Kahuku Agr. Co. (Hawaii), Inc. v. P.R. Cassiday, Inc., 11060

• Decision Date: 08 October 1986
• Docket Number: No. 11060,11060
• Citation: 68 Haw. 625,725 P.2d 1186
• Parties: KAHUKU AGRICULTURAL CO. (HAWAII), INC., Plaintiff-Appellant, v. P.R. CASSIDAY, INC. and Trustees Under the Will and of the Estate of James Campbell, Deceased, Defendants-Appellees, and H.C. Cornuelle, Inc., F.E. Trotter, Inc. and W.H. McVay, Inc., Defendants.
• Court: Hawaii Supreme Court

Page 1186

725 P.2d 1186

68 Haw. 625

KAHUKU AGRICULTURAL CO. (HAWAII), INC., Plaintiff-Appellant, v. P.R. CASSIDAY, INC. and Trustees Under the Will and of the Estate of James Campbell, Deceased Defendants-Appellees, and H.C Cornuelle, Inc., F.E. Trotter Inc. and W.H. McVay Inc., Defendants.

No. 11060.

Supreme Court of Hawai'i.

Oct. 8, 1986.

Syllabus by the Court

Once a prevailing party is determined, a trial court has no discretion concerning whether or not to award fees. The mandatory language of Hawaii Revised Statutes § 607-17 provides that certain stated rates for attorney's fees "shall prevail and shall be awarded to the successful party, whether plaintiff or defendant."

Charles M. Tonaki (Hong, Iwai & Hulbert, Honolulu, of counsel), for plaintiff-appellant.

M. Eleanor Herberg (Wayne Nasser and Michael W. Gibson, with her on the brief; Ashford & Waiston, Honolulu, of counsel), for defendants-appellees.

Before LUM, C.J., and NAKAMURA, PADGETT, HAYASHI and WAKATSUKI, JJ.

LUM, Chief Justice.

Plaintiff-Appellant Kahuku Agricultural Co., Inc. (Appellant), appeals from that part of a judgment of the Circuit Court of the First Circuit denying it attorney's fees and deposition costs. This appeal arises from an action brought by Appellant for declaratory judgment against Defendants-Appellees P.R. Cassiday, Inc., and Trustees under the Will and of the Estate of James Campbell, Deceased (Appellees), to be restored to possession, use and enjoyment of certain agricultural land at Kahuku, Oahu, Hawaii. Since we conclude that Appellant was the prevailing party in the action below, we reverse and remand to the lower court to determine the amount of attorney's fees and costs Appellant should receive.

I.

Appellant had leased agricultural property from Appellees since 1973. On October 11, 1984, Appellees sent a letter to Appellant claiming that it had defaulted on the lease by violating several of its covenants. Appellant denied some of the violations and claimed that it had corrected many of the others. Further correspondence took place. Eventually, Appellees terminated the lease and locked out Appellant. On January 16, 1985, Appellant applied for and obtained a temporary restraining order enabling it to enter the premises and exercise its rights under the lease. Appellant later obtained a permanent injunction.

At the same time Appellant applied for a temporary restraining order, Appellant also filed a Complaint for Declaratory Judgment. In essence, the Complaint recited the alleged violations of the lease provisions and the responses by Appellant. In addition, the Complaint alleged (1) that the violations of the lease provisions had been substantially corrected, (2) that preventing Appellant's employees from entering the premises was unreasonable, (3) that Appellees' interpretation and administration of the lease provisions were unreasonable, and (4) that Appellant would suffer irreparable damages should Appellees be allowed to keep Appellant's employees off the premises. Appellees denied these additional allegations.

Appellant then prayed that the court interpret the provisions of the lease under dispute, determine Appellees' interpretation and administration of the lease provisions to be unreasonable and enjoin Appellees from preventing Appellant's employees from entering the premises and exercising Appellant's rights under the lease.

In a jury-waived trial, the trial judge declared that "the Court [did] not intend to change the lease provisions" and that most of the violations or deficiencies cited in Appellees' first letter were substantially cured. The only alleged violations the court considered were claims that Appellant had failed to: (a) cultivate the maximum amount of arable land, and (b) practice good agricultural husbandry, both as required under the lease. The court determined that Hurricane Iwa and poor market conditions created circumstances which excused Appellant from cultivating the maximum arable acreage. It also found that Appellant had not violated the covenant to practice good agricultural husbandry.

Subsequent to the court's rendering of its oral decision and prior to its filing of the Findings of Fact and Conclusions of Law, Appellant moved for taxation of costs and attorney's fees, which motion was heard on March 29, 1985. At the conclusion of the hearing, the court denied Appellant's request for attorney's fees and costs incurred by way of transcripts of pre-trial depositions but allowed Appellant to recover $95.00 for filing and Deputy Sheriff's service fees. This appeal follows.

II.

One of the provisions of the lease requires the lessee to pay all of the expenses of the lessor in enforcing the lease terms. Specifically, the lease provides as follows:

(11) Expenses of Lessors. That the Lessee will pay to the Lessors on demand, as incurred or at any time thereafter, all costs and expenses including reasonable attorneys' fees incurred by the Lessors in enforcing any of the Lessee's covenants herein contained or remedying any breach thereof, in recovering possession of said premises or any part thereof, in collecting any delinquent rent, taxes or other charges hereunder payable by the Lessee, or in connection with any litigation (other than condemnation proceedings) commenced by or against the Lessee to which the Lessors shall without fault be made parties.

Section 607-17 of the Hawaii Revised Statutes (HRS) provides:

Attorney's fees when provided for in promissory notes, etc. Any other law to the contrary notwithstanding, where an action is instituted in the district or circuit court on a promissory note or other contract in writing which provides for an attorney's fee the following rates shall prevail and shall be awarded to the successful party, whether plaintiff or defendant[.]

HRS § 607-17 (1976).

III.

It is apparent that the trial court below failed to apply the proper standard for determining whether Appellant was entitled to attorney's fees.

We find that this case is controlled by Food Pantry, Ltd. v. Waikiki Business Plaza, Inc., 58 Haw. 606, 575 P.2d 869 (1978). In Food Pantry this court reviewed a circuit court decision not to declare a lessor the prevailing party and refusing to award attorney's fees and costs. There, in deciding that the lessor was the prevailing party, we identified the principle issues raised by the pleading and the proof and noted that all of the issues had been decided in favor of the lessor. 58 Haw. at 620, 575 P.2d at 879. Here we engage in a similar analysis.

Appellant's prayer for relief sought the court to (1) interpret the lease and determine the rights of the parties, (2) determine that the interpretation and administration of the lease was unreasonable, and (3) enjoin the Appellees from preventing Appellant from exercising its rights under the lease.

By excusing the only two lease violations considered at trial, permitting Appellant to remain in possession and issuing a permanent injunction, the trial court awarded Appellant all the relief it sought when it brought the suit. Appellees fail to indicate a single meaningful issue upon which they succeeded below. Based upon the pleadings, we conclude that Appellant was the prevailing party.

Appellees argue that the trial court merely placed the parties back to their original positions as lessee and lessor and that therefore there was no true prevailing party. We cannot concur with Appellee's argument. Appellees engaged in a very serious act of self-help in locking out Appellant. Appellant's only recourse was to bring this action. Since we find Appellant was the prevailing party in this action, Appellees must now bear the responsibility for attorney's fees and costs.

Once a prevailing party is determined, a trial court has no discretion concerning whether or not to award fees. The mandatory language of HRS § 607-17 provides that certain stated rates for attorney's fees "shall prevail and shall be awarded to the successful party, whether plaintiff or defendant." (Emphasis added).

We therefore reverse and remand to the trial court to determine the attorney's fee to be awarded.

IV.

Appellant also claims that it is entitled to its costs for depositions taken below. The trial court withheld such costs premised on its finding that there was no prevailing party. Insofar as we find the Appellant to be the prevailing party, we...