Kaihewalu v. Department of Business, Economic Development and Tourism

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
23-APR-2021
07:52 AM
Dkt. 67 MO

NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

GENGHIS KAIHEWALU, Plaintiff-Appellant,
v.
DEPARTMENT OF BUSINESS, ECONOMIC DEVELOPMENT
AND TOURISM, STATE OF HAWAII, HAWAII HOUSING
FINANCE AND DEVELOPMENT CORPORATION,
Defendants/Third-Party Plaintiffs-Appellees,
v.
REALTY LAUA, LLC, Third-Party Defendant-Appellee,
and
JOHN DOES 1-10, JANE DOES 1-10, DOE CORPORATIONS 1-10, DOE
PARTNERSHIPS 1-10, DOE UNINCORPORATED ORGANIZATIONS 1-10,
and DOE GOVERNMENTAL AGENCIES 1-10, Defendants

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
(CIVIL NO. 13-1-2827)

MEMORANDUM OPINION
(By: Leonard, Presiding Judge, Hiraoka and Nakasone, JJ.)

Plaintiff-Appellant Genghis Kaihewalu (Kaihewalu)

appeals from: (1) the September 22, 2016 Final Judgment in Favor

of Defendants[-Appellees] State of Hawai#i, Department of

Business, Economic Development and Tourism [(DBEDT)], and Hawai#i

Housing Finance and Development Corporation [(HHFDC)]

[(collectively, the State)] and Against [Kaihewalu] (Judgment);

and (2) the December 8, 2017 Amended Final Judgment in Favor of

[the State] and Against [Kaihewalu] (Amended Judgment), entered
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by the Circuit Court of the First Circuit (Circuit Court).1

Kaihewalu also challenges the Circuit Court's: (1) July 7, 2016

Order Granting [the State's] Motion for Summary Judgment (Order

Granting Summary Judgment); and (2) November 2, 2016 Order

Denying [Kaihewalu]'s Motion for Reconsideration of [the Circuit]

Court's Judgment Entered on September 22, 2016, of the [Order

Granting Summary Judgment] (Order Denying Reconsideration).

I. BACKGROUND

On October 23, 2013, Kaihewalu filed the Complaint in

this action against the State. Kaihewalu alleged that from about

December 2010 to October 17, 2011, he was employed as a general

laborer with Realty Laua, LLC, (Realty Laua), the company that

had contracted with HHFDC to manage the Honokowai Kauhale

affordable housing project on Maui. Kaihewalu alleged that he

was hired after meeting the needs of the position, that he never

received any complaints about his job performance from the

residents or other employees at Honokowai Kauhale, and that he

was only ever praised by the foreman.

According to the Complaint, Kaihewalu's foreman, Glenn

Ishikawa (Ishikawa), was relieved of his duties by Realty Laua in

June 2011, and subsequently — "out of what is believe[d] to be

spite" — Ishikawa informed HHFDC Executive Director Karen Seddon

(Seddon) that Kaihewalu was a felon. Kaihewalu also alleged that

various local news articles were published regarding Realty

Laua's hiring of convicted felons to work on the Honokowai

1
The Honorable Edwin C. Nacino entered the Judgment. The Honorable
Dean E. Ochiai entered the Amended Judgment.

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Kauhale project, specifically naming Kaihewalu, and that Seddon

had reacted to the articles by demanding that Realty Laua

immediately relieve Kaihewalu and another felon-employee of their

duties. Kaihewalu alleged that Seddon had cited "numerous

newspaper articles" as well as reports from residents that they

felt unsafe with felons being on the property.

The Complaint further alleged that based on the news

articles, Seddon requested a September 2011 site inspection be

conducted at Honokowai Kauhale, which differed from those
previously conducted in that the September 2011 inspection

included only tenant interviews, as opposed to unit inspections

and file folder reviews. According to the Complaint, Seddon then

demanded, via a September 28, 2011 letter, that Realty Laua

"[r]emove existing staff and replace in accordance with Contract

Requirements[,]" citing that "[i]t is unclear what current

maintenance qualifications are and whether or not they are

qualified in accordance with the Contract to be employed in such

position." The Complaint alleged that Realty Laua had no non-

discriminatory reason to terminate its employees and that,

because of Realty Laua's refusal to terminate Kaihewalu, the

State terminated its contract with Realty Laua on October 17,

2011, thereby causing Kaihewalu's employment to be terminated

with Realty Laua.

Kaihewalu asserted four counts against the State: (1)

attempted arrest and court record discrimination (Count I), in

violation of Hawaii Revised Statutes (HRS) § 378-2(A)(3) (Supp.

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2011);2 (2) violation of public policy (Count II); (3)

intentional interference with economic relations (Count III); and

(4) intentional infliction of emotional distress (Count IV).

Kaihewalu sought declaratory and injunctive relief, as well as

consequential, special, and punitive damages, plus attorneys'

fees and costs.

On March 25, 2014, the State filed an Answer to

Complaint; on April 1, 2014, the State filed a Third-Party

Complaint against various Doe Entities, as well as an Amended
Answer to Complaint and Cross-Claim Against [Doe Entities] for

indemnification. On September 29, 2014, the State filed a Motion

to Identify Realty Laua, LLC, as Doe Corporation 1, which the

Circuit Court granted on December 5, 2014.

On March 31, 2015, the State filed a Motion for

Judgment on the Pleadings on the Complaint, which the Circuit

Court granted, in part, on May 21, 2015, dismissing with

2
HRS § 378-2 provided, in pertinent part:
§ 378-2 Discriminatory practices made unlawful;
offenses defined. (a) It shall be an unlawful
discriminatory practice:
(1) Because of race, sex including gender identity
or expression, sexual orientation, age,
religion, color, ancestry, disability, marital
status, arrest and court record, . . .:
(A) For any employer to refuse to hire or
employ or to bar or discharge from
employment, or otherwise to discriminate
against any individual in compensation or
in the terms, conditions, or privileges of
employment;
. . . .

(3) For any person, whether an employer, employee,
or not, to aid, abet, incite, compel, or coerce
the doing of any of the discriminatory practices
forbidden by this part, or to attempt to do
so[.]

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prejudice Counts II and IV, and without prejudice Count III of

the Complaint.3

A jury-waived trial was set for the week of July 18,

2016.

On May 17, 2016, the State filed a Motion for Summary

Judgment with respect to Count I arguing, inter alia, that: (1)

it did not cause Kaihewalu to lose his employment with Realty

Laua; (2) HHFDC lawfully terminated its contract with Realty Laua

within the terms of the contract; and (3) HHFDC did not "aid,
abet, incite, or coerce" any discriminatory practice that harmed

Kaihewalu or otherwise violate HRS § 378-2(A)(3). Instead, the

State asserted, the contract between HHFDC and Realty Laua was

terminated after a review by an independent consultant revealed

that Realty Laua's performance did not meet the contract

standards and the allegations that Seddon instructed Realty Laua

to terminate the employment of any felons were untrue.

In support of its motion, the State attached a

declaration from Seddon (Seddon Declaration) countering various

allegations in Kaihewalu's Complaint, which declaration included

the following:
4. In my capacity as the Executive Director of HHFDC,
I became personally familiar with the Contract for Goods or
Services Based Upon Competitive Sealed Proposals between
HHFDC and Realty Laua, LLC, effective as of March 1, 2010,
which I signed on behalf of HHFDC as its Executive Director
on February 25, 2010; my signature is located on the second
page of said Contract. A true and correct copy of the
Contract is attached hereto as Exhibit "A."
. . . .

7. [Kaihewalu] alleges in ¶ 10 of the Complaint filed
in this matter that "Upon submitting his application to

3
Kaihewalu does not challenge this ruling on appeal.

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Realty Laua, LLC[,] [Kaihewalu] was aware of the minimum
qualifications, no experience necessary, of the general
laborer as posted on the State of Hawai#i job listing."
That statement is wrong as the job was not listed as a State
of Hawai#i job listing as it was a position hired directly
by Realty Laua.

8. [Kaihewalu] alleges in ¶ 15 of the Complaint filed
in this matter that "Thereafter, out of what is believe[d]
to be spite, Glenn Ishikawa informed [HHFDC] Executive
Director Karen Seddon of [Kaihewalu] being a felon." That
statement is false as I never have been in communication
with Glenn Ishikawa; I was not aware that [Kaihewalu] was
employed by Realty Laua; and I was not aware that
[Kaihewalu] was a felon prior to HHFDC terminating its
Contract (described in ¶ 4) with Realty Laua.

9. [Kaihewalu] alleges in ¶¶ 19 and 20 of the
Complaint filed in this matter that "Ms. Seddon reacted to
the news articles by demanding to [Realty Laua] that
[Kaihewalu] and another employee be immediately relieved of
their duties. The reason the State of Hawai #i wanted
[Kaihewalu] terminated was due to 'numerous newspaper
articles' written recently." Those statements are false. I
made no such demand. HHFDC terminated a Contract with
Realty Laua and all of Realty Laua's employees were told
that they had to leave the property. There was no employer
relationship between HHFDC and [Kaihewalu] or with any other
Realty Laua employees. If the employment of any Realty Laua
employees was terminated[,] Realty Laua chose to terminate
such employment.

10. [Kaihewalu] alleges in ¶ 21 of the Complaint
filed in this matter that "Based on information and belief,
Ms. Seddon stated that the residents and community were
unsafe with felons being on the property." That statement
is false. I made no such statement and had nothing to do
with Realty Laua terminating any employees.
. . . .

12. [Kaihewalu] alleges in ¶ 31 of the Complaint
filed in this matter that " . . . Ms. Seddon commanded
Realty Laua, LLC to terminate their employees who are
felons." That statement is false. Neither I nor anyone
from HHFDC instructed Realty Laua to terminate any employees
— felon or not. HHFDC required the removal of the Resident
Manager (Lisa Felafine) [sic], not termination, as part of
the "cure" for Realty Laua's defaults under the Contract and
when Realty Laua did not perform the items required as part
of the cure, HHFDC terminated the Contract. A true and
correct copy of the NOTICE TO CURE, dated September 28, 2011
is attached hereto as Exhibit B. A true and correct copy of
the NOTICE OF CONTRACT TERMINATION, dated October 17, [2011]
is attached hereto as Exhibit C.
13. HHFDC (i) terminated the Contract after a review
by an independent consultant based on Realty Laua's poor
performance, and (ii) neither I nor anyone on behalf of
HHFDC aided, abetted, incited, compelled or coerced Realty
Laua in terminating [Kaihewalu]'s employment at Realty Laua.

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As referenced in the Seddon Declaration, the exhibits

thereto included: (1) a copy of the State of Hawai#i Contract

for Goods or Services Based Upon Competitive Sealed Proposals

between HHFDC and Realty Laua, effective March 1, 2010 (Realty

Laua Contract), signed by Seddon and Robert Faleafine (Mr.

Faleafine), as President of Realty Laua; (2) a copy of the

September 28, 2011 Notice to Cure, signed by Seddon and addressed

to Mr. Faleafine (Notice to Cure); and (3) a copy of the October

17, 2011 Notice of Contract Termination (Notice of Contract

Termination), similarly signed by Seddon and addressed to Mr.

Faleafine. The Notice of Contract Termination cites ten reasons

for the termination, including Realty Laua's failure to replace

the Resident Manager of Honokowai Kauhale, as well as Realty Laua

management and maintenance staff's failure to maintain the

property in accordance with the contract requirements.

On June 7, 2016, Kaihewalu filed a Memorandum in

Opposition, arguing that there remained several disputed issues

of material fact. Kaihewalu submitted a declaration (Kaihewalu

Declaration), which mirrored the allegations in the Complaint and

attested to the following, in pertinent part:
11. Realty Laua, LLC's manager Lisa Faleafine [( Ms.
Faleafine)] told me that, out of what is believe[d] to
be spite, [relieved foreman] Glenn Ishikawa informed
the [HHFDC] Executive Director Karen Seddon and Jim
Dooley of the Hawaii Reporter Newspaper of me being a
felon.
. . . .
13. On or about August 22, 2011, an article was written in
the Hawaii Reporter by Jim Dooley that stated, a
convicted felon Genghis Kaihewalu had been hired at
Honokowai Kauhale.

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14. Several follow up articles were also published in the
Hawaii Reporter and Maui News regarding convicted
felons working at Honokowai Kauhale.
15. Realty Laua[]'s manager [Ms.] Faleafine and Realty
Laua[]'s owner Robert Faleafine told me that, Ms.
Seddon reacted to the news articles by demanding to
Realty Laua[] that myself and another employee - who
is a felon - be immediately relieved of our duties.

16. The reason the [sic] Ms. Seddon and the State wanted
me terminated was due to "numerous newspaper
articles".
17. [Ms.] Faleafine, Realty Laua's manager, told me that
Ms. Seddon informed her that the residents and
community were unsafe with felons being on the
property.
. . . .

19. I was told by [Ms.] Faleafine, in or about September
2011, Ms. Seddon requested an additional, second site
inspection be conducted at Honokowai Kauhale based on
the news articles.

. . . .

25. [Ms.] Faleafine told me that, in a letter dated
September 28, 2011 labeled "Immediate Action
Required", Ms. Seddon demanded that Realty Laua, LLC,
"Remove existing staff and replace in accordance with
Contract Requirements." She goes on to state, "It is
unclear what current maintenance qualifications are
and whether or not they are qualified in accordance
with the Contract to be employed in such position".
. . . .

27. Realty Laua[]'s owner [Mr.] Faleafine told me that
although Ms. Seddon commanded Realty Laua, LLC to
terminate their employees who are felons, Realty Laua,
LLC had no non-discriminatory reason to terminate its
employees as their employees posed no threats to the
residents, clients nor to the functioning of the
business.

28. Mr. Faleafine went on to tell me that because I am a
felon and also disabled it was illegal and not fair
for the State to try to force Realty Laua, LLC to
terminate me.
29. According to Lisa and Robert Faleafines prior
information told to me, based on Realty Laua, LLC's
refusal to terminate me, [HHFDC], on or about October
17, 2011, terminated its contract with Realty Laua,
LLC thereby causing my employment to be terminated as
Realty Laua, LLC only had work for me on Maui based on
their contract with the State of Hawai#i for the
Honokowai Kauhale housing project.

Kaihewalu attached to his declaration: (1) a copy of

three news articles published in August 2011; (2) a copy of a

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State of Hawai#i job listing for General Laborer I, with a

revised "Announcement Date" of December 10, 2009; and (3) a copy

of a notarized letter of support dated July 25, 2013, and signed

by Ms. Faleafine (Faleafine Letter).

Kaihewalu also presented a five-paragraph declaration

from Ms. Faleafine (Faleafine Declaration), in which she

attested:
1. Unless otherwise indicated, I make this
declaration based upon my personal knowledge and belief.
2. I am competent to testify to the matters set forth
herein.

3. Attached hereto is a true and accurate copy of my
four (4) page notarized July 25, 2013 letter written
regarding Genghis Kaihewalu's employment at Realty Laua, LLC
("7/25/13 Letter").

4. To the best of my recollection, the information
and contents in the attached copy of the[]7/25/13 Letter are
true and accurate.
5. That declarant has read the above-stated facts and
declares under penalty of law that they are true to the best
of declarant's belief, knowledge and information at this
time.

A copy of the Faleafine Letter was also attached to the

Faleafine Declaration. The letter states, in full:
To Whom It May Concern:
Re: Genghis Kaihewalu

Mr. Kaihewalu was employed with Realty Laua for the period
of December 2010 to October 17, 2011 as a General Laborer.

Upon submitting his application, Mr. Kaihewalu was aware of
the minimum qualification(s)- no experience necessary - of
the General Laborer position as posted on the State [o]f
Hawaii Job listing which is currently still listed on their
web site. Mr. Kaihewalu met the needs of the position and
was hired.
During his employment, Realty Laua did not receive any
complaints on his job performance, work ethic, from
residents and his fellow employees. His Foreman Glenn
Ishikawa only had praise for him of his willingness to work
and being able to do his job as assigned - as Mr. Kaihewalu
is an amputee.
Upon Mr. Ishikawa being relieved of his duties in June 2011
- it was Mr. Ishikawa who informed the [HHFDC] - (out of

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spite and revenge) - Executive Director Karen Seddon of Mr.
Kaihewalu being a convicted felon. A crime he did over ten
(14) years ago.
Ms. Seddon reacted on the newspaper articles and coerced
actions into demanding Mr. Kaihewalu and another employee be
relieved of their duties. As her reasoning for terminating
his employment was the "numerous newspaper articles" as
mentioned in her "Form SPO-007 (07/19/2011) [sic].
Various newspaper articles with the Maui News and Hawaii
Reporter - stating they were convicted felons living and
working on the property. Ms. Seddon stated the residents
and community was unsafe with felons being on the property.
This is discriminating and derogatory statements by Ms.
Seddon as Mr. Kaihewalu is in a protected class.

September 2011, Ms. Seddon requested a site inspection be
conducted based on the newspaper articles in which she hired
Spectrum Enterprise.

Spectrum Enterprise had conducted previous audits in 2008,
2009, 2010 and February 2011 (6 months prior to the newest
audit). During the 2008 - early 2011 audit - Spectrum
conducted unit inspections and file folder reviews. During
the September 2011 audit - Spectrum conducted tenant
interviews only. The 2008 - early 2011 – the audits are all
similar or exactly the same based on HHFDC not completing
their side of responsibilities for the capital improvements
of the property.

The September 2011 audit -interviewer/auditor Lois Churchill
and September 28, 2011 letter signed by Karen Seddon is
found to be bias.

In the newspaper articles and interviewed statements - it
was found there was "no wrongdoing" on the property by Mr.
Kaihewalu and another employee.
The letter dated September 28, 2011 by HHFDC Karen Seddon
demanding "Immediate Action Required" - "Remove existing
staff and replace in accordance with Contract Requirements."
As she states "It is unclear what current maintenance
qualifications are and whether or not they are qualified in
accordance with the Contract to be employed in such
positions." However, as mentioned above, the job
qualifications are listed on the State of Hawaii job
listings and Mr. Kaihewalu [was] truly qualified for his
position.
Although the order had been made to remove Mr. Kaihewalu
from his position, Realty Laua did not feel that any of
their employees posed a threat to their clients nor business
function.
Mr. Kaihewalu being a convicted felon did not sit well with
HHFDC/Karen Seddon and therefore, terminated its contract
with Realty Laua that resulted in ending his employment
evasively.
Sincerely,
[/s/ Lisa Faleafine]
Lisa Faleafine

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(Format altered).4

In reply, the State objected to the exhibits attached

to the Kaihewalu Declaration as well as various statements within

the Kaihewalu Declaration and the Faleafine Letter, asserting

that the majority of the "evidence" Kaihewalu put forth in his

opposition was inadmissible and therefore unable to serve as the

basis for denying the State's Motion for Summary Judgment.

Specifically, the State argued that Kaihewalu failed to
demonstrate personal knowledge as to the statements made by Mr.

Faleafine and Ms. Faleafine to Kaihewalu with respect to Seddon's

demands and that Kaihewalu also lacked personal knowledge of

Seddon's reactions to the news articles or her reasons for

terminating the Realty Laua Contract. With respect to the

Faleafine Declaration and Letter, the State similarly argued that

Ms. Faleafine had failed to demonstrate personal knowledge with

regard to Seddon's statements and motivation in terminating the

Realty Laua Contract. The State further objected to the

Kaihewalu Declaration and Faleafine Declaration and Letter on

hearsay grounds. The State attached a brief supplemental

declaration from Seddon (Seddon Supplemental Declaration), which

stated, in pertinent part:
2. When the contract with Realty Laua was terminated,
[HHFDC] was required to contract with another company to
manage the Honokowai Kauhale affordable rental housing
project in Lahaina, Maui for approximately six months until
a permanent management company could be secured after going
through the normal procurement process required by Hawaii
law.

4
Kaihewalu did not submit a declaration from Ishikawa or Mr.
Faleafine.

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3. As there was an immediate need to replace Realty
Laua, I completed a State Procurement Office Notice of
Request for Exemption from HRS Chapter 103D. This is
know[n] as a SPO-007 form.
. . . .

5. I did not prepare any other Request for Exemption
with respect to replacing Realty Laua.

A copy of the approved SPO-007 form was attached to the

Supplemental Seddon Declaration.

The State concluded that Kaihewalu had offered no

admissible evidence to contradict the evidence set forth in the

Motion for Summary Judgment and that "[w]hen the inadmissible
evidence is removed" from Kaihewalu's opposition, the Motion for

Summary Judgment should be granted.

At the June 15, 2016 hearing on the motion, the State

reiterated its argument that Kaihewalu's opposition was devoid of

any admissible evidence to defeat its Motion for Summary

Judgment. Kaihewalu engaged in the following exchange with the

Circuit Court:
[COUNSEL FOR KAIHEWALU]: . . . [T]here's two
levels of hearsay we have to get by. And both of those
levels of hearsay, there's exceptions to both of them on
803(A)(2).
In other words, [Seddon] tells Ms. -- Mr.
Kaihewalu's boss that they must terminate him and another
man because they're felons. That statement is clearly a
party admission. Then the question becomes is [Mr.]
Kaihewalu's boss' statement also an admission? And,
clearly, now that they are a party to this action, that's
also a party admission, Your Honor. So there's two levels
of hearsay, but both of those levels of hearsay pass through
the exceptions of 803(A)(2) without question.
. . . .
THE COURT: Let me ask this, counsel, did you
amend over on the third-party complaint?
. . . .

[COUNSEL]: No.

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THE COURT: Then why are they a party to your
lawsuit? They're a party in the third-party complaint filed
by [the State]. You didn't amend your complaint; correct?
[COUNSEL]: Correct. But I believe they're
still a party to this lawsuit, Your Honor.

THE COURT: Okay, all right.
In response, the State argued:
[H]e keeps talking about [Seddon]'s alleged statements.
However, we don't know what was said, to who it was said,
when it was said. Is that an interpretation of somebody's
statement? What were the words that were used? Who else
was present? All we have is this alleged statement.
There's no foundation that these people were even present
when this was said. There's no foundation that it was said
to them, nothing like that.

The Circuit Court, in granting the motion, explained:
The Court agrees with [the State] and the State's
interpretation of the evidence presented. We're passed
discovery deadline. The simple fact, counsel, is all you
needed to do was either depose or include the Falofinis
[sic] as part of the case.

I don't believe there's . . . enough authentication and
exception to the hearsay rule based on what you've put in
your memo in opp. So there's no genuine issue of material
fact and, therefore, I'm going to grant the motion on the
last count[.]

Kaihewalu did not address the State's objections to the

lack of personal knowledge or foundation.

On July 7, 2016, the Circuit Court entered the Order

Granting Summary Judgment, dismissing Count I with prejudice.

The Circuit Court entered the Judgment on September 22, 2016.
On September 27, 2016, Kaihewalu filed a Motion for

Reconsideration of [the Judgment], asserting that the Circuit

Court erroneously "based its entire ruling on the proposition

that a third-party admission is not a 'Declaration Against

Interest' because a third-party is not a party to the Plaintiff

herein." Kaihewalu's memorandum in support of the motion

addressed the sole issue of whether Realty Laua is a "party-

opponent" to Kaihewalu with respect to Hawai#i Rules of Evidence

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(HRE) Rule 803(a)(1), notwithstanding Kaihewalu's failure to

amend the complaint to name Realty Laua as a defendant.

Kaihewalu also argued that the statements in the Faleafine Letter

regarding Seddon's reasoning for terminating Kaihewalu's

employment were not offered for their truth but rather "to show

that at a particular time and place[, HHFDC] made this ridiculous

slanderous statement," and that, consequently, such a statement

could not constitute hearsay.

In response, the State argued that Kaihewalu's failure
to amend the Complaint to include a claim against Realty Laua

did, in fact, preclude adversity between the parties such that

HRE Rule 803(a)(1) would apply. The State further argued that

independent bases supported the Circuit Court's ruling,

reiterating its position that the Kaihewalu Declaration and

Faleafine Declaration and Letter failed to establish sufficient

foundation that the declarants possessed personal knowledge of

the facts and statements set forth therein.

The Circuit Court, without a hearing, entered an Order

Denying Reconsideration on November 2, 2016. On November 16,

2016, Kaihewalu filed his notice of appeal under CAAP-XX-XXXXXXX,

which this court dismissed on June 29, 2017, for lack of

appellate jurisdiction. Kaihewalu v. DBEDT, CAAP-XX-XXXXXXX,

2017 WL 2829817, *2 (Haw. App. June 29, 2017) (Order).

On July 17, 2017, Kaihewalu filed a second notice of

appeal, which initiated the instant appeal. On December 8, 2017,

pursuant to this court's November 17, 2017 order for temporary

remand, the Circuit Order entered the Amended Judgment.

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II. POINTS OF ERROR

Kaihewalu raises three points of error on appeal,

contending that the Circuit Court erred in ruling that: (1)

Realty Laua was not party to his case as it relates to the

application of the rule against hearsay; (2) the statements of

Ms. Faleafine and Mr. Faleafine as delineated in the Kaihewalu

Declaration were inadmissible; and (3) the Faleafine Declaration

was inadmissible.

III. APPLICABLE STANDARDS OF REVIEW
The appellate court reviews the circuit court's

granting or denial of summary judgment de novo. Querubin v.

Thronas, 107 Hawai#i 48, 56, 109 P.3d 689, 697 (2005) (citing

Hawai#i Cmty. Fed. Credit Union v. Keka, 94 Hawai#i 213, 221, 11

P.3d 1, 9 (2000)).
[S]ummary judgment is appropriate if the
pleadings, depositions, answers to interrogatories,
and admissions on file, together with the affidavits,
if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to
judgment as a matter of law. A fact is material if
proof of that fact would have the effect of
establishing or refuting one of the essential elements
of a cause of action or defense asserted by the
parties. The evidence must be viewed in the light
most favorable to the non-moving party. In other
words, we must view all of the evidence and the
inferences drawn therefrom in the light most favorable
to the party opposing the motion.

Durette v. Aloha Plastic Recycling, Inc., 105 Hawai#i 490, 501,

100 P.3d 60, 71 (2004) (alteration in original) (quoting Hawai#i

Cmty. Fed. Credit Union, 94 Hawai#i at 221, 11 P.3d at 9).

"Although [the courts] carefully scrutinize the

materials submitted by the moving party to ensure compliance with

the requirements of [Hawai#i Rules of Civil Procedure (HRCP) Rule

56(e)], the courts are more indulgent towards the materials

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submitted by the non-moving party." Eddins v. Morrison, 105

Hawai#i 376, 378, 98 P.3d 247, 249 (App. 2004) (quoting Miller v.

Manuel, 9 Haw. App. 56, 66, 828 P.2d 286, 292 (1991)).
[D]ifferent standards of review must be applied to trial
court decisions regarding the admissibility of evidence,
depending on the requirements of the particular rule of
evidence at issue. When application of a particular
evidentiary rule can yield only one correct result, the
proper standard for appellate review is the right/wrong
standard. However, the traditional abuse of discretion
standard should be applied in the case of those rules of
evidence that require a "judgment call" on the part of the
trial court.

Kealoha v. Cty. of Hawai#i, 74 Haw. 308, 319-20, 844 P.2d 670,
676 (1993).

IV. DISCUSSION

A. Kaihewalu's Declaration

Kaihewalu argues that the Circuit Court erred in

determining that Realty Laua was not a "party" with respect to

the application of the party-admission exception to the rule

against hearsay and its consequent ruling that the Faleafines'

statements in the Kaihewalu Declaration and the attached

Faleafine Letter were inadmissible. Kaihewalu asserts that the

Faleafines' statements to Kaihewalu, as recounted in the
Kaihewalu Declaration, are admissible under HRE Rule 803(a)(1)

and (2), as vicarious admissions of a party-opponent. According

to Kaihewalu, Realty Laua is in effect an adverse party to

Kaihewalu, notwithstanding the undisputed fact that Kaihewalu did

not plead any claims against Realty Laua, and consequently, the

statements of Realty Laua's agent should be admissible as

exceptions to the hearsay rule.

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We first note that Kaihewalu does not dispute that the

State, in its Motion for Summary Judgment, satisfied its initial

burden of showing that there is no genuine issue to material fact

as to his claim in Count I. As such, it was incumbent upon

Kaihewalu to then come forward, through affidavit or other

evidence, with specific facts showing that there is a genuine

issue of material fact. See, e.g., Miller, 9 Haw. App. at 65,

828 P.2d at 292. Kaihewalu points to his declaration and

attached Faleafine Letter as evidence of Seddon's demands and
motivation in terminating the Realty Laua Contract, and asserts

that Seddon made certain statements to the Faleafines about

Realty Laua's employment of felons, including Kaihewalu.

Kaihewalu's Declaration states:

15. Realty Laua[]'s manager Lisa Faleafine and Realty
Laua[]'s owner Robert Faleafine told me that, Ms.
Seddon reacted to the news articles by demanding to
[Realty Laua] that myself and another employee - who
is a felon - be immediately relieved of our duties.

17. Lisa Faleafine, Realty Laua's manager, told me that
Ms. Seddon informed her that the residents and
community were unsafe with felons being on the
property.

. . . .

19. I was told by Lisa Faleafine, in or about September
2011, Ms. Seddon requested an additional, second site
inspection be conducted at Honokowai Kauhale based on
the news articles.
. . . .
25. Lisa Faleafine told me that, in a letter dated
September 28, 2011 labeled "Immediate Action
Required", Ms. Seddon demanded that Realty Laua, LLC,
"Remove existing staff and replace in accordance with
Contract Requirements." She goes on to state, "It is
unclear what current maintenance qualifications are
and whether or not they are qualified in accordance
with the Contract to be employed in such position".

. . . .

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27. Realty Laua[]'s owner Robert Faleafine told me that
although Ms. Seddon commanded Realty Laua, LLC to
terminate their employees who are felons, Realty Laua,
LLC had no non-discriminatory reason to terminate its
employees as their employees posed no threats to the
residents, clients nor to the functioning of the
business.

28. Mr. Faleafine went on to tell me that because I am a
felon and also disabled it was illegal and not fair
for the State to try to force Realty Laua, LLC to
terminate me.
29. According to Lisa and Robert Faleafines prior
information told to me, based on Realty Laua, LLC's
refusal to terminate me, [HHFDC], on or about October
17, 2011, terminated its contract with Realty Laua ,
LLC, thereby causing my employment to be terminated as
Realty Laua, LLC only had work for me on Maui based on
their contract with the State of Hawai#i for the
Honokowai Kauhale housing project.

(Emphasis added).

Kaihewalu attests that he only learned of Seddon's

statements by way of statements made to him by the Faleafines.

Thus, we must address whether the Faleafines' statements

presented in the Kaihewalu Declaration are themselves admissible

as exceptions to the hearsay rule. HRE Rule 803(a) provides, in

relevant part:
Rule 803 Hearsay exceptions; availability of
declarant immaterial. The following are not excluded by the
hearsay rule, even though the declarant is available as a
witness:
(a) Admissions.
(1) Admission by party-opponent. A statement that
is offered against a party and is (A) the
party's own statement, in either the party's
individual or a representative capacity, or (B)
a statement of which the party has manifested
the party's adoption or belief in its truth.
(2) Vicarious admissions. A statement that is
offered against a party and was uttered by (A) a
person authorized by the party to make such a
statement, (B) the party's agent or servant
concerning a matter within the scope of the
agent's or servant's agency or employment, made
during the existence of the relationship, or (C)
a co-conspirator of the party during the course
and in furtherance of the conspiracy.

As dictated by the plain language of HRE Rule 803, the

exception for hearsay statements as admissions by party-opponents

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applies to a statement that is offered against the same party who

made the statement. HRE Rule 803 (a)(1); HRE Rule 803 cmt.

("[T]here are two conditions of admissibility under this

paragraph: (1) that the statement was made by a party to the

litigation [(or its agent)], and (2) that the statement now be

offered against that party.") (emphasis added); see also Kekua v.

Kaiser Found. Hosp., 61 Haw. 208, 217, 601 P.2d 364, 371 (1979)

("The extrajudicial statements of a party-opponent, when offered

against the same, are universally deemed admissible at trial as
substantive evidence of the fact or facts stated.") (emphasis

added).

Here, whether Realty Laua is considered a party to the

litigation initiated by Kaihewalu is inapposite to the

determination of whether the Faleafines' statements are

admissible as the agent admissions of Realty Laua, since

Kaihewalu plainly does not seek to offer any of the Faleafines'

statements against Realty Laua. HRE Rule 803(a)(1). Kaihewalu

acknowledges he did not assert any claims against Realty Laua.

Kaihewalu seeks instead to use the Faleafines' statements against

the State, but has not sought to establish that the Faleafines'

statements would somehow constitute admissions by the State, such

that those statements would qualify as HRE Rule 803(a)(1) or (2)

exceptions to the hearsay rule. Thus, Kaihewalu has not

established that any of the Faleafines' statements, as recounted

in the Kaihewalu Declaration, or the contents of the Faleafine

Letter attached thereto, constitute admissible evidence of

Seddon's alleged statements that could give rise to a genuine

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issue of material fact. Accordingly, we conclude that

Kaihewalu's argument is without merit.

B. The Faleafine Declaration and Letter

Kaihewalu argues that the Circuit Court erred in

determining that the Faleafine Declaration and attached Faleafine

Letter were inadmissible, because the statements contained

therein are not hearsay and thus no hearsay exception is

necessary. Kaihewalu argues that Seddon's statements as

recounted in the Faleafine Declaration and Letter are not offered
for the truth of the matters asserted, but rather as evidence

that HHFDC, via Seddon, made the statements at a particular time

and place.

With respect to Seddon's purported statements, the

Faleafine Letter states:
Ms. Seddon reacted on the newspaper articles and coerced
actions into demanding Mr. Kaihewalu and another employee be
relieved of their duties. As her reasoning for terminating
his employment was the "numerous newspaper articles" as
mentioned in her "Form SPO-007 (07/18/2011).

. . . .
Ms. Seddon stated the residents and community was [sic]
unsafe with felons being on the property.

. . . .
Ms. Seddon requested a site inspection be conducted based on
the newspaper articles in which she hired Spectrum
Enterprise.

. . . .
The letter dated September 28, 2011 by HHFDC Karen Seddon
demanding "Immediate Action Required" – "Remove existing
staff and replace in accordance with Contract Requirements."

. . . .
Mr. Kaihewalu being a convicted felon did not sit well with
HHFDC/Karen Seddon and therefore, terminated its contract
with Realty Laua[.]

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Arguably, Seddon's statements do not fall within the

general rule against hearsay, since Kaihewalu is not seeking to

establish, for example, whether residents and community were, in

fact, unsafe with felons on the property. Moreover, even if the

statements constituted hearsay, the parties do not appear to

dispute that Seddon's purported statements – if presented through

admissible evidence – would fall within the party-admission

exception of HRE Rule 803(a)(2).

However, as the State argues, regardless of the
proffered purpose, Ms. Faleafine fails to assert or demonstrate

personal knowledge of Seddon's alleged statements – for example,

by describing the time, place, and/or other circumstances of the

alleged statements - which renders the evidence inadmissible.

Pursuant to the Hawai#i Rules of Civil Procedure, affidavits

submitted in opposition to a motion for summary judgment "shall

be made on personal knowledge, shall set forth such facts as

would be admissible in evidence, and shall show affirmatively

that the affiant is competent to testify to the matters stated

therein." HRCP Rule 56(e). As provided in HRE Rule 602, "[a]

witness may not testify to a matter unless evidence is introduced

sufficient to support a finding that the witness has personal

knowledge of the matter." See also HRE Rule 602 cmt. ("Evidence

of personal knowledge is a general foundation requirement for

admissibility of all evidence[.]"). In the summary judgment

context, this means that "the affidavit must adequately reflect

that the affiant (1) perceived the event about which they

testified; and (2) had a present recollection of that

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perception." Nationstar Mortgage, LLC v. Kanahele, 144 Hawai#i

394, 403, 443 P.3d 86, 95 (2019) (citing HRE Rule 602; Adams v.

CDM Media USA, Inc., 135 Hawai#i 1, 28, 346 P.3d 70, 97 (2015)).

To the extent an affidavit does not comply with HRCP Rule 56(e),

it should be disregarded. Keka, 94 Hawai#i at 221, 11 P.3d at 9

(quoting Cahill v. Hawaiian Paradise Park Corp., 56 Haw. 522,

539, 543 P.2d 1356, 1367 (1975)).

Personal knowledge to testify may be inferred from an

affiant's position and the nature of the affiant's participation
in the matters as described in the affidavit. Stallard v.

Consol. Maui, Inc., 103 Hawai#i 468, 475-76, 83 P.3d 731, 738-39

(2004) (citing Barthelemy v. Air Lines Pilots Ass'n, 897 F.2d

999, 1018 (9th Cir. 1990), and holding that the affiants'

personal knowledge of the operation of the resort and policy with

respect to hotel districts could be reasonably inferred from

their respective positions as president of the development

company and deputy planning director of the county); Capital One

Bank (USA), N.A. v. Huffman, CAAP-XX-XXXXXXX, 2014 WL 6488771, *3

(Haw. App. Nov. 18, 2014) (SDO) (affiant's personal knowledge

about the policies and procedures pertaining to credit card

company's various credit card accounts could be reasonably

inferred from her position as a Litigation Support Representative

for the credit card company as described in her affidavit); see

also In re Guardianship of Carlsmith, 113 Hawai#i 211, 230 n.28,

151 P.3d 692, 711 n.28 (2006) (affiant's statements that she

personally "tried to call and to visit" subject of the

guardianship petition and that the matters averred to were based

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on "personal knowledge" were sufficient to affirmatively

demonstrate personal knowledge). However, "[a] mere recitation

that the witness 'understood' or was 'advised' of a fact is

insufficient, in itself, to establish that the witness perceived

the facts for which testimony is offered, i.e., that the

testimony is based on personal knowledge." Adams, 135 Hawai#i at

29, 346 P.3d at 98 (holding that CEO's declaration seeking to

establish legitimate non-discriminatory reasons for not hiring

plaintiff did not demonstrate personal knowledge because the
bases for the information were unidentified third persons or

external sources) (citing Addison M. Bowman, Hawai#i Rules of

Evidence Manual § 602–1[3] (2014–15 ed.); State v. Apollonio, 130

Hawai#i 353, 362, 311 P.3d 676, 685 (2013) (striking testimony of

a witness where nothing in evidence would support a finding that

the witness had personal knowledge of the fact at issue)).

Moreover, evidentiary personal knowledge requirements

"apply to a hearsay statement admitted under any of the hearsay

exceptions . . . in that admissibility of a hearsay statement is

predicated on the foundation requirement of the witness' personal

knowledge of the making of the statement itself." Kanahele, 144

Hawaii at 403 n.12, 443 P.3d at 95 n.12 (citing HRE Rule 602

cmt.). An affiant therefore satisfies the "personal knowledge"

requirements only if she has personal knowledge of how the

hearsay statement was made. Huffman, 2014 WL 6488771, at *2.

Under this standard, the Faleafine Declaration and

Letter are not admissible evidence of Seddon's statements or

demands, because they fail to establish the requisite foundation

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of Ms. Faleafine's personal knowledge of those statements and

demands. The Faleafine Declaration does not purport to attest

that the facts and statements contained within the Faleafine

Letter are based on Ms. Faleafine's personal knowledge.

Instead, the Faleafine Declaration attests that while the

declaration is based upon personal knowledge, it merely states

that "the information and contents in the [Faleafine Letter] are

true and accurate" to the best of Ms. Faleafine's recollection.

The Faleafine Letter itself is devoid of any facts demonstrating
her personal knowledge of Seddon's statements, reactions, or

demands to Realty Laua. Ms. Faleafine does not describe to any

degree the circumstances under which Seddon made her purported

statements or whether Ms. Faleafine actually "perceived the

event" of Seddon making these statements. Kanahele, 144 Hawai#i

at 403, 443 P.3d at 95.

It cannot be reasonably inferred from Ms. Faleafine's

position or affiliated responsibilities that she would have had

direct contact with Seddon or that any such conversations would

have involved discussion of the status of the Realty Laua

Contract. While Ms. Faleafine is identified elsewhere in the

record as Realty Laua's "manager" or "Resident Manager," nothing

in the record, including the Faleafine Declaration or Faleafine

Letter, describes the nature of this position, the dates of her

employment in this position (including whether they coincided

with Kaihewalu's dates of employment with Realty Laua or Seddon's

effective dates as Executive Director of HHFDC), or any other

evidence from which it could be reasonably inferred that Ms.

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Faleafine's position with Realty Laua would likely expose her to

direct communications of the nature attested to with the

Executive Director of HHFDC.5 Indeed, the Notice to Cure,

referenced in the Faleafine Letter as the "letter dated September

28, 2011," is addressed only to Mr. Faleafine, as President of

Realty Laua. In any event, the Notice to Cure makes no mention

of concerns regarding the hiring of felons or safety of residents

with the presence of such employees on the premise.6

Ultimately, the Faleafine Declaration and Letter do not
allow for any reasonable inference of her personal knowledge of

Seddon's statements or demands with respect to the Realty Laua

Contract or her demands to Realty Laua to terminate Kaihewalu as

a condition of the contract. As such, the Faleafine Letter and

Declaration are not admissible evidence of Seddon's alleged

statements and cannot create a genuine issue of material fact in

order to defeat the State's Motion for Summary Judgment.

Accordingly, we conclude that Kaihewalu's arguments concerning

the Faleafine Declaration and Letter are without merit.

C. Kaihewalu's Trustworthiness Argument

Finally, Kaihewalu contends the Faleafines' statements

were admissible as inherently reliable and trustworthy.

5
Ms. Faleafine is also identified in the newspaper articles as the
sister of Mr. Faleafine, but there is nothing in her declaration, her letter,
or the record that would indicate that Ms. Faleafine would have been in direct
contact with a senior officer of HHFDC by virtue of her relation to Mr.
Faleafine.
6
Of note, the Notice to Cure signed by Seddon cites statements
purportedly made by Ms. Faleafine. However, this does not support an
inference that Ms. Faleafine and Seddon were ever in direct contact to discuss
the Realty Laua Contract, since the Notice to Cure reflects that Ms.
Faleafine's statements were recorded as part of the September 2011 audit,
which Kaihewalu asserts was conducted by a third-party.

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Kaihewalu argues that because Realty Laua was a party to the

underlying action, the trustworthiness of its agents' statements

could be assessed through the course of litigating the action.

Kaihewalu asserts that the opportunity to confirm or refute any

statements renders the statements admissible and that the

statements "should have come into evidence."

This argument lacks merit. A motion for summary

judgment can only be defeated by the presentation of admissible

evidence, Keka, 94 Hawai#i at 221, 11 P.3d at 9, and we have
concluded here that Kaihewalu presented no admissible evidence

raising a genuine issue of material fact for trial. Kaihewalu

has presented no authority, and we find none, for the proposition

that otherwise inadmissible evidence can defeat a motion for

summary judgment, solely because a declarant is an agent of a

third-party defendant and may potentially be called as a witness

at trial.

V. CONCLUSION

For these reasons, the Circuit Court's September 22,

2016 Judgment and December 8, 2017 Amended Judgment are affirmed.

DATED: Honolulu, Hawai#i, April 23, 2021.

On the briefs:
/s/ Katherine G. Leonard
Elizabeth Jubin Fujiwara, Presiding Judge
Joseph T. Rosenbaum,
(Fujiwara and Rosenbaum, LLLC, /s/ Keith K. Hiraoka
for Plaintiff-Appellant. Associate Judge

Caron M. Inagaki, /s/ Karen T. Nakasone
Kathy K. Higham, Associate Judge
Deputy Attorneys General,
State of Hawaii,
for Defendants/Third-Party
Plaintiffs-Appellees.

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