Fujimoto v. Au, No. 22406.

CourtSupreme Court of Hawai'i
Citation19 P.3d 699,95 Haw. 116
Decision Date22 February 2001
PartiesJames FUJIMOTO, Virginio Lista, Duane Owan, Mitchell Owan, Michael McDonald, James Takamiya, and Gary Hashimoto, Plaintiffs/Counterclaim Defendants-Appellants and Appellees, v. Gordon AU, Defendant/Cross-Claim Defendant/Cross-Claim Plaintiff/Counterclaimant Appellee, Bruce Sutherland, Nancy Sutherland, Larry Sky, Bon Ja Sky, Defendants/Cross-Claim Plaintiffs/Cross-Claim Defendants-Appellees, Richard Jorgensen, Defendant/Cross-Claim Defendant-Appellee and Cross-Appellant, Mickey Hewitt, B.J. Kim, Defendants/Cross-Claim Defendants-Appellees, William G. Weimer, Sandra Weimer, Ross Kaaa, Kailua Partners, Defendants/Cross-Claim Defendants-Appellees, Tom Pesce, Kailua Estates Partners, Defendants/Cross-Claim Defendants, John Does 1-10, Jane Does 1-10, Doe Partnerships 1-10, Doe Corporations 1-10, Doe Entities 1-10, and Doe Governmental Units 1-10, Defendants.
Docket NumberNo. 22406.

19 P.3d 699
95 Haw.
116

James FUJIMOTO, Virginio Lista, Duane Owan, Mitchell Owan, Michael McDonald, James Takamiya, and Gary Hashimoto, Plaintiffs/Counterclaim Defendants-Appellants and Appellees,
v.
Gordon AU, Defendant/Cross-Claim Defendant/Cross-Claim Plaintiff/Counterclaimant Appellee,
Bruce Sutherland, Nancy Sutherland, Larry Sky, Bon Ja Sky, Defendants/Cross-Claim Plaintiffs/Cross-Claim Defendants-Appellees,
Richard Jorgensen, Defendant/Cross-Claim Defendant-Appellee and Cross-Appellant,
Mickey Hewitt, B.J. Kim, Defendants/Cross-Claim Defendants-Appellees,
William G. Weimer, Sandra Weimer, Ross Kaaa, Kailua Partners, Defendants/Cross-Claim Defendants-Appellees,
Tom Pesce, Kailua Estates Partners, Defendants/Cross-Claim Defendants,
John Does 1-10, Jane Does 1-10, Doe Partnerships 1-10, Doe Corporations 1-10, Doe Entities 1-10, and Doe Governmental Units 1-10, Defendants

No. 22406.

Supreme Court of Hawai`i.

February 22, 2001.

Reconsideration Denied March 14, 2001.


19 P.3d 704
Joy Yanagida, appellant, appearing pro se, on the briefs, and for plaintiffs/counterclaim defendants-appellants and appellees James Fujimoto, Virginio Lista, Duane Owan (aka Dwayne Owan), Mitchell Owan, Michael McDonald, James Takamiya, and Gary Hashimoto

Leslie H. Kondo, Michael D. Tom, and Lyle M. Ishida (of Tom & Petrus), on the briefs, Honolulu, for defendant/cross-claim defendant-appellee and cross-appellant Richard Jorgensen.

Reuben S.F. Wong and Russell Y. Tsuji, on the briefs, Honolulu, for defendant/cross-claim defendant/cross-claim plaintiff/counterclaimant-appellee Gordon Au.

LEVINSON, Acting C.J., NAKAYAMA, RAMIL, JJ., and Circuit Court Judge MARKS, in place of MOON, C.J., Recused, and Circuit Court Judge KOCHI, Assigned by Reason of Vacancy.

Opinion of the Court by LEVINSON, J.

The plaintiffs/counterclaim defendants-appellants and appellees James Fujimoto, Virginio Lista, Duane Owan, Mitchell Owan, Michael McDonald, James Takamiya, and Gary Hashimoto (collectively, "the plaintiffs") appeal from: (1) the judgment, filed on April 19, 1999, in favor of the defendant/ cross-claim defendant/cross-claim plaintiff/counterclaimant-appellee Gordon Au and against the plaintiffs on all claims asserted in the plaintiffs' complaint, pursuant to summary judgment orders, and awarding Au $42,515.10 in attorneys' fees and costs; (2) the judgment, filed on April 19, 1999, in favor of the defendant/cross-claim defendant-appellee Mickey Hewitt and against the plaintiffs on all claims asserted in the plaintiffs' complaint, pursuant to summary judgment orders, and awarding Hewitt $11,463.27 in attorneys' fees and costs; and (3) the "judgment," filed on April

19 P.3d 705
20, 1999, in favor of the defendant/cross-claim defendant-appellee and appellant Richard Jorgensen and against the plaintiffs, awarding Jorgensen $34,310.05 in attorneys' fees and costs. The plaintiffs' counsel, Joy Yanagida, appeals (1) the order, filed on February 24, 1999, awarding attorneys' fees and costs to Au in the sum of $3,698.30 and to Jorgensen in the sum of $7,591.48, all to be paid personally by Yanagida and (2) the final judgment, filed on April 20, 1999, in favor of Jorgensen and against Yanagida, awarding Jorgensen $7,591.48 in attorneys' fees and costs. Jorgensen cross-appeals the "judgment," filed on April 20, 1999, in favor of Jorgensen and against the plaintiffs, awarding Jorgensen $34,310.05 in attorneys' fees and costs

On appeal, the plaintiffs argue that the circuit court erred in: (1) dismissing the plaintiffs' derivative claims pursuant to Hawai`i Rules of Civil Procedure (HRCP) Rule 23.1 (1996);1 (2) sanctioning the plaintiffs, pursuant to HRCP Rule 11 (1996),2 for HRCP Rule 23.1 violations in filing their derivative claims; (3) granting summary judgment in favor of Jorgensen and Au with respect to all of Fujimoto's claims on the grounds of lack of standing and denying Fujimoto an opportunity to obtain ratification, joinder, or substitution of the proper party pursuant to HRCP Rule 17(a) (2000);3 (4) granting Jorgensen's and Au's motions for summary judgment with respect to all of the plaintiff's claims (a) without considering the testimony of the plaintiffs' experts, (b) by relying on the representations of Au's counsel, and (c) by relying on depositions during which the plaintiffs were not allowed to cross-examine the deponents; (5) concluding

19 P.3d 706
that Au and Jorgensen were entitled to summary judgment as a matter of law; (6) awarding attorneys' fees jointly and severally against the plaintiffs without statutory authority; and (7) awarding costs jointly and severally against the plaintiffs without statutory authority

Yanagida, in turn, argues on appeal that the circuit court erred in: (1) sanctioning her (a) without affording her an opportunity to be heard, (b) even though she did not violate any order of the court, and sanctioning her on the basis of HRCP Rule 11, see supra note 2, when no violation of the pleading rules was involved; and (2) requiring her to pay an unreasonable sum as a sanction.

Jorgensen argues on appeal that the circuit court erred in: (1) limiting the amount of costs recoverable by Jorgensen, pursuant to Hawaii Revised Statutes (HRS) § 607-9 (1993) and HRCP Rule 54(d) (1999);4 and (2) limiting the amount of attorneys' fees recoverable by Jorgensen, pursuant to HRS § 607-14 (1993 & Supp.1999).5

This court does not have jurisdiction over the appeal and cross-appeal of the "judgment" in favor of Jorgensen and against the plaintiffs, filed on April 20, 1999, inasmuch as the document filed by the circuit court does not expressly enter judgment in Jorgensen's favor with respect to the plaintiffs' substantive claims against him, but merely refers to the entry of the summary judgment orders that disposed of those claims. Jenkins v. Cades Schutte Fleming & Wright, 76 Hawaii 115, 119, 869 P.2d 1334, 1338 (1994). Absent entry of an appealable final judgment on the claims against Jorgensen, the award of attorneys' fees and costs is likewise not appealable.

We agree with the plaintiffs that the circuit court erred in entering summary judgment against them and in favor of Au and Hewitt. Furthermore, we agree that the circuit court erred in awarding Au and Hewitt attorneys' fees, pursuant to HRS § 607-14, inasmuch as the present action is not in the nature of assumpsit. However, we need not and do not reach the question whether the circuit court abused its discretion in imposing attorneys' fees and costs against the plaintiffs jointly and severally. We hold that the circuit court erred in dismissing Fujimoto's claims, which were asserted in the plaintiffs' complaint, inasmuch as Fujimoto had the right to ratification of his action by J & J Auto Repair, Inc. We hold that the circuit court likewise erred in dismissing the plaintiffs' derivative claims, inasmuch as the plaintiffs substantially complied with the requirements of HRCP Rule 23.1; accordingly, the circuit court abused its discretion in imposing sanctions, pursuant to HRCP Rule 11, against the plaintiffs for filing the derivative claims. Regarding Yanagida's appeal, we hold that the circuit court erred in relying

19 P.3d 707
upon Yanagida's purported violation of a prior court order in sanctioning her for failure to produce her clients at scheduled depositions. Accordingly, we (1) vacate (a) the circuit court's judgments, filed on April 19, 1999, in favor of Au and Hewitt and against the plaintiffs, (b) the circuit court's order, filed on June 19, 1997, to the extent that it dismissed the plaintiffs' derivative claims and imposed sanctions on them, (c) the circuit court's order, filed on February 24, 1998, awarding Au and Jorgensen $11,289.78, and (d) the circuit court's judgment, filed on April 20, 1999, in favor of Jorgensen and against Yanagida and awarding Jorgensen $7,591.48, and (2) remand the case to the circuit court for further proceedings consistent with this opinion.

I. BACKGROUND

These appeals arise from a civil lawsuit involving Kailua Estates Partners (Kailua Estates) and Kailua Partners, which are limited partnerships purportedly formed for the purpose of purchasing and developing a parcel of land located on the island of Maui. The parcel was owned by Bruce and Nancy Sutherland (the Sutherlands), Larry and Bon Ja Sky (the Skys), and Tom Pesce (collectively, "the landowners"). William G. Weimer (Weimer) and Bomani J. Kim acted as promoters, general partners, and managers of the partnerships. The Sutherlands and Weimer were licensed real estate agents and/or brokers on the island of Maui. Initially, Kailua Estates formed a joint venture with the landowners to develop the parcel, but subsequently entered into a joint venture with Kailua Partners to purchase the parcel from its owners for the purpose of developing it.

The plaintiffs are among the investors in the partnerships. They are unsophisticated in investment and financial matters. Fujimoto is a sixty-seven-year-old retired owner of an automobile repair shop. He has a high-school level education. Takamiya is a sixty-six-year-old owner and operator of a store. Hashimoto is a sixty-five-year-old retired state employee with a high-school level education. Lista is an elderly Filipino immigrant and an owner of an auto body shop. Duane Owan was a manager of a carpet store, and Mitchell Owan was an owner of a flooring store at the time of their investments. McDonald is an orthopaedic surgeon who invested in Kailua Partners because of Au's credentials and also because of Hewitt's participation in the joint venture. Most, if not all, of the plaintiffs were recruited to invest through Kim's solicitation. The promoters of the partnerships distributed memoranda of private offering and copies of a limited partnership agreement and a subscription agreement to the prospective investors. The plaintiffs' decisions to invest were made in reliance on the representations contained in the foregoing...

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117 practice notes
  • Troyer v. Adams, No. 25174.
    • United States
    • Supreme Court of Hawai'i
    • September 25, 2003
    ...217, 243, 953 P.2d 1315, 1341 (1998) (citations omitted)) (brackets and ellipsis points in original). Fujimoto v. Au, 95 Hawai'i 116, 164, 19 P.3d 699, 747 HRS § 663-15.5(b) provides the court with the means of conducting the good faith hearing in a "meaningful manner" and, as discussed sup......
  • Matsuura v. E.I. Du Pont De Nemours and Co., No. CV96-1180-MLR.
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Hawaii)
    • June 7, 2004
    ...Reliance on a misrepresentation must be reasonable. Matsuura, 73 P.3d at 701 (citing, inter alia, Fujimoto v. Au, 95 Hawai'i 116, 19 P.3d 699, 740 (2000)). In Hawaii, as elsewhere, the reasonableness of a party's reliance can be determined as a matter of law. See TSA Int'l, 990 P.2d at 726 ......
  • Matsuura v. EI Du Pont de Nemours and Co., No. 24355.
    • United States
    • Supreme Court of Hawai'i
    • July 29, 2003
    ...Hawai`i 394, 399, 974 P.2d 34, 39 (1999) (quoting Restatement (Second) of Contracts § 164(1) (1979)). Fujimoto v. Au, 95 Hawai`i 116, 157, 19 P.3d 699, 740 (2001). However, we recognize that our case law has not always required that reliance be reasonable. See, e.g. Shoppe v. Gucci Am. Inc.......
  • Exotics Hawaii v. E.I. Du Pont De Nemours, No. 27489.
    • United States
    • Supreme Court of Hawai'i
    • November 21, 2007
    ...because he or she has not freely bargained but has been induced to settle by the other party. Cf. Fujimoto v. Au, 95 Hawai`i 116, 157, 19 P.3d 699, 740 (2001) (stating the general rule that, "if a party's misrepresentation of assent is induced by either a fraudulent or a material misreprese......
  • Request a trial to view additional results
117 cases
  • Troyer v. Adams, No. 25174.
    • United States
    • Supreme Court of Hawai'i
    • September 25, 2003
    ...217, 243, 953 P.2d 1315, 1341 (1998) (citations omitted)) (brackets and ellipsis points in original). Fujimoto v. Au, 95 Hawai'i 116, 164, 19 P.3d 699, 747 HRS § 663-15.5(b) provides the court with the means of conducting the good faith hearing in a "meaningful manner" and, as discussed sup......
  • Matsuura v. E.I. Du Pont De Nemours and Co., No. CV96-1180-MLR.
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Hawaii)
    • June 7, 2004
    ...Reliance on a misrepresentation must be reasonable. Matsuura, 73 P.3d at 701 (citing, inter alia, Fujimoto v. Au, 95 Hawai'i 116, 19 P.3d 699, 740 (2000)). In Hawaii, as elsewhere, the reasonableness of a party's reliance can be determined as a matter of law. See TSA Int'l, 990 P.2d at 726 ......
  • Matsuura v. EI Du Pont de Nemours and Co., No. 24355.
    • United States
    • Supreme Court of Hawai'i
    • July 29, 2003
    ...Hawai`i 394, 399, 974 P.2d 34, 39 (1999) (quoting Restatement (Second) of Contracts § 164(1) (1979)). Fujimoto v. Au, 95 Hawai`i 116, 157, 19 P.3d 699, 740 (2001). However, we recognize that our case law has not always required that reliance be reasonable. See, e.g. Shoppe v. Gucci Am. Inc.......
  • Exotics Hawaii v. E.I. Du Pont De Nemours, No. 27489.
    • United States
    • Supreme Court of Hawai'i
    • November 21, 2007
    ...because he or she has not freely bargained but has been induced to settle by the other party. Cf. Fujimoto v. Au, 95 Hawai`i 116, 157, 19 P.3d 699, 740 (2001) (stating the general rule that, "if a party's misrepresentation of assent is induced by either a fraudulent or a material misreprese......
  • Request a trial to view additional results

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