Schmidt v. Dubin. Dissenting Opinion by Eddins, J., with whom Circuit Judge Kawano, In Place of Devens, J., Joins. ICA s.d.o., filed 03/28/2024 [ada], 154 Haw. 90. Motion for Reconsideration, filed 03/28/2024. ICA Order Denying Motion for Reconsideration of SDO Filed March 28, [2024], filed 04/04/2024 [ada]. Motion for Reconsideration, filed 04/05/2024. ICA Order Denying Motion for Reconsideration of Summary Disposition Order [JEFS 87], filed March 28, 2024, filed 04/15/2024 [ada]. Application for Writ of Certiorari, filed 06/18/2024. S.Ct. Order Accepting Application for Writ of Certiorari, filed 07/18/2024 [ada].

556 P.3d 362, 155 Haw. 16

• Court: Hawaii Supreme Court
• Decided: September 16, 2024
• Docket: SCWC-18-0000291
• Status: Published

Opinion

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Electronically Filed Supreme Court SCWC-XX-XXXXXXX 16-SEP-2024 09:08 AM Dkt. 27 OP

IN THE SUPREME COURT OF THE STATE OF HAWAI‘I

---o0o---

THOMAS SCHMIDT, Petitioner/Plaintiff-Appellant,

vs.

GARY VICTOR DUBIN; DUBIN LAW OFFICES, Respondents/Defendants/Third-Party Plaintiffs/ Third-Party Counterclaim Defendants-Appellees,

and

GARY VICTOR DUBIN; DUBIN LAW OFFICES, Respondents/Defendants/Third-Party Plaintiffs/ Third-Party Counterclaim Defendants-Appellees,

JOHN S. CARROL, Respondent/Third-Party Defendant/ Third-Party Counterclaim Plaintiff-Appellee. ___________________________________________________________ SCWC-XX-XXXXXXX

CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS (CAAP-XX-XXXXXXX; CASE NO. 1CC151000482)

SEPTEMBER 16, 2024

RECKTENWALD, C.J., McKENNA, AND GINOZA, JJ., AND EDDINS, J., DISSENTING, WITH WHOM CIRCUIT JUDGE KAWANO, IN PLACE OF DEVENS, J., RECUSED, JOINS *** FOR PUBLICATION IN WEST’S HAWAI‘I REPORTS AND PACIFIC REPORTER ***

OPINION OF THE COURT BY GINOZA, J.

This appeal arises from claims asserted by

Petitioner/Plaintiff-Appellant Thomas F. Schmidt (Schmidt)

against his former attorney, Respondents/Defendants-Appellees

Gary V. Dubin and the Dubin Law Offices (collectively, Dubin).

Schmidt brought suit in the Circuit Court of the First Circuit

(Circuit Court)1 alleging Dubin breached contractual and other

duties to represent Schmidt in a separate lawsuit (Ruthruff

Lawsuit) and improperly kept a $100,000 retainer that Schmidt

claims he paid to Dubin for future legal work in the Ruthruff

Lawsuit.

The Circuit Court entered two orders granting partial

summary judgment for Dubin and also awarded Dubin attorneys’

fees and costs as the prevailing party. The award for

attorneys’ fees was based on Hawai‘i Revised Statutes (HRS)

§ 607-14 (2016). The award for costs was based on HRS § 607-9

(2016) and Hawai‘i Rules of Civil Procedure (HRCP) Rule 54(d)(1)

(eff. 2000). The Circuit Court entered judgment in favor of

Dubin and against Schmidt, including on the attorneys’ fees and

costs.

1 The Honorable Karl K. Sakamoto presided from March 17, 2015, until the case was reassigned on January 5, 2017 to the Honorable Bert I. Ayabe.

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Schmidt appealed to the Intermediate Court of Appeals

(ICA), challenging the Circuit Court’s first summary judgment

ruling, regarding his claim that Dubin improperly kept $100,000

and breached contractual duties. The ICA held that summary

judgment on these claims was improper, vacated the Circuit

Court’s judgment as to these claims, but affirmed the judgment

in all other respects. Schmidt filed a motion for

reconsideration, asserting the ICA should also vacate the

attorneys’ fees and costs award, which the ICA denied.

Schmidt’s application for certiorari to this court

contends the ICA erred in affirming the portion of the Circuit

Court’s judgment that awarded attorneys’ fees and costs to

Dubin, and in denying Schmidt’s motion for reconsideration on

this issue. Schmidt argues the ICA erred because, although it

vacated summary judgment for Dubin on Schmidt’s breach of

contract claims, the ICA simultaneously affirmed the award of

attorneys’ fees and costs when Dubin was no longer the

prevailing party on the breach of contract claims for purposes

of HRS §§ 607-14 and 607-9 and HRCP Rule 54(d)(1).

We hold that after vacating the judgment on the breach

of contract claims, the ICA erred by affirming the judgment “in

all other respects,” which included judgment in favor of Dubin

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for attorneys’ fees and costs as the prevailing party. See

Ass’n of Owners of Kalele Kai v. Yoshikawa, 149 Hawai‘i 417, 418,

493 P.3d 939, 940 (2021) (“[W]hen a judgment upon which

attorneys’ fees and costs were based has been vacated,

attorneys’ fees and costs arising out of that judgment should

also be vacated[.]”). We further hold that the ICA erred by

denying Schmidt’s motion for reconsideration, which expressly

asserted that the attorneys’ fees and costs order should be

vacated.

I. Background

Given the allegations in Schmidt’s complaint, Dubin

filed two motions for partial summary judgment: one on all

claims based on the alleged $100,000 debt, including Schmidt’s

breach of contract claims (MPSJ #1); and one related to claims

based on HRS Chapter 480 and the Hawai‘i Rules of Professional

Conduct (MPSJ #2).

The Circuit Court granted partial summary judgment in

favor of Dubin on MPSJ #1, concluding that Schmidt’s claims

based on the alleged debt were time-barred by HRS § 657-1(1)

(2016) (MPSJ Order #1). The Circuit Court also separately

granted partial summary judgment in favor of Dubin on MPSJ #2

(MPSJ Order #2).2

2 MPSJ Order #2 was not based on statute of limitations grounds.

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Subsequently, pursuant to HRS §§ 607-14 and 607-9, and

HRCP Rule 54(d)(1), the Circuit Court awarded $25,000 for

attorneys’ fees (25% of the $100,000 sought in the Complaint)

and $1,468.88 for costs to Dubin as the prevailing party, for a

total amount of $26,468.88 (Fees/Costs Order).

On April 2, 2018, Schmidt filed a Notice of Appeal in

the ICA, stating he sought review of the MPSJ Order #1 and the

Fees/Costs Order. At the time Schmidt appealed, the Circuit

Court had not entered a final appealable judgment. The ICA

temporarily remanded the case to the Circuit Court for entry of

a final appealable judgment, which was entered on November 8,

2018, and which included judgment against Schmidt and in favor

of Dubin in the amount of $26,468.88 for attorneys’ fees and

costs (Final Judgment).

In his opening brief to the ICA, Schmidt argued the

Circuit Court erred in granting MPSJ Order #1 and improperly

dealt with statute of limitations issues. Schmidt requested

that MPSJ Order #1 be vacated, the case be remanded with

instructions related to the statute of limitations, and for

further consistent proceedings. Schmidt did not argue the award

of attorneys’ fees and costs should also be vacated.

On March 28, 2024, the ICA issued a Summary

Disposition Order (SDO) concluding the Circuit Court erred in

holding that Schmidt’s breach of contract claims against Dubin

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were time-barred because genuine issues of material fact exist

as to when an alleged breach of contract action accrued.

Schmidt v. Dubin, No. CAAP-XX-XXXXXXX, 2024 WL 1329361 (Haw.

App. Mar. 28, 2024) (SDO). The SDO concluded by stating:

For these reasons, the Circuit Court’s November 8, 2018 Judgment is affirmed in part and vacated in part. The Judgment is vacated with respect to the Circuit Court’s granting of summary judgment on Schmidt’s breach of contract claim(s) against Dubin on the grounds that they were time-barred. The Judgment is affirmed in all other respects. This case is remanded to the Circuit Court for further proceedings consistent with this Summary Disposition Order.

Id. at *3 (emphasis added).

On March 28, 2024, Schmidt timely filed a motion for

reconsideration requesting that the ICA reconsider the portion

of its SDO affirming the Circuit Court’s judgment “in all other

respects.” Schmidt argued that the Fees/Costs Order should be

vacated because the ICA vacated MPSJ Order #1 and Dubin is not

the prevailing party on the assumpsit (breach of contract)

claims. The ICA denied Schmidt’s motion for reconsideration.

The ICA then entered its Judgment on Appeal stating

that the Circuit Court’s Final Judgment is “affirmed in part and

vacated in part” and “[t]his case is remanded to the Circuit

Court for further proceedings consistent with the Summary

Disposition Order.” (Emphasis added.)

II. Discussion

The Circuit Court’s Fees/Costs Order and Final

Judgment awarded attorneys’ fees and costs to Dubin in the

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amount of $26,468.88, based on Dubin being the prevailing party.

The Circuit Court’s Fees/Costs Order provided that the fees and

costs were awarded to Dubin pursuant to HRS §§ 607-14 and 607-9,

and HRCP Rule 54(d)(1). The Final Judgment, entering judgment

of $26,468.88 against Schmidt and in favor of Dubin, provided

that it was based inter alia on: MPSJ Order #1, MPSJ Order #2,

and the Fees/Costs Order.

HRS § 607-14 provides, in relevant part, that for all

actions in the nature of assumpsit, “there shall be taxed as

attorneys’ fees, to be paid by the losing party . . . a fee that

the court determines to be reasonable[.]” (Emphasis added);

see Deutsche Bank Nat’l Tr. Co. v. Kozma, 140 Hawaiʻi 494, 498,

403 P.3d 271, 275 (2017) (“A prevailing party is entitled to

attorney’s fees pursuant to HRS § 607-14[.]”).

Regarding the amount of attorneys’ fees to be awarded

under HRS § 607-14, the statute states: “The above fees provided

for by this section shall be assessed on the amount of the

judgment exclusive of costs and all attorneys’ fees obtained by

the plaintiff, and upon the amount sued for if the defendant

obtains judgment.” (Emphasis added); see also Stanford Carr

Dev. Corp. v. Unity House, Inc., 111 Hawaiʻi 286, 307, 141 P.3d

459, 480 (2006) (holding that attorneys’ fees awarded in the

amount of $707,309.98 was within the statutory limits of HRS §

607-14, where the losing party had sought damages of over $7

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million and thus the prevailing party was entitled to no more

than twenty-five percent of that amount).

Here, Dubin was defending against Schmidt’s breach of

contract claims and prevailed in the Circuit Court. Schmidt’s

Complaint asserted he was entitled to recover a $100,000

retainer he had paid to Dubin. After the Circuit Court granted

summary judgment for Dubin on Schmidt’s contract claims, the

Circuit Court awarded Dubin attorneys’ fees in the amount of

$25,000 ($100,000 x .25) under HRS § 607-14.

As for costs, the Circuit Court awarded Dubin

$1,468.88 “incurred by [Dubin’s] counsel in defense of this

action[.]” (Emphasis added.) HRS § 607-9 sets out the types of

costs that can be awarded. HRCP Rule 54(d)(1) provides in

relevant part that: “Except when express provision therefor is

made either in a statute or in these rules, costs shall be

allowed as of course to the prevailing party unless the court

otherwise directs[.]” (Emphasis added.)

Given the statutory and rule authority relied upon by

the Circuit Court, its award of attorneys’ fees and costs to

Dubin was grounded on Dubin being the prevailing party. Once

the ICA vacated the Circuit Court’s MPSJ Order #1, which

addressed Schmidt’s breach of contract claims, Dubin was no

longer the prevailing party as to the assumpsit claims and no

longer entitled to attorneys’ fees under HRS § 607-14.

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It appears the costs awarded by the Circuit Court were

based on Dubin prevailing in MPSJ Order #1 (as to the breach of

contract claims) as well as MPSJ Order #2 (as to the HRS Chapter

480 and malpractice claims). To the extent the Circuit Court

awarded costs to Dubin as the prevailing party on MPSJ Order #1,

that basis no longer existed once the ICA vacated MPSJ Order #1.

However, to the extent the costs award was based on MPSJ Order

#2, that basis remained because Schmidt did not appeal that part

of the Circuit Court’s rulings.3

Given these circumstances, after vacating MPSJ Order

#1 on Schmidt’s breach of contract claims, the ICA erred by then

stating in the SDO that the Circuit Court’s Final Judgment “is

affirmed in all other respects.” The ICA affirmed the Final

Judgment on the attorneys’ fees and costs award to Dubin when it

had just vacated the primary grounds on which Dubin had been the

prevailing party in the Circuit Court.

In Yoshikawa, this court held that “when a judgment

upon which attorneys’ fees and costs were based has been

vacated, attorneys’ fees and costs arising out of that judgment

should also be vacated[.]” 149 Hawai‘i at 418, 493 P.3d at 940.

Yoshikawa applies here. In that case, the ICA “vacated the

summary judgment but affirmed the related attorneys’ fees and

3 On remand, although we vacate the Fees/Costs Order, the Circuit Court may consider among other things, its costs award based on its MPSJ Order #2.

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costs awards because [the appellant,] Yoshikawa[,] had not

specifically addressed them in his appellate briefs.” 149

Hawai‘i at 418, 493 P.3d at 940. This court vacated the ICA’s

judgment on appeal to the extent it affirmed the circuit court’s

grant of attorneys’ fees and costs which arose from the vacated

summary judgment. Id.

Here, like in Yoshikawa, Schmidt did not directly

challenge the award of attorneys’ fees and costs to Dubin in his

briefing to the ICA. However, he challenged the primary

underlying basis that had made Dubin the prevailing party in the

Circuit Court for purposes of the fees and costs award. The ICA

vacated the Final Judgment to the extent summary judgment was

granted for Dubin on the breach of contract claims, but then

affirmed the Circuit Court’s judgment “in all other respects,”

which effectively affirmed the attorneys’ fees and costs award

to Dubin.

Moreover, on the same day the SDO was filed, Schmidt

filed a motion for reconsideration with the ICA, pointing out

the inconsistent result due to the SDO language affirming the

Final Judgment “in all other respects.” Schmidt asserted the

attorneys’ fees and costs awarded to Dubin should also be

vacated because the ICA vacated MPSJ Order #1 and Dubin was no

longer the prevailing party. The ICA denied the motion for

reconsideration, which is a further signal to the Circuit Court

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on remand that the ICA intended to affirm the award of

attorneys’ fees and costs to Dubin.4

Then, in the ICA’s Judgment on Appeal, it stated that

the Circuit Court’s Final Judgment was “affirmed in part and

vacated in part[,]” and that the case was “remanded to the

Circuit Court for further proceedings consistent with the

Summary Disposition Order.” The ICA’s Judgment on Appeal does

not contain the same language affirming the Circuit Court’s

Final Judgment “in all other respects,” but it does indicate

that the Final Judgment is “affirmed in part” and then requires

on remand that the Circuit Court’s further proceedings be

consistent with the SDO.

We conclude the ICA’s SDO and Judgment on Appeal are

inconsistent with Yoshikawa and would improperly preclude the

Circuit Court from further addressing the $26,468.88 fees and

costs award to Dubin. It is well established that on remand,

circuit courts are required “to comply strictly with the mandate

of the appellate court according to its true intent and meaning,

as determined by the directions given by the reviewing court[.]”

4 The denial of the reconsideration motion undercuts the Dissent’s suggestion that the Circuit Court would feel free to vacate the award of attorneys’ fees and costs. On remand, Dubin would undoubtedly argue that the ICA considered and precluded that very course of action when it denied the reconsideration motion. The ICA’s rulings as a whole, including its denial of the reconsideration motion, clearly indicate it affirmed the fees and costs award.

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Chun v. Bd. of Trs. of Emp.s’ Ret. Sys. of State of Hawai‘i, 106

Hawai‘i 416, 439, 106 P.3d 339, 362 (2005) (citation omitted);

see also In re Hawai‘i Elec. Light Co., 149 Hawai‘i 239, 241, 487

P.3d 708, 710 (2021).

Here, given the language of the ICA’s SDO, the ICA’s

denial of Schmidt’s motion for reconsideration, and its Judgment

on Appeal, the Circuit Court would be required “to comply

strictly with the mandate” of the ICA on remand, which indicates

that the attorneys’ fees and costs award to Dubin was affirmed

by the ICA. See Chun, 106 Hawai‘i at 439, 106 P.3d at 362. This

result would be inconsistent with the ICA’s vacating of MPSJ

Order #1, and contrary to Yoshikawa.

III. Conclusion

Based on the foregoing, we vacate in part the ICA’s

Judgment on Appeal to the extent it affirmed the Circuit Court’s

Final Judgment awarding $26,468.88 in attorneys’ fees and costs

to Dubin. We also vacate the Circuit Court’s Final Judgment to

the extent it awarded Dubin the $26,468.88 in attorneys’ fees

and costs; and the Circuit Court’s Fees/Costs Order.

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This case is remanded to the Circuit Court for further

proceedings consistent with this opinion.

Samuel P. King, Jr. /s/ Mark E. Recktenwald for petitioner Thomas Schmidt /s/ Sabrina S. McKenna Lois H. Yamaguchi Jodie D. Roeca /s/ Lisa M. Ginoza for respondents Gary Victor Dubin and Dubin Law Offices