Shultz v. Lujan

948 P.2d 558, 86 Haw. 137, 1997 Haw. App. LEXIS 144
CourtHawaii Intermediate Court of Appeals
DecidedSeptember 8, 1997
Docket19496
StatusPublished
Cited by6 cases

This text of 948 P.2d 558 (Shultz v. Lujan) 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
Shultz v. Lujan, 948 P.2d 558, 86 Haw. 137, 1997 Haw. App. LEXIS 144 (hawapp 1997).

Opinion

KIRIMITSU, Judge.

Defendant-Appellant Jerry Lujan (Lujan) appeals from the Fifth Circuit Court’s August 8, 1995 findings of fact, conclusions of law, and order (August 3, 1995 Order) and the November 22, 1995 judgment. The August 3, 1995 Order granted summary judgment in favor of Plaintiffs-Appellees Jerry and Dee Shultz (the Shultzes) and denied both Lujan’s November 10, 1993 motion to compel arbitration (November 10, 1993 Motion to Compel Arbitration) and Lujan’s April 18, 1994 motion to reconsider decision regarding motion to compel arbitration based on a recent supreme court case (April 18, 1994 Motion to Reconsider). Lujan contends that: (1) the circuit court erred in granting the Shultzes’ motion for summary judgment because there remained genuine issues of material fact; and (2) the circuit court erred in denying his motion to compel arbitration because he and the Shultzes agreed to arbitrate their dispute. We reverse that portion of the August 3, 1995 Order granting summary judgment, vacate that portion of the August 3, 1995 Order denying Lujan’s November 10, 1993 Motion to Compel Arbitration and April 18,1994 Motion to Reconsider, vacate the November 22, 1995 judgment, and remand for further proceedings consistent with this opinion.

I. FACTS

On September 11, 1992, Hurricane Iniki struck the Island of Kaua'i and severely damaged the Shultzes’ home. The Shultzes approached Lujan to repair their home. Lujan agreed. On October 12, 1992, the parties signed a contract, in which the Shultzes agreed to pay Lujan $153,000 to work on their house. The contract included work such as: repairing the first floor of their home; constructing a new second floor with a deck; painting the interior and exterior of the house; repairing the existing electrical system; and providing materials and labor for the rough plumbing work.

Lujan requested that the Shultzes apply for their building permit as owner/builders because Lujan was not a licensed general contractor, but rather a licensed C-5 specialty contractor. A C-5 specialty contractor performs cabinet and fixture work as well as non-struetural remodeling and repairs. Per the contract, however, Lujan and his employees worked on structural portions of the Shultzes’ house, including the foundation work to support the second floor, the beams and rafters for the second floor, and the joists and load-bearing sections. Moreover, Lujan ordered and paid for much of the building materials, hired and paid the workers, withheld taxes and medical insurance payment from the workers’ wages, directed the duties of his men who were involved in the repair and construction, and contracted with and paid the subcontractors. At the same time, the Shultzes visited the jobsite almost daily, inspected the work performed by Lujan and his workmen, and noted corrections which they felt were necessary. The Shultzes also fired members of the crew and, more than once, sent the crew home and off the jobsite.

As the work progressed, the Shultzes paid Lujan $90,000 in installments for work that included the plywood subfloor and rough dry in. However, a dispute over payments arose in late March 1993 because the costs for labor and materials exceeded those covered by the original contract. In a letter to the Shultzes, Lujan asserted that these extra costs covered items such as new doors for the lower level, materials and labor to enlarge the roof, extra windows by the stairs and on the second floor, and extra decking material. Moreover, Lujan claimed the cost overruns amounted to approximately $100,- *139 000. Lujan subsequently terminated his work on the project and the Shultzes finished repairing the house themselves.

In an effort to resolve their dispute, the parties entered into a mediation/arbitration submission agreement. In the agreement, Lujan claimed the Shultzes owed him approximately $100,000 for work done. Conversely, the Shultzes claimed that Lujan owed them approximately $86,000 for repair and remediation of improper, inadequate, and dangerous conditions present on the premises as a result of Lujan’s construction practices.

On August 29, 1993, the appointed arbitrator issued a letter to the parties confirming the dates for discovery and the arbitration hearing. On the same date, the Shultzes’ new counsel wrote to the arbitrator requesting that the arbitration be terminated immediately, based on the Hawaii Supreme Court case of Butler v. Obayashi, 71 Haw. 175, 177, 785 P.2d 1324, 1325 (App.1990), and Hawaii Revised Statutes (HRS) § 444-22 (1993). 1 Four days later, the Shultzes filed a complaint for declaratory judgment praying that Lujan be barred from commencing civil action to recover payment for the project pursuant to HRS § 444-22. In response, Lujan wrote to the arbitrator insisting that the arbitration continue. The Shultzes, however, apparently refused to proceed; on November 10, 1993, Lujan filed a motion seeking an order compelling the Shultzes to complete the arbitration process. Meanwhile, the Shultzes filed a motion for summary judgment.

After several hearings, the circuit court entered its August 3, 1995 Order denying Lujan’s November 10, 1993 Motion to Compel Arbitration and April 18, 1994 Motion to Reconsider and granting the Shultzes’ motion for summary judgment. The court specifically found that because Lujan worked outside and beyond the scope of his C-5 license, he was an unlicensed contractor on the Shultz project. The court, therefore, concluded that Lujan was prohibited under HRS § 444-22 from recovering in any civil action for work performed under the Shultz contract. 2 Judgment was entered on November 22, 1995. Lujan timely appealed.

II. STANDARD OF REVIEW

A. Summary Judgment

“On appeal, an order of summary judgment is reviewed under the same standard applied by the trial courts.” Pacific Int’l Servs. Corp. v. Hurip, 76 Hawai'i 209, 213, 873 P.2d 88, 92 (1994) (quoting Delos Reyes v. Kuboyama, 76 Hawaii 137, 138, 870 P.2d 1281, 1282 (1994)). “Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law.” Id. (quoting Kaapu v. Aloha Tower Dev. Corp., 74 Haw. 365, 379, 846 P.2d 882, 888 (1993) (citations and internal quotation marks omitted)). In considering whether a genuine issue of material fact has been created, the inferences to be drawn from the underlying facts alleged in the pleadings, admissions, affidavits and depositions must be viewed in the light most favorable to the party opposing the motion. Fochtman v.

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Bluebook (online)
948 P.2d 558, 86 Haw. 137, 1997 Haw. App. LEXIS 144, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shultz-v-lujan-hawapp-1997.