Ober v. Lighter, No. 26964 (Haw. App. 2/28/2008)
| Decision Date | 28 February 2008 |
| Docket Number | No. 26964.,26964. |
| Parties | RONALD ALAN OBER, Plaintiff-Appellee/Cross-Appellant and WILLIAM S. GARDNER, Plaintiff-Appellee v. ERIC AARON LIGHTER; ERIC AARON LIGHTER, as Trustee of Credit Bureau International Trust; ERIC AARON LIGHTER, as Trustee of Integrity Five Trust, Defendant-Appellant/Cross-Appellee, and MITCH C. WALLIS, as Trustee of Volcano Ventures Trust, Defendant/Cross-claim Defendant, and JOAN ELIZABETH PRESCOTT, as Trustee of Credit Bureau International Trust; CREDIT BUREAU INTERNATIONAL TRUST, a Hawaii Trust, ROOT OF 25 LTD., a Hawaii corporation, Defendants/Cross-claimants-Appellants/Cross-Appellees. |
| Court | Hawaii Court of Appeals |
APPEAL FROM THE CIRCUIT COURT OF THE THIRD CIRCUIT (CIVIL NO. 99-217).
On the briefs:
Eric Aaron Lighter Pro Se Defendant-Appellant/Cross-Appellee.
Preston A. Gima, for Defendants-Appellants/Cross-Appellees Credit Bureau International Trust, Integrity Five Trust, Joan Elizabeth Prescott, as Trustee of Credit Bureau International Trust, and Square Root of 25 Ltd.
Enver W. Painter, Jr. for Plaintiff-Appellee/Cross-Appellant Ronald Alan Ober.
In this consolidated appeal and cross-appeal, Defendant-Appellant/Cross-Appellee Eric Aaron Lighter (Lighter), Defendants/Cross-Claimants-Appellants/Cross-Appellees Credit Bureau International Trust (CBIT), Integrity Five Trust (IFT), Joan Elizabeth Prescott as trustee of CBIT (Prescott), and Square Root of 25 Ltd. (collectively the CBIT Defendants), and Plaintiff-Appellee/Cross-Appellant Ronald Alan Ober (Ober) appeal from the Amended Final Judgment as to All Claims and All Parties filed October 19, 2004 (Amended Final Judgment) in the Circuit Court of the Third Circuit, Hilo Division (circuit court).1
On appeal, CBIT Defendants contend that the circuit court erred by: (1) inappropriately granting Ober an equitable lien on the Old Volcano Highway Property (OVHP), (2) improperly convincing Ober to make a Hawaii Rules of Civil Procedure (HRCP) Rule 15(b) motion and subsequently granting the motion, (3) denying CBIT Defendants' motion to alter or amend the judgment, (4) finding that the CBIT Defendants received unjust enrichment, (5) concluding Ober was entitled to equitable remedies, (6) denying CBIT Defendants' motion for summary judgment and/or judgment on the pleadings filed on July 8, 1999, (7) denying CBIT Defendants' motion for a new trial, (8) awarding Ober costs and attorney's fees, (9) entering findings of fact (FsOF) 7, 8, 11, 12, 18, 34, 37, 41, and 64, (10) entering conclusions of law (Cs OL) 17, 18, and 20, (11) refusing to admit exhibits 707 and 1100, (12) entering judgment against CBIT without any substantial basis therefore, and (13) failing to grant Lighter's motion for award of taxation of costs filed November 12, 2004.2
Lighter argues that the circuit court erred by: (1) "not granting Lighter's joinder to the CBIT Motion for Summary Judgment,"3 (2) "denying in whole or in part Lighter's Motions in Limine" (MsIL), (3) granting Ober's MIL, (4) "denying the admission at trial of certified copies of exhibits, 1003, 1006, 1007, 1009, as well as exhibits 707 and 1100," (5) "not granting the CBIT Defendants's motions for directed verdict regarding all of Ober's claims," (6) soliciting Ober's HRCP Rule 15(b) motion to amend the complaint, (7) granting Ober's HRCP Rule 15(b) motion, (8) entering FsOF 7, 12, 18-21, 23, 28, 30, 32-34, 36, 37, 44, and 52, and several unspecified CsOL, (9) granting Ober's "Motion for an Award of Prejudgment Interest, Taxation of Costs and Award of Attorney's Fees," (10) failing to grant Lighter's "Motion for Award of Taxation of Costs" filed on November 12, 2004, (11) entering a judgment against CBIT Defendants and Lighter, (12) not granting Lighter's motion to alter or amend the judgment, and (13) not granting Lighter's motion for a new trial and/or for remittitur.
On cross-appeal, Ober argues that the circuit court erred in: (1) granting an equitable lien instead of rescinding the contract to convey the OVHP, (2) not finding that Lighter fraudulently induced Ober to convey the OVHP, (3) finding no enforceable agreement between Lighter and Ober for the return of the OVHP to Ober, (4) excluding the testimony of Appraiser Jill Chavez,4 and (5) concluding an award of punitive damages was not warranted.
After a careful review of the record and briefs submitted by the parties, and having given due consideration to the arguments advanced and the issues raised, we conclude that: (1) the circuit court erred in concluding that Ober did not prove that he was fraudulently induced to convey title of the OVHP and assign the lease and an option to purchase the Second Street Property (SSP) to Lighter; therefore, Ober is entitled to rescission of both the contract conveying the OVHP and the assignment of the Lease and Option to Purchase the SSP, (2) there is substantial evidence in the record to support those FsOF which were properly challenged by Lighter and CBIT Defendants, (3) the circuit court was correct in denying CBIT Defendants' motion for judgment as a matter of law and in denying Lighter and CBIT Defendants' motion for a directed verdict, (4) the circuit court did not abuse its discretion in denying CBIT Defendants' and Lighter's motion for a new trial and for remittitur, (5) the circuit court did not abuse its discretion in denying Lighter's motion to alter or amend the judgment, (6) Lighter's point of error regarding the circuit court's partial grant of Ober's MIL and denial of Lighter's MsIL is waived, (7) the issue of the admission of exhibits 1003, 1006, 1007, 1009, 707, and 1100, is deemed waived because Lighter and CBIT Defendants failed to argue this point of error, (8) the circuit court did not improperly solicit a HRCP Rule 15(b) motion from Ober and was correct in granting it, (9) the circuit court did not abuse its discretion in awarding Ober costs and attorney's fees, (10) the circuit court did not abuse its discretion in granting Ober's motion for an award of prejudgment interest, and (11) the circuit court did not abuse its discretion in denying Ober an award of punitive damages. Accordingly, we vacate and remand.
Based on the trial transcripts and exhibits, as well as the circuit court's FsOF which were either not properly challenged on appeal or which we have found were not clearly erroneous, the relevant background facts are as follows.
On June 6, 1989,5 Ober purchased the SSP located in the Mauna Loa Estates Subdivision, Volcano, Hawai`i. After obtaining all the necessary permits for construction on the SSP, Ober constructed two duplexes. The circuit court found that Ober spent approximately $70,000 for materials in making the improvements and another $10,000 in purchasing furniture and appliances. Ober used the units on the SSP as a vacation rental business, which he called "Volcano Inn."
Thereafter, Ober decided to both expand his business and build his dream house. On July 21, 1995, Ober purchased the OVHP6 from Robert Garland (Garland). Ober and Garland agreed to a $140,000 purchase price for the OVHP, consisting of a down payment of $15,000 and a $125,000 purchase money mortgage in favor of Garland.
At about the same time Ober purchased the OVHP, he became acquainted with various organizations promoting certain theories concerning the constitutionality of federal income taxes, and independence from governmental regulations. Ober attempted to utilize some of these "freedom technology" theories in connection with the improvements of the OVHP. Ober wrote to the County of Hawaii announcing his independence from its regulation and thereafter began the construction of a five bedroom house on the OVHP.
Meanwhile, Ober created an unincorporated trust called "Volcano Ventures" (VV trust) for which he named Mitch C. Wallis (Wallis), an Arizona attorney, as trustee. Ober testified that Wallis was referred to him by Lamarr Hardy of the Research Foundation, one of the "freedom technology" organizations. On October 3, 1995, Ober conveyed all rights, title, and interest in the OVHP to Wallis as trustee of the VV trust, to be held in trust for Ober. Ober testified that one of the reasons he placed his property in VV trust was so the property would be exempt from government regulations.
Because Ober did not obtain the required building permits prior to commencing construction on the OVHP, the Building Division, Department of Public Works, County of Hawai`i issued a "Stop Work Order" on November 20, 1995. Nevertheless, Ober continued to build in violation of the order. Thereafter, on January 10, 1996 in Civil No. 96-6, Ober was sued by his neighbor, Gilbert Livingston (Livingston), who alleged that the construction of the improvements on the OVHP without building permits was improper and should be enjoined. The circuit court agreed with Livingston and, on April 9, 1996, granted a motion for a preliminary injunction enjoining Ober from further construction on the OVHP until he obtained all the necessary permits. Ober testified that on that same day, while he was at the OVHP, police officers handed him the injunction order and arrested him. Ober was jailed on charges of violating the preliminary injunction and served with a second criminal complaint for building without a permit.
A few months later, Ober was introduced to Lighter by R.J. Smith, an individual putting on one of the "freedom technology" seminars. Lighter was not licensed to practice law, but agreed to help Ober with his criminal case as well as the Livingston case for a fee of $10,000. Lighter told Ober that he had considerable experience as a litigator and that he had numerous victories representing others who had legal problems similar to Ober's. Lighter also...
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