Azer v. Courthouse Racquetball Corp.

• Decision Date: 22 March 1993
• Docket Number: 15729,Nos. 15659,s. 15659
• Citation: 9 Haw.App. 530,852 P.2d 75
• Parties: Maher A.A. AZER, doing business as Kapiolani Business Centre, Plaintiff-Appellee, v. The COURTHOUSE RACQUETBALL CORPORATION, a Hawaii corporation, doing business as the International Fitness Center, Leroy L. Carver, Jr., and Leroy L. Carver, III, Defendants-Appellants.
• Court: Hawaii Court of Appeals

Page 75

852 P.2d 75

9 Haw.App. 530

Maher A.A. AZER, doing business as Kapiolani Business Centre, Plaintiff-Appellee, v. The COURTHOUSE RACQUETBALL CORPORATION, a Hawaii corporation, doing business as the International Fitness Center, Leroy L. Carver, Jr. and Leroy L. Carver, III Defendants-Appellants.

Nos. 15659, 15729.

Intermediate Court of Appeals of Hawai'i.

March 22, 1993.

Syllabus by the Court

1. The general rule is that where an issue was adjudicated in a denial of a motion to dismiss an appeal, the same issue will not be considered by the appellate court again when raised in the briefs.

2. Where before filing the opening brief on appeal the appellant filed in the appellate court a motion for summary reversal of the judgment appealed from, which challenged the jurisdiction of the lower court to enter the judgment but did not challenge the jurisdiction of the appellate court to hear the appeal, and the motion for summary reversal was denied, without explanation, the denial did not adjudicate the issue of the appellate court's jurisdiction to hear the appeal, and the appellate court could consider that issue.

3. A trial court's imposition of a discovery abuse sanction is reviewable on appeal for abuse of discretion.

4. A trial court abuses its discretion whenever it exceeds the bounds of reason or disregards rules or principles of law or practice to the substantial detriment of a party.

5. Dismissal of a pending action by the trial court with prejudice is not favored. A full trial on the merits is favored. An appellate court will uphold a dismissal with prejudice only where the record clearly shows delay or contumacious conduct and where lesser sanctions would not serve the best interest of justice.

6. Generally, Rule 37(b), Hawaii Rules of Civil Procedure (HRCP) (1980) sanctions are only warranted where a court order for discovery has been violated. Sanctions are allowed under Rule 37(d), HRCP, against a party for a complete failure to respond to interrogatories.

7. Evasive or incomplete answers to interrogatories are treated under Rule 37(a), HRCP, as failures to answer only with respect to Rule 37(a). A party's evasive or incomplete answers may be used by the requesting party to support a motion to compel answers in accordance with Rule 37(a)(2); however, the evasive or incomplete answers cannot be used to support sanctions pursuant to Rule 37(d).

8. Rule 37, HRCP, is not the source of the court's authority to impose sanctions for a party's violation of a duty to supplement responses to interrogatories under Rule 26(e), HRCP.

9. In addition to its authority under Rule 37, HRCP, to impose sanctions for discovery violations, the court may sanction parties for abusive litigation practices in a proceeding before it in accordance with Hawaii Revised Statutes § 603-21.9(1) and (6) (1985), and the court's inherent powers. The power under each authority must be exercised with restraint and discretion, and the court's exercise of each of them is subject to review for abuse of discretion.

William C. McCorriston, William Meheula, Mark J. Bennett and Thomas E. Bush (McCorriston, Miho & Miller, of counsel), on the briefs, Honolulu, for defendants-appellants.

Wesley H. Sakai, Jr., Scott I. Batterman (Bendet, Fidell, Sakai & Lee, of counsel), and Susan Oki Mollway (Cades, Schutte, Fleming & Wright, of counsel), on the brief, Honolulu, for plaintiff-appellee.

Before BURNS, C.J., and HEEN and WATANABE, JJ.

HEEN, Judge.

These two appeals by Defendants-Appellants The Courthouse Racquetball Corporation (Courthouse), a Hawaii corporation, doing business as the International Fitness Center, Leroy L. Carver, Jr., and Leroy L. Carver, III, were consolidated for decision by order of this court. ¹ We vacate the judgment in Appeal No. 15659 (No. 15659) and dismiss Appeal No. 15729 (No. 15729). ²

FACTS

On February 17, 1987, Plaintiff-Appellee Maher A.A. Azer (Plaintiff) filed a complaint against Courthouse for (1) unpaid On May 27, 1987, Courthouse filed a First Amended Counterclaim (Counterclaim) alleging, in Counts V, VI, and VII, that it had suffered damages on account of Plaintiff's failure to maintain and repair the Building's parking facility. In particular, paragraph 28 (Paragraph 28) of the Counterclaim, alleged that because of Plaintiff's failure to maintain and repair the Building's parking facility, Courthouse lost old and new customers and suffered a loss of income in the amount of $4,000 per day. ³ The Counterclaim prayed for damages for Plaintiff's breach.

lease rents, "applicable state taxes and other additional charges and expenses," on space leased by Courthouse from Plaintiff in a building (the Building) owned by Plaintiff on Kapiolani Boulevard; and (2) unpaid assessments for the use of additional parking spaces in the Building's parking facility. On March 30, 1987, Courthouse answered the complaint and filed a counterclaim.

On November 21, 1988, Plaintiff moved to join the Carvers as defendants claiming the Carvers were personally liable because (1) after Courthouse was dissolved on November 15, 1985, for failure to file an annual corporate exhibit, the Carvers, as officers, directors, and stockholders of Courthouse, continued to operate Courthouse's business; and (2) the Carvers had personally guaranteed Courthouse's performance of the lease terms. Joinder was granted on March 21, 1989, and trial was set for the week of July 31, 1989. ⁴

In the course of preparing for trial, Plaintiff undertook several steps to discover from Courthouse what evidence Courthouse had to support the damages alleged in Paragraph 28. The following discovery steps are pertinent to this appeal:

(1) October 8, 1987: Plaintiff's First Request for Answers to Interrogatories (First Interrogatory Request).

Interrogatories 10 through 14 (Interrogatories 10-14) requested information relating to the Counterclaim, including the names, addresses, and telephone numbers of the customers that Courthouse allegedly lost, the dates on which such customers were lost, the facts concerning each loss, the amount of lost income attributed to each such customer, and the facts supporting the allegation of a daily loss of $4,000 income.

(2) February 3, 1989: Plaintiff's Third Request for Production of Documents (Third Document Request).

Plaintiff sought documents related to Courthouse's income and expenses, cash receipts and disbursements, profits and losses, and assets and liabilities.

(3) June 9, 1989: Plaintiff's Motion to Compel Answers to the First Interrogatory Request and/or for Preclusion of Evidence (Motion to Preclude).

Plaintiff sought to compel answers to Interrogatories 10-14 or to preclude Courthouse from producing evidence at trial regarding the Counterclaim.

(4) June 22, 1989: Plaintiff's motion to compel the production of the documents sought in the Third Document Request (Motion to Compel).

On June 23, 1989, Plaintiff's counsel filed a supplemental affidavit in support of the Motion to Preclude in which he outlined the history of Courthouse's alleged discovery abuses. ⁵ In a memorandum filed on June The Motion to Preclude and the Motion to Compel were considered by the court without a hearing ⁶ and on July 10, 1989, the motions judge issued a Minute Order (Minute Order) which stated in relevant part:

22, 1989, opposing the Motion to Preclude, Courthouse promised to submit supplemental responses [9 Haw.App. 536] to Interrogatories 10-14 by June 30, 1989, the discovery cut-off date. On that date, Defendants produced four "bankers boxes" filled with documents in response to the first and third requests for documents.

1. Defendants have failed to answer interrogatories 10-14 dealing with para. 28 in their 1st Am Counterclaim. Since the Defendants promised responses by 6/30/89, the Court will disallow any evidence by Defendants to support para. 28.

2. Defendants ordered per Plaintiffs' 3rd Production Request to produce the records therein within 20 days from the date of this minute order.

3. Reasonable expenses to Plaintiff.

On July 18, 1989, Defendants filed a Motion for Reconsideration (First Motion for Reconsideration) of the Minute Order.

On August 11, 1989, the motions judge entered a formal order (Preclusion Order) granting the Motion to Preclude and the Motion to Compel and denying the First Motion for Reconsideration. The Preclusion Order read in pertinent part as follows:

4. Defendants shall be and are hereby precluded from presenting any evidence at trial in support of the allegations of Counts V, VI, and VII of the Counterclaim as amended, that as a result of Plaintiff's failure to maintain and/or repair the premises, parking deck and/or common areas, ... "Defendant/Counterclaimant has been damaged in that it has lost both new and old customers in an amount to be proven at trial, but which exceeds $4,000 per day," as alleged in paragraph 28 of the Amended Counterclaim, or in any way relating to the alleged loss of contract sales described in the Report of Expert Testimony of Teresa McAllister, C.P.A., and Jim Bock, C.P.A., filed herein on July 19, 1989.

After a bench trial that lasted from August 7 to 16, 1989, and in which no evidence was allowed by the court with respect to the allegations in Paragraph 28, the trial court entered findings of fact (FOF) and conclusions of law (COL). In FOF No. 12, the trial court found that, pursuant to the Preclusion Order, Courthouse was prevented from introducing prima facie evidence in support of the Counterclaim. Judgment was entered on December 22, 1989, in favor of Plaintiff against Courthouse only, ⁷ and This is Defendants' fourth attempt to appeal from the judgment, and was lodged after an August 1, 1991 motion by the Carvers to dismiss the complaint as to them or in the alternative for summary judgment was denied in an order entered by the lower court on October 7, 1991. ⁸ In the same order, the court entered a Rule 54(b)...