Kiehm v. Adams

Decision Date03 February 2006
Docket NumberNo. 25411.,25411.
PartiesSusan KIEHM, Respondent/Plaintiff-Appellee, v. Ian ADAMS, Petitioner/Defendant-Appellant, and Does 1-10, Defendants.
CourtHawaii Supreme Court

Elizabeth B. Croom, on the writ, for petitioner/defendant-appellant.

MOON, C.J., LEVINSON, NAKAYAMA, and DUFFY, JJ.; and ACOBA, J., Dissenting.

Opinion of the Court by DUFFY, J.

On June 15, 2004, this court granted the application of Petitioner/Defendant-Appellant Ian Adams (Adams) for a writ of certiorari to review the published opinion of the Intermediate Court of Appeals (ICA) in Kiehm v. Adams, No. 25411, 109 Haw. 278, 125 P.3d 499, 2004 WL 926265 (App. Apr. 30, 2004).1 Therein, the ICA vacated the August 21, 2002 judgment and August 29, 2002 writ of ejectment of the District Court of the Third Circuit (the court)2 entered against Adams with respect to the property of Respondent/Plaintiff-Appellee Susan Kiehm (Kiehm) located in Kailua-Kona, Hawai`i. Op. at ___, 125 P.3d at 507. We now reverse the ICA's decision and affirm the judgment of the court.3

I. BACKGROUND
A. Facts

The following background is drawn from the court's undisputed findings of fact and from evidence adduced at trial. Kiehm is the owner and landlord of the subject property, a single family residence. In or around January 2000, Tammy Ayau entered into a oral month-to-month agreement with Kiehm to rent the residence for $1,000 per month.

In or about November 2000, Adams, Ayau's boyfriend at the time, moved into the residence and paid $500 per month to Ayau toward the rent. Ayau explained that she "had to find a roommate because [she] couldn't afford the $1,000 a month," but that she did not "sublet or assign [her] lease [with Kiehm] to [Adams]." Adams testified that he had no written or oral rental agreement with Kiehm. He added, however, that he did have an "agreement with [Ayau]," although he did not elaborate on the type of agreement. During the time Ayau and Adams lived in the residence, Ayau directly deposited both her and Adams' rent into Kiehm's bank account at First Hawaiian Bank.

Ayau recounted that on January 15, 2002, she delivered a letter to Adams notifying him that "he had to be out by February 28th, 2002," and that "there [wa]s someone else moving in on the 1st of April." Adams testified that Ayau often told him and wrote letters to him to move out, but "after the first twenty of them, [he] just started throwing them away. [He] wouldn't even read them." He added, "[Ayau] was constantly threatening to throw me out if I didn't do what she wanted me to do.... [The rental arrangement] was very unsecure [sic], you know." Adams further related that he had not seen Ayau's January 15, 2002 letter prior to the trial.

According to the court's undisputed finding of fact no. 7, "[Kiehm] and Ayau's month to month tenancy was terminated by oral agreement effective March 31, 2002." Ayau testified that she moved out at some unspecified time prior to March 31, 2002. After the end of the rental agreement between Ayau and Kiehm, Adams refused to move out. Kiehm and Adams both testified that on March 28, 2002, Kiehm told him to vacate the premises, but he refused to leave.

Ayau stopped the utility and cable service for the property at the end of the rental agreement. Kiehm then instructed the electric and cable company not to allow Adams or anyone else to restart service without a written rental agreement. Kiehm also stopped water service after the end of the rental agreement and instructed the water company not to allow Adams or anyone else to reinstate service without a written rental agreement.

B. Procedural History

Kiehm filed suit against Adams on April 19, 2002 alleging that Adams was a trespasser and that he had no agreement to be on the premises. Kiehm asked the court for a judgment giving her possession of the property, damages equal to one month's rent, and a writ of possession directing a sheriff or police officer to (1) eject Adams from the property and all persons in possession of the property through Adams, (2) remove all personal belongings of Adams or any other person from the property, and (3) put Kiehm in possession of the property.

Adams counterclaimed on May 14, 2002 alleging that Kiehm (1) substantially interfered with his use of the property, (2) engaged in unfair or deceptive acts or practices in violation of Hawai`i Revised Statutes (HRS) § 480-2 (1993 & Supp.2002),4 (3) maliciously threatened to evict him illegally by stopping his utility service, and (4) failed to disclose the identity of her designated agent for the property pursuant to HRS § 521-43(f) (1993). Adams sought money damages, attorneys' fees and costs, and further relief as the court deemed just and proper.

The case went to trial on June 4, 2002. At the conclusion of the trial, Kiehm argued that the evidence showed that Adams had at most a "permission to remain on the property [from Ayau]—not [a] landlord-tenant agreement [with Kiehm]." The court asked for supplemental briefs regarding "whether or not the landlord is liable to a sublessee under a sub-lease contract," and scheduled a post-trial hearing on that issue for June 25, 2002.

After hearing argument from the parties at the post-trial hearing, the court orally ruled in favor of Kiehm, finding that Adams was a trespasser once the Kiehm-Ayau oral lease terminated. The court entered its findings of fact (findings) and conclusions of law (conclusions) on August 21, 2002. The relevant findings were as follows:

3. [Kiehm] agreed to rent the residence to ... Ayau for $1000 per month on a month to month tenancy approximately two and one-half years ago. This was an oral agreement.

4. ... Ayau agreed to pay electric and cable. [Kiehm] agreed to pay for water service.

5. In approximately November 2000, ... Ayau entered into an agreement with [Adams] to rent part of the residence for $500 per month.

6. [Kiehm] was landlord and ... Ayau was the tenant.

7. [Kiehm] and Ayau's month to month tenancy was terminated by oral agreement effective March 31, 2002.

8. Ayau notified Adams that their agreement would end at that time.

9. ... Ayau received cash from [Adams] and deposited the rent into [Kiehm's] bank account.

10. After termination of the tenancy, [Adams] refused to move out.

11. There was no agreement between [Kiehm] and [Adams].

12. . . . Ayau directed termination of the electric utility and cable service on termination of her tenancy. [Kiehm] then instructed the electric and cable companies not to allow [Adams] or anyone else without a written rental agreement to turn on the utilities in their name.

13. The water service terminated for nonpayment after termination of the lease. [Kiehm] then instructed the water company not to allow [Adams] or anyone else without a written rental agreement to turn on the water in their name.

14. There were no written agreements between ... Ayau, [Kiehm], or [Adams].

The relevant conclusions were as follows:

1. A sublease is a transfer of part of the leasehold term or premises.

2. There is no privity between landlord and sublessee.

3. [Kiehm] and [Adams] had no agreement.

4. A landlord has no rights against a sublessee, and a sublessee has no rights against a landlord arising out of a landlord/tenant relationship.

5. When the month to month lease terminates, the sublease terminates.

6. [Adams] was not entitled to possession upon termination of the lease between Ayau and [Kiehm].

7. [Adams] is not entitled to damages against [Kiehm] for unfair and deceptive trade practices.

....

9. [Adams] is trespassing on the property owned by [Kiehm].

10. [Kiehm] is entitled to a judgment and a writ of ejectment against [Adams].

11. [Kiehm] is entitled to judgment in her favor on all [Adams'] counterclaims.

12. [Kiehm] is entitled to judgment against [Adams] for damages of $1000 per month from April 1, 2002 through and including June 25, 2002 (with per diem damages at the rate of $32.87 for those days in June).

13. [Kiehm] is entitled to her costs and service fees.

14. [Adams] is not entitled to damages against [Kiehm] for [Kiehm's] failure to disclose a local agent.

15. [Kiehm] is not entitled to punitive damages.

Final judgment and the writ of ejectment were entered against Adams on August 21 and 29, 2002, respectively.

On September 20, 2002, Adams filed a notice of appeal from the judgment and the writ. On appeal, Adams challenged findings no. 8 and 11 (to the extent they were conclusions of law) and conclusions no. 3, 5, 6, 7, 9, 10, 11, 12, 13, and 14. Specifically, Adams argued that (1) "the [c]ourt should have held that there is a residential landlord-tenant relationship between Adams (as tenant) and Kiehm (as landlord) governed by [HRS chapter] 521[,]" the Residential Landlord Tenant Code (hereinafter, the Code), and that Adams "is a month-to-month tenant under [HRS] § 521-22[;]"5 (2) the court should have made "[a] specific finding ... that Adams was not given the required notice to terminate his sublease with Ayau[;]" (3) Adams, and not Kiehm, is "entitled to possession" inasmuch as (a) "the voluntary termination of Ayau and Kiehm's lease does not terminat[e] Adams's sublease[,]" (b) by this "voluntary termination," Adams "bec[ame] the immediate tenant of Kiehm[,]" (c) "Adams is entitled to proper notice [from Kiehm] under [HRS] § 521-71(a)6 before his month-to-month tenancy may be terminated[,]" and (d) "Kiehm failed to provide adequate notice to terminate Adams's tenancy[;]" (4) Adams is entitled to damages because "Kiehm willfully caused Adams to go without water and electricity for eight days" in "violation[] of HRS § 521-74.5 [(1993);]"7 and (5) the "[c]ourt should have imposed a fine" against Kiehm for her failure to disclose a local agent to Adams as authorized by HRS § 521-67 [(1993)].8

In response, Kiehm contended that (1) Adams had no agreement with Kiehm when the...

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