Bagalay v. Lahaina Restoration Foundation, 6199

• Decision Date: 15 December 1978
• Docket Number: No. 6199,6199
• Parties: Alipio BAGALAY, an incompetent person, by his guardian, Beatrice Bedoya, Plaintiff-Appellant, v. The LAHAINA RESTORATION FOUNDATION, County of Maui, and State of Hawaii, Defendants-Appellees.
• Court: Hawaii Supreme Court

Page 416

588 P.2d 416

60 Haw. 125

Alipio BAGALAY, an incompetent person, by his guardian Beatrice Bedoya, Plaintiff-Appellant, v. The LAHAINA RESTORATION FOUNDATION, County of Maui, and State of Hawaii, Defendants-Appellees.

No. 6199.

Supreme Court of Hawai'i.

Dec. 15, 1978.

Syllabus by the Court

1. A dismissal under Rule 12(f), Rules of the Circuit Courts, is essentially a dismissal for want of prosecution.

2. In general, the federal appellate courts have said that a dismissal of a complaint is such a severe sanction that it is to be used only in extreme circumstances when there is a clear record of delay or contumacious conduct and where lesser sanctions would not serve the best interests of justice.

3. Where delay results in actual prejudice to the defendants, and where it is shown that plaintiff's counsel deliberately delayed in prosecuting the case, a dismissal would not constitute an abuse of discretion.

4. The law presumes injury from unreasonable delay. However, this presumption of prejudice is a rebuttable one and if there is a showing that no actual prejudice occurred, that factor should be considered when determining whether the trial court exercised sound discretion.

5. In the final analysis, the court's decision to exercise its discretion to dismiss a complaint turns on the facts of each case.

6. A deceased person cannot be a party to a legal proceeding, and the effect of death is to suspend the action as to the decedent until his legal representative is substituted as a party.

7. As a general rule, the authority of counsel to proceed with a case is terminated upon the death of the party being represented, but courts can pass upon questions raised and listen to suggestions as to their disposal from an attorney who is an officer of the court.

8. The common law principle is that the guardian's trust expires at the death of the award, and that upon the happening of that event, it is the duty of the guardian to account for and turn over to the proper heirs so much of the ward's estate as remains in his hands.

9. Where there is no substitution of parties for a deceased incompetent ward, a judgment in favor of the deceased is a nullity.

10. Under Rule 25(a)(1), F.R.C.P., a suggestion of death upon the record is not a pre-requisite to filing of a motion for substitution of parties.

11. Once the fact of death has been suggested upon the record, by any party or by the representative of a deceased party, Rule 25(a)(1), F.R.C.P., provides that the motion for substitution is to be made 90 days thereafter.

12. The 90-day time period is subject to extension under Rule 6(b), F.R.C.P., at the discretion of the trial court. Courts generally have given Rule 6(b) a liberal interpretation, consistent with the liberal interpretation standard in Rule 1, F.R.C.P.

13. Ordinarily, the discretion of the court should be exercised to permit an extension of time, in the absence of a showing of bad faith on the part of the movant for substitution or undue prejudice to the other parties to the action.

14. The burden is on the movant to demonstrate good faith and to show some reasonable basis for noncompliance with the rules.

15. The Rules of Civil Procedure are to be liberally construed to promote justice, and the court may depart from the literal 16. Substitution of a party should be made within a reasonable time after the death of a party. A reasonable time is determined by whether the delay in substitution has (or would) materially prejudice the substantial rights of any party.

application of the rule where such action is necessary to prevent the miscarriage of justice.

B. Martin Luna and Antonio Ramil, Wailuku, Maui, for plaintiff-appellant.

William C. McCorriston, Honolulu (Goodsill, Anderson & Quinn, Honolulu, of counsel), for defendants-appellees Lahaina Restoration Foundation and State of Hawaii.

David Nakamura, Deputy Corp. Counsel, Wailuku, Maui (Ernest K. C. Ching, Deputy County Atty., on brief), County of Maui, for defendants-appellees.

Before RICHARDSON, C. J., KOBAYASHI, OGATA, and MENOR, JJ., and FUKUSHIMA, Circuit Judge, in place of KIDWELL, J., disqualified.

KOBAYASHI, Justice.

Alipio Bagalay, an incompetent person, by his guardian, Beatrice Bedoya (appellant), appeals from an order of the Circuit Court of the Second Circuit dismissing appellant's complaint for failure to file a proper statement of readiness in violation of Rule 12(f), Rules of the Circuit Courts, and for failure to make a timely substitution of parties in violation of Rule 25(a)(1), Hawaii Rules of Civil Procedure. We reverse.

ISSUES

I. Whether the trial court erred in dismissing appellant's complaint on the ground that appellant repeatedly violated Rule 12(f).

II. Whether the trial court erred in dismissing appellant's complaint on the ground that appellant's motion for substitution of parties under Rule 25(a)(1), H.R.C.P., was untimely.

STATEMENT OF THE CASE

On December 25, 1969, a structure in which appellant was standing collapsed on him and caused him serious injuries. On July 15, 1970, after appellant had been adjudged as an incompetent person, Beatrice Bedoya was duly appointed by the circuit court of the second circuit as the guardian of the person and property of appellant. Thereafter, on October 1, 1971, the guardian, on behalf of appellant, filed a complaint in the second circuit court against the appellees for damages for injuries sustained by appellant. On November 7, 1972, while the suit was pending, appellant died.

Defendant State of Hawaii filed its answer on October 20, 1971; Defendant Lahaina Restoration Foundation filed its answer on October 28, 1971, and Defendant County of Maui filed its answer on November 3, 1972. On February 4, 1972 and February 9, 1972, the State and the County, respectively, moved for summary judgment or dismissal pursuant to Rule 56, H.R.C.P., or in the alternative, Rule 12, H.R.C.P. The court denied both motions. After the parties participated in discovery proceedings, the County, on June 6, 1973, again moved for summary judgment or dismissal under Rule 56 and Rule 12, H.R.C.P. The court entered its denial of the motion on July 2, 1973.

On August 30, 1973, the clerk of the court filed and served on all parties a notice of dismissal pursuant to Rule 12(f), Rules of the Circuit Courts. ¹ On September 7, 1973 counsel for appellant filed a timely motion for an extension of time to file a statement of readiness. Counsel's affidavit which was filed with the motion, stated the following:

1. That he (counsel for appellant) is an attorney duly licensed to practice in the State of Hawaii;

2. That he represents (appellant) who died on November 7, 1972, subsequent to the filing of this action;

3. That after (appellant's) death he tried to locate said (appellant's) heirs;

4. That in December 1972, he contacted a Mrs. Fortunata Bagalay Dequito in the Philippines who claims to be the daughter of the deceased (appellant);

5. That he has been attempting to determine the validity of her claim as heir and the claims of her mother and other relatives in the Philippines;

6. That he has not been able to obtain any authority from any heir to proceed on behalf of the deceased (appellant) in this case and will need at least another six months to validate the claims of the alleged relatives and obtain such authority;

7. That once such authority is received, the case would be practically ready for setting on the trial calendar.

The court approved the motion and extended the time of filing a statement of readiness to February 28, 1974.

The record shows that appellant did not file a statement of readiness as of February 28, 1974. On March 6, 1975, approximately a year after the February 28th time limitation had expired, Lahaina Restoration Foundation and the State of Hawaii filed a motion for an order directing the clerk to issue notice of a second conditional dismissal pursuant to Rule 12(f), Rules of the Circuit Courts. On April 29, 1975, the court held a hearing on the defendants' motion. Appellant's counsel appeared, objected to the granting of the motion, and stated the following reason for the delay in filing of the statement of readiness:

(T)he reason for the delay in this case is most unusual, your Honor, because the plaintiff died. And the only heirs we were able to find were in the Philippines. And we have been unable to proceed because there has been a lack of communication between the heirs in the Philippines and our law firm. . . . Mrs. Dequito has come to Hawaii in an attempt to resolve this lack of communication and allow us to proceed as expeditiously as possible.

Counsel for appellant asked for an extension of time until July 1, 1975, in order to find appellant's witnesses and to recontact them regarding the case. The said defendants (appellees) objected to the extension of time for filing because the "absence of witnesses and the long length of time between the filing of Complaint and the filing of a Statement of Readiness" had prejudiced their case.

On May 7, 1975, the court filed an order of conditional dismissal, dismissing the complaint with prejudice, "on condition that plaintiff fails to file a statement of readiness by and including May 31, 1975." On May 30, 1975, counsel for appellant filed a statement of readiness. On July 1, 1975, counsel for appellant filed a motion to substitute temporary administratrix, Beatrice Bedoya, as party plaintiff for appellant pursuant to Rule 25(a)(1). H.R.C.P. ² On the same day, counsel for appellant filed a "Suggestion of Death upon the Record Under Rule 25(a)(1), Hawaii Rules of Civil Procedure", and served the "Suggestion of Death" with a notice of hearing upon counsel for appellees. The court held a hearing on August 5, 1975 and November 18, 1975 on the motion for substitution. On February 3, 1976, the court entered its order dismissing the complaint on the following two separate and independent grounds:

A....