Arquette v. State
| Decision Date | 12 July 2012 |
| Docket Number | No. CAAP–11–0000416.,CAAP–11–0000416. |
| Parties | Alden James ARQUETTE, Plaintiff–Appellant/Cross–Appellee, v. STATE of Hawai‘i, Steven H. Levins, Michael J.S. Moriyama, Defendants–Appellees/Cross–Appellants and John Does 1–25, Defendants. |
| Court | Hawaii Court of Appeals |
OPINION TEXT STARTS HERE
Appeal from the Circuit Court of the First Circuit (Civil No. 08–1–0118).
Eric A. Seitz, Della A. Belatti, Ronald N.W. Kim, on the briefs, for plaitniff-appellant/crossappellee.
Dennis K. Ferm, Caron M. Inagaki, Deputy Attorneys General, on the briefs, for defendants-appellees/crossappellants.
Plaintiff–Appellant/Cross–Appellee Alden James Arquette (Arquette) appeals from the Amended Final Judgment entered April 19, 2011 in the Circuit Court of the First Circuit 1 (circuit court). Judgment was entered in favor of DefendantAppellee/Cross–Appellant State of Hawai‘i (the State), Stephen H. Levins (Levins), and Michael J.S. Moriyama (Moriyama) (collectively, Defendants) pursuant to the (1) March 29, 2010 order granting Defendants' motion for summary judgment as to all claims arising from the initiation of its action against Arquette and the (2) June 30, 2010 order granting Defendants' motion for summary judgment as to all claims arising from the maintenance of the action against Arquette. Judgment was also entered pursuant to the August 23, 2010 “Order Granting [Arquette's] Motion for Review and/or To Set Aside Taxation of Costs” (Order re Taxation of Costs), in which the court denied some of the costs sought by Defendants.
Defendants cross-appeal from the Judgment's entry of the Order re Taxation of Costs.
On appeal, Arquette contends the circuit court erred when it determined that
(1) Defendants had sufficient evidence to establish probable cause to initiate prosecution against Arquette when there was a genuine issue of material fact as to that issue;
(2) Hawaii Revised Statutes (HRS) § 487–1 (2008 Repl.) did not create a private right of action for a claim of negligence against the State Department of Commerce and Consumer Affairs (DCCA) Office of Consumer Protection (OCP); and
(3) Hawai‘i limits the tort of malicious prosecution to the initiation, but not the maintenance, of a cause of action against an individual.
In its cross-appeal, Defendants contend the circuit court erred in denying several of Defendants' costs taxed by the Clerk in favor of Defendants as the prevailing party. Defendants assert the circuit court erred because the court failed to provide any reasoning for its ruling and Arquette had provided no evidence upon which the court could base its ruling.
Upon careful review of the record and the briefs submitted by the parties and having given due consideration to the arguments advanced and the issues raised by the parties, as well as the relevant statutory and case law, we resolve Arquette's and Defendants' points of error as follows:
(1) The circuit court did not err when it determined Defendants had sufficient evidence to establish probable cause to initiate prosecution against Arquette. “Probable cause does not depend on the actual state of the facts but upon the honest and reasonable belief of the party commencing the action.” Brodie v. Hawai‘i Auto. Retail Gasoline Dealers Ass'n, Inc., 2 Haw.App. 316, 318–319, 631 P.2d 600, 602–603 (1981), rev'd on other grounds by Brodie v. Hawai‘i Auto. Retail Gasoline Dealers Ass'n, Inc., 65 Haw. 598, 655 P.2d 863 (1982). As evidenced in his affidavit, OCP attorney Moriyama reasonably believed he had probable cause to initiate the complaint against Arquette and others:
10. [In or around November 2001], the various investigations [by OCP, Insurance Division, and SEB] indicated that Dan Fox (Fox) and other persons were selling large deferred annuities to elderly Hawaii consumers using the purported estate planning services of attorney Rodwin Wong (Wong) as a ruse to bait consumers and obtain specific information, such as institution names and account numbers, about the consumers' finances. The financial information obtained from consumers was used by [Fox] and others to identify and quantify specific assets of the consumers which were liquidated to purchase annuities. Information showed that the annuities had long deferral periods meaning that consumers would not receive the annuitized payouts before the deferral period expired and the annuities matured and that consumers might have to pay significant early withdrawal penalties if they needed cash before the early withdrawal penalty period expired. As a result, if a consumer was eighty (80) years old, and his or her annuity had a twenty (20)-year deferral period, the annuity would not mature until the consumer was one hundred (100) years old. Information obtained through the various investigations indicated that hundreds (100s) of Hawaii consumers, including elderly consumers, may have been victimized.
11 ... OCP actively investigated this scheme involving Arquette for two and one-half (21/2) years before litigation was commenced with the approval of [Moriyama's] supervisors.
....
24. Prior to filing the lawsuit, [Wong] personally told [Moriyama] during an interview that the fees purportedly collected for his estate planning services went directly to [Fox] and [Fox] then paid [Wong] a portion of those fees.... [Wong] said that the “paralegals” operated under the direction of [Fox]. OCP's investigation revealed that [Fox], Arquette and others acted on the pretext of being “paralegals” offering estate planning advice under the supervision of a licensed attorney, [Wong].
Also supporting Moriyama's reasonable belief was the evidence that Arquette's business cards identified Arquette as a paralegal for Wong but listed the address and phone number of Fox's insurance sales company. Documents purporting to be from Wong's law office also listed Fox's address and phone number. Moriyama reasonably believed he had probable cause to file the OCP complaint.
(2) The circuit court did not err when it determined HRS § 487–1 did not create a private right of action for a claim of negligence against the State. HRS § 487–1 charges OCP with the responsibility to pursue “a strong and effective consumer protection program to protect the interests of both the consumer public and the legitimate business person.” The OCP represents and protects the State, its counties, and the general public. HRS § 487–5 (1993). Among its duties, the OCP Director shall “[i]nvestigate reported or suspected violations of laws enacted and rules adopted for the purpose of consumer protection and shall enforce such laws and rules by bringing civil actions or proceedings[.]” HRS § 487–5(6).
In determining whether a statute provides for a private cause of action, the Hawai‘i Supreme Court has applied the following criteria:
First, is the plaintiff “one of the class for whose especial benefit the statute was enacted”—that is, does the statute create a right in favor of the plaintiff? Second, is there any indication of legislative intent, explicit or implicit, either to create such a remedy or to deny one? Third, is it consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff?
Cnty. of Hawai‘i v. Ala Loop Homeowners, 123 Hawai‘i 391, 407, 235 P.3d 1103, 1119 (2010) () (quoting Pono v. Molokai Ranch, Ltd., 119 Hawai‘i 164, 185, 194 P.3d 1126, 1147 (App.2008)). The determinative factor is whether the legislature intended a private right of action. Whitey's Boat Cruises, Inc. v. Napali–Kauai Boat Charters, Inc., 110 Hawai‘i 302, 313 n. 20, 132 P.3d 1213, 1224 n. 20 (2006). Arquette fails to cite any legislative history supporting his contention that HRS § 487–1 established a private right of action, and we find none.
(3) The circuit court did not err when it determined Hawai‘i does not recognize a tort of maintaining, not just initiating, a malicious prosecution case. Arquette contends Defendants were guilty of malicious prosecution for maintainin...
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...of the sovereign, and not the private individual or the individual's private interests"). Cf. Arquette v. State, 128 Haw. 129, 284 P.3d 222, 2012 WL 2864352, at *2 (Haw. Ct. App. 2012) (unpub.) (statute creating Hawaii's Office of the Consumer Protection program with the intent to protect t......