Wohlschlegel v. Uhlmann-Kihei, Inc.

• Citation: 4 Haw.App. 123,662 P.2d 505
• Decision Date: 08 April 1983
• Docket Number: UHLMANN-KIHE,INC,No. 8040,8040
• Parties: Hans D. WOHLSCHLEGEL, Patricia A. Wohlschlegel and Ross Khemlani, Plaintiffs-Appellees, Cross-Appellants, v.and Kihei Properties, Inc., Defendants-Appellants, Cross-Appellees, and GAH, Inc., Amaral-Cole Land Co., Inc., dba Amaral-Cole Realtors, and Karl Heyer, Defendants-Appellees.
• Court: Hawaii Court of Appeals

Page 505

662 P.2d 505

4 Haw.App. 123

Hans D. WOHLSCHLEGEL, Patricia A. Wohlschlegel and Ross Khemlani, Plaintiffs-Appellees, Cross-Appellants, v. UHLMANN-KIHEI, INC. and Kihei Properties, Inc. Defendants-Appellants, Cross-Appellees and GAH, Inc., Amaral-Cole Land Co., Inc., dba Amaral-Cole Realtors, and Karl Heyer, Defendants-Appellees.

No. 8040.

Intermediate Court of Appeals of Hawai'i.

April 8, 1983.

Reconsideration Denied May 12, 1983.

Syllabus by the Court

1. The granting of a summary judgment is proper only when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.

2. The interpretation or construction of a judgment, order or decree presents a question of law for the courts. A trial court's interpretation or construction is not binding on an appellate court and is freely reviewable on appeal.

3. A court order must be construed reasonably and as a whole so as to give effect to the intention of the court.

4. No attorney's fee may be awarded as damages or costs unless so provided by statute, stipulation, or agreement.

5. Although beneficial rights under an executory contract are generally assignable, in the absence of an assumption of liability, an assignment of a contract does not impose on an assignee the assignor's contractual duties or liabilities.

6. Where a note or other contract in writing provides for an attorney's fee, Hawaii Revised Statutes § 607-17 authorizes the court to award such fee to the successful party in the action based on a formula, but not to exceed an amount deemed reasonable by the court. The statute does not allow the court to make a zero award to the successful party.

7. Although the trial court has considerable discretion in the allowance of costs, the denial of costs to the prevailing party must be based on some fault on the party's part in the course of litigation.

8. The province of equity is to give such relief as justice and good conscience require. The relief granted is dictated by the equitable requirements of the situation and is to be adapted to the facts and circumstances of the particular case.

9. Where the granting of certain judicial relief rendered moot other claims and cross-claims in the action, the court properly exercised its authority in dismissing such claims and cross-claims.

Brook Hart, Michael D. Wilson, Hart and Wolf, Honolulu (James E.T. Koshiba, Koshiba & Young, Honolulu, of counsel; and Alexander T. MacLaren, Walter Chuck & Associates, Chung, Lau, MacLaren & Lau, Honolulu, of counsel, on the briefs), for defendants-appellants and cross-appellees.

Edward F. Mason, Wailuku (Mason & Scott, Wailuku, of counsel), for plaintiffs-appellees and cross-appellants.

Howard R. Green, Honolulu (Ke-Ching Ning, Honolulu, also on the brief; Carlsmith, Carlsmith, Wichman & Case, Honolulu, of counsel), for defendant-appellee GAH, Inc.

Clyde Wm. Matsui, Honolulu, for defendants-appellees Amaral-Cole Land Co., Inc. and Karl Heyer.

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

TANAKA, Judge.

Defendants Uhlmann-Kihei, Inc. (Kauhale) ¹ and Kihei Properties, Inc. (Kihei) (collectively appellants), appeal the granting of summary judgment for specific performance in favor of plaintiffs Hans D. Wohlschlegel (Hans), ² Patricia A. Wohlschlegel (Patricia) and Ross Khemlani (Khemlani), ³ the purchasers of a condominium unit in Kihei, Maui, and the dismissal of their cross-claims against co-defendants GAH, Inc. (GAH) and Amaral-Cole Land Co., Inc., doing business as Amaral-Cole Realtors (Amaral). Plaintiffs cross-appeal the trial court's refusal to award them an attorney's fee and costs, and the dismissal of their claims against GAH, Amaral and Karl Heyer (Heyer).

The issues raised on appeal are the propriety of the trial court's (1) granting plaintiffs' motion for summary judgment, (2) denying attorney's fee and costs to plaintiffs, and (3) dismissing plaintiffs' other claims and appellants' cross-claims. For the reasons stated below, we affirm the trial court's decisions, except as to the denial of attorney's fee and costs to plaintiffs.

This case (Second Circuit Civil No. 3893 below) had its genesis in Second Circuit Civil No. 3287. Civil No. 3287 ⁴ was a mortgage foreclosure proceeding commenced on March 2, 1977 by mortgagee The Trustees of Mortgage Trust of America (MTA) against mortgagors Kauhale and Kihei ⁵ and another party. The mortgage covered the 168-unit Kauhale Makai condominium project (Project) in Kihei, Maui. On March 9, 1977, GAH was appointed receiver to take possession of the Project during the pendency of the foreclosure action. As receiver, GAH was vested with authority to sell units in the Project. GAH appointed Amaral as its sales agent to handle on-site sales of the Project units. Under a contract with Amaral, Heyer agreed to serve as its Project sales coordinator.

Hans and Patricia, husband and wife, and Khemlani are residents of Portland, Oregon. While vacationing on Maui with his family in December 1977, Hans obtained a sales brochure concerning the Project. After returning to Portland, Hans showed the brochure to Khemlani and discussed with him the advisability of purchasing a condominium unit together.

On February 2, 1978, Hans, with Khemlani on the extension line, telephoned Amaral's Project sales office inquiring about the cheapest available unit in the Project. Heyer informed him that Apartment 127 was the cheapest available unit. On the same day, Heyer mailed to Hans a sales agreement and other papers for Apartment 127.

Prior to that, however, Lionel Hayes Uhlmann, Jr. (Uhlmann), president of Kauhale and Kihei, was concerned that real estate prices on Maui were rising and that the receiver was not increasing the sale prices for the Project units. Therefore, in December 1977 and/or in January 1978, he caused The Uhlmann Offices, Inc. (Offices) ⁶ to "purchase" six units in the Project. Then, on or about February 1, 1978, Offices "purchased" sixteen more units, including Apartment 127. ⁷

On February 3, 1978, GAH informed Heyer that Apartment 127 "was taken off the market" because Uhlmann had sent in a deposit. In mid-February 1978, Hans and Khemlani signed and mailed the sales agreement and other pertinent papers for Apartment 127, together with Khemlani's deposit check for $1,000, to Heyer.

On March 31, 1978, when Hans telephoned, Heyer informed him that "the original developer, through Legal Manuver [sic]" had stopped the sale of the last sixteen units and that he had held on to the papers and had not cashed the deposit check for Apartment 127 "pending the settlement of the legal problem created by the original developer." Heyer sent Hans a confirmation letter to such effect on the same day.

In late April 1978, when Hans telephoned to inquire about the status of Apartment 127, Heyer told him that it seemed certain that the apartment would not be available. ⁸ Subsequently, Hans telephoned again and talked to Bob Cole of Amaral who told him that Apartment 312 was available. On April 27, 1978, Hans telephoned Heyer ⁹ and Heyer gave him the particulars about the apartment, including its purchase price of $81,750. Hans testified when deposed that he informed Heyer that he and Khemlani were going to "take" the apartment and requested that the "particulars" be sent to them. Heyer suggested that Hans send him a letter authorizing him to alter the sales agreement for Apartment 127 to reflect the information pertaining to Apartment 312. The deposit check for Apartment 127 was to be the deposit for Apartment 312. Not receiving the letter of authorization, Heyer telephoned Hans, who stated that he and Khemlani would be in Maui on May 12, 1978 to inspect Apartment 312 and sign the papers for it.

Meanwhile, in Civil No. 3287, MTA and appellants entered into a stipulation to settle the mortgage foreclosure action. On May 1, 1978, appellants filed a motion for approval of the settlement with MTA. On the same day, a hearing on the motion was held and the Order Approving Settlement, Partially Discharging Receiver and Restoring Possession and Title to the Receivership Assets to the Defendants (Order) was filed. The Order became effective on May 4, 1978 when the release of MTA's mortgage was recorded. Paragraph 2.1.3 of the Order provided in pertinent part:

The Receiver's power of sale shall continue and the Receiver is authorized to close all sales for which outstanding agreements with purchasers now exist according to the terms and conditions of the purchase agreements, existing escrow instructions and other applicable documents. The Receiver shall also continue to be empowered to sell and close all remaining units to back-up offerees approved by Defendants.

On May 12, 1978, Hans and Khemlani arrived in Maui and signed the sales agreement and other papers for Apartment 312. The agreement was signed by George Henrickson, GAH's president, on May 15, 1978.

By letter dated June 1, 1978, the attorney for appellants informed counsel for GAH that paragraph 2.1.3 of the Order required his clients' approval of the GAH-Hans and Khemlani sales agreement, but such approval had not been sought. On June 7, 1978, Heyer informed Hans and Khemlani by letter that because of the termination of the receivership involving the Project, the approval of appellants was required for the purchase of Apartment 312. On the same day, Henrickson wrote to Uhlmann seeking approval of "the new purchasers for apartment # 312." By letter dated June 22, 1978, the attorney for appellants informed counsel for GAH: Mr. Uhlmann disapproves the sale of Apartment # 312 on the terms setforth [sic] on the grounds that in the present market, the unit should be priced at $118,950.00 plus furniture package and sales tax. That such price is readily attainable and a sale of [sic] the terms proposed in Mr. Henrickson's letter would result in a loss of nearly $30,000.00 to my client.

On July 24, 1978, Henrickson wrote to...