Case Title: Taniguchi v. Association of Apartment Owners of King Manor, Inc.

Citation: 114 Haw. 37

Docket Number: 

State: hawaii

Court: Hawaii Supreme Court

Date: 2007-04-12T00:00:00Z

Document:
‘s++POR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REFORTER®*#

IN THE SUPREME COURT OF THE STATE OF HAWAI‘T

 

000.
GLENN TANIGUCHI, Plaintiff-Appellant
ASSOCIATION OF APARTMENT OWNERS OF KING MANOR, INC.,
‘2 Hawai'S Non-Profit Corporation, IRVIN KING,
BETTY TAKAHASHI, HENRY KENNEDY, LYNN SCHNEIDER,
AUDREY ASAHINA, Defendants-Appellees

and

JOHN DOES 1-107 JANE DOES 1-10; DOE PARTNERSHIPS 1-10;
DOE CORPORATIONS 1-10; and DOE ENTITIES 1-10, Defendants

 

 

wo. 27500 4a 2

Be 3

APPEAL FROM THE FIRST CIRCUIT couRT 2212
(CIV. NO. 04-1-00403) aed

ae 3

ge

APRIL 12, 2007 a 8

MOON, C.J., LEVINSON, NAKAYAMA, ACOBA, AND DUFFY, JJ.

OPINION OF THE COURT BY ACOBA, J.
Plaintiff-Appellant Glenn Taniguchi (Appellant) appeals
from the August 24, 2005 judgment of the circuit court of the
first circuit (the court)’ granting the Motion for Summary

Judgment of Defendants-Appellees Association of Apartment Owners

 

+ the Honorable Victoria S. marks presided

aad
 

‘+*4FOR PUBLICATION IM WEST'S HAWAI'T REPORTS AND PACIFIC REPORTER

 

of King Manor, Inc. (the Association), Irving King (King), Betty
Takahashi, Henry Kennedy (Kennedy), Lynn Schneider, and Audzey
Asahina (collectively, Appellees] end denying Appellant’s October
13, 2004 Motion to Set Aside the Order and June 14, 2008 Motion
for Partial Summary Judgment as to Appellant's First Cause of
Action.

We hold that (1) Hawai'i Revised Statutes (HRS) § 514A-
82(a) (14) (Supp. 2005), which prohibited a resident manager of a
condominium from serving on its board of directors, originally
enacted as HRS § 514-20 on June 9, 1976, 1976 Haw. Sess. L. Act
239, §§ 3,7 at 758-59, does not apply to the Association inasmuch
as the Association’s original bylaws were recorded prior to the
enactment of HRS § 514-20, (2) the inclusion of Section 3.01 in
the Association's First Restated Bylaws pursuant to HRS § S14A-
82 (a) (14), which prohibited a resident manager of a condominium

from serving on the Board of Directors of the Association (the

 

+ Rs § $14A-82(2) (14) relating to “Contents of bylaws” «

 

a] The bylaue should provide for at least the
following

{24)" No resident manager of a condominium shall serve
on its board of directors{-J

 

uns _§ $14R-82(a) (14) was subsequently repealed by 2004 Haw. Sess. L. Act 164,
$26 at £13.

Effective July 1, 2005, a similar restriction exists in HRS
§ 514B-107(b) (2006), sich pertains te "Sosrd: limitations.” 2004 Haw. Sess,
L, Act 166, § 2 at 765. HRS’ § £14B-107(b) states, "No resident manager oF
employee of § condominium shall serve on its board.”

   

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Board), exceeded the purview of HRS § 514A-82.2(b) (1993)?

 

eatoment of declaration and bylaws,”

 

> ns § st4ncs2.2, entitied “
stated in pertinent part

 

(a) Notwithstanding any other provision of this
chapter or of any cther statute or instrument, an
Sesociation of apartment owners may at any tine restate the
Seclaraticn of condominium property regime of the project or
tthe bylaws of the association to set forth all amendnente
thereof by 8 resolution adopted by the board of directors.

we)

 

 

the declaration of condominium property regime
of the project or th hs

Geclarsticn or bylaws eg may be required in order te confors
sith the provisions of this chapter ox of any other statate,
brgimance, tule or reaulation enacted by any aoveromentel

iinority bys resolution -adopred py the boars of
‘Gitectors. end the restated declaration or bylaws shall_be
etuliy etfective tor ali curpases as if adopted by the

Vote or written consent of the spartment owners; provided
nat sny declaration of condominium property regime oF

bvlsus Peststes pursuant to this subsection ehsil identity
‘Sach corticn so restated and-ahali contain a statement hat
hese portions hal onses Of

rainance, Fale, aindment

‘and that in the event of any conflict, the restated
Sbelaration or bvlsve shall -be subordinate tothe cited
Stscute, ordinance, rule, op reculetion.

(emphases added.) HRS § S142-€2.2 was subsequently repealed by 2004 Haw.
Sess. L. Act 164, § 26 at #13.

‘on duay 1, 2005, HRS § 5148-109 (2006), entitled “Restatement of
declaration and bylaws,” took effect. 2008 Haw. Sess. i. Act 164, $2 at 767.
Rs § siaB-109 sta

 

1a) Notwithstanding any other provision of this
chapter or of any other stetute or instrument, an
aececiation at any tine may restate the declaration or
Bylaws of the asscclation to set forth all amendments
thereto by a resolution adoptes by the boar

(b) Subject to section $14B-25, an association at any
tine may restate the declaration or bylaws of the

‘sockation to amend the declaration or bylaws as may be

feguired in order to conform with the provisions of this
chopter or of any cther statute, ordinance, or rule enacted
by any governmental authority, or to correct the percentage
of common interest for the project so it totals one hundred
per cent, by a resclution adopted by the boerd. If the
Eestated declaration is to correct the percentage of conon
Ineerest for the project so that it toteis one mundred per
cent, the proportion of each unit owner's percentage of
Connon interest shell renin the sane in relation to the
‘other unit owners. The restated declaration or bylaws shall
be as fully effective for all purposes as if adopted by @
vote or written consent of the unit owners

‘ny declaration or bylaws restated pursuant to this
ction shall?

 

 

 

  

 

subs

 

(continved.-.)
FOR PUBLICATION TH WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER**#

 

 

relating to restatement of bylaws, (3) Appellant’s purported
‘material facts” pertaining to the Board’s failure to disclose to
members of the Association (a) “the true nature of the
controversy” herein, (b) “the exact language of the provisions in
controversy," (c) “the rationale for each provision in
controversy,” (d) the Board's position “against adoption of the
provision in controversy," (e) the Board’s “inten{tion] to use
any proxies granted to them,” and (£) that the “failure to ratify
the bylaws could mean the (AJssociation would have to bring this
controversy to the courts,” viewed in a light most favorable to
Appellant, do not raise a genuine issue of material fact that the

Board breached a fiduciary duty of disclosure owed to menbers of

 

21. seontinved)

A) Identity each portion 20 restated:

(2) Contains statement that those portions have
been restated solely for purposes of information
and convenience:

(3) Tdentify the statute, ordinance, or rule
implenented by the amenduent} snd

(4) Contain a statenent that, in the event of any

cenflict, the restated declaration or bylaws
Shall be’ subordinate to the cited statute,
Ordinance, or rule.

{c) upon the adoption of 8 resolution pursuant to
subsection (a) or (b), the restates declaration or bylaws
Shall set forth all of the operative provisions of the
Gecloration oF bylaws, a8 amended, together with a statement
that ‘the restated declaration or bylaws correctly sets forth
without change the corresponding provisions of the
Geclaration or byla snded, and that the restated
Geclaration or bylavs supersede the original declaration or
bylaws and all pricr anendeents thereto. If the restated
declaration corrects the percentage of common interest os
proviced in subsection (b), the restated declaration shel]
biso snend the recorded conveyance instrumente that govern
the unit owner's interest in the unit

(a) ‘The restated declaration or bylaws must be
recorded and, upon recordation, shall supersede the original
declaration Or bylaws and all prior anendnents thereto. In
tthe event of any conflict, the restates declaration oF
bylawe shall be subordinate to the original declaration or
bylaws and all prior anendsents therete.

 

 

 

 

 

   

 

 

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the Association, (4) in any event, there is no effective remedy
for Appellant's breach of fiduciary duties claims and the claim
that the president of the board solicited proxies in violation of

HRS § 514A-62(b) (4) (Supp. 2005),* (5) and, furthermore, such

 

+ was $ s14n-82,(b) (4) relating to “Contents of bylaws,” stated:

 

(b) tn addition to the requirenents of subsection (al,
the bylaws shell be consistent with the following
provisions:

isi" Wo resident manager or managing agent shall

Boticit, for use by the manager oF managing
agent, any proxies from any apartment omer of
fhe absocisticn of ommers that employs the
Fesigent manager or nanaging agent, nor shall
the resident manager or managing agent cast any
proxy vote at any associaticn meeting except for
the purpose of establishing a quorum. Any board
Of directors that intends to use association
funds to distribute proxies, including the
Stendara proxy form referred to in paragraph
(Si, shall first post notice of its intent to
distribute proxies in prominent locations within
the project at least thirty days prior to its
Gistribueion of proxies; provided that Sf the
board receives within seven days of the posted
request by any owner for use of
Setoctation funds to solicit proxies accompanied
By'a statenent, the board shall mail to all
Sumers esther:
Th). A’proxy form containing the names of all
owners who have requested the use of
sociation funds for soliciting proxies
accompanied by their statements) or
(B)  Acprony’ form contssning no names, But
accompanied by a list of names of al]
omers who have requested the use of

Staociatien funds for soliciting proxi

and their statements,

The statement shall not exceed one hundred
words, indicating the owner's qualifications to
Serve’ on the bosrd snd reasons for wanting to
receive proxies(-)

 

 

 

 

 

 

 

   

 

the provisions of this subsection shall be deened
incerporated into the bylaws of 211 condominium projects
existing as of January 1, 1988, and all condominium projects
Greated efter that cate

HRS § 514A-82(b) (4) was subsequently repealed by 2004 Haw. Sess. L. Act 164, §
26 at 623, Currentiy, HRS § 5148-123 (2006) entitled, "Association meetings:
voting; proxies,” governs proxies:

 
 

FOR PUBLICATION 8 WEST’§ HAWAI'I REFORTS AND PACIFIC REPORTER:

 

 

elaine do not fai1 under the exception to the mootness doctrine,
and (6) viewed in a Light most favorable to Appellant, there is
no genuine issue of material tact that the Second Restated
Bylave, adopted without the provisions disputed, are defective.

Therefore, the court properly granted Appellees! notion
for summary judgment, and properly denied Appellant's notion to
set aside the order and notion for partial summary judgaent.
Accordingly, the August 24, 2005 judgnent of the court is
attirned.

h
a

on Septenber 8, 1968, the Association was created under
the provisions of the “Horizontal Property Act,” chapter 1078,
Revised Laws of Hawai'i 1955, with the filing of its Declaration
of Horizontal Property Regine in the Bureau of Conveyances (the
Bureau). Also on that date, the Association recorded its
original bylaws with the Bureau. The original bylaws did not
restrict a resident manager of the condominium from serving on
the Board.

on June 8, 1976, the Hawai'i legislature adopted Act
238, which anended the former HRS § 514-20 entitled “Contents of
bylaws,” and added the following underscored language:

indy ‘ua cenident mamacer of 1 condoniniun shalt serve

1976 Haw. Sess, L. Act 239, § 3 at 756-59 (emphasis added). The
legislature specified that Act 239 “not affect rights and duties

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‘**+FOR PUBLICATION IN WEST'S RAWAI'T REFORTS AND PACIFIC REPORTERS

 

that matured, penalties that were incurred, and proceedings that
were begun, before [June 9, 1976).” 1976 Haw. Sess. L. Act 239,
85 5, 7 at 760.

on January 1, 1978, the legislature repealed HRS
chapter $14, “Horizontal Property Regines.” 1977 Haw. Sess. L.
Act 98, $$ 3, § at 181. Also as of January 1, 1978, HRS chapter
514A, “Horizontal Property Regimes,” was enacted as a restatement
cf HAS chapter $14, without substantive change. 1977 Haw. Sess.
L. Act 98, §§ 1, $ at 162, 181. The former HRS § 514-20 was
renunbered as HRS § 5144-82. Stand. Comm. Rep. No. 271, in 1977
Senate Journal, at 970.

on October 7, 1985, the Association recorded its “First
Amendment to the By-laws of King Manor” in the Bureau.

On January 16, 2001, the Board resolved to restate its
bylaws, entitled “Firet Restated sylaws,” pursuant to HRS § S14A-
82.2.

on February 21, 2001, the Board recorded the First
Restated Bylaws at the Bureau. The First Restated Bylaws
organized into one document all existing provisions in the
Agsociation’s original bylaws as well as the October 7, 1985
First Amendment. As pertinent here, these bylaws added Section

3.01 which provided, “No resident manager shall serve on the

 

Board of Directors,” purportedly to comply with HRS § 514A~

82(a) (14), which as stated previously, was originally adopted as
s++70R PUBLICATION IN WEST’ § HAWAI'I REPORTS AND PACIFIC REPORTER*#*
Act 239 on June 9, 1976.° 1976 Haw. Sess. L, Act 239, § at 758

59, Also on February 21, 2001, all pre-existing menbers of the
Association were mailed a copy of the First Restated Bylaws.
8.

on September 16, 2001, after the Association had
experienced problens with several of its resident managers, the
Board hired two of its existing mexbers, King and Ruby Clairmont
(Clairmont), to share the job of resident manager. AS
compensation, King was permitted to occupy the apartment provided
for the resident manager, and Clairmont received the salary of
the resident manager. While working as resident managers of the
condominium, King and Clairmont continued to serve as members of
the Board, with King continuing in his capacity as board
president.

Thereafter, Appellant, an attorney and menber of the
Association, approached the Board about Section 3.01 of the First
Restated Bylaws which as noted above states, “No resident manager
shall serve on the board of directors.“

on September 28, 2001, the Association's attorney, John
Morris (Norris), answered the Board’s inquiry as to “whether a

resident manager of a condominium project can serve on its board

5 the First Restated Bylaws included other provisions that we
purportedly added to comply with the requirements of HRS § 514A-B2(3)-
Rowever, those provisions are not at issue

 

 

< e noted above, this language was added to comply with HRS § 514A-
eae)
 

s+4P0R PUBLICATION IN WEST'S HAWAI'T REPORTS AND PACIFIC REPORTER‘

of directors.” Morris opined that as applied to the Association,
‘a resident manager of a condominium project can serve on its
board of directors.” Morris specifically concluded that (1) HRS
§ 514A-82(a) (14) only applies prospectively and, therefore, did
not apply to the Association, and (2) because HRS § 514A~
82 (a) (14) did not apply to the Association, it could not be
included in the First Restated Bylaws, restated pursuant to HRS §
514A-82.2, as it was not required by law.

on August 14, 2002, members of the Association were
sent statements from William Enriques (Enriques), King,”
Clairmont, and Kennedy, candidates for the Board.

on September 17, 2002, Appellant sent a letter to the
Board which stated that in his opinion, the Board should present
the members of the Association with the First Restated Bylaws
“for approval or disapproval at the next annual [A] ssociation
meeting.”

on October 3, 2002, the Board sent 2 letter to menbers
of the Association pertaining to “amendment to bylaws.” The

letter stated,

 

‘The Statement of King reads:

This year’s election is a critical one for King Manor.
Elther we continue the progress we have nade in recent
years, of we Tisk returning to the days when the Board of
Directors was plagued by fractious disagreements among its
enters. The Curvent nenbers of Board of Directore are
Gedicated to making King Menor a better building. I urge
S11 omere to re-elect {Claimont], [Kennedy] and me to che
board. If re-elected, I will pledge to continue my efforts
to'nake King enor a better investment for everyone

°

 

  

 
‘*APOR PUBLICATION IN WEST! S HAWAI'T REPORTS AND PACIFIC REPORTERY#

 

[Alssociation’s prior attorney in 2001, approved by
the board, and recorded, y+ A problem hes now
arisen because of certain changes which were made in
the restated bylaws, The law permite. the board to
restate the declaration and bylaws, without owner’
approval, only to include: (3) ali changes alzeady
approved by the omners) and (11) any changes zequired
Eplew., aay other changes mugt be approved by the

‘Unfortunately, the restated bylaws for Kina Manor

 

 

sroent of the owners can vote to
include those provisions in the restated bylaws. Since and
[sic) several Owners have asked that the ommers be allowed
te vote on those provisions at the annual eetingy and since
the board has agreed to that request, the issue will be
presented for 2 vote at the upcoming annual sesinar (on 15
Ecteber 2002), 20 the omners can decide.

Hor your information. the following prov:

pat can be aneroved by G5 percent of the cmners!

oarg Sotins Stat ne-residentnanacei can senis_oa the
B
or against then at the

\Se review those sections and be ready to vote for
invel meeting.

 

 

(Some enphases added and sone in original.)
At the Aesociation’s annual meeting held on October 15,
2002, the menbership voted against including the provisions from
RS § 514A-62(a) in the First Restated Bylaws, which as noted
before provided that “(nJo resident manager shall serve on the
board of directors.” Also at the October 15, 2002 annual
meeting, King, Clairmont, and Kennedy were elected to the Board.
On November 4, 2003, the Board resolved to restate the
bylaws a second time in a document entitled “Second Restated
Bylaws." As set forth by Appellant, the Second Restated Bylaws

“stripp(ed] from the bylaws the ban [regarding a resident manager

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‘+++POR PUBLICATION I8 WEST'S HAWAI'I REPORTS AND PACIFIC REPORTERS*#

serving on the Board] at the center of this controversy and other

provisions from HRS § 514-82(a) that were enacted into the

statute after the King Manor was established in 1968.”

In February 2004, Clairmont sold her apartment. she
resigned from the Board and as resident manager effective

February 7, 2004.
on March 3, 2004, Appellant filed a Verified Complaint

against Appellees praying for declaratory and injunctive relief

in Counts I through IV as follows:

1. That, [the clourt issue 2 ruling declaring that
{ihe Association's First Restated! By-Laws, recorded on
February ci. 200L, te the leasl-and valid GyeLave thar

Article iL “section 2.01, page $, restricting a resident
funager trea servine on the posrd of directors = Jeaaily

Ealid snd subsect to enforcement
21° “ohge (the cloure issue 2 ruling declaring that

notwithstending the legality of the restated By-Lawe of [the
Resociation), (Mina) az President of the Board of Directors
and former board menber and resident manager [Clairpontl, 3s
S'nenber|] of the Soard of Directors of (the Associstion],

fers without authority to assume the positicn ef resident’
anAGers unless and uotil such time, that the most current
Eecorded By-Lawe of ithe Besociation| permitted resident

Si “that Tene cloure issue s ruling declaring that
he bos

 

 

  

d, in carrying out their duties for the reasons
n'count IIT prior and, order the seats of board
who sanctioned the pricr alleged acts vacated and
the holding of 2 new election to fill the vacant seats.

ao” hat [the cloure issue a ruling declaring that

nal ind forner board member a
= rior to the cctober 2002 annus] me

Sng nullity the nomination for and election to board of
Girector seat of [King] at the October 2002 annual meeting
and, order that (Enrigues] is elected to the board of
Gizectars as ne was one of only two Valid nominations for
the three open seats on the board at the October 2002 annual

cing.

(Emphases added.) At the time of filing, the Association was

 

 

regulated under HRS Chapter 514A, “Condominium Property

a
 

FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTERS
Regimes,

 

 

On March 11, 2004, the Board recorded the Second
Restated Bylaws of the Assoctation at the Bureau pursuant to HRS
§ 514R-82.2.

By March 22, 2004, the Board hired 2 new resident
manager to replace King.

on March 29, 2004, Appellant filed his First Amended
Verified Complaint. Appellant prayed for the declaratory and
injunctive relief as requested in his Verified Complaint in
counts 1 through IV, and also added Count V in which he prayed
that the court “issue a ruling invalidating [the Association’ s]
‘Second Restated By-Laws’ filed on March 11, 2004 and recorded
after being served this declaratory action and, restoring as the
lawful governing document of [the Association] the (First
Restated Bylaws] recorded on February 21, 2001.”

On August 18, 2004, Appellant filed five separate
motions for partial summary judgment as to Counts I through V of
his Verified Complaint (as amended in his First Amended Verified

Complaint).

+ RS chapter 514A was scheduled for repeal on July 1, 2006, by 2005
Hew, Sess. Ly Act 3%, § 6 at 237, but 2006 Haw. Sess. Ly Act 273, $3) at
1145, repealed 2005 Haw. sess. 1. Act 93, § 6 at 237, deleting the repeal of
RS Chapter 514h. parts and sections of HRS chapter’ S14A that were repealed
by other acts remain repeale:

 

 

   

 

Effective July 1, 2008, Act 164 sought to “vpdate, clarity,
organize, deregulate, and provide for consistency and easy of use of the
condoninium property’ regimes law," as directed by 2000 Haw. Sess. L. Act 213.

 

2004 Haw, Sess. L. Act 164, § 1 at 7S€.. Thus, the legislature ancnded the HRS
by adding a new chapter, HAS chapter Si46, algo referred to as the
"Condominium Property Act.” 2006 Haw. Sete. Le Act 164, § 2 at 156.

  

 

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‘seefOR PUBLICATION IN WEST'S HAWAI'T REPORTS AND PACIFIC REPORTER**#
On September 14, 2004, the Association filed a

‘wenorandum in Opposition to (Appellants) Motion for Partial
Sunnary Judgment.”

on September 23, 2004, the court held a hearing on
Appellant's motions.

on October 13, 2004, the court filed its “Order Denying
[Appellant's] Motions for Partial Summary Judgment as to
[appellant's] First, Second, Third, Fourth, and Fifth Causes of

Action filed on August 18, 2004.” In the order, the court

 

2. Summary judgment as to Appellant’ s] First Cause
of Action is denied because a
suche: tors te includ Stan

Seiad iat, SLameteiah Oddy Stem gaa) (6), SAAB C0) 18) dn

s-restatenent of the Dvlawe of (the Association

Fecorded in the Bureau Of

‘a5 Document Nos 2001-023376
Zr Suamary jusgnent as to (Appellant's) Second

Couse of Action is denied becu

 

wweyances of the Stat

 

‘of Hawai

 

 

 

2 ns iste
3 Summary judgment
of Action ie denied because the

‘to INppelient’s] Third Cause

 

Ioteetine. they ask

dated February 13, 2001 and recorded in the Bureau of
Conveyances of the State of Hawsil se Document No. 2001~
02534

 

Sumary judgment as to (appellant's) Fourth
Cause of Action i denied because
facts to prove that Tk

3. Summary Judgment as to (Appellant's) Fifth Cause
of Action ie denied because the spartnent omers voted at
Eovineluce TERS §) S14a-82(0) (22), Sidhee2(@) 10), s14R~
Sora) (6), or #14A-82(a) (18) in the restatenent of the

Dulaws of” (the Assossation Ls c

Kestatenent of the bylaws to inplenent that decisions and

 

13
 

FOR PUBLICATION IN WEST’ S HAWAI'T REPORTS AND PACIFIC REPORTER*+#

 

2 require thy rm
Eelane-of (the Ressoistionl- therefore,

Licland of the Arsociation of Apartment Owners of King
Sonor, dated Maren 10, 200¢ and recorded in the Bureau of
Conveyances of the State of Hevali as Cocument No. 2008

    

Os076E were properly restated by the Board and properly
sisned by (King) on behalf of the Board.

(Bmphases added.)
On June 6, 2005, Appellees filed a “Motion for Summary
Judgment” on the basis that because the court had “ruled against
[Appellant] as a matter of law on his Motions for Partial Summary
Judgment on [Appellant's] First, Second, Third, and Fifth Causes
of Action filed herein on August 18, 2004” and “ruled against
[Appellant] on his Motion for Partial Summary Judgment on his
Fourth Cause of Action filed herein on August 18, 2004{,1”
“{t)here {were} not remaining genuine issues of material fact and
[it was] therefore entitied to the entry of summary judgment.”
On June 14, 2005, Appellant filed his “Motion to Set
Aside the Order Filed Herein on October 13, 2004 and
[Appellant's] Motion for Partial Summary Judgment as to
[Appellant’s) First Cause of Action (Restatement of Bylaws
Effective on February 21, 2001, pursuant to HRS § 514A-

82.2(b))."*

 

+ subsequentiy, cn July 6, 2005, Appellant filed his "Henorandum in
Opposition to {Appellees!) Motion for Summary Judgment .”

Also'on July &, 2005, the Association filed its “Meorandum in
Qpposition to {Appellant's} Motion to Set Acide the Order Filed Herein on
obtober 15, 2008."

On July 14, 2005, the Association f{led ite “Memorandum in Reply
to [Appellant's] Memorandum in Opposition to [Appellees’) Motion for Summary
Sodgnent Filed on June 6, 2005."

On July 15, 2005, Appellant {led his “Reply Memorandum in Support,
of [Rppellent"'s] Netich to Sét Asice the Order Filed Herein on October i3-
2004 ang for Partial Sunnary dodgnent ax to (Appellant's) First Cause of

 

u
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on duly 19, 2005, the court held a hearing on
(2) Appellees’ June 6, 2005 Motion for Summary Judgment, and
(2) Appellant's June 14, 2005 Motion to Set Aside the Order and
Notion for Partial Summary Judgment.

on August 24, 2005, the court granted Appellees’ June
6, 2005 Motion for Summary Judgment, and denied Appellant’s June
14, 2008 Motion to Set Aside the Order and Motion for Partial
Sunmary Judgment. Also on that date, final judgment was entered
in favor of Appellees and against Appellant as to all claims."

On Septenber 15, 2005, Appellant filed his Notice of
Appeal.

m.

Rppellant raises the following four points of error on

appeal:

ay) 2
‘By ruling ase setter of Lev, that

the prospective provisions in HRS § 518\-82(a) do not’ apply
to established associations that pre-date the enactrent of &
provision therein and, that HRS §"518K-82(a) (14) does not
apply to King Manor because the [A]ssociation was

etablished in Septenber of 1968 before the enactment of the

of 1976, gather than suing ona

 

   

 

provision in Ju

inpaized,

1(3)) the (court) erred in cranting summary iudament
for [AaneLlessi as tc [Ropellants) [blreach of (fiduciary
idluties claim a: there existed triable issues of material

“on September 7, 2005, Appellees filed a ‘Motion for Attorneys?
Fees and Costs.” Appellant responded on Septenber 15, 2005 with his
“Memorandum in Opposition te Appellees” Motion for Attorneys” Fees and Costs.”
on Septenber 27, 2005, Appellees filed its “Reply Menorandun” for their
Septenber 7, 2005 noticn., On Septenber 30, 2005, Appellant filed his “First
Supplenental Menorendum in Oppositicn to Motion for Attorneys’ Fees and.
Costs.” On Novenber 30, 2005, the court denied Appellees" Motion for
Attorneys’ Fees ana Coste

 

 

as
‘se+f0R PUBLICATION IN WEST'S HAWAI'T REPORTS AND PACIFIC REPORTER*#*

fact, such as whether the board acted with the utmost o
HSnate anc-asad faith towerde the senberehip when they

Sorpessiy and intentionally limites information to members
bout the controversy and effectively blocked attenpts 2
{appeilane] to nave the matter ended by way of member
Eatification of the bylaws on record at the (Bur

 

ofthe st =

 

prohibited « resicent manager from soliciting proxie:
Snd/or voting those provies at an association meeting, for,

there remained genuihe iasues of material fact, which
‘consisted of whether the jeter sent by the resident
Eatusar, seating Ris qualifications and desire to be
Feelected to he boars of directors for the contested
election held at the October 15, 2002 annual meeting, that
was included in the sane nailing as the notice of annual
Reeting and blank proxy forns,

T(4)] The tcourt! ered in oranting summery tudanent
for_1appellensi as to (Appellant“al claim chat the so-called
‘Sikp Restated vlan were defective and should be stricken
from the (Bureat), because there remained cenuine issues of

Esterial fact to be sdiudicsted, suchas Ti) wnecher the

sighing of the document by the oresident woo held 2 conflict
‘ot interest in the matter as resident aanacer, (21 whether
‘the Lack of prior board adoption of the restatenent, and (2)
whether the lack of statutory authority for the changes:

Eetlectag in the restatement, were fatal errors to che’
‘document.

(Bmphases added.)

Appellant requests that this court *(1) reverse and
vacate the [court's final judgment], (2) remand the case for
entry of an order granting partial summary judgment in favor of

[Appellant) as to Count I of the complaint . . . and {deny

 

Appellees’) motion for sunmary judgment, and (3) remand the c
for trial on all other counts.”
ut,
“an award of summary judgment is reviewed de nove unde:

the same standard applied by the circuit court.” French v.

Hawaii Pizza Hut, Inc, 105 Hawai'i 462, 466, 99 P.3d 1046, 1050

16
 

s+4P0R PUBLICATION IN WEST’ § HAWAI'I REPORTS AND PACIFIC REPORTER*

 

(2004) (citing Amfac, Inc, vs Waikiki Beachcomber Inv, Co., 74
Haw. 85, 104, 839 P.2d 10, 22 (1992)) (other citations omitted).

The standard for granting a motion for summary judgment is well

settled:

[Slunmary judgment 42 appropriate if the pleadings,
Geporitions, answers to interrogatories, and adnissions on
fhe. together with the affidavits, if any, show thae ghere
26 Sensing issue se-co-any material fact and that che
ay
fect iz material 1 proof of that fect would have the effect
of establishing of refuting one of the essential elements of
Scouse of action or defense asserted by the parties. Zhe

 

 

 

Snoving earty. In other words, we mst view all of the
Evidence and the inferences draun thererrom in the Light
frost. favorable to the party opposing the motion.

 

 

Rremer v, Weeks, 104 Hawai'i 43, $1, 85 P.34 150, 158 (2004)
(quoting Fed, Credit Union v. Keka, 94 Hawai'i 213, 221, 11 P.3d
1, 9 (2000) (citations, internal quotation marks, and some
brackets omitted)) (emphases added) .
v.
As to issue (1), applying his proffered definition of

“prospective,” Appellant maintains that resident managers have

 

been prohibited from serving on the Board (a) pursuant to HRS §
514-82) (14) since the statute's enactment on June 9, 1976, and
(b) pursuant to Section 3.01 of the 2001 First Restated Bylaws,
restated pursuant to HRS § 514A-82.2(b).'! He argues that .
because no resident manager sat on the Board prior to June 9,

1976, and the right to do so was not granted in any of the

 

bre appears that Appellant argues that Section 3.01 of the First
Restated gylave wes properly included pursuant to the restatement procedure
Th, specifically, HRS $ S1¢A-82-2(b)

 

vv
‘*9F0R PUBLICATION IN WEST’S HAWAI'I REFORTS AND PACIFIC REFORTER*#*

Association’s legal documents, no vested rights were impaired on
June 9, 1976. Thus, Appellant contends that when King “assumed
the resident manager position on September 16, 2001, without

first relinguishing his board seat, he violated the ban in HRS §

514A-82(a) (14) and Section 3.01” of the First Restated Bylaws.”

 

It is observed that “prospective” is defined as
“[elffective or operative in the future[.]” Black's Law
Dictionary 1259 (8th ed. 2004). On the other hand,

 

Ag to issue (1), Appellant contends that “HRS § 514A-82(a) applies
to established condoniniuns’ ‘prospectively’ so long as it dose not impair
vested rights,” insofar as (1) "{appellees) entirely misconstrue(a) the
meaning of the terms, ‘prospective,’” (11) “[tJhe Language of 28S § S1¢h-

62 (a), is unmistakably clear in requiring all associations to adhere to the
bylaw provisions therein,” (1i1) “(llegisiative history does not grant a total
exenption for established associations, unless one defines ‘prospective’ a
Appellees,” (iv) "(t]he correct legal definition for ‘prospective’ is
supplies by this Court in lecel precedent, (s) *(alpplying
63 Haw, 540, 692 P.2d 649 (2961) ] and T

Bet Sug wT Chanal, €2'waw. $52 (1958),] to HRS § 514R-82, [Op. attn'y Gen.
GS-6 [19951] Fela that estabiished associations are to comply with regulations
i HRS § 514a-62 unless vested rights or past transactions are affected,” (vi)
“[t]he recentiy enacted recodi fication of #RS Chapter Sita rejects
(Appeliees’} detinition for ‘prospective,’” and (vil) “(Appellees'} definition
Sor ‘prospective’ ust be rejected for it produces abeurd reavits(,]” inasmuch
as (a) “[appeliees} will make it virtually impossible for the legislature to
Fegulate practices in an established sesociaticn,” (b) *(Appeliees’]
interpretation will balkanize condominium regines across the State.

Appellant's arguments as to (i)-(1v) appear to be appropriately
summarized by‘ issues (1) (a) and (b), as designated in the text. See supra.

Ke to Appellant's argument (¥), it must be observed that
“attorney General’s opinions are highly instructive but are not bindine upon

0 104 Hawal't 98, 207 n18,

88 Fad €23, 632 n-15 (quoting Kepoo v. wateon, 87 Hawai'l 31, 99 1-3, 952
P.2d'379, 387 n.8 (1998)) (emphasis added). In 1ight of the discussion intra,
Depellant’s argument as to the attorney general opinion 48 cnpersuasive

he to Appellant’ s argument (93), Appellant cites te
wMilson, 85 Hawal'l 217, 221, 91 F.2d 300, 04 (1997), in a toctesee ae
asuerts that this “court may look to subsequent amendnente of a statute to sid
in the interpretation of @ pricr statute.” However, ‘oes not
support Appellant's assertion. Moreover, in light of the Giscusaion iofra
based on the plain language of HRS § S14h-82, as well az its legislative
history, it 18 unnecessary to address Appellant’ s sesertion.

For the sane easons es pertaining to argurent ivi), it is
unnecessary to address Appellant's argument (vii) regarding “absurd ret

      

 

   

 

 

 

    

       

  

 

 

 

  

 

ute.

 

ae
‘s+ef0R PUBLICATION IN WEST'S HAWAI'I REPORTS AKO PACIFIC REFORTERM+*

 

“retrospective” or “retroactive” is defined as “extending in
scope or effect to matters that have occurred in the past.” Id.
at 1343, This court has embraced Justice Story’s definition of a

“retrospective law":

Every statute which takes away or iapaize vested riche
acouired under existing Javs, oF crestes a new obligation,

imposes a new duty or attaches anew disability in respect
transact one of considerations sifeady past. aust be
desned xetroapective.

Graham, 63 Haw. at $45, 632 P.2d at 652 (internal quotation marks
and citations omitted) (emphasis added); see alsc Chang, 42 Haw.
at 524 (stating that “[a] retroactive or retrospective law, in
the legal sense, is one that takes avay or impairs vested rights
acquized under existing laws, or creates a new obligation,
imposes 2 new duty, or attaches a new disability in respect of
transactions or considerations already past” and that a statute
“is retroactive only when it is applied to rights acquired prior
to its enactment” (internal quotations marks and citation
omitted)).

Here, assuming arquendo that no vested rights would be
impaired as Appellant asserts, if HRS § 514A-82(a) (14) were
applied as Appellant requests, the statute would nevertheless
have “retrospective” application under this court’s established
case law. See Graham, 63 Haw. at 545, 632 P.2d at 652; see also
Chang, 42 Haw. at $31. Appellant's definition of prospective
fails to consider that even if a statute does not impair vested

rights, such 2 statute may have retrospective effect if it

a9
'+FOR PUBLICATION IN WEST’ HAMAI'I REPORTS AND PACIFIC REPORTER*®#

“creates a new obligation, imposes a new duty or attaches a nev
disability in respect to transactions or considerations already

past[.]” Graham, 63 Haw. at 545, 632 P.2d at 652 (internal
208 also

 

 

 

quotation marks and citations omitted) (emphasis added)
Chang, 42 Haw. at 534.

As set forth by Appellees, “[a) condominium property
regime is created when a developer executes and records a master
deed, declaration, and bylaws pursuant to HRS §§ 514A-20
((2006)"} and 514A~€2 [(1993)."J” Further, “(iJn drafting the
bylaws for a project, the developer's attorney must review the

section of the law that details what provisions must be written

 

into the project’s bylaws (i.e., HRS § S14A-62).” Then, “[t}he

developer's attorney writes into the project's bylaws every
provision that HRS § 5148-82 requires to be included in the

bylaws, as set forth at that specific time.” Appellees state

HRS § 5144-20 entitled “Condominium property regimes,” states,

lhenever the sole omer or sll of the ommers including

all of the lessees of = property expressly declare, through
the execution and recordstion of s master deed, Cogether
vith 2 declaration, which declaration shall ses forth th
Farticulars enumerated by section SI4AcI1, the sole owner's

their desire to subsit the property to’ the regine
ablished by this chapter, there shall thereby be
established 2 condominium property regine with respect to
the property, and thie chapter shall be applicable to the
property. If the aster ceed 1g slresdy recorded, the
recordation of the declaration if sufficient to achieve the

 

 

 

ins § 514A-81 entitied “Bylaws,” stated, “The operation of the
property shall be governed by bylaws, @ true copy of which shall be recorded
in the same manner a= the declaration. No amendment to the bylaws 43 volia,
bnless the anendnent is duly recorded." "ARS S S19M-€1 was repealed by 2004
Haw. Sess. L. Act 164, § 2€ at 813. Bylaws of condominiums are now governed
by'lins § s14b-208 (2006)

  

 

20
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that “[a]t that point, the provisions of the project documents,

including the bylaws, are fixed, and once they are recorded, they
are covenants running with the land that are agreed to by every
member of the condominium association upon the purchase of their
respective units.”

If it were said that HRS § $14A-82(a) (14) applied to
the Association, even though the Association was created on
September 9, 1968, prior to the enactment of HRS $ S14A-

82(a) (14), such an application would “impose[] a new duty or
attach{] a new disability in respect to transactions or
considerations already past[.]" Graham, 63 Haw. at 545, 632 P.2d
at 652 (internal quotation marks and citations omitted). Thus,
the statute would be given retrospective effect. See id.

vr.

But it is well settled that “all statutes are to be
construed as having only @ prospective operation unless the
Purpose and intention of the legislature to give them a
retrospective effect is expressly declared or is necessarily
implied from the language used.” Robinson v, Bailey, 28 Haw.
462, 464 (1925) (internal quotation marks and citation omitted!

sce also Ince Medeiros Testamentary Trust & Life Ins. Trust, 105

Hawai'i 284, 293, 96 P.3d 1098, 1107 (2004) (“The common law rule

 

disfavors retroactive application of laws. This rule is codified
in HRS § 1-3 (1993), which provides that ‘[nJo law has any

retrospective operation, unless otherwise expressed or obviously

2
‘++F0R PUBLICATION IN MEST’ HAMAI'T REPORTS AND PACIFIC REPORTERS

 

intended.’ (Citation omitted.)); Graham, 63 Haw. at 546, 632
P.2d at 653 ("No law has any retrospective operation, unless
otherwise expressed or obviously intended.” (Citations
omitted.)).

Former HRS § 514-20(15) and HRS § 514R-82(a) (14), on
their face, do not “expressly declare(]” or “necessarily inpl{y]”
a retrospective operation. Robinson, 28 Haw. at 464. Moreover,
the legislative history of HRS § $14-20(18) and HRS § 514R-
82(a) (14) does not “expressly declare[]” or “necessarily
implly]" a retrospective operation. Robinson, 2 Haw. at 467.
The parties do not dispute that HRS § 514A-82(a) applies
“prospectively.” Thus, HRS § 514A-62(a) is “[e]ffective or
operative in the future{,]” Black's Law Dictionary at 1259,
namely from June 8, 1976, the date on which the statute was
originally enacted under the former HRS § 514-20. 1976 Haw.
Sess. L. Act 239, § 3 at 758-59; see also Yamaguchi v. Queen's
Ned. Ctr., 65 Haw. 64, 89, 648 P.2d 689, 693 (1982) (concluding
that “the statute be given prospective effect only, as there
exists no indication in either the statutory language or the
accompanying committee reports that the legislature intended a
different result” (citation omitted)). Accordingly, because the
Association was created and its bylews recorded prior to the

enactment of the former HRS § 514-20, the bylaw requirements of

22
 

“s+APOR PUBLICATION "8 WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER*

RS § 140-82 (a) cannot be said to apply to the Association.
‘Thus, Appellant’s argument as to (1) (a) must be rejected.
vin.
As to Appellant’s argument (1) (b),"* as indicated
previously, HRS § 514A-82.2(b) stated in relevant part,

An association of apartment owners may at any tine restate

the bylaws of the association :
eas aay be der ‘sith éhe

 

  

 

Provisions of thie chapter or of any otner statute .. . by
adopted by the board of directors,
fetered oe we for all
as‘ if adopted by the vote or written consent of the
Spaftnent owners) provided that any. - . bulges restated
Porevant co thie sebsection shall adantify each portion so

Festated and shall contain a statenent that these sortiens
fave been restated solely for the curpases Of information

& hat ia aay condi

(Emphases added.) Pursuant to the plain language of HRS § 514A~

82.2(b), an association’s bylaws may be restated “to amend the

 

% —Contrastingly, HRS § S14A-€2(b), enacted on June 26, 1987, 1987
haw. Sess, tL. Act 277, $8 °2,,5 at €43-47, 16 to be applied “retrospectively.”
‘The final sentence of HRS §'514A-62(b) provides that [t]he provisions of this
Subsection shall be deemed incorporated into the bylaws of ai] condominium

es i ‘hd ali condoainium projects created
EHler that cate. (Emphasis scded-) “Shall,” as used in BRS'§ 514A-82(b), 1s
Usually construed a8 “must.”

Haval, Jos Wewai't 364, 393, 126 Pe3a‘T071, 1020 (2006) (vas used In
Hiatotes, contracts, of the like, this vord (‘shall'] is generally imperative
Gr'nandatery.” (Citation omitted.)). Hence, by using the term “shall,” the
Jegisiature mandated that the provisions of “this subsection(,]~ HRS § S14k-
aSie], are “dened incorporated into the bylaws of all condoniniuns existing
ae of Janvsry 2, 1988[.]" By virtue of this command, the statute
Unequtvoeslly inatracts that HRS § £14A-82(b) apply retrospectively and
stftend() in’ scape or effect to matters thet have occurred in the past.”

Las ‘at 1343. “In this regard, because “(t]he statutory
BASE iE Pisin end unambiguous, our sole duty 1 to give effect to its
Plain. snd cbvicus meaning.” Kepo'o v. Kane, 10€ Hawai'i 270, 265, 103 F.3d
B35, "ess (2008) (internal quotetion Barks and citation omitted).

   

 

 

 

 

 

 

Ag to Appellant’ s argusent (1) (b), Appellant asserts that the
prohibition against Fesident managers from sitting on the Board in the First
Restoted bylawe "wos but a nere formality” and that the prohibition had been

ineffect since June 8, 1976.

 

23
‘s*470R PUBLICATION IN MEST’ S HAWAI'T REPORTS AND PACIFIC REPORTER*##

 

+ ++ bylaws as may be required in order to conform with the
provisions of [HRS chapter S14A]."

However, as discussed supra, HRS § 514A-82(a) (14) does
not apply to the Association. For if it did, the provision would
have retrospective effect, despite not “expressly declar{ing)"
or “necessarily inpllying]" a retrospective operation. Robinson,
28 Haw. at 467. ‘Therefore, the addition of Section 3.01 of the
First Restated Bylaws which prohibited a resident manager from
serving on the Board vas not “required in order to conform with
the provisions of [HRS chapter S14A].” HRS § 514A-€2.2(b). The
addition of Section 3.01 in the First Restated Bylaxs exceeded
the purview of the plain language of HRS § 514A-€2.2(b) and,
thus, cannot be deemed to be included in the restatement. See
Kepo'e, 106 Hawai'i at 285, 103 P.3d at 954. Accordingly,
Appellant's argument as to (1) (b) must be rejected.

vant.

As to issue (2), Appellant essentially argues that the

fiduciary duty that the Board owed to the members of the

Association under HRS § 514A-82.4 (1993)" is “the same fiduciary

 

© ps § s14n-82.4, entitied “uty of directors," stated, Each

of epartnent owners a fiduciary duty in he

performance of the director's respontibslities. \(Eapheses added] Tt eshoule

be noted that SRS § 51¢A-82.4 was repesied by 2004 Haw. Sess. L. Act 164, 8 26
at as,

 

As of July 1, 2005, HRS § £148-106(a) entitled “Board; powers and

1" contains the same tern, “élduciary duty,” and states,

 

   

ut

 

Except as provided in the declaration, the bylaxt

subsection (bl, of other provisions of this chepter, the

board may act in all instances on behalf of the association.

In the performance of their duties, officers and menbers of

the board shall owe the association « Ziduesary duty end
(continued. ..)

 

 

24
‘s+4FOR PUBLICATION IN WEST'S HAAI'T REPORTS AND PACIFIC REPORTERY*#

 

duty . . . imposed on an agent towards his principal” and, thus,
the Board was obligated to make “full, fair, complete and timely
disclosure of all relevant and material facts.” Appellant argues
that the following “material facts,” viewed in the light most
favorable to Appellant, demonstrate the Board's breach of
fiduciary duty:

{The Board faiied) to [(a)] include an explanation 2s to the

‘Live nature of the contravergy, (BT)
‘acl Llenavage of the provisions in controversy, [el

(i3)} inform nenbers of the (Bloare’s position on the
matter, nanely,

Provisions in controversies they were in solation at the
Hine ct mas ¢ Sidaescias iat - = eli saz pembers chat

esbers for the upeoning Resting, Se-eote coun ny Siete

* katitication of the bulaua in order, to, end the
Conbtoversy and, TT] inform sembere that ¢allure to ratify
ing controversy inte the-course, and ((9))
bend se ehat_tn ag in the mi
ang possibly held by other board meabers.

(Emphases added.)
1x.

vit is @ well established rule both in Hawaii and in a
najority of the States that the relation of directors to the
corporations they represent is a fiduciary one.” Hawaiian Int’)
Eins. v. Pablo, $3 Haw. 149, 153, 488 P.24 1172, 1175 (2972)
(citations omitted). Further, “[a] corporate officer is an agent

for his corporate principal.” Wi sv. Ow 469

+ scontinued)
fenercise the degree of care and loyalty required of an
officer of director of 2 corporaticn organized under chapter
a0.
(Bephasis added.)

25
‘+*4f0R PUBLICATION JM MEST’ § HAWAI'I REPORTS AND PACIFIC REPORTER*+®

 

P.2d $83, $85 (Wash. Ct. App. 1970). Inasmuch as a condominius’ s
board of directors is similar to a corporation's board of
directors, a condominium board menber is also an agent for his
condominium principal (i.e, the membership of the association).
See Courts at Beachaate v. Bird, 545 A.2d 243, 248 (N.J. Super.
Ct. Ch. Div. 1988) (discussing “the modern corporate entity known
as the condominiun” (citation onitted)).

In this regard, Appellant asserts that “full, fair,
complete and timely disclosure of all relevant and material facts
is necessary for an agent . . . to meet his [or her] duty,” and
quotes the following:

Hawaii courts recognize that *(a]n agent's fiduciary duty

watch carries with ie the duty of
finely discleaize of eatecial cacch, 15 snong the most
Emportant cbligations sn oor Tegal

Hawai'i 162, 175, 931.26 604 thpp. (emphasis

eased) ‘hs explained by the Hawaii Supreme Court,
Wan agent 19 dubject to a duty to use reasonable efforts to
give nis principal information which is relevant to affairs
entrusted to him and whieh, as the agent has notice, the
principal would desire to have.” use, The
Kelisy, 68 Haw. 371, 377, 115 P.24 €08 (1986)

(Quoting Matsuda v. Wada, 101 F. Supp. 2d 1315, 1324 (D. Haw.
1999) (emphasis added)).

   

 

 

“Material fact,” in the context of fiduciary duti

 

is not defined by either party. In general, a “material fact” is
defined as “(a] fact that is significant or essential to the
issue or matter at hand.” Black's Law Dictionary at 629. In
this regard, as to purported material fact (a), disclosure of the
“true nature of the controversy” (i.e., the issue itself) is

apparently “significant or essential to the issue or matter at

26
[FOR PUBLICATION TN WEST'S HAWAI'I REFORTS AND PACIFIC REPORTERS**

 

hand.” Id, However, the Board’s October 3, 2002 letter to the
membership, on its face, included an explanation of the
controversy. Fact (a), therefore, is not 4 material fact
genuinely in issue for purposes of summary judgment. See Bremer,
104 Hawai'l at $1, 85 P.3d at 158.

With regard to facts (b) and (c), HRS $ 514A—
82(b) (2) (B) stated in pertinent part, that “[t]he proposed
bylaws, rationale, and ballots for voting on any proposed bylaw
shall be mailed by the board of directors to the owners . . . for
vote or written consent without change[.]" Contrary to
Appellant’s argument, (b) is not a genuine issue, see Bremer, 104
Hawai'i at 51, 85 P.3d at 158, because the membership was
directed to the language of the provisions in controversy, as
indicated by the Board’s October 3, 2002 letter, stating, "You
should already [sic] copies of the restated bylaws{.)”
Similarly, (c) is not @ genuine issue, see id., because the
menbership was also provided the rationale behind the vote within
the same October 3, 2002 letter, which stated, “Several apartment
owners have asked that the owners be allowed to vote at the
upcoming annual meeting to approve the restated bylaws. The
board has agreed to that request and authorized this letter to
provide some background on the request.”

With regard to purported factual issues (d), (e) and
(£), Appellant fails to cite to any evidence in the record, any

case law, or any statute to support his claims, nor to establish

2
 

how his allegations vould amount to “material facte” requiring

disclosure. In that regard, “[t]his court is not obligated to
sift through the voluminous record to verify an appellant's
inadequately documented contentions.” Lanai Co. v. Land Use
Comm'n, 105 Hawai'i 296, 309 n.31, 97 P.34 372, 385 n.31 (2004)
(citations omitted). Accordingly, Appellant fails to demonstrate
that genuine issues of material fact exist with respect to
purported material facts (d), (e), and (f). See Bremer, 104
Hawai'i at 51, 85 P.3d at 158.
x

Finally, with regard to item (g), BRS § $14A-82(b) (5)

(Supp. 2005) stated,

A director who hee a conflict of interest on any sesue
Before the bourd

ull disclose the nature of the conflict
si interest srior to ¢ vote on that issue at the Doara
Binites of the meeting shall record the

esting, and the

act that disclosure wae BagsT)

(Emphases added.) The phrase “conflict of interest” was not
defined in the statutes in existence at the time of the October
15, 2002 Annual Meeting. However, the phrase is defined as “[al
real or seeming incompatibility between one’s private interests
and one’s . . . fiduciary duties.” Black's Law Dictionary at

319. Appellant argues King “{plersonally benefitted from his

 

 

Tt should be noted that HRS § 5148-125(£) (2006), entitied
eetings” states in relevant part,
“conflict of interest”, as used in this subsection, means an
issue in which s director has s dizect personal or pecuniary
interest not conon to cther mesbers of the association

general definition found in Black's Law

 

This definition is consistent with
Dictionary quoted above.

28
 

seepOR PUBLICATION IN WEST'S HAWAI'T REPORTS AND PACIFIC REFORTER®

See

dual roles as @ compensated resident manager and a board menber.”

Although HRS § $148-82(b) (5) refers to a “board
meeting,” the Board should have disclosed King's potential
conflict of interest to the membership prior to the menbership’s
vote on the issue. As Appellant argues, the Board’s October 3,
2002 letter to the menbership did not do this, and the minutes of
the October 15, 2002 Annual Meeting failed to “record the fact
that 2 disclosure was made.”

xt,

But in connection with purported material facts (a)-
(g), Appellees contend that regardless of any alleged breach of
fiduciary duty by the Board, “(t]he issue is now moot (because
olver three years have passed and three elections for the Board
have been held since the 2002 annual meeting of the
Aesociation(.1" The court did not render @ decision as to
Appellees’ mootness argument.

Appellees cite Adams v. Nevers, 620 N.B.2d 1298 (I11.
app. Ct. 1993), to argue that “{e]hallenges to a private
association's election are generally mooted by the occurrence of
subsequent elections." In Adams, the Appellate Court of Illinois
noted that the plaintiffs did not disagree with the general
principle that “challenges to a private association's election
are mooted by occurrence of subsequent elections|[,]” but argued
that “the ‘public interest exception’ to the mootness doctrine

should allow them to pursue their claim.” Id. at 1305-06 (citing

29
‘+APOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER'*#
Kohan v. Rima children, 430 N.E.2d 139, 141-

42 (ILL. App. Ct. 1961) ("Since the 1981 election has already
taken place, it has ineluctably rendered moot the 1980
controversy, which is the only election involved in this appeal.”
(Citations omitted.))).

‘This court has said,

Tt is established in Hawai'i that a case 1s moot where the
question co be determined is abstract and does not rest on
Seisting facts or rights. Thus, the mootness doctrine 13
properly invoked where evente nave so affected the relations
Betheen the parties that the two conditions for
Susticiability relevant on appeal ~~ adverse interest and
tftective renedy ~~ have been conpronised.
Okada Trucking Co, v. Bd, of Water Supply, 99 Hawai'i 191, 195-
96, 53 P.3d 799, 803-04 (2002) (brackets, internal quotation
marks, ellipses, and citations omitted). Applying the foregoing
in the instant case, subsequent events have “so affected the
relations between the parties” that there is no longer an
effective remedy for Appellant's claims.” Id, (internal

quotation marks and citations omitted). By the time Appellant

 

filed his complaint on March 3, 2004, almost one-and-a-half years

after the October 15, 2002 Annual Meeting, the next annual

 

% tn his Reply Brief, Appellant raises the following argument in
response to Appellees’ mostness argunent

Upon prevailing, {Appellant} in part will seek fines,
Pegular and punitive damages, and an order removing
(Sndividvel Appellees) from office end barring their
participation fron board activities for a specified period
SF tine.

However, insofar as Appellant's statenent concerns procedural
measures he intends to take upen the determination and completion of the
teuis not a part of this appeal. Accordingly, whether the
precesing statenent amounts to sn “effective tenady" need not be addressed.
Eee Okada, 99 Nawel't at 195-96, 53 P.3d at 803-04 (internal quotation marks

 

 

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ee
meeting had taken place, King was no longer board president, and

Clairmont had left the Board and the Association. Also, within 2
week of Appellant's complaint, the Second Restated Bylaws were
recorded, and within a month, 2 new resident manager had been
hired to replace King. For the foregoing reasons, Appellant's
request for a “declaratory ruling stating that the individual
[Appellees] of the Board failed to meet their fiduciary duties”
with regard to the October 15, 2002 Annual Meeting is no longer
an “effective renedy."* Id, (internal quotations marks and
citations omitted).

However, this court has said that “an exception to the
noctness doctrine [exists] in cases involving questions that
affect the public interest and are ‘capable of repetition yet
evading review."" Id, at 196, 53 P.3d at 804 (citations
omitted). Here, Appellant's second issue on appeal does not fall
under the exception. See id, As to the public interest, first,
the matter is apparently private in nature inasmuch as it

concerns a dispute within a private condominium association.

 

Second, it is not necessary in this case to decide Appelle
alleged breach of fiduciary duty for the guidance of future
public officers, Inasmuch as the question of @ breach is based
on factual circumstances particular to every controversy, a
determination in this case would likely provide only limited

guidance to public officials in the future. Finally, any

 

% —tnesmuch as there is no effective remedy, the other factors need

 

31
 

4s+470R PUBLICATION IN WEST! § HAWAI'I REPORTS AND PACIFIC REPORTER***

perceived ambiguity in HRS § 514A-82.4 is remedied by HRS § 5148~

106 (2006),” which clearly delineates what a condominium board's
fiduciary duty entails. Accordingly, Appellant's breach of
fiduciary duty claim is moot.
xrI.

Ag to issue (3), Appellant contends that “[v]iewing the
{August 6, 2002 ‘statement of Irvin King’) letter sent by [King]
in his reelection bid to the board in the light most favorable to
(appellant,] . . . [King] solicited proxies in violation of HRS §
514A-82(b) (4)." HRS § 514K-82 does not define “proxy” or
“solicitation,” however, @ “proxy solicitation” is generally
defined as “[a] request that a corporate shareholder authorize
another person to cast the shareholder’s vote at 2 corporate
meeting.” Black's Law Dictionary at 1263.

on its face, King’s statement does not explicitly
solicit proxies. However, Appellant asserts that “[a]
communication to shareholders may constitute a proxy
solicitation, even if it does not contain an express request for
aproxy, if it is part of a continuous plan intended to end in
solicitation and to prepare the way for success.” (Quoting
‘Shamrock Holdings, Inc, v. Polaroid Corp., 709 F. Supp. 1311,

BRS § $148-106(a) (2006) entitled “Board; powers and duties,”
states An relevant part,

 

In the performance of their duties, officers and menbers of

 

 

(Emphesie added.)
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a
1327 (D. Del. 1989) (internal quotation marks and citations

omitted) (emphases added)). According to Appellant, “the purpose
of the communication and the circumstances present, [also] need
to be taken into account in determining if @ solicitation
occurred{.]” In this regard, Appellant maintains that King
submitted his statement specifically because he intended to
solicit proxies in compliance with HRS § 514A~62(b) (4) (B).*

As indicated supra, however, Appellees argue that
“{zjegardless . . . of any alleged solicitation of proxies by

. King in 2002, the issue is now moot [because o]ver three
years have passed and three elections for the Board have been
held since the 2002 annual meeting of the Association[.]” For
the reasons stated supra, Appellant’s contention as to issue (3)
is also moot.
XIII.

As to issue (4), Appellant contends that the Second
Restated Bylaws are “premature and defective” inasmuch as the
Second Restated Bylaws (a) “were not previously adopted by a
majority of board members present at a duly called meeting of the
board, as is required of all association actions, and HRS § 514A-
82.2(b)," (b) was “signed by the president/resident manager,

who held an undisclosed conflict of interest” because “[hJe stood

to personally benefit because the altered bylaws stripped the

® see gunra note ¢

 

this reflects Appellant's entire argument as to (4) (a)

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provision banning him as the resident manager from sitting on the

 

board,” and (c) “did not comply with HRS § 514A-82.2(b), which
requires that any changes to bylaws pursuant to the board acting
alone and without prior association approval, must include within
the bylaws, the legal authority for the changes made to the
bylaws.

With regard to argument (4) (a), Appellant's contention
that the Board had not previously adopted the Second Restated
Bylaws prior to recordation at the Bureau is not properly
preserved for review by this court, insofar as it is advanced for
the first time on appeal. See State v, Moses, 102 Hawai'i 449,
456, 17 P.3d 940, 947 (2003) (“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.” (Citations omitted.)). Moreover, Appellant's
allegation is not supported by reference to the record.
Accordingly, Appellant’s argument (4) (a) is waived. See Tauese

State, Dept, of Labor & Indus. Relations, 113 Hawai'i 1, 26,

147 P.3d 785, 810 (2006) (stating that “[tJhis court may

 

‘disregard [2] particular contention’ if an appellant ‘makes no
discernable argument in support of that position’” (quoting

Norton v. Admin, Dir, of the Court, 80 Hawai'i 197, 200, 908 P.2d

545, 548 (1995) (citations omitted)) (brackets in original)).

% this reflects Appellant's entixe argunent as to (4)(b).

 

‘This reflects Appellant's entire argument as to (4) (c)

 

34
‘s+4POR PUBLICATION IN WEST'S HAWAI'T REPORTS AND PACIFIC REPORTERS**
SSS
As to argument (4) (b), Appellant asserts that King

“stood to personally benefit because the altered bylaws stripped
the provision banning him as the resident manager, from sitting
on the board of directors.” Appellant does not cite any
authority, statutes, or parts of the record to support his
argunent. Thus, Appellant's argument as to (4) (b) is waived.
see id. Moreover, as previously discussed, the provision
restricting a resident manager from serving on the Board was
included in the Association's First Restated Bylaws, but should
not have been included pursuant to HRS § S14A~82.2, See supra.

Lastly, with regard to argument (4) (c), HRS § 514-
82.2(b), to reiterate, stated in pertinent part,

[ajny declaration of condominium property regime or bylaws
restated pursuant to this subsection
on eb pd ona stat tho

Portions hive been festated solely tor curposss of
Sforition ane convenience: identifying the statute

She that in the event of any conflict, the
Geclaraticn or bylaws shall be subordinate &
Statute, ordinance, rule, or regulation.

 

 

(emphasis added.) Contrary to Appellant's claim, the Second
Restated Bylaws’ endnotes “identify each portion so restated” as
well as “identifiy) the statute . . . implemented by the
amendnent” (€.a4, “(4) This Section 3.05 was amended to comply
with Section $14A-62(b) (1), Hawai'i Revised Statutes, as
amended”). HRS § $14A-62.2(b). For the foregoing reasons,
Appellant's argunent with respect to issue (4) fails to

demonstrate @ genuine issue of material fact exists that the

35
‘s*+F0R PUBLICATION I WEST’ § HAWAI'T REPORTS AND PACIFIC REPORTER*+#

 

Second Restated Bylaws are defective. See Bremer, 104 Hawai'i at
51, 85 P.3d at 158.
xiv.
Accordingly, the August 24, 2005 judgment of the court

is affirmed.

on the briefs: It”

Michael J. Park, Glenn 7. .
Taniguchi, and Peter YL: Mie A Lamar
Pong for plaintiff:

appeliont. entee Care) sre

John A. Morris and
Gordon 'M. Arakaki
(Bkimoto € Morris) for

defendants-appellees.