Opinion ID: 1268078
Heading Depth: 1
Heading Rank: 3

Heading: The sublease override; whose testimony should be believed?

Text: One area in which there is conflicting evidence concerns the sublease rent, which was in excess of the rent reserved in the Bishop Estate lease. Plaintiffs were awarded a share in this override. However, the court did not take into account the negotiations after March 14, 1966. It found these negotiations looked only to a proposed amendment and did not culminate in any agreement, but made no findings as to the particulars of the proposed amendment. In fact, no agreement had been reached by the March date, and the negotiations on and after April 26, 1966 were part of the main negotiations. Exclusion from consideration by the court of the evidence as to what occurred in the later negotiations was error and invalidated the court's findings. Rowe v. General Motors Corporation, 457 F.2d 348, 356, note 15 (5th Cir.1972); Ritter v. Morton, 513 F.2d 942, 949 (9th Cir.1975); Grigsby v. Coastal Marine Service of Texas, Inc., 412 F.2d 1011, 1042 (5th Cir.1969). Yee and Yamada testified that Shinn and Kashiwa were told about the sublease at the April 26, 1966 meeting, and also were informed that Shinn was not to participate in it, to which Kashiwa, Shinn's attorney, agreed. The discussion specifically included the override, according to this evidence. The following is from Yee's testimony: Q. At any time, did you tell Dr. Shinn or Mr. Kashiwa of these override provisions? A. That is called a sandwich rent position. On the first meeting on April 26 when Dr. Shinn, Mr. Kashiwa, Harold Yamada, and I were present, I think Genro Kashiwa asked me whether there was a sublease, and I indicated there was, and whether there was a sandwich rent provision, and I said there was. Then he says, Is this involved in this development together with Dr. Shinn? And I said, No, this is not involved. This sublease and sandwich rent is not included. The only part that Dr. Shinn has a portion of would be that part where the profit would be from the sales of the apartment units. This is in the presence of these other three men. ...... A. May I answer further on the first question. These three other men were there, and this is why in the initial draft of the Yamada agreement and subsequently the Kashiwa addendum no mention was made of the sandwich rent provision. Q. There is no mention of the sandwich rent in the Yamada agreement or in the Kashiwa amendment. A. That's correct. And that's because of the agreement made at that time. Certainly, if there were such an agreement, both of these documents would so indicate this. Shinn and Kashiwa denied knowledge of the override. If this is believed it would explain why Exhibit 4 did not take issue with the description in Exhibit 3 of the profits in which Shinn was to share, namely the profits received by Yee from Condominium Hawaii, Inc., from the sale of the apartment units in the project. It would clear the way for reliance on a constructive trust in all joint venture assets held in Yee's name. On the other hand, if Yee and Yamada are to be believed, the most that Shinn could receive would be a share in the profits from the sale of the apartments. This court cannot resolve the question.