Standard Management, Inc. v. Kekona

53 P.3d 264, 99 Haw. 125, 2001 Haw. App. LEXIS 32
CourtHawaii Intermediate Court of Appeals
DecidedFebruary 28, 2001
Docket22750
StatusPublished
Cited by12 cases

This text of 53 P.3d 264 (Standard Management, Inc. v. Kekona) 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
Standard Management, Inc. v. Kekona, 53 P.3d 264, 99 Haw. 125, 2001 Haw. App. LEXIS 32 (hawapp 2001).

Opinion

Opinion of the Court by

LIM, J.

Third-Party Defendant-Appellant Paz F. Abastillas aka Paz F. Richter (Abastillas) appeals the first circuit court’s August 17, 1999 Final Judgment on Remand as to All Claims and All Parties, and the underlying Amended Stipulation for Dismissal with Prejudice (Amended Stipulation) of even date.

On appeal, Abastillas contends that the circuit court exceeded its jurisdiction in vacating the previous Stipulation For Dismissal With Prejudice of the Third-Party Complaint (the Stipulation), filed on December 10, 1998, and amending the same immediately after vacatur. Abastólas also argues that the circuit court abused its discretion in granting the Third-Party Plaintiffs-Appellees, Tamae M. Kekona and Benjamin Paul Kekona (collectively, the Kekonas), relief under Hawai'i Rules of Civil Procedure (HRCP) Rule 60(b), because “they had no grounds for seeking relief under Rule 60(b),” We disagree with Abastólas’ contentions and affirm the judgment, for the following reasons.

I. BACKGROUND.

The Kekonas met and became involved with Abastillas and attorney Robert A. Smith (Smith), Abastólas’ employer and “common-law husband,” in 1988. That year, Abastólas and Smith began to assist the Kekonas in the sale of their shuttle bus business and, in 1989, the Kekonas agreed to sell them business to buyers introduced to them by Smith.

Whilst Smith drafted the stock sale documents, Abastólas induced the elderly, married couple to enter into a partnership with her corporation, Standard Management, Inc. (SMI), for the purposes of bidding on and operating a tram service at Hanauma Bay. Smith, SMI’s legal counsel, drafted the partnership agreement and operating agreement for the new partnership. Amost from the moment they agreed to the partnership with SMI, the Kekonas were plunged into a morass of legal and financial disputes involving Abastillas, SMI and Smith, many of which continue to this day. 1

This appeal is the latest contest in the original litigation between the Kekonas and the Abastillas/Smith/SMI triad that began in 1989, and stems, in part, from this court’s decision in Standard Management v. Kekona, No. 18388, 87 Hawai'i 263, 963 P.2d 1361 (Haw.App. Nov. 25, 1997) (mem.).

In 1989, SMI filed suit against the Keko-nas, alleging unlawful ouster from the Ha-nauma Bay tram partnership. The Kekonas counterclaimed against SMI for breach of contract and filed a third-party complaint against Abastillas and Smith that alleged, inter alia, that the Kekonas were fraudulently induced into the partnership by the couple’s intentional misrepresentations regarding their business and professional expertise.

In 1993, after a four-week trial, a jury rendered a special verdict in favor of the Kekonas on the complaint, the counterclaim and the third-party complaint. 2 The jury awarded the Kekonas damages in the total amount of $703,750. The damages included:

(1) $152,500 in special and general damages and attorneys’ fees against SMI;
(2) $200,000 in general damages, $25,000 in punitive damages, and $56,250 in attorneys’ fees against Abastillas; and
(3) $270,000 in general damages against Smith.

*128 SMI, Abastillas and Smith appealed the Revised Judgment entered upon the jury’s verdict.

On November 25, 1997, we issued Standard Management, Inc. v. Kekona, No. 18388, 87 Hawai'i 263, 953 P.2d 1361 (Haw. App. Nov. 25, 1997) (mem.), partly affirming and partly vacating the September 2, 1994 Revised Judgment. In summary, we affirmed the $152,500 in damages and attorneys’ fees awarded against SMI and the $25,000 in punitive damages awarded against Abastillas. However, we remanded for a new trial on the issue of general damages against Abastillas for fraud, 3 and for a new trial on the negligence claim against Smith. Id. at 27-28.

On March 18, 1998, the circuit court set the trial on remand for the week of November 30, 1998. Before trial started, however, the parties agreed to settle. The Kekonas agreed to accept $6,000 from Smith and $3,000 from Abastillas.

To settle the negligence claim against Smith, the Kekonas filed them Third-Party Plaintiffs Kekonas’ Acceptance of Third-Party Defendant Robert A. Smith’s Offer of Judgment. However, in their case against Abastillas, the Kekonas agreed to enter into the Stipulation, upon receipt of the $3,000 settlement payment.' 4 The stipulation, in its entirety, read as follows:

COME NOW the parties hereto, by and through them respective counsel, and hereby stipulate, pursuant to Rule 4.1(a)(1)(B) 5 of the Hawaii Rules of Civil Procedure, that the Third-Party Complaint of BENJAMIN PAUL KEKONA and TAMAE M. KEKONA against PAZ F. ABASTIL-LAS, aMa PAZ F. RICHTER, is hereby dismissed with prejudice . Counsel for all parties appearing in this action have signed this Stipulation for Dismissal With Prejudice.

(Emphases and footnote added.)

The parties filed the Stipulation on December 10, 1998. The filing did not include the terms of the settlement agreement. However, the parties did read the terms of the settlement agreement into the record at a proceeding held on December 2,1998:

[the Kekonas attorney, Fred Paul Benco (Benco) ]: The third-party plaintiffs will receive the sum of $3,000 from third-party defendant Abastillas on or by December 25th, 1998 in exchange for a dismissal with prejudice which will be signed by the attorneys and submitted to the Court. If the monies are not received by that time, then a judgment will enter in favor of the Kekonas against Ms. Abastillas for the $3,000.

A few weeks after the signing of the Stipulation, the Kekonas learned that Abastillas, through Smith, was claiming that the settlement encompassed the $25,000 punitive damages award we had affirmed on appeal. This was especially surprising to the Kekonas, given their understanding that the Stipulation settled only their general damages claim against Abastillas. Hence, in this appeal, the Kekonas maintain that it was never intended that they relinquish them $25,000 punitive damages judgment. In contrast, Abastillas claims “that she intended just the opposite: she was willing to settle only if that claim was given up through a Rule 41 stipulation for dismissal with prejudice.”

On February 2, 1999, the Kekonas filed their Motion to Vacate Stipulation for Dismissal and/or for New Entry of Dismissal Nunc Pro Tunc and/or for Other Appropri *129 ate Relief (the Motion to Vacate). They brought the motion under various subsections of HRCP Rule 60(b), including subsection (6). In support of the motion, Benco, swore in his affidavit that

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Cite This Page — Counsel Stack

Bluebook (online)
53 P.3d 264, 99 Haw. 125, 2001 Haw. App. LEXIS 32, Counsel Stack Legal Research, https://law.counselstack.com/opinion/standard-management-inc-v-kekona-hawapp-2001.