Ebbtide, LLC v. Hawaiian Ebbtide Hotel, Inc. ( 2024 )

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER
Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
09-JAN-2024
07:49 AM
Dkt. 108 SO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI#I
EBBTIDE, LLC, Plaintiff-Appellee, v.
HAWAIIAN EBBTIDE HOTEL, INC., Defendant-Appellant
APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
(CIVIL NO. 12-1-3090-12)
SUMMARY DISPOSITION ORDER
(By: Leonard, Presiding Judge, McCullen and Guidry, JJ.)
Defendant-Appellant Hawaiian Ebbtide Hotel, Inc.
(Hawaiian Hotel) appeals from the June 24, 2019 Judgment on Jury
Verdict (Judgment) and July 23, 2019 Amended Judgment on Jury
Verdict (Amended Judgment), both entered by the Circuit Court of
the First Circuit (Circuit Court)1 in favor of Plaintiff-Appellee
Ebbtide, LLC (Ebbtide) and against Hawaiian Hotel. Hawaiian
Hotel also challenges the Circuit Court's August 12, 2019 Order
Denying [Hawaiian Hotel's] [Hawai#i Rules of Civil Procedure
1
The Honorable Jeffrey P. Crabtree presided.
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(HRCP)] Rule 59 Motion for New Trial, (Order Denying Motion for
New Trial) entered by the Circuit Court.
Hawaiian Hotel raises four points of error, contending
that the Circuit Court abused its discretion when it entered the
Order Denying Motion for New Trial because: (1) a jury is not
permitted under Hawai#i law to award equitable relief; (2) the
jury was improperly instructed on the legal standard applicable
when awarding the equitable relief of lease termination; (3) the
jury's factual determinations were insufficient to support
equitable relief here; and (4) Hawaiian Hotel's attorney,
Christopher Woo (Woo), was unfit to act as trial counsel,
constituting an extraordinary circumstance warranting exceptional
relief under HRCP Rule 60(b)(6).2
Upon careful review of the record and the briefs
submitted by the parties, and having given due consideration to
the arguments advanced and the issues raised by the parties, we
resolve Hawaiian Hotel's points of error as follows:
(1) "In an action involving equitable claims, the jury
may render a verdict which the court may use as an advisory aid
in making findings of fact." Bd. of Directors of Ass'n of
2
HRCP Rule 60(b)(6)(2022) states, in pertinent part:
Rule 60. RELIEF FROM JUDGMENT OR ORDER.
. . . .
(b) Mistakes; inadvertence; excusable neglect; newly
discovered evidence; fraud, etc. On motion and upon such
terms as are just, the court may relieve a party or a
party's legal representative from a final judgment, order,
or proceeding for the following reasons: . . . (6) any other
reason justifying relief from the operation of the judgment.
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Apartment Owners of Regency Tower Condo. Project v. Regency Tower
Venture, 2 Haw. App. 506, 513, 635 P.2d 244, 249 (1981).
"Equity courts may decide both fact and law, [and] they may,
if they see fit, refer doubtful questions of fact to a jury
. . . but such a verdict is not binding upon the judgment of
the court, it is advisory simply, and the court may
disregard it entirely or adopt it either partially or in
toto."
Honolulu Sav. & Loan Co. v. Reed, 40 Haw. 269, 273 (1953)
(internal citations and brackets omitted). Here, the jury
concluded that Hawaiian Hotel seriously or substantially breached
its lease with Ebbtide, determined that money damages would not
reasonably and adequately remedy the situation, and the subject
lease should be terminated. However, the jury's determination
concerning the equitable remedy of lease termination was not
binding, and the Circuit Court could have chosen whether to
accept it in whole or in part, or reject it. See id. The
Circuit Court accepted the jury's verdict in its entirety.
Nevertheless, HRCP Rule 52 requires a court, in all
actions tried with an advisory jury, to find the facts
specifically, and state separately its conclusions of law
thereon. See HRCP Rule 52(a); see also Provident Funding
Associates, L.P. v. Vimahi, No. 29797, 2010 WL 4491364, *2 (Haw.
App. Nov. 10, 2010) (SDO) ("HRCP Rule 52(a) requires the court to
issue findings of fact upon all actions tried upon the facts
without a jury or with an advisory jury") (brackets and quotation
marks omitted). Thus, although the Circuit Court had the
discretion to accept the advisory jury's verdict, the Circuit
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Court erred when it did not issue a separate findings of fact
(FOFs) and conclusions of law (COLs). Therefore, this case must
be remanded to allow for the issuance of FOFs and COLs.
(2) Hawaiian Hotel challenges the jury instructions
appearing on pages 23,3 31,4 and 325 of the court's written jury
instructions. However, Hawaiian Hotel did not object to the
challenged jury instructions. "Jury instructions 'to which no
objection has been made at trial will be reviewed only for plain
error.'" State v. Aganon, 97 Hawai#i 299, 302, 36 P.3d 1269,
1272 (2001).
An appellate court should invoke the plain error
doctrine in civil cases sparingly, and only when justice so
requires. See Okada Trucking Co., Ltd. v. Bd. of Water Supply,
97 Hawai#i 450, 458, 40 P.3d 73, 81 (2002). In civil cases,
"we have taken three factors into account in deciding
whether our discretionary power to notice plain error ought
to be exercised: (1) whether consideration of the issue not
raised at trial requires additional facts; (2) whether its
resolution will affect the integrity of the trial court's
findings of fact; and (3) whether the issue is of great
public import."
3
The jury instruction on page 23 reads: "If a lessee substantially
or seriously breaches the terms of a lease, the lessor is entitled to
reasonable and adequate relief."
4
The jury instruction on page 31 reads: "If the lessee has engaged
in willful, intentional or grossly negligent conduct, the lease may be
terminated. If the lessee has not engaged in willful, intentional or grossly
negligent conduct, relief other than termination may be granted."
5
The jury instruction on page 32 reads: "To justify a termination
of a lease, the breach must have been serious or substantial."
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Id. (internal brackets and citation omitted). Upon review of
these factors, we consider whether the Circuit Court plainly
erred with respect to the challenged jury instructions.
Hawaiian Hotel argues that the instruction on page 23
improperly suggests that if there is any breach of the lease, the
plaintiff is entitled to any form of relief that the jury decides
is reasonable and adequate. However, the first clause of the
jury instruction "[i]f a lessee substantially or seriously
breaches the terms of a lease. . ." undermines Hawaiian Hotel's
argument, as reasonable and adequate relief would only be
available for a serious or substantial breach. Additionally,
Hawaiian Hotel does not offer support for an alternative jury
instruction. Thus, we conclude that this argument is without
merit.
Next, Hawaiian Hotel challenges the jury instruction on
page 31, which reads "[i]f the lessee has engaged in willful,
intentional or grossly negligent conduct, the lease may be
terminated. If the lessee has not engaged in willful,
intentional or grossly negligent conduct, relief other than
termination may be granted." Hawaiian Hotel argues that this is
an incorrect or materially incomplete statement of the law,
pointing to Food Pantry, Ltd. v. Waikiki Business Plaza, Inc.,
which states "where the lessee's breach has not been due to gross
negligence, or to persistent and wilful conduct on his part, and
the lessor can reasonably and adequately be compensated for his
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injury, courts in equity will generally grant relief." 58 Haw.
606, 614, 575 P.2d 869, 876 (1978). However, a proper
articulation of the law from Food Pantry appears on page 30 of
the final jury instructions:
"If a breach has occurred but has not been due to gross
negligence, or not been due to persistent and willful
conduct by the lessee, and the lessor can reasonably and
adequately be compensated for its injury, money damages
legally caused by the breach will generally be granted to
the lessor."
The jury instruction on page 31 simply appears to be a
different way of phrasing the rule from Food Pantry to facilitate
the jury's understanding. Second, the omitted clause on page 31
of the jury instruction is contingent on the lessee's breach not
being due to gross negligence or persistent and willful conduct.
Here, the jury found that the breach was due to gross negligence
and persistent and willful conduct. Lastly, the verdict form
asked whether the jury believes that money damages can reasonably
and adequately remedy the situation, to which the jury answered
no. Thus, based on the jury instructions as a whole, we conclude
that Hawaiian Hotel's challenge is without merit.
Hawaiian Hotel argues that the Circuit Court plainly
erred in instructing the jury that "[t]o justify a termination of
a lease, the breach must have been serious or substantial."
(Emphasis added). To justify a termination of a lease, "the
breach must have been 'material,' 'serious,' 'substantial,' or
the like[.]" Aickin v. Ocean View Investments Co., Inc., 84
Hawai#i 447, 461, 935 P.2d 992, 1006 (1997) (emphasis added). In
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other words, a finding of any one or more of these alternatives
can avoid the harsh result of a termination based on a merely
technical or minor breach. See id. Here, the jury found that a
termination of the lease was warranted based on the instruction
that termination must be based on a serious or substantial
breach, either of which would be sufficient to justify
termination. On the special verdict form, the jury indicated,
more than once, that Hawaiian Hotel's breach of lease was serious
or substantial. Accordingly, we conclude that the Circuit Court
did not plainly err in giving this instruction.
(3) Hawaiian Hotel argues that the jury's factual
determinations were insufficient to support the equitable remedy
of termination of lease because there was no finding that
Hawaiian Hotel's breach was "material, serious, substantial, or
the like." As discussed above, we conclude that a finding that
the breach was serious or substantial was sufficient to justify a
termination of lease. Accordingly, we conclude that this
argument is without merit.
(4) Hawaiian Hotel argues that the Judgment and
Amended Judgment should be set aside because Mr. Woo's unfitness
to act as trial counsel amounts to an exceptional circumstance
under Rule 60(b)(6) to warrant relief, citing U.S. Bank Nat.
Ass'n v. Salvacion, which states "HRCP Rule 60(b)(6) provides for
extraordinary relief and is only invoked upon a showing of
exceptional circumstances." No. 30594, 2011 WL 1574585, *6 (Haw.
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App. Apr. 26, 2011) (mem. op.). This court has recognized the
possibility relief could be granted under the rule based on
extreme conduct of civil trial counsel. See City and County of
Honolulu v. Bennett, 2 Haw. App. 180, 183, 627 P.2d 1136, 1139
(1981).
"If we were to hold that in civil cases the failure to
introduce an exhibit or exhibits by a party's counsel
was the ground for setting aside a judgment, we would
be opening the gates to a veritable flood of appeals
by disappointed litigants of whom there is at least
one in every case. It might be that a case could
arise of such extreme aggravation with respect to the
conduct of counsel that a trial court, in its
discretion, would set aside a judgment in a civil case
under Rule 60(b)(6)."
Id.Hawaiian Hotel offered several alleged instances
during trial that they believed warranted extraordinary relief.
The first is that Woo allegedly failed to inform the Circuit
Court or Hawaiian Hotel that Woo's license to practice law was
suspended between March 1, 2019, and April 23, 2019. However,
Woo's suspension began after the trial had been completed and
Hawaiian Hotel has not established that this suspected suspension
warranted extraordinary relief.6
The Circuit Court carefully considered and addressed
each of the other issues raised by Hawaiian Hotel and concluded
that under the totality of the circumstances before the court,
the extraordinary relief requested by Hawaiian Hotel was not
6
The trial took place between February 11-21, 2019. Additionally,
we note that Woo's license was suspended for non-payment or late payment of
bar dues, not the type of conduct that would necessarily indicate an inability
to competently represent a client prior to the suspension.
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warranted. Upon review, we cannot conclude that the Circuit
Court abused its discretion in denying Hawaiian Hotel's request
for relief pursuant to HRCP Rule 60(b)(6).
For these reasons, the Circuit Court's June 24, 2019
Judgment and July 23, 2019 Amended Judgment are vacated only on
the grounds that the Circuit Court failed to enter FOFs and COLS.
This case is remanded to the Circuit Court for further
proceedings consistent with this Summary Disposition Order.
DATED: Honolulu, Hawai#i, January 9, 2024.
On the briefs: /s/ Katherine G. Leonard
Presiding Judge
Richard T. Forrester,
Matthew P. Holm, /s/ Sonja M.P. McCullen
(Forrester Legal, LLLC), Associate Judge
for Defendant-Appellant.
/s/ Kimberly T. Guidry
Jerrold K. Guben, Associate Judge
Randolph R. Slaton,
Kristi L. Arakaki,
(O'Connor Playdon Guben &
Inouye LLP),
for Plaintiff-Appellee.
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