76 Hawai'i 396, S. Utsunomiya Enterprises, Inc. v. Moomuku Country Club

• Decision Date: 22 August 1994
• Docket Number: No. 16751,16751
• Parties: 76 Hawai'i 396 S. UTSUNOMIYA ENTERPRISES, INC., a Hawai'i Corporation, Plaintiff/Third-Party Plaintiff, v. MOOMUKU COUNTRY CLUB, a Hawai'i partnership, Chuck Maples and Les Hirahara, Defendants/Third-Party Plaintiffs-Appellants, and James L. Watson, D.D.S., Defendant, and Terry S. Hand, dba Hand Properties; Mary Anne Bruno and Akie Yoshikawa, Third-Party Defendants, and Japan Grand Prix (Hawai'i), Ltd., Intervenor-Appellee.
• Court: Hawaii Supreme Court

Page 501

879 P.2d 501

76 Hawai'i 396

S. UTSUNOMIYA ENTERPRISES, INC., a Hawai'i Corporation, Plaintiff/Third-Party Plaintiff, v. MOOMUKU COUNTRY CLUB, a Hawai'i partnership, Chuck Maples and Les Hirahara, Defendants/Third-Party

Plaintiffs-Appellants,

and

James L. Watson, D.D.S., Defendant,

and

Terry S. Hand, dba Hand Properties; Mary Anne Bruno and

Akie Yoshikawa, Third-Party Defendants,

and

Japan Grand Prix (Hawai'i), Ltd., Intervenor-Appellee.

No. 16751.

Supreme Court of Hawai'i.

Aug. 22, 1994.

David Schulmeister and Cynthia M. Johiro of Cades, Schutte, Fleming & Wright, Honolulu, for appellants on the application.

Paul R. Mancini, Matthew V. Pietsch and Lea O. Hong, of Case & Lynch, Kahului, for appellee in opposition.

Before MOON, C.J., and KLEIN, LEVINSON, NAKAYAMA and RAMIL, JJ.

MOON, Chief Justice.

In S. Utsunomiya Enterprises, Inc. v. Moomuku Country Club, 75 Haw. 480, 866 P.2d 951, reconsideration denied, 76 Hawai'i 247, 871 P.2d 795 (Sup.1994), this court ruled in favor of appellants Moomuku Country Club, Chuck Maples, and Les Hirahara (collectively, Moomuku) and against appellee Japan Grand Prix (Hawai'i), Ltd. (JGP). Moomuku now seeks awards of attorneys' fees of $19,885.00, incurred in bringing the appeal, and $28,390.00, incurred at the trial level.

Based on the reasons set forth below, we award the $19,885.00 in attorneys' fees incurred on appeal, but deny the application for fees incurred at the trial level without prejudice to an application for the trial-level fees on remand.

I. BACKGROUND

The facts of this complex case are fully set forth in Utsunomiya, 75 Haw. at 484-92, 866 P.2d at 956-59. For purposes of our discussion regarding Moomuku's application for attorneys' fees, we reiterate only the basic background.

Utsunomiya, as purchaser, and Moomuku, as seller, signed a letter of intent with respect to certain real property located on the island of Maui. A dispute arose between the parties regarding the purpose of Utsunomiya's $200,000.00 deposit. Utsunomiya subsequently declared that it was rescinding the letter of intent and demanded the return of its deposit. Moomuku refused, and Utsunomiya filed suit. Pursuant to Hawai'i Revised Statutes (HRS) § 634-51 (1985), Utsunomiya also filed a lis pendens on the property. Moomuku subsequently sold the property to JGP. The sale occurred via a land purchase agreement and a limited warranty deed. Following the sale, JGP learned of Utsunomiya's lis pendens. JGP eventually intervened in the suit between Utsunomiya and Moomuku and filed a motion to expunge Utsunomiya's lis pendens. JGP also crossclaimed against Moomuku, alleging that the lis pendens was "contrary to promises, warranties and representations made by [Moomuku] in the Limited Warranty Deed ... which [Moomuku] delivered to JGP, in the Land Purchase Agreement and otherwise." JGP prevailed on the cross-claim at summary judgment and the trial court ordered judgment against Moomuku in the amount of $97,253.83. Moomuku appealed, and this court vacated the judgment, holding that because the lis pendens was invalid and should have been expunged, the trial court erred in granting JGP's motion for summary judgment on the crossclaim. ¹ Id. at 516, 866 P.2d at 968.

II. DISCUSSION

A. Jurisdiction

Relying on Kaneshige v. Rosehill, 52 Haw. 124, 471 P.2d 529 (1970), JGP argues that this court has no jurisdiction to award attorneys' fees incurred on appeal. Indeed, in Kaneshige, a case involving a lease containing an attorneys' fees provision, this court held that it was without original jurisdiction to award attorneys' fees incurred on appeal. Kaneshige relied on Bank of Hawaii v. Char, 43 Haw. 316 (1959). The Char court reasoned that enforcement of a contractual provision for attorneys' fees is an exercise of original (not appellate) jurisdiction. The court noted that its original jurisdiction was limited to areas set forth in Revised Laws of Hawai'i (R.L.H.) § 214-4 (1955) (now incorporated into HRS § 602-5 (1985)), which did not specifically include the power to award attorneys' fees incurred on appeal. Char, 43 Haw. at 320.

We note, however, that neither Char nor Kaneshige referred to R.L.H. § 214-6 (1955) (now incorporated into HRS § 602-5(7) (1985)), which grants to this court jurisdiction and power "[t]o make and award such judgments, decrees, order and mandates ... as may be necessary to carry into full effect the powers which are ... given to it by law [.]" HRS § 602-5(7) (emphasis added).

We note that HRS § 607-14 (Supp.1993) ² provides in pertinent part:

Attorneys' fees in actions in the nature of assumpsit, etc. In all the courts, in all actions in the nature of assumpsit and in all actions on a promissory note or other contract in writing that provides for an attorneys' fee, there shall be taxed as attorneys' fees, to be paid by the losing party ... a fee that the court determines to be reasonable ... provided that this amount shall not exceed twenty-five per cent of the judgment.

....

The above fees provided for by this section shall be assessed on the amount of the judgment exclusive of costs and all attorneys' fees obtained by the plaintiff, and upon the amount sued for if the defendant obtains judgment.

(Emphasis added.)

Further, Hawai'i Rules of Appellate Procedure (HRAP) Rule 39(d) (1984) states in pertinent part:

(d) Bill of Costs; Objections.... A party who desires an award of costs and attorneys' fees shall state them in an itemized and verified bill of costs and fees, together with a statement of authority for each category of item, filed with the clerk, with proof of service, no later than 14 days after entry of judgment.

(Emphasis added.)

Given section 607-14's provision for fees that may be sought "in all the courts," combined with HRAP 39(d) and HRS § 602-5(7), we conclude that this court has jurisdiction to award reasonable attorneys' fees incurred on appeal, and we may do so if the requirements of HRAP 39(d) and HRS § 607-14 are met. We therefore overrule Kaneshige and Char.

B. Moomuku's Application for Fees on Appeal

We first examine whether Moomuku has met the requirements of HRAP 39(d). Moomuku timely submitted and properly served an itemized and verified listing of hours and corresponding rates incurred in preparing the appeal and cited HRS § 607-14 as authority for its motion; therefore, we conclude that Moomuku has met the requirements of Rule 39(d). Under HRS § 607-14, however, Moomuku would be entitled to an award of attorneys' fees only if there is an applicable "contract in writing" or if the action was "in the nature of assumpsit." ³ We therefore next examine the applicability of HRS § 607-14 to the facts of this case.

1. "A Contract in Writing"

The land purchase agreement between Moomuku and JGP contained a provision for fees; however, upon delivery, the land purchase agreement merged into the limited warranty deed. Utsunomiya, 75 Haw. at 515, 866 P.2d at 968. "[T]he doctrine of merger ... disallows any recovery on the contract covenants once the grantee accepts a deed, so that the deed's covenants (if any) take up just when the contracts leave off." R. Cunningham, W. Stoebuck, & D. Whiteman, The Law of Property § 11.13, at 810 (1984) [hereinafter Cunningham]; Clark v. Cypress Shores Development Co., 516 So.2d 622, 626 (Ala.1987) ("[t]he terms in the deed which follow[ ] the contract of sale become the sole memorial of the agreement which was once contained in the contract of sale.... [T]he deed controls as the contract, rather than the terms of the prior sales contract.); Simpson v. Johnson, 100 Idaho 357, 361 n. 1, 597 P.2d 600, 604 n. 1 (1979) ("the purchaser's rights are founded in the deed covenants, not the executed contract"); see also 6A R. Powell & P. Rohan, Powell on Real Property p 881[h], at 81-185 (1994) [hereinafter Powell] ("[a]fter receiving the deed, the purchaser must look for protection promised by the grantor under the deed rather than asserting the previously existing contractual duty"). Therefore, Moomuku cannot rely on the provision for fees in the land purchase agreement. Consequently, there is no "contract in writing" upon which an award of attorneys' fees could be made; we therefore next examine whether the action was "in the nature of assumpsit."

2. "In the Nature of Assumpsit"

JGP argues that "a deed is not a contract[;] [t]hus, even if damages are sought from breach of covenants in a deed, this is not an action in the nature of assumpsit." This court has defined "assumpsit" as "a common law form of action which allows for the recovery of damages for the non-performance of a contract, either express or implied, written or verbal, as well as quasi contractual obligations." Schulz v. Honsador, Inc., 67 Haw. 433, 435-36, 690 P.2d 279, 281 (1984) (citation omitted); Coll v. McCarthy, 72 Haw. 20, 32, 804 P.2d 881, 888 (1991); see also Larsen, 74 Haw. at 52, 837 P.2d at 1298 ("Black's Law Dictionary ... defines [assumpsit] in various ways, all of which have some relationship to a promise or engagement.").

In Honsador, this court noted that the legislature changed the language in the original version of HRS § 607-14 from "all actions of assumpsit" to "all actions in the nature of assumpsit." 67 Haw. at 435, 690 P.2d at 281-82 (emphasis in original). The court held that "[a]n action for breach of warranty clearly is in the nature of assumpsit, inasmuch as a warranty arises from the contractual relationship between buyer and seller, and a breach of warranty constitutes a breach of contract." Id. at 436, 690 P.2d at 282 (citing Au v. Au, 63 Haw. 210, 219, 626 P.2d 173, 180 (1981)). We note, however, that the action in Honsador combined assumpsit (breach of warranty) and non-assumpsit (negligence) claims. In concluding that the action was "in the nature of assumpsit," the court reasoned that "the nature of a claim" is "determined from the substance of the entire pleading, the nature of the grievance, and the...