Corpuz, II v. Vapehead Origins USA, LLC

549 P.3d 343, 154 Haw. 258

• Court: Hawaii Intermediate Court of Appeals
• Decided: May 24, 2024
• Docket: CAAP-19-0000427
• Status: Published

Opinion

NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

Electronically Filed Intermediate Court of Appeals CAAP-XX-XXXXXXX 24-MAY-2024 08:04 AM Dkt. 109 SO

NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAIʻI

JULIAN JORDAN D. CORPUZ, II, Plaintiff-Appellee, v. VAPEHEAD ORIGINS USA, LLC, a foreign limited liability company; 24 HOUR VAPES, LLC, a domestic limited liability company, Defendants/Cross-Claim Defendants/Cross-Claimants-Appellees, and JOCOR ENTERPRISES LLC, dba Volcano Fine Electronic Cigarettes, a domestic limited liability company, Defendant/Cross-Claimant/Cross-Claim Defendant-Appellant, and JOHN DOES 1-10; DOE CORPORATIONS 1-10; DOE PARTNERSHIPS 1-10; and DOE ENTITIES 1-10, Defendants.

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT (CASE NO. 1CC171001631)

SUMMARY DISPOSITION ORDER (By: Leonard, Acting Chief Judge, Wadsworth and McCullen, JJ.)

Defendant/Cross-Claimant/Cross-Claim Defendant-

Appellant Jocor Enterprises, LLC (Jocor) appeals from the

Circuit Court of the First Circuit's 1 (1) May 23, 2019 "Order

Granting Defendant 24 Hour Vapes, LLC's Substantive Joinder to

1 The Honorable James S. Kawashima presided. NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

Defendant Vapehead Origins USA, LLC's Petition for Determination

of Good Faith Settlement" (May 23, 2019 Joinder Order); and

(2) May 29, 2019 "Findings of Fact, Conclusions of Law, and

Order Granting Defendant 24 Hour Vapes, LLC's Substantive

Joinder to Defendant Vapehead Origins USA, LLC's Petition for

Determination of Good Faith Settlement" (May 29, 2019 Good Faith

Settlement Order).

On appeal, Jocor contends the circuit court abused its

discretion when it determined a "walk away" settlement between

Plaintiff-Appellee Julian Jordan D. Corpuz, II (Corpuz) and

Defendant/Cross-Claim Defendant/Cross-Claimant-Appellee 24 Hour

Vapes, LLC (24 Hour Vapes) was a good faith settlement for

purposes of Hawai‘i Revised Statutes (HRS) § 663-15.5 (2016,

Supp. 2018), which barred Jocor from pursuing 24 Hour Vapes for

contribution.

Upon careful review of the record and the briefs

submitted by the parties and having given due consideration to

the issues raised and the arguments advanced, we resolve this

appeal as discussed below, and affirm.

On October 5, 2017, Corpuz sued Defendant/Cross-Claim

Defendant/Cross-Claimant-Appellee Vapehead Origins USA, LLC

(Vapehead), 24 Hour Vapes, and Jocor for injuries sustained when

an electronic cigarette and/or its batteries exploded in his

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pocket causing him to suffer injuries. As related to his claim,

Corpuz asserted:

• Vapehead manufactured the electronic cigarette;

• 24 Hour Vapes sold the electronic cigarette; and

• Jocor sold the batteries for the electronic cigarette.

Vapehead moved for summary judgment on Corpuz's claims

and the cross-claims Jocor and 24 Hour Vapes filed. Vapehead

asserted the electronic cigarette it manufactured was not

responsible for Corpuz's injuries because the evidence showed

the batteries were not in the electronic cigarette when the

batteries caught on fire.

To support this assertion, Vapehead attached a report

by Daren Slee, a Senior Managing Engineer at Exponent, a failure

analysis consulting firm. The report indicated there was damage

to, and soot on, the outside of the electronic cigarette, while

inside the battery compartment was relatively clean with no heat

damage on several plastic components. This showed the

electronic cigarette was exposed to an external heat source.

Vapehead thus asserted the electronic cigarette did not cause

the batteries to fail.

Vapehead then petitioned for determination of good

faith settlement, indicating it had reached a "walk away"

settlement with Corpuz and that Corpuz would be dismissing his

claims against Vapehead and each would bear their own costs.

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Vapehead requested the court determine the settlement was a good

faith settlement for purposes of HRS § 663-15.5, which generally

bars claims for contribution and indemnity against a joint

tortfeasor who settles in good faith unless there is an

indemnity agreement. See generally, HRS § 663-15.5(d)(1)

(2016).

24 Hour Vapes moved to join Vapehead's petition for

determination of good faith settlement. In its request to join

Vapehead's petition, 24 Hour Vapes asserted Corpuz's injuries

were from Jocor's batteries, and the electronic cigarette it

sold did not cause the fire. 24 Hour Vapes also indicated it

too reached a walk-away settlement with Corpuz.

Jocor opposed both Vapehead's petition for

determination of good faith settlement and 24 Hour Vapes'

joinder motion.

On May 2, 2019, the circuit court granted Vapehead's

petition for determination of good faith settlement. The

circuit court stated it "considered all of the pleadings and

evidence filed in support of the Petition and the memoranda

listed above, and based on the records in this case, arguments

presented at the hearing, declarations of counsel, and all of

the exhibits submitted . . . ." The circuit court found, among

other things, "[s]upport exists for [Corpuz]'s decision to

dismiss claims as against [Vapehead]."

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Subsequently, the circuit court entered its May 23,

2019 Joinder Order, allowing 24 Hour Vapes to join Vapehead's

petition. In doing so, the circuit court

considered all of the pleadings and evidence filed in support of the Substantive Joinder, the memoranda listed above, the records in this case, arguments presented at the hearing, declarations of counsel, and all of the exhibits submitted in regard to the Substantive Joinder, and based upon the Findings of Fact and Conclusions of Law as stated in the Order Granting Vapehead's Good Faith Petition[.]

The circuit court also entered its May 29, 2019 Good

Faith Settlement Order, determining the settlement between 24

Hour Vapes and Corpuz was entered into in good faith. The

circuit court ordered that "(a) any further claims against 24

Hour [Vapes] by any other joint tortfeasor or co-obligor are

barred and (b) all cross-claims filed in this matter against 24

Hour [Vapes] are hereby dismissed with prejudice."

Jocor appealed from the May 23, 2019 Joinder Order and

the May 29, 2019 Good Faith Settlement Order.

(1) Jocor first contends the circuit court erred by

granting 24 Hour Vapes' "Petition based on its findings of fact

and conclusions of law that were specific to Vapehead[.]" Jocor

thus requests this court vacate the circuit court's May 23, 2019

Joinder Order.

In the order granting Vapehead's good faith settlement

petition, the circuit court found the settlement was reached

based on Corpuz's evaluation of the evidence as to liability,

parties would bear their own fees and costs, there was no 5 NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

evidence of a written indemnity agreement or bad faith

collusion, and support existed for dismissing the claim against

Vapehead.

In its May 23, 2019 Joinder Order, the circuit court

granted 24 Hour Vapes' joinder motion. The circuit court stated

it considered all pleadings and evidence, the memoranda, the

record, the arguments, declarations of counsel, exhibits, and

"the Findings of Fact and Conclusions of Law as stated in the

Order Granting Vapehead's Good Faith Petition[.]"

Jocor cites no statute or rule the circuit court

violated. That the circuit court considered, among other

things, the findings and conclusions it made in the order

granting Vapehead's good faith petition when deciding 24 Hour

Vapes' joinder motion does not demand we vacate the May 23, 2019

Joinder Order. See generally, HRS § 603-21.9(6) (2016)

(providing the circuit court has the power to make orders "as

may be necessary to carry into full effect the powers which are

or shall be given to them by law or for the promotion of justice

in matters pending before them").

(2) Jocor next contends the circuit court erred by

"[e]ntering a second, conflicting order granting 24 Hour's

Petition on May 29, 2019, which contains findings of fact and

conclusions of law unsupported by the evidence presented."

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The May 23, 2019 Joinder Order granted 24 Hour Vapes'

motion to join Vapehead's petition for a determination that

Vapehead entered into a good faith settlement. The May 23, 2019

Joinder Order allowed 24 Hour Vapes to join Vapehead's petition;

it made no determination regarding whether 24 Hour Vapes and

Corpuz's settlement was entered into in good faith. The

subsequent May 29, 2019 Good Faith Settlement Order determined

the settlement between 24 Hour Vapes and Corpuz was entered into

in good faith. Thus, the orders were not conflicting.

As to the findings and conclusions Jocor claims are

unsupported, Jocor points to finding number 6 and conclusion

number 14 that state the fees and costs incurred were not

nominal. The declaration from Corpuz's counsel stated costs are

"presumably minimal . . . at this stage of the case."

Even if Jocor is correct, Corpuz and 24 Hour Vapes

agreed to be responsible for their own fees and costs and, as

discussed below, there was substantial evidence to support the

determination that the settlement between 24 Hour Vapes and

Corpuz was entered into in good faith. Thus, any error in

determining the fees and costs were not nominal would be

harmless. See Hawai‘i Rules of Civil Procedure Rule 61.

(3) Finally, Jocor contends the circuit court erred by

granting 24 Hour Vapes' "Petition when the totality of the

relevant circumstances before it provides no reasonable basis

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for doing so." The gist of Jocor's contention is 24 Hour Vapes

should not be allowed to rely on Vapehead's expert evidence.

Contrary to Jocor's contention, the circuit court was

required to look at the totality of the circumstances

considering all relevant evidence before it. See Troyer v.

Adams, 102 Hawai‘i 399, 425-27, 77 P.3d 83, 109-11 (2003)

(explaining the determination of good faith should be made based

on the "totality of the circumstances" considering all relevant

facts available at the time of settlement and providing possible

factors to consider). This included Vapehead's expert evidence.

When considering all relevant facts at the time of the

settlement between Corpuz and 24 Hour Vapes, the totality of

circumstances supported the circuit court's determination that

the settlement was entered into in good faith. The evidence

included the expert's conclusion that the battery was not inside

the electronic cigarette when the battery caught fire.

And Corpuz's counsel submitted a declaration based on

his assessment of the evidence as developed through discovery

that "the batteries, not the [electronic cigarette], were the

relevant defective products," and Vapehead and 24 Hour Vapes

were "not in the chain of distribution" of the batteries.

Further, there was nothing in the record to suggest

bad faith collusion between Corpuz and 24 Hour Vapes in reaching

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a settlement. And there was no evidence of a written indemnity

agreement.

In sum, the circuit court based its decision on the

totality of the circumstances, considering all relevant facts

available at the time of the agreement and, thus, did not abuse

its discretion in granting 24 Hour Vapes' joinder motion and

determining the settlement agreement between 24 Hour Vapes and

Corpuz was entered into in good faith. See Brooks v. Dana Nance

& Co., 113 Hawai‘i 406, 412, 153 P.3d 1091, 1097 (2007) (applying

abuse of discretion standard).

Based on the foregoing, we affirm the circuit court's

May 23, 2019 Joinder Order and May 29, 2019 Good Faith

Settlement Order.

DATED: Honolulu, Hawai‘i, May 24, 2024.

On the briefs: /s/ Katherine G. Leonard Acting Chief Judge Jerold T. Matayoshi, Nicholas P. Ching, /s/ Clyde J. Wadsworth (Fukunaga Matayoshi Ching & Associate Judge Kon-Herrera), for Defendant/Cross-Claimant/ /s/ Sonja M.P. McCullen Cross-Claim Defendant- Associate Judge Appellant.

J. Patrick Gallagher, Kamalolo K. Koanui-Kong, (Gallagher Kane Amai & Reyes), for Defendant/Cross-Claim Defendant/Cross-Claimant- Appellee 24 Hour Vapes, LLC.