Title: Black v. Pollack

State: hawaii

Issuer: Hawaii Supreme Court

Document:

LAWLIBRARY

*** NOT FOR PUBLICATION ***

 

No. 25725

IN THE SUPREME COURT OF THE STATE OF HANAT'T

 

CHARLES M. BLACK, Plaintift/counterclaim Defendant -
Appellant and Cross-Appellee,

CHRISTINA POLLACK, PAMELA LIMA, and STEPHEN P. ANDERSON,

Defendants/Counter-Claimants-Appellees and
Cross-Appellante,

  
  
  
 

and

 

Defendant!

 

ENTITIES 1-10,

aawa

APPEAL FROM THE FIRST CIRCUIT COURT
(CIV, NO. 01-1-2967)

Enos
(By: Moon, C.J., Levinson, Nakayama, Accba, and Duffy, 99.)
‘The instant appeal and cross-appeal arise out of a
partition action involving seven adjoining parcels of real
property that were inherited and jointly owned by plaintiff-
appellant /cross-appellee Charles M. Black and defendants-
appellees/cross-appellants Christina Pollack (Christina), Pamela
Lima (Pamela), and Stephen P. Anderson (Stephen) [hereinafter,
collectively, the Andersons].! The instant action was initiated
4 on October 7, 2005, counsel for the Andersons filed a Suggestion of

Death with thie court, Rules of Appellate Procesure (HRAP)
Role 43(a) (2003)

 

   

    

 
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by Black, who sought to partition one of the seven parcels. The
Andersons thereafter requested partition of all seven parcels.
Consequently, the Circuit Court of the First Circuit? ordered a
public auction to sell the seven parcels. After several attempts
were nade to auction the parcels, the circuit court ultimately
confirmed the sale of all seven parcels to Slack.

Black and the Andersons appeal from the circuit court's
March 19, 2003 amended judgment entered in favor of the
Andersons. On appeal, Black challenges, inter alia, the bidding
process, the award of attorneys’ fees and costs, and the circuit
court's order denying hie notion for an award of damages for
breach of a settlement agreenent. ‘The Andersons cross-appeal,
challenging the award of attorneys’ fees and costs and the
circuit court's order denying their motion to remedy breach of
settlement agreenent.

For the reasons discussed below, we: (1) vacate the
award of attorneys’ fees and costs; (2) remand to the circuit

and

 

court for a redetermination of the proper amount of f

costs to the respective parties

 

and (3) affirm the March 19,

2003 amended judgment in all other respect:

 

 

*(..continved)
aligned with the interests of Christina and Pamela, who are stephen’s s:
Because Stephen was alive at the tine the instant matter was cons:
by the cireut court, we refer to him in the discussion as a live person:

       

* me Honorable Sabrina ©. McKenna presided over the underlying
proceedings unless otherwise indicated:

 
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I. BACKGROUND

tual Background

 

‘The seven adjoining parcels of real property at issue
in the instant case were originally jointly owned by Black's
parents, John A, Black (John) and Carol L. Black (Carol), whose
respective trusts held an undivided one-half interest in lots
assigned tax map key numbers: (1) 2-5-017-008 (Lot #8); (2) 2-5-
017-009 (Lot #9); (3) 2-5-017-010 (Lot #10); (4) 2-5-017-014 (Lot
#14); (5) 2-5-017-020 (Lot #20); (6) 2-5-017-021 (Lot #21); and
(7) 2-5-017-022 (Lot #22) [hereinafter, collectively, the

are situated on Round Top Drive, in

 

Properties]. The Properti

 

an area known as Tantalus, in Honolulu, Hawai'i. Black and his
brother Gordon Black (Gordon) were beneficiaries of both the John
A, Black Trust and the Carol L. Black Trust. The Andersons were

beneficiaries of the John A. Black Trust.” Black is the trustee

for both truste.

‘The John A. Black Trust terminated upon Carol’s death
on March 6, 1996. The John A. Black Trust provided that Gordon,
Black, and the Andersons would each receive a one-third share of
John's undivided one-half interest in the Properties. The Carol
L. Black Trust bequeathed Carol’s undivided one-half interest

equally to Gordon and Black. In total, both Gordon and Black

> the Andersons are the grandchildren of John’s sister. John and Carol
were the legal guardians of the Andersons

+ the record a:
appeare that John pas

not indicate when John passed avay. However, st
‘vay prior to carol

 

 

 
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were to receive a five-twelfth interest in the Properties, and
the Andersons were to receive a one-sixth interest in the
Properties.

Following the deaths of his parents, Black sought to
purchase the other beneficiaries’ interests in the Properties.
At some point, Black purchased Gordon's interest in the
Properties for $250,000.00, based upon an agreed-upon value of
$600,000.00 for the Properties.’ After the purchase of Gordon's
interest was finalized, Black owned an undivided five-sixth
interest in the Properties.

on Decenber 15, 2000, Black offered to purchase the
Andersons’ interests in the Properties. At the time, the
Properties were still held in trust. Black maintained that the
value of the Properties was $600,000.00 and offered to purchase
each of the Andereons’ interests for $33,333.00, The Andersons
claimed that Black's valuation of the Properties, i.e., $600,000,
was lese than half the tax aesessed value of the Properties, and,

thus, the Andersons claimed that each of their interests was

 

worth $68,411.00, The $33,333.00 offer was reiterated in a
letter dated January 29, 2001 from Black's counsel to each of the

Andersons. On June 22, 2001, the Andersons’ one-sixth interest

 

+ 1m December 1999, Black had obtained appraisals for each of the
Properties (the Decenber 1999 appr ‘he of December 18, 1999, the
Collective appraised value of the Properties as determined by Black's
Sppraiser wae £319,000. According to black’ appraiser, the collective
appraised value is affectea by the steep clift topograply of several of the
{Ste and the limited gub-zone and resource sub-zone designations on the
Properties. However, Black claims that he "believed that it was appropriate
fo purchase Gordon's interest in the ‘properties based on a $600,000.00
vate.

     

     

 

 
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in the Properties was transferred to them by warranty deed fron
the John A. Black Trust.

on duly 9, 2001, Stephen responded to Black’s
$33,232.00 offer with a counteroffer of $50,000.00 for his
interest in the Properties. Stephen indicated that Christina and
Panela would also be willing to accept $50,000.00 for their

respective interests. By letter dated August 14, 2001, Black

 

responded by offering $33,000.00 for Stephen's interest and
authorized hie counsel “to file @ suit for partition for the
(Plroperties* if stephen did not accept the $33,000.00 offer by
August 31, 2002.

By letter dated August 22, 2001, Stephen rejected

 

Black's $33,000.00 offer for his interest in the Properti
‘Therein, Stephen also raised several concerns regarding Black's
management of the John A. Black Trust, questioning whether Black
had been complying with hie fiduciary responsibilities toward the
truat. Specifically, Stephen claimed, inter alia, that Black had
been residing on the Properties without paying any rent for
several years and that Black apparently delayed the distribution
of the Properties from the John A. Black Trust for approximately
five years beyond the required distribution date. Stephen then
indicated that he ‘would be willing to accept $44,000.00 in full
satisfaction for any claims he might have against the (John A.

Black] Trust and for his interest in the real estate.”

 
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On August 29, 2001, Black rejected Stephen's offer of
$44,000.00 and countered with an offer to purchase each of the
Andersons’ interests for $38,000.00. Black also stated that, as
part of his offer, he was not requesting a release of any claim
Stephen may have against Black as trustee of the "Carol L. Black
Trust.**
B. Procedural History

on October 10, 2001, Black filed the instant partition
action but only with respect to one of the seven parcels,
specifically, Lot #8.7 In response, the Andersons filed a
counterclaim (1) asserting breach of fiduciary duties and (2)

requesting an accounting (hereinafter, collectively, the Trust

 

Claims) .

2. Black’s Notion for Summary Judgment on the Trust
Claims

on Noveber 15, 2001, Black moved for summary judgment
on the Trust Claims. Therein, Black argued that his motion for
susnary judgnent should be granted inasmuch ae: (1) the circuit
court lacks jurisdiction over the Trust Claims; and,

alternatively, (2) the Andersons failed to bring the Trust Claims

 

i Black Trust.

* According to Black, he sought to partition only one lot because he
was concerned that, if the lote were auctioned together, the City might try to
Consolidate the lots. = ‘reat here the separateness

oweves, the Andersons characterised Black's action to partition
aban "abusive tactic.

         

     

 
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within sixty days following their receipt of the accounting of
the John A. Black Trust. Black contended that the probate court,
rather than the circuit court, had jurisdiction over the Trust
claims.

On Novenber 30, 2001, the Andersons filed their
menorandun in opposition to Black's motion for sunmary judgment.
‘Therein, the Andersons countered Black's arguments, contending,
Anker alia, that: (1) the circuit court has jurisdiction
inaamich as the Trust Claims arose under the law of co-tenancy;
and (2) the Trust Claina are not barred by the sixty-day
provision contained in the John A. Black Trust. The Andersons
also argued that exclusive jurisdiction does not reside with the

probate court to adjudicate trust-related disput

 

on December 6, 2001, the circuit court entered an order
denying Black's motion for summary judgment on the Trust Claims
without holding a hearing

2. The Motions for Summary Judgment for Partition by
sal

 

on December 7, 2001, the Andersons filed a first
amended answer and first amended counterclaim seeking partition
with respect to all seven parcels. In their first amended

counterclaim, the Andersons specifically requested, inter alia,

that the circuit court order a sale of the Properties, with each

 

parcel to be sold

 

yarately, unl

 

sale of all seven parcels ai

one unit would yield a higher

 

price.

 
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On December 26, 2001, Black filed a motion for summary
judgment, seeking partition by sale with respect to only Lot #8.
on January 2, 2002, the Andersons filed a cross-motion for
summary judgment, requesting partition by sale with respect to
all seven parcels.

on February 6, 2002, the circuit court entered ite
findings of fact (FOFs), conclusions of law (Cols), and order
granting in part Black's motion for summary judgment and granting
in part the Anderson's cross-motion for summary judgment (the
February 6, 2002 FOFs, Cols, and order). The circuit court
concluded, inter alia, that: (1) the Properties should be
partitioned by sale at a public auction, Cot No. 3; and (2)
“[t]he primary objective of judicial sales in partition actions
ie to sell the Properties in a manner that will yield the best
price for all the owners.” COL No. 4. ‘The circuit court
appointed Fred Lunt as a commissioner to eell the Properties and
directed him "to take reasonable steps to market the Properties
in order to maximize the number of prospective bidders and the
sale price[.]" The circuit court also authorized and directed
Lunt to, inter alia: (1) ‘use hie expertise to determine whether
selling the Properties collectively or selling the Properties as
individual lote will yield the highest total value"; and (2)
wutilize the method of sale that [he] believes will yield the
highest total value[.]* Finally, the circuit court held that the

instant order “resolves all claims under [Black's] complaint and

 
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[the Andersons'] counterclaim for partition of all seven parcels,
leaving [the Andersons’] counterclaims for breach of fiduciary
duty and an accounting [1.e., the Trust Clains] for later
disposition.”

As a result of the circuit court ordering the
Properties to be sold at a public auction, a “Notice of Partition
Sale” (Notice) was published in a newspaper on April 14, April
21, April 28, and May 5, 2002. The Notice did not indicate that
the sale would be subject to court confizmation.

3. The May 20, June 7, and July 11, 2002 Auctions

A public auction was held on May 20, 2002 to sell the
Properties (the 5/20/02 Auction). Approximately fifty-three
individuals attended the 5/20/02 Auction. The only bidders were
Steven Jackson, a non-party to the instant action, and Black.

‘The Properties were auctioned off separately, with Black as the
high bidder on all seven lots. The high bids were ae follows (in
order of sale): (1) Lot #9 - $452,000.00; (2) Lot #20 -
$1,000.00; (3) Lot #22 - $60,000.00; (4) Let #14 - $501.00;

(5) Lot #10 - $40,100.00; (6) Lot #8 - $500.00; and (7) Lot #21 -
$500.00. The aggregate value of the total bids was $553,601.00.

In hie commissioner's report filed with the circuit
court on May 28, 2002, Lunt opined that the $553,601.00 aggregate
value of the total bide was Yan expected result considering the
sub-zone issues, the amount of repair needed on the property, and

the nature of the sale (auction, with no due diligence or

 
*** NOTFOR PUBLICATION ***

 

financing contingencies).* tunt also noted that the aggregate
value of the total bids exceeded the Decenber 1999 appraisals by
nearly $240,000.

on May 30, 2002, Black filed a motion to confirm the
sale of the Properties. Attached to Black’s motion was a
declaration by Black’s counsel that Lunt “informed the persons

present [at the 5/20/02 Auction) that the [circuit cJourt had not

 

ordered overbidding, and that if any person was inte

. Properties, that person should bid at the auction.” (Yee
Decl.)

on June 4, 2002, the Andersons filed a memorandum in

response to Black’s motion to confirm the sale of the Properties.
Therein, the Andersons requested the circuit court to exercise
its equitable discretion to allow overbidding at the confirmation
hearing in order *[t]o obtain the ‘best price’ possible under the
circunstances(.]" The Andersons also maintained that Black's
statements to the circuit court, third parties, and Lunt that the
circuit court already ruled that overbidding would not be allowed
was a "blatant mischaracterization of the record" inasmuch as the

circuit court “never made such a ruling.” In support of their

 

quest to reopen the bidding, the Andersons submitted the
affidavit of Jackson, which essentially indicated that Jackson
would be willing to bid five percent higher than Black's bid at

the 5/20/02 Auction on six of the seven lots collectively.

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A confirmation hearing was held on June 7, 2002."

Preliminarily, the circuit court noted that, although the

 

pruary 6, 2002 FOFs, Cola, and order did not include a
provision allowing overbidding, such an omission was not intended
to preclude overbidding. The circuit court stated that ‘overbids
at confirmation sales are fairly in my view routinely granted in
this jurisdiction. And it appears to the court that this would
be a part of the court's equitable jurisdiction." Relying on

Brent_v, Staveris Development Corp., 7 Haw. App. 40, 741 P.2d 722
(2987), the circuit court reasoned:
[T]he Untermediate Court of Appeals] TCA noted that the
lower court's authority to confirm a judicial
matter of equitable discretion. In ext
Aisereeion{,] the court should act in the interes
falenece and prodence and eith Just regerd for the Fights of
all concerned and the stability of judicial sales
Now do understand that in terms of stability of
judicial salen that would probably dictate against allowing
Qverbidding; however, under the circumstances of this case
Gnd being avare of the -- candidly being aware of the prior
Regotiations, sk cetera, and also being avare of the tax
Besessed values of the (P)roperties, ("] it appears to the
Court that deepite the fact that this ie a partition
Se'seill in everyone's best int really'to obtain
highest price.
‘Actually, (Black), it appears, ie not that interested
in the highest price because [Black's] interest really is to
ion over the property or
‘The (Andersons’) interest isin obtaining the
Highest price. And(,) in balancing these interestel,] it
appears fo the court’ that it makes sense to allow
Overbidding in this case

  

 

 

 

 

 

       

     

 

+ the confiveation hearing was initially presided over by the Honorable
Richard W. Pollack. Wowever, Judge Pollack soon determined that it was
heceseary for Judge Nexenna to interpret her February 6, 2002 FOFS, COLs, and

Thue, requested that the confirmation hearing resune later in’ the
Say in order for Judge McKenna to preside over the hearing

      

ler at the confirmation hearing, the circuit court inquired about
fea Value of the Properties. Counsel for the Andersons informed
the circuit court that the 200 eax agsensed value was $1,273,000 and that he
2002 tax sesessed value was Just under 51,694,800. Counsel for Black reminded
the circuit court that the Decenber 1999 appraisals indicate that the
appraised value of the Properties was §319,000-

        

-u-
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Extensive discussion of the overbidding procedure then
ensued:

[BLACK'S COUNSEL): -- how do you propose that this
bidding go formar? Secause my client bid on some of thet
lots on the prenise thet he war going to get the next lot.
‘There vas a certain strategy on this. Maybe we should start
from ground gero on all of then,

THE COURT: “My suggestion -- and I wanted to run this
by both of you on thin issue -- le 1 would like to request
that overbidding be conducted in the alternative; in otaer
words, informing everybody that the court is going to
Fequest that the commissioner conduct bidding lot by lot and
then one bid for the total with the assumption chat the
court is prepared to accept what results in the higher ylelé
Sn total.

TANDERSONS’ COUNSEL): Un, well, our variation on
that, Your Honor, is that you can combine these in any way
that the buyers might want. And, for instance, if, well,
Like Dr. Anderson{"] Se interested in (Lot #120 and [Lot
)i4, 3 he bid on those as a group and that yields a higher
price, then -- and he's not willing to bid on the othere
2 group, ‘he shouldn't —- he shoulda’t have to compete.

‘Tig COURT: That’s fine, Mut he'll take the risk a
far as I'm concerned because

[ANDERSONS” COUNSEL] + Right.

‘ME COURT: I'm not going to confirm his bids for, you
know, like -- that’s not fair to (Black)

TaNDERSONS" COUNSEL] + No.

THE COURT: [Black] bid a total of [6553,000) on the
sumption that he was getting everything. Aac

TaNDERSOKS" COUNSEL]: "I think T agree with what you
just said, Your Honor.

THE COURT: I'm not going to say that, you know,
Black) loses everything except Let {#]9. I'm only going to

46 you understand what I'm saying? it’s only ~-r"
o at a

 

 

 

 

 

 

 

 

    

 

 

chat ie of wnat

TANDERSONS’ COUNSEL): Right.
‘Tae COURT:
Ae at least 5 percent over what's the total currentiy, $2

 

br. Bruce Anderson was a non-party interested bidder, who, along
with Jackson, attended the confirmation hearing. The parties agreed before
Jusge Pollack that Dr. Anderson could use the Andersons’ attorney a= his Proxy
to Bid inasmuch as Dr. Anderson had plans to take a flight to Maui later in
the day and, thus, would not be present if the circuit court ordered
overbiading to take place later that day. However, Judge Mckenna determined
that there was s "clear conflict of interest” with Dr. Andersen uaing the
Andersons’ attorney ab proxy, because, while the Andersons “have an interest
in seeing that the best possible price is obtained(,|" Sr. Anderson “has an
interest in getting the (Plropertics without offering his top dollar.” 7h
Judge McKenna did not allow the Andersons’ attorney €o represent Dr.
Anderson's interests but did allow Or. Anderson to relay his bide over the
telephone to the commissioner who was to preside over the overbidding. It ie
Unclear whether Dr. Anderson 1s related to the Andersons.

 

 

 

 

-12-
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piv in as least abou
50 people will be

taking s risk I recognise that

[ANDERSOXS' COUNSEL]: No, we're in agreenent. And T
‘guess vat I’m trying to say Le that the componente don't
Recessarily have to be single lots. And in Mr. Jackson's
Cave he's made it clear, and I think for good reason, that
hhe would like to bid on [the six lots] other than the house
Chae, Lot #9)

 

(umphases added.) The parties then discussed the issues
surrounding the Andersons’ proposal to “package” some of the lots
together, i.e., to auction off certain lots together as one

group. Black's counsel pointed out that packaging the lots “like

 

the house on Lot #9

 

a eix-pack” is problematic inasmuch

encroaches Lot #20, and there are various easenents providing

 

access to Lot #9 and Lot #14. Black's counsel stated that Black
had bid on Lot #9 ‘with the understanding that he could bid on
the individual lote around it[,]* but if “it’s packaged and he
can't bid on the individual lote, he loses this Lot [#]20 which
has the encroachment.” The circuit court agreed with Black that
the Andersons’ proposal to package some of the lots together
would be unfair to him and stated:

0 4 you're going to do it, we'll just do it one by one and
411 together. One By one and then all together. That's it.
People will take the risk aa to what they may or may not ge
because I want to do what's equitable. Ang what [the
Andersons are) proposing ie not equitable to (Black).

 

 

However, the parties continued to argue over the overbidding
procedure and whether it was fair to everyone involved. The

circuit court then stated: ‘Clearly if T was going to allow any
overbidding here, it was going to be we're going to start again

was whateve:

 

-13-
 

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SSS

So it would have to be that the total bid today would have to be
at least about $580,000 before I would consider it." (Smphasis
added.) Finally, the hearing concluded when the circuit court
stated that it would request that the commissioner “conduct the
overbidding first by doing it lot by lot and then doing it with
the total and then come back to [her] with the results.”
Thereafter, a recess was taken to allow the bidding to be
conducted outside the circuit court (the 6/7/02 Auction).
Inmediately after the 6/7/02 Auction, the parties

appeared before the circuit court to discuss the results. tunt’s

 

assistant, Peter Chessen, who conducted the 6/7/02 Auction,
reported the results:

CHESSEN: Ke opened the bide up in the sane order ve
had asked for bids on tot [#5] which ie the one with the
house. “Mr. Black was the only one that was interested in
Phat, ‘and he bid a thousand doliare ((#1,000)} a8 his: bid.
We then west on to Lot [#]20 which we hada series of bids
fand the final bid, which Mr. Black wae the winning bidder on
that was twenty-two thousand one hundred [122,101]

Lot {#]22, that lot went for ¢270, 100.

Lot {#)34 was $20,008,

   

   

IANDERSONS’ COUNSEL] + No --
cunsesn: bidders.

nd that total anounted to $423,202

HESSEN: “Correct. There were no bidders on the
property in total we closed the bidding off then.
‘THE’ CouRT:, Okay. “ali right. Then the cotal os the
overbidding $423,202 ie actually substantially J

bid at the {5/20/02 a}uctionl.)

 

 

than the

 

(Emphases added.) The Andersons’ counsel, however, disagreed

with Chessen’s report of the results, and the following

 

discussion occurre

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(ANDERSONS’ COUNSEL]: Your Honor, we don’t agree with
‘The vay the auction vas conducted vas for
overbigs and as such apparently Mr. Jackson didn’t intend to

Overbia the house bid. Mr. Black said thousand dollars
Watch was 8 nullity ab far as Tm concerned.

When all the bidding was done(,] (Black's counsel) was
‘good enough to add up all the numbers and announce the
{s1e74,302 which included {5145:(, 000] for [Lot #9), and
{$500} “each for (Lot #8 and [let #121. So T think they're
making & mockery of the process. [Black's counsel is) the
fone who wrote that on the board, you know, after he came in
fang wrote than (sic) on the board, And I’haven’t agreed
with’ that for a norent

THE COURT: Well, I've heard from the comiasioner who
said that the only percon that bid on (uot #]9 ~~ and
Actually st was supposed to Be an overbid. “It vas only
Supposed to be if if was over. [5450,000)-

Tanpensons’ COUNSEL]: That's right. We ignored it.
And that means the overbid stands

‘THE COURT: No, I made that very clear I wasn't going
to allow that to happen because that was grossly untair
Under the cireunstances. Under the clreumstances of this
cae it would be grossly unfair to require that the old bid
Stand as to one Lot only, and I gaia that wasn't going to
happen. S0 there -- at thie point the court 1s prepared

TambeRsons” COUNSEL): We really got a mess here. I
ean I would suggest that Lot [8)9 shoul go back to the
Previous high bidder, Tf Mr. Black doesn't want it for
{$1541 {,000), 7 think Mr. Jackson will take it for his
previous high bid of (s14s0{, 000). Dut T don’t think that
er he wasn't given notice that that was going to be on the
fable, but I think he would do that.

gacksou: Yes, T would.

THE COURT: “What wae that again? what wae that again?

(ANDERSONS’ COUNSEL]: Mr. Jackuon will take [Lot #]9,
to have his previous high bid of [s1450[,000) if no
Overbidding ie required and Mr. Black wants to back out
Ghat’e esoentially what he's Gone, He's backed out on (Lot
ns.

 

 

 

 

 

   

 

 

 

‘THE COURT: Right. I made that fairly clear at the
hearing 1 thought.

TANDERSORS’ COUNSEL]: Yeah. Well, 1 guess I'm not
gure what the proposal is, Obviously thie ie not a fire and
Confirmable reeslt.

ME COURT: All right. $0, Mr. Jackson, you're
indicating you are now willing to pay $450,000 for Lot (#91?

inupeasons’ COUNSEL]: This ie obviously not,
contirmable, 3 that is confirmed, with the court's
Intention, then it should not be confirmed. But if he
wanted ¢o' renege on his Lot [#9 bid, we still ~~

‘THE COURT: “Me. Jackson was outeide and sau Mr. Black
bid [$1,000] on Lot [#1 and dian’t bid? Ts that what
happened?

TBLACK’S COUNSEL]: That'e correct

[ANDERGONS” COUNSEL): Right. Because the way the
auction was handled was overbidaing, so Mr. Jackson opened
up on all the other lote he vas interested in. He bid 5
percent or more greater. He wasn't going to open up on Lot
{#}s at [$]4751,000] or whatever it would take

 

 

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THE COURT: Mr. Chessen, did you say each lot had to
be § percent higher than the prior bid?

TANDERSONS" COUNSEL]: That's the way it was done.

GHESSEN: T originally asked for overbide or T had
originally asked for bide. T'was informed by [Andersons’
counsel] that after T had opened up the bidding on tot [#19
that, the intention wae that we were Just going to do
overbide and

THE COURT: [The Andersons’ counsel] told you that,
only take overbide?,

TANDERSONS’ COUNSEL]: I probably said that that was
ny understanding, Your Honor:

 
 

GHESSEN: [Andersons counsel] said that let's move
fon. Uh, we're only doing the overbids. And there was
Robody *-"nobody there wanted to bid on Lot (#13 on an
Overbid situation

SHE COURT: okay. Tvaen't clear enough. Let's ius
do this asain. All right.

 

(Emphasis added.) Thereafter, the following discussion occurred
with respect to Black’s counsel's understanding of the events
surrounding the 6/7/02 Auction

[BLACK’S COUNSEL]: $2 today we thousht what vou [ithe

ots
‘THE COURT: Thats what 1 thought.

istack’s COUNSEL): So that's what we did.
(HE COURT: That‘a not how it wae conducted.
{ANDERSONS’ COUNSEE]: —we-

[BLACK’ S COUNSEL]: Men we got to Lot(s] (#120, 22,
a6, and 10, Me =

THE COURT: I gee. So when Mr. Black said (62,000),
who said atop?

[BLACK’s COUNSEL]: Nobody else bid. There were no
other Bidders.

TEE COURT: Mr. Jackson, you're saying you didn’t
understand that when Mr. Black said (¢1,000] you could have
bid more than [51,000] at that point?

TACKSON: —1'—- at that point, Your Honor, 1 thought it
wae atvictly overbide. That wae my whole impression, the
“hole thing was overbide. And I wasn’t willing to 99 for
Four hundred and seventy-three some odd thousand dollars.

 

 

isuack’s counsst]: Your Wonor, the declaration Mr.
Jackson signed expressly stated that he was not inter
In wet (9.

(ANDERSONS’ COUNSEL]: AE that price.

GACKSON: At that price

Tae COURT: AE what price?

TANDERSONS’ COUNSEL]: Tm excess of the [5]452[, 000].
T sean it’s -- whether he eaid that or not ~~ well, we can
ask Bin. He's here.

‘THE COURT: Okay. Well, being that ve would -- this
would Feaule in over a three hundred thousand dollar

 

 

n16-
*** NOTFOR PUBLICATION ***

((§300,000)) difference, the court is going to x
thie matter. Okay.

schedule

 

ipuack’s counset: Judge -- let me ask you this,
sudge.

(BLACK’S COUNSEL]: If the point here is chat Hr.
Jackson and Mr. Black were the only bidders at the auction
two weeks ag0 Lise... the 5/20/02 Auction), we go to the
overbia that you ordered toaay, they're still the only,
Bicders. ow Mr. Jackson got to change every one of his
auction bids
other ones?
(BLACK"S COUNSEL]: Yes. Mr. Jackson was the only
other bidder.

THE COURT: What happened to (Dr.] Anderson?

TANDERSONS* COUNSEL) Ke couldn't reach him on the
Phone, so he would probably like to come the next tine.

IBLACK'S COUNSEL]: Judge, let me explain what
happened out there if you don’t mind.

‘Taz COURT: Sure

IBLACK’S COUNSEL}: The only bidders at the auction
two weeks ago were Mr, Black and Mr. Jackson. The only
bidders at the overbid today were Mr. Black and Mr. Jackson.
Just like two weeks agol,] Me- Black was the successful
bidder on every tot

oh, Mr. Jackson is the one that bid on

 

eb

 

      

 

Weeks ago and understood everything, gets to change eve!
Gne of Bis bids tocay, but they're saying Mr. Black can't.
‘hac'a cheie whole argument,

‘THE COURT: ME. Black can change his bids too, yes,
clearly.

[SLACK'S COUNSEL): Yes. That‘# why he bid @ thousand
doniare

[ANDERSONS’ COUNSEL): And he aid.

THE COURT: That's why T'was not clear enough.

 

 

(Bmphases added.) At the conclusion of the hearing, the circuit
court scheduled ancther hearing on the instant matter. with
respect to the procedure to be followed at the third auction, the

circuit court stated that:

[alitermate bidaing be conducted lot by lot and then one bid
for the total and that St will start ffom =- because of the
Gircunecances it will start -- t's not an overbia
situation.

‘We will go lot by lot and it can be, you know, 2
thousand dollare for each lot ae far ae I’m concerned, And
Twill see if the total at ehat bid is at lease 5 percent
more than the §553,000 that is the subject of this notion
nd thea 1 will decide.

  

 

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Finally, the circuit court rejected the Andersons’ proposal to
package sone of the lots together.

on duly 9, 2002, Black filed further objections to the
cireuit court's order allowing a third auction. Therein, Black
renewed his request that his winning bids, ive., collectively,
the $553,601 total bid at the 5/20/02 Auction, be confirmed
Black also indicated that he hired the same appraiser who had

conducted the December 1999 appraisals to conduct new appraisals.

 

‘The updated appraisals valued the Properties at $410,000.00 as of

 

June 2002 (the June 2002 appraisals). Black attached the June
2002 appraisals ae an exhibit in support of his further
objections.

At a hearing held on July 11, 2002, the circuit court
allowed a third auction to be conducted despite Black's
objections. At the beginning of the hearing, the circuit court
noted that ‘one of the main reasons that the Court decided to

allow the overbidding was because it was the Court's

 

understanding that at least some point there had been at least
one offer totalling [sic] around a million dollars[.]* However,

Black’s counsel stated that Black had “never offered a million

 

dollars for the (P]ropert [ies]." The circuit court then stated
that it believed another individual, not Black, had offered
approximately a million dollars for the Properties. Despite the
circuit court's belief, there apparently was no other offer to

purchase the Properties except for Black’s offers prior to the

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filing of the instant partition action. Nonetheless, the circuit
court stated that, *[iJn any event, the Court, in an effort to
try to obtain the best price possible, has indicated that it

would allow the overbidding.”

The circuit court then reiterated the bidding procedure
that was to be followed in the third auction. The circuit court

stated:

In terms of the procedure, it is my intention to
request bidding as to each lot firet and then all of the

Together as one. it was my intention =~ and T believe
ed that T would only accept an overbid if it was at
f five perceat in access of the original total ("]

Inhe standara in thie Court -- and T do not
believe 1 deviated from that standard -- ie to only accept
an overbid if it is at least five percent over the previous
Bia’

 

 

 

 

 

But just to make it clear today, 1m not going to
Accept any overbids, unless the total cones to at least five
Dercent over the May 20, 2002 auction price of $553

5553, 601. G0 according to my rough calculations —- and
could be wrong =- but I believe five percent over that meant
at least [s}se1,262. And if the total dose not equal oF
exceed that $561,261 figure, the Court ts going to confirm
the gale of the prior price [Le., the winning bide from the
5/20/02 auction)

   

 

 

‘The bids -- The bidding will start at zero for each of
the seven lots. And then there will be one bid for all of
the parcels together.

‘The Court is not going to allow the pergon that bid on
each individual lot co tnen inerease their offer after the
fotal bid has been received in order to bump up the cotal
bid. I don’t think that would bes fair procedure, So,
basically, it will be a bid on each lot in that order,
starting st zero and then one bid for ail seven lote total

Fiwould like to compare the total for the seven
separate and for everything together. If neither of thote
are equal to or exceeds $581,281, then the May 20th bid of
$853,601 be confirmed. If either of those -- Tf only one of
Those ie above -- 1s at or equal to €561,281, then that bid
will probably be confirmed.

TE both Of those are at or above $581,201, then the
court will accept the higher of the ©
fend up being separate -- the bids for each, the seven, could
be accepted separately or 1t could be the amount for all
seven would be accepted, depending on each one. So that's
the procedure

 

 

 

 

 

 

sis
*** NOT FOR PUBLICATION ***

 

A recess was taken to allow the third auction to be conducted
outside the circuit court (the 7/11/02 Auction) .

At the 7/11/02 Auction, Black, Stephen, Jackson, and
Dr. Anderson placed bids. After the bidding was concluded, the
parties returned before the circuit court. The circuit court
asked Lunt’s assistant, Michael Pietsch, who presided over the

7/11/02 Auction, to report the results. Pietech state

 

PIBTSCH: Your Honor, we bid on each individual
parcel. And Mr. Black wae’ the highest bidder on each
individual parcel at the end, totalling [eic] $680,000. And
then we hada total bid, and there were no bidders
outbidaing Mr. Black

THE COURT: “Weil, Mr. Black -- Well, ince it ended up
going with the individual, ‘then =~

PIETSCH: You want it by each parcel?

‘pik COURT: Yet

PIETSCH: “starting off with (Let #19, with a final bid
of [615811,000)

ot'#)20, {s132,000

tet £)22, bia of (8)201, 000.

ot $)14; with a Bia of ($12,000.

[ot #110; with 2 bia of (6)éi, 009.

Mot #16, with a bid of ($12,000.

And final [het #121, with a bia of (612,000.

   

 

Thus, based on Pietsch’s report, the circuit court orally
confirmed the results of the 7/11/02 Auction with the winning bid
of $880,000 for Black.
4. Issuance of @ Stay Pending Settlement Negotiations

on guly 26, 2002, the circuit court entered an order
staying the instant case pending settlenent negotiations between
Black and the Andersons in an effort to settle the instant case
without incurring further attorneys’ fees and costs
Specifically, the circuit court ordered “that all further
Proceedings in this case, including discovery, be STAYED pending

mandatory participation by the parties in good faith settlement

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negotiations before the Honorable Colleen Hirai with respect to
all isgues in thie lawsuit." Prior to the order staying the
instant case, there were several issues pending before the
circuit court, including, inter alia, the parties’ entitlement to
attorneys’ fees and costs, various discovery disputes, and
disposition of the Trust Claims.

5. Settlement of the Trust Clains

on August 12, 2002, the parti

 

attended a settlenent

conference before Judge Hirai, wherein the parti

 

agreed to
settle the Trust Claims. Specifically, the parties agreed to

“dismiss with prejudice all trust claims asserted against [each]

 

other and to "rel

 

e and forever discharge

 

ch other from any
and all claims, demands, causes of action related to or arising
from or on account of the subject matter of thie lawsuit’ except
for those matters before Judge McKenna. With respect to the
matters before Judge McKenna, the parties agreed that:
‘The remaining partition issues which include
confirmation of the partition sale, distribution of
Proceeds, attorneys" fees and costs, and commissioner's f
Ene expenses related thereto will be left for decision by

[Judge McKenna} .
i au fle saaiti

 

   

Hickenna, end any hearing on the partition issues wilt De
Jett to the discretion of Judge Nekenna

‘The Tight to appeal Judge MeKenna’e decision with
regard to the partition igsue is not waived by this
agreement.

 

(Emphasis added.) The parties also agreed, inter alia, that
Black ‘will promptly pay to the Andersons $3,000 cash” and that
Black will also “transfer to the Andersons 644 shares of American

Real Estate Partners, Limited Partnership,” which the Andersons

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understood to be all of the shares of that partnership held by
the John A. Black Trust.
6. Resolution of the Remaining Partition Issues
The next day, on August 13, 2002, the circuit court
entered an order lifting the stay and ruled on the issues of
attorneys’ fees and costs and the conmissioner’s fees and
expenses (the Fee Order). The Fee Order stated:

‘The court has carefully reviewed the record on file
and the applicable law, and hae considered the equities of
the situation. Sased cn the totality of the circumstances,
the court sees no reason to deviate from the standard rule
Unger HRS §"660"17 [(1983), quoted infra) ‘and case Law in
this jurisdiction, that calle for fees and cote to De
apportioned based on proportionate interests. Zhe court
therefore finds and concludes that the parties are
Fesponsible for the following fees and coats in proportion
to their respective percentage interests.

 

 

 

 

Thus, inasmuch as Slack held a five-sixth interest in the
Properties, Black had to pay five-sixth of the total attorneys’
fees, costs, and commissioner's costs awarded in the instant
partition action. The Andersons, who held the renaining one-
sixth interest in the Properties, were liable for one-sixth of
the aforenentioned fees and costs in the partition action.

Specifically, Black was responsible for $111,987.11, and the

 

Andersons were responsible for $22,397.42.

 

The circuit court avarded Black 952,132.60 in attorneys’ fees and
$4,732.45 in Coste, for a total of $56,865.05. The clreuit coure awarded the
Andersons $67,787.33 in attorneys’ feee and $2,050.39 In costa, for a total of
369,037.72. And, ‘the circuit court awarded the conmisioner §7,601.96, Thus,
the total amount of attorneys’ fees, costs, and commissioner's fees and costs
awarded was 8134, 364.5)

 

on September 17, 2002, a stipulation and order amending the Pee Order
was enteres: Therein, the Honer's fees and costs wae amended to
7981.76. The stipulation noted that Black shall pay $7,486.80 to the
foner, and the Andersons shall pay $1,496.96 t6 the coumiesioner.

   

   

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*** NOT FOR PUBLICATION ***

Also on August 13, 2002, the circuit court entered its

written order confirming the reeults of the 7/11/02 Auction with
the winning bid of $680,000 for Black. specifically, the circuit
court ordered that the sale of the Properties to Black is
confirmed “upon payment through escrow of one-sixth (1/éth) of

$880,000.00, and his share of the [clommiasioner’s fees and

 

expenses, and attorneys’ fees and costs approved by the Court.”

7. Black’

 

Motion for Reconsideration

on August 23, 2002, Black filed a motion for
reconsideration of the Fee Order (motion for reconsideration) .
Therein, Black stated two grounds for the motion for

reconsiderat ior

 

(2) the Fee order “inequitably awards the
Andersons’ attorney fees through July 1, 2002, but awards Black's
attorneys fees through only through [sic] June 6, 2002; and (2)

“the parties had agreed that Judge MeKenna would rule on the

issues in the partition action only because the trust issues were

 

settled." Specifically, with reepect to the second ground, Black
argued that the attorneys’ fees and coate relating to the Trust
Claims were included in the August 12, 2002 settlement agreenent
before Judge Hirai, and, thus, the attorneys’ fees and costs
relating to the Trust Claims should not have been included in the
Fee order.

on September 30, 2002, the circuit court denied the
motion for reconsideration. Therein, the circuit court stated in

relevant part:

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*** NOTFOR PUBLICATION ***

‘The court has reviewed the subject motion, the various
related submissions, the record on file and the applicable
aw, and has again coneidered the equities of the eituation.
‘The' court informed counsel at the September 16, 2002 hearing
that the court had decided the prior motion without
specifically considering a separation of fees and costs
Based on particion and erust ieaues.” Upon reviewing the
Submissions and the lav, however, the court realizes that
both sides included fees that may have been related to trust
Seeues in their prior regueste. More importantly,
considering the nature of the cage, the court realizes that
Stile extremely ditticult to distingulen between *partition*
and “trust” fees, because the issues are actually
Uneertwined under the circumstances of thie case. In
addition, the court notes that, in this case the trustee
ines, Black] only requested a partial partition, which, in
effect, forced the [Andersons] to request partition of the
Fenaining parcels, Accordingly, it is not surprising that
the [Andersons'| feeu would have exceeded. (Black’o) £
Moreover, in deciding fees and costs under the partition
statute, ‘the court is allowed to consider the equities of
the situation, Based on the totality of circumstances of
this case, and the equities of the situation, the court
‘and costs

 

 

 

  

 

 

 

 

 

 

8. The Motions for Breach of Settlement Agreement
on October 25, 2002, the Andersons filed a ‘Notion to
Renedy Breach of Settlement Agreement.” Therein, the Andersons
argued that Black breached the settlement agreement by filing the
motion for reconsideration inasmuch as the settlenent agreenent
expressly prohibite both parties from filing ‘additional papers

with respect to the partition issues unless ordered by Judge

 

MeKenna.* The Andersons also argued that Black failed to
transfer 644 units of Anerican Real Estate Partners, U.P. to the
Andersone as required under the settlement agreement.

on Novenber 1, 2002, Black filed a “Motion for an Award
of Damages for Breach of Settlement Agreement. Therein, Black

argued that the Andereons breached the settlement agreement by

 

continuing to seek an award of attorneys’ fees and costs relating
to the Trust Claims. stated differently, Black contended that

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** NOTFOR PUBLICATION ***

SS

the Andersons “sought double recovery of amounts already paid in
settlement.

After a hearing on both parties’ motions, the trial
court denied: (1) Black’s motion on November 18, 2002; and
(2) the Andersons’ motion on Novenber 27, 2002.

9. Judgment and Appeal

On Decenber 13, 2002, final judgment was entered in
favor of the Andersons. Black, however, had earlier filed a
notice of appeal on October 30, 2002. On March 5, 2003, thie
court dismissed the appeal for lack of appellate jurisdiction
inasmuch as the appeal was premature. Black ¥. Pollack, No.
25438.

On March 19, 2003, the circuit court entered an anended
judgment. in favor of the Andersons. Black timely appealed on

March 25, 2003, and the Andersons cro

 

appealed on April 17,
2003.
TI, STANDARDS OF REVIEW

A. Motion for summary Judament

“Thies court reviews a circuit court’s grant or denial
of summary judgment de novo.” Price v, AIG Hawai'i Ins. Co., 107
Hawai's 106, 110, 112 P.3d 1, § (2005) (citation omitted). The
standard for granting a motion for summary judgment is well
settled:

[Slusmary judgment {e appropriate if the pleadings,
Gepositions, answers to interrogatories

file, together with the affidavite, if any,
is no gensine 4

noving party is,

   
 

 

 
*** NOTFOR PUBLICATION ***

 

fact is material if proof of that fact vould have the effect
of establishing or refuting one of the et

f@ cause of action or defense asserted by the parties
evidence mst be viewed in the light most favorable to the
on-moving party. in other words, ve mist view ali of the
evidence and the inferences drawn’ therefrom in the light
ost. favorable to the party opposing the motion.

     

 

Id, (citation omitted) (brackets in original) .
B. Confirmation of Partition sale

“(T]he circuit court’s authority to confirm a judicial
sale is a matter of equitable discretion.” Sugarman v. Kapu, 104
Hawai'i 129, 124, 85 P.3d 644, 649 (2004) (internal quotation
marks and citation omitted). Ae such, [t]he discretion of the

court in a partition action . . . will not be disturbed unle:

 

there is a clear finding of abuse." Id, (citation omitted). An
abuse of discretion occurs where the circuit 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." Brice, 107 Hawai'i at 110, 111 P.3d at 5 (citation
omitted) .
C. Evidentsary Rulings

A circuit court’s ruling with respect to the
admissibility of settlement offers under Hawai'i Rules of
Evidence (HRS) Rule 408 (1993), quoted infra, is reviewed under
the right/wrong standard. Best Place, Inc. v. o. c0.,
82 Hawai'i 120, 236-37, 920 P.24 334, 350-52 (1996).
D. Constitutional Law

This court reviews questions of constitutional law de

hovo under the right/wrong standard. Janra Enter., Inc, v. City

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County of Honolulu, 107 Hawai'i 314, 319, 113 P.3d 190, 195
(2005).
E. Motion for Attorneys’ Fees and Costs

This court reviews the circuit court's grant or denial
of attorneys’ fees and costs under the abuse of discretion
standard. Price, 107 Hawai'i at 110, 111 P.3d at 5.

TIT. DISCUSSION

A. Black‘s Motion for Summary Judonent on the Truat Claime

Black contends that the circuit court erred in denying
his motion for summary judgment on the Trust Claims because (1)
the Trust Claims were wrongly brought against Black in his
individual capacity rather than his fiduciary capacity and (2)
the civil division of the circuit court lacked jurisdiction and
venue to hear the Trust Claims. The Andersons contend that,

the Trust Claime were settled, Black’

 

inasmuch challenge of

 

the circuit court’s order denying his motion for summary judgment
on the Trust Claims is moot.
‘This court has previously stated that
[elhe duty of (the supreme court), as of every other
judicial tribunal, is to decide actual controversies by a
Judgment whieh can be carried into effect, and not to give
opinions upon neot questions or abstract propositions, or to

Geclare principles or rules of law which cannot affect the
matter in issue in the case before it.

AIG Hawai'i Ina. Co. v. Bateman, @2 Hawai'i 453, 459, 923 P.2d
395, 401 (1996) (citation omitted) (brackets in original).

 

 

 

Therefore, “merely abstract or moot questions will not be

determined on appeal and feigned or fictitious appeals ought not

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to be tolerated.’ Id. (internal quotation marke, brackets, and
citation omitted) .

In the instant case, Black concedes that “the Trust
Claims were settled and are not directly contested in this
appeal." Indeed, on December 4, 2002, the parties filed a
stipulation for dismissal of the Trust Claims with prejudice
inasmuch as the parties had reached a settlement agreement
regarding the Trust Claims. Thus, Black's challenge of the
circuit court’s order denying his motion for summary judgment on
the Trust Claims is, in fact, moot. See AIG Hawai'i Ing. Co., 82
Hawai'i at 459, 923 P.2d at 401 (noting that, if the settlement
between the parties appeared on the record or had counsel for the
parties disclosed the settlement to thie court, thie court likely
would have dismissed the appeal as moot). Accordingly, we
dismiss that portion of Black's appeal challenging the circuit
court’s denial of his motion for sunmary judgment on the Trust
Claims as moot.
B.  Confixmation of the Partition Sale

1. Reopening Bidding After the 5/20/02 Auction

Black contends that the circuit court abused ite
discretion by reopening the bidding inasmuch as the circuit court
failed to recognize that Black’s high bids at the 5/20/02 Auction
“were more than adequate and do not shock the conscience[.]*
Black argues that the circuit court “disregard{ed) the principle

of Hawai'i law that a judicial sale should be confirmed unless

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the price obtained is grossly inadequate." Black also maintains
that the circuit court abused its discretion by allowing
overbidding for the purpose of giving Jackson ancther bidding
opportunity.

‘The Andersons contend that Black is estopped from
challenging the confirmation process because he has already taken
the benefit of the partition sale, that is, by having the
Properties conveyed to him. In support of their argument, the
Andersons cite to §. Utsunomiva Enterprises, Inc, v, Moomiku
Country Club, 75 Haw. 480, 866 P.2d 951 (1994), for the
Proposition that, *[a]s a general rule, voluntary acceptance of
the benefit of a judgment or order is a bar to the prosecution of
an appeal therefrom." Id. at 495, 866 P.2d at 960 (citations
omitted), Moreover, the Andersons argue that, even if Black is

the

 

not estopped from challenging the confirmation proce
circuit court properly exercised ite “equitable discretion” in
allowing overbidding under the circumstances of this case.

In response to the Andersone’ estoppel argument, Black
contends that, under §, Utsunomiva, “the general rule does not
apply where the outcome of the appeal would not have an effect on
the appellant's right to the benefit accepted.” (Bold emphasis
omitted.) Id. at 496, 855 P.2d at 960, Here, inasmuch as Black
only disputes the sale price of the Properties, Black argues that
“{elhe outcone of thie appeal has no effect on [his] rights to

own the . . . Properties.”

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In S. Uteunomiva, this court stated that, “lale a
general rule, voluntary acceptance of the benefit of a judgment
or order is a bar to the prosecution of an appeal therefrom.” 75
Haw. at 495, 866 P.2d at 960. The rationale supporting such a
rule ‘is that by accepting the benefit of or acquiescing in a
judgment or order, or by otherwise taking a position inconsistent
with the right of appeal therefrom, a party ie deemed to have
impliedly waived his or her right to have such judgment or order
reviewed by an appellate court.” Id. at 495-96, 866 P.2d at 960
(citations omitted). However, this court then stated that,

neral rule does not apply where the ovtcone of the
could have no effect on the appellant's right to the
benefit accepted. “thus, no waiver of appeal is implied in

cases in which the appellant is concededly entitled to
cepted benefit; in other words, 2 party may appeal
fron a distinct portion of a severable and independent
judgnent or order while accepting the benefit of the
unaffected remaining pare.

 

    

 

Id. at 496, 866 P.2d at 960 (citations omitted).
In this case, the parties agree that Black's right to
own the Properties constitutes the “benefit accepted by Black
inasmuch as no one disputes that Black is entitled to ownership
of the Properties. On the other hand, the instant dispute on
appeal is essentially whether the 5/20/02 Auction high bid of
$553,601 or the 7/11/02 Auction high bid of $860,000 should be
confirmed. in other words, the dispute centers on the sale price
of the Properties. Thasmich as the outcome of the appeal would
have no effect on Black's right to the benefit accepted, i.e.,

Black's right to own the Properties, no waiver of appeal ie

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implied in the instant case. Accordingly, we hold that Black is
not estopped from challenging the confirmation process.
Consequently, we next address whether the circuit court abused
ite discretion by reopening the bidding after the 5/20/02
Auction.

This court recently addressed the parameters of the
circuit court's discretion regarding the reopening of bidding
after a public auction but before confirmation of the public
auction bid in Sugarman v, Kap, 104 Hawai'i 119, 85 P.3d 644
(2004). In Sugaxman, this court held that, when read in pari

 

materia, Hawai'i Revised Statutes (HRS) §§ 668-2 (1993)? and

668-14 (1993), relating to the partition of real property, vest

4 URS § 68-1 provides:

Actions for partition. hen to or more persons hold
or are in possession of real property as joint tenants or as
Eenants in common, in which one or more of them have an

estate in fee, or a life estat

ttore of such persons may bring
Court of the circuit in which the property oF

     
 
  
   
 
 

  

According to the respective rights of the parti
therein, and for a ale of the same or a part the
appears that a partition cannot be made without 9
prejudice to the omers. The several circuit courts shall
have power, in any action for partition, to proceed
according to the usual practice of courts of equity in cases
of partition, and according to this chapter in enlargenest
thereat

 

(Bold emphasis in original.)

Y WRS 5 668-16 provides

 

jales; auction, notice. All sales of any property in

partition shall be mide at public auction, after publication

SE notice with a brief description of the property to be

S014, in at least one newspaper published in the state and

having 2 general circulation in each circuit within which

the property ie situated, at least once in each of four

Successive weeks, the first publication to be not less than

thirty days prior to the date of sale, The notice otherwise
(continued...)

 

   

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the circuit court with equitable discretion in judicial sales of
such property to reopen bidding after a public auction but before
confirmation of the public auction bid. Id. at 122, 65 P.3d at
647. In discussing the circuit court’s equitable discretion,

this court stated:

[nbeent arbitrary action, the court has broad discretion
regarding confirmation of judicial sales. Rupe v..
Oldenburg, 184 Neb. 228, 166 N.w.24 417, 420 (Neb- 1969).
In exercising ite discretion, the “court should act in the
Anterest of fairness and prudence, and with a just regard to
the rights of all concerned and the stability of Judicial
gales." Brent, 7 Haw. App. at 45, 741 P.2d at 726 (quoting
iv. Kane), 4 Faw. App. (533,540), 670 .24 (36, 40
(asei)},- The discretion of the court’ ina partition action

Ghen, Will not be disturbed unless there is s clear finging
of abuse. Id,

 

 

 

104 Hawai'i at 124, 85 P.3d at 649 (bold emphasis added).

 

Sugarman also outlined four “considerations” to keep in mind when

dealing with reopening bidding after a public auction:

 

2) Im deating with the problem of a conflict between th
Court's obligation £0 nsintain the aeability ana purpose of
the judicial sale and ite duty to obtain the highe:

potsible price..." a certain amount of judicial discretion
is necessarily vested in the court to shiel

justice under all circumstance:

Public auction is not vested with any interest in the land
Uneii the sale haw been confirmed by the court) 3) a bia
Sdvancing the purchase price and made before confirmation of
the auction sale, which ie not merely fominal but ie
Substantial and ateria, may form the basie for the proper
exercise of judicial discretion in directing « resale oF
Feopening the bidding; and 4) in effect, the commissioners
Left the auction open for more bide to be made up to the
confirmation hearing and, in essence, the cireuit court,
nerely kept the auction going(-)

 

 

 

  

 

 

 

 

(continued)
‘shall be in accordance with the direction or order of the
Court. "All sales shall be subject to the approval of ana
Confirmation by the court, and shall be promptly and fully:
Feported by the comissioners to the court.

(Bold emphasis in original.)
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*** NOTFOR PUBLICATION ***

Id. at 125, 85 P.3d at 650 (internal quotation marks, brackets,
and citations omitted) (ellipses points in original).

In the instant case, the stability and purpose of the
judicial sale at the 5/20/02 Auction was not appreciably
disturbed by allowing the reopening of bidding inasmuch as Black
was not vested with any interest in the Properties until the sale
had been confirmed by the circuit court. Although the Notice did
not inform bidders the sale was subject to confirmation, HRS
§ 668-14 makes clear that *[a]11 sales shall be subject to the
approval of and confirmation by the court {.]* (Emphasis added.)

In addition, reopening the bidding ensured fairne:

 

to.

ues, the

 

the minority owners involved in the instant cai

ixthe

 

Andersons. As previously stated, Black had a five
interest in the Properties, and the Andersons had only a one-

sixth interest in the Properties. Inasmuch partition suit

 

often involves the sale of interests of minors in the real
estatel,] . . . the court, asa reault, ia duty bound to protect
[the interests of those minors] by securing the highest possible
price for the property.” Sugarman, 104 Hawai'i at 125-26, 65
P.34 at 650-51 (quoting Rupe, 166 N.W.24 at 420) (footnote and
Anternal quotation marks omitted) (some brackets in original) .*

Thus, the circuit court was “duty bound’ to protect the minority

 
 

™ guaarman notes that *[4]t appears from the context of
fupe] that the court [in Rupe) uses the term ‘minors’ in re!
‘ainority intereste

Gs pad at 652 a4.

 
  

 

   
*** NOT FOR PUBLICATION ***

 

interests of the Andersons by securing the highest possible price
for the Properties

Counseling against the reopening of bidding was
Jackson's advance purchase bid, which was not “substantial and
material’ inasmich as he indicated in hie affidavit that he was
willing to bid five percent higher than Black's high bid at the

5/20/02 Auction on only six of the seven lots collectively. see

 

Sugarman, 104 Hawai'i at 125, 85 P.3d at 650 (indicating that an

advance bid fifty percent higher than the original bid is

 

substantial and material); Brent, 7 Haw. App. at 46, 741 P.2d at
726 (determining that an advance bid in excess of the original
bid by eleven percent is substantial and material). However, the
lack of a substantial and material advance bid does not preclude
the circuit court's exercise of judicial discretion in directing
resale or reopening the bidding as long as there are other bases
in counseling the reopening of the bidding. The existence of a
substantial and material advance bid that appreciably exceeds the
highest public auction bid merely makes it “more likely" for the
circuit court "to exercise its discretion to reject the result of
the auction.” Brent, 7 Haw. App. at 46, 741 P.2d at 726
(emphasis added) (citation omitted). Here, at the confirmation
hearing held on June 7, 2002, the circuit court appeared to take
into consideration the fact that Black’s December 1999 appraisals
were three years old and, thus, did not accurately indicate the

Properties’ fair market value. Moreover, in just regard to

oe
*** NOTFOR PUBLICATION ***

 

Black's rights, the circuit court also stated that it would not
confirm the new bid unless it was at least five percent higher
than the 5/20/02 Auction bid of $553,601.00. In attempting to
fulfill its “duty to obtain the highest price possible,” the
circuit court, therefore, did not abuse ite discretion in
determining “that it makes sense to allow overbidding in this
case." Thus, in exercising its discretion, the circuit court
acted in the interest of fairness and prudence and with a just
regard to the rights of all concerned.

Finally, whether the 5/20/02 Auction “in effect"
continued into the confirmation hearing “is not determinative of
the proper exercise of the court’s equitable discretion under HRS
§ 668-1." Sugarman, 104 Hawai'i at 126, 85 P.3d at 651.
Moreover, as this court stated in Sucarman, “HRS § 668-14 on ite
face does not prohibit the court from reopening bidding at the
confirmation hearing and accepting further bids. In thie
regard[,] the authority of the court to reopen bidding [iJe not
constrained by the statute.” Id. Accordingly, we hold that the
circuit court did not abuse its discretion by reopening the

bidding after the 5/20/02 Auction.

 

‘The Results of the 6/7/02 Auction
Black next contends that the circuit court abused its
discretion by disregarding the results of the 6/7/02 Auction.
Black argues that “the Andersons disturbed the bidding process |]*

because, “after the bidding on Lot #9 was finished, the

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Andersons’ counsel re-directed the Commissioner's assistant
[i.e., Chessen) to conduct the bidding differently from the

(clourt’s instructions, and the Conmissioner’s assistant followed
the Andersons’ counsel's direction.* The Andersons contend that
the circuit court correctly disregarded the results of the 6/7/02
Auction inasmuch as the results were “inherently contradictory.”

‘The Andersons allege that

 

there was a misunderstanding as to vhs
Auction price would stand if there was no overbid as to a
Particular parcel. Tt was the [circuit] court's
understanding chat the June 7 auction price would control
regardless of the May 20 prices. The Andersons, however,
believed that the nay 20 prices would remain
was no bid over St of the nay 20 prict

‘The bideing was conductes in a manner that wae
contradictory to both understandings

scher the May 20

 

 

 

 

 

 

(Citations to the record omitted.)
‘The following table summarizes the high bids at the

5/20/02 Auction and the 6/7/02 Auction:

 

 

 

 

 

 

 

 

 

Lore ‘5/20/02 HIGH BID | 6/7/02 HIGH BID
as s 451,000 [s 3,000
Lot #20 $ x00 [$22,100
lot #22 sso [$270,100
Lt #14 $ so__|$ 30,001
Lot #10 sa100 [$s _ 100,000
lot #8 $ soo |¢ °
tot #20 $ soo |s °
‘otal $553,601 |$ 423,202

 

 

 

 

 

As previously mentioned, the circuit court atated at the June 7,
2002 confirmation hearing that, “[c]learly if I was going to

allow any overbidding here, it was going to be we/re coing to

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a co e

 

id before.” (Emphasis added.) The circuit court, thus,
essentially concluded that the entire bidding process was to be
re-done and that none of the bidders at the 5/20/02 Auction would
be "stuck" with what they had bid then. In light of the circuit
court's “clear" message, it is curious that no one bid on Lots #8
and #21. On the other hand, the fact that no one had bid on Lots
#8 and #21 appears to indicate that everyone participating at the
6/7/02 Auction, including Black, thought that the high bids from
the 5/20/02 Auction would stand if there was no overbid as to a
particular lot, including the bids on Lots #8 and #21 inasmuch as
no one was willing to pay over $500 for each lot. However, as
the circuit court stated, “nobody was going to be stuck with
whatever they bid before [i,e., at the 5/20/02 Auction] .* Thus,
because the bidding at the 6/7/02 Auction was conducted in a
manner that was contradictory to the circuit court's mandate, the
circuit court did not abuse its discretion in disregarding the
results of the 6/7/02 Auction and thereby ordering the parties to
conduct another auction to conform to the circuit court's
instructions.

3. The June 2002 Appraisals and Ordering the 7/11/02

Auction

 

Black argues that the circuit court abused its
discretion by disregarding the June 2002 appraisals submitted by
him inasmuch as they demonstrated that the high bids at the

5/20/02 Auction were fair and more than adequate. The June 2002

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appraisals indicated that the Properties’ appraised value was
$410,000, and, thus, Black maintains that his $553,601 high bid
fat the 5/20/02 Auction should have been confirmed. Black
essentially contends that, by disregarding the June 2002
appraisals, the circuit court abused its discretion in ordering
the 7/11/02 auction.

As previously stated, the circuit court “has broad
discretion regarding confirmation of judicial sales." Sugarman,
104 Hawai'i at 124, 85 P.3d at 649 (citation omitted). Thus, the
discretion of the circuit court in a partition action “will not

Id

 

be disturbed unless there is a clear finding of abuse.
(citation omitted) .

Here, this court has already concluded that the circuit
court did not abuse it discretion by (1) reopening the bidding
after the 5/20/02 Auction, see supra Part TIT.B.1, and
(2) reopening the bidding after the 6/7/02 Auction, see supra
Part III.8.2. Because the circuit court is vested with broad
discretion regarding confirmation of judicial sales, it cannot be
concluded that the circuit court “clearly exceeded the bounds of
reason or disregarded rules or principles of law or practice to
the substantial detriment of a party litigant’ when it refused to
place controlling weight on the June 2002 appraieale eubmitted by
Black. Accordingly, we conclude that the circuit court acted

within its discretion when it di

 

garded the June 2002

appraisals and reopened the bidding at the 7/11/02 Auction.

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|. The Settlement offer
Black contends that, at the July 11, 2002 hearing, the
circuit court violated HRE Rule 408 by wrongly considering his
prior settlenent offer in its decision to reopen the bidding.
The Andersons counter that the circuit court “was clearly asking
about a third party offer" and not about any prior offers made by
Black. Moreover, the Andersons contend that the circuit court
id not appear to have utilized Black's alleged settlement offer

in ordering reopening of the bidding.

 

HRE Rule 408 provides in relevant part

 

Evidence of (1) furnishing or offering or promieing to
furnish, er (2) accepting or offering or promising to
Accept, ‘a valuable consideration in compromising or
attempting to compronise a claim which was disputed ag to
Gither validity or snount, or (3) mediation or attempts to
Sediate a claim shich was disputed, se not adm
Prove liability for or invalidity of the claim
Evidence of conduct or etatenents made in compromise
ions oF mediation proceedings 1s likewise nor

   

 

     

 

In the instant case, it is clear that the circuit court
did not consider Black's prior offers to purchase the Andersons’
interest in the Properties at the July 11, 2002 hearing.
Although the circuit court stated that it thought “that at least
some point there had been at least one offer totalling [sic]
around a million dollars” to purchase the Properties, it believed
that a third party, not Black, had made such an offer. Moreover,
the circuit court subsequently stated that it would allow
reopening of the bidding “in an effort to try to obtain the best
price possible,” and not because of any settlement offers made by

Black prior to the filing of the instant partition action. The

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circuit court, therefore, ultimately did not consider any
settlement offer in deciding to reopen the bidding. Accordingly,
we hold that the circuit court did not violate HRE Rule 408.
5. The Results of the 7/11/02 Auction
Black argues that the circuit court abused its

discretion by confirming his high bids submitted during the
7/11/02 Auction. Specifically, Black asserte that conducting the
7/21/02 Auction was “grossly unfair* to him inasmuch as he had
already submitted the highest bids at the 5/20/02 Auction and the

6/7/02 Auction. Black also contends that the three bids

 

ham bid

 

submitted by Stephen during the 7/11/02 Auction were

inasmuch as Stephen did not have sufficient funds to purchase the

 

lots that he had bid on. The Andersons argue that the circuit
court correctly confirmed the results of the 7/11/02 Auction.
Moreover, the Andersons contend that, inasmuch as Black failed to
raise his objection regarding Stephen‘e “shan” bids at the
circuit court level, Black's objection is barred on appeal.

Ae previously discussed, “a successful bidder at a
public auction is not vested with any interest in the land until
the sale has been confirmed by the [circuit] court {.]* Sugarman,
104 Hawai'i at 125, 85 P.3d at 650 (internal quotation marks,
brackets, and citation omitted). Consequently, although Black
was the successful bidder at both the 5/20/02 Auction and the
6/7/02 Auction, he was not vested with any interest in the

Properties because the circuit court never confirmed either sale.

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SSS

‘Thus, Black's argunent that conducting the 7/11/02 Auction was
“grossly unfair* to him is without merit.

Moreover, inasmuch as Black failed to raise his
objection regarding Stephen’s “sham’ bids at the circuit court
level, Black's objection is barred on appeal. See Brice, 107
Hawai'i at 111, 111 P.3d at 6 (stating that “[t]he rule in this
jurisdiction . . . prohibits an appellant from complaining for
the first time on appeal of error to which he has acquiesced or
to which he failed to cbject") (internal quotation marke and
citations omitted) (ellipses points in original); HRS § 641-2
(2993) (“The supreme court . . . need not consider a point which
was not presented in the trial court in an appropriate manner.) .
After Pietsch reported the results of the 7/11/02 Auction to the
circuit court, the circuit court stated ite inclination that it
would confirm Black's bid of $880,000. The circuit court then

state

 

“Other than the objections you have already stated, Ms

Yee, [ise., Black’s counsel], do you have any objections to the

 

Court confirming this [ice., the results of the 7/21/02
Auction] ?* Black's counse! subsequently responded that she did
not have any objections, A review of the record indicates that
Black's earlier objections did not include an objection regarding
Stephen’s bids as being “sham bids,” and, thus, Black is barred
from raising such an objection on appeal. Accordingly, we hold
that the circuit court did not abuse ite discretion by confirming

the results of the 7/11/02 Auction.

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Due Process
Black alleges that the 6/7/02 Auction and the 7/11/02
Auction violated his due process rights inasmuch as “the finality
to the bidding process should have been the [5/20/02] Auction.
‘The Andersons contend that Black has not met his burden of
demonstrating that his due process rights were violated inasmuch
as he “does not allege a deprivation of notice or opportunity to
be heard as needed to sustain a procedural due process claim” nor

does he “allege an impingement of a fundamental right guaranteed

 

by the Constitution as would support a substantive due proce:
challenge.

This court has previously stated that [t]he basic
elements of procedural due process of law require notice and an
opportunity to be heard at a meaningful time and in a meaningful
manner before governmental deprivation of a significant property
interest.” KNG Corp, v. Kim, 107 Hawai'i 73, @0, 110 P.34 397,
404 (2005) (internal quotation marks and citation omitted). In
addition, *{elubstantive due process has been defined as that
which protects those fundamental righte and liberties which are

+ Amplicit in the concept of ordered liberty.” Ek v. Boags,
202 Hawai'i 289, 297, 75 P.3d 1180, 1286 (2003) (internal
quotation marks, brackets, and citation omitted) (ellipses points
in original) .
Im this case, Black has not alleged that the circuit

court deprived him of notice or of an opportunity to be heard as

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needed to sustain a procedural due process claim. Nor has Black
raised the argument that his purported right to have the results
of the 5/20/02 Auction confirmed is a fundamental right protected
by substantive due process. we, therefore, need not address the
contention that Black’s due process rights were violated.
Accordingly, we hold that the circuit court did not violate
Black's due process rights.

©. Attornevs' Fees and Costs Awarded in the Fee Order

The

 

ie for the Award of Fees and Costs

   

Black contends that the circuit court abused its

discretion by determining that the Andersons should be awarded

 

attorneys’ fees and costs inasmuch

 

(2) Black did not benefit
from the services of the Andersons’ counsel and (2) the equities

of the case demonatrate that Black ehould not be liable for the

 

 

Andersons’ fees and costs. Black also argues that the circuit
court erroneously awarded the Andersons fees and costs relating
to the Trust Claims inasmuch as ERS § 668-17 provides for fees
and costs for only partition-related matters.

The Andersons contend that the circuit court did not
ere in exercising its equitable discretion to apportion fees
according to the parties’ respective ownership intereste in the
Properties. The Andersons argue that the circuit court correctly
awarded them their fees and costs inasmuch as their efforts
increased the selling price of the Properties to the collective

benefit of the owners of the Properties. They also argue that

43-
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they were only awarded fees related to the partition action and
that fees related to the Trust Claims that were so “inextricably
intertwined" with the partition fees that they could not have
been separated.

HRS § 668-17, relating to the award of fees and costs

in partition actions, provides

 

ALL costs of the proceedings in partition el
the plaintiff in the first instance, bue
of the parties in proportion to their inter®
Coste which may be occasioned by contes
sheres or interests, which shall be charged against the
Particular shares or interest involved and be paid at
Getermined by the Feault of the trial of the particular

    

 

stores of th oF for

Soete for nament_by_and between the parties or any of chen.

alLas co the iudge shall seen equitable tn the liaht oF he
i

barties. respectively, when nore than ten defendant are

hnaned if a complaint for partition, no greater payment for
Coste shall be required of the piaineit? than would be
required if there were but ten defendants,

(Bmphasis added.) In Pioneer Mill Co, v. Ward, 34 Haw. 654
(1939) (per curiam), this court analyzed Revised Laws of Hawai'i
(RLH) § 4756 (1935) (predecessor to HRS § 668-17) and stated:

Seid statute, in so far as it relates to the allowance
of attorneys’ feen, Se not mandatory. The judge of the
cireuit court, and likewise ehis court, in passing upon such
motion my disallow such fees of allow then with or
Without apportioning then for payment by the parties to the
Litigation as to his or it shall geen equitable in the 2ight

 

 

of the services performed and the benefits derived therefrom
by the parties respectively. One of the burdens incident £0
‘Smerehip of land as_atenant in common with others ia the
ance thi on Brae be-prose
ne or nore_of the cofenante and oux lecislature has in ite
soe or the reorneva™ at
of the Sarties to euch proceedings and has authorizes the
apportioning of said fees for payment by the partion af £2
fhe iu sees

1d. at @57 (emphasis added). This court then awarded attorneys’

fees that were “apportioned for payment by all of the parties in

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Proportion to their several interests in the property to be
partitioned.* Id, at @58. In so holding, this court stated
that:

The question of what is a proper allovance in matters
of this kind must be decided in the light of the services
perforned and the benefits derived therefrom by the parties
Fespectively. If (2 z

party. cannot be Tequired to bear anv portion of aid
sowentes ves followed[.] fhe court could never “apportion
‘Ehe-sane for conte" aa authorized by the statute (i.e., RLM

maise-
Id. (emphasis added). See also Lalakea v. Laupahochoe Sugar Co.,
38 Haw. 262, 298 (1939) (noting that, *{o]rdinarily, in partition
cases[,] costs are apportioned between the parties according to
their respective interests. . . . The idea is that all parties
to the suit are presumed to be proportionately benefitted by all
of the steps in which coste are incurred").
Likewise, inasmuch as ERS § 668-17 bestows upon the

circuit court discretion to apportion fees and costs according to

the parties’ respective ownership intereste in the partitioned

 

 

Property, the circuit court in the instant case did not abuse its
discretion when it ordered Black to pay five-sixths, and the
Andersons to pay the remaining one-sixth, of the total fees and

costs awarded by the circuit court. Here, it is presumed that
both Black and the Andersons were proportionately benefitted by
the instant partition action inasmuch ae the Properties were

successfully partitioned and sold. Moreover, it appears that the

 

circuit court did indeed consider the equities of the instant

case by awarding more fees and costs to the Andersons inasmuch as

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they requested partition of six of the seven lote comprising the
Properties, whereas Black had requested partition of only one
dot.

Although the circuit court later admitted in its order
denying Black's motion for reconsideration of the Fee Order that
it awarded fees that may have been related to the Trust Clains
to both parties, the circuit court realized that it was
“extrenely difficult" to distinguish between fees related to the
partition aspect of the case and fees related to the Trust
Claims. Indeed, even Slack admitted to having included fees and
costs related to the Trust Claims. Specifically, Black stated
that he “attempted to exclude legal services relating to the
(thrust [C}1aims.* However, Black then stated that his counsel
had included “a few tine entries" related to the Trust Claims.
Thus, where, as here, the trust and partition claims were

the Trust Claims were derived

 

inextricably intertwined beca
from the partition action, it would have been impracticable for
the circuit court to apportion the fees and costs between truet
ues. Cf. Blair v, Ing, 96 Hawai'i 327, 332, 32

P.3d 184, 189 (2001) (noting that, “in awarding attorneys’ fees

and partition 41

 

ina case involving both assumpait and non-

 

umpsit claims, a
court must base its award of fees, if practicable, on an

apportionment of the fees claimed between assumpait and non-

 

assumpsit claims’ (fmphasis in original.) (Citation omitted.)).

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2. The Amount of the Fees and Costs Awarded

 

Black argues that the circuit court abused its
discretion by applying different cut-off dates in awarding fees
and costs to each party. Specifically, Black claims that the
circuit court awarded him his requested fees and costs through
June 6, 2002 but awarded the Andersons their requested fees and
costs through July 2, 2002. Thus, Black contends that the
circuit court “neglected several of [his] requests for fees and
costs." The Andersons argue that “Black's efforts between June 6
and July 1 added nothing to the partition price of the
Properties.”

Similarly, the Andersons contend on cross-appeal that
the circuit court ‘erred by arbitrarily and prematurely cutting

off [their] attorneys’ fees and coste award as of July 1, 2002,

 

without explanation or consideration of the partition £

incurred through July 28, 2002." Black claime that “[t]here

 

no legal basis for any award of fees to the Andersons, including
the additional fees that the Andersons are requesting in thie

for the period from July 1 through July

 

appeall,]*" ise., the £4
18, 2002. Moreover, Black argues that, based on “public policy

reasons,” the Andersons should not receive any fees and costs

 

because they did not accept Black’s offers to purchase their
interest in the Properties prior to the filing of the instant

partition action.

-47-
*** NOTFORPUBLICATION ***

 

‘The following table summarizes the fee and cost

requests made by both parties:

 

 

 

 

FEES & costs BLACK. THE ANDERSONS
REQUESTED

a2 asiaz te |= $60,781.26 (through

“Andersons Request for 6/3/02)

Fees and Costs and Eat,

respectively

616/02: atidave of Gary | $56,865.05 (through | —

Grimmer Re: Fees and” | 6/6/02)

Costs Awardable to Back

LIS: The Andersons’ | = $9,056.46 (from

Supplemental Request 6/3/02 through

piemenal Rea 7/1/02) [(Qotaling

$69,837.72)]

 

‘211402: Afidavit of ames | $14,499.34 (from 6/4/02 |
‘Suarshak Re: Additional | through 7/9/02)
Fees and Costs Awardable
to Black

‘142102: Black's Motion for | $3,553.42 (from 7/8/02 | —-
Fees Award through 7/12/02)
‘yasi02 8 7125/02: Tre | $11,654.47 (fom 7/3/02
‘Andersons’ Memo on Issue ‘through 7/18/02)

(of Fees and Errata,
respectively

TOTAL FEES acosts | $73,966.04 $81,492.19
REQUESTE!

 

 

 

 

 

 

 

 

 

Ae previously noted, the circuit court awarded Black $56,865.05
in fees and costs and awarded the Andersons $69,837.72 in fees
and costs in its Fee Order dated August 13, 2002. See supra note
11, As illustrated by the foregoing table, the circuit court
awarded Black his entire fees and costs only up to June 6, 2002,
4

e., $56,865.05. For the Andersons, it appears that the circuit

  

court determined the amount of their award of fees and costs by

adding $60,781.26 (the entire amount requested on June 4 and June

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+ 2002) to $9,056.46 (the entire amount requested on July 3,

 

2002), resulting in a total award of $69,837.72 in fees up to
guly 1, 2002

Generally, judges mst “specify the grounds for awards
of attorneys’ fees and the amounts awarded with respect to each
ground. Without such an explanation, we must vacate and remand
awards for redetermination and/or clarification.” Price, 107
Hawai'i at 113, 111 P.3d at 8 (citations omitted). Here,
although the circuit court relied on HRS § 668-17 as the
statutory basis for its award of fees and costs to the parties,
the circuit court did not provide any explanation for its award
of $56,865.05 to Black and $69,837.72 to the Andersons rather
than $73,966.04 and $81,492.19, as requested by Black and the
Andersons, respectively. Based on a review of the record, it
appears that the circuit court may have simply overlooked Black’s
additional request for fees and costs made on July 11 and 12,

2002 and the Andersons’ additional request for fees and costs

 

made on July 19 and 25, 2002. Absent an explanation as to

 

apparent oversight, this court cannot effectively review wheth
the circuit court abused ite diecretion in awarding attorneys’
fees and costs as it did. Accordingly, we must vacate and remand
the August 13, 2002 award of fees and costs to the circuit court

for redetermination."

 

% ‘The Andersons also contest on cross appeal that the circuit court
erred “in awarding Black costs not enumerated in (HRS) § 607-9."
Speciticat iy. the Andereone allege hat the circuit coure inappropriately,

(eoneinued....)

 

     

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D. Breach of Settlement Agreement

2. Black's Motion for an Award of Damages for Breach
of Settlement Agreement

Black contends that the circuit court erred in denying
his motion for an award of damages for breach of settlement
agreenent because the Andereons breached the settlement agreement
“by opposing [his] motion for reconsideration and seizing an

and

 

opportunity for a double recovery of their attorneys’ fe
costs relating to the Trust Claims.” As a result of the
Andersons’ alleged breach, Black claims that he was damaged in
the sum of $19,618.87. The Andersons argue that, inasmuch as the
issue of attorneys’ fees and costs had already been fully briefed
before the parties entered into the settlement agreement, they
could not have breached an agreement before its existence.

As previously stated, the settlement agreement between
the parties provided that “[n]o party will be allowed to file
additional papers with respect to the partition issues unless
ordered by Judge McKenna." (Emphasis added.) Here, it appears
that the parties’ respective motions requesting attorneys’ fees

and costs were already filed prior to the parties reaching @

 
   
  

nd “messenger fees" inaemch as such

(HRS) § 607-9." However, the circuit
‘the statutory basie for its award of
the Andersons never contested the

the Andersons pr

7-8 ie applicable
we tay disregard thesr contention. Gag Tomas v.Lingla, 108
267, ‘x8 b-34 lie, 1200 (2005) (etating that the court may
Gisregard pointe of error when the appellant fails to present discernibie
fargunents supporting those assignnente of error)

  

   

 

   

 

-50-
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settlement agreement on August 12, 2002. Indeed, Black's motion
cites to attorneys’ fees and costs requests made by the Andersons
Prior to August 12, 2002. Specifically, Black cited to the
following motions: (1) the ‘Andersons’ Response to Black's
Motion for Order Approving Report of Commissioner,” filed June 4.
2002; (2) the "Andersons’ Errata,” filed June 5, 2002; (3) the
“andersons’ Supplemental Memorandum,” filed July 3, 2002; and (4)

the “Andersons’ Memorandum on Issue of Attorneys’ Fees,” filed

 

 

July 19,2002. And, in hie answering brief on cross appeal,
Black unequivocally states that, “(p)rior to the settlement of

the Trust Claims, the parties had already submitted their briefs

 

on the issue of attorneys’ fees and costs.” Thus, it is unclear
how the Andersons breached the settlement agreement inasmuch as
they had already filed their requests for attorneys’ fees and
costs prior to the execution of the settlement agreement.
Moreover, Black presents no discernible argument with respect to
how the Andersons breached the settlement agreement by opposing
his motion for reconsideration. Thus, this court may disregard
such a contention on appeal. See Taomae, 108 Hawai'i at 257, 116
P.3d at 1200. Accordingly, we hold that the circuit court did
not err in denying Black’s motion for breach of settlement
agreement.

2. The Andersons’ Motion to Remedy Breach of
Settlement Agreement

on eros jons contend that the circuit

 

peal, the Ande
court erred in denying their motion to remedy breach of

-s1-
*** NOTFOR PUBLICATION ***

 

settlement agreement inasmuch ae Black filed a motion for
reconsideration of the Fee Order when the settlement agreement
explicitly stated that no ‘additional papers* were to be filed
with respect to the partition issues. As a result of Black's
breach of the settlement agreement, the Andersons claim that they
incurred damages in the form of attorneys’ fees and coats in
‘opposing Black’s motion for reconsideration. Black contends
that, when read as a whole, the settlement agreement “sought a
ruling from Judge McKenna without further briefing from the
parties{] and did not prohibit the filing of the motion for
reconsideration after Judge McKenna had ruled” on the issue of

attorneys’ fees and costs. (Capital letters altered.) stated

 

differently, Black argues that the intention of the settlement
agreement ‘was that Judge McKenna would rule on the attorneys’

fees and costs issue without further briefing from the parties,

 

and the parties could file necessary papers after Judge McKenna
had ruled.” Moreover, Black points out that the Andersons’
understanding of the terms of the settlement agreement “does not
make any sense" inasmuch as the Anderaons themselves filed
partition-related papers after Judge McKenna issued the Fee
order.

‘This court has stated on prior occasions that:

 

contract should be
orginary{,]_ and

Te de fundamental that cerns of
interpreted according to their plaii

 

 
*** NOT FOR PUBLICATION ***

construing a contract, a court's principal objective is to
vertain and effectuate the intention of the parties

feated by the contract in ite entirety. If there
Goubt, the interpretation which most reasonably reflec
intent of the parties mst be chosen. ULiV

Profil Assembly v, Univi.| of Hawaii, 66 Hav. 214,229.
59 P28 720, 724 (1903) {eltations and internal quotation
marks omitted)

Brown v. KFC Nat’] Mamt. Co., 82 Hawai‘i 226, 240, 921 P.2d 146,
160 (2996) (internal quotation marks and brackets omitted) (bold

 

     
 

the

    

emphasis added) .
As previously mentioned, the parties’ settlement
agreenent states in relevant part:
venich Snctude

le, distribution of
‘and comiseioner’s fees

 

confirmation of the partition
Proceeds, attorneys" fees and cost:
and expenses related thereto

 

No party ill be allowed to file additional papers
with respect to the partition Issues unless ordered by Judae
Hckenna, sndany hearing on the partition ‘eeues will De
Tete to the discretion of Judge ekenna.

‘The right to appeal Judge MeKenna’s decision with
regard to the partition iewue ie not waived by this
agreement

(Buphases added.) Although the terms of the settlement agreement
plainly state that neither party will be allowed to file
“additional papers" with respect to the partition issues, it
appears that such an interpretation does not reasonably reflect
the intent of the parties. A more reasonable interpretation, as
reflected by the actions of the parties, is that the parties
essentially agreed that Judge McKenna would rule on the pending
partition-related issues before her without the parties filing
“additional papers” in order to prevent further attorneys’ fees
and costs from being incurred by the parties. Once Judge McKenna

ruled on the pending partition-related issues, it appears that

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both parties were free to file “additional papers" as they deemed
necessary during the renainder of the litigation. Indeed, once
Judge McKenna entered the Fee Order on August 13, 2002, both
parties subsequently filed “additional papers" with respect to
the partition issues. For example, the Andersons filed a "Motion
for Disbursement of Partition Fees and Costs Held by Court
cashier on October 25, 2002. Under a literal reading of the
settlenent agreement, such a notion was an ‘additional paper”
filed with reopect to the partition issues. However, such a
Literal interpretation of the settlenent agreement does not
reasonably reflect the intent of the parties. Thus, the filing
of the motion for reconsideration by Black also did not
constitute a breach of the terns of the settlement agreement.
Accordingly, we hold that the circuit court did not err in

denying the Andersons’ motion for breach of settlement agreement.

 

Black's Motion for Reconsideration
In Light of our holding to vacate and remand the August
13, 2002 award of fees and costs to the circuit court for
redetermination, we need not address Black’s contention that the
circuit court erred in denying his motion for reconsideration of

the Fee Orde:

 

IV. CONCLUSION
Based on the foregoing, we: (1) vacate the award of
attorneys’ fees and costs as determined in the August 13, 2002

order and referred to in the March 19, 2003 amended judgment; (2)

54.
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remand to the circuit court for a redetermination of the proper
amount of fees and costs to the respective parties; and (3)

affirm the March 19, 2003 am

 

nded judgment in all other respects.

DATED: Honolulu, Hawai'i, march 21, 2006.

on the briefs.

Philip J. Leas, stacey GW rn
Kawasaki Djou, and
Chris Kempner’ (of cades Mice rere

Schutte LLP), for defen-
dants/counterclaimants-

appellants

 

James L. starshak,
Gary G. Grimmer, and Yorn Ducig
Allison G. yee (of

Carlsmith Ball LLP),

for plaintiff-counter-

claim defendant -appel lant

cross-appellee

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