NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
Electronically Filed Intermediate Court of Appeals CAAP-XX-XXXXXXX 21-JUN-2024 08:16 AM Dkt. 116 SO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAIʻI
MOLOAA FARMS LLC, a Hawaiʻi limited liability company, Plaintiff-Appellant, v. GREEN ENERGY TEAM LLC, a Hawaiʻi limited liability company, Defendant-Appellee.
APPEAL FROM THE CIRCUIT COURT OF THE FIFTH CIRCUIT (CASE NO. 5CC141000188)
SUMMARY DISPOSITION ORDER (By: Hiraoka, Presiding Judge, Nakasone and McCullen, JJ.)
Plaintiff-Appellant Moloaa Farms LLC (Moloaa) appeals
from the Circuit Court of the Fifth Circuit's 1 June 24, 2019
amended final judgment in favor of Defendant-Appellee Green
Energy Team LLC (Green Energy). On appeal, Moloaa contends the
circuit court erred in granting Green Energy's Hawai‘i Rules of
Civil Procedure (HRCP) Rule 52(c) 2 motion for judgment on partial
1 The Honorable Kathleen N.A. Watanabe presided.
2 HRCP Rule 52(c) provides:
If during a trial without a jury a party has been fully heard on an issue and the court finds against the party on (continued . . .) NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
findings, which the parties and the circuit court referred to as
a motion for directed verdict. 3
Upon careful review of the record and the briefs
submitted by the parties and having given due consideration to
the issues raised and the arguments advanced, we resolve
Moloaa's arguments as discussed below.
Conclusions of law in an HRCP Rule 52(c) directed
verdict bench trial are reviewed de novo. Furuya v. Ass'n of
Apartment Owners of Pac. Monarch, Inc., 137 Hawai‘i 371, 383, 375
P.3d 150, 162 (2016). And, "[a]s a general rule, the
construction and legal effect to be given a contract is a
(. . . continued) that issue, the court may enter judgment as a matter of law against that party with respect to a claim or defense that cannot under the controlling law be maintained or defeated without a favorable finding on that issue, or the court may decline to render any judgment until the close of all the evidence. Such a judgment shall be supported by findings of fact and conclusions of law as required by subdivision (a) of this rule.
3 Moloaa raises 100 points of error challenging certain findings and conclusions in the circuit court's March 5, 2019 "Final Findings of Fact, Conclusions of Law and Order Granting [Green Energy's] Motion for Directed Verdict Against [Moloaa] After Jury-Waived Trial." Moloaa does not provide corresponding arguments in the argument section of its opening brief for each of the 100 points of error, but instead addresses these findings and conclusions in the context of its arguments on appeal. See Hawai‘i Rules of Appellate Procedure Rule 28(b). We address the challenged findings and conclusions in the same manner.
Moloaa also argues the circuit court erred in concluding it acted in bad faith, failed to mitigate its damages, breached the Option Agreement, and was estopped from enforcing the lease. However, based on our decision below, we need not reach these arguments.
We do not consider Appendix B of the answering brief because it was not included in the record on appeal and there was no request for judicial notice.
2 NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
question of law" reviewed de novo. Kahawaiolaa v. Hawaiian Sun
Invs., Inc., 146 Hawai‘i 424, 432, 463 P.3d 1081, 1089 (2020)
(citation omitted); see generally, Clarabal v. Dep't of Educ.,
145 Hawai‘i 69, 79, 446 P.3d 986, 996 (2019) (noting questions of
law are reviewed de novo).
The "OPTION TO LEASE AGREEMENT" (Option Agreement)
gave Green Energy an option to lease almost 600 acres (the
Property) from Moloaa. Attached to the Option Agreement was the
"LEASE" (Proposed Lease) that would take effect if Green Energy
exercised its option to lease the Property.
(1) Moloaa argues the "essential terms were agreed
upon as set forth in the [Option Agreement] and the Companion
Recorded Documents." The parties agree the Proposed Lease did
not contain an effective date or set the Biomass prices for the
Percentage Rent provisions.
(a) Effective date. Section (2)(c) of the Option
Agreement determined the effective date. Once the option to
lease is timely exercised, "Optionor agrees to lease the
Property to Optionee, on or before the date that is (30) days
after Optionor's receipt of the Exercise Notice, and the Parties
shall thereupon execute the Lease, which shall enter into effect
on the effective date stated in the Lease." Thus, the Proposed
Lease would become effective on the thirtieth day after Moloaa
received the notice to exercise the option to lease, or earlier
3 NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
if Moloaa signed the Proposed Lease sooner than thirty days
after it received Green Energy's notice. Because the effective
date was set without further negotiation, the missing date did
not render the Proposed Lease unenforceable. See generally, In
re Sing Chong Co., 1 Haw. App. 236, 239-40, 617 P.2d 578, 581
(1980).
(b) Biomass prices. The Proposed Lease did not
contain Biomass prices to be applied to bone dry tons harvested
to calculate Percentage Rent. It is ambiguous whether that
meant no percentage rent was to be paid, or the Biomass prices
were subject to negotiation. Parol evidence is admissible to
resolve that ambiguity. See generally, Hawaiian Ass'n of
Seventh-Day Adventists v. Wong, 130 Hawai‘i 36, 45-46, 305 P.3d
452, 461-62 (2013). Moloaa's sole owner and manager, Jeffrey
Lindner (Lindner), testified he did not negotiate for Percentage
Rent and did not expect to be paid Percentage Rent:
• "[t]here was absolutely no discussion ever about percentage rents";
• "I never had any expectation of percentage rent. We never talked about it. I never included it in my negotiation";
• "I never expected any percentage rent, but yes, it is blank. In my mind, you know, Green Energy Team gets off not having to pay me. That's all it is";
• "That's why I never negotiated anything. I expected nothing, and, . . . if other people didn't fill it in . . . I would think the interpretation would be
4 NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
that it would be -- it would be zero. If there's nothing in there, it would be zero and . . . I didn't expect it and I don't expect it now"; and
• the percentage rent section was "superfluous".
Exhibit J-6 is consistent with Lindner's testimony.
It shows the Percentage Rent provision was a remnant from a
lease Green Energy's attorney had prepared for Green Energy and
Hawaiian Mahogany Inc., and was used as a form for the Proposed
Lease. It also shows Lindner negotiated only the amounts he
wanted Moloaa to be paid for the option and for Annual Base
Rent.
Thus, the blanks in the Percentage Rent provision do
not support a finding or conclusion that further negotiation
Free access — add to your briefcase to read the full text and ask questions with AI
NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
Electronically Filed Intermediate Court of Appeals CAAP-XX-XXXXXXX 21-JUN-2024 08:16 AM Dkt. 116 SO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAIʻI
MOLOAA FARMS LLC, a Hawaiʻi limited liability company, Plaintiff-Appellant, v. GREEN ENERGY TEAM LLC, a Hawaiʻi limited liability company, Defendant-Appellee.
APPEAL FROM THE CIRCUIT COURT OF THE FIFTH CIRCUIT (CASE NO. 5CC141000188)
SUMMARY DISPOSITION ORDER (By: Hiraoka, Presiding Judge, Nakasone and McCullen, JJ.)
Plaintiff-Appellant Moloaa Farms LLC (Moloaa) appeals
from the Circuit Court of the Fifth Circuit's 1 June 24, 2019
amended final judgment in favor of Defendant-Appellee Green
Energy Team LLC (Green Energy). On appeal, Moloaa contends the
circuit court erred in granting Green Energy's Hawai‘i Rules of
Civil Procedure (HRCP) Rule 52(c) 2 motion for judgment on partial
1 The Honorable Kathleen N.A. Watanabe presided.
2 HRCP Rule 52(c) provides:
If during a trial without a jury a party has been fully heard on an issue and the court finds against the party on (continued . . .) NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
findings, which the parties and the circuit court referred to as
a motion for directed verdict. 3
Upon careful review of the record and the briefs
submitted by the parties and having given due consideration to
the issues raised and the arguments advanced, we resolve
Moloaa's arguments as discussed below.
Conclusions of law in an HRCP Rule 52(c) directed
verdict bench trial are reviewed de novo. Furuya v. Ass'n of
Apartment Owners of Pac. Monarch, Inc., 137 Hawai‘i 371, 383, 375
P.3d 150, 162 (2016). And, "[a]s a general rule, the
construction and legal effect to be given a contract is a
(. . . continued) that issue, the court may enter judgment as a matter of law against that party with respect to a claim or defense that cannot under the controlling law be maintained or defeated without a favorable finding on that issue, or the court may decline to render any judgment until the close of all the evidence. Such a judgment shall be supported by findings of fact and conclusions of law as required by subdivision (a) of this rule.
3 Moloaa raises 100 points of error challenging certain findings and conclusions in the circuit court's March 5, 2019 "Final Findings of Fact, Conclusions of Law and Order Granting [Green Energy's] Motion for Directed Verdict Against [Moloaa] After Jury-Waived Trial." Moloaa does not provide corresponding arguments in the argument section of its opening brief for each of the 100 points of error, but instead addresses these findings and conclusions in the context of its arguments on appeal. See Hawai‘i Rules of Appellate Procedure Rule 28(b). We address the challenged findings and conclusions in the same manner.
Moloaa also argues the circuit court erred in concluding it acted in bad faith, failed to mitigate its damages, breached the Option Agreement, and was estopped from enforcing the lease. However, based on our decision below, we need not reach these arguments.
We do not consider Appendix B of the answering brief because it was not included in the record on appeal and there was no request for judicial notice.
2 NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
question of law" reviewed de novo. Kahawaiolaa v. Hawaiian Sun
Invs., Inc., 146 Hawai‘i 424, 432, 463 P.3d 1081, 1089 (2020)
(citation omitted); see generally, Clarabal v. Dep't of Educ.,
145 Hawai‘i 69, 79, 446 P.3d 986, 996 (2019) (noting questions of
law are reviewed de novo).
The "OPTION TO LEASE AGREEMENT" (Option Agreement)
gave Green Energy an option to lease almost 600 acres (the
Property) from Moloaa. Attached to the Option Agreement was the
"LEASE" (Proposed Lease) that would take effect if Green Energy
exercised its option to lease the Property.
(1) Moloaa argues the "essential terms were agreed
upon as set forth in the [Option Agreement] and the Companion
Recorded Documents." The parties agree the Proposed Lease did
not contain an effective date or set the Biomass prices for the
Percentage Rent provisions.
(a) Effective date. Section (2)(c) of the Option
Agreement determined the effective date. Once the option to
lease is timely exercised, "Optionor agrees to lease the
Property to Optionee, on or before the date that is (30) days
after Optionor's receipt of the Exercise Notice, and the Parties
shall thereupon execute the Lease, which shall enter into effect
on the effective date stated in the Lease." Thus, the Proposed
Lease would become effective on the thirtieth day after Moloaa
received the notice to exercise the option to lease, or earlier
3 NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
if Moloaa signed the Proposed Lease sooner than thirty days
after it received Green Energy's notice. Because the effective
date was set without further negotiation, the missing date did
not render the Proposed Lease unenforceable. See generally, In
re Sing Chong Co., 1 Haw. App. 236, 239-40, 617 P.2d 578, 581
(1980).
(b) Biomass prices. The Proposed Lease did not
contain Biomass prices to be applied to bone dry tons harvested
to calculate Percentage Rent. It is ambiguous whether that
meant no percentage rent was to be paid, or the Biomass prices
were subject to negotiation. Parol evidence is admissible to
resolve that ambiguity. See generally, Hawaiian Ass'n of
Seventh-Day Adventists v. Wong, 130 Hawai‘i 36, 45-46, 305 P.3d
452, 461-62 (2013). Moloaa's sole owner and manager, Jeffrey
Lindner (Lindner), testified he did not negotiate for Percentage
Rent and did not expect to be paid Percentage Rent:
• "[t]here was absolutely no discussion ever about percentage rents";
• "I never had any expectation of percentage rent. We never talked about it. I never included it in my negotiation";
• "I never expected any percentage rent, but yes, it is blank. In my mind, you know, Green Energy Team gets off not having to pay me. That's all it is";
• "That's why I never negotiated anything. I expected nothing, and, . . . if other people didn't fill it in . . . I would think the interpretation would be
4 NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
that it would be -- it would be zero. If there's nothing in there, it would be zero and . . . I didn't expect it and I don't expect it now"; and
• the percentage rent section was "superfluous".
Exhibit J-6 is consistent with Lindner's testimony.
It shows the Percentage Rent provision was a remnant from a
lease Green Energy's attorney had prepared for Green Energy and
Hawaiian Mahogany Inc., and was used as a form for the Proposed
Lease. It also shows Lindner negotiated only the amounts he
wanted Moloaa to be paid for the option and for Annual Base
Rent.
Thus, the blanks in the Percentage Rent provision do
not support a finding or conclusion that further negotiation
over the essential terms of the Proposed Lease was required, or
that the Proposed Lease was unenforceable once Green Energy gave
timely notice it was exercising its option to lease.
(2) Next, Moloaa argues the circuit court erred in
concluding "the parties did not intend to be bound by the
Proposed Lease attached to the" Option Agreement. (Formatting
altered.)
The parties' subjective intent is irrelevant because
the Option Agreement contained an integration provision stating
it "shall not be amended, modified or discharged, nor may any of
its terms be waived, except by an instrument in writing signed
by the Parties." It clearly stated the attached Proposed Lease
5 NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
will take effect "on or before the date that is (30) days after
[Moloaa]'s receipt of the Exercise Notice, and the Parties shall
thereupon execute the Lease[.]" The Option Agreement did not
allow modification of the Proposed Lease (which also contained
an integration provision). Whatever the parties' subjective
intent may have been before the Option Agreement was executed,
once it was executed the parties were bound by its unambiguous
terms. Parol evidence of the parties' subjective intent is not
admissible to contradict these unambiguous terms. See, e.g.,
Trs. of Est. of Bishop v. Au, 141 Hawai‘i 248, 407 P.3d 1284,
CAAP-XX-XXXXXXX, 2017 WL 6614566, at *2 (App. Dec. 22, 2017)
(SDO) (noting the integration clause in a settlement agreement
precluded admissibility of parol evidence to contradict its
express terms).
We hold the circuit court erred in finding and
concluding the Proposed Lease lacked sufficiently definite terms
and Moloaa and Green Energy did not intend to be bound by the
Proposed Lease should the option to lease be invoked. We need
not address Moloaa's other arguments. We do not decide whether
Exhibit J-21 (which the circuit court referred to as the
"Purported Lease") is valid or binding, or any other legal issue
not specifically addressed in this summary disposition order.
The circuit court erred in granting Green Energy's
HRCP Rule 52(c) motion for judgment on partial findings. We
6 NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
therefore vacate the March 5, 2019 "Final Findings of Fact,
Conclusions of Law and Order Granting Defendant's Motion for
Directed Verdict Against Plaintiff After Jury-Waived Trial," the
May 30, 2019 "Order Granting in Part and Denying in Part
Defendant Green Energy Team LLC's Motion for Award of Attorneys'
Fees and Costs re Granting of Defendant's Motion for Directed
Verdict Against Plaintiff After Jury-Waived Trial on January 25,
2019, Filed March 19, 2019," and the June 24, 2019 "Amended
Final Judgment in Favor of Defendant Green Energy Team LLC and
Against Plaintiff Moloaa Farms LLC," and remand for resumption
of trial.
DATED: Honolulu, Hawai‘i, June 21, 2024.
On the briefs: /s/ Keith K. Hiraoka Presiding Judge George W. Van Buren, John B. Shimizu, /s/ Karen T. Nakasone Robert H. Shimizu, Associate Judge (Van Buren & Shimizu), for Plaintiff-Appellant. /s/ Sonja M.P. McCullen Associate Judge William M. Harstad, Lindsay N. McAneeley, Derek B. Simon, (Carlsmith Ball), for Defendant-Appellee.