Retotal v. Hawaii Ballroom Dance Association, No. 23763 (Haw. App. 3/7/2002), 23763
| Decision Date | 07 March 2002 |
| Docket Number | No. 23763,23763 |
| Parties | NENITA RETOTAL and BENJAMIN P. SANCHEZ, JR., Plaintiffs-Appellants, v. HAWAII BALLROOM DANCE ASSOCIATION, EUGENE ICHINOSE, WILBERT K. SAKAMOTO, ALFRED G. AGBAYANI, JACKIE UYEDA, and ROBERT FUKUMOTO, Defendants-Appellees, and JOHN DOES 1-50, Defendants |
| Court | Hawaii Court of Appeals |
APPEAL FROM THE FIRST CIRCUIT COURT (CIV. NO. 97-3588)
On the briefs:
Jack C. Morse, for Plaintiffs-Appellants.
George W. Playdon, Jr., Kelvin H. Kaneshiro, and Charles S. O'Neill, Jr., (Reinwald O'Connor & Playdon, of counsel), for Defendants-Appellees.
Plaintiffs-Appellants Nenita Retotal (Retotal) and Benjamin P. Sanchez, Jr. (Sanchez) (collectively Plaintiffs) appeal from the August 24, 2000 Final Judgment entered by Circuit Court Judge Dexter Del Rosario in favor of Defendants-Appellees Hawaii Ballroom Dance Association (HBDA), Eugene Ichinose (Ichinose), Wilbert K. Sakamoto (Sakamoto), Alfred G. Agbayani (Agbayani), Jackie Uyeda (Uyeda), and Robert Fukumoto (Fukumoto) (collectively Defendants). We affirm.
HBDA is a Hawai`i nonprofit corporation started in 1959 by Ichinose and his late wife, Harriet Ichinose. HBDA is dedicated to uplifting the lives of the people of Hawai`i through the medium of ballroom dance recreation. HBDA is a statewide organization and, at the time of trial, it consisted of over 20 chapters and approximately 2,500 members. Telemarks is the organization of instructors within HBDA and its financial records are part of HBDA's records. Ichinose testified that Telemarks is an organizational unit with its own officers and, for some purposes, its own money.1
Ichinose served as the Dance Director of HBDA from 1959 until his retirement in 1997. Retotal has been an HBDA member since 1991. Sanchez has been an HBDA member since 1985.
Pursuant to Hawaii Revised Statutes (HRS) § 415B-45 (1993), "[a]ll books and records of a [nonprofit] corporation may be inspected by any member or member's agent or attorney, for any proper reason at any reasonable time." According to the 1996 HBDA Bylaws (Bylaws), "[t]he Treasurer's books and accounts shall be open at all times for inspection by any member of the corporation and shall be audited at least once a year by the auditor."
The initial complaint filed by Retotal on September 3, 1997, alleged that "Ichinose uses the funds of HBDA . . . for his personal benefit and to the detriment of [Retotal] and the other members of HBDA" and sought an audit of the income and expenses of HBDA. It further alleged that "annual elections for officers of HBDA have been improperly conducted" and "the improper conduct of these elections has been orchestrated by Eugene Ichinose for the purpose of electing his cronies and excluding anyone from office who might question Eugene Ichinose's use of HBDA's funds[.]" It sought an order "that the next annual elections (state-wide and for each branch) be monitored by the League of Women Voters or a similar dis-interested organization."
The Fourth Amended Complaint was filed by Plaintiffs on January 7, 1999. It asserted two counts. Count I was Retotal's individual claim. It stated that "Retotal made formal request to review the books and records of HBDA and this request was refused by HBDA[.]" It prayed for reimbursement of the substantial attorney fees and costs caused her by HBDA's violation of its Bylaws and HRS § 415B-45.
Count II was a derivative action asserted by Plaintiffs. It alleged that: (a) "it appears that funds of HBDA have been paid out for purposes contrary to the non-profit status of HBDA and the general benefit of HBDA's membership"; (b) HBDA refused an audit of HBDA's books and records; (c) "Plaintiffs will fairly and adequately represent the interest of the HBDA membership by reviewing the books and records of HBDA and by seeking reimbursement of any mis-spent funds of HBDA"; and (d) Defendants are liable for the reimbursement to HBDA for such mis-spent funds. It prayed for orders "that Defendants produce all of their books and records covering the finances of HBDA for the 10-year period commencing January 1, 1988," and that HBDA be reimbursed (i) by the Defendants responsible for improperly paying and/or receiving funds from HBDA, and (ii) by the Defendants "for all attorneys' fees and costs paid to both the Plaintiffs' attorney and the Defendants' attorney in this lawsuit."
The bench trial commenced on November 1, 1999, and concluded on November 8, 1999. On August 24, 2000, Final Judgment was entered in favor of Defendants and against Plaintiffs.
With those findings of fact and conclusions of law challenged by Plaintiffs in this appeal outlined in bold, the August 24, 2000 Findings of Fact (FsOF), Conclusions of Law (CsOL) and Order, state, in relevant part, as follows:
FINDINGS OF FACT
. . . .
. . . .
6. The records of HBDA were maintained by volunteers, and there was no reliable indexing system for locating files.
7. [Ichinose] served as the dance director of HBDA from 1959 and was the driving force behind the success of HBDA until he retired in 1997.
8. Mr. Ichinose was not compensated for his services from 1959 until 1989. Starting in 1989, Mr. Ichinose received six hundred dollars a month.2
. . . .
14. [Sakamoto] joined HBDA in 1976 and was elected auditor of HBDA in 1980. Mr. Sakamoto served as auditor until 1999.
. . . .
16. Mr. Sakamoto was a Certified Public Accountant from 1961 to 1995.
. . . .
22. In 1996, Mr. Fukumoto was elected treasurer of HBDA and served until his term expired in April of 1999.
23. During his term as treasurer, Mr. Fukumoto would submit treasurer's reports to the HBDA council on a monthly basis. The council would vote on whether or not to approve the report.
24. [Uyeda] was the treasurer prior to Mr. Fukumoto.
25. Mr. Uyeda did not turn over any of his financial records to Mr. Fukumoto.
26. [Retotal] joined HBDA in 1991.
27. [Sanchez] joined HBDA in 1985.
28. Mr. Sanchez was elected vice-president of HBDA in 1997 and served until his term expired on March 31, 1998.
29. Mr. Sanchez is only a party to Count II of the complaint. Count I is Retotal's individual claim for refusal to provide the books and records, and Count II is Retotal and Sanchez' claim that funds of HBDA have been misspent. See Plaintiff's Fourth Amended Complaint.
. . . .
31. On August 7, 1997, Jack C. Morse ("Morse"), Mrs. Retotal's attorney, mailed a letter to Mr. Agbayani requesting a meeting on August 26, 1997. Attached to the letter was a copy of an unfiled complaint, summons and an initial request for production of documents. The request for production of documents requested all financial record of HBDA from January 1, 1992 to the present; all federal and state tax returns filed by HBDA for the years 1991 to present; all federal and state income tax returns filed by Mr. Ichinose; all by-laws [sic] and every document that Defendants claim permitted all payments by HBDA from January 1, 1992 to present; all letters, documents, communications, memoranda and other indicia of each and every request for an accounting of HBDA finances from January 1, 1992 to present; and all documents and policies which govern and/or guide the Defendants in making payments to dance instructors of HBDA from January 1, 1992 to present.
. . . .
34. Mr. Agbayani presented the August 7 letter to the HBDA council at the monthly meeting on August 8, 1997.
35. At the August 8 council meeting, the council designated David Lowry ("Mr. Lowry"), Mr. Sakamoto and Mr. Agbayani to address the August 7 letter.
. . . .
37. Everyone at the HBDA executive committee meeting agreed that the financial records would be made available to Mrs. Retotal.
. . . .
39. At the August 26 meeting, both Mr. Agbayani and Mr. Lowry informed Mrs. Retotal and Morse that the HBDA records would be made available to Mrs. Retotal, but it would take a little time to locate the records.
. . . .
43. On August 28, 1997, Mr. Agbayani, Mr. Lowry, Mr. Sakamoto, Mr. Fukumoto and Mr. Ichinose attended a meeting at the Jack-In-The-Box in Mapunapuna.
44. The purpose of the August 28 meeting at Jack-In-The-Box was to determine where the HBDA records requested by Mrs. Retotal were located and which records were readily available.
45. At the August 28 meeting, Mr. Fukumoto was asked if he could provide treasurer's reports for the last fiscal year, his first year as treasurer of HBDA, and he stated that he could.
46. On August 29, 1997, Mr. Agbayani called Morse and informed him that Mrs. Retotal could inspect the twelve (12) treasurer's reports for the prior HBDA fiscal year.
47. Mr. Agbayani also informed Morse that HBDA would seek legal advice from counsel before turning over any records other than financial records. Mr. Agbayani never told Morse that no other records would be produced.
48. On September 3, 1997, Mr. Agbayani was served with the complaint and summons in this case.
49. On September 9, 1997, Mr. Agbayani mailed a letter to Morse stating that HBDA's financial records were available to Mrs. Retotal and the treasurer's reports for 1996 were enclosed with the letter.
50. By October 8, 1997, HBDA's Ekonomik check register for the five fiscal years beginning April 1992 through April 1997; all monthly bank statements; the annual financial reports with the exception of 1997; tax returns; and payroll records were made available for Mrs. Retotal to inspect.
51. Mr. Agbayani never refused to provide the books and records of HBDA to Mrs. Retotal.
52. Mrs. Retotal never asked Mr. Ichinose for the books and records of HBDA.
53. Mr. Ichinose never refused anyone, including Mrs. Retotal, access to the books and records.
54. Mrs. Retotal never asked Mr. Sakamoto for the books and records of HBDA.
55. There was never any intent on Mr. Sakamoto's part to withhold or delay the turning over of the records requested by Mrs....
To continue reading
Request your trial