Board of Directors of Ass'n of Apartment Owners of Regency Tower Condominium Project v. Regency Tower Venture, 7494
| Decision Date | 13 October 1981 |
| Docket Number | No. 7494,7494 |
| Citation | 2 Haw.App. 506,635 P.2d 244 |
| Parties | BOARD OF DIRECTORS OF THE ASSOCIATION OF APARTMENT OWNERS OF REGENCY TOWER CONDOMINIUM PROJECT, a Horizontal Property Regime, Plaintiff, v. REGENCY TOWER VENTURE, a joint venture of Regency Tower Development, Inc., and Ross & Read Ventures, Defendants-Appellees, Cross-Appellants, and Jo Paul Rognstad & Associates Architects, Inc.; Jo Paul Rognstad, individually, Defendants-Appellants, Cross-Appellees, and Michael M. Ross, Carlos R. Read, individually; Nakakura Construction Company, Limited; Richard M. Libbey, Inc., Defendants, and HONOLULU ROOFING COMPANY, LTD., Defendant and Third-Party Plaintiff, v. MASONRY BUILDERS, INC., a Hawaii corporation; Hawaii Painting & Wallcovering, Inc., a Hawaii corporation; Commercial Sheetmetal Co., Inc., a Hawaii corporation, Third-Party Defendants. |
| Court | Hawaii Court of Appeals |
Syllabus by the Court
1. In an architectural malpractice action, the statute of limitation begins to run when the plaintiff knows, or in the exercise of reasonable care should have discovered, that an actionable wrong has been committed against his property.
2. In an action by developer against architectural corporation and architect for recovery of money due to overpayment and mistake, action was one at law and triable to a jury as a matter of right.
3. Under applicable rules, the standard for granting a judgment notwithstanding the verdict is same as that for granting a motion for directed verdict.
4. A judgment notwithstanding the verdict is improper if there are issues of fact appropriate for submission to the jury.
5. On motions for directed verdict, the evidence and the inferences which may be fairly drawn from the evidence must be considered in the light most favorable to the party against whom the motion is directed, and if the evidence and the inferences, in that manner, are of such character that reasonable persons, in the exercise of fair and impartial judgment, may reach different conclusions upon the crucial issue then the motion should be denied and the issue should be submitted to the jury.
6. In an action by developer against architectural corporation and architect, it was not improper for the trial court to direct a verdict finding the existence of an architectural contract where no substantial evidence had been introduced from which a jury could infer that no contract had been entered into.
7. In a case tried of right before a jury, the trial court has no power to enter an order for remittitur without granting a new trial as the alternative to acceptance of the remittitur.
Robert K. Fukuda, Honolulu, for Rognstad.
Larry T. Topliss, Honolulu, for Regency.
Before HAYASHI, C. J., and PADGETT and BURNS, JJ.
This is a case involving an appeal and a cross-appeal from an amended judgment entered by the trial court after a jury trial in favor of Appellee/Cross-Appellant Regency Tower Venture, against Appellants/Cross-Appellees Jo Paul Rognstad & Associates, Architects, Inc. and Jo Paul Rognstad, individually.
The questions presented on direct appeal are whether the trial court erred in refusing to grant a motion to dismiss, a motion for bifurcation, and a motion for a directed verdict or for a judgment notwithstanding the verdict. On cross-appeal, the questions presented are whether the trial court erred in granting a motion for a directed verdict, a motion for judgment notwithstanding the verdict, and a motion for amendment of the judgment. We affirm in part and reverse in part.
In the main action below, the Board of Directors of the Association of Apartment Owners of the Regency Tower Condominium, instituted an action based on alleged defects in the design and construction of the Regency Tower Condominium. Regency Tower Venture (hereinafter "Regency"), Jo Paul Rognstad & Associates, Architects, Inc. (hereinafter "Rognstad Associates") and Jo Paul Rognstad, individually (hereinafter "Rognstad"), as well as the general contractor and various subcontractors were named as defendants. All defendants cross-claimed against each other. Eventually, all claims were settled except for the actions between Regency (the developer), Rognstad Associates (the architectural corporation), and Rognstad (the sole stockholder of Rognstad Associates), which went to trial. This is the sole action before us.
The facts briefly are as follows: In early 1971, Rognstad approached William Lim and Morris Hironaga with proposals to develop the Regency Tower Condominium. On April 27, 1971, Rognstad, Lim and Hironaga executed a standard form AIA contract wherein Rognstad Associates was engaged to serve as the project's architect for a fee of six per cent of construction costs.
On September 16, 1971, Rognstad, Lim and Hironaga modified their previous agreement by executing another agreement which set architectural fees at $20,000 and gave Rognstad a "sandwich sublease" which would yield $2,140 a month. In addition, Rognstad was to obtain the leasehold interest of Mr. and Mrs. Watters Martin and assign those interests over to Lim and Hironaga. Rognstad was also to receive several units of the condominium project upon completion. Construction costs were by then estimated to be four million dollars.
On February 12, 1972, the parties modified their previous agreement by penciling in various amendments. Architectural fees were set at $120,000. The yield from the sandwich sublease was set at $12,000 a year for 30 years. Rognstad was to receive only one unit upon the project's completion.
Subsequently, Rognstad, Lim and Hironaga realized that they could not muster the requisite financing for the project's development. At this point, Michael Ross and Carlos Read, the principals of Ross & Read Ventures became involved. The parties agreed that a joint venture would be suitable to all involved. On November 16, 1972, Regency Tower Development, Inc. (a newly formed corporation whose principal officers were Rognstad, Lim and Hironaga) and Ross & Read Ventures, formed the joint venture Regency Tower Venture for the sole purpose of developing the Regency Tower Condominium.
Ross & Read Ventures became the managing partner of Regency and successfully acquired the leasehold rights of the Martins and successfully developed the project. The architectural plans previously drawn by Rognstad Associates were utilized for the project.
The construction of the Regency Tower was completed by December 9, 1974. On December 10, 1974, Regency assigned the lease previously acquired from the Martins to Rognstad.
On December 3, 1976, the Board of Directors of the Association of Apartment Owners of Regency Tower instituted the main action against Regency, Rognstad Associates, Rognstad, et al. On December 7, 1977, Regency filed a cross-claim against Rognstad Associates and Rognstad. Regency's cross-claim was subsequently amended on November 13, 1978.
The first count of Regency's cross-claim against Rognstad Associates and Rognstad is moot and is not at issue. The second count sets forth a claim for damages as a result of Rognstad Associates and Rognstad's failure to adequately design a ground floor day care center. The third count sets forth a claim for damages as a result of Rognstad Associates and Rognstad's failure to adequately specify and supervise the installation of clear glass in the condominium project. The fourth count sets forth a claim for the cost incurred in replacing the wrongfully specified obscure glass with clear glass. The fifth count sought damages as a result of architectural malpractice. The sixth count sought a return of $115,000 paid to Rognstad on "incorrect information and belief". The seventh count has not been appealed and is not at issue. The eighth count alleged that Regency paid $75,000 to Rognstad and had assigned the sandwich sublease to Rognstad on "incorrect information and belief" and due to mistake. The eighth count also alleged that Rognstad had never been employed by Regency and was not entitled to any type of compensation.
Prior to the trial, Rognstad Associates and Rognstad filed a motion entitled "Motion to Dismiss or for Summary Judgment or for Directed Verdict". This motion was based on Hawaii Revised Statutes (HRS) § 657-7, the two-year statute of limitations governing actions based on damages to person or property, and was directed at counts two through five. With respect to counts six through eight, the defenses of estoppel, laches and failure to state a claim upon which relief can be granted were asserted. Arguments were heard at the close of plaintiff's case, and the court orally denied the motion to dismiss based on the statute of limitations but directed a verdict in favor of Rognstad Associates and Rognstad with respect to counts six through eight insofar as those counts involved the payment of architectural fees in the amount of $120,000, and the assignment of the sandwich sublease.
Prior to the trial, Rognstad Associates and Rognstad also filed a motion for bifurcation with respect to counts six through eight. This motion was based on the argument that those counts were founded on the equitable claims of unjust enrichment and mistake and should be heard by the court without a jury. Arguments on this motion were also heard at the close of plaintiff's case, and the court denied the motion.
After both sides had rested at trial, Rognstad Associates and Rognstad made an oral motion for a directed verdict with respect to count two, four, five, six, seven and the remaining portion of count eight insofar as it involved the mistaken payment to Rognstad of $75,000. The motion was denied. Regency made an oral motion for directed verdict as to that portion of count eight relating to the mistaken payment of $75,000 to Rognstad as a finder's fee. The motion was denied.
On February 23, 1979, the jury returned its special...
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