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Electronically Filed Supreme Court SCWC-12-0000315 28-FEB-2014 11:33 AM
SCWC-12-0000315
IN THE SUPREME COURT OF THE STATE OF HAWAI#I
DONALD EDWARD KROG, in his capacity as Trustee of the Donald Edward Krog Living Trust, Dated March 25, 2010, Respondent/Plaintiff-Appellee,
vs.
ELEANA UMILANI KOAHOU and YVONNE MOKIHANA KEAHI, Petitioners/Defendants-Appellants.
CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS (CAAP-12-0000315; CIV. NO. 11-1-1697-08)
MEMORANDUM OPINION (By: Nakayama, Acting C.J., McKenna, J., and Circuit Judge Nacino, in place of Recktenwald, C.J., recused, with Acoba, J., concurring separately, with whom Pollack, J., joins)
Respondent/Plaintiff-Appellee Donald Edward Krog, in
his capacity as trustee of the Donald Edward Krog Living Trust
(Respondent) purchased the former home of Petitioners/Defendants-
Appellants Eleana Umilani Koahou and Yvonne Mokihana Keahi
(Petitioners) from a third party following a non-judicial *** NOT FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER ***
foreclosure sale. Petitioners refused to vacate the property
after the sale. Respondent filed a complaint for trespass and
ejectment and a motion for summary judgment in the Circuit Court
of the First Circuit (circuit court). The circuit court granted
Respondent’s motion for summary judgment, entered its final
judgment and writ of ejectment in favor of Respondent, and
ordered Petitioners to pay Respondent damages for their trespass
and wrongful possession as well as attorneys’ fees and costs
under the theory of assumpsit.
The Intermediate Court of Appeals (ICA) affirmed the
circuit court’s grant of summary judgment and award of damages
and attorneys’ fees and costs in a Summary Disposition Order
(SDO). Petitioners filed an application for writ of certiorari
to this court challenging the damages and attorneys’ fees and
costs awards. We conclude that the circuit court’s award of
damages was not erroneous. However, we hold that the circuit
court erred in awarding attorneys’ fees and costs to Respondent
because the court lacked the requisite jurisdiction to order such
an award and because there was no legal justification for the
award.
I. BACKGROUND
In 2009, Petitioners received a notice of default from
MetLife Bank, N.A. (MetLife) requesting that Petitioners
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immediately pay $6,261.06 in past due mortgage payments on their
property at 1721 Akaakoa Street, Kailua, Hawai#i 96734 (the
Property). On November 17, 2010, MetLife recorded a notice of
mortgagee’s non-judicial foreclosure under power of sale. At a
public auction on January 6, 2011, Scott Kim purchased the
Property for $521,000.00. Petitioners did not challenge the
foreclosure sale.
Respondent purchased the Property from Kim for
$546,677.08 plus all associated costs. Kim deeded the Property
to Respondent, and escrow closed on February 18, 2011. However,
Petitioners’ continued occupation of the Property prevented
Respondent from taking possession.
On August 8, 2011, Respondent filed a complaint for
ejectment and trespass in the circuit court. Respondent
requested the ejectment of Petitioners, damages “in an amount
reflecting the reasonable value of the Property for the time
[Respondent] ha[d] been deprived of possession,” and costs and
attorneys’ fees.
On November 21, 2011, Respondent filed a motion for
summary judgment arguing that there were no genuine issues of
material fact regarding his possession of legal title to the
Property. In a declaration attached to his motion, Respondent
stated: “[I]t is my opinion as the owner of the Property that a
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fair and reasonable rental rate for the Property would be
$2,500.00 per month.”
At a hearing on December 21, 2011, the circuit court1
granted Respondent’s motion for summary judgment as to all counts
contained in the complaint. On January 26, 2012, the court
entered its order granting Respondent’s motion and concluding
that Respondent was the owner of the Property.
On February 17, 2012, Petitioners filed a motion for
stay pending appeal to the ICA. Petitioners also stated that
“[s]hould the Court require the posting of a supersedeas bond,
said bond should be based upon the reasonably certain damages for
delay that Plaintiff would incur by being deprived in the future
of possession of the property during the pendency of this
appeal.” (Emphasis omitted). To aid in the calculation of these
damages, Petitioners filed a declaration from real estate broker
Neil Sauvage stating that his “professional rental valuation
establish[ed] the fair monthly rental value of the property to be
$2,200 to $2,400 per month.”
On March 5, 2012, Respondent filed a memorandum in
opposition to the motion for a stay and additionally argued that
he was entitled to an award of attorneys’ fees and costs. In
that motion, Respondent contended that Petitioners’ proposed
1 The Honorable Karl K. Sakamoto presided.
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supersedeas bond was insufficient because, as the prevailing
party, Respondent was entitled to an award of attorneys’ fees and
costs pursuant to HRS § 667-33(c) (Supp. 2011).2 Respondent
stated, “Although [Respondent] has not yet filed his motion for
an award of attorneys’ fees and costs, the language of the
statute makes it clear that such an award is mandatory.”
(Emphasis added).
In their reply memorandum to the motion for a stay,
filed March 9, 2012, Petitioners argued that Respondent was not
entitled to an award of attorneys’ fees because this was not an
action in assumpsit and HRS chapter 667 was similarly
inapplicable.
On March 9, 2012, the circuit court entered its final
judgment in favor of Respondent and against Petitioners. The
circuit court concluded that Respondent was the owner of the
2 HRS § 667-33(c) provided then, as it does now:
The mortgagor and any person claiming by, through, or under the mortgagor and who is remaining in possession of the mortgaged property after the recordation of the affidavit and the conveyance document shall be considered a tenant at sufferance subject to eviction or ejectment. The purchaser may bring an action in the nature of summary possession under chapter 666, ejectment, or trespass or may bring any other appropriate action in a court where the mortgaged property is located to obtain a writ of possession, a writ of assistance, or any other relief. In any such action, the court shall award the prevailing party its reasonable attorney’s fees and costs and all other reasonable fees and costs, all of which are to be paid for by the non-prevailing party.
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Property and ordered Petitioners to pay Respondent “$26,400 as
damages for their trespass and wrongful possession of the
Property from February 18, 2011 through December 21, 2011” and
an additional $2,400 a month until Petitioners returned
possession of the Property to Respondent. The circuit court also
issued a writ of ejectment against Petitioners.
On March 13, 2012, the circuit court held a hearing on
Petitioners’ motion for a stay. During the hearing, the circuit
court denied Petitioners’ motion. The circuit court also stated
that Petitioners’ proposed supersedeas bond of monthly payments
of $2,400 was insufficient and that attorneys’ fees and costs
should be included in the calculation. Petitioners responded by
reiterating their argument that there was no contractual or
statutory basis for the award of attorneys’ fees and costs.
Respondent stated: “[W]e’ll be separately filing a motion for an
award of attorney’s fees and costs. We believe there’s
substantial case law that says in actions of this nature, in the
nature of ejectment, that attorney’s fees and costs are
awardable.” (Emphasis added).
By minute order of March 14, 2012, the circuit court
set the supersedeas bond at the amount of damages already awarded
($26,400), plus rental income for one year ($28,800), plus
Respondent’s attorneys’ fees and costs incurred from the
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initiation of litigation to the entry of final judgment. The
circuit court ordered Respondent’s counsel to “turn over the
information necessary to compute the attorneys’ fees and costs
component of the supersedeas bond.” (Capitalization omitted).
On March 23, 2012, Respondent filed a memorandum
regarding the calculation of the supersedeas bond in which he
calculated that he had incurred $38,733.50 in attorneys’ fees and
$2,775.52 in costs.
On March 29, 2012, Petitioners filed their notice of
appeal to the ICA.
The circuit court did not enter its order awarding
Respondent $40,558.62 in attorneys’ fees and $968.87 in costs
until April 27, 2012. This order also denied Petitioners’
February 17, 2012 motion for a stay pending appeal.
On appeal to the ICA, Petitioners argued that the
circuit court had erred in (1) granting Respondent’s motion for
summary judgment despite genuine issues of fact, (2) awarding
damages without a valid legal or evidentiary basis, and (3)
awarding attorneys’ fees and costs where Respondent failed to
timely file a motion for attorneys’ fees and costs.
In its brief SDO, the ICA concluded that Petitioners’
appeal was without merit and affirmed the circuit court’s orders
granting summary judgment and final judgment in favor of
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Respondent. Krog v. Koahou, CAAP-12-0000315, 2013 WL 2149717, at
*1 (App. May 17, 2013) (SDO).
On August 21, 2013, Petitioners filed an application
for writ of certiorari with this court arguing that the ICA erred
in affirming the circuit court’s award of damages and attorneys’
fees and costs.
II. DISCUSSION
A. The circuit court’s award of damages to Respondent was not clearly erroneous
In its final judgment, the circuit court awarded
Respondent damages due to Petitioners’ “trespass and wrongful
possession of the Property.” “As in other tort actions, the
general rule is that the measure of damages in trespass actions
is such sum as will compensate the person injured for the loss
sustained, or for damages that have occurred or can with
certainty be expected to occur.” 87 C.J.S. Trespass § 132 (2013)
(footnotes omitted). Damages are calculated as “the sum
necessary to make the victim whole,” including damages for “loss
of use of the property.” Id.; see also Smith v. Bottomley, 30
Haw. 853, 858 (Haw. Terr. 1929) (“‘A wrongdoer is answerable for
all the injurious consequences of his tortious act’ . . .
[including] the value of the use and occupation of which the
lessors have been wrongfully deprived.” (quoting Bergquist v.
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Kreidler, 196 N.W. 964, 965 (Minn. 1924))). Damages may also be
awarded in an ejectment suit “for all lost profits and damages
allegedly sustained by the plaintiff due to the defendant’s
wrongful possession of the property in question.” 25 Am. Jur. 2d
Contracts § 50 (2013).
Upon the grant of summary judgment and the issuance of
the writ of ejectment, Respondent was entitled to damages equal
to the value of the use of the Property of which he had been
deprived. The trial court’s calculation of the value of
Respondent’s loss of use of the Property is a finding of fact
that will not be disturbed unless it is clearly erroneous.
Allstate Ins. Co. v. Ponce, 105 Hawai#i 445, 453, 99 P.3d 96, 104
(2004). Findings of fact are “clearly erroneous when, despite
evidence to support the finding, the appellate court is left with
the definite and firm conviction that a mistake has been
committed.” Id.
The circuit court calculated damages of $2,400 for each
month in which Petitioners maintained possession of the Property.
Accordingly, the court awarded Respondent $26,400 for the eleven
months in which Petitioners had wrongfully possessed the
Property, and additional damages calculated on a per diem basis
of $2,400 per month until Petitioners returned possession of the
property to Respondent. The court apparently derived this value
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from the declarations submitted by Respondent and Petitioners.
In his declaration, Respondent stated that a reasonable rental
rate for the Property would be $2,500.00 per month. The
declaration Petitioners submitted from real estate broker Neil
Sauvage stated that “the fair monthly rental value of the
property [was] $2,200 to $2,400 per month.”
The admission of opinion evidence is within the
discretion of the trial court and will only be reversed for abuse
of discretion. State v. Bermisa, 104 Hawai#i 387, 392, 90 P.3d
1256, 1261 (2004). Opinions of lay witnesses are admissible when
they are “rationally based on the perception of the witness,
and . . . helpful to a clear understanding of the witness’
testimony or the determination of a fact in issue.” Hawai#i
Rules of Evidence (HRE) Rule 701. This court has held that “[a]n
owner, by virtue of his ownership and consequent familiarity with
the land and real estate market, is generally held to be
qualified to give his opinion as to the value of his land.” City
& Cnty. of Honolulu v. Int’l Air Serv. Co., 63 Haw. 322, 332, 628
P.2d 192, 200 (1981) (holding that the trial court did not abuse
its discretion in excluding the opinion testimony of an officer
of a corporate owner because that opinion was of less probative
value than that of an individual owner).
Respondent’s evidence regarding the rental value of his
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property was based upon his knowledge of the area and his status
as the owner of the Property. His opinion appears to have been
“rationally based” on his perceptions and helpful to the court’s
calculation of damages. Additionally, as noted by Respondent,
the damages calculated by the circuit court actually fell within
the range of values presented in the declaration submitted by
Petitioners, rather than that of Respondent.
The circuit court’s calculation of damages, based upon
the declarations submitted by Respondent and Petitioners, was not
a clearly erroneous estimation of the loss of use value suffered
by Respondent due to Petitioners’ trespass upon his property.
B. The circuit court erred in awarding attorneys’ fees and costs to Respondent
1. Jurisdiction
The circuit court lacked jurisdiction to award
Respondent attorneys’ fees subsequent to Petitioners’ filing of
the notice of appeal because Respondent failed to file a motion
for the award of fees. The filing of motions for the award of
attorneys’ fees and costs is governed by Hawai#i Rules of Civil
Procedure (HRCP) Rule 54(d)(2): Claims for attorneys’ fees and related nontaxable expenses shall be made by motion unless the substantive law governing the action provides for the recovery of such fees as an element of damages to be proved at trial. . . . Unless otherwise provided by statute or order of the court, the motion must be filed and served no later than 14 days after entry of an appealable order or judgment; must specify the judgment and the statute, rule, or other grounds entitling
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the moving party to the award; and must state the amount or provide a fair estimate of the amount sought.
(Emphasis added). Additionally, pursuant to HRCP Rule 7(b), a
motion may be made orally during a hearing: An application to the court for an order shall be by motion which, unless made during a hearing or trial, shall be made in writing, shall state with particularity the grounds therefor, and shall set forth the relief or order sought. The requirement of writing is fulfilled if the motion is stated in a written notice of the hearing of the motion.
In construing statutes or rules, “‘laws in pari
materia, or upon the same subject matter, shall be construed with
reference to each other.’” Aloha Care v. Ito, 126 Hawai#i 326,
349, 271 P.3d 621, 644 (2012) (alterations omitted) (quoting HRS
§ 1-16 (1993)). And, “[w]hen faced with ‘a plainly
irreconcilable conflict between a general and a specific statute
concerning the same subject matter,’ this court invariably favors
the specific.” Kinkaid v. Bd. of Review of City & Cnty. of
Honolulu, 106 Hawai#i 318, 323, 104 P.3d 905, 910 (2004) (some
internal quotation marks omitted) (quoting Metcalf v. Vol. Emps.
Ben. Ass’n of Haw., 99 Hawai#i 53, 59, 52 P.3d 823, 829 (2002)).
Applying this principle to HRCP Rules 7(b) and 54(d)(2)(A), it is
apparent that HRCP Rule 54(d)(2)(A) sets specific requirements
for the filing and serving of motions for attorney fees and is
the controlling rule. Pursuant to HRCP Rule 54(d)(2)(A), a
motion for attorneys’ fees must be filed and served no later than
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14 days after entry of the judgment, must specify the judgment
and the statute, rule, or other grounds entitling the award, and
must state the amount or provide a fair estimate of the amount
sought.
In Respondent’s opposition to Petitioners’ motion for a
stay, and during argument, Respondent stressed that he “had not
yet” and that he would be filing a motion for attorneys’ fees and
costs. Respondent himself did not intend his brief
justifications for the award of attorneys’ fees in his March 5,
2012 memorandum in opposition to Petitioners’ motion for a stay,
or his discussion of attorneys’ fees and costs during the March
13, 2012 hearing, to constitute the requisite “motion” for
attorneys’ fees and costs. Instead, Respondent was simply
presenting arguments to justify the inclusion of attorneys’ fees
in the calculation of a supersedeas bond. Additionally,
Respondent’s March 23, 2012 memorandum regarding the award of
attorneys’ fees and costs cannot constitute a motion of
attorneys’ fees and costs because it was filed after the circuit
court’s March 14, 2012 minute order awarding attorneys’ fees and
costs to Respondent.
Respondent’s memorandum in opposition to Petitioners’
motion for a stay and his arguments during the March 13, 2012
hearing also fail to meet HRCP Rule 54(d)(2)(A)’s requirements
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for a motion for attorneys’ fees and costs. Respondent’s
memorandum was filed four days prior to the court’s entry of
judgment on March 9, 2012; therefore it could not identify the
judgment on which the award was based. Respondent’s opposition
also identified HRS § 667-33(c) as the grounds for the award and
made no mention of assumpsit, which was the basis of the circuit
court’s award. During the March 13, 2012 hearing, Respondent
argued that the award of attorneys’ fees and costs was justified
under the theory of assumpsit, but Respondent failed to “state
the amount or provide a fair estimate of the amount sought,” as
required under HRCP Rule 54(d)(2)(A). Respondent also failed to
identify the judgment on which the award of attorneys’ fees and
costs was based.
Because Respondent did not file a timely motion for
attorneys’ fees and costs prior to the filing of the notice of
appeal, the circuit court was without jurisdiction to enter an
award of attorneys’ fees and costs subsequent to the filing of
the notice of appeal. “The notice of appeal shall be deemed to
appeal the disposition of all post-judgment motions that are
timely filed after entry of the judgment or order.” HRAP Rule
4(a)(3). “Generally, the filing of a notice of appeal divests
the [circuit] court of jurisdiction over the appealed case.” TSA
Int’l Ltd. v. Shimizu Corp., 92 Hawai#i 243, 265, 990 P.2d 713,
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735 (1999). The circuit court only “retains jurisdiction to
determine matters collateral or incidental to the judgment, and
may act in aid of the appeal.” Id. Therefore, the circuit
court’s April 27, 2012 order awarding attorneys’ fees and costs
to Respondent is void for lack of jurisdiction.
2. Assumpsit
Aside from the circuit court’s lack of jurisdiction to
award Respondent attorneys’ fees and costs, the award was also
erroneous because the circuit court based the award on a
misapplication of the theory of assumpsit.3 Hawai#i follows the
American Rule, which provides that “‘each party is responsible
for paying for his or her own litigation expenses’” except where
“‘provided for by statute, stipulation, or agreement.’” Ranger
Ins. Co. v. Hinshaw, 103 Hawai#i 26, 31, 79 P.3d 119, 124 (2003)
(quoting TSA Int’l Ltd., 92 Hawai#i at 263, 990 P.2d at 734).
While a prevailing party generally may not recover attorneys’
fees and costs for an action brought under common law tort
theories, HRS § 607-14 (Supp. 2011) provides for the recovery of
attorneys’ fees and costs for actions brought under the theory of
assumpsit. Pursuant to HRS § 607-14,
3 While the question of whether the circuit court erred in awarding Respondent attorneys’ fees and costs under the theory of assumpsit is moot, we address this issue, and the applicability of HRS § 667-33(c), to assist the trial court on remand.
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In all the courts, in all actions in the nature of assumpsit . . . 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; provided that the attorney representing the prevailing party shall submit to the court an affidavit stating the amount of time the attorney spent on the action and the amount of time the attorney is likely to spend to obtain a final written judgment, or, if the fee is not based on an hourly rate, the amount of the agreed upon fee. The court shall then tax attorneys’ fees, which the court determines to be reasonable, to be paid by the losing party; provided that this amount shall not exceed twenty-five per cent of the judgment.
(Emphasis added). “[F]or purposes of HRS § 607-14, the party in
whose favor judgment was entered is the prevailing party.”
Kamaka v. Goodsill Anderson Quinn & Stifel, 117 Hawai#i 92, 120,
176 P.3d 91, 121 (2008).
Hawaii’s courts have long recognized the common law
theories of assumpsit and tenancy at sufferance. “‘[A]ssumpsit’
is ‘a common law form of action which allows for the recovery of
damages for non-performance of a contract, either express or
implied, written or verbal, as well as quasi contractual
obligations.’” Blair v. Ing, 96 Hawai#i 327, 332, 31 P.3d 184,
189 (2001) (quoting TSA Int’l Ltd., 92 Hawai#i at 264, 990 P.2d
at 734). Under the theory of tenancy at sufferance, the tenant
is liable in assumpsit to pay a “fair value of the premises for
use and occupation.” Lawer v. Mitts, 238 P. 654, 660 (Wyo. 1925)
(“‘[A] tenant at sufferance, occupying by permission of the
landlord, was liable, upon an implied contract, in assumpsit for
use and occupation of the premises.’” (quoting Merrill v.
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Bullock, 105 Mass. 486, 490 (1870))). A tenancy at sufferance is
created “‘[w]hen the tenant, whose term has expired by efflux of
time, instead of quitting the premises, as he ought to do,
remains in possession, holding over as it is called.’”
Schimmelfennig v. Grove Farm Co., 41 Haw. 124, 134 (Haw. Terr.
1955) (alterations in original) (quoting Decker v. Adams, 12
N.J.L. 99, 100 (1830)). Where the tenant’s continuing occupation
is tortious, the tort may be waived and the property owner may
bring an action in assumpsit. See Fountain v. Mackenzie, 32 Haw.
45, 49 (Haw. Terr. 1931) (“The rule is firmly established that
the tort may be waived and an action of contract brought in all
cases where the law implies a promise on the part of the
wrongdoer to reimburse the party injured by his act.”); see also
Herond v. Bonsall, 140 P.2d 121, 123 (Cal. Dist. Ct. App. 1943)
(“An action will lie for recovery of the reasonable value of the
use and occupation of real property irrespective of the question
of whether or not the use thereof by the occupant was tortious or
wrongful. In such a case the tort, if any, may be waived and an
action based upon implied assumpsit is maintainable to recover
the value of the use of the real property for the time of such
occupation . . . .”)
While a tenancy at sufferance gives rise to an action
in assumpsit, courts in this and other states have recognized the
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common law rule that, where there is no landlord tenant
relationship, there can be no tenancy at sufferance and no action
in assumpsit. See Merrill, 105 Mass. at 490 (“At common
law . . . [if] the facts would not warrant the inference that
[the tenant] ever occupied the premises by contract, express or
implied, with the owner, but showed that he asserted an adverse
title, he was not liable to such an action.”); Smith v. Stewart,
6 Johns. 46, 48 (N.Y. 1810) (concluding that where a buyer and
seller entered into a contract for the sale of property and the
buyer took possession of the property but failed to complete the
purchase, the seller could bring an action for trespass and
ejectment, but not for assumpsit because there was no landlord
tenant relationship between the parties). In Fountain, the
plaintiff brought an action for the recovery of the reasonable
value of the use and occupation of a property in Honolulu. 32
Haw. at 45-46. The defendant alleged that her occupation of the
property was “under a claim of right and exercised in good fath.”
Id. at 46. The Supreme Court of the Territory of Hawai#i
reasoned that an action in assumpsit could be brought only where
there existed an express or implied contract. Id. at 49. The
court stated: “[W]henever the action of assumpsit for use and occupation has been allowed, it has been founded and would seem necessarily to be founded upon contract either express or implied. The very term assumpsit presupposes a
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contract. . . . To maintain the action for use and occupation, therefore, there must be established the relation of landlord and tenant, a holding by the defendant under a knowledge of the plaintiff’s title or claim, and under circumstances which amount to an acknowledgment of, or acquiescence in, such title or claim, and an agreement or permission on the part of the plaintiff. The action will not lie where the possession has been acquired and maintained under a different or adverse title, or where it was tortious and makes the holder a trespasser.”
Id. (emphasis added) (quoting Lloyd v. Hough, 42 U.S. 153, 158
(1843)). The court concluded that because “there was no implied
contract on the defendant’s part to pay for the use and
occupation of the premises” there could be no action in
assumpsit. Id.
Here, Petitioners’ continuing occupation of the
Property after its sale to Respondent did not create a tenancy at
sufferance. Petitioners never occupied the Property as tenants
and there never existed a landlord tenant relationship between
Petitioners and Respondent. Additionally, Petitioners’
continuing occupation of the Property did not create an implied
promise to pay Respondent for the use of the Property where
Petitioners maintained that they were the owners of the Property.
Respondent brought this suit pursuant to tortious
trespass and sought ejectment; Respondent may not now claim that
this is a suit in assumpsit in order to recover attorneys’ fees
and costs. To determine whether the action is in the nature of
assumpsit “‘this court has looked to the essential character of
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the underlying action in the trial court.’” Blair, 96 Hawai#i at
332, 31 P.3d at 189 (quoting Leslie v. Estate of Tavares, 93
Hawai#i 1, 5, 994 P.2d 1047, 1051 (2000)). “The character of the
action should be determined from the facts and issues raised in
the complaint, the nature of the entire grievance, and the relief
sought.” Id. (quoting Helfand v. Gerson, 105 F.3d 530, 537 (9th
Cir. 1997)). This court will determine that an action arises in
assumpsit when “the actual factual allegations are such that
historically the action would have been brought in assumpsit.”
Leslie, 93 Hawai#i at 5, 994 P.2d at 1051 (quoting Helfand, 105
F.3d at 537).
Respondent’s original complaint sounded in tort,
alleging trespass and seeking the ejectment of Petitioners.
Respondent stated that he was the rightful owner of the Property
and that after he had taken possession of the Property,
Petitioners entered and remained on the Property. Respondent did
not claim any contractual relationship with Petitioners and
specifically stated that “there [was] no contractual or statutory
relationship” between Petitioners and him. This action does not
arise from any contractual claims and therefore an award of
attorneys’ fees and costs is not justified under the theory of
assumpsit.
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The award of attorneys’ fees and costs was also not
justified under HRS § 667-33(c), which provides limited grounds
for the award of attorneys’ fees and costs following non-judicial
foreclosure sales. In 1998, Hawai#i enacted non-judicial
foreclosure laws -- HRS chapter 667, “Foreclosure by Action or
Foreclosure by Power of Sale” -- “to streamline the foreclosure
process by setting up a non-judicial foreclosure system which a
lender can utilize to foreclose on a property without having to
file a lawsuit and obtain court supervision.” 1998 House
Journal, at 365 (statement of Rep. Menor). A provision of this
chapter modified the common law rules regarding tenancy at
sufferance and expanded the circumstances in which a prevailing
party may recover attorneys’ fees and costs: The mortgagor and any person claiming by, through, or under the mortgagor and who is remaining in possession of the mortgaged property after the recordation of the affidavit and the conveyance document shall be considered a tenant at sufferance subject to eviction or ejectment. The purchaser may bring an action in the nature of summary possession under chapter 666, ejectment, or trespass or may bring any other appropriate action in a court where the mortgaged property is located to obtain a writ of possession, a writ of assistance, or any other relief. In any such action, the court shall award the prevailing party its reasonable attorney’s fees and costs and all other reasonable fees and costs, all of which are to be paid for by the non-prevailing party.
HRS § 667-33(c) (Supp. 2011) (emphasis added).
In interpreting a statute, this court follows
established rules:
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First, the fundamental starting point for statutory interpretation is the language of the statute itself. Second, where the statutory language is plain and unambiguous, our sole duty is to give effect to its plain and obvious meaning. Third, implicit in the task of statutory construction is our foremost obligation to ascertain and give effect to the intention of the legislature, which is to be obtained primarily from the language contained in the statute itself. Fourth, when there is doubt, doubleness of meaning, or indistinctiveness or uncertainty of an expression used in a statute, an ambiguity exists.
Dejetley v. Kaho#ohalahala, 122 Hawai#i 251, 262, 226 P.3d 421,
432 (2010) (quoting Rees v. Carlisle, 113 Hawai#i 446, 452, 153
P.3d 1131, 1137 (2007)).
Here, the plain language of the statute indicates that
where a mortgagor remains in possession of a property following a
non-judicial foreclosure sale, the “purchaser” may bring an
action for ejectment or trespass and the prevailing party shall
receive attorney’s fees and costs, in addition to damages. The
term “purchaser” is undefined in HRS chapter 667. However, we
may look to the language in other statutes upon the same subject
matter to construe the meaning of “purchaser.” See HRS § 1-16
(2009).
The first use of the term “purchaser” in HRS chapter
667 occurs in HRS § 667-31(a) (Supp. 2011): “After the purchaser
completes the purchase by paying the full purchase price and the
costs for the purchase, the mortgaged property shall be conveyed
to the purchaser by a conveyance document.” (emphasis added).
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From this use of the term, it appears that in HRS chapter 667
“purchaser” refers specifically to the party who purchases the
mortgaged property at the non-judicial foreclosure sale.
Therefore, HRS § 667-33(c) permits to party who purchases a
property at a non-judicial foreclosure sale to collect attorneys’
fees and costs after prevailing in an ejectment or trespass
action.
While HRS § 667-33(c) provides for the original
purchaser of a property to collect attorneys’ fees in an
ejectment or trespass action, it is inconsistent with the
legislative purpose of this statute to extend the attorneys’ fees
provision to all subsequent purchasers. The purposes of
simplifying and expediting the foreclosure process are not
furthered by permitting any purchaser to collect otherwise
unrecoverable attorneys’ fees and costs from a trespasser, if the
trespasser was formerly a mortgagor of the property, dispossessed
through the non-judicial foreclosure process.
Applying HRS § 667-33(c) to this case, it appears that
had the original purchaser of the Property (Scott Kim) prevailed
in a suit for trespass and ejectment against Petitioners, Kim
would been entitled to the recovery of attorneys’ fees and costs.
However, HRS § 667-33(c) is not directly applicable to the
present situation in which Respondent, a third-party purchaser
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having no direct relationship to Petitioners, prevailed in a suit
for trespass and ejectment. Therefore, HRS § 667-33(c) does not
provide a statutory basis for the circuit court’s award of
attorneys’ fees and cost.
III. Conclusion
Respondent attorneys’ fees and costs and, furthermore, there was
no legal justification for the award of attorneys’ fees and
costs. The supersedeas bond set by the circuit court was also
erroneous in that it included the attorneys’ fees and costs the
circuit court awarded Respondent. Accordingly, we vacate the
circuit court’s award of attorneys’ fees and costs and the
circuit court’s order regarding the supersedeas bond and we
remand this case to the circuit court for further proceedings.
DATED: Honolulu, Hawai#i, Febrtuary 28, 2014.
Gary Victor Dubin, /s/ Paula A. Nakayama Frederick J. Arensmeyer and Zeina Jafar /s/ Sabrina S. McKenna for petitioners /s/ Edwin C. Nacino Theodore D.C. Young and Andrew G. Odell, and Wayne Nasser, Kevin W. Herring, and Steven R. Gray for respondent