Goran Pleho, LLC v. Lacy. ICA mem.op., filed 07/29/2016. Motion for Partial Reconsideration of Memorandum Opinion, filed 08/08/2016.

439 P.3d 176

Opinion

I. INTRODUCTION

This case requires us to consider a series of rulings by the trial court in a complex commercial dispute involving the sale of a limousine service. Goran and Ana Maria 2 Pleho purchased Resorts Limousine Services (RLS), a Kona-based business, from their acquaintance, Dragan Rnic, in 2005. David W. Lacy, Esq., of the firm Lacy & Jackson LLLC (collectively, "Lacy Parties"), represented Goran and Maria in the transaction. At Lacy's recommendation, Goran and Maria formed a corporation, Goran Pleho, LLC (GPLLC), and the transaction was completed in GPLLC's name. Goran and Maria discovered problems with the business several months after the purchase. Goran and Maria, and GPLLC (collectively, "Pleho Parties"), brought the present action in the Circuit Court for the Third Circuit (circuit court) 3 , alleging that Rnic and Lacy Parties intentionally misrepresented the value of RLS.

Pleho Parties asserted numerous claims against the defendants, including fraud and legal malpractice, and they asked the court to rescind or reform the sale of RLS and award compensatory and punitive damages. Rnic counterclaimed for breach of contract and other counts related to Pleho Parties' failure to make payments on the purchase price, and cross-claimed against Lacy Parties.

After extensive pretrial motions and discovery, Rnic settled all claims with Lacy Parties and Pleho Parties. Additionally, the circuit court dismissed or granted summary judgment on most of Pleho Parties' claims against Lacy Parties prior to trial.

Meanwhile, Goran and Maria filed for bankruptcy in Nevada, which led to a stay of the action in the circuit court for eleven months. Lacy Parties filed a motion in limine requesting that Pleho Parties be barred from presenting any evidence regarding their assets that conflicted with Goran and Maria's submissions in the bankruptcy proceeding, which the circuit court denied.

At trial, the circuit court granted judgment as a matter of law (JMOL) against Pleho Parties on most remaining claims, and only their legal malpractice claim based on Lacy's representation of GPLLC went to the jury. The jury found Lacy Parties not liable by special verdict. The circuit court entered judgment against Pleho Parties on all counts, awarding attorney's fees and costs to Lacy Parties.

On appeal, the Intermediate Court of Appeals (ICA) partially vacated the circuit court's judgment, finding that the circuit court had erroneously dismissed or granted summary judgment on Goran and Maria's claims as individuals for fraud, legal malpractice, and punitive damages. The ICA also vacated the circuit court's denial of the motion in limine, finding that Lacy Parties had demonstrated all of the elements of judicial estoppel. The ICA affirmed the circuit court's judgment in all other respects.

In their application for writ of certiorari, Pleho Parties argue that the ICA erred in failing to revive their remaining claims against Lacy Parties. These include claims by Goran and Maria, as individuals, for conspiracy to commit fraud, intentional infliction of emotional distress (IIED), negligent infliction of emotional distress (NIED), and unfair and deceptive trade practices (UDAP); and claims by GPLLC for fraud and punitive damages. Pleho Parties also argue that the ICA erred when it vacated the trial court's order denying Lacy Parties' motion in limine.

We conclude that the dismissal of Goran and Maria's claims for IIED and NIED was in error, as they stated colorable claims on both counts. We also conclude that the grant of JMOL on GPLLC's claims for fraud and punitive damages was in error. Viewing the evidence in the light most favorable to the nonmoving party, a reasonable jury could have returned a verdict in favor of Pleho Parties on these counts. We also conclude that the ICA erred in vacating the trial court's order denying Lacy Parties' motion in limine.

Finally, a majority of this court concludes that the grant of summary judgment as to Goran and Maria Pleho's UDAP claim was in error.

We affirm the ICA on all remaining issues.

II. BACKGROUND

A. Sale of RLS 4

Before the sale of RLS to GPLLC, Rnic signed an agreement in June 2005 with a third individual, Don Rullo, to sell RLS for $800,000 in cash. The sale did not close. Rullo, a real estate agent, was a client of Lacy's who consulted with him about business matters frequently, and Lacy testified that he represented Rullo in this potential transaction. Rnic testified that Rullo introduced him to Lacy.

2

In Petitioners' application for writ of certiorari, Ana Maria Pleho is referred to as Maria. We adopt this naming convention throughout this opinion.

3

The Honorable Ronald Ibarra presided.

4

Unless otherwise indicated, the following facts are undisputed.

Goran Pleho and Rnic met in Las Vegas in 2004, and Goran subsequently served as Rnic's realtor in a number of real estate purchases. Rnic told Goran about his intention to sell RLS. Goran testified that Rnic gave him financial documents detailing RLS's profits and losses; when Goran told Rnic that he did not understand the documents, Rnic said that they should consult "David Lacy, the best attorney on the island." Goran and Maria met Lacy on July 11, 2005, where, according to Goran:

Mr. Rnic introduced Mr. Lacy as his attorney, but he also introduced him as the best attorney on the island, and only he was the one capable of doing all the business transactions, very capable. And at that point I said, "Well, okay. But that is your attorney, and if we are going to even consider this, I have to have my attorney to represent me." Rnic said, "Well, then I don't need an attorney, and Mr. Lacy can be your attorney." And Mr. Lacy said, "Well, I'm not sure I can do it. I got to think about it."

Lacy described his introduction to Goran as follows:

Dragan Rnic was trying to sell his limousine company to Don Rullo. Don Rullo introduced Dragan Rnic to me. That fell through. And some, a week, five days, I forget what it was after that, Dragan brought Goran to my office. And I met him. And then they had all the terms and conditions of the deal that they had agreed to. And so I agreed to do the paperwork on behalf of Mr. Pleho as an LLC.

....

[T]hey both came in and had agreed upon the terms and conditions of the sale, and I think I told 'em they needed lawyers. Mr. Rnic said he didn't, and I should just be Mr. Pleho's lawyer. And then after thinking about it and I guess I talked to [Lacy's partner] Kim [Jackson], I agreed to be his lawyer, if he wanted me to.

Lacy agreed to represent Goran in the transaction, and referred Goran to a certified public accountant (CPA) to obtain an appraisal of RLS. However, the CPA told Goran that he was not available to do the appraisal. Goran testified that he expressed concern about proceeding with the sale without an appraisal at his next meeting with Rnic and Lacy on July 19, 2005:

So I said, "I can't go forward with this. I need an appraisal. I need to see what is this company's worth."

And Mr. Rnic said, "Well, what do you mean? This is a unique company, only one of this kind. There's nobody to appraise this company. It's worth $2 million, and $1.5 is just a great price." And Mr. Lacy repeated the same thing to me.

Goran testified that he and Lacy went over hundreds of documents provided by Rnic pertaining to RLS's finances, and that Lacy assured him that the "financials" were "satisfactory." Lacy testified that he "would never tell any client that his business was unique and could not be appraised."

Lacy recommended that Goran form a limited liability company to purchase RLS, and on July 25, 2005, Goran executed GPLLC's incorporation documents, which Lacy drafted. Goran was GPLLC's sole member at the time of incorporation.

Also on July 25, 2005, Rnic and GPLLC executed a Sale of Assets Agreement (Sale Agreement), by which Rnic sold RLS to GPLLC for a price of $1,500,000. As a down payment, Goran and Maria agreed to transfer three Las Vegas properties worth approximately $378,000 to Rnic, with the rest of the sale price to be paid back by GPLLC in monthly installments based on the gross income of RLS. The agreement provided that closing would take place upon the transfer of Rnic's Public Utilities Commission (PUC) license to GPLLC.

That same day, GPLLC executed a $1,122,000 promissory note in favor of Rnic and a Management Services Agreement, whereby GPLLC agreed to manage and operate RLS until the transfer of Rnic's PUC license. Lacy prepared the Sale Agreement, the promissory note, and the Management Services Agreement. He also prepared a limited power of attorney allowing GPLLC to manage RLS on Rnic's behalf before the PUC license was transferred to GPLLC, and a warranty bill of sale, both executed on July 25, 2005. Although the Sale Agreement provided that closing would occur once the PUC license was transferred, the bill of sale was transferred to GPLLC that same day.

After July 25, 2005, Goran and Maria received some training from RLS employees and began running the business. Goran testified that in November 2005, he received a phone call about RLS from a friend, who informed him that "the numbers were altered before it was sold." Goran testified that he subsequently met with Lacy several times and told him that "this surely looks like fraud," but Lacy downplayed Goran's concern and advised him to wait for the completion of the PUC license transfer before taking any action "as far as fraud." According to Lacy's notes from a February 14, 2006 meeting with Goran, "Mr. Pleho wanted to wait until he had the [PUC] license and then approach Mr. Rnic and try and resolve the problems...." Rnic's PUC license was transferred to GPLLC on March 10, 2006.

B. Circuit Court Proceedings

1. Pretrial

Pleho Parties filed a complaint on July 6, 2006, naming Rnic and Lacy Parties as defendants. Pleho Parties asserted that they had purchased RLS for a price "far in excess of the actual fair market value" based on fraudulent information from Rnic. The complaint alleged that Lacy Parties had:

failed, refused, and/or neglected to properly advise and assist [Pleho Parties] on the transaction and to safeguard them against the unconscionable terms of the agreement ultimately entered and, in fact, drafted the terms adverse to the interests of [Pleho Parties].... Further, [Lacy Parties] continued to represent [Pleho Parties] subsequent to the initial transaction and failed, refused, and/or neglected to take timely and appropriate action to foreclose or mitigate harm to [Pleho Parties] once the fraudulent conduct of [Rnic] was discovered.

Pleho Parties twice amended their complaint, which ultimately included the following counts against Rnic and Lacy Parties: (I) conspiracy to commit fraud; (II) fraud; (III) fraud in the inducement; (IV) gross inadequacy of consideration; (V) IIED; (VI) NIED; (VII) UDAP; (VIII) legal malpractice (against Lacy Parties alone); (IX) intentional spoilation of evidence; (X) negligent spoilation of evidence; and (XI) punitive damages. The second amended complaint alleged that Lacy intentionally misrepresented the value of RLS to Pleho Parties, and that Pleho Parties would not have purchased RLS if they had known that Rnic had agreed to sell the business to Rullo for only $800,000.

In their answer, Lacy Parties argued that Pleho Parties had caused or contributed to any injuries they suffered. That same day, Lacy Parties also filed a cross-claim against Rnic.

Rnic filed an answer and counterclaim against GPLLC on September 26, 2006, alleging that:

since the Management Service Agreement, GPLLC and [Goran] Pleho have failed to maintain [RLS] in a reasonable, profitable fashion, running the business into the ground, causing lost profits and decrease in the value of the business and goodwill, all to Rnic's detriment.

Rnic's counterclaim included six counts against GPLLC and Goran related to the sale and management of RLS, including breach of the Sale Agreement and promissory note for failure to make payments on the purchase price. Pleho Parties filed a cross-claim against Lacy Parties based on Rnic's counterclaim.

Rnic filed a motion for summary judgment on Pleho Parties' claims against him, which the circuit court granted on May 13, 2009.

Lacy Parties filed a Hawai'i Rules of Civil Procedure (HRCP) Rule 12(b)(6) motion to dismiss all counts of Pleho Parties' second amended complaint except for Count VII (UDAP) and Count XI (punitive damages), which the circuit court granted on May 13, 2009.

Pleho Parties filed a motion for reconsideration and clarification of the May 13, 2009 order granting Lacy Parties' motion to dismiss. On July 29, 2009, the circuit court entered an order denying and clarifying Pleho Parties' motion. The court stated that it was dismissing all counts but the following: for GPLLC, Counts II (fraud), III (fraud in the inducement), and VIII (legal malpractice); for Goran and Maria Pleho as individuals, Count VII (UDAP); and for GPLLC and Goran and Maria Pleho as individuals, Count XI (punitive damages). The court explained its reasoning as follows:

Count I for conspiracy to commit fraud falls away because there is but one person accused and the prior co-conspirator has been judged not liable.... Because the conspiracy was alleged to have been between Defendant Rnic and Defendants David W. Lacy and Lacy & Jackson, LLLC, and Defendant Rnic was granted summary judgment on the count of conspiracy to commit fraud, there is no party for the remaining Defendants to conspire with.

Count V and VI are properly dismissed by implication. There is no mental distress which can be suffered by a corporation....

Count VII for unfair and deceptive trade practices can not stand on behalf of [GPLLC], because a claim for unfair and deceptive trade practices is reserved by statute for consumers.... A corporation is not a natural person and does not have standing to bring a claim for unfair and deceptive trade practices under the statute....

Count VIII for legal malpractice was asked to be dismissed as to [Goran and Maria Pleho] as individual plaintiffs, because they had not suffered damages; they did not purchase, as individuals, the business that is the underlying subject of this case, and therefore did not suffer any individual damages relating to the purchase. The Court ruled in favor of the Defendants; therefore Count VIII for legal malpractice stands on behalf of the LLC alone.

Count XI for punitive damages stands, based only on the claims still standing for [Goran and Maria Pleho] and the LLC. But because the only claim [Goran and Maria] can claim punitive damages for is unfair and deceptive trade practices, which awards double or treble damages, they should be held to only one form of recovery.

Lacy Parties subsequently moved for partial summary judgment on Goran and Maria's UDAP and punitive damages claims, which the circuit court granted.

On March 10, 2011, counsel for all parties appeared before the circuit court to enter two settlement agreements into the record. The first settlement agreement provided that Lacy's indemnity insurance company would pay Rnic $650,000 in exchange for releasing GPLLC from all claims arising out of the RLS Sale Agreement and promissory note, so as to "allow [GPLLC] to retain and operate RLS free and clear of any claims by or obligations to Rnic." Rnic also agreed to the dismissal of his counterclaim against GPLLC.

The second settlement agreement provided that Rnic would release all claims against Pleho Parties in exchange for a stipulation of entry of judgment against Goran in the amount of $100,000, to be paid in twenty-five $4,000 installments. 5

2. Trial

Jury trial began on June 7, 2011 on GPLLC's remaining claims: Count II (fraud), Count III (fraud in the inducement), Count VIII (legal malpractice), and Count XI (punitive damages).

Both Goran and Lacy testified at trial, giving their conflicting accounts of the events leading up to the sale of RLS. Among the other witnesses called were two expert accountants, who offered competing appraisals of the value of RLS: Lacy Parties' expert appraised RLS at $1,156,000, while Pleho Parties' expert Mark Hunsaker appraised RLS at $128,000. On cross-examination, Hunsaker testified as follows:

[Lacy Parties' counsel]: Now, what you valued in this case ... is the 100 percent equity interest in Goran Pleho, LLC dba Resorts Limousines as of July 25, 2005, on a controlling marketable basis?

[Hunsaker]: Correct.

[Lacy Parties' counsel]: Are you familiar with the "International Glossary of Business Valuation Terms"?

[Hunsaker]: I am.

[Lacy Parties' counsel]: Isn't that an authoritative source that business appraisers customarily rely on?

[Hunsaker]: It is.

[Lacy Parties' counsel]: Isn't the definition of equity the owner's interest in property after deduction of all liabilities?

[Hunsaker]: Correct.

After Pleho Parties rested their case, Lacy Parties moved for JMOL on all remaining claims. Lacy Parties argued that these claims must fail for lack of damages because Rnic had agreed to release all claims against Pleho Parties as part of Lacy Parties' settlement with Rnic, i.e., any damages based on Pleho Parties' liability to Rnic no longer existed. According to Lacy Parties:

Plaintiff's valuation expert, Mark Hunsaker, testified that he valued a 100% equity interest in RLS. His valuation was $128,000, but his own testimony establishes that valuation of the equity interest was an incorrect measure. Hunsaker agreed on cross-examination with the definition in the International Glossary of Business Valuation Terms, 2001 Ed., that equity is "the owner's interest in property after deduction of all liabilities." ... Conversely, in order to obtain the actual value of RLS, which is the owner's interest in the property, Hunsaker would need to take the equity and add back in the liabilities. Based on Hunsaker's valuation of the equity at $128,000, and adding the $1,122,000 liability for the promissory note ... the LLC's interest in RLS is valued at $1,250,000.

....

Even viewing Plaintiff's evidence in the best light possible, as a result of the settlement, the LLC obtained a $1,250,000 business for $452,698 [$378,000 (Plaintiff's down payment from the three properties) + $74,698 (the amounts paid to date) ] .... Not only does the LLC have no damages, it actually came out ahead as a result of the settlement.

The circuit court orally granted the motion for JMOL as to fraud, fraud in the inducement, and punitive damages, but denied it as to legal malpractice, issuing a written order on July 6, 2011. Regarding the fraud, fraud in the inducement, and punitive damages claims, the court stated:

looking at the evidence in light most favorable to the non-movant, the Court finds that no reasonable jury would be able to find by clear and convincing evidence that the defendants committed fraud or fraud in the inducement as well as awarding punitive damages.

The jury returned a Special Verdict on the legal malpractice claim, finding that while Lacy breached the standard of care in providing legal services to GPLLC, this breach was not a legal cause of damages to GPLLC. Thus, the jury found that Lacy Parties were not liable for legal malpractice.

The circuit court entered judgment in favor of Lacy Parties on all claims asserted by Pleho Parties. Lacy Parties moved for attorney's fees and costs, and the court awarded $407,013.69 in attorney's fees and $29,191.96 in costs.

3. The Motion in Limine

On June 9, 2009, Goran and Maria filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Nevada.

On April 21, 2011, Lacy Parties filed a motion in limine to bar Pleho Parties from pursuing claims or introducing evidence regarding any alleged loan, debt, or other asset not specifically declared as an asset in the Nevada Bankruptcy Court action. Lacy Parties asserted that there "is apparent discord and confusion between [Goran and Maria's] disclosures in the Nevada [bankruptcy] action and [Pleho Parties'] claims in this civil litigation." Pleho Parties responded that they were not required to disclose GPLLC's debt to Goran and Maria in the bankruptcy proceedings, and that there was no evidence that Pleho Parties stood to gain unfair advantage by the alleged inconsistency. On June 3, 2011, the circuit court orally denied the motion, noting, "[c]ertainly it goes to credibility versus admissibility."

At trial, Pleho Parties offered into evidence Exhibit 27-G(7), a check from Goran to GPLLC, in order to prove damages. Counsel for Lacy Parties objected based on lack of foundation and lack of relevance, but the circuit court received the check into evidence.

C. ICA Proceedings

Pleho Parties appealed to the ICA, and Lacy Parties filed a cross-appeal from the circuit court's order denying their motion in limine to bar evidence inconsistent with Pleho Parties' disclosures in their bankruptcy proceedings.

1. Pleho Parties' Arguments

Pleho Parties raised four points of error before the ICA relevant to this opinion, 6 arguing that the circuit court erred in: (1) granting Lacy Parties' motion to dismiss Pleho Parties' claims for conspiracy, inadequate consideration, IIED, NIED, and spoliation of evidence, and Goran and Maria's claims as individuals for fraud, fraud in the inducement, and malpractice; (2) granting Lacy Parties' motions for partial summary judgment as to Goran and Maria's UDAP and punitive damages claims; (3) granting the Lacy Parties' motion for JMOL as to GPLLC's claims for fraud, fraud in the inducement, and punitive damages; and (4) granting Lacy Parties' attorney's fees and costs.

First, Pleho Parties argued that they alleged sufficiently "outrageous" conduct that was "calculated to cause, and did in fact cause, extreme emotional distress," supporting the restoration of their IIED and NIED claims. Pleho Parties further contended that although Lacy claimed that he only had an attorney-client relationship with GPLLC, Goran and Maria were "real parties in interest" because they had been injured by his conduct.

Pleho Parties asserted that "by first eliminating [GPLLC] as a non-customer, and then dropping [Goran and Maria] because they were allegedly not his clients, the court denied [Goran and Maria] relief for prima facie unfair and deceptive trade practices." Pleho Parties argued that "a lawyer who deceives a client about the value a company he wishes to purchase, has not only committed malpractice, but also a deceptive trade practice."

Finally, Pleho Parties argued that JMOL for fraud, fraud in the inducement, and punitive damages was inappropriate. According to Pleho Parties, the circuit court disregarded "compelling evidence" supporting all three claims, which "cut the heart out of this case" and left the jury "with the absurd impression that [Pleho Parties] were seeking millions in damages because Lacy violated two or three technical provisions of the Hawai'i Rules of Professional Conduct."

2. Lacy Parties' Arguments

Lacy Parties asserted (1) that the circuit court abused its discretion when it denied the motion in limine regarding evidence inconsistent with Pleho Parties' disclosures in their bankruptcy proceedings; and (2) that the circuit court erred in "admitting evidence at trial of a payment made by [Goran] to [GPLLC] when [Goran] did not disclose any such debt owed to him in the bankruptcy schedules." According to Lacy Parties, Goran and Maria claimed loans to GPLLC as damages in their civil lawsuit while failing to disclose any such loans in their bankruptcy proceedings. Lacy Parties argued that the circuit court should have applied judicial estoppel to prevent Pleho Parties from asserting these inconsistent positions, which gave them an unfair advantage and suggested that one court or the other was being misled.

3. The ICA Amended Memorandum Opinion

The ICA addressed the circuit court's grant of Lacy Parties' motion to dismiss, 7 motion for summary judgment, and motion for JMOL in an unpublished Amended Memorandum Opinion.

Regarding conspiracy to commit fraud, the ICA found that the trial court did not err in granting dismissal, noting, "[t]here is no evidence in the record that the Lacy Parties intentionally participated in the sales transaction with a view to the furtherance of the common design and purpose."

As to fraud and fraud in the inducement, the ICA noted that, although it was GPLLC that had purchased RLS, Goran and Maria made a down payment of $378,000 on behalf of GPLLC. Thus, the ICA found that "we cannot conclude that it appears beyond doubt that [Goran and Maria] can prove no set of facts in support of their claim that they were real parties in interest and suffered damages in conjunction with" the transfer of their Las Vegas properties. The ICA concluded that the circuit court erred in dismissing the fraud claims, but noted that Lacy Parties remained free to assert on remand that [Goran and Maria's] claims were barred by the jury verdict.

The ICA affirmed the circuit court's dismissal of Pleho Parties' IIED and NIED claims. First, the ICA noted its agreement with the circuit court's conclusion that a corporation such as GPLLC cannot suffer mental distress. Second, the ICA determined that, even accepting Goran and Maria's allegations as true, "we cannot conclude that reasonable people could construe Lacy's conduct as 'beyond all possible bounds of decency' ... as required by our case law" for IIED.

Regarding Pleho Parties' NIED claims, the ICA noted that "Pleho Parties do not cite to any Hawai'i case law supporting recovery for NIED based entirely on a commercial transaction, and we find none."

The ICA found that the court properly dismissed GPLLC's UDAP claim because HRS Chapter 480 does not create a cause of action for corporations.

Regarding Goran and Maria's legal malpractice claims, the ICA found that there was a genuine issue of material fact as to whether Lacy formed an attorney-client relationship with Goran and Maria. The ICA concluded that the circuit court erred when it dismissed Goran and Maria's legal malpractice claim against Lacy Parties. The ICA noted that its ruling "is without prejudice to the Lacy Parties asserting on remand that [Goran and Maria's] malpractice claims are barred by the jury's verdict."

The ICA then addressed the grant of Lacy Parties' motions for partial summary judgment on Pleho Parties' UDAP and punitive damages claims. The ICA concluded that HRS Chapter 480 did not apply to Lacy's conduct in his capacity as a practicing attorney, citing numerous cases from other jurisdictions for the proposition that regulation of attorneys "does not fall within the ambit of consumer protection laws." However, the ICA reinstated the punitive damages claims with respect to Goran and Maria's fraud and malpractice claims against Lacy Parties.

The ICA then addressed the grant of Lacy Parties' motion for JMOL on GPLLC's claims for fraud, fraud in the inducement, and punitive damages. The ICA agreed with Lacy Parties' contention that Pleho Parties "obtained a $1,250,000 business for $452,698 (including the $378,000 down payment ... and $74,698 that was otherwise paid, according to evidence entered at trial)." Noting that Pleho Parties "failed to cite any evidence at trial that is contrary" to this argument, the ICA concluded that the circuit court did not err in granting the motion for JMOL in favor of Lacy Parties on fraud, fraud in the inducement, and punitive damages.

The ICA affirmed the circuit court's award of attorney's fees and costs to Lacy Parties regarding GPLLC's legal malpractice claim. However, the ICA partially vacated the award to the extent that it held Goran and Maria jointly and severally liable, "as it is unclear whether the Lacy Parties will be determined the prevailing party against Goran and Maria, as well as GPLLC" on remand.

Finally, the ICA addressed Lacy Parties' cross-appeal, finding Goran and Maria's apparently inconsistent positions in their Nevada bankruptcy proceeding and the instant case established the elements required to invoke judicial estoppel. Accordingly, the ICA held the circuit court erroneously concluded that "the issue was a matter of credibility rather than admissibility, and did not reach the exercise of its discretion on whether to judicially estop [Pleho Parties] from asserting the factually incompatible position in this case." The ICA thus vacated the circuit court's ruling on the motion in limine and the admission of Exhibit 27-G(7) to allow the circuit court "to exercise its discretion" on Lacy Parties' request for judicial estoppel "in the first instance."

The ICA entered judgment on October 13, 2016.

III. STANDARDS OF REVIEW

A. Motion to Dismiss

A trial court's ruling on a motion to dismiss is reviewed de novo . The court must accept plaintiff's allegations as true and view them in the light most favorable to the plaintiff; dismissal is proper only if it appears beyond doubt that the plaintiff can prove no set of facts in support of his or her claim that would entitle him or her to relief. However ... a motion seeking dismissal of a complaint is transformed into a Hawai'i Rules of Civil Procedure (HRCP) Rule 56 motion for summary judgment when the circuit court considers matters outside the pleadings.

Wong v. Cayetano , 111 Hawai'i 462 , 476, 143 P.3d 1 , 15 (2006) (internal quotation marks and citations omitted).

B. Motion for Summary Judgment

The appellate court reviews "the circuit court's grant or denial of summary judgment de novo." Querubin v. Thronas , 107 Hawai'i 48 , 56, 109 P.3d 689 , 697 (2005) (citation omitted).

A grant of summary judgment is "appropriate where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Ross v. Stouffer Hotel Co. , 76 Hawai'i 454 , 457, 879 P.2d 1037 , 1040 (1994) (internal citation omitted). In other words, "summary judgment should not be granted unless the entire record shows a right to judgment with such clarity as to leave no room for controversy and establishes affirmatively that the adverse party cannot prevail under any circumstances." State v. Zimring , 52 Haw. 472 , 475, 479 P.2d 202 , 204 (1970) (internal citation omitted). "A fact is material if proof of that fact would have the effect of establishing or refuting one of the essential elements of a cause of action or defense asserted by the parties." Hulsman v. Hemmeter Dev. Corp. , 65 Haw. 58 , 61, 647 P.2d 713 , 716 (1982) (internal citations omitted).

Balthazar v. Verizon Hawaii, Inc. , 109 Hawai'i 69 , 72, 123 P.3d 194 , 197 (2005).

C. Motion for Judgment as a Matter of Law

"It is well settled that a trial court's rulings on [motions for judgment as a matter of law] are reviewed de novo. " Nelson v. University of Hawai'i , 97 Hawai'i 376 , 392, 38 P.3d 95 , 112 (2001) (internal citation omitted). When reviewing a motion for judgment as a matter of law, "the evidence and the inferences which may be fairly drawn therefrom must be considered in the light most favorable to the nonmoving party and [the] motion may be granted only where there can be but one reasonable conclusion as to the proper judgment." Id. (citing Carr v. Strode , 79 Hawai'i 475 , 486, 904 P.2d 489 , 500 (1995) ).

Kramer v. Ellett , 108 Hawai'i 426 , 430, 121 P.3d 406 , 410 (2005).

D. Motion in Limine

The granting or denying of a motion in limine is reviewed for abuse of discretion. The denial of a motion in limine, in itself, is not reversible error. The harm, if any, occurs when the evidence is improperly admitted at trial. Thus, even if the trial court abused its discretion in denying a party's motion, the real test is not in the disposition of the motion but the admission of evidence at trial.

State v. Eid , 126 Hawai'i 430 , 440, 272 P.3d 1197 , 1207 (2012) (quoting Miyamoto v. Lum , 104 Hawai'i 1 , 7, 84 P.3d 509 , 515 (2004) ).

IV. DISCUSSION

Pleho Parties' application presents the following questions:

A. Did the ICA commit grave error when it vacated orders dismissing claims by real parties in interest Goran and Maria for fraud and malpractice, which gutted this lawsuit, but affirmed dismissal of conspiracy, IIED, NIED and unfair and deceptive trade practices, and a judgment against [GPLLC] and $436,000 in fees and costs?

B. Did the ICA commit grave error when it affirmed mid-trial orders dismissing claims against Lacy by [GP LLC] for fraud and punitive damages, despite substantial and credible evidence supporting those claims requiring their submission to the jury?

C. Did the ICA commit grave error when it vacated the trial court's order denying a motion in limine to bar evidence of loans to [GPLLC] because of unrelated bankruptcy proceedings brought by Goran and Maria, when Lacy failed to renew his objection to the evidence at trial?

The ICA vacated and remanded the circuit court's dismissal of Goran and Maria's fraud and legal malpractice claims. 8 At issue in Pleho Parties' application are several claims that the ICA did not restore, the award of attorney's fees, and the vacatur of the circuit court's denial of the motion in limine.

A. Motion to Dismiss

1. Conspiracy to Commit Fraud

The circuit court relied on its grant of summary judgment in favor of Rnic when it dismissed the conspiracy count against Lacy Parties. The ICA thus reviewed the grant of Lacy Parties' motion to dismiss as a HRCP Rule 56 motion for summary judgment, as it appears that the circuit court looked beyond the pleadings and reviewed the "record and file of the case." However, if on a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted,

matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56 .

HRCP Rule 12(b) (emphasis added).

It does not appear that Pleho parties were given "reasonable opportunity to present all material made pertinent" by the conversion to a motion for summary judgment. It was thus improper for the circuit court to consider matters outside the pleadings in granting Lacy Parties' motion to dismiss as to the conspiracy count. Accordingly, the ICA erred in affirming the circuit court's grant of Lacy Parties' motion to dismiss the conspiracy count.

2. IIED

The elements of the tort of IIED are: 1) that the conduct allegedly causing the harm was intentional or reckless; 2) that the conduct was outrageous; and 3) that the conduct caused 4) extreme emotional distress to another. Hac v. Univ. of Hawaii , 102 Hawai'i 92 , 106-07, 73 P.3d 46 , 60-61 (2003). "The term 'outrageous' has been construed to mean without just cause or excuse and beyond all bounds of decency." Enoka v. AIG Hawai'i Ins. Co., Inc. , 109 Hawai'i 537 , 559, 128 P.3d 850 , 872 (2006) (citations and some internal quotation marks omitted). Additionally, "[t]he question whether the actions of the alleged tortfeasor are unreasonable or outrageous is for the court in the first instance, although where reasonable people may differ on that question it should be left to the jury." Young v. Allstate Ins. Co. , 119 Hawai'i 403 , 429, 198 P.3d 666 , 692 (2008) (citation omitted).

The ICA concluded that Lacy's behavior, as alleged by Pleho Parties, did not reach the threshold of outrageousness required for IIED. We respectfully disagree. There is "no clear definition of the prohibited outrageous conduct," and the correct inquiry is simply whether "an average member of the community" would exclaim, "Outrageous!" Id. at 425 , 198 P.3d at 688 (internal citations, brackets, and quotations marks omitted). Pleho Parties alleged that Lacy, their attorney, colluded with Rnic to defraud them of hundreds of thousands of dollars and three properties they owned in Nevada, causing Goran and Maria "severe emotional distress and serious physical injuries." Taking these allegations as true for the purposes of evaluating the motion to dismiss, we cannot say Goran and Maria have failed to state a claim for IIED. Accordingly, the ICA erred in affirming the circuit court's dismissal of Goran and Maria's IIED claim. 9

3. NIED

"[A]n NIED claim is nothing more than a negligence claim in which the alleged actual injury is wholly psychic and is analyzed utilizing ordinary negligence principles." 10 Doe Parents No. 1 v. State, Dep't of Educ. , 100 Hawai'i 34 , 69, 58 P.3d 545 , 580 (2002) (internal citation and quotation marks omitted). Although the injury is wholly psychic, Hawai'i courts have generally held that an NIED plaintiff "must establish some predicate injury either to property or to another person in order [sic] himself or herself to recover for negligently inflicted emotional distress." Id. (citing Rodrigues v. State , 52 Haw. 156 , 172, 472 P.2d 509 , 520 (1970) ; John & Jane Roes, 1-100 v. FHP, Inc. , 91 Hawai'i 470 , 473, 985 P.2d 661 , 664 (1999) ). This court has, however, recognized NIED claims even absent a distinct, non-psychological injury when "they involve circumstances which guarantee the genuineness and seriousness of the claim." Rodrigues v. State , 52 Haw. 156 , 171, 472 P.2d 509 , 519 (1970) ; see also Doe Parents , 100 Hawai'i at 70 , 58 P.3d at 581 (finding that when a teacher is reinstated into a position in close contact with children after accusations of child molestation, without serious inquiry into the accusations, and the teacher molests the children, it is "self evident" that the children's and parents' resulting psychological trauma guarantees the "genuineness and seriousness" of parents' NIED claim).

In 1986, the legislature modified our common law tort of NIED in HRS § 663-8.9 (1986 Supp.), which provides:

(a) No party shall be liable for the negligent infliction of serious emotional distress or disturbance if the distress or disturbance arises solely out of damage to property or material objects.

(b) This section shall not apply if the serious emotional distress or disturbance results in physical injury to or mental illness of the person who experiences the emotional distress or disturbance.

Thus, a viable NIED claim for damage to property or material objects must allege: (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) the defendant breached the duty; (3) a reasonably close causal connection between the defendant's breach and the plaintiff's resulting injury; and (4) serious emotional distress or disturbance resulting in physical injury to or mental illness of the plaintiff, or circumstances guaranteeing the genuineness and seriousness of the claim. 11 See Doe Parents , 100 Hawai'i at 68-88 , 58 P.3d, 579 -99 (plaintiffs stated a valid NIED claim for psychic injuries in the absence of physical injury or mental illness by establishing: duty of care, breach of duty, legal causation, and circumstances guaranteeing the genuineness and seriousness of the mental distress alleged). By this standard, Pleho Parties stated a claim for NIED upon which relief can be granted.

Pleho Parties alleged Lacy formed a "special relationship" with Goran and Maria "for which the law imposes a duty of care" when he undertook to represent Pleho Parties in the purchase of RLS. Pleho Parties further alleged Lacy breached this duty and "[a]s a direct and proximate result," Goran and Maria "have suffered and continue to suffer from severe emotional distress and serious physical injuries and they have incurred and continue to incur reasonable and necessary medical and rehabilitative expenses for medical treatment" as a result of Lacy Parties' conduct. Goran and Maria thus sufficiently stated an NIED claim by alleging, in addition to their claims of emotional distress, that they suffered serious physical injuries and needed medical treatment for those injuries. Accordingly, the ICA erred in affirming the circuit court's dismissal of Goran and Maria's NIED claim.

B. Judgment as a Matter of Law on Fraud, Fraud in the Inducement, and Punitive Damages

The circuit court granted JMOL against GPLLC on its fraud, fraud in the inducement, and punitive damages 12 claims, determining that no reasonable jury would be able to find by clear and convincing evidence that Lacy "committed fraud or fraud in the inducement as well as awarding punitive damages." We respectfully disagree. The circuit court was required to view the evidence and inferences therefrom in the light most favorable to the non-moving party, i.e., GPLLC, and grant the motion only if "there can be but one reasonable conclusion as to the proper judgment." Kramer , 108 Hawai'i at 430 , 121 P.3d at 410 .

"The elements of fraud are: (1) false representations made by the defendant; (2) with knowledge of their falsity (or without knowledge of their truth or falsity); (3) in contemplation of plaintiff's reliance upon them; and (4) plaintiff's detrimental reliance." 13 Miyashiro , 122 Hawai'i at 482-83, 228 P.3d at 362-63.

There was evidence at trial indicating that Lacy drafted the documents for GPLLC's purchase of RLS for $1.5 million, yet he did not disclose the fact that he had represented a prior prospective buyer, who had been poised to acquire the business for only $800,000. Further, Goran testified that Lacy repeated Rnic's claims about RLS's value, i.e., "[t]his is a unique company, only one of this kind. There's nobody to appraise this company. It's worth $2 million, and $1.5 is just a great price." Where there is a duty to exercise reasonable care to disclose a matter in question, failure to disclose the matter is considered a false representation for purposes of the fraud analysis. Santiago v. Tanaka , 137 Hawai'i 137 , 149, 366 P.3d 612 , 624 (2016). Here, Lacy had such a duty stemming from his fiduciary role as Pleho Parties' attorney. Viewing such evidence in the light most favorable to GPLLC, we conclude that a reasonable jury could have found in favor of GPLLC on the fraud and punitive damages claims.

The ICA affirmed the circuit court's grant of JMOL with a different rationale, adopting Lacy Parties' argument that Pleho Parties could not show damages because the actual value of RLS was $1,250,000 even according to Pleho Parties' own expert. The ICA based its conclusion on the following exchange between Pleho Parties' expert accountant Hunsaker and Lacy Parties' counsel:

[Lacy Parties' counsel]: Isn't the definition of equity the owner's interest in property after deduction of all liabilities?

Hunsaker: Correct.

Hunsaker had previously testified that a "market analysis and conclusion of value of a 100 percent equity interest" in RLS at the time of sale was $128,000. The ICA thus attributed to Hunsaker the conclusion that that the "actual value" of RLS, i.e., "the owner's interest in the property," was the $128,000 "equity interest" plus the $1,122,000 promissory note to Rnic, for a total of $1,250,000.

Pleho Parties argue that the ICA's characterization of Hunsaker's testimony represents a "tortured interpretation of counsel's 'gotcha' question." We agree. "Equity" is an accounting term of art with a specific meaning, i.e., the "owner's interest in property after deduction of all liabilities." Based on his answer to a question about this technical definition, the ICA incorrectly imputed to Hunsaker the conclusion that the "actual value" of RLS was $1,250,000.

GPLLC's $1,122,000 debt to Rnic is a liability properly attributed to GPLLC, not to RLS. Thus, the ICA erred in considering this amount when calculating the actual value of RLS. Moreover, since the crux of Pleho Parties' claim alleges Lacy fraudulently induced them to purchase RLS for far more than its true value, it would be improper to hold that, as a matter of law, a promissory note allegedly procured by fraud should be used as a measure of RLS's value. The true value of RLS thus remains a question properly left to the trier of fact.

To conclude, the circuit court erred in granting JMOL in favor of Lacy Parties on GPLLC's fraud, fraud in the inducement, and punitive damages claims.

C. Attorney's Fees and Costs

The ICA upheld the circuit court's award of $407,013.69 in attorney's fees and $29,191.96 in costs to Lacy Parties, pursuant to HRS § 607-14 (Supp. 1997), 14 but vacated it "to the extent that it held Goran and Maria jointly and severally liable, as it is unclear whether the Lacy Parties will be determined the prevailing party against Goran and Maria, as well as GPLLC, after further proceedings on their remaining claims." Because we vacate the grant of JMOL against GPLLC on its claims for fraud and punitive damages, we also vacate the award of attorney's fees to Lacy Parties, as it is unclear whether GPLLC will remain the "losing party" after the adjudication of these claims.

D. Judicial Estoppel

The circuit court denied Lacy Parties' motion in limine requesting that Pleho Parties be barred from introducing evidence inconsistent with their disclosures in Goran and Maria Pleho's bankruptcy proceeding in Nevada. The ICA vacated the circuit court's ruling and the subsequent admission of Exhibit 27-G(7), finding that the Lacy Parties had demonstrated the elements 15 of judicial estoppel. The ICA explained that the purpose of vacatur was "to allow the Circuit Court, in the first instance, to exercise its discretion on the Lacy Parties' request for judicial estoppel."

Although the ICA correctly states the elements of judicial estoppel, its conclusion that the circuit court failed to exercise its discretion is not supported by the record.

As noted by the United States Supreme Court, "judicial estoppel is an equitable doctrine invoked by a court at its discretion," intended to "prevent the improper use of judicial machinery." New Hampshire v. Maine , 532 U.S. 742 , 750, 121 S.Ct. 1808 , 149 L.Ed.2d 968 (2001) (internal citations and quotation marks omitted). The circuit court's oral denial of the motion in limine states, in full:

So on the motion in limine Number 2, to bar plaintiff from pursuing claims for or introducing any evidence regarding any alleged loan, debt, note, payment, advance, contract or other asset not specifically disclosed in Goran Pleho and [Maria] Pleho's Nevada bankruptcy, the motion is denied. Certainly it goes to credibility versus admissibility.

Although terse, this statement shows that the court considered the arguments presented in Lacy Parties' motion in limine and Pleho Parties' response to that motion, both of which focused on the issue of judicial estoppel. Accordingly, the circuit court's denial of the motion in limine should be interpreted as a discretionary determination that judicial estoppel was not appropriate in this instance.

As the circuit court properly exercised its discretion, we vacate the ICA's judgment to the extent that it vacates the circuit court's denial of the motion in limine, and we affirm this ruling of the circuit court.

V. CONCLUSION

For the foregoing reasons, we vacate the circuit court's dismissal of Pleho Parties' IIED and NIED claims, its grant of JMOL in favor of Lacy Parties on GPLLC's fraud and punitive damages claims, and its award of attorney's fees and costs, and we vacate the ICA's October 13, 2016 judgment to the extent that it affirms these rulings of the circuit court. We also vacate the ICA's judgment to the extent that it vacates the circuit court's ruling on the motion in limine.

A majority of this court also vacates the ICA's judgment to the extent that it affirms the circuit court's grant of summary judgment in favor of Lacy Parties on Goran and Maria's UDAP claim.

In all other respects, the ICA's judgment is affirmed. The case is remanded to the circuit court for proceedings consistent with this opinion.

OPINION OF THE COURT BY POLLACK, J.

We are called upon to determine whether Hawai'i's unfair or deceptive acts or practices statute, which on its face applies to the conduct of any trade or commerce, nevertheless excludes from its reach a lawyer who actively facilitated the sale of one company to another because of the lawyer's status as a legal professional. Our caselaw indicates that this conduct is in fact the type of participation in a business transaction that the law was intended to address, and the lawyer's conduct cannot be shielded from liability merely because it amounted to or was comingled with legal services. Further, the statute itself directs this court when construing the law to consider the interpretation of analogous federal statutes by federal courts and agencies. This guidance from federal decisions is consistent with the plain language and legislative history of the statute, and any concern that applying the statute in this context would invade this court's inherent authority to regulate the legal profession is unfounded. We accordingly conclude that the alleged conduct in this case, which may or may not have involved the actual practice of law, properly states a claim for relief under our unfair or deceptive acts or practices statute.

I. Background and Procedural History

In 2005, David W. Lacy, Esq., of the firm Lacy & Jackson LLLC, represented Goran and Ana Maria Pleho (the Plehos) and their company, Goran Pleho LLC (GPLLC) (collectively, the Pleho Parties), in a transaction to purchase Dragan Rnic's company, Resorts Limousine Services (RLS). Several months later, the Pleho parties initiated the present action in the Circuit Court of the Third Circuit (circuit court) alleging a number of claims against Rnic, Lacy, and Lacy & Jackson LLLC in connection with the transaction.

In a second amended complaint, the Pleho parties alleged that Lacy and Lacy & Jackson LLLC (collectively, the Lacy parties) did not fully disclose the extent of their contemporaneous attorney-client relationship with Rnic at the time of the sale. The complaint alleged that, although Lacy was aware Rnic had previously agreed to sell RLS to a third party for only $800,000, Lacy had advised the Pleho parties to purchase the company for $1,500,000. The Pleho parties further claimed that Lacy had falsely informed them that an independent appraisal of RLS was not possible because of the company's unique nature and that the agreed-upon purchase price was well below RLS's true fair market value of $2,000,000. The complaint stated that, after the Plehos entered into the purchase agreement as Lacy had advised, they learned that Rnic had misrepresented various factors related to the value of the company. The Pleho parties then obtained an independent appraisal, the complaint continued, which concluded RLS's fair market value at the time of the sale was only $128,000.

The Pleho parties alleged that the Lacy parties' conduct in connection with the transaction constituted, inter alia , "unfair and deceptive trade practices" in violation of Hawaii Revised Statutes (HRS) Chapters 480 and 481A. 1 Before trial, the Lacy parties moved for partial summary judgment on the Plehos' HRS Chapters 480 claims, arguing that the conduct alleged in the complaint amounted to the "actual practice of law," which was beyond the scope of the consumer protection statutes. 2 The circuit court granted the motion without written explanation. 3 After trial, the parties filed cross-appeals to the Intermediate Court of Appeals (ICA) from the circuit court's final judgment.

Among other issues raised on appeal to the ICA, the Pleho parties challenged the circuit court's grant of partial summary judgment on their HRS Chapters 480 claims in favor of the Lacy parties. The Pleho parties argued that a lawyer who deceives a client about the value of a company the client wishes to purchase commits both malpractice and deceptive trade practices.

In an amended memorandum opinion, the ICA stated that the Plehos' argument on appeal raised for the first time the allegation that "Lacy engaged in unfair or deceptive trade practices within the context of the practice of law" as opposed to "within the context of his role in the commercial purchase and sale of the business." 4 The ICA stated that it therefore need not address the issue. Nevertheless, the ICA proceeded to reject the Pleho parties' argument that HRS Chapter 480 applied to Lacy's conduct in his capacity as a practicing attorney, citing case law from other jurisdictions supporting the proposition that the regulation of attorneys does not fall within the parameters of consumer protection laws. 5

The Pleho parties assert on certiorari, inter alia , that nothing new was added to their HRS Chapter 480 claim on appeal, that the ICA did not cite Hawai'i case law, and that the cases the ICA did cite do not support barring their claims under HRS Chapter 480 merely because Lacy was their lawyer. Thus, the Pleho parties argue that the ICA should have reinstated their HRS Chapter 480 claims.

II. Standard of Review

"The interpretation of a statute is a question of law which this court reviews de novo ." Sierra Club v. Dep't of Transp. of Hawai'i , 120 Hawai'i 181 , 197, 202 P.3d 1226 , 1242 (2009) (quoting Liberty Mut. Fire Ins. Co. v. Dennison , 108 Hawai'i 380 , 384, 120 P.3d 1115 , 1119 (2005) ).

III. Discussion

A. Lacy's Alleged Conduct Occurred in the "Business Context"

Hawai'i's unfair or deceptive acts or practices statute, HRS § 480-2(a) (2008), 6 prohibits the utilization of "unfair or deceptive acts or practices in the conduct of any trade or commerce." The Lacy parties contend that the conduct that the Plehos 7 allege Lacy engaged in did not occur within "trade or commerce" and that it thus falls outside the scope of the prohibition.

This court articulated the standard for identifying conduct in "trade or commerce" within the meaning of HRS § 480-2(a) in the seminal case of Cieri v. Leticia Query Realty, Inc. , 80 Hawai'i 54 , 65, 905 P.2d 29 , 40 (1995). In Cieri , two property owners utilized the services of their former property manager, who was also a licensed real estate broker, to sell a residence the owners had previously rented out to third-party tenants. Id. at 56-57 , 905 P.2d at 31-32 . Although the property manager had been responsible for maintenance of the property and was thus aware that the outgoing tenants had experienced frequent leaks, flooding, and issues related to plumbing, she indicated in a seller disclosure statement that there had never been any leaks repaired or problems with the plumbing at the residence. Id. at 57 , 905 P.2d at 32 . Upon discovering the falsehood, the buyers brought suit against the property manager, alleging inter alia that she had committed an unfair and deceptive trade practice in violation of HRS § 480-2(a). Id. at 57-58 , 905 P.2d at 32-33 . At trial, a jury found that the property manager had indeed violated the statute and awarded damages. On appeal, the property manager challenged the plaintiff's status as consumers entitled to bring suit under the law. Id. at 58-59 , 905 P.2d at 33-34 .

Prior to reaching the merits of the argument, this court took the "opportunity to discuss the scope of the applicability of HRS § 480-2, which proscribes 'unfair or deceptive acts or practices in the conduct of any trade or commerce ,' as it pertains to the transaction and the defendants at issue in this case." Id. at 59 , 905 P.2d at 34 (parenthetical omitted). We traced the development of the statute, noting that the law was modeled after section 5 of the Federal Trade Commission Act, and concluded that "the paramount purpose of both statutes" has always been "to prevent deceptive practices by businesses that are injurious to other businesses and consumers." Id. at 61 , 905 P.2d at 36 (quoting Beerman v. Toro Mfg. Corp. , 1 Haw. App. 111 , 118, 615 P.2d 749 , 754 (1980) ).

This court observed that Massachusetts courts interpreting their consumer protection statute had distinguished between purely private transactions and transactions between a consumer and a professional or business organization engaging in the commercial field in which the party specializes. Id. at 63-65, 905 P.2d at 38-40 (citing Lantner v. Carson , 374 Mass. 606 , 373 N.E.2d 973 (1978) ; Begelfer v. Najarian , 381 Mass. 177 , 409 N.E.2d 167 (1980) ; Lynn v. Nashawaty , 12 Mass.App.Ct. 310 , 423 N.E.2d 1052 (1981) ; Nei v. Burley , 388 Mass. 307 , 446 N.E.2d 674 (1983) ). We reasoned that the Massachusetts consumer protection statute shared "a common genesis in the federal antitrust statutes" with our own and was thus motivated by a similar impetus. Id. at 63, 905 P.2d at 38 . This court therefore adopted the Massachusetts courts' test for identifying conduct in "trade or commerce," holding that the key inquiry in determining whether a particular claim falls within the scope of HRS Chapter 480 is whether the conduct at issue occurs within what Massachusetts courts call the "business context." Id. at 65 , 905 P.2d at 40 . We stated that this generally "must be determined on a case-by-case basis by an analysis of the transaction." 8 Id. When addressing the specific facts of the case, however, the Cieri court determined that it was unnecessary to examine the details of the property manager's conduct because a "broker's or salesperson's role in facilitating every real estate transaction in which he or she participates necessarily involves 'conduct in any trade or commerce,' namely, the systematic sale or brokering of interests in real property." Id. We therefore held that the property manager's conduct in relation to the transaction in which she had actively participated was subject to the requirements of HRS Chapter 480. Id.

As in Cieri , the Plehos and Rnic allegedly retained Lacy specifically to utilize the specialized skills with which he makes his living--that is, to facilitate a commercial transaction of a type with which he purported to have professional expertise. Lacy is alleged to have actively and directly participated in the transaction, offering what was ostensibly his professional appraisal of the value of RLS as well as his opinion as to the profitability of the exchange in order to induce the Pleho parties to consummate the deal. Cf. Begelfer , 409 N.E.2d at 176 (holding private investor's loan was not made in the business context where "the record indicate[d] that the defendants' participation in the real estate transaction underlying the loan was minimal," "[t]he defendants had no voice in negotiating the terms of the loan," "[t]he payments were made to an agent and not directly to" the defendants, and the defendants "were solicited by other investors to participate in the loan, and were not active in the management of the loan"). And as in Cieri , Lacy is alleged to have made intentional misrepresentations in order to induce the buyer to complete the exchange.

In Cieri , we held "as a matter of law that a broker or salesperson actively involved in a real estate transaction invariably engages in 'conduct in any trade or commerce,' " making it "unnecessary to engage in a case-by-case analysis" to determine whether the transaction occurred in the business context. 80 Hawai'i at 65 , 905 P.2d at 40 . That the defendant in this case allegedly facilitated the sale of a business interest rather than an interest in real property is a distinction without a difference. Lacy is alleged to have engaged in actions during the sale of RLS analogous to those of the property manager in Cieri . Accordingly, Lacy's alleged conduct "necessarily" qualifies as conduct in "trade or commerce" within the meaning of HRS § 480-2(a), and it is therefore subject to the constraints of HRS Chapter 480. Id.

B. No Exception to HRS Chapter 480 for the Practice of Law Applies in this Case

Rather than disputing that Lacy's alleged conduct occurred in the "business context," the Lacy parties appear to argue that the practice of law is never conduct in "trade or commerce" within the meaning of HRS § 480-2(a) and is thus categorically exempt from its operation. As an initial matter, the Plehos dispute that the unfair or deceptive act or practice they allege Lacy committed involves the practice of law because their claim is based on Lacy's participation in the allegedly fraudulent sale and not any deficient legal advice he provided. Indeed, there is little dispute that, had Lacy simply been a consultant or a similar business professional, many of the services he provided would clearly amount to conduct in trade or commerce under our precedent. See Cieri v. Leticia Query Realty, Inc. , 80 Hawai'i 54 , 65, 905 P.2d 29 , 40 (1995).

We ultimately need not decide whether Lacy's conduct amounted to the practice of law, however, because we hold that when a defendant engages in the sort of actions we have held "necessarily involve 'conduct in any trade or commerce' " within the meaning of HRS § 480-2(a), it is no defense that those actions constituted or were intermingled with legal services. 9 Such a reading is supported by the federal precedents the statute specifically instructs us to consider in interpreting the law, as well as our own precedents and the statute's language and legislative history. Further, any concerns that HRS § 480-2(a) 's application to the practice of law in this context would impinge upon this court's authority to regulate the legal profession are unjustified. Accordingly, we hold that the circuit court erred in granting partial summary judgment against the Plehos on their unfair or deceptive acts or practices claim.

1. Both the Federal Precedent that We Must Consider and Our Own Caselaw Indicate that Unfair or Deceptive Acts or Practices Liability Applies to Aspects of the Practice of Law.

Our legislature provided significant guidance as to whether HRS § 480-2(a) was intended to encompass aspects of the practice of law by specifically stating twice in the relevant statutory text that courts should consider federal interpretations of analogous statutes when applying the law. HRS § 480-2(b) states that, in interpreting the HRS § 480-2 prohibition on unfair competition and unfair or deceptive acts and practices, " the courts ... shall give due consideration to the rules, regulations, and decisions of the Federal Trade Commission and the federal courts interpreting section 5(a)(1) of the Federal Trade Commission Act ( 15 U.S.C. [§] 45(a)(1) ^[ 10 ^] ), as from time to time amended." (Emphases added.) Additionally, HRS § 480-3 (2016) provides that HRS Chapter 480 "shall be construed in accordance with judicial interpretations of similar federal antitrust statutes." 11

Federal courts have long interpreted section 5(a)(1) of the Federal Trade Commission Act (FTCA) and analogous antitrust statutes to apply to the practice of law. The Supreme Court of the United States considered whether the Sherman Anti-Trust Act (Sherman Act) applied to the practice of law in the seminal case of Goldfarb v. Virginia State Bar , 421 U.S. 773 , 95 S.Ct. 2004 , 44 L.Ed.2d 572 (1975). In Goldfarb , clients seeking legal services argued that a minimum fee schedule released by a county bar association and endorsed by the state bar association violated section 1 of Sherman Act, 15 U.S.C. § 1 , as an agreement in restraint of trade or commerce. Id. at 776 , 95 S.Ct. 2004 . The bar associations contended that, because the practice of law is a "learned profession" that provided necessary services to the community, it did not fall within the intended meaning of "trade or commerce" under the Sherman Act. Id. at 786 , 95 S.Ct. 2004 . The Supreme Court disagreed, holding that neither the learned nature of the profession nor the community service aspects of the practice of law were determinative. Id. at 787 , 95 S.Ct. 2004 .

The Court reasoned that--much like the language of HRS § 480-2(a) --the Sherman Act's reference to "trade or commerce" was broad by design and meant to sweep in virtually all commercial activity. Id. ; see also State by Bronster v. U.S. Steel Corp. , 82 Hawai'i 32 , 51, 919 P.2d 294 , 313 (1996) (" HRS § 480-2, as its federal counterpart in the FTC Act, was constructed in broad language in order to constitute a flexible tool to stop and prevent fraudulent, unfair or deceptive business practices for the protection of both consumers and honest business[persons]." (quoting E. Star, Inc. v. Union Bldg. Materials Corp. , 6 Haw. App. 125 , 132, 712 P.2d 1148 , 1154 (1985) ) (alteration in original)). The United States Supreme Court held that attorneys fell within the plain meaning of "trade or commerce" and declined to find an implicit exception for their practice that was not articulated in the statute. Goldfarb , 421 U.S. at 787-88 , 95 S.Ct. 2004 . "It is no disparagement of the practice of law as a profession to acknowledge that it has this business aspect," the Court opined before concluding that "[i]n the modern world it cannot be denied that the activities of lawyers play an important part in commercial intercourse." Id. at 788 , 95 S.Ct. 2004 ; see also Bates v. State Bar of Arizona , 433 U.S. 350 , 371-72, 97 S.Ct. 2691 , 53 L.Ed.2d 810 (1977) (stating that "the belief that lawyers are somehow above 'trade' has become an anachronism" because "[i]n this day, we do not belittle the person who earns his living by the strength of his arm or the force of his mind"). Subsequent cases clarified that, by violating section 1 of the Sherman Act, lawyers who engage in anticompetitive practices also violate the prohibition against unfair methods of competition in section 5(a)(1) of the FTCA. F.T.C. v. Superior Court Trial Lawyers Ass'n , 493 U.S. 411 , 422, 110 S.Ct. 768 , 107 L.Ed.2d 851 (1990).

The dissent attempts to distinguish the clear precedents applying section 5(a)(1) of the FTCA to aspects of the practice of law, arguing that the cases in which federal courts have considered the regulation of the legal profession primarily concern unfair methods of competition, not unfair or deceptive acts or practices like those alleged in the present case. Dissent at 144 Hawai'i at 253-55, 439 P.3d at 205-07. But the dissent fails to give due consideration to a number of federal decisions that have stated both directly and by implication that various activities classified as "the practice of law" violate section 5(a)(1) of the FTCA as unfair or deceptive practices. See, e.g. , F.T.C. v. Lanier Law, LLC , 194 F.Supp.3d 1238 , 1273-85 (M.D. Fla. 2016) (finding that, notwithstanding their characterization as the practice of law, a law firm and its lawyers' practices directly violated section 5(a)(1) of the FTCA as unfair or deceptive acts or practices and violated administrative rules for which a failure to comply "constitutes an unfair or deceptive act or practice in violation of § 5(a) of the FTC Act"); F.T.C. v. Lucas , 483 Fed.Appx. 378 (9th Cir. 2012) (holding that a lawyer's conduct was an unfair or deceptive practice in violation of section 5(a)(1) of the FTCA); C.F.P.B. v. Frederick J. Hanna & Assocs., P.C. , 114 F.Supp.3d 1342 , 1369-70 (N.D. Ga. 2015) (finding that a law firm committed an "unfair, deceptive, or abusive act or practice" in violation of the Consumer Financial Protection Act, 12 U.S.C. § 5536 (a)(1)(B), the standard for which "is the same as the standard under § 5(a) of Federal Trade Commission Act."). 12

Even if this were not the case, however, the dissent offers no meaningful analysis as to why we should distinguish between the unfair methods of competition portion and the unfair or deceptive acts or practices portion of FTCA section 5(a)(1) with respect to what constitutes commercial activity within the scope of the provision. FTCA section 5(a)(1) prohibits both "[u]nfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce." The dissent's position would require us to conclude that federal courts ascribe two different meanings to the phrase "in or affecting commerce" when it occurs twice in the same sentence, with only one of those instances encompassing aspects of the practice of law. 13

The flaw in this reasoning is even more apparent when we consider our own statute. Unlike FTCA section 5(a)(1), HRS § 480-2(a) does not repeat the phrase qualifying the activities to which it applies; the provision prohibits "[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce ." HRS § 480-2(a) (emphasis added). The dissent's interpretation essentially amounts to a claim that the Hawai'i legislature intended the phrase "in the conduct of any trade or commerce" to have two different meanings depending on whether it is applied to the first or second subject of the sentence in which it occurs, with only one of those meanings encompassing the practice of law.

Consistent with federal decisions applying FTCA section 5(a)(1) to the conduct of attorneys are a state and federal case that have considered HRS § 480-2 with regard to the practice of law. In Hungate v. Law Office of David B. Rosen , the plaintiff brought suit under HRS § 480-2 against the counsel for his mortgage holder, arguing that the attorney had engaged in an unfair or deceptive trade act or practice by conducting a wrongful foreclosure on behalf of the mortgage holder. 139 Hawai'i 394 , 400, 391 P.3d 1 , 7 (2017).

While we distinguished the role that the attorney had played in the "the instant foreclosure action" from the broker role that the property manager had played in Cieri , we did not hold that the practice of law was categorically exempt from HRS § 480-2 liability . Id. at 413 , 391 P.3d at 20 . We specifically examined the adversarial nature of the proceeding and declined to find the attorney liable "under the circumstances" of that case because subjecting opposing counsel to HRS § 480-2 liability could have a chilling effect on an attorney's ability to zealously advocate for one's own client by imposing a competing duty to party opponents. We explicitly stated, however, that our solicitude would "not encompass, for example, allowing attorneys to conduct patently illegal activities on behalf of clients." Id. at 413 n.22, 391 P.3d at 20 n.22. And we reserved judgment as to whether a then-recent amendment to the Hawai'i foreclosure statute, which made a duly authorized agent of a wrongfully foreclosing mortgagee liable under HRS § 480-2(a) in certain circumstances, could be applied to an attorney. Id. at 413 n.23, 391 P.3d at 20 n.23. This court thus indicated that HRS § 480-2(a) could indeed be applied to the practice of law, albeit under a higher standard than in other trades in some instances.

The dissent now attempts to revise the plain meaning of our statement in Hungate that our holding would not reach a lawyer's "patently illegal activities," arguing that it was merely an acknowledgment that lawyers may be subject to professional discipline and civil and criminal liability from sources other than HRS § 480-2(a). Dissent at 144 Hawai'i at 263-64, 439 P.3d at 215-16. But to construe this pronouncement as only an affirmation that the practice of law is not immune from all other civil and criminal regulation is to reduce our words to a maxim obvious beyond any need for comment. See Buscher v. Boning , 114 Hawai'i 202 , 220 n.13, 159 P.3d 814 , 832 n.13 (2007) ("The rule of law that an attorney representing a client may be held personally liable to an adverse party or a third person who sustains injury as a result of an attorney's intentional tortious acts is well settled." (quoting Giuliani v. Chuck , 1 Haw. App. 379 , 383-84, 620 P.2d 733 , 736-37 (1980) )). No party in Hungate questioned the application of other statutory and common law claims to the legal profession. Rather, this court indicated that we were addressing the extent of "[o]ur desire to avoid creating unacceptable conflicts of interest in this context "--that is, in the application of HRS § 480-2 to attorney conduct, as was at issue in the case. Hungate , 139 Hawai'i at 413 n.22, 391 P.3d at 20 n.22 (emphasis added). The dissent's interpretation would thus appear to amount to a sub silentio overruling of the standard this court articulated in Hungate. 14

Hungate concerned an unfair or deceptive acts or practices claim against an opposing counsel rather than a party's own attorney. That the present case involves a suit against a party's own attorney presents an even stronger argument that HRS § 480-2 should be applicable because counsel's duties to act fairly and without deception and to zealously advocate in favor of a client are in alignment rather than in contention. 15 It would follow that Hungate 's heightened standard of HRS § 480-2(a) liability would not apply.

Additionally, at least one federal court interpreting Hawai'i law has suggested that HRS § 480-2(a) can be applied to the conduct of attorneys. In McDevitt v. Guenther , the U.S. District Court for the District of Hawai'i implicitly acknowledged that HRS § 480-2(a) can be applied to the practice of law by ruling that a plaintiff's claim against an attorney was barred by the statute of limitations--and not any failure to state a claim upon which relief could be granted. 522 F.Supp.2d 1272 , 1289 (D. Haw. 2007).

In short, a range of relevant federal precedents exist applying analogous federal statutes to the practice of law, which HRS § 480-2 explicitly states must guide our interpretation of its provisions. 16 Further, our own caselaw indicates that HRS § 480-2 can be applied to aspects of the practice of law. Such a result is unsurprising given the plain language and legislative history of the statute.

2. The Plain Text and Legislative History of HRS Chapter 480 Make Clear It Was Intended to Encompass Aspects of the Practice of Law When the Conduct Occurs Within Trade or Commerce.

As stated, HRS § 480-2 provides that, "Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are unlawful." The statute expressly encompasses acts or practices in "the conduct of any trade or commerce," which by its plain meaning places within its ambit virtually all activity occurring in the business context. HRS § 480-2(a) (emphasis added); Bronster , 82 Hawai'i at 51 , 919 P.2d at 313 (stating that the legislature "constructed [ HRS § 480-2 ] in broad language in order to constitute a flexible tool to stop and prevent fraudulent, unfair or deceptive business practices for the protection of both consumers and honest business[persons]." (quoting E. Star , 6 Haw. App. at 132 , 712 P.2d at 1154 ) (alteration in original)); cf. Kalaeloa Ventures, LLC v. City & Cty. of Honolulu , 143 Hawai'i 103 , 108, 424 P.3d 458 , 463 (2018) ( HRS §§ 1-29 and 1-32 by their plain language of "any act" encompass all possible acts appointed by law to be done on a particular day); Allstate Ins. Co. v. Pruett , 118 Hawai'i 174 , 181, 186 P.3d 609 , 616 (2008) ("[B]y itself, the term 'any person,' 'encompass[es] every possible individual ....' " (second alteration in original) (citation omitted)). Regardless of whether it is characterized as the practice of law, facilitating the sale of one business to another falls within the plain meaning of conducting trade or commerce under even the strictest application of the terms. 17

Notwithstanding HRS § 480-2(a) 's unequivocal language, the dissent concludes that "the plain language ... of HRS § 480-2 reveal[s] no indication" that the legislature intended the statute to apply to attorney conduct. Dissent at 144 Hawai'i at 262, 439 P.3d at 214. The dissent goes on to argue that the legislative history of HRS § 480-2 also does not support extending it to the practice of law because the legislature has had ample opportunity to amend the law to explicitly include lawyers and has not done so. Dissent at 144 Hawai'i at 262 n.18, 439 P.3d at 214 n.18.

But this is the opposite of the analysis called for by standard principles of statutory construction. The law also does not expressly state that it applies to carpenters, bakers, travel agents, or shoe salespersons--notwithstanding the ample opportunity the legislature has had to add explicit mention of each. Yet, like lawyers, these professions are covered by HRS § 480-2 because they fall within the plain meaning of "any trade or commerce." "[W]here the statutory language is plain and unambiguous, our sole duty is to give effect to its plain and obvious meaning." State v. Wheeler , 121 Hawai'i 383 , 390, 219 P.3d 1170 , 1177 (2009) (quoting Citizens Against Reckless Dev. v. Zoning Bd. of Appeals of City & Cty. of Honolulu , 114 Hawai'i 184 , 193, 159 P.3d 143 , 152 (2007) ). "[W]e are not at liberty to look beyond that language for a different meaning." Alvarez v. Liberty House, Inc. , 85 Hawai'i 275 , 278, 942 P.2d 539 , 542 (1997) (quoting Ross v. Stouffer Hotel Co. (Hawai'i) Ltd. , 76 Hawai'i 454 , 461, 879 P.2d 1037 , 1044-45 (1994) ).

Further, that it was the legislature's intention that HRS Chapter 480 apply to lawyers is evidenced by the legislature's failure to explicitly exclude attorneys, as it has done with labor organizations, HRS § 480-10 ; fishery, agricultural, or consumer cooperative organizations, HRS § 480-11(a) ; and social service providers, HRS § 480-11(d). The dissent would have us infer a similar exception for attorneys from the legislature's inaction. Dissent at 144 Hawai'i at 262 n.18, 439 P.3d at 214 n.18. But legislative inaction is a notoriously poor barometer of legislative intent--even when we can assume the legislature is aware a statute is being misinterpreted. See Zuber v. Allen , 396 U.S. 168 , 185 n.21, 90 S.Ct. 314 , 24 L.Ed.2d 345 (1969) (stating that, legislative inaction cannot be used to justify an agency's invalid statutory interpretation because it may reflect "unawareness, preoccupation, or paralysis" rather than intention). The flaw in this approach is even more pronounced here, when the legislature had no reason to believe Hawai'i courts would not interpret HRS § 480-2(a) to encompass lawyers in accordance with the plain text of the statute. In other words, the dissent would have us conclude that the legislature assumed courts would infer an implicit exception to HRS Chapter 480 that does not appear in the statute, and that the legislature ratified this interpretation in advance by not acting to correct such a ruling before it occurred.

But it is well settled that the principle of expressio unius est exclusio alterius "applies equally to a statutory list of exceptions." Adams v. CDM Media USA, Inc. , 135 Hawai'i 1 , 18-19, 346 P.3d 70 , 87-88 (2015). "The 'proper inference' from a list of exceptions to a statute is that the legislature 'considered the issue of exceptions and, in the end, limited the statute to the ones set forth.' " Id. (quoting United States v. Johnson , 529 U.S. 53 , 58, 120 S.Ct. 1114 , 146 L.Ed.2d 39 (2000) ); see also Goldfarb v. Virginia State Bar , 421 U.S. 773 , 787, 95 S.Ct. 2004 , 44 L.Ed.2d 572 (1975) ("[O]ur cases have repeatedly established that there is a heavy presumption against implicit exemptions." (citing United States v. Phila. Nat'l Bank , 374 U.S. 321 , 350-351, 83 S.Ct. 1715 , 10 L.Ed.2d 915 (1963) ; California v. Fed. Power Comm'n , 369 U.S. 482 , 485, 82 S.Ct. 901 , 8 L.Ed.2d 54 (1962) ). This court may not take it upon itself to add an additional exception that the legislature has declined to adopt. 18

3. Applying HRS Chapter 480 in this Context Does Not Threaten this Court's Authority to Regulate the Legal Profession.

Significantly informing and underlying the ICA's interpretation of HRS § 480-2(a) were concerns that applying the unfair or deceptive acts or practices prohibition to attorneys would undermine this court's longstanding role in regulating attorney misconduct, which the dissent now similarly asserts. Dissent at 144 Hawai'i at 261-63, 439 P.3d at 213-16. To be sure, concerns for the separation of powers might arise if the legislature attempted to directly interfere with this court's regulation of the practice of law by, for example, overriding the promulgated professional rules or depriving this court of its ultimate disciplinary authority for professional misconduct. See Office of Disciplinary Counsel v. Kagawa , 63 Haw. 150 , 155, 622 P.2d 115 , 119 (1981) ("In deciding whether disciplinary sanctions would be appropriate against an attorney, we emphasize that ... the Hawaii Supreme Court is the ultimate trier of fact as well as the law."). HRS § 480-2 is not such a law, however.

The law's prohibition on unfair or deceptive acts is wholly consistent with our professional rules. See Hawai'i Rules of Professional Conduct (HRPC) Rule 8.4(c) (prohibiting "conduct involving dishonesty, fraud, deceit or misrepresentation"). Further, HRS § 480-2(a) serves additional purposes wholly separate from the regulation of professional conduct. Our professional rules are designed to protect the integrity of the legal profession and the dignity of the courts. See Office of Disciplinary Counsel v. Lau , 79 Hawai'i 201 , 207, 900 P.2d 777 , 783 (1995). By contrast, the unfair or deceptive acts or practices statute by its own terms applies to "unfair or deceptive acts or practices in the conduct of any trade or commerce." HRS § 480-2(a) (emphasis added). It regulates commercial activity generally, protecting the integrity of Hawai'i's economic environment as a whole and not targeting specific professions. 19 And by creating civil liability, the law provides a mechanism for offering full redress to the victims of unfair and deceptive business acts--an objective our professional rules were not designed to achieve. See Cieri , 80 Hawai'i at 60 , 905 P.2d at 35 (noting statements by the legislature indicating the statute was enacted to "enjoin unfair and deceptive business practices by which consumers are defrauded and the economy of the State is harmed" (quoting H. Stand. Comm. Rep. No. 55, in 1965 House Journal, at 538)); Short v. Demopolis , 103 Wash.2d 52 , 691 P.2d 163 , 168 (1984) ("The injured client can take little comfort from the fact that the wrongdoer has been reprimanded or suspended or stripped of the right to practice his profession." (quoting Comment, The Washington Consumer Protection Act vs. The Learned Professional , 10 Gonz. L. Rev. 435 , 436 (1975))). The dissent is therefore mistaken in labeling the application of HRS § 480-2(a) liability in this context as "duplicative and unnecessary." Dissent at 144 Hawai'i at 265-66, 439 P.3d at 217-18.

Indeed, taking the dissent's position that subjecting lawyers to HRS § 480-2(a) would interfere with this court's regulation of the practice of law to its logical conclusion would lead to illogical results. For example, the rendering of legal advice clearly amounts to "the practice of law" under our precedents. See Fought & Co. v. Steel Eng'g & Erection, Inc. , 87 Hawai'i 37 , 45, 951 P.2d 487 , 495 (1998) (citing Sen. Stand. Comm. Rep. No. 700, in 1955 Senate Journal, at 661). Yet few would argue that a lawyer who advises a client as to how to conceal a crime and evade capture does not commit a crime in the lawyer's own right. No implicit exception for the practice of law exists in the criminal statutes prescribing accomplice liability or prohibiting the hindrance of prosecution. See HRS § 702-221(c) ; HRS § 710-1029. Advising a client as to how to commit or conceal a crime would undoubtedly subject the attorney to professional discipline. See HRPC Rule 1.2(d). But such advice would also give rise to criminal liability, and this separate and distinct liability does not interfere with this court's regulation of the practice of law.

HRS § 480-2(a) is no different. A lawyer who engages in unfair or deceptive practices towards a client may be subject to professional discipline under the HRPC. See HRPC Rule 8.4(c). And that same conduct can give rise to separate and distinct civil liability under the HRS § 480-2 without interfering with this court's disciplinary authority or regulation of the legal profession. See In re Disciplinary Bd. of Hawai'i Supreme Court , 91 Hawai'i 363 , 370, 984 P.2d 688 , 695 (1999) ("Evidence underlying a violation of a disciplinary rule might also be evidence that would support civil or criminal liability, but determinations about civil or criminal liability are the province of the trial courts, not the [Office of Disciplinary Counsel] or the Disciplinary Board.").

In sum, the dissent theorizes that HRS § 480-2(a) 's application to the practice of law would invade this court's inherent authority to regulate the legal profession. But allowing the legislature to provide a mechanism for protecting the integrity of Hawai'i's economy and compensating consumers that are harmed by a lawyer's unfair or deceptive business acts serves a separate purpose from our regulation of professional conduct, and it does not undermine or conflict with our professional rules. Accordingly, there is no reason to infer an implicit exception that has no basis in the text or legislative history of the statute, nor in the federal case law that the legislature has specifically stated should guide our interpretation.

IV. Conclusion

The facts in this case indicate that Lacy's alleged conduct occurred in the conduct of trade or commerce, and Lacy's status as an attorney offers no shield to HRS Chapter 480 liability merely because the alleged conduct constituted or was comingled with legal services. Accordingly, we vacate that portion of the ICA's judgment on appeal that affirms the circuit court's grant of partial summary judgment on the Plehos' unfair and deceptive acts or practices claim, vacate the circuit court's grant of partial summary judgment on this claim, and remand the claim to the circuit court for a determination of whether Lacy's alleged conduct and the Plehos' resulting loss satisfies the elements necessary for recovery under HRS Chapter 480.

DISSENTING OPINION BY RECKTENWALD, C.J., IN WHICH NAKAYAMA, J., JOINS

I. INTRODUCTION

Each state has enacted consumer protection legislation. 1 Many of these statutes are modeled after the Federal Trade Commission Act (FTCA) and are thus referred to as "little FTC Acts." 2 Hawai'i's corollary to FTCA § 5, HRS § 480-2, 3 was "constructed in broad language in order to constitute a flexible tool to stop and prevent fraudulent, unfair or deceptive practices for the protection of both consumers and honest businessmen." Kukui Nuts of Hawaii, Inc. v. R. Baird & Co. , 7 Haw. App. 598 , 610, 789 P.2d 501 , 510 (1990) (quoting Ai v. Frank Huff Agency, Ltd. , 61 Haw. 607 , 616, 607 P.2d 1304 , 1311 (1980) ). Much like FTCA § 5(a)(1) and similar provisions in little FTC acts from several other states, 4 it outlaws "[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." HRS § 480-2(a).

Whether a client may bring a UDAP action against his or her lawyer under HRS § 480-2 is a question of first impression before this court. 5 As set forth below, I conclude that under HRS § 480-2, UDAP liability does not apply to the actual practice of law. I further conclude that Lacy's alleged misconduct falls within the actual practice of law, rather than the business or entrepreneurial aspects of the legal profession. Therefore, I respectfully dissent from the Majority's ruling vacating the circuit court's grant of summary judgment on Goran and Maria's UDAP claim and remanding the claim for further proceedings.

II. DISCUSSION

A. UDAP Liability Does Not Apply to The Actual Practice of Law Under HRS § 480-2

In applying HRS § 480-2, courts are directed to "give due consideration to the rules, regulations, and decisions of the Federal Trade Commission (FTC) and the federal courts" interpreting FTCA § 5(a)(1). HRS § 480-2(b). Due consideration, however, implies reasoned judgment appropriate to the circumstances.

As the House Committee on Housing and Consumer Protection explained, HRS § 480-2"provides that the courts, in construing its terms, will be guided by the interpretations given by the Federal Trade Commission and the Federal courts to the appropriate sections of the Federal Trade Commission Act. In each case, however, the courts of Hawai'i must also necessarily give due regard to the problems peculiar or pertinent to the State of Hawai'i ." H. Stand. Comm. Rep. No. 55, in 1965 House Journal, at 539 (emphasis added). In determining whether HRS § 480-2 applies to the actual practice of law, we should look not only to federal case law and FTC guidance, but also to relevant case law from other states, this court's interpretations of HRS § 480-2, and considerations specific to the State of Hawai'i. As set forth below, the imposition of UDAP liability upon the actual practice of law is contrary to this court's interpretations of HRS § 480-2, unsupported by federal guidance and case law from other states, unnecessary and duplicative, and against public policy. I therefore conclude that UDAP liability does not apply to the actual practice of law under HRS § 480-2.

1. No Published Federal Case Applies UDAP Liability to the Actual Practice of Law

It is well-settled that lawyers may be subject to antitrust liability under FTCA § 5(a)(1). The United States Supreme Court has held that "[t]he nature of an occupation, standing alone, does not provide sanctuary from the Sherman Act" and a lawyer who violates section 1 of the Sherman Act by engaging in anticompetitive practices also violates FTCA § 5(a)(1). Goldfarb v. Virginia State Bar , 421 U.S. 773 , 787, 95 S.Ct. 2004 , 44 L.Ed.2d 572 (1975) ; Fed. Trade Comm'n v. Superior Court Trial Lawyers Ass'n , 493 U.S. 411 , 422, 110 S.Ct. 768 , 107 L.Ed.2d 851 (1990).

The fact that lawyers may be subject to liability under FTCA § 5(a)(1) for engaging in anticompetitive business practices does not, however, mean lawyers are also exposed to UDAP liability when engaged in the actual practice of law. Following the Supreme Court's acknowledgment that "[i]t would be unrealistic to view the practice of professions as interchangeable with other business activities," federal courts have long recognized a distinction between the business or entrepreneurial aspects of the legal profession and the actual practice of law. Goldfarb , 421 U.S. at 788 , 788 n.17, 95 S.Ct. 2004 ; Gadson v. Newman , 807 F.Supp. 1412 , 1416-17 (C.D. Ill. 1992) (discussing Goldfarb in the context of the "business aspects of the legal and medical professions"); Kessler v. Loftus , 994 F.Supp. 240 , 242 (D. Vt. 1997) (stating "many jurisdictions differentiate between the commercial, entrepreneurial aspects of law and the legal, advisory, analytical aspects of law," and providing examples).

UDAP liability imposed upon attorneys by federal courts has been limited to the business or entrepreneurial aspects of the legal profession. The Majority misconstrues federal case law as "clear precedent" that the practice of law is subject to UDAP liability under the FTCA. However, it does not appear any federal court has applied UDAP liability to the actual practice of law under FTCA § 5(a)(1). Each federal case cited by the Majority is distinguishable on the grounds that it: i) does not involve claims brought under the FTCA; ii) fails to find a violation; iii) imposes liability upon the business or entrepreneurial aspects of the legal profession; or iv) is an unpublished decision that may have persuasive value, but does not constitute binding precedent. 6 Thus, federal courts provide minimal guidance on the question at issue.

2. FTC Guidance Makes Clear That This Court is Not Bound by Federal Interpretations of the FTCA

Turning to relevant FTC guidance, the Majority relies on Heslin v. Connecticut Law Clinic of Trantolo & Trantolo , 190 Conn. 510 , 461 A.2d 938 (1983), to demonstrate that the FTC "has maintained that state-regulated professions, including the practice of law, are not and should not be exempted from coverage of the FTCA." Majority at 144 Hawai'i at 247 n.13, 439 P.3d at 199 n.13 (internal quotations omitted). While the FTC may have taken this position with regard to the application of the FTCA, the FTC has also conceded that the extent to which states follow federal interpretations of FTCA § 5 in applying their respective state consumer protection laws "would have to be resolved by the state courts." 7

In fact, just prior to the Heslin decision, then-chairman of the FTC, James C. Miller III appeared before the Senate Committee on Commerce, Science, and Transportation. He stated, "we have not found any decisions holding that interpretations of [FTCA] Section 5 are binding on state administrative agencies and courts. On the contrary, several courts have held that although federal court decisions provide useful guidance, they are not controlling ." Reauthorization of the Federal Trade Commission, 1982 Hearings on S. 1984 Before the Senate Comm. on Commerce, Science, and Transportation, 97th Cong., 2d Sess., 45 (citations omitted) (emphasis added).

Furthermore, it is imperative to note that despite its recognition of the FTC's position in Heslin , the Connecticut Supreme Court has determined that Connecticut's UDAP statute - which is almost identical to HRS § 480-2(a) - does not apply to the actual practice of law. 8 See Heslin , 461 A.2d at 943 ("[W]e need only conclude that CUTPA's regulation ... does not totally exclude all conduct of the profession of law."); Beverly Hills Concepts, Inc. v. Schatz & Schatz, Ribicoff & Kotkin , 247 Conn. 48 , 717 A.2d 724 , 740 (1998) ("only the entrepreneurial aspects of the practice of law are covered by [Connecticut's consumer protection statute]").

Therefore, not only does federal case law fail to clearly address the application of UDAP liability to the actual practice of law under FTCA § 5(a)(1), FTC guidance makes clear that this court is not bound by federal interpretations of the FTCA in determining whether the actual practice of law may be subject to UDAP liability under HRS § 480-2. With regard to the application of UDAP liability to the practice of law, this court's first concern is interpreting HRS § 480-2, even if doing so means diverging from federal interpretations of the FTCA.

3. States Overwhelmingly Exclude the Actual Practice of Law From UDAP Liability

Where federal courts do not provide dispositive guidance, "insofar as many, if not most, of the several states' consumer protection statutes, including Hawai'i's, have a common genesis in the federal antitrust statutes, we look to other jurisdictions for guidance." Cieri v. Leticia Query Realty, Inc. , 80 Hawai'i 54 , 62-63, 905 P.2d 29 , 37-38 (1995). Other than Massachusetts, each state that has specifically addressed the application of its consumer protection statute to attorneys has determined that the actual practice of law falls outside the scope of UDAP liability. See Cripe v. Leiter , 184 Ill.2d 185 , 234 Ill.Dec. 488 , 703 N.E.2d 100 , 105 (1998) ("there appears to be little dispute among the decisions addressing this issue that consumer protection statutes do not apply to claims arising out of the 'actual practice of law.' "); Beyers v. Richmond , 594 Pa. 654 , 937 A.2d 1082 , 1086-87 (2007) (discussing cases); see also 17 Am. Jur. 2d Consumer Protection § 288 (2018) ("State consumer protection or deceptive trade practices statutes generally apply only to the business aspects of the practice of law, excluding coverage of lawyers engaged in the practice of law.").

Some states statutorily address the application of their respective consumer protection statutes to attorneys. Each one exempts the actual practice of law from the purview of UDAP liability. 9 In the remaining states, including Hawai'i, the courts are tasked with determining whether the actual practice of law is subject to UDAP liability.

Courts in New Jersey, New Hampshire, and Pennsylvania have categorically excluded all attorney conduct - both the business aspects of the legal profession and the actual practice of law - from UDAP liability to avoid interference with the regulation of the legal profession by their respective supreme courts. See, e.g. , Vort v. Hollander , 257 N.J.Super. 56 , 607 A.2d 1339 , 1342 (1992) ("[T]he practice of law in the State of New Jersey is in the first instance, if not exclusively, regulated by the New Jersey Supreme Court. Had the legislature intended to enter the area of attorney regulation it surely would have stated with specificity that attorneys were covered under the Consumer Fraud Act") (internal citations omitted); Averill v. Cox , 145 N.H. 328 , 761 A.2d 1083 , 1088 (2000) (the Supreme Court of New Hampshire's "comprehensive" regulation of the practice of law "protects consumers from the same fraud and unfair practices" as the state consumer protection act); Beyers , 937 A.2d at 1089-92 (Pennsylvania's consumer protection law does not apply to a dispute over the disbursement of settlement funds because the Supreme Court of Pennsylvania has "exclusive authority" over the regulation of attorney conduct).

Courts in other states have extended UDAP liability to the business or entrepreneurial aspects of the legal profession, while excluding the actual practice of law from the scope of liability. 10 See, e.g. , Short v. Demopolis , 103 Wash.2d 52 , 691 P.2d 163 , 168 (1984) (certain entrepreneurial aspects of the practice of law may fall within the 'trade or commerce' definition of Washington's consumer protection act, but claims that concern the actual practice of law are exempt from the CPA); Beverly Hills Concepts , 717 A.2d at 740 ("only the entrepreneurial aspects of the practice of law are covered by [Connecticut's consumer protection statute]"); Cripe , 234 Ill.Dec. 488 , 703 N.E.2d at 107 ("where allegations of misconduct arise from a defendant's conduct in his or her capacity as an attorney representing a client, the Consumer Fraud Act [of Illinois] does not apply."); Kessler , 994 F.Supp. at 243 (Vermont's Consumer Fraud Act applies to the commercial, entrepreneurial aspects of the practice of law, but not the legal, advisory, analytical aspects of law). The business or entrepreneurial aspects of the legal profession include, for example, "how the price of legal services is determined, billed, and collected and the way a law firm obtains, retains, and dismisses clients," but not "the actual practice of law." Short , 691 P.2d at 168 .

It appears Massachusetts is the only state to apply UDAP liability to the actual practice of law. See Brown v. Gerstein , 17 Mass.App.Ct. 558 , 460 N.E.2d 1043 (1984) (citing Guenard v. Burke , 387 Mass. 802 , 443 N.E.2d 892 (1982) (a couple's UDAP claim against their attorney for allegedly misrepresenting that a foreclosure sale of the clients' property would not take place should have been considered on its merits because "the practice of law constitutes 'trade or commerce' for purposes of liability under [Massachusetts' UDAP statute]")). Thus, states that have addressed the issue almost unanimously reject the application of UDAP liability to the actual practice of law.

a. It is Most Appropriate for This Court to Look to Washington Case Law for Guidance

The Majority relies heavily on Cieri , 80 Hawai'i 54 , 905 P.2d 29 (1995), for the proposition that Hawai'i courts have already endorsed, and should continue to follow, Massachusetts' framework for analyzing the applicability of UDAP liability. I respectfully disagree.

First, as discussed above, Massachusetts is unique in its application of UDAP liability. Although the Cieri court found Massachusetts case law to be instructive in the specific context of a real estate broker facilitating a real estate transaction, the court did not adopt the entire body of Massachusetts case law regarding the application UDAP liability, nor did it hold that, in the absence of Hawai'i precedent, Massachusetts is the only jurisdiction Hawai'i courts should look to for guidance. Id. at 63-65 , 905 P.2d at 38-40 .

The Cieri court indicated that this court should consult case law from other states in determining how HRS § 480-2(a) should be applied. It stated, "insofar as many, if not most, of the several states' consumer protection statutes, including Hawai'i's, have a common genesis in the federal antitrust statutes, we look to other jurisdictions for guidance." Id. at 62-63 , 905 P.2d at 37-38 . Massachusetts is just one such jurisdiction.

It is most appropriate for this court to consider Washington case law regarding the application of UDAP liability. First, our Legislature specifically considered Washington's consumer protection statute in enacting HRS § 480-2. The House Committee on Housing and Consumer Protection introduced the proposal to enact HRS § 480-2 by stating, "[a] law similar in effect to the Federal law was enacted by the State of Washington in 1961. Your committee is informed that the Washington law, like the Federal law, has been most effective in dealing with unfair and deceptive business practices." H. Stand. Comm. Rep. No. 55, in 1965 House Journal, at 538. It further explained, "[y]our Committee concludes that a law similar in effect to the federal law dealing with unfair and deceptive business practices is essential to a State-sponsored fair business program in Hawai'i." H. Stand. Comm. Rep. No. 267, in 1965 House Journal, at 600.

Soon thereafter, the Legislature enacted HRS § 480-2(a), which is almost identical to Washington's UDAP provision. Compare HRS § 480-2(a) ("Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are unlawful.") with Wash. Rev. Code Ann. § 19.86.020 ("Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful.").

Second, this court has, in fact, looked to Washington's case law for guidance regarding the application of HRS § 480-2. In Hungate , this court declined to recognize a UDAP claim brought against an attorney by an opposing party. As discussed in more detail infra , the Hungate court explained the public policy underlying its holding by adopting reasoning from Justice Pearson's concurring opinion in Short v. Demopolis , a Washington Supreme Court case. See Hungate v. Law Office of David B. Rosen , 139 Hawai'i 394 , 413, 391 P.3d 1 , 20 (2017) (citing Short v. Demopolis , 103 Wash.2d 52 , 691 P.2d 163 , 172 (1984) (Pearson, J., concurring)); see also Field, Trustee of Estate of Aloha Sports Inc. v. National Collegiate Athletic Association , 143 Hawai'i 362 , 431 P.3d 735 (2018).

b. Washington Courts Exclude the Actual Practice of Law from UDAP Liability

In Short , the Washington Supreme Court held that "certain entrepreneurial aspects of the practice of law may fall within the trade or commerce definition of [Washington's Consumer Protection Act]," but excluded the actual practice of law from UDAP liability. Short , 691 P.2d at 168 (internal quotations omitted). The court stated:

[D]efendant's counterclaims primarily challenge the entrepreneurial aspects of legal practice .... These business aspects of the legal profession are legitimate concerns of the public which are properly subject to the CPA.

However, a few of defendant's claims as a matter of law are outside the purview of the CPA and were properly dismissed by the trial court. Defendant alleges ... claims [that] are not chiefly concerned with the entrepreneurial aspects of legal practice; rather, they concern the actual practice of law . Since these claims are directed to the competence of and strategy employed by plaintiff's lawyers, they amount to allegations of negligence or malpractice and are exempt from the CPA .

Id. (emphases added) (internal citations omitted).

An en banc panel of the Washington Supreme Court affirmed Short in Eriks v. Denver , 118 Wash.2d 451 , 824 P.2d 1207 (1992) (en banc). The Eriks court reiterated that "[t]he CPA only applies to acts occurring in trade or commerce [and t]he provision of legal services does not generally fall within the definition of trade or commerce, except as those services relate to the entrepreneurial aspects of the practice of law." Id. at 1214 (internal quotations omitted).

Justice Pearson's concurrence in Short , which this court relied on in Hungate and cited approvingly in Field , further explained that the application of UDAP liability to the actual practice of law would be contrary to federal interpretations of the FTCA and public policy. Short , 691 P.2d at 171 (Pearson, J., concurring); Hungate , 139 Hawai'i at 413 , 391 P.3d at 20 ; Field , 143 Hawai'i at 378, 431 P.3d at 751 . Justice Pearson highlighted the fact that federal UDAP case law only applies liability to the business or entrepreneurial aspects of the legal profession, rather than the actual practice of law, as follows:

The question of whether professional activities of attorneys, as members of a "learned profession", can constitute "trade or commerce" was answered in the affirmative in [ Goldfarb ]....

It is of critical importance to note, however, that Goldfarb dealt only with the "business aspect" of the law profession. The same is true of other federal cases imposing liability upon lawyers under the Sherman Act.... These cases dealt with price fixing agreements and other anticompetitive devices, rather than the actual practice of law. To fail to make this distinction would be to equate the actual practice of law with ordinary commercial enterprise, something which the Court in Goldfarb expressly refused to do....

This commercial-noncommercial distinction was sharply drawn in [ Marjorie Webster ], where the court ... stated that the "proscriptions of the Sherman Act were 'tailored ... for the business world,' not for the noncommercial aspects of the ... learned professions." The rationale of Marjorie Webster ... together with the narrowness of the Court's opinion in Goldfarb , mandate a conclusion that the direction of the law is toward validating judicial exemptions for noncommercial aspects of the professions....

Short , 691 P.2d at 171-72 (Pearson, J., concurring) (citations omitted) (citing Goldfarb , 421 U.S. at 787-88 , 95 S.Ct. 2004 and Marjorie Webster Junior College, Inc. v. Middle States Ass'n of Colleges and Secondary Schs., Inc. , 432 F.2d 650 , 654 (D.C. Cir.), cert. denied, 400 U.S. 965 , 91 S.Ct. 367 , 27 L.Ed.2d 384 (1970) ).

Justice Pearson then articulated that the application of UDAP liability to the actual practice of law would be contrary to public policy. Justice Pearson explained:

There are sound reasons of public policy ... supporting the commercial-noncommercial distinction we adopt in this case. Our state's Consumer Protection Act has no general requirement of fault .... Thus, if the act complained of was in fact deceptive, although done with the best of intentions, liability could result under the CPA regardless of the care taken in providing the service. Such a state of affairs would make it virtually impossible for an attorney to effectively perform the traditional role of legal counselor . The law is often vague and unsettled; several legal opinions are often possible, especially in borderline cases. Liability should be imposed only where an attorney has failed to use due care to serve a client. Imposition of liability under the CPA, however, would require an attorney to guarantee much more than just the care used in forming his opinions. Since even a carefully rendered opinion could, if incorrect, have the capacity to deceive, the attorney would have to insure the correctness of his opinions and strategies. I sincerely doubt that the CPA was intended to so radically alter the standard of care owed by lawyers and other professionals.

Short , 691 P.2d 163 , 172 (Pearson, J., concurring) (emphases added).

This court adopted Justice Pearson's reasoning in Hungate . We recognized that "[i]n a UDAP action, an attorney would be especially vulnerable to suit" because, like Washington's UDAP statute, under HRS § 480-2 , "actual deception need not be shown; the capacity to deceive is sufficient." Hungate , 139 Hawai'i at 413 , 391 P.3d at 20 (citing Hawai'i Cmty. Fed. Credit Union v. Keka , 94 Hawai'i 213 , 228, 11 P.3d 1 , 16 (2000) and Short , 691 P.2d 163 , 172 ); Field , 143 Hawai'i at 378, 431 P.3d at 751 ; McRae v. Bolstad , 101 Wash.2d 161 , 676 P.2d 496 , 500 (1984) (en banc) ("Under the Consumer Protection Act, ... proof of intent to deceive or defraud is not necessary if the action 'has the capacity to deceive a substantial portion of the purchasing public.' "). As such, applying UDAP liability to the actual practice of law, "[g]iven that UDAP lacks a more rigorous or precise state of mind requirement" would render it "virtually impossible for an attorney to effectively perform the traditional role of legal counselor." 11 Hungate , 139 Hawai'i at 413 , 391 P.3d at 20 (citations omitted).

4. Considerations Specific to the State of Hawai'i and HRS § 480-2 Weigh Against The Imposition of UDAP Liability on The Actual Practice of Law

In addition to relevant guidance from other jurisdictions, it is of paramount importance for this court to examine considerations specific to the State of Hawai'i and HRS § 480-2 when determining whether UDAP liability applies to the actual practice of law.

a. Hawai'i Case Law is Inconsistent With Applying UDAP Liability to The Actual Practice of Law

The Majority contends that Lacy is subject to UDAP liability under Cieri because he actively facilitated a business transaction. Majority at 144 Hawai'i at 243-45, 439 P.3d at 195-97. However, Cieri does not control as it is clearly distinguishable from the instant case.

The plaintiffs in Cieri brought a UDAP claim against a licensed real estate broker who failed to disclose that the house plaintiffs purchased from the broker's client had a long history of plumbing problems, a fact which was known to the broker. Cieri , 80 Hawai'i at 56-57 , 905 P.2d at 31-32 . The Cieri court held that "as a matter of law ... a [real estate] broker or sales person actively involved in a real estate transaction invariably engages in conduct in any trade or commerce," namely "the systematic sale or brokering of interests in real property," and is thus subject to liability under HRS § 480-2. Id. at 65 , 905 P.2d at 40 .

The Cieri court confined its discussion to the context of real estate transactions and further narrowed its holding by specifically distinguishing real estate brokers and salespersons from other actors. 12 The court acknowledged that where the defendant is not a real estate broker or salesperson, whether a real estate sale involving the defendant implicates the applicability of HRS chapter 480 "must be determined on a case-by-case basis by an analysis of the transaction." Id. Cieri is thus distinguishable from the instant case as Lacy is not a licensed real estate broker, did not facilitate a real estate transaction, and did not engage in the trade or commerce of the systematic sale or brokering of interests in real property.

Lacy was introduced to Goran and Maria as "the best attorney on the island." He entered into an attorney-client relationship with Goran and Maria and, unlike the real estate broker in Cieri , Lacy engaged in the actual practice of law in his representation of Goran and Maria. Leading up to, and including, the completion of the sale of RLS, Lacy reviewed hundreds of documents with Goran, referred Goran to a CPA to obtain an appraisal, and recommended that Goran form a limited liability company. He drafted GPLLC's incorporation documents, the Sale Agreement, the promissory note, the Management Services Agreement, and a limited power of attorney. Following completion of the sale, Lacy met with Goran several times and advised him to wait for transfer of the PUC license before taking any legal action against Rnic.

In doing so, Lacy engaged in legal research, contracting, strategy, and advising. These services cannot be provided by a non-attorney real estate broker. As such, Lacy's representation of Goran and Maria was not, as the Majority asserts, analogous to the role played by the real estate broker in Cieri . Majority at 144 Hawai'i at 244, 439 P.3d at 196.

In direct contradiction to the language in Cieri , the Majority broadens Cieri 's holding to apply not just to any real estate broker or salesperson actively involved in a real estate transaction, but to anyone who "utilize[s] the specialized professional services with which he makes his living ... to facilitate a commercial transaction of a type with which he purported to have professional expertise," including attorneys engaged in the actual practice of law. Majority at 144 Hawai'i at 244-45, 439 P.3d at 196-97. The Majority asserts that because "Lacy is alleged to have engaged in actions during the sale of RLS analogous to those of the property manager in Cieri ," Lacy's alleged conduct is "necessarily" subject to UDAP liability. Majority at 144 Hawai'i at 245, 439 P.3d at 197. The Cieri court did not, however, intend for its holding to apply so broadly. Rather, the court expressly limited its holding to real estate brokers and salespersons actively involved in real estate transactions. Cieri , 80 Hawai'i at 65 , 905 P.2d at 40 .

First, it is important to note that the defendant in Cieri was not simply a property manager helping to sell a house; she was a licensed real estate broker engaged in the 'trade or commerce' of facilitating real estate sales. 13 Cieri , 80 Hawai'i at 56, 65 , 905 P.2d at 31, 40 . Only real estate brokers and salespersons who are actively involved in real estate transactions are per se subject to UDAP liability under Cieri . Outside of that narrow context, however, "whether a transaction occurs within a business context, thus implicating the applicability of HRS chapter 480 ..., must be determined on a case-by-case basis by an analysis of the transaction." Id. at 65 , 905 P.2d at 40 . Thus, the Cieri defendant was subject to UDAP liability due to the fact that she was a licensed real estate broker. Had she just been a property manager, the result may have been different. 14

Second, by eliminating any distinction between attorneys and real estate professionals with regard to the application of UDAP liability, the Majority now adopts the very argument that we unanimously rejected in Hungate . The plaintiff in Hungate cited Cieri for the proposition that a real estate agent or broker can be subject to UDAP liability under HRS § 480-2. He argued that, like the defendant in Cieri , the defendant attorney acted as an agent in conducting a foreclosure, and thus should have been held liable under the UDAP statute. Hungate , 139 Hawai'i at 412 , 391 P.3d at 19 . This court rejected the plaintiff's argument and expressly distinguished between real estate brokers and attorneys with regard to UDAP liability under HRS § 480-2. 15 We stated:

[T]he unique nature of the attorney-client relationship warrants distinguishing the role of broker and attorney for purposes of this case. Sellers and purchasers of real estate often "utilize and rely on brokers for their expertise and resources, including access to data in locating properties as well as determining pricing of 'comparables' as a basis for negotiations." Cieri , 80 Hawai'i at 65 , 905 P.2d at 40 . Hence, the role of a broker is to provide clients with expertise and resources in real estate transactions.

In contrast, the role of an attorney involves representing a client's interests against those of an opposing party within an adversary system. Attorneys bear a duty to zealously represent clients "within the bounds of the law." Giuliani v. Chuck , 1 Haw. App. 379 , 384, 620 P.2d 733 , 737 (1980) ; see also Hawai'i Rules of Professional Conduct, "Preamble," ¶ 2; ¶ 8; ¶ 9....

Consequently, based on the allegations against Rosen, we decline to recognize a UDAP claim against him by Hungate under § 480-2 in the instant foreclosure action.

Hungate , 139 Hawai'i at 412-13 , 391 P.3d at 19-20 .

The Majority's position in the instant case is therefore contrary to this court's precedent. As we recognized in Hungate , there are unique policy reasons attendant to the practice of law that militate against the imposition of UDAP liability. Thus, to the extent that this court has touched upon the issue, it has declined to apply UDAP liability to the actual practice of law.

b. The Application of UDAP Liability to the Actual Practice of Law May Interfere with this Court's Exclusive Regulation of the Legal Profession

Article VI, section 7 of the Hawai'i Constitution provides, "[t]he supreme court shall have power to promulgate rules and regulations in all civil and criminal cases for all courts relating to process, practice, procedure and appeals, which shall have the force and effect of law." 16 This provision places full rule-making power "where it belongs - in the Supreme Court, [to] make for an efficient and orderly dispatch of the business of the courts." Stand. Comm. Rep. No. 37 in 1 Proceedings of the Constitutional Convention of Hawai'i of 1950, at 174-75 (1960).

Pursuant to this authority, this court has the "ultimate responsibility to regulate the practice of law in this state and to ensure that the integrity of the profession is maintained by disciplining attorneys who indulge in practices inconsistent with the high ethical standards demanded of all members of the bar." Office of Disciplinary Counsel v. Gould , 119 Hawai'i 265 , 273-74, 195 P.3d 1197 , 1205-06 (2008) (internal quotation marks and citation omitted); In re Disciplinary Bd. of Hawai'i Supreme Court , 91 Hawai'i 363 , 368, 984 P.2d 688 , 693 (1999) (citing HAW. CONST. art. VI, § 7 ) ("The Office of Disciplinary Counsel and the Disciplinary Board are creatures of this court, created pursuant to the court's inherent and constitutional authority to regulate the practice of law"); Disciplinary Bd. of Hawai'i Supreme Court v. Bergan , 60 Haw. 546 , 553, 592 P.2d 814 , 818 (1979) ("It is the solemn duty of this court to regulate the practice of law in this state ....").

This rule-making power has been consistently recognized in our case law and exercised through our promulgation of the Hawai'i Rules of Professional Conduct. In re Ellis , 53 Haw. 23 , 23 n.1, 487 P.2d 286 , 287 n.1 (1971) ("This court has inherent power to regulate matters before it regarding the practice of law."); Office of Disciplinary Counsel v. Lau , 79 Hawai'i 201 , 204, 900 P.2d 777 , 780 (1995) (the Hawai'i Supreme Court is "the ultimate trier of both fact and law in cases involving the discipline of attorneys"); Rules of the Supreme Court of the State of Hawai'i Rule 2.1 ("Any attorney admitted to practice law in this state ... is subject to the exclusive disciplinary jurisdiction of the supreme court ....") (emphasis added). "Although other professions also have been granted powers of self-government, the legal profession is unique in this respect because of the close relationship between the profession and the processes of government and law enforcement ... manifested in the fact that ultimate authority over the legal profession is vested largely in the courts ." Hawai'i Rules of Professional Conduct, "Preamble," ¶ 10 (emphases added).

The Majority argues that the legislature did not intend to exclude lawyers from UDAP liability under HRS § 480-2. Majority at 144 Hawai'i at 249-51, 439 P.3d at 201-03. However, this court's exclusive constitutional authority to regulate the practice of law had been long-established by the time the legislature enacted HRS § 480-2. 17 Further, the legislature entrusted the courts to exercise discretion in defining the scope of liability under HRS § 480-2. Stand. Comm. Rep. No. 55, in 1965 House Journal, at 539 (stating, "the courts of Hawai'i must also necessarily give due regard to problems peculiar or pertinent to the State of Hawai'i"). If the legislature intended to limit this discretion and encroach on this court's constitutional authority by exposing attorneys to UDAP liability under HRS § 480-2, it would have done so expressly. Yet, the plain language and legislative history of HRS § 480-2 reveal no indication of such intent. 18

Although the Majority asserts that the legislature intended for HRS § 480-2 to apply to attorneys just as it does to real estate brokers, carpenters, bakers, travel agents, and shoe salespersons, there is a fundamental distinction between those occupations and the practice of law: regulation of the practice of law is entrusted by the Hawai'i Constitution to the Supreme Court. Majority at 144 Hawai'i at 253-54, 439 P.3d at 202-03; HAW. CONST. art. VI, § 7. Given this grant of regulatory authority to a co-equal branch of government, 19 it is fair to presume that the legislature would make its intent to encroach on that authority through § 480-2 explicit. 20

In sum, I share the concern expressed by other state courts that subjecting the actual practice of law to UDAP liability under HRS § 480-2 may interfere with this court's regulation of the practice of law, and is inappropriate absent clearly expressed legislative intent. See, e.g. , Beyers , 937 A.2d at 1091-92 (because the Pennsylvania legislature "has no authority under the Pennsylvania constitution to regulate the conduct of lawyers in the practice of law," any application of the Unfair Trade Practices and Consumer Protection Law to attorney misconduct "would purport to regulate the conduct of attorneys and would be an impermissible encroachment upon the power of this Court."). In suggesting otherwise, the Majority introduces significant uncertainty in the regulation of the legal profession.

c. The Application of UDAP Liability to the Actual Practice of Law is Duplicative and Unnecessary

In addition to the oversight and professional discipline provided by this court, attorneys in the State of Hawai'i are subject to civil actions sounding in tort and contract, as well as criminal prosecution. 21 In the instant case, for example, Goran and Maria brought claims against Lacy for legal malpractice, conspiracy to commit fraud, IIED, and NIED. GPLLC brought additional claims against Lacy for legal malpractice, fraud, and punitive damages. The existing sources of civil liability, in addition to criminal prosecution, adequately deter and punish attorney misconduct, while appropriately compensating aggrieved clients.

In Hungate , we distinguished between attorneys and real estate professionals for purposes of UDAP liability due to the "unique nature of the attorney-client relationship" and public policy considerations. Hungate , 139 Hawai'i at 412-13 , 391 P.3d at 19-20 . Accordingly, we declined to recognize a UDAP claim brought against an attorney by the opposing party to a foreclosure action. Id. at 413 , 391 P.3d at 20 . We made clear, however, that although we declined to subject attorneys to additional liability in the form of UDAP claims, we were not shielding attorneys from existing sources of liability to which they were already subject. Id. at 413, n.22 , 391 P.3d at 20, n.22 . These sources of liability, as well as the legal remedies available to aggrieved clients under the existing state of the law, are similarly left undisturbed by this dissenting position.

As noted by the Majority, we stated, "[o]ur desire to avoid creating unacceptable conflicts of interest in this context, to protect attorney-client counsel and advice from the intrusion of competing concerns, and to allow adequate room for zealous advocacy, does not encompass, for example, allowing attorneys to conduct patently illegal activities on behalf of clients." Id. at 413 n.22, 391 P.3d at 20 n.22. The Majority characterizes this footnote as a "pronouncement that particularly egregious misconduct may subject an opposing counsel to HRS § 480-2(a) liability." Majority at 144 Hawai'i at 248-49 n.14, 439 P.3d at 200-01 n.14. However, this interpretation is unsupported by Hungate as a whole.

Many of the policy concerns fundamental to our holding in Hungate apply equally to UDAP claims brought against attorneys, regardless of whether they are brought by clients or opposing parties. As discussed above, we acknowledged the unique nature of the attorney-client relationship and attorneys' heightened vulnerability to UDAP liability, given that HRS § 480-2 lacks "a more rigorous or precise state of mind requirement." Id. at 413, 391 P.3d at 20 . Citing to Short , which involved a UDAP claim brought against the plaintiff's own attorney, we agreed that the imposition of UDAP liability on the actual practice of law would require an attorney to insure the correctness of his or her opinions and strategies, rendering it virtually impossible for an attorney to effectively perform the traditional role of legal counselor. Id. , 139 Hawai'i at 413 , 391 P.3d at 20 (citations, internal quotations, and brackets omitted).

The Majority notes that there is no exception for the practice of law in the application of criminal statutes. 22 Majority at 144 Hawai'i at 248-49, 252-53, 439 P.3d at 200-01, 204-05. This point serves to highlight the several layers of existing liability that the actual practice of law is already subject to. Even in the absence of UDAP liability, attorneys are not "allowed" to engage in patently illegal activities on behalf of clients. Such conduct would subject an attorney to professional discipline under the Hawai'i Rules of Professional Conduct, civil liability in the form of legal malpractice and tort actions, and criminal prosecution. HRPC Preamble 5 ("A lawyer's conduct should conform to the requirements of the law."); HRPC Rule 8.4 (It is professional misconduct for a lawyer to commit a criminal act that reflects adversely on the lawyer's honesty, trustworthiness, or fitness as a lawyer); Giuliani , 1 Haw. App. at 383-84, 620 P.2d at 736-37 ("[T]hat an attorney representing a client may be held personally liable to an adverse party or a third person who sustains injury as a result of an attorney's intentional tortious acts is well settled."). Thus, the application of UDAP liability to the actual practice of law is duplicative and unnecessary.

d. Applying UDAP Liability to the Practice of Law is Against Public Policy

In Hungate , this court recognized the chilling effect that applying UDAP liability to the actual practice of law could have on the legal profession. Hungate , 139 Hawai'i at 412-13 , 391 P.3d at 19-20 . This chilling effect is especially concerning in light of the broad scope of liability adopted by the Majority, and the treble damages awarded to UDAP plaintiffs under Hawai'i law. Compare Wash. Rev. Code Ann. § 19.86.090 (generally awarding successful UDAP plaintiffs actual damages, but allowing courts to increase the award of damages up to an amount equal to treble damages) with HRS § 480-13(b) (awarding successful UDAP plaintiffs the greater of $1,000 or treble damages).

Despite its determination that Lacy's conduct is subject to UDAP liability regardless of whether it constituted the practice of law, the Majority states that "[i]n other instances, whether the challenged conduct occurred during the provision of legal services may be a factor to be considered in the case-by-case analysis of the transaction to determine whether it occurred in the business context." Majority at 144 Hawai'i at 245 n.9, 439 P.3d at 197 n.9 (internal quotation marks and ellipsis omitted). I find no comfort in this limitation, however, given the Majority's holding that "it is no defense that [a defendant's] actions constituted or were intermingled with legal services." Majority at 144 Hawai'i at 245, 439 P.3d at 197. In fact, the Majority declines to determine whether Lacy's conduct amounted to the practice of law, deeming it to be irrelevant to the UDAP analysis. The Majority's statement that HRS § 480-2"places within its ambit virtually all activity occurring in the business context," followed by examples of statutes with broad application, further demonstrates that its approach will impose UDAP liability upon all aspects of the practice of law. 23 Majority at 144 Hawai'i at 249, 439 P.3d at 201.

The increased exposure to liability imposed upon attorneys by the Majority's holding could make the procurement and maintenance of legal malpractice insurance prohibitively expensive.

B. Lacy's Alleged Misconduct Falls Within the Actual Practice of Law

In the instant case, Goran and Maria's UDAP claim concerns the actual practice of law. As discussed above, Lacy entered into an attorney-client relationship with Goran and Maria and engaged in legal research, contracting, strategy, and advising on their behalf. These services clearly constitute the actual practice of law, rather than the business or entrepreneurial aspects of the legal profession. See, e.g. , Kessler , 994 F.Supp. at 243 (the legal, advisory, analytical aspects of law constitute the actual practice of law); Short , 691 P.2d at 168 (the actual practice of law includes the performance of legal advice and services).

Further evidencing the fact that Lacy's conduct constituted the actual practice of law, Pleho Parties argued that "Lacy used his position of trust and confidence as [their] attorney to fraudulently induce them into purchasing [RLS] for $1,500,000." Because Goran and Maria's UDAP claim is directed to Lacy's competence and the strategy he employed, it amounts to an allegation of legal malpractice. In fact, Pleho Parties actually alleged Lacy's conduct constituted legal malpractice. Lacy's conduct should thus be exempt from UDAP liability under HRS § 480-2. Short , 691 P.2d at 168 .

III. CONCLUSION

For the foregoing reasons, I respectfully dissent. I conclude that the actual practice of law is not subject to UDAP liability under HRS § 480-2. Lacy's purported misconduct constitutes the actual practice of law, and thus does not subject him to UDAP liability under HRS § 480-2. Therefore, the ICA did not err in affirming the circuit court's grant of summary judgment in Lacy Parties' favor as to Goran and Maria's UDAP claim.

1

Chief Justice Recktenwald writes for the court, except with respect to Petitioners' unfair and deceptive trade practices claim. With respect to that issue, Justice Pollack writes for the majority of the court and Chief Justice Recktenwald, with whom Justice Nakayama joins, respectfully dissents.

5

Maria was not represented at the March 10, 2011 hearing and thus was not bound by the settlement. Pleho Parties do not contest the settlement with Rnic in their application.

6

Pleho Parties also argued that the circuit court erred in (1) granting Rnic's motion to enforce settlement; and (2) granting Rnic's motion for summary judgment. The ICA upheld both the settlement and summary judgment in Rnic's favor in its memorandum opinion, and Pleho Parties do not contest the rulings on Rnic's motions in their application for writ of certiorari.

7

The ICA noted that the circuit court appeared to review "the record and file of the case" in evaluating Lacy Parties' HRCP Rule 12(b)(6) motion, making it appropriate to consider the motion under the HRCP Rule 56 motion for summary judgment standard as well.

8

The ICA noted that its ruling was "without prejudice" to Lacy Parties claiming on remand that the claims are barred by the jury verdict on GPLLC's malpractice claim. Respectfully, we disagree with the ICA's observations on that issue. Goran and Maria's claims as individuals are sufficiently distinct from GPLLC's that it appears collateral estoppel would be inappropriate in this instance. See Dorrance v. Lee , 90 Hawai'i 143 , 149, 976 P.2d 904 , 910 (1999) (delineating the elements of collateral estoppel, including, "(1) [that] the issue decided in the prior adjudication is identical to the one presented in the action in question").

We also note that we do not agree with Pleho Parties' assertion that the jury verdict on GPLLC's malpractice claim is a "nullity" because Goran and Maria were necessary parties under HRCP Rule 19(a) on all claims. Mandatory joinder under HRCP Rule 19 functions to "ensure[ ] due process for the absent party." Marvin v. Pflueger , 127 Hawai'i 490 , 520, 280 P.3d 88 , 118 (2012). Goran and Maria cannot claim that they were absent, as they initiated the lawsuit and their claims were heard in circuit court. See Mauna Kea Anaina Hou v. Bd. of Land and Natural Res. , 136 Hawai'i 376 , 389, 363 P.3d 224 , 237 (2015) ("The basic elements of procedural due process are notice and an opportunity to be heard at a meaningful time and in a meaningful manner.") (citation omitted).

9

The circuit court and the ICA dismissed GPLLC's IIED and NIED claims. We hereby affirm these rulings, as a corporation cannot suffer emotional distress. See RT Imp., Inc. v. Torres , 139 Haw. 445 , 448 n.2, 393 P.3d 997 , 1000 n.2 (2017) (indicating emotional distress damages cannot be awarded in favor of corporations).

10

A valid negligence claim has four elements:

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 the duty;

3. A reasonably close causal connection between the conduct and the resulting injury; and

4. Actual loss or damage resulting to the interests of another.

Doe Parents , 100 Hawai'i at 68 , 58 P.3d at 579.

11

In affirming the circuit court's dismissal of Pleho Parties' NIED claim, the ICA stated, "the Pleho Parties do not cite to any Hawai'i case law supporting recovery for NIED based entirely on a commercial transaction, and we find none." However, whether the conduct at issue occurred in the context of a commercial transaction is irrelevant to whether the elements of an NIED claim have been sufficiently alleged.

12

"Punitive or exemplary damages are generally defined as those damages assessed in addition to compensatory damages for the purpose of punishing the defendant for aggravated or outrageous misconduct and to deter the defendant and others from similar conduct in the future." Masaki v. Gen. Motors Corp. , 71 Haw. 1 , 6, 780 P.2d 566 , 570 (1989) (citations omitted).

13

Fraud in the inducement is simply a type of fraud which induces an action by fraudulent misrepresentation, so it is appropriate to analyze Pleho Parties' counts of fraud and fraud in the inducement together. See Aames Funding Corp. v. Mores , 107 Hawai'i 95 , 103-04, 110 P.3d 1042 , 1050-51 (2005).

14

HRS § 607-14 provides, in relevant part:

In all the courts, in all actions in the nature of assumpsit and in all actions on a promissory note or other contract in writing that provides for an attorney's fee, there shall be taxed as attorneys' fees, to be paid by the losing party and to be included in the sum for which execution may issue, a fee that the court determines to be reasonable[.]

15

As correctly noted by the ICA:

Most jurisdictions apply judicial estoppel when, at minimum, the following elements are met:

(1) The party to be estopped must be asserting a position that is factually incompatible with a position taken in a prior judicial or administrative proceeding;

(2) the prior inconsistent position must have been accepted by the tribunal; and

(3) the party to be estopped must have taken inconsistent positions intentionally for the purpose of gaining unfair advantage.

Although Hawai'i courts have not expressly adopted those elements, our case law is generally in accord. See Roxas , 89 Hawai'i at 124, 969 P.2d at 1242 ; Rosa , 4 Haw. App. at 220, 664 P.2d at 752 ("A party is precluded from subsequently repudiating a theory of action accepted and acted upon by the court.").

Langer v. Rice , No. 29636, --- Haw. ----, 2013 WL 5788676 , at *5 (Haw. App. Oct. 28, 2013) (mem.) (citations omitted).

1

The Plehos' Second Amended Complaint alleged as follows:

Count VII (UNFAIR AND DECEPTIVE TRADE PRACTICES)

...

54. The acts and omissions of Defendants DAVID LACY, LACY & JACKSONS, LLLC, and DRAGAN RNIC described herein and such other conduct as may be established at trial constitute one or more counts of unfair and deceptive trade practices under Hawai'i Revised Statutes Chapters 480 and 481A.

Insofar as HRS Chapter 481A serves primarily to clarify the prohibition on deceptive trade practices contained in HRS Chapter 480, we address the statutes together, and all references to the Pleho parties' HRS Chapter 480 claims encompass their claims under both statutes.

2

The circuit court had previously dismissed GPLLC's claims based on HRS Chapters 480 and 481A, reasoning that the company was not a "consumer" authorized to bring suit under the statutes because the law limits the term to only "natural persons." (Citing HRS §§ 480-1 and 480-2(d).)

3

Although the circuit court's order did not explain the court's reasoning for granting the Lacy parties' motion, the transcript from the hearing on the motion indicates that the court was primarily concerned with whether HRS Chapter 480 applied to the practice of law.

4

The ICA's amended memorandum opinion can be found at Goran Pleho, LLC v. Lacy , No. CAAP-12-0000025, --- Haw. ----, 2016 WL 4082346 (Haw. App. Aug. 26, 2016).

5

The ICA also affirmed the circuit court's dismissal of GPLLC's HRS Chapter 480 claim on the grounds that the company was not a "consumer" entitled to recover under the statute.

6

HRS § 480-2 provides in relevant part as follows:

(a) Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are unlawful.

(b) In construing this section, the courts and the office of consumer protection shall give due consideration to the rules, regulations, and decisions of the Federal Trade Commission and the federal courts interpreting section 5(a)(1) of the Federal Trade Commission Act (15 U.S.C. 45(a)(1) ), as from time to time amended.

....

(d) No person other than a consumer, the attorney general or the director of the office of consumer protection may bring an action based upon unfair or deceptive acts or practices declared unlawful by this section.

7

To the extent the Pleho parties challenge the circuit court's dismissal of GPLLC's unfair or deceptive acts or practices claim, we hold that the ICA correctly determined that, under HRS § 480-2(d), only a consumer, the attorney general, or the director of the office of consumer protection may bring such a claim. Because HRS § 480-1 (2008) specifies that only a "natural person" may be considered a "consumer" for purposes of HRS Chapter 480, a business organization like GPLLC is not permitted to bring an unfair or deceptive acts or practices claim under the statute. By contrast, the Plehos' status as consumers in their personal capacities has not been challenged at any stage of these proceedings. Our discussion therefore pertains to only the Plehos' claims against the Lacy parties and not those of GPLLC.

8

The court approvingly cited Begelfer v. Najarian , in which the Massachusetts court set forth relevant factors to be evaluated in determining whether a particular transaction occurred in the "business context." Cieri , 80 Hawai'i at 63 , 905 P.2d at 38 (citing 381 Mass. 177 , 409 N.E.2d 167 (1980) ). "[T]he question whether a transaction took place in a 'business context' ... require[s] assessment of factors such as: (1) the nature of the transaction; (2) the character of the parties involved; (3) the activities engaged in by the parties; (4) whether similar transactions had been undertaken in the past; (5) whether the transaction was motivated by business or for personal reasons (as in the sale of a home); and (6) whether the participant played an active part in the transaction." Id.

9

In other instances, whether the challenged conduct occurred during the provision of legal services may be a factor to be considered in the "case-by-case ... analysis of the transaction" to determine whether it occurred in the business context. Cieri , 80 Hawai'i at 65 , 905 P.2d at 40 .

Additionally, simply establishing that activity occurs in the conduct of trade or commerce is of course not sufficient to establish an HRS § 480-2(a) violation. Liability is further limited by the requirement that a plaintiff be a consumer or other party entitled to bring an HRS § 480-13 action under HRS § 480-2(d) or (e). Cieri , 80 Hawai'i at 65 , 905 P.2d at 40 . And the plaintiff must also demonstrate that the complained of actions amounted to an unfair method of competition or an unfair or deceptive act or practice that caused the plaintiff's injury in order to prevail. Kawakami v. Kahala Hotel Inv'rs, LLC , 142 Hawai'i 507 , 519, 421 P.3d 1277 , 1289 (2018).

10

15 U.S.C. § 45 (a)(1) (2012) provides in full as follows: "(1) Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful."

11

The dissent seeks to minimize these clear statutory directives by observing that "[d]ue consideration ... implies reasoned judgment appropriate to the circumstances." Dissent at 144 Hawai'i at 253, 439 P.3d at 205. It further attempts to justify departing from federal precedents applying the FTCA to aspects of the practice of law by misconstruing a generalized observation made in a single 1965 House committee report in the legislative history of HRS Chapter 480, which stated that "courts of Hawai'i must also necessarily give due regard to the problems peculiar or pertinent to the State of Hawai'i." Dissent at 144 Hawai'i at 253, 439 P.3d at 205 (quoting H. Stand. Comm. Rep. No. 55, in 1965 House Journal, at 539). Seemingly relying on this statement, the dissent summarily asserts that in "Hawai'i, the courts are tasked with determining whether the actual practice of law is subject to [HRS § 480-2(a) ] liability." Dissent at 144 Hawai'i at 256, 439 P.3d at 208. As discussed infra , however, the plain language the legislature employed in enacting HRS Chapter 480 encompasses the business of lawyering on its face, and attorneys are not included in any of the specifically enumerated exceptions the legislature chose to codify. A court's personal policy judgment regarding local needs is not grounds for reading an exception into a statute that the legislature did not see fit to include anywhere in its text, and even assuming the dissent's cited excerpt is inconsistent with the law's clear directives--including HRS §§ 480-2(b) 's and 480-3's instructions that courts "shall" look to federal precedent to guide their interpretation--it is inoperative. See State v. Akina , 73 Haw. 75 , 78, 828 P.2d 269 , 271 (1992) ("This court derives legislative intent primarily from the language of statute and follows the general rule that in the absence of clear legislative intent to the contrary, the plain meaning of the statute will be given effect." (quoting State v. Briones , 71 Haw. 86 , 92, 784 P.2d 860 , 863 (1989) )).

12

The dissent attempts to distinguish these cases on several additional grounds, including by arguing that they "impose[d] liability upon the business or entrepreneurial aspects of the legal profession" rather than the actual practice of law. Dissent at 144 Hawai'i at 254 n.6, 439 P.3d at 206 n.6. The federal courts did not rely on such a distinction, however, and in at least one instance explicitly stated that a "practice of law exclusion ... is not present in the FTC Act." Lanier Law , 194 F.Supp.3d at 1282 . And all of these cases are validly citable for their persuasive value. See Federal Rules of Appellate Procedure Rule 32.1 (providing that federal courts' local rules "may not prohibit or restrict" the citation of unpublished opinions issued after January 1, 2007).

13

HRS § 480-2(b) instructs us to consider not only federal courts' interpretation of section 5(a)(1), but also that of the Federal Trade Commission. The Federal Trade Commission has long used its enforcement authority to pursue administrative remedies against lawyers for unfair and deceptive trade practices and has maintained that "state-regulated professions, including the practice of law, are not and should not be exempted from coverage of the" FTCA. See Heslin v. Conn. Law Clinic of Trantolo & Trantolo , 190 Conn. 510 , 461 A.2d 938 , 942-43 (1983) (citing In re Wilson Chemical Co. , 64 F.T.C. 168 , 186-87, 190 (1964) ; Reauthorization of the Federal Trade Commission, 1982 Hearings on S. 1984 Before the Senate Comm. on Commerce, Science, and Transportation, 97th Cong., 2d Sess., 32-36 (letter, by direction of the Federal Trade Commission, of James C. Miller III, Chairman)).

14

Indeed, the dissent's illogical interpretation of the language this court employed in Hungate may be prompted to avoid the incongruities created by its position. If its stance that the practice of law is exempt from the operation of HRS § 480-2 would not overrule Hungate 's pronouncement that particularly egregious misconduct may subject an opposing counsel to HRS § 480-2(a) liability, then it appears that it would establish not only an exception to HRS § 480-2(a), but also an exception to the exception, neither of which has any expressed basis in the statute's text or legislative history.

15

The dissent argues that in Hungate this court "expressly distinguished between real estate brokers and attorneys with regard to" HRS 480-2(a) liability, citing language in which we noted that, unlike a broker, "the role of an attorney involves representing a client's interests against those of an opposing party within an adversary system." Dissent at 144 Hawai'i at 261, 439 P.3d at 213 (quoting 139 Hawai'i at 413, 391 P.3d at 20 ). Yet this analysis by the dissent evinces a one-sized view of legal practice and neglects to consider the role attorneys like Lacy may play in commercial transactions in a business context. In Hungate , we observed that real estate brokers are subject to HRS § 480-2(a) liability because "[s]ellers and purchasers of real estate often utilize and rely on brokers for their expertise and resources, including ... determining pricing of 'comparables' as a basis for negotiations"--in short, "the role of a broker is to provide clients with expertise and resources in real estate transactions." 139 Hawai'i at 412-13, 391 P.3d at 19-20 (some quotations omitted). Here, Lacy was retained for the specific purpose of providing expertise and resources in a commercial transaction, including by providing his opinion regarding the pricing of RLS as compared to comparable businesses. The alleged conduct by Lacy that the Plehos now challenge is analogous to the acts that this court held in Cieri "necessarily" constitute conduct in trade or commerce, and it is unlike that of an opposing counsel conducting a foreclosure.

16

The dissent makes much of decisions by state courts in other jurisdictions holding that their consumer protection statutes contain an implicit exception for "the actual practice of law." Dissent at 144 Hawai'i at 255-56, 439 P.3d at 207-09. To be sure, we have in the past turned to interpretations of other states' consumer protection statutes for guidance in interpreting our own based on their "common genesis in the federal antitrust statutes." Cieri , 80 Hawai'i at 63 , 905 P.2d at 38 . But we have done so only when the decisions are not directly contrary to this court's own precedent and the federal sources the statute expressly instructs us to consider. Further, even were we to turn to other state decisions to guide our analysis, the state statute that we have expressly held to be analogous to our own--indeed, the statute from which we derived our test regarding the specific issue at the heart of this case, see id. at 63-65 , 905 P.2d at 38-40 --is Section 2 of Massachusetts's consumer protection statute, which the dissent acknowledges is interpreted by Massachusetts courts to apply to the practice of law. Dissent at 144 Hawai'i at 256-57, 439 P.3d at 208-09 (citing Brown v. Gerstein , 17 Mass.App.Ct. 558 , 460 N.E.2d 1043 (1984) ). The dissent's reliance on the decisions of other states' courts is thus unavailing.

17

The dissent attempts to bolster its position by incorrectly claiming that our holding will "impose [HRS § 480-2 ] liability upon all aspects of the practice of law," and then speculates that such an interpretation will render malpractice insurance prohibitively expensive. Dissent at 144 Hawai'i at 265, 439 P.3d at 217. The question of whether other aspects of the practice of law occur in the business context is not before us, and we need not now decide the extent of lawyer conduct that is subject to HRS Chapter 480. Yet, as the dissent itself recognizes, Massachusetts's consumer protection statute, which has been held to apply to attorney conduct, is not "broad enough to reach any type of commercial exchange." Dissent at 144 Hawai'i at 265 n.23, 439 P.3d at 217 n.23. The dissent's misgivings about the potential reach of our decision are thus unfounded.

18

It bears repeating that in interpreting the language of HRS § 480-2(a), HRS § 480-2(b) directs us to "give due consideration to the rules, regulations, and decisions of the Federal Trade Commission and the federal courts interpreting section 5(a)(1) of the [FTCA], as from time to time amended." Federal courts have not inserted a practice of law exception into the FTCA that is not contained in the plain text of the statute.

19

Because the unfair or deceptive acts or practices statute is a regulation of general applicability, we need not decide in this case whether directly regulating the legal profession is an exclusive power of the judicial branch. But see, e.g. , HRS § 605-1(c) -(d) (2016) (setting forth qualifications for admission to the bar in addition to those prescribed by this court); HRS § 605-7 (2016) (requiring written authorization from a client for an attorney to compromise, arbitrate, or settle a claim); Heslin v. Connecticut Law Clinic of Trantolo & Trantolo , 190 Conn. 510 , 461 A.2d 938 , 945 (1983) (concluding that the regulation of attorney conduct is in at least some respects a shared power of the judicial and legislative branches).

1

See Randall Scott Hetrick, Unfair Trade Practices Acts Applied to Attorney Conduct: A National Review , 18 J. Legal Prof. 329 , 330 n.7 (1993) (listing consumer protection legislation from all 50 states).

2

Section 5(a)(1) of the Federal Trade Commission Act is codified as 15 U.S.C. § 45 (a)(1).

3

Chapter 481A of the Hawai'i Revised Statutes, entitled the Uniform Deceptive Trade Practice Act, is often referred to as Hawai'i's little FTC act. See, e.g. , Reauthorization of the Federal Trade Commission, 1982 Hearings on S. 1984 Before the Senate Comm. on Commerce, Science, and Transportation, 97th Cong., 2d Sess., 46, n.9 (listing HRS § 481A as Hawai'i's little FTC act). HRS § 480-2, however, is Hawai'i's version of Section 5 of the FTCA. Chapter 481A codifies common law concepts of unfair competition which fall within the purview of Section 5 of the FTCA and HRS § 480-2.

4

See Alaska Stat. § 45.50.471 (a) ; Conn. Gen. Stat. § 42 -110b ; Fla. Stat. § 501.204 (1) ; Ga. Code § 10-1-393 ; Ky. Rev. Stat. § 367.170 ; Me. Rev. Stat. tit. 5, § 207 ; Mont. Code § 30-14-103 ; Neb. Rev. Stat. § 59-1602 ; N.H. Rev. Stat. § 358-A:2 ; N.C. Gen. Stat. § 75-1.1 (a) ; 73 Pa. Stat. § 201-3; 6 R.I. Gen. Laws § 6-13.1-2 ; S.C. Code § 39-5-20(a) ; Vt. Stat. Tit. 9, § 2453 ; Wash. Rev. Code § 19.86.020 ; W. Va. Code § 46A-6-104.

5

It appears Hungate v. Law Office of David B. Rosen , 139 Hawai'i 394 , 391 P.3d 1 (2017), is the only Hawai'i case involving a UDAP claim brought against an attorney. In Hungate , this court declined to recognize a UDAP claim brought against an attorney by an opposing party. 139 Hawai'i at 412-13, 391 P.3d at 19-20 .

6

Goldfarb v. Va. State Bar , 421 U.S. 773 , 95 S.Ct. 2004 , 44 L.Ed.2d 572 (1975) (finding a minimum-fee schedule published by a county bar association and enforced by the state bar violated section 1 of the Sherman Act); Bates v. State Bar of Ariz. , 433 U.S. 350 , 97 S.Ct. 2691 , 53 L.Ed.2d 810 (1977) (holding that attorneys cannot be subjected to a blanket ban on advertising, as the "belief that lawyers are somehow above 'trade' is an anachronism," and publicly eschewing advertising may actually be detrimental to the legal profession); Fed. Trade Comm'n v. Super. Ct. Trial Lawyers Ass'n , 493 U.S. 411 , 110 S.Ct. 768 , 107 L.Ed.2d 851 (1990) (finding a group of lawyers appointed to represent indigent criminal defendants violated FTC section 5(a)(1) by conspiring to fix prices and refusing to accept new assignments); Fed. Trade Comm'n v. Lanier Law, LLC , 194 F.Supp.3d 1238 (M.D. Fla. 2016) (finding attorneys violated FTCA § 5(a)(1), but noting "the [c]ourt is exceedingly skeptical that the superficial work given to these attorneys constitutes the 'practice of law' by any definition"); Fed. Trade Comm'n v. Lucas , 483 Fed.Appx. 378 (9th Cir. 2012) (unpublished dispositions and orders of the Ninth Circuit are not precedent, pursuant to Ninth Circuit Rule 36-3(a) ; Consumer Fin. Prot. Bureau v. Frederick J. Hanna & Assocs., P.C. , 114 F.Supp.3d 1342 (N.D. Ga. 2015) (addressing claims brought under the Fair Debt Collection Practices Act and the Consumer Financial Protection Act, rather than the FTCA); McDevitt v. Guenther , 522 F.Supp.2d 1272 (D. Haw. 2007) (disposing of a 480-2 claim because, as threshold matters, the applicable statute of limitations had run and the damages alleged were speculative).

7

The Heslin Court cited a letter written by the FTC's then-chairman, James C. Miller III, in preparation for a Senate Committee hearing. Heslin , 461 A.2d at 943 . During the same hearing, however, Miller acknowledged that federal guidance is not binding on states' interpretations of their respective consumer protection statutes. Reauthorization of the Federal Trade Commission, 1982 Hearings on S. 1984 Before the Senate Comm. on Commerce, Science, and Transportation, 97th Cong., 2d Sess., 45 (citations omitted).

8

Compare Conn. Gen. Stat. § 42 -110b(a) ("No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.") with HRS § 480-2(a) ("Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are unlawful.").

9

Md. Code Ann., Com. Law § 13-104 (the Consumer Protection Act of Maryland does not apply to "[t]he professional services of a ... lawyer"); N.C. Gen. Stat. Ann. § 75-1.1 (b) (exempting professional services rendered by a member of a learned profession from liability under North Carolina's UDAP statute); Reid v. Ayers , 138 N.C.App. 261 , 531 S.E.2d 231 , 236 (2000) (the statutory "learned profession" exemption to North Carolina's UDAP statute applies when an attorney is acting within the scope of the traditional attorney-client role, but not when the attorney is engaged in the entrepreneurial aspects of legal practice); Ohio Rev. Code Ann. § 1345.01 (for purposes of Ohio's UDAP legislation, " 'Consumer transaction' does not include ... transactions between attorneys ... and their clients"); Tex. Bus. & Com. Code Ann. § 17.49 (c) (Texas's Deceptive Trade Practices-Consumer Protection Act does not "apply to a claim for damages based on the rendering of a professional service, the essence of which is the providing of advice, judgment, opinion, or similar professional skill."); Streber v. Hunter , 221 F.3d 701 (5th Cir. 2000) (the Texas Deceptive Trade Practices Act applies to lawyers, but expressly excludes from liability anything that can be characterized as advice, judgment, or opinion); D.C. Code Ann. § 28-3903 (c)(2)(C) (Washington D.C.'s UDAP statute does not apply to "professional services of clergymen, lawyers, and Christian Science practitioners engaging in their respective professional endeavors").

10

The Majority opinion asserts that these state court decisions are "directly contrary to this court's own precedent and the federal sources the statute expressly instructs us to consider." Majority at 144 Hawai'i at 249 n.16, 439 P.3d at 201 n.16. However, the cases cannot be "directly contrary to this court's own precedent," as the applicability of UDAP liability to the practice of law is a question of first impression before this court. Additionally, as noted in Justice Pearson's concurrence in Short and discussed infra , federal case law does not support the application of UDAP liability to the practice of law. Short v. Demopolis , 103 Wash.2d 52 , 691 P.2d 163 (1984) (Pearson, J., concurring).

11

Though the Hungate court specifically addressed a UDAP claim brought against an attorney by an opposing party, rather than a client, the policy concerns discussed in Hungate apply equally here. Short , 691 P.2d 163 , 172 (Pearson, J., concurring).

12

As noted in Cieri , in the context of real estate transactions, the Massachusetts Supreme Court similarly declined to apply UDAP liability "regardless of the fact the transaction is not in pursuit of the [defendant's] ordinary course of business," holding such liability applies to licensed real estate brokers, but not private sellers. Lantner v. Carson , 374 Mass. 606 , 373 N.E.2d 973 , 977 (1978).

13

Pursuant to HRS § 467-7, "[n]o person ... shall act as [a] real estate broker or real estate salesperson ... without a license previously obtained under and in compliance with [HRS Chapter 467] and the rules and regulations of the real estate commission."

14

The Majority cites Cieri for the assertion that "there is little dispute that, had Lacy simply been a consultant or a similar business professional, many of the services he provided would clearly amount to conduct in trade or commerce under our precedent." Majority at 144 Hawai'i at 245, 439 P.3d at 197. Respectfully, this misconstrues Cieri . Under Cieri , had Lacy been a real estate broker or salesperson actively involved in a real estate transaction, his actions would have clearly amounted to conduct in trade or commerce. Had he been a consultant or a similar business professional, however, whether the services he provided were subject to UDAP liability would have to be determined on a case-by-case analysis of the transaction. Cieri , 80 Hawai'i at 65 , 905 P.2d at 40 .

15

As in Hungate , the Cieri plaintiff was not the defendant's client, but was the other party to the transaction at issue. Cieri , 80 Hawai'i at 57 , 905 P.2d at 32 . Despite this fact, the Cieri court determined the defendant was properly subject to UDAP liability pursuant to HRS § 480-2. Id. at 65 , 905 P.2d at 40 . However, in Hungate , this court declined to apply UDAP liability to the defendant attorney. Hungate , 139 Hawai'i at 413 , 391 P.3d at 20 . Thus, it is clear that our holding in Hungate turned on the defendant's unique role as an attorney, not the fact that he was being sued by an opposing party.

16

Article VI, section 7 is identical to article V, section 6 of the 1959 Hawai'i Constitution ("The supreme court shall have power to promulgate rules and regulations in all civil and criminal cases for all courts relating to process, practice, procedure and appeals, which shall have the force and effect of law."). Haw. Const. of 1959, art. V, § 6.

17

What is now article VI, section 7 of the Hawai'i Constitution was drafted by the delegates to the Constitutional Convention of 1950. It was approved by the legislature and a plebiscite vote later that year, and became effective in 1959 upon Hawai'i's admission to the Union. Harold S. Roberts, Proceedings of the Constitutional Convention of Hawai'i of 1950, Volume I Journal and Documents , Preface at xi (1960). HRS § 480-2 was not enacted until 1965. 1965 Sess. Laws Act 129, at 176-77.

18

The legislature first added § 480-2 's prohibition on "[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce" to the Hawai'i Antitrust Act in 1965. 1965 Haw. Sess. Laws Act 129, at 176-77. The consumer protection statute has been amended over the years; however, none of the amendments addressed the practice of law. For example in 1987, the legislature defined class actions and made several changes to chapter 480. 1987 Haw. Sess. Laws Act 274, at 837-840; H. Stand. Comm. Rep. Nos. 457 and 575, in 1987 House Journal, at 1315, 1371; S. Conf. Comm. Rep. No. 105, in 1987 Senate Journal, at 872-73; S. Stand. Comm. Rep. No. 1056, in 1987 Senate Journal, at 1344-45. In 1988, the legislature amended HRS § 480-2 to specify that Hawai'i courts must "give due consideration" to the Federal Trade Commission decisions and federal courts interpreting a comparable federal consumer protection statute. See H. Stand. Comm. Rep. No. 483-88, in 1988 House Journal, at 1024; S. Stand. Comm. Rep. Nos. 2329 and 2635, in 1988 Senate Journal, at 993-94, 1118. In 2002, the legislature amended the consumer protection statute to permit both private actions for unfair methods of competition and private indirect purchaser antitrust class actions. 2002 Haw. Sess. Laws Act 229, at 915-918; H. Stand. Comm. Rep. No. 1118, in 2002 House Journal, at 1665-66; S. Stand. Comm. Rep. Nos. 448 and 931, in 2002 Senate Journal, at 1116-17, 1295. The legislative history therefore provides no indication that the legislature intended for UDAP liability to extend to the practice of law.

19

The Constitutional Convention's Committee on the Judiciary explained the significance of the judiciary's role in our constitutional system:

Your Committee on [the] Judiciary ... recognizes that it is dealing with a coordinate branch of government. It is the branch to which is entrusted the safe guarding of our civil liberties. Without a strong Judiciary, democratic processes would speedily disintegrate and the rights of the individual might be swallowed up in an all powerful state.

Stand. Comm. Rep. No. 37 in 1 Proceedings of the Constitutional Convention of Hawai'i of 1950, at 173 (1960).

20

Additionally, in Hungate , this court recognized that "the unique nature of the attorney-client relationship warrants distinguishing the role of [real estate] broker and attorney for purposes of [UDAP liability under HRS § 480-2 ]." Hungate , 139 Hawai'i at 413 , 391 P.3d at 19 (emphasis added). The legislature is presumed to know of this court's interpretations of statutory language, and legislative bodies commonly "enact laws to circumvent judicial constructions deemed ... contrary to the true meaning of the statute construed." State v. Casugay-Badiang , 130 Hawai'i 21 , 27, 305 P.3d 437 , 443 (2013) (citations omitted); Terr. v. Ota , 36 Haw. 80 , 98-99 (1942). However, the legislature has not amended HRS § 480-2 or indicated any dissatisfaction with this court's interpretation of the statute. As such, this court's determination that UDAP liability does not apply to attorneys as it does to real estate brokers has the tacit approval of the legislature. Cf. State v. Hussein , 122 Hawai'i 495 , 529, 229 P.3d 313 , 348 (2010).

21

HRPC Rule 8.4 ("It is professional misconduct for a lawyer to: ... commit a criminal act that reflects adversely on the lawyer's honesty, trustworthiness, or fitness as a lawyer in other respects; ... engage in conduct involving dishonesty, fraud, deceit or misrepresentation ..."); Hungate , 139 Hawai'i at 413 n.22, 391 P.3d at 20 n.22 (an opposing party cannot recover against an attorney under HRS § 480-2, but attorneys may still be held liable for patently illegal activities conducted on behalf of the attorney's client); Giuliani , 1 Haw. App. at 383-84 , 620 P.2d at 736-37 ("that an attorney representing a client may be held personally liable to an adverse party or a third person who sustains injury as a result of an attorney's intentional tortious acts is well settled."); Higa v. Mirikitani , 55 Haw. 167 , 517 P.2d 1 (1973) (legal malpractice suits are hybrids of tort and contract).

22

The Majority attempts to analogize UDAP liability to criminal liability in order to show that the imposition of UDAP liability upon the actual practice of law, like criminal prosecution, "does not interfere with this court's regulation of the practice of law." Majority at 144 Hawai'i at 251, 439 P.3d at 203.

The defendant in Short similarly argued that if application of the CPA to lawyers violates the court's regulatory power, criminal laws could not be applied to attorneys. Short , 691 P.2d at 170 . However, the Washington Supreme Court rejected this argument as to the actual practice of law, holding that UDAP liability applies only to the entrepreneurial aspects of law under Washington's CPA. Id. at 170-71 .

I agree. Unlike the imposition of UDAP liability on the actual practice of law, criminal prosecution is not duplicative or unnecessary. While this court may discipline an attorney professionally for the commission of a crime, it does not have authority to prosecute and sentence the attorney for that crime. No other framework exists to hold attorneys personally responsible for crimes they may commit. In contrast, this court's close regulation of the practice of law, as well as the imposition of civil liability, adequately deter non-criminal attorney misconduct and impose appropriate professional discipline upon attorneys, hold attorneys personally liable for their misconduct, and provide aggrieved clients with sufficient legal recourse.

23

As noted in Cieri , even Massachusetts' UDAP statute is not "broad enough to reach any type of commercial exchange, regardless of the nature of the transaction or the character of the parties involved." Cieri , 80 Hawai'i at 63 , 905 P.2d at 38 (citing Lantner , 373 N.E.2d at 977 ).