Lahaina Fashions, Inc. v. Bank of Hawai‘i
Decision Date | 07 January 2014 |
Docket Number | No. SCWC–30644.,SCWC–30644. |
Citation | 131 Hawai'i 437,319 P.3d 356 |
Court | Hawaii Supreme Court |
Parties | LAHAINA FASHIONS, INC., a Hawai‘i corporation, Petitioner/Plaintiff–Appellant/Cross–Appellee, v. BANK OF HAWAI‘I, a Hawai‘i corporation; Hawaiian Trust Company, Ltd., as Trustee for Hawai‘i Real Estate Equity Fund; Hawai‘i Real Estate Equity Fund; Pacific Century Trust, a division of Bank of Hawai‘i as Trustee of the Hawai‘i Real Estate Equity Fund, Respondents/Defendants–Appellees/Cross–Appellants. |
Philip H. Lowenthal, Benjamin Lowenthal, Wailuku, Joseph M. Alioto, and James Dombroski, Petaluma, for petitioner.
Terrence J. O'Toole, Judith A. Pavey, and Andrew J. Lautenbach, Honolulu, for respondents.
We hold, first, that depending on the circumstances, a court may recall a jury following a formal discharge if the jury is in the presence of, under the direction of, or subject to the control of the court. Inasmuch as the Intermediate Court of Appeals (ICA) held that a jury cannot be recalled under any circumstances following an order discharging the jury, respectfully, the ICA erred.
Second, a special verdict form cannot be amended simply because the jury "realized that its answers to the special verdict form have caused a result opposite from what it intended," or misunderstood the legal effect of its answer to a special verdict question. Cabral v. McBryde Sugar Co., Ltd., 3 Haw.App. 223, 228, 647 P.2d 1232, 1235 (1982). Thus, we hold that the jurors' statements that they "misunderstood" or "misinterpreted" the legal effect of the statute of limitations question on the special verdict form in this case does not provide a basis for overturning the jury's verdict in favor of Respondents/Defendants–Appellees/Cross–Appellants Bank of Hawai‘i (Bank); Hawaiian Trust Company, Ltd. (Hawaiian Trust); Hawai‘i Real Estate Equity Fund; and Pacific Century Trust (collectively, Respondents) and against Petitioner/Plaintiff-Appellant/Cross-Appellee Lahaina Fashions, Inc. (Petitioner) on this ground.
Third, the question of whether the conversation of the Circuit Court of the Second Circuit (the court)1 with the jurors after the court had initially discharged the jurors constituted an improper outside influence is moot, because the ICA correctly sustained the verdict under Cabral.
Finally, a contract to convey property does not create a trust relationship between the vendor and the purchaser of the property and therefore does not impose any fiduciary duties on the vendor. Restatement (Third) of Trusts (Third Restatement) § 5 cmt. I. Because the only alleged trust identified at trial by Petitioner was effectively a contract to convey property, no trust was created and therefore the ICA did not err in affirming the court's order granting Respondents' motion for Judgment as a Matter of Law (JMOL) on Petitioner's breach of fiduciary duty claim.
For the reasons set forth herein, the April 12, 2013 judgment of the ICA filed pursuant to its February 2, 2013 published opinion is affirmed in part and vacated in part, and the July 8, 2010 final judgment of the court is affirmed.
Until 1994, Petitioner held title to property located at 744 Front Street, Lahaina, Maui. In 1994, however, Petitioner defaulted on a § 2.5 million mortgage loan held by International Savings and Loan. As a result, Petitioner attempted to sell the Property to repay the loan.
On July 7, 1994, Petitioner agreed to sell the Property to Respondents for $6 million. As part of the Purchase and Sale Agreement, Respondents as "Landlord" agreed to lease the Property to Petitioner as " Tenant" for a period of fifty years. Under the terms of the lease, Petitioner retained the option to repurchase the Property (the Option) and sell it for a profit:
(Emphases added.) The lease agreement also stated the parties had negotiated the agreement at arm's length and did not intend to form a partnership or joint venture:
(Emphases added.)
In 1999, Petitioner could not make its rent payments under the lease agreement and consequently defaulted. Subsequently, Pacific Century Trust, a division of the Bank and one of the owners of the Property, filed suit seeking a writ of possession and damages. However, prior to the conclusion of that action, Petitioner filed for bankruptcy in the United States Bankruptcy Court. The bankruptcy court approved the sale of Petitioner's leasehold interest in the Property to Loko Maui, LLC on November 1, 2001,2 in exchange for the payment of Petitioner's arrearage and $250,000. As a result, Pacific Century Trust's suit was dismissed.
On June 25, 2007, Petitioner filed a Complaint, initiating the instant case. The Complaint alleged that Respondents "had no intention of allowing [Petitioner] to exercise the Option," and asserted claims against Respondents for fraud, conspiracy to defraud, breach of fiduciary duty, and tortious interference with prospective business advantage.
At trial, George Weir (Weir), the Bank's senior executive officer at the time it entered the agreement with Petitioner, testified as to whether Respondents owed Petitioner any fiduciary duties:
(Emphases added.) Weir later clarified his testimony on cross-examination:
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