Richardson v. Lane, 11353

• Decision Date: 03 April 1987
• Docket Number: No. 11353,11353
• Citation: 736 P.2d 63,6 Haw.App. 614
• Parties: Leon D. RICHARDSON and Margie J. Richardson, husband and wife, and Copthorne N.V., a Netherland Antilles corporation, Plaintiffs-Appellants, v. Howard T. LANE, Willis Sinsabaugh, Waterfront Properties, Inc., a Hawaii corporation, John Does 1-10, Doe Partnerships 11-20, Doe Corporations 21-30, and Doe Entities 31-40, Defendants-Appellees, and The Fidelity Standard Life Insurance Company, Intervenor-Defendant/Appellee.
• Court: Hawaii Court of Appeals

Page 63

736 P.2d 63

6 Haw.App. 614

Leon D. RICHARDSON and Margie J. Richardson, husband and wife, and Copthorne N.V., a Netherland Antilles corporation, Plaintiffs-Appellants, v. Howard T. LANE, Willis Sinsabaugh, Waterfront Properties Inc., a Hawaii corporation, John Does 1-10, Doe Partnerships 11-20, Doe Corporations 21-30, and Doe Entities 31-40 Defendants-Appellees and The Fidelity Standard Life Insurance Company Intervenor-Defendant/Appellee.

No. 11353.

Intermediate Court of Appeals of Hawai'i.

April 3, 1987.

As Amended April 22, 1987.

Reconsideration Denied May 5, 1987.

Gary Victor Dubin, Honolulu, for plaintiffs-appellants.

Michael W. Gibson (Lorrin B. Hirano, with him on the brief; Ashford & Wriston, of counsel), Honolulu, for Lane.

Cathy A. Lee (Wesley W. Ichida, with her on the brief; Case, Kay & Lynch, of counsel), Honolulu, for Sinsabaugh and Waterfront.

Syllabus by the Court

1. Dismissals with prejudice are not favored, and appellate courts will uphold such a sanction by the trial court only when there is a clear record of delay or contumacious conduct, and where lesser sanctions would not serve the best interests of justice.

2. No precise rule can be laid down as to what circumstances justify a dismissal for failure to prosecute, but the procedural history of each case must be examined in order to make that determination. The power of the court to prevent undue delays and to achieve the orderly disposition of cases must be weighed against the policy of law which favors disposition of litigation on its merits.

3. Where on the day of trial plaintiffs did not appear, but the defendants appeared with counsel and the jury panel was present, plaintiffs' counsel informed the trial judge that plaintiffs had instructed him "not to participate in this proceeding" because they were being "deprived of their constitutional right to trial by jury and to a judge who is impartial," and plaintiffs' counsel then left the courtroom, plaintiffs effectively abandoned their cause of action and the trial court correctly dismissed plaintiffs' complaint with prejudice under Rule 41(b), HRCP.

4. Where an appellate court affirms the trial court's dismissal of a complaint with prejudice for want of prosecution, it will not review alleged errors by the trial court occurring prior to the order of dismissal which were relied upon by appellants as their reason for refusing to proceed with their cause of action.

5. Where on the day of trial the trial court dismissed the plaintiffs' complaint for lack of prosecution, it did not err in entering a default against plaintiffs on defendants' counterclaims, allowing proof of defendants' damages, and entering default judgments in favor of defendants.

6. The function of an appellate court in an appeal from the trial court's refusal to set aside a default judgment is to determine whether the trial court failed to set aside a void judgment or abused its discretion.

Before BURNS, C.J., and HEEN and TANAKA, JJ.

HEEN, Judge.

Plaintiffs-Appellants Leon D. Richardson and his wife, Margie J. Richardson (hereinafter the Richardsons), and Copthorne N.V. (Copthorne), a Netherland Antilles corporation (hereinafter where appropriate the Richardsons and Copthorne will be referred to collectively as Plaintiffs), appeal from the order dismissing their complaint against Defendants-Appellees Howard T. Lane (Lane), Willis Sinsabaugh (Sinsabaugh), and Waterfront Properties, Inc. (Waterfront), a Hawaii corporation (hereinafter where appropriate Lane, Sinsabaugh and Waterfront will be referred to collectively as Defendants), from the default judgments entered against them on the counterclaims of Lane and Sinsabaugh, and from the trial court's March 19, 1985 order awarding costs and attorney's fees to Sinsabaugh and Waterfront under Rule 68, Hawaii Rules of Civil Procedure (HRCP) (1980). We affirm, except for the order of March 19, 1985, which we order vacated.

This case began as a dispute between the parties over structural deficiencies in a residence purchased by the Richardsons from Lane ¹ under an agreement of sale (agreement) which was later assigned to Copthorne. After the complaint, counterclaims against Plaintiffs by Lane for default on the agreement and by Lane and Sinsabaugh for defamation, and cross-claims between Lane and Sinsabaugh and Waterfront were filed, trial was scheduled for January 21, 1985. Meanwhile, the matter had deteriorated into a battle over discovery proceedings.

On January 16, 1985, as a result of the most current discovery proceedings dispute between Plaintiffs and Defendants, Lane filed a motion seeking, inter alia, (1) dismissal of the complaint; (2) default judgment against Plaintiffs on Lane's counterclaim; and (3) preclusion of the testimony of three of Plaintiffs' expert witnesses. The motion was heard on January 17, 1985, and on that day the trial court orally ordered that Plaintiffs' three experts would be precluded from testifying. Also on January 17, 1985, Lane filed another motion to dismiss alleging that Plaintiffs had failed to comply with a January 14, 1985 order that they deposit in court a sum equal to all payments that had not been made by them under the agreement. This motion was heard on January 18, 1985, and on the same day the trial court orally ordered Plaintiffs to deposit with the court $743,750 cash or other security by 9:30 a.m., January 21, 1985, the day of trial. Written orders denying the dismissals and the default judgment but granting the motion to preclude Plaintiffs' three experts from testifying and requiring Plaintiffs to deposit $743,750 with the court were entered on January 28, 1985.

On the morning of trial, the jury panel was present and Defendants appeared with their attorneys. Plaintiffs' attorney was present, but Plaintiffs were not. Plaintiffs' counsel filed an "Affidavit of Leon D. Richardson Disqualifying the Honorable Edwin Y. Sasaki" (Judge Sasaki), who had presided over Lane's dismissal motions and who was to be the trial judge. Judge Sasaki refused to disqualify himself. Plaintiffs' counsel then told Judge Sasaki that Plaintiffs were unable to proceed to trial because of the sanctions imposed by Judge Sasaki and Judge Sasaki's refusal to disqualify himself. Judge Sasaki ordered the trial to proceed and directed the clerk to call the roll of the jurors. Plaintiffs' counsel then requested a bench conference at which he stated that Plaintiffs had instructed him "not to participate in this proceeding" because they were "being deprived of their constitutional right to trial by jury and to a trial judge who is impartial[.]" At the end of the bench conference, Plaintiffs' counsel left the courtroom. The trial court thereupon orally dismissed the complaint on its merits, dismissed the cross-claims between Lane and Sinsabaugh and Waterfront, entered a default against Plaintiffs on Lane's and Sinsabaugh's counterclaims, and allowed Defendants to present proof of damages. On January 24, 1985, the court entered findings of fact and conclusions of law, a judgment in favor of Lane and Sinsabaugh, and a separate judgment in favor of Sinsabaugh and Waterfront. ²

The judgments (1) dismissed the complaint against all Defendants with prejudice; (2) cancelled the agreement of sale and terminated all of Plaintiffs' right, title and interest in the property; (3) authorized Lane to retain all sums paid under the agreement of sale; (4) awarded Lane and Sinsabaugh $1.00 on their counterclaims for defamation; (5) ordered issuance of a writ of possession to Lane; and (6) granted Defendants leave to move for attorney's fees.

On February 4, 1985, Plaintiffs filed a motion seeking (1) relief from the order dismissing the complaint and from the judgment, (2) a new trial, and (3) a stay of the judgment. After a hearing, which was attended by Plaintiffs' counsel, the motion was denied on February 26, 1985. Meanwhile, on February 19, 1985, Plaintiffs filed a motion to vacate the default judgment, the order of dismissal, and the order precluding Plaintiffs' expert witnesses' testimony, which was denied on March 19, 1985.

During the period when Plaintiffs were attacking the dismissals and judgments, Defendants moved for costs and attorney's fees and gave notice of their motions to Plaintiffs' counsel. Although neither Plaintiffs nor their counsel appeared at the hearings on the motions, they did file written objections on "jurisdictional and constitutional grounds." On March 6, and 19, 1985, respectively, Lane's motion and Sinsabaugh's and Waterfront's motion for award of attorney's fees were granted.

Plaintiffs filed notices of appeal on February 25, 1985, and on April 18, 1985, which were both dismissed on jurisdictional grounds on December 31, 1985. On May 5, 1986, Plaintiffs filed another notice of appeal.

The following three questions are determinative of this appeal:

(1) Did the trial court err in dismissing Plaintiffs' complaint?

(2) Did the trial court err in entering default judgments in favor of Defendants on their counterclaims?

(3) Did the trial court err in denying Plaintiffs' motion to set aside the order dismissing its complaint and the default judgments?

We find no error. Additionally, for reasons discussed below we will not consider any alleged errors that occurred prior to dismissal of the complaint. Other matters raised by Plaintiffs on appeal are utterly without merit and will not be discussed.

I.

When Plaintiffs' counsel informed the trial court that Plaintiffs had instructed him not to participate further in the proceedings and left the courtroom, Plaintiffs effectively abandoned their cause of action and the trial court correctly dismissed the complaint under Rule 41(b), HRCP, ³ for lack of prosecution.

Dismissals with prejudice are not favored, see Lim v. Harvis Construction, Inc., 65 Haw. 71, 647 P.2d 290 (1982), and appellate courts will uphold such a sanction by the trial court only "when...