Great Hawaiian Financial Corp. v. Aiu

116 F.R.D. 612, 9 Fed. R. Serv. 3d 140
CourtDistrict Court, D. Hawaii
DecidedAugust 5, 1987
DocketCiv. Nos. 85-0140, 85-0144
StatusPublished
Cited by24 cases

This text of 116 F.R.D. 612 (Great Hawaiian Financial Corp. v. Aiu) is published on Counsel Stack Legal Research, covering District Court, D. Hawaii primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Great Hawaiian Financial Corp. v. Aiu, 116 F.R.D. 612, 9 Fed. R. Serv. 3d 140 (D. Haw. 1987).

Opinion

MEMORANDUM DECISION ASSESSING SANCTIONS AGAINST PLAINTIFF AND PLAINTIFF’S COUNSEL

PENCE, Senior District Judge.

The matter submitted is whether the court should award sanctions to the Innocent Investors for their attorneys’ fees incurred in opposing Great Hawaiian Financial Corporation’s (“GHFC”) motion for reconsideration of this court’s order granting summary judgment to all defendants on Count I of the complaint.

Factual Background

Norman Inaba and two corporations controlled by him, GHFC and Pyramid Inc., formed Hilolani Acres Joint Venture (“HAJV”) in the early 1960’s. The sole purpose of this partnership was to develop, promote, and sell the Kaumana City Property. The partnership was controlled by four managers, Norman Inaba, Chuck Shima, Masayuki Tokioka, and Hirotoshi Yamamoto. HAJV also had thirty plus passive general partners, including those defendants represented by Mr. Arthur Reinwald (“the Innocent Investors”).

On December 31, 1971, without notice to the passive partners, the managers conveyed the Kaumana City Property to Great Hawaiian Mortgage Corporation, wholly owned by Inaba, and the three managers other than Inaba withdrew from any connection with the partnership. Thereafter, GHFC made a number of loans to HAJV, evidenced by nineteen promissory notes, and billed HAJV for office rent.

GHFC sued all partners of HAJV, asserting their joint and several liability for the debts. Count I of the complaint alleges the primary liability of HAJV for the loans and rent, and the resulting liability of all defendants as partners. Count I is the only count against the Innocent Investors.

Procedural History

The Innocent Investors moved for summary judgment and all other defendants joined. On December 3, 1986, this court granted summary judgment to all defendants except Norman Inaba as to count I. This court held that HAJV had been dis[616]*616solved by the events of December 31, 1971, and therefore, the former partners could not be liable for any obligations of HAJV that were not incurred in the'winding up of the partnership.

On December 16, 1986, GHFC filed a motion for reconsideration of the summary judgment order, or in the alternative, certification under Fed.R.Civ.P. 54(b). The Innocent Investors filed a memorandum in opposition to reconsideration of the summary judgment order, but did not oppose certification. The other defendants joined.

On February 26, 1987, this court denied the motion for reconsideration and granted the motion for certification. After some discussion among the parties, a final judgment order was entered on March 24, 1987. On March 27, the Innocent Investors brought a motion to recover fees and costs as prevailing parties, in which they also moved for an award of $1,872 as sanctions for GHFC’s frivolous motion to reconsider.

After two hearings, the court has decided the matter of attorneys’ fees and costs for prevailing parties. However, the court took under advisement the matter of sanctions against GHFC, or its attorneys. GHFC opposes the request for sanctions. The Merits of the Motion for Reconsideration

Although the court has already denied the motion to reconsider, the merits of the motion are relevant to the question of sanctions. A motion for reconsideration must do two things. First, it must demonstrate some reason why the court should reconsider its prior decision. Second, it must set forth facts or law of a strongly convincing nature to induce the court to reverse its prior decision. Courts have distilled three major grounds justifying reconsideration: (1) an intervening change in controlling law; (2) the availability of new evidence; and (3) the need to correct clear error or prevent manifest injustice. Kern-Tulare Water Dist. v. City of Bakersfield, 634 F.Supp. 656, 665 (E.D.Cal.1986); see also Major v. Benton, 647 F.2d 110, 112 (10th Cir.1981).

GHFC did not state the grounds upon which it desired this court to reconsider its order. • Although it offered some additional evidence and presented some additional arguments, essentially this motion simply reargued GHFC’s prior positions, which this court rejected in granting summary judgment. Thus, the motion could have been rejected on the basis that it failed to even assert a reason why this court should reconsider its order. The court inferred from the motion that the grounds for reconsideration were newly discovered evidence and judicial mistake resulting in a clear error of law. In opposing sanctions, GHFC’s counsel now states that “new evidence” was the basis for the motion.

A. Newly Discovered Evidence

The “newly discovered evidence” GHFC submitted in support of the motion comprised four exhibits and one affidavit not previously presented. The exhibits are excerpts of deposition testimony of Franklin Tokioka taken August 14, 1986, of Lionel Tokioka taken August 18, 1986, and of Rodney Inaba taken July 16, 1985, and an insurance policy dated October 8, 1980. The affidavit is that of Tamotsu Tanaka.

To support a motion for reconsideration of a grant of summary judgment based upon newly discovered evidence, the movant is obliged to show not only that this evidence was newly discovered or unknown to it until after the hearing, but also that it could not with reasonable diligence have discovered and produced such evidence at the hearing. Engelhard Industries, Inc. v. Research Instrumental Corp., 324 F.2d 347, 352 (9th Cir.1963), cert. denied, 377 U.S. 923, 84 S.Ct. 1220, 12 L.Ed.2d 215 (1964). If the proffered evidence was available before disposition of the motion for summary judgment, then as a matter of law the movant is not entitled to reconsideration based upon that evidence. Trentacosta v. Frontier Pac. Aircraft Industries, 813 F.2d 1553, 1557-58 n. 4 (9th Cir.1987); Frederick S. Wyle P.C. v. Texaco, Inc., 764 F.2d 604, 609 (9th Cir.1985).

[617]*617Here, GHFC did not, and does not, assert that any of its “new” evidence was unavailable before the hearing of the summary judgment motion on September 18, 1986, or attempt to explain why this evidence was not offered before. The depositions had been taken one month and fourteen months before the hearing of the motion for summary judgment. The insurance policy had apparently been in GHFC’s possession since 1980. Tanaka apparently was Norman Inaba’s lawyer and testified in the affidavit concerning events transpiring in 1971. There is no showing that any of this evidence was unavailable to GHFC at the time of the hearing on the summary judgment motion. In fact, the evidence on its face establishes that it was readily available.

As a matter of law, GHFC may not move for reconsideration based upon the profferred evidence. Since GHGC’s counsel now asserts that “new evidence” was the sole ground for the motion to reconsider, the motion clearly had no basis in law.

B. Clear Error of Law

Another possible ground for the motion to reconsider, is clear error of law.

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Cite This Page — Counsel Stack

Bluebook (online)
116 F.R.D. 612, 9 Fed. R. Serv. 3d 140, Counsel Stack Legal Research, https://law.counselstack.com/opinion/great-hawaiian-financial-corp-v-aiu-hid-1987.