Kawaguchi v. Evelyn Wong in her capacity as the appointed Personal Representative of the Estate of Evelyn K. Scholes and the sole Trustee of the restated The Scholes Family Trust dated September 18, 2003

545 P.3d 576, 154 Haw. 87

• Court: Hawaii Intermediate Court of Appeals
• Decided: March 25, 2024
• Docket: CAAP-18-0000132
• Status: Published

Opinion

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Electronically Filed Intermediate Court of Appeals CAAP-XX-XXXXXXX 25-MAR-2024 10:59 AM Dkt. 125 SO

NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

KIYOSHI KAWAGUCHI, Plaintiff/Counterclaim Defendant-Appellant, v. EVELYN WONG, in her capacity as the appointed Personal Representative of the Estate of EVELYN K. SCHOLES and the sole Trustee of the restated The Scholes Family Trust dated September 18, 2003; EVELYN WONG, as Trustee of the restated The Scholes Family Trust dated September 18, 2003, Defendants/Counterclaimants-Appellees, and JOHN DOES 1019; JANE DOES 1-10; and DOE ENTITIES 1-10, Defendants

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT (CIVIL NO. 15-1-0743)

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

Plaintiff/Counterclaim Defendant-Appellant Kiyoshi

Kawaguchi (Kawaguchi) appeals from the January 25, 2019

Amended Final Judgment (Amended Judgment) entered by the Circuit

Court of the First Circuit (Circuit Court),1 in favor of

Defendants/Counterclaimants-Appellees Evelyn K. Scholes (Mrs.

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 NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Scholes) and Evelyn Wong (Wong), individually and as Co-Trustees

of the restated The Scholes Family Trust dated September 18, 2003

(Scholes Family Trust) (collectively, the Trustees).2 Kawaguchi

also challenges the Circuit Court's: (1) February 7, 2018

Amended Order Granting [the Trustees'] Non-Hearing Motion for

Award of Attorneys' Fees and Costs (Amended Fees Order); (2)

October 19, 2017 Order Granting Motions in Limine Nos. 3-4 (Order

Granting Motions in Limine); (3) October 19, 2017 Order Granting

Motion to Use Perpetuation Deposition Testimony of [Mrs. Scholes]

and Excuse Her from Attending Trial Due to Her Advanced Age,

Illness, and Infirmities (Order re Perpetuation Deposition); (4)

December 18, 2017 Findings of Fact [(FOFs)], Conclusions of Law

[(COLs)], and Judgment in Favor of [the Trustees] and Against

[Kawaguchi] (FOF/COL/Judgment); (5) September 27, 2017 Order

Granting [Trustees] Motion to Strike [Kawaguchi]'s Jury Demand

(Order Striking Jury Demand); (6) December 8, 2016 Order Re:

Motion for Partial Summary Judgment (First Order re PSJ);3 (7)

February 16, 2017 Order Granting Motion for Judgment on the

Pleadings and/or for Partial Summary Judgment as to Counts V-VII

(Second Order re PSJ); (8) January 8, 2016 Order Re: Motion to

Dismiss First Amended Complaint; and (9) October 2, 2015 Order

2 Pursuant to this court's November 24 2023 order, Wong, as personal representative of the Estate of Mrs. Scholes and the sole trustee of the Scholes Family Trust, is substituted for Mrs. Scholes. For clarity, we nevertheless refer to Mrs. Scholes herein. 3 The Honorable Karl K. Sakamoto presided.

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Granting in Part and Denying in Part [Kawaguchi]'s Motion for

Leave to File First Amended Complaint.

Kawaguchi raises four points of error on appeal,

contending that the Circuit Court erred in: (1) denying

Kawaguchi his right to a jury trial on his unjust enrichment

claim or, alternately, if Kawaguchi's unjust enrichment claim was

not entitled to a jury trial, the court erred in awarding the

Trustees attorneys' fees; (2) granting the Trustees partial

summary judgment on Kawaguchi's breach of contract claim and

claims arising from his denial of execution of a 2003 deed; (3)

allowing Mrs. Scholes to testify via a perpetuation deposition;

and (4) crediting the Trustees with rent not paid by Kawaguchi

from 1990 through 2014.

Upon careful review of the record and the briefs

submitted by the parties, and having given due consideration to

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

resolve Kawaguchi's points of error as follows:

We will address Kawaguchi's arguments concerning the

Circuit Court's summary judgment rulings before we address the

striking of Kawaguchi's demand for a jury trial.

(1) Kawaguchi argues that the Circuit Court erred in

dismissing his breach of contract claim because there was

evidence of a contract between Kawaguchi and Mr. and Mrs. Scholes

(Kawaguchi's mother and her husband) (the Scholes), whereby the

Scholes would transfer the subject Property (Property) to

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Kawaguchi in exchange for him making improvements to the

Property. The Trustees moved for summary judgment on this claim

on the grounds that Kawaguchi could not establish essential terms

of the purported oral agreement.

To be enforceable, a contract must be certain and

definite as to its essential terms, and a party seeking to

enforce an oral contract to convey real property must prove its

existence and terms by clear and convincing evidence. Boteilho

v. Boteilho, 58 Haw. 40, 42, 564 P.2d 144, 146 (1977). A binding

contract requires "a meeting of the minds on all essential

elements or terms." Earl M. Jorgensen Co. v. Mark Constr., Inc.,

56 Haw. 466, 470, 540 P.2d 978, 982 (1975) (citations omitted).

The Circuit Court dismissed the breach of contract

claim with prejudice based on the complete lack of essential

terms, including how title to the Property would supposedly

transfer to Kawaguchi. The only evidence in support of an

agreement was Kawaguchi's Declaration stating that, sometime

between 1980 and 1985, the Scholes asked him to improve the

Property, and in consideration for that, Kawaguchi would be given

the Property. Kawaguchi averred that, although it was unstated,

it was "understood" that he would get the Property after they

died. At the hearing on the summary judgment motion, the Circuit

Court noted, for example, that there was no evidence of how title

would pass to Kawaguchi. Upon review of, inter alia, Kawaguchi's

Declaration, we conclude that the Circuit Court did not err in

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granting summary judgment against Kawaguchi on the breach of

contract claim.

Kawaguchi further argues that the Circuit Court erred

in granting partial summary judgment in favor of the Trustees on

Counts V-VII4 of the First Amended Complaint because there were

clearly disputed questions of fact on the issue of whether or not

Kawaguchi had signed the August 2003 Deed. Count VI seeks a

declaratory judgment determining, inter alia, that the signature

on the August 2003 Deed is not Kawaguchi's and Kawaguchi did not

intend to or agree to divest himself of his interest in the

Property. Pursuant to Hawaii Revised Statutes (HRS) § 632-1(a)

(2016), circuit courts can award declaratory relief where an

actual controversy exists between contending parties. Here, in

his Declaration, Kawaguchi specifically denies under oath that

his signature was on the Deed. Kawaguchi also asserts that his

signature does not appear in the notary public's record book.5

The Trustees argue that summary judgment was properly

granted as to Counts V-VII on the grounds that these counts

assert remedies, rather than legally-cognizable claims, and that

the First Amended Complaint fails to state a claim for fraud with

4 Count V sought Rescission of the 2003 Deed, Count VI was for Declaratory Relief that the 2003 Deed did not divest Kawaguchi of any interest in the Property, and Count VII was for Injunctive Relief prohibiting Kawaguchi's removal from the Property. 5 Although the notary public avers that she does not recall the transaction, in accordance with her customary and uniform practice, she would not have notarized the document without verifying each signatory's identity and any absence of an entry for Kawaguchi in her notary book would have been the result of an oversight.

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particularity pursuant to Hawai#i Rules of Civil Procedure (HRCP)

Rule 9(b). However, the First Amended Complaint alleges, inter

alia, that in 1992, by Warranty Deed, Kawaguchi received an

interest as a joint tenant in the Property, that in August of

2003, a Warranty Deed was signed and recorded transferring his

interest in the Property, that he did not sign the August 2003

Warranty Deed or consent to divesting his interest in the

Property, that he received no consideration for his interest in

the Property, and that he seeks a declaratory judgment finding

and concluding that the signature on the August 2003 Deed is not

his.

The Trustees broadly argue that a claim for forgery

sounds in fraud and must state with specificity the "who, what,

when, where, and how" of the alleged forgery.6 The only

allegation that is perhaps somewhat lacking is "who" allegedly

and specifically signed the August 2003 Deed, if not Kawaguchi.

Given the declaratory nature of Kawaguchi's claim, we cannot

conclude that Kawaguchi's failure to identify the particular

individual who allegedly signed his name to the August 2003 Deed

renders his allegations to be insufficient. Whether or not the

signature on the August 2003 Deed was a forgery was a question of

fact. See Iaea v. Iaea, 59 Haw. 648, 649, 586 P.2d 1015, 1016

6 "'Forgery' is defined as 'a false or altered document made to look genuine by someone with the intent to deceive.'" Scholes v. Kawaguchi, 142 Hawai#i 360, 368 n.9, 419 P.3d 1029, 1037 n.9 (Haw. App. 2017) (citation omitted).

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(1978). Here, Kawaguchi's Declaration raised a genuine issue of

material fact with respect to the allegations stated in Count VI

of the First Amended Complaint.

Counts V and VII state certain equitable remedies that

Kawaguchi seeks with respect to his claim that he did not sign

the August 2003 Deed. The Circuit Court did not err in

dismissing Counts V and VII as independent claims. However, the

dismissal of them "with prejudice" implies that Kawaguchi may

not, for example, seek to rescind a forged deed, to have it

declared void and/or voidable, as set forth in Counts V, and/or

to enjoin further conveyances of the Property, as set forth in

Count VII. We conclude that the Circuit Court erred in

dismissing Counts V and VII without stating that their dismissal

is without prejudice to any remedy that might be sought upon

establishment of the claim alleged in Count VI.

(2) Next, we return to Kawaguchi's argument that he

was improperly denied his right to a jury trial because Count III

was not a purely equitable claim. In addition to repeating and

realleging previous allegations, Count III (Unjust Enrichment)

states: Defendants will be unjustly enriched if they are not required to pay [Kawaguchi] for the increase in value which [Kawaguchi's] work caused to the [Property], the interest which he held in the [Property] prior to the recordation of the 2003 Deed, or to transfer the [Property] back to him.

Article 1, section 13 of the Hawai#i Constitution

mandates that "[i]n suits at common law where the value in

controversy shall exceed five thousand dollars, the right of

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trial by jury shall be preserved." In re Marn Fam., 141 Hawai#i

1, 8, 403 P.3d 621, 628 (2016). "The test to determine whether a

suit is at common law is . . . whether the cause of action seeks

legal or equitable relief." Id. (citation omitted). The nature

of the issues and the "legal" or "equitable" remedy sought

determines whether a jury trial is warranted. See Wooddell v.

Int'l Bhd. of Elec. Workers, Local 71, 502 U.S. 93, 97 (1991).

Kawaguchi cites Porter v. Hu, 116 Hawai#i 42, 169 P.3d

994 (App. 2007), for the proposition that unjust enrichment

claims can arise in contract and argues that his unjust

enrichment claim here arose in contract. Kawaguchi's unjust

enrichment claim sought damages for an "increase in value" of the

Property due to his work or the value of the interest he had in

the Property prior to the August 2003 Deed.7 Neither of these

alternatives sounds in contract under the facts and circumstances

alleged in this case. We conclude that the Circuit Court did not

err in rejecting his argument that he was entitled to a jury

trial on Count III.8

Kawaguchi alternatively argues that if Count III is not

contractual in nature, attorneys' fees should not have been

7 His reference to a transfer of the Property back to him – in other words, rescission or voiding of the August 2003 Deed – clearly implies an equitable remedy, not a legal one. 8 The Circuit Court dismissed Count VI prior to striking Kawaguchi's demand for a jury trial. Therefore, no arguments were before the Circuit Court concerning, and the Circuit Court did not rule on, whether Count VI is triable to a jury. This Summary Disposition Order does not address the issue of whether Kawaguchi may be entitled to trial by jury on Count VI.

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awarded against him pursuant to HRS § 607-14 (2016). This

argument ignores Count I of his First Amended Complaint seeking

specific performance or damages for breach of contract. This

alternative argument is also without merit.

(3) Kawaguchi argues that the Circuit Court erred in

its Order Re Perpetuation Deposition because the Trustees'

support for the motion included declarations from medical experts

that were then ten months old, and Kawaguchi had no chance to

cross-examine the experts.

HRCP Rule 32 governs the use of depositions in court

proceedings, and provides that the deposition of a witness may be

used by a party for any purpose if the court finds, inter alia,

that the witness is unable to attend or testify because of age,

illness, or infirmity. HRCP Rule 32(a)(3)(C). Here, the Circuit

Court found, based on her doctor's declaration testimony, that

Mrs. Scholes was 90 years old, had advanced Parkinson's disease,

required 24-hour supervision, and was at serious risk for falls.

Kawaguchi does not contest any of these findings, but argues that

he should have been allowed to cross-examine the doctor-

declarant, as well as Mrs. Scholes's therapist. Kawaguchi

further argues that these findings are insufficient to support

the Circuit Court's determination that Mrs. Scholes was unable to

testify at trial, and its decision to allow the transcript of

Mrs. Scholes's perpetuation deposition at trial. This argument

is without merit. Mrs. Scholes's advanced age, serious illness,

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and other infirmities were sufficient bases to support the

exercise of the Circuit Court's discretion under HRCP Rule

32(a)(3)(C).

(4) Finally, Kawaguchi argues that after the

completion of the bench trial on the remaining issues, the

Circuit Court erred in finding, in FOF 30(J)(vii), that benefits

flowed to Kawaguchi for rent not paid by him from 1990-2014, and

offset them against the value of Kawaguchi's work on the

Property. Kawaguchi contends that the law in Hawaii is clear

that where a service is provided by a member of the family, the

service is presumed to be gratuitous absent an express contract,

and there was no evidence that the Scholes asked Kawaguchi to pay

rent. Kawaguchi fails to identify where in the record he made

this argument or objected to the Circuit Court's consideration on

imputed rents as an offset. This argument will be disregarded in

accordance with Hawai#i Rules of Appellate Procedure Rule

28(b)(4)(iii).

For these reasons, the Circuit Court's January 25, 2019

Amended Judgment is affirmed in part and vacated in part. The

Circuit Court's dismissal of Count VI is vacated, and the

dismissals of Counts V and VII are vacated to the extent that the

dismissals would limit Kawaguchi's remedy with respect to Count

VI. The Amended Judgment is otherwise affirmed. This case is

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remanded to the Circuit Court for further proceedings consistent

with this Summary Disposition Order.

DATED: Honolulu, Hawai#i, March 25, 2024.

On the briefs: /s/ Katherine G. Leonard Acting Chief Judge Samuel P. King, Jr., for Plaintiff/Counterclaim /s/ Keith K. Hiraoka Defendant-Appellant. Associate Judge

John D. Zalewski, /s/ Clyde J. Wadsworth Michelle J. Chapman, Associate Judge (Case Lombardi & Pettit), for Defendants/Counterclaimants- Appellees.