Arquette v. State.Â

***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***

Electronically Filed
Supreme Court
SCWC-11-0000416
14-DEC-2012
09:04 AM

IN THE SUPREME COURT OF THE STATE OF HAWAI#I

---o0o---

ALDEN JAMES ARQUETTE,
Petitioner/Plaintiff-Appellant/Cross-Appellee,

vs.

STATE OF HAWAI#I, STEPHEN H. LEVINS, and MICHAEL J.S. MORIYAMA,
Respondents/Defendants-Appellees/Cross-Appellants.

SCWC-11-0000416

CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
(CAAP-11-0000416; CIV. NO. 08-1-0118)

December 14, 2012

NAKAYAMA, ACTING C.J, ACOBA, MCKENNA, AND POLLACK, JJ., AND
CIRCUIT JUDGE CRANDALL, IN PLACE OF RECKTENWALD, C.J., RECUSED

OPINION OF THE COURT BY ACOBA, J.

We hold, first, that a plaintiff may bring an action in

tort for the maintenance of a malicious prosecution as well as

for the initiation of a malicious prosecution. Second, we hold

that the Circuit Court of the First Circuit (the court)1 properly

1
The Honorable Karl K. Sakamoto presided.
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granted the December 24, 2009 motion for summary judgment filed

by Respondents/Defendants-Appellees/Cross-Appellants State of

Hawai#i (the State), Stephen H. Levins (Levins), and Michael J.S.

Moriyama (Moriyama) (collectively, Respondents) with respect to

the claim of Petitioner/Plaintiff-Appellant/Cross-Appellee Alden

James Arquette (Petitioner) for initiation of a malicious

prosecution, because there was no genuine issue of material fact

that Moriyama had probable cause to file a complaint against

Petitioner and that Moriyama did not act with malice. Third, we

conclude that although the court did not recognize a cause of

action for maintenance of a malicious prosecution, the court

properly granted Respondents’ April 12, 2010 motion for summary

judgment, because there was no genuine issue of material fact

that Moriyama maintained the prosecution with probable cause and

without malice. Fourth, Hawai#i Revised Statutes (HRS) § 487-1

(2008)2 does not set forth a standard of care in a claim for

negligence. Fifth, we reaffirm that when denying costs to the

prevailing party, the court must state its reasons for doing so

2
HRS § 487-1 states:

Legislative Intent. The public health, welfare
and interest require a strong and effective consumer
protection program to protect the interests of both
the consumer public and the legitimate business
person. Toward this end, a permanent office of
consumer protection is created to coordinate the
services offered to the consumer by various state and
county agencies, together with private organizations,
and to aid in the development of preventive and
remedial programs affecting the interest of the
consumer public.

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on the record, and therefore the court erred in failing to state

its rationale for granting in part Petitioner’s July 28, 2010

Motion for Review and/or to Set Aside Taxation of Costs (Motion

for Review of Costs). Finally, we conclude that the Intermediate

Court of Appeals (ICA) did not abuse its discretion in denying

Petitioner’s November 29, 2011 Motion for Recusal of Substitute

Judge, the Honorable Associate Judge Katherine G. Leonard (Motion

for Recusal), because the facts as alleged were insufficient to

warrant her recusal.

For the reasons stated herein, we affirm in part and

vacate in part the court’s April 19, 2011 Amended Final Judgment.

We affirm the Amended Final Judgment with respect to the court’s

March 29, 2010 and June 30, 2010 orders granting summary

judgment, but for the reasons stated herein, and we vacate the

court’s Amended Final Judgment with respect to its August 23,

2010 Order Granting Plaintiff’s Motion for Review of Costs (Order

Granting Costs) and remand for review of Respondents’ taxation of

costs. Therefore, we affirm the August 10, 2012 judgment of the

ICA filed pursuant to its July 12, 2012 Summary Disposition

Order, but based on the reasons stated herein.3 Additionally, we

affirm the ICA’s December 6, 2011 order denying Petitioner’s

Motion for Recusal.

3
The SDO was filed by Presiding Judge Daniel R. Foley and Associate
Judges Alexa D.M. Fujise and Katherine G. Leonard.

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I.

A.

Respondents initiated an action on July 19, 2004 (2004

action), against Petitioner and others, based on an investigation

conducted by the Office of Consumer Protection (OCP). The

complaint alleged, inter alia, that Petitioner had participated

in a scheme to sell long term deferred annuities to elderly

consumers through unfair or deceptive acts or practices in

violation of HRS §§ 480-2 (1993 & Supp. 2002)4, 481A-3 (1993)5,

4
HRS § 480-2 provides:

Unfair competition, practices, declared unlawful.
(a) Unfair methods of competition and unfair or
deceptive acts or practices in the conduct of any
trade or commerce are unlawful.
(b) In construing this section, the courts and
the office of consumer protection shall give due
consideration to the rules, regulations, and decisions
of the Federal Trade Commission and the federal courts
interpreting section 5(a)(1) of the Federal Trade
Commission Act (15 U.S.C. 45(a)(1)), as from time to
time amended.
(c) No showing that the proceeding or suit would
be in the public interest (as these terms are
interpreted under section 5(b) of the Federal Trade
Commission Act) is necessary in any action brought
under this section.
(d) No person other than a consumer, the
attorney general or the director of the office of
consumer protection may bring an action based upon
unfair or deceptive acts or practices declared
unlawful by this section.
(e) Any person may bring an action based on
unfair methods of competition declared unlawful by
this section.

5
HRS § 481A-3 provides, in pertinent part:

Deceptive trade practices.
(a) A person engages in a deceptive trade
practice when, in the course of the person's business,
vocation, or occupation, the person:
. . . .
(continued...)

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and other statutory provisions. Respondents identified several

individuals, including Limuel and Hazel Cherry (the Cherrys) and

other consumers as the target of Petitioner’s alleged scheme. As

alleged by Respondents in the complaint, the scheme involved

Petitioner, insurance agent Dan Fox, attorney Rodwin Wong and

others using Rodwin Wong’s name and law practice on mailings

offering information about elder law to solicit consumers.

Individuals who responded to the mailings were then contacted at

their homes where Petitioner and others falsely identified

themselves as “paralegals” working for Rodwin Wong in order to

5
(...continued)
(2) Causes likelihood of confusion
or of misunderstanding as to the source,
sponsorship, approval, or certification of
goods or services;
(3) Causes likelihood of confusion
or of misunderstanding as to affiliation,
connection, or association with, or
certification by, another;
. . . .
(5) Represents that goods or
services have sponsorship, approval,
characteristics, ingredients, uses,
benefits, or quantities that they do not
have or that a person has a sponsorship,
approval, status, affiliation, or
connection that the person does not have;
. . . .
(11) Makes false or misleading
statements of fact concerning the reasons
for, existence of, or amounts of price
reductions; or
(12) Engages in any other conduct
which similarly creates a likelihood of
confusion or of misunderstanding.
(b) In order to prevail in an action under this
chapter, a complainant need not prove competition
between the parties or actual confusion or
misunderstanding.
(c) This section does not affect unfair trade
practices otherwise actionable at common law or under
other statutes of this State.

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obtain personal and confidential financial information from them.

Based on this information, Petitioner and others allegedly sold

or attempted to sell long term annuities to these consumers while

failing to provide them with information necessary to make

decisions in their best interest and “engag[ing] in conduct which

created a likelihood of confusion or of misunderstanding.”

On December 21, 2005, the court6 filed an order

granting Petitioner’s motion for partial summary judgment on the

claims pertaining to the Cherrys.7 On December 22, 2005, the

court granted in part and denied in part, Petitioner’s motion for

summary judgment on the claims pertaining to the other consumers.

On May 16, 2006, the court denied Moriyama’s motion to continue

trial, and ordered a severance of the trial as to Petitioner.

Petitioner and Respondents stipulated to dismiss the remaining

claims against Petitioner pursuant to Hawai#i Rules of Civil

Procedure (HRCP) Rule 41(a)(1)(B)8 and the court filed a

6
The Honorable Victoria S. Marks presided over the 2004 action
underlying Petitioner’s claim.

7
This order was granted on the basis of res judicata.

8
Rule 41 provides, in relevant part:

(a) Voluntary dismissal: Effect thereof.
(1) By plaintiff; by stipulation. An action may
be dismissed by the plaintiff without order of court
(A) by filing a notice of dismissal at any time before
the return date as provided in Rule 12(a) or service
by the adverse party of an answer or of a motion for
summary judgment, or (B) by filing a stipulation of
dismissal signed by all parties who have appeared in
the action, in the manner and form prescribed by Rule
(continued...)

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Stipulation for Dismissal Without Prejudice on June 26, 2006.

B.

Petitioner then filed the present action against

Respondents on January 17, 2008. His allegations were based on

the facts as recited above, and in his complaint, he alleged that

Respondents were liable for malicious prosecution, negligent

investigation, negligent failure to train and/or supervise, and

punitive damages arising from the initiation and maintenance of

the 2004 action. Petitioner sued Moriyama in his individual and

official capacities for negligent investigation and malicious

prosecution. In addition, Petitioner sued Levins in his

individual and official capacities, as well as the State, for

negligent failure to train and/or supervise Moriyama.

Respondents answered the complaint on May 29, 2008, and discovery

commenced in the case, including requests for production of

documents, interrogatories, and depositions.

On December 24, 2009, Respondents filed their first

motion for summary judgment on Petitioner’s claims pertaining to

the initiation of the prosecution in the 2004 action, and on

8
(...continued)
41.1 of these rules. Unless otherwise stated in the
notice of dismissal or stipulation, the dismissal is
without prejudice, except that a notice of dismissal
operates as an adjudication upon the merits when filed
by a plaintiff who has once dismissed in any court of
the United States, or of any state, territory or
insular possession of the United States an action
based on or including the same claim.

(Emphasis added.)

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February 22, 2010, Petitioner filed a memorandum in opposition.

The court issued an order granting in part Respondents’ first

motion for summary judgment with respect to the negligent

supervision and training claims against the State and Levins,9 as

to the negligent investigation claim against Moriyama, and as to

the initiation of a malicious prosecution claim against Moriyama.

The court denied in part Respondents’ first motion for summary

judgment.10 The court noted that it had not ruled on

Petitioner’s claim that Moriyama was liable for maintaining a

malicious prosecution.

On April 12, 2010, Respondents filed a second motion

for summary judgment on Petitioner’s claims pertaining to the

maintenance of the prosecution in the underlying action.

Petitioner filed his opposition to the motion on June 4, 2010,

and Respondents filed a reply on June 10, 2010. On July 30,

2010, the court issued an order granting Respondents’ second

motion for summary judgment as to Petitioner’s claims pertaining

to the maintenance of the prosecution in the 2004 action.

On July 2, 2010, Respondents filed a Notice of Taxation

of Costs pursuant to HRCP Rule 54(d) and HRS § 607-9 (1993).

Respondents asked the court to require Petitioner to pay for the

9
Petitioner did not appeal the court’s ruling as to the negligent
supervision claims against Levins and the State.

10
The court denied Respondents’ first motion for summary judgment as
to “Doe defendants” who were not identified at the time the complaint was
filed. The “Doe defendants” are not at issue in this case.

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costs of mediation, of depositions of certain persons, and of the

transcript of the first motion for summary judgment hearing. On

July 13, 2010, Petitioner filed his Motion for Review of Costs.

Respondents filed a Memorandum in Opposition to Petitioner’s

Motion for Review of Costs. On August 23, 2010, the court

granted in part and denied in part Petitioner’s Motion. The

court entered final judgment in favor of Respondents on September

2, 2010 as to Moriyama in his official and individual capacities,

Levins in his official and individual capacities, and the State.

C.

Petitioner filed a Notice of Appeal to the ICA on May

18, 2011. On November 29, 2011, Petitioner filed his Motion for

Recusal, requesting that Judge Leonard be recused from the ICA

panel. The ICA entered an order denying Petitioner’s Motion for

Recusal on December 6, 2011.

II.

On appeal to the ICA, Petitioner argued that the court

erred (1) in concluding that Respondents established probable

cause to initiate the 2004 prosecution of Petitioner, (2) in

deciding that HRS § 487-1 does not create an actionable duty of

care to support a claim for negligence, and (3) in holding that

Hawai#i does not recognize a tort action for maintaining a

prosecution when probable cause to continue no longer exists.

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Respondents filed a Cross-Appeal to the ICA (Cross-Appeal),

seeking a reversal of the court’s Order Granting Costs in part.

With respect to Petitioner’s first argument, the ICA

upheld the court’s grant of summary judgment, concluding that

Respondents had probable cause to initiate a prosecution.

Arquette v. State, No. CAAP-11-0000416, 2012 WL 2864352, at *1

(App. July 12, 2012) (SDO). According to the ICA, Respondents

presented sufficient evidence to indicate they had an honest and

reasonable belief that there was probable cause to initiate the

2004 action, based on a declaration by Moriyama and evidence that

Petitioner’s business cards and letterhead identified Petitioner

as a paralegal for attorney Rodwin Wong, but listed the address

and phone number of Dan Fox’s insurance sales company which was,

at the time, under investigation by the OCP. Id. at *2.

In addressing Petitioner’s second argument, the ICA

affirmed the court’s determination that HRS § 487-1 did not

create a private right of action. Id. at *3. The determinative

factor, the ICA noted, was that there was no legislative history

establishing a private right of action in HRS § 487-1. Id.

The ICA also rejected Petitioner’s third argument,

holding that Hawai#i does not recognize the tort of maintaining a

malicious prosecution. Id. The ICA explained that Young v.

Allstate Ins. Co., 119 Hawai#i 403, 198 P.3d 666 (2008), “clearly

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indicates that malicious prosecution is limited to the initiation

of an action against a defendant.” Id.

Lastly, the ICA noted that although “‘[t]he award of

taxable cost is within the discretion of the circuit court and

will not be disturbed absent a clear abuse of discretion[,]’” id.

at *4 (quoting Pulawa v. GTE Hawaiian Tel, 112 Hawai#i 3, 10–11,

143 P.3d 1205, 1212–13 (2006)), the court “abused its discretion

when it reduced the amount of taxable costs without adequate

explanation or a readily discernable rationale in the record.”

Id. (citing Wong v. Takeuchi, 88 Hawai#i 46, 52, 961 P.2d 611,

617 (1998)).

III.

Petitioner presents the following questions in his

Application, “[1] [d]id the ICA gravely err in holding that a

prosecution continued without probable cause would not support a

cause of action for malicious prosecution? [;] [2] [d]id the ICA

gravely err in finding that, taking all the facts and reasonable

inferences in the light most favorable to [Petitioner], there was

probable cause to initiate the prosecutions? [;] [3] [d]id the

ICA gravely err in misconstruing [Petitioner’s] argument that HRS

§ 487-1 stated a standard of care? [;] [4] [d]id the ICA gravely

err in overturning the [court’s] discretionary decision to deny

[Respondent’s] costs that were not statutorily authorized or

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reasonably necessary?[; and] [5] [d]id the ICA gravely err in

denying [Petitioner’s] Motion For Recusal of Substitute Judge?”

On October 22, 2012, Respondents filed a Response to

Petitioner’s Application (Response).

IV.

A.

We hold that continuing to prosecute an action without

probable cause is included in the tort of malicious prosecution.

The ICA held that Young “clearly indicates that [the tort of]

malicious prosecution is limited to the initiation of an action

against a defendant.” Arquette, 2012 WL 2864352, at *3.

However, in Young, this court addressed the tort of malicious

defense, not malicious prosecution. Although some dicta in the

case may suggest that the tort of malicious prosecution is

limited, Young does not decide the issue raised in the instant

case. Instead, whether the tort of malicious prosecution

includes maintaining a prosecution in the absence of probable

cause is a matter of first impression.

In Young, inter alia, this court declined to recognize

the tort of malicious defense. 119 Hawai#i at 416, 198 P.3d at

679. The Young court analogized the malicious defense tort to

the tort of malicious prosecution, stating that “it is not

appropriate to derive the tort of malicious defense from the tort

of malicious prosecution where the tort of malicious prosecution

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remedies harms resulting from the initiation of a lawsuit.” Id.

(emphasis in original). Although this language appears to

suggest that malicious prosecution is restricted to actions

stemming from the initiation of the lawsuit, that interpretation

is inapposite given the context of the case.

When Young emphasizes the importance of initiating a

lawsuit for purposes of the malicious prosecution tort, this

court is emphasizing the difference between a situation in which

the defendant has wrongfully initiated a lawsuit and a situation

where the defendant has wrongfully defended him or herself in an

existing lawsuit. See id. at 418, 198 P.3d at 681 (“The tort of

malicious prosecution acknowledges the special, particular harms

that a defendant suffers when a lawsuit is maliciously initiated

against it.”). Thus, the focus of this court was on the status

of the parties, and it was simply contrasting the plaintiff, who

initiates a suit, with the defendant, who responds to a suit.

The decision further states that “[b]ecause a malicious

prosecution claim is triggered when the unsuccessful party

initiated the lawsuit, ‘the defendant is not liable for

proceedings unless he has initiated them.’” Id. at 417, 198 P.3d

at 680 (quoting Prosser and Keeton on Torts § 120, at 893 (5th

ed., W. Page Keeton, et al. eds., 1984)) (brackets omitted).

Here, again, this court was distinguishing between the two

parties and not explicitly limiting the “trigger[ing]” of a

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malicious prosecution to when a lawsuit is initiated. Id. The

question of when a defendant may bring a claim for malicious

prosecution was not at issue in Young. Thus, the cases cited in

Young setting forth the elements of a malicious prosecution,

including that a plaintiff must show that the prior proceedings

were “initiated by the defendant without probable cause, and []

initiated by the defendant with malice[,]” id. at 430, 198 P.3d

at 693 (citing Wong v. Cayetano, 111 Hawai#i 462, 478, 143 P.3d

1, 17 (2006)) (emphasis added), are not controlling as to whether

this court may consider a continuation of the tort beyond

initiation of a prosecution. In sum, Young has no preclusive

effect on whether this court should now recognize a tort for

maintaining a malicious prosecution.

B.

It is well-established that this court may recognize a

new cause of action in tort. Fergerstrom v. Hawaiian Ocean View

Estates, 50 Haw. 374, 375, 441 P.2d 141, 142 (1968) (holding that

this court could adopt a cause of action for invasion of privacy,

despite the fact that neither the ancient common law nor prior

Hawai#i case law recognized the right). The purpose underlying

the tort of malicious prosecution is to protect “the interest in

freedom from unjustifiable litigation.” Young, 119 Hawai#i at

418, 198 P.3d at 681 (quoting Prosser and Keeton on Torts § 119,

at 870) (brackets omitted). Although litigation may be warranted

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in the eyes of the plaintiff at its commencement, if that

plaintiff becomes aware that the litigation is no longer

justified, then the plaintiff should terminate the litigation.

Indeed, “litigation ‘has a profound effect upon the quality of

one’s life that goes beyond the mere entitlement to counsel

fees.’” Id. at 421, 198 P.3d at 684 (quoting Aranson v.

Schroeder, 671 A.2d 1023, 1028 (N.H. 1995)).

If a plaintiff fails to terminate litigation when he or

she knows it would be appropriate to do so, then the same harms

are inflicted on the defendant’s quality of life that would have

been inflicted if the plaintiff knew that the litigation was

unjustified in the first instance. In order to properly guard

against the harms associated with protracted litigation, the tort

of maintaining malicious prosecution should be recognized.

Moreover, many of the reasons that this court

enumerated in Young for rejecting the tort of malicious defense

are inapplicable to the tort of maintaining a malicious

prosecution. In Young, the court noted that “the malicious

defense tort is ‘unfamiliar, if known at all[,]’” id. at 417, 198

P.3d at 680 (quoting Jonathan K. Van Patten & Robert E. Willard,

The Limits of Advocacy: A Proposal for the Tort of Malicious

Defense in Civil Litigation, 35 Hastings L.J. 891, 893 (1984)),

and that only one jurisdiction, New Hampshire, had recognized it.

Id. at 418, 198 P.3d at 682. While not dispositive, this factor

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was relevant in this court’s decision not to extend Hawai#i tort

law. Unlike the malicious defense tort that has limited

acceptance, a cause of action for continuing a malicious

prosecution has been recognized in the Restatement (Second) of

Torts,11 and by a substantial number of states.12 Although not

controlling, the recognition in other jurisdictions is

11
Section 674 of the Restatement provides:

One who takes an active part in the initiation,
continuation or procurement of civil proceedings
against another is subject to liability to the other
for wrongful civil proceedings if
(a) he acts without probable cause, and
primarily for a purpose other than that of
securing the proper adjudication of the claim
in which the proceedings are based, and
(b) except when they are ex parte, the
proceedings have terminated in favor of the person
against whom they are brought.

Restatement (Second) of Torts § 674 (emphasis added).

12
As the California Supreme Court noted in Zamos v. Stroud, 87 P.3d
802, 808 (Cal. 2004):

The Restatement's position on this question has been
adopted or was anticipated by the courts of a
substantial number of states: Alabama (Laney v.
Glidden Co., Inc.[,] []194 So. 849, 851–852 [(Ala.
1940)]); Arizona (Smith v. Lucia[,] []842 P.2d 1303,
1308 [(Ariz. Ct. App. 1992)]); Arkansas (McLaughlin v.
Cox[,] []922 S.W.2d 327, 331–332 [(Ark. 1996)]);
Colorado (Slee v. Simpson[,] []15 P.2d 1084, 1085
[(Colo. 1932)]); Idaho (Badell v. Beeks[,] []P.2d 126,
128 [(Idaho 1988)]); Iowa (Wilson v. Hayes[,] 464
N.W.2d 250, 264 [(Iowa 1990)]); Kansas (Nelson v.
Miller[,] []607 P.2d 438, 447–448 [(Kan. 1980)]);
Mississippi (Benjamin v. Hooper Electronic Supply Co.,
Inc.[,] []568 So. 2d 1182, 1189, fn. 6 [(Miss.
1990)]); New York (Broughton v. State of New York[,]
[]335 N.E.2d 310 [(N.Y. 1975)]); Ohio (Siegel v. O.M.
Scott & Sons Co.[,] []56 N.E.2d 345, 347 [(Ohio Ct.
App. 1943)]); Oregon (Wroten v. Lenske[,] []835 P.2d
931, 933–934 [(Or. 1992)]); Pennsylvania (Wenger v.
Philips[,] []45 A. 927 [(Pa. 1900)]); and Washington
(Banks v. Nordstrom, Inc.[,] []787 P.2d 953, 956–957
[(Wash. 1990)]).

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instructive as to whether a new cause of action should be adopted

in Hawai#i. As this court stated in Fergerstrom, “[w]e are

disinclined to decide an important issue merely on the basis of

the number of states adopting a given approach. But some weight

must be accorded to the overwhelming recognition of a common law

right of privacy by all but a few states.” 50 Haw. at 375, 441

P.2d at 143.

Respondents counter that allowing a cause of action for

continuing a malicious prosecution would promote lawsuits ad

infinitum. (Citing Brodie v. Hawai#i Auto. Retail Gasoline

Dealers Ass’n, 2 Haw. App. 316, 321, 631 P.2d 600, 604 (1981),

rev’d on other grounds, 65 Haw. 598, 655 P.2d 863 (1982).)

However, it would no more promote lawsuits than this court’s

current conception of the tort of malicious prosecution. In its

reasoning for rejecting the tort of malicious defense, Young

states that “[p]ermitting a plaintiff to bring a second lawsuit

against the same party as the underlying case where other

workable remedies exist may allow such plaintiff to recover twice

against the defendant and needlessly burden the already

overworked judicial system.” Young, 119 Hawai#i at 424, 198 P.3d

at 687.

In contrast, recognizing the tort of maintaining a

malicious prosecution would not allow any additional recovery,

but would provide a remedy to those litigants who may have been

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brought into court on the basis of good faith, but who were

maliciously kept there. Further, as in bringing a claim for

initiating malicious prosecution, a complainant would have to

premise his or her claim for maintaining a malicious prosecution

on narrowly construed elements. As with the tort of initiating

malicious prosecution, the tort of maintaining malicious

prosecution would not chill zealous advocacy, because liability

would only attach when the plaintiff maliciously maintains an

unreasonable claim. See id., at 431, 198 P.3d at 694 (Levinson,

J., dissenting) (citing Cayetano, 111 Hawai#i at 483, 143 P.3d at

22 (reiterating that malice is an essential element that the

complainant must demonstrate in order to maintain an action for

malicious prosecution)).

Additionally, the existing rules and statutes do not

fully remedy the harms inflicted by protracted litigation. As

the Court of Appeal in California pointed out when addressing

this issue, “‘[h]olding attorneys liable for the damages a party

incurs as a result of the attorneys prosecuting civil claims

after they learn the claims have no merit will [] encourage

voluntary dismissals of meritless claims at the earliest stage

possible[,] . . . [and] the attorney will serve the client’s

best interests in that the client will avoid the cost of

fruitless litigation[.]’” Zamos, 87 P.3d at 809-10 (quoting

Zamos v. Stroud, 1 Cal. Rptr. 3d 484, 494 (Cal. Ct. App. 2003)).

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Although the conduct associated with continuing a malicious

prosecution is subject to sanctions under HRCP Rule 11

(permitting recovery of attorneys fees),13 attorneys fees may not

always provide a complete remedy to a litigant whose reputation

may have been damaged. See Young, 119 Hawai#i at 418, 198 P.3d

at 681 (citing Stanley v. Superior Court, 181 Cal.Rptr. 878, 882

(Cal. Ct. App. 1982)). Furthermore, “[s]omewhere along the line,

the rights of the defendant to be free from costly and harassing

litigation must be considered. So too must the time and energies

13
See, e.g., HRCP Rule 11 which states, in pertinent part:

(b) Representations to court. By presenting to
the court (whether by signing, filing, submitting, or
later advocating) a pleading, written motion, or other
paper, an attorney or unrepresented party is
certifying that to the best of the person's knowledge,
information, and belief, formed after an inquiry
reasonable under the circumstances:
(1) it is not being presented for any improper
purpose, such as to harass or to cause unnecessary
delay or needless increase in the cost of litigation;
(2) the claims, defenses, and other legal
contentions therein are warranted by existing law or
by a nonfrivolous argument for the extension,
modification, or reversal of existing law or the
establishment of new law;
(3) the allegations and other factual
contentions have evidentiary support or, if
specifically so identified, are likely to have
evidentiary support after a reasonable opportunity for
further investigation or discovery; and
(4) the denials of factual contentions are
warranted on the evidence or, if specifically so
identified, are reasonably based on a lack of
information or belief.

(c)Sanctions. If, after notice and a reasonable
opportunity to respond, the court determines that
subdivision (b) has been violated, the court may,
subject to the conditions stated below, impose an
appropriate sanction upon the attorneys, law firms, or
parties that have violated subdivision (b) or are
responsible for the violation.

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of our courts and the rights of would be litigants awaiting their

turns to have other matters resolved.” Ellis v. Harland

Bartholomew & Assocs., 1 Haw. App. 420, 428, 620 P.2d 744, 750

(1980) (citation omitted).

C.

A workable standard for continuation of malicious

prosecution is easily garnered from the elements that must be

shown to prove the initiation of a malicious prosecution. Thus,

the standard for continuing a malicious prosecution would be (1)

that the prior proceedings were terminated in the plaintiff’s

favor, (2) that the prior proceedings were maintained without

probable cause, and (3) that the prior proceedings were

maintained with malice. See Zamos, 87 P.3d at 810 (with a

similar test for initiating malicious prosecution as Hawai#i,

applying the same standard to the continuation as to the

initiation of a suit). Hence, a claim for continuation of

malicious prosecution could be brought under circumstances in

which an attorney has taken affirmative action toward continuance

of a prosecution, despite the fact that the attorney knows he or

she lacks probable cause to do so, and that the attorney is

motivated by malice.

Although the tort of malicious prosecution is “‘not

generally favored in our legal system, and thus its requirements

are construed strictly against the party bringing the action,’”

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Young, 119 Hawai#i at 419, 192 P.3d at 682 (quoting Wong v.

Tabor, 422 N.E.2d 1279, 1283 (Ind. Ct. App. 1981)), the tort of

the continuation of a malicious prosecution is not an unwarranted

enlargement of the current doctrine but, rather, logically stems

from the policies underlying the tort.

V.

With respect to Petitioner’s second question, “‘[t]here

are three essential elements in a claim for [initiating]

malicious prosecution: (1) that the prior proceedings were

terminated in the plaintiff’s favor, (2) that the prior

proceedings were initiated without probable cause, and (3) that

the prior proceedings were initiated with malice.’” Myers v.

Cohen, 67 Haw. 389, 391, 688 P.2d 1145, 1148 (1984) (quoting

Brodie, 2 Haw. App. at 318, 631 P.2d at 602) (other citation

omitted) (emphasis added). Accordingly, in a valid claim for

initiating a malicious prosecution, all three elements must be

satisfied. In his Application to this court, Petitioner

challenged the ICA’s holding that the court properly granted

Respondents’ motion for summary judgment on the issue of whether

there was probable cause to initiate the prosecution.14

14
“‘Unlike other appellate matters, in reviewing summary judgment
decisions an appellate court steps into the shoes of the trial court and
applies the same legal standard as the trial court applies.’” Blaisdell v.
Dep’t of Pub. Safety, 119 Hawai#i 275, 284, 196 P.3d 277, 282 (2008) (quoting
Beamer v. Nishiki, 66 Haw. 572, 577, 670 P.2d 1264, 1270 (1983)). “This court
reviews a circuit court’s grant or denial of summary judgment de novo.” Id.
(citations omitted).

(continued...)

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A.

The issue of probable cause for initiation of the

prosecution was addressed most extensively in the proceedings and

is considered first. Probable cause in a malicious prosecution

action depends “not on the actual state of the facts but upon the

honest and reasonable belief of the party commencing the action.”

Brodie, 2 Haw. App. at 318, 631 P.2d at 602 (citations omitted).
[P]robable cause for the filing of a lawsuit exists
where a person:

reasonably believes in the existence of the
facts
upon which the claim is based, and either

(a) correctly or reasonably believes that
under those facts the claim may be valid
under the applicable law, or

(b) believes to this effect in reliance
upon the advice of counsel, sought in good
faith and given after full disclosure of
all relevant facts within his knowledge or
information.

Id. at 319, 631 P.2d at 602 (quoting Restatement (Second) of

Torts § 675 (1977)). The determination as to whether a

particular party had probable cause is both a subjective and

14
(...continued)
[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.

Id. (emphasis in original) (quoting Omerod v. Heirs of Kaheananui, 116 Hawai#i
239, 254-55, 172 P.3d 983, 998-99 (2007)) (citations omitted)).

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objective question. See, e.g., Bertero v. Nat’l. Gen. Corp., 118

Cal. Rptr. 184, 193 (1974); Williams v. City of New York, 508

F.2d 356, 359 (1974). The first question is whether the party

had the subjective belief that he or she possessed probable cause

in the underlying action. The second question is whether that

belief was reasonable.

B.

Respondents argued in their Memorandum in Support of

their first motion for summary judgment that “[a]ll the

evidence[] . . . establishes that, based on the information known

to Moriyama at the time he filed suit in July 2004, he had a

reasonable basis for initiating [the 2004 action] against

[Petitioner].”15 In support of this allegation, Respondents

attached Moriyama’s declaration stating that at the time the

action was filed, Petitioner and other defendants had been the

subject of an ongoing investigation for several years, and which

had shown Petitioner was involved with a group of insurance

salespeople who referred to themselves as “paralegals.”

According to Moriyama, he had information in 2004 based

on interviews with consumers that these salespeople were selling

15
The complaint against Petitioner in the 2004 action alleged, inter
alia, that he committed deceptive acts in falsely representing himself as a
paralegal, operating under the guise of estate planning, failing to provide
required information to consumers regarding replacement insurance or annuity
contracts, misrepresenting the suitability or appropriateness of selling
securities and purchasing deferred annuities, engaging in unlicensed
securities transactions, acting as an unlicensed investment adviser, employing
high pressure sales tactics, and targeting the elderly, in violation of HRS §§
480-2, 481A-3, and other statutory provisions.

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deferred annuities to elderly citizens in Hawai#i, and that OCP

had “initially identified thirty-three [] consumers who: 1)

Within the previous four [] years at the time had purchased or

signed applications to purchase annuities through Dan Fox or

others working with Dan Fox, and 2) Were in their seventies [] or

eighties [] at the time.” Respondents provided a list of these

thirty-three alleged consumers. Moriyama stated that at the time

the lawsuit was filed, “OCP knew four [] individuals or couples

who dealt with [Petitioner] and would be identified as witnesses

([the] Arrudas, James Gamache, [the] Paakaulas, and [the]

Pachecos).” Moriyama further averred that after filing the

lawsuit, four additional consumers who reported that they dealt

with [Petitioner] either complained to OCP or were referred to

OCP (James Ah Nee, the Cherrys16, and Blanche Schwarz).

As an example of the pattern which Petitioner and other

defendants allegedly engaged in, Moriyama stated that James

Gamache related that Petitioner “explained the ‘system’ and took

the check payable to Rodwin Wong” from James Gamache.

Respondents provided a copy of a receipt given to James Gamache

signed by Petitioner on a line marked “Paralegal Signature” and

16
Petitioner included a declaration attached to his Memorandum in
Opposition to Respondents’ first motion for summary judgment, which relates to
his alleged violation of a temporary restraining order obtained on behalf of
Mrs. Cherry. Petitioner’s interactions with the Cherrys were apparently the
subject of actions by other state agencies. This declaration by Petitioner
does not appear relevant to whether Moriyama acted with probable cause or
malice.

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that contained a “Law Offices of Rodwin L. Wong” letterhead, but

listed the address of what was allegedly Dan Fox’s insurance

business at 6650 Hawaii Kai Drive, Suite 201. Respondents also

included a copy of a business card given to the Pachecos that

identified Petitioner as a “paralegal” but listed the office

address of Dan Fox. According to Moriyama’s declaration, the

annuity contracts that were eventually sold to the Pachecos had

thirty year deferral periods, and Mrs. Pacheco was sixty-five

years old at the time she purchased the annuity. A redacted copy

of the specifications of the Pacheco annuity was also provided by

Respondents, which state the “Maturity Date” as September 13,

2029.

Additionally, Respondents provided the declaration of

Levins, Moriyama’s supervisor, stating that he discussed the

facts that supported the filing of the complaint, and it was his

“understanding that there was sufficient information to believe

that [Petitioner], along with others, were engaging in deceptive

and unfair sales practices in the marketing of high dollar amount

deferred annuities to a substantial number of elderly persons in

the State of Hawai#i.”

In his affidavit attached to both his Memoranda in

Opposition to Respondents’ first and second motions for summary

judgment, Petitioner alleges that “[a]ll work I performed for the

Law Offices of Rodwin Wong was at the direction of and under the

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supervision and responsibility of [Rodwin Wong][,] [Rodwin Wong]

described my job as being a paralegal[,]” “I did not sell,

attempt to sell and never even discussed the sale of [insurance

products or securities] with the Arrudas, [James Gamache, the

Paakaulas, and the Pachecos][,]” and “I was never privy to the

relationship between the Law Offices of Rodwin Wong, [Rodwin

Wong], [or] [Dan Fox].”

C.

1.

Under the probable cause standard, as noted before, the

first question is whether Moriyama subjectively believed that he

had probable cause to initiate the prosecution when he filed the

2004 complaint. This is unequivocally established through

Moriyama’s declaration, which states that “[t]he only reason

[Petitioner] and the other defendants were named in the [2004

action] was because the facts obtained through years of

investigation supported the allegations contained in the

complaint that Petitioner engaged in unfair and deceptive acts.”

The second question, then, is whether Moriyama’s belief

that he had probable cause was reasonable. Moriyama must have

both reasonably “believ[ed] in the existence of facts upon which

[his] claim [was] based” and “correctly or reasonably believed

that under those facts the claim may [have been] valid under the

applicable law.” Brodie, 2 Haw. App. at 318, 631 P.2d at 602.

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In this case, the declarations and other evidence

indicate that Moriyama, as well as other investigators and

attorneys at OCP, had engaged in an ongoing investigation for

several years. Thus there was a reasonable basis for Moriyama to

believe in the existence of facts upon which the complaint was

based.

Next, Respondents brought numerous claims against

Petitioner in the complaint, including, for example, that he had

engaged in unfair and deceptive trade practices, in violation of

HRS § 481A-3. As noted, HRS § 481A-3, the applicable law, states

in part that “[a] person engages in deceptive trade practice

when, in the course of the person’s business, vocation, or

occupation, the person: . . . . (3) [c]auses likelihood of

confusion or misunderstanding as to affiliation, connection, or

association with, or certification by, another . . . . or (12)

[e]ngages in any other conduct which similarly creates a

likelihood of confusion or of misunderstanding.” It is

undisputed that the business cards and letterhead Petitioner used

contained the name “Rodwin Wong,” and the address and telephone

number of Dan Fox’s insurance company. Based on the information

known to Moriyama when he filed the complaint, it was reasonable

for him to believe that, under the facts, the claim against

Petitioner of deceptive trade practices, inter alia, may have

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been valid under the applicable law. See Brodie, 2 Haw. App. at

318, 631 P.2d at 302.

2.

Petitioner argued, in his Memorandum in Opposition,

that there was no reasonable basis for Respondents’ 2004

complaint. He contends that Moriyama’s declaration constitutes

“inadmissible hearsay,” and that, without that declaration,

Respondents had not provided enough evidence to show that

Moriyama had a reasonable basis for initiating the lawsuit.

However, in deciding a motion for summary judgment, a court can

consider, among other things, declarations provided by the

parties to determine whether a genuine issue of material fact

exists. Blaisdell, 119 Hawai#i at 284, 196 P.3d at 282. Since

the reasonable belief had to exist in the mind of Moriyama, his

declaration was relevant to determining whether summary judgment

was appropriate on this issue.

Petitioner’s additional objections fail to create an

issue of material fact as to Moriyama’s reasonable belief.

Petitioner points to the fact that Moriyama did not identify

specific consumers in the complaint. But this was not necessary

to show that Moriyama had a “reasonable belief in the facts

underlying the complaint.” Petitioner asserted that Moriyama’s

motion to modify a protective order entered by the court, and

subsequent motion to continue trial indicated that he did not

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have probable cause at the time he filed the complaint. However,

Moriyama stated in his declaration that those efforts were tied

to obtaining more admissible evidence against Petitioner. The

mere fact that discovery was ongoing in the case does not

indicate that Moriyama lacked probable cause to file the

complaint in the first instance, because probable cause does not

require that a plaintiff have all the facts that he or she may

later obtain through discovery. Thus, Petitioner provides no

evidence to support his allegation that Moriyama did not believe

the facts underlying the complaint, or that Moriyama’s belief was

unreasonable.

Consequently, Moriyama demonstrated that he

subjectively believed in the facts upon which the complaint was

based. Further, his belief in the existence of these facts was

reasonable inasmuch as the facts were the result of a multi-year

OCP investigation. Finally, for the reasons stated before, the

facts reasonably supported Moriyama’s belief that it was

appropriate to bring a claim against Petitioner for, among other

things, engaging in deceptive trade practices. In opposition to

Respondents’ first motion for summary judgment, Petitioner failed

to provide any documentation that created a genuine issue of

material fact as to whether Moriyama had probable cause to file a

complaint. Therefore, the court did not err when it ruled in

favor of Respondents on the issue of whether Moriyama had

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probable cause to bring the original complaint against Petitioner

in the 2004 action.

D.

At the hearing on Respondents’ first motion for summary

judgment, the court also apparently ruled that there was no issue

of material fact that the prior proceedings were not initiated

with malice. During the hearing, it stated, “[t]he court does

not believe that there is a genuine issue of material fact as to

number 2 and number 3, initiated with probable cause and not

initiated with malice.” (Emphasis added.) Petitioner had argued

the element of malice in his Memorandum in Opposition to

Respondents’ first motion for summary judgment, and included an

affidavit from Keith A. Matsuoka (Matsuoka), Petitioner’s

attorney in the 2004 action, as an attachment to his Memorandum

in Opposition.

However, Petitioner alleged in a footnote in his brief

to the ICA that “[a]s the court offered no factual basis for its

determination that the underlying action was not initiated with

malice, for the purposes of the instant appeal, it is presumed

that its determination was based on its finding that the action

was initiated with probable cause.” Under Petitioner’s approach,

as alleged in this footnote, the court’s finding of a lack of

malice followed from its finding of probable cause. See, e.g.,

Gallucci v. Milavic, 100 So. 2d 375, 378 (Fla. 1958) (“Although

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malice may be inferred from want of probable cause, the converse

is not true.”) Accordingly, on appeal, Petitioner did not

challenge the court’s conclusion on summary judgment that

Petitioner did not make out the malice element as a matter of

law.

In any event, “‘unless plaintiff can produce some

affirmative evidence that malice existed,’” summary judgment in

favor of Moriyama was appropriate on that issue. Brodie, 2 Haw.

App. at 320, 631 P.2d at 603 (quoting 10 Wright & Miller, Federal

Practice and Procedure § 2730 (1973)). Malice is defined as

“[t]he intent, without justification or excuse, to commit a

wrongful act.” Black’s Law Dictionary 1042 (9th ed. 2009).

Thus, “[i]n order to establish the element of malice for a

malicious prosecution claim, a plaintiff must show inter alia

that the defendant initiated the prior proceeding with ‘the

intent, without justification or excuse, to commit a wrongful

act’ and the emphasis is on the misuse of criminal or civil

actions ‘as a means for causing harm.’” Isobe v. Sakatani, 127

Hawai#i 368, 388, 279 P.3d 33, 53 (App. 2012) (quoting Young, 119

Hawai#i at 419, 198 P.3d at 682) (brackets omitted)).

This court has acknowledged that “‘it is true that

malice is seldom the subject of a confession by the wrongdoer.

It usually must be proved by inferences from other evidence.’”

Cayetano, 111 Hawai#i at 483, 142 P.3d at 22 (quoting Myers v.

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Cohen, 67 Haw. 389, 397, 688 P.2d 1145, 1151 (1984)); see also

Brodie, 2 Haw. App. at 322, 631 P.2d at 605 (holding that an

inference of malice may be supported by direct or circumstantial

evidence). However, “‘[b]are allegations or factually

unsupported conclusions are insufficient to raise a genuine issue

of material fact, and therefore, insufficient to reverse a grant

of summary judgment.’” Id. (quoting Reed v. City & County of

Honolulu, 76 Hawai#i 219, 230, 873 P.2d 98, 109 (1994)). Rather,

a plaintiff must set forth some “independent evidence of conduct

other than a voluntary dismissal, from which [] improper motive

can be inferred.” Brodie, 2 Haw. App. at 320, 631 P.2d at 603.

Here, Respondents had probable cause to initiate the

suit. In support of their first motion for summary judgment,

Respondents point to a lack of evidence provided by Petitioner to

show malice on Moriyama’s part, stating that, for example, “[t]he

[Petitioner] does not dispute, . . . that [] Moriyama extended

professional courtesies to [Petitioner], pro se, after the OCP

action was initiated.” In response, Petitioner alleged that when

the action was initiated, Moriyama had “absolutely no information

showing that [Petitioner] was involved in or connected with any

of the annuities or securities which formed the bases for any of

the charges alleged against him,” and thus, a jury could infer

that Moriyama acted with malice. But, this allegation relates to

probable cause, and as established supra, Petitioner failed to

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provide any evidence to create a factual question as to whether

Moriyama acted with probable cause.

As noted, in opposition to Respondents’ first summary

judgment motion, Petitioner had included Matsuoka’s affidavit,17

in further support of his contention that Moriyama acted with

malice. The affidavit stated, inter alia, that
(26) Throughout the course of proceedings, []
Moriyama appeared to display a very personal animus
against [Petitioner].
(27) I believe this led [] Moriyama to disregard
or knowingly fail to assess and analyze the applicable
law in order to persecute [Petitioner] in violation of
his legal rights.
(28) This animus presented itself in various
ways, including his constant proclamations that
[Petitioner]’s actions were the most egregious.

17
The Matsuoka affidavit further states that, among other things,

(29) [] Moriyama also appeared to exercise an
unhealthy degree of influence and be over-involved in
the investigations and proceedings conducted by other
departments and agencies, including State v. Arquette,
Civil No. 04-1-1985; In re Hazel Cherry, FC-G No. 04-
1-0279; and In re Hazel Cherry, FC-AA No. 04-1-0008.
(30) Based on my interaction with these
departments and agencies, I concluded that [] Moriyama
was a major “source” of misinformation which formed
the basis for their claims.
(31) [] Moriyama also appeared to exert an
unhealthy degree of influence over the actions of the
Office of the Public Guardian and Maximum Legal
Service Corp., fiduciaries in various matters, which
led to procedural difficulties with little beneficial
effect except to block [Petitioner’s] access to
information necessary to defend himself.
(32) [] Moriyama’s conduct, which I would term
“unreasonable,” needlessly increased the cost of
litigation and ultimately required the trust estate of
Hazel Cherry to indemnify [Petitioner] for more than
$180,000 in fees and costs pursuant to an order
entered in In re Hazel Cherry, TR. No. 06-1-0013.

However, these allegations set forth with regard to Moriyama’s conduct in
other proceedings are irrelevant inasmuch as they do not allege any specific
facts upon which Matsuoka’s conclusions are based.

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However, this affidavit does not establish

“independent evidence” of malice sufficient to create a genuine

issue of material fact. In Cayetano, the plaintiff alleged that

the State of Hawai#i had maliciously prosecuted her on charges of

hindering prosecution and conspiracy. 111 Hawai#i at 482, 143

P.3d at 21. There was no dispute that the underlying proceedings

were terminated in the plaintiff’s favor, and “neither side

point[ed] to any evidence in the record as to whether the State

had probable cause to charge [the plaintiff].” Id. Thus, this

court addressed only whether the defendants’ motion for summary

judgment should be granted on the issue of malice. Id. at 482-

83, 143 P.3d at 21-22. Cayetano held that the defendants had met

their burden inasmuch as they pointed to records of cases arising

from the same underlying facts, in which the circuit court had

found that “there was no evidence to show that the indictment was

improperly motivated.” Id.

This court took judicial notice of that finding, and

noted that, “the burden shifted to [the plaintiff] to demonstrate

evidence of ‘specific facts’ to dispute or contradict [the

d]efendants’ evidence that there was no improper motive behind

the prosecution.” Id. The Cayetano court held that because the

plaintiff failed to adduce evidence of “specific facts” from

which malice could be inferred, but instead “relied on the

conclusory allegations of the complaint[,]” she failed to raise a

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genuine issue of material fact as to whether the prosecution was

initiated with malice. Id. Similarly, here, Petitioner has

relied primarily on conclusory allegations in contending that

Moriyama acted with malice.

Paragraph 26 of Matsuoka’s affidavit states that

“[t]hroughout the course of proceedings, [] Moriyama appeared to

display a very personal animus against [Petitioner].” Such a

claim must be supported by “specific facts,” because unsupported

conclusions are insufficient to raise a genuine issue of material

fact. With respect to Paragraph 26, Matsuoka provided his

opinion that Moriyama “appeared to display a very personal

animus” as a conclusion, without any discussion of supporting

facts. For example, Matsuoka did not allege when this personal

animus was displayed, under what circumstances, how the animus

was relayed, or any other facts regarding how he knew that

Moriyama had a personal animus toward Petitioner. Matsuoka’s

statement of opinion, at Paragraph 26, which does not include any

“specific facts,” therefore cannot serve as circumstantial

evidence from which to infer malice. See Cayetano, 111 Hawai#i

at 482, 143 P.3d at 21.

Matsuoka’s affidavit then states at Paragraph 27 that

“I believe this [animus] led [] Moriyama to disregard or

knowingly fail to assess and analyze the applicable law in order

to persecute [Petitioner] in violation of his legal rights.”

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Paragraph 27 cannot provide a basis for a finding of malice

inasmuch as it has been established that Petitioner did

reasonably “assess and analyze the applicable law,” because he

had probable cause to bring a claim against Petitioner under the

applicable law.18 Further, Matsuoka’s opinion again failed to

allege any “specific facts” that could form the basis of an

inference of malice. He did not state how Moriyama failed to

assess the applicable law, or refer to the law that Moriyama

misapplied. Therefore, Petitioner did not raise a genuine issue

of material fact that Moriyama was acting with “the intent,

without justification or excuse, to commit a wrongful act,”

Black’s Law Dictionary 1042, through “the misuse of a criminal or

civil action ‘as a means for causing harm.’” Isobe, 127 Hawai#i

at 388, 279 P.3d at 53. In the instant case, Matsuoka’s

“unsupported conclusion” does not create a genuine issue of

material fact. See Cayetano, 111 Hawai#i at 482, 143 P.3d at 21.

Paragraph 29 of Matsuoka’s affidavit states that

“[t]his animus presented itself in various ways, including his

constant proclamations that [Petitioner]’s actions were the most

18
As noted, under the standard for probable cause, one of the
elements is whether the plaintiff “correctly or reasonably believes that under
[the] facts, [his or her] claim may be valid under the applicable law[.]”
Brodie, 2 Haw. App. at 318, 631 P.2d at 602 (citation omitted). Since this
element of probable cause has been established in this case, as discussed
supra, Matsuoka’s allegation at Paragraph 27 that Moriyama disregarded or
knowingly failed to assess and analyze the applicable law cannot serve as a
basis for an inference of malice.

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egregious.” This statement does not provide specific facts in

support of Petitioner’s allegation of malice. The word

“egregious” is defined as “extremely or remarkably bad;

flagrant.” Black’s Law Dictionary 593. However, Matsuoka does

not refer to the circumstances under which these “proclamations”

were made, including the number of times they were made, or when

during the proceedings they were made, other than to say that

they were made “constantly,” and that Moriyama stated that

Petitioner’s actions “were the most egregious.” (Emphasis

added.) This indicates that Moriyama declared that the behavior

of all the defendants was to some extent “egregious.” That

declaration, by itself, even if made “constantly,” as alleged by

Matsuoka, does not demonstrate an intent on Moriyama’s part to

“caus[e] harm” to Petitioner “without justification or excuse,”

Black’s Law Dictionary 1042, through the initiation of the

lawsuit. Isobe, 127 Hawai#i at 388, 279 P.3d at 53. Without

specific facts regarding how these proclamations evinced a

particular desire to “cause harm” on Moriyama’s part, Paragraph

29 does not create a genuine issue of material fact with respect

to the issue of malice.

Thus, no specific facts were alleged to create a

genuine issue of material fact as to whether malice can be

inferred from Moriyama’s actions. Because Petitioner failed to

demonstrate “independent evidence” of malice in this case, the

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court properly granted summary judgment to Respondents on this

element of Petitioner’s malicious prosecution claim.

E.

Petitioner must establish all three elements of a

malicious prosecution claim in order to sustain his action. See

Myers, 67 Haw. at 391, 688 P.2d at 1148. There was no genuine

issue of material fact with respect to probable cause or malice.

Inasmuch as there was a reasonable basis for the OCP’s complaint

under the facts and no independent evidence of bias, see Brodie,

2 Haw. App. at 322, 631 P.2d at 605, the court correctly granted

summary judgment to Respondents as to probable cause and malice,

two of the three elements of a malicious prosecution suit. The

third prong of the test relating to termination of the 2004

action in favor of Petitioner thus need not be reached. The

court having been correct in granting summary judgment to

Respondents on the initiation of the suit, the ICA’s decision on

this question must be affirmed.

VI.

As set forth, supra, a cause of action for maintaining

a malicious prosecution should be recognized. However,

Petitioner in this case cannot make out a claim that Respondents

maintained a malicious prosecution against him when they

prosecuted the 2004 action. As noted before, the three elements

in a claim for maintaining a malicious prosecution are: (1) that

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the prior proceedings were terminated in the plaintiff’s favor,

(2) that the prior proceedings were maintained without probable

cause, and (3) that the prior proceedings were maintained with

malice. See, e.g., Zamos, 12 Cal. Rptr.3d at 54.

At the time Respondents filed their first motion for

summary judgment, the court held that the tort of malicious

prosecution extended only to the initiation of a claim. However,

with respect to Respondents’ second motion for summary judgment,

both parties provided arguments as to why Moriyama did or did not

maintain the prosecution with probable cause and without

malice.19

A.

In applying the elements discussed above, Respondents

had to establish that there was no genuine issue of material fact

as to whether Moriyama had probable cause to maintain the

prosecution after filing suit. In other words, when Moriyama

filed his last motion in the case, his Motion to Continue Trial

on April 11, 2006, he still had to have had probable cause

for the claims against Petitioner.

19
Respondents included a section in their second motion for summary
judgment titled “Probable Cause Existed For the Continuation of the Prior
Proceeding. At No Time During the Pendency Of The Prior Proceeding Did
[Respondent] Moriyama Act With Malice.” In his Memorandum in Opposition to
Respondents’ second motion for summary judgment, Petitioner argued that
“[t]here is substantial evidence showing that there is a genuine issue as to
whether there was probable cause for continuing the prosecution of
[Petitioner].” In their Reply Memorandum in connection with the second motion
for summary judgment, Respondents further asserted that “[t]he fact that some
elderly persons did not want to participate in the OCP proceeding does not
create a lack of probable cause that a violation of the law had occurred.”

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In support of their second motion for summary judgment,

Respondents stated that,
[T]hroughout the pendency of the OCP litigation, []
facts concerning who was in control of the
‘paralegals’ did not change. Moriyama and the OCP
investigators who continued to work on [the] OCP
investigation of [the] scheme only confirmed [Rodwin]
Wong’s pre-lawsuit admissions as to who was in control
of [the] scheme during the pendency of that OCP
lawsuit.

Respondents further pointed to Moriyama’s declaration in which he

recounted his interview with Rodwin Wong, who admitted that

“paralegals” who worked for him actually operated under the

direction of Dan Fox.

Petitioner contends in his Memorandum in Opposition to

Respondents’ second motion for summary judgment that OCP records

both failed to reveal any complaints about him by some of the

individual consumers Respondent identified, and confirmed that

Petitioner never discussed insurance products or the sale of

securities with them. Thus, Petitioner asserts, although

Respondents knew in February 2002 that Petitioner had “never

discussed or sold insurance products or securities to [James

Gamache or the Paakaulas], and without any complaints from or

about Petitioner by [the Arrudas or Pachecos],”20 Moriyama

20
In support of his Memorandum in Opposition to Respondents’ second
motion for summary judgment, Petitioner provided the same affidavit, dated
September 13, 2005, in which he states that he “did not sell, attempt to sell
and never even discussed the sale of securities [or insurance products] with
the Arrudas, [James Gamache, the Paakulas, or the Pachecos].” It also states
that, “[a]ll work I performed for the Law Offices of Rodwin Wong was at the
direction of and under the supervision and responsibility of [Rodwin Wong][,]
[Rodwin Wong] described my job as being a paralegal[,]” and “I was never privy
(continued...)

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continued to prosecute Petitioner.

Respondents’ probable cause, however, was not based

exclusively on complaints from specific consumers but, rather,

rested on the underlying investigation conducted by OCP, which

had found that Petitioner was part of an overall “scheme” to sell

long term annuities, and that as part of this scheme, Petitioner

had misrepresented himself to consumers through use of misleading

business cards and letterhead. As set forth supra, Respondents

had charged Petitioner with, inter alia, unfair and deceptive

trade practices pursuant to HRS § 481A-3, which includes “(3)

[c]aus[ing] likelihood of confusion or of misunderstanding as to

affilitation, connection, or association with, or certification

by another[,]” and “(12) [e]ngag[ing] in any conduct which

similarly creates a likelihood of confusion or of

misunderstanding.”

Under the standard for determining whether probable

cause existed, the first question is whether the plaintiff

subjectively believed in the facts underlying the claim.

Restatement (Second) of Torts § 675. Respondents attached

another declaration from Moriyama to their Memorandum in Support

of their second motion for summary judgment. He stated, in part,
[a]fter filing the lawsuit, information acquired by
OCP continued to confirm what the various

20
(...continued)
to the relationship between the Law Offices of Rodwin Wong, [Rodwin Wong],
[or] [Dan Fox].”

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investigations had earlier revealed concerning
[Petitioner’s] and other defendants’ conduct and
association with one another. As the litigation
progressed through discovery and continued
investigations, the information that I and other
persons at OCP obtained continued to substantiate the
allegations of OCP’s complaint.

(Emphases added.) This declaration indicates that throughout the

pendency of the proceedings, Moriyama continued to believe in the

facts underlying the suit.

Then, it must be determined whether Moriyama’s belief

in the facts underlying his continuation of the suit was

reasonable. On this point, Petitioner alleges in his September

19, 2005 affidavit that “[Respondents] knew that there was no

probable cause to prosecute Petitioner based on annuities sold to

and/or securities sold for the [Arrudas, James Gamache, the

Paakaulas, or the Pachecos], on October 10, 2005, and yet . . .

[] Moriyama continued his prosecution of [Petitioner]. . . .”

Id. However, Moriyama’s belief in the facts underlying the

initial complaint still was reasonable based on the information

he had regarding Petitioner’s involvement in the overall scheme,

including Petitioner’s employment by Rodwin Wong. Moriyama’s

second declaration also stated that after the lawsuit was filed,

additional consumers who dealt with Petitioner “complained to, or

were referred to, OCP[,]” including the Cherrys,21 James Ah Nee,

and Blanche Schwarz. Thus, Moriyama’s belief in the existence of

21
Although, as noted, summary judgment was later granted to
Petitioner with respect to claims arising from his interactions with the
Cherrys, it was granted on the basis of res judicata.

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facts indicating that Petitioner was part of the scheme to sell

long term annuities to elderly consumers, was objectively

reasonable.22

Finally, in order to have probable cause, Moriyama must

have continued during the pendency of the suit to “correctly or

reasonably” believe that under the facts at the time, the claim

against Petitioner might be “valid under the applicable law.”

Restatement (Second) of Torts § 675. As discussed, Respondents

had alleged that Petitioner violated, inter alia, HRS § 481A-3,

by engaging in deceptive trade practices. HRS § 481A-3 states

that “[a] person engages in deceptive trade practices when, in

the course of the person’s business, vocation, or occupation, the

person: . . . . (3) [c]auses likelihood of confusion or

22
Based on the similarity of their elements, as discussed supra, the
standard for determining whether a plaintiff had probable cause for
maintaining a lawsuit should be coterminous with that of initiating a lawsuit.
As set forth by the Restatement (Second) of Torts § 675:

One who takes an active part in the initiation,
continuation or procurement of civil proceedings
against another has probable cause for doing so if he
reasonably believes in the existence of the facts upon
which the claim is based, and either

(a) correctly or reasonably believes that
under those facts the claim may be valid
under the applicable law, or

(b) believes to this effect in reliance
upon the advice of counsel, sought in good
faith and given after full disclosure of
all relevant facts within his knowledge
and information.

(Emphases added.) See also Brodie, 2 Haw. App. at 319, 631 P.2d at 602
(discussing the standard above as applied to the initiation of a lawsuit).

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misunderstanding as to affiliation, connection, or association

with, or certification by, another . . . . or (12) [e]ngages in

any other conduct which similarly creates a likelihood of

confusion or of misunderstanding.” Moriyama’s belief that

Petitioner had misrepresented himself to consumers, through his

alleged use of false contact information on his business cards

and letterhead, could reasonably have led Moriyama to believe

that a claim against Petitioner for violations of subsections (3)

and (12) of HRS § 481A-3, among other things, might be valid

under the applicable law. See Restatement (Second) of Torts §

675. Thus, Moriyama’s continuing prosecution of Petitioner

satisfies the element of probable cause as discussed in Brodie

and the Restatement (Second) of Torts § 675. Summary judgment in

favor of Respondents on this issue then was appropriate.

B.

As discussed supra with regard to Petitioner’s claim

that Moriyama maliciously initiated the prosecution against

Petitioner, Petitioner must produce “independent evidence” of

malice. Young, 119 Hawai#i at 419, 198 P.3d at 682. Petitioner

states that it is “well established” that “‘[m]alice . . . may be

inferred . . . from want of probable cause.’” (Quoting Stewart

v. Sonneborn, 98 U.S. 187, 194 (1878).) However, under Hawai#i

case law, the evidence suggesting lack of probable cause must

itself support an inference of malice, and if it does not support

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that inference, then Petitioner must have “independent evidence”

of that malice. Brodie, 2 Haw. App. at 322, 631 P.2d at 605. In

Brodie, for example, the ICA held that “where the only evidence

of a want of probable cause is the inference that may be drawn

from the voluntary dismissal of the original action,” a finding

that there is no probable cause “will not support the second

inference, that the defendant acted with improper motives. There

must be some other direct or circumstantial evidence to support

the inference of malice.” Id. Here, where Moriyama had probable

cause to initiate the prosecution, malice cannot be inferred.

In any event, Petitioner does not allege any

“independent evidence” to support an inference that Moriyama

acted with malice in maintaining the prosecution. Petitioner’s

only argument is that Moriyama continued the prosecution despite

knowing that there was no probable cause for any of the charges

as alleged. On the other hand, Respondents point to Moriyama’s

declaration as evincing his lack of malice during the pendency of

the 2004 proceeding. Specifically, as noted before, they allege

that Moriyama granted several extensions to Petitioner personally

to allow him more time to respond to the original OCP complaint.

Petitioner provided the same evidence and affidavits with regard

to malice as was attached to his Memorandum in Opposition to

Respondents’ first motion for summary judgment, including the

Matsuoka affidavit. As discussed, the allegations set forth in

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Matsuoka’s affidavit do not create a genuine issue of material

fact as to whether malice can be inferred on the part of Moriyama

in filing the complaint. Similarly, the allegations do not

create a genuine issue of material fact as to whether Moriyama

acted with malice in continuing the prosecution.

Therefore, Petitioner cannot support his allegation

that Moriyama acted with malice with any independent evidence in

the form of specific facts from which malice can be inferred.

See Cayetano, 11 Hawai#i at 483, 143 P.3d at 22. Thus summary

judgment must be granted in favor of Respondents on the issue of

malice. Inasmuch as all three elements must be satisfied to

sustain an action for maintaining a malicious prosecution, the

third element of successful termination of the prior proceeding

in Petitioner’s favor need not be reached.

VII.

Petitioner’s third question, whether HRS § 487-1 is

relevant in determining the standard of care for his negligence

action,23 is preserved on appeal. The ICA interpreted his

argument as asserting that HRS § 487-1 created a private right of

action and resolved that issue in the negative. Although

Respondents contend that Petitioner changed his argument on

appeal, and argued for the first time that HRS § 487-1 is

23
As noted, in his complaint in the instant case, Petitioner alleged
that Moriyama’s “failure to sufficiently investigate” the claims against
Petitioner was negligent.

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relevant to the standard of care in a negligence action,24 the

record supports Petitioner’s contention that he argued both

issues before the court below. Petitioner contended both that

HRS § 487-1 set forth a private right of action25 and, in the

alternative, that HRS § 487-1 was informative as to Respondents’

duty of care for Petitioner’s negligence claim.26 Petitioner

argues (1) that under Lee v. Corregedore, 83 Hawai#i 154, 173,

925 P.2d 324, 343 (1996), a court may “adopt the requirements of

a statute as the standard of conduct necessary to avoid liability

for negligence,” and (2) that pursuant to Tseu ex rel. Hobbs v.

Jeyte, 88 Hawai#i 85, 962 P.2d 349 (1998), “HRS § 487-1 is

indicative of a duty of care.” However, neither case

demonstrates that HRS § 487-1 creates or is “indicative of” a

duty of care.

24
“As a general rule, if a party does not raise an argument at
trial, that argument will be deemed to have been waived on appeal; this rule
applies in both criminal and civil cases.” State v. Moses, 102 Hawai#i 449,
456, 77 P.3d 940, 947 (2003); see e.g., State v. Ildefonso, 72 Haw. 573, 584,
827 P.2d 648, 655 (1992) (“Our review of the record reveals that [the
defendant] did not raise this argument at trial, and thus it is deemed to have
been waived.”).

25
Since Petitioner did not present this issue in his Application, we
do not address whether or not HRS § 487-1 sets forth a private cause of
action. See Arquette, 2012 WL 2864352 at *3.

26
In his Memorandum in Opposition to Respondents’ first motion for
summary judgment, Petitioner stated that “[HRS § 487-1] imposes a duty of care
on [Respondents] to exercise their statutory duties with due regard to
[Petitioner’s] legitimate business activities. See Corregedore, 83 Hawai#i at
172, 925 P.2d at 342 (Duty in a negligence action may be defined by common law
or by statute[.]).” Petitioner further asserted that, “‘[i]f a statute
[]contains no express provision that its violation shall result in tort
liability, and no implication to that effect, the court may, and in certain
types of cases customarily will, adopt the requirements of the enactment as
the standard of conduct necessary to avoid liability for negligence.’”
(Quoting Restatement (Second) of Torts § 285 comment c (1965).)

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A.

Pursuant to Corregedore, a duty of care may be

established by statute if a “legislative enactment [] lays down

requirements of conduct, and provides expressly or by implication

that a violation shall entail civil liability in tort.” 83

Hawai#i at 172, 925 P.2d at 342. However, HRS § 487-1 cannot be

construed to “lay[] down requirements of conduct[.]” Id. The

statute creates “a permanent office of consumer protection” for

the purpose of coordinating “the services offered to the

consumer,” and “aiding the development” of various programs. HRS

§ 487-1. The statute does not obligate government officials to

act in a certain manner or in accordance with any particular

standard or proscribe any conduct. In sum, the statute does not

“lay[] down requirements of conduct.” Corregedore, 83 Hawai#i at

172, 925 P.2d at 342.

Further, Petitioner conceded in its Answering Brief

before the ICA that the statute “contains no express provision

that its violation shall result in tort liability, and no

implication to that effect.” Because Corregedore requires that

the statute “provide[] expressly or by implication that a

violation shall entail civil liability in tort,” id., Corregedore

does not apply to HRS § 487-1.

B.

Also, Jeyte does not indicate that HRS § 487-1 is

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“indicative of a standard of care.” In Jeyte, this court held

that the plaintiff could pursue “a common law tort action for

negligence” when the Hawai#i Civil Rights Commission (HCRC)

negligently investigated a complaint against the plaintiff. 88

Hawai#i at 91, 962 P.2d at 350. Jetye reasoned that “the HCRC is

subject to a duty to follow its own administrative rules,” and

noted that the HCRC had failed to follow a rule which required it

to recognize an affirmative defense to what would otherwise be a

discriminatory practice. Id. Jeyte then held that “there exists

a duty of reasonable care in the exercise of a statutorily

granted authority.” Id. at 92, 962 P.2d at 351.

On reconsideration, however, this court clarified

Jeyte’s scope. According to this court, the HCRC misapprehended

the opinion, because “as stated on multiple occasions in the

opinion,” the “cause of action which may exist against the HCRC

is based on a duty to follow its own administrative regulations.”

Id. at 93, 962 P.2d at 352 (emphasis added). Here, Petitioner

makes no argument that Respondents ignored or violated applicable

regulations. Moreover, HRS § 487-1 states the purpose behind the

creation of an office of consumer protection, but does not

provide any standard governing conduct or any provision which

prescribes a duty. Consequently, under these facts, Jeyte is not

“indicative of a standard of care.”

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VIII.

With respect to Petitioner’s fourth question,

Respondents asked that Petitioner pay for the costs of mediation

by Dispute Prevention Resolution,27 for the deposition

transcripts and records of Dr. Claudine Kimura, Petitioner,

Moriyama, and Dr. L. Martin Johnson, and for the transcript of

the first summary judgment hearing. On July 13, 2010, Petitioner

objected to the taxation of these costs, arguing that mediation

was not a cost explicitly set forth by statute and that the

depositions were not necessary for Respondents’ case.

Respondents replied that the costs were “reasonable on their face

and were necessarily incurred . . . .” The court allowed

Respondents the costs of obtaining the deposition transcript of

Moriyama and the transcript of the first summary judgment

proceedings, but held that Petitioner was not required to pay for

the costs of mediation, or of the other deposition transcripts.

A.

Pursuant to HRS § 607-9,28 “[n]o other costs of court

27
According to the declaration of Lawrence I. Kawasaki, mediation
was conducted on February 2, 2009, with Keith Hunter of Dispute Prevention and
Resolution, Inc.

28
HRS § 607-9 provides:

No other costs of court shall be charged in any
court in addition to those prescribed in this chapter
in any suit, action, or other proceeding, except as
otherwise provided by law.

All actual disbursements, including but not
(continued...)

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shall be charged in any court in addition to those prescribed in

this chapter.” However,
[a]ll actual disbursements, including but not limited
to, intrastate travel expenses for witnesses and
counsel, expenses for deposition transcript originals
and copies, and other incidental expenses, including
copying costs, intrastate long distance telephone
charges, and postage, sworn to by an attorney or a
party, and deemed reasonable by the court, may be
allowed in taxation of costs. In determining whether
and what costs should be taxed, the court may consider
the equities of the situation.

HRS § 607-9. Both parties agree that under HRS § 607-9, “the

court may not deny costs to the prevailing party without

justification, unless the circumstances justifying the denial of

costs are plain from the record.” Takeuchi, 88 Hawai#i at 52,

961 P.2d at 617; see also HRCP Rule 54(d) (“[C]osts shall be

allowed as a matter of course to the prevailing party unless the

court otherwise directs.”). Further, both parties agree that the

court did not expressly justify its denial of costs in the

present case.

B.

Petitioner contends that the reasons supporting the

court’s denial of costs “are evident from the record as

28
(...continued)
limited to, intrastate travel expenses for witnesses
and counsel, expenses for deposition transcript
originals and copies, and other incidental expenses,
including copying costs, intrastate long distance
telephone charges, and postage, sworn to by an
attorney or a party, and deemed reasonable by the
court, may be allowed in taxation of costs. In
determining whether and what costs should be taxed,
the court may consider the equities of the situation.

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[Respondents’] malicious prosecution of [Petitioner] compelled

him to defend himself in a substantive amount of litigation which

spanned two years.” Sheets v. Yamaha Motors Corp., U.S.A., 891

F.2d 533 (5th Cir. 1990), is instructive in this regard.29

Sheets held that the trial court’s reason for the denial of costs

was “apparent from the record,” because the court was “forced to

endure defendants’ repeated and abusive hardball tactics” such as

violating discovery orders, misleading the plaintiff, and

utilizing “obfuscatory defense strategies.” Id. at 539. Under

these “egregious circumstances,” Sheets held that the failure to

set forth reasons was not an abuse of discretion. Id. at 540.

Here, the record does not evince circumstances that would make

the reasons for the court’s denial of costs “plain from the

record,” such as in the manner exemplified in Sheets.

C.

Respondents argue that the costs of mediation and the

depositions should have been awarded to Respondents as a matter

of law. They cite Pulawa, 112 Hawai#i at 19-22, 143 P.3d at

1221-24, for the proposition that “in the absence of evidence of

misconduct or some fault on the part of the prevailing party

29
“This court has previously noted that Federal Rules of Civil
Procedure Rule 54(d) is functionally identical to HRCP Rule 54(d). Where a
Hawai#i rule of civil procedure is identical to the federal rule, the
interpretation of this rule by federal courts is highly persuasive.” Pulawa,
112 Hawai#i at 19 n.15, 143 P.3d at 1221 n.15 (citing federal authority to
determine whether various costs should be assessed to the losing parties).

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. . . the trial court does not have any discretion to reduce or

deny an award of costs.”

In Pulawa, the losing parties argued that, because they

demonstrated that they were indigent, the circuit court abused

its discretion in requiring them to pay costs. Id. at 19, 143

P.3d at 1221. A majority of this court said there is “a strong

presumption that the prevailing party will recover costs,” which

can only be overcome by “some showing [by the losing party] that

an award would be inequitable under the circumstances.” Id.

Pulawa held that the losing parties had not provided enough

evidence to demonstrate that the denial of costs was an abuse of

discretion.30 Id. at 20-22, 143 P.3d at 1222-24. Pulawa thus

does not stand for the broad proposition that evidence is always

necessary to justify a denial of costs.31

30
The dissent in Pulawa argued that the losing parties’ failure to
list their assets was not dispositive, and that in any event the case should
be remanded to allow the losing parties to present the necessary evidence. 112
Hawai#i at 28, 143 P.3d at 1230 (Acoba, J., concurring and dissenting).

31
Numerous Hawai#i cases acknowledge that a losing party may justify
a denial of costs without submitting evidence. See, e.g., Takeuchi, 88
Hawai#i at 54, 961 P.2d at 619 (noting that office supplies are not generally
taxable costs, and therefore the prevailing party was required to demonstrate
a “compelling rationale” in order for the court to grant this expense) (citing
Tradewinds Hotel Inc. v. Cochran, 8 Haw. App. 256, 271, 799 P.2d 60, 68,
reconsideration denied, 8 Haw. App. 662, 868 P.2d 466 (1990); Harkins v.
Ikeda, 57 Haw. 378, 386, 557 P.2d 788, 794 (1976) (denying costs without an
evidentiary showing because out of state traveling expenses were not
explicitly mentioned by statute); Geldert v. State, 3 Haw. App. 259, 268, 649
P.2d 1165, 1172 (1982) (holding that deposition costs are not awarded unless
the deposition was reasonably necessary for trial); but see Abreu v. Raymond,
56 Haw. 613, 614, 546 P.2d 1013, 1014 (1976) (“[T]he denial of costs to the
prevailing party or the assessment of partial costs against him is in the
nature of a penalty for some defection on his part in the course of the
litigation.”).

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Instead, this court has held that “the losing party

bears the burden of showing that the denial of costs is

justified.” Takeuchi, 88 Hawai#i at 53, 961 P.2d at 618.

Justification, however, does not necessarily require an

evidentiary showing. A party may set forth reasons that a

certain expense item should be denied without making an

evidentiary showing on that issue. See 10 Moore’s Federal

Practice §54.101(b) (3d ed. 1998) (listing reasons for declining

to tax costs that do not require an evidentiary showing, such as

costs incurred unreasonably).

D.

The costs associated with mediation are not explicitly

listed in HRS § 607-9 as taxable. It has been held that a court

has discretion to assess the costs of mediation to the losing

party if the mediation was court-ordered. See, e.g., Gibson v.

Bobroff, 57 Cal. Rptr. 2d 235, 240 (Cal. Ct. App. 1996)

(“Accordingly, we reject defendants’ view that only those costs

directly related to the preparation or the trial of a case are

recoverable as being reasonably necessary to the conduct of the

litigation. This is especially true here since the mediation was

court-ordered.”); Spears v. Huber, No. 07-11-0193-CV, 2012 WL

933780, at *4 (Tex. App. March 20, 2012) (“As for the mediator's

fee, when a mediator is appointed by the court, it may set a

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reasonable fee for the services of the mediator and tax the fee

as costs of suit.”); Albuquerque Commons P’ship v. City Council

of Albuquerque, 212 P.3d 1122, 1141 (N.M. App. 2009), reversed on

other grounds, 248 P.3d 856 (N.M. 2011) (holding that it was

within the trial court’s discretion to tax the costs of mediation

because the mediation was court ordered and the losing party did

not participate in good faith); Elder v. Islam, 869 So. 2d. 600,

603 (Fla. App. 2004) (“[T]he costs of mediation can be awarded if

the parties are required to mediate under a statute or court

rule.”).

Costs generated in the pursuit of litigation are

distinguished from those “severable from and unrelated to the

litigation.” See Takeuchi, 88 Hawai#i at 54-55, 961 P.2d at 619-

20 (holding that “[m]eals are not taxable costs” because “the

necessity of eating lunch is severable from and unrelated to the

litigation”). When a court orders the parties to enter

mediation, they have no choice but to obey. In such

circumstances, the costs of entering court-ordered mediation are

related to and cannot be “sever[ed] from” the underlying

litigation. Takeuchi, 88 Hawai#i at 55, 961 P.2d at 620; see

Gibson, 49 Cal. App. 4th at 1209 (noting that court-ordered

mediation “is a necessary part of litigation”); see also Elder,

869 So. 2d. at 603 (awarding the costs of court-ordered mediation

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because the parties “had to expend that”). Hence, it would be

within the court’s discretion to decide that the cost of court-

ordered mediation is a “reasonable” cost that may be taxed. HRS

§ 607-9.

On the other hand, when the parties voluntarily enter

into mediation, it has been concluded that the losing party

cannot be assessed the costs of mediation absent a compelling

demonstration by the prevailing party. Smith v. Village of

Ruidoso, 994 P.2d 50, 60 (N.M. App. 1999) (“We do not think that,

with respect to mediations conducted pursuant to an agreement of

the parties, the expense of the mediator’s fee should be a

recoverable cost.”); see also Orlando Reg’l Med. Ctr., Inc., v.

Chmielewski, 573 So. 2d. 876, 883 (Fla. App. 1990), abrogated on

other grounds by Boulis v. Florida Dep’t of Transp., 733 So. 2d

959 (Fla. 1999) (“Although reasonable costs and expenses for a

statutorily required mediation procedure are available,

appellants failed to establish that they were required to submit

to mediation in this case under any statute or court rule.”); cf.

Gibson, 49 Cal. App. 4th at 1209 n.7 (“We expressly do not decide

whether a party prevailing after a trial which is preceded by

unsuccessful voluntary mediation would be entitled to such

costs.”) (emphasis in original); but see Liker v. Found. for

Preservation of Mt. Helix Nature Theater, No. Do41091, 2004 WL

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1405937, at *6, *8 (Cal. App. June 24, 2004) (“The trial court

had discretion to award the Likers their costs of voluntary

mediation.”).32

Mediation “facilitate[s] the effective, timely and

voluntary resolution of disputes.” Cf. HRS § 613-2 (Supp. 2000)

(establishing a center for alternative dispute resolution). In

other words, the goal of mediation is to avoid trial, and its

attendant costs, altogether. A cost incurred by the parties’

joint decision to attempt to avoid trial would appear to be a

cost separate from the underlying litigation, as it represents a

shared attempt to avoid the costs of trial. Moreover, because

litigants may voluntarily enter into mediation for their mutual

benefit, assessing the losing party the entire cost of mediation

would appear inequitable. Consequently, unlike court-ordered

mediation, a voluntary decision to enter mediation is “severable

from and unrelated to the litigation,” see Takeuchi, 88 Hawai#i

at 54-55, 961 P.2d at 619-20, inasmuch as under such

circumstances voluntary mediation is not a necessity of

litigation.

32
Liker reasoned that awarding the costs of voluntary mediation may
encourage parties to enter mediation, because they may believe that the other
side will be compelled to bear their costs. 2004 WL 1405937, at *8 . Liker’s
assumption is unrealistic –- it is more likely that parties will voluntarily
enter mediation when, based on the circumstances of a specific case, they
believe that there is a reasonable chance of successfully avoiding the
expenses associated with trial. In any event, the relevant inquiry under
Hawai#i law is whether an expense is “severable from and unrelated to the
underlying litigation.” Takeuchi, 88 Hawai#i at 54-55, 961 P.2d at 619-20.

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Based on the foregoing, generally, the costs of

voluntary mediation should not be taxable. In that light, the

prevailing party must provide a compelling reason for the court

to assess the cost of voluntary mediation to the losing party.

Cf. id. at 54, 961 P.2d at 619 (“As a general rule, routine

expenses related to operating a law firm are not taxable.

Therefore, [the prevailing party] would have to demonstrate a

compelling rationale for the court to grant this expense.”).

As discussed supra, it was error for the court to

decline to assess the costs of mediation without providing

reasons. Id. at 52, 961 P.2d at 617 (“[T]he court may not deny

costs to the prevailing party without justification, unless the

circumstances justifying the denial of costs are plain from the

record.”). Hence, the court’s decision not to assess Petitioner

the costs of mediation must be remanded so that the court may set

forth the reasons for its decision.

E.

It is well-settled that “deposition costs are only

recoverable if the depositions were necessarily obtained for use

in the trial.” Tradewinds Hotel, 8 Haw. App. at 271, 799 P.2d at

69; see also Nani Koolau Co. v. K & M Constr., Inc., 5 Haw. App.

137, 143, 681 P.2d 580, 586 (1984) (same); Geldert, 3 Haw. App.

at 268, 649 P.2d at 1172 (same); 10 Moore’s Federal Practice §

54.101(b) (court may decline to tax costs if costs incurred

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unreasonably). The court in this case may decline to assess the

costs of the depositions against Petitioner if it found that the

depositions were not necessarily obtained for use at trial, or

that to do so would be inequitable.

Although refusing to tax such costs was within the

court’s discretion, again, as discussed supra, it was error for

the court to do so without providing reasons. Takeuchi, 88

Hawai#i at 52, 961 P.2d at 617. Consequently, this issue also

must be remanded to allow the court to set forth the reasons for

not assessing Petitioner the deposition costs of Dr. Claudine

Kimura, Petitioner, and Dr. L. Martin Johnson.

IX.

Finally, with respect to Petitioner’s fifth question,

the ICA properly denied Petitioner’s Motion for Recusal.

Disqualification or recusal cases involve a two-part analysis.

State v. Ross, 89 Hawai#i 371, 377, 974 P.2d 11, 17 (1998)

(citing State v. Brown, 70 Haw. 459, 467, 776 P.2d 1182, 1187

(1989)). First, “HRS § 601-7[33] [(Supp. 2004)] is applied to

33
To reiterate, HRS § 601-7 provides, in relevant part:

§ 601-7. Disqualification of judge; relationship,
pecuniary interest, previous judgment, bias or
prejudice.
(b) Whenever a party to any suit, action, or
proceeding, civil or criminal, makes and files an
affidavit that the judge before whom the action or
proceeding is to be tried or heard has a personal bias
or prejudice either against the party or in favor of
any opposite party to the suit, the judge shall be
disqualified from proceeding therein. Every such
(continued...)

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determine whether the alleged bias is covered by any of the

specific instances prohibited therein.” Id. Then, “[i]f the

alleged bias falls outside of the provisions of HRS § 601-7, the

court may [] turn, if appropriate, to the notions of due process

described in Brown in conducting the broader inquiry of whether

‘circumstances . . . fairly give rise to an appearance of

impropriety and . . . reasonably cast suspicion on the judge’s

impartiality.’” Id. (quoting Brown, 70 Haw. at 467 n.3, 776 P.2d

at 1188 n.3) (ellipses in original) (brackets omitted). The

decision by the ICA to deny Petitioner’s Motion for Recusal thus

is reviewed for abuse of discretion. As this court noted in

Ross, “[d]ecisions on recusal or disqualification present perhaps

the ultimate test of judicial discretion and should thus lie

undisturbed absent a showing of abuse of discretion.” Id. at

375, 974 P.2d at 15.

33
(...continued)
affidavit shall state the facts and the reasons for
the belief that bias or prejudice exists and shall be
filed before the trial or hearing of the action or
proceeding, or good cause shall be shown for the
failure to file it within such time. No party shall
be entitled in any case to file more than one
affidavit; and no affidavit shall be filed unless
accompanied by a certificate of counsel of record that
the affidavit is made in good faith. Any judge may
disqualify oneself by filing with the clerk of the
court of which the judge is a judge a certificate that
the judge deems oneself unable for any reason to
preside with absolute impartiality in the pending suit
or action.

(Emphases added.)

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A.

HRS § 601-7(b) sets forth the procedure for seeking

disqualification based on personal bias. The statute requires

the movant to timely file an affidavit “stat[ing] the facts and

reasons for the belief that bias or prejudice exists.” Id.

Furthermore, in considering whether the facts allege

disqualification pursuant to HRS § 601-7,
a judge whose disqualification is sought must take the
facts alleged as true, but can pass upon whether they
are legally sufficient.” State v. Mata, 71 Haw. 319,
325, 789 P.2d 1122, 1126 (1990). When the affidavit
to disqualify refers to matters of record, however, we
may consider the entire record in making our
determination. Schutter v. Soong, 76 Hawai#i 187,
205, 873 P.2d 66, 84 (1994) (citing Peters v.
Jamieson, 48 Haw. 247, 257, 397 P.2d 575, 582 (1964)).
“The reasons and facts for the belief the [affiant]
entertains . . . must give fair support to the charge
of a bent of mind that may prevent or impede
impartiality of judgment.” Whittemore v. Farrington,
41 Haw. 52, 57 ([Terr.] 1955) (citation omitted). The
test assumes the viewpoint of a reasonable onlooker,
rather than the subjective belief of the judge. See
Yorita v. Okumoto, 3 Haw. App. 148, 153, 643 P.2d 820,
825 (1982).

Ross, 89 Hawai#i at 377, 974 P.2d at 18.

Bias cannot be premised on adverse rulings alone. Id.

at 378, 974 P.2d at 18 (citing Peters, 48 Haw. at 257, 397 P.2d

at 583). In Schutter, this court ruled that “[w]here the record

reflects ‘marked personal feelings . . . on both sides’

inflicting lingering ‘personal stings’ on the judge (i.e., where

the case conveys an apparent ‘flavor of animosity on the part of

the judge against counsel,’ . . . such that the citing judge

manifestly loses his or her capacity to ‘perform judicial duties

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without bias or prejudice,’)[,] the judge should not preside.”

76 Hawai#i at 205, 873 P.2d at 84 (ellipses in original) (quoting

Evans v. Takao, 74 Haw. 267, 291-92, 842 P.2d 255, 266 (1992)).

In the instant case, the record reflects no animosity

by Judge Leonard against Petitioner, and instead, the motion to

disqualify is based solely on a declaration by Petitioner's

attorney.34 As discussed, the test is whether a reasonable

onlooker would find that the facts, here, as alleged in the

declaration, are legally sufficient to disqualify the judge.

Yorita, 3 Haw. App. at 153, 643 P.2d at 825.

In Jou v. Schmidt, 117 Hawai#i 477, 184 P.3d 792 (App.

2008), the ICA considered whether Hawai#i Supreme Court Associate

Justice Sabrina S. McKenna, then a judge on the Circuit Court of

the First Circuit, was required to recuse herself from a

proceeding in which one of the parties had a seat on the judicial

selection committee. The ICA, affirming the denial of the motion

for recusal, held that movant’s declaration “failed to include

34
In support of his Motion for Recusal filed pursuant to Hawai#i
Rules of Appellate Procedure Rule 27, Petitioner included the following
declaration from his attorney:

2. I publicly opposed the nomination of Associate Judge
Katherine Leonard of the [ICA] to serve as Chief Justice
of the Hawai#i Supreme Court.
3. Judge Leonard has recently been assigned to
the above-captioned case as a substitute judge.
4. I am concerned about the appearance and
potential for partiality raised by having Judge Leonard
participate in a case in which I am lead counsel so soon
after the controversy involving her nomination.

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any specific facts regarding Judge McKenna’s retention or

petition for retention. Therefore, the sweeping inference that

Judge McKenna is, ipso facto, biased or prejudiced . . . is

speculative at best.” Id. at 484, 184 P.3d at 799. In this

case, Petitioner also does not set forth specific facts in the

declaration, beyond speculation that there is the “potential for

partiality,” as to how Judge Leonard would be biased or

prejudiced against Petitioner. Thus, even taking the facts

alleged as true, there is no legal showing that Judge Leonard

would have a personal bias in this case, under HRS § 601-7.

B.

In reviewing disqualification actions, a court next

considers “whether ‘circumstances . . . fairly give rise to an

appearance of impropriety and . . . reasonably cast suspicion on

[the judge’s] impartiality.’” Chen v. Hoeflinger, 127 Hawai#i

346, 362, 279 P.3d 11, 27 (App. 2012) (quoting Ross, 89 Hawai#i

at 377, 974 P.2d at 17) (brackets and ellipses in original)

(other citation omitted). When the ICA considered this issue in

Jou, it held that, although the record was silent on whether any

commissioner removed herself or himself from Judge McKenna's

retention petition, the movant “failed to overcome the

presumption that [the commission] acted in accordance with its

rules and otherwise failed to establish disqualifying facts in

this case.” Jou, 117 Hawai#i at 484, 184 P.3d at 799.

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Similarly, under the circumstances of this case, Petitioner did

not establish any disqualifying facts that would reasonably cast

suspicion on Judge Leonard’s impartiality.

In Chen, the ICA reviewed a family court decision in

which one of the attorneys had been appointed a per diem family

court judge after the trial concluded, but before the court

issued a decision. 127 Hawai#i at 362, 279 P.3d at 27. The ICA

held that the presiding judge did not abuse his discretion in

denying the motion for his disqualification. Id. The ICA noted

that the speculative “personal relationship” between the

presiding family court judge and an attorney who had been

recently appointed as a family court judge “did not give rise to

the probability of unfairness or the temptation for the judge to

forget the applicable burden of proof.” Id. (citing Ross, 89

Hawai#i at 379, 974 P.2d at 19). Similarly, in the instant case,

the involvement of Petitioner’s attorney in Judge Leonard’s

nomination process, giving rise to the “appearance and potential

for partiality” on the part of Judge Leonard was speculative. No

specific facts were alleged that would “give rise to the

probability of unfairness or the temptation for the judge to

forget the applicable burden of proof.” Id. Thus, the ICA did

not abuse its discretion in holding that the facts as alleged

were not sufficient to warrant Judge Leonard’s recusal.

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X.

We affirm the ICA’s August 10, 2012 judgment and the

ICA’s December 6, 2011 order denying Petitioner’s Motion for

Recusal, but for the reasons stated herein. Further, for the

reasons stated herein, we affirm the court’s April 19, 2011

Amended Final Judgment with respect to its March 29, 2010 and

June 30, 2010 orders granting summary judgment, and vacate the

court’s April 19, 2011 Amended Final Judgment with respect to its

August 23, 2010 Order Granting Plaintiff’s Motion for Review of

Costs and remand the Order.

Eric A. Seitz, /s/ Paula A. Nakayama
Della Au Bellati,
Ronald N.W. Kim, /s/ Simeon R. Acoba, Jr.
for petitioner
/s/ Sabrina S. McKenna
Dennis K. Ferm,
Caron M. Inagaki, /s/ Richard W. Pollack
for respondent
/s/ Virginia L. Crandall

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