Document
conveying to each owner his interest in his apartment. Each . . .
owner shall comply strictly with the Declaration, Bylaws and
Condominium Conveyance Document.
Based on the 2013 Complaint, in which the AOAO sought
declaratory relief regarding the Furuyas' purported conveyance of
the 106 parking stalls, it was reasonable for the Circuit Court
to award attorneys' fees and costs. The 2013 Complaint alleges
the following in Count I for declaratory relief:
19. Pursuant to the Project's governing documents, the
Parking Elements are limited common elements of the
Project.[13]
20. The Condominium Conveyance Document for Apartment No.
3206 included the Parking Elements as easements appurtenant
to that apartment.
21. The Defendants possess the right to use the limited common
element Parking Elements pursuant to their leasehold ownership
of Apartment No. 3206.
22. Thus, the Defendants' property ownership interest in the
Parking Elements was leasehold.
23. Therefore, the Defendants could not, and cannot in the
future, convey anything more than a leasehold interest in
the Parking Elements via their Transfer Amendment.
24. Defendants disagree with the Association's position
regarding such conveyance of the Parking Elements.
25. The Association is therefore entitled to a ruling by the
Court that the transfer of the Parking Stalls and Remaining
Portions from Apartment No. 3206 to Apartment No. 3207 via
the Transfer Amendment did not convert the Defendants'
property interest in the limited common element Parking
Elements from leasehold to "fee simple."
26. The Association is further entitled to a ruling by the
Court that the Transfer Amendment must be amended to contain
restrictive covenants that: (a) Apartment No. 3207 holds a
leasehold interest in the Parking Stalls and Remaining
Portions of Apartment No. 3206; (b) any future transfer(s)
of the Parking Elements will not affect the leasehold nature
of such property interests; (c) all future transfers must
include a provision expressly stating that the leasehold
interest in the Parking Elements reverts back to the
Association as the leased fee owner upon the expiration of
the term at midnight on April 27, 2054; and (d) such
covenants will be binding on all successors and assigns to
such property interests.
13
The Declaration and Restated Declaration provide that the Parking
Elements, including the subject 106 parking stalls appurtenant to Unit 3206,
are limited common elements.
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(Emphases added.) Considering that the Declaration and Restated
Declaration both provide that the Pacific Monarch is partly
governed by the CCD and that the CCD should be strictly complied
with, it is a fair assessment that the AOAO sought enforcement of
provisions of the declarations in the 2013 Complaint when it
challenged the Furuyas' attempt to convey more than a leasehold
interest in the 106 parking stalls without the necessary
restrictive covenants as required by the CCD. See Article IV,
Section 6 of CCD.
To the extent the Furuyas claimed in the Circuit Court
that the AOAO should not have been awarded attorneys' fees and
costs based on the First Amended Complaint, this argument is
without merit considering the First Amended Complaint is
virtually identical to the 2013 Complaint except that it includes
an alternative request for relief:
As alternative relief, the Association is entitled to a
ruling that the Transfer Amendment is null and void, and the
Court should issue an order or writ directing the Bureau of
Conveyances, State of Hawai#i, to take any and all necessary
action to expunge the Transfer Amendment from it [sic]
records.
This alternative request for relief also seeks enforcement of the
declarations. It requests that the Circuit Court void the
Transfer Amendment, rather than amend it as in the 2013
Complaint, because the Transfer Amendment fails to comply with
the CCD, which in turn does not adhere to the express provision
in the declarations.
We conclude the Circuit Court did not err in awarding
attorneys' fees to the AOAO.
III. Conclusion
Based on the above, the following entered by the
Circuit Court of the First Circuit are affirmed:
(1) "Judgment," filed October 6, 2017;
(2) "Order Denying Defendants Clarence O. Furuya and
Lona Lum Furuya's Motion for Summary Judgment," filed April 20,
2017;
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(3) "Order Granting Plaintiff Association of Apartment
Owners of Pacific Monarch, Inc.'s Motion for Summary Judgment
Against Defendants Clarence O. Furuya and Lona Lum Furuya on
Plaintiff's First Amended Complaint," filed May 24, 2017; and
(4) "Order Granting in Part and Denying in Part
'Plaintiff Association of Apartment Owners of Pacific Monarch,
Inc.'s Motion for Award of Attorney's Fees and Costs Against
Defendants Clarence O. Furuya and Lona Lum Furuya'," filed
December 27, 2017.
DATED: Honolulu, Hawai#i, May 23, 2023.
On the briefs: /s/ Lisa M. Ginoza
Chief Judge
George W. Van Buren,
John B. Shimizu, /s/ Clyde J. Wadsworth
(Van Buren & Shimizu LLP) Associate Judge
for Defendants-Appellants
/s/ Sonja M.P. McCullen
Matt A. Tsukazaki, Associate Judge
(Li & Tsukazaki) and
Lance S. Fujisaki (Anderson
Lahne & Fujisaki LLP)
for Plaintiffs-Appellees
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