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NO. CAAP-18-0000535

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

GREEN ALOHA LTD., a Hawaii Corporation,

Plaintiff-Appellant, 

v.

WINSTON WELBORN; Defendant-Appellee,

and

JOHN DOES 1-10, JANE DOES 1-10, DOE PARTNERSHIPS 1-10; DOE

CORPORATIONS 1-10; DOE ENTITIES 1-10, Defendants

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT

(CASE NO. 1CC171000160)

SUMMARY DISPOSITION ORDER

(By: Ginoza, Chief Judge, Hiraoka and Nakasone, JJ.)

Plaintiff-Appellant Green Aloha Ltd. appeals from the

Final Judgment in favor of Defendant-Appellee Winston Welborn

entered by the Circuit Court of the First Circuit on June 8,

2018.1 For the reasons explained below, we affirm the Judgment.

The Wasabi Lawsuit

This case arose from another lawsuit, Wasabi Design,

Inc. v. Britt, Civ. No. 16-1-0019, Fifth Circuit, Hawai#i (Wasabi

Lawsuit). Welborn was a plaintiff in the Wasabi Lawsuit. That

lawsuit was filed on February 5, 2016. The complaint made the

following allegations: Welborn and Justin Britt were the

1 The Honorable James H. Ashford presided.

Electronically Filed

Intermediate Court of Appeals

CAAP-18-0000535

09-DEC-2021

07:49 AM

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shareholders of Wasabi Design, Inc.; in August 2015, Wasabi

received money from the settlement of another lawsuit it had

filed; and Britt took more than his share of the settlement

funds. The complaint alleged conversion, fraud, unjust

enrichment, breach of fiduciary duty, unlawful distribution,

declaratory judgment, and receivership and dissolution of Wasabi.

The Wasabi Lawsuit complaint was amended on

February 26, 2016. Green Aloha was added as a defendant. The

amended complaint alleged that: Britt formed Green Aloha in 2015

to apply for a Hawai#i medical marijuana dispensary license;

applicants were required to meet certain financial requirements;

Britt took more than his share of Wasabi's settlement and used

the funds to meet the financial requirements of Green Aloha's

license application. The amended complaint sought a constructive

trust over Green Aloha's assets.

By order entered on July 29, 2016, the Fifth Circuit

Court dismissed Wasabi's and Welborn's claim for unjust

enrichment. On August 2, 2016, Wasabi and Welborn filed a second

amended complaint. The second amended complaint made additional

factual allegations and added a count for breach of contract

against Britt.

By order entered on March 15, 2017, the Fifth Circuit

Court dismissed Wasabi's and Welborn's remaining claims against

Green Aloha. By separate order, also entered on March 15, 2017,

the Fifth Circuit Court denied Green Aloha's motion for

attorney's fees and costs without prejudice. The Wasabi Lawsuit

remains pending before the Fifth Circuit Court.2

2 We take judicial notice, pursuant to Rule 201 of the Hawai#i Rules

of Evidence, that as of December 6, 2021, the last document filed in the

Wasabi Lawsuit was a stipulation to continue the hearing on a motion for

appointment of counsel/receiver for Wasabi Design, Inc. until moved on, filed

on November 4, 2019. The remaining claims appear to be Wasabi's and Welborn's

claims against Britt for breach of contract, unlawful distribution, and

receivership and dissolution.

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This Lawsuit

Green Aloha filed this lawsuit against Welborn on

January 27, 2017, in First Circuit Court. Green Aloha's

complaint alleged two counts: (1) abuse of process; and

(2) malicious prosecution.

Welborn responded to Green Aloha's complaint by filing

a motion to dismiss. The motion was heard on June 20, 2017. By

order entered on July 5, 2017, the circuit court dismissed the

malicious prosecution claim but denied the motion as to the abuse

of process claim.3 The July 5, 2017 order is not at issue in

this appeal.

Welborn answered Green Aloha's complaint. On

February 12, 2018, Welborn filed a motion for judgment on the

pleadings or, in the alternative, for summary judgment on Green

Aloha's remaining claim. The motion was heard on April 25, 2018. 

The circuit court requested supplemental briefing. The hearing

was continued on May 18, 2018. On June 8, 2018, the circuit

court entered an order denying judgment on the pleadings, but

granting summary judgment. The Judgment was entered on the same

day. This appeal followed.

Green Aloha's single point of error contends that the

circuit erred by granting summary judgment for Welborn on Green

Aloha's claim for abuse of process. We review a grant of summary

judgment de novo using the same standard applied by the trial

court. Nozawa v. Operating Engineers Local Union No. 3, 142

Hawai#i 331, 338, 418 P.3d 1187, 1194 (2018). Summary judgment

is appropriate if the evidence presented shows that there is no

genuine issue as to any material fact and that the moving party

is entitled to a judgment as a matter of law. Id. at 342, 418

P.3d at 1198. A fact is material if proof of that fact would

have the effect of establishing or refuting one of the essential

elements of a cause of action or defense asserted by the parties. 

Id.

3 The Honorable Rhonda A. Nishimura entered the order.

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"[T]here are two essential elements in a claim for

abuse of process: (1) an ulterior purpose and (2) a wilful act in

the use of the process which is not proper in the regular conduct

of the proceeding." Young v. Allstate Ins. Co., 119 Hawai#i 403,

412, 198 P.3d 666, 675 (2008) (cleaned up). The term "process"

broadly encompasses "the entire range of procedures incident to

litigation." Id. (citation omitted). The second element is

material to this appeal because even if Green Aloha can show that

Welborn utilized process for an improper ulterior purpose, Green

Aloha must still show "a 'willful act' distinct from the use of

process per se." Id. at 416, 198 P.3d at 679 (emphasis added).

Green Aloha contends that a letter from Welborn to

Britt dated January 19, 2016 (18 days before the Wasabi Lawsuit

was filed) satisfied the "wilful act" element. The letter

stated:

Dear Justin,

I wanted to include this personal note with the final

settlement offer from my attorney, Katherine Caswell.

The settlement offer comes with good intentions. It's an

opportunity for closure — for my own benefit, and for yours. 

A few trusted friends (especially Andy Evans) urged me to

pursue this route as a last resort. I know that you are

going through a lot right now. I care about you more than

you think. Consider the emotional and financial costs of a

lawsuit. Think about your family, your time, your new

business venture, and your money.

I know why you took the money. You're willing to take big

risks in pursuit of your new business venture. If you would

have asked, I probably would have helped.

My offer contains options for fair resolution — one in which

you pay less, and another where you get more time to pay.

You have 7 days to accept. If you do not accept, then I

will file a lawsuit, we'll go to court, spend a lot more

money, and I will get fully compensated for money due to me,

to Wasabi, plus penalties, damages and fees. It may also

put your dispensary application in jeopardy.

Think seriously about this Justin. This is a chance to move

on.

Sincerely,

Winston

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(Emphasis added.) Green Aloha argues:

Defendant Welborn's January 19, 2016 correspondence

was a threat — you, Britt, don't settle and I will take

action against [Green Aloha]. And that is precisely what

[Welborn] did. And the threat alone, e.g., threating to sue

[Green Aloha] in order to derail its dispensary license in

the unrelated proceeding (having nothing to do with the

Wasabi lawsuit) is sufficient to meet the second prong of

Young.

Green Aloha's argument is without merit for a number of reasons.

First, Welborn's letter to Britt was not "process,"

even under the broad definition of Young, 119 Hawai#i at 412, 198

P.3d at 675 (defining "process" as "the entire range of

procedures incident to litigation") (emphasis omitted). The

letter was sent 18 days before the Wasabi Lawsuit was filed. At

most, Welborn's letter could be evidence of ulterior motive: that

Welborn filed the Wasabi Lawsuit to put Green Aloha's marijuana

dispensary license application in jeopardy. But that would

satisfy only the first element (ulterior purpose) of a claim for

abuse of process. This was acknowledged by Green Aloha's counsel

during the May 18, 2018 hearing:

THE COURT: So how can an action that is taken before

process exists be an abuse of that nonexistent process?

[COUNSEL]: Well, I mean, I don't think you can look

at the timeframe just in a vacuum. He's telegraphing you

don't settle this with me, then I'm going to put your

medical marijuana license in jeopardy. The fact of him

sending a letter obviously, Your Honor, that's right, that's

not process. But that goes to his intent.

. . . .

. . . Of course the letter because it's not process,

it's not an abuse of process.

THE COURT: Well, it's not abuse of process.

[COUNSEL]: Yeah, and it's not a process at all, it's

a letter. Letters aren't process.

(Emphasis added.)

Second, as noted by the federal court for the District

of Hawai#i:

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Young does not address what would constitute a wilful

act sufficient to support an abuse of process claim, and the

court could find no other Hawaii cases addressing the

circumstances under which a plaintiff has sufficiently

alleged a wilful act. Prosser and Keeton, upon which Young

relied, however, describes that

[t]he improper purpose usually takes the form of

coercion to obtain a collateral advantage, not

properly involved in the proceeding itself, such as

the surrender of property or the payment of money, by

the use of the process as a threat or a club. There

is, in other words, a form of extortion, and it is

what is done in the course of negotiation, rather than

the issuance or any formal use of the process itself,

which constitutes the tort.

Prosser and Keeton, at 898.

Ancier v. Egan, Civil No. 14-00294, 2014 WL 6872977 at *6 (D.Haw.

Dec. 4, 2014). But see Young, 119 Hawai#i at 414, 198 P.3d at

677 ("Offers to settle the claims at issue in a case are proper,

if not encouraged, in the regular conduct of proceedings. A

contrary rule would have a devastating effect on the settlement

process, because parties would be wary of making settlement

offers if such offers could provide the essential ingredient to

subject them to a second lawsuit for abuse of process.") (cleaned

up). In this case the settlement offer at issue — Welborn's

January 19, 2016 letter to Britt — was sent 18 days before the

Wasabi Lawsuit was filed (against Britt, not against Green

Aloha). Welborn's offer did not condition settlement of Wasabi's

claim against Britt upon Green Aloha withdrawing its marijuana

dispensary license application.

Third, Green Aloha cites its interrogatory answers and

argues:

[T]he May 3, 2016 letter and attachments . . . from David

Tongg, HK Medicinal's attorney to Virginia Pressler of the

DOH supports the allegations. Basically, HK Medicinal tried

to use the Wasabi complaint with the frivolous claims

against Green Aloha as a way to get the dispensary license

revoked so that HK Medicinal would get the license.

The May 3, 2016 letter is not in the record. There is no

evidence that Welborn — who admittedly was an investor in HK

Medicinal LLC, a company competing with Green Aloha to secure the

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single marijuana dispensary license available for the island of

Kaua#i — had any involvement in writing HK Medicinal's letter or

sending it to the Department of Health. Nor is there any

evidence Welborn actually used the Wasabi Lawsuit to jeopardize

Green Aloha's license application.

Welborn sustained his burden of production under

Rule 56 of the Hawai#i Rules of Civil Procedure by filing a

declaration denying any involvement with the alleged use of the

Wasabi Lawsuit to jeopardize Green Aloha's medical marijuana

dispensary license application. See Nozawa, 142 Hawai#i at 342,

418 P.3d at 1198 (noting that "[t]he burden is on the moving

party to establish that summary judgment is proper"). The record

contains no evidence of any wilful act by Welborn distinct from

prosecuting the Wasabi Lawsuit that may have jeopardized Green

Aloha's dispensary application, or was otherwise "antithetical to

the legitimate conduct of" the Wasabi Lawsuit. See Young, 119

Hawai#i at 416, 198 P.3d at 679.

For the foregoing reasons, the Judgment entered by the

circuit court on June 8, 2018, is affirmed.

DATED: Honolulu, Hawai#i, December 9, 2021.

On the briefs:

/s/ Lisa M. Ginoza

Richard E. Wilson, Chief Judge

for Plaintiff-Appellant.

/s/ Keith K. Hiraoka

A. Bernard Bays, Associate Judge

Michael C. Carroll,

Brian M. Mullin, /s/ Karen T. Nakasone

for Defendant-Appellee. Associate Judge

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