Association of Owners of Kukui Plaza v. Swinerton & Walberg Co.
| Decision Date | 13 August 1985 |
| Docket Number | No. 10339,10339 |
| Citation | 68 Haw. 98,705 P.2d 28 |
| Court | Hawaii Supreme Court |
| Parties | ASSOCIATION OF OWNERS OF KUKUI PLAZA, an unincorporated Hawaii association, by its Board of Directors, Plaintiff-Appellee, v. SWINERTON & WALBERG CO., a foreign corporation, Defendant-Appellant, and Associated Steel Workers, Ltd., a Hawaii corporation; Kamaaina Roofing, Inc., a Hawaii corporation; D. Zelinsky & Sons of Hawaii, Inc., a Hawaii corporation; the Consolidated Corp., a Hawaii corporation; and Mike's Painting and Waterproofing Company, Ltd., through its trustees, Stamatios Mertyris, Frank K.H. Kim, and Nalani Mertyris, Defendants-Appellees, and John Does 1-10; Jane Does 1-10; Doe Corporations 6-10; Doe Partnerships 1-10; Doe Joint Ventures 1-10; Sovereignty "X"; Sovereignty "Y"; and Eleemosynary Corporation "Z", Defendants and SWINERTON & WALBERG CO., Third-Party Plaintiff-Appellant, v. ASSOCIATED STEEL WORKERS, LTD., a Hawaii corporation; Kamaaina Roofing, Inc., a Hawaii corporation; D. Zelinsky & Sons of Hawaii, Inc., a Hawaii corporation; and the Consolidated Corp., a Hawaii corporation, Third-Party Defendants-Appellees, and D. ZELINSKY & SONS OF HAWAII, INC., a Hawaii corporation, Third-Party Defendant, Counterclaimant-Appellee, v. SWINERTON & WALBERG CO., a foreign corporation, Third-Party Plaintiff, Counter-Defendant-Appellant, and D. ZELINSKY & SONS OF HAWAII, INC., a Hawaii corporation, Third-Party Defendant, Crossclaimant-Appellee, v. ASSOCIATED STEEL WORKERS, LTD., a Hawaii corporation; Kamaaina Roofing, Inc., a Hawaii corporation; and the Consolidated Corp., a Hawaii corporation, Third-Party Defendants, Cross-Defendants-Appellees. |
Syllabus by the Court
1. The right of appeal is purely statutory and exists only when given by some constitutional or statutory provision.
2. By virtue of Hawaii Revised Statutes (HRS) § 641-1(a), appeals as of right are allowed in civil matters from all final judgments, orders, or decrees of circuit and district courts and the land court, to the supreme court, except as otherwise provided.
3. HRS § 641-1(a) does not allow an appeal from any decision which is tentative, informal, or incomplete. Nor does it permit appeals from orders that are only steps towards final judgment in which they will merge. It means to combine in one review all stages of the proceeding that effectively may be reviewed and corrected if and when final judgment results.
4. A final judgment, order, or decree is not necessarily the last decision of a case. What determines finality of an order or decree for purposes of appeal is the nature and effect of the order or decree.
5. There are orders falling in that small class which finally determines claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause to require that appellate consideration be deferred until the whole case is adjudicated. Such orders may not be effectively reviewable and rights may be lost, perhaps irretrievably, if review invariably awaited a final judgment.
6. An order denying motions for a stay of the action until arbitration has been had and for an order directing that arbitration proceed in the manner provided for in a written agreement is an appealable order. It is a final disposition of a claimed right which is not an ingredient of the cause of action and does not require consideration with it.
7. Whether alleged contractual violations should be presented to an arbitrator or to the court for determination is a matter wholly separate from the merits of plaintiff's cause. It is an independent matter, anterior to the merits and not enmeshed in the factual and legal issues comprising the plaintiff's cause of action.
8. A provision in a written contract to settle by arbitration a controversy arising out of the contract has been declared valid, enforceable, and irrevocable, and the proclaimed public policy is to encourage arbitration as a means of settling differences and thereby avoid litigation.
9. There can be no trial of an action if it has been brought on a claim referable to arbitration under an agreement in writing and a party invokes his contractual right to have the dispute settled by arbitration.
10. Where the right to arbitration exists, compelling a party whose application for a stay has been denied to wait until final judgment is entered so he can appeal the order may afford a remedy in name, but not an adequate remedy in fact.
11. An order denying an application made in accord with HRS § 658-5 for a stay of proceedings until arbitration has been had and one denying an application filed pursuant to HRS § 658-3 for an order directing that arbitration proceed in the manner provided in a written agreement are appealable orders within the contemplation of HRS § 641-1(a). By the same token, orders granting stays and compelling arbitration are appealable too.
12. Pfaeltzer v. Patterson, 49 Haw. 59, 60, 410 P.2d 974, 974 (1966), where we said an order granting a motion for a stay of proceedings pending arbitration was not a final order, is overruled.
13. The unambiguous language of HRS § 658-5 and the proclaimed public policy to encourage arbitration as a means of settling differences preclude a court from lightly inferring a waiver of a right to arbitration or a default in proceeding to arbitration.
14. Waiver is generally defined as an intentional relinquishment of a known right, a voluntary relinquishment of some rights, and the relinquishment or refusal to use a right.
15. An agreement to arbitrate may be waived by the actions of a party which are completely inconsistent with any reliance on the agreement.
16. A person cannot blow both hot and cold. The principle that one should not be permitted to take a position inconsistent with a previous position if the result is to harm another would prevent him from raising the defense of a lack of privity of contract between the parties after he has sought arbitration under the contract.
David Schulmeister, Honolulu (C. Michael Hare & Lorraine H. Akiba, Honolulu, with him on the briefs; Cades, Schutte Fleming & Wright, Honolulu, of counsel) for appellant Swinerton & Walberg Co.
G. Stephen Elisha, Honolulu (Richard A. Franklin & Mark T. Ichiyama, Honolulu, with him on the brief; Dinman, Nakamura, Elisha & Nakatani, Honolulu, of counsel), for appellee Assn. of Owners of Kukui Plaza.
Before LUM, C.J., and NAKAMURA, PADGETT, HAYASHI and WAKATSUKI, JJ.
Swinerton & Walberg Co. (Swinerton) appeals from an order denying its Motion to Stay Proceedings Pending Arbitration and For Order Compelling Arbitration of the claims brought against it by the Association of Owners of Kukui Plaza (the Association). Though the order did not conclude the dispute between the parties, it was nevertheless a final, appealable order. And we think the circuit court erred in not compelling arbitration.
The Association instituted legal proceedings against "SWINERTON & WALBERG CO., a Hawaii corporation," "SWINERTON & WALBERG CO., a foreign corporation," and an array of unidentified persons and entities 1 on May 17, 1983, seeking damages for the allegedly defective construction of the Kukui Plaza condominium apartment buildings. The complaint charged SWINERTON/CALIFORNIA with liability as the purported alter ego of SWINERTON/HAWAII, which "was certified to do busines[s] in ... Hawaii ... for the purpose of building certain structures, [including] Kukui Plaza." The Association's claims were spelled out in detail when the First Amended Complaint was filed on July 20, 1983.
In essence, the Association averred the Hawaii corporation, which it contended was aided and supervised by the California corporation, breached the contract for the construction of Kukui Plaza by not following plans and specifications. It alleged that the contractor breached warranties and failed to exercise due care in performing the contract and that some of the builder's acts were willful, wanton, or reckless; it prayed that the defendants be required to remedy or repair the deficiencies or be held liable in damages, including punitive damages.
Swinerton responded on August 17, 1983 by denying virtually all of the averments of the amended complaint, including that alleging the existence of SWINERTON/HAWAII, and by asserting nearly a score of defenses, including the Association's lack of "proper legal capacity to maintain this suit." It simultaneously filed a third-party action against Associated Steel Workers, Ltd. and Kamaaina Roofing, Inc., two of its subcontractors on the Kukui Plaza construction project, praying that they be held accountable if damages were recoverable by the Association. The Association thereafter identified Associated Steel and Kamaaina Roofing as "DOE CORPORATIONS 1 and 2 respectively." 2
Associated Steel denied it was liable to either Swinerton or the Association, raised a number of defenses, and filed a counterclaim against the general contractor and a cross-claim against its fellow subcontractor. The roofing subcontractor likewise denied it was responsible for the damages sustained by the plaintiff and also asserted a host of defenses, including the dissolution of Kamaaina Roofing, Inc. Meanwhile, both plaintiff and Swinerton stepped up their pre-trial discovery efforts.
Swinerton subsequently sought summary judgment on the claims against SWINERTON/HAWAII or a dismissal thereof, contending "[n]o subsidiary or separate corporation with the name of 'Swinerton & Walberg Co., a Hawaii Corporation', exists or is engaged in business." The plaintiff countered with its Motion to Drop Defendant Swinerton & Walberg Co., a Hawaii Corporation, from Plaintiff's First Amended Complaint. 3 The circuit court rejected Swinerton's motion, granting instead the plaintiff's motions to strike the corporation as a defendant and for leave to file an amended...
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