Globalmart, Inc. v. Posec Haw., Inc.
| Decision Date | 10 May 2012 |
| Docket Number | No. 28249.,28249. |
| Parties | GLOBALMART, INC., dba Land Mark Development Co., Plaintiff–Appellant, v. POSEC HAWAII, INC., Defendant–Appellee and John Does 1–50, Jane Does 1–50, Doe Partnerships 1–50, Doe Corporations 1–50, Doe Entities 1–50; and Doe Governmental Units 1–50, Defendants. |
| Court | Hawaii Court of Appeals |
OPINION TEXT STARTS HERE
Appeal from the Circuit Court of the First Circuit (Civil No. 05–1–1687).
J. Stephen Street, (Rush Moore LLP), on the briefs, for plaintiff-appellant.
Diane D. Hastert and Mark M. Murakami, (Damon Key Leong Kupchak Hastert), on the briefs, for defendant-appellee.
MEMORANDUM OPINION
This dispute revolves around Plaintiff–Appellant Globalmart, Inc., doing business as Land Mark Development Co.'s (“Land Mark”) attempted purchase of eight condominium units in a then yet-to-be-built Honolulu high-rise project at 909 Kapiolani Boulevard (the “Project”) from Defendant–Appellee Posec Hawaii, Inc. (“Posec”) for $3,345,000.00. The central issues in the case are the enforceability of a June 2004 Memorandum of Understanding (“MOU”) entered into between the parties and whether Posec fraudulently induced Land Mark to surrender any rights it had under the MOU by its subsequent execution of the Deposit Receipt and Sales Contract (“DRSC”).
Land Mark appeals from the March 3, 2006 Order Granting Defendant Posec Hawaii, Inc.'s Motion For Summary Judgment, Filed December 23, 2005 (“Order Granting MSJ”); the September 15, 2006 Order Granting Defendant Posec Hawaii, Inc.'s Motion For Attorneys' Fees And Costs, Filed March 2, 2006 (“Order Granting Fees and Costs”); and the October 6, 2006 Final Judgment, which were entered in the Circuit Court of the First Circuit (“Circuit Court”).1
Land Mark argues that the Circuit Court erroneously granted Posec's motion for summary judgment because (A) the MOU is enforceable; (B) if the DRSC(s) superseded the MOU, Posec is liable for fraudulent inducement; and (C) Land Mark should have been permitted additional time to conduct discovery pursuant to Hawai‘i Rules of Civil Procedure (“HRCP”) Rule 56(f). Land Mark also (D) challenges the award to Posec of attorneys' fees and costs.
We vacate the Order Granting Fees and Costs and Paragraph 2 of the Final Judgment. We affirm in all other respects and remand the case for proceedings consistent with our opinion.
Young K. Shin (“Shin”), a native of Korea, is the president/chief executive officer of Land Mark, a California corporation. Shin has difficulty reading and speaking English.
In June 2004, Shin participated in negotiations with Ki Young Chu (“Chu”), the vice president of a corporation with an interest in Posec, for the purchase by Land Mark of eight condominium units at the Project. The negotiations were conducted in Korean. Throughout the process, Chu frequently telephoned Wonjae Jun (“Jun”), Posec's chief executive officer, to keep him informed about the progress of the negotiations. According to Shin, Jun insisted that Land Mark's $167,250.00 deposit for the eight condominium units be non-refundable. In turn, Shin insisted on a binding sales price to facilitate Land Mark's resale plans. When the negotiations concluded, a bilingual attorney recorded the parties' agreement in the MOU. The MOU was “made and entered into” on June 14, 2004, although Shin's signature was dated June 28, 2004, and Jun's signature was undated.
The MOU explicitly states that it is partially binding and partially hortatory. Specifically, the MOU provides in part:
[The] purpose of this Memorandum is to set forth [Land Mark]'s intention in entering into a purchase agreement with [Posec] to purchase the property described encompassing all eight condominium units on the 18th floor (the “Property”) of the building to be constructed at the common address of 909 Kapiolani, Honolulu, Hawaii (the “Building”), in accordance with the general terms set forth below....
[Land Mark] and [Posec] agree to use their best efforts to attempt to negotiate the terms and conditions of a definitive Purchase Agreement promptly after the full execution of this Memorandum.... [It] is anticipated to be the form of agreement (“Standard Form Agreements”) used by [Posec] to sell other newly constructed condominium units in the Building in the same selling phase, and will reflect, among other items, the following:
....
2. Purchase Price. The Purchase Agreement shall provide that total purchase price for the eight individual condominium[s] comprising the Property will be three million three hundred forty [sic] thousand Dollars ($3,345,000) (the “Purchase Price”) with each unit being priced [as] follows in accordance with the unit numbers reflected in the plan:
+---------------------------------+
¦Unit A1¦$455,000¦Unit C1¦$325,000¦
+-------+--------+-------+--------¦
¦Unit A2¦$455,000¦Unit C2¦$325,000¦
+-------+--------+-------+--------¦
¦Unit B1¦$525,000¦Unit C3¦$325,000¦
+-------+--------+-------+--------¦
¦Unit B2¦$575,000¦Unit C4¦$360,000¦
+---------------------------------+
The Purchase Price will be paid as follows:
a. Within five business days of the full and complete execution of this Memorandum by [Land Mark] and [Posec], and in consideration of paragraph 5 herein and notwithstanding any contrary provision in the Purchase Building, [Land Mark] will pay a non-refundable deposit of One Hundred sixty seven thousand two hundred fifty Dollars ($167,250) (the “Deposit”) representing five percent (5%) of the Purchase Price....
b. The balance of the purchase price ... shall be payable at closing of the sale of the Property to [Land Mark], its nominee [or] assignee. Notwithstanding anything to the contrary, the property need not be sold as one single transaction, but may be sold by [Posec] to [Land Mark] or its nominee or assignee as eight separate transactions which may close on different dates.
....
5. Exclusive Right to Enter into Purchase Agreement. [Land Mark] shall have the exclusive right to negotiate and enter into the Purchase Agreement for purchase of the Property from [Posec]. [Posec] hereby agrees not to offer for the sale or negotiate the sale of the property or other conveyance to any third party.
6. Standard Form Agreement. [Posec] agrees to provide [Land Mark] with a complete set of Standard Form Agreements for the purchase of each of the eight condominium units comprising the Property after the date of this Memorandum.
7. Assignment. [Land Mark] will have the right to assign its rights and delegate its obligations under the Purchase Agreement to third party assignees.
This Memorandum is intended to indicate the present [intent] of the parties with respect to the Property and, except for agreements contained in Paragraphs 2, 5, 6 and 7 above, shall not be construed to constitute a binding agreement with respect thereto. Except for the obligations created in Paragraphs 2, 5, 6 and 7, neither party may claim any legal rights against the other by reason of the signing of this Memorandum. Neither party may rely on any act, omission, communication, circumstance or fact [that] may be inconsistent with this paragraph.
Upon the full execution of the Memorandum, [Posec] will immediately prepare and forward to [Land Mark] the Standard Form Agreement for each of the eight condominium units comprising the Property in accordance with the terms of this Memorandum.
(Emphasis added).
On July 1, 2004, Hong Lee (“Lee”), Posec's coordinator on the Project, telephoned Shin and told him that he would fax Standard Form Agreements for Shin to sign. According to Shin, he received only three pages of a DRSC from Lee. Shin said that Lee “expressed great urgency in getting [Shin] to sign the DRSC and send the cashier's check.” Lee allegedly told Shin “not to worry because [Shin] had a binding MOU signed by Posec's CEO.”
On July 1, 2004, Shin signed and, on July 2, 2004, faxed back a single DRSC signature page to Lee. Jun's countersignature is dated July 8, 2004. Lee contends that, pursuant to Shin's authorization, he attached the single signature page to eight separate DRSCs. Shin disputes that he authorized Posec to use the same signature page for eight different contracts. Each DRSC pertains to one of the eight condominium units and provides a purchase price identical to those found in the MOU.
Above Shin's signature, the DRSC states:
By signing this page, Buyer acknowledges having read this Contract, including the attached Addendum “A”, in full and is aware of and accepts the terms, conditions, limitations and disclaimer of warranties described herein, and acknowledges that if Seller accepts this offer, this Contract is the entire agreement between the parties.
According to Shin, despite his affirmation in the DRSC, he was not presented with and did not see Addendum “A” before he signed the DRSC. Lee agrees, stating that he did not fax the Addendum “A” along with the DRSC to Shin “because it's too thick, and he told me he is going to, going to pick up here in Hawaii.” Shin does not deny that he thereafter received the Addendum “A”, but does not say when he received it.
Addendum “A” reiterates that the DRSC and the Addendum “A” (collectively, the “Contract”) “is the entire Contract between Seller and Buyer.” In addition, it adds that “Anything which [sic] Seller and Buyer have talked about in any negotiations, any promise, and any past understanding or agreement (whether in writing or not) is cancelled if not contained within this Contract.” Addendum “A” explains that the Contract is a non-binding reservation and can be terminated at any time by either party, with or without cause, until the effective date for a contingent final public report or the issuance of a final public report by the Hawai‘i Real Estate Commission.
Shin express mailed a cashiers check for $167,250.00 to Lee, who said, according to Shin, that he would place the money in escrow accounts for the eight...
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...Haw. 178, 181, 489 P.2d 636, 638 (1971). "[A]greements to agree are unenforceable." Globalmart, Inc. v. Posec Hawaii Inc., 127 Hawai‘i 412, 279 P.3d 77, No. 28249, 2012 WL 1650697 at *7 (App. May 10, 2012) (mem.); see also Honolulu Waterfront Ltd. P'ship v. Aloha Tower Dev. Corp., 692 F. Su......
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