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NO. CAAP-17-0000667

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

JOHN Y. SUZUKI AND LOLA L. SUZUKI,

Plaintiffs-Appellants,

v.

JOHN MOWRY dba TOWN & COUNTRY BUILDERS, LLC,

Defendant-Appellee

APPEAL FROM THE DISTRICT COURT OF THE FIRST CIRCUIT

HONOLULU DIVISION

(CIVIL NO. 1RC17-1-3158)

SUMMARY DISPOSITION ORDER

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

This appeal arises out of a contract between

Plaintiffs-Appellants John Y. Suzuki and Lola L. Suzuki

(collectively, the Suzukis) and Defendant-Appellant John Mowry

dba Town & Country Builders, LLC (T&C Builders) for renovation

work to the Suzukis' home. The Suzukis, self-represented, appeal

from the August 23, 2017 "Order Granting Defendant's Motion to

Compel Arbitration" (Order Granting Motion to Compel Arbitration)

entered in the District Court of the First Circuit (district

court).1

Upon careful review of the record and the briefs

submitted by the parties, and having given due consideration to

the arguments advanced and the issues raised, we affirm.

1 The Honorable Michael K. Tanigawa presided.

Electronically Filed

Intermediate Court of Appeals

CAAP-17-0000667

29-DEC-2020

07:49 AM

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I. Background

In 2015, the Suzukis applied to the Rehabilitation Loan

Program (Loan Program) administered by the Department of

Community Services of the City and County of Honolulu (DCS).

2

The Suzukis' application was approved and the Suzukis ultimately

selected T&C Builders as their general contractor. On or about

December 14, 2015, the Suzukis signed and accepted T&C Builders'

construction proposal dated November 20, 2015 (Proposal). On May

6, 2016, the Suzukis executed a DCS form contract (DCS Contract)

with T&C Builders that consisted of a one-page "Construction

Contract" and a six-page document titled "General Conditions of

the Contract." Attached to the Construction Contract as "Exhibit

A" was a progress payment schedule. The Construction Contract

also incorporated by reference the Proposal through a provision

that read: "The Contract shall consist of this Construction

Contract and the following documents: Bid and/or Proposal, Work

Write-Up, General Conditions of the Contract, Specifications, and

Plans and/or Drawings, if any."

On July 11, 2016, the Suzukis executed another

construction contract (July 11, 2016 Contract) submitted by T&C

Builders that contained a lien provision and other disclosures

required under HRS § 444-25.5 (2013) as well as additional terms

and conditions.3 T&C Builders asserts that the purpose of the

July 11, 2016 Contract was to supplement the DCS Contract and

comply with HRS § 444-25.5. Notably, the July 11, 2016 Contract

contained the following arbitration provision:

35. Disputes: Disputes as to removal or replacement of

work and as to damages for alleged defective materials

or workmanship or deviations from the plans and

specifications, etc., and as to alleged extras, and

other disputes arising out of the contract, plans or

specifications, shall be decided by a third party

selected by both the CONTRACTOR and the OWNER, or if

2 The Loan Program uses federal funds to make low-interest loans to

eligible homeowners who wish to make repairs or improvements to their homes.

3 This contract document was dated May 6, 2016, but the Suzukis signed it

on July 11, 2016.

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they cannot agree, then by three disinterested

arbitrators, one selected by the OWNER, one by the

CONTRACTOR, and the two thus chosen, all expenses

incidental thereto to be shared equally between the

CONTRACTOR and the OWNER. The arbitrator or

arbitrators shall have full power to inquire into and

determine all claims advanced by either party his or

her award shall be final and binding with no further

appeal to either party.

After T&C Builders began working on the renovations to

the Suzukis' home, several disputes arose regarding the work done

by T&C Builders. Due to the ongoing disputes, T&C Builders was

unable to complete the project and terminated the contract by

letter through counsel to the Suzukis dated March 20, 2017.

On May 8, 2017, the Suzukis filed a Complaint for

Assumpsit-Money Owed against T&C Builders for $20,000, alleging

poor workmanship, deviation from plans, and other deficiencies. 

On July 14, 2017, T&C Builders filed a Motion to Compel

Arbitration based on the arbitration provision in the July 11,

2016 Contract. The district court granted the motion.

On August 14, 2017, the Suzukis filed a motion for

reconsideration of the Order Granting Motion to Compel

Arbitration. On September 12, 2017, the district court denied

the motion for reconsideration without a hearing.

On September 15, 2017, the Suzukis timely filed a

Notice of Appeal.

II. Discussion

A motion to compel arbitration is reviewed de novo and

based on the same standard that applies to a summary judgment

ruling. See Koolau Radiology, Inc. v. Queen's Med. Ctr., 73

Hawai#i 433, 439-40, 834 P.2d 1294, 1298 (1992) ("[ W]e review

this [motion to compel arbitration] de novo, using the same

standard employed by the trial court and based upon the same

evidentiary materials as were before it in determination of the

motion.") (citations, internal quotation marks, and alterations

omitted)).

"When presented with a motion to compel arbitration,

the court is limited to answering two questions: 1) whether an

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arbitration agreement exists between the parties; and 2) if so,

whether the subject matter of the dispute is arbitrable under

such agreement." Siopes v. Kaiser Found. Health Plan, Inc., 130

Hawai#i 437, 446, 312 P.3d 869, 878 (2013) (internal quotation

marks omitted) (quoting Douglass v. Pflueger Haw., Inc., 110

Hawai#i 520, 530, 135 P.3d 129, 139 (2006)). In this case, the

Suzukis challenge both the existence of an arbitration agreement

and whether their underlying claims are arbitrable.

It is well-established that "[t]he party seeking to

compel arbitration carries the initial burden of establishing

that an arbitration agreement exists between the parties." Id.

(citation omitted). If the initial burden is met, the burden

then shifts to the opposing party to "present evidence on its

defenses to the arbitration agreement." Id. (citation omitted). 

"[I]n order to be valid and enforceable, an arbitration agreement

must have the following three elements: (1) it must be in

writing; (2) it must be unambiguous as to the intent to submit

disputes or controversies to arbitration; and (3) there must be

bilateral consideration." Id. at 447, 312 P.3d at 879 (quoting

Douglass, 110 Hawai#i at 531, 135 P.3d at 140).

On appeal, the Suzukis do not dispute that the

arbitration provision is in writing or that it is supported by

bilateral consideration. The Suzukis' main challenge seems to be

regarding the second element of an enforceable arbitration

agreement, that is, the Suzukis argue they did not assent to the

entire July 11, 2016 Contract and that the contract was therefore

void because they executed it under pressure of time and based on

misrepresentations by John Mowry (Mowry), the owner of T&C

Builders, regarding its contents. The Suzukis argue that they

were not afforded a reasonable opportunity to read the July 11,

2016 Contract for themselves as Mowry told them it had to be

signed when he was there. According to the Suzukis, they did not

understand what they were signing but Mowry convinced them to

sign the contract by telling them it was primarily for the lien

provision but that it was otherwise like the DCS Contract. The

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Suzukis also assert, without supporting evidence in the record,

that they have medical conditions that affect their ability to

read and understand complicated terms, that Mowry was aware of

their conditions but did not fully explain the terms of the July

11, 2016 Contract, and that they would not have signed the July

11, 2016 Contract if they had known the details of the various

provisions, including the arbitration provision. 

The arguments the Suzukis made before the district

court fall short of the arguments they now make on appeal. The

Suzukis only raised a challenge as to the lien provision of the

July 11, 2016 Contract. They did not argue below that they did

not read or understand the entirety of the July 11, 2016 Contract

or that they were unaware of the arbitration provision. The

district court therefore did not have the opportunity to address

these arguments and they must be deemed waived. See Cty. of

Hawai#i v. C&J Coupe Family Ltd. P'ship, 119 Hawai#i 352, 373, 198

P.3d 615, 636 (2008). 

The Suzukis' primary contention below was that no

contractual relationship existed between the Suzukis and T&C

Builders or that any contractual relationship was invalidated by

fraudulent inducement. To that extent, the arbitration provision

may still be enforced even if all or part of the contract in

which it appeared was unenforceable. Lee v. Heftel, 81 Hawai#i

1, 4, 911 P.2d 721, 724 (1996) ("[A]rbitration clauses are

separable from the contracts in which they are embedded, and

where no claim is made that fraud was directed to the arbitration

clause itself, a broad arbitration clause will be held to

encompass arbitration of the claim that the contract itself was

induced by fraud.") (citation omitted)).

We must review the Motion to Compel Arbitration based

upon the same evidentiary materials as were before the district

court. Koolau Radiology, Inc., 73 Hawai#i at 440, 834 P.2d at

1298. In doing so, we conclude that T&C Builders met its initial

burden of proving that the Suzukis assented to be bound by the

arbitration provision as evidenced by the signatures on the July

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11, 2016 Contract. The first set of signatures indicated

acceptance of the terms and conditions of the agreement, which

included the arbitration provision. The second set of signatures

was on the very page that the arbitration provision was located. 

Of significance, the handwritten note made by the Suzukis on the

provision immediately preceding the arbitration provision

indicates that they did, in fact, have the opportunity to review

the terms.

Since T&C Builders satisfied its initial burden, the

burden then shifted to the Suzukis to present evidence of any

defenses. The Suzukis failed to provide such evidence to the

district court.

We now address whether the dispute in this matter falls

under the scope of the arbitration provision. The provision, by

its terms, suggests a broad scope in its mandate of arbitration

for disputes arising out of "the contract, plans or

specifications[.]" The July 11, 2016 Contract does not contain a

definition of the phrase, "the contract, plans or specifications"

or any of the individual terms within the phrase. However, the

July 11, 2016 Contract provided that the scope of work under the

contract included the work outlined in the Proposal, and that the

terms and conditions of the DCS Contract were applicable. The

Suzukis' complaint alleged poor workmanship, deviation from

plans, and other deficiencies. These claims arose directly from

the work done by T&C Builders pursuant to the contracts, in

particular, the Proposal. Thus, the underlying dispute in this

matter, as set forth in the Suzukis' complaint, raises issues

within the scope of the arbitration provision.

Lastly, the district court did not abuse its discretion

in denying the Suzukis' motion for reconsideration of the Order

Granting Motion to Compel Arbitration. The evidence and

arguments that the Suzukis proffered in support of the motion for

reconsideration could and should have been submitted in support 

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of their opposition to the motion to compel arbitration. See

Kamaka v. Goodsill Anderson Quinn & Stifel, 117 Hawai#i 92, 104,

176 P.3d 91, 103 (2008).

III. Conclusion

Based on the foregoing, we affirm the August 23, 2017

Order Granting Motion to Compel Arbitration.

DATED: Honolulu, Hawai#i, December 29, 2020.

On the briefs:

John Y Suzuki and

Lola L. Suzuki, 

Plaintiffs-Appellants pro se.

Karin L. Holma, 

Georgia Anton, 

for Defendant-Appellee.

/s/ Lisa M. Ginoza

Chief Judge

/s/ Katherine G. Leonard

Associate Judge

/s/ Keith K. Hiraoka

Associate Judge

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