Kelepolo v. Fernandez

Citation468 P.3d 196
Decision Date30 June 2020
Docket NumberSCWC-18-0000138
Parties Annette M. KELEPOLO, Respondent/Plaintiff-Appellee, v. Graciano Kehopu FERNANDEZ, Nancy Fernandez, Grace Lyn W. Fernandez-Chisholm, Damien K. Kaina, Jr., Frank I. Kaina, Joseph T. Kaina, Patrick Kaina, Tamara Smith-Kaukini, Petitioners/Defendants-Appellants.
CourtSupreme Court of Hawai'i

F. Steven Pang, John Winnicki, Honolulu, for petitioners

Matson Kelley, Wailuku, Alex Wilkins for respondent

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

OPINION OF THE COURT BY POLLACK, J.

This case, brought as a petition for writ of mandamus, asks us to review whether the Intermediate Court of Appeals (ICA) manifestly abused its discretion in setting the amount of a supersedeas bond as a condition of staying the enforcement of a judgment and writ of possession pending appeal. Upon review of relevant court rules and precedent, we conclude that petitioners have demonstrated a manifest abuse of discretion by the ICA as it did not apply relevant factors in setting the bond amount. Accordingly, we grant the petition and direct the ICA to re-determine the supersedeas bond amount in a manner consistent with this opinion.

I. BACKGROUND AND PROCEDURAL HISTORY
A. Background

This case arises from a dispute over real property located in Hana on the island of Maui (the property) where petitioners Graciano Kehopu Fernandez, Nancy Fernandez, Grace L. W. Fernandez-Chisholm, Damien K. Kaina Jr., Frank I. Kaina, Joseph T. Kaina, Patrick Kaina, and Tamara Smith-Kaukini (collectively, "Petitioners") reside with their families. Petitioners maintain that they inherited the property from their uncle. Respondent Annette M. Kelepolo, who is related to Petitioners through the first marriage of their grandmother, claims title to the property based on a quitclaim deed that was executed by power of attorney for Petitioners’ uncle on the day that he died in 2007. The deed was recorded in the Bureau of Conveyances of the State of Hawai‘i on February 16, 2007.

On August 18, 2016, Kelepolo filed a complaint for ejectment against Petitioners in the Circuit Court of the Second Circuit (circuit court).1 Kelepolo alleged that she charged Petitioners $120.00 in monthly rent to be paid on the 15th of each month--$100.00 would go towards real property taxes and $20.00 would go towards the water bill. Kelepolo contended that Petitioners failed to pay rent for one year and had thereby breached their oral contract.2

Petitioners filed an answer to Kelepolo's complaint along with a counterclaim. Petitioners’ counterclaim contested Kelepolo's claim to the property, alleging that the quitclaim deed was procured by fraud and must be rescinded and cancelled. Petitioners contended that, when they agreed to pay for the real property taxes and water bill at a May 2015 meeting, Kelepolo appeared to acknowledge Petitioners’ rights to the property. Petitioners maintained that after making several contributions to the "fund," they learned that Kelepolo was overstating the real property tax amount and collecting the funds into her own bank account instead of an account that was to be set up to collect the contributions for the property.

Kelepolo thereafter filed a motion for summary judgment as to all claims, arguing that Petitioners’ claims to the property were based on, inter alia, "mere speculation." Following a hearing on the motion,3 the circuit court granted summary judgment in favor of Kelepolo, concluding that Petitioners failed to establish a cognizable claim to the subject property through adverse possession and did not present any admissible evidence to support their assertion that the quitclaim deed was procured by fraud. The court's summary judgment order determined title to the property to be in Kelepolo and, alternatively, that Kelepolo was entitled to ownership through adverse possession; the court granted Kelepolo a judgment of possession and a writ of possession.4 Kelepolo waived any right to seek money damages and none were awarded. Judgment was entered in favor of Kelepolo, and Petitioners appealed to the ICA.

B. PetitionersMotions for Stay Pending Appeal

While the appeal was pending, Petitioners moved in the circuit court for a stay of proceedings to enforce the judgment pursuant to Hawai‘i Rules of Civil Procedure (HRCP) Rule 62 and Hawai‘i Rules of Appellate Procedure (HRAP) Rule 8. Petitioners contended that Kelepolo was taking steps to enforce the judgment and eject them from the property. Kelepolo opposed Petitionersmotion for a stay and argued that the motion should be denied on the merits and, alternatively, that any proposed stay should require a supersedeas bond in the amount of $578,000, which consisted of the purported assessed value of the property ($558,000) and Kelepolo's estimated costs of maintenance, water, electricity, and property taxes ($20,000).

The motion was heard on May 24, 2018. The circuit court ruled that the balance of irreparable harm and the public interest supported Petitioners’ request for a stay, and the court required Petitioners to post a supersedeas bond in the amount of $578,000. The bond amount was required to be posted within 30 days of the court's order.

The Court does find that balancing public interests and irreparable harm, the Court is going to grant Defendantsmotion to stay. The Court will also, however, order that Defendants post a supersedeas bond.
Though Defendants assert that Plaintiff is not entitled to a supersedeas bond as this case does not involve a monetary judgment, the determination of the amount of the supersedeas bond, however, is committed to the sound discretion of the Court. And the inherent discretion of the Court also allows for flexibility in determining the nature and extent of the bond.
The Court finds that the lack of a monetary judgment is due to Plaintiff's flexibility in waiving her claim of monetary damages for unpaid rent and water consumption for many years. Despite this waiver, the Court finds that Plaintiff still has the rights to the property that warrant the Court's protection.
Therefore, in its discretion, the Court will order Defendants to post a supersedeas bond in the amount of $578,000. This amount is based on the assessed value of the property and the estimated costs of maintenance, water, electricity, and taxes for two years.
Accordingly, the Court's going to grant Defendants’ motion, will order Defendants post the supersedeas bond in that amount. Within 30 days of filing the order, that's the due date for the bond to be posted.

(Emphasis added.)

Petitioners subsequently filed a motion for a stay in the ICA, arguing that the circuit court abused its discretion in imposing a supersedeas bond, as a stay should have been granted without bond because no monetary damages were awarded, and that the amount was exorbitant and not related to the potential loss that Kelepolo could claim as a result of the stay.5 The ICA granted a stay on the condition that it would be effective upon the ICA's approval of a supersedeas bond in the amount of $250,000 (stay order). The ICA stated that the amount was based on the property's tax assessed value and "other factors and circumstances in the case":6

Upon consideration of ... the papers in support and in opposition, and the record, including evidence of the subject property's tax-assessed value and other factors and circumstances in the case, it appears that a supersedeas bond in the amount of $250,000 would adequately secure ... Kelepolo's interest pending appeal.
Therefore, IT IS HEREBY ORDERED that the motions for stay are granted in part. A stay of further enforcement of the Second Circuit Court's Judgment for Possession and Writ of Possession is granted on the condition that Appellants submit to this court for its approval a supersedeas bond in the amount of Two-Hundred-Fifty Thousand and no/100 Dollars ($250,000). The stay will take effect upon the approval of the supersedeas bond by this court.

(Bold font omitted and emphasis added.) The ICA's stay order did not provide a date by which the supersedeas bond was required to be posted and did not limit Kelepolo's ability to execute the judgment prior to Petitioners posting the bond. Petitioners filed a motion for reconsideration or modification of the ICA's stay order, requesting, inter alia, a reduction in the bond amount and a reasonable time to post the bond; the ICA denied the motion.7

C. PetitionersApplication for Writ of Certiorari or, in the Alternative, Petition for Writ of Mandamus

Petitioners subsequently filed an "Application for Writ of Certiorari or in the Alternative Petition for Writ of Mandamus" (Petition) from the ICA's stay order and the subsequent order denying the motion for reconsideration. Relevant to the mandamus relief requested, Petitioners argue that the ICA manifestly abused its discretion in setting the $250,000 bond amount because it did not bear any rational relation to any damages that Kelepolo may incur as a result of a delay in enforcing the judgment while the appeal is pending. Petitioners suggest that the amount of the supersedeas bond should not exceed $8,000 (the monthly rent amount ($120) for each of the five Petitioners who reside at the property for 12 months), which they contend is an amount correlating to the anticipated duration of the appeal.

They also argue that the ICA abused its discretion because it did not allow Petitioners a reasonable amount of time to post the supersedeas bond. Petitioners assert that "[s]etting the amount of the bond without a temporary stay to secure the bond defeated the purpose of the bond." Finally, Petitioners contend that mandamus relief is appropriate because the ICA has already denied their motion for reconsideration, they have been unable to post a bond in the amount required by the ICA, and they are faced with immediate eviction if a stay is not granted.

Accordingly, Petitioners ask that this court grant their Petition and direct the ICA to modify its stay order to...

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