Opinion ID: 2826923
Heading Depth: 3
Heading Rank: 2

Heading: Post-Award Demand Letters and Supplemental

Text: Disclosures Two weeks after the Partial Award was issued, Damon Key sent a letter to DPR dated October 29, 2010 requesting updated disclosure details . . . including, but not limited to, any and all arbitration or mediation matters involving attorneys from the law firms of either [Carlsmith Ball] or [Starn O’Toole] . . . which [the Arbitrator] has presided over since January 1, 2009 . . . as well as any matter for which [the Arbitrator] is currently being considered or has been contacted to serve as a potential arbitrator or mediator. Four days later, Oshiro and Kupchak of Damon Key sent another letter to DPR, demanding the Arbitrator’s immediate disqualification on the basis of Carlsmith Ball’s alleged representation of the Arbitrator and his nondisclosure of that representation. The letter asserted that: It has just come to our attention that [the Arbitrator] has had an undisclosed, long standing professional relationship with opposing counsel . . . . We have reason to understand that [the Arbitrator] was represented by Carlsmith Ball, including an attorney working on this case, on at least seven separate occasions over the last ten years. One of these cases was a matter that was ongoing . . . during the term of the parties’ recent arbitration proceedings. This allegation related to Carlsmith Ball’s representation of the QLT on unrelated real estate and lease matters on the island of Hawai#i. The Arbitrator has served as one of three trustees of the QLT since 2002, and along with the other two trustees, the Arbitrator’s name appears as trustee on lawsuits involving the QLT. On November 4, 2010, Manaut of Carlsmith Ball sent a letter to DPR that characterized Nordic’s request for updated disclosure 8  FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER  details as “an improper fishing expedition[,]” and asserted that Nordic “never once raised an issue or questioned anything about the sufficiency of any disclosures” prior to the issuance of the Partial Award. Damon Key sent a responsive letter to DPR on the same day, stating neither the Arbitrator nor Manaut had disclosed seven cases in which Carlsmith Ball allegedly represented the Arbitrator, and demanding the Arbitrator’s immediate disqualification. On November 9, 2010, Pavey of Starn O’Toole sent a letter to DPR challenging Nordic counsel’s demand for disqualification. On the same day, Pavey also sent a letter to Oshiro requesting information on the timing and circumstances surrounding discovery of the facts underlying Nordic’s claim for disqualification. On November 11, 2010, the Arbitrator provided a post-award supplemental disclosure that detailed his professional and volunteer activities: As previously disclosed, I have served as a mediator and an arbitrator in matters in which parties therein were represented by the firms appearing in this arbitration. Though I cannot recall any matter involving [Owner] or LPIHGC, LLC, I do recall serving as an arbitrator in a matter in which I determined that Nordic was the prevailing party. Further, at the time when I was informed that I was selected as an arbitrator in this matter, I was serving as a neutral in cases in which the Damon Key firm, Carlsmith Ball, and the Starn O’Toole firm represented certain parties therein. During the year and a half course of this arbitration, I served in an additional matter in which Lane Hornfeck of the Starn O’Toole firm represented a party. Sometime during this period, Robert Triantos of Carlsmith Ball entered an appearance on behalf of an additional party in an 9  FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER  arbitration which commenced in 2008. I also, during this period, served as a mediator in a matter in which Carlsmith Ball was a party. As one of the three Trustees for the [QLT], I hereby disclose that the following are lawyers and law firms retained by the Trust since 2002, when I commenced to serve as a Trustee. The list is as follows: Ashford & Wriston, Cades Schutte Fleming & Wright, Case Bigelow & Lombardi, Carlsmith Ball, Dean Nagamine, Glenn Kimura, John J. Baker, Lloyd Van De Car, Patricia Brady, Imanaka Kudo & Fujimoto, Leighton Wong, Lori M. Ohinata, Suemori & Aipa, Pitluck Kido Stone & Aipa, Watanabe Ing Kawashima & Komeiji, Wesley K.C. Lau, Robert F. Miller, Susan Ichinose, Dwyer Schraff Meyer et al., Jewell & Krueger, Matsubara Lee & Kotake, Rinesmith & Sekeguchi [sic], Torkildson, Katz Fonseca, Godbey Griffiths Reiss Chong, Moseley Biehl Tsugawa et al., Patricia Brady, Tsukazaki Yeh & Moore, O'Conner Playdon & Guben, Paul Johnson Park & Niles, and Raymond Zeason. As a Trustee, I have no personal role in the selection or appointment of attorneys that perform legal services for the [QLT]. As one of the three trustees for the [A] Trusts, I represent that the [A] Trusts have retained legal services from the firm of [B], and attorneys [D], and [E]. I also disclose that I believe Mr. Michael Walsh, Vice President of the [QLT’s] Endowment Group, is []Kupchak’s brother-in-law. As a member of [F]’s Board of [G], I have been informed and been permitted to disclose that our institution, at various times in the past, has retained the legal services of [I], [J], and [K]. As a member of the Board of [L] and [M], . . ., I have recently been informed that [N] have been referred to the following attorneys for services: [O], [P], [Q], [R], and [S]. I have been informed by management of the [QLT] that in recent matters, members of Carlsmith Ball and the Bays Deaver firm have represented parties who have opposed the interests of the [QLT]. . . . . On November 15, 2010, Damon Key sent a letter to DPR to request further clarification on the matters listed in the supplemental disclosure. On November 18, 2010, Pavey, O’Toole, and Manaut sent a 10  FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER  letter to DPR opposing Nordic’s disqualification demand and objecting to a stay of the arbitration, alleging that the “demand for disqualification is insufficient on its face because [Nordic] failed to even allege, let alone prove, evident partiality on the part of [the Arbitrator]” and the Arbitrator had no conflict based upon Carlsmith Ball’s representation of the QLT. Appended to the letter were declarations of Manaut and Edmund W.K. Haitsuka, the Carlsmith Ball attorney handling the Kona land matters for the QLT. Haitsuka declared that he had not had any ex parte communications with the Arbitrator about any matter prior to, during, or after the arbitration. He also stated that Carlsmith Ball had not represented the Arbitrator in his individual capacity, and that he had never communicated with the Arbitrator on any trustee issues or anything related to the arbitration, and that he had only spoken to the QLT’s executive officers and managers. Manaut declared that he had never had any communication with the Arbitrator concerning the QLT, ex parte or otherwise, and that he was not aware that the Arbitrator was a QLT trustee who Carlsmith Ball represented on land matters in Kona in his representative capacity. By email dated November 18, 2010, DPR further disclosed that the Arbitrator: 11  FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER  served as a Mediator in a case where the Damon Key firm represented a party. Counsel for Damon Key was Mark Murakami, Esq. Counsel for the parties mutually selected [the Arbitrator] in 2008, the mediation was held in February, 2009. DPR charged its standard hourly rate of $350/hour. This matter was included in the [initial] disclosure since the final invoice was issued to counsel on March 17,2009. . . . served as an Arbitrator in a case where John Sopuch, Esq. of the Starn O’Toole firm represented a party. Counsel for the parties mutually selected [the Arbitrator] in 2008. The Award was issued in February, 2009, and the final invoice was issued on March 13, 2009. DPR charged its standard hourly rate of $350/hour. . . . served as a Mediator in a matter where Lane Hornfeck of the Starn O’Toole firm represented a party. Counsel for the parties mutually selected [the Arbitrator] in June 2009, and the matter closed in August 2009. DPR charged its standard hourly rate of $350/hour. . . . served as a Mediator in a matter where Carlsmith Ball was a party. Counsel for the parties mutually selected [the Arbitrator] as Mediator in January 2009. The initial mediation session was held on March 6, 2009, and the matter closed in October, 2009. DPR charged its standard hourly rate of $350/hour. . . . is serving as an Arbitrator in a case where Robert Triantos, Esq. at Carlsmith [Ball] represented a party for a portion of the arbitration proceeding. The case was opened with DPR in 2008 and counsel participating at that time mutually selected [the Arbitrator] as Arbitrator. In July 2009, Mr. Triantos’ client was brought into the case via Court Order, Mr. Triantos’ client settled out of the case in July, 2010 ([the Arbitrator] was not involved in the settlement discussions), DPR is charging its standard hourly rate of $350/hour. On December 1, 2010, DPR declined to grant Nordic’s request to disqualify the Arbitrator on the grounds it no longer had jurisdiction once the substantive claims were resolved. On the same day, the QLT sent a letter to DPR providing the following information regarding Carlsmith Ball’s representation of the QLT since March 2009: 1. That Carlsmith [Ball] has and continues to represent the Trust from time to time on land management and 12  FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER  commercial leasehold collection and summary possession matters, including commercial leaseholds in the Kona Industrial Subdivision, Kuakini Center, and the Kona Commons projects of the Trust; 2. That Carlsmith [Ball] does not represent any single member of the Board;