Yoneji v. Yoneji

• Decision Date: 04 March 2016
• Docket Number: No. CAAP–14–0000747.,CAAP–14–0000747.
• Citation: 137 Hawai'i 299,370 P.3d 704
• Parties: Neil YONEJI, Successor Trustee of the Mitsuo Yoneji Revocable Trust dated November 27, 1985 and Neil Yoneji and Claire Yoneji, individually and as Trustees of the Yoneji Revocable Family Trust Dated August 31, 1998, Plaintiffs–Appellants, v. Mary Kazumi YONEJI, Defendant–Appellee v. Charlene Yoneji, John Does 1–10, Jane Does 1–10, Doe Partnerships, Corporations or Entities 1–20, Defendants. Mary Kazumi Yoneji, Counterclaimant, v. Neil Yoneji, Successor Trustee of the Mitsuo Yoneji Revocable Trust dated November 27, 1985 and Neil Yoneji and Claire Yoneji, as Trustees of the Yoneji Revocable Family Trust Dated August 31, 1998, Counterclaim Defendants.
• Court: Hawaii Court of Appeals

137 Hawai'i 299

370 P.3d 704

Neil YONEJI, Successor Trustee of the Mitsuo Yoneji Revocable Trust dated November 27, 1985 and Neil Yoneji and Claire Yoneji, individually and as Trustees of the Yoneji Revocable Family Trust Dated August 31, 1998, Plaintiffs–Appellants,

v.Mary Kazumi YONEJI, Defendant–Appellee

v.Charlene Yoneji, John Does 1–10, Jane Does 1–10, Doe Partnerships, Corporations or Entities 1–20, Defendants.

Mary Kazumi Yoneji, Counterclaimant,

v.Neil Yoneji, Successor Trustee of the Mitsuo Yoneji Revocable Trust dated November 27, 1985 and Neil Yoneji and Claire Yoneji, as Trustees of the Yoneji Revocable Family Trust Dated August 31, 1998, Counterclaim Defendants.

No. CAAP–14–0000747.

Intermediate Court of Appeals of Hawai‘i.

March 4, 2016.

Patrick K. Shea, Sara Jo Buehler, (Shea & Kamiya) and Rebecca A. Copeland, on the briefs, for Plaintiffs/Counterclaim Defendants/Appellants.

Ryan G.S. Au, on the briefs, for Defendant/Counterclaimant/Appellee.

FOLEY, Presiding J., LEONARD and GINOZA, JJ.

Opinion of the Court by FOLEY, J.

Plaintiffs/Counterclaim Defendants/Appellants Neil Yoneji (Neil ), Successor Trustee of the Mitsuo Yoneji Revocable Trust dated November 27, 1985 (Mitsuo Trust ), and Neil and Claire Yoneji (Claire ), individually and as Trustees of the Yoneji Revocable Family Trust Dated August 31, 1998 (Yoneji Family Trust ) (together, Yonejis ) appeal from the (1) May 1, 2013 "Order Granting in Part and Denying in Part Defendant Mary Kazumi Yoneji's Motion for Summary Judgment (Filed 2/26/13)" (MSJ Order ), and (2) the March 7, 2014 "Amended Final Judgment," filed in the Circuit Court of the Fifth Circuit¹ (circuit court ).

On appeal, the Yonejis argue the circuit court erred by

(1) granting-in-part the motion for summary judgment (MSJ ) of Defendant/Counterclaimant/Appellee Mary Yoneji (Mary );

(2) excluding several pieces of evidence and testimony at trial;

(3) denying the Yonejis' request for a punitive damages instruction; and

(4) denying several of the Yonejis' requests for costs.

I. BACKGROUND

This case involves the Mitsuo Trust, a family trust funded by rental income generated from two income-producing properties (together, Properties ) originally owned by grantor, Mitsuo Yoneji (Mitsuo ). The trust left interests in the Properties to Mitsuo's two sons, Neil and Owen Yoneji (Owen ), and any children Mitsuo's sons may have. Neil was married to Claire. Owen was married to Defendant Charlene Yoneji (Charlene ) and had one child, Mary. Owen passed away before the start of the Yonejis' lawsuit.

The Properties were co-owned by four family trusts in varying amounts: the Mitsuo Trust, the Revocable Trust of Owen Kazuo Yoneji, dated January 11, 1994 (Owen Trust ), the Revocable Trust of Charlene Tsuruko Yoneji, dated January 11, 1994 (Charlene Trust ), and the Yoneji Family Trust. All profits and expenses related to the Properties were handled through a single trust bank account at the First Hawaiian Bank (FHB ), which operated under the Mitsuo Trust (Mitsuo Trust Account ).

On October 26, 2009, the Yonejis filed a Complaint alleging that Mary and Charlene improperly emptied the Mitsuo Trust Account and wrongfully redirected the rental income from the Properties co-owned by the various family trusts to Mary in her personal capacity. The Yonejis alleged that Mary was liable for conversion, constructive fraud, conspiracy, prima facie tort, unjust enrichment, and constructive trust. Specifically, the Yonejis alleged:

15. On April 11, 2008, [Mary] wrote a check drawn on FHB Account No 30–069056 in the amount of $67,031.14 to [FHB] which on the same day issued an Official Bank Check payable in the same amount to [Charlene], Mary's mother. The Official Bank Check indicated that [Mary] had purchased same "for [Owen] & [Neil]."

16. [Neil] did not authorize the April 11, 2008 disbursement of funds from the Mitsuo Trust checking account.

17. On April 28, 2008, [Mary] wrote a counter check drawn on FHB Account No 30–069056 in the amount of $85,081.99 payable to [FHB] which on the same day, issued an Official Bank Check payable in the same amount to [Owen]. The Official Bank Check indicated that [Mary] had purchased the same for (or on behalf of) the Mitsuo Trust.

18. [Neil] did not authorize the April 28, 2008 disbursement of funds from the Mitsuo Trust checking account.

19. After April 28, 2008, no further rent deposits were made at any financial institution for the benefit of the Mitsuo Trust. Mary collected in excess of Twenty–Five Thousand Dollars ($25,000.00) in rents from the tenants occupying [Properties] individually, or on behalf of [Owen], individually until [Owen] died in the Fall of 2008.

20. After Owen's death, [Mary] held herself out as the individual owner of the [Properties], and instructed the tenants of the [Properties] to make rent payments to her individually, and received certain rent payments from certain tenants, payable to her individually.

21. Moreover, [Mary] wrongfully failed and refused to allow [Neil] access to either of the [Properties].

On December 22, 2009, Mary and Charlene filed their Answer.

On May 1, 2012, the circuit court approved a "Stipulation for Appointment of Special Master" (Stipulation ). Both parties had. stipulated to the use of a Special Master to resolve the following issues:

1. With respect to the [Properties], an accounting of all loans, sales, distributions, revenues, expenses, received, spent, used and/or withdrawn by any one or more or the Parties during the period March 1, 2008 to the present ("Subject Period"); and

2. With respect to the management of the [Properties] for the Subject Period, any discovered improprieties or mismanagement (diversion or non-reporting of income, improper expenses, improper distributions, withdrawals, etc.) including without limitation, the dates, the parties involved and the amount of any loss.

The Special Master was tasked with

1. [Conducting] an audit of the assets, revenues, and expenses of the [Properties] from March 1, 2008 to present.

2. [Determining] the interests of the co-owners of the [Properties] and their past and present entitlement to profits and responsibility for expenses.

3. [Determining] the final account among the co-owners, taking into consideration all distributions and the proceeds/credit from the sale of the [Properties].

4. [Determining] the parties' rights to the amounts related to the [Properties] held, in custody and/or control by any of the parties and the clerk of the Court.

The parties stipulated:

6. Upon completion of the investigation, the Special Master shall circulate a proposed report, entertain comments thereto, and make a final report to the [circuit court] including findings and recommendations determining accounts as set forth above. After filing of the final report, the parties shall have an opportunity to object to any portion of the report before the [circuit court] adopts findings and issues a judgment. The [circuit court] shall determine any whether there are any genuine issues of material fact to be determined by the trier of fact.

All parties also agreed that "the trier of fact shall rely on the report of the Special Master in determining the amounts, if any, owed by and between all parties in the above entitled action, subject to their determination of any disputed genuine issue of material fact (as set forth by the [circuit court] )." The Stipulation provided that fees and costs associated with the Special Master would be distributed as follows:

10. The fees and costs associated with the appointment of the Master shall be finally determined by agreement or by Court Order, provided that any required advance for such fess [sic] and cost shall be made (without prejudice) as follows: 42.5% by [Yoneji Family Trust], 42.5% by [Owen Trust and Charlene Trust] and 15% by the Mitsuo Trust. For purposes of the Master's timekeeping, the Master shall keep time for his or her analysis for matter from March 1, 2008 to August 15, 2009, separate from his or her analysis from August 15, 2009, to the present.

On July 30, 2012, the circuit court issued its "Order Setting Trial Date," ordering all exhibits to be delivered to the circuit court and served by March 8, 2013.

A. Motion for Summary Judgment

On February 26, 2013, before the March 8, 2013 deadline to deliver all exhibits to the circuit court, Mary filed a motion for summary judgment (MSJ ) on the Yonejis' conversion, constructive fraud, conspiracy, prima facie tort, unjust enrichment, and constructive trust claims. Mary also requested that the court grant summary judgment in her favor as to the claims brought in Neil and Claire's individual capacities, arguing that "they have no ownership interest to the Properties in their individual capacities." On March 25, 2013, the Yonejis filed their opposition to Mary's MSJ (Opposition to MSJ ).

On April 2, 2013, the circuit court held a hearing on Mary's MSJ, where it granted in part and denied in part Mary's request for summary judgment. The circuit court denied Mary's request for summary judgment as to the Yonejis' conversion and unjust enrichment claims, pending the receipt of the Special Master's report holding:

The Court is granting in part and denying in part [Mary's MSJ]. In particular, as to each specific count, the Court again pending the receipt of the final report of the master finds that there are genuine issues of material fact with respect to whether Mary withdrew more money than she was authorized to withdraw.

And so, summary judgment is denied on the issue of the conversion. As to constructive fraud, conspiracy, prima facia [sic] tort and constructive trust, the Court finds that there are no genuine issue [sic] of material fact, and the Court is granting summary judgment in [Mary's] favor. As to the issue of unjust enrichment, just as the Court is waiting on the final report of the master, and there is issue [sic] of whether Mary withdrew more than she was authorized to withdraw, the Court finds that there are

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