Title: UFJ Bank Limited v. Ieda.

State: hawaii

Issuer: Hawaii Supreme Court

Document:

**©* FOR PUBLICATION ***

 

IN THE SUPREME COURT OF THE STATE OF HANAT'I

--= 000

 

 

UPJ BANK LIMITED, a Japan corporation,
Plaintiff-appellant,

OSAMU TEDA and LOTS WAKO, INC., a Hawai'i
corporation, Defendants-Appellees.

 

No. 25549 :

APPEAL FROM THE FIRST CIRCUIT COURT
(CIV. NO. 02-21-1308)

nne:8 HY 8 930 Sok

DECEMBER 8, 2005

 

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

OPINION OF THE COURT BY MOON, C.J.
Plaintiff-appellant UPI Bank Limited (UFJ), a Japanese
bank, filed suit in the Circuit Court of the First Circuit,"
seeking to collect a debt owed by Kabushiki Kaisha Lote Wako
(kxtM), a Japanese company and a non-party to this action. UFJ
sued defendanta-appellees Osami Teda, who personally guaranteed
KKLW’s loan, and Lots Wako, Inc. (LWT) [hereinafter,
collectively, the defendante], a wholly-owned subsidiary of KKLW

that was incorporated in the state of Hawai'i. UFJ apps

 

@ from

‘The Honorable Sabrina §. McKenna wae the presiding judge in this

 

aa
«©* POR PUBLICATION ***

The Decenber 10, 2002 final judgnent entered in favor of the
defendants pursuant to the August 26, 2002 order granting the
defendants’ notion to dismiss and denying UFZ’s motion for
partial munmary judgnent. UFJ also challenges the e+rowit
court's Novenber 19, 2002 order granting the defendants’ motion
for attorneys’ fees

on appeal, UFZ contends that the circuit court erred in
denying ita motion for partial summary judgment and dteniesing
jte verified complaint based upon (a) UFU‘s failure te join GH
das an indiepensable party under Hawai'i Rules of Civil Procedure
(uncp) Rule 19(b) (2002), quoted infxa, and (b) forum nen
conveniena grounds. URI aleo contends that, inssmich ag VP's

complaint was diemiased “without prejudice,” the circuit court

 

erred in awarding attorneys’ fees to the defendants.
For the reasons discussed herein, we hold that:
(2) the civeuit court erred in finding that KKLM is an

the recoré is unclear

 

indispensable party: and, (2) inasmuch
fas to whether an available alternative forum existed for VEY Fo
prosecute its clains against LNZ, we remand thie case for such
determination, Accordingly, we vacate the Decenber 10, 2002
fina) judgnent, including the November 19, 2002 award of
attorneys’ fees, and remand this case to the circuit court for

further proceedings.

 
*** FOR PUBLICATION ***

 

T. BACKGROUND

A. Factual Backoround

Pa is a corporation organized under the laws of Japan,
with its principal place of business in Japan. On March 22,
1991, UFJ* entered into an “Agreement on Banking Transactions"
(the Agreement)? in which it loaned an aggregate principal amount
of approximately 769,700,000 yen to KKLW. According to the
Agreement, KKLW was obligated to, inter alia: (1) repay the
lean; (2) pay damages at the rate of fourteen percent per annum
in the event of a default, pursuant to Article 3(2) of the
Agreement ;* and (3) provide additional security, if demanded by

UFZ, pursuant to Article 4(1) of the Agreement.’

2 URS was formerly known ae Sanwa Bank, Limited, having changed ite
name in January 2002.

> ae should be noted that all of the loan documents entered into
between UFZ and KELW and Teda were translated fron Japanese into English for
purposes of this Litigation

+ Article 3(2) of the Agreenent provides:

Tn the event that (KKLM) fail{s] to perform on any of (its)
Obligations with respect to Sanwa Bank [(UP2)}, [KKH] ‘shall
pay (UPJ) Samages st the rate of 14¥ per annum for any
‘Mnounts due and payable. in euch case, damages shall be
calculated on s per dien based on 2 365-day year,

      

* Article 4(2) of the agreenent provides:

In cases in which reasonable cause necessitates the
preservation of (UPs]'s righte, (KKLW) shall, upon demand,
forthwich furnish to [UFJ] such security or additional
security, or such guarantors or additional guarantors, ae
may be approved by [UPd] -

 
aaE—"—_

a+ FOR PUBLICATION +e

     
 

areicle 14 of the Agreenent

 

 
 
 

fram) aareel®
having
Barwa Bank

aeary to Ustigare 12
ne Nb, court
Bt Othe head office Of
Syoiarench of (FI

     
    
  
   
     

 

 

serior to the execution oF

 

on March 397

ye director of
enw, executed > under

 

the agreement

zo guarantees
present and

Agreement
on september 29, 2009 xan executed @ BrOMSSOEY note in the

face amount of 7¢9,700,000 yer (the NOES)” cme entire balance oF

 

the Note became aue and PAY apie to UAT on ganuazy 30+

miber 20, 2002, KKLW

  

py ite terms, the NOES matured. on SE
apiegedly made & payment of 502,302,236 YER

according to URI, KKM and Tea owed tne curseandind

 

amount of 1/527/532/274 Yes ox approximately $1 992,037.94 U-S.

goo2. uFa also contends that, since

 

gorlars, a8 of APE!

2002, interest hae continued to accrue at & TASS of

 

april 15)

ge, 125 yen per ave OF approximately $2, 704-5° y.s. dollars Per

une agreement. ns of SuLY O

 

gay, as provided 3° article 3(2)

 

002, an aaaitsons 40,634,500 yen altegediy ad acerued, and HE

 

that date was

 

covet amount owed by KI and eda to UPD

 
*** FOR PUBLICATION ***
a

on May 23, 2002, UFZ notified KKLM, Ieda, and LWT that
it was exercising its right of subrogation with respect to an
“vInter-Company Debt,” pursuant to Article 423 of the Japan Civil
code, which provides a right of subrogation,‘ and demanded
payment of UFJ’s loan, According to UFJ, the Inter-Company Debt
was a loan extended by KKLW to LI (of which Ieda is president
and director) in the principal amount of 1,364,109,632 yen. UPJ
had obtained information regarding the inter-company loan from
Kkun’s financial statenents for the fiscal year ending May 31,
2000, the most recent statements available to URJ. In their
answer to the verified complaint, the defendants neither admitted
nor denied the existence of the inter-company loan, stating only
that ‘what ie described in [UFJ’s verified complaint] as ‘Inter-
company Debt’ involved funds that were used to acquire the

sehold interest in an office building located at 345 Queen

 

Street, Honolulu, Hawai'i" (the Queen Street Property). The

defendants also conceded that LWI owns the single-family

«In an affidavit attached to UPS's ax parte motion for prejudgment
writ of attachnent, Bkihito Katayama, an attorney duly Licensed to practice in
Yosin’facteate chat, under Japanese law, the creditor/obligee has a right of
HEogetion in acestdance with Article 423. Specificelly, Xatayana avers
that

 

 

Article 423 (*0bLigee’s eubrogation for protection of an
Obligatory right") provides as follows

(2) order to protect his obligatory right, an obligs
may exercise the Fights belonging to the obligor; however,
Tala shall not apply £0 such Fighte a= are personal to the
obligor.

12) [so long as the obligatory right is not yet due, the
Gbliges may not exereise the Fights referred to in the
Preceding paragraph except by judicial subrogation, however,
Eile shall not apply to an act of preservation,

 

 

 
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residence located at 1610 Ihiloa Loop, Honolulu, Hawa:
Jeda resides. The defendants did not respond to UPJ’s May 23,
2002 demand for payment.

Procedural Backaround
on May 28, 2002, UFJ filed the instant suit in the

 

First Circuit Court against Ieda and WI. UF's verified
complaint contained three clains for relief: (1) Count I sought
recovery directly from Jeda for the amount of KKLW’s purported
indebtedness pursuant to the Guaranty; (2) Count II alleged UFY's
entitlement to additional security from Ieda as guarantor; and
(3) Count 121 asserted a right of subrogation against NI for the
amount of the “Inter-Company Debt” and any other obligations that
LWI may have to KKLW pursuant to Japanese law and its civil code
Simultaneously with its filing of the complaint, UFJ filed an ex
parte notion for prejudgnent writ of attachment, seeking to
attach the Queen Street Property. On June 4, 2002, the circuit
court granted UPJ’s motion without a hearing. The writ of
attachment was issued on June 5, 2002. On June 6, 2002, the
defendants filed an ex parte motion, seeking reconsideration of
the circuit court's order granting UFJ’s motion for writ of
attachment. The circuit court granted the defendants’ motion for

reconsideration on June 13, 2002 and ordered, anong other things,

 

that the writ of attachment against the Queen Street Property be
released. Thereafter, on June 18, 2002, the defendants filed

their anawer to the verified complaint
   

FOR PUBLICATION *

on duly 29, 2002, UPJ filed a motion for partial
summary judgment as to Count I against Teda. UFJ argued that it
was entitled to summary judgnent, as a matter of law, because
there was no genuine dispute as to any material fact that
(2) teda had given a valid Guaranty of KKLW’s obligations to UFZ
and (2) KKLM was now in default on those obligations.

om the same date, July 19, 2002, the defendants filed a
motion to dismiss UPJ's verified complaint, pursuant to, inter
alia, HRCP Rules 12 and 19, quoted infra. The defendants
contended that (1) the mandatory forum selection clause in the
Agreenent, i.e., Article 14, along with the Guaranty’s
xequirement that “the Guarantor shall abide by all of the terms
and conditions contained in [the] Agreement [,]" required
diemissal because any action against Ieda must be taken in Japan
and (2) the alleged right of subrogation against LHI could not be
exercised in the absence of KXLW ae a party pursuant to HRCP Rule
as.

Both motions were set for hearing on August 6, 2002.
At the hearing, the circuit court invited the parties to file
additional memoranda on the issue of choice of law with respect
to the forum selection clause and continued the hearing until
Auguat 19, 2002.

on August 9, 2002, the defendants and UFJ filed their
respective supplenental menoranda pursuant to the court's

instruction. The defendants argued for the first time that the

 
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circuit court should not preside over UFJ’s action under the
doctrine of forum non convenieng. UF countered that the

because they did

 

defendants had waived such affirmative defe:
not assert it in their answer. The defendants, however,
responded that the forum non conveniens defense was merely a
subset of an improper venue defense, which was asserted in the
defendants’ answer to the verified complaint.

After a further hearing on both motions on August 26,
2002, the circuit court entered an order granting the defendants’
motion to dismiss and denying URJ's motion for partial summary
judgment. In its written order, the circuit court stated the
grounds for granting the defendants’ motion to dismiss as

follows:

(2) based on RCP Rule 19(8), under the circumstances of

Including the claine and defenses raised, (RKLX]
So an inglepensabie party without which the court cannot in
Squity and good conscience proceed based on the factors
Smr ized Sa eeia weer sule 15(b)7 and (2) based on forum non
Sonveniens grounds. pursuant co, (Hawai'i Reviced statute:
{ins}] Section 603-29-5. ((2993)"] and the various factor
Gutlined in lesser v. Boughey, @6 Haw(aii] 260, (1 262-
Gal, 965 F-26802, 608-06) (3990).

   

    

The order further stated that “dismissal is, of course, without

   

prejudice to any claims [UFJ] may bring against [the defendants]

after their claims have been reduced to dudgnent in Japan.”

 

ERS $ 603-37.5 provides in relevant part: “(a) The circuit court of
a circuit in which is comenced a civil case laying venue in the wrong circuit
Snell transfer the case, upon or without terns and conditions as the court
iis reper, co any cifeule in whieh st could have been brought, or if it is
{nthe interest of Justice dieniss the case.”

 
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Ee

on September 17, 2002, the defendants moved for an
award of attorneys’ fees, pursuant to HRS § 607-14 (1993)," and

submitted a bill of coste. The defendants, although recognizing

 

that the matter had not been determined “on the merits,” argued

 

that they were entitled to attorneys’ fees and costs because the
determination of a “prevailing party* in an action in assumpsit
does not require ‘a judgment on the merits,” relying upon Blair
vi Ing, 96 Hawai'i 327, 231, 31 P.3d 164, 288 (2001) (stating
that *a defendant who succeeds in obtaining a judgment of
dismissal is a prevailing party for the purpose of fees under HRS
§ 607-14"). UPI objected, contending that an award of attorneys’
fees is premature and inappropriate because the defendants cannot
be considered the “prevailing party” where the dismissal of the
action was expressly ‘without prejudice.”

Rt the October 7, 2002 hearing on the motion, the
circuit court expressed its concern “whether Hawai'i law would
apply or whether it should be Japan law . . . and [that it was]

not sufficiently familiar with Japan law on this issue [regarding

 

+ section 607-14 provides in relevant pert:

Im ali the courts, in all actions in the nature of assumpait
and in ali actions on a promissory note or other contract in
Wricing that provides for an attorney's fee, there shall be
(ixed ae attorneys" fees, to be paid by the losing party and
Eo'be included in the sum for which execution may ienue, @
Eee that the court determines to be reasonable; provided
that the attorney representing the prevailing party shall
submit fo the court an affidavit stating the anount of tine
the attorney spent on the action and the anount of tine the
attorney ie Likely €0 spend to obtain a final written
juagmest, wy Sue" court shall then tax attorneys”
Ieelnunich the Court determines to be reasonable, to be
paid by the losing party; provided that thie snoust shall
Rot exceed twenty-five per cent of the judgment.

 

 

 

 

 

 
 

FOR PUBLICATION ***

 

the award of attorneys’ fees]." The circuit court, therefore,
requested further briefing. Subsequently, on October 14, and
October 21, 2002, the defendants and UFJ filed their respective
supplemental memoranda.

At the second hearing on October 28, 2002, the circuit
court granted the defendants’ motion for attorneys’ fees and
costs “based on the law cited by the [defendants,]" ie., Blair
and HRS § 607-14. The court’s written order, awarding the
defendants attorneys’ fees in the amount of $75,000, was filed on

November 19, 2002. Therein, the court stated:

 

‘The motion is GRANTED to the extent the court
$75,000 as reasonable attorneys’ fees in favor of the
Defendante and ageinst (UPJ]. The motion
extent it requests aeditional attorney’
extent it requeste coste, for which no substant lation wal
provided,

 

      

On December 10, 2002, the circuit court entered final
judgment in favor of the defendants and against UFJ. On December
20, 2002, UFJ filed a timely notice of appeal.’

II. STANDARDS OF REVIEW
A. Motion to Diemiss
1. Forum Non Conveniens

“This court has long recognized that it ie

inappropriate to disturb a [circuit] court’s order granting a

motion to dismiss the complaint on the grounds of forum non

 

+ Since the filing of thie appeal, UPJ hae obtained a judgnent against
Kew from a Japanese court. As @ result, there is now pending in the Piree
Circuit Court a special proceeding, filed pursuant to the provisions of HRS
chapter 658C, the Uniform Foreign soney-Judgnents Recognition Act, with
Feapect to said Sudgnent

 

 

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sonveniens unless the trial judge committed an abuse of

discretion." Lesser, 88 Hawai'i at 262, 965 P.2d at 804 (citing

Territory v. Gay, 32 Haw. 404, 414 (1932); Harbrecht v, Harrison,
38 Haw. 206, 209 (1948)). “The [circuit] court abuses its

discretion if it bases ite ruling on an erroneous view of the law
or on a clearly erroneous assessment of the evidence." Ranger

Ins. Co, v. Hinshaw, 103 Hawai'i 26, 30, 79 P.3d 129, 123 (2003)

(citation omitted). Stated differently, an abuse of discretion
occurs where “the [circuit] court has clearly exceeded the bounds
of reason or has disregarded rules or principles of law or
practice to the substantial detriment of a party litigant.~
Roxas ¥. Marcos, 89 Hawai'i 91, 115, 969 P.2d 1209, 1233 (1998)
(citation omitted) .
2. Failure to Join an Indispensable Party

We review the circuit court’s decision to dismiss for
failure to join an indispensable party for abuse of discretion.
‘Takabuki v, Ching, 67 Haw. S15, 529, 695 P.2d 319, 328 (1985);
yip Lan vy, Abulii, 23 Haw. 307, 312 (1926); gee also Washington
v. Daley, 173 F.3d 1258, 1165 (9th Cir. 1999) ("We review
dismissals pursuant to Rule 19 for an abuse of discretion.
(Citation omitted.)); Walsh v. Centeio, 692 F.2d 1239, 1243 (sth
cir, 1982) (holding that “the determination whether the action
should proceed without the absentee, and therefore, the

determination of indiepensability itself under [HRCP] Rule

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19(b) [‘s federal counterpart], remains in the sound discretion of
the trial judge").

B. Attorneve’ Fees

We review the circuit court’s grant or denial of

attorney's fees under the abuse of discretion standard. Price v.

AIG Hawai'i Ins. Co., Inc., 107 Hawai" 106, 210, 111 P.3d.1, 5,
reconsideration denied, 107 Hawai'i 106, 111 P.3d 2 (2005); Age'n
0 Wailea Elua v. rt Co., 100 Hawai'i

97, 120, 58 P.3d 608, 632 (2002) (citations omitted).
IIT. DISCUSSION

A. Motion to Dismiss

As previously stated, UFZ contends that the circuit
court erroneously dismissed ite claims against the defendants on
the grounds of failure to join an indispensable party and forum
non conveniens. We address each of UFJ’s contentions in turn.

1, Indispensable Party

UFJ argues that KKLW is not a “party to be joined if
feasible’ (or a “necessary" party) pursuant to HRCP Rule 19(a)
because (1) the principal obligor, KKLM, is not an indispensable

sda, of a debt, and

 

party in an action against the guarantor,
(2) @ subrogor [(in this case, KKLW)] is not an indispensable
party te a subrogee’s [(UFJ’s)] action against the subrogor’s

debtor [(LWz)]

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HRCP Rule 19 provides in relevant part

SOINDER OF PERSONS NEEDED FOR JUST ADJUDICATION.

(a) Persone to be joined if feasible. A porcon who is
subject to service of process shall be joined as a party in
the action if (1) in the person's absence complete relict
Cannot be accorded anong those already parties, or (2) the
person claims an interest relating to the subject of the
Retion and is so eituated that the disposition of the action
{nthe pereon'e absence may (A) as a practical matter impair
of impede the person's ability to protect that interest or

Wve any O¢ the persona already parties subject to @
(tial Fisk of incurring double, sultiple, oF otherwise
‘stent obligations by reason of the claimed interest.
{f'the person hap not been so Joined, the coure shall ort
that the person be made a party

 

 

   

 

Dismissal pursuant to HRCP Rule 19 involves a two-part
analysis. See Kescoli v. Babbitt, 101 F.3d 1304, 1309 (9th Cir.
1996) (applying HRCP Rule 19's federal counterpart Rule 19).
Initially, the circuit court must determine whether the absent
party is a “necessary” party and, if 90, “the court shall order

that [the person] be made a party." HRCP Rule 19(a). “Where

 

Joinder is feasible, the court need not proceed under Rule 19(b)

for lack of an

 

to determine whether to proceed or dismis:
indispensable party." Lauv, Bautiata, 61 Haw. 144, 154-55, 598
P.2d 161, 168 (1979). Although the circuit court did not

‘ly make the initial determination that KKuW is a nece

 

expres lary

 

party under HRCP Rule 19(a), we believe that such determination
can be logically inferred from its ultimate ruling that "KKM is
an indispensable party without which the court cannot in equity

and good conscience proceed based on the factors outlined in said

HRCP Rule 19(b) (.)*

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Under HRCP Rule 19(b):

If 4 person as described in gubdivieion (a) (2) -(2)
hereot cannot be made a party, the court shall determine
whether in equity and good conseience the action should
proceed anong the parties before it, or should be disniesed,
Ehe absent person being this regarded as indispeneable, The
factors to be considered by the court include: first, to
what extent a judgment rendered in the person's absence
tight be prejudicial to the person or those already parties;
fecond, the extent to which, by protective provisions in the
Sudgrent, by 0 feliet, oF other meaures, the
prejudice can be lessened or svoided; third, whether
Sudgnent rendered in the person's absence will be adequate;
fourth, whether the plaintiff will have sn adequate renedy
ff the action ie dismiseed for nonjosnder~

 

 

   

Because UFJ based its subrogation action against LWZ
solely on Article 423 of the Civil Code of Japan, our
determination as to whether KKLW is a necessary and indispensable
party to the subrogation claim involves the examination of the
substantive law of Japan. “The court, in determining foreign
law, may consider any relevant material or source, including
testimony, whether or not submitted by a party or admissible
under the Hawai'i Rules of Evidence. The court's deternination
shall be treated as a ruling on a question of law.’ HRCP Rule
44.1 (2002).

Ae previously noted, Article 423 of the Civil Code of

Japan provides:

(2) _Im order to protect his obligatory right, an obliges
may exercise the Fights belonging to the obligor; however,
This shall not apply to euch righte ae are personal to the
obligor.

(2) "80 long as the obligatory right is not yet due, the
obligee may not exercise the Fights referred to in the
Preceding paragraph except by judicial subrogation, however,
Ehis hal? not apply to an act of preservation.

 

 

 

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tn his book regarding the general rules of the Japanese law of

 

obligations, Professor Hiroshi Oda? explains that the concept of
subrogation was imported into the Civil Code of Japan from civit

jaw countries and was based, in part, on the French concept of

 

action subrosatoire. Hiroshi Oda, Japanese Law: General Rules o!

the Law of Obligations, 277-78 (24 ed., Oxford Univ. Press 1999) -
He further states that

{s)n an action subrosatoire, the obligee may exercise &
EUR Aa SERRE, age to the cbligor in order to ensure
igibomence of a monetary obligation by the latter (Art

Pee terreac a). For example, A lent one sillion yen to B and
$22) Pat enent 1s dues By in curs, pad Lent halt a million
SRE E5P2'Tone years ago, but failed to remind 6) since be
YEE $O,C ORE Yoace he Feceived the money from C, he would
wae UNE ply it to A, f does not have any other assets.

have to repey it Shay exercise B's right against C, and thus
prevent preseription:

 

     

 

‘the action subxoaatoire was designed to be # state preceding
Zee gecion eibtne, but today, by substicuticn, the Sane
Ey eeec TTT attachment can be achieved in’ sone cases.
sttece Move exasple, obliges A has two alternative:

 

 

FRAS io°may"eue Band obtain an enforcement judgment
Tirtcae'S,aveach B's right against C, and then demand
Dayent fron C.. Secondly, wubetieate
Siaiepamene-dacect ie tig 6 insia Sadana af che

ie girecty tron the th inthis exaepl
a

(smphaaie added.) According to Katayama’s affidavit, see supra

note 6:

 

‘there have been numerous cases in which Japanese
courte nave Biysorted tne cbligee's exercise of ite right to
Siitogerion. Por example, in The Country of Jananv.,
gubrogatiguprene Court, June 24, 1966 (2) Manama 1979). @
doshine, Sipe country of Japan, bad sales credite from an
Greaitere Gebtor chat was owed capital contributions by its
jnseivetarors, The eresiter exercised its rights of
inereerion with respect to the debtor's right to the
SUubrOgH ehevibutions. The Supreme Court of Japan, based on
crite Gon oe the civil code of Japan, held that @ creditor
AEtiCle tae ee ene right of ene debtor to paynent from s

 

—_—

w firoshi Oda 1s an attorney at law duly Licensed in Japan and =
professor of Japanese Law at the University of London and College 4°Rurope

-1s-
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third party, up to the amount the debtor over co the
creditor. in addition, in Senri Kabus ob.
Geaka Wigh Court, July’ 21, 1999 (Wanreljino 1698-142), the
(Ceska High Court allowed & bankruptcy cresitor to exercise
its subrogation right with respect to the bankrupt debtor
corporation's right to compensation of its damages against
fee directors,

 

Because Japan law permits UFJ to “step into the shoes”
of KKLW and demand payment directly from LWI, it cannot be said
that KKLW is a necessary party inasmuch as complete relief can be
accorded among those already parties to the action, i.e., UFJ,
Jeda, and LWI. Accordingly, we hold that the circuit court
a

 

abused its discretion in dismissing the verified complaint ba

 

upon UFU’s failure to join KKLW as a necessary and indispensable

party in the subrogation action against LWI.
2, Doctrine of Forum Non Conveniens

selying on HRCP Rule 12(h) (1), UFJ argues that the
defendants waived their right to assert forum non conveniens
because they failed to specifically raise it in their answer to
the verified complaint or in their motion to dismiss, as required
by HRCP Rule 12.

HRCP Rule 12(b) provides in pertinent part:

very defense, in law of fact, to a claim for relief in any
nesding
Thereto ‘skcebt that the following
7

Ehereto 42 one ie requifed,
‘notion:

Sefer
ay ibject matter, (2) 1ack
of jurisdiction over the 3) improper venue,
(4) insufficiency of process, (3) ineutficiency of service
ef process, (6) failure to state 2 claim upon which relief
can be granted, (7) failure to join a party under Rule 19.
A otion making any of these defenses shall be made before
Pleading if a further pleading is permitted.

 

 
   

    

 

 

 

(Snphases added.) HRCP Rule 12(h) (1) provides that

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venue, iene, es__oF insult
TA) if omitted from a motion
{Pthe circumstances describea in subdivision (g) [1 or

(B) if it is neither made by motion under this rule [ae
prescribed in #ule 12(b)] nor included in a responsive
Pieading or anendnent thereof permitted by Rule 15(a) to be
ade aa a satter of cour

 

(emphasis added.)

As is evident from an examination of Rule 22(h) (2)
above, “forum non conveniens” ie not one of the specifically
enumerated “defenses” that may be deemed waived for failure to
raise it in a responsive pleading or Rule 12(b) motion.

However, as previously indicated, the defendants

 

 

maintain that forum non conveniens is a subset of an imprope:
venue defense. We, therefore, examine the defendants’
characterization. Generally, the doctrine of forum non
conveniens may only apply in cases where “the court in which the
action was brought has both subject matter and personal
jurisdiction and is a proper venue." 15 C. Wright, A. Miller &
BE. Cooper, Federal Practice and Procedure: Jurisdiction and

ase also Am.

ec ov , 510 U.S. 443, 448-49 (1994) (indicating

 

Related Matters § 3828, at 287 (2d ed. 1986

that, for the doctrine to apply, venue must already be proper) ;

 

Subdivision (g) of Rule 22 provides in relevant part:

If a party makes # notion under this rule but omits
therefrom any defense or objection then available to the
party which this rule permite £0 be raised by motion
pursuant to Rule 12(bi], the party ehall not thereafter
make 2 motion based on the defense or objection so omitted,
except a motion ae provided in subdivision (h) (2) hereof
relating to the defense of failure to state « claim upon
which relief can be granted] on any of the grounds there
seated

 

 

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549 F.2d 597, 616 (9th Cir. 1976), led by et: er
grounds, McGlinchy v, Shell Chem, Co., 845 P.2d a02 (9th cir.

1988) (noting that in applying doctrine of forum non conveniens,
proper venue is assumed). Consequently, forum non conveniens
cannot be said to fall within the scope of the defense of
improper venue. Moreover, as stated supra, forum non conveniens
is not one of the defenses enumerated in Rule 12(h) (1) that may
be deemed waived for failure to raise it in the responsive
pleading or Rule 12(b) motion.*

b. the convenient forum

As previously stated, the circuit court dismissed UFJ’s
complaint based upon, inter alia, “forum non conveniens grounds,
pursuant to. . . the various factors as outlined in Lesser[.1”
UFJ contends that the circuit court abused its discretion by not
enumerating which of the “various factors” it relied upon or how

it applied those factors in reaching its conclusion.

% we note that, in dismissing UPJ's complaint, the circuit court also
relied upon HRS § 603-37.5, which provides the mechanism by which civil cases
“Iaying Venue in the wrong eircuic® can be transferred, oF in the interest of
justice, allows the circust court to dianies the case. See guora note 7.
Although on its face, HRS § 603-37.5 appeare Snapplicable to the present
Situation, UFZ does hot challenge the court's reliance on the subject statute
nd, thus, we need not address it. Havai'i Rules of Appellate Procedure Mule
2e(b) (7). (2002) Age'n of Apartment Owners of Maalaea fai. Inc. v. -Stiliscn,
ios Hawai'i 2, 16, 116 P34 ces, 658 (2005); Bele Defense Fund v, Paty, 72
613, @37 P.2d 3247, 1268 (1992), ‘cart, denied, $07 U3. 916 (1983)
(*rosues not properly raised on appeal wiil be deenea to be waived.”
(citations onitted.)).

 

 

    

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In Lesser, this court described the doctrine of forum

 

before it may be more appropriately tried elsewhere. For

the doctrine to apply, therefore, an alternative forus must
alsermative forum

Lesser, 88 Hawai'i at 262, 965 P.2d at 804 (emphasis added)
see also

 

(citations and internal quotation marke omitted)
Restatement (Second) Conflict of Laws § 64 (1971) (*A state will
not exercise juriediction if it ie a seriously inconvenient forum
for the trial of the action provided that a more appropriate
forum ie available to the plaintiff."). Me, therefore, first

assess whether an adequate alternative forum is available to UPI

 

 

for litigating this action against Ieda and LWI. See Lesa
Hawai'i at 262, 965 P.2d at 804; Piper Aircraft Co. v. Revno, 454
U.S. 235, 254 n.22 (1961), reh’a denied, 455 U.S. 928 (1982).

An alternative forum ordinarily existe when all

 

defendants are amenable to service of process in the foreign
forum. See Lueck v. Sundstrand Corp., 236 F.3d 1137, 1143 (9th
Cir. 2002) (holding that alternative forum was available because
all defendants had indicated that they would be amenable to
service of process in New Zealand); Alpine View Co, Ltd. v. Atlas
Copco AB, 205 F.3d 208, 221 (Sth Cir. 2000) (*A foreign forum is
available when the entire case and all parties can come within
the juriediction of that forum." (Emphasis added.)). A

defendant's agreement to submit to personal jurisdiction of the

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foreign country satisfies thie requirement. Lockman Found. v.
Evangelical Alliance Migsion, 930 F.2d 764, 768 (9th Cir. 2991)
(citation omitted)

In the inetant cage, it is unclear from the record
whether Japan, the proposed alternative forum, has jurisdiction
over all of the defendants. However, with respect to teda, he is
a citizen of Japan as UFJ asserted in its complaint. As the
guarantor of KKLW’s obligations under the Agreement, Teda
specifically consented to the jurisdiction and venue of the
wcourt having jurisdiction in the locale of the head office of*
FU or any of ite branches, Agreement, Art. 14, when he executed
the Guaranty, agreeing to “abide by all of the terms and
conditions contained in said Agreement {.]* Further, at the
hearing on the motion to dismiss, Ieda’s counsel stated that
“(teda} is considered a Hawai'i resident because he spends so

many days a year here, but he spends roughly the same amount of

{time in Japan. We don’t anticipate that they would have any
trouble serving him with process . . . ." (Emphasis added.)

Therefore, because Ieda is anenable to service of process in
Japan, an alternative forum for the dispute existed in Japan.
However, dismissal of UFJ’s complaint based on forum
hon conveniens grounds would be inappropriate if the only other
defendant in thie case, IMT, ie not amenable to suit in Japan.
We cannot determine from the recoré whether Japan could be an

alternative forum for UPJ’s claim against LI. Because that

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determination involve

 

a factual finding that is not contained in
the record before us, we are compelled to hold that the circuit

court abused ite discretion in dismissing UFJ’s complaint on

forum non conveniens grounds.”
B. ee Rem: ntions

In Light of our holding today, we need not address
UFI’s contention that the circuit court erroneously denied its
motion for partial summary judgnent. Our holding today also
dictates that we vacate the Novenber 19, 2002 order granting the
defendants’ motion for attorneys’ fees as premature.
IV. CONCLUSION

Based on the foregoing, we vacate the First Circuit
Court's Decenber 10, 2002 final judgment and the November 19,
2002 award of attorneys’ fees and remand this case to the circuit

court for further proceedings consistent with this opinion.

on the briefs:

Andrew V. Beaman and
Leroy E. Colombe (of Chun,
Kerr, Dodd, Beaman & Wong),
for plaintiff-appellant

Nadine ¥. Ando and Phillip
W. Miyoshi (of McCorriston
Miller Mukai MacKinnon LLP),
for defendants-appellees

 

 

® Although the parties dispute whether the forum selection clause in
Article 14 of the Agreenent ie tundatory or permissive, we need not address
Chis matter because the circuit court aid not rely upen this basis in
@lenieeing UPS's complaint

 

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