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No. 28373 §
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m THE INTERMEDIATE couRT oF APPEALS §
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cF THE STATE oF HAWAI 1 :§
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PETER C. JONES, Plaintiff/Counter Claim Defendant/Appellee,
v. CHRISTOPHER F. CARROLL, Defendant/Cross-Claimant/Appellant;
MAUI CLASSIC CHARTERS, INC., a Hawafi corporation,
Defendant/Counterclaimant/Cross-Claim Defendant/Appellee;
and SAMUEL DAKIN, Defendant/Appellee
APPEAL FROM THE CIRCUIT COURT OF THE SECOND CIRCUIT
(CIVIL NO. 96-O834(3))
SUMMARY DISPOSITION ORDER
(By: Fujise, Presiding Judge, Leonard and Reifurth, JJ.)
Defendant/Cross-Claimant/Appellant Christopher F.
Carroll (Carroll) appeals from the Final Judgment Re: Amended
Crossclaim of Defendant Christopher Carroll filed on November 6,
2007 (Judgment), in the Circuit Court of the Second Circuit
(Circuit Court).W The Circuit Court entered judgment against
Carroll and in favor of Defendant/Counterclaimant/Cross-Claim
Defendant/Appellee Defendant Maui Classic Charters, Inc. (MCC) on
all claims asserted in Carroll's November 2, 2006 amended cross-
claim against MCC (Cross-Claim).
The Cross-Claim alleges:
l. Plaintiff PETER C. JONES filed a Complaint
against CARROLL and MCC, the allegations of which are
incorporated herein by reference.
2. At the time of the filing of the Complaint
herein, throughout the trial and appellate phases of this
litigation, CARROLL was a duly elected director of MCC.
3. Hawaii ReviSed Statutes §4l4-242 and §4l4~245
provides that a director may be indemnified for the expense
and costs of litigation.
i/ The Honorable Joseph E. Cardoza presided.
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4. CARROLL provided personal and professional
guidance to MCC and to counsel for MCC during litigation in
this action.
5. CARROLL is entitled to payment from MCC for his
fees and costs.
WHEREFORE, COU'NTER-CLAIMANT CHRISTSOPHER [SiC] F.
CARROLL prays that the Court enter judgment in his favor and
against MCC for reasonable attorney's fees, expense and
costs, and further relief as the Court deems just under the
circumstances .
In sum, the Cross-Claim seeks: (l) indemnification
from MCC for the expenses and costs that Carroll incurred as a
defendant in the underlying suit; and (2) payment for attorney's
fees and costs for services allegedly provided by Carroll to MCC
during litigation in this action.
After earlier filing an answer to the Cross-Claim, on
April 20, 2007, MCC filed a motion to dismiss the Cross-Claim for
failure to state a claim upon which relief can be granted.
Although denominated as a motion to dismiss, MCC's motion cited
Hawafi Rules of Civil Procedure (HRCP) Rule 56, as well as HRCP
Rules l2(b)(6) and l2(c), and sought, alternatively, the entry of
summary judgment in favor of MCC and against Carroll. On July 6,
2007, the Circuit Court entered an order granting MCC's motion.
Thereafter, the Circuit Court also awarded attorney's fees in the
'amount of $3,4l4.08 and costs in the amount of $57.84 in favor of
MCC and against Carroll.
On appeal, Carroll raises the following points of
error:
l. The Circuit Court erred in granting MCC's motion
to dismiss; and
2. The Circuit Court erred in awarding attorney's
fees and costs to MCC as the prevailing party on the Cross~Claim.
Upon careful review of the record and the briefs
submitted by the parties and having given due consideration to
the arguments advanced and the issues raised by the parties, we
resolve Carroll's points of error as follows:
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1. In support of his contention that the Circuit
Court erred in granting MCC's motion to dismiss or, in the
alternative, for summary judgment, Carroll argues: (l) the
motion was untimely because it was filed five months after the
answer to the Cross-Claim; (2) the January 29, 2002 Memorandum
Opinion entered by the Intermediate Court of Appeals (ICA)
regarding the case-in-chief did not preclude the Cross-Claim for
indemnification or equitable compensation; (3) the movant did not
meet its burden under HRCP Rule 56; (4) there were genuine issues
of material fact precluding summary judgment; and (5) Carroll
should have been granted relief pursuant to HRCP Rule 56(f).
We reject Carroll's argument that MCC's motion was
untimely. HRCP Rule 12(h)(2) provides: "A defense of failure to
state a claim upon which relief can be granted . . . may be made
in any pleading permitted or ordered under Rule 7(a), or by
motion for judgment on the pleadings, or at the trial on the
merits." HRCP Rule 56(b) provides: "[A] motion seeking relief
under this rule shall be filed and served no less than 50 days
before the date of the trial unless granted permission by the
court and for good cause shown." Notwithstanding the HRCP Rule
l2(b) language that a "motion making any of these defense shall
be made before pleading if a further pleading is permitted[,]"
MCC's motion was clearly within the time period otherwise allowed
pursuant to Rules 12 and 56.
On Carroll's second argument, although not dispositive
of the issues presented on this appeal, we agree that the ICA's
earlier Memorandum Opinion did not preclude Carroll's cross-claim
for indemnification and equitable compensation. With respect to
Carroll's attorney's fees and costs incurred in the case-in-
chief, this court concluded that Carroll was not entitled to
attorney's fees and costs from the plaintiff under a provision of
a 1993 agreement because Carroll was not a part to that
agreement, and Carroll was not entitled to an award as a
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"prevailing party" because Carroll lost on the declaratory
judgment cause of action, which was the only claim to which he
was a party. In short, this court previously ruled that Carroll
was not entitled to attorney's fees and costs from the plaintiff,
and did not address whether Carroll might be entitled to payment
from MCC. Certain aspects of the court's prior decision,
nevertheless, are helpful to an understanding of the underlying
claims for which Carroll seeks indemnification of his litigation
expenses. j
We consider Carroll's third and fourth arguments
together, as both of them pertain to the Circuit Court‘s summary
judgment ruling in favor of MCC. The Hawafi Supreme Court has
articulated that:
[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 inferences drawn therefrom in the light most
favorable to the party opposing the motion.
Kahale v. Citv and Countv of Honolulu, 104 Hawafi 341, 344/ 90
P.3d 233, 236 (2004) (Citation Omitted).
The evidentiary standard required of a moving party in
meeting its burden on a summary judgment motion depends on
whether the moving party will have the burden of proof on the
issue at trial. Where the moving party is the defendant, who
does not bear the ultimate burden of proof at trial, summary
judgment is proper when the nonmoving party-plaintiff --
fails to make a showing sufficient to establish the
existence of an element essential to that party's case, and
on which that party will bear the burden of proof at trial.
In such a situation, there can be no genuine issue as to any
material fact, since a complete failure of proof concerning
an essential element of the nonmoving party's case
necessarily renders all other facts immaterial. The moving
party is entitled to judgment as a matter of law because the
nonmoving party has failed to make a sufficient showing on
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an essential element of [his or] her case with respect to
which [he or] she has the burden of proof.
Exotics Hawaiii-Kona, Inc. v. E.I. Du Pont de Nemours & Co., 116
HawaiU.277, 302, 172 P.3d 1021, 1046 (2007) (citations, internal
quotation marks, brackets, and ellipses omitted).
Viewing the evidence and the inferences therefrom in
the light most favorable to the nonmoving party, which we must
do, we conclude that the Circuit Court did not err in granting
summary judgment in favor of MCC. See, e.g., Kamaka v. Goodsill
Anderson Quinn & Stifel, 117 Hawafi 92, 104, 176 P.3d 91, 105
(2008). Carroll seeks damages from MCC on two different grounds.
First, Carroll argued that, as a director of MCC, he was entitled
to indemnification from MCC under Hawaii Revised Statutes (HRS)
§§ 414-242 and 414-245. As argued by MCC, neither of these
statutes was enacted at the time that the plaintiff brought suit
against MCC and Carroll. Even if these statutes were applicable
to this case retroactively, they would not support Carroll's
claims for indemnification. HRS § 414-242 is merely permissive
and does not require indemnification of a director. HRS § 414-
245 provides, in relevant part:
Court-ordered indemnification and advance for
expenses. (a) A director who is a party to a proceeding
because the director is a director may apply for
indemnification or an advance for expenses to the court
conducting the proceeding or to another court of competent
jurisdiction. After receipt of an application and after
giving any notice it considers necessary, the court shall:
(1) Order indemnification if the court determines that
the director is entitled to mandatory indemnification
under section 414-243;
(2) Order indemnification or advance for expenses if
the court determines that the director is entitled to
indemnification or advance for expenses pursuant to a
provision authorized by section 414-249(a); or
(3) Order indemnification or advance for expenses if
the court determines, in view of all the relevant
circumstances, that it is fair and reasonable:
(A) To indemnify the director; or
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Carroll is not entitled to indemnification under HRS
§ 414-245(a)(1) because, inter alia, the plaintiff prevailed
against Carroll on the declaratory judgment claim, and HRS § 414-
243 mandates indemnification only if, inter alia, a director is
"wholly successful" in his or her defense;
The Circuit Court did not err in concluding that
Carroll is not entitled to indemnification under HRS § 414-
245(a)(2) because, inter alia, there is no genuine issue of
material fact raised concerning whether Carroll was sued as a
shareholder and a signatory of a 1983 stock redemption agreement,
and not Vby reason of his being" a director of MCC, as required
for indemnification under the statute and the MCC bylaws. In
support of summary judgment, MCC pointed to the language of the
underlying complaint and the issues raised in the plaintiff's
claim for declaratory relief (the only claim brought against
Carroll), which sought a declaration that the 1983 stock
redemption agreement terminated by its own terms and,
accordingly, MCC and Carroll were not entitled to purchase
plaintiff's shares in MCC at their "book value." With its reply
memorandum, MCC also submitted a declaration from the plaintiff's
attorney who stated, without qualification, that the only claim
against Carroll was the claim for declaratory relief against
Carroll in his capacity as a shareholder and party to the 1983
stock redemption agreement. Upon review, the Declaration of
Carroll and the exhibits submitted in opposition to summary
judgment do not raise a genuine issue of material fact as to the
nature of the claim against Carroll. Likewise, the mere mention
of Carroll's status as a director of MCC, in a recital in the
complaint, does not change the substance of the claim against
Carroll. Accordingly, the Circuit Court did not err in granting
summary judgment against Carroll on this aspect of his claim for
indemnification.
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we also reject Carroll's contention that the Circuit
Court erred in granting summary judgment on Carroll's claim for
equitable compensation for services he provided "to MCC and to
counsel for MCC during litigation in this action." The parties
agree that Carroll was not counsel of record for MCC, there is no
contractual basis for an award of compensation to Carroll, and
that Carroll had a conflict of interest that precluded him from
representing MCC. In his opening brief, Carroll argues that:
"Equity and fairness require that the court should at least look
at the evidence before deciding such a claim." Upon review of
the evidence submitted in opposition to MCC's motion, we conclude
'that Carroll failed to raise a genuine issue of material fact
concerning his claim that he was entitled to equitable
compensation from MCCQ There is no evidence that his efforts as
a self-represented party were not principally, or at least
partially, for his own benefit. In addition, the only statements
of accounts submitted to the Circuit Court and showing services
to MCC were for periods prior to the litigation and no evidence
was submitted of the time and value of services purportedly
rendered to MCC during the litigation. Finally, none of the
authorities cited by Carroll support equitable compensation under
circumstances in which the lawyer and the person or entity
benefitted by the lawyer's actions agreed that the lawyer was not
acting as that person or entity's lawyer due to an admitted
conflict of interest and the lawyer's services were necessary to
his own defense in the case. We conclude that the Circuit Court
did not err in granting summary judgment in favor of MCC on
Carroll's claim for equitable compensation.
Finally, we reject Carroll's argument that the Circuit
Court abused its discretion in denying his request for further
discovery pursuant to HRCP Rule 56(f). Carroll merely recited
the language of Rule 56(f) and failed to demonstrate how a
postponement would enable him to rebut MCC's showing of an
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absence of a genuine issue of material fact. See, e.g., Acoba v.
General Tire, Inc., 92 HawaFi 1, 9-10, 986 P.2d 288, 296-97
(l999).
2. As Carroll's second point of error is based on the
same grounds as his first point of error, for the foregoing
reasons, we conclude that the Circuit Court did not err in
awarding MCC attorney's fees as the prevailing party on the
Cross-Claim.
Accordingly, we affirm the Circuit Court's November 6,
2007 Judgment.
DATED: Honolulu, Hawafi, April 26, 2010.
On the briefs:
Christopher F. Carroll
Pro Se Defendant/
Cross-Claimant/Appellant
Judith Neustadter-Naone
for Plaintiff/Counter Claim
Defendant/Appellee
PETER C. JONES
Associate Judge
Edward C. Kemper
for Defendant/Counterclaimant/
Cross-Claim Defendant/Appellee
MAUI CLASSIC CHARTERS, INC.