Trustees of the Estate of Bernice Pauahi Bishop v. Au.

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Electronically Filed
Supreme Court
SCWC-XX-XXXXXXX
10-MAR-2020
11:33 AM
IN THE SUPREME COURT OF THE STATE OF HAWAII
---o0o---
TRUSTEES OF THE ESTATE OF BERNICE PAUAHI BISHOP, also known as
KAMEHAMEHA SCHOOLS, Respondents/Plaintiffs-Counterclaim
Defendants-Appellees,
vs.
RONALD G.S. AU, Petitioner/Defendant-Counterclaimant-Appellant.
SCWC-XX-XXXXXXX
CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
(CAAP-XX-XXXXXXX; CIV. NO. 13-1-0420)
MARCH 10, 2020
RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON, JJ.
OPINION OF THE COURT BY POLLACK, J.
Chapter 634J of the Hawaiʻi Revised Statutes authorizes
a court to enter an order declaring a plaintiff to be a
vexatious litigant in particularly defined circumstances. The
circuit court in this case determined that the defendant
qualified as a “plaintiff” for the purpose of the vexatious
litigant statute and that the required circumstances were
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demonstrated. The Intermediate Court of Appeals affirmed the
circuit court’s ruling.
Upon review of the vexatious litigant statute and its
legislative history, we hold that the circuit court and
Intermediate Court of Appeals erred in determining that the
defendant in this case qualified as a “plaintiff” and that other
requirements set forth in the statute were satisfied. We also
hold that a court’s vexatious litigant determination must be
supported by findings that set forth, with reasonable
specificity, the perceived misconduct, including a finding of
bad faith when applicable. Finally, we conclude that the record
does not show that the motions underlying the vexatious litigant
order in this case were made in bad faith.
I. BACKGROUND
On June 17, 1970, the Trustees of the Estate of
Bernice Pauahi Bishop (Bishop Estate) leased a parcel of land
located in Honolulu, Hawaiʻi (the property), to Kam Wo Wong and
Lillie Choy Wong as joint tenants for a period of 53 years and 9
months. On June 1, 1978, the Wongs assigned their interest in
the lease to Ronald G.S. Au. In 2010, Bishop Estate filed a
complaint against Au alleging he had breached the lease
agreement and seeking damages and possession of the property.
Au counterclaimed, alleging, inter alia, that Bishop Estate had
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breached the lease agreement and was engaging in retaliatory
eviction. The parties entered into a settlement agreement on
August 24, 2012 (settlement agreement). By the terms of the
settlement agreement, Au had until a date certain to pay lease
payments owed to Bishop Estate in the principal amount of
$62,000.
On February 13, 2013, Bishop Estate filed a complaint
against Au in the Circuit Court of the First Circuit (circuit
court),1 alleging that Au had breached the settlement agreement
by failing to make the required payment by December 31, 2012,
and that Au’s breach entitled Bishop Estate to damages,
termination of the lease, and possession of the property. On
August 2, 2013, Au, proceeding pro se, filed a counterclaim, and
later a first amended counterclaim, which included claims that
Bishop Estate had breached the lease and the settlement
agreement by unreasonably withholding permission to allow him to
assign one-half of his lease interest to a third party (the
lease interest), that the settlement agreement as written was
void and unenforceable because the parties had agreed that the
amount would be due December 31, 2013, not December 31, 2012,
that Bishop Estate had tortiously interfered in Au’s assignment
1
The Honorable Rhonda A. Nishimura presided over the proceedings.
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of the lease interest in the property to a third party, and that
Bishop Estate had engaged in a retaliatory eviction.
On June 6, 2013, Bishop Estate moved for summary
judgment of the claims in its complaint, asserting that it was
entitled to immediate termination of the lease and repossession
of the property based on Au’s failure to comply with the terms
of the settlement agreement. Au opposed the motion, arguing
that his failure to make payment on December 31, 2012, was due
to Bishop Estate tortiously interfering in his assignment of the
lease interest and that payment was actually due on December 31,
2013. The circuit court granted Bishop Estate’s motion for
summary judgment and entered an order on September 18, 2013,
terminating the lease and awarding Bishop Estate damages in the
amount of $130,735.40 and possession of the property (summary
judgment order).
On September 25, 2013, Au filed a motion for
reconsideration of the summary judgment order (motion for
reconsideration), arguing the court had not considered the
claims and affirmative defenses in his counterclaim,
specifically his claim of retaliatory eviction, and that if it
had, summary judgment would not have been granted in Bishop
Estate’s favor. In response, Bishop Estate asserted that each
argument in the motion for reconsideration had either been
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raised in Au’s opposition to the motion for summary judgment or
was untimely and therefore waived. The court denied the motion
for reconsideration on April 30, 2014, stating its decision was
based on its review of the record and “good cause.”
On March 12, 2015, Bishop Estate filed a motion for
summary judgment on Au’s first amended counterclaim, arguing it
had not breached the lease by withholding consent to assignment
of Au’s lease interest because it had an unqualified right to
withhold consent, and thus it could not have tortiously
interfered with Au’s assignment of the lease interest or
unreasonably withheld consent. In opposition, Au maintained
that Bishop Estate had fraudulently induced his assent to the
settlement agreement, had breached the lease by refusing to
permit assignment of his interest in the lease, and had violated
statutory provisions proscribing unfair and deceptive business
practices. At the April 16, 2015 hearing, the court orally
granted the motion. In its written order, filed on May 18, 2015
(counterclaim summary judgment order), the court found that Au
failed to submit evidence that the settlement agreement was
obtained by fraud or that Bishop Estate had unreasonably
withheld permission to assign Au’s interest in the lease.
A month before the circuit court issued the
counterclaim summary judgment order, Au filed a motion to vacate
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or set aside the summary judgment order under Hawaii Rules of
Civil Procedure (HRCP) Rule 60(b) (Rule 60(b) motion to vacate).2
Au contended that the $62,000 principal amount due under the
settlement agreement was for real property taxes Bishop Estate
had paid, which had been incorrectly calculated because Bishop
Estate had failed to consider refunds Au had obtained through
certain tax appeals. Bishop Estate countered that any argument
as to the accuracy of the calculations should have been raised
during earlier proceedings and was not a basis to reconsider the
court’s summary judgment order.
The circuit court denied Au’s Rule 60(b) motion to
vacate at a hearing held on May 13, 2015. In its oral ruling,
the court indicated that Au’s motion had been filed more than
one year after the entry of the summary judgment order, but the
court reviewed the merits of the motion, “notwithstanding the
2
HRCP Rule 60(b) (2006) provides in relevant part as follows:
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: (1) mistake, inadvertence, surprise, or excusable
neglect; (2) newly discovered evidence which by due
diligence could not have been discovered in time to move
for a new trial under Rule 59(b); (3) fraud (whether
heretofore denominated intrinsic or extrinsic),
misrepresentation, or other misconduct of an adverse party;
. . . . The motion shall be made within a reasonable time,
and for reasons (1), (2), and (3) not more than one year
after the judgment, order, or proceeding was entered or
taken.
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timeliness issue as to when the motion could [or] should have
been brought.” The court found that Au’s calculations were not
reliable because he did not explain them or identify supporting
sources, and that Au did not exercise appropriate diligence as
he could have raised the issue earlier. The court’s oral
findings were set forth in a June 2, 2015 written order.
However, two weeks before entry of the written order, Au filed a
motion to reconsider the court’s denial of his Rule 60(b) motion
to vacate (renewed motion to vacate). Au proffered declarations
from his accountant to substantiate his contention that the
settlement agreement amount of $62,000 was incorrectly
calculated and to demonstrate the reliability of his own
calculations. Bishop Estate contended that the motion was
untimely, the argument had been waived, and, in any event, Au’s
calculations remained inaccurate.
On May 29, 2015, again prior to the entry of the June
2, 2015 order, Au had filed a motion for reconsideration of the
counterclaim summary judgment order (motion to reconsider CCSJ
order). Au asserted that, because of his argument in the
renewed motion to vacate that the settlement amount of $62,000
was based on erroneous calculations, vacatur of the summary
judgment order entered in favor of Bishop Estate would also
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permit reconsideration of the counterclaim summary judgment
order.
The court entered final judgment on June 12, 2015.
The final judgment terminated Au’s interest in the property,
returned possession of the property to Bishop Estate, and
awarded a monetary judgment against Au in the amount of
$130,735.40.
On June 16, 2015, Au filed a notice of appeal.3 On
that same day, the court issued an order denying Au’s renewed
motion to vacate, summarily ruling that its decision was based
on its review of the motion, memoranda, declarations, and
exhibits filed in support of and in opposition to the motion.
Two days later, the court by minute order denied Au’s motion to
reconsider CCSJ order. A written order denying the motion was
entered on August 19, 2015, again stating only that the decision
was based on the court’s review of the record.4
On June 29, 2015, Au filed a motion to vacate the
final judgment (motion to vacate final judgment). Au maintained
3
This appeal was heard by the Intermediate Court of Appeals (ICA)
in CAAP-15-466. In an amended summary disposition order entered on December
22, 2017, the ICA affirmed the circuit court’s final judgment and award of
attorneys’ fees in favor of Bishop Estate.
4
On June 26, 2015, Bishop Estate filed a motion for the award of
costs and a motion for an award of attorneys’ fees, which Au opposed. On
August 14, 2015, the circuit court granted in part and denied in part these
motions.
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that the final judgment was premature because it was entered
before the court’s denial of his renewed motion to vacate and
the motion to reconsider CCSJ order. Since these motions were
still pending at the time the court entered final judgment, Au
contended the judgment could not have been a final, appealable
judgment because the motions presented unresolved, non-
collateral issues. Au contended that because the judgment had
not resolved all issues in the case, his notice of appeal filed
on June 16, 2015, would be dismissed as premature. Bishop
Estate responded that the court was not required to rule on Au’s
pending motions for reconsideration before entering final
judgment.5 On August 26, 2015, the court issued an order denying
Au’s motion.
On August 25, 2015, prior to the court’s denial of his
motion to vacate final judgment, Au filed a motion for
correction, modification, or relief from judgment under HRCP
Rule 60(b) (motion for correction). Au reiterated his argument
that the entry of final judgment was premature and asked that
the court vacate the final judgment of June 12, 2015, and enter
the August 19, 2015 order in which the court denied Au’s motion
5
Bishop Estate argued that, to the extent Au’s pending motions
were prejudgment motions, the entry of judgment constituted a denial of those
motions, and to the extent the motions were post-judgment motions, the court
was not required to rule on them before entry of judgment.
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to reconsider CCSJ order as a final order. Au contended this
was necessary for him to properly appeal the court’s denial of
his motion. Bishop Estate responded that the court was not
required to rule on the motion to reconsider CCSJ before entry
of final judgment in order for Au to appeal its denial. Bishop
Estate also asked the court to declare Au a vexatious litigant
pursuant to Hawaii Revised Statutes (HRS) § 634J-7.6 Bishop
Estate stated that its request was based on Au’s repeated
assertion of previously decided arguments, particularly his
contention that the amount owed under the settlement agreement
was incorrectly calculated. During the hearing on September 18,
2015, Au withdrew his motion for correction. The court minutes
do not reflect a ruling on Bishop Estate’s request that Au be
deemed a vexatious litigant.
On December 17, 2015, Au filed a motion to stay
enforcement of the final judgment pending determination of the
amount of a supersedeas bond (motion to stay). Au argued that
6
HRS § 634J-7 (1993) provides in relevant part as follows:
[T]he court, on its own motion or the motion of any party,
may enter a prefiling order which prohibits a vexatious
litigant from filing any new litigation in the courts of
this State on the litigant’s own behalf without first
obtaining leave of the presiding judge of the court where
the litigation is proposed to be filed. Disobedience of
this order by a vexatious litigant may be punished as a
contempt of court.
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the amount of the supersedeas bond should not be set by the
amount set forth in the final judgment because certain
attorneys’ fees had erroneously been awarded because of the
pending appeal of the amount calculated to be owed under the
settlement agreement. Bishop Estate argued in response that Au
was attempting to relitigate the amount owed under the
settlement agreement and the amount of attorneys’ fees awarded.
In a subsequent motion, Au proffered a lien on certain real
property owned by Au and his wife as an alternative to posting a
bond.
Before the hearing on these motions, Bishop Estate
filed a motion to declare Au a vexatious litigant under HRS
§ 634J-1(2) and (3) based on Au’s repeated assertion of
arguments that Bishop Estate contended were already resolved.
Bishop Estate identified seven motions filed by Au that it
maintained were attempts to relitigate already resolved issues.7
Au argued in opposition that he, as a defendant in the action,
could not be declared a vexatious litigant and that in any event
his motions had never been determined to be frivolous or made in
bad faith. Au asserted that Bishop Estate’s motion was intended
7
The seven motions identified by Bishop Estate were Au’s
(1) motion for reconsideration; (2) Rule 60(b) motion to vacate; (3) renewed
motion to vacate; (4) motion to reconsider CCSJ order; (5) motion to vacate
final judgment; (6) motion for correction; and (7) motion to stay.
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only to harass him and asked that the court impose monetary
sanctions against Bishop Estate under HRCP Rule 11. After
hearing arguments, the court granted the motion, declaring Au a
vexatious litigant.8
The circuit court thereafter issued a written order
granting the motion (vexatious litigant order). The court
concluded Au met HRS § 634J-1’s definition of “plaintiff”
because he had, through the seven identified motions, sought to
relitigate the merits of the summary judgment order and thereby
“maintained” the litigation. The court also found that because
Au’s multiple motions, which had all received adverse rulings,
sought to relitigate the summary judgment order, Au met the
definition of a vexatious litigant under either HRS § 634J-1(2)
or (3).9 Au filed an interlocutory appeal challenging the
vexatious litigant order.
8
Before ruling on the vexatious litigant motion, the court orally
denied Au’s motion to stay and motion to post supersedeas bond. The court
later issued a written order denying the motions on the basis that Au had
failed to demonstrate that his proffered alternative of a lien on real
property was an adequate substitute for a bond.
9
HRS § 634J-1(2) and (3) (1993) provide as follows:
“Vexatious litigant” means a plaintiff who does any of the
following: . . .
(2) After litigation has been finally resolved against the
plaintiff, relitigates or attempts to relitigate in propria
persona and in bad faith, either:
(continued. . .)
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II. ICA PROCEEDINGS
In a Summary Disposition Order filed June 28, 2019,
the ICA affirmed the circuit court’s interpretation of HRS
§ 634J-1, holding that Au qualified as a “plaintiff” because he
maintained the litigation through the numerous motions he filed
in this case.10 The ICA also determined that Au met the
definition of a vexatious litigant under HRS § 634J-1(2),
concluding that Au sought to relitigate the merits of issues
that the court had already resolved through his contention that
the settlement amount was incorrectly calculated in the seven
motions identified by Bishop Estate.11
(. . .continued)
(A) The validity of the determination against the
same defendant or defendants as to whom the
litigation was finally determined; or
(B) The cause of action, claim, controversy, or any
of the issues of fact or law, determined or concluded
by the final determination against the same defendant
or defendants as to whom the litigation was finally
determined;
(3) In any litigation while acting in propria persona,
files, in bad faith, unmeritorious motions, pleadings, or
other papers, conducts unnecessary discovery, or engages in
other tactics that are frivolous or solely intended to
cause unnecessary delay[.]
10
Additionally, the ICA observed in a footnote that “at least for
the purposes of his counterclaims, Au is a plaintiff as he commenced or
instituted those claims.”
11
The ICA observed that it had recently held in CAAP-XX-XXXXXXX
that Au knew or should have known about the incorrectly calculated amount at
(continued. . .)
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The ICA held that the circuit court was not required
to make a specific finding that any of Au’s motions were made in
bad faith and that bad faith could be inferred from Au’s
reassertion of the same argument in different motions.12
Further, the ICA determined, HRS chapter 634J did not require
specific findings of fact or conclusions of law to be made.
The ICA therefore concluded that the circuit court did
not abuse its discretion in declaring Au a vexatious litigant
and affirmed the vexatious litigant order.13
III. STANDARDS OF REVIEW
The interpretation of a statute is a question of law
reviewable de novo. Tax Found. v. State, 144 Hawaiʻi 175, 185,
439 P.3d 127, 137 (2019).
A vexatious litigant determination is reviewed under
an abuse of discretion standard. Ek v. Boggs, 102 Hawaiʻi 289,
294, 75 P.3d 1180, 1185 (2003). “[A]n abuse of discretion
(. . .continued)
the time of the summary judgment motions and therefore it could not provide a
basis for reconsideration under HRCP Rule 60(b).
12
The ICA concluded that the circuit court was entitled to rely on
a presumption of the correctness of its prior rulings, rejecting Au’s
argument that the court could not deem him a vexatious litigant on the basis
of motions that had been appealed.
13
The ICA found it unnecessary to determine whether Au met the
definition under HRS § 634J-1(3).
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occurs where the trial court has clearly exceeded the bounds of
reason or disregarded rules or principles of law or practice to
the substantial detriment of a party litigant.” Id.
(alterations in original) (quoting Ass’n of Apartment Owners of
Wailea Elua v. Wailea Resort Co., 100 Hawaiʻi 97, 119, 58 P.3d
608, 630 (2002)).
IV. DISCUSSION
A. Au Does Not Meet the Definition of “Plaintiff” Under HRS
§ 634J-1.
HRS § 634J-7 empowers a court to enter a prefiling
order prohibiting a vexatious litigant from filing any new
litigation on the litigant’s own behalf without first obtaining
leave of the presiding judge of the court where the litigation
is proposed to be filed.14 As set forth by HRS § 634J-1, a
“vexatious litigant” for purposes of HRS § 634J-7 must be a
“plaintiff.” HRS § 634J-1 defines “plaintiff” as “the person
who commences, institutes or maintains litigation or causes it
14
As stated, HRS § 634J-7 provides in relevant part as follows:
[T]he court, on its own motion or the motion of any party,
may enter a prefiling order which prohibits a vexatious
litigant from filing any new litigation in the courts of
this State on the litigant’s own behalf without first
obtaining leave of the presiding judge of the court where
the litigation is proposed to be filed. Disobedience of
this order by a vexatious litigant may be punished as a
contempt of court.
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to be commenced, instituted, or maintained[.]”15 In this case,
both the circuit court and the ICA determined that HRS § 634J-1
defined “plaintiff” so expansively that Au was a “plaintiff” for
purposes of HRS § 634J-1--even though he was the defendant in
the case--because he had, by filing the identified seven
motions, caused the litigation to be maintained.
This court’s construction of statutes is guided by
well-settled principles. See State v. Choy Foo, 142 Hawaiʻi 65,
72, 414 P.3d 117, 124 (2018); State v. Wheeler, 121 Hawaiʻi 383,
390, 219 P.3d 1170, 1177 (2009). We first examine the language
of the statute itself. Choy Foo, 142 Hawaiʻi at 72, 414 P.3d at
124. If the language is plain and unambiguous, we must give
effect to its plain and obvious meaning. Id. Also, implicit in
statutory construction is our foremost obligation to ascertain
and give effect to the intention of the legislature, which is
obtained primarily from the language of the statute itself. Id.
Finally, when there is doubt, doubleness of meaning, or
indistinctiveness or uncertainty of an expression used in a
statute, an ambiguity exists. Id. When there is ambiguity, the
15
HRS § 634J-1 defines “Plaintiff” in full as follows:
“Plaintiff” means the person who commences, institutes or
maintains litigation or causes it to be commenced,
instituted, or maintained, including an attorney at law
acting on the attorney’s own behalf.
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meaning of ambiguous words may be sought by examining the
context or resorting to extrinsic aids to determine legislative
intent. Citizens Against Reckless Dev. v. Zoning Bd. of
Appeals, 114 Hawaiʻi 184, 194, 159 P.3d 143, 153 (2007).
The relevant language of HRS § 634J-1 states that
“‘plaintiff’ means the person who commences, institutes or
maintains litigation or causes it to be commenced, instituted,
or maintained[.]” Looking solely to this language, it is not
plain or unambiguous that the term “plaintiff” refers to any
party, including a defendant, who maintains litigation by filing
motions. Thus, the meaning of the term “plaintiff” is ambiguous
as defined by HRS § 634J-1. It is therefore necessary to
examine the context and extrinsic aids pertaining to the statute
to determine whether the legislature intended the definition of
“plaintiff” in HRS § 634J-1 to broadly encompass parties that
maintain litigation by filing motions, as the circuit court and
the ICA determined.
According to its legislative history, HRS chapter 634J
was enacted in order to statutorily define “vexatious litigant”
and to require plaintiffs falling within that definition to post
security in cases where the court determines that the plaintiff
is a vexatious litigant and there is no reasonable probability
that the plaintiff will prevail. S. Stand. Comm. Rep. No. 467,
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in 1993 Senate Journal, at 978. The chapter’s purpose was to
reduce the number of frivolous cases being filed in the court
system. Id. The bill was amended in the Senate “to clarify
that the definition of vexatious litigant is limited to the
plaintiff.” Id. Similarly, the House Standing Committee Report
recommended that the final language clarify that “a vexatious
litigant is a person and a plaintiff” due to concern that the
definition of a vexatious litigant could bar certain groups such
as environmentalists or Native Hawaiians from filing legitimate
claims. H. Stand. Comm. Rep. No. 1178, in 1993 House Journal,
at 1473. The legislature’s decision to limit the definition of
a vexatious litigant to plaintiffs strongly indicates the
legislature did not intend the definition of “plaintiff” to
encompass all litigants, and particularly not defendants.
The context in which HRS § 634J-1 defines “plaintiff”
is also instructive. State v. Yokota, 143 Hawaiʻi 200, 205, 426
P.3d 424, 429 (2018) (“[L]aws in pari materia, or upon the same
subject matter, shall be construed with reference to each
other.”). HRS § 634J-1 defines “defendant” as “a person
(including a corporation, association, partnership, firm, or
governmental entity) against whom litigation is brought or
maintained, or sought to be brought or maintained.” (Emphasis
added.) The ICA concluded that a party is a “plaintiff” for
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purposes of HRS § 634J-1 if that party maintains litigation by
filing motions.16 Since the definitions of “plaintiff” and
“defendant” in HRS § 634J-1 are in pari materia, the meaning of
“maintained” in HRS § 634J-1’s definition of defendant must be
in accordance with the meaning of “maintained” in HRS § 634J-1’s
definition of “plaintiff.” Kam v. Noh, 70 Haw. 321, 325, 770
P.2d 414, 417 (1989) (“In the absence of an express intention to
the contrary, words or phrases used in two or more sections of a
statute are presumed to be used in the same sense throughout.”).
Thus, because a defendant is defined as one against
whom litigation is maintained, and, according to the ICA and the
circuit court, litigation can be maintained by filing motions,
then any party that files motions would become a “plaintiff” and
any party against whom a motion is filed would become a
“defendant.” Under this interpretation, nearly all litigants
would simultaneously satisfy HRS § 634J-1’s definition of
“plaintiff” and “defendant,” eroding the distinction between
“plaintiff” and “defendant” such that either term simply means
“litigant.” When the legislature uses different words in a
statute, however, the different words are presumed to have
different meanings. Agustin v. Dan Ostrow Constr. Co., 64 Haw.
16
In reaching this conclusion, the ICA relied solely on the
dictionary definition of “maintain” and did not consider the legislative
history or the context of the statute.
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80, 83, 636 P.2d 1348, 1351 (1981). The distinction within the
statute, as well as the legislative history, therefore requires
that we give different meanings to these different words and
interpret “plaintiff” in a manner that is not so expansive as to
swallow the distinction between plaintiffs and defendants, which
the legislature explicitly sought to preserve.17
Based on the foregoing, we hold that HRS § 634J-1’s
definition of “plaintiff” does not encompass a litigant who
maintains litigation by filing motions in the litigant’s
capacity as a defendant.18 The ICA and the circuit court erred
in ruling to the contrary.
B. Au Also Would Not Meet the Definition of Vexatious Litigant
Under HRS § 634J-1(2).
Even assuming Au had met the definition of “plaintiff”
under HRS § 634J-1, he would not qualify as a “vexatious
17
See also Standard Mgmt., Inc. v. Kekona, 98 Hawaiʻi 95, 105, 43
P.3d 232, 242 (App. 2001) (holding that trial court erred by expanding HRS
§ 634J-1’s definition of “plaintiff” to include plaintiffs’ counsel; stating
that, “Under HRS § 634J–1, only a plaintiff may be deemed a vexatious
litigant: ‘Vexatious litigant means a plaintiff[.]’” (alteration in
original)). The ICA in this case held that, “To the extent that
the SMI court determined that a vexatious litigant cannot be a defendant,
that determination was dicta.”
18
Although the ICA found that Au was a plaintiff for the purpose of
his counterclaims, only one of the motions underlying the vexatious litigant
order was filed by Au in his capacity as a counterclaimant, which
indisputably was insufficient to support the order. It is thus unnecessary
to decide whether a counterclaimant may qualify as a “plaintiff” under HRS
§ 634J-1.
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litigant” under HRS § 634J-1(2). This subsection defines a
vexatious litigant as a plaintiff who
[a]fter litigation has been finally resolved against the
plaintiff, relitigates or attempts to relitigate in propria
persona and in bad faith, either:
(A) The validity of the determination against the same
defendant or defendants as to whom the litigation was
finally determined; or
(B) The cause of action, claim, controversy, or any of the
issues of fact or law, determined or concluded by the final
determination against the same defendant or defendants as
to whom the litigation was finally determined[.]
(Emphases added.) In this case, the circuit court found that Au
was a vexatious litigant by relying on subsection (2) or, in the
alternative, subsection (3) of § 634J-1. The ICA agreed that Au
met the above definition of a vexatious litigant under
subsection (2) and declined to consider whether Au met the
definition under subsection (3).
Significantly, HRS § 634J-1(2) is limited in its
application to plaintiffs who attempt to relitigate issues after
they have been finally resolved. Litigation is not finally
resolved until appellate review of the proceeding is complete or
the period in which the parties may seek review has expired.
See, e.g., Catron v. Tokio Marine Mgmt., Inc., 90 Hawaiʻi 407,
412, 978 P.2d 845, 850 (1999) (observing that the case had not
reached final resolution because appeals were pending);
Silvestrone v. Edell, 721 So. 2d 1173, 1175 n.2 (Fla. 1998)
(holding that litigation is concluded upon expiration of time of
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appeal or completion of appellate review for purposes of a
statute of limitations for legal malpractice claims).
This interpretation is consistent with the statute’s overarching
purpose of reducing the institution of frivolous cases seeking
to relitigate matters that have been finally determined.
S. Stand. Comm. Rep. No. 467, at 978.
Here, the court’s summary judgment order did not “finally
resolve[]” the litigation against Au because either the time for
filing a notice of appeal had not expired or appellate review
had not been completed when Au filed the relevant motions.19 Au
could therefore not be deemed a vexatious litigant under HRS
§ 634J-1(2), even if he had been a “plaintiff.” See Part IV.A.
Accordingly, the ICA erred in concluding that the circuit court
did not abuse its discretion when it determined that Au was a
vexatious litigant under HRS § 634J-1(2).
19
Because HRS § 634J-1(2) requires litigation to be finally
resolved, the circuit court could not rely on a presumption of the
correctness of its rulings as a basis for declaring Au a vexatious litigant
under this subsection, as stated by the ICA.
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C. A Finding of Bad Faith Is Required in Order To Conclude a
Litigant Is Vexatious Under HRS § 634J-1(2) or (3).
In addition, to meet the definition of a vexatious
litigant under either HRS § 634J-1(2) or (3), the plaintiff must
have acted in bad faith. These subsections provide that a
vexatious litigant is a plaintiff who
(2) [a]fter litigation has been finally resolved against
the plaintiff, relitigates or attempts to relitigate in
propria persona and in bad faith, either: . . . ;
(3) [i]n any litigation while acting in propria persona, files,
in bad faith, unmeritorious motions, pleadings, or other papers,
conducts unnecessary discovery, or engages in other tactics that
are frivolous or solely intended to cause unnecessary delay[.]
(Emphases added.)
The bad faith requirement was carefully considered by
the legislature when HRS chapter 634J, “Vexatious Litigants,”
was being enacted. A House Standing Committee Report indicates
significant concern that plaintiffs would be deemed vexatious
merely for filing motions that were repetitive.
The testimony of the [Hawaiʻi State Bar Association]
addressed the definition of the term “repeatedly” as used
in Paragraphs [634J]-1(2) and (3) of the new chapter
because it might unfairly bar meritorious claims under this
proposed legislation. The HSBA was concerned that the term
“repeatedly” may be applied to plaintiffs who “repeatedly”
relitigate two or three times or plaintiffs who
“repeatedly” file motions, pleadings, or other papers that
appear unmeritorious. It is not uncommon for litigants,
especially those litigating pro se, to file more than one
claim for legitimate reasons or have claims brought in
state court to be later litigated in federal court, and
vice versa. Moreover, it is not uncommon for plaintiffs to
repeatedly file motions, pleadings, or other papers due to
basic unfamiliarity with the judicial process.
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H. Stand. Comm. Rep. No. 1178, at 1473 (emphases added). To
address this concern, the legislature specified that vexatious
litigants must have acted in bad faith.
Your Committee, therefore, finds that the term “repeatedly”
as used in Paragraphs [634J]-1(2) and (3) of the new
chapter should refer to plaintiffs who relitigate in bad
faith and who deliberately and intentionally abuse the
system by bringing claims frivolously or causing
unnecessary delay. The passage of this bill is not meant
to punish litigants that are unfamiliar with the judicial
process and are earnestly attempting to protect or preserve
their rights. Your Committee has therefore amended this
bill to insert the phrase “in bad faith.”
Id. (emphases added). The legislative history of HRS chapter
634J demonstrates that the inclusion of the bad faith
requirement in HRS § 634J-1(2) and (3) was intended to limit the
definition of vexatious litigant to those plaintiffs who attempt
to relitigate in bad faith and who intentionally abuse the
system by filing frivolous claims or deliberately cause
unnecessary delay. That is, the legislature did not intend to
punish plaintiffs who earnestly attempt to protect or preserve
their rights, even when the effort to do so involves the
repeated filing of motions that appear unmeritorious.
In the vexatious litigant order in this case, the
circuit court found that Au had filed seven motions that sought
to relitigate the merits of the summary judgment order, and that
each of those motions had been decided adversely to Au. The
court did not conclude orally or in the written order that any
of Au’s seven motions were frivolous, unmeritorious, or made in
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bad faith--nor was such a finding made at the time the motions
were denied by the court. The court also did not state that it
was inferring bad faith from the totality of Au’s conduct during
the litigation.
Despite the circuit court’s lack of findings as to bad
faith, the ICA stated that the court could infer bad faith from
Au’s insistence on relitigating the same issues in differently
titled motions. However, allowing the court to infer bad faith
from the filing of motions that “relitgate the merits of the
issues already disposed of,” as the ICA did in this case,
effectively reads the bad faith requirement out of HRS § 634J-
1(2) and (3). In doing so, the ICA directly contravened the
legislature’s purpose of including the requirement that the
plaintiff be found to have acted in bad faith before being
deemed vexatious under HRS § 634J-1. H. Stand. Comm. Rep. No.
1178, at 1473 (“Paragraphs [634J]-1(2) and (3) of the new
chapter should refer to plaintiffs who relitigate in bad
faith[.]”).
Further, the ICA’s analysis on this issue was
predicated on an incorrect interpretation of our caselaw. In
concluding that the circuit court did not have to explicitly
find that Au acted in bad faith, the ICA stated that bad faith
does not need to be explicitly stated in a sanctioning order and
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can be inferred from conduct. (Citing to Bank of Hawaii v.
Kunimoto, 91 Hawaiʻi 372, 390, 984 P.2d 1198, 1216 (1999).) In
Kunimoto, however, this court held only that where the circuit
court makes findings that “are tantamount to a specific finding
of bad faith . . . . [such] findings are sufficient to enable
[an appellate] court to infer a specific finding of bad faith by
the circuit court.” 91 Hawaiʻi at 390, 984 P.2d at 1216
(emphasis added). We did not hold that the appellate court
should scrutinize the record to determine whether it supports an
inference that the circuit court made a specific finding of bad
faith, let alone whether the record supports the making of an
inference that the circuit court could, hypothetically, have
made. Rather, the court in Kunimoto simply stated that in cases
where the circuit court’s findings are equivalent to a finding
of bad faith, the appellate court will infer a specific finding
of bad faith by the circuit court. Id. (holding that the
circuit court’s findings that the appellants’ conduct
constituted fraud upon the court, which was at best reckless and
at worst knowing and intentional, was tantamount to a finding of
bad faith by the court).
Here, the circuit court’s findings that Au had filed
seven motions that sought to relitigate the merits of the
summary judgment order, and that each of those motions had been
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decided adversely to Au, are not tantamount to a finding of bad
faith.20 Cf. id. Therefore, the ICA erred in concluding that
the circuit court could have inferred bad faith from the filing
of these motions.
The ICA also held that the circuit court is not
obligated to make findings of fact or conclusions of law in
granting a motion to declare a plaintiff a vexatious litigant
under HRS § 634J-7. It is well established, however, that
orders imposing sanctions should “set forth findings that
describe, with reasonable specificity, the perceived misconduct
(such as harassment or bad faith conduct), as well as the
appropriate sanctioning authority.” Id.; see also Kawamata
Farms, Inc. v. United Agri Prods., 86 Hawai‘i 214, 257, 948 P.2d
1055, 1098 (1997); Enos v. Pac. Transfer & Warehouse, Inc., 79
Hawai‘i 452, 459, 903 P.2d 1273, 1280 (1995); Kaina v. Gellman,
119 Hawaii 324, 331, 197 P.3d 776, 783 (App. 2008) (stating that
a sanctioning order “must inform the party of the authority
pursuant to which he or she is to be sanctioned”). The
requirement that a court should make findings that state the
perceived misconduct with reasonable specificity when sanctions
20
Additionally, as discussed infra Part IV.D, a review of the seven
motions that underlie the vexatious litigant order refutes the contention
that they were collectively filed in bad faith.
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are imposed has been applied in multiple situations, such as
sanctions for discovery violations, filing a complaint, and
delay in withdrawing a motion. Fujimoto v. Au, 95 Hawaii 116,
153, 19 P.3d 699, 736 (2001) (failure to review court rule
before filing the complaint); Kawamata Farms, 86 Hawai‘i at 256,
948 P.2d at 1097 (discovery fraud); Enos, 79 Hawai‘i at 460, 903
P.2d at 1281 (undue delay in withdrawing motion).
The making of findings regarding the purported
misconduct, including bad faith, serves multiple important
purposes. First, it clearly identifies and explains to the
sanctioned person the conduct underlying the sanction.
Additionally, findings that describe with reasonable
particularity the perceived misconduct facilitate a meaningful
and more efficient appellate review. Kunimoto, 91 Hawai‘i at
390, 984 P.2d at 1216. Specifying the sanctioning authority,
including the court’s inherent authority if applicable, is also
necessary for meaningful appellate review. Kaina, 119 Hawaii at
331, 197 P.3d at 783. Finally, the findings assure both the
litigants and the court that the decision to impose sanctions
was the result of reasoned consideration. See Enos, 79 Hawai‘i
at 459, 903 P.2d at 1280 (stating that specific findings assure
litigants and the judge that the decision was the product of
thoughtful deliberation).
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A prefiling order preventing the litigant from filing
any new litigation, or an order during litigation that prohibits
the filing of documents without leave of the court, is
indisputably a sanction on that litigant. See Black’s Law
Dictionary 1608 (11th ed. 2019) (defining “sanction” as “a
provision that gives force to a legal imperative by either
rewarding obedience or punishing disobedience”). Requiring
trial courts to make findings of fact when declaring a plaintiff
a vexatious litigant is also warranted by the fact that such
determination under HRS chapter 634J, unlike monetary sanctions,
continues to affect the litigant in future litigation and
impairs the litigant’s right to access the judicial system.
Thus, we hold that a court imposing a vexatious litigant order
under HRS chapter 634J is required to make findings that set
forth, with reasonable specificity, the perceived misconduct,
including a finding of bad faith when applicable, and the
authority under which the sanction is imposed.21 Cf. Kunimoto,
21
In concluding that the circuit court was not required to make any
specific findings of fact, the ICA relied on HRCP Rule 52. HRCP Rule 52, the
ICA observed, provides that “findings of fact and conclusions of law are
unnecessary on decisions of motions under Rules 12 or 56 or any other motion”
unless the motion concerns amendment of a judgment or judgment on partial
findings. However, our cases establish the importance of setting forth
findings of fact in a sanctioning order, regardless of the authority under
which the sanctions are imposed.
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91 Hawaii at 390, 984 P.2d at 1216; Kaina, 119 Hawaii at 331,
197 P.3d at 783.
The circuit court’s order declaring Au a vexatious
litigant under HRS § 634J-1(2) or (3) was therefore additionally
deficient because it failed to specify the perceived misconduct
that constituted bad faith and the court’s findings were not
tantamount to a finding of bad faith. Accordingly, the ICA
erred in affirming the circuit court’s order on this basis also.
D. The Record Does Not Support a Finding of Bad Faith.
The circuit court concluded that Au was a vexatious
litigant because he filed seven motions that sought to
relitigate the merits of the summary judgment order and each of
those motions was decided adversely to Au. In affirming the
circuit court, the ICA determined that Au met the definition of
a vexatious litigant because, through the seven motions, he
“continued to relitigate or attempt to relitigate issues of law
or fact finally determined against him” in bad faith. A close
review of the seven motions underlying the vexatious litigant
order demonstrates that they do not support the ICA’s inference
that Au sought to relitigate the merits of the summary judgment
order in bad faith.
Au’s motion for reconsideration was the first motion
underlying the vexatious litigant order. In this motion, Au
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argued that the circuit court did not duly consider the
contentions in the counterclaim, particularly his argument that
he was the subject of a retaliatory eviction, before granting
summary judgment for Bishop Estate. Bishop Estate maintained
that Au waived this argument by not including it in his
opposition. In denying the motion, the court stated only that
its decision was based on its review of the record and for good
cause.
In the second motion identified, the Rule 60(b) motion
to vacate, Au contended that the $62,000 owed to Bishop under
the settlement agreement was incorrectly calculated. Bishop
Estate argued that Au waived this argument by failing to raise
it in an earlier proceeding. The court’s order denying this
motion stated that its decision was based on the untimeliness of
the motion, the unreliability of Au’s proffered calculations,
and Au’s waiver of the argument by not raising it in his
opposition to Bishop Estate’s motion for summary judgment.
Au’s renewed motion to vacate the summary judgment
order, the third motion, sought to correct a deficiency in his
motion to vacate that the court had identified, namely the
unreliability of his calculations, by proffering a declaration
from his accountant.
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The fourth motion, Au’s motion to reconsider CCSJ
order, was filed when the third motion was pending. Au filed
this motion apparently on the premise that the court might
credit the new evidence in his renewed motion to vacate. Since
the circuit court had considered, at least in part, the merits
of the Rule 60(b) motion to vacate in determining that Au’s
calculations were unreliable, Au’s motion to reconsider CCSJ
order also sought to preserve his challenge to the counterclaim
summary judgment order based upon his submission of the new
evidence.
The fifth motion identified was Au’s motion to vacate
final judgment, which sought this relief because the final
judgment had been entered while Au’s renewed motion to vacate
and the motion to reconsider CCSJ order were pending. Au
contended that the premature entry of the final judgment would
result in his notice of appeal being dismissed as premature.
The motion was clearly an effort to ensure that issues were
preserved for appeal by addressing the sequence of events
involving the timing of the entry of the final judgment.
Au’s motion for correction, the sixth motion, was
filed prior to the court’s denial of his motion to vacate final
judgment. In this motion, Au asked the court to vacate the
final judgment and prepare a new final judgment so that he could
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properly seek appeal of the court’s denial of his motion to
reconsider CCSJ order. As with the motion to vacate final
judgment, Au was attempting to preserve his right to appeal an
adverse order. This motion was withdrawn at the hearing prior
to its disposition.
Finally, the seventh motion was Au’s motion to stay.
In this motion, Au argued that enforcement of the judgment
should be stayed pending the determination of a supersedeas
bond. Au maintained that the amount of the supersedeas bond
should not be set by the amount stated in the final judgment
because certain attorneys’ fees were erroneously awarded and
because of the pending appeal of the court’s rejection of his
argument that the amount owed under the settlement agreement was
incorrectly calculated. The court ultimately denied Au’s motion
because it found his proffered alternative security, a lien on
certain real property, was an inadequate substitute for a
supersedeas bond.
In each of the motions, Au presented arguments that
were not demonstrably in bad faith or even frivolous. Indeed,
the circuit court made no such finding on any of the motions.
Although Au did include the rejected argument that the
settlement agreement was based on an incorrect calculation in
several of his motions, the mere inclusion of an apparently
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unmeritorious argument within a motion asserting other grounds
for relief does not establish that the motion was made in bad
faith, or was done with the deliberate intent to delay the
proceedings. See H. Stand. Comm. Rep. No. 1178, at 1473. As
the legislature noted, HRS chapter 634J is not meant to punish
litigants that are earnestly attempting to protect or preserve
their rights.22 Id.
Considering the seven motions both separately and
together, the record does not support a finding that Au sought
to relitigate the merits of the summary judgment order in bad
faith.
V. CONCLUSION
For the foregoing reasons, the ICA’s July 26, 2019
judgment on appeal and the circuit court’s vexatious litigant
order are reversed.
Ronald G.S. Au /s/ Mark E. Recktenwald
petitioner pro se
/s/ Paula A. Nakayama
Dennis W. Chong Kee
/s/ Sabrina S. McKenna
Christopher T. Goodin
for respondents /s/ Richard W. Pollack
/s/ Michael D. Wilson
22
Although a defendant who files a frivolous motion is not subject
to the vexatious litigant statute, defendants, including self-represented
defendants, are subject to HRCP Rule 11 and may be sanctioned under its
provisions in appropriate circumstances. See HRCP Rule 11(c).
34