State: Hawaii
Volume: 140
Term: None-None
Jurisdiction(s): Hawaii
Source: https://static.case.law/haw/140.pdf

a \

LI Ly
395 P.3d 333 395 P.3d 333
STATE of Hawai‘i, Respondent/Plaintiff- Thomas GILLIGAN and Sharon Gilligan,
Appellee, Plaintiffs-Appellees,
ve ve
Theodorico ERUM, Jr., Charles CARR and Carol Hall,
Petitioner/Defendant- Defendants-Appellants
Appellant.

NO. CAAP-12-0000008
Intermediate Court of Appeals of Hawai'i.
May 25, 2017

May 19, 2017 APPEAL FROM THE DISTRICT
CERTIORARI TO THE INTERMEDI- COURT OF THE SECOND CIRCUIT (DC-
ATE COURT OF APPEALS (CAAP-15- CIVIL NO. 11-1-2941)
0000181; CASE NO. 5DCC-14-0000212)

SCWC-15-0000131

Supreme Court of Hawaiti.

SUMMARY DISPOSITION ORDER

Affirmed.

SUMMARY DISPOSITION ORDER
Vacate. Remand.

395 P.3d 333

395 P.3d 333 STATE of Hawai‘, Plaintiff-Appellee,

STATE of Hawai‘i, Plaintiff-Appellee, v.
AG Dennis GOUVELA, Jr., Defendant-
Jesus SALAS, Defendant-Appellant Appellant.
NO. CAAP-16-0000116 NO. CAAP-16-0000466
Intermediate Court of Appeals of Hawai'i, Intermediate Court of Appeals of Hawai‘.
May 24, 2017 May 25, 2017

APPEAL FROM THE CIRCUIT COURT APPEAL FROM THE FAMILY COURT
OF THE FIRST CIRCUIT (CR. NO, 14-1. OF THE FIRST CIRCUIT (FC-CR NOS.

0447) 08-1-1275, 09-1-2226, 12-1-1238, 12-1-1404)
MEMORANDUM OPINION SUMMARY DISPOSITION ORDER
Vacate. Remand. Vacate. Remand,

2 EE

Lt SUMMARY DISPOSITION ORDER

395 P.3d 334 Affirmed,

CREDIT ASSOCIATES OF MAUI,
LTD., a Hawaii corporation,
Plaintiff-Appellee,!

v

William K. FREITAS and Cindy K.
Freitas, Defendants-Appellants

and

Pa‘a Pohaku Builders, Inc., Defendant .
NO, CAAP-13-0001182

Intermediate Court of Appeals of Hawai‘.

DATED: Honolulu, Hawai'i, May 26, 2017

395 P.3d 334
Mukadin GORDON, Plaintiff-Appellant,
v

Jodie F, MAESAKA-HIRATA; Francis Se-

APPEAL FROM THE DISTRICT  quiera; William Rushing; Faatuila Pula;

COURT OF THE THIRD CIRCUIT, — Petra Cho; Michael Taamilo; Aaron Mi-

NORTH AND SOUTH KONA DIVISION  rafuentes; Gene Pomeroy; State of Ha-
(CASE NO. 8RO12-01-112K) waii, Defendants-Appellees,

SUMMARY DISPOSITION ORDER and

Affirmed. John and/or Jane Does 1-10, Defendants

NO. CAAP-14-0000914
Intermediate Court of Appeals of Hawai'i.

DATED: Honolulu, Hawai'i, May 80, 2017.

r] APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIRCUIT (CIVIL NO, 11-
395 P.3d 334 1-2482-10 (ECN))

James K. LIBERO, Petitioner-Appellant,
vw
STATE of Hawai‘i, Respondent-Appellee Affirmed,
NO, CAAP-16-0000528
Intermediate Court of Appeals of Hawai'i,
DATED: Honolulu, Hawai'i, May 26, 2017.

APPEAL FROM THE CIRCUIT COURT
OF THE SECOND CIRCUIT (.P.P. NO.
16-1-0005(2); CR. NO. 98-0697(2))

1, On December 9, 2013, the request by the Office the plaintiff-appellee in place of Credit Associates
of Hawaiian Affairs (“OHA”) to be substituted as of Maui, Ltd. was approved.

MEMORANDUM OPINION

i '
395 P.3d 335, 395 P.3d 335
Dale E. TAYLOR, Sr., Petitioner- STATE of Hawai‘, Plaiintiff-Appellee,
Appellee, ¥
* Ian J, DEMING, Defendant-Appellant

Gared SAXBURY, Respondent-Appellant
NO, CAAP-15-0000821

NO. CAAP-16-0000298

Intermediate Court of Appeals of Hawai‘.
Intermediate Court of Appeals of Hawai'i
ediate Court of Appeals of Hawai, DATED: Honolulu, Hawai, May 81, 2017.

DATED: Honolulu, Hawati 1, 2017,

‘D: Honolua, Hawai, May $1, 2017. ppmat, FROM THE DISTRICT
APPEAL FROM THE DISTRICT COURT OF THE FIRST CIRCUIT,
COURT OF THE THIRD CIRCUIT (CIV. KANE’OHE DIVISION, (CASE NO. 1DTA-

IL NO, 14-1-149K) 15-08980)
SUMMARY DISPOSITION ORDER SUMMARY DISPOSITION ORDER
Vacated. Remanded. Affirmed,
1 '
395 P.3d 335 395 P.3d 335

STATE of Hawai‘, Plaintiff-Appellee,
ve

Dustin F.K, DAWSON, Defendant-
Appellant

NO, CAAP-16-0000378
Intermediate Court of Appeals of Hawaii.
DATED: Honolulu, Hawai'i, May 31, 2017.

APPEAL FROM THE DISTRICT
COURT OF THE FIRST CIRCUIT, HON-
OLULU DIVISION, (CASE NO. 1DCW-15-
0000082)

STATE of Hawai‘i, Plaintiff-Appellee,
ve

Clarence L, MONTALVO, III,
Defendant-Appellant,

NO, CAAP-16-0000198
Intermediate Court of Appeals of Hawai‘,
DATED; Honolulu, Hawai'i, May 31, 2017,

APPEAL FROM THE CIRCUIT COURT
OF THE SECOND CIRCUIT (CR. NO, 07-
1-0686)

SUMMARY DISPOSITION ORDER
Affirm,

SUMMARY DISPOSITION ORDER
Affirmed.

395 P.3d 336 395 P.3d 336
Desmond J. LEWI, Petitioner-Appellant, STATE of Hawai‘i, Plaintiff-Appellee,
ve ve
STATE of Hawai‘i, Respondent-Appellee Christine KIM, Defendant-Appellant.
NO. CAAP-16-0000090 NO, CAAP-16-0000581

Intermediate Court of Appeals of Hawaii.
DATED: Honolulu, Hawai'i, May 31, 2017.

APPEAL FROM THE DISTRICT
COURT OF THE FIRST CIRCUIT (HON-
OLULU DIVISION) (CASE NO. 1DTA-15-

Intermediate Court of Appeals of Hawai‘.
DATED: Honolulu, Hawai'i, May 31, 2017.

APPEAL FROM THE CIRCUIT COURT
OF THE THIRD CIRCUIT (S.P.P. NO. 15-

1-0008 (CR. NO. 08-1-0483)) 04670)
SUMMARY DISPOSITION ORDER MEMORANDUM OPINION
Affirmed, Affirm.

395 P.3d 336

LJ BANK OF AMERICA, N.A., Successor by
merger to BAC Home Loans Servicing,

595 P.3d 336 LP fka Countrywide Home Loans Ser-
STATE of Hawai‘i, Plaintiff-Appellee, vicing, LP, Plaintiff-Appellee,
v. Y.
Kim T. SANICO, Defendant-Appellant Dianna Nalani KUPAHU,
NO. CAAP-16-0000166 Defendant-Appellant

id
Intermediate Court of Appeals of Hawai'i. an

Hale Aupuni Community Association,

DATED: Honolulu, Hawai'i, May 81, 2017. Defendant-Appellee,
APPEAL FROM THE DISTRICT and
COURT OF THE SECOND CIRCUIT .
(CASE NO, 2DTA-15-01416) John Does 1-50; Jane Does 1-50; Doe Part-

nerships 1-50; Doe Corporations 1-50;
Doe Entities 1-50; and Doe Governmen-
SUMMARY DISPOSITION ORDER tal Units 1-50, Defendants

Vacate. And remand. NO, CAAP-15-0000447

Intermediate Court of Appeals of Hawai'i.
DATED: Honolulu, Hawai'i, June 6, 2017

APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIRCUIT (CIVIL NO, 12-
1-2882)

SUMMARY DISPOSITION ORDER

SUMMARY DISPOSITION ORDER

Affirmed,

395 P.3d 337
STATE of Hawai‘i, Plaintiff-Appellee,
Vv.

Carl LEDUNE, Defendant-Appellant.
NO. CAAP-16-0000549
Intermediate Court of Appeals of Hawai‘.
DATED: Honolulu, Hawai'i, June 9, 2017.
APPEAL FROM THE CIRCUIT COURT

OF THE THIRD CIRCUIT (OR. NO. 15-1-
186K)

Affirm,

Ly |
395 P.3d 1240 395 P.3d 1240
STATE of Hawai‘, Plaintiff -Appellee, STATE of Hawai‘, Plaintiff-Appellee,
ve ve
Ryan-Seth KIAHA, Defendant-Appellant Alex M. TANIGUCHI, Defendant-
Appellant

NO. CAAP-16+
0000182 NO, CAAP-16-0000494

Intermediate Court of Appeals of Hawaii, 1, mediate Court of Appeals of Hawai,
DATED: Honolulu, Hawati, May 80, 2017 py anrep: Honolulu, Hawai, June 8, 2017,

APPEAL FROM THE CIRCUIT COURT APPEAL FROM THE DISTRICT

OF THE FIRST CIRCUIT (CR. NO. 181- QouRT OF THE FIRST CIRCUIT, HON.
1058) OLULU DIVISION, (CASE NO. 1DTA-15-
04479)
SUMMARY DISPOSITION ORDER

Vacated and, Remanded. SUMMARY DISPOSITION ORDER
Vacated and. Remanded.

' '
395 P.3d 1240 395 P.3d 1240
STATE of Hawai‘, Plaintiff-Appellee, STATE of Hawai'i, Plaintiff-Appellee,
ve ve.
Michael HOFFMAN, Defendant-Appellant Matthew K, HAILI, also known
as Matthew K, Haili, Jr.,
NO, CAAP-16-0000554 Defendant-Appellant
Intermediate Court of Appeals of Hawaii, NO. CAAP-16-0000087

DATED; Honolulu, Hawai'i, June 7, 2017, Intermediate Court of Appeals of Hawaii.
APPEAL FROM THE DISTRICT DATED: Honolulu, Hawaii, June 9, 2017.
COURT OF THE FIRST CIRCUIT ‘EWA APPEAL FROM THE FAMILY COURT

DIVISION (CASE NO. 1DTA-12-05252) OF THE FIRST CIRCUIT (FC-CR, NO,
161-2040)
SUMMARY DISPOSITION ORDER

Vacated and, Remanded, SUMMARY DISPOSITION ORDER
Affirmed,

a ’

Ly L
395 P.3d 1241 395 P.3d 1241
STATE of Hawai‘i, Plaintiff-Appellee, Christina K. CLARKE, Petitioner-
¥ Appellant,
Benjamin EDUWENSUYI, v
Defendant-Appellant. Kona WONG, Respondent-Appellee.
NO, CAAP-16-0000558 NO. CAAP-16-0000500

Intermediate Court of Appeals of Hawai‘. Intermediate Court of Appeals of Hawai'i,
DATED; Honolulu, Hawai'i, June 9, 2017, DATED: Honolulu, Hawai'i, June 14, 2017.

APPEAL FROM THE DISTRICT APPEAL FROM THE FAMILY COURT
COURT OF THE FIRST CIRCUIT (HON- OF THE FIFTH CIRCUIT (FC-DA NO, 16-
OLULU DIVISION) (CASE NO. 1DTA-16- 1-0084)

00425)

SUMMARY DISPOSITION ORDER
SUMMARY DISPOSITION ORDER Affirmed.

395 P.3d 1241

U.S, BANK TRUST, N.A. as trustee
| for LSF9 Master Participation
395 P.3d 1241 Trust, Plaintiff-Appellee,
STATE of Hawai'i, Plaintiff-Appellee, ve
ve Helen Tolentino BUSTO, Defendant-
Appell:
Emyrose WELLE, Defendant-Appellant, 'PPe _
NO. CAAP-16-0000594 an
. we Association of Apartment Owners
Intermediate Court of Appeals of Hawai'i, of Ko‘olani, Inc, Defendant-
DATED: Honolulu, Hawai'i, June 9, 2017, Appellee,
APPEAL FROM THE DISTRICT and

COURT OF THE THIRD CIRCUIT (CASE John Does 1-10, Jane Does 1-10, Doe Part-

NO. 3DTA-15-03558) nerships 1-10, Doe Corporations 1-10,
Doe Entities 1-10, and Doe Governmen-
SUMMARY DISPOSITION ORDER tal Units 1-10, Defendants.

Vacate. And remand. NO. CAAP-16-0000334
Intermediate Court of Appeals of Hawai'i,
DATED: Honolulu, Hawaii, June 14, 2017.

APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIRCUIT (CIVIL NO, 14-
12505)

|
SUMMARY DISPOSITION ORDER Hi
Vacate. Remand. 395 P.3d 1242
CW, Plaintiff-Appellant,

| | *
DW, Defendant-Appellee.

1 NO, CAAP-16-0000674
395 P.3d 1242 Intermediate Court of Appeals of Hawai‘.
STATE of Hawai‘, Plaintiff-Appellee, DATED: Honolulu, Hawai'i, June 16, 2017.

APPEAL FROM THE FAMILY COURT
OF THE FIFTH CIRCUIT (FC-D NO. 13-

1-0002)

ve
Michael YELLEN, Defendant-Appellant
NO, CAAP-16-0000617
Intermediate Court of Appeals of Hawaii.
DATED: Honolulu, Hawai'i, June 15, 2017. ‘Affirm,

APPEAL FROM THE DISTRICT
COURT OF THE THIRD CIRCUIT (CASE
NO. 8DTI-16-010565)

SUMMARY DISPOSITION ORDER

SUMMARY DISPOSITION ORDER
Affirmed.
Ll
STATE of Hawai'i, Plaintiff-Appellee,

] ve

395 Pad 1242 Dustin K. PIHANA, Defendant-Appellant

In the MATTER OF PC NO, CAAP-15-0000536
NO, CAAP-15-0000015 Intermediate Court of Appeals of Hawaiti.
DATED: Honolulu, Hawai'i, June 16, 2017.

Intermediate Court of Appeals of Hawai'i.
DATED: Honolulu, Hawai, June 15,2017, _ APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIRCUIT (OR. NO. 18-1-
APPEAL FROM THE FAMILY COURT 1067)
OF THE FIRST CIRCUIT (FO-M NO. 14

16971) MEMORANDUM OPINION

SUMMARY DISPOSITION ORDER Affirm.

Affirmed.

ee ,

LI Ly
395 P.3d 1243 395 P.3d 1243
STATE of Hawai‘, Plaintiff-Appellee, MN, Petitioner-Appellee,
ve ve
Duane Kaapea KAAIALII, AN, Respondent-Appellant
Defendant-Appellant

NO. CAAP-16-0000585

Intermediate Court of Appeals of Hawai'i.
Intermediate Court of Appeals of Hawai'i.
DATED: Honolulu, Hawai'i, June 20, 2017.

DATED: Honolulu, Hawai‘, June 19, 2017.
APPEAL FROM THE FAMILY COURT
APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT (FC-DA NO. 15-
OF THE FIRST CIRCUIT (CR. NO. 15-1- 1.9511)
1718)

NO. CAAP-16-0000417

SUMMARY DISPOSITION ORDER

SUMMARY DISPOSITION ORDER

Affirmed.
Affirm.
395 P.3d 1243 395 P.3d 1243
STATE of Hawai‘, Plaintiff-Appellee, GF, Appellant-Appellant,
ve ve
Stacey Ann Yoshie NAGATA, DEPARTMENT OF HUMAN SERVICES,
Defendant-Appellant State of Hawai‘i, Appellee-Appellee
NO. CAAP-16-0000548 NO. CAAP-14-0000890

Intermediate Court of Appeals of Hawaii. Intermediate Court of Appeals of Hawai‘.
DATED: Honolulu, Hawaii, June 20, 2017. DATED: Honolulu, Hawai'i, June 20, 2017.

APPEAL FROM THE DISTRICT APPEAL FROM THE CIRCUIT COURT
COURT OF THE FIRST CIRCUIT, HON- OF THE FIRST CIRCUIT (CIVIL NO, 14-
OLULU DIVISION, (CASE NO. 1DTI-16-  1.0485-02)

008724)

SUMMARY DISPOSITION ORDER
Affirmed.

SUMMARY DISPOSITION ORDER
Reversed.

10
Lt

395 P.3d 1244

LaVonne HARRISON, Trustee of La-
Vonne’s Family Trust, a Revocable Liv-
ing Trust Agreement dated September
28, 1989, Plaintiff/Counterclaim Defen-

dant/Appellant,
Y

CASA DE EMDEKO, INCORPORATED,
a Hawaii nonprofit corporation, Defen-
dants/Counterclaim Plaintiff/Appellees

and

John Does 1-10; DOE Corporations 1-10;
and DOE Entities, Defendants

NO. CAAP-15-0000744
Intermediate Court of Appeals of Hawai'i.
DATED: Honolulu, Hawaii, June 20, 2017.

APPEAL FROM THE CIRCUIT COURT
OF THE THIRD CIRCUIT (CIVIL NO, 18-

1-158K)
SUMMARY DISPOSITION ORDER

Remand.

|
395 P.3d 1244
Arley H. NOZAWA, Plaintiff-Appellant,
v
OPERATING ENGINEERS LOCAL
UNION NO. 8, Defendant-
Appellee,
and
John Does 1-5, Jane Does 15, DOE Cor-
porations 1-5, DOE LLCS 1-5, DOE
Partnerships 1-5, DOE Non-profit Or-
ganizations 1-5 and DOE Governmental

Agencies 1-5, Defendants

NO. CAAP-14-0000021
Intermediate Court of Appeals of Hawai'i.
DATED: Honolulu, Hawai'i, June 21, 2017.

APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIRCUIT (CIVIL NO, 11-

1-2623-10)

MEMORANDUM OPINION”

Affirmed.

395 P.3d 1244

STATE of Hawai‘i, Plaintiff-Appellant,

ve

Curtis K. LOVE, Defendant-Appellee

NO. CAAP-16-0000561

Intermediate Court of Appeals of Hawai‘.
DATED: Honolulu, Hawaii, June 21, 2017.

APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIRCUIT (CRIMINAL

NO, 15-1-1975)

SUMMARY DISPOSITION ORDER

Vacate. Remand,

LJ
395 P.3d 1244
STATE of Hawai'i, Plaintiff-appellee,
Y.

GJ WILLIANDER, Defendant-appellant
NO. CAAP-15-0000759
Intermediate Court of Appeals of Hawaiti.
DATED: Honolulu, Hawai'i, June 21, 2017.

APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIRCUIT (CR. NO. 14-1-

1212)

SUMMARY DISPOSITION ORDER

Affirmed.

12 Li
| | SUMMARY DISPOSITION ORDER
396 P.3d 1150 Affirm.
James MUSCARELLA, Plaintiff-Appellee,
ve

STAR BEACH BOYS, INC.
Defendant-Appellant,

and 1

John Does 1-5; Jane Does 1-5; DOE Corpo-
rations 1-5; DOE Partnerships 1-5; DOE 396 P.3d 1150
Non-profit Organizations 1-5; and DOE Kenneth S.G.A. LEE, Plaintiff-appellant,

Governmental Agencies 1-5, Defendants v
NO. CAAP-15-0000398 Routh Crabtree OLSEN, P.S.; Derek W.C.
Intermediate Court of Appeals of Hawai‘. Wong, Defendants-appellees,
JUNE 30, 2017 and
APPHAL FROMTHE CIRCUIT CoURT DOH Defendants 1.50, Defendants.

OF THE FIRST CIRCUIT (CIVIL NO, 18- NO, CAAP-14-0001092
1-1712) Intermediate Court of Appeals of Hawaii.
DATED: Honolulu, Hawai'i, June 22, 2017,

SUMMARY DISPOSITION ORDER
Affirmed, APPEAL FROM THE CIRCUIT COURT
OF THE THIRD CIROUIT (CIVIL NO, 18-

S| -
SUMMARY DISPOSITION ORDER

Affirm,

396 P.3d 1150 | |

Brian D. BAILEY, Plaintiff-appellant,

ve
Routh Crabtree OLSEN, P.S; RCO a
Hawai‘i, LLLC; Derek W.C. Wong, 396 P.3d 1150
Defendants-appellees, STATE of Hawai‘i, Plaintiff-appellee,
and ve
DOE Defendants 1-50, Defendants. Charles LEE, Defendant-appellant
NO. CAAP-14-0000874 NO. CAAP-14-0001107

Intermediate Court of Appeals of Hawai‘. Intermediate Court of Appeals of Hawaiti.
DATED: Honolulu, Hawai‘, June 22, 2017. DATED: Honolulu, Hawai'i, June 23, 2017.

APPEAL FROM THE CIRCUIT COURT APPEAL FROM THE DISTRICT
OF THE SECOND CIRCUIT (CIVIL NO. COURT OF THE FIFTH CIRCUIT (CASE
18-1-0849) NO. 5DCW-18-0000125)

SUMMARY DISPOSITION ORDER
Affirmed.

396 P.3d 1151
STATE of Hawai‘i, Plaintiff-Appellant,
v
Eric N. YOKOTA, Defendant-Appellee
NO. CAAP-16-0000006
Intermediate Court of Appeals of Hawai‘.
DATED: Honolulu, Hawai'i, June 28, 2017,

APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIRCUIT (CR. NO. 15-1-
0999)

SUMMARY DISPOSITION ORDER

Vacated. Remanded.

13

L]
396 P.3d 1151
Richard MISSLER and Patricia Missler,
Appellants-Appellees,
Vv.

BOARD OF APPEALS OF THE COUNTY
OF HAWAI'; B.J. Leithead-Todd, Plan-
ning Director, Department of Planning,
County of Hawai‘i, Appellees-Appellants

and

Malama Investments LLC, a Hawai‘i Lim-
ited Liability Company; Loren Saxton
and Mary Saxton, Co-Trustees of the
Saxton Trust Dated March 17, 2005, Ap-
pellees-Appellees

Richard Missler and Patricia Missler,
Appellants-Appellees,
ve
B.J. Leithead-Todd, Appellee-Appellant,
and
Board of Appeals of the County of Ha-
wai‘l, Malama Investments LLC, a Ha-
wai‘i Limited Liability Company; Loren
Saxton and Mary Saxton, Co-Trustees of
the Saxton Trust Dated March 17, 2005,
Appellees-Appellees

Richard Missler and Patricia Missler,
Appellants-Appellants,
ve
Board of Appeals of the County of Ha-
wai‘, Malama Investments LLC, a Ha-
wai‘i Limited Liability Company; Loren
Saxton and Mary Saxton, Co-Trustees of
the Saxton Trust Dated March 17, 2005;
and Planning Director, Department of
Planning, County of Hawai‘i, Appellees-
Appellees
and
and
NO. CAAP-13-002347
NO. CAAP-13-0002752
NO. CAAP-13-0003040

Intermediate Court of Appeals of Hawai'i.
DATED: Honolulu, Hawai'i, June 26, 2017.

APPEAL FROM THE CIRCUIT COURT
OF THE THIRD CIRCUIT (CIVIL NO. 12-
1-449K)

14 De

MEMORANDUM OPINION
Remanded.

396 P.3d 1152
US BANK NATIONAL ASSOCIATION, as
Trustee for the Structured Asset Securi-
ties Corporation Mortgage Loan Trust,
2006-NC1, Plaintiff/Counterclaim-Defen-
dant/Appellant/Cross-appellee/Appel-
lee/cross-Appellant,

v

Daneford Michael WRIGHT, Ellareen Ui-
lani Wright, Defendants/Cross-Claim.
Defendants/Appellees/Cross-Appel-
lants/Appellants/Cross-Appellees,

and

County of Maui, Wailuku Country Estates
Community Association, Inc. Defen-
dants/Cross-Claim Defendants/Appellees

and

Finance Factors, Limited, Defen-
dant/Counterclaim-Plaintiff/Cross-
Claim Plaintiff/Appellee

and

John Does 1-10, Jane Does 1-10, DOE Part-
nerships 1-10, DOE Corporations 1-10,
DOE Entities 1-10, DOE Governmental
Units 1-10, Defendants

NO. CAAP-16-0000158
Intermediate Court of Appeals of Hawai‘.
DATED: Honolulu, Hawai'i, June 26, 2017.

As Amended June 27, 2017

APPEAL FROM THE CIRCUIT COURT
OF THE SECOND CIRCUIT (CIVIL NO.
09-1-0961(2))

SUMMARY DISPOSITION ORDER
Remanded,

396 P.3d 1152
STATE of Hawai‘i, Plaintiff-Appellee,
v
Tracy SOUZA, Defendant-Appellant,
NO. CAAP-13-0002043
Intermediate Court of Appeals of Hawai‘.
DATED: Honolulu, Hawai'i, June 28, 2017,

APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIRCUIT (CRIMINAL
NO, 12-1-1028)

SUMMARY DISPOSITION ORDER

'

396 P.3d 1152
COUNTY OF HAWAI'I, a Municipal
Corporation of the State of Hawai‘i
Plaintiff-appellant,

vw

William R. SANTOS and Edita B. Santos,
Trustees for The Santos Family Trust
Dated May 12, 1994, Defendants-appel-
lees,

and

John Does 1-100; Jane Does 1-100; DOE
Partnerships; DOE Corporations 1-100;
DOE Entities 1-100; and DOE Govern-
mental Units 1-100, Defendants

NO, CAAP-15-0000894
Intermediate Court of Appeals of Hawai'i.
June 28, 2017.

APPEAL FROM THE CIRCUIT COURT
OF THE THIRD CIRCUIT (CIVIL NO, 02-
1-0181K)

SUMMARY DISPOSITION ORDER
Vacate. Remanded.

'
396 P.3d 1153
STATE of Hawai‘, Plaintiff-appellee,
ve

Euclides MARQUES-FERNANDEZ, also
known as Euclides Marques Fernandes,
also known as “Ninja”, Defendant-ap-

pellant
NO. CAAP-16-0000019

Intermediate Court of Appeals of Hawai‘.
DATED: Honolulu, Hawai'i, June 28, 2017.

APPEAL FROM THE CIRCUIT COURT
OF THE SECOND CIRCUIT (CR. NO. 18-

MEMORANDUM OPINION

Affirmed.

396 P.3d 1153

Melvin De FREITAS Jr.,
Petitioner-appellant,

ve

STATE of Hawai'i, Respondent-appellee
NO. CAAP-16-0000493

Intermediate Court of Appeals of Hawai‘.
DATED; Honolulu, Hawaii, June 28, 2017.

APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIRCUIT (S.P.P. NO. 15-

1-0012; CR. NO, 95-1996)

1-0568@))
SUMMARY DISPOSITION ORDER
SUMMARY DISPOSITION ORDER
Affirmed.
Affirmed.
:
:
396 P.3d 1153
396 P.3d 1153 . “Appell

Albert BATALONA, Petitioner-Appellant,  J°hanne AUGER, Petitioner-Appellee,

ve

v

STATE of Hawai‘i, Respondent-Appellee

NO. CAAP-16-0000428

Paul POCINO, Respondent-Appellant.
NO, CAAP-16-0000582
Intermediate Court of Appeals of Hawai'i,

Intermediate Court of Appeals of Hawai‘.
DATED: Honolulu, Hawaiti, June 28, 2017.

APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIRCUIT (S.P.P. NO. 10-
1-0075; CR, NO, 08-1-0787)

DATED: Honolulu, Hawai'i, June 28, 2017

APPEAL FROM THE FAMILY COURT
OF THE FIFTH CIRCUIT (FC-DA NO. 15-

1-0210)

16
SUMMARY DISPOSITION ORDER

SUMMARY DISPOSITION ORDER

Reversed.

Lt
396 P.3d 1154

STATE of Hawai‘, Plaintiff-Appellee,

v.
Edwin KELLER, Defendant-Appellant.

NO, CAAP-16-0000615
Intermediate Court of Appeals of Hawai.
DATED: Honolulu, Hawai'i, June 28, 2017.
APPEAL FROM THE DISTRICT

COURT OF THE FIRST CIRCUIT (WATA-
NAE DIVISION) (CASE NO. 1DCW-15-

0004105)
SUMMARY DISPOSITION ORDER

LI
396 P.3d 1154
THE BANK OF NEW YORK MELLON
fka The Bank of New York as Trustee
for the Certificateholders of Cwabs, Inc.,
Asset Backed Certificates, Series 2005-

ABI, Plaintiff-Appellee,
v.
Jeffrey T. PECK, Defendant-Appellant,
and
Mortgage Electronic Registration Sys-
tems, Inc., Solely as Nominee for Coun-
trywide Home Loans, Inc.; John Does 1-
50; Jane Does 1-50; DOE Partnerships 1-
50; DOE Corporations 1-50; DOE Enti-
ties 1-50; and DOE Governmental Units
1-50, Defendants
NO, CAAP-14-0000900
Intermediate Court of Appeals of Hawai‘.
DATED: Honolulu, Hawai'i, June 28, 2017.
APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIRCUIT (CIVIL NO. 13-
1-0307)

Vacated and Remanded.

LJ
396 P.3d 1154
STATE of Hawai‘i, Plaintiff-Appellee,
ve

Frankie COOPER, aka Frankie L.
Cooper, Defendant-Appellant.

NO. CAAP-15-0000646
Intermediate Court of Appeals of Hawai'i.
DATED: Honolulu, Hawai‘, June 28, 2017.

APPEAL FROM THE DISTRICT
COURT OF THE THIRD CIRCUIT (CASE

NO. 8DTC-15-043002)

SUMMARY DISPOSITION ORDER

Reverse.

Lt
396 P.3d 1154
STATE of Hawai‘i, Plaintiff-Appellee,
v.

John LANOZA, Defendant-Appellant
NO. CAAP-14-0001393
Intermediate Court of Appeals of Hawai‘.
DATED: Honolulu, Hawai'i, June 28, 2017.

APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIRCUIT (CR. NO, 12-1-

1116)

17

SUMMARY DISPOSITION ORDER

MEMORANDUM OPINION
Affirm. Affirmed.
Lt L |
396 P.3d 1155 396 P.3d 1155
STATE of Hawai‘i, Plaintiff-Appellee, STATE of Hawai‘, Plaintiff-Appellee,
ve ve
Rommel A. LATA, Defendant-Appellant James HANSEN, Defendant-Appellant
NO. CAAP-15-0000674 NO. CAAP-16-0000569
Intermediate Court of Appeals of Hawai'i.

Intermediate Court of Appeals of Hawai‘.
DATED: Honolulu, Hawai'i, June 29, 2017.

DATED: Honolulu, Hawai'i, June 29, 2017.
APPEAL FROM THE DISTRICT

APPEAL FROM THE CIRCUIT COURT
COURT OF THE FIRST CIRCUIT (CASE
OF THE FIRST CIRCUIT (CRIMINAL NO. 1DTA-15-05204)

NO, 14-1-0488)
SUMMARY DISPOSITION ORDER SUMMARY DISPOSITION ORDER
Affirmed. ed.
1 LI
396 P.3d 1155
396 P.3d 1155
ves STATE of Hawai‘i, Plaintiff-Appellee,
STATE of Hawai‘i, Plaintiff-Appellee,
y
* Nikilyn LOVE, Defendant-Appellant
Kekoa IONA, Defendant-Appellant.
NO. CAAP-16-0000572
NO. CAAP-16-0000100
Intermediate Court of Appeals of Hawai‘.

Intermediate Court of Appeals of Hawaiti.
DATED: Honolulu, Hawai'i, June 29, 2017
DATED; Honolulu, Hawai'i, June 29, 2017.
APPEAL FROM THE DISTRICT
APPEAL FROM THE CIRCUIT COURT COURT OF THE THIRD CIRCUIT
OF THE FIRST CIRCUIT (CR. NO. 14-1- (SOUTH KOHALA DIVISION) (CASE NO.
0648) 8DTA-16-00995)

18 Le
SUMMARY DISPOSITION ORDER [|

Affirmed.

396 P.3d 1156

BANK OF AMERICA, N.A., Successor by
Merger to BAC Home Loans Servicing,

LP fka Countrywide Home Loans Ser-
vicing LP, Plaintiff-Appellee,

1
ve
396 P.3d 1156
STATE of Hawai‘, Plaintiff-Appellant, John YEH, Defendant-Appellant,

v

Alberto GARCIA, Defendant-Appellee Lay Menh Yeb; Billy Yeh; Gary Ch
y Menh Yeh; ‘eh; Gary Chan;

NO. CAAP-16-0000808 Association of Apartment Owner,

Defendants-Appellees,

Intermediate Court of Appeals of Hawaiti.
DATED: Honolulu, Hawai'i, June 29, 2017

APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIRCUIT (CRIMINAL

NO, 14-1-1999)
and

and

and

United States of America; Bank of
Hawaii, Defendants-Appellees,

SUMMARY DISPOSITION ORDER
‘Affirm, John Does 1-50; Jane Does 1-50; DOE Part-
" nerships 1-50; DOE Corporations 1-50;
DOE Entities 1-50; and DOE Govern-

P| mental Units 1-50, Defendants
NO. CAAP-16-0000128

Intermediate Court of Appeals of Hawai'i.

'
396 P.3d 1156 DATED: Honolulu, Hawai'i, June 29, 2017.
IN the INTEREST OF MN
AAP. APPEAL FROM THE CIRCUIT COURT
NO. CAAP-14-0001876 OF THE FIRST CIRCUIT (CIVIL NO. 12-

Intermediate Court of Appeals of Hawaii. _ 1-8074)

DATED: Honolulu, Hawai'i, June 29, 2017.
SUMMARY DISPOSITION ORDER

APPEAL FROM THE FAMILY COURT
OF THE SECOND CIRCUIT (FO-J No. — yacated, Remanded.

97012)
SUMMARY DISPOSITION ORDER
Affirmed.

a "

1 1
396 P.3d 1157 396 P.3d 1157
KG, Petitioner-appellant, IN the INTEREST OF P CHILDREN

v. NO. CAAP-16-0000696

D.D. and Child Support Enforcement Intermediate Court of Appeals of Hawai‘.
Agency, State of Hawaii, DATED: Honolulu, Hawai, June 29, 2017.
Respondents-appellees
APPEAL FROM THE FAMILY COURT
NO. CAAP-16-0000408 OF THE FIRST CIRCUIT (FC-S NO. 14-
Intermediate Court of Appeals of Hawai'i. 00112)

DATED: Honolulu, Hawaii, June 29, 2017. SUMMARY DISPOSITION ORDER

APPEAL FROM THE FAMILY COURT Affirm.
OF THE SECOND CIROUIT (FC-P NO.
15-1-0168)

SUMMARY DISPOSITION ORDER
Affirmed, |

396 P.3d 1157
Thaddeaus ZIEMLAK, Successor Trustee
of the Marguerite M. Ziemlak Revocable
Living Trust, Plaintiff-Appellee,
ve
r] Ji Won KEELEY, Defendant/Third-
Party Plaintiff-Appellant,
and

396 P.3d 1157

IN the INTEREST OF LR
e EST 0} Estate of Stanley F, Ziemlak,
NO. CAAP-16-0000512 Defendant-Appellee,

Intermediate Court of Appeals of Hawai'i, and

DATED: Honolulu, Hawai‘, June 29, 2017, John Does 1-20, Jane Does 1-20, DOE Part-

nerships 1-20, DOE Limited Liability

APPEAL FROM THE FAMILY COURT — Companies 1-20, and DOE Entities 1-20,
OF THE SECOND CIRCUIT (FO-S NO, Defendants,

15-1-0111) Vv.
First Honolulu Securities, Inc., Third-
SUMMARY DISPOSITION ORDER party Defendant-Appellee
Affirmed. NO. CAAP-14-0001017

Intermediate Court of Appeals of Hawai‘.
DATED: Honolulu, Hawai'i, June 80, 2017.

APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIRCUIT (CIVIL NO, 12-
1.2576)

20 EE

SUMMARY DISPOSITION ORDER MEMORANDUM OPINION
Vacate, Remanded. Affirm,
L
'
396 P.3d 1158
STATE of Hawai‘, Plaintiff-Appellee, 396 P.3d 1158
v DEUTSCHE BANK NATIONAL TRUST

COMPANY, as Trustee for the Certifi-

Walter BROWN, Defendant-Appellant eateholders of Soundview Home Loan

NO. CAAP-15-0000354 Trust 2006-OPT2, Asset-backed Certifi-

. - cates, Series 2006-OPT2, a National
Intermediate Court of Appeals of Hawai‘. Banking Association, Plaintiff-Appellee,
DATED; Honolulu, Hawai'i, June 30, 2017. %

APPEAL FROM THE CIRCUIT COURT yonne GARCIA, Winona Apuna; Mar-
OF THE FIRST CIRCUIT (CR. NO. 18-1- shall Alan Motia Mindoro; and Melina
1006) Kanoalani Mindoro, Defendants-appel-

lants

MEMORANDUM OPINION and

Affirm.
John and Mary Does 1-10, Defendants

NO. CAAP-14-0000909

Intermediate Court of Appeals of Hawai'i.

DATED: Honolulu, Hawai'i, June 30, 2017.
' APPEAL FROM THE CIRCUIT COURT
396 P.3d 1158 OF THE SECOND CIRCUIT (CIVIL NO.

STATE of Hawai‘, Plaintift-Appellee, 7" °8®)
ve
Giang PHAM, Defendant-Appellant
NO. CAAP-16-0000404

SUMMARY DISPOSITION ORDER

Vacate and remand.

Intermediate Court of Appeals of Hawai‘.

DATED: Honolulu, Hawai'i, June 30, 2017.
APPEAL FROM THE CIRCUIT COURT

OF THE FIRST CIRCUIT (CR. NO. 15-1-
0808)

21

SUMMARY DISPOSITION ORDER

Lt
396 P.3d 1159

GREEN TREE SERVICING
LLC, Plaintiff-Appellee,
ve
Tiasamo Maluelue TUIONUU; Toefoi
Fuimaono Tuionuu, Defendants-
Appellants,

Affirm.

and
John Does, 1-50; Jane Does 1-50; DOE
Partnerships 1-50; DOE Corporations 1-
50; DOE Entities 1-50; and DOE Govern-
mental Units 1-50, Defendants LJ

NO. CAAP-15-0000423
Intermediate Court of Appeals of Hawai‘.
DATED: Honolulu, Hawai'i, June 30, 2017.

APPEAL FROM THE CIRCUIT COURT

396 P.3d 1159
STATE of Hawai‘i, Plaintiff-Appellee,
v.

Fred E. WILLIAMS, also known as
Frederick Ernest Williams, Jr.,

OF THE FIRST CIRCUIT (CIVIL NO. 12-
1-2489) Defendant-Appellant.
. CAAP-15-001
SUMMARY DISPOSITION ORDER NO. C. 15-0000596
Affirmed, Intermediate Court of Appeals of Hawai'i.
DATED: Honolulu, Hawai‘, June 80, 2017.

| | APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIRCUIT (CRIMINAL

NO. 18-1-0025)

SUMMARY DISPOSITION ORDER

LI
396 P.3d 1159 Affirm.
STATE of Hawai‘i Plaintiff-Appellee,
ve
Dewitt LONG, Defendant-Appellant
NO, CAAP-16-0000509
Intermediate Court of Appeals of Hawai'i.
DATED: Honolulu, Hawai'i, June 80, 2017.

APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIRCUIT (CR. NO. 06-1-

1478)

22

396 P.3d 1160
Keith M. KANESHIRO, in his Official Ca-
pacity as Prosecuting Attorney of City
and County of Honolulu, on Behalf of
State of Hawai‘i, Petitioner-appellant,
ve
ELEVEN (11) PRODUCTS DIRECT
Sweepstakes Machines (Total Estimated
Value: $38,500.00), Four Hundred Fifty
Seven Dollars in United States Currency
($457.00); One (1) Cam Security Digital
Recording System (Estimated Value:
$200.00) (Total Aggregate Value:
$39,157.00), Defendant-Appellee,
and

Winner’z Zone; April Whiting-Haraguchi,
Tracy Yoshimura, PJY Enterprises;
Wendy Wagner, Interested Persons-Ap-
pellees (S.P. NO, 14-1-0567)

Keith M. Kaneshiro, in his Official Capaci-
ty as the Prosecuting Attorney of City
And County of Honolulu, on Behalf of
State of Hawai‘i, Petitioner-appellant,

ve

Twelve (12) Products Direct Sweepstakes
Machines (Total Estimated Value:
$42,000.00), Seven Hundred Forty Four
Dollars in United States Currency
($744.00); One (1) DVR (Estimated Val-
ue: $100.00) (Total Aggregate Value:
$42,844.00), Defendant-Appellee,

and

Winner’z Zone; April Whiting-Haraguchi,
Tracy Yoshimura, PJY Enterprises; and
Steve Ohira, Interested Persons-Appel-
lees (S.P, NO, 14-1-0568)

Keith M. Kaneshiro, in his Official Capaci-
ty as the Prosecuting Attorney of The
City And County of Honolulu, on Behalf
of the State of Hawai‘i, Petitioner-appel-
lant,

ve

Fifteen (15) Products Direct Sweepstakes
Machines (Total Estimated Value:
$52,500.00), One Thousand Bight Hun-
dred Eighty Three Dollars in United ty
as the Prosecuting Attorney of The City
And County of Honolulu, on Behalf of
the State of Hawai‘i, Petitioner-appel-
lant,States Currency ($1,883.00) (Total

Aggregate Value: $54,383.00), Defendant-
Appellee,

and

Winner’z Zone; April Whiting-Haraguchi,
Tracy Yoshimura, PJY Enterprises; and
Sherilyn Gama, Interested Persons-Ap-
pellees (8.P. NO. 14-1-0569)

Keith M. Kaneshiro, in his Official Capaci-

Keith M. Kaneshiro, in His Official Capac-
ity as the Prosecuting Attorney of The
City And County of Honolulu, on Be-
half

ve

Fourteen (14) Products Direct Sweep-
stakes Machines (Total Estimated Val-
ue: $49,000.00), Forty Seven Dollars in
United States Currency ($47.00) (Total
Aggregate Value: $49,047.00), Defendant-
Appellee,

and

Winner’z Zone; April Whiting-Haraguchi,
Tracy Yoshimura, PJY Enterprises; and
Anna Marie Blas Fejeran, Interested
Persons-Appellees (S.P. NO, 14-1-0570)

Keith M. Kaneshiro, in his Official Capaci-
ty as the Prosecuting Attorney of The
City And County of Honolulu, on Behalf
of the State of Hawai'i, Petitioner-appel-
lant,

Vv.

Fifteen (15) Products Direct Sweepstakes
Machines (Total Estimated Value:
$52,500.00), Seven Hundred Seventy Nine
Dollars in United States Currency
($779.00) (Total Aggregate Value:
$53,279.00), Defendant-appellee,

and

Winner’z Zone; April Whiting-Haraguchi,
Tracy Yoshimura, PJY Enterprises; and
Quyenh Nguyen, Interested Persons-Ap-
pellees (S.P. NO. 14-1-0571)of the State
of Hawai‘, Petitioner-appellant,

v
Ten (10) Products Direct Sweepstakes

Machines (Total Estimated
Value:

$35,000.00), Two Hundred Ninety Dollars
in United States Currency ($290.00) (Total
Aggregate Value: $35,290.00), Defendant-
appellee,

and

Winner’z Zone; April Whiting-Haraguchi,
Tracy Yoshimura, PJY Enterprises; and
Jay-r Laforteza, Interested Persons-Ap-
pellees (S.P. NO, 14-1-0572)

NO. CAAP-15-0000848
NO, CAAP-15-0000849
NO. CAAP-15-0000850
NO, CAAP-15-0000852
NO, CAAP-15-0000854
NO. CAAP-15-0000855

Intermediate Court of Appeals of Hawai‘.
DATED: Honolulu, Hawai'i, June 80, 2017.

APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIRCUIT, (S.P. NO. 14-1-
0567), (S.P. NO. 14-1-0568), (S.P. NO, 14-1-
0569), (S.P. NO. 14-1-0570), (S.P. NO, 14-1-
0571), (S.P. NO. 14-1-0572)

MEMORANDUM OPINION

Vacate and remand.

Lt
396 P.3d 1161
STATE of Hawai‘i, Plaintiff-Appellant,
ve
Matthew Sean SASAI, Defendant-Appellee
and
State of Hawaii, Plaintiff-Appellant/Cross
Appellee,
vw

Brent N. Tanaka, Defendant-
Appellee/Cross Appellant

NO. CAAP-15-0000865,
NO. CAAP-15-0000866

Intermediate Court of Appeals of Hawai‘.
DATED: Honolulu, Hawai'i, June 30, 2017,
As Amended June 80, 2017

APPEAL FROM THE DISTRICT
COURT OF THE FIRST CIRCUIT HONO-

23

LULU DIVISION, (CASE NO. 1DCW-14-
0004628), (CASE NO, 1DCW-14-0005843)

SUMMARY DISPOSITION ORDER
Vacate and remand,

396 P.3d 1161

CENTRAL PACIFIC BANK,
Plaintiff-appellee,

Vv

William Halemano FREDERICK,
Defendant-appellant,

and

Mary Katherine Frederick, Sea Country
Community Association, Defendants-
appellees,

and

John Does 1-50; Jane Does 1-50; DOE Part-
nerships 1-50; DOE Corporations 1-50;
DOE Non-profit Corporations 1-50; and
DOE Governmental Units 1-50, Defen-
dants

NO. CAAP-16-0000637
Intermediate Court of Appeals of Hawai‘.
DATED: Honolulu, Hawai'i, June 30, 2017.

APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIROUIT (CIVIL NO, 14-
1-2199-10)

SUMMARY DISPOSITION ORDER
Affirmed.

24
Lt

397 P.3d 1130

Virendra NATH, Nancy Makowski,
Krishna Narayan, and Sherrie
Narayan, Plaintiffs-Appellees,

v.

THE RITZ-CARLTON HOTEL COMPA-
NY, L.L.C., The Ritz-Carlton Develop-
ment Co., Inc., Marriott International,
Inc., Marriott Vacations Worldwide Cor-
poration, Marriott Ownership Resorts,
Inc, The Ritz-Carlton Management
Company, L.L.C., Marriott Two Flags,
LP, and MH Kapalua Venture, LLC, De-
fendants-Appellants,

and

Kapalua Bay, LLC, Maui Land & Pineap-
ple Co. Ine, Kapalua Realty Co., Ltd.,
Exclusive Resorts, LLC, MLP KB Part-
ner, LLC, Exclusive Resorts Club I
Holdings, LLC, Exclusive Resorts Devel-
opment Company, LLC, ER Kapalua In-
vestors Fund Holdings, LLC, ER Kapa-
lua Investors Fund, LLC, Kapalua Bay
Holdings, LLC, et al., Defendants-Appel-
lees.

SCAP-13-0002732
Supreme Court of Hawai‘.
DATED: Honolulu, Hawai'i, July 14, 2017.
ON REMAND FROM THE UNITED

STATES SUPREME COURT (CAAP-13-
0002782; CIV. NO. 11-1-0216)

SUMMARY DISPOSITION ORDER

Affirmed.

Lt
397 P.3d 1130

Krishna NARAYAN; Sherrie Narayan; Vi-
rendra Nath; Nancy Makowski; Keith
Macdonald, as Co-Trustee for the DKM
Trust dated October 7, 2011; Simon Yoo;
Sumiyo Sakaguchi; Susan Renton; Indi-
vidually and as Trustee for The Renton
Family Trust dated 12/3/09; Stephen
Xiang Pang; Faye Wu Liu; Massy Meh-
dipour, Individually and as Trustee for
Massy Mehdipour Trust dated June 21,
2006; G. Nicholas Smith; Tristine Smith;
Ritz 1303 Re, LLC, a Colorado Limited
Liability Company; Clifford W. Chaffee;
Bradley Chaffee, Individually and as
Trustee of the Charles V. Chaffee BRC
Stock Trust dated 12/1/99, and the Clif-
ford W. Chaffee BRC Stock Trust dated
1/4/98, Gary S. Anderson, Ronald W. Lor-
enz, and Renee Y. Lorenz, Plaintiffs-
Appellees,

v

MARRIOTT INTERNATIONAL, INC, The
Ritz-Carlton Development Company,
Inc; The Ritz-Carlton Management
Company, LLC; John Albert; Edgar
Gun; The Ritz-Carlton Hotel Company,
LLC; Marriott Vacations Worldwide
Corporation; Marriott Ownership Re-
sorts, Ine.; Marriott Two Flags, LP; and
MH Kapalua Venture, LLC, Defendants-
Appellants,

and

Maui Land & Pineapple Co., Inc.; Exclu-
sive Resorts, LLC; Kapalua Bay, LLC;
Association of Apartment Owners of Ka-
palua Bay Condominium; Caroline Pe-
ters Belsom; Cathy Ross; Robert Par-
sons; Ryan Churchill; MLP KB Partner
LLC; Kapalua Bay Holdings, LLC; ER
Kapalua Investors Fund, LLC; ER Ka-
palua Investors Fund Holdings, LLC;
Exclusive Resorts Development Compa-
ny, LLC; and Exclusive Resorts Club I
Holdings, LLC, Defendants-Appellees.

SCAP-13-0003607
Supreme Court of Hawai‘.
DATED: Honolulu, Hawaii, July 14, 2017.

ON REMAND FROM THE UNITED
STATES SUPREME COURT (CAAP-13-
0003607; CIV. NO, 12-1-0586)

SUMMARY DISPOSITION ORDER MEMORANDUM OPINION
Affirmed. Affirm.
'
397 P.3d 1131

LI
397 P.3d 11314
STATE of Hawai‘i, Plaintiff-Appellee,
vy.

Jon Riki KARAMATSU, Defendant-
Appellant.

NO. CAAP-16-0000246
Intermediate Court of Appeals of Hawai'i,
DATED: Honolulu, Hawai'i, June 30, 2017.

APPEAL FROM THE DISTRICT
COURT OF THE FIRST CIRCUIT, HON-
OLULU DIVISION, (CASE NO. IDTA-15-

01669)

25

STATE of Hawai‘, Plaintiff-Appellee,
ve

Paul Stephen GLEED, Defendant-
Appellant

NO, CAAP-16-0000378
Intermediate Court of Appeals of Hawai‘.
DATED: Honolulu, Hawai'i, June 30, 2017.

APPEAL FROM THE DISTRICT
COURT OF THE THIRD CIRCUIT (CASE
NO. 8DTO-15-052965)

SUMMARY DISPOSITION ORDER

Remand,

26

398 P.3d 615
US. BANK N.A. in its Capacity as Trustee
for the Registered Holders of Mastr As-
set Backed Securities Trust 2005-NC1,
Mortgage Pass-Through Certificates,
Series 2005-NC1, Respondent/Plaintiff-
Appellee,
ve
Joseph Keaoula MATTOS, Chanelle Leola
Meneses, Petitioners/Defendants-
Appellants,
and

Citifinancial, Inc., Association of apart-
ment owners of Terraza/Cortebella/Las
Brisas/Tiburon, Ewa by Gentry Commu-
nity Association, Respondents/Defen-
dants-Appellees.

SCWC-14-0001134
Supreme Court of Hawaii.

JUNE 6, 2017

'

Gary Victor Dubin, Honolulu, for petition-
rs.

28 Le

J. Blaine Rogers, Honolulu, for respon-
dent, U.S. Bank N.A.

RECKTENWALD, C.J., NAKAYAMA,
McKENNA, POLLACK, AND WILSON,
Jd.

OPINION OF THE COURT BY
McKENNA, J.
I. Introduction

This appeal arises from a judicial decree
of foreclosure granted in favor of plaintiff
“US. Bank N.A. in its Capacity as Trustee
for the registered holders of MASTR Asset
Backed Securities Trust 2005-NC1, Mort-
gage Pass-Through Certificates, Series 2005-
NCI” “U.S. Bank”) against defendants Jo-
seph Keaoula Mattos (“Mattos”) and Cha-
nelle Leola Meneses (“Meneses”) (collective-
ly, “Defendants”). At issue is whether the
Cireuit Court of the First Circuit! (“cirenit
court”) properly granted U.S. Bank’s “Mo-
tion for Summary Judgment and Decree of
Foreclosure Against All Defendants on
Complaint Filed July 21, 2011” (“motion” or
“motion for summary judgment”), In its
published opinion, the Intermediate Court of
Appeals (“ICA”) affirmed the circuit court,
US. Bank N.A. v. Mattos, 187 Hawai'i 209,
367 P.3d 703 (App. 2016).2

Defendants assert the ICA erred in con-
cluding that the circuit court properly grant-
ed summary judgment due to the existence
of genuine issues of material fact. Specifical-
ly, Defendants allege U.S. Bank lacked
standing to foreclose because:

1, the two mortgage assignments to the
securitized trust in the chain of U.S.
Bank’s alleged ownership of [Defen-
dants’] loan were “robo-signed” by per-
sons with insufficient authority or per-
sonal knowledge as to what they swore
to, and whose signatures differed
among similar mortgage assignments
that they had supposedly signed and/or
notarized;

1, The Honorable Judge Bert I. Ayabe presided.

2. The ICA initially issued its decision in the form
of a summary disposition order (““SDO”). U.S.
Bank filed a motion for publication, which the
ICA granted, entering its Published Opinion on
February 12, 2016.

2. the two mortgage assignments to the
securitized trust in the chain of U.S.
Bank’s alleged ownership of [Defen-
dants’] loan violated the securitized
trust’s governing instrument, known as
its Pooling and Servicing Agreement
[CPSA")]....

8. the two mortgage assignments to the
securitized trust in the chain of U.S.
Bank’s alleged ownership of [Defen-
dants’] loan were unproven as sup-
ported only by hearsay declarations
inadmissible pursuant to [Hawai'i
Rules of Civil Procedure (“HRCP”)]
Rule 56(e) and Hawaii Evidence Rule
808(b)(8)[sie]® as U.S. Bank’s Declar-
ants had no personal knowledge of how
earlier business records had been com-
piled in addition to the two mortgage
assignments having been invalid, su-
pra.

We address the third issue on certiorari
first. We hold that the ICA erred by conclud-
ing the declaration of Richard Work
(“Work”), the Contract Management Coordi-
nator of Ocwen Loan Servicing, LLC
(“Ocwen”), rendered him a “qualified wit-
ness” under State v. Fitzwater, 122 Hawai'i
354, 227 P.8d 520 (2010) for U.S. Bank’s
records under the Hawai'i Rules of Evidence
(HRE”) Rule 803(b)(6) hearsay exception
for records of regularly conducted activity,
In addition, U.S. Bank failed to establish that
it was a holder entitled to enforce the note at,
the time the foreclosure complaint was filed.
See Bank of America, N.A. v. Reyes-Toledo,
189 Hawai'i 361, 370-71, 390 P.38d 1248, 1257-
58 (2017).

With respect to the first issue on certiora-
ri, because it is unclear what Defendants
mean by “robo-signing” and because a ruling
on the legal effect of “robo-signing” is not
necessary to the determination of this case,
we set aside the ICA’s holding that concluso-
ry assertions that fail to offer factual allega-
tions or a legal theory indicating how alleged

3. It appears this is a typographical error, as the
ICA Opinion is based on Rule 803(b)(6), the
hearsay exception for “[rlecords of regularly con-
ducted activity.” Rule 803(b)(3) is the hearsay
exception for “[t]hen existing mental, emotional,
or physical condition,” and is clearly inapplica-
ble.

“robo-signing” caused harm to a mortgagee
are insufficient to establish a defense in a
foreclosure action. Addressing the factual al-
legations underlying the “robo-signing”
claim, however, we conclude there is a genu-
ine issue of material fact as to whether
Ocwen had the authority to sign the second
assignment of mortgage to U.S. Bank.

With respect to the second issue on certio-
rari, we affirm the ICA in part. We adopt the
majority rule followed by the ICA in US.
Bank Nat. Ass’n v. Salvacion, 184 Hawai'i
170, 388 P.3d 1185 (App. 2014) and hold that
a third party unrelated to a mortgage securi-
tization pooling and servicing agreement
lacks standing to enforce an alleged violation
of its terms unless the violation renders the
mortgage assignment void, rather than void-
able, but we limit the holding to the judicial
foreclosure context.

Accordingly, we vacate the ICA’s March 9,
2016 Judgment on Appeal, as well as the
circuit court’s August 26, 2014 Findings of
Fact, Conclusions of Law and Order Grant-
ing Plaintiff's Motion for Summary Judg-
ment and Decree of Foreclosure Against All
Defendants on Complaint Filed July 21, 2011,
and remand this case to the circuit court.

Il. Background

On October 15, 2004, Mattos signed a
mortgage and a note for $296,000 in favor of
New Century Mortgage Corporation (“New
Century”). The mortgage was recorded in
the Land Court on October 25, 2004.

HM On July 21, 2011, U.S. Bank filed a
foreclosure complaint. U.S, Bank alleged it
was the owner of the mortgage by virtue of
an Assignment of Mortgage dated January 3,
2007 (“first assignment”) and an Assignment.
of Mortgage dated September 10, 2010 (“‘sec-
ond assignment”), both of which were record-
ed in the Land Court (the mortgage, first
assignment, and second assignment are
sometimes collectively referred to as “the
mortgage documents”). Attached to the com-
plaint were copies of the note with an al-
longe4 and the mortgage documents. The
allonge was apparently executed by Ocwen

4, “An ‘allonge’ is defined as a slip of paper
sometimes attached to a negotiable instrument
for the purpose of receiving further indorsements
when the original paper is filled with indorse-

29

as New Century’s attorney-in-fact pursuant
to a Limited Power of Attorney. The allonge
was dated June 22, 2010, although it stated it
was effective January 81, 2005.

On January 28, 2014, U.S. Bank filed a
motion for summary judgment. The motion
‘was supported by a declaration from Work,
which purported to authenticate various at-
tached exhibits, including the underlying
note, allonge, and mortgage documents.

On April 15, 2014, Defendants filed their
opposition to U.S. Bank’s motion. In sum-
mary, Defendants alleged that U.S. Bank
lacked standing to foreclose because (1) it
failed to show it was the holder of the
note at the time of foreclosure, (2) the
mortgage assignments contained various al-
leged defects, and (8) the motion’s support-
ing documents were inadmissible hearsay.
Defendants’ opposition was also based on
an affidavit from Marla Giddings (“Gid-
dings”), a purported forensic and securiti-
zation analysis expert retained to opine as
to whether U.S. Bank owned the note and
mortgage. Giddings asserted the assign-
ments “suffer[ed] from several fatal flaws,”
namely that the signers and notaries were
known “robo-signers” who were employed
by Ocwen and appeared to have differing
signatures on several documents, Giddings
also claimed the assignments violated the
securitized trust’s PSA. On July 18, 2014,
after a hearing, the circuit court granted
US. Bank’s motion for summary judgment.

Defendants appealed to the ICA. In its
opinion, the ICA rejected Defendants’ argu-
ments and affirmed the grant of summary
judgment in U.S. Bank’s favor. Mattos, 187
Hawai'i at 214, 367 P.3d at 708 The ICA
rejected Defendants’ first argument regard-
ing “robo-signing” because their opposition
to U.S. Bank’s motion “failed to assert facts
or law explaining how the alleged ‘robo-sign-
ing’ caused them harm or damages.” 187
Hawai'i at 210, 867 P.8d at 704. The ICA
rejected Defendants’ second argument that
the assignments were void, holding, “This
court, however, has held that the non-compli-

ments.” Mortg. Elec. Registration Sys., Inc. v.
Wise, 130 Hawaii 11, 14 n.6, 304 P.3d 1192,
T195 n.6 (2013).

30

ance with a PSA does not render the assign-
ment void. Given our holding in Salvacion,
Appellants have no standing to challenge
U.S. Bank’s alleged noncompliance with the
PSA.” 187 Hawai'i at 211, 367 P.8d at 705.
Finally, the ICA rejected Defendants’ third
argument, determining that Work was a
“qualified witness” pursuant to Fitzwater
who was able to authenticate the records
attached to his declaration for admission un-
der HRE Rule 808(b)(6). 187 Hawai'i at 211-
218, 867 P.8d at 705-07.

We now address the questions presented
on certiorari,

Ill. Standard of Review

Ho An award of summary judgment is
reviewed de novo and “is appropriate where
there is no genuine issue as to the material
fact and the moving party is entitled to judg-
ment as a matter of law.” French v, Hawaii
Pizza Hut, Ine., 105 Hawai'i 462, 466, 99 P.8d.
1046, 1050 (2004) (citing Ross v. Stouffer
Hotel Co., 76 Hawai‘ 454, 457, 879 P.2d 1037,
1040 (1994).

HE Furthermore,

The burden is on the party moving for
summary judgment (moving party) to show
the absence of any genuine issue as to all
material facts, which, under applicable
principles of substantive law, entitles the
moving party to judgment as a matter of
law. This burden has two components.

First, the moving party has the burden
of producing support for its claim that: (1)
no genuine issue of material fact exists
with respect to the essential elements of
the claim or defense which the motion
seeks to establish or which the motion
questions; and (2) based on the undisputed
facts, it is entitled to summary judgment
as a matter of law. Only when the moving
party satisfies its initial burden of produc-
tion does the burden shift to the non-
moving party to respond to the motion for

53. HRCP Rule 56 governs summary judgment.
HRCP Rule 56(e) provides in pertinent part:
Form of affidavits; further testimony; defense
required, Supporting and opposing affidavits
shall be made on personal knowledge, shall set
forth such facts as would be admissible in
evidence, and shall show affirmatively that the
affiant is competent to testify to the matters
stated therein, Sworn or certified copies of all

summary judgment and demonstrate spe-
cific facts, as opposed to general allega-
tions, that present a genuine issue worthy
of trial,

Second, the moving party bears the ulti-
mate burden of persuasion. This burden
always remains with the moving party and
requires the moving party to convince the
court that no genuine issue of material fact
exists and that the moving party is entitled
to summary judgment as a matter of law.

105 Hawai'i at 470, 99 P.8d at 1054 (emphasis
and citation omitted).

IV. Discussion

A. Work’s declaration was insufficient to
establish that he is a “qualified wit-
ness” under Fitzwater as to U.S.
Bank’s records.

Hl Pursuant to HROP Rule 56(e) (2000) ®
and Rules of the Circuit Courts of the State
of Hawai'i (“RCCH”) Rule 7(g) (1997)§, a
declaration in support of a summary judg-
ment motion must be based on personal
knowledge, contain facts that would be ad-
missible in evidence, and show that the de-
clarant is competent to testify as to the mat-
ters contained within the declaration, The
ICA ruled that the loan documents, including
the note and allonge, were admissible
through Work’s declaration, which estab-
lished he was a “qualified witness” able to
authenticate the records of U.S, Bank and
Ocwen pursuant to the hearsay exception for
records of regularly conducted activity, See
Mattos, 187 Hawai'i at 218, 367 P.8d at 707.

With respect to the note and mortgage
documents, Work’s declaration states:
1) I am the Contract Management Coordi-
nator of OCWEN Loan Servicing, LLC
(“Oewen”), the servicer for U.S. Bank N.A.
in its capacity as Trustee for the regis-
tered holders of MASTR Asset Backed
Securities Trust 2005-NC1, Mortgage

papers or parts thereof referred to in an affida-
vit shall be attached thereto or served there-
with,

6. RCCH Rule 7(g) provides in pertinent part:
Declaration in liew of affidavit. In lieu of an
affidavit, an unsworn declaration may be made

by a person, in writing, subscribed as true
under penalty of law, and dated{.]

Pass-Through Certificates, Series 2005-
NC1 [ “U.S. Bank”) ] of the mortgage loan
at issue in this case (the “Loan”). As such,
T am authorized to make this Declaration.
2) I am over the age of 18 years, and I
have personal knowledge of the facts and
matters stated herein based on my review
of the business records described below.
The statements set forth in this Declara-
tion are true and correct, to the best of my
knowledge and belief,

8) In the regular performance of my job
functions, I have access to and am familiar
with [U.S. Bank’s] records and documents
relating to this case (the “Records”), in-
cluding Ocwen’s business records relating
to the servicing of the Loan (the “Ocwen
Records”). In making this Declaration, I
relied upon the Records,

4) The Oewen Records document transac-
tions relating to the Loan and were made
and are maintained in the regular course
of Ocwen’s business consistent with
Ocwen’s regular practices, which require
that records documenting transactions re-
lating to the serviced mortgage loan be
made at or near the time of the transac-
tions documented by a person with knowl-
edge of the transactions or from informa-
tion transmitted by such a person.

5) According to the Oewen Records, [U.S.
Bank] is in possession of an original prom-
issory note dated October 15, 2004 ... in
favor of NEW CENTURY MORTGAGE
CORPORATION (the “Note”). A true and
correct copy of the Note is attached hereto
as Exhibit 1.

6) The Note has been endorsed to [U.S.
Bank] by Ocwen acting as the attorney-in-

fact for New Century Mortgage Corpora-

tion, A true and correct copy of the Limit-
ed Power of Attorney designating Ocwen
as New Century’s attorney-in-fact is at-
tached hereto as Exhibit 2.7

) According to the Oewen Records, the
Note is secured by a Mortgage dated Octo-
ber 15, 2004, and recorded on October 25,
2004 in the Bureau of Conveyances of the
State of Hawaii®! as Document Number

7. This Limited Power of Attorney is dated March
2, 2005,

8 This appears to be a Land Court filing in the
Office of Assistant Registrar.

31

3183517, and noted on the Transfer Certifi-

cate of Title No.: 671,440 (the “Mortgage”).

A true and correct copy of the Mortgage is

attached hereto as Exhibit 3,

8) According to the Ocwen Records, the

Mortgage was assigned to [U.S. Bank] by

that assignment dated January 8, 2007,

and recorded on January 30, 2007, in the

Office of the Assistant Registrar of the

Land Court of the State of Hawaii as

Document Number 3550341, and that as-

signment dated September 29, 2010, and

recorded October 11, 2010 in the Office of
the Assistant Registrar of the Land Court
of the State of Hawaii as Document Num-
ber 4007870 (the “Assignments”), True and
correct copies of the referenced assign-
ments are attached hereto as Exhibit 4 and

Exhibit 5. A true and correct copy of the

Limited Power of Attorney is attached

hereto as Exhibit 6,

As to the alleged default, amounts owed, and
notices provided, Work’s declaration is based
on the “Ocwen Records.”

We focus on the ICA’s ruling that the note
and mortgage documents were admissible
through Work’s declaration as records of
regularly conducted activity pursuant to
HRE Rule 808(b)(6) and this court’s Fitawa-
ter opinion. HRE Rule 803(b)(6) provides;

The following are not excluded by the

hearsay rule, even though the declarant is

available as a witness:

(b) Other exceptions.

©) Records of regularly conducted activi-
ty. A memorandum, report, record, or data,
compilation, in any form, of acts, events,
conditions, opinions, or diagnoses, made in
the course of a regularly conducted activi-
ty, at or near the time of the acts, events,
conditions, opinions, or diagnoses, as
shown by the testimony of the custodian or
other qualified witness, or by certification
that complies with rule 902(11) or a statute
permitting certification, unless the sources

9. This Limited Power of Attorney is dated April
13, 2012,

32

of information or other circumstances indi-

cate lack of trustworthiness.
(Emphasis added.)

Fitzwater addressed the admissibility of
business documents authenticated by an em-
ployee of another business, stating:

A person can be a ‘qualified witness’ who

can authenticate a document as a record of
regularly conducted activity under HRE
Rule 803()(6) or its federal counterpart
even if he or she is not an employee of the
business that created the document, or has
no direct, personal knowledge of how the
document was created. As one leading
commentator has noted:
... [sic] The phrase ‘other qualified wit-
ness’ is given a very broad interpretation,
The witness need only have enough famil-
jarity with the record-keeping system of
the business in question to explain how the
record came into existence in the ordinary
eourse of business. The witness need not
have personal knowledge of the actual cre-
ation of the documents or have personally
assembled the records. In fact, the witness
need not even be an employee of the rec-
ord-keeping entity as long as the witness
understands the entity's record-keeping
system.
There is no requirement that the records
have been prepared by the entity that has
eustody of them, as long as they were
created in the regular course of some enti-
ty’s business.
The sufficiency of the foundation evidence
depends in part on the nature of the docu-
ments at issue. Documents that are ‘stan-
dard records of the type regularly main-
tained by firms in a particular industry
may require less by way of foundation
testimony than less conventional docu-
ments proffered for admission as business
records.’

Thus, an employee of a business that re-

ceives records from another business can

be a qualified witness who can establish a

sufficient foundation for their admission as

records of the receiving business under

HRE Rule 803(b)(6).

Fitzwater, 122 Hawai'i at 365-66, 227 P.8d at
531-32 (internal citations and footnote omit-
ted).

Work’s declaration does not assert that he
is a custodian of records for either U.S. Bank
or Ocwen. Therefore, the documents attached
to his declaration are admissible under the
HRE 803(b)(6) hearsay exception only if he is
a “qualified witness” with respect to those
documents, The ICA Opinion relied on Fitz-
water in concluding that Work met the re-
quirements of a “qualified witness” able to
authenticate all the documents to which he
referred, and analyzed the issue as follows:

As previously noted, Work’s declaration
stated that he is the Contract Management.

Coordinator for Ocwen. Work’s declaration

further stated that Ocwen is the servicer

for U.S. Bank related to the Appellants’
loan, and that he had access to and was
familiar with Appellants’ loan records
through his regular performance of his job.
Furthermore, Work’s declaration indicated
the documents to which he referred to in
preparing his declaration were “maintained
in the regular course of Ocwen’s business
consistent with Ocwen’s regular practices,
which require that records documenting
transactions relating to the serviced mort-
gage loan be made at or near the time of
the transactions documented by a person
with knowledge of the transactions or from
information transmitted by such a person.”

Thus, Work’s declaration establishes that

Ocwen relies on the documents related to

Appellants’ loan, there are further indicia,

of reliability given Oewen’s business prac-

tices, and the documents constituted “rec-
ords of regularly conducted activity” that
were admissible as a hearsay exception,
pursuant to HRE Rule 803(b)(6). The cir-
cuit court, therefore, did not err in relying
upon the documents when it granted sum-
mary judgment in U.S, Bank’s favor.
Mattos, 187 Hawai‘i at 218, 367 P.3d at 707.

To the extent the ICA ruled that Work’s
declaration established him as a “qualified
witness” with respect to Ocwen’s records, we
agree. To the extent the ICA opinion con-
cluded that Work met the requirements to be
a “qualified witness” with respect to U.S.
Bank’s records, however, we disagree. Fitz-
water addresses situations in which one busi-
ness receives documents created by another
business and includes them in its own rec-

ords. Work’s declaration does not indicate
that U.S. Bank’s Records were received by
Ocwen and incorporated into the Ocwen Rec-
ords. Work’s declaration also does not estab-
lish that Work is familiar with the record-
keeping system of U.S. Bank. Rather, Work
merely states that he has access to and is
familiar with U.S. Bank's records. Thus
Work’s declaration does not satisfy founda-
tional requirements to make him a “qualified
witness” for U.S. Bank’s records pursuant to
Fitzwater.

HM Even if records attached to Work’s
declaration were otherwise admissible as
Ocwen records, there are separate legal is-
sues with respect to the note and allonge.
Defendants have continuously argued a lack
of admissible evidence that U.S. Bank is the
holder of the note. On this issue, the ICA
ruled that Work’s declaration established
U.S. Bank as the holder of the note entitled
to foreclose pursuant to HRS § 490:8-801
(2008). Mattos, 187 Hawai'i at 212, 367 P.38d
at, 706,

In Reyes-Toledo, we held that a person
seeking to judicially foreclose on a mortgage
following a promissory note default: must es-
tablish that it was the “person entitled to
enforce [the note]” as defined by HRS
§ 490:3-301 at the time of the filing of the
foreclosure complaint. Reyes-Toledo, 189 Ha-
wai'i at 370-71, 390 P.8d at 1257-58. HRS
§ 490:3-301 provides:

‘Person entitled to enforce’ an instrument.
means (i) the holder of the instrument, (ii)
a nonholder in possession of the instru-
ment who has the rights of a holder, or (iii)
a person not in possession of the instru-
ment who is entitled to enforce the instru-
ment pursuant to section 490:3-309 or
490:3-418(d). A person may be a person
entitled to enforce the instrument even
though the person is not the owner of the
instrument or is in wrongful possession of
the instrument.

There was no evidence or argument pre-
sented in this case regarding HRS § 490:3-
801 subsections (ii) and (iii), and the ICA
ruled on the basis that U.S. Bank was the
“holder” pursuant to subsection (i). The rele-
vant definition of “holder” is in HRS § 490:1-
201(1) (2008). This subsection defines a “hold-
er” as “[t]he person in possession of a nego-

33

tiable instrument that is payable either to
bearer or to an identified person that is the
person in possession[,]” Since the allonge was
apparently used to specifically indorse the
note to U.S. Bank, admissible evidence was
needed to demonstrate that U.S. Bank was in
possession of the note and allonge at the time
of the filing of this foreclosure complaint for
U.S. Bank to be entitled to summary judg-
ment,

Even if the Ocwen records were admissible
through the Work declaration, the only rep-
resentation in Work’s declaration regarding
possession of the note is in paragraph 5,
which states, “According to the Ocwen rec-
ords, [U.S. Bank] is in possession of an origi-
nal promissory note dated October 15, 2004
... in favor of NEW CENTURY MORT-
GAGE CORPORATION)” This paragraph
goes on to say that “[a] true and correct copy
of the Note is attached hereto as Exhibit 1.”
(Emphasis added.) Work’s declaration does
not even represent that U.S. Bank’s records
contain the original note; Work merely states
that Ocwen’s records so indicate. Even if
Work’s declaration had stated that the U.S.
Bank records contain the original note, this
statement would not be admissible because,
as noted, Work’s declaration is insufficient to
render him a “qualified witness” as to U.S.
Bank’s records.

In addition, paragraph 5 of Work’s decla-
ration refers only to the original note and
makes no reference to the allonge. Although
Exhibit 1 also contains the allonge, which
indorses the note to U.S. Bank, the allonge
was never authenticated. Therefore, U.S.
Bank was not entitled to summary judgment
even if the original note had been properly
authenticated, which it was not.

Even if the aforementioned issues concern-
ing the note and allonge did not exist, Work’s
declaration also does not satisfy the Reyes-
Toledo requirement of an affirmative show-
ing that U.S. Bank possessed the original
note and allonge at the time of filing of this
foreclosure complaint on July 21, 2011.

For all of these reasons, Work’s declara-
tion failed to meet U.S. Bank’s burden of
establishing facts necessary for a grant of
summary judgment.

34

In order to provide guidance on remand,
we address the other issues on certiorari,

B. Defendants’ “robo-signing” allegation
is unclear, so it is unnecessary to ad-
dress the legal effect of “robo-sign-
ing.” However, the first issue on cer-
tiorari has merit because there is a
genuine issue of material fact as to
whether Ocwen had authority to as-
sign the mortgage from U.S. Bank’s
predecessor in interest to U.S. Bank,

The ICA held that conclusory assertions of
“robo-signing” are insufficient to establish a
defense in a foreclosure action if the asser-
tions lack factual allegations or a legal theory
demonstrating how “robo-signing” caused
harm to a mortgagee. Mattos, 187 Hawai'i at
210, 867 P.8d at 704, Defendants do not
define what they mean by “robo-signing”;
therefore, it is not necessary to address the
legal effect of “robo-signing” at this time.
Accordingly, we set aside the ICA’s holding
on this issue as it is not necessary to the
determination of this case.

Underlying Defendants’ “robo-signing” al-
legations, however, are assertions that the
two mortgage assignments to the securitized
trust culminating in the assignment to U.S.
Bank were signed “by persons with insuffi-
cient authority or personal knowledge as to
what they swore to, and whose signatures
differed among similar mortgage assign-
ments that they had supposedly signed
and/or notarized.” Thus, Defendants assert
that the assignments of mortgage were
signed by persons (1) with insufficient au-
thority; (2) with insufficient personal knowl-
edge as to what they swore to; and (8) whose
signatures differed among similar mortgage
assignments that they had supposedly signed
and/or notarized, We address each of these
allegations in turn.

TH We first address the allegation that
the assignments of mortgage were signed by
persons with insufficient authority, Exhibit 2

10. It appears the only difference between the
entities “U.S, Bank for Registered Holders” and
“U.S. Bank” is that the latter’s name includes
the additional language “in its Capacity.”

11, Defendants’ allegations regarding mortgage
assignments were based on the Giddings affida-
vit. U.S, Bank challenged Giddings’ interpreta-

to Work’s declaration, the March 2, 2005
Limited Power of Attorney designating
Ocwen as New Century's attorney-in-fact, is
admissible as an Ocwen record pursuant to
Paragraph 6 of Work’s declaration. This Lim-
ited Power of Attorney establishes Ocwen’s
authority regarding the first mortgage as-
signment dated January 8, 2007 from Ocwen
to U.S. Bank’s predecessor in interest, “U.S.
Bank, N.A, as Trustee for the registered
holders of MASTR Asset Back Securities
Trust 2005-NCi, Mortgage Pass-Through
Certificates, Series 2005-NC1” (“U.S. Bank
for Registered Holders”) Thus the first
assignment of mortgage was signed by a
person with sufficient authority.

HM Exhibit 6 to Work’s declaration is an
April 18, 2012 Limited Power of Attorney,
which is also admissible as an Ocwen record.
This Limited Power of Attorney purports to
establish Oewen’s authority to execute the
second assignment of mortgage dated Sep-
tember 29, 2010 from U.S. Bank for Regis-
tered Holders to U.S. Bank. Although the
difference between U.S. Bank for Registered
Holders to U.S. Bank is unclear, this foreclo-
sure action was brought in the name of the
assignee U.S. Bank, and this Limited Power
of Authority was not effective until more
than a year after the second assignment of
mortgage. Therefore, there is a genuine issue
of material fact as to whether Ocwen had
authority to sign the second assignment of
mortgage to U.S. Bank.

HM We next address Defendants’ allega-
tion that the assignments of mortgage were
signed by persons “with insufficient authority
or personal knowledge as to what they
swore[.]” Defendants themselves lack person-
al knowledge as to the signers’ knowledge.
This allegation is therefore without merit.

HH We then turn to Defendants’ allega-
tion that the assignments of mortgage con-
tained signatures that differed among similar
mortgage assignments supposedly signed
and/or notarized by the same person.!! Even

tions of law, but never challenged whether she
was qualified to testify as an expert, the scope of
her alleged expertise, whether documents at-
tached to declaration could properly be consid-
ered in the motion for summary judgment, or the
admissibility of documents attached to her affida-
vit.

if the other assignments were admissible,
there is no admissible evidence they were
signed by different persons. This allegation is
therefore also without merit.

C. In a judicial foreclosure, a third party
to a pooling and servicing agreement
lacks standing to challenge assign-
ments in alleged violation of its terms
unless the violation would render the
assignment void.

HM Finally, in their second question on
certiorari, Defendants challenge the foreclo-
sure on the basis that the first and second
assignments of the mortgage violated the
requirements of the pooling and servicing
agreement. Paragraph 12 of the Giddings
affidavit refers to the PSA as an exhibit filed
with the Securities and Exchange Commis-
sion, and provides a website link. No expla-
nation is provided as to how a document
contained in a website link can be considered
admissible evidence in this motion for sum-
mary judgment. Thus, the terms of the PSA
are not actually before us, and there is no
actual evidence that the first and second
assignments of mortgage violated terms
within the PSA.

HI Even if the terms of the PSA were
properly before this court and showed that
the first and second assignments of mortgage
violated its terms, Defendants might not
have standing to challenge the validity of
mortgage assignments on this basis. In Sal-
vacion, a case arising out of a judicial foreclo-
sure, the ICA noted that, “[tlypically, bor-
rowers do not have standing to challenge the
validity of an assignment of its loans because
they are not parties to the agreement and
because noncompliance with a trust’s govern-
ing document is irrelevant to the assignee’s
standing to foreclose.” Salvacion, 184 Hawai'i
at 175, 8388 P.8d at 1190, As pointed out in
Salvacion, this is the overwhelming majority
rule. Id.” According to Salvacion, Hawai
law would recognize an exception to the gen-
eral rule when a challenge to a mortgage
assignment would deem the assignment void,

12. The Giddings affidavit also asserts that the
PSA is governed by New York law, which, ac-
cording to Giddings, provides that every sale
conveyance or other act of a trustee in contra-
vention of a trust is void. Even if it was proper to
consider the PSA under New York law, it is not

35

not voidable. Id. We adopt the ICA’s analysis
in Salvacion, but limit the holding to the
judicial foreclosure context for the reasons
that follow.

On certiorari, Defendants urge this court
to follow the minority rule allowing third-
party challenges to an assignment, arguing
that in Yvanova_v. New Cent Mortg,
Corp., 62 Cal.4th 919, 199 Cal.Rptr.3d 66, 865
P.8d 845 (2016), the Supreme Court of Cali-
fornia allowed challenges to mortgage assign-
ments based on noncompliance with terms of
securitized trust agreements, The Supreme
Court of California was clear, however, that
its ruling was limited to the nonjudicial fore-
closure context; it held “only that a borrower
who has suffered a nonjudicial foreclosure
does not lack standing to sue for wrongful
foreclosure based on an allegedly void assign-
ment merely because he or she was in default
on the loan and was not a party to the
challenged assignment.” 62 Cal.4th at 924,
199 Cal.Rptr.3d 66, 865 P.3d at 848. We also
note that the Glaski case, one of two cases
cited in Salvacion as going against the major-
ity rule, 184 Hawai'i at 176-77, 388 P.8d at
1190-91, also arose out of a non-judicial fore-
closure. Glaski, 218 Cal.App.4th at 1082, 160
Cal.Rptr.3d at 452, As the issue of whether
such challenges should be allowed in nonjudi-
cial foreclosures is not before us, we limit our
holding at this time to the judicial foreclosure
context.

Accordingly, in the context of judicial fore-
closures, we adopt the majority rule followed
in Salvacion and hold that a third party
unrelated to a pooling and servicing agree-
ment lacks standing to challenge assignments
based on alleged violation of the PSA’s terms
unless the violation would render the assign-
ment void. As the PSA is not in evidence, we
do not decide whether any of its terms were
violated and, if so, whether any such violation
renders an assignment void or voidable.

Y. Conclusion

For the foregoing reasons, we vacate the
ICA’s March 9, 2016 Judgment on Appeal, as

clear whether a mortgage assignment in contra-
vention of a pooling and servicing agreement
would be deemed void or voidable. See Glaski v.
Bank of Am,, N.A., 218 Cal.App.4th 1079, 1096-
97, 160 Cal.Rptr.3d 449, 463 (Cal. Ct. App. 2013)
(construing New York law),

36 |

well as the circuit court’s August 26, 2014
Findings of Fact, Conclusions of Law and
Order Granting Plaintiffs Motion for Sum-
mary Judgment and Decree of Foreclosure
Against All Defendants on Complaint Filed
July 21, 2011. We remand this case to the
circuit court for further proceedings consis-
tent with this opinion.

398 P.3d 625
Michael Patrick O’GRADY, individually;
and Leiloni O’Grady, individually,
Plaintiffs-Appellants,
v.

STATE of Hawai‘i and State of Hawai‘i
Department of Transportation,
Defendants-Appellees,
and

The County of Hawai‘i; Hawaiian Electric
Company; Hawaiian Electric Light
Company; Hawaiian Electric Industries,
Inc; Hulu Lolo, Inc.; and Does 1—100,
inclusive, Defendants.

SCAP-14-0001363
Supreme Court of Hawai‘.
JUNE 7, 2017
As Amended June 22, 2017

Ronald G. Self and Rebecca A. Copeland
for appellants.

Caron M, Inagaki, Randolph R. Slaton,
Henry S. Kim, and Robin M. Kishi, Honolulu,
for appellees State of Hawai'i and State of
Hawai'i Department of Transportation.

RECKTENWALD, C.J., MeKENNA,
POLLAOK, AND WILSON, JJ., AND
CIRCUIT COURT JUDGE CRABTREE,
IN PLACE OF NAKAYAMA, J.,
RECUSED

OPINION OF THE COURT BY
POLLACK, J.

This case concerns a negligence action
against the State of Hawai‘i and the State of
Hawai'i Department of Transportation (col-
lectively, the “State”) involving a rockfall and
related car accident on a state highway. The
Cireuit Court of the Third Circuit (the “cir-
cuit court”) determined that, although the
State breached a duty of care owed to the
plaintiffs, the State was not liable because
the plaintiffs failed to prove legal causation.
The issues presented on appeal are whether
the circuit court erred in holding that the
State’s breach of its duty of care was not a
legal cause of the plaintiffs’ injuries and
whether the discretionary function exception
applies in this case. We conclude that the
circuit court misapprehended the relevant
standard for evaluating legal causation; ac-
cordingly, we remand the case to the circuit
court for application of the correct standard.
We also address the applicability of the dis-
cretionary function exception,

I, BACKGROUND

Michael and Leiloni O’Grady were driving
on Route 11 in the County of Hawaii on
March 8, 2007, when a rockfall occurred. A
boulder and other material fell onto the high-
way, and a portion of the rockfall struck the
O’Gradys’ vehicle, resulting in their injuries.

At the time of the accident, Route 11 was a
public highway that the State was responsi-
ble for maintaining. Because of Route 11’s
location, it fell within the responsibility of the
State’s Hawaii District (the “Hawai'i Dis-
trict”),

The State’s Rockfall Hazard Rating Sys-
tem project (“Rockfall Hazard Project” or
“RHRS project”) has included the Hawai'i
District since the project’s expansion in 2004.
The project rates rockfall hazards for dan-
ger: Class A sites were determined to be the
most dangerous with high potential for rock-
falls, Class B sites were less dangerous, and
Class C sites raised virtually no concerns.
The location of the rockfall in this case (the
“accident site”) was rated as a Class A site
on December 22, 2004, and it remained a

Class A site at the time of the March 8, 2007
accident.

Rockfall hazards that were classified as
Class A sites were also assessed using a
more detailed rating system. Under this rat-
ing system, the accident site in this case
received the highest possible score for the
differential erosion feature and the differen-
tial erosion rates, which concern the geologi-
cal character of the slope where the slope
consists of two different materials resulting
in differential erosion. The accident site also
received the highest possible score for the
block size volume, which concerns the poten-
tial mass of the material that was anticipated
to fall in the event of a rockfall.

Prior to March 8, 2007, the State did not
have a routine ongoing coordinated system in
place to protect against rockfall hazards ad-
jacent to state highways at the time of the
accident. Hawai'i District maintenance em-
ployees were not trained to identify areas
with significant rockfall hazards, and there
was minimal integration between the Hawai'i
District engineer and the State’s Rockfall
Hazard Project results. From time to time,
information from the State’s Rockfall Hazard
Project may have been shared with the Ha-
wai‘ District; however, the Hawai'i District
engineer was not aware of the State’s Rock-
fall Hazard Project.

On December 27, 2007, the O’Gradys filed
their first amended complaint for damages in
the circuit court. The O’Gradys sought gener-
al, special, and exemplary damages against
the State under four theories of liability:
negligence, dangerous condition of public
property, vicarious liability, and loss of con-
sortium.

A non-jury, bifureated trial on liability was
held by the circuit court in November and
December of 2011. After finding that the
State owed a duty of care to the O’Gradys
and that it had breached this duty, the circuit
court determined that the State was not lia-
ble to the O’Gradys based on its conclusion
that the O’Gradys failed to prove legal causa-
tion. The court later issued “Amended Find-
ings of Fact and Conclusions of Law” on May
17, 2012. The circuit court’s findings of fact
and conclusions of law found that the O’Gra-
dys were injured as a result of the rockfall
and that the State was responsible for the

41

maintenance of the road where the accident
occurred. The cireuit court found that the
accident site was initially rated as a Class A
site on December 22, 2004, and that a Class
A site is one that is determined to be the
most dangerous with a high potential for
rockfalls. The circuit court also found as fol-
lows:
On occasion, the following might have oc-
curred: (a) the State employees may have
noticed an area which experienced fre-
quent rockfalls on the roadway or the
shoulder, (b) the State employees may
have informed the supervisor, (c) the su-
pervisor may have informed the District
Engineer, (d) the District Engineer may
have asked that a geotechnical engineer
come from Honolulu, (e) the geotechnical
engineer may have come from Honolulu
and undertaken a study, and (f) based
upon the study, the State may have ob-
tained the funding to address the rockfall
hazard.
The circuit court determined that in order to
reasonably address the danger of rockfalls
adjacent to State highways, the Hawai'i Dis-
trict should have
(a) had a system of routine, ongoing main-
tenance, (b) trained its maintenance per-
sonnel to recognize potential rockfall haz-
ards, (¢) had the ability to undertake
rockfall prevention projects which reason-
ably fell within a roadway maintenance
budget, and (d) consulted regularly with a
geotechnical engineer who had informa-
tion regarding the findings of the RHRS
project in order to integrate information
held between them.
The court found that the Hawai'i District did
not fulfill the above-listed responsibilities.
‘The circuit court made the following addi-
tional findings of fact, which are challenged
on appeal by the O’Gradys:
6. The purpose of the RHRS was to iden-
tify the rockfall hazards adjacent to State
highways in order to implement remedial
work, The intent was to use the informa-
tion garnered from the RHRS project to
choose large-scale projects which would be
funded by the Legislature of the State of
Hawai‘i (the “Legislature”) and with Fed-
eral funding.

42 De

14. However, Plaintiffs have failed to
prove that from December 22, 2004 until
March 8, 2007, it was reasonably foresee-
able that a rockfall at the Accident Site
was so imminent that it was necessary for
the State to immediately address the rock-
fall potential.

15. Plaintiffs failed to present evidence
from which it could be reasonably deter-
mined what the cost would have been for
the work required to eliminate the roclfall
hazard at the Accident Site prior to March
8, 2007.

16, According to Plaintiffs’ expert, Dr.
John Lockwood, the scale of the rockfall at
the Accident Site on March 8, 2007, was
approximately 70 cubic yards of material
weighing between 150 to 175 tons, Al-
though the size of the rockfall itself does
not necessarily correlate to the scale of
work which would have been required to
eliminate the rockfall hazard at the Acci-
dent Site prior to March 8, 2007, a fair
inference is that it would have been a
large-scale project.

17. The cost of the work performed by
Janod, Inc. in advising State personnel on
how to bring down the rock at the Acci-
dent Site after the March 8, 2007 accident,
$1,458.22, is not an accurate measure of
the cost of the work which would have
been required to eliminate the rockfall haz-
ard at the Accident Site prior to March 8,
2007. The March 8, 2007 rockfall had sig-
nificantly altered the Accident Site prior to
the remedial work performed after the
rockfall,

18, Plaintiffs failed to prove that from
December 22, 2004 to March 8, 2007, the
Hawai'i District had employees and equip-
ment to eliminate the rockfall hazard at
the Accident Site.

19. Plaintiffs failed to prove that from
December 22, 2004 to March 8, 2007, the
Hawai'i District had the funds available to
engage a private entity to eliminate the
roelrfall hazard at the Accident Site.

20, Plaintiffs failed to prove that if the
Hawai'i District performed the actions sug-
gested under Paragraph 18 above, this
would have probably resulted in the Ha-
wai'i District taking action to eliminate the
rockfall hazard at the Accident Site be-

tween December 22, 2004 to March 8,

2007.

21. Plaintiffs have failed to prove that

wrongful conduct on the part of the State,

if any, was a substantial factor in causing
the March 8, 2007 accident and their con-
sequent injuries.

The circuit court concluded that the State
owed “a duty of care to travelers on a state
highway to maintain the highway so it is
reasonably safe for travel,” which includes
“the duty to exercise ordinary care to main-
tain the areas adjacent to the highway so
that the highway is reasonably safe from
rockfalls.” The court further concluded that
the State “breached this duty of care by not
having a routine, coordinated system of rock-
fall mitigation at the operational level in the
Hawai'i District from December 22, 2004 to
March 8, 2007.” Nonetheless, the circuit
court determined in conclusion of law
(“COL”) 4 that the State was not liable to the
O’Gradys, based on its conclusion in COL 3
that the O’Gradys “failed to prove by a pre-
ponderance of the evidence that this breach
of the duty of care was a proximate cause of
the March 8, 2007 accident and their conse-
quent injuries.”

The circuit court also concluded the follow-
ing with regard to the discretionary function
exception:

5. Under HRS § 662-15(1), the State is
not liable for its acts of its employees in
the performance of a “discretionary func-
tion”. In determining whether the discre-
tionary function exception to liability ap-
plies, the issue is whether broad policy
considerations are involved rather than op-
erational decisions regarding routine ev-
eryday matters. If the former, then the
discretionary function exception applies
and the State is not liable for the conduct
which falls within the exception,

6, Ordinary, everyday maintenance of ar-

eas adjacent to a State highway in order to

prevent or mitigate rockfalls onto the high-
way is an operational level activity. The
decision to undertake a large-scale rockfall
prevention or mitigation project which re-
quires a specific appropriation from the

Legislature or Federal funding may fall

within the discretionary function exception.

However, the State should not escape lia-

bility under the discretionary function ex-
ception merely by choosing to address
rockfalls onto a State highway only with
large-scale projects and declining to use
routine, everyday maintenance to address
the risk.

The circuit court entered final judgment on
December 11, 2014, and the O’Gradys timely
appealed. We granted the O’Gradys’ request
to transfer the appeal to this court.

IL STANDARDS OF REVIEW
HMM The circuit court’s findings of fact
are reviewed under the clearly erroneot
standard: :
A finding of fact is clearly erroneous when,
despite evidence to support the finding, the
appellate court is left with the definite and
firm conviction in reviewing the entire evi-
dence that a mistake has been committed.
A finding of fact is also clearly erroneous
when the record lacks substantial evidence
to support the finding, We have defined
‘substantial evidence’ as credible evidence
which is of sufficient quality and probative
value to enable a person of reasonable
caution to support a conclusion,
In re Grievance Arbitration Between State of
Haw. Org. of Police Officers, 185 Hawai'i 456,
461-62, 858 P.3d 998, 1008-04 (2015) (quoting
Daiichi Haw. Real Estate Corp. y. Lichter,
108 Hawai'i 325, 887, 82 P.8d 411, 423 (2008).
HH «Conclusions of law are ordinarily
reviewed under the right/wrong standard,
Estate of Klink ex rel. Klink y. State, 118
Hawai'i 882, 351, 152 P.8d 504, 523 (2007).
Thus, a conclusion of law that is supported
by the trial court’s findings of fact and re-
flects an application of the correct rule of law
will not be overturned. Id, However, when a
conclusion of law presents mixed questions of
fact and law, we review it under the clearly

1, The O’Gradys assert that this error is reflected
in the circuit court's findings and conclusions, in
particular, FOFs 6, 14, 15, 16, 17, 18, 19, 20, 21,
and COLs 3-4,

2. The O’Gradys assert that this error is reflected
in the circuit court's findings and conclusions, in
particular, COLs 5 and 6, and also in all other
findings and conclusions the circuit court relied
on in determining liability, including FOFs 6, 14,
15, 16, 17, 18, 19, 20, 21, and COLs 3-4,

43

erroneous standard because the court’s con-
clusions are dependent on the facts and cir-
cumstances of each individual case. Id,

Il. DISCUSSION

The O’Gradys raise two points of error on
appeal, First, the O’Gradys assert that the
circuit court erred in holding that the State’s
breach of its duty of care was not a legal
cause of the O’Gradys’ injuries.! Second, the
O’Gradys assert that the circuit court erred
in relying on the discretionary function ex-
ception to support its decision?

Hl In order to establish a defendant's
liability for negligence, a plaintiff must prove
(1) a duty recognized by the law that the
defendant owed to the plaintiff; (2) a breach
of the duty; (8) that the defendant’s breach
was the legal cause of the plaintiffs harm;
and (4) actual damages. See, eg., Doe Par-
ents No, 1 v. Dep’t of Edue., 100 Hawai'i 34,
68, 58 P.8d 645, 579 (2002), In this case, we
only review the third of these four ele-
ments—legal cause—as the circuit court’s
conclusions with respect to duty and breach
have not been raised on appeal and the lower
court has not yet ruled on the issue of dam-
ages, We also address the application of the
discretionary function exception to this case.

A. Causation Analysis

HM This court has long required a
plaintiff to prove that the defendant’s con-
duct was the legal cause of his or her inju-
ries as one of the prima facie elements of
negligence. See Mitchell v. Branch, 45 Ha-
wail 128, 1832, 363 P.2d 969, 973 (1961)
(adopting the Restatement (First) of Torts
§ 431’s (Am. Law. Inst. 1934) [hereinafter
First_ Restatement] definition of “legal
cause” as the “best definition and the most
workable test of proximate or legal cause”)?

ee

44

“Legal cause” refers to a cause that is legal-
ly sufficient to result in liability. See Black’s
Law Dictionary 265 (10th ed. 2014) (defining
“proximate cause”). Our law does not hold a
defendant liable for every possible result of
his or her conduct as the causal sequence
resulting from a single action could theoreti-
cally continue indefinitely and particular poli-
cy concerns weigh in favor of limiting liabili-
ty under certain circumstances. The range of
injuries that a defendant is liable for is
sometimes referred to as the scope of the de-
fendant’s liability. Thus, the term “legal
cause” embodies both the concept of factual
causation and the defendant’s scope of liabili-
ty.4 See Restatement (Third) of Torts: Phys.
& Emot, Harm Special Note on Proximate
Cause (2010) [hereinafter Third Restate-
ment] (explaining that the term “legal cause”
encompasses both factual cause and scope of
liability),

HE We apply a two-step analysis for
determining whether the defendant’s conduct
was the legal cause of the plaintiff's injuries;
the defendant’s conduct is the legal cause of
the harm to the plaintiff if

(a) [the actor’s] conduct is a substantial

factor in bringing about the harm, and

(b) there is no rule of law relieving the

actor from liability because of the manner

in which his [or her] negligence has result-

ed in the harm,
Taylor-Rice v. State, 91 Hawai‘i 60, 74, 979
P.2d 1086, 1100 (1999) (format altered) (quot-
ing Mitchell, 45 Haw. at 182, 363 P.2d at
973). This analysis is often referred to in our
caselaw as the Mitchell test. The first prong
of the Mitchell test involves a factual deter-
mination—whether the defendant's conduct
‘was a substantial factor in bringing about the
harm. McKenna _v. Volkswagenwerk Ak-
tiengesellschaft, 57 Haw. 460, 465, 558 P.2d
1018, 1022 (1977). And the second prong in-
volves a legal determination—whether there

4, It is noted that our caselaw often refers to the
existence of factual causation as the presence of
the requisite “causal connection” or “causal re-
lationship.” See, e.g., Winfrey v. GGP Ala Moana

is any rule of law relieving the actor from
liability because of the manner in which the
harm resulted from the conduct. Id. The
requirement that a plaintiff prove legal cau-
sation may be better understood as a re-
quirement that the plaintiff prove that the
harm was a legal result of the defendant’s
conduct.

1. The First Mitchell Prong: Whether
the defendant’s conduct _was a _sub-
stantial factor in bringing about the
harm,

Hs In establishing legal causation, the
plaintiff must first establish that the requi-
site factual, causal connection is present un-
der the first Mitchell prong—“the negligence
of the defendant was more likely than not a
substantial factor in bringing about the result
complained of.” See McKenna, 57 Haw. at
465-66, 558 P.2d at 1022. “The inquiry under
the first arm of the Mitchell test is essential-
ly whether the act of the defendant was a
cause in fact of the plaintiffs injury.” Id.

The substantial factor analysis comes from
the First Restatement and was adopted in
Mitchell, 45 Haw. at 182, 363 P.2d at 978. In
applying the first prong of the Mitchell test,
the court elaborated that the defendant's
conduct “need not have been the whole cause
or the only factor”—“[i]t was enough that his
[or her] negligence was a substantial factor
in causing plaintiff's injuries.” Id, at 182, 363
P.2d at 978 (citing First Restatement §§ 431,
483, 435); see also Taylor-Rice, 91 Hawai'i at
74, 979 P.2d at 1100 (same); Knodle v. Waik-
iki Gateway Hotel, Inc., 69 Haw. 376, 389-90,
742 P.2d 877, 886 (1987) (observing that our
Jaw does not require that the event would not
have occurred absent the conduct but instead
covers the situation where two or more
causes contribute to the harm),

or contributory negligence unless there is a caus-
al relationship between the intoxication and the
accident,” (second alteration in original) (quot-
ing McKenna v. Volkswagenwerk Aktiengesells-

LLC, 130 Hawai'i 262, 272, 308 P.3d 891, 901
2013) (noting that there was no “causal connec-
tion” between the defendant's conduct and plain-
tiff's injuries); Taylor-Rice v. State, 91 Hawai'i
60, 76, 979 P.2d 1086, 1102 (1999) (“[Diriving

. while under the influence of intoxicating
liquor does not constitute actionable negligence

chaft, 57 Haw. 460, 468, 558 P.2d 1018, 1024
(1977); Mitchell, 45 Haw. at 131, 363 P.2d at
973 (‘"To impose liability on a negligent party for
an injury to another, there must be a causal
connection between the negligent act and the
injury.”).

The comments to the First Restatement
provide insightful commentary on the mean-
ing of “substantial factor.” The comments
indicate that the term “substantial” was
meant to avoid the imposition of liability for
conduct that has an insignificant impact in
creating the causal circumstances leading to
the injuries:

The word “substantial” is used to denote

the fact that the defendant’s conduct_has

such an effect in producing the harm as to

Jead_reasonable_men to regard it as a

cause, using that word in the popular sense

in which there always lurks the idea of
responsibility, rather than in the so-called

“philosophic sense,” which includes every

one of the great number of events without

which any happening would not have oc-
curred. Each of these events is a cause in
the so-called “philosophic sense,” yet the

45

consider to have contributed to the harm.
Raven H. v. Gamette, 157 Cal.App.4th 1017,
68 Cal.Rptr.3d 897, 901 (2007) (“A substantial
factor in causing harm is a factor that a
reasonable person would consider to have
contributed to the harm. It must be more
than a remote or trivial factor.” (quoting
Judicial Council of California Civil Jury In-
struction § 430 (2007); Komlodi v. Picciano,
217 N.J. 887, 89 A.3d 1284, 1254 (2014) (“A
substantial factor is one that is ‘not a remote,
trivial or inconsequential cause.” (quoting
New Jersey’s Model Jury Charge (Civil)
§ 6.13 (May 1998))); Verdicchio v. Ricca, 179
NJ. 1, 848 A.2d 1042, 1056 (2004) (“Conduct
is a substantial factor if it would ‘lead the
trier of fact, as a reasonable person, to re-
gard it as a cause, using that word in the
popular sense.’” (quoting J.D. Lee & Barry
A. Lindahl, Modern Tort Law: Liability &

effect of many of them is so insignificant

Litigation § 4.08 (West Grp. 2002))); Jeter v.

that no ordinary mind would think of them

Owens-Corning Fiberglas Corp., 716 A.2d

a8 causes.
First Restatement § 4381 emt. a (emphases
added). In distinguishing between substantial
and remote causes, the drafters of the First,
Restatement used the term “substantial fac-
tor” to denote that the defendant’s conduct
may be reasonably regarded as a cause of
the injury. Id. This is reiterated in a subse-
quent comment from the First Restatement

688, 636 (Pa. Super. Ct. 1998) (moting that
the Pennsylvania Supreme Court has “cited
with approval the comments to § 481 of the
Restatement which defined ‘substantial fac-
tor’ as ‘conduct [that] has such an effect in
producing the harm as to lead reasonable
men to regard it as a cause, using that word
in the popular sense’” (quoting Restatement,
Wecond) of Torts § 431 (1965) [hereinafter

in which the drafters note that the relevant
issue is “whether the defendant’s negligence
has a substantial as distinguished from a
merely negligible effect in bringing about the
plaintiff's harm.” Id. § 481 emt, b.6 Thus, the
drafters of the First Restatement did not
contemplate that the substantial factor re-
quirement would operate as a significant hur-
die to plaintiffs in proving legal causation.

Similarly, many jurisdictions recognize
that the term “substantial” denotes a factor
that has had more than a negligible or trivial
impact on the circumstances leading to the
eause of the injury; and, thus, a substantial
factor is one that a reasonable person would

5. The comment states the following:
In such a case, the question, whether the
defendant’s negligence has a substantial as
distinguished from a merely negligible effect
in bringing about the plaintiff's harm, does
not arise if the testimony clearly proves that
the harm is from a cause other than the

actor's negligence. Indeed, the testimony of-
ten makes it clear that, if the defendant's

Second Restatement] ); Lewis v. State, 73
S.W.8d 88, 93 (Tenn. Ct. App. 2001) (distin-
guishing substantial causes from those that
are “merely causes in the ‘philosophic
sense’ ”); State v. Rash, 260 Wis.2d 369, 659
N.W.2d 189, 192 (Wis. Ct. App. 2008) (“The
phrase ‘substantial factor’ denotes that the
defendant's conduct has such an effect in
producing the harm as to lead the trier of
fact, as a reasonable person, to regard it as a
cause, using that word in the popular sense.”
(quoting Merco Distrib. Corp. v. Commercial
Police Alarm Co., 84 Wis.2d 455, 267 N.W.2d
652, 654 (1978))); see also Menne v. Celotex
Corp., 861 F.2d 1458, 1459 (10th Cir. 1988)

conduct had any effect, the effect was sub-
stantial. It is only where the evidence per-
mits a reasonable finding that the defen-
dant’s conduct had some effect that the
question whether the effect was substantial
rather than negligible becomes important.
First Restatement § 431 cmt. b (emphasis add-

46

(observing that Nebraska uses the term
“substantial” to distinguish from situations
where the causation “is so slight as not to be
a substantial factor”); Barrett _v, Harris, 207
Ariz, 874, 86 P.8d 954, 961 (Ariz, Ct. App.
2004) (noting that the Arizona Supreme
Court has indicated that “if it could be as-
sured that jurors understood the term ‘sub-
stantial factor’ to mean not imaginary, ilu-
sive or insignificant, the court would not
dispute its use” (citing McDowell vy. Davis,
104 Ariz. 69, 448 P.2d 869, 871-72 (1968))).

This feature of negligence law was further
clarified by the Third Restatement. The
Third Restatement no longer employs the
“substantial factor” terminology, § 36 cmt. a,
providing instead for the following limitation
on the defendant’s liability: “When an actor’s
negligent conduct constitutes only a trivial
contribution to” the circumstances that factu-
ally cause the harm under § 27, “the harm is
not within the scope of the actor’s liability.”
Id. § 36, Accordingly, instead of using the
“substantial factor” formulation, the Third
Restatement defines a defendant's scope of
Hability to exclude liability for injuries under
cireumstances where the defendant’s conduct
was only a trivial contribution to producing
the harm and there were multiple sufficient
causes of the harm.$

In light of the adoption of the substantial
factor analysis in Mitchell for legal causation,
this court has rejected jury instructions that
deviate from the substantial factor analysis,
In Knodle, the trial court instructed the jury
that legal cause of an injury was defined as
“that cause which in direct, unbroken se-

6. The Third Restatement also no longer uses the
term “legal cause,” which the previous restate-
ments used to encompass the two distinct inqui-
ries of factual cause and proximate cause. Third
Restatement § 26 cmt, a. The comments to the
Thi statement note the “importance of dis-
tinguishing clearly between ‘factual cause’ and
‘proximate cause.’” Id. Accordingly, the Third
Restatement separates “factual cause” from
“proximate cause” (also referred to as the defen-
dant's ‘scope of liability’’) into separate elements
of the negligence tort,

The Third Restatement’s revised approach to cau-
sation “has been embraced by a number of
courts and, properly understood, merely repre-
sents a shift in terminology.” See Drumgold v.

quence, produced the injury, and without
which the injury would not have occurred,”
69 Haw. at 392, 742 P.2d at 387. Knodle
rejected this instruction because it was es-
sentially “a variant of the ‘but for’ rule” and
thus placed “emphasis on ‘factual quantum’
rather than ‘egal significance’ in the circum-
stances,” both of which were contrary to the
“substantial factor” test adopted by this
court in Mitchell. Id. Additionally, Knodle
expressed concern that the trial court’s cau-
sation instruction would preclude recovery
where harm resulted from multiple causes,
none of which would have been sufficient to
cause the injury on its own. See id, at 389,
742 P.2d at 886. Indeed, such a standard
would be contrary to Mitchell’s substantial
factor analysis—that the defendant’s conduct
“need not have been the whole cause or the
only factor” because it is sufficient if the
defendant's negligence “was a substantial
factor in causing plaintiffs injuries.” Mitch-
ell, 45 Haw. at 182, 863 P.2d at 973. The
Knodle court clarified that our law recog-
nizes that a single injury may be the result of
multiple contributing causes. See also Mon-
talyo v, Lapez, 77 Hawai'i 282, 288, 884 P.2d
845, 361 (1994) (noting that a jury instruction
focusing only on actual causation without the
“substantial factor” language was not helpful
to the jury because it was an insufficient
explanation of the requisite factual causation
as defined by Mitchell),

Tn summary, the term “substan-
tial factor” is not meant to serve as a signifi-
eant burden to plaintiffs in establishing factu-
al causation, The first prong of the Mitchell

uinski, 774 N,W.2d 829, 837 (Iowa 2009)); see
‘also June, 577 F.3d at 1239 (noting that the
Third Restatement'’s treatment of multiple causes
is “more precise, and clearer,” than the Second
Restatement and that the “ultimate legal stan-
dards in the two Restatements are essentially
identical for [the court's] purposes”); Otal Invs.
Ltd. v, M.V. Clary, 494 F.3d 40, 59 (2d Cir. 2007)
(pplying the Third Restatement’s analysis for
factual causation and scope of liability); Reigel y,
SavaSeniorCare L.L.C., 292 P.3d 977, 987 (Colo,
App, 2011) (agreeing with the Tenth Circuit's
decision in June, supra, and holding that Colora-
do required that plaintiff establish “but-for” cau-
sation rather than Colorado’s “substantial risk”
test); Ford Motor Co. v. Boomer, 285 Va. 141,

Callahan, 707 F.3d 28, 50 n.15 (Ist Cir, 2013)

Giting June v. Union Carbide Corp, $77 F.3d
1234, 1240 (10th Cir. 2009); Thompson v. Kac-

736 S.B,2d 724, 730 (2013) (agreeing with the
Third Restatement's elimination of the “substan-
tial factor” terminology).

test requires that the defendant’s conduct
was a substantial, as opposed to a negligible
or trivial, factor in causing the harm. In
other words, a substantial factor is one that a
reasonable person would consider to have
contributed to the harm, The purpose of the
substantial factor requirement is to preclude
liability for injuries that are only tenuously
connected to the defendant’s conduct because
the conduct would not be considered by a
reasonable person to have contributed to the
harm,

2. The Second Mitchell Prong: Wheth-
er_any rule of law relieves the actor
from liability because of the manner
in which the harm resulted from the
defendant’s conduct.

Ws The second part of the causation
analysis considers whether there are policy
concerns or rules of law that would prevent.
imposition of liability on the negligent party
even though the actor’s negligence was a
substantial factor in bringing about the
harm. Estate of Klink ex rel. Klink v. State,
118 Hawai'i 382, 362, 152 P.8d 504, 584
(2007). These rules and policy concerns of the
second Mitchell prong are based on the man-
ner in which the defendant's negligence
caused the harm, Taylor-Rice, 91 Hawai'i at
74, 979 P.2d at 1100. Thus, the second Mitch-
ell prong limits the range of injuries a defen-
dant will be held accountable for, and, thus, it
is “actually a rule of restrictive liability con-
sidered as a question of causation.” Mitchell,
45 Haw, at 183, 368 P.2d at 974,

HH One of the most common rules of
Jaw that is applied under the second Mitchell
prong is the rule with respect to superseding
causes.’ A separate act that occurs after the
defendant’s culpable conduct will be consid-
ered a superseding cause that relieves the
defendant of liability if the second act

7. Aside from superseding causes, other “rule[s]
of law relieving the actor from liability,” Taylor.
Rice, 91 Hawai'i at 74, 979 P.2d at 1100, include
cases where “the tortious aspect of the actor's
conduct was of a type that does not generally
increase the risk of th{e] harm [that it caused],”
Third Restatement § 30; certain applications of
the “preexisting conditions and unforeseeable
harm” rule, id. § 31 & cmt. c; the limitations to
the “rescue doctrine”, id. § 32 & cmt. c; the
exception to the rule governing the scope of
liability for intentional and reckless tortfeasors,
id. § 33 & cmt, f; and the limitations to the rule

47

“preak[s] the chain of causation.” See Taylor-
Rice, 91 Hawai'i at 76, 979 P.2d at 1102.
Whether a later act is considered to be a
superseding cause depends on whether the
second act was not foreseeable at the time
the defendant’s conduct occurred. Id. (ob-
serving that a “superseding cause” is consid-
ered to “break the chain of causation” where
“ander no rational interpretation of the evi-
dence[] could the later act of negligence
have been reasonably foreseen” (quoting
McKenna, 57 Haw. at 466, 558 P.2d at 1022)).

HM Although the plaintiff bears the bur-
den of proving each of the elements of negli-
gence by a preponderance of the evidence,
including both prongs of the Mitchell test,
eg. Doe v, Grosvenor Props. (Haw.) Ltd., 78
Haw. 158, 169, 829 P.2d 512, 518 (1992), the
plaintiff will ordinarily satisfy his or her evi-
dentiary burden with respect to legal cansa-
tion by establishing, by a preponderance of
the evidence, that the defendant’s conduct.
was a substantial factor in bringing about the
harm. In other words, although the plaintiff
is required to establish both prongs of legal
causation as part of its prima facie case,
additional facts are typically not involved re-
garding the second prong, See Third Re-
statement § 29 cmt. a (“Although scope of
liability is an element of a prima facie case,
facts beyond those established for the other
elements of the tort are almost never in-
volved.”), This is because the second prong
“functions as a limitation on liability in a
select group of cases, operating more like an
affirmative defense, although formally it is
not one,” Id,

HMM Because the second Mitchell
prong functions as a rule of restrictive liabili-
ty, a plaintiff is not required to prove the
non-application of every possible rule or poli-
cy that could theoretically apply to a particu-
lar case’ For example, a plaintiff is not

that makes actors liable for enhanced harm due
to efforts of third parties to render medical or
other aid, id. § 35 & cmt. c, See also Second
Restatement §§ 435-61.

8, The ICA has previously held "that, although the
plaintiff must prove that no other cause is
superseding cause ..., the ‘burden arises only
when defendant produces sufficient evidence to
raise the issue.” Keomaka v. Zakaib, 8 Haw.
App. 518, 530, 811 P.2d 478, 485-86 (1991)
(quoting Leyson v. Steuermann, 5 Haw.App. 504,
517 n.11, 705 P.2d 37, 47 n.11 (1985), overruled

48

required to prove the absence of a supersed-
ing cause as a part of its prima facie case of
negligence, Indeed, evidence regarding a su-
perseding cause would only become relevant
if the circumstances leading to the injuries in
a particular case indicate that a superseding
cause may have been involved,

8. The circuit _court_decision_in_this

£886,

In reviewing the circuit court’s findings
and conclusions concerning causation, it is
clear that the circuit court misapprehended
the relevant legal standard. The court made
no finding as to whether the State’s negli-
gence was a substantial factor in bringing
about the O’Gradys’ injuries. Instead, it ap-
pears that the circuit court considered
whether performance of the State’s duty
would have completely prevented any injury
to the O’Gradys. Additionally, the circuit
court may have combined the causation ele-
ment with the breach element by requiring
that the O’Gradys prove additional “wrongful
conduct” that caused their injuries, and the
court may also have blended the causation
element with the duty element by evaluating
whether the rockfall was foreseeable.

a. Cirenit Court’s Determination that the
O’Gradys Failed to Prove that Per-
formance of the State’s Duty Would
Have Prevented the Rockfall From
Ocewring

HM The circuit court appears to have
required the O’Gradys to prove that the

on other grounds by Bernard v, Char, 79 Hawai'i
362, 903 P.2d 667 (1995)). This is similar to the
burden-shifting approach that this court adopted
in strict products liability cases, in which plain-
tiffs would “shoulder the ultimate burden of
proof,” Stender v. Vincent, 92 Hawai'i 355, 373,
992 P.2d 50, 68 (2000), or “more precisely, the
risk of non-persuasion,” on the issue of substan-
tial change only after the defendant has “al-
lege[d] the substantial changes he {or she] ex-
pects [the] plaintiff to try to disprove,” id. at 372,
992 P.2d at 67 (quoting Southwire Co. v. Beloit
BE. Corp., 370 F.Supp. 842, 857 (E.D. Pa. 1974).
‘We agree with the ICA’s placement of the burden
of proof with respect to superseding causes in
negligence cases. Just as plaintiffs in strict prod-
ucts liability cases should not be saddled “with
the burden of proving a negative from the out-
set,” so should plaintiffs not have the initial
burden as to superseding causes in negligence
cases. Id, at 373, 992 P.2d at 68. Thus, in negli-

State’s fulfillment of its duty of care would
have prevented the rockfall from occurring.
In finding of fact (“FOF”) 18, the cireuit
court found that the State should have un-
dertaken several specific measures “in order
to reasonably address the danger of rockfalls
adjacent to the State highways.” ° This find-
ing is consistent with the circuit court’s con-
clusion that the State breached its duty of
care “by not having a routine, coordinated
system of rockfall mitigation at the opera-
tional level.” The circuit court also found in
FOF 20 that the O’Gradys “failed to prove”
that, if the State performed its duty by com-
plying with the listed measures in FOF 13,
“this would have probably resulted in the
[State] taking action to eliminate the rockfall
hazard” prior to the O’Gradys’ accident. In
other words, the circuit court determined
that the O’Gradys did not prove that the
performance of the State’s duty would have
prevented the rockfall from occurring.

TH As discussed, the causation element
of negligence requires proof that the defen-
dant’s conduct was a legal cause of the harm.
The first Mitchell prong requires a determi-
nation that the defendant’s conduct was a
substantial factor in bringing about the
harm, Taylor-Rice, 91 Hawai'i at 74, 979 P.2d
at 1100. Instead of considering whether the
State’s conduct was a substantial factor in
bringing about the harm, the cireuit court
considered whether the State’s performance
of its duty would have prevented the rockfall
from occurring. The circuit court’s analysis is
essentially the same as the jury instruction

gence cases, the defendant bears the initial bur-
den of introducing “evidence to raise the issue of
superseding cause” before the ultimate burden
could shift to the plaintiff of disproving the al-
leged superseding cause. Keomaka, 8 Haw.App.
at 530, 811 P.2d at 485-86.

9. The circuit court found that in order to reason-
ably address the danger of rockfalls adjacent to
State highways, the Hawai'i District of the State
should have

(a) had a system of routine, ongoing main-
tenance, (b) trained its maintenance person-
nel to recognize potential rockfall hazards,
(c) had the ability to undertake rockfall pre-
vention projects which reasonably fell within
a roadway maintenance budget, and (d) con-
sulted regularly with a geotechnical engineer
who had information regarding the findings
of the RHRS project in order to integrate
information held between them.

that this court rejected in Knodle in that it
frames the issue of legal cause as “that ‘with-
out which the injury would not have oc-
curred.’” 1° See Knodle, 69 Haw. at 889, 392,
742 P.2d at 386-87 (rejecting a rule that “the
defendant’s conduct is not a cause of the
event[] if the event would have occurred
without it”). A court may not frame its legal
causation analysis in a manner that does not
allow for multiple causes of a single injury,
Id, at 389-90, 742 P.2d at 386-87 (observing
that under the Mitchell test, the defendant’s
conduet “need not have been the whole cause
or the only factor” and that multiple causes
may each be a cause even if each cause alone
would not have been sufficient to cause the
harm (quoting Mitchell, 45 Haw. at 182, 363
P.2d at 973)).

Additionally, the circuit court’s apparent
assumption that the only means to prevent
the accident was to eliminate the rockfall is
also flawed because, had the State performed
the duties listed in FOF 18, the State may
have taken other precautions to avoid the
accident such as warning travelers of the
potential hazard or closing the road. In any
event, the analysis under the first prong of
the Mitchell test is whether the State’s con-
duct was a substantial factor in causing the
O’Gradys’ injuries based on the facts pre-
sented, As the Knodle court explained,

It was error ... to speak of legal cause as

that “without which the injury would not

10. In Knodle, the trial court defined “proximate
cause” of an injury as “‘that cause which in
direct, unbroken sequence, produces the injury,
and without which the injury would not have
occurred.” 69 Haw. at 392, 742 P.2d at 387.

11. FOFs 15, 16, and 17 concerned the cost of
eliminating the rockfall hazard and included the
circuit court's assessment that the O'Gradys
“failed to present evidence” sufficient for the
court to determine the cost of eliminating the
rockfall hazard. In FOF 18, the court found that
the O’Gradys “failed to prove” that “the Hawai'i
District had employees and equipment to elimi-
nate the rockfall hazard.” In FOF 19, the court
found that the O’Gradys “failed to prove” that
“the Hawai'i District had the funds available to
engage a private entity to eliminate the rockfall
hazard at the Accident Site.”

12, Pulawa emphasized that this court has consid-
ered relevant the following factors in the course
of determining whether to impose a duty:

{Whether a special relationship exists, the
foreseeability of harm to the injured party,
the degree of certainty that the injured party

49

have occurred” in the face of our holding in

Mitchell _v, Branch, where in affirming a

judgment against the defendant we said

that “[iJt was enough that his negligence
was a substantial factor in causing plain-
tiff's injuries.”
Knodle, 69 Haw. at 892, 742 P.2d at 387
(second alteration in original) (quoting Mitch-
ell, 45 Haw. at 182, 363 P.2d at 978).

HE The circuit court’s analysis may have
been influenced by a concern that the State
did not have funds available to take appropri-
ate remedial measures, as FOF's 15-19 con-
sidered the availability of funds and equip-
ment to eliminate the rockfall hazard." The
cireuit court appears to have reasoned that,
even if the State had satisfied its duties, the
accident would have occurred anyway be-
cause of the lack of funds and equipment to
properly remedy the accident site. However,
the State’s conduct “need not have been the
whole cause or the only factor in bringing
about the harm.” See Taylor-Rice, 91 Hawai'i
at 74, 979 P.2d at 1100; Knodle, 69 Haw. at
389-90, 742 P.2d at 886. Further, a contention
that the State lacked the necessary funds to
remedy a particular hazard may be one of
the many factors—each of which is not out-
come-determinative on its own—that are rel-
evant to the balancing analysis generally uti-
lized in determining whether to impose a
duty to remediate that hazard, but it is not
part of the causation analysis.!2 In this case,

suffered injury, the closeness of the connec-
tion between the defendants’ conduct and
the injury suffered, the moral blame attached
to the defendants, the policy of preventing
harm, the extent of the burden to the defen-
dants and consequences to the community of
imposing a duty to exercise care with result-
ing liability for breach, and the availability,
cost, and prevalence of insurance for the risk
involved,
Pulawa v. GIE Hawaiian Tel, 112 Hawai‘i 3, 12,
143 P.3d 1205, 1214 (2006) (alteration in origi-
nal) (quoting Blair v. Ing, 95 Hawai'i 247, 260,
21 P.3d 452, 465 (2001). Notably, the burden to
defendants and the consequences of imposing a
duty to exercise care with resulting liability are
merely components of the multifactor analytical
framework. Id. Pulawa also reiterates that the
determination of whether duty is owed requires
“the considerations of policy which favor the
{plaintiff’s] recovery against those which favor
limiting the [defendant's] liability” and that
“{tJhe question of whether one owes a duty to
another must be decided on a case-by-case ba-
is.” Id. (alterations in original) (quoting Blair,

50 Es

the issue of duty is not before us. See gener-
ally Taylor-Rice, 91 Hawai'i at 70, 979 P.2d at
1096 (defining the State’s duty with respect
to designing, constructing, and maintaining
public highways).

Thus, the O’Gradys were not required to
prove that the State’s performance of its
duty would have probably prevented the acci-
dent from occurring or to refute the hypo-
thetical that, even if the State had satisfied
its duties, the accident would have occurred
anyway. Rather, it was necessary for the
O’Gradys to establish that the State’s con-
duet was a substantial factor in bringing
about their injuries. To the extent that there
were other causes of the O’Gradys’ injuries,
the plaintiffs only needed to prove that the
State’s tortious conduct was “a substantial
factor in bringing about the harm.” E.g., id.
at 74, 979 P.2d at 1100. Accordingly, the
eireuit court erred to the extent it required
the O’Gradys to prove that the State’s satis-
factory performance of its duties would have
likely resulted in elimination of the rockfall
hazard. By extension, the circuit court’s
FOFs 18, 19, and 20 are clearly erroneous as
they appear to be based on a misapprehen-
sion of the law.

b. Circuit Court’s Conclusion that the
O’Gradys Failed to Prove that the
State’s Wrongful Conduct Caused the
Injuries

Hs The circuit court may also have
combined the causation element with the
breach element, In FOF 21, the cireuit court
concluded that the O’Gradys “failed to prove
that wrongful conduct on the part of the

State, if any, was a substantial factor in

causing the March 8, 2007 accident and their

consequent injuries.” Thus, the circuit court’s
finding may have been based on an under-
standing that the O’Gradys were required to
prove that the State engaged in “wrongful
conduct” and that this “wrongful conduct”
was a substantial factor with respect to the

O’Gradys’ injuries. However, under Hawaii

law, the State may be held liable for breach

of a duty to mitigate a hazard without a

95 Hawai'i at 259-60, 21 P.3d at 464-65); see

also Molfino v. Yuen, 134 Hawai'i 181, 184-85,

339 P.3d 679, 682-83 (2014) (“Whether a duty

exists is a ‘question of fairness that involves a
weighing of the nature of the risk, the magnitude

showing of “wrongful conduct.” For example,
in Klink, the State breached its “duty to
maintain the highway in a reasonably safe
condition, which included the duty to mitigate
and warn of known hazards.” 113 Hawai'i at
856-61, 152 P.8d at 528-88. The Klink court
determined that the trial court “clearly erred
when it found that the State’s failure to
install [the necessary corrective measure], to
take other remedial action, or to warn ade-
quately of the severity of the hazard faced by
motorists on the bypass during moderate to
heavy rains was not a substantial factor in
bringing about” the plaintiffs death. Id. at
862, 152 P.8d at 584. Thus, the appropriate
analysis was whether the State’s breach was
a substantial factor in bringing about the
harm, not whether affirmative “wrongful con-
duct” on the State’s part was a substantial
factor in bringing about the harm. See also
Kaho‘ohanohano v. Dep't of Human Servs.
117 Hawai'i 262, 306, 178 P.8d 588, 582 (2008)
(affirming circuit court finding that the De-
partment of Human Services was the legal
cause of plaintiff's injuries based on its fail-
ure to conduct a reasonable investigation into
a report of child abuse); Taylor-Rice, 91 Ha-
wail at 75, 979 P.2d at 1101 (determining
that the cireuit court did not err in finding
factual causation because the State’s breach
of its duty to maintain a guardrail in a rea-
sonably safe condition could be deemed a
substantial factor in causing the plaintiff's
injuries). Accordingly, to the extent that the
civeuit court required the O’Gradys to prove
an affirmative, wrongful act in addition to the
State’s breach, it was error, and the circuit
court’s FOF 21 is clearly erroneous.

e. Circuit Court’s Finding That the
O’Gradys Failed to Establish the
Imminence of the Rockfall

HMM The circuit court may have also
overlapped the issue of causation with the
issue of whether a duty was owed. In FOF
14, the circuit court found that the O’Gradys
failed to establish the foreseeability of the
roelxfall:

of the burden of guarding against the risk, and

the public interest in the proposed solution

(quoting Hao v. Campbell Estate, 76 Hawai'i 77,
80, 869 P.2d 216, 219 (1994))).

However, Plaintiffs have failed to prove

that from December 22, 2004 until March

8, 2007, it was reasonably foreseeable that.

a rockfall at the Accident Site was so

imminent that it was necessary for the

State to immediately address the rockfall

potential.

Since the circuit court also concluded that
the State breached its duty to the O’Gradys
to maintain the highway so that it was rea-
sonably safe from rockfalls, it appears that
the circuit court considered FOF 14 as rele-
vant to the issue of causation,

HE Foreseeability of the risk associ-
ated with one’s conduct is an issue that re-
lates to the duty of care. In Pulawa v. GTE
Hawaiian Tel, this court discussed the con-
cept of foreseeability in the context of duty:
“The test of foreseeability ‘is whether there
is some probability of harm sufficiently seri-
ous that a reasonable and prudent person
would take precautions to avoid it’” 112
Hawai'i 8, 11-14, 148 P.8d 1205, 1218-16
(2006) (quoting Knodle, 69 Haw. at 388, 742
P.2d at 385 (1987)). Thus, foreseeability, as it
relates to duty, is a question of law that
takes into account the presence and extent of
the risks associated with particular conduct.
1d.; see_also Third Restatement § 7 cmt. j
(“A no-duty ruling represents a determina-
tion, a purely legal question, that no liability
should be imposed on actors in a category of
cases,”),

Hs“ Foreseeability in the context of
legal causation is an issue that arises by
application of the second prong of the Mitch-
ell test; it is not relevant to the first prong of
the Mitchell test. For example, the question
of foreseeability arises with respect to a su-
perseding or intervening cause, which raises
the issue of whether a subsequent act or
oceurrence in the causal sequence was fore-
seeable. If the subsequent act or occurrence
was not reasonably foreseeable under any
rational interpretation of the evidence, then
it is considered to “break the chain of causa-
tion,” and the defendant is relieved of liabili-

13. The O'Gradys’ opening brief indicates that
this finding concerns the issue of causation, and
it does not appear that the State’s answering
brief disagrees,

14, It is noted that our law does not support the
proposition that a plaintiff must prove that a risk

51

ty. Taylor-Rice, 91 Hawai'i at 76, 979 P.2d at
1102 (quoting McKenna, 57 Haw. at 466, 558
P.2d at 1022), Thus, assuming that the defen-
dant’s conduct breached a duty of care to the
plaintiff and that this conduct was a substan-
tial factor in causing the plaintiffs injuries,
the remaining issue is whether a defendant
should be relieved of liability because a sub-
sequent act or occurrence was not reasonably
foreseeable under any rational view of the
evidence, Id; see Third Restatement § 34
emt. e; see _also Pulawa, 112 Hawai'i at 18,
143 P.3d at 1215 (noting that foreseeability
that pertains to legal cause “relates to re-
moteness rather than the existence of a
duty”),

HM Accordingly, as FOF 14 concerns the
foreseeability of the risks associated with the
defendant’s conduct (ie. that the plaintiffs
failed to prove the “rockfall at the Accident
Site was so imminent that it was necessary
for the State to immediately address the
rockfall potential”), it is not relevant to the
issue of causation, In other words, the circuit.
court’s reference to the imminence of the
rockfall relates to the foreseeability of the
risks associated with the State’s conduct, and
any such consideration of the foreseeability
of the risks relates to the issue of duty and
not causation. Accordingly, to the extent the
court considered FOF 14 as related to the
question of causation, it was error.4

Further, there does not appear to be any
superseding or intervening cause asserted by
the State that would relieve it from liability
under the second prong of the Mitchell test,
The court in Klink determined that the
State’s breach of its duty of care to maintain
the roads in a reasonably safe condition at
the site of the accident was the legal cause of
a motorist’s injuries where water runoff cre-
ated sheet flow. Klink, 118 Hawai'i at 361-63,
152 P.3d at 583-35. In considering the second
arm of the Mitchell analysis—whether there
were any policy concerns or rules of law that.
would prevent imposition of lability—the

is imminent in order for a reasonably prudent
person to protect against it. The question of
foreseeability as it relates to duty “is whether
there is some probability of harm sufficiently
serious that a reasonable and prudent person
would take precautions to avoid it.” Pulawa, 112
Hawai'i at 12, 143 P.3d at 1214.

52

court observed that the State is not the
insurer of absolute personal safety on high-
ways. Id. at 862, 152 P.8d at 534, However,
Klink concluded that the harm fell within the
State's seope of liability, noting that the
State did not allege any contributory negli-
gence or any other superseding cause that
would relieve the State of liability, Id.

Similar to Klink, the evidence in this case
does not indicate that there is contributory
negligence or any superseding or intervening
event that would relieve the State of liability.
Nonetheless, the State argues that it should
be relieved of any liability for its breach of
its duty of care because it has articulated a
reasonable justification for the delay in miti-
gating the hazard. The State argues that this
ease is distinguishable from Klink because
there are other sites on the Island of Hawaii
that are more dangerous than the accident
site, the State lacked the necessary funding
and resources to mitigate the hazard, and the
State “conducted regular highway inspec-
tions and received other reports of potential
but not necessarily imminent rockfall haz-
ards.” These justifications, however, relate to
whether the State owed a duty of care and
whether that duty was breached, and the
circuit court’s conclusions as to duty and
breach have not been raised on appeal. See
Pulawa, 112 Hawai'i at 12, 143 P.8d at 1214
(noting factors a court considers in determin-
ing whether to impose a duty including “the
moral blame attached to the defendants,”
“the policy of preventing harm,” and “the
extent of the burden to the defendants and
consequences to the community of imposing a
duty to exercise care with resulting liability
for breach”),

As stated, the second Mitchell prong in-
volves the application of various rules and
policy concerns to limit the defendant's liabil-
ity because of the manner in which the defen-
dant’s conduct caused the harm. Taylor-Rice,
91 Hawaii at 74, 979 P.2d at 1100. The
analysis of the second Mitchell prong is not
an opportunity to revisit the duty and breach
elements of negligence. Rather, the second
Mitchell prong will limit the range of injuries
a defendant is held liable for based on rules
of law that apply because of the circum-
stances surrounding the causation of the in-
juries, The causation analysis is thus focused
on the injuries and the manner in which the

injuries occurred. Accordingly, the State’s ar-
guments concerning the reasonableness of its
conduct and the foreseeability of the associat-
ed risks are not relevant to the issue of legal
causation.

d, Conclusion Regarding
Causation Analysis

For the reasons discussed, the circuit court
clearly misapprehended the relevant legal
standard with regard to whether the State’s
conduct was the legal cause of the O’Gradys’
injuries, Accordingly, the circuit court erred
to the extent it determined the State was not
liable because the State’s breach of its duty
was not the legal cause of the O’Gradys’
injuries. We thus vacate the circuit court’s
decision and remand the case to the circuit
court for application of the proper legal stan-
dard.

HM As this court has previously ob-
served, the State “is not the insurer of the
safety of travelers over the highways of the
State,” but the State has a duty “to design
and construct its highways in such a manner
as to make them reasonably safe for their
intended use” and to “maintain them in a
reasonably safe condition.” Klink, 118 Ha-
wai'i at 862, 152 P.8d at 584 (quoting Picker-
ing v. State, 57 Haw. 405, 409, 557 P.2d 125,
128 (1976)). In this case, the circuit court
determined that this responsibility includes
“the duty to exercise ordinary care to main-
tain the areas adjacent to the highway so
that the highway is reasonably safe from
rockfalls.” The cireuit court also determined
that the State “breached this duty of care by
not having a routine, coordinated system of
rockfall mitigation at the operational level in
the Hawai‘ District.” Therefore, on remand,
the circuit court is to determine whether the
State’s breach of its duty was the legal cause,
as discussed herein, of the O’Gradys’ injuries.

B. Discretionary Function Exception

HM The O’Gradys assert that the cirenit
court erred in relying on the discretionary
function exception in its decision. Contrary to
the O’Gradys’ assertion, although the circuit
court discussed the discretionary function ex-
ception in its COLs, it appears that the cir-
cuit court did not rely on this exception in

reaching its conclusion that the State was not
Hable to the O’Gradys.® In light of our re-
mand to the cireuit court, we address the
circuit court’s observations regarding the dis-
eretionary function exception and consider its
applicability in this case.1® We initially note
that the application of the discretionary func-
tion exception operates separately from the
elements of negligence and entails a separate
analysis. See Taylor-Rice v. State, 91 Hawai'i
60, 77, 979 P.2d 1086, 1108 (1999) (discussing
the discretionary function exception sepa-
rately from the elements of negligence),

HMI Under the State Tort Liability Act,
the State waives its immunity for tort liabili-
ty. See HRS § 662-2 (1998).!7 The State Tort
Liability Act includes several exceptions to
its applicability, including for claims based on
“the exercise or performance or the failure to
exercise or perform a discretionary function
or duty on the part of a state officer or
employee, whether or not the discretion in-
volved has been abused.” HRS § 662-15(1)
(Supp. 2004).48 The purpose of this exception
to liability is to “protect the decision-making

15. We interpret the circuit court's conclusions
regarding the discretionary function exception to
be observations on the part of the circuit court as
it did not ultimately determine whether the ex-
ception applied in this case. Specifically, the
circuit court concluded that “[olrdinary, every-
day maintenance of areas adjacent to a State
highway in order to prevent or mitigate rockfalis
onto the highway is an operational activity.” The
court also observed that a decision to undertake
a large-scale rockfall prevention or mitigation
project “may fall within the discretionary func-
tion exception” if it is contingent on a specific
legislative appropriation; however, the court also
noted that “the State should not escape liability
under the discretionary function exception mere-
ly by choosing to address rockfalls onto a State
highway only with large-scale projects and de-
clining to use routine, everyday maintenance to
address the risk.” We note that the State did not
cross-appeal the circuit court’s conclusions re-
garding the discretionary function exception.

16. The O’Gradys filed a motion in limine in the
circuit court seeking preclusion of the discretion-
ary function exception at trial, and the court
denied the motion. The O’Gradys argue that the
circuit court abused its discretion in denying
their motion in limine, We note that the circuit
court properly denied the O’Gradys’ motion in
limine, as the motion in this case was akin to a
motion for summary judgment or other disposi-
tive motion. See Kuroda v. Kuroda, 87 Hawai'i
419, 427, 958 P.2d 541, 549 (App. 1998) (discuss-

53

processes of state officials and employees
which require evaluation of broad public poli-
cies.” Taylor-Rice, 91 Hawai'i at 77, 979 P.2d
at 1108 (quoting Nakahira v. State, 71 Haw.
581, 588, 799 P.2d 959, 961 (1990)).

The exceptions listed in HRS
§ 662-15 are exceptions to the State’s liabili-
ty rather than a retention of sovereign immu-
nity over certain claims, and consequently,
the exceptions do not operate to withdraw
subject-matter jurisdiction from the courts.!®
See Schwartz v. State, 186 Hawai'i 258, 268,
861 P.8d 1161, 1166 (2015) (“(Slubject-matter
jurisdiction is fundamental to a court’s power
to act on the merits of a case from the outset
of the action; it may be challenged at any
time, but jurisdiction does not vacillate dur-
ing the course of a case depending on the
particulars of the matter as it develops.”);
State v. Zimring, 52 Haw. 477, 478, 479 P.2d
205, 206 (1970) (holding that the trial court
erred in its order of dismissal for failure to
state a claim based on the discretionary func-
tion exception). Thus, the discretionary func-
tion exception operates similarly to an affir-

ing the appropriate purpose of a motion in li-
mine).

17. HRS § 662-2 provides, “The State hereby
waives its immunity for liability for the torts of
its employees and shall be liable in the same
manner and to the same extent as a private
individual under like circumstances, but shall not
be liable for interest prior to judgment or for
punitive damages.”

18. HRS § 662-15(1) provides that the State Tort
Liability Act shall not apply to the following:

Any claim based upon an act or omission of
an employee of the State, exercising due
care, in the execution of a statute or regula-
tion, whether or not such statute or regula-
tion is valid, or based upon the exercise or
performance or the failure to exercise or
perform a discretionary function or duty on
the part of a state officer or employee,
whether or not the discretion involved has
been abused...

19. The State Tort Liability Act provides a general
waiver of its immunity for liability for the torts of
its employees, see HRS § 662-2, and the circuit
and district courts have original jurisdiction over
such claims, see HRS § 662-3 (1993). The excep-
tions provided for in HRS § 662-15 define the
scope of the application of the State Tort Liabili-
ty Act and, consequently, the scope of tort claims
that may be brought against the State.

54 Le

mative defense in that it is separate from the
elements of negligence and relieves the State
from liability. Zimring, 52 Haw. at 478, 479
P.2d at 206 (citing Stewart v. United States,
199 F.2d 517, 520 (7th Cir. 1952) #9 (conclud-
ing that any exceptions from the State’s
waiver of sovereign immunity “is a matter of
defense”); see also 61A Am, Jur, 2d Pleading
§ 800 (2010) (“[Aln affirmative defense is the
defendant’s assertion raising new facts and
arguments that, if true, will defeat the plain-
tiffs or prosecution’s claim, even if all allega-
tions in the complaint are true.”).

Hs Generally, the defendant has the
burden of proving all affirmative defenses,
US. Bank Nat'l Ass'n vy, Castro, 181 Hawai'i
28, 41, 818 P.8d 717, 780 (2018). Recognition
of the burden on the State to prove applica-
tion of the discretionary function exception
maximizes both the purpose of the discretion-
ary function exception and the primary policy
of the State Tort Liability Act to compensate
victims of negligent State conduct. See Breed
vy. Shaner, 57 Haw. 656, 665, 562  P.2d 436,
442 (1977) (noting that the State Tort Liabili-
ty Act should be liberally construed to effec-
tuate its purpose of compensation). Addition-
ally, the State is in the best position to
provide relevant evidence with regard to its
decision-making, and a rule that requires the
plaintiff to prove the absence of any policy
consideration would not be practicable. Thus,
the State bears the burden to assert and
prove the application of the discretionary

20, Stewart held that if the government desires to
rely on the discretionary function exception, it
has a right to do so in defense of the action,
“providing such defense is aptly pleaded and
proven.” 199 F.2d at 520.

21, Many other jurisdictions consider similar ex-
ceptions to be affirmative defenses, although
there is some disagreement. 14 Charles Alan
Wright et al., Federal Practice and Procedure:
Jurisdiction and Related Matters 3d § 3658 (4th
ed. 2015) (“The plaintiff bears the initial burden
of alleging subject matter jurisdiction under the
FTCA, but generally it is held that the Govern-
ment bears the burden of proving the applicabili-
ty of the discretionary function exception, al-
though there is disagreement.”); see also Keller

function exception to liability under the State
Tort Liability Act, See Parrott v. United
States, 536 F.3d 629, 63: 634-85 (7th Cir. 2008)
(concluding that the discretionary function
exception operates as an affirmative defense
to the Federal Tort Claim Act)"

The issue that is presented in this case is
whether the State is liable for its failure to
have a routine, coordinated system of rockfall
mitigation at the operational level. Because
we recognize the need to define the scope of
the discretionary function exception on a
case-by-case basis, we do not consider the
cirenit court’s observations with respect to
large-scale remediation projects as that issue
is not presented by the appeal in this case.
See Taylor-Rice, 91 Hawai'i at 77, 979 P.2d at
1108,

Hsin determining whether a State
action falls within the discretionary function
exception, we consider whether the chal-
lenged conduct involves the “effectuation of
broad public policy” as opposed to “routine,”
“operational level activity.” Id. (internal quo-
tation marks omitted) (quoting Tseu_ex rel,
Hobbs v. Jeyte, 88 Hawai'i 85, 88, 962 P.2d
844, 847 (1998). The exercise of some discre-
tion on the part of a State official is not
necessarily indicative that the exception ap-
plies, and our cases have focused more on
distinguishing broader policy decisions from
daily, operational ones. See Taylor-Rice, 91
Hawai'i at 79, 979 P.2d at 1105 (citing Rogers

ary function exception.” (quoting Nat'l Union
Fire Ins. v. United States, 115 F.3d 1415, 1417
(9th Cir, 1997))); Anderson v. State, 692 N.W.2d
360, 364 (Iowa 2005) (“The discretionary func-
tion immunity is an affirmative defense raised by
the defendant, and the party asserting immunity
has the burden to prove the immunity.”); Parker

vy. Lancaster Cty. Sch. Dist. No. 001, 256 6 Neb,
206, 591 N.W.2d 532, 539 (1999) (“We have held
that this ‘discretionary function exemption’ is an
affirmative defense which must be asserted by
answer.”). But see Molchatsky v. United States,
713 F.3d 159, 162 (2d Cir, 2013) (“Plaintiffs bear
the initial burden to state a claim that is not
barred by the [discretionary function excep-
tion].”); Welch v. United States, 409 F.3d 646,

vy. United States, 771 F.3d 1021, 1023 (7th Cir.
2014) (The discretionary fiction exception is
an affirmative defense to liability under the FTCA
that the government must plead and prove.”);
Cestonaro v. United States, 211 F.3d 749, 756
@d Cir, 2000) (“The United States has the bur-
den of proving the applicability of the discretion-

651 (4th Cir. 2005) (“Tilt is the plaintiff's burden
to show that an unequivocal waiver of sovereign
immunity exists and that none of the statute’s
waiver exceptions apply to his particular
claim.”).

vy. State, 51 Haw. 298, 296, 459 P.2d 378, 381
(1969)). Additionally, we interpret the State
Tort Liability Act in light of its purpose “to
compensate the victims of negligent conduct
of state officials and employees in the same
manner and to the same extent as a private
person in like circumstances.” Breed, 57
Haw. at 665, 562 P.2d at 442 (citing Rogers,
51 Haw, at 298, 459 P.2d at 378),

In a previous decision concerning the de-
sign of State highways, we distinguished be-
tween broad policy decisions, such as a deci-
sion not to build a prison, and operational
government affairs, such as where to place
road signs. See Taylor-Rice, 91 Hawai‘ at 78,
979 P.2d at 1104 (discussing the analysis in
Breed); see also Rogers, 51 Haw. at 297, 459
P.2d at 881 (noting a federal decision that
determined that “the decision to construct a
post office building involved discretion but
the omission to install handrails was an oper-
ational level act”); Julius Rothschild & Co. v.
State, 66 Haw. 76, 80, 655 P.2d 877, 881
(1982) (holding that the discretionary func-
tion exception applies to the State’s decision
of whether to replace or reconstruct a bridge
since “[i]t would require a weighing of priori-
ties at the higher levels of government, and
would surely entail evaluations based on fi-
nancial, political and economic consider-
ations”), Breed noted that “such matters as
the kinds of road signs to place and where to
place them, and which center line stripings to
repaint and when to repaint them, did not
require evaluation of policies but involved
implementation of decisions made in every-
day operation of governmental affairs.” 57
Haw. at 666, 562 P.2d at 442 (describing the
holding in Rogers, 51 Haw. at 297, 459 P.2d
at 381). In rejecting the principle that the
designing of a highway would always involve
evaluation of broad policy factors, Breed ex-
pressed concern that such a generalization
would afford the State protection for negli-
gence not encompassed by the discretionary
function exception:

[Wle are of the opinion that the decisions

made in designing a highway do not always

fall in this category. A curve may be placed
in a road to simply get around an obstacle.

Tn this situation further facts must be ad-

duced on the record to show that the deci-

sion to include the curve or other design
feature involved the evaluation of broad

55

policy factors before the court can decide

that the discretionary function exception

applies.
‘Id, at 667, 562 P.2d at 443,

In Taylor-Rice, we rejected the argument
that the decision to improve guardrails in-
volved the evaluation of broad policy consid-
erations. 91 Hawai'i at 78, 979 P.2d at 1104.
Taylor-Rice distinguished between the
State’s broader policy regarding guardrails
from the implementation of that policy, not-
ing that the State’s established policy dictat-
ed that the guardrails should have been im-
proved. Id. It was also noted that the post-
accident upgrade to the guardrail cost
$11,849.88 in maintenance funds and could
have also been included in a more expensive
resurfacing project undertaken by the State.
Id,

HM This case concerns the State’s fail-
ure to have a routine, coordinated system of
rockfall mitigation at the operational level.
The State’s failure was a breach of the
State’s duty “to exercise ordinary care to
maintain the areas adjacent to the highway
so that the highway is reasonably safe from
rockfalls.” It appears that such rockfall miti-
gation efforts at the operational level would
not involve the consideration of broad public
policies, While it is possible that certain deci-
sions with regard to how to fulfill the State’s
duty to maintain the highway so that it is
reasonably safe from rockfalls may fall within
the discretionary function exception, this
case expressly concerns a routine system at
the operational level, and the State has not
adduced evidence to demonstrate that the
lack of such an operational system involved
an exercise of discretion based on broad poli-
ey considerations.

For the reasons discussed, the State’s
breach of its duty of care “by not having a
routine, coordinated system of rockfall miti-
gation at the operational level” does not fall
within the discretionary function exception,
Additionally, the O’Gradys challenge FOF's 6
and 15-17, which appear to relate to whether
the lack of a remediation project to eliminate
the vockfall hazard fell within the discretion-
ary function exception. As mentioned, the
issue presented in this case with respect to
the discretionary function exception is wheth-

56 |

er the State is liable for its failure to have a
routine, coordinated system of rockfall miti-
gation at the operational level, and the lack
of any large-scale remediation project to
eliminate the rockfall hazard has not been
raised, Thus, these findings are not relevant
to whether the discretionary function excep-
tion applies in the present appeal.” Addition-
ally, FOFs 15-17 erroneously require the
O’Gradys to prove the inapplicability of the
discretionary function exception; as dis-
eussed, the State bears the burden of assert-
ing and proving the application of the discre-
tionary function exception. In light of the
evidence presented, the State has not estab-
lished that it is relieved from liability under
the discretionary function exception with re-
gard to the duty recognized by the circuit
court in this case.

II. CONCLUSION
For the reasons discussed above, the cir-
cuit court's December 11, 2014 “Second
Amended Final Judgment” is vacated, and
the case is remanded to the circuit court for
further proceedings consistent with this opin-

ion.

398 P.3d 645

TRUST CREATED UNDER THE WILL
OF Samuel M. DAMON, Deceased

SCWC-12-0000731
Supreme Court of Hawai‘.
JUNE 15, 2017

22, It is noted that these findings also have no
relevance to the question of legal causation as
they concern the reasonableness and intent of the

State’s conduct, rather than the circumstances
leading to the O’Gradys’ harm.

A. Bernard Bays and Michael C. Carroll,
Honolulu, for petitioner, Christopher Damon
Haig.

Rebecea A. Copeland, Peter Van Name
Esser, and Thomas R. Sylvester, Honolulu,
for petitioner, Myrna B. Murdoch.

J. Thomas Van Winkle, Duane R. Miyashi-
ro, and Melissa H. Lambert, Honolulu, for
respondent, Trustees under the Will and of
the Estate of Samuel M. Damon.

George W. Van Buren, Honolulu, for re-
spondents, Brendan Damon Ethington and
John Philip Damon.

RECKTENWALD, C.J., NAKAYAMA,
McKENNA, POLLACK, WILSON, JJ.

1, The Honorable Derrick H.M. Chan presided.

2. Christopher's Application presents four ques-
tions:

1. Whether the ICA made grave errors of law
in denying a beneficiary the right to review
trust records at the time of account approval
necessary to submit proper objections, where
such denial is obviously inconsistent with Ha-
waii Supreme Court and federal court deci-
sions.
2. Whether the ICA made grave errors of law
by denying a beneficiary's rights to constitu-
tional procedural due process in holding se-
cret, ex parte proceedings between the Master

57

OPINION OF THE COURT BY
McKENNA, J.
L Introduction

This case concerns the objections of two
beneficiaries, Christopher Damon Haig
(“Christopher”) and Myrna B, Murdoch
(‘Myrna”), of a testamentary trust created
under the will of Samuel M. Damon (“Damon
Trust” or “Trust”), to the decisions made by
the Probate Court of the First Circuit (“Pro-
bate Court”)! that underpinned its August 2,
2012 Judgment, specifically the approval of
the Trust’s accounts from 1999 to 2003. The
Intermediate Court of Appeals (“ICA”) af-
firmed the Probate Court’s August 2, 2012
Judgment. See In re Estate of Samuel M.
Damon & Trust Created under the Will of
Samuel M. Damon (In re Trust of Damon),
No. CAAP-12-0000781, 2016 WL 3129879
(App. June 2, 2016) (mem.).

Separately, Christopher and Myrna each
timely applied for a writ of certiorari from
the July 11, 2016 Judgment on Appeal en-
tered by the ICA pursuant to its June 2, 2016
Memorandum Opinion (“Mem. Op.”). Among
other things, both Christopher and Myrna
assert that the Trustees of the Damon Trust
(“Trustees”) violated their duty to inform
beneficiaries pursuant to trust law and Ha-
wai'i Revised Statutes § 560:7-303 (2006),
that their due process rights were violated
when they were not granted access to docu-
ments disclosed to the court-appointed Mas-
ter by the Trustees thereby preventing them
from making informed objections to the Mas-
ter’s Report regarding the Trust’s accounts
from 1999-2008, and that the Trustees
breached their fiduciary duty to keep full,
accurate, and orderly records of the status of
the Trust’s administration when certain docu-
ments went inexplicably missing”

and Trustees, and whether this denial is obvi-
ously inconsistent with Hawaii Supreme Court
and federal court decisions stating that it is
unconstitutional to prejudge a case before giv-
ing a party reasonable access to the informa-
tion and an opportunity to present his case,
3. Whether the ICA made grave errors of law
when it ignored a beneficiary's claim for
breach of fiduciary duties relating to the trus-
tees’ loss of books and records for the Trust.
4, Whether the ICA made grave errors of law
in holding that a beneficiary waived all objec-
tions to the sale of Trust assets without a
hearing where the Trustees failed to: (1) obtain
prior court approval of the sale in violation of
[HRS] § 554A-5; (2) disclose their personal

58 [|

For the reasons discussed, the ICA erred
in affirming the Probate Court’s approval
and adoption of the Master's Report without
first granting Christopher’s and Myrna’s re-
quests to access Trust administration docu-
ments, contrary to the requirements of HRS
§ 560:7-308.

Il. Background

This probate case was previously heard by
this court regarding a separate issue. See In
re Estate of Damon, 119 Hawai'i 500, 199
P.3d 89 (2008) (holding that the court-ap-
pointed master was disqualified due to a
conflict of interest and that objector-benefi-
ciary’s challenge to master’s appointment.
was timely). Accordingly, some of the follow-
ing factual and procedural background is re-
peated from that opinion,

A. Factual Background

On November 10, 1914, a testamentary trust
was created by the Last Will and Testament
of Samuel M. Damon (“Trust”), Samuel M,
Damon died on July 1, 1924. During the
1999-2008 accounting period, the Trustees
managed the Trust’s assets with roughly half
of its value in publicly traded securities and
the other half in real estate, The securities
portion of the Trust’s assets consisted mostly
of a 18% interest in BancWest Corporation
common stock, The real estate portion of the
Trust’s assets consisted primarily of prime
industrial and commercial lands in Honolulu
under long-term leases, a sizeable cattle
ranch on the island of Hawai'i, two walnut
ranches located in California, and an indus-
trial property located in California,

In 2001, the Trust sold its entire 18%
interest in BancWest Corporation common
stock, In 2008, the Trust sold its prime
industrial and commercial land in Honolu-
Ju, two walnut ranches, and a significant

self-interest in the transaction; and (3) follow
their own conflicts of interest policy.
Myrna’s Application presents three questions:

[1]. Whether the ICA erred in affirming the
probate court's decision that improperly rub-
ber-stamped the Master's Report, refused to
compel the Trustees to produce documents,
and violated [Myrna’s] constitutional right to
due process.

(2]. Whether the ICA erred by misapplying
the presumption afforded to trustees under
Campbell because the Trustees had no discre-
tion whether to apply the statutory and com-

portion of real estate located on the island
of Hawai‘i. The net proceeds from these
transactions has [sic] been reinvested into
a diversified securities portfolio that is be-
ing advised and managed by Goldman,
Sachs & Company.

In re Estate of Damon, 119 Hawaii at 501-
02, 199 P.3d at 90-91.

The Trust terminated on November 9,
2004 when the last measuring life, Samuel M.
Damon’s granddaughter, Joan Damon Haig,
passed away. On termination, the Trust's es-
tate was valued at $886 million. There is no
dispute that Christopher and Myrna were
beneficiaries of the Trust from 1999 to 2008.
According to counsel for the Trustees, Chris-
topher’s and Myrna’s interests in the Trust.
total “slightly over three percent [8%].”
Three percent of $836 million is approximate-
ly $25 million,

B. Procedural Background

On April 30, 2004, the Trustees filed a
“Petition for Approval of 1999, 2000, 2001,
2002 and 2008 Income and Principal Ac-
counts” (“Petition”) in Equity No, 2816-A
and Probate No. 6664, The Petition repre-
sented that the Trustees

sent annually to all adult beneficiaries who
are entitled to income by the terms of the
Will copies of their annual accounts for the
calendar years 1999, 2000, 2001, 2002 and
2008, showing detailed expenditures of [sic]
receipts and income and principal for these
years, together with inventories as of the
end of each year, and copies of Consolidat-
ed Financial Statements and Schedules of
the Estate of S.M. Damon, and the Inde-

mon law duty to keep Myrna reasonably in-
formed,

[3]. Whether the CA [sic] erred in applying
too restrictive a threshold to the claim that the
‘Trustees committed spoliation, erred in apply-
ing the Campbell presumption to the issue of
spoliation, and erred in affirming the probate
court's decision in light of the spoliation,

3. Christopher is a son of Joan Damon Haig and
the brother of one of the Trustees, David Haig
("David"). Myrna was previously married to
David.

pendent Auditor's Reports prepared by
KPMG LLP, for each year.
(footnote omitted).

After the Probate Court’s initially appoint-
ed master for the Petition was disqualified
upon Christopher's objections, see In re Eis-
tate of Damon, 119 Hawai'i 500, 199 P.8d 89,
the Trustees petitioned for another court-
appointed master to examine the Estate’s
accounts. Christopher objected to the Trus-
tee’s petition for the appointment of another
master, and instead filed a “Petition for As-
signment to Civil Trials Calendar of the First
Cireuit Court” (“First Assignment Petition”)
on February 11, 2010, asserting the following
issues regarding the Trust’s 1999-2003 ac-
counts:

1, Whether the trustees adequately man-

aged the estates’ [sic] securities portfolio[.]

2. Whether the trustees obtained a satis-

factory premium for the First Hawaiian

Bank stock,

3, Whether the trustees obtained fair

market value for the real estate portfolio of

the trust.

4, Whether the trustees had conflicts of

interest in the foregoing matters,

Myrna, pro se, appeared to join in Christo-
pher’s concern regarding the appointment of
a new master and his request for the assign-
ment of the case to the civil trials calendar.
The hearing for the First Assignment Peti-
tion was set for April 1, 2010, which fell after
the date set for the court’s hearing on the
appointment of a new master.

At a hearing on February 18, 2010, the
Probate Court granted the Trustee’s petition
for the appointment of a new master (“Mas-
ter”), who was appointed by Order of Refer-
ence filed March 22, 2011, In accord with
Hawai'i Probate Rules (“HPR”) Rule 29,
that Order stated that “[t]he [Trustees] shall

- make all books and records of the Da-
mon Estate available to the Master.”

The court held a hearing on the First
Assignment Petition on April 1, 2010, After
hearing argument from the parties, the court
decided to continue the matter until the court

4, “The master shall have unlimited access to the
books and records of the fiduciary with respect
to the trust or estate that are not protected by
privilege...” HPR Rule 29,

59

had an opportunity to review the Master’s
Report.5

On October 7, 2011, the Probate Court
received Christopher’s “Petition to Renew
Request for Assignment of Case to Circuit
Court Pursuant to Probate Rule 20 or in
the Alternative, for Appointment of a Dis-
covery Master” (“Christopher's Renewed
Assignment Petition”), On October 10, 2011,
through counsel, Myrna similarly filed a
“Petition for Assignment of Case to Circuit
Court Pursuant to Probate Rule 20(a)
through 20(c) or in the Alternative, for an
Order Pursuant to Probate Rule 20(d)
Compelling Discovery and Appointing a
Discovery Master” (“Myrna’s Assignment
Petition”). Both Christopher’s Renewed As-
signment Petition and Myrna’s Assignment
Petition asserted that each had requested
information from the Trustees regarding
Trust administration, those requests were
denied or ignored, and that when assistance
was sought from the Master, the Master
stated that she did not have the power to
compel the Trustees to provide discovery
and advised Myrna and Christopher to take
up the issue with the Probate Court,

A hearing on Christopher’s Renewed As-
signment Petition and Myrna’s Assignment
Petition was held on December 1, 2011. At
the hearing, the Master indicated that the
Report would not be completed until some-
time in mid-February 2012 because deadlines
for submissions were suspended pending the
outcome of Christopher's and Myrna’s peti-
tions. The Probate Court judge reminded the
parties that the First Assignment Petition
had been continued so that the Master’s Re-
port could be completed. The court also indi-
cated the parties would be better able to
focus on discrete issues of concern after the
Master’s Report issued, which would limit.
the scope of any potential discovery.

Christopher explained that he filed the
Renewed Assignment Petition because “[al-
though the trustees provided information in
the past, they have now refused.” Christo-
pher and Myrna argued that they had a right

5. Court minutes reflect that “by agreement of
counsel, {the First Assignment Petition] [wa]s
continued until moved on in both [probate and
equity] cases.”

60

as beneficiaries to the requested information,
or, at the very least, information that was
disclosed to the Master, and that they had
already narrowed their objections. In their
memoranda, Christopher and Myrna each
cited to HRS § 560:7-303, Bogert’s on Trusts
§ 962 (“Duty to Respond to Beneficiaries’
Requests for Information”),$ and the Re-
statement (Second) of Trusts § 173 (“Duty to
Furnish Information”),’ to show that the
Trustees had a duty to provide them with the
requested Trust documents and information.
Moreover, because the Master’s document
review was in part based on the general
objections already noted by Christopher and
Myrna, they explained they would be unable
to “submit ... more meaningful objection[s]”
to the Master if they did not get access to
those very documents provided to the Master
by the Trustees. As an example, Christo-
pher’s memorandum cited his securities and
real estate experts, who indicated “they can-
not [issue] a report unless they have more
information.” The Trustees countered that
“(t]he Order of Reference by definition is an
ex parte process. We are required to meet
with the Master, again, as the eyes and ears
of the Court and provide her with access to
the books and records. We're doing that.”

The Probate Court concluded that Christo-
pher and Myrna failed to show that discovery
‘was necessary prior to the completion of the
Master’s Report. The court emphasized that
Christopher’s and Myrna’s issues were pre-
served, and that they would be given an
opportunity to respond to the Master’s Re-
port. Accordingly, the court denied their peti-
tions.®

The Master’s Report, concluding the
Trust’s 1999-2008 income and principal ac-

6. The Duty to Respond to Beneficiaries’ Re-
quests for Information
Generally, if a beneficiary of a trust requests
information about the trust from the trustee,
the trustee must promptly furnish it. The duty
to provide information about the trust property
and its administration in response to a request
from a beneficiary has long been recognized by
the common law and has been codified in most
jurisdictions, Although the duty is fundamental
and widely if not universally recognized, it is
subject to several limitations. First, the duty
extends only to information requests that are
reasonable...
Bogert’s on Trusts § 962 (3d ed. 2010) (footnotes
omitted),

counts should be approved, was filed on
March 9, 2012, In it, among other things, the
Master noted the following:

Your Master verified the accuracy and
reliability of the Trust’s financial accounts
by examining the statements of assets and
liabilities, income and expenses, and ran-
dom examination of the 2003 receipts and
invoices. The 1999-2002 receipts and in-
voices were unlocatable and, according to
Controller Mizuno, were probably de-
stroyed as part of the Trust’s regular doc-
ument culling process. Controller Mizuno
assured the Master that he has seen and
audited most of the 1999-2002 receipts and
invoices when he was part of the KPMG
LLP (hereinafter KPMG) audit team and
approved some of the 2002 receipts and
invoices when he was hired as the Estate’s
Controller in October 2002. The 1999-2003
annual statements, which were mailed an-
nually to all Beneficiaries, were created
from the receipts and invoices. He also
confirmed that the Trust’s internal con-
trols requiring at least three levels of ap-
proval, including those of the Trustees,
were uniformly followed in all of the years
in the 1999-2008 Accounts Period.

The Damon Trust accounts are annually
audited by KPMG who issued annual “In-
dependent Auditors’ Report” of its find-
ings. The audits process included, inter
alia, random reviews of the receipts and
invoices to confirm that internal controls,
such as the approval process for all in-
voices, were in place and properly fol-
lowed. KPMG’s audits are attached to the
1999-2008 Accounts Petition.

Based on the examination of the finan-
cial statements, receipts, and KPMG’s an-

7. Duty to Furnish Information

The trustee is under a duty to the beneficiary to
give him upon his request at reasonable times
complete and accurate information as to the
nature and amount of the trust property, and
to permit him or a person duly authorized by
him to inspect the subject matter of the trust
and the accounts and vouchers and other doc-
uments relating to the trust.
Restatement (Second) of Trusts § 173 (1959).

8. The record does not reflect whether the court
ruled on the First Assignment Petition.

nual audits, your Master is satisfied that

the Trust’s 1999-2008 financial accounts as

presented to the Probate Court are fair

and accurate.
At a status conference on March 20, 2012,
the court set the following deadlines: April
25, 2012 for responses or objections to the
Master's Report; May 25, 2012 for any reply;
June 21, 2012 for the hearing on the Trus-
tee’s Petition.

On April 17, 2012, Christopher submitted
to the Probate Court a “Petition to Compel
Production of Documents and Continue
Deadline to Respond to Master’s Report”
(“Petition to Compel”), which was joined by
Myrna. The Trustees objected to the Petition
to Compel on numerous grounds, including
that Myrna’s requested documents were ir-
relevant to the Trustee’s Petition, or were
ones she already received from the Trustees
or could have received from other sources.
The Petition to Compel was set for a May 31,
2012 hearing.

Concurrent to submitting briefing on the
Petition to Compel, both Myrna and Christo-
pher timely submitted their objections to the
Master’s Report on April 25, 2012, Christo-
pher maintained that although he submitted
general objections to the Master’s Report, he
‘was unable to adequately and completely re-
spond to the Master’s Report because he was
not provided with the documents he request-
ed of the Trustees. On May 25, 2012, the
Master and Trustees filed their responses to
these objections.?

At the May 81, 2012 hearing on the Peti-
tion to Compel, the Probate Court listened to
the parties’ arguments but made no addition-
al inquiries or comments. The Probate Court
ruled on the Petition to Compel by way of a
minute order issued on June 19, 2012:

After review of the record and pleadings
herein, review of the Master’s Report filed
on March 9, 2012 and objections and re-
sponses thereto, and having considered the
representations, arguments and objections
made, the court hereby denies the Petition
[to Compel].

9. Past the courtimposed deadline of May 25,
2012, the parties continued to file briefs. On June
8, 2012, Christopher filed supplemental objec-
tions, and Myrna filed a reply with the Master.

On June 18, 2012, the Trustees responded to
Christopher's and Myrna’s June 8, 2012 filing.

61

The court finds that there is no basis to
compel the trustees to produce all the doc-
uments reviewed by the Master. The court
also denies the Petitioner’s request to
transfer the matter to the civil trials calen-
dar,
Based on the foregoing, the court denies

the request to continue the deadline for

the beneficiaries to respond to the Mas-

ter’s Report.
(some capitalization omitted). The ruling was
formalized in the Probate Court’s July 6,
2012 “Order Denying Beneficiary Christo-
pher Damon Haig’s Petition to Compel Pro-
duction of Documents and Continue Deadline
to Respond to Master’s Report, Filed April
18, 2012.”

At the June 21, 2012 hearing regarding the
Petition and the Master’s Report, Christo-
pher and Myrna primarily argued that the
Petition should not be granted because they
were not given an opportunity to review the
underlying Trust documents examined by the
Master in her preparation of the Report so
that they may better articulate objections.
They also requested an evidentiary hearing,
The Probate Court entered a minute order
on July 3, 2012, stating:

After review of the record and pleadings
herein, review of the Master’s Report filed
on March 9, 2012 and objections and re-
sponses thereto, and having considered the
representations, arguments and objections
made, the court hereby grants the Petition,
subject to the recommendations of the
Master, which are approved and adopted.
The Master’s fees are approved,

(some capitalization omitted). The “Order
Granting Petition for Approval of 1999, 2000,
2001, 2002 and 2008 Income and Principal
Accounts” was filed on August 2, 2012. Judg-
ment was entered on August 2, 2012 as to
that order in addition to the orders denying
Christopher’s Renewed Assignment Petition,
Myrna’s Assignment Petition, and Christo-
pher’s Petition to Compel to which Myrna
had joined.!°

10. The judgment did not address any order that

may have issued with respect to the First Assign-
ment Petition.

62 |

C. Appeal to the ICA

Myrna and Christopher each timely filed a
Notice of Appeal with the ICA indicating
that they appealed the August 2, 2012 Judg-
ment “and all orders, findings of fact, rulings
and conclusions of law, either stated or sub-
sumed therein which the Judgment made
final.” 41 The ICA summarized Christopher’s
and Myrna’s combined points of error as:

[Christopher and Myrna contend] the pro-

bate court erred when it: (1) did not com-

pel trustees David M. Haig, Paul Mullin

Ganley, and Walter A. Dods, dr, ... to

respond to requests for information or

make documents available to Appellants;

(2) adopted the “Petition for Approval of

1999, 2000, 2001, 2002 and 2008 Income

and Principal Accounts” ... without an

independent review; (8) approved the

‘Trustees’ 1999-2008 Accounts Petition de-

spite evidence of spoliation; (4) did not

assign the case to the trial court docket;

(5) denied [Christopher’s] conflict of inter-

est objections to the sale of BancWest.

Corporation ... stock; and (6) denied

[Christopher's] objections to the sale of

real estate assets,

In_re Trust_of Damon, mem, op, at 1-2
(footnote omitted),

The ICA began its analysis with “the well-
settled principle that trustees benefit from a
presumption of regularity and good faith.” In
re Trust_of Damon, mem, op, at 6 (citing In
re Estate of Campbell, 42 Haw. 586, 607
(Haw. Terr. 1958)) (quotation omitted), Ha-
wai'i law “imposes upon the person question-
ing the trustee’s action the burden of over-
coming the presumption, but which requires
the trustee ultimately to justify his action if
sufficient evidence is produced to overcome

11, As Christopher was the second party to file a
“notice of appeal,” he re-titled his Notice of
‘Appeal as a Notice of Cross-Appeal, and subse-
quently re-filed it. Myrna also filed a “Notice of
Cross Appeal” on September 7, 2012, although it
is unclear why she did so.

12, The statute states in relevant part:
Duty to inform and account to beneficiaries.
The trustee shall keep the beneficiaries of the
trust reasonably informed of the trust and its
administration. ... In addition:

ie) Upon reasonable request, the trustee
shall provide the beneficiary with a copy of the

the presumption.” Id, (citing In re Estate of
Campbell, 42 Haw. at 607),

With respect to the first point of error, the
ICA focused on the portion of HRS § 560:7-
308 ® that states, “The trustee shall keep the
beneficiaries of the trust reasonably in-
formed of the trust and its administra-
tion....” The ICA noted that Christopher
and Myrna received annual accounts and au-
dited financial statements for each year of
the 1999-2008 accounting period, did not ob-
ject to those documents at the time of re-
ceipt, and therefore were kept “reasonably
informed,” as noted in the Master’s Report.
In_re Trust of Damon, mem. op, at 8-9,

Moreover, the ICA noted that Christo-
pher’s and Myrna’s repeated requests for a
“large swath of information” from the Trus-
tees did not point to specific reasons for the
requested documents. In re Trust of Damon,
mem, op, at 9, The ICA therefore concluded
that Christopher and Myrna failed to meet
their burden of overcoming the presumption
of regularity and good faith of the Trustees
because they did not show what they would
gain from the documents. See id. As such,
the ICA concluded the Probate Court did not
err when it denied Christopher’s and Myr-
na’s petitions to appoint a discovery master,
The ICA also appeared to have concluded
that for these same reasons, the Probate
Court did not err when it denied the Petition
to Compel, nor were Christopher and Myrna
deprived of their due process rights when
they were not granted access to the same
information made available to the Master.

Relatedly, as to the fourth point of error,
the ICA concluded that the Probate Court
did not err when it retained the case on the
probate calendar and denied the Petition to
Compel. Pursuant to HPR Rule 20% and

terms of the trust which describe or affect the
beneficiary's interest and with information
about the assets of the trust and the particulars
relating to the administration.

(3) Upon reasonable request, a beneficiary
is entitled to a statement of the accounts of the
trust annually and on termination of the trust
or change of the trustee,

HRS § 560:7-303.

13. “The court by written order may retain a
contested matter on the regular probate calendar
or may assign the contested matter to the civil
trials calendar of the circuit court.” HPR Rule
20(a).

HRS § 560:1-302 (2006), the ICA deter-
mined that the Probate Court had wide dis-
eretion to decline transferring the matter to
the civil trials calendar or to permit discov-
ery. See In re Trust_of Damon, mem, op. at
13.

Regarding the second point of error,
Christopher and Myrna had relied upon
Mauna Kea Anaina Hou v. Board of Land &
Natural Resources, 186 Hawai'i 376, 363 P.8d
224 (2015), for their due process arguments,
However, the ICA observed the record
shows the Probate Court did not pre-judge
the matter and carefully reviewed the Mas-
ter’s Report, see In re Trust of Damon, mem,
op. at 10-11, in contrast to the facts present-
ed in Mauna Kea, The ICA thus concluded
this case was distinguishable from Mauna
Kea, Furthermore, because Christopher and
Myrna were granted the same access to the
Master as the Trustees, and because the
Master addressed their objections in her Re-
port, their due process rights were not violat-
ed, In sum, the ICA concluded Christopher’s
and Myrna’s due process arguments lacked
merit. See In re Trust of Damon, mem, op, at
i.

As to the third point of error, the ICA
summarized Christopher’s and Myrna’s argu-
ments as follows: “Appellants contend that
the Trustees committed spoliation because
the Trustees either destroyed or lost the
1999-2002 receipts and invoices, Appellants
argue that this destruction of evidence neces-
sitates the presumption that the 1999-2008
Accounts Petition cannot be approved.” In re
Trust_of Damon, mem, op. at 18, The ICA
noted that the Master had extensively re-
viewed documents to ensure that the infor-
mation contained in the Trust’s accounting
period was supported by other available doc-
uments, and that there was no evidence of
intentional document destruction. See id, at
15-16. Therefore, the ICA concluded that
given Christopher’s and Myrna’s failure to
overcome the presumption of good faith and
regularity in favor of the Trustees, their

14. (a) To the full extent permitted by the Con-
stitution and except as otherwise provided by
law, the court has jurisdiction over all subject
matter relating to:

(1) Estates of decedents ... 5
@) Trusts.

63

spoliation argument lacked merit, See id. at
16.

With respect to the fifth and sixth points of
error concerning Christopher's objections to
the sale of the BancWest stock and various
parcels of real estate, the ICA determined
that the Probate Court did not err in affirm-
ing the Master’s determination that Christo-
pher’s objections to those sales were barred
by waiver and the doctrine of laches. See id,
at 19, The Master had found that Christo-
pher approved the stock sale, and the ICA
noted that Christopher did not provide evi-
dence to the contrary. See id. at 17. As to the
real estate transactions, the ICA concluded
that because Christopher did not object to
them until over seven years later, the doc-
trine of laches applied, and therefore, Chris-
topher’s argument that the Probate Court
erred by approving the Master’s Report as to
these transactions without first allowing him
to review Trust records lacked merit. See id,
at 17, 19.

D. Applications for Writ of Certiorari
Christopher and Myrna each timely ap-
plied for a writ of certiorari from the July 11,
2016 Judgment entered by the ICA pursuant
to its June 2, 2016 Memorandum Opinion,’
Briefly stated, both Christopher and Myrna
assert that the ICA gravely erred when it
affirmed the Probate Court’s adoption of the
Master’s Report. They argue that the Mas-
ter’s Report should not have been adopted as
they were not first granted access to Trust
documents as they requested, or at a mini-
mum, to the same Trust documents that
were made available to the Master. Without.
such access, they were unable to raise mean-
ingful, specific objections to the Master’s Re-
port by way of their own experts’ analyses or
otherwise. For example, Christopher argues
that without access to Trust documents, he
was unable to contest the Master’s conclusion
that he had waived any objections to the sale
of BancWest stock. Without the ability to

(b) The court has full power to make orders,
judgments and decrees and take all other ac-
tion necessary and proper to administer justice
in the matters which come before it.

HRS § 560:1-302.

15. The questions presented by Christopher and
‘Myrna are quoted at supra note 2.

64 |

raise meaningful objections for the Probate
Court’s consideration, Myrna additionally ar-
gues that the Probate Court “rubber
stamped” the Master’s Report.

According to both Christopher and Myrna,
as beneficiaries, they have a right by way of
statutory law, common law, and due process
to obtain trust administration documents or
information from the Trustees. Myrna argues
that any presumption of “regularity and good
faith” afforded the Trustees does not abro-
gate the Trustees’ duty to provide informa-
tion related to the administration of the
Trust when requested by a beneficiary, be-
cause such a duty: (1) is not discretionary, (2)
is not “limit{ed] to time periods prior to the
Petition being filed,” (8) “does not end at the
Probate Court door,” and (4) is not curtailed
by the appointment of a master. Christopher
also asserts that the ICA erred when it
stated he needed to justify his request for
Trust documents before being granted access
to them.

Christopher and Myrna also take issue
with the Master’s observation that certain
Trust documents relating to the 1999-2003
accounting period were destroyed or missing.
Christopher argues that this fact alone dem-
onstrates a breach of fiduciary duty that
requires the Probate Court to resolve
“doubts or discrepancies” against the Trus-
tees; Myrna argues that the Master’s Report
should not have been adopted by the Probate
Court without a determination as to whether
spoliation occurred, In either case, it appears
that Christopher and Myrna assert that the
Master’s Report should not have been
adopted because, at a minimum, they should
hhave been granted access to the same docu-
ments as the Master in order to determine
whether the Master was correct in stating
that she could nevertheless verify the Trust
accounts without the missing receipts or oth-
er documents, thus permitting them to raise
appropriate objections to the Probate Court
if necessary. Myrna also appears to ask that
this court clarify trust law and standards on
spoliation.

Although Christopher had taken issue with
the ex parte meetings held by the Master, at

16. The Trustees also point out that after the first
master was disqualified due to a conflict of inter-
est, see In re Estate of Damon, 119 Hawai'i 500,
199 P.3d 89, that Myrna attempted to raise addi-

oral argument, counsel for both Christopher
and Myrna indicated that the remedy they
now seek is access to the Trust documents
previously requested, including those re-
viewed by the Master, and for the case to be
remanded.

With respect to Christopher’s and Myrna’s
requests for documents, the Trustees do not
dispute they have a duty to keep beneficia-
ries reasonably informed pursuant to HRS
§ 560:7-303, However, they assert that the
duty is not unlimited, but rather extends only
to requests that are reasonable. The Trus-
tees emphasize that Christopher’s and Myr-
na’s requests for copies of documents re-
viewed by the Master were not reasonable
because they were “very overbroad” “fishing
expedition-type request{s]” and that the Ha-
wail Probate Rules require that only the
Master be granted unlimited access to Trust
documents.

Moreover, the Trustees assert that they
more than satisfied the disclosure require-
ments of HRS § 560:7-808 as they had pro-
vided annual voluminous records to beneficia-
ries and had an “‘open door’ policy [until the
Estate office closed in 2007] where Beneficia-
ries could meet with the Trustees and Estate
staff, review Estate records and documents,
and ask questions on trust-related matters.”
According to the Trustees, both Myrna and
Christopher used that opportunity multiple
times during the 1999-2008 accounting peri-
od.6 The Trustees acknowledged, however,
that at no point in time were Christopher
and Myrna granted access to each of the
documents reviewed by the Master.

Ill. Standard of Review

Hl “Interpretation of a statute is a ques-
tion of law which [is] review[ed] de novo.”
Kikuchi v, Brown, 110 Hawai'i 204, 207, 180
P.3d 1069, 1072 (App. 2006) (internal quota-
tion marks and citation omitted).

IV. Discussion

The multiple issues raised by Christopher
and Myrna fundamentally turn on the inter-

tional objections before the subsequent master
that were not initially raised before the first. This
does not appear to address Myrna’s subsequent
request for Trust documents, however.

pretation of HRS § 560:7-308, which grants
beneficiaries the right to request of trustees
“particulars relating to the administration” of
the Trust, including access to documents.
Both Christopher and Myrna submitted re-
quests for Trust documents to the Trustees.
When the Trustees declined to address their
requests, Christopher and Myrna sought as-
sistance from the Master. When that route
provided no relief” they filed petitions with
the Probate Court to compel the Trustees to
provide the requested documents, to appoint
a discovery master, or to transfer the case to
the civil trials calendar so that discovery may
proceed under the Hawaii Rules of Civil
Procedure. The Probate Court denied the
motions, stating that with respect to the Peti-
tion to Compel, Christopher and Myrna had
“no basis to compel the trustees to produce
all the documents reviewed by the Master.”
Thus, at the core of Christopher’s and Myr-
na’s petitions and their appeals to this court
are their requests for Trust administration
documents pursuant to HRS § 560:7-303.

As conceded by the Trustees, a trustee’s
duty to inform beneficiaries under HRS
§ 560:7-303 does not cease when an account-
ing is filed in probate court or a master is
appointed. For the following reasons, after
considering the statute’s plain language, its
legislative history, and established treatises,
we conclude that the ICA erred in affirming
the Probate Court’s denial of the Petition to
Compel, and therefore also erred in affirming
the Probate Court’s “Order Granting Petition
for Approval of 1999, 2000, 2001, 2002 and
2008 Income and Principal Accounts.”

A. The Plain Language of HRS § 560:7-
803 Does Not Require a Beneficiary to
Overcome the Presumption of Good
Faith Afforded Trustees

According to the ICA, Christopher’s and
Myrna’s requests for Trust administration

17. The Master was correct in declining to resolve
Christopher's and Myrna’s requests for discovery
and instead directing them to the Probate Court.

18. See Eugene F. Scoles, “Administration of
Trusts,” in 2 Uniform Probate Code Practice
Manual 588, 595 (Richard V. Wellman ed., 2d
ed. Am. Law Inst. 1977) (“Scoles on Trusts’)
(characterizing the initial duty to inform benefi-
ciaries in [Uniform Probate Code] [section 7-303
as an “affirmative” one).

65

documents were not reasonable primarily be-
cause Trustees had routinely provided bene-
ficiaries with annual financial statements and
accounts, and Christopher and Myrna failed
to provide specific reasons why they needed
documents beyond these statements. In par-
ticular, the ICA pointed out that because
Christopher and Myrna were unable to artic-
ulate what they hoped to gain from the re-
quested documents, they had “fail[ed] to
meet their burden of overcoming the pre-
sumption of regularity and good faith of the
Trustees.” In re Trust of Damon, mem. op. at
8-9.

We now consider whether the factors con-
sidered by the ICA were appropriate in light
of the plain language of HRS § 560:7-303,
which states in relevant part:

Duty to inform and account to benefi-

ciaries. The trustee shall keep the benefi-

ciaries of the trust reasonably informed of
the trust and its administration.... In
addition:

(2) Upon reasonable request, the trus-
tee shall provide the beneficiary with a
copy of the terms of the trust which de-
scribe or affect the beneficiary’s interest
and with information about the assets of
the trust and the particulars relating to the
administration.

(8) Upon reasonable request, a benefi-
ciary is entitled to a statement of the
accounts of the trust annually and on ter-
mination of the trust or change of the
trustee.

The relevant portion of the statute clearly
imposes three separate duties on trustees.
The first is an affirmative duty™ to “keep
the beneficiaries ... reasonably informed of
the trust and its administration.” The second
and third duties outlined in parts (2) and (8),

‘The 1976 House Testimony Folder for S.B. 79
(later enacted and codified at HRS § 560:7-303)
contained a copy of UPC Notes, July 1972. For
an analysis of the trust provisions in the UPC,
that publication referred to an essay by Bugene
F. Scoles, “Administration of Trusts,” contained
in the first edition of the Uniform Probate Code
Practice Manual. Although the first edition is not
readily available, the second edition notes that
Scoles’ essay is “identical to that contained in
the original Manual.” Scoles on Trusts, at 588.

66

vespectively, spring to life “upon reasonable
request” of a beneficiary. Because these
duties are distinct, a trustee’s compliance
with, for example, two of the three duties,
does not abrogate responsibility for the third.

HI Accordingly, although trustees may
fulfill their affirmative duty by supplying an-
nual accountings to a beneficiary, trustees
must still provide “information about the as-
sets of the trust and the particulars relating
to the administration” upon the beneficiary’s
“reasonable request.” HRS § 560;7-803(2).
Put another way, by a plain reading of the
statute, the distribution of annual account-
ings that may provide information similar to
that requested does not alter the analysis of
a requests “reasonableness’—it neither
heightens the standard of “reasonableness”
applied to beneficiary requests, nor does it
undermine the degree of “reasonableness” of
the requests. The ICA therefore erred when
it concluded that because the Trustees al-
ready provided beneficiaries with annual fi-
nancial statements and accounts, Christopher
and Myrna were required to provide addi-
tional reasons to overcome the presumption
of regularity and good faith of the Trustees,

HI That Christopher’s and Myrna’s re-
quests “covered a large swath of informa-
tion” also does not bear on whether their
requests were “reasonable.” HRS § 560:7-
803(2) does not condition a trustee’s duty on
the complexity or numerosity of a trust’s
transactions. Unlike the legions of documents
that might result from requests for unlimited
access to trust records, which courts have
denied, see, e.g., Bogert’s on Trusts § 962
n.8 (8d ed, 2010) (cases cited), here, Christo-
pher and Myrna requested the documents
reviewed by the Master, who focused on
diserete issues during a discrete period.
Thus, the volume of those documents relates
more to the nature of the administrative
activity of the Trust rather than to any un-
wieldly scope of the request, and therefore
does not weigh against the “reasonableness”
of Christopher’s and Myrna’s requests. See,
og. Strauss _v. Superior Court, 36 Cal.2d
806,224 P.2d 726, 781 (1950) (“The fact that
the [trustee] may find it inconvenient or trou-

19. We observe that HRS § 560:7-303(2) does not
require trustees to provide copies of all requested
trust administration documents. Trustees may

blesome to produce voluminous records will
not defeat petitioner's right of inspection.”
(citations and internal quotation marks omit-
ted).

I The Trustees also argue that Christo-
pher’s and Myrna’s requests were not “rea-
sonable” because “open door” access had pre-
viously been granted to them. However,
nothing in HRS § 560:7-308 restricts a bene-
ficiary from obtaining access to trust admin-
istration documents because the beneficiary
was previously granted access but did not
take advantage of it at that time. Indeed, the
Trustees fail to explain why Christopher’s
and Myrna’s April 2012 requests in the Peti-
tion to Compel (filed consequent to the
March 2012 Master's Report) were rendered
unreasonable because of “open door” access
that ended in 2007.

For these reasons, the ICA erred in con-
cluding that Christopher's and Myrna’s re-
quests were not “reasonable.” The plain
language of the statute does not support
consideration here of the factors applied by
the ICA.

B. Based on the Legislative History of
HRS § 560:7-303 and Established
Treatises, “Reasonable” Refers to the
Time and Place at Which a Request Is
Made, and Does Not Refer to the
Scope of the Request

‘The statute’s legislative history and estab-
lished trust treatises also do not support the
ICA’s conclusion that Christopher’s and Myr-
na’s requests for trust documents were not
“reasonable.” Rather, these sources indicate
that “reasonable” in HRS § 560:7-303 refers
to the time and place at which a request is
made, and is not directed at the scope of the
request,

Aside from a change of gendered terms,
the relevant portions of HRS § 560:7-303
remain unchanged since the statute’s incep-
tion in 1976, See 1976 Haw. Sess. Laws Act
200, § 1 at 466-67 (enacting S.B. 79). Addi-
tionally, the 1976 statute is nearly identical to
the 1969 Official Text of the Uniform Probate

fulfill their duties by providing a sufficient or
adequate opportunity to review and inspect these
requested documents.

Code (“UPC”), with the sole exceptions that
parts (2) and (8) were instead denoted by (b)
and (c) in the UPC, and that the UPC con-
tained the word “relevant” prior to “informa-
tion” in part (b). See Uniform Probate Code
§ 7-808 (1969), In sum, HRS § 560:7-8038
(2006) is substantially the same as HRS
§ 560:7-808 (1976) and the 1969 UPC upon
which the law was based. Because of this
continuity, the legislative history of HRS
§ 560:7-808 (1976) is probative of the legisla-
ture’s ongoing intent regarding a trustee’s
duty to inform,

That history, including the documents and
testimony considered by the legislature, dem-
onstrates a clear recognition that trustees
have a duty to supply trust information to
requesting beneficiaries. For example, the
House Research Office’s November 7, 1975
Comparison and Analysis of the Uniform
Probate Code, included as part of the 1976
House Testimony Folder for 8.B. 79, speci-
fied, “The UPC imposes on the trustee the
duty to account to beneficiaries rather than
the court. In addition, the trustee must sup-
ply the beneficiary with information concern-
ing the terms and assets of the trust if
requested.” House Research Office, Compari-
son & Analysis of the Uniform Probate Code
(Nov. 7, 1975) (unpaginated; under the head-
er for “Sec, 7-808. Duty to Inform and Ac-
count to Beneficiaries”) (emphases added).
This House commentary echoes the careful
analysis of the Judicial Council of Hawaii’s
1972 Hawaii Probate Code Revision Project,
which was chaired by Chief Justice William
S. Richardson. See William S. Richardson,
“Letter on behalf of the Judicial Council of
Hawaii to the Hon. David C. McClung, Presi-
dent of the Senate,” Feb. 27, 1978 (submit-
ting the Judicial Council’s report to the legis-
lature “in response to Act 128 of the 1970
Session,” which appropriated funds “to study
and review the probate laws of the State of
Hawaii and to prepare for enactment in Ha-
waii, with appropriate conforming amend-
ments, the Uniform Probate Code”); Judicial
Council of Hawaii, Hawaii Probate Code Re-

20, Indeed, section 813 of the 2010 Uniform Trust
Code, “Duty to Inform and Report,” which is
derived from the 1969 UPC, “allows the benefi-
ciary to determine what information is relevant
to protect the beneficiary’s interest” by requiring
“a trustee [10] promptly respond to a beneficia-
ry’s request for information related to the admin-

67

vision Project, The Uniform Probate Code
(Hawaii) 384 (1972) (“(Section 7-808 of] [tlhe
U.P.C, imposes on the trustee the duty to
account to beneficiaries rather than the
court. In addition, the trustee must supply
the beneficiary with information concerning
the terms and assets of the trust if request-
ed.” (emphases added)). See_also Judicial
Council of Hawaii, Hawaii Probate Code Re-
vision Project, at 888 (observing the UPC
comment on section 7-303 states that “fur-
ther information may be obtained by the
beneficiary upon request”).

In sum, neither the UPC commentary, the
Judicial Council of Hawaii’s analysis, nor the
House Research Office’s observations sup-
port an interpretation of the phrase, “upon
reasonable request,” as one that limits a
beneficiary's access to only certain trust doc-
uments, Nothing in the legislative history of
S.B, 79 states to the contrary. See, e.g., Conf.
Comm, Rep. No. 24-76, in 1976 Senate Jour-
nal, at 872 (commenting on section 7-308 only
insofar that part (1) was changed from the
initial draft to “clarify who is entitled to
receive notice of registration”).””

This is in accord with the fundamental
tenet that, “[flor the reason that only the
beneficiary has the right and power to en-
force the trust and to require the trustee to
carry out the trust for the sole benefit of the
beneficiary, the trustee’s denial of the benefi-
ciary’s right to information constitutes a
breach of trust.” Bogert’s on Trusts § 961,
at 8-4 (2d rev. ed, 1983), Accordingly, so
long as documents requested of a trustee
pertain to “information about the assets of
the trust and the particulars relating to the
administration,” any limitation on a benefi-
ciary’s access to trust administration docu-
ments imposed by the phrase,” “upon rea-
sonable request,” is not based on the type or
volume of the documents requested,

Although the UPC and the legislative his-
tory behind Act 200 do not expressly define
the term, “upon reasonable request,” at the

istration to the trust,” without any qualification
that the request be “reasonable.” Uniform Trust
Code § 813(a) & cmt. (2010). Instead, a trustee’s
“[plerformance is excused only if compliance is
unreasonable under the circumstances.” Id, (em-
phasis added).

68

time of the statute’s implementation, the Re-
statement (Second) of Trusts illustrated what
constituted a “reasonable request”:
Duty to Furnish Information
The trustee is under a duty to the benefi-
ciary to give him upon his request at rea-
sonable times complete and accurate infor-
mation as to the nature and amount of the
trust property, and to permit him or a
person duly authorized by him to inspect
the subject matter of the trust and the
accounts and vouchers and other docu-
ments relating to the trust,
Restatement (Second) of Trusts § 178 (1959)
(emphasis added). Although “at reasonable
times” can be interpreted to modify either
when the request must be made by the bene-
ficiary, or by when the trustee must give
information, commentary in the Restatement.
(Third) of Trusts points to the former:
(2) Except as provided in § 74 or as per-
missibly modified by the terms of the
trust, a trustee also ordinarily has a duty
promptly to respond to the request of any
beneficiary for information concerning the
trust and its administration, and to permit.
beneficiaries on a reasonable basis to in-
spect trust documents, records, and prop-
erty holdings.
Restatement (Third) of Trusts § 82(2) (2007)
(emphasis added); see_also Restatement
(Third) of Trusts § 82 cmt. a (clarifying that
“on a reasonable basis” refers to a beneficia-
ry’s inquiries being made at “reasonable
hours and intervals”). As such, whether a
beneficiary’s request for trust administration
documents pursuant to HRS § 560:7-303 is
“reasonable” depends on the time and place
the request is made.
Bogert’s on Trusts elaborates on the rea-
sonableness of the time and place of a re-
quest:

21. Unless ordered by a court, “trust administra-
tion documents” do not include sensitive person-
al information about other beneficiaries, such as
the diagnosis of a serious illness, that may be in
the possession of trustees. See Restatement

Third) of Trusts § 82 cmt. f (“When a beneficia-
Ty's request for information may encompass sen-
sitive, private information acquired by the trustee
about other beneficiaries, the extent of the trus-
tee’s duties may require a balancing of compet-
ing interests. While recognizing the requesting
beneficiary's ‘need to know’ ..., a trustee—and
ultimately a court—may need to provide some

If the beneficiary asks for relevant infor-
mation about the terms of the trust, its
present status, past acts of management,
the intent of the trustee as to future ad-
ministration, or other incidents of the ad-
ministration of the trust, and these re-
quests are made at a reasonable time and
place and not_merely vexatiously, it is the
duty of the trustee to give the beneficiary
the information which he has asked.

Bogert’s on Trusts § 961, at 4 (2d rey. ed.
1988) (emphasis added).

I Thus, if a beneficiary’s request for
trust administration documents”! is made at
a reasonable time and place and not vexa-
tiously or at unreasonable intervals, it should
be considered a “reasonable request” for the
purposes of HRS § 560:7-808.

IM The record here shows that the re-
quests were neither vexatious nor made at
unreasonable times. Rather, in multiple hear-
ings on the issue prior to the issuance of the
Master’s Report, the Probate Court ex-
plained that Christopher’s and Myrna’s re-
quests for documents would be considered
after the filing of the Master’s Report. Al-
though a probate court has the discretion to
decide whether a probate matter is trans-
ferred to the civil trials calendar, or whether
to retain the matter and permit discovery, a
probate court’s discretion as to a beneficia-
ry’s request for trust administration docu-
ments under HRS § 560:7-308 is limited to
determining whether the request falls within
the scope of the statute, ie. was made at a
reasonable time and place and not vexatious-
ly”

Accordingly, the ICA erred in affirming
the Probate Court’s approval and adoption of
the Master’s Report without first granting
Christopher's and Myrna’s requests to access

response that offers a compromise between the
confidentiality or privacy concerns of some and
the interest-protection needs of others.””).

22. The probate court retains broad discretion to
consider al] the circumstances of a case, includ-
ing the volume of documents requested, in deter-
mining whether a request was made vexatiously.
As noted in Part IV.A., however, the potential
burden on trustees due to a large volume of
requested documents, alone, does not render a
request unreasonable or vexatious.

Trust administration documents. The ICA
too narrowly construed the scope of HRS
§ 560:7-803 and inappropriately determined
that the statute was trumped by the pre-
sumption of regularity and good faith typical-
ly afforded trustees. Rather, pursuant to
HRS § 560:7-808, Christopher’s and Myrna’s
requests for access to Trust administration
documents that were reviewed by the Master
should have been granted. Any other re-
quests for Trust documents pursuant to HRS
§ 560:7-308 by Christopher and Myrna
should be evaluated on remand as to whether
they were made at a reasonable time and
place and not merely vexatiously.

V. Conclusion

For the foregoing reasons, we vacate the
Probate Court’s August 2, 2012 Judgment
and the ICA’s July 11, 2016 Judgment on
Appeal filed pursuant to its June 2, 2016
Memorandum Opinion as to the Probate
Court's “Order Denying Beneficiary Christo-
pher Damon Haig’s Petition to Compel Pro-
duction of Documents and Continue Deadline
to Respond to Master’s Report, Filed April
18, 2012” and “Order Granting Petition for
Approval of 1999, 2000, 2001, 2002 and 2008
Income and Principal Accounts.” The Pro-
bate Court’s August 2, 2012 Judgment and
the ICA’s July 11, 2016 Judgment on Appeal
are otherwise affirmed. This matter is re-
manded to the Probate Court for proceedings
consistent with this opinion,

23, The court need not reach the issue of spolia-
tion. As Christopher and Myrna have not yet
been granted access to Trust documents to deter-
mine if the Master's conclusions regarding the

398 P.3d 658
In the MATTER OF the ISHIDA-
WAIAKAMILO LEGACY TRUST
Dated June 27, 2006

In the Matter of the Ishida-Winant.
Legacy Trust Dated June 27,
2006

SCWC-13-0000449
Supreme Court of Hawai‘,
JUNE 15, 2017

loss of trust documents was indeed unproblemat-
ic or harmless to the approval of the accounts, it
would be premature for this court to clarify the
Jaw of spoliation at this time.

aq
o

Tc

Margery S. Bronster, Rex Y. Fujichaku,
Honolulu, and Angela K.H. Jacso, for peti-
tioners,

Michael A, Lilly and Valerie M. Kato, Hon-
olulu, for respondents,

RECKTENWALD, C.J., NAKAYAMA,
McKENNA, POLLACK, AND WILSON,
dd,

OPINION OF THE COURT BY
RECKTENWALD, C.J.

This case arises from the administration of
two irrevocable trusts established by Richard
and Rachel Ishida; the Ishida-Waiakamilo
Legacy Trust (Waiakamilo Trust), and the
Ishida-Winant Legacy Trust (Winant Trust)
(collectively, “the Trusts”). The Trusts name
as beneficiaries the Ishidas’ daughters Jeri S.
Wilson (Jeri) and Juney M. Ishida (Juney),
and their granddaughter Kauialohaokalani R,
Wilson (Kaui), but they expressly exclude the
Ishidas’ third daughter, Richardeen Kimura
(Deenie), Six years after the creation of the
Trusts, the Ishidas filed petitions in Probate
Court of the First Cireuit (probate court)
requesting rescission of both Trusts. The
Ishidas alleged that they never intended to
make the Trusts irrevocable, and that Jeri
had wrongfully transferred ownership of
property from the Waiakamilo Trust to her-
self. Jeri and Juney opposed the petitions.

The probate court found that the transfer
of property to Jeri had violated the terms of
the Waiakamilo Trust, ordering the property
returned to the Trust; it declined to rescind
or reform the Trusts. The Ishidas appealed.
to the Intermediate Court of Appeals (ICA),
which affirmed the probate court’s denial of
their petitions.

The Ishidas’ Application for Writ of Cer-
tiorari presents two issues to this court: 1)
whether the probate court’s failure to return
the Waiakamilo Trust property to the Ishidas
was an abuse of discretion in light of alleged
wrongdoing by Jeri, and 2) whether the ICA
improperly discounted the evidentiary value
of the Ishidas’ petitions, which were verified

pursuant to Hawai'i Probate Rules (HPR)
Rule 5a).

First, we hold that the probate court did
not err in denying the Ishidas’ requested
relief, as the matter was within the court’s
equitable discretion. Second, we affirm the
ICA’s holding that the probate court was not,
required to accept the Ishidas’ petitions at
face value, and in doing so we clarify the
status of HPR Rule 5(a) statements in rela-
tion to other types of testimonial evidence.

I, Background

The Ishidas hired an attorney to draft
documents creating the Trusts, which they
executed on June 27, 2006. The Ishidas set-
tled each Trust with a single residential
and/or commercial property. Jeri and Juney
were named as trustee for the Waiakamilo
Trust and Winant Trust, respectively. The
Waiakamilo Trust designates Jeri as benefi-
ciary, with full ownership of the Trust’s prop-
erty passing to Jeri’s daughter Kaui upon
Jeri’s death, The Winant Trust provides that
its property will be distributed to Juney as
beneficiary upon the death of the Ishidas,
with full ownership passing to Kaui upon
Juney’s death. The Trusts are irrevocable,
with both including the following provision:

Section 3. Irrevocable Trust,

Our Trust is irrevocable. Except as ex-

pressly herein provided to the contrary, no

‘Trustor or any other person shall have any

right or power to alter, amend, or in any

manner whatsoever modify any of the pro-
visions hereof.

Additionally, both the Waiakamilo Trust
and the Winant Trust specifically exclude the
Ishidas’ third daughter, Deenie, with both
Trusts including the following provision:

ec. Exclusions

We hereby exclude RICHARDEEN R.

KIMURA and such person’s descendants

1, HPR Rule 5 (1999) provided:
Rule 5. SIGNING OF PLEADINGS.

(a) Verification of Pleadings; Affidavits. All
pleadings (other than those signed by a party’s
attorney) shall include a statement at the end
and before the signature of the person present-
ing the pleading to the effect that the person
understands that the document is deemed to
include an oath, affirmation, or statement to
the effect that its representations are true as
far as the person executing or filing it knows
or is informed, and that penalties for perjury

71

as beneficiaries under our Trust Agree-
ment, including without limitation for the
purposes of intestate succession. For the
purposes of our Trust Agreement, all ex-
cluded persons shall be treated as having
died prior to the execution of our Trust

Agreement.

On March 28, 2007, Jeri and the Ishidas
executed a series of deeds, transferring own-
ership of the Waiakamilo Trust property
(Waiakamilo Property) from the trust to Jeri
personally,

On May 4, 2012, the Ishidas filed in pro-
bate court a Petition for Rescission of War-
ranty Deed, Imposition of Constructive Trust
and an Order for Disgorgement related to
the Waiakamilo Trust (Waiakamilo Petition),
and a Petition for Reformation of Trust
and/or Order Setting Aside the Ishida-Win-
ant Trust (Winant Petition). The Ishidas al-
leged that, although they had asked their
attorney to make simple wills and revocable
trusts as part of their estate planning, their
attorney went against their wishes and de-
signed the Waiakamilo and Winant Trusts to
be irrevocable. The Ishidas further claimed
that Jeri had schemed with their attorney to
transfer the Waiakamilo Property to Jeri
personally in the March 28, 2007 deeds. Ac-
cordingly, the Ishidas asked the probate
court to rescind the deed transferring the
Waiakamilo Property to Jeri, and to set aside
both Trusts and restore ownership of Trust
properties to the Ishidas. In apparent com-
pliance with HPR Rule 5(a),! both petitions
included the following text above the Ishidas’
signatures:

THE UNDERSIGNED UNDERSTANDS

THAT THIS DOCUMENT IS DEEMED

TO INCLUDE AN OATH, AFFIRMA-

TION, OR STATEMENT TO THE EF-

FECT THAT ITS REPRESENTATIONS

may follow deliberate falsification. Such 2
statement shall be accepted in lieu of an affida-
vit as to the facts stated in the pleading. The
signature of an applicant in informal proceed-
ings shall be notarized,

Tf a pleading requires consideration of facts
not appearing of record or verified as provided
above, it shall be supported by affidavit, signed
by the person having knowledge of the facts
and competent to testify. An attorney may sub-
mit a declaration in lieu of an affidavit to
support facts outside of the record.

72

ARE TRUE AS FAR AS THE UNDER-

SIGNED KNOWS OR IS INFORMED,

AND PENALTIES FOR PERJURY

MAY FOLLOW DELIBERATE FALSI-

FICATION.

Jeri and Juney (Respondents) disputed the
Ishidas’ account of the Trusts’ creation,
claiming that the Ishidas intentionally made
the trusts irrevocable because they had disin-
herited Deenie. Respondents further con-
tended that Deenie had recently reconciled
with their parents, and that she was behind
the petitions, Respondents also alleged that
the transfer of property from the Waiakamilo
Trust to Jeri personally had been done with
the Ishidas’ knowledge in order to avoid “is-
sues” raised by the Ishidas’ accountant. Re-
spondents concluded that “further discovery
into the Ishidas’ allegations is required as
they raise issues of material fact,” asking
that both petitions be assigned to the civil
trials calendar pursuant to HPR Rule 20(a).?

The Ishidas replied to Respondents’ objec-
tions, asserting, “[w]hile the allegations
against Deenie are absolutely untrue, they
are irrelevant and the Ishidas will not ad-
dress them.” The Ishidas urged the probate
court to grant their petitions forthwith, argu-
ing that “the equities of the case, as well as
public policy” required immediate relief. The
Ishidas opposed discovery or otherwise pro-
longing the proceedings in court, asserting
that “the Court has all the information it
needs to declare the transfer void and return
the [Trust properties] to [their] rightful own-
ers, the Ishidas.”

After a hearing, the probate court issued
an order rescinding the March 28, 2007
deeds and restoring the Waiakamilo Proper-
ty to the Waiakamilo Trust, finding that the
transfer had violated the terms of the Waiak-
amilo Trust. However, the probate court de-
nied all other relief requested. The Ishidas
filed petitions for reconsideration of the or-
ders, which the probate court denied, and
final judgment was entered for both petitions
on May 2, 2013,

The Ishidas appealed to the ICA, arguing
that the probate court erred in 1) failing to
“right the injustice done to the Ishidas” by

2, HPR Rule 20(a) (1995) provides:
(a) Assignment. The court by written order
may retain a contested matter on the regular

refusing to set aside the Trusts and restore
the Properties to the Ishidas, and 2) failing
to reform the Trusts because they “were a
mistake.” Accordingly, the Ishidas urged the
ICA to reform or set aside the Waiakamilo
and Winant Trusts, or in the alternative, to
impose constructive trusts on the Waiakamilo
and Winant Trust properties.

In a published opinion, the ICA examined
each of the Ishidas’ arguments in turn, find-
ing that the Ishidas had failed to show by
clear and convincing evidence circumstances
warranting the reformation of the Trusts or
other equitable relief. In re Ishida Waiakami-
Jo Legacy Trust, 188 Hawai'i 98, 103-09, 377
P.3d 39, 44-50 (App. 2016). Regarding the
evidence presented by the Ishidas, ICA stat-
ed:

On appeal, the Ishidas refer to “compelling

evidence” and “the clear testimony of the

Settlors regarding their own intent and the

mistake that was made,” in apparent refer-

ence to the Ishidas’ signatures on the

Waiakamilo Petition following a statement

that:

THE UNDERSIGNED UNDER-
STANDS THAT THIS DOCUMENT IS
DEEMED TO INCLUDE AN OATH,
AFFIRMATION, OR STATEMENT
TO THE EFFECT THAT REPRE-
SENTATIONS ARE TRUE AS FAR
AS THE UNDERSIGNED KNOWS
OR IS INFORMED, AND PENAL-
TIES FOR PERJURY MAY FOLLOW
DELIBERATED FALSIFICATION.

As set forth in HPR Rule 5(a), this attesta-
tion is accepted in lieu of a sworn affidavit
to the same effect, i.e., that the information
contained therein is true as far as the
affiant_knows or is informed, and thus
satisfied the requirements of the rule. It is
not, however, identical in every way to
testimony that has been subject to cross-
examination, or a sworn affidavit, or a
declaration made under penalty of law,
that specified factual statements are true
and correct. It is within the province of the
trial court to determine the credibility of a

probate calendar or may assign the contested
matter to the civil trials calendar of the circuit
court,

witness and the weight to be given to a

witness's testimony. See, e.g., Tamashiro v.

Control Specialist, Inc, 97 Hawai'i 86, 92,

84 P.8d 16, 22 (2001). Written testimony

that could be based upon limited memory

or knowledge, or information and belief,
rather than personal knowledge, particu-
larly testimony that purports to reflect the
joint recollection and intent of two people,
without distinction, might reasonably be
viewed as less reliable or less convincing
than other forms of evidence.

Id. at 106-07, 377 P.8d at 47-48,

The ICA also determined that the creation
of the irrevocable trusts was not “so inher-
ently improvident and unreasonable” that the
probate court was required to infer that it
was the product of delusion or mental infir-
mity. Id. at 109, 377 P.3d at 50 (citing Love v.
Love, 17 Haw. 206, 215 (1905)). Accordingly,
the ICA concluded that the probate court did
not abuse its discretion when it declined to
impose a constructive trust on the Trust
properties or otherwise return them to the
Ishidas. Id. The ICA thus affirmed the pro-
bate court’s judgments. Id.

Il, Standards of Review

A. Equitable Relief

WH “The relief granted by a court in eq-
uity is discretionary and will not be over-
turned on review unless the circuit court
abused its discretion by issuing a decision
that clearly exceeds the bounds of reason or
disregarded rules or principles of law or
practice to the substantial detriment of the
appellant,” Aickin y. Ocean View Invs. Co.,
Inc,, 84 Hawai'i 447, 453, 935 P.2d 992, 998
(1997) (internal quotation marks, citation,
and brackets omitted).

B. Interpretation of Court Rules

HH The interpretation of a court rule is
reviewed de novo. Sierra Club v. Dep't of
Transp., 120 Hawai'i 181, 197, 202 P.8d 1226,
1242 (2009),

I. Discussion
In their Application for Writ of Certiorari,
the Ishidas argue that the ICA erred in 1)
holding that the probate court did not abuse
its discretion when it declined to impose a
constructive trust on the Waiakamilo Proper-

73

ty or otherwise return it to the Ishidas; and
2) coneluding that the Ishidas’ statements in
their petitions were “less reliable and less
convincing,” even though those statements
were verified pursuant to HPR Rule 5(a).

A. Denial of Equitable Relief

HM The ICA did not err in finding that
the Ishidas failed to produce clear and con-
vineing evidence that the Trusts were the
result of mistake or other grounds justifying
equitable relief.

HM “A constructive trust arises where
a person holding title to property is subject
to an equitable duty to convey it to another
on the ground that he would be unjustly
enriched if he were permitted to retain it.”
Kam Oi Lee v. Fong Wong, 57 Haw. 187, 189,
552 P.2d 635, 637 (1976) (citation omitted).
Hawai'i courts will impose a constructive
trust “where the evidence is clear and con-
vincing” that the grantee will be unjustly
enriched if allowed to retain the entire prop-
erty. Maria v. Freitas, 73 Haw. 266, 274, 882
P.2d 259, 264 (citation omitted). The Restate-
ment (Third) of Property explains the ratio-
nale for this high standard:
When a donative document is unambigu-
ous, evidence suggesting that the terms of
the document vary from intention is inher-
ently suspect but possibly correct....
Only high-safeguard allowance of extrinsic
evidence achieves the primary objective of
giving effect to the donor’s intention.
Restatement (Third) of Property § 12.1 emt.
b (Am. Law Inst. 2003) (emphasis added).
Here, the Waiakamilo Trust is unambigu-
ous, stating in bold type that it is an irrevo-
cable trust. The Ishidas thus had to offer
clear and convincing evidence that Jeri would
be unjustly enriched if the Waiakamilo Trust
remained unaltered, They failed to do so, The
Waiakamilo Petition made a colorable argu-
ment that the Ishidas did not intend to make
the Waiakamilo Trust irrevocable, but Re-
spondents made an equally plausible argu-
ment that the Ishidas simply changed their
minds regarding the Trusts as a result of
their alleged reconciliation with Deenie.
Moreover, the Ishidas provided little evi-
dence to support their arguments beyond the

74

bare assertions in the Waiakamilo Petition,
and they opposed discovery or assignment of
their case to the civil trials calendar—steps
which might have allowed them to adduce
additional evidence in support of their posi-
tion. Faced with two competing stories and
seant evidence, it was well within the probate
court’s discretion to deny equitable relief.
See, eg. Aickin 84 Hawai'i at 449 n.1, 935
P.2d at 994 nJ1 (“Equity is a discretionary
remedy; the trial court was not obligated to
grant it.”), Thus, the ICA did not err in
affirming the probate court’s denial of the
Ishidas’ request to impose a constructive
trust upon the Waiakamilo Property.

B. Verification

The Ishidas argue that the ICA erred “be-
cause it should have treated the Ishidas’
account of their intent and experiences as
personal, and thus constituted personal
knowledge.” In support of this contention,
the Ishidas cite HPR Rule 5(a), arguing that
pursuant to this rule their petitions “had the
effect of an affidavit.” The Ishidas also assert
that the ICA displayed “uncritical reliance”
on similarly verified statements from Re-
spondents’ briefs, arguing that there is “no
principled reason to treat the Ishidas’ and
Jeri/Juney’s Rule 5(a) statements differently,
as the ICA did.” Lastly, the Ishidas argue
that the ICA’s position “will undermine the
Rule 5(a) verification” routinely relied upon
in probate filings,

We agree with the Ishidas’ argument to
the extent that a portion of the ICA’s opinion
does have the potential to “undermine Rule
5(a) verification.” Referring to the verifica-
tion language in the Ishidas’ petitions, the
ICA stated:

3. Although the ICA refers to claims made in
Respondents’ verified statements, it does not
make findings regarding the veracity of these
claims. See, e.g., In re Ishida Waiakamilo Legacy
Trust, 138 Hawaii at 108, 377 P.3d at 49 (“in
her objection, Jeri averred that. ,..””)

4, As noted above, the following text based on
HPR Rule 5(a) is printed above the signature
block on the Waiakamilo and Winant Petitions:

THE UNDERSIGNED UNDERSTANDS THAT
THIS DOCUMENT IS DEEMED TO IN-
CLUDE AN OATH, AFFIRMATION, OR
STATEMENT TO THE EFFECT THAT ITS

It is not, however, identical in every way to

testimony that has been subject to cross-

examination, or a sworn affidavit, or a

declaration made under penalty of law,

that specified factual statements are true
and correct.
In re Ishida Waiakamilo Legacy Trust, 138
Hawai'i at 107, 377 P.38d at 48 (emphasis in
original).

I To the extent that this sentence sug-
gests that a statement verified pursuant to
HPR Rule 5(a) has less evidentiary weight
than a sworn affidavit, it is in error. HPR
Rule 5(a) provides that a verified statement
“shall be accepted in lieu of an affidavit as to
the facts stated in the document.” A court
must thus accord a statement verified pursu-
ant to HPR 5(a) the same evidentiary weight
it would a sworn affidavit of identical content.

However, on the whole the ICA’s analysis
is correct in its affirmance of the probate
court’s judgments, The ICA did not display
“uncritical reliance” on Jeri and Juney’s veri-
fied petitions, but rather reviewed the record
in accordance with the relevant standard, As
stated in the ICA’s opinion;

We consider the Ishidas’ verification in the

context of the clear and convincing evi-

dence standard applicable to their request
for equitable relief from the unambiguous
terms of the Waiakamilo Trust.
In re Ishida Waiakamilo Legacy Trust, 138
Hawai'i at 107, 877 P.8d at 48,

HI The ICA correctly noted that “it is
within the province of the trial court to de-
termine the credibility of a witness and the
weight to be given to a witness’s testimony.”
Id, Whether or not the Ishidas’ statements in
their petitions constituted clear and convine-

REPRESENTATIONS ARE TRUE AS FAR AS
THE UNDERSIGNED KNOWS OR IS IN-
FORMED, AND PENALTIES FOR PERJURY

MAY FOLLOW DELIBERATE FALSIFICA-
TION.

5. As noted by the commentary to HPR Rule 5:
Because the Registrar processes a large num-
ber of informal applications filed by pro se
applicants, it is important to provide an easy
mechanism for the Registrar to determine that
the applicant is who he or she claims to be. A
notarized signature gives the Registrar this
proof without adding any significant cost to the
probate process,

a
ou

ing evidence was a question clearly within
the probate court’s discretion. The ICA care-
fully considered the record, and it correctly
concluded that the probate court did not
abuse its discretion in declining to impose a
constructive trust or other otherwise modify
the Trusts in light of the evidentiary burden
the Ishidas were required to satisfy,

IV. Conclusion
For the foregoing reasons, the ICA did not.
err in affirming the probate court’s judg-
ment. Thus, the ICA’s September 6, 2016
judgment on appeal is affirmed,

398 P.3d 664

Krishna NARAYAN; Sherrie Narayan; Vi-
rendra Nath; Nancy Makowski; Simon
Yoo; Sumiyo Sakaguchi; Stephen Xiang
Pang; Faye Wu Liu; Massy Mehdipour,
individually and as Trustee for Massy
Mehdipour Trust dated June 21, 2006; G.
Nicholas Smith; Tristine Smith; Clifford
W. Chaffee; Bradley Chaffee, individual-
ly and as Trustee of the Charles V.
Chaffee BRC Stock Trust dated 12/1/99
and The Clifford W. Chaffee BRC Stock
Trust dated 1/4/98; Gary S. Anderson;
Ronald W. Lorenz and Renee Y. Lorenz,
Plaintiffs-Appellants,

ve

ASSOCIATION OF APARTMENT OWN-
ERS OF KAPALUA BAY CONDOMINI-
UM; Cathy Ross; Robert Parsons; and
Andrew Mitchell, Defendants-Appellees,

SCAP-16-0000588

Supreme Court of Hawai‘.
JUNE 15, 2017

1, The Honorable Rhonda A. Nishimura presided.

Joachim P. Cox, Robert K. Fricke, and
Kamala 8. Haake, Honolulu, for appellants,

Michele-Lynn E. Luke, Honolulu, for ap-
pellees.

RECKTENWALD, C.J., MeCKENNA,
POLLACK, AND WILSON, JJ., AND.
CIRCUIT JUDGE KUBO, IN PLACE OF
NAKAYAMA, J., RECUSED

OPINION OF THE COURT BY

McKENNA, J.
I. Introduction

This is the third opinion in a series of
recent decisions addressing an arbitrator's
statutory disclosure requirements and vaca-
tur on the basis of evident partiality based on
Hawai'i Revised Statutes (“HRS”) §§ 658A-
12 and -23 (Supp. 2001); see Noel Madamba
Contracting LLC v. Romero, 187 Hawaii 1,
364 P.3d 518 (2015); Nordic PCL Const., Inc,
y. LPIHGC, LLC, 136 Hawai‘ 29, 358 P.8d 1
(2015). Nordic and Madamba established
standards for evaluating claims of evident
partiality. Here, we clarify the scope of rela-
tionships that require disclosure.

Krishna Narayan, Sherrie Narayan, Viren-
dra Nath, Nancy Makowski, Simon Yoo, Su-
miyo Sakaguchi, Stephen Xiang Pang, Faye
Wu Liu, Massy Mehdipour, G. Nicholas
Smith, Tristine Smith, Clifford W. Chaffee,
Bradley Chaffee, Gary S. Anderson, and
Ronald W. Lorenz (collectively, “Appel-
lants”), appeal from an August 15, 2016 final
judgment of the Cireuit Court of the First
Circuit (“circuit court”),! based upon its find-
ings of fact, conclusions of law, and order
confirming an arbitration award in favor of
the Respondents, Association of Apartment
Owners of Kapalua Bay Condominium, Cathy
Ross, Robert Parsons, and Andrew Mitchell
(collectively, the “AOAO”).

78

This case concerns a dispute over financial
issues that arose during construction of the
Kapalua Bay Condominium project (the
“Project”), Appellants are a group of individ-
ual condominium owners in the Kapalua Bay
Condominium. Previously, Appellants and
several other condominium owners sued the
Project’s developers and management com-
panies regarding financial problems that
arose during construction (the “Developer
Action”). See Narayan y. Ritz-Carlton Dev.
Co., Inc, 185 Hawaii 827, 350 P.8d 995
(2015) The present matter arose from the
Appellants’ challenge of the AOAO’s vote to
convert the residential community into a ho-
tel. The dispute was submitted to arbitration,
The issues on appeal relate to the adequacy
of the neutral arbitrator's disclosures in the
arbitration, The circuit court concluded that
the undisclosed relationships did not consti-
tute “evident partiality” requiring vacatur.
We affirm.

IL Background
A. Arbitration Proceedings

1, Initial Disclosures and Pre-arbitra-
tion Motions

The matter was originally submitted to the
American Arbitration Association but, by
agreement of the parties, was referred to
Dispute Prevention & Resolution, Ine,
(DPR”) on July 24, 2014, The parties select-
ed the Honorable Victoria Marks (ret.) to
serve as the neutral arbitrator (the “Arbitra-
tor”) on August 1, 2014.8 After her selection,

2, At issue before this court in the Developer
Action was whether the condominium owners
had entered into a valid agreement to arbitrate.
This court concluded that the condominium own-
ers did not unambiguously assent to arbitration
and, therefore, the purported agreement to arbi-
trate was unenforceable, See Narayan, 135 Ha-
wail at 335, 350 P.3d at 1003, On January 11,
2016, the United States Supreme Court vacated
this court's judgment and remanded the case for
further consideration in light of DIRECTV, Inc.
vy. Imburgia, — U.S, ——, 136 S.Ct, 463, 193
L.Ed.2d 365 (2015), See Ritz-Carlton Dev. Co. v.
Narayan, — U.S. ——, 136 8,Ct 800, 193
L.Ed.2d 701 (2016). The parties have recently
filed supplemental briefs and the remanded ac-
tion is pending disposition.

3. In some arbitrations with more than one arbi-
trator, arbitrators are appointed by parties with-

DPR provided the parties with the following
disclosures on her behalf:
I am not familiar with any of the parties,

Both Mr. Cox and Ms, Luke appeared
before me when I was on the bench."

I served as an arbitrator in a case where
Mr. Cox represented one of the parties,
That case was resolved before the arbitra-
tion hearing.

My husband, Robert A. Marks, is a lawyer
who is Of Counsel at Price Okamoto Hime-
no & Lum. I do not know the identity of all
of my husband’s clients. Similarly, I am
not aware of all the cases he is working on
and what lawyers he may be working with
or opposing. I do not believe that he cur-
rently has any cases with any of the law-
yers in this matter. Similarly, I do not
believe that he is familiar with any of the
parties or their principals.

I am on the Board of the following organi-
zations: 1) The Mediation Center of the
Pacifie; 2) The Hawaii Women’s Legal
Foundation; 8) The American Judicature
Society-Hawaii Chapter; 4) United Cere-
bral Palsy Association of Hawaii; and 5)
The Hawaii Soccer Association. The first 3
organizations are law related and lawyers
from various firms in Honolulu [—] large
firms to solo practitioners—sit on these
boards. In addition, the board members
change from year-to-year.

I am also a social golf member of MidPa-
cifie [sie] Country Club. I am not familiar
with all of the members of this club.

out an expectation of neutrality, It is not un-
common in commercial arbitrations with three
arbitrators for each party to appoint one non-
neutral arbitrator each; the two non-neutral ar-
bitrators then appoint a neutral arbitrator by
agreement. See Dalichi_Hawaili_Real Estate
Corp. v. Lichter, 103 Hawai'i 325, 343-44, 82
P.3d 411, 429-30 (2003). See generally, Seth H.
Lieberman, Something's Rotten in the State of
Party-Appointed Arbitration: Healing ADR's
Black Eye That is “‘Nonneutral Neutrals,” 5
Cardozo J. of Conflict Resol. 215 (2004) for a
discussion of the differences between neutral ar-
bitrators and non-neutral party-appointed arbi-
trators,

4, Joachim P, Cox, Bsq., represents the Appellants
and Michele-Lynn Luke, Esq. represents the
AQAQ,

Counsel and the parties should inform the

arbitrator and each other of any additional

information that a reasonable person
would consider likely to affect the impar-
tiality of the arbitrator.

I believe that I can be a fair and impartial

arbitrator in this matter.

The parties submitted their expert disclo-
sures and reports in March and September
2015. The witness lists were submitted in
October 2015.

On September 15, 2015, one month before
the arbitration hearing started, Appellants
moved to exclude the AOAO’s expert on con-
dominium governance, Philip Nerney, Esq.
(“Nerney”). Appellants argued, inter alia,
that Nerney was providing improper and un-
founded Jegal conclusions on liability. The
Arbitrator granted this motion in part and
denied it in part, and precluded Nerney from
testifying regarding any party's intent and
damages, but he was allowed to testify on
condominium governance issues.

2, Arbitration Hearing

The arbitration hearing was conducted in
several sessions from October 19, 2015
through November 12, 2015.

The AOAO’s expert on damages, Richard
Stellmacher (“Stellmacher”), testified at the
hearing. Among other things, Stellmacher
testified that he originally visited the Project
when an attorney for the Developer Action
briefly retained him, He misidentified the
attorney during his oral testimony and sub-
sequently submitted a declaration ® clarifying
that he “had been retained by [a]ttorney Lex
Smith [ (“Smith”) ], on behalf of his clients,
which included certain Marriott entities, in-
volved in other litigation.” ® The declaration
also stated that Stellmacher “contacted Mr,
Smith” to confirm that his work was termi-
nated shortly after he visited the property
and that he was not provided any work prod-
uct related to the matter. Over Appellants’

5, Stellmacher orally identified John Sopuch
(“Sopuch”) of the Starn O'Toole Marcus & Fish-
er law firm. Appellants moved to strike Stell-
macher’s expert opinions because his involve-
ment with Sopuch in this matter would have
created a conflict with one of the plaintiffs
named in the arbitration. The AOAO submitted
Stellmacher’s declaration in response to this mo-
tion, The declaration clarified that Stellmacher
had named Sopuch by mistake, with the confu-

79

hearsay objection, the Arbitrator admitted
the declaration into evidence,

On January 7, 2016, the Arbitrator issued
her final arbitration award in favor of the
AOAO.

8. Post-award Disclosure Demands

On January 13, 2016, Appellants requested.
that DPR provide updated disclosures “pur-
suant to DPR Arbitration Rule 9A and HRS
§ 658A-12” relating to the AOAO, counsel for
the AOAO, in-house counsel for the AOAO,
and the AOAO’s witnesses and experts. DPR
responded that it would not provide a sub-
stantive response to Appellants’ request as
“neither the applicable DPR Arbitration
Rules nor the relevant provisions of the Uni-
form Arbitration Statute (HRS Chapter
658A) provide for a post arbitration award
disclosure process[.]” On February 8, 2016,
Appellants sought additional disclosures re-
garding the Arbitrator’s relationship with the
Kobayashi Sugita & Goda (“KSG”) law firm.
DPR responded once again that it would not
provide a post-arbitration disclosure.

B. Circuit Court Proceedings

1. Motion to Confirm, Motion to Va-
cate, and Discovery

In the meantime, the AOAO filed a special
proceeding in the circuit court to confirm the
arbitration award. Before filing their memo-
randum in opposition, Appellants filed a No-
tice of Taking Deposition upon Written Ques-
tions of AOAO counsel Robert C. Kessner,
Esq., and his Jaw firm; the AOAO’s in-house
counsel, Peter Horovitz, Esq.; and the
AOAO’s expert witness, Nerney. Appellants
also filed a Notice of Taking Deposition upon
Written Questions of KSG, the law firm that
briefly retained Stellmacher for the Develop-
er Action but did not represent the AOAO

sion caused by the fact that Sopuch hired Stell-
macher’s firm in connection with a separate mat-
ter, and that he had not been retained by Sopuch
or by the Starn O'Toole firm in connection with
the Project,

6, Smith is an attorney with the Kobayashi Sugita
& Goda law firm, which served as counsel in the
Developer Action to the original developers of
the Project.

80

and had no direct involvement in the arbitra-
tion proceedings.”

Appellants also moved to vacate the award.
on grounds of evident partiality due to the
Arhbitrator’s refusal to provide post-award
supplementary disclosures. Appellants al-
leged that the AOAO’s position had no basis
in law or the applicable bylaws, that the
Arbitrator “oddly adopted [the AOAO’s] un-
supported interpretation of the law,” and
that “the Arbitrator’s findings fly in the face
of the law.” Appellants stated that they de-
manded post-award disclosures because they
were “surprised” by the arbitration award,
although they acknowledged they had no rea-
son to believe that the Arbitrator may be
partial to the AOAO during the course of the
arbitration. Yet, Appellants argued, “the Ar-
bitrator’s disregard for the law ... now cou-
pled with the Arbitrator’s refusal to provide
appropriate disclosures, calls into question
whether there are undisclosed relationships
with [the AOAO], [the AOAO’s] counselor or
[the AOAO’s] witnesses which arose during
the course of the arbitration and—to a rea-
sonable person—may have compromised the
Arbitrator’s neutrality.” Appellants request-
ed that the court continue the hearing given

7. Discovery from an arbitrator or arbitration or-
ganization pursuant to HRS § 658A-14 (Supp.
2001) is discussed in the text, infra, With respect
to court rules governing discovery, according to
Hawai'i Rules of Civil Procedure (HRCP”) Rule
81(g) (2006), Chapter V of the HRCP relating to
depositions and discovery (HRCP Rules 26
through 37) is applicable to HRCP Rule 81(a)(5)
(2006) “[alpplications to a circuit court under
chapter 658 [sic] relating to arbitration, and pro-
ceedings thereon prior to judgment.” Rule
81(g)(1) also provides:

the court may by order direct that said Chapter
V shall not be applicable to the proceeding if
the court for good cause finds that the applica-
tion thereof would not be feasible or would
work an injustice[.]
Although the propriety of post-award discovery is
not raised as an issue on appeal, we note that
HRCP Rule 81(g)(1)allows a court to prohibit or
restrict discovery in court proceedings relating to
arbitration if allowing discovery “would work an
injustice.” Cases restricting post-award discovery
include Midwest Generation EME, LLC v. Con-
tinuum Chem. Corp., 768 F.Supp.2d 939, 943

(NLD. IIL 2010) (“Post-award discovery is rare,

and courts have been extremely reluctant to al-

low it. It is often a ‘tactic’ employed by disgrun-
tled or suspicious parties who, having lost the
arbitration, are anxious for another go at it.”’)

(footnote omitted); and Provost _v. Intrafusion

Holding Corp., 926 F.Supp.2d 532, 537 n.4 (D.

the lack of evidence and grant Appellants’
Motion to Compel Production of Records
from DPR (“Motion to Compel”), which had
been filed earlier.

DPR filed a memorandum in opposition to
Appellants’ Motion to Compel, arguing that it
was both procedurally and substantively
flawed. The AOAO also filed a memorandum
in opposition, arguing that further disclo-
sures by the Arbitrator should not be com-
pelled because Appellants failed to make a
prima facie showing that a ground for vacat-
ing the arbitration award exists, in accord
with HRS § 658A-14(d)8

Appellants filed a reply memorandum, ar-
guing that they had made a prima facie
showing of evidence to support a motion to
vacate with regard to the KSG law firm.
Appellants argued that the relationship rose
to the level of evident partiality because KSG
had an “extensive relationship” with the Ar-
bitrator. Appellants argued that despite
KSG’s lack of direct connection with the par-
ties to the case, KSG was relevant because
Stellmacher’s declaration allegedly involved
“hearsay testimony” by Smith of KSG. Ap-
pellants also argued that a ruling in their

Del. 2013) (“Courts have been understandably
hesitant to grant extensive discovery in cases
alleging arbitrator bias where the complaining
party has not presented clear evidence of any
impropriety.”).

8. HRS § 658A-14(d)(Supp. 2001) provides:

In a judicial, administrative, or similar pro-
ceeding, an arbitrator or representative of an
arbitration organization is not competent to
testify, and shall not be required to produce
records as to any statement, conduct, decision,
or ruling occurring during the arbitration pro-
ceeding, to the same extent as a judge of a
court of this State acting in a judicial capacity.
This subsection does not apply:

@ ‘teo a hearing on a motion to vacate an
award under section 658A-23(a)(1) or (2) if the
movant establishes prima facie that a ground

for vacating the award exists,
(Emphasis added.)

9. Stellmacher’s declaration stated that his “firm
records” showed that he was retained by Smith,
and that he then contacted Smith to confirm that
his work was shortly terminated after his visit to
the property. Appeliants claimed that when this
testimony from Mr. Stellmacher and Mr. Smith

a witness.”

was admitted, “KSG became ...

favor would have “had severe repercussions
to KSG’s client” in the Developer Action, and
that “a reasonable person could infer that a
defense verdict in this arbitration would help
the Arbitrator to garner KSG’s recommenda-
tion to serve in the Developer Action, should
it be ordered to arbitration....” Appellants
also alleged that Nerney, the AOAO’s expert
witness, had evaded service and had not yet
responded to written deposition questions re-
garding a potential relationship with the Ar-
bitrator, yet because he “is an attorney, and
condominium governing documents often
contain arbitration clauses, it is reasonably
plausible to anticipate that Mr. Nerney had
or has a professional relationship that should
have been disclosed.”

Nerney was thereafter deposed upon writ-
ten interrogatories. Nerney testified that the
Arbitrator served as a mediator or arbitrator
on two cases in which he appeared as an
attorney. First, he testified that in 2018, he
represented a party in a matter in which the
Arbitrator was selected as an arbitrator. Sec-
ond, he testified that on April 9, 2015, he
represented an association of apartment own-
ers regarding a request for a reasonable
accommodation in a half-day mediation with
the Arbitrator, but the matter was ultimately
not resolved by mediation,

Appellants then moved to compel the Arbi-
trator to respond to the deposition upon writ-
ten questions pursuant to a showing of prima
facie evidence. The circuit court granted Ap-
pellants’ motion, and the Arbitrator was de-
posed upon written questions. She testified,
among other things, that she found in favor
of Nerney’s client on a summary judgment
motion in a prior arbitration,” and that Stell-
macher had testified as a witness in a prior
arbitration at some point in time between
January 1, 2011 and July 24, 2014.

2. Supplemental Memorandum in Sup-
port of Appellants’ Motion to Vacate

After months of discovery, Appellants sub-
mitted a supplemental memorandum in sup-
port of their Motion to Vacate. Appellants
asserted that the Arbitrator had failed to
comply with the disclosure requirements of
HRS § 658A-12(b) by failing to disclose facts

10. The Arbitrator testified that Nerney was coun-
sel to a party in a matter in which she presided

81

learned by the Arbitrator after accepting
appointment that a reasonable person would
consider likely to affect the impartiality of
the Arbitrator. Appellants claimed that the
following disclosures were not provided:
(1) the Arbitrator recently presided over
an arbitration involving [the AOAO’s] dam-

ages expert;
(2) [The AOAO’s] expert on condominium
governance, Philip Nerney, Esq—on

whom the Arbitrator primarily relied in
rendering her award—had a mediation be-
fore the Arbitrator while the above-cap-
tioned matter was pending and a prior
arbitration in which the Arbitrator found
in Mr. Nerney’s client’s favor on a motion
for summary judgment; and
(8) the law firm of a hearsay witness had
an extensive relationship with the Arbitra-
tor, including at least two mediations dur-
ing the pendency of this arbitration and
two referrals to the Arbitrator.
Following the completion of briefing, the
court held a hearing on the motion to confirm
the arbitration award and the motion to va-
cate. The cireuit court found in favor of the
AOAO, denied the motion to vacate, and
granted the motion to confirm the arbitration
award. The court found that the Arbitrator
complied with her duty to make a “reason-
able inquiry” into possible conflicts and that
none of the relationships challenged by Ap-
pellants rose to a level that would require
disclosure. The court’s relevant conclusions
were as follows:

8. At the outset, the Arbitrator com-
plied with her duty to make a “reasonable
inquiry” upon being informed of the par-
ties’ proposed witnesses (lay and expert) in
September and October, 2015, prior to
commencement of the arbitration proceed-
ings. In other words, as it pertains to
Stellmacher, the KSG law firm, and Mr,
Nerney, none of these “relationships” or
“facts” are such “that a reasonable person
would consider likely to affect [the Arbitra-
tor’s] impartiality,” necessitating their dis-
closure.

9. None of these “facts” or “relation-
ships” rise to the level of “evident partiali-
as an arbitrator at some point between January
1, 2011 and July 24, 2014.

82

ty.” Compare with Madamba, where the
court held that failure by the arbitrator

during the pendency of the arbitration pro-'

ceedings to disclose his prospective rela-
tionship with the Cades Schutte law firm
(counsel for respondent Romero) where
there existed a “concrete possibility” that
the Cades Schutte law firm would be han-
dling his personal retirement accounts,
constituted undisclosed facts showing a
“reasonable impression of partiality,” suffi-
cient to support vacatur,

10. The facts are undisputed that as
between the Arbitrator and Stellmacher,
the only association or dealing was that of
Stellmacher having testified as a witness in
a prior arbitration, for which [the Arbitra-
tor] served as the arbitrator at some point
in time between January 1, 2011 and July
24, 2014, Moreover, as noted by the Mad-
amba court, in adopting Justice Black’s
reasoning in Commonwealth Coatings
Corp. v. Continental Casualty Co., 398 U.S.
145, 89 S.Ct, 387, 21 L.Ed.2d, 301 (1968), it
would be incumbent upon the arbitrator to
disclose to the parties any dealings that
might create an impression of possible
bias, The association between the Arbitra-
tor and Stellmacher was not substantive in
nature. The dealings between the Arbitra-
tor and Stellmacher do not create an im-
pression of possible bias.

11. The facts are undisputed that as
between the Arbitrator and the KSG law
firm, their association occurred sometime
between January 1, 2011 and January 7,
2016, as [the Arbitrator] had been selected
as an arbitrator on five (5) matters in
which the KSG law firm represented a
party and also served as a mediator on
three (8) matters in which the KSG law
firm represented a party. The association
between the Arbitrator and the KSG law
firm was not substantive in nature. The
dealings between the Arbitrator and the
KSG law firm do not create an impression
of possible bias.

12. The facts are undisputed that 1) as
between the Arbitrator and Mr. Nerney,
their association occurred when Mr. Ner-
ney appeared as counsel for a party before
the Arbitrator sometime prior to July 25,
2014 (more than two years before the sub-
ject arbitration) and the arbitration was

decided on a summary judgment motion in
favor of Mr. Nerney’s client, and 2) some-
time in or around April 9, 2015, Mr. Ner-
ney represented an apartment association
(owner requested reasonable accommoda-
tion) in a half-day mediation before the
Arbitrator but was not successful. The as-
sociation between the Arbitrator and Mr.
Nerney was not substantive in nature, The
dealings between the Arbitrator and Mr.
Nerney do not create an impression of
possible bias.

The cireuit court then entered final judg-

ment.

C. The Appeal and Application for Trans-
fer

Appellants appealed from the circuit
court's final judgment confirming the arbitra-
tion award. Appellants raised the following
four points of error on appeal:

A. The Cireuit Court erred in concluding,
as a matter of law that under HRS section
658A-12(b), the Arbitrator need not dis-
close any ongoing or past instances in
which she served as a neutral and (1) a
non-attorney witness appeared before her
in another matter, or (2) attorney wit-
nesses, one of whom appeared as an expert,
witness in the subject arbitration and the
other of whom was a hearsay lay witness,
retained her services on behalf of a client
in other matters.

B, The Circuit Court erred in finding

that the Arbitrator’s service as an arbitra-

tor in 2018 in a matter in which Mr, Ner-
ney represented a party occurred “more
than two years before the subject arbitra-
tion,” given that the parties initiated the

subject arbitration on July 24, 2014.

C, The Cireuit Court impermissibly

raised the standard for evident partiality

for nondisclosures by (1) focusing on the

“substantive nature” of the relationships in

determining whether it creates a reason-

able impression of bias, even though the

Hawai'i Supreme Court has rejected a

standard that evaluates the substantiality

of a relationship or interest as being overly
narrow and (2) separately finding that the
relationships do not “rise[ ] to the level of
evident partiality” after determining that

the relationships at issue need not be dis-
closed.
D. The Circuit Court erred in finding
that the Arbitrator made a “reasonable
inquiry” into whether any relationships or
interactions with the parties’ witnesses
needed to be disclosed, given that the Ar-
bitrator admitted—during post arbitration
diseovery—that until recently, she did not
maintain a list of the witnesses that ap-
peared before her and that, with respect to
at least one witness, discovery of his prior
appearance before her required “consider-
able research” after-the-fact.
This court accepted a transfer of this case
from the Intermediate Court of Appeals
(“ICA”),

III. Questions on Appeal
The points of error raised by Appellants
are reframed and addressed in this decision
as follows:
1. Whether the “substantive nature” of a
relationship is relevant to a determination
that facts would demonstrate a reasonable
impression of partiality,
2, Whether an arbitrator has a duty to
disclose:
A. Prior occasions in which a person
appearing on a witness list appeared
before the arbitrator as a lay or expert
witness in unrelated matters.
B. Prior dealings with a law firm not
involved in the present arbitration,
where the law firm previously retained
an expert witness appearing on a wit-
ness list,
C. Prior dealings with a person ap-
pearing on a witness list where that
person served as party counsel before
the arbitrator in a prior arbitration or
mediation,
8. Whether it was clearly erroneous for
the circuit court to conclude that such un-
disclosed relationships did not create a
reasonable impression of partiality.

IV. Standards of Review
HI Judicial review of an arbitration
award is limited to the statutory grounds for
confirmation, vacatur, modification, and cor-
rection. See HRS § 658A-28(a)(8)-(5) (Supp.
2001). Review of a motion to vacate an arbi-

83

tration award “does not involve review of an
arbitrator’s findings of fact or conclusions of
law.” Nordic, 186 Hawai'i at 42, 358 P.8d at.
14, “Rather, it involves review of a circuit
court’s factual findings and conclusions of law
as to whether the statutorily outlined
grounds for vacatur exist.” Id.

HE We review a circuit court’s findings
of fact under the clearly erroneous standard,
Madamba, 187 Hawai'i at 8, 864 P.3d at 525,
A finding of fact is clearly erroneous when
either “the record lacks substantial evidence
to support the finding,” or, evidence exists to
support the finding, but we are left with “the
definite and firm conviction in reviewing the
entire evidence that a mistake has been com-
mitted.” Id, (quoting Nordic, 186 Hawaii at
41, 358 P.8d at 18). We review a circuit
court’s conclusions of law de novo under the
right/wrong standard. Nordic, 186 Hawaii at
41, 358 P.3d at 18 (quoting Daiichi, 103 Ha-
wai'i at 836, 82 P.3d at 422), Where a conclu-
sion of law presents a mixed question of law
and fact, we review this conclusion under the
clearly erroneous standard. Madamba, 187
Hawai'i at 8, 364 P.3d at 525 (citing Estate of
Klink ex rel. Klink v, State, 113 Hawai'i 332,
861, 152 P.3d 504, 528 (2007). A mixed ques-
tion of law and fact is a conclusion “depen-
dent upon the facts and circumstances of the
particular case.” Price v. Zoning Bd. of Ap-
peals, 77 Hawai'i 168, 172, 883 P.2d 629, 633
(1994),

I We review a circuit court’s rulings on
a motion to vacate for evident partiality un-
der the “clearly erroneous standard” where
the court’s challenged conclusion was based
on “a mixed question of law and fact.” Mad-
amba, 187 Hawai'i at 9, 364 P.8d at 526, In
this case, we review the court's conclusion
that the arbitrator's contacts with the
AOAO’s witnesses and an unrelated law firm
would not give a reasonable person the im-
pression of partiality.

V. Discussion

A. Standards for Vacatur under HRS
§ 658A-23(a)(2)

TS Judicial review of a motion to va-
cate an arbitration award “is confined to the
strictest possible limits.” Nordic, 186 Hawai'i
at 41, 958 P.3d at 18 (quoting Daiichi, 108

84

Hawai'i at 337, 82 P.8d at 423), An arbitra-
tion award may be vacated only upon the
grounds specified in HRS § 6584-23. Pur-
suant to HRS § 658A-28(a)(2)(A), the court
must vacate an arbitration award if there
was evident partiality by an arbitrator ap-
pointed to serve as a neutral. Madamba, 187
Hawai'i at 8, 364 P.3d at 520. Evident partial-
ity may be found in two situations: when an
arbitrator fails to make necessary disclosures
to the parties, or when additional facts show
actual bias or improper motive, even if the
arbitrator makes the necessary disclosures.
See Valrose Maui, Inc, v. Maclyn Morris,
Inc, 105 F.Supp.2d 1118, 1124 (. Haw.
2000); see_also Schmitz v. Zilveti, 20 F.8d
1048, 1045-47 (9th Cir. 1994) (distinguishing
the evident partiality standards applied in
“nondisclosure” cases and “actual bias”
cases). This court’s recent decisions in Nordic
and Madamba have addressed the evident
partiality standard in nondisclosure cases.

HH In a nondisclosure case, evident par-
tiality is found where “undisclosed facts dem-
onstrate a reasonable impression of partiali-
ty.” Madamba, 187 Hawai'i at 10, 364 P.8d at
527 (quoting Nordic, 186 Hawai'i at 51, 358
P.8d at 28), Under this standard, a finding of
evident partiality “is not dependent on a
showing that the arbitrator was actually bi-
ased, but instead stems from the nondisclo-
sure itself.” Id. (emphasis added). The evi-

11, HRS § 658A-23(a) outlines the grounds for
vacatur of an arbitration award as follows:
Vacating award, (a) Upon motion to the court
by a party to an arbitration proceeding, the
court shall vacate an award made in the arbi-
tration proceeding ift
(1) The award was procured by corruption,
fraud, or other undue means;
(2) There was:
(A) Evident partiality by an arbitrator ap-
pointed as a neutral arbitrator;
(B) Corruption by an arbitrator; or
(C) Misconduct by an arbitrator prejudic-
ing the rights of a party to the arbitration
proceeding;
(3) An arbitrator refused to postpone the
hearing upon showing of sufficient cause for
postponement, refused to consider evidence
material to the controversy, or otherwise con-
ducted the hearing contrary to section 658A-
15, so as to prejudice substantially the rights of
a party to the arbitration proceeding;
(4) An arbitrator exceeded the arbitrator's
powers;
(5) There was no agreement to arbitrate, un-
less the person participated in the arbitration

dent partiality standard for nondisclosure
cases thus reflects the latter part of the rule
that “any tribunal permitted by law to try
cases and controversies not only must be
unbiased but also must_avoid even the ap-
pearance of bias.” Commonwealth Coatings,
398 U.S. at 150, 89 S.Ct. 887 (emphasis add-
ed).22
In Nordic, we analyzed the relationship
between “evident partiality” and the statuto-
ry disclosure requirements found in HRS
§ 658A-12 (Supp. 2001), which codify an arbi-
trator’s duty to disclose facts that may create
an appearance of bias. In relevant part, this
standard provides:
§ 658A-12 Disclosure by arbitrator. (a) Be-
fore accepting appointment, an individual
who is requested to serve as an arbitrator,
after_making a reasonable inquiry, shall
disclose to all parties to the agreement to
arbitrate and arbitration proceeding and to
any other arbitrators any known facts that
a reasonable person would consider likely
to_affect the impartiality of the arbitrator
in_the arbitration proceeding, including:
(1) A financial or personal interest in the
outcome of the arbitration proceeding; and
(2) An existing or past relationship with
any of the parties to the agreement to
arbitrate or the arbitration proceeding,
their counsel or representatives, a witness,
or another arbitrator,

proceeding without raising the objection under
section 658A-15(c) not later than the beginning
of the arbitration hearing; or

(6) The arbitration was conducted without
proper notice of the initiation of an arbitration
as required in section 658A-9 so as to prejudice
substantially the rights of a party to the arbi-
tration proceeding.

12. In both actual bias and nondisclosure cases,
facts necessarily exist that create a “reasonable
impression of partiality.” In nondisclosure cases,
the fact that these facts were not disclosed is
enough to find evident partiality. In “actual bias”
cases, where the fact of nondisclosure is not
present, parties must prove specific facts, beyond
those disclosed, indicating bias. Thus, if an arbi-
trator meets the disclosure requirement, the par-
ty seeking to establish evident partiality faces a
higher burden of proof. See Woods v. Saturn
Distrib. Corp., 78 F.3d 424, 427 (th Cir. 1996)
(distinguishing the burden of proof in nondisclo-
sure cases as at a lower threshold than actual
bias cases).

(b) An arbitrator _has a continuing obli-

gation to disclose to all parties to the

agreement to arbitrate and arbitration pro-
ceeding and to any other arbitrators any
facts that the arbitrator learns after_ac-
cepting appointment which a reasonable
person would consider likely to affect the
impartiality of the arbitrator.

HRS § 658A-12(a)-(b) (emphases added),

HM Pursuant to HRS §§ 658A-12(a) and
(b), “arbitrators must at the outset disclose,
then continually disclose throughout the
course of an arbitration proceeding, any
known facts that a reasonable person would
consider likely to affect the arbitrator’s im-
partiality.” Nordic, 186 Hawai'i at 47, 358
P.3d at 19, Phrased in other ways, an arbitra-
tor must disclose facts that reasonably “cre-
ate an impression of possible bias,” Common-
wealth Coatings, 393 U.S. at 149, 89 S.Ct.
887, or that demonstrate a “reasonable im-
pression of partiality.” Schmitz, 20 F.8d at
1046 (citation omitted).

In addition to codifying the arbitrator's
disclosure obligations, HRS § 658A-12(a)
provides that “an arbitrator must make a
reasonable inquiry before accepting appoint-
ment” as to any potential conflicts that must
be disclosed. Nordic, 186 Hawai'i at 45, 858
P.8d at 17. In Nordic, we cited the Commen-
tary to the Uniform Arbitration Act (“UAA”)
(2001) (hereinafter “Commentary”) to further
explain this standard. The Commentary stat-
ed that the extent of an arbitrator’s inquiry
into potential conflicts “may depend upon the
circumstances of the situation and the cus-
tom in a particular industry.” 186 Hawai'i at
45, 858 P.3d at 17 (quoting Nat’l Conference
of Comm’rs on Unif. State Laws, Uniform
Arbitration Act (Last Revisions Completed
Year 2000) 48 (Dec, 18, 2000), http:/Avww.
uniformlaws.org/shared/docs/arbitration/
arbitration_final_00.pdf).

HE An arbitrator's duty to disclose
“known facts” thus relates to facts already

13. Compare HRS § 658A-12(e), which provides
that “[aJn arbitrator appointed as a neutral arbi-
trator who does not disclose a known, direct, and
material interest in the outcome of the arbitra-
tion proceeding or a known, existing, and sub-
stantial relationship with a party is presumed to
act with evident partiality under section 658A-
23(b)(2).” In Nordic, we did not hold that non-
disclosure of facts a reasonable person would

85

known or discovered upon reasonable inqui-
ry. “(What constitutes a reasonable inquiry
varies depending on the circumstances, and
whether the duty of reasonable inquiry has
been violated is a question of fact.” Nordic,
186 Hawai'i at 45, 358 P.3d at 17. If an
arbitrator violates the duty of reasonable
inquiry and thus fails to acquire “known”
facts that would otherwise need to be dis-
closed, such would result in the same out-
come as when an arbitrator knows such facts
but fails to disclose them. Thus, an arbitra-
tor’s lack of knowledge of specific facts is
only a defense for nondisclosure if the arbi-
trator had conducted a reasonable inquiry.

HM [n Nordic, construing prior case law,
we determined that a neutral arbitrator's
violation of statutory disclosure requirements
under HRS § 658A-12(a) or (b) “constitutes
‘evident partiality’ as a matter of law.” 186
Hawai'i at 50, 358 P.3d at 22. We rejected the
notion that after determining that an arbitra-
tor failed to meet disclosure obligations,
“there must also be a separate finding that
the arbitrator acted with ‘evident partiality’
or bias before an award can be vacated.” Id.
We do not require a separate finding regard-
ing actual bias because our case law recog-
nizes evident partiality not only “when there
is actual bias on the part of the arbitrator,
but also when undisclosed facts demonstrate
a ‘reasonable impression of partiality.” ” 186
Hawai‘ at 51, 358 P.3d at 28 (quoting Daiichi,
103 Hawai'i at 339-40, 82 P.8d at 425-26).

Since HRS § 658A-12 “explicitly adopted a
requirement to disclose facts a reasonable
person would find likely to affect an arbitra-
tor’s impartiality,” and evident partiality un-
der HRS § 658A-28 exists “when undisclosed
facts demonstrate a reasonable impression of
partiality,” we found that a failure to meet
the disclosure obligations under § 658A-12
constituted “evident partiality” as a matter of
law under § 658A-28(a)(2). Nordic, 186 Ha-
wai‘ at 51, 358 P.3d at 28,8

find likely to affect an arbitrator's impartiality
would require immediate vacatur of the arbitra-
tion award, We cited HRS § 658A-12(d), which
provides that “[ilf the arbitrator did not disclose
a fact as required by subsection (a) or (b), upon
timely objection by a party, the court under sec-
tion 658A-23(a)(2) may vacate an award.” 136
Hawai'i at 53, 358 P.3d at 25 (emphasis in origi-
nal). This standard was viewed as being “permis-

86 [|

Hs In Madamba, we held that a finding
of evident partiality based on a violation of
HRS § 658A-12(a) or (b) by a neutral arbi-
trator requires the court to vacate the arbi-
tration award pursuant to HRS § 658A-
28(a)(2)(A). 187 Hawai'i at 16, 364 P,3d at
583. We recognized the permissive language
of HRS § 658A-12(d) but found the following:

The function of the ‘may’ language ... is

to provide reference to the different cir-

cumstances that require vacatur under

HRS § 658A-28(a)(2), ie. a neutral arbi-

trator’s evident partiality, and any arbitra-

tor’s corruption or misconduct, For exam-
ple, if a non-neutral arbitrator fails to
make a disclosure required under HRS

§ 658A-12(a) or (b), although the award

would not be vacated based on evident

partiality—as evident partiality only ap-
plies to neutral arbitrators—it could be
vacated based on the corruption and mis-
conduct provisions in HRS § 658A-

28(a)(Q).

Id, (citation and footnote omitted). We also
noted that the Commentary “takes into ac-
count the fact that jurisdictions have devel-
oped different views regarding what consti-
tutes evident partiality,” so the standard for
evident partiality due to nondisclosure will
differ among jurisdictions that have adopted
the UAA. 187 Hawai'i at 16 n.20, 364 P.3d at
588 n.20, “[O]ur standard for evident partiali-
ty based on a failure to disclose is equivalent
to the standard laid out in HRS § 658A-12’s
disclosure provisions. Accordingly, in this
context, once evident partiality [as to a neu-
tral arbitrator] is established, the arbitration
award must be vacated.” Id,

Based on the standards outlined in Nordic
and clarified in Madamba, an arbitrator's
compliance with the disclosure requirements
set forth in §§ 658A-12(a) and (p) is para-
mount to the validity of an arbitration award.
See Kay v. Kaiser Found, Health Plan, Inc.,
119 Hawai'i 219, 229, 194 P.8d 1181, 1191
(App. 2008) (framing the disclosure obligation
as “the sine qua non” of our review). In this
case, we clarify the scope of the arbitrator's

sive in nature” and granting courts ‘wider lati-
tude in deciding whether to vacate an award” for
failure to meet the disclosure requirements. Id.
(citing Commentary, supra, at 50). We thus stat-
ed that the circuit court “‘has discretion under
HRS § 658A-12(d) to decide whether or not to

disclosure requirements as well as contextu-
alize the reasonable person standard in light
of the undisclosed facts revealed through
post-award discovery.

B. Framework for Evaluating Nondisclo-
sure Claims

HM As established in Nordic, an arbi-
trator’s failure to disclose facts as required
under HRS § 658A-12(a) or (b) constitutes
evident partiality as a matter of law, and
pursuant to Madamba, the cireuit court does
not have discretion to determine whether to
vacate an award once evident partiality is
established as to a neutral arbitrator. How-
ever, the circuit court plays an essential
fact-finding role in determining whether the
party challenging the award has met its
“purden of proving facts which would estab-
lish a reasonable impression of partiality,”
Nordic, 186 Hawai'i at 51, 858 P.3d at 24,
which constitutes “evident partiality.” The
“fundamental standard” of the disclosure ob-
ligation “is an objective one: disclosure is
required of facts that a reasonable person
would consider likely to affect the arbitra-
tor's impartiality in the arbitration proceed-
ing.” 186 Hawai'i at 47, 858 P.8d at 19 (quot-
ing Commentary at 47-48). It is thus the
circuit court’s role to determine whether the
undisclosed facts meet this objective stan-
dard,

Although we do not venture to pre-deter-
mine a set of relationships that will automati-
cally require disclosure, we recognize that
patterns have emerged, Such patterns may
be traced to the United States Supreme
Court’s seminal decision in Commonwealth
Coatings, 393 U.S, 145, 89 S.Ct. 337. In that
case, a party to the arbitration was one of the
arbitrator’s long-time customers in his con-
struction consulting business. 393 U.S. at
146, 89 S.Ct. 887. The Court found that this
business relationship required disclosure, and
that its nondisclosure constituted evident
partiality warranting vacatur of the arbitra-
tion award. 398 U.S. at 150, 89 S.Ct. 337.

grant the motion to vacate.” Id, Our opinion in
Madamba clarified this on the basis of statutory
language in HRS § 658A-23(a)(2) as applied to
an arbitrator appointed as a neutral arbitrator.
Madamba, 137 Hawai'i at 16, 364 P.3d at 533.

Justice White and Justice Marshall con-
curred in the judgment but clarified that
“arbitrators are not automatically disquali-
fied by a business relationship with the par-
ties before them if both parties are informed
of the relationship in advance, or if they are
unaware of the facts but the relationship is
trivial.” 393 U.S. at 150, 89 S.Ct. 887 (White,
J., concurring), Although other jurisdictions
have interpreted it otherwise, Justice White’s
coneurrence did not contradict or limit the
principle adopted by the Court that a failure
to fulfill disclosure obligations would result in
a finding of evident partiality warranting va-
catur, See Schmitz, 20 F.3d at 1045, Justice
White’s concurrence thus did not reject the
majority's evident partiality standard, but
clarified its parameters—namely, that “more
than trivial” relationships “must be dis-
closed.” Commonwealth Coatings, 393 U.S. at
152, 89 S.Ct. 387. This standard is aligned
with HRS § 658A-12(a), which does not re-
quire the disclosure of de minimis interests
or relationships, see Nordic, 136 Hawaii at
AT, 358 P.8d at 19 (quoting Commentary at.
47-48), and Ninth Cireuit case law, which
does not require the disclosure of “long past,
attenuated, or insubstantial connections be-
tween a party and an arbitrator.” New Re-
gency Prods., Ine. y. Nippon Herald Films,
Inc, 501 F.8d 1101, 1110 (th Cir. 2007).4

Patterns emerging in case law have
evolved through court efforts to identify un-
disclosed relationships that are “more than
trivial” and thus require vacatur due to evi-

14. We note that there is a split of opinion regard-
ing the meaning and the weight of Justice
White's concurrence in Commonwealth Coat-
ings, where many jurisdictions characterize Jus-
tice Black’s majority opinion as a “plurality opin-
ion” and see a conflict between this opinion and
Justice White's concurrence. See, e.g., Nati
wide Mut. Ins. Co. v. Home Ins. Co., 429
640, 644 n.5 (th Cir, 2005) (Stating that “a
majority of” the Commonwealth Coatings Court
"did not endorse the ‘appearance of bias’ stan-
dard set forth in the plurality opinion”); Morelite
Constr. Corp. v. N.Y. City Dist. Council Carpen-
ters Benefit Funds, 748 F.2d 79, 83 n.3 (2d Cir.
1984) (stating that the two opinions are “impos-
sible to reconcile”), We disagree with this char-
acterization of Justice White's concurring opin-
jon. Justice White, joined by Justice Marshall,
specifically stated that he was “glad to join” the
Court's “majority opinion” and sought only to
make "additional remarks.” Commonwealth
Coatings, 393 U.S. at 150, 151 n.*, 89 S.Ct. 337
(White, J., concurring). “Among these additional

87

dent partiality, and those that are “too insub-
stantial to warrant vacating an award.” Com-
monwealth Coatings, 898 U.S. at 152, 89
S.Ct. 887 (White, J., concurring) (emphasis
added). Courts will weigh factors in a case-
by-case approach to determine how a reason-
able person would objectively perceive the
relationship and its potential impact on the
arbitration proceeding. In Madamba, for ex-
ample, this court analyzed the “substantive
nature” of the relationship at issue to deter-
mine whether it would give a reasonable
impression of partiality, 187 Hawai'i at 18,
364 P.8d at 580. See also In Re Sussex, 781
F.8d 1065, 1074-75 (9th Cir. 2015) (discussing
the “substantive” nature of the arbitrator's
interest), Determining whether a relationship
is “substantive” may involve the consider-
ation of several factors, including but not
limited to the directness of the connection (or
the degrees of separation) between the arbi-
trator and either party, as well as the type of
connection or activity at issue, and its timing
relative to the arbitration proceedings.

1, Connection between the Arbitrator
and a Party

As a threshold matter, any analysis of
arbitrator disclosure requirements is under-
girded by the timing issues further ex-
pounded in subsection (8) below. This is a
necessary corollary consideration of the re-
quirement that the undisclosed relationship
between the arbitrator and a party be one

remarks, Justice White said that arbitrators are
not held to the partiality standard applicable to
judges and that ‘trivial’ or ‘remote’ relationships
need not be disclosed.” Schmitz, 20 F.3d at
1045, Justice White’s concurrence does not men-
tion the “appearance of bias” standard or imply
that it is inappropriate, and both opinions em-
phasize the need for an arbitrator's full disclo-
sure. Commonwealth Coatings, 393 U.S, at 151,
89 S.Ct, 337. Thus, Justice White did not reject
the majority’s standard, but more specifically de-
fined the parameters of the disclosure require-
ment. We stated in Madamba that we follow
“Justice Black’s reasoning,” in contrast with
courts that apply “a more stringent definition of
evident partiality” based on Justice White's con-
currence. 137 Hawai'i at 10 n.15, 364 P.3d at
527 n.15. We clarify here that our adoption of
“Justice Black's reasoning” does not mean we
must reject Justice White's concurrence, as we
interpret the concurrence as complementary to,
rather than conflicting with, the majority opin-
ion,

88

that a reasonable person would consider
likely to affect the arbitrator’s impartiality.
The more direct an undisclosed connection
between the arbitrator and a party, the
more likely that it will create a reasonable
impression of partiality. As such, a current
direct. relationship between an arbitrator
and “a party, its counsel, principal, or
agent” will almost always require disclosure.
Valrose, 105 F.Supp.2d at 1124,

For example, in Valrose, the United States
District Court for the District of Hawaii
vacated an arbitration award where the arbi-
trator failed to disclose an ex parte discus-
sion with one of the party’s counsel about
serving as a mediator in an unrelated case,
105 F.Supp.2d at 1120, 1125. Given the arbi-
trator’s direct interaction with a party attor-
ney about a matter that would result in a
pecuniary benefit to the arbitrator, the court
found that the nondisclosure of this discus-
sion—and nondisclosure of the arbitrator’s
eventual appointment as a mediator in the
matter—‘“was clearly a serious failing” and
required vacatur of the award. 105 F.Supp.2d
at 1124,

Disclosure is also typically required when
there is a recent or current relationship be-
tween an arbitrator's law firm or business
and a party, its counsel, principal, or agent.
See, e.g., New Regency, 501 F.3d 1101 (va-
cating an arbitration award where the arbi-
trator, who was an executive for a film com-
pany, did not disclose that her company was
in negotiations with an executive of one of
the parties to finance and co-produce a mov-
ie); Schmitz, 20 F.3d 1048 (vacating an arbi-
tration award where the arbitrator did not
disclose that his law firm represented the
parent corporation of a party). Disclosure
may also be required even when it is the
arbitrator’s employer that has the relation-
ship. See Olson _v. Merrill Lynch, Pierce,
Fenner & Smith, Inc, 51 F.8d 157 (8th Cir.
1995) (vacating an award where an arbitrator
disclosed that he was an employee of a com-
pany, but did not disclose his high-ranking
position or the fact that the company had an
ongoing business relationship with one of the
parties),

HN The more “attenuated” and less di-
rect the connections between a party and an
arbitrator, the less likely it will be that the
relationship will require disclosure, even if

those relationships are current. New Regen-
ey, 501 F.3d at 1110. In United States Wres-
tling Fed’n v. Wrestling Div. of AAU, Inc, a
party sought vacatur because an arbitrator
did not disclose that his law firm had a
relationship with Northwestern University.
605 F.2d 818, 815-16 (7th Cir. 1979). North-
western was neither a party to the arbitra-
tion nor directly related to one of the parties,
but instead was one of the 860 other mem-
bers of the NCAA, a founder of one of the
parties to the arbitration. 605 F.2d at 315.
This “tenuous chain” was too “remote, uncer-
tain, and speculative to require the arbitra-
tion award to be set aside.” 605 F.2d at 320.

2. Type of Connection or Activity

Certain types of relationships will also
weigh more heavily toward disclosure than
others. In Madamba, we recognized that at-
torney-client relationships carry “heightened
import.” 187 Hawai'i at 14, 364 P.3d at 531.
Such recent, current, or prospective relation-
ships will almost always require disclosure.
See id, (requiring disclosure of an arbitra-
tor’s prospective attorney-client relationship
with one of the party counsel’s law firms,
despite the fact that the arbitrator did not
plan to interact with the firm “besides paying
legal bills”); Beebe Med. Ctr., Inc. v. InSight
Health Servs. Corp., 751 A.2d 426, 431 (Del.
Ch, 1999) (requiring disclosure of an attor-
ney-client relationship between the arbitrator
and the law firm representing a party);
Schmitz, 20 F.8d at 1049 (requiring disclo-
sure of an attorney-client relationship be-
tween the arbitrator’s law firm and a party’s
parent company); HSMV Corp v. ADI Ltd.,
72 FSupp.2d 1122, 1130 (C.D. Cal. 1999)
(requiring disclosure of an attorney-client re-
lationship between an arbitrator’s law firm
and a party’s owner); Houston Vill. Builders,
Inc. v. Falbaum, 105 S.W.3d 28, 34 (Tex. App.
2008) (requiring disclosure of an attorney-
client relationship between the arbitrator and
a trade association of which parties to the
arbitration were members); but see Peabody
vy. Rotan Mosle, Inc. 677 F.Supp. 1135, 1138
(LD. Fla, 1987) (not requiring disclosure of
attorney-client relationship between the arbi-
trator’s former law partner’s brother and an
expert witness, as this relationship was

“thrice removed” from the arbitrator and
thus too attenuated),

Business relationships and financial deal-
ings will also tend to weigh in favor of dis-
closure, depending on the weight of other
considerations, including the regularity and
recency of the dealings, the length of the
relationship, and the extent of pecuniary in-
terest involved. The best-known example of
the kind of business relationship requiring
disclosure is in the seminal case, Common-
wealth Coatings, 393 U.S. 145, 89 S.Ct. 337.
As noted in this case, a party to the arbi-
tration was one of the arbitrator’s regular
customers in his construction consulting
business. In weighing the import of this re-
lationship, the Court acknowledged that it
was “in a sense sporadic in that the arbitra-
tor’s services were used only from time to
time at irregular intervals,” and that “there
had been no dealings between them for
about a year immediately preceding the ar-
bitration.” 398 U.S. at 146, 89 S.Ct. 387.
“Nevertheless, the [party’s] patronage was
repeated and significant, involving fees of
about $12,000! over a period of four or
five years,” and it involved “the rendering
of services on the very projects involved in
this lawsuit.” Id. The Court found that
these dealings “might create an impression
of possible bias” and would thus require
disclosure. 393 U.S. at 149, 89 S.Ct. 387.

HN Where the relationship involves an
exchange of money or other consideration, it
is likely to require disclosure, particularly if
the exchange was recent or ongoing during
the arbitration. See, e.g., Britz, Inc. v, Alfa-
Laval Food & Dairy Co., 84 Cal.App.4th
1085, 40 Cal.Rptr.2d 700, 707 (1995). In Britz,
the arbitrator failed to disclose that he was
employed by one of the party counsel’s law
firms as an expert witness in a separate
matter, Id. Nondisclosure of this fact was
sufficient to warrant vacatur for evident par-
tiality, as it established “a current monetary
connection.” Id, Similar circumstances were
present in Wheeler _v. St. Joseph Hosp.
where the court vacated an award because an
arbitrator failed to disclose that he served as
an expert witness for a party attorney's law
firm during the pendency of the arbitration.
68 Cal.App.8d 845, 183 Cal.Rptr. 775 (1976).

15. Adjusted for inflation, this would amount to

89

Even if the relationship does not involve
financial benefits flowing to the arbitrator,
certain exchanges could nonetheless be rea-
sonably perceived as a means for one party
to gain favor. In Kay, the arbitrator did not
disclose that she had directly solicited and
received a $450 donation from one of the
parties on behalf of a non-profit medical as-
sociation during the pendency of the arbitra-
tion, 119 Hawai'i 219, 194 P.8d 1181. The ICA
noted that there was no evidence that the
arbitrator received a direct financial benefit
from her work, but that it was “a significant
professional activity that brought her public
recognition and enhanced her reputation in
the medical profession.” 119 Hawai'i at 229-
30, 194 P.8d at 1191-92, The ICA thus held
that the arbitrator needed to disclose that
she solicited and received money from the
party during the arbitration, regardless of
the charitable purposes of her activities. 119
Hawai'i at 280, 194 P.8d at 1192.

HH In accord with this principle, a rela-
tionship is less likely to create a reasonable
impression of partiality if it was one in which
“{tIhere was nothing that one could do to
curry favor with the other.” Apusento Gar-
den (Guam) Ine, v. Superior Court of Guam,
94 F.8d 1846, 1852 (th Cir. 1996) (quoting
Lozano v. Maryland Cas. Co., 850 F.2d 1470
(11th Cir, 1988), cert. denied, 489 U.S. 1018,
109 S.Ct, 1136, 103 L.Ed.2d 197 (1989), In
Apusento, for example, the arbitrator and a
party’s expert witness were limited partners
in a partnership that owned an apartment.
complex in Hawaii, 94 F.3d at 1348. The
court characterized the arbitrator and expert
witness as “passive investors in a limited
partnership” which “was unrelated to the
subject of the arbitration.” 94 F.3d at 1358,
According to the court, this type of financial
relationship did not require disclosure, par-
ticularly because it was not the kind where
either person could “curry favor” with the
other, Id,

This situation was paralleled in Lozano,
where a neutral arbitrator and a party-ap-
pointed arbitrator were both investors in two
limited partnerships. 850 F.2d at 1471. Al-
though each partnership respectively consist-
ed of seven and nine limited partners, neither

over $85,000 today.

90

the neutral arbitrator nor the party-appoint-
ed arbitrator had control over the partner-
ship activities, The court compared this fi-
nancial relationship with “two individuals
buying the same issue of corporate stock or
investing in the same mutual fund” and did
not require disclosure, Id.!6

8. Timing of the Connection or Activity

HM Finally, as noted in the previous sec-
tions, relationships that are not “distant in
time, but rather ongoing during the arbitra-
tion” will weigh most heavily in favor of
disclosure, while relationships that are “long
past” will not. New Regency, 501 F.8d at
1110; see Lagstein v. Certain Underwriters
at_Lloyd’s, London, 607 F.8d 634, 646 (9th
Cir. 2010) (ejecting the need for disclosure
of a relationship between a neutral and par-
ty-appointed arbitrator where the connection
“occurred more than a decade before the
arbitration”),

HM Prospective or future relationships
will weigh in favor of disclosure where there
is a “concrete possibility” of such a relation-
ship. Madamba, 187 Hawai'i at 12, 13, 864
P.8d at 529, 580 (citing Sussex, 781 F.8d at
1074). Conerete possibilities of a future rela-
tionship have been demonstrated through
evidence of negotiations, communications, or
other facts showing that steps were taken to
further the potential relationship during the
course of the arbitration. See Madamba, 137
Hawai'i at 15, 364 P.8d at at B82 (noting that
the party’s law firm had received the arbi-
trator’s files during the course of the arbi-
tration); New Regency, 501 F.8d at 1110
(acknowledging that the negotiations were
ongoing throughout the arbitration); Valrose,
105 F.Supp.2d at 1124 (concerning discus-
sions between the arbitrator and party coun-
sel about mediating in an unrelated action),

Unless a party can show a “conerete possi-
bility’ of such a relationship occurring
through direct evidence, allegations of future

16. In some circumstances, personal and familial
relationships may also be necessary to disclose,
In Morelite, one of the parties to the arbitration
was a local union, and the arbitrator failed to
disclose that his father was the vice-president of
the international union to which the local union.
belonged. 748 F.2d at 81. The court found that
this relationship required disclosure based on its
“strong feeling that sons are more often than not
loyal to their fathers, partial to their fathers, and

interests or relationships are often too con-
tingent and speculative to require disclosure.
See Sussex, 781 F.8d at 1074-75. In Sussex,
the arbitrator did not disclose to the parties
that he had started an investment firm for
litigation financing. Id, One party seeking his
removal successfully argued to the district
court that this suggested that the arbitrator
had a financial interest in the outcome, “be-
cause a victory and large financial award for
Sussex would help [the arbitrator] promote
his company, which was designed to generate
profits from funding large, potentially profit-
able litigations.” 781 F.8d at 1070. The Ninth
Cireuit rejected this “theory” based on its
“speculative nature,” noting that the arbitra-
tor did not have a relationship with either
party, and his potential ability to profit from
the award “can best be described as ‘attenu-
ated’ and ‘insubstantial.’” 781 F.3d at 1074-
15 (quoting New Regency, 501 F.3d at 1110).

Application of Disclosure Standards to
This Case

1, The Arbitrator’s Connection with
Stellmacher

HE We first analyze Appellants’ conten-
tion that the cireuit court erred in concluding
that the Arbitrator did not need to disclose
“ongoing or past instances in which she
served as a neutral and ... a non-attorney
witness appeared before her in another mat-
ter.” Under the applicable standards of re-
view, we hold that it was not clearly errone-
ous for the cirenit court to find that the
Avbitrator’s connection with Stellmacher did
not give a reasonable impression of partiality.

The mere fact that an arbitrator has ob-
served a witness in a prior proceeding and
therefore may have “had an opportunity to
evaluate the person and form an opinion as
to the person’s credibility[,]” without more, is
not a “relationship” that requires disclosure.

biased on behalf of their fathers.” 748 F.2d at 84.
In other cases, however, familial relationships
have not required disclosure. See Ruhe v. Masi-

mo Corp., 640 Fed.Appx. 685 (Sth Cir, 2016)
(reversing a finding that a “reasonable impres-

sion of bias” existed where an arbitrator's broth-
er represented a competitor to one of the parties
and had suffered two contentious litigation losses
to that party).

Thus, it was not clearly erroneous for the
circuit court to conclude that the Arbitrator’s
undisclosed “relationship” with Stellmacher
did not constitute evident partiality.

2, The Arbitrator’s Connection with
KSG

We next address Appellants’ contention
that the circuit court erred in concluding that
the Arbitrator did not need to disclose “ongo-
ing or past instances in which she served as a
neutral and ... attorney witnesses, one of
‘whom appeared as an expert witness in the
subject arbitration and the other of whom
was a hearsay lay witness, retained her ser-
vices on behalf of a client in other matters.”
At the outset, we note that Appellants’ claim
of error focuses not on the Arbitrator’s rela-
tionship with the alleged “hearsay witness,”
Smith, but Smith’s law firm, KSG, which had
retained the Arbitrator in other unrelated
matters.”

HM Under the applicable standard of re-
view, we hold that it was not clearly errone-
ous for the circuit court to conclude that the
Arbitrator’s relationship with KSG did not
constitute evident partiality. Appellants ar-
gued that the Arbitrator needed to disclose
her relationship with KSG because:

(1) KSG is representing certain of the orig-

inal developer entities that are adverse to

[Appellants] in the Developer Action; (2)

the Arbitrator relied on Mr. Smith’s[—a

KSG attorney’s—Jhearsay testimony in re-

jecting [Appellants’] request for Mr. Stell-

macher’s entire file ... and (8) defendants
in the Developer Action have continued to
press for arbitration, appealing the Hawai'i

Supreme Court’s ruling that the arbitra-

tion clause is unenforceable to the United

States Supreme Court,

Appellants claimed that the “most discon-
certing” aspect of the Arbitrator’s nondisclo-
sures regarding KSG was the status of the
Developer Action. According to Appellants,
“the Arbitrator’s decision, had it been appro-
priately in [Appellants’] favor, may have had
repercussions to KSG’s client in the ‘still

17, As noted earlier, Smith's only connection to
the arbitration was through Stellmacher's post-
arbitration declaration summarizing his conver-
sation with Smith regarding who had retained
him in the Developer Action, which confirmed
that Stellmacher's assignment on behalf of the

91

ongoing’ Developer Action inasmuch as [Ap-
pellants] here challenged the settlement
agreement between KSG’s clients and [the
AOAO].” According to Appellants, the rela-
tionship between the Arbitrator and KSG
would allow a reasonable person to “infer
that a defense verdict in this arbitration
would help the Arbitrator to garner KSG’s
recommendation to serve in the Developer
Action, should it be ordered to arbitration,
Le., that there is a ‘reasonable impression of
partiality’ ”

The Arbitrator’s employment by KSG in
unrelated matters does not have a sufficient
nexus to this arbitration to require a holding
that the circuit court clearly erred. There is
no actual direct connection between KSG and
the parties, counsel, witnesses, and Arbitra-
tor in this arbitration. In addition, KSG rep-
resents the Developer in the separate Devel-
oper Action, which is adverse to Appellants,
but the theory that a positive outcome for the
AOAO would lead to a future appointment
for the Arbitrator in the Developer Action is
“contingent, attenuated, and merely poten-
tial.” Sussex, 781 F.3d at 1075. The same
could be said with respect to Appellants if
the Arbitrator had ruled in their favor.

Under the facts presented, we hold that
the circuit court did not clearly err in ruling
that the Arbitrator’s duty of disclosure did
not include her retention by KSG in other
matters. Vacatur cannot be required “simply
because an arbitrator failed to disclose a
matter of some interest to a party.” Lagstein,
607 F.8d at 646,

3. The Arbitrator’s Connection with
Nerney

HH Finally, we address whether it was
clearly erroneous for the cireuit court to
conclude that there was no reasonable im-
pression of partiality arising from the Arbi-
trator’s connections with Nerney, an expert
witness in this arbitration who served as
party counsel before the Arbitrator in an
unrelated half-day mediation in 2015 and an

Developer had been terminated shortly after he
visited the Property and that he had received no
work product or other documents from Smith or
KSG, Smith was not a witness in the arbitration
proceeding and it is unclear how Appellants’
allegations make him a “hearsay witness.”

92

unrelated arbitration in 2018. Appellants ar-
gue that an objective observer may reason-
ably believe that the Arbitrator, seeing a
potential for future business with Mr. Ner-
ney as both an attorney and expert witness,
may have been inclined to favor Mr, Nerney
by ruling in the AOAO’s favor and adopting
Mr. Nerney’s legal rationale.

Appellants argue that the Arbitrator’s re-
lationship with a witness must be disclosed,
in part, because “these types of disclosures
are no different than those asked of potential
jurors in voir dire to determine potential
biases.” The mere fact that Nerney, an ex-
pert witness in this case, had been an attor-
ney in two cases where he appeared before
the Arbitrator, without more, is not a “rela-
tionship” that creates a reasonable impres-
sion of partiality. It was therefore not clearly
erroneous for the circuit court to conclude
that the Arbitrator’s undisclosed contacts
with Nerney did not give a reasonable im-
pression of partiality.

VI. Conclusion

Because the circuit court did not clearly
err in holding that the Arbitrator’s undis-
closed connections with Stellmacher, KSG,
and Nerney did not constitute evident par-
tiality, we affirm the circuit court’s final

judgment.

398 P.3d 681
STATE of Hawai‘i, Respondent/Plaintiff-
Appellee,

v.
Rainier ACACIO, Petitioner/Defendant-
Appellant.
SCWC-13-0000132
Supreme Court of Hawai‘.

JUNE 15, 2017

3

94 a

Jon N. Ikenaga and Titiimaea N, Ta‘ase
for petitioner.
Brian R. Vincent for respondent.

RECKTENWALD, C.J., NAKAYAMA,
McKENNA, POLLACK, AND WILSON,
JS

OPINION OF THE COURT BY
NAKAYAMA, J.

I. INTRODUCTION

Respondent/Plaintiff-Appellee the State of
Hawai‘i (the State) charged Petitioner/Defen-
dant-Appellant Rainier Acacio (Acacio) with
offenses arising from a domestic dispute be-
tween Acacio and his ex-girlfriend, the com-
plaining witness (CW). The jury found Acacio
guilty of one of the offenses—terroristic
threatening in the first degree—and the Cir-
euit Court of the First Circuit (cireuit court)
entered a judgment of conviction and proba-
tion sentence, which the Intermediate Court
of Appeals (ICA) affirmed.

In his application for writ of certiorari,
Acacio takes issue, inter alia, with the cireuit
court's decision to limit the CW’s testimony
on cross-examination. In brief, defense coun-
sel asked the CW questions regarding her
knowledge of Acacio’s immigration status and
whether the CW knew that Acacio could face
deportation if he was arrested, The State

1, The Honorable Edward H. Kubo, Jr. presided.

objected. Despite defense counsel’s argument
that this line of questioning was imperative
in order to establish the CW’s bias or motive,
the circuit court sustained the State’s objec-
tion and struck the questions and responses
from the record,

We conclude that Acacio was deprived of
his right to confront and cross-examine the
complaining witness as to her bias and mo-
tive. Testimony derived from the CW’s an-
swers to the immigration questions might
have illuminated the CW’s motive for calling
the police, and ultimately had the potential to
affect her credibility as a witness, According-
ly, we vaeate the ICA’s September 9, 2016
judgment on appeal, vacate the circuit court’s
February 4, 2018 judgment of conviction and
probation sentence, and remand this case to
the cireuit court for a new trial.

IL BACKGROUND

A, Circuit Court Proceedings !

On January 11, 2012, the State charged
Acacio with: 1) one count of terroristic
threatening in the first degree, in violation of
Hawai'i Revised Statutes (HRS) § 707-
716(1)(e), for threatening “to cause bodily
injury to [the CW], with the use of a danger-
ous instrument, in reckless disregard of the
visk of terrorizing [the CW]’; and 2) one
count of abuse of family or household mem-
bers, in violation of HRS § 709-906(1) and
(6), for “intentionally, knowingly, or reckless-
ly physically abusfing] [the CW.]”

The jury trial began on November 16,
2012. On direct examination, the CW testified
that Acacio was her live-in boyfriend just
prior to the time of the January 1, 2012
incident, and that they had been together for
almost two and a half years. The CW ex-
plained that in December of 2011, she broke
up with Acacio, but that he continued to live
in her house until the incident on January 1,
2012.

The CW gave the following testimony
about the incident that led to Acacio’s arrest:

On the night of December 31, 2011, the
CW’s family had a New Year's party at their
house. The CW was outside, enjoying the

a ws

party with her family, while Acacio was in-
side the house. Shortly after midnight, the
OW received a phone call from Acacio, and
they exchanged New Year's greetings before
she hung up. Soon after the phone call, the
CW saw Acacio exit the house and she en-
tered the house, went to her bedroom, and
started preparing for bed. As she was doing
this, Acacio came into the bedroom, closed
the door, and said that he wanted to fix their
relationship. The CW responded that their
relationship was over; at this point, Acacio
became mad and emotional and said that he
would kill himself. The CW responded, “go
ahead, it’s not my fault,” and Acacio left the
bedroom and returned holding a kitchen
knife, Acacio pointed the knife at himself and
kept repeating that he was going to kill
himself, Acacio then “changed his mind,”
pointed the knife at the CW, and started
saying, “I will kill you.” The CW knocked the
knife out of Acacio’s hand, and Acacio then
grabbed her by the face and punched her in
the stomach. When Acacio turned around to
grab the knife, the CW locked herself in the
bathroom and called 911.

On cross-examination, the deputy public
defender (DPD) elicited the following testi-
mony from the CW:

(DPD:] When you called 911, you told

Rainier you were calling 911; right?

CW:] Yes.

[DPD:] You told him to grab your things?
CW:] And leave the house.

[DPD:] And leave, right, leave me alone?
CW:] Yes.

[DPD:] Leave my family alone?

CW:] Yes.

[DPD:] But he didn’t leave; right?

‘CW:] Yes, ma’am.

DPD:] And when he didn’t leave, you got
upset?
‘CW:] Excuse me?

(DPD:] When he didn’t listen to you when
you told him to leave, when he stayed
there, you got upset?

[CW:] Yes, ma’am.

DPD:] Because you had already been bro-
ken up with him for two weeks; right?
‘CW:] Yes, ma’am.

[DPD:] He was still living in the house?
‘CW:] Yes, ma’am.

[DPD:] You wanted him out of the house?

‘CW:] Yes, ma’am.

[DPD:] He was supposed to be looking for
a place; right? [CW:] Yes, ma’am.

(DPD:] You didn’t think he was actually
looking for a place?

{[CW:] He told me that he’s looking for a
place and he asking for a time to look for a
place.
[DPD:] But you didn’t believe he was doing
that; right?

‘CW:] No, I don’t believe.

[DPD:] So that made you upset, too; right?
CW:] Yes.

[DPD:] But you were upset he’s still there?
CW:] Yes.

‘DPD:] And that he won’t go away?

CW:] Yes.

[DPD:] He won't get out of the house?

CW:] Yes.

IDPD:] And you know that Rainier is not a
citizen of the United States; right?

[CW:] Yes.

DPD:] You know that if he gets arrested
he can get sent back to the Philippines;
right?
(Deputy Prosecuting Attorney:] Objection.
THE COURT: Objection is sustained, The
jury is advised that immigration status has
nothing to do with these charges, The jury
is to determine the guilt or innocence as to
Counts 1 and 2 and I’m instructing you to
disregard any mention or_any comments
concerning the defendant's immigration
status.

[DPD:] But you wanted him out of the
house?

[CW:] Yes, ma'am,

[DPD:] Out of your life?

[CW:] Yes, ma’am.

[DPD] And you knew if he got arrested he
would leave?

[CW:] Yes, ma’am.

(Emphases added.)

After the jury was excused for the day, the
DPD explained why she questioned the CW

96 De

about her knowledge of Acacio’s immigration

status:
(DPD:] Thank you, Your Honor. With re-
spect to the State’s objection to my ques-
tioning regarding my client’s—
THE COURT: Immigration status.
[DPD:]—status, yes, Your Honor, it’s the
defense’s position that that goes to bias,
interest, motive, specifically the motive to
fabricate. I don’t think that—I mean, I
think it’s clear from my voir dire that part
of our defense is that she fabricated at
least certain portions of this. Why she
fabricated or the motive involved would be
highly relevant.

That was the only reason why that ques-
tion was posed to the witness, simply to
establish she was aware of that and that
she knew there would be consequences
which would have substantiated a motive,
and that was why I asked the question. In
fact, the question that I was objected to,
which was two questions to it, that was the
only question I was going to ask and noth-
ing further.

THE COURT: I understand, and I’m not
saying it was done in bad faith, I under-
stand your reasons and rationale for doing
that. However, on the other side of the
coin, penalty and punishment shall not be
considered by the jury and deportation of
a person is a form of punishment, And I—
and under the facts and circumstances of
this case, I feel that even notwithstanding
your good faith in breaching the topic, that
the prejudicial effect substantially far out-
weighs the probative value and so I sus-
tained the objection. But, again, I find that
you had a good faith basis for the question.
On the next court date, and before the jury
was brought in, the DPD once again clarified
her stance on the immigration issue:
{DPD:] Yes, Your Honor. With respect to
the objection that I made at the end of our
last—before our last recess, which was
specifically my questions regarding my
client's immigration status, I just also
wanted to clarify for the record that I had
asked—I’m sorry—asked the complaining
witness if she was aware of my client’s
status, She had indicated yes. I then asked
if she was aware of the consequences of
him being arrested, where there was the
objection and it was sustained.

But I wanted to place on the record that
I have a good-faith basis to believe that
she would be able to respond in the affir-
mative due to the fact she is not a citizen
as well. So she would be aware of the
consequences of someone being arrested
and not being a citizen.

Additionally, although I did not request
it before, I think given the fact that she
may be recalled, I’d ask the Court to con-
sider allowing the question but doing a
limiting instruction to the jury which would
address the prejudice that the Court refer-
enced, which is that it goes more to penal-
ty or punishment as opposed to motive and
credibility. I believe that if the jury was
instructed that they could only consider it
for the limited purpose of determining the
complaining witness’ credibility and her
motive, that could address any of the prej-
udice issues.

THE COURT: I understand the defen-
dant’s concern. The Court has done a bal-
ancing act, and this Court finds that even
though it may be relevant as far as 609 or
bias or motive for interest, or whatever
theory you may wish to blame this on, this
Court still believes that the prejudicial of-
fense still outweighs the probative value of
that question, particularly in light of the
fact that penalty or punishment would be
now front and center for our jury’s consid-
eration. And I don’t think that would be
proper, but your point is well taken,
[DPD:] And the Court does not believe
that that could be cured through a limiting
instruction?

THE COURT: No, I don’t think that a
limiting instruction would fix that, especial-
ly in light of the fact that you would not—
you would also be seeking to get that same
information out about the complaining wit-
ness herself, which is, I feel, even further
outside the potential circle.

[DPD:] Actually, Your Honor, to clarify, I
didn’t intend on asking the complaining
witness that question about her status. But.
my good-faith basis belief that she knew
about the consequences was based on the
information that I received that she is not
a citizen, but I was not going to ask her
about that.

THE COURT: Well, the Court would ap-

preciate that. But the Court still feels that

this—the balancing of the interest falls in
favor of exclusion of that question.

[DPD:] Okay.

Acacio testified that he and the CW had
not been together as a couple for about two
weeks before the New Year's celebration and
that, after midnight on January 1, 2012, he
did approach the CW in the bedroom to talk
to her about their relationship. Acacio testi-
fied that the CW appeared angry and told
him, “[w]e don’t need to talk anything out.
We're done.” Acacio explained that he felt
hurt and that he retrieved a knife from the
kitehen and returned to the bedroom “to
show her that I will kill myself.” Acacio
testified that he never pointed the knife at
the CW.

On November 21, 2012, the jury found
Acacio guilty of terroristic threatening in the
first degree and not guilty of abuse of family
or household members. On February 4, 2018,
the circuit court entered a judgment of con-
viction and probation sentence, which sen-
tenced Acacio to five years of probation.

B. ICA Proceedings

On appeal,? Acacio argued that the circuit
court erred in precluding Acacio from cross-
examining the CW on whether she was
aware of his immigration status. According to
Acacio, his immigration status was relevant
because it established the CW’s “bias, inter-
est and motive to fabricate her story.” As a
result, Acacio claimed that the circuit court
violated his “constitutional right to confront,
witnesses via cross-examination.”

In response, the State argued that the jury
had “ample information” as to the CW’s mo-
tive without receiving evidence of Acacio’s
immigration status. As such, the State
claimed that because “the constitutionally re-
quired threshold level of inquiry” was afford-
ed Acacio, the circuit court did not err in
examining the evidence under Hawai‘i Rules
of Evidence (HRE) Rule 403 and concluding
that it was more prejudicial than probative.
The State asserted that evidence of the CW’s
knowledge of Acacio’s immigration status
2. Acacio raised two issues on appeal before the

ICA, the second relating to an undisputed Ha-
wai'i Rules of Penal Procedure Rule 16 violation.

97

was more prejudicial than probative because
questions regarding a defendant’s immigra-
tion status appeal to the trier of fact’s pas-
sion and prejudice.

On July 29, 2016, the ICA entered a sum-
mary disposition order (SDO), which af-
firmed the circuit court’s judgment of convie-
tion and sentence. State _v. Acacio, No.
CAAP-18-0000132, 188 Hawai'i 143, 2016 WL.
4078838, at *1 (Haw. Ct. App. July 29, 2016),
As to the issue of Acacio’s immigration sta-
tus, the ICA concluded that “Acacio was
afforded a level of inquiry on cross-examina-
tion sufficient to satisfy the confrontation
clause of the Sixth Amendment to the U.S.
Constitution.” Id, at “1. In reaching this con-
clusion, the ICA explained that the circuit
court “does not abuse its discretion in exclud-
ing evidence tending to impeach a witness ‘as
long as the jury has in its possession suffi-
cient information to appraise the biases and
motivations of the witness.’” Id. (quoting
United States v. Easter, 66 F.8d 1018, 1022-
23 (9th Cir, 1995)). The ICA then provided
the following analysis:

In the instant case, although the Circuit
Court did not allow Acacio to cross-exam-
ine the CW specifically regarding her
knowledge of his immigration status, the
Cireuit Court did allow Acacio to cross-
examine the CW concerning her general
understanding that if Acacio got arrested,
he would leave their shared residence.
That is, the Circuit Court permitted Acacio
to establish through the CW’s testimony
that she wanted Acacio out of the house;
that, if he was arrested, he would leave;
that she was angry that Acacio remained
in the house after she asked him to leave;
and that she had been angry shortly before
she spoke to police officers. Each of these
topics relates to the CW’s alleged bias or
motive to lie. Thus, the Cireuit Court com-
plied with the Sixth Amendment and pro-
vided Acacio with ample opportunity to
cross-examine the CW to demonstrate her
bias or motive to lie. See Levell, 128 Ha-
wait at 40, 282 P.8d at 582 (citing Balisba-
sana [sic], 88 at 114, 924 P.2d at 1220).

Because our resolution of the first issue is dispos-
itive of the second, we do not address it,

98 Le

Because Acacio was afforded the thresh-
old level of inquiry under the confrontation
clause, the Circuit Court was then permit-
ted to exercise its discretion under HRE
Rule 403 and balance the prejudicial effect
against the probative value of exposing the
jury to evidence that Acacio’s arrest could
result in his deportation because he was
not a citizen. We conclude that the Circuit
Court did not abuse its discretion in ex-
cluding the proffered evidence. The proba-
tive value of the proffered evidence to
show the CW’s motive and bias to testify
falsely was attenuated and weak, The
CW’s knowledge of the potential deporta-
tion consequences of her testifying falsely
did not show or provide a persuasive expla-
nation for why she would testify falsely. In
any event, the proffered evidence was cu-
mulative of evidence permitted by the Cir-
cuit Court—that the CW knew that Aca-
cio’s arrest would require him to leave her
house. On the other hand, as the Cireuit
Court noted, questions concerning the pen-
alty or punishment a defendant may face
are not proper subjects for the jury to
consider, In addition, a jury's verdict can-
not be based on sympathy for the defen-
dant, The proffered evidence created a
substantial risk that the jury would be
unduly influenced or distracted by con-
cerns that a finding of guilt would lead to
Acacio’s deportation—an improper subject
for the jury to consider. As such, the Cir-
euit Court did not abuse its discretion in
concluding that the prejudicial effect of the
excluded evidence substantially out-
weighed its probative value. Therefore, the
first point of error fails.

Id, at *2,

On September 9, 2016, the ICA entered a
judgment on appeal affirming the circuit
court’s February 4, 2018 judgment of convie-
tion and probation sentence,

Il STANDARDS OF REVIEW

A. Admissibility of Evidence

HH As 2 general rule, [the appellate]
court reviews evidentiary rulings for abuse of
discretion, Kealoha v, County of Hawai'i, 74
Haw. 308, 819, 844 P.2d 670, 676 (1998),
However, when there can only be one correct
answer to the admissibility question, or when
reviewing questions of relevance under Ha-

wai'i Rules of Evidence (HRE) Rules 401 and
402, [the appellate] court applies the right/
wrong standard of review. Id. at 319, 844
P.2d at 676; State v. White, 92 Hawaii 192,
204-05, 990 P.2d 90, 102-08 (1999).

Moyle v. Y&Y Hyup Shin, Corp., 118 Hawaii
885, 891, 191 P.8d 1062, 1068 (2008) (brackets
omitted) (citing Kamaka v. Goodsill Anderson
Quinn & Stifel, 117 Hawai'i 92, 104, 176 P.3d
91, 108 (2008),

HH “The trial court’s determination that
the proffered evidence is probative of bias,
interest or motive is reviewed under the
vight/wrong standard.” State v. Balisbisana,
88 Hawai'i 109, 114, 924 P.2d 1215, 1220
(1996) (citing State vy. Kupihea, 80 Hawaii
807, 314, 909 P.2d 1122, 1129 (1996),

B. Confronting Adverse Witnesses

Hl Violation of the constitutional right to
confront adverse witnesses is subject to the
harmless beyond a reasonable doubt stan-
dard. In applying the harmless beyond a
reasonable doubt standard the court is re-
quired to examine the record and determine
whether there is a reasonable possibility that
the error complained of might have contrib-
uted to the conviction,

State v. Pond, 118 Hawai'i 452, 461, 198 P.3d
368, 877 (2008) (citing Balisbisana, 83 Hawaii
at 118-14, 924 P.2d at 1219-20).

IV. DISCUSSION

Although Acacio raises three issues in his
application for writ of certiorari, we do not
address all three as we find his first issue
dispositive: whether the circuit court erred in
precluding Acacio from cross-examining the
CW as to her knowledge of his immigration
status. We agree with Acacio’s argument as
to this issue and hold that the ICA erred
when it held that the circuit court did not err
in preventing Acacio from pursuing this line
of questioning.

A. The ICA erred in affirming the circuit,
court’s decision to prohibit the de-
fense from questioning the CW as to
her knowledge of Acacio’s immigra-
tion status.

HM “An accused's right to demonstrate
the bias or motive of prosecution witnesses is

protected by the sixth amendment to the
United States Constitution, which guarantees
an accused, inter alia, the right ‘to be con-
fronted with the witnesses against him for
her]” Balisbisana, 88 Hawai'i at 115, 924
P.2d at 1221, “Indeed, the main and essential
purpose of confrontation is to secure for the
opponent the opportunity of cross-ewamina-
tion{,] ... [and] the exposure of a witness’
motivation in testifying is a proper and im-
portant function of the constitutionally pro-
tected right of cross examination.” Id, (alter-
ation in original) (quoting Delaware v. Van
Arsdall, 475 U.S, 678, 678-79, 106 S.Ct. 1481,
89 L.Ed.2d 674 (1986)). Additionally, HRE
Rule 609.1(a) (1993) provides that the “credi-
bility of a witness may be attacked by evi-
dence of bias, interest, or motive.” This court
has established that “bias, interest, or motive
is always relevant under HRE Rule 609.1.”
State v. Levell, 128 Hawai'i 34, 40, 282 P.3d
576, 582 (2012) (brackets omitted) (quoting
State v. Estrada, 69 Haw. 204, 220, 788 P.2d
812, 828 (1987).

I When determining whether a defen-
dant has been afforded his constitutional
right to demonstrate bias or motive on the
part of the complaining witness, the appro-
priate inquiry “is whether the jury had suffi-
cient information from which to make an
informed appraisal of [the complaining wit-
ness’s] motives and bias[.]” Balisbisana, 83
Hawai'i at 116, 924 P.2d at 1222; see also
Levell, 128 Hawai'i at 40, 282 P.8d at 582
(‘[T]he appropriate inquiry is whether the
trier of fact had sufficient information from
which to make an informed appraisal of the
witness’s motives and bias.”),

Hl Once this step has been satisfied, the
court may then consider whether the proba-
tive value of the evidence is substantially
outweighed by the danger of unfair preju-
dice, See Levell, 128 Hawai'i at 40, 282 P.8d
at 582 (“[E]vidence of witness bias is rele-
vant, and ... the trial court’s discretion to
exclude evidence under HRE Rule 408 only
becomes operative after the threshold level
of inquiry under the confrontation clause has
been afforded.”). As such, the second step is
not triggered until the defendant is afforded
the threshold level of inquiry under the con-
frontation clause; once this occurs, the trial
court may conduct a balancing test to weigh
the probative value of any additional motive

99

evidence against its potential for undue prej-
udice. Id, at 89, 282 P.8d at 681 (“[Tyhe trial
court’s discretion becomes operative ‘only af-
ter the constitutionally required threshold
level of inquiry has been afforded the defen-
dant?” (quoting Balisbisana, 88 Hawai'i at
114, 924 P.2d at 1220)),

In the present case, the ICA concluded
under the first step that Acacio’s right to
confrontation was not violated because the
jury had sufficient information to make an
informed appraisal of the CW’s motive. Aca-
cio, 2016 WL 4078838, at “2. The ICA ex-
plained that, although the circuit court did
not allow Acacio to cross-examine the CW
about her knowledge of Acacio’s immigration
status, the circuit court did allow cross-exam-
ination as to the CW’s “general understand-
ing that if Acacio got arrested, he would
leave their shared residence.” Id, Then, un-
der the second step, the ICA conducted a
balancing test and concluded that the “proba-
tive value of the proffered evidence to show
the CW's motive and bias to testify falsely
was attenuated and weak,” while the poten-
tial for prejudice was much stronger. Id,

For the following reasons, we conclude
that the ICA erred under both steps of its
analysis,

1, Acacio was not afforded the thresh-
old level of inquiry under the con-
frontation clause because the jury
did not have sufficient information
to evaluate the CW’s motive.

HM The ICA erred under the first step of
this test when it concluded that the circuit
court provided Acacio “ample opportunity
[under the Sixth Amendment] to cross-exam-
ine the CW to demonstrate her bias or mo-
tive to lie” Acacio, at “2. This court has
considered variations of this issue in several
cases and has clearly stated that the trier of
fact must have sufficient information from
which to make an informed appraisal of the
complaining witness's motives and bias.

For example, in Balisbisana, the defendant
was charged with abuse of a family or house-
hold member, 88 Hawai'i at 111, 924 P.2d at
1217. At trial, the family court excluded ref-
erence to the complaining witness’s convic-
tion for harassing the defendant, and the

100

defendant was subsequently convicted. Id. at
118, 924 P.2d at 1219. The defendant appeal-
ed and argued that the circuit court’s exclu-
sion of the complaining witness’s conviction
violated his right to confront the witness and
expose evidence of her motive for bringing
false charges against him. Id. at 113-14, 924
P.2d at 1219-20. This court agreed with the
defendant, and vacated his conviction. Id. at
116-17, 924 P.2d at 1222-23.

In coming to this conclusion, this court
explained that “[tJhe appropriate inquiry,
therefore, is whether the jury had sufficient
information from which to make an informed
appraisal of [the complaining witness’s] mo-
tives and bias, absent evidence of her convic-
tion for harassing [the defendant].” Id. at
116, 924 P.2d at 1222. This court noted that
the “trial court prohibited all inquiry into
[the complaining witness’s] conviction for ha-
rassing [the defendant]” and that a “reason-
able jury might have received a significantly
different impression of [the complaining wit-
ness’s] credibility had [the defendant's] coun-
sel been permitted to pursue his proposed
line of cross-examination.” Id. As such, this
court held that the “trial court abused its
discretion in excluding evidence of [the com-
plaining witness’s] conviction from which the
jury could have inferred that [the complain-
ing witness] had a motive to bring false
charges against [the defendant] and give
false testimony at trial.” Id,

Likewise, in State v. Marcos, 106 Hawaii
116, 102 P.8d 860 (2004), the defendant, who
was charged with and convicted of abuse of a
family or household member, was not allowed
to cross-examine the complaining witness
about the pending family court case concern-
ing the custody of their child. On appeal, the
defendant argued that the complaining wit-
ness had a motive to fabricate her allegations
against him, and that his right to cross-
examine the complaining witness to demon-
strate her motive was violated. Id. at 117, 102
P.8d at 361.

This court agreed with the defendant and
concluded that he “had the right on cross
examination to establish bias or prejudice.”
Id, at 122, 102 P.8d at 366. Citing to Balisbi-
sana, this court reiterated that “the jurors
were entitled to have the benefit of the de-
fense theory before them so that they could
make an informed judgment as to the weight

to place on [the complaining witness’s] testi-
mony which provided a crucial link in the
proof.” Id. As such, this court held that the
defendant’s right of confrontation, as guaran-
teed by the United States and Hawai'i Con-
stitutions, was violated. Id.

More recently, in Levell, the defendant
was charged with harassment for allegedly
shoving the complaining witness. 128 Hawai'i
at 85, 282 P.8d at 577. Prior to the com-
mencement of trial, the circuit court denied
the defendant’s motion to cross-examine the
complaining witness on whether she had sto-
len and used the defendant’s credit cards
after he was arrested. Id. at 35-86, 282 P.8d
at 577-78, The circuit court decided that evi-
dence of the stolen credit cards was not
relevant and was outweighed by the danger
of unfair prejudice to the complaining wit-
ness. Id, at 86, 282 P.8d at 578. This court
vacated and remanded this decision and held
that the defendant’s right to confrontation
was violated:

Respondent’s case against Petitioner
hinged on the court’s willingness to believe
Complainant’s testimony over Petitioner's
version of the events, and Petitioner’s ac-
eusation against Complainant may have
given her a motive to slant the nature of
her testimony against Petitioner. Had Peti-
tioner been allowed to ask, he might have
succeeded in eliciting testimony from Com-
plainant tending to show that she was bi-
ased or had a motive to fabricate or exag-
gerate a story about harassment and to
testify falsely in court. This, in turn, could
have affected the court’s view of Complain-
ant’s credibility, and might have led the
court to conclude that Respondent had not.
proven its case. Without evidence of Com-
plainant’s potential bias or motive, the
court did not have a sufficient basis from
which to make an informed appraisal of
Complainant’s credibility. See Balisbisana,
883 Hawaii at 116, 924 P.2d at 1222. As
such, Petitioner’s right to confrontation
was violated when the court prevented him
from cross-examining Complainant about
the alleged credit card theft.

Id, at 40, 282 P.3d at 582,

As these cases illustrate, in order to satis-

fy the confrontation clause, a defendant must

be given the opportunity to cross-examine a
witness as to his or her bias or motive.
Applying this rule to the present case, the
circuit court clearly curtailed Acacio’s effort
to extract specific information from the CW
relating to her motive when it prohibited
cross-examination of the CW as to her
knowledge of Acacio’s immigration status.
This information, specifically the CW's
awareness of Acacio’s risk of deportation if
he were arrested, raises the question of
whether the CW accused Acacio of these
offenses in order to have Acacio deported
and permanently removed from her life. This
information was especially important for the
jury to consider in light of the CW’s earlier
testimony that she wanted Acacio out of the
house but that he still had not left two weeks
after their break-up. The possibility of Aca-
cio’s deportation presented a lasting solution
to the CW’s relationship issues with Acacio,
and may have motivated the CW to exagger-
ate or fabricate her story. As such, without
evidence of the CW’s knowledge of Acacio’s
risk of deportation if arrested, the jury did
not have sufficient information from which to
make an informed appraisal of the CW’s
motive.

The ICA determined that the jury did
have sufficient information from which to
make an informed appraisal of the CW’s
motive because the circuit court allowed Aca-
cio to establish through the CW’s testimony
that: 1) she wanted Acacio out of the house,
2) she was angry that Acacio remained in the
house after she asked him to leave, and 8)
she was angry with Acacio right before she
spoke to police officers, Acacio, 2016 WL
4078838, at *2. We disagree, In Levell, this
court did not accept a similar argument when
it determined that giving a defendant “con-
siderable latitude” during cross-examination
of the complaining witness is not sufficient if
the defendant is deprived of an opportunity
to present evidence about the source of the
complaining witness’s potential bias or mo-
tive, 128 Hawai'i at 41, 282 P.8d at 583. The
Levell court concluded that the cireuit court
erred in precluding cross-examination of the

3, We note that this step in our analysis is not
necessary because we conclude that the thresh-
old level of inquiry under the confrontation
clause was not met. See Levell, 128 Hawai'i at
40, 282 P.3d at 582 (“fhe trial court's discre-
tion to exclude evidence under HRE Rule 403

101

complaining witness as to the credit card
issue because “the court did not have in its
possession sufficient information to apprise
itself of the alleged bias and motivation of
Complainant on what Petitioner indicated
was the source of such a bias or motivation—
the alleged credit card theft.” Id.

Similarly, the jury in this case did not have
sufficient information to apprise itself of the
source of the CW’s alleged motivation for
calling the police and testifying against Aca-
cio, namely that the CW was trying to per-
manently remove Acacio from her house and
her life by removing him from the country,
As such, the circuit court did not afford
Acacio with the threshold level of inquiry
required under the confrontation clause; the
ICA erred in concluding otherwise under the
first step of its analysis.

2. The CW’s motive evidence was im-
properly excluded pursuant to HRE
Rule 403.3

HM Even if the ICA were correct that
the threshold level of inquiry was met under
the confrontation clause, the ICA erred in
the second step of its analysis when it con-
cluded that the evidence of the CW’s knowl-
edge of Acacio’s immigration status was
properly excluded under HRE Rule 403.

HRE Rule 408 (1998) provides: “Although
relevant, evidence may be excluded if its
probative value is substantially outweighed
by the danger of unfair prejudice, confusion
of the issues, or misleading the jury, or by
considerations of undue delay, waste of time,
or needless presentation of cumulative evi-
dence.”

The circuit court was concerned that evi-
dence of Acacio’s immigration status was un-
duly prejudicial because “penalty and punish-
ment shall not be considered by the jury and
deportation of a person is a form of punish-
ment.” Similarly, the ICA noted that “a
jury’s verdict cannot be based on sympathy
for the defendant” and that the evidence of

only becomes operative after the threshold level
of inquiry under the confrontation clause has
been afforded.”). We address the ICA's analysis
under the second step, however, for the sake of
thoroughness and to provide guidance in this
area of the law.

102

Acacio’s immigration status “created a sub-
stantial risk that the jury would be unduly
influenced or distracted by concerns that a
finding of guilt would lead to Acacio’s depor-
tation—an improper subject for the jury to
consider.” Acacio, 2016 WL 4078888, at *2.

HH It is true that questions about a
defendant’s immigration status are generally
considered both irrelevant and prejudicial in
criminal proceedings. See State v. Avendano-
Lopez, 79 Wash.App. 706, 904 P.2d 824, 331
(1995) (“Questions regarding a defendant’s
immigration status are similarly irrelevant
and designed to appeal to the trier of fact’s
passion and prejudice and thus are generally
improper areas of inquiry.”); Salas _v. Hi-
Tech Erectors, 168 Wash.2d 664, 280 P.8d
588, 586 (2010) (“Issues involving immigra-
tion can inspire passionate responses that
carry a significant danger of interfering with
the fact finder’s duty to engage in reasoned.
deliberation.”); Gonzalez y. City of Franklin,
187 Wis.2d 109, 408 N.W.2d 747, 760 (1987)
(noting that evidence of the possibility of the
defendant’s deportation if found guilty would
have an “obvious prejudicial effect” for the
defendant).

However, in this case, questions about
Acacio’s immigration status were not used
for an improper purpose. See Avendano-Lo-
pez, 904 P.2d at 831 (“It is well-established
that appeals to nationality or other preju-
dices are highly improper in a court of jus-
tice, and evidence as to the race, color, or
nationality of a person whose act is in ques-
tion is generally irrelevant and inadmissible
if introduced for such _a purpose.” (emphasis
added)). In this case, the DPD made it clear
that she was introducing this evidence in
order to show the CW’s motive, and the
circuit court acknowledged that the line of
questioning was not done in bad faith.

Additionally, the circuit court’s concern
about unfair prejudice could have been al-
layed by a limiting instruction, which would
have directed the jury to consider Acacio’s
immigration status only for the purpose of
evaluating the motive of the CW, and not for
purposes of penalty, punishment, or other
collateral consequences. Thus, because Aca-
cio’s immigration status was highly probative
evidence of the CW’s motive, and because its
prejudicial effect could have been contained
through a limiting instruction, the ICA erred

in concluding that the circuit court did not
abuse its discretion when it excluded the
evidence from trial.

In sum, we conclude that the ICA erred in
both steps of its analysis on this point of
appeal. Accordingly, Acacio’s right to con-
frontation was violated when the circuit court:
prevented him from cross-examining the CW
about her knowledge of his immigration sta-
tus. We turn now to examining whether this
error was harmless,

B, The error was not harmless beyond a
reasonable doubt.

HE “Denial of a defendant's constitu-
tionally protected opportunity to impeach a
witness for bias, motive or interest is subject
to harmless error analysis.” Balisbisana, 88
Hawai‘ at 117, 924 P.2d at 1223 (citing State
y. Corella, 79 Hawai'i 255, 261, 900 P.2d 1822,
1828 (App. 1995)). “In applying the harmless
beyond a reasonable doubt standard the
court is required to examine the record and
determine whether there is a reasonable pos-
sibility that the error complained of might
have contributed to the conviction,” Pond,
118 Hawai'i at 461, 198 P.8d at 377 (citing
Balisbisana, 88 Hawai'i at 118-14, 924 P.2d at,
1219-20). This court considers a number of
factors in determining whether an error is
harmless in this context, including “the im-
portance of the witness’ testimony in the
prosecution’s case, whether the testimony
‘was cumulative, the presence or absence of
evidence corroborating or contradicting the
testimony of the witness on material points,
the extent of cross-examination otherwise
permitted, and, of course, the overall
strength of the prosecution’s case,” Levell,
128 Hawaii at 42, 282 P.8d at 584 (quoting
Qlden v. Kentucky, 488 U.S, 227, 288, 109
S.Ct, 480, 102 L.Ed.2d 518 (1988); see also
Balisbisana, 88 Hawai'i at 117, 924 P.2d at
1223,

HM Here, there is a reasonable possibili-
ty that the circuit court’s error might have
contributed to Acacio’s conviction, The CW's
testimony was crucial to the prosecution’s
case because she was the only eyewitness to
Acacio’s alleged threat and abuse against
her. Because the alleged threats and abuse
occurred in the CW's bedroom, with only

Acacio and the CW present, the case turned
on the credibility of these two parties. As
such, evidence of the CW’s motive to exag-
gerate or fabricate her story would have
been helpful for the jurors in assessing the
CW’s credibility and in ultimately determin-
ing which party to believe,
And while the circuit court allowed cross-
examination as to the CW’s potential ulterior
motives for fabricating an allegation of abuse,
the court did not permit any cross-examina-
tion with respect to the CW’s potential mo-
tive to get Acacio deported. The possibility of
Acacio’s deportation, which would appear to
permanently solve the CW’s issues with her
ex-boyfriend, could have furnished a strong
motive for the CW to testify falsely, As such,
we conclude that there is a reasonable possi-
bility that the circuit court’s error in limiting
the CW’s testimony on the subject of Aca~
cio’s immigration status might have contrib-
uted to Acacio’s conviction and was thus not
harmless beyond a reasonable doubt.

Vv. CONCLUSION

For the foregoing reasons, we vacate the
ICA’s September 9, 2016 judgment on ap-
peal, vacate the circuit court’s February 4,
2013 judgment of conviction and probation
sentence, and remand this case to the circuit,
court for a new trial.

398 P.3d 692
STATE of Hawai‘i, Respondent/Plaintif¢-
Appellee,
ve
Stanley S.L. KONG, Petitioner/Defendant-
Appellant.
SCWC-15-0000066
Supreme Court of Hawai‘.

JUNE 15, 2017

104

Benjamin E, Lowenthal, Wailuku, for peti-
tioner.

1, The Honorable Shackley F. Raffetto presided.

2. HRPP Rule 35 provides the following:

(a) Correction of Illegal Sentence. The
court may correct an illegal sentence at any
time and may correct a sentence imposed in an
illegal manner within the time provided herein
for the reduction of sentence. A motion made
by a defendant to correct an illegal sentence
more than 90 days after the sentence is im-
posed shall be made pursuant to Rule 40 of
these rules. A motion to correct a sentence that
is made within the 90 day time period shall

Peter A. Hanano for respondent.

RECKTENWALD, C.J., NAKAYAMA,
McKENNA, AND WILSON, JJ., WITH
CIRCUIT JUDGE CHANG IN PLACE OF
POLLACK, J., RECUSED

OPINION OF THE COURT BY
McKENNA, J.
I. Introduction

In this case, the Circuit Court of the Sec-
ond Cireuit 1 (“cireuit court”) sentenced Stan-
ley S.L. Kong to consecutive terms of impris-
onment, due to his “extensive criminality,”
based on a Presentence Investigation Report
(PSI”) that erroneously included two prior
convictions. These prior convictions had been
previously vacated, remanded, and ultimately
dismissed, but Kong’s counsel did not bring
this to the circuit court’s attention. When
Kong directly appealed his sentence, this
court affirmed the circuit court. State_v.
Kong, 181 Hawai'i 94, 315 P.8d 720 (2018)
(“Kong 1”). We first held that the circuit
court adequately articulated the basis for
Kong’s consecutive sentences when it refer-
enced Kong’s “extensive criminality.” 181
Hawaii at 108, 315 P.8d at 729. We then held
that the burden had been upon Kong to
challenge, before the circuit court, the erro-
neous inclusion of the two prior convictions.
181 Hawaii at 106, 315 P.8d at 7382. We
further held that the sentencing court did not
plainly err in relying upon the erroneous
PSI, in light of Kong’s many other prior
convictions, 181 Hawai'i at 107, 315 P.3d at
733.

Three days after this court issued its opin-
ion in Kong I, Kong filed a motion under
Hawai‘i Rules of Penal Procedure (“HRPP”)
Rule 35(b) (2003), to “reconsider or reduce

empower the court to act on such motion even
though the time period has expired.

(b) Reduction of Sentence. The court may
reduce a sentence within 90 days after the
sentence is imposed, or within 90 days after
receipt by the court of a mandate issued upon
affirmance of the judgment or dismissal of the
appeal, or within 90 days after entry of any
order or judgment of the Supreme Court of the
United States denying review of, or having the
effect of upholding the judgment of conviction.
A motion to reduce a sentence that is made
within the time prior shall empower the court
to act on such motion even though the time

sentence.” Before a different judge of the
circuit court,’ he challenged the erroneous
inclusion of the two prior convictions in his
PSI. The circuit court denied Kong’s motion.
While it acknowledged that it might have
sentenced Kong differently, the cireuit court
ultimately expressed its doubts that it could
re-evaluate Kong’s sentence in light of Kong
I, The Intermediate Court of Appeals
(“ICA”) affirmed, holding that Kong could
not challenge, via a Rule 35 motion, the
erroneous inclusion of the two vacated and
dismissed prior convictions in his PSI in the
first place.

On certiorari, Kong presents the following
questions:

1. Did the Intermediate Court of Appeals

gravely err when it held that the lower

court may abdicate its power to indepen-

dently review, reconsider, and reduce an

original sentence thereby undermining the

policies and purposes of HRPP Rule 35?

2. Did the ICA gravely err in holding

that Mr. Kong could not raise a good-faith

challenge to the use of invalid and vacated

prior convictions in his Rule 35 motion?
We hold that the ICA erred in holding that a
challenge to the erroneous inclusion of prior
convictions in a PSI cannot be brought on a
Rule 85 motion for post-conviction relief.
Therefore, the circuit court properly enter-
tained the motion. The circuit court erred,
however, by (1) concluding that Kong I pre-
cluded its re-evaluation of Kong’s sentence;
and (2) failing to address Kong’s challenge to
the inclusion of the two vacated and dis-
missed prior convictions in his PSI. There-
fore, we vacate the ICA’s December 27, 2016
Judgment on Appeal, and its November 29,
2016 Memorandum Opinion. This case is re-
manded to the circuit court for further pro-
ceedings consistent with this opinion.

Il, Background

A, 2011 Sentencing and First Appeal

In April 2011, Kong was convicted and
sentenced to consecutive sentences for one
count of promoting a dangerous drug in the

period has expired. The filing of a notice of
appeal shall not deprive the court of jurisdic-

tion to entertain a timely motion to reduce a
sentence,

3, The Honorable Peter T. Cahill presided.

105

second degree (ten years), and one count of
prohibited acts relating to drug parapherna-
lia (five years). The circuit court sentenced
him to consecutive sentences based on his
“extensive criminality,” as reflected in the
multiple felony convictions contained in his
PSI. Kong I, 181 Hawai'i at 96, 315 P.3d at
722, Two felony convictions in the PSI, how-
ever, had been previously vacated, remanded,

and ultimately dismissed, but Kong’s counsel
did not object to their use in sentencing, 181
Hawaii at 105, 315 P.8d at 731.

Kong first appealed his sentence in May
2011. On appeal, Kong raised the following
points of error regarding his sentencing: “(1)
whether the circuit court erred in imposing
consecutive terms of imprisonment without
adequately articulating a rationale; [and] (2)
whether the circuit court violated Kong’s due
process rights by basing its sentence on cer-
tain crimes set forth in the PSI report ...
that Kong alleged were ‘vacated, remanded,
and ultimately dismissed....’” 181 Hawaii
at 99, 315 P.3d at 725. The ICA affirmed his
conviction and sentence, State v. Kong, 129
Hawai‘i 185, 295 P.8d 1005 (App. 2018).

This court affirmed the ICA. Kong I, 181
Hawaii 94, 315 P.8d 720. We answered in the
negative Kong’s first question presented:
whether the circuit court’s statement regard-
ing his “extensive criminality” was insuffi-
cient to justify the imposition of consecutive
sentences and did not meet the requirements
of State v. Hussein, 122 Hawai'i 495, 229 P.8d
318 (2010). Kong I, 181 Hawai'i at 108, 315
P.8d at 729, We noted that Hussein directed
circuit courts to “state on the record at the
time of sentencing the reasons for imposing a
consecutive sentence,” and that the circuit
court's “extensive criminality” comment sat-
isfied this requirement. Kong I, 181 Hawaii
at 102, 108, 315 P.8d at 728, 729.

Hl This court also found without merit
Kong’s second question presented: whether
his sentence constituted plain error because
it was based on crimes he did not commit.
Kong I, 181 Hawai‘i at 104, 315 P.3d at 780.
Before this court, Kong had argued that
State v. Sinagoga, 81 Hawai'i 421, 918 P.2d
228 (App. 1996)‘ should not “extend to cases

4. Sinagoga set forth five steps “to be taken by
Hawai'i courts in cases where ordinary sentenc-
ing procedures are applicable and there is a
possibility that the court may use the defendant’s

106

where convictions did not exist at the time of
sentencing,” or, in the alternative, that Sina-
goga should be overturned, Id. We disagreed
with Kong, holding that the Sinagoga frame-
work applied to his case, 181 Hawai‘i at 105,
815 P.8d at 781. Under step two of the
Sinagoga framework, the defendant bears
the burden of challenging prior convictions in
a PSI that the defendant alleges were “un-
counseled” or “not against the defendant.”
Sinagoga, 81 Hawai'i at 447, 918 P.2d at 254,
We held that the vacated and dismissed prior
convictions were “not against the defendant”;
therefore, Kong bore the burden of challeng-
ing the inclusion of these prior convictions in
his PSI. Kong I, 181 Hawai'i at 106, 315 P.3d
at 782. As Kong did not challenge the convic-
tions before the cireuit court, we held that
the circuit court did not err in relying on the
PSI at sentencing, 181 Hawai'i at 105, 315
P.8d at 781.

We also held that the cirenit court’s use of
the vacated and dismissed convictions in sen-
tencing did not amount to plain error, as “the
record indicate[d] that the circuit court based
its imposition of a consecutive sentence on
Kong’s ‘extensive’ criminal record as a whole
and not solely on the specific convictions that
Kong allege[d were] invalid.” 181 Hawai'i at
107, 815 P.8d at 788, In light of the many

prior conviction(s) as a basis for the imposition
or enhancement of a prison sentence”:

Step one, the court shall furnish to the de-
fendant or defendant's counsel and to the
prosecuting attorney a copy of the presen-
tence report, HRS § 706-604, and any other
report of defendant's prior criminal convic-
tion(s). Step two, if the defendant contends
that one or more of the reported prior crimi-
nal convictions was (1) uncounseled, (2) oth-
erwise invalidly entered, and/or (3) not
against the defendant, the defendant shall,
prior to the sentencing, respond with a good
faith challenge on the record stating, as to
each challenged conviction, the basis or bas-
es for the challenge. Step three, prior to im-
posing the sentence, the court shall inform
the defendant that (a) each reported criminal
conviction that is not validly challenged by
the defendant is defendant's prior, counseled,
validly entered, criminal conviction, and (b)
a challenge to any reported prior criminal
conviction not made by defendant before
sentence is imposed may not thereafter, ab-
sent good cause, be raised to attack the
court’s sentence. Step four, with respect to
each reported prior criminal conviction that
the defendant challenges, the [Hawai'i Rules

other prior convictions referenced in the PSI,
we held, “[I]t cannot be said that Kong’s
substantial rights were affected by the circuit
court’s use of the PSI report.” Id. (footnote
omitted),

B. Kong’s Rule 35 Motion

Three days after Kong I was issued, Kong
filed an HRPP Rule 85(b) Motion to “recon-
sider or reduce sentence.” Kong asked the
circuit court to re-sentence him to a concur-
rent 10-year prison term instead of the 15
consecutive years Judge Raffetto had origi-
nally sentenced him on the two drug convic-
tions. At this time, Kong raised his Sinagoga
challenge to the PSI’s erroneous inclusion of
the two vacated and dismissed convictions.
Kong also attached a prison progress report
reflecting the completion of a number of
required and voluntary programs. “Sub-
stance Abuse-RDAP III (IOP)” was the only
required program marked “Incomplete.”

The State opposed Kong’s motion. The
State argued that Kong’s motion essentially
requested concurrent, rather than consecu-
tive, sentencing. The State defended the con-
secutive sentence as appropriate.

The circuit court held a hearing on Kong’s
motion, At the hearing, the circuit court

of Evidence] shall apply, and the court shall
expressly decide before the sentencing
whether the State satisfied its burden of
proving to the reasonable satisfaction of the
court that the opposite of the defendant's
challenge is true. Step five, if the court is
aware of the defendant's prior uncounseled
or otherwise invalid criminal conviction(s), it
shall not impose or enhance a prison sen-
tence prior to expressly stating on the record
that it did not consider it or them as a basis
for the imposition or enhancement of a pris-
on sentence.
81 Hawai'i at 447, 918 P.2d at 254. This frame-
work was modified in State v. Veikoso, 102 Ha-
wai'i 219, 74 P.3d 575 (2003). The Veikoso court
held that “a defendant may not collaterally at-
tack prior counseled DUI convictions on the ba-
sis that they were obtained as the result of alleg-
edly invalid guilty pleas.” 102 Hawai'i at 226, 74
P.3d at 582 (footnote omitted), In a footnote, this
court stated, “Because the ‘otherwise invalidly
entered’ language in [step two of the] Sinagoga
[framework] may be construed as permitting col-
lateral attacks whenever the validity of a convic-
tion is challenged, we emphasize, in light of our
holding today, that this language should be disre-
garded.” 102 Hawai'i at 226 n.8, 74 P.3d at 582
n.8,

stated that “it wouldn’t be a wise thing to
do” to reduce Kong’s drug and parapherna-
lia sentences in light of the fact that Kong
had not completed the required substance
abuse program. Kong’s counsel explained
that the erroneous addition of the two vacat-
ed and dismissed convictions resulted in
Kong’s classification at a different level for
programming purposes; were Kong to be
classified accurately, Kong’s counsel con-
tended that Kong’s substance abuse pro-
gram would be considered completed.

The circuit court suggested to Kong’s
counsel that he file a motion to correct the
PSI so that the State would have an opportu-
nity to respond. With regard to any potential
reconsideration or reduction of sentence, the
circuit court stated, “I’m not suggesting to
you [defense counsel] that I’m going to do
anything different than what’s already been
done. Because it’s already gone up on ap-
peal.” The circuit court continued the motion
to reconsider or reduce sentence.

Kong’s counsel filed a supplemental memo-
yandum in support of his motion for reconsid-
eration or reduction of sentence. Attached
was a 1994 “Notice and Judgment on Ap-
peal,” in which the ICA vacated Kong’s con-
victions for Burglary in the Second Degree
and Unauthorized Control of a Propelled Ve-
hicle, and remanded the case for further
proceedings. Also attached was a 1995 “Mo-
tion to Dismiss with Prejudice,” in which the
prosecutor’s office, upon remand from the
ICA, moved for an order dismissing the case
with prejudice, The motion was “approved
and so ordered,” as indicated by a judge’s
signature on the bottom left of the motion.

Kong’s counsel also filed a “Written Notice
of Objection to the Pre-Sentence Report and
Other Materials Contained in the Court
File.” The written notice asked, inter alia,
that all references to the vacated and dis-
missed prior convictions be removed from
Kong’s PSI. The State did not file a response
to the written notice. There is nothing in the
record indicating that the circuit court acted
upon the written notice.

At the continued hearing on the motion to
reconsider or reduce sentence, the State ar-
gued that this court’s Kong I opinion had
“held that there was no abuse of discretion
and the Court made a proper finding in

107

sentencing [Kong].” The State argued that
Kong’s sentence had been “reviewed by the
appellate process twice,” and that Kong’s
motion for reconsideration or reduction of
sentence was without merit.

Kong’s counsel disagreed that this court’s
opinion in Kong I foreclosed reconsideration
or reduction of Kong’s sentence. He stated
that the appeal was not about the sentence
itself; rather, the appeal concerned whether
the initial sentencing court had sufficiently
articulated the basis for the sentence, and
whether it was plain error for the sentence to
be based on a PSI that included the two
vacated and dismissed convictions, Kong’s
counsel also pleaded for leniency, asking the
circuit court to re-evaluate Judge Raffetto’s
sentence,

The circuit court also heard from Kong,
who asked to be sentenced based on only his
valid convictions, The circuit court stated,
“Well, I don’t disagree with you there, and I
appreciate what you are saying.”

The circuit court ultimately sided with the
State. The circuit court suggested that it
would have sentenced Kong differently had it
been the initial sentencing court, but doubted
that the initial sentence was “inherently un-
just or unfair,” in light of the fact that the
Kong I court did not remand Kong’s case for
resentencing:

This has already been—this sentence
was appealed, and the Supreme Court re-
viewed it, and if the Supreme Court felt—I
understand the grounds when they look at
these things, But the appellate court—the
appellate court has really scrutinized a lot
of these cases, especially with the eomposi-
tion of our present court. Even if it wasn’t
raised, if they feel this was inherently un-
just or unfair, they would have sent it
back, and they didn’t.

And so—and I understand that dispari-
ty, but I don’t know what Judge Raffetto’s
reasoning was, but that’s what he did, and
I just don’t see the grounds to reconsider
or reduce it.

Tm not saying that’s what I would have

done, but that’s not the standard to decide
it,

108

The circuit court denied Kong’s motion to
reconsider or reduce sentence. Although the
circuit court seemed to accept that the PSI
contained vacated and dismissed convictions,
the record does not reflect that the circuit
court disposed of Kong’s “Written Notice of
Objection to the Pre-Sentence Report and
Other Materials Contained in the Court
File.” ®

C. ICA Appeal

On appeal, Kong raised the following
points of error, which he continues to pursue
on certiorari:

[1]. The circuit court failed to indepen-
dently consider the merits of Mr. Kong’s
motion and wrongly deferred to the appel-
late courts and the original sentencing
judge.

[2]. The circuit court failed to comply
with the framework in State v. Sinagoga
and address the challenged prior convic-
tions contained in the pre-sentence investi-
gation report.

In a memorandum opinion, the ICA af-
firmed the circuit court’s order denying
Kong’s motion to reconsider or reduce sen-
tence. State v. Kong, CAAP-15-0000066 (App.
Nov. 29, 2016) (mem.) at 11, 2016 WL
6997646, As to the first point of error (wheth-
er the circuit court failed to independently
consider the merits of Kong’s motion and
wrongly deferred to the appellate courts and
the original sentencing judge), the ICA held
that “the circuit court sufficiently considered
the merits of Kong’s motion,” supporting its
conclusion solely with a recapitulation of

5. We note that HRS § 706-604(2) (2014) pro-
vides, in pertinent part, “The court shall amend
or order the amendment of the [pre-sentence]
report upon finding that any correction, modifi-
cation, or addition is needed and, where appro-
priate, shall require the prompt preparation of
an amended report in which material required to
be deleted is completely removed...”

6. Kong also raised a third point of error: ‘The
prosecution's objection to a reduction in the sen-
tence to concurrent terms of imprisonment vio-
lates an agreement reached with Mr. Kong.” As
this point of error is not pursued on certiorari,
this opinion does not address it. As this court is
vacating the ICA’s judgment on appeal and re-
manding this case to the circuit court for further
proceedings, defense counsel may raise this issue
with the circuit court on remand.

Kong’s filings in support of his motion and
the arguments made in those filings and at
the hearings on the motion. Kong, mem. op.
at 4. Next, the ICA “presume[{d] that the
cireuit court considered all of the factors
listed in HRS § 706-6067 when it denied
Kong’s Motion to Reconsider or Reduce.”
Kong, mem. op, at 6. The ICA, however, did
not address Kong’s arguments that (1) the
circuit court wrongly believed that this court
had already ruled that Kong’s sentence was
fair and just and simply deferred to this
ecourt’s Kong I opinion; and (2) the circuit
court wrongly deferred to Judge Raffetto’s
initial sentencing decision.

The ICA did directly address Kong’s sec-
ond point of error (whether the circuit court
failed to comply with the Sinagoga frame-
work and address the challenged prior con-
victions contained in the PSI). Kong, mem.
op. at 7-10, The ICA held that Sinagoga did
not apply to Kong’s motion to reduce his
sentence in the first place, Kong, mem. op. at
9. The ICA reasoned only that “[t]here is
nothing in Sinagoga to suggest that it applies
to Kong’s motion to reduce his sentence.” Id,
The ICA cited no other authority for its
holding.

Regardless of its holding, the ICA went on
to state, “[Wle do not suggest that the circuit
court should consider convictions improperly
entered on a PSI report.” Id. The ICA then
stated that it did not appear that the circuit
court relied on the vacated and dismissed
convictions when it denied Kong’s motion to
reconsider or reduce sentence. Id. The ICA
noted that the circuit court asked Kong’s

7. HRS § 706-606 (2014) is titled, “‘Factors to be
considered in imposing a sentence,” and it in-
cludes (1) the nature and circumstances of the
offense and the history and characteristics of the
defendant; (2) the need for the sentence imposed
to reflect the seriousness of the offense, to pro-
mote respect for law, and to provide just punish-
ment for the offense; to afford adequate deter-
rence to criminal conduct; to protect the public
from further crimes of the defendant; and to
provide the defendant with needed educational
or vocational training, medical care, or other
correctional treatment in the most effective man-
ner; (3) the kinds of sentences available; and (4)
the need to avoid unwarranted sentence dispari-
ties among defendants with similar records who
have been found guilty of similar conduct.

counsel to file a separate motion to request a
correction to the PSI. Id. Next, the circuit
court asked Kong whether he had any other
convictions besides the overturned ones, and
when Kong answered affirmatively but asked
to be sentenced with regard only to valid
convictions, the circuit court stated, “I don’t
disagree with you there.” Id. Thus, the ICA
concluded, “[I]}t appears that the cireuit court
recognized that some of Kong’s convictions
had been vacated and that the court did not
rely on those vacated convictions when it
denied Kong’s Motion to Reconsider or Re-
duce.” Kong, mem. op. at 10,

Til. Standard of Review

HH “A trial court has the discretion to,
within the time limits set forth by HRPP
Rule 85, reduce a sentence.” State _v.
Williams, 70 Haw. 566, 569, 777 P.2d 1192,
1194 (1989). Therefore, orders on HRPP
Rule 35 motions for reduction of sentence are
reviewed for an abuse of discretion. “[Flac-
tors which indicate a plain and manifest
abuse of discretion are arbitrary or capri-
cious action by the judge and a rigid refusal
to consider the defendant's contentions.”
State v. Kahapea, 111 Hawai'i 267, 278, 141
P.8d 440, 451 (2006), “[G]enerally, to consti-
tute an abuse it must appear that the court
clearly exceeded the bounds of reason or
disregarded rules or principles of law or
practice to the substantial detriment of a
party litigant.” Id.

IV. Discussion

A. A defendant may raise a Sinagoga
challenge to a PSI in connection with
a Rule 35 motion to reduce sentence.
Hl On certiorari, Kong asks, “Did the
ICA gravely err in holding that Mr. Kong
could not raise a good-faith challenge to the
use of invalid and vacated prior convictions in
his Rule 35 motion?” Kong argues that it was
appropriate for him, after Kong I held that
Sinagoga applied, to raise a good-faith chal-
lenge to the inclusion of the vacated and
dismissed convictions in his PSI in his Rule
85 motion, and, once the challenge was
raised, the State and the circuit court should
have addressed it.

As it raises a threshold issue, we start with
Kong’s challenge to the ICA’s holding that

109
the Sinagoga framework does not apply on a

“Rule 35 motion to reduce sentence. The ICA

incorrectly held that Sinagoga did not apply
to Kong’s Rule 35 motion to reconsider or
reduce sentence. Kong, mem. op. at 9. The
ICA reasoned only that “[t]here is nothing in
Sinagoga to suggest that it applies to Kong’s
motion to reduce his sentence.” Id. The ICA.
cited no other authority for its holding.

To the contrary, while there is no Hawai'i
appellate case affirmatively holding that a
Sinagoga challenge can be raised in a Rule
85 proceeding, there is authority suggesting
the same. State v. Kido, 109 Hawai‘i 458, 128
P.8d 340 (2006), is analogous to the instant
case, In that case, a defendant was charged
and convicted with promoting a dangerous
drug in the third degree and unlawful use of
drug paraphernalia. 109 Hawai'i at 459, 128
P.3d at 841, As part of his sentence, he was
ordered not to enter the Chinatown Weed
and Seed geographical area. Id. While that
case was on appeal, the defendant was found
in the Chinatown Weed and Seed geographi-
cal area and arrested. Id. Upon being
searched in preparation for incarceration, po-
lice found rock cocaine on the defendant. 109
Hawai'i at 459-60, 128 P.3d at 341-42, The
defendant pled no contest to a charge of
promoting a dangerous drug in the third
degree and was sentenced to five years in
prison, with a mandatory minimum of one
year in prison as a repeat offender, due to
the prior drug and paraphernalia convictions
(that he had appealed). 109 Hawai'i at 460,
128 P.8d at 342.

A year after his sentencing as a repeat
offender, the ICA vacated and remanded for
a new trial the drug and paraphernalia con-
victions that had provided a basis for his
repeat offender sentence. Id. The defendant.
then moved, under HRPP Rule 35(a), to cor-
rect an illegal sentence. Id, The circuit court
denied the motion, and the defendant appeal-
ed. Id, (The defendant was later convicted of
the drug and paraphernalia charges at his
new trial. 109 Hawai'i at 461, 128 P.8d at
343.)

This court held that the circuit court erred
in denying the defendant’s Rule 35 motion
(although the error was moot, as the defen-
dant had been convicted of both charges at

110

his new trial). 109 Hawai'i at 468, 128 P.8d at
845. This court held, “[A] defendant is enti-
tled, by timely HRPP Rule 85 motion to
correct sentence ... once the defendant has
successfully attacked a prior conviction on
which the sentence was based in whole or
part because that conviction no longer consti-
tutes a proper basis for increased punish-
ment for a subsequent offense under HRS
§ 706-6065,” Hawaii’s repeat offender sen-
tencing statute. 109 Hawai'i at 467, 128 P.3d
at 849 (footnote omitted).

The facts in Kido differ in three respects.
First, the defendant in Kido moved under
subsection (a) of HRPP Rule 85 to correct an
illegal sentence, while Kong moved under
subsection (b) of the rule to reduce his sen-
tence. Second, the defendant in Kido chal-
lenged the imposition of a mandatory mini-
mum sentence as a repeat offender, while
Kong challenged the erroneous inclusion of
vacated and dismissed convictions in the PSI
as a basis for his consecutive sentence. Third,
the defendant in Kido did not expressly bring
a Sinagoga challenge in his Rule 35 motion,
while Kong did in his,

Kido is, however, still analogous to this
ease. The holding quoted above clearly ap-
plies to Kong. In addition, the relief sought
under subsections (a) and (b) under HRPP
Rule 35 differ only in degree; while subsec-
tion (a) allows correction of a sentence in
violation of the law, subsection (b) allows
reduction of a sentence that, while lawful,
may nevertheless be too harsh. See HRPP
Rule 35 (a) and (b); United States v. May-
nard, 485 F.2d 247, 248 (9th Cir. 1978) (“If a
lawful sentence was lawfully imposed in the
first instance, then the function of Rule 35 is
simply to allow the [sentencing] court to
decide if, on further reflection, the original
sentence now seems unduly harsh.”),

Second, it does not matter that the defen-
dants in Kido and Kong challenged different
types of sentencing (ie., repeat offender sen-
tencing in Kido, and consecutive sentencing
in Kong). The Sinagoga rule applies to ordi-
nary sentencing. Sinagoga, 81 Hawai'i at 440,
918 P.2d at 247. Sinagoga itself noted that
repeat offender sentencing and consecutive
sentencing are both subject to “ordinary sen-
tencing procedures.” Id, Therefore, a Sinago-
ga challenge may be brought in either sen-
teneing context.

Third, although Kido did not involve an
express Sinagoga challenge, the functional
similarities between the Kido defendant's
challenge and Kong’s challenge to the use of
invalid convictions in sentencing override dif-
ferences in form. Both Kido and Kong had
two convictions vacated by the ICA, yet both
defendants were subsequently sentenced as
though those two prior convictions remained
valid. Both defendants brought Rule 35 mo-
tions seeking re-evaluation of their sen-
tences, This court in Kido held that a Rule
85(a) challenge should have been allowed to
correct the illegal mandatory minimum sen-
tence. Therefore, we now similarly hold that
a defendant may bring a Sinagoga challenge
in a Rule 35(b) motion seeking to reduce a
sentence,

Moreover, disallowing a Sinagoga chal-
lenge on a Rule 85 motion to reconsider
would not seem consistent with HRPP Rule
2 (1977), which provides that the Hawai‘
Rules of Penal Procedure “are intended to
provide for the just determination of every
penal proceeding. They shall be construed to
secure simplicity in procedure, fairness in
administration and the elimination of unjusti-
fiable expense and delay.” Disallowing a Sin-
agoga challenge in a Rule 85 motion to re-
consider sentence—effectively requiring a
criminal defendant to file a Rule 40 post-con-
viction petition alleging ineffective assistance
of his original counsel in not bringing the er-
roneous convictions in the PSI to the atten-
tion of the original sentencing judge, assum-
ing a defendant would even be aware of such
a possibility—would not further simplicity in
procedure, fairness in administration, and
the elimination of unjustifiable expense and
delay. In short, a defendant may bring a Sin-
agoga challenge in connection with a Rule 35
motion,

B. The circuit court erred in abandoning
Kong’s Sinagoga challenge due to its
mistaken belief that Kong I precluded
its re-evaluation of Kong’s sentence,

HH Having held that the cireuit court had
the power to entertain Kong’s Sinagoga chal-
lenge in connection with his Rule 35 motion,
‘we now examine the circuit court’s handling
of the matter. On certiorari, Kong’s remain-

ing question presented is, “Did the Interme-
diate Court of Appeals gravely err when it
held that the lower court may abdicate its
power to independently review, reconsider,
and reduce an original sentence thereby un-
dermining the policies and purposes of
HRPP Rule 35?” He argues that the circuit
court possessed the independent discretion to
re-evaluate Kong’s sentence and reduce it if
it was unduly harsh. Kong points out that the
circuit court itself expressed that it did not
understand why Judge Raffetto imposed con-
secutive sentences; nevertheless, the circuit
court still declined to reconsider Kong’s sen-
tence, Kong also contends that the cirenit
court erroneously concluded that this court
would have sua sponte evaluated Kong’s sen-
tence and remanded it if it was unjust. Kong
argues that the refusal to exercise discretion
is itself an abuse of discretion, citing to cases
from other jurisdictions in support of that
proposition,

I To the extent Kong's first argument
implies that the cireuit court had full discre-
tion to reconsider Judge Raffetto’s sentence
without any additional facts, he is incorrect.
With respect to the effect of having a differ-
ent judge reconsider a ruling by a prior
judge in a criminal case, State v. Oughterson,
99 Hawai'i 244, 258, 54 P.8d 415, 424 (2002),
states, “Unless cogent reasons support the
second court’s action, any modification of a
prior ruling of another court of equal and
concurrent jurisdiction will be deemed an
abuse of discretion... .” This criminal rule is
not, however, an absolute rule, A “change in
the factual underpinning [in] a particular rul-
ing may rise to the level of a ‘cogent reason’
that would justify a court in overturning the
ruling of another court of equal and concur-
rent jurisdiction,” 99 Hawai'i at 254, 54 P.8d
at 425.

Thus, contrary to Kong’s assertion, the
circuit court could not change the prior
judge’s sentence without cogent reasons. It
appears, however, that the erroneous inclu-
sion of two felony convictions in the PSI
would constitute a “cogent reason” for the
circuit court to reconsider Kong’s sentence.
We need not decide this issue at this time,
however, because the circuit court also based
its refusal to reconsider on an erroneous
interpretation of the effect of this court’s
ruling in Kong I. On remand, the circuit

111

court should first address whether cogent
reasons exist to reconsider Judge Raffetto’s
sentence,

Kong’s alternative argument, that the cir-
cuit court erroneously considered this court’s
Kong I opinion to preclude his independent
re-evaluation of Kong’s sentence, however,
has merit. At an initial hearing on Kong’s
motion to reconsider or reduce sentence, the
circuit court stated, “I’m not suggesting to
you [defense counsel] that I’m going to do
anything different [regarding sentencing]
than what’s already been done, Because it’s
already gone up on appeal.” (Emphasis add-
ed.) At a later hearing, the circuit court
elaborated its reasoning as follows:

This has already been—this sentence was
appealed, and the Supreme Court reviewed
it, and if the Supreme Court felt—I under-
stand the grounds when they look at these
things. But the appellate court—the appel-
late court has really scrutinized a lot of
these cases, especially with the composi-
tion of our present court, Even if it wasn’t
raised, if they feel this was inherently un-
just or unfair, they would have sent it
back, and they didn’t.

These statements indicate the circuit court
thought it was unable to reconsider the prior
judge’s sentence not because of “comity” rea-
sons, but because it thought this court had
already passed judgment on the justness and
fairness of Kong’s sentence, The circuit
court's interpretation of the effect of this
court's opinion in Kong I was incorrect,

In this regard, the cireuit court seemed to
reference the Kong I majority’s holding that
the circuit court did not plainly err in relying
on the inaccurate PSI in imposing consecu-
tive sentences, 181 Hawai'i at 107, 815 P.8d
at 783. To the circuit court, had this court
held that Kong’s sentence amounted to plain
error and remanded the case for re-sentenc-
ing, then it would be appropriate to revisit
Kong’s sentence. This reasoning is errone-
ous, as it conflates the result of a direct
appeal with what may be possible in a motion
for post-conviction relief. Even though a
plain error review on direct appeal may re-
sult in affirmance of a sentence because the
high plain error standard of “affecting sub-
stantial rights” was not met, Kong’s sentence

112

can be reconsidered by a different sentencing
judge under HRPP Rule 35 at the judge’s
discretion (a lower standard), as long as co-
gent reasons exist. Therefore, in this case,
the circuit court was not precluded, by this
court’s affirmance of Kong’s sentence in
Kong I, from re-evaluating Kong’s sentence
on a Rule 35 motion.

In connection with his Rule 35 motion,
Kong presented the circuit court with evi-
dence that two vacated and dismissed prior
convictions were erroneously included in his
PSI, and that his consecutive sentence should
be re-evaluated in light of this mistake. In
other words, Kong brought a Sinagoga chal-
lenge to his PSI as part of his Rule 35
motion. In response to his challenge, howev-
er, Kong notes, “Nothing happened here.”
Neither the State nor the circuit court ad-
dressed whether the prior convictions were
indeed invalid. As Kong argues, the State
and the circuit court simply abandoned com-
pliance with the Sinagoga framework.

Kong’s argument is persuasive. Again, the
five steps in the Sinagoga framework are

Step one, the court shall furnish to the

defendant or defendant's counsel and to

the prosecuting attorney a copy of the
presentence report, HRS § 706-604, and
any other report of defendant’s prior crim-
inal conviction(s). Step two, if the defen-
dant contends that one or more of the
reported prior criminal convictions was (1)
uncounseled, ... and/or ([2]) not against
the defendant, the defendant shall, prior to
the sentencing, respond with a good faith
challenge on the record stating, as to each
challenged conviction, the basis or bases
for the challenge. Step three, prior to im-
posing the sentence, the court shall inform
the defendant that (a) each reported crimi-
nal conviction that is not validly challenged
by the defendant is defendant’s prior,
counseled, validly entered, criminal convic-
tion, and (b) a challenge to any reported
prior criminal conviction not made by de-
fendant before sentence is imposed may

8. See supra, n.5.

9 It is true that the circuit court told Kong, “I
don’t disagree with you there,” in response to
Kong's statement that his sentence should be
“based only on valid, not invalid, convictions. This
statement, however, falls short of “expressly stat-

not thereafter, absent good cause, be
raised to attack the court’s sentence. Step
four, with respect to each reported prior
criminal conviction that the defendant chal-
lenges, the [Hawai'i Rules of Evidence]
shall apply, and the court shall expressly
decide before the sentencing whether the
State satisfied its burden of proving to the
reasonable satisfaction of the court that
the opposite of the defendant’s challenge is
true. Step five, if the court is aware of the
defendant’s prior uncounseled or otherwise
invalid criminal conviction(s), it shall not
impose or enhance a prison sentence prior
to expressly stating on the record that it
did not consider it or them as a basis for
the imposition or enhancement of a prison
sentence,

Sinagoga, 81 Hawai'i at 447, 918 P.2d at 254
(as modified by Veikoso, 102 Hawai'i 219, 74
P.8d 575).

In this case, through a “Written Notice of
Objection to the Pre-Sentence Report and
Other Materials Contained in the Court
File,” made in connection with his Rule 35
motion to reconsider or reduce sentence,
Kong complied with the second step in the
Sinagoga framework by challenging the in-
clusion of the two vacated and dismissed
convictions in the PSI. The State did not
respond, There is nothing in the record to
reflect that the circuit court took any action
on the written notice.’ Further, the circuit
court did not expressly state on the record
that it did not consider the two convictions in
denying Kong’s motion to reconsider or re-
duce sentence?

Having decided that Sinagoga applies in
Rule 35 motion proceedings, and that the
circuit court was not precluded by Kong I
from re-evaluating Kong’s sentence, we hold
that it was error for the circuit court to
abandon Kong’s Sinagoga challenge to the
erroneous inclusion of two vacated and dis-
missed prior convictions in his PSI.

ing on the record that [the circuit court] did not

consider [invalid convictions] as a basis for the

imposition or enhancement of a prison sen-
tence,” or, in this case, the denial of a motion to
reduce sentence, as Sinagoga would require, See

Sinagoga, 81 Hawaiii at 447, 918 P.2d at 254.

V. Conclusion
For the foregoing reasons, the ICA’s De-
cember 27, 2016 Judgment on Appeal, and its
November 29, 2016 Memorandum Opinion,
are vacated, and this case is remanded to the
circuit court for further proceedings consis-
tent with this opinion.

398 P.3d 702
STATE of Hawai‘i, Respondent/Plaintiff-
Appellee,
v.

Jamal MCGHEE, Petitioner/Defendant-
Appellant.
SCWC-14-0001217
Supreme Court of Hawai'i.

JUNE 21, 2017

o
a)

dr. for petitioner.
Brian R. Vincent for respondent.

RECKTENWALD, C.J., NAKAYAMA,
McKENNA, POLLACK, AND WILSON,
Jd.

OPINION OF THE COURT BY
POLLACK, J.

Hl During closing argument in the de-
fendant’s bench trial, the prosecutor read a
portion of the complainant’s prior statement
to the police although its contents had not
been admitted into evidence. We conclude
that the reading of the statement violated the
defendant’s substantial rights. We also clari-
fy that evidence proffered in a terroristic
threatening prosecution of the presence or

1, HRS § 707-717 (2014) states as follows:

(1) A person commits the offense of terror-
istic threatening in the second degree if the
person commits terroristic threatening other
than as provided in section 707-716,
(2) Terroristic threatening in the second de-
gree is a misdemeanor.
HRS § 707-715 defines terroristic threatening as
follows:
A person commits the offense of terroristic
threatening if the person threatens, by word
or conduct, to cause bodily injury to another

115

absence of the complainant’s fear, that is
incidental to the defendant’s alleged words or
conduct, is relevant to the “true threat” and
state of mind requirements of this offense.

I. BACKGROUND
A. District Court Proceedings

Jamal McGhee was charged by complaint
with threatening “by word or conduct to
eause bodily injury to [Edithe Kearney], in
reckless disregard of the risk of terrorizing
[her] thereby committing the offense of Ter-
roristic Threatening in the Second Degree, in
violation of [Hawaii Revised Statutes (HRS)
§] 707-717(1).” ! MeGhee waived his right to a
jury trial in the District Court of the First
Circuit (district court) and entered a plea of
not guilty. At the bench trial Kearney and
McGhee were the only witnesses,

Kearney testified that she is the owner of
a club called Alley Cat located on O‘ahu.
Kearney indicated that Alley Cat is very
small in size—the number of patrons can be
from ten to twenty—and the club does not
get loud, On June 12, 2014, around 2:00 am.,
McGhee came to Alley Cat, Kearney testified
that McGhee was upset with an Alley Cat
employee who was at the front door, Kearney
stated that she was inside by the bar, about
three yards from the front door, when she
heard McGhee—who she described as very
Joud—sereaming, swearing, cursing, and
threatening everyone. As a result of
McGhee’s yelling and threatening, Kearney
went outside the club. Kearney testified that
McGhee was very upset and threatened her,
saying that he “can kill me, can beat me up,
that sort of thing,” Kearney stated that she
felt threatened by McGhee’s remarks, and
she called the police because he did not calm
down, The police arrived more than ten min-

person or serious damage or harm to prop-
erty, including the pets or livestock, of an-
other or to commit a felony:
(1) With the intent to terrorize, or in reck-
less disregard of the risk of terrorizing, an-
other person{,] .

HRS § 707: 715(1) (2014).

2. McGhee was also charged with harassment,
but this charge was dismissed on motion of the
State.

3. The Honorable Linda K. C, Luke presided.

116

utes later, but by then, McGhee had already
left the area with the help of Gloria Pancho,
McGhee’s girlfriend and Kearney’s former
employee,

On cross-examination, Kearney testified
that she did not call the police upon hearing
McGhee from inside the club because she
thought she or Pancho could calm McGhee
down. Despite McGhee’s yelling, Kearney felt
it was okay to go outside because “I mean,
Tm almost 70. I’m not afraid to be—if he
wants to kill me, kill me.”

Upon the conclusion of Kearney’s testimo-
ny, the State rested. McGhee moved for
judgment of acquittal, which motion the dis-
trict court denied, and the defense presented
its evidence.

McGhee, who was then 48 years old, testi-
fied that he went to Alley Cat to pick up his
key from his girlfriend. McGhee related that
while waiting outside—at least 30 or 35 feet
from the front door because he had already
had problems with Alley Cat—he was smok-
ing a cigarette and not yelling. McGhee testi-
fied that Kearney “was kind of hidden in the
bushes” and that he did not see her until the
police arrived. Later in his testimony,
McGhee clarified that Kearney was not in the
bushes; it was just that he did not see her
because it was dark. McGhee explained that
had he seen Kearney, he would have left
because she always called the police on him.
McGhee stated that Kearney called the police
on that day because she did not like him to
be around Alley Cat.

Following the close of McGhee’s case, the
prosecutor presented his closing argument.
The prosecutor argued that Kearney’s testi-
mony was credible, The prosecutor pointed
out that Kearney was 70 years old and that,
even given Kearney’s physical stature, she
was not concerned for herself but rather for
her employees. The prosecutor contended
that McGhee was “hysterical” on the day in
question and essentially made up a story.
The prosecutor challenged McGhee’s credi-
bility, arguing that McGhee initially testified
that Kearney was hiding in the bushes, but
he later testified that Kearney was not hiding
there. The prosecutor thus concluded that
McGhee’s testimony was not credible.

4, The “written 252” refers to a prior statement
that Kearney provided to police. However, the

Defense counsel in his closing argument
maintained that McGhee went to Alley Cat,
where he waited outside—from a distance—
for his girlfriend. Counsel contended that
whether Kearney was near or behind the
bushes was not relevant to McGhee’s credi-
bility. The defense argued that Kearney was
not credible because she testified that
McGhee was yelling and that “she was afraid
of what would happen to her, her workers
and herself” and yet felt she could go outside
and calm the situation down. Defense counsel
argued that under such circumstances
“there’s no risk of threatening.” Counsel also
pointed out that Kearney herself testified
that “she was not afraid at that time.”

The prosecutor began his rebuttal closing
argument by stating that “in candor to the
Court, given what the defense argument has
been ... I do need to point out although this
wasn’t raised as evidence in this case, out of
fairness to the defendant I believe I do need
to point it out.” The prosecutor explained
that the defense started to impeach Kearney
with her prior statement that she was afraid.

The prosecutor then elaborated on his un-
derstanding of the defense’s impeachment
efforts: “I believe what they were referring
to was a portion of the written 252 that the
witness was not confronted with.” * The pros-
ecutor acknowledged that the prior state-
ment was not part of the evidence but stated
that he did not have a problem with the court
considering it.

[PROSECUTOR:] I’m not going to raise
that argument that she—that is not part of
the evidence in this case, I don’t have a
problem with the Court considering that
that was included in the 252. I just put that,
out there in fairness to the defense. None-
theless, the State would still argue that the
witness be found credible.

THE COURT: So your representation in

the 252—

{PROSECUTOR]: The 2—in the 252 there

was a statement that I was afraid. Howev-

er, the State is urging the Court to find

that her testimony in court is credible. I

feel it just as important to point out be-

cause I know that the defense started ask-

record indicates that the defense did not refer-
ence a prior statement during cross-examination.

ing about that but didn’t finish laying the

foundation for it. So just out of fairness, I

just think it’s appropriate to note that for

the Court.

THE COURT: And the portion of the 252

is that [Kearney] was afraid?

[PROSECUTOR]: Correct, Your Honor, if

I could just read that portion for the

Court?

Thus, after the prosecutor disclosed the exis-
tence of the prior statement that was “not
part of the evidence,” the court asked the
prosecutor if the portion of the statement he
was referring to indicated that Kearney was
afraid. Upon affirming that the “portion of
the 252” did state this, the prosecutor asked
if he could read that portion. The court then
addressed defense counsel.

THE COURT: May he read it?

[DEFENSE COUNSEL]: Yes, Your Hon-

or.

[PROSECUTOR]: It reads: At that time I

was afraid and call the police. The tense is

incorrect in that,

THE COURT: All right, thank you.....
After the prosecutor read the portion of the
prior statement that stated Kearney was
afraid and called the police (hereinafter “252
Statement”), the court immediately rendered
a guilty verdict upon the charge, The court
explained that “this is a matter of credibility
and I do opt to believe the version of the
complaining witness.”

The district court sentenced McGhee and
entered the Notice of Entry of Judgment
and/or Order.’ McGhee filed a notice of ap-
peal.

B. Intermediate Court of Appeals
(ICA) Proceedings

In his opening brief, McGhee argued that
he was deprived of his right to confront and
cross-examine witnesses because the State
did not introduce Kearney’s 252 Statement
into evidence until after she left the court-
room and was no longer subject to cross-
examination. McGhee contended that the
State could have introduced Kearney’s 252
Statement during her testimony if the proper
evidentiary foundation had been laid, but it
5. McGhee was sentenced to one year of proba-

tion, a probation fee of $75, a crime fee of $55,
and anger management assessment. As a condi-

117

chose not to seek its admission until after
Kearney left the courtroom.

McGhee argued that Kearney provided in-
consistent testimony as she testified on direct
examination that she felt threatened but ac-
knowledged on cross-examination that she
was not afraid. McGhee maintained that
Kearney’s acknowledgment corroborated his
defense that he did not threaten her.
McGhee asserted that Kearney’s lack of fear
was relevant because it had a tendency to
make it more probable that McGhee did not
threaten her, as she did not act like a person
who felt threatened,

Additionally, McGhee argued that Kear-
ney’s acknowledgment that she was not
afraid was relevant because the outcome of
the case depended on the credibility of the
only two witnesses who testified. McGhee
contended that he relied on Kearney’s testi-
mony that she was not afraid to establish
that reasonable doubt existed as to whether
he committed terroristic threatening in the
second degree. According to McGhee, when
the prosecutor sought to read Kearney’s 252
Statement in closing argument, the prosecu-
tor was concerned about Kearney’s credibili-
ty and not about “fairness to the defense.”
McGhee asserted that the district court com-
mitted plain error when it admitted Kear-
ney’s 252 Statement into evidence.

In its answering brief, the State contend-
ed that McGhee waived any objection to the
introduction of Kearney’s 252 Statement be-
cause he consented to the prosecutor's
reading of the statement during closing ar-
gument. The State also argued that the in-
troduction of Kearney’s 252 Statement that
she was afraid was harmless beyond a rea-
sonable doubt because it was irrelevant to
establishing the elements of terroristic
threatening. The State emphasized that “a
yictim’s subjective fear or lack of fear in re-
sponse to a threat is not in itself relevant
to whether the threat is a true threat” and
that the determinative question was wheth-
er a reasonable trier of fact might fairly
conclude that McGhee uttered his threats in

tion of probation, McGhee was required to stay
away from Kearney and Alley Cat.

118

reckless disregard of the risk of terrorizing
another person.

The State also argued that Kearney’s ac-
knowledgment that she was not afraid of
McGhee’s threats only indicated that she did
not fear bodily injury or death and had noth-
ing to do with whether Kearney believed that
McGhee would have carried out those
threats. Further, even if Kearney’s subjec-
tive fear or lack of fear was a tangential
issue, the State contended that Kearney’s
252 Statement was cumulative of her testimo-
ny that she felt threatened by McGhee’s
threats. The State concluded that if the evi-
dence was considered in the most favorable
light to McGhee, any consideration of the 252
Statement could not have contributed to
McGhee’s conviction,

In a summary disposition order, the ICA
affirmed the district court’s judgment. State
y. McGhee, No. CAAP-14-0001217, 2015 WL
6452678 (Haw. Ct. App, Oct. 28, 2015). The
ICA explained that it was not convinced that
the 252 Statement was admitted into evi-
dence or intended to be treated as evidence.
Id, at *2. The ICA found that the State’s
offer to read Kearney’s 252 Statement was
not, in context, an offer to introduce evi-
dence, since the statement contradicted
Kearney’s testimony that she felt she could
calm McGhee down, Id. Rather, the ICA
found that the prosecutor wanted to disclose
Kearney’s prior statement, which was consis-
tent with the defense’s cross-examination,
out of an abundance of caution, Id, The ICA
also noted that the district court did not issue
a ruling admitting the 252 Statement into
evidence, nor did the district court mention
the 252 Statement any further. Id, Thus, the
ICA concluded that in looking at the closing
argument exchange in context, it did not
appear that the 252 Statement was admitted
or meant to be treated as evidence. Id,

The ICA alternatively concluded that, even
if the 252 Statement was admitted into evi-
dence or intended to be treated as evidence,
the substance of the statement was not rele-
vant to the issues at trial. Id, The ICA
reasoned that terroristic threatening does
not require proof of actual fear. Id. Further,
the ICA determined that the 252 Statement
could not have contributed to McGhee’s con-
viction because Kearney had already testified
on direct examination that she felt threat-

ened but went out to meet McGhee anyway.
Id. Since the 252 Statement did not add to
Kearney’s credibility and arguably detracted
from it, the ICA concluded that any commit-
ted error was harmless. Id,

Chief Judge Nakamura dissented, deter-
mining that the prosecutor committed prose-
eutorial misconduct by referring to the 252
Statement, which had not been admitted into
evidence. Id. at *3 (Nakamura, C.J., dissent-
ing). The dissent pointed out that the prose-
cutor twice mentioned the contents of the 252
Statement before requesting to read it and
although defense counsel did not object to
the prosecutor’s reading of it, the district
court committed error when it received and
considered the statement, Id.

The dissent also rejected the prosecutor’s
explanation that the 252 Statement was ref-
erenced “in fairness to the defense,” noting
that the statement actually benefited the
State. Id. The dissent noted that the 252
Statement supported the State’s theory that
McGhee committed terroristic threatening,
contradicted Kearney’s testimony on cross-
examination that she was not afraid of
McGhee, and diminished the effect of the
defense’s cross-examination of Kearney. Id.
Since the case depended on the credibility of
Kearney and McGhee, the only two witnesses
who testified at trial, Chief Judge Nakamura
concluded that the improper introduction of
the non-admitted evidence enhanced Kear-
ney’s credibility and “prejudicially affected
McGhee’s substantial rights.” Id, Thus, the
dissent would have vacated McGhee’s convic-
tion and remanded the case for a new trial.
Id,

Il, DISCUSSION

In his application for writ of certiorari,
McGhee argues that the ICA gravely erred
in concluding that the district court did not
commit plain error when it allowed the pros-
ecutor in closing argument to read Kearney’s
252 Statement, which had not been admitted
into evidence. McGhee contends that the im-
proper introduction of the 252 Statement de-
prived him of his right to confront and cross-
examine Kearney. McGhee also asserts that
Kearney’s 252 Statement was inadmissible
testimonial hearsay, and because he had no

opportunity to question Kearney about the
252 Statement, its introduction during closing
argument affected his substantial rights, In
addition, McGhee urges this court to adopt
the reasoning of Chief Judge Nakamura’s
dissent in the ICA decision.

A. The Reading of Kearney’s 252 State-
ment Was Improper.

Hl During rebuttal closing argument, the
prosecutor informed the district court that
Kearney made a 252 Statement in which she
stated, “At that time I was afraid and call the
police.” The 252 Statement was being refer-
enced, according to the prosecutor, because
“the defense started asking about that but
didn’t finish laying the foundation for it.”
However, the record does not show that the
defense had begun asking about the 252
Statement or had even mentioned it during
its cross-examination of Kearney. In any
event, regardless of the prosecutor’s stated
benevolent intentions, the 252 Statement had
not been admitted into evidence,

HM We have frequently stated that dur-
ing closing argument, a prosecutor is “per-
mitted to draw reasonable inferences from
the evidence and wide latitude is allowed in
discussing the evidence.” State v. Nofoa, 185
Hawai'i 220, 228, 849 P.8d 327, 885 (2015)
(quoting State v, Clark, 88 Hawai'i 289, 304,
926 P.2d 194, 209 (1996)); State v. Basham,
182 Hawai'i 97, 112, 819 P.8d 1105, 1120
(2014) (quoting Clark, 88 Hawai'i at 304, 926
P.2d at 209). Thus, it is “within the bounds of
legitimate argument for prosecutors [as well
as the defense] to state, discuss, and com-
ment on the evidence as well as to draw all
reasonable inferences from the evidence.”
State v. Quitog, 85 Hawai'i 128, 145, 988 P.2d
559, 576 (1997) (emphasis added) (quoting
Clark, 83 Hawai'i at 804, 926 P.2d at 209),
The scope of argument, therefore, “must be
consistent with the evidence and marked by
the fairness that should characterize all of
the prosecutor’s conduct.” State v. Rogan, 91
Hawai'i 405, 418, 984 P.2d 1281, 1239 (1999),

HM “Closing arguments are not the place
to introduce new evidence outside the safe-
guards of the Hawai‘i Rules of Evidence.”
Basham, 182 Hawai'i at 118, 819 P.8d at 1121
(citing State v. Yip, 92 Hawai'i 98, 111, 987
P.2d 996, 1009 (App. 1999) (“In closing argu-

119

ments, it is improper to refer to evidence
which is not in the record or has been exclud-
ed by the court.”)), In Basham, we noted that
a defendant’s fundamental right to confront
the State’s evidence may be compromised
when a fact not presented at trial is refer-
enced by the prosecutor during closing argu-
ment. Id, at 118, 819 P.8d at 1126, In State v.
Tuua, we held that the prosecutor “did not
draw legitimate inferences from the testimo-
ny” and improperly went beyond the record
in discussing the consequences of the jury’s
verdict, 125 Hawai'i 10, 14, 250 P.8d 278, 277
(2011), Recently, in Nofoa, we held that the
circuit court abused its discretion when it
permitted the prosecutor to present to the
jury a fact not in evidence that resulted in
substantial prejudice to the defendant, 135
Hawai'i at 228, 849 P.8d at 835. We observed
that “[t]he timing of the introduction of the
fact” in closing argument precluded the de-
fendant from confronting it because “at that
point defense counsel has no opportunity to
contest or clarify what the prosecutor has
said.” Id, at 229-80, 349 P.8d at 336-37.

In this case, the ICA determined that the
offer by the prosecution to read the 252
Statement was not, in context, an offer to
introduce evidence. State _v. McGhee, No.
CAAP-14-0001217, 2015 WL 6452678, at *2
(Haw, Ct, App. Oct. 28, 2015), The ICA noted
that the district court did not rule that the
statement was admitted into evidence and
did not mention it further. Id. Thus, the ICA
concluded that “taking the exchange in con-
text, it does not appear the statement was
admitted or meant to be treated as evi-
dence.” Id.

TM However, it is of no consequence
whether the 252 Statement was admitted as
evidence by the district court in closing argu-
ment or meant to be treated as evidence. Nor
is the propriety of disclosure of a fact not in
evidence during closing argument dependent
upon the intentions of the prosecutor, Un-
equivocally, a counsel’s closing argument is
not evidence, Quitog, 85 Hawaii at 144, 938
P.2d at 575, and closing argument is not the
time in trial to introduce new evidence, Bas-
ham, 182 Hawaii at 118, 319 P.8d at 1121
(citing Yip, 92 Hawai‘i at 111, 987 P.2d at
1009). Therefore, the district court could not

120

have permitted the prosecutor’s statement in
closing argument to be admitted or treated
as evidence.

The ICA instead should have determined
whether the prosecutor’s disclosure of the
252 Statement was within the bounds of le-
gitimate closing argument to state, discuss,
and comment upon. Indisputably, the 252
Statement was not admitted into evidence
during the evidentiary phase of trial. Fur-
ther, the contents of the 252 Statement could
not have been reasonably inferred from the
evidence that had been introduced at trial.
Quitog, 85 Hawai'i at 145, 938 P.2d at 576
(citing Clark, 88 Hawai'i at 304, 926 P.2d at
209), Therefore, the district court erred in
permitting the prosecutor to reference and
yead the 252 Statement, as the statement
was clearly outside the bounds of legitimate
closing argument.$ Id., 988 P.2d at 576.

B. The 252 Statement Was Relevant to
the Issues at Trial.

I The ICA alternatively concluded that
the 252 Statement was irrelevant to the is-
sues at trial even if the statement was treat-
ed or admitted as evidence. State v. McGhee,
No, CAAP-14-0001217, 2015 WL 6452678, at
*2 (Haw. Ot. App. Oct. 28, 2015). The ICA
reasoned that “[t]he crime of Terroristic
Threatening does not require proof that the
victim was actually placed in fear by the
statements of the defendant.” Id. (citing
State v. Chung, 75 Haw. 398, 418, 862 P.2d
1068, 1071 (1998) (quoting State v. Nakachi, 7
Haw. App. 28, 82, 742 P.2d 888, 391 (1987))
(‘Actual terrorization is not a material ele-
ment of the offense of terroristic threaten-
ing.”)), The State similarly contended that
the prosecutor’s reference in closing argu-
ment to Kearney’s 252 Statement that she

6. Part C addresses the potential prejudice of ref-
erencing and reading the 252 Statement.

7. In a terroristic threatening prosecution, the
State must prove beyond a reasonable doubt that
a remark threatening bodily injury constitutes a
“true threat” such that it was “objectively capa-
ble of inducing a reasonable fear of bodily injury
in the person at whom the threat was directed
and who was aware of the circumstances under
which the remark[] [was] uttered,” because
those circumstances indicate that the threat was
“so unequivocal, unconditional, immediate[,] and
specific as to the person threatened, [that it]
convey[ed] a gravity of purpose and imminent

was afraid was harmless because it was irrel-
evant to establishing the material elements of
terroristic threatening. The State maintained
that “a victim’s subjective fear or lack of fear
in response to a threat is not in itself rele-
vant.”

While it is true that the court in Nakachi
stated that actual fear is not a material ele-
ment of terroristic threatening, the court
went on to state that actual terrorization is,
nevertheless, “evidence of the occurrence of
the material elements.” 7 Haw. App. at 32,
742 P.2d at 391 (emphasis added) (“Actual
terrorization is not a material element al-
though it is evidence of the occurrence of the
material elements.”). The Nakachi court ex-
plained that “[t]he question is whether upon
the evidence a reasonable jury might fairly
conclude that [the defendant] uttered his
threats in reckless disregard of the risk of
terrorizing [the complainants].” Id., 742 P.2d
at 892 (citing State v. Halemanu, 3 Haw.
App. 800, 304, 650 P.2d 687, 591 (1982),

Ts Thus, 2 complainant’s fear caused
by a defendant’s words or conduct is relevant
evidence in a prosecution of terroristic
threatening, as such fear may be circumstan-
tial evidence that the utterance or conduct (1)
was a “true threat,” or (2) was intended to
terrorize or in reckless disregard of the risk
of terrorizing another person. Id., 742 P.2d at
391-92.8 By the same token, a complainant’s
lack of fear may be circumstantial evidence
that the defendant’s words or conduct did not
constitute a “true threat” or that the defen-
dant did not act with the requisite state of
mind.

HI In this case, contrary to the ICA’s
holding and the State’s argument, the fear

prospect of execution.” State v. Valdivia, 95 Ha-
wai'i 465, 476, 24 P.3d 661, 672 (2001) (third
alteration in original) (quoting Chung, 75 Haw.
at 416-17, 862 P.2d at 1073).

8. Relatedly, this court has noted that a “threat”
in the context of robbery statutes “may be proven
and often must be proven by circumstantial evi-
dence and reasonable inferences to be drawn
therefrom.” State v. luli, 101 Hawai'i 196, 207,
65 P.3d 143, 154 (2003) (quoting Halemanu, 3
Haw. App. at 305, 650 P.2d at 592) (relying in
part on the complaining witness's testimony that
he felt threatened and fearful to conclude that
there was a “threat”),

Kearney referenced in her 252 Statement
was relevant as circumstantial evidence to
proving that McGhee’s words or conduct con-
stituted a “true threat” and that McGhee
acted with reckless disregard of the risk of
terrorizing Kearney, When the prosecutor
referenced in closing argument Kearney’s
252 Statement that she was afraid of McGhee
and called the police, the statement, had it
been properly admitted as evidence during
the evidentiary stage of trial, would have
corroborated Kearney’s testimony on direct
examination that she felt threatened and
would have mitigated the effect of her testi-
mony on cross-examination that she was not
afraid. Thus, the existence of Kearney’s fear
made it more likely that McGhee engaged in
behavior constituting terroristic threatening
in the second degree and was, therefore,
relevant to the issues at trial. Consequently,
the ICA erred in concluding that even if the
252 Statement was admitted or treated as
evidence it was irrelevant to the issues at
trial. This error contributed to the ICA in-
correctly assessing the effect of the 252
Statement upon the evidence adduced at tri-
al, which we next consider.

C. The Error Violated McGhee’s Sub-
stantial Rights.

Hs An improper statement by the
prosecutor in closing argument warrants a
new trial if “there is a reasonable possibility
that the error complained of might have con-
tributed to the conviction.” State v. Tuua, 125
Hawai'i 10, 16, 250 P.8d 278, 279 (2011) (quot-
ing State v. Hauge, 103 Hawaii 38, 47, 79
P.3d 181, 140 (2008)). To assess whether a
prosecutor’s improper statement in closing
argument was harmless beyond a reasonable
doubt, we evaluate three factors: “(1) the

9, We note that while actual terrorization is not
required to prove the terroristic threatening of-
fense, this court’s later decisions provide that
constitutional considerations require that a “true
threat” be made. Valdivia, 95 Hawai'i at 476, 24
P.3d at 672. Consequently, the Nakachi formula-
tion would appear to create the potential for
confusion, as on the one hand, actual terroriza-
tion is not required to prove the offense, but on
the other hand, a “true threat” must be demon-
strated, requiring the prosecution to prove that
the defendant’s words or conduct “was objective-
ly capable of inducing a reasonable fear of bodily
injury in the person at whom the threat was
directed and who was aware of the circum-

121

nature of the conduct; (2) the promptness of
a curative instruction; and (8) the strength or
weakness of the evidence against the defen-
dant.” Id, at 15-16, 250 P.8d at 278-79 (quot-
ing State v. Mainaaupo, 117 Hawai'i 235, 252,
178 P.8d 1, 18 (2008)); State v. Barrios, 189
Hawai'i 821, 329, 389 P.éd 916, 924 (2016).

1, Nature of the Conduct

HE This court evaluates the level of
the misconduct in determining whether the
first factor favors holding that an improper
statement was harmless. Barrios, 189 Hawai'i
at 880, 889 P.8d at 925; see Tuna, 125 Hawai'i
at 16, 250 P.8d at 279 (citing State v. Maluia,
107 Hawai'i 20, 27, 108 P.8d 974, 981 (2005).
As discussed, the prosecutor improperly ref-
erenced and read in closing argument Kear-
ney’s 252 Statement, which stated that at the
time of the incident, Kearney was afraid and
called the police. The 252 Statement was not
admitted into evidence, and its contents were
not reasonably inferred from the evidence
that had been presented.

As the basis for the disclosure of the 252
Statement, the prosecutor informed the court
that it was necessary to point out that the
defense started to impeach Kearney with her
previous statement that she was afraid,
which the prosecutor believed was in refer-
ence to Kearney’s 252 Statement. However,
the record indicates that the defense did not,
reference the 252 Statement during its cross-
examination of Kearney.

The 252 Statement stating that Kearney
was afraid was referenced four times during
the prosecutor’s rebuttal closing argument.
Prior to the statement being read, the dis-
trict court went so far as to confirm with the
prosecutor that the 252 Statement to which

stances under which the remark[] [was] ut-
tered.” Id. 24 P.3d at 672. Thus, evidence as to
the complainant's reaction to the threat is a
relevant consideration as to the objective capabil-
ity assessment and in evaluating whether the
threat was “'‘so unequivocal, unconditional, im-
mediate[,] and specific as to the person threat-
ened, [that it] convey[ed] a gravity of purpose
and imminent prospect of execution.’ Id,, 24
P.3d at 672 (first alteration in original) (quoting
Chung, 75 Haw. at 416-17, 862 P.2d at 1073).
Courts should therefore exercise caution in ap-
plying or instructing upon the Nakachi formula-
tion,

122

the prosecutor was referring indicated that
Kearney was afraid. Then, immediately after
the prosecutor read the 252 Statement, the
district court rendered its verdict explaining
that “this is a matter of credibility and I do
opt to believe the version of the complaining
witness.”

Kearney’s 252 Statement was unquestion-
ably relevant to establishing the offense of
terroristic threatening as it could have been
considered as circumstantial evidence that
McGhee’s words or conduct resulted in a
“true threat” and that McGhee acted with
reckless disregard of the risk of terrorizing
Kearney. On this record, it therefore cannot
be said that McGhee was not prejudiced by
the reading of the 252 Statement in rebuttal
closing argument,

In addition, the prejudice was exacerbated
by McGhee’s inability to confront and cross-
examine Kearney regarding her 252 State-
ment because of the timing of the prosecu-
tor’s disclosure, which was made during clos-
ing argument. Accordingly, the first factor
weighs in favor of holding that the error was
not harmless beyond a reasonable doubt.

2, Promptness of a Curative Instruction

Given the absence of a jury in this case,
the presence or absence of a curative instruc-
tion is inapposite. Instead, a more appropri-
ate inquiry is whether this court can con-
clude, based on the relevant circumstances,
that the district court disregarded or did not
consider the 252 Statement. Initially, it is
noted that the prosecutor twice informed the
district court that the 252 Statement was not,
in evidence, and the court did not foreclose
the prosecutor from further discussing the
statement. Instead, the district court asked
about the 252 Statement and then verified
through the prosecutor the substance of the
252 Statement. It was only at this point that
the prosecutor asked about reading the 252
Statement, which the court facilitated by (1)
not denying the prosecutor’s request to read
the statement, (2) obtaining the defense’s
approval for the statement to be read, and
(8) then allowing the prosecutor to read the
statement. After the statement was read, the
district court did not state on the record that,
it would disregard or not consider the 252
Statement in evaluating the evidence and
thereupon proceeded to render its verdict.

Under such circumstances, it cannot be
concluded that the district court disregarded
or did not consider the 252 Statement or that
McGhee was not prejudiced by the reading of
the statement. Consequently, the second fac-
tor weighs in favor of a determination that
the improper reference to the 252 Statement.
was not harmless beyond a reasonable doubt.

8. The Strength or Weakness
of the Evidence

“Tn close cases involving the credibility of
witnesses, particularly where there are no
disinterested witnesses or other corroborat-
ing evidence, this court has been reluctant to
hold improper statements harmless.” Tuua,
125 Hawaii at 17, 250 P.8d at 280, Here, the
evidence at trial consisted only of the testi-
mony of Kearney and McGhee, “each of
whom arguably had a potential interest or
bias.” Id,, 250 P.8d at 280. The State’s evi-
dence pertaining to the terroristic threaten-
ing offense depended on Kearney’s version of
events, which conflicted with McGhee’s de-
scription of the incident. Therefore, the cred-
ibility of Kearney and McGhee was pivotal.

On direct examination, Kearney stated
that she felt threatened, but on cross-exami-
nation, she testified that she was not afraid.
Thus, prior to the recitation of Kearney’s 252
Statement, which indicated that she called
the police because she was afraid, the trial
court faced directly conflicting statements
from Kearney. The prosecution’s reading of
Kearney’s 252 Statement during its rebuttal
closing argument directly supported Kear-
ney’s testimony on direct examination and
conflicted with her testimony on cross-exami-
nation, effectively tipping the scale in favor
of her testimony on direct examination and
enhancing her credibility. Because the 252
Statement directly supported Kearney’s tes-
timony on direct examination, it bolstered
the State’s case. In addition, the 252 State-
ment countered the effect of Kearney’s ac-
knowledgment on cross-examination that she
was not afraid, weakening the defense’s case.
Thus, the reading of the 252 Statement prej-
udicially affected McGhee’s substantial
rights. Further, the defense had no opportu-
nity to cross-examine Kearney regarding her

252 Statement and no ability to rebut its
assertions,

The third factor therefore weighs in favor
of a conclusion that the error was not harm-
less beyond a reasonable doubt.

4, Application of Factors

An evaluation of all three factors
indicates that the prosecutor’s improper
reading of Kearney’s 252 Statement was not
harmless beyond a reasonable doubt. Conse-
quently, there is a reasonable possibility that
the misconduct may have contributed to
McGhee’s conviction, and the conviction must
therefore be vacated.!°

Il. CONCLUSION

During closing argument, it was improper
for the prosecutor to request, and for the
district court to allow, the reading of Kear-
ney’s 252 Statement, which had not been
admitted into evidence. The 252 Statement,
was clearly relevant to proving the terroristie
threatening offense; the State’s case was en-
hanced by the 252 Statement; and the de-
fense’s case was significantly prejudiced.
Thus, the error in this case was not harmless
beyond a reasonable doubt. Accordingly, the
district court's judgment of conviction and
the ICA’s judgment on appeal are vacated,
and the case is remanded to the district court
for further proceedings.

10. The State contended in its answering brief
that McGhee waived any objection to the reading
of the 252 Statement because he did not object at
trial. However, “[pllain errors or defects affect-
ing substantial rights may be noticed although
they were not brought to the attention of the
court.” Hawai'i Rules of Penal Procedure Rule
52(b) (1977). Therefore, even though there was
no objection to the error at trial, this court “may
recognize plain error when the error committed

123

398 P.3d 712
STATE of Hawai‘i, Respondent/Plaintiff-
Appellee,
ve
Semisi NELSON, Respondent/Defendant-
Appellee,
and
International Fidelity Insurance Compa-
ny, Petitioner/Real Party In Interest/Ap-
pellant. (CAAP NO, 12-0001040; CR. NO.
05-1-2446)
and
State of Hawai‘i, Respondent/Plaintiff-
Appellee,
ve
Karen Teruya, Respondent/Defendant-
Appellee,
and
International Fidelity Insurance Compa-
ny, Petitioner/Real Party In Interest/Ap-
pellant. (CAAP NO. 12-0001041; CR. NO.
02-1-1718)
and

State of Hawai'i, Respondent/Plaintiff-
Appellee,
ve
Conrado Cabigon, Jr.,
Respondent/Defendant-Appellee,
and

International Fidelity Insurance Compa-
ny, Petitioner/Real Party In Interest/Ap-
pellant. (CAAP NO, 12-0001042; CR. NO.
8-1-1192)

and

State of Hawai‘i, Respondent/Plaintiff-
Appellee,
ve

Steve D, Ferraris, Respondent/Defendant-
Appellee,

affects substantial rights of the defendant.” State
y, Staley, 91 Hawai'i 275, 282, 982 P.2d 904, 911
(1999) (quoting State v. Cullen, 86 Hawai'i 1, 8,
946 P.2d 955, 962 (1997). The district court in
this case plainly erred when it allowed the prose-
cutor to read in closing argument Kearney's 252
Statement, which was not in evidence, This error
affected McGhee's substantial rights because it
severely compromised McGhee's right to a fair
trial.

124

and

International Fidelity Insurance Compa-
ny, Petitioner/Real Party In Interest/Ap-
pellant. (CAAP No. 12-0001043; CR. NO.
1-1-0806)

and
State of Hawai‘i, Respondent/Plaintiff-
Appellee,
ve
David K. Berry, Respondent/Defendant-
Appellee,
and

International Fidelity Insurance Compa-
ny, Petitioner/Real Party In Interest/Ap-
pellant. (CAAP NO. 12-0001044; CR. NO.
10-1-1289)

and
State of Hawai‘i, Respondent/Plaintiff-
Appellee,
v
Justin Nakamura, Respondent/Defendant-
Appellee,
and

International Fidelity Insurance Compa-
ny, Petitioner/Real Party In Interest/Ap-
pellant. (CAAP NO. 12-0001045; CR. NO.
09-1-1364)

and
State of Hawai‘i, Respondent/Plaintiff-
Appellee,
ve
Cedro Muna, Respondent/Defendant-
Appellee,
and

International Fidelity Insurance Compa-
ny, Petitioner/Real Party In Interest/Ap-
pellant. (CAAP NO. 12-0001046; CR. NO.
09-1-0616)

and
State of Hawai‘i, Respondent/Plaintiff-
Appellee,
ve
John Paul Luna, Respondent/Defendant-
Appellee,
and

International Fidelity Insurance Compa-
ny, Petitioner/Real Party In Interest/Ap-
pellant. (CAAP NO. 12-0001047; CR. NO.
10-1-0621)

SCWC-12-0001040
SCWC-12-0001041
SCWC-12-0001042
SCWC-12-0001043
SCWC-12-0001044
SCWC-12-0001045
SCWC-12-0001046
SCWC-12-0001047
SCWC-12-0001040

Supreme Court of Hawai‘.

JUNE 21, 2017

Matson Kelley, Wailuku and Michael C.
Carroll, Honolulu, for petitioner.

Brian R. Vincent for respondent

126 P|

RECKTENWALD, C.J., NAKAYAMA,
McKENNA, POLLACK, JJ., AND
CIRCUIT COURT JUDGE NAKASONE,
IN PLACE OF WILSON, J., RECUSED

OPINION OF THE COURT BY
McKENNA, J.
I. Introduction

In eight separate criminal cases, Real
Party in Interest-Appellant/Petitioner, Inter-
national Fidelity Insurance Company (“Inter-
national Fidelity” or “International”) had is-
sued eight separate powers of attorney
(“POA[s]”) to either Ida Peppers (“Peppers”)
or Charles Fisher (“Fisher”) to execute a bail
bond on behalf of a defendant in each case.
In each criminal case, the bonded defendant
failed to appear as required, and a Judgment
and Order of Forfeiture of Bail Bond (“Judg-
ment and Order of Forfeiture” or “forfeiture
judgment”) was entered in the Circuit Court
of the First Cireuit (“cirenit court”),

Within days of the entry of the forfeiture
judgments, the court provided notice of those
judgments to the surety listed on the
bonds—either Peppers of Freedom Bail
Bond (“FBB”) or Fisher of AAA Local Bail
Bonds (“AAA”), The court later issued let-
ters to International Fidelity informing it of
each Judgment and Order of Forfeiture and
demanding payment, Over thirty days after
International Fidelity received those let-
ters—in fact, in each of the cases except in
State v. Ferraris, Cr. No. 11-1-0806, it was
several hundred days later—International
Fidelity moved to set aside each of the forfei-
ture judgments, stating that it did not re-
ceive notice of the forfeiture judgments as
required under HRS § 804-51 (2014),

Upon consolidating the motions, the cireuit,
court denied them, concluding that the re-
quirements of HRS § 804-51 were satisfied
when notice of the forfeiture judgments had
been issued to Peppers of FBB or Fisher of
AAA. The court also ruled that International
Fidelity nevertheless received notice of the
forfeiture judgments when it had received
the Judiciary’s letters, and that International
Fidelity’s motions to set aside were untimely.
1, State v. Teruya, Cr. No. 02-1-1718; State _v.

Nelson, Cr. No, 05-1-2446; State v. Cabigon, Cr.
No, 08-1-1192; State v. Muna, Cr. No, 09-1-0616;

In a published opinion, the ICA affirmed
the circuit court’s “Findings of Fact, Con-
clusions of Law, and Order Denying Inter-
national Fidelity Insurance Company’s Con-
solidated Motions to Set Aside Judgment
Entered Against International Fidelity In-
surance Company” based on the circuit
court’s conclusion that due process and the
requirements of HRS § 804-51 were satis-
fied when notice of the forfeiture judgments
had been issued to Peppers or Fisher, The
ICA did not address whether the State's
letters to Fidelity Insurance satisfied the
statute’s notice requirements. See State _v,
Nelson, 189 Hawai'i 147, 164 n.18, 884 P.8d
928, 940 n.18 (App. 2016).

International Fidelity timely filed an Ap-
plication for a Writ of Certiorari (“Applica-
tion”) on December 28, 2016, For the follow-
ing reasons, the ICA correctly determined
that notice to International Fidelity of the
forfeiture judgments was not required by
due process or under HRS § 804-51, Specifi-
cally, HRS § 804-51 requires that notice be
issued to the “surety on the bond,” and the
bonds at issue identify only FBB or AAA—
and not International Fidelity—where the
surety is required to be named pursuant to
Criminal Administrative Order No. 2,1, Addi-
tionally, to the extent the forfeiture judg-
ments may be ambiguous, we clarify that the
forfeiture judgments were entered “against
the ... surety or sureties on the bond,” ie.,
Peppers of FBB or Fisher of AAA.

Il, Background

To provide context to the proceedings be-
low, we begin with a general overview of the
bail process and observations regarding the
at-issue bail bonds and powers of attorney,
before discussing the cireuit court and ICA
proceedings and decisions in this consolidat-
ed matter,

A. Bail Process and Governing Laws
Bail, or the giving of bail, is “the signing of
the recognizance by the defendant and the
defendant’s surety or sureties, conditioned
for the appearance of the defendant at the
session of a court of competent jurisdiction to
be named in the condition, and to abide by

State v. Nakamura, Cr. No. 09-1-1364; State v.
Luna, Cr. No, 10-1-0621; State v. Berry, Cr. No.
10-1-1289; State v. Ferraris, Cr. No. 11-1-0306.

the judgment of the court.” HRS § 804-1
(2014). The judge? admitting a defendant to
bail has the discretion to set the amount of
bail; in doing so, the judge considers both
“the punishment to be inflicted on conviction,
and the pecuniary circumstances of the party
accused.” HRS § 804-9 (2014); Haw. Const.
art I, § 12 (“Excessive bail shall not be re-
quired.... The court may dispense with bail
if reasonably satisfied that the defendant or
witness will appear when directed, except for
a defendant charged with an offense punisha-
ble by life imprisonment.”).

2, Depending on the punishment for the offense
charged, a judge, justice of a court of record,
including a district judge, or a sheriff, sheriff's
deputy, chief of police or any person named by
the chief of police, “shall be competent to admit
[an] accused to bail.” HRS § 804-5 (2014).

3. (a) The amount of compensation which may
be collected on any bail bond ... by one or more
persons acting as sureties thereon shall not ex-
ceed a onel-]time only fee from five to fifteen per
cent of the amount thereof, but need not be less
than $50 in any event; provided that additional
fess, subject to subsection (b), may be collected
for:

(1) The posting of a surety insurance bond
as defined in section 431:1-201(1);
(2) The posting of a bond on behalf of a
person whose case is pending appeal; or
(3) The posting of a bond in which more
than one year has passed since the filing
thereof,
(b) The compensation collected pursuant to
sections 804-62(a)(2) and (a)(3), in any year
after the first year, may be collected annually,
and:
(1). Shall be charged on a prorated basis;

and
(2) Shall not exceed the percentage
charged in the first year.

HRS § 804-62 (2014).

4. Asa present practical matter, the percentage of
bail bondspersons who are self-funded is likely
minimal due to a 1987 change in the law regard-
ing the deposit of security for bail bonds. Prior to
1987, bail bondspersons could use the same se-
curity for multiple bonds. See Bail Study, at 34
("The current law is ambiguous as to the assets
which should be maintained by a bondsman.
ELRS, § 804-10[*] appears to require only that a
bondsman have or be able to offer proof of assets
totaling twice the face value of the individual
bond posted. No provision is made for an accu-
mulation of assets to secure a large number of
outstanding bonds.”). In 1987, the legislature
clarified HRS chapter 804 to require a deposit of
separate unencumbered property interests to se-
cure each bail bond. See 1987 Haw. Sess. Laws
Act 139, § 9(3) at 315-16; HRS § 804-11.5(a),()
(2014) (‘‘Any person who is permitted to give bail

127

1. Registering the Purchase of a Bail
Bond from a Bail Bondsperson

A person charged with a crime may pur-
chase a bail bond from a professional bonds-
person for five to fifteen * percent of the total
amount of bail set. See Hawaii Crime Com-

mission, Study of Bail Forfeitures in Hawaii
8 (1984) (“Bail Study”). Bail bondspersons
who qualify as “sureties” are either self-
funded‘ or are licensed insurance producers
pursuant to HRS chapter 481, article 9A. See
HRS § 804-10.5(o)(2)-(8);5 HRS § 481:9A-
102 (“Insurance producer’ or ‘producer’

.+. may secure the bail bond by a deposit ... of
[cash, credit or debit card authorization, or un-
encumbered interests in personal or real proper-
ty].... For the purposes of this section, an unen-
cumbered interest in real property, stocks, or
bonds, means that the interest is not encumbered
by any lien or encumbrance or is not currently

being used as security for a bail bond.” (empha-
sis added).

* “No person shall be received as the surety for
the appearance of the party accused, who does
not own or possess property either real or per-
sonal within the State, to double the amount of
the bail bond....” HRS § 804-10 (1985).

5. Sureties; qualification. (a) In determining the
sufficiency of a surety or sureties, the court shall
consider the surety's or sureties’:

(1) Character;

(2) Reliability;

(3) Place of residence; and

(4) Financial and employment  circum-

stances,

(b) No person shall be {a] sufficient surety
who:

(1) Has been convicted of perjury for sub-

mitting a false statement under section

804.11-5;

(2) Does not satisfy the requirements of

section 804-11.5; or

(3) Does not satisfy the requirements of ar-

ticle 9A, chapter 431, if posting an insurance

bond as defined in section 431:1-210(1).
HRS § 804-10.5 (2014). In 2005, HRS § 804-
10.5 (1993) was in effect, and is therefore appli-
cable to the bond in Nelson, Cr. No. 05-1-2446.
As noted by the ICA, the textual difference be-
tween the 1993 and 2014 versions of HRS § 804-
10.5 is limited to a reference to “article 9” in-
stead of “article 9A.” See Nelson, 139 Hawai'i at
163 nll, 384 P.3d at 939 n.11. In 2005, HRS
chapter 431, article 9, concerned the licensing of
insurance adjusters, independent bill reviewers,
and limited service representatives. For the pur-
poses of the issues raised in this case, this does
not alter the scheme for the qualification of sure-
ties with respect to the Nelson bond,

128

means a person required to be licensed un-
der the laws of this State to sell, solicit, or
negotiate insurance.”). Unlike self-funded
bail bondspersons, bail bondspersons who are
licensed insurance producers do not have to
comply with single surety property require-
ments® or deposit any security with the
court’ if their bonds are guaranteed by a
surety insurer. See HRS § 481:1-202 (2005)
(“Insurer means every person engaged in the
business of making contracts of insurance
and includes reciprocal or interinsurance ex-
changes.”); HRS § 481:1-210(1) (defining
surety insurance); supra note 5 (quoting text
of HRS § 481:1-210(1)); HRS § 481:10F-101
(2005) (surety’s requirements deemed met by
surety insurer);* Bail Study, at 82 (citing
HRS § 481-636 (1976) (predecessor of HRS
§ 481:10F-101)).

“(T]he bonds[person] does not actually
post the bail with the court, but merely regis-

Surety insurance defined. Surety insurance in-
cludes:
(1) Bail bond insurance, which is a guarantee
that any person, in or in connection with any
proceedings in any court, will:
(A) Attend in court when required, or
(B) Will obey the orders of judgment of the
court, as a condition to the release of the
person from confinement, and the execution
of bail bonds for
any such purpose. The making of property or
cash bail does not constitute the transacting
of bail bond insurance.
HRS § 431:1-210(1) (2005).

6. One surety sufficient; when. A single surety is
sufficient, if the surety offers cash, a credit or
debit card authorization, stocks, bonds, or real
property in accordance with section 804-11.5;
otherwise, there shall be two or more sureties.

HRS § 804-11 (2014).

7. Cash, credit and debit authorization, stocks,
bonds, or real property as security for bail. (a)
Any person who is permitted to give bail in
accordance with sections 804-7.4 may secure the
bail bond by a deposit, with the clerk of the
appropriate court, of:

(1) Cash or credit or debit card authoriza-
tion equal to the amount of the bail;

(2) The unencumbered interest in personal
property which as a marked value of not less
than the amount of the bail bond; or

(3) Deeds for real property:

(A) Situated in this State;

(B) Not exempt from attachment of execu-
tion under section 651-92;

(C) Owned by the person depositing the
bail; and

ters the bond purchase.” Bail Study, at 32.
From July 1, 2002 through June 9, 2010,
Criminal Administrative Order No. 2.1 was in
effect and outlined procedures for registering
or filing bail bonds. Requirements included:
(QD “felach and every bail bond shall conform
to the ‘Sample Standard Form for Bail
Bonds’ attached to this order”; (2) “{iJndivid-
uals and/or entities issuing bail bonds shall
be responsible for ensuring that all informa-
tion appearing on a bond is correct”; and (8)
“felach and every bail bond shall have at-
tached to it a power of attorney indicating
the insurance company that is insuring the
bond.” See Crim. Admin. Order No. 2.1 at D-
17A.

After Criminal Administrative Order No.
2.1 was rescinded on June 9, 2010, there
were no court rules or orders regarding bail
until July 1, 2011, when HRPP Rule 46(b)
took effect.

(D) Consisting of an unencumbered interest
the value of which is at least double the
amount of the bail bond.

HRS § 804-11.5 (2014).

8. Requirements deemed met by surety insurer.
Whenever by law or by rule of any court, public
official, or public body, a surety bond is required
or is permitted to be given, provided the bond is
otherwise proper and its conditions are guaran-
teed by an authorized surety insurer or by an
unauthorized surety insurer pursuant to article 8,
part II, the bond shall be approved and accepted
and shall be deemed to fulfill all requirements as
to number of sureties, residence or status of
sureties, and other similar requirements, and no
justification by the surety shail be necessary, For
the purpose of this section, surety bond shalll also
include a recognizance, obligation, stipulation or
undertaking.

HRS § 431:10F-101 (2014).

9, HRPP Rule 46(b) (2011) states:
(b) Bond.

‘A party seeking release on bail by posting
bond shall submit the bond in a form that
substantially complies with Form J annexed to
these rules. If a bail bond is secured by insur-
ance, a copy of the bail agent’s power of attor-
ney shall be attached to the bond, and shall be
supported by the affidavit or declaration of the
bail agent authorized to furnish bail for com-
pensation. The declaration or affidavit shall
identify the insurer, provide the agent’s and
insurer's license numbers, attest the agent and
the insurer are currently licensed and in good
standing with the Insurance Commissioner of
the State of Hawai'i, and attest the agent and
the insurer are in compliance with Hawai'i law
governing bail bonds.

2, Bond Forfeiture Provisions
By statute, the following language is
deemed to be set forth in each and every
bond or recognizance, whether actually set
forth in the bond or recognizance, or not:
Whenever the court, in any criminal
cause, forfeits any bond or recognizance
given in a criminal cause, the court shall
immediately enter up judgment in favor of
the State and against the principal or prin-
cipals and surety or sureties on the bond,
jointly and severally, for the full amount of
the penalty thereof, and shall cause execu-
tion to issue thereon immediately after the
expiration of thirty days from the date that
notice is given via personal service or certi-
fied mail, return receipt requested, to the
surety or sureties on the bond, of the entry
of the judgment in favor of the State,
unless before the expiration of thirty days
from the date that notice is given to the
surety or sureties on the bond of the entry
of the judgment in favor of the State, a
motion or application of the principal or
principals, surety or sureties, or any of
them, showing good cause why execution
should not issue upon the judgment, is
filed with the court, If the motion or appli-
cation, after a hearing held thereon, is
sustained, the court shall vacate the judg-
ment of forfeiture and, if the principal
surrenders or is surrendered pursuant to
section 804-14 or section 804-41, return the
bond or recognizance to the principal or
surety, whoever shall have given it, less
the amount of any cost, as established at
the hearing, incurred by the State as a
result of the nonappearance of the princi-
pal or other event on the basis of which the
court forfeited the bond or recognizance. If
the motion or application, after a hearing
held thereon, is overruled, execution shall
forthwith issue and shall not be stayed
unless the order overruling the motion or
application is appealed from as in the case
of a final judgment.
HRS § 804-51 (emphases added); id. (“This
section shall be considered to be set forth in
full in words and figures in, and to form a
part of, and to be included in, each and every
pond or recognizance given in a criminal
cause, whether actually set forth in the bond
or recognizance, or not.”).

129

B. Bail Bonds Filed in Cr. Nos. 02-1-1718,
5-1-2446, 8-1-1192, 09-1-0616, 09-1-
1364, 10-1-0621, 10-1-1289, and 11-1-0306

Except for the bail bond issued in State v.
Ferraris, Cr. No. 11-1-0306, each of the re-
maining seven bonds were issued between
October 27, 2005 and June 2, 2010, and were
therefore required to conform with the “Sam-
ple Standard Form for Bail Bonds” attached
to Criminal Administrative Order No. 2.1, as
that order was in effect from 2002 until June
9, 2010. The bond in Ferraris was issued on
March 8, 2011, after Criminal Administrative
Order No, 2.1 was rescinded, but before
HRPP Rule 46 was amended to provide pro-
cedures for the posting of bail bonds. In any
event, the Ferraris bond appears to also
conform to the “Sample Standard Form for
Bail Bonds” attached to Criminal Adminis-
trative Order No. 2.1.

The “Sample Standard Form for Bail
Bonds” requires that the surety be identified
at the top of the bail bond, together with the
surety’s address and telephone number. Pur-
suant to that requirement, the surety listed
on seven bail bonds is “Ida Peppers, Free-
dom Bail Bond,” where the bonds were
signed by either Peppers or Linda Del Rio
(‘Del Rio”), The surety listed on the remain-
ing bail bond is “AAA Local Bail Bonds,
Charles Fisher General Agent,” and signed
by Fisher. International Fidelity is not iden-
tified on any of the bail bonds.

Instead, International Fidelity had issued
the POAs that were attached to each of the
bail bonds. Each of the POAs consisted of a
pre-printed form that was filled in and signed
by an “executing agent” or “atty in fact.” The
pre-printed forms for each of the POAs were
identical except for that used in State v.
Nelson, Cr, No. 05-1-2446, The seven identi-
cal pre-printed forms read as follows:

KNOW ALL MEN BY THESE PRES-

ENTS, that INTERNATIONAL FIDELI-

TY INSURANCE COMPANY, a corpora-

tion duly organized and existing under the

laws of the State of New Jersey, has con-
stituted and appointed, and does hereby
constitute and appoint, [sic] its true and
lawful Attorney-in-Fact, with full power
and authority to sign the company’s name
and affix its corporate seal to, and deliver

130 |

on its behalf as surety, any and all obli-
gations as herein provided, and the execu-
tion of such obligations in pursuance of
these presents shall be as binding upon the
company as fully and to all intents and
purposes as if done by the regularly elect-
ed officers of said company at its home
office in their own proper person; and the
said company hereby ratifies and confirms
all and whatsoever its said Attorney-in-
Fact may lawfully do and perform in the
premises by virtue of these presents.
THIS POWER OF ATTORNEY IS VOID
IF ALTERED OR ERASED, THE OBLI-
GATION OF THE COMPANY SHALL
NOT EXCEED THE SUM OF [] THOU-
SAND ... AND MAY BE EXECUTED
FOR RECOGNIZANCE ON CRIMINAL
BAIL BONDS ONLY.... Authority of
such Attorney-in-Fact is limited to the exe-
eution of appearance bonds and cannot be
construed to guarantee defendant’s future
lawful conduct, adherence to travel limita-
tion, fines, restitution, payments or penal-
ties, or any other condition imposed by a
court not specifically related to court ap-
pearances, A separate Power of Attorney
must be attached to each bond executed.
The POA in Nelson reads:
KNOW ALL MEN BY THESE PRES-
ENTS, that INTERNATIONAL FIDELI-
TY INSURANCE CORPORATION, a
corporation duly organized and existing
under the laws of the State of New Jersey
has constituted and appointed, and does
hereby constitute and appoint, [sie !] its
true and lawful attorney-in-fact, with full
power and authority to sign the company’s
name and affix its corporate seal to, and
deliver on its behalf as surety, any and all
obligations as herein provided, and the ex-
ecution of such obligations in pursuance of
these presents shall be as binding upon the
company as fully and to all intents and
purposes as if done by the regularly elect-
ed officers of said company at its home
office in their own proper person; and the
said company hereby ratifies and confirms
all and whatsoever its said attorney-in-fact
may lawfully do and perform in the prem-
ises by virtue of these presents, THIS
10, There was a space provided in the text for the

insertion of the appointee’s name, but it was left
blank. The same error appears in the other POAs,

POWER OF ATTORNEY IS VOID IF
ALTERED OR ERASED, THE OBLI-
GATION OF THE COMPANY SHALL
NOT EXCEED THE SUM OF THIRTY
THOUSAND DOLLARS ($30,000.00)
AND MAY BE EXECUTED FOR RE-
COGNIZANCE ON CRIMINAL BAIL
BONDS ONLY.... The authority of such
attorney-in-fact is limited to appearance
bonds and cannot be construed to guaran-
tee for failure to provide payments, back
alimony payments, fines or wage law
claims.

Based on the contracts Peppers and Fisher
(through Bryan Nester (“Nester”), partner of
AAA) had with International Fidelity, Pep-
pers and Fisher were required to send imme-
diate notice to International of any forfei-
tures declared on any bonds written by them
that were guaranteed by International. Spe-
cifically, Peppers’s contract stated: “The Re-
tailer [Peppers] will send, immediately, no-
tice to the Company [International] of any
forfeitures declared on any bonds written by
him, since such may affect the Company.”
Similarly, Nester’s contract stated: “The Pro-
ducer [Nester and any subproducers, includ-
ing Fisher] will send immediately, notice to
International of any defaults, forfeitures, or
breaches declared on any bonds written by
or on behalf of Producer.”

C. Licenses of Bail Bondspersons and In-
ternational Fidelity

The circuit court found that at all times
relevant, Peppers, Del Rio, and Fisher were
registered producers for [International Fidel-
ity] in the State of Hawaii. Indeed, the rec-
ord contains the licensure certificates for
both Peppers and Del Rio, which were issued
by the Insurance Division of the Department
of Commerce and Consumer Affairs
(“DCCA”). The certificates identify Peppers
and Del Rio as “resident producers” of sure-
ty insurance. Although the record does not
contain a copy of Fisher's license, it was
represented in a court brief that at the time
of the subject bail transaction, Fisher was
“an appointed and authorized bail bond agent
in the State of Hawaii under the company

except there was no “blank space” for the inser-

tion of a name. Regardless, none of the parties
challenge the effectiveness of the POA,

AAA Local Bail Bonds.” " A “bail agent” is a
type of insurance producer. See HRS
§ 481:9N-101 (Supp. 2016).

‘The circuit court made no specific finding,
however, as to International Fidelity’s license
status. International Fidelity had consistent-
ly represented to the circuit court that it was
a “duly licensed and authorized surety in the
state of Hawaii,” but did not specify whether
it was a licensed insurance producer gov-
erned by HRS chapter 481, article 9A.

D. Circuit Court Proceedings

1, Issuance of Judgments and Orders of
Forfeiture

In each of the eight criminal cases, the
defendant failed to appear before the court
when required. The bail bond posted on be-
half of each defendant was therefore forfeit-
ed, and the circuit court entered a Judgment
and Order of Forfeiture in each case. The
language used in each forfeiture judgment
was similar, and substantially took one of the
following two forms, with relevant language
underlined. The first form was used in Nel-
son, Teruya, Cabigon, and Nakamura:

The above-entitled case having come ...
before the ... Judge of the above-entitled
court, on [said date], and the Defendant
having failed to appear or to be present on
the said date, and the Court, upon motion
of the State of Hawaii, having on said date
ordered and declared the forfeiture of the
bail bond filed and posted in this case,
executed by said Defendant, as principal,
and INTERNATIONAL FIDELITY IN-
SURANCE COMPANY (FREEDOM
BAIL BOND), through its agent and attor-
ney in fact, IDA PEPPERS, as surety, in
the sum of ...

NOW, THEREFORE, pursuant to the
foregoing order, IT IS HEREBY OR-
DERED, ADJUDGED AND DECREED
that the State of Hawaii does have and
recovers from the principal and the surety
above named, jointly and severally, the

11. A review of the DCCA’s insurance license da-
tabase confirms that both Charles R. Fisher and
AAA Local Bail Bonds were each at one time
licensed as a “resident producer” of surety insur-
ance. See_http://insurance.ehawaii.gov/hils/info/
301946/203113 | (Charles R. Fisher); _http://
insurance.ehawaii.gov/hils/info/300930/201841
(AAA Local Bail Bonds),

131

sum of ..., and that execution issue herein
according to law.
The second form was used in Ferraris, Muna,
Berry (where “this cause” is stated instead of
“this case”), and Luna (where “Charles Fish-
er” is stated instead of “Ida Peppers (Free-
dom Bail Bond)”):

The above-entitled case having come ...
before the ... Judge of the above-entitled
court, on [said date], and the Defendant
having failed to appear or to be present on
the said date, and the Court, upon motion
of the State of Hawai[‘]i, having on said
date ordered and declared the forfeiture of
the bail bond filed and posted in this case,
executed by said Defendant, as principal,
and INTERNATIONAL FIDELITY IN-
SURANCE COMPANY, through its agent
and_attorney in fact, IDA PEPPERS
(FREEDOM BAIL BOND), as surety, in
the sum of ...,

NOW, THEREFORE, pursuant to the
foregoing order, IT IS HEREBY OR-
DERED, ADJUDGED AND DECREED
that the State of Hawai[‘li does have and
recovers from the principal and the surety
above named, jointly and severally, the
sum of ..., and that execution issue herein
according to law.

In most of the cases, either FBB or AAA
filed a motion to set aside the forfeiture
judgments within thirty days of receiving
notice of the judgments.” The motions were
typically continued to allow the bond compa-
nies more time to locate the defendants. Ulti-
mately, none of the judgments were set
aside,

2. Letters Sent to International Fideli-
ty Subsequent to Entry of Judg-
ments and Orders of Forfeiture and
International Fidelity’s Motions to
Set Aside

Subsequent to the entry of Judgments and

Orders of Forfeiture and any continuances
that may have been granted to FBB or AAA
to locate defendants, letters were sent by the

12, A review of the record reveals that FBB did
not file motions to set aside in State v. Nakamu-
£a, Cr. No, 09-1-1364, and State v. Ferraris, Cr.
No, 11-1-0306, FBB filed an untimely motion to
set aside in State v. Berry, Cr, No, 10-1-1289.

132 a

Judiciary to International Fidelity by certi-
fied mail, return receipt requested. Each let-
ter’s subject line read, “Re: Notification of
Bail Bond Forfeiture,” and stated (or used
similar language):

To Whom It May Concern:

Pursuant to Section 804-51, Hawaii Re-
vised Statutes, judgment has been entered
on [date of relevant Judgment and Order
of Forfeiture] that bail of [relevant
amount] be forfeited in the following mat-
ter:

Case Number: [relevant case number]

Case Name: [relevant case name]

Name of Issuing General Agent: [Free-

dom Bail Bond or AAA Local Bail
Bonds]

Policy No.: [relevant “power number”

imprinted on Power of Attorney]

Our records indicate that payment is due
and owing. If payment is not immediately
received, appropriate legal action will be
taken, including but not limited to request-
ing the appropriate Court to determine
sufficiency of the surety and/or referring
the matter to the State of Hawaii’s Depart-
ment of the Attorney General to commence
collection actions. If you have any ques-
tions, please contact the Cashier’s Of
fice..

International Fidelity filed Motions to Set
Aside in each case beyond thirty days from
the date it received each of the Judiciary’s
letters. Specifically, in each case except Fer-
raris, International Fidelity’s motions were
filed several hundred days—approximately
one to three years—after the respective let-
ters regarding the Judgment and Order of
Forfeiture were sent.

8. Consolidated Motions and Circuit
Court’s Disposition
Upon International Fidelity’s motion, In-
ternational’s Motions to Set Aside filed in the
eight criminal cases were consolidated before
the Hon. Richard K, Perkins in the Circuit
Court of the First Circuit. International Fi-
delity asserted similar arguments in each

13. The purpose of this bill is to change the pres-
ent law by requiring that the courts give a writ-

ten notice to the bail_bondsma: ferred to as
the surety in Chapter 804, Hawe ‘evised Stat-

utes) upon forfeiture of any bail bond. A bail

case. Namely, that International Fidelity was
the “surety of record” according to the POAs
attached to the registered bail bonds, and
that it did not receive “[the] statutorily re-
quired notice of the entry of a judgment and
order of forfeiture of bail bond as required
under HRS § 804-51” in any of the cases,
Accordingly, it sought to set aside the Judg-
ments and Orders of Forfeiture “as against
International” because the circuit court
“lacked jurisdiction over International when
each of the judgments was entered” due to
the court’s failure to provide International
with the requisite notice. International Fidel-
ity also argued that it would otherwise be
deprived of “its rights under HRS § 804-51
and to due process.” Further, according to
International Fidelity, the notice that issued
to either Peppers/FBB or Fisher/AAA did
not constitute notice to it, and the letters it
received from the State were “payment de-
mands” that did not satisfy the notice re-
quirements under HRS § 804-51. Lastly, In-
ternational argued that good cause existed to
set aside the forfeiture judgments in at least
five of the cases—Berry, Muna, Ferraris,
Luna, and Nakamura—as the defendants had
been apprehended and returned to State cus-
tody “within months” from when the Judicia-
ry issued its letters.

The cireuit court disagreed with Interna-
tional Fidelity’s assertions. Instead, it deter-
mined that International Fidelity was not
entitled to notice pursuant to HRS § 804-51,
and that because International’s consolidated
motions were filed outside the time limit
imposed by HRS § 804-51, the court was
“without the power to consider them.” (citing
State vy. Ranger Ins, Co., 88 Hawai'i 118, 124
n.5, 925 P.2d 288, 294 n.5 (1996).

In arriving at its disposition, the circuit
court first analyzed the text and legislative
history of HRS § 804-51 to determine wheth-
er International Fidelity was entitled to no-
tice pursuant to that statute. Relying on a
Senate Judiciary Standing Committee Re-
port that defined “bail bondsman” as “the
surety [referred to] in Chapter 804, Hawaii
Revised Statutes,” the court concluded

bond is forfeited when a criminal defendant fails

to appear for a scheduled court appearance. This
bill would also allow a bail bondsman thirty

“the legislature intended the term ‘surety, as
used in the notice provisions of HRS § 804-
51, to apply to bondspersons such as Pepper
and Del Rio of FBB and Fisher of AAA.”
Because the notice requirements of HRS
§ 804-51 were satisfied when notice was giv-
en to FBB or AAA, absent the filing of a
motion or application showing good cause
within the thirty-day period following receipt
of notice by FBB or AAA, International Fi-
delity was “subject[] ... to execution on the
bond.”

The circuit court noted that HRS § 804-51
“requires nothing more than notice to the
surety ‘of the entry of the judgment in favor
of the State.” Thus, for the sake of argu-
ment, the court concluded that even if the
Judiciary was required to provide notice di-
rectly to International Fidelity, it did so by
way of its mailed letters. Those letters were
not “attempts to execute on the judgments,”
but rather were “meant only to notify [Inter-
national] of the entry of the forfeiture judg-
ments, to demand payment, and to warn
[International] of the possibility of further
legal action.” Thus, “[t]o date, none of the
judgments at issue in this proceeding have
been executed upon.”

Based on the foregoing, the circuit court
denied International Fidelity’s consolidated
Motions to Set Aside Judgment Entered
Against International Fidelity Insurance
Company.

A. Appeal to the ICA

International Fidelity timely appealed the
circuit court’s denial of its motions, and the
ICA consolidated those appeals under
CAAP-12-1040. International reiterated its
arguments that the forfeiture judgments
should be set aside because it did not receive
notice of the judgments as required by HRS
§ 804-51, and was therefore deprived of the
opportunity to timely locate the defendants
and an opportunity to be heard that is pro-
tected under procedural due process.

The ICA chose to “not adopt either party’s
position, but rather agree[d] with the circuit
court to the extent it held that the term
‘surety’ in HRS § 804-51 refers to the bonds-
persons (or bail agents) in these cases... .”

days, instead of the present ten, to object to any
forfeiture of a bail bond.

133

Nelson, 189 Hawai'i at 160, 384 P.3d at 935.
In addition to elaborating on the same legis-
lative history behind the notice requirement
that had been highlighted by the cireuit
court, the ICA carefully examined multiple
provisions of both HRS chapters 804 (gov-
erning bail) and 481 (governing insurance) to
ensure that its interpretation of HRS § 804-
51 was consistent with all statutory provi-
sions. See 139 Hawai'i at 160-63, 884 P.8d at
936-39.

In sum, the ICA explained that it was
uncontested that Peppers, Del Rio, and Fish-
er were “insurance producers” governed by
HRS chapter 481, article 9A. As “insurance
producers,” they qualified as sureties under
HRS § 804-10.5. Moreover, they had signed
the bond; HRS § 804-1 requires the surety
or sureties to do so. The ICA also pointed
out that the definition of “bail agent” set
forth in HRS § 481:9N-101 (Supp. 2015), de-
scribes the distinct roles of a licensed “insur-
ance producer under article 9A” and an au-
thorized “surety insurer.” See Nelson, 189
Hawai'i at 162-68, 884 P.3d at 938-39; HRS
§ 481:9N-101 (Supp. 2015) (“As used in this
article: ‘Bail agent? means a licensed insur-
ance producer under article 9A who is ap-
pointed by an authorized surety insurer, fur-
nishes bail for compensation in any court in
this State, and has the power of attorney to
execute or countersign bail bonds in connec-
tion with judicial proceedings.”).

The ICA went on to explain that Interna-
tional Fidelity’s due process rights were not
violated because “the notice that was provid-
ed to Peppers ... and Fisher—as required
under HRS § 804-51—was reasonably caleu-
lated to apprise International Fidelity of the
bail forfeiture judgments” in accordance with
Klinger v. Kepano, 64 Haw. 4, 635 P.2d 988
(1981). Nelson, 189 Hawai'i at 165, 384 P.8d
at 941, Additionally, the ICA ruled that the
form of the forfeiture judgments was proper,
and that the circuit court “properly declined
to apply HRCP Rule 60(b) or any other civil
procedure rule.” 139 Hawai‘i at 166, 384 P.38d
at 942,

For these reasons, the ICA affirmed the
circuit court’s October 81, 2012, “Findings of
Fact, Conclusions of Law, and Order Deny-

(citing S. Stand. Comm, Rep. No. 857, in 1989
Senate Journal, at 1127 (emphasis added)).

134

ing International Fidelity Insurance Compa-
ny’s Consolidated Motions to Set Aside Judg-
ment Entered Against International Fidelity
Insurance Company.” Id.

B. Application for Writ of Certiorari

International Fidelity timely applied for a
writ of certiorari in each of the eight under-
lying criminal cases. This court consolidated
those applications under SCWC-12-1040. The
following two questions were raised in its
Application:

1, Whether the ICA made grave errors of
law in holding that Hawai'i Revised Stat-
utes § 804-51, the bail forfeiture statute,
did not require the State to give a surety
notice of bail forfeiture judgments before
holding the surety liable, thereby depriv-
ing the surety of the 30-day search period
or right to show good cause to set aside
the judgments under the statute.

2, Whether the ICA made grave errors of

law in holding that the failure to provide

notice or an opportunity to be heard to a

surety did not violate the surety’s rights to

procedural due process where the surety

did not receive any notice or an opportuni-

ty to be heard to contest the judgment.

International Fidelity argues that the ICA
erred in its interpretation of HRS § 804-51,
as the statute is unambiguous and should be
plainly read. According to International, the
forfeiture judgments “clearly identify Inter-
national as the surety, not the Bondsper-
sons,” and other jurisdictions require that
the state provide notice of the judgments to
the surety instead of the bondsperson. Inter-
national appears to also suggest that only
entities that “provide surety insurance for
bail bonds” can act as a “surety” in Hawai‘i.
Because a bail bondsperson or bail agent is
only authorized to “sell, solicit or negotiate
surety insurance,” he or she cannot act as a
“surety” as contemplated by Hawai‘i law.
Moreover, International Fidelity posits: “[ilf
[the ICA’s interpretation of HRS § 804-51] is
correct, the judgment is only enforceable
against the Bondspersons as the sureties,
and not International, The ICA failed to ex-
plain how the judgment could then be en-
forced against International without notice,
apparently as a second surety on the bonds.”

14, If depositing cash, credit or debit card author-
ization, or other personal property, the market

International asks that if the ICA’s interpre-
tation of HRS § 804-51 is upheld, the “judg-
ments should be deemed void as against In-
ternational and only enforceable against the
Bondspersons.” ~

International Fidelity also asserts the ICA
erred in determining that its due process
rights were not violated. The issuance of
notice to the bail bondspersons does not
amount to notice to International as: (1) the
bail bondspersons were merely “special
agents” of International and therefore notice
provided to the bondspersons “cannot be im-
puted to [International],” (2) other jurisdic-
tions would require notice to International as
a matter of due process.

IIL Standard of Review
Hl “Interpretation of a statute is a ques-
tion of law which [is] review[ed] de_novo.”
Kikuchi v. Brown, 110 Hawai'i 204, 207, 180
P.8d 1069, 1072 (App. 2006) (internal quota-
tion marks and citation omitted).

IV. Discussion
The crux of International Fidelity’s Appli-
cation is that it is a “surety” as that term is
used in HRS chapter 804, and was therefore
entitled to notice of the forfeiture judgments
pursuant to HRS § 804-51, However, Inter-
national wholly fails to engage with the ICA’s
careful analysis regarding that court’s inter-
pretation of the term “surety,” which is in
accord with other provisions of HRS chap-
ters 804 and 481, Instead, International Fi-
delity repeatedly asserts that because it is a
surety insurer, and because its POAs refer to
it as the “surety,” it is a “surety” as that
term is used in HRS § 804-51. These asser-
tions lack any statutory basis.
The following analysis underscores the cor-
vectness of the ICA’s decision.

A. International Fidelity Fails to Demon-
strate That It Qualifies As a Surety
under HRS § 804-10.5

HE Hawai'i law contemplates two types of
sureties: property-based and insurance-
based. A surety on a bail bond must secure
the bail bond by a deposit with the court
clerk of personal or real property." If the

value of which must not be less than the amount

surety is licensed by the insurance commis-
sion as an “insurance producer,” 15 the surety
may instead post an insurance bond. See
HRS § 804-10.5.16 Based on a plain reading
of this statute, any person, including a bail
bondsperson or bail agent, can qualify as a
“surety” so long as either of these require-
ments is met,

It is undisputed that no property was de-
posited with the court clerk as security for
bail in any of the criminal cases at issue here.
Thus, each bail bond was secured by an
“insurance bond” that was posted by an “in-
surance producer,” such as Peppers or Fish-
er, In other words, a defendant, or others on
behalf of the defendant, purchased from Pep-
pers or Fisher a bail bond that was guaran-
teed by an ‘insurance policy issued from In-
ternational Fidelity.

International Fidelity asserts that it post-
ed the bail bonds directly with the court
(through Peppers, Del Rio, or Fisher as its
attorney-in-fact), and therefore was the
“surety” on the bonds, as stated in the POAs.
However, International fails to explain how it
qualifies as a surety under HRS § 804-10.5.
Indeed, as noted supra Part ILC., the circuit
court did not find, nor did International Fi-
delity represent, that it is a licensed “insur-
ance producer” authorized to sell insurance
in Hawai‘i. International Fidelity cannot sat-
isfy the requirement by adopting the licen-
sure status of Peppers, Del Rio, or Fisher, as
they served as International’s attorneys-in-
fact, and not the other way around, More-
over, nothing in HRS § 481:10F-101 (2014)
(deeming many surety requirements fulfilled
so long as the surety bond is guaranteed by a
surety insurer), abrogates the ongoing re-
quirement that insurance be sold only by
those properly licensed, Accordingly, to qual-
ify as a surety on a bail bond, given that it is
not licensed to sell insurance in Hawai'i, In-
ternational Fidelity would have been re-
quired to deposit the requisite personal or

of the bail. See HRS § 804-11.5(a). If depositing

deeds of real property, the market value of the

unencumbered interest of which must be at least
twice the amount of the bail. See id.

15. Or, with respect to the 2005 bond issued in
Nelson, as an “adjuster, independent bill review
er, or limited service representative.” See HRS
§ 804-10.5 (1993); supra note 5.

135

real property with the court clerk pursuant
to HRS § 804-10.5(b)(2), which it did not do.

B, The “Surety on the Bond” Was Either
Peppers of FBB or Fisher of AAA

Hl International Fidelity argues that the
ICA and the cireuit court failed to construe
HRS § 804-51 by its plain meaning, but rath-
er supplanted a key term, “surety,” with
“pail bondsperson,” based on legislative his-
tory. As the ICA pointed out, however, fur-
ther support beyond legislative history is
provided by the representations made on the
face of the bail bonds,

For example, the ICA noted that the sig-
natures of Peppers or Del Rio of FBB, or
Fisher of AAA, were present on the bonds,
which included language requiring the defen-
dant to comply with the court’s conditions.
See Nelson, 189 Hawaii at 162, 384 P.8d at
938, The bonds do not contain a signature or
seal of International Fidelity, and the signa-
tures of Peppers, Del Rio, and Fisher do not
indicate they had signed on behalf of Inter-
national Fidelity. These facts support the
conclusion that Peppers or Del Rio of FBB
or Fisher of AAA were the sureties as HRS
§ 804-1 requires the signature of “a defen-
dant’s surety or sureties” on a recognizance
that the defendant would comply with appli-
cable conditions.

Further, at the time the subject bail bonds
were issued, Criminal Administrative Order
No, 2.1 was in effect.!? This order required
that all bail bonds follow the “Sample Stan-
dard Form for Bail Bonds.” The Standard
Form provided that the “Name of Surety” be
identified in two separate places on the bond,
and that the address and telephone number
of the named surety be listed at the top of
the form, Additionally, Criminal Administra-
tive Order No, 2.1 stated that those issuing
bail bonds were “responsible for ensuring

16. See supra note 6 (quoted text),
17. Criminal Administrative Order No. 2.1 applies

except to the bond in Ferraris, CR. No. 11-1-
0306. See supra Part ILB.

136

that all information appearing on a bond is
correct.”

The surety named on the bond is critical to
applying HRS § 804-51, as the statute re-
quires that when a bond is forfeited, “the
court shall immediately enter up judgment in
favor of the State and against the principal
or principals and surety or sureties on the
bond,” and notice be “given via personal ser-
vice or certified mail, return receipt request-
ed, to the surety or sureties on the bond, of
the entry of the judgment in favor of the
State.” HRS § 804-51. As noted supra Part
ILB., a comparison of each of the bail bonds
in this matter show that they conform to the
Sample Standard Form for Bail Bonds, and
that the “Name of Surety” identified on the
bail bond was either “Ida Peppers, Freedom
Bail Bond,” or “AAA Local Bail Bonds,
Charles Fisher General Agent.” Accordingly,
the “surety or sureties on the bond” was
either Peppers or Fisher, not International
Fidelity.

Thus, a plain language interpretation or
strict construction of HRS § 804-51 leads to
the same conclusion: that the statute re-
quired that judgment be entered against, and
notice be given to, Peppers or Fisher, and
not to International Fidelity, Based on the
foregoing, see Parts IV.A-B., International
Fidelity’s reliance on the surety law of other
jurisdictions is misplaced,

C. International Fidelity’s Rights to Due
Process Were Not Violated

Hl International presents two arguments
as to why it was entitled, in aceord with due
process, to receive notice from the court of
the forfeitures. First, International states
that the ICA incorrectly concluded “that no-
tice can be imputed” to International because
“the Bondspersons were authorized attor-
neys-in-fact and registered producers for In-
ternational.” Second, International cites to
two foreign cases to support its contention
that a surety has a due process right to
receive notice of the forfeiture.

As to the first argument, International
misunderstands the ICA’s decision. At no
time did the ICA state that “notice [to the
bail bondspersons] can be imputed” to Inter-
national because of some kind of agency rela-
tionship, Rather, the ICA pointed out that by
statute, the text of HRS § 804-51 is included

in the provisions of each bail bond issued in
Hawai'i. See Nelson, 189 Hawai'i at 164-65,
884 P.3d at 940-41. As such, when Interna-
tional executed the surety bonds that secured
the bail bonds (through its limited attorneys-
in-fact and registered producers), it was well
aware that notice of forfeiture would be given
to the “surety on the bond” pursuant to HRS
§ 804-51, ie., to Peppers or Fisher. The ICA
concluded: “(under these circumstances,
therefore, the notice that was provided to
Peppers, Del Rio, and Fisher—as required
under HRS § 804-51—was reasonably caleu-
lated to apprise International Fidelity of the
bail forfeiture judgments.” See 189 Hawai'i
at 165, 884 P.3d at 941.

For its second argument, International Fi-
delity relies on State v. Rosillo, 645 N.W.2d
785, 739 (Minn. Ct. App. 2002), and asserts
that the ICA “did not correctly distinguish”
the case. International argues that “[tJhe fact
that notice was not provided to either the
surety or the bondsperson was not material
to the Court’s holding because the rights to
due process extends to both the surety and
the bondsperson.” International Fidelity fails
to explain, however, why the due process
right described in Rosillo—which flows from
Minnesota Rules of General Practice Rule
'702(e) (“Whenever a bail bond is forfeited by
a judge, the surety and bondsman shall be
notified by the court administrator in writ-
ing.”)—should have effect in Hawai‘, when
the laws of this state require that notice
issue only to the “surety or sureties on the
bond.” HRS § 804-51.

International’s reliance on People v. Wil-
shire Ins. Co., 46 Cal.App.8d 216, 119 Cal.
Rptr. 917 (Cal. Ct. App. 1975), and other
California caselaw, is similarly misplaced.
California’s bail statute is quite dissimilar
from Hawaii’s bail statutes, as it “explicitly
requires the clerk to mail notice of any de-
clared forfeiture to the principal office of the
corporate surety and to the bail agent who
posted the bond.” 46 Cal.App.3d at 220, 119
Cal.Rptr. at 919 (citing Cal, Penal Code
§ 1805). Hawai'i has no such explicit require-
ment. In any event, even under Cal. Penal
Code § 1805, which requires notice to issue
to the corporate surety only if “the bond
plainly displays [its] mailing address,” notice
to International would not be required as

International’s name and mailing address
were not “plainly displayfed]” on any of the
bail bonds.

D. International Fidelity’s Liability for
the Judgment

Hl International Fidelity briefly presents
two arguments as to why the forfeiture judg-
ments are not enforceable against it. First,
International Fidelity interprets the forfei-
ture judgments to have been entered against.
it, and argues that if HRS § 804-51 does not
require that it be issued notice, then the
entry of judgment against it violates due
process. Alternatively, if Peppers or Fisher
are the “sureties on the bond” who received
notice and against whom judgment was is-
sued, then the forfeiture judgments are en-
forceable only against Peppers or Fisher and
should be “deemed void as against Interna-
tional [as a second surety]” because Interna-
tional was not given adequate notice.

As to International Fidelity’s first argu-
ment, International is mistaken regarding
against which party judgment was entered.
The “surety on the bond” to whom notice was
issued regarding the forfeiture judgments is
the same “surety on the bond” against whom
judgment was entered pursuant to HRS
§ 804-51, namely, Peppers or Fisher.

Again, the statute states:

Whenever the court, in any criminal
cause, forfeits any bond or recognizance
given in a criminal cause, the court shall
immediately enter up judgment in favor of
the State and against the principal or prin-
cipals and surety or sureties on the bond,
jointly and severally, for the full amount of
the penalty thereof, and shall cause execu-
tion to issue thereon immediately after the
expiration of thirty days from the date that
notice is given via personal service or certi-
fied mail, return receipt requested, to the
surety or sureties on the bond, of the entry
of the judgment in favor of the State... .

HRS § 804-51 (emphasis added). With minor
exceptions,!* the language used in the forfei-
ture judgments in Nelson, Teruya, Cabigon,
and Nakamura was as follows:

18, The Teruya judgment did not indicate the date
of the defendant's required appearance.

19, As previously noted, the Berry judgment used
cause” instead of “this case,” and the judg-

137

The above-entitled case having come ...

before the ... Judge of the above-entitled
court, on [said date], and the Defendant
having failed to appear or to be present on
the said date, and the Court, upon motion
of the State of Hawaii, having on said date
ordered and declared the forfeiture of the
bail bond filed and posted in this case,
executed by said Defendant, as principal,
and INTERNATIONAL FIDELITY IN-
SURANCE COMPANY (FREEDOM
BAIL BOND), through its agent and attor-
ney in fact, IDA PEPPERS, as surety, in
the sum of ...,

NOW, THEREFORE, pursuant to the
foregoing order, IT IS HEREBY OR-
DERED, ADJUDGED AND DECREED
that the State of Hawaii does have and
yecovers from the principal and the surety
above named, jointly and severally, the
sum of ..., and that execution issue herein
according to law.

(Emphasis added.) The language used in
Ferraris, Berry, Muna, and Luna was:

The above-entitled case having come ...
before the ... Judge of the above-entitled
court, on [said date], and the Defendant
having failed to appear or to be present on
the said date, and the Court, upon motion
of the State of Hawai[‘Ji, having on said
date ordered and declared the forfeiture of
the bail bond filed and posted in this case,
executed by said Defendant, as principal,
and INTERNATIONAL FIDELITY IN-
SURANCE COMPANY, throu; ent
and_attorney_in fact, IDA PEPPERS
(FREEDOM BATL BOND), as surety, in
the sum of ...,

NOW, THEREFORE, pursuant to the
foregoing order, IT IS HEREBY OR-
DERED, ADJUDGED AND DECREED
that the State of Hawai[‘]i does have and
recovers from the principal and the surety
above named, jointly and severally, the
sum of ..., and that execution issue herein
according to law.

(Emphasis added.) ®
It is perhaps unclear from the text of the
judgments whether International, instead of

ment issued in Luna was directed at "Charles
Fisher” instead of “Ida Peppers (Freedom Bail
Bond).”

138

Peppers or Fisher, was identified as the
“surety” against which the judgments were
entered. “As surety” can be interpreted to
modify “International Fidelity Insurance
Company” despite the long intervening
clause. Alternatively, “as surety” might be
viewed to modify the preceding noun, “Ida
Peppers,” “Ida Peppers (Freedom Bail
Bond),” or “Charles Fisher,” as the case may
be.

WM “The general rule is that, like any
other written instrument, a court order must
‘be construed reasonably and as a whole so
as to give effect to the intention of the
court.’” Wohlschlegel v. Uhlmann-Kihei, Inc.,
4 Haw.App. 128, 180, 662 P.2d 505, 511 (1983)
(citing Smith v. Smith, 56 Haw. 295, 301, 585
P.2d 1109, 1114 (1975)). “ Moreover, we must
give effect not only to that which is ex-
pressed but also to that which is unavoidably
and necessarily implied by the judgment or
decree.’” Id. (quoting Ahuna v. Dep’t of Ha-
waiian Home Lands, 64 Haw. 327, 338-34,
640 P.2d 1161, 1166 (1982)). Applying these
rules of interpretation, we construe the for-
feiture judgments as having been entered in
compliance with HRS § 804-51, ie, entered
against the defendant and either Peppers or
Fisher, whomever was the “surety on the
bond.”

International asserts in its alternative ar-
gument that nothing in HRS § 804-51 per-
mits the judgment to be enforced against it
“as a second surety on the bonds” because it
failed to receive notice of the judgments.
International therefore concludes that “the
judgments should be deemed void against
International and only enforceable against
the Bondspersons.”

As a preliminary matter, International
does not provide support for its assertion
that it failed to receive notice of the judg-
ments, which, in any event, is not supported
by the record. The circuit court had conelud-
ed that International Fidelity “independently
received notice from the Judiciary of the
forfeiture judgment in each of these cases”
through the Judiciary’s letters to Interna-

20. Such findings include: (1) each letter issued
by the Judiciary to International had indicated
that it was a “Notification of Bail Bond Forfei-
ture,” stated that ‘judgment has been entered,”
and provided “the date of the judgment and the
amount forfeited, the case name and number, the

tional. On certiorari to this court, Interna-
tional did not contest the ICA’s decision to
decline “reach[ing] International Fidelity’s
challenge to the cireuit court’s alternative
holding, that the letters sent by the Judiciary
to International Fidelity were sufficient no-
tice [to International],” Nelson, 189 Hawai'i
at 164 n.18, 884 P.8d at 940 n.18, and other-
wise failed to assert the circuit court’s under-
lying findings of fact and conclusions of law
were error. Thus, these findings of fact 2° and
conclusions of law remain intact,

Moreover, as discussed supra Part IV.C.,
based on the statutorily mandated incorpo-
ration of the text of HRS § 804-51 into each
bail bond, International was well aware that
notice of forfeiture would be given to the
“surety on the bond,” ie. to Peppers or
Fisher, and therefore the notice that was
provided to Peppers or Fisher was reason-
ably calculated to apprise International Fi-
delity of the bail forfeiture judgments.

In sum, International received notice of
the forfeiture judgments by the foregoing
means and cannot now evade its obligations
as the issuer (through licensed insurance
producers, such as Pepper's or Fisher) of the
surety bonds that secured the defendants’
bail bonds. In other words, the defendants’
bail bonds were guaranteed by International
Fidelity’s contracts to insure. The forfeiture
judgments, therefore, have effect as to Inter-
national, the surety insurer, insofar as the
judgments may support any payment de-
mands or causes of action the State may have
against International.

V. Conclusion

For the foregoing reasons, we affirm the
ICA’s October 26, 2016 Judgment on Appeal,
filed pursuant to its September 29, 2016 opin-
ion, affirming the Circuit Court of the First
Cireuit’s October 81, 2012 “Findings of Fact,
Conclusions of Law, and Order Denying In-
ternational Fidelity Insurance Company’s
Consolidated Motions to Set Aside Judgment.

name of the issuing general agent, and the policy
number matching the power of attorney attached
to the bail bond,” and (2) the letters included a
demand for payment, however, none of the judg-
ments had been executed upon.

Entered Against International Fidelity In-
surance Company.”

398 P.3d 728
Diane KAWASHIMA, Individually and on
Behalf of all others Similarly Situated,
Petitioner/Plaintiff-Appellee/Cross-Ap-
pellant,

v.

STATE of Hawai‘i, Department of Edu-
cation; Kathryn 8. Matayoshi, in her Of-
ficial Capacity as Superintendent of
Schools; Lance A. Mizumoto, Brian J.
Delima, Patricia Bergin, Grant Y.M.
Chun, Maggie Cox, Hubert Minn, Ken-
neth Uemura, Bruce Voss, Jim Williams,
Andrea Lyn Mateo, and Colonel Peter P.
Santa Ana, in their Official Capacities
as Members of the State of Hawai‘i
Board of Education, Respondents/Defen-
dants-Appellants/Cross-Appellees

David Garner, Patricia Smith, Andrea
Christie, Allan Kliternick, Karen Souza,
Jo Jennifer Goldsmith, and David Hud-
son, on Behalf of Themselves and all
others Similarly Situated, Petition-
ers/Plaintiffs-Appellees,

ve

State of Hawai‘i, Department of
Education, Respondents/De-
fendants-Appellants.

Allan Kliternick, David Garner, Jo Jenni-
fer Goldsmith, and David Hudson, Indi-
vidually and on Behalf of all others Sim-
ilarly Situated, Petitioners/Plaintiffs-
Appellees,

v

Kathryn S. Matayoshi, in her Official Ca-
pacity as Superintendent of Schools,
Lance A, Mizumoto, Brian J. Delima,
Patricia Bergin, Grant Y.M. Chun, Mag-
gie Cox, Hubert Minn, Kenneth Uemura,
Bruce Voss, Jim Williams, Andrea Lyn

139

Mateo, and Colonel Peter P. Santa Ana,
in Their Official Capacity as Members
of the State of Hawai‘i Board of Edu-
cation, Department of Education, State
of Hawai‘i, Respondents/Defendants-Ap-
pellants.

SCAP-15-0000462
Supreme Court of Hawai'i,

JUNE 28, 2017

See also 228 P.8d 215,

2
s

‘William J. Wynhoff and David D. Day for
appellants,

Paul Alston and Eric G. Ferrer, Honolulu,
for appellees.

RECKTENWALD, C.J., NAKAYAMA,
AND WILSON, JJ., CIRCUIT JUDGE
CHANG, IN PLACE OF McKENNA, J.,
RECUSED, AND CIRCUIT JUDGE
CRANDALL, IN PLACE OF POLLACK,
J., RECUSED

OPINION OF THE COURT BY
RECKTENWALD, C.J.
L Introduction

This is a consolidated case involving substi-
tute and part-time temporary teachers who
were employed by the State of Hawai'i, De-
partment of Education (“State” or “DOE”),
and who claim they were underpaid by the
State.

Plaintiffs in the Garner case include more
than 8,000 substitute teachers (collectively
“Garner Plaintiffs” or “substitute teachers”)
who were paid on a per diem basis. Approxi-
mately half of the substitute teachers in Gar-
ner also worked in a part-time capacity for
which they were paid hourly wages,

During a prior interlocutory appeal in Gar-
ner, the Intermediate Court of Appeals
(ICA) found that the circuit court properly
ruled that the substitute teachers were un-

~ derpaid and thus entitled to their per diem

back wages pursuant to Hawaii Revised
Statutes (HRS) § 302A-624(e). See Garner v.
State, 122 Hawai'i 150, 154-55, 228 P.8d 215,
219-20 (App. 2009) (Garner I). On remand,
the circuit court ruled that the Plaintiff class
included the substitute teachers who were
paid hourly wages and calculated the amount
of those wages due, and that Plaintiffs were
entitled to interest on their hourly and per
diem back wages under HRS § 103-10.

In 2014, the State paid a partial settlement
to Garner Plaintiffs in the amount of
$14,081,874.70, which settled all per diem
wage claims for the claim period from No-

142

vember 8, 2000 through June 30, 2005. The
State continued to dispute its liability regard-
ing the payment of the substitute teachers’
hourly back wages, and whether the teachers
are entitled to interest on their per diem and
hourly wages.

In 2015, the Circuit Court of the First
Cireuit (cireuit court) entered final judgment
in Garner, awarding hourly back wages to
Plaintiffs who worked in a part-time capacity
in the amount of $6,789,175.21 for the period
from November 8, 2000 through June 12,
2012.1 The circuit court also awarded interest
on both the per diem and hourly back wages
owed, in the amount of $18,542,186.74,

Plaintiffs in the Kawashima case include
approximately 20,000 part-time temporary
teachers (collectively “Kawashima Plaintiffs,”
“part-time teachers” or “PTTs”) who were
paid on an hourly basis. Similar to the substi-
tute teachers claiming hourly back wages in
Garner, the PT'T's in Kawashima argued that
their hourly pay rate, which was set forth in
School Code Regulation 5203, was linked to
the substitute teachers’ per diem pay rate
under HRS § 302A-624(e). Thus, based on
the claimed linkage between Regulation 5203
and HRS § 802A-624(e), the PTTs argued
that because the substitute teachers were
underpaid, they too were underpaid. The cir-
cuit court in Kawashima ruled that the PTTs
were underpaid and entitled to hourly back
wages in the amount of $24,026,829.52 for the
period from February 20, 2004 through June
12, 2012.? In contrast to Garner, however, the
circuit court in Kawashima ruled that the
PTTs were not entitled to interest on their
unpaid hourly wages under HRS § 103-10.
Nevertheless, the cireuit court determined
that had Plaintiffs been entitled to interest
on their hourly back wages under HRS
§ 108-10, they would have been entitled to
interest payments in the amount of
$9,450,085.40,

On appeal in Garner, the State argues that
the circuit court erred in: (1) determining
that Plaintiffs’ claims for hourly back wages
were “properly part of this case”; (2) deter-
mining that School Code Regulation 5203 is
an HRS chapter 91 rule; (8) granting sum-
mary judgment in favor of the substitute

1, In Garner, the Honorable Karl K, Sakamoto
presided,

teachers on their hourly back wages contract
claim; and (4) determining that the substitute
teachers were entitled to interest on their
hourly and per diem back wages under HRS
§ 108-10,

On appeal in Kawashima, the State argues
that the circuit court erred in: (1) determin-
ing that School Code Regulation 5203 is an
HRS chapter 91 rule; and (2) denying the
State’s motion for summary judgment on the
PTTs’ hourly back wages contract claim. Ka-
washima Plaintiffs also cross-appealed the
circuit court’s rulings, arguing that they are
entitled to interest on their unpaid hourly
wages under HRS § 103-10,

This court accepted transfer of both Gar-
ner and Kawashima, and subsequently con-
solidated the cases,

We conclude that Plaintiffs are not entitled
to hourly back wages, or interest on any back
wages (whether per diem or hourly) under
HRS § 108-10. Because we decide the case
on the merits, we do not reach the question
of whether the substitute teachers’ hourly
back wages were properly within the scope of
the Garner Plaintiffs’ claims.

Therefore, the circuit court’s May 19, 2015
judgment in Garner is reversed and remand-
ed for entry of judgment in favor of the
State, Additionally, the circuit court’s May
18, 2015 judgment in Kawashima is affirmed
in part to the extent that the circuit court
determined that Plaintiffs are not entitled to
interest under HRS § 103-10, and reversed.
on all other remaining grounds and remand-
ed for entry of judgment in favor of the
State,

I. Background
We first provide essential background in-
formation regarding the compensation of
substitute teachers and PTTs employed by
the State.

A, Substitute Teachers’ Compensation

In 1996, the legislature recodified the edu-
cation statutes and enacted HRS § 302A-
624(e) (Supp. 1997), which established the
following per diem rate of pay for substitute
teachers:

2, In Kawashima, the Honorable Edwin C. Naci-
no presided.

(e) Effective July 1, 1996, the per diem
rate for substitute teachers shall be based
on the annual entry step salary rate estab-
lished for a Class IT teacher on the most
current teachers’ salary schedule. The per
diem rate shall be derived from the annual
rate in accordance with the following for-
mula:

Per Diem Rate = Annual Salary Rate +

12 months + 21 Average Working Days

Per Month,

A “Class II teacher” is defined as “any
teacher who holds a certificate issued by the
department based upon four acceptable years
of college education and other requirements
as may be established by the department[,]” *
HRS § 802A-618(b)(2) (Supp. 1997).

B. Part-Time Teachers’ Compensation
Since at least 1945, the DOE has had a
body of internal guidelines called the “School
Code.” In 1976, the Board of Education
(BOE) adopted School Code Regulation 5203,
which linked the hourly wage of PTT’ to the
per diem wage paid to substitute teachers,
Regulation 5208 provides:
E. Part-time Temporary Teachers (Aca~
demic and Non-Academic)
EFFECTIVE SEPTEMBER 1, 1976:
Pay rates for Part-time Temporary
Teachers (Academic and Non-Academic)
employed on an hourly basis shall be
based on the most current Per Diem
Rates established for Substitute Teach-
ers as follows:
Class I Per Diem Rate for Substi-
tute Teacher
Class II Per Diem Rate for Substi-
tute Teacher

3, Subsection (e) remained in effect as enacted
until 2005, when the legislature amended it as
follows:

(s) Effective July 1, 2005, the minimum hour-
ly or minimum per diem rate for substitute
teachers shall be determined by the legislature;
provided that the department shall develop a
classification and compensation schedule that
is not restricted to the minimum compensation
rates but may exceed them; provided further
that any individual in class I, II or II who
works less than a full seven-hour work day
shall be compensated on a prorated, hourly
basis as follows:

(1) Class I: other individuals who do not pos-
sess a bachelor’s degree shall be compensated

143

Class III Per Diem Rate for Substi-
tute Teacher

Hourly Rates shall be derived from Per

Diem Rates in accordance with the fol-

lowing formula:
*Hourly Rate = Per Diem Rate + 6
average working hours per day

The regulation remained unamended until
2005, when the first of a series of changes
oceurred, In January 2005, the DOE issued a
new version of the Regulation 5208, which
stated, “Compensation for Part-time Tempo-
vary Teachers on an hourly basis shall be
determined by the [DOE].” In a July 2005
memorandum, Superintendent Patricia Ham-
amoto adjusted the pay rate of PTTs as
follows:

Beginning July 1, 2006, all employees hired

as part-time teachers will be assigned to

two classes, Compensation will be deter-
mined by the academic qualifications of the
employee. The following is a breakdown of
the classes:

© Class A: Employees with a minimum

of a Bachelor’s Degree from an aceredit-

ed institution,

Compensation Rate: $22.48 per hour

© Class B: Employees with no Bache-

lor’s Degree.

Compensation Rate: $20.67 per hour

Payment for these employees will be retro-

active to July 1, 2005.

In 2006, the BOE retroactively ratified the
Superintendent’s July 2005 memorandum es-
tablishing the PTTs’ pay rate. In 2009, the
DOE issued “Standard Practice Document
SP 5203” (SP 5208), which was intended to
supersede Regulation 5208 that was amended

at a rate of not less than $119.80 for a full
work day;
(2) Class Il: individuals with a bachelor’s de-
gree shall be compensated at a rate of not less
than $130 for a full work day; and
(3) Class ITI: department of education teach-
ers, or licensed or highly qualified teachers,
shall be compensated at a rate of not less than
$140 for a full work day.
HRS § 302A-624(e) (Supp. 2005).
None of the issues in this appeal concern HRS
§ 302A-624(e) (Supp. 2005), and all further ref-
erences to HRS § 302A-624(e) refer to HRS
§ 302A-624(e) (Supp. 1997),

144

January 2005. SP 5208 stated that compensa-
tion for PTTs “shall be determined by the
Department.” In 2012, the DOE adopted Ha-
wai‘i Administrative Rules (HAR) chapter 8-
66 (effective June 14, 2012) pursuant to HRS
chapter 91’s rulemaking procedures, which
provided compensation rates for part-time
temporary teachers.4

C. Garner Circuit Court Proceedings

In 2002, Plaintiffs David Garner, Patricia
Smith, Andrea Christie, and Allan Kliternick
filed a class action complaint in the Cireuit
Court of the Second Circuit, claiming that
the DOE failed to pay the substitute teach-
ers’ wages mandated by HRS § 302A-624(),
and seeking back pay for the 2000-2001,
2001-2002, and 2002-2008 school years.>

The circuit court certified the Plaintiff
class in Garner to include:

[alll persons who have served in position

numbers 75100, 75101, 75102, as identified

on a DOE SF-5 as a substitute teacher for
the Hawaii DOE at publie schools of the

State of Hawaii from November 8, 2000

through the present.

The class includes approximately 8,000
substitute teachers. Approximately half of
the substitute teachers in Garner also
worked in a part-time capacity for which they
were paid hourly wages, and argue that they
are entitled to both their per diem back
wages and hourly back wages.

In 2005, Plaintiffs Allan Kliternick, David
Garner, Jo Jennifer Goldsmith, and David

4, HAR § 8-66-7 provides:
Compensation classes. A part-time temporary
teacher shall be assigned to a compensation class
based on the academic qualifications of the indi-
vidual. The two classes of compensation are:
(1) Class A for part-time temporary teach-
ers with a minimum of a bachelor’s degree
from an accredited institution of higher learn-
ing; and
@) Class B for all part-time temporary
teachers not included in Class A.
HAR § 8-66-8 provides:
Compensation rates. The hourly rate for the
classes of part-time temporary teachers are as
lows:
(1) Class A: $22.43 per hour; or
(2) Class B: $20.67 per hour.

5. In 2003, the Garner lawsuit was transferred
from the Second Circuit to the First Circuit and
assigned to then-Judge (now Justice) Richard W.
Pollack. The case was subsequently reassigned to

Hudson filed a similar class action complaint
in Kliternick vy. Hamamoto (Kliternick case),
which covered the 2004-2005 school year.
Garner and Kliternick were consolidated (col-
lectively, the “Garner” case).

In Garner, Plaintiffs raised two claims for
relief in their operative complaint, seeking
monetary damages and injunctive relief for:
() violation of HRS § 302A-624(e) (under-
paying the substitute teachers); and (2) viola-
tion of contract rights (breach of obligation to
pay teachers per diem rate under HRS
§ 802A-624(e)). The State moved for sum-
mary judgment as to all claims and parties,
and Garner Plaintiffs moved for partial sum-
mary judgment with respect to liability for
damages for the period from November 8,
2000 to June 30, 2005. The circuit court
granted in part and denied in part Garner
Plaintiffs’ motion for partial summary judg-
ment, ruling, inter alia, that the State violat-
ed its contractual obligation to pay the sub-
stitute teachers per diem wages prescribed
by HRS § 302A-624(e). However, the circuit
court ruled that the State had sovereign im-
munity as to prejudgment interest, and thus
denied Garner Plaintiffs any prejudgment in-
terest. The circuit court then authorized an
interlocutory appeal from its summary judg-
ment order.

The ICA affirmed, inter alia, the circuit
court’s determination that the DOE violated
its obligation to pay the substitute teachers
by failing to pay the per diem rate pre-
scribed by HRS § 302A-624(e). Garner I, 122
Hawai'i at 154, 223 P.3d at 219. The ICA also
ruled that: (1) pursuant to HRS § 661-1,5 the

the Honorable Karen Ahn in 2004, and then
reassigned to the Honorable Karl K. Sakamoto in
2008.

6. HRS § 661-1 (1993) Jurisdiction) provides:

The several circuit courts of the State and,
except as otherwise provided by statute or rule,
the several state district courts, subject to ap-
peal as provided by law, shall have original
jurisdiction to hear and determine the follow-
ing matters, and, unless otherwise provided by
law, shall determine all questions of fact in-
volved without the intervention of a jury:

(1) All claims against the State founded
upon any statute of the State; upon any rule of
an executive department; or upon any con-
tract, expressed or implied, with the State, and
all claims which may be referred to any such
court by the legislature; provided that no ac-
tion shall be maintained, nor shall any process

substitute teachers’ claim for breach of con-
tract damages was not barred by sovereign
immunity; (2) HRS § 302A-624(e), as a pay
mandating statute, provided an alternative
basis for invoking jurisdiction under the
“founded upon any statute” language in HRS
§ 661-1; and () HRS § 661-87 barred any
award of prejudgment interest under HRS
§ 478-28 Id. The ICA specifically rejected
the State’s argument that the substitute
teachers had assented to a lower rate of pay
than required by HRS § 302A-624(e), rea-
soning that it was part of the parties’ agree-
ment that the rate of pay was “subject to
applicable State laws,” and the parties “could
not contract to violate a law determining the
vate of pay.”® Id. at 170, 228 P.8d at 235
(citations omitted).

On remand, the substitute teachers pur-
sued a different theory regarding their inter-

issue against the State, based on any contract
or any act of any state officer that the officer is
not authorized to make or do by the laws of the
State, nor upon any other cause of action than
as herein set forth....

7, HRS § 661-8 (1993) (Interest) provides:

No interest shall be allowed on any claim up to
the time of the rendition of judgment thereon
by the court, unless upon a contract expressly
stipulating for the payment of interest, or upon
a refund of a payment into the “litigated
claims fund” as provided by law.

8. HRS § 478-2 (1993) (Legal rate; computation)
provides:
When there is no express written contract fix-
ing a different rate of interest, interest shall be
allowed at the rate of ten per cent a year,
except that, with respect to obligations of the
State, interest shall be allowed at the prime
rate for each calendar quarter but in no event
shall exceed ten per cent a year, as follows:

(1) For money due on any bond, bill, prom-
issory note, or other instrument of writing, or
for money lent, after it becomes due;

(2) For money due on the settlement of
accounts, from the day on which the balance is
ascertained;

(3) For money received to the use of anoth-
er, from the date of a demand made; and

(4) For money upon an open account, after

sixty days from the date of the last item or
transaction,
As used in this section, “prime rate” means the
prime rate as posted in the Wall Street Journal
on the first business day of the month preced-
ing the calendar quarter.

9. Both sides filed applications for writ of certio-
rari, and both applications were rejected.

145

est claim and moved for an award of interest
on their unpaid per diem wages pursuant to
HRS § 108-10 (1998). At a hearing on the
motion, the circuit court explained that ac-
cording to Garner I, the substitute teachers
were unquestionably in a contractual rela-
tionship with the State, and that HRS § 103-
10 was a “pertinent statute incorporated by
the contractual relationship.” Thus, the cir-
cuit court determined that HRS § 103-10
“constitute[d] a contract expressly stipulating
for the payment of interest as required under
THRS § ] 661-8,” and concluded that Garner
Plaintiffs were entitled to interest on their
per diem back pay under HRS § 108-10,"

The State moved for a ruling as to the
scope of the Garner Plaintiff class, and
sought to preclude the Garner class mem-
bers’ recovery for unpaid hourly wages, seek-
ing to limit recovery to only per diem wages.

10, HRS § 103-10 (1993) provides in relevant
part:

(a) Any person who renders a proper state-
ment for goods delivered or services per-
formed, pursuant to contract, to any agency of
the State or any county, shall be paid no later
than thirty calendar days following receipt of
the statement or satisfactory delivery of the
goods or performance of the services. In the
event circumstances prevent the paying agency
from complying with this section, the person
shall be entitled to interest from the paying
agency on the principal amount remaining un-
paid at a rate equal to the prime rate for each
calendar quarter plus two per cent, commenc-
ing on the thirtieth day following receipt of the
statement or satisfactory delivery of the goods
or performance of the services, whichever is
later, and ending on the date of the check. As
used in this subsection, “pri ”
the prime rate as posted in the Wall Street
Journal on the first business day of the month
preceding the calendar quarter.

() This section shall not apply in those cases
where delay in payment is due to:

(1) A bona fide dispute between the State
or any county and the contractor concerning
the services or goods contracted for;

(2) A labor dispute;

(3) A power or mechanical failure;

(4) Fire;

(5) Acts of God; or

(6) Any similar circumstances beyond the
control of the State or any county.

11, The circuit court further stated that the HRS
§ 478-2 analysis in Garner I did not apply here,
and applied only to situations in which there was
an absence of an express contract, which was
distinguishable from the instant case.

146

Garner Plaintiffs filed a counter motion,
seeking to affirm the scope of the class, or in
the alternative to amend the class definition
or the complaint. The circuit court granted
Garner Plaintiffs’ motion and denied the
State’s motion, ruling that the class members
were entitled to recover both per diem and
hourly back wages,

Garner Plaintiffs then sought summary
judgment for hourly back wages owed and
interest thereon under HRS § 103-10. The
State filed a counter summary judgment mo-
tion. During a hearing on both motions, the
cireuit court stated that in the “interest of
comity,” it would follow the circuit court’s
ruling in the Kawashima case, finding that
Regulation 5203 has the same force and ef-
fect as law and is subject to HRS chapter
91.2 The circuit court also determined that
HRS § 103-10 was incorporated into the par-
ties’ contracts and awarded interest on the
substitute teachers’ hourly back wages. The
circuit. court subsequently filed an order
granting Garner Plaintiffs’ motion and deny-
ing the State’s motion, ruling that the substi-
tute teachers who also worked in a part-time
capacity were entitled to hourly back wages
from November 8, 2000 until June 14, 2012
and interest thereon under HRS § 108-10,

In 2014, the State paid a partial settlement
to Garner Plaintiffs in the amount of
$14,081,874.70, which settled all per diem
wage claims for the claim period from No-
vember 8, 2000 through June 30, 2005. The
State continued to dispute its liability regard-
ing the payment of hourly back wages.

On May 19, 2015, the circuit court entered
final judgment, awarding $6,789,175.21 to the
substitute teachers for their hourly back
wages, and $13,542,186.74 for interest owed
under HRS § 108-10 on the hourly and per
diem back wages through May 18, 2015.

D. Kawashima Circuit Court Proceedings

In 2006, Diane Kawashima filed a class
action complaint, alleging that the DOE had
underpaid all PTTs because DOR’s School
Code Regulation 5208 linked the hourly pay
rates of PTTs to the per diem pay rates for

12, The Kawashima circuit court's ruling is dis-

13, On February 13, 2006, Kawashima filed a
motion to intervene in the Garner case. Garner I,

substitute teachers.!3 Kawashima argued that
because the DOE underpaid the substitute
teachers, it followed that the DOE underpaid
the PTTs as well.

Kawashima moved for class certification,
and the circuit court granted the motion,
appointing Kawashima as class representa-
tive for a certified class of:

All persons employed by the State of Ha-

wai'i Department of Education, who were

paid according to the pay rates for Part-

Time Teachers with or without a differen-

tial (excluding the class members in [the

Garner and Kliternick cases] ) at any time

within the applicable statute of limitations.

The Kawashima case was stayed pending
resolution of the interlocutory appeal in the
Garner case. After the ICA issued its deci-
sion in Garner I, the stay was lifted.4 Kawa-
shima Plaintiffs then filed a motion for sum-
mary judgment, arguing that: (1) the DOE’s
School Code Regulation 5203 expressly
linked the hourly pay rate for PTTs to the
most current per diem pay rate for substitute
teachers, and because the State had under-
paid the substitute teachers, the State had
necessarily underpaid the PTT's; and (2) the
DOE’s and BOE’s “litigation-driven” at-
tempts to amend Regulation 5208 beginning
in January 2005 were improper and ineffec-
tive.

At the hearing on the motion, the circuit
court determined that Regulation 5203 has
the “same force and effect as law,” and is
subject to HRS chapter 91. The court also
found that Regulation 5208 did not fall under
the two exceptions of an HRS chapter 91 rule
because it did not involve internal manage-
ment or affect the private rights of the pub-
lic, The court reasoned that Regulation 5203
should have the same force and effect as law
because it “in all shape and form, refers to
[HRS § ] 802A-624(e) with regards to how
the part-time teachers should be paid.” Ac-
cordingly, the circuit court granted Kawashi-
ma Plaintiffs’ motion for summary judgment.
Because the court determined that Regula-

122 Hawaii at 154, 223 P.3d at 219. On April 27,
2006, the circuit court denied the motion, Id.

14, The Honorable Edwin C. Nacino presided
from this point forward.

tion 5203 is an HRS chapter 91 rule, any
amendments to Regulation 5203 would have
had to be made in accordance with HRS
chapter 91’s rulemaking processes, which
was not completed until 2012 when the DOE
adopted HAR chapter 8-66. However, if the
court had determined the Regulation 5203
was not a rule, the DOE could have amended
Regulation 5208 at any time, and it would not
have been subject to HRS chapter 91’s re-
strictions.

Kawashima Plaintiffs filed a motion for
interest under HRS § 108-10 on the hourly
unpaid wages, arguing that the circuit court’s
ruling in Garner that awarded substitute
teachers interest on their per diem back
wages under HRS § 103-10 was persuasive,
The cireuit court denied the motion without
prejudice, Kawashima Plaintiffs filed a re-
newed motion for interest, arguing that the
circuit cour't’s ruling in Garner that the sub-
stitute teachers were entitled to interest on
both their hourly and per diem back wages
under HRS § 103-10 was persuasive. The
circuit court denied Kawashima Plaintiffs’ re-
newed motion. Kawashima Plaintiffs filed a
second renewed motion for summary judg-
ment for interest, and the State filed a cross-
motion for partial summary judgment as to
interest. At the hearing on the motions, the
circuit court determined that HRS § 103-10
did not apply to Kawashima Plaintiffs, and
that the purpose and intent of HRS § 103-10
“4s to address goods and services being pro-
vided by independent contractors, small busi-
ness people, [and] maybe persons in general
[that are] not even considered a contractor
but [are] providing a service or goods to the
State.” Thus, the circuit court granted the
State’s motion and denied Kawashima Plain-
tiffs’ second renewed motion, ruling that as a
matter of law, Kawashima Plaintiffs were not
entitled to interest on their hourly back
wages under HRS § 108-10.

In 2015, Kawashima Plaintiffs moved for
summary judgment to establish the amount
of hourly back wages Plaintiffs were owed,
and the interest thereon under HRS § 103-
10 had they been entitled to it. The circuit
court granted Kawashima Plaintiffs’ motion,
and on May 18, 2015, entered final judgment,
establishing that Kawashima Plaintiffs were
entitled to damages in the amount of
$24,026,829.52 for their hourly back wages

147

for the period from February 20, 2004
through June 12, 2012. The circuit court also
determined that had Plaintiffs been entitled
to interest on their hourly unpaid wages
under HRS § 103-10, they would have been
entitled to $9,450,085.40 through May 6,
2015,

E. Garner Appeal

The State argues on appeal that the circuit
court erred in: (1) determining that the sub-
stitute teachers’ hourly back wages were
properly within the scope of Plaintiffs’
claims, (2) determining that Regulation 5208
is an HRS chapter 91 rule, (8) granting
summary judgment in favor of the substitute
teachers on their hourly back wages contract
claim, and (4) determining that the substitute
teachers were entitled to interest on their
hourly and per diem back wages under HRS
§ 103-10,

First, the State argues that the Garner
Plaintiffs’ claims did not include their hourly
back wages, and that the trial court ignored
prior rulings and the ICA’s decision in Gar-
ner I when adding these claims. Second, the
State argues that Regulation 5203 is not an
HRS chapter 91 rule because it was not
adopted pursuant to rulemaking procedures,
and eyen if it was, the State employees’
wages are a matter of internal concern and
should not be determined by rule. Third, the
State argues that the substitute teachers
were paid the amount they contracted for,
and that they do not have a valid contract
claim for the alleged additional wages owed.
Fourth, the State argues that Garner Plain-
tiffs are not entitled interest under HRS
§ 108-10 because the ICA already ruled on
that issue in Garner I and prejudgment in-
terest is not allowed.

In response, Garner Plaintiffs first argue
that the class members who worked for both
per diem and hourly wages are entitled to
recover all their back wages because the
class membership included teachers in all of
their roles, the circuit court did not limit the
scope of damages, and the State was given
fair notice that hourly wages, as well as per
diem wages, were in dispute. Second, Garner
Plaintiffs argue that they are entitled to
wages mandated by Regulation 5203 because

148

the State did not lawfully sever the link
between Regulation 5203 and HRS § 302A-
624 until June 2012 when it followed HRS
chapter 91 rulemaking procedures. Third,
Garner Plaintiffs argue that with respect to
their contracts, the State cannot ignore the
law and must pay its employees lawfully
prescribed rates of pay. Fourth, Garner
Plaintiffs argue that the circuit court had not
previously addressed the issue of interest
under HRS § 108-10, and that HRS § 103-10
is a “specific, targeted ‘pay-mandating’ im-
munity-waiving statute” that “creates a sepa-
rate, enforceable waiver.”

F. Kawashima Appeal

In Kawashima, the State raises similar
contentions as in the Garner appeal. In re-
sponse, Kawashima Plaintiffs argue that the
State cannot enter into or enforce contracts
that are contrary to law, and that this issue
was resolved in Garner I, Kawashima Plain-
tiffs also argue that the BOE had sole au-
thority over the PTTs’ pay rates, and that it
did not act in accordance with HRS chapter
91, HRS chapter 89C, and HRS § 302A-
1112, until June 2012 at the earliest.

On cross-appeal, Kawashima Plaintiffs
raise one issue: whether the circuit court
erred in denying the PTTs interest on their
unpaid hourly wages under HRS § 103-10.
Kawashima Plaintiffs argue that the State
has no immunity against an award of interest
under HRS § 103-10 because it is an “immu-
nity-waiving, money-mandating statute,” and
that it applies broadly to “persons” and “con-
tractors.” In response, the State argues that
HRS § 103-10 is not applicable here because
it applies only to contractors with claims
covered by the Procurement Code.

G. Transfer Applications

Kawashima and Garner Plaintiffs filed ap-
plications for transfer to this court, and we

15. HRS § 302A-1112 (1996) (Rules) provides:
Subject to chapter 91, the board may adopt
rules for the government of all teachers, edu-
cational officers, other personnel, and pupils,
and for carrying out the transaction of its
business.

16. HRCP Rule 56(c) provides, in relevant part:

The judgment sought shall be rendered forth-
with if the pleadings, depositions, answers to

granted transfer in both cases. The cases
were subsequently consolidated,

II. Standards of Review

A, Summary Judgment

TH The appellate court reviews “the
eireuit court’s grant or denial of summary
judgment de novo.” Querubin v, Thronas, 107
Hawai‘ 48, 56, 109 P.8d 689, 697 (2005) (quot-
ing Durette v. Aloha Plastic Recycling, Inc.
105 Hawai'i 490, 501, 100 P.8d 60, 71 (2004)),
Accordingly,

[oln appeal, an order of summary judg-
ment is reviewed under the same standard
applied by the circuit courts. Summary
judgment is proper where the moving par-
ty demonstrates that there are no genuine
issues of material fact and it is entitled to a
judgment as a matter of law. In other
words, summary judgment is appropriate
if the pleadings, depositions, answers to
interrogatories, and admissions on file, to-
gether with the affidavits, if any, show that
there is no genuine issue of material fact
and the moving party is entitled to a judg-
ment as a matter of law.

Iddings v. Mee-Lee, 82 Hawaii 1, 5, 919 P.2d
268, 267 (1996); see_also Hawaii Rules of
Civil Procedure (HRCP) Rule 56(c) (2000).!°

B. Statutory Interpretation

Hl “Statutory interpretation is a ques-
tion of law reviewable de novo.” First _Ins.
Co. of Hawaii vy. A&B Props., 126 Hawaii
406, 414, 271 P.8d 1165, 1178 (2012) (quoting
State v. Wheeler, 121 Hawai'i 383, 390, 219
P.8d 1170, 1177 (2009) (internal quotation
marks omitted).

HMM «Our construction of statutes is
guided by the following rules:

First the fundamental starting point for

statutory-interpretation is the language of

interrogatories, and admissions on file, togeth-
er with the affidavits, if any, show that there is
no genuine issue as to any material fact and
that the moving party is entitled to a judgment
as a matter of law. A summary judgment, inter-
locutory in character, may be rendered on the
issue of liability alone although there is a genu-
ine issue as to the amount of damages.

the statute itself, Second, where the statu-
tory language is plain and unambiguous,
our sole duty is to give effect to its plain
and obvious meaning. Third, implicit in the
task of statutory construction is our fore-
most obligation to ascertain and give effect,
to the intention of the legislature, which is
to be obtained primarily from the language
contained in the statute itself. Fourth,
when there is doubt, doubleness of mean-
ing, or indistinctiveness or uncertainty of
an expression used in a statute, an ambigu-
ity exists.

Id. (quotations and citations omitted),
In construing an ambiguous statute, “[t]he
meaning of the ambiguous words may be
sought by examining the context, with
which the ambiguous words, phrases, and
sentences may be compared, in order to
ascertain their true meaning.” Moreover,
the courts may resort to extrinsic aids in
determining legislative intent. One avenue
is the use of legislative history as an inter-
pretive tool,

Silva v. City & Cnty. of Honolulu, 115 Ha-

wail 1, 6-7, 165 P.8d 247, 252-58 (2007) (cita-

tions omitted) (quoting Hawaii Home Infu-

sion Assocs. v. Befitel, 114 Hawai'i 87, 91, 157

P.8d 526, 580 (2007).

IV. Discussion

The issues presented on appeal include
whether the circuit court erred in: (1) finding
that the Garner Plaintiffs’ claims for hourly
back wages were properly within the scope of
the case; (2) finding that Regulation 5208 was
an HRS chapter 91 rule; (8) granting Plain-
tiffs summary judgment on their hourly back
wages contract claims; (4) either granting
interest to the substitute teachers in Garner
on their hourly and per diem back wages, or
denying interest to the PTTs in Kawashima
on their hourly back wages.

For the following reasons, we conclude
that Regulation 5208 is not an HRS chapter
91 rule, that it does not have the force and
effect of law, and that it was not incorporated
into Plaintiffs’ contracts. Thus, Plaintiffs are
not entitled to hourly back wages, and the
circuit court erred in granting Plaintiffs sum-
mary judgment on their hourly back wages
contract claims. In addition, we conclude that
HRS § 108-10 is not applicable here. There-
fore, Plaintiffs are not entitled to interest on

149

their hourly and per diem back wages. Be-
cause we decide this case on these grounds,
we need not reach the issue of whether the
substitute teachers’ hourly wages were prop-
erly part of the Garner case.

A. The Cireuit Court Erred in Finding
That Regulation 5203 Is an HRS
Chapter 91 Rule

HH The first issue that we must address
is whether Regulation 5208 is a rule under
HRS chapter 91. If a regulation or procedure
is determined to be a rule under HRS chap-
ter 91, the state agency with the proper
authority must follow the rulemaking proce-
dures under HRS § 91-3 (2012) in order to
adopt, amend or repeal the rule. Thus, if
Regulation 5203 is in fact a rule, then the
DOE did not properly amend Regulation
5208 until 2012 when it adopted HAR chap-
ter 8-66 in accordance with HRS chapter 91
processes, and the State would be liable for
the PTTs’ hourly back wages. However, if we
determine Regulation 5208 is not a rule, then
Regulation 5203 would be an internal policy
that the DOE may amend at any time, and
the State would not be liable for any hourly
back wages.

We conclude that Regulation 5208 is not a
rule, HRS § 802A-1112 (1996) provides broad.
authority for the BOE to adopt rules subject
to HRS chapter 91:

Subject to chapter 91 the [BOE] may

adopt rules for the government of all

teachers, educational officers, and other
personnel, and for the carrying out the
transaction of its business.

Under HRS § 91-1(4) (2012), a rule is de-
fined as follows:

“Rule” means each agency statement of
general or particular applicability and fu-
ture effect that implements, interprets, or
prescribes law or policy, or describes the
organization, procedure, or practice re-
quirements of any agency, The term does
not include regulations concerning only the
internal management of an agency and not
affecting private rights of or procedures
available to the public, nor does the term
include declaratory rulings issued pursuant.
to section 91-8, nor intra-agency memoran-
da.

150

Thus, the general definition of rule is a
“statement of general or particular applica-
bility and future effect that implements, in-
terprets, or prescribes law or policy, or de-
scribes the organization, procedure, or
practice requirements of any agency.”
Green Party of Hawaii _v. Nago, 188 Ha-
wai 228, 287, 878 P.8d 944, 958 (2016), In
Green Party, we concluded that the Office
of Hlection’s procedure to determine the
number of election ballots to be delivered
to the precincts was a rule because it
“meets the generality element of HRS
§ 91-1(4) as it is applied statewide for the
ordering of ballots in every precinct,” and
would also “operate in the future.” Id. at
289-40, 378 P.8d at 955-56; see also Nuuanu
Valley Ass’n_v. City & Cty. of Honolulu
119 Hawai'i 90, 99-100, 194 P.38d 581, 540-41
(2008) (determining that the Department of
Planning and Permitting of the City and
County of Honolulu’s “policy of refusing to
publicly disclose ... engineering reports
prior to their approval” was a rule because
it “affect{ed] the procedures available to
the public” in that the files were “public
records and may be examined upon re-
quest”) (internal brackets and quotation
marks omitted) (citing HRS § 91-1(4)).
Here, Regulation 5208 meets the generality
requirement of HRS § 91~-1(4) because it
applies statewide for all part-time teachers
employed by the DOE, and also operates in
the future because it prescribes prospective
compensation for part-time teachers.

Nevertheless, although Regula-
tion 5208 meets the generality and future
effect requirements of HRS § 91-1(4), it falls
within an exception to the general definition
of a rule. The exceptions to the general defi-
nition of rule include “regulations that con-
cern only the internal management of an
agency, and that do not affect private rights
of or procedures available to the public.”
Green Party, 188 Hawai'i at 288, 878 P.3d at
954. When considering whether a regulation
concerns internal management, we consider
“to whom the regulations are directed. If the
regulation is principally directed to its staff,
then it is generally considered to be a matter
of internal management.” Id. (citations omit-
ted). We stated that this approach is consis-
tent with the legislative history of HRS § 91-
14):

It is intended by this definition of “rule”

that regulations and policy prescribed and

used by an agency principally directed to
its staff and its operations are excluded
from the definition, In this connection your

Committee considers matters relating to

the operation and management of state

and county penal, correctional, welfare, ed-
ueational, public health and mental health
institutions, operation of the National

Guard, the custodial management of the

property of the state or county or of any

agency primarily a matter of “internal

management” as used in this definition.
Id, (quoting H. Stand, Comm, Report No. 8,
in 1961 House Journal, at 656).

However, even if it is “determined that a
regulation concerns only internal manage-
ment of an agency, the exception will apply
only if it is also determined that the regula-
tion does not affect private rights or proce-
dures available to the public.” Id. at 288-39,
878 P.8d at 954-55 (stating that the exception
was “intended to have a ‘limited scope’ be-
cause it only applies if it both relates to
internal management of the agency and it
does not affect private rights or public proce-
dures”).

This court has analyzed the applicability of
the internal management exception several
times, At issue in Green Party was whether
the Office of Election’s methodology and pro-
cedures in the 2012 election used to “(1)
determine the number of election ballots to
be delivered to the precincts, (2) request
additional ballots when a precinct runs out of
paper ballots, and (8) count the votes cast on
a ballot for a precinct in which the voter is
not entitled to vote,” constituted rules. 188
Hawai'i at 230, 878 P.3d at 946, This court
concluded that the Office of Election’s meth-
odology used to determine the number of
election ballots to be delivered to the pre-
cinets was a “rule.” Id. at 241, 878 P.8d at
957. We reasoned that the ballot order meth-
od “meets the generality element of HRS
§ 91-1(4) as it is applied statewide for the
ordering of ballots in every precinct,” and
also would “operate in the future.” Id, at 289-
40, 878 P.8d at 955-56, Regarding the excep-
tion, this court reasoned that, “because ballot
shortages may result in the deprivation of

the right to vote, the ballot order methodolo-
gy does not qualify for the internal manage-
ment exception to the definition of a ‘rule.’”
Id, at 240, 378 P.8d at 956,

This court also concluded that the proce-
dure for counting votes cast on a ballot for an
incorrect precinct constituted a rule. Id. at
248, 878 P.8d at 959. With respect to the
internal management exception and the pri-
vate rights of the public, this court reasoned
that:

[elven assuming that the procedure only

concerned internal management of the

agency, the method used by the Office of

Elections would have a direct impact on

the right to vote, including the private

right of voters to have their votes counted.

Such a policy would not only affect the

private right to vote, but it could also

impact the outcome of an election or re-
quire a new election.
Id,

In Aguiar vy, Hawaii Housing Authority, 55
Haw, 478, 522 P.2d 1255 (1974), this court
determined that the Hawai'i Housing Author-
ity’s (HHA) internal regulations, which set
forth maximum income limits for continued
occupancy by tenants in public housing and
established a payment schedule, were rules,
Id, at 489-90, 522 P.2d at 1262-63, This court
stated that the HHA’s amendment to its
internal regulations “altered fundamentally
the rental structure in public housing-its im-
mediate result was to change the amount of
rent paid by nearly every public housing
tenant.” Id, at 489, 522 P.2d at 1262. This
court further stated that the amendments
“setting maximum income limits for contin-
ued oceupancy ... determined every tenant’s
eligibility to remain in public housing.” Id.
‘This court reasoned that these amendments
plainly “ ‘affected’ in both a practical and a
legal sense the ‘private rights’ not only of
those tenants actually living in public housing
but also those members of the public at large
who were interested in becoming tenants,”
Id, see also Aluli v. Lewin, 78 Haw, 56, 57,
59, 828 P.2d 802, 808-04 (1992) (finding that,
the State Department of Health’s issuance of
an “air pollution permit authorizing the con-
struction and operation of [geothermal]
wells” which would emit hydrogen sulfide
was not in accordance with rulemaking, and
that “[alir quality is an integral part of the

151

quality of life and the public should have
input in these matters”); Burk v. Sunn, 68
Haw. 80, 98, 705 P.2d 17, 27 (1985) (holding
that the Department of Social Services and
Housing’s policy with respect to prorating
benefits under a food stamp program was a
rule because it had a “direct impact on the
rights of Food Stamp recipients”).

In contrast, this court has held that bylaws
or instructional procedures that do not affect
“private rights of or procedures available to
the public” are not rules. See Rose v. Oba, 68
Haw. 422, 427, 717 P.2d 1029, 1032 (1986). In
Rose, a doctor contended that his privileges
to practice medicine at the Hilo Hospital
were “revoked pursuant to invalid proce-
dures.” Id, at 424, 717 P.2d at 1030. The
doctor argued that the “rules and regulations
pursuant to which his privileges were re-
voked were not promulgated in accordance
with the rule-making procedures ... as en-
acted in [HRS] Chapter 91.” Id. at 428, 717
P.2d at 1080. This court held that the regula-
tions were not rules under HRS chapter 91
and that the:

provisions for corrective action in the Hilo

Hospital Bylaws do not affect private

vights of or procedures available to the

public, At best, they only indirectly affect
the private rights of the public to the
extent the public has an interest in qualifi-
cations of doctors practicing in public hos-
pitals, and to the extent a patient’s choice
of hospitals is reduced when his doctor’s
privileges at a particular hospital are re-
voked,

Id, at 427, 717 P.2d at 1082.

In Doe v. Chang, 58 Haw. 94, 564 P,2d
1271 (1977), this court considered whether a
manual of instructions for Department of
Social Services and Housing personnel con-
cerning welfare fraud investigations was sub-
ject to HRS Chapter 91 rulemaking require-
ments. Id, at 95, 564 P.2d at 1272-73. This
court held that the manual of instructions
eoncerned “only its internal management”
and did not “affect{] private rights of or
procedures available to the public.” Id, at 96,
564 P.2d at 1278. This court reasoned:

The only persons purporting to be in-

structed or ordered thereby are the per-

sonnel of the department. The manual does

152

not define the cireumstances under which
welfare recipients, or others not members
of the department personnel, shall be
granted of [sic] denied benefits. It does not
command the public to do anything, pro-
hibit the public from doing anything or
declare the rights of the public in any
respect. It does not make any procedures
available to the public. We find it difficult
to hypothesize a stronger example of the
internal regulation contemplated by HRS
[§ ] 91-14).
Id.

Additionally, in In re Doe, 9 Haw.App. 406,
844 P.2d 679 (1992), the ICA considered
whether the field sobriety testing procedures
established by the Hawai'i County Police De-
partment [HCPD] were a rule, Id. at 412, 844
P.2d at 682-83. The ICA reasoned that, like
Chang, the procedures were:

instructional in nature directed only to

HCPD police officers. The procedures in-

structed the officers how to administer

field sobriety tests to drivers reasonably
believed to have been [driving under the
influence], after they were properly

stopped and ordered out of their cars.
Also, although field sobriety tests intrude

on drivers’ rights ... HCPD’s field sobri-
ety testing procedures are aimed at assur-
ing the proper and correct methods of
administering the tests to drivers.
Id. at 412, 844 P.2d at 682; see also Ah Ho v.
Cobb, 62 Haw, 546, 552, 617 P.2d 1208, 1212
(1980) (finding that an agreement to rent
excess space in a water transportation sys-
tem was not a rule because “it concerns only
the internal management of the [State Board
of Land and Natural Resources] and does
not affect the private rights of or procedures
available to the public”); Crosby v. State
Dep't of Budget & Fin,, 76 Hawai'i 382, 345,
876 P.2d 1800, 1818 (1994) (affirming the
circuit court’s conclusion that a guideline by
the State of Hawai'i Department of Account-
ing and General Services (DAGS) to the oth-
er departments in the State as to how DAGS
interprets a statute was not a rule, reasoning
that the guideline was “sent only to other
state agencies and does not command or
prohibit any action by any member of the
public or any public employee”); State v.
Claunch, 111 Hawai'i 59, 67, 187 P.3d 378,
881 (App. 2006) (finding that the “police de-

partment’s regulation establishing and imple-
menting an intoxication control roadblock
program concerned only internal manage-
ment of the department and was therefore
not required to be promulgated pursuant to
HRS Chapter 91”); State v. Tengan, 67 Haw.
451, 462, 691 P.2d 365, 373 (1984) (finding
that the Director of Transportation’s “ap-
proval of the use of the Intoxilyzer” was not
rule making because the Director set “no
policy and exercised no discretion with re-
spect to the use of testing instruments; he
merely coordinated State and federal efforts
to maintain accuracy in chemical testing for
blood aleohol”); Pilaa_400, LLC v. Bd. of
Land & Nat. Res., 182 Hawai‘i 247, 265, 820
P.8d 912, 930 (2014) (finding that there is “no
statutory requirement to enact rules regard-
ing the valuation of damage to reef or valu-
able marine resources”).

Here, the instant case is akin to Rose,
Chang, and In re Doe, which involved regula-
tions that focused on internal management of
an agency and did not affect the private
rights of members of the public, Regulation
6208, like the regulations and policies in
those aforementioned cases, falls squarely
within the exception. Regulation 5208 affects
only the DOE’s internal management of its
part-time teachers’ hourly pay rate. More-
over, Regulation 5203 does not command
members of the public to do anything or
prohibit them from doing anything, nor does
it declare the rights of members of the public
or affect a procedure available to members of
the public. Rather, Regulation 5208 at best
only indirectly affects private rights of mem-
bers of the public to the extent that the
public has an interest in knowing how teach-
ers’ salaries are determined. This interest,
however, is not sufficient to remove Regula-
tion 5208 from the exception here.

The instant case is distinguishable from
Green Party and Aguiar. In those cases, the
regulations affected the private rights of
members of the public and implemented law
or policy, and thus were found to be rules.
For example, in Green Party, the voting
policies had a direct impact on the private
right to vote and the general public’s right to
have their vote counted in an election. Green
Party, 188 Hawai'i at 248, 878 P.3d at 959.
Additionally, in Aguiar, the HHA’s regula-

tions fundamentally altered the rental struc-
ture in public housing, which immediately
changed the amount of rent for almost all
public housing tenants and affected every
tenant’s eligibility to remain in public hous-
ing. Aguiar, 55 Haw. at 489, 522 P.2d at 1262.
Here, Regulation 5203 does not affect any
private rights of the public or any procedures
available to the public, and does not pre-
scribe or implement law or policy. Instead,
Regulation 5208 affects only the internal
management of a DOE part-time teachers’
pay rate.

In sum, Regulation 5208 is not a rule un-
der HRS chapter 91, and thus was not re-
quired to be amended under HRS chapter
91’s rulemaking procedures, Therefore, the
circuit court erred in finding that Regulation
5203 was a rule under HRS chapter 91.

B. The Circuit Court Erred in Granting
Summary Judgment in Favor of
Plaintiffs for Their Hourly Back
Wages Contract Claims

HM The State argues that because Reg-
ulation 5208 is not a rule, the Superintendent
and the Board properly changed Regulation
5203, and the State is not liable for any
alleged amounts owed after the change. The
State also argues that Regulation 5208 does
not have the “force and effect of law and
cannot be incorporated into the contract or
substituted for the actual agreement of the
parties.” Garner and Kawashima Plaintiffs
argue that the State cannot enter into or
enforce contracts that are contrary to law,
that it must pay its employees lawfully pre-
scribed rates of pay, and that this issue was
resolved in Garner I.

Tn Garner I, the ICA found that the substi-
tute teachers were entitled to their per diem
back wages because as part of the parties’
agreement, the teachers’ rate of pay was
“subject to applicable State laws,” and the
parties “could not contract to violate a law
determining the rate of pay.” Garner I, 122

17, At oral argument before this court, Plaintiffs
argued that the State stipulated to a violation of
HRS chapter 89C in the Kliternick stipulated
order and amended judgment resolving all
claims, Plaintiffs argued that their second claim
for relief in Kliternick was a violation of HRS
chapter 89C, and because the State stipulated on
a “free-standing basis for all the damages," this

153

Hawai'i at 170, 223 P.8d at 285 (citations
omitted). If we accept arguendo Garner I’s
threshold premise as true—that state law is
incorporated into contracts—and if we deter-
mine that Regulation 5203 has the force and
effect of law, then Regulation 5203 would be
incorporated into the part-time teachers’ con-
tracts, and the State would be obligated to
compensate the PTT for hourly back wages.
Here, the part-time teachers’ argument is
one step removed from the premise of Gar-
ner I because the PTTs’ hourly pay rate is
based on Regulation 5208, which links their
compensation to the substitute teachers’ pay
rate prescribed by state law. In contrast, in
Garner I, the substitute teachers’ pay rate is
directly prescribed by statute under HRS
§ 302A-624(e).

We conclude that Regulation 5208 does not
have the force and effect of law, and that it is
merely an internal policy that may be amend-
ed at any time. Thus, Regulation 5208 is not
incorporated into the part-time teachers’ con-
tracts, Plaintiffs are not entitled to hourly
back wages, and the circuit court erred in
granting summary judgment in favor of
Plaintiffs for their hourly back wages con-
tract claims,

HRS § 890-1 (Supp. 2000), grants “appro-
priate authorities the necessary flexibility” to
“adjust the wages, hours, benefits, and other
terms and conditions of employment for their
respective excluded public officers and em-
ployees.” HRS § 89C-1.5 (Supp. 2000) de-
fines “appropriate authority” to include the
BOE. Further, HRS § 89C-4 (Supp. 2000)
sets forth guidelines for the BOE to adjust
compensation for excluded employees exempt
from civil service: “Each appropriate authori-
ty shall determine the adjustments that are
relevant for their respective excluded em-
ployees who are exempt from civil service in
consideration of the compensation and bene-
fit packages provided for other employees in
comparable agencies.” 17 Thus, HRS chapter

was a stipulation to a violation of HRS chapter
89C. However, the State did not explicitly stipu-
late to a violation of HRS chapter 89C in either
the Kliternick stipulated order or amended judg-
ment. Moreover, even if the State stipulated to a
violation of HRS chapter 89C, HRS chapter 89C
does not support Plaintiffs’ contention that Regu-
lation 5203 has the force and effect of law.

154

89C clearly provides statutory authority for
the BOE to adjust the wages of excluded
employees, such as the part-time teachers
here, in order to reflect the compensation
vates of other comparable agencies, Howev-
er, while HRS chapter 89C provides the
BOE authority and flexibility to adjust and
amend the PTTs’ pay rate, it does not confer
the force and effect of law onto the School
Code Regulations,

HM Additionally, HRS § 302A-1112 pro-
vides broad authority for the BOE to adopt
rules subject to HRS chapter 91 for the
“government of all teachers” and for the
“carrying out of the transaction of its busi-
ness.” Similar to HRS chapter 89C, while
HRS § 302A-1112 provides the authority for
the BOE authority to adopt HRS chapter 91
rules, it does not establish a process separate
from HRS chapter 91 that would give Regu-
lation 5208 the force and effect of law.

Further, HAR chapter 8-8 (2012) (Rules
Applicable to Rulemaking Proceedings) does
not provide authority to support the conten-
tion that Regulation 5208 has the force and
effect of law. HAR chapter 8-8 applies to

HRS chapter 91 rules and sets forth similar
procedures to HRS chapter 91 that the BOE
must follow when adopting and amending
HRS chapter 91 rules. Thus, HAR chapter 8-
8 does not set forth a separate and distinct
rulemaking process apart from HRS chapter
91, but instead, aligns the BOE’s procedures
with HRS chapter 91.

In conclusion, Regulation 5208 does not
have the force and effect of law. Rather,
Regulation 5203 is an internal policy within
the School Code that may be amended at any
time, While this court does not condone un-
derpaying DOE teachers in violation of DOR
policy, here, the applicable law does not pro-
vide a basis for the teachers’ entitlement to
hourly back wages. Thus, Regulation 5208
was not incorporated into the PTTs’ con-
tracts, and the circuit court erred in granting
summary judgment in favor of Plaintiffs for
their hourly back wages contract claims,

C. Plaintiffs Are Not Entitled to Interest
Under HRS § 103-10
HM The State argues that the ICA has
already ruled in Garner I that the teachers
are not entitled to prejudgment interest, and

that Plaintiffs cannot “ignore the law of the
case” and “try again on another theory” and
a “different statute on remand.” The State
also argues that because Plaintiffs prevailed
only on the theory that there was an express
contract between the teachers and the DOE,
the only waiver of sovereign immunity as to
that claim is under HRS chapter 661, and
that the teachers are attempting to cireum-
vent HRS § 661-8 by referring to HRS
§ 108-10. The State argues that HRS § 661-8
provides that no prejudgment interest is al-
lowed except in certain instances, which are
not present here, and that any doubt must be
resolved in favor of the State. Further, the
State argues that HRS § 103-10 does not
apply because it should be applied only to
contractors in “complex, high value claims”
covered by the Procurement Code.

Kawashima Plaintiffs argue that HRS
§ 661-8 does not preclude the right to inter-
est because HRS § 108-10 is an “immunity-
waiving, money-mandating statute” that con-
fers a right to interest which “cannot be
nullified because litigation ensues after an
agency fails to pay.” Kawashima Plaintiffs
also argue that HRS § 103-10 applies broad-
ly to anyone who provides services to the
State under a contract, and that the complex-
ity of the claim does not have a role in the
application of the statute,

The Garner circuit court found that the
substitute teachers were entitled to interest
on their per diem and hourly back wages
under HRS § 108-10, reasoning that the con-
tract between the parties incorporated appli-
cable state law, including HRS § 103-10, and
thus HRS § 108-10 “constitutes a contract
expressly stipulating for the payment of in-
terest as required under [HRS] 661-8.”

In contrast, the Kawashima circuit court
found that the PTTs were not entitled to
interest on their hourly back wages under
HRS § 108-10, agreeing with the State’s con-
tentions that sovereign immunity under HRS
§ 661-8 applied, and that immunity is waived
only if the contract “calls for prejudgment
interest.” The Kawashima cireuit court fur-
ther determined that HRS § 108-10 did not
apply here, and that the purpose and intent
of HRS § 108-10 was to “address goods and
services being provided by independent con-

tractors, small business people,” and “maybe
persons in general” that are “not considered
a contractor but [are] providing a service or
goods to the State.”

We begin our analysis by addressing the
threshold question of whether the ICA’s
holding in Garner I precludes the award of
interest on another theory here. We conclude
that it does not. The State’s reliance on
Taylor-Rice y. State, 105 Hawai'i 104, 94 P.8d
659 (2004) to support its contention the ICA
has already ruled that the teachers are not
entitled to interest is misplaced. In the un-
derlying case, defendant Leigh and defen-
dant-appellee, State of Hawai'i, were found to
be “joint tortfeasors in an action arising from
a single-car accident.” Id, at 106, 94 P.8d at
661. In its judgment, the civeuit court found
that “(1) the defendants were jointly and
severally liable for damages, costs, and post-
judgment interest and (2) Leigh was solely
liable for pre-judgment interest.” Id. This
court determined that the plaintiffs did not
“argue that the circuit court erred in failing
to hold the State liable for pre-judgment
interest.” Id. Therefore, this court deter-
mined that “because the plaintiffs did not
challenge the circuit court’s failure to hold
the State liable for pre-judgment interest,
the plaintiffs ‘must be held to acquiesce in’
the judgment and are precluded from now
challenging it.” Id.

Here, the issue of whether the teachers
are entitled to interest under HRS § 103-10
has not been foreclosed by the ICA’s Garner
I decision, which was an interlocutory appeal.
‘While the ICA ruled in Garner I that the
substitute teachers were not entitled to pre-
judgment interest under HRS §§ 661-8 and
478-2, it did not make a determination re-
garding whether the substitute teachers
were entitled to interest on their back wages
under HRS § 108-10, Contrary to the argu-
ment of the State, that ruling is not the “law
of the case” with regard to a completely
distinct theory that was not raised or ad-
dressed in that interlocutory appeal.

HH Turning to the merits, HRS chapter
661, which is entitled “Actions By And
Against the State,” provides:

No interest shall be allowed on any claim

up to the time of the rendition of judgment

thereon by the court, unless upon a con-

155

tract expressly stipulating for the payment

of interest, or upon a refund of a payment.

into the “litigated claims fund” as provided
by law.
HRS § 661-8.

Here, the record does not support the
conclusion that the teachers’ contracts ex-
pressly stipulated for the payment of inter-
est. The teachers’ contracts at issue, which
consist of an “Application for Part-Time
Temporary Teacher Position (Form 150)”
and a “Payroll Understanding” form, do not
expressly state that the teachers will be enti-
tled to the payment: of interest,

However, Kawashima Plaintiffs further ar-
gue that HRS § 661-8 does not preclude an
award of interest because HRS § 103-10 is
an “immunity-waiving, money-mandating
statute.” This court has stated that statutory
waivers of sovereign immunity will be strictly
construed and that “a waiver of sovereign
immunity must be unequivocally expressed in
statutory text, and legislative history cannot
supply a waiver that does not appear clearly
in any statutory text,” nor can sovereign
immunity be waived based on policy argu-
ments. Taylor-Rice, 105 Hawaii at 110, 112,
94 P.8d at 668, 667, Therefore, any ambiguity
as to whether HRS § 108-10 expressly
waives sovereign immunity regarding pay-
ment of interest should be construed in favor
of the State,

As set forth below, the plain language of
HRS § 108-10 is ambiguous as to whether it
applies in the instant case, Accordingly, we
refer to the Findings and Purpose section of
Act 292 (which was codified as HRS § 103-
10), and HRS § 108-10’s legislative history,
in order to resolve that ambiguity, and con-
clude that HRS § 108-10 does not apply
here,

HRS § 103-10 (Payment for goods and
services) provides in pertinent part:
(a) Any person who renders a proper
statement for goods delivered or services
performed, pursuant to contract, to any
agency of the State or any county, shall be
paid no later than thirty calendar days
following receipt of the statement or satis-
factory delivery of the goods or perform-
ance of the services. In the event circum-

156

stances prevent the paying agency from
complying with this section, the person
shall be entitled to interest from the pay-
ing agency....
(b) This section shall not apply in those
cases where delay in payment is due to:
(1) A bona fide dispute between the
State or any county and the contractor
concerning the services or goods contract-
ed for;
(2) A labor dispute;
(8) A power or mechanical failure;
(4) Fire;
(5) Acts of God; or
(6) Any similar circumstances beyond
the control of the State or any county.
Plaintiffs argue that HRS § 108-10 broad-
ly applies to “any person,” and that the term
“contractor” includes the teachers because
the plain language definition of “contractor”
is “anyone who provides services under a
contract.” Further, they suggest that the def-
inition of “contractor” in HRS § 108D-104 (a
“[clontractor means any person having a con-
tract with a government body”), supports

their argument that HRS § 108-10 applies to
the teachers in the instant case.

However, other provisions in the relevant
statutes suggest that HRS § 103-10 does not
encompass claims for wages brought by
State employees, such as those at issue here,
Relevant to our interpretation of HRS § 103-
10, HRS § 108-15 (1993) (Definitions) pro-
vides that: “The definitions of chapter 108D
[Hawaii Public Procurement Code)] shall
apply to [HRS] chapter [108] unless the con-
text clearly requires otherwise.” Under HRS
§ 108D-104 (19938) (Definitions), “contract”
means “all types of agreements, regardless of
what they may be called, for the procure-
ment or disposal of goods or services, or for
construction,” Also pursuant to HRS § 108D-
104, “procurement” means:

buying, purchasing, renting, leasing, or
otherwise acquiring any good, service, or
construction. The term also includes all
functions that pertain to the obtaining of
any good, service, or construction, includ-
ing description of requirements, selection
and solicitation of sources, preparation and
award of contracts, and all phases of con-
tract administration,

Thus, the plain language of HRS § 103-10
and the applicable definitions under HRS
§ 103D-104 indicate that the type of contract
referred to in HRS § 108-10 includes “agree-
ments ... for the procurement or disposal of
goods or services, or for construction.” Ap-
plying those provisions here, it appears that
the teachers’ contracts are not agreements
for the procurement of goods or services as
provided for in HRS § 108D-104 and the
Procurement Code. The teachers are not sell-
ing goods or services, but rather are being
compensated as employees in accordance
with their contracts with the State. Under
this interpretation, the teachers’ contracts
would not be the type of contracts governed
by HRS § 103-10.

Due to the ambiguity in the plain language
of HRS § 103-10 and these related provi-
sions, we turn to the Findings and Purpose
section of Act 292, which was later codified as
HRS § 108-10, for guidance. See Poe v. Haw.
Labor Relations Bd., 97 Hawai'i 528, 540, 40
P.8d 980, 942 (2002) (determining that state-
ments of findings and policy may be used to
clarify ambiguities as a “guide for determin-
ing legislative intent and purpose”). The
Findings and Purpose section supports the
conclusion that HRS § 108-10 does not apply
to the teachers in the instant case. The sec-
tion reads as follows:

SECTION 1. Findings and Purpose. The

legislature finds that a substantial number

of contractors selling goods and services to
the state and county governments must
frequently wait 90 to 120 or more days to
receive payment, The purpose of this Act
is to require prompt payment on govern-
ment contracts,

1967 Haw. Sess. Laws Act 292, § 1 at 464.

Thus, the Findings and Purpose section of
Act 292 indicates that the legislature intend-
ed HRS § 108-10 to be applied to “contirac-
tors selling goods and services.” (Emphasis
added.) Plaintiffs are not “contractors” who
are selling “goods and services,” but rather
are employees of the State. If the legislature
intended HRS § 108-10 to apply to any gov-
ernment employee, such as the teachers in
the instant case, the legislature could have
explicitly stated that in the plain language of
HRS § 103-10. However, the legislature did

not provide any statutory language that ex-
plicitly makes HRS § 103-10 applicable to
the type of contracts in this case.

Further, the legislative history also sup-
ports the interpretation that HRS § 108-10
‘was not intended to be applied to the teach-
ers’ contracts at issue in the instant case.
With respect to HRS § 108-10, the Senate’s
Federal-State-County Relations and Govern-
ment Efficiency Committee stated that:

The purpose of this bill is to require rea-

sonably prompt payments by the state to

contractors for goods delivered or services
rendered and to require the payment of
interest at the rate of one-half of one per-
cent per month on balances unpaid within

a prescribed period.

Under present conditions, many [business-

persons] providing goods and services to

State agencies have had to wait between

90 to 120 days after presentation of in-

voices before receiving payment.

§. Stand. Comm. Rep. No. 668, in 1967 Sen-
ate Journal, at 1152,

The teachers here are not “businessper-
sons” who provide goods and services to
State agencies. Instead, the teachers are gov-
ernment employees who are working pursu-
ant to employment contracts with the State.

In sum, both the Findings and Purpose
section in Act 292 and the relevant legislative
history support the conclusion that HRS
§ 103-10 does not apply to Plaintiffs’ claims
here. Moreover, as noted above, any ambigui-
ty concerning a waiver of sovereign immunity
should be construed in favor of the State.
Accordingly, Plaintiffs are not entitled to in-
terest on their back wages.

V. Conclusion

In sum, the circuit court in both Kawashi-
ma and Garner erred in: (1) determining that
Regulation 5208 is an HRS chapter 91 rule,
and (2) granting summary judgment in favor
of Plaintiffs for their hourly back wages con-
tract claims. In Garner, the circuit court
further erred by finding that Plaintiffs were
entitled to interest on their per diem and
hourly back wages under HRS § 103-10.

For the foregoing reasons, the circuit
court’s May 19, 2015 judgment in Garner is
reversed and remanded for entry of judg-
ment in favor of the State. Additionally, cir-

157
cuit court's May 18, 2015 judgment in Kawa-

shima is affirmed in part to the extent that
the circuit court determined that Plaintiffs
are not entitled to interest under HRS
§ 103-10, and reversed on all other remain-
ing grounds and remanded for entry of judg-
ment in favor of the State.

398 P.3d 746
STATE of Hawai‘i, Respondent/Plaintiff-
Appellee,

v.

Ryan NAKAMITSU, Petitioner/Defendant-
Appellant.

SCWC-14-0001151
Supreme Court of Hawai‘.
JUNE 29, 2017

Yo}
=

Alen M. Kaneshiro, for Petitioner/Defen-
dant-Appellant.

Keith M. Kaneshiro, Honolulu, Sonja P,
McCullen, for Respondent/Plaintiff-Appellee.

RECKTENWALD, C.J., NAKAYAMA,
McKENNA, POLLACK, AND WILSON,
Jd.

1, Nakamitsu was charged with one count of Op-
erating a Vehicle Under the Influence of an In-
toxicant under the two alternate (and/or) statuto-
ty bases of HRS § 291B-61(a)(1) and HRS
§ 291E-61(a)(3). Roughly speaking, HRS
§ 291B-61(a)(1) prohibits operating a vehicle
while impaired by an intoxicant, while HRS
§ 291E-61(a)(3) prohibits operating a vehicle
while the driver's blood alcohol content exceeds
a statutorily-specified level. Because the two bas-
es can overlap, they are often charged in the
conjunctive/disjunctive, See State v, Codiamat,
131 Hawai'i 220, 224, 317 P.3d 664, 668 (2013)
(noting that “the preferred method for charging
an offense that may be committed in more than
one way is to charge in the conjunctive/disjunc-

159

OPINION OF THE COURT BY
WILSON, J.

Petitioner/Defendant-Appellant Ryan Na-
kamitsu (Nakamitsu) was convicted of one
count of Operating a Vehicle Under the In-
fluence of an Intoxicant (OVUID in violation
of Hawai'i Revised Statutes (HRS) § 291E-
61(a)(1) and/or § 291E-61(a)(8).1 The Inter-
mediate Court of Appeals (ICA) vacated the
conviction for OVUII based on HRS § 291E-
61(a)(1), reversed the conviction for OVUII
based on HRS § 291H-61(a)(8), and remand-
ed for proceedings consistent with its opin-
jon,

In essence, Petitioner Nakamitsu argues
that his conviction under HRS § 291H-
61(a)(1) should be reversed rather than va-
eated and remanded for a new trial, Four
principal issues are presented on certiorari,
‘The first three issues are raised by Nakamit-
su: (1) whether the ICA gravely erred in
holding that the charge was not fatally defec-
tive for failing to include the statutory defini-
tion of the term “alcohol”; (2) whether the
ICA gravely erred in holding that the district
court did not err in denying Nakamitsu’s
motion to strike Officer Desiderio’s testimo-
ny; and (8) whether the ICA gravely erred in
holding that there was substantial evidence
to support Nakamitsu’s conviction under
HRS § 291E-61(a)(1). We consider sua
sponte a fourth issue, whether the district
court’s admonishment of Nakamitsu for his
decision to pursue trial violated his constitu-
tional rights to due process and against self-
incrimination,

We hold that the ICA did not err concern-
ing the first and third issues. We find it
unnecessary to consider the second issue as

tive—alleging that the defendant committed the
offense in one way and/or in another way.”).

HRS § 291E-61 (2007) provides in relevant

part:

(a) A person commits the offense of operating
a vehicle under the influence of an intoxi-
cant if the person operates or assumes
actual physical control of a vehicle:

(1) While under the influence of alcohol in
an amount sufficient to impair the person’s
normal mental faculties or ability to care for
the person and guard against casualty; [or]

(3) With .08 or more grams of alcohol per
two hundred ten liters of breath{]

160

to whether the ICA erred in affirming the
district court’s denial of Nakamitsu’s motion
to strike Officer Desiderio’s testimony. On
the fourth issue, we find that the district
court’s admonishment of Nakamitsu may
have violated his constitutional rights to due
process and against self-incrimination. We
affirm the judgment of the ICA vacating the
conviction for OVUII in violation of HRS
§ 291E-61(a)(1), reversing the conviction for
OVUII in violation of HRS § 291E-61(a)(3),
and remanding for a new trial.

I. BACKGROUND

A. District Court Proceedings

Nakamitsu is an engineer at Pearl Harbor.
In June, 2014, the State charged Nakamitsu
with one count of Operating a Vehicle Under
the Influence of an Intoxicant as a first time
offender.”

Nakamitsu filed a Motion to Dismiss Count
1 for Failure to State an Offense.’ He argued
that the OVUII charge in Count 1 was insuf-
ficient because it failed to include the defini-
tion of “alcohol” as defined in HRS § 291E-1.
The State opposed the Motion, arguing that
the Complaint’s reference to “alcohol” was
consistent with its commonly-understood
meaning. After a hearing, the court denied
the Motion.

1. Direct Examination of Officer De-
siderio

At trial, Officer Desiderio testified that he
responded to a vehicular accident on June 1,
2014 around 4:50 a.m. Upon arriving at the
scene, he saw a vehicle on the side of the
road in front of a light post that had fallen to
the ground. A man (later identified as Na-
kamitsu) walked from the vehicle and knelt
on the side of the road. Nakamitsu told Offi-
cer Desiderio that he had been driving the
vehicle, and then began crying. Officer De-
siderio detected the smell of alcohol on Na-
kamitsu’s body and breath. Officer Desiderio

2, In Count 2, Nakamitsu was charged with Inat-
tention to Driving under HRS § 291-12. He en-
tered a plea of no contest, and his motion for
deferred acceptance of his plea was granted. In
Count 3, Nakamitsu was charged with Driving
Without Motor Vehicle Insurance under HRS
§§ 431:10C-104(a)and 431:10C-117(a), However,
Count 3 was not prosecuted after Nakamitsu
provided proof of insurance.

testified that Nakamitsu was attempting to
balance himself and uttering something ap-
proximating “I’m fucked, I’m fucked.” Officer
Desiderio then conducted a Standardized
Field Sobriety Test (SFST). Nakamitsu ex-
hibited six clues, and failed the Horizontal
Gaze Nystagmus (HGN) portion of the test.
According to Officer Desiderio, during the
Walk-and-Turn section of the test Nakamitsu
kept trying to keep his balance.

On direct examination, in regard to the
Walk-and-Turn and One-Leg Stand segments
of the test, the State refreshed Officer Desid-
erio’s recollection with a copy of his SFST
report:

[STATE]: Do you remember what—any
clues exhibited during the instructional
portion of the ... [Walk and Turn] test?

[OFFICER DESIDERIO}: Can’t recall
it. I have it in my report that I submitted.

[STATE]: Would anything refresh your
recollection?

{OFFICER DESIDERIO]: Yes, my re-
port that I submitted.

{STATE}: Officer, is—you recognize this
document?

[OFFICER DESIDERIO]: Yes, ma’am.

[STATE]: What is this?

{OFFICER DESIDERIO]: This is—
what we use for [sic] SFST sheet, the
standard—

[STATE]: Is this the ..
you used that night?

[OFFICER DESIDERIO}: Yes, ma’am.

[STATE]: Can you refresh your recollec-
tion.

[OFFICER DESIDERIO}: Okay.

After a further exchange regarding the
‘Walk-and-Turn segment of the test, the State
then asked Officer Desiderio about Nakamit-
su’s performance on the One-Leg Stand test:

. [SIFST sheet

3, Nakamitsu also filed a Motion to Suppress his
Blood Alcohol Level (BAC) result, arguing that
Hawai’i’s implied consent law and the HRS
Chapter 291E provisions criminalizing the refus-
al to submit to BAC testing were unconstitution-
al. The district court summarily denied the mo-
tion at trial.

4, The Honorable David W. Lo presided.

[STATE]: And do you recall what you
observed?
(OFFICER DESIDERIO}: Yes. Every-
thing is recorded in the report I submitted.
STATE]: All right.... [Hlow many
clues can be exhibited? Do you remember?
OFFICER DESIDERIO}: No, I don’t.

LK
STATE}: Would you like to—
STATE]: —refresh your memory --
[STATE]: —with your report?

OFFICER DESIDERIO]: —yes.

[STATE]: Do you independently remem-
ber this, once you looked at your report?
Do you remember how [Nakamitsu] did on
the test?
OFFICER DESIDERIO]: Yeah, some-
what remember.

STATE]: Okay. And do you remember
what you observed about how he did the
test?

OFFICER DESIDERIO}: Basically, he
hops. II do remember [him] putting his
foot down at 19 seconds and [sic] kind of
swayed sideways. And then—yeah, he
wasn’t able to keep his balance during that
time.

[STATE]: Officer, how many clues did
he exhibit on the one-leg stand, do you
remember?

[OFFICER DESIDERIO]: At least—I
would say four or more,

2, Cross-Examination of Officer Desid-
erio
During cross-examination, Officer Desider-
io described the National Highway Traffic
Safety Administration (NHTSA) standards
for administering and grading the SFST. He
testified that, in order to be valid, the SFST
must be administered and graded in accor-
dance with the NHTSA. Nakamitsu’s counsel
proceeded to ask Officer Desiderio about Na-
kamitsu’s performance on the SFST:
[NAKAMITSU’S COUNSEL]: Now, on
‘Wednesday you testified that [Nakamitsu]
took several more steps than instructed on
the walk-and-turn. But isn’t it true that he
only took one extra step?

161

OFFICER DESIDERIO]: Whatever it
is in my report, that I wrote in there,
that’s basically what it—

NAKAMITSU’S COUNSEL]: If I
showed you a copy of your report would
... it refresh your recollection,

OFFICER DESIDERIOI: Yes.

Yes. So on the first nine step [sic], took
an additional one. And I believe that’s the
reason why I—I did put that made the
turn, not as instructed.

NAKAMITSU’S COUNSEL]: Okay.
But not several extra steps, just one; cor-
rect?

OFFICER DESIDERIO]: I believe so.

Officer Desiderio continued to testify with-
out the aid of his report that while Nakamit-
su performed the Walk-and-Turn test, the
officer was facing the sidewalk, standing mid-
way between the starting and turn points of
the imaginary line used for the test. When
asked if Nakamitsu walked off the line dur-
ing the first set of steps, Officer Desiderio
said he would need his report to refresh his
memory. Nakamitsu’s counsel then asked Of-
ficer Desiderio if he had any independent
recollection of the SFST, or if his testimony
was solely based on his reading the SFST

_Peport:

[NAKAMITSU’S COUNSEL]; Okay.
Now, when the prosecutor was asking you
questions and when I’m asking you ques-
tions ... you need to refer to your report
to testify about what your recollection is
of—of this particular field sobriety test;
correct?

OFFICER DESIDERIO]: Yes.
[NAKAMITSU’S COUNSEL]: Do you
have any independent recollection of ...
Nakamitsu’s performance on the test? Or
is it, basically, just reading from your re-
port?

OFFICER DESIDERIO]: I do have
independent recollection, not necessarily of
the—when he was taking the test.
{NAKAMITSU’S COUNSEL]: Okay. So
you remember the incident?

OFFICER DESIDERIO): Yes.
NAKAMITSU’S COUNSEL]: You re-
member Mr, Nakamitsu?

OFFICER DESIDERIO]: Yes.

162

NAKAMITSU’S COUNSEL]: You re-
member administering the test to him?
OFFICER DESIDERIO]: Yes.
NAKAMITSU’S COUNSEL]: But the
details of the results you don’t remember?
OFFICER DESIDERIO]: Whatever I
wrote in there—because while I was test-
ing, okay, I'll be, like, making tick marks,
either when I was (indiscernible) if I have
a glove or right on my hand.

[NAKAMITSU’S COUNSEL]: Without

looking at your writing or your notes or

the—your report, you're not able to testify
about his performance on the field sobriety
test?

OFFICER DESIDERIO]:
would need my report.
Nakamitsu’s counsel moved to strike Offi-

cer Desiderio’s testimony describing Nakam-

itsu’s SFST on the grounds that the officer
could not testify without his report. The

State responded that Officer Desiderio could

recall details surrounding the SFST, but

could not be expected to remember all details
about Nakamitsu’s performance without the
aid of his report, The district court denied

Nakamitsu’s motion.

Well, I

8, Testimony of Officer Tabanera

Officer Tabanera testified that on June 1,
2014, at approximately 4:15 a.m., he arrived
at the scene of the accident and observed
that Nakamitsu’s eyes were red and glassy.
Officer Tabanera also testified that Nakamit-
su smelled like alcohol. Officer Tabanera in-
vestigated the accident and observed Nakam-
itsu’s vehicle resting at the base of a street
light pole, and the pole dislodged and laying
on the ground. The front bumper and engine
area of Nakamitsu’s vehicle were severely
damaged. Officer Tabanera did not see any
marks on the road that would have resulted
from use of a vehicle’s brakes, and he did not
observe any other vehicles or obstructions on
the road,

4, District Court Ruling and Sentenc-
ing

The court found Nakamitsu guilty as

charged under both HRS § 291E-61(a)(1)

and HRS § 291E-61(a)(8), deciding that Offi-

cer Desiderio’s testimony was unnecessary
for the conviction:

THE COURT: Court finds the evidence
beyond a reasonable doubt to find [Nakam-
itsu] guilty on both the 291B-61(a)(1) as
well as the [291E]-61(a)(8) charge. And the
court finds [Nakamitsu] guilty based on
what happened,

And Court also finds that evidence con-
cerning the [SFST], while there is some
questions as to the weight or ... the man-
ner in which Officer Desiderio gave his
testimony that it was not even necessary to
convict the defendant, find the defendant
guilty on the (a)(1) charge.

After issuing the court ruling, the district,
judge asked Nakamitsu for any final words
before imposing the sentence. Nakamitsu ex-
pressed remorse for his actions affecting his
job and family, and apologized to the court.
The judge then heard from the State, which
asked for a $500.00 fine and minimum sen-
tencing. Nakamitsu’s counsel agreed to the
$500.00 fine, acknowledging his client’s re-
morse. The judge accepted Nakamitsu’s apol-
ogy, but raised his concern that Nakamitsu
did not readily accept responsibility at the
outset of trial:

[THE COURT]: I am totally convinced
he’s very remorseful. I’m totally convinced
that it’s not going to happen again, I really
find that Mr, Nakamitsu was remorseful at
the scene of the accident. But what bothers
the Court the most is that acceptance of
responsibility was not readily done,

[COUNSEL FOR NAKAMITSU}: And,
Your Honor, there are cases—there are
cases where we—people are not willing to
aecept responsibility because they are just
not those types of people. In this case
there are two legal issues that I explained
to Mr. Nakamitsu and explained the issues
on appeal. And it’s not because he didn’t
want to accept responsibility; it was be-
cause these issues are out there and we
would like to appeal.

[THE COURTI: I mean, does he have to
hit a person on the sidewalk for you folks
to accept responsibility? I mean, that’s—
the conduct is no different. That’s what I
find so bothersome,

[COUNSEL FOR NAKAMITSU}: I un-
derstand.

[THE COURT]: And you were warned
about this. You guys wanted to play with
fire, and somebody's going to get burned.

[THE COURT: What is it going to take
to accept responsibility? You know, after
Wednesday's testimony—I didn’t want to
pre-judge this case, but just on what hap-
pened, this is a person that should be in
jail. So you guys want to play with fire,
you suffer the consequences. Someone’s
going to get burned. All I can say is, best
of luck on appeal. But I have to do what I
have to do.

[COUNSEL FOR NAKAMITSU]: Yes,
Your Honor.

[THE COURT]: You're not the type I
think needs to go to jail, Mr. Nakamitsu,
But what really bothers me is your—the
four of you discussing that you want to roll
the dice.

You know, somebody on your behalf
came to court on June 80th, within 30 days
after this incident. If you’re really re-
morseful, that’s when responsibility should
have been taken. I don’t fault you. You
hired an attorney. You hired a good attor-
ney, that advised you. I think all of you
made the wrong decision. That's what I
find bothersome,

[COUNSEL FOR NAKAMITSU]: And,
Your Honor, I—I—I would ask that, you
know, maybe my advice wasn’t—wasn’t the
good advice; but I would—I would ask you
to not take that out against my client. I—I
understand that ultimately it’s his choice.
But he hires an attorney for advice. If
you're going to take it out against some-
body, I ask that you take it out against me
and—not my client.

[THE COURT]: Well, I am.

[COUNSEL FOR NAKAMITSU]: Yeah.

[THE COURT}: And, you know, I don’t
want to take it out against any—any—
any—any—any defendant personally. But,
Mr. [Counsel for Nakamitsu], I've been
talking to you for over a year now—and
Tm going to put this on the record,

[COUNSEL FOR NAKAMITSU]:
Okay.

. We recently upheld the ICA’s holding in Tsu-
jimura that “alcohol” is not limited to alcohol
produced through distillation, but we vacated the
judgment and remanded the case for a new trial

163

[THE COURT]: I admire you as an
attorney, but you have a history of all take
and no give. I don’t—I don’t see you ac-
cepting responsibility when you should,

You were warned about this. I told you
on Wednesday, I asked you, you want to
roll the dice on this one? You say, let me
talk to my client, All right, talk to him; and
that was his decision. But you guys want to
play with fire, you're going to get burned,
guarantee.

Status of the license?

{THE COURT]: I’m revoking it for one
year, forthwith. 750 dollar fine. Undergo
substance abuse assessment and classes,
107 DE. 30 CVOF. 25 neurotrauma, 100
DDRA.

You know, my thoughts were to—to give
you 1,000 dollar fine and—and make you
perform 72 hours of community service, as
well. I'll back off on that, All right. That’s
all,

B. ICA Decision

In a memorandum opinion, the ICA af-
firmed the district court’s rulings regarding
the issues raised by Nakamitsu in his appeal.
First, the ICA explained that in State v.
Turping, 186 Hawai'i 388, 361 P.8d 1286
(App. 2015), the court rejected the argument
that a charge was deficient for failing to
include the definition of alcohol. The ICA
also noted its previous rejection of the argu-
ment that alcohol, as defined by HRS
§ 291E-1, is limited to distilled forms in
State v. Tsujimura, 187 Hawai'i 117, 120, 366
P.8d 178, 176 (App. 2016), as corrected (May
2, 2016). The ICA in Tsujimura read the
plain language of HRS § 291H-1’s definition
of “alcohol” as specifically including ethyl
alcohol. Because ethyl alcohol is the intoxi-
cating agent in beer and wine, the Tsujimura
court reasoned that the statutory definition
includes both beer and wine, as well as dis-
tilled liquors. Id, at 120, 366 P.8d at 1765

Second, regarding the admissibility of Offi-
cer Desiderio’s testimony, the ICA concluded

on constitutional grounds. State v. Tsujimura,
140 Hawai'i 299, 307-08, 319, 400 P.3d 496,
508-09, 520, 2017 WL 2361154, at *6-7, *18
(May 31, 2017).

164

that “although Officer Desiderio’s recollec-
tion of Nakamitsu’s performance on the
SFST had to be repeatedly refreshed, his
testimony was not based on his memory of
the report only” because Officer Desiderio
remembered significant details about the in-
cident prior to refreshing his memory with
the report, and did not state that his testimo-
ny was based only on reading the report.
Third, the ICA examined the record of the
two colloquies required in cases where a
defendant chooses not to testify: (1) the “pri-
or-to-trial colloquy,” and (2) the “ultimate
colloquy.” Although Nakamitsu had not
raised the issue, the ICA reviewed it for
plain error. In light of Tachibana vy. State, 79
Hawai'i 226, 286, 900 P.2d 1298, 1803 (1995),
the ICA held that the ultimate colloquy be-
tween the district court and Nakamitsu was
deficient. Because the ICA could not say that
the deficiency was harmless beyond a reason-
able doubt, it vacated Nakamitsu’s conviction
for OVUII under HRS § 291E-61(a)(1).
Fourth, having determined that the ulti-
mate colloquy was deficient and that it was
not harmless error, the ICA conducted a
review of the sufficiency of the evidence to
convict. See State v. Davis, 188 Hawai'i 102,
120, 824 P.3d 912, 980 (2014) (given the con-
stitutional protection against double jeopar-
dy, as well as policy reasons, “a reviewing
court is required under article I, section 10 of
the Hawai'i Constitution to address a defen-
dant’s express claim of insufficiency of the
evidence prior to remanding for a new trial
based on a defective charge.”) The ICA
found sufficient evidence to convict Nakamit-
su of OVUII in violation of HRS § 291E-
61(a)(1). It based this conclusion on Officer
Desiderio’s testimony that Nakamitsu walked
away from a vehicle on the side of the road
that was in front of a fallen light post, that he
smelled of alcohol, tried to balance himself,
knelt down, and volunteered expletives la-
menting the seriousness of his actions, and
that he had failed the SFST. In reaching its
holding, the ICA also considered Officer Ta-
banera’s testimony that Nakamitsu had red
and glassy eyes, that the vehicle’s front

6. Nakamitsu does not appeal the ICA’s favorable
holdings regarding the deficiency of the ultimate
colloquy and the insufficiency of the evidence to
support a conviction under HRS § 291E-
61(@)(3).

bumper and engine were severely damaged,
and that there were no marks on the road
suggesting the vehicle’s brakes were applied.

Fifth, the ICA held that the district court
erred in denying Nakamitsu’s motion in li-
mine to suppress his blood alcohol content,
measurement, Without the inadmissible BAC
evidence, there was insufficient evidence to
support the conviction for OVUII under HRS
§ 291B-61(a)(8). Accordingly, the ICA re-
versed Nakamitsu’s conviction under HRS
§ 291B-61(a)(8).$

Ii STANDARDS OF REVIEW
A. Statutory Interpretation

HB “When construing a statute, this
court’s foremost obligation is to ascertain and
give effect to the intention of the legislature,
which is to be obtained primarily from the
language contained in the statute itself. In
addition, we must read statutory language in
the context of the entire statute and construe
it in a manner consistent with its purpose.”
State v. McKnight, 181 Hawai'i 379, 888, 319
P.8d 298, 807 (2018) (citations, internal quota-
tion marks, and brackets omitted).

B. Sufficiency of the Evidence

HMMM ‘(Elvidence adduced in the trial
court must be considered in the strongest
light for the prosecution when the appellate
court passes on the legal sufficiency of such
evidence to support a conviction.... The test
on appeal is not whether guilt is established
beyond a reasonable doubt, but whether
there was substantial evidence to support the
conclusion of the trier of fact.” State v. Ri-
chie, 88 Hawai'i 19, 83, 960 P.2d 1227, 1241
(1998) (citation omitted).

Ill, DISCUSSION

A. The OVUII Charge Was Not Defective
for Failing to Define “Alcohol”

HM On appeal, Nakamitsu argues the
ICA gravely erred in holding that the OVUII
charge was not fatally defective for failing to
define “aleohol.” According to Nakamitsu,
the definition of “aleohol” in HRS § 291E-17

7. For purposes of the OVUII offense at issue
here, “alcohol” is defined as follows:

Alcohol means the product of distillation of
any fermented liquid, regardless of whether

is limited to the products of distillation, and
does not include beer or wine. He argues
that a plain reading of the definition shows
that for purposes of the statute, “alcohol”
only encompasses “products of distillation”—
ie, liquor. Thus, he contends the OVUII
charge did not adequately inform him of the
nature and cause of the accusation against
him because it failed to include the definition
of aleohol.

We recently addressed this issue in State
vy. Tsujimura, 140 Hawai'i 299, 807-08, 400
P.8d 496, 508-09, 2017 WL 2861154, at *6-7
(May 81, 2017), Like Nakamitsu, the defen-
dant in Tsujimura argued that the definition
of “alcohol” in HRS § 291H-1 is limited to
the products of distillation, After carefully
analyzing the statute, we concluded that the
meaning of “alcohol” in that statute “is inclu-
sive of ethyl alcohol, also commonly known as
ethanol, which ‘is the intoxicating agent in
beer, wine, and other fermented and distilled
liquors.’ Accordingly, the statutory definition
of ‘alcohol’ includes beer, wine, and other
fermented liquors because these substances
contain ethanol.” Tsujimura, 140 Hawai‘ at
307, 400 P.8d at 508, 2017 WL 2861154, at “7
(citation omitted, footnotes omitted), Given
our recent holding in Tsujimura, we conclude
that the ICA properly determined that Na-
kamitsu’s charge was not fatally defective for
failing to include the statutory definition of
“alcohol.”

B. Substantial Evidence Supports Na-
kamitsu’s Conviction Under HRS
§ 291E-61(a)(1)

Hl In reviewing for sufficiency of the
evidence to support a conviction, we consider
evidence admitted at trial “in the strongest
light for the prosecution.... The test on
appeal is not whether guilt is established
beyond a reasonable doubt, but whether
there was substantial evidence to support the
conclusion of the trier of fact.” Richie, 88

rectified, whatever may be the origin thereof,
and includes ethyl alcohol, lower aliphatic al-
cohol, and phenol as well as synthetic ethyl
alcohol, but not denatured or other alcohol
that is considered not potable under the cus-
toms laws of the United States.

165

Hawai'i at 33, 960 P.2d at 1241 (citation
omitted); Davis, 188 Hawai‘ at 116, 324 P.3d
at 926 (noting that even where the appellate
court finds trial error, “challenges to the
sufficiency of the evidence must always be
decided on appeal” or retrial would raise
double jeopardy concerns (citation omitted).
Nakamitsu argues that without Officer De-
siderio’s testimony regarding the SFST, and
given the absence of any direct evidence
establishing how the accident occurred, there
was insufficient evidence to convict him of
OVUII.

In addition to testifying regarding the
SFST, Officer Desiderio also testified that he
observed the vehicle on the side of the road
in front of a light post that had fallen, and
that Nakamitsu walked away from the vehi-
cle, had some difficulty keeping his balance,
knelt down, cried, admitted he was the driver
of the vehicle, and smelled of alcohol. His
speech was slurred and his face was flushed.
In addition, Officer Tabanera described Na-
kamitsu as having red and glassy eyes and
emitting the smell of an intoxicant. Officer
Tabanera testified that the vehicle had come
to rest on top of the streetlight post, and that
the vehicle’s front bumper and engine area
were severely damaged. He also testified
that there were no marks on the ground
indicating the brakes had been applied, and
that there were no other obstructions on the
roadway.

Considering the testimony of the two offi-
cers in the most favorable light for the prose-
cution, we conclude that—even absent the
testimony of Officer Desiderio regarding Na-
kamitsu’s performance on the SFST—there
was substantial evidence that Nakamitsu op-
erated his vehicle under the influence of alco-
hol in violation of HRS § 291E-61(a)(1). Ac-
cordingly, we find it unnecessary to consider
whether Officer Desiderio’s recollection was
refreshed when he testified about Nakamit-
su’s performance on the SFST.

HRS § 291E-1 (2007). In 2016, the legislature

simplified and clarified the definition. 2016 Haw.

Sess, Laws, Act 231, § 59 (“‘Alcohol’ means
ethanol or any substance containing ethanol.”)

166

©. The District Court’s Admonishment of
Nakamitsu for His Decision to Pursue
Trial May Have Violated His Consti-
tutional Rights to Due Process and
Against Self-incrimination
HI At sentencing, the district court judge
made comments to Nakamitsu and his coun-
sel regarding Nakamitsu’s decision to pro-
ceed with trial. Before discussing those com-
ments, we note that the ICA remanded for a
new trial based on the deficiency of the ulti-
mate colloquy. While we affirm the ICA’s
decision, we nonetheless address this issue in
order to provide guidance regarding a court’s
reliance on a defendant’s refusal to admit
guilt in imposing a sentence, See Chun v, Bd.
of Trustees of Employees’ Ret. Sys. of State
of Hawaii, 92 Hawai'i 482, 484-85, 992 P.2d
127, 129-80 (2000) (noting that although the
court’s holding on one point “is outcome-
dispositive of the present appeal,” the court
would address an additional issue “in order
to provide guidance to the parties and the
circuit court on remand”),

«(De process, as guaranteed under
article I, section 5, of the Hawai'i Constitu-
tion, requires that a defendant be sentenced
by an impartial judge. Peters vy. Jamieson, 48
Haw, 247, 255, 397 P.2d 575, 582 (1964); State
y. Silva, 78 Hawai'i 115, 118, 890 P.2d 702,
705 (1995), abrogated on other grounds by
Tachibana v. State, 79 Hawai'i 226, 900 P.2d
1298 (1995). A judge must remain impartial
during trial, never “assum[ing] the role of an
advocate for either party.” State v. Schutter,
60 Haw, 221, 222, 588 P.2d 428, 429 (1978), If
a judge succumbs to partiality, the resulting
sentence must be set aside. Territory v. Van
Culin, 36 Haw, 153, 162 (1942),

During sentencing, a judge may
consider a defendant’s guilty plea, indications
of remorse, and commitment to rehabilita-
tion. State v, Mata, 71 Haw. 319, 326, 789
P.2d 1122, 1126 (1990), However, a judge
may not “induce a plea of guilty by hinting at
more lenient sentencing without violating ...
a defendant’s constitutional rights,” Id. Nor
may a court “infer a lack of remorse from a
criminal defendant’s refusal to admit guilt.”
State v. Kamana’o, 108 Hawai'i 315, 321, 82
P.8d 401, 407 (2008), as corrected (Dec. 17,

8, The Hawai'i Constitution provides, in relevant
part, “No person shall be deprived of life, liberty

2008), In other words, while lack of remorse
legitimately may be considered as a factor in
sentencing, a court may never cross the line
into attempting “to compel an admission of
guilt or punish the defendant for maintaining
his innocence,” Kamana’o, 103 Hawai'i at 321,
82 P.8d at 407 (citation omitted), Such an
attempt would raise due process questions
concerning the court’s impartiality. It would
also violate the defendant's right against self-
incrimination. See id. at 320-321, 82 P.8d at
406-407 (“Although most commonly reviewed
in the context of the adjudicatory phase of a
trial proceeding, the privilege against self-
incrimination applies with equal force during
sentencing.”).

In Kamana‘o, this court adopted a three-
factor test from the Michigan Supreme Court
to determine whether the sentencing court
erroneously relied on a defendant's refusal to
admit guilt in imposing a sentence. Id, at 323,
82 P.8d at 409, The factors we considered
were (1) the defendant's maintenance of inno-
cence after the conviction, (2) the judge’s
attempt to get the defendant to admit guilt,
and (8) the appearance that, had the defen-
dant affirmatively admitted guilt, his sen-
tence would not have been so severe. Id. We
explained that “if there is an indication of the
three factors, then the sentence was likely to
have been improperly influenced by the de-
fendant’s persistence in his innocence.” Id,
(quoting People v. Wesley, 428 Mich. 708, 411
N.W.2d 159, 162 (1987).

Applying these factors to Nakamitsu’s
ease, we note that the district court clearly
exhibited frustration with Nakamitsu’s deci-
sion to maintain his innocence and assert his
right to trial. The court stated that Nakamit-
su’s expression of remorse at sentencing was
questionable because his counsel did not take
responsibility for the accident at the first
court date, and “[i]f you’re really remorseful,
that’s when responsibility should have been
taken.” The court unequivocally identified
Nakamitsu’s decision not to take responsibili-
ty as “the wrong decision.” Nakamitsu was
told his decision to proceed to trial rather
than plead guilty constituted a decision to

or property without due process of law....”
Haw. Const. art. I, § 5.

“play with fire” for which “you're going to

get burned”:
You were warned about this. I told you on
Wednesday. I asked you, you want to roll
the dice on this one? You say, let me talk
to my client, All right, talk to him; and that
was his decision. But you guys want to
play with fire, you’re going to get burned,
guarantee [sic].

HM Based on this record, it is reasonable
to infer that the sentence was “likely to have
been improperly influenced by the defen-
dant’s persistence in his innocence.” Kama-
na’o, 108 Hawaii at $28, 82 P.8d at 409
(quoting People v. Wesley, 428 Mich. 708, 411
N.W.2d 159, 162 (1987). If the district court
erroneously relied on Nakamitsu’s refusal to
admit guilt in imposing its sentence, that
reliance would have violated Nakamitsu’s
constitutional right to due process and his
right against self-incrimination. See Borden-
Kircher v. Hayes, 484 U.S. 857, 368, 98 S.Ct.
668, 54 L.Ed.2d 604 (1978) (“To punish a
person because he has done what the law
plainly allows him to do is a due process
violation of the most basie sort” (citation
omitted)); Kamana’o, 103 Hawai‘i at 820, 82
P.8d at 406-407, It is not necessary for us to
resolve the question of improper influence in
this case, as we affirm the ICA’s judgment
vacating and remanding for a new trial on
another ground. Nonetheless, we stress that,
under article I, section 5 of the Hawai'i Con-
stitution, a sentencing court may not rely on
a defendant’s persistence in maintaining his
or her innocence in imposing a sentence,

IV, CONCLUSION

The ICA reversed Nakamitsu’s conviction
for OVUII in violation of HRS § 291E-
61(a)(8), vacated his conviction for OVUII in
violation of HRS § 291E-61(a)(1) based on
the deficiency of the ultimate colloquy, and
remanded for a new trial. For the reasons
detailed above, we affirm the ICA’s February
25, 2016 judgment on appeal.

398 P.3d 756

STATE of Hawai‘i, Respondent/Plaintiff-
Appellee,

v

Samuel EAGER, Petitioner/Defendant-
Appellant.

SCWC-14-0001079
Supreme Court of Hawai‘.
JUNE 30, 2017

am

68

. The Honorable Randal K.O, Lee presided.

Shawn A. Luiz, Honolulu, for petitioner.

Loren J. Thomas, Honolulu, for respon-
dent.

RECKTENWALD, C.J., NAKAYAMA,
McKENNA, POLLACK, AND WILSON,
Jd.

OPINION OF THE COURT BY
RECKTENWALD, C.J.

This case requires us to consider whether
a defendant’s failure to take prescription
medication can constitute self-induced intoxi-
cation under Hawai'i Revised Statutes (HRS)
§ 702-230, which precludes the defendant
from relying on the defense of lack of penal
responsibility due to a physical or mental
disease, disorder, or defect. We hold that it
does not, and that the defense is therefore
available in the circumstances presented
here.

Defendant Samuel Eager was charged
with assault in the second degree after at-
tacking a stranger at a bus stop, and a bench
trial was held in the Cireuit Court of the
First Cireuit (civeuit court).! Hager present-
ed the defense of lack of penal responsibility
as a result of disease, disorder, or defect,
arguing that he was experiencing a psychotic
episode at the time of the attack. The State
did not dispute Eager’s psychosis, but ar-
gued that he should nonetheless be held
criminally responsible because his psychosis
stemmed from his failure to take prescribed
medication and from marijuana use, The cir-
cuit court found Eager guilty, concluding
that “any disease, disorder, or defect the
Defendant may have been suffering from at
the time of the assault was self-induced and
the product of the Defendant’s refusal to
take his prescribed medication and his use of
marijuana.” The court sentenced Eager to
five years’ incarceration.

On appeal to the Intermediate Court of
Appeals (ICA), Eager argued that (1) he was
deprived of a fair trial because one expert
witness, Dr. Wagner, improperly bolstered
the opinion of another expert witness, Dr,
Jacobs, and (2) the circuit court abused its
discretion in sentencing Hager to five years’
imprisonment because there were strong mit-
igating factors, making probation a more ap-
propriate sentence. The ICA rejected Ha-
ger’s arguments and affirmed the circuit
court’s judgment of conviction, Eager now
raises the same arguments on certiorari re-
view here,

We agree with the ICA’s reasoning re-
garding Eager’s first point of error. We need
not consider Hager’s arguments regarding
his sentence, as we recognize plain error in
the circuit court’s holding that Eager’s psy-
chotic behavior was the result of self-induced
intoxication. HRS § 702-230(5) (1998) defines
“self-induced intoxication” as “intoxication
caused by substances which the defendant
knowingly introduces into the defendant’s
body, the tendency of which to cause intoxi-
cation the defendant knows or ought to
know.” Accordingly, the cireuit court’s hold-
ing that Eager’s failure to take his medi-
cation caused his psychotic behavior is incon-
sistent with the plain language of the statute,
which requires the introduction of substances
into the body. Thus, the circuit court’s con-
viction of Eager was in error.

2. HRS § 707-711(1)(0) (Supp. 2011) provides:
“A person commits the offense of assault in the
second degree if ... [fhe person recklessly
causes serious bodily injury to another[.]” As-
sault in the second degree is a class C felony.

3. HRS § 706-660.2 (1993) provides, in relevant
part:
Notwithstanding section 706-669, a person
who, in the course of committing or attempt-
ing to commit a felony, causes the death or
inflicts serious or substantial bodily injury
upon a person who is:
(1) Sixty years of age or older;

and such disability is known or reasonably
should be known to the defendant, shall, if not
subjected to an extended term of imprisonment
pursuant to section 706-662, be sentenced to a
mandatory minimum term of imprisonment
without possibility of parole as follows:

(4 For a class C felony—one year, eight
months.

169

We therefore vacate the ICA’s judgment
on appeal and the circuit court’s judgment of
conviction, and remand for further proceed-
ings consistent with this opinion.

I. Background

A. Circuit Court Proceedings

On February 1, 2018, the State charged
Eager with one count of assault in the second
degree in violation of HRS § 707-711(1)(b)?
for recklessly causing substantial bodily inju-
ry to then-79-year-old Hua Zhao Liang
(Liang), and subject to sentencing under
HRS § 706-660.2 °.

Eager filed a “Motion for H.R.S. § 704-
404 1 Examination” to determine his fitness
to proceed to trial and whether he would be
held penally responsible for his conduct. The
circuit court appointed a three-member panel
of examiners: Dr. Leonard Jacobs, Dr. Duke
‘Wagner, and Dr. Olaf Gitter.

Each doctor submitted a report to the
court. The doctors all determined that Hager
‘was fit to proceed, but differed with regard
to penal responsibility. Dr. Jacobs and Dr.
‘Wagner concluded that Eager’s cognitive and
volitional capacities were not substantially
impaired at the time of the alleged assault.
Dr. Gitter concluded that Eager’s capacities
were substantially impaired due to an “acute
manic episode.”

4. HRS § 704-404 (Supp. 2008) provides in rele-
vant part:

(1) Whenever the defendant has filed a notice
of intention to rely on the defense of physical
or mental disease, disorder, or defect exclud-
ing responsibility, or there is reason to doubt
the defendant’s fitness to proceed, or reason
to believe that the physical or mental dis-
ease, disorder, or defect of the defendant will
or has become an issue in the case, the court
may immediately suspend all further pro-
ceedings in the prosecution.

(2) Upon suspension of further proceedings
in the prosecution, the court shall appoint
three qualified examiners in felony cases ...
to examine and report upon the physical and
mental condition of the defendant. In felony
cases the court shall appoint at least one
psychiatrist and at least one licensed psy-
chologist. The third member may be a psy-
chiatrist, licensed psychologist, or qualified
physician[.]

170

The court issued a “Judicial Determination
of Fitness to Proceed and Order,” finding
that Eager was fit to stand trial.

Eager waived his right to a jury, and his
ease proceeded to a bench trial, Liang testi-
fied that on January 29, 2018, he got off the
bus and was walking to the food bank when
“on the left side of me suddenly someone hit.
me on my head and then I fainted.” He
testified that he lost consciousness and did
not see the person who hit him. An ambu-
lance took Liang to Queen’s Medical Center
(Queen’s), where he received eighteen
stitches, A passerby testified that on the
morning of January 29, 2018, she saw Hager
stomping on the head of an elderly man
laying motionless on the ground, leading her
to call 911 in response. A “Stipulation as to
Testimony” was filed in open court, which
indicated that Liang’s injuries included a ma-
jor laceration of the skin on his forehead, a
facial bone fracture, and a serious concus-
sion.

The State’s witnesses also included two
Honolulu Police Department officers who in-
teracted with Hager following his arrest sev-
eral hours after the attack, and the detective
who investigated the incident, The arresting
officer testified that Eager was “compliant”
and attentive at the time of arrest.

Dr, Gitter, an expert in clinical psychology,
testified for the defense that he reviewed
Eager’s medical records from Queen’s, where
he was treated on January 8-10 and 26-27,
2018, and O‘ahu Community Correctional
Center (OCCC), where he was examined fol-
lowing the alleged assault,

Dr. Gitter testified that the Queen’s and
OCCC records showed that Hager exhibited
signs of mental illness, including an acute
manic episode, auditory and visual hallucina-
tions, and bipolar disorder. Dr, Gitter also
stated that on Eager’s January 26-27 visit to
Queen’s, “drug testing showed that he tested
positive for marijuana only.”

When questioned about Hager’s marijuana
use, Dr. Gitter testified that “cannibus [sic]
psychotic disorder” exists, but that he “seri-
5, Dr. Jacobs testified that, according to Eager’s

medical records, previous doctors “gave [Eager]

a diagnosis of cannabis withdrawal, opiate with-
drawal, sedative hypnotic anxiolytic withdrawal,

ously doubt{ed]” that marijuana triggered
Eager’s acute manic episode,

The defense then asked Dr, Gitter about
Eager’s mental state at the time of the inci-
dent, and Dr. Gitter answered that “he was
suffering from a bipolar disorder mix type of
depressive and manic features and that it
was so severe that he was also psychotic at
the time.” When asked if he thought Hager
was penally responsible for the assault, Dr.
Gitter opined that Hager’s cognitive and voli-
tional capacities were “substantially impaired
by an exacerbation of his mental disorder.”

On cross-examination, Dr. Gitter testified
that although he could not say what exactly
triggered Hager’s manic episode at the time
of the incident,

my opinion is that he still was suffering
just two days after having been discharged
from Queen’s Medical Center. He had not
been given any medication that typically
would have been given to deal with the
psychosis. He was only given, I believe
Ambien, which is a sleep medication, And,
the way he described the assault to me was
that he was clearly psychotic asking the
gentleman whether he believed in Jesus
and then assaulting him to drive out the
demons. Plus, two days later when he was
at OCCC again he was noted to be manic
and psychotic.

The court asked Dr. Gitter if marijuana
could indirectly trigger a psychotic episode
by altering Eager’s perception of reality, to
which Dr. Gitter replied, “it could.” When the
court asked Dr, Gitter if Eager was psychotic
from the time he was discharged from
Queen’s until he was admitted to OCCO, Dr,
Gitter said yes.

The State presented two rebuttal wit-
nesses, Dr, Jacobs and Dr. Wagner, who also
examined Eager at OCCC prior to trial.

Dr. Jacobs, an expert in psychiatry, opined
that Eager’s judgment was impaired due to a
combination of self-induced prescription drug
withdrawal and marijuana use. Dr, Jacobs
diagnosed Eager with “a personality disorder
and somatic symptom disorder with predomi-
nant pain persistent and severe,”* Dr, Ja-

cannabis use disorder severe, opiate use disorder

severe, sedative hypnotic anxiolytic disorder
moderate, substance medication induced psy-

cobs testified that Eager was prescribed the
sleep aid Ambien, the anti-inflammatory
medication Meloxicam, and the painkiller
Percocet, Dr. Jacobs also testified that Eager
reported that he had “not taken any of his
drugs, except marijuana, for three days” pri-
or to the incident. Dr. Jacobs opined that
ceasing to take Ambien would cause “severe
insomnia, agitation, and feeling very uncom-
fortable,” and that stopping Percocet, an opi-
ate, “ean cause severe problems with with-
drawal.”

Dr. Jacobs testified that Eager “did not
have any psychosis at the time I interviewed
him” and, according to the Queen’s reports
and Eager himself, he was not intoxicated
but rather “probably suffering from with-
drawal symptoms” at the time of the assault.
Dr. Jacobs further testified that despite his
personality disorder, Eager “knows right
from wrong.”

On cross-examination, Dr, Jacobs agreed
that, at the time of the incident, Bager’s
psychotic episode rendered him incapable of
appreciating the wrongfulness of his actions,

The State then called Dr. Wagner, an ex-
pert in psychology, who testified that his
“diagnostic impressions at the time of the
alleged offense” were “post-traumatic stress
disorder and cannabis abuse versus depen-
dence.” The State asked Dr. Wagner about
the possible effects of marijuana use:

[Deputy Prosecuting Attorney]: [AJs a psy-

chologist were you able to say whether or

not the intake of a type of cannabis, for
instance, marijuana, could that lead to psy-
chosis?

[Dr. Wagner]: Well, I think the literature

indicates that there is that possibility, yes,

That has happened, I believe, in instances

with many different types of illicit drugs,

we found that to be true, And I think
marijuana, although not maybe as fre-
quently as, let’s say, other drugs, like crys-
tal methamphetamine, but still, I think

chotic disorder with delusions versus a substance
withdrawal delirium.”

6. When asked if there was any indication that
Eager was addicted to his prescription medi-
cations, Dr. Jacobs opined that he was “addicted
to all of them.”

171

there’s been an indication that that has
happened,

Dr. Wagner described Eager’s account of
the incident as follows:
[Eager] was walking along the sidewalk,
and he evidently asked the male individual,
from what he reported to me, whether or
not he believed in Jesus, and the individual
replied, No, and laughed and said some-
thing else, Then he got angry, and he
grabbed the individual, threw him down,
started kicking him.

Dr. Wagner opined, “to me [there] is not
enough evidence to indicate that he is suffer-
ing from severe psychotic symptoms and a
psychotic disorder such that he doesn’t know
that it’s inappropriate to hit someone or pull
someone to the ground and—and can’t con-
trol his behavior.”

The State asked Dr. Wagner several ques-
tions about Dr. Jacobs’ report, two of which
the circuit court disallowed because the State
appeared to be “asking Dr, Wagner to testify
as to the credibility of another witness.” 7
The court permitted questions regarding
whether Dr, Jacobs’ report changed Dr.
‘Wagner's opinion, and Dr. Wagner answered.
that Dr. Jacobs’ report “provides additional
information about the use of prescribed med-
ication,” but “doesn’t change the final opinion
as far as penal responsibility.”

The court asked Dr. Wagner whether “the
cannabis abuse or dependence [would]
heighten [Eager’s] sensitivity to post-trau-
matie stress disorder.” Dr, Wagner said that
he thought the cannabis was an “additive
factor,” but he did not know the extent that
“it pushed him over the edge here in this
situation.”

Eager elected not to testify.

In its closing argument, the State ex-
plained that it did not dispute that Eager
was psychotic at the time of the incident, but
rather argued that the psychosis was self-

7. Specifically, the circuit court disallowed the
following questions: ‘Now, based on your exper-
tise and your knowledge in your sphere, how did
you take away, you know, with Dr. Jacobs’ opin-
jon?”; and, “Now, would you agree with [Dr.
Jacobs'] expert opinion? Is it consistent, I guess,
consistent in your examining this defendant in
this case?”

172 a

induced. The State noted that Dr. Wagner
testified that marijuana could cause psycho-
sis, and Dr. Jacobs “also built on this view-
point.” The State also noted that Dr. Jacobs
had testified that “withdrawals of opiates can
also cause psychosis.” Thus, because Hager’s
behavior was due to “the withdrawal of his
pills and the usage of the marijuana,” Eager
was criminally responsible.

The defense’s closing argument focused on
Dr. Gitter’s testimony, noting that Dr. Gitter
had considered marijuana-induced psychosis
and “outright rejected it.” Defense counsel
further stated that “we dispute the fact that
it could have been marijuana that induced
the psychosis, [but] even if that were true
that would fall into the realm of pathological
intoxication and would still result in a de-
fense.”

The circuit court found Eager guilty of
assault in the second degree.®

The circuit court filed its “Findings of
Fact, Conclusions of Law, and Order,” in
which it made the following conclusions re-
garding Eager’s mental state:

18. Section 702-230 HRS further de-
fines “Self-induced intoxication” as “...
intoxication caused by substances which
the defendant knowingly introduces into
the defendant’s body, the tendency of
which to cause intoxication the defendant
knows or ought to know ...”

20. As applied, the Hawaii Supreme
Court has held that, “... mental disability
excusing criminal responsibility must be
the product of circumstances beyond the
control of the defendant ... [slelf-induced
intoxication is not such a disability.” See
State v. Freitas, 62 Haw. 17, 20, 608 P.2d
408, 410 (1980).

28, The issue at hand is whether, at the
time of the offense, the Defendant was
suffering from a mental disease, disorder,
or defect that was the product of circum-
stances beyond the control of the defen-
dant,

8, The court found that there was insufficient
evidence that Eager knew that Liang was at least
60 years old, and thus was not eligible for the

30. [T]he evidence in this case is clear
that prior to the incident in question, the
Defendant was not taking his prescribed
medication and was smoking marijuana.

82, The Court further finds and con-
cludes that any disease, disorder or defect
the Defendant may have been suffering at
the time of the assault was self induced
and the product of the Defendant's refusal
to take his prescribed medication and his
use of marijuana.

33. Although Doctor Gitter testified
and opined that the marijuana may not
have been the cause of the Defendant’s
psychotic behavior, the Court finds and
concludes that the evidence presented at
trial supports the opinions and conclusion
of Doctor Jacobs and Doctor Wagner who
concluded that the Defendant’s capacity to
appreciate the wrongfulness of his conduct
or conform his conduct to the require-
ments of the law was not substantially
impaired as a result of a mental or physical
disease, disorder or defect.

87. Given the Defendant’s history of
behavior leading up to and after the as-
sault of Mr, Liang, the Court can only find
and conelude that the Defendant’s psychot-
ie and delusional behavior resulted from
his refusal to take his medication and
knowingly smoke marijuana.

88. Therefore, the Court finds and con-
cludes that on January 29, 2013, the Defen-
dant’s psychotic and delusional behavior
was as a result of the Defendant’s decision
not to take his prescribed medication, the
subsequent withdrawal from prescribed
medication, and knowingly smoking mari-
juana.

89. The Court further finds and con-
cludes that on January 29, 2013, the Defen-
dant was not suffering from a mental or
physical disease, disorder, or defect that.
substantially impaired his ability to appre-
ciate the wrongfulness of his conduct or
conform his conduct to the requirements of
the law.

mandatory minimum sentence under HRS
§ 706-660.2.

The circuit court thus sentenced Eager to
five years’ incarceration and ordered him to
pay restitution,

B. ICA Proceedings

On appeal to the ICA, Hager raised two
points of error. First, Hager asserted that he
was deprived of a fair trial because Dr. Wag-
ner considered the opinion of Dr. Jacobs,
which improperly bolstered Dr. Jacobs’ cred-

Second, Eager argued that the circuit
court abused its discretion when it sentenced
him to five years’ imprisonment because
there were strong mitigating factors present,
to sentence him to probation. Eager argued
that probation would have been appropriate
because he showed remorse for his actions
and would benefit from mental health treat-
ment, .

The ICA found both of Hager’s arguments
to be without merit. First, the ICA deter-
mined that “Dr. Wagner testified about
whether Dr. Jacobs’ report changed Dr,
Wagner's opinion; he did not provide any
impermissible testimony on the subject of
Dr. Jacobs’ credibility.” Second, the ICA con-
cluded that the circuit court did not abuse its
discretion in sentencing Hager to five years’
imprisonment instead of probation, noting
that the court “emphasized the nature and
circumstances of Eager’s offense, his prior
criminal history, and the danger he posed to
the community.” The ICA thus affirmed the
civeuit court, and judgment on appeal was
filed on August 2, 2016,

Il. Standards of Review

A. Admissibility of Opinion Evidence

HM “In Hawaii, admission of opinion
evidence is a matter within the discretion of
the trial court, and only an abuse of that
discretion can result in reversal.” State _v.
Tucker, 10 Haw.App. 78, 89, 861 P.2d 37, 46
(1998) (citation omitted). “However, when
there can only be one correct answer to the
admissibility question, or when reviewing

9. Since we are remanding for further proceed-
ings consistent with this opinion, we do not ad-
dress Eager’s argument that the circuit court
abused its discretion in sentencing him.

10. As noted by the ICA, “Eager’s argument
makes no attempt to connect the facts of the case

173

questions of relevance under Hawai'i Rules
of Evidence (HRE) Rules 401 and 402, [the
appellate] court applies the right/vrong stan-
dard of review.” Kealoha v. County of Ha-
wail, 74 Haw. 808, 319, 844 P.2d 670, 676
(1993).

B. Conclusions of Law

Hl This court reviews the trial court’s
conclusions of law [COLs] de novo. Bhakta v.
Cnty. of Maui, 109 Hawai'i 198, 208, 124 P.8d
948, 958 (2005) (citation omitted).

IH, Discussion

In his application for writ of certiorari,
Eager repeats his arguments asserted at the
ICA and presents the following questions:

(1) [Whether] Petitioner was deprived of

a fair trial because Dr. Wagner “consid-

ered the expert opinion of Dr. Jacobs in

his opinions,” which, Petitioner argues, im-

properly bolstered Dr. Jacob’s testimony,

and

(2) [Whether] [t]he trial court abused its

discretion in sentencing Petitioner to five

years’ imprisonment because there were

strong mitigating factors to withhold a

prison sentence and instead sentence Peti-

tioner to probation.

We conclude that the ICA correctly deter-
mined that Dr. Wagner’s testimony did not
improperly bolster Dr. Jacobs’ opinion.

However, the circuit court plainly erred in
improperly characterizing Hager’s failure to
take his medication as self-induced intoxi-
cation, thus negating his incapacity defense.
Accordingly, we vacate the circuit court’s
judgment and remand this case for further
proceedings consistent with this opinion.?

A. Dr. Wagner’s Testimony

TM Eager asserts that he was deprived of
a fair trial because Dr. Wagner bolstered Dr.
Jacobs’ expert opinion by commenting on it.
Hager appears to suggest! that Dr. Wag-

to the law he presents, which means that we may
‘disregard [the] particular contention [because
he] makes no discernible argument in support of
that position.’ ” (Quoting Kakinami v. Kakinami,
127 Hawai'i 126, 144 n.16, 276 P.3d 695, 713
n.16 (2012),)

174

ner’s testimony was improper because HRS
§ 704-404(8) provides that, during the exami-
nation process to determine a defendant's
fitness to stand trial, the experts are re-
quired to “render diagnoses and opinions
upon the physical and mental condition of the
defendant independently from the other ex-
aminers.” (Emphasis added.) However, HRS
§ 704-404(4)(f) (Supp. 2008)" provided that,
“[alfter all reports are submitted to the
court, examiners may confer without restric-
tion.” Accordingly, Hager’s citation to HRS
§ 704-404 is inapposite,

HM The Hawaii Rules of Evidence
(BRE) allow experts to testify within their
area of expertise in order to assist the trier
of fact. See HRE Rule 702 (1992), While
experts may not testify as to the credibility
of other witnesses, expert testimony never-
theless has the potential to indirectly bolster
or refute the credibility of another witness.
State _v. Batangan, 71 Haw. 552, 558, 799
P.2d 48, 52 (1990). However, this fact by
itself does not render such testimony inad-
missible. Id, In those cases, “[t]he pertinent
consideration is whether the expert testimo-
ny will assist the [trier of fact] without undu-
ly prejudicing the defendant.” Id,

Dr. Wagner testified that he and Dr. Ja-
cobs had different focuses in writing their
reports, which is consistent with the fact that.
Dr. Wagner is a psychologist and Dr. Jacobs
is a psychiatrist, Additionally, Dr. Wagner
never opined on Dr. Jacobs’ truthfulness or
his skills as a psychiatrist. Further, the court
did not allow Dr, Wagner to testify regarding
whether he agreed with Dr. Jacobs’ report or
thought it was accurate.

Dr, Wagner’s testimony is therefore distin-
guishable from prior cases in which we held
that a witness improperly bolstered another
witness's testimony, See State v. Calara, 182
Hawai'i 391, 400-01, 822 P.8d 981, 940-41
(2014) (finding inadmissible a police detec-
tive’s testimony that probable cause was es-
tablished to arrest the defendant); State v.
Ryan, 112 Hawai'i 186, 141, 144 P.8d 584, 589
(2006) (finding inadmissible police officers’
testimony that they did have any reason not
to believe the complaining witness); State v.
Morris, 72 Haw. 527, 528-29, 825 P.2d 1051,
1052 (1992) (finding inadmissible an expert’s

11, HRS § 704-404(4)() (Supp. 2008) has since

testimony that clearly implied that he be-
lieved the complaining witness); Batangan, 71
Haw. at 562, 799 P.2d at 54 (same), Accord-
ingly, the cireuit court did not err in allowing
Dr. Wagner's testimony, as it did not improp-
erly bolster the testimony of Dr. Jacobs,

B. Self-Induced Intoxication

HI Although Hager’s argument that Dr.
‘Wagner improperly bolstered the testimony
of Dr. Jacobs is without merit, we exercise
plain error review with regard to the circuit
court’s application of HRS § 702-230.
“(Where plain error has been committed and
substantial rights have been affected there-
by, the error may be noticed even though it
was not brought to the attention of the trial
court.” State _v. Miller, 122 Hawai'i 92, 117,
223 P.8d 157, 182 (2010) (brackets and em-
phasis omitted) (quoting State v. Kaiama, 81
Hawai'i 15, 25, 911 P.2d 785, 745 (1996)); see
also Hawaii Rules of Penal Procedure Rule
52(b) (1977),

HE The circuit court appears to have im-
permissibly considered Eager’s failure to
take his medication as a basis for his self-
induced intoxication:

87. Given the Defendant's history of
behavior leading up to and after the as-
sault of Mr. Liang, the Court can only find
and conelude that the Defendant's psychot-
ie and delusional behavior resulted from
his refusal to take his medication and
knowingly smoke marijuana.

88, Therefore, the Court finds and con-
cludes that on January 29, 2013, the Defen-
dant's_psychotic_and_delusional behavior
was as a result of the Defendant’s decision
not to take his prescribed medication, the
subsequent withdrawal from prescribed
medication, and knowingly smoking mari-
juana.

(Emphasis added.)

HRS § 704-400 (1998) provides:

A person is not responsible, under this

Code, for conduct if at the time of the

conduct as a result of physical or mental

disease, disorder, or defect the person
lacks substantial capacity either to appreci-
ate the wrongfulness of the person’s con-

been recodified as § 704-404(5)(d) (Supp. 2016).

duct or to conform the person’s conduct to
the requirements of law.

HRS § 702-230 (1993) provides that self-
induced intoxication is not a defense under
HRS § 704-400:

(1) Self-induced intoxication is prohibited
as_a defense to any offense, except as
specifically provided in this section.

(2) Evidence of the nonself-induced or
pathological intoxication of the defendant
shall be admissible to prove or negative
the conduct alleged or the state of mind
sufficient to establish an element of the
offense. Evidence of self-induced intoxi-
cation of the defendant is admissible to
prove or negative conduct or to prove state
of mind sufficient to establish an element
of an offense, Evidence of self-induced in-
toxication of the defendant is not admissi-
ble to negative the state of mind sufficient
to establish an element of the offense.

(8) Intoxication does not, in itself, consti-
tute a physical or mental disease, disorder,
or defect within the meaning of section
704-400,

(4) Intoxication which (a) is not self-in-
duced or (b) is pathological is a defense if
by reason of such intoxication the defen-
dant at the time of the defendant’s conduct
lacks substantial capacity either to appreci-
ate its wrongfulness or to conform the
defendant’s conduct to the requirements of
law.

(6) In this section:

(a) “Intoxication” means a disturbance of
mental or physical capacities resulting
from the introduction of substances into
the body;

(b) “Self-induced_intoxication” means in-
toxication caused by substances which the
defendant _knowingly introduces into _the
defendant’s body, the tendency of which to
cause intoxication the defendant knows or
ought to know, unless the defendant intro-
duces them pursuant to medical advice or
under such circumstances as would afford
a defense to a charge of a penal offense;
(¢) “Pathological intoxication” means in-
toxication grossly excessive in degree, giv-
en the amount of the intoxicant, to which
the defendant does not know the defendant

175

is susceptible and which results from a
physical abnormality of the defendant.

(Emphases added.)

HM This court has stated that the pur-
pose of HRS § 702-230 “is to prevent defen-
dants who willingly become intoxicated and
then commit crimes from using self-induced
intoxication as a defense.” State v, Souza, 72
Haw. 246, 248, 818 P.2d 1884, 1886 (1991),
Accordingly, self-induced intoxication that is
not pathological should not be considered a
substantial factor in determining legal com-
petency because it is not a mental disease,
disorder, or defect, See HRS § 702-280 (8),

In convicting Eager, the circuit court de-
termined that “any disease, disorder or de-
fect the Defendant may have been suffering
at the time of the assault was self induced
and the product of the Defendant’s refusal to
take his prescribed medication and his use of
marijuana.” In other words, the court ap-
pears to have determined that Eager did not
have a defense under HRS § 704-400 be-
cause his behavior was self-induced under
HRS § 702-280.

The circuit court’s analysis does not com-
port with the plain language of HRS § 702-
230. Self-induced intoxication requires a de-
fendant to have “knowingly introduce[d]” a
substance into his or her body. See HRS
§ 702-280(5)(b). However, the cireuit court
found Eager criminally culpable for failing to
take his prescribed medication. This conclu-
sion was in error, as failing to take medi-
cation cannot be characterized as “introduc-
ing” a substance into his body.

The State concedes that Eager’s “failure
to take his prescribed medication does not
equate to ‘the introduction of substances into
the body’” per HRS § 702-280(5). Nonethe-
Jess, it argues that this failure “was a voli-
tional act on his part and should not absolve
him of penal responsibility.” In other words,
the State argues that even though Eager
‘was psychotic at the time of the incident, he
should be held responsible because his psy-
chosis stemmed from the “volitional act” of
not taking medication. This argument is
without merit. The State’s contention that
such a “volitional act” can give rise to penal
responsibility has no basis in HRS § 702-
230. See HRS § 702-2806)(b) (“‘Self-in-

176

duced intoxication’ means-intoxication caused
by substances which the defendant knowing-
ly_ introduces into the defendant's bodyl.]”)
(emphasis added). Moreover, the State pro-
vides no other authority in support of its
argument that a defendant can be held crim-
inally responsible for acts committed while
psychotic if the psychosis stems from a “voli-
tional act” resulting in the non-introduction
of substances into the human body, and we
are aware of none.

The reasoning of Commonwealth v. Shin,
86 Mass.App.Ct. 381, 16 N.E.3d 1122 (2014),
provides additional support for the outcome
we reach here, In Shin, the defendant, who
had been diagnosed with schizophrenia, was
charged with indecent assault and battery.
See id, at 1128-24. At a bench trial, his
primary defense was “lack of criminal re-
sponsibility” based on his mental illness and
his inability to conform his conduct to the
law. See id, at 1124-25. The trial court found
the defendant guilty, determining that he
“Inew that if he didn’t take his medication he
was likely to commit further crimes and went
ahead anyway and stopped taking his medi-
cation.” Id, at 1126 (internal quotation marks
omitted),

The Appeals Court of Massachusetts held
that the trial court erred by “inquiring [into]
whether the defendant’s lack of criminal re-
sponsibility was caused by his failure to take
prescribed medications.” Id. at 1128. The
court distinguished prior cases which consid-
ered whether a defendant was criminally re-
sponsible for conduct resulting from the vol-
untary consumption of drugs or aleohol:

Obviously, here, the question is not wheth-

er the defendant knowingly and voluntarily

consumed alcohol or drugs that exacerbat-
ed his inability to understand the wrong-
fulness of his behavior or undermined his
capacity to conform his behavior to the
requirements of the law, but whether his
failure to take prescribed medication had
those effects. It is not at all clear that the
situations are analogous; mentally ill peo-

ple fail to take prescribed medication for a

myriad of reasons, including, for example,

side effects that may be otherwise danger-
ous to their health.... In addition, some

12, Since the trial court did not determine wheth-
er the defendant lacked the requisite capacity at
the time of the crime due to a mental disease or

people are unable to obtain the appropriate
medication because of lack of money or
access to medical care, or problems with
necessary paperwork such as may have
occurred in this case. A decision not to
take a prescribed medicine, though it may

be ill-advised, is different in kind from a

decision to ingest alcohol or drugs that are

not prescribed. In addition, some medi-
cations work better than others, or take
time to become effective, and the difficulty
of discerning when, exactly, someone
stopped taking medication and what his
mental state was at that time would be
challenging at best.

Id, at 1128-29.

Unlike cases in which the ingestion of
drugs or alcohol caused the criminal behav-
ior, the court observed, “[the defendant’s]
mental illness is not caused by his failure to
take medication, even though the medication
might alleviate it somewhat or even entirely.”
‘Id, at 1128 (emphasis in original). Thus, the
court determined that “[t]he appropriate
analysis was simply whether, at the time of
the incident, the defendant was criminally
responsible,” # Id.

Hs As the Shin court similarly con-
cluded, the failure to take medication may
not be considered in determining the defense
of lack of penal responsibility due to a mental
disease, disorder, or defect. In this case, the
circuit court based its finding that Eager was
criminally responsible on Eager’s having
smoked marijuana as well as his “decision
not to take his prescribed medication.” The
circuit court did not distinguish the effects of
marijuana use from ceasing to take prescrip-
tion medication, and thus we do not know
whether the circuit court would have conclud-
ed that Eager’s marijuana use, standing
alone, could support a finding of criminal
responsibility due to self-induced intoxi-
cation. Moreover, when a defendant both a)
knowingly ingests an intoxicating substance,
the tendency of which to cause intoxication
the defendant knows or ought to know, and
b) experiences mental disease, disorder, or
defect, the trier of fact must determine

defect, the court concluded that the defendant

was entitled to a new trial, See Shin, 16 N.E.3d
at 1128.

a
qa
a

whether the mental disturbance would ex-
cuse the defendant's criminal conduct absent,
the influence of the intoxicant. See Freitas,
62 Haw. at 21, 608 P.2d at 411 (“[I]t was
obligatory upon the trial court to disregard
whatever incapacitating effects were attribut-
able to the defendant’s voluntary ingestion of
alcohol in determining whether, at the time
of the conduet charged, the accused was suf-
fering from a disability that would excuse his
criminal conduct.”) (citing United States v.
Burnim, 576 F.2d 236 (9th Cir. 1978)).
Because the circuit court failed to make
the necessary findings, we must remand for
further proceedings consistent with this opin-
ion. :

IV. Conclusion

Dr. Wagner’s testimony did not improperly
bolster Dr. Jacobs’ opinion. However, the
circuit court erred in its determination that
Eager was criminally responsible based on
his failure take prescription medication.
Thus, we vacate the ICA’s August 2, 2016
judgment on appeal and the circuit court’s
Tune 30, 2014 judgment of conviction, ad =
remand to the circuit court for further pro-
ceedings consistent with this opinion.

398 P.3d 766
Rosemary H. STOUT, Appellant-
Appellant,
ve
BOARD OF TRUSTEES OF THE EM-
PLOYEES’ RETIREMENT SYSTEM,
State of Hawai‘i, Appellee-Appellee.
SCAP-15-0000582

Supreme Court of Hawai'i.
JULY 10, 2017

a
q
io}

John C. McLaren, Honolulu, for petitioner,
Brian Aburano, Honolulu, for respondent,

RECKTENWALD, C.J., MeCKENNA,
POLLACK, WILSON, JJ., WITH
NAKAYAMA, J., DISSENTING

OPINION OF THE COURT BY
McKENNA, J.
I. Introduction

This case concerns whether a public school
teacher who is a member of the Employees’
Retirement System of the State of Hawai'i
ERS”) through her regular full-time posi
tion is eligible for “service-connected disal
ty retirement” benefits under HRS § 88-79
(Supp. 2004) after being shot in the chest
while serving as a public summer school
teacher, which is a position that, when held
on its own, does not provide ERS member-
ship eligibility. Rosemary H. Stout (“Stout”),
a regular school year teacher employed by
the State of Hawaii Department of Edu-
cation (“DOE”), applied for benefits under
HRS § 88-79 on August 3, 2004 based on
injuries suffered as a result of a June 30,
1988 shooting. Despite a determination by

the Medical Board to the ERS (“Medical
Board”) that Stout was incapacitated from
teaching due to the shooting, on October 27,
2014, the Board of Trustees of the ERS
(“ERS Board”) issued a Final Decision deny-
ing Stout’s application on the threshold basis
that although she was an ERS member, she
was not entitled to “service-connected dis-
ability retirement” under HRS § 88-79 be-
cause the shooting occurred while she served
as a part-time summer school teacher, which
was not employment that qualified for ERS
membership.

On July 28, 2015, the Circuit Court of the
First Circuit (“circuit court”)! affirmed the
ERS Board and entered Final Judgment.
Stout timely appealed to the Intermediate
Court of Appeals (“ICA”). This court accept-
ed a transfer of this case from the ICA.

We hold that Stout is eligible for “service-
connected disability retirement” under appli-
cable law. HRS § 88-79 provides that an
ERS member may be retired by the ERS for
“service-connected disability retirement” if
she is “permanently incapacitated for duty as
the natural and proximate result of an acci-
dent occurring while in the actual perform-
ance of duty at some definite time and
place....” The issue is whether Stout’s inju-
ry is “service-connected.” HRS § 88-21
(Supp. 2004) defines “service” to include any
“service as an employee paid by the State or
county,” and contains additional language in-
dicating that “connected” service includes
non-ERS-membership State or county ser-
vice, as long as the member makes ERS
contributions during the time of such non-
ERS-membership State or county service.
Stout was making ERS contributions on
June 80, 1988. HRS § 88-21 also separately
defines “membership service” as “all service
rendered by a member for which the mem-
ber had made the required contributions to
the system.” Therefore, although Stout’s
summer school employment at ‘Aiea High
School was not “membership service,” it was
nevertheless “service,” and HRS § 88-79
provides for “service-connected disability re-
tirement,” not “membership service-connect-
ed disability retirement.” Accordingly, under
HRS § 88-79, Stout is eligible to apply for
“service-connected disability benefits.” This

1, The Hon. Rhonda A. Nishimura presiding.

179

conclusion is also supported by legislative
history and the statutory scheme of HRS
Chapter 88.

We therefore vacate the judgment of the
circuit court and remand this case to the
ERS Board for further proceedings consis-
tent with this opinion.

I. Background

A. Stout’s Employment and ERS Mem-
bership History

Stout first began working for the DOE in
the early 1980s, teaching at various locations
including Waialua Intermediate and High
School, ‘Aiea Intermediate School, and on
Kaua'i. Stout became tenured in 1985, During
the 1987 to 1988 academic year, Stout taught
at Radford High School (“Radford”), During
the summers of 1985 through 1988, the DOE
offered a summer school program to students
at ‘Aiea High School (“‘Aiea”) and employed
Stout each summer to teach an English class
there.

By 1984, Stout was a member of ERS. She
contributed to the ERS fund year-round
through deductions taken from her academic-
year salary, which was paid by the DOE over
the course of twelve months, Stout’s summer
school earnings were paid by the DOE based
on an hourly rate by way of separate checks,
No deductions from summer school earnings
were made for ERS contributions.

B. Stout’s Injury: the June 30, 1988
Shooting

Stout was shot on June 80, 1988 by Romel
Castro (“Castro”)—a then-eighteen-year-old
student of Stout’s—while she was teaching
summer school at ‘Aiea, See Tradewind Ins,
Co, v, Stout, 85 Hawai'i 177, 181, 988 P.2d
1196, 1200 (App. 1997) (stating facts elicited
at Castro’s criminal trial), On February 2,
1990, Castro was convicted of attempted sec-
ond degree murder and a firearms violation.
See id, He was sentenced to life imprison-
ment with the possibility of parole. See id.

180

C. Application for Benefits to the ERS
Board

Stout filed an “Application for Disability
Retirement Contributory Plan” (“Applica-
tion”) with the ERS Board on August 3,
2004, requesting “service-connected disability
retirement.” She indicated that the accident
which caused her disability was “shot by
student in chest” on June 30, 1988 at ‘Aiea
High School.

On October 4, 2004, an “Employer's State-
ment Concerning Service-connected Disabili-
ty” was completed by the DOE. Specifically,
the DOE identified itself as, “Department of
Education—Radford High School,” and de-
clared that it did not employ Stout on the
date of the shooting, and that it lacked ree-
ords of any accident. Despite this, the “De-
partment of Education—Radford High
School” stated the place of Stout’s accident.
as “Aiea High School—Summer Session,”
Stout’s work performed as “language arts
teacher—Summer Session at Aiea High
School,” and that Stout was “‘on duty’ at the
time of the accident at Aiea High
School.”

The Medical Board of the ERS inter-
viewed Stout and reviewed her Application
and various employment and medical rec-
ords, including the October 2004 statement
from “Department of Education—Radford
High School.” It issued a report dated Feb-
ruary 17, 2006, finding that Stout was occu-
pationally incapacitated, likely permanently,
2. “Upon retirement for service-connected dis-

ability, a member shall receive the amount of the

member's accumulated contributions and a re-
tirement allowance which shall consist of fifty
per cent of the member's average final compen-

sation.” HRS § 88-80 (Supp. 2004).

The board may determine whether or not the
disability is the result of an accident occurring
while in the actual performance of duty at
some definite time and place and that the
disability was not the result of wilful negli-
gence on the part of the member, The board
may accept as conclusive:

(1) The certification made by the head of
the agency in which the member is employed;

or
Q)_ A finding to this effect by the medical
board.
HRS § 88-79(d).

due to psychiatric conditions which precluded
a return to work as a teacher, but that
evidence did not show that she was incapaci-
tated for gainful employment in other oceu-
pations. The Medical Board further found the
June 80, 1988 shooting to have been an “acci-
dent” that was the “natural and proximate
cause” of Stout’s incapacitation, and that the
accident occurred when Stout was “in the
actual performance of duty at some definite
time and place.” The Medical Board deter-
mined that Stout’s incapacity was not the
result of her “willful negligence,” which
would preclude recovery under HRS § 88-79.
The Medical Board ultimately recommended
that Stout be granted “Service-Connected
Occupational Disability Retirement,”? but.
that her request for “Service-Connected To-
tal Disability Retirement” be denied.

HRS § 88-79 permits the ERS Board to
aecept as conclusive the Medical Board’s
finding that Stout’s “disability [wa]s the re-
sult of an accident occurring while in the
actual performance of duty at some definite
time and place and that the disability was not.
the result of wilful negligence on [Stout’s]
part,” and approve the member's eligibility
for a service-connected disability retirement
benefit, HRS § 88-79(d)(2).? Here, however,
after reviewing the Medical Board’s report,
the ERS Board issued an April 19, 2006
“Order Remanding Report to Medical
Board,” indicating that in its view, Stout was
not entitled to benefits:

[Slection 88-42.5,") Hawaii Revises [sic]

Statutes, and section 6-21-14(2),°) Hawaii

4.

Membership of employees holding more than
one position, appointment, or office. (a) The
membership of any employee holding more
than one full-time position, appointment, of-
fice, or any combination thereof shall be limit-
ed to the position, appointment, or office of the
employee's option; provided that the employ-
ment in the position, appointment, or office
shall meet the minimum membership eligibility
requirements as provided in this part. Any
contributions made based on the compensa-
tion, pay, or salary of the employee's position,
appointment, or office other than that on
which the employee's membership is based
shall be returned to the employee.

The foregoing shall not apply to any employ-
ee holding two part-time positions of the same
class if each position meets the minimum eligi-
bility requirements for membership, and the
sum total of the compensation, pay, or salary
received for both positions does not exceed the
higher of the full-time compensation, pay, or
salary for either position.

HRS § 88-42.5 (Supp. 2003).

Administrative Rules, exclude teaching
summer school from a public school teach-
er’s Employees’ Retirement System mem-
bership. An accident resulting in injury to

a public school teacher while the teacher is

teaching summer school is therefore not

“an accident occurring while in the actual

performance of duty” under sections 88-77

and 88-79, Hawaii Revised Statutes.

On this basis, the ERS Board remanded the
report to the Medical Board for further pro-
ceedings.

The chair of the Medical Board, Patricia L.
Chinn, M.D., J.D. (“Dr. Chinn”), issued a
memorandum dated May 19, 2006, acknowl-
edging the ERS Board’s Order Remanding
Report to Medical Board. Dr, Chinn contin-
ued, however: .

The Medical Board respectfully declines to

revise its recommendation. The Medical

Board does not believe it has sufficient

information concerning this Member’s em-

ployment status and is unfamiliar with and
has no expertise on the requirements con-
cerning membership. It also appears to the

Medical Board that this case involves an

interpretation of the statute and rule re-

garding the exclusion from membership

and the performance of duty, an interpre-

tation that is best left to the Trustees,
Dr. Chinn issued a follow-up memorandum
on July 15, 2007 adding: “The only possibility
of granting the Member benefits [on the
basis of the June 80 shooting] is if she is
considered a member for the purposes of
qualifying for retirement benefits but not for
the purpose of service credit while teaching
summer school. We believe this is a matter
for the Board to decide.”

An ERS administrator, David Shimabuku-
ro, subsequently issued an October 9, 2007
memo to the ERS Board that echoed the
ERS Board’s interpretation of HRS § 88-
42.5 and HAR § 6-21-14). He concluded:

[ERS] Staff therefore believes that ser-

vices rendered in a position that is exclud-

ed from ERS membership should not be
considered “an accident occurring while in

5. Employees excluded from membership. The
following classes of employees shail be excluded
from membership in the system: ... ; (2) Persons
employed on short-term or temporary appoint-
ments of three months or less; (3) Persons em-

181

the actual performance of duty” for the

purposes of determining an individual’s eli-

gibility for accidental disability benefits
and recommends that the Board deny Ms.

Stout’s applications for service-connected

occupational and total disability retirement

benefits.

Subsequently, a letter was issued to Stout on
October 11, 2007 indicating the ERS Board’s
preliminary determination to deny her appli-
cation for both service-connected occupation-
al disability retirement benefits and service-
connected total disability retirement benefits.
The letter acknowledged that the ERS Board
proposed to approve and accept the certifica-
tions, findings, and recommendations con-
tained in the report, except for the Medical
Board’s finding that Stout’s disability was the
“result of an accident occurring while in the
actual performance of duty.” The ERS Board
opined that an accident incurred by a public
school teacher while teaching summer school
is not “an accident occurring while in the
actual performance of ... duty.”

On December 7, 2007, Stout timely filed an
appeal of the ERS Board’s proposed decision
to deny both service-connected occupational
disability retirement benefits and service-
connected total disability retirement benefits.

D. Administrative Proceedings Regard-
ing Cross-motions for Summary Judg-
ment

On February 25, 2009, Stout’s appeal was
assigned to a hearing officer. The parties
agreed to address the threshold issue of
whether Stout was eligible to apply for ser-
vice-connected disability retirement, given
that she was shot while teaching summer
school for the DOE. Cross-motions for sum-
mary judgment were filed. A hearing on the
motions was held on January 10, 2013.

On March 6, 2013, the hearing officer is-
sued a Recommended Decision, determining
that the main issue on appeal “is simply
whether the summer school program at Aiea
High School on June 30, 1988 was a covered

ployed as substitute teachers; ... ; (S) Persons in
any position requiring less than one-half or full-
time employment...

HAR § 6-21-14.

182

employment under the Employees’ Retire-
ment System[.]” The hearing officer quoted
the relevant statute that provides service-
connected disability retirement, HRS § 88-
79,8 and concluded: “It goes without saying
that this requirement[, “while in the actual
performance of duty,”] refers to employment
that made contributions to the ERS in order
to establish ERS coverage.” Because Stout
did not contribute any of her summer school
earnings to the ERS (nor did the DOE con-
tribute to the ERS based on Stout’s summer
school earnings), the hearing officer conclud-
ed that she did not satisfy the “while in the
actual performance of duty” requirement,
The hearing officer also noted that Stout was
not “a member of ERS when she was injured
on June 80, 1988 while a part-time summer
school teacher” as “she was excluded from
membership under HAR § 6-21-14.” Lastly,
the hearing officer commented that he
agreed with the ERS Board’s argument that
“it would be unfair to all other members of
the ERS to have retirement benefits taken
by [Stout] out of ERS funds when neither
the DOE nor [Stout] made the requisite con-
tributions for such retirement benefits from
her part-time temporary summer school
earnings.”

On July 15, 2018, the BRS Board issued a
Proposed Decision, which adopted the Rec-
ommended Decision and incorporated the
hearing officer’s findings of fact and conclu-
sions of law as its proposed decision, and
denied Stout’s application for service-con-
nected disability retirement benefits.

Stout timely filed exceptions to the pro-
posed decision. She took issue with the
hearing officer’s failure to explain why the
statement by “Department of Education—
Radford High School” that Stout was “‘on
duty’ at the time of the accident” was “un-
important.” Stout also pointed out the hear-
ing officer failed to indicate whether the
standard of review for summary judgment
motions was followed, did not discuss sever-
al cases she had cited to in her briefs such
as Hua v. Board of Trustees of the Employ-

6

Upon application of a member, or the person
appointed by the family court as guardian of
an incapacitated member, any member who
has been permanently incapacitated for duty as
the natural and proximate result of an accident

ees’ Retirement System, State of Hawai'i,

112 Hawai'i 292, 145 P.8d 885 (App. 2006),
and Kikuta v. Board of Trustees of the Em-
ployees’_Retirement System, State _of Ha-
wail, 66 Haw. 111, 657 P.2d 1080 (1988), and
inappropriately relied on declarations sub-
mitted by the State,

The ERS Board held a hearing on Septem-
ber 28, 2014, After the parties presented
their arguments, the ERS Board elicited the
following information from counsel: summer
school teachers generally are DOE teachers
because most DOE teachers are certified and
there is a preference that summer school
teachers have teacher’s certificates; summer
school employment is not required of tenured
DOE teachers and is voluntary; and funding
for summer school is paid out of a separate
fund composed of student summer school
tuition,

At the hearing, one of the board members
suggested that had Stout been shot during
school hours during the academic year, there
would have been no issue as to whether or
not Stout’s injury was a service-connected
disability. Another board member, who
worked for the DOH, stated that she “d[id]
know that summer school needs to be self
supporting [sic]” based on student tuition,
That board member also stated: “I’m really
clear ... in the fact that I know that teach-
ers, if they choose to teach summer school,
they're just at risk because they're not cov-
ered ... even though they're DOE employ-
ees.” She went on to express concern that
the record lacked much information regard-
ing Stout's incapacity, and suggested that
had that been looked at more closely in the
case, “it would have made things much easier
for this board to be able to look at something
like granting.” Stout's counsel then clarified
that based on an agreement with opposing
counsel and the hearing officer, the record
was focused on the threshold issue of wheth-
er Stout was legally entitled to apply for
benefits, and not on Stout’s medical condi-
tion,

occurring while in the actual performance of
duty at some definite time and place, or as the
cumulative result of some occupational hazard,
through no wilful negligence on the member's
part, may be retired by the board [] for ser-
vice-connected disability ....

HRS § 88-79 (emphasis added),

On October 27, 2014, the ERS Board is-
sued its Final Decision. The ERS Board
explained that the “threshold issue in this
appeal ... is whether an accident that oceurs
in a non-member position can be the basis for
service-connected disability retirement bene-
fits.” It explained, therefore, that Hua and
Kikuta were inapplicable to the case because
they did not concern this issue. The ERS
Board acknowledged that Stout was granted
workers’ compensation benefits, including
ERS credits, based on the June 30, 1988
shooting; however, it stated: “The ERS’s uni-
form practical construction of the statutes
and rules[, e.g., HRS §§ 88-42.5, 88-48, 88-77,
88-79; HAR § 6-21-14,] involved in this ap-
peal has been that ERS members are not
entitled to service-connected disability retire-
ment based on accidents that occur when
they are performing duties in non-member-
ship employment positions.” Accordingly, the
ERS Board affirmed the Proposed Decision
and adopted the Recommended Decision, and
therefore denied Stout’s applications for ser-
vice-connected occupational disability retire-
ment benefits and service-connected total
disability retirement benefits.

E. Circuit Court Proceedings

Stout timely filed a notice of appeal to the
circuit court. Oral argument was held on July
10, 2015 after the parties submitted their
briefs. Stout argued that the court should
“keep in mind” the “obvious remedial social
purpose of any public employee retirement
system” and the borrowed use of workers’
compensation tests in ERS cases such as
Hua and Kikuta, Stout argued that key facts
supporting Stout’s eligibility for benefits
were that she was on State property, and
that she was doing something related to her
State employment. Specifically, at the time
she was shot, Stout was “doing what she was
supposed to do: Public school teacher, help-
ing her students, teaching her students, ben-
efiting the [S]tate of Hawaii.” Stout also as-
serted that the declaration given by DOB
employee Wilfred Keola, Jr. (“Keola”) re-
garding the operations and funding of sum-
mer school and interpretation of Stout’s pay-
stubs (“Keola Declaration”), should not have
been admitted because it was not based on
the declarant’s personal knowledge,

183

The circuit court orally dismissed the ap-
peal and affirmed the decision by the ERS at
the end of the hearing. In its written order,
the circuit court found it dispositive that
because no ERS contributions were made
with respect to Stout's summer school em-
ployment, “when ... Stout was injured on
June 30, 1988, she was performing duties in a
part-time temporary employment position
that was excluded from and not covered by
ERS membership and benefits.”

F, Appellate Review

Stout timely filed her Notice of Appeal
with the ICA on August 17, 2015, and filed an
Application for Transfer on April 4, 2016,
This court granted the Application for Trans-
fer and held oral argument.

1, Stout’s Position

Stout presents five points of error: the
circuit court erred by (1) failing to determine
that Stout was injured in the “actual per-
formance of duty,” (2) disregarding the appli-
cation to her case of Kikuta and Hua, (8)-(4)
failing to determine the ERS Board erred by
considering improperly admitted evidence
and DOE Regulation 5105, and (5) improper-
ly considering HRS §§ 88-42.5, 88-48 (Supp.
2004), and HAR § 6-21-14 in determining
that Stout was not covered by ERS member-
ship and benefits when she was shot on June
380, 1988,

We focus on Stout’s first point of error, as
it is dispositive. With respect to this issue,
Stout asserts the following evidence was not
properly considered by ERS, the hearing
officer, or the circuit court: (1) that the DOE
had acknowledged that Stout was “on duty”
“at Aiea High School” at the time of the
shooting, and that the Medical Board con-
cluded the shooting was an accident occur-
ring “in the actual performance of duty at
some definite place and time”; (2) that, on
June 30, 1988, Stout was a continuously em-
ployed, permanent, year-round public school
teacher; (8) that, on June 80, 1988, Stout was
a contributing ERS member; and (4) that
Stout received workers’ compensation bene-
fits associated with the injuries she suffered
following the June 80, 1988 shooting, and
that ERS contributions were taken from

184

those benefits such that she would continue
earning “retirement credits.”

Stout also points out that on June 30, 2008,
the DOE was her sole employer and that the
DOE benefited from the work she performed
on the date of the accident. She argues she
was shot while teaching an English class on
DOE premises, which benefited the public
education system and the State of Hawai'i.
She also observes that nothing in the applica-
ble HRS chapters indicates that a public
school teacher is an employee of a particular
campus instead of being a State of Hawai'i
employee. She asserts that because the DOE
had acknowledged that Stout was on duty at.
one of its campuses at the time of the shoot-
ing, and because the Medical Board had de-
termined she was “in the actual performance
of duty at some definite place and time”
when she was shot, pursuant to HRS § 88-
79(d), ERS could have, and should have,
adopted that conclusion.”

2, The State’s Position
The State asserts substantial evidence sup-
ports the ERS Board’s finding that Stout’s
summer school teaching position was not an
ERS membership position, and characterizes
the issue on appeal as:
whether Stout can claim service-connected
disability retirement under [HRS] section
88-79 ... based on an accident that oc-
eurred while she was performing duties in
a part-time temporary employment posi-
tion excluded from and not covered by the
Employees’ Retirement System (“ERS”),
and for which no contributions were paid

a

With respect to the other points of error, in
summary, Stout argues that the “liberal, remedi-
al focus [of service-connected disability] reflected
in” Kikuta and Hua provide the correct mode of
analysis for Stout's circumstances and that the
distinctions drawn by the ERS between Stout's
situation and those in Kiluta and Hua are irrele-
vant. Stout also argues the Keola Declaration
was inadmissible and should not have been re-
lied upon by the hearing officer or the ERS
because Keola lacked personal Inowledge of the
DOE summer school program as it had operated
in 1988, She also asserts that the copy of the
DOE internal policy, “Regulation 5105,” at-
tached to Keola’s declaration, was inadmissible
and should not have been considered by the
hearing officer. Regulation 5105 states that part-
time temporary employees, such as summer
school teachers, are “[nJot eligible for member-

to the ERS either by Stout or her employ-

er the Department of Education[.]
The State asserts that Stout’s position is
flawed as to the applicability of Hua and
Kikuta, and whether evidence and certain
sections of Chapter 88 of the Hawai'i Revised
Statutes and Hawaii Administrative Rules
were appropriately considered, which were
Stout’s second through fifth points of error.
With respect to the dispositive first point of
error, the State argues that HRS § 88-79,
which provides for service-connected disabili-
ty retirement benefits, implicitly requires the
accident that caused the member's disability
to have occurred while the member was per-
forming duties in an employment position
covered by ERS membership, ie., “member-
ship service.” § The State asserts that such a
requirement is obvious from a consideration
of the entire ERS statute, general legislative
scheme and purposes, and to give the statute
a rational and sensible interpretation and
avoid absurd and unjust results. The State
argues that interpreting HRS § 88-79 in a
manner contrary to its proposed interpreta-
tion would lead to the absurd result that
academic-year school teachers “could claim
service-connected disability retirement for
accidents that occurred while they were
working in part-time or temporary jobs in-
cluding those for private employers, eg.,
working as a part-time salesperson for a
department store or teaching in a private
summer school program.”

The State further argues that the entire
legislative scheme of Chapter 88 should be
examined. The State asserts that the general

ship” for “[rletirement.” Finally, Stout also ar-
gues that HRS §§ 88-42.5, 88-43, and HAR § 6-
21-14 were improperly construed so as to deny
Stout service-connecied disability benefits. Stout
asserts the ERS should not be allowed to “blow
hot and cold” by: (1) on the one hand, stating
that because Stout did not contribute to the ERS
with her summer school earnings, she was ineli-
gible for benefits, and (2) on the other hand,
preclude her from membership (and, therefore,
making additional contributions) based on her
summer school position. As Stout’s first point of
error is dispositive, we need not address these
other issues.

8. “Membership service” is “all service rendered
by a member for which the member had made
the required contributions to the system.” HRS
§ 88-21.

legislative scheme in HRS Chapter 88 ties
both the funding of ERS retirement benefits
and payment of those benefits to ERS mem-
bers’ performance of services covered by
ERS membership and the payment of contri-
butions for such service. The State cites to
the following sections in support: HRS
§§ 88-21 (definitions), 88-42.5 (membership
of employees holding more than one position,
appointment, or office), 88-45 (employee con-
tributions), 88-46 (deducting employee contri-
butions from salary and employer pick up of
employee contributions), 88-51 (membership
service generally), 88-74 (allowance on ser-
vice retirement), 88-75 (ordinary disability
retirement), 88-76 (allowance on ordinary dis-
ability retirement), 88-80 (allowance on re-
tirement for service-connected disability), 88-
81(a) (average final compensation), 88-122
(determination of employer normal cost and
accrued liability contributions). Moreover,
the State asserts that to the extent HRS
§ 88-79 is ambiguous, the court should defer
to the ERS Board’s expertise and follow its
interpretation and application of the statute.

WL. Standards of Review

A. Interpretation of a Statute
HEM Statutory interpretation is a ques-
tion of law reviewable de novo. See Citizens
Against Reckless Dev. v. Zoning Bd. of Ap-
peals, 114 Hawai'i 184, 198, 159 P.8d 148, 152
(2007) (citation omitted). When construing
statutes, the court is governed by the follow-
ing rules:
First, the fundamental starting point for
statutory interpretation is the language of
the statute itself. Second, where the statu-
tory language is plain and unambiguous,
our sole duty is to give effect to its plain
and obvious meaning, Third, implicit in the
task of statutory construction is our fore-
most obligation to ascertain and give effect
to the intention of the legislature, which is
to be obtained primarily from the language
contained in the statute itself. Fourth,
when there is doubt, doubleness of mean-
ing, or indistinctiveness or uncertainty of
an expression used in a statute, an ambigu-
ity exists.
9. See HRS § 88-42.5 (“Any contributions made

based on the compensation, pay, or salary of the
employee's position, appointment, or office other

185

When there is ambiguity in a statute,
the meaning of the ambiguous words may
be sought by examining the context, with
which the ambiguous words, phrases, and
sentences may be compared, in order to
ascertain their true meaning. Moreover,
the courts may resort to extrinsic aids in
determining legislative intent, such as leg-
islative history, or the reason and spirit of
the law.

114 Hawaii at 198-94, 159 P.3d at 152-53
(citations omitted).

B. Administrative Agency Appeals

Hl Ordinarily, deference will be given to
decisions of administrative agencies act-
ing within the realm of their expertise.
The rule of judicial deference, however,
does not apply when the agency’s read-
ing of the statute contravenes the legis-
lature’s manifest purpose. Consequent-
ly, we have not hesitated to reject an
incorrect or unreasonable statutory con-
struction advanced by the agency en-
trusted with the statute’s implementa-
tion,

Coon v. City & Cnty. of Honolulu, 98 Hawaii

2838, 245, 47 P.3d 348, 360 (2002) (citations

and brackets omitted).

IV. Discussion

It is undisputed that at all relevant times,
Stout’s sole employer was the DOE. In 1988,
she served the DOE in two capacities: first,
she was employed year-round to teach at
Radford High School during the academic
year; second, she was hired to teach during
the summer at ‘Aiea High School. Stout re-
ceived her year-round salary semi-monthly,
and made ERS contributions with each pay-
ment. She was paid separately for her sum-
mer school work and did not contribute—nor
was she permitted by law to contribute—to
the ERS from those earnings.

The parties further agree that Stout was a
contributing member of ERS at the time of
the June 30, 1988 shooting. Additionally,
Stout's disability is a natural and proximate
result of that shooting, which occurred while
Stout was in the actual performance of duty
at ‘Aiea High School, At issue is whether

than that on which the employee's membership
is based shall be retumed to the employee.”).

186

Stout is eligible for “service-connected dis-
ability retirement” benefits pursuant to HRS
§ 88-79, which is a matter of statutory inter-
pretation.

A. Stout Is Eligible for Benefits under
the Plain Language of HRS § 88-79
HRS § 88-79 states in relevant part:
Service-connected disability retirement.
(a) Upon application of a member, or the
person appointed by the family court as
guardian of an incapacitated member, any
member who has been permanently inca-
pacitated for duty as the natural and proxi-
mate result of an accident occurring while
in the actual performance of duty at some
definite time and place, or as the cumula-
tive result of some occupational hazard,
through no wilful negligence on the mem-
ber’s part, may be retired by the board for
service-connected disability; provided that:
(1) ‘In the ease of an accident occurring
after July 1, 1963, the employer shall file
with the system a copy of the employer’s
report of the accident submitted to the
director of labor and industrial relations;
@) An application for retirement is
filed with the system within two years of
the date of the accident, or the date upon
which workers’ compensation benefits
cease, whichever is later;

(8) Certification is made by the head of
the agency in which the member is em-
ployed, stating the time, place, and condi-
tions of the service performed by the mem-
ber resulting in the member's disability
and that the disability was not the result of
wilful negligence on the part of the mem-
ber; and

(4) The medical board certifies that the
member is incapacitated for the further
performance of duty at the time of applica-
tion and that the member's incapacity is
likely to be permanent.

(@) The board may determine whether or
not the disability is the result of an acci-
dent occurring while in the actual perform-

10, Notably, HRS § 88-79(a)(3)'s requirement
that certification be “made by the head of the
agency in which the member is employed, stating
the time, place, and conditions of the service
performed by the member resulting in the mem-
ber's disability,” does not limit the disabling ac-

ance of duty at some definite time and
place and that the disability was not the
result of wilful negligence on the part of
the member. The board may accept as
conclusive:

(1) The certification made by the head
of the agency in which the member is
employed; or

(2) A finding to this effect by the medi-
cal board.

HRS § 88-79.

HRS § 88-79, in both its text and its title,
allows for the retirement of a member for
“service-connected disability.” Additionally,
one of the four statutory requirements to
obtain service-connected disability retirement.
is: “Certification is made by the head of the
agency in which the member is employed,
stating the time, place, and conditions of the
service performed by the member resulting
in the member’s disability and that the dis-
ability was not the result of wilful negligence
on the part of the member.” See HRS § 88-
79(a)(8). As the statute consistently uses the
term “service” and no other! our statutory
inquiry necessarily turns on whether the ac-
cident occurred when Stout was performing
“service,” ie,, whether the accident was “ser-
vice-connected.”

HRS § 88-21 defines “service” as follows:

“Service”: service as_an employee paid
by the State or county, and also: service
during the period of a leave of absence or
exchange if the individual is paid by the
State or county during the period of the
leave of absence or exchange; and service
during the period of an unpaid leave of
absence or exchange if the individual _is
engaged in the performance of a govern-
mental function or if the unpaid leave of
absence is an approved leave of absence
for_professional_improvement; provided
that, for the period of the leave of absence
or exchange without pay, the individual
makes the same contribution to the system

cident to have occurred in “the employment po-
sition covered by ERS membership.” Rather, it
focuses on the “service performed by the mem-
ber,” ie., “service [(as an employee paid by the
State or county)] performed by the member.”

as the individual would have made if the

individual had not been on the leave of

absence. Cafeteria managers and cafeteria
workers shall be considered as paid by the

State, regardless of the source of funds

from which they are paid,

(emphases added). Notably, regardless if an
employee is paid or on unpaid leave, certain
acts by the employee are “service” so long as
their performance was “paid by the State or
county,” of a “governmental function,” or for
approved professional improvement. Accord-
ingly, HRS § 88-79 provides for the retire-
ment of members due to disability “connect-
ed” to any such governmental “service.”

Specifically, the disability must be a “natu-
ral and proximate result of an accident occur-
ring while in the actual performance of duty
at some definite time and place, or as the
cumulative result of some occupational haz-
ard, through no wilful negligence on the
member's part.” HRS § 88-79. Thus, the
plain language of the statute imposes a re-
quirement that the disabling accident occur
while the member is “in the actual perform-
ance of duty” to the State or county (or while
performing a governmental function or pur-
suing professional improvement), and pre-
cludes service-connected disability benefits
for a disabling accident at a member’s non-
State or non-county second job, Accordingly,
there is no merit to the State’s argument
that the statute can be construed in a man-
ner leading to the “absurd” result that HRS
§ 88-79 coverage extends to accidents occur-
ring while a fulltime public school teacher is
working as a retail store clerk or private
school teacher.

In sum, there is nothing ambiguous re-
garding HRS § 88-79’s use of the terms,
“service” or “service-connected.” Thus, we
reject a construction of the statute that con-
flates “service” with “membership” or “mem-
bership position,” when those words are not
in the statute. See Coon, 98 Hawai'i at 245,
47 P.3d at 360 (“We have not hesitated to
reject an incorrect or unreasonable statutory
construction advanced by the agency entrust-
ed with the statute’s implementation.”).
Here, as stated in the record, at the time of
the accident, Stout was an ERS member and
the service she performed for the State was
“language arts teacher—Summer Session at
Aiea High School.” As such, Stout is eligible

187

for benefits under the plain language of HRS
§ 88-79,

B. The Legislative History Also Supports
the Plain Meaning of HRS § 88-79

Our plain language interpretation is bol-
stered by the lengthy legislative history of
the statute, which shows: 1) when the legisla-
ture enacted the predecessor to the ERS in
1925, it sought to provide a pension to all
members who became disabled “due to an
accident in the performance of duty”; 2) in
1968, the legislature specifically re-named
and amended the “accidental disability bene-
fit” statute to “service-connected” total and
occupational disability benefit statutes; 8) the
legislature has expanded the “service-con-
nected disability benefit” over time; and 4)
the legislature has revisited HRS § 88-79 or
its predecessor statutes on numerous occa-
sions, and it has consistently declined to limit
“service-connected” disabling injuries to inju-
ries that occur only in the course of “mem-
bership service.”

Before 1925, there was no “uniform and
established method of taking care of the
employees who [welre unable to continue in
service on account of old age or disability,”
with the exception of some teachers who
were covered by a plan established in 1915.
Joint Comm. on Pensions of the Senate and
House of Representatives (“Joint Commit-
tee”), Report on the Bill to Establish a Re-
tirement System for Territorial Employees
of the Territory of Hawaii 3-4 (1925) (“1925
Joint Report”), By 1925 the Territorial Leg-
islature enacted Act 55, “An Act to Establish
a Retirement System to Provide for the Re-
tirement of Employees of the Territory of
Hawaii and Teachers in the Public Schools,”
so that all government employees, including
teachers previously covered under the 1915
plan, would be covered under the same re-
tirement plan. See 1925 Haw, Sess, Laws Act,
55 (HB. 396); 1925 Joint Report at 4, See
also Panado v, Bd. of Trs., Emps, Ret. Sys.,
184 Hawai'i 1, 14, 382 P.8d 144, 157 (2014)
(discussing the history of the ERS and citing
the 1925 Joint Report).

As noted in the 1925 Joint Report that was
submitted to the Territorial Legislature re-
garding H.B. 896, the plan’s disability benefit

188

distinguished between “cases of permanent.
disability that occur as the result of accidents
in the performance of duty” [ (“accidental
disability”)] and those due to ordinary
causes for which the government is not di-
rectly responsible [ (“ordinary disability”) ].”
1925 Joint Report at 27; compare 1925 Haw.
Sess. Laws Act 55, § 6(8) at 59, with id.
§ 6(5) at 59-60; see also Panado, 184 Hawaii
at 14, 882 P.8d at 157 (quoting 1925 Joint,
Report at 27).

With respect to cases of ordinary disability
“for which the government [wa]s not ...
responsible,” a ten-year minimum service re-
quirement was imposed to “reduce ] the cost
to the government and protect[] the fund
against early disabilities.” 1925 Joint Report
at 28; 1925 Haw. Sess. Laws Act 55, § 6(8).
In contrast, there was no minimum service
requirement for the receipt of benefits due to
accidental disability, as the Joint Committee
“believed that a pension should always be
payable regardless of the age or length of
service of the member” if the employee be-
came disabled due to accidental causes in the
“performance of duty.” 1925 Joint Report at
27; see also id, at 87. The Joint Committee
elaborated: “(flor an example of the applica-
tion of this benefit we may consider the case
of an employee who, in an explosion oceur-
ring while at work for the government, loses
his eyesight. In such a case, the government
would provide him with a pension ...” and a
return of all contributions as an additional
annuity." Id. at 27 (emphasis added).

In other words, the legislature recognized
that in cases where but for an employee’s
service to the government the employee
would not have become disabled and unable
to continue to work, that employee should
receive some kind of retirement benefit re-
gardless of the employee’s duration of service
and amounts contributed to the retirement
system. See Panado, 134 Hawaii at 14, 332
P.8d at 157 (“The key question reiterated by
the [1925 Joint] [Clommittee at several
points was whether the accident occurred ‘in

11. Any employee that left service prior to retire-
ment age—including those who became disabled
while at work for the government—was entitled
to a return of all contributions. See 1925 Joint
Report at 8 ("Employees’ contributions are
placed in a distinct and separate fund, called the
Annuity Savings Fund. Each employee's contri-

the performance of duty.’”). The Joint Re-
port gave no indication that the position in
which a member became disabled was at all
relevant; of foremost concern was whether
the member was in service to the govern-
ment when the disabling injury occurred.

In 1968, the legislature specifically re-
named and amended the “accidental disabili-
ty benefit” to the “service-connected total
disability benefit” and “service-connected oc-
cupational disability benefit.” See 1963 Haw.
Sess. Laws Act 127, §§ 6-7 at 145-47; Re-
vised Laws of Hawai'i (“RLH”) §§ 6-46, 6-
46.1 (Supp. 1963). The change was intended
to “{plrovide for a distinction in benefits as
between service-connected total disability
and service-connected occupational disability
(neapacity for the purpose of duty)” 8.
Stand. Comm. Rep. No. 21, in 1968 Senate
Journal, at 685. The use of the term “service-
connected” in RLH §§ 6-46, 6-46.1 appears
intentional, as at the time of the amend-
ments, the definition of “service” was clear:
“service as an employee paid by the State or
county, and also service during the period of
a leave of absence or exchange if the individ-
ual is paid by the State or county during the
period of the leave of absence or ex-
change. ...” RLH § 6-20 (Supp. 1963).

Notably, the legislature has expanded the
service-connected disability benefit over
time, instead of restricting it. In 1955, the
benefit read:

Accidental disability benefit. Upon appli-
cation of a member, or of the head of his
department, any member who has been
totally and permanently incapacitated for
duty as the natural and proximate result of
an accident occurring while in the actual
performance of duty at some definite time
and place, through no negligence on his
part, shall be retired by the board if the
medical board certifies that such member
is mentally or physically incapacitated for
further performance of duty, that such in-

butions are credited to his own account and may
be withdrawn if he leaves the service without a
retirement allowance.”); id. at 7 (stating that
contributions are returned with interest or as an
annuity in cases of disability, death, resignation,
or dismissal).

capacity is likely to be permanent, and that
such member shall be retired.

RLH § 6-46 (1955). By 1963, the statute was
amended to provide both a “service-connect-
ed total disability benefit” and a “service-
connected occupational disability benefit.”
RLH §§ 6-46, 6-46.1 (Supp. 1968); see diseus-
sion supra. In 1965, the legislature added
that “any member who has been ... incapac-
itated ... as the cumulative result of some
occupational hazard, through no wilful negli-
gence on his part” may also be retired for
service-connected disability. See RLH §§ 6-
46, 6-46.1 (Supp. 1965). In 1974, the legisla
ture “create[d] a presumption for retirement
purposes that a fire[fighter] or sewer worker
who is disabled ... due to any disease of the
heart, lungs or respiratory system is pre-
sumed to have been injured [or] diseased ...
while in the performance of [the employee’s]
duty and to grant disability retirement ...
benefits.” S. Stand. Comm. Rep. No. 919, in
1974 Senate Journal, at 1114; see 1974 Haw.
Sess. Laws Act 182, at 391-95. In 1987, police
officers were added to the list. See 1987
Haw. Sess. Laws Act 81, § 81 at 187-88.

The expansion of benefits provided under
HRS § 88-79 over the years has been con-
current with the absence of statutory lan-
guage limiting benefits to accidents occurring
only in ERS-membership positions. Indeed,
throughout the consideration of the afore-
mentioned amendments, the definitions of
“membership service” and “service” re-
mained unaltered.” As recently as in 2002,
the legislature reconsidered the entire text of
HRS § 88-79 and did not alter the use of the
term “service-connected,” redefine it, or in-
sert other terms. See 2002 Haw. Sess. Laws
Act 128, § 6, at 353-54, Thus, that HRS
§ 88-79 uses the term “service-connected dis-
ability retirement” instead of “membership
service-connected disability retirement” ap-
pears purposeful. All considered, this demon-
strates that a restrictive interpretation of
HRS § 88-79 in the manner suggested by the
State and the Dissent would be contrary to
the legislature’s manifest purpose.

12, See 1969 Haw. Sess, Laws Act 110, § 1, at 94,
99 (amending and recodifying Parts I and II of
Chapter 6, Revised Laws of Hawai'i 1955) (defin-
ing “membership service” as “all service ren-

189

C. Stout’s Inability to Contribute to the
ERS as a Summer School Teacher
Does Not Detract from Her Perform-
ance of Service to the State While a
Summer School Teacher or Alter Her
Status as an ERS Member

THM Despite the plain language of HRS
§ 88-79 and the foregoing legislative history
analysis, the Dissent nevertheless asserts
that there is an additional requirement that
“logically follows” from HRS §§ 88-42.5 and
88-43: that the disabling accident occur only
while the employee-member is working in the
position that provides the employee’s ERS
membership eligibility. According to the Dis-
sent, “[tJhe fact that Stout was employed by
the State for the summer session while con-
tributing to ERS for another State job at the
time of her injury is merely coincidental and
should not be a factor when considering
whether Stout was eligible for benefits.”

We respectfully disagree with the Dissent,
At the outset, we note that contrary to the
Dissent’s assertion that “Stout did not make
any contributions to the ERS while in this
position,” Stout did in fact make contribu-
tions to the ERS year-round through deduec-
tions from her academic year salary, which
was paid by the DOE over the course of
twelve months. Although HRS § 88-42.5 con-
cerns the limitation of an employee’s ERS
contributions (and therefore calculated distri-
butions on retirement) and HRS § 88-43 con-
cerns the denial of membership eligibility to
part-time employees, they do not address the
distribution of ERS benefits to already exist-
ing members, such as Stout, or modify the
definition of “service-connected.” Thus, these
statutes do not support the Dissent.

To illustrate, if HRS § 88-79 benefits were
limited to “membership service-connected”
injuries as interpreted by the Dissent, ERS
members with two full-time State or county
jobs, required to choose one full-time position
pursuant to HRS § 88-42.5, would not be
entitled to service-connected disability retire-
ment for accidental injuries suffered during
the non-membership position. The Dissent

dered by a member for which he had made the

required contributions to the system”) (defining

“service” as, in part, “service as an employee

paid by the State or county”).

190

agrees with this hypothetical’s conclusion,
noting, “however harsh it appears on paper
and in practice, this is the rule that is provid-
ed for under the law.”

We do not agree that the legislature in-
tended such a result. Simply because one
full-time position is not the basis for ERS
membership does not detract from the fact
that the member continues to serve the State
or county in that position, In other words,
nothing in HRS § 88-42.5 or its legislative
history shows that the legislature intended
the statute to re-characterize the un-selected
position from “service” to “non-service,” or to
create the harsh results suggested by the
Dissent as legislatively intended, Rather, the
sole express purpose of HRS § 88-42.5 was
to limit the calculated amount of an employ-
ee’s BRS contributions and benefits to that
based on the chosen position’s pay.

As noted above, the language of HRS
§ 88-79 and its legislative history do not
support the Dissent’s interpretation of HRS
§ 88-79, The following two reasons also sup-
port Stout's eligibility for benefits.

First, the definition of “service” in HRS
§ 88-21, quoted above, includes service dur-
ing a paid leave of absence as well as service
during an unpaid leave of absence, as long as
the employee is a member who is engaged in
the performance of a governmental function
or professional improvement, and as long as
the employee continues making contributions
to the ERS system. Stout was making such
contributions on June 30, 1988, Teaching
public summer school would be the perform-
ance of a governmental function or approved
professional improvement. Thus, even if “ser-
vice,” as that term is used in HRS § 88-79,
were limited to Stout's service as a full-time
public school teacher, she remains eligible for
HRS § 88-79 benefits.

Second, the hearing officer expressed the
concern reiterated by the ERS Board at oral
argument in the circuit court, that “it would
be unfair to all other members of the ERS to
have retirement benefits taken by Applicant
out of ERS funds when neither the DOE nor
Applicant made the requisite contributions
for such retirement benefits from her part-
time temporary summer school earnings.”
However, as is evident by other sections

13, See supra n.9 (quoting HRS § 88-42,5).

within HRS Chapter 88, as explained above,
the legislature’s primary concern with re-
spect to the issuance of benefits under HRS
§ 88-79 appears to be service to the State or
county, and not additional contributions to
the ERS, as long as the member is making
ERS contributions during the time of the
additional government service. Thus, the Dis-
sent’s suggestion that our holding would
mean that “a large class of people—all those
who work at public summer schools across
the State, including teachers, administrators,
and various support staff—to receive benefits
without paying into the retirement system,”
is an unfounded alarm, as it wholly disre-
gards that only existing ERS members would
be eligible for service-connected disability
benefits, The Dissent’s assertion that our
holding “creates a tremendous financial bur-
den and unfunded liability for the ERS be-
cause the ERS is now responsible for paying
benefits to an unknown number of employees
who become injured on the job but who have
not contributed into the system,” is also with-
out merit for this reason. In addition, there is
no evidentiary support in the record for the
Dissent’s sweeping assertions, including the
suggestion that our holding will have nega-
tive far-reaching effects and consequences,

Also, HRS § 88-182 (Supp. 2011) provides
that the State or county pay all contributions
to the ERS when members must leave active
service of the State or any county for mili-
tary service in times of war or national or
state emergencies. Yet, despite such continu-
ing contributions to the ERS, the member is
not entitled to benefits under HRS § 88-79 if
“incapacitated for duty by accident, act of
‘war, or otherwise, occurring while the mem-
ber is not in the service of the State or any
county.” HRS § 88-186 (Supp. 2004), Thus,
the legislature’s framework for “fairness” as
to who is entitled to benefits under HRS
§ 88-79 is not based on the amount of money
contributed by or on behalf of a member, but
rather if the disabling accident occurs while
in service to the State or county, as long as
ERS contributions are being made during
the non-membership service.

HH in sum, HRS Chapter 88 provides
for a retirement benefit to members who

become disabled due to the occurrence of an
accident while in the service of the State or
any county, regardless if that service is
“membership service.” For the foregoing rea-
sons, even if Stout’s service as a summer
school teacher to the DOE at the time of the
shooting may not have been “membership
service,” she is eligible for benefits under
HRS § 88-79,

Based on our analysis, we need not and do
not address Stout’s additional points on ap-
peal, including whether or not Hawaii’s pen-
sion and retirement benefits law, i.e., Chap-
ter 88, should be “liberally construed” in
favor of beneficiaries,“

For all of these reasons, again, we respect-
fully disagree with the Dissent. The Dissent’s
reliance on HRS §§ 88-42.5 and 88-48 is mis-
placed because, as discussed, although these
statutes permit the ERS board to limit mem-
bership and contributions, they do not re-
strict the benefits of existing members, such
as Stout. Moreover, what the Territorial Leg-
islature noted in 1925 when it created the
ERS remains true today: regardless of an
employee’s age or length of service, should
the employee become disabled as a result of
a service-connected accident, he or she is
eligible for accidental or service-connected
disability retirement benefits. See HRS
§§ 88-79, 88-80 (imposing no age or length or
service requirement for the receipt of an
allowance on retirement for service-connect-
ed disability); 1925 Joint Report 27 (same);
id. at 8 (“The government will provide the
total pension payable in the case of accidental
death or accidental disability of the employ-
ee.”); see also, e.g., Emps.’ Ret, Sys., Ques-
tions & Answers About Your Employees’
Retirement System Contributory Plan 5
(2012) (“Regardless of credited service, if you
are permanently disabled as a result of a job-
related (service-connected) accident, you are
entitled to a 100% refund of your contribu-
tions (neluding interest) and a pension of
85% of your AFC for life.” (emphasis add-

14. Several states, including Mississippi, have in-
terpreted their government workers’ pension
laws in a manner so as “to carry out, and prop-
erly recognize, their beneficent policy and pur-
pose, and to confer the benefits intended.” Smith

vy. Bd, of Gen. Ret. Sys, of Meridian, 224 Miss,
13, 23, 79 So.2d 447, 451 (Miss. 1955).

191

ed)). Clearly, so long as an employee is a
eurrent ERS member, the amount of the
member’s contributions is irrelevant to the
employee’s receipt of a service-connected dis-
ability benefit.

The Dissent acknowledges the plain lan-
guage of HRS § 88-79 “might’ suggest” the
Majority’s conclusion, yet the Dissent never-
theless suggests the Majority arrived at its
decision out of pity. In actuality, the rule of
law controls. This is made clear by the plain
text of HRS § 88-79 within the context of the
entirety of chapter 88 and its legislative his-
tory, demonstrating a long-standing legisla-
tive goal to provide for governmental em-
ployees who become disabled in connection
with their State or county governmental ser-
vice as long as ERS contributions were being
made during the non-membership service,

V. Conclusion

For the foregoing reasons, we vacate the
ERS Board’s October 27, 2014 Final Decision
and the circuit court’s July 28, 2015 “Final
Judgment and Decision and Order Affirming
the Final Decision of Appellee Board of
Trustees of the Employees’ Retirement Sys-
tem of the State of Hawaii and Dismissing
Appellant Rosemary H. Stout’s Appeal.” This
matter is remanded to the ERS Board for
further proceedings consistent with this opin-
ions

DISSENTING OPINION BY
NAKAYAMA, J.

The Majority holds that Stout is eligible
for service-connected disability retirement
benefits for injuries sustained while working
as a summer school teacher, even though
Stout was not contributing into the retire-
ment system for her work in that position.
Because I believe that an employee may only
receive service-connected disability retire-
ment benefits when the employee is injured

15. The court observes that the Board had previ-
‘ously acknowledged that it would " approve and
accept the certifications, findings and recommen-
dations contained in the [Medical Board's] Re-
port,” except for the Medical Board’s “finding
that [Stout's] disability is the ‘result of an acci-
dent occurring while in the ‘actual performance
of duty.'['7”

192

while working at a job for which she is
making contributions, I respectfully dissent.

I, BACKGROUND

On June 80, 1988, Stout was shot by a
student while working as a summer school
teacher at ‘Aiea High School! At the time of
the shooting, Stout was a member of the
Employees’ Retirement System (ERS)
through her work as a full-time secondary
school teacher at Radford High School dur-
ing the regular school year Stout contribut-
ed to the ERS fund over the course of twelve
months through deductions taken from her
full-time salary. Neither Stout nor the De-
partment of Education (DOE) contributed to
the ERS fund for Stout's work as a summer
school teacher.

On August 8, 2004, Stout filed an applica-
tion for disability retirement with the ERS
Board. The Medical Board to the ERS re-
viewed Stout’s application and record and
issued a report recommending that Stout be
granted service-connected occupational dis-
ability retirement. The Medical Board found
that Stout was “incapacitated for the further
performance of duty and that such incapacity
ig likely to be permanent” and that Stout’s
incapacity was “the result of an accident
occurring while the Member was in the actu-
al performance of duty at some definite time
and place.”

The ERS Board remanded the report to
the Medical Board, explaining that “the
Board is inclined to deny the application
because section 88-42.5, Hawaii Revised Stat-
utes, and section 6-21-14(2), Hawaii Adminis-
trative Rules, exclude teaching summer
school from a public school teacher’s Em-
ployees’ Retirement System membership”
and that “[a]n accident resulting in injury to
a public school teacher while the teacher is
teaching summer school is therefore not ‘an
accident occurring while in the actual per-
formance of duty’” under the applicable stat-
utes.

On May 19, 2006, the Medical Board issued
a memorandum declining to revise its recom-

1, The summer session began in June 1988 and
ended in July 1988, In contrast to full-time teach-
ers, summer school teachers “are paid from a
special fund created by parents paying fees for
students to attend summer school sessions.”

mendation, explaining that it “has no exper-
tise on the requirements concerning mem-
bership” and that interpretation of statutes
and rules is “best left to the Trustees.” Sub-
sequently, on July 15, 2007, the Medical
Board issued another memorandum, noting
that “(t]he only possibility of granting the
Member benefits is if she is considered a
member for the purposes of qualifying for
retirement benefits but not for the purpose
of service credit while teaching summer
school.” The Medical Board then concluded
that “this is a matter for the [ERS] Board to
decide.”
On October 11, 2007, the ERS Board is-
sued its decision to deny Stout’s application:
{T]he Board of Trustees rejects the Medi-
cal Board’s finding that your disability is
the “result of an accident occurring while
in the actual performance of duty.” The
event that resulted in your disability took
place while you were teaching summer
school. An accident incurred by a public
school teacher while teaching “summer”
school is not “an accident occurring while
in the actual performance of [the teacher’s]
duty” as a public school teacher, because
HRS § 88-42.5 and Hawaii Administrative
Rules § 6-21-14(2) exclude teaching sum-
mer school from the teacher’s membership
in the Employees’ Retirement System,
Stout appealed this decision and the Hear-
ing Officer, former Associate Justice Mario
R. Ramil (Hearing Officer Ramil), issued his
recommended decision on March 6, 2013.
Hearing Officer Ramil recommended that the
ERS Board deny Stout's application, noting
that “[ijt goes without saying that [the re-
quirement that the accident occurred while in
the actual performance of duty] refers to
employment that made contributions to the
ERS in order to establish ERS coverage.”
He also determined that “it would be unfair
to all other members of the ERS to have
retirement benefits taken by Applicant out of
ERS funds when neither the DOE nor Appli-
cant made the requisite contributions for

2. Public school teachers who work during the
regular school year are ten-month employees be-
cause they do not work during the summer vaca-
tion; however, their salary is paid out over twelve
months.

such retirement benefits from her part-time
temporary summer school earnings.” On July
15, 2018, the ERS Board issued its proposed
decision, which adopted Hearing Officer
Ramil’s recommended decision.

Stout filed exceptions to the proposed deci-
sion and the ERS Board held a hearing on
September 28, 2014. On October 27, 2014, the
ERS Board issued its final decision, which
affirmed the Board’s proposed decision to
deny Stout’s application. Of note, the ERS
Board stated that its “uniform practical con-
struction of the statutes and rules involved in
this appeal has been that ERS members are
not entitled to service-connected disability
retirement based on accidents that occur
when they are performing duties in non-
membership employment positions.” On ap-
peal, the Circuit Court of the First Circuit
(cirenit court) affirmed the ERS Board’s de-
cision?

Il. DISCUSSION

The Majority concludes that Stout is eligi-
ble for service-connected disability retire-
ment benefits pursuant to Hawai'i Revised
Statutes (HRS) § 88-79 (Supp. 2004), ex-
plaining that the statute “provides for a re-
tirement benefit to members who become
disabled due to the occurrence of an accident
while in the service of the State or any
county, regardless if that service is ‘member-
ship service.’” I disagree with this conclusion
for two reasons.

First, the statutory framework of HRS
Chapter 88 explicitly prohibits a temporary
employee from becoming a member of the
ERS, and explicitly limits ERS membership
to one full-time position per employee, The
Majority disregards these statutory provi-
sions in reaching its conclusion to award
Stout the requested benefits, as these provi-
sions clearly prohibit Stout from ERS mem-
bership as a summer school teacher. Second,
the purpose and structure of the Employees’
Retirement System make it clear that a
member must be contributing into the sys-
tem in which the member is employed in
order to receive disability retirement bene-
fits. Because Stout was not contributing into
the system as a summer school teacher when

3, The Honorable Rhonda A. Nishimura presided.

193

she was injured in this capacity, she cannot
receive benefits.

A. The statutory framework of Chapter
88 prevented Stout from attaining
ERS membership as a summer school
teacher.

The Majority relies on the language of
HRS § 88-79 in reaching its conclusion that
Stout is entitled to service-connected disabili-
ty retirement benefits for injuries sustained
during her summer school job, While the
language of HRS § 88-79 might suggest such
a conclusion, when read in the larger context
of Chapter 88, it becomes clear that the
Majority’s holding in this case is at odds with
the larger statutory scheme.

“Laws in pari materia, or upon the same
subject matter, shall be construed with refer-
ence to each other, What is clear in one
statute may be called upon in aid to explain
what is doubtful in another.” State v. Young,
107 Hawai'i 86, 40, 109 P.8d 677, 681 (2005)
(quoting State v. Kaua, 102 Hawai'i 1, 8, 72
P.8d 478, 480 (2008)); see also State v. Sulli-
yan, 97 Hawai'i 259, 262, 86 P.8d 808, 806
(2001) (‘And we must read statutory lan-
guage in the context of the entire statute and
construe it in a manner consistent with its
purpose.”),

HRS § 88-79, “Service-connected disability
retirement,” provides:

(a) Upon application of a member, or the
person appointed by the family court as
guardian of an incapacitated member, any
member who has been permanently inca-
pacitated for duty as the natural and proxi-
mate result of an accident occurring while
in the actual performance of duty at some
definite time and place, or as the cumula-
tive result of some occupational hazard,
through no wilful negligence on the mem-
ber’s part, may be retired by the board of
trustees for service-connected disability.

The Majority interprets the language of HRS

§ 88-79 to mean that a member can qualify

for service-connected disability retirement as

Jong as the member is injured while “in the

actual performance of duty to the State or

county.” However, such an interpretation is

194

in conflict with Chapter 88's language re-
garding ERS membership.

HRS § 88-42 (1993), “Membership gener-
ally,” provides qualifications for membership
into the ERS:

Except as otherwise provided in this part,

all employees of the Territory or any coun-

ty on July 1, 1945, shall be members of the

system on such date, and all persons who

thereafter enter or reenter the service of

the State or any county shall become mem-

bers at the time of their entry or reentry,
While HRS § 88-42 provides in sweeping
terms that “all persons” serving the State or
county “shall become members,” two follow-
ing statutes provide limitations on member-
ship. HRS § 88-42.5 (Supp. 2004), “Member-
ship of employees holding more than one
position, appointment, or office,” provides
that membership is limited to one full-time
position:

(a) The membership of any employee hold-

ing more than one full-time position, ap-

pointment, office, or any combination
thereof shall be limited to the position,
appointment, or office of the employee’s
option; provided that the employment in
the position, appointment, or office shall
meet the minimum membership eligibility
requirements as provided in this part. Any
contributions made based on the compen-
sation, pay, or salary of the employee's
position, appointment, or office other than
that on which the employee’s membership
is based shall be returned to the employee.

Additionally, HRS § 88-48 (Supp. 2004),
“Persons ineligible for membership; optional
membership,” exempts part-time or tempo-
rary employees from membership: “{T]he

4. Additionally, Hawai'i Administrative Rules
(HAR) § 6-21-14 (effective 1981) also provides
that short-term or temporary employees are ex-
cluded from membership in the ERS: ‘The fol-
Jowing classes of employees shall be excluded
from membership in the system: ... (2) Persons
employed on short-term or temporary appoint-
ments of three months or less.”

5. The summer session lasted from June through
July, 1988, Since temporary employment is de-
fined as employment for “three months or less,”
a summer teaching job spanning two months
would clearly fall under this category.

6. The Majority suggests that, even under my in-
terpretation of Chapter 88, Stout remains eligible

board of trustees may deny membership to
any class of part-time employees or persons
engaged in temporary employment of three
months or less.”* See also Vail_v. Emps.’
Ret. Sys., 75 Haw. 42, 65, 856 P.2d 1227, 1289
(1998) “HRS § 88-48 ... plainly gives the
ERS the power to ‘deny membership to any
class of part-time employees’ and therefore
must logically be considered a specific quali-
fication of HRS § 88-42’s blanket admission
of all employees.”).

Under both HRS §§ 88-425 and 88-48,
Stout was ineligible for ERS membership as
a summer school teacher. First, under HRS
§ 88-42.5, Stout was ineligible for ERS mem-
bership as a summer school teacher because
she already qualified for membership with
her full-time position as a secondary school
teacher at Radford High School, Second, un-
der HRS § 88-48, Stout was ineligible for
membership as a summer school teacher be-
cause it was temporary employment. Thus,
under both HRS §§ 88-42.5 and 88-48, Stout
was ineligible for ERS membership for her
position as a summer school teacher at ‘Aiea
High School.

It logically follows that Stout qualified as a
member only for her full-time teaching posi-
tion at Radford High School and that Stout.
could receive service-connected disability re-
tirement benefits only for an injury sustained
while in the actual performance of duty for
this full-time position. As such, I would hold
that the ERS Board’s conclusion that Stout
was ineligible for the requested benefits was
consistent with the statutory scheme of
Chapter 88 and was not palpably erroneous.

See Morgan v. Planning Dep’t, 104 Hawai'i

for benefits because the definition of service “in-
cludes service during a paid leave of absence as
well as service during an unpaid leave of ab-
sence.” The Majority’s suggestion here appears
to be premised on an assertion that Stout was
either on a paid or unpaid leave of absence from
her full-time teaching job at the time of the
shooting. However, there is no evidentiary sup-
port in the record for the assertion that a teacher
is on a leave of absence just because school is out
for summer break, or that Stout specifically was
on a leave of absence when she was injured. As
such, I disagree with the Majority’s suggestion
that Stout was injured while she was on a leave
of absence from her full-time teaching position,
and thus could qualify for service-connected dis-
ability retirement benefits.

178, 180, 86 P.8d 982, 989 (2004) (“[W]here an
administrative agency is charged with the
responsibility of carrying out the mandate of
a statute which contains words of broad and
indefinite meaning, courts accord persuasive
weight to administrative construction and fol-
Jow the same, unless the construction is pal-
pably erroneous.” (quoting Ka Pa‘akai_O
Ka‘Aina v. Land Use Comm’n, 94 Hawaii 81,
41, 7 P.8d 1068, 1078 (2000))); Vail, 75 Haw.
at 66, 856 P.2d at 1240 (“{I]n the case of
broad or ambiguous statutory language, the
applicable standard of review regarding an
agency's interpretation of its own governing
statute requires this court to defer to the
agency’s expertise and to follow the agency’s
construction of the statute unless that con-
struction is palpably erroneous.”).

B. Stout is not entitled to disability re-
tirement benefits because she did not
contribute into the ERS fund as a
summer school teacher.

Second, even if Stout were eligible for
ERS membership as a summer school teach-
er, the Majority’s conclusion to award Stout
the requested benefits is contrary to the
purpose and structure of the ERS. The ERS
was established in 1925 to “provide retire-
ment allowances and other benefits to Hawaii
State and County government employees.”
Emps. Ret. Sys. Questions & Answers
About Your Employees’ Retirement System
Contributory Plan 1 (2012) [hereinafter
Questions & Answers]; see also Kaho‘ohano-
hano v. State, 114 Hawai'i 802, 311, 162 P.8d
696, 705 (2007) (“The ERS provides retire-
ment benefits to State and county employees,
who become members upon their entry or
reentry into service of the State or any coun~
ty.”). This is accomplished through monthly
contributions made by ERS members (the
employees) and the State and county employ-
ers, which are credited to the member’s ERS
account and accrue interest. Questions & An-
swers, supra, at 2; see also Kaho‘ohanohano,
114 Hawaii at 311, 162 P.8d at 705 (“The
system is funded by contributions from State
and county employers, as well as State and

7._Of course, as articulated in the prior section,
HRS §§ 88-79(a) and 88-43 would also prevent
Stout from receiving benefits under these hypo-
theticals because she would be ineligible for ERS
membership. However, assuming arguendo that
Stout would be eligible for ERS membership for

195

county employees,”), Retirement payments,
including disability retirement payments, are
tied to these contributions, Questions & An-
swers, supra, at 2-4.

At a basic level, this means that a member
must be contributing into the retirement sys-
tem in order to receive retirement benefits.
The issue in this case is a more nuanced
version of this straightforward principle, In
this case, Stout made contributions to the
ERS, but only in her capacity as a full-time
teacher at Radford High School. Each
month, an ERS deduction was taken from
her salary as a full-time teacher, If Stout had
sustained the injury while working in her
capacity as a full-time teacher at Radford
High School, it is without question that Stout
would be eligible to receive disability retire-
ment benefits pursuant to HRS § 88-79.

However, Stout was injured while working
as a summer school teacher at ‘Aiea High
School. Stout did not make any contributions
to the ERS while in this position, Thus, Stout
could not receive disability retirement bene-
fits for being injured while on the job as a
summer school teacher because she did not
contribute to the ERS while she was em-
ployed in this position.

The fact that Stout was employed by the
State for the summer session while contrib-
uting to the ERS for another State job at the
time of her injury is merely coincidental and
should not be a factor when considering
whether Stout is eligible for benefits, If Stout
had been injured while teaching summer
school at a private school, instead of a public
school, she would not be entitled to ERS
benefits. Similarly, if Stout were a private
school teacher during the regular school year
but was injured while teaching at a public
school during the summer session, Stout
would not be entitled to ERS benefits. Under
these hypotheticals, it is clear that Stout
would not be eligible for ERS benefits be-
cause Stout would not have contributed part
of her pay to the ERS.’ Likewise, under the
facts of this case, Stout is not eligible for

these positions, these hypotheticals serve the pur-
pose of breaking down a complicated fact pat-
tern in order to illuminate a simple premise:
ERS benefits are directly tied to ERS contribu-
tions,

196

ERS benefits because she did not contribute
part of her summer school pay to the ERS;
the fact that she did contribute part of her
salary as a full-time teacher to the ERS is
irrelevant,

A simple rule emerges from this analysis:
only when an employee contributes to the
ERS is the employee entitled to ERS bene-
fits.8 In this case, Stout did not contribute to
the ERS from her summer school employ-
ment; she should not now be entitled to
benefits for which she has not paid.

While the Majority asserts that the legisla-
tive history of the ERS shows that “the
legislature has expanded the service-connect-
ed disability benefit over time, instead of
restricting it,” there is no indication that the
legislature intended the specific and unprece-
dented interpretation that the Majority has
read into the ERS statutes in this case.
Notably, as support for this assertion, the
Majority cites to a 1925 report on the bill to
establish a retirement system for employees
of the Territory of Hawai'i. The 1925 report
provides an example for the application of
the accidental disability benefit:

For an example of the application of this

benefit we may consider the case of an

employee who, in an explosion occurring
while at work for the government, loses his
eyesight. In such a case, the government.
would provide him with a pension of two-
thirds of his average final compensation
which would be payable as long as he lives.
If, for example, his average annual com-
pensation is $1,800. his pension under the
retirement plan would be $1,200. a year. In
addition all contributions made by the em-
ployee would be returned to him as an
additional annuity,
Joint Comm, on Pensions of the Senate and
House of Representatives, Report on the Bill
to Establish a Retirement System for Terri-
torial Employees of the Territory of Hawaii
27 (1925). The Majority reads into this exam-
ple the following rule: “[I]Jn cases where but
for an employee's service to the government
the employee would not have become dis-
abled and unable to continue to work, that

8. The Majority asserts that, under this rule,
“ERS members with two full-time State or coun-
ty jobs, required to choose one full-time position.
pursuant to HRS § 88-42.5, would not be enti-
tled to service-connected disability retirement for

employee should receive some kind of retire-
ment benefit regardless of the employee’s
duration of service and amounts contributed
to the retirement system.” However, there
are no indicia from the 1925 report that the
legislature considered such a nuanced articu-
lation of the law when it provided this simple
example; instead, the example merely illus-
trates the type of injury an award of acciden-
tal disability benefits was intended for, and
how to calculate those benefits. The example
from the 1925 report certainly does not indi-
cate that the legislature contemplated the
issue presented in the present case.

Indeed, there is no indication that the leg-
islature contemplated allowing a large class
of people—all those who work at public sum-
mer schools across the State, including teach-
ers, administrators, and various support
staff—to receive benefits without paying into
the retirement system. The Majority’s hold-
ing today creates a tremendous financial bur-
den and unfunded liability for the ERS be-
cause the ERS is now responsible for paying
benefits to an unknown number of employees
who become injured on the job but who have
not contributed into the system.

Tl. CONCLUSION

Stout presents a sympathetic narrative and
a compelling case to grant her relief, Howev-
er sympathetic her situation may be, the
court should not award remuneration to a
party out of pity when not allowed by the
statutory framework, The statutory interpre-
tation of the Majority will have far-reaching
effects and consequences, clearly unintended
by the legislature,

For these reasons, I would affirm the ERS
Board’s denial of Stout’s application for dis-
ability retirement benefits.

accidental injuries suffered during the non-mem-
bership position.” I agree with this assertion and
believe that, however harsh it appears on paper
and in practice, this is the rule that is provided
for under the law.

398 P.3d 786

Raevyn WAIKIKI, Respondent/Plaintiff-
Counterclaim Defendant-Appellee,

v

[O‘OMAKAVILLAGE ASSOCIATION OF
APARTMENT OWNERS,  Respon-
dent/Defendant-Cross-Claim —_Plaintiff-
Appellee,

and

Violet Jhun, Petitioner/Defendant-Cross-
Claim Defendant-Counterclaim Plain-
tiff-Third-Party Plaintiff-Appellant,

and

Wade Kioshi Kaleolani Shimojo,
Respondent/Third-Party
Defendant-Appellee.

SCWC-16-0000011.
Supreme Court of Hawai‘.

JUNE 80, 2017

198

Walter R. Schoettle, Honolulu, for petition-
er, Violet Jhun,

Richard Turbin, Rai Saint Chu, and Janice
D. Heidt, Honolulu, for respondent, Wade
Kioshi Kaleolani Shimojo,

RECKTENWALD, C.J., NAKAYAMA,
McKENNA, POLLACK, and WILSON, JJ.

PER CURIAM

Petitioner/third-party _plaintiff-appellant
Violet. Jhun (“Jhun”) applies for certiorari
review of the Intermediate Court of Appeals’
ICA”) March 15, 2016 order dismissing her
appeal from an unfavorable summary judg-
ment order (“Dismissal Order”). The ICA
dismissed Jhun’s appeal for lack of appellate
jurisdiction based on the absence of an ap-
pealable final judgment and also dismissed as
moot her motion requesting the ICA compel
the cireuit court to enter a final judgment.
Jhun acknowledges that a final judgment has
not been entered in the case and took steps
to obtain such a judgment, but was unsuc-
cessful. Entry of a final appealable judgment
would have perfected Jhun’s appeal.

Based on the record presented on appeal,
it appears that all claims against all parties
have been resolved and entry of a final ap-
pealable judgment was warranted. Accord-
ingly, we vacate the ICA’s March 15, 2016
Dismissal Order and remand the matter to
the ICA with instructions to temporarily re-
mand the case to the circuit court to enter an
appealable final judgment, to direct the cir-
cuit court to supplement the record on appeal
with the final judgment, and to then proceed
to consider the appeal accordingly.

I, Background

A. Brief Factual History

Raevyn Waikiki (“Waikiki”) and Jhun were
neighbors in the Ho‘omaka Village apartment.
complex in Waipahu, Hawai‘, One evening in
2011, as Waikiki was returning to her apart-
ment from walking her dog, she was injured
by Jhun’s dog.
1, The Honorable Karl K. Sakamoto presided

over the case,

B. Procedural History
1. The Lawsuit

On September 4, 2018, Waikiki filed a law-
suit against Jhun and the Ho‘omaka Village
Association of Apartment Owners (“AOAO”)
for monetary damages! The AOAO an-
swered the complaint and filed a cross-claim
against Jhun. Jhun answered the complaint
and filed a counterclaim against Waikiki,
claiming that Waikiki’s dog bit and injured
her. Jhun also filed a third-party complaint
against Wade Shimojo (“Shimojo”), who lived
with Waikiki, alleging that Shimojo and
Waikilkd’s dog provoked Jhun’s dogs earlier in
the day prior to the attack. Additionally,
Jhun answered the cross-claim filed by the
AOAO,

Jhun’s counterclaim against Waikiki was
dismissed early in the case.

In 2015, Shimojo moved for summary
judgment against Jhun with respect to the
third-party complaint? The circuit court
granted the motion and entered a written
order on June 18, 2015, The order provided
as follows:

Third-Party Defendant WADE KIOSHI
KALEOLANI SHIMOJO’s (‘Shimojo”)
Motion for Summary Judgment filed here-
in on March 6, 2015 (“motion”) came on for
hearing before the Honorable Karl K, Sa-
kamoto, Judge of the above-entitled Court,
on Friday, May 8, 2015 at 10:00 a.m., with
Janice D, Heidt appearing for Plaintiff
RAEVYN WAIKIKI (“Plaintiff”), Char-
lene S.P,T. Murata appearing for Defen-
dant HO‘OMAKA VILLAGE, ASSOCIA-
TION OF APARTMENT OWNERS
(AOAO”), Walter R. Schoettle appearing
for Defendant and Third-Party Plaintiff
VIOLET JHUN (“Shun”) and Daniel T.
Kim appearing for Shimojo, due notice
having been given. The Court, having re-
viewed and considered the motion and the
reply memorandum filed by Shimojo on
April 17, 2015, the memorandum in opposi-
tion filed by Jhun on April 14, 2015, the
statement of no position filed by AOAO on
April 15, 2015, the joinder filed by Plaintiff

2. Based on a review of the record on appeal, it

does not appear that Shimojo filed an answer to
the third-party complaint.

on April 20, 2015, the oral arguments of

counsel, the record and file of the matter

and being fully advised in the premises,
and good cause appearing therefor,

If IS HEREBY ORDERED AD-
JUDGED AND DECREED that Third-
Party Defendant WADE KIOSHI KA-
LEOLANI SHIMOJO’s Motion for Sum-
mary Judgment filed on March 6, 2015 is
GRANTED.

This Order may be approved as to form
by the parties in counterparts, each of
which when executed shall, irrespective of
the date of its execution and delivery be
deemed an original, and said counterparts
together shall constitute one and the same
instrument.

The order did not include any language re-
garding certification under Hawai'i Rules of
Civil Procedure (“HRCP”) Rule 54(b) or any
language resolving all of the claims in the
action.

Sometime thereafter, Waikiki, Jhun, and
the AOAO proceeded to resolve their claims
through the Court Annexed Arbitration Pro-
gram. The arbitrator ultimately determined
that Waikiki was 5% at fault, Jhun was 95%
at fault, and the AOAO was 0% at fault, and
noted that Shimojo was “out on summary
judgment.” After applying her contributory
percentage to the total damages awarded by
the arbitrator, Waikiki was awarded
$88,094.87. Jhun appealed the arbitrator’s de-
cision to the circuit court.

On December 9, 2015, several months after
Jhun appealed the arbitrator’s decision,
Waikiki, Jhun, and the AOAO filed a stipula-
tion, pursuant to HRCP Rule 41(a)(1)(B),?
dismissing their claims in the lawsuit:

3, Rule 41, Dismissal of actions,

(a) Voluntary dismissal; Effect thereof,

(1) By Puainrr; By Srputation. An action
may be dismissed by the plaintiff without order
of court (A) by filing a notice of dismissal at
any time before the return date as provided in
Rule 12(a) or service by the adverse party of an
answer or of a motion for summary judgment,
or (B) by filing a stipulation of dismissal signed.
by all parties who have appeared in the action,
in the manner and form prescribed by Rule
41,1 of these rules, Unless otherwise stated in
the notice of dismissal or stipulation, the dis-
missal is without prejudice, except that a no-
tice of dismissal operates as an adjudication
upon the merits when filed by a plaintiff who

199

IT IS STIPULATED AND AGREED
by and between Plaintiff/Third-Party De-
fendant RAEVYN WAIKIKI (hereinafter
“Plaintiff”)and Defendant HO‘OMAKA
VILLAGE, ASSOCIATION OF APART-
MENT OWNERS and Defendant/Third-
Party Plaintiff VIOLET JHUN (hereinaf-
ter “Defendants”), through their respective
counsel, that pursuant to Rule
41(a)[ (1)(B) of the Hawaii Rules of Civil
Procedure, all claims asserted in the Com-
plaint filed on September 4, 2013 against
the Defendants; all Counter-Claims filed
November 15, 2018 by Violet Jhun against
Raevyn Waikiki; and all Cross-Claims filed
September 12, 2018 by Ho‘omaka Village,
Association of Apartment Owners against
Violet Jhun are hereby dismissed with
prejudice,

All other claims and parties are dis-
missed, Each party to this Stipulation shall
bear their own attorneys’ fees and costs,

The stipulation was signed by Waikiki’s coun-
sel, Jhun’s counsel, and the AOAO’s counsel.
Neither Shimojo nor his counsel signed the
stipulation,

2, The Appeal

On January 8, 2016, Jhun filed a notice of
appeal in the ICA appealing from the June
18, 2015 summary judgment order on the
third-party complaint entered in favor of Shi-
mojo. Jhun cited Hawai'i Revised Statutes
(“HRS”) §§ 641-1(a)4 and 667-515 as the
basis for her appeal and contended that the
summary judgment order was made final by
the December 9, 2015 stipulation that dis-
missed all the remaining claims and parties.

has once dismissed in any court of the United
States, or of any state, territory or insular
possession of the United States an action based
on or including the same claim.

4, HRS § 641-1(a) provides that “[alppeals shall
be allowed in civil matters from all final judg-
ments, orders, or decrees of circuit and district
courts and the land court to the intermediate
appellate court, subject to chapter 602.”

5. HRS § 667-51 governs appeals in foreclosure
cases. Inasmuch as this case is not a foreclosure
case, HRS § 667-51 does not provide Jhun a
statutory basis for her appeal.

200

On February 5, 2016, Shimojo filed a state-
ment contesting jurisdiction. He argued that
the December 9, 2015 stipulation for dismiss-
al terminated Jhun’s right to relitigate her
third-party claims against him and divested
the ICA of jurisdiction over the appeal. Shi-
mojo acknowledged that Jhun could have
filed an appeal from a final judgment but
explained that “a final judgment was never
filed, the parties in the ongoing lawsuit set-
tled and filed a Stipulation for Dismissal with
prejudice of all claims and all parties which
then precluded her from adjudicating the
third-party claim again on appeal.” Shimojo
maintained that once the stipulation was
signed, the circuit court lost jurisdiction over
the claims in the lawsuit.

On February 10, 2016, Jhun filed her juris-
dictional statement. She conceded that the
June 18, 2015 summary judgment order was
not final and appealable when it was entered
but argued that the execution of the Decem-
ber 9, 2015 stipulation for dismissal was suffi-
cient to render the summary judgment order
final and appealable. She noted, however,
that at the time the parties executed the
stipulation, Shimojo’s counsel did not sign the
stipulation and, therefore, it was unclear
whether the summary judgment order had
become final and appealable in the absence of
a final judgment. Jhun explained that, to the
extent the ICA may determine the appeal to
be premature, she had recently mailed a
separate final judgment disposing of all of
the claims to all parties for approval and,
thus, asked the ICA to defer ruling on the
jurisdictional issue until the circuit court en-
tered a proper final judgment and she filed
an amended notice of appeal.

On February 18, 2016, Jhun submitted a
proposed final judgment to the circuit court
for approval. The proposed final judgment.
‘was not signed by any of the parties and was
accompanied with a letter informing the
court of the pending appeal and the jurisdic
tional issue raised by Shimojo. The proposed
judgment provided as follows:

6. A copy of the document list for the underlying
case from the Hawai‘i State Judiciary’s Ho‘ohiki
electronic database describes the entry for docket
number 89 as follows: (DENIED, 1ST DIVI-
SION) FINAL JUDGMENTI]” It is unclear from
the record the basis upon which the circuit court
declined to enter the proposed final judgment.

FINAL JUDGMENT
The “Orper Grantinc Turrp Party Dz-
FENDANT WADE Kil Josut KaLEOLANI SHIMo-
J0’s MoTIoN For Summary JuDGMEN?, FILED
Manzcx 6, 2015,” having been filed herein
on June 18, 2015; and all other claims by
all other parties having been dismissed by
stipulation of the parties thereto, filed
herein on December 9, 2015; now, therefor:
If IS HEREBY ORDERED AD-
JUDGED AND DECREED that Final
Judgment on the said Third-Party Com-
plaint be, and hereby is, entered in favor of
Third-Party Defendant, WADE KIOSHI
KALEOLANI SHIMOJO, and against
Third-Party Plaintiff, VIOLET JHUN. All
other claims by all other parties are dis-
missed with prejudice, pursuant to the
stipulation of the parties thereto, filed on
December 9, 2015. This is a Final Judg-
ment disposing of all of the claims of all of
the parties.
By letter dated February 24, 2016, Waikiki
and Shimojo objected to the submission of
the proposed final judgment on the ground
that the circuit court lacked jurisdiction over
the case pursuant to the December 9, 2015
stipulation. They explained that the Decem-
ber 9, 2015 stipulation dismissing all claims
and all parties with prejudice amounted to an
adjudication on the merits of all issues that
were raised or could have been raised in the
lawsuit; therefore, any subsequent litigation
was barred by res judicata, In response,
Jhun argued that while a HRCP Rule
41(a)(1)(B) stipulation for dismissal of all
claims is generally equivalent to a final judg-
ment, the December 9, 2015 stipulation did
not include the third-party claim that was
previously decided on summary judgment
pursuant to the June 18, 2015 summary judg-
ment order. On March 3, 2016, the circuit
court appears to have declined to enter the
proposed final judgment.
Subsequently, on March 10, 2016, pursuant
to HRS § 602-57(8),’ Jhun filed a “Motion for

7. HIRS § 602-57(3) provides that the ICA has
jurisdiction “[iJo make or issue any order or writ
necessary or appropriate in the aid of its jurisdic-
tion)”

Order or Writ in Aid of Jurisdiction” in the
ICA. Jhun asked the ICA to issue an order
or writ compelling the circuit court to exe-
cute a final judgment in the case if the ICA
deemed such a judgment was necessary to
establish appellate jurisdiction from the June
18, 2015 summary judgment order. Jhun ar-
gued that appellate jurisdiction depended
upon the finality of the June 18, 2015 sum-
mary judgment order on the third party
complaint and, therefore, a final judgment
must be entered in the case. Jhun contended
that, absent action from the ICA, because the
circuit court denied the proposed final judg-
ment, it would be necessary to petition the
supreme court for a writ of mandamus to
compel the circuit court to enter a final judg-
ment and then file another notice of appeal.

By order entered on March 15, 2016, the
ICA dismissed the appeal for lack of jurisdic-
tion and dismissed the pending motion. The
ICA concluded that, because the circuit court
had not yet entered a separate final judg-
ment disposing of all the claims in the law-
suit, it lacked jurisdiction over the appeal:

When a party attempts to assert an
appeal from a civil circuit court case, HRS

§ 641-1(a) and HRCP Rule 58 require that

such an “appeal may be taken from cireuit

court orders resolving claims against par-
ties only after the orders have been re-
duced to a judgment and the judgment has
been entered in favor of and against the
appropriate parties pursuant to HRCP

[Rule] 58[.]” Jenkins[_v. Cades Schutte

Fleming & Wright], 76 Hawaii [115,] 119,

869 P.2d [1384,] 1888 [ (1994) ] (emphasis

added). “Thus, based on Jenkins, and

HRCOP Rule 58, an order is not appealable,

even if it resolves all claims against the

parties, until it has been reduced to a

separate judgment.” Carlisle v. One (1)

Boat, 119 Hawai'i 245, 254, 195 P.8d 1177,

1186 (2008); Bailey v. Duvauchelle, 135 Ha-

wai 482, 489, 353 P.38d 1024, 1081 (2015).

Furthermore, “an appeal from any judg-

ment will be dismissed as premature if the

judgment does not, on its face, either re-
solve all claims against all parties or con-
tain the finding necessary for certification
under HRCP [Rule] 54(b).” 76 Hawai'i at

119, 869 P.2d at 1838. The Supreme Court.

of Hawai'i noted that

201

[ilf we do not require a judgment that
resolves on its face all of the issues in
the case, the burden of searching the
often voluminous circuit court record to
verify assertions of jurisdiction is cast
upon this case, Neither the parties nor
counsel have a right to cast upon this
court the burden of searching a volumi-
nous record for evidence of finality, ...
and we should not make such searches
necessary by allowing the parties the
option of waiving the requirements of
HRCP [Rule] 58.
Jenkins, 76 Hawai'i at 119, 869 P.2d at
1888 (original emphasis), “An appeal from
an order that is not reduced to a judgment
in favor or against the party by the time
the record is filed in the supreme court will
be dismissed.” Id. at 120, 869 P.2d at 1389
(footnote omitted).

On January 28, 2016, the cireuit court
clerk filed the record on appeal for appel-
late court case number CAAP-16-0000011,
which does not contain an appealable final
judgment. Therefore, we lack appellate ju-
risdiction.

Although the June 18, 2015 interlocutory
order completely resolves an entire sub-
stantive claim, the Supreme Court of Ha-
wai‘i has explained that, “based on Jenkins
and HRCP Rule 58, an order is not appeal-
able, even if it resolves all claims against
the parties, until it has been reduced to a
separate judgment.” Carlisle, 119 Hawaii
at 254, 195 P.38d at 1186; Bailey, 185 Ha-
wai‘ at 489, 358 P.3d at 1081.

(Underlining and some brackets in the origi-
nal; some brackets added.) The ICA also
noted that the December 9, 2015 stipulation
failed to satisfy the requirements of HRCP
Rule 41(a)(1)(B) for a voluntary dismissal
because it was not signed by Shimojo, who
‘was a party to the lawsuit and who appeared
in the action:

In addition, with respect to the Decem-
ber 9, 2015 stipulation to dismiss all claims,
we note that the parties have failed to
comply with the requirements of HRCP
Rule 41(a)(1)(B) for a stipulation to dis-
miss, HRCP Rule 41(a)(1)(B) provides that
a stipulation to dismiss must be “signed by

202

all parties who have appeared in the ac-
tion”:
Rule 41. Dismissal of actions.

(a) Voluntary dismissal:
thereof.

(@) By plaintiff; by stipulation, An
action may be dismissed by the plaintiff
without order of the court (A) by filing a
notice of dismissal at any time before
the return date as provided in Rule 12(a)
or service by the adverse party of an
answer or of a motion for summary
judgment, or (B) by filing a stipulation
of dismissal signed by all parties who
have appeared in the action, in the man-
ner and form prescribed by Rule 41.1 of
these rules, Unless otherwise stated in
the notice of dismissal or stipulation, the
dismissal is without prejudice, except
that a notice of dismissal operates as an
adjudication upon the merits when filed
by a plaintiff who has once dismissed in
any court of the United States, or of any
state, territory or insular possession of
the United States an action based on or
including the same claim.

(Emphases added), In the instant case,
Appellee Shimojo did not sign the Decem-
ber 9, 2015 stipulation to dismiss, despite
that Appellee Shimojo appeared in this
ease. Therefore, the December 9, 2015
stipulation to dismiss does not appear to
satisfy the requirements under HRCP
Rule 41(a)(1)(B).
(Underlining in the original.)

8. The Application for Writ of Certiorari

On April 14, 2016, Jhun timely filed an
application for writ of certiorari, which this
court accepted for review. Jhun presents one
question—Did the ICA gravely err by dis-
missing her appeal for lack of jurisdiction
rather than ordering the circuit court to file a
final judgment? Jhun argues that her notice
of appeal was premature, that she addressed
the potential jurisdictional defect in her juris-
dictional statement, and that she asked the
ICA to refrain from dismissing the appeal
but rather allow her to obtain a judgment.
from the cireuit court to perfect her appeal.
Jhun explains that based on her perceived

8. Shimojo states that on March 17, 2016, after
the ICA issued its Dismissal Order, a stipulation
was filed in the circuit court that included his

Effect

jurisdictional defect, she had the option of
seeking a writ of mandamus from this court
to direct the circuit court to enter a final
judgment but chose to seek relief in the ICA
pursuant to HRS § 602-57, which would be
‘Gust, speedy and inexpensive.” Jhun con-
tends that “[t]he modern ‘Rules of Civil Pro-
cedure were not meant to be a game of skill
where one misstep by counsel would be deci-
sive to the outcome.’” (Citing Au v. Au, 63
Haw. 210, 221, 626 P.2d 178, 181 (1981),
Conley v, Gibson, 855 U.S. 41, 47, 78 S.Ct. 99,
2 L.Ed.2d 80 (1957), and Hall v. Kim, 58
Haw, 215, 491 P.2d 641 (1971). Jhun posits
that “[t}he rule of Jenkins simply cannot be
applied in a case such as this, where the
Circuit Court refuses to file a final judgment.
Instead, the ICA should have ordered the
Circuit Court to file the judgment and as-
sumed jurisdiction pursuant to H.RAP.,
Rule 4(a)(2).” (Italics omitted and underlining
added.)

Shimojo timely filed an opposition. Shimojo
argues that the ICA properly dismissed the
appeal. Shimojo first addresses the ICA’s
point that the December 9, 2015 stipulation
was not signed by him. Shimojo explains that
his counsel’s failure to sign the stipulation
was an oversight because the third-party
claims against him had previously been “dis-
missed” on summary judgment and he was
no longer participating in the ongoing litiga-
tion. He argued that because the stipulation
lacked the signatures of all the parties, it was
not a final determination of the case and the
circuit court retained jurisdiction®

In reply, Jhun explains that she is not
arguing that the ICA has appellate jurisdic-
tion; rather, the appeal is premature and the
ICA committed grave error when it “ig-
nored” her motion for an order directing the
circuit court to enter a final judgment by
dismissing the appeal and denying her mo-
tion as moot. Jhun further contends that the
stipulation signed by Shimojo’s counsel after
the ICA issued its March 15, 2016 Dismissal
Order constitutes a “fraud upon the court”
because neither Shimojo nor his counsel were
parties to the stipulation agreement, More-

counsel's counter-part signature. The document
referenced by Shimojo is not part of the record
in the case before this court.

over, Jhun argues that Shimojo’s counsel's
counterpart signature on the stipulation was
invalid because at the time of signing (March
17, 2016), counsel no longer represented Shi-
mojo.’ Jhun asks the court to grant the cer-
tiorari application, vacate the ICA’s Dismiss-
al Order, and remand the appeal to the ICA
to order the circuit court to enter a final
judgment and thereafter consider the merits
of the appeal.

IL Discussion

A. The Requirement of a Final Judg-
ment

In Jenkins, this court set forth principles
for determining whether an order or other
decision of the circuit court is appealable,
Those principles are rooted in this court’s
“policy against piecemeal appeals[,]’ and
were intended to “simplify and make certain
the matter of appealability.” Jenkins, 76 Ha-
wai‘l at 118-19, 869 P.2d at 1887-338.

HI HRS § 641-1(a) authorizes appeals in
civil matters from “all final judgments, or-
ders, or decrees[.!” To be effective, “[the]
appeal must be taken in the manner ...
provided by the rules of court.” HRS § 641-
1(e). Rule 58 of the Hawai'i Rules of Civil
Procedure (“HRCP”) specifically requires
that “[elvery judgment shall be set forth on a
separate document{:]”

Unless the court otherwise directs and
subject to the provisions of Rule 54 of
these rules and Rule 28 of the Rules of the
Circuit Courts, the prevailing party shall
prepare and submit a proposed judgment,
The filing of the judgment in the office of
the clerk constitutes the entry of the judg-
ment; and the judgment is not effective
before such entry. The entry of the judg-
ment shall not be delayed for the taxing of
costs. Every judgment shall be set forth on
a separate document,

Accordingly, “[alIn appeal may be taken ..,
only after the orders have been reduced to a
judgment and the judgment has been en-
tered in favor of and against the appropriate
parties pursuant to [HRCP Rule] 58[.]” Jen-
kins, 76 Hawaii at 119, 869 P.2d at 1838,
9. On February 5, 2016, before the ICA issued its

Dismissal Order, Greg Markham and Keith Kato
of Chee Markham & Feldman withdrew as coun-

203

In cases involving multiple claims or multi-
ple parties, a final judgment may be entered
ag to one or more of the claims or parties but
only upon an express determination that
there is no just reason for delay and upon an
express direction for the entry of judgment:

When more than one claim for relief is
presented in an action, whether as a claim,
counterclaim, cross-claim, or third-party
claim, or when multiple parties are in-

volved, the court may direct the entry of a

final judgment as to one or more but fewer

than all of the claims or parties only upon
an express determination that there is no
just reason for delay and upon an express
direction for the entry of judgment. In the
absence of such determination and di-
rection, any order or other form of deci-
sion, however designated, which adjudi-
eates fewer than all the claims or the
rights and liabilities of fewer than all the
parties shall not terminate the action as to
any of the claims or parties, and the order
or other form of decision is subject to
revision at any time before the entry of
judgment adjudicating all the claims and
the rights and liabilities of all the parties.
HRCP Rule 54(b).

HE Thus, as aptly stated in Jenkins:

(1) An appeal may be taken from circuit
court orders resolving claims against par-
ties only after the orders have been re-
duced to a judgment and the judgment has
been entered in favor of and against the
appropriate parties pursuant to HROP 58;
(2) if a judgment purports to be the final
judgment in a case involving multiple
claims or multiple parties, the judgment
(a) must specifically identify the party or
parties for and against whom the judgment
is entered, and (b) must (i) identify the
claims for which it is entered, and (ii)
dismiss any claims not specifically identi-
fied; (8) if the judgment resolves fewer
than all claims against all parties, or re-
serves any claim for later action by the
court, an appeal may be taken only if the
judgment contains the language necessary
for certification under HRCP 54(b); and (4)
an appeal from any judgment will be dis-
sel for Shimojo and Richard Turbin and Janice

Heidt of Turbin Chu Heidt, who also represent
Waikiki, appeared as counsel for Shimojo.

204

missed as premature if the judgment does
not, on its face, either resolve all claims
against all parties or contain the finding
necessary for certification under HRCP
54(b),
Jenkins, 76 Hawai'i at 119, 869 P.2d at 1338
(emphasis omitted); see_also Carlisle v. One
1) Boat, 119 Hawai'i 245, 254, 195 P.8d 1177,
1186 (2008) (“[Blased on Jenkins and HRCP
Rule 58, an order is not appealable, even if it
resolves all claims against the parties, until it
has been reduced to a separate judgment.”).

B. The ICA Should Have Exercised Its
Authority Under HRS § 602-57(3) to
Order the Circuit Court to Enter an
Appealable Final Judgment

TE The June 18, 2015 summary judg-

ment order on the third-party complaint en-
tered in favor of Shimojo, from which Jhun
seeks to appeal, has not been reduced to a
separate appealable final judgment pursuant
to HRS § 641-1, HRCP Rules 54 and 58, and
Jenkins.

The record on appeal indicates that all
claims against all parties have been resolved.
Jhun’s third-party claims against Shimojo
were disposed of by the summary judgment
order; the remaining claims were disposed of
by stipulation. The absence of a final judg-
ment appears to be the sole factor hindering
Jhun’s appeal.

Jhun made several attempts to secure a
final judgment. While the appeal was pend-
ing, Jhun submitted a proposed final judg-
ment to the circuit court for approval and
entry. It is unclear why the cireuit court did
not enter a final judgment? Jhun also
sought relief from the ICA for an order or
writ to compel the circuit court to execute a
final judgment if the ICA determined that it
was necessary to establish jurisdiction but

10, In Bailey v. Duvauchelle, 135 Hawai'i 482,
353 P.3d 1024 (2015), we addressed the jurisdic-
tional problems that may arise for litigants when
the requirements for finality set forth under Jen-
kins are not met. We explained the circum-
stances under which the circuit courts are re-
quired to enter an appealable judgment upon a
request of a party litigant:

The circuit courts are required to enter appeal-
able final judgments that comport with the
requirements of Jenkins, and should resolve
any material deficiency in a judgment that is
brought to their attention. When a party re-

the ICA dismissed the motion as moot after
it dismissed the appeal for lack of jurisdic-
tion.

Until the circuit court enters an appealable
final judgment, Jhun will not be able to seek
review of the June 18, 2015 summary judg-
ment order. In light of the record before this
court, and in the interest of judicial economy,
the more favorable course is for a final ap-
pealable judgment to be entered by the cir-
cuit court. Having determined that it lacked
jurisdiction over the appeal due to the ab-
sence of a final judgment and in light of
Jhun’s motion requesting that it issue an
order directing the circuit court to execute a
final judgment, the ICA should have exer-
eised its authority under HRS § 602-57(8) #
to direct the cireuit court to enter an appro-
priate appealable final judgment. Once an
appealable final judgment is entered, the
pending appeal will be perfected. See HRAP
Rule 4(a)(2) (“If a notice of appeal is filed
after announcement of a decision but before
entry of the judgment or order, such notice
shall be considered as filed immediately after
the time the judgment or order becomes final
for purposes of appeal.”).

IM. Conelusion

Based on the foregoing, the ICA’s March
15, 2016 Dismissal Order is vacated. The case
is remanded to the ICA with instructions to
temporarily remand the case to the circuit
court to enter an appealable final judgment,
to direct the circuit court to supplement the
record on appeal with the final judgment,
and to then proceed to consider the appeal
accordingly,

quests that the circuit court enter an appeal-
able judgment after an appellate court dismi:

based on non-compliance with Jenkins, and
the circuit court intended its ruling to be final
and appealable, the circuit court must enter an
appealable judgment,
Bailey, 135 Hawai'i at 492, 353 P.3d at 1034
(footnote omitted).

11, HRS § 602-57(3) authorizes the ICA “[tlo
make or issue any order or writ necessary or
appropriate in the aid of its jurisdiction{.]”

398 P.3d 794
STATE of Hawai‘i, Plaintiff-Appellee,
v
Frank 0. LOHER, Defendant-Appellant.
SCAP-24489
Supreme Court of Hawai‘.
JULY 20, 2017

Ss
o

Peter C. Wolff, Jr., Honolulu and Craig W.
Jerome, for appellant.

Brian R. Vincent, for appellee.

NAKAYAMA, ACTING C.J., MCKENNA,
POLLACK, AND WILSON, JJ., AND
CIRCUIT COURT JUDGE NACINO, IN
PLACE OF RECKTENWALD, C.J.,
RECUSED

OPINION OF THE COURT BY
POLLACK, J.

This case arises from the nearly seven-
teen-year old conviction of Frank 0. Loher
for attempted sexual assault in the first de-
gree, At trial, Loher sought to present an
alibi defense based in large part on the testi-
mony of his wife and his wife’s son. Although
the trial was anticipated to last between five
and six days, the State rested its case-in-
chief in the early afternoon on the first day
of the evidentiary portion of the trial. When
the circuit court informed defense counsel
that the defense’s witnesses would be re-
quired to testify that day, counsel sought a
continuance to secure the witnesses’ presence
so that they could testify first. The circuit
court denied the requested continuance, and,
over defense counsel’s objection, the court
ordered Loher to either take the stand at
that time or forfeit his right to testify entire-
ly. As a result, Loher took the stand and
testified before the other witnesses in the
defense’s case.

Following his conviction and his unsuecess-
ful appeal, Loher sought relief in state and
federal post-conviction proceedings. As a re-
sult of the post-conviction proceedings, the
Intermediate Court of Appeals’ June 19, 2008
judgment on direct appeal was vacated so
that Loher could raise a claim that his consti-
tutional rights were violated when the circuit
court ordered him to testify first or not at all.
Loher’s case requires this court to consider
whether the circuit court erred based on
principles set forth in the United States Su-
preme Court's decision in Brooks y. Tennes-
see, 406 U.S. 605, 92 S.Ct, 1891, 82 L.Ed.2d
858 (1972), the Hawai‘ Constitution, and Ha-
wai'l caselaw, and, if the court erred, whether
the error is subject to harmless error review.

I FACTS AND PROCEDURAL
HISTORY
A. Cireuit Court Trial

On August 19, 1999, Loher was indicted by
a grand jury for attempted sexual assault in

1, The Honorable Dexter D, Del Rosario presided

207

the first degree, in violation of HRS § 705-
500 (1998) and HRS § 707-780(1)(a) (1998)
(count one), and attempted kidnapping, in
violation of HRS § 707-720(1)(d) (1998)
(count two). Loher v. State, 118 Hawai'i 522,
524, 198 P.3d 488, 440 (App. 2008), overruled
on other grounds by State v. Auld, 186 Ha-
wai'i 244, 861 P.8d 471 (2015). The State filed
a “Memorandum of Pretrial” on December 9,
1999, stating that the trial was expected to
take five to six days. Id, On November 18,
2000, the State filed its “Witness and Exhibit
List” identifying fourteen witnesses for the
State, Id,

Loher and the State each filed motions in
limine relating to the evidence to be present-
ed at trial. Id, During the hearing on the
parties’ motions, Loher stated that he intend-
ed to present an alibi defense and establish
that he was not present during the attempted
sexual assault and kidnapping. Id, Loher’s
counsel represented to the court that Loher
would testify at trial, but at various times he
algo expressed the possibility that Loher
would choose not to take the stand. Loher v.
State, No. 29818, 2011 WL 2182828, at *1
(App. May 81, 2011) (mem.),

The evidentiary portion of the jury trial
commenced at 9:30 a.m. on Tuesday, Novem-
ber 14, 2000.1 The State first called Honolulu
Police Department (HPD) Officer Oryn
Baum, Officer Baum testified that on July 29,
1999, at approximately 3:48 a.m,, she was
dispatched to an industrial area at 2722 Ka-
koi Street. Once she arrived, she was flagged
down by a female identified by Officer Baum
as the complaining witness. Officer Baum
stated that the complaining witness’s halter
top was ripped, and the officer observed a
“kind of a scratch” on her back, The com-
plaining witness described her assailant, the
vehicle he was driving, and the vehicle’s li-
cense plate number. The vehicle was subse-
quently identified by Officer Baum as belong-
ing to Frank and Andrea Loher. Following
Officer Baum’s testimony, the State called an
HPD fingerprint identification technician
who testified that five sets of fingerprints
were recovered from Loher’s car but that
none were a match to the complaining wit-
ness,

over the trial.

208

The State then called the complaining wit-
ness. complainant testified that in the early
morning hours of July 29, 1999, she was
walking along Kapiolani Boulevard when she
accepted an offer of a ride to the airport
from an individual with whom she was not
acquainted who was driving a red car. The
witness made an in-court identification of
Loher as the driver.

The complaining witness related that after
the driver got on the freeway, she fell asleep.
When she woke up, the car was parked. The
driver then demanded oral sex. As she tried
to exit the vehicle, the complaining witness
described that the driver ripped her shirt
and scratched her back in an attempt to keep
her inside of the car. She then ran out of the
car to a nearby pay phone, which she used to
call police. The complainant identified pic-
tures presented by the State of the alleged
crime scene and Loher'’s vehicle.

Following the lunch recess, the defense
began its cross-examination of the complain-
ing witness. The complainant confirmed that
earlier in the evening and prior to the inci-
dent, she fought with her boyfriend because
he got into a car with three other girls, and
she did not want to see him with the other
girls. The complaining witness clarified that
she was walking because she wanted to go to
the airport; she believed that if she could get
to the airport, she could obtain free airline
tickets from her boyfriend's uncle who
worked for an airline. Following this testimo-
ny, at 1:39 p.m., HPD Detective Earl Tak-
ahashi was called by the State and testified
that the complaining witness identified Loher
as the driver in a photographic lineup.

After the conclusion of Detective Takaha-
shi’s testimony, the State rested its case at
approximately 2:15 p.m. The court recessed,
and at 2:27 p.m., the court reconvened out-
side the presence of the jury. Loher’s counsel
requested a continuance until the next trial
day on Thursday morning because he “had
no idea that [the State] would finish [its case]
this early,” given that the State had “quite a
number of people on the witness list.” Coun-
sel stated that he told the defense witnesses

2. HRE Rule 611(a) provides as follows:
The court shall exercise reasonable control
over the mode and order of interrogating wit-
nesses and presenting evidence so as to (1)
make the interrogation and presentation effec-

to prepare to testify on Thursday; he related
that he tried to “make a couple calls” to
secure the presence of defense witnesses that
day, but they were not available. Defense
counsel apologized but stated that “it’s too
quick for us to have to present witnesses
under the circumstances.”

The circuit court denied the continuance
request, citing Hawaii Rules of Evidence
(ARE) Rule 611 (1993) and noting that there
was more than enough time left in the day to
proceed with trial? The court stated that it
would “allow the defense to call Mr, Loher to
testify” at that time. Defense counsel object-
ed, noting that Loher had a right not to
testify and that depending on the testimony
of the other witnesses, Loher may choose not
to take the stand. Counsel further argued
that the court was essentially forcing Loher
to testify.

[Defense counsel]: ... the Court is actual-

ly forcing [Loher] to take the stand be-

cause now we have nobody to call, and
you’re saying, Well, we can call Mr. Loher,
but as a strategic manner in planning for
our case, he was going to be the last
witness I call, and depending how it went
with the other witnesses, we may not need
to call him because we can get everything
that we need through the other witnesses.
So, in fact, now that we're being forced
to call him as first witness in a sense is
prejudicial to Mr, Loher because he’s be-
ing forced to testify when he, in essence,
we had not decided fully whether or not he
would testify for sure.
The court stated that it found defense coun-
sel’s argument unpersuasive because it was
counsel’s responsibility to prepare for trial.
The Court: The Court does not find the
argument persuasive. The Court believes
that it was the responsibility or is the
responsibility of counsel to determine
when witnesses would be available.
Defense counsel was free to discuss with
the State the witnesses called and when
they would anticipate finishing their case.
Defense counsel has hopefully prepared
for this case, so should be aware at the

tive for the ascertainment of the truth, (2)
avoid needless consumption of time, and (3)
protect witnesses from harassment or undue
embarrassment.

HRE Rule 61 1(a) (1993).

present time what the witnesses that he
intends to call will testify. And having pre-
pared and having a knowledge as to what
they will say, since they are the defense
witnesses, then they should be in the posi-
tion to know whether the defendant should
testify.
The court also stated that defense counsel
had represented that Loher would testify
concerning his alibi defense and suggested
that defense counsel’s objection to Loher tes-
tifying that day was manipulative.
The Court: ... So the Court believes it is
not persuasive that defense counsel should
now argue to this Court, after the Court
had denied his request to delay the trial till
Thursday by saying that he does not know
what his own witnesses will say and de-
pending what they say, he will then make
the decision whether his client’s going to
testify.

The Court would also note that during
the pretrial conferences, as well as in the
opening statement, the defendant has as-
serted an alibi that he was not present at
the time, and that where the—his location
would be during certain times defense
counsel has also represented to the Court
that his client is going to testify.

The Court is not persuaded by his argu-
ment and is concerned that this may be
manipulative in order to obtain the relief
that the Court had not granted.

When defense counsel requested permission

to respond to the court’s concerns, the court

refused, stating that it was unpersuaded by

counsel’s argument and directing counsel to

all Loher to testify or waive his testimony.
[Defense counsel]: Well, if I can respond.
The Court: Excuse me, and the Court is
unpersuaded by your argument, So we’re
going to proceed. You may call your client
to testify, or if you wish, not to testify or
engage in Tachibana at this time, and he
may waive his testimony. That is between
you and your client.

So I’m going to take a recess, and before
we do that, is your client going to testify or
is he going to waive his right to testify?

bad

After defense counsel finished his direct exami-
nation of Loher, the circuit court granted the
State’s motion for the court to reconsider its
ruling on a motion in limine excluding evidence

209

In response to the court’s question whether
Loher would testify or waive his right to
testify, defense counsel responded, “I’d like
to discuss that matter with him.” The court
then recessed so that defense counsel could
discuss with Loher whether he would testify.

The court reconvened at 2:43 p.m., and the
defense called Loher to testify. Loher stated
that he was working on the night in question.
When his shift ended at approximately 1:00
a.m. on the morning of July 29, he visited his
wife, Andrea, at the hospital where she
worked. Loher left the hospital, went to his
place of residence, and spoke with his wife on
the phone, and he then slept from approxi-
mately 3:30 a.m. until 4:00 a.m. Loher testi-
fied that he left his residence at around 4:30
am, to pick up Andrea’s son, Moses, visit
‘with Andrea at the hospital, and drive Moses
to work. Loher also testified that he had
previously served in the United States
Army.

On cross-examination, the State elicited
testimony that Loher had been dishonorably
discharged from the United States Army.
Loher acknowledged that in a prior state-
ment to Detective Takahashi, he did not say
anything about speaking with his wife on the
phone after leaving the hospital. Additionally,
Loher confirmed that he told Detective Tak-
ahashi that he left his residence to pick up
Moses at 5:30 am., rather than at 4:30 am.
as he had testified on direct examination.
Loher also agreed that he told Detective
Takahashi that no one else had access to his
car the night that the incident occurred. Af-
ter Loher finished testifying, the court re-
cessed for the day.

When trial resumed on Thursday, Novem-
ber 16, 2000, the defense called Moses and
Andrea to the stand. Andrea testified that
Loher arrived at the hospital to visit with her
shortly before 2:00 a.m. and that he left at
around 2:35 am. Andrea stated that after
Loher left the hospital and returned to his
residence, she spoke with him on the phone
twice, with the second call occurring at ap-
proximately 3:15 a.m. and lasting for fifteen

of Loher’s dishonorable discharge from the Unit-
ed States Army. The court ruled that the State
could establish that Loher was dishonorably dis-
charged.

210

to twenty minutes. Andrea called Loher
again at around 4:00 a.m. to wake him up so
that he could take Moses to work. On cross-
examination, Andrea admitted that some of
her statements at trial were inconsistent with
her prior statements to Detective Takahashi,
and she further acknowledged that she had
not told the detective that she called Loher
at 4:00 a.m, to wake him up,

Moses testified that Loher arrived to pick
him up at about 4:45 a.m, on the morning of
duly 29. Moses stated that Loher drove him
to visit with Andrea at the hospital and then
to work, where they arrived at about 6:00
am,

The State then called three rebuttal wit-
nesses who testified regarding Loher’s place
of residence and appearance on the day of
the incident and Andrea’s prior statements to
HPD, In closing arguments given that same
day, both the State and the defense de-
scribed the case as resting largely on credi-
bility.

The jury found Loher guilty of count one,
attempted sexual assault in the first degree.t
On July 18, 2001, Loher was sentenced to an
extended term of life imprisonment with the
possibility of parole, subject to a repeat-
offender mandatory minimum of thirteen
years and four months. The court ordered
Loher to serve his term of life imprisonment.
consecutively to sentences he was currently
serving in unrelated matters.®

B. Direct Appeal (No, 24489)

Prior to sentencing, trial counsel withdrew
as Loher’s counsel, and appellate counsel was
appointed to represent Loher.’ On appeal,
Loher challenged the jury instructions, the
sufficiency of the evidence, and his sentence;
he also raised a claim of ineffective assistance
of trial counsel. Appellate counsel did not
vaise the issue of Loher being forced to
testify before the other defense witnesses.
The ICA rejected Loher’s claims and af-
firmed his conviction and sentence. See State
y. Loher (Loher_I), No. 24489, 2008 WL

4, The jury concluded that count two, attempted
kidnapping, had merged with the offense
charged in count one; thus, Loher was not con-
victed of count two.

8. Loher has since fully served the prior sentences
and is currently serving the sentence imposed in

1950475 (App. Apr. 21, 2008) (mem.), Loher
unsuccessfully sought certiorari review.

C. Post-Conviction Proceedings

Thereafter, Loher engaged in post-convic-
tion litigation in both state and federal court
on the following three claims: (1) the circuit
court violated his constitutional rights by
forcing him to testify before any of his wit-
nesses or not at all, in violation of Brooks v.
Tennessee, 406 U.S. 605, 92 S.Ct, 1891, 82
L,Hid.2d 858 (1972); (2) appellate counsel ren-
dered ineffective assistance of counsel by
failing to raise the Brooks forced testimony
issue on direct appeal; and (8) the enhance-
ment of his sentence based on facts found by
the circuit court judge violated Apprendi vy.
New Jersey, 580 U.S. 466, 120 S.Ct, 2848, 147
L.Ed.2d 485 (2000).

i, State Post-Conviction Proceedings

In State v. Loher (Loher IT), No, 26000,
2005 WL 835234 (App. Feb. 11, 2005) (mem.),
the ICA rejected Loher’s Apprendi claim and
affirmed the circuit court’s denial of Loher’s
motion for correction of sentence under Ha-
wai‘i Rules of Penal Procedure (HRPP) Rule
35 (1993),

In Loher y, State (Loher IIT), 118 Hawaii
522, 589, 198 P.8d 438, 455 (App. 2008), over-
ruled on other grounds by State v. Auld, 186
Hawaii 244, 861 P.8d 471 (2015), the ICA
affirmed in part and vacated in part the
circuit court’s denial of an HRPP Rule 40
petition submitted by Loher. Specifically, the
ICA noted that Loher’s HRPP Rule 40 peti-
tion could be construed to raise a claim that
appellate counsel was ineffective for failing to
raise the Brooks forced testimony issue on
direct appeal. 118 Hawai'i at 532, 198 P.8d at
448, The ICA concluded that the cirenit court
erred in denying the HRPP Rule 40 petition
without holding a hearing on the ineffective
assistance of counsel issue, and it therefore
remanded the case to the circuit court for an
HRPP Rule 40 hearing, Id, at 589, 198 P.8d.
at 455,

this case, See Loher_v. Thomas, 2016 WL
4745164, at ¥3 (D. Haw, Sept. 12, 2016); State v.
Loher, No. 24489, 2003 WL 1950475, at *10
Gpp. Apr. 21, 2003) (mem,).

6. See Loher, 118 Hawai'i at 526, 193 P.3d at
442,

In Loher v. State (Loher IV), No. 29818,
2011 WL 2132828 (App. May 31, 2011)
(mem.), the ICA reviewed the cireuit court’s
denial of Loher’s HRPP Rule 40 petition
following the hearing conducted on remand
pursuant to Loher III, The ICA recounted
various parts of the testimony that were
presented at the hearing on remand.’ The
ICA determined that the circuit court denied
Loher’s HRPP Rule 40 petition because Lo-
her had already decided to testify prior to
trial and because trial counsel was at fault
for not having defense witnesses ready to
testify after the State rested its case. Id. at
*4-5, The ICA concluded that its opinion in
State v. Kido, 102 Hawaii 869, 76 P.8d 612
(App. 2008), had created several exceptions
to the rule set forth in the U.S, Supreme
Court’s decision in Brooks v, Tennessee, 406
U.S, 605, 92 S.Ct, 1891, 82 L.Hd2d 358
(1972), and that at least two of these excep-
tions applied in Loher’s case, Loher IV, 2011
WL 2182828, at *6-9, The ICA therefore
ruled that the circuit court correctly conelud-
ed that appellate counsel's failure to raise the
Brooks forced testimony issue on appeal did
not amount to ineffective assistance of coun-
sel. Id, at *10, The Loher IV court thus
affirmed the circuit court’s denial of Loher’s
HRPP Rule 40 petition. Id.8

ii, Federal Habeas Proceedings

Following the ICA’s decision in Loher IV,
Loher, represented by the federal public de-
fender’s office, sought habeas relief in federal
district court,

In Loher v. Thomas (Loher_ V), Civ. No.
11-00781 LEK-KSC, 2018 WL 8561780 (D.

7. The ICA noted, inter alia, the following: (1)
Loher testified that he “did not want to testify’ at
trial and "felt forced to testify when the judge
threatened to ‘end the trial right there on the
spot’ "; (2) Loher further stated that he repeated-
ly told trial counsel that he did not want to
testify; (3) trial counsel testified that it appeared
that Loher “always wanted to testify," that Loher
would testify “no matter what,” and that al-
though he preferred for Loher to testify last, ‘the
altered order of the testimony ‘[didn’t] change
things that much’" because Loher needed to
testify to a critical time period that his other
witnesses, Andrea and Moses, could not account
for; (4) and appellate counsel testified that he
had not been aware of any legal precedent on the
issue of forced testimony and that he did not

211

Haw. Oct, 2, 2018), United States Magistrate
Judge Kevin S.C, Chang entered findings
and recommendations on Loher’s habeas pe-
tition to grant in part Loher’s Apprendi claim
Jout to deny in part his ineffective assistance
of counsel claim based on the Brooks forced
testimony issue.

In Loher_v, Thomas (Loher_ VI), 28
F.Supp.8d 1182 (D. Haw. 2014), rev'd in part
by Loher v, Thomas, 825 F.8d 1108 (9th Cir.
2016), District Judge Leslie E, Kobayashi of
the United States District Court for the Dis-
trict of Hawaii adopted in part and rejected
in part the recommendations of the magis-
trate judge. The district court determined
that the ICA’s application of Brooks in Loher
IV was unreasonable, that a violation of
Brooks occurred in this case, that the viola-
tion amounted to a structural error requiring
automatic reversal of conviction, that the er-
ror was not harmless even if harmless error
analysis applied, and that appellate counsel
was ineffective for failing to raise the Brooks
claim on direct appeal. Id, at 1198-1200, The
district court therefore ordered that Loher
be released within thirty days subject to
appropriate release conditions, unless the
State elected to retry him. Id. at 1200-01.

HI The State appealed the district
court’s ruling in Loher VI to the Ninth Cir-
euit Court of Appeals. In Loher v, Thomas
Loher VII), 825 F.3d 1103 (9th Cir. 2016),
the Ninth Circuit vacated in part and af-
firmed in part the district court’s ruling.
Specifically, the Ninth Circuit concluded that
the ICA’s rejection of Loher’s Brooks claim
in Loher IV was not “objectively unreason-
able,” ° Loher VII, 825 F.3d at 1115-17.

raise the issue on direct appeal for this reason.

Loher IV, 2011 WL 2132828, at "4 (alteration in
original).

8. Loher's request for certiorari review of the
ICA’s decision in Loher IV was denied by this
court with two justices dissenting. See Loher v.
State, No. SCWC-29818, 2011 WL 5926184
(Haw. Nov. 22, 2011) (order).

9, Federal courts may not grant a state prisoner's
petition for writ of habeas corpus unless; (1) the
state court decision was “contrary to, or involved
an unreasonable application of, clearly estab-
lished” federal law, or (2) the state court decision
was based on an “unreasonable determination of
the facts in light of the evidence presented in the

212

Next, the Ninth Circuit addressed Loher’s
claim regarding ineffective assistance of
counsel. The court observed that while the
ineffective assistance of counsel claim was
independent of the Brooks claim, both claims
related to the underlying merits of Loher’s
Brooks forced testimony argument. Id. Al-
though the Ninth Circuit concluded that the
ICA’s “rejection of the Brooks claim in a
post-conviction appeal, based on a post-con-
viction record, did not involve an objectively
unreasonable application of Brooks,” this
conclusion “simply does not answer whether
a ‘reasonable probability exists’ that Loher
would have prevailed in his direct _appeal,
based on the trial record, if his counsel had
raised a Brooks claim,” Id, at 1120-21.

The court concluded that the State had
waived its challenge to the federal district
court’s ruling that Loher was entitled to
relief on the ground of ineffective assistance
of counsel, and it also concluded that Loher
prevailed on his Apprendi claim. Id, at 1121.
Therefore, the court granted Loher’s petition
for writ of habeas corpus with respect to
both his ineffective assistance of appellate
counsel and Apprendi claims and remanded
the case to the district court to determine the
appropriate remedy. Id, at 1122-23.

On remand, the federal district court in
Loher vy. Thomas (Loher VIID, Civ. 11-00731
LEK-KSC, 2016 WL 4745164, at *8 (D. Haw.
Sept. 12, 2016), issued a conditional writ di-
recting the State to release Loher unless (1)
the State moved to vacate the ICA’s decision
in Loher IV and (2) Loher’s direct appeal in
Loher I (No. 24489) was reinstated within
ninety days. The parties agreed, and the
district court ordered, that Loher’s claim re-
garding ineffective assistance of counsel
would be addressed first by reinstating his
direct appeal; then, if Loher’s direct appeal
was unsuccessful, he could seek relief based
upon his Apprendi claim. Id.

State court proceeding.” Loher VII, 825 F.3d at

1111 (quoting 28 U.S.C.A, § 2254(d) (West

1996)). As noted by the Loher VII court, “[tJhis is

a ‘difficult to meet’ and ‘highly deferential stan-

dard for evaluating state-court rulings, which

demands that state-court decisions be given the
benefit of the doubt.’” Id. (quoting Cullen v.

iii. Reinstatement of Direct
Appeal (No, 24489)

Upon the State’s motion, the ICA entered.
an order on October 25, 2016, vacating its
judgments on appeal in Nos. 24489 and
29818, The ICA reinstated Loher’s thirteen-
year old direct appeal in No. 24489 to “allow
Loher to raise on direct appeal his claim
that, in violation of his constitutional rights,
Loher was ‘forced’ to testify when the trial
court refused to grant Loher a continuance
in order to testify after his other witnesses.”
On December 19, 2016, Loher’s appeal was
transferred to this court.

IL STANDARD OF REVIEW

HM This court “answer[s] questions of
constitutional law by ‘exercising our own in-
dependent judgment based on the facts of
the case.’” State v. Aplaca, 96 Hawai'i 17, 22,
25 P.8d 792, 797 (2001) (quoting State v.
Jenkins, 93 Hawai‘i 87, 100, 997 P.2d 18, 26
(2000)). Thus, “questions of constitutional law
are reviewed on appeal ‘under the “right/
wrong” standard.’” Id. (quoting Jenkins, 93
Hawai'i at 100, 997 P.2d at 26),

I. DISCUSSION

On this renewed direct appeal, Loher con-
tends that the circuit court’s denial of a
continuance, thereby forcing him to testify
before his other witnesses or not at all, vio-
lated his fundamental rights under the feder-
al and Hawai'i constitutions. Loher addition-
ally argues that the circuit court’s action in
this case amounts to “structural error” and is
therefore not subject to harmless error re-
view.!0 The State submits that the circuit
court’s denial of the requested continuance
did not constitute error. Even assuming the
existence of error, the State contends that
harmless error review is applicable and that
any error in this case was harmless beyond a
reasonable doubt.

Pinholster, 563 U.S, 170, 181, 131 S.Ct. 1388,
179 L.Ed.2d 557 (2011)).

10. Loher alternatively submits that if harmless
error review does apply, the State cannot prove
that the error in this case was harmless beyond a
reasonable doubt.

A, Interference with Defendant’s
Decision to Testify
i, Relevant Caselaw

In Brooks v. Tennessee, the United States
Supreme Court was called upon to review the
constitutionality of a Tennessee statute that
required a defendant wishing to testify to
take the stand before any other testimony for
the defense was presented. 406 U.S. 605, 606,
92 S.Ct. 1891, 82 L.Ed.2d 858 (1972), The
Court stated that “the rule that a defendant
must testify first” was based on a concern
that defendants would observe the testimony
of their witnesses, testify last, and tailor
their testimony to match the prior witnesses’
accounts, Id, at 607, 92 S.Ct, 1891.

Tn its analysis, the Court first considered
the uncertainties facing a defendant who
must decide whether or not to testify. The
Court noted that a defendant’s choice to take
the stand “may pose serious dangers to the
success of an accused’s defense” because it
“carries with it serious risks of impeachment
and cross-examination” and may also “open
the door to otherwise inadmissible evidence
which is damaging to his case.” Id. at 609, 92
S.Ct. 1891 (quoting McGautha. alifornia,
402 U.S. 188, 218, 91 S.Ct. 1454, 28 L.Bd.2d
711 (1971)). The Court also pointed out that
although a defendant will usually have some
idea of the strength of the defense’s evi-
dence, the defendant cannot be absolutely
certain that the defense’s “witnesses will tes-
tify as expected or that they will be effective
on the stand.” Id, The Court elaborated that
such witnesses “may collapse under skillful
and persistent cross-examination, and ...
fail to impress the jury as honest and reliable
witnesses.” Id. Additionally, “the defendant
is unlikely to know” whether testimony of
other witnesses “will prove entirely favor-
able.” Id, at 609-10, 92 S.Ct. 1891.

The Court reasoned that due to these un-
certainties, a defendant may not know at the
close of the State’s case whether the defen-
dant’s own testimony “will be necessary or
even helpful.” Id. at 610, 92 S.Ct. 1891. Thus,
the defendant might prefer to remain silent
rather than risk the dangers of then taking
the stand, putting off testifying “until its
11, The Court held in part that the statute violated

the defendant's constitutional due process rights

as imposed on the states by the Fourteenth
Amendment. 406 U.S, at 612, 92 S.Ct. 1891.

213

value can be realistically assessed.” Id. Un-
der the Tennessee statute, however, defen-
dants were denied the ability to realistically
assess the value of their testimony before
deciding whether to testify, as the statute
required defendants to make the decision at
the close of the State’s case-in-chief and be-
fore presenting any other defense witnesses.
Id, The Court determined that the statute
“exacts a price for [the defendant’s] silence”
by keeping the defendant off the stand en-
tirely unless the defendant chooses to testify
first, thereby “cast[ing] a heavy burden on a
defendant’s otherwise unconditional right not
to take the stand.” Id. at 610-11, 92 S.Ct.
1891.

The Court concluded that although the
statute reflected “a state interest in prevent-
ing testimonial influence,” this interest was
insufficient to overcome the defendants con-
stitutional right to remain silent. Id. at 611-
12, 92 S.Ct. 1891, The Court therefore held
that the statute “violate[d] an accused’s con-
stitutional right to remain silent insofar as it
requires [the defendant] to testify first for
the defense or not at all.” Id. at 612, 92 S.Ct.
1891.

In addition to concluding that the statute
violated the defendant’s constitutional right
to remain silent, the Court also determined
that the statute infringed on the defendant's
constitutional right to due process of law. Id.
The Court observed that “[wlhether the de-
fendant is to testify is an important tactical
decision as well as a matter of constitutional
right,” and “[bly requiring the accused and
[defense counsel] to make that choice without
an opportunity to evaluate the actual worth
of their evidence, the statute restricts the
defense—particularly counsel—in the plan-
ning of its case,” Id, Further, the penalty for
the defendant’s decision to exercise his or
her right to remain silent “is to keep the
defendant off the stand entirely,’ even
though counsel, as a matter of professional
judgment, may want to call the defendant to
testify later in the trial. Id. As a result, the
statute operated to deprive the accused of
“the ‘guiding hand of counsel’ in the timing of
this critical element of the defense.” 4 Id. at
612-18, 92 S.Ct. 1891 (quoting Powell v. Ala-

However, subsequent decisions of the United
States Supreme Court have alternatively charac-
terized the due process clause violation found in
Brooks as a violation of the defendant's right to

214

bama, 287 U.S 45, 69, 58 S.Ct. 55, 77 L.Ed.
158 (1982)), Although the Court noted that
“nothing [it] say[s] here otherwise curtails in
any way the ordinary power of a trial judge
to set the order of proof, the accused and
[defense] counsel may not be restricted in
deciding whether, and when in the course of
presenting [the] defense, the accused should
take the stand.” Id, at 618, 92 S.Ct. 1891.

Hawai'i appellate courts have considered
the principles established by Brooks on sev-
eral occasions, In State v. Grindles, 70 Haw.
628, 588, 777 P.2d 1187, 1191 (1989), this
court first relied on Brooks to hold that a
defendant was entitled to have the State
present its entire case before deciding
whether or not to take the stand, In Grin-
les, the defendant was charged with driving
under the influence of intoxicating liquor, and
the relevant statute set forth one offense
with alternative methods of proof.!? Id. at
580-81, 777 P.2d at 1189. At trial, the court
announced that it would bifurcate the pro-
ceedings based on the two alternative means
of committing the offense. Id, at 529, 777
P.2d at 1189, After the State presented its
evidence with respect to the first means of
committing the offense, the court ordered
that the defendant should present his case on
that issue before the court would proceed
with the State’s case-in-chief on the second
means, Id, at 529-80, 777 P.2d at 1189,

The defendant refused to present any tes-
timony until the State had presented its en-
tire case against him, arguing that the trial

the effective assistance of counsel. See, e.g., Her-
ring v. New York, 422 U.S, 853, 857-58, 95 S.Ct.
3550, 45 L.Bd.2d 593 (1975) (identifying Brooks,
406 U.S. 605, 92 S.Ct. 1891, as contributing to a
“meaning [of the right to the assistance of coun-
sel] that ensures to the defense in a criminal trial
the opportunity to participate fully and fairly in
the adversary factfinding process”); Cuyler_v.
Sullivan, 446 U.S. 335, 344, 100 S.Ct. 1708, 64
L.Ed.2d 333 (1980) (stating that “court proce-
dures that restrict a lawyer's tactical decision to
put the defendant on the stand unconstitutionally
abridge the right to counsel” and citing Brooks,
406 U.S. 605, 92 S.Ct. 1891, as an example);
United States v. Cronic, 466 U,S. 648, 659 n.25,
104 S.Ct. 2039, 80 L.Bd.2d 657 (1984) (reason-
ing in context of the right to effective assistance
of counsel that “a trial is unfair if the accused is
denied counsel at a critical stage of [] trial” and
citing Brooks, 406 U.S, 605, 92 S.Ct, 1891, as an
example); Strickland v. Washington, 466 U.S.
668, 686, 104 S.Ct, 2052, 80 L.Bd.2d 674 (1984)

court’s proposed procedures violated his con-
stitutional rights. Id, This court agreed, rea-
soning that as applied to criminal trials, the
“denial of due process is the failure to ob-
serve that fundamental fairness essential to
the very concept of justice” and concluding
that the trial court's procedures violated the
defendant’s “due process right to a fair trial”
because the procedures were “fundamentally
unfair.” Id, at 582, 777 P.2d at 1190 (quoting
Lisenba y. California, 314 U.S. 219, 286, 62
S.Ct, 280, 86 L.Ed. 166 (1941)).

The Grindles court also analyzed the Su-
preme Court’s decision in Brooks, 406 U.S,
605, 92 S.Ct. 1891, and observed the signifi-
cance of “a defendant’s constitutional inter-
est in controlling the timing and sequence of
evidence” in the defense’s case. Grindles, 70
Haw. at 582, 777 P.2d at 1190, The court
concluded that based on Brooks, 406 U.S,
605, 92 S.Ct, 1891, “the defendant has an
absolute right to hear the State’s case” be-
fore deciding whether or not to testify.
Grindles, 70 Haw. at 538, 777 P.2d at 1191
(emphasis omitted), As a result, the court
determined that the procedures also improp-
erly burdened the defendant's right against
self-incrimination afforded by the Fifth
Amendment to the United States Constitu-
tion and article I, section 10 of the Hawai'i
Constitution, Id. at 582, 777 P.2d at 1190,

In State v, Kido, 102 Hawai'i 369, 878, 76
P.8d 612, 621 (App. 2008), the ICA applied
Brooks and Grindles to hold that an order
requiring a defendant to testify prior to other

(determining that ‘[glovernment violates the
right to effective assistance [of counsel] when it
interferes in certain ways with the ability of
counsel to make independent decisions about
how to conduct the defense” and citing Brooks,
406 U,S, 605, 92 S.Ct, 1891, as an exampl
y. Cone, 535 U.S. 685, 695, 696 n,3, 122
1843, 152 L.Ed.2d 914 (2002) (describing situa-
tions implicating the Sixth Amendment right to
counsel and citing Brooks, 406 U.S. 605, 92 S.Ct.
1891, as an example of an actual or constructive
complete denial of counsel at a critical stage in
the proceedings).

12, Commission of the offense at issue in Grindles
could be demonstrated if either (1) the defendant
operated a vehicle while under the influence of
intoxicating liquor, or (2) the defendant operated
a vehicle with “0.10 percent or more, by weight
of alcohol in the person's blood.” 70 Haw. at
530-31, 777 P.2d at 1189 (quoting HRS § 291.
4(a) (repealed 2000).

defense witnesses violated the defendant's
state and federal constitutional rights to due
process and against self-incrimination. In
Kido, the defense sought to begin its case at
trial by calling to the stand a witness that
was being held by the State on an unrelated
matter; the witness was present at the court-
house, but was occupied in a different hear-
ing. 102 Hawai'i at 871-72, 76 P.8d at 614-15.
Because the witness was not available, the
trial court required the defense to call the
defendant to the stand because he was the
only other witness present and because of
the court’s concern that the parties were
“wasting time.” Id. at 872, 76 P.8d at 615.
Following defense counsel’s overruled objec-
tion, the defendant testified and was subse-
quently convicted. Id,

On appeal, the ICA first reviewed the
United States Supreme Court’s decision in
Brooks, 406 U.S, 605, 92 S.Ct. 1891. Kido,
102 Hawai'i at 374-76, 76 P.8d at 617-19. The
ICA noted that “some federal and state ap-
pellate courts, presented with averments of
Brooks error, have declined to find constitu-
tional error” in the following three categories
of cases: (1) where “the trial court required
that the defendant testify before only some
of his witnesses”; (2) where “the defendant’s
decision whether to testify congealed before
the trial court’s action”; and (8) where “the
defendant himself created the exigency for
taking his testimony first.” Id. at 876, 76 P.38d
at 619, The ICA elaborated that “[iJn so
holding, some of those courts have noted the
distinction between the statutory directive in
Brooks and the trial court directive before
them, though none have explained why the
distinction makes a constitutional difference,”
Id, (footnote omitted),

The ICA concluded, however, that “those
eases [were] factually distinguishable” be-
cause “the choice foisted upon Kido was ef-
fectively the same choice the Tennessee stat-
ute forced upon Brooks”—~i.e., testify first,
before any other defense witnesses, or do not
testify at all. Id, The ICA noted that the
record contained no indication that the defen-
dant had already decided to testify, that the

13. In its 2008 decision in Loher III, 118 Hawai'i
at 539, 193 P.3d at 455, the ICA once again
addressed Brooks and its progeny. Although the
ICA in Loher IMI addressed only whether appel-
late counsel was ineffective for failing to raise the

215

defendant “created an exigency that pushed
him to the head of the witness list,” or that,
the inconvenience that would have resulted
from delaying the proceedings to secure the
presence of the other defense witness would
have been anything more than “trifling.” Id,
at 877, 76 P.8d at 620, The ICA therefore
held that the trial court abused its discretion
in “directing, over Kido’s objection, that he
testify before his other defense witness.” Id.
at 878, 76 P.8d at 621.

The ICA again considered the issue of
forced testimony in State v. Sale, 110 Hawai'i
886, 188 P.8d 815 (App. 2006). In Sale, the
defendant affirmed during trial that he would
take the stand but sought to testify after his
only other witness. 110 Hawai'i at 390-91, 188
P.8d at 819-20, However, when the other
witness could not be located, the circuit court
required the defense to proceed with its case
“in the interest of not wasting time.” Id. at
891, 183 P.8d at 820. As a result, the defen-
dant took the stand and testified in his own
defense, Id, Although the other witness was
later located, he stated his intent to invoke
his right against self-incrimination; when the
defense sought to have the witness testify as
to basic facts of his relationship with the
defendant, the circuit court deemed such tes-
timony inadmissible under HRE Rule 408
(1998). Id, at 391-92, 183 P.8d at 820-21.

The defendant in Sale subsequently ap-
pealed his conviction, arguing, inter alia, that
the trial court erred in requiring him to
testify before resolving whether his other
witness would testify. Id. at 396, 188 P.8d at
825. The ICA in its decision analyzed both
Brooks, 406 U.S, 605, 92 S.Ct. 1891, and
Kido, 102 Hawaii 369, 76 P.8d 612, and ob-
served that “[nJotwithstanding the broad lan-
guage in Brooks, courts have declined to find
constitutional error in circumstances factual-
ly distinguishable from Brooks.” Sale, 110
Hawai'i at 397, 183 P.3d at 826, However, the
ICA determined that it “need not address
whether the circuit court’s actions amounted
to Brooks error” because it “conclude[d] that
any error was harmless beyond a reasonable
doubt.” Id. The ICA reasoned that the de-

Brooks forced testimony issue on direct appeal, it
observed in a footnote that “in Kido, [the ICA]
identified various situations where Brooks error
would not be found,” 118 Hawai'i at 533 n.6,

216

fendant “had already stated his decision to
testify on the record” before the circuit court
required him to testify first and the defen-
dant “turned out to be the only witness for
the defense.” Id, at 397-98, 183 P.3d at 826-
27.

ii, A Court May Not Restrict a
Defendant in Deciding Whether
and When to Testify

Hl Caselaw of this jurisdiction and of the
United States Supreme Court makes clear
that a defendant and defense counsel “may
not be restricted in deciding whether, and
when in the course of presenting his [or her]
defense, the accused should take the stand.”
Brooks, 406 U.S. at 618, 92 S.Ct, 1891. Any
such restriction violates Hawaii’s constitu-
tional guarantee against self-incrimination
provided by article I, section 10, the right to
due process of law under article I, section 5,
and the right to the assistance of counsel 14
under article I, section 14,15 as well as the
analogous provisions of the United States
Constitution, See U.S. Const. amend. V; U.S.
Const, amend. XIV; U.S. Const. amend. VI.

Although Brooks addressed a statute that
imposed restrictions on a defendant’s deci-
sion whether and when to take the stand, the
Court’s concerns that the restriction preclud-
ed the defendant from making the choice to
testify or remain silent “in the unfettered
exercise of [the defendant’s] own will” and
also deprived the accused of “the ‘guiding
hand of counsel’” apply with as much
strength to a court’s directive at trial as to a
requirement imposed by statute, Id. at 610,
612-18, 92 S.Ct. 1891 (first quoting Malloy v.

193 P.3d at 449 n.6. The ICA then listed the three
categories of cases identified in and briefly
recounted its opinions in both Kido and Sale. Id.

Additionally, in its unpublished opinion of Lé
her IV, No, 29818, 2011 WL 2132828, at *7-9,
the ICA likewise stated that other courts “ha[d]
held that no Brooks error exists” in the three
categories of cases identified by Kido, and it
applied two of the exceptions to determine that
there was no Brooks error in Loher's case.

14. Although courts of this jurisdiction have pre-
viously found such a requirement to violate the
privilege against self-incrimination and the right
to due process, we concur with the reasoning of
multiple decisions issued by the United States
Supreme Court, see supra note 11, that the rea-
soning underlying the Brooks court's finding of a
due process violation also implicates the consti-
tutional guarantee to the effective assistance of

Hogan, 378 U.S. 1, 8, 84 S.Ct. 1489, 12
L.Ed.2d 658 (1964); then quoting Powell, 287
U.S. at 69, 58 S.Ct. 55); see also Kido, 102
Hawai'i at 376, 76 P.3d at 619 (observing that
some courts have “noted the distinction be-
tween the statutory directive in Brooks and
the trial court directive before them, though
none have explained why the distinction
makes a constitutional difference” (footnote
omitted); Grindles, 70 Haw. at 531-33, 777
P.2d at 1190-91 (deeming unconstitutional a
trial court’s bifurcation of proceedings and
directive that a defendant testify prior to the
close of the State’s case based in part on
Brooks, 406 U.S. 605, 92 S.Ct. 1891).

The State argues, however, that no Brooks
violation occurred in this case because this
jurisdiction has adopted exceptions to the
principles recognized in Brooks and because
at least two of these exceptions apply. In
support of its argument on this issue, the
State relies primarily on the ICA’s decision
in Kido, 102 Hawai‘ 369, 76 P.3d 612,

Kido, however, did not adopt exceptions to
the principles elucidated in Brooks, Rather,
the ICA in Kido observed that “some federal
and state appellate courts” had adopted such
exceptions. 102 Hawai'i at 376, 76 P.3d at 619
(emphasis added). The Kido court identified
three categories of cases in which other
courts confronted with a Brooks error had
declined to find constitutional error. Id. Al-
though the Kido court observed that the
record was devoid of an indication that two
of these exceptions were relevant to its dis-
position, it ultimately concluded that the de-
fendant’s constitutional rights were violated

counsel, See Brooks, 406 U.S. at 612-13, 92 S.Ct,
1891 (describing the relevant violation as based
on the accused’s deprivation of “the ‘guiding
hand of counsel’ in the timing of [a] critical
element of [the] defense” and the fact that the
statute “restricts the defense—particularly coun-
sel—~in the planning of its case” (quoting Powell,
287 U.S. at 69, 53 S.Ct. 55)),

15. See Haw. Const. art. I, § 10 (“[NJor shall any
person be compelled in any criminal case to be a
witness against oneself.”); Haw. Const. art. I, § 5
(No person shall be deprived of life, liberty or
property without due process of law....”); Haw.
Const, art. I, § 14 (“In all criminal prosecutions,
the accused shall enjoy the right to ... have the
assistance of counsel for the accused’s de-
fense.”).

because “the choice foisted upon Kido was
effectively the same choice the Tennessee
statute forced upon Brooks.” Id,

Nor did the ICA adopt exceptions to the
Brooks ruling in Sale. 110 Hawai'i 886, 183
P.3d 815, The ICA in Sale again stated that
some courts had “declined to find” a Brooks
violation in “factually distinguishable” cir-
cumstances. Sale, 110 Hawai'i at 397, 138
P.3d at 826. Although the Sale court did
consider the legal relevance of one of the
exceptions identified by Kido (namely,
whether the defendant’s decision to testify
had “congealed”)., it did so only within the
context of determining whether any alleged
Brooks error would be harmless beyond a
reasonable doubt, thereby confirming that it
did not find that this consideration should be
analyzed in determining whether a violation
occurred. Sale, 110 Hawai'i at 397, 183 P.8d
at 826,16

Significantly, this court has not adopted
“exceptions” to the constitutional protections
first set forth by the Supreme Court in
Brooks and subsequently affirmed in this
jurisdiction, Rather, this court’s consider-
ation of Brooks reflects our understanding of
the grave importance of “a defendant’s con-
stitutional interest in controlling the timing
and sequence of evidence in his defense,”
Grindles, 70 Haw. at 582, 777 P.2d at 1190.
Further, the possible exceptions identified by
the ICA in Kido are inconsistent with the
protections afforded to defendants in this
jurisdiction and with the concerns underlying
the Supreme Court’s decision in Brooks. 406
US, at 612-13, 92 S.Ct. 1891.

One exception involves a factual inquiry
into whether the defendant previously decid-
ed to testify and whether this decision had
“congealed” prior to the trial court’s require-
ment that the defendant testify or waive the
right. Kido, 102 Hawaii at 876, 76 P.8d at
619. This exception, however, is in derogation

16. While the ICA in Loher III observed in a
footnote that “[iJn Kido, [the ICA] identified vari-
ous situations where Brooks error would not be
found,” 118 Hawai'i at 533 n.6, 193 P.3d at 449
n.6, this appears to be based upon a misreading
of its prior decision in Kido.

17. See also United States v. Cook, 608 F.2d
1175, 1189 (th Cir. 1979) (Kennedy, J., dissent-
ing in part and concurring in part) (“At the
outset of the trial, a defendant in good faith may

217

of the latitude given to a defendant to delay
deciding whether to take the stand until after
the defense’s case has been presented and to
be able to change one’s mind following any
preliminary decision. Brooks, 406 U.S. at
609-10, 92 S.Ct. 1891. The Brooks Court’s
conclusion that a defendant is constitutionally
entitled to not decide whether to testify until
after viewing the strength of the defendant’s
case was based in large part on a concern
that even though a defendant may make a
preliminary decision whether to take the
stand, such a decision may change after pres-
entation of the witnesses and other evidence
in the defense’s case. See id.; Grindles, 70
Haw. at 582-88, 777 P.2d at 1190-91!" An
exception based on a defendant’s preliminary
decision as to whether to take the stand
would conflict with the ruling in Brooks be-
cause it would remove the defendant’s power
to choose whether, and when, to testify once
a provisional decision had been made, there-
by eliminating the defendant’s right to
change his or her mind as the defense’s case
at trial proceeds.

Adopting an exception to Brooks that ex-
cuses a violation of a defendant's constitu-
tional rights based on the defendant’s prior
assertion that he or she would take the stand
is also inconsistent with fundamental princi-
ples that underlie this court’s decision in
Tachibana v. State, 79 Hawai'i 226, 900 P.2d
1298 (1995). In Tachibana, we held that trial
courts must conduct an on-the-record collo-
quy to advise defendants of their right to
testify and to determine whether the defen-
dant wishes to exercise or waive the right.
Id, at 237-38, 900 P.2d at 1804-05. We con-
cluded that the “ideal time” to conduct the
colloquy is “immediately prior to the close of
the defendant’s case,” based in large part on
our observation that “the defendant may not
be in a position to decide whether to waive

intend to testify, but it may be quite reasonable
for him to change his mind after considering the
course taken by the evidence. All of us know a
defendant may tell a brave story to his counsel
only to succumb to fear once the full weight of
the prosecution's case becomes apparent. In
these instances a defendant and his counsel often
elect to invoke the self-incrimination privilege
despite an earlier plan to testify.”), overruled on
other grounds by Luce v. United States, 469 U.S.
38, 105 S.Ct. 460, 83 L.Bd.2d 443 (1984).

218

the right to testify until all other evidence
has been presented.” Id. at 287, 900 P.2d at
1804. Implicit in our holding in Tachibana
was our conclusion that a defendant must be
afforded the opportunity to not decide wheth-
er to take the stand until the close of the
defense’s case. An exception that effectively
waives the defendant’s constitutional right to
testify or not to testify based on a prelimi-
nary decision, made before the defense’s case
was presented, would be inconsistent with
the principles enunciated in Tachibana.

HM An exception grounded in a defen-
dant’s prior assertion regarding the decision
to testify would also run counter to the em-
phasis placed by Tachibana and its progeny
on the fundamental importance of ensuring
that such a decision is made knowingly and
intelligently. Id. at 283-86, 900 P.2d at 1300-
08; see also State v. Monteil, 184 Hawai'i 361,
871, 841 P.8d 567, 577 (2014) (“[A] decision
by a defendant not to testify should be based
upon a defendant’s awareness of the ‘relevant
circumstances and likely consequences’ of
such a decision.” (quoting Brady v. United
States, 397 U.S, 742, 748, 90 S.Ct. 1463, 25
L.Hd.2d 747 (1970). In the context of decid-
ing whether to testify or not testify, a fully-
informed determination requires the defen-
dant to have knowledge of and “intelligently
weigh” “the advantages and disadvantages”
of testifying and being subject to cross-exam-
ination, which the defendant may be unable
to assess until the close of the defense’s case.
Grindles, 70 Haw. at 582-88, 777 P.2d at
1190-91 (quoting Brooks, 406 U.S. at 608, 92
S.Ct. 1891). Requiring the defendant to
choose whether or not to take the stand
based on a prior, preliminary decision—made
before being able to assess the state of the
defense at trial—will often impair the defen-
dant’s ability to make a knowing, fully-in-
formed choice.

The remaining exceptions identified by the
ICA in Kido suffer from similar flaws. 102
Hawaiii at 376, 76 P.3d at 619. The “exigen-
ey” exception is based on a defendant’s rela-
tive fault for “creat[ing] the exigency for
taking his testimony first.” Id. This exception
would result in the automatic forfeiture of a

18. See, eg. Kido, 102 Hawai'i at 371-72, 76
P.3d at 614-15 (defendant required to testify first
based on State’s inability to produce defense’s
other witness at trial); Sale, 110 Hawai'i at 390-

defendant's constitutional rights if, for exam-
ple, defense counsel inaccurately predicts the
number of witnesses who are called to testify
by the State, overestimates the duration of
the witnesses’ testimony, misunderstands a
communication by the State regarding the
expected length of trial, or fails to anticipate
that a defense witness will be tardy or not
appear.8

An exigency exception would therefore
permit the errors of counsel to waive funda-
mental rights held exclusively by the defen-
dant, despite our requirement that such re-
linquishment may be effectuated “only by the
defendant.” Tachibana, 79 Hawai'i at 232, 900
P.2d at 1299 (quoting State v. a, 78 Ha-
waiti 115, 128, 890 P.2d 702, 710 (App. 1995),
abrogated on other grounds by Tachibana, 79
Hawai'i 226, 900 P.2d 1293); see also id. (“a
defendant’s personal constitutional right to
testify truthfully ... may not be waived by
counsel as a matter of trial strategy” (quot-
ing United States v. Moody, 977 F.2d 1425,
1481 (11th Cir. 1992))). Predicating the depri-
vation of a defendant’s constitutional rights
on inadvertent errors of counsel or a late
arrival of a witness is also a deficient proxy
for ensuring that a defendant makes a know-
ing, intelligent, and fully-informed decision
whether to testify. See id. at 282, 900 P.2d at
1299,

The final exception identified by Kido re-
lates to whether the trial court required that
the defendant testify “before only some of his
for her] witnesses.” 102 Hawaii at 376, 76
P.8d at 619, However, compelling the defen-
dant to testify or to give up that right after
the first or second witness but prior to the
remaining defense witnesses suffers from the
same constitutional flaws as the two excep-
tions deseribed above. Namely, such an ex-
ception would force the defendant to make
the decision whether to testify before the
value of the defense’s remaining evidence
could be “realistically assessed,” Brooks, 406
US. at 610, 92 S.Ct, 1891, and it would be an
inadequate substitute for securing a defen-
dant’s knowing and intelligent waiver of his
or her constitutional rights, Tachibana, 79

91, 133 P.3d at 819-20 (defendant required to
testify first based in part on defense counsel’s
inability to secure presence of other defense wit-
ness),

Hawai'i at 288-36, 900 P.2d at 1800-03. Fur-
ther, there appears to be no reasonable basis
for a rule that would prohibit the court from
requiring a defendant to testify first, yet
permit the court to order a defendant to
testify or give up that right prior to the
presentment of other witnesses in the de-
fense’s case,

HE Although it is true that under HRE
Rule 611 (1998), the trial judge possesses the
authority to “exercise reasonable control over
the mode and order of interrogating wit-
nesses and presenting evidence,” the rules of
evidence “cannot override the constitutional
rights of the accused.” State v. Calbero, 71
Haw, 115, 124, 785 P.2d 157, 161 (1989); see
also State v. Tetu, 189 Hawai'i 207, 214, 386
P.8d 844, 851 (2016) (observing that the rules
of criminal procedure do not set “outer lim-
it{s}” on the court’s power to protect consti-
tutional rights). The trial court may not rely
on its authority to set the order of proof in a
manner that violates the constitutional rights
of defendants, and, therefore, it may not
invoke such authority to require the defen-
dant to testify before the defense’s other
witnesses or not at all. See Brooks, 406 U.S.
at 618, 92 S.Ct. 1891 (“While nothing we say
here otherwise curtails in any way the ordi-
nary power of a trial judge to set the order
of proof, the accused and his counsel may not
be restricted in deciding whether, and when
in the course of presenting his defense, the
accused should take the stand.” (emphases
added)). Accordingly, while a trial court may
control the mode and order of the presenta-
tion of evidence at trial to serve the interests
of judicial economy, “[p]ressuring the defen-
dant to take the stand, by foreclosing later
testimony if [the defendant] refuses, is not a
constitutionally permissible means” of achiev-
ing this goal!® Id. at 611, 92 S.Ct. 1891,

In sum, the United States Supreme Court
established in Brooks, 406 U.S. at 618, 92
S.Ct. 1891, that a defendant may not be
restricted in deciding whether to waive the
privilege against self-incrimination or in de-

19. We observe that a trial court retains authority
to deny a continuance requested by the defense
during trial when, despite being given reasonable
and sufficient opportunity to secure a witness,
the witness does not appear at trial.

219

termining when the defendant should take
the stand in the defense’s case. We adopted
this principle in Grindles and concluded that
the Hawai'i Constitution likewise protects a
defendant’s freedom to choose when and
whether to testify for the defense. 70 Haw. at
581-88, 777 P.2d at 1190-91. The exceptions
identified by the ICA in Kido, 102 Hawai‘ at
376-77, 76 P.8d at 619-20, are inconsistent
with this court’s ruling in Grindles and con-
trary to the protections afforded to defen-
dants under the Hawai‘i Constitution, and,
therefore, we decline to adopt them.”

iii, The Circuit Court Violated Loher’s
Constitutional Rights by Compelling
Him to Testify Before His Other Wit-
nesses or Not At All

Il In this case, the State identified up to
fourteen witnesses that it would call in its
case-in-chief, and the trial was expected by
the parties and the court to last between five
and six days, On the first day of the eviden-
tiary portion of the trial on Tuesday, Novem-
ber 14, 2000, the State rested its case at
approximately 2:15 p.m, The circuit court
then announced that it would take a brief
recess, after which it would “give the defense
an opportunity to present any evidence.”
When the court reconvened outside the pres-
ence of the jury, defense counsel requested a
continuance until the next trial day on Thurs-
day, November 16, when the defense’s wit-
nesses had been arranged to appear. Accord-
ing to defense counsel, the unavailability of
the two witnesses was due to counsel’s ap-
proximation that the witnesses would not be
needed until Thursday. Counsel informed the
court that he “had no idea that [the State]
would finish this early ... because they have
quite a number of people on the witness list.”

Defense counsel further explained to the
circuit court the reasons for requesting the
continuance, stating that Loher “had not de-
cided fully whether or not he would testify
for sure.” Counsel informed the court that

20. To the extent that Kido and other prior cases
of the ICA may be read as approving such excep-
tions, this reading is rejected. See, e.g, Kido, 102
Hawai'i at 376-77, 76 P.3d at 619-20; Sale, 110
Hawai'i at 397, 133 P.3d at 826; Loher Til, 118
Hawai'i at 533 n.6, 193 P.3d at 449 n.6; Loher
IV, No. 29818, 2011 WL 2132828, at *7-9.

220

“as a strategic manner in planning for [the
defense’s] case, [Loher] was going to be the
last witness [he] call[ed],” and whether Loher
testified or not would “depend{ ] how it went.
with the other witnesses.” In response to
counsel’s objection, the circuit court stated
that it was “the responsibility of counsel” to
secure the presence of his witnesses, that
defense counsel “should be aware ... what
the witnesses that he intends to call will
testify,” and that defense counsel had also
“represented to the [circuit court] that his
client [was] going to testify.” Invoking its
authority to set the order of proof under
HRE Rule 611 (1998), the circuit court de-
nied the request for a continuance over de-
fense counsel’s objection. The court an-
nounced, “So we're going to proceed. You
may call your client to testify, or if you wish,
not to testify ... and he may waive his
testimony.” 74

The circuit court thus indisputably re-
quired Loher to either testify before his oth-
er witnesses or waive his right to testify
entirely, thereby “restrict[ing]” Loher and
his counsel “in deciding whether, and when
in the course of presenting his defense, the
accused should take the stand.” Brooks, 406
US. at 613, 92 S.Ct. 1891; see also Grindles,
70 Haw. at 582-88, 777 P.2d at 1190-91. In
imposing this requirement, the circuit court
unreasonably burdened Loher’s privilege
against self-incrimination in violation of the
Fifth Amendment to the United States Con-
stitution and article I, section 10 of the Ha-
wai'i Constitution, preventing Loher from
making the choice whether and when to testi-
fy free of coercion from the court. See
Brooks, 406 U.S. at 610, 92 S.Ct. 1891 (noting
that under the Tennessee statute, the defen-
dant could not make the choice whether to
testify “in the unfettered exercise of his own
will” (quoting Malloy, 878 U.S. at 8, 84 S.Ct.
1489).

The circuit court’s actions also impaired
Loher’s constitutional right to the assistance
of counsel as provided by the Sixth Amend-
ment to the United States Constitution and
article I, section 14 of the Hawai'i Constitu-
tion. Loher was deprived of an advisement.

21. We observe that at the time the trial court
ordered Loher to testify first or not at all, the ICA
had not yet set forth its decisions in Kido, 102
Hawai'i 369, 76 P.3d 612, and Sale, 110 Hawai'i

by defense counsel on whether to take the
stand that was fully-informed and made fol-
lowing counsel's “evaluatfion] [of] the actual
worth” of the defense’s evidence, see Brooks,
406 U.S, at 612, 92 S.Ct. 1891, and the circuit,
court undermined counsel’s ability to present
the defense of Loher’s choosing.

Additionally, the circuit court’s interfer-
ence with counsel’s ability to mount Loher’s
alibi defense burdened Loher’s right to “be
accorded ‘a meaningful opportunity to pres-
ent a complete defense,” State v. Matafeo,
71 Haw. 188, 185, 787 P.2d 671, 672 (1990)
(quoting California v. Trombetta, 467 U.S.
479, 485, 104 S.Ct. 2528, 81 L.Ed.2d 413
(1984)), and represented a “failure to observe
that fundamental fairness essential to the
very concept of justice,” dies, 70 Haw, at
582, 777 P.2d at 1190 (quoting Lisenba, 314
U.S at 286, 62 S.Ct. 280). Therefore, the
circuit court’s actions also violated Loher’s
right to due process of law under the Four-
teenth Amendment to the United States Con-
stitution and article I, section 5 of the Ha-
wai'i Constitution.

B. Applicability of Structural Error
or Harmless Error Analysis

Because we conclude that Loher’s constitu-
tional rights were violated when the circuit
court required him to testify before his other
witnesses or forfeit his right to testify entire-
ly, we must determine whether the violation
is structural error or subject to harmless
error analysis. See State v. Reed, 185 Hawai'i
881, 386, 886 n.11, 351 P.8d 1147, 1152, 1152
nl (2015) (characterizing structural errors
and stating that such errors are not subject
to harmless error analysis).

i, Federal Constitution

After concluding that the defendant was
deprived of his constitutional rights in
Brooks y, Tennessee, the United States Su-
preme Court did not explicitly address
whether the violation was subject to harm-
less error analysis. 406 U.S. 605, 613, 92
S.Ct. 1891, 32 L.Ed.2d 358 (1972). Rather,

386, 133 P.3d 815, observing the existence of

“exceptions” in other jurisdictions to the rule set
forth in Brooks, 406 U.S, 605, 92 S.Ct, 1891.

the Court concluded that “[t]he State makes
no claim that this was harmless error, and
[the defendant] is entitled to a new trial.” Id.
at 618, 92 S.Ct, 1891 (citation omitted).

Following its decision in Brooks, the Su-
preme Court has on several occasions charac-
terized Brooks as exemplifying a violation of
the Sixth Amendment’s guarantee of the as-
sistance of counsel that requires no showing
of prejudice. See United States v. Cronic, 466
USS. 648, 659 n.25, 104 S.Ct. 2089, 80 L.Ed.2d
657 (1984) (observing that in the context of
the Sixth Amendment right to the effective
assistance of counsel, Brooks, 406 U.S. 605,
92 S.Ct, 1891, is an example where the Su-
preme Court “found constitutional error
without any showing of prejudice when coun-
sel was either totally absent, or prevented
from assisting the accused during a critical
stage of the proceeding”) The Supreme
Court has reasoned that no showing of preju-
dice is required in this situation in part be-
cause the denial of counsel is “so likely to
prejudice the accused that the cost of litigat-
ing [its] effect in a particular case is unjusti-
fied,” Cronic, 466 U.S. at 658, 104 S.Ct. 2089,
and because these circumstances “involve im-

22, See also Strickland v. Washington, 466 U.S.
668, 692, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984)

(explaining that “[a]ctual or constructive denial
of the assistance of counsel altogether is legally
presumed to result in prejudice,” as well as “var-
ious kinds of state interference with counsel's
assistance” and citing the examples identified by
Cronic, 466 U.S. at 659 n.25, 104 S.Ct. 2039
(including Brooks, 406 U.S 605, 92 S.Ct. 1891));
Bell _v. Cone, 535 U.S. 685, 696 n.3, 122 S.Ct.
1843, 152 L.Ed.2d 914 (2002) (relating certain
situations where the Supreme Court “found a
Sixth Amendment error without requiring a
showing of prejudice” because the defendant was
actually or constructively denied counsel and cit-
ing Brooks, 406 U.S. 605, 92 S.Ct. 1891, as an
example); Wright v. Van Patten, 552 U.S. 120,
124, 128 S.Ct. 743, 169 L.Ed.2d 583 (2008) (af
firming that Cronic, 466 U.S. 648, 104 S.Ct.
2039, establishes that no showing of prejudice is
required to find a Sixth Amendment violation
when “counsel is either totally absent, or pre-
vented from assisting the accused during a criti-
cal stage of the proceeding” (alteration omitted)
(quoting Cronic, 466 U.S. at 659 n.25, 104 S.Ct.
2039)).

23, Relying on the presumption of prejudice re-
quired by the Supreme Court's decision in Cron-
ic, several state and federal courts have conclud-
ed that when a criminal defendant has been
denied the right to counsel at a critical stage of

221

pairments of the Sixth Amendment right that.
are easy to identify” and “easy for the gov-
ernment to prevent,” Strickland, 466 U.S. at
692, 104 S.Ct. 2052; see also People v. Mitch-
ell, 454 Mich. 145, 560 N.W.2d 600, 605 (1997)
(characterizing Brooks, 406 U.S. 605, 92 S.Ct.
1891, as an example of “the court or the state
directly interfer[ing] with the attorney-client
relationship by preventing counsel from ren-
dering assistance” and describing the pre-
sumption of prejudice in such cases as a
“prophylactic approach”).3

ii. State Constitution

We recognize that while some federal and
state courts have considered Brooks viola-
tions to constitute structural error, other
courts have applied harmless error analysis,
However, this court has explicitly considered
that the rights provided by the Hawai'i Con-
stitution regarding due process of law, the
privilege against self-incrimination, and the
assistance of counsel—each of which was vio-
lated in this case—may in certain circum-
stances provide greater protections to defen-
dants in the State of Hawai'i? Thus, we
consider whether, given the nature and mag-

the trial or when the ability of counsel to repre-
sent the defendant is subject to certain state
interference, the harmless error rule does not
apply. See, e.g., United States v. Roy, 855 F.3d
1133, 1144, 1149 (ith Cir. 2017) (en banc)
(describing Brooks, 406 U.S. 605, 92 S.Ct. 1891,
as exemplifying a “statutory or court-ordered
interference exception to the prejudice require-
ment”); see also Wayne R. LaFave et al., ©
nal Procedure 1072 (6th ed. 2017) (descr
Brooks, 406 U.S. 605, 92 S.Ct. 1891, as exempli-
fying the prohibition against “unconstitutional
state imposed interference with counsel” which
is “presumed prejudicial and therefore requires
automatic reversal”).

24, See, e.g., State v. Bowe, 77 Hawai‘i 51, 58-60,
881 P.2d 538, 545-47 (1994) (collecting cases in
which this court has “broadened the due process
rights of the accused in criminal proceedings”);
id, at 57-58, 881 P.2d at 544-45 (“‘reject{ing]” the
United States Supreme Court’s “narrow focus”
regarding the concerns underlying the constitu-
tional privilege against self-incrimination and
holding that the protections afforded by article I,
section 10 of the Hawai'i Constitution are
“broader”; State v. Aplaca, 74 Haw. 54, 67 n.2,
837 P.2d 1298, 1305 n.2 (1992) (observing that
“under Hawaii's [clonstitution, defendants are
clearly afforded greater protection of their right
to effective assistance of counsel” than under the
federal constitution),

222

nitude of the independent protections provid-
ed by the Hawaii Constitution, the cireuit
court’s restriction of Loher'’s decision regard-
ing whether and when to testify in his de-
fense constitutes structural error not subject
to harmless error review. See Reed, 185 Ha-
wail at 386, 351 P.3d at 1152.

1. Characteristics of Structural
Errors Under Hawai‘i Law

HM Decisions of our courts show that
two related characteristics of an error may
render it structural and thus not subject to
harmless error analysis. First, “certain rights
protected by the Hawai'i Constitution” are
“so basic to a fair trial that [their] contraven-
tion can never be deemed harmless.” State v.
Holbron, 80 Hawai'i 27, 32 n.12, 904 P.2d 912,
917 n.12 (1995) (alteration in original) (quot-
ing State v. Suka, 79 Hawai'i 293, 299, 901
P.2d 1272, 1278 (App. 1995), overruled on
other grounds by Holbron, 80 Hawai'i 27, 904
P.2d 912); see_also State v. Cramer, 129
Hawai'i 296, 811, 299 P.3d 756, 771 (2018)
(Acoba, J., concurring) (stating that this
court “in determining whether to apply
harmless error review to the violation of a
particular right” should look in part to the
“nature of the right at issue” (quoting Ari-
zona v. Fulminante, 499 U.S, 279, 291, 111
S.Ct, 1246, 118 L.Hd.2d 802 (1991) (White, J.,
dissenting in part))); State _v. Mundon, 121
Hawai'i 389, 382, 219 P.8d 1126, 1169 (2009)
(Acoba, J., concurring in part and dissenting
in part) (observing that “Hawai‘i courts have
recognized that the Hawai'i Constitution pro-
tects certain rights ‘so basic to a fair trial
that [their] contravention can never be
deemed harmless’” (quoting Holbron, 80 Ha-
wai'i at 31 n.12, 904 P.2d at 918 n.12)).

Based on this principle, courts of our juris-
diction have relied on the inherent nature of
the constitutional right at issue and its signif-
icance in affording the defendant a funda-
mentally fair trial to conclude that certain
errors are not subject to harmlessness re-
view. See, e.g., Mundon, 121 Hawai'i at 358,
219 P.3d at 1145 (trial court’s failure to pro-
vide defendant with transcripts from prior
proceedings did not require a showing of
prejudice to merit vacatur and remand for a
new trial in part because there was “innate
value” to a defendant in being able to utilize
transcripts to prepare for trial); State v, Sil-

va, 78 Hawai'i 116, 121, 890 P.2d 702, 708
(App. 1995) (holding that “when the court
assumes the role of a prosecutor, it violates
the fundamental due process requirement
that the tribunal be impartial, and such an
error, by definition, is inherently prejudicial
and not harmless”), abrogated on other
grounds by Tachibana v. State, 79 Hawai'i
226, 900 P.2d 1298 (1995); State v. Chow, 77
Hawai'i 241, 249-51, 883 P.2d 663, 671-73
(App. 1994) (“doubtling]” that the denial of
an opportunity to engage in presentence allo-
eution “can ever be harmless error,” based in
part on the status of allocution as a “signifi-
cant aspect of the fair treatment which
should be accorded a defendant in the sen-
teneing process” and its use as a tool to
maximize the perceived equity of the criminal
process); Reed, 185 Hawai'i at 886, 351 P.8d
at 1152 (stating that violation of the right to
retained counsel of choice constitutes struc-
tural error in part because the right is
“deemed of such importance” and because it
is required to maintain “the integrity of our
system of justice”),

Second, this court has considered that an
error may be properly considered structural
when the impact of the error on conviction is
impossible to reliably assess and when harm-
less error review would require the appellate
court to engage in pure speculation, For
instance, in Cramer, 129 Hawai'i at 808, 299
P.3d at 768, this court suggested that denial
of the right to privately retained counsel of
choice under article I, section 14 of the Ha-
wai Constitution constituted structural er-
yor. We concluded in Cramer that denial of
the defendant’s counsel of choice at a sen-
tencing hearing constituted error and quoted
the Supreme Court’s reasoning that it is
“impossible to know what different choices
the rejected counsel would have made, and
then to quantify the impact of those different
choices on the outcome of the proceedings.”
Id, (quoting United States v. Gonzalez-Lopex,
548 U.S, 140, 160, 126 S.Ct. 2557, 165
L.Ed.2d 409 (2006)). Likewise, we concluded
that requiring the defendant in Cramer “to
argue that he was ‘prejudiced’ ” by the viola-
tion would require this court to “speculate as
to how [the counsel of choice] would have
represented [the defendant] at the sentenc-
ing hearing.” Id. We therefore vacated the

defendant’s judgment and remanded for re-
sentencing without conducting a harmless er-
ror analysis. Id,

‘We again considered the speculative na-
ture of the impact of a right to counsel
violation in State vy. Harter, where we sug-
gested that ineffective assistance of counsel
due to a conflict of interest may require no
showing of prejudice to require vacatur and
remand for a new trial, 184 Hawai'i 308, 327-
28, 840 P.8d 440, 459-60 (2014), Significantly,
we noted that “it would be impractical to
require a defendant to prove ‘adverse effect?
in such a case” because it would be impossi-
ble to know what choices a different lawyer
would make in representing the defendant
and because “appellate inquiry ‘into a claim
of harmless error’ may require ‘unguided
speculation.’” Id. (first quoting Cramer, 129
Hawaiii at 308, 299 P.3d at 768; then quoting
Holloway v, Arkansas, 485 U.S. 475, 491, 98
S.Ct, 1178, 55 L.Hd.2d 426 (1978) (improper
denial of motion to withdraw based on con-
flict of interest constituted error not subject
to harmlessness analysis). In support of this
proposition, we also quoted the Supreme
Court’s observations that “it would be diffi-
cult to judge intelligently the impact of a
conflict on the attorney’s representation of a
client” and that “to assess the impact of a
conflict of interest on the attorney’s options,
tactics, and decisions in plea negotiations
would be virtually impossible.” * Id, at 828
n,24, 840 P.8d at 460 n.24; see also State v.
Phua, 185 Hawai‘i 504, 517, 858 P.3d 1046,
1059 (2015) (vacating and remanding without
engaging in harmless error analysis where
no valid waiver of counsel was made by the
defendant at sentencing, thereby depriving
him of the constitutional right to counsel at a
critical stage of the proceedings); State _v.
Pitts, 181 Hawai'i 587, 819 P.8d 456 (2014)
(vacating and remanding without engaging in
harmless error analysis for deprivation of the
constitutional right to counsel during “critical
stage[s]” of post-verdict motion proceeding
and sentencing).

25, The Harter court ultimately concluded that it
need not determine whether a finding of preju-
dice was required because the defendant did not
voluntarily consent to the attorney-client rela-

223

2. Restricting a Defendant in Deciding
Whether and When to Testify Amounts
to Structural Error Under Hawai‘i Law

HH In this court’s adoption of Brooks,
we did not analyze whether the error was
harmless when we vacated the defendant’s
conviction and remanded for a new trial.
State v. Grindles, 70 Haw. 528, 531-38, 777
P.2d 1187, 1190-91 (1989). Rather, the Grin-
dies court vacated the conviction and
manded to the trial court without considering
the effect of the constitutional violation on
the underlying conviction. Id. Despite this
court’s ruling in Grindles, the ICA in State v.
Kido held that a constitutional violation stem-
ming from a trial court’s requirement that
the defendant testify before other defense
witnesses is subject to harmless error re-
view. 102 Hawai'i 369, 378, 76 P.3d 612, 621
(App. 2003). Underlying the ICA’s ruling
were its conclusions that the Brooks court
“¢mplied[ ]” that such review was applicable
and that the violation was not “of the kind
and magnitude” that this court had intimated
could never be deemed harmless. Id. (citing
Holbron, 80 Hawai'i at 82 n.12, 904 P.2d at
917 n.12),

However, the ICA in Kido analyzed nei-
ther the nature nor the “magnitude” of the
vital constitutional rights that were unrea-
sonably burdened. A court’s interference
with a defendant's decision whether and
when to testify results in the violation of the
defendant’s constitutional privilege against
self-incrimination, right to the effective assis-
tance of counsel, and right to due process of
Jaw. The fundamental nature of these three
constitutional protections establishes that Lo-
her was deprived of rights “basic to a fair
trial.” Holbron, 80 Hawaii at 82 n.12, 904
P.2d at 917 n.12 (quoting Suka, 79 Hawai‘ at
299, 901 P.2d at 1278),

First, equally vital to our system of justice
are “both the right to testify and the right
not to testify.” State v. Monteil, 184 Hawaii
361, 369, 841 P.8d 567, 575 (2014) (observing
that “Hawaii has historically protected”
both rights). Whether to take the stand is a

tionship as required under our conflict of interest
standard, which, standing alone, was sufficient to
require vacatur. 134 Hawai'i at 328, 340 P.3d at
460.

224

critical question that may pose substantial
dangers to the defense’s case, particularly
because it subjects the defendant to cross-
examination by the State. Grindles, 70 Haw.
at 582, 777 P.2d at 1190 (quoting Brooks,
406 U.S. at 608, 92 S.Ct. 1891); see also
Brooks, 406 U.S. at 609, 92 S.Ct. 1891 (“none
would deny that the choice itself may pose
serious dangers to the success of an ac-
eused’s defense”). As observed by the Su-
preme Court in Brooks, a defendant’s choice
to take the stand “carries with it serious
risks of impeachment and cross-examina-
tion” and may also “open the door to other-
wise inadmissible evidence which is damag-
ing to his case.” 406 U.S. at 609, 92 S.Ct.
1891 (quoting McGautha y. California, 402
US. 188, 218, 91 S.Ct. 1454, 28 L.Hd.2d 711
(1971). For this reason, our jurisdiction has
adopted significant safeguards to ensure that
a defendant’s constitutionally-protected deci-
sion to testify or not testify is made know-
ingly, intelligently, and free of state coer-
cion. See, e.g., Tachibana, 79 Hawai'i at 236,
900 P.2d at 1803; Monteil, 134 Hawaii at
871, 841 P.8d at 577.

It is also “well-settled that ‘the
right of one charged with a crime to counsel
is deemed fundamental and essential to a fair
trial’” Mundon, 121 Hawai'i at 366, 219 P.3d
at 1158 (alterations omitted) (quoting Gideon
y. Wainwright, 872 U.S. 385, 344, 88 S.Ct.
792, 9 L.Ed.2d 799 (1963)). A defendant may
“lack[ ] both the skill and knowledge to ade-
quately prepare” and present his or her de-
fense, and for this reason, it is crucial that
the defendant is provided with the “guiding
hand of counsel at every step in the proceed-
ings against him.” Id. (quoting Geders v.
United States, 425 U.S. 80, 89, 96 S.Ct. 1330,
47 L,Ed.2d 592 (1976). In this regard, de-
fense counsel’s advisement regarding the tac-
tical advantages and disadvantages of taking
the stand is crucially important to a defen-
dant who must make the decision whether to
waive the privilege against self-incrimination
and testify in his or her defense. Tachibana,
79 Hawai'i at 232, 900 P.2d at 1299. By
restricting the ability of the defendant to
freely make this significant decision with the
informed advice of counsel, the court “ex-
ceeds its judicial power and authority” by
interfering with counsel’s ability to provide
representation and “invad[ing] the province

of the attorney-client relationship.” Silva, 78
Hawai'i at 125, 890 P.2d at 712.

Finally, it is of paramount impor-
tance that defendants in our jurisdiction are
“accorded ‘a meaningful opportunity to pres-
ent a complete defense’” in order to satisfy
the guarantees that due process affords.
State v. Matafeo, 71 Haw. 188, 185, 787 P.2d
671, 672 (1990) (quoting California y. Trom-
betta, 467 U.S. 479, 485, 104 S.Ct. 2528, 81
L.Ed.2d 418 (1984)), “A primary reason that
a defendant is guaranteed effective assis-
tance of counsel is to ensure that the defen-
dant is not denied due process,” State_v.
Tetu, 189 Hawai'i 207, 219, 386 P.3d 844, 856
(2016), because counsel helps ensure that the
defendant is able to present the defense of
his or her choosing and receives a fundamen-
tally fair trial. Requiring defense counsel to
present the testimony of the defendant first,
rather than following the presentation of the
remainder of the case, undermines the ability
of counsel to plan and present the defense’s
case. Where no other defense witnesses have
testified, counsel may be bound to frame
questioning differently or elicit a broader
swathe of testimony, thereby increasing the
“serious risks of impeachment and cross-ex-
amination.” Brooks, 406 U.S. at 609, 92 S.Ct,
1891. A trial court’s interference with the
defendant’s ability to make an informed, un-
restricted decision whether to waive a critical
constitutional privilege undermines “that fun-
damental fairness essential to the very con-
cept of justice.” Grindles, 70 Haw. at 582, 777
P.2d at 1190 (quoting Lisenba v. California,
814 USS. 219, 286, 62 S.Ct. 280, 86 L.Ed. 166
(1941)).

Our caselaw is thus clear that each of the
three constitutional rights that were violated
by the circuit court is fundamentally impor-
tant in guaranteeing to the accused a fair
trial. And, because of their complementary
protections, these provisions may overlap to
strengthen the constitutional rights afforded
to criminal defendants in the adversarial pro-
cess,

Additionally, an application of harmless er-
ror review in this case would require appel-
late courts to engage in unguided speculation
regarding the impact of the three constitu-
tional violations on the subsequent convic-
tion, See Cramer, 129 Hawaii at 308, 299
P.8d at 763, By nature of the court’s error in

restricting the defendant’s decision whether
and when to take the stand, the defendant is
compelled to either invoke the constitutional
right to remain silent or to waive the privi-
lege against self-incrimination and testify in
his or her own defense. An assessment of the
error’s impact on conviction presents several
significant difficulties that would ultimately
render it impossible to reliably determine
whether there was a reasonable possibility
that the error might have contributed to the
defendant's conviction, See Holbron, 80 Ha-
wai'ii at 82, 904 P.2d at 917 (setting forth
harmless error review standard),

First, the harmlessness inquiry would re-
quire the court to speculate as to what
choice the defendant may have made as to
testifying if he or she were afforded the op-
portunity to not choose until after presenta-
tion of the defense’s case. Second, it would
require the court to speculate as to what
guidance defense counsel would have given
after counsel’s presentation of the defense
and assessment of the actual strengths and
weaknesses of the case, as well as whether
the defendant would in fact have heeded
counsel's advice.” Third, in cases where the
defendant invoked the privilege to remain
silent but may have testified absent the
court’s erroneous directive, the appellate
court would be required to surmise the en-

26. Even when the remaining defense witnesses
are subsequently unable to give testimony, the
impact of the trial court's error is similarly spec-
ulative. Defense counsel’s advice on whether to
take the stand is often influenced by what coun-
sel anticipates the defense witnesses may testify
to and the relative strengths, weaknesses, and
comprehensiveness of their testimony. In this
situation, the appellate court would be required
to speculate whether and how, had defense coun-
sel known that the witnesses would be unable to
testify, the advice would have differed. The cir-
cumstances of State v. Sale, 110 Hawai'i 386,
133 P.3d 815 (App. 2006), present an instructive
example. In that case, the defendant was re-
quired by the court to decide whether he would
testify prior to resolving the availability of his
only other witness. Id. at 390-92, 133 P.3d at
819-21. The defendant elected to take the stand,
and it was subsequently determined that his wit-
ness would be unable to testify because he would
invoke his own privilege against self-incrimina-
tion that related to the charge against the defen-
dant. Id, Assessing the impact of error on convic-
tion would have required an appellate court to
speculate as to what advice the defendant's coun-
sel would have given had counsel known that the

225

tirety of the defendant’s testimony to assess
how the conviction may have been impacted.
Similarly, if the defendant took the stand
following the court’s error, it would be im-
possible to determine how the content of the
testimony, including cross-examination and
impeachment, would have differed had the
defendant been permitted to testify following
presentation of the remainder of the de-
fense’s case. Consequently, given the multi-
tude of factors that influence the defendant’s
personal decision to testify, defense counsel’s
professional advisement regarding the choice
to testify, and counsel’s presentment of the
defense’s case, it would be “virtually impossi-
ble” to assess the impact of the violation.2”
Harter, 134 Hawai'i at 328 n.24, 340 P.3d at
460 n.24 (quoting Holloway, 485 U.S. at 490,
98 S.Ct. 1178).

The circuit court’s procedures in this case
represented direct state interference with
the exercise of three core, fundamental
vights. The nature of these three constitu-
tional rights, their importance in this juris-
diction in guaranteeing to the accused a fair
trial, and the speculation that would be re-
quired were an appellate court to gauge the
impact of their violation on conviction under
harmless error review manifest that the er-
ror in this case can “never be deemed harm-
less” under the Hawai‘i Constitution. Hol-

‘witness would be deemed unavailable and unable
to give testimony in the defendant's case.

27. The ICA’s analysis in Kido, 102 Hawai'i at
379, 76 P.3d at 622, is instructive. In Kido,
harmless error analysis required the ICA to spec-
ulate whether the defendant would have testified
absent the court's error; the ICA guessed that
had the court permitted the defendant to testify
after his other witness, “perhaps [the defendant]
would then have been well advised to leave well
enough alone.” 102 Hawai'i at 379, 76 P.3d at
622.

28. We further observe that classification of the
error at issue here as structural protects against
a particular violation of three fundamental con-
stitutional rights that is “easy to identify” and
“easy for the government to prevent.” Strick-
land, 466 U.S, at 692, 104 S.Ct. 2052 (reasoning
that prejudice is presumed in actual or construc-
tive denials of counsel and “various kinds of state
interference with counsel's assistance” in part
because such violations are “easy for the govern-
ment to prevent”); see also People v. Mitchell,
454 Mich. 145, 560 N.W.2d 600, 605 (1997)
(describing this presumption of prejudice as a
“prophylactic approach”).

226

bron, 80 Hawai'i at 32 n.12, 904 P.2d at 917
n12 (quoting Suka, 79 Hawai'i at 299, 901
P.2d at 1278).2° Thus, consistent with our
prior decision in Grindles, 70 Haw. at 534,
777 P.2d at 1192, the error in this case—
which consisted of a violation of three funda-
mental constitutional rights—is structural
and therefore requires vacatur of the defen-
dant’s conviction and remand of the case for
a new trial.5°

IV. CONCLUSION

The circuit court erred when it restricted
Loher in deciding whether and when in the
course of presenting his defense he should
take the stand, thereby violating his constitu-
tional privilege against self-incrimination, his
constitutional right to the assistance of coun-
sel, and his right to due process of law.
Under the Hawai'i Constitution, harmless er-
ror analysis does not apply to the circuit
court's error, Based on the foregoing, the
circuit court's July 18, 2001 Judgment is
vacated, and the case is remanded for a new
trial.

29. Therefore, to the extent that the ICA in prior
decisions has applied harmless error analysis to
violations of the principles set forth in Grindles,
70 Haw. 528, 777 P.2d 1187, these decisions are
overruled, See Kido, 102 Hawai'i at 378-79, 76
P.3d at 621-22; State v. Sale, 110 Hawai'i 386,
397-98, 133 P.3d 815, 826-27 (App. 2006); Loher
II, 118 Hawai'i at 533 n.6, 193 P.3d at 449 n.6;
Loher IV, 2011 WL 2132828, at *7-9.

398 P.3d 815
Deborah J. WALTRIP,
Petitioner/Claimant-
Appellant,
ve
TS ENTERPRISES, INC., dba Kimo’s Res-
taurant, and Fireman’s Fund Insurance
Company, Respondent/Employer/Insur-
ance Carrier-Appellee,
and
Special Compensation Fund,
Respondent/Appellee.
No, SCWC-11-0000722.
Supreme Court of Hawai'i,

March 1, 2016,

30. Because we conclude that the error in this
case is structural and therefore not subject to
harmless error review, we do not address the
State’s contention that the error was harmless
beyond a reasonable doubt.

Deborah J. Waltrip, petitioner pro se.

Robyn M. Kuwabe, Honolulu, for respon-
dent, Special Compensation Fund.

Robert E. McKee, Jr., Honolulu, for re-
spondents, TS Enterprises, Inc., dba Kimo’s
Restaurant, and Fireman’s Fund Insurance
Company.

McKENNA, POLLACK, and WILSON,
JJ., with RECKTENWALD, C.J., concurring
in the result, with whom NAKAYAMA, J.,
joins.

Opinion of the Court by MCKENNA, J.
L Introduction

This case arises from an accident suffered
by Petitioner/Claimant-Appellant, Deborah
J. Waltrip (“Waltrip”), while she worked for
TS Enterprises, Inc., dba Kimo’s Restaurant
(“Restaurant”), on Maui.! The Special Com-
pensation Fund (“Fund”) established under
Hawai'i Revised Statutes (“HRS”) § 886-151
(1998), is also an interested party? We ac-
cepted certiorari to address certain proce-
dural issues implicated by Waltrip’s pro se
appeal.

In brief, Waltrip was not given an award
by the Director of the Department of Labor
and Industrial Relations (“DLIR”) for cer-
tain aspects of her claimed injuries, and she
appealed to the Labor and Industrial Rela-
tions Appeals Board (“LIRAB”), Following
a hearing, LIRAB issued its Decision and
Order (“July 2011 Decision”), Unsatisfied
with LIRAB’s decision, Waltrip, pro se, filed
two separate motions, each of which was
denied. The first motion was titled, “Re-
quest to Reconsider” (“August Request”).
The second motion was titled, “Request That.
the July 25th, 2011 Decision and Order Be
Vacated and That the Labor and Industrial
Relations Appeals Board Issue a New Notice
of Initial Conference and Restart the Pro-
ceedings All Over Again Including New Dis-
covery Deadlines and a Retrial of the Issues”
(“September Request”). Waltrip appealed to
the Intermediate Court of Appeals (“ICA”),

Fund then filed a motion to dismiss Wal-
trip’s appeal for lack of jurisdiction, arguing
that her notice of appeal was untimely filed.
The ICA issued an “Order Granting in Part
and Denying in Part Appellee Special Com-
pensation Fund’s May 3, 2012 Motion to Dis-
miss Appeal for Lack of Jurisdiction” (“Par-
tial Dismissal Order”) stating that Waltrip’s
notice of appeal was untimely as to LIRAB’s
July 2011 Decision, and was also untimely as
to LIRAB’s order denying the August Re-
quest. See Waltrip v. TS Enters. No,

1, The term “Employer” is used to collectively
refer to Restaurant and its workers’ compensa-
tion carrier, Fireman's Fund Insurance Compa-
ny.

2. See HRS § 386-151(a) (1993) (““There is hereby
created a fund to be known as the special com-
pensation fund which shall consist of payments

229

CAAP-11-0000722, at 8, 2012 WL 1959579
(App. May 81, 2012) (order). As to Waltrip’s
appeal of LIRAB’s order denying her Sep-
tember Request, the ICA coneluded that “it
appears that we might have appellate juris-
diction over [it]” Jd, Accordingly, the ICA
permitted the parties to proceed with brief-
ing. Ultimately, the ICA found LIRAB
lacked subject matter jurisdiction over Wal-
trip’s September Request when it construed
that request as a second motion for reconsid-
eration over which the Board lacked statuto-
ry or regulatory authority to rule. See Wal-
trip v. TS Enters, No. CAAP-11-0000722, at
2, 2014 WL 4283722 (App. Aug. 28, 2014)
(SDO).

The following timeline provides a sequence
of major events relevant to the procedural
posture presented by this case:

9/18/2001—Waltrip is injured at work

9/04/2002—Waltrip files a workers’ com-
pensation claim

1/04/2007—Director of DLIR issues a deci-
sion that awards Waltrip medical care, ser-
vices, and supplies; temporary total dis-
ability benefits; partial disability benefits
for her lumbar spine, psychological condi-
tion, and left leg; and $250 for disfigure-
ment

1/23/2007—Waltrip and Employer both
timely appeal to LIRAB regarding the Di-
rector’s January 4, 2007 decision
12/28/2007—LIRAB temporarily remands
the case to the Director for additional find-
ings regarding the Employer’s refusal to
compensate for a referral and treatment
plan

11/14/2008—Director issues a supplemental
decision determining that the referral and
treatment plan were unnecessary
12/2/2008—Waltrip timely appeals the Di-
rector’s November 14, 2008 supplemental
decision to LIRAB

made to it as provided by law....”); HRS
§ 386-56 (1993) (“Where an injured employee or
the employee's dependents fail to receive prompt
and proper compensation and this default is
caused through no fault of the employee, the
director shall pay the full amount of all compen-
sation awards and benefits from the special com-
pensation fund to the employee or dependent.”).

230 |

10/12/2009, 7/19~7/21/2010—LIRAB holds
hearings
7/25/2011—LIRAB issues its Decision and
Order (“July 2011 Decision”)
8/23/2011—Walltrip files a “Request to Re-
consider” (“August Request”)
8/29/2011—LIRAB issues an “Order Deny-
ing Claimant’s Request to Reconsider”
(“Order Denying August Request”)
9/28/2011—Waltrip files a “Request That
the July 25th, 2011 Decision and Order Be
Vacated and That [LIRAB] Issue a New
Notice of Initial Conference and Restart
the Proceedings All Over Again Including
New Discovery Deadlines and a Retrial of
the Issues” (“September Request”)
9/28/2011—LIRAB issues an “Order Deny-
ing Claimant’s Motion to Vacate Decision
of July 25, 2011” (“Order Denying Septem-
ber Request”)

9/29/2011—Waltrip files a notice of appeal

from the July 2011 Decision and Order

Denying August Request

10/28/2011—Waltrip amends her notice of

appeal and lists the July 2011 Decision and

Order Denying September Request as the

subjects of her appeal

5/3/2012—Fund files a “Motion to Dismiss

the Appeal for Lack of Appellate Jurisdic-

tion” (“Motion to Dismiss”)
5/31/2012—ICA issues “Order Granting in

Part and Denying in Part Appellee Special

Compensation Fund’s May 8, 2012 Motion

to Dismiss Appeal for Lack of Jurisdiction”

(“Partial Dismissal Order”)

8/28/2014—ICA issues a Summary Disposi-

tion Order (““SDO”) vacating the Order

Denying September Request and remand-

ing the case to LIRAB for the entry of an

order dismissing the September Request
for lack of jurisdiction

10/2/2014—ICA issues its Judgment on

Appeal

10/31/2014—Waltrip files an Application

for Writ of Certiorari (“Application”)

HH Upon accepting certiorari, this
court ordered supplemental briefing to ad-
dress the following issues:

1. Whether this court has jurisdiction un-

der Hawai'i Revised Statutes (HRS)

3. The Judgment on Appeal was entered pursuant
to the SDO; the SDO refers to the Partial Dis-

§ 602-59(c) (Supp. 2018) to review the In-
termediate Court of Appeals’ May 31, 2012
“Order Granting in Part and Denying in
Part Appellee Special Compensation
Fund’s May 38, 2012 Motion to Dismiss
Appeal for Lack of Jurisdiction;”

2. Whether the ICA gravely erred in the
May 81, 2012 order by granting in part and
denying in part, rather than wholly deny-
ing, the Special Compensation Fund’s May
8, 2012 Motion to Dismiss and addressing
any partial dismissal in its eventual sum-
mary disposition order; and

8, Whether the ICA gravely erred in the
May 381, 2012 order by granting in perti-
nent part the Special Compensation Fund’s
May 8, 2012 Motion to Dismiss with re-
spect to ... Waltrip’s appeal from ...
[LIRAB’s] August 29, 2011 “Order Deny-
ing Claimant’s Request to Reconsider.”
We hold as follows:

(1) because: (a) under Hawaii Rules of
Appellate Procedure (““HRAP”) Rule 35(a),
an order partially dismissing an appeal is
not a “dispositional order”; (b) pursuant to
HRS § 602-59(c) (Supp,2011), “[a]n appli-
eation for a writ of certiorari may be filed
with the supreme court no later than thirty
days after the filing of the judgment or
dismissal order of the intermediate appel-
late court,” and (¢) Waltrip timely filed her
application for certiorari from the ICA’s
Judgment on Appeal, this court has juris-
diction to review both the ICA’s Partial
Dismissal Order and SDO which underpin
the Judgment on Appeal;* (2) the ICA did
not err in issuing its Partial Dismissal
Order, rather than wholly denying Fund’s
Motion to Dismiss and later addressing
any partial dismissal in its eventual SDO,
as it has the power under HRS § 602-
57(8) (Supp,2010), “[t]o make or issue any
order ... necessary or appropriate in the
aid of its jurisdiction ...,” and also be-
cause it referred to its partial dismissal in
its subsequent SDO; (8) in reviewing the
Partial Dismissal Order, the ICA did not
err in dismissing Waltrip’s appeal of LIR-
AB’s (a) July 2011 Decision and (b) Order

missal Order.

Denying August Request, for untimeliness;
and (4) pursuant to the fundamental tenets
that “[plleadings prepared by pro se liti-
gants should be interpreted liberally,” Du-
pree v. Hiraga, 121 Hawai'i 297, 314, 219
P.8d 1084, 1101 (2009) (citation omitted),
and that “pleadings [and letters] in admin-
istrative proceedings are to be construed
liberally rather than technically,” id, (cit-
ing Perry v. Planning Comm'n, 62 Haw.
666, 685-86, 619 P,2d 95, 108 (1980); Doe
v, Attorney General, 185 Hawai'i 890, 399,
851 P.8d 1156, 1165 (2015) (discussing id.),
the ICA erred in holding in its SDO that
LIRAB had no authority to rule on the
merits of Waltrip's September Request be-
cause it was essentially an unauthorized
second motion for reconsideration under
HRS § 886-87(d) (1998), on the same
grounds as the August Request, rather
than viewing it as a motion to reopen
under HRS § 886-89(c) (1998), when Wal-
trip’s September Request was filed more
than a year after LIRAB’s hearing and she
had attached post-hearing letters from her
treating psychiatrist discussing both her
physical and mental condition, which could
be construed to constitute “substantial evi-
dence ... of a change in ... a determina-
tion of fact related to [her] physical condi-
tion” pursuant to HRS § 386-89. Such a
motion, however, should have been submit-
ted to the Director of DLIR instead of
LIRAB,

Accordingly, we affirm the ICA’s Judg-
ment on Appeal. The ICA’s Judgment as to
the July 2011 Decision and August Request
is affirmed. The ICA’s Judgment as to the

4. Inthe absence of an appeal and within thirty
days after mailing of a certified copy of the
appellate board's decision or order, the appel-
late board may, upon the application of the
director or any other party, or upon its own
motion, reopen the matter and thereupon may
take further evidence or may modify its find-
ings, conclusions or decisions, The time to
initiate judicial review shall run from the date
of mailing of the further decision if the matter
has been reopened. If the application for re-
opening is denied, the time to initiate judicial
review shall run from the date of mailing of the
denial decision,

HRS § 386-87(d).

5. On the application of any party in interest,
supported by a showing of substantial evi-
dence, on the ground of a change in or of a
mistake in a determination of fact related to

231

September Request is affirmed on other
grounds.

Il. Background

A. Work Injury to LIRAB Proceedings

Waltrip sustained a work accident on Sep-
tember 18, 2001 while working for Restau-
rant. On September 4, 2002, she filed a
daim for workers’ compensation benefits
with DLIR, Waltrip described her work inju-
ry as pain in the left knee, reflex sympathetic
dystrophy (“RSD”), neuropathy, atrophy, and
depression. Waltrip was represented by
counsel during the proceedings before DLIR
until April 2006, Subsequently, she proceed-
ed pro se. The Director of DLIR issued
numerous interim decisions on Waltrip’s
claim including a January 4, 2007 decision
awarding Waltrip medical care, services, and
supplies; temporary total disability benefits;
permanent partial disability benefits for her
lumbar spine, psychological condition, and
left leg; and $250 for disfigurement.

Both Waltrip and Employer appealed to
LIRAB. Waltrip appealed in part because
the Director did not award her benefits for
RSD. Employer appealed in part because it
disagreed with the permanent partial disabil-
ity benefits awarded to Waltrip.

LIRAB scheduled a hearing to commence
on October 12, 2009. In a letter dated Sep-
tember 28, 2008, Waltrip’s then treating phy-
sician, Dr, Paul Kaiwi, Jv, (“Dr. Kaiwi”),
recommended that during the hearing, Wal-
trip should (1) have her legs elevated, (2)

the physical condition of the injured employee,
the director may, at any time prior to eight
years after date of the last payment of compen-
sation, whether or not a decision awarding
compensation has been issued, or at any time
prior to eight years after the rejection of a
claim, review a compensation case and issue a
decision which may award, terminate, contin-
ue, reinstate, increase, or decrease compensa-
tion, No compensation case may be reviewed
oftener than once in six months and no case in
which a claim has been rejected shall be re-
viewed more than once if on such review the
claim is again rejected,,.. This subsection
shall not apply when the employer's liability
for compensation has been discharged in
whole by the payment of a lump sum in accor-
dance with section 386-54,
HRS § 386-8%c).

232

avoid contact with direct wind, air condition-
ing vents, or fans, and, (8) because of her
sedating medications, be limited to one and
one-half hours per day. Shortly after the
hearing commenced on October 12, 2009,
LIRAB became concerned that Waltrip
would not be able to defend herself, speak on
her own behalf, or cross-examine Employer’s
expert witness, based on the way she was
speaking. LIRAB therefore continued the
hearing.

On July 19, 2010, LIRAB resumed pro-
ceedings on O‘ahu. After noting that Waltrip
appeared to be falling asleep, LIRAB contin-
ued the hearing to the following afternoon.

At the start of the proceedings on July 20,
2010, LIRAB informed the parties that (1)
after the close of the prior day’s proceedings,
Waltrip was taken to the hospital and (2)
LIRAB had spoken with Dr. Kaiwi by con-
ference call that morning, in Waltrip’s pres-
ence and with her consent. According to
LIRAB, after it informed Dr. Kaiwi that
“Waltrip had fallen asleep at estimated inter-
vals [of] once every minute or so,” Dr, Kaiwi
reported that except for one visit when Wal-
trip was a little drowsy, she had “acted ap-
propriately” each time he had seen her.
Thus, he believed her falling asleep at the
hearing might be evidence of “ulterior mo-
tives” or “malingering” behavior. He ad-
vised LIRAB that he would no longer be her
physician. There was no indication, however,
that Dr. Kaiwi had examined Waltrip on July
19, 2010, or inquired as to Waltrip’s symp-
toms other than that observed by LIRAB.

Dr. Kaiwi also informed LIRAB during
that phone conversation that Waltrip’s medi-
cation included methadone at six-hour inter-
vals and morphine at eight-hour intervals as
needed for pain, and that he thought the
methodone and morphine Waltrip had re-
ported taking at 6:00 and 12:00 the day be-
fore had been appropriate. Dr. Kaiwi also
informed LIRAB that Waltrip was to take
Soma and Neurontin every twelve hours,
twice daily.

In response to follow up questions posed
on the record by LIRAB to confirm the
accuracy of LIRAB’s representations regard-
ing the phone call with Dr. Kaiwi, Waltrip
reported she had not gotten sleep the night
before, that she did not know how she could

fake falling asleep, that she had not taken
morphine that day because she felt she did
not need it, and that she took less pain
medication than prescribed because she only
took it three times daily as compared to the
four times daily prescription, LIRAB pro-
ceeded with the hearing with Waltrip pres-
ent, and concluded the hearing on July 21,
2010,

LIRAB issued its July 2011 Decision about
one year after the hearings were held. LIR-
AB specifically found, among other things,
“[b]ased upon the Board’s observation of
[Waltrip] and the evidence in the record, the
Board doubts the accuracy of and motivation
for [Waltrip]s testimony. The Board does
not find [Waltrip] to be a credible witness.”
LIRAB concluded that (1) Waltrip did not
suffer from Complex Regional Pain Syn-
drome (“CRPS”) or RSD; (2) Employer was
liable for workers’ compensation benefits rel-
ative to Waltrip’s knee injury and psychologi-
eal condition; (8) Waltrip did not provide
eredible evidence that she remained tempo-
rarily and totally disabled during the disput-
ed period; (4) Waltrip did not suffer perma-
nent partial disability to her leg or psyche as
a result of the work injury, thus rendering
apportionment moot; (5) Employer was not
liable to reimburse Waltrip for disputed ex-
penses; (6) Waltrip’s medical care was not
terminated by LIRAB’s decision; and (7)
Employer was not liable for a referral and a
treatment plan. Thus, the July 2011 Deci-
sion affirmed the Director’s decision denying
Waltrip benefits for RSD and further re-
duced the benefits that the Director had
granted Waltrip by terminating all tempo-
rary total disability benefits and all perma-
nent partial disability benefits.

Waltrip stated in her August Request:

[This letter is a request to reconsider by

the board the July 25th 2011 decision and

order by the Appeals Board in the above

case. The reason for the request is that I

was unable to adequately represent myself

at the proceedings due to my physical and
psychological disability, nor was I able to
adequately file necessary medical records
in a timely fashion, arrange for expert
witnesses or question opposing counsels
[sic] witness effectively. I need legal rep-

resentation and I am not competant [sic] to

represent myself,

LIRAB denied the August Request with-
out explanatory remarks,

On September 28, 2011, Waltrip then filed
a document entitled “Request That the July
25th, 2011 Decision and Order Be Vacated
and That [LIRAB] Issue a New Notice of
Initial Conference and Restart the Proceed-
ings All Over Again Including New Discov-
ery Deadlines and a Retrial of the Issues”
(September Request”). In it, Waltrip stat-
ed:

This request is a [sic] based on the fact

that I was medically not capable of repre-

senting myself at trial as evidenced by the
following[:]

—pre-trial proceedings were postponed in

2008 as I was inpatient in the psychiatric

unit at Maui Memorial Medical Centre

[sicl{;]

—during the pre-trial conference I told the

Appeals Board that I didn’t understand

the process[;]

—At the initial Trial in 2009 the Appeals

Board postponed the Trial ruling that I

was unable to participate and sent me

home[;]

—The Appeals Board ordered me to take

medications as prescribed by Dr. Paul

Ka‘iwi. The medical records show that Dr.

Ka‘iwi had tripled the narcotic/sedating

medications in the months before Trial in

[an] attempt to control the chronic pain.

Hence I was unable to maintain conscious-

ness at Trial[;]

—Again on the first day of the next Trial

@uly 19th, 2010) the Board ruled that I

could not participate and called an ambu-

lance[;]

—After spending hours under observation

at Queens Medical Centre [sic] on July

19th, 2010, the Board commenced the Trial
on July 20th, 2010 regardless of my ability
to participate effectively[;]

—tThe additional proof that Mr[.] McKee

requested in his Angust 25, 2011 letter is

provided by Drl.] Grace Marian, included
with this letter.

Waltrip’s September Request included two
recent letters from her psychiatrist, Dr.
Grace Marian, which indicated that Waltrip
had been her patient since December 2, 2010.

233

An August 28, 2011 letter stated that because
of her depression, “Complex Pain Syn-
drome,” numerous medications, and “unsta-
ble” psychiatric status, “it is definitely not
possible” for Waltrip to work thirty hours
per week and that Waltrip “should remain on
full disability for at least a year....” Dr.
Marian’s September 20, 2011 letter stated
that Waltrip’s depressive disorder, insomnia,
lethargy, “Complex Pain Syndrome,” and the
medications she was taking for treatment
rendered her “not ... capable of represent-
ing herself in court.”

On September 28, 2011, LIRAB issued an
order that construed Waltrip’s September
Request as a motion to vacate, and denied it.

B. ICA Proceedings

Waltrip filed a notice of appeal with the
ICA on September 29, 2011, stating she was
appealing from (1) the July 2011 Decision
and (2) the Order Denying August Request.
On October 28, 2011, she then submitted
another notice of appeal (which was docketed
as an amended notice of appeal), this time
stating that she was appealing from the (1)
July 2011 Decision and (2) the Order Deny-
ing September Request.

Employer and Fund filed jurisdictional
statements contesting the ICA’s jurisdiction
on December 12, 2011. The next day, Fund
amended its statement, but nevertheless con-
tested the ICA’s jurisdiction. After the ICA
had granted Waltrip two extensions, Waltrip
timely filed a jurisdictional statement on
February 21, 2012. In it, Waltrip clarified
that her appeal was of the July 2011 Deci-
sion, Order Denying August Request, and
Order Denying September Request. She
further explained that Dr. Marian’s Septem-
ber 20, 2011 letter, which was included with
her September Request, served as “credible
proof” that she was not capable of represent-
ing herself, Waltrip also pointed out that
LIRAB’s July 2011 Decision “should havel,
but did not] contain{ J,” language notifying
her of the time frame in which an appeal may
be filed. Further, she asserted that when
she called LIRAB on September 28, 2011,
she was twice verbally advised that her ap-
peal to the ICA was due on September 29,
2011.

On May 8, 2012, Fund filed a Motion to
Dismiss Waltrip’s appeals from all three or-

234 Es

ders (July 2011 Decision, Order Denying
Claimant’s August Request, and Order Deny-
ing September Request) for lack of appellate
jurisdiction, Fund argued that the ICA
lacked jurisdiction over Waltrip’s appeal of
the July 2011 Decision and the Order Deny-
ing August Request because Waltrip’s appeal
was one day late under HRS § 886-87(d)
(1998) and HRS § 386-88 (Supp.2010), as she
filed her notice of appeal on September 29,
2011, when the filing deadline was September
28,2011, With respect to the Order Denying
September Request, Fund argued that the
ICA lacked subject matter jurisdiction over
Waltrip’s appeal because: (1) there is “no
legal authority for a second motion for recon-
sideration” before LIRAB; and (2) even if
LIRAB had authority over a second motion
for reconsideration, Waltrip’s motion was un-
timely under HRS § 886-87 and Hawai'i Ad-
ministrative Rules (“HAR”) § 12-47-58 ° be-
cause it was filed sixty days after the July
2011 Decision was entered.

On May 81, 2012, the ICA granted Fund’s
motion to dismiss with respect to the July
2011 Decision and the Order Denying August
Request, but denied the motion with respect
to the Order Denying September Request.
The ICA, noting that it “might have appel-
late jurisdiction” over the Order Denying
September Request, directed the parties to
proceed with briefing as to this order.

After considering the parties’ briefs, the
ICA held in its SDO that LIRAB had no
authority to rule on the merits of Waltrip’s
September Request because it “essentially
was a second motion for reconsideration on
the same grounds as the first...” Waltrip,
No. CAAP-11-0000722, SDO at 2. According-
ly, the ICA vacated LIRAB’s second post-
judgment order and remanded the case to
the LIRAB “for entry of an order dismissing

6. Reconsideration or reopening of decision or
order,
(a) In the absence of an appeal and within
thirty days after mailing of a copy of the
board’s decision or order, the board may, upon.
the request of any party, or upon its own
motion, reconsider or reopen the matter. If
reopening is allowed, the board may take fur-
ther evidence or may modify its decision or
order, The time to initiate judicial review
shall run from the date of mailing of the fur-
ther decision if the matter has been reconsid-

the motion [to vacate] for lack of jurisdic-
tion.” Id, at 2.

C. Waltrip’s Application for a Writ of
Certiorari

Waltrip timely filed an application for a
writ of certiorari. Waltrip’s application stat-
ed that she was appealing the ICA’s SDO
and Judgment on Appeal. Her application
did not state that she was appealing the
Partial Dismissal Order. Notably, other
than Waltrip asserting that she was appeal-
ing the ICA’s SDO, the application lacks any
argument regarding the ICA’s disposition.

This court accepted certiorari pursuant to
its discretionary authority under HRS
§ 602-59(a) (Supp.2011), to consider various
procedural issues implicated by these pro se
proceedings before LIRAB and the ICA, See
State v. Fields, 115 Hawai'i 508, 586, 168 P.8d
955, 988 (2007) (stating that HRS § 602~
59(b) “is not descriptive of the scope of re-
view determinative of the supreme court's
decision to grant or deny certiorari” (quoting
Conf, Comm. Rep. No, 78, in 1979 Senate
Journal, at 992 (internal quotation marks,
emphases, and brackets omitted))).

Ill, Standards of Review

A. LIRAB’s Decision
HM «Ordinarily, deference will be given
to decisions of administrative agencies act-
ing within the realm of their expertise,
The rule of judicial deference, however,
does not apply when the agency’s reading
of the statute contravenes the legislature’s
manifest purpose. Consequently, we have
not hesitated to reject an incorrect or un-
reasonable statutory construction ad-
vanced by the agency entrusted with the
statute’s implementation.

Coon v. City & Cnty. of Honolulu, 98 Hawai'i

288, 245, 47 P.8d 848, 360 (2002) (internal

ered or reopened. If the request for reconsid-
eration or reopening is denied, the time to
initiate judicial review shall run from the date
of mailing the denial decision. (b) The request
for reconsideration or reopening shall be in
writing and shall be served upon all parties.
The request shall specify the reasons why re-
consideration or reopening is warranted. (c) A
hearing on the request for reconsideration or
reopening may be held at the board’s discre-
tion,
HAR § 12-47-53.

quotation marks, citations, and brackets
omitted),
The standard of review for decisions of the
LIRAB is well-established:
Appellate review of a LIRAB decision is
governed by HRS § 91~14(g) (1998), which
states that:
Upon review of the record the court may
affirm the decision of the agency or re-
mand the case with instructions for fur-
ther proceedings; or it may reverse or
modify the decision and order if the
substantial rights of the petitioners may
have been prejudiced because the ad-
ministrative findings, conclusions, deci-
sions, or orders are:

@) In violation of constitutional or

statutory provisions; or

(2) In excess of the statutory authori-

ty or jurisdiction of the agency; or

(8) Made upon unlawful procedure; or

(4) Affected by other error of law; or

(6) Clearly erroneous in view of the

reliable, probative, and substantial evi-

dence on the whole record; or

(6) Arbitrary, or capricious, or charac-

terized by abuse of discretion or clear-

ly unwarranted exercise of discretion.
HI We have previously stated:

[Findings of Fact] are reviewable un-
der the clearly erroneous standard to
determine if the agency decision was
clearly erroneous in view of reliable, pro-
bative, and substantial evidence on the
whole record.

[Conclusions of Law] are freely re-
viewable to determine if the agency’s
decision was in violation of constitutional
or statutory provisions, in excess of stat-
utory authority or jurisdiction of agency,
or affected by other error of law.

A [Conclusion of Law] that presents
mixed questions of fact and law is re-
viewed under the clearly erroneous stan-
dard because the conclusion is depen-
dent upon the facts and circumstances of
the particular case. When mixed ques-
tions of law and fact are presented, an

7. This occurred on October 2, 2014, the issue
date of the ICA's Judgment on Appeal.

Orders of dismissal do not generally require an

entry of judgment. See HRAP Rule 36(b)(1) (“AE-

235

appellate court must give deference to
the agency's expertise and experience in
the particular field. The court should
not substitute its own judgment for that
of the agency.
Igawa v. Koa House Rest., 97 Hawaii 402,
405-06, 88 P.3d 570, 578-74 (2001) (quoting
In re Water Use Permit Applications, 94
Hawai‘ 97, 119, 9 P.8d 409, 481 (2000)) (inter-
nal quotation marks, citations, and brackets
in original omitted),
An FOF or a mixed determination of law
and fact is clearly erroneous when (1) the
record lacks substantial evidence to sup-
port the finding or determination, or (2)
despite substantial evidence to support the
finding or determination, the appellate
court is left with the definite and firm
conviction that a mistake has been made.
We have defined “substantial evidence” as
eredible evidence which is of sufficient
quality and probative value to enable a
person of reasonable caution to support a
conclusion.
In re Water Use Permit Applications, 94
Hawai'i at 119, 9 P.8d at 481 (internal quota-
tion marks and citations omitted),

B. Jurisdiction

HI ‘{Tihe existence of jurisdiction is a
question of law that [is] review[ed] de novo
under the right/wrong standard.” Captain
Andy’s Sailing, Inc. v. Dep't of Land &
Natural Res., 118 Hawai'i 184, 192, 150 P.3d
838, 841 (2006) (internal quotation marks and
citation omitted),

IV. DISCUSSION

I We first clarify that this court has the
authority to consider the entirety of the
ICA’s disposition of Waltrip’s appeal. That
is, although certain portions of Waltrip’s ap-
peal had been dismissed pursuant to the
ICA’s Partial Dismissal Order, that order
became eligible for further appellate review
upon the ICA’s disposition of Waltrip’s entire
appeal.”

I Certainly, the ICA may choose to ad-
dress issues raised in a notice of appeal in a

ter a final decision, other than an order of dis-
missal, has been filed in an appeal, the court
rendering the decision shall prepare and submit
to the appellate clerk for filing the judgment on

236

piecemeal fashion, as it did here, to assist in
the efficient disposition of cases. See HRS
§ 602-57(8) (“[TThe [ICA] shall have jurisdic-
tion ... [t]o make or issue any order ...
necessary or appropriate in the aid of its
jurisdiction....”). For example, that the
ICA issued the Partial Dismissal Order prior
to the deadline for Employer and Fund to
file answering briefs, likely prompted the
parties to more fully discuss remaining issues
instead of addressing matters on which the
court had already ruled.

TI The ICA’s management of its cases,
however, does not alter HRAP’s contempla-
tion that a writ of certiorari only be from an
order that is actually case dispositive® or
otherwise immediately appealable. See
Greer v. Baker, 187 Hawai'i 249, 369 P.8d
882, No. SCWC-15-0000034, slip op. passim,
2016 WL 697571 (Feb. 22, 2016) (stating ex-
amples of immediately appealable orders).
This is evident by the use of singular nouns
and the lack of specific reference in the HRS
and HRAP that a non-case-dispositive partial
dismissal order can serve as the basis for an
application for a writ of certiorari. See HRS
§ 602-59(a) (Supp.2011) (“After issuance of
the intermediate appellate court’s judgment
or dismissal order, a party may seek review
of the intermediate appellate court’s decision
and judgment or dismissal order only by
application to the supreme court for a writ of
certiorari, the acceptance or rejection of
which shall be discretionary upon the su-
preme court.”); HRAP Rule 40.1(a)(1) (“A
party may seek review of the intermediate
court of appeals’ decision by filing an applica-
tion for a writ of certiorari in the supreme
court. The application shall be filed within
80 days after the filing of the intermediate
court of appeals’ judgment on appeal or dis-
missal order, unless the time for filing the

appeal, signed by a judge or justice for the

court.”). However, here, in addition to dismiss-
ing Waltrip’s appeal by way of its SDO, the ICA
had also vacated LIRAB’s Order Denying Sep-
tember Request and remanded the case to LIR-

AB for entry of an order dismissing the motion

for lack of jurisdiction, Accordingly, a judgment

on appeal was warranted, and therefore Wal-

trip's appeal was not disposed of until the judg-
ment issued.

8 This is so, even if the underlying notice of
appeal also encompasses multiple post-judgment

application is extended in accordance with
this Rule.”).

In addition, HRS § 602-59(d) provides
that the clerk “shall forward the complete
file of the case to the supreme court” upon
the acceptance of an application for a writ of
certiorari, In most appeals, there is no long-
er a hard file due to the advent of electronic
filing. This statute signifies, however, a leg-
islative intent that a single case file be in the
eustody of a single appellate court at any
given time.

Interrupting the ICA’s review in this man-
ner would be inconsistent with the legisla-
ture’s reasons for creating the ICA; that is,
to address “‘the evergrowing congestion of
cases at the appellate level of our judicial
system and the concurrent increase in the
length of time it takes for both civil_and
criminal cases to reach a conclusion”” Conf.
Comm. Rep. No. 70, in 1979 House Journal,
at 1122, Conf. Comm. Rep. No. 78, in 1979
Senate Journal, at 989 (quoting Stand.
Comm. Rep. No. 52, in 1978 Proceedings of
the Constitutional Convention of Hawaiti,
Vol. 1, at 617) (emphasis added); see id, in
1979 House Journal, at 1122-1128, Conf.
Comm. Rep. No. 78, in 1979 Senate Journal,
at 990 (noting that the discussion by dele-
gates to the Constitutional Convention was
“comprehensive,” “thoughtful,” and “help-
ful”). This purpose has endured, even after
our appellate system transitioned to its eur-
rent three-tiered form, as evidenced by the
legislature’s concerns as to whether the new
system “will affect rates of appeal, timeliness
of decision-making, and caseload manage-
ment.” 2004 Haw. Sess, Laws Act 202, § 88
at 948,

HH In this light, it is clear that when the
phrase “or dismissal order” was added in
2006 to HRS § 602-59(a),° it was intended to

motions that may be separately ruled upon by the
ICA, See HRAP Rule 4(a)(3) (“The notice of ap-
peal shall be deemed to appeal the disposition of
all post-judgment motions that are timely filed
after the entry of the judgment or order.”).

9, Act 149 of the 2006 legislative session amended
RS § 602-59 to read as follows:

(a) After issuance of the intermediate ap-
pellate court's judgment{,] or dismissal order,
a party may seek review of the intermediate
appellate court’s decision and judgment or

address the ICA’s assumption of new case-
load management functions following imple-
mentation of Act 202, which included ruling
on potentially case dispositive motions. See
Judge Gail C. Nakatani, Judicial Council of
Hawaii, Final Report of the Appellate Re-
view Task Force (“Task Force”) 4, 41 (App.
C) (2005). In other words, the addition of the
phrase “or dismissal order,” clarified that an
application for writ of certiorari may also be
filed after the ICA issues a dispositional or-
der that may not be a “judgment.” It can be
further inferred from the legislature’s mini-
mal discussion regarding the addition of the
phrase “or dismissal order” that the amend-
ment was not intended to alter the legisla-
ture’s clear purpose that parties’ appeals be
resolved as efficiently as possible. See
Stand. Comm. Rep. No, 2254, in 2006 Sen-
ate Journal, at 1186 (stating that the pro-
posed bill was “based upon a recommenda-
tion by the Hawai‘i Appellate Review Task
Force to the Judiciary”); Task Force, at 12-
18 (discussing criteria for writ of certiorari,
but lacking any specific discussion of the
phrase, “or dismissal order”),

Moreover, we observe that Act 149’s inser-
tion of the phrase “or dismissal order” into
part (a) of HRS § 602-59, should be con-
strued together with the entirety of Act 149’s
amendments to the statute, specifically, the
reinstatement of criteria for applications for
writ of certiorari into part (b). See text
supra n. 9, An applicant would be hard-
pressed to explain why the “magnitude of
[the ICA’s] error or inconsistencies” with
respect to a partial dismissal order “dic-
tates] the need for further appeal,” when the
magnitude of such error might be readily
mitigated by the ICA’s resolution of the re-

dismissal order only by application to the su-
Dreme court for a writ of certiorari, the ac-
ceptance or rejection of which shall be dis-
cretionary upon the supreme court.

(b) The application for writ of certiorari
shall tersely state its grounds[-], which shall
include:

1) Grave errors of law or of fact; or

(2) Obvious inconsistencies in the decision
of the intermediate appellate court with that of
the supreme court, federal decision, or its own
decision,
and the magnitude of those errors or inconsis-
tencies dictating the need for further appeal.

2006 Haw. Sess, Laws Act 149, § 1 at 409.

237

maining issues on appeal. 2006 Haw. Sess.
Laws Act 149, § 1 at 409,

Accordingly, in cases in which
the ICA separately addresses raised issues, a
party's thirty-day window to file an applica-
tion for a writ of certiorari regarding the
ICA’s decision on any of the raised issues,
begins when an appeal is disposed of in its
entirety and judgment on appeal entered, if
required under HRAP Rule 36. For exam-
ple, when a petitioner timely files her appli-
eation within thirty days of the date of issue
of the ICA’s judgment on appeal, as did
Waltrip here, this court has the authority to
consider the entirety of the ICA’s disposition,
This means that in this case, we may exam-
ine both the Partial Dismissal Order and the
SDO.

Next, although this court has the authority
to consider the entirety of the ICA’s disposi-
tion of Waltrip’s appeal,!° we observe that it
is undisputed that the Application states that
Waltrip seeks a “writ of certiorari of the
October 2nd 2014 Judgment on Appeal,”
which was entered solely “[pJursuant to the
Summary Disposition Order ... entered on
August 28, 2014,” but fails to state the
grounds upon which she contests that Judg-
ment. Waltrip herself recognized the scanti-
ness of her Application when she moved for,
and was denied, an “Extension to File Paper-
work on Writ of Certiorari.”

Nevertheless, it was apparent to this court
that the ICA’s SDO focused on the single
issue of LIRAB’s subject matter jurisdiction
over Waltrip’s pro se September Request,
and that therefore the only self-evident chal-
lenge to the ICA’s Judgment and SDO would
be based on error associated with the ICA’s
sua sponte jurisdictional determination due
to its recharacterization of Waltrip’s Septem-
ber Request.

10. The ICA did not err in issuing its Partial
Dismissal Order. It had the authority to issue
the order pursuant to HRS § 602-57(3), and
correctly determined that the notice of appeal
was untimely filed as to the July 2011 Decision
and August Request.

11, Moreover, we note that in Waltrip’s Supple-
mental Brief, under the header, “obvious incon-
sistencies in the decisions of the Intermediate
Appellate Court with that of Supreme Court,
federal decions [sic] or its own decision, and the
magnitude of those errors or inconsistencies dic-
tating the need for further appeal,” Waltrip stat-
ed: “The Intermediate Court of Appeals had no

238

With these specific cireumstances forming
the backdrop, we granted Waltrip’s pro se
Application.

A. Waltrip’s September Request Could
Have Reasonably Been Construed as a
Motion to Reopen

Hn its Order Denying September Re-
quest, LIRAB construed Waltrip’s Septem-
ber 28, 2011 “Request That the July 25th,

2011 Decision and Order Be Vacated and

That the Labor and Industrial Relations Ap-

peals Board Issue a New Notice of Initial

Conference and Restart the Proceedings All

Over Again Including New Discovery Dead-

lines and a Retrial of the Issues” as a “non-

hearing Motion to Vacate the Board’s Deci-
sion of July 25, 2011” and denied it without

further explanation. The ICA’s August 28,

2014 Summary Disposition Order concluded

that LIRAB’s Order Denying September Re-

quest was error because LIRAB should have
instead “dismissed the motion for lack of
subject matter jurisdiction” as Waltrip’s Sep-
tember Request was “essentially ... a sec-
ond motion for reconsideration on the same
grounds as the first.” Waltrip, No. CAAP-

11-0000722, SDO at 2 (citation omitted).

The entirety of the ICA’s discussion reads as

follows:

Waltrip does not suggest a statutory or
regulatory basis supporting her September
28, 2011 motion to vacate, which essentially
‘was a second motion for reconsideration on
the same grounds as the first, and we can
find none. We hold that there was no
authority for the Board to rule on the
merits of the motion and, as such, rather
than issuing a denial, the Board should
have dismissed the motion for lack of sub-
ject matter jurisdiction. See Hawait
Mgmi. Alliance Ass'n v. Ins, Comm’r, 106
Hawai‘i 21, 27, 100 P.8d 952, 958 (2004)
(holding that the insurance commissioner’s
authority to hear external review appeals,
as authorized by statute, was a question of
subject matter jurisdiction); see also Bush
v. Watson, 81 Hawai'i 474, 480, 918 P.2d
1180, 1186 (1996) (stating that dismissal for
lack of subject matter jurisdiction is not an
adjudication on the merits), Accordingly,
we vacate the ... Order [Denying Septem-

valid reason for their [sic] denial of October 2,
2014 where they did have jurisdiction.”

ber Request] because the Board lacked

subject matter jurisdiction. Haw.Rev.Stat.

§ 886-87(d) (1993),

Waltrip, No. CAAP-11-0000722, SDO at 2
(footnoted omitted),

Notably, when the September Request was
before LIRAB, neither Fund nor Employer
objected to the September Request on
grounds that LIRAB lacked jurisdiction,
Accordingly, the ICA’s decision was prem-
ised on its subsequent recharacterization of
Waltrip’s Request as a second motion for
reconsideration, and consequent examination
of jurisdictional defects based on that rechar-
acterization,

Contrary to the ICA’s characterizations, on
their faces, the August Request and Septem-
ber Request were not submitted on “essen-
tially ... the same grounds.” Waltrip, No.
CAAP-11-0000722, SDO at 2. Although the
ICA accurately noted that Waltrip relied in
both requests on the same assertion—that
she was “unable to adequately represent
{herself at the proceedings”—the nature of
each request differed. The August Request
asked the Board to reconsider its ruling giv-
en Waltrip’s assertion that she is “not compe-
tant [sic] to represent [her]self.”

In contrast, the September Request asked
for the July 2011 ruling to be vacated and
that proceedings be re-initiated so that Wal-
trip could conduct discovery anew and have a
new trial. Additionally, Waltrip provided
with her September Request copies of two
letters from her treating psychiatrist, Dr,
Grace Marian, concerning Waltrip’s psychiat-
rie treatment and mental and physical condi-
tions. Dr. Marian began treating Waltrip in
December 2010 after the Board conducted its
hearing on Waltrip’s claims, and both letters
were dated after the Board’s July 25, 2011
ruling issued, Reading Waltrip’s Request in
the light of (1) the submission of Dr. Ma-
rian’s letters that include references to Wal-
trip’s pain, insomnia, and lethargy, and (2)
that it had been over a year since the Board’s
hearing, leads to a reasonable, liberal con-
struction of the Request as a motion to re-
open the case under the Director's continuing
jurisdiction pursuant to HRS § 386-89.!2

12, See text supra n. 5.

Thus, although the ICA’s instruction to
LIRAB to dismiss Waltrip’s September Re-
quest for lack of jurisdiction is not incorrect,
we disagree with the ICA’s reasoning. The
September Request should not have been
construed as a second “request to reconsid-
er,” but rather as a motion to reopen under
HRS § 886-89(c) that was inappropriately
filed with LIRAB instead of the Director.

B. Hawai‘i’s Commitment to Access to
Justice for All Litigants Requires
That Waltrip’s September 23, 2011 Re-
quest Not Be “Construed Away”

A fundamental tenet of Hawai'i
law is that “[p]leadings prepared by pro se
litigants should be interpreted liberally.”
Dupree, 121 Hawai'i at 314, 219 P.8d at 1101
(citation omitted). The underpinnings of this
tenet rest on the promotion of equal access to
justice—a pro se litigant should not be pre-
vented from proceeding on a pleading or
letter to an agency if a reasonable, liberal
construction of the document would permit
him or her to do so. See Doe, 185 Hawai'i
890, 851 P.8d 1156 (holding the ICA erred in
affirming the cireuit court’s dismissal of pro
se litigant’s agency appeal based on lack of
jurisdiction, as circuit court should have lib-
erally construed litigant’s letter as initiating
administrative proceedings); see also, e9.,
Eldridge v. Block, 882 F.2d 1132, 1187 (0th
Cir.1987) (“The Supreme Court has instruct-
ed the federal courts to liberally construe the
‘inartful pleading’ of pro se litigants.” (citing
Boag v. MacDougall, 454 U.S. 364, 365, 102
S.Ct. 700, 70 L.Ed.2d 551 (1982) (per cu-
riam)).

Federal courts have extended this “liberal-
ity doctrine” to include pro se motions in
certain scenarios, Christensen v. Comm’r,
786 F.2d 1882, 1885 (9th Cir.1986); see, eg.
Bernhardt v. Los Angeles Cnty, 889 F.8d
920, 925 (9th Cir.2003) (“Courts have a duty
to construe pro se pleadings liberally, includ-
ing pro se motions as well as complaints.”
(citations omitted)) (reviewing district court’s

13. _ Exclusiveness of right to compensation; ex-
ception, The rights and remedies herein
granted to an employee or the employee’s de-
pendents on account of a work injury suffered
by the employee shall exclude all other liability
of the employer to the employee, the employ-
ee’s legal representative, spouse, dependents,
next of kin, or anyone else entitled to recover

239

denial of pro se plaintiff's motion for prelimi-
nary injunction barring defendant county
from settling plaintiffs civil rights action in a
way that interferes with her counsel’s ability
to apply for attorney’s fees under 42 U.S.C.
§ 1988). Such scenarios may “extend[] ...
beyond the prisoner/civil rights context.”
Christensen, 786 F.2d at 1885 (“Tax disputes
that involve relatively minor sums may be of
great significance to less wealthy taxpayers.
Such taxpayers’ access to Tax Court review
should not be barred by legal technicali-
ties.... In light of the policy favoring liberal
reading of pro se litigants’ papers, we find
that the ‘Motion to Place the Following
Statements in the Record’ should have been
treated as a motion to amend. We remand
so that the Tax Court can consider whether
to grant that motion.”),

HI Waltrip’s circumstances, which cen-
ter on a workers’ compensation claim, war-
rant similar application of the “liberality doc-
trine.” As the only recovery available for an
employee who is injured at work is typically
a statutory award under Hawaii’s workers’
compensation law,!* and as the law embodies
a “broad humanitarian purpose,” Lawhead v.
United Air Lines, 59 Haw. 551, 560, 584 P.2d
119, 125 (1978) Gnternal quotation marks and
citation omitted), to “(1) restore the injured
employee, and (2) to compensate the employ-
ee adequately,” Alvarez v. Liberty House,
Inc., 85 Hawai'i 275, 278, 942 P.2d 539, 542
(1997) (citation omitted), an employee pro-
ceeding pro se should not be prevented from
fully litigating his or her claim simply be-
cause his or her filings are “inartful” and
fails to reference a statute by number, or
correctly address a request to the Director
or LIRAB, Thus, just as Hawai‘’s workers’
compensation law should be “ ‘construed lib-
erally in order to accomplish the purpose for
which it was enacted,’” Alvarez, 85 Hawaii
at 278, 942 P.2d at 542 (quoting Flores v,
United Air Lines, Inc, 70 Haw. 1, 12, 757
P.2d 641, 647 (1988), so, too, should pro se

damages from the employer, at common law
or otherwise, on account of the injury, except
for sexual harassment or sexual assault and
infliction of emotional distress or invasion of
privacy related thereto, in which case a civil
action may also be brought, ©

HRS § 386-5 (1993),

240

pleadings, including motions, in workers’
compensation cases,

Had LIRAB properly dismissed Waltrip’s
September Request for lack of jurisdiction
based on the filing of a motion to reopen with
LIRAB instead of the Director, Waltrip
would have been alerted with whom to appro-
priately file her Request so that she may
seek benefits that she perceived to have been
improperly denied. In contrast, the ICA’s
incorrect construction of the September Re-
quest as a second motion for reconsideration
provided Waltrip, a pro se litigant, little guid-
ance.!4

C. Courts and Agencies Should Construe
Pro Se Filings in a Reasonable Man-
ner That Enables Them to Promote
Access to Justice

Instructive on the issue of the scope of a
court’s discretion to recharacterize a motion
is Mata v. Lynch, — U.S. ——, 185 S.Ct.
2150, 192 L.Ed.2d 225 (2015). Mata was an
illegal alien who was ordered by an immigra-
tion judge to leave the country. Matza’s at-
torney filed with the Board of Immigration
Appeals (“Immigration Board”) a notice of
appeal of the immigration judge’s decision,
and indicated that a written brief in support
of the appeal was forthcoming. Ultimately,
however, no brief was filed and the Immigra-
tion Board dismissed Mata’s appeal. Over
one hundred days after the Immigration
Board’s dismissal, new counsel for Mata filed
a motion with the Immigration Board to re-
open his case pursuant to 8 U.S.C.
§ 1229a(¢)(7)(A) (2012). Although such mo-
tions must typically be filed within ninety
days of the final removal order, see 8 U.S.C.
§ 1229a(c)(7)(C)i) (2012), Mata argued that
he timely filed his motion because “[Mata’s]
first lawyer’s ‘ineffective assistance’ counted
as an ‘exceptional cireumstance[ ] excusing
his lateness.” Mata, 185 S.Ct. at 2158 (sec-

14, Indeed, access to justice also means making
court and agency communications readily infor-
mative, particularly with respect to workers’
compensation cases, so that the law's “broad
humanitarian purpose” is furthered, For exam-
ple, had LIRAB included a notice in its Order
Denying August Request that the deadline to file
a notice of appeal was within thirty (30) days of
the date the order was mailed, Waltrip would
have been officially informed of relevant due
dates. This may have avoided what Waltrip as-

ond brackets in original). The Immigration
Board disagreed and dismissed the motion as
untimely. The Immigration Board also de-
clined to exercise its separate authority to
reopen the case sua sponte,

Mata petitioned the Fifth Circuit Court of
Appeals, arguing that the Immigration Board
improperly denied his motion to reopen as he
was entitled to equitable tolling given his
initial counsel’s ineffective assistance. In-
stead of addressing Mata’s appeal on its mer-
its, the Fifth Cireuit “construed [Mata’s mo-
tion] as an invitation for the [Immigration
Board] to exercise its discretion to reopen
the removal proceeding sua sponte” and dis-
missed Mata’s appeal for lack of jurisdiction.
Mata v. Holder, 558 Fed.Appx. 366, 367
(2014) (‘As the [Immigration Board] has
complete discretion in determining whether
to reopen sua sponte under 8 O.F.R.
§ 1008.2(a), and we have no meaningful stan-
dard against which to judge that exercise of
diseretion, we lack jurisdiction to review such
decisions.” (citation omitted)).

The United States Supreme Court re-
versed, Contrary to the Fifth Circuit's as-
sessment that only the Immigration Board’s
denial to sua sponte reopen the case was at
issue, the Court first observed that the Im-
migration Board’s decision separately ad-
dressed two matters: (1) Mata’s motion to
reopen, and (2) whether the Immigration
Board should sua sponte reopen the case.
“That courts lack jurisdiction over one mat-~
ter (the swa sponte decision) does not affect
their jurisdiction over another (the decision
on [Mata]’s request).” Mata, 185 S.Ct. at
2155. In other words, “[t]he Court of Ap-
peals did not lose jurisdiction over the [Im-
migration] Board’s denial of Mata’s motion
just because the [Immigration] Board also
declined to reopen [Mata’s] case sua sponte.”
Id.

serts to have occurred: that she relied on incor-
rect information she orally received from a LIR-
AB employee, leading her to file a notice of
appeal one day too late. See Mauna Kea Anaina
Hou v. Bd. of Land & Natural Res., 136 Hawai'i
376, 389, 363 P.3d 224, 237 (2015) (“[T]he man-
ner in which the justice system operates must be
fair and must also appear to be fair.” (citing
Sifagaloa v. Bd. of Trs. of Emps.’ Ret. Sys., 74
Haw. 181, 190, 840 P.2d 367, 371 (1992).

Even if, based on a presumption that the
Immigration and Nationality Act does not
permit equitable tolling,

the right course on appeal is to take juris-

diction over the case, explain why that is

so, and affirm the [Immigration Board]’s
decision not to reopen. The jurisdictional
question (whether the court has power to
decide if tolling is proper) is of course
distinct from the merits question (whether
tolling is proper). The Fifth Circuit thus
retains jurisdiction even if Mata’s appeal
lacks merit.... Accordingly, the Court of

Appeals should have asserted jurisdiction

over Mata’s appeal and addressed the eq-

uitable tolling question.

Mata, 185 S.Ct. at 2156 (citations omitted).
The Supreme Court then noted that “the
Fifth Cireuit’s practice of recharacterizing
appeals like Mata’s as challenges to the
Board’s sua sponte decisions and then declin-
ing to exercise jurisdiction over them” pre-
vents potential splits among the circuits from
“coming to light” and addressed by the
Court. Id. (T]he Fifth Cireuit may not ...
wrap ... a merits decision in jurisdictional
garb so that we cannot address a possible
division between that court and every oth-
er.”).

Tf a litigant misbrands a motion, but could

get relief under a different label, a court

will often make the requisite change. But
that established practice does not entail
sidestepping the judicial obligation to exer-
cise jurisdiction, And it results in identify-
ing a route to relief, not in rendering relief
impossible. That makes all the difference
between a court’s generously reading
pleadings and a court’s construing away
adjudicative authority.

Id. (citation omitted) (emphasis added).

Just as federal appellate courts
should not “construe away” jurisdiction and
prevent substantive decisions from “coming
to light,” so, too, should Hawaii’s courts and
agencies not construe pro se filings in a
manner that leads to a decision that does not,
promote access to justice, or, as pertinent
here, does not further the “humanitarian
purpose of the workers’ compensation stat-
ute.” Panoke v. Reef Dev. of Haw, Inc., 186
186 Hawai'i 448, 462, 368 P.8d 296, 310 (2015)
{T]he broad humanitarian purpose of the
workers’ compensation statute read as a

241

whole requires that all reasonable doubts be
resolved in favor of the claimant[.]” (quoting
Van Ness v. State, Dep’t of Educ, 181 Ha-
wai'i 545, 558, 319 P.8d 464, 477 (2014)) (cita-
tion, internal quotation marks, and emphasis
omitted). Instead, pro se filings, even when
“misbranded,” should be reasonably con-
strued in a manner that “results in identify-
ing a route to relief, not in rendering relief
impossible.” Mata, 185 S.Ct. at 2156. In
this case, in identifying a “route to relief,”
LIRAB should have informed Waltrip that
she filed her September Request before the
‘wrong governmental entity.

V. Conclusion

For the foregoing reasons, we affirm the
ICA’s Judgment on Appeal. The ICA’s
Judgment as to the July 2011 Decision and
August Request is affirmed. The ICA’s
Judgment as to the September Request is
affirmed on other grounds. This case is re-
manded to LIRAB for entry of an order
dismissing the September Request for lack
of jurisdiction, Such dismissal shall indicate
that it is without prejudice to any subse-
quent attempt by Waltrip to request that
the Director reopen her case pursuant to
HRS § 386-89.

Opinion concurring in the result by
RECKTENWALD, C.J., with whom
NAKAYAMA, J., joins.

Respectfully, I concur only in the Majori-
ty’s result affirming the Intermediate Court
of Appeals’ (ICA) October 2, 2014 Judgment.
on Appeal entered pursuant to its August 28,
2014 Summary Disposition Order (SDO).
The Labor and Industrial Relations Appeals
Board (LIRAB) lacked jurisdiction over Wal-
trip’s Motion to Vacate, and accordingly, this
case should be remanded to LIRAB for entry
of an order dismissing the motion. I write
separately for two reasons: (1) the Majority
should not affirm or otherwise rule on the
ICA’s May 81, 2012 Partial Dismissal Order,
and (2) the ICA did not err in construing
‘Waltrip’s Motion to Vacate as a second mo-
tion for reconsideration,

First, I do not believe that this court has
jurisdiction to review the May 31, 2012 Par-
tial Dismissal Order, in which the ICA dis-

242

posed of Waltrip’s appeals of LIRAB’s July
25, 2011 Decision and Order and of LIRAB’s
August 29, 2011 Order. Hawaii Revised
Statutes (HRS) § 602-59(e) (Supp.2011)
plainly states, “An application for a writ of
certiorari may be filed with the supreme
court no later than thirty days after the filing
of the judgment or dismissal order of the
intermediate appellate court.” (Emphasis
added). See also Hawai'i Rules of Appellate
Procedure Rule 40.1(a). Waltrip filed her
application more than thirty days after May
81, 2012, so her application was untimely.
Consequently, this court lacks appellate ju-
risdiction with respect to the Partial Dismiss-
al Order. See HRS § 602-5(a)(1) (Supp.
2004) (stating that the supreme court has
jurisdiction over issues “properly brought be-
fore it by application for a writ of certiora~
1”),

Moreover, I would not address the Partial
Dismissal Order because, as the Majority
acknowledges, Waltrip’s “only self-evident
challenge” on certiorari is to the ICA’s Au-
gust 28, 2014 SDO, not the Partial Dismissal
Order, We need not and should not rule on
an issue that was not raised or disputed by
the parties, See Alvarez Family Tr. v. Ass'n
of Apartment Owners of Kaanapali Alii, 121
Hawai'i 474, 488, 221 P.8d 452, 466 (2009),

Second, I do not agree with the Majority
that the ICA erred in construing Waltrip’s
Motion to Vacate as a second motion for
reconsideration, since her Motion for Recon-
sideration and Motion to Vacate were sub-
stantially the same. Both were addressed to
LIRAB, sought review of LIRAB’s July 25,
2011 Decision and Order, and argued that
Waltrip’s medical disabilities prevented her
from adequately representing herself at the
proceedings.

I agree that pleadings prepared by pro se
litigants should be interpreted liberally, con-
sistent with Hawai‘’s commitment to access
to justice. However, the ICA was not re-
quired to construe the Motion to Vacate as a
motion to the Director to reopen her case
pursuant to HRS § 386-89, when nowhere in
her Motion to Vacate or her briefings did she
reference the Director or HRS § 386-89.
Further, nothing in the ICA’s SDO unfairly
prejudiced Waltrip as a pro se litigant, as she
retains the right to file a motion to reopen
with the Director “at any time prior to eight

years after date of the last payment of com-
pensation[.]” HRS § 886-89(c)(1998) (“On
the application of any party in interest, sup-
ported by a showing of substantial evidence,
on the ground of a change in or of a mistake
in a determination of fact related to the
physical condition of the injured employee,
the director may ... review a compensation
ease[.]”).

For these reasons, I would affirm the
ICA’s Judgment on Appeal entered pursuant
to its SDO as it stands—construing Waltrip’s
Motion to Vacate as a second motion for
reconsideration and concluding that LIRAB
lacked jurisdiction—and not reach the other
issues discussed by the Majority.

398 P.3d 831
STATE of Hawai‘i, Plaintiff-Appellee,
ve

Michelle Helen CASTILLON,
Defendant-Appellant.

NO. CAAP-16-0000421

Intermediate Court of Appeals of Hawai'i.
MAY 31, 2017

On the briefs:

Charles M. Cryan, Deputy Public Defend-
er for Defendant-Appellant.

Dale Yamada Ross Deputy Prosecuting
Attorney, County of Hawai'i for Plaintiff-
Appellee.

NAKAMURA, CHIEF JUDGE, AND
LEONARD AND REIFURTH, JJ.

OPINION OF THE COURT BY
NAKAMURA, CHIEF JUDGE

Hl In this appeal, we address the ques-
tion of whether the exceptions to the prohibi-
tion against driving without a license
(WOL) set forth in the statute defining the
offense constitute defenses to the offense or
essential elements of the offense. As ex-
plained below, we hold that the statutory
exceptions to the DWOL offense are defens-
es for which the defendant bears the initial
burden of producing evidence, and not essen-
tial elements that the prosecution in every
case must prove do not apply. In doing so, we
overrule our characterization in State v. Ma-
tautia, 81 Hawai'i 76, 88, 912 P.2d 578, 580
(App. 1996), of the statutory exceptions as
elements of the DWOL offense.

HI Defendant-Appellant Michelle Helen
Castillon (Castillon) was charged with and
convicted of DWOL, At trial, Plaintiff-Appel-
lee State of Hawai'i (State) proved that Cas-
tillon did not have a valid Hawaii driver's
license on November 19, 2015, when she was
observed driving a car on a public road, On
appeal, Castillon argues that there was insuf-
ficient evidence to support her DWOL con-
viction because the State failed to prove that
all the statutory exceptions to the DWOL
offense did not apply. In particular, Castillon
argues that the State failed to prove that she
did not fall within the exceptions for persons
who possess driver’s licenses issued by Cana-
da or Mexico, Castillon, on her part, did not,
present any evidence that she had a driver's
license issued by Canada or Mexico or that
she fell within any of the other statutory
exceptions to the DWOL offense. Based on

244

our holding that the statutory exceptions to
the DWOL offense constitute defenses to,
and not essential elements of, the DWOL
offense, we reject Castillon’s argument that
there was insufficient evidence to support
her DWOL conviction.

Castilion also argues on appeal that the
District Court of the Third Cireuit (District
Court) ! failed to obtain a valid waiver of her
right to testify as required by Tachibana v.
State, 79 Hawai'i 226, 900 P.2d 1293 (1995).
The District Court did not obtain a waiver
directly from Castillon, and instead accepted
the representation of Castillon’s counsel that
Castillon did not want to testify. We conclude
that this was insufficient to satisfy Tachiba-
na, We therefore vacate Castillon’s DWOL
conviction and remand the case for a new
trial.

BACKGROUND

The underlying facts are not disputed. On
November 19, 2015, Hawai'i County Police
Department Officer Aron Tomota (Officer
Tomota) observed Castillon driving a car on
a public road. Officer Tomota effected a traf-
fie stop of Castillon’s car after noticing that
her “vehicle tags” were expired. Castillon
was not able to provide Officer Tomota with
a driver’s license.

Castillon was charged with DWOL. At tri-
al, Officer Tomota testified about his traffic
stop and identified Castillon in court as the
person he had stopped. The State also called
Shannon McCandless (McCandless), the su-
pervising driver’s license examiner for the
County of Hawaii (County) Through
McCandless’ testimony and records of the
County’s Driver’s License Section, the State
established that on November 19, 2015, the
date Castillon was stopped by Officer Tomo-
ta, Castillon did not possess a valid Hawai‘i
driver's license and she was not duly licensed
as a qualified driver. McCandless, however,
was not able to conduct research on whether
Castillon possessed a driver’s license from
Canada, and McCandless did not testify
about whether Castillon had been issued a
driver's license by Canada or Mexico.

Castillon did not offer any evidence that
she possessed a driver's license from Canada

1, The Honorable Margaret K. Masunaga presid-

or Mexico, or that she fell within any other
statutory exception to the DWOL offense,

DISCUSSION
L

A.

Castillon’s claim that there was insufficient
evidence to support her DWOL conviction
turns on whether the exceptions to the
DWOL offense constitute defenses or essen-
tial elements. The DWOL offense is set forth
in Hawaii Revised Statutes (HRS) § 286-102.
At the time relevant to this case, HRS § 286-
102 provided, in pertinent part, as follows:

(a) No person, except one exempted

under section 286-105, one who holds an

instruction permit under section 286-110,

one who holds a provisional license under

section 286-102.6, one who holds a commer-
cial_driver’s license _issued_under section

286-239, or one who holds a_ commercial

Griver’s license instruction permit issued

under section 286-236, shall operate any

category, of motor vehicles listed in this
section without first being appropriately
examined and duly licensed as a qualified
driver of that category of motor vehicles,
HRS § 286-102(a) (2007) (emphasis added).
One of the statutory exceptions to the
DWOL offense is for people exempted from
licencing requirements under HRS § 286-105
(2007). HRS § 286-105 provides as follows:

The following persons are exempt from

license:

(1) Any person while driving or operat-
ing a motor vehicle in the service or
employ of any branch or agency of
the federal government; provided
that the person has received a li-
cense or permit from the branch or
agency to operate and drive the
motor vehicle; provided further that
the branch or agency has been duly
authorized by the federal govern-
ment to issue the license or permit;

(2) Any person while driving or operat-
ing any road machine, farm tractor,
or implement of husbandry tempo-
rarily operated or moved on a high-
way; provided that no person under

ed.

the age of thirteen years shall be
permitted to drive or operate any
such road machine, farm tractor, or
implement of husbandry on a high-
way;

(8) Any person who is at least eighteen
years of age and who has in the
person’s possession a valid driver’s
license to drive the categories of
motor vehicles listed in section 286-
102(b), except section 286-102(b)(4),
that_is equivalent _to_a driver’s li-
cense issued in this State but was
issued_to_the person in another
state of the United States, the
Commonwealth of Puerto Rico,

United States Virgin Islands,
American Samoa, Guam, a province

245

failed “to affirmatively disprove that Castil-
lon was exempted from licensure under HRS
§§ 286-102 and 286-105.” In particular, Cas-
tillon argues that the State failed to present
evidence that the exemptions for a person
possessing a valid driver’s license from a
province of Canada (HRS § 286-105(8)) or a
valid commercial motor vehicle driver's li-
cense from Mexico or a province of Canada
(CARS § 286-105(4)) did not apply to her. We
conelude that proving that Castillon did not
fall within any of the exceptions to the
DWOL offense was not an essential element
of the offense, and therefore, Castillon’s in-
sufficiency of evidence claim is without merit.

B.
Tn State v, Nobriga, 10 Haw.App. 358, 878

of the Dominion of Canada, or the
Commonwealth of the Northern

P.2d 110 (1994), overruled on other grounds
by State v. Maelega, 80 Hawai'i 172, 178-79,

Mariana Islands for that category
of motor vehicle which the person is
operating;

(4) Any person who has in the person’s
possession a valid commercial mo-
tor vehicle driver's license issued by
any state of the United States,

Mexico, or a province of the Domin-
jon of Canada that issues licenses in

accordance with the minimum fed-
eral standards for the issuance of
commercial motor vehicle driver’s
licenses; and
(5) Any person who drives or operates
state or county motor vehicles while
employed by, in the service of, or
volunteering for the state or county
fire departments, provided that
they are trained and certified to
drive category (4) motor vehicles as
set forth in section 286-102(b)(4) by
the state or county government, as
appropriate, and provided that the
person maintains a category (8) li-
cense as set forth in section 286-
102(b)(8).
(Emphases added.)

Castillon contends that an essential ele-
ment of the DWOL offense that the State
had the prima facie burden of proving was
that she did not fall within any of the excep-
tions to the DWOL offense. Castillon argues
that there was insufficient evidence to sup-
port her DWOL conviction because the State

907 P.2d 758, 764-65 (1995), this court set
forth a framework for determining whether a
statutory exception is a “defense” to or an
“element” of an offense. In Nobriga, we stat-
ed:

The general and well-settled common
Jaw rule is that where an exception is
embodied in the language of the enacting
clause of a criminal statute, and therefore
appears to be an integral part of the verbal
description of the offense, the burden is on
the prosecution to negative that exception,
prima facie, as part of its main case, Anno-
tation, Burden of Averment and Proof As
to Exception in Criminal Statute on Which
the Prosecution Is Based, 153 A.L.R. 1218,
1226 (1944); 1 Wharton’s Criminal Evi-
dence § 20, at 35 (C. Torcia 13th ed. 1972),

This general rule does not apply, howev-
er, “when the facts hypothesized in the
exceptive provision are peculiarly within
the knowledge of the defendant, or the
evidence concerning them is within the
defendant’s private control.” 1 Wharton’s
Criminal Evidence $ 20, at 35. Further-
more, when the exception appears some-
where other than in the enacting clause,
and is thus a distinct substantive exception
or proviso, the burden is on the defendant,
to_bring forward evidence of exceptive
facts that constitute a defense, Annotation,
158 A.L.R, at 1277-78; 1 Wharton’s Crimi-
nal Evidence § 20, at 35. The prosecutor is
not required in such instances to negative,

246

by proof in advance, exceptions not found

in the enacting clause. 1 Wharton’s Crimi-

nal Evidence § 20, at 33-34,

Nobriga, 10 Haw.App. at 357-58, 873 P.2d at
112-18 (footnote and brackets omitted) (em-
phasis added).

In State v. Lee, 90 Hawai'i 180, 976 P.2d
444 (1999), the Hawai'i Supreme Court ap-
plied the Nobriga framework to a statute
defining the offense of driving without insur-
ance that was very similar in structure to the
statute defining the offense of driving with-
out a license at issue in this case, Similar to
the DWOL statute, the statute defining the
offense of driving without insurance, HRS
§ 481:10C-104 (1998), contained an exception
for drivers that were self-insured. HRS
§ 481:100-104 stated in relevant part:

Except as provided in section 481:10C-105

[(the section pertaining to self-insur-

ance) ], no person shall operate or use a

motor vehicle upon any public street, road,

or highway of the State at any time unless
such motor vehicle is insured at: all times
under a no-fault policy.
Lee, 90 Hawai'i at 182 n.1, 976 P.2d at 446
nl (emphasis added) (quoting HRS
§ 481:10C-104 (1998)),

In Lee, the supreme court addressed the
question of whether the statutory exception
for self-insured drivers was a defense to or
an element of the offense of driving without
insurance. Id, at 185-89, 976 P.2d at 449-53.
Applying the Nobriga framework for deter-
mining whether a statutory exception is a
defense (on which the defendant bears the
initial burden of producing evidence) or an
element of the offense (which the prosecution
must disprove in every case), the supreme
court concluded that the self-insurance ex-
ception was a defense, Id, at 187-88, 976 P.2d
at 451-52,

The supreme court reasoned that although
the statute defining the offense of driving
without insurance (HRS § 481:100-104) re-
ferred to the HRS § 481:10C-105 self-insur-
ance provisions, the self-insurance provisions
were not located in the enacting clause of the
statute defining the driving without insur-
2. ‘In criminal nomenclature, the term ‘enacting

clause’ has long been applied to the prohibitory

declaration of the statute which contains the
general or preliminary description of the acts

ance offense.” Id, at 188, 976 P.2d at 452. In
addition, the supreme court concluded that
“(ijn as much as self-insurance is likely to be
quite rare, it would be absurd to require the
prosecution to disprove it in every case.” Id,

As in Lee, although HRS § 286-102(a) re-
fers to a series of separate provisions that
establish exceptions to the offense of DWOL,
the provisions defining the exceptions are not
located within the enacting clause of the
DWOL offense, More importantly, given the
Jarge number of statutory exceptions, and
the relatively small number of drivers who
would appear to qualify for the exceptions
when compared to those who need a valid
Hawai‘i driver's license to drive, it would be
absurd to require the prosecution to disprove
all the possible exceptions in every case in
which the State charged a driver with driving
without a license. See id.; State v. Turping,
136 Hawai'i 388, 387, 361 P.8d 1286, 1240
(App. 2015) (concluding that it would be ab-
surd to require the prosecution to disprove
the statutory exception for denatured or oth-
er non-potable alcohol in every drunk driving
case).

In addition, under the Nobriga frame-
work, when the facts or evidence concerning
the exception are “peculiarly within the
knowledge of the defendant” or “within the
defendant’s private control [,]” the exception
constitutes a defense, and not an essential
element of the offense. Nobriga, 10 Haw.
App. at 358, 873 P.2d at 118 (internal quota-
tion marks, citation, and brackets omitted).
This principle provides further support for
the conclusion that the exceptions to the
DWOL offense are properly characterized as
defenses, A person who satisfies one of the
statutory exceptions would certainly have
knowledge of that fact and would have evi-
dence concerning the exception within his or
her control, See State v. Jenkins, 98 Hawai'i
87, 107, 997 P.2d 18, 88 (2000) (holding that
whether the defendant did or did not pos-
sess a hunting license was a fact peculiarly
within the defendant’s knowledge, and there-
fore, the statutory exception to the “place to
keep” offense pertaining to individuals with
a hunting license constituted a defense),

prohibited; i,¢,, the clause which proscribes the

offensive deed.” Nobriga, 10 Haw.App. at 357
ni, 873 P.2d at 112 nl (citation omitted).

In contrast, if the statutory exceptions are
deemed an essential element of the offense,
the State would have the burdensome task of
negating in every case all of the numerous
exceptions, including exceptions having no
possible relevance to the defendant, in order
to establish the DWOL offense. For example,
in this case, there is no indication of any
possibility that the exceptions for a person
possessing a valid driver’s license from a
province of Canada or a valid commercial
motor vehicle driver's license from Mexico or
a province of Canada might apply to Castil-
lon. Nevertheless, Castillon argues that there
was insufficient evidence to find her guilty
because the State failed to prove that she did
not possess a driver’s licence from Canada or
Mexico,

In accordance with Lee, we conclude that
the statutory exceptions referred to in HRS
§ 286-102(a) are not elements of the DWOL
offense, but constitute defenses to the of-
fense, Lee, 90 Hawai'i at 188, 976 P.2d at
452; see Jenkins, 93 Hawai'i at 107, 997 P.2d
at 83; Turping, 186 Hawai'i at 385-87, 361
P.8d at 1288-40 (holding that the statutory
exception for denatured or other non-potable
alcohol is a defense to and not an element of
the offense of operating a vehicle under the
influence of an intoxicant), Because Castillon
did not offer any evidence that she qualified
for any of the statutory exceptions, the bur-
den never shifted to the State to disprove an
exception, We therefore conclude that Castil-
lon’s insufficiency of evidence claim is with-
out merit,

C

In support of her claim that the statutory
exceptions were essential elements of the
DWOL offense, Castillon cites this court’s
decision in Matautia, 81 Hawai'i 76, 912 P.2d
578. In Matautia, we characterized proof that
“the defendant ... was not excepted by stat-
ute from the driver’s licencing require-
ments[,]” as an essential element of the
DWOL offense. Id. at 88, 912 P.2d at 580.
Our decision in Matautia, however, did not
focus on, and we were not called upon to
apply, the test for determining whether a
statutory exception is a defense to or an
element of an offense. Instead, we simply
characterized proof that the defendant did
not fall within the statutory exceptions as an
3, Although the District Court states, “I gotta ask

you again,” it had not previously asked Castillon

whether she waived her right to testify. The Dis-

247

essential element of the DWOL offense with-
out explaining how or why we reached this
conclusion.

Under similar circumstances, the supreme
court in Lee overruled a prior decision of this
court, which had suggested that the self-
insurance exception to the driving without
insurance offense was an element of, rather
than a defense to, the offense, because the
prior decision was “devoid of any explanation
of its suggestion in that regard.” Lee, 90
Hawai'i at 135, 187, 189, 976 P.2d at 449, 451,
458. Based on our analysis in this case, and
in accordance with the supreme court’s rea-
soning in Lee, we likewise overrule our char-
acterization in Matautia of the statutory ex-
ceptions to the DWOL offense as essential
elements of the offense.

8

HH Castillon argues on appeal that the
District Court failed to obtain a valid waiver
of her right to testify as required by Tachiba-
na. Castillon contends that the District Court
violated Tachibana in a number of ways,
including that it: (1) failed to advise her that
she had the right not to testify; (2) failed to
engage her in a “true colloquy”; and (8) failed
to obtain an on-the-record waiver of the right
to testify directly from Castillon. We con-
clude that the District Court violated Tachi-
bana by failing to obtain an on-the-record
waiver directly from Castillon, and that this
error was not harmless beyond a reasonable
doubt, Based on this conclusion, we need not
address Castillon’s claim that the District
Court violated Tachibana in other ways.

A
After the State rested its case-in-chief, the
District Court engaged in the following ex-
change with Castillon and her counsel:

THE COURT: ... Okay. So, Ms. Castil-
lon, I gotta ... ask you again—okay? @!

[CASTILLON]: Mm-hmm.

THE COURT:—that if you—you have a
right to testify. If you want to testify, no
one can prevent you from testifying. If you
choose to testify, the prosecutor can cross-
examine you. If you choose not to testify,
the Court cannot hold that against you.
trict Court was apparently referring to the pre-

trial advisement it gave to Castillon regarding
her testimonial rights. The District Court did not

248

You understand?
[CASTILLONI]: Yes.
THE COURT: Okay. So we both—
[DEFENSE COUNSEL]: And, your

Honor, Ms. Castillon—Ms. Castillon

doesn’t wanna—she doesn’t wish to testify,

your Honor.
THE COURT: Okay.

After defense counsel interjected and stat-
ed that Castillon did not want to testify, the
District Court accepted defense counsel’s
representation and did not obtain a response
on the record from Castillon. This was insuf-
ficient to satisfy Tachibana. See State v. Sta-
ley, 91 Hawai'i 275, 286-87, 982 P.2d 904, 915-
16 (1999).

B.

Hl In Tachibana, the Supreme Court
recognized that a defendant’s constitutional
right to testify is a personal constitutional
right that may not be waived by defense
counsel as a matter of trial strategy, but may
be relinquished only by the defendant. Tachi-
bana, 79 Hawai'i at 282, 900 P.2d at 1299.
One of the purposes of the Tachibana inquiry
is to ensure that the decision not to testify is
truly the decision of the defendant, and not
that of his or her attorney. In other words, to
ensure that the defendant's attorney does not
prevent a defendant who wants to testify
from exercising his or her right to testify.
Given the purpose of the Tachibana inquiry,
a representation by the defendant’s attorney
is not enough.

Hl In Staley, the Hawai'i Supreme Court
held that the trial court’s failure to obtain an
on-the-record waiver directly from Staley,
but instead relying on the representation of
Staley’s counsel that Staley would not be
testifying, violated Tachibana and did not
constitute a valid waiver of Staley’s right to
testify. Staley, 91 Hawai'i at 287, 982 P.2d at
916. Based on Staley, we conclude that the
District Court in this case did not obtain a
valid waiver from Castillon of her right to
testify. We further conclude that the District
Court’s error was not harmless beyond a
reasonable doubt. See State v. Hoang, 94
Hawai‘i 271, 279-80, 12 P.8d 871, 379-80 (App.
2000) (“In general, it is inherently difficult, if
not impossible, to divine what effect a viola~
tion of the defendant’s constitutional right to

ask Castillon at that time for a decision on

testify had on the outcome of any particular
ease.”), Accordingly, we vacate Castillon’s
DWOL conviction.

CONCLUSION

The statutory exceptions to the DWOL
offense constitute defenses to, and not essen-
tial elements of, the DWOL offense. The
State presented sufficient evidence at trial to
prove the DWOL charge against Castillon.
However, because the District Court did not
obtain a valid waiver of Castillon’s right to
testify as required by Tachibana, we vacate
the District Court’s Judgment and remand
the case for a new trial on the DWOL

charge.

398 P.3d 837
BANK OF AMERICA, N.A., Successor by
Merger to Bac Home Loans Servicing,
LP fka Countrywide Home Loans Ser-
vicing LP, Plaintiff-Appellee,
v.
Grisel REYES-TOLEDO, Defendant-
Appellant,
and
Wai Kaloi At Makakilo Community Asso-
ciation, Makakilo Community Associa-
tion, and Palehua Community Associa-
tion, Defendants-Appellees
and
John Does 1-50, Jane Does 1-50, DOE Part-
nerships 1-50, DOE Corporations 1-50,
DOE Entities 1-50, and DOE Govern-
mental Units 1-50, Defendants

NO. CAAP-15-0000005
Intermediate Court of Appeals of Hawaiti.
DATED: Honolulu, Hawaii, July 21, 2017.

APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIRCUIT (CIVIL NO, 12-
1-0668)

SUMMARY DISPOSITION ORDER
Vacated. Remanded.

whether she would be testifying.

i
398 P.3d 838
WELLS FARGO BANK, N.A. as Trustee
for Option One Mortgage Loan Trust
2007-4 Asset-Backed Certificates, Series
2007-4, Plaintiff-Appellant,
ve
Daniel Tsukasa OMIYA, Defendant/Cross-
Claimant-Appellee;,
and
Association of Apartment Owners of Ilikai
Apartment Building, Defendant/Cross-
Claim Defendant-Appellee,
and
John Does 1-20; Jane Does 1-20; DOE Part-
nerships 1-20; DOE Corporations 1-20,
and Does Governmental Units 1-20, De-
fendants
NO. CAAP-13-0000183
Intermediate Court of Appeals of Hawai'i.
DATED: Honolulu, Hawai'i, July 24, 2017.
APPEAL FROM THE CIRCUIT COURT

OF THE FIRST CIRCUIT (CIVIL NO. 10-
11-2845)

MEMORANDUM OPINION
Affirm.

Lt
398 P.3d 838

ASSOCIATION OF APARTMENT OWN-
ERS OF WAIPOULI BEACH RESORT,
THROUGH its BOARD OF ODI-
RECTORS, Plaintiff-Appellant,

vy.

UNLIMITED CONSTRUCTION SER-
VICES, INC.; Unlimited WBR, LLC;
Uponor, Inc.; Dorvin Leis Co., Inc; STO
Corp.; Group Builders, Inc., Defendants-
Appellees, and Does—1-100, Defendants

NO. CAAP-14-0000930
Intermediate Court of Appeals of Hawai‘.
DATED: Honolulu, Hawai‘, July 25, 2017.

APPEAL FROM THE CIRCUIT COURT
OF THE FIFTH CIRCUIT (CIVIL NO. 13-

249

1-0059)
Remanded.

Ly
398 P.3d 838
STATE of Hawai‘i, Plaintiff-Appellee,
v

William GERBERDING, Defendant-
Appellant.

NO. CAAP-16-0000844
Intermediate Court of Appeals of Hawai'i.
DATED: Honolulu, Hawai'i, July 31, 2017.

APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIRCUIT (CR. NO, 16-1-
0558)

SUMMARY DISPOSITION ORDER
Dismiss.

|
398 P.3d 838
Frank 0. LOHER, Petitioner-Appellant,
ve
STATE of Hawai‘i, Respondent-Appellee
NO. 29818
Intermediate Court of Appeals of Hawaii.
DATED: Honolulu, Hawai'i, July 31, 2017,

APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIRCUIT (SPECIAL
PROCEEDINGS PRISONER NO. 065-1-
0067; CRIMINAL NO, 99-1621)

SUMMARY DISPOSITION ORDER
Reversed.

250 [|

Ly
399 P.3d 802
STATE of Hawai‘i, Plaintiff-Appellee,
vy.

Carlotta A. CISNEROS, Defendant-
Appellant

NO, CAAP-16-0000592
Intermediate Court of Appeals of Hawai‘.
DATED: Honolulu, Hawaii, July 31, 2017.

APPEAL FROM THE DISTRICT
COURT OF THE FIRST CIRCUIT,
KANE’OHE DIVISION (1DTA-16-00585)

SUMMARY DISPOSITION ORDER

Affirmed,

399 P.3d 802
BANQUE DE TAHITI, A TAHITI
CORPORATION, Judgment
Creditor-Appellant,
v
Filola Tina KURTH, Personal Representa-
tive of the Estate of Thomas Christian
Kurth, Deceased, Judgment Debtor-Ap-
pellee
NO. CAAP-14-0000542
Intermediate Court of Appeals of Hawaii.

DATED: Honolulu, Hawaii, July 31, 2017.

MOUNTAIN

'
399 P.3d 802

KONA’S BEST NATURAL COFFEE LLC,

a Hawai‘i limited liability company,
Plaintiff/Counterclaim-Defendant/Ap-
pellant/Cross-Appellee,

ve
THUNDER COFFEE
PLANTATION INT’L, INC., a Hawai‘i
corporation, Trent Bateman and Lisa

Bateman, Defendants/Counterclaim-
ants/Appellees/Cross-Appellants,
and
Naturescape Holdings Group Int’l, Inc.,
Defendant/Appellee/Cross-
Appellant,
and

John Does 1-10, Jane Does 1-10, DOE
Partnerships 1-10, DOE Corporations
1-50, DOE Entities 1-50, Defendants.

Mountain Thunder Coffee Plantation Int’l

Ine., a Hawai‘i corporation, Trent Bate-
man; Lisa Bateman, Third-Party Plain-
tiffs/Appellees/ Cross-Appellees,

v

Michael Roberts and Brent Hight, Third-

Party Defendants/Appellants/Cross-
Appellees,

and

Marin Artukovich, Koa Coffee Company,
LLC; John Does 1-10; Jane Does 1-10;
DOE Corporations 1-50; DOE Entities 1-
50, Third-Party Defendants.

NO, CAAP-12-0000593.

Intermediate Court of Appeals of Hawaii.

APPEAL FROM THE CIRCUIT COURT DATED: Honolulu, Hawaii, August 2, 2017.

OF THE THIRD CIRCUIT (SP. NO, 03-1-
0045)

MEMORANDUM OPINION
Remanded.

APPEAL FROM THE CIRCUIT COURT
OF THE THIRD CIRCUIT (CIVIL NO. 08-
1-098K (Kona))

MEMORANDUM OPINION

Affirm.

399 P.3d 803
DEUTSCHE BANK NATIONAL TRUST
COMPANY, a National Banking Associ-
ation, as Trustee of the Indymac Indx
Mortgage Loan Trust 2006-AR12, Mort-
gage Pass-Through Certificates, Series
2006-AR12 Under the Pooling and Ser-
vieing Agreement Dated July 1, 2006,
Plaintiff-Appellee,
v
Ronald Pajela AMASOL and Jean Louise
Morales Amasol, Defendants-
Appellants
NO. CAAP-13-0000040

Intermediate Court of Appeals of Hawai'i,

DATED: Honolulu, Hawai‘,
August 11, 2017.
APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIRCUIT (CIVIL NO. 11-
1-2129)

251
SUMMARY DISPOSITION ORDER
Vacate. Remanded.

252

400 P.3d 453

STATE of Hawai‘i, Respondent/Plaintiff-
Appellee,

v

Raymond S. DAVIS,
Petitioner/Defendant-Appellant.

SCWC-12-0001121

Supreme Court of Hawai‘i.

MAY 15, 2017

Phyllis J. Hironaka for petitioner.

James M. Anderson, Honolulu, for respon-
dent.

McKENNA, POLLACK, AND WILSON,
JJ., AND RECKTENWALD, C.J,
DISSENTING, WITH WHOM
NAKAYAMA, J., JOINS

OPINION OF THE COURT BY
POLLACK, J.

This case concerns the admissibility of two
Intoxilyzer Supervisor’s Sworn Statements to
prove that the Intoxilyzer used to test Ray-
mond §. Davis’s breath aleohol content was
in proper working order. The State relied on
these out-of-court statements in establishing
the reliability of Davis’s breath alcohol test
results, which in turn served as a basis for
his conviction for the offense of operating a
vehicle under the influence of an intoxicant.
We consider whether the Intoxilyzer Super-
visor’s Sworn Statements were admissible
given the facts of this case under the Hawaii
Rules of Evidence.

I. BACKGROUND

The State of Hawaii filed a complaint in
the District Court of the First Cireuit (dis-
trict court), charging that, on March 8, 2012,
Raymond 8. Davis committed the offense of
Operating a Vehicle Under the Influence of
an Intoxicant (OVUID, in violation of Hawaii
Revised Statutes (HRS) § 291H-61(a)(1)
and/or (a)(8) (Supp. 2011).! At the commence-
ment of the bench trial? the State orally
arraigned Davis only under HRS § 291H-
61(a)(8) for operating or assuming actual
physical control of a vehicle upon a public
way, street, road, or highway with .08 or
more grams of alcohol per 210 liters of
breath. Davis entered a plea of not guilty to
the charge.

1, HRS § 291E-61(a) provides in relevant part:
A person commits the offense of operating a
vehicle under the influence of an intoxicant if
the person operates or assumes actual physical
control of a vehicle:
(1) While under the influence of alcohol in
an amount sufficient to impair the person’s
normal mental faculties or ability to care for
the person and guard against casualty; [or]

253

The State’s first witness was Officer Rus-
sell Maeshiro, who testified that on March 8,
2012, around 2:10 a.m., he stopped Davis’s
car after observing Davis weave in and out of
marked lanes without using his blinkers or
hand signals. Officer Maeshiro approached
the driver’s side of the vehicle and observed
that Davis had red, bloodshot, glassy eyes
and noted that Davis spoke with an apparent
slight slur. The officer stated that he asked
Davis to complete a field sobriety test after
smelling the odor of an alcoholic beverage
coming from the interior of Davis’s car. At
this point in the testimony, Davis stipulated
that, based on Officer Maeshiro’s observa-
tions, the officer had reasonable suspicion to
stop Davis and probable cause to arrest him
for OVUII.

Officer Kimberly Ann Chaney testified
that she transported Davis from the location
of the stop to the Kalihi police station. Offi-
cer Chaney related that she informed Davis
of the implied consent law by reading him
form HPD-396K.? After Davis elected to take
a breath test, Officer Chaney testified that
she turned on the Intoxilyzer 8000, identified
as serial number 80-003486 (Intoxilyzer), and
that the machine proceeded to conduct and
pass an internal self-check.

After questioning Officer Chaney regard-
ing the internal self-check, the State asked
whether “based on [Officer Chaney’s] train-
ing and experience in operating the Intoxilyz-
er 8000,” the instrument “appearfed] to be
operating properly and accurately on the
date in question.” Before Officer Chaney re-
sponded, the State showed to defense counsel
two Intoxilyzer 8000 Accuracy Test Supervi-
sor’s Sworn Statements, dated February 29,
2012, and March 16, 2012 (Sworn Statements
1 and 2, respectively). The State, however,
asked no questions of Officer Chaney regard-
ing Sworn Statements 1 and 2. Rather, the
State informed the court that Sworn State-

(3) With .08 or more grams of alcohol per
two hundred ten liters of breath...
HRS § 291E-61(a) (Supp. 2011).

2, The Honorable Shirley Kawamura presided.
3. Davis has not challenged the validity of his

consent to take the breath test. See State v. Won,
137 Hawai'i 330, 372 P.3d 1065 (2015).

254

ments 1 and 2 “show[ed] that the instrument
was working properly” and that it sought to
admit the documents into evidence as proof
of the Intoxilyzer’s condition and accuracy.

The top half of Sworn Statements 1 and 2
includes a machine printout of the calibration
testing data from the Intoxilyzer. The bottom
half of Sworn Statements 1 and 2 includes a
pre-printed text block in which a person by
the name of Woo Kang is identified as the
Intoxilyzer supervisor. As to the machine
printout of the calibration testing data, there
is a table listing the following information in
this order: (1) air blank; (2) simulator temp-
erature; (8) reference sample #1; (4) air
blank; (6) air blank; (6) simulator tempera-
ture; (7) reference sample # 2; (8) air blank;
(9) ITP check; and (10) air blank. Next to
each category of information, except the sim-
ulator temperatures, is a data entry based on.
“g/210L, BrAC.” 4 Next to each data entry is
a time stamp.

The pre-printed text block located in the
bottom half of Sworn Statements 1 and 2
contains the following statement:

I, Woo KANG, swear that the aforemen-

tioned information is true and correct and

that I am a duly licensed Intoxilyzer 8000

supervisor trained to maintain and per-

form accuracy tests on the Intoxilyzer

8000. The Intoxilyzer 8000 is a breath alco-

hol testing instrument approved for use in

the State of Hawaii pursuant to section

821-161 of the Hawaii Revised Statutes as

amended. The Intoxilyzer was operating

accurately in compliance with the State of

Hawaii Department of Health Administra-

tive Rules, Title Eleven, Chapter 114-7, on

the date indicated below, when I conducted
the accuracy test recorded on this docu-
ment,
Below this pre-printed language are the date,
Woo Kang’s signature, and his license num-
ber and its expiration date.

Davis objected to Sworn Statements 1 and
2 being entered into evidence based upon,
inter alia: (1) lack of foundation; (2) hearsay;
and (8) hearsay within hearsay. Davis argued
that Sworn Statements 1 and 2 did not sub-
4, It appears that “g/210L BrAC” denotes a meas-

urement of alcohol concentration, which Hawai'i
Administrative Rules (HAR) § 11-114-4 defines

stantively comply with the requirements of
Hawaii Rules of Evidence (HRE) Rule
808(b)(6) (1998 & Supp. 2002), which is the
hearsay exception for records of regularly
conducted activity (ie. business records).
Further, Davis maintained that without more
information or testimony as to Sworn State-
ments 1 and 2, the data printout reflecting
the calibration test results was meaningless
to the court; he noted, for example, that
there was no evidence presented as to what
known reference samples were used in the
calibration testing and what their “target
values” or output should have been in the
machine’s data printout, Additionally, Davis
contended that there was no information pre-
sented as to the specifics of the calibration
procedure performed by Kang, which appar-
ently differed from the Intoxilyzer’s internal
self-check. Davis also objected to the admis-
sion of Sworn Statements 1 and 2 into evi-
dence under the public records exception.
Davis argued that Sworn Statements 1 and 2
lacked reliability on their face because the
State failed to present the circumstances of
how the information was obtained, given that
Kang did not testify at trial.

The State contended that there was suffi-
cient legal basis under HRE Rule 808(b)(8)
(1998 & Supp. 2002) for the admission of
Sworn Statements 1 and 2 into evidence be-
cause they were public records made in the
course of a regularly conducted activity. The
State maintained that each document was a
self-authenticating copy of the original log,
which was kept in the custody of the Honolu-
lu Police Department (HPD), a public office,
and that each document contained a data
compilation, The State further argued that
the criteria for admitting Sworn Statements
1 and 2 into evidence were met because each
document, on its face, complied with the re-
quirements prescribed in the Hawai'i Admin-
istrative Rules (HAR), and each document
indicated that the Intoxilyzer was “operating
accurately” when calibrated. The State main-
tained that the district court did not need to
look at the data printout set forth in Sworn
Statements 1 and 2 to determine whether or

as “grams of alcohol per two hundred ten liters
of breath.” See HAR § 11-114-4 (1993).

not the device was operating accurately be-
cause Kang swore that the machine was op-
erating accurately in compliance with the
HAR.

Over the defense’s objection, the district
court received into evidence Sworn State-
ments 1 and 2.5 The district court, also over
objection, admitted into evidence the March
8, 2012 Sworn Statement of Intoxilyzer Oper-
ator (Operator Statement), which indicated
that the breath aleohol content measured by
the Intoxilyzer for Davis was .189 grams of
alcohol per 210 liters of breath,

Based on the evidence presented, the dis-
trict court concluded that the State met the
three foundational requirements to show that
Davis's breath test results could be relied on
as substantive evidence: (1) the Intoxilyzer
was in proper working order; (2) its operator
was qualified; and (8) the test was properly
administered. The court also determined that,
the State showed strict compliance with the
requirements of the HAR. Consequently, the
district court concluded that the State proved
beyond a reasonable doubt that Davis had .08
or more grams of alcohol per 210 liters of
breath at the time he was driving on March
8, 2012. Accordingly, the district court found
Davis guilty of the offense charged and en-
tered its Order and Notice of Entry of Order
on November 29, 2012,

Davis appealed to the Intermediate Court
of Appeals (ICA), challenging the district
court’s admission of Sworn Statements 1 and
2 into evidence on the grounds that they did

5. The district court did not expressly indicate on
what basis it was admitting Sworn Statements 1
and 2 into evidence, but it appears that the
court's ruling was based on HRE Rules 902(4)
(1993 & Supp. 2002), 1005 (1993), and 803(b)(8)
(1993 & Supp. 2002).

6, Davis also contended that Sworn Statements 1
and 2 were inadmissible because both documents
‘were meaningless and irrelevant due to the ab-
sence of essential information and because their
admission violated his confrontation rights under
the Hawai'i Constitution.

7, HAR§ 11-114-12 provides,
(a) Records shall be kept and maintained at
the direction of a supervisor.
(b) Records shall include information on:

@) ; Accuracy tests;

255

not meet the foundational requirements and
failed to comply with the requirements of the
Jusiness records exception.’ Davis noted that
he had objected at trial to the admission of
Sworn Statements 1 and 2 under the Hawaii
Rules of Evidence as inadmissible hearsay.
Davis further contended that because the
district court erred in admitting Sworn
Statements 1 and 2, the State failed to pres-
ent any evidence that the Intoxilyzer used to
test his breath alcohol content was in proper
working order and thus failed to lay a proper
foundation for the admission of his breath
test results, In response, the State main-
tained that the district court properly admit-
ted Sworn Statements 1 and 2 into evidence
as public records under HRE Rule 803(b)(8).
The State therefore argued that the district.
court did not err in admitting Davis’s breath
test results into evidence.

In a Summary Disposition Order, the ICA
ruled that the district court did not err by
admitting Sworn Statements 1 and 2 into
evidence because they were admissible as
self-authenticating public records under
HRE Rules 803(b)(8) and 902(4). The ICA
reasoned that because Intoxilyzer calibration
tests by the HPD are required, pursuant to
HAR § 11-114-12,7 to be kept and main-
tained by the Intoxilyzer supervisor for at
least three years, Sworn Statements 1 and 2
are public records or reports of a public
agency and, therefore, an exception to hear-
say within the meaning of HRE Rule
808(b)(8).8 Accordingly, the ICA affirmed the

{c) Records maintained pursuant to subsec-
tion (a) shall be retained by the jurisdiction for
at least three years.

HAR § 11-114-12 (1993).

8. The ICA also concluded that Davis’s objection
for lack of foundation was without merit and
noted that Davis's objection based on relevance
was waived pursuant to Hawai'i Rules of Appel-
late Procedure Rule 28(6)(4), In the alternative,
with regard to the relevancy argument, the ICA
indicated that because Sworn Statements 1 and 2
state that “[tJhe Intoxilyzer was operating accu-
rately in compliance with the State of Hawai'i
Department of Health Administrative Rules, Title
Eleven, Chapter 114-7,” these documents were
relevant to demonstrate that the Intoxilyzer was
working properly during Davis's breath test on
March 3, 2012.

256 Le

district court's Order and Notice of Entry of
Order entered on November 29, 2012.

Il, STANDARDS OF REVIEW

Hl “When application of a particular evi-
dentiary rule can yield only one correct re-
sult, the proper standard for appellate review
is the right/wrong standard.” State _v. Jhun,
83 Hawai'i 472, 477, 927 P.2d 1355, 1360
(1996) (quoting Kealoha v. Cty, of Hawaiti, 74
Haw. 808, 819-20, 844 P.2d 670, 676 (1998)).
However, in cases where the rules of evi-
dence require a “judgment call” by the trial
court, “the traditional abuse of discretion
standard should be applied.” Id. Thus, in
Jhun, in reviewing the trial court’s ruling
with respect to hearsay and HRE Rule
808(b)(8), this court applied the right/wrong
standard because the trial court did not have
to make a “judgment call” when it deter-
mined that the proffered evidence failed to
qualify under the public records exception, as
the report did not set forth factual findings
resulting from an investigation. Id. at 477-81,
927 P.2d at 1360-64.

Il. DISCUSSION

In his Application for Writ of Certiorari,
Davis contends that the ICA erred in con-
cluding that the district court properly ad-
mitted into evidence Sworn Statements 1 and
2 under the Hawaii Rules of Evidence.’ Davis
maintains that because Sworn Statements 1
and 2 were improperly admitted, evidence of
his breath alcohol content obtained from the
Intoxilyzer was also improperly received and
thus there was insufficient evidence to sup-
port his OVUII conviction.

Hl In State y. Thompson, 72 Haw. 262,
814 P.2d 393 (1991), this court noted that to
admit a specific Intoxilyzer breath alcohol
test result into evidence, the prosecution

9, Davis also challenges the admissibility of
Sworn Statements 1 and 2 based on lack of
relevance, lack of trustworthiness, and a viola-
tion of his confrontation rights under the Hawai'i
Constitution, In light of our disposition of this
case, it is not necessary to address these argu-
ments.

10. Title 11, chapter 114 of the HAR provides the
relevant rules and regulations for the “Testing of
Blood, Breath, and Other Bodily Substances for

must lay a proper foundation “to establish
the accuracy of the alcohol concentrations
used in breath tests.” Id. at 263, 814 P.2d at
394, The foundation must show that “(1) the
intoxilyzer was in proper working order; (2)
its operator was qualified; and (8) the test
‘was properly administered.” Id. at 263, 814
P.2d at 394-95 (quoting State v. Souza, 6
Haw. App. 554, 558, 782 P.2d 253, 257 (1987).
This foundation is necessary to prove the
reliability of the test result that establishes
intoxication before the test result can be
relied on as a substantive fact. Souza, 6
Haw.App. at 558, 732 P.2d at 256,

Hl “(lin meeting the foundational pre-
requisites for the admission of the Intoxilyz-
er test result[,] there must be a showing of
strict compliance with those provisions of the
[Hawai'i Administrative] Rules [governing
the testing of blood, breath, and other bodily
substances for aleohol concentration] which
have a direct bearing on the validity and
accuracy of the test result.” 1° State v. Kem-
per, 80 Hawai'i 102, 105, 905 P.2d 77, 80
(App. 1995) (quoting State v. Matsuda, 9
Haw.App. 291, 298, 836 P.2d 506, 508 (1992).
This includes establishing that the calibration
procedure used to test the accuracy of the
Intoxilyzer strictly complied with the HAR
because the calibration test has a “direct
bearing on the validity and accuracy of the
test result obtained from that Intoxilyzer.”
Souza, 6 Haw.App. at 562, 782 P.2d at 259.
Accordingly, in order “to fulfill the founda-
tional prerequisites of admissibility’ of the
test result in this case, the State was re-
quired to show that the Intoxilyzer calibra-
tion test, which has a direct bearing on the
validity and accuracy of Davis’s breath test
result, was in compliance with HAR § il-
114-7" and was therefore in proper working
order on the calibration testing dates. See id.

Alcohol Concentration.” It applies to “individu-
als or laboratories who collect samples for or
conduct forensic alcohol testing for the purpose
of introduction of the alcohol test results into
evidence in ... criminal proceedings under ap-
plicable State driving under the influence of alco-
hol statutes.” HAR § 11-114-1(b) (1993).

11, HAR§ 11-114-7 provides the following:
(a) Every accuracy test procedure shall be
approved by the DUI coordinator in writing and

A. Admissibility under Public Records
Exception, HRE Rule 803(b)(8)

The State contended at trial, and the ICA
agreed, that Sworn Statements 1 and 2 were
admissible public records under HRE Rule
803(b)(8) (1998 & Supp. 2002) and thus dem-
onstrated that the Intoxilyzer was in proper
working order on the dates of the calibration
testing.

i. Analysis of “Matters Observed,”
HRE Rule 803(b)(8)(B)

HRE Rule 803(b)(8) sets forth the public
records hearsay exception:
Records, reports, statements, or data com-
pilations, in any form, of public offices or
agencies, setting forth (A) the activities of
the office or agency, or (B) matters ob-
served pursuant to duty imposed by law as
to which matters there was a duty to re-
port, excluding, however, in criminal cases
matters observed by police officers and
other law enforcement personnel, or (C) in
civil proceedings and against the govern-
ment in criminal cases, factual findings
resulting from an investigation made pur-
suant to authority granted by law, unless
the sources of information or other cireum-
stances indicate lack of trustworthiness,
HRE Rule 808(b)(8) (1993 & Supp. 2002).
Thus, the public records exception to the
hearsay rule allows for the admission of

shall include, but not be limited to the following
requirements:
(1) The test shall be conducted by a super-
visor;
(2) At least two different reference samples
and an air blank shall be run with each
accuracy test;
(3) Reference samples shall be chosen so
that their target values are not less than
0.04gm alcohol/210 liters and not greater
than 0.25gm alcohol/210 liters;
(4) Reference sample target values shall
differ from each other by at least 0.04gm
alcohol/210 liters;
(5) Reference sample test results which
vary from the target value by more than plus
or minus 0.0/gm alcohol/210 liters or plus or
minus ten percent, whichever is greater,

shall be cause for the breath alcohol testing _

instrument used to be removed from service
until the fault has been corrected; and

(©) An accuracy test shall be performed on
an operating instrument at intervals not to
exceed thirty-one days.

257

records, reports, statements, or data compi-
lations, in any form, of public offices or
agencies if those documents contain certain
categories of information and meet other re-
quirements of this hearsay exception. Id.
Under HRE Rule 808(b)(8)(B), a public ree-
ord may be admissible if it sets forth “mat-
ters observed pursuant to a duty imposed
by law as to which there was a duty to
report.” A record or report will not be ad-
missible under the public records exception,
however, if it falls within the exclusion
clause of HRE Rule 803(b)(8)(B), which pro-
hibits the admission in criminal cases of
“matters observed by police officers and
other law enforcement personnel.” Id.

Therefore, determining whether proffered
hearsay evidence falls within HRE Rule
803(b)(8)(B) requires a two-part inquiry.
First, the proponent of the evidence must
establish that the record or report presents
“matters observed” and that there existed a
duty to make and report the observations, Id.
Second, the proffered evidence must not fall
within the criminal case exclusion clause as a
matter observed by law enforcement person-
nel.!8 Td.; see also Addison M. Bowman, Ha-
‘waii Rules of Evidence Manual § 808-3[8][D],
at 8-44 (2016-2017 ed.).

As to the first inquiry, the phrase “matters
observed” “could reach virtually everything,
but apparently it was intended to have [a]

HAR § 11-114-7 (1993).

12. At oral argument, counsel for the State main-
tained that Sworn Statements 1 and 2 would not
be admissible hearsay under the public records
exception, but that they would instead be admis-
sible under the business records exception. See
Oral Argument at 20:10-26, 23:25-58, State v.
Davis, SCWC-12-0001121 (argued Dec. 17,
3015), http://oaoa. hawaii. gov/jud/oa/15/
SCOA_121715_scwc12_1121.mp3. In response to
a question by the court, counsel changed his
position and argued that the public records ex-
ception would be a basis for admitting Sworn
Statements 1 and 2 into evidence. Id.

13. Because we conclude below that Kang’s state-
ment in the bottom half of Sworn Statements 1
and 2 does not constitute a “matter observed,”
we need not reach the issue of whether Sworn
Statements 1 and 2 fall within the public records
exclusion for criminal cases as matters observed
by law enforcement personnel. See HRE Rule
803(b)(8)(B).

258

narrower meaning.” Christopher B. Mueller
& Laird C. Kirkpatrick, Evidence § 8.50, at
910 (6th ed, 2012), That is, the term “matters
observed” narrows the coverage of subsec-
tion (B) “to information that is concrete and
simple in nature,” rather than encompassing
all “records describing an almost endless va-
riety of acts, events, and conditions in the
world observed and depicted by public offi-
cials.” Id, at 910, Indeed, “matters observed”
are “routine recordations not resulting from
analysis or judgment” and do not encompass
“conclusions, opinions, and evaluative find-
ings.” Bowman, supra, § 808-3[8][D], at 8-44
(emphasis added); see also Pool v, Wade, 115
Ohio App.3d 449, 685 N.E.2d 791, 798 (1996)
(analyzing “matters observed” subsection of
similar Ohio public records exception and
stating that “{nJotably, the Rule does not
include records, or portions of records, that
may be characterized as ‘evaluations’ or ‘in-
terpretations’ of ... events or transactions.”
(quoting Weissenberger’s Ohio Evidence
§ 808.105, at 409 (1996))),

Examples of data or information compila-
tions that do constitute “matters observed”
include official weather observations, Village
of Evanston y. Gunn, 99 U.S. 660, 666-67, 25
L.Ed, 806 (1878) (meteorological observations
by U.S. Signal Service); judgments or orders
of the court, State v. Samonte, 83 Hawai‘i
507, 588, 928 P.2d 1, 32 (1996) (court record
of judgment of conviction); a Coast Guard
description of a damaged buoy, United States
vy. Tug Otto, 296 F.Supp. 1130, 1133 (S.D.
Tex. 1967) (record of the board of survey
finding that the buoy was damaged beyond
economic repair admissible because “[nJo
particular degree of expertise would be re-
quired to make a determination if a particu-
Jar buoy were damaged beyond economic

14, The federal public records hearsay exception
is codified at Federal Rules of Evidence (FRE)
803(8) and provides in relevant part:

(8) Public Records. A record or statement of
a public office if
(A) it sets out:
(i) the office's activities;
Gi) a matter observed while under a legal
duty to report, but not including, in a crimi-
nal case, a matter observed by law-enforce-
ment persomnel; or
(ii) in a civil case or against the govern-
ment in a criminal case, factual findings
from a legally authorized investigation; and

repair”); reports detailing observed condi-
tions at institutional facilities, Schwartzberg
vy. Califano, 458 F.Supp. 1042, 1046 (S.D.N.Y.
1978) (U.S. Department of Health, Edu-
cation, and Welfare report recounting obser-
vations of nursing home and health facility);
and “observations in an accident report that
describe the scene and equipment and report
conerete measurements and easily observa-
ble damage or destruction,” Mueller & Kirk-
patrick, supra, § 8.50, at 911.

ii. Comparison to “Factual Findings,”
HRE Rule 803(b)(8)(C)

Comparing the term “matters observed”
within subsection (B) of HRE Rule 808(b)(8)
and the term “factual findings” within sub-
section (C) further demonstrates the for-
mer’s limited scope. “Factual findings from
an investigation” admissible under HRE
Rule 808(b)(8)(C)’s federal counterpart “
have been interpreted by the United States
Supreme Court to include “conclusions or
opinions that flow from a factual investiga-
tion.” See Beech Aircraft Corp. v. Rainey,
488 U.S. 158, 164, 109 S.Ct, 439, 102 L.Ed.2d
445 (1988); see also State v. Jhun, 83 Hawai'i
472, 481, 927 P.2d 1855, 1864 (1996) (noting
that “independent conclusions or opinions”
may be admissible as “factual findings” un-
der HRE Rule 803(b)(8)(C)). Notably, the
legislative history of the federal public rec-
ords exception suggests that its drafters en-
visioned the “factual findings” subsection—
rather than the “matters observed” or “activ-
ities of an office or agency” subsections—as
providing the gateway for admission of “eval-
uative reports” that would otherwise consti-
tute hearsay. See Beech Aircraft Corp., 488
US, at 164-67, 109 S.Ct, 489 (discussing leg-

(B) the opponent does not show that the
source of information or other circumstances
indicate a lack of trustworthiness.

FRE 803(8) (2014),

“Although cases interpreting provisions in the
Federal Rules of Evidence are of course not
binding on us, we may refer to them for their
persuasive authority in interpreting similar pro-
visions of the Hawaii Rules of Evidence,” State
y, Jhun, 83 Hawai'i 472, 478, 927 P.2d 1355,
1361 (1996),

islative history of FRE 808(8)(A)(ili) and de-
termining that the Advisory Committee
“surely” intended that “factual findings” sub-
section would allow for admission of “evalu-
ative reports”).

In keeping with this distinction, the term
“matters observed” within the federal public
records exception has been interpreted as
excluding evaluative findings and opinions,
See Baker v. Elcona Homes Corp., 588 F.2d
551, 556-57 (6th Cir. 1978). In Baker, a defen-
dant in a vehicular negligence lawsuit sought
to introduce a police accident report to settle
the disputed fact of whether a traffic light
was red or green at the time of an accident,
Id, at 555. The police report included (1) the
responding officer’s visual description of the
accident scene upon arrival, including meas-
urements and physical markings, (2) a tran-
script of the officer’s subsequent interview
with one of the parties, (8) a notation that
“apparently unit #2 (the Valiant) entered the
intersection against a red light,” and (4) nota-
tions that “unit #2” failed to yield the right-
of-way and that both drivers were “preoccu-
pied.” Id. at 554-55. The police report was
admitted into evidence over the plaintiffs
hearsay objection. Id. at 555, On appeal, the
Sixth Cireuit Court of Appeals determined
that the “matters observed” and “factual
findings” subsections of FRE 808(8) were
applicable, Id. at 555-56, The Court of Ap-
peals first concluded that “the direct obser-
vations and recorded data” of the responding
officer “clearly” constituted “matters ob-
served” within the meaning of FRE
808(8)(A)Gi). Id. at 556. The Sixth Circuit's
“principal concerns,” however, related to, in-
ter alia, whether the traffic light and fault
notations were properly admissible under ei-
ther the “matters observed” or “factual find-
ings” subsections. Id. The Court of Appeals
eoneluded that the traffic light and fault no-
tations were more appropriately character-
ized as “factual findings” falling under FRE
803(8)(A)Gii), because they related to “wheth-
er the light was red or green for one driver

15. The machine printout of the calibration test-
ing data included within the top half of Sworn
Statements 1 and 2 may constitute a collection of
“routine recordations”’ qualifying as ‘matters ob-
served” within the meaning of HRE Rulo
803(6)(8)(B). Bowman, supra, § 803-3[8][D], at

259

or the other at the time of the accident.” Id,
at 557, In so deciding, the Sixth Circuit made
the following distinction between the “mat-
ters observed” and “factual findings” subsec-
tions:
Applying the rule and its background to
the facts here, it is apparent that whether
the light was red or green for one driver
or the other at the time of the accident is
distinctly a factual finding within the
meaning of the rule.... It is also clear
from the construction of the rule itself that
factual findings admissible under Rule
803(8)f (A)(iii) ] may be those which are
made by the preparer of the report from
disputed evidence, as contrasted to those
facts which are “matters observed pursu-
ant to duty imposed by law as to which
matters there was a duty to report” called
for under Rule 803(8)f (A)(ii) ].
Id, at 557-58. Thus, the court considered that
the “matters observed” subsection of the
public records exception encompassed the
“direct observations and recorded data” in-
cluded by the officer in his accident report,
whereas the “factual findings” subsection ap-
plied to conclusions or evaluations (ie,
whether the light was red or green at the
time of the accident) based on those observa-
tions or data. Id.; see also Bradbury v. Ford
Motor Co. 419 Mich. 550, 358 N.W.2d 550,
552 (1984) (noting the distinction between the
“concepts” in the “matters observed” and
“factual findings” subsections of the public
records hearsay exception),

II Im this case, to meet the require-
ments under HRE Rule 803(b)(8)(B), Kang’s
statement in the bottom half of Sworn State-
ments 1 and 2 that the “Intoxilyzer was
operating accurately” must constitute a “mat-
terl]  observed.”"* See HRE Rule
808(b)(8)(B). In his sworn statement, Kang
indicated that he was a “duly licensed Intoxi-
lyzer 8000 supervisor trained to maintain and
perform accuracy tests on the Intoxilyzer
8000.” Indeed, HAR § 11-114-7 requires that
an Intoxilyzer supervisor conduct the calibra-

8-44, Because this court concludes that the
sworn statement of Kang included within the
bottom half of Sworn Statements 1 and 2 does
not constitute a “matter observed," we do not
analyze HRE Rule 803(6)(8)(B) with respect to
the testing data.

260 [|

tion tests, and HAR § 11-114-9" prescribes
the training and licensing requirements for
Intoxilyzer supervisors. Thus, based on the
record and the qualification requirements for
Intoxilyzer supervisors, Kang was required
to have specialized knowledge, experience,
and training in Intoxilyzer calibration test-
ing. Kang’s sworn statement that the “Intoxi-
lyzer was operating accurately” was based
upon his technical analysis of the data includ-
ed within the top half of Sworn Statements 1
and 2, which he collected in conducting the
Intoxilyzer calibration tests. Therefore,
Kang’s sworn statement that the “Intoxilyzer
was operating accurately” is an expert con-
clusion based on his technical proficiency in
Intoxilyzer calibration testing.

Kang’s conclusion that the Intoxilyzer was
functioning accurately is similar to the re-
sponding officer’s conclusion in Baker that a
driver ran a red light and was at fault for a
resulting accident. 588 F.2d at 556-57. The
responding officer in Baker gathered data by
observing the physical circumstances of the
accident scene and conducting other investi-
gative measures; then, based on that data,
the officer made a conclusion that the light
was red at the time of the accident. Id. at
554-55. Here, Kang gathered data by con-

16. HAR§ 11-114-9 provides in relevant part:

(b) No person shall serve as a supervisor
without a valid license issued by the DUI coor-
dinator or the chief of police.

(c)_ A supervisor may practice only in the
jurisdiction designated on the license.

(© A supervisor's license shall be effective
for three years from date of issuance unless
revoked by the issuer.

(h) Training programs for supervisors shall:

(1) Be conducted either by the DUI coordi-
nator, the chief of police, the chief's represen-
tative(s) or, with the written approval of the
DUI coordinator or the chief of police, by a
representative(s) of the manufacturer of the
breath alcohol testing instrument;

(2) Consist of a minimum of eight hours;
and

(3) Be approved in writing by the DUI
coordinator except as provided in subsection

OM.
HAR § 11-114-9 (1993).

17, The dissent seeks to distinguish Baker by de-
scribing Sworn Statements 1 and 2 as “routine
determination{s] that a piece of equipment works
properly,” or alternatively, as “record{s] of the

ducting calibration testing on the Intoxilyzer;
then, based on the data he recorded in the
top half of Sworn Statements 1 and 2 and
using his training and specialized knowledge,
he rendered a conclusion that the Intoxilyzer
was functioning accurately and included this
conclusion in the bottom half of Sworn State-
ments 1 and 2.

As in Baker, Kang’s interpretive conclu-
sion cannot be characterized as a “matter
observed” because it is not a “direct observa-
tion,” a “routine recordation,” or “recorded
data” reflecting observations that are con-
crete and simple. 588 F.2d at 556; Bowman,
supra, § 803-8[8][D], at 8-44. Kang’s conclu-
sion therefore does not constitute a “matter
observed.” 17 Accordingly, the ICA and the
district court erred in admitting Sworn
Statements 1 and 2 into evidence as public
records under HRE Rule 803(b)(8)(B).8

iii, State v. Ofa Does Not Provide
for a Different Result

The dissenting opinion relies primarily on
an ICA decision, State _v. Ofa, 9 Haw.App.
180, 828 P.2d 813 (1992), in support of its
position. Initially, it is noted that the disposi-
tive issue in Ofa was whether the State’s
failure to include the known temperature of

direct observations of the Intoxilyzer supervisor”
and thus “plainly ... ‘matter[s] observed.’ ”” Dis-
sent at 267, 268, 400 P.3d at 468, 469. Even
assuming Kang’s testing of the Intoxilyzer may
be characterized as “routine” in the sense that
HAR § 11-114-7(6) requires that such equipment
be tested for accuracy by a qualified professional
“at intervals not to exceed thirty-one days,”
Kang’s statement as set forth in the bottom half
of Sworn Statements 1 and 2 is not a “direct
observation{]” or simple “determination that a
piece of equipment works properly.” Dissent at
267, 268, 400 P.3d at 468, 469. Rather, for the
reasons described above, the statement reflects
an evaluative opinion that was based on Kang’s
specialized knowledge of Intoxilyzer calibration
procedures. See HAR § 11-114-7(6) (1993), su-
pra note 11,

18. Kang’s conclusion contained in Sworn State-
ments | and 2 is not admissible under HRE Rule
803(b)(8)(C) as a “factual finding[] resulting
from an investigation made pursuant to authority
granted by law” because HRE Rule 803(b)(8)(C)
is restricted in criminal cases to use only against
the government and thus may not be used
against Davis in this case. HRE Rule
803(b)(8)(C); see_also Jhun, 83 Hawai'i at 477,
927 P.2d at 1360 (quoting same).

the solutions used to test an Intoxilyzer ren-
dered the resulting calibration tests insuffi-
cient to lay a foundation for Ofa’s breath test
results. Id, at 189, 828 P.2d at 818. The ICA
answered this question in the affirmative and
reversed Ofa’s conviction on that basis alone.
Id. at 141, 828 P.2d at 820. As such, the
ICA’s other rulings in the case are dicta,
Although one of those rulings addressed
whether a log book was admissible under
HRE Rule 803(b)(8)(B), it is not contrary to
our decision in this case,

In Ofa, the defendant was charged with
driving under the influence of intoxicating
liquor. Id. at 182, 828 P.2d at 815. At trial,
the State sought to introduce evidence of the
defendant’s Intoxilyzer breath test result. Id.
at 188, 828 P.2d at 816, As foundational
evidence that the relevant Intoxilyzer was
functioning accurately on the date that the
breath test was administered, the State of-
fered into evidence a copy of a page of a “log
book” (Log) maintained by HPD. Id. at 182-
88, 828 P.2d at 815-16. HPD criminalist Gil-
bert Chang, a certified Intoxilyzer operator-
supervisor, testified that “certified operator-
supervisors periodically test or calibrate the
HPD’s intoxilyzers for accuracy’ and that
“the date and results of the testing for accu-
racy” were entered into the Log. Id, Chang
testified that the initials “JW” appearing on
the Log signified that John Wadahara “had
tested the Intoxilyzer for accuracy on [the
noted] dates.” Id, at 188, 828 P.2d at 816.

19. The Ofa opinion provides no additional infor-
mation on the contents of the Log. 9 Haw.App. at
133, 828 P.2d at 815. The ICA noted that Wada-
hara did not testify in the case. Id. at 133, 828
P.2d at 816.

20. In determining whether the Log fell within
the exclusion clause, the ICA discussed the Log's
nonadversarial and trustworthy nature. Ofa, 9
Haw.App. at 136, 828 P.2d at 817. As in Ofa,
issues of the adversarial nature or trustworthi-
ness of evidence proffered under the “matters
observed” subsection of the public records hear-
say exception often arise under this second part
of the inquiry rather than the rule’s definitional
clause. See, ¢.g., United States v. Wilmer, 799
F.2d 495, 500-01 (Sth Cir. 1986) (concluding that
“maintenance operator’s calibration report” of
breathalyzer machine did not fall within exclu-
sion clause because it was a routine act of a
nonadversarial nature); United States v. Hernan-
dez-Rojas, 617 F.2d 533, 534-35 (9th Cir. 1980)
(concluding that deportation warrant with signed

261

Chang further testified that “the Log indicat-
ed that the Intoxilyzer was operating accu-
rately on May 81 and June 28, 1990.” Id.

Over the defendant’s objection, the trial
court admitted the Log as a public record
under HRE Rule 803(b)(8)(B). Id. at 135, 828
P.2d at 816. Ofa raised several issues in
appealing his subsequent conviction, includ-
ing that the Log constituted hearsay and that
the trial court erred in admitting it into
evidence. Id. at 184, 828 P.2d at 816.

The ICA concluded that “the only issue”
on appeal with respect to the admissibility of
the Log was “whether the Log [was] excluda-
ble from the public records and reports ex-
ception to the hearsay rule as ‘matters ob-
served by ... law enforcement personnel’ in
a criminal case.” Id. at 135, 828 P.2d at 817.
Thereafter, the ICA devoted its analysis to
the issue of whether the Log fell within HRE
Rule 808(b)(8)(B)’s exclusion clause.” Id, at
185-187, 828 P.2d at 817, There was no dis-
eussion with respect to the first step of the
inquiry under HRE Rule 808(b)(8)(B) re-
garding whether the Log’s contents consti-
tuted “matters observed.” Id. Accordingly,
Ofa does not speak to the issue in this ap-
peal—whether evaluative opinions and analy-
ses constitute “matters observed.”

In this case, the State sought to lay a
foundation for Davis’s breath test results
through a document that contained both data

and dated notation “deported to Mexico, Calexi-
co, California” did not fall within exclusion
clause because it was a “ministerial, objective
observation”),

21. Thus, neither the holding nor the reasoning of
Ofa is “directly applicable to this case,” dissent
at 267, 400 P.3d at 468 as Davis does not argue
that Sworn Statements 1 and 2 fall within the
rule’s exclusion clause.

However, although dicta, Ofa does provide an
example of the intersection of data, evaluative
opinion, and hearsay evidence in OVUII prosecu-
tions in laying a proper foundation for a defen-
dant’s breath test results: “[blased on the Log
and other exhibits in evidence, [the certified In-
toxilyzer operator-supervisor] gave his opinion
testimony regarding the accuracy of the Intoxi-
lyzer.” 9 Haw.App. at 137, 828 P.2d at 817. This
combination of evidence, the Ofa court deter-
mined, was sufficient to support the admission of
the breath test results under the Hawaii Rules of
Evidence. Id.

262

and evaluative opinion, Although the numeri-
cal data included in the top half of Sworn
Statements 1 and 2 may be admissible under
HRE Rule 808()(8)(B), Kang’s opinion re-
garding the Intoxilyzer’s accuracy included in
the bottom half is not. See Bowman, supra,
§ 803-8[8][D], at 8-44 (“matters observed”
falling within HRE Rule 808(b)(8)(B) do not
include “conclusions, opinions, and evaluative
findings”). Thus, Sworn Statements 1 and 2
are not admissible hearsay under HRE Rule
808(b)(8)(B).

iv. Use of Sworn Statements in
Administrative Driver’s License
Revocation Proceedings

Our determination that Kang’s evaluative
conclusions as included within the bottom
half of Sworn Statements 1 and 2 do not fall
within HRE Rule 803(b)(8)(B) is also consis-
tent with statutory provisions relating to ad-
ministrative driver’s license revocation pro-
ceedings following an OVUII arrest. In the
administrative revocation process, which is
civil in nature, the State is specifically au-
thorized by statute to rely on evaluative con-
clusions virtually identical to those contained
in Sworn Statements 1 and 2 in this case. See

such relaxed evidentiary procedures in crimi-
nal proceedings against an individual facing
penal sanctions is neither authorized nor
called for by time considerations.

Under the Hawaii Revised Statutes, ad-
ministrative driver's license revocation proce-
dures may be initiated following an OVUII
arrest when the arresting officer issues a
notice of administrative revocation. HRS
§ 291E-38(a), (c) (Supp. 2012). Where the
officer has administered a breath, blood, or
urine test establishing the driver’s alcohol
concentration, the relevant authority is re-
quired to immediately forward to the di-
rector ” the “sworn statement of the person
responsible for maintenance of the testing
equipment” to establish, pursuant to HRS
§ 821-1617 and rules adopted thereunder,
the following information:

(A) The equipment used to conduct the

test was approved for use as an alcohol

testing device in this State;

(B) The person had been trained and at

the time the test was conducted was certi-

fied and capable of maintaining the testing
equipment; and

(C) The testing equipment used had been

properly maintained _and_was_in good

HRS § 291H-87(c)(8) (Supp. 2012); HRS
§ 291E-88(g) (Supp. 2012), Although written
statements including conclusions on an Intox-
ilyzer’s accuracy are permitted in a civil pro-
cess designed to expeditiously revoke the
license of the arrestee-driver, reliance on

22, See HRS § 291E-1 (2007) (defining “di-
rector” as “the administrative director of the
courts or any other person within the judiciary
appointed by the director to conduct administra-
tive reviews or hearings or carry out other func-
tions relating to administrative revocation under
part III”),

23, See HRS § 321-161 (2010) (authorizing the
department of health to establish and administer
a statewide program relating to alcohol concen-
on testing for purposes of HRS chapter
2918).

24, We note that the requirements for accuracy
testing of breath testing machines as set forth in
HAR § 11-114-7(a) (see supra note 11) apply to
all “individuals or laboratories who collect sam-
ples for or conduct forensic alcohol testing for
the purpose of introduction of the alcohol test
results into evidence in either civil or criminal
proceedings under applicable State driving un-
der the influence of alcohol statutes,” HAR § 11-

working condition when the test was con-

HRS § 291H-36(a), (a)(2) (2007 & Supp.
2012) (emphasis added) The director is
then required to review the issuance of the
notice of revocation, which must include con-

114-1(b) (emphasis added), This suggests that
Sworn Statements 1 and 2, like the sworn state-
ments contemplated by the administrative driv-
er’s license revocation statute, are completed
pursuant to the accuracy testing procedures of
HAR § 11-114-7(a). See Park v. Tanaka, 75 Haw.
271, 278-79, 859 P.2d 917, 920-21 (1993), In
fact, at least with respect to the predecessor
revocation statute, Sworn Statements 1 and 2 are
substantively identical to the sworn statements
used in revocation proceedings, in that the top
half contains a machine printout from the cali-
bration testing data of the Intoxilyzer, and the
bottom half includes a pre-printed text block of
the Intoxilyzer supervisor regarding the ma-
chine’s accuracy. See Ige v. Admin. Dir. of the
Court, 93 Hawai‘i 133, 139-40, 997 P.2d 59, 65-
66 (App. 2000) (detailing contents of sworn state-
ments used in driver's license revocation pro-
ceedings under HRS chapter 286 (repealed
2000)).

sideration of the sworn statement regarding
the working condition of the machine at the
time the breath, blood, or urine test was
conducted. HRS § 291E-37(a), (c)(8) (Supp.
2012),

If the director administratively revokes the
individual’s driver's license, the driver may
request an administrative hearing to seek
review of the decision to revoke the driver's
license. HRS § 291E-88(a) (Supp. 2012). At
the hearing, the sworn statements relating to
the accuracy and condition of the testing
equipment must be admitted into evidence,
and the director “shall” consider the state-
ments without requiring the testimony of a
law enforcement officer or other person. See
HRS = § 291H-38(a) (Supp. 2012); HRS
§ 291E-88(g). However, should the individual
request to “examine a law enforcement offi-
cer or other person who made a sworn state-
ment,” the director is required to issue a
subpoena for that person to appear at the
hearing. HRS § 291H-88(g). Thus, the ad-
ministrative driver’s license revocation proce-
dures require admission and consideration of
sworn statements regarding a breath test
equipment’s accuracy and condition, while
also mandating that, upon request, the officer
or other qualified person be subpoenaed to
give testimony at an administrative hearing.

Specifically with respect to the administra-
tive revocation of a driver's license, part IIL
of HRS chapter 291E therefore allows for
the submission of documentary evidence to
prove that breath test equipment was operat-
ing accurately at the time that the test was
administered to the individual whose license
the State seeks to revoke. Permitting relaxed
evidentiary procedures in this civil setting is
in keeping with the purpose of the adminis-
trative revocation process itself, which is to
“provide for the public safety by establishing
a quick, administrative procedure for revok-
ing the licenses of drunk drivers while they
are awaiting trial on criminal DUI charges.”
State vy. Toyomura, 80 Hawai‘ 8, 20, 904 P.2d
893, 905 (1995) (quoting Conf. Comm. Rep,
No. 187, in 1990 House Journal, at 824, 1990
Senate Journal, at 825) (analyzing predeces-
sor administrative driver's license revocation
procedures under HRS § 286-260 (repealed
2000)). In fact, the key benefit of administra-
tive revocation procedures is the ability to

263

bypass those protections afforded to criminal
defendants at trial:

[T]he main benefit of administrative revo-

cation is that it allows the State to remove

a drunk driver's license before the culmi-

nation of a lengthy prosecution under the

criminal statute. Currently, a person
charged with driving under the influence
must be allowed to continue driving until
he or she is found guilty in a court of law.
This process takes an average of seven or
eight months in Hawaii, and even longer,
and while this process is going on, the
dangerous driver, who quite likelyis an
inveterate repeat offender, remains on the
road,
State v. Higa, 79 Hawai'i 1, 6, 897 P.2d 928,
933 (1995) (quoting Conf, Comm. Rep. No.
187, in 1990 House Journal, at 824-25, 1990
Senate Journal, at 825). Deeming sufficient a
sworn statement regarding maintenance test-
ing on a breath or other test machine, rather
than requiring a qualified person to testify at
a hearing, is thus one way the administrative
revocation process avoids evidentiary and
other procedural rules in an effort to prevent
“potentially threatening drivers” from con-
tinuing to drive “between the time [they] are
cited and their criminal adjudication.” Id. at
6, 897 P.2d at 933,

Significantly, unlike the “legitimate, non-
punitive, and purely remedial functions” of
the administrative driver's license revocation
process, see Higa, 79 Hawai'i at 7, 897 P.2d
at 934, a defendant in an OVUII prosecution
faces criminal penalties and loss of the con-
stitutional right to liberty. See HRS § 291E-
61(6) (Supp. 2011) (providing imprisonment
penalties for the offense of operating a vehi-
cle under the influence of an intoxicant), An
individual subject to an OVUII prosecution is
guaranteed the protections afforded to crimi-
nal defendants by the Hawai'i Constitution,
the United States Constitution, and the Ha-
waii Revised Statutes (which includes the
Hawaii Rules of Evidence), Misconstruing
HRE Rule 808(b)(8)(B) to allow into evidence
in an OVUII criminal prosecution out-of-
court evaluative opinions and conclusions
similar to those contained within the sworn
statements deemed admissible in the civil
driver’s license revocation process would es-

264

sentially allow procedures designed specifi-
cally for a civil administrative process to be
used in a criminal trial.

y. Davis’s Breath Test Results Lacked
Sufficient Foundation

As Professor Bowman explains in his evi-
dence treatise, evaluative opinions that con-
stitute hearsay may not be admitted into
evidence under HRE Rule 803(b)(8)(B). Bow-
man, supra, § 803-3[8][D], at 8-44. Public
records that include “information that is con-
erete and simple in nature” or “routine recor-
dations not resulting from analysis or judg-
ment” may constitute “matters observed”

25, Our opinion does not preclude any “docu-
ment or record that requires any sort of training
or specialized knowledge” from being admitted
into evidence under HRE Rule 803(b)(8). Dissent
at 268, 400 P.3d at 469. Rather, a record pre-
pared using training or specialized knowledge
may be admissible under the rule provided that
its contents constitute “matters observed,” in
that it does not contain conclusions, opinions, or
evaluative findmgs. Bowman, supra, § 803-
3(8][D], at 8-44.

26, Though the dissent states that our decision is
inconsistent with those of other federal and state
courts on “this issue,” dissent at 266, 268, 400
P.3d at 467, 469, it appears that the trial courts
of other jurisdictions have routinely utilized a
combination of testimony and written data to lay
a foundation for evaluative opinions and reports,
thereby avoiding the precise issue in this cas
See, og, Best v. State, 328 A.2d 141, 142-43
Wel. 1974) (Intoxilyzer calibration tests by state
chemist introduced in conjunction with testimo-
ny of police officer/record-keeper regarding “[the
Intoxilyzer’s} proper operation and condition at
the time of [the defendant's] arrest and testing”);
United States v. Gilbert, 774 F.2d 962, 964 (Oth
Cir, 1985) (card containing impression of finger-
print and “notation that the fingerprint had been
‘ifted’ from one of the wooden statuettes by
Criminologist Sally Jones” introduced in con-
junction with testimony of different criminologist
that the print on the card was a match to defen-
dant's left thumb); People v. Black, 84 IlLApp.3d
1050, 40 I.Dec, 322, 406 N.E.2d 23, 24.25
(1980) (testimony of evidence technician that de-
cal affixed to breathalyzer machine “indicated
that it had been recently tested and proven accu-
rate’ was sufficient to establish machine’s accu-
racy); State v. Jensen, 351 N.W.2d 29, 31, 32-33
(Minn. Ct. App. 1984) (breathalyzer certification
records introduced in conjunction with testimo-
ny of operator who administered defendant's
breath test regarding ‘the administration and the
reliability of the [breath] test’).

Further, the dissent has not identified a case in
which this specific issue—i.e., whether evaluative

within the meaning of HRE Rule
803(b)(8)(B) and merit admission into evi-
dence under the rule.® Mueller & Kirkpat-
rick, supra, § 8.50, at 910; Bowman, supra,
§ 803-8[8][D], at 8-44. Public records that do
not constitute “matters observed” because
they include “conclusions, opinions, and eval-
uative findings” will not be admissible under
the public records exception.® Bowman, su-
pra, § 803-3[8][D], at 8-44,

In order to render evaluative opinions or
conclusions based on “matters observed,”
other evidence may be introduced in conjunc-
tion with data properly admitted under HRE
Rule 803(b)(8)(B).”” This additional evidence

opinions and conclusions constitute “matters ob-
served” within the meaning of HRE Rule
803(b)(8)(B) or its state or federal analogs—has
been explicitly considered, reasoned, and ruled
on in the affirmative. See, e.g., State v. Smith, 66
Or.App. 703, 675 P.2d 510, 511-12 (1984) (con-
cluding that “two documents certifying that the
breathalyzer equipment was in proper operating
order” were admissible into evidence under state
law public records exception but declining with-
out explanation to address defendant's argument
that the two documents “encompass{ed] expert
testimony”).

27. To the extent that the dissent suggests that
such a combination of evidence is inconsistent
with 24 years of practice in Hawai'i courts, dis-
sent at 266, 400 P.3d at 467, we note that in
numerous cases, the State has laid a foundation
for test results in OVUII prosecutions in part by
introducing testimony of a qualified Intoxilyzer
supervisor or other professional familiar with
test equipment calibration procedures. See, e.g.,
State v. Werle, 121 Hawai'i 274, 278, 218 P.3d
762, 766 (2009) (testimony from licensed medical
technologist that he tested the defendant's blood
for alcohol concentration and “outlin[ing] his
training and experience in the use and calibra-
tion of ... the device he used to test [the defen-
dant's] blood sample” (internal quotations omit-
ted); State v. Kemper, 80 Hawai'i 102, 104-05,
905 P.2d 77, 79-80 (App. 1995) (testimony from
qualified HPD criminalist that she calibrated the
Intoxilyzer and that “the test was performed
properly and that the results are accurate”
nal quotations omitted)); State v. Young, 8 Haw.
App. 145, 148, 795 P.2d 285, 288 (1990) (testi-
mony from HPD certified Intoxilyzer operator-
supervisor that, based on her accuracy checks,
the Intoxilyzer was working “properly and accu-
rately” on the date it was administered to the
defendant); State v. Ofa, 9 Haw.App. 130, 132-
33, 828 P.2d 813, 815-16 (1992) (testimony from
HPD criminalist and certified Intoxilyzer opera-
tor-supervisor that calibration checks of an In-
toxilyzer were periodically performed and that

may come in a variety of forms, and our
decision in this case will not require the State
in every OVUII prosecution to bring to the
trial the Intoxilyzer supervisor who conduct-
ed the machine’s most recent calibration test-
ing. In this particular case, however, no ad-
missible evidence was adduced in conjunction
with the calibration testing data to establish
the Intoxilyzer’s accuracy, therefore render-
ing Davis’s breath test results inadmissible
for lack of the requisite foundation.

B. Admissibility under Business Records
Exception, HRE Rule 803(b)(6)

Tl The State also sought to admit Sworn
Statements 1 and 2 as business records un-
der HRE Rule 803(b)(6) (1998 & Supp. 2002).
“Although ordinarily the proponent of hear-
say is entitled to ‘shop around’ among the
exceptions, the public records exception of
[the Federal Rules of Evidence] preempts
this subject matter [of business records] and
forecloses access to business records admissi-
bility.” Addison M. Bowman, Hawaii Rules of
Evidence Manual § 803-3[6][F], at 8-41
(2016-2017 ed.). Thus, it is generally under-
stood that records excluded by HRE Rule
803(b)(8) cannot be admitted through the
“pack door” as a business record under HRE
Rule 808(b)(6). See United States v. Weiland,
420 F.8d 1062, 1074 (9th Cir. 2005) (“The
government may not cireumvent the specific
requirements of [Federal] Rule [of Evidence]
803(8) by seeking to admit public records as
business records under Rule 803(6). Nor may
the government attempt to combine Rules
803(6) and 808(8) into a hybrid rule to excuse
its failure to comply with either.”); United
States _v. Orellana-Blanco, 294 F.8d 1148,
1149 (9th Cir. 2002) (“When public records
are used against a defendant in a criminal
prosecution, the public records exception is
the exclusive applicable hearsay exception.”);
United States v. Cain, 615 F.2d 380, 382 (6th
Cir, 1980) (“[S}tatements inadmissible as
public agency reports under Rule 803(8) may
not be received merely because they satisfy

results were reflected in a concurrently-admitted
record book); State v. Matsuda, 9 Haw.App. 291,
293, 836 P.2d 506, 507 (1992) (testimony from
“HPD evidence specialist” and certified Intoxi-
lyzer supervisor that “‘he tested the Intoxilyzer
..» for accuracy” prior to and following its use

265

Rule 808() ... section (6) does not open a
back door for evidence excluded by section
(.”).

As discussed above, Sworn Statements 1
and 2 were not admissible as public records
under HRE Rule 803(b)(8). The State may
not “circumvent the requirements” of HRE
Rule 808(b)(8)(B) by seeking their admission
under HRE Rule 803(b)(6). Bowman, supra,
§ 803-3[6][F], at 8-41; Weiland, 420 F.3d at
1074 (indicating that the business records
hearsay exception is not an avenue for admit-
ting evidence that is inadmissible under the
public records exception), Therefore, Sworn
Statements 1 and 2 were not admissible as
business records under HRE Rule 808(b)(6).

Iv. CONCLUSION

Sworn Statements 1 and 2 were improper-
ly admitted under the public records excep-
tion, as they contained an evaluative opinion
that does not constitute a “matter observed”
within the meaning of HRE Rule 803(b)(8).
Because there was no other evidence pre-
sented in this case as to the Intoxilyzer
calibration testing, the State failed to lay a
sufficient foundation that the Intoxilyzer was
in proper working order when the breath
test was administered to Davis. The district
court thus erred in admitting the Operator
Statement (which contained the result of
Davis’s breath test) into evidence in light of
the improper introduction of the calibration
records. As the breath test result was wrong-
ly admitted, the State failed to show that
Davis's breath alcohol concentration was .08
or more grams of alcohol per 210 liters of
breath, an essential element of the offense of
OVUII under HRS § 291E-61(a)(8).

Accordingly, the ICA erred in affirming
the district court’s November 29, 2012 Order
and Notice of Entry of Order. We therefore
vacate the ICA’s July 29, 2015 Judgment on
Appeal and the district court’s November 29,
2012 Order and Notice of Entry of Order and
yemand the case for a new trial.

on the defendant); State v. Hamasaki, 7 Haw.
App. 542, 542, 783 P.2d 1235, 1236 (1989) (testi-
mony from HPD criminalist and certified Intoxi-
lyzer operator-supervisor that he conducted cali-
bration testing of the Intoxilyzer).

266

DISSENTING OPINION BY
RECKTENWALD, C.J., IN WHICH
NAKAYAMA, J., JOINS

I respectfully dissent. The Majority hold-
ing will impose an additional evidentiary
burden on the State in drunk driving cases—
a burden which is not required under the
Hawai'i Rules of Evidence (HRE). I would
hold instead that the Intoxilyzer supervisor’s
inspection record is admissible as a public
record pursuant to HRE Rule 803(b)(8)(B),
consistent with other federal and state? ju-
risdictions to consider this issue. In so con-
cluding, I fully agree with the Intermediate
Court of Appeals’ (ICA) reasoning in State
y. Ofa, 9 Haw.App. 180, 828 P.2d 818 (1992),
which has sanctioned the admissibility of
such records for the past 24 years.

In Ofa, the ICA addressed the admissibili-
ty of a Honolulu Police Department (HPD)
certified Intoxilyzer operator-supervisor’s
log, which included the records of Intoxilyzer
accuracy test results. The District Court ad-
mitted the log into evidence after a HPD
criminalist testified about how such tests
were conducted and the results recorded in
the log. The ICA held that the log falls
within the HRE Rule 803(b)(8)(B) hearsay
exception. Id, at 185, 828 P.2d at 816. HRE
Rule 808(b)(8)(B) (2002) provides:

1. See United States v. Wilmer, 799 F.2d 495 (9th
Cir, 1986), cert denied, 481 U.S. 1004, 107 S.Ct.
1626, 95 L.EBd.2d 200 (1987) (holding that a
calibration report of a breathalyzer operator is a
routine, objective report admissible under Feder-
al Rules of Evidence Rule 803(8)(B)); see also
United States v. Wilkinson, 804 F.Supp. 263 (D.
Utah 1992),

2. See State v. Dilliner, 212 W.Va. 135, 569
8.B.2d 211, 218 (2002) (holding that an accuracy
inspection report of an intoxilyzer is admissible
under public records hearsay exception); Steiner
y. State, 706 So.2d 1308, 1313 (Ala. Crim. App.
1997); State v. Smith, 66 Or.App. 703, 675 P.2d
510, 512 (1984); State v. Ward, 15 Ohio St3d
355, 474 N.E.2d 300, 302 (1984); State v. Hug-
gins, 659 P.2d 613, 615 (Alaska Ct. App. 1982);
State v. Ruiz, 120 N.M, 534, 903 P.2d 845, 847
(N-M. Ct. App. 1995), abrogated by State v. Mar-
tinez, 141 N.M. 713, 160 P.3d 894, 900 (2007);
Derrick v. State ex rel, Dep't of Public Safety,
164 P.3d 250, 254 (Okla, Civ. App. 2007); Best v.
State, 328 A.2d 141, 143 (Del. 1974); Douglas v.
State, 145 Ga.App. 42, 243 S.E.2d 298, 299
(1978); People v. Black, 84 IllApp.3d 1050, 40
ILDec. 322, 406 N.E.2d 23, 25 (1980); State v.

Records, reports, statements, or data com-
pilations, in any form, of public offices or
agencies, setting forth ... (B) matters ob-
served pursuant to duty imposed by law as
to which matters there was a duty to re-
port, excluding, however, in criminal cases
matters observed by police officers and
other law enforcement personnel, ... un-
less the sources of information or other
circumstances indicate lack of trustworthi-
ness,

The ICA noted that the log “constitutes a
record or report of a public agency, the
HPD” and “includes matters observed and
reported by an HPD operator-supervisor
who tested the Intoxilyzer for accuracy as
required by provisions of the [State Depart-
ment of Health’s Rules for the Testing of
Blood, Breath and Other Substances for Al-
cohol Concentration].” Ofa, 9 Haw.App. at
185, 828 P.2d at 816-17.

The ICA then determined that the only
issue is whether the log was excluded from
HRE Rule 803(b)(8)(B) as “‘matters ob-
served by ... law enforcement personnel’ in
a criminal case.” Id, at 185, 828 P.2d at 817.
It noted that the Ninth Circuit Court of
Appeals had addressed this issue with regard
to Federal Rules of Evidence (FRE) Rule
803(8)(B),3 the federal counterpart of HRE
Rule 803(b)(8)(B):

Jensen, 351 N.W.2d 29, 32 (Minn. App. 1984);
Commonwealth v. Sweet, 232 Pa.Super. 372, 335
A.2d 420, 423 n.5 (1975); Frost v. North Dakota
Dep't of Transp., 487 N.W.2d 6, 11 (N-D. 1992);
see also Bohsancurt v. Eisenberg, 212 Ariz. 182,
129 P.3d 471, 476-477 (Ariz. Ct. App. 2006)
(holding that calibration records qualify under
the business records hearsay exception); Harkins
v. State, 735 So.2d 317, 319 (Miss. 1999).

3, FRE Rule 803(8) (2014) provides the following
hearsay exception;

Public Records, A record or statement of a
public office if;
(A) _ it sets out:

@__ the office's activities;

Gi) a matter observed while under a legal
duty to report, but not including, in a criminal
case, a matter observed by law-enforcement
personnel; or

(iii) in a civil case or against the govern-
ment in a criminal case, factual findings from
a legally authorized investigation; and
(B) the opponent does not show that the
source of information or other circumstances
indicate a lack of trustworthiness.

[FRE Rule] 803(8)(B) is identical to HRE

Rule 803(b)(8)(B). In construing the exclu-

sion provision of [FRE Rule] 803(8)(B), the

Court of Appeals of the Second Circuit

took a very restrictive view, holding that

in criminal cases reports of public agen-
cies setting forth matters observed by
police officers and other law enforce-
ment personnel and reports of public
agencies setting forth factual findings
resulting from investigations made pur-
suant to authority granted by law cannot
satisfy the standards of any hearsay ex-
ceptions if those reports are sought to
be introduced against the accused.

United States v. Oates, 560 F.2d 45, 84 2d

Cir, 1977). The Oates restrictive view has

been criticized, See 4 J. Weinstein & M.

Berger, Weinstein’s Evidence § 308(8)[04]

(1991).

The Court of Appeals of the Ninth Cireuit

concluded that “the exclusionary provisions

of Rule 803(8)(B) were intended to apply to
observations made by law enforcement of-
ficials at the scene of a crime or the appre-
hension of the accused and not ‘records of

routine, nonadversarial matters’ made in a

nonadversarial setting.” United States v.

Wilmer, 799 F.2d 495, 500-01 (th Cir.

1986) (quoting United States v. Orozco, 590

F.2d 789, 798 (9th Cir.), cert. denied, 442

U.S. 920, 99 S.Ct, 2845, 61 L.Hd2d 288

(1979)). Wilmer held that, in a DUI case,

the calibration report of a breathalyzer

maintenance operator is admissible under

[FRE Rule] 808(8)(B). See United States

y. DeWater, 846 F.2d 528 (9th Cir. 1988)

(in a DUI case, the intoxilyzer test results

were admissible under the public records

and reports exception to the hearsay rule).
Id,

The ICA then adopted the rationale of the
Ninth Circuit cases. It stated, “[cllearly, [the
operator-supervisor’s] report in the Log of
his testing of the Intoxilyzer for accuracy on
the specified dates constituted a record of
routine, nonadversarial matters made in a
nonadversarial setting.” Id.; see also State v.
Smith, 66 Or.App. 708, 675 P.2d 510, 512
(1984) (stating that certificates of breathaly-
zer inspections relate to “the routine function
of testing breathalyzer equipment to insure

267

that it gives accurate readings”). It further
determined that there were no cireumstances
that indicated a lack of trustworthiness of the
information reported in the log because (1)
the testing was routine and nonadversarial,
(2) the inspecting officer had “no personal
stake in the outcome of individual cases[,]”
and (8) it was the officer’s duty to test the
Intoxilyzer and record the results in the log,
Ofa, 9 Haw.App, at 186-87, 828 P.2d at 817.
Thus, the ICA held that the log was admissi-
ble under the HRE Rule 803(b)(8)(B) hear-
say exception. Id,

The holding and reasoning of Ofa are di-
rectly applicable to this case, Like the log in
Ofa, the Intoxilyzer supervisor’s inspection
record is a record of routine, nonadversarial
matters made in a nonadversarial setting.
Further, there is nothing to indicate a lack of
trustworthiness in the record because the
Intoxilyzer supervisor tested the instrument
pursuant to his duties and without any per-
sonal interest in the results, Thus, I would
hold that the record is admissible as a public
record pursuant to HRE Rule 808(b)(8)(B).

Moreover, contrary to the Majority’s hold-
ing, a record of the direct observations of the
Intoxilyzer supervisor is plainly a “matter
observed pursuant to duty imposed by law as
to which matters there was a duty to report”
under HRE Rule 808(b)(8)(B). The record
simply identifies that the Intoxilyzer was op-
erating accurately in compliance with Hawai‘
Administrative Rules Chapter 114-7 on the
date that the supervisor conducted the accu-
racy test. It does not contain subjective and
evaluative information, such as information
regarding the supervisor’s activities on that
day or the methods used to record the target
values. The HRE Rule 803(b)(8)(B) public
record exception is directed at exactly this
type of document—one that is reliable and
trustworthy and is created pursuant to a
publie official’s regular duties. See Commen-
tary for HRE Rule 808 (stating that the
justification for HRE Rule 808(b) is “the
assumption that a public official will perform
his duty properly and the unlikelihood that
he will remember details independently of
the record”) (quoting the Advisory Commit-
tee’s Note to FRE 803(b)).

268

As noted above, the Majority reaches a
conclusion contrary to other federal and state
jurisdictions to consider the applicability of
the public records exception to breathalyzer
inspection records. The Majority contends
that these courts failed to “explicitly consid-
er[]” the question of whether the content of
such records qualifies as “matters observed.”
Majority Opinion at 264-265, 400 P.8d at
465-66 n.27. However, other jurisdictions
have considered the question implicitly, and
found the answer to be “yes.” See, e.g., Dil-
Iner, 212 W.Va. at 141, 569 S.E2d at 217
(The accuracy inspection report of an intoxi-
lyzer sets forth matters observed pursuant to
a duty imposed by the Code of State Rules
which also requires that these matters be
reported.”) (emphasis added). Similarly, the
Majority asserts that Ofa “does not speak to
the issue in this appeal” because it does not
expressly consider whether the contents of
an Intoxilyzer log constitute “matters ob-
served.” Majority Opinion at 261, 400 P.3d at
462. However, Ofa addresses the question
implicitly:

The Log falls within the HRE Rule

803(b)(8)(B) exception... . It includes mat-

ters observed and reported by a HPD
operator-supervisor who tested the Intoxi-
lyzer for accuracy as required by provi-
sions of the Rules.
9 Haw.App. at 185, 828 P.2d at 816-17 (em-
phasis added).

The Majority relies instead on Baker v.
Elcona Homes Corp., 588 F.2d 551 (6th Cir,
1978), which examined whether the public
records hearsay exception of the Federal
Rules of Evidence applied to a police report.
In Baker, a police officer arrived at the scene
after a traffic accident, where he interviewed
witnesses and wrote down his conclusions
regarding which driver was at fault and the
color of the traffic light when the vehicles
collided. Id, at 554-55, The Sixth Circuit de-
termined that this section of the report com-
prised “factual findings” rather than “mat-
ters observed,” noting,

It is also clear from the construction of the

rule itself that factual findings admissible

under [FRE] Rule 803(8)(C) may be those
which are made by the preparer of the
report from disputed evidence, as contrast-

ed to those facts which are “matters ob-

served pursuant to duty imposed by law as

to which matters there was a duty to re-

port” called for under Rule 803(8)(B).

Id, at 556-58,

The Majority cites Baker to argue that the
Intoxilyzer supervisor’s conclusion that the
machine was functioning correctly should be
considered a “factual finding,” but the Sixth
Cireuit’s analysis is inapposite to the present
case, A routine determination that a piece of
equipment works properly cannot be reason-
ably characterized as an “interpretative con-
clusion” akin to findings about the cireum-
stances of a traffic accident reached after
weighing evidence from conflicting sources.
Majority Opinion at 260, 400 P.8d at 461. In
keeping with Ofa and similar cases from
other jurisdictions, it is my view that breath-
alyzer calibration reports fall squarely within
the category of “matters observed.”

I respectfully disagree with the Majority’s
contention that other jurisdictions have used
“a, combination of testimony and written data
to lay the foundation” for what it calls “evalu-
ative opinions and reports.” Majority Opinion
at 264, 400 P.8d at 465 n.26. As noted above,
courts in other jurisdictions routinely admit
Intoxilyzer calibration records under the
hearsay exception for public records or busi-
ness records. These records are then used to
lay the foundation for other evidence, such as
a defendant’s breath test results. See, e.g.
People v. Black, 40 Ill-Dee, 822, 406 N.E.2d
at 24-25; State v. Jensen, 351 N.W.2d at 32-
38. By conflating these two things—Intoxi-
lyzer records admitted under a hearsay ex-
ception, and other evidence supported by
those records—the Majority creates a barri-
er to the admissibility of those records that is
not required by the HRE.

The result is that no document or record
that requires any sort of training or special-
ized knowledge to prepare will be admissible
under HRE Rule 808(b)(8). This could pre-
clude not only calibration reports of techni-
cians, but also, for instance, a criminologist’s
notations on a fingerprint card. See United
States v. Gilbert, 774 F.2d 962, 965 (9th Cir.
1985) (holding that a fingerprint card is ad-
missible under FRE 803(8)(B)). These rec-
ords are the types of “routine, nonadversarial

matters” that are not intended to be exclud-
ed by the public records exception. See Or-
ozeo, 590 F.2d at 798-94 (explaining that the
legislative history of FRE Rule 803(8) indi-
cates that “Congress did not intend to ex-
clude records of routine, nonadversarial mat-
ters”).

The Majority’s opinion will have a signifi-
cant impact on future OVUII prosecutions.
Going forward, the Majority’s holding would
require the State to bring, to every OVUIL
trial, the certified breath test operator who
conducted the accuracy inspection of the In-
toxilzyer, or another witness who could pro-
vide similar testimony. While that burden
should not dictate our application of the
HRE, it nevertheless highlights the serious
implications of the result reached by the
Majority—a result which, respectfully, is not
required by our rules of evidence.

For these reasons, I dissent.

400 P.3d 470

STATE of Hawai'i, Respondent/Plaintiff-
Appellant,

v

Rick TRINQUE, Petitioner/Defendant-
Appellee,

and
Miles Martinez, Defendant.
SCWC-12-0001017

Supreme Court of Hawai‘.
MAY 25, 2017

269

=
oy

Nal
é
nN

]

72

Jon N. Ikenaga and Hayley Y.C. Cheng
for petitioner.

Justin F. Kollar and Tracy Murakami for
respondent,

RECKTENWALD, C.J., MCKENNA,
POLLACK, AND WILSON, JJ., AND
CIRCUIT COURT JUDGE CHANG, IN
PLACE OF NAKAYAMA, J.,
UNAVAILABLE

OPINION OF THE COURT BY
POLLACK, J.

IL INTRODUCTION

On March 19, 2009, Rick Trinque was ar-
rested in a pasture and handeuffed by the
police who were conducting an investigation
involving the growing of marijuana. Prior to
apprising Trinque of his Miranda rights, po-
lice obtained two statements from Trinque.
Later, at the police station, police obtained a
third statement from Trinque when he in-

1, Trinque was “at least one of the targets of
[KPD’s] investigation,” Lt. Richard Rosa stated
that “[bJecause of the briefing that we had prior

voked his right to counsel while being given
Miranda warnings. The Cireuit Court of the
Fifth Circuit (circuit court) concluded that
the first and second statements had been
unlawfully elicited from Trinque, as they re-
sulted from pre-Miranda custodial interroga-
tion, and that the third statement was a
product of the two earlier illegally obtained
statements. The circuit court accordingly ex-
cluded the statements from being used as
evidence at trial. The State appealed the
circuit court’s decision regarding the second
and third statements, The Intermediate
Court of Appeals (ICA) disagreed with the
circuit court and vacated its ruling as to the
second and third statements.

In his application for certiorari, Trinque
contends that the cireuit court correctly
ruled that the second and third statements
were obtained in violation of his constitution-
al rights and that the ICA gravely erred in
vacating the circuit court’s decision. For the
reasons set forth below, we conclude that the
ICA erred in vacating the ruling of the cir-
cuit court,

I. BACKGROUND

A. Underlying arrest

In the days prior to March 19, 2009, the
Kaua‘i Police Department (KPD) received in-
formation that there was marijuana growing
in a 25-acre pasture in Kilauea, Kaua‘i, and
initiated an investigation. On March 19, 2009,
KPD officers were conducting nighttime sur-
veillance in the pasture when they encoun-
tered Trinque, who was placed under arrest
and immediately placed in handeuffs by Offi-
cer Brian Silva (the case agent in charge of
the operation) while still in the pasture!
Miles Martinez was also arrested in the pas-
ture. Both Trinque and Martinez were or-
dered to sit on rocks within the pasture while
officers took pictures of them and obtained
their identification, As Officer Silva and an-
other officer were escorting Trinque out of
the pasture, one of the officers asked Trinque
how he came into the field. Trinque respond-
ed that “he came over the fence by the

[to March 19] ... we had the names of two of the

suspects based on who lived there and stuff, and
the officers told me who they were.”

banana tree using a ladder that was still
located by the fence and that he was caught
red handed” (Statement 1). Once out of the
pasture, Trinque was ordered by the officers
to sit on a wooden bench. Trinque remained
handcuffed.

Officer Silva directed Lt. Richard Rosa to
watch over Trinque. Lt. Rosa was the super-
visor for the vice unit and a case supervisor
at that time. That night, Lt. Rosa was
dressed in plain clothes, with his police badge
around his neck. Lt. Rosa had never met
Trinque before, but “he knew Rick Trinque
by name” because Trinque’s daughter, whom
Lt. Rosa had previously assisted in a case,
had informed him that Trinque was her fa-
ther? KPD officers told Lt. Rosa who the
two detained suspects were, and Lt. Rosa
knew that it was Trinque sitting on the
wooden bench when he approached.

Lt. Rosa identified himself to Trinque as
Lt. Rosa from the Narcotic Unit of KPD, and
he informed Trinque that he was the officer
who worked on his daughter's case. Lt. Rosa
then told Trinque “that if [Trinque] did not
believe him, he could talk to his daughter
about it.” In an apparent effort to emphasize
his trustworthiness, Lt. Rosa told Trinque

2. Prior to being assigned to the vice unit, Lt.
Rosa was the district commander in Hanalei
when he “assisted” Trinque’s daughter with her
case. Lt. Rosa met Trinque’s daughter when she
expressed to him that she was having problems
with persons who might have intended to assault
her father.

3, Lt. Rosa noted that there were other police
officers around at the time he approached Trin-
que and agreed that it was possible to have read
‘Trinque his rights at the scene.

4. Nowhere on the KPD 364 Form, entitled “‘In-
forming Persons Being Interrogated of Their
Constitutional Rights,” does it direct police offi-
cers to ask whether a defendant wants an attor-
ney. Specifically, No. 6 on the form states, “Do
you understand that you have the right to talk to
a lawyer before answering any questions and to
have him or her present while I talk to you?’’
Thus, the question asks whether the individual
understands that he or she has a right to have an
attorney present, not whether he or she wants an
attorney.

On direct examination during the circuit court
hearing, Officer Silva testified as follows:

Q: Did Mr. Trinque respond when you asked

him whether he wanted an attorney or not?

A: Yes.

273

that “he would not lie to him.” Next, he
informed Trinque that he would not “jerk his
chain.” And, to underscore this point, Lt.
Rosa told Trinque that “he would be com-
pletely honest with him.” During these state-
ments, Trinque “sat there listening” and did
not speak to Lt. Rosa. When Lt. Rosa “told
Trinque to not make any statements until
[they] got back to Lihue where we could
advise him of his rights,” ® Trinque respond-
ed, “What for? You caught us red handed,
there’s nothing left to say, times are hard
and we needed the money” (Statement 2),

Soon after, Lt, Rosa and Officer Silva
transported Trinque to the Lihu‘e police sta-
tion, where he was booked and placed in an
interrogation room. Both Lt. Rosa and Offi-
cer Silva were present during Trinque’s in-
terview in the interrogation room. Trinque
was informed of his constitutional rights via
the KPD Form 364. Officer Silva asked Trin-
que if he wanted an attorney, and Trinque
responded that he did.‘ Officer Silva then
asked Trinque whether or not he wanted to
make a statement.> Trinque replied that he
did not want to make a statement since “he
got caught red-handed and was going to jail

Q: What was his reply?
A: He wanted to talk to an attorney.
On cross-examination, Officer Silva was less con-
fident:
Q: ... So at what point did you ask him if he
wanted an attorney?
A: Um, he might have told me he wanted an
attorney, and that was the end of the conversa-
tion,
Q: What do you mean he might have told
you?
‘A: This happened almost four years ago. He
might have told me he wanted an attorney as
T’'m going through the rights, and I said okay,
fine. We're not going through this.

8. The sequence of questions and answers be-
tween Officer Silva and Trinque is unclear from
the transcript of the hearing on the motions.
However, the transcript could be read to indicate
that Officer Silva continued speaking with Trin-
que after Trinque made clear that he wanted an
attorney, We note that, if this were the case,
Officer Silva would have violated the well-estab-
lished rule that “once the right to counsel has
been invoked all questioning must cease.” State
v. Mailo, 69 Haw. 51, 52, 731 P.2d 1264, 1266
(1987). It is not necessary to resolve this issue in
light of our disposition of this case.

274

anyway.” © (Statement 8) During the approxi-
mately three hours following Trinque’s ar-
rest, Lt. Rosa remained at Trinque’s side
from their initial contact, during transport,
and to Trinque’s placement in the interroga-
tion room where Statement 3 was obtained.

B. Circuit court proceedings

On February 28, 2012, Trinque was
charged by indictment with Commercial Pro-
motion of Marijuana in the First Degree, in
violation of Hawaii Revised Statutes (HRS)
§ 712-1249.4(1)(c) (1998), and Unlawful Use
of Drug Paraphernalia, in violation of HRS
§ 829-43,5(a) (1998),”

The State filed a Motion to Determine
Voluntariness of Statements, contending that
Trinque made inculpatory statements upon
arrest and that the statements were admissi-
ble at trial. Trinque filed a motion seeking to
suppress Statements 1, 2, and 8 on the
grounds that they were obtained in violation
of his constitutional rights under article I,
sections 5 and 10 of the Hawai'i Constitution
and the Fifth and Fourteenth Amendments
to the United States Constitution (Motion to
Suppress Statements). Trinque contended
that he was subjected to pre-Miranda custo-
dial interrogation when he made Statements
1 and 2, in violation of his right against self-
incrimination. Trinque also argued that his
post-Miranda statement (Statement 3) should
be suppressed as a “fruit of the poisonous
tree” because “the statement was made un-
der the taint of the two prior police illegali-
ties.”

6, Trinque’s interview by Officer Silva and Lt.
Rosa in the interrogation room was not audio or
video recorded, despite officers having access to
a digital recorder. Officer Silva stated that Trin-
que’s interview was not recorded because, at that
time, KPD policy did not require officers to do
so, While Officer Silva took notes when inter-
viewing Trinque, he shredded them once he fin-
ished his report.

7, HRS § 712-1249.4(1)(c) provides as follows:

(1) A person commits the offense of commer-
cial promotion of marijuana in the first degree
if the person knowingly:

(c) Possesses, cultivates, or has under the
person’s control one hundred or more mari-
juana plants...,
‘The applicable version of HRS § 329-43.5(a)
states the following:

In its response, the State argued that
Trinque “voluntarily made inculpatory state-
ments upon arrest.” The State maintained
that Statement 1 was a spontaneous state-
ment and that Statements 2 and 3 “were
voluntary and not the result of KPD coer-
cion.” Further, the State contended that
Trinque’s statements were independent of
police questioning and that Trinque kept
talking even after he was advised not to
make a statement until he was taken to the
station and given Miranda warnings,

Following a hearing on the motions’ the
circuit court issued its Findings of Fact, Con-
clusions of Law and Order Granting Defen-
dant’s Motion to Suppress Statements (Order
Suppressing Statements), in which it deter-
mined that, as to Statement 1, Trinque was
“in custody for purposes of Miranda” from
the moment he was placed in handcuffs in
the pasture. The court found that either Offi-
cer Silva or the other officer escorting Trin-
que out of the pasture specifically asked
Trinque how he came into the field and that
the question prompted Trinque to respond
that he “came over the fence by the banana
tree using a ladder that was still located by
the fence and that he was caught red hand-
ed.” The circuit court concluded that “asking
the defendant how he got into the pasture
was an illegal custodial interrogation that the
officer knew or should have known was rea-
sonably likely to elicit an incriminating re-
sponse” and that the question did in fact
improperly elicit Statement 1.

(@) It is unlawful for any person to use, or
to possess with intent to use, drug parapherna-
lia to plant, propagate, cultivate, grow, harvest,
manufacture, compound, convert, produce,
process, prepare, test, analyze, pack, repack,
store, contain, conceal, inject, ingest, inhale, or
otherwise introduce into the human body a
controlled substance in violation of this chap-
ter. Any person who violates this section is
guilty of a class C felony and upon conviction
may be imprisoned pursuant to section 706-
660 and, if appropriate as provided in section
706-641, fined pursuant to section 706-640.
Martinez was jointly indicted with Trinque
upon the same charges.

8, The Honorable Kathleen N.A. Watanabe pre-
sided over the case.

The circuit court further concluded that
Statement 2 was the product of an illegal,
pre-Miranda custodial interrogation. The
court held that Lt. Rosa’s “unsolicited state-
ments” to Trinque amounted to “statements
that were designed to garner the trust of the
defendant ... and invite the defendant to
open up.” Thus, the circuit court concluded
that Lt. Rosa conducted an unauthorized pre-
Miranda interrogation in violation of Trin-
que’s constitutional rights, The circuit court
stated that “there was no legitimate reason”
for Lt, Rosa to make these statements to
Trinque, including:

telling [Trinque] that he wasn’t sure if
[Trinque] knew who he was, but that he
was the Officer who worked on [his]
daughter’s case, that if Trinque did not
believe him, [he] could talk to his daughter
about it, that he would not lie to [Trinque],
he would not “jerk his chain,” and that he
would be completely honest with him,

The cireuit court concluded that Lt. Rosa
knew or should have known that his state-
ments would likely elicit an incriminating
response. The court further held that Lt.
Rosa’s statement—that Trinque should not
make a statement until he was taken to the
Lihu‘e police station—was presupposition on
Lt, Rosa’s part and that it “wrongly informed
[Trinque] that his statement would be taken
once they read him his rights.”

As to Statement 8, the cireuit court con-
cluded that it “was a ‘fruit’ or an exploitation
of the prior illegality of the ‘pre-interview’
conducted by [Lt.] Rosa.” The court held that
Statement 3 was not sufficiently attenuated
from Lt. Rosa’s unauthorized, pre-Miranda
interview for the taint of the prior illegality
to dissipate because (1) the same officer (Lt.
Rosa) remained with Trinque through the
entire process; (2) Statement 8 came within
hours of the pre-interview Miranda violation;
and (8) Statement 3, elicited post-Miranda,
was in effect the same thing Trinque said to
Lt. Rosa (Statement 2).

9. The circuit court's Order Denying Voluntari-
ness was predicated on its suppression ruling in
favor of Trinque: ‘The Court having taken judi-
cial notice of the files and records herein and
having heard evidence and argument in the mat-

275

The circuit court therefore granted Trin-
que’s Motion to Suppress Statements and
issued an Order Suppressing Statements and
an Order Denying State of Hawaii’s Volun-
tariness of Statements.? The State timely
appealed from these orders,

C. Appellate Proceedings

The State raised two issues in its appeal:
(1) whether the trial court erred in conclud-
ing that Statement 2 was the product of a
custodial interrogation and in suppressing
Statement 2 on that basis; and (2) whether
the trial court erred in suppressing State-
ment 3 as the unlawful fruit of Statements 1
and 2. The State did not challenge the sup-
pression of Statement 1,

In a published opinion, the ICA held that
the circuit court erred in suppressing State-
ment 2 on Miranda grounds because State-
ment 2 was made when Lt, Rosa told Trin-
que that he should not make any statements
until he had been advised of his constitutional
rights. State v. Trinque, 187 Hawai‘ 180, 188,
366 P.8d 186, 189 (App. 2016), cert. granted,
No. SCWC-12-0001017, 2016 WL 3129189
(Haw. June 2, 2016). The ICA noted that
“there was no basis for the circuit court to
conelude that [Lt.] Rosa should have known
that his words or actions in telling Trinque
not to speak were reasonably likely to elicit
an incriminating response.” Id,

Further, the ICA concluded that neither
Statement 2 nor Statement 3 was subject to
suppression as an unlawful fruit of previous
statements. Id, at 184, 366 P.8d at 190. The
ICA held that Statement 2 was not an unlaw-
ful fruit of Statement 1 because the police did
not exploit Statement 1 to obtain Statement
2. Id. The ICA also held that Statement 3
was not subject to suppression as an unlawful
fruit of Statement 2 because Statement 2 was
not the product of interrogation. Id, In addi-
tion, the ICA determined that Statement 3
was not a fruit of Statement 1 because Trin-
que made Statement 3 post-Miranda, police
did not exploit Statement 1 to obtain State-

ter, and having GRANTED [Trinque’s] Motion to

Suppress Statements, hereby ORDERS that the

State’s Motion to Determine Voluntariness of
Statements is hereby DENIED.”

276 [|

ment 8, and Statement 3 was a non-respon-
sive reply to the question asked. Id.

The ICA vacated the circuit court’s Order
Suppressing Statements and Order Denying
Voluntariness of Statements, and the case
was remanded to the circuit court for further
proceedings. Id. at 185, 366 P.3d at 191. On
certiorari, Trinque presents the following
question: whether the ICA gravely erred in
vacating the circuit court’s decision suppress-
ing Statements 2 and 8 to the police.

Il. STANDARDS OF REVIEW

TH This court reviews a trial court’s
factual findings under the clearly erroneous
standard. State v. Romano, 114 Hawai‘ 1, 8,
155 P.3d 1102, 1109 (2007).

A finding of fact is clearly erroneous when,

despite evidence to support the finding, the

appellate court is left with the definite and
firm conviction in reviewing the entire evi-
dence that a mistake has been committed.

A finding of fact is also clearly erroneous

when the record lacks substantial evidence

to support the finding. We have defined
substantial evidence as credible evidence
which is of sufficient quality and probative
value to enable a person of reasonable
caution to support a conclusion.
Lambert v. Waha, 187 Hawai'i 428, 431, 375
P.8d 202, 210 (2016) (quoting Bremer _v.
Weeks, 104 Hawai'i 48, 51, 85 P.8d 150, 158
(2004)). A trial court’s conclusions of law are
reviewed under the right/wrong standard,
State v. Joseph, 109 Hawaii 482, 493, 128
P.8d 795, 806 (2006). Where a conclusion of
law “presents mixed questions of fact and
law,” it “is reviewed under the clearly erro-
neous standard because the court’s conclu-
sions are dependent upon the facts and cir-
cumstances of each individual case.” State v.
Furutani, 76 Hawai‘ 172, 180, 873 P.2d 51, 59
(1994) (quoting AIG Haw. Ins. Co. v. Estate

10. The relevant portion of article I, section 10
that embodies the Miranda requirement states
that “[nJo person shall be ... compelled in any
criminal case to be a witness against oneself.”
Haw. Const. art, I, § 10.

11. This court decreed that Miranda protections
“have an independent source in the Hawai
stitution’s privilege against self-incrimination” in
Santiago, 53 Haw. at 266, 492 P.2d at 664, In
that case, not only did this court incorporate

of Caraang, 74 Haw. 620, 629, 851 P.2d 321,
826 (1998).

IV. DISCUSSION

HM The privilege against self-incrimi-
nation guaranteed by article I, section 10 of
the Hawaii Constitution requires that Mi-
vanda warnings be given to an accused in
order for statements obtained during custodi-
al interrogation to be admissible at trial.!?
State v. Joseph, 109 Hawai'i 482, 498-94, 128
P.3d 795, 806-07 (2006). It is well settled that
Miranda is

a constitutionally prescribed rule of evi-

dence that requires the prosecution to lay

a sufficient foundation—ie,, that the requi-

site warnings were administered and valid-

ly waived before the accused gave the
statement sought to be adduced at trial—
before it may adduce evidence of a defen-
dant’s custodial statements that stem from
interrogation during his or her criminal
trial.
State _v. Ketchum, 97 Hawai'i 107, 117, 34
P.8d 1006, 1016 (2001). Thus, unless Miranda
warnings are given, statements made by the
accused that result from custodial interroga-
tion, along with the fruits of such statements,
“may not be used either as direct evidence in
the prosecutor’s case in chief or to impeach
the defendant's credibility during rebuttal or
cross-examination.” Joseph, 109 Hawai'i at
493-94, 128 P.8d at 806-07 (quoting State v.
Santiago, 58 Haw. 254, 265-66, 492 P.2d 657,
664 (1971); see State _v. Pebria, 85 Hawai'i
171, 174-75, 988 P.2d 1190, 1198-94 (1997)."

The illegality in obtaining Statement 1 in
this case is undisputed, so two issues remain
for this court’s resolution: (1) whether State-
ment 2 was obtained as a result of pre-
Miranda custodial interrogation and in viola-
tion of Trinque’s right to remain silent and

Miranda into the Hawai‘i Constitution, the court
also broadened Miranda protections based on the
Hawai'i Constitution, See id, (disagreeing with
the U.S, Supreme Court's holding in Harris v.
New York, 401 U.S. 222, 91 S.Ct. 643, 28
L.Ed.2d 1 (1971), and concluding that statements
elicited through pre-Miranda custodial interroga-
tion may not be used at trial for impeachment
purposes).

(2) whether Statement 8 is a fruit of State-
ment 1, Statement 2, or both.

A. Whether Statement 2 was obtained in
violation of Trinque’s right to remain
silent as a result of “un-Mirandized
custodial interrogation”

Trinque argues that the circuit court cor-
rectly suppressed Statement 2 because Lt.
Rosa subjected him to custodial interrogation
prior to advising him of his Miranda rights,
Trinque contends that, while Lt. Rosa did not
expressly question him, Lt. Rosa’s state-

“constituted custodial interrogation as
they were designed to invoke an incrimina-
ting response.” Trinque maintains that Lt,
Rosa’s statements were made for “no legiti-
mate reason ... other than to ingratiate
himself to Trinque” and “entice him into
making a statement.”

HI Pursuant to article I, section 10 of the
Hawai'i Constitution, a statement made be-
fore the defendant is apprised of his or her
Miranda rights is not constitutionally elicited
if it is established that the “statement was
the result of (1) ‘interrogation’ that occurred
while he or she was (2) ‘in custody,’” State v.
Kazanas, 188 Hawai'i 23, 35, 375 P.8d 1261,
1278 (2016) (quoting Ketchum, 97 Hawai'i at
118, 84 P.8d at 1017). In this case, there is no
dispute that Trinque was in custody when Lt.
Rosa elicited Statement 2 from Trinque, as
Trinque was already arrested and hand-
cuffed. See State v. Bli, 126 Hawai'i 510, 521-
22, 273 P.8d 1196, 1207-08 (2012) (concluding
that the defendant was deprived of his free-
dom in a significant way after he had been
placed under arrest); accord Kazanas, 188
Hawai'i at 85, 875 P.8d at 1278; State _v.
Amorin, 61 Haw. 356, 360, 604 P.2d 45, 48
(1979). Thus, the decisive issue is whether Lt.
Rosa’s actions constituted “interrogation” un-
der article 1, section 10.

Hl As previously explained by this court,
“interrogation” encompasses “not only ...

12. A “practice” includes any method or proce-
dure that law enforcement officers use in the
course of interacting with individuals in custody,
regardless of whether such method or procedure
is officially approved by the law enforcement
department with which the officers are em-
ployed. See, e.g., Joseph, 109 Hawai'i at 495, 128
P.3d at 808 (pre-interview for the purpose of

277

express questioning, but also ... any words
or actions on the part of the police (other
than those normally attendant to arrest and
custody) that the police should know are
reasonably likely to elicit an incriminating
response from the suspect.” State v. Joseph,
109 Hawai'i 482, 495, 128 P.3d 795, 808 (2006)
(quoting State v. Jenkins, 1 Haw.App. 430,
487-88, 620 P.2d 268, 269 (1980)).

The latter portion of the definition focuses
primarily upon the perceptions of the sus-
pect, rather than the intent of the police.
This focus reflects the fact that the Mi-
randa safeguards were designed to vest _a
suspect in custody with an added measure
of protection against coercive police prac-
tices, without regard to objective proof of
the underlying intent of the police. A prac-
tice that the police should know is reason-
ably likely to evoke an incriminating re-
sponse from _a suspect thus amounts to
interrogation,

Id; accord Kazanas, 188 Hawai‘i at 39, 375

P.8d at 1277.

HE Thus, “interrogation” is “any
practice reasonably likely to invoke an in-
criminating response without regard to_ob-
jective evidence of the intent of the police.”
Joseph, 109 Hawaii at 495, 128 P.8d at 808
(emphasis added). “An incriminating re-
sponse’ refers to both inculpatory and exeul-
patory responses.” Id. (citing State _v. Wal-
Jace, 105 Hawai'i 131, 187, 94 P.3d 1275, 1281
(2004)).

HM There are several important consid-
erations in this court’s definition: “interroga-
tion” under Miranda refers to (1) any words,
actions, or practice on the part of the police,
not only express questioning, (2) other than
those normally attendant to arrest and custo-
dy, and (8) that the police should know is
reasonably likely to invoke an incriminating
vesponse,

obtaining a statement); Kazanas, 138 Hawai'i at
40, 375 P.3d at 1278 (asking the defendant in the
police department's private room in the hospital
how his night was going); Eli, 126 Hawai'i at
522-23, 273 P.3d at 1208-09 (officer “asking
Defendant for his side of the story and indicating
that it was his chance to give that story”).

278

Hl In this case, Trinque was arrested in
the late evening in an open pasture. Upon his
arrest, police handeuffed Trinque, escorted
him from the pasture, and then ordered him
to sit on a wooden bench while still hand-
cuffed. Lt. Rosa approached Trinque and
identified himself as Lt. Rosa from the Nar-
cotie Unit of KPD, Lt, Rosa then explained
to Trinque that he was the police officer who
had worked on Trinque’s daughter’s case. Lt.
Rosa told Trinque “that if [Trinque] did not
believe him, he could talk to his daughter
about it.” Lt, Rosa then continued with trust-
building statements. He told Trinque that he
would not lie to him, He advised Trinque that
he “wouldn’t jerk his chain.” Finally, Lt.
Rosa informed Trinque that “he would be
completely honest” with him, Only after giv-
ing Trinque all of these personal assurances
regarding his trustworthiness did Lt, Rosa
tell Trinque not to make any more state-
ments until he was taken to the police station
in Lihu‘e. Trinque responded, “What for?
You caught us red-handed; times are hard
and we needed the money.”

While Lt. Rosa’s introduction of himself to
Trinque as a police officer may have been
normal procedure that typically attends ar-
rests, all of the other words and actions that
Lt. Rosa directed to Trinque cannot be char-
acterized as anything other than an attempt
to erode Trinque’s guard so that Trinque
would freely talk in a manner that would
incriminate himself. As aptly determined by
the cireuit court, Lt. Rosa’s words and con-
duct had “no legitimate reason” and “were
designed to garner the trust of the defen-
dant, invite the defendant to be honest ...,

13. The ICA stated that it is unclear why it would
be improper for Lt. Rosa “to inform Trinque that
he had worked on Trinque’s daughter's case and
to tell Trinque that he would not lie to Trinque
and would be completely honest with Trinque”
since this was simply an “apparent attempt to
develop rapport with Trinque.” State v. Trinque,
137 Hawai'i 130, 133, 366 P.3d 186, 189 (App.
2016), cert. granted, No. SCWC-12-0001017,
2016 WL 3129189 (Haw. June 2, 2016). Howev-
er, Lt. Rosa’s repeated personal assurances to
Trinque, including references to Trinque’s
daughter, were, as determined by the circuit
court, intended to earn Trinque's trust, invited
Trinque to be honest and to open up, and were
reasonably likely to elicit an incriminating state-
ment from Trinque.

and invite the defendant to open up,” By
stating that he helped Trinque’s daughter in
a previous matter, Lt. Rosa’s words may
have been reasonably understood by Trinque
as an offer of similar assistance or at least as
an assurance that Lt, Rosa was an ally when
in fact he was in an adversarial position. See
Kazanas, 188 Hawai'i at 40, 875 P.8d at 1278
(reasoning that the police officer is part “of a
system that was adversarial to” the defen-
dant, such that the police officer engaging in
a conversation with an arrestee “could not be
‘solely in [the arrestee’s] best interest’ ”),
Couple this with Lt, Rosa’s statement that he
would be honest and not lie to Trinque and
that he would not “jerk [Trinque’s] chain”
and it is readily apparent that the circuit
court did not clearly err in finding that Lt.
Rosa was attempting to garner Trinque’s
trust so that Trinque would open up.!8

HH Although Lt. Rosa testified that his
intent in initiating the conversation with
Trinque was merely to identify himself as a
police officer, as he was unshaven and in
civilian clothing, Lt, Rosa’s intent is not de-
terminative in analyzing whether his words
and conduct amounted to interrogation. Jo-
seph, 109 Hawaii at 495, 128 P.3d at 808
(stating that whether an interrogation had
transpired primarily focuses on the percep-
tions of the defendant); Kazanas, 188 Hawai'i
at 89-40, 875 P.8d at 1277-78 (noting that a
police officer’s “subjective intent” may not be
used to excuse conduct that reasonably could
have elicited an incriminating response from
the defendant).4

Indeed, the circuit court firmly rejected
Lt. Rosa’s explanation of his motive, and the

14, Intent of police officer “may be relevant
where, for example, ‘a police practice is designed
to elicit an incriminating response from the ac-
cused,’ as it would be ‘unlikely that the practice
will not also be one which the police should have
known was reasonably likely to have that ef-
fect,’ "" Kazanas, 138 Hawai'i at 39-40, 375 P.3d
at 1277-78 (quoting Rhode Island v. Innis, 446
U.S. 291, 301 n.7, 100 S.Ct. 1682, 64 L.Ed.2d
297 (1980). Thus, while police intent may not be
used to excuse conduct that reasonably could
have elicited an incriminating response, it may
be used as “evidence that the police know that
they have designed a practice reasonably meant
to elicit incriminating responses’—that is, a
practice amounting to interrogation. Id.

court did not clearly err in this regard. Not
only was that court in the best position to
evaluate credibility, but the circumstances
plainly contradict Lt. Rosa’s explanation, Lt.
Rosa was wearing a police badge, and Trin-
que and Martinez were both under arrest
and handcuffed. Several other officers were
in the area, If Lt, Rosa’s sole intention was
to identify himself as a police officer, he
would have had to do no more than show
Trinque his badge and identify himself in
order to establish his status as a police offi-
cer. If Lt, Rosa merely intended to introduce
himself to Trinque, then there was no legiti-
mate reason for him to say that he assisted
Trinque’s daughter in a previous matter, that
he would be honest and truthful to Trinque,
and that he would not “jerk [Trinque’s]
chain.”

Tn addition, Lt, Rosa’s statement to Trin-
que to not make any more statements until
he was taken to the police station in Lihu‘e
was inaccurate—for Trinque was not re-
quired to make a statement even after he
had been advised of his constitutional
rights—and Trinque may have reasonably
been given the impression that he might as
well speak to Lt, Rosa then and there, since
he would be making a statement at the sta-
tion anyway. Essentially, Lt. Rosa was im-
plicitly inviting Trinque to speak since he
(Lt. Rosa) would be honest, helpful, and
truthful while another police officer may or
may not be, Under the circumstances of this
case, where Lt, Rosa ingratiated himself to
Trinque and implied that he was someone
who might be able to provide some form of
assistance, the wording of Lt. Rosa’s flawed
advisory (“to not make any more statements
until he was taken to the police station”) was
reasonably likely to elicit Statement 3 (“What
for? You caught us red-handed; times are

15, The ICA concluded that Lt. Rosa’s statement
was entirely appropriate, reasoning that “lilt is
difficult to see how telling a defendant not to
make a statement can constitute ‘interroga-
tion.’” Trinque, 137 Hawai'i at 133, 366 P.3d at
189, However, Lt. Rosa’s defective advisory may
not be viewed in isolation; it followed a series of
statements that the circuit court correctly viewed
as having no legitimate reason and was designed
to garner Trinque’s trust so that he would open
up. Viewing all of these statements in conjunc-
tion with the incorrectly stated advisory, Lt.
Rosa’s words and actions were reasonably likely

279

hard and we needed the money.”). Indeed,
Trinque’s reply (“What for?”) was directly
responsive to Lt. Rosa’s advisory." Alterna-
tively, Lt. Rosa’s words could objectively be
viewed as an attempt to establish himself as
a confidante, off the record, so that when it
became time to provide the Miranda warn-
ings, Trinque would trust Lt. Rosa as some-
one who would not pull his chain and thus
making it more likely that Trinque would
waive his Miranda rights.

The State relies on State _v. Ikaika, 67
Haw, 568, 698 P.2d 281 (1985), in arguing
that Lt, Rosa’s words and conduct were a
mere pleasantry that did not amount to inter-
rogation, The defendant in Ikaika confessed
to a police officer, who was acquainted with
the defendant, after the police officer asked,
“What’s happening? Must be heavy stuff for
two detectives to bring you down here?” Id,
at 565, 698 P.2d at 283. This court held that
the police officer’s statement was a mere
“pleasantry” not amounting to interrogation
and that the defendant’s “confession was of
the nature of an unsolicited, spontaneous
statement made in the absence of any police
questioning.” Id, at 567, 698 P.2d at 285,
Ikaika is inapposite for the reasons enumer-
ated in Kazanas,!6

As explained by the Kazanas court, the
police officer and the defendant in Ikaika
were previously acquainted, and the police
officer was unaware of the circumstances
surrounding the defendant's arrest. See Ka-
zanas, 188 Hawai'i at 88, 875 P.38d at 1276;
Ikaika, 67 Haw. at 565, 698 P.2d at 288, Thus,
in Ikaika, the police officer’s words reason-
ably could be characterized and perceived by
the defendant as a pleasantry not likely to
elicit an incriminating response. Kazanas, 138
Hawai'i at 88, 375 P.8d at 1276; Ikaika, 67
Haw. at 567, 698 P.2d at 284-85 (reasoning

to elicit, and did elicit, an incriminating response
from Trinque.

16. The issue in Kazanas was whether the defen-
dant, post-arrest, should have been advised of his
Miranda rights before the police officer engaged
him in small talk while they were inside HPD’s
private room at a hospital—a conversation that
then resulted in the defendant's utterance of an
incriminating statement. Kazanas, 138 Hawai'i
at 26, 40, 375 P.3d at 1264, 1278.

280

that, under the facts of the case, the police
officer could not “have or should [not] have
reasonably foreseen that his words or actions
would elicit an incriminating response from
the Defendant” and that, “[a]t most, [the
police officer] could have expected that the
Defendant respond to his pleasantry by in-
forming him of the reasons for the Defen-
dant’s being booked and the case he was
involved in”).

Tn this case, as in Kazanas, Lt, Rosa and
Trinque were not previously acquainted; in
fact, the night of Trinque’s arrest was the
first time that Lt. Rosa met him. See Kaza-
nas, 188 Hawai'i at 38, 375 P.3d at 1276, In
addition, just like the police officer in Kaza-
nas, Lt. Rosa knew the circumstances behind
Trinque’s arrest since he was previously
briefed on the matter. See id. Thus, when Lt.
Rosa stated that he assisted Trinque’s
daughter on a previous case, that he would
be honest and not lie to Trinque, and that he
would not “jerk [Trinque’s] chain,” Lt, Rosa’s
statements deliberately ingratiated himself to
Trinque and cannot be taken as “a mere
pleasantry.” See id,

It is also noted that the police officer’s
conduct in Kazanas that this court held as
constituting interrogation was less egregious
than Lt, Rosa’s conduct in this case. In Kaza-
nas, the police officer did not guarantee to
the defendant that she would be honest and
truthful and did not ingratiate herself to the
defendant or imply that she may be able to
offer some assistance for the defendant’s
benefit; the police officer in Kazanas solely
asked a question whose answer she already
knew and that, objectively viewed, was rea-
sonably likely to evoke an incriminating re-
sponse, Id, at 26, 375 P.3d at 1264. Here, Lt.
Rosa expressly claimed that he would be
honest and truthful and that he would not,
mislead Trinque. And by stating that he
helped Trinque’s daughter in the past, Lt.

17. Trinque also argues that Statement 2 was a
“fruit of the poisonous tree” because Trinque’s
statement to Officer Silva (Statement 1) was ille-
gally obtained. The circuit court suppressed
Statement 2 based on the conclusion that it was
elicited through an unlawful, pre-Miranda custo-
dial interrogation. The circuit court did not ad-
dress whether Statement 2 should be suppressed
as an illegal fruit of Statement 1. The ICA ruled
that Statement 2 should not have been sup-

Rosa at least intimated that he was a friendly
party, that he may be able to similarly assist
Trinque, and that he should not be viewed as
an adversary. See id. at 40, 375 P.3d at 1278,

In summary, Trinque was in custody when
the exchange with Lt. Rosa occurred because
he was handcuffed, and Lt. Rosa’s words or
actions were reasonably likely to elicit an
incriminating response from Trinque, id., be-
cause (1) Lt. Rosa stated that Trinque could
trust him, that he would not mislead Trinque,
and that he would be honest; (2) Lt. Rosa
intimated that he was a friendly party given
that he had previously assisted Trinque’s
daughter in another case; (8) Lt. Rosa’s in-
gratiating words and actions towards Trin-
que had no legitimate reason other than to
invoke Trinque’s trust and to induce him to
open up; and (4) Lt. Rosa misinformed Trin-
que of his constitutional rights, Accordingly,
Statement 2 was elicited by an unlawful, pre-
Miranda custodial interrogation, and there-
fore, the cireuit court did not clearly err in
suppressing this statement pursuant to arti-
cle I, section 10 of the Hawai'i Constitution.
The ICA erred in concluding otherwise.!”

B. Whether Statement 3 was tainted by
Statements 1 and 2 under the “fruit
of the poisonous tree” doctrine

Trinque argues that Statement 3 was cor-
rectly suppressed by the circuit court as a
“fruit of the poisonous tree” of the unlawfully
obtained statement he made to Officer Silva
(Statement 1) because Statement 3 was made
only a few hours after Statement 1 and there
was a direct connection between Statement 1
and Statement 3. In addition, Trinque con-
tends that Statement 3 is a fruit of State-
ment 2 because Statement 3 was made within
hours after Statement 2 and was a direct
result of Lt. Rosa’s unlawful, pre-Miranda
interrogation. The ICA ruled that Statement

pressed for two reasons: because it was not a
product of an illegal interrogation and because it
‘was not an illegal fruit of Statement 1, Because
‘we conclude that Statement 2 was a product of
an unlawful, pre-Miranda custodial interroga-
tion, we need not reach the issue of whether
Statement 2 is a fruit of Statement 1. However,
our disposition should not be viewed as an en-
dorsement of the ICA's resolution of this issue,

8 was not subject to suppression as the un-
lawful fruit of Statement 1 or Statement 2.

WN “[T)he ‘fruit of the poisonous
tree’ doctrine ‘prohibits the use of evidence
at trial which comes to light as a result of the
exploitation of a previous illegal act of the
police.’” State v. Fukusaku, 85 Hawai'i 462,
475, 946 P.2d 32, 45 (1997) (quoting State v.
Medeiros, 4 Haw.App. 248, 251 n.4, 665 P.2d
181, 184 n.4 (1988). “Under the fruit of the
poisonous tree doctrine, [a]dmissibility is de-
termined by ascertaining whether the evi-
dence objected to as being ‘fruit? was discov-
ered or became known by the exploitation of
the prior illegality or by other means suffi-
ciently distinguished as to purge the later
evidence of the initial taint.” State v. Poaipu-
ni, 98 Hawai'i 387, 392-93, 49 P.8d 353, 358-
59 (2002) (alteration in original) (quoting Fu-
kusaku, 85 Hawai'i at 475, 946 P.2d at 45).

Where the government proves that the

evidence was discovered through informa-

tion from an independent source or where
the connection between the illegal acts and
the discovery of the evidence is so attenu-
ated that the taint has been dissipated, the
evidence is not a ‘fruit? and, therefore, is

admissible... .

Id, (quoting Fukusaku, 85 Hawai'i at 475, 946
P.2d at 45).8

HM “In other words, the ultimate ques-
tion that the fruit of the poisonous tree doc-
trine poses is as follows: Disregarding the
prior illegality, would the police nevertheless
have discovered the evidence?” Id, at 898, 49
P.8d at 359. As applied to this case, the
question posed is as follows: Would the police
have obtained Statement 3 had they not vio-
lated Trinque’s constitutional rights in ob-
taining Statements 1 and 2.

Accordingly, the State’s burden is to dem-
onstrate that Statement 8 is not a benefit
gained or an advantage derived by the police
from the prior illegality or that the subse-
quent statement has become sufficiently at-
tenuated from the initial illegality so as to
“have charecureed the dependent source doe

trine as an ‘exception’ to the exclusionary rule, it

is, in essence, simply a corollary of the fruit of
the poisonous tree doctrine.” Poaipuni, 98 Ha-

wai'l at 393 n.6, 49 P.3d at 359 n.6. That is, if a
confession or other evidence has an independent

281

purge the taint. See State v. Eli, 126 Hawai'i
510, 524, 278 P.8d 1196, 1210 (2012) (reason-
ing that the State must demonstrate that the
subsequent statement or confession was not
predicated on the initial illegality); State v.
Kitashiro, 48 Haw. 204, 218—22, 397 P.2d
558, 566—68 (1964) (holding that the State
must prove that the illegal search did not
“induce” the defendant’s subsequent confes-
sion).

Hawai'i appellate courts have previously
pronounced that whether a confession is suf-
ficiently attenuated from the illegality de-
pends on the facts of a particular case, and
factors relevant to the analysis include (1)
the temporal proximity between the official
misconduct and the subsequently procured
statement or evidence, (2) the presence of
intervening circumstances, and (8) the pur-
pose and flagrancy of the official misconduct.
See Eli, 126 Hawai'i at 524, 278 P.8d at 1210;
State v. Mariano, 114 Hawai'i 271, 281, 160
P.3d 1258, 1268 (App. 2007).%

In determining what constitutes exploita-
tion that taints subsequently obtained evi-
dence, previous “fruit of the poisonous tree”
cases decided by this court are instructive. In
State v. Joseph, this court held that a previ-
ous illegality was exploited to elicit a state-
ment or confession where the defendant,
post-Miranda, “was subsequently questioned
on the same matter in order that he would
repeat his earlier[, illegally obtained] state-
ment.” 109 Hawaii 482, 499, 128 P.38d 795,
812 (2006). In Poaipuni, this court held that
the physical evidence was inadmissible be-
cause it “came to light only as a result of the
exploitation of the previous illegality, i.e., the
execution of the defective search warrant.”
Poaipuni, 98 Hawai'i at 898, 49 P.3d at 859.
As to the subsequent confession, the Poaipu-
ni court explained that it was also tainted by
the unlawfully obtained physical evidence be-
cause, had the physical evidence not been
discovered, the officer would not have asked

source, then it is not a fruit of the poisonous tree.
id.

19. See also Brown v. Illinois, 422 U.S. 590, 603-
04, 95 S.Ct. 2254, 45 L.Ed.2d 416 (1975).

282

the question that resulted in the defendant's
confession. Id. at 394, 49 P.8d at 360,

In Hii, this court explained that the defen-
dant’s “purported ‘waiver’ of his right to
remain silent, made after Miranda warnings,
was directly ‘predicated’ on his agreement,
pre-Miranda, to make a statement,” an
agreement that he made without being ap-
prised of his right to remain silent. Eli, 126
Hawai'i at 524, 278 P.3d at 1210, Under these
circumstances, the court held that “the Mir-
andized statement was obtained by exploiting
the illegality of the pre-interview procedure.”
Id, That is, the advantage derived from the
improper police pre-interview procedure
played a role in the statement obtained de-
spite the intervention of properly adminis-
tered Miranda warnings.

The common thread that unifies these
cases is that the prior illegality contributed
in the subsequent obtainment of evidence,
statements, or confessions. Viewed another
way, these cases involved the situation in
which the State failed to demonstrate that
the subsequently obtained evidence, state-
ments, or confessions would have been dis-
covered even in the absence of the prior
illegality. That is, the State was unable to
meet its burden of showing that the discov-
ery of the challenged evidence was not a
benefit derived from the prior illegality.

HH In this case, the circuit court held
that Statement 3 was an exploitation of the
prior illegality of Lt. Rosa’s “pre-interview”
and, thus, inadmissible as evidence under
“the fruit of the poisonous tree” doctrine.
The cireuit court concluded that the State
failed to demonstrate that the statement was
“sufficiently attenuated” from the illegally
obtained Statements 1 and 2 to dissipate the
taint of the police officers’ Miranda violation,
‘The circuit court cited three reasons: (1) the
same officer, Lt, Rosa, remained with Trin-
que through the entire process; (2) State-
ment 8 came within hours after Lt. Rosa’s
“pre-interview” Miranda violation; and (8)
Statement 8 was “in effect the same thing
{Trinque] said to [Lt.] Rosa pre-Miranda,”

HM The cirevit court's ruling—that
Statement 3 was a fruit of Statements 1 and
2—is not clearly erroneous and supported by

the State’s failure to introduce adequate evi-
dence tending to demonstrate that Statement
8 would still have been obtained had the
previous illegality that resulted in the utter-
ance of Statements 1 and 2 not occurred. The
State does not discharge its burden of show-
ing attenuation by relying on “surmise and
inference.” Kitashiro, 48 Haw. at 222, 397
P.2d at 568 (explaining that evidence showing
that there was “an independent origin [for]
the confession was ... necessary in order for
the trial court to exercise its fact-finding
prerogative in respect of the contention that
the confession was tainted”); State v, Pau‘u,
72 Haw. 505, 511, 824 P.2d 888, 887 (1992)
(holding that “[t]he State’s argument [was]
not based on any evidence but is merely
surmise and speculative inference,” such
“that the State ha[d] failed to meet its bur-
den of showing that the taint of the prior
illegal search had been dissipated or that
there was an independent source which in-
duced [the defendant] to waive his constitu-
tional rights”), In addition, the State did not
sufficiently establish an “independent origin”
for Statement 3. See Kitashiro, 48 Haw, at
221-22, 897 P.2d at 567-68 (holding that the
confession was a fruit of the illegal search in
part because the State failed to establish by
substantial evidence that the confession had
an independent source).

The circuit court’s determination that
Statement 8 was not sufficiently attenuated
from Statements 1 and 2 is also supported by
the record and, hence, not clearly erroneous.
Statement 8 was made within approximately
three hours after Statements 1 and 2 and,
contrary to the State’s assertion, the fact
that Statement 8 was made in a different
location does not demonstrate sufficient at-
tenuation, Cf, id, at 218, 897 P.2d at 566
(initial illegality and subsequent confession
not sufficiently attenuated when, among oth-
er things, only three hours separated the
two).

The circuit court’s further determination
that there were no intervening circumstances
that sufficiently attenuated Statement 3 from
Statements 1 and 2 so as to purge the taint is
also not clearly erroneous. As stated by the
court, Lt. Rosa, who unlawfully elicited
Statement 2 from Trinque, was with Trinque

while he was transported to Lihu‘e. Addition-
ally, Lt. Rosa and Officer Silva, the latter of
whom was involved in the illegal procure-
ment of Statement 1, were both present dur-
ing the advisement of Miranda rights that
resulted in Trinque uttering Statement 3. Cf,
Joseph, 109 Hawai'i at 499, 128 P.8d at 812
(holding that there was lack of attenuation
between the illegal pre-interview and the
post-interview partly because the post-inter-
view “was conducted by the same two detec-
tives in the same interrogation room with no
lapse in time between it and the pre-inter-
view”); Eli, 126 Hawai'i at 524-25, 273 P.8d
at 1210-11 (holding that there was lack of
attenuation because “[b]oth the pre-interview
and post-Miranda interview were conducted
by the same detective”). Given that Officer
Silva was present when Trinque uttered
Statement 1, and because Lt. Rosa was the
officer who procured Statement 2, Trinque
‘was not in a neutral position to contradict or
recant these earlier statements, See Kitashi-
ro, 48 Haw. at 218, 397 P.2d at 566 (explain-
ing that the police used illegally seized evi-
dence “to instill in defendant a realization of
the hopelessness of his situation”); cf, Pau‘u,
72, Haw. at 510, 824 P.2d at 886 (reasoning
that the defendant had no choice but to
confess because the police already had the
evidence to convict him after illegally search-
ing the defendant’s bag and that, therefore,
the confession was a fruit of the illegal
search),”® Also notable is the fact that State-
ment 3 was made without the benefit of
counsel or after Trinque had an opportunity
to speak with family or friends. See Medei-
ros, 4 Haw.App. at 252-58, 665 P.2d at 184-85
(noting that the opportunity to speak with
counsel or family or friends is a relevant
consideration in determining taint).

20. The State contends that the hopelessness that
Trinque felt, which led to Statement 3, was the
result of his being caught by the police officers in
the marijuana patch and not at all related to the
illegal conduct of Lt. Rosa and Officer Silva,
However, this assertion as to the source of any
hopelessness appears to be based on supposition.
The circuit court rejected the State’s contentions
concerning sufficient attenuation of Statement 3
from the taint of Statements 1 and 2, and, based
on the evidence in the record, that finding is not
clearly erroneous, Cf, Pau‘, 72 Haw. at 511, 824
P.2d at 837 (holding that arguments regarding

283

HM Contrary to the ICA’s reasoning and
the State’s argument, the fact that State-
ments 1 and 2 were not referenced when
Statement 3 was elicited is not sufficient to
discharge the State’s burden of demonstrat-
ing that Statement 3 was not a benefit gained
by the police from Statements 1 or 2. Al-
though this court has held that express invo-
cation of the product of an initial illegality in
order to elicit a subsequent incriminating
statement is sufficient to show that the sub-
sequent statement is tainted, see, eg., Eli,
126 Hawai'i at 524, 278 P.8d at 1210, the fact
that no reference is made to the product of
the initial illegality does not establish that
the subsequent statement is not tainted”! If
non-reference were sufficient to disprove
taint, police officers could violate with impu-
nity a defendant's constitutional rights to
obtain a confession. For example, after ob-
taining a confession during a pre-Miranda
custodial interrogation, police officers could
apprise the defendant of his or her constitu-
tional rights and then refrain from mention-
ing the previous confession so that all post-
Miranda statements can be freely admitted
into evidence. This outcome would render
superfluous the fundamental guarantees of
Miranda by the simple artifice of not men-
tioning the earlier, illegally obtained state-
ment when eliciting the subsequent state-
ment,

HE While it is true that Statement 3 was
elicited during Officer Silva’s advisement of
Trinque’s Miranda rights, Miranda warnings,
by themselves, are not enough to attenuate
the taint of a prior illegality. Mariano, 114
Hawai‘i at 281, 160 P.8d at 1268. If “Miranda
warnings ... were held to attenuate the taint
of an unconstitutional arrest, regardless of
how wanton and purposeful the Fourth

the sufficient attenuation to dissipate the taint of
a prior illegality must be supported by evidence),

21, Further, as explained supra, Eli, Joseph, and
Poaipuni essentially were cases in which the
State failed to meet its burden of proving that the
prior illegality did not contribute to the subse-
quent discovery of the challenged evidence.
Those cases do not stand for the proposition that
explicit reliance by the police on the prior illegal-
ity is a prerequisite to finding that the subse-
quently obtained evidence is a fruit of the poison-
ous tree,

284

Amendment violation, the effect of the exclu-
sionary rule would be substantially diluted.”
Id, (quoting Brown, 422 U.S. at 602, 95 S.Ct.
2254); Joseph, 109 Hawaii at 487, 499, 128
P.8d at 300, 812 (subsequent statement,
made post-Miranda, was held to be a fruit of
the poisonous tree); Eli, 126 Hawai'i at 524,
273 P.8d at 1210 (accord). Viewed another
way, if Miranda warnings were sufficient to
attenuate the taint of a prior illegality, then
the warnings—which were designed to safe-
guard certain constitutional rights—would
become a means to legitimize the violation of
such rights,

The State further contends that State v.
Luton, 88 Hawai'i 448, 927 P.2d 844 (1996),
is controlling. In that case, this court held
that the defendant's subsequent confession
was not the fruit of his pre-Miranda state-
ments because the police officers did not
exploit an illegally obtained statement to
elicit the defendant’s subsequent confes-
sion.” Luton, 88 Hawai'i at 455, 927 P.2d at
856. However, Luton is entirely distinguish-
able from this case. First, the illegal state-
ment and the post-Miranda statement in Lu-
ton were made one day apart, in contrast to
a few hours in this case. See id. at 447, 927
P.2d at 848. Second, in Luton, the officers
who elicited the post-Miranda confession
were different from the one who obtained
the illegal pre-Miranda statement. Id. Here,
on the other hand, the same police officers
involved in illegally obtaining Statement 1
and Statement 2 were present in the interro-
gation room when Statement 8 was made,
and Officer Silva was the one who was advis-
ing Trinque of his constitutional rights when
Statement 8 was made. Third, and most sig-
nificantly, the defendant in Luton met with a
public defender, between the taking of the
unlawful statement and the subsequent
statement, and the public defender “advised
[Luton] not to say anything to anyone, in-
cluding the police.” Id, Nevertheless, the de-
fendant elected to speak to the police, Id, at
446, 927 P.2d at 847. Luton thus involved

22, Luton also noted the fact that the police did
not use the pre-Miranda statements to induce a
confession and did not reference the pre-Mi-
randa statements during the post-Miranda inter-
rogation. Luton, 83 Hawai'i at 455, 927 P.2d at
856, As discussed supra, the fact that the police

intervening circumstances—not present in
this case—that purged the taint. In light of
these facts, Luton is inapposite.

Accordingly, pursuant to article I, section
10 of the Hawaii Constitution, the State
failed to meet its burden of demonstrating
that Statements 1 and 2 did not taint State-
ment 3 or that Statement 3 was so attenuat-
ed from Statements 1 and 2 as to purge the
taint for the following reasons: (1) the State
failed to show that Statement 3 would still
have been elicited had the illegality that pro-
duced Statements 1 and 2 not occurred; (2)
the fact that neither Statement 1 nor State-
ment 2 was explicitly referenced in the
course of eliciting Statement 3 does not satis-
fy the State’s burden of demonstrating that
Statement 3 is untainted; (8) there were no
intervening circumstances to indicate that
the taint of Statements 1 and 2 had dissipat-
ed when Statement 3 was made; (4) the lapse
of time and change in location are inadequate
to demonstrate sufficient attenuation be-
tween Statements 1 and 2 and Statement 3;
and (5) under the circumstances of this case,
advising Trinque of his constitutional rights
did not attenuate Statement 3 from the prior
illegality in obtaining Statements 1 and 2.
Thus, Statement 3 was the fruit of State-
ments 1 and 2 and inadmissible into evidence.

V. CONCLUSION

We hold that Statement 2 is inadmissible
into evidence because it was the product of
pre-Miranda custodial interrogation and that
Statement 8 is the fruit of Statements 1 and
2, Accordingly, the circuit court’s rulings as
to Statements 2 and 8 were not clearly erro-
neous. For these reasons, we vacate the
ICA’s Judgment on Appeal; affirm the circuit
court's Order Suppressing Statements and
Order Denying Voluntariness of Statements;
and remand this case to the circuit court for
further proceedings,

in this case did not mention or reference State-
ments 1 and 2 when Trinque made Statement 3
and that Miranda warnings were provided before
Statement 3 was made does not suffice to satisfy
the State’s burden of proving that Statement 3 is
not a fruit of Statements 1 and 2.

400 P.3d 486

Gregory Shigeo YUKUMOTO and Diane
Yukumoto, Plaintiffs-Appellees,

v
Ruth TAWARAHARA, Defendant-
Appellee.
Hawai‘i Medical Service Association,
Intervenor-Plaintiff-Appellant,
v.
Ruth Tawarahara, Defendant-Appellee.
SCAP-15-0000460

Supreme Court of Hawai‘

MAY 26, 2017

a
nN

Dianne Winter Brookins, Honolulu, for ap-
pellant,

Woodruff K, Soldner, Honolulu, for appel-
lees, Gregory Yukumoto and Diane Yukumo-
to (Charles J. Ferrera for appellee Ruth
Tawarahara, with him on the brief),

RECKTENWALD, O.J., NAKAYAMA,
McKENNA, POLLACK, AND WILSON,
Jd.

OPINION OF THE COURT BY
RECKTENWALD, CJ.

TM This case presents an issue of first
impression: whether health insurers have
subrogation rights against third-party tort-
feasors who cause injury to their insureds,
For the following reasons, we conclude that a
health insurer does not have a broad, unre-
stricted right of subrogation, but rather is
limited to reimbursement rights established
by statute.

I, Background
A, The Accident

This case arises from an accident that oc-
eurred on March 20, 2014, when Gregory
Yukumoto was driving his moped in Honolu-
lu. Ruth Tawarahara, who was driving an
SUV, attempted to make a left turn in front
of Yukumoto, and struck him with her vehi-
ele, Yukumoto sustained serious injuries, in-
cluding brain injury, traumatic hemorrhagic
shock, acute respiratory failure, left tibial
fracture, right fibula fracture, L2 compres-
sion fracture, multiple wounds, and multiple
hematomas.

1, HRS § 663-10 (Supp. 2002) provides:

(@) In any civil action in tort, the court, be-
fore any judgment or stipulation to dis-
miss the action is approved, shall deter-
mine the validity of any claim of a lien
against the amount of the judgment or
settlement by any person who files timely
notice of the claim to the court or to the
parties in the action, The judgment en-
tered, or the order subsequent to settle-
ment, shall include a statement of the
amounts, if any, due and owing to any

287

B. Circuit Court Proceedings

Gregory Yukumoto and his wife, Diane,
filed a complaint against Ruth Tawarahara in
the Circuit Court of the First Circuit, Ha-
wai'i Medical Service Association (HMSA)
subsequently filed its “Notice of Claim of
Lien,” contending that HMSA had paid
$825,824.88 for medical expenses associated
with Yukumoto’s injuries as of September 20,
2014,

The Yukumotos filed a Petition for Deter-
mination of Validity of Claim of Lien by
HMSA pursuant to Hawai‘i Revised Statutes
(HRS) § 668-10 (Petition), According to the
Petition, Yukumoto’s wage loss and general
damages claim was “approximately
$4,000,000.” The Yukumotos contended that
Ruth Tawarahara had only $1,100,000 of in-
surance coverage through a State Farm In-
surance policy, which State Farm agreed to
pay “pursuant to a general damages only
release.” The Yukumotos and Tawarahara
had agreed to their settlement on November
6, 2011. Tawarahara did not admit fault for
the accident. Coupled with a $50,000 “under-
insured motorist claim” that the Yukumotos
submitted to GEICO Insurance, the Petition
contended that the Yukumotos’ “total recov-
ery, before payment of attorneys’ fees and
costs, was $1,150,000” and that “[tJhey re-
main undercompensated by approximately
$2,850,000.” Gregory Yukumoto’s HMSA
health insurance was provided through his
employer, the State of Hawai'i.

The Yukumotos sought “a ruling that
HMSA has no lien nor subrogation rights in
their personal injury settlements because
HMSA cannot satisfy the provisions of’ HRS
§ 663-10.! They alleged that under HRS

person determined by the court to be a
holder of a valid lien and to be paid to the
lienholder out of the amount of the corre-
sponding special damages recovered by
the judgment or settlement. In determin-
ing the payment due the lienholder, the
court shall deduct from the payment a
reasonable sum for the costs and fees in-
curred by the party who brought the civil
action in tort. As used in this section, lien
means a lien arising out of a claim for
payments made or indemnified from col-

288

§ 663-10, “[flor a health insurer to receive
any portion of a plaintiff's recovery from the
defendant, the health insurer has the burden
of proving that the settlement or recovery
duplicates medical expenses that were paid
by the health insurer.”

Lienor HMSA filed a memorandum in op-
position, arguing that the Petition should be
denied because HRS § 663-10 “does not ab-
rogate HMSA’s contractual lien or subroga-
tion rights, but rather provides HMSA with
an independent statutory right to assert its
lien on any amount that [the Yukumotos]
recover.” (Emphasis in original.) HMSA also
filed an Amended Notice of Claim of Lien for
the amount of $887,851.79, and a motion to
intervene in the action.

At a hearing on the Petition, the court
requested that the parties submit supplemen-
tal briefing on the legislative history and
intent of HRS § 663-10? Following the sub-
mittal of the supplemental briefing, the court
held another hearing. At that hearing,
HMSA contended that its “rights under 663-
10 to be reimbursed by Plaintiffs ... are
greatly facilitated by intervention” because it
would be able to make “formal discovery
requests.” HMSA represented that the pur-
pose of the discovery would be to assist the
court in making its “determinations under
[HRS §] 663-10” as to whether there was any

lateral sources, including health insurance
or benefits, for costs and expenses arising
out of the injury which is the subject of
the civil action in tort. If there is a settle-
ment before suit is filed or there is no civil
action pending, then any party may peti-
tion a court of competent jurisdiction for
a determination of the validity and
amount of any claim of a lien.

(b) Where an entity licensed under chapter
432 or 432D possesses a lien or potential
lien under this section:

(1) The person whose settlement or judg-
ment is subject to the lien or potential lien
shall submit timely notice of a third-party
claim, third-party recovery of damages, and
related information to allow the lienholder
or potential lienholder to determine the ex-
tent of reimbursement required. A refusal to
submit timely notice shall constitute a waiv-
er by that person of section 431:13-
103(a)(10). An entity shall be entitled to re-
imbursement of any benefits erroneously
paid due to untimely notice of a third-party
claim;

duplication between the settlement funds
paid by Tawarahara and the medical ex-
penses paid by HMSA. The Yukumotos con-
tended “that Hawaii's Unfair Claims Prac-
tices Act makes it illegal and an unfair claims
practice to limit the coverage to a Plaintiff
who has a third-party claim.” They argued
that HRS § 481:13-103(10) was “specifically
applicable to mutual benefit societies and
HMSAI,]” and HMSA was violating the stat-
ute by “ ‘refusing to provide or limiting cov-
erage available to an individual because the
individual may have a third-party claim.”
The Yukumotos further maintained that
HRS § 668-10 was an “anti-subrogation stat-
ute” and HMSA’s exclusive remedy, and that
the legislative history of HRS § 663-10 sup-
ported their position.

The court orally granted HMSA’s motion
to intervene at the hearing and subsequently
filed an order limiting discovery to “what is
contemplated under HRS § 668-10.” The
court also ruled that HRS § 663-10 abro-
gated HMSA’s right of subrogation against
Defendant Tawarahara, holding that the stat-
ute provided HMSA’s exclusive remedy “in
this particular type of situation,” based on
“the statute itself, the legislative history, and
the absence of any particular case lawl.]”

HMSA filed its complaint in intervention
(Complaint) in January 2015. HMSA con-

(2) A reimbursement dispute shall be sub-
ject to binding arbitration in lieu of court
proceedings if the party receiving recovery
and the lienholder agree to submit the dis-
pute to binding arbitration, and the process
used shall be as agreed to by the parties in
their binding arbitration agreement; and.
3) In any proceeding under this section to
determine the validity and amount of reim-
bursement, the court or arbitrator shall al-
low a lienholder or person claiming a lien
sufficient time and opportunity for discovery
and investigation.

For purposes of this subsection:

“Timely notice of a third-party claim” means
a reasonable time after any written claim or
demand for damages, settlement recovery, or
insurance proceeds is made by or on behalf of
the person.

“Third-party claim” means any tort claim
for monetary recovery or damages that the
individual has against any person, entity, or
insurer, other than the entity licensed under
chapter 432 or 432D.

2. The Honorable Rhonda A. Nishimura presided.

tended that it was a mutual benefit society as
defined in HRS Chapter 482 and that it was
a “ ‘lienholder or person claiming a lien’ pur-
suant to applicable laws, including but not
limited to HRS § 668-10, and has rights of
subrogation and other reimbursement rights
arising from its contract with Plaintiff Grego-
ry Yukumoto and at common law.” HMSA
asserted that it had “extended benefits on
behalf of Plaintiff Gregory Yukumoto in the
amount of $389,255.40 as of January 5, 2015.”
HMSA sought judgment against Defendant
Tawarahara in the sum of $339,255.40 “with
interest thereon at the rate of 10% per an-
num from date of judgment until paid,” as
‘well as payment of its fees and costs. HMSA
also filed a separate complaint against Ta-
warahara, seeking to ensure its subrogation
claim was preserved and to obtain payment
of medical benefits it extended on behalf of
Mr. Yukumoto.

Tawarahara filed a motion for partial dis-
missal of HMSA’s Complaint, arguing that
HMSA asserted subrogation claims which
the court determined “do not exist as a mat-
ter of law.” The Yukumotos filed a substan-

3. HRCP Rule 41(a)(2) (“Voluntary Dismissal: Ef
fect Thereof”) provides:

(2) By Order of Court. Except as provided in
paragraph (1) of this subdivision of this rule,
an action shall not be dismissed at the plain-
tiff’s instance save upon order of the court and
upon such terms and conditions as the court
deems proper. If a counterclaim has been
pleaded by a defendant prior to the service
upon the defendant of the plaintiff's motion to
dismiss, the action shall not be dismissed
against the defendant’s objection unless the
counterclaim can remain pending for indepen-
dent adjudication by the court. Unless other-
wise specified in the order, a dismissal under
this paragraph is without prejudice.
(Emphasis in original.)

4. HRS § 431:13-103(a)(10) (Supp. 2002) pro-
vides:

() The following are defined as unfair
methods of competition and unfair or decep-

tive acts or practices in the business of insur-
an

(10) Refusing to provide or limiting cover-
age available to an individual because the
individual may have a third-party claim for
recovery of damages; provided that:

(A) Where damages are recovered by judg-
ment or settlement of a third-party claim,
reimbursement of past benefits paid shall be
allowed pursuant to section 663-10;

289

tive joinder to Defendant Tawarahara’s mo-
tion for partial dismissal and a motion to
dismiss Defendant Tawarahara with preju-
dice, pursuant to Hawai'i Rules of Civil Pro-
cedure (HRCP) Rule 41(a)(2) (2012). HMSA.
opposed the motion, largely reiterating previ-
ous arguments.

In their answer to HMSA’s Complaint, the
Yukumotos contended that the Complaint
was barred by HRS § 481:18-103(a)(10) 4 and
663-10, and that because “[the Yukumotos’]
settlement with Defendant Ruth Tawarahara
was for general damages only,” HMSA “can-
not meet its burden of proving a duplication
of benefits and therefore has no reimburse-
ment rights herein.” In response, HMSA ar-
gued that it would be prejudiced by Tawara-
hara’s dismissal because it would lose its
“contract and common law” rights of subro-
gation against her.

At a hearing on the motions, the court
noted that the legislature has set up a proto-
col that is “very detailed in terms of ad-
dressing HMSA’s lien regarding its validity,
regarding the dollar amount” and that, re-

(B) This paragraph shall not apply to enti-
ties licensed under chapter 386 or 431:10C;
and

(C) For entities licensed under chapter 432
or 432D:

(It shall not be a violation of this section
to refuse to provide or limit coverage avail-
able to an individual because the entity de-
termines that the individual reasonably ap-
pears to have coverage available under
chapter 386 or 431:10C; and

Gi) Payment of claims to an individual who
may have a third-party claim for recovery of
damages may be conditioned upon the indi-
vidual first signing and submitting to the
entity documents to secure the lien and re-
imbursement rights of the entity and provid-
ing information reasonably related to the
entity's investigation of its liability for cover-
age.

Any individual who knows or reasonably
should know that the individual may have a
third-party claim for recovery of damages
and who fails to provide timely notice of the
potential claim to the entity, shall be deemed
to have waived the prohibition of this para-
graph against refusal or limitation of cover-
age. “Third-party claim” for purposes of this
paragraph means any tort claim for mone-
tary recovery or damages that the individual
has against any person, entity, or insurer,
other than the entity licensed under chapter
432 or 432DL]

290

garding duplication of funds, “they have set
up a process whereby discovery is intended,
and the court is allowing HMSA to conduct
discovery as to whether or not there is dupli-
cation such that their lien rights under [HRS
§ ] 663-10 [are] protected because if it’s du-
plicative, then there is a reimbursement.”

The court subsequently entered an order
granting the Yukumotos’ motion to dismiss
Defendant Tawarahara, dismissing all claims
against her with prejudice, The court also
ordered the Yukumotos’ counsel to retain
$389,255.40 from the settlement funds re-
ceived from Tawarahara in their client trust
account, as that was the amount set forth in
HMSA’s Notice of Claim of Lien,

Tawarahara filed a motion to consolidate
HMSaé’s separate lawsuit against her with
the underlying Yukumotos’ lawsuit, which
HMSA opposed. The court granted Tawara-
hara’s motion to consolidate,

Two days before the court granted the
motion to consolidate, HMSA filed a supple-
mental memorandum in opposition to the
Yukumotos’ Petition, HMSA asserted that it
did “not believe it [would] be able to meet its
burden to establish by a preponderance of
the evidence that the settlement proceeds
paid by Defendant Ruth Tawarahara to
Plaintiffs duplicate the medical benefits paid
by HMSA.”

Defendant Tawarahara filed a motion to
dismiss the case, Tawarahara argued that
HMSA had no standing to bring an action
against her because the court had ruled that
HMSaA’s subrogation rights were abrogated.
In opposition, HMSA argued that “its right
of subrogation against Tawarahara is sepa-
rate and independent from its right of reim-
bursement from Mr, Yukumoto under HRS
§ 668-10, and will survive the Court’s ruling
as to a distribution of the proceeds of the
pending settlement under HRS § 668-10,”
and that “a ruling by the Court that the
settlement does not duplicate the medical
benefits paid by HMSA will conclusively es-
tablish that Tawarahara is still liable to
HMSA for that element of damages resulting
from her tortious conduct.”

The court held a hearing on both the Yu-
kumotos’ Petition and Tawarahara’s motion

to dismiss, and orally granted the motion to
dismiss and agreed to release the Yukumo-
tos’ settlement funds to the Yukumotos’
counsel. The court entered its order granting
the Yukumotos’ Petition, ruling that “HMSA
is not entitled to a payment of the amount of
its claimed lien,” and permitting Plaintiffs’
counsel to release the settlement proceeds
that were being held in their client trust
account to the Yukumotos. The court entered
final judgment on May 28, 2015. HMSA time-
ly filed its Notice of Appeal.

C. HMSA’s Appeal and Application for
Transfer

In its opening brief, HMSA argued that
the “circuit court erred in ruling that HRS
§ 663-10 and/or HRS § 481:18-103(a)(10) ab-
rogates Appellant HMSA’s contractual and
common law rights in subrogation against a
third-party tortfeasor responsible for injury
to its insured.”

The Yukumotos and Tawarahara (Appel-
lees) filed a joint answering brief, which de-
tailed the legislative history of the two stat-
utes, stating that the Hawai‘i legislature
“made clear that health insurers have no
subrogation rights in personal injury settle-
ments, and specifically defined a health in-
surer’s ‘right of reimbursement’ as codified
under HRS § 668-10” and “determined that
a health insurer should be reimbursed from a
personal injury settlement to the extent that,
the settlement duplicated benefits paid by
the health insurer.”

In its reply brief, HMSA argued that there
‘was no evidence of legislative intent to abro-
gate its subrogation rights and that “[nlone
of [Appellees’] arguments provide citations to
the legislative history, because they find no
support there.” (Emphasis in original.)
HMSA also argued that State Farm Fire and
Cas. Co, v. Pacifie Rent-All, Inc., 90 Hawai'i
815, 978 P.2d 753 (1999) is directly applicable
to this case, and should have been applied by
the cireuit court.

HMSA filed an application for transfer to
this court, which we granted.

IL. Standards of Review

A. Statutory Interpretation
HE “Statutory interpretation is a ques-
tion of law reviewable de novo.” State_v.
Wheeler, 121 Hawai'i 888, 890, 219 P.8d 1170,
1177 (2009) Gnternal quotation marks omit-
ted). This court’s construction of statutes is
guided by the following rules:
First, the fundamental starting point for
statutory interpretation is the language of
the statute itself. Second, where the statu-
tory language is plain and unambiguous,
our sole duty is to give effect to its plain
and obvious meaning. Third, implicit in the
task of statutory construction is our fore-
most obligation to ascertain and give effect,
to the intention of the legislature, which is
to be obtained primarily from the language
contained in the statute itself. Fourth,
when there is doubt, doubleness of mean-
ing, or indistinctiveness or uncertainty of
an expression used in a statute, an ambigu-
ity exists.
Id, (quoting Citizens Against_Reckless Dev.
y. Zoning Bd. of Appeals of the City & Cty.
of Honolulu, 114 Hawai'i 184, 198, 159 P.8d
148, 152 (2007),

Hl “IWle may only resort to the use of
legislative history when interpreting an am-
biguous statute.” State v. Valdivia, 95 Hawai'i
465, 472, 24 P.8d 661, 668 (2001).

B. Motions to Dismiss

HH “A trial court’s ruling on a motion to
dismiss is reviewed de novo.” Kamaka v.
Goodsill Anderson Quinn & Stifel, 117 Ha-
wai'i 92, 104, 176 P.8d 91, 103 (2008) (citation
omitted).

II. Discussion

‘The issue presented here is whether health
insurers retain their subrogation rights
against third-party tortfeasors who cause in-
jury to their insureds.

HMSA argues that under State Farm, its
“equitable common law right of subrogation”
is protected in the context of health insur-
ance, According to HMSA, this common law
right allows for insurer’s rights in subroga-
tion to be “independent ... and take priority

291

over the insured’s interest in settling with a
third party.” HMSA additionally argues that
the legislative history of HRS §§ 668-10 and
481;18-108(a)(10) does not support a finding
that the laws abrogate its claimed subroga-
tion rights. Further, HMSA argues that it
has contractual subrogation rights, noting
that Mr. Yukumoto’s agreement with HMSA
expressly provided a right of subrogation,

Tn response, Appellees argue that the leg-
islative history of HRS §§ 668-10 and 481:18-
108 makes clear that health insurers have
“no subrogation rights in personal injury set-
tlements,” and that a health insurer “should
be reimbursed from a personal injury settle-
ment to the extent that the settlement dupli-
cated benefits paid by the health insurer.”
With respect to HMSA’s contractual subro-
gation rights, Appellees argue that the con-
tract provision is void as against public policy
in light of HRS § 431:13-108, and thus unen-
forceable.

We conclude that State Farm does not
apply to situations involving an insurer’s
right to subrogation in the context of person-
al insurance such as the instant case, and
thus, here, HMSA does not have equitable
subrogation rights. We also conclude that the
legislature intended to limit a health insur-
er’s right of subrogation under HRS §§ 668-
10 and 481;18-108. Thus, we conclude that
any contractual provision that conflicts with
HRS § 663-10 is invalid, and that HMSA is
not entitled to contractual subrogation rights.
Therefore, the cireuit court properly granted
the Yukumotos’ Petition and Tawarahara’s
motion to dismiss, and we affirm the circuit
court’s judgment.

A, HMSA Does Not Have Equitable Sub-
rogation Rights Against a Third-Party
Tortfeasor

HH Subrogation is a “creature of equi-
ty,” and is premised on the notion that an
insured should not be able to “unduly benefit
from a loss and thereby enjoy a ‘double
recovery’ from both the insurer and the tort-

feasor.” St, Paul Fire & Marine Ins. Co. v.

Liberty Mut. Ins, Co., 185 Hawai'i 449, 452,

858 P.8d 991, 994 (2015); Roger Baron, Sub-

rogation: A Pandora’s Box Awaiting Closure,

41 S.D. L. Rev. 287, 241 (1996); see also

292

Johnny C. Parker, The Made Whole Doc-
trine:_ Unraveling the Enigma Wrapped_in
the Mystery of Insurance Subrogation, 70
Mo. L. Rev. 728 (2005). Subrogation exists to
provide insurers with a mechanism “to recov-
er the costs of reimbursing injured insured
parties.” Parker, supra, at 723; see St. Paul,
135 Hawai‘ at 452, 353 P.3d at 994,

Ts Because subrogation is designed
to achieve an equitable adjustment of rights
between the insured and insurer, “its con-
tours cannot always be contractually de-
fined,” meaning that whether or not the right
to subrogation arises depends on the type of
insurance involved. Parker, supra, at 728,
Subrogation rights in the “personal insur-
ance” context are treated differently from
subrogation rights in the property or casual-
ty insurance context.> See Perreira v. Redi-
ger, 169 N.J. 399, 778 A.2d 429, 487 (2001)
(stating that “policies covering property dam-
age such as fire insurance have regularly
been held to include an implied right of
subrogation,” but in the area of “personal
insurance,” which includes health and medi-
cal insurance, the “same has not been true”).
Subrogation in these contexts is treated dif-
ferently because the two types of insurance
cover different losses. See id, at 437-38 (cita-
tions omitted); see also Parker, supra, at '730-
82. Courts have applied the principle of equi-
table subrogation to property and casualty
insurance policies because “the insured’s ac-
tual loss is generally liquidated in the context
of property insurance,” and “any excess com-
pensation from the combination of insurance
proceeds and tort recovery can be deter-
mined with certainty.”® Parker, supra, at
729. Thus, the right to equitable subrogation
prevents the insured from obtaining a double
recovery by ensuring that the insured will

5. Personal insurance is distinguishable from in-
demnity insurance such as property/casualty and
liability because personal insurance is “insur-
ance upon the person of an individual or group
of individuals.” Parker, supra, at 730. Insurance
other than personal insurance “in some way
involves a res different from the person of the
policy holder. In personal insurance, however,
that is the sole object of concern, and liability of
the insurer arises, ordinarily, upon the insured’s
death or, perhaps, disability resulting from acci-
dent or illness.” Parker, supra, at 730. “Policies
providing benefits for medical or hospital ex-
penses are generally viewed by courts as con-

pay the insurer for any duplication of dam-
ages received as a result of settlement. See
id.

In contrast, many jurisdictions have treat-
ed rights to equitable subrogation differently
in the context of “personal insurance.” Id, at
781-82. For the courts that have addressed
the “question of the existence of a common-
law equitable right of subrogation,” the
“weight of authority” has concluded that “no
such right exists in the health insurance
field.” Perreira, 778 A2d at 487 (citing
cases); see Parker, supra, at 781-82 (citing
cases) (“The overwhelming majority of juris-
dictions that have addressed the issue of
whether equitable subrogation applies to per-
sonal insurance contracts have concluded
that such an insurer has no right to subroga-
tion absent an expressed provision in the
policy.”). The New Jersey Supreme Court
stated the rationale behind the rule against
finding equitable subrogation in personal in-
surance:

Subrogation rights are common under poli-
cies of property or casualty insurance,
wherein the insured sustains a fixed finan-
cial loss, and the purpose is to place that.
loss ultimately on the wrongdoer. To per-
mit the insured in such instances to recov-
er from both the insurer and the wrong-
doer would permit him to profit unduly
thereby.

In personal insurance contracts, however,

the exact loss is never capable of ascertain-

ment. Life and death, health, physical well
being, and such matters are incapable of
exact financial estimation. There are, ac-
cordingly, not the same reasons militating
against a double recovery. The general
rule is, therefore, that the insurer is not
subrogated to the insured’s rights or to the

tracts for personal insurance.” Parker, supra, at

731 (citing Cunningham v. Metro. Life Ins. Co.,
121 Wis.2d 437, 360 N.W.2d 33, 37-39 (1985)).

6, Two types of subrogation exists: (1) “equitable
subrogation,” which is a principle of equity that
is “effected by operation of law and arises out of
a relationship that need not be contractually
based;” and (2) “conventional” or “contractual
subrogation,” which “arises out of the contractu-
al relationship of the parties.” State Farm, 90
Hawai'i at 328, 978 P.2d at 766.

beneficiary’s rights under contracts of per-

sonal insurance, at least in the absence of a

policy provision so providing. Nor would a

settlement by the insured with the wrong-

doer bar his cause of action against the
insurer, However, if a subrogation provi-
sion were expressly contained in such con-
tracts, it probably would be enforced quite
uniformly. Such a provision cannot be read
into a policy by calling it an indemnity
contract, however.
Perreira, 778 A.2d at 488 (quoting 8 J.A.
Appleman & J. Appleman, Insurance Law &
Practice, § 1675 at 495); see also Am. Pio-
neer Life Ins. Co. v. Rogers, 296 Ark, 254,
758 S.W.2d 580, 582-88 (1988) (“The princi-
ples which cause us to recognize equitable
subrogation in property disputes are not
present in the field of medical expense pay-
ments for personal injuries.”),

In line with other jurisdictions’ rationale to
support the general rule that there is no
right to equitable subrogation in the health
and medical insurance context, Hawai'i
courts have also recognized the differences
between subrogation rights for property/ca-
sualty insurance and subrogation rights for
personal insurance. In State Farm, this
court's ruling follows the majority rule for
subrogation in the context of property insur-
ance. See 90 Hawai'i at 880, 978 P.2d at 768,
In State Farm, the insured rented a gas
compressor from Pacific Rent-All (Pacific).
‘Id, at 819, 978 P.2d at 757. The gas compres-
sor malfunctioned, which resulted in fire
damage to the insured’s building and vehicle.
Id. Following the accident, State Farm paid
for the damages that the insured incurred.
Id. Subsequently, the insured reached a set-
tlement agreement with Pacific, which re-
leased all claims “arising out of personal
injury and property damage” that resulted
from the incident. Id. at 819-20, 978 P.2d at.
757-58. After the settlement, State Farm
filed a claim to assert its subrogation rights
against Pacific for damages that the insured

7. Uninsured-motorist coverage allows an insured
to recover damages for “injuries and losses negli-
gently caused by a driver who has no liability
insurance.” — Uninsured-Motorist___Coverage,
Black’s Law Dictionary (10th ed. 2014),

8. HRS § 431:10C-307 provides;

293

suffered. Id. at 320, 978 P.2d at 758, Pacific
moved to dismiss State Farm’s claim based
on the defenses of “release and accord and
satisfaction.” Id. at 319-20, 978 P.2d at 757-
58, This court held that “in the context of fire
and casualty insurance ... the insurer may
maintain a subrogation action against the
tortfeasor” regardless of outside settlement.
Id. at 880, 978 P.2d at 768,

In contrast, in the personal insurance con-
text, Hawai'i courts have specifically limited
an insurer’s right to subrogation. In AIG
Hawai‘i Ins. Co., Inc. v. Rutledge, the Inter-
mediate Court of Appeals (ICA) addressed a
similar issue to that in this case in the con-
text of uninsured motorist (UM) benefits.’
See 87 Hawai'i 337, 341, 955 P.2d 1069, 1073
(App. 1998). In Rutledge, the insured settled
its claims against the City and County of
Honolulu, but not against the uninsured tort-
feasor. Id. at 340, 955 P.2d at 1072. Following
settlement, AIG sought recovery from its
insured for the UM benefits that the insured
had received following the accident. Id. The
ICA ruled that an insurance carrier provid-
ing UM coverage is “entitled to reimburse-
ment for payments it makes to an accident
victim to the extent the victim’s total recov-
ery from all sources exceeds his or her dam-
ages [but] the carrier is entitled to no reduc-
tion of UM coverage ... where the victim is
not fully compensated.” Id. at 846, 955 P.2d
at 1078 (quoting Bradley vy. H.A. Manosh
Corp., 157 Vt. 477, 601 A2d 978, 988-84
(1991)). Therefore, the ICA concluded that
“in the allocation of tort recovery proceeds
and UM benefits, we agree with the principle
of full but not duplicative recovery of dam-
ages by the injured insured.” Id.

Similarly in Sol v. AIG Hawai‘i Ins. Co.,
this court enforced a statutory limit under
HRS § 481:10C-307 (Supp. 1992) on subroga-
tion for no-fault insurers against UM bene-
fits.§ See 76 Hawai'i 304, 307-08, 75 P.2d

Whenever any person effects a tort liability
recovery for accidental harm, whether by
suit or settlement, which duplicates no-fault
benefits already paid under the provisions of
this article, the no-fault insurer shall be re-
imbursed fifty per cent of the no-fault bene-
fits by such person receiving the duplicate

294

921, 924-25 (1994). In its ruling, this court
followed the legislature’s “intent to disallow
the subrogation rights of the no-fault carrier
against ‘optional additional’ coverages when
it amended the statute in 1977”:
This section [Section 294-7, “Rights of
Subrogation”] is amended to clearly state
the original intent of the Legislature when
it passed the Hawai'i No-fault Law. When-
ever any person effects a tort liability re-
covery for accidental harm, whether by
suit or by settlement, the no-fault insurer
is entitled to subrogate fifty percent of the
no-fault benefits, up to the maximum limit
specified by Section 294~8(c). That limit is
in the amount of $15,000. Therefore, if the
no-fault insurer paid no-fault benefits in
excess of this $15,000 amount; the proper
application of the present law as specified
in Sections 294~-2(10), 294-8, 294-4, and
294-10, Hawai'i Revised Statutes, leaves
no room for interpretation; but that the
maximum amount that the no-fault insurer
may subrogate is in the amount of fifty per
cent of $15,000, The no-fault insurer cannot.
subrogate against the optional additional
coverages, which by rules and regulations
of the Commissioner of Motor Vehicle In-
surance each insurer is required to offer
each applicant.

Id, at 807-08, 875 P.2d at 924-25 (citing S.
Conf. Comm. Rep. No, 776, in 1977 Senate
Journal at 1184) (other citations and empha-
sis omitted).

This court stated that pursuant to HRS
§ 481:10C-801(b)(8), insurance coverage for
uninsured motorists is “optional coverage”
because HRS § 481;10C-801(b)(8) provides
that uninsured motorist coverage “may be
rejected.” * Id, at 308, 875 P.2d at 925, This
court then concluded that it followed that
because the legislature “intended to prevent

benefits, up to the maximum limit specified
by section 431:10C-103(6).

9, HRS § 431:10C-301(b)(3) (1993) provides:
(b) A motor vehicle insurance policy shall
include:

(3) With respect to any motor vehicle regis-
tered or principally garaged in this State,
liability coverage provided therein or supple-
mental thereto, in limits for bodily injury or
death set forth in Paragraph (1), under pro-

no-fault insurers from subrogating against,
the optional additional coverages, uninsured
motorist coverage is exempt from no-fault
reimbursement.” Id,

Hs Thus, our courts have recognized the
difference between property/casualty insur-
anee and personal insurance by allowing the
insured to maintain subrogation rights in a
property insurance context in State Farm,
and limiting subrogation rights in personal
insurance contexts in Rutledge and Sol. Situ-
ations involving tort recovery in personal in-
surance contexts, like the instant case, often
include payment by the tortfeasor for intan-
gible losses such as life, death, health, pain
and suffering, and physical well being, where
it is difficult to ascertain exact measurements
of loss. In this way, recovery for medical
insurance benefits and tort damages do not.
involve the principles which support our rec-
ognition of equitable subrogation in the prop-
erty/casualty context, and recovery does not
necessarily produce a windfall or duplicative
recovery to the insured. We are therefore
persuaded to join the majority rule, and hold
that an insurer does not have equitable sub-
rogation rights in personal insurance con-
texts.

B. The Hawai‘i State Legislature Has
Limited a Health Insurer’s Right to
Subrogation Under HRS §§ 663-10 and
431:13-108

HH It is clear from the plain language of
HRS § 668-10 (Supp. 2002) that the legisla-
ture has limited the subrogation rights of
health insurers, As reflected in its title, “Col-
lateral sources; protection for liens and
rights of subrogation” (emphasis added), the
statute provides a comprehensive structure
for addressing liens and subrogation rights in

visions filed with and approved by the com-
missioner, for the protection of persons in-
sured thereunder who are legally entitled to
recover damages from owners or operators
of uninsured motor vehicles because of bodi-
ly injury, sickness, or disease, including
death, resulting therefrom; provided, howev-
er, that the coverage required under this
section shall not be applicable where any
insured named in the policy shall reject the
coverage in writing,

this context. HRS § 668-10(a) (Supp. 2002)
provides in relevant part:

In any civil action in tort, the court,
before any judgment or stipulation to dis-
miss the action is approved, shall deter-
mine the validity of any claim of a lien
against_the amount of the judgment or

295

determination of the validity and amount

of any claim of a lien!
(Emphasis added.)

Thus, HRS § 668-10’s comprehensive
scope is also reflected in the statute’s decla-
ration that it applies broadly to “any claim of
a lien.” See id, HRS § 663-10 also specifically

settlement by any person who files timely
notice of the claim to the court or to the
parties in the action, The judgment en-
tered, or the order subsequent to settle-
ment, shall include a statement of the
amounts, if any, due and owing to any
person determined by the court to be a
holder of a valid lien and to be paid to the
lienholder out of the amount of the corre-
sponding special damages recovered by the
judgment or settlement, In determining
the payment due the lienholder, the court.
shall deduct from the payment a reason-
able sum for the costs and fees incurred by
the party who brought the civil action in
tort. As used in this section, lien means a
lien arising out of a claim for payments
made or indemnified from collateral
sources, including health insurance or ben-
efits, for costs and expenses arising out of
the injury which is the subject of the civil
action in tort. If there is a settlement
before suit is filed or there is no civil
action pending, then any party may peti-
tion a court of competent jurisdiction for a

10. HRS § 663-10 (Supp. 2002) continues on and
provides:

(b) Where an entity licensed under chapter
432 or 432D possesses a lien or potential lien
under this section:

(1) The person whose settlement or judg-
ment is subject to the lien or potential lien
shall submit timely notice of a third-party
claim, third-party recovery of damages, and
related information to allow the lienholder or
potential lienholder to determine the extent of
reimbursement required, A refusal to submit
timely notice shall constitute a waiver by that
person of section 431:13-103(a)(10). An entity
shall be entitled to reimbursement of any bene-
fits erroneously paid due to untimely notice of
a third-party claim;

(2) A reimbursement dispute shall be sub-
ject to binding arbitration in lieu of court pro-
ceedings if the party receiving recovery and
the lienholder agree to submit the dispute to
binding arbitration, and the process used shall
be as agreed to by the parties in their binding
arbitration agreement; and

(3) In any proceeding under this section to
determine the validity and amount of reim-

provides that the liens referred to in the
statute include liens arising out of payments
made from collateral sources, including
“health insurance or benefits.” Id. Thus,
HRS § 668-10 applies to health insurers.
Further, HRS § 663-10 specifically states
that any judgment entered shall include the
amount due and owing to any holder of a
valid lien, to be paid to the lienholder from
“special damages recovered by the judgment
or settlement.” Id, (emphasis added). Thus,
the legislature limited the type of damages
from which a lienholder may be reimbursed.
‘The legislature did not provide that the lien-
holder may be reimbursed from an insured’s
recovery of general damages which, as men-
tioned previously, are difficult to determine
exactly. Therefore, the plain language of
HRS § 663-10 supports the conclusion that
HMSA’s subrogation rights are limited.

Consistent with this interpretation, the
legislative history of HRS §§ 663-10 and 431-
18:108(a)(10) demonstrates that a health in-
surer’s sole rights to reimbursement and
subrogation are provided for in those stat-

bursement, the court or arbitrator shall allow a

lienholder or person claiming a lien sufficient

time and opportunity for discovery and investi-
gation,

For purposes of this subsection:

“Third-party claim’’ means any tort claim
for monetary recovery or damages that the
individual has against any person, entity, or
insurer, other than the entity licensed _under
chapter 432 or 432D.

“Timely notice of a third-party claim” means
a reasonable time after any written claim or
demand for damages, settlement recovery, or
insurance proceeds is made by or on behalf of
the person.

(Emphasis added.)

As reflected in the broad definition of “third-
party claim,” the statute demonstrates a legisla-
tive purpose to establish a comprehensive
scheme for adjudicating reimbursement claims
by health insurers, including a requirement that
the third-party claimant notify the insurer of the
claim.

296

utes, and that a health insurer’s right to
subrogation is therefore limited. In 1986, the
Hawai'i legislature enacted comprehensive
tort reform legislation. The legislation, which
was later codified as HRS § 663-10 (1993),
addressed the issue of reimbursement for
collateral sources who made payments for
“costs and expenses arising out of the inju-
ry.” 1986 Special Sess. Haw. Sess. Laws Act,
2, § 16 at 10. The legislation allowed for
collateral sources to be reimbursed when
special damages recovered in a judgment or
settlement duplicated the amounts they had
paid. Id.

In 2000, the legislature passed S.B. No.
2568, which became Act 29, the purpose of
which was to “make it an unfair or deceptive
act to limit or withhold coverage under insur-
ance policies because a consumer may have a
third-party claim for damages.” H. Stand.
Comm. Rep. No, 1880-00, in 2000 House
Journal, at 1515; see HRS § 663-10 (Supp.
2000). Act 29 made clear that collateral

11. HRS § 663-10 (1993) (Collateral sources; pro-
tection for liens and rights of subrogation) pro-
vides:
In any civil action in tort, the court, before any
judgment or stipulation to dismiss the action is
approved, shall determine the validity of any
claim of a lien against the amount of the judg-
ment or settlement by any person who files
timely notice of the claim to the court or to the
parties in the action. The judgment entered, or
the order subsequent to settlement, shall in-
clude a statement of the amounts, if any, due
and owing to any person determined by the
court to be a holder of a valid lien and to be
paid to the lienholder out of the amount of the
corresponding special damages recovered by
the judgment or settlement, In determining the
payment due the lienholder, the court shall
deduct from the payment a reasonable sum for
the costs and fees incurred by the party who
brought the civil action in tort. As used in this
section, lien means a lien arising out of a claim
for payments made or indemnified from collat-
eral sources for costs and expenses arising out
of the injury which is the subject of the civil
action in tort.

1986 Special Session Haw. Sess. Laws Act 2,

§ 16 at 10,

12. HRS § 663-10 (Supp. 2000) (Collateral
sources; protection for liens and rights of subro-
gation) provides:

In any civil action in tort, the court, before any
judgment or stipulation to dismiss the action is
approved, shall determine the validity of any
claim of a lien against the amount of the judg-
ment or settlement by any person who files

sources were required to pay benefits, and
were limited to reimbursement under the
statute in third-party personal injury situa-
tions. See H. Stand. Comm. Rep. No. 1830-
00, in 2000 House Journal, at 1515. Act 29
modified HRS § 663-10 by expressly includ-
ing “health insurance or benefits” within its
provisions. 2000 Haw. Sess. Laws Act 29, § 2
at 57. The legislature enacted Act 29 with the
intent to “prevent duplicate recoveries in
personal injury claims while creating a fair,
uniform and comprehensive procedure gov-
erning the rights and obligations of insurance
companies and consumers for the reimburse-
ment of insurance benefits from third-party
sources of recovery.” H, Stand, Comm. Rep.
No. 1880-00, in 2000 House Journal, at 1515.
The legislature also limited reimbursement
and subrogation for all insurance companies,
excluding health insurers, in HRS § 481:13-
108(a)(10) (Supp. 2000), while also applying
the same restrictions to reimbursement and
subrogation to health insurers in HRS § 663-
10.13 2000 Haw. Sess. Laws Act 29, § 1 at 55;

timely notice of the claim to the court or the
parties in the action. The judgment entered, or
the order subsequent to settlement, shall in-
clude a statement of the amounts, if any, due
and owing to any person determined by the
court to be a holder of a valid lien and to be
paid to the lienholder out of the amount of the
corresponding special damages recovered by
the judgment or settlement. In determining the
payment due the lienholder, the court shall
deduct from the payment a reasonable sum for
the costs and fees incurred by the party who
brought the civil action in tort. As used in this
section, lien means a lien arising out of a claim
for payments made or indemnified from collat-
eral sources, including health insurance or
benefits, for costs and expenses arising out of
the injury which is the subject of the civil
action in tort. If there is a settlement before
suit is filed or if there is no civil action pend-
ing, then any party may petition a court of
competent jurisdiction for_a determination of
the validity and amount of any claim of a lien.
2000 Haw. Sess. Laws Act 29, § 2 at 57 (new
language added underlined).

13. Act 29 added HRS § 431:13-103(a)(10), which
provided that an insurer would have committed
an unfair insurance practice by:

Refusing to provide or limiting coverage avail-
able to an individual because the individual
may have a third party claim for recovery of
damages; provided that:
(A) Where damages are recovered by judg-
ment or settlement of a third-party claim,
reimbursement of past benefits paid shall be
allowed pursuant to section 663-10; and

2000 Haw. Sess. Laws Act 29, § 2 at 57, The
House Committee on Consumer Protection
and Commerce noted that:
Health coverage and benefits are exempt-
ed from Section 431:13-108 and the same
rights and obligations are placed in Section
668-10 for health insurers. The amendment,
extends health benefit providers’ third-par-
ty liability rights to settlements, as well as
lawsuits under Section 663-10. This amend-
ment places all of the rights and_obli-
gations of health benefit providers and
consumers in Section 663-10 for third-par-
ty liability situations to create a uniform
and comprehensive procedure.
H. Stand. Comm. Rep. No. 1880-00, in 2000
House Journal, at 1515 (emphasis added),
In the next legislative session in 2001, the
legislature considered and subsequently
passed S.B. 940, which amended to HRS
431:13-108(a)(10) to expressly make it an un-
fair insurance practice for a health insurer to
limit or exclude insurance coverage to an
insured who has a third-party claim for dam-
ages. See S. Stand. Comm. Rep. No. 107, in
2001 Senate Journal, at 987. According to the
Senate Committee on Commerce, Consumer
Protection and Housing, the purpose of S.B.
940 was to “make mutual benefit societies
(societies) and health maintenance organiza-
tions (HMOs) subject to the unfair methods
of competition and unfair and deceptive acts
and practices of the business of insurance,
for refusing to provide or limiting coverage
to an individual having a third-party claim
for damages.” S. Stand. Comm. Rep. No. 107,
in 2001 Senate Journal, at 987. The Commit-
tee cited testimony of the State Insurance
Commissioner, which indicated that this
measure:
corrects an oversight in Act 29, Session
Laws of Hawai'i (SLH) 2000, which should
not have exempted societies and HMOs
from insurance unfair practices for refus-
ing to provide or limiting coverage to the
insured who has a third-party claim. Act
29, SLH 2000, established lien rights for
health insurance benefits paid, which is a
complement to revisions in the same meas-

(B) The paragraph shall not apply to enti-
ties licensed under chapter 386, 431:10C,
432, or 432D....

297

ure to the insurance code relating to unfair
insurance practices.

Id.
The Committee further explained its intent

in enacting S.B. 940:
The intent of your Committee is that soci-
eties and HMOs promptly pay the benefits
owing under their policies, and recoup
their payments from a third-party claim by
lien as provided under section 668-10,
HRS. Testimony indicated that under cur-
rent law, societies and HMOs may be in-
terfering with a third-party settlement by
claiming that they are exempt from insur-
ance unfair trade practice as a result of
Act 29, SLH 2000. This was clearly not the
intent of the legislature. This measure
clears up that confusion.

Id,

When deciding whether to enact S.B. 940,
the House Committee on Consumer Protec-
tion and Commerce received testimony from
HMSA that passage of the amendments
would “eliminate the ability of health plans to
recover monies already paid on behalf of
members when these individuals receive a
third party settlement,” resulting in a “dou-
ble payment” for the client and shifting costs
from auto insurance to private health insur-
ance, which would “increase premiums borne
by Hawaii’s employers.” However, the Presi-
dent of the Hawai'i Claims Managers Associ-
ation, as well as private citizens, testified in
support of S.B. 940, stating that HMSA “un-
fairly claims a disproportionate amount of
settlements,” and in many cases, “claims to
be entitled to all of the settlement,” effective-
ly depriving insureds of large amounts of the
settlement proceeds. The President of the
Hawai'i Claims Managers Association also
testified that HMSA’s practices made it
“very difficult to settle cases quickly and
inexpensively” and has “unnecessarily de-
lay[ed] payment of benefits to injured con-
sumers.”

S.B. 940 was carried over into the 2002
legislative session, and was adopted despite
the concerns expressed by HMSA in its testi-

2000 Haw. Sess. Laws Act 29 § 1, at 55 (empha-
sis omitted).

298

mony. The Conference Committee, when con-
sidering proposed amendments to Act 29,
stated that:

Refusing to provide or limiting health cov-

erage to persons who have third-party

claims for damages is not permitted, ex-

cept for reimbursement under section 663-

10, Hawai'i Revised Statutes (HRS). This

measure makes such acts unfair insurance

practices under article 13 of the insurance
code to eliminate any doubt that health
insurers have always been subject to these
limitations under section 663-10, HRS.

Health insurers continue to be entitled to

reimbursement of their subrogation liens

under section 663-10, HRS.
Conf. Comm. Rep. No. 67-02, in 2002 House
Journal, at 1783,

Thus, HRS § 663-10’s legislative history
supports the conclusion that HMSA’s sole
rights to reimbursement and subrogation are
provided for in HRS §§ 663-10 and 481-
18:108(a)(1). First, the drafters indicated that
“all of the rights and obligations of health
benefit providers and consumers” are provid-
ed for in HRS § 663-10 for third-party Habili-
ty situations, thus creating a “uniform and
comprehensive procedure” for health insur-
ers’ subrogation and reimbursement rights.
H. Stand. Comm. Rep. No, 1830-00, in 2000
House Journal, at 1515. The drafters also
stated that “health insurers have always
been subject to [the] limitations” under HRS
§ 668-10, and “continue to be entitled to
reimbursement of their subrogation liens”
under HRS § 663-10, Conf. Comm, Rep, No.
67-02, in 2002 House Journal, at 1788. There-
fore, the legislature intended for HRS § 663-
10 to serve as the authority which controls all

14. We acknowledge a recent United States Su-
preme Court decision involving a health insurer's
subrogation rights, but determine that it is distin-
guishable from the instant case. See Covent:
Health Care of Missouri, Inc., fka Group Healt
Plan, Inc. v. Nevils, —- U.S —, 137 S.Ct. 1190,
197 L.Bd.2d 572 (2017), Coventry involved the
Federal Employees Health Benefits Act of 1959
(FEHBA), which “establishes a comprehensive
program of health insurance for federal employ-
ees.” Coventry, 137 S.Ct. at 1194. The FEHBA
authorizes the Office of Personnel (OPM) to
“contract with private carriers for federal em-
ployees’ health insurance,” and includes a provi-
sion that expressly preempts state law that “re-
lates to health insurance or plans.” Id, at 1192
(citation omitted). The contracts that OPM nego-

of a health insurer’s obligations and rights
regarding reimbursement and subrogation
benefits from third-party sources of recov-
ery, which negates any argument that HRS
§ 663-10 applies only to reimbursement of an
insurer by an insured. See H. Stand. Comm.
No. 1880-00, in 2000 House Journal, at 1515.
In conclusion, HRS §§ 663-10 and 431-
18:108(a)(40) comprehensively addresses and
limits a health insurers’ rights to reimburse-
ment and subrogation.

C. Any Contractual Provision That Con-
flicts With HRS § 663-10 Is Invalid,
and HMSA Is Not Entitled to Contrac-
tual Subrogation Rights

Hs«EXMSA argues that it has con-
tractual subrogation rights because Mr, Yu-
kumoto’s agreement with HMSA expressly
provides for a right of subrogation. However,
“[wlhen the terms of an insurance contract,
are in conflict with statutory language, the
statute must take precedence over the terms
of the contract.” Sol, 76 Hawai'i at 807, 875
P,2d at 924 (citation omitted) (determining it
unnecessary to address the clarity of the
contract provisions in an insurance contract
because the “terms of the contract contra-
vened the statutory language intended to
prevent off-sets of no-fault benefits from
uninsured motorist benefits”), Here, it is
clear that HRS § 668-10 limits HMSA’s
rights to subrogation against the tortfeasor,
and thus, the statute is in conflict with the
contractual provision. Therefore, because the
statute must take precedence, the contractu-
al provision is invalid, and HMSA is not
entitled to contractual subrogation rights.

tiates with private carriers provide for reim-
bursement and subrogation. Id, However, several
states, including the state at issue in that case,
“bar enforcement of contractual subrogation and
reimbursement provisions.” Id, at 1194,

In Coventry, a former federal employee, Jodie
Nevils, was insured under a FEHBA plan and
was injured in an automobile accident, Id, at
1195. Coventry paid Nevils’ medical expenses,
and Nevils subsequently sued the driver who
caused his injuries and obtained a settlement
award. Id, Coventry asserted a lien against part
of the settlement to cover medical bills. Id. at
1192, Nevils repaid the lien amount, and then
filed a class action in Missouri state court, argu-
ing that Coventry had unlawfully acquired reim-

np
S
Ss

IV. Conclusion

HMMM For the foregoing reasons, we
hold that: (1) a health insurer does not have
equitable subrogation rights against a third-
party tortfeasor in the context of personal
insurance; (2) a health insurer’s subrogation
and reimbursement rights are limited by
HRS §§ 663-10 and 481-13:108(a)(10); and (8)
any contractual provision that conflicts with
HRS § 668-10 is invalid. We further hold
that HRS § 668-10 takes precedence over
HMSA’s contractual subrogation rights.
Therefore, the circuit court properly granted
the Yukumotos’ Petition and Tawarahara’s
motion to dismiss, and we affirm the cireuit
court’s May 28, 2015 judgment.

400 P.3d 500

STATE of Hawai‘i, Respondent/Plaintiff-
Appellee,

Vv.

Lester S. TSUJIMURA,
Petitioner/Defendant-
Appellant.

SCWC-14-0001802

Supreme Court of Hawai'i.
MAY 81, 2017

bursement, Id, The trial court granted summary
judgment in Coventry's favor, and the Missouri
Court of Appeals affirmed, but the Missouri Su-
preme Court reversed. Id, at 1195. The United
States Supreme Court granted certiorari to re-
solve conflicting interpretations of the FEHBA
provision. Id. at 1196, Upon review, the Court
held that FEHBA’s provision preempted state
law which prohibited subrogation and reim-
bursement by a health insurer. Id. at 1192-94,

‘The instant case is distinguishable from Coven-
try because Yukumoto is a State employee, not a
federal employee, and thus this case does not
involve the FEHBA and its provision preempting
state law relating to health insurance. Therefore,
Coventry does not affect our decision here, and
HMSA does not have contractual subrogation

rights,

TTT

302

Alen M. Kaneshiro, for petitioner
Sonja McCullen, for respondent.

McKENNA, POLLACK, AND WILSON,
JJ,, AND NAKAYAMA, J., CONCURRING
AND DISSENTING, WITH WHOM
RECKTENWALD, C.J., JOINS

OPINION OF THE COURT BY
POLLACK, J.

It has been settled for decades that the
right to remain silent is a fundamental com-
1, The secondary issues that we also explore are

the statutory meaning of “alcohol” within HRS

§ 291-1 and the sufficiency of the complaint in
light of that statutory meaning,

Xx

‘The complaint charged as follows;

On or about the 15th day of January 2014, in
the City and County of Honolulu, State of
Hawaii, LESTER S. TSUJIMURA did inten-
tionally, knowingly or recklessly operate or
assume actual physical control of a vehicle
upon a public way, street, road, or highway
while under the influence of alcohol in an
amount sufficient to impair his normal mental
faculties or ability to care for himself and
guard against casualty; and/or did operate or
assume actual physical control of a vehicle
upon a public way, street, road, or highway
with .08 or more grams of alcohol per one

ponent of the right against compelled self-
incrimination guaranteed by article I, section
10 of the Hawaii Constitution, What has
been subject to disagreement among several
jurisdictions is the point in time at which the
right to remain silent attaches. In 2008, this
court, in State v, Mainaaupo, 117 Hawai'i 285,
178 P.8d 1 (2008), held that the right to
remain silent attaches at least as of the time
that a person is arrested. In this case, the
primary question that we resolve is the one
that the Mainaaupo court left open: whether
the right to remain silent attaches prearrest.
and, if so, in what manner and to what extent.
may prearrest silence be utilized by the State
in a criminal trial!

I, FACTS AND PROCEDURAL
BACKGROUND

A. Pretrial

On February 7, 2014, Lester Tsujimura
was charged by complaint with Operating a
Vehicle Under the Influence of an Intoxicant,
(OVUID,, in violation of Hawaii Revised Stat-
utes (HRS) § 291B-6i(a)(1) and/or (a)(4)
(2007 & Supp. 2012)? Tsujimura moved to
dismiss the complaint for failure to state an
offense, arguing that the complaint was in-
sufficient for failing to define the term “alco-
hol” and thus did not sufficiently apprise him
of what he must be prepared to meet at
trial

At the hearing on the motion,‘ Tsujimura
argued that the statutory definition of aleohol

hundred milliliters or cubic centimeters of
blood, thereby committing the offense of Oper-
ating a Vehicle Under the Influence of an In-
toxicant, in violation of 291B-61(a)(1) and/or
(a)(@) of the Hawaii Revised Statutes,

3, Tsujimura also filed a motion to suppress the
results of any device that measured his blood
alcohol content, evidence gathered post-arrest
before he was given Miranda warnings, and all
statements he made in violation of his constitu-
tional rights. At the hearing, the State indicated
that it was proceeding only on the HRS § 291B-
61(a)(1) charge, in response to which Tsujimura
withdrew his motion to suppress.

4, The motion and trial proceedings in this case
were presided over by the Honorable Paul B.K,
Wong,

includes only alcohol that was produced
through distillation, and, as such, the defini-
tion must be included in the complaint. The
State maintained that the motion to dismiss
should be dismissed as untimely. On the mer-
its, the State contended that the definition of
“alcohol” also includes ethyl alcohol regard-
Jess of origin and that a person of common
understanding would understand what “aleo-
hol” means within the OVUII statutory
scheme, In reply to the State’s timeliness
argument, Tsujimura argued that the motion
to dismiss for failure to state an offense is
jurisdictional and may be raised at any time.

The District Court of the First Circuit.
(district court) dismissed the motion to dis-
miss as untimely. Alternatively, the court
determined that the statutory definition of
aleohol is not restricted to aleohol derived
from distillation and that a person of common
understanding would understand what aleo-
hol means even if the complaint does not set
forth its statutory meaning. The district
court reasoned that even though the plain
language of the statutory definition of alcohol
appears to include only alechol produced by
distillation, the court would “ignore the plain
reading ... to avoid an absurd result” in
which only persons impaired by hard liquor
could be prosecuted for OVUII.

B. Trial

At trial, Officer Thomas Billins of the Hon-
olulu Police Department testified that, on
January 15, 2014, at approximately 12:05
am., he saw Tsujimura driving a white SUV
on the Moanalua Freeway just past the Ala
Kapuna overpass. According to Officer Bil-
lins, Tsujimura entered the shoulder lane
several times, “at times straddling the ...
right-most lane and the right shoulder.”

Officer Billins turned on his light and si-
rens to notify Tsujimura that he was being

8, Prior to administering the FSTs, Officer Billins
asked Tsujimura six questions: “If {he is] diabetic
or epileptic, if [he is] under the care of a doctor
or physician, if fhe has) an artificial or glass eye,
or if fhe has] any speech impediments,”

6. The objection was based on the fact that even
though the district court initially determined that
there was insufficient foundation to allow Officer
Billins to testify regarding the result of the FSTs,
the State essentially “back-doored” testimony as

303

stopped, but Tsujimura was not responding,
so Officer Billins used the loudspeaker sys-
tem in his police car to request Tsujimura to
pull over. After Tsujimura stopped, Officer
Billins approached to inform him of the rea-
son he was stopped and requested his driv-
er’s license, registration, and insurance infor-
mation, Tsujimura immediately produced his
driver's license, but he had difficulty produc-
ing his registration and insurance informa-
tion and had to fumble through a stack of
documents,

Officer Billins testified that Tsujimura had
avery flush red face, his speech was slurred,
and he had red and watery eyes. Officer
Billins added that he smelled an odor of
alcoholic beverage emitting from Tsujimura’s
breath or from inside the vehicle cabin. The
officer related that he requested that Tsujim-
ura participate in standardized field sobriety
tests (FSTs), to which Tsujimura agreed,
When asked whether he noticed Tsujimura
having had any difficulty exiting his vehicle,
Officer Billins stated that he did not “see him
limping or anything like that,” that he got
out of his vehicle normally, and that he did
not “fall down or anything.” Before perform-
ing the FSTs, Tsujimura told Officer Billins
that he had an old injury to his left knee,
“{slomething about his ACL and it was a bad
knee,” and that he was taking medication for
his high blood pressure and diabetes.>

Officer Billins testified that, while he was
conducting the horizontal gaze nystagmus
test, he observed that Tsujimura’s face was
flushed and red and that he had a slight sway
from left to right. Over the objection of the
defense, Officer Billins testified as to Tsujim-
ura’s performance on the walk-and-turn test.
Officer Billins stated that Tsujimura broke
his heel-to-toe stance twice, stepped off the
line five times, failed to walk in a heel-to-toe
fashion on all steps, failed to keep his hands

to whether Tsujimura passed or failed the walk-
and-turn test because Officer Billins was asked
about the clues he was looking for and the in-
structions he gave based on his training. Tsujim-
ura interjected a similar objection to Officer Bil-
lins’ testimony as to the results of the one-leg
stand. In light of our disposition in this case, we
do not address these foundation challenges that
were raised on appeal and certiorari.

304

six inches or less from his side, stumbled
while turning, and had to raise his arm above
shoulder level for balance, all of which did
not comply with Officer Billins’ instructions
and demonstration of the walk-and-turn test.
When asked about Tsujimura’s performance
of the one-leg stand, Officer Billins stated
that Tsujimura was unable to keep his foot
six inches above the ground, put his foot
down on several occasions, did not raise his
foot off the ground in the first ten seconds of
the test, was unable to count after several
prompts to begin counting, was unable to
maintain his hands down at his side, and did
not follow instructions.’

Officer Billins also testified that, having
been apprised of Tsujimura’s injury to his
left knee, he suggested, during the one-leg
stand, that “if [Tsujimura] were to choose a
leg, it may be wise to lift his injured leg
because he would have to put weight on the
leg that he’s standing on.” Officer Billins
added that Tsujimura raised his left leg dur-
ing the one-leg stand.

On cross-examination, Officer Billins stat-
ed that he followed Tsujimura’s vehicle for
about two miles before Tsujimura finally
pulled over. The officer testified that Tsujim-
ura was not changing lanes, was not going
over the speed limit, was not slowing down or
speeding up, did not follow vehicles too close-
ly, and did not make any inconsistent signals.
Officer Billins related that it took Tsujimura
only eight seconds to pull over from the time
he turned on his sirens and lights. Officer
Billins noted that out of the 24 National
Highway Traffic Safety Administration
(NHTSA) visual detection clues, Tsujimura
exhibited only one—trouble maintaining lane
position.’ Officer Billins testified that Tsujim-
ura did not repeat questions or comments,
Jean on the vehicle, or provide incorrect in-
formation or change his answers. Officer Bil-
7, Officer Billins testified that when he had been

around persons who had consumed alcohol, he

had observed that they tend to have “bloodshot
eyes or they have difficulty walking or standing
still in an upright mamner,” they “sometimes
pass out,” “have emotional issues,” “go from
being happy to sad,” stumble around, or have

“difficulty grabbing things or even walking.” On

cross-examination, Officer Billins indicated that

he did not see Tsujimura lose consciousness,
exhibit emotional issues, go from being happy to

lins indicated that red, watery eyes could be
caused by a number of factors other than
alcohol impairment, such as fatigue and long
days at work. Officer Billins also expressed
that, based on his training and experience
and the NHTSA, odor of alcohol is a poor
indicator of a person’s level of impairment
and has no bearing on the amount and nature
of the alcohol that the person consumed.

Tsujimura’s counsel asked Officer Billins
about his testimony on direct examination
regarding Tsujimura’s injury. According to
Officer Billins, Tsujimura stated that he had
an injury on the left leg or left knee and a
torn ACL on an unspecified leg. Officer Bil-
lins said that, when he recommended that
Tsujimura raise his left leg for the one-leg
stand, he was not aware “whether raising a
leg puts more physical strain on your ACL
than keeping it planted” and “whether [Tsu-
jimura’s] knee injury or ACL injury affected
his ability to perform the” one-leg stand and
walk-and-turn,

On redirect examination, the prosecutor
asked Officer Billins whether Tsujimura,
while exiting his car, explained that he could
not get out of the car due to an ACL injury.
The relevant exchange between the prosecu-
tor and Officer Billins was as follows:

{Prosecutor:] ... You testified that when

the defendant left the car he didn’t have

any difficulty exiting the car.

[Officer Billins:] Yes.

[Prosecutor:] So did the defendant at that

time explain to_you he couldn’t eet out of

the car because of an ACL injury?

[Defense Counsel:] Objection, Your Honor.

It_comments on the defendant's right to

remain silent.

[The Court:] It’s overruled. Let’s see if the

statement comes out.

being sad, laugh or cry inappropriately, stumble,
grab something to keep himself upright, or walk
into anything.

8. Officer Billins testified on redirect examination
that the factors listed in the NHTSA manual are
not dispositive of intoxication and that it is nec-
essary to evaluate their totality and the circum-
stances under which they arose instead of relying
on one single clue.

[Prosecutor:] Do you recall if the defen-
dant indicated to you he would have diffi-

culty exiting the car because of his previ-

ous leg injury?

[Officer BBillins:] No statements were

made.

[Defense Counsel:] And Your Honor, that’s

exactly what I’m talking about. The Su-

preme Court—there’s Supreme Court case
law that says that the prosecutor cannot
comment or elicit testimony that comments
on the defendant's right to remain silent.

He’s under no obligation to speak or say

anything to Officer Billins,

[The Court:] That’s true here in court.

{Defense Counsel:] Correct.

{The Court:] There’s no motion to suppress

his statements at the scene of the stop.

[Defense Counsel:] No. I understand that.

But during the course of the trial, [the

prosecutor’s] trying to imply that he had

some obligation to tell Officer Billins some-

[The Court:] I understand what you're say-

ing. Your objection’s overruled.
(Emphases added.)

Tsujimura’s objection to the prosecutor’s
line of questioning was thus based on the
ground that the question sought and elicited
a response that commented on Tsujimura’s
right to remain silent. The district court
overruled the objection on the grounds that
the prosecutor’s question was not implying
that Tsujimura was under obligation to speak
in court, which the district court concluded
was inappropriate; rather, the prosecutor's
question was implying that Tsujimura had
some obligation to say something at the time
of the stop, which the district court intimated
‘was permissible.

Following Officer Billins’ testimony, the
State rested and Tsujimura moved for a
judgment of acquittal, arguing that the State
failed to present evidence as to the kind of
aleohol that allegedly impaired his faculties,
The district court denied the acquittal mo-

9, The district court sentenced Tsujimura to a 14-
hour minimum substance abuse rehabilitation
program, a substance abuse assessment, and
mandatory fees including “$100 DUI Drivers Ed-
ucation Fee, $7 Regular Drivers Education Fee,
$30 Crime Victim Compensation Fee, $25 Neu-

305

tion, and Tsujimura rested without present-
ing any evidence.

In ruling on the case, the district court
found that the car that Tsujimura was driv-
ing was straddling the line separating two
Janes on the Moanalua freeway; that the
eight seconds it took for Tsujimura to pull
over was still a fair amount of time given that.
the police lights were activated; that Tsujim-
ura’s speech was slurred, his face was
flushed and red, and his eyes were red and
watery; and that when Tsujimura “alighted
from the car, he did not indicate any difficul-
ty walking.” The district court also made
findings consistent with Officer Billins’ testi-
mony as to Tsujimura’s performance on the
FSTs.

Based on the totality of the circumstances,
including the manner in which Tsujimura
was driving and Tsujimura’s physical condi-
tion that Officer Billins observed, the district
court concluded that the State proved beyond
a reasonable doubt all the elements of the
OVUII offense charged under HRS § 291E-
61(a)a).F

IL ICA PROCEEDINGS

Tsujimura filed a notice of appeal to the
Intermediate Court of Appeals (ICA), chal-
lenging the following rulings of the district
court: (1) denial of his motion to dismiss the
OVUII charge for failure to define the term
“alcohol” in the complaint; (2) admission of
Officer Billins’ testimony regarding Tsujimu-
ra’s failure to state that his injury would
prevent him from getting out of his car; (8)
denial of his motion for judgment of acquittal
on the grounds that there was insufficient
evidence that he had consumed “alcohol”;
and (4) denial of his motion for judgment of
acquittal on the grounds that there was in-
sufficient evidence to establish that he was
under the influence of alcohol in an amount
sufficient to impair his normal mental facul-
ties or ability to care for himself and guard
against casualty.

rotrauma Fund Surcharge, $250 Drug Demand
Reduction Assessment, $150 of which will be
suspended on the condition that Mr. Tsujimura
complete all the other requirements of his sen-
tence.” Tsujimura was also fined $300, and his
license was revoked for one year.

306

The ICA in its published opinion deter-
mined that the statutory definition of “aleo-
hol” under HRS § 291E-1 (007 & Supp.
2012) is not limited to alcohol derived from
distillation but that, based on the statute’s
plain meaning, it “specifically includes ethyl
aleohol, which is ‘the intoxicating agent in
beer, wine and other fermented and distilled
liquors’” State_v. Tsujimura, 187 Hawaii
117, 120, 366 P.8d 178, 176 (App. 2016) (quot-
ing Ethyl Alcohol, Webster Dictionary,
http://www.webster-dictionary.net/definition/
ethyl aleohol (ast visited May 28, 2017)).!°
The ICA stated that, if the meaning of “aleo-
hol” excludes beer and wine and other alco-
holie products not derived from distillation,
the purpose of the legislature in enacting the
OVUII statutes would be undermined in that,
“drivers who became drunk as the result of
consuming beer or wine would not be subject.
to prosecution.” Id. at 120-21, 866 P.38d at
176-77, The ICA noted that Tsujimura’s stat-
utory construction would frustrate “the en-
tire administrative and criminal statutory
scheme set forth in HRS Chapter 2918.” Id.
The ICA also concluded that the statutory
definition of “alcohol” is consistent with its
ordinarily understood meaning and that
“there was no need for the State to define
the term ‘alcohol’ in the OVUII charge in
order to give Tsujimura fair notice of the
charge against him.” Id, at 121, 366 P.8d at
177. Accordingly, the ICA held that the com-
plaint charging Tsujimura with OVUII was
not deficient for failing to set forth the statu-
tory definition of “aleohol.” Id.

As to Tsujimura’s argument that his right
to remain silent was violated, the ICA ob-
served that Hawai‘i has not resolved whether
there exists a constitutional right to prear-
rest silence, Id, at 128, 866 P.8d at 179,
However, the ICA determined that it was not
necessary to reach this issue because Officer
Billins’ testimony did not constitute “an im-
permissible comment on Tsujimura’s asser-
tion of his right to remain silent.” Id. In
evaluating Tsujimura’s contention, the ICA
applied the test set forth in State v. Padilla,

intended or of such character that the dis-
trict court would naturally and necessarily
take it to be a comment on Tsujimura’s exer-
cise of his right to remain silent, Tsujimura,
187 Hawai'i at 123, 366 P.8d at 179, The ICA
reasoned that the question—“Do you recall if
the defendant indicated to you he would have
difficulty exiting the car because of his previ-
ous leg injury?”—and Officer Billins’ answer
that “[nJo statements were made” “were di-
rected at whether there was any indication
that Tsujimura’s prior knee injury affected
his ability to perform the field sobriety
tests.” Id, at 124, 366 P.8d at 180, According
to the ICA, the prosecutor’s question and
Officer Billins’ answer were not an “attempt
to imply that an innocent person in Tsujimu-
ra’s position would have spoken.” Id.

Finally, the ICA determined that there
was sufficient evidence to establish that Tsu-
jimura consumed “alcohol” because Tsujimu-
ra was under the influence of ethyl alechol,
which is the intoxicating agent in beer, wine,
and other fermented and distilled liquors and
the active principle in intoxicating drinks, Id.
at 122, 866 P.38d at 178. Therefore, viewing
the evidence in the light most favorable to
the State, the ICA concluded that the evi-
dence adduced by the State at trial constitut-
ed sufficient evidence to support Tsujimura’s
conviction, Id, at 124, 366 P.3d at 180,

Il, STANDARDS OF REVIEW

HE Statutory interpretation is re-
viewed de_novo, State v, Wang, 91 Hawai'i
140, 141, 981 P.2d 280, 281 (1999). “At all
times, the question of whether a charge is
sufficient is a matter of constitutional law,
and our review of such matters is de novo.”
Schwartz v. State, 186 Hawai'i 258, 286, 361
P.8d 1161, 1189 (2015). As to evidentiary
rulings, the standard of review is “abuse of
discretion, unless application of the rule ad-
mits only one correct result, in which case,
review is under a rightAvrong standard.”
State v. Rabellizsa, 79 Hawai'i 347, 349, 903

57 Haw, 150, 552 P.2d 857 (1976), and consid-
ered whether the prosecutor’s question and
Officer Billins’ answer to it were manifestly

10, In 2016, the legislature amended the defini-
tion of “alcohol” in HRS § 291E-1 to mean

P.2d 48, 45 (1995). Questions of constitutional
law are reviewed de novo, and this court
exercises its independent judgment in consid-

“ethanol or any substance containing ethanol.”
2016 Haw, Sess. Laws Act 231, § 59.

ering such questions. State v. Mattson, 122
Hawai'i 812, 821, 226 P.8d 482, 491 (2010),
Legal sufficiency of the evidence to support a
conviction is a question of law reviewed by
this court de_noyo, the specific test being
“whether, ‘viewing the evidence in the light
most favorable to the State, there is substan-
tial evidence to support the conclusion of the
trier of fact.’” State _v. Hirayasu, 71 Haw.
587, 589, 801 P.2d 25, 26 (1990) (quoting
State v. Hernandez, 61 Haw. 475, 477, 605
P.2d 75, 77 (1980),

Ivy. DISCUSSION

A. Meaning of Alcohol and Sufficiency
of the Complaint.

Tsujimura contends that the statutory defi-
nition of “alcohol” in HRS § 291H-1 (2007 &
Supp. 2012) is limited to aleohol derived from
distillation. Thus, argues Tsujimura, the defi-
nition of “alcohol” should have been included
in the complaint.

1. The Meaning of Alcohol

HH Statutory construction commences
“with an examination of the plain language in
order to determine and give effect to the
legislative intent and purpose underlying the
statute.” State v. Pacquing, 189 Hawai'i 302,
810, 389 P.3d 897, 905 (2016). “The legisla-
ture is presumed not to intend an absurd
result, and legislation will be construed to
avoid, if possible, inconsistency, contra-
diction[,] and illogicality.” State v. Arceo, 84
Hawaii 1, 19, 928 P.2d 848, 861 (1996) (quot-
ing State v. Malufau, 80 Hawai'i 126, 137, 906
P.2d 612, 628 (1995). Invariably, this court’s
foremost obligation in statutory interpreta-
tion is to effectuate the statute’s purpose.
State v. Ganal, 81 Hawai‘i 358, 371, 917 P.2d
370, 388 (1996).

HRS § 291-1 defines alcohol as
the product of distillation of any fermented
liquid, regardless of whether rectified,
whatever may be the origin thereof, and
includes ethy! alcohol, lower aliphatic alco-
hol, and phenol as well as synthetic ethyl
alcohol, but not denatured or other alcohol
that is considered not potable under the
customs laws of the United States.

307

(Emphasis added.) Contrary to Tsujimura’s
contention, the statutory meaning of “alco-
hol” is not circumscribed to alcohol derived
from distillation. Tsujimura’s proffered inter-
pretation overlooks the conjunctive clause
“and includes” in the statutory definition.
Previous cases counsel that “ ‘including’
means either ‘an enlargement and has the
meaning of and or in addition to, or merely
specifies a particular thing already included
within the general words theretofore used.’”
State v. Guyton, 185 Hawaii 372, 879 n.14,
3651 P.3d 1138, 1145 n.14 (2015) (quoting Ha-
waiian Ass'n of Seventh-Day Adventists v.
‘Wong, 130 Hawai'i 36, 46, 305 P.3d 452, 462
(2018).

In this case, because “and” precedes “in-
cludes,” the phrase “and includes” means “in
addition to” instead of merely specifying par-
ticular examples of “product of distillation.”
Viewed another way, the second definitional
clause following “and includes” is separate
and distinct from the first definitional clause
ending with the word “thereof.” Accordingly,
“alcohol” means “the product of distillation of
any fermented liquid, regardless of whether
rectified, whatever may be the origin there-
of.” And “alcohol” also “includes ethyl alco-
hol, lower aliphatic alcohol, and phenol as
‘well as synthetic ethyl alcohol” regardless of
whether they are products of distillation.

To be sure, in cases where a general defi-
nitional clause is followed by a list prefaced
by the word “including,” this court has held
that the list provides examples that particu-
larize or elaborate upon the general defini-
tional clause. Pacquing, 189 Hawai'i at 319-
20, 889 P.8d at 914-15. In such cases, the
general definitional clause is treated as pro-
viding the outer limits of the meaning of the
defined term, and the list that follows “in-
cluding” is regarded as non-exhaustive exam-
ples of the general definitional clause. Lea-
laimatafao_vy, Woodward-Clyde_ Consultants,
75 Hawai'i 544, 556, 867 P.2d 220, 226 (1994),

But here, by using the phrase “and in-
cludes,” the legislature clearly disassociated
the first definitional clause from the second
definitional clause. “[E]thy] alcohol, lower al-
iphatic alcohol, and phenol as well as synthet-
ie ethyl alcohol” are not illustrative of or
circumscribed by the phrase “the product of

308

distillation,” and instead, they qualify as “al-
cohol” within HRS § 291E-1 even if they are
not a product of distillation. Hence, the
meaning of “alcohol” is inclusive of ethyl
aleohol, also commonly known as ethanol,
which “is the intoxicating agent in beer, wine,
and other fermented and distilled liquors.” 4
Accordingly, the statutory definition of “aleo-
hol” includes beer, wine, and other fermented
liquors because these substances contain eth-
anol!

This interpretation is consistent with the
purpose of the legislature in enacting the
OVUII statutes: to promote public safety by
making it a erime to operate a vehicle while
impaired by an intoxicant. See, eg, H.
Stand. Comm. Rep. No. 788-82, in 1982
House Journal, at 1261 (noting that the 1982
amendments sought to balance and weigh
“the need of protecting our citizens against
the danger of drunken drivers and, at the
same time, insuring that the measures
adopted to curb drunken driving do not dis-
criminate against any class of our society”).
Tsujimura’s interpretation, which would ex-
clude from OVUII prosecution persons im-
paired by alcohol not derived from distilla-
tion, would lead to a result that undermines
the legislative purpose. This illogical result is
avoided by effectuating the plain language of
the statutory definition of “alcohol,” which
includes ethyl alcohol regardless of origin or
derivation. Pac. Ins. v. Or. Auto Ins., 58 Haw.
208, 211, 490 P.2d 899, 901 (1971). Thus, the
ICA reached the correct result in holding
that “alcohol” is not limited to alcohol pro-
duced through distillation; however, this re-
sult is chiefly dictated by the plain language
of HRS § 291-1.

2. Sufficiency of the Complaint

Tsujimura argues that the com-
plaint should be dismissed as insufficient be-
cause the State failed to include the statutory
definition of “alcohol,” depriving him of his
state constitutional right to be apprised of
what he must defend against, “Article 1,
section 14 of the Hawai'i Constitution ...

11. Ethyl Alcohol, Webster Dictionary, http://
www.websterdictionary.org/definition/
ethylélcohol (last visited May 23, 2017).

12, Id,

ee

require[s] that ‘[iJn all criminal prosecutions,
the accused shall enjoy the right ... to be
informed of the nature and cause of the
accusation[.? ” State v. Wells, 78 Hawai'i 373,
379, 894 P.2d 70, 76 (1995) (alterations in
original). It is settled law that an “accusation
must sufficiently allege all of the essential
elements of the offense charged,” a require-
ment that “obtains whether an accusation is
in the nature of an oral charge, information,
indictment, or complaint.” State _v. Jen-
dirusch, 58 Haw, 279, 281, 567 P.2d 1242, 1244
(1977).

HM This court has noted that “[wJhere
the statute sets forth with reasonable clarity
all essential elements of the crime intended
to be punished, and fully defines the offense
in unmistakable terms readily comprehensi-
ble to persons of common understanding, a
charge drawn in the language of the statute
is sufficient.” Id, at 282, 567 P.2d at 1245;
accord State _v. Wheeler, 121 Hawai'i 383,
398, 219 P.8d 1170, 1180 (2009), But “where
the definition of an offense ... includes ge-
nerie terms, it is not sufficient that the in-
dictment shall charge the offense in the same
generic terms as in the definition; ... it must
state the species ... [and] descend to partic-
ulars.” State v, Israel, 78 Hawai'i 66, 78, 890
P.2d 808, 810 (1995) (quoting Russell v. Unit-
ed States, 369 U.S. 749, 765, 82 S.Ct. 1038, 8
L.Ed.2d 240 (1962)); accord Wheeler, 121
Hawai‘i at 398, 219 P.3d at 1180.

In this case, Tsujimura was charged by
complaint with being “under the influence of
alcohol in an amount sufficient to impair his
normal mental faculties or ability to care for
himself and guard against casualty.” As dis-
cussed, the statutory meaning of alcohol is
not limited to aleohol produced by the pro-
cess of distillation. The commonly understood
meaning of “alcohol” is that it is “a clear
liquid that has a strong smell, that is used in
some medicines and other products, and that
is the substance in liquors (such_as beer,
wine, or whiskey) that_can make a person
drunk.” 8 The statutory meaning of “alcohol”

13, Alcohol, Merriam-Webster, http://www.
merriamwebster.com/dictionary/alcohol (empha-
sis added) (last visited May 23, 2017), Similarly,
Oxford Dictionary defines “alcohol” as “fal col-
orless volatile flammable liquid that is produced

includes ethyl alcohol, which is the intoxicat-
ing agent in beer, wine, and other fermented
and distilled liquors. Thus, “alcohol,” as de-
fined by statute, encompasses substances and
beverages commonly understood to consti-
tute “alcohol” in lay terms. Accordingly, it
was not necessary to include the statutory
definition of “alcohol” in the complaint
against Tsujimura because the statutory defi-
nition “comport[s] with [the] commonly un-
derstood definition” of alcohol. Wheeler, 121
Hawai'i at 894, 219 P.8d at 1181. Thus, even
without the statutory definition of “alcohol,”
the complaint “fully defines the offense in
unmistakable terms,” is “readily comprehen-
sible to persons of common understanding,”
and is, therefore, sufficient. Jendrusch, 58
Haw, at 282, 567 P.2d at 1245,

B. Prearrest Right to Remain Silent

During the State’s case-in-chief in the trial
in this case, the prosecutor asked Officer
Billins on redirect examination, “Do you re-
call if the defendant indicated to you he
would have difficulty exiting the car because
of his previous leg injury?” Over defense
counsel’s repeated objection, the district
court permitted Officer Billins to answer the
prosecutor’s question. The officer responded,
“No statements were made.” Tsujimura ar-
gues that the information elicited by the
prosecutor—that he failed to tell Officer Bil-
lins that he would have difficulty exiting the
car because of his previous leg injury—im-
properly commented on his right to remain
silent.

In reviewing Tsujimura’s contention, it is
important to identify the timeframe that the
prosecutor’s question focused on when he

by the natural fermentation of sugars and is the
intoxicating constituent of wine, beer, spirits,
and other drinks, and is also used as an industri-
al solvent and as fuel.” Alcohol, English Oxford
Living Dictionaries, http/www.oxford
dictionaries.com/us/definition/american.english/
alcohol (last visited May 23, 2017).

14, The propriety of utilizing a defendant's silence
in criminal trials has been explored by the Su-
preme Court in several cases. In Doyle v. Ohio,
426 U.S. 610, 96 S.Ct. 2240, 49 L.Ed.2d 91
(1976), the Court held that the prosecution may
not impeach a defendant by using his post-arrest,
post-Miranda silence, reasoning that a defendant,
after being apprised of his or her Miranda right

309

asked Officer Billins about what Tsujimura
failed to say: it was before Tsujimura was
formally arrested or given Miranda warn-
ings. This court has not yet spoken on wheth-
er the right to remain silent, which is an
integral part of the privilege against com-
pelled self-incrimination, attaches prearrest
and, if so, whether and within what bounds
such silence may be used against a criminal
defendant at trial. See State v. Mainaaupo,
117 Hawai'i 235, 252 n.9, 178 P.8d 1, 18 n.9
(2008) (reasoning that “the [deputy prosecut-
ing attorney]’s comments could also be inter-
preted to refer to [defendant]’s pre-arrest
silence” but not addressing that issue be-
cause it was not raised, and also noting that
“courts are divided on whether the govern-
ment may comment on a defendant’s pre-
arrest silence”).

1. Prearrest Right to Remain Silent
Under Article I, Section 10 of
the Hawai‘i Constitution

The United States Supreme
Court has not definitively resolved under the
federal constitution the issue of whether the
privilege against compelled self-incrimination
attaches before arrest. Jenkins v. Anderson,
447 U.S. 281, 236 1.2, 100 S.Ct. 2124, 65
L.Bd.2d 86 (1980) (“Our decision today does
not consider whether or under what cireum-
stances prearrest silence may be protected
by the Fifth Amendment.”) The Supreme
Court was not required to resolve this issue
because its precedents “clearly permit[ ] im-
peachment even if the prearrest silence were
held to be an invocation of the Fifth Amend-
ment right to remain silent.” 4 Id.; Portuon-

to remain silent, cannot thereafter be penalized
for exercising that right. Id. at 611, 96 S.Ct.
2240. In Jenkins, the Supreme Court “con-
clude[d] that the Fifth Amendment is not violated
by the use of prearrest silence to impeach a
criminal defendant's credibility” because, by tes-
tifying at his or her own trial, the defendant
“cast[s] aside his cloak of silence” and impeach-
ment is a necessary concomitant of that decision.
447 US. at 238, 100 S.Ct. 2124. Two years later,
the Supreme Court decided Fletcher v. Weir, 455
U.S. 603, 102 S.Ct. 1309, 71 L.Ed.2d 490 (1982),
a case in which the defendant, post-arrest, was
not given Miranda warnings. “In the absence of
the sort of affirmative assurances embodied in
the Miranda warnings,” the Court held that it is
not a violation of “due process of law for a State

310

do v. Agard, 529 U.S. 61, 70, 120 S.Ct, 1119,
146 L.Ed.2d 47 (2000) (noting that, under
Jenkins, “it was not clear whether the Fifth
Amendment protects prearrest silence”), But
because this court is “the ultimate judicial
tribunal with final, unreviewable authority to
interpret and enforce the Hawai'i Constitu-
tion, [it is] free to give broader protection
under the Hawai'i Constitution than that giv-
en by the federal constitution.” State v. Ar-
ceo, 84 Hawai'i 1, 28, 928 P.2d 843, 870 (1996)
(quoting State v. Wallace, 80 Hawai'i 382, 397
n.14, 910 P.2d 695, 710 n.14 (1996)); see, e.g.,
State v. Hoey, 77 Hawai'i 17, 36, 881 P.2d
504, 523 (1994) (affording broader protection
to suspects during custodial interrogation un-
der the Hawai'i Constitution than that pro-
vided by the federal constitution). Thus, this
court may interpret the Hawai‘i Constitution
to provide broader rights against self-incrim-
ination than its federal counterpart.

In determining whether the right to re-
main silent attaches before arrest, the gov-
erning provision of the Hawai'i Constitution
is article I, section 10, which provides, “[Nlor
shall any person be compelled in any criminal
case to be a witness against oneself.” Haw.
Const. art, I, § 10, In Mainaaupo, this court
held that “the right against self-incrimination
attache[s] at least as of the time of [an]
arrest,” regardless of whether Miranda
warnings have been given, 117 Hawai'i at
252, 178 P.8d at 18, The Mainaaupo court left
open the question of whether the right
against self-incrimination attaches before ar-
rest, See id. at 252 n.9, 178 P.8d at 18 ng
(noting that whether the right against self-
incrimination applies to prearrest silence was

to permit cross-examination as to postarrest si-
lence when a defendant chooses to take the
stand” for the purpose of impeaching the defen-
dant, Id. at 607, 102 S.Ct. 1309. In Salinas v.
Texas, 570 U.S. 178, 133 S.Ct. 2174, 186 L.Ed.2d
376 (2013) (plurality), prosecutors used the de-
fendant's silence during a pre-custodial interview
as substantive evidence of guilt. Id, at 2178—79.
A plurality of the Court concluded that, where
the defendant does not invoke the right to remain
silent in a non-coercive, pre-custodial interview
situation, prosecutors could use the defendant's
prearrest silence as substantive proof of guilt. Id.
at 2184.

15. See, e.g., Haw. Const. art. I, § 14 (enumerat-
ing rights that only accrue to individuals that
have already been “accused” of a crime). We

not an issue and was therefore not ad-
dressed),

HM This court construes the provisions
of the Hawai‘ Constitution using canons sim-
ilar to those used in statutory construction,
“(The settled rule is that in the construction.
of a constitutional provision the words are
presumed to be used in their natural sense
unless the context furnishes some ground to
control, qualify, or enlarge them.” Haw. State
AFL-CIO v, Yoshina, 84 Hawai'i 874, 376,
985 P.2d 89, 91 (1997) (quoting Pray v. Judi-
cial Selection Comm’n, 75 Hawai'i 338, 342,
861 P.2d 728, 727 (1998)). The plain language
of article I, section 10 provides, “[N]Jor shall
any person be compelled to be a witness
against oneself.” Haw. Const. art. I, § 10.
Unlike those provisions of the Hawai'i Con-
stitution that explicitly apply only to speci-
fied categories of individuals," article I, sec-
tion 10 is clear that its guarantees are meant
to attach to “any person.” Cf. United States
ex. rel. Savory v. Lane, 882 F.2d 1011, 1017
(7th Cir, 1987) (comparing the language of
the Sixth Amendment, which gives the right
to counsel to an “accused,” with the language
of the Fifth Amendment, which states that
“[nJo person shall ,.. be compelled in any
criminal case to be a witness against him-
self”),

Thus, the privilege against compelled self-
incrimination functions to protect “any per-
son” regardless of whether that person has
been arrested or accused. It is therefore
evident from the language of article I, section
10 that the right to remain silent attaches
even before arrest is made.!® Cf. id, (holding

voice no opinion regarding the timeframe and
manner in which the various rights enumerated
in article I, section 14 apply. We simply note the
plain-language difference between article I, sec-
tion 14 and article I, section 10.

16, See also Tortolito v. State, 901 P.2d 387, 390
(Wyo. 1995) (holding that under Wyoming's con-
stitution, there is ‘no rational reason to limit the
protection embracing the citizen’s right to si-
lence to the postarrest or post-Miranda situation.
The constitutional right to silence exists at all
times—before arrest, at arrest, and after arrest;
before a Miranda warning and after it. The right
is self-executing.’’); State v. Fencl, 109 Wis.2d
224, 325 N,W.2d 703, 711 (1982) (“The Fifth
Amendment protects a person from compelled
self-incrimination at all times, not just upon ar-

that the right to remain silent attaches even
before arrest and reasoning that, based on
the language of the U.S. Constitution, “unlike
the right to counsel,” the right to remain
silent “attaches before the institution of for-
mal adversary proceedings”),

Hs In confirming the plain-language in-
terpretation of a constitutional provision, the
intent underlying its ratification is a relevant
consideration. See State _v. Rodrigues, 63
Haw, 412, 416, 629 P.2d 1111, 1114 (1981),
The purpose of the privilege against self-
incrimination is twofold: to protect an indi-
vidual “from having to reveal, directly or
indirectly, his knowledge of facts relating
him to the offense or from having to share
his thoughts and beliefs with the Govern-
ment,” Doe v. United States, 487 U.S. 201,
218, 108 S.Ct. 2341, 101 L.Bd.2d 184 (1988),
and to “demand[ ] that the government seek-
ing to punish an individual produce the evi-
dence against him by its own independent
labors, rather than by the cruel, simple expe-
dient of compelling it from his own mouth,”
Miranda vy. Arizona, 384 U.S. 486, 460, 86
S.Ct, 1602, 16 L.Ed2d 694 (1966), Accord
State v. Grahovac, 52 Haw. 527, 582-38, 480
P.2d 148, 152 (1971).

Establishing that the privilege against
compelled self-incrimination attaches to a
person even without formal arrest or the
institution of criminal proceedings effectuates
the purpose underlying the privilege, for it
places on the government the onus of produc-
ing evidence against individuals that the gov-
ernment intends to punish and correspond-
ingly frees individuals from any obligation to
speak, It is also consistent with the fact that
“the right to remain silent derives from the
Constitution and not from the Miranda warn-

rest or during a custodial interrogation.”); see
also Coppola v. Powell, 878 F.2d 1562, 1565 (ist
Cir. 1989) (holding that the privilege against self-
incrimination may be asserted prearrest); United
States v. Burson, 952 F.2d 1196, 1200 (10th Cir.
1991) (accord).

17, See State v. Raster, 130 Wash.2d 228, 922
P.2d 1285, 1290—91 (1996) (“‘An accused's right
to silence derives, not from Miranda, but from
the Fifth Amendment itself, The Fifth Amend-
ment applies before the defendant is in custody
or is the subject of suspicion or investigation.”);
Fenel, 325 N.W.2d at 711 n.10 (“‘Nor is the Fifth

311

ings themselves,” Mainaaupo, 117 Hawai'i at
252, 178 P.8d at 18 (quoting United States v.
Velarde-Gomez, 269 F.3d 1028, 1029 (9th Cir,
2001) (en bane)); accord Roberts v. United
States, 445 U.S. 552, 560, 100 S.Ct. 1858, 68
L.Ed.2d 622 (1980), and that, therefore, the
privilege against self-incrimination exists
even without the articulation of Miranda
warnings,”

HM Given that the right to remain silent
attaches prearrest pursuant to article I, sec-
tion 10, we hold that the right clearly at-
tached in this case at least at the point when
Tsujimura was detained as a result of the
investigatory stop. See State v. Bleneki, 106
Hawai'i 177, 180, 102 P.8d 1075, 1078 (2004)
(“It is axiomatic that ‘stopping an automobile
and detaining its occupants constitutes a “sei-
gure” within the meaning of the Fourth
Amendment to the United States Constitu-
tion and Article I, Section 7 of the Hawai'i
Constitution, even though the purpose of the
stop is limited and the resulting detention
quite brief’” (quoting State _v. Powell, 61
Haw, 816, 320, 603 P.2d 148, 147 (1979).
Thus, upon Tsujimure’s seizure, his right to
remain silent was invoked, and this right
continued during his detention,

The question then arises as to whether
prearrest silence may be used by the State
against a defendant and, if so, within what
bounds. As stated, the Supreme Court has
held that prearrest silence may be used to
impeach a defendant. See Jenkins, 447 U.S.
231, 100 S.Ct. 2124; supra note 14, But the
Supreme Court has not yet spoken on
whether prearrest silence may be used as
substantive proof of guilt, and circuit courts
of appeals are split over this issue. Several
circuits have held that prearrest silence may

Amendment right against self-incrimination de-
pendent upon a person’s receipt of the Miranda
warning. Miranda did not create new rights but,
rather, held that the constitutional guarantees
already accorded a defendant by the Fifth and
Sixth Amendments should be explained to the
defendant during a critical stage of the criminal
proceeding.”).

18. Because this case involves a seizure situation,
‘we express no opinion as to other prearrest situa-
tions in which the right to remain silent would
be triggered, We do not reach that issue because
it is not implicated in this case.

312

not be used as substantive proof of guilt. See
Coppola v. Powell, 878 F.2d 1562, 1568 (Ist
Cir. 1989) (by using defendant’s prearrest
silence in the prosecution’s case-in-chief, de-
fendant’s Fifth Amendment rights were vio-
lated); United States v. Caro, 637 F.2d 869,
876 (2d Cir, 1981) (holding that prearrest
silence cannot be used as substantive proof
of guilt in the prosecution’s case-in-chief);
Combs v, Coyle, 205 F.8d 269, 288 (6th Cir.
2000) (concluding that the “use of a defen-
dant’s prearrest silence as substantive evi-
dence of guilt violates the Fifth Amend-
ment’s privilege against self-incrimination”);
Lane, 882 F.2d at 1017-18 (holding that the
use of defendant’s prearrest silence as proof
of guilt was unconstitutional); United States
y. Burson, 952 F.2d 1196, 1201 (10th Cir.
1991) (admitting prearrest silence as sub-
stantive evidence of guilt is impermissible
under the Fifth Amendment). Other circuits
have reached the opposite result, holding
that the use of prearrest silence as substan-
tive proof of guilt is constitutionally permis-
sible. See United States v. Zanabria, 74 F.8d
590, 593 (6th Cir. 1996) (use of defendant’s
prearrest silence as proof of guilt, under the
circumstances, did not violate the Fifth
Amendment); United States v. Oplinger, 150
F.8d 1061, 1066-67 (9th Cir. 1998) (prearrest
silence may be used as evidence of guilt
without violating the Fifth Amendment),
overruled on other grounds by United States

178, 183 S.Ct. 2174, 186 L.Ed.2d 376 (2018)
(plurality), left unresolved this split of au-
thority among the federal circuits and held
that, even assuming that prearrest silence
may not be used as substantive evidence of
guilt, the defendant in that case could not
take advantage of that protection because he
failed to expressly invoke the right.
Numerous state appellate courts have also
taken the position that prearrest silence can
be used only to impeach a defendant and not.
as proof of guilt in the prosecution’s case-in-
chief. See State y. Reid, 161 N.H. 569, 20
A3d 298, 304 (2011) (“A defendant's pre-
arrest silence may be used to impeach his
credibility, but the use of pre-arrest silence
in the State’s case-in-chief is unconstitution-
al.”); State v. Brown, 190 N.J. 144, 919 A.2d
107, 116-17 (2007) (testimony regarding de~
fendant’s prearrest silence “would have been
appropriate as impeachment evidence if it
had been offered in rebuttal” and not in the
prosecution’s case-in-chief); ‘Tortolito v.
State, 901 P.2d 887, 390 (Wyo. 1995) (use of
prearrest silence to infer guilt is constitution-
ally prohibited); State v. Parker, 157 Idaho
182, 334 P.3d 806, 821 (2014) (same); State v.
Easter, 180 Wash.2d 228, 922 P.2d 1285,
1290-92 (1996) (same); State v. Rowland, 234
Neb. 846, 452 N.W.2d 758, 763 (1990) (same);
State v. Fencl, 109 Wis.2d 224, 825 N.W.2d
708, 711 (1982) (same); State _v. Taylor, —

y. Contreras, 593 F.8d 1185 (9th Cir. 2010);
United States v. Rivera, 944 F.2d 1568, 1567-
68 (1ith Cir. 1991) (holding that the govern-
ment may comment on defendant’s prearrest
silence because the right against self-incrimi-
nation does not attach until after arrest and
Miranda warnings have been given). The Su-
preme Court, in Salinas v. Texas, 570 U.S.

19. Salinas, 133 S.Ct. at 2179 (‘We granted cer-
tiorari to resolve a division of authority in the
lower courts over whether the prosecution may
use a defendant's assertion of the privilege
against self-incrimination during a noncustodial
police interview as part of its case in chief. But
because petitioner did not invoke the privilege
during his interview, we find it unnecessary to
reach that question.” (citations omitted); Rinat
Kitai-Sangero & Yuval Merin, Probing into Sali-
nas’s_ Silence: Back to the “Accused Speaks’
Model?, 15 Nev. LJ. 77, 77-78 (2014) (stating
that the plurality opinion in Salinas avoided rul-
ing on whether preartest silence may be used as

N.C.App. , 780 S.E.2d 222, 224 (2015)
(same); State v. Palmer, 860 P.2d 339, 349-50
(Utah Ct. App. 1993) (same).

HN We agree with the federal cireuit
courts of appeals and the several States that.
have held as unconstitutional the use of pre-
arrest silence as substantive evidence of
guilt.” To hold otherwise would “create an

substantive proof of guilt “and instead decided
the case on a technicality”).

20. This court need not reach the issue of wheth-
er, under the Hawai'i Constitution, a defendant's
prearrest silence can be used for impeachment
purposes in cases where the defendant chooses
to testify because, in this case, Tsujimura’s prear-
rest silence was used as substantive evidence of
guilt. Further, Tsujimura did not testify, so there
was never any basis to impeach his credibility by
using his prearrest silence. See Brown, 919 A.2d
at 116-17 (because defendant did not testify, the
prosecutor’s use of defendant's silence could not

incentive for arresting officers to delay inter-
rogation in order to create an intervening
‘silence’ that would then be used against the
defendant.” Mainaaupo, 117 Hawai'i at 252,
178 P.3d at 18 (quoting United States v.

313

Amendment right not to be a ‘witness’
against himself in a ‘criminal case.’” (quoting
Chavez v. Martinez, 588 U.S. 760, 768-760,
128 S.Ct. 1994, 155 L.Ed.2d 984 (2008)));
Griffin v. California, 380 U.S. 609, 613-14, 85

Moore, 104 F.3d 877, 886 (D.C. Cir. 1997));
accord aster, 922 P.2d at 1290-91; Tortolito,
901 P.2d at 390 (permitting the use of prear-
rest silence as proof of guilt leads to a sys-
tem where the government “can time the
citizen’s arrest to occur after the citizen
stands mute in the face of the accusation”).
Indeed, allowing prearrest silence to be used
as proof of guilt “would also encourage the
authorities to refrain from issuing Miranda
warnings as long as possible in an attempt to
generate either inferential evidence of guilt
from silence or an admission prior to custodi-
al interrogation.” Palmer, 860 P.2d at 349-50;
accord Easter, 922 P.2d at 1290.

Proseribing the use of prearrest silence
that occurs at least as of the time that a
person has been detained is also consistent
with the well-established tenet that a person
being questioned by a law enforcement offi-
cer during an investigatory stop “is not.
obliged to respond.” Berkemer v. McCarty,
468 U.S. 420, 489, 104 S.Ct, 3188, 82 L.Ed.2d
817 (1984), If the State were authorized to
use a person’s silence during an investigatory
stop as substantive evidence of guilt, it would
effectively punish a person for exercising a
legal right, a result that is constitutionally
unacceptable. Cf, State v. Wakisaka, 102 Ha-
wail 504, 514-15, 78 P.8d 317, 827-28 (2008)
({N]o ‘penalty’ may ever be imposed on
someone who exercises his core Fifth

have been for impeachment); State v. Harrison,
218 N.C.App. 546, 721 S.E.2d 371, 379 (2012)
(police officer's statement as to defendant's pre-
arrest silence could not have been used for im-
peachment where the defendant testified after
the police officer).

21. Under the facts of this case, where there was
no verbal exchange between the police officer
and the defendant, there is no requirement that
the defendant invoke the right to remain silent
because, at that particular juncture, there was no
opportunity to do so.

We further reaffirm that, where the prearrest
silence occurs in the context of a person’s refusal
to answer questions, there is no “express invoca-
tion” requirement in order to trigger the right to
remain silent under the Hawai'i Constitution; we

S.Ct. 1229, 14 L.Ed.2d 106 (1965) (denoune-
ing the practice of commenting on a defen-
dant’s silence as “a penalty imposed by
courts for exercising a constitutional privi-
lege” in that “[i]t “cuts down on the privilege
by making its assertion costly”).

Hs Finally, we emphasize that the
silence used against Tsujimura was not made
in response to a question posed by Officer
Billins. The prosecutor’s question was wheth-
er Tsujimura told Officer Billins that his
injuries would give him a difficult time exit-
ing his car; that is, the prosecutor was asking
what Tsujimura failed to say even if the
information was not prompted or sought
from him by Officer Billins.24

In light of these circumstances, permitting
silence to serve as an implication of guilt
would mean that the State would always be
able to use as substantive proof of guilt
prearrest silence not made in response to a
question by a police officer. The prosecutor
need only identify a point in time during the
defendant’s interaction with the police officer
when no question was posed and no verbal
exchange was had (and, therefore, the defen-
dant was expectedly silent) and use that si-
lence as evidence to infer the defendant's
guilt, This would engender a result where, in
any encounter between a law enforcement
officer and a citizen, the State would be able
to adduce evidence of prearrest silence in

thus reject the holding of the plurality opinion in
Salinas, which requires the defendant to express-
ly invoke the right to silence by “‘say[ing] that [he
or she] was not answering the officer’s question
on Fifth Amendment grounds” or something sim-
ilarly phrased. Salinas, 133 S.Ct. at 2180. Ha-
wai'i case law is clear that the constitutional
right against self-incrimination under the Ha-
wai'i Constitution is invoked when a person “ei-
ther remains silent or expresses ‘his desire to
deal with police interrogators only through his
counsel,’”” State v. Luton, 83 Hawai'i, 443, 453,
927 P.2d 844, 854 (1996) (emphasis added)
(quoting State v. Mailo, 69 Haw. 51, 731 P.2d
1264 (1987). Thus, under the Hawai'i Constitu-
tion, the mere fact that a person remained silent
in the face of police questioning is enough to
invoke the right to remain silent, and “express
invocation” is not necessary.

314

myriad ways (e.g., When she was handing
you her driver’s license and registration, did
she say anything about her injuries?, While
she was opening the glove box, did she say
anything about her injuries?, While she was
outside the car, did she say anything?, etc.).
This acutely prejudicial effect is magnified
for non-native English language speakers,
youth, and other individuals detained at a
traffic stop who may be reluctant to speak in
the presence of law enforcement officers due
to age, gender, or linguistic, cultural, or other
reasons. The burden to explain at trial their
prearrest silence would fall upon these defen-
dants whenever the State uses their silence
to imply their guilt, compromising their con-
stitutional right to choose not to testify and
raising questions of fundamental fairness.

Accordingly, for the reasons stated, the
State may not use as substantive proof of
guilt a defendant’s prearrest silence that oc-
curs at least as of the time of detention, for
doing so would violate the right against com-
pelled self-incrimination under article I, see-
tion 10 of the Hawai'i Constitution.

2. The Constitutional Prohibition on
Prosecutorial Comment on One’s Ex-
ercise of the Right to Remain Silent

HEM oI» this case, the information
about Tsujimura’s prearrest silence was in-
troduced at trial through the prosecutor's
redirect examination of Officer Billins, who
testified that Tsujimura did not say that his
injury would give him difficulty exiting his
car, A concomitant of the right to remain
silent is the prohibition on the prosecution
from commenting on a person’s exercise of
that right. State v. Rodrigues, 118 Hawai‘
41, 49, 147 P.3d 825, 888 (2008) (“As a rule,
the prosecution may not comment on a de-
fendant’s failure to testify.” (quoting State v.
Wakisaka, 102 Hawai'i 504, 514-15, 78 P.8d

22, The origin of the Padilla test is illuminating in
this regard. It was originally adopted by this
court from United States v. Wright, a Seventh
Circuit case involving a challenge to a portion of
the prosecutor's closing argument, 309 F.2d at
738-739, Wright borrowed the Padilla formula-
tion from”"Knowles v. United States, which also
involved a challenge to the prosecutor's closing
argument. 224 F.2d 168, 170 (10th Cir, 1955),
Knowles, in turn, adopted the Padilla test from
Morrison v. United States, an Righth Circuit case

817, 827-28 (2008))), A prosecutor may not
imply guilt from a defendant's exercise of the
right to remain silent, for doing so would
dilute the right, undermine the values that
the right protects, and penalize the defen-
dant for exercising a constitutional right. See
State v. Melear, 63 Haw. 488, 496, 630 P.2d
619, 626 (1981) (noting that a prosecutor may
not comment on a defendant’s silence in a
manner that suggests such silence as evi-
dence of guilt),

In evaluating the propriety of a prosecu-
tor’s comment in certain trial situations, the
test that this court has “applied is whether
the language used was ‘manifestly intended
or was of such character that the jury would
naturally and necessarily take it to be a
comment on the failure of the accused to
testify.’” State v. Padilla, 57 Haw. 150, 158,
552 P.2d 357, 362 (1976) (quoting United
States v. Wright, 8309 F.2d 785, 788 (7th Cir.
1962)), overruled on other grounds by State
y. Cabaghag, 127 Hawai'i 302, 277 P.8d 1027
(2012). The Padilla test was designed and has
been most often used in cases where the
prosecutor makes comments, after the close
of evidence, on the defendant’s failure to
testify. See, e.g,, Melear, 63 Haw. at 496, 630
P.2d at 626 (closing argument); Wakisaka,
102 Hawai'i at 515, 78 P.8d at 828 (rebuttal
argument); State v. Valdivia, 95 Hawai'i 465,
481, 24 P.8d 661, 677 (2001) (closing and
rebuttal arguments).?2 Approximately ten
years ago, this court avowed application of
the Padilla test in a case involving a ques-
tion-and-answer exchange between a prose-
cutor and a detective during the State’s case-
in-chief. In Rodrigues, the prosecutor asked
the detective what the defendant's response
was to the detective’s request to tape-record
their conversation. 118 Hawai'i at 46, 147
P.8d at 880, The detective answered, “As I
recall, he did not wish to be tape-recorded.”

that dealt with the propriety of the court’s jury
instructions, 6 F.2d 809, 811 (8th Cir, 1925), It is
thus apparent that the Padilla test was originally
fashioned to cover situations in which the defen-
dant seeks to challenge the conduct of the prose-
cutor or the court that occurs after the close of
evidence, not instances in which the challenge
relates to information elicited by a prosecutor
from a witness during the testimony phase of the
trial,

Id, The defendant later challenged the infor-
mation elicited, contending that his refusal to
be tape-recorded was used as a negative
inference of his credibility and, thus, improp-
erly commented on his right to remain silent.
Id, at 49, 147 P.8d at 888,

In rejecting the defendant’s challenge, this
court focused on the purpose of the prosecu-
tion in adducing information about the defen-
dant’s refusal to be tape-recorded and the
fact that the information did not suggest any
inference of guilt. The court explained “that
the question ... posed, and the information
elicited, [w]as part of the prosecution’s effort
to maximize the reliability of [the detective’s]
recollections and to explain why the detective
could only rely on his notes and not an
audiotape of the interview.” Id, Further, the
court reasoned that the prosecutor’s question
was “part of a line of inquiry designed to
establish the detective’s custom and practice
regarding accurately transcribing ... state-
ments” and “was unaccompanied by any im-
plication of guilt with respect to [the defen-
dant]’s unwillingness to be audiotaped.” Id.
at 49-50, 147 P.8d at 888-84, Accordingly,
the court held that the information elicited
from the detective during the State’s case-in-
chief was not an improper comment on the
defendant’s right to remain silent. Id. at 50,
147 P.8d at 884,

We note that the plain language of Padil-
la—“comment on failure to testify’—is not
readily applicable to cases involving a ques-
tion-and-answer exchange between a prose-
eutor and a witness that leads to evidence
concerning the defendant’s pretrial silence,
Padilla’s focus is on a defendant's “failure to
testify” and not on a defendant’s pretrial
exercise of the right to remain silent. In
addition, although Rodrigues appears to have
made the Padilla framework applicable to
cases with facts generally similar to this case,
Rodrigues actually adjusted and particular.
ized the Padilla framework to make it more
suitable for application in situations where

23, The exchange between the prosecutor and the
witness commonly transpires during the State's
case-in-chief; thus, the prosecutor under such
circumstances would not have the opportunity to
comment on the defendant's “failure to testify”
because the defendant's presentation of his or
her case is yet to commence such that it is still

315

the challenged “comment” is made during a
question-and-answer exchange between a
prosecutor and a witness. It is evident from
the court's line of reasoning in Rodrigues
that the core of the analysis is predicated
upon the prosecution’s purpose in eliciting
the contested evidence or on the character of
the evidence. See id. at 49-50, 147 P.8d at
883-84 (reasoning that the purpose of the
prosecution’s question was not to imply guilt
and that the information elicited “was unac-
companied by any implication of guilt”).

HM We now clarify the Rodrigues test:
In cases where the prosecution elicits from a
witness information regarding the defen-
dant’s prearrest silence, the test is whether
the prosecutor intended for the information
elicited to imply the defendant's guilt or
whether the character of the information
suggests to the factfinder that the defen-
dant’s prearrest silence may be considered as
inferential evidence of the defendant’s guilt,
See also Ouska v. Cahill-Masching, 246 F.3d
1086, 1049 (7th Cir. 2001) (concluding that
the prosecutor’s questions regarding the de-
fendant’s prearrest, pre-Miranda silence
were improper because they were used to
infer the defendant's guilt); Tortolito v. State,
901 P.2d 887, 391 (Wyo. 1995) (determining
that the prosecutor’s questions to the officer
regarding the defendant’s prearrest silence
was impermissible and that “[a] comment
upon an accused’s silence occurs when used
to the state’s advantage either as substantive
evidence of guilt or to suggest to the jury
that the silence was an admission of guilt”);
State v. Haster, 180 Wash.2d 228, 922 P.2d
1285, 1289 (1996) (noting that “the State may
not elicit comments from witnesses or make
closing arguments relating to a defendant’s
silence to infer guilt from such silence”);
State _v. Leach, 102 Ohio St8d 185, 807
N,E.2d 885, 889 (2004) (testimony regarding
the defendant’s prearrest silence was im-
properly admitted because it “was clearly
meant to allow the jury to infer [the defen-

uncertain whether the defendant would choose
to testify. See Hawai'i Rules of Penal Procedure
Rule 24.1(a) (2000) (providing that the defen-
dant's case typically commences at the close of
the State's case-in-chief unless the court orders
otherwise).

316

dant]’s guilt”); Commonwealth v. Collett, 17
Mass.App.Ct. 918, 455 N.E.2d 1006, 1008
(1983) Gn evaluating whether testimony re-
garding the defendant's prearrest silence was
properly admitted, the court reasoned that
the prosecutor “did not ask the jury to infer
an admission or consciousness of guilt from
the defendant's silence”); State v. Terry, 181
Wash.App. 880, 328 P.8d 982, 938 (2014) (ex-
plaining that an indirect comment on the
defendant’s prearrest silence, adduced by a
question at trial, is improper if it implies the
defendant’s guilt),

3. The Information Elicited by the
Prosecutor Violated Tsujimura’s
Right to Remain Silent

Hl As stated, the information elicited by
the prosecutor from Officer Billins during the
State’s case-in-chief is the fact that Tsujimu-
va did not say anything about his injury as he
was exiting his car. The ICA concluded that
the information elicited by the prosecutor
‘was not a comment on the right to remain
silent because the prosecutor’s question and
“Officer Billins’ answer were directed at
whether there was any indication that Tsu-
jimura’s prior knee injury affected his ability
to perform the field sobriety tests.” State v.
Tsujimura, 137 Hawai'i 117, 124, 366 P.8d
178, 180 (App. 2016). However, the fact that
Tsujimura’s prearrest silence was used to
prove that his performance of the FSTs was
not affected by his injury is exactly the rea-
son why the information elicited was an im-
permissible comment. By eliciting the fact
that Tsujimura did not say anything about
his injury while he exited his car, it was clear
that the State’s purpose was to imply that
Tsujimura’s injuries did not physically inhibit
him from performing the FSTs and to infer-
entially establish that Tsujimura’s diminished
faculties during the FSTs were a product of
intoxication and not influenced by his inju-
ries.

This purpose was essentially conceded by
the State when it indicated in its answering
brief that one of the purposes of the prosecu-

24, Although the district court judge in this case
telied on evidence of prearrest silence in render-
ing his verdict, it is the State's purpose for prof.
fering the evidence (whether the State intended
for the evidence to imply the defendant's guilt) or

tor’s question was to “show that there was no
indication that Tsujimura’s leg injury affect-
ed the FST test.” The State therefore intend-
ed for the exchange between the prosecutor
and Officer Billins to adduce information
about Tsujimura’s prearrest silence as sub-
stantive proof of his guilt, which as discussed
supra, the State may not do. See also Ouska
vy. Cahill-Masching, 246 F.3d 1036, 1049 (7th
Cir. 2001); State v. Leach, 102 Ohio St3d
135, 807 N.H.2d 835, 839 (2004); Tortolito v.
State, 901 P.2d 887, 391 (Wyo. 1995).

In addition, even if we were to assume that
the State’s purpose in offering evidence of
Tsujimura’s prearrest silence was proper,
the character of the evidence would still lead
to the conclusion that its admission at trial
was improper. The evidence suggested to the
district court judge that Tsujimura’s silence
implied that his physical condition while per-
forming the FSTs was due to alcohol impair-
ment and that, therefore, he was guilty as
charged. That is, the character of the infor-
mation about Tsujimura’s prearrest silence
was such that it suggested to the factfinder
that Tsujimura’s prearrest silence may be
considered as inferential evidence of Tsujim-
ura’s guilt, And the district court accepted
this suggestion. In finding Tsujimura guilty,
the district court expressly relied on Officer
Billins’ testimony that when Tsujimura
“alighted from the car, he did not indicate
any difficulty walking.” Thus, the court used
Tsujimura’s prearrest silence at least in part
to find him guilty of OVUII™

Accordingly, the information regarding
Tsujimura’s prearrest silence was erroneous-
ly admitted because the State’s purpose in
adducing it was to imply Tsujimura’s guilt
and because the character of the information
suggested to the district court judge that it
may be considered as inferential evidence of
Tsujimura’s guilt. Hach of these reasons is
independently sufficient to support the con-
clusion that the information elicited by the
prosecutor violated Tsujimura’s right against
compelled self-incrimination guaranteed by

the character of the evidence (whether it suggests
to the factfinder that guilt may be inferred from
prearrest silence) that is the pivotal consider-
ation.

article I, section 10 of the Hawai‘i Constitu-
tion.5

The concurring and dissenting opinion (dis-
sent) proposes that “the Rodrigues analysis
requires courts to discern whether the State
sought to imply a defendant’s guilt by virtue
of the very fact that the defendant was si-
lent.” Dissent at 820, 400 P.8d at 521. Ac-
cording to the dissent, “the Rodrigues test
requires courts to evaluate whether the State
elicited evidence of the defendant's silence as
direct evidence of the defendant’s culpability,
or whether the State sought to legitimately
illustrate other relevant facts by virtue of the
defendant’s lack of verbal communication.”
Dissent at 321, 400 P.8d at 522, Thus, the
dissent posits that Rodrigues does not pre-
clude the State from using a defendant’s
silence in order to imply other facts that
“Gdentify[ ] the gaps in the defendant’s theory
of the case or other exculpatory evidence
that the defendant has adduced at trial.”
Dissent at 321, 400 P.8d at 522.

We respectfully disagree with the dissent
because its approach would allow the State to
use a defendant's silence to indirectly imply
or obtain evidence that bears upon the defen-
dant’s guilt. Under the dissent’s view, a pros-
ecutor’s comment would be improper only if
it directly suggested to the factfinder that
the defendant is guilty because he or she
remained silent in a situation wherein an
innocent person would have spoken. In cases

25, It is noted that State v. Alo, 57 Haw. 418, 558
P.2d 1012 (1976), does not apply in this case.
There, the defendant offered self-serving testimo-
ny as to statements he allegedly made to police
after he was arrested and given Miranda warn-
ings. Id. at 423, 558 P.2d at 1015. On cross-
examination, the State asked questions intended
to establish that the defendant was silent post-
arrest and post-Miranda, Id. at 421-32, 558 P.2d
at 1014-15. This court held that the questions
about defendant’s silence after his arrest were
proper. Id. at 425-26, 558 P.2d at 1017. Thus, in
Alo, this court allowed the State to use post-
arrest, post-Miranda silence in order to refute the
defendant’s testimony regarding what he alleged-
ly said to the police at the time of his arrest.

26. The dissent elaborates on its approach by
indicating that it allows silence to be used to
“support a collateral fact other than the defen-
dant’s guilt itself.” Dissent at 323, 400 P.3d at
524. The dissent then characterizes a defendant’s
physical state and state of mind as “collateral”
facts that may be proved by relying at least in

317

such as this one, the dissent’s approach
would permit the State to indirectly use the
defendant's prearrest silence to gain substan-
tive evidence that bears upon the defendant’s
guilt. So long as the prosecutor’s comment.
only utilizes silence in order to obtain other
evidence or establish inferences that can sub-
stantively prove the defendant’s guilt, the
dissent’s interpretation of Rodrigues would
permit the comment.

This could not be the case because direct
and indirect use of a defendant's silence has
the same ultimate effect: it serves as a mech-
anism for the State to imply the defendant’s
guilt, The only difference between the two is
the level of blatancy. With indirect use, the
State utilizes silence as the means to garner
evidence or inferences that bear upon the
defendant’s guilt. With direct use, the State
employs silence as proof that the defendant
is guilty for failing to speak. In short, the
dissent’s framework would allow the State to
do indirectly what the dissent concedes the
State may not do directly. In this case, for
example, the dissent’s framework deems the
comment on Tsujimura’s prearrest silence as
constitutional because it illustrates “other
relevant facts.” Dissent at 321, 400 P.3d at
522. Those relevant facts, however, relate to
the determination of Tsujimura’s guilt. Thus,
the dissent’s framework runs counter to the
rationale underlying the prohibition on the
use of prearrest silence as substantive proof
of guilt.2® See supra. Whether silence is used

part on the defendant's silence. Dissent at 321,
400 P.3d at 524, However, state of mind is an
essential component of the State’s burden of
proof in criminal cases. HRS § 702-204 (1993).
And a defendant’s physical state is critical in
offenses such as OVUII, see HRS § 291B-
61(a)(1) (Supp. 2014), whose proof most often
relies on the manner in which certain physical
acts are performed and on the physical manifes-
tations of intoxication and impairment. To this
extent, state of mind and physical state are hard-
ly “collateral” or “ancillary.” Dissent at 322,
323, 400 P.3d at 523, 524,

Even accepting the dissent’s framework—that
silence may be used to establish collateral facts—
Tsujimura’s silence cannot be said to have been
used in this manner. Tsujimura’s silence was
used to prove that his performance of the FSTs
was not influenced by his injury but by an intoxi-
cant, thereby supporting a finding of guilt. Thus,
the use of his silence was not simply geared
toward establishing a collateral “fact that is sep-
arate and distinct” from evidence of Tsujimura’s
guilt. Dissent at 323, 400 P.3d at 524.

318

directly or indirectly, the person against
whom the silence is used would be punished
for exercising a constitutional right in the
same manner and to the same extent: under
either instance, the person’s silence would
ultimately bear upon the determination of his
or her guilt, This result is in direct contra-
vention of this court’s precedents, See, e.g.,
State v. Wakisaka, 102 Hawai'i 504, 514-15,
78 P.8d 317, 327-28 (2008).

Finally, the dissent’s framework is not sup-
ported by Rodrigues. Rodrigues did not hold
that indirect use of silence as substantive
proof of guilt, a course of action authorized
under the dissent’s framework, is permissi-
ble. The information about the defendant's
silence in Rodrigues was not intended or
used to establish, directly or indirectly, the
defendant’s guilt or innocence. See State _v.
Rodrigues, 113 Hawai'i 41, 49-50, 147 P.3d
825, 833-34 (2006) (explaining that the chal-
lenged line of inquiry “was unaccompanied
by any implication of guilt” (emphasis add-
ed)). Thus, the dissent’s framework, which
would allow the indirect use of silence as a
tool to elicit evidence or inferences that bear
upon the defendant’s guilt (as the State did
in this case), is not consistent with Rodri-

gues,

4, The Error Was Not Harmless
Beyond a Reasonable Doubt

HR When an error amounts to a vio-
lation of the privilege against compelled self-
inerimination under article I, section 10, the
analysis proceeds to whether the error was

27, For purposes of the harmless error analysis, it
is assumed that the evidence regarding Tsujimu-
ra's performance of the FSTs was properly ad-
mitted, see supra note 6.

28, Tsujimura also asserts that there was insuffi-
cient evidence to establish that he was impaired
by “alcohol” because the State did not introduce
evidence that he consumed alcohol derived from
distillation. The statutory definition of “alcohol,”
as discussed supra Part IV.A, is not limited to
alcohal produced by distillation. Thus, the State
was not required to introduce evidence as to the
nature, origin, or the specific type of alcohol that
Tsujimura consumed, and Tsujimura’s conten-
tion that there was insufficient evidence to estab-
lish his consumption of alcohol produced by dis-
tillation is without merit,

Tsujimura additionally challenges the sufficien-
cy of the evidence in support of his conviction.

harmless beyond a reasonable doubt. See
State v. Mainaaupo, 117 Hawai'i 235, 247-48,
178 P.8d 1, 18-14 (2008). “In applying the
harmless beyond a reasonable doubt stan-
dard the court is required to examine the
record and determine whether there is a
reasonable possibility that the error com-
plained of might have contributed to the
conviction.” State v. Balisbisana, 83 Hawai‘
109, 114, 924 P,2d 1215, 1220 (1996) (quoting
State v. Holbron, 80 Hawai'i 27, 82, 904 P.2d
912, 917 (1995)). As discussed, the district
court rendered its verdict in partial reliance
upon Officer Billins’ testimony that Tsujimu-
va did not say anything about his injury
when he exited his car. The district court
also incorrectly assumed that it was proper
for the State to use Tsujimura’s prearrest
silence in order to imply that he was under
an obligation to say something at the time of
the stop and that Tsujimura’s prearrest si-
lence could be used as substantive proof of
guilt, In addition, looking at the evidentiary
record at trial—including evidence counter-
vailing a finding of intoxication—it cannot be
said that the error in admitting Officer Bil-
lins’ testimony regarding Tsujimura’s prear-
rest silence was harmless beyond a reason-
able doubt.” Id, Accordingly, Tsujimura’s
conviction must be vacated and the case re-
manded to the district court for a new trial.?3
See Tachibana v. State, 79 Hawai 226, 240,
900 P.2d 1298, 1807 (1995) (“Once a violation
of the constitutional right to testify is estab-
lished, the conviction must be vacated unless
the State can prove that the violation was
harmless beyond a reasonable doubt.”); State

Officer Billins testified regarding ‘Tsujimura’s
driving before he was stopped, delayed reaction
after he was asked to pull over, his physical
condition, and his actions while performing the
FSTs, Even assuming that the district court im-
properly admitted testimony regarding whether
‘Tsujimura passed or failed the FSTs, see supra
note 6, the adduced evidence, viewed “in the
light most favorable to the State,” constitutes
“substantial evidence to support the conclusion”
that Tsujimura’s mental faculties or ability to
care for himself and guard against casualty were
impaired, State v. Hirayasu, 71 Haw. 587, 589,
801 P.2d 25, 26 (1990) (quoting State v. Hernan-
dez, 61 Haw. 475, 477, 605 P.2d 75, 77 (1980).
Thus, Tsujimura's conviction was supported by
legally sufficient evidence.

y. Tabigne, 88 Hawai'i 296, 806-07, 966 P.2d
608, 618-19 (1998) (remanding the case for
retrial after finding not harmless the consti-
tutional error involved),

The dissent contends that, “even assuming
that the comment was an improper comment.
on Tsujimura’s silence, the comment was
harmless beyond a reasonable doubt.” Dis-
sent at 820, 400 P.8d at 521, The dissent.
reasons that “the district court did not neces-
sarily rely on Tsujimura’s silence in finding
that ‘[w]hen he alighted from the car, he did
not indicate any difficulty walking’ ” Dissent.
at 824, 400 P.3d at 525. According to the
dissent, the district court’s statement—that
Tsujimura did not indicate any difficulty
walking when he alighted from the car—
could have been based on Officer Billins’
observations, as gleaned from the officer’s
testimony and the district court’s direct
questions to the officer. Dissent at 324, 400
P.8d at 525.

We respectfully disagree with the dissent
because the district court’s statement, natu-
rally read, was a description of Tsujimura’s
failure to speak about any difficulty walking
as he was exiting his car and during his
interaction with Officer Billins, The sentence
immediately prior to the district court’s
statement was, “When Mr. Tsujimura was
asked to participate [by Officer Billins] in a
field sobriety test, Mr. Tsujimura did indi-
cate ... there was an injury to his left leg.”
Thus, the court’s use of “indicate” in all
likelihood pertained to Tsujimura’s oral re-
sponses or lack of responses to Officer Billins
during their interaction. In any event, the
alternative explanation that the dissent posits
for the district court’s statement does not
eliminate the reasonable possibility that the
district court relied on Officer Billins’ refer-
ence to Tsujimura’s prearrest silence and, as
such, the reasonable possibility that this er-
ror might have contributed to Tsujimura’s
conviction, Balisbisana, 88 Hawai'i at 114, 924
P.2d at 1220,

In asserting that the admission of Tsujim-
ura’s prearrest silence into evidence was
harmless, the dissent points to evidence oth-
er than Tsujimura’s prearrest silence that
supports the district court’s finding of guilt
Dissent at 324-25, 400 P.8d at 525-26. How-
ever, according to Officer Billins’ testimony,
Tsujimura’s vehicle was not changing lanes,

319

was not going over the speed limit, was not
slowing down or speeding up, did not follow
other vehicles too closely, and did not make
any inconsistent signals; it took Tsujimura
only eight seconds to pull over from the time
Officer Billins turned on his sirens and lights;
and out of the 24 NHTSA visual detection
dues, Tsujimura exhibited only one—trouble
maintaining lane position. Officer Billins’ tes-
timony also indicated that Tsujimura did not
repeat questions or comments, lean on his
vehicle, or provide incorrect information or
change his answers while being questioned;
ved, watery eyes could be caused by a num-
ber of factors other than aleohol impairment;
and odor of alcohol is a poor indicator of a
person’s level of impairment and has no bear-
ing on the amount and nature of the alcohol
that the person consumed, Accordingly, the
totality of the evidence against Tsujimura
was far from compelling or overwhelming as
to render harmless any error in admitting
the State’s comment on Tsujimura’s prear-
rest silence. See Mainaaupo, 117 Hawai'i at
255, 178 P.3d at 21 (coneluding that “the
evidence ... is not so overwhelming that we
are convinced that the [deputy prosecuting
attorney’]s intrusion into [the defendant’]s
right to remain silent may not have contrib-
uted to his conviction”),

Vv. CONCLUSION

Accordingly, we hold that the right to re-
main silent under article I, section 10 of the
Hawai‘i Constitution attaches at least at the
point at which a person has been seized,
Such evidence regarding a person’s exercise
of the right to remain silent may not be used
as substantive evidence of guilt. Relatedly,
the State may not elicit evidence of prearrest
silence to imply the defendant’s guilt or in-
troduce evidence whose character suggests
to the factfinder that the defendant’s prear-
rest silence is inferential evidence of the
defendant’s guilt, In this case, Tsujimura’s
prearrest silence while detained during an
investigatory stop was introduced into evi-
dence as substantive proof of Tsujimura’s
guilt, The admission of this evidence was not
harmless, Hence, the ICA Judgment on Ap-
peal and the district court’s judgment are

320

vacated, and the case is remanded to the
district court for a new trial.

CONCURRING AND DISSENTING
OPINION BY NAKAYAMA, J. IN WHICH
RECKTENWALD, ©.J., JOINS

I agree with the Majority to the extent
that it holds that: (1) “aleohol” within the
meaning of Hawai‘i Revised Statutes § 291E-
1 (2007 & Supp. 2012) is not limited to alco-
hol produced through distillation; (2) the
State was not required to include the statuto-
ry definition of “alcohol” in the complaint
against Tsujimura; (8) an individual's right to
remain silent under article I, section 10 of
the Hawai'i Constitution inures at least at
the point at which a person has been seized;
and (4) the State may not elicit evidence of a
defendant’s prearrest silence as substantive
evidence of the defendant’s guilt.

I part with the Majority in its application
of the last of the foregoing principles to the
present case, The State’s question concerning
whether Tsujimura told Officer Billins that
his leg injuries would have prevented him
from getting out of the car was not an im-
proper comment on Tsujimura’s right to re-
main silent. In my view, the State’s question
sought to elicit information with the purpose
of pointing out a shortcoming in the defen-
dant’s exculpatory evidence. The State’s
question neither implied that an innocent
person in Tsujimura’s position would not
have remained silent, nor insinuated that
Tsujimura’s silence, in and of itself, was sug-
gestive of his guilt. Furthermore, even as-
suming that the comment was an improper
comment on Tsujimura’s silence, the com-
ment was harmless beyond a reasonable
doubt.

Accordingly, I respectfully dissent.

A. The elicited statement did not consti-
tute an improper comment on Tsujim-
ura’s right to remain silent.

In State v. Padilla, this court established
that whether a prosecutor has impermissibly
commented on a defendant's failure to testify
is determined by “whether the language used
was ‘manifestly intended or was of such char-
acter that the jury would naturally and nec-
essarily take it to be a comment on the

failure of the accused to testify.’” 57 Haw.
150, 158, 552 P.2d 357, 362 (1976) (quoting
United States v. Wright, 309 F.2d 785, 738
(7th Cir. 1962)), abrogated on other grounds
by State v. Cabagbag, 127 Hawai'i 302, 277
P.8d 1027 (2012). The Majority states, and I
agree, that in State y, Rodrigues, 113 Hawaii
41, 147 P.8d 825 (2006), this court “adjusted
and particularized the Padilla framework to
make it more suitable for application in situa-
tions where the challenged ‘comment’ is
made during a question-and-answer ex-
change between a prosecutor and a witness.”
Majority Opinion at 315, 400 P.3d at 516.
Moreover, the Majority correctly observes
that “the core of the analysis is predicated
upon the prosecution’s purpose in eliciting
the contested evidence.” Majority Opinion at.
815, 400 P.8d at 516. Specifically, the test
requires courts to determine whether the
State intended “to imply the defendant's
guilt” when the State elicited the question
referencing the defendant’s silence, Majority
Opinion at 815, 400 P.8d at 516.

Applying the foregoing test to the present
case, the Majority states:

By eliciting the fact that Tsujimura did not

say anything about his injury while he

exited his car, it was clear that the State’s
purpose was to imply that Tsujimura’s in-
juries did not physically inhibit him from
performing the FSTs and to inferentially
establish that Tsujimura’s diminished fac-
ulties during the FSTs were a product of
intoxication and not influenced by his inju-
ries,
Majority Opinion at 316, 400 P.8d at 517.
Therefore, the Majority concludes that the
State “intended for the exchange between
the prosecutor and Officer Billins to adduce
information about Tsujimura’s prearrest si-
lence as substantive proof of his guilt.” Ma-
jority Opinion at 316, 400 P.3d at 517.

I believe that the Majority’s application of
the Rodrigues test is erroneous. In my view,
the Rodrigues analysis requires courts to
discern whether the State sought to imply a
defendant’s guilt by virtue of the very fact
that the defendant was silent. In other
words, the inquiry revolves around whether
the State elicited the information to suggest
that an innocent person in the defendant’s
position would have spoken up or reacted

differently, such that the defendant’s silence,
in and of itself, was indicative of his or her
guilt, This test does not preclude the State
from eliciting information that inferentially
leads to other facts that are completely sepa-
rate and distinct from the fact of the defen-
dant’s silence and, in doing so, identifying the
gaps in the defendant’s theory of the case or
other exculpatory evidence that the defen-
dant has adduced at trial.

This application of the Rodrigues test is
consistent with the analysis that the Rodri-
gues court itself utilized. In Rodrigues, this
court held that the State’s question seeking
to elicit information regarding the fact that
the defendant declined to agree to an audio-
taped reiteration of his interview with a po-
lice officer did not constitute an improper
comment on his right to remain silent. 113
Hawai'i at 50, 147 P.8d at 884. This court
reasoned:

In the present matter, the prosecution

merely elicited the fact, without further

comment, that, following a full, voluntary
explanation of how he came to possess the
welder and trailer, Rodrigues declined to
agree to an audiotaped reiteration of his
statement to Detective Kanemitsu. On the
record before us, it is apparent that the
question was posed, and the information
elicited, as part of the prosecution's effort
to maximize the reliability of Detective
Kanemitsu’s recollections and to explain
why the detective could only rely on his
notes and not an audiotape of the inter-
view, that is, because Rodrigues declined
to make such a tape. And the prosecutor's
question, part of a line of inquiry designed
to_establish_the detective’s custom and
practice regarding accurately transcribing
such_statements, was unaccompanied by
any implication of guilt with respect _to
Rodrigues’s unwillingness to be _audio-
taped.
Id. at 49-50, 147 P.8d at 883-34 (emphasis
added). In short, this court reasoned that the
elicited statement was not improper because
it did not imply that Rodrigues was guilty by
virtue of his unwillingness to be recorded, Id.
Rather than implying guilt through the de-
fendant’s silence itself, the question sought to
elicit information supportive of other facts

321

that were relevant to the case. Id. Namely,
the question sought to explain why Officer
Kanemitsu’s testimony was largely based off
of his notes, the reliability of which defense
counsel heavily criticized on cross-examina-
tion and during the defense’s closing argu-
ment. Id, at 46-47, 49-50, 147 P.3d at 830-31,
888-34, Therefore, the Rodrigues court’s
analysis reflects that the Rodrigues test re-
quires courts to evaluate whether the State
elicited evidence of the defendant’s silence as
direct evidence of the defendant's culpability,
or whether the State sought to legitimately
illustrate other relevant facts by virtue of the
defendant’s lack of verbal communication.

A proper application of the Rodrigues test
to the present case reveals that the State’s
question regarding whether Tsujimura had
said that his ability to exit the car was im-
pacted by his leg injuries did not constitute
an improper comment on his right to remain
silent. During Officer Billins’ direct examina-
tion, Officer Billins testified about his obser-
vations regarding Tsujimura’s actions as he
exited his vehicle:

Q And after you made those observa-

tions, did you ask the defendant if he was

willing to participate in a field sobriety
test?

A J informed him that I could smell an

odor of alcoholic type beverage emitting

from his breath and requested that he
participate in a field sobriety test.

Q And what was the defendant’s re-

sponse?

A He immediately got out of his vehicle.

Q Were you able to make any observa-
tions about the defendant’s ability to get
out of his vehicle?
A At this time he—he got out of his
vehicle normally. I didn’t see him fall down
or anything.
The district court then asked Officer Billins
about whether Tsujimura fell down as he
exited the vehicle:
THE COURT: [Deputy prosecuting at-
torney], I’m sorry to interrupt you. Can
you go back to the question that [deputy
prosecuting attorney] asked about the de-
fendant coming out of his car? Officer Bil-

322 Dn

lins, I think you testified that you didn’t

see the defendant fall down,

THE WITNESS: Yes.

THE COURT: Just so we're clear, did he

fall?

THE WITNESS: No. He did not fall—

THE COURT: He was able to come out

of the car without a problem?

THE WITNESS: Yes.

THE COURT: Thank you,
On cross-examination, defense counsel ques-
tioned Officer Billins extensively about
whether Tsujimura’s injuries may have im-
pacted his performance on the field sobriety
test. Notably, defense counsel elicited two
concessions from Officer Billins: that Officer
Billins had “no idea whether raising a leg
puts more physical strain on your ACL than
keeping it planted” and that he had “no idea
whether [Tsujimura’s] knee injury or ACL
injury affected his ability to perform the field
sobriety test[.]” Then, finally, on redirect ex-
amination, the State again asked Officer Bil-
lins about his observations concerning Tsu-
jimura’s ability to exit the vehicle despite
having injuries to his leg:

Q Officer, when you demonstrated the

test—actually [ll back up for a moment.

You testified that when the defendant left

the car he didn’t have any difficulty exiting

the car,

A Yes,

Q So did the defendant at that time ex-

plain to you he couldn’t get out of the car

that Tsujimura did not physically demon-
strate any signs of difficulty exiting his car,
Officer Billins also observed that Tsujimura
did not verbally indicate that he had any
trouble alighting from his vehicle just prior
to taking the field sobriety test. Based on the
record, it appears that the State did not elicit
this information to insinuate that Tsujimura
was guilty simply because he had remained
silent about his injuries; the question did not
imply that an innocent person in Tsujimura’s
position would have spoken up about his leg
injuries. Instead, it appears that the State’s
purpose in posing the question was to legiti-
mately prove a fact that subverted the de-
fense’s exculpatory evidence: the State
sought to prove that Tsujimura did not dem-
onstrate any signs of discomfort or difficulty
in exiting his vehicle, which undermined the
defense’s evidence tending to support that
Tsujimura’s leg injuries may have impacted
his performance on the field sobriety test,

The Majority takes issue with the forego-
ing application of the Rodrigues test because,
in its view, “direct and indirect use of a
defendant’s silence has the same ultimate
effect: it serves as a mechanism for the State
to imply the defendant’s guilt. The only dif-
ference between the two is the level of bla-
tancy.” Majority Opinion at 317, 400 P.8d at
518. Accordingly, the Majority posits:
“Whether silence is used directly or indirect-
ly, the person against whom the silence is
used would be punished for exercising a con-
stitutional right in the same manner and to
the same extent: under either instance, the

because of an ACL injury?

[DEFENSE COUNSEL]: Objection,
Your Honor. It comments on defendant’s
right to remain silent,

THE COURT: It’s overruled. Let’s see if
the statement comes out, Go ahead and
answer the question,

BY [THE STATE]:

Q Do you recall if the defendant indicat-
ed to you he would have difficulty exiting
the car because of his previous leg injury?
A No statements were made.
(Emphases added.)
Viewed properly in context, the State’s
question elicited, without further comment,
the fact that just as Officer Billins observed

person’s silence would ultimately bear upon
the determination of his or her guilt.” Major-
ity Opinion at 318, 400 P.8d at 519 (emphasis
added).

I disagree insofar as I do not believe that
using a defendant’s silence to support a col-
lateral fact that is ancillary, though relevant,
to the defendant's guilt punishes a defendant
for exercising his or her right to remain
silent “in the same manner and to the same
extent” as using the defendant's silence to
directly imply his or her guilt. In the latter
situation, the State intends for the jury to
directly infer from the defendant's silence—a
fact that has no bearing on whether the
elements of the offense were met—that the
defendant is guilty. In such a circumstance,

the State comments on the very fact that the
defendant remained silent and undoubtedly,
and severely, punishes the defendant for ex-
ercising his or her constitutional right to
remain silent by directing the fact finder to
focus on the defendant’s silence itself and
whether the defendant was culpable because
silence was incompatible with innocence. See,
e.g, State v, Wakisaka, 102 Hawai‘ 504, 515-
16, 78 P.8d 817, 828-29 (2008); State v. Mai-
naaupo, 117 Hawai'i 285, 258-54, 178 P.8d 1,
19-20 (2008).

By contrast, when a defendant’s lack of
verbal communication is used to illustrate an
ancillary fact that is separate and distinct
from the defendant's guilt, but may nonethe-
less be probative of the strength of the de-
fendant’s theory of the case, several inferen-
tial steps separate the defendant’s silence
from the ultimate conclusion that he or she is
guilty. Further, the prosecutor’s comment
does not direct the fact finder to fixate on the
defendant's silence itself, but on a collateral
fact such as the defendant’s physical state (as
was the case here) or state of mind. Accord-
ingly, in my view, when the State elicits the
fact of the defendant's lack of verbal commu-
nication in this context, where an attenuated
analytical relationship exists between a de-
fendant’s silence and guilt, such comment
does not “punish [the defendant] ... in the
same manner and to the same extent” as
using his or her silence as direct evidence of
guilt,

The Majority also contends that my appli-
cation of the Rodrigues test in this case is “in
direct contravention of this court’s prece-
dents” and “is not supported by Rodrigues.”
Majority Opinion at 318, 400 P.8 at 519.
Again, I respectfully disagree.

For the most part, this court has held that
a prosecutor improperly commented on a
defendant’s refusal to testify in cireum-
stances where the prosecutor drew a direct
connection between the defendant’s silence
and his or her guilt. See, e.g., Wakisaka, 102
Hawai'i at 515-16, 78 P.8d at 328-29 (conclud-
ing that a prosecutor’s remark improperly
commented on the defendant’s failure to tes-
tify because it reminded the jury that the
defendant did not testify and implied that the
defendant was withholding information from

323

the jury); Mainaaupo, 117 Hawai'i at 252-55,
178 P.8d at 18-21 (holding that a prosecutor’s
comment during closing argument that an
innocent person would not have failed to
disclose certain facts improperly commented
on the defendant’s right to testify), This
court has not indicated that a prosecutor is
prohibited from eliciting information regard-
ing the defendant's silence when the defen-
dant’s lack of verbal communication could
support a collateral fact other than the defen-
dant’s guilt itself,

Additionally, I believe that my analytical
framework is consistent with Rodrigues. In
support of its conclusion that the prosecutor
did not improperly comment on the defen-
dant’s failure to testify, this court observed
that “the prosecutor’s question, part of a line
of inquiry designed to establish the detec-
tive’s custom and practice regarding accu-
rately transcribing such statements, was un-
accompanied by any implication of guilt with
respect_to_Rodrigues’s unwillingness to_be
audiotaped,” Rodrigues, 118 Hawai'i at 49-50,
147 P.8d at 833-84 (emphasis added), In my
view, a plain reading of this language indi-
cates that, consistent with this court’s prece-
dent and my application of the Rodrigues
test, the Rodrigues court concluded that the
comment was permissible because the com-
ment did not directly imply the defendant’s
guilt from his unwillingness to be recorded.
The Rodrigues court did not suggest that
commenting on the defendant’s silence to
support a collateral fact, separate from
though possibly relevant to the defendant's
guilt, was impermissible.

To conclude, the State’s question sought to
prove that Tsujimura did not have any diffi-
culty exiting his vehicle; Tsujimura neither
fell out of his vehicle, nor did he verbally
express any difficulty in alighting from his
ear. Without further comment, the State did
not suggest that an innocent person in Tsu-
jimura’s position would not have remained
silent, such that Tsujimura’s silence, by itself,
demonstrated that he was guilty. According-
ly, the State did not use Tsujimura’s silence
as direct substantive evidence of guilt. Rath-
er, the State inquired into Tsujimura’s verbal
omission to support a legitimate fact that was
distinct from the fact of Tsujimura’s silence,

324

and thereby challenged the defendant’s ex-
culpatory evidence. Therefore, I believe that
the State’s question was not an improper
comment on Tsujimura’s right to remain si-
lent.

B. Assuming that the elicited statement
improperly commented on Tsujimu-
ra’s right to remain silent, such com-
ment was harmless beyond a reason-
able doubt.

Even assuming that the prosecutor im-
properly commented on Tsujimura’s right to
remain silent, the question remains whether
the comment was harmless beyond a reason-
able doubt. See Mainaaupo, 117 Hawai‘i at
247, 178 P.8d at 13, The harmless beyond a
reasonable doubt standard “requires an ex-
amination of the record and a determination
of whether there is a reasonable possibility
that the error complained of might have con-
tributed to the conviction.” Id. (quoting State
vy. Tuli, 101 Hawai 196, 204, 65 P.8d 148, 151
(2008),

The Majority states that the State’s ques-
tion was not harmless beyond a reasonable
doubt because “the district court rendered its
verdict in partial reliance upon Officer Bil-
lins’ testimony that Tsujimura did not say
anything about his injury when he exited his
car.” Majority Opinion at 318, 400 P.38d at
519, In particular, the Majority emphasizes
that as the district court rendered its verdict,
the district court acknowledged that “[wJhen
Mr. Tsujimura was asked to participate in a
field sobriety test, Mr. Tsujimura did indi-
cate that there was—that there was an inju-
ry to his left leg. When he alighted from the
cay, he did not indicate any difficulty walking
when he did come out of the car.” Majority
Opinion at 317, 400 P.8d at 518 (emphasis
added).

The Majority’s position is problematic be-
cause the district court did not necessarily
rely on Tsujimura’s silence in finding that
“(when he alighted from the car, he did not
indicate any difficulty walking.” As discussed
in section A, supra, on direct examination,
Officer Billins testified that Tsujimura did
not fall down as he exited his vehicle. Fur-

1, Indicate, Webster_Dictionary, http://www.
webster-dictionary.org/definition/indicate (last

thermore, the district court also directly
questioned Officer Billins about whether he
had observed Tsujimura fall out of the car or
otherwise experience any other difficulty in
exiting the car. And, on redirect examination,
Officer Billins reasserted that Tsujimura did
not have any difficulty in exiting the car.
Therefore, the district court’s finding that
“tw]hen he alighted from the car, he did not
indicate any difficulty walking” did not rest
solely upon the State’s comment on Tsujimu-
ras right to remain silent. The district
court’s finding was amply supported by other
portions of Officer Billins’ testimony.

The Majority also contends that the dis-
trict court likely relied on Officer Billins’
reference to Tsujimura’s prearrest silence
because “the district court’s statement, natu-
rally read, was a description of Tsujimura’s
failure to speak about any difficulty walking
as he was exiting his car and during his
interaction with Officer Billins.” Majority
Opinion at 319, 400 P.8d at 420, According to
the Majority, because the district court pre-
viously used the word “indicate” to refer to
Tsujimura’s verbal communication in a prior
finding of fact, the district court's “use of
‘indicate’ [in its finding regarding Tsujimu-
ra’s difficulty walking after he alighted from
the car] in all likelihood pertained to Tsujim-
ura’s oral responses or lack of responses to
Officer Billins during their interaction.” Ma-
jority Opinion at 319, 400 P.3d at 520.

The Majority’s analysis on this point is
unpersuasive. The word “indicate” is defined
broadly: “To point out; to discover; to direct
to a Imowledge of; to show; to make
known.” ! That the district court may have
used the word “indicate” to refer to Tsujim-
ura’s verbal communication in one of its
findings of fact does not mean that the dis-
trict court used this general term in the
same manner in another finding. Consider-
ing that the district court sua sponte ques-
tioned Officer Billins specifically as to
whether Tsujimura fell as he was exiting his
vehicle immediately after Officer Billins tes-
tified to Tsujimura’s actions as he alighted
from his car, I do not believe that the dis-

visited April 20, 2017).

trict court relied upon the State’s fleeting
question regarding Tsujimura’s lack of ver-
bal communication to support its finding
that: “When he alighted from the car, he did
not indicate any difficulty walking when he
did come out of the car.”

Furthermore, in viewing the record as a
whole, it appears that the State’s question
regarding Tsujimura’s silence about his leg
injuries was harmless beyond a reasonable
doubt. The district court based its guilty
verdict upon the following findings: (1) Offi-
cer Billins, more than once, observed Tsujim-
‘ura’s car enter the shoulder lane to the point
that Tsujimura’s vehicle straddled two lanes;
(2) approximately eight seconds passed in
between the time Officer Billins turned on
his lights to signal Tsujimura to stop and the
time that Tsujimura actually stopped his ve-
hicle; (8) upon approaching the vehicle, Offi-
cer Billins observed that Tsujimura’s face
was flushed red, that his speech was slurred,
that he had red and watery eyes, and that he
had alcohol on his breath; (4) Tsujimura par-
ticipated in a field sobriety test; (5) Tsujimu-
ra had an injury to his left leg; (6) Tsujimura
did not demonstrate any difficulty alighting
from his car or walking after exiting the car;
(1) Tsujimura had difficulty balancing as Offi-
cer Billins administered the “eye test” com-
ponent of the field sobriety test; (8) Tsujimu-
ra broke his stance twice and had difficulty
keeping his balance with one foot in front of
the other while attempting to complete the
walk-and-turn test; and (9) during the one-
legged raise test, Tsujimura was unable to
keep his hands up to his side, and was also
unable to keep the foot that he selected to
raise off the ground six inches in the air.

In short, the State only asked one question
concerning Tsujimura’s silence about his
ACL injury and the impact it might have had
on his ability to exit the vehicle. The State
did not follow-up on the question after it was
asked. The contested question elicited infor-
mation which may have supported one of the
district court’s findings of fact: that Tsujimu-
ra did not have difficulty alighting from his
vehicle or walking shortly thereafter. Howev-
er, this fact was also sufficiently supported
by other evidence adduced at trial. Moreover,
the district court’s final ruling rested on sev-

325

eral other facts that tended to support that
Tsujimura had been operating his vehicle
under the influence of an intoxicant with such
diminished mental faculties that he was in-
capable of guarding against casualty, all of
which were amply grounded in other evi-
dence at trial besides the fleeting question
regarding Tsujimura’s silence about his leg
injuries. Therefore, in my view, even if the
contested question by the State constituted
an improper comment on Tsujimura’s right
to remain silent, the comment was harmless
beyond a reasonable doubt.

Accordingly, I would affirm Tsujimura’s
conviction and sentence.

400 P.3d 526

Laura GABRIEL, Plaintiff/Appellant-
Cross-Appellee,

ve

ISLAND PACIFIC ACADEMY, INC., a do-
mestic nonprofit corporation; John Does
1-10; Jane Does 1-10; Doe Corporations
1-10; Doe Partnerships 1-10; Doe Unin-
eorporated Organizations 1-10; and Doe
Governmental Agencies 1-10, Defen-
dants/Appellees-Cross-Appellants.

SCAP-15-0000912

Supreme Court of Hawai‘.
JUNE 18, 2017

oO
dS
@

Joseph T. Rosenbaum, Honolulu, for plain-
tiff/appellant-cross-appellee.

Jeffrey S. Harris, Honolulu, for defen-
dant/appellee-cross-appellant,

RECKTENWALD, C.J., NAKAYAMA,
McKENNA, POLLACK, AND WILSON,
Jd.

OPINION OF THE COURT BY
McKENNA, J.
I. Introduction

At issue in this case is whether it is uncon-
scionable to require an employee to pay half
the estimated arbitration costs up front in
order to access the arbitral foram. We hold
that, under the circumstances of this case,
such a requirement is unconscionable and
unenforceable. We further hold that, in this
case, striking this requirement in the arbitra-
tion provision provides an insufficient reme-
dy; rather, the entire arbitration provision
must be invalidated.

IL Background

A. Facts

Laura Gabriel (“Gabriel”) taught physical
education at Island Pacifie Academy (“IPA”)
from 2006 through 2014. Gabriel and IPA
contracted for her employment annually, In
December 2013, one of her 8th grade male
students dropped his water bottle, and water
hit Gabriel. She remarked, “Why are you
guys always getting me wet?” which prompt-

ed three of her male students to snicker that
the boys in the class were always getting
Gabriel wet. Gabriel surmised that she was
the butt of a sexual joke and reported the
incident as sexual harassment to IPA admin-
istration. The Secondary Principal, Kip Cum-
mings, told Gabriel that she would no longer
be teaching the class containing those male
students. Ms. Cummings also expressed her
concern over parent complaints about Ga-
briel’s class. Ms. Cummings said she could
not trust Gabriel and would not support her
when parents complain.

Three months after this incident, in March
2014, IPA issued Gabriel an employment
agreement for the 2014-2015 school year and
requested her signature on it by April 2014,
The employment agreement contained the
following arbitration provision:

L. Arbitration, The parties desire that any

dispute concerning the Agreement be han-

dled out of court. Accordingly, they agree
that any such dispute shall, as the parties’
sole and exclusive remedy, be submitted to
an arbitrator licensed to practice law in the

State of Hawaii and selected in accordance

with the standard procedures of Dispute

Prevention Hawaii [sic]. The arbitrator will

not be entitled to add to or subtract from

its terms. Should either party start any
legal action or administrative proceeding
against the other with respect to any claim
related to this Agreement, or pursue any
method of resolution of a dispute other
than mutual agreement of the parties or
arbitration, then all damages, costs, ex-
penses and attorneys’ fees incurred by the
other party as a result shall be the respon-
sibility of the one bringing the suit or
starting the proceeding.
The employment agreement also provided
that “(t]he parties agree that this contract
shall be interpreted in accordance with the
Jaws of the state of Hawaii....” Gabriel
timely signed and submitted the employment
1. The 2013-2014 employment agreement be-

tween Gabriel and IPA contained an identical
agreement to arbitrate.

2, The Honorable Karen T. Nakasone presided.

3, Subsection H(e) of the employment agreement
is titled “Termination Due to Business Condi-

329

contract, Gabriel alleged that the Headmas-
ter informed her that her employment con-
tract was not going to be honored because
Ms. Cummings did not want to work with
her. Gabriel’s last day with IPA was in June
2014,

In October 2014, Gabriel filed her charge
of discrimination with the Hawaii Civil
Rights Commission (“HCRC”), to be filed
with the United States Equal Employment
Opportunity Commission, alleging retaliation.
The HCRC issued Gabriel a right to sue
letter in February 2015.

B. Gabriel’s First Amended Complaint

In May 2015, Gabriel filed her First
Amended Complaint with the Cireuit Court
of the First Circuit.? She alleged that IPA
refused to hire her for the 2014-2015 school
year in retaliation for her sexual harassment.
complaint, in violation of HRS § 378-2(2)
(2015), and that IPA’s actions resulted in
intentional infliction of emotional distress
(IIED”). She sought back pay, front pay,
and all employee benefits that she would
have enjoyed, as well as general and punitive
damages for ITED.

C, IPA’s Motion to Compel Arbitration

IPA filed a Motion to Compel Arbitration.
IPA, through counsel, averred that Gabriel
was terminated due to a reduction in force
because of insufficient enrollment, not due to
discriminatory retaliation, IPA pointed out
that subsection H(e)® of the employment
agreement provided for termination due to
business conditions. Should the employee be
terminated for that reason, IPA noted that.
subsection H of the employment agreement
provided for the continuation of the arbitra-
tion obligation, IPA asked the circuit court to
stay the proceedings pending arbitration,
IPA also sought an award of its attorney's
fees and costs for bringing the motion to
compel arbitration, pursuant to the employ-

tions.” It states, “As necessary as determined by
the school due to business conditions, including,
but not limited to, insufficient enrollment, unsuit-
ability of facilities, change in curriculum, or
elimination of position, all is determined in the
School's sole discretion,”

330

ment agreement’s arbitration provision, IPA
also contended that an award of attorney's
fees and costs could also be made pursuant
to the circuit court’s inherent power, arguing
that any opposition to IPA’s motion would be
frivolous.

Gabriel opposed IPA’s motion to compel
arbitration, She argued that she and IPA had
not entered into the 2014-2015 employment
agreement (IPA had not signed the agree-
ment) and no consideration was given under
the agreement; therefore, IPA was foreclos-
ed from attempting to enforce the agree-
ment’s arbitration provision. Assuming there
was a valid agreement to arbitrate, Gabriel
argued that her civil rights claim was beyond
its scope, Furthermore, she argued, the arbi-
tration agreement was unenforceable be-
cause it was included in an employment
agreement that constituted a contract of
adhesion, offered to Gabriel on a “take-it-or-
leave-it” basis. Gabriel also argued that the
arbitration provision was unconscionable be-
cause it required her to pay for the arbitra-
tion costs in a civil rights matter. Lastly,
Gabriel opposed IPA’s request for attorney's
fees and costs under the arbitration provi-
sion, arguing that the provision was unen-
foreeable. Gabriel also opposed an award of
fees and costs under the circuit court’s inher-
ent power, arguing that her opposition to the
motion to compel arbitration was not frivo-
lous.

The circuit court held a hearing on IPA’s
motion to compel arbitration. Although the
arbitration provision states that the parties
shall submit disputes concerning the employ-
ment agreement “to an arbitrator licensed to
practice law in the State of Hawaii and se-
lected in accordance with the standard proce-
dures of Dispute Prevention Hawaii [sic]”
(emphasis added), the parties and the court
assumed that Dispute Prevention and Reso-
lution, Ine. (“DPR”) would be the arbitral
body. The circuit court directed the parties
to enter DPR’s standard procedures into the
record, The circuit court also asked the par-
ties to submit supplemental briefing address-
ing whether the arbitration provision was
4, Elsewhere in the record, there is evidence that

IPA paid Gabriel $35,000 the first year she

taught (2006-2007); $36,400 the following year

a ccaaaaaaacscscl,

unconscionable because DPR’s standard pro-
cedures required the parties to split arbitra-
tion fees,

D. Supplemental Briefing

DPR’s standard procedures were entered
into the record. In her supplemental brief,
Gabriel quoted the following material from
DPR’s rules to show that she would have to
pay for half of the cost of arbitration, and
would be required to pay and submit half of
the deposit for the fees of the arbitrator
prior to the arbitration:

I, DPR FEES & COSTS

Any _out-of-pocket_expenses_ incurred by
the DPR appointed neutral (e.g., air fare,
lodging, meals) in conjunction with a DPR.
proceeding are to be borne equally by the
parties and shall be paid to the appointed
neutral from funds deposited by the par-
ties with DPR for that purpose.

I. ADVANCE DEPOSITS & RE-
FUNDS

DPR policy requires that each party
submit advance deposits toward the antici-
pated fees and expenses of the DPR ap-
pointed neutral on an equal or pro rata
basis. DPR may require the parties to
submit additional deposits during the pen-
dency of the arbitration proceeding based
on the expected duration of the matter.
DPR and the DPR appointed neutral re-
serve the right to suspend their services
for non-payment by any party. In the
event of inadequate or non-payment of re-
quested deposits by a party, DPR may
request that the other party(s) involved in
the proceeding submit additional deposits
to assure that an adequate sum is available

to compensate the DPR neutral,

Gabriel’s supplemental brief was accompa-
nied by a declaration in which she averred
that she was without a full-time job, having
financial difficulty, and unable to pay for the
costs of arbitration. Gabriel also cited out-of-

(2007-2008); and would have paid Gabriel
$45,000 for the 2014-2015 school year.

jurisdiction cases for the proposition that
courts have found arbitration agreements un-
conscionable where the putative grievant is
made to pay for arbitration costs in a civil
rights matter.

In its supplemental brief, IPA first argued
that the arbitration agreement did not re-
quire cost-splitting and was, in fact, silent on
the issue of fees and costs; all the arbitration
agreement required was selection of a neu-
tral arbitrator “in accordance with the stan-
dard procedures of Dispute Prevention Ha-
waii [sic].” IPA pointed out that the final
payment of fees and costs is determined by
the arbitrator according to HRS § 658A-
21(d) (2016). Consequently, IPA argued, Ga-
briel’s claim that she will incur costs in arbi-
tration that will prevent her from vindicating
her rights is “completely speculative” and an
insufficient basis for refusing to compel arbi-
tration under Green Tree Fin, Corp.-Ala-
bama v. Randolph, 581 U.S. 79, 121 S.Ct. 518,
148 L,Ed.2d 878 (2000),

IPA then argued that, if the circuit court
was persuaded that the cost of arbitration
would be prohibitively expensive for Gabriel,
it should sever any arguably unconscionable
provision or interpret the parties’ agreement
to require arbitration under conditions that
the Court believes are necessary to allow
Gabriel the ability to vindicate her rights.
IPA considered the possibility that Gabriel
might have to pay half of the arbitration
deposit to be the only arguably unconsciona-
ble aspect of the agreement. The 2014-2015
employment agreement did contain a sever-
ability clause that states, “Should any provi-
sion of this contract be invalidated by a court
of law with proper jurisdiction, the remaining
provisions shall remain in full force and ef-
fect.”

E, The Parties’ Arbitration Cost Esti-
mates
The circuit court then ordered the parties
to submit an estimate of arbitration costs
from DPR for this case. Gabriel’s counsel
estimated that it would take three and one
half days to put on Gabriel’s case, and IPA’s

5. HRS § 658A-21(d) states, “An arbitrator's ex-
penses and fees, together with other expenses,

331

counsel estimated that it would take half a
day to put on its case. At Gabriel’s counsel’s
request, DPR Case Manager Kelly Bryant
estimated that it would cost $20,418.84 for a
four-day arbitration. Bryant informed Ga-
briel’s counsel that each party would need to
remit a $10,200.00 deposit to DPR. After
previously telling Gabriel’s counsel that the
defense portion of the arbitration would take
half a day, IPA’s counsel estimated that the
entire arbitration would take half a day. At
IPA’s counsel’s request, Bryant estimated
that the total cost would be $2,748.69 and
that she would ask each party for a deposit.
of $1,375.00.

F. The Circuit Court’s Order Granting
IPA’s Motion to Compel Arbitration

The circuit court granted IPA’s motion to
compel arbitration, on the condition that IPA
pay all of the arbitrator’s fees in connection
with the resolution of Gabriel’s claims. The
cireuit court first concluded that the parties
entered into a valid employment contract
when Gabriel returned the signed 2014-2015
employment Agreement. The circuit court
concluded that IPA terminated the 2014-2015
employment Agreement according to its
terms, for business reasons. The cireuit court
concluded that the arbitration agreement was
broad enough to encompass Gabriel’s claim
that IPA refused to renew her employment
for the 2014-2015 academic year due to dis-
criminatory retaliation against her. The cir-
cuit court found that the arbitration agree-
ment was supported by consideration, as
both parties mutually agreed to arbitrate and
forgo the right to litigate in court. Hven
though Gabriel was not hired for the 2014-
2015 school year, the cireuit court found that
she was bound by the 2014-2015 employment
agreement’s terms, analogizing Gabriel’s case
to failure-to-hire cases. The circuit court also
concluded that the absence of an IPA agent’s
signature on the 2014-2015 employment
agreement was not a basis for avoiding arbi-
tration, where the agreement manifests the
employer's intent to be bound by the arbitra-
tion provision.

shall be paid as provided in the award.”

332

The cireuit court, however, concluded that
the arbitration agreement was unconsciona-
ble as applied, because it effectively requires
Gabriel to pay for arbitration costs to adjudi-
cate her statutory civil rights claim in an
arbitral forum, and that she would not have
to bear such costs by bringing her action in a
judicial forum. The circuit court concluded
that the arbitration clause was procedurally
unconscionable as a contract of adhesion be-
cause it was the result of coercive bargaining
between parties of unequal bargaining
strength. The circuit court reasoned that the
employment agreement was drafted and
proffered by IPA, the stronger of the con-
tracting parties; the employment agreement.
was offered to Gabriel on a take-it-or-leave-it,
basis; Gabriel was given only a few weeks to
review and sign the 2014-2015 employment
agreement, which contained the arbitration
provision; the employment agreement re-
quired Gabriel to certify that she sought
employment only with IPA; and Gabriel was
given no opportunity to modify the terms of
the employment agreement. The circuit court
also concluded that the arbitration clause was
substantively unconscionable because it un-
fairly limits the obligations of and unfairly
advantages IPA, the stronger party, by com-
pelling Gabriel, the weaker party, to split the
arbitration costs. The cireuit court supported
its conclusion with a citation to Cole v. Burns
Int'l Sec. Servs., 105 F.8d 1465 (D.C. Cir.
1997),

Although the circuit court noted that the
arbitration agreement did not contain an ex-
press provision regarding payment or shar-
ing of arbitration fees and costs, it noted that
the arbitration agreement required the par-
ties to arbitrate through DPR. The circuit
court deemed Gabriel’s $20,418.84 arbitration
estimate to be reasonable, and noted that
Gabriel would have to pay roughly half of
this amount as a deposit. The cireuit court
found it unconscionable that Gabriel would
have to pay a $10,200.00 deposit to even
access the arbitral forum; it concluded that
enforcing such a payment would preclude
Gabriel from vindicating her statutory rights
in the arbitral forum. The circuit court noted
that Gabriel would have to pay a filing fee of
only $515.00 to have her case heard in circuit

court, making the $10,200.00 arbitration cost
prohibitive and exorbitant.

Nevertheless, the circuit court concluded
that the arbitration clause could still be en-
forced by requiring IPA to pay for all arbi-
tration fees and costs to resolve Gabriel's
claims, as the Cole court had done.

Lastly, the cireuit court denied IPA’s re-
quest for an award of fees and costs in
connection with its motion to compel arbitra-
tion,

G. Gabriel’s Appeal and IPA’s Cross-Ap-
peal
Gabriel timely appealed from the order
granting IPA’s motion to compel arbitration,
Gabriel raises the following points of error on
appeal;
1, The Circuit Court, through its Order,
erred in concluding that as a matter of law
that Plaintiffs claims against Defendant
are subject to, and require, mandatory ar-
bitration pursuant to the non-honored Em-
ployment Agreement and the applicable
Hawai'i law.

2. The Circuit Court, through its Order,
after finding the Arbitration Clause ...
was unconscionable, erred in ordering an
erroneous modification of the Arbitration
Clause of the Employment Agreement.

IPA cross-appealed from the order. IPA rais-
es the following points of error on appeal:

1. The Circuit Court erred in holding the
arbitration agreement is substantively un-
conscionable, and therefore ordering IPA
to pay for all fees and costs of arbitration,
because “[t]he arbitration clause in the in-
stant case would make Plaintiff pay for
half the cost of the DPR arbitration. Arbi-
tration would prohibitively and exorbitant-
ly cost Plaintiff $10,200.00.”

2. The Circuit Court erred in denying
IPA fees and costs for the necessity of
bringing its motion to compel.
This court accepted transfer of this appeal
from the ICA.

IL. Standard of Review

HH “A petition to compel arbitration is
reviewed de novo.” Siopes v. Kaiser Found.
Health Plan, Inc,, 180 Hawai'i 487, 446, 812
P.8d 869, 878 (2018). “The standard is the
same as that which would be applicable to a
motion for summary judgment, and the trial
court’s decision is reviewed ‘using the same
standard employed by the trial court and
based upon the same evidentiary materials as
were before [it] in determination of the mo-
tion” ” Brown v. KFC ‘Nat'l Mgmt, Co., 82
Hawai'i 226, 281, 921 P.2d 146, 151 (1996)
(brackets in original; citations omitted).

Iv.

A. This court has jurisdiction over this
appeal.

I Before this appeal was transferred to
this court from the ICA, IPA moved to dis-
miss Gabriel’s appeal for lack of appellate
jurisdiction. IPA argued that federal sub-
stantive law of arbitrability precludes an ap-
peal from an order compelling arbitration.
The ICA issued an order denying IPA’s mo-
tion, as well as an order denying IPA’s mo-
tion for reconsideration of that order. In its
Answering Brief to Gabriel’s Opening Brief,
however, IPA persists in arguing that appel-
late jurisdiction is lacking because the Feder-
al Arbitration Act, or “FAA,” applies to the
parties’ agreement to arbitrate and preempts
Hawaii’s procedural rule permitting appeal of
an order compelling arbitration and staying
judicial proceedings. We disagree.

It is true that the FAA states that “an
appeal may not be taken from an interlocu-
tory order ... compelling arbitration under
section 206 of [the FAA].” 9 U.S.C. § 16(b)(8)
(West, Westlaw through P.L. 114-827 (also
including P.L. 114-829 and 115-1 to 115-8.
Title 26 current through 115-18)), According
to the United States Court of Appeals for the
Ninth Circuit, it is now “well established that.
§ 16(b) bars appeals of interlocutory orders
compelling arbitration and staying judicial
proceedings.” Johnson v. Consumerinfo.com,
Inc. 745 F.3d 1019, 1021 (9th Cir, 2014). In
the case before us, the circuit court com-
pelled arbitration and stayed the judicial pro-
ceedings pending arbitration. Had this order

Discussion

333

been issued by a federal district court, it is
clear that it would not be appealable. See,
@.g., MediVas, LLC v. Marubeni Corp., 741
F.8d 4, 7 (Oth Cir. 2014) (“{Aln order compel-
ling arbitration may be appealed if the dis-
trict court dismisses all the underlying
claims, but may not be appealed if the court
stays the action pending arbitration.”) (cita-
tions omitted).

HM This order, however, was issued in
our state circuit court. Under Hawai'i law, a
circuit court order compelling arbitration and
staying proceedings is an appealable final
order over which our appellate courts have
jurisdiction. See Association of Owners _of
Kukui Plaza v. Swinerton & Walberg Co., 68
Haw. 98, 107, 705 P.2d 28, 35 (1985) (holding
that “orders granting stays and compelling
arbitration are appealable” under HRS
§ 641-1(a)); County of Hawai'i v. UNIDEV,
LLC, 129 Hawai'i 378, 392, 301 P.8d 588, 602
(2018) (“[A]fter Hawaii’s adoption of HRS
§ 658A-28, orders compelling arbitration re-
main appealable under Hawaii’s final judg-
ment statute, HRS § 641-1.”)) (citation omit-
ted).

IPA argues that the Hawai‘ rule allowing
appeals of orders staying proceedings and
compelling arbitration is preempted because
it conflicts with the FAA rules regarding
appeals. IPA asserts that by delaying arbi-
tration proceedings, the Hawai‘i rule contra-
dicts and obstructs the overarching purpose
of the FAA to ensure the enforcement of
arbitration agreements according to their
terms so as to facilitate streamlined proceed-
ings,

Alternatively, while IPA acknowledges
that the parties’ employment agreement con-
tains a choice-of-law provision calling for the
application of Hawai‘ law, IPA argues that
the parties have not agreed to apply Hawaii’s
procedural rule simply by having a choice of
law provision that selects Hawaii law. We
disagree and conclude that the FAA does not
preempt Hawaii’s procedural rule, and apply-
ing Hawaii’s procedural rule will be consis-
tent with the parties’ expectations under the
arbitration agreement.

HMMM The FAA does not automatically
preempt “different rules than those set forth

334

in the Act itself.” Volt Info, Scis Inc. v.
Board of Trs. of the Leland Stanford Junior

appealable under state procedural rules. See,
eg. Kremer y. Rural Cmty, Ins, Co., 280

Univ., 489 U.S, 468, 479, 109 S.Ct, 1248, 103
L,Ed.2d 488 (1989), The FAA’s purpose is
“simply [to] require[ ] courts to enforce pri-
vately negotiated agreements to arbitrate,
like other contracts, in accordance with their
terms.” 489 U.S. at 478, 109 S.Ct. 1248, Un-
der the FAA, parties may “agree[] to abide
by state rules of arbitration, [and] enforcing
those rules according to the terms of the
agreement is fully consistent with the goals
of the FAA....” 489 U.S, at 479, 109 S.Ct.
1248. The FAA does not preempt those state
rules that may delay arbitration “where the
Act would otherwise permit it to go forward.”
Id, The Volt court emphasized that no feder-
al policy exists for “favoring arbitration un-
der a certain set of procedural rules... .” 489
US, at 476, 109 S.Ct. 1248. A state procedur-
al rule governing arbitration, applied “in ac-
cordance with the terms of the arbitration
agreement itself,” does not “undermine the
goals and policies of the FAA.” 489 U.S, at
477-78, 109 S.Ct. 1248, So long as the state
procedural rule does not “stand as an obsta-
cle to the accomplishment and execution of
the full purposes and objectives of Congress”
in enacting the FAA, it does not conflict with
the FAA, and the FAA will not preempt it.
489 US. at 477, 109 S.Ct, 1248 (citation
omitted),

For those jurisdictions that have examined
whether the FAA’s appeal provisions
preempt state appeal provisions (where those
state appeal provisions are based on the Uni-
form Arbitration Act, as Hawaii’s arbitration
appeal provisions are), a majority rule has
emerged: the FAA’s appeal provisions do not
preempt state appeal provisions because (1)
state appeal provisions are procedural rather
than substantive; (2) procedural provisions
should not be preempted unless they stand
as an obstacle to the full purposes and objec-
tives of the FAA; and (8) the state procedur-
al rules do not impede the FAA’s objective of
ensuring the enforceability of arbitration
agreements in private contracts, Morgan
Keegan & Co., Inc, v. Smythe, 401 S.W.8d
595, 606 (Tenn, 2018) (collecting cases follow-
ing the majority rule), More specifically,
some of these jurisdictions have held that an
order compelling arbitration is immediately

Neb. 591, 788 N.W.2d 588 (2010); Wells v.
Chevy Chase Bank, F.S.B., 363 Md. 282, 768
A.2d 620 (2001); Simmons y. Deutsche Fin.
Servs. Corp., 248 Ga.App, 85, 582 S.E.2d 436
(2000).

Therefore, this court will enforce the par-
ties’ choice-of-law provision and apply Ha-
waii’s procedural rules to this matter. This
court has jurisdiction to entertain this ap-
peal.

B. The circuit court correctly concluded
that the parties entered into a valid
arbitration agreement, and that Ga-
briel’s retaliation claim was within
the scope of the arbitration agree-
ment,

Hs Under Brown, a court faced with a
motion to compel arbitration must first ad-
dress whether an arbitration agreement ex-
ists between the parties. Brown, 82 Hawai'i
at 288, 921 P.2d at 158 (citation omitted). In
order to be valid and enforceable, “an arbi-
tration agreement must have the following
three elements: (1) it must be in writing; (2)
it must be unambiguous as to the intent to
submit disputes or controversies to arbitra-
tion; and (8) there must be bilateral consider-
ation.” Douglass v. Pflueger Hawaii, Inc. 110
Hawai'i 520, 531, 185 P.3d 129, 140 (2006)
(citation omitted).

HH On appeal, Gabriel argues that the
parties did not enter into the 2014-2015 em-
ployment agreement, and, therefore, did not
enter into the arbitration agreement found
within it. Gabriel argues that, as she was not
hired for the 2014-2015 academic year, no
consideration supported the 2014-2015 con-
tract or the arbitration provision within it.
She again points out that IPA did not sign
the 2014-2015 employment agreement.

IPA’s position is that the parties entered
into a valid arbitration agreement, IPA ar-
gues that Gabriel accepted IPA’s offer of
employment when she signed and returned
the 2014-2015 employment agreement, un-
modified. In so doing, she entered into the
arbitration agreement, which was contained
in the employment agreement. Concerning

Gabriel’s argument that no consideration ex-
isted to support the 2014-2015 employment
agreement and the arbitration agreement
within it, IPA counter-argues that consider-
ation supported the arbitration agreement.
because both Gabriel and IPA agreed to
forgo their rights to litigate in court, citing
Brown, 82 Hawai'i at 289-40, 921 P.2d at 159-
60; and Douglass, 110 Hawai'i at 684-35, 185
P.8d at 148-44,

For the reasons stated by IPA, we con-
clude that Gabriel and IPA entered into an
arbitration agreement. The arbitration agree-
ment (1) was in writing; (2) unambiguously
bound the parties to “handle[ ] out of court”
“any dispute concerning this Agreement”
through submission of the dispute to an arbi-
trator; and was supported by bilateral con-
sideration, as both parties “would forego [sic]
their respective rights to a judicial forum”
and accept the binding arbitration process.”
Brown, 82 Hawai'i at 239-40, 921 P.2d at 159-
60. Additionally, it did not matter that an
agent from IPA did not sign the employment
agreement, This case is similar to Brown,
where this court enforced an arbitration
agreement found in an employment applica-
tion signed by the prospective employee but
not by the employer. See Brown, 82 Hawai'i
at 229, 921 P.2d at 149, When Gabriel signed
and returned the 2014-2015 employment
agreement, she accepted IPA’s offer for em-
ployment, and all of the terms that came with
it, including an agreement to arbitrate,

We note that the entire employment
agreement is relatively short at four pages
long. It is written in plain English with no
fine print or cross-references to other docu-
ments. The arbitration agreement is located
on the same page as Gabriel’s signature.
‘Thus, this case is unlike other cases in which
questions arise as to an employee’s intent to
be bound to an arbitration provision that is
physically separate from an employment con-
tract. See, e.g., Brown, 82 Hawai'i at 245, 921
P.2d at 165 (holding that an arbitration
agreement contained in an employment ap-
plication applied to a discrimination claim
arising out of a later executed oral contract
for employment); Douglass, 110 Hawaii at
534, 185 P.8d at 143 (holding that mutual
assent to arbitrate was lacking, where the

335

employment contract did not contain the ar-
bitration agreement, and the employee mere-
ly signed an acknowledgement of having read
a separate employee handbook, which did
contain the arbitration agreement). In this
case, by contrast, the plain language of the
arbitration agreement demonstrates the par-
ties’ mutual assent to arbitrate. In short, a
valid and enforceable arbitration agreement
exists between the parties.

HA court faced with a motion to
compel arbitration must next decide whether
“the subject matter of the dispute is arbitra-
ble under the agreement.” Brown, 82 Hawai'i
at 288, 921 P.2d at 158 (citation omitted).
Gabriel argues that the arbitration agree-
ment governs matters covered in the employ-
ment agreement, but not civil rights claims
under HRS § 878-2(2). IPA counter-argues
that Hawai'i courts have long recognized the
strong public policy supporting Hawaii’s arbi-
tration statutes, and that any doubts con-
cerning the scope of arbitrable issues should
be resolved in favor of arbitration, citing Lee
y. Heftel, 81 Hawai'i 1, 4, 911 P.2d 721, 724
(1996).

HH We conclude that Gabriel’s discrimi-
natory retaliation claim was within the scope
of the arbitration agreement, because the
arbitration agreement required her to “han-
dle[] out of court” “any dispute concerning
this Agreement” by submitting the dispute to
an arbitrator. At the federal and state level,
there exists a strong policy in favor of arbi-
tration, such that any doubt concerning
whether a dispute is covered by an arbitra-
tion agreement should be resolved in favor of
arbitrability. See Moses H. Cone Mem’l
Hosp, v. Mercury Constr. Corp., 460 U.S, 1,
24, 108 S.Ct. 927, 74 L.Bd.2d 765 (1988)
(“The Arbitration Act establishes that, as a
matter of federal law, any doubts concerning
the scope of arbitrable issues should be re-
solved in favor of arbitration, whether the
problem at hand is the construction of the
contract language itself or an allegation of
waiver, delay, or a like defense to arbitrabili-
ty.”) footnote omitted); Lee, 81 Hawai'i at 4,
911 P.2d at 724 (“{The proclaimed public
policy [supporting Hawaii’s arbitration stat-
utes] is to encourage arbitration as a means
of settling differences and thereby avoiding

336

litigation. [AJny doubts concerning the scope
of arbitrable issues should be resolved in
favor of arbitration[.]”) (citations omitted).

IPA also correctly observes that arbitra-
tion agreements should be interpreted broad-
ly in favor of finding arbitrability, where the
arbitration agreement is worded similarly to
the instant one regarding “any dispute con-
cerning this Agreement.” Indeed, in UNI-
DEV, we examined an arbitration agreement
that stated that “[alny dispute arising under
the terms of this Agreement ... shalll, if the
matter cannot be resolved by other prelimi-
nary means be submitted] to arbitration.
...” 129 Hawaii at 381, 301 P.8d at 591
(emphasis added). We held that an arbitra-
tion agreement worded this way “constitutes
a ‘general’ arbitration clause” whose scope
should be interpreted broadly. 129 Hawaii at
895-96, 301 P.3d at 605-06. In short, Gabriel’s
retaliation claim falls within the scope of the
arbitration agreement.

HM Lastly, Gabriel argues that a dis-
eriminatory retaliation claim is not expressly
referenced in the employment agreement,
and, therefore, falls beyond the scope of the
arbitration agreement. We disagree and note
that the arbitration agreement covered ter-
mination due to alleged retaliatory discrimi-
nation, because the employment agreement
implicitly included within it Hawaii’s laws
concerning discrimination in employment. A
contract is presumed to include all applicable
statutes and settled law relating to its sub-
ject matter. Section 363 of 17A AmJur.2d
Contracts (2016) states

Contracting parties are presumed to con-

tract in reference to the existing law, and

to have in mind all the existing laws relat-
ing to the contract, or to the subject mat-
ter thereof. All existing applicable or rele-
vant statutes, and settled law of the land at
the time a contract is made become a part.
of it and must be read into it just as if an
express provision to that effect were in-
serted therein, except where the contract
discloses a contrary intention. By virtue of
this rule, the laws which exist at the time
and place of making a contract and at the
place where it is to be performed, affecting
its validity, construction, operation, per-
formance, enforcement, and discharge, en-

ter into and form a part of it as if they
were expressly referred to or incorporated
into its terms.

This court favorably cited to and applied this
general rule in City and Cty, of Honolulu v.
Kam, 48 Haw. 349, 402 P.2d 683 (1965), and
Quedding v. Arisumi Bros., 66 Haw. 335, 661
P.2d 706 (1983) (per curiam). In both Kam
and Quedding, this court held that the “gen-
eral rule [is] that the existing law is part of a
contract where there is no stipulation to the
contrary.” Kam, 48 Haw. at 355, 402 P.2d at
687; Quedding, 66 Haw. at 888, 661 P.2d at.
709, Therefore, the arbitration agreement’s
seope included Gabriel’s retaliatory discrimi-
nation claim.

In short, the parties entered into a valid
employment agreement containing an arbi-
tration agreement, and the arbitration agree-
ment covered Gabriel’s claims.

C. The arbitration agreement’s cost-split-
ting requirement is unconscionable
and, therefore, unenforceable.

On appeal, Gabriel argues that the arbitra-
tion agreement is unenforceable because it is
procedurally and substantively unconsciona-
ble. She contends the 2014-2015 employment
agreement that contained the arbitration
agreement was procedurally unconscionable
because it was a contract of adhesion, offered
to her on a take-it-or-leave-it basis, and she
was only given a few weeks to review and
sign it. Gabriel maintains that she had no
opportunity to negotiate the terms of the
2014-2015 employment agreement, that she
was not told she was agreeing to arbitrate
civil rights claims, and that the arbitration
agreement was not made conspicuous within
the employment agreement. Gabriel argues
that the arbitration agreement was also sub-
stantively unconscionable because it unfairly
advantaged IPA by limiting her access to the
courts and costing her a significant amount
of money to arbitrate her claims,

HE Under Hawai'i law, an arbitration
agreement is generally “valid, enforceable,
and irrevocable except upon a ground that
exists at law or in equity for the revocation of
a contract.” HRS § 658A-6(a) (2016). One of
those grounds is unconscionability. See Lewis

y. Lewis, 69 Haw. 497, 500, 748 P.2d 1362,
1866 (1988). Unconscionability encompasses
two principles: one-sidedness (substantive
unconscionability) and unfair surprise (proce-
dural unconscionability). Balogh v. Balogh,
184 Hawai'i 29, 41, 332 P.8d 681, 643 (2014),
The Balogh court noted, “Generally, a deter-
mination of unconscionability requires a
showing that the contract was both procedur-
ally and substantively unconscionable when
made,” but an impermissibly one-sided con-
tract can be unconscionable and unenforcea-
ble without a showing of unfair surprise. Id.
(citing Adler_v. Fred Lind Manor, 153
Wash.2d 381, 108 P.8d 778, 782 (2004) (en
banc) (brackets and ellipsis omitted).

We have applied the doctrine of uncon-
scionability in multiple contractual contexts,
not just in the arbitration context. See, e.g,
Balogh, 184 Hawai‘i 29, 332 P.3d 631 (memo-
randum of understanding regarding property
ion in divorce); Thompson v, AIG Hawaii
111 Hawai'i 418, 142 P.38d 277 (2006)
(personal injury settlement agreement);
Lewis, 69 Haw. 497, 748 P.2d 1862 (premari-
tal agreements); Earl M. Jorgensen Co., v.
Mark Constr., 56 Haw. 466, 540 P.2d 978
(1975) (contract for sale of goods). Therefore,
application of the unconscionability doctrine
in this case places the arbitration agreement.
“on equal footing with all other contracts,”
DIRECTV, Ine. y. Imburgia, — U.S. —,
186 S.Ct. 468, 465, 198 L.Ed.2d 365 (2015),
and does not “singlef Jout arbitration agree-
ments for disfavored treatment. ...” Kin-
dred Nursing Ctrs, Ltd, P’ship v. Clark, —
US. —, 187 S.Ct. 1421, 1425, 197 L.Ed.2d
806 (2017).

Gabriel urges us to follow cases from the
United States Court of Appeals for the Ninth
Circuit that hold that an arbitration agree-
ment’s cost-splitting requirement is, standing
alone, so substantively unconscionable as to
render the entire arbitration agreement un-
enforceable. The Ninth Circuit has examined,
under California law, a similar requirement
that an employee split arbitration fees with
her employer. Circuit City Stores, Inc. v.
Adams, 279 F.3d 889, 894 (9th Cir, 2002), The
Ninth Cireuit held, “This fee allocation
scheme alone would render an arbitration
agreement unenforceable.” Id. (footnote and

337

citation omitted). The Ninth Circuit ultimate-
ly invalidated the entire arbitration agree-
ment because additional provisions provided
further justification for finding the arbitra-
tion agreement unconscionable and, there-
fore, unenforceable, Id. at 896.

In Ferguson v. Countrywide Credit Indus-
tries, Inc, 298 F.8d 778, 785 0.7 (Oth Cir.
2002), the Ninth Cireuit favorably cited
Adams’ holding, noting that a cost-splitting
requirement between employer and employ-
ee posed a “significant deterrent effect ...
on employees who are required to arbitrate
their civil rights claims.” The Ferguson court
elaborated that “the significant up-front costs
associated with bringing a claim in an arbi-
tral forum may prevent individuals with mer-
itorious claims from even pursuing these
claims in the first place.” Id. at n.8, Similarly,
in Ingle v. Cireuit City Stores, Inc., 328 F.3d
1165, 1178 (9th Cir. 2008), the Ninth Cireuit
again favorably cited Adams and added that
an arbitration agreement calling for an em-
ployee to share arbitration costs with an
employer was “harsh and unfair to employ-
ees seeking to arbitrate legal claims,” and is,
therefore, substantively unconscionable.

HE We do not go so far as to adopt a
holding that a cost-splitting requirement in
arbitration is per se unconscionable and,
therefore, unenforceable, Rather, whether
cost-splitting in arbitration is unconscionable
depends on the facts of each case, Under the
circumstances of this case, the cost-splitting
provision is substantively unconscionable be-
cause it would be prohibitively expensive for
Gabriel to pursue her claims in the arbitral
forum.

During the course of her employment with
IPA, Gabriel’s salary ranged from $35,000 to
$45,000. As part of this litigation, she filed a
declaration stating that she was without a
full-time job, having financial difficulty, and
unable to pay for the costs of arbitration,
Gabriel also submitted evidence from DPR
that it would cost $20,418.84 for a four-day
arbitration, and that she would need to remit
a $10,200.00 deposit to DPR. It is uncon-
scionable to require a terminated school
teacher to pay, up-front, a deposit amounting
to one-quarter to one-third of her former
annual salary in order to access the arbitral

338

forum.’ Therefore, we hold that the cost-
splitting requirement alone is unconscionable
as impermissibly one-sided, in favor of IPA,
Balogh, 184 Hawai'i at 41, 882 P.8d at 648,
This conclusion renders it unnecessary for
this court to pass on the issue of procedural
unconscionability. We note, however, that
IPA did not challenge the circuit court’s find-
ing that the manner’ by which Gabriel
agreed to the cost-splitting requirement was
procedurally unconscionable, Therefore, we
accept that finding, which provides an addi-
tional basis for rendering the cost-splitting
requirement unenforceable as unconsciona-
ble.

Despite ample evidence in the record that
Gabriel will not be financially able to arbi-
trate her claims, IPA argues that Gabriel did
not carry her burden of proving the likeli-
hood that she would incur prohibitively ex-
pensive arbitration costs under Green Tree,
581 U.S. 79, 121 S.Ct. 518. In Green Tree, an
employee asserted that she would be unable
to vindicate her statutory rights (there, her
yights under the federal Truth in Lending
Act and the federal Equal Credit Opportuni-
ty Act) if she were compelled to arbitrate her
claims, because there was a risk she would
have to pay potentially substantial costs in
arbitration. 581 U.S. at 88, 89, 121 S.Ct, 513.
The United States Supreme Court disagreed,
noting that the employee had utterly failed to
substantiate her assertion. 581 U.S. at 90 n.6,
121 S,Ct, 513.

The United States Supreme Court ob-
served that the record “does not show that
[the employee] will bear such [large arbitra-
tion] costs if she goes to arbitration, Indeed,
it contains hardly any information on the
matter.” 581 U.S. at 90, 121 S.Ct, 518 oot-
note omitted), All the employee submitted to
the district court, in a motion for reconsider-

6. We would similarly conclude that it would be
unconscionable to require such cost-splitting in,
for example, the mediation context. As such, our
unconscionability analysis does not single out
arbitration agreements for disfavored treatment.

See Kindred Nursing Ctrs. Ltd. P’ship, 137 S.Ct.
at 1425,

7. As stated earlier, the circuit court concluded
that the arbitration agreement was procedurally
unconscionable as a contract of adhesion be-
cause it was the result of coercive bargaining
between parties of unequal bargaining strength.

ation, was an “assert[ion] that ‘[a]rbitration
costs are high’ and that she did not have the
resources to arbitrate,” 531 U.S. at 90 n.6,
121 S.Ct, 518. The employee provided no
estimates of the cost of arbitration and, in-
stead, “assumed” the American Arbitration
Association, or AAA, would conduct the arbi-
tration, noting (without evidentiary support)
that the AAA charged a $500 filing fee for
claims under $10,000. Id. The employee also
submitted an article stating that arbitration
costs are, on average, $700 per day. Id,

The Court concluded that the employee
“plainly failed to make any factual showing
that the American Arbitration Association
would conduct the arbitration, or that, if it
did, she would be charged the filing fee or
arbitrator’s fee that she identified.” Id. The
Court stated, “The ‘risk’ that [the employee]
will be saddled with prohibitive costs is too
speculative to justify the invalidation of an
arbitration agreement.” 581 U.S. at 91, 121
S.Ct. 518. The Court went on to hold that,
“where ... a party seeks to invalidate an
arbitration agreement on the ground that
arbitration would be prohibitively expensive,
that party bears the burden of showing the
likelihood of incurring such costs.” 581 U.S.
at 92, 121 S.Ct. 518,

IPA argues that, like the employee in
Green Tree, Gabriel failed to carry her bur-
den of proving that arbitration would be so
prohibitively expensive for her that it would
prevent her from vindicating her statutory
rights (in this case, statutory rights under
HRS Chapter 378, which prohibits discrimi-
nation in employment). Green Tree, however,
involved the vindication of federal statutory
rights in the arbitral forum. 581 U.S. at 89-
91, 121 S.Ct. 513, It is an open question,
however, as to whether Green Tree applies in

The circuit court noted that the arbitration agree-
ment was drafted and proffered by IPA, the
stronger of the contracting parties; was offered
to Gabriel on a take-it-or-leave-it basis; Gabriel
was given only a few weeks to review and sign
the 2014-2015 employment agreement, which
contained the arbitration agreement; the employ-
ment agreement required Gabriel to certify that
she sought employment only with IPA; and Ga-
briel was given no opportunity to modify the
terms of the employment agreement.

cases where claimants challenge arbitration
as a forum for vindicating state statutory
rights. See, e.g., Kaltwasser v. AT&T Mobili-
ty, 812 F.Supp.2d 1042, 1048 (N.D. Gal. 2011)
(‘[Ilt is not clear that Green Tree’s solici-
tude for the vindication of rights applies to
rights arising under state law, which are the
only rights that [the claimant] seeks to vindi-
cate here.”); and James v. MeDonald’s Corp.,
417 F.3d 672, 679 (7th Cir, 2005) (“It remains
unclear whether the rationale of Green Tree
applies to situations that do not involve the
assertion of federal statutory rights.”).

Green Tree itself thrice referenced the
vindication of “federal statutory claims” in
reaching its holding. Green Tree, 581 U.S. at
89-90, 121 S.Ct. 518 (emphasis added). The
majority of federal circuits ruling on the
issue have concluded that Green Tree does
not apply where a claimant seeks to vindicate
only state statutory claims, as Gabriel seeks
in this case. See, e.g, Stutler vy. T.K, Con-
structors, Inc, 448 F.8d 348, 846 (6th Ci
2006) (“Green Tree ... [is] limited by [its]
plain language to the question of whether an
arbitration clause is enforceable where feder-
al statutorily protected rights are affected, In
this case, no federally protected interest is at
stake.”) (emphasis added); Pro Tech Indus.,
Inc. v. URS Corp., 377 F.8d 868, 873 (8th
Cir, 2004) (noting that Green Tree addresses
arbitration of federal statutory claims, not
unconscionability of an arbitration agreement
under state law); Coneff vy. AT&T Corp., 673
F.8d 1155, 1158 n.2 (9th Cir. 2012) (“Green
Tree ... [is] limited to federal statutory
vights.”) (emphasis added); but see Kristian
y. Comeast Corp., 446 F.3d 25, 29 (1st Cir.
2006) (finding “provisions of ... arbitration
agreements ... invalid because they prevent.
the vindication of statutory rights under
state and federal law”); and Booker v. Robert
Half Int'l, Inc, 418 F.8d 77, 79-81 (D.C. Cir.
2005) (applying Green Tree to District of
Columbia statutory rights without analysis
into whether Green Tree applied only to
federal statutory rights),

Assuming arguendo that Green Tree does
apply, Gabriel has sufficiently carried her
burden of proof: exhibits and declarations in
the record show that arbitration was estimat-
ed to cost $20,418.84, that Gabriel would have

339

to remit a $10,200.00 deposit to DPR to
arbitrate her claim, that Gabriel made
$45,000 annually during the last academic
year she worked for IPA, and that Gabriel
was without a full-time job, having financial
difficulty, and unable to pay for the costs of
arbitration. Unlike the plaintiff in Green
‘Tree, who could only speculate as to the high
costs of arbitration, Gabriel has shown pre-
cisely what the costs were estimated to be
and that such costs were prohibitively expen-
sive for her, Therefore, we disagree with
IPA’s assertion that Gabriel presented “noth-
ing but speculation she would incur any arbi-
tration costs.”

D. The circuit court erred in compelling
arbitration and ordering IPA to pay
for all arbitration costs.

HH The circuit court found the cost-
splitting requirement unconscionable but
nonetheless compelled arbitration and or-
dered IPA to pay all of the arbitration costs.
On appeal, Gabriel argues that the circuit
court should have denied IPA’s motion to
compel or invalidated the entire arbitration
provision. On cross-appeal, IPA argues that
the circuit court was correct in compelling
arbitration, but it should have severed the
cost-splitting requirement pursuant to the
severability clause in the parties’ employ-
ment agreement instead of conditioning arbi-
tration upon IPA’s payment of all arbitration
costs. Gabriel points out, and IPA agrees,
that the parties had no intention to allow for
the rewriting of the arbitration clause to
have IPA pay for the arbitration cost.

HN We agree that the circuit court im-
properly modified the parties’ arbitration
agreement when it attempted to reform the
parties’ agreement by ordering IPA to pay
all arbitration costs. We note that the parties’
employment agreement allows modification
of the agreement only “in writing, signed by
both the Educator and the Head of School
and/or his designee, and entitled ‘Modifica-
tion of Contract.’ ” As Gabriel argues, neither
party sought to modify the arbitration agree-
ment to direct IPA to pay arbitration costs.
The court's order compelling arbitration and
directing IPA to pay costs is a result neither
party intended, and amounts to a reformation

340

of the arbitration agreement without a firm
basis in our precedent to do so. Ordinarily,
reformation of a contract is a remedy in the
following circumstances:

Reformation is appropriate, when an

agreement has been made, or a transaction

has been entered into or determined upon,
as intended by all the parties interested,
but in reducing such transaction to writing,
either through the mistake of both parties,
or through the mistake of the plaintiff
accompanied by the fraudulent knowledge
and procurement of the defendant, the
written instrument fails to express the real
agreement or transaction.
Kuamu v. Iaukea, 9 Haw. 612, 614 (quoting
Pomeroy’s Hig. Jur. vol. 2, Sec. 870, p. 344);
see also State v. Kahua Ranch, Ltd., 47 Haw.
28, 88, 884 P.2d 581, 585 (1963) (holding that
reformation is appropriate where the con-
tract contains a “mutual mistake [that] does
not reflect the true intention of the par-
ties....”); Lee v. Aiu, 85 Hawai'i 19, 31, 936
P.2d 655, 667 (1997) (noting that reformation
of a deed is appropriate to reflect the true
intent of the parties, where such intent was
incorrectly expressed through mutual mis-
take or the fraud of the defendant). These
circumstances are not present in this case;
therefore, the circuit court improperly re-
formed the arbitration agreement by requir-
ing IPA to pay all arbitration costs.

Further, the circuit court justified its deci-
sion to order IPA to pay all arbitration costs
by relying on Cole, 105 F.3d 1465, a case that
is distinguishable from the instant case. In
Cole, the United States Court of Appeals for
the D.C. Cireuit affirmed the district court’s
order compelling arbitration of an employee’s
Title VII claim. 105 F.8d at 1488, Like the
instant arbitration agreement, the arbitration
agreement at issue in Cole contained no ex-
press provision on the payment of fees; rath-
er, it incorporated by reference the AAA’s
rules, 105 F.8d at 1485, Unlike the instant
case, where DPR’s rules require cost-split-
ting, the AAA’s rules were silent on the issue
of payment of fees and made no provision for

8 Green Tree has called into question Cole’s
continuing viability. In Shatteen v. Omni Hotels
Mgmt. Corp. 113 F.Supp.3d 176, 182 n3
@.C.D.C, 2015), the D.C. District Court doubted
whether Cole remained good law, noting, “Cole’

reduced or waived fees in case of financial
hardship. 105 F.8d at 1469, 1484, 1485. The
D.C. Circuit upheld the arbitration agree-
ment but construed the silences within it
against the drafter (the employer) in requir-
ing the employer to pay all of the costs of
arbitration, as follows:

In our view, an employee can never be
required, as a condition of employment, to
pay an arbitrator's compensation in order
to secure the resolution of statutory claims
under Title VII (any more than an employ-
ee can be made to pay a judge’s salary). If
there is any risk that an arbitration agree-
ment can be construed to require this re-
sult, this would surely deter the bringing
of arbitration and constitute a de facto
forfeiture of the employee’s statutory
rights. The only way that an arbitration
agreement of the sort at issue here can be
lawful is if the employer assumes responsi-
bility for the payment of the arbitrator’s
compensation.

105 F.3d at 1468 (footnote omitted). Thus,
Cole stands for the proposition that, where
no provision is made for the payment of
arbitration costs, and where arbitration of a
Title VII claim is compelled in the employ-
ment context, an employer can be ordered to
bear all arbitration costs.’ Cole appears to be
an outlier in judicially creating a condition
that an employer pay for arbitration costs;
other courts address unconscionable arbitra-
tion cost provisions by severing offending
provisions or invalidating the arbitration
agreement altogether. See, e.g., Adams, 279
F.3d 889; Ingle, 328 F.3d 1165; Ferguson,
298 F.3d 778 (all applying California contract.
law).

E. The circuit court erred in declining to
invalidate the entire arbitration provi-
sion.

HM The appropriate course for the cir-
cuit court was to examine the arbitration
agreement as a whole to determine whether
parts of it could be severed, or whether the

s holding is, in any event, on shaky ground in
light of the Supreme Court's subsequent decision
in Green Tree Financial, which eschews any per
se ban on fee shifting in the arbitral context.”

entire arbitration agreement should be invali-
dated. Under our case law, in the context of
illegal contracts, a partially invalidated
agreement may nevertheless be upheld if the
invalid provisions are severable from the val-
id provisions. See, e.g., Beneficial Hawaii,
Ine. v, Kida, 96 Hawai‘i 289, 311, 30 P.8d 895,
917 (2001) (“Thus, the general rule is that
severance of an illegal provision of a contract.
is warranted and the lawful portion of the
agreement is enforceable when the illegal
provision is not central to the parties’ agree-
ment and the illegal provision does not in-
volve serious moral turpitude, unless such a
result is prohibited by statute.”); Ai v. Frank
Huff Agency, Ltd. 61 Haw. 607, 607 P.2d
1804 (1980), overruled on other grounds by
Robert’s Haw. Sch. Bus, Inc, v, Laupahoehoe
Trans. Co., 91 Hawai'i 224, 982 P.2d 858
(1999) (“It is well settled under ordinary
contract law, however, that a partially illegal
contract may be upheld if the illegal portion
is severable from the part which is legal.”)
(citations omitted).

Similarly, in the context of unconscionable
contracts, the Restatement (Second) of Con-
tracts § 208 (1981) states, “If a contract or
term thereof is unconscionable at the time
the contract is made a court may refuse to
enforce the contract, or may enforce the
remainder of the contract without the uncon-
scionable term, or may so limit the applica-
tion of any unconscionable term as to avoid
any unconscionable result.” Comment g to
the Restatement elaborates, “Where a term
rather than the whole contract is unconscion-
able, the appropriate remedy is ordinarily to
deny effect to the unconscionable term.”

Other jurisdictions following the Restate-
ment, however, have articulated circum-
stances under which invalidation of an entire
arbitration provision, not just severance of an
unconscionable term, is necessary, where no
part of the arbitration provision can be
spared and given effect. For example, in New
Mexico, where an unconscionable provision in
an arbitration agreement is “central” to the
means by which the parties would arbitrate
their claims, severance of the unconscionable
provision is not possible, and the entire arbi-
tration agreement must be invalidated. See
Felts v. CLK Mgmt., Inc,, 149 N.M. 681, 254

341

P.3d 124, 189 (N.M. App. 2011). In Felts, the
New Mexico Supreme Court invalidated an
entire arbitration agreement due to a sub-
stantively unconscionable class action ban
that was central to the parties’ agreement to
arbitrate. 254 P.8d at 140.

Even more similar to this case, the
Washington Supreme Court held, “Sever-
ance is the usual remedy for substantively
unconscionable terms, but where such terms
‘pervade’ an arbitration agreement, [the
Washington courts] refuse to sever those
provisions and declare the entire agreement
void.” Gandee_y. LDL Freedom Enters.
Ine., 176 Wash.2d 598, 298 P.8d 1197, 1199-
1200 (2018) (citation omitted). In Gandee,
the Washington Supreme Court invalidated
an entire arbitration agreement due to per-
vasive substantively unconscionable terms,
thereby affirming the denial of a motion to
compel arbitration. 293 P.3d at 1208.

HH In this case, substantively uncon-
scionable terms pervade the arbitration
agreement, Therefore, no part of the arbitra-
tion agreement can be spared and given ef-
fect. Again, the entire provision states

L. Arbitration, The parties desire that any

dispute concerning the Agreement be han-

dled out of court, Accordingly, they agree
that any such dispute shall, as the parties’
sole and exclusive remedy, be submitted to
an arbitrator licensed to practice law in the

State of Hawaii and selected in accordance

with the standard procedures of Dispute

Prevention Hawaii [sic]. The arbitrator will

not be entitled to add to or subtract from

its terms. Should either party start any
legal action or administrative proceeding
against the other with respect to any claim
related to this Agreement, or pursue any
method of resolution of a dispute other
than mutual agreement of the parties or
arbitration, then all damages, costs, ex-
penses and attorneys’ fees incurred by the
other party as a result shall be the respon-
sibility of the one bringing the suit or
starting the proceeding.
The employment agreement contains a sever-
ability provision, which states, “Should any
provision of this contract be invalidated by a
court of law with proper jurisdiction, the
remaining provisions shall remain in full

342

force and effect.” Although the circuit court
did not review each provision in the arbitra-
tion agreement for its enforceability, “this
court may nonetheless [do so] because uncon-
scionability is a question of law, reviewable
de novo.” Balogh, 184 Hawai'i at 42-48, 332
P.8d at 644-45,

We note that the second sentence in the
arbitration provision incorporates, by refer-
ence, DPR’s cost-splitting rules, The cireuit
court implicitly found this provision uncon-
scionable, and we agree. The third sentence
states, “The arbitrator will not be entitled to
add or subtract from its terms.” With the
second sentence invalidated, there remains
no grammatical referent for the “its” in the
third sentence, which appears to refer back
to the procedures mentioned in the second
sentence. Therefore, the third sentence must
be stricken.

We also note that the last sentence in the
arbitration agreement (the fee-shifting provi-
sion) is obviously unfair.” The fee-shifting
provision requires the party challenging arbi-
tration to pay the other party’s attorney's
fees and costs, solely for challenging the
arbitration provision in court, and even if the
challenge is meritorious and/or successful,
Under this provision, because Gabriel initi-
ated these proceedings, she would have to
pay for all of the “damages, costs, expenses,

and attorney's fees” incurred by IPA thus
far, simply for challenging the arbitration
provision in court, and even though she won
this appeal. This provision is plainly substan-
tively unconscionable and must be stricken as

9. We note that, at oral argument, IPA’s counsel
represented that the substance of the fee-shifting
provision in the arbitration agreement “was not
presented below. It was not presented in the
briefing [before the Hawai'i Supreme Court],”
and that it was “presented for the first time at
oral argument” by this court.

hittp://www.courts.state.hi.us/supreme_court.oa_
scap-15-912 at 34:14-27, IPA’s counsel went on
to represent that he “hafdjn’t even read the
clause,” because “it wasn’t presented at the cir-
cuit court and it wasn’t presented in briefing
before [the Hawai'i Supreme Court].

http:/Awww.courts.state.hi.us/supreme_court_oa_
scap-15-912 at 52:17-28. IPA’s counsel misstates
the record. The fee-shifting provision in the arbi-
tration clause appeared in IPA’s briefing before
the circuit court and before this court. In brief-
ing before the circuit court, IPA argued, “The
Court should award Defendant's attorneys’ fees

well. What remains in the arbitration agree-
ment is just the first sentence, which states
only, “The parties desire that any dispute
concerning the Agreement be handled out of
court.” Arbitration is not mentioned in this
sentence, Therefore, the remaining sentence
does not clearly evidence the parties’ desire
to arbitrate their claims. It cannot serve as a
basis for compelling arbitration. In effect, no
part of the arbitration agreement remains.
Consequently, the cireuit court erred in com-
pelling arbitration in this case.

F. The circuit court did not abuse its
discretion in denying IPA’s request for
attorney’s fees and costs,

This court invalidated the entire arbitra-
tion agreement; therefore, the fee-shifting
provision within the arbitration agreement
cannot serve as the basis for an award of
attorney’s fees and costs to IPA. Further, as
Gabriel’s opposition to IPA’s motion to com-
pel was not frivolous, as it legitimately chal-
lenged an unconscionable arbitration agree-
ment, an award of attorney’s fees and costs
was not warranted under the circuit court’s
inherent power, Therefore, the cireuit court
did not abuse its discretion in denying IPA’s
request for attorney’s fees and costs,

V. Conclusion

We conclude that (1) this court has juris-
diction over this appeal; (2) the cireuit court
correctly concluded that the parties entered
into a valid arbitration agreement; (8) the

in bringing this motion because the parties
agreed to that as part of the arbitration agree-
ment,” and quoted the final sentence of the arbi-
tration agreement. In briefing before this court,
IPA referred specifically to the fee-shifting provi-
sion in the point of error regarding the circuit
court's denial of an award of fees, as follows:
“Because of the parties’ agreement to the party
opposing arbitration paying the fees of the party
required to compel it, and because of the frivo-
lousness of Gabriel’s arguments in opposition to
complying with her agreement to arbitrate, the
Court should order her to pay the reasonable
attorneys’ fees incurred by IPA to enforce the
parties’ agreement to arbitrate Gabriel's claims.”
Therefore, the substance of the fee-shifting provi-
sion in the arbitration agreement was not raised
by this court for the first time at oral argument,
and it has been raised throughout these proceed-
ings by IPA itself.

cost-splitting requirement in the arbitration
agreement is unconscionable; (4) however,
the circuit court improperly reformed the
arbitration agreement to require IPA to pay
all arbitration costs instead of invalidating
the entire arbitration agreement; and (6) the
circuit court did not abuse its discretion in
denying IPA’s request for attorney’s fees and
costs. Consequently, we vacate the circuit
court's order compelling arbitration and re-
mand this case to the circuit court for further

proceedings,

400 P.3d 544

Krishna NARAYAN; Sherrie Narayan; Vi-
rendra Nath; Nancy Makowski; Keith
Macdonald as Co-trustee for DKM Trust
Dated October 7, 2011; Simon Yoo; Su-
miyo Sakaguchi; Susan Renton, as Trus-
tee for Renton Family Trust Dated
12/8/09; Stephen Xiang Pang; Faye Wu
Liu; Massy Mehdipour as Trustee for
Massy Mehdipour Trust Dated June 21,
2006; G. Nicholas Smith; Tristine Smith;
Ritz 1803 RE, LLC, a Colorado Limited
Liability Company; Bradley Chaffee as
Trustee of Charles V. Chaffee BRC
Stock Trust Dated 12/1/99, Clifford W.
Chaffee BRC Stock Trust Dated 1/4/98,
Petitioners/Plaintiffs-Appellees,

v

RITZ-CARLTON DEVELOPMENT COM-
PANY, INC, The Ritz-Carlton Man-
agement Company, LLC; John Albert;
Edgar Gum, Respondents/Defendants-
Appellants,

and

Marriott International Inc.; Maui Land &
Pineapple Co., Ine; Exclusive Resorts,
LLC; Kapalua Bay, LLC; Association of
Apartment Owners of Kapalua Bay Con-
dominium; Caroline Peters Belsom; Ca-
thy Ross; Robert Parsons; Ryan Church-
ill; The Ritz-carlton Hotel Company,
L.L.C. Marriott Vacations Worldwide,

343

Corporation; Marriott Ownership Re-
sorts, Inc; Marriott Two Flags, LP; MH
Kapalua Venture, LLC; MLP KB Part-
ner LLC; Kapalua Bay Holdings, LLC;
ER Kapalua Investors Fund, LLC; ER
Kapalua Investors Fund Holdings, LLC;
Exclusive Resorts Development Compa-
ny, LLC; and Exclusive Resorts Club I
Holdings, LLC, Respondents/Defen-
dants,

SCWC-12-0000819

Supreme Court of Hawai‘.

JULY 14, 2017

st
of

4h

Terence J. O'Toole, Judith Ann Pavey, and
Andrew J. Lautenbach, Honolulu, for peti-
tioners.

Bert T. Kobayashi, Jr., Lex R. Smith, Jo-
seph A. Stewart, Maria Y. Wang, and Aaron
R. Mun, Honolulu, for respondents, The Ritz-
Carlton Development Company, Ine. The

346

Ritz-Carlton Management Company, LLC,
John Albert and Edgar Gum and respon-
dents Marriott International, Inc., The Ritz-
Carlton Hotel Company, LLC, Marriott Two
Flags, LP, Marriott Ownership Resorts, Inc.,
MH Kapalua Venture, LLC, and Marriott
Vacations Worldwide Corporation,

RECKTENWALD, C.J., NAKAYAMA,
McKENNA, AND POLLACK, JJ., AND
CIRCUIT JUDGE NAKASONE, IN
PLACE OF ACOBA, J., RECUSED?

OPINION OF THE COURT BY
NAKAYAMA , J.

I. INTRODUCTION

In Narayan v. Ritz-Carlton Development
Co., 185 Hawai'i 827, 850 P.8d 995 (2015)
(Narayan 1), this court held that the Plain-
tiffs, a group of individual condominium own-
ers, could not be compelled to arbitrate
claims arising from the financial breakdown
of a Maui condominium project. In reaching
this conclusion, this court determined that
the arbitration clause was unenforceable be-
cause the Plaintiffs did not unambiguously
assent to arbitration and because the terms
of arbitration were unconscionable.

On January 11, 2016, the Supreme Court
of the United States (Supreme Court) vacat-
ed and remanded Narayan I to this court for
further consideration in light of its recent

decision in DIRECTV, Inc. y. Imburgia, —
US. ——, 136 S.Ct, 468, 198 L.Ed.2d 865
(2015). In Imburgia, the Supreme Court de-
termined that state law must place arbitra-
tion agreements “on equal footing with all
other contracts.” Id, at 471 (quoting Buckeye

1, At the time this case was originally pending
before this court, Associate Justice Simeon R.
Acoba, Jr. was a member of the court; however,
he was recused from the case and Judge Naka-
sone sat in his place, Justice Acoba retired on
February 29, 2014.

2. These facts, drawn from the pleadings, are
taken as true for the limited purpose of reviewing
the Defendants’ motion to compel arbitration,
Douglass _v. Pflueger Haw., Inc., 110 Hawai'i
520, 524, 135 P.3d 129, 133 (2006) (‘‘The stan-
dard [for a petition to compel arbitration] is the
same as that which would be applicable to a
motion for summary judgment ...”); Nuvanu
Valley Ass'n _v. City & Cty. of Honolulu, 119
Hawai'i 90, 96, 194 P.3d 531, 537 (2008) (“[In

Check Cashing, Ine, v. Cardegna, 546 U.S.
440, 448, 126 S.Ct. 1204, 163 L.Ed.2d 1038
(2006)).

Again recognizing this principle, we affirm
our decision in Narayan I, concluding that,
under long-standing Hawai'i contract law, the
arbitration clause is unconscionable. As such,
we vacate the Intermediate Court of Appeals’
(ICA) October 28, 2018 judgment on appeal,
affirm the Cireuit Court of the Second Cir-
cuit’s (cirenit court) August 28, 2012 order
denying the Defendants’ motion to compel
arbitration, and remand the case to the cir-
euit court for further proceedings consistent
with this opinion,

Il BACKGROUND

A. Factual History

The following facts® are summarized from
this court’s earlier opinion in Narayan I.

Petitioners/Plaintiffs-Appellees Krishna
Narayan et al. (collectively, the Home-
owners) purchased ten condominium units
from Kapalua Bay, LLC, a joint venture
owned by Marriott International, Inc., Exclu-
sive Resorts, Inc., and Maui Land & Pineap-
ple Co., Ine. (collectively, the Defendants).
These units were part of a Maui condomini-
um development formerly known as the Ritz-
Carlton Club & Residences at Kapalua Bay
(the project)

The Homeowners entered into purchase
agreements with the Defendants when they
purchased their condominiums. The purchase
agreements contain two clauses relating to
dispute resolution: a jury waiver clause and

evaluating a motion for summary judgment,] we
must view all of the evidence and inferences
drawn therefrom in the light most favorable to
the party opposing the motion.” (quoting Kahale
v. City & Cty. of Honolulu, 104 Hawai'i 341, 344,
90 P.3d 233, 236 (2004))).

3. Respondents/Defendants-Appellants the Ritz-
Carlton Development Company, Inc. and the
Ritz-Carlton Management Company, LLC were
the original development and management com-
panies for the project, and were then wholly-
owned subsidiaries of Marriott, Respondents/De-
fendants-Appellants John Albert and Edgar Gum
served on the board of directors of the AOAO
while allegedly being employed by either Mar-
riott or Ritz-Carlton.

an attorneys’ fee clause, While these clauses
do not mention a binding agreement to arbi-
trate, the purchase agreement references an-
other document, the Declaration of Condo-
minium Property Regime of Kapalua Bay
Condominium (declaration), which includes
an arbitration clause. The Defendants re-
corded the declaration and the Association of
Apartment Owners of Kapalua Bay Condo-
minium Bylaws (AOAO bylaws) in the State
of Hawai'i Bureau of Conveyances prior to
the sale of the individual condominium units
to the Homeowners, Additionally, the Defen-
dants registered the Condominium Public
Report (public report) with the Hawai'i Real
Estate Commission. All of these documents
are incorporated by reference through the
purchase agreement.

The arbitration clause is found towards the
end of the thirty-six page condominium dec-
laration and provides, in its entirety:

XXXII ALTERNATIVE DISPUTE
RESOLUTION.

In the event of the occurrence of any
controversy or claim arising out of, or re-
lated to, this Declaration or to any alleged
construction or design defects pertaining
to the Common Elements or to the Im-
provements in the Project (“dispute”), if
the dispute cannot be resolved by negotia-
tion, the parties to the dispute agree to
submit the dispute to mediation by a medi-
ator mutually selected by the parties. If
the parties are unable to agree upon a
mediator, then the mediator shall be ap-
pointed by the American Arbitration Asso-
ciation, In any event, the mediation shall
take place within thirty (80) days of the
date that a party gives the other party
written notice of its desire to mediate the
dispute. If the dispute is not resolved
through mediation, the dispute shall be
resolved by arbitration pursuant to this
Article and the then-current rules and su-
pervision of the American Arbitration As-
sociation, The duties to mediate and arbi-
trate hereunder shall extend to any officer,
employee, shareholder, principal, partner,
agent trustee-in-bankruptcy, affiliate, sub-
sidiary, third-party beneficiary, or guaran-
tor of all parties making or defending any

347

claim which would otherwise be subject to
this Article,

The arbitration shall be held in Honolu-
Ju, Hawaii before a single arbitrator who is
knowledgeable in the subject matter at
issue. The arbitrator’s decision and award
shall be final and binding and may be
entered in any court having jurisdiction
thereof, The arbitrator shall not have the
Power _to award punitive, exemplary, or
consequential damages, or_any damages
exeluded by, or in excess of, any damage
Umitations expressed in this Declaration or
any other agreement between the parties.
In order to prevent irreparable harm, the
arbitrator may grant temporary or perma-
nent injunctive or other equitable relief for
the protection of property rights.

Issues of arbitrability shall be deter-
mined in accordance with the federal sub-
stantive and procedural laws relating to
arbitration; all other aspects of the dispute
shall be interpreted in accordance with,
and the arbitrator shall apply and be
bound to follow, the substantive laws of the
State of Hawaii. Hach party shall bear its
own attorneys’ fees associated with negoti-
ation, mediation, and arbitration, and other
costs and expenses shall be borne as pro-
vided by the rules of the American Arbi-
tration Association.

If court proceedings to stay litigation or
compel arbitration are necessary, the party
who unsuccessfully opposed such proceed-
ings shall pay all associated costs, ex-
penses, and attorneys’ fees which are rea-
sonably incurred by the other party.

The arbitrator may order the parties to
exchange copies of nonrebuttable exhibits
and copies of witness lists in advance of
the arbitration hearing. However, the arbi-
trator shall have no other power to order
discovery or depositions unless _and_ then
only to the extent that all parties otherwise

Neither a party, witness, or the arbitra-
tor_may disclose the facts of the underly-
ing dispute or the contents or results of
any negotiations, mediation, or arbitration
hereunder without prior written consent of
all_parties, unless_and then only to the
extent required to enforce or challenge the

348

negotiated agreement or the arbitration

award, as required by law, or as necessary

for_financial and tax reports and_audits.

No party may bring a claim or action,
regardless of form, arising out of or relat-
ed to this Declaration or to any construc-
tion or design defects claims pertaining to
the Common Elements or to the Improve-
ments of the Project, including any claim
of fraud, misrepresentation, or fraudulent
inducement, more than one year after the
cause of action accrues, unless the injured
party cannot reasonably discover the basic
facts supporting the claim within one year.

Notwithstanding anything to the con-
trary in this Article, in the event of alleged
violation of a party’s property or equitable
rights, including, but not limited to, unau-
thorized disclosure of confidential informa-
tion, that party may seek temporary in-
junctive relief from any court of competent
jurisdiction pending appointment of an ar-
bitrator. The party requesting such relief
shall simultaneously file a demand for me-
diation and arbitration of the dispute, and
shall request the American Arbitration As-
sociation to proceed under its rules for
expedited procedures, In no event shall
any such court-ordered temporary injunc-
tive relief continue for more than thirty
(80) days.

If any part of this Article is held to be
unenforceable, it shall be severed and shall
not affect either the duties to mediate and
arbitrate hereunder or any other part of
this Article.

(Emphases added.) Significantly, the under-
lined portions above indicate that the arbitra-
tion clause includes a limit on damages, a
limit on discovery, and a confidentiality pro-
vision.

In April of 2012, the Homeowners
Jearned that the Defendants had defaulted
on loans encumbering the project and that,
as a result, the Defendants could not pay
maintenance and operator fees to Marriott's
management subsidiaries. The Defendants
eventually defaulted on the AOAO assess-
ments, abandoned the project, and revoked
the Ritz-Carlton branding. Marriott or one
of its subsidiaries withdrew approximately

4, The Honorable Joseph E. Cardoza presided.

$1,800,000.00 from the AOAO operating
fund and threatened to withdraw the re-
maining $200,000.00 from the fund. The
AOAO board members, many of whom were
employed by Marriott, Ritz-Carlton, and/or
other interested entities, did not attempt to
block Marriott from taking these actions
but instead indicated that the multi-million
dollar shortfall would have to be covered by
the Homeowners.

B. Procedural History

On June 7, 2012, the Homeowners filed
suit in the circuit court‘ asserting claims for
breach of fiduciary duty, access to books and
records, and injunctive/declaratory relief.
The circuit court denied the Defendants’ mo-
tion to compel arbitration, which the Defen-
dants appealed. The ICA concluded that the
parties had entered into a valid agreement to
arbitrate, that the dispute fell within the
scope of that agreement, and that the agree-
ment was not procedurally unconscionable.
Thus, the ICA held that the Defendants
could compel the Homeowners to arbitration,

On June 8, 2015, this court issued an opin-
ion in Narayan I, vacating the ICA’s judg-
ment on appeal, affirming the circuit court’s
order denying the Defendants’ motion to
compel arbitration, and remanding the case
to the circuit court for further proceedings
consistent with the opinion, 135 Hawai'i at
889-40, 350 P.8d at 1007-08. This court held
that the Homeowners could not be compelled
to arbitrate for two reasons. First, this court
determined that “the arbitration provision
contained in the condominium declaration is
unenforceable because the terms of the vari-
ous condominium documents are ambiguous
with respect to the Homeowners’ intent to
arbitrate.” Id. at 335, 350 P.3d at 1003, Sec-
ond, this court determined that portions of
the arbitration clause were unconscionable.
Id, at 836-39, 350 P.3d at 1004-07.

This court subsequently issued summary
disposition orders in line with its opinion for
two related cases, Nath y. Ritz-Carlton Hotel
Co., No. SCAP-18-2732, 186 Hawai'i 23, 2015
WL 4067578 (Haw. June 30, 2015)(SDO), and
Narayan v. Marriott International, Inc., No.

SCAP-18-3607, 186 Hawaii 28, 2015 WL
4067610 (Haw. June 30, 2015) (SDO), (collec-
tively, the Narayan cases).

The Defendants filed petitions for writ of
certiorari for the Narayan cases and, on Jan-
uary 11, 2016, the Supreme Court entered
orders granting the petitions and vacating
and vemanding the Narayan cases: “The
judgment is vacated, and the case is remand-
ed to the Supreme Court of Hawaii for fur-
ther consideration in light of DIRECTV, Ine.
v. Imburgia, [ — U.S. —, 186 S.Ct. 463],
198 L,Ed.2d 865 (2015).”

On remand, both parties filed supplemen-
tal briefs addressing the impact of Imburgia
on the Narayan cases.

C. The Imburgia Decision

The Imburgia lawsuit arose in 2008, when
the plaintiffs, DIRECTV customers, chal-
lenged DIRECTY’s early termination fees on
the grounds that the fees violated California
law. 186 S.Ct. at 466, The service contract
between the plaintiffs and DIRECTV includ-
ed a binding arbitration provision and class
action waiver, Id, The contract also provided
that “if the ‘law of your state’ makes the
waiver of class arbitration unenforceable,
then the entire arbitration provision ‘4s unen-
foreeable” ” Id,

Prior to 2011, the class arbitration waiver
clause was unenforceable under California
law pursuant to the California Supreme
Court’s decision in Discover Bank y. Superior
Court, 36 Cal.4th 148, 30 Cal.Rptr.3d 76, 113
P.8d 1100 (2005), In Discover Bank, the Cali-
fornia Supreme Court held that a waiver of
class arbitration in a consumer contract of
adhesion was unconscionable under Califor-
nia law and should not be enforced, Id., 30
Cal.Rptr.3d 76, 113 P.3d at 1110. However, in
AT&T Mobility LLC v. Concepcion, 563 U.S.
388, 352, 181 S.Ct. 1740, 179 L.Ed.2d 742
(2011), the Supreme Court held that the Dis-
cover Bank rule “stands as an obstacle to the
accomplishment and execution of the full pur-
poses and objectives of Congress” and that
the Federal Arbitration Act (FAA) preempt-
ed and invalidated the rule. (Quoting Hines v.
Davidowitz, 812 U.S. 52, 67, 61 S.Ct. 399, 85
L.Ed, 581 (1941). Thus, after the 2011 Con-
cepeion decision, class arbitration waiver

349

clauses became enforceable under California
law.

Following the Supreme Court’s decision in
Concepcion, DIRECTV requested that the
matter be sent to arbitration pursuant to the
arbitration clause, Imburgia, 186 S.Ct. at 466.
The trial court denied that request and DI-
RECTV appealed. Id, The California Court
of Appeal referenced two sections of Califor-
nia’s Consumers Legal Remedies Act in hold-
ing that “the law of California would find the
class action waiver unenforceable.” Id. at 467.
The California Supreme Court denied discre-
tionary review and the Supreme Court ac-
cepted DIRECTV’s petition for writ of cer-
tiovari. Id. at 467-68.

The Supreme Court stated that the issue
before it was “whether the decision of the
California court places arbitration contracts
‘on equal footing with all other contracts,”
Id. at 468 (quoting Buckeye, 546 U.S. at 448,
126 §.Ct. 1204), The Supreme Court conclud-
ed that “California courts would not interpret
contracts other than arbitration contracts the
same way” and offered six bases for this
conclusion. Id. at 469. Of relevance to this
case, the Supreme Court determined that
“nothing in the Court of Appeal’s reasoning
suggests that a California court would reach
the same interpretation of ‘law of your state’
in any context other than arbitration” and
that “the language used by the Court of
Appeal focused only on arbitration.” Id. at
469-70, Specifically, the Supreme Court not-
ed that “[flraming the question in [arbitra-
tion terms], rather than in generally applica-
ble terms, suggests that the Court of Appeal
could well have meant that its holding was
limited to the specific subject matter of this
contract—arbitration.” Id. at 470.

Given these considerations, the Supreme
Court concluded that “California’s interpreta-
tion of the phrase ‘aw of your state’ does not
place arbitration contracts ‘on equal footing
with all other contracts.’” Id. at 471. As such,
the Supreme Court held that “the Court of
Appeal’s interpretation is preempted by the
Federal Arbitration Act.” Id.

Ill. DISCUSSION

The FAA states that “an agreement in
writing to submit to arbitration ... shall be

350 Le

valid, irrevocable, and enforceable, save upon
such grounds as exist at law or in equity for
the revocation of any contract.” Federal Ar-
bitration Act, 9 U.S.C, § 2 (2012).

HM The FAA “creates a body of feder-
al substantive law of arbitrability, enforce-
able in both state and federal courts and pre-
empting any state laws or policies to the
contrary.” Ticknor vy. Choice Hotels Inti],
Inc, 265 F.8d 931, 986 (9th Cir. 2001) (quot-
ing Cohen v. Wedbush, Noble, Cooke, Inc.,
841 F.2d 282, 285 (9th Cir, 1988)), “Despite
the ‘liberal federal policy favoring arbitration
agreements, ... state law is not entirely
displaced from federal arbitration analysis.”
Id, at 936-87 (quoting Green Tree Fin.
Corp.-Alabama y. Randolph, 581 U.S. 79, 81,
121 S.Ct, 518, 148 L.Ed.2d 878 (2000), “[Als
long as state law defenses concerning the
validity, revocability, and enforceability of
contracts are generally applied to all con-
tracts, and not limited to arbitration clauses,
federal courts may enforce them under the
FAA.” Id, at 987; see_also Concepcion, 563
US. at 889, 181 S.Ct. 1740 (“[Clourts must
place arbitration agreements on an equal
footing with other contracts ... and enforce
them according to their terms.”), Specifically,
arbitration agreements, like all other con-
tracts, “may be invalidated by ‘generally ap-
plicable contract defenses, such as fraud, du-
ress, or unconscionability” ” Rent-A-Center,
W., Inc. v. Jackson, 561 U.S. 68, 68, 180 S.Ct.
2772, 177 L.Ed.2d 408 (2010) (quoting Doc-
tor’s Assocs., Inc. vy. Casarotto, 517 U.S. 681,
687, 116 S.Ct. 1652, 184 L.Hd.2d 902 (1996)).

A. Uneonscionability

HM Under Hawar'i law, unconscionabili-
ty is recognized as a general contract de-
fense:

Unconscionability has generally been rec-

ognized to include an absence of meaning-

ful choice on the part of one of the parties
together with contract terms which are
unreasonably favorable to the other party.

Whether a meaningful choice is present in

a particular case can only be determined
5. Generally, both procedural and substantive un-

conscionability must be present in order to make
a contract unconscionable; however, Hawai'i

by consideration of all the circumstances

surrounding the transaction.
City & Cty, of Honolulu v, Midkiff, 62 Haw.
411, 418, 616 P.2d 218, 218 (1980) (quoting
Williams v. Walker-Thomas Furniture Co.,
850 F.2d 445, 449 (D.C. Cir. 1965)); see also
Lewis v. Lewis, 69 Haw. 497, 501, 748 P.2d
1862, 1866 (1988) (“The basic test is whether
.+. the clauses involved are so one-sided as
to be unconscionable under the circum-
stances existing at the time of the making of
the contract... The principle is one of the
prevention of oppression and unfair surprise

Es

In Midkiff, this court considered whether a
general issue of material fact existed as to
whether a condemnation clause in a lease
was unconscionable. 62 Haw. at 416-17, 616
P.2d at 217. In analyzing the facts of the case
under the doctrine of unconscionability, this
court observed that the lease was a standard
pre-printed form, which “may indicate that
there was no arms-length bargaining be-
tween the two parties.” Id. at 417, 616 P.2d
at 218, Additionally, this court noted that
there could have been a disparity in bargain-
ing power that left the petitioner in a “take-
it-or-leave-it position regarding the lease.”
Id, at 418, 616 P.2d at 218. As such, this
court concluded that the petitioner did raise
a genuine issue of material fact and remand-
ed the case to the trial court to hold a
hearing on the issue of the unconscionability
of the condemnation clause. Id,

Recent Hawai'i decisions have defined un-
conscionability more specifically by articulat-
ing two principles that make up the doctrine:
“Unconscionability encompasses two princi-
ples: one-sidedness and unfair surprise.” Bal-
ogh v. Balogh, 184 Hawai'i 29, 41, 382 P.3d
681, 648 (2014); see also Lewis, 69 Haw. at
502, 748 P.2d at 1866 (“It is apparent that
two basie principles are encompassed within
the concept of unconscionability, one-sided-
ness and unfair surprise.”),

HM These principles are also character-
ized as procedural and substantive uncon-
scionability.> See Balogh, 184 Hawai'i at 41,

courts “have recognized that, under certain cir-
cumstances, an impermissibly one-sided agree-
ment may be unconscionable even if there is no

382 P.3d at 648, Procedural unconscionabili-
ty, or unfair surprise, focuses on the “process
by which the allegedly offensive terms found
their way into the agreement.” 7 Joseph M.
Perillo, Corbin on Contracts § 29.1 (Rev. ed.
2002). Substantive unconscionability, in con-
trast, focuses on the content of the agree-
ment and whether the terms are one-sided,
oppressive, or “unjustly disproportionate.”
Balogh, 184 Hawai'i at 41, 382 P.8d at 648;
Perillo, supra, § 29.1.

Thus, under the common law of Hawai'i,
unconscionability is a generally applicable
contract defense. We turn now to analyzing
the facts of the case under this doctrine.

1, Procedural Unconscionability

HM Procedural unconscionability “re-
quires an examination of the contract forma-
tion process and the alleged lack of meaning-
ful choice.” Gillman_v, Chase Manhattan
Bank, N.A, 78 N.Y.2d 1, 587 N.Y.S.2d 787,
584 N.H.2d 824, 828 (1988). Courts consider
such factors as “whether deceptive or high-
pressured tactics were employed, the use of
fine print in the contract, the experience and
education of the party claiming unconsciona-
bility, and whether there was disparity in
bargaining power” between the parties. Id;
see also Perillo, supra, § 29.4 (noting that
the following elements factor into a determi-
nation of procedural unconscionability: supe-
rior bargaining power, lack of meaningful
choice for the weaker party, form contracts
that are “heavily weighted in favor of one
party and offered on a take it or leave it
basis,” and where “freedom of contract is
exploited by a stronger party”).

HE Procedural unconscionability of-
ten takes the form of adhesion contracts,
where a form contract is created by the
stronger of the contracting parties, and the
terms “unexpectedly or unconscionably limit.
the obligations and liability of the weaker
party.” Nacino v. Koller, 101 Hawai'i 466,
478, 71 P.8d 417, 424 (2008) (quoting Leong

unfair surprise.” Balogh, 134 Hawai'i at 41, 332
P.3d at 643, Such an analysis is not necessary in
this case because the arbitration clause is both
procedurally and substantively unconscionable.

351

y. Kaiser Found. Hosp., 71 Haw. 240, 247,
788 P.2d 164, 168 (1990)). Although adhesion

contracts are not unconscionable per se, they
are defined by a lack of meaningful choice
and, thus, often satisfy the procedural ele-
ment of unconscionability.

HH in this case, the contracting process
for the arbitration clause exhibits elements of
procedural unconscionability. The party with
the superior bargaining strength, the Defen-
dants, not only drafted the arbitration clause
found in the declaration, but they also re-
corded the declaration in the Bureau of Con-
veyances prior to the execution of the pur-
chase agreements, The Homeowners were
required to conform to the terms of the
declaration as recorded if they wanted to
purchase a Ritz-Carlton condominium on
Maui. Thus, the declaration is adhesive in the
sense that it was “created by the stronger of
the contracting parties” on a “take-it-or-
leave-it” basis. Nacino, 101 Hawai'i at 478, '71
P.8d at 424; Midkiff, 62 Haw. at 418, 616 P.2d
at 218 (noting that a “disparity in bargaining
position” and a “take-it-or-leave-it” position
are factors in determining whether a contract.
is unconscionable),

In addition to the inequality of bargaining
power described above,’ there is an element
of unfair surprise in that the arbitration
clause is buried at the end of the declaration
and is ambiguous when read in conjunction
with the other controlling documents, includ-
ing the purchase agreement and the public
report. For instance, the arbitration clause is
on page thirty-four of the thirty-six page
declaration and provides that, if a dispute
eannot be resolved through negotiation or
mediation, “the dispute shall be resolved by
arbitration,” (Emphasis added.) In contrast,
the purchase agreement does not provide for
mandatory arbitration but instead contains:
1) a waiver of jury trial clause, which states
that the parties “expressly waive their re-
spective rights to a jury trial on any claim or
cause of action that is based upon or arising
out of this Purchase Agreement” and that

6. This court has noted that “inequality of bar-
gaining power, in and of itself, does not trans-
form an agreement to arbitrate ... into an unen-
forceable contract of adhesion.” Brown v. KFC
Nat'l Mgmt. Co., 82 Hawai'i 226, 248 n.27, 921
P.2d 146, 168 n.27 (1996),

352

“fyJenue for any cause of action brought by
Purchaser hereunder shall be in the Second
Cireuit Court, State of Hawaii,” and 2) an
attorneys’ fees clause, which provides for
fees as a result of “any legal or other pro-
ceeding.” Similarly, the public report pro-
vides that “[tJhe provisions of [the controlling
documents, including the declaration] are in-
tended to be, and in most cases are, enforce-
able in a court of law.”

Thus, the controlling documents offer con-
flicting guidance on dispute resolution, with
the declaration mandating arbitration for the
parties, while the purchase agreement and
public report allow for disputes to be litigat-
ed through traditional legal proceedings.
Such ambiguity in the controlling documents
has the potential to confuse or mislead the
non-drafting parties, and deprives those par-
ties from a full and adequate understanding
of their rights under contract. See Balogh,
184 Hawai'i at 41, 382 P.3d at 643 (explaining
that, in the context of postmarital and sepa-
vation agreements, unfair surprise means
that “one party did not have full and ade-
quate knowledge of the other party’s finan-
cial condition when the ... agreement was
executed”),

For these reasons, we conclude that the
arbitration clause satisfies the procedural el-
ement of unconscionability.

2. Substantive Unconscionability

HE Substantive unconscionability fo-
cuses on the one-sidedness of the agreement.
Lewis, 69 Haw. at 502, 748 P.2d at 1366;
Balogh, 184 Hawai'i at 41, 332 P.8d at 643;
Earl M. Jorgensen Co. v. Mark Constr., Inc.,
56 Haw. 466, 474, 540 P.2d 978, 984 (1975);
see_also Gillman, 587 N.Y.S.2d 787, 584
N.E.2d at 829 (“This question entails an
analysis of the substance of the bargain to
determine whether the terms were unrea-
sonably favorable to the party against whom
unconscionability is urged.”). Here, the
Homeowners argue that the arbitration
clause is substantively unconscionable be-
cause it eliminates rights to punitive, exem-
plary, and consequential damages, precludes

7. We do not decide whether the contractually
shortened limitations period is unconscionable
because there has been no assertion that the

discovery, imposes a confidentiality require-
ment, and imposes a one-year statute of limi-
tations.’ We agree, and affirm our earlier
decision that portions of the arbitration
clause are substantively unconscionable.

a. Damages Provision

HE “Punitive or exemplary damages
aye generally defined as those damages as-
sessed in addition to compensatory damages
for the purpose of punishing the defendant
for aggravated or outrageous misconduct and
to deter the defendant and others from simi-
lar conduct in the future.” Masaki v. Gen.
Motors Corp., 71 Haw. 1, 6, 780 P.2d 566, 570
(1989). “Since the purpose of punitive dam-
ages is not compensation of the plaintiff but.
rather punishment and deterrence, such
damages are awarded only when the egre-
gious nature of the defendant’s conduct
makes such a remedy appropriate.” Id.
Courts often look to the intentional, deliber-
ate, and outrageous nature of the defendant's
actions when considering punitive damages.
Id.

Hs Hawai'i law disfavors limiting
damages for intentional and reckless conduct.
In Laeroe Waikiki Parkside, LLC v. K.S.K.
(Oahu) Ltd. Partnership, 115 Hawai'i 201,
224, 166 P.8d 961, 984 (2007), this court held
that a contract provision limiting tort liability
would violate public policy to the extent that
it attempted to waive liability for criminal
misconduct, fraud, or willful misconduct. Fur-
ther, we have acknowledged that “[elxculpa-
tory contracts are not favored by the law
because they tend to allow conduct below the
acceptable standard of care.” Fujimoto v. Au,
95 Hawai'i 116, 155, 19 P.8d 699, 788 (2001)
(quoting Yauger v. Skiing Enters., Inc. 206
Wis.2d 76, 557 N.W.2d 60, 62 (1996)). Such
provisions “are strictly construed against
parties relying on them” and will be held
void if the agreement is, inter alia, “gained
through inequality of bargaining power.” Id.
at 156, 19 P.3d at 739.

TE While not wholly exculpatory, the
damages provision at issue in this case simi-

Homeowners’ claims are barred by that provi-
sion.

larly limits liability because it restricts the
amount or type of recoverable damages.
When coupled with “inequality of bargaining
power,” such a limitation on liability will
likewise be unenforceable. See Lucier _v.
Williams, 366 N.J.Super. 485, 841 A.2d 907,
912 (2004) (concluding that a limitation of
liability provision was unconscionable be-
cause: 1) it was incorporated into a contract
of adhesion, 2) the parties had “grossly un-
equal bargaining status” and, 8) the limit on
recoverable damages allowed the drafting
party to avoid almost all responsibility for his
actions); Cook v. Pub. Storage, Inc. 314
Wis.2d 426, 761 N.W.2d 645, 668 (Wis. Ct.
App. 2008) (“With respect to punitive dam-
ages, we conclude the limitation of liability
clause is unenforceable because it is against
public policy. Punitive damages serve the
public policy purposes of punishing wrong-
doers and deterring others.”),

In this case, there is a damages provision
that was, as discussed in the previous section,
gained through inequality of bargaining pow-
er, Additionally, the provision prevents an
arbitrator from awarding “punitive, exempla-
ry, or consequential damages,” thereby
shielding a defendant from paying such dam-
ages to an aggrieved party, even upon a
showing of egregious or outrageous conduct
by the defendant. It would create an untena-
ble situation if parties of superior bargaining
strength could use adhesionary contracts to
insulate “aggravated or outrageous miscon-
duct” from the monetary remedies that are
designed to deter such conduct. Masaki, 71
Haw. at 6, 780 P.2d at 570. Under Hawai'i
law, such provisions, regardless of whether
they are found in arbitration agreements or
other contracts, are substantively uncon-
scionable.

b. Discovery Provision

HE Adequate discovery is necessary
to provide claimants “a fair opportunity to
present their claims.” Gilmer _v. Inter-
state/Johnson Lane Corp., 500 U.S. 20, 31,
111 S.Ct, 1647, 114 L.Ed.2d 26 (1991). In
Hawai'i, discovery rules “reflect a basic phi-
losophy that a party to a civil action should
be entitled to the disclosure of all relevant
information in the possession of another per-

353

son prior to trial, unless the information is
privileged.” Hac v. Univ. of Haw., 102 Ha-
wai'i 92, 100, 73 P.8d 46, 54 (2008) (quoting
Wakabayashi v. Hertz Corp., 66 Haw. 265,
275, 660 P.2d 1309, 1815 (1988)); see_also
Hawai'i Rules of Civil Procedure (HRCP)
Rule 26(b)(1)(A) (2015) (“Parties may obtain
discovery regarding any matter, not privi-
leged, which is relevant to the subject matter
involved in the pending action.”),

HM In the arbitration context, limita-
tions on discovery serve an important pur-
pose because “the underlying reason many
parties choose arbitration is the relative
speed, lower cost, and greater efficiency of
the process,” Kona Vill. Realty, Ine. v. Sun-
stone Realty Partners, XIV, LLC, 123 Ha-
wai'i 476, 477, 236 P.8d 456, 457 (2010). As
such, limitations on discovery may be en-
forceable in the arbitral forum, so long as
they are reasonable and do not hinder a
party’s ability to prove or defend a claim. See
Hae, 102 Hawai'i at 100, 78 P.8d at 54 (noting
that Hawai'i law favors disclosure of all rele-
vant, unprivileged information); Gilmer, 500
US. at 31, 111 S.Ct. 1647 (determining that
the discovery allowed in the arbitration pro-
ceeding—document production, information
requests, depositions, and subpoenas—was
sufficient to allow plaintiff “a fair opportunity
to present [his] claims”).

In the current case, the discovery provi-
sion in the arbitration clause provides:

The arbitrator may order the parties to

exchange copies of nonrebuttable exhibits

and copies of witness lists in advance of
the arbitration hearing. However, the arbi-
trator shall have no other power to order
discovery or depositions unless and then
only to the extent that all parties otherwise
agree in writing,

For two reasons, this provision is unenforee-

able.

First, the discovery provision places severe
limitations on the disclosure of relevant infor-
mation and hinders the Homeowners’ ability
to prove their claims, Except for “nonrebutt-
able” exhibits and witness lists, the Home-
owners are hindered in their ability from
discovering potentially relevant information
for their claims against the Defendants. This

354

restriction runs in direct contravention to
Hawaii’s “basic philosophy” that a party is
entitled to all relevant, unprivileged informa-
tion pertaining to the subject matter of the
action, Hac, 102 Hawai'i at 100, 73 P.3d at 54.
On this basis alone, we hold the discovery
provision unconscionable,

Second, the discovery provision violates
parts of Hawaii Revised Statutes (HRS)
§ 658A, which grant an arbitrator considera-
ble discretion in permitting discovery. Specif-
ically, HRS § 6584-17 (Supp. 2001) provides:

(a) An arbitrator may issue _a subpoena
for the attendance of a witness and for the
production of records and other evidence
at any hearing and may administer oaths,
A subpoena shall be served in the manner
for service of subpoenas in a civil action
and, upon motion to the court by a party to
the arbitration proceeding or the arbitra-
tor, enforced in the manner for enforce-
ment of subpoenas in a civil action.

(b) In order to make the proceedings fair,

expeditious, and cost effective, upon re-

quest_of a party to or_a witness in an
arbitration proceeding, an arbitrator may
permit _a deposition of any witness to be
taken for use as evidence at the hearing,
including a witness who cannot be subpoe-
naed for or is unable to attend a hearing.

The arbitrator shall determine the condi-

tions under which the deposition is taken,
(Emphases added.) Pursuant to HRS
§ 658A-4(b)(1) (Supp. 2001),8 the above sub-
sections of HRS § 658A-17 cannot be waived
by parties to an arbitration agreement, As
such, the discovery provision, which waives
the requirements of HRS § 658A-17, violates
HRS § 658A-4(b)(1). Additionally, the discov-
ery provision undermines the discretion gen-
erally afforded arbitrators. See HRS § 658A-
17(c) (‘An arbitrator may permit such discov-
ery as the arbitrator decides is appropriate
in the circumstances, taking into account the
needs of the parties to the arbitration pro-
ceeding and other affected persons and the
desirability of making the proceeding fair,
expeditious, and cost effective.”)

8, HRS § 658A-4(b)(1) provides: “(b) Before a
controversy arises that is subject to an agreement
to arbitrate, a party to the agreement shall not:

1) Waive or agree to vary the effect of the

Although specific to arbitration, the refer-
enced sections of HRS § 658A-17 reflect
Hawaii's “basic philosophy” on discovery,
and mirror similar provisions found in the
Hawai'i Rules of Civil Procedure. See
HRCP Rule 45 (2015) (allowing courts to
issue subpoenas for the attendance of wit-
nesses, production of documentary evidence,
and taking of depositions); HRCP Rule 26
(2015) (allowing parties to obtain discovery
of relevant information through a variety of
methods). As such, the discovery provision is
at odds with Hawaii’s long-standing legal
precedent of allowing parties to access rele-
vant information for their claims, Such an
unreasonable limitation on discovery, in ei-
ther a litigation or an arbitration context, is
substantively unconscionable under Hawai'i
law.

e, Confidentiality Provision

THE As is the case with discovery limita-
tions, confidentiality provisions are not per se
substantively unconscionable. However,
where an agreement contains severe limita-
tions on discovery alongside a confidentiality
provision, the plaintiff may be deprived of
the ability to adequately discover material
information about his or her claim, See Ting
y. AT&T, 819 F.8d 1126, 1151 (9th Cir, 2008)
(“Although facially neutral, confidentiality
provisions usually favor companies over indi-
viduals. ... [Blecause companies continually
arbitrate the same claims, the arbitration
process tends to favor the company.”); Zuver
vy, Airtouch Comme'ns, Inc,, 158 Wash.2d 293,
108 P.8d 758, 765 (2004) (“As written, the
[confidentiality] provision hampers an em-
ployee’s ability to prove a pattern of discrimi-
nation or to take advantage of findings in
past arbitrations. Moreover, keeping past
findings secret undermines an employee’s
confidence in the fairness and honesty of the
arbitration process.”),

In Hawai'i Medical Ass’n vy. Hawai'i Medi-
eal Service Ass’n, 118 Hawai'i 77, 94, 148
P.8d 1179, 1196 (2006), this court recognized.
that non-drafting parties to arbitration

requirements of section 658A-5(a), 658A-6(a),

658A-8, 658A-17(a), 658A-17(b), 658-26, or
658A-28." (Emphases added.)

agreements are sometimes confronted with
unfair limitations, and noted that the arbitra-
tion agreement at issue prevented the non-
drafting party from “placing evidence of
broad-based, systemic wrongs before an in-
ternal review panel.” This court concluded
that such one-sided restrictions foreclosed
parties from adequately pursuing their
claims and therefore could not be upheld. Id.

The confidentiality provision in the current,
case provides: “Neither a party, witness, or
the arbitrator may disclose the facts of the
underlying dispute or the contents or results
of any negotiation, mediation, or arbitration
hereunder without prior written consent of
all parties,”

Similar to Haw. Med. Ass’n, the confiden-
tiality provision at issue here, especially
when read in conjunction with the discovery
provision, impairs the Homeowners’ ability to
investigate and pursue their claims. If the
confidentiality and discovery provisions in
this case were enforced as written, the
Homeowners would only be able to obtain
discovery by consent and would be prevented
from discussing their claims with other po-
tential plaintiffs because the confidentiality
provision would make them unable to “dis-
close the facts of the underlying dispute.”
See Pokorny v. Quixtar, Ine. 601 F.3d 987,
1002 (9th Cir. 2010) (“The confidentiality pro-
vision in this case ... unfairly favors Quixtar
because it prevents Plaintiffs from discussing
their claims with other potential plaintiffs
and from discovering relevant precedent to
support their claims.”)

In addition to detrimentally affecting the
Homeowners’ ability to investigate their
claims, the confidentiality provision insulates
the Defendants from potential liability. See

9, Because we conclude that the arbitration
clause is unconscionable, it is unnecessary for us
to address whether ambiguity existed as to the
intent to arbitrate, as we did in Narayan I.

10, The Restatement (Second) of Contracts § 208
(Am, Law Inst, 1981) offers similar guidance on.
unconscionable contracts:

Ifa contract or term thereof is unconscionable
at the time the contract is made a court may
refuse to enforce the contract, or may enforce
the remainder of the contract without the un-
conscionable term, or may so limit the applica-

355

Ting, 319 F.3d at 1152 (noting that, through
a confidentiality provision, AT&T “placed it-
self in a far superior legal posture by ensur-
ing that none of its potential opponents have
access to precedent while, at the same time,
AT&T accumulates a wealth of knowledge on
how to negotiate the terms of its own unilat-
erally crafted contract” and that, further-
more, “the unavailability of arbitral decisions
may prevent potential plaintiffs from obtain-
ing the information needed to build a case of
intentional misconduct or unlawful discrimi-
nation against AT&T”). We therefore hold
that the confidentiality provision of the arbi-
tration clause is substantively unconscionable
because it impairs the Homeowners’ ability
to investigate and pursue their claims,

In sum, we affirm, on state contract
grounds, that the arbitration clause is both
procedurally and substantively unconsciona-
ble?

3. Severability of Unconscionable Pro-
visions

The Defendants argue that, if this court
determines that certain provisions in the ar-
bitration agreement are unconscionable,
those provisions should be severed from the
arbitration clause and the rest of the arbitra-
tion clause should be enforced.

HM [The general rule is that severance
of an illegal provision of a contract is war-
ranted and the lawful portion of the agree-
ment is enforceable when the illegal provi-
sion is not central to the parties’ agreement,”
Beneficial Haw., Inc, v. Kida, 96 Hawai'i 289,
811, 80 P.8d 895, 917 (2001). However, where
unconscionability so pervades the agreement,
the court may refuse to enforce the agree-
ment as a whole. See Gandee v, LDL Free-

tion of any unconscionable term as to avoid

any unconscionable result,
Likewise, but in the commercial context, HRS
490:2-302(1) (2008) provides, “[i]f the court as a
matter of law finds the contract or any clause of
the contract to have been unconscionable at the
time it was made the court may refuse to enforce
the contract ...” See also Unif, Commercial
Code § 2-302 cmt. 21A U,L.A, 156 (2012) (“[TJhe
court, in its discretion, may refuse to enforce the
contract _as_a_whole if it is permeated by the
unconscionability, or it may strike any single
clause or group of clauses which are so tainted

356

dom Enters., Inc,, 176 Wash.2d 598, 298 P.8d
1197, 1199-1200 (2013) (“Severance is the
usual remedy for substantively unconsciona-
ble terms, but where such terms ‘pervade’ an
arbitration agreement, we ‘refuse to sever
those provisions and declare the entire
agreement void.” (quoting Adler v. Fred
Lind Manor, 158 Wash.2d 331, 103 P.8d 773,
788 (2004))); Cordova v. World Fin. Corp.,
146 N.M. 256, 208 P.3d 901, 911 (2009) “(We
must strike down the arbitration clause in its
entirety to avoid a type of judicial surgery
that inevitably would remove provisions that
were central to the original mechanisms for
resolving disputes between the parties.”).

Here, unconscionability so pervades the
arbitration clause that it is unenforceable. As
a starting point, the arbitration clause is part
of an adhesion contract whose terms were
unilaterally determined by the stronger con-
tracting party, and are ambiguous when read
together with the other controlling docu-
ments. On a substantive level, the arbitration
clause places a limitation on damages that
would enable the Defendants to curtail liabili-
ty for even the most outrageous and inten-
tionally harmful conduct. The clause also hin-
ders the Homeowners’ ability to pursue their
claims through extreme discovery and confi-
dentiality limitations. As written, the arbitra-
tion clause goes beyond designating a forum
for dispute resolution by depriving the
Homeowners of a meaningful ability to assert
rights that they might legitimately hold. Be-
cause unconscionability so pervades the arbi-
tration clause, it is unenforceable.

4. Unconscionability in Other Jurisdic-
tions

Other state jurisdictions have also invali-
dated arbitration clauses on general contract
unconscionability grounds. For instance, in
Brewer v. Missouri Title Loans, 364 8.W.3d
486 (Mo. 2012), the Supreme Court of Mis-
souri, on remand from the Supreme Court of
the United States, affirmed that the arbitra-
tion agreement at issue was unconscionable.
Brewer borrowed $2,215 from the title com-
pany, which charged an annual percentage
rate on the loan of 300 percent. Id, at 487.
The agreement between the parties provided

or which are contrary to the essential purpose of

that Brewer must resolve any claim against
the title company through arbitration, but
that the title company could enforce its right
to repossess the collateral through the
courts. Id. Additionally, no customer of the
title company had ever successfully renegoti-
ated the terms of the contract. Id.

When Brewer filed a class action petition
against the title company alleging violations
of state statutes, the title company filed a
motion to compel arbitration and argued that
the arbitration agreement included a class
arbitration waiver. Id. at 488. The trial court
found the class arbitration waiver uncon-
scionable and unenforceable and, on appeal,
the Supreme Court of Missouri agreed, hold-
ing that the class arbitration waiver was
unconscionable and striking the arbitration
agreement in its entirety. Id.

The Supreme Court granted the title com-
pany’s petition, and vacated and remanded
Brewer to the Supreme Court of Missouri for
further consideration in light of Concepcion.
Id.

On remand, instead of focusing on the
enforceability of the class arbitration waiver,
the Missouri court looked to “whether the
arbitration agreement as a whole is uncon-
scionable,” Id, at 492, The Missouri court
explained that “[t]he purpose of the uncon-
scionability doctrine is to guard against one-
sided contracts, oppression and unfair sur-
prise” and that “unconscionability is linked
inextricably with the process of contract for-
mation because it is at formation that a party
is required to agree to the objectively unrea-
sonable terms.” Id, at 492-93.

The Missouri court then applied the doc-
trine to the facts of the case:

The evidence in this case supports a
determination that the agreement’s arbi-
tration clause is unconscionable. There was
evidence that the entire agreement—in-
cluding the arbitration clause—was non-
negotiable and was difficult for the average
consumer to understand and that the title
company was in a superior bargaining po-
sition, Brewer could not negotiate the
terms of the agreement, including the
terms of the arbitration clause. Indeed, the

(emphasis added).

the agreement ...

evidence further demonstrated that no

consumer ever successfully had renegotiat-

ed the terms of the title company’s arbitra-

tion contract.
Id. at 493. The court also noted that the
terms of the agreement were “extremely
one-sided,” and that the terms made it un-
likely that a consumer like Brewer “could
retain counsel to pursue individual claims.”
Id, at 498-94, The Missouri court determined
that this “disparity in bargaining power,”
coupled with the “disparity between Brewer's
remedial options and the title company’s re-
medial options,” was “strong evidence that
the agreement [was] unconscionable.” Id. at
495, As such, the Missouri court held that the
entire arbitration clause within the agree-
ment was unconscionable and unenforceable.
Id. at 496. The title company subsequently
appealed this decision to the Supreme Court,
which declined review of the case the second
time. See Mo. Title Loans, Inc, v. Brewer,
568 U.S. 822, 188 S.Ct. 191, 184 L.Ed.2d 88
(2012),

Similarly, in Brown v. Genesis Healthcare
Corp., 229 W.Va. 382, 729 S.H.2d 217 2012),
the Supreme Court of Appeals of West Virgi-
nia, on remand from the Supreme Court of
the United States, also considered if its earli-
er ruling invalidating the arbitration clause
could be upheld under the doctrine of uncon-
scionability. In Brown, three lawsuits arose
from a nursing home’s attempt to compel
plaintiffs to participate in arbitration pursu-
ant to a clause in the nursing home admis-
sion contract, Id, at 222. In two of the three
cases, the West Virginia court ruled that the
arbitration clauses were unconscionable. Id.
Additionally, the court determined that the
FAA could not be applied to personal injury
or wrongful death actions. Id.

On certiorari, the Supreme Court reversed
the West Virginia opinion on the grounds
that the FAA requires courts to enforce arbi-
tration agreements, with no exception for
personal injury or wrongful death claims.
Marmet Health Care Ctr., Inc. v. Brown, 565
US. 580, 532-88, 182 S.Ct, 1201, 182 L.Ed.2d
42 (2012). The Supreme Court noted that, on
remand, the West Virginia court must deter-
mine whether the arbitration clauses were
unenforceable under “state common law prin-

357
ciples that are not specific to arbitration and

preempted by the F,
1201.

” Id, at 584, 182 S.Ct.

On remand, the West Virginia court deter-
mined that the Supreme Court’s decision did
not alter their ultimate decision regarding
unconscionability because the “doctrine of
unconscionability that we explicated in
Brown I is a general, state, common-law,
contract-law principle that is not specifie to
arbitration, and does not implicate the FAA.”
Brown, 729 §.H.2d at 228. Ultimately, the
West Virginia court determined that further
development of the factual record regarding
unconscionability was proper, and reversed
the circuit court’s prior orders and remanded
for further proceedings on that issue. Id. at
229-30,

Thus, on remand from the Supreme Court,
both Missouri and West Virginia determined
that the unconscionability doctrine, as rooted
in state, common-law contract principles, was
a proper method for invalidating arbitration
agreements. Likewise, we hold that, under
the specific facts of this case, the arbitration
clause was unconscionable pursuant to well-
established Hawai'i contract law.

Iv. CONCLUSION

For the foregoing reasons, we affirm our
earlier decision in Narayan vy. Ritz-Carlton
Development Co., 185 Hawai'i 827, 350 P.8d
995 (2015), on the grounds that the arbitra-
tion clause is unconscionable under common
law contract principles. As such, the ICA’s
October 28, 2018 judgment on appeal is va-
cated and the circuit court’s August 28, 2012
order denying the Defendants’ motion to
compel arbitration is affirmed. This case is
remanded to the circuit court for further
proceedings consistent with this opinion.

358 |

400 P.3d 559

The BANK OF NEW YORK MELLON
FKA The Bank of New York, Not in its
Individual Capacity but solely as Trus-
tee for the Benefit of The Certificate
Holders of the CWMBS 2006-10 Trust,
Mortgage Pass through Certificates,
Series 2006-10, Respondent/Plaintiff-Ap-
pellee,

Y

R. ONAGA, INC., a Hawai‘i corporation,
Respondent/Defendant-Appellant,

and

Robert Nisperos Marquez; Marlyn Mi-
randa Marquez; Mortgage Electronic
Registrations Systems, Inc. solely as
nominee for Castle & Cooke Mortgage,
LLC, a Hawai'i corporation; Depart-
ment of Taxation, State of Hawai‘i;
United States of America, Department
of the Treasury, Internal Revenue Ser-
vice, Respondents/Defendants-Appellees,

and

Lyle Anthony Ferrara and Linda Susan
Ferrara, Petitioners/Intervenors.
(Civil No, 1-1-2095)

R. Onaga, Inc., a Hawai‘i corporation,
Respondent/Defendant-Appellant,
ve
Robert Nisperos Marquez; Marlyn Mi-

vanda Marquez; Bank of New York Mel-
lon, Trustee; Mortgage Electronic Regis-
trations Systems, Inc; Department of
Taxation, State of Hawai‘i; Internal
Revenue Service, Department of the
Treasury, U.S.A, Respondents/Defen-
dants-Appellees.,

and

Lyle Anthony Ferrara and Linda Susan
Ferrara, Petitioners/Intervenors.
(Civil No, 12-1-1758)

SCWC-14-0000426
Supreme Court of Hawai‘.
AUGUST 8, 2017

Richard Naiwieha Wurdeman for petition-

ers,

360

Lloyd Y. Asato, Honolulu, for respondent,
R. Onaga, Ine.

RECKTENWALD, C.J., NAKAYAMA,
POLLACK, AND WILSON, JJ., AND
CIRCUIT JUDGE KIM, IN PLACE OF
McKENNA, J., RECUSED

OPINION OF THE COURT BY
RECKTENWALD, C.J.

This case requires us to determine wheth-
er an appeal of an order confirming sale is
moot when the appellant does not post a
supersedeas bond to obtain a stay of the
proceedings prior to the sale of the property
to a bona fide purchaser. We answer this
question in the affirmative. In doing so, we
adopt the general rule stated by the Interme-
diate Court of Appeals (ICA) in City Bank v.
Saje Ventures II that “the right of a good
faith purchaser to receive property acquired
at a judicial sale cannot be affected by the
reversal of an order ratifying the sale where
a supersedeas bond has not been filed.” 7
Haw, App. 180, 198, 748 P.2d 812, 814 (1988)
(internal brackets, quotation marks, and cita-
tion omitted).

This case arises from the foreclosure sale
of a house (the Property) once owned by
Robert Nisperos Marquez and Marlyn Mi-
randa Marquez (the Marquezes). R. Onaga,
Ine, (Onaga) and The Bank of New York
Mellon FKA the Bank of New York (BONY)
each initiated foreclosure proceedings against
the Marquezes. Both claimed to have a first
priority lien and requested foreclosure and
sale of the Property. The Cireuit Court of the
First Cireuit (cireuit court) granted summary
judgment in favor of BONY, finding that
BONY had a first priority lien.1 Onaga then
filed a motion to stay BONY’s foreclosure
proceeding, and the circuit court ordered
Onaga to post a supersedeas bond in order to
stay the proceedings. Onaga did not post a
bond, Meanwhile, petitioners Lyle Anthony
Ferrara and Linda Susan Ferrara (the Fer-
raras) were the highest bidder at the foreclo-
sure sale, and the court issued judgment
confirming the sale.

Onaga initiated two separate appeals to
the ICA: the first challenged the court’s

1, The Honorable Edwin C. Nacino presided.

grant of summary judgment in favor of
BONY; the second, this appeal, challenged
the order confirming the foreclosure sale.
The ICA filed a summary disposition order in
the first appeal, vacating the circuit court’s
grant of summary judgment.

The Ferraras intervened in this appeal and
moved to dismiss. They argued that this ap-
peal was moot because the sale of the Prop-
erty cannot be undone, even if the ICA were
to vacate the order confirming foreclosure. .
The ICA denied the Ferraras’ motion, noting
that Hawaii Revised Statutes (HRS) § 501-
118 (Supp. 1998) provides, “In case of fore-
closure by action, a certified copy of the final
judgment of the court confirming the sale
may be filed or recorded ... after the time
for appealing therefrom has expired and the
purchaser shall thereupon be entitled to the
entry of a new certificate.” (Emphasis add-
ed.) Thus, the ICA reasoned that Onaga’s
appeal was not moot because it was pending
at the time the certificate of title was issued
to the Ferraras. Accordingly, the ICA vacat-
ed the circuit court's judgment confirming
the sale.

The Ferraras’ application presents the fol-
lowing question: “Whether the ICA gravely
erred when it denied the Petitioners’ motions
to dismiss the appeal on mootness grounds.”

The application of HRS § 501-118 in judi-
cial foreclosures is a question of first impres-
sion before this court. Under Hawai'i Rules
of Civil Procedure (HRCP) Rule 62(d), an
appellant may obtain a stay by posting a
supersedeas bond, and Hawai'i case law es-
tablishes that a certificate of title has conclu-
sive effect on the question of title to land.
Because Onaga failed to post a supersedeas
bond as required by the circuit court, its
appeal of the foreclosure proceeding is moot
in light of the Ferraras’ certificate of title. In
reaching that conclusion, we reject the ICA’s
interpretation of HRS § 501-118 as providing
that a bona fide purchaser must wait until an
appeal is resolved before it can obtain a
certificate of title.

We therefore reverse the ICA’s July 20,
2016 judgment on appeal, and affirm the
circuit court's February 21, 2014 judgment

confirming the sale of the Property to the
Ferraras.

I, Background
A, Circuit Court Proceedings

BONY filed a complaint for mortgage fore-
closure in cireuit court on September 13,
2011, naming, among others, the Marquezes
and Onaga as defendants. BONY attached (1)
a promissory note in the amount of $720,400
and (2) a mortgage on the Property recorded
in Land Court on February 21, 2006; both
documents were executed by the Marquezes.
BONY asserted that it was assigned the
mortgage and note pursuant to an assign-
ment of mortgage recorded in Office of the
Assistant Registrar of the Land Court (Land
Court) on March 31, 2011, BONY stated that
it was entitled to foreclose because the Mar-
quezes had failed to make their scheduled
payments.

In May 2012, Onaga filed a “Motion to
Dismiss and/or Motion for Summary Judg-
ment” against BONY. Onaga alleged that the
note attached to BONY’s complaint showed
that the last entity to hold the note was
Countrywide Home Loans, Inc., and nothing
indicated that Countrywide had transferred
its interest in the note to BONY. Thus, Ona-
ga argued that BONY had not demonstrated
that it was the current note holder and there-
fore could not enforce the Marquezes’ note
through a mortgage foreclosure,

BONY opposed Onaga’s motion, arguing
that “the Note was made payable to a bearer
and [BONY] is in possession of the Note.”
BONY asserted that its possession of the
note and the assignment of mortgage was
sufficient to establish that it is entitled to
foreclose on the mortgage, citing Ocwen Fed-
eral Bank, FSB v. Russell, 99 Hawaii 178,
184, 58 P.3d 812, 823 (2002).

Onaga subsequently filed a complaint for
mortgage foreclosure in circuit court (Civil
No. 12-1758-12). Onaga alleged that the Mar-
quezes “purchased the assets” of Onaga, and
executed and delivered a $75,000 promissory
note to Onaga on December 1, 2003. Onaga
also stated, “On November 26, 2008, [the
Marquezes and Onaga] executed a Real Es-
tate Mortgage and Financing Statement

361

which was secured on a condominium, then
owned by [the Marquezes] as additional pro-
tection for payment of the asset purchase
agreement and promissory note.”

According to the complaint, Onaga agreed
to release the mortgage on the condominium
so that the Marquezes could sell the condo-
minium and use the sale proceeds to pur-
chase the Property. In exchange, the Mar-
quezes agreed to “substitute the mortgage
from the condominium to the Property,” but
later “reneged on their promise.” The com-
plaint explained that Onaga sued the Mar-
quezes for specific performance, and the cir-
cuit court entered final judgment in favor of
Onaga in December 2007. The complaint then
stated that Onaga and the Marquezes execut-
ed a mortgage “to secure the asset purchase
agreement and promissory note entered ear-
lier in 2008,” Onaga stated that both the final
judgment and the mortgage were recorded in
the Land Court in March 2008. Onaga al-
leged that the Marquezes failed to make the
payments required under the asset purchase
agreement and therefore Onaga was entitled
to foreclose on the Property.

The BONY and Onaga foreclosure actions
were consolidated in November 2012,

BONY filed a “Motion for Summary Judg-
ment for Foreclosure Against All Defendants
and for Interlocutory Decree of Foreclo-
sure.” BONY noted that it was required to
prove the following facts to be entitled to
summary judgement: (1) the existence of an
agreement between the parties; (2) the terms
of the agreement; (8) default under the
agreement; and (4) notice. See Bank of Hono-
lulu v. Anderson, 8 Haw. App. 545, 551, 654
P.2d 1870, 1875 (1982) BONY attached (1) a
“Declaration of Indebtedness” by BONY’s
servicing agent for the loan, (2) the February
15, 2006 note and mortgage, (8) the March
81, 2011 assignment of mortgage, (4) docu-
ments related to the Marquezes’ loan default,
and (5) a declaration by BONY’s counsel.
BONY argued that these exhibits satisfied
the Bank of Honolulu requirements.

Onaga filed a cross motion for summary
judgment and for decree of foreclosure. Ona-
ga argued that it had a first priority lien on
the Property and that BONY had no interest

362

in the note, The circuit court denied Onaga’s
cross motion,

On July 5, 2018, the circuit court filed its
findings of fact (FOFs), conclusions of law
(COLs), and order granting BONY’s motion
for summary judgment for foreclosure
against all defendants and for an interlocu-
tory decree of foreclosure. The court deter-
mined that BONY was the owner of the note
and mortgage based on the March 81, 2011
assignment of mortgage. Thus, because the
Marquezes defaulted on their loan, the court
determined that BONY was entitled to fore-
close on the Property. With respect to Ona-
ga, the court found that it “may claim an
interest in the Property,” but that “{ilts in-
terest in the Property, if any, is junior to
[BONY’s] lien.” The court concluded that
there was no genuine issue of material fact
and granted summary judgment in favor of
BONY and an interlocutory decree of fore-
closure. The court filed its judgment on July
5, 2018,

On July 24, 2018, Onaga filed its first
notice of appeal (CAAP-18-2287), challenging
the circuit court’s order granting BONY’s
motion for summary judgment and denying
Onaga’s motion for summary judgment.

On August 8, 2018, the court filed amended
FOFs, COLs, and order appointing a com-
missioner. The court filed its amended judg-
ment on September 6, 2013.2

On October 29, 2018, Onaga filed a “Motion
for an Order to Stay Proceedings Without
Conditions or Bond.” Onaga argued that its
pending appeal “will decide which mortgagee,
[BONY] or R. Onaga has standing and priori-
ty in this consolidated judicial mortgage fore-
closure action.” (Emphases in original.) Ona-
ga requested a stay of the proceedings, since
“proceeds out of the foreclosure sale enforc-
ing the court’s judgment are to be paid to
mortgage lien creditors according to their
priority.”

2, On October 10, 2013, Onaga filed a ‘Motion
for an Order to Void Amended Judgment Filed
on September 6, 2013 and the Amended Notice
of Entry of Judgment Filed September 26, 2013.”
The motion attached a declaration of Onaga’s
counsel that argued that the September 6, 2013

judgment should be voided because it violated
HRCP Rule 59(e) and was entered without notice

The commissioner conducted a publie auc-
tion on November 5, 2018, where the Ferrar-
as were the high bidders. BONY filed a
“Motion for Order Confirming Foreclosure
Sale, Approving Commissioner’s Report, Al-
lowance of Commissioner’s Fees, Attorney’s
Fees, Costs, and Directing Conveyance.”

On January 17, 2014, the court granted
BONY’s motion, approving sale of the Prop-
erty to the Ferraras.

On February 10, 2014, Onaga filed its sec-
ond notice of appeal (CAAP-14-426)—the in-
stant appeal—challenging the circuit court’s
order confirming the foreclosure sale and the
order denying Onaga’s motion to void the
amended judgment.

On February 12, 2014, the court denied
Onaga’s October 29, 2018 motion to stay the
proceedings pending appeal, but stated that
“Defendant shall post a supersedeas bond in
order to obtain a Stay on the proceedings.” #
Onaga did not post a supersedeas bond. The
court filed its final judgment on February 21,
2014,

B. ICA Proceedings
In the instant appeal, Onaga argued that.
the cireuit court erred in three ways:
A. The circuit court erred in concluding
that it has subject matter jurisdiction in
the [BONY’s] judicial mortgage foreclo-
sure action based on the Assignment of
Mortgage registered in Land Court on
Mareh 81, 2011,
B. The cireuit court erred in granting
[BONY’s] motion for confirming foreclo-
sure sale pursuant to finding it has priority
among all mortgagees therein.
C. The cireuit court erred in denying R.
Onaga’s motion for stay of proceedings
without conditions or bond pending appeal
because the consolidated civil cases were
between two mortgagees and no money
judgments among them were involved.

to Onaga. The circuit court denied Onaga’s mo-
tion,

3, A supersedeas bond is a bond that “suspends a
judgment creditor's power to levy execution,
[usually] pending appeal.” Black's Law Dictio-
nary 1667 (10th ed. 2014),

On September 12, 2014, Onaga moved in
the ICA for the order confirming the foreclo-
sure sale to be stayed during the pendency of
this appeal. Specifically, it asked the ICA to
“enjoin all parties involved in the appeals,
including the buyers and assistant registrars
of the Land Court, from engaging in any
action dealing with the subject Property or
doing anything with the subject Property
that will alter in any way, the subject Prop-
erty title registration pending the resolution
of both appeals.”

On September 18, 2014, the ICA filed a
summary disposition order in CAAP-18-2287,
The ICA held that BONY’s “Declaration of
Indebtedness” attached to its motion for
summary judgment did not comply with
HRCP Rule 56(e).4 Thus, the ICA vacated
the circuit court’s order granting BONY’s
motion for summary judgment, and remand-
ed for further proceedings.

On September 19, 2014 the ICA granted
Onaga’s September 12, 2014 motion to stay
the circuit court’s order confirming the fore-
closure sale and directing conveyance, “[g]iv-
en the vacation of summary judgment in
favor of [Onaga.]”

On September 28, 2014, the Ferraras filed
a motion to intervene in the instant appeal.
The next day, they filed a motion to dismiss
the appeal. The Ferraras acknowledged that
the ICA in CAAP-18-2287 vacated the order
granting BONY’s motion for summary judg-
ment. However, the Ferraras noted that

4, HRCP 56(e) provides, in relevant part:

(©) Form of Affidavits; Further Testimony;
Defense Required. Supporting and opposing
affidavits shall be made on personal knowl-
edge, shall set forth such facts as would be
admissible in evidence, and shall show affirma-
tively that the affiant is competent to testify to
the matters stated therein, Sworn or certified
copies of all papers or parts thereof referred to
in an affidavit shall be attached thereto or
served therewith.

5. The ICA’s order states:

[HRS] § 501-82 (2014 Supp.) provides, in per-

tinent part:
(a) Every applicant receiving a certificate
of title in pursuance of a decree of registra-
tion, and every subsequent purchaser of reg-
istered land who takes a certificate of title
for value and in good faith, hold the same
free from all encumbrances except those not-
ed on the certificate in the order of priority

363

Onaga “failed to obtain a stay pending appeal
and failed to post a supersedeas bond pend-
ing appeal.”

The ICA granted the Ferraras’ motion to
intervene, but denied the Ferraras’ motion to
dismiss, The ICA permitted the Ferraras to
intervene for the limited purpose of “ad-
dressing whether the appeal is moot.” With
respect to the motion to dismiss, the ICA
cited HRS § 501-825 and stated that “the
Ferraras do not assert that a Certificate of
Title has been issued, and even if a Certifi-
cate of Title was issued, the Ferraras would
need to establish that there is no encum-
brance noted on such Certificate of Title
related to Appellant Onaga’s mortgage or his
claims on the [Plroperty.” Thus, the ICA
concluded that the Ferraras did not establish
that the appeal was moot.

The Ferraras filed a second motion to
dismiss on August 4, 2015, attaching (1) a
certificate of title issued on August 29, 2014,
@) the August 29, 2014 Commissioner’s
Deed, and (8) a mortgage executed by the
Ferraras and recorded in Land Court on
August 29, 2014. The Ferraras argued that
those documents “should resolve all of [t]he
issues” raised by the ICA’s order denying
the first motion to dismiss.

Onaga filed a memorandum in opposition,
arguing that the certificate of title attached
to the Ferraras’ motion was void. Onaga
alleged that, under HRS § 601-118," a certifi-

of recordation, and any of the following cn-
cumbrances which may be subsisting[.]
(Emphasis in ICA order.)

6. HRS § 501-118 (Foreclosure) (2006) provides,
in relevant part:

In case of foreclosure by action, a certified
copy of the final judgment of the court con-
firming the sale may be filed or recorded with
the assistant registrar or the deputy after the
time for appealing therefrom has expired and
the purchaser shall thereupon be entitled to
the entry of a new certificate.

. +++ Nothing in this chapter shall be construed
to prevent the mortgagor or other person in
interest from directly impeaching by action or
otherwise, any foreclosure proceedings affect-
ing registered land, prior to the entry of a new
certificate of title.

After a new certificate of title has been entered,
no judgment recovered on the mortgage note
for any balance due thereon shall operate to

ee

364 EE

cate of title cannot be filed while the final
judgment confirming the sale is pending on
appeal. Onaga argued that the Ferraras “are
obligated to follow the clear language and
procedure outlined in law to obtain a new
certificate of title of land registered in Land
Court after a judicial mortgage foreclosure
action has run its course in the appeal pro-
cess.” Onaga also argued that the Land
Court lacked jurisdiction to issue the August
29, 2014 certificate of title because the notice
of appeal was filed on February 10, 2014.

In a memorandum opinion, the ICA held
that Onaga’s appeal is not moot. Bank of
New York Mellon v. R. Onaga, Inc, CAAP-

12. The ICA further noted that the Ferraras
contended that they obtained a certificate of
title pursuant to HRS § 501-106(a)(1), but
that “it is questionable whether subsection
(1) governs in the case of a judicial foreclo-
sure in which case title does not pass by
voluntary means.” § Id, at 12. Thus, the ICA
concluded that the Ferraras “have not car-
ried their burden” to establish that the ap-
peal is moot. Id,

Regarding the merits of the appeal, the
ICA held that, because the foreclosure judg-
ment was vacated in CAAP-18-2297, the
judgment confirming sale must also be vacat-
ed. Id. at 12-18. The ICA also held that the

14-0000426, 2016 WL 3541188 (App. June 21,
2016) (mem.), The ICA took judicial notice of
the documents attached to the Ferraras’ mo-
tion. Id, at 9. It then distinguished this case
from City Bank because City Bank “did not
involve property registered in Land Court.”
Id. at 11. The ICA cited HRS § 501-887 and
stated that “we must consider that a certifi-
cate of title is given conclusive effect to all
matters stated in the certificate, except as
otherwise provided in HRS Chapter 501.” Id.
(emphasis in original).

The ICA noted that HRS § 601-118 ex-
pressly provides, “[iJn case of foreclosure by
action, a certified copy of the final judgment:
of the court confirming the sale may be filed
or recorded ... after the time for appealing
therefrom has expired and the purchase shall
thereupon be entitled to the entry of a new
certificate.” Id, Thus, the ICA determined
that “it is questionable whether the certifi-
cate of title submitted by the Ferraras is
conclusive in passing title to the Ferraras,”
since Onaga “is permitted the opportunity to
appeal the foreclosure by action.” Id. at 11-

open the foreclosure or affect the title to regis-
tered land.

7. HRS § 501-88 (Certificate as evidence) (2006)
provides:

‘The original certificate in the registration
book, and any copy thereof duly certified un-
der the signature of the registrar or assistant
registrar, and the seal of the court, shall be
received as evidence in all the courts of the
State and shall be conclusive as to all matters
contained therein, except as otherwise provid-
ed in this chapter.

circuit court did not err in denying Onaga’s
motion for stay of proceedings because Ona-
ga was required to a post a supersedeas bond
pursuant to HRCP Rule 62(d)° to obtain the
stay, and it did not do so. Id, at 12-14,

C. Application for Writ of Certiorari

In the application for writ of certiorari, the
Ferraras argue that “[tJhe general rule is
that the right of a good faith purchaser ‘to
receive property acquired at a judicial sale
cannot be affected by the reversal of an
order ratifying the sale where a [supersede-
as] bond has not been filed.” Further, they
assert that “[t]he sale of a subject property
to a good faith purchaser during the pen-
deney of an appeal renders a challenge to the
confirmation of a foreclosure sale moot as it
prevents the appellate court from granting
any effective relief.” (Citing Lathrop v. Saka-
tani, 111 Hawai'i 307, 314-15, 141 P.8d 480,
487-88 (2006)). The Ferraras argue that title
of the Property passed to them through the
filing of the August 29, 2014 Commissioner’s
Deed.

8, The Ferraras did not mention HRS § 501-106
in their second motion to dismniss, so it is unclear
what the ICA was referring to.

9. HRCP Rule 62(d) provides:

(@ Stay Upon Appeal. When an appeal is
taken the appellant by giving a supersedeas
bond may obtain a stay subject to the excep-
tions contained in subdivision (a) of this rule,
The bond may be given at or after the time of
filing the notice of appeal or of procuring the
order allowing the appeal, as the case may be.
The stay is effective when the supersedeas
bond is approved by the court,

The Ferraras also note that they attached
a certificate of title to their second motion to
dismiss in direct response to the reasoning in
the ICA’s order denying their first motion to
dismiss. The Ferraras assert that the ICA
nonetheless denied their second motion to
dismiss and disregarded Onaga’s failure to
post a supersedeas bond.

The Ferraras argue that the ICA misinter-
preted HRS § 501-118 and that a recording
of a judgment is not required under HRS
§ 501-1557 to transfer title. Rather “the fil-
ing of the Commissioner’s Deed gives effect
to the judgment and when recorded, as it had
been, shall have the full force and effect to
bind the land to be affected thereby.”

Lastly, the Ferraras argue that the ICA’s
opinion is inconsistent with its decisions in
City Bank, Cent. Pacific Bank y. Aikona
Maui_Props., CAAP-12-0001032, 2015 WL
6231719 (App. Nov. 29, 2018) (order), and DB
Private Wealth Mortg., Ltd. v. Bouley,
CAAP-14-0000585, 2016 WL 8548347 (App.
June 28, 2016) (SDO).

In response, Onaga argues that the certifi-
cate of title is void because “Petitioners’ fil-
ing of the commissioner’s deed and obtaining
a new certificate for the Property did not
comply with HRS § 501-118,” It contends
that the ICA’s interpretation of HRS § 501-
118 was consistent with Aames Funding
Corp. v. Mores, 107 Hawai'i 95, 101, 110 P.38d
1042, 1048 (2005), because “[t]he Supreme
Court in Aames and the ICA in this appeal
are ascertaining and giving effect to the in-
tention of the legislature of giving mortga-
gors, owners of Land Court property, the
right to appeal in HRS § 501-118.”

Il. Standards of Review
A. Mootness

HM “Appellate courts review issues of
mootness de novo.” State v, Tui, 188 Hawai'i
462, 466, 882 P.8d 274, 278 (2016).

10. HRS § 501-155 (Judgment directing convey-
ance) (2006) provides:
Any judgment of a court of competent jurisdic-
tion, whether a federal court or a court of the
State of Hawaii, affecting title or rights in
registered land, may be recorded, whether the
claim adjudicated was legal or equitable in
nature. Every instrument necessary to give ef-

365

B. Statutory Interpretation

HMMM Statutory interpretation is re-
viewed de novo by [the appellate] court.
When construing a statute, our foremost obli-
gation is to ascertain and give effect to the
intention of the legislature, which is to be
obtained primarily from the language con-
tained in the statute itself. Moreover, it is a
cardinal rule of statutory interpretation that,
where the terms of a statute are plain, unam-
biguous and explicit, we are not at liberty to
look beyond that language for a different
meaning. Instead, our sole duty is to give
effect to the statute’s plain and obvious
meaning.
Bhakta y. Cnty. of Maui, 109 Hawai'i 198,
208, 124 P.8d 948, 953 (2005) (internal quota-
tion marks, citations, and brackets in original
omitted).

Til. Discussion

The only issue presented in the Ferraras’
application is whether the ICA erred in de-
termining that the appeal was not moot.
Specifically, we must determine whether, in
judicial foreclosures involving Land Court
property, an appeal of an order confirming
sale is moot when the appellant does not
obtain a stay of the proceedings prior to the
sale of the property to a bona fide purchaser
and the issuance of a new certificate of title.

HE With regard to mootness, this court
has stated:
[A] case is moot where the question to be
determined is abstract and does not rest
on existing facts or rights. Thus, the moot-
ness doctrine is properly invoked where
events have so affected the relations be-
tween the parties that the two conditions
of justiciability relevant on appeal—ad-
verse interest and effective remedy—have
been compromised.
Okada Trucking Co. v. Bd. of Water Supply,
99 Hawai'i 191, 195-96, 53 P.38d 799, 803-04
(2002) Gnternal brackets, quotation marks,

fect to the judgment and directed by the court
to be executed, whether executed by a party or
by some other person appointed by the court,
shall be recorded and shall have full force and
effect to bind the land to be affected thereby. A
judgment entered in lieu of directing a convey-
ance, and having the effect of a conveyance,
shall be recorded with like force and effect.

366

ellipses, and citation omitted), In other
words, “[a] case is moot if the reviewing
court can no longer grant effective relief.”
Kaho‘ohanohano y. State, 114 Hawaii 302,
382, 162 P.3d 696, 726 (2007) (quoting City
Bank, 7 Haw. App. at 134, 748 P.2d at 815).

HRCP Rule 62, titled “Stay of Proceedings
to Enforce a Judgment,” states in relevant
part:

(@) Stay Upon Appeal. When an appeal is
taken the appellant by giving a supersede-
as bond may obtain a stay subject to the
exceptions contained in subdivision (a) of
this rule. The bond may be given at or
after the time of filing the notice of appeal
or of procuring the order allowing the
appeal, as the case may be. The stay is
effective when the supersedeas bond is
approved by the court.

Here, Onaga appealed the circuit court’s
grant of summary judgment in favor of
BONY, and later filed a “Motion for an Or-
der to Stay Proceedings Without Conditions
or Bond,” Consistent with HRCP Rule 62(d),
the circuit court denied Onaga’s motion, stat-
ing, “[Onaga] shall post a supersedeas bond
in order to obtain a Stay on the proceed-
ings.” The ICA agreed, concluding that the
circuit court did not err in denying Onaga’s
motion for stay of proceedings because Ona-
ga failed to comply with HRCP Rule 62(d),
Thus, the foreclosure proceedings continued:
the Ferraras purchased the Property at the
foreclosure sale, the Commissioner’s Deed
was recorded, and a new certificate of title
was issued for the Property.

A. Onaga was Required to Post a Super-
sedeas Bond in Order to Obtain a Stay

WM OHRCP Rule 62(d) provides that an
appellant may obtain a stay of proceedings

11, HRCP Rule 62 also gives courts broad discre-
tion to stay execution of a judgment pending a
motion for a new trial or for alteration of a
judgment. See HRCP Rule 62(b). Additionally,
HRCP Rule 62(c) provides that, in an appeal
taken from a judgment relating to an injunction,
“the court in its discretion may suspend, modify,
restore, or grant an injunction during the pen-
dency of the appeal upon such terms as to bond
or otherwise as it considers proper for the securi-
ty of the rights of the adverse party.”

12, The current version of this section is 46 Am.
Jur, 2d, Judicial Sales § 20 (2016), which states:

“by giving a supersedeas bond.” Onaga
never posted a bond, Accordingly, the circuit
court did not err in allowing the foreclosure
sale to proceed or issuing its order confirm-
ing the sale and directing conveyance of the
Property to the Ferraras.

The ICA’s opinion in City Bank is instruc-
tive on this point, In City Bank, the bank
filed a complaint to foreclose on the defen-
dant’s mortgage, and the circuit court grant-
ed summary judgment in favor of the bank
and a junior mortgagee, 7 Haw. App. at 132,
748 P.2d at 814, The property was sold to the
highest bidder, and the circuit court entered
an order confirming the sale and directing
distribution of the proceeds. Id. The defen-
dants timely appealed the order confirming
sale, Id, at 188, 748 P.2d at 814,

The ICA stated, “[t]he general rule is that
the right of a good faith purchaser ‘to receive
property acquired at a judicial sale cannot be
affected by the reversal of an order ratifying
the sale where a [supersedeas] bond has not
been filed’” Id. (quoting Leisure Camp-
ground & Country Club Ltd. P’ship v. Lei-
sure Estates, 280 Md. 220, 372 A.2d 595, 598
(1977)). The ICA explained that the purpose
of the rule is to advance “the stability and
productiveness of judicial sales.” Id. (quoting
47 Am. Jur. 2d Judicial Sales § 55 (1969) *),
It noted that the exceptions to this rule are
when the reversal is based on jurisdictional
grounds or when the purchaser is the mort-
gagee, explaining that the mortgagee in that
case “does not free himself from the underly-
ing dispute to which he is a party.” See id,
(quoting Leisure Campground, 372 A.2d at
598) (brackets omitted).

HH The ICA then noted that the purchas-
er of the property was a third party, good

The reversal of a decree directing a judicial
sale, on account of an error or irregularities
not going to the jurisdiction, does not vitiate
the title of one who, as a stranger to the
proceeding, has in good faith purchased prop-
erty at the sale, either before an appeal or writ
of error or pending the same without superse-
deas. This principle advances the stability and
produetiveness of judicial sales and the value
of titles derived under them and operates as
well in the interests of the owners of the prop-
erty sold as for the protection of purchas-
OTS. +e

faith purchaser, and that “(t]here was no
stay of the execution of the confirmation
order and the sale of the Property has been
closed.” See id. at 188, 748 P.2d at 814-15,
Thus, the ICA concluded that “the appeal is
moot and subject to dismissal.” Id, at 184,
748 P.2d at 815,

City Bank eomports with this court’s anal-
ysis in Lathrop v. Sakatani, which addressed
the issue of whether the circuit court erred in
expunging a lis pendens (ie., a notice of an
action pending against real property). We
held that the appeal was moot because the
property had been sold, 111 Hawai'i at 313-
15, 141 P.8d at 486-88, We stated that “it is
appellant's burden to seek a stay if post-
appeal transactions could render the appeal
moot,” Id, at 318, 141 P.8d at 486 (quoting In
re Gotcha Int'l L.P., 811 B.R, 250, 255 (9th
Cir,BAP 2004), We then dismissed the ap-
peal, reasoning that “the plaintiffs failed to
seek a stay on the execution of the circuit
court's order expunging the lis pendens
pending the disposition of the appeal” and
that “[s]uch failure permitted the defendants
to proceed with the sale transaction.” Id. at
814, 141 P.8d at 487.

Moreover, the City Bank rule makes prac-
tical sense in the foreclosure context and is
consistent with the principles underlying the
Land Court system mentioned above, “The
policy underlying this rule is to encourage
nonparty individuals to bid at [foreclosure]
sales.” Leisure Campground, 872 A.2d at 598.

13, An “innocent” or good faith purchaser is “one
who, by an honest contract or agreement, pur-
chases property or acquires an interest therein,
without knowledge, or means of knowledge suffi-
cient to charge him in law with knowledge, of
any infirmity in the title of the seller.” Ka‘u
Agribusiness Co, vy. Heirs or Assigns of Ahulau,
105 Hawai'i 182, 193, 95 P.3d 613, 624 (2004)
(citation omitted), When the Ferraras purchased
the Property, the circuit court had already deter-
mined in the consolidated proceedings that
BONY had a first priority lien on the Property.
‘Thus, at the time of the purchase, there would
not have been an “infirmity in the title” based on
Onaga's mortgage.

14, In this case, the ICA distinguished City Bank
by stating that “City Bank did not involve prop-
erty registered in Land Court,” Bank of New
York, mem. op. at 11, However, it is unclear
whether the property in City Bank was registered
in Land Court, and later unpublished ICA deci-
sions have applied City Bank to Land Court

367

The appeals process can last several years—
for example, this appeal was filed in Febru-
ary 2014, If a party challenging a foreclosure
is not required to post a bond to stay the
proceedings pending the outcome of the ap-
peal (or excused by the court from doing so),
third parties would be dissuaded from pur-
chasing a foreclosed property given the long-
term uncertainty on the investment.

HM This court has never explicitly
adopted the rule described in City Bank. In
accordance with Hawaii precedent and the
policy considerations underlying the Land
Court system, we hereby adopt City Bank’s
rule for application to Land Court properties
as well as properties administered pursuant
to HRS Chapter 502 (Regular System).!4
‘Thus, we hold that an appellant challenging a
foreclosure must post a supersedeas bond or
otherwise obtain a stay pursuant to HRCP
Rule 62 or Hawai‘i Rules of Appellate Proce-
dure (HRAP) Rule 8.5 We further hold that
the appellant here, who has failed to obtain a
stay by posting a bond, may not attack a
good-faith purchaser's title to property pur-
chased at a judicial sale and confirmed by
court order.6

Thus, it was Onaga’s burden to post a bond
and thereby obtain a stay if Onaga believed
that it, and not BONY, was entitled to fore-
close on the Property. It failed to do so. The
circuit court properly allowed the foreclosure
proceedings to continue, a sale was held, and

properties, See Cent, Pacific Bank, CAAP-12-
0001032 at *1; Bouley, CAAP-14-0000585 at *2;

In re Marn Family Litigation, CAAP-12-0000574
at "2,

15, Our holding does not affect a court's discre-
tion to grant a stay without requiring a bond,
See, eg. Fed. Prescription Serv. Inc. v. Am.
Pharm. Ass'n, 636 F.2d 755, 757-58 (D.C. Cir.
1980); 2A Barbara J. Van Arsdale et. al., Federal
Procedure, Lawyers Edition § 3:653 (June 2017
Update) (discussing cases).

16, Following City Bank, our holding does not
extends to cases in which the underlying order
ratifying the sale has been reversed on jurisdic
tional grounds, or when the purchaser of the
property is the mortgagee. See City Bank, 7
Haw. App. at 133, 748 P.2d at 814. Nor does it
apply to cases in which a court has granted a
party's motion for relief from judgment or order
pursuant to HRCP Rule 60(b).

368

the Ferraras purchased the Property in good
faith.

B. Onaga’s Appeal is Moot, as the Certif-
icate of Title Conclusively Establishes
the Ferraras’ Title to the Property

In Aames, this court held that “conclusive
effect is to be given the certificate of title on
the question of title to land.” 107 Hawai'i at

101, 110 P.8d at 1048, Notably, Aames ad-

dressed the provision of HRS § 501-118 deal-

ing with foreclosure by power of sale, not
foreclosure by action; thus it could be argued
that the Aames holding only applies to nonju-

dicial foreclosure proceedings. See id, at 101,

110 P.8d at 1048. However, Aames discussed

the legislative history of HRS Chapter 501

and the Land Court system generally, stat-

ing:

HRS chapter 501 pertains to “registration
of title [with the Land Court] to land and
easements or rights in land held and pos-
sessed in fee simple within the state of
Hawai‘i.” HRS § 501-1 (1993). The 1903
legislative history of HRS chapter 501 is
sparse. However, the legislature indicated
that Act 56, which established the statute,
incorporated what is commonly known as
the “Torrens Land Act.” S. Com. Rep., in
1908 Senate Journal, at 337.

According to the legislative history, ... [iJt
provides an economical and convenient
manner of recording land titles, which,
when the plan is fully adopted by the
people, will do away with the present cum-
bersome plan of records and largely re-
duce the expense of land transfers....
The system of land title registration
adopted by the Torrens Land Act and
codified in HRS chapter 501 is a system
for registration of land under which, upon
the landowner’s application, the court may,
after appropriate proceedings, direct the
issuance of a certificate of title. The pur-
pose of this registration system is to con-
dusively establish title to land through the
issuance of a certificate of title.

Id, (internal quotation marks, ellipses, and

citations omitted; emphasis added),

In order words, by relying on certificates
of title, the Torrens system is intended to
promote “certainty, economy, simplicity, and

facility.” 11 Thompson on Real Property,
§ 92.10(a) (David A. Thomas ed., 8rd ed.
2015). Giving certificates of title conclusive
effect in the judicial foreclosure context, as
well as in the non-judicial foreclosure con-
text, furthers these purposes.

HB Furthermore, it is unclear what relief
Onaga can obtain in this appeal, which chal-
lenges the order confirming sale. In its open-
ing brief, Onaga requested that the ICA (1)
“reverse the order granting summary judg-
ment and decree of foreclosure and final
judgment to [BONY] and remand for entry
of dismissal of its action” and (2) “reverse the
order denying R. Onaga’s cross-motion for
summary judgment and remand ordering the
circuit court to enter an order granting sum-
mary judgment and decree of foreclosure in
favor of R, Onaga and to proceed with the
foreclosure sale.” Alternatively, Onaga re-
quested that the ICA “enter summary judg-
ment and interlocutory decree of foreclosure
in favor of R. Onaga before sending the
matter back to circuit court for it to proceed
with the foreclosure sale.” Thus, Onaga ap-
pears to request a decision on the merits of
the foreclosure decree, as well as new fore-
closure proceedings.

HM However, this court has explained
that “a judgment of foreclosure finally deter-
mines the merits of the controversy,” and
“{slubsequent proceedings are simply inci-
dents to its enforcement.” Mortg. Electr.
Registration Sys., Inc. v. Wise, 180 Hawai'i
11, 16, 804 P.8d 1192, 1197 (2018) (internal
quotation marks and citations omitted). An
appellant cannot challenge the merits of a
foreclosure decree in an appeal of an order
confirming sale. See id. (“[Olrders confirming
sale are separately appealable from the de-
cree of foreclosure[.]”)

Moreover, title to the Property has already
passed to the Ferraras. See HRS § 501-118
(“After a new certificate of title has been
entered, no judgment recovered on the mort-
gage note for any balance due thereon shall
operate to open the foreclosure or affect the
title to registered land.”), Allowing Onaga to
undo or otherwise hinder the sale of the
Property to the Ferraras would be inconsis-
tent with the purposes underlying our Land

Court system. See HRS § 501-88 (“The origi-
nal certificate in the registration book, and
any copy thereof duly certified[,] ... shall be
conclusive as to all matters contained therein,
except as otherwise provided in this chapter).

Thus, because Onaga did not post a bond
to stay the proceedings pending appeal, the
instant appeal is moot under HRCP Rule
62(d) and Aames.

C. HRS § 501-118 Does Not Prevent the
Ferraras from Taking Title to the
Property

In denying the Fervaras’ second motion to
dismiss, the ICA determined that “it is ques-
tionable whether the certificate of title sub-
mitted by the Ferraras is conclusive in pass-
ing title to the Ferraras,” because under
HRS § 501-118, Onaga “is permitted the op-
portunity to appeal the foreclosure by ac-
tion.” Bank of New York, mem. op. at 11-12.
The ICA also held that the Ferraras did not
comply with HRS § 501-118 because they
“do not contend that they filed a certified
copy of the Judgment Confirming Sale, in-
stead claiming that title was vested in them
upon the recording of the Commissioner’s
Deed.” Id. at 12. Thus, the ICA held that a
certificate of title must also comply with
HRS § 501-118, thereby placing two require-
ments for good-faith purchasers such as the
Ferraras to prove mootness: (1) any appeal
regarding a foreclosure by action must be
complete, and (@) the purchaser must file a
certified copy of the judgment confirming
sale, See at 11-12,

This court has not previously interpreted
the provision of HRS 501-118 at issue here.
The first paragraph of HRS § 501-118 pro-
vides:

In case of foreclosure by action, a certified
copy of the final judgment of the court
confirming the sale may be filed or record-
ed with the assistant registrar or the depu-
ty after the time for appealing therefrom
has expired and the purchaser shall there-
upon be entitled to the entry of a new
certificate.

17. The ICA also noted that the Ferraras may not
have been entitled to a certificate of title under
HRS § 501-106(a)(1) because “it is questionable

369

HH The ICA appears to have interpret-
ed “after the time for appealing therefrom
has expired” as meaning the completion of
the appeal. However, by its plain language
“the time for appealing therefrom” clearly
refers to the window within which a party
may file a notice of appeal after the entry of
a judgment, ie., thirty days (subject to ex-
tension). See HRAP Rule 4(a)(1), (4).

Moreover, the ICA’s interpretation ap-
pears inconsistent with HRCP Rule 62(d),
discussed above, which provides that a party
may obtain a stay as of right by posting a
supersedeas bond—if an appeal of a foreclo-
sure automatically prevents the purchaser
from taking title, a bond would never be
necessary. Furthermore, this interpretation
places an undue burden on third parties such
as the Ferraras, as they must monitor an
appeal to which they are not parties and/or
intervene in the appeal, wait until the appeal
has been completely disposed of, and then
finally obtain a certified copy of the final
judgment.

The ICA’s interpretation of HRS § 501-
118 also appears inconsistent with HRS
§ 501-155. The ICA stated that the Ferraras’
certificate of title was “contrary to the ex-
press provisions of HRS § 501-118” because
“{t}he Ferraras do not contend that they filed
a certified copy of the Judgment Confirming
Sale, instead claiming that title was vested in
them upon recording of the Commissioners’
Deed.” Bank of New York, mem. op. at 12.
However, HRS § 501-155 provides that a
judgment directing conveyance “may be re-
corded” in Land Court, but that “[elvery
instrument necessary to give effect to the
judgment and directed by the court to be
executed ... shall be recorded and shall
have full force and effect to bind the land to
be affected thereby.” (Emphases added.) The
Ferraras recorded the Commissioner’s Deed.
conveying the Property in Land Court, as
directed by the circuit court’s order confirm-
ing sale, and then obtained a certificate of
title. This was sufficient to demonstrate that
title of the Property conclusively transferred
to the Ferraras.!” See Aames, 107 Hawaii at

whether subsection (1) governs in the case of a
judicial foreclosure in which case title does not
pass by voluntary means.” Bank of New York,

370 |

101, 110 P.38d at 1048 (“{Clonclusive effect is
to be given the certificate of title on the
question of title to land.”).

Hs in sum, we interpret HRS § 501-118
as providing a nonexclusive means for a pur-
chaser of a property at a foreclosure sale to
obtain a certificate of title, ie, by filing a
certified copy of the final judgment after the
thirty day period allowed to file a notice of
appeal has elapsed. HRS § 501-118 does not
preclude good faith purchasers at a foreclo-
sure sale from obtaining a certificate of title
by other statutory procedures, such as those
provided in HRS § 501-155. Accordingly,
HRS § 501-118 does not prevent the Ferrar-
as from taking title to the Property.

IV. Conclusion

A party who wishes to stay an order con-
firming a foreclosure sale pending appeal
must post a supersedeas bond or otherwise
obtain a stay pursuant to HRCP Rule 62 or
HRAP Rule 8, If a stay is not obtained and
the property is sold to a bona fide purchaser,
the appeal should be dismissed as moot be-
cause no effective relief can be granted. In
the instant case, Onaga failed to post a su-
persedeas bond or otherwise obtain a stay,
and the Ferraras lawfully purchased the
Property in good faith. Accordingly, ICA
erred in concluding that Onaga’s appeal was
not moot.

The ICA’s July 20, 2016 judgment on ap-
peal is reversed, and the circuit court’s Feb-
ruary 21, 2014 judgment confirming the sale
of the Property to the Ferraras is affirmed.

mem. op. at 12 (citing HRS § 501-106(a)(1),
which provides that “[nJo new certificate of title
shall be entered ,.. except .., [ijn pursuance of
any deed or other voluntary instrument”), The
ICA's interpretation is incorrect, as it would

400 P.3d 571
STATE of Hawai‘i, Respondent/Plaintiff-
Appellee,
Vv.

Anthony R. VILLENA,
Petitioner/Defendant-
Appellant.

SCWC-13-0000030

Supreme Court of Hawai‘i.

AUGUST 15, 2017

mean that no purchaser of a foreclosed property
would be entitled to a certificate of title, regard-
less of whether the foreclosure was judicial or
non-judicial, because foreclosures are never “vol-
untary” under the ICA’s meaning of the word.

al
eG

co
a
i)

Phyllis J. Hironaka for Petitioner/Defen-
dant-Appellant.

Brian R. Vincent for Respondent/Plaintift-
Appellee,

RECKTENWALD, C.J., NAKAYAMA,
McKENNA, POLLACK, AND WILSON,
IS.

OPINION OF THE COURT BY
WILSON, J.

This case arises from Petitioner/Defen-
dant-Appellant Anthony R. Villena’s (Villena)
conviction for the offense of operating a vehi-
cle under the influence of an intoxicant
(OVUIJ). On appeal, Villena asserts the In-
termediate Court of Appeals (ICA) erred in
holding that the State laid a sufficient foun-
dation to introduce the results of Villena’s
blood alcohol test results. Specifically, Villena
raises four grounds for the State’s failure to
lay a sufficient foundation for introduction
into evidence of the blood test results:

1, Whether the ICA gravely erred in af-
firming the trial court’s admission of Ville-
na’s blood alcohol test result without first
requiring the State to (1) introduce its
scientific evidence via a duly qualified ex-
pert; (2) prove satisfaction of the three
Montalbo factors in arriving at the test
result; and (8) demonstrate compliance
with the Souza requirements for test re-
sults produced by an instrument;

2. Whether the ICA gravely erred in af-
firming the trial court’s admission of Ville-
na’s blood alcohol test result without first
requiring the State to demonstrate strict
compliance with HAR § 11-114-23(b) and
(a)(8) requirements which have a direct
bearing on the accuracy of the alcohol test
result;

8, Whether the ICA gravely erred in af-
firming the trial court's admission of

State’s Exhibit#1 (the Letter License) as
hearsay, inadmissible under either HRE
808(b)(6) or (8), and in violation of Villena’s
Confrontation rights; and
4, Whether the ICA gravely erred in rul-
ing that the trial court's erroneous admis-
sion of State’s Exhibit#2 (MT Perry’s
Sworn Statements) was mere harmless er-
ror.
We affirm the ICA’s judgment and hold that
the State laid a proper foundation to intro-
duce the results of Villena’s blood test be-
cause the State’s licensing letter was admissi-
ble as nonhearsay.

I. Background

A. District Court Proceedings

On March 6, 2012, Villena was charged by
complaint with OVUII, in violation of Hawai'i
Revised Statutes (HRS) § 291H-61(a)(4)
(2011).! Villena pled not guilty to the charge.
The bench trial commenced on October 18,
2012, continued on December 6, 2012, and
ended on December 19, 2012.”

1, Testimony of Officer Wade Ikehara

The State presented testimony from Hono-
lulu Police Department (HPD) Officer Wade
Ikehara that on February 22, 2012, he ob-
served Villena driving at 75 miles per hour,
25 miles per hour over the speed limit of 50
miles per hour. Officer Ikehara next noticed
that Villena’s vehicle crossed over the dashed.
lines separating two of the lanes. Although
Officer Ikehara activated his lights, Villena’s
vehicle did not stop until he reached a DUI
roadblock. At the DUI roadblock, Officer
Ikehara approached Villena’s vehicle and not-
ed that Villena’s eyes were “red, bloodshot,
and glassy,” his appearance was disheveled,
and he detected “a strong odor of an aleohol-
ie type beverage on his breath.” Defense
counsel stipulated that Villena performed the
field sobriety test and Officer Ikehara subse-
quently made the arrest. Villena was then
transported to the Kalihi Police Station.

1, HRS § 291E-61(a)(4) (2011) provides:
(@) A person commits the offense of operating
a vehicle under the influence of an intoxicant if
the person operates or assumes actual physical
control of a vehicle:

373

At the police station, Officer Ikehara read
Villena an implied consent form and Villena
elected to take a blood test. Because Villena
selected that option, Officer Ikehara trans-
ported Villena to the Alapai Police Station to
have his blood drawn. Officer Ikehara waited
with Villena for 20-30 minutes until the ar-
rival of medical technologist Karla Perry
(Perry). Upon her arrival, Officer Ikehara
listened to her explain the procedures and
observed her withdraw blood from Villena.

2, Testimony of Medical Technologist
Karla Perry

The State presented testimony from Perry.
This testimony was presented out of order,
prior to the completion of Officer Ikehara’s
testimony, due to Perry’s scheduling con-
flicts.

Perry testified as to her qualifications as a
medical technologist, She stated she was em-
ployed as a medical technologist with the
City and County of Honolulu since 2004. She
graduated from the University of Hawai'i at
Manoa with a bachelor of science in medical
technology, was board certified by the Amer-
ican Society of Clinical Pathologists, and was
state certified by the state Department of
Health (DOH).

Perry asserted that she was qualified un-
der Hawai‘i Administrative Rules (HAR) Ti-
tle 11, chapter 114, which regulates blood
alcohol testing, to draw blood and perform
alcohol analysis. Over defense counsel’s ob-
jection for lack of foundation, the court al-
lowed the State to lay additional foundation
to support Perry’s testimony.

The State sought to lay a foundation for
Perry’s qualification as a medical technolo-
gist under HAR Title 11, chapter 114. Perry
explained that Title 11 requires an alcohol
analyst or supervisor to be a medical technol-
ogist licensed by the state. With her bachelor
of science degree and as a state-licensed
medical technologist, Perry asserted that she
fulfilled the requirement to be an alcohol

(4) With .08 or more grams of alcohol per

one hundred milliliters or cubic centimeters
of blood.

2, The Honorable Clarence A. Pacarro presided,

374

analyst under HAR Title 11, chapter 114.
Perry also explained that she qualified as an
alcohol testing supervisor because she ful-
filled the sole requirement that she have four
years of experience as an alcohol analyst.’

To gain admission of the results of the
blood alcohol test results, the State then
attempted to introduce evidence to establish
that the City and County of Honolulu Health
Services Division Laboratory (Laboratory)
where Perry worked was a licensed laborato-
ry under Title 11.4 Defense counsel objected
for lack of foundation. Perry testified that
she had personal knowledge that the Labora-
tory was licensed as of November 2011. As
the laboratory supervisor, Perry received a
licensing letter from DUI coordinator Dr.
Tam Nguyen stating that the Laboratory
was licensed under HAR Title 11, chapter
114, Perry testified that the letter was kept
in the regular course of the Laboratory’s
business, The State moved to enter the DUI
coordinator’s licensing letter, marked as
State’s Exhibit 1, into evidence in order to
establish the reliability of the laboratory,
methods, and instrument used to measure
Villena’s blood alcohol content. Defense coun-
sel objected on the basis of authentication,
lack of foundation, hearsay, and violation of
Villena’s rights under the Confrontation
Clause. The court took the letter’s admission
into evidence under advisement.

Perry next testified regarding the enzy-
matie method used to analyze blood samples.
She testified that this method was approved
by Dr. Tam Nguyen, the statewide DUI
coordinator, in September 2009, Over objec-

3. Perry's assertion that four years of experience
is sufficient to be an alcohol testing supervisor
was incorrect. The minimum number of years of
experience is five years, HAR § 11-114-19(b)(3)
(1993). Nonetheless Perry was qualified to be a
supervisor as she had eight years of experience at
the time she tested Villena's bload sample.

4, Under HAR Title 11, chapter 114, laboratories
conducting alcohol tests are required to be li-
censed by the director of health, A license is
granted if the laboratory meets the following
requirements:

(1) _ Is physically located in this State;

(2) Is licensed by the department as a clini-
cal laboratory;

(3) Has adequate facilities,
equipment, and instrumentation;

personnel,

tions from defense counsel for lack of founda-
tion, Perry stated that the enzymatic method
is accepted in the scientific community as
being accurate and reliable.

Perry identified the instrument used to
test the blood samples as the “Ace Alera.”
Again, over defense counsel’s objection for
lack of foundation, Perry stated that the Ace
Alera was approved by the DUI coordinator,
Perry testified she was trained to calibrate
and operate the Ace Alera by her then-
supervisor in September 2009. As part of her
training, Perry reviewed the manufacturer's
manual, which explained how to calibrate and
operate the Ace Alera. She testified that
calibration is conducted by placing the reag-
ents and the appropriate samples on the
instrument; once the instrument runs it in-
forms the technician “whether it passed or
failed.” Perry testified that she calibrated the
Ace Alera prior to testing the samples and
the instrument passed.

Following Perry’s testimony regarding the
Ace Alera instrument's calibration, the State
sought to prove Villena’s blood alcohol con-
tent by introducing the blood test result
measured by the Ace Alera, Perry testified
that Villena’s blood alcohol content was “0.16
grams of alcohol per 100 cubic centimeters of
whole blood.” Defense counsel objected to
Perry’s testimony on the basis that the State
laid an insufficient foundation to introduce
Villena’s blood test result. Defense counsel
also asserted that the State failed to demon-
strate that the testing of Villena’s blood was
conducted in accordance with the require-
ments of HAR Title 11, chapter 114, The

(4) Includes in its staff an alcohol testing
supervisor who is qualified under section 11-
114-19;
(5) Uses alcohol testing procedures ap-
proved in writing by the DUI coordinator or
previously approved by the director of health
as required by section 11-114-22 and demon-
strates proficiency in those procedures;
(6) Has a quality assurance program ap-
proved in writing by the DUI coordinator
which includes a chain of custody proce-
dure; and
(7) Participates in and meets the require-
ments of a performance evaluation program
for alcohol testing approved in writing by
the DUI coordinator as required by section
11-114-21 at no cost to the department,
HAR § 11-114-18(b).

district court clarified that because Perry
was testifying out of order, Perry was al-
lowed to testify but the testimony and exhib-
its would not be admitted until the State
established proper foundation through Perry
and its other witnesses.

The State then sought to move into evi-
dence the blood alcohol testing statement—
marked as State’s Exhibit 2—which con-
tained Villena’s blood aleohol content results
of 0.16, The court took admission of the
exhibit under advisement.

8, Admission of the DUI Coordinator’s
Licensing Letter

Following the testimonies of Officer Ike-
hara and Perry, the court heard argument as
to the admission of the DUI coordinator’s
licensing letter and the blood aleohol testing
statement.

As noted previously, the DUI coordinator’s
licensing letter is a letter to Perry, dated
November 5, 2011, from the DUI coordina-
tor. The letter states that it “constitutes a
license for the City and County of Honolulu
Health Services Division Laboratory to con-
duct blood alcohol testing in accordance with
Hawaii Administrative Rules, Title 11, Chap-
ter 114 (HAR-11-114).” The letter explains
that the licensure of the Laboratory was
based on the Laboratory “having fulfilled
requirements of HAR-11-114-18(b).” In addi-
tion, the letter confirms that the Ace Alera
instrument was approved “to be used for the
determination of blood alcohol concentra-

5. HRE Rule 803 (2012) provides in relevant part:
The following are not excluded by the hear-
say rule, even though the declarant is avail-
able as a witness:

© Other exceptions.

(6) Records of regularly conducted activity.
A memorandum, report, record, or data
compilation, in any form, of acts, events,
conditions, opinions, or diagnoses, made in
the course of a regularly conducted activity,
at or near the time of the acts, events, condi-
tions, opinions, or diagnoses, as shown by
the testimony of the custodian or other quali-
fied witness, or by certification that complies
with rule 902(11) or a statute permitting
certification, unless the sources of informa-
tion or other circumstances indicate lack of
trustworthiness,

375

tion.” Specifically, the letter states that “[the
addition of the ACE-ALERA Clinical Chem-
istry analyzer .,. to the ‘Quantitative Enzy-
matie Determination of Alcohol’ proceduref ]
has been evaluated” as meeting the require-
ments of HAR § 11-114-22. The letter bears
the seal of the State of Hawai'i, states that it
“is a true and correct copy of a public docu-
ment on file in the Department of Health,”
and is signed by the DUI coordinator, who is
also designated as the custodian of records.
The State argued that the DUI coordina-
tor’s licensing letter was admissible because
it fell within two hearsay exceptions: HRE
Rule 803(b)(6), as a record of a regularly
conducted activity, and HRE Rule 808(b)(8),
as a public record with a self-authenticating
seal.5 Over defense counsel’s arguments that
neither of the hearsay exceptions applied and
that admission of the letter would violate
Villena’s confrontation rights, the court ad-
mitted the DUI coordinator’s licensing letter
into evidence, The State also sought to admit
a blood alcohol testing statement containing
a sworn statement from Perry that she fol-
lowed applicable procedures in testing Ville-
na’s blood (the State’s “Exhibit 2”), Over
defense counsel’s objections based on hear-
say and lack of foundation, the court admit-
ted the blood alcohol testing statement into
evidence based on Perry’s testimony,

4, Closing Arguments

In closing argument, the State argued it
Jaid a sufficient foundation to admit the blood
test result, The State pointed to Perry's tes-

(8) Public records and reports. Records, re-
ports, statements, or data compilations, in
any form, of public offices or agencies, set-
ting forth (A) the activities of the office or
agency, or (B) matters observed pursuant to
duty imposed by law as to which matters
there was a duty to report, excluding, how-
ever, in criminal cases matters observed by
police officers and other law enforcement
personnel, or (C) in civil proceedings and
against the government in criminal cases,
factual findings resulting from an investiga-
tion made pursuant to authority granted by
Jaw, unless the sources of information or
other circumstances indicate lack of trust-
worthiness.

376

timony, which demonstrated that the enzy-
matic method is an approved method and
that Perry was trained in accordance with
state regulations. The State also referenced
the DUI coordinator’s licensing letter, which
licensed Perry's Laboratory and confirmed
the DUI coordinator’s approval of the proce-
dure and equipment used to test Villena’s
blood. The State argued that Perry's testimo-
ny and the licensing letter were sufficient to
lay an adequate foundation to introduce the
blood test result,

Defense counsel argued that the State did
not lay a sufficient foundation to introduce
scientific evidence because Perry was not
qualified as an expert as required by HRE
Rule 702. Thus, defense counsel argued that
Perry’s testimony did not constitute suffi-
cient foundation to prove that the enzymatic
method is a sound scientific procedure.

5. Motion for Judgment of Acquittal

Following closing arguments, Defense
counsel made a motion for judgment of ac-
quittal again asserting that the State did not
lay an adequate foundation to admit evidence
of the blood test results. The district court
denied defense counsel’s motion for judgment
of acquittal.

The district court found Villena guilty and
sentenced Villena to a $400 fine plus court
costs, and other mandatory conditions.

B. ICA Proceedings

The ICA, in its May 19, 2015 Summary
Disposition Order, affirmed the Judgment of
the district court. The ICA concluded: 1)
evidence of Villena’s blood test result was
properly admitted because the record shows
that the DUI coordinator approved the test-
ing procedure and the instrument; 2) the
DUI coordinator licensing letter was proper-
ly admitted as a self-authenticated public
record; and 8) the blood alcohol testing state-
ment was improperly admitted into evidence
but that error was harmless in light of Ex-
hibit 1 and Perry’s testimony. The ICA also
determined that Villena waived the argument.
that the State failed to strictly comply with
HAR § 11-114-28(a)(8) and (b) because Ville-
na did not timely object. As to Villena’s
confrontation rights, the ICA held that the

FE

DUI coordinator’s licensing letter was a non-
testimonial record and therefore not subject
to the Confrontation Clause.

IL Standards of Review

A. Admissibility of Hearsay

Hl “[Whhere the admissibility of evidence
is determined by application of the hearsay
rule, there can be only one correct result,
and the appropriate standard for appellate
review is the right/wrong standard.” State v.
Moore, 82 Hawai'i 202, 217, 921 P.2d 122, 187
(1996) (internal quotation marks and citation
omitted).

B. Evidentiary Foundation

HH Before a test result may be intro-
duced into evidence, “a foundation must be
laid showing that the test result can be relied
on as a substantive fact.” State v. Werle, 121
Hawai‘i 274, 280, 218 P.8d 762, 768, “When a
question arises regarding the necessary foun-
dation for the introduction of evidence, the
determination of whether proper foundation
has been established lies within the discre-
tion of the trial court, and its determination
will not be overturned absent a showing of
clear abuse.” State v. Hid, 126 Hawai'i 430,
440, 272 P.3d 1197, 1207 (2012) (quoting State
vy. Assaye, 121 Hawaii 204, 210, 216 P.8d
1227, 1283 (2009)).

UI. Discussion

A. The Trial Court Did Not Err in Admit-
ting Villena’s Blood Test Results

Hl To introduce blood test results prov-
ing intoxication, the State must lay a proper
foundation. Werle, 121 Hawaii at 282, 218
P.8d at 770. “As part of the foundation, the
prosecution must establish the reliability of
the test results which establish intoxication.”
Id, see also State v. Wallace, 80 Hawai'i 382,
407, 910 P.2d 695, 720 (1996) (explaining “[a]
fundamental evidentiary rule is that before
the result of a test made out of court may be
introduced into evidence, a foundation must
be laid showing that the test result can be
relied on as a substantive fact” (citation omit-
ted)).

HH To determine the reliability of the
enzymatic blood testing method used here,
the State must show compliance with the
factors we laid out in State v. Montalbo, 73
Haw. 180, 828 P.2d 1274 (1992). Under Mon-
talbo, whether a scientific procedure—such
as the enzymatic method, which Perry used
to test Villena’s blood—is reliable depends on
three factors: (1) the validity of the underly-
ing principle, (2) the validity of the testing
method applying the principle, and (8) the
proper application of the testing method. Id.
at 186, 828 P.2d at 1279. To demonstrate the
validity of the scientific evidence, expert tes-
timony is needed. Werle, 121 Hawai'i at 282,
218 P.8d at 770. Montalbo requires that the
expert’s opinion “have a reliable basis in the
knowledge and experience of his or her disci-
pline.” Werle, 121 Hawai'i at 288, 218 P.3d at
771.

TE However, we have recognized a
“shorteut” to establishing Montalbo reliabili-
ty for blood testing procedures when the
State proves “that the DUI coordinator gave
written approval of the procedure and instru-
ment used to test [defendant’s] blood.”
Werle, 121 Hawai'i at 284, 218 P.8d at 772.
Such written approval by the DUI coordina-
tor “relieves the prosecution of the burden of
presenting expert testimony to establish the
reliability” of the instrument and procedure
used. Id. at 285, 218 P.8d at 778. In other
words, written approval from the DUI coor-
dinator is a shortcut for the first two factors
of Montalbo—which require the State to
demonstrate the validity of the underlying
principle and the validity of the testing meth-
od applying the principle, Accordingly, to lay
a foundation to admit Villena’s blood test
results under the shortcut method, the State
needed to show 1) that the DUI coordinator
gave written approval of the enzymatic meth-
od and the blood testing instrument (the
Werle shortcut), and 2) that Perry properly
conducted the enzymatie method on Villena’s
blood (the third Montalbo factor).

1. The DUI Coordinator’s Licensing
Letter Was Admissible Nonhearsay
as a Document of Independent Legal
Significance and Satisfied the Werle
Shorteut

Hn order to satisfy the Werle short-

cut, the State must establish that the DUI

377

coordinator gave “written approval” of the
procedure and instrument used. Werle, 121
Hawai‘ at 288-4, 218 P.8d at 771-2. This is in
accord with the statutory requirement for
blood alcohol testing procedures to “have
been approved in writing by the DUI coordi-
nator.” HAR § 11-114-22(a). Here, the writ-
ten approval of the procedure and instrument
is a letter to Perry, dated November 5, 2011,
from the DUI coordinator, The letter states
that it “constitutes a license for the City and
County of Honolulu Health Services Division
Laboratory to conduct blood alcohol testing
in accordance with Hawaii Administrative
Rules, Title 11, Chapter 114 (HAR-11-114).”
The letter explains that the licensure of the
Laboratory was based on the Laboratory
“having fulfilled requirements of HAR-11-
114-18(b).” In addition, the letter confirms
that the Ace Alera instrument was approved
“to be used for the determination of blood
alcohol concentration.” Specifically, the letter
states that “[t]he addition of the ACH-AL-
ERA Clinical Chemistry analyzer ... to the
‘Quantitative Enzymatic Determination of Al-
cohol’ procedure[] has been evaluated” as
meeting the requirements of HAR § 11-114-
22, This letter is precisely the type of evi-
dence the Werle shortcut requires. Unlike
the licensing letter at issue in Werle which
we found deficient for failing to mention the
precise testing method and instrument used,
the licensing letter here specifically approves
the instrument and method used to test Ville-
na’s blood. See Werle, 121 Hawaii at 284, 218
P.8d at 772. Accordingly, the licensing letter
satisfies the Werle shortcut to show that the
DUI coordinator gave written approval of the
method and instrument used to test the de-
fendant’s blood.

HE However, Villena asserts the court
erred in admitting the letter because it was
inadmissible hearsay. Hearsay is a “state-
ment, other than one made by the declarant
while testifying at the trial or hearing, of-
fered in evidence to prove the truth of the
matter asserted.” HRE Rule 801 (2012). This
definition is identical to that contained in the
Federal Rules of Evidence (FRE) Rule
801(c). Hearsay “is not admissible except as

378

provided by these rules[.)” HRE Rule 802
(2012). It is well-settled that statements of
independent legal significance are not hear-
say. See FRE Rule 802(c) emt. (“If the sig-
nificance of an offered statement lies solely
in the fact that it was made, no issue is
raised as to the truth of anything asserted,
and the statement is not hearsay.”); see also
A. Bowman, Hawai‘ Rules of Evidence Man-
ual 8-7 (2016) (characterizing as nonhearsay
statements with “independent legal signifi-
cance” which “are not offered to prove the
truth of the matter asserted”). This type of
evidence is considered nonhearsay because
the statements are not “offered to prove the
truth of the matter stated” but instead are
“offered simply to show that the statement
was made.” West Coast Truck Lines, Inc. v.
Arcata Community Recycling Center, Inc.
846 F.2d 1289, 1246 n.5 (th Cir, 1988); see
also Gonzales v. City of San Jose, 2015 WL
2398407, “6 (N.D. Cal. 2015) (noting that
admission of a copy of a driver's license into
evidence was “hearsay to the extent offered
to establish Plaintiff's height, weight, and
appearance on February 18, 2012, as assert-
ed in the license, but not hearsay to the
extent offered to show the identifying infor-
mation in the Department of Motor Vehicle’s
records and available to Defendants on that
day”). This doctrine is often applied to evi-
dence of contractual agreements. See Island
Directory Co, Ine, v. Iva’s Kinimaka Enter-
prises, Inc,, 10 Haw.App. 15, 21-22, 859 P.2d
985, 989 (1993). In Island Directory, two
parties disputed the existence of a valid con-
tract. Id, at 20, 859 P.2d at 939. One party
sought to introduce a written document
which the other party admitted signing. Id,
The ICA held that the document was non-
hearsay because it “was not offered into evi-
dence to prove the truth of its contents, but
to prove that it was made, signed by Iva, and
expressed the legal relationship of the par-
ties.” Id, at 22, 859 P.2d at 939-40. The
existence of the document was “highly rele-

6. In seeking to admit the letter into evidence, the
State described it as ‘‘a letter, um, which from
them [the State] went to Ms, Karla Perry which
purports to establish—uh, constitute a license
that the City and County of Honolulu is licensed
to conduct the blood alcohol testing.”

ne

vant because its legal effect [was] at issue in
the case.” Id, Similarly, Professor Bowman
uses as an illustration of a nonhearsay state-
ment of independent legal significance a dec-
laration by an insured that “I hereby cancel
my insurance policy.” A. Bowman, Hawai'i
Rules of Evidence Manual 8-7 (2016), Be-
cause these words effect a cancellation, they
are “not only evidence, but accomplish the
legal event. The words effect the cancellation
as surely as words of slander produce a tort.”
Id.

Likewise here, the licensing letter was not
being introduced to prove the truth of its
contents, but rather because its legal effect
(that the lab had received written approval
from the DUI coordinator licensing its in-
struments and methods) was at issue in the
case.® To satisfy the Werle shortcut for lay-
ing a proper foundation to introduce blood
test results, the State must show “that the
DUI coordinator gave written approval of the
procedure and instrument used to test [the
defendant's] blood.” Werle, 121 Hawaii at
284, 218 P.8d at 772. The State introduced
the licensing letter to show that the DUI
coordinator had given written approval of the
enzymatic method and the blood testing in-
strument used to test Villena’s blood.

Accordingly, we hold that the licensing
letter was admissible as nonhearsay and con-
elude that the trial court did not err in
admitting the letter.’ Because we find the
letter admissible, we also conclude that the
State met its burden under the Werle short-
cut to demonstrate that the State gave writ-
ten approval of the enzymatic method and
Ace Alera instrument.

2. Perry’s Testimony Satisfied the
Third Montalbo Factor and There-
fore the State Laid a Proper Foun-
dation to Admit the Results of Ville-
na’s Blood Test Results

HMM Having found that the State met its
burden under the Werle shortcut to satisfy

7. Because we conclude that the licensing letter is
not hearsay, we do not reach Villena’s asserted
error that admission of the letter violated his
right to confrontation. However, this does not
connote our agreement with the ICA conclusion
that, as nontestimonial hearsay, the licensing let-
ter was “not subject to the Confrontation
Clause.”

the first two Montalblo factors, we next look
to the final Montalbo factor, which requires
the State to demonstrate “the proper applica-
tion of the technique on the particular occa-
sion.” Montalbo, 78 Haw. at 186, 828 P.2d at
1279, Perry testified that she was employed
as a medical technologist with the City and
County of Honolulu and was qualified under
HAR Title 11, chapter 114, which regulates
blood alcohol testing, to draw blood and per-
form alcohol analysis, She testified that she
was licensed by the State as both an alcohol
analyst and an alcohol testing supervisor.
Perry testified that she used the “Ace Alera”
instrument manufactured by Alpha Wasser-
man to conduct blood tests based on the
“enzymatic method,” the instrument and
method approved by the DUI coordinator in
the licensing letter. Perry’s testimony that
she was licensed by the State and tested
Villena’s blood using the approved instru-
ment and method satisfies the third Montal-
bo requirement to demonstrate “the proper
application of the technique on the particular
oceasion.”

HM Accordingly, we conclude that
the State met the burden laid out in Werle
and Montalbo to establish a foundation to
introduce Villena’s blood test results,®

IV. Conclusion

For the foregoing reasons, we affirm the
ICA’s June 16, 2015 Judgment on Appeal but
for the reasoning set forth herein,

8. Villena raises two additional issues in his appli-
cation for certiorari, both of which are without
merit. We affirm the ICA in concluding that
Villena waived any objection regarding strict
compliance with HAR § 11-114-23(b) and (a)3)
by failing to timely object at trial.

We also affirm the ICA in concluding that the
erroneous admission of the State’s Exhibit 2 (a

379

400 P.3d 580

STATE of Hawai‘i, Respondent/Plaintiff-
Appellee,

vw

Raymond S. DAVIS,
Petitioner/Defendant-Appellant.

SCWC-12-0001121
Supreme Court of Hawai‘.
DATED: Honolulu, Hawai'i, June 2, 2017.

(By: Recktenwald, C.J., Nakayama,
McKenna, Pollack, and Wilson, JJ.)

ORDER DENYING MOTION FOR
RECONSIDERATION

Upon consideration of Petitioner/Defen-
dant-Appellant Raymond S, Davis’s motion
for reconsideration, filed on May 25, 2017,
the papers in support thereof, and the rec-
ords and files herein,

IT IS HEREBY ORDERED that the mo-
tion is denied.

sworn statement by Perry providing additional
detail regarding the procedures used to test Ville-
na's blood) was harmless error. Perry's oral testi~
mony and the licensing letter provided sufficient
foundation for the State to admit the results from
Villena’s blood test. Accordingly, any error in
admitting Exhibit 2 was harmless.

380
'
400 P.3d 581
STATE of Hawai‘i, Respondent/Plaintiff-
Appellee,

ve

Deirdre ICHIMURA,
Petitioner/Defendant-Appellant.

SCWC-13-0000396
Supreme Court of Hawaiti.
DATED: Honolulu, Hawai'i, June 15, 2017.

CERTIORARI TO THE INTERMEDI-
ATE COURT OF APPEALS (CAAP-13-
0000396; CR. NO, 12-1-1497)

MEMORANDUM OPINION
Vacate, And remand.

400 P.3d 581

Leimomi Leslie FRESCH, Individually
and as Next Friend for Howard K. Les-
lie, Jv., Respondent/Plaintiff-Appellee,

and
Howard K. Leslie, Sr.,

Petitioner/Plaintiff-
Appellee,

and
Howard K. Leslie, Jr.,

Respondent/Plaintiff-
Appellant,

ve

Jeffrey K. KANUI, as Personal Represen-
tative of the Estate of Jamie K. Tavares,
Deceased, Respondent/Defendant-Appellee.

SCWC-13-0000129
Supreme Court of Hawaii.
DATED: Honolulu, Hawai'i, June 30, 2017.

CERTIORARI TO THE INTERMEDI-
ATE COURT OF APPEALS (CAAP-13-
0000129; CIV. NO, 97-0448)

|
MEMORANDUM OPINION

Affirmed.

400 P.3d 581

Krishna NARAYAN; Sherrie Narayan; Vi-
rendra Nath; Nancy Makowski; Keith
Macdonald as Co-trustee for the DKM
Trust Dated October 7, 2011; Simon Yoo;
Sumiyo Sakaguchi; Susan Renton, as
Trustee for the Renton Family Trust
Dated 12/3/09; Stephen Xiang Pang;
Faye Wu Liu; Massy Mehdipour as
‘Trustee for Massy Mehdipour Trust Dat-
ed June 21, 2006; G. Nicholas Smith;
Tristine Smith; Ritz 1303 re, LLC, a
Colorado Limited Liability Company;
and Bradley Chaffee As Trustee of the
Charles V. Chaffee BRC Stock Trust
Dated 12/1/99 and The Clifford W. Chaf-
fee BRC Stock Trust Dated 1/4/98, Peti-
tioners/Plaintiffs-Appellees,

v.

THE RITZ-CARLTON DEVELOPMENT
COMPANY, INC; The Ritz-carlton
Management Company, LLC; John Al-
bert; Edgar Gum, Respondents/Defen-
dants-Appellants,

and

Marriott International Inc; Maui Land &
Pineapple Co., Inc; Exclusive Resorts,
LLC; Kapalua Bay, LLC; Association of
Apartment Owners of Kapalua Bay Con-
dominium; Caroline Peters Belsom; Ca-
thy Ross; Robert Parsons; Ryan Church-
ill; The Ritz-carlton Hotel Company,
L.L.C.; Marriott Vacations Worldwide,
Corporation; Marriott Ownership Re-
sorts, Inc. Marriott Two Flags, LP; MH
Kapalua Venture, LLC; MLP KB Part-
ner LLC; Kapalua Bay Holdings, LLC;

%

ER Kapalua Investors Fund, LLC; ER
Kapalua Investors Fund Holdings, LLC;
Exclusive Resorts Development Compa-
ny, LLC; and Exclusive Resorts Club I
Holdings, LLC, Respondents/Defen-
dants.

SCWC-12-0000819
Supreme Court of Hawai'i.
DATED: Honolulu, Hawai'i, August 9, 2017.

@y: Recktenwald, C.J., Nakayama,
McKenna, and Pollack, JJ., and Circuit
Judge Nakasone, in place of Acoba, J.,
recused)

ORDER DENYING MOTION FOR
RECONSIDERATION

Upon consideration of Respondents/Defen-
dants-Appellants the Ritz Carlton Develop-
ment Company, Inc., et al’s motion for recon-
sideration of the opinion filed on July 14,
2017, Exclusive Resorts, LLC, et al.’s joinder
in the motion for reconsideration and the
record herein,

IT IS HEREBY ORDERED that the mo-
tion is denied.

400 P.3d 582
In the MATTER OF the Arbitration be-
tween HAWAII STATE TEACHERS
ASSOCIATION, Respondent/Union-Ap-
pellant,

and

State of Hawai‘i, Department of
Education, Petitioner/Em-
ployer-Appellee.

SCWC-11-0000065
Supreme Court of Hawaiti.
August 11, 2017

oO
oD

wo

84.

. Walter H. Ikeda presided over the arbitration

Robert T. Nakatsuji, Honolulu, for peti-
tioner,

Herbert R. Takahashi and Rebecca L. Co-
vert, Honolulu, for respondent.

RECKTENWALD, C.J., NAKAYAMA,
McKENNA, POLLACK, AND WILSON,
JS.

OPINION OF THE COURT BY
NAKAYAMA, J.

L INTRODUCTION

At issue is whether the doctrine of sover-
eign immunity protects the State from an
arbitrator's award of prejudgment interest.
We hold that, under the facts of this case, it
does not, Because judicial review of an arbi-
tration award is confined to the strictest
possible limits, and because the arbitrator in
this case reasonably interpreted the arbitra-
tion agreement in fashioning the award, we
hold that the arbitrator did not exceed his
authority in awarding prejudgment interest
against the State. We also hold that the
award of attorneys’ fees and costs on appeal
‘was proper.

Thus, we affirm the Intermediate Court of
Appeals’ (ICA) November 21, 2016 judgment,
on appeal, which 1) vacated in part the Cir-
cuit Court of the First Cireuit’s (circuit
court) February 24, 2011 final judgment, 2)
reversed the circuit court's January 4, 2011
orders, 8) affirmed the cireuit court’s Janu-
ary 81, 2011 order, and 4) granted Hawaii
State Teachers Association’s (HSTA) request
for fees and costs.

IL BACKGROUND

A. Arbitration Proceedings !

On July 18, 2008, Kathleen Morita (Morita
or grievant), a public school teacher, was
terminated from her job for allegedly smok-
ing marijuana and possessing alcohol while in
her classroom at Hau‘ula Elementary School.

proceedings.

HSTA filed a grievance on Morita’s behalf
and an arbitration hearing was held pursuant.
to the collective bargaining agreement (the
agreement) between HSTA and the Hawai'i
State Department of Education (State or
Employer).

Article V of the agreement outlines the
grievance procedure, which provides that a
grievant may request arbitration. Article
V.G.2.f provides the arbitrator with the au-
thority to enter an award in favor of the
grievant if the arbitrator finds that the Em-
ployer’s actions were improper:

When the arbitrator finds that any disci-
plinary action was improper, the action
may be set aside, reduced or otherwise
modified by the arbitrator. The arbitrator
may award back pay to compensate the
teacher wholly or partially for any salary
lost. Such back pay award shall be offset
by all other compensation received by the
grievant(s) including but not limited to un-
employment compensation or wages.

On May 7, 2010, the arbitrator issued a
decision and award, which sustained the
grievance because the State lacked just cause
to terminate Morita. The arbitrator ordered
that Morita be restored to her position at
Hau‘ula Elementary School and be given
back wages “with interest at the rate of ten
(10) percent per annum on any unpaid
amounts that are due and owing.” The arbi-
trator also noted that he would “retain limit-
ed jurisdiction for a period not to exceed 6
months from the date of this award to assure
compliance with the award.”

On July 28, 2010, HSTA filed a motion for
final decision and award requiring the State
to pay Morita $30,454.57 in backpay, plus ten
percent interest until the amount was fully
paid. In its memorandum in support of the
motion, HSTA explained that there “has
been no compliance with the remedial terms
of the award ... as to back pay by Employ-
er” and requested that the arbitrator enter a
final decision in order to settle any remaining
disputes over the calculation of the award
between the parties.

On September 27, 2010, the arbitrator en-
tered a compliance order. In it, the arbitrator

2. The State’s motion to strike is discussed in the

385

noted that the State had filed a July 22, 2010
motion to strike or vacate the interest por-
tion of the award with the circuit court and
that this motion was still pending at the
cireuit court level?

As to the issues of backpay and interest
(also labeled throughout the proceedings as
prejudgment or backpay interest), the arbi-
trator offered the following explanation:

While the Union has requested a final
award and order which fixes the amount of
backpay and interest, the Arbitrator has
elected to treat it as a compliance matter
pursuant to his continuing jurisdiction be-
cause the May 7, 2010 decision and award
was final except for what normally would
have been ministerial mathematical caleu-
lation, As a general proposition, Arbitra-
tors are authorized to proceed under the
authority permitted by the collective bar-
gaining agreement and the Uniform Arbi-
tration Act, HRS, Chapter 658A. As previ-
ously indicated in the order of June 16,
2010, the Arbitrator believes that he is
acting in conformity tithe [sic] Collective
Bargaining Agreement and the authority
granted by HRS, Chapter 658A in the
determination that any backpay award in-
cludes interest at the rate of 10 percent
per annum. The purpose of an award of
backpay including interest is to “make
whole” financially the Grievant had she not
been terminated. Elkouri & Elkouri, How
Arbitration Works, 6! Ed. 2003, p. 1224,
Payment to the Grievant of wrongfully
withheld pay without interest would not
restore her whole as loss of use of funds
for that period entailed either deprivation
or additional costs to the Grievant if she
had to borrow funds to replace lost wages
while awaiting the results of her grievance.
The doctrine of interest assessed by an
arbitrator as compensation or penalty to
prevent further damages is demonstrated
by Morrison-Knudsen Company vs. Maka-
huena Corporation and Tea Pacific, Inc., 66
Haw. 668 [675 P.2d 760] (1983) and Sussell
vs, Civil Service Commission of the City &
County of Honolulu, 74 Haw [sic] 599 [851
P.2d 311] (1998).

following section.

386

As such, the arbitrator reaffirmed his May 7,
2010 determination that Morita was entitled
to interest on unpaid backpay, but left the
calculation to the parties:

The Grievant is entitled to a reimburse-
ment of backpay of $25,169.05 excluding
interest for the period from August 1, 2008
to May 81, 2010. She is also entitled to
interest on any unpaid backpay at the rate
of 10 percent per annum, Since the Em-
ployer has indicated the possibility of ap-
pealing at least the interest portion of the
award, no amount is set forth as to accrued
interest. If the Employer does not contest.
the principal amount of the backpay, it
should be paid forthwith as it may be the
source of the repayment by the Grievant of
retirement benefits received from the
State of Hawaii Retirement System. The
calculation of accrued interest is left to the
parties using financial management soft-
ware. The calculation should assume the
deficit in backpay accrued monthly from
August 1, 2008 by dividing the aggregate
deficit in backpay for each year by the
number of months that the unpaid deficit
remained unpaid multiplied by the rate of
10 percent per annum until paid.

B. Circuit Court Proceedings *

On May 18, 2010, HSTA filed a motion to
confirm the arbitration award, entry of judg-
ment and allowing costs and other appropri-

3, The Honorable Gary W.B. Chang presided.

4, There is some discrepancy as to when this
motion was filed, The motion is dated July 8,
2010 but date stamped July 9, 2010.

5. HRS § 658A-24 (Supp. 2010), “Modification or
correction of award,” provides in full:

(a) Upon motion made within ninety days af-
ter the movant receives notice of the award
pursuant to section 6584-19 or within ninety
days after the movant receives notice of a
modified or corrected award pursuant to sec-
tion 658-20, the court shall modify or correct
the award if:
(1) There was an evident mathematical
miscalculation or an evident mistake in the
description of a person, thing, or property
referred to in the award;
(2). The arbitrator has made an award on a
claim not submitted to the arbitrator and the
award may be corrected without affecting
the merits of the decision upon the claims
submitted; or

ate relief with the circuit court. The State
filed a response, arguing that Morita was not
entitled to the awarded interest and opposing
HSTA’s request for attorneys’ fees and costs,

Confusion appears to have arisen when the
State filed two separate motions, which
sought the same relief from the arbitrator's
award of interest, but relied on different
statutory grounds. The first, filed on July 9,
2010,! was the State’s motion to modify or
correct the arbitration award (motion to
modify award), in which the State sought to
modify the portion of the arbitrator’s decision
that awarded prejudgment interest on the
backpay. This motion was brought pursuant.
to Hawai'i Revised Statutes (HRS) § 658A-
24 (Supp. 2010).

HSTA’s motion to confirm and the State's
motion to modify the award were heard on
July 15, 2010. At the hearing, the State also
made an oral request to file a motion to
vacate the award,

The second of the State’s written motions,
filed on July 26, 2010,8 was the State’s motion
to vacate in part the arbitration award (mo-
tion to vacate award), in which the State
sought to vacate the portion of the arbitra-
tor’s decision that awarded prejudgment in-
terest on the backpay. This motion was
brought pursuant to HRS § 6584-23 (Supp.
2010).7 On September 13, 2010, a hearing was

(3) The award is imperfect in a matter of
form not affecting the merits of the decision
on the claims submitted.
(b) If a motion made under subsection (a) is
granted, the court shall modify or correct and
confirm the award as modified or corrected.
Otherwise, unless a motion to vacate is pend-
ing, the court shall confirm the award.
(c) A motion to modify or correct an award
pursuant to this section may be joined with a
motion to vacate the award.

6. There is some discrepancy as to when this
motion was filed. There are two date stamps on
the document, July 22, 2010 and July 26, 2010.

7. HRS § 6584.23 (Supp.
award,” provides in part:

2010), “Vacating

(a) Upon motion to the court by a party to an
arbitration proceeding, the court shall vacate
an award made in the arbitration proceeding
if
(1) The award was procured by corruption,
fraud, or other undue means;

held on the State’s motion to vacate award.
The circuit court orally granted the motion
and vacated the portion of the award that
gave Morita prejudgment interest. Counsel
for HSTA was not at the hearing. Both par-
ties assert that there was a service error and
that HSTA did not receive notice of the
hearing date until after the hearing.

On October 7, 2010, HSTA filed a motion
for reconsideration of the State’s motion to
vacate award, arguing that HSTA did not
receive notice of the hearing on the State’s
motion, A hearing on HSTA’s motion for
reconsideration was held on November 22,
2010, Both parties appeared and argued as to
whether the doctrine of sovereign immunity
applied when awarding prejudgement inter-
est. At the close of the hearing, the circuit
court took the matter under advisement, The
following day, November 28, 2010, the cirenit
court entered a minute order denying
HSTA’s motion for reconsideration,

Meanwhile, on October 1, 2010, the circuit
court entered three orders and one judg-
ment: 1) Order Denying Employer’s Oral
Motion For Leave to File Motion to Vacate
Award Dated May 7, 2010, Filed Orally on
July 15, 2010; 2) Order Denying Employer's

(2) There was:

(A) Evident partiality by an arbitrator ap-
pointed as a neutral arbitrator;

(B) Corruption by an arbitrator; or

(C) Misconduct by an arbitrator prejudic-
ing the rights of a party to the arbitration
proceeding;

(3) An arbitrator refused to postpone the
hearing upon showing of sufficient cause for
postponement, refused to consider evidence
material to the controversy, or otherwise
conducted the hearing contrary to section
658A-15, so as to prejudice substantially the
rights of a party to the arbitration proceed-
ing;

(4) An arbitrator exceeded the arbitrator’s
powers;

(5) There was no agreement to arbitrate,
unless the person participated in the arbitra-
tion proceeding without raising the objection
under section 658A-15(c) not later than the
beginning of the arbitration hearing; or

(6) The arbitration was conducted without
proper notice of the initiation of an arbitra-
tion as required in section 658A-9 so as to
prejudice substantially the rights of a party
to the arbitration proceeding.

8. The circuit court appears to have erred in
noting in the title of the order that this motion
was filed on July 18, 2010. The circuit court, in

387

Motion to Modify or Correct Award Dated
May 7, 2010, Filed on July 18, 2010; 8)
Order Granting in Part and Denying in Part
Motion to Confirm Arbitration Award, Entry
of Judgment and Allowing Costs and Other
Appropriate Relief Filed on May 18, 2010; °
and 4) Judgment (October judgment).

The October judgment reads in its entirety
as follows:

Pursuant to the 1) order granting in part
and denying in part motion to confirm
arbitration award, entry of judgment and
allowing costs and other appropriate relief
filed on May 18, 2010, entered on OCT.- 1,
2010, 2) order denying Employer’s motion
to modify or correct award dated May 7,
2010, filed on July 18, 2010, entered on
OCT.- 1, 2010, and 3) order denying Em-
ployer’s motion for leave to file motion to
vacate award dated May 7, 2010, filed oral-
ly on July 15, 2010, entered on OCT.- 1,
2010, Judgment is hereby entered in con-
formity with the arbitration award filed on
May 18, 2010 in accordance with Section
658A-25(a), Hawaii Revised Statutes, in fa-
vor of the Hawaii State Teachers Associa-
tion and against Employer, State of Ha-
waii, Department of Education,

the text of the order, also notes that the motion
was filed on July 8, 2010, which more accurately
reflects the record, The circuit court offered the
following explanation for denying the motion:

The Employer relies on subsection 3 of Section
658A-24(), Hawaii Revised Statutes, (HRS),
for its motion and the Court finds no authority
to modify or correct. The change sought by the
Employer goes to the subject matter of the
award, The question of the 10% interest as
awarded by the arbitrator is part of the merits
of the award and to modify or correct as
sought by the Employer would alter the sub-
stance of the award.

9. The order granting in part HSTA’s motion to
confirm the arbitration award confirmed the
May 7, 2010 decision and award of the arbitra-
tor, entered judgment in accordance with the
arbitration award, and denied without prejudice
HSTA’s request for attorneys’ fees and costs.
With note to the denial of the fees and costs, the
circuit court explained that HSTA did not re-
quest a specific amount of fees and costs, and
that HSTA could file another motion that would
afford the State the opportunity to contest the
amount.

388

This judgment is entered as to all claims
raised by the parties, and it resolves all
claims by and against the parties in the
above-entitled case. No claims or parties
remain, Any and all remaining claims, if
any, are dismissed with prejudice.

(Formatting altered.)

On October 11, 2010, HSTA filed a motion
to alter and amend the circuit court’s Octo-
ber judgment (motion to amend) so that the
judgment would either include the specific
amount of backpay reflected in the arbitra-
tor’s compliance order or to confirm the arbi-
trator’s compliance order. At the November
8, 2010 hearing on HSTA’s motion to amend,
the circuit court orally granted HSTA’s mo-
tion and ordered the State to pay Morita
backpay in the amount of $25,169.05. The
court noted that HSTA’s motion for reconsid-
eration, which addressed the issue of the
prejudgment interest, would be heard on No-
vember 22, 2010.

On January 4, 2011, the circuit court en-
tered two written orders: 1) granting the
State’s motion to vacate the award as to the
prejudgment interest, and 2) denying
HSTA’s motion for reconsideration.

On January 31, 2011, the cireuit court en-
tered its written order, entitled “Order
Granting HSTA’s Motion to Alter and
Amend Judgment Entered October 1, 2010
or in the Alternative to Confirm Supplemen-
tal Arbitration Award Clarifying Award of
May 7, 2010, Filed October 11, 2010.” The
order states:

It is hereby ordered, adjudged, and de-
ereed that the HSTA’s motion to alter and
amend judgment entered October 1, 2010
or in the alternative to confirm supplemen-
tal arbitration award clarifying award of
May 7, 2010, is hereby granted. The judg-
ment will be amended to state the Employ-
er shall pay the employee $25,169.05.

(Formatting altered.) The order also ad-
dresses the issue of retirement benefits, and
then concludes with a final paragraph that an
amended judgment would be filed at a later
time. The final paragraph, originally typed,
states the following:

An amended judgment consistent with
this order will not be filed until the Court

has ruled on the other matters pending in

the case, ie., the HSTA’s request for attor-

ney fees and costs and the HSTA’s Motion
for Reconsideration of Employer’s Motion

to Vacate in Part Award Dated May 7,

2010, Filed July 26, 2010 which will be

heard on November 22, 2010.

(Emphasis added.) The portion underlined
above was subsequently crossed out and in
its place is the following handwritten sen-
tence: “An amended judgment consistent
with this order shall be filed at an appropri-
ate time.”

On February 24, 2011, the circuit court
entered a final judgment, which reads as
follows:

Pursuant to the 1) Order Granting In
Part And Denying In Part Motion To Con-
firm Arbitration Award, Entry Of Judg-
ment And Allowing Costs And Other Ap-
propriate Relief Filed On May 18, 2010,
entered on October 1, 2010, 2) Order De-
nying Employer’s Motion To Modify Or
Correct Award Dated May 7, 2010, Filed
On July 18, 2010, entered on October 1,
2010, 8) Order Denying Employer’s Motion
For Leave To File Motion To Vacate
Award Dated May 7, 2010, Filed Orally On
July 15, 2010, entered on October 1, 2010,
4) Minute Order on Decision Regarding
HSTA’s Motion to Allow Attorney's Fees
and Costs, filed January 3, 2011, 5) Order
Denying HSTA’s Motion For Reconsidera-
tion Of Employer’s Motion To Vacate In
Part Award Dated May 7, 2010, filed Janu-
ary 4, 2011, 6) Order Granting Employer's
Motion To Vacate In Part Award Dated
May 7, 2010, filed January 4, 2011, Final
Judgment is hereby entered in accordance
with Section 658A-25(a) Hawaii Revised
Statutes, in favor of Hawaii State Teachers
Association (HSTA) and against Employer,
State of Hawai'i, Department of Education
(DOE) on the reinstatement and back pay
to the grievant in conformity with the arbi-
tration award filed on May 18, 2010, and in
favor of the DOE and against HSTA on
the 10% interest_on the back pay in the
arbitration award and on HSTA’s request,
for fees.

This final judgment is entered as to all
claims raised by the parties, and it resolves

all claims by and against the parties in the
above-entitled case, No claims or parties
remain,

(Emphasis added.)

C. ICA Proceedings

On appeal, HSTA argued that the circuit
court exceeded its authority in vacating the
interest portion of the arbitration award be-
cause the doctrine of sovereign immunity was
not implicated in this case."

1, The ICA’s 2013 Opinion

On November 26, 2018, the ICA issued a
published opinion in which it: 1) vacated the
circuit court's February 24, 2011 final judg-
ment; 2) reversed the circuit court’s January
4, 2011 orders (order granting State’s motion
to vacate award, and the order denying
HSTA’s motion for reconsideration); and 8)
dismissed HSTA’s appeal of the circuit
court’s January 81, 2011 order granting
HSTA’s motion to alter and to amend the
October 1, 2010 judgment. Haw. State Teach-
ers Ass’n v. State Dep’t of Hdue., 181 Hawai'i
301, 812, 318 P.8d 591, 602 (App. 2018), vacat-
ed, CAAP-11-0000065, 2014 WL 4548491, at
*1 (Haw. Ct. App. Sept, 15, 2014) (HSTA D.

The ICA’s opinion held, inter alia, that the
circuit court erred when it vacated the por-
tion of the arbitration award pertaining to
interest, concluding that “[nJeither sovereign
immunity nor the statutory prohibition
against the award of prejudgment interest
against the State are implicated here.” Id. at
302, 318 P.3d at 592.

On September 15, 2014, the ICA entered
an order vacating the opinion sua_sponte,
“{iln light of the Hawai'i Supreme Court's
Opinion in Association of Condominium
Homeowners of Tropics at Waikele v. Saku-
ma, 181 Hawai'i 254, 318 P.8d 94 (2018).”
Haw. State Teachers Ass’n v. State Dep’t of
Edue., CAAP-11-0000065, 2014 WL 4548491,
at *1 (Haw. Ct. App. Sept. 15, 2014), The
order further stated that a “new opinion shall
be filed.” Id.

10. On February 3, 2011, HSTA filed its first
notice of appeal from the circuit court's January
4, 2011 orders, which was docketed as CAAP-11-
0000065. On March 9, 2011, HSTA filed a sec-

389

2, The ICA’s 2016 Opinion

On September 30, 2016, the ICA issued an
unpublished memorandum opinion. Haw,
State Teachers Ass’n v. State Dep’t of Educ.
CAAP-11-0000065, 139 Hawai'i 271, 2016 WL.
5719745, at *1 (Haw. Ct. App. Sept. 80, 2016)

(HSTA Il). This opinion, other than resolving
the procedural issues raised by Sakuma, was
substantially similar to its 2018 opinion in its
analysis and disposition of the issues.

Before reaching HSTA’s points on appeal,
the ICA first addressed two preliminary
questions: 1) whether the ICA had appellate
jurisdiction to review all of the issues on
appeal, and 2) whether the circuit court had
the authority to proceed to enter orders and
a second judgment after it entered the Octo-
ber 1, 2010 judgment, Id. at *6.

In addressing the first question, the ICA
first concluded that the October judgment
was “a final and appealable judgment” pursu-
ant to HRS §§ 658A-25 and 658A-28. Id,
Next, the ICA examined whether there was a
timely appeal from the October judgment. Id.
The ICA noted that neither party timely
appealed the judgment, but that HSTA time-
ly filed a post-judgment motion—its motion
to amend the October judgment. Id. The ICA.
further explained that, under Hawai'i Rules
of Appellate Procedure (HRAP) Rule 4(a)(8),
the circuit court failed to enter an order
within ninety days after the date that
HSTA’s motion to amend was filed. Id. at *6-
7. In HSTA I, the ICA concluded that under
HRAP Rule 4(a)(8), HSTA’s motion to amend
was deemed denied on January 10, 2011 and
that the parties would have had thirty days
from that date to timely file an appeal from
the October judgment. Id. at *7. The follow-
ing excerpt from HSTA II explains why this
conclusion was incorrect:

However, in Sakuma, the majority opinion

held that when a timely post-judgment mo-

tion for reconsideration is deemed denied,
it does not trigger a thirty-day deadline
for filing a notice of appeal until thirty
days after the entry of an order disposing
of the motion.... Thus, the HSTA’s Mo-

ond notice of appeal from the circuit court's
February 24, 2011 final judgment, which was
docketed as CAAP-11-0000140. The ICA consoli-
dated these appeals under CAAP-11-0000065.

390

tion to Amend 10/1/10 Judgment was not

“deemed denied” on January 10, 2011 (as

we previously had held), and the January

81, 2011 Order Granting HSTA’s Motion to

Amend 10/1/10 Judgment constitutes the

effective disposition on this motion, Final-

ly, the January 31, 2011 Order Granting

HSTA’s Motion to Amend 10/1/10 Judg-

ment specifically states that: “An amended

judgment consistent with this order shall
be filed at an appropriate time.” This judg-
ment appears to be the 2/24/11 Judgment,
which expressly enters judgment on six

orders ... [and] the HSTA timely filed a

Notice of Appeal from the 2/24/11 Judg-

ment.

Id, Thus, the ICA concluded that it had
appellate jurisdiction over all of the issues
raised in HSTA’s appeal. Id.

In addressing the second question, the
ICA examined HRS Chapter 658A, which
sets out the framework for judicial action of
arbitration proceedings, and explained that
the framework does not contemplate the con-
voluted procedural posture of this case:

HRS Chapter 658A does not contemplate a
case like this one, where one party secures
an order confirming an award, and the
court enters final judgment on the confir-
mation order, while the other party later
secures an order vacating in part the same
award, without challenging the court’s en-
try of final judgment on the confirmation
award.

We cannot speculate as to why the Cir-
cuit Court entered the 10/1/10 Judgment
notwithstanding the parallel requests for
relief, We also cannot speculate as to why
the State failed to seek relief from the
10/1/10 Judgment.

HRS § 6584-23 provides statutory au-
thority for relief from an arbitration
award, but not from a final judgment on an
order confirming an arbitration award. In
order to seek relief in the Circuit Court
from a final judgment entered pursuant to
HRS § 658A-25(a), such as the 10/1/10
Judgment, the State had to file a timely
motion to alter or amend the judgment. It
did not. Under these circumstances, we
must conclude that the Cirenit Court was

no longer authorized to enter an irreconcil-
ably inconsistent order based on the
State’s Motion to Vacate Award. See
Wong, 79 Hawai'i at 29-80, 897 P.2d at 956-
57. On this basis alone, we conclude that
the Circuit Court erred when it entered
the Order Partially Vacating Award and
the Order Denying HSTA’s Motion for Re-
hearing,
Id, at *8-9. As such, the ICA concluded that
the circuit court did not have authority to
enter subsequent orders or another judg-
ment after the October judgment, Id. at *9,

Despite arriving at this conclusion, the
ICA went on to analyze the substantive
claims raised on appeal. The ICA determined
that, even if the circuit court could have
vacated in part the award, the cireuit court
erred in doing so in this case because the
State expressly waived sovereign immunity
with respect to Morita’s grievance, Id, The
ICA explained that Morita’s grievance was a
contract claim pursuant to the collective bar-
gaining agreement and that, as such, the
State “waived its immunity with respect to
the submission of the claim to binding arbi-
tration.” Id.

The ICA examined the collective bargain-
ing agreement, which provided that the “ar-
bitrator may award back pay to compensate
the teacher wholly or partially for any salary
lost,” and determined that it was “clear from
the record of the arbitration proceedings that
the Arbitrator interpreted this contract pro-
vision to allow an award to include interest
on back pay in order to wholly’ compensate a
teacher for lost salary.” Id, The ICA conclud-
ed that the arbitrator did not exceed his
powers in this regard and that “[elven if he
incorrectly construed the agreement or mis-
interpreted applicable law, he acted within
his power to interpret the agreement and
fashion a remedy in accordance with his in-
terpretation.” Id, at *10 (citing Daiichi Haw.
Real_Estate Corp. v. Lichter, 103 Hawaii
825, 886, 82 P.8d 411, 422 (2008)).

Citing Kenneth H. Hughes, Inc. v. Aloha

Tower Development, Corp. 654 F.Supp.2d
1142, 1149 (D,. Haw. 2009), the ICA further

concluded that neither the doctrine of sover-
eign immunity nor the statutory prohibition

against awards of prejudgment interest
against the State prevented the arbitrator
from awarding interest against the State. Id,
Therefore, the ICA held that the circuit court
erred in vacating that part of the arbitrator’s
award. Id.

As such, the ICA entered the following
order:

For the foregoing reasons, we: (1) vacate
in part the Circuit Court’s February 24,
2011 Final Judgment; (2) reverse the Cir-
cuit Court’s January 4, 2011 orders, the
Order Granting Employer’s Motion to Va-
cate in Part Award Dated May 7, 2010, and
the Order Denying HSTA’s Motion for Re-
consideration of Employer’s Motion to Va-
cate in Part Award Dated May 7, 2010;
and (8) affirm the Circuit Court’s January
81, 2011 Order Granting HSTA’s Motion to
Alter and to Amend Judgment Entered
October 1, 2010 or in the Alternative to
Confirm Supplemental Arbitration Award
Clarifying Award of May 7, 2010, Filed
October 11, 2010. This case is remanded to
the Circuit Court for further proceedings
consistent with this Memorandum Opinion.

Id, at *11.

On October 12, 2016, the ICA entered an
order granting in part and denying in part
HSTA’s request for attorneys’ fees and costs
filed on December 20, 2018. The ICA award-
ed HSTA fees in the amount of $18,696.38
pursuant to HRS § 658A-25(c) and costs in
the amount of $371.30 pursuant to HRS
§ 685A-25(b).1 The ICA noted that HSTA
“may submit a supplemental motion for costs
within (5) days from the date of this order.”

On October 17, 2016, HSTA filed a supple-
mental motion for expenses, requesting an
additional $24.08 for the costs of ordering a
transcript of the November 8, 2010 proceed-
ing. On November 9, 2016, the ICA granted

11, HRS § 658A-25 (2016), “Judgment on award;
attorney's fees and litigation expenses,” provides
in full:

(@) Upon granting an order confirming, va-
cating without directing a rehearing, modify-
ing, or correcting an award, the court shall
enter a judgment in conformity therewith. The
judgment may be recorded, docketed, and en-
forced as any other judgment in a civil action,
(6) A court may allow reasonable costs of the
motion and subsequent judicial proceedings,

391

HSTA’s October 17, 2016 supplemental mo-
tion for expenses, awarding HSTA an addi-
tional $24.08 in costs,

On November 21, 2016, the ICA entered
its judgment on appeal pursuant to its Sep-
tember 30, 2016 memorandum opinion, Octo-
ber 12, 2016 order granting in part and deny-
ing in part HSTA’s request for attorneys’
fees and costs, and November 9, 2016 order
granting HSTA’s supplemental motion for
expenses.

Ill. STANDARDS OF REVIEW

A. Judicial Review of Arbitration Awards

HE “(Judicial veview of an arbitration
award is confined to ‘the strictest possible
limits, and a court may only vacate an award
on the grounds specified in HRS § 658A-23
and modify or correct on the grounds speci-
fied in HRS § 658A-24.” State of Haw. Org.
of Police Officers (SHOPO) v. County of
Kauai, 135 Hawai'i 456, 461, 858 P.8d 998,
1008 (2015) (alteration in original) (quoting
Daiichi, 108 Hawai'i at 886, 82 P.8d at 422),
“This standard applies to both the circuit
court and the appellate courts.” Id,

Judicial review of an arbitration award is
limited by the following precepts:

First, because of the legislative policy to
encourage arbitration and thereby dis-
courage litigation, arbitrators have broad
discretion in resolving the dispute, Upon
submission of an issue, the arbitrator has
authority to determine the entire question,
including the legal construction of terms
of a contract or lease, as well as the dis-
puted facts. In fact, where the parties
agree to arbitrate, they thereby assume
all the hazards of the arbitration process,
including the risk that the arbitrators may

(c) On application of a prevailing party to a
contested judicial proceeding under section
658A-22, 658A-23, or 658A-24, the court may
add reasonable attorney's fees and other rea-
sonable expenses of litigation incurred in a
judicial proceeding after the award is made to
a judgment confirming, vacating without di-
recting a rehearing, modifying, or correcting
an award.

392

make mistakes in the application of law
and in their findings of fact.

Second, correlatively, judicial review of
an arbitration award is confined to the
strictest possible limits. An arbitration
award may be vacated only on the four
grounds specified in HRS § 658-9 and
modified and corrected only on the three
grounds specified in HRS § 658-10. More-
over, the courts have no business weighing
the merits of the award.

Third, HRS §§ 658-9 and -10 also re-
strict the authority of appellate courts to
review judgments entered by circuit courts
confirming or vacating the arbitration
awards.

Schmidt v. Pac. Benefit Servs., Ine., 113 Ha-
wai'l 161, 165-66, 150 P.8d 810, 814-15 (2006)
(citing Daiichi, 103 Hawai‘ at 336, 82 P.3d at
422),

IV. DISCUSSION

The State presents both procedural and
substantive arguments in support of its posi-
tion that the ICA erred in vacating the cir-
cuit court’s judgment and upholding the arbi-
trator’s award of interest against the State.
Additionally, the State takes issue with the
ICA’s award of appellate fees and costs to
STA.

A. Procedural Issues

The State argues that the ICA erred in
concluding that the circuit court was not
authorized to enter orders and judgments
that were irreconcilable with its October
judgment. The State provides four grounds
for this argument: 1) this issue was not
raised before the ICA by either party; 2) the
October judgment was not final; 8) subse-
quent outstanding issues rendered the Octo-
ber judgment non-final; and 4) HSTA’s mo-
tion to alter or amend the October judgment
rendered the October judgment non-final,

1, The ICA did not err in considering
an issue not raised by the parties on
appeal.

TM The State first argues that the ICA

improperly reached an issue that was not
raised by the parties during the cireuit court

or appellate proceedings. Specifically, the
State contends that the “ICA decided this
case primarily on the procedural issue of
whether the 10/1/10 Judgment had binding
effect on and superseded the subsequent or-
ders in the case,” but that neither of the
parties raised this as an issue in their brief-
ings before the ICA.

HRS § 641-2(b) (2016) provides:

The appellate court may correct any error

appearing on the record, but need not
consider a point that was not presented in

the trial court in an appropriate manner.

No judgment, order, or decree shall be

reversed, amended, or modified for any

error or defect, unless the court is of the

opinion that it has injuriously affected the

substantial rights of the appellant,
(Emphasis added.) See_also HRAP Rule
28(b)(4)(D) (2016) (“Points not presented in
accordance with this section will be disre-
garded, except that the appellate court, at its
option, may notice a plain error not present-
ed.” (emphasis added)).

Hl Thus, while an appellate court need
not consider a point not properly raised on
appeal, it is within its discretion to consider
and correct an error not raised. Additionally,
as a matter of jurisdiction, this issue needed
to be addressed before the ICA could consid-
er the other issues. As such, the ICA did not
err in considering the issue of the October
judgment even though neither party raised it
as a point of error.

2. The ICA did not err in concluding
that the October judgment was a
final and appealable judgment.

TI Second, the State argues that, even if
the ICA could raise the October judgment
issue sua sponte, “the ICA erred in giving
the [October judgment] binding effect be-
cause it was not in fact a final judgment.”
According to the State, the October judg-
ment “was only a non-final, interim judg-
ment.”

HRS Chapter 658A provides statutory au-
thority for courts to enter judgments on arbi-
tration awards. HRS § 658A-25(a) (Supp.
2010) reads in full: “Upon granting an order
confirming, vacating without directing a re-

hearing, modifying, or correcting an award,
the court shall enter a judgment in conformi-
ty therewith. The judgment may be record-
ed, docketed, and enforced as any other judg:
ment in a civil action.” Additionally, Hawai
Rules of Civil Procedure (HRCP) Rule 58
(2010) provides in part that the “filing of the
judgment in the office of the clerk constitutes
the entry of the judgment; and the judgment.
is not effective before such entry.”

The October judgment, filed on October 1,
2010, reads in full as follows:

Pursuant to the 1) order granting in part
and denying in part motion to confirm
arbitration award, entry of judgment and
allowing costs and other appropriate relief
filed on May 18, 2010, entered on OCT.- 1,
2010, 2) order denying Employer’s motion
to modify or correct award dated May 7,
2010, filed on July 18, 2010, entered on
OCT.- 1, 2010, and 3) order denying Em-
ployer’s motion for leave to file motion to
vacate award dated May 7, 2010 filed oral-
ly on July 15, 2010, entered on OCT.- 1,
2010, Judgment is hereby entered in con-
formity with the arbitration award filed on
May 18, 2010 in accordance with Section

393

with the arbitration award ... in favor of
[HSTA] and against [the State]”; “judgment
is entered as to all claims ... and resolves all
claims”; “[nJo claims or parties remain”; and
“[alny and all remaining claims, if any, are
dismissed with prejudice.” Given its proce-
dural conformity and clear, unambiguous lan-
guage, the October judgment cannot be in-
terpreted as anything other than what it was
entitled—a judgment. See Wohlschlegel v.
Uhlmann-Kihei, Inc, 4 Haw.App. 123, 180,
662 P.2d 505, 511 (1988) “Obviously, a court
order which is unambiguous and certain on
its face leaves no room for construction.”), As
such, the State’s argument that the October
judgment was merely a “non-final, interim
judgment” has no basis in the law or facts,

3. The ICA did not err in concluding
that the October judgment was final
despite the State’s contention that
“outstanding issues” existed.

I Third, the State argues that, even if
the October judgment appeared to be initial-
ly final, the existence of outstanding issues
rendered it non-final. The State relies on

658A-25(a), Hawaii Revised Statutes, in fa-

vor of the Hawaii State Teachers Associa-

tion and against Employer, State of Ha-
waii, Department of Education.

This judgment is entered as to all claims
raised _by the parties, and it resolves all
claims by and against the parties in the
above-entitled case. No claims or parties
remain. Any and_all remaining claims, if
any, are dismissed with prejudice.

(Formatting altered) (emphasis added).

It is unclear how the October judgment
could be interpreted as anything other than a
final judgment. It was titled “JUDGMENT,”
entered in accordance with HRS § 658A-
25(a), which provides authority for courts to
enter judgments on arbitration awards, and
filed on October 1, 2010 pursuant to HRCP
Rule 58. Additionally, the language of the
judgment is plain and unambiguous. The
judgment states in no uncertain terms:
“{jludgment is hereby entered in conformity

12. Louise contended that she was a co-owner of
and had an interest in the subject property. Id. at

Contrades v. Reis, 112 Hawai‘i 367, 145 P.8d
910 (App. 2006), for this argument.

In Contrades, the plaintiff (John) filed an
action against a property owner, alleging co-
ownership of a parcel of land, Id, at 368, 145
P.8d at 911, After the circuit court entered
an order and judgment in favor of the defen-
dant, two significant filings were made: 1)
John filed a timely motion for reconsidera-
tion that stayed the finality of the judgment,
and 2) another party (Louise) filed a motion
to intervene as a counterclaim defendant.”
Id, The circuit court orally granted Louise’s
motion to intervene before entering a written
order denying John’s motion for reconsidera-
tion. Id. at 368-69, 145 P.8d at 911-12. Now a
party to the case, Louise moved to set aside
the court’s judgment, arguing that it was no
longer a final judgment pursuant to HRCP
Rule 58 because it did not resolve all issues
and claims. Id. at 369, 145 P.3d at 912. Addi-
tionally, both Louise and John filed notices of
appeal from the circuit court’s judgment. Id.

368 n.3, 145 P.3d at 911 n.3.

394

The circuit court denied Louise’s motion to
set aside the judgment. Id, at 870, 145 P.8d
at 918.

On appeal, the ICA explained that “a judg-
ment, order, or decree may not be appealed
unless it is final” and that “[glenerally, a
judgment, order, or decree is not final unless
it completely adjudicates all the claims or
rights and liabilities of all the parties.” Id.
(quoting Sturkie v. Han, 2 Haw, App. 140,
145-46, 627 P.2d 296, 301 (1981)), Then, the
ICA concluded that:

prior to the time Louise and John filed

their notices of appeal, Louise had become

a party. When Louise and John filed their

notices of appeal, Louise was a party but

her defenses and affirmative defenses re-
mained undecided. All claims against all
parties not having been finally decided
when the notices of appeal were filed, we
do not have appellate jurisdiction,
Id, at 871, 145 P.8d at 914. Therefore, the
ICA dismissed the appeal for lack of appel-
late jurisdiction, Id.

The State argues that the Contrades case
“fg similar to the present case” and points
out that, in Contrades, the existence of an
intervening party with new claims after the
filing of the judgment destroyed the judg-
ment’s finality. However, the current case
can be distinguished from Contrades in a
number of ways. First, Contrades involved
an intervening party who raised new claims
after the judgment was filed. The circuit
court granted Louise’s motion to intervene
before disposing of the motion for reconsid-
eration; as a matter of law, the judgment did
not resolve all claims in the Contrades case,

In contrast, in the current case, subse-
quent to the October judgment, there were
no new parties or new claims. Instead, new
motions were filed seeking a different dispo-
sition of the same claims. Additionally, the
State’s motion to vacate award and motion to
modify award were both filed in July of 2010,
before the circuit court entered its October
judgment. The hearing on the State’s motion
to modify was held in July, and the hearing
on the State’s motion to vacate was held in
September, both before the October judg-
ment, Unlike in Contrades, where the court
‘was unaware of another party's claims until a

motion to intervene was filed, the circuit
court in the current case knew of the State’s
arguments regarding the arbitrator's award
of interest before it entered the October
judgment as to “all claims raised by the
parties.”

Thus, unlike in Contrades, no new parties
or claims were brought to the attention of
the court prior to the judgment becoming
final. The State’s argument that “outstanding
issues” eviscerated the finality of the October
judgment is unpersuasive.

4, The ICA erred in concluding that the
cireuit court did not have the au-
thority to enter a subsequent judg-
ment after HSTA filed a motion to
amend; however, such error was
harmless because the ICA also ad-
dressed the substantive issues.

HM Finally under this point, the State
argues that, even if the October judgment.
was initially final, it was subsequently set
aside or rendered non-final by HSTA’s mo-
tion to alter or amend.

This argument has merit. The procedural
history of this case, although convoluted,
clearly shows that the circuit court entered a
subsequent final judgment in February 2011,
and that this final judgment was properly
entered after an appropriate motion by
HSTA.

Parties have many tools at their disposal in
dealing with an unfavorable judgment. For
instance, pursuant to HRCP Rule 59, a party
may petition for a new trial or file a motion
to alter or amend a judgment. Specifically,
HRCP Rule 59(e) (2000) provides that “[alny
motion to alter or amend a judgment shall be
filed no later than 10 days after entry of the
judgment.” Additionally, pursuant to HRAP
Rule 4(a)(1) (2016), a party may file a notice
of appeal “within 30 days after entry of the
judgment or appealable order.”

While neither party appealed the October
judgment, HSTA did file a timely post-judg-
ment motion pursuant to HRCP Rule 59(e)
seeking to amend the October judgment.
This motion was filed on October 11, 2010,
within the ten day window mandated by
HRCP Rule 59(¢). On January 31, 2011, the

circuit court entered an order granting
HSTA’s motion to amend the October judg-
ment.!3 While this order did not touch on the
interest issue, it did note that “[aJn amended
judgment consistent with this order shall be
filed at an appropriate time,” On February
24, 2011, the circuit court entered a final
judgment, which expressly entered judgment
on six orders:

Pursuant.to the 1) Order Granting In
Part And Denying In Part Motion To Con-
firm Arbitration Award, Entry Of Judg-
ment And Allowing Costs And Other Ap-
propriate Relief Filed On May 18, 2010,
entered on October 1, 2010, 2) Order De-
nying Employer’s Motion To Modify Or
Correct Award Dated May 7, 2010, Filed
On July 18, 2010, entered on October 1,
2010, 8) Order Denying Employer’s Motion
For Leave To File Motion To Vacate
Award Dated May 7, 2010, Filed Orally On
July 15, 2010, entered on October 1, 2010,
4) Minute Order on Decision Regarding
HSTA’s Motion to Allow Attorney's Fees
and Costs, filed January 8, 2011, 5) Order
Denying HSTA’s Motion For Reconsidera-
tion Of Employer’s Motion To Vacate In
Part Award Dated May 7, 2010, filed Janu-
ary 4, 2011, 6) Order Granting Employer's
Motion To Vacate In Part Award Dated
May 7, 2010, filed January 4, 2011, Final
Judgment is hereby entered in accordance
with Section 658A-25(a) Hawaii Revised
Statutes, in favor of Hawaii State Teachers
Association (HASTA) and against Employer,
State of Hawai'i, Department of Education
(DOF) on the reinstatement and back pay
to the grievant in conformity with the arbi-
tration award filed on May 18, 2010, and in
favor of the DOB and against HSTA on
the 10% interest on the back pay in the
arbitration award and_on HSTA’s request
for fees.

This final judgment is entered as to all
claims raised by the parties, and it resolves
all claims by and against the parties in the
above-entitled case. No claims or parties
remain.

(Emphasis added.)
Thus, HSTA’s motion to amend the Octo-
ber judgment essentially opened the door for

13. The ICA’s HSTA II opinion explained that,
under this court’s decision in Sakuma, the Janu-
ary 31, 2011 order constituted the effective dis-

395

the circuit court to enter another judgment,
one that was unfavorable to HSTA. See
Wong v. Wong, 79 Hawai'i 26, 30, 897 P.2d
958, 957 (1995) (“Once a valid judgment is
entered, the only means by which a circuit
court may thereafter alter or amend it is by
appropriate motion under HRCP 59(e).”), As
such, the ICA erred in concluding that the
circuit court lacked authority to enter the
February judgment,

HN However, regardless of whether the
ICA erred in ultimately concluding that the
October judgment was the final judgment in
this case, such an error is harmless because
the ICA then went on to address the sub-
stantive claims: “Even assuming, arguendo,
that the Cireuit Court could have vacated in
part the Award, after entering the 10/1/10
Judgment on the Order Confirming Award,
we conclude that the Circuit Court erred in
doing so in this case.” HSTA II, 2016 WL
5719745, at *9. The ICA subsequently provid-
ed an in-depth analysis for this conclusion.
Id, at *9-10.

As such, our disposition of this case turns
on the ICA’s analysis and ultimate conclusion
as to the substantive issues, as detailed in the
following section,

B. The Arbitrator’s Award of Prejudg-
ment Interest

The State argues that even if the ICA did
not err on the procedural issues, it did err in
its resolution of the substantive issues. Ac-
cording to the State, the ICA erred in up-
holding the arbitrator's award of prejudg-
ment interest for two reasons. First, the
State contends that the ICA erred when it
concluded that the award of prejudgment
interest did not violate the doctrine of sover-
eign immunity. Second, the State contends
that the ICA erred in not applying the public
policy exception to arbitrations, As such, the
State asserts that the circuit court properly
vacated the arbitrator’s award of prejudg-
ment interest.

position of HSTA’s motion. HSTA II, 2016 WL
5719745, at *7, 388 P.3d 900.

396

Before addressing the State’s substantive
arguments here, an overview of the statutory
framework for vacating an arbitration award
provides useful context.

“[JJudicial review of an arbitration award
is confined to the ‘strictest possible limits,’
and a court may only vacate an award on the
grounds specified in HRS § 658A-23 and
modify or correct on the grounds specified in
HRS § 6584-24.” SHOPO, 185 Hawaii at
461, 358 P.8d at 1008 (alteration in original)
(quoting Daiichi, 108 Hawai'i at 886, 82 P.3d
at 422).

HRS § 658A-28 provides six grounds that
a court can rely on when vacating an arbitra-
tion award:

(a) Upon motion to the court by a party

to an arbitration proceeding, the court

shall vacate an award made in the arbitra-
tion proceeding if:
(1) The award was procured by corrup-
tion, fraud, or other undue means;
(2) There was:
(A) Evident partiality by an arbitra-
tor appointed as a neutral arbitrator;
(B) Corruption by an arbitrator; or
(C) Misconduct by an arbitrator
prejudicing the rights of a party to the
arbitration proceeding;
(8) An arbitrator refused to postpone
the hearing upon showing of sufficient
cause for postponement, refused to con-
sider evidence material to the controver-
sy, or otherwise conducted the hearing
contrary to section 658A-15, so as to
prejudice substantially the rights of a
party to the arbitration Proceeding;
(4) An arbitrator exceeded the arbitra-
tor’s powers;
(6) There was no agreement to arbi-
trate, unless the person Participated in
the arbitration proceeding without rais-
ing the objection under section 658A-
15(c) not later than the beginning of the
arbitration hearing; or
(6) The arbitration was conducted with-
out proper Notice of the initiation of an
arbitration as required in section 658A-9
so as to prejudice substantially the
rights of a party to the arbitration pro-
ceeding.

HH In this case, the relevant subsection
of this statute is part (a)(4) because the State
contends that the arbitrator's interest award
“exceeded the arbitrator's powers.” “In de-
termining whether an arbitrator has exceed-
ed his or her authority under the agreement,
‘there should be no second guessing by the
court’ of the arbitrator’s interpretation of his
or her authority so long as the arbitrator’s
interpretation ‘could have rested on an inter-
pretation and application of the agreement.’”
SHOPO, 135 Hawai'i at 463, 353 P.3d at 1005
(quoting Local Union 1260 Int'l Bhd. of Elec,
Workers v. Hawaiian Tel. Co., 49 Haw. 58,
56, 411 P.2d 184, 136 (1966)).

We now address the State’s specific argu-
ments regarding the arbitrator’s award of
prejudgment interest.

1. The ICA correctly concluded that
the State waived its sovereign immu-
nity in the arbitration proceedings.

HM “The doctrine of sovereign immunity
‘refers to the general rule, incorporated in
the Eleventh Amendment to the United
States Constitution, that a state cannot be
sued in federal court without its consent or
an express waiver of its immunity. The doc-
trine also precludes such suits in state
courts.” Nelson _v. Hawaiian Homes
Comm’n, 130 Hawai‘i 162, 168, 807 P.3d 142,
148 (2013) (quoting Sierra Club _v. Dep’t of
Transp., 120 Hawai'i 181, 225-26, 202 P.8d
1226, 1270-71 (2009)). See also Taylor-Rice v.
State, 105 Hawai'i 104, 109, 94 P.8d 659, 664
(2004) (“[T]he State’s liability is limited by its
sovereign immunity, except where there has
been a ‘clear relinquishment’ of immunity
and the State has consented to be sued.”
(quoting Bush v. Watson, 81 Hawai'i 474, 481,
918 P.2d 1180, 1187 (1996))). When determin-
ing whether the State has waived its sover-
eign immunity, Hawai‘i has adopted the fol-
Jowing guidance from federal law:

(1) a waiver of the Government’s sovereign
immunity will be strictly construed, in
terms of its scope, in favor of the sover-
eign; (2) a waiver of sovereign immunity
must be unequivocally expressed in statu-
tory text; (8) a statute’s legislative history
cannot supply a waiver that does not ap-

pear clearly in any statutory text; (4) it is
not a court’s right to extend the waiver of
sovereign immunity more broadly than has
been directed by the [legislature]; and (5)
sovereign immunity is not to be waived by
policy arguments[.]
Kaleikini v. Yoshioka, 129 Hawai'i 454, 467,
304 P.8d 252, 265 (2018) (alteration in origi-
nal) (quoting Taylor-Rice, 105 Hawai‘i at 110,
94 P.3d at 665).

HM The State argues that the ICA erred
in holding that the State had waived its
sovereign immunity with respect to the arbi-
trator’s award of interest against the State,
According to the State, the ICA’s decision
regarding sovereign immunity directly con-
flicts with HRS § 661-8 (1993), and two
Hawai'i cases: Taylor-Rice and Garner _v.
State Dep’t of Educ. 122 Hawai'i 150, 228
P.8d 215 (App. 2009). The State contends
that these two cases held that a general
waiver of sovereign immunity is not enough
to specifically waive sovereign immunity as to
prejudgment interest and that “any waiver of
sovereign immunity is to be strictly con-
strued in favor of the State.”

In Taylor-Rice, this court considered the
following question in the context of a tort
case: “Whether Appellee State of Hawai'i, as
a joint and several judgment debtor to [the
plaintiffs] under [HRS § ] 668-10.9 ... must,
pay statutory interest on the full value of the
judgment per [HRS] § 478-8, or may pay
only limited interest under section 662-8?”
105 Hawai‘ at 109, 94 P.8d at 664 (alteration
in original). This court concluded that the
State was not required to pay prejudgment
interest for three reasons. First, this court
noted that “the State was not found to be
jointly and severally liable for prejudgment
interest on the plaintiffs’ damages.” Id. at
110, 94 P.8d at 665. Second, this court ex-
plained that the plaintiffs waived this claim
because they did not challenge the circuit
court’s failure to hold the State liable for
prejudgment interest. Id. at 111, 94 P.8d at
666, Finally, this court noted that “HRS

14, HRS § 661-8 (1993) provides that “[nJo inter-
est shall be allowed on any claim up to the time
of the rendition of judgment thereon by the
court, unless upon a contract expressly stipulat-
ing for the payment of interest, or upon a refund
of a payment into the ‘litigated claims fund’ as

397

§ 662-2 provides in clear and unambiguous
Janguage that ‘the State ... shall not be
liable for interest prior to judgment’” and
that this “constitutes a plain reservation of
immunity with respect to pre-judgment inter-
est on judgments rendered against the
State.” Id.

Similarly, in Garner, the ICA held that the
State had not waived its sovereign immunity
from an award of prejudgment interest in a
case brought by a class action of substitute
teachers seeking backpay. 122 Hawai'i at
162-63, 223 P.3d at 227-28, The circuit court
held that the doctrine of sovereign immunity
did not bar the plaintiffs’ claim for breach-of-
contract damages, but that it did bar the
plaintiffs’ claim for prejudgment interest. Id.
at 156, 228 P.3d at 221. The ICA affirmed the
cireuit court on these issues. Citing HRS
§ 661-8, which provides that “[nJo interest
shall be allowed on any claim [against the
State] up to the time of the rendition of
judgment thereon by the court,” the ICA
determined that the circuit court did not err
in denying the substitute teachers’ request
for prejudgment interest. Id. at 163, 223 P.3d
at 228,

While both Taylor-Rice and Garner hold
that prejudgment interest cannot be awarded
against the State in court proceedings, nei-
ther of these cases address the issue of pre-
judgment interest in arbitration proceedings.
As such, they are distinguishable from the
case before us. This court has not reached
the specific issue presented in the current
case; however, other jurisdictions, including
the federal district court of Hawai'i, have
considered this issue.

In Kenneth H. Hughes, Ine. v. Aloha Tow-
er Development, Corp., 654 F.Supp.2d 1142
(D. Haw. 2009), the United States District
Court for the District of Hawai'i (district
court) considered an issue almost identical to
the one before this court. Hughes involved an
arbitration award for damages relating to a
contract dispute between the State of Hawai'i

provided by law.” This court has held that this
statute immunizes the State against awards of
interest unless the State has expressly or statuto-
rily waived its sovereign immunity. Chun v, Bd.
of Trs. of Emps.’ Ret. Sys., 106 Hawai'i 416, 433,
106 P.3d 339, 356 (2005).

398

and a Texas corporation, Hughes, over the
development of the Aloha Tower complex in
Honolulu. Id, at 1144-45, After the project,
failed, Hughes filed a demand for arbitration
pursuant to their Development Agreement,
which required that disputes be brought be-
fore a mediator or arbitrator within the juris-
diction of the Federal Arbitration Act (FAA).
Id, at 1145. The arbitrator awarded Hughes
over $900,000 in reliance damages, over
$270,000 in pre-award interest, and more
than $60,000 in attorneys’ fees and costs. Id.
The State filed a motion to vacate or modify
the arbitration award with the district court,
arguing, inter alia, that the award of interest
violated the State’s sovereign immunity.

Before addressing the issues before it, the
district court explained that the FAA “pro-
vides limited circumstances under which a
federal court may vacate or modify a binding
arbitration award” and that “[t]his authority
is extremely narrow and designed to pre-
serve due process but not to permit unneces-
sary intrusion into private arbitration proce-
dures,” Id, The district court also noted that
9 U.S.C. § 10(a)4) provides that a federal
court may vacate an arbitration award
“where the arbitrators exceeded their powers,
or so imperfectly executed them that a mutu-
al, final, and definite award upon the subject
matter submitted was not made.” Id, at 1146.
The district court further explained that the
“Ninth Circuit has interpreted Section (4) of
the FAA, when an arbitrator exceeds its
powers, to encompass situations where an
arbitrator’s decision is ‘completely irrational’
or exhibits a ‘manifest disregard of law.’” Id.
(quoting Kyocera Corp. v. Prudential-Bache
Trade Servs., 841 F.8d 987, 997 (@th Cir,
2008).

In analyzing the State’s sovereign immuni-
ty claim, the district court construed the
State’s argument to be that the arbitrator
exceeded his power under 9 U.S.C. § 10(a)(4)
of the FAA, Id. at 1148, The district court
explained that, in order to prevail, the State
“must demonstrate that the arbitrator's deci-
sion to include interest was ‘completely irra-
tional’ or exhibited a ‘manifest disregard of
law’ in violation of the State’s sovereign im-
munity protections.” Id, at 1148-49, The dis-
trict court concluded that the State “failled]

to meet this exceedingly high burden” for the
following reasons. Id. at 1149.

First, the district court explained that,
while Hawai'i law does prohibit courts from
awarding prejudgment interest, there is no
Hawai‘i law that prohibits arbitrators from
making such awards:

Respondent relies on case law and Ha-
waii statute regarding pre- and post-
judgments made in a court of law as evi-
dence of the arbitrator’s error. But the
arbitrator’s decision is not a judgment of a
court of law. Hawaii Revised Statutes
(“HRS”) section 661-8, relied on by Re-
spondent, states that: “No interest shall be
allowed on any claim up to the time of the
rendition of judgment thereon by the court,
unless upon a contract expressly stipulat-
ing for the payment of interest.” The arbi-
tration demand was not a claim and the
award was not a judgment by the court,
and therefore HRS § 661-8 is not control-
ling.

Td

Second, the district court determined that
the State “explicitly availed itself of arbitra-
tion.” Id, The district court explained that
the agreement that the State and Hughes
entered into stated that “any claims or dis-
putes, not resolved in good faith, may be
brought before a mediator or arbitrator with-
in the jurisdiction of the FAA.” Id. As such,
the district court determined that “the arbi-
trator did not manifestly disregard the law
when determining that the State waived sov-
ereign immunity as to interest in conjunction
with its waiver as to damages,” Id, The dis-
trict court explained its reasoning for this
determination:

Because the FAA explicitly lists the

grounds upon which a court may vacate,

courts will not find a manifest disregard of
the law where an arbitrator merely inter-
prets or applies the governing law incor-
rectly, and confirmation is required even if
an arbitrator makes an erroneous finding
of fact.... Rather, “it must be clear from
the record that the arbitrators recognized
the applicable law and then ignored it.”
Id, at 1146 (quoting Mich. Mut. Ing, Co. v.
Unigard Sec, Ins, Co., 44 F.8d 826, 882 (9th
Cir, 1995)),

Although not controlling, Hughes is per-
suasive for three reasons. First, the FAA’s
statutory framework analyzed in Hughes is
nearly identical to that of Hawaii’s Uniform
Arbitration Act, For instance, under both the
FAA and HRS Chapter 658A, courts may
vacate arbitration decisions where, inter alia,
“the arbitrators exceeded their powers.” 9
US.C, § 10(a); see also HRS § 658A-
28(a)(4). Similarly, under both the FAA and
HRS Chapter 658A, courts may modify or
correct an arbitration award on three
grounds: where there was a mathematical
miscalculation of the award, where there was
an award on a claim or matter not submitted
to the arbitrator, or where the award was
“imperfect in matter of form not affecting the
merits of the controversy.” 9 U.S.C. § 11; see
also HRS § 658A-24(a),

In both Hughes and the current case, the
State claimed that the arbitrator had exceed-
ed his authority in awarding the prevailing
party prejudgment interest. According to the
district court, an arbitrator exceeds its pow-
ers only when the arbitrator's decision is
“completely irrational” or “exhibits a mani-
fest disregard for the law.” Hughes, 654
F.Supp.2d at 1146, Although Hawaii courts
use a different standard for determining
whether an arbitrator has exceeded his or
her powers, the standard is similar in that it
strongly curtails the court’s ability to vacate
an arbitrator's award on such grounds: “In
determining whether an arbitrator has ex-
ceeded his or her authority under the agree-
ment, ‘there should be no second guessing by
the court’ of the arbitrator's interpretation of
his or her authority so long as the arbitra-
tor’s interpretation ‘could have rested on an
interpretation and application of the agree-
ment.’ ” SHOPO, 135 Hawai'i at 468, 353 P.38d
at 1005 (quoting Local Union 1260, 49 Haw.
at 56, 411 P.2d at 186), As such, although the
district court relied, in part, on the FAA in
reaching its decision, Hawaii's arbitration law
mirrors the federal law in important ways.

HH Second, the district court’s analysis
of the applicability of HRS § 661-8 to arbi-
tration proceedings is reasonable and sup-
ported by the statutory framework of HRS
Chapter 658A. The language of HRS § 661-8

399

clearly states that interest shall not be
awarded against the State through a “judg-
ment thereon by the court.” HRS § 661-8
does not state that an arbitrator is prohibited
from awarding prejudgment interest against
the State. This reading is supported by HRS
§ G58A-21(c) (Supp. 2010), which provides
that arbitrators are authorized to award rem-
edies a court might be prohibited from grant-
ing:

As to all remedies other than those au-
thorized by subsections (a) and (b), an
arbitrator may order such remedies as the
arbitrator considers just_and_ appropriate
under the circumstances of the arbitration
proceeding. The fact that such a remedy
could not or would not be granted by the
court is not_a ground for refusing to _con-
firm an award under section 658A-22 or for
vacating an award under section 658A-23.

(Emphasis added.) Thus, HRS § 661-8 ap-
pears to be inapplicable in the arbitration
context under the facts of this case.

Third and finally, as in Hughes, the State
in the current case availed itself of the arbi-
tration proceedings. The district court in
Hughes noted that the State “explicitly
availed itself of arbitration in paragraph 21 of
the Development Agreement,” which stated
that “any claims or disputes, not resolved in
good faith, may be brought before a mediator
or arbitrator within the jurisdiction of the
FAA.” Hughes, 654 F.Supp.2d at 1149.

HM Similarly, in the current case, the
State was a party to the collective bargaining
agreement, which explicitly provided for dis-
putes to go to arbitration and stated that
“(t]he arbitrator may award back pay to com-
pensate the teacher wholly or partially for
any salary lost.” This court has recognized
that “arbitrators have the authority to make
an award of interest as part of the determi-
nation of the total amount of compensation
to which the prevailing party is entitled” and
that prejudgment interest is “an element of
complete compensation.” Hamada v. West-
cott, 102 Hawaii 210, 217, 74 P.8d 83, 40
(2008) (quoting Kalawaia v. AIG Haw. Ins,
Co,, 90 Hawai'i 167, 172-78, 977 P.2d 175,

400

180-81 (1999)).15 Thus, under Hawaii law, the
arbitrator’s interpretation of “wholly com-
pensate” was a reasonable reading of the
agreement and the arbitrator did not exceed
his authority in awarding prejudgment inter-
est against the State, See also State v. Alas-
ka Pub, Emps, Ass’n, 199 P.8d 1161, 1165
(Alaska 2008) (“Considering the closeness of
this question, the policy favoring effective
arbitration, and the fairness of awarding in-
terest, we are unable to conclude that the
arbitrator’s decision to award prejudgment
interest against the State was gross error.”);
John Rocchio Corp. v. Town of Coventry, 919
A2d 418, 419-20 (R.I. 2007) (upholding an
arbitrator's award of prejudgment interest
against a town after noting that the court has
limited authority to vacate an arbitration
award),

Given the broad discretion afforded to ar-
bitrators and the strict limits confining judi-
cial review of arbitration awards, the State’s
argument that the arbitrator exceeded his
powers is unavailing. For these reasons, the
ICA did not err in concluding that the State
waived its sovereign immunity in the arbitra-
tion proceedings, even as to the issue of
interest.

2. The ICA correctly concluded that
the public policy exception to arbi-
trations does not apply in this case.

HH The State argues that the ICA also
erred when it “ignored the public policy ex-
ception” to arbitration awards. The State
contends that sovereign immunity is an ex-
plicit public policy and that the violation of
the public policy exception was “clearly
shown” when “the arbitrator awarded pre-
judgment interest despite the fact that the
Collective Bargaining Agreement did not ‘ex-
pressly’ provide for interest and despite the
rule requiring strict construction of waiver.”

15. This court in Kalawaia concluded that
“where the entire dispute is submitted to arbitra-
tion and pre-award interest is not specifically
excluded by contract, arbitrators have the au-
thority to make an award of interest as part of
the determination of the total amount of com-
pensation to which the prevailing party is enti-
tled.” 90 Hawai'i at 173 n.11, 977 P.2d at 181
n.11. This court explained that this conclusion

Hawai'i recognizes a “limited
public policy exception to the general defer-
ence given arbitration awards.” Inlandboat-
men’s Union of the Pac. v. Sause Bros., 77
Hawai'i 187, 194, 881 P.2d 1255, 1262 (App.
1994). Quoting the Supreme Court of the
United States, the ICA explained the excep-
tion:
A court’s refusal to enforce an arbitra-
tor’s award ... because it is contrary to
public policy is a specific application of the
more general doctrine, rooted in the com-
mon law, that a court may refuse to en-
force contracts that violate law or public
policy. [The ‘public policy’ exception] de-
tives from the basic notion that no court
will lend its aid to one who founds a cause
of action upon an immoral or illegal act,
and is further justified by the observation
that the public’s interests in confining the
scope of private agreements to which it is
not a party will go unrepresented unless
the judiciary takes account of those inter-
ests when it considers whether to enforce
such agreements.
Id, at 193, 881 P.2d at 1261 (quoting United
Paperworkers Int'l Union v. Misco, Inc., 484
US. 29, 42, 108 S.Ct. 364, 98 L.Ed.2d 286
(1987)). The publie policy exception is appli-
cable only in cases where enforcing an arbi-
tration award or contract would involve ille-
gality or violate public policy. SHOPO, 135
Hawai'i at 465-67, 358 P.8d at 1007-09; see
also Inlandboatmen, 77 Hawai'i at 194, 881
P.2d at 1262 (providing examples of Hawaii
courts applying the public policy exception).

The publie policy exception is inapplicable
in this case. We have already determined in
the previous section that the State waived its
sovereign immunity as to the arbitration pro-
ceedings. Additionally, we have determined
that the arbitrator operated within his con-
siderable discretion when he interpreted the
collective bargaining agreement to include an
award of prejudgment interest. Thus, an ar-

“s sensible because the award of interest is an
element of compensation, and the entire dispute
has been submitted to arbitration to determine
the amount of compensation due to the injured
party.” Id. The Kalawaia holding supports our
conclusion in the present case, as pre-award
interest was not specifically excluded by the arbi-
tration agreement.

bitrator’s reasonable award against the State
when the State has availed itself of arbitra-
tion and waived its sovereign immunity is not
against public policy or illegal. As such, the
ICA did not err in dismissing the State’s
contention that the public policy exception to
arbitration awards should apply in this case.

C. Attorneys’ Fees and Costs on Appeal

HE “In contrast to compensation award-
ed to a party, the well-accepted ‘American
rule’ is that ‘in absence of contract or statute
a litigant has no inherent right to have his
for her] attorney's fees paid by his [or her]
opponent.’” Hamada, 102 Hawai'i at 217, 74
P.8d at 40 (alteration in original) (quoting
Larsen v. Pacesetter Sys. Inc, 74 Haw. 1, 51,
887 P.2d 1278, 1297 (1992); see_also Sierra
Club, 120 Hawaii at 218, 202 P.8d at 1268
(“(Plursuant to the ‘American Rule,” each
party is responsible for paying his or her
own litigation expenses. This general rule,
however, is subject to a number of excep-
tions: attorney’s fees are chargeable against
the opposing party when so authorized by
statute, rule of court, agreement, stipulation,
or precedent.”)

HM In the current case, the ICA award-
ed HSTA fees and costs incurred at the
appellate level pursuant to HRS § 658A-25,
The State asserts that the ICA erred in this
regard because HRS § 658A-25 does not
provide for an award of fees and costs at the
appellate level.§ This is an issue of first
impression for this court.

1, The ICA did not err in awarding fees
and costs pursuant to HRS § 658A-
25.

HRS § 658A-25 (2016), “Judgment on
award; attorney's fees and litigation ex-
penses,” provides in full:

16. The State presents two other arguments under
this section. First, the State argues that HSTA
should not have prevailed on appeal and is there-
fore not entitled to fees and costs. Because we
held in the previous section that the ICA did not
err in concluding that HSTA was the prevailing
party on appeal, we do not address this argu-
ment further. Second, the State argues that sov-
ereign immunity protects the State against an
award of attorneys’ fees and costs. This argument
also fails because HRS § 658A-25 expressly al-
lows for an award of fees and costs to the pre-

401

(a) Upon granting an order confirming,
vacating without directing a rehearing,
modifying, or correcting an award, the
court shall enter a judgment in conformity
therewith, The judgment may be recorded,
docketed, and enforced as any other judg-
ment in a civil action.

(b) A court may allow reasonable costs of
the motion and subsequent judicial pro-
ceedings.

(©) On application of a prevailing party to
a contested judicial proceeding under sec-
tion 658A-22, 6584-23, or 6584-24, the
court may add reasonable attorney’s fees
and other reasonable expenses of litigation
incurred in a judicial proceeding after the
award is made to a judgment confirming,
vacating without directing a rehearing,
modifying, or correcting an award.

HM The State points out that “court” is
defined as “any district or circuit court of
competent jurisdiction in this State, unless
otherwise indicated.” HRS § 658A-1 (2016).
The State contends that HRS § 658A-25(b)
and (c), when read in conjunction with the
definition section found in HRS § 658A-1,
provide for an award of fees and costs only at
the circuit or district court level.

However, the legislative history reveals
that the statute was not intended to be inter-
preted so narrowly. The Hawai‘ legislature
enacted Chapter 658A in 2001 in order to
“standardize Hawaii’s arbitration laws with
those used in other states by replacing the
current statutory chapter on arbitration and
awards with the Uniform Arbitration Act.”
Conf. Comm. Rep. No. 115, in 2001 House
Journal, at 1098, 2001 Senate Journal, at 905.
Under its original iteration in 2001, “court”
was defined as “the circuit court of the ap-
propriate judicial circuit in this State, unless

vailing party in a contested judicial proceeding.

The State availed itself of HRS Chapter 658A

when it entered into an arbitration agreement

with HSTA; this serves as a statutory waiver of
the State’s sovereign immunity with regard to
attorneys’ fees and costs under the Chapter as

well. See Sierra Club, 120 Hawai'i at 228-29, 202

P.3d at 1273-74 (holding that a statutory waiver

of the State’s sovereign immunity as to the un-

derlying claim also waives the State’s sovereign
immunity as to attorneys’ fees resulting from the
litigation of that claim),

402

otherwise indicated.” 2001 Haw. Sess. Laws
Act 265, § 1 at 810. In 2006, the legislature
amended the definition to include district
courts for the following reasons:

Under the existing laws, the district
courts have exclusive jurisdiction over civil
claims in which the disputed amount is
$10,000 or less. However, the cireuit courts
have exclusive jurisdiction over disputes
subject to arbitration regardless of the
amount in dispute. Many disputes subject
to arbitration are well below the $10,000
limit at which the district courts would
normally have jurisdiction, The legislature
finds that this is not an economical or
efficient use of judicial resources and it
discourages the use of arbitration in the
area of small disputes, Therefore, the mere
existence of an arbitration agreement
should not impact which court has jurisdic-
tion over civil claims.

The purpose of this Act is to give the
district courts jurisdiction over civil actions
subject to arbitration agreements where
the amount in dispute is less than $10,000,
unless the arbitration is subject to chapter
89, chapter 877, or the National Labor
Relations Act.

2006 Haw. Sess, Laws Act 72, § 1 at 128.

The legislative history shows that the leg-
islature, in defining “court,” was interested in
articulating which court had jurisdiction over
the arbitration proceedings when the litiga-
tion was initiated; nothing in the legislative
history indicates that the legislature intended
that “court” be limited to the district or
cireuit courts after these initial proceedings
were appealed.

This interpretation is supported by the
commentary to the 2000 Revised Uniform
Arbitration Act (UAA), which HRS Chapter
658A is modeled after. Under the UAA,
“court” is defined as “a court of competent
jurisdiction in this State.” Unif. Arbitration
Act § 1 (Nat'l Conference of Comm'rs on
Unif. State Laws 2000). Significantly, the

17. HRS § 658A-25(c) was modeled after UAA
§ 25(c) and the two sections are nearly identical,
UAA § 25(c) provides:

On [application] of a prevailing party to a
contested judicial proceeding under Section
22, 23, or 24, the court may’add reasonable

commentary to this section explains that
“{dlifferent States determine which court in
its system has jurisdiction over arbitration
matters in the first instance.” UAA § 1 emt.
n.8 (emphasis added). As such, the UAA
directs states to define “court” in order to
resolve the issue of which court, district or
circuit, a party turns to when initially con-
testing an arbitration award.

Additionally, commentary to UAA § 2517
explains the policy behind allowing courts to
award attorneys’ fees and costs in a contest-
ed judicial proceeding. Notably, the policy
articulated in the commentary applies equal-
ly to trial and appellate courts reviewing
arbitration awards:

Section 25(¢) promotes the statutory pol-
icy of finality of arbitration awards by
adding a provision for recovery of reason-
able attorney’s fees and reasonable ex-
penses of litigation to prevailing parties in
contested judicial actions to confirm, va-
cate, modify or correct an award, Potential
liability for the opposing parties’ post-
award litigation expenditures will tend to
discourage all _but_the most meritorious
challenges of arbitration awards, If a party
prevails in a contested judicial proceeding
over an arbitration award, Section 25(c)
allows the court discretion to award attor-
ney’s fees and litigation expenses.

UAA § 25 cmt, n3 (emphasis added). As
such, attorneys’ fees serve the purpose of
discouraging a party from a nonmeritorious
challenge to an arbitration award; this holds
true even for appellate proceedings, as other
jurisdictions have noted.

For instance, in Blitz v. Beth Isaac Adas
Israel Congregation, 852 Md. 31, 720 A.2d
912, 920 (1998), the Court of Appeals of
Maryland concluded that, under a statute
substantially similar to HRS § 658A-25, “the
prevailing party is entitled to recover attor-
neys’ fees incurred both at trial and on ap-
peal in confirming and enforcing an arbitra-
tion award.” In making this decision, the
Maryland court noted that there was a “sig-
nificant difference” between the initial arbi-

attorney's fees and other reasonable expenses
of litigation incurred in a judicial proceeding
after the award is made to a judgment con-
firming, vacating without directing a rehear-
ing, modifying, or correcting an award.

tvation proceedings, where attorneys’ fees
are only allowed if provided for in the arbi-
tration agreement, and the subsequent con-
firmation proceedings. Id, at 917. In the con-
firmation proceedings, the Maryland court
explained that the UAA specifically provides
for attorneys’ fees because such a policy en-
courages speedy resolutions of arbitration
disputes, Id, at 917-18, The Maryland court
also noted that other jurisdictions have rec-
ognized the importance of preventing drawn-
out confirmation proceedings:

‘The interpretations of our sister states also

promote the public policy of encouraging

early payment of valid arbitration awards
and the discouragement of nonmeritorious
protracted confirmation challenges. The
prefatory comment to the 1954 draft of the

Uniform Arbitration Act stated that court

intervention in arbitration ‘must be prompt

and simple or the values of arbitration will

be largely dissipated through prolonged

litigation’
Id, (quoting Canon Sch. Dist. No, 50 v.
W.E.S. Constr, Co., 180 Ariz, 148, 882 P.2d
1274, 1279 (1994)); see also Buzas Baseball,
Ine, v. Salt_Lake Trappers, Inc. 925 P.2d
941, 952-53 (Utah 1996) (holding that peti-
tioners, who had received an arbitration
award, were entitled to reasonable attorneys’
fees incurred in defending the award on ap-
peal under the Utah Arbitration Act).

Given the legislative history of HRS Chap-
ter 658A, the language and commentary of
the UAA, and the guidance offered by other
jurisdictions, we conclude that the ICA did
not err in awarding HSTA attorneys’ fees
and costs on appeal pursuant to HRS
§ 658A-25.

V. CONCLUSION

For the reasons stated above, the ICA’s
November 21, 2016 judgment on appeal,
which 1) vacated in part the circuit court’s
February 24, 2011 final judgment, 2) re-
versed the circuit court’s January 4, 2011
orders, 8) affirmed the circuit court’s Janu-
ary 81, 2011 order, and 4) granted HSTA’s
request for fees and costs, is affirmed.

403

400 P.3d 604
BANK OF NEW YORK MELLON fka

Bank of New York, Not In Its Individual
Capacity but solely as Trustee for Bene-
fit of Certificate Holders of CWMBS
2006-10 Trust, Mortgage Pass Through
Certificates, Series 2006-10, Respon-
dent/Plaintiff-Appellee,

ve
R. ONAGA, INC., A HAWAI‘I COR-

PORATION, Respondent/Defen-
dant-Appellant,
and

Robert Nisperos Marquez; Marlyn Mi-
randa Marquez; Mortgage Electronic
Registrations Systems, Inc, solely as
nominee for Castle & Cooke Mortgage,
LLC, a Hawai‘i corporation; Depart-
ment of Taxation, State of Hawai‘;
United States of America, Department
of the Treasury, Internal Revenue Ser-
vice, Respondents/Defendants-Appellees,

and

Lyle Anthony Ferrara and Linda Susan
Ferrara, Petitioners/Intervenors.
(Civil No, 11-1-2095)

R. Onaga, Inec., a Hawai‘i corporation,
Respondent/Defendant-Appellant,
v
Robert Nisperos Marquez; Marlyn Mi-

randa Marquez; Bank of New York Mel-
lon, Trustee; Mortgage Electronic Regis-
trations Systems, Inc; Department of
Taxation, State of Hawai‘; Internal
Revenue Service, Department of the
Treasury, U.S.A., Respondents/Defen-
dants-Appellees.,

and

Lyle Anthony Ferrara and Linda Susan
Ferrara, Petitioners/Intervenors.
(Civil No. 12-1-1758)

SCWC-14-0000426
Supreme Court of Hawai‘,

DATED: Honolulu, Hawaiti,
August 22, 2017.

404

@y: Recktenwald, C.J., Nakayama,
Pollack, and Wilson, JJ., and Circuit Judge
Kim, in place of McKenna, J., recused)

ORDER DENYING MOTION FOR
RECONSIDERATION

Respondent/Defendant-Appellant R. Ona-
ga, Inc., timely filed a motion for reconsider-
ation (Motion) on August 11, 2017, asking
this court to reconsider our August 3, 2017
opinion (Opinion).

This court, having reviewed the Motion,
together with the Opinion, and the records
and files in this case,

IT IS HEREBY ORDERED that the Mo-
tion is denied,

400 P.3d 605

In the MATTER OF the ESTATE OF
Ethel CAMACHO, Deceased.

In the Matter of the Ethel Camacho
Living Trust dated March 3,
2008,

Nephi Daniel Ioane Camacho,
Petitioner-Appellee,
v.

Beverly J. Calkovsky, Respondent-
Appellant.

NO. CAAP-13-0003397

Intermediate Court of Appeals of Hawai'i.
JULY 31, 2017

|

On the briefs:

Peter Van Name Esser, Honolulu, Ted
HLS. Hong, Hilo, and Darwin L.D. Ching,
Honolulu, for Respondent-Appellant.

Carroll S. Taylor (Taylor, Leong & Chee)
and Michael D, Rudy and Cheryl R. Ng
(MacDonald Rudy Byrns O'Neill & Yamau-
chi), Honolulu, for Petitioner-Appellee.

405

NAKAMURA, CHIEF JUDGE, AND
REIFURTH AND GINOZA, JJ.

OPINION OF THE COURT BY
NAKAMURA, CHIEF JUDGE

Prior to her death in 2008, Ethel Camacho
(Bthel) executed wills in 1998, 2000, and
2004. The 1998 will left Ethel’s entire estate
to her two grandsons, Nephi Daniel Ioane
Camacho (Nephi) and Moses Antonio Ioane
Camacho (Moses), and nominated Nephi as
the personal representative, after Ethel’s
son, the original sole beneficiary of the will,
predeceased her in 1999. The 2000 and 2004
wills left Ethel’s entire estate to her daugh-
ter, Beverly Calkovsky (Beverly), and nomi-
nated Beverly as the personal representative.
After Ethel’s death, Nephi and Beverly en-
gaged in a will contest, with Nephi contend-
ing that the 1998 will was Ethel’s last validly
executed will and Beverly contending that
either the 2000 will or the 2004 will was the
last validly executed will. After a trial, the
jury found that the 2000 will was Ethel’s last
validly executed will.

Nephi had retained lawyers who repre-
sented him on a contingency fee basis, and
because Nephi was unsuccessful in his will
contest, he apparently was not obligated to
pay any attorneys’ fees to his lawyers. How-
ever, it appears that Nephi was obligated to
pay for litigation costs. Nephi filed a motion
for attorneys’ fees and costs pursuant Ha-
waiii Revised Statutes (HRS) § 560:3-720
(2006), which provides:

If any personal representative or person
nominated as personal representative de-
fends or prosecutes any proceeding in good
faith, whether successful or not that per-
son is entitled to receive from the estate
that person’s necessary expenses and dis-
bursements including reasonable attor-
neys’ fees incurred.

Nephi requested a total of $345,736.78 in
attorneys’ fees (including general excise tax)
and $42,754.09 in costs to be paid by Ethel’s
estate, which was valued at approximately
$1.5 million at the time of her death. The
Circuit Court of the First Circuit (Circuit

406

Court)! granted Nephi’s entire request for
attorneys’ fees and costs, and it ordered Eth-
el’s estate to pay Nephi’s lawyers a total of
$388,490.87 in legal fees, general excise tax,
and costs.

Beverly appeals from the “First Amended
Final Judgment” (Amended Judgment),
which entered judgment in favor of Nephi in
the amount of $388,490.87 for attorneys’ fees
and costs, The principal question presented
by this appeal is whether under HRS
§ 560:3-720, Nephi was entitled to recover
attorneys’ fees from Ethel’s estate where
Nephi was not obligated to pay his attorneys
any legal fees because of their contingency
fee agreement. As explained below, we con-
clude that the answer to this question is “no.”
We therefore vacate the Amended Judgment.
to the extent that it entered judgment in
favor of Nephi and against Ethel’s estate for
attorneys’ fees,

It appears that Nephi was obligated to pay
for costs he incurred. We conclude that un-
der HRS § 560:3-720, Nephi was entitled to
an award of his necessary costs. However,
the record is insufficient for us to determine
whether all the costs requested by Nephi
‘were necessary, and we remand the case for
further proceedings on this issue.

BACKGROUND

L

At the outset, we note that Respondent-
Appellant Beverly did not include the trial
transcripts as part of the record on appeal.
This Background Section is therefore based
on information contained in the pleadings
filed by the parties and the non-trial tran-
scripts included in the record,

I

Prior to her death in 2008, Ethel owned
and lived on real property located on 8th
Avenue in Honolulu (the Property), The
Property contained three dwellings, had a
property tax assessment value of $1,463,800
in 2008, and was the primary asset of Ethel’s
estate.

1. The Honorable Patrick W. Border presided

Beginning in 1998, Nephi and his family
lived in one of the dwellings on the Property.
On November 2, 1998, Camacho executed a
“Last Will and Testament of Ethel Camacho”
(1998 Will), The 1998 Will nominated Ethel’s
son, John F, Camacho, Jr. (John), as person-
al representative and bequeathed Ethel’s en-
tire estate to John, The 1998 Will also pro-
vided that if John predeceased Ethel, Nephi
would be nominated as personal representa-
tive, and Ethel’s estate would pass equally to
Nephi and Moses. The 1998 Will provided no
bequest to Hthel’s daughter, Beverly, and it
stated, “I have intentionally not provided for
my other child, Beverly Joyce Calkovsky, as
she has been adequately been [sic] provided
for during my lifetime.” John passed away in
1999, and therefore, under the 1998 Will,
Nephi became the person nominated as per-
sonal representative, and Nephi and Moses
became the devisees of Ethel’s estate.

In 2000, Nephi and his family moved from
the Property. Beverly and Nephi disagree
over the reason for Nephi’s moving. Beverly
asserts that Ethel had a falling out with
Nephi and his wife and that Ethel asked
them to leave. Nephi asserts that after sign-
ing the 1998 Will, Ethel began exhibiting
increasing signs of dementia in 1999 and
early 2000, including the delusion that Nephi
and his wife were attempting to poison Ethel,
which prompted Nephi and his family to
leave the Property in 2000,

In February 2000, Ethel tore up the 1998
Will and signed a notarized affidavit pre-
pared by her lawyer, Lester Oshiro, stating
that she intended to die intestate.

On July 18, 2000, Ethel executed a “Last
‘Will and Testament of Ethel Camacho” (2000
Will), which revoked all prior wills. The 2000
Will nominated Beverly as personal repre-
sentative and bequeathed Ethel’s entire es-
tate to Beverly, On April 1, 2004, Ethel exe-
cuted a “Last Will and Testament of Ethel
Camacho” (2004 Will), which revoked all pri-
or wills. The 2004 Will, like the 2000 Will,
nominated Beverly as personal representa-
tive and bequeathed Ethel’s entire estate to
Beverly.

over the proceedings relevant to this appeal.

On March 38, 2008, Beverly, using a power
of attorney granted by Ethel in 2004, created
a revocable living trust for Ethel (Ethel’s
Trust), and transferred the Property into
Ethel’s Trust. Ethel’s Trust named Beverly
as Trustee and provided that upon Ethel’s
death, the trust estate would be distributed
to Beverly. Ethel passed away on March 18,
2008,

OL

Shortly after Ethel’s death, Nephi filed an
“Application for Informal Probate of Will and
for Informal Appointment of Personal Repre-
sentative” (Informal Probate Application),
Nephi based his claim for priority of appoint-
‘ment as personal representative on his nomi-
nation in Ethel’s 1998 Will and his status as a
devisee under that will and an heir of Ethel.
In the Informal Probate Application, Nephi
stated that “[t]o the best of [his] knowledge,”
the 1998 Will was validly executed and that
“{alfter exercise of reasonable diligence,” he
believed the 1998 Will was Ethel’s last will
and had not been revoked, On April 11, 2008,
the Probate Court Registrar informally ap-
pointed Nephi as personal representative of
Ethel’s estate, Nephi sent notice of his appli-
eation and appointment as personal represen-
tative to Beverly.

After receiving this notice, Beverly filed
objections to Nephi’s application and appoint-
ment, citing Ethel’s 2004 Will, which Beverly
asserted had “superseded” the 1998 Will.
Beverly also cited Ethel’s Trust.

Iv.

Beverly subsequently filed a petition to set
aside and terminate Nephi’s appointment as
personal representative and to have the case
transferred from informal probate to formal
probate, Nephi and Moses filed a response to
Beverly's petition. Their response alleged,
among other things, that “Nephi Camacho
observed in year 2000 that Ethel had devel-
oped profound symptoms of dementia which
2. Nephi and Moses also filed a separate petition

in a trust proceeding seeking the same basic
relief.

3. Prior to trial, the Circuit Court granted sum-
mary judgment for Beverly with respect to Ne-

407

included paranoia, confusion, delusional
thought which included the belief that neigh-
bors were trying to kill her” and that “(dJur-
ing the year 2000, Nephi was told by various
health care providers for Ethel that she was
suffering from progressive dementia.” Nephi
and Moses also alleged that Ethel lacked
testamentary capacity when she executed the
2004 Will; that Beverly exercised undue in-
fluence to cause Ethel to execute the 2004
Will; that Ethel was mistaken as to the con-
tent and meaning of the 2004 Will; and that
Ethel lacked the capacity to contract and
grant Beverly a power of attorney. Nephi
and Moses requested that the case be trans-
ferred to formal probate; that a jury trial be
held to resolve contested matters; that Eth-
el’s 1998 Will be admitted to probate; and
that Ethel’s 2004 Will, the power of attorney
granted to Beverly, Ethel’s Trust, and the
transfer of the Property into Ethel’s Trust
be declared null and void?

The Circuit Court found that Beverly's
petition constituted a contested matter and
transferred it from the regular probate cal-
endar to the civil trials calendar. The case
was set for a jury trial. Prior to trial, Moses
was dismissed as a party from the case.

Beverly’s petition and her opposition to
Nephi’s appointment as personal representa-
tive had been based on Ethel’s 2004 Will.
However, before the initially scheduled trial
date, Beverly disclosed that Ethel had exe-
cuted the 2000 Will. It was also disclosed that
prior to executing the 2000 Will, Ethel had
torn up the 1998 Will and signed an affidavit
on February 7, 2000, stating that she intend-
ed to die intestate,

v.

Nephi sought to prove at trial that Ethel’s
1998 Will was valid, but that Ethel’s subse-
quent February 7, 2000, affidavit, her 2000
Will, and her 2004 Will were all invalid be-
cause. Ethel lacked testamentary capacity
when she executed them.’ The jury found

phi’s claim that Beverly procured the 2004 Will
through undue influence, and Nephi withdrew
his claim that Ethel was mistaken as to the
contents of the 2004 Will when she signed it.

408

that the 2004 Will was invalid, but that the
2000 Will, which revoked the 1998 Will, was
validly executed. Because the jury found that.
the 2000 Will was valid, it was instructed that,
it need not decide whether Ethel had re-
voked the 1998 Will by allegedly tearing it up
or by signing the February 7, 2000, affidavit.
After the jury returned its verdict, Beverly
filed a petition to probate the 2000 Will and
for appointment as personal representative,
which was granted by the Circuit Court.

VI.

After the conclusion of trial, Nephi filed
his motion for attorneys’ fees and costs. Ne-
phi argued that he defended the 1998 Will in
good faith and was entitled to reasonable
attorneys’ fees and costs pursuant to HRS
§ 560:3-720. In total, Nephi claimed
$388,490.87 in attorneys’ fees and costs. Bev-
erly filed objections to Nephi’s motion for
attorneys’ fees and costs. Among other argu-
ments, Beverly asserted that Nephi was not
entitled to recover attorneys’ fees because he
had retained his lawyers on a contingency fee
basis. To support this assertion, Beverly’s
attorney submitted a declaration stating that
“{dluring the course of litigation I personally
had a discussion with lead [counsel for Ne-
phi] and he informed that [Nephi] had re-
tained counsel on a contingency fee basis.”

The Cireuit Court held a hearing on Ne-
phi’s motion. During the hearing, the Cireuit
Court stated that “the litigation was neither
frivolous nor in bad faith. The motion is
neither frivolous nor in bad faith.” After the
hearing, the Circuit Court issued a written
order granting Nephi’s motion for attorneys’
fees and costs pursuant to HRS § 560:3-720.
The Circuit Court approved all of the attor-

4, Beverly asserts eleven points of error: (1) the
Circuit Court erred by failing to state the statuto-
ry basis for its award of attorneys’ fees and costs,
find that Nephi acted in good faith, or address
Beverly's objections to the fees and costs as un-
authorized and excessive; (2) Nephi lacked good
faith to initiate or persist in his will contest; (3)
HRS § 560:3-720 does not apply to personal
representatives who unsuccessfully attack a will
for personal gain and do not benefit the estate;
(4) HRS § 560:3-720 does not apply to personal
representatives who unsuccessfully challenge a
will and owe nothing to their lawyers under a
contingency fee agreement; (5) HRS § 560:3-720
is limited to fees incurred under HRS Chapter

neys’ fees and costs Nephi requested, and it
ordered Ethel’s estate to pay Nephi’s law-
yers $330,178.75 in legal fees, $15,558.08 in
general excise tax, and $42,754.09 in costs,
for a total award of $388,490.87. On Septem-
ber 4, 2018, the Circuit Court filed its
Amended Judgment, which among other
things, entered judgment “in favor of Nephi
in the amount of $388,490.87 for his attor-
neys’ fees and costs incurred[.]” Neither the
Circuit Court’s written order granting Ne-
phi’s motion nor the Amended Judgment
made findings regarding good faith or stated
explicit reasons justifying the Circuit Court’s
award. Beverly appeals from the Amended
Judgment.

DISCUSSION
L

A.

Pursuant to HRS § 560:3-720, the Cireuit
Court granted Nephi’s request that Ethel’s
estate pay $345,786.78 in attorneys’ fees (in-
cluding general excise tax) and $42,754.09 in
costs for Nephi’s unsuccessful will contest.
HRS § 560:3-720 provides:

If any personal representative or person
nominated as personal representative de-
fends or prosecutes any proceeding in good
faith, whether successful or not that per-
son is entitled to receive from the estate
that person’s necessary expenses and dis-
bursements including reasonable attor-
neys’ fees incurred.

On appeal, Beverly raises numerous chal-
lenges to the Circuit Court’s decision to
grant Nephi’s request for attorneys’ fees and
costs.' With respect to attorneys’ fees, we

560:3 and does not apply to trust litigation
brought under HRS Chapter 560:7; (6) assuming
HRS § 560:3-720 authorized the fees requested
by Nephi, he did not comply with Hawai'i Pro-
bate Rules (HPR) Rule 40-42 or Hawai'i Rules of
Professional Conduct (HRPC) Rule 1.5; (7) as-
suming the fees requested by Nephi were author-
ized, he failed to provide sufficient evidence of
his lawyers’ reputations, training, or experience
for the Circuit Court to determine their reason-
able hourly rate; (8) assuming the fees requested
by Nephi were authorized, the Circuit Court
lacked sufficient billing information to determine
whether the requested fees were reasonable; (9)

conclude that the pivotal claim raised by
Beverly is that HRS § 560:3-720 does not
authorize an award of attorneys’ fees to Ne-
phi because, based on his contingency fee
arrangement, Nephi was not obligated to pay
attorneys’ fees to his attorneys for his unsuc-
cessful will contest. We hold that HRS
§ 560:3-720 does not authorize the award of
attorneys’ fees from the estate to a nominat-
ed personal representative who is unsuccess-
ful in a will contest and who is not obligated
to pay attorneys’ fees because his or her
attorneys were retained on a contingency fee
basis,

With respect to costs, it appears that un-
like attorneys’ fees, Nephi was obligated to
pay for costs incurred. We hold that under
HRS § 560:3-720, Nephi was entitled to an
award of his necessary costs. However, we
remand the case for further proceedings re-
garding whether cost items requested by Ne-
phi, and objected to by Beverly, were neces-
sary.

B.

Our resolution of this appeal turns on the
interpretation of HRS § 560:3-720. Statutory
interpretation is a question of law that is
subject to de novo review. Hawaii Gov't
Emps. Ass’n, AFSCME Local 152, AFL-CIO
v. Lingle, 124 Hawai‘ 197, 201-02, 239 P.3d 1,
5-6 (2010). We are guided by the following
principles in construing a statute:

First, the fundamental starting point for

statutory interpretation is the language of

the statute itself. Second, where the statu-
tory language is plain and unambiguous,
our sole duty is to give effect to its plain
and obvious meaning. Third, implicit in the
task of statutory construction is our fore-
most obligation to ascertain and give effect
to the intention of the legislature, which is
to be obtained primarily from the language
contained in the statute itself, Fourth,
when there is doubt, doubleness of mean-
ing, or indistinctiveness or uncertainty of
an expression used in a statute, an ambigu-
ity exists. And fifth, in construing an am-
the fees requested by Nephi were excessive, du-
plicative, and unreasonable; (10) assuming the

costs requested by Nephi were authorized, the
request did not comply with HRS § 607-9 or

409

biguous statute, the meaning of the ambig-
uous words may be sought by examining
the context, with which the ambiguous
words, phrases, and sentences may be
compared, in order to ascertain their true
meaning,

Id. at 202, 289 P.8d at 6 (internal block quote
format and citation omitted),

CG.

Assuming that the good faith requirement
of HRS § 560:3-720 has been satisfied, HRS
§ 560:3-720 requires the estate to pay a per-
son who is a personal representative or is
nominated as a personal representative “that
person’s necessary expenses and disburse-
ments including reasonable attorneys’ fees
incurred.” Based on the language of the stat-
ute itself, we construe HRS § 560:3-720 as
only requiring the estate to pay attorneys’
fees and costs that a personal representative
or nominated personal representative is obli-
gated to pay. When a personal representative
or nominated personal representative is not
obligated to pay attorneys’ fees or costs, such
fees or costs are not “necessary expenses
and disbursements” and are not “fees [or
costs] incurred” by the personal representa-
tive or nominated personal representative.

Our interpretation of HRS § 560:3-720 is
supported by our construction of similar
statutory language in Vinson v. Ass’n of
Apartment Owners of Sands of Kahana, 180
Hawaii 540, 812 P.8d 1247 (App. 2018). In
Vinson, we construed HRS § 514B-157(b)
(2006), which requires the award of “all rea-
sonable and necessary expenses, costs, and
attorneys’ fees incurred” by a condominium
owner who prevails in an action to enforce
any provision of HRS Chapter 514B against
a condominium association, We held that “in
order for Vinson [ (the condominium owner) ]
to have ‘incurred’ attorneys’ fees and costs
under HRS § 514B-157(b), he must have
paid or be legally obligated to pay such fees
and costs[.]” Vinson, 180 Hawai'i at 548-49,

HPR Rule 40-42, or were not sufficiently docu-

mented; and (11) the request for costs included
costs that were not recoverable.

410

312 P.8d at 1255-56.5 We therefore concluded
that the trial court erred in awarding Vinson
legal fees paid by third-parties that Vinson
was not legally obligated to pay. Id. Consis-
tent with Vinson, we conclude that for a
personal representative or nominated per-
sonal representative to have “incurred” at-
torneys’ fees or costs under HRS § 560:3-
720, he or she must be legally obligated to
pay such fees or costs,

t

A.

I We first address the Circuit Court’s
award of attorneys’ fees. Beverly asserts, and
Nephi does not dispute, that Nephi retained
his lawyers on a contingency fee basis. Al-
though the fee agreement between Nephi
and his lawyers is not part of the record,
generally, a contingent fee agreement is “‘a
fee agreement under which the attorney will
not be paid unless the client is successful’ ”
Lopez v. State, 188 Hawai'i 311, 327-28, 828
P.3d 820, 336-37 (2014) (Acoba, J., dissenting)
(quoting Robert L. Rossi, Attorneys’ Fees
§ 2:1); see_also Black’s Law Dictionary 362
(9th ed. 2009) (defining “contingent fee” as
“[a] fee charged for a lawyer's services only
if the lawsuit is successful or is favorably
settled out of court”), A contingency fee is
usually calculated as a stipulated percentage
of the client’s recovery in the event of a
successful prosecution of the action. Rossi,
Attorney's Fees § 2:1; Black’s Law Dictio-
nary 862 (“Contingent fees are [usually] cal-
culated as a percentage of the client’s net
recovery[.]”). Here, Beverly asserts, and Ne-
phi does not dispute, that because Nephi
retained his lawyers on a contingency fee
basis, Nephi “owed his lawyers nothing”
when he did not prevail in his will contest.

Accordingly, for purposes of our analysis
on appeal, we assume that Nephi had a stan-
dard contingency fee agreement with his law-
yers, one that provided that Nephi was not

5. In Vinson, we noted that “Black's Law Dictio-
nary defines ‘incur’ to mean ‘to suffer or bring
on oneself (a liability or expense).'"” Vinson, 130
Hawai'i at 548, 312 P.3d at 1255. We also cited
case law construing a statute authorizing reason-
able attorneys’ fees to a prevailing party as not
permitting the prevailing party to receive a wind-

obligated to pay his lawyers any attorneys’
fees if Nephi was unsuccessful in his will
contest. Based on such a contingency fee
agreement, because Nephi did not prevail in
his will contest, he was not legally obligated
to pay his lawyers any attorneys’ fees, There-
fore, under HRS § 560:3-720, Nephi was not,
entitled to have Ethel’s estate pay for attor-
neys’ fees that he was not obligated to pay
his lawyers.

We conclude that a contrary interpretation
of HRS § 560:3-720 would create improper
windfall situations at the expense of the es-
tate. HRS § 560:3-720 provides for the per-
sonal representative or nominated personal
representative, and not his or her lawyers, to
receive from the estate the amounts awarded
for attorneys’ fees and costs. Here, an award
to Nephi of $345,736.78 for attorney's fees he
is not obligated to pay would result in an.
improper windfall to him; it would produce
the anomalous result of Nephi obtaining a
significant portion of Ethel’s estate despite
the jury’s determination that Ethel validly
intended that he should receive none of her
estate.

Even if Nephi is ordered to pay the fee
amount awarded to him to his lawyers, an
action HRS § 560;3-720 does not specifically
authorize or require, it would result in a
windfall to Nephi’s lawyers. By taking the
case on a contingency fee basis, Nephi’s law-
yers conditioned their entitlement to receive
their fees on their successful prosecution of
Nephi’s will contest and, in doing so, presum-
ably factored in the possibility and assumed
the risk that Nephi would not prevail in
setting the level of their contingency fee.
Having conditioned their entitlement to fees
on Nephi’s prevailing in his will contest, Ne-
phi’s lawyers would receive a windfall if de-
spite Nephi’s failure to prevail, Ethel’s estate
was nevertheless required to pay Nephi’s
lawyers for their legal fees,

fall, but permitting the prevailing party to be

awarded attorneys’ fees if he could show he was

“‘egally obligated’” to pay his attorneys, the

Legal Aid Society of Hawai'i, the fees he recov-

ered, Id. (citing Wiginton v, Pac, Credit Corp. 2
Haw. App. 435, 446-47, 634 P.2d 111, 120
(1981).

HI These windfall scenarios reinforce our
view that HRS § 560:3-720 does not require
an estate to pay for attorneys’ fees a person-
al representative or nominated personal rep-
resentative is not obligated to pay because he
or she retained lawyers on a contingency fee
basis and was not successful in prosecuting
or defending a will contest.

B,

We note that HRS § 560:8-720 is a provi-
sion that comes from the model Uniform
Probate Code that was largely adopted by
the Hawai'i Legislature. See Conf. Comm,
Rep. No. 77, in 1996 Senate Journal, at 778,
We can look to other jurisdictions that have
adopted statutes with the same or similar
language as HRS § 560:3-720 for guidance,
Unfortunately, the case law from other juris-
dictions addressing the contingency fee issue
presented by this case is sparse, and the
jurisdictions that have addressed this issue
are split.

Our interpretation of HRS § 560:3-720 is
supported by Russell v, Moeling, 526 S.W.2d
533 (Tex, 1975). Russell involved a contest
between a 1965 will and a 1969 will, in which
the 1969 will was eventually found to be valid
and admitted to probate. Russell, 526 S.W.2d
at 584. The unsuccessful executrix of the
1965 will, who had hired her attorneys on a
contingency fee basis, applied for attorneys’
fees and expenses pursuant to Section 248 of
the Texas Probate Code, which contained
language that closely matches the operative
Janguage of HRS § 560:3-720. Id. at 584-35,
Section 243 stated:

‘When any person designated as executor

in a will, or as administrator with the will

annexed, defends it or prosecutes any pro-
ceeding in good faith, and with just cause,
for the purpose of having the will admitted
to probate, whether successful or not, he
shall be allowed out of the estate his neces-
sary expenses and disbursements, includ-
ing reasonable attorney's fees, in such pro-
ceedings,

Id, at 585 (emphasis added).

The Texas Supreme Court held that be-
cause the unsuccessful executrix of the 1965
will, by virtue of her contingency fee agree-

411

ment, did not owe her attorneys any legal
fees, Section 248 did not authorize the recov-
ery of the requested attorneys’ fees from the
estate. The court reasoned as follows:
The import of [Section 248] is clear: the
executor or administrator “shall be allowed
out of the estate his necessary expenses
and disbursements.” The purpose then is
to pay the cost of attorney’s fees that are

owed by the executor or administrator, and
the allowance is not to the attorney, but to
the administrator. We are presented here,
however, with a situation where the unsuc-
cessful executrix of the 1965 will and her
attorneys had entered into a contingent fee
agreement which provided that if the pro-
bate of the 1965 will was successful, the
attorneys were to receive a percentage of
all moneys they recovered. The [1965] will

‘was not probated and therefore the execu-

trix named therein was not faced with any

expense for the legal work that had been
done since nothing was recovered. Conse-

quently, under the terms of Section 248,

the estate could not be held liable for those

attorneys’ fees,

Id, (citations omitted) (emphasis added), In
accordance with the Texas Supreme Court,
‘we conclude that the import and purpose of
HRS § 660;8-720 is clear—to require the
estate to pay for attorneys’ fees, but only
those fees that are actually owed by the
personal representative or nominated per-
sonal representative, Indeed, this import and
purpose of HRS § 560:3-720 is even clearer
than the Texas statute, given HRS 560:3-
720’s reference to “reasonable attorney's fees
incurred.” (Emphasis added.)

Nephi cites cases from other jurisdictions
construing statutes with language close or
somewhat similar to HRS § 560:3-720 which
hhave held that unsuccessful will contestants
were entitled to recover attorneys’ fees even
though (or regardless of whether) their attor-
neys were hired on a contingency fee basis.
E.g, In re Estate of Robinson, 236 Kan. 431,
690 P.2d 1888, 1889 (1984) (“An individual, by
entering into a contingent fee contract, does
not control the award of attorney fees under
the statute[,]”); Fickle v. Scampmorte, 243
Ind. 165, 183 N.E.2d 888, 840 (1962) (“The
statute places the obligation on the estate to

412

pay the attorney fees and expenses that are
normally required in a proceeding to probate
a purported will if the proceedings are in
good faith. This statute is not conditional
upon any outside or private agreement.”); In
re Estate of Whitehead, 287 So.2d 9, 10 (Fla.
1978) (“[Tyhe attorneys’ fees herein ordered
paid were payable initially on a contingent
basis, but the materialization of the contin-
gency is not a prerequisite to the ordering of
payment of attorneys’ fees[.]”).

We note that there is a dissenting opinion
in Robinson, which states that the result of
the majority’s decision can be to create a
windfall, and a dissenting opinion in Fickle,
which asserts that because the unsuccessful
will contestant was not liable for attorneys’
fees under his contingency fee agreement,
the attorneys’ fees requested were not a
necessary expense. Robinson, 690 P.2d at
1890 (McFarland, J., dissenting); Fickle, 188
N.E.2d at 841-42 (Bobbitt, J., dissenting). In
any event, we are not persuaded by the
majority decisions in the cases cited by Ne-
phi and believe that our interpretation of
HRS § 560:3-720 conforms to the statutory
language and Hawai‘i precedents and reflects
amore reasoned approach.

Cc.

Based on the foregoing, we conclude that
HRS § 560:3-720 did not authorize the Cir-
cuit Court to order Ethel’s estate to pay
attorneys’ fees that Nephi, by virtue of his
contingency fee agreement, did not owe his
lawyers and was not legally obligated to pay.
We therefore vacate the Amended Judgment
to the extent that it entered judgment in
favor of Nephi and against Ethel’s estate for
attorneys’ fees.

I,

‘We now turn to the question of the Circuit,
Court’s award of costs. Nephi was not the
prevailing party in the will contest, and
therefore, his request for costs was also

6. In light of our analysis and resolution of the
contingency fee issue, we need not address the
other grounds raised by Beverly in contending
that Nephi should not have been awarded attor-
neys’ fees under HRS § 560:3-720.

based on HRS § 560:3-720. As noted, Nephi’s
fee agreement with his lawyers is not part of
the record, but Beverly did not challenge
Nephi’s request for costs on the ground that
he was not legally obligated to pay for costs.
In addition, Nephi asserts, without contra-
diction, that he “had to borrow funds to pay
for the costs incurred.” Thus, it appears that
Nephi satisfied the requirement under HRS
§ 560:3-720 of having the obligation to pay
for the costs for which he sought reimburse-
ment from Ethel’s estate.

A.

I Beverly, however, contends that Ne-
phi failed to satisfy other conditions which
she claims were necessary for Nephi to re-
cover under HRS § 560:3-720. In particular,
Beverly contends that Nephi did not act in
good faith in pursuing the will contest, She
also contends that Nephi was not entitled to
recovery under HRS § 560:3-720 because (1)
he did not prevail in the will contest and
therefore his actions did not benefit Ethel’s
estate and (2) he was a primary beneficiary
of the 1998 Will that he sought to validate in
the will contest. These contentions of Beverly
are without merit.

1

The Circuit Court found that Nephi acted
in good faith in pursing the will contest. At
the hearing on Nephi’s request for attorneys’
fees and costs, the Circuit Court stated that,
“the litigation was neither frivolous nor in
bad faith. [Nephi’s] motion [for attorneys’
fees and costs] is neither frivolous nor in bad
faith.” Moreover, at a hearing on Beverly's
motion to have Nephi pay her attorney’s fees
and costs on the ground that Nephi’s pursuit
of the will contest was frivolous, the Cireuit
Court found that each party was “firm in
their belief of the rightness of their respec-
tive causes,” and it further found that “this
litigation was undertaken by both sides in
good faith,”

7. In its order denying Beverly's motion to have
Nephi pay Beverly’s attorneys’ fees and costs, the
Circuit Court stated:

I have presided over pretrial motions as well
as the trial of this matter. I have had the
opportunity to witness the testimonies and

Hl “Generally, the existence of good faith

. is a fact question for the trial court to
determine.” In re Estate of Herbert, 91 Ha-
wait 107, 109, 979 P.2d 1188, 1185 (1999)
Gnternal quotation marks, citation, and
brackets omitted). We find no basis to over-
turn the Circuit Court’s determination that
Nephi acted in good faith in pursuing the will
contest. In this regard, we note that Beverly
failed to include the trial transcripts as part
of the record on appeal. Without the trial
transcripts, Beverly cannot satisfy her “bur-
den of demonstrating error in the record”
with respect to the Circuit Court’s determi-
nation that Nephi acted in good faith, State
y. Hoang, 98 Hawai‘ 338, 336, 3 P.3d 499, 502
(2000) (“[W]e will not presume error from a
silent record.”). Moreover, the record that
was provided supports the view that Nephi
had good faith reasons for challenging the
2000 Will and 2004 Will. The record contains
medical records and other evidence that Eth-
el suffered from dementia and which raised
questions about her testamentary capacity.
While the jury ultimately found the 2000 Will
to be valid, it agreed with Nephi that Ethel
lacked the testamentary capacity to execute
the 2004 Will.

2.

We reject Beverly’s contentions that Nephi
was not entitled to recovery of costs under
HRS § 560:3-720: (1) because he did not
prevail in the will contest and therefore his
actions did not benefit Ethel’s estate; and (2)
because of his status as a primary beneficia-
ry of the 1998 Will.

HRS § 560:3-720 entitles a nominated per-
sonal representative who pursues a will con-
test in good faith to recover his or her neces-
sary costs “whether successful or not” in the
will contest. Therefore, the fact that Nephi

cross examinations of the parties and to evalu-
ate each side’s respective claims, as well as
each side’s reaction to the other side’s claims
and conduct throughout the course of this peri-
od.
With this wealth of background, I conclude
that the behavior of each party is one of mutu-
al suspicion and understandable but regretta-
ble hostility. Each side believes that the other
has manipulated and/or misrepresented the in-
tent of the decedent for the purpose of achiev-
ing financial gain.

413

‘was unsuccessful in the will contest does not
disqualify him from recovering costs under
HRS § 560:3-720.

Beverly’s claim that Nephi’s status as a
primary beneficiary of the 1998 Will pre-
cludes his recovery of costs is without merit,
HRS § 560:3-720 does not limit recovery to
personal representatives or nominated per-
sonal representatives who are not beneficia-
ries of the will they sought to prove was
valid. We conclude that if a personal repre-
sentative or nominated personal representa-
tive pursues a will contest in good faith, his
or her status as a beneficiary of the argued-
for will does not render him or her ineligible
from recovering under HRS § 560:3-720.

B.

HMM Beverly challenges the reasonable-
ness and amount of cost items awarded by
the Circuit Court. Generally, unless there is
a specifie objection to a cost item, the court
should approve the item. Canalez v. Bob’s
Appliance Serv. Ctr. Inc. 89 Hawai'i 292,
307, 972 P.2d 295, 310 (1999). However, when
objections have been filed to specifie costs
items requested, the burden of proving the
correctness of the items shifts to the party
claiming them, Id,

Here, Beverly filed extensive objections to
the cost items requested by Nephi. Beverly
challenged the costs requested by Nephi on
the grounds that they were unnecessary, in-
sufficiently documented, or unrecoverable.
The items of cost challenged by Beverly in-
cluded messenger fees, courier services,
Westlaw charges, and other charges related
to the filing and delivery of documents that
ordinarily do not appear to be recoverable as
costs. See Kikuchi v. Brown, 110 Hawai‘i 204,
212-18, 180 P.38d 1069, 1077-78 (App. 2006);

Even in this atmosphere of mutual acrimony
I find each party to be firm in their belief of
the righmess of their respective causes, and
each to possess meritorious and indeed likea-
ble character traits.

Taking all these factors into account, I find
that this litigation was undertaken by both
sides in good faith.

(Emphasis added.)

414

Bjornen v. State Farm Fire and Cas. Co., 81

SUMMARY DISPOSITION ORDER

Hawaii 105, 107, 912 P.2d 602, 604 (App.
1996), Nephi did not specifically respond to
Beverly’s objections or provide documenta-
tion supporting items that Beverly asserted
lacked sufficient documentation, The Cireuit
Court granted Nephi’s cost request in total,
without addressing Beverly’s objections or
otherwise explaining its decision,

Under these circumstances, we vacate the
Circuit Court’s cost award and remand for
further proceedings. On remand, Nephi may
submit additional evidence or justification
with respect to the costs objected to by Bev-
erly. We also direct the Circuit Court to
explain its rulings on Beverly’s cost objec-
tions in sufficient detail to permit effective
appellate review,

CONCLUSION
We vacate the Amended Judgment to the
extent that it entered judgment in favor of
Nephi for attorneys’ fees and costs to be paid
by Ethel’s estate, and we remand the case
for further proceedings consistent with this

Opinion.

400 P.3d 615

THE BANK OF NEW YORK MELLON,
as Trustee for the Certificateholders of
CWABS Inc, Asset-Backed Certificates,
Series 2007-11, Plaintiff-Appellee,

v.

Mary Lee COLTON, Defendant-Appellant,
and John Does 1-50, Jane Does 1-50,
DOE Partnerships 1-50, DOE Corpora-
tions 1-50, DOE Entities 1-50, and DOE
Governmental Units 1-50, Defendants

NO. CAAP-14-0000984
Intermediate Court of Appeals of Hawai‘.

DATED; Honolulu, Hawai‘,
August 21, 2017.

APPEAL FROM THE CIRCUIT COURT
OF THE THIRD CIRCUIT (CIVIL NO, 18-
1-082K)

Remanded.

Ll
400 P.3d 615
DP, Plaintiff-Appellee,
v.
JP, Defendant-Appellant
NO. CAAP-16-0000436
Intermediate Court of Appeals of Hawai‘.

DATED: Honolulu, Hawai'i,
August 22, 2017.

APPEAL FROM THE FAMILY COURT
OF THE THIRD CIRCUIT (FC-D NO, 14-
10175)

MEMORANDUM OPINION

Affirm.

400 P.3d 615
Mike YELLEN, Plaintiff-Appellant,
v

OFFICE OF THE PROSECUTING AT-
TORNEY; State of Hawai‘; Former
Governor Neil Abercrombie; Governor
David Ige; Department of Motor Vehi-
cles; Jane/John Does 1-100, Defendants-
Appellees

NO, CAAP-16-0000067
Intermediate Court of Appeals of Hawai‘.

DATED; Honolulu, Hawaiti,
August 28, 2017.

APPEAL FROM THE DISTRICT
COURT OF THE THIRD CIRCUIT (CIV-
IL NO. 8RC-15-1-000440)

SUMMARY DISPOSITION ORDER

Affirmed.

400 P.3d 616

Kevin L. HOUSE, House’s Home
Investment, LLC, Plaintiffs-
Appellees,

vw

Mark A. DIAZ and Wilemina E, Hemmy,
Defendants-Appellants

NO. CAAP-16-0000849
Intermediate Court of Appeals of Hawaii,

DATED: Honolulu, Hawai'i,
Angust 28, 2017,

APPEAL FROM THE DISTRICT
COURT OF THE FIRST CIRCUIT HONO-
LULU DIVISION (CASE NO. 1RCi6-1-
000560)

SUMMARY DISPOSITION ORDER

Affirmed.

400 P.3d 616
STATE of Hawai‘i, Plaintiff-Appellee,

v

David T. FLEMING, Defendant-
Appellant.

NO. CAAP-14-0000987
Intermediate Court of Appeals of Hawai'i.

DATED: Honolulu, Hawaii,
August 28, 2017

As Amended September 6, 2017
APPEAL FROM THE CIRCUIT COURT

OF THE SECOND CIRCUIT (CRIMINAL
NO, 06-1-0570(1))

MEMORANDUM OPINION
Remand.

t
400 P.3d 616
STATE of Hawai‘i, Plaintiff-Appellee,
ve

Keith T. MATSUMOTO, Defendant-
Appellant

NO, CAAP-14-0000933
Intermediate Court of Appeals of Hawai'i,

DATED: Honolulu, Hawai'i,
August 29, 2017.

APPEAL FROM THE CIRCUIT COURT

OF THE FIRST CIRCUIT (CR. NO, 12-1-
0918)

SUMMARY DISPOSITION ORDER
Affirmed.

416 |

t SUMMARY DISPOSITION ORDER
400 P.3d 617 Affirmed.
STATE of Hawai‘i, Plaintiff-Appellee,
a
Ryan K, STONE, Defendant-Appellant 1

NO. CAAP-16-0000590 400 P.3d 617

STATE of Hawai'i, Plaintiff-Appellee,
ve
Antony TAHI, Defendant-Appellant

Intermediate Court of Appeals of Hawai‘.

DATED: Honolulu, Hawaii,
August 30, 2017.

APPEAL FROM THE DISTRICT NO. CAAP-16-0000608
COURT OF THE FIRST CIRCUIT, HON- Intermediate Court of Appeals of Hawaii,
OLULU DIVISION, (CASE NO, 1DTA-15-
04984) DATED: Honolulu, Hawai‘,

August 81, 2017.

APPEAL FROM THE DISTRICT
COURT OF THE SECOND CIRCUIT
WAILUKU DIVISION (CASE NO, 2DTC-
15-014633)

SUMMARY DISPOSITION ORDER
Affirmed.

400 P.3d 617
Ashley SANTANDER, Plaintiff-Appellee,

v.

SUMMARY DISPOSITION ORDER
Affirmed.

400 P.3d 617
MK KONA COMMONS LLC, by and

CARIS MED SURG, LLC; Cary Rupert,
Individually, Defendants-
Appellants,

and

John Does 1-10; Jane Does 1-10; DOE
Entities 1-10, Defendants

NO. CAAP-15-0000078
Intermediate Court of Appeals of Hawaii.

DATED: Honolulu, Hawai'i,
August 81, 2017.

APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIRCUIT (CIVIL NO. 14-

1-1554)

through its managing agent CBRE,
Plaintiff-Appellant,

v

BUSINESS BROKERS HAWAII-WEST

LLC, a Hawai‘i limited liability compa-
ny, doing business as Kona Wine Mar-
ket; Timothy Driedger and Jennifer
Driedger, Defendants-Appellees

NO. CAAP-16-0000659

Intermediate Court of Appeals of Hawaii.

DATED: Honolulu, Hawaii,
August 31, 2017.

APPEAL FROM THE DISTRICT

COURT OF THE THIRD CIRCUIT,

NORTH AND SOUTH KONA DIVISION
(CIVIL NO, 8RC14-1-667K)

SUMMARY DISPOSITION ORDER

Vacated. Remanded.

400 P.3d 618
STATE of Hawai‘, Plaintiff-Appellee,
v.
Napali PAA, Defendant-Appellant
NO. CAAP-16-0000316
Intermediate Court of Appeals of Hawai‘.

DATED: Honolulu, Hawaii,
August 31, 2017

APPEAL FROM THE CIRCUIT COURT

OF THE SECOND CIRCUIT (OR. NO. 14-
1-0606(1))

SUMMARY DISPOSITION ORDER

Vacated. Remanded.

417
Ll]
400 P.3d 618
Robert PERALES, Plaintiff-Appellant,
ve

GARY BLUM, M.D,; Robert Atkinson,
M.D.; Orthopedic Associates of Ha-
waii, LLP, Defendants-Appellees

NO. CAAP-14-0000818
Intermediate Court of Appeals of Hawaii.

DATED; Honolulu, Hawai'i,
August 31, 2017.

APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIRCUIT (CIVIL NO. 12-
1-0618-08),

Remanded.

L
400 P.3d 618
STATE of Hawai‘, Plaintiff-Appellee,
ve
Amber NAKI, Defendant-Appellant
NO. CAAP-16-0000614
Intermediate Court of Appeals of Hawai‘.

DATED: Honolulu, Hawai‘,
August 31, 2017

APPEAL FROM THE DISTRICT
COURT OF THE FIRST CIRCUIT,
KANE’0HE DIVISION (CASE NO. 1DCW-
15-0005548)

SUMMARY DISPOSITION ORDER
Affirmed.

400 P.3d 619

WELLS FARGO BANK, N.A.,
Plaintiff-Appellee,

v.

Theodorico ERUM, Jr., Defendant-
Appellant.

and

County of Kaua‘i; State of Hawaii-Depart-
ment of Taxation, Child Support En-
forcement Agency-Kaua‘i Branch; Koloa
Marketplace, LLC; Kauai Credit Adjust-
ers Limited, Defendants-Appellees,

and

John Does 1-50; Jane Does 1-50; DOE Part-
nerships 1-50; DOE Corporations 1-50;
DOE Entities 1-50; and DOE Govern-
mental Units 1-50, Defendants

NO. CAAP-15-0000742
Intermediate Court of Appeals of Hawai‘.

DATED: Honolulu, Hawai‘,
September 5, 2017.

APPEAL FROM THE CIRCUIT COURT
OF THE FIFTH CIRCUIT (CIVIL NO. 18-
1-0288)

Vacate. Remand,

401 P.3d 575

Earl C. CHARLES and Patricia A.
Charles, in their individual capacities
and as co-trustees of the Earl C. Charles
and Patricia A, Charles Revocable Liv-
ing Trust Dated December 12, 1990; Pe-
ter Coad Jr. and Judy E, Coad, in their
individual capacities and as co-trustees
of the Coad Family Trust Dated April
14, 2006; John E. Cork; Susan M. Cork;
Al P, Brende; Douglas M. Droese and
Renee S. Droese, in their individual ca-
pacities and as co-trustees of the 1995
Droese Family Trust 08/02/95; Martin Gi-
uffre; Patricia Giuffre; Matthew Gi-
uffre; William G. Glennon and Carolyn
N. Glennon, in their individual capaci-
ties and as co-trustees of the Glennon
Living Trust dated 01/16/97; Brian Hoyle,
in his individual capacity and as trustee
of The Brian H. Hoyle Trust; Willard S.
Johnston, in his individual capacity and
as trustee of The Willard Spencer John-
ston Jr. Trust Dated 4-27-92; Michael M.
Kemps, in his individual capacity and as
co-trustee of the Kemps Family Trust
Dated October 23, 2003; Gemma Kemps,
in her individual capacity and as co-
trustee of The Kemps Family Trust Dat-
ed October 23, 2003; Doctor Rohit Khan-
na; Theresa Khanna; Terry G. Negen-
dank and Paula T. Negendank, in their
individual capacities and as co-trustees
of The Terry G. Negendank and Paula T.
Negendank 2000 Revocable Living Trust;
Julia Negendank; Heidi Negendank; Ste-
phen E. Penfold; Barbara A, Penfold;
Donald Recchio; Marie Weber; Marlon
A. Reyes; Patricia Y. Siguenza; Thomas
D. Rosinski; Janet S. Rosinski; Charles
P. Schulman; Richard J. Stuart, in his
individual capacity and as trustee of The
Richard J. Stuart Trust Under Agree-
ment Dated June 27, 2005; Richard Vick-
ers; Nicole Vitullo; Andrew H.W. Bran-

* jon; Joyce L. Ziebell; William Bendush
and Sophia Bendush, in their individual
capacities and as co-trustees of The
Bendush Family Trust Dated March 25,
1987; Doctor Thomas M. Prose; Ronald
A. Abelmann; Jeryl J. Abelmann; Abel-

419

mann Investments, LP; Francis R. Zam-
bon, in his individual capacity and as
trustee of The Francis R. Zambon Liv-
ing Trust Dated April 21, 2000, and as
co-trustee of The Francis R. Zambon
and Karen E, Zambon Living Trust Dat-
ed May 13, 2011; Karen E. Zambon, in
her individual capacity and as co-trustee
of The Francis R. Zambon and Karen E.
Zambon Living Trust Dated May 138,
2011; John R. Henkel; Susan A. Henkel;
Caroline Gauthier; Mare Lefebvre;
Douglas C. Mecord; Tracey A. Mecord;
Kevin R. Duncan; Greg H. Giesler and
Ann L, Giesler, in their individual ca-
pacities and as co-trustees of the Giesler
Family Trust; Lee J. Chimerakis; There-
sa A, Chimerakis; John Fitzpatrick; Bar-
bara Fitzpatrick; David Aplin, in his in-
dividual capacity and as a trustee of The
Aplin Kapalua Trust; Richard Giarami-
ta; Lisa Giaramita; Doctor Robert M.
Jackson and Judith Jackson, in their
individual capacities and as co-trustees
of The Robert M. Jackson and Judith
Jackson Revocable Trust; Craig L. Ca-
pretta; Arlinda Capretta; Alex Wern-
berg; Jane Wernberg; Jeffrey L. Rothen-
berger and Stacy L, Rothenberger, in
their individual capacities and as co-
trustees of The Jeff Lynn Rothenberger
and Stacy Leah Rothenberger Revocable
Living Trust; William C. Gabrielson, in
his individual capacity and as trustee of
The William C. Gabrielson Trust; Glen-
na Anthony; Keith Deller; Al A. Kasha-
ni; Tri M. La; John W. Harkins; Renee
La Force Harkins, Petitioners/Plain-
tiffs-Appellants,

ve

KAPALUA BAY, LLC, Maui Land & Pine-
apple Co., Inc.; The Ritz-Carlton Hotel
Company, LLC; The Ritz-Carlton Devel-
opment Co., Inc.; Marriott International,
Inc; Exclusive Resorts, LLC; Marriott
Vacations Worldwide Corporation; The
Ritz-Carlton Management Company,
LLC; Marriott Two Flags, LP; MH Ka-
palua Venture, LLC; MLP KB Partner,
LLC; Exclusive Resorts Club I Holdings,

420

LLC; Exclusive Resorts Development
Company, LLC; ER Kapalua Investors
Fund Holdings, LLC; ER Kapalua In-
vestors Fund, LLC; Kapalua Bay Hold-
ings, LLC, Respondents/Defendants-Ap-
pellees,

SCWC-14-0000387
Supreme Court of Hawai‘.

DATED: Honolulu, Hawai‘i,
September 18, 2017.

CERTIORARI TO THE INTERMEDI-

ATE COURT OF APPEALS (CAAP-14-
0000387; CIV. NO. 18-1-0640)

SUMMARY DISPOSITION ORDER

Affirm,

401 P.3d 576
STATE of Hawai‘i, Plaintiff-Appellee,
v.
Dante RACKLEY, Defendant-Appellant.
NO. CAAP-15-0000919
Intermediate Court of Appeals of Hawai‘.

DATED: Honolulu, Hawai‘,
September 20, 2017.

APPEAL FROM THE CIRCUIT COURT
OF THE FIRST CIRCUIT (CR. NO, 12-1-
0552)

MEMORANDUM OPINION

Affirmed,

402 P.3d 497

STATE of Hawai‘i, Respondent/Plaintiff-
Appellee,

ve

Kevin Paul KIM, Petitioner/Defendant-
Appellant.

SCWC-14-0000833
Supreme Court of Hawai‘.

JUNE 29, 2017

aq
=~

Tae W. Kim, Ewa Beach, for petitioner.

NAKAYAMA, McKENNA, POLLACK,
AND WILSON, JJ., WITH
RECKTENWALD, C.J., CONCURRING
SEPARATELY

OPINION OF THE COURT BY
POLLACK, J.

This case concerns a challenge by Kevin
Paul Kim regarding the validity of his waiver
of the right to testify at trial. Kim also
contends that the trial court’s warnings to
him during trial intimidated him and influ-
enced his decision not to testify. We hold that
the record does not support a conclusion that
Kim’s waiver of the right to testify was vol-
untarily, intelligently, and knowingly made.
Thus, we need not resolve whether the trial
court’s statements influenced Kim’s decision

1, Apperson commits the offense of burglary in the
first degree if the person intentionally enters or
remains unlawfully in a building, with intent to
commit therein a crime against a person or
against property rights, and: ... [t]he person
recklessly disregards a risk that the building is
the dwelling of another, and the building is
such a dwelling,

HRS § 708-810(1)(c) (1993).

2. “A person commits the offense of terroristic
threatening in the second degree if the person
commits terroristic threatening other than as
provided in section 707-716.” HRS § 707-717(1)
1993),

423

not to testify, but in light of Kim’s contention
we provide guidance on this issue.

I. BACKGROUND

A. General Overview

On March 5, 2012, the State filed a com-
plaint against Kevin Paul Kim in the Circuit
Court of the First Circuit (circuit court),
alleging the following four counts: count 1,
burglary in the first degree, in violation of
Hawaii Revised Statutes (HRS) § 708-
810(1)(¢); 1 count 2, terroristic threatening in
the second degree, in violation of HRS § 707-
717;? count 8, assault in the third degree, in
violation of HRS § 707-712(1)(a);* and count
4, criminal property damage in the fourth
degree, in violation of HRS § 708-823,! The
allegations in counts 1, 2, and 8 concerned an
interaction between Kim and the complaining
witness on February 28, 2012. Count 4 in-
volved an incident alleged to have occurred
on February 21, 2012,

A jury trial took place in February 2014,
nearly two years after the occurrence of the
incidents in this case.®

B. Advisement at Beginning of Trial

On the first day of trial, the cireuit court
discussed the right to testify with Kim. Kim
indicated that he had not yet made up his
mind about whether he wanted to testify:

THE COURT: Mr. Kim—our panel is
not here—you have a constitutional right,

Mr, Kim, to testify in your own defense at

the trial which we're about to begin.

Now, you should talk with your lawyer
and anybody else you want to talk with
about this decision to testify, but this must

3. “A person commits the offense of assault in the
third degree if the person: ... [intentionally,
knowingly, or recklessly causes bodily injury to
another person...” HRS  § 707-712(i)(a)
(1993),

4. “A person commits the offense of criminal
property damage in the fourth degree if by
means other than fire, the person intentionally or
knowingly damages the property of another with-
out the other's consent,” HRS § 708-823 (1993
& Supp. 2006).

5. The Honorable Karen S,S, Ahn presided.

424

be your decision. And if you decide you
want to testify, nobody can stop you from
testifying. If you decide to testify, the
prosecution will be given a chance to ques-
tion you.

You also have a constitutional right not
to testify but rather to remain silent.
Again, talk with whomever you wish to talk
with, of course including your lawyer,
about this decision, but this decision must
be yours. And if you decide you don’t want
to testify nobody, including your only law-
yer, can force you to testify.

If you decide to testify I will instruct the
jury that it cannot hold your silence
against you when it decides your case.
Whatever your decision is by the end of
trial I am going to briefly question you and
the only objective is to make sure that you
understand all of these rights and that
your decision, whatever it is, was your
decision, okay, you understand?

THE DEFENDANT: Kind of, yeah.

THE COURT: Well, do you have any
questions?

THE DEFENDANT: No, not really. I
haven’t made my mind up yet.

THE COURT: That’s fine. And well if
you have any questions, now is the time to
ask because it’s very important that you
understand these two rights that nobody
can force you to do what you don’t want to
do. And that if you decide to testify, the
prosecution will be given a chance to ques-
tion you. And if you don’t testify, you
decide you don’t want to testify, I’m going
to instruct the jury that it cannot hold your
silence against you because that is your
right, okay?

THE DEFENDANT: Yes.

THE COURT: So I want you to under-
stand all of this. Do you have any ques-
tions about anything?

THE DEFENDANT: Oh, I’ve got tons
of questions.

[DEFENSE COUNSEL]: I'll address
them, Your Honor,

THE COURT: Okay. Do you have any
questions about what you and I have just
talked about?

THE DEFENDANT: No, Your Honor.

THE COURT: Okay. Do you understand
‘what you and I have talked about?

THE DEFENDANT: Yes.

The State’s evidence consisted of testimo-
ny from three investigating Honolulu Police
Officers; testimony of the complaining wit-
ness, Daniel Lewis; and photographs of Lew-
is’s home and his injuries after the incident.
Lewis testified at trial that he was friends
with Kim and Kim’s former girlfriend, Jenni-
fer Jimenez. At the time of the two incidents,
Jimenez was living with Lewis at his home
because Kim had broken up with Jimenez
two weeks earlier. Lewis testified that, late
in the evening on February 21, 2012, the
tires of his vehicle had been cut “on [the]
sidewalls so they couldn’t be repaired.” From
his bedroom window, Lewis saw Kim bend
down near his car tires and then walk around
to the other side of the car,

Most of Lewis’s testimony, however, was
regarding the incident on the morning of
February 28, 2012. Lewis testified that Kim
came to his home and first attempted to
force his entry through the back door, which
is a sliding glass door that was partially open
but secured by a wooden dowel. According to
Lewis, Kim stuck his arm through the door
and made “glancing blows” to his shoulder
and head, preventing him from closing the
door. Lewis testified that he then instructed
Kim to go to the front door where he opened
the door to let Kim enter to stop Kim from
damaging the structure. Lewis had not told
the police that he had allowed Kim to enter
through the front door.

Lewis testified that, when he opened the
door to Kim, Kim attacked him with a large
stick, jabbing him in his midsection, and
knocking him off his feet. According to Lew-
is, he attempted to prevent Kim from hitting
him by holding on to the stick and that Kim
also punched and kicked him. Lewis ex-
plained that Jimenez eventually physically
broke them up by grabbing hold of Kim and
guiding him toward the driveway to leave.
Lewis testified that he and Kim were yelling
obscenities at each other, he then verbally
challenged Kim, and Kim attacked Lewis
again. Jimenez again broke them up, and
Jimenez and Kim proceeded to leave.

Lewis acknowledged that he was under
probationary supervision, and he also refer-
enced his intimate relationship with Jimenez
and indicated that, at the time of the inci-
dent, he wanted Jimenez to be his girlfriend.
Lewis stated that he attempted to and de-
sired to withdraw his complaint before the
trial.

An investigating officer testified that she
attempted to contact Jimenez, who was pres-
ent when the incident occurred on February
28, 2012. However, the officer did not make
contact with Jimenez and was unable to get a
statement from her. The officer who re-
sponded to Lewis’s call to the police testified
that he believed he questioned Lewis’s neigh-
bors. But, he was unable to locate a witness
on the cul-de-sac where Lewis's home is lo-
eated who had seen or heard screaming or
banging on a side of a house.

C. Warning to Kim After Jury Selection

Following jury selection on the first day of
trial, the circuit court warned Kim to “use a
poker face” and to not smile and shake his
head at certain questions:

THE COURT: Counsel and defendant
are present, our jury has left the court-
room.

Mr. Kim, you need to use a poker face,
No clapping at the end of the selection of
the jury.

THE DEFENDANT: It’s very emotion-
al. I understand.

THE COURT: No smiling and shaking
your head at certain questions. I mean,
you know, the jury is watching you. And
you may think that this is a positive thing
for you. But you don’t know, they may be
looking at it and thinking—coming to neg-
ative conclusions and you don’t want that,
okay. So I’m going to require that every-
body use a poker face, that’s real impor-
tant in these cases. And what happens at
counsel table is not evidence, all right?

D. Warning to Kim During Cross-
Examination of Lewis
The following day, during cross-examina-
tion of Lewis, defense counsel sought to im-
peach Lewis with a prior inconsistent state-

425

ment regarding Kim’s purpose in coming to
Lewis’s home on February 28, 2012. Previ-
ously, Lewis told an investigating officer that
he felt threatened by Kim and that Kim was
attempting to enter the house to “get at”
Jimenez, Lewis testified at trial, however,
that he initially did not think that Kim would
attack him and that Kim did not mean to
harm Jimenez but only to “retrieve her.”
During this line of questioning, the court
asked both counsel to approach the bench;
defense counsel was instructed to tell Kim to
“stop making faces”:

THE COURT: You're going to have to
tell your client to stop making faces, He’s
doing things like that where I’m going to—
Tm going to say something in front of the
jury.

[DEFENSE COUNSEL]: He’s a very

emotional man.

THE COURT: There’s something wrong

with him.

[DEFENSE COUNSEL]: He’s upset.

THE COURT: No, people are upset, but
they, you know, they don’t do this, You tell
him I’m going to tell him as soon as the
jury leaves if he does that again I’m going
to say it in front of the jury.

Defense counsel continued questioning
Lewis regarding the incident and asked Lew-
is whether he had mentioned earlier in his
testimony that Kim made a fist with the hand
that he stuck through the door; Lewis con-
firmed that was his testimony. Defense coun-
sel then proceeded to question Lewis regard-
ing a preexisting injury that caused the index
fingers on Kim’s hands to be different in size.
After the prosecution made an objection, the
court excused Lewis and the jury, and the
court immediately spoke to Kim regarding
his behavior.

THE COURT: ...

THE COURT: You can not [sic] be mak-
ing faces in front of the jury, shaking your
head or something, That is inappropriate.
Defendants do not act that way, most of
them know better and I warned you yes-
terday.

426 |

THE DEFENDANT: Yes.

THE COURT: You're doing it again to-
day. After I—some part of the testimony
by Mr. Lewis you said you put up your
fingers and tried to get your lawyer’s at-
tention.

THE DEFENDANT: Yes, ma’am, I did
that.

THE COURT: I think what you may
have been trying to imply is that it’s so
wrong I need to tell [Defense Counsel].

THE DEFENDANT: Yes, that’s it. I
don’t know.

THE COURT: But you can not [sic] be
trying to communicate to the jury that this
is all ridiculous. As they were filing out you
were holding your two hands palm down so
that the jury could see them and I will not
tolerate that.

THE DEFENDANT: Okay.

THE COURT: What is wrong?

THE DEFENDANT: Nothing is wrong.

THE COURT: It strikes me that some-
thing is wrong because you can’t follow
instructions,

THE DEFENDANT: Your Honor, I’m
not trying to disrespect you at all.

THE COURT: We're trying to get a fair
trial here. I don’t know what happened, it’s
up to the jury to decide,

THE DEFENDANT: Right,

THE COURT: But your play acting I
think is what I would really call it over
there at counsel’s table is totally inappro-
priate. And you may think not so that you.
want to be acquitted, fine, I don’t blame
you, but you cannot do this, You have to—
there’s the proper administration of jus-
tice, we're doing a trial, it’s up to the jury
to decide on the evidence, not on the shak-
ing of your head over there, you're holding
up your two hands so they can see it as
they file out, That is, I mean, I think I am
very close to I think being able to eject
you from this courtroom,

THE DEFENDANT: It’s very hard to
be here, Your Honor. I am very excited
when he says something that’s genuine.

THE COURT: Well, genuine from your
point of view?

THE DEFENDANT: Yes.

THE COURT: You're the one who’s on
probation. You're the one accused of this
crime, You're the one looking at five years

THE DEFENDANT: Yes, ma’am.

THE COURT: I would just be quiet and
let the jury decide.

THE DEFENDANT: Yes, ma’am.

THE COURT: We're going to try this
case fairly.

THE DEFENDANT: Thank you.

THE COURT: With or without you.

THE DEFENDANT: Yes, ma’am, I’m
all about fairness, ma’am, Your Honor.

THE COURT: That’s hard to believe
watching your antics,

THE DEFENDANT: I’m not trying to
sway them or act, it’s all genuine.

THE COURT: Why would anyone hold
up their hands if so they could see this?

THE DEFENDANT: No, I don’t know.

THE COURT: Oh, no, Mr, Kim, don’t lie
to me, I was watching you, You were
standing at the edge of the table facing the
filing jurors and you were holding your
hands out in front of your stomach in the
air with palms down, fingers out, I saw
that. Do not try to tell me your hands were
on the table, that’s a lie.

THE DEFENDANT: Yes, ma’am, it’s
close to the table,

THE COURT: They were not close to
the table, they were in the air?

THE DEFENDANT: Yes, yes.

THE COURT: Do not lie to me, Mr.
Kim, that would be very silly.

THE DEFENDANT: That's it, last
thing I want to do is lie.

THE COURT: That wouldn’t be smart
at all, right, okay?

THE DEFENDANT: Yes, Judge,

THE COURT: Please use your brains.

THE DEFENDANT: Yes, ma’am, yes,
ma’am,

THE COURT: I think your [sic] being
obstructive,

THE DEFENDANT: Im trying my
best, I'll do better.

THE COURT: Well—

THE DEFENDANT: This is really im-
portant to me,

THE COURT: It’s important for a lot of
reasons, and your [sic] one of them. And
we're trying to get you a fair trial. We're
trying to give the State a fair trial. We're
trying to let the jury decide appropriately
on the evidence that they believe, whatever
that is, all right.

The prosecution placed its objection on the
record, stating that Kim had put his index
fingers out side-by-side as a way of demon-
strating to Lewis and any other potential
onlookers—including the jury—that his right
index finger is shorter than his left index
finger. Defense counsel then informed the
court that, at a later point, he was going to
request permission for Kim to show his fin-
gers to the jury. The court indicated that it
did not think that would be a problem, but
stated that Kim “can’t do that as he’s sitting
there.” The exchange continued as follows:

[DEFENSE COUNSEL]: Just so Mr,
Kim is clear, if there’s any further shaking
of the heads, the Court is going to admon-
ish him in front of the jury.

THE COURT: I’m considering that. I’m
also considering ejecting him out.

THE DEFENDANT; And the trial con-
tinues without me?

THE COURT: Yes.

[DEFENSE COUNSELI: We would.

THE COURT: I don’t want to do that,
that’s the last resort, but the law says you
can if somebody is just being obstructive,
Okay, are we clear?

THE DEFENDANT: Yeah, we're clear,

THE COURT: All right, you have any
questions?

[DEFENSE COUNSEL]: This is the
first time he’s been in trial. I instructed

6. The apparent purpose of Kim’s presentation of

his hands to the jury was to impeach Lewis's
testimony that Kim made a fist with his hands,
Defense counsel later argued in closing argument

427

him about procedures and again it’s an
emotional time for him, it’s been two years
and he has—

THE COURT: I don’t want to hear any-
thing more about the emotion, all right,
You're a grown man, I would think you’re
able to control your emotions or some-
thing, I would assume that. You could talk
to your lawyer all you want, You can take
notes. I'll give you all the time to talk to
him that you need. But there will be no
more smiling, shaking one’s head, kind of
rolling one’s eyes, holding up fingers, hold-
ing up hands to show the jury, that’s in-
credibly—well, it’s really inappropriate.

THE DEFENDANT: I’m sorry. I didn’t
realize,

E. Tachibana Colloquy

After the State rested its case, Kim was
permitted to approach the jury box. Kim
showed the jury his hands facing down; he
also pointed his right index finger and his
left index finger for the jury to compare.
Further, Kim held out his hands with his
palms facing up, and he made two fists for
the jury to see. Following this demonstration,
there was a lunch recess.

After the lunch recess, the court asked
defense counsel whether Mr, Kim had made
a decision with respect to testifying:

THE COURT: Okay, let’s go back on
the record. Counsel and the defendant are
present, but not our jury.

[Defense counsel], has your client made
a decision?

[DEFENSE COUNSEL]: Yes, Your Hon-

or, I’ve reviewed with Mr. Kim the pros

and cons of testifying, and he is electing
not to testify and it’s his decision.

BY THE COURT:

Q, Okay. Mr. Kim, as you and I talked
about at start of the trial, you have a
constitutional right to testify in your own
defense. And you should talk with your

that a preexisting injury to Kim's right index
finger prevented him from bending it to form a
fist.

428

lawyer and anybody else you may want to

talk with, but the decision to testify is

yours and yours alone. And if you decide
you want to testify, nobody can stop you
from testifying, including your own lawyer.

If you decide to testify, the prosecution

will be given a chance to question you.

You also have a constitutional right not
to testify. You have a right to remain
silent, Again, talk with whomever you want.
to talk with, but this decision must be
yours and yours alone, If you decide you
don’t want to testify, nobody can force you
to testify. If you decide not to testify, I
instruct the jury that it cannot hold your
silence against you in deciding your case.
Have you understood all of that?

A, Yes, ma’am.

Q, Okay. Any questions about anything
related to that or anything else?

A. I think I’m finally starting to get it
here.

Q. Okay. So do you have any questions?

A. Not really,

Q. All right. And what is your decision
as to whether you want to testify or not
which is your decision alone?

A. Well, in your words I want to but I
can’t, I don’t think I can, so I’m not going
to.

Q. Well, you know, as I say, it’s your
decision, it’s your case, and it’s you who
has to make the decision.

A. I choose not to.

THE COURT: Okay. I think from what
T’ve seen and heard, Mr. Kim, he looks
very cognizant and alert and I believe he
understands his right to testify and his
right not to testify and that this is his
decision, and he’s voluntarily, knowingly
and intelligently decided to give up that.
right.

The defense then rested without presenting
any testimonial evidence.

The jury found Kim guilty of criminal tres-
passing in the first degree, terroristic threat-
ening in the second degree, and assault in
the third degree. By special interrogatory,
the jury indicated that the prosecution
proved beyond a reasonable doubt that the
fight or scuffle was not entered into by mutu-

al consent. And, with regard to count 4,
criminal property damage in the fourth de-
gree, the jury found that Kim was not guilty.
Kim was sentenced to one year in jail for
each conviction, with the terms to run con-
currently, Kim appealed to the Intermediate
Court of Appeals (ICA) from the Judgment
of Conviction and Sentence entered by the
cireuit court on April 80, 2014.

Il, ICA PROCEEDINGS

In his opening brief, Kim argued that the
circuit court influenced his decision not to
testify by intimidating him throughout the
entire trial. Kim contended that the circuit
court threatened to admonish him in front of
the jury and to eject him from the court-
room; he asserted it “seemed apparent” that
he “wanted to be heard and testify,” but that
the cireuit court “swayed” him from testify-
ing.

Kim also argued that the cireuit court did
not engage in a true colloquy with him to
ascertain his understanding of his Tachibana
rights and that this failure resulted in “a
failure to obtain the on-the-record waiver
required by Tachibana.” Kim noted that the
circuit court did not advise or assure him of
his right to testify during the exchange in
which the circuit court admonished him for
making faces and trying to communicate to
the jury. Kim asserted that it is unknowable
whether his testimony could have established
reasonable doubt that he committed the
charged offenses.

In its answering brief, the State asserted
that the circuit court conducted the required
Tachibana colloquy and pre-trial advisement.
The State contended that the circuit court
addressed Kim’s right to testify and not to
testify and explained what those rights en-
tailed and what they meant. The State also
noted that, although Kim was provided an
opportunity to ask questions, he did not have
any questions for the court. The State argued
that Kim overlooks that assessing whether
he knowingly, intelligently, and voluntarily
waived his right to testify requires looking at
the totality of the facts and circumstances of
the particular case. The State maintained
that nothing in the record showed that Kim

did not understand his rights as explained to
him by the court. And, the State further
noted that, on appellate review, the circuit
court's assessment of the situation and the
capabilities of the defendant have to be given
some weight.

Additionally, the State argued that, even
assuming the court’s colloquy was deficient,
the error was harmless because Kim present-
ed no evidence at trial, so there was no
contradictory evidence to the State’s case,
The State further contended that while Lew-
is was extensively cross-examined and there
may have been inconsistencies, the inconsis-
tencies were not so material such that they
took away from the essential nature of Kim’s
conduct.

With regard to Kim’s assertion that the
circuit court intimidated him, the State noted
that Kim did not specify how the court influ-
enced his decision not to testify. The State
argued that there was nothing improper
about the court warning Kim that he could
lose his right to be present at trial if he
continued his disruptive behavior.

Jn a summary disposition order, the ICA.
concluded that the circuit court adequately
advised Kim of his rights and obtained a
valid waiver of his right to testify. The ICA
reasoned that the circuit court fully advised
Kim of the five rights required by the Tachi-
bana colloquy. The ICA noted that, after
engaging in a discussion with Kim, the circuit.
court clearly stated that Kim looked “very
cognizant and alert” and that he understood
the Tachibana colloquy and its implications.

With regard to Kim’s argument that the
cireuit court intimidated him throughout tri-
al, thus influencing his decision not to testify,
the ICA concluded that the record was insuf-
ficient to support a determination that the
circuit court’s warnings were “sufficiently in-
timidating” as to affect Kim’s decision not to
testify. The ICA reasoned that a trial court is
well within its discretion to warn a defendant
that he or she could lose the right to be
present at trial, if the defendant’s disruptive
behavior persists after the warning.

Il, STANDARD OF REVIEW
HM The validity of a criminal defendant’s
waiver of the right to testify is a question of

429

constitutional law reviewed by this court un-
der the right/wrong standard. See State v.
Gomez-Lobato, 180 Hawai'i 465, 468-69, 312
P.8d 897, 900-01 (2013) (“The validity of a
criminal defendant's waiver of his or her
right to a jury trial presents a question of
state and federal constitutional law.... [Wle
review questions of constitutional law under
the right/wrong standard.”),

IV. DISCUSSION

HS Hawai'i law has historically protect-
ed both the right to testify and the right not
to testify. State v. Monteil, 184 Hawai'i 361,
369, 841 P.8d 567, 575 (2014). The right to
testify is guaranteed by the Fifth and Sixth
Amendments to the United States Constitu-
tion; article I, sections 5, 10, and 14 of the
Hawai'i Constitution; and HRS § 801-2
(1998), State v. Pomroy, 182 Hawai'i 85, 91,
819 P.8d 1093, 1099 (2014). The right not to
testify is guaranteed by the Fifth Amend-
ment and the Hawai'i Constitution’s parallel
guarantee under article I, section 10. Mon-
teil, 184 Hawai'i at 369, 341 P.8d at 575.

Hl In Tachibana v. State, this court held
that, “in order to protect the right to testify
under the Hawai'i Constitution, trial courts
must advise criminal defendants of their
right to testify and must obtain an on-the-
record waiver of that right in every case in
which the defendant does not testify.” 79
Hawai'i 226, 236, 900 P.2d 1293, 1303 (1995).
“In addition to requiring an ‘ultimate collo-
quy, Tachibana strongly recommended trial
courts conduct a prior-to-trial advisement to
inform defendants of their right to testify
and the right not to testify.” Monteil, 184
Hawai'i at 870, 841 P.8d at 576 (quoting
Tachibana, 79 Hawai'i at 237 n.9, 900 P.2d at.
1804 n.9). Thus, trial courts are charged with
a “‘serious and weighty responsibility’” of
ensuring that the waiver of the right to testi-
fy is a knowing and intelligent decision, id. at
871, 341 P.8d at 577 (quoting Tachibana, 79
Hawai‘ at 233, 900 P.2d at 1300), and it is the
trial court’s duty to establish a record suffi-
cient to “effectively settle the right-to-testify
issues in the case.” Pomroy, 132 Hawaii at
93 n.7, 319 P.8d at 1101 n.7 (citing State v.

430

Han, 180 Hawai'i 88, 91, 806 P.8d 128, 136
(2013),

A. The Record Is Insufficient For
Appellate Determination That
The Waiver Was Valid.

I This court has emphasized the impor-
tance of engaging in a “true colloquy” with
the defendant, one that consists of an “ ‘oral
exchange’ in which the judge ascertains the
defendant’s understanding of the proceedings
and of the defendant's rights.” Pomroy, 182
Hawai'i at 98, 819 P.3d at 1101 (quoting Han,
180 Hawai'i at 90, 806 P.8d at 185). “The
failure to engage in a true exchange to ascer-
tain the defendant’s understanding of the
individual rights comprising the Tachibana
colloquy results in the failure to ensure that
[the defendant] understood his [or her] rights
[and] amounts to a failure to obtain the on-
the-record waiver required by Tachibana.”
Id, 319 P.8d at 1101 (first and third altera-
tions in original) (quoting Han, 180 Hawai'i
at 91, 306 P.8d at 136).

TH In this case, the record is insufficient
to support a determination that Kim’s waiver
of his right to testify was voluntarily, intelli-
gently, and knowingly made. Although the
circuit court advised Kim of his right to
testify or not to testify, the court did not
engage in the requisite exchange to ascertain
Kim’s understanding of his rights, After ad-
vising Kim of his rights to testify and not to
testify, the court asked Kim his decision re-
garding testifying, and Kim responded in a
manner that indicated that he did not ade-
quately understand his constitutional rights:

Q, All right. And what is your decision
as to whether you want to testify or not
which is your decision alone?

A, Well, in your words I want to but I
can’t, I don’t think I can, so I’m not going
to,

Q. Well, you know, as I say, it’s your
decision, it’s your case, and it’s you who
has to make the decision.

A, I choose not to,

THE COURT: Okay. I think from what
T've seen and heard, Mr. Kim, he looks
very cognizant and alert and I believe he
understands his right to testify and his

|

right not to testify and that this is his

decision, and he’s voluntarily, knowingly

and intelligently decided to give up that

right,
(Emphasis added.) When Kim stated, “in
your words I want to but I can’t, I don't
think I can, so I’m not going to,” it raised
serious questions as to whether Kim truly
understood his right to testify or not to
testify, It was incumbent on the circuit court
at this point to question Kim further: (1) to
determine why Kim believed he could not
testify, even though he indicated that he
wanted to testify; (2) to clarify any misunder-
standing that Kim had regarding his trial
rights; and (8) to establish a record demon-
strating Kim’s understanding of his right to
testify following the court’s clarification, The
court’s response, “it’s your decision, it’s your
case, and it’s you who has to make the deci-
sion,” did not address what Kim had said.
Although Kim indicated that he was electing
not to testify because he did not think he
could, the court merely repeated what it had
earlier stated—that it was Kim’s decision
whether to testify,

Consequently, the record is silent as to
why Kim believed that he could not testify
despite his apparent willingness to do so,
Because the court only reiterated that it was
Kim’s decision whether to testify, and Kim
responded, “I choose not to,” his choice may
very well have been influenced or dictated by
his belief that he could not testify based on
his understanding that he did not think he
could. Finally, Kim explained that he had
come to his belief that he could not testify as
a result of statements the court made; Kim
stated, “{IJn your words I want to but I
can’t.” Again, the record lacks any inquiry by
the court as to what were the court’s words
to which Kim was referring, what led to
Kim’s confusion, and what needed to be ex-
plained to him in order to address his confu-
sion.

HE The circuit court’s deseription of its
own assessment of Kim as “cognizant and
alert” is not dispositive, “We are tasked with
scrutinizing the language used by both the
court and the defendant to assess whether a
defendant knowingly, intelligently, and volun-
tarily waived his or her right to testify.”

Pomroy, 182 Hawaii at 93 n.7, 819 P.8d at
1101 n.7, While the circuit court’s observation
of Kim may be helpful on review, we cannot
defer to the cireuit court’s “assessment of
{Kim’s] understanding whenever the express
language on the record leaves us with any
doubt about the validity of the colloquy
and/or [Kim’s] waiver.” Id., 819 P.8d at 1101
n.7, Here, Kim’s response to the court that
he was choosing not to testify based upon his
reliance on the circuit court’s earlier state-
ments raises serious concerns as to the ex-
tent to which Kim understood the right to
testify.’ Therefore, without further question-
ing by the circuit court, the record is insuffi-
cient to support a determination that Kim’s
waiver of the right to testify was knowingly,
intelligently, and voluntarily made.

B. Whether The Circuit Court
Intimidated Kim Need Not Be
Determined By This Court.

Kim also contends that the trial court in-
timidated him into not testifying. Because we
conclude that the record is insufficient to
support a determination that Kim’s right to
testify was knowingly, intelligently, and vol-
untarily waived, it is not necessary to resolve
whether the trial court influenced Kim’s deci-
sion not to testify, However, given the ex-
change that took place between Kim and the
cireuit court, we provide guidance on this
matter,

HM The United States Supreme Court
has declared, “It is essential to the proper

7. The exchange between the court and Kim re-
garding his behavior during the trial suggests
that circumstances existed that required the
court to use extra care in ensuring that Kim
understood his rights, It is noted that in circum-
stances where the court has reason io question
the defendant’s understanding, it may be neces-
sary for a trial court to ask additional follow-up
questions to confirm the defendant's understand-
ing, See State v. Phua, 135 Hawai'i 504, 514, 353
P.3d 1046, 1056 (2015) (providing that additional
questioning may be necessary to confirm a defen-
dant's understanding of the court’s warnings of
the risks of waiving counsel and the disadvan-
tages of self-representation). For example, cir-
cumstances requiring additional questioning may
exist where there is a language barrier between
the defendant and the court. See State y. Krstoth,
138 Hawai'i 268, 276, 378 P.3d 984, 992 (2016)
(noting that a language barrier may be a salient

431

administration of criminal justice that digni-
ty, order, and decorum be the hallmarks of
all court proceedings in our country.” Illinois
y. Allen, 397 U.S. 887, 848, 90 S.Ct. 1057, 25
L,Hd.2d 868 (1970); State v. Castro, 69 Haw.
688, 650, 756 P.2d 1038, 1045 (1988). Thus, a
judge should use the powers of the court to
maintain order in judicial proceedings to pre-
vent distractions and disruptions in a trial.§

HHI In conducting judicial proceedings,
trial judges may be confronted with “disrup-
tive, contumacious, [and] stubbornly defiant.
defendants.” Castro, 69 Haw. at 650, 756
P.2d at 1045 (alteration in original) (quoting
Allen, 897 U.S, at 848, 90 S.Ct. 1057). Under
such circumstances, we have stated that trial
judges are vested with “sufficient discretion
to meet the circumstances of each case,” Id.,
‘756 P.2d at 1045 (quoting Allen, 397 U.S. at
343, 90 S.Ct. 1057), A trial judge may remove
a “particularly obstreperous and disruptive
defendant” from the courtroom where the
defendant’s behavior is of “‘an extreme and
aggravated nature’” to justify removal. Id.,
756 P.2d at 1045 (quoting Allen, 397 U.S. at
348-44, 846, 90 S.Ct. 1057); see also Stan-
dards for Criminal Justice: Special Functions
of the Trial Judge § 6-3.8 (Am. Bar Ass’n
2000) [hereinafter ABA Standards for Trial
Judges] (“A defendant may be removed from
the courtroom during trial when the defen-
dant’s conduct is so disruptive that the trial
cannot proceed in an orderly manner.”).

HH At the same time, a “trial judge has
the responsibility for safeguarding ... the

fact that puts a court on notice that waiver by the
defendant may be less than knowing and intelli-
gent); State v. Gomez-Lobato, 130 Hawai'i 465,
472, 312 P.3d 897, 904 (2013) (concluding that
in light of the language barrier between the de-
fendant and court, the defendant's affirmative
answers to the judge's questions did not establish
that he understood he was waiving his right to a
jury trial); Phua, 135 Hawai'i at 514-15, 353 P.3d
at 1056-57 (same). In this case, the circuit court
specifically stated to defense counsel regarding
Kim, “There's something wrong with him.”

8, “A trial judge should maintain order and deco-
rum in judicial proceedings. The trial judge has
the obligation to use his or her judicial power to
prevent distractions from and disruptions of the
trial.” Standards for Criminal Justice: Special
Functions of the Trial Judge § 6-3.5(a) (Am. Bar
Ass'n 2000).

432

rights of the accused.” ABA Standards for
Trial Judges § 6-1.1(a). Trial judges “should
remain sensitive to the various ... interests
... involved in the criminal justice system,”
and “folf utmost importance, ... are the
constitutional rights of the defendant.” ABA
Standards for Trial Judges § 6-1.1(¢) emt. at,
1%, At times, the duties of protecting the
constitutional rights of the defendant and
maintaining the order and decorum of the
proceedings may be in tension. In such cir-
cumstances, the court must be cautious in
exercising its authority to maintain order and
decorum, and the action taken by the court
should be proportional to the perceived dis-
ruption. See Allen, 397 U.S. at 348, 90 S.Ct.
1057 (“No one formula for maintaining the
appropriate courtroom atmosphere will be
best in all situations.”),

Hsin this case, the court informed
Kim in three instances that it was consider-
ing removing him from the courtroom. Cer-
tainly, Kim’s actions of apparently trying to
communicate to the jury from counsel table
that his right hand could not form a fist and
trying to convey his thoughts through facial
expressions provided the basis for interven-
tion by the court. However, the warning to
Kim that the court was very close to ejecting
him from the courtroom appears to have
been premature. “Publie confidence in the
trial process requires that removal of a de-
fendant be limited to cases urgently demand-
ing that action be taken[.] ...” ABA Stan-
dards for Trial Judges § 6-3.8 cmt. at 66. A
defendant charged with a criminal offense
has a right to be present at “each critical
stage of the criminal proceeding.” Onaka vy,
Onaka, 112 Hawai'i 374, 380, 146 P.3d 89, 95
(2006) (citing Rushen v. Spain, 464 U.S. 114,
117, 104 S.Ct, 458, 78 L.Ed.2d 267 (1983),
This right is “of no less than constitutional
magnitude, and is founded upon the Confron-

9, “[A] defendant can lose his right to be present
at trial if, after he has been warned by the judge
that he will be removed if he continues his dis-
ruptive behavior, he nevertheless insists on con-
ducting himself in a manner so disorderly, dis-
ruptive, and disrespectful of the court that his
trial cannot be carried on with him in the court-
room.” Allen, 397 U.S. at 343, 90 S.Ct. 1057.

10. This may be particularly true when the cir-
cumstances indicate that the defendant may be

tation and Due Process clauses of both the
United States and Hawai‘ Constitutions.”
State _v. Walsh, 125 Hawai'i 271, 285, 260
P.8d 350, 864 (2011) (quoting State v. Okv-
mura, 58 Haw. 425, 427, 570 P.2d 848, 851
(1977). The right of presence is “scarcely
less important than the right of trial
itself.” State v. Kaulia, 128 Hawai'i 479, 492,
291 P.3d 377, 890 (2018) (quoting Diaz v.
United States, 223 U.S. 442, 455, 82 S.Ct.
250, 56 L.Ed. 500 (1912)),

On the present record, Kim’s be-
havior had not risen to “‘an extreme and
aggravated’” level such that his trial could
not be carried on with him present.’ Castro,
69 Haw. at 650, 756 P.2d at 1045 (quoting
Allen, 897 U.S. at 846, 90 8.Ct, 1057). While a
court does not have to wait for conduct to
reach an egregious nature before issuing a
warning, the stated consequences of improp-
er behavior should be proportional to the
defendant’s conduct. See id, at 650-58, 756
P.2d at 1045-47; see also ABA Standards for
Trial Judges § 6-8.5 cmt. at 57 “Normally,
the judge should use the least severe meas-
ures available to maintain order and decorum
in the courtroom.”). A court should be cogni-
zant that overstating the sanction for the
behavior involved may risk influencing the
defendant’s exercise of his or her constitu-
tional trial rights.!° See ABA Standards for
Trial Judges § 6-1.4 cmt. at 22 (“The judge
should remain aware that he or she is con-
stantly being observed, and must always be
attentive to the proceedings and to the ap-
pearance of his or her own actions.”).

Additionally, the circuit court advised de-
fense counsel at the bench that, if Kim did
not stop making faces, he would be repri-
manded in front of the jury, and defense
counsel repeated the court’s caveat in Kim’s
presence.!! While the circuit court sought to

more vulnerable to influence by the court or the
defendant lacks experience with the require-
ments of a court proceeding.

11. This warning to admonish Kim in front of the
jury did not concern instructing the jury to disre-
gard the conduct of Kim that the court consid-
ered inappropriate. Immediately after complet-
ing its warning to Kim, the court reconvened the
jury and instructed the jury that it may only

preserve the dignity of the proceedings and
ensure that both sides received a fair trial,
the court’s indication that it would reprimand
Kim or consider reprimanding Kim in the
presence of the jury is generally disfavored.
If it is necessary for a judge to comment
upon the conduct of the defendant or others,
“the judge should do so outside the presence
of the jury, if possible.” ABA Standards for
Trial Judges § 6-8.5. In addition, Standard 6-
8.5 of the Standards for Criminal Justice:
Special Functions of the Trial Judge provides
that, in commenting upon the conduct of trial
participants, the court should “limit[] com-
ments and rulings to what is reasonably re-
quired for the orderly progress of the trial.”
Id.; see also People v. Johnson, 378 Ill.Dee. 1,
998 N.H.2d 1, 24 (Ill. App. Ct, 2012) (quoting
People _v. Eckert, 194 IllApp.8d 667, 141
I.Dec. 688, 551 N.E.2d 820, 825 (1990)) (not-
ing that the trial judge’s comments toward
defense witness and defense counsel outside
the presence of the jury were not “reason-
ably required for the underlying progress of
the trial”).

As we noted recently, “[a] judge should be
courteous, respectful and civil to lawyers,
parties, ... and all other participants in the
legal process.” State v. Barrios, 189 Hawai‘i
821, 889 n.12, 389 P.8d 916, 984 n.12 (2016)
(alteration in original) (quoting Principles of
Professionalism for Hawai'i Judges Principle

consider the sworn testimony of witnesses and
any exhibits that were in evidence.

12, See also Hawai'i Revised Code of Judicial
Conduct Rule 2.8(b) (2009) (“A judge shall be
patient, ... and courteous to litigants, ... and
others whom the judge deals in an official
capacity. ; ABA Standards for Trial Judges
§ 63.41 it 55 (stating that the judge “has the
obligation to be patient with and courteous to all.
participants in the process”),

13. In this case, the circuit court repeatedly told
Kim not to lie; asked Kim to be smart; reminded

433

1).2 “The conduct of the judge sets the tone
of the proceedings.” ABA Standards for Trial
Judges § 6-3.4 emt. at 55. Hence, the judge
may have to exercise “extreme forbearance”
and “self-control,” particularly in criminal
cases, where proceedings are often stressful.
Id. In that sense, a judge should not become
involved in a personal conflict with anyone in
the courtroom,! as it “tends ... to under-
mine judicial authority.” ABA Standards for
Trial Judges § 6-84.

The need for judicial restraint in the exer-
cise of judicial power is heightened by the
possibility that the court’s words or conduct
may be misunderstood by a party in the
proceeding.“ A judge should “be particularly
careful by his or her demeanor not to convey
unintended messages ... to the participants
in the trial process.” ABA Standards for
Trial Judges § 6-1.4 cmt, at 22. For example,
with regard to the right to testify, there may
be circumstances where, in light of the inter-
actions between the court and the defendant,
during trial, the voluntariness of the defen-
dant’s waiver may be implicated. See Tachi-
bana, 79 Hawai'i at 236 n.7, 900 P.2d at 1803
n.7 (noting that, “[iJn conducting the collo-
quy, the trial court must be careful not to
influence the defendant's decision whether or
not to testify”). Consequently, in the inter-
ests of the proper administration of criminal
justice, a court should exercise its authority

Kim that he was on probation, that he was the
accused, and that he was the one looking at
imprisonment; and stated that it did not want to
hear any further statements about emotion, since
Kim is a grown man and thus should be able to
control such emotion.

14, Kim may have misunderstood some of the
court’s statements. In response to the court's
question of whether Kim wanted to testify, Kim
stated, “Well, in your words I want to but I can't,
I don’t think I can, so I’m not going to.”

434

in a restrained and dignified manner while,
at the same time, preserving order and deco-
rum in judicial proceedings, ABA Standards
for Trial Judges § 6-3.5; Johnson, 373 Ill.
Dee, 1, 998 N.E.2d at 24,

V. CONCLUSION

Hs The record in this case is insuffi-
cient to support a determination that Kim’s
waiver of the right to testify was knowingly,
intelligently, and voluntarily made. Kim’s re-
sponse to the circuit court during the ulti-
mate Tachibana colloquy indicated that he
did not understand his right to testify, and
the court did not engage in an exchange that
adequately established, on the record, Kim’s
understanding of that right. This error was
not harmless beyond a reasonable doubt,'®
given that Lewis’s testimony was not entirely
consistent and was not corroborated.

Accordingly, the ICA Judgment on Appeal
and the cireuit court Judgment of Conviction
and Sentence are vacated, and the case is
remanded to the circuit court for further
proceedings,

OPINION CONCURRING IN PART
AND CONCURRING IN THE
JUDGMENT BY RECKTENWALD, C.J.

I join in all aspects of the Majority’s opin-
ion except the discussion in Part IV-B of
whether the circuit court's alleged intimi-
dation of the defendant played a role in his
decision not to testify, As the Majority notes,
that discussion addresses an issue that is not
necessary to the opinion, and accordingly, I
do not join in that portion of the Majority
opinion,

15. “Once a violation of the constitutional right to
testify is established, the conviction must be va-
cated unless the State can prove that the viola-
tion was harmless beyond a reasonable doubt,”

Han, 130 Hawai'i at 93, 306 P.3d at 138 (quoting
Tachibana, 79 Hawai'i at 240, 900 P.2d at 1307).

With regard to the Tachibana colloquy, I
join the Majority’s analysis because I believe
the court was required to follow up more
completely on defendant’s comment that “I
want to [testify] but I can’t, I don’t think I
can, so I’m not going to.” The court respond-
ed to that comment by reiterating that “it’s
your decision, it’s your case, and it’s you who
has to make that decision,” and defendant
stated, “I choose not to.” However, given the
ambiguity of defendant’s comment that “I
can’t” testify, the court should have inquired
about the basis for defendant’s apparent
doubt. The need to inquire further in light of
that comment was particularly clear in light
of defendant’s conduct earlier in the trial,
which in effect constituted a “salient fact”
that required additional caution on the part.
of the trial judge. See State v. Gomez-Loba-
to, 180 Hawai'i 465, 470-78, 312 P.38d 897, 902-

05 (2018).

402 P.3d 510

Diane KAWASHIMA, individually and on
behalf of all others similarly situated,
Plaintiff-Appellee/Cross-Appellant,

ve

STATE of Hawaii, DEPARTMENT OF
EDUCATION; Kathryn S. Matayoshi, in
her official capacity as Superintendent
of Schools; Lance A. Mizumoto, Brian J.
Delima, Patricia Bergin, Grant Y.M.
Chun, Maggie Cox, Hubert Minn, Ken-

‘Under the harmless beyond a reasonable doubt
standard, “[tJhe relevant question ... is whether
there is a reasonable possibility that error might
have contributed to [the] conviction.” Id., 306
P.3d at 138 (quoting State v. Schnabel, 127 Ha-
wai'l 432, 450, 279 P.3d 1237, 1255 (2012)).

neth Uemura, Bruce Voss, Jim Williams,
Andrea Lyn Mateo, and Colonel Peter P,
Santa Ana, in their official capacities as
members of the State of Hawai‘l Board
of Education, Defendants—Appel-
lants/Cross~Appellees,

David Garner, Patricia Smith, Andrea
Christie, Allan Kliternick, Karen Souza,
Jo Jennifer Goldsmith, and David Hud-
son, on behalf of themselves and all oth-
ers similarly situated, Plaintiffs—Appel-
lees,

Y

State of Hawai‘i, Department of
Education, Defendants—
Appellants,

Allan Kliternick, David Garner, Jo Jenni-
fer Goldsmith, and David Hudson, indi-
vidually and on behalf of all others simi-
larly situated, Plaintiffs~Appellees,

ve

Kathryn S. Matayoshi, in her official ca-
pacity as Superintendent of Schools,
Lance A. Mizumoto, Brian J. Delima,
Patricia Bergin, Grant Y.M. Chun, Mag-
gie Cox, Hubert Minn, Kenneth Uemura,
Bruce Voss, Jim Williams, Andrea Lyn
Mateo, and Colonel Peter P. Santa Ana,
in their official capacity as members of
the State of Hawai'i Board of Edu-
cation, Department of Education, State
of Hawai‘i, Defendants—Appellants,

SCAP-15-0000462
Supreme Court of Hawai'i.
DATED: Honolulu, Hawai'i, July 27, 2017

By: Recktenwald, C.J.

ORDER DENYING MOTION FOR
RECONSIDERATION
Plaintiffs-Appellees timely filed a motion
for reconsideration (Motion) on July 20, 2017,

435

asking this court to reconsider our June 28,
2017 opinion (Opinion).

This court, having reviewed the Motion,
together with the Opinion, and the records
and files in this case,

IT IS HEREBY ORDERED that the Mo-
tion is denied.

402 P.3d 511
STATE of Hawai‘, Plaintiff-Appellee,
v.
Keoni C. PETERS, Defendant-Appellant
NO. CAAP-16-0000691
Intermediate Court of Appeals of Hawai‘.

DATED: Honolulu, Hawai'i,
September 22, 2017.

SUMMARY DISPOSITION ORDER
Affirmed.

402 P.3d 512
STATE of Hawai‘i, Plaintiff-Appellee,
vy.
Aaron SOARES, Defendant-Appellant
NO. CAAP-16-0000878
Intermediate Court of Appeals of Hawaiti.

DATED: Honolulu, Hawai'i,
September 27, 2017.

SUMMARY DISPOSITION ORDER
Affirmed.

L
402 P.3d 512
STATE of Hawai'i, Plaintiff-Appellee,
ve

Vicente Kote Kapika HILARIO,
Defendant-Appellant.

NO. CAAP-14-0000854
Intermediate Court of Appeals of Hawai‘.

DATED: Honolulu, Hawai'i,
September 28, 2017.

SUMMARY DISPOSITION ORDER

Vacate, Remand.

LI
402 P.3d 512
STATE of Hawai‘i, Plaintiff-Appellee,
v

Jameel Richard DOWLING,
Defendant-Appellant.

NO. CAAP-16-0000809
Intermediate Court of Appeals of Hawai‘.

DATED: Honolulu, Hawai'i,
September 28, 2017.

SUMMARY DISPOSITION ORDER
Affirm.

8

403 P.3d 214

GOLD COAST NEIGHBORHOOD
ASSOCIATION,

v

STATE of Hawaii

State of Hawai‘i By Its Attorney General
v.

Tropic Seas, Inc; The Association of
Apartment Owners of Diamond Head
Beach, Inc.; Olivia Chen Lum, Trustee
of the Olivia Chen Lum Revocable Liv-
ing Trust; Clarence Kwon Hou Lum,
Trustee of the Clarence Kwon Hou
Lum Trust and Trustee Under the Will
and Estate of Chow Sin Kum Lum;
Jeanne S.J. Chan and Howard N.H.
Chan, Trustees of the Jeanne SJ.
Chan Trust; Diamond Head Ambassa-
dor Hotel, Ltd; Diamond Head Apart-
ments, Ltd; C S Apartments, Ltd; The
Association of Apartment Owners of
2987 Kalakaua Condominium; Tahiti-
enne, Incorporated; The Association of
Apartment Owners of 3003 Kalakaua,
Inc; The Association of Apartment
Owners of 3019 Kalakaua, Inc,

SCWC-14-0000472

Supreme Court of Hawaii.
AUGUST 25, 2017

oO
=

iS

Douglas 8. Chin and William J. Wynhoff,
Honolulu, for petitioner.

Robert G. Klein, Jordon J. Kimura,
Randall K. Schmitt, and Troy J.H. Andrade,
Honolulu, for respondent.

McKENNA AND POLLACK, JJ., AND
CIRCUIT COURT JUDGE
CASTAGNETTI, IN PLACE OF WILSON,
J., RECUSED, WITH NAKAYAMA, J.,
DISSENTING, WITH WHOM
RECKTENWALD, C.J., JOINS

OPINION OF THE COURT BY
POLLACK, J.

I, INTRODUCTION

For at least the past 65 years, residents
and visitors of O’ahu have been free to walk
along the cement path atop a seawall (the
Seawall) on or near the seaward boundaries
of property between 2943 Kalakaua Avenue
and 3019 Kalakaua Avenue to access the
beach, shoreline, and ocean in order to swim,
surf, fish, and enjoy other activities of island
living. Over the course of these many dec-
ades, the State has paid for and completed
repairs and maintenance on the Seawall, en-
abling the public to continue to safely use the
footpath. As recently as 2006, the Hawaii
State Legislature appropriated funds to re-
pair the Seawall. However, the State shortly
thereafter disclaimed any duty to maintain
the Seawall, prompting commencement of
this lawsuit to require the State to maintain
and keep the Seawall in good and safe condi-
tion,

The Circuit Court of the First Circuit (cir-
cuit court) ruled that based on the applicable
Jaw and the uncontested evidence in this
case, the State had obtained an easement for
public use over and across the Seawall by
virtue of common law implied dedication. The

Intermediate Court of Appeals (ICA) unani-
mously agreed. We conclude that in light of
(1) Hawaii’s long-standing principles of com-
mon law, (2) the historical significance and
deep roots of implied dedication in this juris-
diction as evidenced by nearly 150 years of
this court’s precedent, and (8) the undisputed
evidence in this case, the cirenit court and
the ICA correctly determined that the State
obtained an easement over and across the
Seawall by common law implied dedication,

In addition to determining that the State
owned an easement over and across the Sea-
wall by implied dedication, the circuit court
also ruled that the State owned the real
property under the Seawall by virtue of sur-
render under Hawaii Revised Statutes § 264-
1(@)@) (2007). Given this court’s precedent,
however, ownership of the Seawall was not
transferred to the State by virtue of surren-
der. Thus, the circuit court and the ICA
erred in concluding that the State owns the
Seawall and the real property under the Sea-
wall,

Given our disposition with respect to the
merits of Gold Coast's claims in this case, we
also determine whether the circuit court
properly denied Gold Coast’s motion for at-
torneys’ fees and costs against the State.
Although the ICA determined that an award
of both fees and costs was permissible in this
ease, we conclude that this ruling and the
circuit court’s ruling were both partially er-
roneous because the State waived its sover-
eign immunity with respect to costs but not
attorneys’ fees.

Il. BACKGROUND

A. Construction, Public Use, and State
Repairs to the Seawall

At issue in this case is a length of seawall
that stretches from the seaward boundaries
of property between 2943 Kalakaua Avenue
and 3019 Kalakaua Avenue (the Seawall),
The Seawall runs along Waikiki’s “Gold

1. Specifically, the Seawall subject to the instant
litigation borders eleven properties identified by
the following Tax Map Key Nos. and owned or
managed by the corresponding entities: Tropic
Seas, Inc. (TMK No, 3-1-032:030), Diamond
Head Beach Hotel (TMK No. 3-1-032:029), Dia-
mond Head Ambassador Hotel, Ltd. (TMK Nos..

441

Coast,” an area of condominiums and cooper-
ative apartments located on ocean front lots
near the Diamond Head end of Kalakaua
Avenue! The Seawall was originally con-
structed by private parties over eighty years
ago. Since approximately 1980, the Seawall
has been used by both residents and mem-
bers of the general public, without interfer-
ence or restriction, to access the ocean and to
traverse along the Waikiki coastline.

For decades, the State has maintained the
Seawall, conducted necessary repairs to the
Seawall, and otherwise assumed responsibili-
ty to preserve and manage the Seawall. In at
least 1982, 1984, and 1998, the State conduct-
ed various repairs to the Seawall, and local
and state appropriations were made by the
relevant legislative bodies in contemplation of
further repairs in at least 1989, 1992, and
2006. By stipulation of the parties in this
case, the repairs were described as follows:

@ In June 1982, the State of Hawai‘i De-

partment of Land and Natural Resources

(LNR), Land Division, performed “emer-

gency repair work” to “shore approximate-

ly 40 feet of the Seawall along the bound-
ary of Diamond Head Apartments.” By

1981 Haw. Sess. Laws Act 1, Item K-2, the

State legislature authorized the expendi-

ture of $25,000.00 for these repairs,

@ Sometime in 1982, the DLNR, Land
Division, performed repairs and “rehabili-
tated broken sections of the Seawall” from
the Elks Club property to near the Dia-
mond Head end of Kalakaua Avenue. The
funding for the repairs was appropriated
by 1981 Haw, Sess. Laws Act 1, Item K-2,
and by 1981 Haw. Sess, Laws Act 264,
Item K-2.

e “Sometime after May 1984,” the State
performed additional repair work on “one

or more portions of the Seawalls pursuant
to work identified as Job No. 1-01-81,
Waikiki Seawall Walkway Rehabilitation,
Phase III.” The original scope of this pro-

3-1-032:028, 27, 26), Diamond Head Apts. Ltd.
(TMK No, 3-1-032:004), C S Apts Ltd. (TMK No.
3-1-032:003), 2987 Kalakaua Condominium
(IMK No. 3-1-032:002), Tahitienne, Incorporated
(TMK No. 3-1-032:001), 3003 Kalakaua (TMK
No. 3-1-033:01 and 3019 Kalakaua Avenue
(TMK No, 3-1-033:009).

442

ject consisted of “rehabilitating seawalls,
constructing hand railing and other inci-
dental and appurtenant work necessary to
complete this project.” ?

@ On December 8, 1992, following Hurri-
eane Iniki, the Honolulu City Council
passed a resolution authorizing the DLNR
“to rehabilitate the existing Seawall walk-
way located in Diamond Head, Oahu and
identified by TMK Nos. 8-1-032:001, 002,
008, 004, 026, 027, 028 and 029, and 8-1-
083;002, 008 , 004, 005, 006, 007, 008, 009,
010, 011, 058, and 056.” The repair and
rehabilitative work conducted pursuant to
this project was limited to portions of the
Seawall in front of the Diamond Head
Ambassador Hotel. The construction was
authorized _by the Hawai'i legislature by
1989 Haw. Sess, Laws Act 316, Item K-11.
Repairs were completed in September
1998 at a contract price of $609,605.00.
Pursuant to this project, “the State built or
rebuilt essentially the entire wall in front
of ... three properties” along the Seawall,
although “to the extent the State built the
wall makai of the then shoreline the wall
[was] on State property.”

© In an October 18, 1993 letter from the
DLNR, the Manager-Chief Engineer of
the DLNR stated that further repair work

. 4

Since at least 1975, various assertions
made by the State have further manifested
its long-held position that the Seawall serves
as a public right-of-way and that the State
has the duty and responsibility to maintain
the Seawall for use by the public. The parties
stipulated that the following relevant docu-
ments would be entered into evidence in this
case:

@ A February 27, 1975 memorandum au-
thored by Wallace W. Weatherwax, Depu-
ty Attorney General (DAG Weatherwax),
to the Department of Transportation’s
Harbors Division intended to resolve the
Harbors Division’s inquiry as to “whether
or not the State has the responsibility to
maintain and improve a public right of way
which passes over a seawall located within”
TMK No. 8-1-88-2 and TMK No. 8-1-88-53,
In the memorandum, DAG Weatherwax
stated the fact of “the use by the public of
this right of way since 1930” and concluded
that “the State has the responsibility to
maintain the public right of way over the
seavwall.”

e A 1982 Environmental Assessment is-
sued by the DLNR regarding the repair of
a portion of the Seawall near the Diamond
Head Apartments, in which the DLNR
stated that “[tJhe top of the seawall serves
as a public walkway for residents and bea-

on_the Seawall was scheduled for TMK
Nos, 8-1-82:029, 004, 003, 002, 001, 3-1-
033:011 and 009.

e In 2006, the Hawai'i legislature approp-
riated $2 million for “plans, design and
construction for the resurfacing of the sea-
wall and installation of railings along Waik-
iki’s Gold Coast.” The appropriation was
included within H.B. 1900 in a section ti-
tled “Waikiki Seawall Improvements,
Oahu.”

(Emphases added.)

2. A table included with the parties’ stipulation
shows that during Phase III, the State conducted
the following repairs: “[clrack repair on walk-
way—chip off loose material and epoxy the
crack”; “[rlepair nosing at edge of walkway”;
“[rlemove loose concrete topping and pour 4”

chgoers to traverse along the shores of
Waikiki Beach” and that “[rlesidents, sur-
fers, beachgoers and fishermen use the top
of the seawall to traverse between the
Diamond Head end of Waikiki Beach and
Sans Souci Beach.”

e A document dated May 1984 relating to
the “Waikiki Seawall Walkway Rehabilita-
tion” project stating that “the State has a
right-of-way over the seawall and has ob-
tained a right-of-entry onto” certain prop-
erties “for the rehabilitation of the seawall
walkway.”

thick x 3°6” wide concrete later”; “[rlepair walk-
way—remove loose concrete topping and replace
with 2” thick cement mortar (Taper new con-
crete left to right, see G-2)"; and “[aldd new
concrete walkway on top of existing wall.”

e@ A “Notice of Determination (Negative

Declaration)” relating to the “Waikiki Sea-

wall Walkway Rehabilitation Project” is-

sued by the DLNR, Water and Land De-
velopment Division, with a handwritten
notation at the top identifying the docu-
ment as “1992-10-28-OA-FEA-Waikiki

Seawall Walkway,” describing proposed

repairs to the Seawall in the amount of

$550,000.00 and stating that “the State of

Hawai'i _has a right-of-way over all the

seawalls and walkways and is responsible

to keep them in good and safe condition”
and that “the walkways are used by the
general public.”
(Emphases added.) Thus, for many decades,
the Seawall has been enjoyed by members of
the general public and repaired, maintained,
and overseen by the State.

Gold Coast Neighborhood Association
(Gold Coast) is “a non-profit incorporated
organization doing business in the City and
County of Honolulu, and is comprised of
individuals and organizations that own, live
in, or have an interest in real property along
Kalakaua Avenue on the Waikiki coastline in
the City and County of Honolulu, State of
Hawai'i.” Many of the members of Gold
Coast represent the apartments and condo-
miniums located along the Seawall. Following
an appropriation of funds to repair the Sea-
wall by the Hawai'i State Legislature in 2006,
counsel for Gold Coast and representatives
from the State discussed the need for main-
tenance to the Seawall. However, at a point
during these discussions, the State informed
Gold Coast’s counsel that it now disclaimed
any duty to maintain the Seawall.

B. Cireuit Court Proceedings

On June 22, 2007, Gold Coast filed a com-
plaint against the State seeking a declaration
from the circuit court that “the State is
required to maintain the Seawall and keep it
in good and safe condition.” In its complaint,
Gold Coast identified the Seawall as border-
ing twenty-one properties on Kalakaua Ave-
nue. Gold Coast also sought an order award-
ing it attorneys’ fees and costs “as allowed by
law”

3. The Honorable Eden E. Hifo presided over the

443

In July and August of 2007, the parties
filed cross-motions for summary judgment.)
Gold Coast contended in its summary judg-
ment motion that the State was obligated to
maintain the Seawall by virtue of its owner-
ship of the Seawall, or, in the alternative, by
virtue of an easement over the Seawall. The
State rejected these arguments in its sum-
mary judgment motion and contended, inter
alia, that Gold Coast had failed to join indis-
pensable parties to the action because it had
not joined all those property owners whose
interests in property under or near the Sea-
wall might be affected by the litigation.

Prior to the circuit court’s ruling on the
parties’ summary judgment motions, Gold
Coast filed a first amended complaint (First
Amended Complaint) removing ten of the
twenty-one properties and adding one prop-
erty. At a continued hearing on the parties’
summary judgment motions on August 20,
2008, the court heard oral argument on
whether the First Amended Complaint
“cured the problem” alleged by the State
regarding indispensable parties to the law-
suit, The State contended that the First
Amended Complaint was not sufficient to
eure Gold Coast’s failure to join indispens-
able parties, arguing in part that the various
homeowners’ associations were not legally
authorized to represent private property
owners in the litigation. Gold Coast respond-
ed that each of the properties named in the
First Amended Complaint was represented
by associations that had agreed on behalf of
their members to join Gold Coast and sup-
port the lawsuit and that the associations
were entitled to represent their property
owners’ interests. Thus, “each individual
owner’s interest [was] secured and repre-
sented” by the relevant association that was
authorized to act on the owner's behalf.

At the close of the August 20, 2008 hear-
ing, the court ruled that Gold Coast had not
failed to join indispensable parties, reasoning
that “given the First Amended Complaint
... there have been amendments to ensure
that the condominiums or co-ops that are
contiguous to the seawalls that are identified
by the TMKs in [the First Amended Com-

summary judgment proceedings in this case.

444

plaint] are members of [Gold Coast], which is
the party.” The court further elaborated that
it did not construe “the fact that the individu-
al owners of the condos are not named par-
ties” to be an “impediment to the lawsuit
going forward, inasmuch as the [Associations
of Apartment Owners] bind them all.” The
court then ruled that Gold Coast could pro-
ceed in the litigation under the theories of
common law implied dedication and surren-
der under Hawaii Revised Statutes (HRS)
§ 264-1, but that both issues were subject to
genuine issues of material fact precluding
summary judgment.

On April 26, 2010, the State filed its own
complaint for declaratory relief with the cir-
cuit court, naming as defendants some of the
individual owners and associations of the
properties included in Gold Coast’s First
Amended Complaint. In its complaint, the
State sought a declaration that “[the State]
does not own the seawalls or the real proper-
ty under the seawalls” and that “the State
does not have an easement by prescription or
implication over the seawalls.” The circuit
court, in accordance with the State’s unop-
posed motion,‘ consolidated the case brought
by Gold Coast with the case brought by the
State.®

On March 18, 2011, the parties filed a First
Stipulation of Facts (Stipulated Facts) per-
taining to the identities of the parties and the
portions of the seawall at issue in the case.
The Stipulated Facts described past repair

4, The State in its motion to consolidate contend-
ed that it had “specifically” filed its complaint so
that the disposition of the case relating to owner-
ship and maintenance of the Seawall would “‘ex-
plicitly [bind}” the individual property owners
and associations, rather than solely Gold Coast
acting on their behalves.

8. On September 13, 2010, Gold Coast filed a
second amended complaint (Second Amended
Complaint) removing TMK No. 3-1-033;:010 from.
the complaint. Thus, the current litigation in-
volves eleven properties. These eleven properties
are owned or managed by various entities, each
of which is a member of Gold Coast. See supra
note 1.

6. Specifically, the Stipulated Facts relate that
“folther than as stated in paragraph 40, the State
does not hold an express easement over any of
the seawalls subject of these lawsuits.” (Empha-
sis added.) However, because the Stipulated
Facts does not contain a paragraph 40, it ap-

work and construction completed on the Sea-
wall, including the State’s performance of
various repairs to the Seawall in 1982, 1984,
and 1998, and local and state legislative ap-
propriations in contemplation of further re-
pairs in 1989, 1992, and 2006, as described in
greater detail above. The parties stipulated
to events surrounding the State’s sale to the
Gold Coast in 2008 of a non-exclusive ease-
ment for “the right, privilege, and authority
to construct, use, maintain and repair” a
ladder accessing the ocean from a 87-square-
foot portion of land along the Seawall. The
parties further stipulated that TMK No. 8-1-
038:009 was subject to an “easement of right
of way for pedestrians,” The parties agreed
that as otherwise stated by the Stipulated
Facts, “the State does not hold an express
easement over any of the seawalls [which are
the] subject of these lawsuits.” ¢

On March 22, 2011, the circuit court? held
a bench trial at which three witnesses for
Gold Coast testified.® June Anderson, a resi-
dent of Diamond Head Apartments on the
Gold Coast since 1971, testified that she has
regularly observed members of the public
walking along the Seawall, climbing over the
Seawall to access the ocean, and otherwise
utilizing the Seawall for recreational pur-
poses. Ms. Anderson also testified that be-
fore becoming a resident of her Gold Coast
building, she visited the Waikiki area as early
as 1952 and traversed the Seawall as a gen-
eral member of the public several times.

pears that this stipulation refers to the immedi-
ately preceding paragraph regarding the ease-
ment held by the State over TMK No. 3-1-
033:009.

7. The Honorable Virginia L. Crandall presided
over the trial.

8. Russel Tsuji, an official of DLNR, testified for
the State regarding public access to the Seawall,
the buildings located near the Seawall, and the
appearance and condition of the Seawall.

9. The record reflects an agreement between the
parties that declarations submitted by the three
witnesses during summary judgment proceedings
would be entered into the record in support of
Gold Coast's claims, In the declaration submitted
by Ms. Anderson, she further stated that she
“also observed many other people walking along
the Diamond Head Seawall” during her visits to
the area between 1952 and 1958.

According to Ms. Anderson, since 1971, she
has never “seen anyone attempt to keep peo-
ple from walking on the [S]eawall walkway.”
Ms. Anderson further testified that her
building, Diamond Head Apartments, was
not “insured for the [SJeawall” and that the
residents have “never considered [the Sea-
wall] [their] property really.” Similarly,
Robert Gentry, a resident of the Gold Coast
since 1982 and president of the Gold Coast
Neighborhood Association, testified that from
his residence, he observed a “[t}remendous
amount of recreational activity” by members
of the public utilizing the Seawall and the
ocean beyond, including swimming, fishing,
surfing, dog-walking, and lifeguarding activi-
ties. Mr. Gentry added that he has “never”
tried to stop anyone from walking along the
Seawall.!! Mr. Gentry also noted that, to the
best of his knowledge, his building has never
had insurance over the walkway on the Sea-
wall.

The circuit court heard additional testimo-
ny from Guy Bishaw, a Waikiki resident who
does not own property on the Gold Coast and
who does not have a relationship with the
Gold Coast Neighborhood Association, who
described his continuous use of the Seawall
for ocean access and other recreational pur-
poses since the 1950s. Mr. Bishaw further
testified that in all the time he has used the
Seawall to reach various surf spots, no one
has “ever tried to stop [him] from walking on
the wall” or “told [him] that the seawall was
private property and [he] better not walk on
the wall.”

10. In her declaration, Ms. Anderson also stated
that to the best of her knowledge, “during the
time in which [she has] been familiar with the
Diamond Head Seawall, no owner of property
adjacent to the Diamond Head Seawall has ever
blocked the public from accessing the Diamond
Head Seawall, performed any repairs on the
Diamond Head Seawall, or exerted any other
similar form of control or act of ownership over
the Diamond Head Seawall.”

11. In Mr. Gentry’s declaration submitted during
summary judgment proceedings, Mr. Gentry
elaborated that to the best of his knowledge, (1)
"no owner of property along the Diamond Head
Seawall, including [Mr. Gentry] and other mem-
bers of the [Gold Coast Neighborhood Associa-
tion], has ever blocked the public from using the
Diamond Head Seawall,” (2) the Gold Coast

445

On November 29, 2018, the circuit court
issued its Findings of Fact, Conclusions of
Law, and Order (Findings of Fact and Con-
clusions of Law). The circuit court deter-
mined that Gold Coast had prevailed on its
implied dedication and surrender claims and
was therefore “entitled to a declaratory rul-
ing” that the State has an easement over and
across the Seawall by implied dedication and
that the State owns the Seawall and the real
property under the Seawall by surrender.

In its Findings of Fact and Conelusions of
Law, the circuit court made extensive find-
ings of fact regarding the parties, the identi-
fication and characteristics of the properties
at issue, access to the Seawall from Kalakaua
Avenue, the history of the State’s repair
work on the Seawall and communications by
the State regarding its responsibility to
maintain the Seawall, miscellaneous facts re-
garding various properties included in the
lawsuit,” and a site visit conducted by the
court and counsel for Gold Coast and the
State. The court also made findings of fact
regarding the public's use of the Seawall,
stating in finding of fact (FOF) 108 that
“[t]he public has used the Seawall for both
shoreline and ocean access for decades and
has done so without any apparent interfer-
ence from any private landowners along the
Gold Coast.”

In its conclusions of law, the circuit court
addressed common law implied dedication
and also evaluated surrender under the Ha-
waii Revised Statutes.

Under the law of implied dedication, the
circuit court stated that Gold Coast was re-

Neighborhood Association “assumes that owners
of property bordering the Diamond Head Sea-
wall do not have the right to block the public
from using the seawall,” and (3) “owners of
property along the Diamond Head Seawall ...
have acquiesced in the public’s use of the Dia-
mond Head Seawall as a walkway and for recre-
ational purposes.”

12. In finding of fact (FOF) 52, the court found
that the property identified as TMK No. 3-1-
033:009 was registered in land court. In FOF
105, the court also found that TMK No. 3-1-
033:009 was subject to an express easement for
pedestrian use in favor of the State. In FOF 106,
the court found that “[ojther than as stated in
[FOF 105], the State does not hold an express
easement over any portion of the Seawall that is
the subject of these lawsuits.”

446

quired to demonstrate “an offer and accep-
tance of dedication both of which may be
implied based on the circumstances.” The
court determined that if “regular and contin-
uous use by the public” was the only evi-
dence of implied dedication, “the time period
must be ‘much longer’ than the twenty year
prescriptive period under HRS § 657-31,” re-
lying on this court’s decision in In re Ban-
ning, 73 Haw. 297, 882 P.2d 724 (1992). Proof
of an offer of dedication was evidenced by
“the long-continued public use of the Seawall
as a walkway from the 1980s to the present.”
Acceptance of the offer of dedication was
demonstrated both by the “uncontroverted
direct evidence of public use of the Seawall
as a walkway from at least 1952 to when
[the] suit was filed” and the State’s “asser-
tion of dominion and control over the Seawall
through the State’s statements that the Sea-
wall is a public right of way and the State’s
actions in repairing and rehabilitating the
Seawall.”

Additionally, the cireuit court determined
that in order to prevail under the surrender
theory pursuant to HRS § 264-1(¢) (2007),
Gold Coast must prove, “at the very least,”
the following two elements: (1) “the Seawall
is a thoroughfare that was opened, laid out,
or built by private parties,” and (2) “the
owners have not exercised an act of owner-
ship over the Seawall for five years or
more.” 8

With respect to the first two elements of
HRS § 264-1(c), the court concluded that the
Seawall exists as a walkway running along
the shoreline that was originally constructed
by private parties; the court further deter-
mined that Gold Coast had established that
the owners had not exercised an act of own-
ership over the Seawall for five years or
more. The court recognized the possibility of
a third requirement that the State hold a
preexisting easement over the relevant prop-
erty arising from this court’s decision in In
13, The circuit court also addressed and rejected

the State’s argument that “formal acceptance by

the State is required in order to transfer owner-
ship by surrender,” concluding that the plain
language of the surrender statute did not support
such a reading because "[i}f formal acceptance
were required, the transfer would not be

‘deemed! to have taken place” as set forth by the

statute.

|

re Banning, 73 Haw. 297, 882 P.2d 724 (1992),
The court concluded that this requirement, if
applicable, would also be satisfied because
the State held an express easement over
TMK No. 38-1-088:009 and a prescriptive
easement “over all the remaining parcels”
with the exception of TMK Nos. 3-1-032:029
and 30 “where the Seawall is almost wholly
within property registered in land court.” 4
As a result, the court determined that Gold
Coast proved that the Seawall “was surren-
dered to the State in accordance with HRS
§ 264-1(¢),” with the exception of those por-
tions of the Seawall located at TMK Nos. 8-1-
032:029 and 8-1-032:080, which were proper-
ties registered in land court. See HRS § 501-
87 (2006) (providing that land registered in
land court cannot be deemed to have been
surrendered under the Hawaii Revised Stat-
utes).

The circuit court issued its Final Judgment
concluding that the State holds an easement
by implied dedication over the Seawall in-
cluding those portions of the Seawall at TMK
Nos. 8-1-082:029 and 8-1-082:080, The Final
Judgment additionally determined that the
State owns the Seawall and the real property
underneath the Seawall except as to those
portions at TMK No, 8-1-032:029 and TMK
No. 8-1-082:080 that are on privately owned
land registered in land court. The State’s
complaint for declaratory judgment in Civil
No. 10-1-10888-04 VLC was dismissed with
prejudice. The Final Judgment set forth that
each party “shall bear its/his/her own attor-
neys’ fees and costs.”

Gold Coast subsequently filed a motion for
attorneys’ fees and costs in the amount of
$376,539.25 (Motion for Attorneys’ Fees and
Costs), asserting that the State’s sovereign
immunity was “not implicated” because the
State had filed its own complaint against
Gold Coast and that Gold Coast was entitled
to fees under the private attorney general

14, Although the court concluded that the third
element, that the State hold a preexisting ease-
ment over the relevant property, was satisfied in
this case, it maintained in conclusion of law 11
that it was “not convinced” that this element was
required to effectuate a surrender under HRS
§ 264-1(c).

doctrine. Gold Coast also suggested that even
if sovereign immunity barred an award of
attorneys’ fees, the “interest[s] of justice”
would require the court to invoke its inherent
authority under the Hawaii Revised Statutes
to award Gold Coast the fees it sought. Final-
ly, Gold Coast contended that it was entitled
to costs against the State pursuant to HRS
§ 607-24 (1998) because it received a final
judgment against the State and was the pre-
vailing party in the litigation. The State in its
opposition argued that fees were barred by
the State’s sovereign immunity and that Gold
Coast did not meet the requirements to merit
a fee award under the private attorney gen-
eral doctrine. The State alternatively con-
tended that even if Gold Coast was entitled
to fees, the requested amount must be sub-
stantially reduced. As to costs, the State
argued that Gold Coast was not a prevailing
party, and, in the alternative, that Gold Coast
had provided “absolutely no detail as [to] any
of their charges.” On May 12, 2014, the cir-
euit court entered an order denying Gold
Coast’s Motion for Attorneys’ Fees and
Costs (Order Denying Fees and Costs) be-
cause the State “ha[d] not waived its sover-
eign immunity as to an award of attorneys’
fees and costs in the circumstances of this
case.”

C. ICA Proceedings

The State appealed the circuit court’s
Findings of Fact and Conclusions of Law and
the Final Judgment to the ICA. The State
argued that the circuit court erred on the
merits by ruling that the State acquired an
easement over the Seawall by common law
implied dedication and/or that it owned the
Seawall by virtue of surrender under HRS

15. The State also contended that the circuit court
lacked jurisdiction, arguing that the declaratory
judgment statute was inapplicable, that Gold
Coast lacked standing, and that the action consti-
tuted an improper quiet title action to which
Gold Coast was “not a proper party” and to
which the “actual owners” of the properties
were indispensable parties, The ICA rejected the
State’s jurisdictional claims and determined that
Gold Coast’s complaint could not be treated as
an action for quiet title, Gold Coast Neighbor-
hood Ass'n v. State, 136 Hawai'i 340, 353, 361
P.3d 1243, 1256 (App. 2015). The ICA did not
rule on the State’s argument regarding indis-
pensable parties, To the extent that the State

|

447

§ 264-1(c).5 The State contended that “state
Jaw specifically prohibits the State from ac-
quiring ownership of real property or any
interest in real property without the State’s
acceptance,” and because the State did not
formally accept transfer of the Seawall, no
implied dedication or surrender of the Sea-
wall was effectuated, In support of its argu-
ment, the State relied on HRS §§ 171-30
(1998), 26-7 (2009) (ast amended 1990), 107-
10 (Supp. 2001), and 520-7 (2006).!6 The State
additionally asserted that the evidence was
insufficient to support a finding of common
law implied dedication or statutory surren-
der.

Further, the State argued that the Seawall
could not be surrendered to the State be-
cause it was not a “trail” or “public highway”
within the meaning of HRS § 264-1, and,
thus, it was not a type of property subject to
surrender under the statute. The State dis-
tinguished this case from Levy v. Kimball, 50
Haw, 497, 448 P,2d 142 (1968), in which this
court held that a particular seawall constitut-
ed a “public highway” within the meaning of
HRS § 261-1, because unlike in Levy, the
State had not acquired a preexisting express
easement over the Seawall with the exception
of TMK No, 3-1-088:009.

Gold Coast cross-appealed the circuit
court’s Order Denying Fees and Costs, con-
tending that it was entitled to attorneys’ fees
under the private attorney general doctrine,
that the State had waived its sovereign im-
munity because it had filed its own complaint
against Gold Coast, and that the interests of
justice required the court to award fees using
its inherent authority.

repeats on certiorari its argument that the circuit
court failed to join indispensable parties, this
issue is addressed below.

16, Although the State raised arguments based on
HRS §§ 171-30, 26-7, and 520-7 before the cir-
cuit court, it only raised HRS § 107-10 in sup-
port of its argument before the ICA by letter to
the appellate clerk dated May 7, 2015, after sub-
mission of its Opening Brief. Gold Coast filed a
motion to strike the letter, which the ICA denied
as moot following issuance of its opinion in the
case, On certiorari before this court, the State
relies on the four statutes,

448

On June 30, 2015, the ICA issued a pub-
lished opinion affirming the circuit court’s
conclusion that the State had acquired an
easement over the Seawall by common law
implied dedication and the Seawall and real
property under the Seawall by surrender.
Gold Coast Neighborhood Ass’n v. State, 136
Hawai‘i 840, 857, 861 P.3d 1248, 1260 (App.
2015), Relying on In re Banning, 73 Haw.
297, 832 P.2d 724 (1992), the ICA held that
both the owners’ offer of dedication and the
State’s acceptance of that offer could be im-
plied from the history of use and mainte-
nance of the Seawall from “well before” 1969
to 2006. Gold Coast Neighborhood Ass’n, 136
Hawai'i at 354, 361 P.8d at 1257. In support
of its conclusion, the ICA relied on the evi-
dence of the “public’s open and continuous
non-permissive use of the Seawall as a walk-
way from as early as 1956”; the ICA also
cited “the State’s recognition of the entire
Seawall as a public walkway in 1975, 1982,
1984, 1992, and 2006” and “the State’s re-
pairs to portions of the Seawall in 1982, 1984,
and 1993,” Id, at 355, 361 P.38d at 1258. The
ICA further noted that the parties “[did] not
dispute” the circuit court's finding that the
“public has used the Seawall for both shore-
line and ocean access for decades and has
done so without any apparent interference
from any private landowners along the Gold
Coast.” Id, at 354-55, 861 P.8d at 1257-58,
The ICA therefore determined that the cir-
cuit court did not err in concluding that the
State held an easement over and across the
Seawall by virtue of implied dedication. Id. at
355, 861 P.3d at 1258.

With respect to surrender, the ICA stated
that a seawall that “is used as a public thor-
oughfare” may qualify as a “public trail” or
“public highway” subject to surrender under
HRS § 264-1. Id. (quoting Levy, 50 Haw. at
499-500, 443 P.2d at 144, HRS § 264-1(e)
(2007)). The ICA observed that it was undis-
puted that the Seawall was “built by private
parties and completed by 1930” and that “no
owners of the Seawall exercised ownership
over the Seawall for at least five years prior
to litigation,” Id. As a result, the ICA con-
cluded that the cireuit court did not err in
determining that the real property under the
Seawall was surrendered to the State with
the exception of those parcels registered in

ON

land court that were not subject to the sur-
render statute. Id. at 355-56, 361 P.8d at
1258-59.

The ICA also addressed the State’s gener-
al argument that various provisions of the
Hawaii Revised Statutes operate to preclude
surrender or implied dedication of property
to the State absent the State’s formal con-
sent. Id. at 856, 861 P.8d at 1259, Quoting
from portions of HRS §§ 171-30 (1993), 26-7
(2009) (ast amended 1990), and 107-10 (Supp.
2001), the ICA concluded that these provi-
sions did not operate to require the State’s
formal consent because both doctrines of sur-
render and common law implied dedication
“are well established means for the public to
acquire State land without the State’s con-
sent via public use.” Gold Coast Neighbor-
hood Ass’n, 186 Hawai'i at 356, 361 P.3d at
1259. The ICA reasoned that the State’s
interpretation of HRS §§ 171-30, 26-7, and
107-10 “is not only inconsistent with the lan-
guage of the statutes, but if adopted, would
produce an absurd result in that it would
silently abolish the doctrines of implied dedi-
cation and surrender.” Id.

Lastly, the ICA addressed Gold Coast’s
appeal of the circuit court’s denial of attor-
neys’ fees and costs, Id, at 356-57, 361 P.3d
at 1259-60. On this issue, the ICA concluded
that the circuit court had erred in barring
attorneys’ fees on the basis of the State’s
sovereign immunity because “ ‘the doctrine of
sovereign immunity is unavailing and inappo-
site’ when the ‘case deals with a suit initiated
by the State,” Id. at 357, 861 P.8d at 1260
(alteration omitted) (quoting State ex rel.
Anzai y. City & Cty. of Honolulu, 99 Hawai'i
508, 515-16, 57 P.8d 483, 440-41 (2002)). The
ICA also determined that the circuit court
erred in denying Gold Coast costs, stating
that “Gold Coast prevailed against the State”
and citing HRS § 607-24 (1998), Id, There-
fore, the ICA affirmed the circuit court’s
Findings of Fact and Conclusions of Law and
Final Judgment, and it vacated the circuit
court’s Order Denying Fees and Costs and
remanded for reconsideration of Gold Coast’s
Motion for Attorneys’ Fees and Costs. Id.

I. STANDARDS OF REVIEW

TH “The interpretation of a statute is a
question of law reviewable de novo.” State v.

Arceo, 84 Hawai'i 1, 10, 928 P.2d 848, 852
(1996) (quoting State v. Camara, 81 Hawai'i
824, 329, 916 P.2d 1225, 1230 (1996)). “Simi-
larly, a trial court’s conclusions of law are
reviewable de novo under the right/wrong
standard.” State v. Kelekolio, 94 Hawai'i 354,
856, 14 P.8d 364, 366 (App. 2000) (citing State
y. Lopez, 78 Hawai'i 433, 440, 896 P.2d 889,
896 (19965).

HM “The trial court’s grant or denial of
attorneys’ fees and costs is reviewed under
the abuse of discretion standard.” Kamaka v.
Goodsill Anderson Quinn & Stifel, 117 Ha-
wai‘i 92, 105, 176 P.8d 91, 104 (2008) (quoting
Kahala Royal Corp. v. Goodsill Anderson
Quinn & Stifel, 118 Hawai'i 251, 266, 151 P.38d
"182, 747 (2007).

Iv. DISCUSSION

The State makes three principal argu-
ments on certiorari. First, the State argues
that HRS §§ 171-80, 26-7, and 107-10 oper-
ate to preclude common law implied dedica-
tion and surrender under HRS § 264-1(c)
without the State’s formal consent or accep-
tance. Second, the State contends that the
circuit court was required to “make the actu-
al owners of the real property parties to the
case” and that its failure to do so constituted
error. Third, the State submits that the ICA
erred in determining that Gold Coast was
entitled to attorneys’ fees based on the ICA’s
reasoning that the filing of a complaint by
the State for declaratory relief waived its
sovereign immunity in this case.

A. Indispensable Parties

I The State’s argument on the issue of
indispensable parties contends that “the ac-
tual property owners” must be joined to a
lawsuit that determines ownership of the
owners’ properties. Gold Coast responds that
it need not join the individual owners of the
properties at issue because their interests
are sufficiently represented by the various
apartment owners’ associations that are
members of Gold Coast, the named plaintiff
in this case,

Gold Coast's Second Amended Complaint
sought a declaration that the State is respon-
sible for maintaining the Seawall bordering

449

eleven identified properties that are managed
by various entities. See supra notes 1, 5.
Each of these entities is a member of plain-
tiff Gold Coast Neighborhood Association
and joined Gold Coast for the purpose of
having it represent the entity’s and owners’
interests in this litigation.

The State acknowledged before the cireuit
court that the individual owners of properties
located on the eleven parcels at issue in this
litigation could have “their rights in this mat-
ter” “protect[ed] or represent[ed]” by “their
respective condominium associations” there-
by obviating any requirement to join the
individual owners, but submitted that such
representation was only permitted by a pro-
vision of the Hawaii Revised Statutes that
was repealed in 2004 by Act 164 of the
Hawai'i State Legislature. See HRS § 514A-
93 (1998) (“actions may be brought by the
manager or board of directors, in either case
in the discretion of the board of directors on
behalf of two or more of the apartment own-
ers ... with respect to any cause of action
relating to the common elements or more
than one apartment”), repealed by 2004 Ha-
wai'ii Session Laws Act 164, § 26 at 813,
However, although HRS § 514A-98 (1998)
was repealed by Act 164 prior to commence-
ment of proceedings in this case, the act
retained and relocated within the Hawaii Re-
vised Statutes the authority of apartment
and condominium associations to represent
the interests of their owners in litigation. See
2004 Hawai'i Session Laws Act 164, § 2 at
‘761-62 (codified at HRS § 514B-104(a)(4)
(2006)). Further, although HRS § 514A-93
(1993) was repealed in 2004, language identi-
cal to the prior version of HRS § 514A-98
was reenacted at HRS § 514A-93 in 2007 and
made retroactively effective to July 1, 2006.
See HRS § 514A-93 (Supp. 2007); 2007 Ha-
wail Session Laws Act 244, § 2 at 745. Thus,
at the time Gold Coast initiated this litigation
on June 22, 2007, its members were statutori-
ly entitled to “[iJnstitute, defend, or intervene
in litigation’ on behalf of their respective
owners. HRS § 514B-104(a)(4) (2006);
also HRS § 514A-93 (Supp. 2007) (permitting
the manager or board of directors to bring
actions on behalf of owners), The circuit
court therefore did not err in concluding that

see

450

Gold Coast need not join the individual own-
ers as indispensable parties.!”

B. Common Law Implied Dedication

Next, the State contends that various dis-
parate provisions of the Hawaii Revised Stat-
utes operate to condition the implied dedica-
tion of private property to the State upon the
State’s formal consent or acceptance. Gold
Coast responds that the statutes relied upon
by the State do not require the State’s for-
mal acceptance as an additional element to
the common law doctrine of implied dedica-
tion that has long existed in the State of
Hawai‘.

Hl In 1892, Queen Liluckalani and the
Kingdom of Hawai‘i adopted the common law
of England as the basis of its jurisprudence
by legislation entitled “Act to Reorganize the
Judiciary Department.” See L, 1892, ch. 57,
§ 5; see_also Damien P. Horigan, On the
Reception of the Common Law in the Hawai-
ian Islands, III, 18 Haw. Bar. J. 87, 111-12
(1999). The present-day codification of this
legislation can be found at HRS § 1-1, which
provides in relevant part as follows:

The common law of England, as ascer-

tained by English and American decisions,

is declared to be the common law of the

State of Hawaii in all cases, except _as

otherwise expressly provided by the Con-

stitution or laws of the United States, or
by the laws of the State, or fixed by Ha-
waiian judicial precedent, or established by

Hawaiian usage... .

HRS § 1-1 (2009) (emphasis added). Thus,
the common law of England applies in the
State of Hawai'i except as otherwise express-

17, The individuals or entities named as parties
by the State's complaint that were not included
in Gold Coast's subsequent Second Amended
Complaint filed answers responding specifically
to the State’s complaint. Each of these individu-
als or entities asserted that the State was respon-
sible for maintaining the Seawall and raised as a
defense to the State’s complaint “the public’s
consistent and extensive use of the seawalls” for
“at least 50 to 100 years,”

18. Private property may also be dedicated for
public use by statute, which occurs when “the
statutory provisions” relating to dedication are
“complied with.” Maui Ranch Estates Owners
Ass'n v. Maui Cty. 6 Haw. App. 414, 421, 724
P.2d 118, 123 (1986).

ly provided by Hawai'i law, federal law, or by
Hawaiian judicial precedent or usage,

HN The common law has historically
provided for the dedication of private proper-
ty for public use. In re Banning, 73 Haw.
297, 304-05, 882 P.2d 724, 728-29 (1992).
Common law dedication of private property
is “accomplished either expressly, as by
deed, or impliedly, as by acts and conduct
which manifest an intent to give the property
for public use.” Maui Ranch Estates Owners
Ass’n v. Maui Cty., 6 Haw, App, 414, 421, 724
P.2d 118, 128 (1986) (citing City of Kechi v.
Decker, 280 Kan, 815, 634 P.2d 1099 (1981);
28 Am, Jur. 2d Dedication § 8 (1988)); see
also Banning, 78 Haw. at 804, 882 P.2d at
728-29 (“A common law dedication may be
accomplished without any statement, written
or spoken, for one who invites or merely
permits the public to use his or her land for a
long period may be held to have made an
offer of implied dedication.” (quoting R.A.
Cunningham, The Law of Property 751
(1984))). “A common law dedication does not
operate as a grant but as an equitable estop-
pel,” 28 Am. Jur, 2d Dedication § 54 (2018),
whereby “the owner is estopped to deny
permanent public access” because the owner
has “admitted the public to use the land over
a long time.” Banning, 73 Haw. at 304, 832
P.2d at 729 (quoting R.A, Cunningham, The
Law of Property 751 (1984)); see also 28 Am,
Jur. 2d Dedication § 54 (common law dedica-
tion is applied “because of lack of a grantee
capable of taking”).

HI Under the common law, formal accep-
tance is not required to effectuate an implied
dedication." Indeed, in its explicit adoption

19. See Vitauts M. Gulbis, Implied acceptance, by
public _use, of dedication of beach or shoreline
adjoining public waters, 24 A.L.R.4th 294 (1983)
(Under generally accepted common-law princi-
ples, the implied acceptance of an implied or
express offer to dedicate, can be shown by main-
tenance or improvement of the property by local
government activity or by use by members of the
unorganized public.” (footnotes omitted)); 26
C.J.8, Dedication § 2 (2011) (a common-law ded-
ication requires “the implied acceptance of the
use of property” or, alternatively, “the express
acceptance of the municipality”); Steve A.
McKeon, Public Access to Beaches, 22 Stan. L.
Rev, 564, 573 (1970) (common law implied dedi-
cation requires “[nJo formalities” and “public

of common law implied dedication in 1869,
the Supreme Court of the Kingdom of Ha-
waiti in The King v. Cornwell, 8 Haw. 154,
161 (Haw. Kingdom 1869), considered that
acceptance could be inferred from public use,
The Cornwell court established that in Ha-
wail, “[olrdinarily, there is no other mode of
showing an acceptance by the public of a
dedication than by its being made use of by
them,” but considered that if public use was
the only evidence of dedication, it must have
continued for a longer period than that re-
quired to effectuate a prescriptive easement,
Id, at 161-62.

HH Following Cornwell, our courts have
continued to recognize common law implied
dedication as a method of transferring inter-
ests in property to the State and have re-
peatedly noted that formal acceptance is not
a prerequisite. See, e.g., Maui Ranch, 6 Haw.
App. at 421, 724 P.2d at 128 (common law
dedication may be accomplished “impliedly,
as by acts and conduct which manifest an
intent to give the property for public use”);
Banning, 78 Haw. at 304-05, 882 P.2d at 728-
29 (“[T]he acceptance may also be implied by
the nature of the public use.... In other
words, the duration and type of public use
can raise both the presumption of the own-
er’s intent (or offer) to dedicate land to pub-
lic use, as well as constitute acceptance by
the public.” (citations omitted)); Wemple ex
rel. Dang y. Dahman (Wemple II), 108 Ha-
wai'i 885, 897, 88 P.8d 100, 112 (2004) (al-
though the county had not formally accepted
a statutory dedication, an additional signifi-
cant question remained regarding whether
“the public had an easement over [a] private-
ly owned road because the road had been
impliedly dedicated to the public”); City &
Cty, of Honolulu v. Boulevard Props., Inc., 55
Haw. 305, 306, 517 P.2d 779, 781 (1978) (im-
plied dedication of streets for use by the
public may occur when land is subdivided
into lots and streets, a plat showing such
subdivision is recorded, and sales of the lots
are made); see_also David M. Forman &
Susan K. Serrano, Traditional and Custom-
ary Access and Gathering Rights, in Native

451

serving that “[alecess along Hawaiian trails
may be protected where there has been an
implied dedication of a public right-of-way
across private land” and analyzing Cornwell,
8 Haw. 154). Though continuous use of the
property by members of the public is com-
monly relied upon in determining whether a
dedication occurred, conduct evincing an im-
plied acceptance may also include actions
attributable to the government, such as
‘maintenance of sidewalks, beach patrols, or
the installation of utility connections by local
government bodies.” See Gulbis, supra note
19 (stating that such conduct “has been held
to support an implied acceptance of an ex-
press offer to dedicate”).

HM Despite its deeply entrenched and
long historical presence in our jurisprudence,
the State contends that various provisions of
the Hawaii Revised Statutes operate to pre-
clude the implied dedication of private prop-
erty to the State without the State’s explicit
acceptance. The State therefore suggests
that the doctrine of common law implied
dedication has been implicitly abolished in
Hawai'i, insofar as it contends that an im-
plied acceptance of an offer of dedication is
insufficient to deem private property dedicat-
ed to the public. See Banning, 73 Haw, at
804, 882 P.2d at 728-29. However, statutes
which abrogate the common law must do so
expressly, not impliedly, and such statutes
“must be strictly construed.” Burns Int'l See,
Servs., Inc. v. Dep’t of Transp., 66 Haw. 607,
611, 671 P.2d 446, 449 (1983), Additionally,
review of the statutory provisions cited by
the State and the relevant caselaw refute the
State’s contention that Hawaii’s common law
doctrine of implied dedication may not trans-
fer interests in private property to the State
absent the State’s formal consent.

i, Abrogation of common law disfavored

HRS § 1-1 provides that the only excep-
tion to the general applicability of common
Jaw principles in this jurisdiction occurs when

state or federal law “expressly provide[s]”
otherwise. See HRS § 1-1 (2009) (emphasis

Haw: Law-A Treatise 779, 818 (Melody
Kapilialoha MacKenzie et al. eds., 2015) (ob-

use itself may be taken as evidence of accep-

added). Our courts have repeatedly recog-
nized the importance of the common law and

tance”).

452

have demonstrated an unwillingness to impli-
edly reject its principles; they have also de-
termined that subsequent statutory enact-
ments will not be construed as abrogating
the common law “unless that result is imper-
atively required.” Minneapolis Fire & Marine
Ins. v. Matson Nav. Co., 44 Haw. 59, 67-68,
352 P.2d 335, 340 (1960) (emphasis added)
(quoting Gabriel v. Margah, 37 Haw. 571, 580
(Haw. Terr. 1947)); E, Star, Inc, SA. v.
Union Bldg. Materials Corp., 6 Haw. App.
125, 141, 712 P.2d 1148, 1159 (1985) (same).
This court has also held that “statutes which
are in derogation of common law must be
strictly construed,” and we have refused to
reject common law rules absent a finding of
“express [legislative] intent.” Burns Int'l Sec,
Servs., Inc, v. Dep’t of Transp., 66 Haw. 607,
611, 671 P.2d 446, 449 (1983) (declining to
abrogate common law principle of non-trans-
ferability of licenses because, in part, there
was no “express intent that the legislature
had forsaken the common law rule”).

This strong reluctance to abolish common
law rights and remedies absent a finding of
express legislative intent is not unique to
Hawai'i and has, in fact, been expressed by
the United States Supreme Court and the
courts of numerous state and federal jurisdic-
tions. See, e.g., United States v. Texas, 507
U.S. 529, 584, 118 S.Ct. 1681, 128 L.Ed.2d
245 (1998) (“In order to abrogate a common-
law principle, the statute must ‘speak direct-
ly’ to the question addressed by the common
law,” in part, because the legislature has “not
[written] upon a clean slate.” (quoting Mobil
Oil Corp. v. Higginbotham, 436 U.S. 618, 625,
98 S.Ct. 2010, 56 L.Ed.2d 581 (1978))); Is-
brandtsen Co. v. Johnson, 348 U.S. 779, 788,
72, 8.Ct. 1011, 96 L.Ed, 1294 (1952) (“Statutes
which invade the common law ... are to be
read with a presumption favoring the reten-
tion of long-established and familiar princi-
ples, except when a statutory purpose to the
contrary is evident.”); Globe & Rutgers Fire
Ins. v. Draper, 66 F.2d 985, 991 (9th Cir.
1988) (“The courts are reluctant to construe
statutes in derogation of the common law.”);
Gallegos v. Lyng, 891 F.2d 788, 798 (10th Cir.
1989) (“implied repeals of the common law
are disfavored and should be found only
where such a statutory purpose is evident”);
Pae, Ins. v. Champion Steel, LLC, 323 Conn.

254, 264, 146 A.8d 975, 982 (Conn. 2016) (“Tt
is fundamental that if the legislature wishes
to abrogate the common law, it must do so
expressly.”); Cal. Ass’n of Health F: Ss Ve
Dep’t_of Health Servs., 16 Cal4th 284, 65
Cal.Rptr.2d 872, 940 P.2d 323, 331 (1997)
(As a general rule, ‘unless expressly provid-
ed, statutes should not be interpreted to alter
the common law, and should be construed to
avoid conflict with common law rules.’” (al-
teration omitted) (quoting Goodman v. Zim-
merman, 25 Cal.App.4th 1667, 82 Cal-Rptr.2d
419, 424 (1994))),

ii, Hawaii Revised Statutes do not reflect
express legislative intent to abrogate
the common law

The Hawaii Revised Statutes, and in par-
ticular, HRS §§ 264-1(e)(1), 171-80, 26-7, 107-
10, and 520-7, do not “imperatively require”
abrogation of common law implied dedication,
nor do they evince an express legislative
intent to do so. Minneapolis Fire & Marine
Ins. v. Matson Nav. Co., 44 Haw. 59, 67-68,
352 P.2d 885, 340 (1960); Burns Int'l Sec.

Servs., Inc. v. Dep’t of Transp., 66 Haw. 607,
611, 671 P.2d 446, 449 (1983).

a, HRS § 264-1(¢)(1)

HM Although not expressly relied upon
by the State, the dissent contends that HRS
§ 264-1(c)(1) abrogates common law dedica-
tion with respect to ways and trails. Dissent,
at 474-75, 408 P.8d at 251-52. We therefore
begin our analysis by considering the analo-
gous concepts of statutory dedication as set
forth in the Hawaii Revised Statutes and
common law implied dedication and the treat-
ment of the two doctrines by courts of this
jurisdiction.

HRS § 264-1(¢)(1) sets forth the require-
ments to effectuate a statutory dedication of
certain private lands for public use in the
State of Hawai‘, At the commencement of
this litigation, HRS § 264-1(¢)(1) provided in
relevant part:

(©) All roads, alleys, streets, ways, lanes,
trails, bikeways, and bridges in the State,
opened, laid out, or built by private parties
and dedicated or surrendered to the public

use, are declared to be public highways or
public trails as follows:
(1) Dedication of public highways or
trails shall be by deed of conveyance
naming the State as grantee in the case
of a state highway or trail and naming
the county as grantee in the case of a
county highway or trail. The deed of
conveyance shall be delivered to and ac-
cepted by the director of transportation
in the case of a state highway or the
board of land and natural resources in
the case of a state trail. In the case of a
county highway or county trail, the deed
shall be delivered to and accepted by the
legislative body of a county.
HRS § 264-1(0)(1) (2007). HRS § 264-1(0)(1)
constitutes a method of executing a dedica-
tion by statute (“statutory dedication”) be-
cause it delineates procedures to effect “a
dedication of land to public use ... pursuant
to statute.” 23 Am. Jur. 2d Dedication § 3
(2018); see also Maui Ranch Estates Owners
Ass’n y. Maui Cty., 6 Haw. App. 414, 421, 724
P.2d 118, 123 (1986) (“Dedication of land for
public use may be achieved either by statute
or by common law. Statutory dedication oc-
curs when the statutory provisions are com-
plied with.”),

HM Although the Hawaii Revised Stat-
utes provide for a method of statutory dedi-
cation, HRS § 264-1(c)(1) does not provide
an exclusive method of dedicating private
property for public use in the State of Ha-
wai‘, Rather, HRS § 264-1(¢)(1) exists along-
side common law implied dedication, which
our courts have long recognized. See, eg.,
The King v. Cornwell, 3 Haw. 154, 155, 161-
62 (Haw. Kingdom 1869); Maui Ranch, 6
Haw. App. at 421, 724 P.2d at 123; In re
Banning, 73 Haw. 297, 304-05, 882 P.2d 724,
728-29 (1992); Wemple II, 103 Hawaii 885,
397, 88 P.3d 100, 112 (2004); Wemple ex rel.
Dang v. Dahman (Wemple I), 102 Hawaii 27,
72 P.8d 499 (App. 2002), rev’d, 108 Hawaii
885, 83 P.8d 100 (2004). Indeed, decisions of
this jurisdiction analyzing HRS § 264-1(¢)
have also simultaneously reaffirmed the via-
bility of common law implied dedication as a
way of transferring property interests to the
State in addition to the method of statutory

20, See Wemple I, 102 Hawai'i 27, 72 P.3d 499,

453

dedication codified in the Hawaii Revised
Statutes. See Wemple II, 108 Hawaii at 392-
98, 397, 83 P.8d at 107-08, 112 (concluding
that although the road was not dedicated to
the county by virtue of HRS § 264-1 (Supp.
1990), it remained a “significant” question
whether the public held an easement over
the road by operation of common law implied.
dedication); Banning, 73 Haw. at 304-05, 313,
832 P.2d at 728-29, 782 (detailing doctrine
and requirements of common law dedication
and then separately analyzing HRS § 264-1
(1985)); Maui Ranch, 6 Haw. App. at 421-22,
724 P.2d at 123-24 (same). The coexistence of
common law dedication and statutory dedica-
tion in our state exemplifies the principle
that “[e]ven in the same jurisdiction, a dedi-
cation of land to public use may be made
either according to the common law or pursu-
ant to statute.” 23 Am. Jur. 2d Dedication
§ 3 (2018),

For example, in Wemple II, this court was
called upon to review a grant of summary
judgment determining that a private road-
way had been dedicated to a county for pub-
lic use. 108 Hawai'i at 392-98, 88 P.3d at 107-
08. The court noted that the ICA in its
published opinion in the case?” had already
“thoroughly analyzed the complex history of
the public road system in Hawai'i” and had
correctly concluded that HRS § 264-1 “pre-
vents a private road from becoming a ‘county
highway’ ... without express acceptance of
the private road by the County Council,”
which had not occurred. Id.

Significantly, the Wemple II court in its
unanimous opinion explicitly recognized the
continued viability of common law implied
dedication in Hawai‘. In addition to deter-
mining that the private roadway had not
been dedicated to the county by virtue of
HRS § 264-1, this court also analyzed the
ICA’s “conclu[sion] as a matter of law” that,
“the public had an easement over the pri-
vately owned road because [the] road had
been impliedly dedicated to the public.” Id, at
397, 83 P,3d at 112. We concluded that the
ICA had erred in resolving the issue of im-
plied dedication as a matter of law. Id. As
stated by the Wemple II court, “Whether an

rev'd, 103 Hawai'i 385, 83 P.3d 100.

454

implied easement exists depends on the par-
ties’ intent and is therefore a question of
fact.” Id, Based on the record, we concluded
that there remained questions of fact regard-
ing the parties’ intents, thus making sum-
mary judgment inappropriate. Id, As a re-
sult, this court reversed the ICA’s decision,
vacated the trial court's grant of summary
judgment, and remanded to the trial court
for further proceedings. Id, at 898, 83 P.3d at
1131
Wemple I and Wemple II reflect our his-
torical application of common law implied
dedication as an alternative means of trans-
ferring interests to the State separate and
apart from HRS § 264-1(¢)(1), Indeed, Wem-
ple II manifested its approval of the ICA’s
following summary in Wemple I on the via-
bility of common law implied dedication and
its interplay with statutory dedication:
To summarize, HRS § 264-1 requires that
before a county can be held responsible
and liable for the maintenance or repair of
a private road that has been dedicated,
surrendered, or abandoned to public use,
there must have been “unequivocal accep-
tance” of the private road by the legislative
body of the county, Maui Ranch Estates
Owners Ass'n v. County of Maui, 6 Haw.
App. at 421, 724 P.2d at 123, That is, all
the requirements for statutory dedication,
abandonment, or surrender must be com-

pleted. However, a privately owned road
that_has not been statutorily dedicated,

21. The dissent characterizes Wemple I as a “re-
fus[al] to apply the theory of implied dedication
to transfer a privately owned road to the county
as a county highway.” Dissent at 476, 403 P.3d
at 253. However, as discussed, this court in
Wemple II specifically acknowledged the viabili-
ty of common law implied dedication; indeed, we
remanded to the trial court based in part on our
conclusion that ‘“{wJhether an implied easement
exists” was a question to be determined based on
the “parties’ intent[s].” 103 Hawai'i at 397, 83
P.3d at 112,

22, This court in Wemple II described with ap-
proval the ICA’s “thorough[] analy[sis] [of] the
complex history of the public road system in
Hawai'i,” which concluded with the text quoted
above, 103 Hawai'i at 392, 83 P.3d at 107; see
also Wemple I, 102 Hawai'i at 47-53, 72 P.3d at
519-25. Thus, to the extent that it was approved
of by this court in Wemple I, the ICA's summary
from Wemple I may inform our understanding of
the doctrine of implied dedication.

surrendered, or abandoned _to_ public use

by technical compliance with HRS § 264~1

may still _be impliedly dedicated, surren-

dered, or abandoned to public use for _a

general roadway easement.

Wemple J, 102 Hawai'i at 58, 72 P.8d at 525
(emphasis added).

Therefore, for the reasons stated, and be-
eause this court has firmly recognized that
the two doctrines exist in harmony, see
Wemple II, 103 Hawaiti at 897, 83 P.3d at
112,28 HRS § 264-1(c)(1) evinces no intent to
abrogate the concept of common law dedica-
tion, much less does it “imperatively re-
quire[ ]” such result. Burns Int’l Sec. Servs.,
Ine, 66 Haw, at 611, 671 P.2d at 449; Minne-
apolis Fire & Marine Ins,, 44 Haw, at 67-68,
852 P.2d at 840,

b, HRS §§ 171-30, 26-7, 107-10

HHI In support of its contention that the
common law doctrine of implied dedication
may not transfer interests in private proper-
ty to the public without the State’s explicit
acceptance, the State primarily relies on
HRS §§ 171-80 (1998), 26-7 (2009) (ast.
amended 1990), and 107-10 (Supp. 2001).
However, a clear intent to abrogate common
law implied dedication in this jurisdiction is
absent in these provisions,

HRS § 171-80 grants authority to the
Board of Land and Natural Resources
(BLNR) to acquire interests in “all real prop-

23, Although predating both this court's decisions
in Banning and Wemple I, the State and the
dissent suggest that the ICA’s 1986 decision in
Maui Ranch, 6 Haw. App. 414, 724 P.2d 118,
indicates that private land may only be dedicated
to the State by statutory dedication as codified at
HRS § 264-1(c)(1). In Maui Ranch, however, the
ICA clearly stated that “[d]edication of land for
public use may be achieved either by statute or
by common law.” 6 Haw. App at 421, 724 P.2d
at 123 (emphasis added); see also id. (dedication
may occur “[iJn the absence of statute” (quoting
23 Am. Jur, 2d Dedication § 45)). The ICA also
acknowledged that common law dedication may
be accomplished “impliedly, as by acts and con-
duct which manifest an intent to give the proper-
ty for public use,” Id. (citations omitted), The
ICA thus clearly manifested its approval of the
common law doctrine of implied dedication, see
id, which was subsequently reaffirmed by this
court in Banning, 73 Haw, 297, 832 P.2d 724,
and Wemple II, 103 Hawai'i 385, 83 P.3d 100,

erty” and provides in relevant part as fol-
lows:
(a) The board of land and natural re-
sources shall have the exclusive responsi-
bility, except as provided herein, of acquir-
ing, including by way of dedications:
(1) All veal property or any interest
therein and the improvements thereon,
if any, required by the State for public
purposes.,..
HRS § 171-80(a)(1) (1998). BLNR thus has
the exclusive responsibility of “acquiring”
real property that the State needs for public
purposes, including by dedication, HRS
§ 171-80(a)(1). Although BLNR is assigned
responsibility to affirmatively acquire proper-
ty by way of purchase or statutory dedica-
tion, the statute does not address obtaining
the State’s formal approval or acceptance of
dedicated property in all cases, particularly
when it is merely a passive recipient. In-
deed, this statute has been in effect for more
than 50 years and no case in this jurisdiction
has considered it relevant within the context
of common law implied dedication, much less
has it been interpreted to abrogate or modify
the doctrine of implied dedication, See, e.g.,
Banning, 73 Haw, at 304-09, 882 P.2d at 728-
31; Wemple II, 108 Hawai'i at 397, 83 P.8d at
112; Maui Ranch, 6 Haw. App. at 420-22, 724
P.2d at 123-24, In light of these consider-
ations, HRS § 171-80 neither manifests an
express intent to abrogate common law im-
plied dedication nor imperatively requires
such result. See Burns Int'l Sec, Servs., Inc.
66 Haw, at 611, 671 P.2d at 449; Minneapolis
Fire & Marine Ins,, 44 Haw. at 67-68, 352
P.2d at 340,

HM HRS §§ 26-7 and 107-10 likewise do
not evince a clear intent to abrogate or modi-
fy common law implied dedication. HRS
§ 26-7 establishes the composition and au-
thority of the Department of the Attorney
General. The provision delineates the various
powers and duties of that office and provides
that the Attorney General “shall ... approve
as to legality and form all documents relating

24, Additionally, HRS § 171-30(a)(1) may simply
function to identify the state entity administra-
tively responsible for acting and initiating a
transaction when the State requires the acquisi-
tion of real property for public use. See Island-
Gentry Joint Venture v. State, 57 Haw. 259, 263-

455

to the acquisition of any land or interest in
lands by the State.” HRS § 26-7 (2009) (ast
amended 1990) (emphasis added). HRS
§ 107-10 similarly requires that no real prop-
erty interest “shall be acquired” by the State
“by agreement, gift, devise, eminent domain,
or otherwise ... without the prior approval
of the attorney general as to form, excep-
tions, and reservations.” HRS § 107-10
(Supp. 2001) (emphasis added). These provi-
sions do not relate or speak to conveyance of
property interests by way of implied dedica-
tion. Rather, HRS §§ 26-7 and 107-10 merely
give the Attorney General final authority to
review and approve the documents relating
to acquisitions of land interests and to in-
spect such acquisitions as to form, excep-
tions, and reservations, See HRS §§ 26-7,
107-10; see also Island-Gentry Joint Venture
vy. State, 57 Haw, 259, 265, 554 P.2d 761, 766
(1976) (noting that under HRS § 26-7, “the
Attorney General has the further exclusive
authority to approve as to the legality and
form of all documents relating to the acquisi-
tion of any land or interest in land by the
State”). These provisions express no intent to
abrogate common law implied dedication, nor
have they ever been mentioned by our courts
as having any relevance to the doctrine. See
Burns Int'l Sec, Servs., Inc. 66 Haw. at 611,
671 P.2d at 449,

ec, HRS chapter 520

HH The State also argued before the
circuit court that HRS chapter 520 operated
to preclude the implied dedication of the
Seawall for public use in this case. However,
HRS chapter 520, titled “Landowners’ Liabil-
ity,” does not demonstrate an express intent
to abrogate implied dedication as a method of
transferring interests in private property to
the State, Rather, “[tlhe purpose of this
chapter is to encourage owners of land to
make land and water areas available to the
public for recreational purposes by limiting
their liability toward persons entering there-
on for such purposes.” HRS § 520-1 (2006).

64, 554 P.2d 761, 764-65 (1976) (authority of
BLNR to “acquire” real property under HRS
§ 171-30 also signifies that BLNR is the entity
responsible for “initially enterfing] into a con-
tract for the acquisition of land” when required
for public use).

456

To accomplish this purpose, HRS chapter
520 shields from liability private property
owners who allow the public to use their land
for recreational purposes. See HRS § 520-4
(2006).

Additionally, to further protect private
property owners, HRS § 520-7 provides that
“{nJo person shall gain any rights to any land
by prescription or otherwise, as a result of
any usage thereof for recreational purposes
as provided in this chapter.” HRS § 520-7
(2006) (emphasis added). HRS chapter 520
thus also concerns itself with the property
rights of private landowners as they relate to
the recreational user, seeking to balance pub-
lie recreational use and private property
rights in order to incentivize permissive pub-
lic use of private land. HRS chapter 520 does
not, however, speak to the rights or responsi-
bilities of the State in relation to the private
property owner,

Since its enactment in 1969, HRS chapter
520 has never been interpreted to suggest an
abrogation of common law implied dedication.
To the contrary, this court has expressly
considered the effect of HRS chapter 520 on
implied dedication and has found the two to
be reconcilable. See Banning, 73 Haw. at 305-
08, 882 P.2d at 729-30. In Banning, this court
considered whether continuous public use of
private property raises a conclusive pre-
sumption that the landowner intended to of-
fer the property for dedication. Id. The Ban-
ning court noted that the general intent of
HRS chapter 520 to encourage landowners to
permit public use of private lands could be
undermined by such a conclusive presump-
tion, Id, at 807-08, 882 P.2d at 730, In keep-
ing with this intent, the court determined
that continuous public use raises only a re-
buttable presumption of implied dedication,
thus concluding that the common law doc-
trine of implied dedication and HRS chapter
520 exist in harmony, Id, at 308, 832 P.2d at
730. Therefore, HRS chapter 520 has already
been determined by this court to not evince
an express intent to abolish common law
implied dedication or to imperatively require
that result. See Burns Int'l Sec. Servs., Inc.
25. Significantly, the proceedings in this case

commenced only three years after this court af-
firmed the common law principle of implied

66 Haw. at 611, 671 P.2d at 449; Minneapolis
Fire & Marine Ins., 44 Haw. at 67-68, 852
P.2d at 340.

d. Implicit abolishment of common law
implied dedication is improper

TN The State contends that the forego-
ing statutes require both the Attorney Gen-
eral and the BLNR to formally consent to all
transfers of real property interests to the
State. The State thus asserts that implied
acceptance is insufficient to effectuate an im-
plied dedication of property to the State.
This conclusion, which abrogates the common
law doctrine of implied dedication as a means
of transferring interests in private property
to the public, is not supported by the authori-
ty cited by the State. First, the common law
doctrine of implied dedication has been re-
peatedly recognized in this jurisdiction for
over 150 years, and this court itself has
reaffirmed its viability as recently as 2004.
See Cornwell, 3 Haw. at 161-62 (recognizing
common law implied dedication and observ-
ing that “[oJrdinarily, there is no other mode
of showing an acceptance by the public of a
dedication than by its being made use of by
them”); Maui Ranch, 6 Haw. App. at 421, 724
P.2d at 123 (common law dedication may be
accomplished “impliedly, as by acts and con-
duct which manifest an intent to give the
property for public use”); Banning, 73 Haw.
at 304-05, 882 P.2d at 728-29 (“[T]he accep-
tance may also be implied by the nature of
the public use.... In other words, the dura-
tion and type of public use can raise both the
presumption of the owner’s intent (or offer)
to dedicate land to public use, as well as
constitute acceptance by the public.” (cita-
tions omitted)); Wemple II, 103 Hawaii at
397, 83 P.8d at 112 (although the county had
not formally accepted a statutory dedication,
an additional significant question remained
regarding whether “the public had an ease-
ment over [a] privately owned road because
the road had been impliedly dedicated to the
public”); City & Cty. of Honolulu v. Boule-
vard Props., Inc., 55 Haw. 305, 306, 517 P.2d
779, 781 (1978) (implied dedication of streets
for use by the public may oceur when land is

dedication in Wemple II, 103 Hawai'i at 397, 83
P.3d at 112,

subdivided into lots and streets, a plat show-
ing such subdivision is recorded, and sales of
the lots are made).?* Abrogation of such a
deeply-rooted principle of law is contradicto-
ry to our jurisdiction’s requirement that the
common law governs unless “otherwise ex-
pressly provided.” 2’ HRS § 1-1 (2009) (em-
phasis added); Minneapolis Fire & Marine
Ins., 44 Haw. at 67-68, 352 P.2d at 840 (sub-
sequent statutory enactments will not be con-
strued as abrogating the common law “unless
that result is imperatively required”). In-
deed, the fact that HRS § 1-1 requires
adherence to the common law unless “other-
wise expressly provided” suggests that impli-
edly abolishing the common law is itself in-
consistent with HRS § 1-1.

Further, that the State is required to rely
on a combination of disparate provisions of
the Hawaii Revised Statutes exposes an im-
portant point: none of the provisions relied
upon provide for the abrogation of Hawaii’s
common law doctrine of implied dedication or
evince express legislative intent to do so.
Even combined, the statutes cited by the
State do not support an implicit abolishment
of common law implied dedication. Decisions
of this court that have considered two of the
provisions relevant to this case repudiate any
argument that they operate to impliedly ab-
rogate the doctrine. See Wemple II, 108 Ha-
wai‘i at 897, 88 P.8d at 112 (considering as a

26. The dissent agrees that Cornwell, 3 Haw. 154,
“contemplate[s] implied dedication of Kingdom
highways,” but asserts that this case was super-
seded by The Highways Act in 1892. Dissent at
475 n.6, 403 P.3d at 252 n.6, However, our
courts have repeatedly—over the course of the
past century and as recently as 2004—acknowl-
edged the vitality of common law implied dedica-
tion as a method of transferring property inter-
ests to the State. See supra.

The dissent, however, characterizes this body
of caselaw as “sporadic and disparate,” relating
only “peripherally ... to the issue at hand,”
dissent at 474, 403 P.3d at 251, which should be
disregarded because despite repeatedly affirming
the doctrine, our courts “have not applied im-
plied dedication to public highways,” dissent at
475, 403 P.3d at 252, As an initial matter, the
dissent describes as one of the “question|s]
raised by this case” “whether private property
rights may be dedicated ... to the State without
the State’s formal consent.” Dissent at 469, 403
P.3d at 246. Because this body of caselaw speaks
directly to whether private property can be impli-

457

“significant” question whether an easement.
was created over a roadway by virtue of
implied dedication even after finding a lack of
compliance with HRS § 264-1 (Supp. 1990);
Banning, 73 Haw. at 807-08, 832 P.2d at 730
(concluding that in light of legislative intent
behind HRS chapter 520, public use consti-
tuted a rebuttable presumption of implied
dedication), The remaining provisions relied
on by the State have been codified in the
Hawaii Revised Statutes for decades, and no
case has ever cited to them as relevant to or
inconsistent with the doctrine.

Permitting the implied repeal of a common
Jaw doctrine that has been recognized by this
court as recently as 2004 °8 would permit the
implied abrogation of the common law in
other areas of our jurisprudence, in direct
contradiction to the mandate of HRS § 1-1
that the common law governs unless “other-
wise expressly provided.” HRS § 1-1. As
stated by this court, “statutes which are in
derogation of common law must be strictly
construed.” Burns Int’l See. Servs., Inc. 66
Haw, at 611, 671 P.2d at 449 (emphasis add-
ed); see also Akai v. Lewis, 37 Haw. 374, 378
(Haw. Terr. 1946) (“It is also well settled that
under the rule of strict construction it is not
to be presumed that the lawmakers intended
to abrogate or modify a rule any further than
that which is expressly declared or clearly

indicated.”); Pac. Ins. vy. Champion Steel,

edly dedicated to the State in the absence of its
formal or express acceptance, it does, in fact,
relate precisely “to the issue at hand.” Addition-
ally, the viability of common law implied dedica-
tion is not dependent on whether the facts in
these cases may or may not have established an
implied dedication; rather, our courts have re-
peatedly concluded that under the appropriate
circumstances, private property may be impliedly
dedicated to the State absent its formal accep-
tance. See Cornwell, 3 Haw. at 161-62; M:

Ranch, 6 Haw, App. at 421, 724 P.2d at 12:

Banning, 73 Haw. at 304-05, 832 P.2d at 728-29;
Wemple IU, 103 Hawai'i at 397, 83 P.3d at 112.

27. The ICA similarly concluded that the State's
argument, if adopted, “would produce an absurd
result in that it would silently abolish the doc-
trines of implied dedication and surrender.”
Gold Coast Neighborhood Ass'n v. State, 136
Hawaii 340, 356, 361 P.3d 1243, 1259 (App.
2015).

28. See Wemple I, 103 Hawai'i at 397, 83 P.3d
at 112.

458

LLC, 828 Conn. 254, 264, 146 A3d 975
(Conn, 2016) (“It is fundamental that if the
legislature wishes to abrogate the common
law, it must do so expressly.”).

Additionally, in Banning, this court stated
that “public policy ‘favors extending to public
use and ownership as much of Hawaii’s
shoreline as is reasonably possible’” Ban-
ning, 73 Haw. at 309-10, 882 P.2d at 731
(quoting Cty, of Haw. v, Sotomura, 55 Haw.
176, 182, 517 P.2d 67, 61-62 (1978)). The
Banning court specified that this public poli-
cy interest “must be balanced against the
littoral landowner’s right to the enjoyment of
his land.” Id. at 310, 8382 P.2d at 7381, As
concluded by the circuit court, “the Seawall
is critical to public aecess to the shoreline
along the Gold Coast,” It is further noted
that in this case, Gold Coast’s littoral land-
owners acknowledge the State’s easement in-
terest over and across the Seawall.

Impliedly abrogating the doctrine of im-
plied dedication would also in cases such as
this conflict with our court's strong historical
commitment to preserving public access to
the ocean by vesting rights in waterways and
beaches in the State when reasonably possi-
ble. See, e.g. In re Ashford, 50 Haw. 314,
452, 440 P.2d 76 (1968) (holding that the
boundary of the State’s ownership of public
beaches extended to upper reaches of wash
of waves, rather than the mean high tide
line); Sotomura, 55 Haw, at 181-82, 517 P.2d
at 61-62 (describing Ashford as a judicial
recognition that the “long-standing public use
of Hawaii's beaches ... has ripened into a
customary right” and noting that public poli-
ey “favors extending to public use and owner-
ship as much of Hawaii’s shoreline as is
reasonably possible”); State v. Zimring, 58
Haw. 106, 121, 566 P.2d 725, 785 (1977) (new
ocean shoreline formed by volcanic eruption
belonged to the public rather than private
property owners, because “sound public poli-
ey demand{s] that such land inure to the
benefit of all the people of Hawaii”); Dia-

be contrary to public policy of extending
public ownership and use of beaches).

Thus, neither the Hawaii Revised Statutes
nor Hawai'i caselaw expressly or imperative-
ly requires the implied abolishment of our
deeply-rooted common law doctrine of im-
plied dedication.

The State has an easement over and
across the Seawall by virtue of im-
plied dedication

HM The cireuit court in this case con-
cluded that the State acquired “an easement
over and across the Seawall by implied dedi-
cation.” The cireuit court based this conclu-
sion on two determinations. First, the court
found that there was “uncontroverted direct
evidence of public use of the Seawall as a
walkway from at least 1952 to when [the] suit
was filed.” Second, the evidence demonstrat-
ed that the State asserted dominion and con-
trol over the Seawall through its statements
that the “Seawall is a public right of way”
and its actions in repairing and rehabilitating
the Seawall. The ICA, upon reviewing the
record, likewise determined that an implied
dedication of the Seawall had occurred: “(1)
the owners of the Seawall made an offer of
dedication as early as 1956, and (2) the State
accepted the owners’ offer through the pub-
lie’s use of the Seawall since at least 1956,
the State’s recognition of the Seawall as a
publie walkway since 1960, and the State’s
repairs to the Seawall since 1982.” Gold
Coast Neighborhood Ass'n v. State, 186 Ha-
wait 840, 855, 861 P.8d 1248, 1258 (App.
2015).

HE An implied dedication requires
“an offer and acceptance of dedication.” In re
Banning, 78 Haw, 297, 804, 882 P.2d 724, 729
(1992). “When there is no express offer, the
offer may be implied under the circum-
stances and the acceptance may also be im-
plied by the nature of the public use.” Id. at
305, 882 P.2d at 729; see also Maui Ranch
Estates Owners Ass’n v. Maui Cty., 6 Haw.

mond y. State, 112 Hawai'i 161, 175-76, 145
P.8d 704, 718-19 (2006) (artificially planted
vegetation could not be used to determine
shoreline because it would encourage private
landowners to plant vegetation to extend
their property onto the beach and would thus

App. 414, 421, 724 P.2d 118, 128 (1986) (com-
mon law implied dedication occurs “as by
acts and conduct which manifest an intent to
give the property for public use”); Wemple
II, 108 Hawai'i 385, 397, 88 P.38d 100, 112
(2004) (whether implied dedication occurred

is a question of the parties’ intent). For
public use to effectuate an implied dedication,
it must continue for a period longer than the
number of years required to result in a pres-
criptive easement.” Banning, 78 Haw. at 308,
882 P.2d at 780 (citing The King v. Cornwell,
8 Haw. 154, 155, 161-62 (Haw. Kingdom
1869).

TH Generally, the effect of a common
law implied dedication is the creation of an
easement over the relevant property in favor
of the State. See Wemple II, 103 Hawai'i at
897, 88 P.3d at 112 (noting that the result of
an implied dedication of a privately owned
road would be the creation of an easement
over the road); see also 26 C.J.S. Dedication
§ 2 (2011) (“The right conferred by common-
law dedication is only an easement... .”); 23
Am. Jur. 2d Dedication § 8 (2018) (“[A] right
conferred by common law dedication is usual-
ly a mere easement while in most statutory
dedications, the fee of the property is in the
publie authority to which the dedication was
made.”),

In this case, the circumstances reflect an
intent to effectuate a common law implied
dedication resulting in an easement in favor
of the public over and across the Seawall. See
Wemple II, 108 Hawai'i at 897, 88 P.8d at
112. Specifically, both the private owners’
offer and the State’s acceptance of the dedi-
eation are clearly implied from the facts sur-
rounding the public’s use of the Seawall and
the State’s own statements and its repeated
repairs and maintenance of the Seawall.

The parties stipulated to extensive evi-
dence regarding the State’s repairs to the
Seawall in at least 1982, 1984, and 1998; the
parties also stipulated that local and state
appropriations were made by the relevant
legislative bodies in contemplation of further
repairs in at least 1989, 1992, and 2006. The
parties further agreed to the entry into evi-

29, Prior to 1973, the relevant prescriptive period
was ten years. See HRS § 657-31 (1968) (setting
prescriptive period at ten years). In 1973, the
Hawai'i State Legislature changed the prescrip-
tive period to twenty years, See 1973 Haw. Sess,
Laws Act 26, § 4 at 32; HRS § 657-31 (1993)
(setting prescriptive period at twenty years).

30, The State does not dispute the circuit court's
findings of fact or other relevant underlying facts

459

dence of documents in which representatives
of the State—including the State’s Deputy
Attorney General—asserted that “the State
has the responsibility to maintain the public
right of way over the Seawall,” the Seawall
has been used by “residents and beachgoers
to traverse along the shores of Waikiki
Beach” since at least 1980, and “the State
has a right-of-way over all the seawalls and
walkways.” Testimony at trial likewise dem-
onstrated that members of the public have
continuously and freely used the Seawall for
recreational purposes since at least 1952.
Both the ICA and the circuit court deter-
mined, and the parties do not dispute, that
the “public has used the Seawall for both
shoreline and ocean access for decades and
has done so without any apparent interfer-
ence from any private landowners along the
Gold Coast.” Gold_Coast__Neighborhood
Ass'n, 186 Hawai'i at 354-55, 861 P.8d at
1257-58,

These facts are more than sufficient to
raise a rebuttable presumption of implied
dedication. See Banning, 78 Haw. at 808, 882
P.2d at 730 (continuous adverse public use
unopposed and acquiesced in for a period
longer than the prescriptive period raises a
rebuttable presumption of implied dedication
(citing Cornwell, 8 Haw. 154)). No evidence
‘was presented to rebut this presumption, and
in fact, the State conceded in its trial memo-
randum that “[aldmittedly members of the
public routinely” traverse the Seawall and
“ase the path.” Further, the State itself stip-
ulated to the facts of its decades’ worth of
repairs and maintenance of the Seawall. In
light of the undisputed evidence in this case,
neither the ICA nor the circuit court erred in
concluding that the State obtained “an ease-
ment over and across the Seawall by implied

dedication.” *! Gold __Coast__Neighborhood
Ass’n, 186 Hawai'i at 355, 361 P.8d at 1258,

of this case in its application for writ of certiorari
to this court.

31. Despite the fact that the public undoubtedly
benefits from the preservation of access to Ha-
waii’s shoreline, see Banning, 73 Haw. at 309-
10, 832 P.2d at 731, the dissent seeks to charac-
terize our analysis in this case as leading to an
“unfair result” in part because the Gold Coast
property owners allegedly “reap all of the re-
wards” that the Seawall provides. Dissent at 482

460

The State thus has “the right and the
duty” to maintain the surface of the Seawall
over and across which it has an easement.
See Levy v. Kimball, 50 Haw. 497, 498, 443
P.2d 142, 144 (1968) (“It is a well established
rule that an owner of [an] easement has the
right and the duty to keep it in repair.”); see
also Wemple II, 103 Hawai'i at 397, 88 P.8d
at 112 (observing that “[w]hether an ease-
ment exists” by virtue of common law im-
plied dedication “is significant because, as
this court has held, ‘an owner of an easement
has the right and the duty to keep it in
repair’ ” (quoting Levy, 50 Haw. at 498, 443
P.2d at 144)), Additionally, any liability po-
tentially arising in the future stemming from
the State’s easement would be determined by
“degree of control rather than mere owner-
ship” of the easement. Wemple II, 103 Ha-
wai'i at 398, 83 P.8d at 108 (citing Wemple I,
102 Hawai'i 27, 72 P.8d 499 (App. 2002),
rev'd, 103 Hawai'i 885, 88 P.8d 100 (2004)).

However, we observe that unless otherwise
specified between the parties, “[jloint use” of
an easement and any improvements thereon
may “give[] rise to an obligation to contrib-
ute jointly to the costs reasonably incurred
for repair and maintenance.” Restatement
(Third) of Prop.: Servitudes § 4,18(8) (Am.
Law Inst. 2000) (setting forth principles re-
lating to relative duties to repair and main-
tain easements). In Ass’n of Apartment,
Owners of Wailea Elua v. Wailea Resort Co.,
for example, this court affirmed a lower
court’s ruling that an easement holder was

403 P.3d at 259 (emphasis added). This ignores
the very core of this case—namely, that the pub-
lic also reaps the rewards of the Seawall by using
it to access the ocean, and it has continued to do
so for many decades. Our determination that the
State holds an easement over and across the
Seawall in favor of the general public signifies
that the Seawall will “inure to the benefit of all
the people of Hawaii,” State v. Zimring, 58 Haw.
106, 121, 566 P.2d 725, 735 (1977), who will be
able to continue using it in order to access the
Waikiki coastline,

32, The Restatement (Third) of Property also
specifies that “[iJn allocating costs” for mainte-
nance and repair between the owner of the ser-
vient estate and the owner of the easement, fac-
tors that should be considered include but are
not limited to: (1) “the values of their respective
contributions to construction and improvement
of any facilities for enjoyment of the easement
... including the value of the land contributed by

“partly responsible” for costs of repair and
maintenance relating to an easement which
was used jointly by the holder and servient
estate. 100 Hawai'i 97, 108-09, 58 P.38d 608,
619-20 (2002), We reasoned in that case that
because “the easement [was] being utilized
by both the easement holder ... and the
servient,” the easement holder had a legal
obligation “to contribute [to] the reasonable
costs of repair and maintenance” together
with the servient estate. Id, at 109, 58 P.8d at
620; see_also 28A C.J.S. Easements § 226
(2008) (“When joint regular use of the ease-
ment is made by both the dominant and
servient estates, both estates have the obli-
gation to contribute jointly to the costs of
reasonable repairs unless the easement itself
indicates otherwise.”); Village Green Condo.
Ass’n v. Hodges, 167 N.H. 497, 114 A.3d 828,
827-29 (2015) (observing that this rule is
based on “the principle that, by using the
easement, both the dominant and servient
estates contribute to its wear and deteriora
tion and, therefore, distribution of the bur-
den of easement maintenance and repair be-
tween both estates is equitable and just”),
Consistent with these principles, the State in
this case will be jointly responsible with the
relevant property owners for the repair and
maintenance of the surface of the Seawall—
over and across which the State has an ease-
ment—in accordance with equitable consider-
ations relating to their relative use, enjoy-
ment, and contributions to the Seawall.

the servient owner,” (2) “the frequency and in-
tensity of use” by the servient owner and the
easement owner, and (3) “the value of any other
contributions that enhance the value or the servi-
tude or the servient estate.” Restatement (Third)
of Prop.: Servitudes § 4.13 cmt. d.

33. Thus, contrary to the dissent's assertion, the
State will not be required to “foot the bill” for
the entirety of the Seawall’s upkeep, nor is it
under “no legal obligation” to contribute to its
repair and maintenance. Dissent at 482, 403 P.3d
at 259. Additionally, it would be inappropriate
for this court to speculate on a “calculation to
determine the parties’ contributory shares,” dis-
sent at 482, 403 P.3d at 259, and such a determi-
nation is best left to a trial court in the first
instance, See, e.g., Wailea Resort Co., 100 Ha-
wai'i at 103, 109, 58 P.3d at 614, 620 (affirming
apportionment of costs where, following a bench
trial, the trial court ruled that joint users of
easement were jointly responsible for repair and

C. Statutory Surrender Under HRS

§ 264-1(c)(2)

In addition to asserting that various provi-
sions of the Hawaii Revised Statutes operate
to preclude the implied dedication of private
property absent the State’s explicit accep-
tance, the State also contends that these
same statutes operate to require the State’s
formal consent as an additional element to
surrender under HRS § 264-1(¢) (2007), The
cirenit court and the ICA each rejected this
argument and concluded that the Seawall
and the real property under the Seawall had
been surrendered to the State. Gold Coast
Neighborhood Ass’n_v. State, 186 Hawai'i
840, 855-56, 861 P.8d 1248, 1258-59 (App.
2016), Although the State’s formal consent is
not required to effectuate a surrender under
HRS § 264-1(¢)(2), surrender of the Seawall
to the State nevertheless failed to oceur in
this case because the State did not hold a
preexisting express easement over the Sea-
wall as provided by this court’s decision in
Levy v. Kimball, 50 Haw. 497, 443 P.2d 142
(1968).

i, HRS § 264-1 and Levy vy, Kimball

HRS § 264-1(¢)(2) dates back to the enact-
ment of “The Highways Act, 1892,” by
Queen Liliuokalani and the legislative as-

maintenance costs of easement “‘in relative pro-
portion” to parties’ usages).

Relatedly, the dissent contends that under our
analysis, the State may not “tear down” the
entirety of the Seawall if it deems its apportion-
ment of repairs too costly. Dissent at 481, 403
P.3d at 258. We note that the State possesses an
easement interest only over and across the sur-
face of the Seawall, but that the State may exer-
cise its authority and control over the public's
use of its easement consistent with applicable
legal principles. See Levy, 50 Haw. at 498, 500,
443 P.2d at 144, 145 (describing various courses
of action that the State could pursue to fulfill its
duty of care to maintain its easement “over [the]
seawall” in a “safe condition,” such as “the
construction of a handrail on the makai edge of
the seawall, or closing of the seawall to pedestri-
an traffic, or the posting of signs giving notice of
its condition”).

34, See 1947 Haw. Sess. Laws Act 142, § 1 at 252
(“Such surrender shall be deemed to have taken
place if no act of ownership by the owner of any
such road, alley, street, way, lane, trail or bridge
has been exercised for five years and when, in
the case of a county highway, in addition thereto,

461

sembly of the Kingdom of Hawai'i, which set
special rules for statutory dedication and
surrender of highways and roads and includ-
ed the first codification of the present-day
surrender statute. See Susan E. Jaworowski,
Roads in Limbo: An Analysis of the State-
County Jurisdictional Dispute 8, Legislative
Reference Bureau Report N. 11 (1989). This
first iteration of the surrender statute re-
quired that the Minister of the Interior ex-
pressly accept each surrender of a road, al-
ley, street, way, lane, court, place, trail, or
bridge. See id. By 1947, however, the surren-
der statute had eliminated the requirement
of the State’s acceptance when such proper-
ties were surrendered to the state govern-
ment,*4 but retained the provision requiring
formal acceptance with respect to surrender
to the various counties.

The codification of HRS § 264-1(c)(2) as it
existed at the time this litigation was initi-
ated authorizes the surrender of certain pri-
vate roads and highways for use by the
public, and it provided in relevant part as
follows:

(c) All roads, alleys, streets, ways, lanes,
trails, bikeways, and bridges in the State,
opened, laid out, or built by private parties
and dedicated or surrendered to the public

the board of supervisors of the city and county or
county has, thereafter, by a resolution, adopted

the same as a county highway.” (emphasis add-

ed),

35. The difference in statutory requirements with
respect to surrender to the State versus surren-
der to the counties existed at commencement of
this litigation, see supra, and the plain language
of HRS § 264-1(c)(2) indicates that formal ap-
proval is not required when land is surrendered
to the State, See HRS § 264-1(c)(2) (surrender
“shall be deemed to have taken place” if no act
of ownership has been exercised for five years
“and when, in the case of a county highway, in
addition thereto, the legislative body of the coun-
ty has, thereafter, by a resolution, adopted the
same as a county highway or trail”). Because the
plain language of the statute only requires the
formal acceptance of surrendered roads and
highways when a county is the grantee, the argu-
ment of the State and of the dissent, dissent at
477, 403 P.3d at 254, that various disparate
statutes operate to modify the unambiguous text
of HRS § 264-1(c)(2) and impose a requirement
of such formal acceptance when the State is the
grantee is contrary to the clear text of the statute
itself.

462

use, are declared to be public highways or
public trails as follows:

(@) Surrender of public highways or
trails shall be deemed to have taken
place if no act of ownership by the own-
er of the road, alley, street, bikeway,
way, lane, trail, or bridge has been exer-
cised for five years and when, in the case
of a county highway, in addition thereto,
the legislative body of the county has,
thereafter, by a resolution, adopted the
same as a county highway or trail.
HRS § 264-1(c)(2) (2007). Therefore, HRS
§ 264-1(c)(2) sets as a threshold rule that
only roads, alleys, streets, ways, lanes, trails,
bikeways, and bridges may be “surrendered”
within the meaning of the statute. Id.

The term “seawall” is not included in the
categories of properties that may be surren-
dered to the State pursuant to HRS § 264-
1(¢)(2). This court has held, however, that a
seawall can properly fit within the general
ambit of the statute when it has been ex-
pressly opened up as a path of travel for the
public, Levy v. Kimball, 50 Haw. 497, 443
P.2d 142 (1968), In Levy, a woman was in-
jured after falling from the top of a seawall
in Waikiki. Id. at 497-98, 443 P.2d at 143,
Seeking damages for her injuries, the woman
filed suit against, inter alia, the State of
Hawai'i, which had previously “acquired an
easement over [the] seawall for the express
purpose of providing a path for public trav-
el.” 88 Id, at 498, 443 P.2d at 144,

‘The trial court determined that the State
‘was not negligent in maintaining the seawall
and that it was therefore not liable for the
woman’s injuries. Id. at 498-99, 448 P.2d at
144, On appeal, the State contended that its
preexisting easement expressly opening the
surface of the seawall as a path of public

36. The Levy court's description of the easement
indicates that it was expressly granted to the
State of Hawai'i. 50 Haw. at 498, 443 P.2d at
144; see also Ass'n of Apartment Owners of Wai-
lea Elua v. Wailea Resort Co. 100 Hawaii 97,
109, 58 P.3d 608, 620 (2002) (noting that in
Levy, “[tIhe State of Hawai'i owned an easement
over the seawall that had been obtained for the
purpose of providing a path for public travel’);
Steigman v, Outrigger Enter, Inc., 126 Hawaii
133, 139, 267 P.3d 1238, 1244 (2011) (describing
the seawall in Levy as “state-controlled”’); Fried-

travel did not require it to maintain the
seawall because it had only a nonpossessory
intangible interest in the footpath, Id. at 499,
448 P.2d at 144, This court noted that it was
a “well established rule” that the owner of an
easement “has the right and the duty to keep
it in repair.” Id, at 498, 443 P.2d at 144, And
while “it is the control and not the ownership
[of the property] which determines liability,”
we noted that the State had “admitted that it
control{led] the seawall.” Id, at 499, 443 P.2d
at 144 (quoting In re Taxes Victoria Ward, 33
Haw. 285 (Haw. Terr. 1984)),

This court then quoted the predecessor to
HRS § 264-1, which at the time, stated that
“all roads, alleys, streets, ways, lanes, trails
and bridges in the Territory, opened, laid out
or built by private parties and dedicated or
surrendered to the public use, are declared
to be public highways.” Id, (quoting Revised
Laws of Hawai'i (RLH) § 142-1 (1955)). We
considered that “[a]lthough a seawall is not
expressly mentioned in the above enumer-
ation, it can be fairly implied that a seawall
such as that which is in question here which
is used as a public thoroughfare is included
in the term ‘public highwasy’ [sic].” Id. (em-
phasis added), Thus, we determined that the
particular seawall at issue in the case—over
which the State held a preexisting express
easement for the specific purpose of opening
up a pathway for public travel—constituted a
“public highway” within the meaning of Ha-
waii’s surrender statute. Id. The Levy court
therefore concluded that seawalls will fall
within the scope of HRS § 264-1(c)(2) when
the State possesses a preexisting express
easement over the seawall that opens it up to
the public as a highway or thoroughfare, Id.

The conclusion in Levy was subsequently
confirmed in In re Banning, 78 Haw. 297,

rich_v. Dep't of Transp., 60 Haw. 32, 37, 586
P.2d 1037, 1041 (1978) (stating that the seawall

in Levy was used by the public as a thoroughfare,
which purpose had been “provided by the
State”), superseded by statute_as recognized in
Steigman, 126 Hawaii 133, 267 P.3d 1238. It is
noted that the parties’ stipulations and the circuit
court's findings of fact in this case also confirm
that the certificate of title to the property on
which the seawall in Levy was located reflected
an express easement over the seawall in favor of
the State,

812, 882 P.2d 724, 782 (1992).37 In Banning,
after determining that a parcel of accreted
beachfront property had not been impliedly
dedicated to the State, this court considered
the State’s argument that the public had
acquired rights in a trail located on the prop-
erty by virtue of surrender under HRS
§ 264-1, 78 Haw. at 812, 882 P.2d at 782. In
rejecting this argument, we cited Levy, 50
Haw. 497, 443 P.2d 142. We concluded that
“anlike the situation here, at the time of the
trip and fall on the seawall in Levy, the State
already held _an easement in favor of the
general public for use of the seawall as a
path of travel.” Banning, 78 Haw. at 312, 882
P.2d at 782 (emphasis added). Thus, because
the State held no preexisting easement over
the trail, the Banning court determined that
surrender under HRS § 264-1 did not ap-
ply. Id.

HI This court's decisions in Levy and
Banning are also reinforced by the nature of
the surrender statute. Hawai‘i appears to be
“one of the few jurisdictions which have pro-
vided, at one time or another, for vesting the
fee of a highway or road laid out by a private
party and abandoned to the public in the

37, Following our decision in Levy and before our
decision in In re Banning, 73 Haw. 297, 312, 832
P,2d 724, 732 (1992), the Ninth Circuit Court of
Appeals in Jones v. Halekulani Hotel, Inc., 557
F.2d 1308, 1310 (9th Cir. 1977), determined that
the State had acquired a prescriptive easement
over a seawall by “[ulse which [was] constant,
uninterrupted, and peaceful.” The court then
briefly noted that a prescriptive easement over a
seawall in favor of the State had been character-
ized by this court in Levy as a public thorough-
fare or highway within the meaning of HRS
§ 264-1, Id. at 1311. Thus, although the Jones
court may have noted a relation between the
seawall at issue in its case and HRS § 264-1
generally, it was not called upon to interpret or
apply that statute’s surrender provision.

38, After concluding that the Levy court's reliance
on HRS § 264-1 was distinguishable because in
that case, the State held a preexisting easement
over the seawall, the Banning court also noted
that the disputed trail had not been built or laid
out by private parties as required by the surren-
der statute, Banning, 73 Haw. at 312, 832 P.2d
at 732,

39, Amendments to the surrender statute enacted
by Act 194 of the 2016 legislative session delete

463

central government.” In re Kelley, 50 Haw.
567, 579, 445 P.2d 588, 546 (1968) (discussing
predecessor statute to surrender under HRS
§ 264-1(¢)(2)). Under HRS § 264-1(c)(2) as it
existed when proceedings were initiated in
this case, certain roads and highways are
surrendered after only five years of no acts
of ownership. See HRS § 264-1(¢)(2). The
fact that ownership is automatically
“deemed” surrendered to the State after
such a relatively brief period counsels in
favor of an interpretation of the statute that
is more narrow than broad when considering
a seawall not enumerated within HRS § 264-
1(¢)@). The surrender of total ownership
rights in a seawall or other similar structure
after only five years, pursuant to a transpor-
tation and highways statute, may, for exam-
ple, operate to unexpectedly deprive private
property owners of such rights.! These con-
siderations inform an interpretation of HRS
§ 264-1(c)(2) that includes a seawall only as
contemplated by our decision in Levy: name-
ly, that a seawall falls within the purview of
the statute where it is subject to a preexist-
ing express easement in favor of the State
clearly opening the seawall up as a pathway
for public travel. 50 Haw. at 498-99, 448 P.2d
at 144,40

and replace the surrender statute at HRS § 264-
1(c)(2) with a section on “[c]ondemnation of
public highways.” See 2016 Haw. Sess, Laws Act
194, § 3, Pursuant to this new process, the State
and county may initiate condemnation proceed-
ings over public highways, roads, alleys, streets,
ways, lanes, bikeways, bridges, or trails. Id. Pri-
vate parties are not entitled to initiate condemna-
tion proceedings, but may “petition the mayor of
the county” in which the road or highway is
located to do so. Id, Thus, surrender of roads and
highways after five years without an act of own-
ership will no longer be deemed to have oc-
curred under HRS § 264-1(c)(2) (Supp. 2016).

40. Consider, for example, that in contrast to the
five-year requirement for surrender under HRS
§ 264-1(c)(2), a common law implied dedication
evidenced by continuous public use may only be
established after such use of the property has
continued for over twenty years, See Banning, 73
Haw. at 308, 832 P.2d at 730, Even where public
use has continued for over twenty years, such use
only creates a rebuttable presumption of an im-
plied dedication. Id. at 307-08, 832 P.2d at 730.
Further, if a party does not successfully rebut the
presumption of a dedication, the State is merely
granted an easement over, rather than ownership
of, the property. Wemple II, 103 Hawai'i 385,
397, 83 P.3d 100, 112 (2004).

464

ii, The State does not own the Seawall by
virtue of surrender

Hs As stated, this court’s decision in
Levy concluded that a seawall may fall within
the scope of HRS § 264-1(¢)(2) when there is
a preexisting express easement in favor of
the State clearly opening it up and identify-
ing it as a pathway for public travel. 50 Haw.
at 499-500, 443 P.2d at 144-45, Under this
authority, a seawall over which the State
holds a preexisting express easement open-
ing the seawall up as a pathway for public
travel will be deemed surrendered to the
State if it was opened, laid out, or built by
private parties and if no act of ownership has
been exercised by its owner for five years.
See HRS § 264-1(0)(2).

In this case, the parties stipulated that the
State held a preexisting express easement
only over a portion of the Seawall located at
TMK No. 8-1-088:009. However, title to TMK
No. 3-1-088:009 is registered in land court,
and property registered in land court is not
subject to the surrender statute. See HRS
§ 501-87 (2006) (and registered in land court
is not subject to surrender under HRS
§ 264-1),

Because the State held no preexisting ex-
press easements over portions of the Seawall
subject to HRS § 264-1(c)(2), the State does
not own the Seawall or the real property
underneath the Seawall by virtue of surren-
der, and the circuit court and the ICA erred
in so holding. Gold Coast Neighborhood

entitled to attorneys’ fees and costs. Al-
though the circuit court denied Gold Coast’s
request for attorneys’ fees and costs on the
basis of sovereign immunity, the ICA vacated
this ruling of the circuit court and deter-
mined that fees and costs were permissible
because the State had filed its own complaint
against Gold Coast and “‘the doctrine of
sovereign immunity is unavailing and inappo-
site’ when the case ‘deals with a suit initiated
by the State”” Gold Coast Neighborhood
Ass’n v, State, 186 Hawai'i 340, 357, 861 P.38d
1243, 1260 (App. 2015) (alteration omitted)
(quoting State ex rel, Anzai v. City & Cty. of
Honolulu, 99 Hawai'i 508, 515-16, 57 P.8d 438,
440-41 (2002). On certiorari, the State con-
tends that the ICA erred in awarding attor-
neys’ fees because the filing of its own law-
suit for declaratory relief did not waive its
sovereign immunity.

“The doctrine of sovereign immu-
nity ‘refers to the general rule, incorporated
in the Eleventh Amendment to the United
States Constitution, that a state cannot be
sued in federal court without its consent or
an express waiver of its immunity. The doc-
trine ... also precludes such suits in state
courts.” Nelson v. Hawaiian Homes
Comm’n, 130 Hawai'i 162, 168, 307 P.38d 142,
148 (2018) (quoting Sierra Club v. Dep't of
Transp., 120 Hawaii 181, 225-26, 202 P.3d
1226, 1270-71 (2009)). Thus, the State as sov-
ereign is generally “immune from suit except
as it consents to be sued.” Id. (quoting Fi-
gueroa v. State, 61 Haw. 369, 381, 604 P.2d

Ass'n, 186 Hawai‘ at 355-56, 361 P.38d at
1258-59.

D. Attorneys’ Fees and Costs

TH Lastly, we address the State’s ap-
peal of the ICA’s ruling that Gold Coast was

41. The dissent disagrees with this reading of the
caselaw, in part based on its contention that
neither Levy, 50 Haw. 497, 443 P.2d 142, nor
Banning, 73 Haw. 297, 832 P.2d 724, “expressly
States that such a requirement is necessary under
HRS § 261-1.” Dissent at 473, 403 P.3d at 250
(emphasis added). However, a seawall is not
enumerated in the categories of property subject
to surrender under HRS § 264-1. Levy repre-
sents the sole case in this jurisdiction to consider
a particular seawall to fall within the ambit of
the statute, and, as argued by the State, the

1198, 1205 (1979).

HN The State’s sovereign immunity
does not bar actions seeking prospective de-
claratory or injunctive relief. See id. (observ-
ing that sovereign immunity did not bar
plaintiffs’ underlying claims for declaratory

decision emphasized the legal significance of that
seawall’s express easement in favor of the State.
50 Haw. at 499, 443 P.2d at 144. Subsequently in
Banning, we reaffirmed the importance of the
Levy seawall’s preexisting express easement.
Banning, 73 Haw. at 312, 832 P.2d at 732. Thus,
based on the statute and its caselaw, we reaffirm
our conclusion that a seawall falls within the
ambit of HRS § 264-1(c)(2) when it is subject to
a preexisting express easement in favor of the
State clearly establishing it as a thoroughfare for
public travel.

and injunctive relief); see also Sierra Club,
120 Hawaiii at 226, 202 P.8d at 1271 (recog-
nizing that sovereign immunity does not bar
actions seeking prospective relief), However,
because sovereign immunity bars actions for
damages against the State, and because “an
award of costs and fees to a prevailing party
is inherently in the nature of a damage
award,” requests for attorneys’ fees and
costs against the State are generally barred
unless there is a “clear relinquishment” of
the State’s immunity. Sierra Club, 120 Ha-
wait at 226, 202 P.3d at 1271 (quoting
Fought & Co., Inc. y. Steel Eng’g & Erec-
tion, Ine., 87 Hawai‘i 37, 51, 951 P.2d 487, 501
(1998); Bush v, Watson, 81 Hawai'i 474, 481,
918 P.2d 1180, 1187 (1996)); see also Kaleikini
y. Yoshioka, 129 Hawai'i 454, 467, 304 P.8d
252, 265 (2018) (observing that a statute pur-
porting to waive sovereign immunity is to be
“strictly construed ... in favor of the sover-
eign” (quoting Taylor-Rice v. State, 105 Ha-
wai'i 104, 110, 94 P.3d 659, 665 (2004))). Gen-
erally, “the State has waived immunity to
suit only to the extent as specified in HRS
chapters 661 and 662.” Kaleikini, 129 Hawaii
at 467, 304 P.3d at 265 (observing that HRS
§ 661-1(1) (1998) includes a waiver of sover-
eign immunity for claims against the State
that are based on a statute),

Gold Coast does not argue that its claims
are founded on any statute operating to
waive the State’s sovereign immunity. Rath-
er, Gold Coast contends, and the ICA con-
eluded, that the State waived its sovereign
immunity in this case because it filed its own
complaint for declaratory relief against Gold
Coast. Gold Coast Neighborhood Ass’n, 136
Hawai'i at 357, 861 P.3d at 1260. In support
of this contention, Gold Coast and the ICA
place sole reliance on this court’s statement
in Anzai, 99 Hawai'i at 515-16, 57 P.3d at 440-
41, that because the case “deal[t] with a suit
initiated by the State, the doctrine of sover-
eign immunity [was] unavailing and inappo-
site.”

Anzai centered on a dispute between the
State of Hawai'i and the City and County of
Honolulu (the County), in which the State
claimed that it was exempt from real proper-
ty taxes levied by the County as a result of

42, We further note that no court of this jurisdic-

465

recently enacted state legislation; the Coun-
ty, in turn, discounted the legislation and
required the State to pay the taxes, 99 Ha-
wail at 510, 518, 57 P.3d at 485, 488, The
State filed a lawsuit against the County in
order to resolve the dispute, alleging in part
that the County was precluded from assess-
ing real property taxes against the State
based on “the doctrine of sovereign immuni-
ty.” Id. In reviewing the trial court’s grant of
summary judgment in favor of the County,
this court observed “[p]reliminarily” that the
State’s reliance on the “doctrine of sovereign
immunity” was “misleading.” Id. at 515, 57
P.3d at 440. The Anzai court explained that
the “doctrine of sovereign immunity” re-
ferred to the general rule that a state cannot
be sued in federal or state court without an
express waiver of its immunity. Id. The court
next reasoned, “However, because this case
deals with a suit initiated by the State, the
doctrine of sovereign immunity is unavailing
and inapposite.” Id. at 515-16, 57 P.8d at 440-
41, The Anzai court then proceeded to ex-
plain that the “immunity” claimed by the
State was not based on “sovereign immuni-
ty,” but rather, on “the constitutional rule of
tax immunity.” Id, at 516, 57 P.8d at 441.
“Keeping this clarification in mind,” the court
then “turnfed] to the questions presented by
[the] appeal,” which involved no further dis-
cussion of the State’s sovereign immunity. Id.

As an initial matter, we note that the
dispositive issue in Anzai was whether the
constitutional rule of tax immunity or certain
state legislation precluded the County from
collecting real property taxes from the State.
Id. at 510, 57 P.8d at 435 (concluding that
neither basis immunized the State from such
taxation by the County). The State’s reliance
on the doctrine of sovereign immunity was
“anavailing and inapposite” because rather
than argue that it was immune from suit, the
State contended that it was immune from
taxation by the County. Id, at 518, 57 P.8d at.
438. Thus, it was not the doctrine of sover-
eign immunity in Anzai that could be relied
upon to argue that the County could not levy
taxes against the State, but rather, the con-
stitutional rule of tax immunity. Id, at 516-19,
57 P.8d at 441-4442 The parties’ arguments

tion (or any other jurisdiction) has relied on this

466

did not relate to the State’s ability to be sued
or pertain to any purported waiver of the
State’s sovereign immunity with respect to
damages or attorneys’ fees.

Additionally, although the doctrine of sov-
ereign immunity was “unavailing and inappo-
site” in Anzai, the procedural posture of the
case in Anzai differs substantially from the
procedural history of the present case. See
id. In Anzai, the State filed the complaint
that initiated the lawsuit and sought relief
from taxation by the County. Id, The State in
Anzai did not argue that it was protected
from suit based on sovereign immunity, nor
was the issue of damages or attorneys’ fees
raised.

In this case, by contrast, Gold Coast initi-
ated the legal proceedings, Although the
State filed its own complaint several years
after Gold Coast’s initial complaint, the
State’s complaint was limited to the subject
matter raised by Gold Coast’s claims in the
ease. Like Gold Coast, the State sought de-
claratory relief relating to the State’s respon-
sibility to maintain the Seawall. Further, the
State represented that it filed its complaint
because, after the circuit court’s ruling on
indispensable parties, the State was con-
cerned that individual property owners and
other associations would not be explicitly
bound by a ruling on Gold Coast’s complaint.
Given the circumstances and procedural his-
tory of this case, we do not conclude that the
State’s filing of its complaint for declaratory
relief in this case represented a “clear relin-
quishment” of the State’s sovereign immuni-
ty.4 Sierra Club, 120 Hawai'i at 226, 202 P.8d

statement in Anzai, 99 Hawai'i at 515-16, 57
P.3d at 440-41, (other than the ICA decision in
this case) for the proposition that the State's
initiation of legal proceedings waives its sover-
eign immunity.

43. To this extent, Anzai therefore does not pro-
vide authority for the proposition that when the
State initiates an action solely for prospective
relief, it automatically waives its sovereign im-
munity as to damages or attorneys’ fees. 99 Ha-
wai'i $08, 57 P.3d 433.

44. Alternatively, Gold Coast argued before the
ICA that it was entitled to attorneys’ fees based
on this court's inherent powers pursuant to HRS
§ 602-5(a)(6) (1993 & Supp. 2004). In support of
this argument, Gold Coast cites to CARL Corpo-
ration v, Department of Education, 85 Hawai'i

at 1271 (quoting Bush, 81 Hawai'i at 481, 918
P.2d at 1187).

Hs In addition to ruling that Gold Coast
was entitled to attorneys’ fees, the ICA also
determined that Gold Coast was entitled to
costs pursuant to HRS § 607-24. Gold Coast
Neighborhood Ass’n, 186 Hawai'i at 357, 361
P.8d at 1260; see also HRS § 607-24 (1993)
(‘Tn all cases in which a final judgment or
decree is obtained against the State ... any
and all deposits for costs made by the pre-
vailing party shall be returned to the prevail-
ing party, and the prevailing party shall be
reimbursed by the State....”). In so ruling,
the ICA found that the circuit court had
erred in concluding that costs, like attorneys’
fees, were barred by sovereign immunity.
Gold Coast Neighborhood Ass‘n, 186 Hawaiti
at 857, 361 P.8d at 1260,

The State does not challenge on certiorari
the ICA’s ruling that sovereign immunity
does not bar an award of costs to Gold Coast.
This court has concluded that HRS § 607-24
“waives the State’s immunity for costs ‘in all
cases in which a final judgment or decree is
obtained against the State”” Kaleikini, 129
Hawai'i at 469 n.14, 804 P.8d at 267 n14
(quoting HRS § 607-24 (1998)). Because we
determine that Gold Coast prevailed on its
claim that the State acquired an easement
over and across the Seawall by virtue of
implied dedication, Gold Coast is entitled to
costs pursuant to HRS § 607-24, Id.

In sum, the circuit court correctly conclud-
ed that Gold Coast was not entitled to an
award of attorneys’ fees because the State
had not waived its sovereign immunity, and

431, 460, 946 P.2d 1, 30 (1997). However, this
court's decision in CARL Corporation is distin-
guishable from the present case, and Gold Coast
has not demonstrated that the CARL Corporation
decision supports an award of attorneys’ fees
here,

45, Because this court concludes that sovereign
immunity bars an award of attorneys’ fees
against the State, we do not address Gold Coast's
claim regarding the private attorney general doc-
trine. See Nelson, 130 Hawai'i at 172, 307 P.3d
at 152 (observing that the State’s sovereign im-
munity “bars an award of appellate attorneys’
fees ... based on the private attorney general
doctrine”).

the ICA erred in concluding otherwise. Gold
Coast Neighborhood Ass’n, 186 Hawaii at
857, 361 P.8d at 1260, However, the circuit
court erroneously determined that sovereign
immunity also barred an award of costs in
this case. As held by the ICA, id., Gold Coast
is entitled to costs pursuant to HRS § 607-
24, which waives the State’s sovereign immu-
nity for costs requested by a prevailing party
when a final judgment has been obtained
against the State. See Kaleikini, 129 Hawai'i
at 469 n.14, 304 P.3d at 267 n.14; HRS § 607.
24,

V. CONCLUSION

The common law doctrine of implied dedi-
cation has deep roots in our jurisprudence,
and nearly 150 years of this court’s prece-
dent demonstrate that it is a viable means of
transferring interests in private property to
the State for use by the public, Given the
undisputed evidence in this case, the circuit,
court correctly concluded that the State ac-
quired an easement over and across the Sea-
wall by virtue of implied dedication, and the
ICA properly affirmed this ruling of the cir-
cuit court.!® Gold Coast Neighborhood Ass’n
y. State, 186 Hawai'i 340, 354-55, 361 P.3d
1248, 1257-58 (App. 2015).

However, this court’s decision in Levy v.
Kimball, 50 Haw. 497, 443 P.2d 142 (1968),
requires that for a seawall to fall within the
ambit of the surrender statute, it must be
subject to a preexisting express easement in
favor of the State clearly and unambiguously
opening the seawall up as a pathway for
public travel. This requirement was not satis-
fied with respect to the Seawall in this case,
Thus, the circuit court and the ICA each
erred in concluding that the Seawall and the
real property underneath the Seawall were
surrendered to the State pursuant to HRS
§ 264-1(c)(2). Gold _Coast__Neighborhood
Ass’n, 186 Hawaii at 855-56, 361 P.3d at
1258-59.

With respect to the State’s remaining ar-
guments on certiorari, the cireuit court prop-

46. The dissent argues that our decision “opens
the door for other private property owners to
receive free services from the State.” Dissent at
482, 403 P.3d at 259, We reiterate that this case
involves uncontroveried evidence stipulated to by

467

erly determined that Gold Coast had not
failed to join indispensable parties and that
an award of attorneys’ fees was barred by
the doctrine of sovereign immunity. The
ICA’s conclusion that Gold Coast was enti-
tled to attorneys’ fees is incorrect because
the State’s filing of its own complaint for
declaratory relief did not waive its sovereign
immunity from fees in the cireumstances of
this case and because Gold Coast has not
demonstrated that it merits attorneys’ fees
on any other basis,

The circuit court did err, however, in con-
cluding that an award of costs was barred by
the doctrine of sovereign immunity. The ICA
correctly concluded that the circuit court had
erred with respect to this issue because HRS
§ 607-24 (1998) waived the State’s sovereign
immunity with respect to costs in this case.

Accordingly, the circuit court's November
29, 2013 Findings of Fact and Conclusions of
Law is affirmed with respect to the court’s
determination that the State acquired an
easement over and across the Seawall by
virtue of common law implied dedication, but.
it is vacated with respect to its conclusion
that the State acquired ownership of the
Seawall and the real property under the Sea-
wall by virtue of surrender under HRS
§ 264-1(c)(2). The ICA’s August 7, 2015
Judgment on Appeal is affirmed with respect.
to its disposition of the circuit court’s ruling
regarding common law implied dedication
but vacated to the extent that it affirmed the
circuit court’s ruling with respect to surren-
der under HRS § 264-1(¢)(2).

Additionally, the circuit court’s May 18,
2014 Order Denying Fees and Costs is vacat-
ed with respect to the circuit court’s determi-
nation that Gold Coast was not entitled to
costs and affirmed with respect to its conclu-
sion that Gold Coast was not entitled to
attorneys’ fees. The ICA’s August 7, 2015
Judgment on Appeal is thus further vacated
as to its conclusion that Gold Coast was
entitled to attorneys’ fees but affirmed as to

the parties, which demonstrates that for many
decades, the surface atop the Seawall has been
freely used by the public and frequently repaired
and maintained by the State.

468

its conclusion that Gold Coast was entitled to
costs.

Therefore, the circuit court’s February 3,
2014 Final Judgment is affirmed as to its
conclusion regarding implied dedication but
vacated as to its conclusion regarding surren-
der, and the case is remanded for proceed-
ings consistent with this opinion. On remand,
the circuit court shall consider Gold Coast’s
motion for an award of costs pursuant to
HRS § 607-24 following issuance of an
amended final judgment in favor of Gold
Coast as to its claim of common law implied
dedication.

DISSENTING OPINION BY
NAKAYAMA, J. IN WHICH
RECKTENWALD, C.J., JOINS

I. INTRODUCTION

Almost a century ago, unknown private
parties built a seawall on the makai boundary
of private property fronting Diamond Head
in order to protect their property from high
waves and erosion. Since then, the seawall
has been all but abandoned by the property
owners, used by the public as a thoroughfare,
and infrequently repaired by the State. How-
ever, at all times since its construction, the
seawall has continued to serve its primary
purpose—the protection of private property.
The specific issue before this court is wheth-
er the State is responsible for the seawall’s
upkeep and maintenance.

The Majority holds that the State has an
easement over the seawall pursuant to im-
plied dedication, and is thus responsible for
its maintenance and repair. I disagree with
this holding and would conclude instead that,
under the facts of this case, private property
rights in ways or trails cannot be dedicated
or surrendered to the State without the
State’s formal approval. As such, I would
hold that the State does not own and is not
responsible for the seawall. For this reason, I
respectfully dissent from sections IV.B-C of
the Majority’s opinion.

Il. BACKGROUND

Nearly a century ago, unknown private
parties built a seawall on the makai boundary

of private property fronting Diamond Head.
The primary purpose of the seawall was to
“protect land and upland property from dam-
age by waves in areas of high wave action,
with incidental functions as a retaining wall
or bulkhead.” There is no indication that the
seawall has ceased to serve this primary
purpose—protection of private property.

However, approximately sixty-five years
ago, the seawall started serving a secondary
purpose, as a “thoroughfare for public travel”
along the Waikiki coastline. Multiple people,
Gold Coast members and the general public
alike, testified that the public uses the sea-
wall as a walkway, traversing it in order to
access the ocean or walk along the coastline,
For instance, June Anderson, a Gold Coast
member, testified that she has lived in her
home bordering the seawall for over thirty-
seven years, has used the seawall as a path-
way for over fifty-five years, and has ob-
served the public using the seawall as a
walkway throughout this time; Robert Gen-
try, a Gold Coast member, testified that he
has lived in his home bordering the seawall
since 1982 and that he has “observed mem-
bers of the public us[ing] the Diamond Head
Seawall as a walkway and for recreational
purposes on a continuous basis,” and; Guy
Bishaw, a Waikiki resident, testified that he
has used the seawall for over forty years to
access offshore surfing spots.

Starting in the 1980s, the State began to
periodically repair sections of the seawall.
These repairs included: emergency repair
work to shore approximately forty feet of the
seawall, rehabilitation of broken sections,
surface repair work, construction of handrails
along some portions of the seawall, and
emergency rehabilitation of portions of the
seawall following Hurricane Iniki, Funds for
this work were authorized by the State legis-
lature.

In 2006, Gold Coast requested two million
dollars from the State legislature in order to
repair and improve the seawall. The legisla-
ture appropriated the requested funds for
“plans, design and construction for the resur-
facing of the seawall and installation of rail-
ings along Waikiki’s Gold Coast.” However,
the funds were never released because the
Department of Land and Natural Resources

(@LNR) disputed that it had the responsibili-
ty to maintain and repair the seawall.

On June 22, 2007, Gold Coast filed a com-
plaint against the State, requesting declara-
tory relief over a “dispute between the
GONA and the State of Hawai‘i pertaining to
whether the State has the duty to maintain in
good and safe condition a long stretch of
seawall on the Waikiki coastline along Kala-
kaua Avenue in the City and County of Hon-
olulu, State of Hawai‘.” In turn, the State
sought a delcaration that “it does not own the
seawalls or the real property under the sea-
walls and ... does not have an easement by
prescription or implication over the sea-
walls.”

In 2014, the Circuit Court of the First
Cireuit (circuit court) concluded that “the
State owns the Seawall and the real property
under the Seawall by surrender and/or has
an easement across the Seawall by implied
dedication.” The Intermediate Court of Ap-
peals (ICA) affirmed the circuit court’s con-
clusion in this regard. Gold Coast _Neighbor-
hood_Ass’n v. State, 186 Hawai'i 340, 361
P.8d 1248 (App. 2015).

I. STANDARDS OF REVIEW
A. Statutory Interpretation

The interpretation of a statute is a question
of law that we review de novo. State v. Kotis,
91 Hawai'i 319, 327, 984 P.2d 78, 86, recon-
sideration denied (1999). Similarly, a trial
court’s conclusions of law are reviewable de
novo under the right/wrong standard. State
v. Lopes, 78 Hawaii 438, 440, 896 P.2d 889,
896 (1995). Under the de novo standard, [the
appellate] court must examine the facts and
answer the pertinent question of law without
being required to give any weight or defer-
ence to the trial court’s answer to the ques-
tion. Id. In other words, we are free to
review a trial court’s conclusion of law for its
correctness. Id.

State v. Kelekolio, 94 Hawaii 354, 356, 14
P.8d 364, 866 (App. 2000).

The Hawai‘i Supreme Court has repeated-
ly stated that, when interpreting a statute, an
appellate court’s

foremost obligation is to ascertain and give

effect to the intention of the legislature[,]

469

which is to be obtained primarily from the
language contained in the statute itself.
Hurip, 76 Hawai'i at 216, 878 P.2d at 95
(citations omitted). And “where the lan-
guage of the statute is plain and unambig-
uous, [a court’s] only duty is to give effect
to [the statute’s] plain and obvious mean-
ing.” Ing v. Acceptance Ins. Co., 76 Hawai'i
266, 270, 874 P.2d 1091, 1095 (1994).

State v. Wells, 78 Hawai'i 378, 376, 894 P.2d

10, 73 (1995), Accordingly,

we must read statutory language in the
context of the entire statute and construe
it in a manner consistent with its purpose.

When there is doubt, doubleness of
meaning, or indistinctiveness or uncertain-
ty of an expression used in a statute, an
ambiguity exists... .

In construing an ambiguous statute,
“[t]he meaning of the ambiguous words
may be sought by examining the context,
with which the ambiguous words, phrases,
and sentences may be compared, in order
to ascertain their true meaning.” HRS § 1-
15(1)[ (1998) ]. Moreover, the courts may
resort to extrinsic aids in determining leg-
islative intent. One avenue is the use of
legislative history as an interpretive tool.

... [The appellate] court may also con-
sider “[t]he reason and spirit of the law,
and the cause which induced the legisla-
ture to enact it ... to discover its true
meaning.” HRS § 1-15(2) (1998). “Laws in
pari materia, or upon the same subject
matter, shall be construed with reference
to each other. What is clear in one statute
may be called upon in aid to explain what,
is doubtful in another.” HRS § 1-16(1993).

State v. Young, 107 Hawai'i 36, 39-40, 109
P.8d 677, 680-81 (2005).

IV. DISCUSSION

In essence, the question raised by this case
is whether private property rights may be
dedicated or surrendered to the State with-
out the State’s formal consent. The Majority
holds that they can and specifically concludes
that the State acquired an easement over the
seawall through common law implied dedica-
tion. The Majority further concludes that the
seawall was not surrendered to the State.

470

Instead, I would conclude that the disposi-
tion of the seawall is governed by a clear
statutory framework under Hawai'i Revised
Statutes (HRS) § 264-1, which provides for
the dedication and surrender of privately
built ways and trails to the State. Pursuant
to the clear and unambiguous language of
HRS § 264-1 and accompanying statutes, I
would hold that private property rights in
ways or trails may not be dedicated or sur-
rendered to the State without the State’s
formal approval and that, under the facts of
this case, the State did not aequire any prop-
erty rights in the seawall,

A. The Seawall Is A Way Or Trail Pursu-
ant To HRS § 264-1.

HRS § 264-1(c) (2007), entitled “[pJublic
highways and trails,” provides for the dedica-
tion and surrender of privately built “roads,
alleys, streets, ways, lanes, trails, bikeways,
and bridges” to the public. The following two
sections provide a historical background of
the statute and an analysis of its applicability
to seawalls.

1, History and purpose of HRS § 264-1

Prior to the Mahele of 1848! all land,
including roads, in the Kingdom of Hawai'i
belonged to the people through the sover-
eign. See State vy. Zimring, 58 Haw. 106, 111,
566 P,2d 725, 729 (1977) (noting that the
Constitution of 1840 provided that “all the
land from one end of the Islands to the
other” belonged to Kamehameha I, “though
it was not his own private property.” Instead,
it “belonged to the chiefs and the people in
common”); Susan E. Jaworowski, Roads in
Limbo: An Analysis of the State-County Ju-
risdictional Dispute 8, Legislative Reference
Bureau Report No. 11 (1989).

After the Mahele, “private roads could be
constructed on private property, [but] roads
that were formerly public remained so.” Ja-
worowski, supra, at 8. In 1892, Queen
Liliuokalani and the legislative assembly of
the Kingdom of Hawai'i enacted “The High-

1. The Mahele of 1848 was a land division that
identified and reserved land for the king, the
government, the chiefs and konohiki (agents of
the chiefs), and the tenants. See Zimring, 58
Haw, at 112, 566 P.2d at 730.

ways Act, 1892.” 1802 Haw. Sess. Laws Act
47, § 1 at 68-75; Jaworowski, supra, at 8.
Among other things, The Highways Act de-
fined “public highways” and set requirements
for private persons to dedicate highways to
the Kingdom. 1892 Haw. Sess. Laws Act 47,
§§ 2-8 at 68-69. Significantly, the Act re-
quired that the Minister of Interior accept or
adopt roads dedicated or surrendered by pri-
vate parties:

Any road, alley, street, way, lane, court,
place, trail or bridge laid out, constructed,
opened or maintained by individuals or
corporations as a highway, may become a
public highway by dedication or abandon-
ment, or surrender thereof to general use
by such individual or corporation; provided.
that the same shall be accepted or adopted
by the Minister of Interior.

1892 Haw. Sess. Laws Act 47, § 3 at 68-69
(emphases added).

Over the decades since its inception, The
Highways Act has had many iterations and is
currently codified as HRS § 264-1, “[plublic
highways and trails.” At the time this litiga-
tion was initiated, HRS § 264-1 (2007)? was
segmented into four subsections; subsection
(a) defined public highways and divided pub-
lic highways into two categories, state and
county highways; subsection (b) defined pub-
lic trails and provided that trails were under
the jurisdiction of the State Board of Land
and Natural Resources (BLNR), unless the
trail was created by or dedicated to a specific
county; subsection (c) provided two mecha-
nisms—dedication and surrender—for pri-
vate parties to transfer private roads or
trails to the State or county, and; subsection
(a) provided rules for the State and counties
in disposing of public highways and trails.
The full text of HRS § 264-1 reads as fol-
lows:

HRS § 264-1, Public highways and trails.

(a) All roads, alleys, streets, ways, lanes,

bikeways, bridges in the State, opened,

laid out, or built by the government are

2, Unless otherwise indicated, citations to HRS
§ 264-1 are to the 2007 version of the statute.

declared to be public highways. Public
highways are of two types:
(1) State highways, which are all those
under the jurisdiction of the department
of transportation; and
(2) County highways, which are all oth-
er public highways.
(b) All trails, and other nonvehicular
rights-of-way in the State declared to be
public rights-of-ways by the Highways Act
of 1892, or opened, laid out, or built by the
government or otherwise created or vested
as nonvehicular public rights-of-way at any
time thereafter, or in the future, are de-
elared to be public trails. A public trail is
under the jurisdiction of the state board of
land and natural resources unless it was
created by or dedicated to a particular
county, in which case it shall be under the
jurisdiction of that county.
(c) All roads, alleys, streets, ways, lanes,
trails, bikeways, and bridges in the State,
opened, laid out, or built by private parties
and dedicated or surrendered to the public
use, are declared to be public highways or
public trails as follows:
(1) Dedication of public highways or
trails shall be by deed of conveyance
naming the State as grantee in the case
of a state highway or trail and naming
the county as grantee in the case of a
county highway or trail. The deed of
conveyance shall be delivered to and ac-
cepted by the director of transportation
in the case of a state highway or the
board of land and natural resources in
the case of a state trail. In the case of a
county highway or county trail, the deed
shall be delivered to and accepted by the
legislative body of a county.
@) Surrender of public highways or
trails shall be deemed to have taken

3. The full text of HRS § 264-1 (Supp. 2016)
reads as follows:
HRS § 264-1, Public highways and trails.
(a) All roads, highways, alleys, streets, ways,
lanes, bikeways, bridges, and all other real
property highway related interests in the State,
opened, laid out, subdivided, consolidated, and
acquired and built by the government are de-
clared to be public highways. Public highways
are of two types:
(1) State highways, which are those lands,
interests, or other real property rights, as
defined above, having an alignment or pos-

471

place if no act of ownership by the own-
er of the road, alley, street, bikeway,
way, lane, trail, or bridge has been exer-
cised for five years and when, in the case
of a county highway, in addition thereto,
the legislative body of the county has,
thereafter, by a resolution, adopted the
same as a county highway or trail,

In every case where the road, alley, street,
bikeway, way, lane, trail, bridge, or high-
way is constructed and completed as re-
quired by any ordinance of the county or
any rule, regulation, or resolution thereof
having the effect of law, the legislative
body of the county shall accept the dedica-
tion or surrender of the same without ex-
ercise of discretion.

(d) All county public highways and trails

once established shall continue until vacat-

ed, closed, abandoned, or discontinued by a

resolution of the legislative body of the

county wherein the county highway or trail
lies. All state trails once established shall
continue until lawfully disposed of pursu-

ant to the requirements of chapter 171.
Notably, HRS § 264-1 preserved dedication
and surrender from The Highways Act as
methods for private roads or trails to be
twansferred to the State or counties.

While this case was pending before this
court, HRS § 264-1 was substantially amend-
ed again, this time during the 2016 legislative
session. With regards to ‘dedication, both
HRS § 264-1 (2007) and (Supp. 2016) ex-
pressly provide that a deed of conveyance
shall be delivered to and accepted by the
appropriate State or county authority in or-
der for the private property rights to be
dedicated to the State or county. However,
under its present iteration,’ HRS § 264-1
(Supp. 2016) does not provide for surrender
of private roads or trails to the State or
county; instead, this statute provides, inter

session of a real property highway related
interest as established by law, subdivided
and acquired in accordance with policies
and procedures of the department of trans-
portation, separate and exempt from any
county subdivision ordinances, and all those
under the jurisdiction of the department of
transportation; and
(2) County highways, which are all other
public highways.
(b) All trails, and other nonvehicular rights-
of-way in the State declared to be public
rights-of-ways by the Highways Act of 1892, or

472 —

alia, that private owners of roads or trails
may petition the county to begin condemna-
tion proceedings. As such, the present ver-
sion of HRS § 264-1 (Supp. 2016) no longer
provides for the surrender of private ways or
trails to the public.

As the following section explains, although
not specifically listed within HRS § 264-1(¢),
the seawall at issue in the current case falls
within the statute’s authority.

2. Applicability of HRS § 264-1(e) to the
seawall

HRS § 264-1(c) governs the disposition of
the seawall in this case. HRS § 264-1(c) pro-

opened, laid out, or built by the government or
otherwise created or vested as nonvehicular
public rights-of-way at any time thereafter, or
in the future, are declared to be public trails. A
public trail is under the jurisdiction of the state
board of land and natural resources unless it
was created by or dedicated to a particular
county, in which case it shall be under the
jurisdiction of that county.
(©) All highways, roads, alleys, streets, ways,
bikeways, bridges, and trails in the State,
opened, laid out, or built by private parties and
dedicated or condemned to the public use, are
declared to be public highways or public trails
as follows:
(1) Dedication of public highways, roads,
alleys, streets, ways, lanes, bikeways,
bridges, or trails shall be by deed of convey-
ance naming the State as grantee in the case
of a state highway, road, alley, street, way,
lane, bikeway, bridge, or trail and naming
the county as grantee in the case of a county
highway, road, alley, street, way, lane, bike-
way, bridge, or trail. The deed of conveyance
shall be delivered to and accepted by the
director of transportation in the case of a
state highway, road, alley, street, way, lane,
bikeway, or bridge, or the board of land and
natural resources in the case of a state trail,
In the case of a county highway, road, alley,
street, way, lane, bikeway, bridge, or county
trail, the deed shall be delivered to and ac-
cepted by the legislative body of a count
provided that in every case where the high-
way, road, alley, street, way, lane, bikeway,
bridge, or county trail is constructed and
completed as required by any ordinance of
the county or any rule, regulation, or resolu-
tion thereof having the effect of law, the
legislative body of the county shall accept
the dedication of the same without exercise
of discretion; and
(2) Condemnation of public highways,
roads, alleys, streets, ways, lanes, bikeways,
bridges, or trails initiated by the State or
county pursuant to chapter 101, shall be by
final order of condemnation by a court; pro-

vides that “[aJll roads, alleys, streets, ways,
lanes, trails, bikeways, and bridges in the
State, opened, laid out, or built_by private
parties and dedicated or surrendered to the
public use, are declared to be public high-
ways or public trails.” (Emphasis added.)
Thus, in order to fall within the ambit of
HRS § 264-1(c), the structure at issue must
be: 1) built by private parties, and 2) consid-
ered either a road, alley, street, way, lane,
trail, bikeway, or bridge. Here, under the
first factor, it is undisputed that the seawall
“was built by unknown private parties” al-
most a century ago. And, under the second
factor, this court in prior cases has specifical-

vided that any private owner of a highway,
road, alley, street, way, lane, bikeway,
bridge, or trail may petition the mayor of the
county in which the highway, road, alley,
street, way, lane, bikeway, bridge, or trail is
located to initiate condemnation proceedings
if the highway, road, alley, street, way, lane,
bikeway, bridge, or trail is part of a public
road, ownership has not been exercised by
limiting use or access, or the State or county
has provided some form of maintenance to
the highway, road, alley, street, way, lane,
bikeway, bridge, or trail in the interest of the
public; provided further that a private owner
may only petition the mayor of a county after
the dissolution of the roads commission es-
tablished by Act 194, Session Laws of Ha-
waii 2016; provided further that in every
case where the highway, road, alley, street,
way, lane, bikeway, bridge, or trail is con-
structed and completed as required by any
ordinance of the county or any rule, regula-
tion, or resolution thereof having the effect
of law at the time of construction and com-
pletion, the highway, road, alley, street, way,
lane, bikeway, bridge, or trail shall be ex-
empt from meeting the construction stan-
dards in place at the time of condemnation
by the State or county.
(@ Ifa privately owned highway, road, alley,
street, way, lane, bikeway, bridge, or trail is
deemed to have been dedicated to or con-
demned by the State or county pursuant to
subsection (c), the State or county shall be
exempt for a period of three years from any
state laws or rules adopted pursuant thereto
that would require the State or county to per-
form construction, reconstruction, preserva-
tion, resurfacing, restoration, or rehabilitation
upon it, (e) All county public highways and
trails once established shall continue until va~
cated, closed, abandoned, or discontinued by a
resolution of the legislative body of the county
wherein the county highway or trail lies, All
state trails once established shall continue until
lawfully disposed of pursuant to the require-
ments of chapter 171.

ly included seawalls within the purview of
HRS § 264-1(c) if the seawall is used as a
public thoroughfare,

For instance, in Levy y. Kimball, 50 Haw.
497, 443 P.2d 142 (1968), a woman was in-
jured when she fell from a Waikiki seawall
while walking along its surface. The State
had an express easement for the purpose of
public travel over the seawall, and this court
determined that, because of this express
easement, the State had “the right and the
duty to keep it in repair.” Id. at 498, 443 P.2d
at 144, In addition, this court focused on the
State’s responsibility for the seawall under
Revised Laws of Hawaii 1955, Sec, 142-1, an
earlier iteration of HRS § 264-1. Id, at 499,
443 P.2d at 144, This court determined that
“{ajlthough a seawall is not expressly men-
tioned in the above enumeration, it can be
fairly implied that a seawall such as that
which is in question here which is used as a
public thoroughfare is included in the term
‘public highwasy’ [sic].” Id. As such, this
court noted that the State’s duty to maintain
a highway includes, inter alia, “a duty to
maintain the surface of the highway in a
condition reasonably safe for travel.” Id. at
499, 443 P.2d at 144-45 (quoting Restatement
(Second) of Torts § 849 (Am. Law Inst.
1965)).

More recently, in In re Banning, 73 Haw.
297, 812, 882 P.2d 724, 782 (1992), this court
reiterated that a seawall can fit within the
definition of “public highway” articulated in
ARS § 264-1: “In Levy v. Kimball, ... a
seawall used by the public as a thoroughfare
was considered to fit within the definition
of "public highway’ although it was not ex-
pressly defined as such in the Revised Laws
of Hawaii 1955, § 142-1, which was the pre-
decessor to the present HRS § 264-1.” As
such, the Banning court reaffirmed the con-
clusion in Levy that a seawall is a public
highway if it is used as a thoroughfare by the
public, Thus, Hawai'i law clearly places sea-
walls that are used as public thoroughfares

4, This court's interpretation of this statute and its
applicability to seawalls is consistent with the
common definitions of “way’ and “trail,” which
focus on the movement of people from place to
place, instead of the structure that the movement
is taking place on. For instance, way is defined

473

within the ambit of ways and trails as articu-
lated by HRS § 264-1(¢).4

In this case, it is undisputed that the sea-
‘wall has been used for decades by the public
as a path to access the beach. Testimony
from June Anderson, Robert Gentry, and
Guy Bishaw evidences that the public has
used the seawall as a walkway for decades.
The Majority, too, describes the seawall as a
public thoroughfare that “residents and visi-
tors of O‘ahu have been free to walk along
..+ to access the beach, shoreline, and ocean
in order to swim, surf, fish, and enjoy other
activities of island living.” As such, because
the seawall in this case is also a public thor-
oughfare, I would hold that its disposition is
governed by HRS § 264-1.

Despite the clear language of our case law,
the Majority insists that Levy and Banning
actually require that, for a seawall to fall
under HRS § 264-1, the State must hold “a
preexisting express easement for the specific
purpose of opening up a pathway for public
travel.” I disagree with this reading of the
ease law, and maintain that neither case ex-
pressly states that such a requirement is
necessary under HRS § 264-1. In Levy, this
court concluded that “[allthough a seawall is
not expressly mentioned in the above enu-
meration, it can be fairly implied that a sea-
wall such as that which is in question here
which is used as a public thoroughfare is
included in the term ‘public highwasy’ [sic].”
50 Haw. at 499, 448 P.2d at 144, The Majori-
ty takes the phrase “a seawall such as that
which is in question here” to mean a seawall
that the State already holds an express ease-
ment over. However, such a reading ignores
the rest of the sentence immediately succeed-
ing the phrase at issue: “a seawall such as
that which is in question here which is used
as_a public thoroughfare[.]” The underlined
phrase is a non-restrictive relative clause,
meaning that it defines the antecedent
noun—the seawall, See William Strunk Jr. &
E.B. White, The Elements of Style 3-4 (8d
ed. 1979), Notably, this non-restrictive rela-

as “‘a thoroughfare used or designed for traveling
or transportation from place to place.” Way,
Webster's Third New International _Dictionary
(1993), Trail is defined as “a course followed or

to be followed.” Trail, Webster's Third New In-
ternational Dictionary (1993),

474

tive clause does not contain information
about the necessity of an express easement;
instead, it explains that, in order for a sea-
wall to fall within HRS § 264-1, it needs to
be used as a public thoroughfare, Thus, the
Majority’s reading of the ruling in Levy is
not supported by the plain language of the
sentence at issue, or its grammatical struc-
ture,

Similarly, the Majority’s interpretation of
Banning is not supported by the language of
the case, The Majority points out that the
Banning court noted that “unlike the situa-
tion here, at the time of the trip and fall on
the seawall in Levy, the State already held
an easement in favor of the general public for
use of the seawall as a path of travel.” 73
Haw. at 312, 832 P.2d at 782, I disagree with
the Majority’s contention that the Banning
court determined that an express easement
is necessary for a seawall to be considered
under HRS § 264-1, Instead, the Banning
court was attempting to distinguish the facts
in Banning, where there was no trail
“opened, laid out, or built by private parties,”
from the facts in Levy, where the easement
in favor of the general public was evidence
that the seawall was built by private parties
and used as a path of travel by the public.
Banning, 73 Haw. at 812, 882 P.2d at 732
CHRS § 264-1 applies to trails which are
either ‘opened, laid out, or built by private
parties.’ (Emphasis added.) Here, the trus-
tees did not build or lay out a trail to the
general public.”),

As such, the Majority’s reliance on Levy
and Banning for its contention that seawalls,
separate and apart from other thoroughfares,
must have an express easement in favor of
the public in order to fall under HRS § 264-1
is misplaced. Neither case states that this is
a requirement for seawalls to be considered
under the statute,

B. The Seawall Was Not Dedicated To
The State.

The Majority concludes that the State has
an easement over the seawall through com-
mon law implied dedication. I disagree with
this conclusion and would hold instead that,
as a way or trail, the seawall can only be

dedicated to the State by fulfilling the re-
quirements of HRS § 264-1(c)(1),

1. Dedication pursuant to HRS § 264-
1a)

The plain language of HRS § 264-1(¢)(1)
provides a formal process for the dedication
of private ways or trails as public highways.
The statute states that all ways, trails, ete.
built by private parties can be dedicated as
public highways or public trails as long as
there is: a “deed of conveyance naming the
State as grantee in the case of a state high-
way or trail,” deliverance of the deed to the
Director of Transportation or the BLNR,
and aeceptance by the Director of Transpor-
tation or the BLNR. Notably, the language
of the statute plainly and unambiguously
states that dedication of ways and trails to
the public can only be done through a deed of
conveyance: “Dedication of public highways
or trails shall be by deed of conveyance ...”
(Emphasis added.)

In this case, there is nothing in the record
to indicate that there was a deed of convey-
ance naming the State as a grantee for the
disputed portions of the seawall. Likewise,
the record does not evidence that a deed was
delivered to and accepted by the BLNR. In
fact, it appears to be undisputed that there
was no formal delivery or acceptance of a
deed of conveyance for the seawall. Thus, the
seawall was not dedicated to the State under
the requirements of HRS § 264-1(c)(1).

2. Common law implied dedication

The Majority concludes that the State has
an easement over the seawall through com-
mon law implied dedication. In so doing, the
Majority places special importance on the
sporadic and disparate case law relating pe-
vipherally, but never directly, to the issue at
hand. I disagree with this approach and ulti-
mate conclusion for the following reasons,

a. HRS § 264-1(c)(1) abrogates common
law dedication with respect to
private ways and trails.

First, while I agree with the Majority that
the abrogation of common law is generally

disfavored,’ I assert that common law im-
plied dedication, as applied to private ways
and trails, is abrogated by the express lan-
guage of HRS § 264-1(c)(1). The statute pro-
vides that “(alll roads, alleys, streets, ways,
lanes, trails, bikeways, and bridges in the
State, opened, laid out, or built by private
parties and dedicated or surrendered to the
public use, are declared to be public high-
ways or public trails as follows.” (Emphasis
added.) The statute then provides two meth-
ods for transferring the private property to
the State, through dedication and surrender.
Under the dedication subsection, the statute
provides “[dledication of public highways or
trails shall be by deed of conveyance naming
the State as grantee.... The deed of convey-
ance shall be delivered to and accepted by

. the board of land and natural resources
in the case of a state trail.” (Emphases add-
ed.)

The statutory language is clear and unam-
biguous: the only way to dedicate a private
way or trail to the public is through a deed
of conveyance. See Shall, Black’s Law Dic-
tionary (10th ed. 2014) (defining shall as,
“fhjas a duty to; more broadly, is required
to” and noting that “[this is the mandatory
sense that drafters typically intend and that
the courts typically uphold”). Although the
statute does not state that implied dedication
is abolished as it applies to ways and trails,
the sensible interpretation of the statute’s
express language—limiting dedication to in-
stances where deeds of conveyance are deliv-
ered and accepted—has that result. See Min-
neapolis Fire & Marine Ins, Co, y. Matson

5. The Majority places special emphasis on “the
importance of the common law,” and cites to a
number of cases from Hawai'i and other jurisdic-
tions to highlight this importance, While I agree
with the Majority that abrogation of common law
is disfavored, I also note that common law, by its
nature, is meant to grow and change with the
times. See In re Estate of Chun Quan Yee Hop,
52 Haw. 40, 43, 469 Pl2d 183, 185 (1970)
(‘[Common law] does not remain in a somnolent
and sedentary state. We have repeatedly main-
tained that ‘(Qhe genius of the common law,
upon which our jurisprudence is based, is its
capacity for orderly growth.’” (quoting Lum v.
Fullaway, 42 Haw. 500, 502 (1958))); Welsh v.
Campbell, 41 Haw. 106, 120 (1955) (“The com-
mon mon Tew does not consist of absolute, fixed, and
inflexible rules, but rather of broad and compre-
hensive principles based on justice, reason, and
common sense.... These principles are suscepti-

415

Navigation Co., 44 Haw. 59, 67, 852 P.2d 385,
840 (1960) (“Although a rule of strict con-
struction is applied to a statute in derogation
of the common law, it should nevertheless be
construed sensibly and in harmony with the
purpose of the statute, so as to advance and
render effective such purpose and the inten-
tion of the legislature.”).

b. Hawai‘i courts have never applied im-
plied dedication to transfer interests in
private ways or trails to the State.

Second, Hawai'i courts have not applied
implied dedication to public highways, and
have instead relied exclusively on the express
language found in HRS § 264-1(c)(1) when
determining whether private land may be-
come a public highway.’ For example, in
Maui Ranch Estates Owners Ass’n y. Maui
Cty, 6 Haw. App. 414, 724 P.2d 118 (1986),
the ICA addressed whether a private road
could become a public highway under the
theory of implied dedication, An association
of landowners brought suit against Maui
County claiming that, under the theory of
implied dedication, a section of the road had
become a county highway because the county
had maintained and repaired the road for
over sixty years. Id. at 416-18, 724 P.2d at
120-22. The ICA disregarded this argument,
holding that “the doctrine of common law
dedication does not convert a private road-
way into a county highway.” Id, at 421, 724
P.2d at 128, The ICA noted that, while com-
mon Jaw dedication can be accomplished im-
pliedly, “before the municipality can be held

ble of adaptation to new conditions, interests,
relations, and usages as the progress of society
may require,” (quoting Miller v. Monsen, 228
Minn. 400, 37 N.W.2d 543, 547 (1949))); Territo-
ty_v. Alford, 39 Haw. 460, 465 (1952) ("{Ihe
common law is not immutable but flexible and by
its own principles adapts itself to varying condi-
tions,”),

6, I note that The King v. Cornwell, 3 Haw. 154
(1869), does contemplate implied dedication of
Kingdom highways. However, Cornwell was de-
cided in 1869, over a dozen years before The
Highways Act was enacted, which required that
a government official formally accept all public
highway dedications, As such, I assert that Corn-
well's holding as to implied dedication of public
highways was superceded by statute.

476

responsible for maintenance, repair, and lia-
bility there must be unequivocal acceptance
by the municipality.” Id. (citing Kelly v. City
of Bethany, 588 P.2d 567 (Okla. 1978)).

In making this decision, the ICA looked to
HRS § 264-1 (1985) and determined that the
statute’s language pertaining to dedication
plainly required express acceptance on the
part of the county, even if other actions by
the county might imply acceptance:

Association argues, however, that al-
though there was no official resolution by
the council, acceptance was evidenced by
the fact that County employees maintained
and repaired the road from 1919 to 1981,
and it was registered on their “Index of
County Roads” until the latter date. They
argue that these acts by County employees
manifested acceptance of [the road] as a
county road.

However, under HRS § 264-1 only the
county council is authorized to accept dedi-
cation of a private road. The acts of Coun-
ty’s employees are not evidence of the
ecouncil’s acceptance. See Santos v. Per-
reira, supra, A municipality’s legislative
body can only act officially through ordi-
nance or resolution or by voting on a mo-
tion made at a council meeting. Life of the
Land v, City and County of Honolulu, 61
Haw. 390, 428, 606 P.2d 866, 887 (1980).

Id, at 422, 724 P.2d at 124. The ICA ex-
plained that HRS § 264-1 “adopts the com-
mon law principle that a private roadway
may be surrendered or abandoned to public
use,” but that “the roadway does not become
a county highway unless and until it is ac-
cepted by the legislative body.” Id. at 422,
724 P.2d at 128.

7. The distinction between a private road dedicat-
ed as a public highway and a private road with
an easement dedicated to the public is blurry at
best. The court in Wemple II appears to acknowl-
edge such a distinction; however, Wemple I also
acknowledges that, in effect, these two “types” of
dedication have the same outcome for the owner
of the easement or dedication, namely liability
and responsibility for maintenance and repairs.
Id. at 397, 83 P.3d at 112 (“Whether an ease-
ment exists is significant because, as this court
has held, ‘an owner of an easement has the right
and the duty to keep it in repair. The owner of
the easement is liable in damages for injuries

Similarly, in Wemple ex rel. Dang v. Dah-
man, 103 Hawai'i 385, 392-93, 88 P.8d 100,
107-08 (2004) (Wemple I), this court held
that “HRS § 264-1 (Supp. 1990) prevents a
private road from becoming a ‘county high-
way’—and thereby subjecting the county to
liability for injuries incurred thereon—with-
out express acceptance of the private road by
the County Council.” In Wemple, a child was
struck by a car on a private road in the
Kapahulu area, and the mother of the child
brought a negligence action against the own-
ers of the private road. The ICA held that
the owners of the private road were not
liable because the road had “been impliedly
dedicated to the general public as a road
easement, is subject to state and county traf-
fic control regulations, and is maintained or
repaired by the county[.!” Wemple ex rel,
Dang v. Dahman, 102 Hawai'i 27, 30, 72 P.38d
499, 502 (App. 2002) (Wemple I), rev’d, 108
Hawai'i 385, 88 P.8d 100 (2004). In coming to
this conclusion, the ICA determined that “a
privately owned road that has not been statu-
torily dedicated ... to public use by technical
compliance with HRS § 264-1 may still be
impliedly dedicated ... to public use for a
general roadway easement.” Id, at 53, 72
P.8d at 525,

This court reversed the ICA’s decision,
holding that the private roadway was not a
county highway for which the county was
responsible for maintenance, repair, or lia-
bility. Specifically, this court held that the
private roadway was not a county highway
because “the County [had] not expressly ac-
cepted the private roadway as required by
HRS § 264-1[.)” Wemple II, at 398, 88 P.8d
at 108, Thus, this court refused to apply the
theory of implied dedication to transfer a
privately owned road to the county as a
county highway.”

caused by failure to keep the easement in re-
pair.’” (quoting Levy, 50 Haw. at 498, 443 P.2d
at 144)), Since easements appear to be a subcate-
gory within the broader category of dedications,
and are subject to the same requirements and
restrictions, I would clarify Wemple I to the
extent that it distinguishes between the two. See
Maui Ranch, 6 Haw, App. at 420-21, 724 P.2d at
123 (defining dedication as “{tJhe appropriation
of land, or an easement therein, by the owner,
for the use of the public, and accepted for such
use by or on behalf of the public” (emphasis
added)); 23 Am, Jur. 2d Dedication § 1 (2017)
(“[A] ‘dedication’ is the setting aside of land, or

Significantly, although both Maui Ranch
and Wemple II discuss dedication as it ap-
plies to county highways, the same analysis
is applicable to State highways. HRS § 264-
1(©)() provides that both the county and the
State must accept the deed of conveyance
when there is a dedication of public highways
or trails:

Dedication of public highways or trails
shall be by deed of conveyance naming the
State as grantee in the case of a state
highway or trail and naming the county as
grantee in the case of a county highway or
trail, The deed of conveyance shall be de-
livered to and accepted by the director of
transportation in the case of a state high-
way or the board of land and natural re-
sources in the case of a state trail. In the
case of a county highway or county trail,
the deed shall be delivered to and accepted
by the legislative body of a county.

(Emphasis added.) As such, the plain lan-
guage of HRS § 264-1(c)(1) provides the
same dedication requirements for both the
State and the county,

For these reasons, I disagree with the
Majority’s conclusion that the seawall was
impliedly dedicated to the State. I assert that
the plain language of HRS § 264-1(c)(1) and

of an interest therein, to the public use or a form
of transfer by an owner to the public of a fee or
lesser interest in land.” (emphasis added)); Dedi-
cation, Black’s Law Dictionary (10th ed. 2014)
(defining dedication as a “donation of land or
creation of an easement for public use” (empha
sis added)), As such, private roads dedicated as
public highways and private roads with a dedi-
cated easement to the public should be analyzed
in the same way.

8. The Majority cites to a number of cases to
support its proposition that Hawaii courts “rec-
ognize common law implied dedication as a
method of transferring interests in property to
the State and have repeatedly noted that formal
acceptance is not a prerequisite.” While it is true
that Hawai'i courts have recognized common
law implied dedication, none of the cases the
‘Majority lists have applied implied dedication in
the context of private ways or trails. See Ban-
ning, 73 Haw. at 304-11, 832 P.2d at 728-32
(declining to apply implied dedication for an
accreted parcel of land); City & Cty. of Honolulu
y. Boulevard Props. Inc., 55 Haw. 305, 306-07,

* 317 P.2d 779, 780-81 (1973) (holding that, in the
context of the laying out of a subdivision of land,
implied dedication can occur “when land is sub-
divided into building lots and streets, a plat
showing such subdivision is recorded, and sales

477

our case law clearly abrogate common law
dedication with regard to private ways or
trails8 Because the dedication requirements
of HRS § 264-1()(1) are not met, I would
hold that the seawall was not dedicated to
the State.

C. The Seawall Was Not Surrendered To
The State.

The Majority concludes that the seawall
was not surrendered to the State. I agree
with this conclusion but not with the Majori-
ty’s analysis. As set out below, I conclude
that, pursuant to HRS § 264-1(c)(2) and aec-
companying statutes, the seawall could not
be surrendered to the State without the
State’s formal approval.

1. Surrender pursuant to HRS § 264-
1@)@)

Unlike HRS § 264-1(c)(1), which set out
nearly identical requirements for dedication
to both the State and the counties, HRS
§ 264-1(c)(2) provided different requirements
for surrender to the State and surrender to
the counties. For both the State and the
counties, private ownership of the highway or
trail must have ceased for at least five years.

of the building lots shown on the plat are
made”); Wemple II, 103 Hawai'i at 397, 83 P.3d
at 112 (holding that the ICA erred in concluding
that the public had an easement over the private
roadway). In fact, as mentioned above, case law
relied upon by the Majority expressly states that
private ways or trails cannot be dedicated to the
State or county without the government's formal
approval. See Maui Ranch, 6 Haw. App. at 421-
22, 724 P.2d at 123 (“In the light of the provi-
sions of Hawaii Revised Statutes (HRS) § 264-1
(1985), we hold that the doctrine of common law
dedication does not convert a private roadway
into a county highway ... unless it is adopted as
such by resolution of the legislative body of the
county.”); Wemple Il, 103 Hawai'i at 393, 83
P.3d at 108 (“In the instant case, the County has
not expressly accepted the private roadway as
required by HRS § 264-1; therefore, the private
roadway is not a county highway.”). As such,
while T agree with the Majority that Hawai'i law
“recognizels} common law implied dedication as
a method of transferring interests in property to
the State,” I maintain that Hawai'i law does not
recognize common law implied dedication with
respect to private ways or trails that fall under
the authority of HRS § 264-1.

478

Additionally, but for the counties only, adop-
tion through legislative resolution was re-
quired:

Surrender of public highways or trails
shall be deemed to have taken place if no
act of ownership by the owner of the road,
alley, street, bikeway, way, lane, trail, or
bridge has been exercised for five years
and when, in the case of a county highway,
in addition thereto, the legislative body of
the county has, thereafter, by a resolution,
adopted the same as a county highway or
‘rail

(Emphasis added.)

In its opinion, the ICA applied the ele-
ments of surrender, pursuant to HRS § 264-
1(c)@), to the seawall, and concluded that “it
is undisputed that the Seawall was built by
private parties and completed by 1980,” and
that “no owners of the Seawall exercised
ownership over the Seawall for at least five
years prior to litigation.” Gold Coast _Neigh-
borhood Ass'n y. State, 186 Hawai'i 340, 355,
861 P.3d 1248, 1258 (App. 2015). Accordingly,
the ICA held that the elements articulated in
the statute had been met and that the State
had acquired portions of the seawall through
surrender, Id.

I conclude that the ICA gravely erred in
this holding, but for different reasons than
those relied upon by the Majority. Based on
the legislative history of HRS § 264-1, the
clear and unambiguous language of HRS
§§ 171-80, 26-7, and 107-10, and Hawai'i case
Jaw, I would hold that State approval is
required before private ways or trails may be
surrendered to the State. Significantly, the
recent amendments reflect the legislature’s
attempt to resolve issues similar to what this
court is addressing in the current case,
namely the transfer of private roads used by
the public to government entities.

a. The legislative history of HRS § 264-1
supports a conclusion that State approval
is required for surrender of private ways,

As noted in Section IV.A.1, The Highways
Act of 1892 was the predecessor to HRS
§ 264-1, and provided for dedication, aban-
donment, and surrender of private roads to
the public:

Any road, alley, street, way, lane, court,
place, trail or bridge laid out, constructed,
opened or maintained by individuals or
corporations as a highway, may become a
public highway by dedication or abandon-
ment, or surrender thereof to general use
by such individual or corporation; provided
that the same shall be accepted or adopted
by the Minister of Interior,

1892 Haw. Sess, Laws Act 47, § 3 at 68-69.
Significantly, The Highways Act required
that the Minister of the Interior accept or
adopt any dedication or surrender of private
roads, Id, When the Gold Coast litigation was
initiated, HRS § 264-1 preserved this final
approval requirement for both the State and
the counties when private roads were dedi-
cated to the public, but preserved final ap-
proval for the counties only, and not the
State, when private roads were surrendered
to the public.

However, in 2016, while this case was
pending before this court, the legislature
amended HRS § 264-1 again. Of significance
for our analysis, one of the amendments to
HRS § 264-1 omits the section on surrender
entirely. In its place, a section on condemna-
tion was added:

(2) Condemnation of public highways,
roads, alleys, streets, ways, lanes, bike-
ways, bridges, or trails initiated by the
State or county pursuant to chapter 101,
shall be by final order of condemnation by
a court; provided that any private owner of
a highway, road, alley, street, way, lane,
bikeway, bridge, or trail may petition the
mayor of the county in which the highway,
road, alley, street, way, lane, bikeway,
bridge, or trail is located to initiate con-
demnation proceedings if the highway,
road, alley, street, way, lane, bikeway,
bridge, or trail is part of a public road,
ownership has not been exercised by limit-
ing use or access, or the State or county
has provided some form of maintenance to
the highway, road, alley, street, way, lane,
bikeway, bridge, or trail in the interest of
the public; provided further that a private
owner may only petition the mayor of a
county after the dissolution of the roads
commission established by Act 194, Session
Laws of Hawaii 2016; provided further that

in every case where the highway, road,
alley, street, way, lane, bikeway, bridge, or
trail is constructed and completed as re-
quired by any ordinance of the county or
any rule, regulation, or resolution thereof
having the effect of law at the time of
construction and completion, the highway,
road, alley, street, way, lane, bikeway,
bridge, or trail shall be exempt from meet-
ing the construction standards in place at
the time of condemnation by the State or
county.

Of note, this amendment provides that the
State and county may initiate condemnation
proceedings, and that private owners of a
way or trail may petition the mayor of his or
her county to initiate condemnation proceed-
ings. The mayor, at his or her discretion,
may initiate condemnation proceedings if all
of the listed requirements are met. Thus,
these new amendments give the government.
more control over the road acquisition pro-
cess than previously afforded in the earlier
versions of HRS § 264-1.

‘The legislature explained that the purpose
of this amendment was to resolve the confus-
ing nature of the current road acquisition
system:

‘The legislature finds that while federal,
state, and county agencies maintain juris-
diction over, and are responsible for, the
repair and maintenance of the majority of
highways, streets, and roads throughout
Hawai'i, there are numerous roads
throughout the State that are privately
owned or whose ownership has been called
into question.... This has resulted in
questions regarding who is responsible for
the repair and maintenance of these roads,
many of which are regularly used for ve-
hicular traffic.

The legislature further finds that since
these private roads are not owned by a
governmental entity, or their ownership is
being disputed, they often do not receive
proper repair and maintenance. Although
these roads are often used by, and are of
benefit to the public, the public does not.
realize that the road is not owned by a
governmental agency. This creates difficul-
ties for members of the public and govern-

479

ment agencies when individuals report re-
pair or maintenance issues.

The legislature also finds that while
counties have policies and procedures to
assist owners with the repair and mainte-
nance of private roads, these policies and
procedures are only applicable when the
county can determine or locate the actual
owner of the road. Additionally, the owners
of private roads may seek government as-
sistance because they may not have the
expertise, equipment, or ability to coordi-
nate services necessary to address road
ownership and maintenance issues,

Finally, the legislature finds that the
cost to bring many of these private roads
up to code is very high and should not be
borne solely by the counties,

The purpose of this Act is to provide a
means to resolve the situation by, among
other things:

(1) Establishing a temporary roads
commission within the department of
transportation to, among other things,
review studies on disputes regarding pri-
vate roads, provide an opinion on the
ownership of certain private roads, ad-
vise the appropriate legislative body of
the determination of ownership of the
private road, and recommend action to
the appropriate legislative body, includ-
ing the initiation of condemnation pro-
ceedings as appropriate;

(2) Expanding the State and counties’

authority to condemn public roads;

(8) Allowing private owners of road-

ways to petition the mayor of the county

in which the roadway is located to begin
condemnation proceedings if certain con-
ditions are met[.]
HB. 2049, H.D. 2, 8.D. 2, 28th Leg,, Reg.
Sess. (2016). Significantly, the recent amend-
ments reflect the legislature’s attempt to re-
solve issues similar to what this court is
addressing in the current case, namely the
transfer of private roads used by the public
to government entities.
While the recent amendments to HRS
§ 264-1 cannot be applied to this case, they
do inform our understanding of the larger
view of this legislation, which has gone
through many iterations in its century of

480

existence. Our understanding of HRS § 264-
1 is further informed by HRS §§ 171-80, 26-
7, and 107-10, which, when read together,
provide an additional element to the theory
of surrender,

b. HRS §§ 171-30, 26-7, and 107-10 should
be read in conjunction with the sur-
render statute articulated in HRS
§ 264-1(c)(2).

This court utilizes the following standards
when interpreting different statutes that re-
late to the same subject matter:

First, legislative enactments are pre-
sumptively valid and should be interpreted
in such a manner as to give them effect.
Second, laws in pari materia, or upon the
same subject matter, shall be construed
with reference to each other. What is clear
in one statute may be called in aid to
explain what is doubtful in another. Third,
where there is a plainly irreconcilable con-
flict between a general and a specific stat-
ute concerning the same subject matter,
the specific will be favored, However,

where the statutes simply overlap in their
application, effect will be given to both if
possible, as repeal by implication is disfa-
vored.

Pofolk Aviation Haw., Ine. v. Dep’t of
Transp., 186 Hawai'i 1, 6, 354 P.8d 436, 441
(2015) (quoting Gillan _v. Gov't Emps. Ins.
Co., 119 Hawaii 109, 114, 194 P.3d 1071, 1076
(2008)),

HRS § 171-80 (1993) provides, in part,
that: “The board of land and natural re-
sources shall have the exclusive responsibili-
ty, except as provided herein, of acquiring,

No real property or any right, title, or
interest therein shall be acquired by agree-
ment, purchase, gift, devise, eminent do-
main, or otherwise, for any purpose, by the
State or any department, agency, board,
commission, or officer thereof, without the
prior approval of the attorney general as
to form, exceptions, and reservations.

(Emphases added.)* Finally, HRS § 26-7
(1998) provides the State with a final check
for land acquisitions: “The department of the
attorney general shall ... approve as to le-
gality and form all documents relating to the
acquisition of any land or interest in lands by
the State[.]”

These statutes, read individually and col-
lectively, require State approval before land
may be acquired by the State. Instead of
conflicting with HRS § 264-1, these statutes
are all on the same subject matter—acquisi-
tion of land by the government—and should
be construed in reference to each other. In
other words, HRS §§ 26-7, 171-30, and 107-
10 should be construed as adding an addi-
tional or final element to the theory of sur-
render already articulated in HRS § 264-
1@@).

Hawai'i courts have not considered how
HRS §§ 26-7, 171-80, and 107-10 should be
construed when private land is surrendered
to the State. However, the Hawai'i ICA has
held that private roads may not be surren-
dered to the State without State approval.

c, Hawai‘i case law suggests that State
approval is necessary for private roads
to be surrendered to the State.

Santos v. Perreira, 2 Haw. App. 387, 633

including by way of dedications: (1) All real
property or_any interest therein and the
improvements thereon, if any, required by
the State for public purposes ...” (Emphas-
es added.) Similarly, HRS § 107-10 (Supp.
2001) grants the attorney general broad pow-
ers over State land acquisitions:

9. The plain and unambiguous language of HRS

§ 107-10 is supported by its committee report:

The purpose of the Bill is to provide that no

real property or any interest therein shall be

acquired by the Territory of Hawai'i or any of

its agents without prior approval of the attor-
ney general.

P.2d 1118 (1981), directly addresses the issue
of State approval for surrender of a highway
to the State. The Santoses filed a complaint
for injunctive relief against the Perreiras,
seeking a judgment granting the Santoses an
easement over the Perreira’s land. Id. at 390,
683 P.2d at 1122. One of the theories ad-

Your committee feels that the acquisition of
real property or any interest therein is a matter
of policy and not of law. Your Committee,
therefore, has amended §.B. No. 707 to re-
quire exceptions and reservations.

S. Stand. Comm. Rep. No. 195, in 1959 Senate
Journal, at 693.

vanced by the Santoses was that the dirt
road over which they were seeking an ease-
ment was a surrendered public road pursu-
ant to HRS § 264-1. Id. The ICA rejected
this theory, concluding that a public highway
may only be surrendered to the State with
the State’s acceptance:

The Santoses contended that under HRS

[§ ] 264-1 (1976) a public highway may be

surrendered to the state without the

state’s acceptance. We disagree. A public
highway is not a state highway unless it is
designated for inclusion in the State High-

way System under HRS [§ ] 264-41 (1976).

All public highways which are not state

highways are county highways or they are

not public highways. See HRS [§ ] 264-1

(1976). A highway is not a county highway

unless it is accepted or adopted as such by

the county council. There is no evidence in
the record of the designation, acceptance,
or adoption of this road by the state or the
county.
Id, In other words, the ICA coneluded that a
private road could not be surrendered to the
State without the State designating—or ap-
proving—the surrendered road as a public
highway.

In the present case, the cireuit court ad-
dressed the holding in Santos, concluding
that it “was overruled sub silentio by the
Hawai'i Supreme Court’s decision in In re
Application of Banning, 73 Haw. 297, 882
P.2d 724 (1992),” and that the State’s formal
acceptance is not required in order to trans-
fer ownership of land by surrender. Howev-
er, Banning neither mentions Santos nor ad-
dresses, either directly or peripherally, the
holding in Santos. Indeed, Banning does not.
consider a situation, such as the one present-
ed in Santos or this case, in which a private
party is attempting to surrender land to the
State and the State either has not formally
approved the surrender or is opposed to the
surrender, Additionally, Santos has never
been explicitly overruled and is still consid-
ered controlling law.

Given the legislative history of HRS § 264-
1, the element of State approval found in
HRS §§ 171-30, 26-7, and 107-10, and the
10. It is widely accepted that seawalls ‘“exacer-

bate coastal erosion and beach loss.” Lance D.

481

clear case law on point, I would hold that the
seawall was not surrendered to the State.
The Majority reaches the same conclusion,
but through different means.

2, The Majority’s surrender analysis

The Majority concludes that the seawall
‘was not surrendered to the State because the
State did not hold a preexisting express ease-
ment over the seawall. I disagree with the
Majority’s analysis for the following reasons.

First, I disagree with the Majority’s con-
clusion that the seawall does not fall under
the purview of the surrender statute. Citing
Levy and Banning, the Majority concludes
that HRS § 264-1(¢)(2) includes seawalls only
when the seawall “is subject to a preexisting
express easement in favor of the State clear-
ly opening the seawall up as a pathway for
public travel” and that the seawall at issue in
this case is not subject to such an easement
and therefore not subject to the statute,
However, as noted in Section IV.A.2., such a
requirement is absent from the statutory lan-
guage and case law. Instead, Hawai'i case
law clearly states that a seawall is considered
under HRS § 264-1(¢)(1)-(2) if the seawall is
“ased as a public thoroughfare.” Levy, 50
Haw, at 499, 443 P.2d at 144; Banning, 73
Haw. at 812, 882 P.2d at 782; see supra
Section IV.A.2. As such, the Majority’s cre-
ation of an additional element for surrender
not found in the plain and unambiguous stat-
utory language or Hawaii’s clear case law is
misplaced.

Second, the Majority’s ultimate conclusion,
that the State does not own the seawall
pursuant to surrender but is responsible for
its maintenance and repair pursuant to im-
plied dedication, leads to an unfair result: the
Gold Coast property owners maintain owner-
ship of the seawall that protects their private
property while the State must foot the bill
for its repair and upkeep. Under the Majori-
ty’s analysis, the State would not even be
able to tear down the seawall if it decides, for
instance, that the seawall is too costly to
maintain or that it is contributing to the
erosion of Waikiki’s coastline.” Under the

Collins, Segmentation and Seawalls: Environ-
mental Review of Hawaii's Coastal Highways in

482

Majority’s conclusion, the property owners
reap all of the rewards, namely free property
protection in perpetuity, while the public
pays for this protection, This approach ap-
pears not only disparate but unjust.

The Majority responds to these concerns
by asserting that the parties “may” contrib-
ute jointly to the costs for repair and mainte-
nance. This suggestion, however, is just that
and, without more, Gold Coast is under no
legal obligation to “contribute” to the repairs
and maintenance of the seawall. Indeed, it is
hard to imagine that the members of Gold
Coast would voluntarily contribute to the
seawall’s repair and upkeep when they have
spent the past decade arguing that such a
duty, and ultimate financial obligation, lies
with the State. Moreover, without describing
how such a contributory system would work,
or providing a calculation to determine the
parties’ contributory shares, the Majority’s
suggestion—that Gold Coast “may” contrib-
ute to the repair and maintenance—is likely
to generate confusion at best, and further
litigation at worst, as the parties attempt to
resolve the issue of contributions.

Vv. CONCLUSION

The Majority holds that the State is re-
sponsible for the seawall. In so doing, the
Majority paints an idyllic picture of the Gold
Coast seawall benefitting the public as a
thoroughfare that has for generations fur-
thered the public’s recreational pleasures of
“island living.” In fact, the Majority asserts
that the “very core of this case” is the “pres-
ervation of access to Hawaii’s shoreline.”
However, the Majority’s portrayal of the sea-
wall glosses over the fact that it was built by
property owners in order to protect their
private property from a tempestuous sea,
that the seawall continues to stand on private
property and to serve that purpose, and that,
instead of preserving access to the coastline,

the Era of the Anthropocene, 20 Haw. Bar J. 89,
90 (2016); see also Dep't of Land and Nat, Res.,
Hawaii Coastal Erosion Management Plan (COE.
MAP) 4 (“Studies conducted at the University of
Hawaii show that hardening the shoreline of
Oahu where there is chronic coastal erosion
causes beach narrowing and beach loss....
Beach narrowing and loss, and shoreline har-
dening, also severely restrict public access to

the seawall is likely contributing to its ero-
sion,

As such, the Majority’s conclusion requires
the public to pay for the repair and mainte-
nance of structures that simultaneously pro-
tect private property and contribute to the
chronic coastal erosion facing Waikiki beach-
es. Far from benefitting the general public,
the Majority’s decision benefits coastal prop-
erty owners, and opens the door for other
private property owners to receive free ser-
vices from the State for the miles of seawalls
built to protect private oceanfront develop-
ment,

For this reason and the many other rea-
sons previously enumerated, I dissent from
the Majority’s conclusion that the State ac-
quired an easement over the seawall through
common law dedication, Instead, I would
hold that, under the statutory framework of
HRS § 264-1 and associated statutes, the
seawall was neither dedicated nor surren-
dered to the State. As such, I would reverse
the judgment of the ICA in this regard.

403 P.3d 259
STATE of Hawai‘i, Respondent/Plaintiff-
Appellee,
v
Donald NICOL, Petitioner/Defendant-
Appellant.
SCWC-16-0000681
Supreme Court of Hawaii.

AUGUST 80, 2017

state conservation lands and natural re-
sources,”); Sophie Cocke, Walls No Match for
Waves, Honolulu Star-Advertiser, Feb. 24, 2016,
at A10 (“Scientists say that Hawaii’s legacy of
allowing property owners to build too close to
the shoreline and later erect seawalls to protect
their properties has led to the loss of many of
Hawaii's beaches.”).

Brook Hart and Chad N, Enoki, Honolulu,
for petitioner,

Keith M. Kaneshiro and Stephen K. Tsu-
shima, Honolulu, for respondent,

484

RECKTENWALD, C.J., NAKAYAMA,
MeKENNA, POLLACK, AND WILSON,
Jd.

OPINION OF THE COURT BY
POLLACK, J.

Donald Nicol was charged in the Circuit
Court of the First Circuit (circuit court) with
multiple counts of sexual assault. Due to
pretrial delay, the circuit court dismissed the
ease without prejudice pursuant to Hawai'i
Rules of Penal Procedure (HRPP) Rule 48
(2012) and the three-factor analysis of State
y. Bstencion, 63 Haw. 264, 625 P.2d 1040
(1981). Nicol appealed the circuit court’s or-
der to the Intermediate Court of Appeals
(ICA), arguing that the cireuit court erred in
dismissing the case without prejudice, there-
by permitting reprosecution of the charges.
The ICA dismissed the appeal for lack of
appellate jurisdiction based on its conclusion
that the Hawaii Revised Statutes did not
permit Nicol’s appeal. Thus, the sole issue
before this court is whether a defendant has
the right to appeal a cireuit court order
dismissing a case without prejudice,

We hold that, under Hawaii Revised Stat-
utes (HRS) § 641-11 (Supp. 2004), a defen-
dant may appeal from an order of the circuit
court dismissing the proceedings without
prejudice, and the ICA therefore possessed
jurisdiction over Nicol’s appeal. Accordingly,
we remand the case to the ICA for resolution.
of the merits of Nicol’s appellate claim.

I, CIRCUIT COURT PROCEEDINGS

On October 14, 2014, Nicol was charged by
indictment with four counts of sexual assault
in the first degree in violation of HRS § 707-
730(1)(b) (Supp. 2018), four counts of sexual
assault in the second degree in violation of
HRS § 707-781(1)(a) (Supp. 2013), and two
counts of sexual assault in the fourth degree

1, The indictment also reflects three additional
counts of sexual assault in the first degree that
were stricken. Additionally, one of the second-
degree sexual assault counts was subsequently
dismissed by the circuit court by order dated
April 13, 2015.

2, The record reflects that the Honorable Colette
Y. Garibaldi was assigned to preside over the

in violation of HRS § 707-783(1)(a) (Supp.
2018)

On October 20, 2014, at arraignment, Nicol
pleaded not guilty to the charges. Trial was
continued multiple times to resolve issues
relating to discovery and various motions in
limine, to secure the presence of anticipated
witnesses, to rule on Nicol’s motion to dis-
miss the indictment based on insufficient evi-
dence, to reassign the case following recusal
of the presiding judge, and to address the
court’s scheduling conflicts.” For certain peri-
ods of this time, Nicol waived his right to a
speedy trial.

On June 7, 2016, Nicol moved to dismiss
the indictment based in part on alleged viola-
tions of his rights under HRPP Rule 48,
which requires a court to dismiss criminal
charges when trial has not commenced within
six months from the date of arrest if bail is
set. Nicol further contended that, pursuant to
the three-factor test set forth by this court in
State_v. Estencion, 63 Haw. 264, 625 P.2d
1040 (1981), he was entitled to dismissal with
prejudice.®

On September 16, 2016, the circuit court
entered its Order Granting in Part and De-
nying in Part Defendant Donald Nicol’s Mo-
tion to Dismiss Indictment With Prejudice
(Order of Dismissal). With respect to Nicol’s
argument based on HRPP Rule 48, the court
concluded that the applicable period of delay
exceeded six months, thereby violating
HRPP Rule 48 and requiring dismissal of the
charges. The circuit court further concluded
that dismissal without prejudice was the ap-
propriate remedy based on its application of
the three-factor test set forth in Estencion,
68 Haw. 264, 625 P.2d 1040.

Il. ICA PROCEEDINGS

Following Nicol’s appeal of the Order of
Dismissal to the ICA, the State filed a Coun-
terstatement of Jurisdiction arguing that the

proceedings following the recusal of the Honor-
able Dexter D, Del Rosario, with the exception of
the motion to dismiss proceeding, which was
held before the Honorable Paul B.K. Wong.

3. Nicol also contended that the delay in com-
mencing the trial violated his state and federal
constitutional rights to a speedy trial, which ar-
gument the circuit court rejected.

ICA lacked appellate jurisdiction to review
the circuit court’s order. The State contended
that the right of appeal in a criminal case
must be granted by statute and that no
statute afforded Nicol the right to appeal an
order dismissing proceedings without preju-
dice. The State contended that circuit court
defendants may only appeal from the follow-
ing: (1) “the sentence of the court in a crimi-
nal case” based on HRS § 641-11 (Supp.
2004), which sets forth the right of appeal in
civeuit court criminal cases; (2) a certified
interlocutory order pursuant to HRS § 641-
17 (1998); 4 or (8) an order denying a motion
to dismiss based on double jeopardy princi-
ples. According to the State, none of these
bases applied in Nicol’s case to permit the
ICA’s review of the Order of Dismissal.

In Nicol’s Statement of Jurisdiction, he
submitted that the ICA did in fact have
Jurisdiction to review the merits of his ap-
peal. Nicol maintained that HRS § 641-11
contained an “ambiguity as to what consti-
tutes an appealable judgment or order of the
circuit court.” Nicol stated that this court
had interpreted HRS § 641-12 (Supp. 2004)
to grant district court defendants the right to
appeal a district court order dismissing
charges without prejudice. Nicol also assert-
ed that this court had previously held that,
pursuant to HRS § 641-13 (Supp. 2006), the
State may appeal an order of dismissal from
both the district and circuit court in criminal
cases,

Nicol thus reasoned that the ability of a
district court defendant and the State to
appeal an order of dismissal shows that an
order dismissing proceedings without preju-
dice constitutes a final order or decision
which is ripe for appeal. Nicol also contended
that an interpretation of the statutes as pro-
hibiting circuit court defendants from appeal-
ing orders of dismissal yet granting such
right of appeal to similarly-situated district
court defendants would result in a violation
of Nicol’s constitutional right to equal protec-

4, The State further submits on certiorari that
Nicol had the right to seek the circuit court's
permission for an interlocutory appeal under
HRS § 641-17 in this case, but that he failed to
do so. Nicol responds that he had no such right
because interlocutory review of an order termi-
nating a case would be inappropriate and HRS

485

tion of the laws. According to Nicol, HRS
§ 641-11 must be interpreted in a manner
that does not lead to this “unreasonable,”
“absurd,” and “unconstitutional” result.

On January 11, 2017, the ICA issued an
Order Dismissing the Appeal for Lack of
Appellate Jurisdiction (Order Dismissing the
Appeal). The ICA stated that the case was
dismissed without prejudice by the circuit
court based on a violation of HRPP Rule 48,
and, therefore, “no sentence ha{d] been im-
posed.” The ICA thus concluded that it
lacked appellate jurisdiction “because there
is no Sudgment’ in the record on appeal as
defined by [HRS] § 641-11 (2010).” As a
result, the ICA determined that Nicol was
not entitled to a review of the circuit court’s
Order of Dismissal under HRS § 641-11 and
dismissed Nicol’s appeal.

Ill. STANDARDS OF REVIEW

HM “The existence of jurisdiction is a
question of law that we review de novo under
the right/wrong standard.” Lingle v. Haw.
Gov't Emps. Ass’n, 107 Hawai'i 178, 182, 111
P.3d 587, 591 (2005). Additionally, “[t]he in-
terpretation of a statute is a question of law
reviewable de novo.” State v. Arceo, 84 Ha-
wail 1, 10, 928 P.2d 848, 852 (1996) (quoting
State v. Camara, 81 Hawai'i 324, 329, 916
P.2d 1225, 1280 (1996).

IV. DISCUSSION

On certiorari, Nicol contends that the ICA
improperly dismissed his appeal of the circuit
court’s Order of Dismissal based on a “limit-
ed reading” and “uncritical interpretation” of
the term “judgment” in HRS § 641-11. The
State responds that the circuit court’s Order
of Dismissal is not a “judgment” within the
meaning of HRS § 641-11 because it is not “a
sentence,” and, therefore, no jurisdictional
basis exists to permit Nicol’s appeal in this
case5

WM “The right of appeal in a criminal
ease is purely statutory and exists only when

§ 641-17 only permits defendants to seek inter-
locutory review of a decision denying a motion to
dismiss.

5. At oral argument, however, counsel for the
State expressed that “with regard to the jurisdic-
tional issue, the State’s actually in agreement

486

given by some constitutional or statutory
provision.” State _v. Kalani, 87 Hawai'i 260,
261, 958 P.2d 1858, 1859 (1998) (quoting State

Any party aggrieved by the judgment of a
circuit court in a criminal matter may ap-
peal_to the intermediate appellate court,

y. Fukusaku, 85 Hawai'i 462, 490, 946 P.2d
82, 60 (1997)). Under the Hawaii Revised
Statutes, the right to appeal in criminal cases
is generally divided into three categories: the
right to appeal from the circuit courts, the
right to appeal from the district courts, and
the State’s right to appeal in both the district
and cireuit courts. See generally HRS § 641-
11 (Supp. 2004) (circuit courts); HRS § 641-
12 (Supp. 2004) (district courts); HRS § 641-
18 (Supp. 2006) (State’s right to appeal). The
Hawaii Revised Statutes also provide a spe-
cific statutory basis for the right of circuit
court defendants to seek interlocutory ap-
peals, See HRS § 641-17 (Supp. 2004),

Hl In addition to the rights of appeal set
forth in chapter 641, this court has on several
occasions stated that its statutory superviso-
ry powers set forth in HRS § 602-4 (1998) ¢
may provide it with an independent jurisdic-
tional basis to “prevent and correct error and
abuses where no other remedy is expressly
provided for by law.” State v. Ui, 66 Haw.
366, 870, 663 P.2d 630, 633 (1988) (observing
that although this court may have lacked
jurisdiction under HRS § 641-11, it had au-
thority under HRS § 602-4 to invoke its su-
pervisory powers to entertain an appeal); see
also State v. Kealaiki, 95 Hawai'i 809, 317, 22
P.8d 588, 596 (2001); State _v. Johnson, 96
Hawai'i 462, 471, 82 P8d 106, 115 (App.
2001).7

A. Right of Appeal of Circuit
Court Defendants

Our analysis begins with HRS § 641-11,
which sets forth the right to appeal from the
circuit courts and provides as follows:

with Petitioner,” See Oral Argument at 23:09-20,
State _v. Nicol, SCWC-16-0000681 (argued July
18, 2017), _httpy/oaoa.hawaii.gov/iud/oa/17/
SCOA_071817_SCWC_16_681.mp3.

6. HRS § 602-4 (1993) states that ‘[t]he supreme
court shall have the general superintendence of
all courts of inferior jurisdiction to prevent and
correct errors and abuses therein where no other
remedy is expressly provided by law.”

7. Additionally, although not founded in statute,
this court has held that certain appeals may be
brought pursuant to the “collateral order” excep-

subject to chapter 602, in the manner and
within the time provided by the rules of
court. The sentence of the court in a crimi-
nal case shall be the judgment, All appeals
shall be filed with the clerk of the supreme
court and shall be subject to one filing fee.

HRS § 641-11 (emphases added), Thus, un-
der HRS § 641-11, a party aggrieved by the
‘Sudgment” of a cireuit court may appeal to
the intermediate appellate court. Id. The
statute also states that the “sentence” shall
constitute the “judgment.” Id,

HH At issue in this case is whether the
statutory clause identifying the “sentence” as
the “judgment” precludes circuit court defen-
dants from appealing an order of dismissal
without prejudice. “When construing a stat-
ute, [this court’s] foremost obligation is to
ascertain and give effect to the intention of
the legislature, which is to be obtained pri-
marily from the language contained in the
statute itself.” State v. McKnight, 181 Ha-
wai'i 879, 888, 819 P.8d 298, 307 (2018) (alter-
ation in original) (quoting State v. Kotis, 91
Hawai'i 819, 827, 984 P.2d 78, 86 (1999)),
Additionally, “[t]he legislative history of a
statute remains relevant ‘even when the lan-
guage appears clear upon perfunctory re-
view.” State _v. Alangcas, 184 Hawai'i 515,
526, 845 P.8d 181, 192 2015) (quoting Rich-
ardson v. City & Cty. of Honolulu, 76 Hawai'i
46, 68-69, 868 P.2d 1198, 1215-16 (1994)),
“Were this not the case, a court may be
unable to adequately discern the underlying
policy which the legislature seeks to promul-
gate and, thus, would be unable to determine

tion. Kealaili, 95 Hawai'i at 316-17, 22 P.3d at
595-96, Pursuant to this doctrine, an order or
decision of the court may be appealable if it: “(1)
fully disposes of the question at issue; (2) resolves
an issue completely collateral to the merits of the
case; and (3) involves important rights which
would be irreparably lost if review had to await a
final judgment.” Id. (quoting State v. Baranco,
77 Hawai'i 351, 353-54, 884 P.2d 729, 731-32
(1994) (applying the collateral order exception to
hold that a defendant may take an interlocutory
appeal of an order denying a pretrial motion to
dismiss based on double jeopardy grounds).

if a literal construction would produce an
absurd or unjust result, inconsistent with the
policies of the statute.” Id. (quoting Richard-
son, 76 Hawaii at 68-69, 868 P.2d at 1215-16),

The substance of HRS § 641-11 dates back
to at least 1892, and, prior to the legislative
session of 1925, its predecessor statute pro-
vided that a writ of error could be issued to
“any party deeming himself aggrieved by the
judgment of a circuit court, the land court, or
a district magistrate, or by the order or
decree of a circuit judge at chambers ...
within six months from the entry of such
judgment, order or decree.” Revised Laws of
Hawaii (RLH) § 2521 (1925). The territorial
legislature in 1925 amended the statute, how-
ever, to include the clause at issue in this
case, The amended statute provided in rele-
vant part as follows:

A writ of error ... may be issued ...

upon the application of any party deeming

himself aggrieved by the judgment of a

circuit court, the land court, or a district

magistrate, or by the order or decree of a

circuit judge at chambers ... within six

months from the entry of such judgment,
order or decree and the sentence of the
court in a criminal case shall be the judg-
ment,
1925 Haw. Sess. Laws Act 211, § 1 at 255-56
(emphasis added),

In its committee report, the Senate Com-
mittee on Judiciary (Committee) stated that
the 1925 amendment was intended to “more
clearly define[] the time within which” de-
fendants could seek a writ of error in crimi-
nal cases. 8, Stand, Comm. Rep, No. 181, in
1925 Senate Journal, at 550. The Committee
elaborated that under both the previous and
amended versions of the statute, individuals
were permitted to seek such a writ in crimi-
nal cases “within six months from the entry
of judgment[].” Id, at 551. However, the
Committee was concerned that there was
ambiguity as to when the relevant six-month
period began to run, Id, The Committee not-
ed that courts had generally treated the sen-
tence in a criminal case as the relevant “en-
try of judgment” for purposes of computing
the six-month period, but it also noted that
there had been “a doubt as to the correctness
of such a construction.” Id, The Committee

487

determined that the sentence of the court
was indeed the relevant event by which to
measure the six-month window, and, there-
fore, it specifically identified the “sentence”
as the “judgment” in its amendment to codify
this interpretation of the statute. Id, Thus,
the legislative history surrounding the 1925
amendment to the statute classifying the
“sentence” as the “judgment” indicates that
the legislature intended not to narrow the
scope of decisions and orders from which
defendants could appeal, but, rather, to more
clearly establish the relevant timeframe with-
in which defendants could do so.

Hl This court’s understanding of HRS
§ 641-11 is further informed by our jurisdic-
tion’s caselaw, which suggests that consider-
ations of finality are the primary focus in
resolving questions of appealability under the
statute. In State v. Johnston, for example,
this court ruled that a circuit court order
denying a motion to dismiss was not appeal-
able under HRS § 641-11 in part because the
order—which did not terminate proceedings
in the case—was deemed to be of an interloc-
utory nature, 683 Haw. 9, 10, 619 P.2d 1076,
1077 (1980). The Johnston court concluded
that the order denying the motion to dismiss
was “not a final order or judgment,” and it
was therefore not appealable under the stat-
ute. Id, Although the court considered the
language of HRS § 641-11 that “[t]he sen-
tence of the court in a criminal case shall be
the judgment,” it did not conclude that juris-
diction was lacking based on the absence of a
“sentence”; rather, this court focused on the
fact that denial of a motion to dismiss per-
mitted proceedings to move forward and
therefore lacked finality. Id.; see also State v.
Ferreira, 54 Haw. 485, 486-87, 510 P.2d 88,
89 (1978) (appeal not permitted under HRS
§ 641-11 where judgment of conviction
lacked any indication that sentencing had
occurred and where the record suggested
that “the judgment in [the] case [was] not.
final”),

In Ui, this court again considered the
scope of HRS § 641-11 and elaborated that
an appeal need not necessarily be from a
“sentence” for principles of finality to war-
rant its adjudication, 66 Haw. at 368-69, 663
P.2d at 681-32. In that case, following a

488
mistrial and dismissal of the indictment with
prejudice, the defendant’s court-appointed
counsel sought an order awarding attorneys’
fees. Id. at 368, 663 P.2d at 681. After the
cireuit court issued the order granting coun-
sel a portion of the fees he sought, the defen-
dant appealed the attorneys’ fees order and.
submitted that jurisdiction under HRS
§ 641-11 was proper. Id, On appeal, the State
cited to Johnston, 63 Haw. 9, 619 P.2d 1076,
and argued that an appeal under the statute
could only be taken “from a sentence of the
circuit court.” Id, at 369, 663 P.2d at 632. The
Ui court distinguished Johnston, explaining
that “Johnston did not definitively rule that
an appeal under HRS § 641-11 must be from
a sentence in a criminal case.” Id. Rather,
this court considered Johnston to imply that
“an appeal may also be brought from an
order deemed to be final.” Id. The Ui court
determined, however, that it need not ex-
pressly rule on this issue because the defen-
dant lacked standing to challenge the order
awarding his counsel attorneys’ fees. Id, at
369-70, 663 P.2d at 632-88 (reasoning that the
defendant was not personally “aggrieved” by

the attorneys’ fees order within the meaning
of HRS § 641-11).

We again considered principles of finality
as they related to appeals in Kalani, where
this court discussed the differences between
a grant and a denial of a defendant’s motion
to dismiss, 87 Hawai'i at 261-62, 953 P.2d at
1859-60. In Kalani, we considered whether
the State was entitled to appeal an order of
dismissal without prejudice pursuant to HRS
§ 641-18. Id, at 261, 953 P.2d at 1359. After
determining that the statute and its caselaw
indicated that the State was entitled to ap-
peal such an order, this court observed the
possible applicability of Johnston, which it
construed as indicating that “in a criminal
case, an appeal must be from a ‘final order or

8. Although the Ui court later stated in the con-
text of another possible jurisdictional basis that it
“lack[ed] jurisdiction under HRS § 641-11,” the
court concluded that it “[did] not need to decide
this issue” (L.c., “whether the judgment appealed
from must be a sentence”). 66 Haw. at 369-70,
663 P.2d at 632-33.

9, HRS § 641-13 provides in relevant part as fol-
lows:

judgment.’” Id. (quoting Johnston, 63 Haw.
at 11, 619 P.2d at 1077). Although the Kalani
court ultimately concluded that Johnston
possessed minimal persuasive authority be-
cause it was based on a different statute, it
reasoned that the order in Johnston denying
a motion to dismiss differed from the order
at issue, which granted a motion to dismiss
and effectively terminated proceedings. Id. at
261-62, 953 P.2d at 1859-60.

When dismissal is denied in a criminal

ease, the circuit court conducts further

proceedings and, presumably, the case
eventually goes to trial. Thus, an order
denying a motion to dismiss is not final.

The present case, however, involved an

order granting a motion to dismiss. If dis-

missal is granted, there is nothing further
to be accomplished in the trial court and
the proceedings are ended. Thus, an order
granting a motion to dismiss is final,
Id, The Kalani court further observed that if
the State chose to recharge a defendant fol-
lowing an order dismissing proceedings with-
out prejudice, “recharging [the defendant]
does not revive the original case.” Id, at 262,
958 P.2d at 1860. “Rather, recharging the
defendant initiates a new case,” and, there-
fore, “a dismissal without prejudice is a final
order-it terminates the current case.” Id.

An emphasis on finality is also present in
State v. Lawrence, 189 Hawai'i 192, 386 P.38d
476 (App. 2016), in which the ICA held that a
judgment of acquittal and commitment based
on an insanity defense constituted a “sen-
tence” for purposes of HRS § 641-11. In
Lawrence, the defendant was found not
guilty by reason of mental disease, disorder,
or defect following a bench trial. 189 Hawai'i
at 194-95, 886 P.8d at 478-79. Accordingly,
the court issued a judgment of acquittal and
an order committing the defendant to the
eare and custody of the director of health to

‘An appeal may be taken by and on behalf of
the State from the district or circuit courts to
the intermediate appellate court, subject to
chapter 602, in all criminal matters, in the
following instances:

(i) From an order or judgment quashing,

setting aside, or sustaining a motion to dis-

miss any

indictment, information, or complaint or any

count thereof. ...

HRS § 641-13 (Supp. 2006).

be placed in an appropriate institution. Id. at
195, 386 P.8d at 479. Following entry of the
judgment of acquittal, the defendant sought
to appeal one of a series of orders issued by
the circuit court authorizing his involuntary
medication while in the State’s custody. Id. at
195-99, 386 P.8d at 479-83.

In considering whether his appeal was per-
missible under HRS § 641-11, the ICA ob-
served several instances in which this court
had “implicitly held” that orders regarding
involuntary treatment and medication were
“appealable orders.” Id. at 199-200, 886 P.8d
at 488-84 (citing Kotis, 91 Hawaii 319, 984
P.2d 78 (appeal of a pretrial involuntary or-
der of medication); State v. Miller, 84 Hawai'i
269, 983 P.2d 606 (1997) (appeal of an order
denying petition for conditional release fol-
lowing acquittal on the ground of mental
disease or disorder and commitment to state
custody); State y. Burgo, 71 Haw. 198, 787
P.2d 221 (1990) (appeal of an order revoking
grant of conditional release following acquit-
tal and commitment to state custody)). The
Lawrence court additionally considered that
a defendant found not guilty based on an
insanity defense who was committed to the
custody of the State may be subject to depri-
vation of liberty “for a prolonged, and indeed
an indefinite, period of time.” Id, at 200, 886
P.8d at 484, The court reasoned that it would
be “anomalous” to preclude an appeal “under
the circumstances of [the] case” and suggest-
ed that interpreting HRS § 641-11 to prohib-
it the appeal would yield absurd results. Id.
at 201, 886 P.3d at 485 (citing Burgo, 71
Haw. at 202, 787 P.2d at 228). Thus, the ICA
determined that the judgment of acquittal
and commitment constituted a “sentence” for
purposes of HRS § 641-11 given its nature
and finality. Id, at 200-01, 886 P.8d at 484-85
(also holding that the order authorizing invol-
untary medication was an appealable post-
judgment order),

In keeping with this focus on finality, we
have also interpreted HRS § 641-11 to bar
an appeal of orders that do not represent
final decisions of the court or otherwise ter-
minate proceedings. In Kealaiki, for example,
this court considered whether a circuit court
order granting a deferred acceptance of no
contest (DANC) plea was appealable under

489

HRS § 641-11. 95 Hawai‘i at 311-12, 22 P.8d
at 590-91. The court explained that in gener-
al, if a DANC plea is granted by order of the
circuit court, “acceptance of the plea is then
deferred,” further proceedings are suspend-
ed pending the defendant’s satisfaction of
certain conditions, and, upon “[s]uccessful
completion of the deferral period,” the
charges are dismissed. Id. at 315, 22 P.8d at
594. The defendant in Kealaiki had sought to
appeal the circuit court’s order accepting his
DANC plea, but prior to completion of the
deferral period; as such, the criminal charges
remained pending at the time of appeal. Id.
at 812, 22 P.8d at 591. This court reasoned
that given the nature of the deferred plea
procedure, an order granting a DANC plea
was neither a conviction nor a sentence, Id.
at 312-18, 22 P.8d at 591-92. The Kealaiki
court therefore concluded that an appeal of
an order granting a DANC plea pending the
deferral period was not authorized by HRS
§ 641-11, Id, at 812, 22 P.8d at 591,

Decisions of this jurisdiction thus demon-
strate that our courts have not rigidly inter-
preted appealability pursuant to HRS § 641-
11. Rather, we have looked to considerations
of finality and determined whether the order
or decision terminated proceedings, leaving
“nothing further to be accomplished in the
trial court.” Kalani, 87 Hawai'i at 261-62, 958
P.2d at 1859-60; see also Johnston, 68 Haw.
at 10, 619 P.2d at 1077; Ui, 66 Haw. at 368-
69, 663 P.2d at 681-32; Kealaiki, 95 Hawaii at
811-12, 22 P.8d at 590-91. Such an interpreta-
tion of HRS § 641-11 is consistent with the
legislative intent behind the statute’s lan-
guage identifying the “sentence” as the
“judgment” in circuit court proceedings,
which was not intended to limit the scope of
permissible appeals under the statute, but,
rather, to more clearly establish the timeline
in which an appeal could be pursued. S,
Stand. Comm. Rep. No, 181, in 1925 Senate
Journal, at 550-51.

B. Right of Appeal of District Court
Defendants and of the State
Hl Reference to the analogous rights of
appeal of district court defendants and of the
State in both district and circuit court cases
is also appropriate in analyzing Nicol’s right

490

to appeal in this case because “[IJaws in pari
materia, or upon the same subject matter,
shall be construed with reference to each
other.” Richardson v. City & Cty. of Honolu-
lu, 76 Hawai'i 46, 55, 868 P.2d 1198, 1202
(1994) (alteration in original) (quoting HRS
§ 1-16 (1985)).

HRS § 641-13 (Supp. 2006) provides a list-
ing of orders, rulings, and decisions of both
the district and circuit courts from which the
State may appeal, including “an order or
judgment quashing, setting aside, or sustain-
ing a motion to dismiss.” HRS § 641-13(1),
Our court has interpreted this language of
HRS § 641-18 to permit the State to appeal
an order dismissing proceedings without
prejudice, See Kalani, 87 Hawai'i at 261, 958
P.2d at 1859 (“[Tyhe plain meaning of [HRS
§ 641-18(1)] indicates that the prosecution
can appeal from both dismissals with preju-
dice and without prejudice.”).

HRS § 641-12 sets forth the right to ap-
peal for district court defendants and pro-
vides in relevant part as follows:

Appeals upon the record shall be allowed

from all final decisions and final judgments

of district _courts in all criminal matters.

Such appeals may be made to the interme-

diate appellate court, subject to chapter

602, whenever the party appealing shall

file notice of the party’s appeal within thir-

ty days, or such other time as may be
provided by the rules of the court,
HRS § 641-12 (Supp. 2004) (emphasis add-
ed), Thus, district court defendants may ap-
peal from “all final decisions and final judg-
ments.” Id.

The difference in standards between the
appeals provisions relating to district court
and circuit court defendants originated by
virtue of statutory amendment and appears
to have been a byproduct of a 1972 legislative
updating of the Hawaii Revised Statutes, Pri-
or to 1972 and dating back to the late 1800s,
Hawaii law provided for both appeals and for
writs of errors. Appeals were permitted from
“all decisions” of “district magistrates” in
civil and criminal cases pursuant to section
2508 of the Revised Laws of Hawaii, see
RLH § 2508 (1925), and appeals were like-
wise permitted from all “decisions, judg-
ments, orders or decrees” of “circuit judges

in chambers” under section 2509, see RLH
§ 2509 (1925). Under RLH § 2521 (1925),
writs of error could be sought by “any party
deeming himself aggrieved by the judgment
of a circuit court, the land court, or a district
magistrate, or by the order or decree of a
eiveuit judge at chambers ... within six
months from the entry of such judgment,
order or decree.” Thus, separate statutory
bases existed to permit appeals from district
courts and from cireuit courts, and a sepa-
rate, single statute set the terms by which
parties could seek writs of error from all
lower courts. Our statutes maintained the
distinction between appeals and writs or er-
ror for many decades.

In 1972, the Hawai'i Legislature conducted
a “long overdue” “[clomprehensive updating
and unifying” of the Hawaii Revised Stat-
utes. S. Stand. Comm. Rep. No. 622-72, in
1972 Senate Journal, at 1006. The resulting
legislation (Act 89) was the product of work
done by the Committee on Coordination of
Rules and Statutes and sought to address
“folbsolete civil procedure provisions” dating
back to the 1800s. Id. Act 89 removed the
distinction in our statutes between “appeals”
and “writs of errors” and consolidated the
two categories into one chapter (“Appeals”),
which was divided into the two subparts cur-
rently found in the Hawaii Revised Statutes
(‘Appeals in Civil Actions and Proceedings”
and “Appeals in Criminal Proceedings”),
Within the subpart “Appeals in Criminal Pro-
ceedings,” Act 89 set forth the three subsec-
tions that exist in the present day: appeals
from the circuit courts, appeals from the
district courts, and appeals by the State in
criminal cases, 1972 Haw. Sess. Laws Act 89,
§ 5 at 848-49,

To define the right of appeal of circuit
court defendants, Act 89 borrowed from the
previous language relating to writs of error
from the circuit, land, and district courts.
The legislation deleted the reference to land
and district courts and provided that “{alny
party deeming himself aggrieved by the
judgment of a cireuit court in a criminal
matter, may appeal ... within the time pro-
vided by the Hawaii Rules of Criminal Proce-
dure. The sentence of the court in a criminal
case shall be the judgment.” 1972 Haw. Sess.

Laws Act 89, § 5 at 848 (emphasis added).
To define the right of appeal of district court
defendants, Act 89 relocated the prior provi-
sion permitting appeals of “all decisions” of
“district magistrates” in both civil and crimi-
nal cases and expressly limited its applicabili-
ty to criminal cases, Id. Thus, as a result of
the 1972 legislation, (1) any circuit court de-
fendant “deeming himself aggrieved by the
judgment ... in a criminal matter” could
seek an appeal, and “[t]he sentence of the
court in a criminal case” constituted “the
judgment,” see HRS § 641-11 (1972), and (2)
district court defendants could appeal from
“all final decisions and final judgments ... in
all criminal matters,” see HRS § 641-12
(1972).

Any textual difference created by Act 89
between the statutory rights of circuit court
defendants and district court defendants
does not appear to be purposeful. Rather
than substantively modifying the appellate
rights of defendants, the stated purpose of
Act 89 was to “eliminate inconsistencies with
the rules of court; delete outmoded provi-
sions; make improvements of a technical na-
ture; and transfer procedural matters to
rules of court where advisable.” S, Stand.
Comm. Rep. No, 622-72, in 1972 Senate Jour-
nal, at 1005. A Senate Special Committee
Report on the amendments made to the new
“Appeals” chapter was silent regarding the
difference in statutory text between HRS
§ 641-11 and HRS § 641-12, and it neither
explained nor referenced the treatment af-
forded to circuit court versus district court
defendants pursuant to the legislation. See
id, at 1006 (stating that Senate Special Com-
mittee Report No. 7 on Act 89 “reflect[ed]
the views of” the Senate Committee on Judi-
ciary); see also 8. Spec. Comm. Rep. No. 7, in
1972 Senate Journal, at 705 (discussing the
“Appeals” chapter created by Act 89), Like-
wise, the report on Act 89 created by the
Committee on Coordination of Rules and
Statutes manifests no intent to create differ-
ent appellate rights for district and cireuit
court criminal defendants, but, rather, to
more clearly organize and set forth the ap-
pellate rights of civil and criminal litigants in
general. See S, Stand. Comm. Rep. No, 622-
72, in 1972 Senate Journal, at 1006 (finding
The Report of the Committee on Coordina-

491

tion of Rules and Statutes to be helpful,
though not necessarily reflecting the views of
the Senate Committee on Judiciary); see also
Comm. on Coordination of Rules and Stat-
utes, 2 Report of the Committee on Coordi-
nation of Rules and Statutes § 641 (Sept. 1,
1971) (explaining proposed amendments re-
lating to appeals).

Tl The statutory scheme created by Act
89 remains in effect today, and the appel-
late rights codified at HRS § 641-11 and
HRS § 641-12 that are relevant to this case
remain substantively identical to those en-
acted by Act 89, Relying on the language
specific to HRS § 641-12, courts of this ju-
risdiction have interpreted the statute to
grant district court defendants the right to
appeal orders of dismissal without preju-
dice, See, e.g., State v. Hern, 183 Hawaii
59, 62, 323 P.8d 1241, 1244 (App. 2018) (ad-
judicating on remand defendant’s appeal of
an order of dismissal without prejudice af-
ter this court vacated the ICA’s order dis-
missing on jurisdictional grounds). Thus, un-
der the Hawaii Revised Statutes, district
court defendants and the State in either
district or cireuit court may appeal from an
order dismissing proceedings without preju-
dice, Id; Kalani, 87 Hawai'i at 261, 958 P.2d
at 1359,

C. Nicol May Appeal the Cireuit
Court’s Order of Dismissal
Under HRS § 641-11

This court has not previously articulated a
clear ruling as to whether circuit court defen-
dants in criminal matters are afforded the
right to appeal an order dismissing proceed-
ings without prejudice under HRS § 641-11,
The text of the statute provides that any
party “aggrieved by the judgment” of the
circuit court in a criminal case may take an
appeal. HRS § 641-11. Significantly, as not-
ed, the clause specifying that “(t]he sentence
of the court in a criminal case shall be the
judgment” was not intended to narrow the
scope of orders and decisions from which
circuit court defendants could appeal. S.
Stand. Comm. Rep. No, 181, in 1925 Senate
Journal, at 550-51. Rather, it was intended to
ensure that defendants timely appealed and

492

to erase ambiguity as to the deadline by
which defendants were required to do so. Id.

In keeping with the identification of the
“sentence” as the “judgment” as relating to
issues of timing rather than scope, appellate
courts of this jurisdiction have not interpret-
ed HRS § 641-11 solely by considering
whether or not the relevant decision con-
tained an order of punishment or other for-
mal pronouncement of guilt. Rather, as dis-
cussed, in determining whether dispositions
are subject to appeal under the statute, our
courts have focused the inquiry on whether
the relevant order terminated the proceed-
ings in the case and left nothing further to be
accomplished by the lower court. See, ¢.g.,
State _v. Johnston, 63 Haw. 9, 10, 619 P.2d
1076, 1077 (1980); Ui, 66 Haw. at 368-69, 663
P.2d at 681-82; State v, Ferreira, 54 Haw.
485, 486-87, 510 P.2d 88, 89 (1978); State v.
Lawrence, 189 Hawai'i 192, 200, 386 P.8d
476, 484 (App. 2016); Kealaili, 95 Hawai'i at:
812, 22 P.8d at 591,

We also consider that, under the ICA’s
interpretation of the statute in this case,
district court defendants may appeal an or-
der of dismissal without prejudice pursuant
to HRS § 641-12 while circuit court defen-
dants are denied the same right under HRS
§ 641-11. In light of the history of these
provisions, this court cannot conclude that
the legislature intended to grant one right to
district court defendants yet withhold that
right from circuit court defendants, Rather,
it appears that the legislature intended to
maintain a preexisting appellate scheme that
granted to criminal defendants in general the
right to appeal final orders. The difference in
text between the two statutes likely resulted
from the concerted effort to reorganize the
appellate statutory scheme and delete obso-
lete provisions, rather than to create differ-
ent classes of rights to be afforded to circuit
court and district court defendants with re-
gard to final orders and judgments.

10. We further observe that under such an inter-
pretation of HRS § 641-11, a district court de-
fendant who wishes to exercise a constitutional
right to a trial by jury—thereby resulting in the
commitment of the case to circuit court—would
be effectively deprived of the right to appeal an

HH Additionally, there are several situa-
tions in which the district and circuit courts
may have jurisdiction over the same criminal
charge. Under HRS § 603~21.5(a)(1) (Supp.
2008), the cireuit courts have jurisdiction
over all “[c]riminal offenses cognizable under
the laws of the State, committed within their
respective circuits.” Under HRS § 604-8(a)
(Supp. 2001), the criminal jurisdiction of the
district courts is limited to “criminal offenses
punishable by fine, or by imprisonment not
exceeding one year whether with or without
fine.” However, misdemeanor or petty of-
fenses may be brought in circuit court if, for
example, they are related to a felony offense
as prescribed by the Hawaii Revised Stat-
utes, See State v. Aiu, 59 Haw. 92, 97 n.8, 576
P.2d 1044, 1048 n.8 (1978) (observing in a
ease involving both felony and misdemeanor
charges arising from the same course of con-
duct that “both the misdemeanor and felony
charges in this ease could have been joined
and tried in cireuit court”). Jurisdiction over
a charge may also transfer from the district
court to the cireuit court if a district court
defendant exercises a right to a trial by jury.
See HRPP Rule 5(b)(8) (2014) (describing
the procedures by which district court defen-
dants who do not waive their right to a jury
trial “shall [be] commit[ted] ... to the circuit
court for trial by jury”). If in either of these
circumstances charges are subsequently dis-
missed without prejudice, it would appear
unreasonable to base a defendant’s right of
appeal on whether a misdemeanor charge
had been joined with a felony accusation or
whether the defendant had requested a jury
trial on a misdemeanor charge.

Further, the ICA’s interpretation of HRS
§ 641-11 would result in broader appellate
rights being afforded to those faced with less
serious crimes and the denial of such rights
to those faced with charges of a greater
gravity. Permitting those faced with misde-
meanor and petty charges to appeal an order
of dismissal without prejudice while denying
that same right to circuit court defendants

order of dismissal without prejudice, A district
court defendant in such a situation may therefore
be burdened in the exercise of the jury trial right
insofar as the invocation of the constitutional
right deprives the defendant of the statutory right
to appeal,

does not take into account that those faced
with more serious charges may have an equal
or greater interest in appealing an order of
dismissal without prejudice so as to preclude
reprosecution, Interests relating to judicial
economy and practicality likewise suggest
that in such circumstances, it would be incon-
sistent to permit an immediate appeal from
an order of dismissal without prejudice from
the district court yet to preclude an appeal
from the same order issued by the circuit
court when the underlying charge may be
identical. See Keliipuleole_v. Wilson, 85 Ha-
wait 217, 221-22, 941 P.2d 300, 304-05 (1997)
(“{a] rational, sensible and practicable inter-
pretation [of a statute] is preferred to one
which is unreasonable or impracticable” (al-
terations in original) (quoting State v. Loben-
dahn, 71 Haw. 111, 112, 784 P.2d 872, 873
(1989))).

Relatedly, contrary to the State’s conten-
tion, it is not readily apparent that circuit
court defendants have the right to seek an
interlocutory appeal of an order of dismissal
without prejudice pursuant to HRS § 641-17
(Supp. 2004). HRS § 641-17 provides in rele-
vant part that “{ulpon application ... an
appeal in a criminal matter may be allowed
to a defendant from the circuit court ...
from a decision denying a motion to dismiss
or from other interlocutory orders.” HRS
§ 641-17 (emphasis added). The cireuit
court's determination whether to grant an
interlocutory appeal under the statute is sub-
ject to whether the judge, “in the judge’s
discretion,” believes that such an appeal
would be “advisable for a more speedy termi-
nation of the case.” Id. (emphasis added).

Thus, HRS § 641-17 clearly affords circuit
court defendants the right to seek an inter-
locutory appeal of a denial of a motion to
dismiss. Id, However, it is not clear that the
same statutory right attaches to the grant of

11, We also observe that affording a right of ap-
peal of an order of dismissal without prejudice to
district court defendants but denying that right to
circuit court defendants would yield anomalous
results. See Lawrence, 139 Hawai'i at 201, 386
P.3d at 485 (finding jurisdiction under HRS
§ 641-11 over a judgment of acquittal and order
of commitment in part because “to construe [the
statute] to preclude an appeal under the circum-
stances of [the] case” would be “anomalous”
(citing State v. Burgo, 71 Haw. 198, 202, 787

493

a motion to dismiss. Indeed, the text of the
statute suggests that such an order would
not be subject to HRS § 641-17; review of an
order of dismissal is not necessarily “advisa-
ble” to facilitate “a more speedy termination
of the case” in such circumstances because,
by virtue of the order, proceedings have al-
ready terminated. Id; see also Kalani, 87
Hawai'i at 261-62, 953 P.2d at 1859-60 (de-
scribing legal effect of order dismissing pro-
ceedings without prejudice). For this reason,
the State’s characterization of an order of
dismissal without prejudice—which repre-
sents a final termination of the case—as an
interlocutory order subject to discretionary
appeal within the meaning of the statute may
likewise be incorrect, See Interlocutory,
Black’s Law Dictionary (10th ed, 2014) (de-
fining “interlocutory” as “interim or tempo-
rary; not constituting a final resolution of the
whole controversy”).

HH As we described in Kalani, 87 Ha-
wait at 261-62, 953 P.2d at 1359-60, an order
of dismissal without prejudice leaves “noth-
ing further to be accomplished in the trial
court.” The proceedings are ended, and,
therefore, “an order granting a motion to
dismiss is final.” Id, Thus, in light of the
focus of our caselaw on general consider-
ations of finality in interpreting HRS § 641-
11, the legislative intent behind the key lan-
guage in the statute, the history of HRS
§ 641-11 as it relates to parallel statutes
setting forth the rights of appeal of the State
and district court defendants, and the princi-
ple that HRS § 641-11 is to be construed in
pari materia with other provisions authoriz-
ing appeals in criminal matters, we conclude
that a circuit court defendant may appeal an
order dismissing proceedings without preju-
dice under HRS § 641-11."

P.2d 221, 223 (1990))), That is, it is rational,
sensible, and practicable to interpret HRS § 641-
11 to afford defendants the right to appeal from
an order of dismissal without prejudice issued by
the circuit court. See Keliipuleole, 85 Hawai'i at
221-22, 941 P.2d at 304-05 (“[a] rational, sensi-
ble and practicable interpretation [of a statute] is
preferred to one which is unreasonable or im-
practicable” (alterations in original) (quoting Lo-
bendahn, 71 Haw. at 112, 784 P.2d at 873).

494

V. CONCLUSION

We conclude that HRS § 641-11 authorizes
a defendant’s appeal in a criminal matter
from a circuit court order dismissing the
proceedings without prejudice.!? The ICA’s
Order Dismissing the Appeal was based on
the ICA’s conclusion that it lacked jurisdic-
tion under HRS § 641-11 to review Nicol’s
appeal of the circuit court’s Order of Dis-
missal.!8 Accordingly, the ICA’s January 11,
2017 Order Dismissing the Appeal is vacated,
and the case is remanded to the ICA for
proceedings consistent with this opinion,

12, To the extent that the ICA’s prior decisions in
State v. Kim, 109 Hawai'i 59, 60, 122 P.3d 1157,
1158 (App. 2005), and State v. Hern, 133 Hawai'i
59, 62 n.5, 323 P.3d 1241, 1244 n.5 (App. 2013),
suggest that a circuit court defendant may not
appeal an order of dismissal without prejudice,
they are therefore incorrect.

403 P.3d 271

DEUTSCHE BANK NATIONAL TRUST
COMPANY as Indenture Trustee for
American Home Mortgage Investment
Trust 2006-1, Mortgage-backed Notes,
Series 2006-1, Respondent/Plaintiff-Ap-
pellee,

v

Philip E. KOZMA, Petitioner/Defendant-
Appellant, and E"trade Bank; The Asso-
ciation of Owners of Kahala Kua aka
Kahala Kua Community Association,
Respondents/Defendants-Appellees,
(CIVIL NO, 10-1-0686-03)

and

The Association of Owners of Kahala Kua
aka Kahala Kua Community Associa-
tion, A Hawaii Nonprofit Corporation,
By and Through Its Board of Directors,
Respondent/Plaintiff-Appellee,

v

Philip E. Kozma, Petitioner/Defendant-Ap-
pellant, and American Home Mortgage
Servicing, Inc; E"trade Bank, Respon-
dents/Defendants-Appellees. (CIVIL NO.
08-1-1850-09)

SCWC-16-0000025

Supreme Court of Hawaii,
SEPTEMBER 65, 2017

13. In light of our conclusion with respect to
jurisdiction based on HRS § 641-11, it is not

necessary to determine whether jurisdiction ex-
ists pursuant to this court's supervisory authority
set forth in HRS § 602-4 (1993) or under the
collateral order doctrine; for the same reason,
we also do not reach the constitutional issues
raised by Nicol on appeal.

R. Steven Geshell, Honolulu, for petitioner.

J. Blaine Rogers, and Lori King Stibb,
Honolulu, for respondent/ plaintiff-appellee,
Deutsche Bank National, Trust Company.

RECKTENWALD, C.J., NAKAYAMA,
McKENNA, POLLACK, AND WILSON,
Jd.

OPINION OF THE COURT BY
McKENNA, J.
1. Introduction

Philip E, Kozma (“Kozma”) seeks review
of the Intermediate Court of Appeals’
(“ICA”) Order Denying Without Prejudice
the March 30, 2017 Request for Attorneys’
Fees and Costs (“order”). This appeal is re-
lated to a foreclosure action brought by
Deutsche Bank National Trust Company As
Indenture Trustee For American Home
Mortgage Investment Trust 2006-1, Mort-
gage-Backed Notes, Series 2006-1 (“Deutsche
Bank”). On December 22, 2015, the Circuit
Court of the First Circuit (“circuit court”)
granted Deutsche Bank’s motion for sum-
mary judgment and decree of foreclosure,
and Kozma appealed to the ICA. The ICA
vacated the circuit court’s judgment and re-
manded for further proceedings after deter-
mining Deutsche Bank failed to meet its
burden of demonstrating that it was entitled

1, The note and mortgage were allegedly first
assigned by American Home Acceptance, Inc.
(“AHMAL’) to American Home Mortgage Servic-
ing, Inc. (“AHMSI") by assignment dated Janu-
ary 8, 2008 (“first assignment”) and further as-

to summary judgment. Kozma then filed a
“Request and Declaration of Counsel” (“re-
quest”) seeking attorney’s fees and costs re-
lated to his appeal, which the ICA denied
after determining Kozma was not a “prevail-
ing party” at this point in the proceeding.

Since the ICA essentially placed Kozma
“back where he started,” there is no “prevail-
ing party” entitled to attorney's fees under
Hawaii Revised Statutes (“HRS”) § 607-14
(2016). Therefore, the ICA did not err in
denying Kozma’s request for attorney’s fees.
With regard to the request for costs, howev-
er, the ICA applied an erroneous legal stan-
dard, which resulted in the incorrect conclu-
sion that Kozma was not entitled to costs
pursuant to Hawai‘i Rules of Appellate Pro-
cedure (“HRAP”) Rule 39 (2016).

We accepted certiorari to clarify the law
regarding requests for appellate attorney's
fees and costs after an appellate decision
setting aside a trial court grant of summary
judgment and remanding the case for further
proceedings. We hold that when an appellate
court vacates a circuit court judgment en-
tered in favor of a foreclosing mortgagee
seeking summary judgment, the mortgagor
is not a “prevailing party” entitled to attor-
ney’s fees pursuant to HRS § 607-14. We
further clarify that when an appellate court
vacates a circuit court judgment entered in
favor of a foreclosing mortgagee seeking
summary judgment, pursuant to HRAP Rule
89, the appellate court must then use its
discretion to determine which party, on bal-
ance, prevailed on the appeal for the purpose
of an award of costs.

Il. Background

A. Cireuit court proceedings

On March 81, 2010, Deutsche Bank initi-
ated a foreclosure action against Kozma, al-
leging in its complaint that (1) it was the
owner of the promissory note and mortgage
executed by Kozma in December 2005, and
) it was entitled to foreclosure due to Koz-
ma defaulting on the loan. Deutsche Bank

signed to Deutsche Bank by assignment dated
March 3, 2009 (‘second assignment”). Both
were recorded in Land Court. AHMAI and AHM-
SI had a consolidated bankruptcy case pending
at the time of the first assignment.

attached a copy of the note and mortgage to
the complaint, along with copies of the as-
signments. In his Answer, Kozma admitted
he was in default, but countered that
Deutsche Bank was not the real party-in-
interest able to initiate foreclosure proceed-
ings because the assignments were not valid.

Deutsche Bank then filed a “Motion for
Summary Judgment As Against All Defen-
dants And For Interlocutory Decree of
Foreclosure” (“MSJ”). Kozma filed his mem-
orandum in opposition, arguing numerous
genuine issues of material fact existed, such
as whether Deutsche Bank possessed the
original of the documents of the mortgage,
note, and claimed assignments. The cireuit
court? granted summary judgment in favor
of Deutsche Bank.

Kozma then filed a motion for reconsidera-
tion. The circuit court granted the motion for
reconsideration and denied without prejudice
Deutsche Bank’s MSJ after determining that
it was unclear whether the bankruptcy trus-
tee for AHMAI and AHMSI’s consolidated
bankruptcy case had authorized the first as-
signment.

Deutsche Bank later filed a Renewed Mo-
tion for Summary Judgment (“renewed
MSJ”), stating that, as the holder of the
subject promissory note, it was entitled to
enforce the subject mortgage. Deutsche
Bank also asserted that AHMAI and AHM-
SI’s pending bankruptcy case did not render
the assignments void. Kozma opposed the
renewed MSJ. The cireuit court? granted
Deutsche Bank’s second motion for summary
judgment on December 22, 2015 after it de-
termined that Deutsche Bank was the holder
of the indorsed in-blank Note which was
secured by the Mortgage and thus, entitled
to the foreclosure of its Mortgage.

Kozma appealed to the ICA.

B, ICA proceedings

The ICA reviewed Kozma’s appeal in light
of this court’s opinion in Bank of America,
N.A. v. Reyes-Toledo, 189 Hawai'i 361, 390
P.8d 1248 (2017) (holding if a foreclosing
plaintiff has not demonstrated that it pos-

2, The Honorable Bert I. Ayabe presided.

497

sessed the note at the time it commenced
foreclosure proceedings, then a genuine issue
of material fact exists as to whether the
plaintiff is entitled to foreclose and summary
judgment is inappropriate). The ICA deter-
mined that neither the copy of the note at-
tached to Deutsche Bank’s complaint nor the
supporting declaration established that
Deutsche Bank possessed the note at the
time it filed its complaint. Deutsche Bank
Nat'l Trust Co. v. Kozma, CAAP-16-0000025,
2017 WL 1091949 (Hawai'i App. Mar. 28,
2017) (mem.) at 4. The ICA concluded,
viewing the facts and inferences in the
light most favorable to Kozma, there is a
genuine issue of material fact as to wheth-
er Deutsche Bank held the subject note at
the time it filed the complaint ... In light
of this ruling, we need not address Koz-
ma’s other arguments. Accordingly, the
Circuit Court’s December 22, 2015 Judg-
ment is vacated and this case is remanded
to the Circuit Court for further proceed-
ings.
Id, The ICA remanded the case for further
proceedings so Deutsche Bank could supple-
ment the record to show it possessed the
note at the time it filed its complaint. Id.

C. Request for attorney’s fees and costs

Kozma then timely filed a request for at-
torney’s fees and costs pursuant to HRS
§ 607-14 and HRAP Rule 39, seeking
$440.52 in costs and $16,625.00 in attorney’s
fees.

The ICA denied Kozma’s request, stating
(1) “HRS § 607-14 does not provide authority
for an award of fees where the First Circuit
Court judgment has been vacated and the
ease remanded for further proceedings”; and
2) “appellate costs, pursuant to HRAP 389(d),
are not awardable because a prevailing party
has not been determined thus far.”

Il. Standard of Review

HM This court reviews an ICA order
granting or denying attorney's fees and costs
under the abuse of discretion standard. Oahu

3. The Honorable Jeannette H. Castagnetti presid-
ed.

498

Publ’ns, Inc. v. Abercrombie, 184 Hawai'i 16,
22, 382 P.3d 159, 165 (2014). “[AJn abuse of
discretion occurs where the ... court has
clearly exceeded the bounds of reason or
disregarded rules or principles of law or
practice to the substantial detriment of a
party litigant.” Id. (citing Ranger Ins. Co. v.
Hinshaw, 108 Hawai‘i 26, 30, 79 P.8d 119, 123
(2008).

IV. Discussion

A, When an appellate court vacates a
summary judgment entered in favor of
a foreclosing mortgagee seeking sum-
mary judgment and remands for fur-
ther proceedings, the mortgagor is not
a “prevailing party” entitled to attor-
ney’s fees pursuant to HRS § 607-14.

A prevailing party is entitled to attorney’s
fees pursuant to HRS § 607-14, which pro-
vides in relevant 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 writ-
ing 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 attor-
ney 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....

It follows that the first issue this court must
resolve regarding Kozma’s request for attor-
ney’s fees is whether Kozma is the prevailing
party on appeal. See Kaleikini v. Yoshioka,
129 Hawai'i 454, 460, 304 P.8d 252, 258 (2018)
(“The first issue this court must resolve re-
garding Kaleikini’s request for attorney’s
fees and costs is whether Kaleikini is the
prevailing party on appeal.”); see also Sierra
Club v. Dep't of Transp., 120 Hawai'i 181,
215, 202 P.8d 1226, 1260 (2009) (“The first
issue that must be determined regarding the
fee and cost award is whether Sierra Club
was the prevailing party.”),

HN To determine which party “pre-
vailed,”

the court “is required to first identify the

prineiple issues raised by the pleadings

and proof in a particular case, and then
determine, on balance, which party pre-
vailed on the issues.” 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[.]”
Kaleikini, 129 Hawai'i at 461, 304 P.3d at 259
Gnternal citations omitted). However, a pre-
vailing party cannot always be determined
following the adjudication of an appeal. See
Sapp v. Wong, 62 Haw. 84, 42, 609 P.2d 187,
142 (1980) ({Wle must reverse this case on
appeal, vacate the judgment and remand for
a new trial. Hence, appellants cannot at this
time be considered to be the losing par-
ties[.]”). When a judgment on appeal “merely
vacates a trial court judgment unfavorable to
[a party] and places [that party] back where
the [party] started,” the judgment “does not,
in itself, provide any grounds for an award of
attorney’s fees to the [party].” Nelson vy.
Univ. of Hawai'i, 99 Hawai'i 262, 266, 54 P.38d
483, 437 (2002).

On certiorari, Kozma argues that he pre-
vailed on a disputed main issue because he
sought to have the decree of foreclosure va-
eated and remanded to the trial court. Kozma
alleged in his opposition to the renewed MSJ
and on appeal to the ICA that Deutsche
Bank was not entitled to summary judgment
as a matter of law because a genuine issue of
material fact existed as to whether the as-
signments were valid.

The ICA did not address the issue of the
validity of the assignments nor any of the
other issues raised by Kozma when disposing
of Kozma’s appeal, Instead, the ICA only
addressed whether, under the requirement
recently iterated in Reyes-Toledo, Deutsche
Bank had met its burden of demonstrating
that it was entitled to summary judgment as
a holder of the note at the time it filed the
foreclosure complaint. Kozma, mem. op. at 4.
After determining that, in light of Reyes-
Toledo, a genuine issue of material fact exist-
ed as to whether Deutsche Bank held the

subject note at the time it filed the com-
plaint, the ICA vacated the circuit court
judgment and remanded for further proceed-
ings. Id, This served the procedural function
of putting Kozma “back in the place he start-
ed” with regard to the foreclosure action
without addressing a “disputed main issue.”
Therefore, Kozma is not a “prevailing party”
and is not entitled to attorney’s fees under
HRS § 607-14. Thus, the ICA did not err in
denying Kozma’s request for attorney’s fees.

HM The facts in Kozma’s appeal are com-
mon in requests for fees and costs following
appeals related to foreclosure proceedings,
Thus, we now clarify that when the ICA
vacates a summary judgment entered in fa-
vor of a foreclosing mortgagee and remands
the case for further proceedings, the mortga-
gor is not a “prevailing party” entitled to
attorney’s fees pursuant to HRS § 607-14.

B. The ICA applied an erroneous legal
standard in its order denying Kozma’s
request for costs,

HM On certiorari, Kozma argues that he
is the prevailing party entitled to costs pur-
suant to HRAP Rule 39.

HRAP Rule 89 provides, in rele-
vant part, “if a judgment is affirmed in part
and reversed in part, or is vacated, or a
petition granted in part and denied in part,
the costs shall be allowed only as ordered by
the appellate court.” HRAP Rule 39(a)
(2016). “The intent of [HRAP Rule 89] is to
allow the party prevailing on appeal to recov-
er those costs reasonably incurred in prose-
cuting the appeal.” Jou v. Argonaut Ins. Co.,
133 Hawai'i 471, 477, 881 P.8d 449, 455 (2014)
(quoting Leslie v. Estate of Tavares, 93 Ha-
wai'i 1, 7, 994 P.2d 1047, 1058 (2000)) (empha-
sis in original), To determine which party
prevailed on appeal, the appellate court may
“evaluat[e] the remedy sought by the appel-
lant in conjunction with the remedy granted
on appeal,” or “determine, on balance, which
party prevailed on the [disputed main] is-
sues.” Jou, 188 Hawai'i at 477-78, 831 P.8d at
455-56 (citations and emphases omitted).

Hawaiian Ass’n of Seventh-Day Adventists
v, Wong, 180 Hawai'i 36, 50, 305 P.8d 452,
466 (2013), illustrates the application of

499

HRAP Rule 39 when a summary judgment is
vacated and remanded. A dispute arose be-
tween Seventh-Day Adventists (“SDA”) and
Wong regarding whether a lease agreement
prohibited certain uses of the cabins on the
leased property. Seventh-Day Adventists, 180
Hawaii at 48, 46, 305 P.8d at 459, 462. Both
parties filed motions for summary judgment.
and the trial court granted motions for sum-
mary judgment to each party on different
counts, 180 Hawaii at 48, 305 P.8d at 459.
SDA appealed from one grant of summary
judgment in favor of Wong; Wong cross-
appealed from three of the grants of sum-
mary judgment in favor of SDA. Id, The ICA
vacated one of the trial court’s grants of
summary judgment for SDA and affirmed
the trial court’s decision as to the remaining
grants of summary judgment. 130 Hawai‘ at
44, 305 P.3d at 460, SDA requested fees and
costs related to the appeal, and the ICA
granted an award of costs after determining
SDA had prevailed on the appeal. Id. On
certiorari, this court determined that an am-
biguity in the lease at issue meant several of
the trial court’s grants of summary judgment
were inappropriate and vacated the trial
court’s decisions on these counts. 180 Hawaii
at 49, 305 P.8d at 465, As both parties had
stipulated that the lease was unambiguous,
this court “[concluded] that neither party
[had] prevailed on the appeal” and vacated
the ICA’s award of costs for SDA. 180 Ha-
wail at 46, 50, 305 P.3d at 462, 466 (emphasis
added).

Seventh-Day Adventists helps elucidate
the application of HRAP Rule 39 when a
grant of summary judgment is vacated and
remanded, as does Jou, 183 Hawai'i 471, 331
P.8d 449, The holding in Jou established that
an appellate court should not look outside the
appellate proceedings when determining an
award of costs pursuant to HRAP Rule 39.
Id, In Jou, this court vacated the ICA’s order
denying costs after determining the ICA er-
roneously looked at the entire proceeding
when determining a prevailing party for an
award of costs pursuant to HRAP Rule 39.
188 Hawai'i at 480, 331 P.8d at 458. Jou
appealed from two circuit court orders grant-
ing motions in favor of Hawaii Employers
Medical Insurance Company, one of which
the ICA vacated and remanded for further

500

proceedings. 188 Hawai'i at 478-74, 331 P.3d
at 451-52. Jou then requested costs related to
that order pursuant to HRAP Rule 39. 133
Hawai'i at 475, 331 P.8d at 454. The ICA
denied Jou’s request and concluded, “[a]ppel-
late costs are not awardable absent a prevail-
ing party in the case.” Id, (emphasis added).
On certiorari, this court determined that,
contrary to the legal standard applied by the
ICA, the standard iterated in Seventh-Day
Adventists required the ICA to determine
which party prevailed on the appeal for the
purpose of awarding costs under HRAP Rule
389. Jou, 183 Hawai'i at 480, 831 P.8d at 458.
After applying the correct legal standard,
this court concluded that since the ICA
“granted Jou the sole remedy he sought,” he
was the prevailing party on appeal entitled to
costs pursuant to HRAP Rule 39. 183 Hawaii
at 481, 381 P.3d at 459,

MMI The ICA’s order here states that
costs are not awardable because “a prevailing
party has not been determined thus far,” and
cites to Seventh-Day Adventists, However,
this case is distinguishable from Seventh-Day
Adventists because in the latter, neither par-
ty prevailed on appeal since summary judg-
ments for each party were vacated on a
ground that both parties had stipulated did
not exist. This case is instead very similar to
Jou, As it did in Jou, the ICA looked beyond
the appellate procedure to determine wheth-
er there was a prevailing party entitled to
HRAP Rule 39 costs. We use this opportuni-
ty to make explicit that when the ICA va-
cates a circuit court judgment entered in
favor of a foreclosing mortgagee seeking
summary judgment, then the appellate court
must use its discretion to determine which
party prevailed on the appeal for the purpose
of an award of costs pursuant to HRAP Rule
89, Since the ICA vacated the grant of sum-
mary judgment for Deutsche Bank, which
was the remedy Kozma sought, it follows
that Kozma was the successful party on ap-
peal entitled to HRAP Rule 39 costs.

V. Conelusion

For the aforementioned reasons, we affirm
the portion of the judgment denying attor-
ney’s fees pursuant to HRS § 607-14 and

vacate the portion of the ICA’s judgment
denying costs pursuant to HRAP Rule 39.

403 P.3d 277

Rene UMBERGER, Mike Nakachi, Ka‘imi

Kaupiko, Willie Kaupiko, Conservation

Council for Hawai‘i, The Humane Soci-

ety of the United States, and Center for

Biological Diversity, Petitioners/Plain-
tiffs-Appellants,

ve
DEPARTMENT OF LAND AND NATU-
RAL RESOURCES, State of Hawai‘,
Respondent/Defendant-Appellee.

SCWC-13-0002125
Supreme Court of Hawai‘.

SEPTEMBER 6, 2017

Ss
®

504

Paul H. Achitoff and Summer Kupau-Odo,
Honolulu, for petitioners.

William J. Wynhoff, Honolulu, for respon-
dent.

RECKTENWALD, C.J., NAKAYAMA,
McKENNA, POLLACK, AND WILSON,
JJ.

OPINION OF THE COURT BY
POLLACK, J.

For a nominal fee per year, the Depart-
ment of Land and Natural Resources
(DLNR) authorizes the collection of fish or
other aquatic life for aquarium purposes
(aquarium collection) by issuing permits pur-
suant to Hawaii Revised Statutes (HRS)
§ 188-81 (2011) and its administrative rules,
Subject to certain terms and conditions con-
tained in the permit and restrictions provid-
ed by statutes and administrative rules, each
commercial aquarium collection permit au-
thorizes the extraction of an unlimited num-
ber of fish or other aquatic life annually
from the State’s coastal waters. DLNR also
issues recreational aquarium collection per-
mits that authorize an annual catch limit for
each permit of almost 2,000 fish or other
aquatic life. The fundamental issue present-
ed in this case is whether aquarium collec-
tion pursuant to permits issued under HRS
§ 188-31 and DLNR’s administrative scheme
is subject to the environmental review proce-
dures provided in the Hawai'i Environmental
Policy Act (HEPA). We hold that commer-
cial aquarium collection under HRS § 188-31
and DLNR’s administrative rules is subject
to HEPA’s requirements. We further hold
that the record is not adequate for this court
to determine whether recreational aquarium

collection may be exempt from HEPA, Ac-
cordingly, we remand this case to the circuit
court for further proceedings to resolve the
issue of whether recreational aquarium col-
lection under HRS § 188-81 and DLNR’s
administrative rules is also subject to
HEPA,

I. FACTS AND PROCEDURAL
HISTORY

Petitioners Rene Umberger, Mike Naka-
chi, Ka‘imi Kaupiko, and Willie Kaupiko iden-
tify themselves as concerned Hawaii citizens,
avid divers, and subsistence fishermen, Peti-
tioner Conservation Council for Hawai'i is a
nonprofit organization based in Hawai'i with
approximately 5,500 members worldwide
whose mission is to protect native Hawaiian
species and to restore native Hawaiian eco-
systems for future generations. Petitioner
Humane Society of the United States, a na-
tional nonprofit organization with over 11
million members, is dedicated to the protec-
tion of wildlife and habitat. Petitioner Center
for Biological Diversity is a nonprofit organi-
zation dedicated to preserving, protecting,
and restoring biodiversity, native species,
ecosystems, and public lands; the organiza-
tion has approximately 450,000 members,
many of whom live in Hawai'i, Respondent
Department of Land and Natural Resources
(DLNR) is the state agency that holds the
statutory authority to issue permits for
aquarium collection.

On October 24, 2012, Petitioners filed a
complaint for declaratory judgment and in-
junctive relief in the Cireuit Court of the
First Circuit (cireuit court) specifically chal-
lenging fifty aquarium collection permits that
DLNR had issued in the 120 days before the
filing of the complaint.1 The complaint sought
(1) a declaration that DLNR is in violation of
HEPA, chapter 348 of the HRS, for failing to
eomplete the HEPA review process prior to
approving the challenged permits; (2) a dec-
lavation that DLNF’s issuance and renewal

1, In addition to these named permits, Petitioners
challenged any other aquarium collection per-
mits renewed or granted by DLNR in the 120
days prior to the filing of their complaint,

2. The complaint also requested that the circuit
court retain continuing jurisdiction to review

505

of these permits without complying with
HEPA is invalid and illegal; 8) an injunction
enjoining collection under the challenged per-
mits until DLNR fully complies with HEPA;
and (4) an injunction enjoining DLNR from
approving, renewing, or issuing any aquari-
um collection permits prior to completing a
HEPA review of the issuance of the chal-
lenged permits? DLNR filed an answer re-
questing a dismissal with prejudice of Peti-
tioners’ complaint.

Thereafter, DLNR moved for summary
judgment, arguing that (1) DLNR’s practice
of not requiring environmental review of ap-
plications for aquarium collection permits is
entitled to deference and (2) environmental
review is not required for aquarium collection
permits because there is no action initiated
by an applicant requiring agency approval
(applicant action). In support of DLNR’s
motion for summary judgment, Alton K. Mi-
yasaka, an aquatic biologist in DLNR’s Divi-
sion of Aquatic Resources, submitted a decla-
ration. Miyasaka averred that “[alnyone who
applies for a permit pursuant to [HRS]
§ 188-81 and who goes through the above
process receives a permit” and that DLNR
“does not have and does not exercise discre-
tion with respect to the permits.” Thus, ac-
cording to Miyasaka, the process does not
involve discretionary consent and there is no
applicant action,

Petitioners opposed DLNR’s motion for
summary judgment, contending that (1)
DLNP’s failure to comply with HEPA prior
to issuing aquarium collection permits is not
entitled to deference because the aquarium
collection permitting statute is clear and not
subject to agency interpretation and (2)
aquarium collection is a HEPA “action” sub-
ject to DLNR’s discretionary consent.

Petitioners cross-moved for summary
judgment, contending that (1) HEPA man-
dates environmental review of aquarium col-
lection permits and (2) the issuance of

DLNR’s compliance with all judgments and or-
ders.

3. The Honorable Jeannette H. Castagnetti presid-
ed over the proceedings in this case,

506

aquarium collection permits is subject to
DLNR’s discretionary consent. In support of
Petitioners’ summary judgment motion, they
attached (1) the declarations of Gail Grabow-
sky, Petitioner Umberger, Petitioner Naka-
chi, Petitioner Ka‘imi Kaupiko, Petitioner
Wilfred Kaupiko, Marjorie F.Y. Ziegler,
Inga Gibson, Miyoko Sakashita, and Dane
Enos; (2) excerpts of The Report to the
Twenty-Fifth Legislature on the Findings
and Recommendations of Effectiveness of

the West Hawaiii Regional Fishery Manage-
ment Area [hereinafter The Report to the

Twenty-Fifth Legislature] 4; (8) excerpts of
Hawaii’s State of the Reef, published by
DLNR’s Division of Aquatic Resources 5;
and (4) DLNR’s approval of Disney Aulani’s
request for a special activity permit to col-
lect aquarium fish for a period of one year in
order to stock a saltwater swimming pool.

Gail Grabowsky, an associate professor at
Chaminade University and the Director of
the University’s Environmental Studies Pro-
gram,° stated that commercial aquarium col-
lectors self-report to DLNR the type and
quantity of marine animals that they collect
and that this practice results in underre-
porting because commercial collectors “may
either fail to turn in catch reports or inaccu-
rately quantify their catch.” Grabowsky ex-
plained that “[alquarium collectors utilize
modern and ever-improving technologies,

4. Petitioners relied on this report in asserting
that “[o]ver 200 species are collected for the
aquarium trade in Hawai'i,” that “the level of
aquarium collection along the west coast of the
island of Hawai'i have documented substantial
increases, i.e. 25 percent between 2000 and
2010, in the number of collectors and in the
collection of certain species,” and that aquarium
collection permits allow the collection of species
that are “particularly vulnerable to depletion.”

5, Petitioners relied on this publication in explain-
ing that DLNR is charged as the steward of
Hawaii's natural resources, including ocean eco-
systems, and that DLNR manages the fourth
longest coastline in the United States, including
410,000 acres of coral reefs, Petitioners also used
this publication in contending that DLNR itself
has previously recognized the detrimental effects
of removal of reef fish on the coral reef ecosys-
tem and that further studies in this area are
necessary if this activity is to continue.

6. Grabowsky holds a bachelor’s degree and a
doctorate in zoology from Duke University, has
authored or co-authored various published scien-

like scuba equipment, highly camouflaged
wetsuits, nitrox (a mix of nitrogen and oxy-
gen, usually with a higher-than-normal level
of oxygen to extend dive time), GPS sys-
tems, and underwater scooters, to increase
their ability to locate aquarium fish.” 7

According to Grabowsky, “although aquari-
um collection is prohibited along 85% of the
west coast of the island of Hawaii, less than
1% of the remaining area around the Main
Hawaiian Islands is protected.” § Grabowsky
opined that the drastic differences in species
abundances between well-protected areas
and those that are not “reveal[ ] that aquari-
um collection is removing and having detri-
mental effects on species that play important
ecological roles in reef ecosystems.” Because
the most heavily fished species are herbivo-
rous algae eaters, Grabowsky stated that
their removal from the reef ecosystem de-
ereases the reef’s ability to withstand habitat
degradation and could result in an algal-
dominated reef. Grabowsky found that “the
most greatly affected species are those that
have been heavily exploited.” Grabowsky’s
survey of relevant studies indicated “that
certain rare, vulnerable species are under
intense collection pressure, and the effects of
collection on many of their populations [are]
unknown.” ®

tific works, and has received several honors,
scholarships, and grants in her field, As relevant
here, her research has focused on ornamental
reef fish collection on O‘ahu, marine invertebrate
zoology, molecular/morphological evolution, cor-
al reef health, sea bird habitat conservation, sea
bird bycatch reduction, box jellyfish dispersal,
and natural history in Hawai'i.

7. Grabowsky declared that aquarium collectors
at times also use underwater blankets to cover
the reef so that fish would not be able to take
refuge in the coral,

8 Based on other studies, Grabowsky declared
that “there has been a severe depletion of fish”
in the Main Hawaiian Islands when compared to
the diversity and population of fish in the North-
western Hawaiian Islands.

9. According to Grabowsky, some of these vulner-
able species, such as Tinker’s butterflyfish and
psychedelic wrasse, have been listed on DLNR’s
“Species of Greatest Conservation Need,” but
they are still being collected without any limits.

Grabowsky explained that aquarium collec-
tion typically focuses on juvenile fish because
they are smaller and more aesthetically
pleasing and thus more popular to customers,
According to Grabowsky, this “can result in
top-heavy age distributions of many of the
heavily collected species on reefs, and means
that there are fewer juveniles in reef ecosys-
tems that are able to grow up to reproduce
as adults.”

Based on her research and review of rele-
vant scientific literature, Grabowsky conclud-
ed that “aquarium collection is having a det-
rimental effect on fish populations around
O‘ahu and in other areas of the state,” it
“disrupts the ecosystems and makes them
less able to respond to other stressors,” and
“it removes animals that oceupy important
and unique ecological niches.” Grabowsky
opined that prohibiting collection in certain
areas does not adequately address the prob-
lem in that, “while it may slow the disappear-
ance of the fish species and reef degradation,
.+» it will not prevent it.” Finally, Grabow-
sky declared that the “data showing that the
current permitting system and designation of
protected areas adequately protects the reef
ecosystems is lacking.”

Petitioner Umberger also submitted a dec-
laration stating that she had been diving
professionally since 1988 and had done at
least 10,000 scuba dives around the Main
Hawaiian Islands and in various international
locations. Umberger stated that, based on
her observations during her dives through
the years, fish species that are highly prized
by the aquarium trade have abruptly disap-
peared from a lot of dive sites.!°

Based on Umberger’s experience diving
and snorkeling along the west coast of the
island of Hawai'i, she declared that there is a
marked difference in the condition between
those reefs that are open to collection and
those that are not: reefs open to collection
have fewer colorful and aesthetically pleasing
fish and invertebrates. Umberger also attest-

10. For example, Umberger explamed that the
three dragon eels (which could retail for over a
thousand dollars apiece) and several flame an-
gelfish that she had been seeing in the Red Hill
area of south Maui for years had disappeared, In
addition, during the years that she had spent
scuba diving, Umberger stated that she saw cor-

507

ed that she had “noticed a dramatic reduc-
tion in biodiversity on reefs and in the densi-
ty of species of fish that are collected by the
aquarium trade,” Finally, Umberger opined
that DLNR’s current permitting practices
“will have irreversible, negative conse-
quences for Hawai‘’s reef ecosystems and
[her] interests in enjoying and protecting
these precious areas,”

Petitioner Nakachi also submitted a decla-
ration in support of Petitioners’ summary
judgment motion. Nakachi stated that he is a
resident of Kailua-Kona on the island of Ha-
wai‘i and a scuba diving tour operator since
1987 who has gone on tens of thousands of
scuba dives, both recreationally and as part
of his scuba diving tour business, in and
around Hawai'i waters for the past forty
years, According to Nakachi, his “recreation-
al and aesthetic interests in seeing healthy
reef ecosystems full of colorful fish are
harmed by aquarium collection under the
challenged permits.” Nakachi also averred
that his economic interests are harmed be-
cause his business relies on a healthy marine
environment in order to be successful, Naka-
chi described his experience in which a dive
site that was once populated by colorful fish
species experienced a decline in the fish pop-
ulation and coral damage when aquarium
collectors discovered the dive site’s location."
Over the years that he had spent diving in
the waters of Hawai'i, Nakachi observed
“negative changes on the coral reefs ...
because of aquarium collection, particularly
along the west coast of the island of Hawai'i.”
Based on Nakachi’s diving experience in
State waters, he declared that “[tIhere is a-
very noticeable difference in aquarium fish
species’ populations and coral damage be-
tween the areas that are open to collection
and the areas that are closed.” Nakachi
averred that his clients “have expressed con-
cern ... about the changes they see on the
coral reefs where they dive,” the fact that
there are fewer fish in the reefs, and dam-

als physically broken apart to expose the crevices
in the reef.

11. One site on the island of Hawai'i had “no fish
left” by 2006 when Nakachi went back to scuba
dive there,

508

aged corals. According to Nakachi, these con-
cerns had prompted his clients not to dive in
Hawai'i anymore.

Nakachi echoes Grabowsky’s description of
the technology he had observed aquarium
collectors use over the years, see supra.
Based on the decline that he had witnessed
in aquarium fish population and the health of
corals where he dives, Nakachi stated that he
is “afraid that [the] reef ecosystems will con-
tinue to decline until they are not able to
sustain marine life anywhere near the previ-
ous levels.”

Petitioners Ka‘imi Kaupiko and Wilfred
“Willie” Kaupiko also submitted declarations
in support of Petitioners’ summary judgment.
motion. The Kaupikos are Native Hawaiian
subsistence fishermen living in the village of
Miloli‘i, which is located on the west side of
the island of Hawai‘. They attested that
their cultural, subsistence, and aesthetic in-
terests are harmed by DLNR’s issuance of
aquarium collection permits without first en-
gaging in HEPA review “because aquarium
collectors remove species of fish that [they]
fish for” and because they had “noticed a
substantial decline in the variety and number
of fish on reefs along the west coast of
Hawai'i over the past decade.” Based on the
Kaupikos’ experience, when they had gone
out fishing, they had hardly seen any types
of fish that are collected by the aquarium
trade, even in areas near Miloli‘i that are
closed to collection.

Ka‘imi Kaupiko stated that the dwindling
number of fish affects his ability to feed
himself and his family and negatively impacts
the ecosystem of which they are a part.
Katimi also declared that he had noticed cor-
al dying after being damaged by boat an-
chors and pollution and that “removal of fish
for aquarium collection further disrupts an
already-stressed ecosystem.” Ka‘imi attested
that “[t]he reefs on the west coast of the

12. Willie Kaupiko stated that he had seen, in
January and November 2012, aquarium collec-
tors taking fish in areas where collection is pro-
hibited.

13, Because Ka'imi Kaupiko is involved in edu-
cating young people in Miloli'i about Hawaiian
cultural traditions involving fishing and the
ocean, he also declared that aquarium collection

island of Hawai'i do not look as healthy as
they used to” and that he is “worried about
the ability of [the] reef ecosystems to survive
so that future generations can continue fish-
ing and practicing ... Native Hawaiian tra-
ditions.” 18

The Kaupikos concluded that aquarium
collection under the challenged permits af-
fects their ability to catch fish for food, dis-
rupts the ecosystem, hurts the reef’s ability
to withstand harm from things like pollution
and physical damage, and harms their cultur-
al, subsistence, recreational, and aesthetic in-
terests, as well as their ability to use, enjoy,
and protect the ocean and coral reefs for
future generations’ use and education,

Marjorie Ziegler, the Executive Director of
Petitioner Conservation Council for Hawaii,
and Miyoko Sakashita, a staff member of
Petitioner Center for Biological Diversity
(CBD), submitted declarations stating that
the members of their respective organiza-
tions are harmed by DLNR’s aquarium col-
lection permitting system “because it threat-
ens to impair their aesthetic, subsistence, and
recreational interests in using, enjoying, and
protecting the State’s reefs.” “ They further
averred that “DLNR’s failure to comply with
its legal obligations deprives” their organiza-
tions and their “members of both the infor-
mation that would be generated through the
HEPA process and the opportunity to partie-
ipate actively in the process of environmental
review.”

Inga Gibson, the Hawai'i State Director of
Petitioner Humane Society of the United
States (HSUS), declared that DLNR’s issu-
ance of aquarium collection permits without
HEPA review “adversely affects HSUS’s or-
ganizational interests in protecting animals
from unnecessary harm, suffering, and death,
as well as its members’ and supporters’ abi
ty to protect, observe, and enjoy Hawai‘i’s
coral reef animals and ecosystems that are

affects his “ability to educate children in the
village about healthy reefs and fish populations.”

14, Sakashita also stated that CBD’s members,
including herself, “regularly use Hawai'i’s coast-
al waters for recreation, aesthetic enjoyment, ob-
servation, research, and other educational activi-
ties.”

and will be affected by collection under the
challenged permits.” Gibson averred that
aquarium collectors remove types of fish that
serve a larger role in reef ecosystems, a
practice that “has negative effects on other
marine species that inhabit coral reefs.” Gib-
son also stated that HSUS views “aquarium
collection as a harmful, disposable trade, be-
cause up to forty percent of fish may die
before reaching their final destination and
many of the collected fish are not suitable for
living in captivity, surviving only a fraction of
their natural lives.” Gibson concluded that
DLNR’s permitting regime “affects HSUS’s
members’ recreational, aesthetic and edu-
cational interests in protecting, studying, and
observing these fish and invertebrates and
their coral reef habitats.”

Dane Enos, a resident of Kailua-Kona and
a former commercial aquarium fish collector,
submitted a declaration in support of Peti-
tioners’ summary judgment motion describ-
ing the procedure he followed in collecting
aquarium fish before he left the trade. Enos
explained that his “decisions about which
species to take and how many animals to
collect were based on consumer demand.”
Once he received an order for a particular
species from a wholesaler, he would “go out
to the reefs to try and fill that order” and
that “[t]he price [he] would get paid ...
would fluctuate depending on whether the
wholesalers already had that particular spe-
cies of fish in their shops.” Enos’s practice
was to “operate[] on a fourteen to eighteen
month system of rotation at sites where [he]
eollected[] to give fish time to reproduce
before going back to the same spot.” Enos
declared that his commercial aquarium col-
lection permit allowed him “to take an unlim-
ited type and quantity of species from coastal
waters” and “to collect anywhere in the State
of Hawaii other than in areas ... where
aquarium collection was prohibited.” Enos
stated that, when he first started collecting
in 1985, there were not as many collectors as
there were when he left the trade in 2002. At
the tail end of his participation in the trade,
Enos described how other collectors would
take “fish from the same spot too frequently,
affecting the number of animals and the bal-
ance of the ecosystem.” Some collectors, ac-
cording to Enos, also broke off finger corals

509

so as to create a uniform surface for their
nets, Enos attested that “after witnessing
collectors over-harvesting fish and inverte-
brates and damaging the reefs, in addition to
the stress on the reefs from other factors,
like pollution, [he] decided that [he] could not
continue collecting” and left the trade.

DLNR opposed Petitioners’ motion for
summary judgment, reiterating its position
that there is no HEPA “action” and no “ap-
proval” involved in aquarium collection and
that the environment is not harmed by the
current permitting system. In support of its
opposition, DLNR submitted a declaration
from Alton Miyasaka, averring that DLNR’s
Division of Aquatic Resources “continually
monitors and studies populations of fish and
other aquatic life potentially affected by
aquarium fish permits issued pursuant to
[HRS] § 188-31” and that the current popu-
lation levels of aquarium fish are sustainable.
Miyasaka stated that the collection “areas
are quite limited,” that Hawai'i and O‘ahu are
the “main collecting islands,” and that Kaua‘i,
Molokai, and Lana‘i “have essentially no con-
tribution to the statewide totals and may be
considered unfished.” On the island of Ha-
wai'i, Miyasaka continued, “85% of the 90-
mile Kona coast is closed to aquarium collect-
ing.” However, Miyasaka stated that, al-
though the 90-mile Kona coast “represent{s]
approximately 12.6% of the total coastline of
the state, [it] accounted for 68% of the state-
wide total catch numbers” in 2011. Miyasaka
averred that the top ten areas where aquari-
um collection is conducted “account for 90%
of all animals collected” and that “[t]hese top
ten areas represent less than 22% of the
entire coastline.” As such, Miyasaka repre-
sented that “the vast majority of the State’s
coastline is largely unfished.”

Miyasaka declared that the annual total for
animals caught from 1999 to 2010 ranged
from 412,587 to 1,019,720 per year, but he
reasoned that “most of these numbers are
from invertebrates rather than fish” (e., the
ratio of invertebrates to fish ranges from
50% to close to 90% per year), According to
Miyasaka, “this is significant because inver-
tebrates generally reproduce faster than fish
and therefore can replenish themselves fast-
er.” However, Miyasaka neither addressed

510

nor referenced Petitioners’ contentions that
were based on excerpts of The Report to the
Twenty-Fifth Legislature and Hawaii's State
of the Reef, both of which were published by
DLNR, See supra notes 4 & 5, These publi-
eations stated that aquarium collection per-
mits allow the collection of species that are
particularly vulnerable to depletion and rec-
ognized the detrimental effects of removal of
reef fish on the coral reef ecosystem,

The Report to the Twenty-Fifth Legisla-
ture, on which Petitioners relied as part of
their summary judgment motion, also ad-
dressed the issues surrounding the collection
of invertebrates for aquarium purposes. The
Report stated that researchers studying the
Florida marine aquarium fishery had found
that “the once small ornamental fish fishery
has grown dramatically in recent years to
become a large scale invertebrate-dominated
industry.” The researchers noted that the
focus of aquarium collection shifted from
“purely ornamental species to ones providing
biological services in home aquaria,” such as
“TiInvertebrate grazers [that] can control al-
gal growth,” The researchers concluded that
“the intensive collecting of such species was
ecologically unsound.”

Miyasaka also described the process used
in aquarium collection;

‘Typically each animal is hand caught. The

collector sets [the] net, guides the fish into

the net, then hand scoops the fish off the
net, Each fish is carefully selected for its
condition (no damage to fins or body), size,
and species. Fish that are damaged or
imperfect are returned to the ocean. Any
fish that is not the right size, color, or
species is not taken, Little or no unwanted
fish are taken so there is little or no by-
eatch (a fish that is taken unintentionally).

This attention to detail is why the marine

life in the Hawaiian aquarium fishery is

considered one of the highest quality prod-
ucts in the world.

In their reply to DLNR’s opposition, Peti-
tioners argued that aquarium collection is an
“action” and that aquarium collection permit

15, The circuit court relied on Merriam-Webster’s
definition of “program” and “project.” See Pro-
gram, Merriam-Webster, hitp/www.
merriamwebster.com/dictionary/program (last

applications require DLNR’s “approval,” ie.,
discretionary consent, In addition, Petition-
ers challenged DLNR’s assertion that aquar-
ium collection was being conducted in a sus-
tainable and environmentally sound manner,
stating that this assertion is not based on
anything other than Miyasaka’s conclusory
declaration. Thus, Petitioners concluded that
HEPA applies to aquarium collection under
permits issued by DLNR.

After a hearing on the respective parties’
motions for summary judgment, the circuit
court granted DLNR’s motion for summary
judgment and denied Petitioners’ cross mo-
tion for summary judgment, reasoning that
there is no applicant “action” that triggers
HEPA in this case, The circuit court stated
that environmental review under HEPA is
required only if there is an “action,” ie, a
“program” or “project.” Because “program”
and “project” are not statutorily defined un-
der HEPA, the cireuit court, relying on a
generally accepted dictionary, defined “pro-
gram” “as a ‘plan or system under which
action may be taken toward a goal.’” The
eiveuit court defined “project” “as ‘a specific
plan or design; scheme’ or a ‘planned under-
taking.’ ” 5 Because aquarium collection, ac-
cording to the circuit court, is not a “specifi-
cally identifiable program[] or project[],”
the court determined “that as a matter of
law, ‘aquarium collection’ is not an applicant
‘action’ that triggers HEPA.” The circuit
court entered its final judgment on June 24,
2018,

IL ICA PROCEEDINGS

Petitioners appealed from the order deny-
ing their cross motion for summary judg-
ment, the order granting DLNR’s motion for
summary judgment, and the circuit court’s
final judgment. In its published opinion, the
Intermediate Court of Appeals (ICA) out-
lined the steps for evaluating whether an
action is subject to environmental review.
Preliminarily, there must be a “program or
project: to be initiated by an agency or appli-
cant.” Umberger v. Dep’t of Land & Nat,

visited July 13, 2017); Project, Merriam-Webster,
http//www.merriam-webster.com/dictionary/
program (last visited July 13, 2017).

Res., 188 Hawai'i 508, 512, 882 P.8d 820, 324
(App. 2016) (quoting HRS § 848-2 (2010). In
addition, the program or project must (1) be
initiated by an agency or a private party and
require government approval; (2) qualify un-
der one or more of the nine categories of
Jand uses and administrative acts enumerat-
ed in HRS § 348-5(a) (2010); and (8) not be
exempt under HRS § 343-6(a)(2) (2010). Id.
at 512-18, 882 P.8d at 824-25.

The ICA characterized the “action” in this
case as “the ‘taking of marine or freshwater
nongame fish and other aquatic life for
aquarium purposes,’ that is initiated by an
applicant’s request for an aquarium fish per-
mit.” Id, at 518, 882 P.8d at 325 (quoting
HRS § 188-81(a) (2011)), The ICA empha-
sized that while the “[alppellants described
the alleged action as the ‘directed, intention-
al, large-scale commercial removal under
each [plermit, and collectively under the doz-
ens of such [plermits DLNR issued,” they
sought “an interpretation of HEPA that
would apply equally to both recreational and
commercial aquarium fish permits,” Id. at
518-14, 382 P.3d at 325-26,

The statutory analysis of the ICA com-
menced with an examination of the meaning
of “action.” While HEPA defines “action” as
“any program or project to be initiated by an
agency or applicant,” the ICA acknowledged
that HEPA does not define “program” and
“project.” Id. at 514, 882 P.8d at 326 (quoting
HRS § 348-2). The ICA discussed various
decisions issued by the appellate courts of
Hawai'i that held there was an “action” un-
der HEPA such that the environmental re-
view process was triggered, Those cases in-
volved “[t]he Napilihau Villages, Mahukona
Lodge, Koa Ridge project, harbor improve-
ments for the Superferry Project, Laumaka,
subdivision, and a research program concern-
ing genetically modified algae.” Id, at 516,
882 P.38d at 828. In these cases, the ICA
observed that there were “specifically identi-
fiable programs or projects.” Id, According
to the ICA, aquarium collection is unlike any
of the activities that this court has previously
considered as programs or projects for the
purposes of HEPA, Id. In concluding that
aquarium collection is not a “specifically iden-
tifiable program or project,” the ICA empha-

511

sized that aquarium collection “includes a
parent netting one or two fish from a stream
for his or her child’s fish tank, as well as
larger scale commercial operations.” Id.

In addition, the ICA reasoned that HEPA
review is not the sole mechanism through
which marine life and reef ecosystem could
be protected from unconstrained removal in
large numbers. The ICA highlighted other
statutory frameworks and administrative
rules that allow DLNR to manage aquatic
life and resources, including catch limits and
restrictions for certain species applicable to
commercial aquarium collection permit hold-
ers and DLNR’s authority to attach condi-
tions to commercial marine licenses and per-
mits, Id,

Further, the ICA noted that DLNR issues
permits and licenses for activities similar to
aquarium collection—e.g., bait fish licenses,
freshwater game fish licenses, hunting licens-
es, camping permits, etc. According to the
ICA, there is “no rational distinction or logi-
cal reason why HEPA environmental review
procedures should be required for aquarium
fish permits, but not for these other types of
licenses and permits.” Id. Thus, the ICA
concluded that aquarium collection under
permits issued pursuant to HRS § 188-81
does not qualify as a HEPA “action.” Id. at
517, 882 P.8d at 829,

The ICA, however, rejected DLNR’s argu-
ment “that, even if aquarium collection fell
within the definition of an ‘applicant action,
it is not subject to HEPA because there is no
diseretionary agency approval of aquarium
fish permits.” Id, at 517-18, 382 P.8d at 829-
80. The ICA determined that the fact that
the application for an aquarium fish permit is
online and completely automatic does not
equate to DLNR lacking discretion because
the plain language of HRS § 188-81, as sup-
ported by its legislative history, explicitly
confers discretion on DLNR in deciding
whether to approve an application, Id, at 518,
382 P.3d at $80. The ICA also reasoned that
the online application “is simply the means
by which DLNR has determined to exercise
its discretion.” Id. Thus, the ICA affirmed
the circuit court’s judgment that granted
DLNR’s motion for summary judgment and

512

denied Petitioners’ cross motion for summary
judgment. Id.

Il, ARGUMENTS ON CERTIORARI

In their application for writ of certiorari,
Petitioners advance four contentions: (1) the
legislature intended the words “program”
and “project” to encompass a broad scope of
human activity, including aquarium collec-
tion; (2) HEPA applies to individuals and
provides mechanisms to resolve practical dif-
ficulties that may be encountered during the
environmental review process’; (8) the
ICA’s construction of “program or project”
undermines DLNR’s public trust and statu-
tory duties to conserve Hawaii's marine re-
sources; and (4) other regulatory tools that
DLNR possesses are not substitutes for
HEPA, nor do such tools excuse violations of
HEPA.

In its response, DLNR contends that (1)
the ICA was correct in concluding that
aquarium collection is not an “action” within
the meaning of HEPA; (2) the environment is
not harmed by the present system and any
harm to the environment is irrelevant to the
analysis; (8) Petitioners’ argument regarding
public trust was never pleaded and, in any
event, does not assist this court in construing
HRS chapter 843; and (4) the ICA erred in
holding that the issuance of aquarium collec-
tion permits requires DLNR’s discretionary
consent.

IV. STANDARDS OF REVIEW

HM A trial court’s ruling on a motion
for summary judgment is reviewed de novo
under the right/wrong standard. Salera_v.
Caldwell, 187 Hawai'i 409, 415, 375 P.3d 188,
194 (2016), “The interpretation of a statute is
a question of law reviewable de novo.” Kauai
Springs, Inc, v. Planning Comm’n of Cty. of
Kaua'i, 188 Hawai'i 141, 168, 324 P.3d 951,
978 (2014) (quoting Franks v. City & Cty. of

16. Petitioners argue that the ICA’s concern about
one-fish recreational aquarium collection is un-
justified because that activity may be exempted
from HEPA pursuant to HRS § 343- ea)
(2010) as it may fall within one of DLNR'’s ex-
empt categories—minor alteration in the condi-
tions of land, water, or vegetation. Petitioners
also assert that “tiering,” which allows an agen-

Honolulu, 74 Haw. 828, 384, 843 P.2d 668, 671
(1998).

V. DISCUSSION

HI The central question in this case is
whether aquarium collection pursuant to per-
mits issued under HRS § 188-31 (2011) and
DLNR’s administrative rules is subject to
the environmental review provisions of
HEPA. An environmental assessment under
HEPA is required if three conditions are
satisfied: (1) the proposed activity is an “ac-
tion” under HRS § 348-2 (2010); (2) the ac-
tion proposes one or more of the nine cate-
gories of land uses or administrative acts
enumerated in HRS § 348-5(a) (2010); and
(8) the action is not declared exempt pursu-
ant to HRS § 348-6(a)(2) (2010). See Sierra
Club _v. Dep’t of Transp. of the State of
Haw., 115 Hawaii 299, 306, 167 P.3d 292, 299
(2007). In cases where the proposed action is
initiated by a private party for approval by a
government agency, an additional require-
ment is that the agency exercises discretion-
ary consent in the approval process. HRS
§ 343-5(e) (Supp. 2012). The circuit court
granted DLNR’s summary judgment motion
and denied Petitioners’ cross motion for
summary judgment on the grounds that
aquarium collection under HRS § 188-31 is
not a HEPA “action.” Thus, if there is a
genuine issue of material fact as to whether
aquarium collection is a HEPA “action,” then
summary judgment in favor of DLNR on
this basis was erroneous. If, on the other
hand, there is no genuine issue of material
fact that aquarium collection under HRS
§ 188-31 and the DLNR administrative
scheme is a HEPA “action,” that it falls
within one of the categories of land uses or
administrative actions set forth in HRS
§ 348-5(a), that it is not exempt from HEPA,
and that the issuance of a permit requires
DLNR’s exercise of discretionary consent,

cy to incorporate previous environmental assess-
ments and impact statements or to group similar
actions in a single environmental assessment or
impact statement, would address the ICA's ap-
parent concern about the burden on small-time
aquarium collectors of complying with HEPA’s
requirements,

then the cireuit court erred in denying Peti-
tioners’ cross motion for summary judgment.

A. Whether Issuance of a Permit
for Aquarium Collection is a
HEPA “Action”

1. The Plain-Language Construction
of “Action” under HRS § 343-2

HN To determine whether aquarium
collection is a HEPA “action,” we begin by
interpreting HRS § 843-2, which sets forth
the statutory definition of “action.” HEPA
defines “action” as “any program or project
to be initiated by any agency or applicant.” 1”
HRS § 343-2. “Program” and “project” are
not defined terms under HEPA. As such,
“this court may resort to legal or other well
accepted dictionaries as one way to deter-
mine the ordinary meaning” of those words.
State v. Guyton, 185 Hawai'i 372, 378, 351
P.8d 1188, 1144 (2015) (quoting State v. Pali,
129 Hawai'i 363, 370, 300 P.38d 1022, 1029
(2018). “Program” is generally defined as “a
plan or system under which action may be
taken toward a goal.” 8 “Project” is defined
as “a specific plan or design” or “a planned
undertaking.” 1°

In determining whether aquarium collec-
tion is a program or project, the crucial first
step is properly defining the activity author-
ized by aquarium collection permits issued by
DLNR, See Sierra Club, 115 Hawai'i at 306
n.6, 167 P.3d at 299 n.6 (“An important pre-
liminary step in assessing whether an ‘action’
is subject to environmental review is defining

17. It follows from this definition that there are
two types of HEPA “actions”: agency actions and
applicant actions. Sierra Club, 115 Hawai'i at
306, 167 P.3d at 299. The parties’ position in this
case is that aquarium collection under HRS
§ 188-31 constitutes an applicant action and not
an agency action. An applicant action is initiated
“by a private party who requires government
approvals for the project to proceed.” Id.

18, Program, Merriam-Webster, _https://www.
merriamwebster.com/dictionary/program (last
visited July 14, 2017).

19. Project, Merriam-Webster, _https://www.

merriamwebster.com/dictionary/project (last vis-
ited July 14, 2017).

20. Although permits issued under HRS § 188-31
are valid for no longer than one year, DLNR

513

the action itself.”), HRS § 188-31(a) provides
that
[elxeept as prohibited by law, the depart-
ment, upon receipt of a written application,
may issue an aquarium fish permit, not
longer than one year in duration, to use
fine meshed traps, or fine meshed nets
other than throw nets, for the taking of
marine or freshwater nongame fish and
other aquatic life for aquarium pur-
poses.[20)
This statutory subsection, together with
DLNR’s administrative rules, allows permit
applicants to engage in two general types of
activities: recreational aquarium collection
and commercial aquarium collection.
Recreational aquarium collection permits—
those “issued ... for non-commercial use,”
Hawaii Administrative Rules (HAR) § 18-77-
2 (effective 2015)—allow the extraction of up
to “five fish or aquatic life specimens per
person per day,” HAR § 18-75-14 (effective
2007). Thus, each recreational permit author-
izes the collection of up to 1,825 fish or other
aquatic life within a one-year period. Id, In
the case of commercial aquarium collection
permits, which is intended for issuance to
persons who collect “for profit or gain or as a
means of livelihood,” HAR § 18-74-1 (effec-
tive 2010), DLNR has not promulgated any
rules that establish limits on the total num-
ber of fish and other aquatic life that com-
mercial collectors may extract for the entire
period in which the permits are effective. See
HAR § 13-75-14 (providing a total catch limit.
only for recreational collection).?4

allows such permits to be renewed instead of
requiring holders of expired permits to reapply.
See Licenses & Permits, State of Haw. Division
of Aquatic Resources, http:/dlnr.hawaii.gow/dar/
licenses-permits/ (last visited July 24, 2017).

21, A few statutes and regulations restrict or limit
the manner and extent to which aquarium collec-
tion may be conducted: bag and size limits for
certain aquatic species on O'ahu (see HAR § 13-
77-6(b), (c), (d) (effective 2015)) and in West
Hawai'i (see HAR § 13-60.4-4 (effective 2013),
Jength and height requirements for allowed mesh
nets that apply to O'ahu (see HAR § 13-77-6(a)),
monthly reporting requirements for commercial
collectors (see HRS §§ 189-3 (2011), 189-3.5
(2011); HAR § 13-74-20(d) (effective 2010)), and
DLNR's power pursuant to HAR § 13-75-14(4)
(effective 2007) to attach conditions to commer-
cial permits. Permits issued are also subject to

514

HRS § 188-81 also clearly delineates the
aquarium collection practices that must be
complied with to obtain a permit when aquar-
ium collectors are allowed to use fine meshed
traps or nets to take fish and other aquatic
life for aquarium purposes, Subsection (b) of
HRS § 188-831 states that, “[e]xcept as pro-
hibited by law, the permits shall be issued
only to persons who can satisfy the depart-
ment that they possess facilities to and can
maintain fish and other aquatic life alive and
in reasonable health.” HRS § 188-31(b).

The extraction of fish or other aquatic life
under aquarium collection permits is also
limited to “aquarium purposes,” HRS § 188-
81(©), which, per the statute, “means to hold
salt water fish, freshwater nongame fish, or
other aquatic life alive in a state of captivity
as pets, for scientific study, or for public
exhibition or display, or for sale for these
purposes,” HRS § 188-81(d)(1).

Based on the language of HRS § 188-81,
the framework it establishes, and the admin-
istrative rules that DLNR promulgated pur-
suant to HRS § 188-81, the defined activity
authorized under an aquarium collection per-
mit is as follows:

(1) the extraction annually from State
waters of an unlimited number of fish
or other aquatic life for profit or other
gains (in the case of commercial
aquarium collection) or of 1,825 fish or
other aquatic life for non-commercial
purposes (in the case of recreational
aquarium collection), subject to the
terms and conditions of the permit
and restrictions set by law;

(2) through the use of fine meshed nets
or traps;

@) by individuals who can satisfy DLNR
that they possess facilities that can
maintain aquatic life alive and in rea-
sonable health; and

terms and conditions imposed by DLNR that are
generally consistent with or reference the stat-
utes and rules that relate to aquarium collection.

22, The declarations that Petitioners submitted,
describing several aquarium collection practices
that holders of permits employ, firmly support
the conclusion that aquarium collection under
HRS § 188-31 is both a “program” and “pro-
ject’: sophisticated and advanced. techniques—

(4) for the purpose of holding aquatic life
alive in a state of captivity as pets, for
sefentifie study, or for public exhibi-
tion or display, or for sale for these
purposes,

TM The course and scope of conduct al-
lowed by both recreational and commercial
aquarium collection permits issued under
HRS § 188-31 and DLNR’s administrative
scheme encompass activity that qualifies as a
“program” or “project.” The activity is a
“specific plan” or “a planned undertaking”—
and, therefore, a “project”—because it in-
volves the systematic and deliberate extrac-
tion of aquatic life using procedures, equip-
ment, facilities, and techniques authorized or
required by HRS § 188-31 and related ad-
ministrative rules for the specific purpose of
holding captive such aquatic life for aquarium
purposes in order to earn profit (in the case
of commercial permit holders) or for non-
commercial use (in the case of recreational
permit holders).

In the same vein, both recreational and
commercial aquarium collection are “pro-
grams” within the plain meaning of that
word: the “plan or system under which action
may be taken” is the purposeful and method-
ical extraction of aquatic life from State wa-
ters through the use of fine meshed nets and
traps and the transfer of such aquatic life to
facilities that are capable of keeping the col-
lected aquatic life alive. The “desired goal” is
to take aquatic life from its habitat and hold
it in a state of captivity for aquarium pur-
poses, as defined by HRS § 188-31(d)(1), in
order to earn profits (in the case of commer-
cial permit holders) or for non-commercial
use (in the case of recreational permit hold-
ers), Additionally, the method by which ex-
traction is accomplished involves instruments
and techniques that enhance the efficiency
and amount of the collection.” Accordingly,
aquarium collection conducted under permits

such as the use of scuba technology, underwater
jet propulsion systems, nitrox tanks, fizzing, un-
derwater blankets, etc—are utilized to extract
aquatic life from State waters for aquarium pur-
poses. These averments illustrate how elaborate,
methodical, and systematic aquarium collection
under HRS § 188-31 is practiced in order to
achieve the ultimate purpose of holding captive
aquatic life for specific, statutorily enumerated
purposes.

issued pursuant to HRS § 188-81 and
DLNR’s administrative rules is a “program
or project” and therefore constitutes a
HEPA “action.”

2. HEPA’s Purpose and Structure Sup-
port the Plain-Language Construc-
tion of the Word “Action”

Our interpretation of “action,” together
with our conclusion that aquarium collection
under HRS § 188-81 and DLNR’s adminis-
trative rules constitutes a HEPA “action,” is
confirmed by the purpose of HEPA, as ex-
plained in HRS § 843-1 (2010), and by
HEPA’s framework. See State v. Bovee, 139
Hawai'i 580, 544 n.18, 894 P.3d 760, 774 n.13
(2017) (explaining that laws in pari materia—
those dealing with the same subject matter—
shall be construed with reference to each
other); State v, Alangeas, 184 Hawai'i 515,
526, 345 P.8d 181, 192 (2015) (stating that
legislative history is relevant in statutory
construction even when the language appears
clear because it ensures that the literal inter-
pretation is consonant with the underlying
policy that the legislature sought to imple-
ment through the statute, thereby avoiding
an absurd or unjust result),

It has been frequently stated that
“HEPA’s purpose is ‘to establish a system of
environmental review which will ensure that
environmental concerns are given appropri-
ate consideration in decision making along
with economic and technical considerations.’ ”
Nuuanu Valley Ass’n v. City & Cty. of Hono-
Julu, 119 Hawai'i 90, 108, 194 P.8d 581, 544
(2008) (quoting HRS § 343-1), The Hawai'i
Legislature enacted HEPA after finding

23. See Unite Here! Local 5 v. City & Cty. of
Honolulu, 123 Hawai'i 150, 155, 231 P.3d 423,
428 (2010) (expansion of the Turtle Bay resort,
including the addition of hotel and condominium
‘units and infrastructure); Nuuanu_Valley Ass'n,

515

“that an environmental review process will
integrate the review of environmental con-
cerns with existing planning processes of the
State and counties and alert decision makers
to significant environmental effects which
may result from the implementation of cer-
tain actions.” HRS § 848-1. The legislature
also found “that the process of reviewing
environmental effects is desirable because
environmental consciousness is enhanced, co-
operation and coordination are encouraged,
and public participation during the review
process benefits all parties involved and soci-
ety as a whole.” Id. Environmental impact
statements also “allow decision-makers to
make informed decisions” when confronted
by certain proposed actions. H. Stand,
Comm, Rep. No, 521, in 2005 House Journal,
at 1242,

The purpose of HEPA and the legislature’s
intent in enacting HEPA indicate that it was
not meant to be applied only to a narrow set
of activities, See generally Pearl Ridge Es-
tates Cmty. Ass’n v. Lear Siegler, Inc., 65
Haw. 183, 140-41, 648 P.2d 702, 707 (1982)
(noting that HEPA’s scope is wider “than the
federal or the typical state analogue” (quot-
ing Molokai _Homesteaders Coop. Ass’n v.
Cobb, 63 Haw. 458, 465, 629 P.2d 1184, 1148
(1981))), This determination is supported by
the wide range of activities and courses of
conduct to which HEPA has been applied,
including construction of buildings, expansion
of or modifications to preexisting buildings,
development of residential communities, and
other real estate developments; construc-
tion on government lands in order to build or
connect to sewage lines, waterlines, or other
infrastructure; development of public

Haw.App, 387, 390, 722 P.2d 1055, 1057 (1986)
(construction of a shopping and parking complex
in Waikiki),

24, See Sierra Club v, Office of Planning, State of

119 Hawai'i at 94, 194 P.3d at 535 development
of a subdivision consisting of nine residential
lots); Price v. Obayashi Haw. Corp. 81 Hawai'i
171, 173, 914 P.2d 1364, 1366 (1996) (recre-
ational development project on the North Shore
of O'ahu); Kahana Sunset Owners Ass'n v. Cty. of

Haw., 109 Hawaii 411, 413, 126 P.3d 1098,
1100 (2006) (tunneling underneath several state
highways in order to construct a sewage trans-
mission line and a water transmission line); Citi-
zens for Prot, of N. Kohala Coastline v. Cty. of
Haw, 91 Hawai'i 94, 103, 979 P.2d 1120, 1129

Maui, 86 Hawaii 66, 68, 947 P.2d 378, 380
(1997) (multi-family residential development on
Maui); Waikiki Resort Hotel, Inc, v. City & Cty.
of Honolulu, 63 Haw. 222, 224, 624 P.2d 1353,
1356-57 (1981) (construction of a hotel building
in Waikiki); Hewitt v. Waikiki Shopping Plaza, 6

(1999) (construction of underpasses below a state
highway for golf carts); McGlone v. Inaba, 64
Haw. 27, 29, 636 P.2d 158, 160-61 (1981) (con-
struction of underground utilities on state con-

servation land); Molokai_Homesteaders Coop.
Ass'n, 63 Haw. at 455, 629 P.2d at 1137 (use of

516

transportation; °° construction of power gen-
erating facilities and the drilling of explorato-
ry geothermal wells;*° the growing of im-
ported algae on facilities in state lands; ®” and
the Management Plan of the Observatory
Site on the summit of Haleakala in which a
new solar telescope was under construction.”
The commonality among the varied activities
to which HEPA has been applied is their
potential of producing “environmental con-
cerns” that HEPA intended to be “given
appropriate consideration in decision making
along with economic and technical consider-
ations.” See Nuuanu Valley Ass’n, 119 Ha-
wai'i at 108, 194 P.3d at 544 (quoting HRS
§ 348-1). The diversity of the subject matter
of previous HEPA cases affirms that the
word “action” has not been (and should not
be) narrowly construed. In this light, our
determination that aquarium collection is a
HEPA “action” furthers HEPA’s purpose as
stated under HRS § 188-81: it “will ensure
that environmental concerns are given appro-
priate consideration in decision making” so
as to foster a holistic and thoughtful decision-
al process. HRS § 843-1. Given the nature,
magnitude, and scale of aquarium collection
under HRS § 188-81 and DLNR’s adminis-
trative rules, any environmental effects that
aquarium collection may have fall squarely
within the ambit of what HEPA’s environ-
mental review framework intends to inte-
grate into governmental decision making.”

Lastly, our interpretation of “action” and
our conclusion that it includes aquarium col-
lection pursuant to permits issued under
HRS § 188-31 and DLNR’s administrative
rules are also supported by HEPA’s frame-
work. As discussed, the fact that a proposed
activity qualifies as an “action” does not

transmission facilities of the Molokai Irrigation
‘System to transport water to a resort complex on
the west end of Moloka‘i); Life of the Land v.
Ariyoshi, 59 Haw. 156, 157-67, 577 P.2d 1116,
1117 (1978) (construction of the Central Maui
Water Transmission System).

25. See Sierra Club, 115 Hawai'i at 305, 167 P.3d
at 298 (proposed developments to the Kahului
Harbor in order to accommodate the operations
of the Hawai'i Superferry project).

26. Kepo'o v, Kane, 106 Hawai'i 270, 275, 103
P.3d 939, 944 (2005) (power generating facility);
Medeiros v, Haw. Cty. Planning Comm'n, 8 Haw.
App. 183, 186, 797 P.2d 59, 61 (1990) (drilling of

mean that it would require environmental
review, since the activity must also fall within
a statutory category listed in HRS § 848-5(a)
and not be exempt from HEPA, See Sierra.
Club, 115 Hawaii at 306, 167 P.8d at 299,

‘And ! for applicant actions, as in this case, the
agency must exercise discretionary consent
as to the proposed activity in order for the
activity to be subject to HEPA. See

Part V.D. Thus, our interpretation o! of “ac-
tion,” which would include a range of activi-
ties that has the potential of producing envi-
ronmental effects, is supported by the HEPA
framework because other steps in the HEPA
analysis serve to counterbalance the scope of
the meaning of “action.” That is, the sueceed-
ing steps in the HEPA analysis filter activi-
ties that qualify as “actions” in order to
determine which “actions” actually require
environmental review.

3. The ICA Erred in its Analysis

The ICA, in the course of conducting a
plain-language interpretation of HEPA “ac-
tion,” noted that the circuit court used a well-
accepted dictionary to define “program” and
“project.” Umberger v. Dep’t of Land & Nat,
Res., 188 Hawai'i 508, 514, 882 P.8d 320, 326
(App. 2016). The ICA concluded that aquari-
um collection under HRS § 188-31 is not a
HEPA “action” because (1) none of the other
cases decided by Hawai'i appellate courts
involved activity similar to aquarium collec-
tion; (2) a permit might include a situation in
which a parent collects one or two fish or
other aquatic life for use in a home aquari-
um; (8) other statutes and administrative
rules exist that sufficiently regulate aquari-
um collection; and (4) other permitting re-

four exploratory geothermal wells); Waianae

Coast Neighborhood Bd, v. Hawaiian Elec. Co.

64 Haw. 126, 127, 637 P.2d 776, 777 (1981)

(addition of an electric generating plant on
O'ahu).

27. ‘Ohana Pale Ke Ao v. Bd. of Agric., State of
Haw., 118 Hawai'i 247, 254, 188 P.3d 761, 768
(App. 2008).

28. Kilakila ‘O Haleakala v. Univ. of Hawai'i, 138
Hawai'i 364, 371, 382 P.3d 176, 183 (2016).

29, Compare the challenged activities in previous
HEPA cases, supra notes 2328.

gimes would be subject to HEPA environ-
mental review if aquarium collection under
HRS § 188-81 were considered an “action.”
Id, at 515-17, 882 P.8d at 827-29,

HM With respect to the ICA’s first line
of reasoning, it concluded that aquarium col-
lection is not a HEPA “action” because, com-
pared to any of the activities involved in
previous HEPA cases, it is not a “specifically
identifiable program or project.” Id, at 516,
382 P.3d at 828, However, as discussed, the
class of activities and courses of action that
HEPA covers is broad so as to successfully
effectuate the intent and purpose of the stat-
utory scheme. See supra notes 28-28, Addi-
tionally, there has been no HEPA case in
which this court determined whether an ac-
tivity is a HEPA “action” by evaluating its
similarity to the challenged activities in other
HEPA cases. Doing so would unreasonably
delimit HEPA’s application in a manner in-
consistent with its purpose.

The ICA’s second line of reasoning is that
it would be “unprecedented” to apply HEPA
to the hypothetical situation in which a “par-
ent net[s] one or two fish from a stream for
his or her child’s fish tank.” Umberger, 188
Hawaii at 516, 382 P.8d at 828. The premise
of this line of reasoning is that, even though
recreational aquarium collection permits au-
thorize the extraction of almost 2,000 fish or
other aquatic life per person annually, for the
purpose of determining whether HEPA ap-
plies, the focus should be on the possibility
that a person would use his or her recre-
ational aquarium collection permit to take
only one or two fish.

This analysis is flawed because the proper-
ly defined activity for the purposes of the
HEPA analysis must encompass the outer

30. Further, if the similarity of aquarium collec-
tion to a previous activity to which HEPA was
applied is a relevant consideration on whether
aquarium collection is an “action,” then aquari-
um collection qualifies as an “action” because it
is similar to Disney Aulani’s request for a permit
to use small mesh nets to collect live marine life
for stocking a saltwater swimming pool. Under
the ICA’s analysis, just as Disney Aulani’s pro-
posed activity was deemed to be a HEPA “ac-
tion,” so would aquarium collection under per-
mits issued pursuant to HRS § 188-31 and
DLNR’s administrative rules.

517

limits of what the permits allow and not only
the most restrictive hypothetical manner in
which the permits may be used. That is, as
discussed, the analysis must proceed from
the properly defined activity allowed under
aquarium collection permits, see supra Part
V.A. (defining the activity authorized under
HRS § 188-31 and DLNP’s related adminis-
trative rules). See Sierra Club, 115 Hawai'i at
306 n.6, 167 P.8d at 299 n.6.

In addition, a parent netting one or two
fish for a home aquarium may not even be
within the ambit of HRS § 188-31 because
aquarium collection permits are required
only if the applicant intends “to use fine
meshed traps, or fine meshed nets other than
throw nets, for the taking of marine or fresh-
water nongame fish and other aquatic life for
aquarium purposes.” HRS § 188-31(a).
DLNR expounds on this distinction on its
own website, informing the public that a
permit to collect fish and other aquatic life
for a home aquarium is not required “if a)
the net has large mesh (more than two
inches mesh); b) the net has small mesh but
is less than three feet in length, height, or
width, including the handle; or ¢) using a
slurp gun.” FAQ’s, State of Haw. Division of
Aquatic Resources, http://dinr.hawaii.gov/dar/
fishing/faqs/ (ast visited July 11, 2017). Un-
der these circumstances, the act of netting
one or two fish would not constitute aquari-
um collection under HRS § 188-31 and, con-
sequently, would not be a HEPA “action.” *
Lastly, the situation postulated by the ICA—
a parent netting one or two fish or other
aquatic life for recreational purposes—is not
present in this case,3* and DLNR’s own evi-
dence in fact showed that, from 1999 to 2010,
millions of aquatic life were harvested under

31. In addition, a parent collecting one or two
fish for recreational purposes would not fall
within any of the categories of land uses and
administrative acts under HRS § 343-5(a), see
infra Part V.B. & note 47, and even if it were to
qualify under any of the categories under HRS
§ 343-5(a), a parent engaging in aquarium col-
lection of this nature may also be exempt from
HEPA, see infra Part V.C. & note 51.

32. Petitioners also emphasize in their application
for writ of certiorari that this scenario is not part
of the record in this case.

518

aquarium collection permits issued pursuant.
to HRS § 188-31.

In holding that aquarium collection does
not constitute a HEPA “action,” the ICA also
reasoned that there is a “panoply of other
regulatory tools that are in place” “to protect
marine life and the reef ecosystem from the
‘unconstrained removal’ of large numbers of
aquarium fish.” Umberger, 188 Hawai'i at
516, 882 P.8d at 329. The regulations that the
ICA identified include bag and size limits for
certain aquatic species on O‘ahu (see HAR
§ 18-77-6(b), (©), (d) (effective 2015)), length
and height requirements for allowed mesh
nets that apply to O‘ahu (see HAR § 18-77-
6(a)), monthly reporting requirements for
commercial collectors (see HRS §§ 189-8
(2011), 189-35 (2011); HAR § 18-74-20(d) (ef-
fective 2010)), and DLNR’s power pursuant
to HAR § 18-75-14(4) (effective 2007) to at-
tach other conditions to commercial permits.
Umberger, 188 Hawai‘i at 516-17, 382 P.8d at
328-29,83 However, as the ICA itself ac-
knowledged, these regulations and statutory
frameworks are not “dispositive” of whether
aquarium collection pursuant to HRS § 188-
81 and DLNR’s administrative rules is a
HEPA action, Id, at 517, 882 P.8d at 329,
Further, none of these regulations and stat-
utes defines or modifies aquarium collection
pursuant to HRS § 188-81 and DLNR’s ad-
ministrative rules in a manner that would
exclude such collection from the meaning of
“action” under HEPA."

33. The ICA also referenced statutory provisions
governing Marine Life Conservation Districts,
Regional Fisheries Management Areas (including
Fish Replenishment Areas), Shoreline Fisheries
Management Areas (including Marine Protection
Areas), and Marine Refuges, Umberger, 138 Ha-
wai'i at 516-17, 382 P.3d at 328-29,

34, The ICA's suggestion that the number or com-
prehensiveness of agency rules plays a significant
tole in determining whether an activity qualifies
as a HEPA “action” generates numerous evalu-
ative considerations and other complications,
For example, there is no standard for deciding
whether a statutory or regulatory scheme is suffi-
ciently comprehensive, protective, and enforced
as to render a regulated activity not a HEPA
“action.” In addition, the existence of other stat-
utes and rules concerning a particular activity
does not necessarily mean that their purpose
would be identical to that of HEPA or that they,
in fact, are sufficiently protective. In this case,
for example, despite the statutes and rules that

Hl The ICA's reasoning that other stat-
utes and rules that overlap with HEPA could
somehow place certain activities outside of
the meaning of “action” or preclude the ap-
plication of HEPA to such activities is also
contradicted by its own precedent, As the
ICA itself recognized in ‘Ohana Pale Ke Ao,
where HEPA overlaps and is consistent with
another chapter of the HRS, both would be

given effect. ‘Ohana Pale Ke Ao v. Bd. of

Agric. State of Haw., 118 Hawai'i 247, 255,
188 P.3d 761, 769 (App. 2008). Here, there is
no hindrance to giving effect to the statutes
and regulations identified by the ICA while
also applying the requirements of HEPA to
aquarium collection because the statutes and
regulations have not been demonstrated to
be inconsistent with HEPA. See id.

Further, as mentioned, HEPA’s purpose
is “to establish a system of environmental
review which will ensure that environmental
concerns are given appropriate consideration
in decision making along with economie and
technical considerations.” HRS § 343-1. If
the fact that other laws and rules that facial-
ly appear to bear upon the environmental
effects of an activity would exclude the activ-
ity from HEPA’s purview, then this would
frustrate HEPA’s purpose of requiring
agencies to appropriately consider environ-
mental concerns in their decision-making
process, In other words, under the ICA’s

the ICA underscored in its opinion, excerpts of
publications that Petitioners submitted in sup-
port of their motion for summary judgment illus-
trate the detrimental effects of aquarium collec-
tion to fish population and coral reef ecosystems.

Further, the feasibility of the ICA’s analysis is
also predicated on the assumption that any com-
prehensive statutory or regulatory scheme in
place is strictly enforced, However, there is no
evidence in the record that could support this
assumption. Petitioner Willie Kaupiko declared
that some aquarium collectors fish in prohibited
areas, that he reported the incidents to DLNR,
that DLNR is non-responsive or slow to respond,
and that DLNR did not investigate the allega-
tions,

35. No evidence was presented to demonstrate
any inconsistency between HEPA, on the one
hand, and the statutes and rules that the ICA
referenced in its opinion, on the other, DLNR
does not argue (nor has it argued in the lower
courts) that such an inconsistency exists.

analysis, an agency would be able to bypass
the protections provided through HEPA by
promulgating administrative rules that ap-
pear to address or bear upon the possible
environmental effects of an activity that the
agency regulates without actually engaging
in the informed and deliberate decision-mak-
ing process that HEPA requires,

The ICA’s final reason for its holding that
aquarium collection under HRS § 188-31 is
not a HEPA “action” is that Petitioners “of-
fered no rational distinction or logical reason
why HEPA environmental review procedures
should be required for aquarium fish per-
mits, but not for ... other types of licenses
and permits,” including (among others) bait
fish licenses, commercial marine licenses,
special activity permits, permits to enter or
conduct activities in certain areas, hunting
licenses, camping permits, collecting permits,
and commercial activity permits. Umberger,
188 Hawai'i at 517, 382 P.3d at 329. Implicit
in the ICA’s reasoning is the concern that, if
aquarium collection under HRS § 188-31
were considered a HEPA “action” subject to
environmental review, other permitting re-
gimes administered by government agencies
would also be subject to environmental re-
view. See id. However, the fact that aquari-
um collection is conducted pursuant to the
permitting scheme that DLNR administers
does not drive the conclusion that aquarium
collection is a HEPA “action” or that HEPA
applies. The activities authorized by the per-
mitting schemes that the ICA utilized in its
analysis are not effective points of compari-
son given their substantial differences, both
in magnitude and nature, from the activities
sanctioned by aquarium collection permits.
For example, many of the activities under
the permitting regimes that the ICA identi-
fied do not appear to be “programs” or “pro-
jec
36. Petitioners also contend that the ICA’s con-

struction of “program” and “project” under-

mines DLNR’s public trust and statutory duties
to conserve marine resources. In light of our

disposition in this case, this issue need not be
reached,

37, The parties’ primary dispute in this case in-
volves whether activities allowed under permits
issued pursuant to HRS § 188-31 and DLNR’s
administrative rules are HEPA “actions.” Having

519

Further, as stated, in order for HEPA to
apply, the activity must be an action that
falls within a category enumerated in HRS
§ 343-5(a), discussed infra Part V.B., and not
be exempt, discussed inf infra Part VO. See
Sierra Club, 115 Hawaii at : 306, 167 Pad at
299, And for applicant actions, an additional
prerequisite is that the action must be sub-
ject to an agency’s exercise of discretionary
consent, discussed infra Part V.D. Thus, con-
cluding that aquarium collection under HRS
§ 188-31 and DLNR’s administrative rules is
a HEPA “action” or is subject to HEPA
does not necessarily prescribe a determina-
tion that activities under other permitting
regimes are also HEPA “actions” or are sub-
ject to HEPA’s environmental review re-
quirements. Such activities must indepen-
dently meet the analytical framework set
forth in Sierra Club and discussed in this
case,

Based on the foregoing, the ICA’s analysis
did not proceed from a full and proper defini-
tion of the activity authorized under aquari-
um collection permits. Instead, the ICA ap-
peared to focus on an extreme hypothetical
subset of the activity being proposed. In
addition, the ICA improperly relied on other
statutes, administrative rules, and other per-
mitting regimes in its analysis. For these
reasons, the ICA erred in concluding that
aquarium collection is not a HEPA “ac-
tion.” 36

B. Whether Aquarium Collection Falls
Within One or More of the Nine Cate-
gories Listed Under HRS § 348-5(a)

Hs For an activity to be subject to
HEPA environmental review, the second re-
quirement is that it must fall within at least
one category of land uses or administrative
acts (known as “triggers”) enumerated in
HRS § 848-5(a) (2010).*7 See Sierra Club v.

found that aquarium collection pursuant to per-
mits issued by DLNR is a HEPA “action”—con-
trary to the circuit court’s ruling—we proceed to
consider other grounds upon which the circuit
court's grant of summary judgment to DLNR.
may be affirmed. See Reyes v. Kuboyama, 76
Hawai'i 137, 140-41, 870 P.2d 1281, 1284-85
(1994) (“This court may affirm a grant of sum-
mary judgment on any ground appearing in the
record, even if the circuit court did not rely on
it.”), Thus, we consider whether there is an issue

520

Dep’t of Transp. of the State of Haw., 115
Hawai'i 299, 806, 167 P.3d 292, 299 (2007).
DLNR conceded for the purposes of the
summary judgment proceedings that “there
is a use of state land” in this case and that,
therefore, “[t]here is a ‘trigger’ pursuant to
Haw, Rev. Stat. § 343-5(a) (2010).” After re-
viewing the applicable legal principles in the
discussion that follows, we conclude that
DLNR’s concession is correct.®

Categories of land use under which aquari-
um collection may fall include HRS § 343-
5(a)(1) (actions that “[p}ropose the use of
state or county lands”)®° and HRS § 343-
5(a)(2) (actions that “[p]ropose any use within
any land classified as a conservation district
by the state land use commission under chap-
ter 205”), Therefore, we determine (1) wheth-
er marine waters “° and the submerged lands
in which aquarium collection is conducted
constitute state lands or are within a conser-
vation district and (2) whether aquarium col-
lection constitutes “use.”

1, Whether Marine Waters and Sub-
merged Lands in Which Aquarium

Collection is Conducted Constitute
State Lands

“Land” is not defined by HEPA, so we
commence our statutory construction by em-
ploying “the well-settled canon that ‘[lJaws in
pari materia, or upon the same subject mat-

of material fact as to either of the two other
requisites of HEPA review.

38. We review the merits of DLNR’s concession
because a court is not bound by a party's “appar-
ent concession of law.” Ass'n of Apartment Own-
ers of Newtown Meadows ex rel. its Bd. of Dirs.
vy. Venture 15, Inc., 115 Hawai'i 232, 254, 167
P.3d 225, 247 (2007) (citing McCandless _v.
Campbell, 20 Haw. 404, 405 (1911)). “[Wle are
free to interpret ... and apply the correct law to
its enforcement.” Beclar Corp. v. Young, 7 Haw.
App. 183, 190, 750 P.2d 934, 938-39 (1988).

39, In full, HRS § 343-5(a)(1) provides as follows:
(a) Except as otherwise provided, an envi-
ronmental assessment shall be required for
actions that:
(1) Propose the use of state or county lands
or the use of state or county funds, other
than funds to be used for feasibility or plan-
ning studies for possible future programs or
projects that the agency has not approved,
adopted, or funded, or funds to be used for
the acquisition of unimproved real property;

ter, shall be construed with reference to each
other, What is clear in one statute may be
called upon in aid to explain what is doubtful
in another.’” State v. Bovee, 189 Hawai'i 530,
544, 394 P.8d 760, 774 (2017) (quoting State
vy. Alangeas, 184 Hawai'i 515, 527, 345 P.3d
181, 198 (2015)); accord HRS § 1-16 (1998).
Chapter 171 of the HRS, the chapter that
ereated DLNR and prescribes its authority,"
defines “land” as “includ[ing] all interests
therein and natural resources including wa-
ter, minerals, and all such things connected
with land, unless otherwise expressly provid-
ed.” HRS § 171-1 (2011) (emphasis added).
HRS § 171-2 then defines “public lands” as
all_ lands or interest therein in the State
classed as government or crown lands pre-
vious to August 15, 1895, or acquired or
reserved by the government upon or sub-
sequent to that date by purchase, ex-
change, escheat, or the exercise of the
right of eminent domain, or in any other
manner; including lands accreted after
May 20, 2008, and not otherwise awarded,
submerged lands, and lands beneath tidal
waters that are suitable for reclamation,
together with reclaimed lands that have
been given the status of public lands under
this chapter....
HRS § 171-2 (2011) (emphases added).

Hs Thus, included within the meaning of
“and” and “public lands” are “water” and

provided that the agency shall consider envi-
ronmental factors and available alternatives
in its feasibility or planning studies; provided
further that an environmental assessment for
proposed uses under section 205-2(d)(11) or
205-4.5(a)(13) shall only be required pursu-
ant to section 205-5(b) ....

40. Aquarium collection under HRS § 188-31
also allows extraction of fish and other aquatic
life from freshwater sources. HRS § 188-31(a).
We do not address freshwater sources because
the activities under the permits being challenged
in this case, based on the parties’ filings and the
record on appeal, all transpire in marine waters
and submerged lands.

41, See generally HRS §§ 171-3 (2011), 171-4
(2011), 171-6 (2011), 171-7 (2011).

42, On the same note, DLNR's administrative
ules define “[land” as “all real property, fast or
submerged, and all interests therein, including
fauna, flora, minerals, and all such natural re-

“submerged lands.” HRS §§ 171-1, 171-2.
Based on these definitions, marine waters
and submerged lands in which aquarium col-
lection is conducted are included within the
meaning of “land” under HEPA. HRS
§§ 171-1, 171-2.

Hs Further, when the State acts as a
trustee and exercises fiduciary duties over
certain areas not typically considered “state
lands,” this court has held that, for HEPA
purposes, those areas qualify as state lands,
For example, this court held that Hawaiian
homelands are “state lands” for HEPA pur-
poses because of the State’s trust obligations
with respect to those lands and its fiduciary
duty to the beneficiaries of those lands,
Kepo‘o v. Watson, 87 Hawai'i 91, 97-98, 952
P.2d 379, 385-86 (1998). Similar to the State’s
trusteeship to Hawaiian homelands, this
court has repeatedly reaffirmed that the
State’s public trust obligations pursuant to
article XI, section 1 of the Hawai'i Constitu-
tion extend “to all water resources.” In re
Water Use Permit Applications (Waidhole),
94 Hawaii 97, 133, 9 P.8d 409, 445 (2000);
Kauai Springs, Inc. v. Planning Comm'n of
the Cty. of Kava‘, 188 Hawai‘i 141, 172, 824
P.8d 951, 982 (2014) (“[T]he public trust doc-
trine applies to all water resources without
exception or distinction.” (quoting Waiahole,

521

wail at 138, 9 P.8d at 445. It therefore
follows that the State marine waters and the
submerged lands in which aquarium collec-
tion occurs are “state lands” under HEPA.

2. Whether Marine Waters are Within
a Conservation District

HEPA environmental review is also trig-
gered when an action “[p]ropose[s] any use
within any land classified as a conservation
district by the state land use commission
under chapter 205.” HRS § 348-5(a)(2). Ac-
cording to HRS § 205-2(e) (Supp. 2012),
“{clonservation districts shall include areas
necessary for ... conserving indigenous or
endemic ... fish[] and wildlife, including
those which are threatened or endangered,”
or “would maintain or enhance the conserva-
tion of natural or scenic resources.” Thus, the
legislature uses the term “areas” in defining
“conservation districts,” and it does not limit
what constitutes “conservation districts” to
“lands.” Id.

Additionally, pursuant to HRS § 343-
5(a)(2), the Land Use Commission has
adopted HAR § 15-15-20, which provides in
relevant part the following:

§ 15-15-20 Standards for determining
“C” conservation district boundaries. Ex-

94 Hawai‘ at 133, 9 P.8d at 445)). The com-
mon law of Hawai'i also embodies the pre-
cept that “navigable waters” and “[t]he lands
under the navigable waters in and around the
territory of the Hawaiian Government are
held in trust for the public uses of naviga-
tion.” King v. Oahu Ry. & Land Co., 11 Haw.
717, 725 (Haw. Terr. 1899). Just as Hawaiian
homelands are “state lands” for the purposes
of HRS § 343-5(a)(1) because they are sub-
ject to the State’s statutorily defined trust
obligations, so too are marine waters and
submerged lands, both of which are subject.
to the State’s constitutional and common-law
public trust duties. See Kepo‘o, 87 Hawai'i at
97-98, 952 P.2d at 385-86; Waiahole, 94 Ha-

sources, unless otherwise expressly provided.”
HAR § 13-5-2 (effective 1994), The Land Use
Commission's rules define “[lJand” as “all real
property in the State including areas under wa-
ter within the boundaries of the State.” HAR
§ 15-15-03 (effective 1997),

DLNR then defines the phrase “[s]ubmerged
lands” as “lands from the shoreline seaward to

cept as otherwise provided in this chapter,
in determining the boundaries for the “C”
conservation district, the following stan-
dards shall apply:

(6) It shall include lands having an ele-
vation below the shoreline as stated
by section 205A-I, HRS, [and] ma-
rine waters ....

HAR § 15-15-20(6) (effective 1997) (emphas-
es added). In addition, HAR § 15-15-22(a)(2)
(effective 1997) provides that in interpreting
district boundaries, “[I]and having an eleva-
tion below the shoreline [and] marine waters

. of the State[] ... shall be included in

the extent of the State’s jurisdiction.” HAR § 13-
5-2,

43. Additionally, as discussed in the preceding
section, the term “lands” includes “submerged
lands” and “waters.”

522

the conservation district.” HAR § 15-15-
22(a)(2) (effective 1997). Thus, the legislature
and the Land Use Commission, through its
statutory rulemaking authority, clearly in-
cluded lands below the shoreline (ie., sub-
merged lands) and marine waters of the
State within conservation districts. See HRS
§ 205-2(e) (Supp. 2012); HAR § 15-15-2066);
HAR § 15-15-22(a)(2).

HM The inclusion of State marine waters
within conservation districts designated by
the Land Use Commission is reinforced by
HRS § 190-1 (2011), which provides that
“aJll marine waters of the State ... consti-
tute[] a marine life conservation area to be
administered by the department of land and
natural resources subject to this chapter and
any other applicable laws not inconsistent
herewith or with any rules adopted pursuant
hereto.” Consistent with its legislative
mandate, DLNR has promulgated adminis-
trative rules that established subzones within
conservation districts.“ A conservation dis-
trict, under DLNR rules, encompasses
subzones of “[IJands and state marine waters
seaward of the shoreline to the extent of the
State’s jurisdiction, unless placed in a [pro-
tective] or [limited] subzone,” HAR § 18-5-
18(b)(6) (effective 1994) (emphasis added).
Accordingly, lands and State marine waters
seaward of the shoreline under the State’s
jurisdiction, in which the aquarium collection
practices challenged in this case are conduct-
ed, are within conservation districts classified
by the Land Use Commission pursuant to its
authority under HRS chapter 205 and thus
fall within a category of land use enumerated
in HEPA,

8. Whether Aquarium Collection is
a “Use” Under HRS § 343-5

We next consider whether aquarium collec-
tion is a “use” under HRS § 848-5. “Use” is

44, Since 1990, the legislature has defined “state
marine waters’ “as extending from the upper
reaches of the wash of the waves on shore sea-
ward to the limit of the State's police power and
management authority, including the United
States territorial sea, notwithstanding any law to
the contrary.” HRS § 190-1.5 (2011).

45. DLNR's rulemaking power originates from
the legislature, which has authorized DLNR to
“establish and from time to time modify the
limits of one or more conservation districts in

also an undefined term under HEPA, and
this court has previously observed that its
ordinary meaning “could be construed to ap-
ply to any ‘use’ of state or county land, no
matter what or how benign that ‘use’ may
be.” Nuuanu Valley Ass’n v. City & Cty. of
Honolulu, 119 Hawai'i 90, 108, 194 P,3d 531,
544 (2008). Our court declined to adopt such
a sweeping interpretation, concluding “that
the boundaries of the meaning of the word
‘use,’ as contemplated by HRS § 848-5(a)(1),
is not unlimited in possibilities.” Id, In reach-
ing this conclusion, the court noted that, in a
previous case, we rejected the plaintiffs ar-
gument “that the ‘potential use of’ a public
highway leading to [a development] project”
“constitute[s] use of state land.” Id, (quoting
Citizens for Prot. of N. Kohala Coastline v.
Cty, of Hawaii, 91 Hawai'i 94, 108 n.8, 979
P.2d 1120, 1129 n.8 (1999), Thus, this court
concluded in Nuuanu Valley that merely con-
necting to an existing drainage system and
county lines without any construction or tun-
neling beneath state or county lands was not
a “use” within the meaning of that term in
HRS § 848-5(a)(1). Id. at 108-04, 194 P.8d at
544-45,

HH What can be readily gleaned from
Nuuanu Valley is that whether a proposed
activity constitutes a “use of state or county
lands” depends on the nature of the activity
and the extent of the involvement of state or
county lands. Id, at 108, 194 P.8d at 544.
When the proposed activity utilizes state or
county lands in a decidedly inconsequential
or negligible manner, like the mere connec-
tion to state or county lands in Nuuanu Val-
ley, or when the use is hypothetical, like the
“potential use” of a public highway in Citi-
zens, then the activity does not rise to the
level of “use” contemplated by HEPA. When,

each county and may, if it deems necessary,
declare all waters within any county a conserva-
tion district.” HRS § 190-2 (2011), In addition,
the legislature has required DLNR in HRS
§ 183C-3(7) (Supp. 1994) to “[elstablish and en-
force land use regulations on conservation dis-
trict lands” and in HRS § 183C-4(b) and (d)
(Supp. 1997) to “adopt rules governing the use of
land within the boundaries of the conservation
district” and to establish and define zones within
the conservation district.

on the other hand, the proposed activity uti-
lizes state or county lands in an actual and
more substantial way, the activity qualifies as
a “use” under HEPA. Compare Nuuanu Val-
Jey, 119 Hawaiti at 103-04, 194 P.8d at 54445
(connecting to existing county lines was not a
“ase”), with Kahana Sunset Owners Ass’n v,
Cty, of Maui, 86 Hawai'i 66, 71, 947 P.2d 378,
883 (1997) (installing a new drainage line
beneath a public street that would be con-
nected to an existing culvert beneath a public
highway was a “use”), Citizens, 91 Hawai'i at
108, 979 P.2d at 1129 (constructing two un-
derpasses beneath a state highway was a
“use”), and Sierra Club v. Office of Planning,
State of Haw., 109 Hawai'i 411, 415-16, 126
P.8d 1098, 1102-08 (2006) (constructing sew-
age and water transmission lines by tunnel-
ing beneath state highways was a “use”),

HN Permits for commercial aquarium
collection allow for the unlimited collection of
fish and other aquatic life, and each recre-
ational permit authorizes the extraction of
close to 2,000 fish or other aquatic life annu-
ally, subject to the terms and conditions of
the permits and to certain restrictions set by
law. See HAR § 18-75-14; see supra note 21,
The aquatic life collected inhabits “state
lands” and conservation districts, as dis-
cussed, and are integral components of the
State’s reef ecosystem. Thus, aquarium col-

46, DLNR argues that, if aquarium collection un-
der HRS § 188-31 is considered a HEPA “ac-
tion,” all activities “in a government building or
by a government employee” would be subject to
environmental review pursuant to HEPA because
those activities involve “the use of state or county
lands or the use of state or county funds.” This
assertion is without merit because, as discussed,
not all activities qualify as a “use,” and activities
such as “turning on the lights" in a government
building, a hypothetical that DLNR asserts, are
unquestionably not within the set of activities
that qualify as a “use” under Nuuanu Valley.

47, As stated, a parent netting one or two fish for
recreational use would not fall within any of the
categories listed in HRS § 343-5(a). See supra
note 31, The reason is that the nature and magni-
tude of the involvement of marine waters and
submerged lands in this type of activity are in-
consequential and negligible such that this activi-
ty would not qualify as a “use” of state lands or
conservation districts under HRS § 343-5(a). It
follows that, if permits were issued for activities
similarly limited in nature and magnitude as a
parent collecting one or two fish for recreational
purposes, the activities under such permits

523

lection utilizes “state Jands” and conservation
districts in an actual and substantial manner.
Said differently, aquarium collection as al-
lowed under commercial and recreational
permits cannot be said to fall within the
narrow spectrum of activities that this court
has excluded from the meaning of the word
“ase” in Nuuanu_ Valley.“ Accordingly,
aquarium collection pursuant to permits is-
sued under HRS § 188-31 qualifies as a “use
of state ... lands” and as a “use within ... a
conservation district,” 47

C. Whether Aquarium Collection
is Exempt under HRS § 343-
6(a)(2)

Having determined that aquarium collec-
tion under HRS § 188-31 and DLNR’s per-
mitting scheme is a HEPA “action” that
qualifies as a “use of state ... lands,” we
proceed to the third part of the analysis:
whether aquarium collection is exempt from
HEPA environmental review. HRS § 343-6
requires the Environmental Council to adopt,
amend, or repeal rules that shall “[e]stablish
procedures whereby specific types of actions,
because they will probably have minimal or
no significant effects on the environment, are
declared exempt from the preparation of an
environmental assessment.” HRS § 848-

would also not be considered a “use” of state
and conservation lands,

48. HEPA defines “[slignificant effect” as

the sum of effects on the quality of the environ-
ment, including actions that irrevocably com-
mit a natural resource, curtail the range of
beneficial uses of the environment, are con-
trary to the State's environmental policies or
long-term environmental goals as established
by law, or adversely affect the economic wel-
fare, social welfare, or cultural practices of the
community and State,
HRS § 343-2 (2010).
HAR § 11-200-2 defines “effects” as follows:
“Effects” or “impacts” as used in this chap-
ter are synonymous. Effects may include eco-
logical effects (such as the effects on natural
resources and on the components, structures,
and functioning of affected ecosystems), aesth-
etic effects, historic effects, cultural effects,
economic effects, social effects, or health ef-
fects, whether primary, secondary, or cumula-
tive. Effects may also include those effects re-
sulting from actions which may have both
beneficial and detrimental effects, even if on

524

6(a)(2) (2010). The Environmental Council
accordingly adopted categories of “actions”
in HAR § 11-200-8(a) that “may be declared
exempt by the proposing agency or approv-
ing agency from the preparation of an envi-
ronmental assessment provided that agencies
declaring an action exempt under this see-
tion shall obtain the advice of other outside
agencies or individuals having jurisdiction or
expertise as to the propriety of the exemp-
tion.” HAR § 11-200-8(a) (effective 1996),
These categories include the operations, re-
pairs, replacement or reconstruction of exist-
ing structures; construction and modification
of certain small facilities or structures; minor
alterations in the conditions of land, water,
or vegetation; basic data collection and re-
search activities; construction or placement
of minor structures accessory to existing fa-
cilities; interior alterations; demolition of cer-
tain structures; certain zoning variances;
continuing administrative activities; and ac-
quisition of land and structures for the pur-
pose of affordable housing. Id.

HMM In addition, the Environmental
Council decreed by administrative rule that
“felach agency, through time and experience,
shall develop its own list of specific types of
actions which fall within the exempt classes,
as long as these lists are consistent with both
the letter and intent expressed in these ex-
empt classes and chapter 343, HRS.” HAR
§ 11-200-8(d). The authority of the various
agencies under HAR § 11-200-8(d), however,
ig not boundless. As this court explained in
Kahana Sunset, the intent of the exemption
list in HAR § 11-200-8, adopted pursuant to
HRS § 348-6(a)@), is “to exempt only very
minor projects from the ambit of HEPA.”
Kahana Sunset Owners Ass’n v. Cty, of Maui,
86 Hawai'i 66, 72, 947 P.2d 378, 884 (1997).
Thus, this court later held that, when devel-
oping lists of the exemptions pursuant to
HAR § 11-200-8(d), an agency must prelimi-
narily determine that the action to be de-
clared exempt is a very minor project that
“will ‘probably have minimal or no significant
effects on the environment.’” Sierra Club v.

Dep’t_of Transp. of the State of Haw., 115
Hawai'i 299, 316, 167 P.8d 292, 309 (2007).

balance the agency believes that the effect will
be beneficial,

Our decision in Sierra Club also concluded
“that not only must the exemption list be
developed with regard to the letter and in-
tent of HEPA and its regulations, but so also
must individual exemption determinations.”
Id. This means that individual exemption de-
terminations must be determined to “proba-
bly have minimal or no significant effects on
the environment.” Id. (quoting HAR § 11-
200-2).

HMI Guided by these principles, this
court in Sierra Club concluded that an agen-
cy must make the following determinations in
deciding whether a proposed activity is ex-
empt from HEPA. Preliminarily, the agency
must determine whether the action is part of
a “group of actions” that must be “treated as
a single action” pursuant to HAR § 11-200-7
(effective 1985). Thereafter, the agency must
conduct a four-step analysis: an action is
exempt from HEPA if (1) it is within an
exempt class promulgated by the Environ-
mental Council in HAR § 11-200-8(a) or
within an exemption category created by the
agency itself pursuant to its authority under
HAR § 11-200-8(d); (2) the relevant exemp-
tion category can be applied because the
activity does not have a significant cumula-
tive impact and it does not have a significant
impact on a particularly sensitive environ-
ment, see HAR § 11-200-8(b); (8) the agency
obtained the advice of other agencies or indi-
viduals having jurisdiction or expertise as to
the propriety of the exemption, HAR § 11-
200-8(a); and (4) the action will probably have
minimal or no significant effects on the envi-
ronment, HRS § 348-6(a)(2); see also HAR
§ 11-200-8(d); Sierra Club, 115 Hawaii at
815-16, 167 P.8d at 308-09. If the action fails
to satisfy any of the four requirements dis-
cussed, it is not exempt from HEPA, Sierra
Club, 115 Hawai'i at 315-16, 167 P.3d at 308-
09.

HM As a matter of law, it cannot be
concluded that commercial aquarium collec-
tion, which involves the extraction of an un-
limited number of fish and other aquatic life
annually, may be exempt from HEPA be-
cause it does not qualify within any of the

HAR § 11-200-2 (effective 1996).

exemption categories in HAR § 11-200-8(a).
The most relevant exemption—‘[mlinor al-
terations in the conditions of land, water, or
vegetation” under HAR § 11-200-8(a)(4)—
has no application because a permit for ex-
traction of an unlimited number of aquatic
life cannot be said to constitute only a “[mli-
nor alteration” in the condition of State wa-
ters and submerged lands.

With respect to recreational aquarium col-
lection, which allows each permit holder to
extract close to 2,000 fish or other aquatic
life per year,® the record is not sufficiently
developed so as to allow this court to deter-
mine whether this “action” may be exempted
from HEPA under an exemption category in
HAR § 11-200-8(a) or under DLNR’s own
exemption list promulgated pursuant to HAR
§ 11-200-8()." In sum, commercial aquari-
um collection is not exempted from HEPA,
but the possibility that recreational aquarium
collection as authorized under HRS § 188-31

49. With the Environmental Council's approval,
DLNR has promulgated its own exemption list
pursuant to its authority under HAR § 11-200-
8(d). Exemption List for the Department of Land
and Natural Resources (2015), httpy/oeqe.doh.
hawaii.gow/Shared% 20Documents/Environmen-
tal_Council/Exemption_Lists_By_Department
/State_Agencies/DLNR_Comprehensive_Exemp-
tion_List_06-05-15_Final.pdf. None of the exemp-
tion classes that DLNR adopted applies in this
case. The closest relevant exemption under Ex-
emption Class 4—“[mJinor alterations in [S]tate
waters, including restoration of native species
and control of invasive weeds, algae, inverte-
brates, fishes or other invasive aquatic organ-
isms”—does not apply because, as discussed,
commercial aquarium collection cannot be said
to constitute a “[mlinor alteration[] in [S]tate
waters.”

Because we conclude that activities allowed by
commercial aquarium collection permits do not
qualify under any of the exemption categories in
HAR § 11-200-8(a) and in DLNR’s own exemp-
tion list, it is not necessary for this court to apply
the other prongs of the exemption framework to
commercial aquarium collection.

50. When the aquarium collector does not collect
the maximum amount of aquatic animals author-
ized, the catch could be such that rarer, more
vulnerable species are specifically targeted.

51. A parent collecting one or two fish for recre-
ational use, aside from not falling within any of
the categories under HRS § 343-5(a), may also
be exempt from HEPA. See supra note 31. This is
because this activity arguably falls under the
exemption for minor alterations in the conditions
of land, water, or vegetation, as discussed in this

525

and DLNR’s administrative rules may be
exempted should be explored further by the
parties and the cireuit court upon remand
using the analytical framework discussed
herein.

D. Discretionary Consent.

TE We have determined that aquarium
collection is a HEPA “action” that qualifies
as a use of state lands and that, while com-
mercial aquarium collection is not exempted
from HEPA’s environmental review require-
ments, the record is not sufficiently devel-
oped for this court to determine whether the
same is true for recreational aquarium collec-
tion, However, because aquarium collection
has been cast in this case as an applicant
action, in order for environmental review to
be required under HEPA, there is an addi-
tional inquiry of whether issuing a permit for
aquarium collection requires “approval of an
agency.” HRS § 348-5(e) (Supp. 2012).

section. Thus, if permits issued under HRS
§ 188-31 allow only activities similar in nature
and magnitude as a parent collecting one or two
fish for recreational purposes, the activity may
also be exempt from HEPA within the framework
discussed above,

52. In relevant part, HRS § 343-5(e) provides as
follows:

(e) Whenever an applicant proposes an ac-
tion specified by subsection (a) that requires
approval of an agency and that is not a specific
type of action declared exempt under section
343-6, the agency initially receiving and agree-
ing to process the request for approval shall
require the applicant to prepare an environ-
mental assessment of the proposed action at
the earliest practicable time to determine
whether an environmental impact statement
shall be required ....

HRS § 343-5(e) (emphasis added).

In their reply, Petitioners argue that the ICA’s
holding regarding DLNR’s discretionary authori-
ty is not properly before this court because
DLNR did not cross-file an application for writ
of certiorari challenging that portion of the ICA’s
published opinion. However, whether discretion-
ary authority exists is a ‘subsidiary question fair-
ly comprised” by the issue presented in Petition-
ers’ application for writ of certiorari—whether
aquarium collection pursuant to HRS § 188-31
and DLNR’s administrative rules requires HEPA
review—because, as explained, in order to ulti-
mately resolve the issue presented, this court
must determine whether DLNR exercises discre-
tionary consent in granting HRS § 188-31
aquarium permits. Hawai'i Rules of Appellate

526

“Approval,” as defined by HEPA, “means
a discretionary consent required from an
agency prior to actual implementation of an
action.” HRS § 348-2 (2010). “ ‘Discretionary
consent? means a consent, sanction, or recom-
mendation from an agency for which judg-
ment and free will may be exercised by the
issuing agency, as distinguished from a min-
isterial consent.” Id. DLNR contends that it
does not issue an “approval” because it does
not exercise discretion whenever it issues
aquarium collection permits pursuant to HRS
§ 188-81 (2011) and that, therefore, HEPA
does not apply to aquarium collection,

HRS § 188-31 expressly provides
that DLNR, “upon receipt of a written appli-
eation, may issue an aquarium fish permit,
not longer than one year in duration, to use
fine meshed traps, or fine meshed nets other
than throw nets, for the taking of marine or
freshwater nongame fish and other aquatic
life for aquarium purposes.” 5? HRS § 188-
81(a) (emphasis added). “The term ‘may’ is
generally construed to render optional, per-
missive, or discretionary the provision in
which it is embodied; this is so at least when
there is nothing in the wording, sense, or
policy of the provision demanding an unusual
interpretation.” State_v. Kahawai, 103 Ha-
wai'i 462, 465, 88 P.8d 725, 728 (2004) (quot-
ing State ex rel. City of Niles v. Bernard, 53
Ohio St.2d 31, 872 N.H.2d 389, 841 (1978)),
Where “may” and “shall” “are used in the
same statute, especially where they are used
in close juxtaposition, we infer that the legis-

Procedure (HRAP) Rule 40.1(4)(1) (2016) (“The
statement of a question presented will be
deemed to include every subsidiary question fair-
ly comprised therein.”). In addition, we reach
the question of discretionary authority as part of
our duty to consider any grounds upon which
the circuit court’s summary judgment ruling
may be affirmed. See supra note 37.

53, As stated, HRS § 188-31 provides the follow-
ing:

(@) Except as prohibited by law, the depart-
ment, upon receipt of a written application,
may issue an aquarium fish permit, not longer
than one year in duration, to use fine meshed
traps, or fine meshed nets other than throw
nets, for the taking of marine or freshwater
nongame fish and other aquatic life for aquari-
um purposes.

(b) Except as prohibited by law, the per-
mits shall be issued only to persons who can
satisfy the department that they possess facili-

lature realized the difference in meaning and
intended that the verbs used should carry
with them their ordinary meanings.” State v.
Cornelio, 84 Hawai'i 476, 498, 935 P.2d 1021,
1088 (1997) (quoting Gray v. Admin. Dir. of
the Court, State of Haw., 84 Hawai'i 188, 149,
981 P.2d 580, 591 (1997)), In such instances,
“the close proximity of the contrasting verbs
‘may’ and ‘shall’ requires a non-mandatory,
ie. a diseretionary, construction of the term
‘may.’” Id. (quoting Gray, 84 Hawai'i at 149,
931 P.2d at 591),

In HRS § 188-31, “may” is used in subsec-
tion (a), where DLNR is given the authority
to issue aquarium collection permits. The
verb “ ” is then used in subsection (b),
which provides that “the permits shall be
issued only to persons who can satisfy the
department that they possess facilities to and
can maintain fish and other aquatic life alive
and in reasonable health.” HRS § 188-31(b).
The verbs “shall” and “may” are both used in
subsection (¢), which states that “[i]t shall be
illegal to sell or offer for sale any fish and
other aquatic life taken under an aquarium
fish permit unless those fish and other aquat-
ie life are sold alive for aquarium purposes”
and that “[tlhe department may adopt rules
pursuant to chapter 91 for the purpose of
this section.” HRS § 188-31(c). Thus, the
verbs “may” and “shall” are used “in close
juxtaposition” in HRS § 188-81, and the leg-
islature should be presumed to have done so
deliberately and with full knowledge of the

ties to and can maintain fish and other aquatic
life alive and in reasonable health,

(c) It shall be illegal to sell or offer for sale
any fish and other aquatic life taken under an
aquarium fish permit unless those fish and
other aquatic life are sold alive for aquarium,
purposes,

The department may adopt rules pursuant to
chapter 91 for the purpose of this section,

(a) For the purposes of this section:

(1) “Aquarium purposes” means to hold

salt water fish, freshwater nongame fish, or

other aquatic life alive in a state of captivity
as pets, for scientific study, or for public
exhibition or display, or for sale for these
purposes; and

(2). “Aquarium fish permit” means a permit

issued by the board for the use of fine mesh

nets and traps to take salt water fish, fresh-
water nongame fish, or other aquatic life for
aquarium purposes,

HIS § 188-31 (emphases added).

difference between the ordinary significa-
tions of these verbs. Cornelio, 84 Hawai‘i at
498, 985 P.2d at 1088. As such, the use of the
verb “may” in subsection (a) “render option-
al, permissive, or discretionary’ DLNR’s
statutory authority to issue aquarium collec-
tion permits pursuant to HRS § 188-81. Kah-
awai, 103 Hawaii at 465, 83 P.3d at 728,

HRS § 188-81(b) provides further indica-
tion that DLNR possesses the authority to
exercise diseretionary consent in the aquari-
um collection permitting process, Subsection
(b) of HRS § 188-81 provides that “the per-
mits shall be issued only to persons who can
satisfy the department that they possess fa-
cilities to and can maintain fish and other
aquatic life alive and in reasonable health,”
HRS § 188-81(b) (emphasis added), Accord-
ingly, HRS § 188-81(b) explicitly allows
DLNR to exercise its independent judgment
in determining whether a permit applicant
possesses facilities to and can maintain fish
and other aquatic life alive and in reasonable
health, See HRS § 848-2 (defining diseretion-
ary consent as “a consent, sanction, or rec-
ommendation from an agency for which judg-
ment and free will may be exercised by the
issuing agency, as distinguished from a min-
isterial consent”), If DLNR is not satisfied
that a permit applicant has the ability to
eomply with the provisions of HRS § 188-
81(6), DLNR has the statutory discretion not
to issue an aquarium collection permit, Not
only does DLNR exercise its independent
judgment pursuant to HRS § 188-81(b),
DLNR is also authorized, under HRS § 188-
81@), to adopt administrative rules to effec-
tuate the aquarium collection permitting
scheme, HRS § 188-31(c). As the ICA also
recognized, the legislative history of HRS
§ 188-31 makes DLNR’s discretionary au-
thority clear, as the statute “provides safe-
guards so that the abuse of the privilege of
using fine mesh nets can be prevented.” Um-
berger v. Dep’t of Land & Nat. Resources,
188 Hawai'i 508, 518, 382 P.8d 320, 380 (App.
2016) (emphasis omitted) (quoting H. Stand.
Comm. Rep. No. 586, in 1958 House Journal,
at 675), Thus, there is no merit to DLNR’s
argument that it does not possess the author-
ity to exercise discretionary consent in the
aquarium collection permitting process,

527

HM DLNR further argues that it does
not exercise discretion in issuing aquarium
collection permits because “[t]he application
process is on-line and completely automatic.”
However, the fact that DLNR has chosen not
to exercise its discretion under the plain and
unambiguous language of HRS § 188-31 does
not nullify the statute’s clear directive that
DLNR is given the authority to exercise
discretionary consent. An agency may not
defeat the express provisions of a statute
simply by operating in a manner that does
not comport with the legislature’s grant of
authority. See Hyland vy, Gonzales, 189 Ha-
wail 386, 392, 390 P.3d 1278, 1279 (2017)
(concluding that the local election board’s
interpretation of its regulation must be con-
sistent with the act being administered and
that the board cannot contradict the statute
that it is attempting to implement). This
would also be contrary to the principle, rec-
ognized by a majority of this court, that “[aln
agency is a creature of the legislature, and
the scope of its authority is specifically delin-
eated by statute.” Mauna Kea Anaina Hou v.
Ba. of Land & Nat. Res., 186 Hawai'i 376,
418 n.14, 868 P.8d 224, 261 n.14 (2015) (Pol-
lack, J., concurring).

To conclude, DLNR’s challenge to the
ICA’s holding that DLNR has discretionary
consent is without merit. Thus, aquarium col-
lection pursuant to permits issued under
HRS § 188-31 is an applicant action that
requires agency approval.

E. Summary Judgment.

The circuit court granted
DLNR’s motion for summary judgment and,
correspondingly, denied Petitioners’ sum-
mary judgment motion upon concluding that
aquarium collection under HRS § 188-31
(2011) is not a HEPA “action.” This court’s
framework in reviewing decisions regarding

summary judgment is as follows:
[S]ummary judgment is appropriate if the
pleadings, depositions, answers to inter-
rogatories, and admissions on file, together
with the affidavits, if any, show that there
is no genuine issue as to any material fact
and that the moving party is entitled to
judgment as a matter of law. A fact is
material if proof of that fact would have
the effect of establishing or refuting one of

528

the essential elements of a cause of action
or defense asserted by the parties. The
evidence must be viewed in the light most
favorable to the non-moving party. In oth-
er words, we must view all of the evidence
and the inferences drawn therefrom in the
light most favorable to the party opposing
the motion.
Lambert v. Waha, 187 Hawai'i 428, 432 n.9,
875 P.8d 202, 211 n.9 (2016) (quoting Queru-
bin v, Thronas, 107 Hawai'i 48, 56, 109 P.8d
689, 697 (2005). The burden is on the moving
party “to show the absence of any genuine
issue as to all material facts, which, under
applicable principles of substantive law, enti-
tles the moving party to judgment as a mat-
ter of law.” French v. Haw. Pizza Hut, Inc.
105 Hawai'i 462, 470, 99 P.38d 1046, 1054
(2004) (quoting GECC Fin. Corp. v. Jaffari-
an, 79 Hawai'i 516, 521, 904 P.2d 530, 535
(App. 1995)). Only after the moving party
satisfies its initial burden would the burden
shift to the nonmoving party to “demonstrate
specific facts, as opposed to general allega-
tions, that present a genuine issue worthy of
trial.” Id, (emphasis omitted) (quoting GECC
Fin, Corp, 79 Hawai'i at 521, 904 P.2d at
536),

Because aquarium collection pursuant to
commercial and recreational permits issued
by DLNR is a HEPA “action,” the circuit
court erred in granting DLNR’s motion for
summary judgment on the basis that aquari-
um collection is not a HEPA “action.” The
circuit court also erred to the extent that it
denied Petitioners’ summary judgment mo-
tion with respect to commercial aquarium
collection permits because, as discussed, the
authorized conduct under such permits is an
applicant “action” under HEPA, is a use of
state lands and a use within a conservation
district, is not exempted from HEPA, and is
subject to DLNR’s discretionary consent.
Thus, the conduct allowed under commercial
aquarium collection permits, issued pursuant
to HRS § 188-81 and DLNR’s administrative
scheme, is subject to HEPA environmental
review, and there is no genuine issue of
material fact as to this issue. To the extent
that the cireuit court did not grant Petition-
ers’ summary judgment motion with respect
to recreational aquarium collection permits,
it did not err because the record is not
sufficiently developed so as to allow the cir-

cuit court to determine whether activities
allowed under recreational permits may be
exempted from HEPA environmental review.
In other words, there was a genuine issue of
material fact as to whether activities author-
ized by recreational permits are subject to
HEPA review.

In summary, the circuit court erred in
granting DLNR summary judgment and in
denying Petitioners’ summary judgment mo-
tion with respect to commercial aquarium
collection permits. The circuit court did not
err in denying Petitioners’ motion for sum-
mary judgment with respect to recreational
aquarium collection permits.

We note that HRS § 343-5(g) (Supp. 2012)
provides that agencies, in preparing an envi-
ronmental assessment, “may consider and,
where applicable and appropriate, incorpo-
rate by reference, in whole or in part, previ-
ous determinations of whether a statement is
required and previously accepted state-
ments.” HRS 343-5(g) (Supp. 2012). A similar
authority, derived from HRS § 348-5, exists
in HAR § 11-200-13(a) (effective 1996), pro-
viding “that whenever an agency proposes to
implement an action or receives a request for
approval, the agency may consider and, when
applicable and appropriate, incorporate by
reference, in whole or in part, previous deter-
minations of whether a statement is required,
and previously accepted statements.” These
provisions alleviate the concern that an envi-
ronmental assessment would necessarily
have to be prepared whenever an applicant
applies for an aquarium collection permit.
Further, “a group of proposed actions may
be treated by a single environmental assess-
ment or statement,” HRS § 343-6(a)(1)
(2010), when “[tJhe actions in question are
essentially identical and a single statement
will adequately address the impacts of each
individual action and those of the group of
actions as a whole,” HAR § 11-200-7 (effec-
tive 1985). Such an approach can assuage
concerns about aquarium collectors not hav-
ing the resources to comply with HEPA.

On remand, the circuit court is directed to
grant Petitioners’ summary judgment motion
to the extent that Petitioners are requesting
declaratory relief and a prohibitory injunc-
tion as to commercial aquarium collection
pursuant to permits issued under HRS
§ 188-31 and DLNR’s administrative rules.

Further proceedings are necessary, however,
in order to determine whether Petitioners
are entitled to declaratory relief and a pro-
hibitory injunction as to recreational aquari-
um collection permits,

VI. CONCLUSION

Accordingly, we vacate the ICA’s judg-
ment insofar as it affirmed the circuit court’s
judgment granting DLNR summary judg-
ment, The ICA’s judgment is further vacated
to the extent that it affirmed the circuit
court’s judgment denying Petitioners’ motion
for summary judgment with respect to com-
mercial aquarium collection permits. Similar-
ly, the circuit court’s judgment is vacated
insofar as it granted summary judgment to
DLNR and denied Petitioners’ summary
judgment motion with respect to commercial
aquarium collection permits. The remaining
portions of the judgments of the ICA and the
circuit court are otherwise affirmed, and this
case is remanded to the cireuit court for
further proceedings consistent with this opin-

ion,

Lt
403 P.3d 306
ONEWEST BANK, FSB. BY AND
THROUGH its  successor-in-interest,
OCWEN LOAN SERVICING, LLC,
Plaintiff-Appellant,
ve
Timothy Reuben FORSBERG; Susan Al-
len Forsberg; Mortgage Electronic Reg-
istration Systems, Inc., solely as nomi-
nee for Quicken Loans Inc.; Citibank,
N.A., Defendants-Appellees,
and
John Does 1-50; Jane Does 1-50; Doe Part-
nerships 1-50; Doe Corporations 1-50;
Doe Entities 1-50 and Doe Governmental
Units 1-50, Defendants
NO. CAAP-15-0000889
Intermediate Court of Appeals of Hawai‘.

September 28, 2017

529
SUMMARY DISPOSITION ORDER

Vacate. Remanded,

|
403 P.3d 306
MN, Plaintiff-Appellee,
v
MN, Defendant-Appellant
NO. CAAP-16-0000397
Intermediate Court of Appeals of Hawai'i.

DATED: Honolulu, Hawai'i,
September 29, 2017.

SUMMARY DISPOSITION ORDER

Affirmed.

LJ
403 P.3d 306
STATE of Hawai‘i, Plaintiff-Appellee,
v.

John Steven SCHLAFF, Defendant-Ap-
pellant, and Brandon Fredianelli,
Defendant-Appellee

NO. CAAP-16-0000364
Intermediate Court of Appeals of Hawai‘.

DATED: Honolulu, Hawai‘,
September 29, 2017.

530 EE
SUMMARY DISPOSITION ORDER 1:

Vacated. Remanded. 403 P.3d 307
Allen M, OZAKI, Plaintiff-Appellee,

ve
Denise N. SAUNDERS and Windward

Wheels, LLC, Defendants-
Appellants
NO, CAAP-15-0000670
Intermediate Court of Appeals of Hawaii.

DATED: Honolulu, Hawai‘,
1 October 8, 2017.

403 Bad 307 Po

IN the INTEREST OF CH; MM
SUMMARY DISPOSITION ORDER
Remanded.

In the Interest of MM

In the Interest of CH; MM

In the Interest of MM 7

NOS. CAAP-16-0000661 and
CAAP-16-0000662 LI

403 P.3d 307
STATE of Hawai‘i, Plaintiff-Appellee,
v
Brian UNDERWOOD, Defendant-

Appellant.
Intermediate Court of Appeals of Hawai'i.
DATED: Honolulu, Hawaiti,

SUMMARY DISPOSITION ORDER October 10, 2017.
Affirmed.

Intermediate Court of Appeals of Hawai'i.

DATED: Honolulu, Hawai'i,
September 29, 2017.

SUMMARY DISPOSITION ORDER
Affirmed.

403 P.3d 308

Richard A. VILLAVER, Plaintiff-Appel-
lant, y. David Kawika Sylva; Hawaii
Mega-Cor, Inc., a Hawaii domestic for-
profit corporation, Defendants-Appel-
lants,

and

John DOES 1-10; Jane Does 1-10; DOE
Corporations 1-10; DOE Partnerships 1-
10; DOE Companies 1-10; DOE Non-
profit Entities 1-10; and DOE Govern-
mental Entities 1-10, Defendants

NO, CAAP-14-0001086
Intermediate Court of Appeals of Hawai‘.

DATED: Honolulu, Hawaii,
October 11, 2017.

531
SUMMARY DISPOSITION ORDER
Affirm,