431 P.3d 236 (Hawai’i App. 2018), CAAP-16-0000679, Kekona v. Abastillas

Docket Nº:CAAP-16-0000679, CARP-16-0000782
Citation:431 P.3d 236, 143 Hawai‘i 333
Party Name:Benjamin Paul KEKONA and Tamae M. Kekona, Plaintiffs/Counterclaim-Defendants/Appellees, v. Paz F. ABASTILLAS, also known as Paz A. Richter, Robert A. Smith, personally, Defendants/Counterclaim-Plaintiffs/Appellees, and ROBERT A. SMITH, Attorney at Law, A Law Corporation, Standard Management, Inc., U.S. Bancorp Mortgage Company, an Oregon ...
Attorney:Terence J. O’Toole, (Lane Hornfeck and Michael F. O’Connor with him on the briefs), Honolulu, for Michael Bornemann, M.D. Fred Paul Benco, Honolulu, for Benjamin Paul Kekona and Tamae M. Kekona. Paz Feng Abastillas, pro se. Robert A. Smith, pro se.
Judge Panel:By: Ginoza, Chief Judge, Leonard and Reifurth, JJ.
Case Date:November 30, 2018
Court:Court of Appeals of Hawai'i, Intermediate
 
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Page 236

431 P.3d 236 (Hawai’i App. 2018)

143 Hawai‘i 333

Benjamin Paul KEKONA and Tamae M. Kekona, Plaintiffs/Counterclaim-Defendants/Appellees,

v.

Paz F. ABASTILLAS, also known as Paz A. Richter, Robert A. Smith, personally, Defendants/Counterclaim-Plaintiffs/Appellees,

and

ROBERT A. SMITH, Attorney at Law, A Law Corporation, Standard Management, Inc., U.S. Bancorp Mortgage Company, an Oregon Company, Western Surety Company, Sued herein as Doe Entity 1, Defendants-Appellees, and Michael Bornemann, M.D., Defendant-Appellant, and John Does 1-10; Jane Does 1-10; Doe Corporations 1-10; Doe Entities 1-10, Defendants Benjamin Paul Kekona and Tamae M. Kekona, Plaintiffs/Counterclaim-Defendants/Appellees,

v.

Paz F. Abastillas, also known as Paz A. Richter, Robert A. Smith, personally, Defendants/Counterclaim-Plaintiffs/Appellants,

and

Robert A. Smith, Attorney at Law, A Law Corporation, Standard Management, Inc., Michael Bornemann, M.D., U.S. Bancorp Mortgage Company, an Oregon Company, Western Surety Company, Sued herein as Doe Entity 1, Defendants-Appellees, and John Does 1-10; Jane Does 1-10; Doe Corporations 1-10; Doe Entities 1-10, Defendants

Nos. CAAP-16-0000679, CARP-16-0000782

Intermediate Court of Appeals of Hawai‘i

November 30, 2018

Editorial Note:

This decision has been designated as "Unpublished disposition." in the Pacific Reporter. See HI R RAP RULE 35

Page 237

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT (CIVIL NO. 93-3974-10).

On the briefs:

Terence J. O’Toole, (Lane Hornfeck and Michael F. O’Connor with him on the briefs), Honolulu, for Michael Bornemann, M.D.

Fred Paul Benco, Honolulu, for Benjamin Paul Kekona and Tamae M. Kekona.

Paz Feng Abastillas, pro se.

Robert A. Smith, pro se.

By: Ginoza, Chief Judge, Leonard and Reifurth, JJ.

MEMORANDUM OPINION

The litigation between the parties in these consolidated appeals has an extensive history. This lawsuit was brought in 1993 by Plaintiffs-Appellees Benjamin Paul Kekona and Tamae M. Kekona (collectively the Kekonas)1 against Defendants-Appellants Paz F. Abastillas (Abastillas), Robert A. Smith (Smith) and Michael Bornemann (Bornemann), among others. The Kekonas’ claims in this case relate to conduct by the defendants which prevented the Kekonas from obtaining recovery awarded to them in a prior lawsuit.

In the prior lawsuit, Standard Management, Inc. (SMI), a company run by Abastillas, filed suit against the Kekonas based on a partnership and business dispute related to operating a tram at Hanauma Bay (Hanauma Bay lawsuit). See Standard Mgmt., Inc. v. Kekona, 99 Hawai‘i 125, 53 P.3d 264 (2001). "In that suit, the Kekonas counterclaimed and also brought third-party claims against Abastillas and Smith. In May of 1993, a jury verdict was entered in favor of the Kekonas and against SMI, Abastillas and Smith, which included awards of specified damages. Within days of the Hanauma Bay lawsuit verdict: Abastillas transferred to Bornemann her interest in an apartment unit located on Nu‘uanu Avenue (Nu‘uanu property); and Abastillas and Smith transferred to Bornemann their primary residence, located in Kāne‘ohe (Kāne‘ohe property).

In October of 1993, the Kekonas initiated the instant lawsuit alleging causes of action for: Fraudulent Conveyances to Avoid Rightful Creditors (Count One); Hawaii RICO violations (Count Two); Conspiracy to Commit Fraudulent Conveyances (Count Three); and Illegal Notary (Count Four). This lawsuit alone has generated three separate trials and two prior sets of appeals. See Kekona v. Abastillas, No. 24051, 2006 WL 1562086 (Hawai‘i App. Jun. 8, 2006) (Mem. Op.) ( (Kekona I), vacated in part by Kekona v. Abastillas, 113 Hawai‘i 174, 150 P.3d 823 (2006) (Kekona II); Kekona v. Bornemann, 130 Hawai‘i 58, 305 P.3d 474, (App. 2013) (Kekona III), vacated in part by Kekona v. Bornemann, 135 Hawai‘i 254, 349 P.3d 361 (2015) (Kekona IV).

The current appeals by Bornemann in CAAP-16-0000679 and by Abastillas and Smith in CAAP-16-0000782, respectively, seek to contest the "Consolidated Third Amended Revised Final Judgment" filed on September 19, 2016 (9/19/16 Consolidated Judgment), by the Circuit Court of the First Circuit (circuit court)2 in favor of the Kekonas.

In CAAP-16-0000679, Bornemann appeals from the 9/19/16 Consolidated Judgment and also challenges the following orders entered during the most recent remand to the circuit court: an "Order Granting in Part Plaintiffs’ Motion to Amend Three Orders to Pay Over, and for Other and Further Relief," filed February 1, 2016; and an "Order Denying [Bornemann]’s Motion to Vacate Judgment Entered on February 5, 2008 or Any Judgment Entered on Remand, and to Dismiss this Case in its Entirety," filed on October 8, 2015. Bornemann asserts the 9/19/16 Consolidated Judgment should be vacated: (1) because a 1994 judgment in the Hanauma Bay lawsuit expired on September 2, 2014, pursuant to Hawaii Revised Statutes (HRS) § 657-5 (1993; Supp. 2001),3 and thus can no longer support the judgments in the instant case; (2) the Circuit Court erred by canceling deeds and returning the Kāne‘ohe property to Abastillas and Smith without affording Bornemann credit for equity; and (3) the circuit court erred by awarding both post-judgment statutory interest and punitive damages against Bornemann where the punitive damages award already reflected punishment for delayed payment to the Kekonas.

In CAAP-16-0000782, Abastillas and Smith appeal from the 9/19/16 Consolidated Judgment and also challenge an "Order Denying Motion of Defendants [Abastillas] and [Smith] to Vacate Judge Marks’ Amended Revised Judgment Filed February 26, 2001, and Dismiss This Case in Its Entirety with Prejudice Because Both the Hanauma Bay Judgment and Judge Marks’ Judgment in This Case Have Expired (Filed June 24, 2015)" entered on October 8, 2015. Abastillas and Smith contend the circuit court erred: (1) by applying Estate of Roxas v. Marcos, 121 Hawai‘i 59, 214 P.3d 598 (2009) retroactively to judgments in the Hanauma Bay lawsuit and the instant case; (2) because the 1994 judgment in the Hanauma Bay lawsuit expired pursuant to HRS § 657-5, and thus the fraudulent transfer claim also expired; (3) in determining Abastillas and Smith had unduly delayed and thus denying a motion to vacate certain judgments; and (4) in denying their request to make an oral motion under Hawai‘i Rules of Civil Procedure (HRCP) Rule 7(b)(1)4 at a proceeding on September 29, 2015.

For the reasons discussed below, we vacate the 9/19/16 Judgment only with respect to the canceling and voiding of deeds related to the Kāne‘ohe property. Otherwise, we affirm.

I. Background

A. Hanauma Bay Lawsuit

The Kekonas met Abastillas and Smith in the late 1980s. Standard Mgmt., 99 Hawai‘i at 127, 53 P.3d at 266. Abastillas, Smith, and the Kekonas entered into an agreement wherein the Kekonas would serve as passive investors in a partnership operating a tram at Hanauma Bay. Id. In 1989, SMI filed the Hanauma Bay lawsuit against the Kekonas alleging unlawful ouster from the Hanauma Bay partnership. Id. The Kekonas counterclaimed against SMI for breach of contract. Id. The Kekonas also filed a third-party complaint against Abastillas and Smith, alleging, inter alia, that the Kekonas were fraudulently induced into the partnership by Abastillas’ and Smith’s intentional misrepresentations. Id.

In May of 1993, a jury rendered a special verdict in favor of the Kekonas on the complaint, the counterclaim, and the third-party complaint.5 Id. The jury awarded the Kekonas: (1) $152,500 against SMI (consisting of special damages, general damages, and attorneys’ fees); (2) $200,000 in general damages, $25,000 in punitive damages, and $56,250 in attorneys’ fees against Abastillas; and (3) $270,000 in general damages against Smith. Id. On September 2, 1994, a Revised Judgment (1994 Hanauma Bay Judgment) was filed, which entered judgment for the Kekonas pursuant to the jury award and also for costs of $8,128.27.

On November 25, 1997, this court (ICA) issued a decision affirming the awards of $152,500 in general damages and attorneys’ fees against SMI and the $25,000 in punitive damages against Abastillas. Id. at 128, 53 P.3d at 267. However, this court remanded for a new trial on the issue of general damages against Abastillas for fraud and on the negligence claim against Smith. Id.

During remand, the parties engaged in various efforts to settle and then engaged in further litigation. Id. at 128-30, 53 P.3d at 267-69. Subsequently, the circuit court entered a "Final Judgment on Remand as to All Claims and All Parties" (1999 Hanauma Bay Judgment).[6] Id. at 130, 53 P.3d at 269. On February 28, 2001, this court affirmed the 1999 Hanauma Bay Judgment and an underlying amended stipulation.7 Id. at 138, 53 P.3d at 277.

Ultimately, the amount due to the...

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