Oyadomari v. HQHQ, Inc.

CourtHawaii Intermediate Court of Appeals
DecidedJune 21, 2023
DocketCAAP-17-0000924
StatusPublished

This text of Oyadomari v. HQHQ, Inc. (Oyadomari v. HQHQ, Inc.) is published on Counsel Stack Legal Research, covering Hawaii Intermediate Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Oyadomari v. HQHQ, Inc., (hawapp 2023).

Opinion

NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

Electronically Filed Intermediate Court of Appeals CAAP-XX-XXXXXXX 21-JUN-2023 07:58 AM Dkt. 153 MO

NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI‘I

SHARMAN M. OYADOMARI, Trustee of the Kikuko Kuwahara Irrevocable Grantor Trust dated April 26, 2013, Plaintiff-Appellee, v. HQHQ, INC., a Hawai‘i corporation; and WILLIAM S. QUINN, Defendants-Appellants, and BRIAN M. HYATT; and DOE DEFENDANTS 1-10, Defendants-Appellees.

APPEAL FROM THE CIRCUIT COURT OF THE THIRD CIRCUIT (CIVIL NO. 3CC16-1-000411)

Memorandum Opinion (By: Ginoza, Chief Judge, Wadsworth and McCullen, JJ.)

Defendants-Appellants HQHQ, Inc. (HQHQ) and William S.

Quinn (Quinn) appeal from nine orders and judgments of the

Circuit Court of the Third Circuit involving judicial

foreclosure and confirmation of sale proceedings brought by

Plaintiff-Appellee Sharman M. Oyadomari (Oyadomari). 1

1 HQHQ and Quinn appeal from the following orders and judgments:

(1) October 13, 2017 "Order Denying Defendant William S. Quinn's Motion for Order Compelling Plaintiff Sharman M. Oyadomari, Trustee to Accept Full Payment of

(continued . . .) NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

On appeal, HQHQ and Quinn raise two points of error,

alleging (1) the circuit court erred in failing to grant relief

from the interlocutory decree of foreclosure and (2) all orders

(. . . continued)

the June 20, 2008 Promissory Note, Filed on October 9, 2017 and Granting Plaintiff's Motion to Confirm Sale, Filed on July 31, 2017";

(2) November 24, 2017 "Order Denying Motion for Leave to File Defendant William S. Quinn's Counterclaim and Crossclaim, Filed on October 10, 2017 and Motion for Reconsideration of October 13, 2017 Ruling Denying Defendant William S. Quinn's Motion for Order Compelling Plaintiff Sharman M. Oyadomari, Trustee to Accept Full Payment of June 20, 2008 Promissory Note (and Objection to Plaintiff's Notice of Submission Dated October 24, 2017[)], Filed on November 2, 2017";

(3) November 28, 2017 "Order Denying Defendant William S. Quinn's Motion for Order Compelling Plaintiff Sharman M. Oyadomari, Trustee to Accept Full Payment of the June 20, 2008 Promissory Note";

(4) November 28, 2017 "Findings of Fact [(FOF)], Conclusions of Law and Order Granting Plaintiff's Motion to Confirm Sale";

(5) November 28, 2017 Writ of Possession;

(6) November 28, 2017 Judgment;

(7) January 24, 2018 "Order Granting Plaintiff's Motion to Alter or Amend Findings of Fact, Conclusions of Law and Order Granting Plaintiff's Motion to Confirm Sale Filed November 28, 2017";

(8) January 24, 2018 "Order Denying Defendant William S. Quinn's Motion to Strike Plaintiff's Motion to Alter or Amend Findings of Fact, Conclusions of Law and Order Granting Plaintiff's Motion to Confirm Sale Filed November 28, 2017"; and

(9) January 24, 2018 Amended Judgment.

The Honorable Harry P. Freitas presided over the October 13, 2017 order denying Quinn's motion to compel Oyadomari to accept full payment and granting Oyadomari's motion to confirm the sale.

The Honorable Henry T. Nakamoto presided over all other orders and judgments.

2 NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

entered after the October 13, 2017 order require reversal. We

affirm.

I. BACKGROUND

A. Factual Background

According to Quinn, his family founded Pahoa Feed and

Fertilizer as a sole proprietorship in 2000. Quinn explains

that, in 2002, Brian M. Hyatt's (Hyatt) family and Quinn's

family incorporated Pahoa Feed and Fertilizer under HQHQ, Inc.,

a Hawai‘i corporation, consisting of a 50-50 ownership between

the two families.

On June 20, 2008, HQHQ executed a promissory note

(Note), promising to repay Yoso and Kikuko Kuwahara (Kuwaharas),

in their capacity as trustee of their respective revocable

living trusts, for a $445,000.00 loan with an interest rate of

six percent per year. The Note required HQHQ to pay the

Kuwaharas $3,500.00 every month until June 6, 2015, at which

time HQHQ would be required to pay the balance of the Note.

Quinn and Hyatt each personally guaranteed HQHQ's

obligations under the Note. FOF 4. The loan was secured with a

Mortgage on a Property in Puna on the island of Hawai‘i. FOF 2,

3. The Mortgage was recorded in the Bureau of Conveyances on

June 25, 2008.

Kikuko Kuwahara (in her capacity as Trustee of the

Kikuko Kuwahara Revocable Living Trust Agreement dated

3 NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

September 15, 1986, as amended, and as Successor Trustee of the

Yoso Kuwahara Revocable Living Trust dated March 3, 1977, as

amended) assigned the Note and Mortgage to Oyadomari in 2013,

and recorded the assignment in the Bureau of Conveyances. Per

this assignment, Oyadomari had "all right, title and interest in

and to" the Note and Mortgage, including the "obligation and

power to discharge Mortgage through the execution and delivery

of a release of this Mortgage."

According to correspondence Quinn attached to his and

HQHQ's memorandum in opposition to the commissioner's motion for

leave to sell without an open house, Quinn and Oyadomari were

negotiating the terms of a purchase money mortgage for the

property in May 2015, a month before the Note became due. 2

On June 6, 2015, the Note became due with a principal

balance of $312,305.73 and interest accruing at a rate of six

percent per year. FOF 6, 9. HQHQ, Quinn, and Hyatt

(collectively Defendants) failed to pay the amount owed. FOF 7.

In letters dated June 24, 2015 and February 19, 2016,

Oyadomari made demands on Defendants to pay the balance due.

FOF 7. Despite the demands for payment, Defendants "failed to

pay the amounts owed under the Note." FOF 8.

2 Quinn represented to the circuit court that, around this time, the Hyatt and Quinn families realized "future business opportunities were best pursued separately as we were at an impasse regarding the direction of the business and did not work well as business partners." Quinn also submitted to the circuit court a letter from Hyatt indicating a willingness to relinquish his family's interest in HQHQ if certain demands were met.

4 NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

Correspondence Quinn submitted to the circuit court

indicated that the parties continued negotiating a new loan, but

in June 2016, Oyadomari's attorney stated, "We have a

foreclosure complaint that we are prepared to file but my client

is willing to hold off on filing the complaint if a new loan can

be closed by July 1, 2016" and set a June 17, 2016 deadline. On

June 17, 2016, Quinn responded with modifications, to which

Oyadomari was "not agreeable[.]" Oyadomari then proposed new

terms that would expire at 4:30 p.m. on Friday, June 24, 2016.

The correspondence provided by Quinn did not reflect a response.

B. Procedural Background

1. The Complaint

On November 29, 2016, Oyadomari filed her complaint

for foreclosure in the circuit court against Defendants.

Oyadomari contended Defendants were in "material default under

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