Fasone Properties LLC v. Urata

542 P.3d 1276, 153 Haw. 581

• Court: Hawaii Intermediate Court of Appeals
• Decided: February 15, 2024
• Docket: CAAP-19-0000667
• Status: Published

Opinion

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Electronically Filed Intermediate Court of Appeals CAAP-XX-XXXXXXX 15-FEB-2024 08:10 AM Dkt. 46 SO

NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

FASONE PROPERTIES LLC, Plaintiff-Appellee, v. MARIAN Y. URATA, as Trustee of the Marian Y. Urata Trust, Dated June 4, 1992, and as Successor Trustee of the Walter M. Urata Trust, Dated June 4, 1992, Defendant-Appellant, and DOES 1-10, Defendants

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT (CIVIL NO. 16-1-1624-08 (KKH))

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

Defendant-Appellant Marian Y. Urata as Trustee of the

Marian Y. Urata Trust, dated June 4, 1992, and as Successor

Trustee of the Walter M. Urata Trust, dated June 4, 1992 (Urata),

appeals from the Circuit Court of the First Circuit's (Circuit

Court)1 September 3, 2019 Judgment on Findings of Fact [(FOFs)],

Conclusions of Law [(COLs)], and Order Granting Plaintiff's

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 NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Motion for Appointment of Commissioner and Issuance of Partition

Decree, Filed August 30, 2017; and Denying [Urata's] Motion for

Partial Summary Judgment as to Count III (Partition) of Her

Counterclaim filed September 25, 2017, in favor of Plaintiff-

Appellee Fasone Properties LLC (Fasone LLC).2 Urata also

challenges the Circuit Court's September 3, 2019 [FOFs], [COLs],

and Order Granting Plaintiff's Motion for Appointment of

Commissioner and Issuance of Partition Decree, Filed August 30,

2017; and Denying [Urata's] Motion for Partial Summary Judgment

as to Count III (Partition) of Her Counterclaim filed September

25, 2017 (Order for Partition).

Urata raises three points of error on appeal,

contending that the Circuit Court erred in entering the Order for

Partition because: (1) the Circuit Court erred in entering FOF 5

and COLs 2-5 and by failing to determine whether it has the power

in equity to order a partition in kind through the creation of a

Condominium Property Regime (CPR); (2) the Circuit Court erred in

concluding that the imposition of a CPR in this case would be

impractical and greatly prejudicial to Fasone LLC; and (3) the

Circuit Court erred in ordering that the subject property

(Property) be partitioned by sale and not in kind.

Upon careful review of the record and the briefs

submitted by the parties, and having given due consideration to

2 The members of Fasone LLC appear to be the children of the Fasones.

2 NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

the arguments advanced and the issues raised by the parties, we

resolve Urata's points of error as follows: Since a partition action is an action in equity, we review a partition finding under the abuse of discretion standard. See AIG Haw. Ins. Co., Inc. v. Bateman, 82 Hawai#i 453, 457, 923 P.2d 395, 399 (1996). Under the abuse of discretion standard, unless there is abuse, a trial court's discretion should not be disturbed. Sugarman v. Kapu, 104 Hawai#i 119, 124, 85 P.3d 644, 649 (2004). Abuse is apparent when a trial court's discretion clearly exceeds the bounds of reason or disregards rules or principles of law or practice to the substantial detriment of a party litigant. Id. (quoting Indus. Mortgage Co. v. Smith, 94 Hawai#i 502, 510, 17 P.3d 851, 859 (App. 2001)). In exercising its discretion, the court should act in the interest of fairness and prudence, and with a just regard to the rights of all concerned[.] Id. (quoting Brent v. Staveris Dev. Corp., 7 Haw. App. 40, 45, 741 P.2d 722, 726 (1987)).

Kimura v. Kamalo, 106 Hawai

(2005) (quotation marks omitted).

Urata asks this court to vacate the Order for Partition

and Judgment and to instruct the Circuit Court to order a

partition in kind by way of a CPR, rather than a partition by

sale. Urata does not argue that the Circuit Court abused its

discretion in entering the Order for Partition. Instead, Urata

argues that the Circuit Court could have effectuated the

partition otherwise, by CPR, and we should order it to do so.

In 1974, Joseph and Sandra Fasone (the Fasones) and

Walter and Marian Urata (the Uratas) entered into an Agreement of

Sale (the Agreement) to purchase the Property, with the Fasones

owning an 83% undivided interest and the Uratas owning a 17%

undivided interest. In the Agreement, the Fasones and Uratas

agreed to subdivide the Property when it became legally possible

3 NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

to do so. The Property was put in trusts, the Fasones died, and

Walter Urata died. Marian Urata lives in one of the homes on the

Property, which she has lived in for many decades. There is no

dispute as to the current undivided ownership interests in the

Property; Urata owns a 17% undivided interest. It is undisputed

that a subdivision of the Property, as agreed to in the

Agreement, is not possible.

Here, the Circuit Court did not conclude that it did

not have the power in equity to create a CPR. Rather, it

concluded that the operative partition statute, Hawaii Revised

Statutes (HRS) § 668-7 (2016) neither mentions imposition of a

CPR nor clearly prohibits it. This conclusion is not wrong. The

Circuit Court declined to determine whether it had the power in

equity to order the creation of a CPR because it determined that

a CPR in accordance with HRS Chapter 514B "would bind the parties

and limit their respective rights in a [manner] that the Court

deems excessive, even if it is authorized in equity[.]" The

Circuit Court noted in particular the impracticality and

prejudice to Fasone LLC, the majority (83%) co-owner.

Based upon the record before the Circuit Court, and the

initial and ongoing obligations, interests, expenses,

uncertainties, and/or risks inherent in imposing (or attempting

to impose) a CPR on this particular Property in accordance with

HRS Chapter 514B, and in light of the parties' respective

4 NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

interests, we cannot conclude that the Circuit Court abused its

discretion by ordering a partition by sale.

Accordingly, the Circuit Court's September 3, 2019

Judgment is affirmed.

DATED: Honolulu, Hawai#i, February 15, 2024.

On the briefs: /s/ Katherine G. Leonard Acting Chief Judge Regan M. Iwao, (Schlack Ito LLLC), /s/ Clyde J. Wadsworth for Defendant-Appellant. Associate Judge

Thomas E. Bush, /s/ Sonja M.P. McCullen (Thomas Bush Law Office, LLLC), Associate Judge for Plaintiff-Appellee.