Provident Funding Assocs., L.P. v. Gardner, CAAP-17-0000453

• Decision Date: 29 November 2019
• Docket Number: NO. CAAP-17-0000453,CAAP-17-0000453
• Citation: 452 P.3d 766 (Table)
• Parties: PROVIDENT FUNDING ASSOCIATES, L.P., Plaintiff-Appellee, v. Gisele M.L. GARDNER, Defendant/Cross-Claim Plaintiff/Cross-Claim Defendant/Appellant, and Citibank (South Dakota) N.A., Defendant-Appellee, and Travis Wittmeyer; Kanoa Bristol; Blue Wave Investment Solutions, LLC, Defendants/Cross-Claim Defendants/Cross-Claim Plaintiffs/Appellees, and John Does 1-50, Jane Does 1-50, and Doe Entities 1-50, Defendants.
• Court: Hawaii Court of Appeals

452 P.3d 766 (Table)

PROVIDENT FUNDING ASSOCIATES, L.P., Plaintiff-Appellee,

v.Gisele M.L. GARDNER, Defendant/Cross-Claim Plaintiff/Cross-Claim Defendant/Appellant, and Citibank (South Dakota) N.A., Defendant-Appellee, and Travis Wittmeyer; Kanoa Bristol; Blue Wave Investment Solutions, LLC, Defendants/Cross-Claim Defendants/Cross-Claim Plaintiffs/Appellees, and John Does 1-50, Jane Does 1-50, and Doe Entities 1-50, Defendants.

NO. CAAP-17-0000453

Intermediate Court of Appeals of Hawai‘i.

November 29, 2019.

On the briefs:

Glen T. Hale, Lihue, for Defendant-Appellant.

Matthew M. Matsunaga and Derek R. Kobayashi (Schlack Ito), Honolulu, for Defendants-Appellees.

(By: Ginoza, Chief Judge, Fujise and Chan, JJ.)

SUMMARY DISPOSITION ORDER

Defendant/Cross-Claim Plaintiff/Cross-Claim Defendant/Appellant Gisele M.L. Gardner (Gardner) appeals from the Circuit Court of the First Circuit's (1) January 6, 2017 "Order Denying [Gardner's] Motion to Compel and For Sanctions against Defendants Travis Wittmeyer, Kanoa Bristol, and Blue Wave Investment Solutions, LLC, Filed November 23, 2016" (Order Denying Sanctions);¹ (2) May 5, 2017 Order Granting Plaintiff Provident Funding Associates, L.P.'s (Provident)² Motion for Confirmation of Sale, Deficiency Judgment, For Writ of Possession and Cancellation of Notice Of Pendency of Action (Order Confirming Sale); and (3) the May 5, 2017 Judgment.³

Gardner argues that the Circuit Court erred:

1. In "conclud[ing] the parties did not have an agreement for private sale;"

2. By (1) concluding the Stipulation was not enforceable or that Defendants/Cross-Claim Defendants/Cross-Claim Plaintiffs/Appellees Travis Wittmeyer, Kanoa Bristol, and Blue Wave Investment Solutions, LLC (collectively Wittmeyer) had not breached the stipulation, and (2) failing to strike Wittmeyer’s statement of facts as presented in Wittmeyer’s memorandum in opposition to the Motion to Compel; and

3. In denying her request for sanctions against Wittmeyer and their attorneys.

After a careful review of the points raised and the arguments made by the parties, the record on appeal, and the applicable legal authorities, we resolve Gardner's appeal as follows and affirm.

1. The Circuit Court's finding there was no agreement for a private sale was not clearly erroneous. Gardner contends that the Circuit Court erred "in conclud[ing] there was no agreement by the parties to a private sale," relying upon the written September 27, 2016 First Stipulation to Continue Foreclosure Sale (Stipulation) as proof of the agreement.

Regardless of whether the Stipulation is a "settlement agreement," or a stipulation, we interpret it using contract law principles. See Standard Mgmt., Inc. v. Kekona, 99 Hawai‘i 125, 133-34, 53 P.3d 264, 272-73 (App. 2001) (using contract principles to interpret settlement agreement calling for stipulation to dismiss). "A party who relies upon a contract must prove its existence[.]" Durette v. Aloha Plastic Recycling, Inc., 105 Hawai‘i 490, 504, 100 P.3d 60, 74 (2004) (quoting Hertzog v. Hertzog, 29 Pa. St. 465, 469 (1857) ); see also Boteilho v. Boteilho, 58 Haw. 40, 42, 564 P.2d 144, 146 (1977) (party seeking to enforce oral contract must prove its terms "by clear and convincing evidence"). A binding contract requires "a meeting of the minds on all essential elements or terms." Earl M. Jorgensen Co. v. Mark Constr., Inc., 56 Haw. 466, 470, 540 P.2d 978, 982 (1975) (citations omitted). "To be enforceable, a contract must be certain and definite as to its essential terms." Boteilho, 58 Haw. at 42, 564 P.2d at 146.

The intent of the parties is a question of fact. Hanagami v. China Airlines, Ltd., 67 Haw. 357, 364, 688 P.2d 1139, 1145 (1984). "The intention of the parties is to be gathered from the whole instrument[.]" Pancakes of Hawaii, Inc. v. Pomare Props. Corp., 85 Hawai‘i 300, 305, 944 P.2d 97, 102 (App. 1997) (quoting Coney v. Dowsett, 3 Haw. 685, 686 (1876) ). Ambiguity in the terms of the document raises questions regarding the parties' intent to agree. Found. Int'l, Inc. v. E.T. Ige Constr., Inc., 102 Hawai‘i 487, 497, 78 P.3d 23, 33 (2003) ; see also 1 Corbin, Contracts § 4.10 (2019). "[W]hether a contract contains ambiguous terms is a threshold question of law for the court to decide." Wittig v. Allianz, A.G., 112 Hawai‘i 195, 201, 145 P.3d 738, 744 (2006). "A contract is ambiguous when the terms of the contract are reasonably susceptible to more than one meaning." Airgo, Inc. v. Horizon Cargo Transp., Inc., 66 Haw. 590, 594, 670 P.2d 1277, 1280 (1983).

Looking at the Stipulation, Paragraphs 2 and 3 call upon the parties to "cooperate" in the sale of the property. The word cooperate has two definitions; one definition requires collaboration, while another requires compliance with another's directives. Macmillan Dictionary, https://www.macmillandictionary.com/us/dictionary/american/cooperate (last visited Nov. 26, 2019); see also Merriam-Webster’s Collegiate Dictionary at 275 (11th ed. 2003). Thus, "cooperate" is an ambiguous term.⁴

"[P]arol evidence is admissible to explain the circumstances surrounding the execution of the contract to lend the trial judge insight into the meaning of the contract." Hokama v. Relinc Corp., 57 Haw. 470, 474, 559 P.2d 279, 282 (1977). In examining the circumstances around contract formation, "[t]he existence of mutual assent or intent to accept is determined by an objective standard." Siopes v. Kaiser Found. Health Plan, Inc., 130 Hawai‘i 437, 447, 312 P.3d 869, 879 (2013) (quoting Douglass v. Pflueger Hawaii, Inc., 110 Hawai‘i 520, 531, 135 P.3d 129, 140 (2006) ).

A party's words or acts are judged under a standard of reasonableness in determining whether he [or she] has manifested an objective intention to agree. All reasonable meanings will be imputed as representative of a party's corresponding objective intention. It follows that the purely subjective, or secret, intent of a party in assenting is irrelevant in an inquiry into the contractual intent of the parties. Unexpressed intentions are nugatory when the problem is to ascertain the legal relations, if any, between two parties.

Standard Mgmt., 99 Hawai‘i at 134, 53 P.3d at 273 (quoting Jorgensen, 56 Haw. at 470-71, 540 P.2d at 982 ) (brackets in original, format altered, internal quotation marks omitted).

At the December 20, 2016 hearing, the three parties' counsel provided argument regarding the intent behind the Stipulation. Gardner's counsel argued the Stipulation arose after attempts to settle the related civil case, pointing to a hearing where "it was strongly pointed out that a joint sale would be a way to resolve this." Wittmeyer's counsel told the court that his clients "continued to propose to proceed on a mutual basis with a mutually acceptable realtor" to accomplish such a sale. Provident's attorney maintained that the Stipulation was drafted by Provident's counsel to provide the bank with some assurance that the parties would work to settle their "dysfunction" as an alternative to the foreclosure sale but gave them a deadline so the bank "would not be waiting indefinitely[.]"

The parties argue on appeal that the Stipulation was meant to be a stipulation but each cite different purposes. If the Stipulation was indeed intended to be a settlement agreement between Gardner and Wittmeyer, it lacked written terms to that effect. It contains no waiver of the disputed rights to the property, no agreement to settle the related civil case, no agreement to terminate the notice of pendency of action filed based on the related civil case, and no agreement to release Gardner's and Wittmeyer's indemnification and contribution cross-claims against each other in this case. "The essential elements of an agreement to settle a case are a manifestation of agreement (an offer and acceptance) on payment, release, and case dismissal terms (the consideration) between parties who have the capacity and authority to agree." Gates Corp, v. Bando Chem. Indus., 4 F. App'x 676, 685-86 (10th Cir. 2001) (citing Worthy v. McKesson Corp., 756 F.2d 1370, 1373 (8th Cir. 1985) ) (emphasis added); Tocci v. Antioch Univ., 967 F. Supp. 2d 1176, 1198 (S.D. Ohio 2013) (citing Riordan's Sporting Goods, Inc. v. Riordan's Sports & Equip., LLC, 2003 Ohio 3878 at *3 (Ohio Ct. App. 2003) ("disagreement over ... whether the agreement releases all pending claims in the lawsuit renders terms too unclear and uncertain for a court to enforce the agreement."); MKM Eng’rs, Inc. v. Guzder, 476 S.W.3d 770, 778 (Tex. App. 2015) ("Essential or material terms of a ... settlement agreement include payment terms and release of claims.").

The Circuit Court also considered and rejected the notion that the parties had an agreement for sale of land. In an agreement for the sale of land, the "[e]ssential terms are the identification of the parties, a description of the property sold, the price, the time and manner of payment and any other terms in the agreement which are essential to the agreement." In re Application of Sing Chong Co., Ltd., 1 Haw. App. 236, 239, 617 P.2d 578, 581 (1980) (quoting Francone v. McClay, 41 Haw. 72 (1955) ). The plain language of the Stipulation indicates that material terms regarding a sale of the property were missing. For example, the second paragraph requires Provident's approval of an unidentified buyer and does not specify the minimum price that would be acceptable to the parties as a "full payoff" in a private sale; the third paragraph acknowledges that the April contract⁵ also depends on Provident's approval;⁶ the fifth paragraph provides "[t]he disposition of any excess proceeds will be for the remaining parties and the Court to determine/decide."

An agreement that leaves an essential element "to be settled by further negotiation ... is merely an agreement to agree and is not a valid and binding contract." Carson v. Saito, 53 Haw. 178, 181, 489 P.2d 636, 638 (1971). "[A]greements to agree are unenforceable." Globalmart, Inc. v. Posec Hawaii...