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Electronically Filed Intermediate Court of Appeals CAAP-XX-XXXXXXX 26-JUN-2023 08:52 AM Dkt. 139 MO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI‘I
ROBERT J. DAHLAGER, as Personal Representative of the ESTATE OF ROBERT G. DAHLAGER, Deceased, and MARY DAHLAGER, Plaintiffs-Appellants/Cross-Appellees, v. JACK'S DIVING LOCKER, Defendant-Appellee/Cross-Appellant, and JOHN DOES 1-10; JANE DOES 1-10; DOE PARTNERSHIPS 1-10; DOE CORPORATIONS 1-10; ROE "NON-PROFIT" CORPORATIONS 1-10; and ROE GOVERNMENTAL ENTITIES 1-10, Defendants-Appellees/Cross-Appellees.
APPEAL FROM THE CIRCUIT COURT OF THE THIRD CIRCUIT (CASE NO. 3CC14-1-00262K)
MEMORANDUM OPINION (By: Ginoza, Chief Judge, Wadsworth and McCullen, JJ.
Plaintiffs-Appellants/Cross-Appellees Robert G.
Dahlager (Robert) 1 and Mary Dahlager (Mary) (collectively
Dahlagers) appeal from the Circuit Court of the Third Circuit's
(1) August 16, 2017 Final Judgment and (2) June 2, 2017
1 Robert passed away on August 9, 2017. His son Robert J. Dahlager (Rob) was appointed as personal representative for Robert's estate, and in that capacity was substituted into this case for Robert. NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
"Findings of Fact [(FOF)] and Conclusions of Law [(COL)] and
Order After Jury-Waived Trial." 2
Defendant-Appellee/Cross-Appellant Jack's Diving
Locker (Jack's) appeals from the circuit court's
(1) February 17, 2017 "Order Granting Plaintiffs' Motion to
Compel Production of Documents Filed December 27, 2016[,]"
(2) March 1, 2017 "Order Granting Plaintiffs' Motion to Compel
Discovery and for Discovery Sanctions Filed January 13, 2017[,]"
(3) March 23, 2017 "Order Granting Fees and Costs Related to
Plaintiffs' Motion to Compel Production of Documents Filed
December 27, 2016[,]" and (4) March 23, 2017 "Order Granting
Fees and Costs Related to Plaintiffs' Motion to Compel Discovery
and for Discovery Sanctions Filed January 13, 2017[.]"
We affirm.
I. BACKGROUND
A. Factual Background
According to the Dahlagers, Robert went to Jack's on
July 25, 2012, with his son Rob and grandson (Grandson), who
were visiting from Colorado. Rob and Grandson were going on an
open-water dive tour with an instructor from Jack's, however
Grandson needed to complete a pool certification prior to the
tour. While Robert and Rob waited for Grandson to complete his
2 The Honorable Melvin H. Fujino presided.
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certification, Robert sat on a plastic chair on Jack's pool deck
and Rob sat beside him.
After sitting on the chair for about an hour, Robert
turned to speak to Rob and Robert's chair collapsed backwards. 3
FOF 5, 7. Robert fell on his back and hit his head, and
immediately shouted that his back hurt. FOF 8. Robert was
unable to straighten his back or "get up off the ground[.]"
FOF 9, 10.
An ambulance transported Robert to Kona Community
Hospital. FOF 11. X-rays of his spine taken that same day
showed old injuries "but no new injury." FOF 13.
Two months later, Robert had an MRI and was diagnosed
with a "T10 Chance Fracture." FOF 17. Robert believed his fall
at Jack's caused this fracture. FOF 18.
After his fall at Jack's, Robert suffered other
injuries. On October 31, 2013, Robert was on his lanai when he
tripped, fell, and broke his right shoulder. FOF 21. At trial,
Robert testified he did "not have range of motion, [could not]
raise his arm above his eyes, and [could] barely get his arm
above his arm pits." FOF 22. He also testified that on one
occasion when "he was using an inversion table for physical
3 The parties do not expressly challenge any findings of fact in their points of error.
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therapy related to the fall at Jack's," he sustained a neck
injury. FOF 23.
Before his fall at Jack's, Robert operated a bed and
breakfast, but said he was forced to sell it and move to Arizona
because the business suffered losses due to his injuries.
FOF 24.
B. Procedural Background
1. Dahlagers' Complaint
On July 22, 2014, three days before the statute of
limitations would have expired, the Dahlagers filed their
complaint, claiming the chair collapsed on Jack's pool deck as a
result of Jack's "negligent and careless disregard of duty[.]"
The Dahlagers asserted that Jack's failed to "properly inspect
and maintain the chairs provided to guests; . . . properly warn
users" of the chairs' "defective and/or dangerous condition; and
. . . exercise ordinary care for the safety of users of [its]
premises open to the public." The Dahlagers further asserted
that Robert suffered "serious and permanent injuries" as a
result of the chair collapse and subsequent fall at Jack's.
The Dahlagers, however, did not serve the complaint on
Jack's until January 9, 2015, almost six months later.
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2. Interrogatories, Production of Documents, and Expert Reports
On October 8, 2015, Jack's responded to the Dahlagers'
first request for production of documents, identifying the PADI 4
incident report form (PADI Incident Report) and Earl Watanabe's
investigative report (Watanabe Report). 5 Jack's, however, stated
that it was withholding production of these reports because they
were "both prepared in anticipation of litigation and to obtain
insurance defense."
A week later, Jack's responded to the Dahlagers' first
request for answers to interrogatories. In its response, Jack's
explained that of the ten chairs it purchased from Walmart, it
returned nine of the chairs after the incident but "held" the
chair Robert sat on for more than two years before disposing of
it as it received no notice of a suit:
On June 8, 2012, Defendant purchased from Walmart 10 of the same type of chairs that Plaintiff was seated in at the time of the claimed fall. After the incident with Plaintiff, the particular chair that Plaintiff was seated in was placed in storage and held for more than 2 years, in anticipation of possible litigation, and when Defendant received no notice of claim, more than 2 years after the incident, the chair was disposed of. The other 9 chairs were returned to Walmart on July 26, 2012 as a precaution.
4 PADI is the Professional Association of Diving Instructors. PADI provides scuba certifications to individuals and dive centers. Jack's "PADI Dive Center/Resort Certificate" states "[t]he insurance afforded by this policy is a master policy issued to PADI Worldwide Corporation."
5 PADI's insurer, Lexington Insurance Company retained York Insurance Services Group as its third-party adjustor. York Insurance Services Group in turn retained ICS Merrill, EMSI Investigative Services Division, to investigate Robert's claims. ICS Merrill assigned Watanabe as the investigator.
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On February 22, 2016, the circuit court continued the
bench trial from July 19, 2016, to March 8, 2017. The circuit
court further ordered the Dahlagers to provide their written
expert reports by November 10, 2016, but the Dahlagers did not
provide any expert reports.
3. Motions to Compel and Sanctions
On December 27, 2016, over a year after Jack's
disclosed the existence and withholding of the Watanabe and PADI
reports, the Dahlagers moved to compel production of these
reports.
Attached to its memorandum opposing the production of
these reports, Jack's provided a declaration from Teresa Leicher
(Leicher), co-owner and managing partner of Jack's, dated
January 2017. Leicher explained that Jack's purchased ten
chairs from Walmart on June 8, 2012. Leicher further explained
that an August 28, 2012 letter notified Jack's that Ian Mattoch
was representing the Dahlagers, but "when more than two years
passed, and Jack's [] was not served with a Complaint from
Mr. Dahlager, we disposed of the chair that Mr. Dahlager was
seated in at the time of his fall."
The circuit court granted the motion, finding the
Watanabe Report and the PADI Incident Report were "not within
the attorney-client privilege under Sapp v. Wong as well as --
as the case being cited in the rules of discovery." (Formatting
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altered.) 62 Haw. 34, 609 P.2d 137 (1980). Jack's complied,
providing both reports.
The PADI Incident Report was a four-page report
detailing the incident. It was completed on the day of the
incident by Andrew Woerner (Woerner), Jack's operations manager
at the time, and was faxed to PADI, where a claim file was
opened. Jack's submitted the PADI Incident Report "with the
expectation that the contents would be kept confidential" and
the first page of the PADI incident Report states "[t]his report
is prepared in anticipation of litigation[.]" (Formatting
altered.) "PADI [I]nsureds" such as Jack's "are requested to
prepare an incident report whenever an event occurs which may
result in litigation."
As for the Watanabe Report, Watanabe was assigned in
September 2012 to investigate Robert's claims against Jack's.
The Watanabe Report was dated October 9, 2012, and stated
"[t]his confidential report is submitted in anticipation of
future litigation. It is and should always be considered
attorney/client work product[.]" (Formatting altered.) The
Watanabe Report included details about the investigation, and
provided full summaries of interviews with witnesses,
examination of the pool deck, and inspection of similar chairs
sold by Walmart. In the portion of the Watanabe Report
detailing Woerner's interview, the report notes "[t]he chair
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[from the incident] was returned to [Walmart] with the others
purchased at the same time as it was felt they may have been too
small. None of the chairs had been retained."
In the meantime, before Jack's produced the reports,
the Dahlagers filed another motion to compel, and requested
sanctions. The Dahlagers sought information on the Watanabe
Report and the PADI Incident Report, and the chairs, including
the chair that collapsed. The Dahlagers asked the circuit court
to "issue an order compelling Defendant Jack's to produce the
subject chair, other 9 exemplar chairs, and related
investigative reports[.]"
The Dahlagers also asked the court to "issue
appropriate sanctions pursuant to [Hawai‘i Rules of Civil
Procedure (HRCP) Rule] 37(b)," 6 assuming Jack's had indeed
6 HRCP 37(b)(2) provides in relevant part:
If a party or an officer, director, or managing agent of a party or a person designated under Rule 30(b)(6) or 31(a) to testify on behalf of a party fails to obey an order to provide or permit discovery, including an order made under subdivision (a) of this rule or Rule 35, or if a party fails to obey an order entered under Rule 26(f), the court in which the action is pending may make such orders in regard to the failure as are just, and among others the following:
(A) An order that the matters regarding which the order was made or any other designated facts shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order;
(continued . . .)
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"destroyed this highly relevant evidence." The Dahlagers argued
for a default judgment against Jack's as a punitive sanction
because Jack's willfully destroyed the subject chair and
intentionally returned the others like it.
Jack's opposed the Dahlagers' motion, and included
another declaration by Leicher, also dated January 2017. In
this declaration, Leicher stated Ian Mattoch "notified our
insurer that he no longer represented the Dahlagers on or about
January 14, 2013."
The Dahlagers replied, and included copies of the
Watanabe and PADI reports Jack's produced along with two
receipts from Walmart - one dated June 8, 2012 showing a
purchase in the amount of $89.80 pretax for ten chairs along
with other items, and one dated July 26, 2012 showing credit
issued in the amount of $93.54 for "General MDSE Total[.]"
(Formatting altered.)
(. . . continued)
(B) An order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting him or her from introducing designated matters in evidence;
(C) An order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or proceeding or any part thereof, or rendering a judgment by default against the disobedient party . . . .
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At the hearing on the Dahlagers' motion to compel
discovery and for sanctions, the circuit court noted there was
an inconsistency regarding Jack's failure to preserve the chair.
Jack's position had been that "the chairs were destroyed two
years after the incident[,]" but the circuit court noted that
"based on the [c]ourt's ruling to compel discovery it appears
they may have been [re]turned . . . to [Walmart] the second day
after the incident[.]"
The court also noted Jack's was under a duty to
preserve the evidence and analyzed whether sanctions were
appropriate. In determining sanctions were indeed appropriate,
the circuit court stated that Jack's "will be precluded from
opposing or claiming that nothing was wrong with the chair,
because the [Dahlagers] have not had an opportunity to inspect
the chair" and it "will allow reasonable attorney's fees and
costs." For the two motions to compel, the circuit court
awarded the Dahlagers a total of $20,037.55 in fees and costs.
4. Motion to Exclude Expert Testimony on Causation
In a motion in limine, Jack's moved to limit testimony
from treating physicians because the Dahlagers "chose not to
submit any expert report regarding what injuries they believe
were caused by the fall at Jack's Diving Locker on July 25,
2012." Jack's also explained that it requested copies of
medical records related to the treatment of injuries Robert
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claims were sustained at Jack's, but the Dahlagers instead
"identified particular medical establishments[.]"
Jack's argued that given the nondisclosure of expert
reports, treating physicians should be precluded from testifying
as to causation. The circuit court granted Jack's motion,
ruling that "[a]ny experts called by [the Dahlagers], and there
are no expert reports, will be excluded from testifying as to
causation."
5. Bench Trial
The circuit court held a bench trial over the course
of three days with six witnesses testifying - Robert, Rob,
Grandson, Mary, Leicher, and Woerner.
The circuit court entered its "Findings of Fact and
Conclusions of Law and Order after Jury-Waived Trial[,]"
concluding that "Jack's did not breach its duty of care to
Plaintiff [Robert] Dahlager" and the Dahlagers "failed to prove
by a preponderance of the evidence that any injury alleged was
legally or proximately caused by a defective chair on July 25,
2012." COL 3 and 12. The circuit court then entered its final
judgment in favor of Jack's and against the Dahlagers "as to all
claims in Plaintiffs' Complaint with prejudice[.]"
Both parties timely appealed.
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II. DISCUSSION
On appeal, the Dahlagers challenge the circuit court's
decisions regarding breach of duty and causation, sufficiency of
discovery sanctions, and exclusion of causation testimony by
treating experts. In its cross-appeal, Jack's challenges the
circuit court's order to produce documents, finding of
spoliation, and award of attorney's fees and costs. We affirm.
A. Negligence - Breach and Causation Elements
In their first point of error, the Dahlagers contend
that the circuit court "erred in ruling that [Jack's] did not
breach its duty of care to [Robert], and [Robert] failed to
prove by a preponderance of the evidence that any alleged [sic]
was legally or proximately caused by a defective chair."
Specifically, the Dahlagers challenge COL 3 and 12. 7
The elements of a negligence cause of action are:
1. A duty, or obligation, recognized by the law, requiring the defendant to conform to a certain standard of conduct, for the protection of others against unreasonable risks;
2. A failure on the defendant's part to conform to the standard required: a breach of duty[;] 3. A reasonably close causal connection between the conduct and the resulting injury[;] and
7 These COL state as follows:
COL 3 "Defendant Jack's did not breach its duty of care to Plaintiff [Robert] Dahlager."
COL 12 "This Court concludes that Plaintiffs failed to prove by a preponderance of the evidence that any injury alleged was legally or proximately caused by a defective chair on July 25, 2012."
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4. Actual loss or damage resulting to the interests of another[.]
Knodle v. Waikiki Gateway Hotel, Inc., 69 Haw. 376, 384-85, 742
P.2d 377, 383 (1987) (cleaned up).
"Whether there was a breach of duty or not, i.e.,
whether there was a failure on the defendant's part to exercise
reasonable care, is a question for the trier of fact." Doe
Parents No. 1 v. State of Hawai‘i, Dep't of Educ., 100 Hawai‘i 34,
57-58, 58 P.3d 545, 568-69 (2002) (emphasis omitted). "[A]bsent
uncontroverted evidence from which only one inference can
reasonably be drawn, the questions of breach of duty and legal
causation constitute questions of fact, reviewable on appeal
only for clear error." 100 Hawai‘i at 58, 58 P.3d at 569.
1. Breach of Duty Element
Challenging COL 3, the Dahlagers argue that Jack's
"negligently breached its duty of care by ignoring the
manufacturer's restrictions of use, and by failing to warn its
customers of the cheap, flimsy chair's limitations." "The
additional fact that [it] removed the warnings for its patrons
and guests only compounded [its] breach of duty to warn."
At trial, the Dahlagers introduced evidence that a
chair substantially similar to the chair Robert used warned
against use on uneven, wet, or slippery surfaces; listed a
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maximum weight capacity of 250 pounds; and was intended for
residential use only.
However, the circuit court's findings support COL 3.
The circuit court found Robert weighed approximately 220-230
pounds at the time of the incident, which was below the chair's
250-pound weight limit. FOF 33. The circuit court also found
that the Dahlagers did not offer evidence to establish that the
commercial use of the chair created an unsafe condition.
FOF 39. Moreover, there was conflicting evidence whether the
area Robert was sitting in was wet at the time of the incident,
and the Dahlagers offered no evidence that pooling of water
"caused the chair to buckle and collapse." FOF 52, 61.
Finally, the circuit court found that Robert was sitting in the
chair for about an hour before the fall. FOF 5.
The Dahlagers did not challenge these findings in
their points of error and, thus, these findings are binding on
this court. See Okada Trucking Co. v. Bd. of Water Supply, 97
Hawai‘i 450, 459, 40 P.3d 73, 82 (2002) (noting unchallenged
findings of fact are binding on the appellate courts). Based on
these unchallenged findings, the Dahlagers failed to establish
that Jack's use of the chair posed an unreasonable risk of harm
as related to the manufacturer's warnings.
The Dahlagers also argue that, "[a]s part of their
[sic] mode of operations and marketing strategy, [Jack's]
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invited relatives and friends of customers taking scuba lessons
to sit in plastic chairs on the wet pool deck and observe the
lessons."
The Hawai‘i Supreme Court adopted the mode of operation
rule in Gump:
where a plaintiff is able to demonstrate that the business proprietor adopted a marketing method or mode of operation in which a dangerous condition is reasonably foreseeable and the proprietor fails to take reasonable action to discover and remove the dangerous condition, the injured party may recover without showing actual notice or constructive knowledge of the specific instrumentality of the accident.
Gump v. Wal-Mart Stores, Inc., 93 Hawai‘i 417, 420, 5 P.3d 407,
410 (2000).
We note that the supreme court limited the mode of
operation rule to circumstances such as that case. See Gump, 93
Hawai‘i at 421, 5 P.3d at 411 (explaining that "the rule is
limited to circumstances such as those of this case. Wal-Mart
chooses, as a marketing strategy, to lease store space to
McDonald's in order to attract more customers and encourage them
to remain in the store longer. Wal-Mart also chooses, for the
most part, not to prevent patrons from carrying their McDonald's
food into the Wal-Mart shopping area. This mode of operation
gave rise to the hazard that caused Gump's injury"). This
situation is unlike that in Gump.
We further note that the dangerous condition the
Dahlagers asserted at trial was the defective condition of the
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chair, that is, the narrow gap between the chair's back legs and
its material that could become brittle if exposed to the sun.
But, the Dahlagers presented no evidence that the claimed
dangerousness of the chair was reasonably foreseeable and that
Jack's failed to take reasonable action to discover the
dangerousness and remove the chair. See generally, Fredrickson
v. Bertolino's Tacoma, Inc., 127 P.3d 5, 9-10 (Wash. Ct.
App. 2005) (declining to extend Washington's mode of operation
exception to a collapsed chair incident where plaintiff did not
establish, "that the danger of breaking chairs was continuous or
foreseeably inherent in the nature of" defendant's business).
In sum, the circuit court's conclusion that Jack's did
not breach its duty of care to Robert was not erroneous.
2. Causation Element
Challenging COL 12, the Dahlagers argue that the
circuit court erred in ruling that they "failed to prove by a
preponderance of the evidence that any alleged [sic] was legally
or proximately caused by a defective chair."
However, COL 12 was supported by the circuit court's
unchallenged findings. The circuit court found that the
Dahlagers "did not introduce evidence of a causal link between
the alleged defective condition of the Subject Chair and
Mr. Dahlager's fall" and that x-rays taken the day of the
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incident showed Robert's old back injuries "but no new
injuries." FOF 27(a), 47.
The Dahlagers further contend the doctrine of res ipsa
loquitur is applicable to the instant case.
"Res ipsa loquitur permits an inference of negligence
when the thing that produced a person's injury is under the
control and management of the defendant, and the injury could
not have occurred in the ordinary course of events but for the
defendant's failure to exercise due care." Winfrey v. GGP Ala
Moana LLC, 130 Hawai‘i 262, 272, 308 P.3d 891, 901 (2013)
(citation omitted). However, the doctrine is not applicable
"[w]here an accident could have occurred in the normal course
without negligence, or where two equally plausible inferences
can be drawn as to whether the accident was caused by
negligence[.]" Id. at 272-73, 308 P.3d at 901-02 (citation
omitted).
Here, the Dahlagers failed to meet their burden of
showing that Robert's fall could not have occurred but for
Jack's failure to exercise due care. See id. at 273, 308 P.3d
at 902. In its findings, the circuit court recounted Robert's
extensive medical history that included falls and difficulties
with balance, and that Robert was sitting in the chair for
approximately an hour before the incident. FOF 5, 26-27. In
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light of these unchallenged findings, the Dahlagers did not
prove the elements of res ipsa loquitur.
In sum, the circuit court did not clearly err in
determining that the Dahlagers failed to prove that Jack's
breached its duty of care and that breach was the cause of
Robert's injuries.
B. Discovery Rulings
Both the Dahlagers' second point of error and Jack's
cross-appeal stem from the circuit court's orders granting the
Dahlagers' request for discovery sanctions against Jack's for
failing to preserve the chair and withholding the Watanabe and
PADI reports.
1. The Dahlagers' Arguments
a. Default Judgment
Specifically, the Dahlagers challenge the circuit
court's refusal to enter a "default judgment on liability" for
spoliation of the subject chair and the late disclosure of the
Watanabe and PADI reports.
"[T]he circuit court has wide-ranging authority to
impose sanctions for the spoliation of evidence." Stender v.
Vincent, 92 Hawai‘i 355, 362, 992 P.2d 50, 57 (2000). HRCP
Rule 37(b)(2) "allows the court to 'make such orders . . . as
are just,' including the dismissal of claims, in response to
discovery violations." Id. (citation omitted). "In addition to
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this rule, the circuit court also 'has the inherent power . . .
to fashion a remedy to cure prejudice suffered by one party as a
result of another party's loss or destruction of evidence.'"
Id. (cleaned up).
Still, dismissals and default judgments under HRCP
Rule 37 are drastic sanctions only authorized in extreme
circumstances. See W.H. Shipman, Ltd. v. Hawaiian Holiday
Macadamia Nut Co., 8 Haw. App. 354, 361, 802 P.2d 1203, 1207
(1990). Extreme sanctions, including default judgment, should
be supported by "evidence of willful or contemptuous or
otherwise opprobrious behavior[.]" See Weinberg v. Dickson-
Weinberg, 123 Hawai‘i 68, 76-77, 229 P.3d 1133, 1141-42 (2010).
Based on the record in this case, the circuit court
did not abuse its discretion in its sanction order, including
its refusal to enter default against Jack's. The circuit court
found Jack's breached its duty to preserve the chair and
sanctioned it for spoliation by precluding it from "contending
that the chair involved in the accident was not defective or
damaged prior to, and at the time [Robert] sat in it."
Moreover, although conflicting evidence pertaining to
the handling of the chair arose from the Watanabe Report and
Jack's took the position that the Watanabe Report was work
product, Jack's disclosed the existence of the Watanabe Report
and PADI Incident Report over a year before the Dahlagers filed
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a motion to compel production of the reports. And we note the
Dahlagers' motion to compel production of the reports was filed
less than three months before trial. Further, Jack's turned
over the reports after the matter was litigated and the circuit
court ruled in the Dahlagers' favor. Finally, the Dahlagers did
not point to any evidence in the record of "willful or
contemptuous or otherwise opprobrious behavior" by Jack's. See
Weinberg, 123 Hawai‘i at 77, 229 P.3d at 1142.
Thus, the circuit court's sanction against Jack's was
within the court's wide-ranging authority to impose sanctions.
b. Adverse Inference
The circuit court also did not abuse its discretion in
refusing to enter an adverse inference of negligence against
Jack's for discovery violations. HRCP Rule 37(b)(2)(B) allows
the court to sanction a party who fails to obey an order to
provide or permit discovery by issuing "[a]n order refusing to
allow the disobedient party to support or oppose designated
claims or defenses, or prohibiting him or her from introducing
designated matters in evidence[.]"
Here, the circuit court sanctioned Jack's for
spoliation of the subject chair by precluding it from opposing
the Dahlagers' claim that the subject chair was damaged or
defective at the time of the incident. This sanction was
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warranted because the circuit court found Jack's breached its
duty to preserve the subject chair.
Given the overall record in this case, we cannot say
that the court abused its discretion by refusing to enter an
adverse inference of negligence against Jack's.
c. Findings of No Expert Testimony
The Dahlagers argue that the circuit court's "emphasis
on the presentation of expert testimony to prove negligence was
itself error" and point to FOF 34, 37, 39, 42, and 57. 8 The
Dahlagers rely on the Hawai‘i Rules of Evidence (HRE) Rule 702.
HRE Rule 702 provides:
If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or
8 These FOF state as follows:
FOF 34 "Plaintiffs did not offer expert testimony to establish that the Subject Chair was unsafe for Mr. Dahlager because of the 250-lb weight limit."
FOF 37 "Plaintiffs did not offer expert testimony to establish that the Subject Chair was unsafe for Mr. Dahlager because of the narrowness of the gap between the chair's legs."
FOF 39 "Plaintiffs did not offer expert or lay testimony, or any other evidence to establish that Jack's commercial use of the Subject Chair created an unsafe condition or caused Mr. Dahlager's fall."
FOF 42 "Plaintiffs did not offer expert testimony at trial to establish that the Subject Chair was or could have been unsafe at the time of Mr. Dahlager's fall as a result of having been left out in the sun and heat."
FOF 57 "Plaintiffs did not offer expert testimony regarding the safety issues involved with the Subject Chair under circumstances where the pool deck at Jack's could be wet."
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education may testify thereto in the form of an opinion or otherwise. In determining the issue of assistance to the trier of fact, the court may consider the trustworthiness and validity of the scientific technique or mode of analysis employed by the proffered expert.
HRE Rule 702. "[T]he touchstones of admissibility for expert
testimony under HRE Rule 702 are relevance and reliability."
State v. Vliet, 95 Hawai‘i 94, 106, 19 P.3d 42, 54 (2001).
"[W]here the issues are within the common knowledge of the [fact
finder], expert testimony is unnecessary." Brown v. Clark
Equip. Co., 62 Haw. 530, 537, 618 P.2d 267, 272 (1980). But,
"[e]xpert testimony may be needed in actions involving injury
from a dangerous condition on a commercial property, such as
that involving a deck, porch, patio or similar structure." 194
Am. Jur. Proof of Facts 3d § 275 (2022).
Expert testimony may have been helpful in assisting
the court to determine if the chair was not safe for Robert.
Expert testimony on the chair's weight limit (FOF 34),
narrowness of the gap between the legs of the chair (FOF 37),
effects of the weather on the chair (FOF 42), and use of the
chair under the conditions of the pool deck (FOF 57) could have
assisted the circuit court in determining the chair's safety and
understanding the chair's design. Similarly, expert testimony
on the commercial use of the chair (FOF 39) could have assisted
the circuit court in determining whether the chair was unsafe
and caused Robert's injuries.
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Making findings on the lack of expert testimony was
within the court's discretion and does not warrant a new trial.
2. Jack's Cross-appeal
As mentioned, the circuit court granted the Dahlagers'
motions to compel, ordered Jack's to produce the Watanabe and
PADI reports, sanctioned Jack's for destroying the chair, and
ordered Jack's to pay $20,037.55 in related attorney's fees and
costs. In its cross-appeal, Jack's asserts that the circuit
court abused its discretion, contending the court failed to
address HRCP Rule 26(b)(4) and the related work product
doctrine. 9
The appellate courts give deference to the trial
court's decision to grant discovery. See Anastasi v. Fid. Nat'l
Title Ins. Co., 137 Hawai‘i 104, 111, 366 P.3d 160, 167 (2016).
a. PADI Incident Report
Before the circuit court, Jack's asserted that the
"only purpose in preparing the PADI Incident Report that has
been withheld as privileged was to facilitate the rendition of
legal services if Mr. Dahlager filed suit. It was prepared with
the expectation that its contents would be kept confidential,
9 In Jack's memorandum in opposition to, and the January 24, 2017 hearing on, the Dahlagers' motion to compel, Jack's appears to assert that the PADI and Watanabe reports were both protected under the attorney-client privilege and as work product. Jack's, however, analyzed the PADI Incident Report as protected under attorney-client privilege, and the Watanabe Report as work product, in its memorandum in opposition. In determining whether Jack's met its burden and whether the circuit court abused its discretion, we address the issues as Jack's presented in its analysis to the circuit court.
23 NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
and provided to counsel." Jack's argued that the PADI Incident
Report fell within the attorney-client privilege.
To support its position, Jack's provided a declaration
from Leicher, which stated that the PADI Report was prepared by
Woerner on the same day as the incident and faxed to PADI, who
would provide it to an attorney should there be a lawsuit:
At my direction, I had Andy Woerner, an instructor for Jack's Diving Locker, complete a PADI Incident Report on July 25, 2012. The 4 page report was then faxed to PADI to be provided to our attorney in the event that a lawsuit was filed. The report was specifically prepared for counsel, and is labelled "Incident Report Form This Report Is Prepared In Anticipation Of Litigation". When Jack's Diving Locker submitted the PADI Incident Report, it was with the expectation that the contents would be kept confidential, and provided to counsel assigned to defend us. As a certified PADI facility, Jack's Diving Locker is insured through a policy obtained through PADI, which is providing the defense to Jack's Diving Locker in this case.
Jack's also provided a declaration from Michael D.
Treacy (Treacy), which stated that PADI requests its insureds to
complete an incident report whenever an event may result in
litigation, and the report would be forwarded to counsel when a
suit is filed:
A claims file was opened for this matter upon submission of a PADI Incident Report from Jack's Diving Locker. PADI insureds are requested to prepare an incident report whenever an event occurs which may result in litigation. The PADI incident report is forwarded to defense counsel, once suit is filed.
The circuit court ordered that the PADI Incident Report be
produced.
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The rule on attorney-client privilege provides in
part:
A client has a privilege to refuse to disclose and to prevent any other person from disclosing confidential communications made for the purpose of facilitating the rendition of professional legal services to the client
(1) between the client or the client's representative and the lawyer or the lawyer's representative, or
(2) between the lawyer and the lawyer's representative, or
(3) by the client or the client's representative or the lawyer or a representative of the lawyer to a lawyer or a representative of a lawyer representing another party in a pending action and concerning a matter of common interest, or
(4) between representatives of the client or between the client and a representative of the client, or
(5) among lawyers and their representatives representing the same client.
HRE Rule 503(b) (formatting altered).
This "privilege is bottomed on assumptions that
lawyers can act effectively only if they are fully advised of
the facts by the parties they represent and disclosure will be
promoted if the client knows that what he tells his lawyer
cannot be extorted from the lawyer." DiCenzo v. Izawa, 68 Haw.
528, 535, 723 P.2d 171, 175 (1986) (cleaned up). But since this
privilege may suppress relevant evidence and forestall truth
seeking, it "must be strictly limited to the purpose for which
it exists." Id. (citation omitted).
The Hawai‘i Supreme Court has explained that it has
"serious doubts about the advisability of making statements
taken by an insurance investigator or adjuster immune from
25 NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
discovery as a matter of policy." DiCenzo, 68 Haw. at 537, 723
P.2d at 177 (cleaned up). "For the internal documents of
insurance companies obtained in the normal course of business
relating to the claims of their insureds would then be shielded
from discovery, and we would be creating a new privilege
(insured-insurer) or extending a statutory privilege beyond its
intended reach." 68 Haw. at 537-38, 723 P.2d at 177 (cleaned
up).
Here, Jack's bore the burden of showing the PADI
Incident Report was protected by attorney-client privilege. See
Sapp v. Wong, 62 Haw. 34, 38, 609 P.2d 137, 140 (1980)
(explaining that "[p]roper practice requires preliminary
judicial inquiry into the existence and validity of the
privilege and the burden of establishing the privilege rests on
the claimant").
The Leicher declaration made blanket statements that
the PADI report was, and Jack's expected it to be, confidential.
But Leicher did not provide specific facts showing the report
was covered by attorney-client privilege. And although Leicher
and Treacy indicated the report would make its way to an
attorney should a suit be filed, Jack's sent the report to PADI
and there was no evidence that PADI acted as Jack's lawyer or
the lawyer's representative. HRE Rule 503(a)(4) ("A
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'representative of the lawyer' is one directed by the lawyer to
assist in the rendition of professional legal services").
To the extent Leicher's declaration implies that PADI
is Jack's representative because PADI is providing a defense for
Jack's, a similar situation occurred in DiCenzo. 68 Haw. at
534, 723 P.2d at 174; HRE Rule 503(a)(2) ("A 'representative of
the client' is one having authority to obtain professional legal
services, or to act on advice rendered pursuant thereto, on
behalf of the client").
In DiCenzo, "[t]he trial court ruled . . . that the
statements made by Defendant Helen M. Izawa to her insurance
company are privileged under" HRE Rule 503. DiCenzo, 68 Haw. at
534, 723 P.2d at 174 (internal quotation marks omitted).
Overturning the trial court's ruling, the Hawai‘i Supreme Court
explained, "[w]ere we to uphold the privilege under these
circumstances, any report or statement made by an insured person
to an investigator or adjustor employed or retained by the
insurer would be within the attorney-client privilege as a
matter of law." 68 Haw. at 536-37, 723 P.2d at 176. The
supreme court declined to adopt the holdings of other courts
"that the insured may properly assume the communication was made
to the insurer as an agent for the dominant purpose of
transmitting it to an attorney for the protection of the
interest of the insured" since the insurer selects the attorney
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and conducts the defense. DiCenzo, 68 Haw. at 537, 723 P.2d at
176 (cleaned up).
Based on the evidence it presented to the circuit
court, Jack's did not meet its burden of showing that the PADI
Incident Report fell within the attorney-client privilege.
Thus, the circuit court did not abuse its discretion in granting
the Dahlagers' motion to compel production of the PADI Incident
Report.
b. Watanabe Report
Before the circuit court, Jack's asserted that "the
purpose of the investigative report being requested was to
assist in litigation" and that the report "was requested only
after the Dahlager's [sic] themselves had an attorney contact
Jack's . . . ." Jack's argued that the Dahlagers had "not
established a substantial need for the investigative report" and
"[t]he fact that [Jack's] no longer has the subject chair also
should not be a basis for requiring production of the
investigative report."
In support of its position, Jack's attached the Treacy
declaration, which stated the sequence of events leading to the
creation of the Watanabe Report:
On September 11, 2012, Ada De La Cruz of York Insurance Services Group, engaged the services of ICS Merrill, EMSI Investigative Services Division to conduct an investigation on [Robert's] claims. Prior to the request being made, attorney Ian Mattoch had submitted a letter of representation, dated August 28, 2012. Investigator Earl Watanabe of ICS Merrill prepared a confidential
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investigative report, dated October 9, 2012, concerning [Robert's] claim. The investigative report of Earl Watanabe is labeled, "This Confidential Report Is Submitted In Anticipation Of Future Litigation. It Is And Should Always Be Considered Attorney/Client Work Product."
The circuit court granted the Dahlagers' motion to compel and
ordered Jack's to produce the Watanabe Report.
Jack's bore the burden of showing that the Watanabe
Report was work product. See Roy v. Gov't Emps. Ins. Co., 152
Hawai‘i 225, 239, 524 P.3d 1249, 1263 (App. 2023) (explaining
that "the burden of establishing work product protection lies
with the proponent, and it must be specifically raised and
demonstrated rather than asserted in a blanket fashion")
(citation omitted).
HRCP Rule 26 governs work product, and provides in
relevant part as follows:
A party may obtain discovery of documents, electronically stored information, and tangible things otherwise discoverable under subdivision (b)(1) of this Rule and prepared in anticipation of litigation or for trial by or for another party or by or for that other party's representative (including the other party's attorney, consultant, surety, indemnitor, insurer, or agent) only upon a showing that the party seeking discovery has substantial need of the materials in the preparation of the party's case and that the party is unable without undue hardship to obtain the substantial equivalent of the materials by other means. In ordering discovery of such materials when the required showing has been made, the court shall protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation.
HRCP Rule 26(b)(4) (emphases added).
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"[T]he relevant inquiry for determining whether a
document can be protected by work product doctrine is whether
the document was prepared in anticipation of litigation or
trial." Anastasi, 137 Hawai‘i at 113-14, 366 P.3d at 169-70.
And "[m]ost courts have recognized that an insurance carrier's
investigation of a claim is generally performed in the ordinary
course of business and not protected by work product doctrine."
Id. at 114, 366 P.3d at 170.
Hawai‘i courts have adopted the "because of" test in
situations where a document serves more than one purpose or "was
not prepared exclusively for litigation." Id. at 113, 366 P.3d
at 169; see also Moe v. Sys. Transp., Inc., 270 F.R.D. 613, 625
(D. Mont. 2010) (noting the "because of" standard often applies
to insurance claims investigations). "In applying the 'because
of' standard, courts must consider the totality of the
circumstances and determine whether the 'document was created
because of anticipated litigation, and would not have been
created in substantially similar form but for the prospect of
litigation.'" Anastasi, 137 Hawai‘i at 113, 366 P.3d at 169.
The Treacy declaration set forth the sequence of
events - Mattoch sent a letter of representation on August 28,
2012, the insurer engaged the services of an investigator on
September 11, 2012, and Watanabe prepared a report dated
October 9, 2012. The Treacy declaration also restated that the
30 NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
report itself was labeled, "This Confidential Report Is
Submitted In Anticipation Of Future Litigation. It Is And
Should Always Be Considered Attorney/Client Work Product."
Other than providing the order of events and restating
the report's self-labeling, the Treacy declaration does not
provide any insight as to the purpose of the Watanabe Report,
whether it was created "because of" litigation, or that it would
not have been created in the ordinary course of business. See
Anastasi, 137 Hawai‘i at 114, 366 P.3d at 170 ("Nowhere in the
rule is there reference to when a document is prepared.
Instead, the rule clearly focuses on the purpose of the prepared
material and not on when it is prepared").
Moreover, the Treacy declaration makes no statement as
to whether the Watanabe Report contains "the mental impressions,
conclusions, opinions, or legal theories of an attorney or other
representative of a party concerning the litigation." See HRCP
Rule 26(b)(4) (providing that "the court shall protect against
disclosure of the mental impressions, conclusions, opinions, or
legal theories of an attorney or other representative of a party
concerning litigation").
court, Jack's failed to meet its burden of showing that the
Watanabe Report was not subject to production under the rules of
31 NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
discovery. Thus, the circuit court did not abuse its discretion
in ordering production of the Watanabe Report.
c. Spoliation of the Chair
Jack's also argues that the court based its spoliation
finding on the contents of the Watanabe Report, which was not
authenticated and contained inadmissible hearsay.
Here, in moving for sanctions, the Dahlagers offered,
among other things, the Watanabe Report to show the chairs were
returned to Walmart. 10
During the hearing on the Dahlagers' request for
sanctions, the circuit court stated that the "subject chair was
returned to [Walmart] and only discovered through the Court's --
well as the Court ordered the Motion to Compel." The circuit
court continued, "there's no dispute that the subject chair is
not available at this time" and the Dahlagers "will be suffering
prejudice as a result of [Jack's] destroying or withholding the
discovery evidence, the chair." The circuit court then ruled
that "inequity would occur in allowing [Jack's] in this case
[to] accrue benefit from its conduct in destroying the chair."
The circuit court subsequently ordered that Jack's
"will be precluded from opposing or claiming that nothing was
10 The Dahlagers proffer that the circuit court had "the [Walmart] receipts produced in discovery showing that all 10 of the chairs purchased on June 8, 2012 had been returned on July 26, 2012[.]" But, the return receipt shows only "General Mdse" was returned with no specific description of item or quantity.
32 NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
wrong with the chair, because Plaintiffs have not had an
opportunity to inspect the chair." The circuit court awarded
the Dahlagers attorney's fees and costs related to the two
motions to compel.
Ultimately, there was no dispute Jack's destroyed the
chair, which was key evidence in this case. And Jack's was on
notice that litigation arising from Robert's fall from the chair
was a possibility.
Based on the particular circumstances in this case, we
cannot conclude that error, if any, in relying on the Watanabe
Report injuriously affected Jack's substantial rights. Hawaii
Revised Statutes § 641-2 (2016) (providing in part that "[n]o
judgment, order or decree shall be reversed, amended, or
modified for any error or defect, unless the court is of the
opinion that it has injuriously affected the substantial rights
of the appellant").
C. Precluding Causation Testimony by Treatment Providers
In their third point of error, the Dahlagers contend
the circuit court abused its discretion "in granting [Jack's]
Motion to Limit Testimony from Treating Physicians, sustaining
[Jack's] objections to opinion testimony by [Mary] based on this
ruling, and denying [the Dahlagers'] Oral Motion to Reconsider
its ruling." The Dahlagers specifically maintain they were
unable to prove a defective chair legally caused the injury
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because the court limited testimony from Robert's non-retained
treating physicians because the Dahlagers did not provide
written expert reports by the court's deadline.
"The Hawai‘i Supreme Court has held that complete and
accurate pretrial discovery of expert witnesses is critical to a
fair trial." Barbee v. Queen's Med. Ctr., 119 Hawai‘i 136, 157,
194 P.3d 1098, 1119 (App. 2008) (cleaned up). "Pretrial
disclosure of expert witnesses is necessary because effective
cross-examination of an expert witness requires advance
preparation." Id. (cleaned up). Also, HRCP Rule 26, "is
designed to promote candor and fairness in the pretrial
discovery process and to eliminate surprises at trial." Id.
(citation and internal quotation marks omitted).
Here, the circuit court ordered the Dahlagers to
provide written expert reports by November 10, 2016, giving the
Dahlagers almost nine months to obtain expert reports. The
Dahlagers, however, did not do so. Jack's contended that the
Dahlagers' failure to provide expert reports and medical records
related to the fall deprived it of critical information needed
to prepare for cross-examination of these experts.
To be clear, Robert's treating physicians were not
completely precluded from testifying. They were only precluded
from testifying as to the cause of Robert's injuries.
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Further, as Jack's asserts, Robert's medical records
were admitted into evidence. Regarding certain records from
Kaiser, the circuit court found that those records made no
mention of the fall at Jack's.
As to Mary's testimony, the circuit court found Mary
"qualified as an expert in the area of physical therapy." When
the Dahlagers' counsel attempted to solicit Mary's expert
opinion regarding the cause of Robert's injury, the circuit
court cautioned counsel "about the motion in limine regarding
providing any type of opinion when there's no report submitted."
The Dahlagers' counsel then attempted to ask Mary
about causation and treatment of Robert's injury after the
incident at Jack's. Jack's objected, and the circuit court
sustained, informing the Dahlagers' counsel that Mary "should
have submitted a report as to her treatment and the reasons
why." The court warned:
You cannot use the back door to try to get in reports of what she knew and how she treated [Robert] when in fact there were specific instructions in this case and orders by this court that if you're gonna call someone as an expert that you need to submit the reports by November 10, 2016[.]
Under the court's order, Mary should have provided a
report if she was being held out as an expert who provided
Robert treatment and was going to testify as to the cause of his
injuries.
35 NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
In sum, the circuit court did not abuse its discretion
in limiting the testimony of treatment providers as to
causation.
III. CONCLUSION
Based on the foregoing, we affirm the circuit court's
(1) August 16, 2017 Final Judgment; (2) June 2, 2017 "Findings
of Fact and Conclusions of Law and Order After Jury-Waived
Trial"; (3) February 17, 2017 "Order Granting Plaintiffs' Motion
to Compel Production of Documents filed December 27, 2016";
(4) March 1, 2017 "Order Granting Plaintiffs' Motion to Compel
Discovery and for Discovery Sanctions filed January 13, 2017";
(5) March 23, 2017 "Order Granting Fees and Costs Related to
Plaintiff's Motion to Compel Production of Documents filed
December 27, 2016"; and (6) March 23, 2017 "Order Granting Fees
and Costs Related to Plaintiffs' Motion to Compel Discovery and
for Discovery Sanctions filed January 13, 2017[.]"
DATED: Honolulu, Hawai‘i, June 26, 2023.
On the briefs: /s/ Lisa M. Ginoza Chief Judge Scott E. Kubota, Christopher S. Bouslog, /s/ Clyde J. Wadsworth for Plaintiffs-Appellants/ Associate Judge Cross-Appellees. /s/ Sonja M.P. McCullen Gary G. Grimmer, Associate Judge Ann Correa, for Defendant-Appellee/ Cross-Appellant.