NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

NO. CAAP-19-0000078

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

CHARLES DAVID WAGNER, TRUSTEE OF THE CHARLES DAVID WAGNER TRUST

DATED FEBRUARY 16, 1995 and JILL ABIGAIL WAGNER, TRUSTEE OF THE

JILL ABIGAIL WAGNER TRUST DATED FEBRUARY 16, 1995,

Plaintiffs/Counterclaim Defendants-Appellants,

v.

GUIDO GIACOMETTI and SUSAN TIUS, 

Defendants/Counterclaimants-Appellees,

and

Does 1-10, Defendants

APPEAL FROM THE CIRCUIT COURT OF THE THIRD CIRCUIT

(CIVIL No. 3CC15100083K)

MEMORANDUM OPINION

(By: Hiraoka, Presiding Judge, Nakasone and McCullen, JJ.)

Plaintiffs/Counterclaim Defendants-Appellants Charles

David Wagner, Trustee of the Charles David Wagner Trust Dated

February 16, 1995, and Jill Abigail Wagner, Trustee of the Jill

Abigail Wagner Trust Dated February 16, 1995, (the Wagners)

appeal from the "Final Judgment as to All Claims and Parties" in

favor of Defendants/Counterclaimants-Appellees Guido Giacometti

and Susan Tius entered by the Circuit Court of the Third Circuit

on January 11, 2019.1 For the reasons explained below, we vacate

the Judgment and remand for proceedings consistent with this

memorandum opinion.

1 The Honorable Melvin H. Fujino presided.

Electronically Filed

Intermediate Court of Appeals

CAAP-19-0000078

29-MAR-2023

07:53 AM

Dkt. 101 MO
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BACKGROUND

The Wagners and Giacometti and Tius were neighbors in

the Anekona Estates subdivision on the island of Hawai#i. The

Wagners sued Giacometti and Tius on March 3, 2015. They alleged

that Giacometti and Tius violated various provisions of the

Declaration of Protective Covenants, Conditions and Restrictions

for Anekona Estates. The complaint alleged breach of contract,

injunctive relief, and specific performance. It was signed by

attorney Steven D. Strauss.

Giacometti and Tius answered the complaint and filed a

counterclaim on April 23, 2015. They claimed that the Wagners

"negatively impacted and impaired [their] enjoyment and use of

their property and the value of their property." The

counterclaim alleged tortious interference with contractual and

other relations, nuisance, and abuse of process. Giacometti and

Tius were represented by attorney Bruce H. Wakuzawa.

The Wagners answered the counterclaim on May 29, 2015. 

On November 25, 2015, attorney Gary W.K. Au Young entered an

appearance as counsel for the Wagners "on the Counterclaim." It

appears from the record that Au Young was retained by the

Wagners' insurer, The Hartford, to defend the Wagners against

Giacometti's and Tius's counterclaim.

According to the Rules of the Circuit Courts of the

State of Hawai#i (RCCH) in effect at the relevant time, the

Wagners' pretrial statement was due on November 3, 2015 (eight

months after their complaint was filed) and Giacometti's and

Tius's pretrial statement for their counterclaim was due on

December 23, 2015. See former RCCH Rule 12(b). At that time in

the Third Circuit, within sixty days after the pretrial statement

was filed, the plaintiff was required to file a document with the

court indicating that either: counsel has agreed upon 3 separate

weeks, within 150-240 days from the filing date of the pretrial

statement, in which the trial can occur; or counsel cannot agree

on trial dates and the parties wish a trial setting status

conference. See former RCCH Rule 12(c)(2). Under the RCCH, the

trial date should have been set for June 30, 2016, at the latest.

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None of the parties filed pretrial statements. On

August 11, 2017, the circuit court entered an order dismissing

the complaint and the counterclaim. See former RCCH Rule 12(q). 

The parties filed timely motions to set aside the order of

dismissal. Orders granting the motions were entered on

October 30, 2017.

Giacometti and Tius filed their pretrial statement on

September 25, 2017. The Wagners filed their pretrial statement

on October 2, 2017. Under former RCCH Rule 12(c)(2), the trial

date was to be between February 22, 2018 and May 23, 2018.

On December 15, 2017, the Wagners filed their trial

setting statement. They reported that the parties were unable to

agree on a trial date, and requested a trial setting conference. 

On January 8, 2018, the circuit court scheduled a trial setting

conference for February 13, 2018. The conference was continued

by stipulation and held on March 9, 2018.

On March 14, 2018, the circuit court entered an order

setting a settlement conference for July 5, 2018, and the trial

for August 7, 2018 (Order Setting Trial). The order stated:

"Counsel shall filed [sic] written client consent to the trial

date as set." Giacometti and Tius filed their consent to the

August 7, 2018 trial date on March 28, 2018.2 The record does

not contain a consent filed by the Wagners.

Pertinent to this appeal, the Order Setting Trial also

stated:

Attendance at Settlement Conferences

Attendance at settlement conferences shall be as

required by Rule 12.1, Rules of the Circuit Courts. The

Court notes particularly Rule 12.1(a)(4) mandating the

parties to have attempted to negotiate settlement through an

exchange of written bona fide and reasonable offers of

settlement prior to the conference.[3] Attendance and

2 The document was titled "Consent to Continuance of Trial Date" but

the text of the document stated only that Giacometti and Tius "consent to the

August 7, 2018 Trial Date" and did not mention a continuance.

3 Former RCCH Rule 12.1(a)(4) provided:

Each party to the action shall have thoroughly evaluated the

case and shall have discussed and attempted to negotiate a

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authority are extremely important, therefore, the parties or

attorneys who have complete settlement authority (not

authority to settle up to a certain amount) shall be

present. Failure to comply with this shall result in the

Court imposing appropriate sanctions. The court suffers

great inconvenience when clients are not readily available.

. . . .

Sanctions

The sanctions for non-compliance with this order

include those imposed by Haw. R. Circuit Cts. Rule

12.1(a)(6), and shall, in the appropriate case, include

default.[4]

The parties began to mediate in April 2018.

On June 21, 2018, the Wagners filed: (1) a motion to

continue the trial date, reset pretrial deadlines, and continue

the settlement conference; and (2) an ex parte motion to shorten

time for hearing the motion. The motion was heard on June 29,

2018. The circuit court orally denied the motion. A written

order was entered on August 29, 2018 (Order Denying Motion to

Continue).

The settlement conference took place as scheduled on

July 5, 2018. The circuit court noted that the Wagners had not

submitted a confidential settlement conference letter or filed a

settlement through an exchange of written bona fide and

reasonable offers of settlement prior to the conference.

4 Former RCCH Rule 12.1(a)(6) provided:

SANCTIONS. The failure of a party or his attorney to appear

at a scheduled settlement conference, the neglect of a party

or his attorney to discuss or attempt to negotiate a

settlement prior to the conference, or the failure of a

party to have a person authorized to settle the case present

at the conference shall, unless a good cause for such

failure or neglect is shown, be deemed an undue interference

with orderly procedures. As sanctions, the court may, in its

discretion:

(i) Dismiss the action on its own motion, or on the

motion of any party, or hold a party in default, as the case

may be;

(ii) Order a party to pay the opposing party's

reasonable expenses and attorneys' fees;

(iii) Order a change in the calendar status of the

action;

(iv) Impose any other sanction as may be appropriate.

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settlement conference statement as to their affirmative claims;

were not present in person; and the attorney defending them

against the counterclaim (Au Young) was also not present in

person. The court stated:

The Court has reviewed the files and records in this case,

and pursuant to orders setting jury trial date and pre-trial

deadline filed March 14, 2018:

As to the counterclaim filed by [Giacometti and Tius],

the Court will enter default against the [Wagners] as

neither Mr. Au Young [n]or the [Wagners] are present today;

As to the underlying complaint, the [Wagners]'

attorney not being in compliance with filing a confidential

-- personal and confidential letters, as well as the

settlement conference statement, the Court will dismiss the

underlying complaint without prejudice.

On August 13, 2018, the circuit court entered the

"Order Imposing Sanctions Against [the Wagners] for Multiple

Violations of March 14, 2018 Order Setting Jury Trial Date and

Pretrial Deadlines[.]"

On August 21, 2018, the Wagners filed a motion for

reconsideration of the Order Imposing Sanctions. Also on

August 21, 2018, Giacometti and Tius filed a motion for default

judgment on their counterclaim against the Wagners and a motion

for attorneys' fees and costs. The three motions were heard on

September 20, 2018.

On December 3, 2018, the circuit court entered an order

denying the Wagners' motion for reconsideration (Order Denying

Reconsideration) and separate orders granting Giacometti's and

Tius's motion for default judgment (Order Granting Default

Judgment) and motion for attorneys' fees and costs (Order

Granting Fees and Costs).

The Judgment was entered on January 11, 2019.5

 This

appeal followed.

5 The judgment amount was $446,750.06, including $105,843.42 in

attorneys' fees and $3,331.64 in costs. 

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DISCUSSION

The Wagners contend that the circuit court erred by

entering the Order Denying Motion to Continue, Order Imposing

Sanctions, Order Denying Reconsideration, Order Granting Default

Judgment, and Order Granting Fees and Costs.

I. The Circuit Court Abused its Discretion by

Denying the Wagners' Motion to Continue the

Settlement Conference and Trial Dates

We review the Order Denying Motion to Continue for

abuse of discretion. Sapp v. Wong, 62 Haw. 34, 41, 609 P.2d 137,

142 (1980). "Generally, to constitute an abuse it must appear

that the court clearly exceeded the bounds of reason or

disregarded rules or principles of law or practice to the

substantial detriment of a party litigant." Id.

A. Trial Date

The Wagners waited more than three months after entry

of the Order Setting Trial to move to continue the trial and

settlement conference. Their motion was supported by their

declarations stating they would be away from Hawai#i from

June 12, 2018, until July 30, 2018 (a week before the trial was

to begin). They submitted copies of their itinerary showing

their tickets had been issued on January 10, 2018 (two months

before the March 9, 2018 trial setting conference), and that they

would be in Europe on July 5, 2018 (the date set for the

settlement conference). Their declarations also stated that

their expert witness died unexpectedly in March 2018, and they

intended to retain another expert witness for trial.6

The Wagners also argued that Giacometti and Tius

originally requested, at the trial setting conference, "a trial

date in October 2018[.]" Giacometti and Tius agree that they had

requested a trial date in October 2018, but "[t]he Court

6 The expert witness, who was to "testify about his appraisal of the

WAGNERS' real property[,]" had been properly identified in their pretrial

statement.

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declined[.]" Giacometti and Tius acknowledge that Wakuzawa told

the Wagners' counsel, "[s]hortly after the trial setting

conference," that Giacometti and Tius "would not oppose a short

continuance of the trial."

In opposition to the motion, Giacometti and Tius argued

that the Wagners' travel plans were not mentioned during the

trial setting conference, and that all counsel agreed to the

August 7, 2018 trial date during the trial setting conference.

Strauss and Au Young did not dispute this. They should have

determined their clients' availability before the trial setting

conference. Had they raised the Wagners' travel schedule at the

trial setting conference, the circuit court may well have agreed

to Giacometti's and Tius's proposed October 2018 trial setting —

the August 7, 2018 trial date selected by the circuit court was

already three months past the outside date prescribed by former

RCCH Rule 12(c)(2), and was the first trial setting for the case. 

The record contains no other information, such as the circuit

court's trial calendar for late-2018 to early-2019, or other

information about the court's availability for trial.

Giacometti and Tius also argued that the case was over

three years old. This, however, was due in part to their own

failure to timely file a pretrial statement for their

counterclaim.

Finally, Giacometti and Tius argued that the expired

pretrial deadlines should not be continued. They claim they did

not name an expert appraiser in their final naming of witnesses

(filed on May 7, 2018) because "the Wagners had not identified

any replacement expert for [their appraiser] or even stated that 

they intended to do so" after their expert died in March 2018.

The circuit court could have addressed this concern by continuing

the trial date but not extending the pretrial deadlines.

Under these circumstances, the circuit court should not

have prejudiced the Wagners because of their counsels' failure to

adequately prepare for the trial setting conference. Any

prejudice to Giacometti and Tius from continuing the trial date

could have been cured by not extending the pretrial deadlines. 

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We conclude that the circuit court abused its discretion by

denying a continuance of the trial date.

B. Settlement Conference

The Wagners argue that a settlement conference date was

not discussed at the trial setting conference, and they first

received notice of the July 5, 2018 date for the settlement

conference when they received the Order Setting Trial. They

would not be able to attend the settlement conference because

they were supposed to be in Europe on July 5, 2018.

Au Young was also scheduled to be out of the country on

July 5, 2018, and contacted the circuit court clerk to obtain

alternative dates for the settlement conference soon after the

Order Setting Trial was entered. He did not ask the circuit

court to reschedule the settlement conference, because he "could

not obtain confirmation from [Strauss] for a new date."

Significantly, in addition to Giacometti's and Tius's

memorandum in opposition stating they "would not oppose a short

continuance of the trial[,]" it also stated:

Mr. Giacometti and Ms. Tius are prepared to proceed with the

scheduled July 5, 2018 settlement conference. However, if

the Wagners and Mr. Au Young will not be present at the

settlement conference as indicated in the Motion to Continue

and Reset, Mr. Giacometti and Ms. Tius do not want to engage

in an exercise in futility.

Au Young could have immediately brought his travel

conflict to the court's attention by filing a motion to continue

the settlement conference. The record does not indicate that

Au Young asked Wakuzawa whether Giacometti and Tius would agree

to reschedule the settlement conference but, in view of their

desire to not "engage in an exercise in futility[,]" they may

well not have opposed a continuance of the settlement conference

to enable Au Young (and the Wagners) to attend in person.

Under the circumstances of this case — including

Giacometti's and Tius's reticence to participate in a settlement

conference in the absence of the Wagners and Au Young and their

failure to show that they would be prejudiced by a continuance of

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the settlement conference — we conclude it was an abuse of

discretion for the circuit court to deny the motion to continue

the settlement conference.

II. The Circuit Court Abused its Discretion by

Entering the Order Imposing Sanctions

We review the Order Imposing Sanctions for abuse of

discretion. Dela Cruz v. Quemado, 141 Hawai#i 338, 344, 409 P.3d

742, 748 (2018).

The Order Imposing Sanctions was entered because of the

Wagners' and their counsels' failure to comply with the

settlement conference requirements in the Order Setting Trial. 

It (1) dismissed the Wagners' complaint without prejudice; and

(2) entered the Wagners' default on Giacometti's and Tius's

counterclaim. The drastic sanctions of dismissal and default

judgment are authorized only in extreme circumstances. Rearden

Fam. Tr. v. Wisenbaker, 101 Hawai#i 237, 254, 65 P.3d 1029, 1046

(2003) (citing W.H. Shipman, Ltd. v. Hawaiian Holiday Macadamia

Nut Co., 8 Haw. App. 354, 361, 802 P.2d 1203, 1207 (1990)). 

"[D]efaults and default judgments are not favored and . . . any

doubt should be resolved in favor of the party seeking relief, so

that, in the interests of justice, there can be a full trial on

the merits." Dela Cruz, 141 Hawai#i at 345, 409 P.3d at 749

(quoting Rearden Fam. Tr., 101 Hawai#i at 254, 65 P.3d at 1046). 

"[A]n order of dismissal cannot be affirmed absent deliberate

delay, contumacious conduct, or actual prejudice[.]" Erum v.

Llego, 147 Hawai#i 368, 383, 465 P.3d 815, 830 (2020) (citation

and emphasis omitted).

The Wagners' counsel did not promptly move to continue

the settlement conference after entry of the Order Setting Trial. 

But Au Young did take steps to mitigate his unavailability by

informing the circuit court, in his confidential settlement

letter, that: he would be out of the country on July 5, 2018, and

unable to personally attend the settlement conference; "The

Hartford has made an offer to settle the Counterclaim"; a

representative of The Hartford would be available by telephone to

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discuss settlement of the counterclaim; Strauss would handle

settlement discussions for the counterclaim on behalf of the

Wagners; and Strauss "had full authority to settle the

Counterclaim."

The record does not indicate, nor does the Order

Imposing Sanctions recite, that the circuit court attempted to

learn: whether Giacometti and Tius had made a demand to settle

their counterclaim; the terms of The Hartford's offer to settle

the counterclaim; Giacometti's and Tius's position on that offer;

whether Giacometti and Tius were prepared to make a counteroffer

at the settlement conference; whether there had been any demands

or offers to settle the Wagner's claims; whether Strauss was

prepared to make a demand at the settlement conference to settle

the Wagners' claims; whether Wakuzawa was prepared to make an

offer at the settlement conference to settle the Wagners' claims;

any of the parties' respective settlement positions; or the

status of the mediation.

The circuit court made no findings that: the settlement

conference — even in the absence of the Wagners and Au Young —

would have been "an exercise in futility" as predicted by

Giacometti and Tius; but for the absence of the Wagners and

Au Young, a settlement would likely have been reached; or the

absence of the Wagners and Au Young actually and materially

impeded productive settlement discussions. Nor could the circuit

court have reasonably so concluded, without making the inquiries

listed in the previous paragraph.

"[T]he sanction of dismissal of a complaint with

prejudice is one of last resort where lesser sanctions would not

serve the interest of justice." In re Blaisdell, 125 Hawai#i 44,

49, 252 P.3d 63, 68 (2011) (citation omitted). Although the

circuit court dismissed the Wagners' claims without prejudice,

the dismissal could effectively have been with prejudice because

the accompanying entry of the Wagners' default on Giacometti's

and Tius's counterclaim could have preclusive effect on the

Wagners' affirmative claims against Giacometti and Tius. See

Bremer v. Weeks, 104 Hawai#i 43, 53-54, 85 P.3d 150, 160-61

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(2004) (discussing elements of claim preclusion and issue

preclusion).

Under the circumstances of this case, we conclude that

the circuit court abused its discretion by issuing the Order for

Sanctions because lesser sanctions, such as assessing Wakuzawa's

fees and Giacometti's and Tius's expenses incurred to attend the

settlement conference, were available.

We need not address the Wagners' remaining point of

error.

CONCLUSION

For the foregoing reasons, we vacate: the Order

Imposing Sanctions entered on August 13, 2018; the Order Granting

Default Judgment and Order Granting Fees and Costs, both entered

on December 3, 2018; and the Judgment entered on January 11,

2019. We remand this case to the circuit court for further

proceedings consistent with this memorandum opinion, without

prejudice to any party moving for an award of attorneys' fees and

costs at an appropriate time.

DATED: Honolulu, Hawai#i, March 29, 2023.

On the briefs:

/s/ Keith K. Hiraoka

Steven D. Strauss, Presiding Judge

Gary W. K. Au Young,

for Plaintiffs/ /s/ Karen T. Nakasone

Counterclaim Defendants- Associate Judge

Appellants Charles David

Wagner and Jill Abigail /s/ Sonja M.P. McCullen

Wagner. Associate Judge

Bruce H. Wakuzawa,

Peter Knapman,

for Defendants/CounterclaimantsAppellees Guido Giacometti and

Susan Tius.

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