Ailetcher v. BENEFICIAL FINANCE CO., ETC.

632 P.2d 1071, 2 Haw. App. 301, 1981 Haw. App. LEXIS 223
CourtHawaii Intermediate Court of Appeals
DecidedJuly 22, 1981
DocketNO. 7151; CIVIL NO. 4761
StatusPublished
Cited by23 cases

This text of 632 P.2d 1071 (Ailetcher v. BENEFICIAL FINANCE CO., ETC.) is published on Counsel Stack Legal Research, covering Hawaii Intermediate Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ailetcher v. BENEFICIAL FINANCE CO., ETC., 632 P.2d 1071, 2 Haw. App. 301, 1981 Haw. App. LEXIS 223 (hawapp 1981).

Opinion

*302 OPINION OF THE COURT BY

PADGETT, J.

This is an appeal from a judgment below in favor of the defendants and against the plaintiffs. After the court below had dismissed the action with respect to Defendant-Appellee Beneficial Corporation (hereinafter “Corporation”), the case proceeded to trial against Defendants-Appellees Beneficial Finance Company of Hawaii (hereinafter “Finance”) and Beneficial Management Corporation of America (hereinafter “Management”). At the conclusion of the trial, a motion for directed verdict against the plaintiffs was granted and judgment entered. We affirm in part and reverse in part.

Appellants first contend that the court below erred in dismissing the action with respect to Corporation. The allegations of the complaint were simply that Corporation was the parent and alter-ego of the other two defendants. A motion to dismiss, accompanied by an affidavit, was filed with respect to Appellee Corporation. The motion thus must be treated as a motion for summary judgment. Rule 12(b), Hawaii Rules of Civil Procedure (HRCP). Essentially, the *303 affidavit established that Corporation while owning the stock of the other two corporations did no business in Hawaii and did not control their activities.

Appellants argue, however, that the exhibits attached to their memorandum in opposition to the motion raised a genuine issue of material fact as to whether Corporation is the alter-ego of the other two. Even if we assumed however, that establishing such a fact would be sufficient to satisfy the Hawaii Long-Arm Statute, an assumption we are unwilling to make, the fact remains that the documents relied upon by appellants are uncertified and unsworn to and thus, cannot be considered on a motion for summary judgment. Lane v. Yamamoto, 2 Haw. App. __, 628 P.2d 634 (1981); Munds v. First Insurance Company, Ltd., 1 Haw. App. 104, 614 P.2d 408 (1980); Cane City Builders v. City Bank, 50 Haw. 472, 443 P.2d 145 (1968); Pacific Concrete FCU v. Kauanoe, 62 Haw. 334, 614 P.2d 936 (1980). Accordingly, there is nothing in the record to contradict the affidavit of defendants which establishes that Corporation is not the alter-ego of the other corporations. The motion to dismiss was therefore properly granted.

The undisputed evidence establishes that at the time the events which gave rise to this action occurred, Appellant Ailetcher was seriously in default in the repayment of monies he had borrowed from Appellee Finance. Ailetcher was the manager of Appellant Economy’s Kona sales lot. Lawrence Primacio was the manager of Finance’s Kona office who was under the supervision of Dong Ho Yang, an employee of Management. When a prospective purchaser of an automobile from Economy who needed financing appeared, particularly one who had previously been a customer of Finance, Ailetcher would call Primacio to initiate the financing arrangements for the automobile and if Finance’s requirements were met, it would finance the purchase.

Although there is considerable dispute in the testimony, there was evidence from which the jury could find that Yang ordered Primacio to cease doing business with Economy’s Kona’s office until Ailetcher paid his debt in full. Ailetcher testified that he eventually reported this to his superior, Larry Boot. Boot testified that he called Primacio and Yang and that they verified the ban on business until payment. In the course of that conversation, Boot testified that he gained the impression from Yang that Ailetcher was able to pay his *304 indebtedness to Finance and simply wasn’t doing it. Ailetcher and Boot testified that as a result of the ban, Economy lost business and Ailetcher, who was on a percentage of gross sales commission arrangement, lost income. Ailetcher also testified that as a result, he suffered mental and emotional distress. At the close of all of the evidence, the appellees renewed the motion for a directed verdict which they had made at the close of appellants’ case; the motion was granted; judgment was entered; and this appeal followed.

With respect to Count II (defamation), Count III (unlawful methods of debt collection), Count IV (invasion of Ailetcher’s right of privacy), and Count VIII (conspiracy), we affirm the action of the court below in granting the directed verdict. We find no evidence to support those claims. As to Count VI (negligent infliction of emotional distress), we hold that in the context of an attempt to collect a debt, we are bound by the decision in Fraser v. Blue Cross Animal Hospital, 39 Haw. 370 (1952) which limits recovery in such instances to intentional wrongs. We, therefore, affirm the directed verdict as to Count VI. There is no Count VII.

This leaves us with Count I (intentional infliction of mental suffering) and Count V (unfair acts or practices in violation of § 480-2, Hawaii Revised Statutes). Since there is no mental distress which can be suffered by a corporation, the motion for a directed verdict on Count I with respect to Economy Motors was properly granted.

Fraser v. Blue Cross, supra, which governs this case, states:

From these decisions we may deduce the rule that to permit recovery for mental suffering which may result in illness, three elements must be present: (1) that the act is intentional; (2) that it is unreasonable; and (3) that the actor should recognize it as likely to result in illness. . ..

39 Haw. at 375.

If a jury believes, from the evidence, that the appellees cutoff or threatened to cut off further extension of credit to Economy Motors’ customers in the purchase of cars from Economy in an attempt to force payment of Ailetcher’s debt, the first element (that of intent) will have been proved.

The second element, whether the appellees’ course of conduct was unreasonable, presents a much more difficult question and one on which there appears to be no decided case directly in point on the *305 facts. We think, however, that it would be ajury question whether, in the context of our society, it is unreasonable for a creditor to attempt to coerce payment of a debt by threatening to cut off business with the debtor’s employer, at least where the debtor has no ownership interest in the employer.

The third element set forth in Fraser v. Blue Cross, is that the actor should recognize his conduct is likely to result in illness. Again, we think it a jury question, whether, given the circumstances of this case, such a finding could be made. As the Supreme Court has said, it is for the trier of the fact to “decide whether, under the facts of this case, serious mental distress to the plaintiff was a reasonably foreseeable consequence of the defendant’s act.” Rodrigues v. State, 52 Haw.

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Cite This Page — Counsel Stack

Bluebook (online)
632 P.2d 1071, 2 Haw. App. 301, 1981 Haw. App. LEXIS 223, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ailetcher-v-beneficial-finance-co-etc-hawapp-1981.