84 Hawai'i 162, Han v. Yang, 17328

• Decision Date: 28 January 1997
• Docket Number: No. 17328,17328
• Citation: 931 P.2d 604
• Parties: 84 Hawai'i 162 Pil Dong HAN and Young Sun Han, Plaintiffs-Appellees, v. Min Ho YANG dba Brothers Realty, Defendant-Appellant, and Han Kun Cho, John Doe 1-10, Doe Corporation 1-10 and Doe Partnership 1-10, Defendants.
• Court: Hawaii Court of Appeals

Page 604

931 P.2d 604

84 Hawai'i 162

Pil Dong HAN and Young Sun Han, Plaintiffs-Appellees, v. Min Ho YANG dba Brothers Realty, Defendant-Appellant and Han Kun Cho, John Doe 1-10, Doe Corporation 1-10 and Doe Partnership 1-10, Defendants.

No. 17328.

Intermediate Court of Appeals of Hawai'i.

Jan. 28, 1997.

Syllabus by the Court

A real estate broker brought two parties together to negotiate the sale of a home. The broker represented both the buyer and the seller, apparently without securing a written waiver from either party. After agreeing on a purchase price, the buyer and seller signed a contract for the purchase of the home. The seller's wife, who was in Japan when the contract was signed, ultimately refused to sell her interest in the property.

The buyer threatened to sue the seller unless the deal was closed immediately. At the urging of the broker, the seller then signed a handwritten promissory note agreeing to pay the buyer $22,000 in exchange for cancellation of the Deposit Receipt, Offer and Acceptance. After both parties cancelled escrow, the seller repudiated the promissory note and the buyer then sued both the seller and broker for breach of contract, misrepresentation, and unfair or deceptive trade practices, and sued the broker for breach of fiduciary duty.

A unanimous jury verdict was returned in favor of the buyer, awarding special, general, and punitive damages against the seller and the broker. The trial court later awarded the buyer treble damages in place of the punitive damages against the broker.

The broker's subsequent motion for judgment notwithstanding the verdict was denied. The broker appealed, but the seller did not.

This decision holds that: (1) the trial court correctly refused to enforce the settlement agreement; (2) evidence of a settlement offer was properly excluded; (3) the trial court did not err in admitting evidence of other real estate and loan transactions; (4) factual assertions in a complaint are judicial admissions; (5) the trial court did not abuse its discretion when it prevented the broker from using a complaint that was not introduced into evidence; and (6) the trial court improperly awarded quadruple damages.

Accordingly, the judgment is affirmed, except that portion awarding treble damages against the broker is vacated and remanded with instructions to enter an amended judgment awarding the buyer treble damages against the broker in the same amount of $70,140, but with the conditions specified in and consistent with this opinion.

Walter K. Horie and Anthony H. Yusi (Horie & Yusi, of counsel), on the brief, Honolulu, for Defendant-Appellant.

Ronald G.S. Au and Connie G.W. Meredith, on the brief, Honolulu, for Plaintiffs-Appellees.

Before BURNS, C.J., and ACOBA and KIRIMITSU, JJ.

KIRIMITSU, Judge.

In this breach of contract, misrepresentation, and breach of fiduciary duty case, Defendant-Appellant Min Ho Yang (Yang) ¹ appeals from the First Circuit Court's June 17, 1993 judgment, pursuant to a jury verdict, awarding compensatory, punitive, and treble damages to Plaintiffs-Appellees Pil Dong Han and Young Sun Han (collectively, Han). ² We affirm the June 17, 1993 judgment, except that portion awarding treble damages against Yang, which we vacate and remand for action consistent with this opinion.

I. BACKGROUND

A. Summary Of The Facts

Defendant Han Kun Cho (Cho) and his wife owned a house on Namau'u Drive in the Pu'unui District of Liliha in Honolulu. Cho wanted to buy a home in the Kahala area and hired his long-time friend, Yang (doing business as Brothers Realty), to sell the Namau'u Drive property. Cho was a former employer of Yang.

In October 1989, Yang found a replacement home for Cho in Kahala. At that point, Yang introduced Cho to Han. (Han was also a close friend of Yang and had previously invested in real estate with Yang.) Although Han was also a long-time friend of Yang, Yang apparently failed to secure written waivers from either Han or Cho that would resolve any conflict of interest resulting from Yang's dual representation role. Paragraph four of Han's complaint says that he was told about the dual representation, but at trial Han testified that he was unaware of the dual representation, and the trial court prevented Yang from showing paragraph four to Han during Han's testimony.

After inspecting the Namau'u Drive property, Han agreed to purchase the property for $375,000, conditioned upon Han's ability to obtain financing. ³ On October 25, 1989, Yang gave Cho a Deposit Receipt, Offer and Acceptance (DROA) on behalf of Han. On the same day, Yang prepared a DROA for Cho to acquire the property in Kahala. Closing on the Namau'u Drive property was scheduled for January 2, 1990. On February 7, 1990, Han secured a loan commitment.

Later that summer there was a strange turn of events. Yang testified that Cho's wife, who was in Japan when the DROA was signed, voiced objections for the first time to the sale of the Namau'u Drive property. Cho's wife had not signed the DROA and Cho and his wife held the Namau'u Drive property as tenants by the entirety. She testified that she refused to sell the Namau'u Drive property because it was "cool," convenient, and "comfortable."

Shortly thereafter, Han hired an attorney and demanded that the Namau'u Drive deal be closed immediately. Yang then discussed the dispute with Cho and Han and convinced both parties to settle the case for $22,000. On August 8, 1990, Cho signed a handwritten promissory note agreeing to pay Han $22,000 for cancellation of the DROA. Cho and Han subsequently submitted an "Escrow Cancellation" form to the Long & Melone Escrow, Limited escrow company in October 1990. Cho subsequently rejected and repudiated the note. In February 1991, Yang gave Han a check for $10,000 (the amount of Yang's commission previously paid by Han), which Han did not cash on advice of counsel.

B. Procedural History

On April 12, 1991, Han sued both Cho and Yang for breach of contract, misrepresentation, and unfair or deceptive trade practices, and sued Yang for breach of fiduciary duty. On May 14, 1993, Yang filed a motion in limine to enforce the August 8, 1990 settlement agreement. The trial court orally denied the motion after a May 18, 1993 hearing and entered its written order on June 1, 1993.

On May 25, 1993, the jury returned the following unanimous special verdict: (1) there was no valid and enforceable DROA contract between Cho and Han; (2) both Cho and Yang made at least one misrepresentation of material fact to Han; and (3) Yang breached his fiduciary duty and engaged in unfair or deceptive practices. The jury awarded Han special, general, and punitive damages. ⁴ The trial court then, pursuant to an oral motion made immediately after the jury verdict, issued an order on June 17, 1993 granting Han treble damages against Yang.

Yang moved for Judgment Notwithstanding the Verdict (JNOV) on June 7, 1993. On July 29, 1993, the trial court entered its order denying the motion.

On June 25, 1993, Han filed a motion seeking attorney's fees and costs from Cho and Yang. On July 14, 1993, the trial court partially granted the motion, awarding attorney's fees and costs against Yang but denying attorney's fees against Cho.

Yang's timely notice of appeal was filed on July 30, 1993.

II. DISCUSSION

Yang now appeals the denial of his motion for mistrial, the order denying his motion for JNOV, ⁵ the order granting in part and denying in part Han's motion for attorney's fees and costs, ⁶ and the trial court's June 17, 1993 judgment. He argues five points of error on appeal: (1) the trial court should have enforced the settlement agreement between the parties; (2) the trial court erred in excluding evidence of Cho's settlement offer; (3) the trial court erred by admitting irrelevant or prejudicial evidence of other real estate and loan transactions between Yang and Cho; (4) the trial court should have permitted Han to introduce information from Han's complaint as an admission by a party opponent; and (5) the trial court mistakenly awarded quadruple instead of treble damages.

We address each argument in order.

A. Enforcement Of The Settlement Agreement

Yang first argues that the trial court should have enforced the settlement agreement between Cho and Han. He argues that "there is no question that the parties had a meeting of minds [sic] with regard to the settlement of the case." He bases this contention on Cho's August 8, 1990 agreement to pay Han $22,000 in exchange for the August 10, 1990 submission of a joint cancellation instruction to the escrow company. We disagree.

1. Standard of Review

"The trial court's determination that [a] ... settlement agreement was enforceable [or unenforceable] is a conclusion of law reviewable de novo." Sylvester v. Animal Emergency Clinic of Oahu, 72 Haw. 560, 565, 825 P.2d 1053, 1056 (1992) (citing Strouss v. Simmons, 66 Haw. 32, 657 P.2d 1004 (1982); Molokoa Village Dev. Co. v. Kauai Elec. Co., 60 Haw. 582, 593 P.2d 375 (1979); Wiginton v. Pacific Credit Corp., 2 Haw.App. 435, 634 P.2d 111 (1981)).

2. Settlement Agreements

A settlement agreement " 'is an agreement to terminate, by means of mutual concessions, a claim [that] is disputed in good faith or unliquidated. ⁷ It is an amicable method of settling or resolving bona fide differences or uncertainties and is designed to prevent or put an end to litigation.' " Id. at 565-66, 825 P.2d at 1056 (quoting 15A Am.Jur.2d Compromise and Settlement § 1 (1976)) (footnote omitted).

The public policy of our appellate courts "favors the resolution of controversies through compromise or settlement rather than by litigation." Id. at 566, 825 P.2d at 1056 (citing Dowsett v. Cashman, 2 Haw.App. 77, 82-83, 625 P.2d 1064, 1068 (1981)). Settlement agreements facilitate our appellate courts' "policy to foster amicable, efficient, and inexpensive resolutions of disputes." Id., at 566, 825 P.2d at 1057. Judicial administration,...