Moran v. Guerreiro, 22910.
Citation | 37 P.3d 603,97 Haw. 354 |
Decision Date | 29 November 2001 |
Docket Number | No. 22910.,22910. |
Parties | Robert Norton MORAN, Plaintiff-Appellant, v. Walter P. GUERREIRO, as Special Administrator of the Estate of Nuha Kahalewai, Deceased; as Special Administrator of the Estate of Nana Kahalewai, Deceased; as Trustee Under the Last Will and Testament of Manuel Guerreiro, Deceased; and Individually, Defendant-Appellee, and John Does 1-50, et al., Defendants. |
Court | Court of Appeals of Hawai'i |
Stephen T. Hioki, on the brief, for plaintiff-appellant.
Walter P. Guerreiro, defendant-appellee, pro se (no brief submitted).
The lawsuit underlying this appeal was brought by Plaintiff-Appellant Robert Norton Moran (Moran or Mr. Moran) to enforce a contract for the sale of real property and to obtain damages resulting from the alleged breach of the contract. Applying its "inherent equity and supervisory powers as well as its inherent power to control the litigation process[,]" the Circuit Court of the First Circuit (the circuit court) dismissed Moran's complaint with prejudice, and set aside an agreement that had been reached to settle the lawsuit.
We conclude that the circuit court did not err in setting aside the settlement agreement. However, we conclude that the part of the circuit court's order that dismissed Moran's complaint with prejudice must be set aside. We remand for further proceedings consistent with this opinion.
Moran is a licensed real estate broker. It appears from the record that on August 16, 1990, Moran and Defendant-Appellee Walter P. Guerreiro (Guerreiro or Mr. Guerreiro) signed a Deposit, Receipt, Offer and Acceptance (DROA) (the August 16, 1990 DROA), by which Moran agreed to purchase, and Guerreiro agreed to sell, certain real property located in Hale`iwa, O`ahu (the subject property) for $495,000.00.1
Thereafter, it was apparently discovered that Guerreiro could not convey clear title to the entire subject property, which consisted of three separate parcels. Parcel 1, identified under Tax Map Key (TMK) X-X-XXX-XXX and title to which stemmed from Land Commission2 Award (L.C.Aw.) No. 7342, included 14,475 square feet of land. Pursuant to an order entered by the circuit court in Special Proceeding No. 86-1007, Guerreiro, as Trustee under the Last Will and Testament of Manuel Guerreiro, Deceased (Manuel's Estate), had the authority to sell Parcel 1. Guerreiro, as Trustee for Manuel's Estate, held similar authority to sell Parcel 2, title to which stemmed from L.C. Aw. Nos. 2725, 2692, 3940, 2699, and 3373-B. Parcel 3, which encompassed about two-thirds of an acre and title to which stemmed from L.C. Aw. No. 2752, was owned as follows:
Parcels 2 and 3, which encompassed a total of 211,384 square feet of land, had been consolidated for tax assessment purposes under TMK X-X-XXX-XXX.
The subject property thus included lands under two TMK numbers, title to which stemmed from a total of seven awards by the Land Commission (hereafter, L.C. parcels).
Sharpe was alive when the August 16, 1990 DROA was executed. To rectify his inability to convey clear title to the subject property, Guerreiro sought and obtained orders from the circuit court, dated June 20, 1991, in Special Proceeding Nos. 91-208 and 91-207, naming himself as Special Administrator for Nuha's and Nana's Estates, with authority to sell the respective interests of those estates in Parcel 3.
Following the signing of the August 16, 1990 DROA and the entry of the orders naming Guerreiro as Special Administrator for Nuha's and Nana's Estates, Guerreiro's then-attorney prepared a deed by which the various undivided interests in the subject property would be conveyed to Moran. Sharpe signed and acknowledged the deed before a notary public on May 7, 1992. Guerreiro was to sign the deed as Special Administrator for Nuha's and Nana's Estates and as Trustee for Manuel's Estate at the closing of escrow on the subject property. It appears, however, that the closing never occurred, in part, because Moran could not obtain the necessary financing.
By a letter to Guerreiro dated June 29, 1993, Moran proposed terms for a new DROA for the subject property. The letter stated, in relevant part, as follows:
(Emphasis in original.)
On July 1, 1993, Guerreiro handwrote a counterproposal at the bottom of Moran's letter. Essentially, Guerreiro agreed to Moran's terms but insisted that he be paid an additional $9,378.00, by separate check, to compensate Guerreiro for the rental income he had lost after evicting, at Moran's request, the tenants who had been leasing houses on the subject property.
By a DROA dated July 31, 1993,3 Moran formalized his offer to purchase the subject property from Guerreiro for $359,378.00, to be paid as follows:
$ 15,000.00 Initial deposit in cash $ 9,378.00 Additional cash deposit, to be paid into escrow on or before closing $150,000.00 Balance of down payment, to be paid into escrow before closing ___________ $174,378.00 Total cash funds from Moran (exclusive of closing costs) $200,000.00 By way of lease option on remaining property, as described in special terms to the DROA. Moran to have 36 months or less to exercise this option, and during this period, Moran to pay $5,904.00 per month rent. Upon exercising this option all rents except 4% would go toward the principal balance. $359,378.00 Total Purchase Price
The special terms that Moran listed in paragraph C-67 of the July 31, 1993 DROA were as follows:
1. This offer does not replace existing offer, dated June 29 & July 1, 1993 unless this offer is accepted. 2. Upon payment of $150,000 Seller to deed to Buyer [L.C. Aws.] 2692, 2725, 3940, 3378-B [sic], 2699 & 2752 shown on tax map. Zone 6, section 2, plat 4, island of Oahu. 3. Upon excercise [sic] of option, Seller will deed to [L.C. Aw.] 7342, TMK 6-2-4 Oahu. 4. During lease option period Buyer will have normal tenant rights to [L.C. Aw.] 7342 and improvements. 5. Buyer to [sic] adddtional [sic] [$]9,378.00 at closing to reimburse Sllers [sic] for lost rental income[.] 6. On execution of this agreement by both parties, both parties agree that the DROA date 8/13/90 [sic] between Moran/Guerreiro becomes null and void[.] 7. The majority of the down payment is coming from the Sale [of] 66-138A Walikanahele. The balance from the buyers [sic] share of the commission and Buyers [sic] deposit[.] 8. Balance of [$]200,000 or less will be from a 1031 [exchange.4]
(Footnote added.) Under Moran's proposal, then, Moran would get title to Parcels 2 and 3 at closing, lease Parcel 1 at a monthly rent of $5,904.00, and have a three-year option to purchase the fee interest in Parcel 1 for $200,000.00. Since Moran's proposal provided that upon exercise of the option to purchase Parcel 1, all rents paid by Moran, "except 4%" (the taxes), "would go toward the principal balance," and since $200,000.00 divided by 36 (months) is equal...
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