Title Guaranty Escrow Services, Inc. v. Powley

• Decision Date: 01 July 1981
• Docket Number: No. 7002,7002
• Citation: Title Guaranty Escrow Services, Inc. v. Powley, 630 P.2d 642, 2 Haw.App. 265 (Haw. App. 1981)
• Parties: TITLE GUARANTY ESCROW SERVICES, INC., Plaintiff, v. Edison POWLEY, William F. White, and Keith V. Shepherd, Crossclaimed Defendants-Appellants, and Herbert Kazuo Horita and William W. Saunders, Crossclaimant Defendants-Appellees, and Donna Young, Tropic Holdings, Inc., Bob Silverman, dba Bob Silverman& Associates, and Real Estate One Corporation, Defendants.
• Court: Hawaii Court of Appeals

Page 642

630 P.2d 642

2 Haw.App. 265

TITLE GUARANTY ESCROW SERVICES, INC., Plaintiff, v.Edison POWLEY, William F. White, and Keith V. Shepherd CrossclaimedDefendants-Appellants and Herbert Kazuo Horita and William W. Saunders, CrossclaimantDefendants-Appellees and Donna Young, Tropic Holdings, Inc., Bob Silverman, dba Bob Silverman& Associates, and Real Estate One Corporation, Defendants.

No. 7002.

Intermediate Court of Appeals of Hawai'i.

July 1, 1981.

Syllabus by the Court

1.The admission or refusal of an expert testimony and the weight to be given it if and when it is admitted are matters resting within the discretion of the trial court and will not be overturned on appeal unless that discretion is abused.

2.The burden of establishing abuse of discretion is on appellant and a strong showing is required to establish it.To constitute an abuse, it must be established that the trial court clearly exceeded the bounds of reason or disregarded rules or principles of law or practice to the detriment of appellant.

3.A finding of fact is not clearly erroneous under HRCP Rule 52(a) unless the reviewing court is driven irrefragably to the conclusion that all objective appraisals of the evidence would result in a different finding.

Stanford Manuia, Honolulu (James N. Duca, Honolulu, on the brief), Woo, Kessner & Duca, Honolulu, of counsel, for crossclaimed defendants-appellants.

Gordon D. Nelson & William W. Saunders, Honolulu, pro se and for crossclaimantdefendant-appellee Horita.

Before HAYASHI, C. J., and PADGETT and BURNS, JJ.

HAYASHI, Chief Judge.

Appeal is taken from the order of the trial court finding that Edison Powley, William F. White, and Keith V. Shepherd(hereinafter Buyers) had forfeited a $50,000.00 deposit paid into escrow as part of the down payment on the purchase of the Diamond Head Beach Hotel by their inability to pay the balance of the down payment in compliance with the terms of the Deposit Receipt, Offer and Acceptance (DROA).

At issue is whether the court erred in its ruling.More specifically, appellants-Buyers raise the issues (1) whether the court's refusal to admit certain opinion testimony regarding local customs in real estate transactions was an abuse of discretion and (2) whether certain of the court's Findings of Facts and Conclusions of Law are clearly erroneous.

Finding no error, we affirm the order of the trial court.

This action was commenced by Title Guaranty Escrow Services, Inc.(hereinafter Title or Escrow), as a complaint in interpleader against the Buyers and Herbert Kazuo Horita and William W. Saunders(hereinafter Sellers) to determine which of them is entitled to the proceeds of the escrow account established for the proposed sale of the Diamond Head Beach Hotel.Title is not a party to this appeal.The Buyers and Sellers entered cross-claims against each other for the right to the proceeds.

Briefly, the facts reveal the following: Prior to 1974, the Sellers had obtained a leasehold interest in the property at 2947 Kalakaua Avenue in Honolulu, known as the Diamond Head Beach Hotel.It is a 78 to 80 room hotel.The fee owners are Man Sing Lum(60%) and Clarence Kwon Hou Lum(40%), distributees under the will of Chow Sin Kum Lum, the original fee owner.On January 29, 1974, the Sellers executed a DROA, intending to sell their leasehold interest in the subject property to Lalakea Corporation and Realty Sales and Development, Inc.(hereinafter Lalakea), for 2.5 million dollars in cash.Lalakea had put up a non-refundable $50,000.00 deposit for the cash sale and closing was set for July 22, 1974.Sometime in June 1974 Lalakea realized they would not be able to obtain the necessary financing by the closing date and entered into an oral agreement with Saunders wherein Lalakea would recoup its deposit if it could find a new buyer for the property within the original time set for closing or a reasonable time thereafter.Sellers and Lalakea agreed to split whatever profits might be made on the transaction.

Lalakea began to search for a buyer by contacting a number of brokers.One of the brokers contacted was Robert A. Silverman.In August of 1974, AppellantKeith V. Shepherd, a Canadian businessperson, was in Hawaii and together with Calvin Cullen, a salesperson and operations manager with Real Estate One Corporation, met with Silverman and prepared a DROA dated August 4, 1974, which was presented to Saunders.Saunders rejected the offer but left the door open for further negotiations.On August 6, 1974, Appellant Shepherd again presented to Saunders a standard DROA as prepared by Appellant Shepherd, and discussion continued.On August 9, 1974, Sellers and Appellant Shepherd executed the August6, 1974 DROA for the sale of the subject property for 2.8 million dollars.The agreed-upon down payment was $200,000.00, payable as follows: Shepherd put up $1,000.00 on August 6, 1974; $49,000.00 was due on August 16, 1974; and the remaining $150,000.00 balance was due on closing, October 15, 1974.Edison Powley, William White and Donna Young¹ provided the $49,000.00 due on August 16, which was forwarded to Bob Silverman, the real estate salesperson handling the transaction for the Buyers.

The DROA in question was a one-page standard document with a three-page addendum that substantially altered much of the printed language of the DROA form.One of the terms in the addendum gave the Seller discretion to extend closing for 30 days.²Title was designated as escrow agent, and an escrow account was opened and both Sellers and Buyers executed Escrow Instructions.The Buyers were not named as buyers in the DROA; the names of the buyers were to be given later by Appellant Shepherd.Numerous requests to Appellant Shepherd by Title and Silverman for the names of the buyers got no response until October 21, 1974, six days after the original date set for closing, when the Buyers' attorney, Harold Nickelsen, submitted the name of Tropic Holdings, Inc.

On or about October 15, Saunders notified Silverman that he would not be available to close October 15 as he would be out of town and was thereby exercising his discretion to extend the closing time under the terms of the DROA.There is conflicting testimony as to whether Silverman or Shepherd were, in fact, notified of Saunders' intention.The court chose to attach greater credibility to Saunders' version.In any event, a failure to give notice of the Sellers' election to extend closing for 30 days does not appear to violate any agreement entered into between the parties.

The Buyers were in Honolulu on the 15th of October and learned of Saunders' absence.Buyers, armed with the knowledge that the Sellers were absent, visited Escrow and Appellant Shepherd announced his availability for closing even though, according to the testimony of Calvin Cullen, Shepherd told him he did not have the $150,000.00 required to close the deal.Shepherd did not dispute this testimony and his attempted clarification of his statement to Calvin Cullen was not believed by the trial court.

Buyers then engaged the legal counsel of the then Conroy, Hamilton, Gibson, Nickelsen and Rush law firm two days later, on October 17, 1974.Thereafter, Nickelsen and Saunders were unable to make sufficient contact so as to reach a mutually agreeable closing time.Saunders obviously was proceeding under the assumption the closing had to occur within thirty days of October 15, 1974, being November 14, 1974.However, by November 11, the parties hadn't been able to make contact to reach mutually agreeable terms in the Agreement of Sale.Saunders, on his own, then drew up and tendered an Agreement of Sale to Escrow.No response was forthcoming even though the end of the 30-day extension for closing was very near.On November 14, Buyers' counsel Nickelsen informed Saunders that the Buyers would be in Honolulu on or around the 18th of November and would be expecting to meet with him.A meeting was arranged...