Sung v. Hamilton

• Decision Date: 22 December 2009
• Docket Number: Cv. No. 09-00212 DAE-KSC.
• Citation: 676 F. Supp.2d 990
• Parties: Shikwan SUNG, Plaintiff, v. Robert Emmett HAMILTON and Susan Weinert Hamilton, each individually and as Trustee under The Hamilton Joint Revocable Trust dated March 7, 1991; Hula Brothers, Inc., a Hawai`i corporation; Gregory Gadd; Title Guaranty Escrow Services, Inc., a Hawai`i corporation; John Does 1-10; Jane Does 1-10; Doe Partnerships 1-10; Doe Corporations 1-10; Doe Entities 1-10; and Doe Governmental Agencies 1-10, Defendants.
• Court: U.S. District Court — District of Hawaii

676 F.Supp.2d 990

Shikwan SUNG, Plaintiff, v. Robert Emmett HAMILTON and Susan Weinert Hamilton, each individually and as Trustee under The Hamilton Joint Revocable Trust dated March 7, 1991; Hula Brothers, Inc., a Hawai`i corporation; Gregory Gadd; Title Guaranty Escrow Services, Inc., a Hawai`i corporation; John Does 1-10; Jane Does 1-10; Doe Partnerships 1-10; Doe Corporations 1-10; Doe Entities 1-10; and Doe Governmental Agencies 1-10, Defendants.

Cv. No. 09-00212 DAE-KSC.

United States District Court, D. Hawai`i.

December 22, 2009.

Ke-Ching Ning, Valerie M. Kato, Ning Lilly & Jones, Honolulu, HI, for Plaintiff.

George W. Playdon, Jr., Kelvin H. Kaneshiro, Robert A. Creps, O'Connor Playdon & Guben, Honolulu, HI, for Robert Emmett Hamilton, Susan Weinert Hamilton, Hula Brothers, Inc.

Peter S. Knapman, Alston Hunt Floyd & Ing., Honolulu, HI, for Big Island Land Co., Ltd., Gregory Gadd.

Charles A. Price, Koshiba Agena & Kubota, Honolulu, HI, for Title Guaranty Escrow Services, Inc.

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT

DAVID ALAN EZRA, District Judge.

On November 30, 2009, the Court heard Plaintiff/Counterclaim-Defendant's Motion for Partial Summary Judgment. Ke-Ching Ning, Esq., appeared at the hearing on behalf of Plaintiff/Counterclaim Defendant; Kelvin H. Kaneshiro, Esq., Peter S. Knapman, Esq., and Charles A. Price, Esq., appeared at the hearing on behalf of Defendants. After reviewing the motion and the supporting and opposing memoranda, the Court GRANTS IN PART AND DENIES IN PART Plaintiff/Counterclaim Defendant's Motion.

BACKGROUND

This Court repeats the background facts only as is necessary for a decision on Plaintiff/Counterclaim-Defendant's ("Plaintiff's") Motion for Partial Summary Judgment ("MPSJ," Doc. # 30) in the discussion section below. The essential facts of this case are not in dispute.

Defendants Robert Emmett Hamilton and Susan Weinert Hamilton (the "Hamiltons") are trustees under The Hamilton Joint Revocable Trust dated March 7, 1991 ("Hamilton Trust"). (Defendants Robert Emmett Hamilton, Susan Weinert Hamilton, and Hula Brothers, Inc.'s Memorandum in Opposition to Plaintiff's Motion for Partial Summary Judgment "Hamilton Opp'n," Doc. # 38, Ex. 1.) Under the terms of the Hamilton Trust, either trustee is empowered to act to bind the trust without obtaining the consent of the other trustee. (Id. at 16.) As of February 2008, the Hamiltons as trustees of the Hamilton Trust (the "Trustees") owned about 31.174 acres of land identified as Lot 33-B-2 of Land Court Application 1053 (amended), Keaau, District of Puna, Hawai`i, (TMK 3 1-6-003:104) and an appurtenant 7,500 square foot warehouse and fruit orchard (together, the "Property"). (See Hamilton Opp'n, Ex. 2 at H00046; Plaintiff's Complaint "Compl." at ¶ 11, Doc. # 1.)

On both February 12, 2008 and February 13, 2008, Plaintiff and the Trustees signed an "Agreement for Keaau Property" (TMK 3 X-X-XXX-XXXX) which provided Plaintiff an option to purchase the Property (the "Property Option") for $2.9 million. (Compl. ¶ 12; MPSJ, Ex. A at 1.) The Property Option stated that Defendant Hula Brothers, Inc. ("Hula Brothers"), a fruit packing business on the Property owned and operated by the Hamiltons, would enter into an agreement with Plaintiff to provide Plaintiff the option to acquire the assets of Hula Brothers. (MPSJ at 7, ¶ 3.4.)

On or around February 12, 2008, the Plaintiff, Trustees and Robert Emmett Hamilton individually ("Robert Hamilton") agreed upon an "Agreement for Hula Brothers, Inc. Assets" (the "Asset Option"), which provided Plaintiff with an option for the purchase of Hula Brothers' assets, including a forklift, for $100,000 (MPSJ, Ex. B at 3, ¶ 1.2(a); Compl. ¶ 12; MPSJ, Ex. A ¶ 3.4.; MPSJ, Ex. B.) At the time of agreement, February 12, 2008, the Asset Option was signed only by Plaintiff. (Compl. ¶ 12; MPSJ, Ex. B at 16.)

The Property Option provided that it may be exercised by Plaintiff not later than 5:00 p.m. Hawaii Standard Time, September 15, 2008 by delivering to the Trustees a signed written copy of (a) an offer to purchase the Property; and (b) a check payable to escrow Title Guaranty Escrow Services, Inc. ("TGES") in Hilo c/o Michael Nagai for $280,000. (MPSJ, Ex. A at 2, ¶¶ 1-1.1.) The Property Option specified that Plaintiff may deliver written notice of his exercise by facsimile or other electronic transmission with a confirming copy sent at the same time by authorized delivery methods, provided that Plaintiff "shall also make the timely tender" of the $280,000. (Id. at 2, ¶ 1.1.) The Property Option stated that if Plaintiff exercised his Property Option, "the Trustees shall in or within ten (10) days execute and deliver the purchase document provided in Paragraph 1.2 herein and open escrow." (Id. at 6, ¶ 3.) The Property Option further provided that if the Property Option was not timely exercised as provided: "it shall expire and be of no further force or effect at the end of the option exercise period described in paragraph 1 and the option payment hereunder may be retained by the Trustees." (Id. at 5, ¶ 1.4.)

The Asset Option provided that the Asset Option may be exercised by Plaintiff not later than 5:00 p.m. Hawaii Standard Time, September 15, 2008 by delivering to the Trustees a signed written Notice of Intent to purchase the Hula Assets and a check as a deposit payable to escrow TGES in Hilo c/o Michael Nagai for $20,000. (MPSJ, Ex. B at 2, ¶¶ 1-1.1.) The Asset Option further provided that if the Asset Option was not timely exercised as provided: "it shall expire on the expiration of the option exercise period described in paragraph 1 and shall be of no further force or effect." (Id. at 4, ¶ 1.4.)

Both the Purchase Option and the Asset Option provided for simultaneous closing dates and provided that no party shall have any obligation to deliver any document or take any action contemplated by either agreement unless the Closing on the Asset Option occurred simultaneously with closing on the Property Option. (MPSJ, Ex. A at 7, ¶ 3.4; id., Ex. B at 9, ¶ 7.4.) Closing of escrow on both the Property Option and the Asset Option was to occur no later than March 9, 2009. (Id., Ex. A at 6, ¶ 3.1; id., Ex. B at 8, ¶ 7.1.)

On September 15, 2008, Plaintiff executed an offer to purchase the Property ("DROA"), initialing and dating every page except page 3, which was left undated. (MPSJ, Ex. C.) Plaintiff made and initialed changes to the DROA by writing and crossing out "Komatsu Forklift" from the property excluded from sale in paragraph C-4 and adding "Komatsu Forklift, including farm equip." to the items included in the sale in paragraph C-3. (Id. at 3, ¶¶ C-3-4; Compl. at 9, ¶ 27.) On September 16, 2008, Plaintiff wired the sum of $280,000.00 to Bank of Hawaii for the Benefit of TGES. (MPSJ, Ex. D.) On September 16, 2008, TGES accepted the $280,000 from Plaintiff, opened escrow pursuant to the Property Option and continues to hold this amount in escrow deposit. (Id., Ex. E; id., Ex. A at 6, ¶ 3; TGES' Answer ¶ 2.) TGES provided Plaintiff the Escrow Instructions and General Provisions. (MPSJ, Ex. E.) Plaintiff did not exercise the Asset Option. (Plaintiff's Reply Memorandum "Reply Mem." at 1; Hamilton Opp'n at 4.)

The Hamiltons received the DROA on September 16, 2008. (The Defendants Robert Hamilton, Susan Weinert Hamilton, and Hula Brothers' Response to Plaintiff's Concise Statement of Facts "Hamiltons' Resp. to Plaintiff's Facts" at 5, ¶ 19, 20; Hamilton Opp'n at 4.) The parties dispute when Susan Weinert Hamilton ("Susan Hamilton") signed the DROA. Plaintiff states that Susan Hamilton did not sign the DROA until October 1, 2008. (Plaintiff's Concise Statement of Facts ("Plaintiff's Facts") at 5, ¶¶ 21-22.) In contrast, Defendants Robert Hamilton, Susan Hamilton, and Hula Brothers (the "Hamilton Defendants") state that the DROA bears Susan Hamilton's signature and is dated September 16, 2008. (Hamiltons' Resp. to Plaintiff's Facts at 5, ¶¶ 21-22.) Both parties agree that on September 16, 2008, Robert Hamilton signed the DROA and initialed and dated each page, except for page 3, which contained the changes to paragraphs C-3 and C-4. (MPSJ, Exhibit C.) Page 3 of the DROA bears the initials of the Hamiltons and a date of October 1, 2008. (Id. at 3.)

In their acceptance, the Hamiltons crossed out Plaintiff's changes to paragraph C-3, the "Komatsu Forklift, including farm equip." and initialed their deletion. (Id.) The Hamilton Defendants contend that the inclusion of the forklift was not in conformance with the Property Option, but was agreed to under the Assets Option. (Id.; id., Exhibit A at 7, ¶ 3.4; id., Exhibit B at 3, ¶ 1.2(a).) The Hamiltons' deletion of Plaintiff's addition of the "Komatsu Forklift, including farm equip." was never initialed or accepted by Plaintiff. (MPSJ, Exhibit F.) The Trustees and Robert Hamilton signed the Assets Option on February 26, 2009. (MPSJ, Exhibit B at 15-16.)

On May 12, 2009, Plaintiff filed a Complaint for declaratory judgment (Count I), breach of contract and anticipatory breach (Count II), rescission (Count III), and unjust enrichment (Count IV) against the Hamilton Defendants. (Compl. at 15-17, ¶¶ 52-63.) Additionally, Plaintiff alleged conversion (Count V) against the Hamiltons and TGES (Id. at 18, ¶¶ 64-69.); misrepresentation (Count VI) and fraudulent misrepresentation (Count VII) against Robert Hamilton, Hula Brothers, Gregory Gadd and the Big Island Land Co., Ltd. ("BILC") (Id. at 18-21, ¶¶ 70-80.); fraudulent concealment (Count VIII) and negligent and intentional interference with contract and prospective advantage (Count IX) against the Hamilton Defendants, Gregory Gadd and BILC (Id. at 21-23, ¶¶ 81-89.); a declaratory judgment (Count X) and breach of contract (Count XI) against TGES (Id. at 23-4, ¶¶ 90-95.); and breach of implied covenant of good faith and fair dealing (Count XII), HRS ...