Title: Bento v. Valley Isle Motors

State: hawaii

Issuer: Hawaii Supreme Court

Document:

‘tee NOT FOR PUBLICATION TK WEST’ HAWAI'T REPORTS XND PACIFIC REPORTER *
no. 26962

IN THE SUPREME COURT OF THE STATE OF HAWAI'I
ee

JOSEPH R. and ROSE A. BENTO,
Plaintiffs-Appellees,

VALLEY ISLE MOTORS,
Defendant /Cross-Claimant-Appellant/Third-Party Plaintiff-
Appellant,

and

    

SAFE-GUARD PRODUCTS, INTERNATIONAL, INC.,
Defendant /Cross-Claim Defendant-Appellee, |!

and

om

RED SWAN, INC.,
‘Third-Party Defendant-Appellee,

91:6 Wy 91 way ogg

and

DOE DEFENDANTS 1-50,
Defendants/Third~Party Defendants.
(los. 26961, 27004, & 27325)

APPEAL FROM THE CIRCUIT COURT OF THE SECOND CIRCUIT
(CIV. NO, 03-1-0114(2))

y DIS ORI
(py: Moon, C.d., Levinson, Nakayana, Acoba, and Duffy, JJ.)

In these consolidated appeals, defendant/
cross-claimant-appellant/third-party plaintiff-appellant Valley
Isle Motors, Ltd. (Valley Isle) appeals in No. 27325 from the

May 2, 2005 judgment of the circuit court of the second circuit,
the Honorable Shackley Raffetto presiding, dismissing all of
‘44 NOT FOR PUBLICATION IN WEST'S HAWAT'T REFORTS AND PACIFIC REPORTER #44
Valley Isle’s clains against defendant/cross-claim defendant-
appellee Safe-Guard Products International, Inc. (Safe-Guard) and
third-party defendant-appellee Red Swan, Inc. (Red San).

Valley Isle also separately appeals, in Nos. 26961 and
27004, from the November 8 and Decenber 6, 2004 orders of the
circuit court, the Honorable Shackley Raffetto presiding, finding
the two settlements between the plaintiffs-appellees Joseph R.
and Rose A. Bento and Safe-Guard and Red Swan, respectively, to
be in good faith,’ pursuant to Hawai‘ Revised statutes (HRS)
§ 663-15.5 (Supp. 2008).?

On appeal, Valley Isle challenges the applicability of

 

RS § 663-15.5 to the dispute, pointing out that Act 300° ~;

+ on January 26, 2006, this court consolidated Nes. 26961, 27004,
and 27325 under No. 26961.

covebligerss

 

2 as § 663-15.5, entitled “Release; joint tortfeasor:
good faith settlenent,” provides in relevant part

 

(b) For purposes of subsection (a) (setting forth the
rights of nen=seteling Joint tortfeasors and co-cbligors with
Fegara to Settlenent agreements], any party shall petition the
Sure for a hearing cn the issue of good faith of » settlement
guterea inte by the plaineif! dna one or more slleged
fortfeasors|.)

 

    

 

 

ig) “n' determination by the court that 2 settlenent was made
tn good faith shail
(1) Ber any other Joint tortfesser or comcbiicor from any.
further clains ageinst the settling tort fessor or com
celigor, except those based on a written indennsty
agreenent; and
(2) Rasule in a dismissal of 211 crose-clains filed
against the settling joint tortfeasor or co-cbliger,
ekcept those sased on @ uritten indennity agreement
le) A party aggrieved By court Getersination on the sesue of
good faith may eppeal the deterninetion. «+

 

 

 

 

 

> Act 300, section € provi his act
shall apply to. . _ [ejny relesse, disnicesl or covensnt given after this act
tenes effect, regerdless of the date of the occurrence of the underlying
clain, except for clains arising out of a contract made pricr to January 1,
(continted...)

 
 

‘ses not FOR PUBLICATION 18 WEST! 8 HAWAI'T REPORTS AND PACIFIC REPORTER
which was later codified as HRS § 663-15.5 -- states that the Act
shail not apply to “claims arising out of a contract made prior
to Janvary 1, 2002 and alleges that the Bentos’ claims arise out
of a contract entered prior to that date. Valley Isle also
argues that the settlements did not meet the good faith standard
of HRS § 663-15.5 as set forth in Tover v. Adams, 102 Hewai"t
399, 77 P.3d 83 (2003).

upon carefully reviewing the record and the briefs
submitted by the parties and having given due consideration to
the arguments advanced and the issues raised, we affirm the

judgment and orders of the circuit court for the following

 

In Troyer, this court considered the effect of Act

300, section 6(1). The Trover majority concluded:

First, reading Act 300, § €(1) in card materia
with Act 300, § 6(2), s8e gubra note [3], which
Tneteuete that the Act applies to “contract clains
Where. tne contract wae nade on or after January 1,
bea," st ie reasonable to construe the exclusion’ of
Seleine srising cut of a contract mace pricr to
Sanvary 1, 2002" tinply to exclude from the purview of
the Act the type of lsins thet the following
Subsection includes, the only difference being the
Gate ef the underlying contract.

 

 

in Light of the foregoing, we conclude thet Act

300, § €(1) sinply excludes from the Act's purview
Feleases, ciamissals with or without prejudice, oF
Egvenenes pet te sve or net to enforce # judgment
Siven toe co-obiiger on an alleged contract debt
Gite the"contract wae nade pricr to January 1, 2002

fere ie ne logical reason to censtrue the exclusion
nore broadly.

 

 

 

 

 

 

(sescontinued
202.1" See 2O0T aw, Sens, L, Act 300, $6 € and 7 at 677, effective June 28,
2001, this persion of act 300 wes not included in the codified language of
ns § cei-is+5, gen gucra note 2

    
 

{7+ NOT FOR PUBLICATION IN WEST'S HAWAT'T REPORTS AND PACIFIC REPORTER +
102 Hawai'i at 412-13, 77 P.3d at 96-97. Therefore, because it
is clear from the evidence in the record that neither the clains
asserted by the Bentos against Valley Isle and Safe-Guard nor the
potential claim of the Bentos against Red Swan were claims
against co-obligors on an alleged contract debt, they are not
excluded from the purview of HRS § 663-15.5 by Act 300,

section 6(1).

The circuit court did not abuse its discretion in
determining that the settlenents reached by the Bentos with
Safe-Guard and Red Swen were in good faith, inasmuch as: (1)
there remained substantial questions of liabilitys (2) the
settlement involved the disgorgement of all revenues received by
the settling parties from the conduct in question: (3) the
circuit court could have reasonably concluded that the amount
paid in settlenent was in reasonable relationship to the relative
fault of the settling parties: (4) there was no evidence that the
settlement was collusive or intended to harm Valley Isle: and (5)
Safe-Guard's promise to procure insurance naming Valley Iele as
an additional insured did not comprise @ written indemnity
agreenent by Safe-Guard within the meaning of HRS
§ 663-15.5(6) (1), see Vesta Ins. Co. v. Amoco Prod. Co., 986 F.2d
961, 986 (Sth Cir. 1993) (an indemnity clause in = contract for
services does not make the indemniter an insurer); Kinney v. @
Lisk Cou, S86 N.E.24 1090, 1092 (N.Y. 1990) (“An agreement to
Procure insurance is not an agreement to indennify or hold
harmless, and the distinction between the two is well

recognized.”) (emphasis in original) (internal citations
+4 NoT FOR PUBLICATION 111 WEST'S HAWAI'T REPORTS AND PACTFIC REPORTER ***

omitted); Robley v, Corning Cnty, Coll., 521 N.¥.S.2d 861, 863
(app. Div. 1987) ("A contract to procure or provide insurance
coverage is clearly distinct from and treated differently then an
agreement to indemnify.) .

Therefore,

If IS HEREBY ORDERED that the judgment and orders from
which the appeals are taken are affirmed.

DATED: Honolulu, Hewais, April 16, 2007.

on the briefs: Grim

Lisa Woods Munger
(of Goodsill Anderson BlGLoaso
Quinn & Stifel) and

Renee M.L. Yuen

for the defendant-appellant Bice Crete ture

Valley Isle Motors

Lane Hornfeck McKay and JO tN
Terence J. O'Toole

(ef Starn O'Toole Marcus Geer

& Fisher) for the ~ rhe

defendant-appellee
Safe-Guard Products, Inc.

 

charles R. Prather
(of Deeley King & Fang)
for the defendant-appellee
Red Swan, Inc.

Paul Alston, Bruce Wekuzawa, and
Peter Knapman (of Alston, Hunt,
Floyd s Ing) for the
plaintitfs-appelle

Soseph R. and Rose A. Bento