Zanakis-Pico v. Cutter Dodge, Inc.

• Decision Date: 14 June 2002
• Docket Number: No. 22987.,22987.
• Citation: Zanakis-Pico v. Cutter Dodge, Inc., 47 P.3d 1222, 98 Haw. 309 (Haw. 2002)
• Parties: Mary ZANAKIS-PICO and Thomas M. Pico, Jr., Plaintiffs-Appellants/Cross-Appellees, v. CUTTER DODGE, INC. d/b/a Cutter Dodge Chrysler Plymouth Jeep Eagle, Defendant-Appellee/Cross-Appellant, and Doe Entities 1-10, Defendants.
• Court: Hawaii Supreme Court

47 P.3d 1222

98 Haw. 309

Mary ZANAKIS-PICO and Thomas M. Pico, Jr., Plaintiffs-Appellants/Cross-Appellees, v. CUTTER DODGE, INC. d/b/a Cutter Dodge Chrysler Plymouth Jeep Eagle, Defendant-Appellee/Cross-Appellant, and Doe Entities 1-10, Defendants.

No. 22987.

Supreme Court of Hawaii.

June 14, 2002.

As Amended July 26, 2002.

Thomas M. Pico, Jr., Honolulu, on the briefs, for Plaintiffs-Appellants/Cross-Appellees Mary Zanakis-Pico and Thomas M. Pico, Jr.

Roy F. Hughes & James Shin (of Hughes & Taosaka), Honolulu, on the briefs, for Defendant-Appellee/Cross-Appellant Cutter Dodge, Inc., d/b/a Cutter Dodge Chrysler Plymouth Jeep Eagle.

MOON, C.J., LEVINSON, NAKAYAMA, RAMIL, and ACOBA, JJ.; with ACOBA, J., also concurring separately.

Opinion of the Court By LEVINSON, J.

The plaintiffs-appellants/cross-appellees, Mary Zanakis-Pico and Thomas M. Pico (the Picos) appeal from the amended judgment of the first circuit court, the Honorable Gary W.B. Chang presiding, filed on November 4, 1999. The Picos argue that the circuit court erred in: (1) partially granting the motion of the defendant-appellee/cross-appellant Cutter Dodge, Inc., d/b/a Cutter Dodge Chrysler Plymouth Jeep Eagle (Cutter), for partial summary judgment as to damages, based on its conclusion that the Picos were not entitled to "benefit-of-the-bargain" damages in connection with their claim pursuant to Hawai`i Revised Statutes (HRS) chapter 480 (1993 & Supp.2000);¹ (2) partially granting Cutter's motion for dismissal, or, in the alternative, for summary judgment, based on its conclusion that the Picos had failed to establish cognizable damages under HRS chapter 480;² and (3) granting Cutter's motion in limine for dismissal or, in the alternative, for directed verdict, concluding that Cutter was entitled to judgment as a matter of law regarding all of the Picos' remaining claims as set forth in their third amended complaint and subsequent more definite statement of claims—specifically, their contract and, liberally construing their opening brief on appeal, their common law claims grounded in either negligence or negligent misrepresentation, false advertising, and fraud.³

Cutter cross-appeals, urging that the circuit court erred in: (1) partially denying its motion for partial summary judgment as to damages by failing to dismiss the Picos' claim for punitive damages; (2) partially denying Cutter's motion to dismiss the Picos' third amended complaint or, in the alternative, for summary judgment, by failing to dismiss the Picos' third amended complaint in its entirety; and (3) partially denying Cutter's request for attorneys' fees, costs, and sanctions, by failing to enter an award pursuant to HRS §§ 481A-4 (1993)⁴ and 607-14.5 (1993)⁵ and Hawai`i Rules of Civil Procedure (HRCP) Rule 11 (1990).⁶

We hold that the circuit court erred in concluding that the Picos failed to allege cognizable damages with respect to their statutory claim under HRS chapter 480, their common law claim for relief grounded in fraud, and any other cognizable common law tort claims that the Picos sufficiently pled. We further hold that the circuit court correctly ruled that Cutter was entitled to judgment as a matter of law with respect to the Picos' contract claim. Finally, on the record before us, we hold that the circuit court did not err in denying Cutter's motion for attorneys' fees, costs, and sanctions. Accordingly, we vacate the circuit court's amended judgment and remand this case for further proceedings consistent with this opinion.

I. BACKGROUND

This dispute involves an advertisement by Cutter appearing in the September 12, 1997 editions of both of the Honolulu daily newspapers of general circulation—the Advertiser and the Star-Bulletin. In large print at the top, the advertisement announced a "$13,000,000 INVENTORY REDUCTION" and claimed, "We're # 1 For a Reason! Volume = Low Prices[.] Come on Down and find out why!! $0 Cash Down!*" (outline and bold print in original). At the bottom were five lines of text, including two asterisks, in a much smaller type-face. The first asterisk was followed by the qualification: "$0 Cash Down on all Gold Key Plus pymnt. vehicles."

The main body of the advertisement, between the introductory text and the fine print, included pictorial depictions of and specific terms for fourteen different model vehicles. In each instance, the advertisement stated the number of vehicles of the particular model available at the stated terms or price and listed what appear to be their inventory identification numbers. Five of the models were listed with a cash price, while nine were simply advertised for "$0 Cash Down," subject to varying monthly payments over various periods of time.⁷

The first and most prominently displayed vehicle was a "NEW '97 GRAND CHEROKEE LAREDO," priced at "$229 Month* 24 Mos. $0 Cash Down or $20,988." A second asterisk in the fine print at the bottom of the advertisement read: "Rebate and APR on select models, not combinable, prices incl. $400 Recent College Grad, $750 $1000 Loyalty Rebate on Grand Cherokees & Loyalty Rebate on Caravans & Grand Caravans on pymnts & prices & all other applicable rebates. On approved credit. All pymnts/prices plus tax, lic. & $195 doc fee."

On October 16, 1997, the Picos filed a complaint in the first circuit court, based on the advertisement, and amended it several times thereafter. In their third amended complaint, the Picos alleged that they had traveled to Cutter's Pearl City lot in response to the advertisement. One of the advertised Jeep Grand Cherokee Laredos was still available, and the Picos test drove the vehicle. Finding it to their liking, the Picos advised Cutter's sales agent that they were ready, willing, and able to purchase the vehicle, whereupon the sales agent informed them that they would have to make a down payment of $1,400.00. The Picos protested, pointing out that, according to Cutter's advertisement, the vehicle could be purchased for no cash down and two hundred twenty-nine dollars per month, but the sales agent explained that the "$0 cash down/$229 per month" offer was only available to recent college graduates who were entitled to a "loyalty rebate." The Picos left the premises shortly thereafter without purchasing the vehicle.

The Picos' third amended complaint alleged that Cutter had violated numerous statutory provisions, including: (1) HRS § 708-871 (1993) ("false advertising");⁸ (2) HRS § 480-2(a) (1993) ("unfair or deceptive acts or practices");⁹ (3) HRS § 481A-3(a)(9), (11), and (12) (1993) ("Deceptive trade practices");¹⁰ and (4) HRS § 437-4(b) (Supp. 1996) ("False, deceptive, or misleading advertising").¹¹ In addition, the Picos claimed generally that the advertisement was "misleading, deceptive[,] and false[,] in that a consumer reading this advertisement would be led to believe, as PLAINTIFFS were, ... that a new 1997 Jeep Grand Cherokee Laredo could be purchased for $229 per month, for 24 months with $0 Cash Down or, alternatively, for a total sum of $20,988." The Picos prayed for general, special, and punitive damages, as well as for specific performance (i.e., the sale of the vehicle to them as advertised) and injunctive relief prohibiting Cutter from further false, deceptive, or misleading advertising. Finally, the Picos prayed that the circuit court order the Motor Vehicle Industry Licensing Board to suspend or revoke Cutter's motor vehicle dealer license and levy a fine as authorized by statute.

Cutter answered the Picos' complaint by denying, inter alia, that the advertisement was false or misleading. After approximately eight months of discovery, Cutter filed a motion for partial summary judgment as to damages. On November 18, 1998, the circuit court, the Honorable Kevin S.C. Chang presiding, granted Cutter's motion in part and denied it in part. The circuit court ruled as a matter of law that the Picos were not entitled to damages for emotional distress or "benefit-of-the-bargain" in connection with their HRS § 480-2 claim, but denied Cutter's motion without prejudice with respect to other damages.

Subsequently, Cutter filed a motion to dismiss the Picos' third amended complaint or, in the alternative, for summary judgment. On February 12, 1999, the circuit court, the Honorable Gail C. Nakatani presiding, granted Cutter's motion with respect to the Picos' statutory claims, based on the following: (1) the Picos, as a matter of law, had failed to establish damages cognizable under HRS chapter 480; (2) the Picos' third amended complaint set forth no allegations supporting any claim for future damages, as required by HRS § 481A-4; and (3) as a matter of law, private citizens lack standing to assert claims pursuant to HRS §§ 437-4(b) or 708-871. The circuit court elaborated as follows on its reasons for dismissing the HRS chapter 480 claim during the hearing on Cutter's motion: "[A]s a matter of law ... the cost of travel is not an item of damages contemplated under Chapter 480, and ... the kind of damages really contemplated under Chapter 480 is ... to prevent unjust enrichment, and the cost of travel is not that kind of damages." The circuit court denied Cutter's motion, however, to the extent that it sought a complete dismissal of the Picos' third amended complaint. Instead, the circuit court ordered the Picos to file a more definite statement regarding such claims for relief as remained in their third amended complaint.¹²

The Picos filed their more definite statement of claims on January 26, 1999. They realleged their HRS chapter 480 claim and asserted that their third amended complaint also set forth: (1) the common law torts of false advertising, fraud, deceit, concealment, misrepresentation, negligence, gross negligence, and outrage, which allegedly gave rise to general, special, and punitive damages; and (2) a claim of breach of contract. They clarified that they were seeking nominal general damages, punitive damages, specific...