Opinion ID: 4531835
Heading Depth: 3
Heading Rank: 2

Heading: Chung Partners’ Motions for Summary Judgment

Text: In two separate motions for summary judgment, Chung Partners argued that it was not liable for Plaintiffs’ damages, first because it had no duty to Shadley, and second because it had no knowledge of homeless individuals residing in storage units. Allied filed a notice of joinder in both motions. Chung Partners argued that under Restatement (Second) of Torts §§ 8375 and 3566 (Am. Law Inst. 1979) (Restatement) it 5 Restatement 2d of Torts § 837 provides:
nuisance caused by an activity carried on upon the land while the lease continues and the lessor continues as owner, if the lessor would be liable if he had carried on the activity himself, and
the activity or knows or has reason to know that it will be carried on, and
necessarily involve or is causing the nuisance. 6 Restatement 2d of Torts § 356 comment (a) provides: When land is leased to a tenant, the law of property regards the lease as equivalent to a sale of land for the term of the lease. The lessee acquires an estate in the land, and becomes for the time being the owner and occupier, subject to all of the liabilities of one in possession, both to those who enter the land and to those outside of it . . . . [I]t is the general rule that the lessor is not liable to the lessee, or to others on the land, even though such injuries resulted from a dangerous condition existing at the time of the transfer. 5  FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER  could only be held liable for nuisance on its leased land if it possessed the land when the nuisance occurred or (1) would be liable if it carried on the alleged nuisance; (2) consented to such activity; and (3) knew that such activity would “necessarily result in” the nuisance. Chung Partners argued that although Hawai‘i case law was silent on applying Restatement § 837, “ample case law” from other jurisdictions supported its application.7 And, citing Hao v. Campbell Estate, 76 Hawai‘i 77, 869 P.2d 216 (1994), Chung Partners argued that Hawai‘i cases had recognized Restatement § 356’s general rule that “landowner[s were] not liable for injuries occurring after a lessee takes possession of the land.” Chung Partners submitted a declaration of one of its principals, Sung Hun Chung, stating that Chung Partners did not know that Allied allowed people to reside in storage units, and 7 Chung cited to the following cases for support: City of Los Angeles v. Star Sand & Gravel Co., 12 P.2d 69 (Cal. Ct. App. 1932) (holding that owner of premises leased for purpose attainable without creating nuisance was held not liable for creation of nuisance without owner’s knowledge or notice); Silverman v. Unsen, 147 A. 421 (Me. 1929) (holding that lessor of shooting gallery was not liable to third person for injury resulting from lessee’s negligence); Meloy v City of Santa Monica, 12 P.2d 1072 (Cal. Ct. App. 1932) (holding that in order to charge landlord with liability, nuisance must necessarily result from tenant’s ordinary use of premises, or from purposes for which premises were let); Wasilewski v. McGuire Art Shop, 187 A. 530 (N.J. 1936) (holding that landlord renting entire store premises to tenant who undertook to make repairs was not liable for pedestrian’s injury when caused by tenant’s negligence); Midland Oil Co. v. Thigpen, 4 F.2d 85 (8th Cir. 1924) (holding that a tenant, not a landlord, will be “owner” so far as negligent injuries to third parties are concerned). 6  FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER  furthermore, that Plaintiffs’ complaint failed to even allege such information. Accordingly, Chung Partners concluded that it could not be held liable for public nuisance. Chung Partners next argued that, contrary to Plaintiffs’ assertion, it had no “duty not to maintain” a nuisance on Allied’s property. Chung Partners explained that under Hawai‘i case law, “courts are reluctant to impose a duty on owners and occupiers of land to protect others against the criminal act[s] of third parties.” And, because Hawai‘i follows Restatement § 315,8 only a “special relationship” between Chung Partners and Plaintiffs could require Chung Partners to protect them from harm by Haas. In the instant case, Chung Partners argued, there was no special relationship between it and Plaintiffs. Accordingly, Chung Partners concluded that it could not have been required to control Haas’ conduct. 8 Restatement § 315 provides: There is no duty so to control the conduct of a third person as to prevent him from causing physical harm to another unless: (a) A special relation exists between the actor and the third person which imposes a duty upon the actor to control the third person’s conduct, or (b) A special relation exists between the actor and the other which gives to the other a right to protection. 7  FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER  In Chung Partners’ second Motion for Summary Judgment, it noted that Restatement § 821B construed public nuisances as unreasonable conduct of a certain nature.9 Second, Chung Partners pointed out that in Littleton v. State, 66 Haw. 55, 67, 656 P.2d 1336, 1344-45 (1982), this court held that for behavior to be a public nuisance, the act or use of the property at issue must have been in a public place or somewhere the public frequently congregated. Chung Partners further maintained that people could not be nuisances; only their unreasonable conduct could be a nuisance if it interfered with a common right. And even if Allied created a nuisance, it did not create an unreasonable interference with any right common to the general public or to 9 Restatement § 821B provides: (1) A public nuisance is an unreasonable interference with a right common to the general public.
an interference with a public right is unreasonable include the following:
significant interference with the public health, the public safety, the public peace, the public comfort, or the public convenience, or
statute, ordinance, or administrative regulation, or
nature or has produced a permanent or long-lasting effect, and, as the actor knows or has reason to know, has a significant effect upon the public right. 8  FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER  the Plaintiffs 0.3 miles away. 3. Plaintiffs’ Response to Chung Partners’ Motions for Summary Judgment Citing Littleton v. State, 66 Haw. at 67, 656 P.2d at 1344-45 (1982), and Territory v. Fujiwara, 33 Haw. 428, 429-30 (1935), Plaintiffs argued that a court may not decide at summary judgment whether a public nuisance exists; instead, that question is reserved for the fact-finder. Plaintiffs also argued that, as a matter of law, defendants can be held liable for public nuisances that extend from activity on the defendants’ property. Plaintiffs next noted that the use of the storage units for residences was “illegal” because the area was zoned as “General Industrial.” Furthermore, Plaintiffs relied on the expert testimony of Spike Denis, a premises security expert, that it was reasonably foreseeable that homeless residents would commit assault, not only on the premises but in the surrounding community. Plaintiffs presented evidence that the encampment at Allied was long-running and obvious. For example, Plaintiffs quoted from the declaration of James Smith, who stated that he resided in a storage unit, and that Roy Ebert, who worked under Sung Hun Chung, told Smith “what I don’t see, I don’t know,” in 9  FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER  reference to residential use of the storage unit. Plaintiffs further stated that Allied changed its name to Kaiwi Storage after this incident, and hired Metro to address the issue of homeless individuals residing in units. Metro employees working there after the assault testified that they observed signs of residential use on the property. Plaintiffs argued Chung Partners was liable for the nuisance maintained by Allied because one of Chung Partners’ principals, Sung Hun Chung, knew or should have known of the homeless situation on Allied’s leased property. On the date of the incident, Plaintiffs alleged, Sung Hun Chung was not only the managing partner of Chung Partners, but also the manager and secretary of Allied. Further, Sung Hun Chung had an office and P.O. box on Allied’s premises for nearly six years. Accordingly, Plaintiffs argued Sung Hun Chung knew or should have known about Allied’s homeless residents.10 10 Plaintiffs presented two other alternative theories of liability. First, Plaintiffs argued that there were unresolved issues of material fact as to whether Chung Partners, as transferee of Allied’s business in 2012, assumed Allied’s liabilities. Though the purchase and sale agreement was written as a sale of assets, Plaintiffs raised several factual issues that they contended could have supported Chung Partners’ liability. Second, Plaintiffs argued that Chung Partners was never out of possession of the premises leased to Allied, and therefore Chung Partners was tenants-in-common with Allied and equally liable for Allied’s torts. The Allied premises were originally leased by the Trustees of the Lili‘uokalani (continued) 10  FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER  The circuit court heard Chung Partners’ Motions for Summary Judgment and Allied’s Notice of Joinder, and subsequently granted the three motions in a minute order. The court’s minute order was brief and did not explain its specific rationale for granting Defendants’ motions for summary judgment. Chung Partners then filed a Motion for Costs pursuant to HRCP Rules 54(d)11 and 6812. In its Memorandum of Support, Trust to Chung Partners. Chung Partners thereafter subleased a portion of the premises to Allied, but the sublease did not provide specific metes and bounds of the premises. Therefore, Allied and Chung Partners were co-tenants in equal possession of the premises under Hawai‘i law and Allied maintained interest in all of the larger area. 11 HRCP Rule 54(d) provides in relevant part:
(1) Costs Other Than Attorneys’ Fees. Except when express provision therefor is made either in a statute or in these rules, costs shall be allowed as of course to the prevailing party unless the court otherwise directs; but costs against the State or a county, or an officer or agency of the State or a county, shall be imposed only to the extent permitted by law... (2) Attorneys’ Fees. (A) Claims for attorneys’ fees and related nontaxable expenses shall be made by motion unless the substantive law governing the action provides for the recovery of such fees as an element of damages to be proved at trial. 12 HRCP Rule 68 provides: At any time more than 10 days before the trial begins, any party may serve upon any adverse party an (continued) 11  FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER  Chung Partners alleged that after a failed attempt to mediate, it offered to settle for $25,000 pursuant to HRCP Rule 68 on August 6, 2015, with “each party to bear their own fees and costs,” which Plaintiffs rejected. Chung Partners incurred costs of $29,429.69 prior to its Offer of Settlement and $35,546.76 after the offer was rejected. After a hearing, the court granted Chung Partners’ Motion for Costs in the amount of $22,085.22 without stating whether it was granting the motion based on HRCP Rule 54(d) or Rule 68. offer of settlement or an offer to allow judgment to be taken against either party for the money or property or to the effect specified in the offer, with costs then accrued. If within 10 days after the service of the offer the adverse party serves written notice that the offer is accepted, either party may then file the offer and notice of acceptance together with proof of service thereof and thereupon the clerk shall, in accordance with the agreement, enter an order of dismissal or a judgment. An offer not accepted shall be deemed withdrawn and evidence thereof is not admissible except in a proceeding to determine costs. If the judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay the costs incurred after the making of the offer. The fact that an offer is made but not accepted does not preclude a subsequent offer. When the liability of one party to another has been determined by verdict or order or judgment, but the amount or extent of the liability remains to be determined by further proceedings, either party may make an offer of judgment, which shall have the same effect as an offer made before trial if it is served within a reasonable time not less than 10 days prior to the commencement of hearings to determine the amount or extent of liability. (Emphases added). 12  FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER