Title: STATE BY BRONSTER v. US Steel Corp.
Citation: 919 P.2d 294
Docket Number: 17695
State: Hawaii
Issuer: Hawaii Supreme Court
Date: June 24, 1996

919 P.2d 294 (1996) 82 Hawai`i 32 STATE of Hawai`i, By Margery S. BRONSTER, Attorney General,[1] Plaintiff-Appellant/Cross-Appellee, v. UNITED STATES STEEL CORPORATION, Defendant-Appellee/Cross-Appellant, and Erkel Greenfield and Associates, Inc.; Charles Luckman; Samuel M. Burnett; The Luckman Partnership, Inc.; formerly known as Charles Luckman And Associates; Dillingham Corporation, dba Hawaiian Dredging And Construction Company, Inc.; Inryco, Inc.; formerly known as Inland Ryerson Company, Inc.; Hawai`i Welding Co., Ltd.; Diversified Earth Sciences, Inc.; Mountain States Steel Company, Inc., aka Emessessco, Inc., Mitsui &amp; Co. (U.S.A.), Inc.; Bethlehem Steel Corporation; Kaiser Steel Corporation; Nippon Steel (U.S.A.), Inc.; Nippon Steel Corporation; Riedel International, Inc., fka Williamette Western Corporation; Severud, Perrone, Sturm, Conlin And Bandel, aka Severud, Perrone, Szegezdy &amp; Strum; The Ogden Corporation; Mitsui &amp; Co., Ltd.; Rudy Veland; Michael T. Suzuki; Michael T. Suzuki &amp; Associates, Inc.; Argonaut Insurance Company; Charles Shumsky; John Does 4-100; Mary Roes 1-100; Doe Partnerships 2-100; and Doe Corporations 9-100; Defendants. HAWAI`I WELDING CO., LTD., Third-Party Plaintiff, v. GENERAL INSURANCE COMPANY OF AMERICA, Third-Party Defendant. No. 17695. Supreme Court of Hawaii. June 24, 1996. *297 Robert A. Marks, Former Attorney General, and Girard D. Lau and Peter L. Yee, Deputy Attorneys General, and David J. Dezzani and Wayne A. Muraoka of Goodsill, Anderson, Quinn &amp; Stifel, Special Deputy Attorneys General, on the briefs, Honolulu, for Plaintiff-Appellant/Cross-Appellee State of Hawai`i. Richard R. Clifton and Milton M. Yasunaga of Cades, Schutte, Fleming &amp; Wright, Honolulu, and Tony Berman of Berman Paley Goldstein &amp; Kannry, New York City, pro hac vice, and John M. Rochefort and David S. MacCuish of McClintock, Weston, Benshoof, Roschfort Rubalcava &amp; MacCuish, Los Angeles, Cal., pro hac vice, on the briefs, for Defendant-Appellee/Cross-Appellant United States Steel Corporation. Before MOON, C.J., and LEVINSON, NAKAYAMA and RAMIL, JJ., and MILKS, Circuit Judge, in place of KLEIN, J., recused. MOON, Chief Justice. In this case, dealing with the rusting steel structure of O`ahu's Aloha Stadium, plaintiff-appellant/cross-appellee State of Hawai`i (state) appeals from the judgment, after a jury trial, entered in favor of defendant-appellee/cross-appellant United States Steel Corporation (USX, USS, or U.S. Steel). On appeal, the state argues that: (1) the circuit court erred in granting USX's motion to dismiss its negligent misrepresentation claim on the basis that the claim was barred by the "economic loss" rule; (2) the trial court's jury instructions regarding the state's unfair and deceptive trade practices claim were erroneous; and (3) USX's alleged failure to turn *298 over requested documents during discovery warrant the grant of a new trial. In addition, USX cross appeals from the trial court's denial of its motion for attorneys' fees. For the following reasons, we hold that: (1) the "economic loss" rule does not bar the state's negligent misrepresentation claim; (2) the trial court's jury instructions regarding the state's claim for unfair or deceptive acts or practices in the conduct of any trade or commerce erroneously stated the law; and (3) the state waived any claim of discovery abuse by not raising the issue at trial. We therefore vacate the circuit court's grant of USX's motion to dismiss, vacate the judgment in favor of USX as to the state's claim for unfair or deceptive acts or practices in the conduct of any trade or commerce, and remand this case for further proceedings. In view of our remand, we need not reach USX's cross appeal. The judgment of the trial court is affirmed in all other respects. In 1966, the City and County of Honolulu (the City) decided to build a multi-purpose sports stadium in Halawa. The City budgeted the stadium project at $25,000,000.00 and was particularly desirous of a design that would be able to accommodate both football and baseball. The City solicited design proposals from various architectural firms, and the firm that was eventually awarded the bid, Charles Luckman Associates (CLA),[2] proposed building a stadium with movable stands that could be positioned in both football and baseball configurations. However, because a movable stand design required a structure constructed of a material lighter and more flexible than concrete, a central feature of CLA's proposed design was that the stadium be constructed of steel. Through USX's advertising and the personal experience of Rudy Veland, CLA's chief designer for the stadium project, CLA became aware of a product generically referred in the steel industry as "weathering steel," a type of steel designed to be used in an unpainted condition in appropriate circumstances. Ideally, when exposed to the normal wetting and drying cycles of the atmosphere, weathering steel would form a patina of rust that allegedly would protect the steel from further corrosion. USX marketed its brand of weathering steel, which was known as "Cor-Ten," as being four times as resistant to corrosion as ordinary carbon steel. CLA investigated the propriety of using weathering steel for the stadium project and received letters from steel companies, including USX, expressing favorable opinions regarding the propriety of using weathering steel in the stadium project. In a letter to Veland, dated October 1, 1968, Frank E. Felix, USX's construction industry representative, wrote: Subsequently, in an internal USX memorandum to F.T. Comee, USX's construction marketing regional manager, Felix wrote: USX's favorable opinions regarding the use of Cor-Ten in the stadium project were thereafter echoed in another letter to Veland dated October 11, 1968, from D.J. Carney, USX's vice-president in charge of applied research, which provided: The City subsequently approved CLA's design and proposal to use weathering steel in the structure of the stadium. Responsibility for the stadium project was later transferred to the state, and the Aloha Stadium was eventually constructed under the state's auspices. Throughout its involvement with the project, the state continued to use CLA as its architect. Thereafter, the stadium began to rust. Rather than merely forming a "protective" patina, the corrosion worsened over time to a point where it began to impair the structural integrity of the stadium. The state then filed the present action against numerous defendants, including USX, raising various theories of recovery, including various forms of negligence, negligent misrepresentation, unfair or deceptive acts or practices in the conduct of any commerce or trade, breach of express and implied warranties, vicarious liability, enterprise liability, and common-law fraud. The state eventually settled with all parties except USX, and the case proceeded to trial in July 1993. Prior to trial, the circuit court granted USX's motion to dismiss the state's tort claims, holding: The only claims remaining for trial, therefore, were the causes of action based on breach of warranties, common law fraud, and unfair and deceptive trade acts or practices. Prior to submission of the case to the jury, the state withdrew its claims for breach of warranties, and the jury returned a verdict in favor of USX on the two remaining claims. Thereafter, USX brought a motion for attorneys' fees, which the trial court denied, holding that "absent a specific statute, judicial decision, or agreement, a litigant may not recover attorneys' fees against the State." The state then timely appealed from the adverse judgment, and USX timely cross-appealed from the trial court's denial of its motion for award of attorneys' fees. Although USX's motion, prompting the order dismissing the state's negligent misrepresentation claim, was styled as a motion to dismiss, the motion was brought pursuant to Hawai`i Rules of Civil Procedure (HRCP) Rule 56, relating to summary judgment. Even if we were to consider the motion as a HRCP Rule 12 motion to dismiss, HRCP Rule 12(c) provides in pertinent part that: Voluminous supporting materials were presented in support of USX's motion, and the materials were not excluded by the court. We therefore treat USX's "motion to dismiss" as seeking summary judgment pursuant to HRCP Rule 56, and, accordingly, apply the standard of review applicable to motions for summary judgment. It is well settled that: Maguire v. Hilton Hotels Corp., 79 Hawai`i 110, 112, 899 P.2d 393, 395 (1995). USX argues that the circuit court properly granted its motion to dismiss the state's tort claims based on what has been termed the "economic loss" rule: that a cause of action in products liability will not lie where a plaintiff alleges a purely economic loss stemming from injury only to the product itself. The state, on the other hand, argues that the circuit court erred in applying the "economic loss" rule to bar its negligent misrepresentation claim against USX because the claim is not based on a products liability theory. We agree. In East River S.S. Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 106 S. Ct. 2295, 90 L. Ed. 2d 865 (1986), the United States Supreme Court acknowledged the "economic loss" rule, effectively adopted the rationale of the California Supreme Court in Seely v. White Motor Co., 63 Cal. 2d 9, 45 Cal. Rptr. 17, 403 P.2d 145 (1965), and held that no products liability claim lies in admiralty when a commercial purchaser alleges injury only to the product itself, resulting in purely economic loss. In East River, a shipbuilder contracted with Transamerica to design, manufacture, and supervise the installation of turbines that would be the main propulsion units for four oil-transporting supertankers constructed by the shipbuilder. After each ship was completed, it was chartered to one of the petitioners. When the ships were put into service, the turbines on all four ships malfunctioned due to design and manufacturing defects. Only the products themselves were damaged. The petitioners filed suit against Transamerica, alleging causes of action sounding in products liability, seeking damages for the cost of repairing the ships and for income lost while the ships were out of service. The district court granted summary judgment in favor of Transamerica, and the court of appeals affirmed, holding that the petitioner's dissatisfaction with product quality did not state a claim cognizable in tort. The United States Supreme Court affirmed the circuit court, holding that a manufacturer in a commercial relationship has no duty under either a negligence or strict products liability theory to prevent a product from injuring itself. The high court noted: Id. at 871-72, 106 S. Ct. at 2302-03 (footnote omitted). The "economic loss" doctrine is accepted by a majority of jurisdictions that have had occasion to consider it, see 4A American Law of Products Liability, §§ 60:36-60:60 (3d ed.1991 and Supp.1995); Annotation, Strict Products Liability: Recovery for Damage to Product Alone, 72 A.L.R.4th 12 (1985 and Supp.1995), and we take this opportunity to adopt it insofar as it applies to claims for relief based on a product liability or negligent design and/or manufacture theory. However, this is not to say that we must apply the doctrine in the present case. The state argues that, although the damages sought by the state are admittedly purely economic, the cause of action founded on negligent misrepresentation is not precluded by the economic loss doctrine because the claim does not sound in products liability. We agree for three principal reasons. First, the tort of negligent misrepresentation is founded on the breach of a duty separate and distinct from the duty abolished by the economic loss rule. In Chun v. Park, 51 Haw. 462, 462 P.2d 905 (1969), we adopted the tort of negligent misrepresentation in a case brought by purchasers of property and their lenders, involving the sellers' title company's negligent failure to report a recorded second mortgage on the property being purchased by the purchasers, and held that: Id. at 464-65, 462 P.2d at 906-07 (footnote omitted). In so holding, the Chun court adopted the formulation of the tort of negligent misrepresentation as ultimately[3] framed by Restatement (Second) of Torts § 552 (1977) (section 552), which provides in pertinent part: Id. See also Shaffer v. Earl Thacker Co., 6 Haw.App. 188, 716 P.2d 163 (1986) (applying Restatement position). The duty imposed by section 552 is therefore to exercise reasonable care or competence in obtaining or communicating information for the guidance of others in their business transactions. This duty, however, is distinct from the duty eliminated by the economic loss rule. As noted by the court in East River, the economic loss rule absolves manufacturers in commercial relationships from a duty "under either a negligence or strict products-liability theory to prevent a product from injuring itself." 476 U.S. at 871, 106 S. Ct. at 2302. Utilization of the economic loss rule to dismiss a claim for negligent misrepresentation, therefore, would be incongruous. The Supreme Court of Tennessee, in John Martin Co. v. Morse/Diesel, Inc., 819 S.W.2d 428 (Tenn.1991), offered an especially lucid discussion of the distinction between a claim for economic loss based on a cause of action sounding in negligent misrepresentation and a claim for economic loss based on a cause of action sounding in products liability. In *304 John Martin, a subcontractor brought an action against a construction manager and on-site superintendent, alleging that the construction manager negligently approved shop drawings that reflected an insufficient amount of concrete to construct the project's superstructure to the specified elevation. On summary judgment, the defendant construction manager argued that the economic loss rule precluded the plaintiff's action, and the trial court granted the motion. The court of appeals reversed, and the Supreme Court of Tennessee affirmed, noting: Id. at 430-31 (emphasis added). Similarly, in the present case, as to the negligent misrepresentation claim, the state does not seek to recover economic losses stemming from a claim that USX was negligent in designing or manufacturing the steel. Rather, the recovery sought stems from a claim that USX did not exercise reasonable care or competence in obtaining or communicating information for the guidance of the state in its decision regarding the steel to be used in the construction of the stadium, namely, that weathering steel was appropriate for use in the stadium project, given the proposed location for the stadium and the weather conditions of the proposed location. In other words, relative to the negligent misrepresentation claim, the state seeks damages not for USX's acts or omissions in its design or manufacture of weathering steel, but for USX's actions and/or omissions in its promotions, recommendations, investigations and/or opinions regarding the use of weathering steel. Second, both section 552, and this court in Chun, recognize that pecuniary losses are recoverable in a claim for negligent misrepresentation. Section 552(1) expressly states that liability will attach "for pecuniary loss caused ... by [plaintiff's] justifiable reliance upon the information[.]" See also Restatement (Second) of Torts § 311, comment a (1965) (distinguishing section 552, noting that "[t]he rule stated in this Section represents a somewhat broader liability than the rules stated as to liability for pecuniary loss resulting from negligent misrepresentation, stated in § 552, to which reference should be made for comparison" (emphasis added)). Citing section 552, the Chun court affirmed the award of "out-of-pocket expenses," including the purchasers' cash down payment, mortgage payments, financing charges, real property and gross income taxes, insurance expenses, and the expenses associated with obtaining plans, specifications, and a permit for a new building. These points have also been recognized in other jurisdictions. For example, in McCarthy, Lebit, Crystal &amp; Haiman Co., L.P.A. v. First Union Management, 87 Ohio App.3d 613, 622 N.E.2d 1093 (1993), the Ohio Court of Appeals noted: Id. 622 N.E.2d at 1105-06 (ellipses in original). Similarly, in Vermont Plastics, Inc. v. Brine, Inc., 824 F. Supp. 444 (D.Vt.1993), the United States District Court for the District of Vermont, applying Vermont law, which recognizes section 552, rejected an argument that purely economic damages are not recoverable for negligent misrepresentation and noted: Id. at 451-52 (footnote omitted). See also Advanced Drainage Systems, Inc. v. Lowman, 210 Ga.App. 731, 437 S.E.2d 604, 607 (1993) (recognizing section 552 as an "exception" to the economic loss rule); Moorman Mfg. Co. v. National Tank Co., 91 Ill. 2d 69, 61 Ill.Dec. 746, 435 N.E.2d 443, 452 (1982) (recognizing that economic loss is recoverable for intentional and negligent misrepresentation, but not innocent misrepresentation). Finally, one of the principal considerations enunciated by courts adopting the economic loss rule is that permitting recovery of economic losses in a claim based on products liability would undermine provisions of the Uniform Commercial Code (UCC). However, such consideration is not applicable to actions based on negligent misrepresentation because the UCC itself contemplates actions based on misrepresentation. The logic and policy considerations supporting the adoption of the economic loss rule in the products liability context are compelling. As the court in East River noted: 476 U.S. at 866, 106 S. Ct. at 2299-2300 (emphasis added). Representative of the reasoning utilized by courts adopting the economic loss rule are the comments of the Oklahoma Supreme Court in Waggoner v. Town &amp; Country Mobile Homes, Inc., 808 P.2d 649 (Okla.1990). Explaining why economic damages should not be recoverable in a products liability action, the Waggoner court first delineated the distinction between the type of damage sought to be remedied by products liability and the type of damage sought to be remedied by the UCC: Id. at 652 (citations, internal quotation marks, and footnotes omitted). Analyzing why, in the case of damage only to the product itself, remedies in products liability and contract should not overlap, the Waggoner court stated: Id. at 652-53 (citations omitted and emphasis added). However, although this reasoning is sound in the case of the overlap between products liability and contractin that actions sounding in products liability were not intended to remedy purely pecuniary economic losses which are already recoverable in contractthe same is not true of available damages in actions founded on negligent misrepresentation. As previously discussed, section 552 *307 expressly contemplates the recovery of purely pecuniary losses in an action based on negligent misrepresentation. Moreover, and perhaps most importantly, the UCC itself contemplates actions based on misrepresentation. Section 1-103 of Hawai`i's version of the UCC expressly provides that HRS § 490:1-103 (1993) (emphasis added). Similarly, section 2-721 provides: HRS § 490:2-721 (1993) (emphasis added). See also Coastal Group v. Dryvit Systems, 274 N.J.Super. 171, 643 A.2d 649, 652 (App. Div.1994) (holding trial court erred in holding that economic loss rule precluded plaintiff's claim for fraud and misrepresentation, citing sections 1-103 and 2-721 of New Jersey's version of the UCC). For the foregoing reasons, we hold that: (1) the economic loss rule applies to bar recovery of pure economic loss in actions based on products liability; (2) the economic loss rule does not bar actions based on negligent misrepresentation or fraud; and (3) the circuit court therefore erred in dismissing the state's negligent misrepresentation claim against USX based on the economic loss rule. Alternatively, USX argues that, even if the economic loss rule does not operate to bar the state's negligent misrepresentation claim, actions based on section 552 should be limited to parties whose business is to supply information for the guidance of others. We disagree for three reasons. First, section 552 does not expressly provide that its provisions apply only to those "who are in the business of supplying information for the guidance of others." Section 552(1) instead requires only that the provider of information supply information "in the course of his [or her] business, profession or employment," or supply information in connection with "any other transaction in which he [or she] has a pecuniary interest." As the commentary to section 552 notes, the salient characteristic required of the defendant supplier of information is that the defendant have a pecuniary interest in the supplying of the information; a showing that the information was supplied in the course of the defendant's business, profession, or employment is sufficient to establish that the defendant has a pecuniary interest in the transaction, but it is only one way of meeting the requirement. The commentary to section 552(1) provides that: Restatement (Second) of Torts § 552, comments c and d (1977). In other words, the central principle operating within section 552 is that the defendant supplier of information must have a pecuniary interest in the transaction or context in which the information is supplied in order to merit the imposition of a duty of care in obtaining and communicating the information. To this end, section 552 sets out two methods of meeting this requirement. The information may be supplied by one whose business it is to provide informationsuch as accountants, attorneys or title companies, who provide information for a price, and for the guidance of others in their transactions with third parties. This means of meeting the "pecuniary interest" requirement is contemplated by the "in the course of his [or her] business, profession or employment" language of section 552. However, section 552 also contemplates the meeting of the "pecuniary interest" requirement by a second, simpler means: the defendant otherwise has an actual pecuniary interest in the transaction in which he or she supplies the information. Hence the provision for applicability "in any other transaction in which [the defendant] has a pecuniary interest." The "in the course of his [or her] business, profession or employment" means satisfies the "pecuniary interest" requirement by a presumption that, if a defendant supplier of information supplies information in the course of his or her business, profession, or employment, the defendant necessarily has a pecuniary interest in the transaction. By contrast, the "other transaction in which [the defendant] has a pecuniary interest" means is satisfied simply when the defendant actually has a pecuniary interest in the transaction. By these two means, section 552 effectively collects within its scope all suppliers of information who possess a pecuniary interest in a transaction in which they supply information for the guidance of others, whether they profit directly from providing the information, or whether they profit indirectly, by the consummation of a transaction in which they have a direct pecuniary interest. Therefore, the "in the course of his [or her] business, profession or employment" language does not constitute an implicit requirement that all defendant suppliers of information be in the business of supplying information. They must merely profit by supplying the information. To read section 552 as requiring all defendant suppliers of information to be in the business of supplying information would effectively render superfluous the phrase "or in any other transaction in which [the defendant] has a pecuniary interest" and imprudently ignore the focus emphasized by the commentary. Second, the reading of section 552 urged by USX finds support in only one jurisdiction, and the development of the reading of section 552 in that jurisdiction does not indicate a cogent rationale supporting the reading. As previously indicated, in Moorman, the Illinois Supreme Court held that the economic loss doctrine does not apply to actions based on intentional and negligent *309 misrepresentation. The Moorman court, however, specifically held that: Moorman, 61 Ill.Dec. 746, 435 N.E.2d at 452 (emphasis added). Although Rozny v. Marnulthe case relied upon by the Moorman court for the proposition that a cause of action founded on negligent misrepresentation that is exempt from the economic loss rule is limited to those situations where the defendant is in the business of supplying informationconcerned the misrepresentations of a surveyor, who could be considered to be in the business of supplying information for the guidance of others, Rozny does not explicitly hold that the applicability of section 552 is limited to those in the business of supplying information. Rozny does not even speak to the status of the defendant and instead holds that: 250 N.E.2d at 661-63 (citations omitted). Moorman, therefore, appears to represent the first injection of an "in the business of supplying information" requirement into section 552 and does not provide any cogent analysis explaining why it has done so. A second, apparently independent rationale has also been discussed in Illinois decisions regarding the "in the business of supplying information" requirement. In Penrod v. Merrill Lynch, Pierce, Fenner &amp; Smith, 68 Ill.App.3d 75, 24 Ill.Dec. 464, 385 N.E.2d 376 (1979), the Appellate Court of Illinois relied upon the Pennsylvania Supreme Court's reasoning in Renn v. Provident Trust Co., 328 Pa. 481, 196 A. 8 (1938), and concluded that, "[i]f it is one's business to supply information and it that information is negligently supplied, especially where the person supplying the information knows that some action will be influenced by the information, the supplier of the information can be held liable for the resultant damages." Id. 24 Ill.Dec. at 469, 385 N.E.2d at 381 (emphasis added). The Renn court rationale, however, relied on section 552 of the *310 first Restatement of Torts, which provided in pertinent part: Restatement (First) of Torts § 552 (1938). Noticeably absent from the First Restatement's version of section 552 is the language "or in any other transaction in which [the defendant] has a pecuniary interest" immediately following the phrase "in the course of his [or her] business or profession," as in the Second Restatement's version of section 552. Subsequent Illinois decisions, both pre- and post-Second Restatement, have continued to apply this requirement gleaned from the First Restatement's version of section 552. See, e.g., Guaranty Bank and Trust Company v. Reyna, 51 Ill.App.2d 412, 201 N.E.2d 144 (1964); Citizens Savings and Loan Ass'n v. Fischer, 67 Ill.App.2d 315, 214 N.E.2d 612 (1966); Penrod, 24 Ill.Dec. 464, 385 N.E.2d at 381. Nor have the Illinois decisions since Penrod and Moorman offered any analysis of the "in the business of supplying information" requirement, or questioned the continuing efficacy of the requirement in view of the advent of the Second Restatement's version of section 552. Representative of these decisions is Black, Jackson &amp; Simmons Ins. Brokerage, Inc. v. International Business Machines Corp., 109 Ill.App.3d 132, 64 Ill. Dec. 730, 440 N.E.2d 282 (1982), where the court held: Id. 64 Ill.Dec. at 731-32, 440 N.E.2d at 283-84 (underlined emphases in original, bold emphasis added, and some citations omitted). Neither rationale, therefore, whether based on Moorman or Penrod, is particularly compelling, and we decline to apply them to our interpretation of section 552. Finally, although the rationale utilized by the United States District Court for the Northern District of Illinois in its National Can decision, cited in Penrod, that section 552 applies only "in situations where information was supplied that damaged a plaintiff in its relations with third parties[,]" 505 F. Supp. at 150 (emphasis in original), is differently worded than the rationale utilized by the Illinois state courts, it is equally flawed. The National Can decision provides in pertinent part: 505 F. Supp. at 150 (emphasis in original). This rationale, however, is directly controverted by illustration 4 to section 552, which provides that: Restatement (Second) of Torts § 552, comment on subsection (2), illustration 4 (1977). As is evident from the illustration, wherein A is liable to B, section 552 was intended to apply to direct transactions between sellers and purchasers as well as those involving third parties. Although it may be true that the bulk of decisions stem from factual situations involving damage stemming from a recipient of information's transactions with third parties other than the provider of information, this alone does not compel a narrow reading of section 552 that limits its applicability solely to such situations or precludes its applicability to providers of information who make misrepresentations to parties to transactions in which the providers of information are involved. For the foregoing reasons, we hold that section 552 is not limited solely to: (1) suppliers of information who are in the business of *312 supplying information; and (2) situations involving damage stemming from a recipient of information's transactions with third parties other than the provider of information. The state raises three points of error regarding the trial court's instructions to the jury. The state asserts that the trial court erroneously: (1) instructed the jury regarding the definition of "unfair" and "deceptive" acts or practices associated with its claim based on HRS chapter 480; (2) declined to give its instruction regarding the absence of a privity requirement associated with a HRS chapter 480 claim; and (3) gave an unqualified instruction indicating that "sellers may promote the quality of their goods." We discuss each in turn. It is well settled that: Craft v. Peebles, 78 Hawai`i 287, 302, 893 P.2d 138, 153 (1995). The trial court read three instructions to the jury regarding the state's claim of unfair or deceptive acts or practices in the conduct of trade. The court's instruction no. 36 provided: The court's special instruction no. 18, read immediately after instruction no. 36, provided that "[a] practice or act is unfair or deceptive when the practice or act is immoral, unethical, oppressive, or unscrupulous. Proof of negligent misrepresentation alone does not establish a claim for unfair or deceptive trade practices or acts." The court's instruction no. 37, read immediately thereafter, provided that "[a] deceptive trade practice is a practice which has the capacity or tendency to mislead consumers." The state first argues that the court's special instruction no. 18 erroneously stated the law in that it defined both "unfair" and "deceptive" acts as being "immoral, unethical, oppressive, or unscrupulous." The state contends that while an unfair act is properly defined as one that is "immoral, unethical, oppressive, or unscrupulous," a deceptive act need not fit that definition, but need merely have the capacity or tendency to mislead or deceive. By collectively defining the two terms in the same definition, the state asserts, the trial court erroneously stated the law of unfair or deceptive acts or practices in conduct of trade or commerce and misled the jury by effectively requiring the jury to find that USX's conduct was immoral, unethical, oppressive, or unscrupulous, when all it actually needed to find was that USX's conduct had the capacity or tendency to mislead. We agree. In Eastern Star, Inc. v. Union Building Materials Corp., 6 Haw.App. 125, 712 P.2d *313 1148 (1985), the Intermediate Court of Appeals (ICA) noted that: 6 Haw.App. at 132-33, 712 P.2d at 1154 (footnote omitted). As is evident from the federal definitions properly adopted by the ICA in Rosa and Eastern Star, "deceptive" acts or practices are distinct from "unfair" acts or practices, both in how they are defined and in the standard by which they are proved. As the state correctly notes, read in conjunction with instruction no. 37, special instruction no. 18 incorrectly suggested to the jury that, in order for an act to be a deceptive act or practice, it must not only have the capacity to mislead, but must also be "immoral, unethical, oppressive, or unscrupulous." In other words, by defining "unfair" and "deceptive" acts conjunctively, the trial court effectivelyand improperly imposed upon the state the burden of proving that USX's actions were "immoral, unethical, oppressive, or unscrupulous," when all it needed to prove was that USX's actions had the capacity to mislead. In view of our conclusion that the trial court erroneously instructed the jury regarding the law of unfair or deceptive acts or practices in the conduct of trade or commerce, we must vacate the judgment in favor of USX on the HRS chapter 480 claim and remand for a new trial. As we have stated on numerous occasions, "erroneous instructions are presumptively harmful and are a ground for reversal unless it affirmatively appears from the record as a whole that the error was not prejudicial." Quedding v. Arisumi Brothers, Inc., 66 Haw. 335, 340, 661 P.2d 706, 710 (1983) (brackets omitted) (quoting Turner v. Willis, 59 Haw. 319, 326, 582 P.2d 710, 715 (1978)); see also State v. Holbron, 80 Hawai`i 27, 32, 904 P.2d 912, 917 (1995) (quoting same). Because the instructions erroneously stated the standard by which the jury was to find liability under HRS chapter 480, and because the jury found USX not liable, it is impossible to determine, on appellate review, whether, on the one hand, the jury properly took into consideration the distinction between "unfair" and "deceptive" acts and nevertheless found no liability under either definition and standard, or whether, on the other, the jury was misled by the erroneous instructions and made its findings regarding the HRS chapter 480 claim in reliance on that misconception. Accordingly, it is also impossible to reach an affirmative conclusion on appellate review in the present case that the error in the manner in which the jury was instructed was not prejudicial. The state next argues that the trial court erred in refusing to give its instruction regarding the lack of a privity requirement in a claim for unfair or deceptive acts or practices in the conduct of trade or commerce in violation of HRS chapter 480. The state's proposed instruction provided that "[n]o contract between U.S. Steel and the State of Hawaii is necessary to make U.S. Steel liable for unfair and deceptive trade practices." The state contends that the trial court's refusal to give the instruction was prejudicial because USX emphasized in its opening statements that there was no contractual relationship or privity between USX and the state. We disagree. We have previously noted that "[i]t is prejudicial error for the court to refuse to give an instruction relevant under the evidence which correctly states the law unless the point is adequately and fully covered by other instructions given by the court." Agee v. Kahului Trucking &amp; Storage, Inc., 67 Haw. 365, 369, 688 P.2d 256, 259 (1984) (citation omitted). Although the state is ostensibly correct that the instruction correctly stated the law, we hold, for two reasons, that the principle communicated in the state's proposed instruction is adequately and fully covered by other instructions given by the court. First, the court's instruction no. 36 was a complete and correct statement of the elements of a claim for unfair or deceptive acts or practices in the conduct of any trade or commerce. Instruction no. 36 specifically delineated what the jury needed to find in order to render USX liable and did not list the presence of a contract, or privity of contract, between USX and the state as an element. The court was not obliged to do more. To hold that the court's refusal to give the state's proposed instruction in the present case was error effectively would require trial courts to give an instruction regarding what is not required regarding the elements of a claim.[5] Second, the state's claim of prejudice stemming from the court's failure to give its proposed instruction, based on USX's emphasis, during its opening statements, on the fact that USX did not have a contract with the state, nor was USX ever in privity of contract with the state, is addressed by other instructions given by the court. The court's instruction no. 4 provided that "[s]tatements, arguments, and remarks of counsel are intended to help you in understanding the evidence and in applying the law, but they are not evidence. You should disregard any such utterance that has no basis in the evidence." Moreover, the claimed "emphasis" in USX's opening statements of lack of privity was mild at best. The state points to the following passages in USX's opening statements: (State's emphasis.) Contrary to the state's position, at least based on the above-quoted passages from USX's opening statements, it *315 appears that USX's theory of defense was the lack of any contact between itself and the state, and not specifically the lack of a contract or privity of contract; the reference to the lack of a contract is subsumed within the overarching theory of the lack of any connection whatsoever. USX was entitled to articulate its theory of the case and emphasize the lack of any connection at all between itself and the state. Moreover, in view of the fact that, at the time USX made its opening statements, the state had not yet withdrawn its claim of breach of warranties, to which the issue of privity was relevant, USX was entitled to assert in its opening statement that the state did not have a contract with USX and that the state was not in privity with USX. Additionally, we note that USX's comments during its opening statements did not constitute affirmative misstatements of the law that would carry the potential of misleading the jury; our holding regarding a trial court's refusal of an instruction in order to clarify or counteract the effect of such misleading comments would likely be different under such circumstances. We therefore hold that the trial court did not err in refusing to give the state's proposed instruction regarding the lack of a privity of contract requirement associated with an HRS chapter 480 claim. The state next asserts that the trial court erred in giving instruction no. 44, which provided that "[s]ellers may promote the quality of their goods." The state contends that "the unqualified and unadorned blanket statement that `sellers may promote the quality of their goods' implies that there are no limits whatsoever to a seller's ability to promote the quality of its goods, including, for example, outright misrepresentation and deception, which are plainly not allowed." Instead, the state argues, the instruction should have contained some reference to "puffing" or general sales talk commending a seller's goods to convey to the jury that a seller's right to promote its goods is not unlimited. USX retorts by stating that the instruction is a correct statement of the law and that, viewed in the full context of the other instructions read to the jury regarding unfair or deceptive acts or practices in the conduct of any trade or commerce, qualifications regarding "puffing" or sales talk would have been redundant and unnecessary. We agree. The court read the following instruction to the jury: Read in isolation, the state's claim that the unqualified statement that "sellers may promote the quality of their goods" is prejudicial may have minimal merit; however, read in context, as the court must, see Craft, 78 Hawai`i at 302, 893 P.2d at 153, the instructions regarding a seller's ability to promote the quality of its goods was qualified by the court's other instructions regarding the state's HRS chapter 480 claim. Therefore, in view of: (1) our assessment that the amount of potential prejudice, stemming from the challenged instruction, is minimal, even if considered in isolation; and (2) the fact that the challenged instruction was not read in isolation, and any prejudicial effect that the statement that "sellers may promote the quality of their goods" may have *316 had was dissipated when placed in context,[6] we hold that, when read and considered as a whole, the instruction that "sellers may promote the quality of their goods" was not prejudicially insufficient, erroneous, inconsistent or misleading. Finally, the state argues that the trial court erroneously denied its motion for new trial based on alleged discovery abuse by USX. The state asserts that USX continually failed to comply with its discovery obligations by claiming to have turned over all documents requested when the evidence showed that USX had not made a good faith diligent effort to find the requested documents and that documents that were produced later proved that USX had withheld certain documents. USX retorts by asserting that the trial court properly denied the state's motion for new trial because: (1) the state's objections to any impropriety, if any, were untimely; (2) the state has not demonstrated any prejudice; and (3) USX did not violate its discovery obligations. We affirm the trial court's denial of the state's motion for new trial based on the untimeliness of the state's objections. Carr v. Strode, 79 Hawai`i 475, 488, 904 P.2d 489, 502 (1995). Both before and during the trial, the state asserted that USX was not fulfilling its duties to produce documents. In particular, on May 3, 1993, the state filed a motion for sanctions against USX for failure to comply with document production requirements, asserting that USX had wilfully failed to produce documents pursuant to the state's requests for discovery. On May 6, 1993, the trial court orally granted in part and denied in part the state's motion, ordering that USX produce all documents relevant to all issues in the case and barring USX from referring to and/or introducing into evidence at trial any document that it had failed to produce in response to the state's discovery requests, as well as prohibiting USX from relying on or commenting on any alleged lack of proper foundation or context or any such partial or *317 incomplete document, should it be introduced at trial. Subsequently, on August 13, 1993, during USX's case in chief, one of USX's witnesses, Robert Schmitt, attempted to use four technical reports that fell within the scope of the state's discovery requests, but had not been produced by USX. The state objected to Schmitt's reference to or use of these reports, and the court sustained the state's objection, ruling that USX "failed to produce in identical form a document or documents which were subject of discovery before trial" and that USX "knew or had reason to know that the differences in the documents were material." Thereafter, Ronald Flucker, a former USX employee, contacted counsel for the state, and, on September 1, 1993, provided the state with twenty-two items of internal USX correspondence dated in 1975 that had either not been produced by USX or apparently had been produced by USX in a different, less "questionable" form. The state argues that these developments, revealed during trial, clearly demonstrate that USX was derelict in its discovery obligations and that, even if the documents learned of during trial did not aid the state's case to the point where this court could conclude that the trial's result would have been different had the state been able to incorporate the evidence in its case, USX's proven discovery violations strongly suggest that USX had withheld other evidence, of which the state is still unaware, favorable to the state's case. The state, however, did not attempt to call Flucker as a witness in its rebuttal case, nor did it attempt to bring to the court's attention in any fashion the documents provided by Flucker. Instead, it waited until after the jury returned an adverse verdict and then moved for a new trial based on USX's misconduct. The trial court denied the motion, holding that the state USX argues that, even if it could be found to have violated its discovery obligations, the state's objections to the "new" evidencethe documents sought to be used by Schmitt and the documents provided the state by Fluckerwere untimely. We agree. The state does not dispute that it did not object or otherwise attempt to seek relief prior to the jury's deliberations, whether in the form of a motion for a mistrial, for more discovery, or for an investigation into the extent of USX's alleged nondisclosure. Instead, it argues that USX's proven failure to disclose requested documents was a "gross injustice" that deprived the state of its ability to adequately prepare and present its case. The state contends that it was effectively unable to have USX's misconduct "cured" prior to the jury's deliberations because: (1) it had already presented its case; (2) a mistrial would have required the state to start anew, incurring extensive litigation expenses, risking the loss of key witnesses, and giving USX a second chance to prepare a better defense; and (3) even if additional discovery had been allowed, any new evidence would have had to have been presented out of order. Each of the state's reasons, however, ultimately amounts to strategic decisions that should not provide it any relief from its obligation to preserve its objections to USX's misconduct, so as to provide a viable basis for seeking the grant of a new trial. As the ICA has noted in an analogous situation: Leyson v. Steuermann, 5 Haw.App. 504, 510-11, 705 P.2d 37, 43 (1985) (emphases added), overruled on other grounds, Bernard v. Char, 79 Hawai`i 362, 903 P.2d 667 (1995). We therefore hold that the trial court did not abuse its discretion by denying the state's motion for new trial and for sanctions based on USX's discovery violations. USX argues on its cross-appeal that the trial court erred in denying its motion for attorneys' fees on the basis that HRS § 607-14[7] does not apply to the state. However, because we vacate the judgment in favor of USX and remand for further proceedings, we need not reach USX's arguments regarding the propriety of the trial court's denial of USX's motion for attorneys' fees. The obligation to pay attorneys' fees under HRS § 607-14 applies only to "losing parties," and, in view of our remand of this case, the state cannot be considered the "losing party." See Sapp v. Wong, 62 Haw. 34, 42, 609 P.2d 137, 142 (1980) ("[I]n view of what we have said, we must reverse this case on appeal, vacate the judgment and remand for a new trial. Hence, appellants cannot at this time be considered to be the losing parties, even if we assume that appellant's amended complaint is an action in the nature of assumpsit."). For the foregoing reasons, the circuit court's order granting USX's motion to dismiss the state's negligent misrepresentation claim and the judgment in favor of USX on the state's claim for unfair or deceptive acts or practices in the conduct of any trade or commerce are vacated, and the case is remanded for further proceedings. The judgment of the circuit court is otherwise affirmed. [1] This action was originally instituted on behalf of the state of Hawai`i by then-state attorney general Tany Hong on June 22, 1982. Over the fourteen-year life of the case, Hong was succeeded by several other attorneys general. Pursuant to Hawai`i Rules of Appellate Procedure Rule 43(c)(1), the current attorney general, Margery S. Bronster, has been substituted automatically for Hong as representing the plaintiff in the present case. [2] CLA was subsequently known as "the Luckman Partnership." [3] The Chun court actually relied upon the 1966 Tentative Draft No. 12 of section 552. The version relied upon by the Chun court, however, is identical to the version as ultimately published in 1977, as quoted infra. [4] HRS § 480-3 (1993) is identical to the 1984 version cited to in Eastern Star. [5] We emphasize, however, that the converse proposition is not true. We do not mean to imply that it is necessarily reversible error for a trial court to give an instruction on what is not required regarding the elements of a claim. See, e.g., State v. Mata, 71 Haw. 319, 329, 789 P.2d 1122, 1127 (1990) (approving of instruction in case involving charges of driving under the influence of intoxicating liquor which provided in pertinent part that "[t]he State need not prove that the defendant actually drove in an unsafe or erratic manner or that the defendant caused an accident. It must prove only a diminished capacity to operate safely."). [6] We are aware that the "context" upon which we base our conclusion that the instruction is proper includes the erroneous instruction that "a practice or act is unfair or deceptive when the practice or act is immoral, unethical, oppressive, or unscrupulous[,]" see section III.A.2.b., supra. Our holding, however, is premised both on our assessment of the potential prejudice stemming from the "sellers may promote the quality of their goods" instruction as being minimal as well as the alleviating effects of the context in which the purportedly harmful instruction was read. Moreover, the state's argument draws a large amount of its persuasiveness from its contention, as previously discussed, that the challenged instruction "implies that there are no limits whatsoever to a seller's ability to promote the quality of its goods, including, for example, outright misrepresentation and deception, which are plainly not allowed." In our estimation, this implication is defused by the context in which the instruction was read, despite the presence of an otherwise erroneous instruction regarding the elements of an HRS chapter 480 claim, simply by virtue of the presence of a contrary point of view. We emphasize that our holding regarding the "sellers may promote the quality of their goods" instruction does not in any way diminish our holding regarding the "practice or act is unfair or deceptive when the practice or act is immoral, unethical, oppressive, or unscrupulous" instruction. [7] HRS § 607-14 (1993) provides in pertinent part: Attorneys' fees in actions in the nature of assumpsit, etc. In all the courts, in all actions in the nature of assumpsit and in all actions on a promissory note or other contract in writing that provides for an attorney's fee, there shall be taxed as attorneys' fees, to be paid by the losing party and to be included in the sum for which execution may issue, a fee that the court determines to be reasonable; provided that the attorney representing the prevailing party shall submit to the court an affidavit stating the amount of time the attorney spent on the action and the amount of time the attorney is likely to spend to obtain a final written judgment, or, if the fee is not based on an hourly rate, the amount of the agreed upon fee. The court shall then tax attorneys' fees, which the court determines to be reasonable, to be paid by the losing party; provided that this amount shall not exceed twenty-five percent of the judgment. .... The above fees provided for by this section shall be assessed on the amount of the judgment exclusive of costs and all attorneys' fees obtained by the plaintiff, and upon the amount sued for if the defendant obtains judgment.