Buscher v. Boning
| Decision Date | 07 June 2007 |
| Docket Number | No. 27232.,27232. |
| Court | Hawaii Supreme Court |
| Parties | Esther J. BUSCHER, Plaintiff-Appellee, v. Duane S. BONING; Commerce Insurance Co.; Avis Rent-A-Car System, Inc., Defendants-Appellants, and State of Hawai`i, Defendant-Appellee, and Crawford & Co.; John Does 1-5; Jane Does 1-5; Doe Corporations 1-5; Roe Non-Profit Corporations 1-5 and Roe Governmental Entities 1-5, Defendants and Duane S. Boning; Commerce Insurance Co. and Avis Rent-A-Car System, Inc., Third-Party Plaintiffs-Appellants, v. Stanford H. Masui, Third-Party Defendant-Appellee. |
John H. Price, Honolulu, and Amanda J. Weston, on the briefs, for defendants-appellants and third-party plaintiffs-appellants Duane S. Boning, Commerce Insurance Co., and Avis Rent-A-Car System, Inc.
Herbert R. Takahashi, Danny J. Vasconellos, and Rebecca L. Covert (of Takahashi, Masui, Vasconcellos & Covert), Honolulu; Stanford H. Masui in substitution after 5/1/06, on the briefs, for plaintiff-appellee Esther J. Buscher and third-party defendant-appellee Stanford H. Masui.
Dorothy Sellers and Kimberly Tsumoto, Deputy Attorneys General, on the briefs, for defendant-appellee State of Hawai`i.
This workers' compensation case arose from a 1996 motor vehicle collision between vehicles operated by Plaintiff-Appellee Esther J. Buscher and Defendant-Appellant and Third-Party Plaintiff-Appellant Duane S. Boning. At the time of the collision, Buscher was driving within the course and scope of her employment with Defendant-Appellee State of Hawai`i. Buscher made a claim for workers' compensation benefits to the State and sued Boning in Civil No. 97-237K. Buscher and Boning agreed to settle the case for Boning's policy limits of $125,000.00, and the case was dismissed with prejudice by stipulation of the parties. Soon thereafter, however, an issue arose with respect to whether the Employer State consented to the alleged settlement between Buscher and Boning as required by Hawai`i Revised Statutes (HRS) § 386-8 (1993), and Buscher filed the instant lawsuit, Civil No. 99-0220K.
Boning and Defendants-Appellants and Third-Party Plaintiffs-Appellants Commerce Insurance Co. [hereinafter, Commerce] and Avis Rent-A-Car System, Inc. [hereinafter, Avis, and collectively with Boning and Commerce, Defendants] appeal from the Circuit Court of the Third Circuit's March 15, 2005 final judgment,1 raising the following points of error on appeal: (1) the circuit court abused its discretion in granting Buscher's September 24, 2001 motion to set aside the stipulation for dismissal with prejudice of Civil No. 97-237K as to all claims and parties [hereinafter, motion to set aside the stipulation]; (2) the circuit court erred in ruling in its February 11, 2002 findings of facts, conclusions of law, and order that the State owed no duty to Boning to reasonably consent to the settlement agreement after the court previously found that the State had acted unreasonably and outrageously in withholding its consent; (3) the circuit court erred by denying Defendants' August 5, 2002 motion to enforce the settlement agreement; (4) the circuit court erred in dismissing Defendants' third-party claim against Third-Party Defendant Stanford H. Masui, Buscher's attorney; (5) the circuit court erred in dismissing Defendants' counterclaim against Buscher; (6) the circuit court erred in denying Defendants' October 12, 2000 motion for interpleader and dismissal; and (7) the circuit court abused its discretion in granting Buscher's motion for taxation of costs.
In reply, Buscher contends: (1) the circuit court did not abuse its discretion in vacating the stipulated dismissal between the parties because the settlement failed; (2) the settlement between Buscher and Boning was either void or voidable; (3) the circuit court did not err in refusing to enforce the agreement; (4) the State's refusal to consent to a third-party settlement agreement was obstructive and unreasonable; (5) adverse counsel owes no duty to defendants or their attorneys in the course of representation of a party; (6) the court's award of expenses to Buscher as the prevailing party, and based on an offer of judgment, was reasonable; and (7) Defendants' fifth and sixth points of error should be deemed waived pursuant to Hawai`i Rules of Appellate Procedure (HRAP) Rule 28(b)(7). Additionally, the State, in response to Boning's second point of error, replies that the circuit court correctly rejected Boning's cross-claim against the State for unreasonable failure to consent. Based on the following, the circuit court's March 15, 2005 final judgment is affirmed. In addition, we vacate the circuit court's June 1, 2005 order awarding costs and remand this case to the circuit court with instructions that an amended order be entered, awarding costs in the amount of $20,002.82 in favor of Buscher.
On June 13, 1996, Buscher, while driving within the course and scope of her employment with the State, was injured in a motor vehicle collision with a vehicle driven by Boning. Buscher made a claim for workers' compensation benefits to the State and also sued Boning in 1997 in Civil No. 97-237K. The State did not intervene in that case, nor did it initiate its own suit against Boning in connection with the motor vehicle collision.
On July 9, 1999, Buscher accepted Defendants' offer to settle Civil No. 97-237K for $125,000.00. The State was advised of the settlement by letter dated July 14, 1999. Boning's insurers, Commerce and Avis, issued settlement checks totaling $125,000.00, payable to Buscher and Masui, in July 1999. Such checks, however, apparently were never delivered to Buscher or Masui. Buscher and Boning, on numerous occasions, both requested written consent to the settlement from the State as required by HRS § 386-8.2 Without receiving such consent, however, Buscher signed a release and settlement agreement, drafted by Boning, on August 2, 1999. The settlement agreement did not require the signature of a representative of the State, nor did it mention anything about the State's consent. Buscher's attorney, Masui, signed his approval of the form and content of the release and settlement agreement. Masui also signed a stipulation for dismissal with prejudice as to all claims and parties in Civil No. 97-237K. On August 9, 1999, Boning filed the signed stipulation for dismissal with prejudice in the circuit court, despite the fact that Buscher had not yet been paid the settlement consideration and the State had not yet consented to the settlement.
By letter dated October 15, 1999, the State informed Buscher that it consented to the settlement conditioned upon: (1) the deposit of $12,500.00 into an interest-bearing account until the amount of the workers' compensation lien and/or any amount of contribution for fees and costs was finally determined; and (2) the State's reservation of its "rights, remedies, claims or causes of action it may have against . . . Boning with respect to any workers compensation benefits provided by the State to Mrs. Buscher. . . ."
Perceiving the October 15, 1999 letter as the State's written consent, Masui requested that Defendants issue settlement checks by letters dated October 18 and 27 and November 5. Having not received the checks, Masui, by letter dated November 15, 1999, informed Defendants that he considered the settlement "void for failure of your clients to meet their obligations." In reply, by letter dated November 16, 1999, Defendants' counsel stated:
Please be reminded that you personally assured me that you would "take care of" the lien with Employer, State of Hawai[`]i. [Deputy Attorney General] Ms. Schoen then personally called me on November 5, 1999 and told me that Employer would not consent to the settlement you and I reached on behalf of our respective clients. . . . Therefore, we have not received consent from the State as you insist.
On December 13, 1999, Buscher filed the instant lawsuit, Civil No. 99-0220K, which included the previously dismissed personal injury lawsuit as Count I as well as numerous other claims accusing Defendants of breaching the settlement agreement and the State of interfering with the agreement by wrongfully withholding consent. In response, Defendants: (1) cross-claimed against the State for, inter alia, unreasonable failure to consent to the settlement, interference with a contractual relationship, and negligent claims handling/negligent failure to consent; (2) counterclaimed against Buscher for, inter alia, abuse of process, breach of the settlement agreement, and misrepresentation; and (3) filed a third-party complaint against Masui alleging that he breached his duty to Defendants by failing to obtain the required employer's consent, failing to exercise reasonable care and diligence to obtain consent, and misrepresenting to Defendants that he had obtained such consent, thus causing excess litigation expenses.
On October 11, 2000, Defendants filed a motion to: (1) interplead and deposit with the court $125,000.00, representing the settlement proceeds of the first lawsuit; and (2) dismiss Defendants. At a November 6, 2000 hearing, the court orally denied the motion, reasoning that there was still a dispute as to whether or not there was a settlement. An order denying the motion was entered on December 4, 2000.
On May 15, 2001, Defendants moved for partial summary judgment on their counterclaim against Buscher as to Counts II (breach) and III (misrepresentation). By order dated July 6, 2001, the court found that the State "did not agree to the settlement," and that there was "no valid settlement under HRS § 386-8." The court, however, inexplicably granted Defendants...
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