Bennett v. Chung

• Decision Date: 09 October 2018
• Docket Number: SCWC-16-0000784
• Citation: 428 P.3d 778
• Parties: Brian E. BENNETT and Debra S. Bennett, Respondents/Plaintiffs-Appellees-Cross-Appellants, v. Samuel Jong Hoon CHUNG and Linda Hyunkong Chung, Petitioners/Defendants-Appellants-Cross-Appellees.
• Court: Hawaii Supreme Court

428 P.3d 778

Brian E. BENNETT and Debra S. Bennett, Respondents/Plaintiffs-Appellees-Cross-Appellants,

v.Samuel Jong Hoon CHUNG and Linda Hyunkong Chung, Petitioners/Defendants-Appellants-Cross-Appellees.

SCWC-16-0000784

Supreme Court of Hawai‘i.

OCTOBER 9, 2018

Carl H. Osaki, Honolulu, for petitioners/defendants-appellants-cross-appellees

Robert E. Badger, for respondents/plaintiffs-appellees-cross-appellants

RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON, JJ.

OPINION OF THE COURT BY NAKAYAMA, J.

After an arbitrator issues an arbitration award, parties to the arbitration proceeding may file motions to confirm or to vacate the award in court. Generally, a party must file a motion to vacate an arbitration award within ninety days after it receives notice of the award. Hawai‘i Revised Statutes (HRS) § 658A-23 (Supp. 2001). On the other hand, a party may file a motion to confirm the award at any time after receiving notice of the award. HRS § 658A-22 (Supp. 2001). This case presents two related questions involving these provisions: first, whether the time to file a motion to vacate an arbitration award is limited by the opposing party's filing of a motion to confirm; and second, how an order denying a motion to vacate an arbitration award can be properly appealed.

In this case, Respondents/Plaintiffs-Appellees-Cross-Appellants Brian E. Bennett and Debra S. Bennett (collectively, "the Bennetts"), after receiving notice of an arbitrator's award in their favor, filed a motion to confirm the award in the Circuit Court of the First Circuit (circuit court). Before the ninety-day period in which Petitioners/Defendants-Appellants-Cross-Appellees Samuel Jong Hoon Chung and Linda Hyunkong Chung (collectively, "the Chungs") could file a motion to vacate the award had expired, the circuit court granted the Bennetts' motion to confirm. The Chungs then filed a motion to vacate the award within the ninety-day period. The circuit court denied their motion to vacate, and the Chungs appealed the judgment of confirmation and the order denying the motion to vacate. The Intermediate Court of Appeals (ICA) dismissed the Chungs' appeal after they failed to file a jurisdictional statement and opening brief.

Back in the circuit court, the Chungs filed a motion to amend the previous order denying their motion to vacate because they believed that the arbitration statute barred such orders from being appealed. The circuit court agreed, and amended its order to "again confirm" the award to allow the Chungs to appeal. However, the ICA dismissed the Chungs' subsequent appeal for lack of appellate jurisdiction. On certiorari, the Chungs argue that the ICA erred in dismissing their appeal.

We agree. As a preliminary matter, the Chungs could not have appealed from the circuit court's first order denying their motion to vacate the award because HRS Chapter 658A does not permit appeals from such orders. Therefore, the circuit court properly amended its order and judgment and reconfirmed the award to allow the Chungs to appeal. Second, because HRS § 658A-23 clearly provides that the Chungs had ninety days, not less, to file a motion to vacate, and they filed a motion to vacate within that period, the Chungs had a right to timely appeal from the circuit court's amended order and amended judgment.

We conclude that the ICA has appellate jurisdiction to adjudicate the Chungs' appeal. Accordingly, we vacate the ICA's August 8, 2017 Order Dismissing Appeal for Lack of Appellate Jurisdiction and remand the case to the ICA to resolve the Chungs' appeal on the merits.

I. BACKGROUND

The Chungs and the Bennetts were involved in a dispute arising out of the sale of real property, and decided to resolve the dispute through arbitration. On February 11, 2015, an arbitrator issued a final award that awarded the Bennetts money damages and attorneys' fees and costs. On February 12, 2015, the Chungs were notified of the arbitrator's award by email.

A. Circuit Court Proceedings—Motion to Confirm

On February 17, 2015, five days after the Chungs were notified of the arbitrator's award, the Bennetts filed a motion in the circuit court¹ to confirm the arbitrator's award (Motion to Confirm) pursuant to HRS § 658A-22.²

On March 2, 2015, the Chungs filed a memorandum in opposition to the Motion to Confirm. In their memorandum, the Chungs informed the circuit court that they "intend[ed] to file a motion to vacate under Section 658A-23 of the Hawaii Revised Statutes,^{[3 ]} thus making the [Bennetts' Motion to Confirm] premature." They further explained that under HRS § 658A-23(b), they "[had] a statutory right to file a motion to vacate by May 13, 2015." The Chungs therefore requested "that the Court defer any decision on the [Bennetts' Motion to Confirm] until it can decide a motion to vacate on the merits." The Chungs did not argue any issue on the merits or provide any substantive reason to deny the Bennetts' Motion to Confirm at that time.

A hearing was held on the Bennetts' Motion to Confirm on March 10, 2015, approximately one month after the Chungs received notice of the arbitration award. At that time, the Chungs had not yet filed a motion to vacate the award. At the hearing, the issue of whether the circuit court was required to wait to confirm the arbitration award until the Chungs filed a motion to vacate the award was discussed. First, the Chungs contended that confirming the award without waiting the requisite ninety days prejudiced them:

[THE CHUNGS' COUNSEL:] I mean, we have 90 days. And what has happened here and I guess what you could do, according to the [Bennetts], if the award comes out, you just move to confirm the next day. And it forces a party on the other side like myself and the Chungs to, like, move fast on this.... I mean, I have the pieces, but I would like to put together a good motion to vacate and, I mean, I can't do that to beat this motion, and I don't think the way the statute is written it's intended to do that. And I think what the Court should do is just delay this decision on this motion until the motion to vacate is filed....

THE COURT: Okay. But they did move fast ... to confirm, but the award is issued February 11th, right? Motions [sic] filed six days late, February 17th. The hearing is today, so you had about 30 days to file.

[THE CHUNGS' COUNSEL:] Yes. Yes. And I have sixty more days to file. It is not my intent, Your Honor, to delay until the 90 day.... I mean, conversely, if the Court says, "I confirm now," then the statutory right to move to vacate is meaningless. And all I'm asking for, Your Honor, is time within that statutory period to get the motion filed there and heard, and then the Court can decide.

The Bennetts argued that any court order confirming the award at that time would not hamper the rights of the Chungs to file a motion to vacate in the future:

[A]s I read the law, the rights of the defendant or respondent in this matter are not abridged by the Court granting the motion to affirm. If [the Chungs bring] a motion which identifies a valid basis, legal and factual, upon which the Court concludes that vacating the award is appropriate under the circumstances, the Court will vacate and that will terminate and seize whatever benefits we have.... But I'm entitled to by—we're—for 658-22 says, "shall" not "may." This is one of those kinds of rules are black and white [sic]. And so I'm entitled to the affirmation of the award today without prejudice to whatever [the Chungs' counsel] thinks he has or doesn't have.

In response, the Chungs' counsel argued that in the interest of judicial economy, it would be better for the circuit court to wait to rule on the Bennetts' Motion to Confirm until the Chungs filed their motion to vacate, even if no motion to vacate was currently pending. Specifically, the Chungs' counsel voiced his concern that an order granting the Bennett's Motion to Confirm would trigger appellate deadlines that would differ from the deadlines triggered by a subsequent order on the Chungs' motion to vacate.

While acknowledging the Chungs' argument regarding judicial economy, the circuit court nevertheless concluded:

[T]he court is guided by 658-22. And, to me, it's very clear that it requires me [sic]. It says, "shall issue a confirming order unless the award is modified or corrected pursuant to those sections or is vacated pursuant to Section 658A-23.["]

The award was issued February 11th. The motion was filed February 17th. The hearing is set today. [The Chungs] had about 30 days to file. If a motion to vacate had been filed and was currently pending before the Court, then I—it would be very clear to me that I would look, also, to 658A-23. And at that point the concerns of judicial economy would, to me, seem to dictate that there just be one hearing on both motions. But at this point the motion to vacate is being discussed just purely in hypothetical terms and it has not been filed yet, although [the Chungs] have represented that they are going to file one.

Given my reading of 658-22, the Court's—my decision is going to be to grant the confirmation of the award. I think I'm constrained by this particular section which I agree with the movants is very clear that I shall issue the confirming order. So for those reasons and other reasons indicated in the moving papers, the Court is going to grant the motion.

On April 6, 2015, the circuit court entered a written order granting the Bennetts' Motion to Confirm (Order Granting Motion to Confirm), and a final judgment (Judgment of Confirmation) in favor of the Bennetts. The Chungs did not appeal the Order Granting Motion to Confirm or the Judgment of Confirmation.

B. Circuit Court Proceedings and First Appeal—Motion to Vacate

On May 13, 2015, the Chungs filed, within the statutory ninety-day window provided by HRS § 658A-23(b), a motion to vacate the arbitration award (Motion to Vacate).⁴ Therein, the Chungs alleged evident partiality by the arbitrator. The Bennetts filed a...