Morioka v. Lee
| Decision Date | 27 August 2014 |
| Docket Number | No. CAAP–13–0001761.,CAAP–13–0001761. |
| Citation | 134 Hawai'i 114,334 P.3d 777 (Table) |
| Parties | Betsy Akiko MORIOKA, Plaintiff–Appellee, v. Kimberly Ann Eiko LEE and Daniel Morris Lee, Defendants/Cross–Claim Plaintiffs/Plaintiffs/Appellants and Hawaii State Federal Credit Union, Defendant/Cross–Claim Defendant/Appellee, and City and County of Honolulu, Department of Budget and Fiscal Services, Defendants–Appellees, and John and Jane Does 1–20, Doe Corporations 1–20, Doe Government Units 1–20, and Doe Entities 1–20, Defendants (Civil No. 08–1–0996). Kimberly Ann Eiko Lee and Daniel Morris Lee, Plaintiffs–Appellants, v. Betsy Akiko Morioka, Defendant–Appellee, and John Does 1–10, Jane Does 1–10, Doe Partnerships 1–10, Doe Corporations 1–10, and Doe Governmental Entities 1–10, Defendants (Civil No. 08–1–1280). |
| Court | Hawaii Court of Appeals |
Gale L.F. Ching, on the briefs, for Defendants/Cross–Claim Plaintiffs/Plaintiffs/Appellants Kimberly Ann Eiko Lee and Daniel Morris Lee.
Eric H. Tsugawa, Tedson H. Koja, (Tsugawa Biehl Lau & Muzzi), on the briefs, for Plaintiff/Defendant/Appellee Betsy Akiko Morioka.
FOLEY, Presiding J., REIFURTH and GINOZA, JJ.
Defendants/Cross–Claim Plaintiffs/Plaintiffs/ Appellants Kimberly Ann Eiko Lee (Kimberly ) and Daniel Morris Lee (Daniel ) (collectively, the Lees ) appeal from the following, all filed in the Circuit Court of the First Circuit1 (circuit court ):
(1) the April 25, 2012 “Orders Re: 1) Granting in Part. and Denying in Part [the Lees'] Motion for Stay of Enforcement of Court's November 8, 2010 Oral Ruling and Subsequent Order and Judgment Pending Appeal; and 2) Granting Betsy Morioka's Motion to Amend Order Granting in Part and Denying in Part [the Lees'] Motion for Stay of Enforcement of Court's November 8, 2010 Oral Ruling and Subsequent Order and Judgment Pending Appeal and/or Motion to Expunge Lis Pendens” (Orders Re: Stay of Enforcement );
(2) the April 25, 2012 “Second Amended Order Granting in Part and Denying in Part Betsy Morioka's Motion to Dismiss and/or for Summary Judgment Filed on July 22, 2010” filed on April 25, 2012 (Second Amended Order );
(3) the April 25, 2012 “Order Granting Betsy Akiko Morioka's Motion to Amend Order Granting in Part and Denying in Part Betsy Morioka's Motion to Dismiss and/or Motion for Summary Judgment Filed on July 22, 2010” (First Order ); and
(4) the June 27, 2013 “Amended Judgment Re: Order Granting in Part and Denying in Part Betsy Morioka's Motion to Dismiss and/or for Summary Judgment, Filed on July 22, 2010, and Interlocutory Decree of Partition” (Amended Judgment ).
On appeal, the Lees contend the circuit court erred by:
(1) failing to apply the applicable law and standards in its ruling on Plaintiff/Defendant/Appellee Betsy Akiko Morioka's (Betsy ) July 22, 2010 Motion to Dismiss and/or for Summary Judgment (Motion to Dismiss/Summary Judgment );
(2) granting the Motion to Dismiss/Summary Judgment under the standards of a Hawai‘i Rules of Civil Procedure (HRCP ) Rule 12(b) motion; and
(3) improperly addressing various claims made by the Lees in their Complaint, Civil No. 08–1–1280, filed June 25, 2008 (Lees' Complaint ).
Betsy is Kimberly's mother and Daniel's mother-in-law. This case arises from a dispute between Betsy, on one hand, and Kimberly and Daniel, on the other, over the terms of an oral agreement and whether Kimberly and Daniel are entitled to 50%, as Betsy contends, or 100%, as Kimberly and Daniel contend, of a family residence. Betsy brought an action to partition the property. The Lees, in turn, brought suit asserting claims for specific performance (Count I), promissory estoppel/part performance/detrimental reliance (Count II), breach of oral contract (Count III), fraud and misrepresentation (Count IV), unjust enrichment (Count V), conversion (Count VI), intentional and/or negligent infliction of emotional distress (IIED/NIED ) (Count VII), punitive damages (Count VIII), and for restitution and/or reimbursement (Count IX).
Based on summary judgment rulings, the circuit court entered judgment in favor of Betsy and against the Lees on Betsy's partition action and Counts I–IV and VI–VIII of the Lees' claims. The Lees appeal concerns two cases consolidated in the circuit court, Civil No. 08–1–0996 and Civil No. 08–1–1280. This interlocutory appeal is before us pursuant to Hawai‘i Rules of Civil Procedure (HRCP ) Rule 54(b).
In February 1958, Betsy married Roy Likio Morioka (Roy ) and they had three children, including Kimberly. Kimberly married Daniel in February 1978 and they had a son.
Prior to 1998, Betsy lived with Roy and Roy's mother, Sumiyo Morioka (Sumiyo ) in a residence located at 98–062 Lokowai Street, Aiea, Hawai‘i 96701 (Property ).
Betsy had worked as a residential loan officer for the Bank of Hawai‘i from 1959–1995; a manager for the O‘ahu Educational Federal Credit Union from 1995–2001; a senior loan officer for Mortgage Connections, Inc. from 2001–2007; a loan consultant at Country Wide Home Loans in 2007; and an executive loan officer at P.C.L. Hawai‘i also in 2007.
In the latter part of 1997, Betsy approached Daniel and Kimberly with a proposal whereby the Lees would care for Roy and Sumiyo, maintain the Property, and pay certain debts under Betsy's name in exchange for either 100% of Betsy's interest in the Property (according to the Lees) or 50% of Betsy's interest (according to Betsy) (oral agreement ).
A Uniform Loan Application, approved on November 19, 1997, reflects that Kimberly and Daniel borrowed $160,000 against the Property, with title to be held by Kimberly, Daniel, and Roy, “T/E—Severalty as Whole Joint Tenants.”
As of December 1997, the appraised value of the Property was $248,000.
On March 11, 1998, Kimberly, Daniel, and Roy signed a Note promising to pay Lender, Defendant/Cross–Claim Defendant/Appellee Hawaii State Federal Credit Union (HSFCU ), $160,000 with interest at a yearly rate of 6.56%.
On March 13, 1998, the Lees and Roy settled a debt of $106,609.32 against the Property and the Lees and Roy received $53,540.68 in cash. The Settlement Statement was signed by Daniel, Kimberly, Roy, and Betsy.
On March 18, 1998, Betsy and Roy executed a deed granting Betsy and Roy an undivided½ interest in the Property and an undivided½ interest in the same Property to the Lees. Daniel testified that Betsy requested to remain on the title to the Property for tax purposes and that the Lees agreed to this arrangement.
In September 2003, the Lees, Betsy, and Roy encumbered the Property with a Revolving Credit Mortgage (Property Mortgage ) in favor of HSFCU, which secured a credit line of up to $210,000 for the Lees and Roy. Betsy was not personally obligated to make payments under the terms of an Accommodation Rider.
Roy died on May 9, 2007 and Sumiyo died in July 2007.
In September 2007, Betsy, through her attorney, offered the Lees $250,000 for their alleged 50% interest in the Property, which she stated was valued at $599,500. Under the terms of Betsy's offer, the Lees would still be responsible for loans and mortgages against the Property.
By letter dated October 9, 2007, the Lees' attorney, responded to Betsy's offer. It was the Lees' understanding that they received clear title to the Property as part of an 1998 agreement whereby they would care for Roy and Sumiyo and pay approximately $106,000 of Betsy's debts. The Lees counter-offered $100,000 to Betsy for her interests in the Property. The Lees' counter-offer represented Betsy's half of the assessed value of the Property minus costs of Property improvements, maintenance, property taxes, wages Daniel lost by quitting his paid employment to care for Roy and Sumiyo, and the Lees' time and labor. Betsy rejected the counter-offer.
By letter dated November 16, 2007, the Lees stated they were attempting to obtain a loan “to amicably resolve this matter with [Betsy].” The Lees submitted a loan application for Betsy's review by facsimile on December 7, 2007.
By Conditional Loan Approval Notice dated January 23, 2008, the Lees were informed they qualified for a $450,000 mortgage. The Lees advised Betsy of the conditional loan approval, a $525 appraisal fee requirement to complete the refinancing, and, referring to an earlier representation that they could provide $200,000 of the approximately $250,000, that payment of the additional $50,000 could be negotiated.
By letter dated February 5, 2008, Betsy informed the Lees that she required an unconditional loan commitment letter and payment of the $50,000 balance within one year at 7% interest evidenced by a promissory note and secured by a second mortgage on the Property.
By letter dated February 13, 2008, the Lees responded that Betsy should be responsible for the $525 appraisal fee; they would pay the $50,000 at the prevailing rate of interest and not 7%; and that a second mortgage was “not obtainable.”
By letter dated February 21, 2008, Betsy rejected responsibility for the appraisal fees and stated the 7% interest rate was not negotiable. On March 4, 2008, the Lees responded they were proceeding with the loan and expected to close within thirty days. On March 12, 2008, Betsy requested further clarification; reiterated her required terms for the conveyance of the Property to the Lees; and advised that she was preparing to litigate the issue.
By letter dated April 7, 2008, the Lees responded they would pay $200,000 for Betsy's interest in the Property and that this $200,000 was “really in addition to the earlier [amount] that was previously paid by the [Lees] to pay off [Betsy's] earlier debts pursuant to the parties' earlier family agreement....” Betsy rejected the Lees' offer.
On May 16, 2008, Betsy filed a Complaint for Partition in Civil No. 08–1–0996 for partition of interests in the Property against the Lees, HSFCU and the City and County of Honolulu Department of Budget and Fiscal Services.
On June 25, 2008, the Lees filed their first complaint alleging claims to Counts I–VIII. On June 21, 2010, in their Motion...
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