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Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
31-JAN-2024
07:56 AM
Dkt. 123 MO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI#I
LEE PUTNAM, Plaintiff-Appellee/Cross-Appellant, v.
JILL N. NUNOKAWA, Defendant-Appellant-Cross-Appellee,
and
JOHN DOES 1-10; JANE DOES 1-10; DOE PARTNERSHIPS 1-10;
DOE CORPORATIONS 1-10; DOE ENTITIES 1-10; AND DOE
GOVERNMENTAL UNITS 1-10, Defendants
APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
(CIVIL NO. 15-1-1302-07)
MEMORANDUM OPINION
(By: Leonard, Acting Chief Judge, and Wadsworth and Guidry, JJ.)
This appeal arises out of a dispute concerning loans
made by Plaintiff-Appellee/Cross-Appellant Lee Putnam (Putnam) to
Defendant-Appellant/Cross-Appellee Jill N. Nunokawa (Nunokawa).
Nunokawa appeals and Putnam cross-appeals from the Final Judgment
(Judgment), entered in favor of Putnam and against Nunokawa on
October 5, 2018, by the Circuit Court of the First Circuit.1/ As
part of her appeal, Nunokawa also challenges the Circuit Court's:
(1) June 27, 2018 "Findings of Fact, Conclusions of Law, and
Order" (FOFs/COLs/Order); (2) August 31, 2018 "Order Granting in
Part and Denying in Part '. . . Putnam's Motion for an Award of
Attorneys' Fees and Costs' Filed on July 18, 2018" (Putnam Fee
Order); and (3) August 31, 2018 "Order Granting in Part and
Denying in Part '. . . Nunokawa's Motion for an Award of
Attorneys' Fees and Costs' Filed on July 20, 2018" (Nunokawa Fee
1/
The Honorable Gary W.B. Chang presided.
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Order). As part of her cross-appeal, Putnam also challenges the
Circuit Court's: (1) June 9, 2017 "Order Granting in Part and
Denying in Part . . . Nunokawa's Motion for Summary Judgment,
Filed on April 10, 2017" (Partial Summary Judgment Order); (2)
Putnam Fee Order; and (3) Nunokawa Fee Order.
For the reasons explained below, we reverse the
Nunokawa Fee Order, vacate the Judgment to the extent it awards
attorneys' fees and costs to Nunokawa and deducts such amounts
from the total judgment amount entered in favor of Putnam, affirm
the Judgment in all other respects, and remand with instructions.
I. Background
In or about 2008 and 2009, Putnam and her husband, Dr.
Walter Nunokawa (Walter), loaned money to Nunokawa for the
construction of two houses on Nunokawa's property on 16th Avenue
in Honolulu (16th Ave. Property). During this period, Nunokawa
incurred three debts to Putnam and Walter: (1) a $625,000 loan
(First Loan); (2) a $250,000.00 loan (Second Loan); and (3)
credit card charges in the aggregate amount of $13,344.70, which
Putnam and Walter allowed Nunokawa to make on their Home Depot
accounts (Home Depot Loan) (collectively, the Loans or the
Debts). Nunokawa is Walter's daughter and Putnam's step-
daughter. Walter died in February 2015.
With respect to the First Loan, Putnam and Walter
orally agreed to loan Nunokawa $625,000 by taking out a first
mortgage loan on their property on Lumahai Street in Honolulu
(Lumahai Property). Sometime after the first mortgage loan
closed in August 2008 and the funds were distributed to Nunokawa,
she executed a promissory note (Promissory Note or Note), dated
August 7, 2008, in the amount of $625,500.00 in favor of Putnam
and Walter. The Promissory Note, which contains an integration
clause, states, among other things: "Borrower will make an
installment payment on the day of each month beginning as
required by the secured mortgage between P[utnam/Walter] and
Mason-Duffie Corp. until the principal and interest have been
paid in full."
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The parties agree that Nunokawa has made all monthly
payments under the Promissory Note. The primary dispute with
respect to the First Loan was whether the parties agreed it would
be repaid in full when construction of the houses on the 16th
Ave. Property was complete. Putnam maintained that when she and
Walter agreed to make the First Loan, Nunokawa orally agreed to
fully repay it upon completion of construction.
With respect to the Second Loan and the Home Depot
Loan, the parties also disputed whether full repayment was due
upon completion of construction. These loans are the subject of
the challenged FOFs/COLs/Order, which is quoted below.
On July 7, 2015, Putnam filed a complaint against
Nunokawa, asserting claims for specific performance, imposition
of a constructive trust, breach of contract, and unjust
enrichment. The complaint alleged, among other things, that
Nunokawa breached an oral agreement to repay the Loans upon
completion of the improvements to the 16th Ave. Property.
On April 10, 2017, Nunokawa filed a motion for summary
judgment as to all claims asserted in the complaint. At a
May 11, 2017 hearing, the Circuit Court granted summary judgment
in favor of Nunokawa as to the breach of contract claim regarding
the First Loan, ruling in part that the Promissory Note
constituted a fully integrated written contract and, therefore,
Putnam's claim based on the alleged covenant to repay the First
Loan upon completion of construction was barred by the parol
evidence rule. The Circuit Court denied the motion as to the
breach of contract and unjust enrichment claims regarding the
Second Loan and the Home Depot Loan.
On November 14-15, 2017, the Circuit Court presided
over a jury-waived trial on the claims regarding the Second Loan
and the Home Depot Loans. The court subsequently entered the
FOFs/COLs/Order, which stated in part:
FINDINGS OF FACT
. . . .
3. [Putnam] and [Walter] borrowed money pursuant to
certain mortgage loans ("Underlying Loans") on their . . .
Lumahai Property[] in order to fund the Loans to [Nunokawa],
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including the amount of $250,000.00 from a Home Equity Line
of Credit with First Hawaiian Bank ("HELOC Loan")[.]
4. [Putnam] and [Walter] also allowed [Nunokawa] to
make charges on their Home Depot credit card accounts in the
amount of $13,344.70.
5. Initially, when the Debts were incurred by
[Nunokawa] in 2008 and 2009, it was contemplated that the
value of the [16th Ave.] Property would be increased with
the construction of two new large structures on the land.
6. It was further contemplated that [Nunokawa] would
repay the Underlying Loans that were taken out by [Putnam]
and [Walter on their Lumahai Property to fund the Loans to
Nunokawa] by refinancing the mortgage on Plaintiff's [sic]
[16th Ave.] Property upon the completion of such
construction, and the Debts would then be paid off.
7. [Nunokawa] also agreed to pay the monthly
principal and interest payments related to the Underlying
Loans taken out by [Putnam] and [Walter] until the Debts
were paid in full.
8. [Nunokawa] was not able to refinance her mortgage
in 2010 when construction was complete, and [Nunokawa]
continued to pay the monthly payments on the Underlying
Loans . . . and the Debts continued on.
. . . .
17. After the unfortunate death of [Walter], [Putnam]
and [Nunokawa] had a meeting and held further discussions
about the Debt.
18. Refinancing was not working out because of the
unhealthy mortgage market in 2010, which was still reeling
from the 2008 mortgage crisis.
19. [Nunokawa], therefore, decided to pursue the
option of selling the [16th Ave.] Property and to pay off
the Debt to [Putnam].
20. [Nunokawa], [Putnam] and Rose Kirland all
testified that after [Nunokawa] sold the [16th Ave.]
Property, it was [Nunokawa]'s intention to pay off all of
the Loans in full.
21. In 2014, before she left on her sabbatical leave,
[Nunokawa] began trying to sell the [16th Ave.] Property.
22. However, [Nunokawa]'s attempts with two different
realtors were not successful.
23. [Nunokawa] then considered converting the [16th
Ave.] Property to a Condominium Property Regime ("CPR")
property to enhance its value and marketability.
24. However, [Nunokawa]'s efforts to convert the
[16th Ave.] Property to a CPR did not progress.
25. It was during this process of attempting to sell
the [16th Ave.] Property that [Nunokawa] agreed with
[Putnam] to sell the [16th Ave.] Property and pay off the
Loans.
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26. Shortly after [Walter]'s funeral in March 2015,
[Putnam] and [Nunokawa] had a conversation about retiring
the Debt.
27. [Nunokawa] stated that it was her intention to
sell the [16th Ave.] Property and pay off the Loans. Trial
Exh. 36 (Transcripts of Jill Nunokawa Deposition ("Nunokawa
Depo.")) at 99-101.
28. [Nunokawa] stated that it was her intention to
sell the [16th Ave.] Property and pay off the Loans during
the process of listing the [16th Ave.] Property for sale
with two different realtors.
29. [Nunokawa] repeated her intention to sell the
[16th Ave.] Property and pay off the Debt during her
deposition. Nunokawa Depo at 104-105.
30. [Nunokawa] further repeated this intent in a
July 30, 2015 email to [Putnam] wherein she stated, "I would
like to move forward . . . and reduce harm and hardship. I
will sign the documents and continue forward in the selling
of the property. Once the property is sold and the debt is
paid off, we both can be relieved of this excessive burden."
Trial Exh. 29; Jill L. Nunokawa trial testimony under cross-
examination by Mr. Hironaka.
31. The documents referred to by [Nunokawa] are a
written mortgage and note that [Putnam] proposed [Nunokawa]
sign.
32. In the course of discussing [Putnam]'s proposal
for [Nunokawa] to memorialize the Debt by executing a
mortgage and a note, [Nunokawa] announced that it was not
necessary to execute such documents because it was
[Nunokawa]'s intention to sell the [16th Ave.] Property and
pay off all of the Debts to [Putnam].
33. In response, [Putnam] stated that selling the
[16th Ave.] Property and paying off the Debt is even better
than signing a mortgage and note. Trial Exh. 43
(Transcripts of Lee Putnam's Deposition ("Putnam Depo.")) at
79-80.
34. [Nunokawa] told [Putnam] that she did not want to
refinance the mortgage on the [16th Ave.] Property because
she was planning to sell the [16th Ave.] Property and pay
off the Debt. Putnam Depo. at 87.
35. At this point, the original agreement to repay
the Debt upon the completion of construction by refinancing
the mortgage on Plaintiff's [sic] [16th Ave.] Property was
replaced by an accord that the Debt would instead be repaid
in full upon the sale of the [16th Ave.] Property.
36. This accord was reached by July 30, 2015. Trial
Exh. 29.
37. [Nunokawa]'s efforts to sell the [16th Ave.]
Property confirms this accord.
38. Both parties agreed to the term of paying off the
Debt upon the sale of the [16th Ave.] Property.
39. The conduct of [Nunokawa] led [Putnam] to believe
that the [16th Ave.] Property would be continuously marketed
until sold.
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40. There was no discussion about taking the [16th
Ave.] Property off the market or converting the [16th Ave.]
Property to a CPR property or suspending entirely all of
[Nunokawa]'s efforts to sell the [16th Ave.] Property.
41. The accord was to sell the [16th Ave.] Property
forthwith and retire the entire Debt.
42. This is confirmed by [Putnam]'s disappointment
and frustration when [Nunokawa] announced that she had
changed realtors, which appeared to threaten or delay the
sale.
. . . .
51. [Nunokawa]'s view of the facts is influenced by
her working and loving relationship with her father.
52. When viewed from the lens of her father-daughter
relationship, it is easy to see how [Nunokawa] views the
facts.
53. However, when [Walter] passed away in 2015 and
[Putnam] became the sole owner of the Debt, unlike [Walter],
[Putnam] did press for the full performance of [Nunokawa]'s
obligation and they entered into an accord on approximately
July 30, 2015.
CONCLUSIONS OF LAW
. . . .
5. After the accord came into existence on or about
July 30, 2015, [Putnam] was entitled to seek full
performance to seek a remedy for the breach of either the
initial agreement or the accord. Azer v. Meyers, 8 Haw.
App. 86, 107, 793 P.2d 1189, 1204-05, rev'd in part on other
grounds, 71 Haw. 506, 795 P.2d 853 (1990).
6. Since entering into the accord, [Nunokawa]
discontinued her efforts to sell the Property.
7. [Nunokawa]'s action in this regard constitutes a
breach of the accord.
The Circuit Court awarded Putnam the following damages:
(1) $244,980.60 for the repayment of the principal due under the
Second Loan; (2) $13,344.70 for the Home Depot Loan; (3)
"[s]ubtotal damages" in the amount of $258,325.30; (4)
prejudgment interest taxed at a rate of 17.5 percent from
July 30, 2015, to June 26, 2018, in the amount of $45,206.93; and
(5) total judgment in the amount of $303,532.23.
Thereafter, Putnam filed a motion for an award of
attorneys' fees and costs pursuant to Hawaii Revised Statutes
(HRS) §§ 607-9 and 607-14. Putnam sought $63,604.19 in
attorneys' fees and $2,697.57 in costs.
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On July 20, 2018, Nunokawa filed a motion for an award
of attorneys' fees and costs pursuant to HRS §§ 607-9 and 607-14.
Nunokawa sought $52,099.46 in attorneys' fees and $1,788.49 in
costs.
On August 31, 2018, the Circuit entered the Putnam Fee
Order and the Nunokawa Fee Order. In each order, the court
determined that "both [Putnam] and [Nunokawa] enjoy prevailing
party status with respect to the three claims asserted herein:
[Putnam] is the prevailing party on the [Second Loan] and the
[Home Depot Loan] claims and [Nunokawa] is the prevailing party
on the [First Loan] claim. Each is entitled to their attorneys'
fees and costs for the proportion of the case upon which they
prevailed." In the Putnam Fee Order, the court concluded that a
ten percent reduction in Putnam's claim for attorney's fees "for
losing a portion of [Nunokawa's motion for summary judgment[,]"
i.e., regarding the First Loan, was reasonable. The court thus
awarded Putnam $57,243.77 in attorneys' fees and $2,697.57 in
costs. In the Nunokawa Fee Order, the court concluded that a
forty percent reduction in Nunokawa's fee claim was reasonable.
The court thus awarded Nunokawa $31,259.68 in attorneys' fees and
$1,788.49 in costs.
On October 5, 2018, the Circuit Court entered the
Judgment in favor of Putnam and against Nunokawa in the total
amount of $330,425.49. This appeal and cross-appeal followed.
II. Discussion
On appeal, Nunokawa contends that the Circuit Court
erred: (1) "when it concluded that Azer v. Myers supported the
court's theory that the parties agreed to an accord"; (2) "when
it relied upon [FOFs] that were unsupported by the record to
support its own theory of an accord"; (3) "in finding a breach of
the alleged accord"; (4) "when it failed to apply to its Final
Judgment ruling the very same facts and law it relied upon in its
own ruling in favor of [Nunokawa's motion for summary judgment]";
(5) "in its findings with regard to [Walter's] alleged statements
regarding inheritance"; and (6) "by basing its award of attorney
fees on both an erroneous view of the law and on a clearly
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erroneous assessment of the evidence." Nunokawa summarily
challenges FOFs 6, 8-10, 12-16, 18-20, 24-25, 27-42, 44-49, and
51-53, and COLs 3-8.2/
On cross-appeal, Putnam contends that the Circuit Court
erred: (1) "in granting in part Nunokawa's Motion for Summary
Judgment"; (2) "in denying in part Putnam's Motion for an Award
of Attorneys' Fees and Costs"; and (3) "in granting in part
Nunokawa's Motion for an Award of Attorney's Fees and Costs."
A. Nunokawa's Appeal
1. Existence of an Accord and Breach
Nunokawa contends that "the Circuit Court erred in 1)
concluding that Azer . . . supported the court's theory that the
parties agreed to an accord, and 2) in making its determination
of an accord without applying the test for a valid accord that
this Court set out in Rosa v. Johnson[, 3 Haw. App. 420, 651 P.2d
1228 (1982)]." Nunokawa further argues that "the record on
appeal does not support the Circuit Court's finding of an accord
and breach. . . ."
The Circuit Court cited Azer in COL 5, quoted above.
It appears that the court did not rely on Azer to support the
court's determination that the parties reached an accord.
Rather, the court relied on Azer for the proposition that, given
the existence of an accord – a conclusion we address below –
Putnam was entitled to seek a remedy for either breach of the
parties' initial agreement or for the breach of the accord. This
is not an incorrect statement of the law. See 8 Haw. App. at
107-08, 793 P.2d at 1204-05.
We thus address the crux of Nunokawa's argument – that
the Circuit Court clearly erred in concluding that the parties
2/
Nunokawa presents no specific argument explaining why FOFs 8-10,
18-20, 24-25, 30-34, 36-38, 41-42, 44-49, and 51-53, and COLs 3-4 (which are
mixed conclusions of fact and law) are clearly erroneous. See HRAP 28(b)(4),
(7); Morgan v. Plan. Dep't, Cnty. of Kauai, 104 Hawai #i 173, 180-81, 86 P.3d
982, 989-90 (2004). We address Nunokawa's arguments only to the extent they
are discernible. See Hawaii Ventures, LLC v. Otaka, Inc., 114 Hawai #i 438,
478, 164 P.3d 696, 736 (2007).
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reached an accord by July 30, 2015.3/ We find no clear error in
this conclusion.
"An accord is a contract under which an obligee
promises to accept a stated performance in satisfaction of the
obligor's existing duty. Performance of the accord discharges
the original duty." Id. (quoting Restatement (Second) of
Contracts § 281(1) (1979)); see 1 Am. Jur. 2d, Accord and
Satisfaction § 5 (Oct. 2023 Update) ("[T]he essential elements of
'accord and satisfaction' are an agreement to settle a dispute
and consideration which supports the agreement."). "An accord is
enforceable as a contractual agreement in its own right, and
therefore, an action may be maintained against the party in
default for the breach or nonperformance of an accord under
ordinary contracts principles." 1 Am. Jur. 2d, Accord and
Satisfaction § 52 (footnote omitted); see Azer, 8 Haw. App. at
107, 793 P.2d at 1204-05 (quoting Restatement § 281(2)).
A claim of accord and satisfaction can also be raised
as an affirmative defense by a defendant in a breach of contract
action. See Rosa, 3 Haw. App. at 423, 651 P.2d at 1232. In
Rosa, this court stated that "an effective accord and
satisfaction requires the following prerequisites: (1) existence
of a 'bona fide dispute' between the parties involved, (2) tender
by the obligor which gives the obligee adequate notice that a
compromise is being proposed, and (3) effective acceptance of the
compromise offer in order to discharge the original obligation."
Id. These prerequisites are consistent with the elements of an
accord for purposes of maintaining an action for its breach. Cf.
Azer, 8 Haw. App. at 107-08, 793 P.2d at 1204-05 (quoting
Restatement § 281(1)); 1 Am. Jur. 2d, Accord and Satisfaction
§ 5.
As to the Rosa elements, Nunokawa first argues there
was no bona fide dispute between the parties, pointing to the
lack of a dispute concerning the amount of the debt. The record
3/
Given that the Circuit Court tried only the claims regarding the
Second Loan and the Home Depot Loan, we construe the FOFs/COLs as determining
that the parties reached an accord on the Second Loan and the Home Depot Loan.
The parties agree on this point.
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reflects, however, that the dispute related not to the amount of
the debt, but to whether full repayment was due upon completion
of improvements to the 16th Ave. Property. At trial, for
example, Nunokawa testified that the parties did not discuss when
the loans would be paid off in full. Putnam, on the other hand,
testified that Nunokawa agreed to repay the loans when the
improvements to the Property were complete. Substantial evidence
in the record supports the existence of a bona fide dispute
between Putnam and Nunokawa regarding the timing of repayment in
full.
As to the second and third Rosa elements, Nunokawa
argues "there is no intent to offer a compromise where Ms.
Nunokawa testified at trial that her intent in selling her house
was due to her chronic illness[,] and "[a]s there was no
compromise offer . . . , there could be no acceptance." In
response, Putnam points to the following evidence adduced at
trial, including her own testimony, that: (1) after completion
of the improvements, Nunokawa told Putnam that she was not in a
position to refinance and pay off the loans; (2) after several
years, Putnam expressed concern to Nunokawa over the lack of
repayment of the loans; (3) in 2012, the parties began discussing
securitizing the loans by putting a mortgage on the 16th Ave.
Property; (4) while Putnam's attorney was preparing the documents
to securitize the loans, Nunokawa asked to stop the process and
told Putnam she was going to sell the 16th Ave. Property and
repay the loans with the proceeds; and (5) Putnam responded,
"Well fine. That's even better," and stopped the securitization
process.
"[A] promisor manifests an intention if he [or she]
believes or has reason to believe that the promisee will infer
that intention from his [or her] words or conduct." In re
Herrick, 82 Hawai#i 329, 338, 922 P.2d 942, 951 (1996) (quoting
Restatement § 2(1) comment b); see also United Pub. Workers,
AFSCME, Loc. 646, AFL-CIO v. Dawson Int'l, Inc., 113 Hawai#i 127,
141, 149 P.3d 495, 509 (2006) ("A party's words or acts are
judged under a standard of reasonableness in determining whether
he [or she] has manifested an objective intention to agree.")
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(quoting Earl M. Jorgensen Co. v. Mark Constr., Inc., 56 Haw.
466, 470, 540 P.2d 978, 982 (1975)). Moreover, "[i]n cases of
conflicting evidence, the credibility of the witnesses and the
weight to be given their testimony are within the province of the
trier of fact and, generally, will not be disturbed on appeal.
It is not the function of the appellate courts to second-guess
the trier of fact where there is substantial evidence in the
record to support its conclusion." Stanford Carr Dev. Corp. v.
Unity House, Inc., 111 Hawai#i 286, 304, 141 P.3d 459, 477 (2006)
(original brackets omitted) (quoting In re Estate of Herbert, 90
Hawai#i 443, 454, 979 P.2d 39, 50 (1999)).
Here, there was conflicting evidence as to Nunokawa's
intent in stating "her desire to sell" the 16th Ave. Property.
Indeed, Nunokawa challenges FOFs 27-29, 35, and 39-40 by
construing her own testimony. As reflected in the
FOFs/COLs/Order, however, the Circuit Court weighed all of the
conflicting evidence, weighed the witnesses' credibility, and
determined that Nunokawa expressed her intent to sell the
Property and pay off the loans. See, e.g., FOFs 25-30, 32, 35.
The court further determined that the parties reached an accord
as to the Second Loan and Home Depot Loan by July 30, 2015, under
which Nunokawa would sell the 16th Ave. Property and repay the
debt in full upon the sale.4/ See, e.g., FOFs 35-36 and supra,
note 3. The decision to weigh the conflicting evidence in
Putnam's favor was within the province of the Circuit Court.
Based on our review of the record, substantial evidence supports
FOFs 27-29, 35, and 39-40,5/ and the court did not clearly err in
making these findings. The second and third Rosa elements were
4/
Contrary to Nunokawa's argument, the filing of the complaint on
July 7, 2015, did not negate the consideration for the parties' accord.
5/
Nunokawa also appears to challenge FOFs 6, 27-29, and 35 as
inconsistent with the Circuit Court's Partial Summary Judgment Order. This
argument is without merit. During the hearing on Nunokawa's motion for
summary judgment, the Circuit Court ruled that the Promissory Note was fully
integrated and, therefore, Putnam's claim based on the alleged covenant to
repay the First Loan upon completion of construction was barred by the parol
evidence rule. During the jury-waived trial, however, the Circuit Court was
tasked with determining Putnam's claims regarding the Second Loan and the Home
Depot Loan, which were not written agreements. The court thus properly
considered all relevant evidence, including parol evidence, to determine the
scope of the parties' related agreements.
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satisfied, and an accord was established.6/
Based on our review of the record, we also reject
Nunokawa's argument that the Circuit Court clearly erred in
finding that Nunokawa breached the parties' accord, as well as
her related challenge to FOFs 39-41 and 12-16, and COLs 6-8,
which are mixed conclusions of fact and law. The evidence
supports the finding that Nunokawa's conduct led Putman to
believe that the property would be continuously marketed until
sold. The evidence further establishes that there were several
breaks in Nunokawa's efforts to list the Property, including when
she terminated the listing with Patricia Case in September 2014.
Nunokawa also challenges FOFs 12-16, which quote an
alleged statement made by Walter (based on the testimony of
witness Rose Kirland) regarding Putnam's inheritance, and
conclude that the statement was "a motivating factor for both
sides."7/ To the extent that Nunokawa challenges the alleged
statement as hearsay, she fails to state where in the record she
objected to the statement, and her argument is thus disregarded.
See Hawai#i Rules of Appellate Procedure (HRAP) Rule 28(b)(4).
In any event, the Circuit Court's quotations from Kirland's
6/
The evidence also established the elements of an accord under
Restatement § 281. See Azer, 8 Haw. App. at 107-08, 793 P.2d at 1204-05.
7/
FOFs 12-16 state:
12. However, [Nunokawa] did respect her father's
directive when [Walter] said to [Nunokawa], "This is Lee's
inheritance. Please pay it back." Trial Exhibit ("Exh.") 44
(Transcripts of Rose Kirland Deposition ("Kirland Depo."))
at 38; Rose Kirland trial testimony under cross-examination
by Mr. Hosoda.
13. [Walter]'s statement to [Nunokawa] was a
motivating factor for both sides.
14. For [Putnam], it indicates part of her motivation
to free the Lumahai Property from the financial burden of
extending over $800,000.00 in liquidated equity to
[Nunokawa] as [Putnam] gets further along in her retirement.
15. And for [Nunokawa], she knew that it was an
important concern for her father to provide financial
security to [Putnam].
16. Rose Kirland testified that [Putnam] stated to
[Nunokawa] that the Lumahai Property was her only support
and that the Debt was all of [Putnam]'s money. Kirland
Depo. at 32-33.
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deposition testimony are correct, and the court's conclusions
regarding the parties' motivations are not necessary to support
its conclusion that Nunokawa breached the accord by discontinuing
her efforts to sell the Property.
Accordingly, the Circuit Court did not clearly err in
determining that Nunokawa breached the parties' accord.
2. Award of Attorneys' Fees to Putnam
Nunokawa contends that "the Circuit Court has abused
its discretion by basing its ruling on both an erroneous view of
the law and a clearly erroneous assessment of the evidence in the
record." She does not, however, make any discernible argument as
to how the Circuit Court misapplied the law or misevaluated the
evidence in awarding attorneys' fees to Putnam. To the extent
that Nunokawa's contention regarding the fee award is based on
her argument that the law and the evidence do not support an
accord and breach, we have rejected that argument. Any other
point regarding the fee award is waived for failure to present a
discernible argument. See HRAP Rule 28(b)(7).
B. Putnam's Cross-Appeal
1. The Partial Summary Judgment Order
On Cross-Appeal, Putnam contends that summary judgment
as to the First Loan was improper because "a genuine issue of
material fact existed regarding whether Nunokawa was required to
repay the First Loan upon completion of the improvements to the
16th Ave. Property." Putnam argues that "the terms of the First
Loan, as orally agreed upon at the time the loan was made, are
enforceable as an oral contract[,]" and "Nunokawa had an
obligation to accurately reflect the terms of the oral agreement
as to the First Loan . . . ."8/
8/
Putnam further argues that: (1) the parol evidence rule should be
relaxed where, as here, the parties used "a standard promissory note," and (2)
Nunokawa's testimony shows that "the parties could not have intended the Note
to be a final expression of their agreement." Putnam fails to state where in
the record she brought these issues to the attention of the Circuit Court.
Her related arguments are thus deemed waived. See HRAP Rule 28(b)(4); State
v. Moses, 102 Hawai#i 449, 456, 77 P.3d 940, 947 (2003).
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While a properly formed oral contract is enforceable,
here, the Circuit Court concluded that a fully integrated written
agreement was executed subsequent to the disputed oral agreement.
The record supports this conclusion. "The parol evidence rule
applies when there is a single final memorial of the
understanding of the parties; when that takes place, all prior
and contemporaneous negotiations are excluded and are superseded
by such written memorial." Pancakes of Hawaii, Inc. v. Pomare
Properties Corp., 85 Hawai#i 300, 310, 944 P.2d 97, 107 (App.
1997) (quoting 29A Am. Jur. 2d Evidence § 1092, at 551-52 (2d ed.
1994)). Thus, the Promissory Note superseded any prior
agreements and, as the Circuit Court correctly ruled, the alleged
covenant to repay the First Loan upon completion of construction
was barred by the parol evidence rule.9/
Accordingly, the Circuit Court did not err in granting
in part Nunokawa's motion for summary judgment as to Putnam's
claims regarding the First Loan based on application of the
parole evidence rule.
2. Award of Attorneys' Fees to Putnam and Nunokawa
Putnam contends that the Circuit Court erred: (1) in
denying in part Putnam's motion for an award of attorneys' fees
and costs by deducting ten percent of the requested fees; and (2)
granting in part Nunokawa's motion for an award of attorney's
fees and costs. Regarding the second contention, Putnam argues
that the court, having found that Putnam was a prevailing party,
erred in concluding that Nunokawa was also a prevailing party.
Putnam also argues that Nunokawa's requested fees are
unreasonable.
With respect to Putnam's second contention, we conclude
that the Circuit Court abused its discretion in determining that
Putnam and Nunokawa were both prevailing parties for purposes of
9/
While the parole evidence rule includes an exception for fraud,
see Pancakes of Hawaii, 85 Hawai#i at 310-11, 944 P.2d at 107-08, Putnam did
not invoke that exception in opposing Nunokawa's motion for summary judgment
and does not argue it on cross-appeal.
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awarding attorneys' fees under HRS § 607-14.10/ See Oahu Publ'ns,
Inc. v. Abercrombie, 134 Hawai#i 16, 22, 332 P.3d 159, 165
(2014). "[I]n general, a party in whose favor judgment is
rendered by the [trial] court is the prevailing party in that
court, plaintiff or defendant, as the case may be. Although a
plaintiff may not sustain his entire claim, if judgment is
rendered for him, he is the prevailing party for purposes of
costs and attorneys' fees." Kamaka v. Goodsill Anderson Quinn &
Stifel, 117 Hawai#i 92, 126, 176 P.3d 91, 125 (2008) (internal
quotation marks and original brackets omitted) (quoting MFD
Partners v. Murphy, 9 Haw. App. 509, 514, 850 P.2d 713, 716
(1992)); Sierra Club v. Dep't of Transp. of State of Haw., 120
Hawai#i 181, 216, 202 P.3d 1226, 1261 (2009). Where there is no
final judgment clearly stating which party prevailed, the court
"is required to first identify the princip[al] issues raised by
the pleadings and proof in a particular case, and then determine,
on balance, which party prevailed on the issues." Sierra Club,
120 Hawai#i at 216, 202 P.3d at 1261 (quoting MFD Partners, 9
Haw. App. at 514, 850 P.2d at 716). "A party 'will be deemed to
be the successful party for the purpose of taxing costs and
attorney's fees' 'where that party prevails on the disputed main
issue, even though not to the extent of his original
contention.'" Deutsche Bank Nat'l Tr. Co. v. Kozma, 140 Hawai#i
494, 498, 403 P.3d 271, 275 (2017) (brackets omitted) (quoting
Kaleikini v. Yoshioka, 129 Hawai#i 454, 461, 304 P.3d 252, 259
(2013)); see Sierra Club, 120 Hawai#i at 216, 202 P.3d at 1261
10/
HRS § 607-14 (2016) provides, in pertinent part:
In all the courts, in all actions in the nature of assumpsit
and in all actions on a promissory note or other contract in
writing that provides for an attorney's fee, there shall be
taxed as attorneys' fees, to be paid by the losing party and
to be included in the sum for which execution may issue, a
fee that the court determines to be reasonable; provided
that the attorney representing the prevailing party shall
submit to the court an affidavit stating the amount of time
the attorney spent on the action and the amount of time the
attorney is likely to spend to obtain a final written
judgment, or, if the fee is not based on an hourly rate, the
amount of the agreed upon fee. The court shall then tax
attorneys' fees, which the court determines to be
reasonable, to be paid by the losing party; provided that
this amount shall not exceed twenty-five per cent of the
judgment.
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(quoting Food Pantry, Ltd. v. Waikiki Bus. Plaza, Inc., 58 Haw.
606, 620, 575 P.2d 869, 879 (1978)) (same).
Here, the Judgment plainly states that "Final Judgment
on the Complaint . . . is hereby entered in favor of . . . PUTNAM
and against . . . NUNOKAWA in the total amount of . . .
$330,425.49[]." However, the Judgment also awards attorneys'
fees and costs to both Putnam and Nunokawa consistent with the
Putnam Fee Order and the Nunokawa Fee Order, in which the Circuit
Court determined that "both [Putnam] and [Nunokawa] enjoy
prevailing party status with respect to the three claims asserted
herein[.]" In reaching this conclusion, it appears the court
identified the principal issues raised in the case as the three
loan claims that were in dispute, and determined that Putnam
prevailed on the Second Loan and the Home Depot Loan claims,
while Nunokawa prevailed on the First Loan claim. These
determinations are supported by the record and are consistent
with the applicable case law. See supra. However, the case law
does not support the court's determination that Putnam and
Nunokawa were both prevailing parties for purposes of awarding
attorney's fees under HRS § 607-14. Further, the plain language
of the statute, which refers to "the losing party" and "the
prevailing party," does not appear to contemplate two prevailing
parties in this procedural context. HRS § 607-14 (emphases
added). Rather, a party "will be deemed to be the successful
party for the purpose of taxing costs and attorney's fees" "where
[that] party prevails on the disputed main issue, even though not
to the extent of his original contention[.]" Sierra Club, 120
Hawai#i at 216, 202 P.3d at 1261.
Under the applicable case law, Putnam was the
prevailing party for purposes of awarding attorney's fees under
HRS § 607-14. Final judgment was entered in favor of Putnam and
against Nunokawa. Moreover, based on the Circuit Court's
determination that Putnam prevailed on the Second Loan and Home
Depot Loan claims (i.e., two of the three loan claims), on
balance, Putnam prevailed on the disputed main issues raised by
the pleadings and the proof. See MFD Partners, 9 Haw. App. at
514, 850 P.2d at 716 ("It is clear from the jury's special
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verdict and the trial court's judgment that Plaintiffs prevailed
on both issues.") The Circuit Court therefore abused its
discretion in awarding attorneys' fees and costs to Nunokawa, and
we reverse the Nunokawa Fee Order. Given our conclusion, we need
not reach Putnam's argument that Nunokawa's requested fees were
unreasonable.
We further conclude that the Circuit Court did not
abuse its discretion in deducting ten percent of Putnam's
requested fees "for losing a portion of [Nunokawa's motion for
summary judgment[,]" i.e., regarding the First Loan claim.
III. Conclusion
For the reasons discussed above, we reverse the
August 31, 2018 "Order Granting in Part and Denying in Part
'. . . Nunokawa's Motion for an Award of Attorneys' Fees and
Costs' Filed on July 20, 2018," entered by the Circuit Court of
the First Circuit. We also vacate the Circuit Court's October 5,
2018 Final Judgment, to the extent that it awards attorneys' fees
and costs to Nunokawa and deducts such amounts from the total
final judgment amount entered in favor of Putnam and against
Nunokawa. We affirm the Final Judgment in all other respects.
We remand the case to the Circuit Court with instructions to
recalculate the final judgment total amount entered in favor of
Putnam and against Nunokawa, consistent with this memorandum
opinion, and to enter a new final judgment reflecting the
recalculated amount.
DATED: Honolulu, Hawai#i, January 31, 2024.
On the briefs:
Lyle S. Hosoda and /s/ Katherine G. Leonard
Addison D. Bonner Acting Chief Judge
(Hosoda & Bonner,LLLC),
for Defendant-Appellant/
Cross-Appellee /s/ Clyde J. Wadsworth
Associate Judge
Philip W. Miyoshi
(Miyoshi & Hironaka LLC)
for Plaintiff-Appellee/ /s/ Kimberly T. Guidry
Cross-Appellant Associate Judge
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