Sung v. Hamilton

• Decision Date: 30 April 2010
• Docket Number: No. CV. 09-00212 DAE-KSC,CV. 09-00212 DAE-KSC
• Parties: Shikwan SUNG, Plaintiff, 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

710 F.Supp.2d 1036

Shikwan SUNG, Plaintiff, 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.

No. CV. 09-00212 DAE-KSC.

United States District Court,
D. Hawai'i.

April 30, 2010.

710 F.Supp.2d 1040

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, Peter S. Knapman, Alston Hunt Floyd & Ing, Charles A. Price, Koshiba Agena & Kubota, Honolulu, HI, for Defendants.

ORDER: (1) GRANTING IN PART AND DENYING IN PART DEFENDANTS ROBERT EMMETT HAMILTON, SUSAN WEINERT HAMILTON, AND HULA BROTHERS, INC.'S MOTION FOR SUMMARY JUDGMENT AS TO PLAINTIFF SHIKWAN SUNG'S REMAINING CLAIMS; (2) GRANTING DEFENDANTS ROBERT EMMETT HAMILTON AND SUSAN WEINERT HAMILTON'S MOTION FOR PARTIAL SUMMARY JUDGMENT AS TO COUNTERCLAIM; AND (3) GRANTING DEFENDANTS BIG ISLAND LAND CO., LTD., AND GREGORY GADD'S MOTION FOR SUMMARY JUDGMENT

DAVID ALAN EZRA, District Judge.

Pursuant to Local Rule 7.2(d), the Court finds this matter suitable for disposition without a hearing. After reviewing Defendants' motions and the supporting and opposing memoranda, the Court: GRANTS IN PART AND DENIES IN PART Defendants Robert Emmett Hamilton, Susan Weinert Hamilton, and Hula Brothers, Inc.'s Motion for Summary Judgment as to Plaintiff Shikwan Sung's Remaining Claims (Doc. # 59); GRANTS Defendants Robert Emmett Hamilton and Susan Weinert Hamilton's Motion for Partial Summary Judgment as to Counterclaim (Doc. # 61); and GRANTS Defendants Big Island Land Co., Ltd., and Gregory Gadd's Motion for Summary Judgment (Doc. # 83).

BACKGROUND

Many of the facts of this case have been described in a previous order by this Court. ( See "Order," Doc. # 54.) Accordingly,

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this Court repeats the background facts only as is necessary to the Court's decision on the motions for summary judgment and partial summary judgment 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"). (Order at 2.) 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"). ( Id. at 2-3.) Defendant Hula Brothers, Inc. ("Hula Brothers"), is a fruit packing business on the Property owned and operated by the Hamiltons.¹ ( Id. at 3.)

The Hamiltons negotiated with Shikwan Sung ("Plaintiff" or "Sung") for purchase of the property and the assets of Hula Brothers. The negotiations involved the consideration of multiple agreements, including: an "Agreement for Keaau Property (TMK [3]1-6-003-0104) which provided Plaintiff an option to purchase the Property (the "Property Option") for $2.9 million, (Compl. ¶ 12; MPSJ, Ex. A at 1) and 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).

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, Doc. # 1.) 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 ("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, 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 Chapter 480-unfair or deceptive acts or practices (Count XIII), negligence (Count XIV), conspiracy (Count XV), and punitive damages (Count XVI) against all defendants ( Id. at 24-27, ¶¶ 96-112.).

On June 2, 2009, TGES filed a cross-claim against the Hamilton Defendants, Gregory Gadd and BILC alleging non-liability and requesting indemnification, escrow costs, costs of suit and attorneys' fees, inter alia. ("Cross-claim," Doc. # 11.) On June 17, 2009, the Hamilton Defendants counterclaimed against Plaintiff alleging Plaintiff caused damage to the Property, that the Hamiltons are entitled to retain the $20,000.00 lease amount paid by Plaintiff, and that the monies held in escrow by TGES be applied toward these amounts. ("Counterclaim" at 7, Doc. # 12.)

On August 20, 2009, Plaintiff filed a Motion for Partial Summary Judgment on Counts I, III, V, and X of Plaintiff's Complaint.

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(Doc. # 30.) On December 22, 2009, 676 F.Supp.2d 990 (D.Haw.2009) after a hearing on the Plaintiff's Motion, the Court issued an Order Granting in Part and Denying in Part Plaintiff's Motion for Partial Summary Judgment. ( See Order, Doc. # 54.)

On February 3, 2010, the Hamilton Defendants filed a Motion for Summary Judgment as to Plaintiff's remaining claims. ("MSJ," Doc. # 59.) On the same day, the Hamiltons filed a Motion for Partial Summary Judgment as to their Counterclaim. ("MPSJ," Doc. # 61.) On March 4, 2010, Defendants BILC and Gadd filed a Motion for Summary Judgment. ("BILC/Gadd MSJ," Doc. # 83.) On March 29, 2010, BILC and Gadd filed statements of no opposition as to the Hamilton MPSJ and MSJ. (respectively, Docs. 101, 102.) Also on March 29, 2010, Plaintiff filed an opposition to the BILC/Gadd MSJ ("Opp'n to BILC/Gadd MSJ," Doc. # 103), the Hamilton MPSJ ("Opp'n to MPSJ," Doc. # 105), and the Hamilton MSJ. ("Opp'n to MSJ," Doc. # 106.) On April 5, 2010, BILC and Gadd filed its Reply in support of the BILC/Gadd MSJ. ("Reply to BILC/Gadd MSJ," Doc. # 115.) On the same day, the Hamilton Defendants filed their reply to the Hamilton MPSJ ("Reply to MPSJ," Doc. # 117), and the Hamiltons filed their reply to the Hamilton MSJ ("Reply to MSJ," Doc. # 116.).

STANDARD OF REVIEW

Rule 56 requires summary judgment to be granted when "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Porter v. Cal. Dep't of Corr., 419 F.3d 885, 891 (9th Cir.2005); Addisu v. Fred Meyer, Inc., 198 F.3d 1130, 1134 (9th Cir.2000). A main purpose of summary judgment is to dispose of factually unsupported claims and defenses. Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

Summary judgment must be granted against a party that fails to demonstrate facts to establish what will be an essential element at trial. See id. at 323, 106 S.Ct. 2548. The burden initially falls upon the moving party to identify for the court those "portions of the materials on file that it believes demonstrate the absence of any genuine issue of material fact." T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir.1987) (citing Celotex Corp., 477 U.S. at 323, 106 S.Ct. 2548).

Once the moving party has carried its burden under Rule 56, the nonmoving party "must set forth specific facts showing that there is a genuine issue for trial" and may not rely on the mere allegations in the pleadings. Porter, 419 F.3d at 891 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). If the nonmoving party produces direct evidence of a material fact, the court may not assess the credibility of this evidence nor weigh against it any conflicting evidence presented by the moving party. T.W. Electrical Service, 809 F.2d at 632.

DISCUSSION

The instant action was filed in the District of Hawaii pursuant to 28 U.S.C. § 1332, diversity jurisdiction. Therefore, this Court is required to look to the substantive law of Hawai'i. Erie R.R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). Sales of land are governed by the law of the state within which it is located. In re Grayco Land Escrow, Ltd., 57 Haw. 436, 559 P.2d 264, 274 (1977). In the absence of controlling state law, a "federal court sitting in diversity must use

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its own best judgment in predicting how the state's highest court would decide the case." Takahashi v. Loomis Armored Car Serv., 625 F.2d 314, 316 (9th Cir.1980). "In so doing, a federal court may be aided by looking to well-reasoned decisions from other jurisdictions." Id.

The Court shall address all of the motions together according to the remaining counts below. In the interests of clarity, the Court first summarizes the counts contained in Plaintiff's Complaint that are not directly moved on in the instant motions.

I. Count II: Breach of Contract, Anticipatory Breach; Count III: recession of the DROA; Count X: Declaratory Relief; and Count XI: Breach of Contract

Count II was plead as an alternative to Count I. Because this Court found there was no valid contract for sale of the Property, no contract is in existence to support Plaintiff's claim for breach of...