McKenna v. Association of Apartment Owners of Elima Lani.

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Electronically Filed
Supreme Court
SCWC-XX-XXXXXXX
25-JUN-2020
08:02 AM

IN THE SUPREME COURT OF THE STATE OF HAWAII

---o0o---

CAROL L. McKENNA,
Petitioner/Plaintiff-Appellant,

vs.

ASSOCIATION OF APARTMENT OWNERS OF ELIMA LANI,
a Hawaii nonprofit corporation; CERTIFIED MANAGEMENT, INC.,
dba Certified Hawaii; WELLS FARGO BANK, N.A.; and ROSS ANDALORO,
Respondents/Defendants/Cross-Claim Defendants/
Cross-Claimants-Appellees,

and

GEOFFREY S. KIM and HAWAIIAN ISLES ADJUSTING CO., LLC,
a Hawaii limited liability company;
Respondents/Defendants/Cross-Claimants/Cross-Claim Defendants.

SCWC-XX-XXXXXXX

CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
(CAAP-XX-XXXXXXX; CIV. NO. 11-1-627K)

JUNE 25, 2020

RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON, JJ.

OPINION OF THE COURT BY NAKAYAMA, J.

This case arose from settlement negotiations between
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Petitioner/Plaintiff-Appellant Carol L. McKenna (McKenna) and

Respondents/Defendants-Appellants Association of Apartment

Owners of Elima Lani, Certified Management, Inc., Wells Fargo

Bank, and Ross Andaloro (collectively, Defendants) relating to

a dispute between the parties about water and mold damage to

McKenna’s condominium. At the close of an October 21, 2014

settlement conference, at which McKenna was represented by

counsel, the circuit court and the parties acknowledged that

the parties had reached a settlement and went on the record to

identify the “essential terms” of the agreement. Thereafter,

McKenna refused to sign the settlement documents. McKenna has

since represented herself pro se.

On November 5, 2014, Respondents filed a motion to

enforce the settlement agreement (Motion to Enforce) in the

Circuit Court of the Third Circuit (circuit court) and

attached a proposed written settlement agreement and

stipulation. McKenna opposed the Motion to Enforce.

After a November 24, 2014 hearing on the Motion to

Enforce, McKenna filed a Motion for an Evidentiary Hearing.

The circuit court denied McKenna’s Motion for an Evidentiary

Hearing and issued an order granting Defendants’ Motion to

Enforce.

In its order, the circuit court found that the

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parties had entered into a binding settlement agreement at the

settlement conference but that the proposed written settlement

agreement contained terms beyond those that had been agreed to

at the settlement conference. The circuit court therefore

struck those terms and created a revised settlement agreement.

The circuit court entered a final judgment on March 10, 2016,

dismissing all of McKenna’s claims with prejudice.

The Intermediate Court of Appeals (ICA) affirmed the

circuit court’s final judgment. McKenna filed an application

for writ of certiorari.

Genuine issues of material fact exist as to whether

the parties reached a valid settlement agreement and as to

which terms the parties agreed to at the settlement

conference. As such, pursuant to the ICA’s holding in Miller

v. Manuel, 9 Haw. App. 56, 64, 828 P.2d 286, 292 (App. 1991),

the circuit court should have granted McKenna’s motion for an

evidentiary hearing to resolve these issues. Instead, the

circuit court revised the proposed settlement agreement itself

before issuing an order enforcing the revised settlement

agreement.

We therefore vacate the ICA’s September 17, 2018

Judgment on Appeal. We remand the case to the circuit court

with instructions that the circuit court hold an evidentiary

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hearing and for further proceedings consistent with this

opinion.

I. BACKGROUND

At the outset of this dispute, McKenna was the owner

and occupier of a condominium unit at Elima Lani in South

Kohala, Hawaiʻi. Association of Apartment Owners of Elima

Lani Condominiums, a Hawaii Nonprofit Corporation (AOAO) was

the governing body of the condominium complex that includes

McKenna’s condominium. Certified Management, Inc. dba

Certified Hawaii (Certified Management), was the managing

agent of the Elima Lani condominiums. Ross Andaloro owned the

condominium above McKenna’s. Wells Fargo Bank, N.A. was the

previous owner of Ross Andaloro’s condominium.1

In June 2010, McKenna returned home to discover

extensive water damage in her condominium, which appeared to

have been caused by a leak in the unit above hers (Ross

Andaloro’s unit). McKenna alleged that she contacted AOAO to

address the leak, but that AOAO did not endeavor to fix the

leak or enable McKenna to do so. Several months later,

McKenna identified mold in her condominium and she began to

1 McKenna claims that “[d]uring the period of time that the leak in
[the] Andaloro unit was causing water to accumulate in the ceiling cavities
of [McKenna’s] unit . . . the Andaloro unit was owned by or in the possession
of Wells Fargo” and that during that time, Wells Fargo was attempting to sell
the unit to Andaloro, who at some point did purchase the unit.

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suffer symptoms associated with exposure to contaminants.

McKenna claimed that she was forced to vacate her condominium

due to the mold contamination. On December 20, 2011, McKenna

filed a Complaint in the circuit court against Defendants

alleging, inter alia, negligence and misrepresentation.

Over the following two years, the parties engaged in

two mediation sessions and arbitration.

A. Circuit Court Proceedings2

1. Settlement Conference Terms

On October 21, 2014, McKenna attended a settlement

conference with Defendants. At the close of the conference,

the parties went on the record, acknowledged that they had

reached a settlement, and described the “essential terms” of

the agreement. McKenna agreed to the terms in the following

exchange:

THE COURT: Okay. And my understanding is that the
parties have reached a settlement agreement in this case.
That the terms of the settlement include – the essential
terms of the settlement agreement are that the defendants
shall pay plaintiff $60,000 in cash. The Association of
Apartment Owners of Elima Lani will also release any lien
and outstanding amounts owed by Ms. McKenna to the
association.
That there be – it’s a general-damages-only release,
and that the parties will execute a settlement agreement
with mutual releases and standard settlement terms and a
dismissal of the case.
Have I accurately stated the settlement agreement
from the perspective of the plaintiff, [McKenna’s
counsel]?

2 The Honorable Melvin H. Fujino presided over entry of the Final
Judgment. The Honorable Elizabeth A. Strance presided over all other
proceedings.

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[MCKENNA’S COUNSEL]: Yes, your Honor.

THE COURT: And Ms. McKenna, do you agree to the
terms of the settlement?

MS. MCKENNA: Yes.

THE COURT: Okay. And [Wells Fargo’s counsel], have I
accurately stated the settlement agreement from the
perspective of your client, Wells Fargo?

[WELLS FARGO’S COUNSEL]: Yes, your Honor.

THE COURT: And do you have authority on behalf of
your client to enter into the settlement agreement?

[WELLS FARGO’S COUNSEL]: I do, your Honor.

THE COURT: Okay. And [AOAO’s counsel], have I
accurately stated the settlement agreement from the
perspective of the association and of Certified
Management?

[AOAO’S COUNSEL]: One clarification, your Honor.
It’s a dismissal with prejudice.

THE COURT: Yes.

The parties agreed that Wells Fargo’s counsel would draft a

written settlement agreement reflecting the terms described

and circulate it within fourteen days. All parties stipulated

that the circuit court could retain jurisdiction to enforce

the settlement agreement.

2. The Proposed Settlement Agreement

Wells Fargo’s counsel thereafter circulated a

proposed settlement agreement to the parties, including

McKenna’s attorney. McKenna instructed her attorney not to

sign anything on her behalf, as she did not agree to the

settlement terms. McKenna did not sign the settlement

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documents.

McKenna’s attorney filed a motion to withdraw as

counsel on October 27, 2014, citing McKenna’s refusal to sign

settlement documents. The circuit court granted the motion.

McKenna has proceeded pro se since her counsel’s withdrawal.

Defendants filed their Motion to Enforce on November

5, 2014. Defendants requested that the motion be granted

and that an Order enter herein enforcing the terms and
conditions of the settlement reached by Plaintiff and the
Defendants at the Settlement held on October 21, 2014 and
requiring Plaintiff to execute the Settlement Agreement
and Stipulation and or otherwise permitting the Clerk of
Court, pursuant to Rule 10(e) of the Rules of the Circuit
Courts of the State of Hawaii, to sign the
Stipulation . . . .

On November 14, 2014, McKenna filed an opposition to

Defendants’ Motion to Enforce. McKenna attached a declaration

to her opposition in which she claimed that, essentially, her

verbal assent to the settlement conference terms was invalid.

McKenna asserted,

I was told during the settlement conference multiple times
by [the circuit court] “It is not about the merits of the
case, you cannot afford $100,000 to go to trial.” During
the same conversation I replied to [the circuit court]
directly this case is well documented and I feel confident
presenting emails and professional reports to professional
witnesses pro-se. [The circuit court] replied to me I
could not afford the professional witnesses.

McKenna also stated that “[t]owards the end of the settlement

conference when we were between $30-$60K, I was feeling sick

[and] asked to leave and was told no, I could not by [the

circuit court].”

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The circuit court held a hearing on Defendants’

Motion to Enforce on November 24, 2014. At the hearing,

McKenna argued that there had been no meeting of the minds at

the settlement conference, that the settlement agreement

lacked essential terms about repairing her condominium, that

the proposed settlement agreement contained terms she had not

agreed to, and that the settlement was invalid because the

parties did not attend the settlement conference but sent

attorneys in their stead. After confirming that each

Defendant had given full settlement authority to their

attorney, the circuit court granted the Motion to Enforce,

finding that there was a meeting of the minds as to the

essential terms of the settlement. However, the circuit court

found that the settlement agreement contained terms beyond

what had been agreed to at the settlement conference. The

circuit court stated:

So the court will grant the motion to enforce
settlement. With respect to the specific settlement
agreement, the court will take the matter under advisement
as to what, uh, it will, uh, allow a clerk to enter. Um,
the court will not be going outside the terms of the
settlement. Uh, there were no agreements regarding non-
disparagement and things of that ilk.
So the court will look carefully at the, uh,
settlement agreement and/or, uh, issue something separate
from, uh, what is submitted to the court. But with respect
to the essential terms, the court finds that they were
agreed upon and will, uh, grant the motion to enforce
settlement.

Defendants submitted a proposed order granting their

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Motion to Enforce. McKenna filed a motion objecting to the

proposed order. Therein, McKenna claimed that the terms of

the proposed settlement agreement were different from those

she agreed to at the settlement conference.

In her motion, McKenna reiterated that, for several

reasons, her assent to the settlement conference terms was

invalid. For example, McKenna argued that the circuit court

compelled McKenna to settle when the circuit court “improperly

introduced [the] confidential Mediation amount as a starting

point for settlement negotiations . . . said [McKenna] could

not leave when [she] asked to go [and] repeatedly insisted

[McKenna] could not afford to go to trial or afford [] expert

witnesses.” McKenna also contended that she had not been

present at the drafting of the proposed settlement agreement,

that she was “coerced, and under duress” at the settlement

conference, and that she “never agreed at the October 21, 2014

Settlement Conference to all the Material and Essential Terms

and Conditions as described and enumerated in the [proposed

settlement agreement][.]” Defendants opposed the motion.

McKenna filed a Motion for an Evidentiary Hearing on

December 2, 2014. Therein, McKenna argued that genuine issues

of material fact were present and that as the circuit court

should view motions to enforce settlement agreements by the

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same standard as motions for summary judgment, she was

entitled to an evidentiary hearing.

On February 6, 2015, the circuit court held a

hearing on McKenna’s Motion for an Evidentiary Hearing. At

the hearing, the circuit court found that the motion was

essentially a motion to reconsider the court’s oral grant of

Defendants’ motion to enforce, for which an order had not yet

been issued. Accordingly, the circuit court denied McKenna’s

Motion for an Evidentiary Hearing:

The Court will deny the motion to order evidentiary
hearing, finding that the motion is essentially a motion
to reconsider the motion to enforce settlement for which
an order has not been issued.
To the extent that the parties are requesting
further ruling of the Court, the Court finds that the
settlement conference that was held on October 21st, 2014,
was an arm’s length settlement conference.
All parties were represented by counsel. The Court
satisfied itself that all counsel had authority of their
clients, if their client was not here, that they had the
appropriate authority to act. The Court was satisfied that
the defense counsel had authority.
To that end then, the Court conducted extensive
settlement conferences in which Ms. McKenna was a full and
active participant [] with her attorney. As the result of
that lengthy settlement conference, a settlement agreement
was reached, the material terms of which were placed on
the record.
Based upon the record before it, the Court can find
no misconduct on the part of any defense counsel based
upon their conduct and representations that were made
during the course of the settlement conference and in
terms of their conduct since.
To the extent that no settlement agreement has been
executed, that [sic] Court finds that that lays squarely
in the lap of Ms. McKenna. Ms. McKenna indicated, shortly
after the settlement conference, her intention not to
execute a settlement agreement. As a result of that, her
attorney filed a motion to withdraw as counsel. That
motion was granted.
Prior to the withdrawal of counsel, it would have
been inappropriate, and that would have been attorney
misconduct had either, any counsel attempted to contact

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and negotiate directly with Ms. McKenna regarding any
matter relating to settlement. In large part, the motion
to order evidentiary hearing is attempts [sic] to either
reargue the underlying merits of the case, which Ms.
McKenna gave up in reaching a settlement in this case, or
were previously covered during the motion to enforce
settlement.
For all of those reasons, the motion to order
evidentiary hearing is denied.

The circuit court entered a written order denying McKenna’s

Motion for an Evidentiary Hearing on March 4, 2015 (Order

Denying Motion for Evidentiary Hearing).

3. Revised Settlement Agreement Terms

On February 6, 2015, the circuit court entered an

order granting Defendants’ Motion to Enforce (Order Granting

Motion to Enforce). The circuit court found that “[t]he

parties herein entered into a binding settlement agreement

during a settlement conference held on October 21, 2014.” The

circuit court also found that “[t]he [proposed settlement

agreement] submitted to [McKenna] contains terms beyond the

material terms of the Settlement Agreement.” The circuit

court accordingly struck the following provisions of the

Settlement and Release Agreement:

a. Paragraph 4 Attorneys’ Fees: All language after “The
Settling Parties shall bear their respective attorneys’
fees and costs incurred in the Lawsuit.
b. Paragraph 5, Non-Disparagement shall be stricken in
its entirety.
c. Paragraph 6, Release by Plaintiff, [] all language
after the word “Lawsuit”.
d. Paragraph 8, Release of Unknown Claims shall be
stricken in its entirety.
e. Paragraph 11, Indemnification [] all language after
SAC is stricken.
f. Paragraph 12(c) Acknowldgment [sic]. Inasmuch as

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Plaintiff has refused to participate in the drafting of
the Settlement Agreement, she cannot be deemed drafter.
g. Paragraph 13. Tax Consequences shall be stricken in
its entirety.
h. Paragraph 18, Further Assurances shall be stricken in
its entirety.

The circuit court ordered that Defendants revise the proposed

settlement agreement in conformity with the stricken

provisions (revised settlement agreement) and submit it to the

circuit court for execution by the Clerk of Court. The

circuit court also ordered that Defendants submit the

stipulation for dismissal with prejudice to the circuit court

for execution by the Clerk of Court. Defendants submitted the

revised settlement agreement and the stipulation for

dismissal. The case was dismissed on March 16, 2015.3 The

circuit court entered a Final Judgment in favor of Defendants

on March 10, 2016.

B. ICA Proceedings

McKenna filed a notice of appeal on March 31, 2016.

McKenna appealed: (1) the February 6, 2015 Order Granting

Motion to Enforce; (2) the March 4, 2015 Order Denying Motion

for an Evidentiary Hearing; and (3) the circuit court’s March

10, 2016 Final Judgment. McKenna argued, inter alia, that the

3 McKenna filed various unsuccessful motions attempting to appeal
the stipulation for dismissal and restore the proceedings. McKenna also
filed an appeal to the ICA, which was dismissed for lack of appellate
jurisdiction. Meanwhile, McKenna’s former counsel moved for distribution of
settlement proceeds, which the circuit court granted.

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settlement agreement was not executed voluntarily, that the

circuit court rewrote the settlement agreement such that it

was materially different than the settlement agreement

originally drafted by Defendants, and that there was no mutual

assent or meeting of the minds at the settlement conference.

In the Defendants’ answering brief, they argued that

there was a meeting of the minds as to the terms of the

settlement agreement and that McKenna suffered no prejudice by

her failure to personally participate in drafting a written

settlement agreement. Defendants also argued that the circuit

court used its “inherent power to modify the written

agreement” and “revised the written settlement agreement to

delete provisions not expressly agreed upon at the settlement

conference.”

On June 29, 2018, the ICA entered a Summary

Disposition Order (SDO) affirming the circuit court. McKenna

v. Ass’n of Apartment Owners of Elima Lani, NO. CAAP-16-284,

2018 WL 3199233 (App. June 29, 2018). The ICA reasoned that

as McKenna “does not dispute that the October 21, 2014

Settlement Offer was orally accepted by [her] at that

proceeding,” there was “no indication that McKenna did not

intend to be bound to the resulting judgment or dismissal with

prejudice. Therefore, the agreement was entered into

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voluntarily and there was a meeting of the minds, and a

binding settlement agreement was formed.” The ICA further

held that the revised settlement agreement “did not materially

change the essential terms agreed to at the Settlement

Conference, and in fact, included several edits to assure that

the agreement was not outside the scope of what was

discussed.”

The ICA entered its Judgment on Appeal on September

17, 2018. McKenna filed an application for writ of

certiorari.

II. STANDARD OF REVIEW

A motion to enforce a settlement agreement is

reviewed by the same standard as a motion for summary

judgment. Miller, 9 Haw. App. at 64, 828 P.2d at 292. We

review the grant or denial of a motion for summary judgment

“de novo under the same standard applied by the circuit

court.” Dairy Rd. Partners v. Island Ins. Co., 92 Hawaii 398,

411, 992 P.2d 93, 106 (2000). Summary judgment is appropriate

if “there is no genuine issue as to any material fact and []

the moving party is entitled to judgment as a matter of law.”

Hawaii Rules of Civil Procedure (HRCP) Rule 56(c).

Accordingly, granting a motion to enforce a settlement

agreement is appropriate if “there [is] no genuine issue of

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material fact and [] as a matter of law the parties [] entered

into a valid compromise agreement.” Miller, 9 Haw. App. at

64, 828 P.2d at 292.

III. DISCUSSION

McKenna raises the following questions on

application for writ of certiorari:

1. Whether the ICA gravely erred in holding that McKenna
had a meeting of the minds as to the October 21, 2014
original agreement?

2. Whether the trial court’s revisions of the original
draft agreement and enforcement of the new and revised
court ordered agreement was proper over McKenna’s
objection and lack of consent.

We interpret McKenna’s application as arguing that

the circuit court erred in enforcing the revised settlement

agreement without granting McKenna’s motion for an evidentiary

hearing, in light of the genuine issues of material fact

expressed in McKenna’s questions on certiorari.4 We agree

that McKenna raises genuine issues of material fact as to the

validity of her assent to the settlement agreement and as to

the terms agreed to at the October 21, 2014 settlement.

4 While McKenna does not explicitly contend that the circuit court
improperly denied her motion for an evidentiary hearing, McKenna references
the circuit court’s erroneous failure to conduct an evidentiary hearing
multiple times in her application. Moreover, McKenna challenged the order
denying her motion for an evidentiary hearing in her August 7, 2016 Opening
Brief to the ICA. Because McKenna is a pro se litigant, we construe her
arguments liberally. See Waltrip v. TS Enters., Inc., 140 Hawaii 226, 231,
398 P.3d 815, 820 (2016). Accordingly, we construe McKenna’s argument to be
that the circuit court erroneously denied her motion for an evidentiary
hearing. We consider the issue preserved.

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Because the standard for granting a motion to enforce a

settlement agreement is the same standard that governs the

grant or denial of a motion for summary judgment, the circuit

court erred in granting Defendants’ Motion to Enforce when

genuine issues of material fact exist. The evidentiary

hearing requested by McKenna will allow a full record to be

developed to answer the questions raised in McKenna’s

application.

In Miller, the ICA held that an order granting a

motion to enforce a settlement agreement is reviewed by the

same standard as that of a motion for summary judgment. 9

Haw. App. at 64, 828 P.2d at 292. As such, “the question is

whether the evidence presented to the trial court indicated

that there was no genuine issue of material fact and that as a

matter of law the parties had entered into a valid compromise

agreement.” Id. The ICA further held that the circuit court

must hold an evidentiary hearing if genuine issues of material

fact exist regarding the validity of a settlement agreement.

Id. at 64-65, 828 P.2d at 292. If, at the hearing, the

circuit court determines that there was no valid settlement

agreement, the circuit court should set the case for trial on

the merits. Id. at 71, 828 P.2d 295.

Miller involved a contested settlement agreement

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concerning a dispute to quiet title to interests in real

property on the island of Hawaii. Id. at 59, 828 P.2d at 289.

There, an agreement was reached at a settlement conference,

and a hand-written memorandum was executed by all parties.

Id. at 59-60, 828 P.2d at 289. Subsequently, certain parties

filed a motion to enforce settlement and attached a copy of

the hand-written agreement and a stipulation, the terms of

which differed from those of the agreement. Id. at 60, 828

P.2d at 290. The motion requested that the court enter an

order approving the stipulation, or in the alternative, enter

a judgment enforcing the agreement’s terms. Id. The circuit

court granted the motion and entered an order enforcing

certain terms of the stipulation and the agreement. Id. at

61, 828 P.2d 290. The parties contesting the stipulation

filed a motion asking the court to reconsider the order and to

hold an evidentiary hearing, which the circuit court later

denied. Id.

In vacating the circuit court’s decision, the ICA

concluded that the enforcement of a settlement agreement must

be treated like a motion for summary judgment. Id. at 64, 828

P.2d at 292. The ICA stated,

[S]ince very important rights are at stake in most cases,
appellate courts must strive to ensure that the purported
compromise agreement sought to be enforced is truly an
agreement of the parties. A motion to enforce a
settlement contract is neither ordinary nor

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routine . . . . Its relative simplicity is a concession to
the policy favoring settlements, but only to the extent
that full and fair opportunities to prove one’s points are
substantially preserved.

Id. at 63, 828 P.2d at 291 (internal quotations omitted).

Evaluating the settlement agreement by a summary judgment

standard, the ICA held that genuine issues of material fact

remained and that the circuit court should have set the case

for trial on the merits or ordered an evidentiary hearing on

the validity of the settlement agreement. Id. at 64-65, 828

P.2d at 292. Noting that discrepancies existed between the

hand-written agreement terms and the stipulation terms, the

ICA held that those discrepancies per se created a genuine

issue as to whether there was a meeting of the minds regarding

the terms of either document. Id. at 67, 828 P.2d at 293.

We adopt the ICA’s analysis in Miller because it is

consistent with Hawaii law and that of other jurisdictions,

and because public policy favors this approach. “[S]ummary

judgment is proper where the moving party demonstrates that

there is no genuine issue of material fact and it is entitled

to judgment as a matter of law.” Kaneohe Bay Cruises, Inc. v.

Hirata, 75 Haw. 250, 258, 861 P.2d 1, 6 (1993). In the

context of summary judgment, if a trial court finds that

genuine issues of material fact exist, summary judgment is

denied and the parties proceed to trial on the merits. HRCP

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Rule 56(d). Because enforcing a disputed settlement similarly

involves summarily adjudicating a case, it is consistent with

our courts’ summary judgment practices that the trial court

deny a motion to enforce a settlement where genuine issues of

material fact exist surrounding the settlement. In this

matter, because McKenna requested an evidentiary hearing and

not an immediate trial, the circuit court should have, at a

minimum, held an evidentiary hearing on whether a valid

settlement agreement existed. If the circuit court found that

no valid settlement agreement existed, it then could have

proceeded to a trial on the merits of the underlying lawsuit.

Other jurisdictions also treat motions to enforce

settlement as motions for summary judgment and have held that

courts are required to hold an evidentiary hearing to resolve

genuine issues of material fact before granting a motion for

summary judgment. For example, the Nevada Supreme Court held

in Resnick v. Valente, 637 P.2d 1205, 1206 (Nev. 1981), that

an alleged settlement agreement could not be summarily reduced

to judgment upon the motion of one party without an

evidentiary hearing. The federal courts have also adopted

this practice. The United States Court of Appeals for the

Ninth Circuit stated that “[w]here material facts concerning

the existence or terms of an agreement to settle are in

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dispute, the parties must be allowed an evidentiary hearing.”

Callie v. Near, 829 F.2d 888, 890 (9th Cir. 1987) (emphasis in

original).

We adopt the process of allowing an evidentiary

hearing instead of immediately scheduling the matter for trial

on the underlying claims based on the public policy supporting

the enforcement of settlement agreements. See State Farm Fire

and Cas. Co. v. Pac. Rent-All, Inc., 90 Hawaii 315, 323, 978

P.2d 753, 761 (1999). This public policy position underpins

the procedural distinction between the denial of a motion to

enforce a settlement and the denial of a motion for summary

judgment. Whereas, when genuine issues of material fact

preclude the grant of summary judgment, the circuit court must

set the case for trial on the merits, see HRCP Rule 56(d),

when genuine issues of material fact as to the terms or

validity of a settlement agreement preclude the enforcement of

that agreement, the circuit court may hold an evidentiary

hearing to address those genuine issues in lieu of proceeding

directly to trial on the merits. See Miller, 9 Haw. App. at

63, 828 P.2d at 291. Because the policy supporting settlement

should not be invoked at the expense of depriving litigants of

the full and fair opportunity to have a trial on the merits,

however, the circuit court should set a matter for trial on

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the merits if it concludes at an evidentiary hearing that the

parties did not enter into a valid settlement agreement.

In light of the foregoing, we hold that a trial

court errs in granting a motion to enforce a settlement

agreement when genuine issues of material fact exist regarding

the existence and terms of the settlement agreement. See id.

at 64, 828 P.2d at 292. We further hold that the circuit

court must, at minimum, hold an evidentiary hearing as to

those genuine issues of fact.

As settlement agreements are contracts, Dowsett v.

Cashman, 2 Haw. App. 77, 83, 625 P.2d 1064, 1068 (App. 1981),

however, the traditional requirements for contract formation

must be met for an enforceable settlement to exist. Carson v.

Saito, 53 Haw. 178, 182, 489 P.2d 636, 638 (1971) (“We have

held that 'the parties not having reached agreement upon all

of the essential and material terms, conditions or covenants

of the agreement, there was failure of mutual assent or a

meeting of the minds and therefore no binding contract.”) At

the evidentiary hearing requested by McKenna, the circuit

court must therefore determine whether there was a meeting of

the minds as to essential and material terms.5

5 Pursuant to Section 204 of the Restatement (Second) of Contracts
(1981), however:

(continued. . .)

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Here, McKenna adequately refuted Defendants’

allegation that there was no genuine issue of material fact.

“The moving party in a summary judgment proceeding has the

obligation to show . . . that there is no genuine issue of

material fact.” Miller, 9 Haw. App. at 65, 828 P.2d at 292.

Once the moving party has satisfied its burden, “the opposing

party must come forward, through affidavit or other evidence,

with specific facts showing that there is a genuine issue of

material fact.” Id. However, “the alleged facts and the

inferences logically drawn therefrom must be viewed in the

light most favorable to the non-moving party.” Id.

Defendants’ Motion to Enforce simply alleged that

the parties entered into a binding settlement agreement at the

settlement conference and attached the proposed settlement

agreement and stipulation for dismissal. McKenna attached a

declaration to her opposition to Defendants’ Motion to Enforce

asserting that (1) the proposed settlement terms were

different than the settlement conference terms, and that, (2)

due to certain factors, her verbal assent to the settlement

When the parties to a bargain sufficiently defined to be a
contract have not agreed with respect to a term which is
essential to a determination of their rights and duties, a
term which is reasonable in the circumstances is supplied
by the court.

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conference terms was invalid.

McKenna argues, and we agree, that viewed in the

light most favorable to McKenna, there exist genuine issues of

material fact regarding the existence and terms of the

settlement agreement. First, McKenna raises a genuine issue

of material fact as to the validity of her assent to the

settlement conference terms. “Whether or not the parties

entered into an agreement is essentially a question of fact.”

Island Directory Co. v. Iva’s Kinimaka Enters., Inc., 10 Haw.

App. 15, 23, 859 P.2d 935, 940 (App. 1993). In McKenna’s

declaration attached to her opposition to Defendants’ Motion

to Enforce, McKenna claimed that, essentially, her verbal

assent to the settlement conference terms was invalid because

she was ill at the settlement conference and was not allowed

to leave. She also stated that the circuit court coerced her

into settling by repeatedly insisting that she could not

afford to go to trial. These claims call into question, and

thus demonstrate a genuine issue as to, the validity of

McKenna’s assent at the settlement conference.

Second, like the discrepancy between the stipulation

and agreement alleged in Miller, here the terms of the

proposed settlement agreement differed from the settlement

conference terms. The proposed settlement agreement contained

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twelve provisions not placed on the record at the settlement

conference: (1) attorneys’ fees, (2) warranties and

representations, (3) indemnification, (4) acknowledgments, (5)

compromise of disputed claims, (6) severability, (7) binding

effect, (8) governing law, (9) counterparts, (10) integration

clause, (11) time is of the essence, and (12) headings and

captions. Defendants argued that these terms are “standard

provisions commonly found in settlement agreements.”

However, the circuit court struck several of the additional

provisions, finding that they were beyond what was agreed to

at the settlement conference. The difference between the

proposed settlement agreement terms and the settlement

conference terms evinces a genuine issue as to which terms

were explicitly and implicitly agreed to at the settlement

conference.

The circuit court acknowledged in its Order Granting

Motion to Enforce that the proposed settlement agreement

contained terms beyond what the parties agreed to at the

settlement conference. Pursuant to the ICA’s analysis in

Miller, this discrepancy alone creates a genuine issue of

material fact. See 9 Haw. App. at 67, 828 P.2d at 293. The

circuit court therefore erred in granting Defendants’ Motion

to Enforce in light of the genuine issue of which terms the

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parties agreed to at the settlement conference.

As courts are “more indulgent towards the materials

submitted by the non-moving party,” Miller, 9 Haw. App. at 66,

828 P.2d at 292, McKenna adequately refuted Defendants’

showing and demonstrated that genuine issues of material fact

exist as to McKenna’s assent to the settlement agreement and

as to the terms to which the parties agreed at the October 21,

2014 settlement conference. Pursuant to the standard that we

now adopt, we hold that the circuit court erred in granting

Defendants’ Motion to Enforce because genuine issues of

material fact exist as to the existence and terms of the

original settlement agreement. Rather than granting

Defendants’ Motion to Enforce, the circuit court should have

granted McKenna’s motion for an evidentiary hearing.

On remand, the circuit court should hold an

evidentiary hearing to address the conflicting facts to

determine whether the parties entered into a valid settlement

agreement.

IV. CONCLUSION

We hold that, as with a motion for summary judgment,

the circuit court may not grant a motion to enforce a

settlement agreement when genuine issues of material fact

remain. Here, McKenna raised genuine issues of material fact

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regarding her assent to the settlement agreement and the

discrepancy between the terms of the revised settlement

agreement and the original settlement agreement. The circuit

court erroneously denied McKenna’s request for an evidentiary

hearing, striking certain terms from the proposed settlement

agreement and granting Defendants’ motion to enforce the

settlement agreement.

We vacate the ICA’s September 17, 2018 Judgment on

Appeal. We remand with instruction that the circuit court hold

an evidentiary hearing to address the issues of fact as to the

terms and existence of the settlement agreement in further

proceedings consistent with this opinion.

Carol L. McKenna, /s/ Mark E. Recktenwald
petitioner/plaintiff-
appellant pro se /s/ Paula A. Nakayama

Michael C. Bird, /s/ Sabrina S. McKenna
Jonathan W.Y. Lai, and
Lisa M. Yang and Paul D. /s/ Richard W. Pollack
Alston and J. Blaine Rogers
for respondent/defendant- /s/ Michael D. Wilson
appellee Wells Fargo Bank,
N.A.

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