Arquette v. State

Decision Date14 December 2012
Docket NumberNo. SCWC–11–0000416.,SCWC–11–0000416.
Parties Alden James ARQUETTE, Petitioner/Plaintiff–Appellant/Cross–Appellee, v. STATE of Hawai‘i, Stephen H. Levins, and Michael J.S. Moriyama, Respondents/Defendants–Appellees/Cross–Appellants.
CourtHawaii Supreme Court

Eric A. Seitz, Della Au Bellati, Ronald N.W. Kim, for petitioner.

Dennis K. Ferm, Caron M. Inagaki, for respondents.

NAKAYAMA, Acting C.J, ACOBA, McKENNA, and POLLACK, JJ., and Circuit Judge CRANDALL, in Place of RECKTENWALD, C.J., Recused.

Opinion of the Court by ACOBA, J.

We hold, first, that a plaintiff may bring an action in tort for the maintenance of a malicious prosecution as well as for the initiation of a malicious prosecution. Second, we hold that the Circuit Court of the First Circuit (the court)1 properly granted the December 24, 2009 motion for summary judgment filed by Respondents/DefendantsAppellees/Cross–Appellants State of Hawai‘i (the State), Stephen H. Levins (Levins), and Michael J.S. Moriyama (Moriyama) (collectively, Respondents) with respect to the claim of Petitioner/PlaintiffAppellant/Cross–Appellee Alden James Arquette (Petitioner) for initiation of a malicious prosecution, because there was no genuine issue of material fact that Moriyama had probable cause to file a complaint against Petitioner and that Moriyama did not act with malice. Third, we conclude that although the court did not recognize a cause of action for maintenance of a malicious prosecution, the court properly granted Respondents' April 12, 2010 motion for summary judgment, because there was no genuine issue of material fact that Moriyama maintained the prosecution with probable cause and without malice. Fourth, Hawai‘i Revised Statutes (HRS) § 487–1 (2008)2 does not set forth a standard of care in a claim for negligence. Fifth, we reaffirm that when denying costs to the prevailing party, the court must state its reasons for doing so on the record, and therefore the court erred in failing to state its rationale for granting in part Petitioner's July 28, 2010 Motion for Review and/or to Set Aside Taxation of Costs (Motion for Review of Costs). Finally, we conclude that the Intermediate Court of Appeals (ICA) did not abuse its discretion in denying Petitioner's November 29, 2011 Motion for Recusal of Substitute Judge, the Honorable Associate Judge Katherine G. Leonard (Motion for Recusal), because the facts as alleged were insufficient to warrant her recusal.

For the reasons stated herein, we affirm in part and vacate in part the court's April 19, 2011 Amended Final Judgment. We affirm the Amended Final Judgment with respect to the court's March 29, 2010 and June 30, 2010 orders granting summary judgment, but for the reasons stated herein, and we vacate the court's Amended Final Judgment with respect to its August 23, 2010 Order Granting Plaintiff's Motion for Review of Costs (Order Granting Costs) and remand for review of Respondents' taxation of costs. Therefore, we affirm the August 10, 2012 judgment of the ICA filed pursuant to its July 12, 2012 Summary Disposition Order, but based on the reasons stated herein.3 Additionally, we affirm the ICA's December 6, 2011 order denying Petitioner's Motion for Recusal.


Respondents initiated an action on July 19, 2004 (2004 action), against Petitioner and others, based on an investigation conducted by the Office of Consumer Protection (OCP). The complaint alleged, inter alia, that Petitioner had participated in a scheme to sell long term deferred annuities to elderly consumers through unfair or deceptive acts or practices in violation of HRS §§ 480–2 (1993 & Supp.2002)4 , 481A–3 (1993)5 , and other statutory provisions. Respondents identified several individuals, including Limuel and Hazel Cherry (the Cherrys) and other consumers as the target of Petitioner's alleged scheme. As alleged by Respondents in the complaint, the scheme involved Petitioner, insurance agent Dan Fox, attorney Rodwin Wong and others using Rodwin Wong's name and law practice on mailings offering information about elder law to solicit consumers. Individuals who responded to the mailings were then contacted at their homes where Petitioner and others falsely identified themselves as " paralegals" working for Rodwin Wong in order to obtain personal and confidential financial information from them. Based on this information, Petitioner and others allegedly sold or attempted to sell long term annuities to these consumers while failing to provide them with information necessary to make decisions in their best interest and "engag[ing] in conduct which created a likelihood of confusion or of misunderstanding."

On December 21, 2005, the court6 filed an order granting Petitioner's motion for partial summary judgment on the claims pertaining to the Cherrys.7 On December 22, 2005, the court granted in part and denied in part, Petitioner's motion for summary judgment on the claims pertaining to the other consumers. On May 16, 2006, the court denied Moriyama's motion to continue trial, and ordered a severance of the trial as to Petitioner. Petitioner and Respondents stipulated to dismiss the remaining claims against Petitioner pursuant to Hawai‘i Rules of Civil Procedure (HRCP) Rule 41(a)(1)(B)8 and the court filed a Stipulation for Dismissal Without Prejudice on June 26, 2006.


Petitioner then filed the present action against Respondents on January 17, 2008. His allegations were based on the facts as recited above, and in his complaint, he alleged that Respondents were liable for malicious prosecution, negligent investigation, negligent failure to train and/or supervise, and punitive damages arising from the initiation and maintenance of the 2004 action. Petitioner sued Moriyama in his individual and official capacities for negligent investigation and malicious prosecution. In addition, Petitioner sued Levins in his individual and official capacities, as well as the State, for negligent failure to train and/or supervise Moriyama. Respondents answered the complaint on May 29, 2008, and discovery commenced in the case, including requests for production of documents, interrogatories, and depositions.

On December 24, 2009, Respondents filed their first motion for summary judgment on Petitioner's claims pertaining to the initiation of the prosecution in the 2004 action, and on February 22, 2010, Petitioner filed a memorandum in opposition. The court issued an order granting in part Respondents' first motion for summary judgment with respect to the negligent supervision and training claims against the State and Levins,9 as to the negligent investigation claim against Moriyama, and as to the initiation of a malicious prosecution claim against Moriyama. The court denied in part Respondents' first motion for summary judgment.10 The court noted that it had not ruled on Petitioner's claim that Moriyama was liable for maintaining a malicious prosecution.

On April 12, 2010, Respondents filed a second motion for summary judgment on Petitioner's claims pertaining to the maintenance of the prosecution in the underlying action. Petitioner filed his opposition to the motion on June 4, 2010, and Respondents filed a reply on June 10, 2010. On July 30, 2010, the court issued an order granting Respondents' second motion for summary judgment as to Petitioner's claims pertaining to the maintenance of the prosecution in the 2004 action.

On July 2, 2010, Respondents filed a Notice of Taxation of Costs pursuant to HRCP Rule 54(d) and HRS § 607–9 (1993). Respondents asked the court to require Petitioner to pay for the costs of mediation, of depositions of certain persons, and of the transcript of the first motion for summary judgment hearing. On July 13, 2010, Petitioner filed his Motion for Review of Costs. Respondents filed a Memorandum in Opposition to Petitioner's Motion for Review of Costs. On August 23, 2010, the court granted in part and denied in part Petitioner's Motion. The court entered final judgment in favor of Respondents on September 2, 2010 as to Moriyama in his official and individual capacities, Levins in his official and individual capacities, and the State.


Petitioner filed a Notice of Appeal to the ICA on May 18, 2011. On November 29, 2011, Petitioner filed his Motion for Recusal, requesting that Judge Leonard be recused from the ICA panel. The ICA entered an order denying Petitioner's Motion for Recusal on December 6, 2011.


On appeal to the ICA, Petitioner argued that the court erred (1) in concluding that Respondents established probable cause to initiate the 2004 prosecution of Petitioner, (2) in deciding that HRS § 487–1 does not create an actionable duty of care to support a claim for negligence, and (3) in holding that Hawai‘i does not recognize a tort action for maintaining a prosecution when probable cause to continue no longer exists. Respondents filed a Cross–Appeal to the ICA (Cross–Appeal), seeking a reversal of the court's Order Granting Costs in part.

With respect to Petitioner's first argument, the ICA upheld the court's grant of summary judgment, concluding that Respondents had probable cause to initiate a prosecution. Arquette v. State, No. CAAP–11–0000416, 128 Hawai'i 129, 2012 WL 2864352, at *1 (App. July 12, 2012) (SDO). According to the ICA, Respondents presented sufficient evidence to indicate they had an honest and reasonable belief that there was probable cause to initiate the 2004 action, based on a declaration by Moriyama and evidence that Petitioner's business cards and letterhead identified Petitioner as a paralegal for attorney Rodwin Wong, but listed the address and phone number of Dan Fox's insurance sales company which was, at the time, under investigation by the OCP. Id. at *2.

In addressing Petitioner's second argument, the ICA affirmed the court's determination that HRS § 487–1 did not create a private right of action. Id. at *3. The determinative factor, the ICA noted, was that there was no legislative history...

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