Opinion ID: 2640748
Heading Depth: 2
Heading Rank: 4

Heading: The AOAO's Breach of Contract Claims

Text: As previously stated, the circuit court granted summary judgment in favor of Venture 15, Royal, Lee, and Liu on the AOAO's breach of contract claims, ruling that the six-year statute of limitations contained in HRS § 657-1 barred the AOAO's claims. Specifically, the circuit court orally ruled that the [s]tatute of [l]imitation[s] as a matter of law is triggered by the breach, and not the date the harm was discovered. The circuit court also granted summary judgment in favor of Royal and Lee, apparently on the additional basis that there was no contract between (1) the AOAO (or its members) and Royal and (2) the AOAO and Lee. We first address whether there is privity of contract between the AOAO and Royal, Lee, and Liu. [27]
The AOAO claims that the circuit court wrongly dismissed [the AOAO's] breach of contract claims against Liu, Royal, and Lee[.] Specifically, the AOAO asserts that: [Royal, Lee, and Liu] argued [at the circuit court level] that there was no privity of contract between [the AOAO] and each of them. As to Liu and Lee, [the AOAO's] opposition offered the general contracts between the developer, Venture 15[,] and their general contractors, S. Horita and Royal[,] to establish the terms of these Defendants' subcontracts. The general contracts establish circumstantially the material terms of the subcontracts, specifically the requirement that the subcontractors comply with the General Conditions of the general contracts, including plan specifications and the Building Code. For example, standard AIA forms A101 and A201 of the [S.] Horita general contract required [S.] Horita to incorporate in all its subcontracts a requirement that its subcontractors comply with the General Conditions. Section 5.3.1 of the General Conditions required S. Horita to include in its subcontracts the requirement that subcontractors be bound by the terms of the Contract Documents, including the project plans and specifications. Thus, a jury could reasonably find that S. Horita complied and included in its Liu subcontract the requirements that Liu comply with project specifications and the Building Code in performing its work. (Footnote and citations to the record omitted.) The AOAO then asserts that it is plainly a third-party beneficiary of the above contracts under Hawai`i law[,] referring to the aforementioned contracts. (Citations omitted.) Although the AOAO does not elaborate any further, it appears that the AOAO is claiming that it is a third-party beneficiary of the contracts between: (1) Venture 15 and Royal (for its claim against Royal); (2) Royal and Lee (for its claim against Lee); and (3) S. Horita and Liu (for its claim against Liu). Royal maintains that there is no contract between the AOAO and Royal, arguing that: As admitted to by the AOAO's counsel at oral argument [on July 29, 2002,] the only contract in this case is between Venture [15] and the individual buyers. Accordingly, the AOAO cannot assert a breach of contract claim against Royal. In an attempt to now assert a new cause of action against Royal, the AOAO claims that it is a third-party beneficiary of the contract between Geolabs and Royal.[ [28] ] However, the AOAO failed to allege this cause of action in its [f]irst [a]mended [c]omplaint. Although Hawai`i is a notice pleading state, the AOAO failed to provide Royal with any notice that the AOAO was asserting that it was a third-party beneficiary under any contract between any of the parties. Moreover, the AOAO's counsel, in response to the [circuit c]ourt's question as to whether the AOAO was withdrawing any claims for breach of contract, specifically conceded that there is no claim [for] breach of contract. (Citations omitted.) (Emphasis in original.) Lee argues that, [i]n a vain attempt to establish a contract, the AOAO refers to a standard form Subcontractor's Agreement that Royal uses. This was not a standard form agreement between Royal and . . . Lee, but only a standard form that Royal uses. (Emphases in original.) Lee also asserts that [t]he AOAO's breach of contract claims are a moot point. At oral hearing and upon questioning by the [c]ourt, the AOAO's counsel withdrew its claim for breach of contract [on July 29, 2002]. (Citation to the record omitted.) Liu similarly asserts that it is undisputed that there is no privity of contract between [the AOAO] and Liu. Now, on appeal, [the AOAO] improperly seeks to `plead' third-party beneficiary status. This attempt should be rejected as untimely. As evinced by the foregoing, we preliminarily note that there is much dispute among the parties as to whether the AOAO withdrew its breach of contract claims at the July 29, 2002 hearing before the circuit court. On that day, the circuit court heard oral argument on, inter alia, Venture 15's motion for partial summary judgment on the AOAO's unintentional tort claims and breach of warranties claims. Venture 15's motion asserted, inter alia, that the economic loss [rule] should preclude any tort-based recovery for economic losses allegedly sustained by the AOAO. The AOAO's remedy is to do what it has already done, i.e. [,] sue Venture 15, the developer, who, in turn, has contractual remedies against the general contractor and design professionals. In essence, the terms of the contract, rather than some tort-based theory, should dictate liability and recovery of economic losses in construction cases. At the hearing, counsel for the AOAO stated that: The only contracts that arguably exist are the sale of contract [sic] between Venture 15 and individual apartment owners that I believe Venture 15 points out that[,] at the time the project was being developed and the operative events took place, the [AOAO] were [sic] not even existent [sic]. (Emphases added.) Subsequently, the following colloquy ensued regarding the AOAO's breach of contract claims against Venture 15: THE COURT: What I'd like to focus on is do you have breach of contract claims against Venture 15? [The AOAO's counsel]: I believe that the individual apartment owner would. THE COURT: And those are pleadings [sic]? [The AOAO's counsel]: There is a breach of contract claim pleading. . . . . . . . THE COURT: . . . But, I need to get to the initial question first as to whether there is or is not and argued at this time withdrawing any claims of contract breach? [The AOAO's counsel]: Well, certainly, on the part of the [AOAO], yes, there's no claim [for] breach of contract because there is no THE COURT: When we go to trial, will you be arguing any breach of contract for the Plaintiffs or Plaintiff [ [29] ] against Venture 15 or asking for any jury instructions thereon or bringing any evidence regarding that? [The AOAO's counsel]: As far as the individual homeowners, Your Honor, I haven't really thought that through at this point. THE COURT: Well, was it pleaded in the complaint? [The AOAO's counsel]: There was a cause of action for breach of contract generally against Defendants. THE COURT: Okay, and, do you  are you saying at this time that does not include defendant Venture 15? [The AOAO's counsel]: Well, no. As I pointed out there are  there are [sic] a sales contract between Venture 15 and the homeowners. . . . . THE COURT: [W]hen you say that there's no contract between the AOAO and Venture 15 . . ., the AOAO is under [HRS ch.] 514-A[ [30] ] bringing these claims on behalf of the owners, right? [The AOAO's counsel]: It's not. It's bringing the claims on behalf of the AOAO. Also, [HRS §] 541A-92 [sic] also gives it the ability to bring claims that are common to two or more owners. But, the claim itself is brought by the AOAO in [HRS chapter] 514 [sic] gives the AOAO standing to bring claims within the parameters of this lawsuit. THE COURT: Well, where there was a contract before between the original owners and the others, how can the AOAO get greater relief or damages than the relief and damages that would be available to the original owners on whose behalf they sued? [The AOAO's counsel]: Well, Your Honor, a condominium is set up where you got individual properties owned by individuals their own property [sic] and then the association has the common elements. Now, what we're  what we're essentially suing for is for repair to what constitutes the common elements. And, so, those claims are not subject to any contract between Venture 15 and the AOAO. Now, there may be particular claims THE COURT: Sorry to interrupt but which claims are [The AOAO's counsel]: Which claims are? THE COURT: Subject to a contract between the original owners and Venture 15? [The AOAO's counsel]: Those would be things such as breach of express warranty and sales contract if they are in fact  in fact statute [sic]. I'm not sure that they are. I  I  I haven't looked at the sales contract. THE COURT: I think what's happening is you can't have it both ways. Either there is a contract or there isn't a contract. And you can't bring claims, I don't think, based on there isn't a contract, therefore, I get to bring this claim but over here I'm going to maintain another claim which is based on contract. [The AOAO's counsel]: Your Honor, I think what the  all the confusion comes about by saying  by thinking that the association is the same as the individual apartment owners. Under the statute it's not set up that way. The association has the ability to bring its own claims with respect to common elements. In addition to that, they're entitled to bring claims with respect to these other individual apartment owners. These are claims that are separate apartment owners' claims. Now, to the extend [sic] that these separate individual apartment owners are original purchasers and have a direct contract with Venture 15, arguably, and, I would say arguably, because I would dispute that that these expressed contracts invoke the applicability or trigger the applicability of the economic loss rule. . . . . THE COURT: Could you for one last moment tell me this[:] whether any of the original owners are going to seek their claim for breach of contract because I believe you have said in this argument that they are the only people who have that  [The AOAO's counsel]: Your Honor, if  if  let me put it this way if the outcome of this motion is dependent upon that, no, they won't. I should say at this point in time I don't have the contract in front of me. I don't know what rights they have. Again, hinge on  the outcome of this motion hinge upon that, I would say no, the [AOAO] concerns [sic] that that they're not  THE COURT: Okay. (Emphases added.) At the conclusion of the hearing, the circuit court orally ruled that there is no genuine issue of material fact as to whether the AOAO has a contract with Venture 15. And, the [AOAO], having conceded that it does not, and, the Defendants having conceded that since it does not, then, the limitation for economic loss rule doctrine does not apply. Therefore, denied as to economic loss doctrine. At oral argument held on August 22 and 23, 2002, the issue whether the AOAO was asserting breach of contract claims was again raised by the parties and the circuit court. At the hearing, Liu's counsel stated: Your Honor, . . . it certainly appears that [the AOAO] is being incredibly inconsistent on when or whether or if they're asserting claims for breach of contract against the parties. When it suits their purposes, they're saying there is no [sic (see infra)] breach of contract claim, and then when faced with an issue like breach of contract for [s]tatute of [l]imitations which obviously would be premised on a breach of contract claim, they're saying there's no breach of contract claim; so I think they're being very inconsistent about their position on asserting contractual theories of recovery against any of the parties including Liu. (Emphasis added.) Subsequently, the AOAO's counsel stated: Our position is that the association and the homeowner do have a claim which is based on contract. What it is, is a limited claim and a limited right based upon their status under Hawai`i case law as third-party beneficiaries under a contract which they had no hand in negotiating; and the question is whether or not that type of contract status is the type of contract status that motivated the Hawai`i Supreme Court to say we're going to remove these very important rights to pursue claims in tort. Another problem we have with the idea of saying, well, if you got a contract claim, I'm going to take away your tort claim, is that at this point in the litigation, at this point in time we're really not sure whether we do have a contract claim or not. Many of the factors that determine whether we have a contract claim will have to await adjudication by the jury. The very existence of a contract, whether we were intended to be third-party beneficiary could ultimately be litigated at some later point in time, so we can get caught in a situation where we're ripsawed. . . . . We may have a claim for negligence, we may have a claim for contract. Whether we actually have that claim and can recover that claim cannot be determined until after the jury makes its determination, and I believe that's simply unfair to force the [AOAO] at this point to have to choose one or the other. (Emphases added.) During the first day of the two-day hearing, the circuit court informed the parties that elections need be made by both [sides]. Specifically, the circuit court stated: [W]hat I hear you[, i.e., the AOAO,] saying is you pleaded both [tort and contract claims] because you didn't know what was coming up, but I'm telling everyone who's brought this motion [(pertaining to the economic loss rule)]; if what you're saying is that you agree, you stipulate that they're the third-party beneficiaries of any contract, then the economic loss doctrine would apply to the damages; and if you don't, then it's only fair that they should be allowed to move forward in tort. The next day, however, the circuit court stated that: [S]ince the defendants have not conceded third-party beneficiary status or assignee status, I withdraw my requirement that you[, i.e., the AOAO,] would have to elect[, i.e., elect whether it was pursuing only tort-based claims or only contract-based claims]. (Emphasis added.) Notwithstanding the fact that the foregoing discussion illustrates that there was much confusion at the circuit court level as to whether the AOAO was intending to pursue its breach of contract claims against Royal, Lee, and Liu, it appears that the AOAO ultimately decided that it would pursue breach of contract claims as a third-party beneficiary under the various construction contracts among the parties. Moreover, the circuit court withdrew its requirement that the AOAO would have to forego its contract-based claims if it chose to pursue its tort-based claims and vice versa. Thus, contrary to Royal's and Lee's assertions, it does not appear that the AOAO withdrew its breach of contract claims  nor was it required to do so by the circuit court  as against Royal and Lee as well as Liu. Accordingly, we next address the AOAO's assertion that it is plainly a third-party beneficiary under the parties' construction contracts as pertaining to the AOAO's breach of contract claims against Royal, Lee, and Liu. The AOAO asserts: Liu argued [at the circuit court level that the AOAO] lacked standing because it did not plead third-party beneficiary status. [The AOAO's f]irst [a]mended [c]omplaint alleged breach of contract. Hawai`i is a notice-pleading state and does not require pleading standing as a third-party beneficiary. (Citation omitted.) As previously mentioned, the AOAO's amended complaint merely alleged that [t]he Defendants are liable to [the AOAO] based on breach of contract[.] Clearly, the AOAO did not allege in its amended complaint that it is a third-party beneficiary to the parties' construction contracts. However, even assuming arguendo that the AOAO's amended complaint can be construed to include such an allegation based upon the principle that [p]leadings must be construed liberally[,] In re Genesys Data Techs., Inc., 95 Hawai`i 33, 41, 18 P.3d 895, 903 (2001) (citation omitted), the AOAO's breach of contract claims fail because, as discussed more fully infra, the AOAO does not have enforceable contract rights. See E.B. Harper & Co. v. Nortek, Inc., 104 F.3d 913, 921 n. 4 (7th Cir.1997) (noting that the plaintiff did not allege that it was a third-party beneficiary of an agreement and, even if the United States Court of Appeals for the Seventh Circuit were to construe, under its liberal notice pleading requirements, the plaintiff's complaint to include such an allegation, Illinois law forecloses the claim inasmuch as the plaintiff did not have enforceable contract rights). Generally, third parties do not have enforceable contract rights. The exception to the general rule involves intended third-party beneficiaries. Pancakes of Hawai`i, Inc. v. Pomare Props. Corp., 85 Hawai`i 300, 309, 944 P.2d 97, 106 (App.1997) (emphasis added). A third party beneficiary is one for whose benefit a promise is made in a contract but who is not a party to the contract. Black's Law Dictionary 1480 (6th ed.1990) (quoting Chitlik v. Allstate Ins. Co., . . . [34 Ohio App.2d 193] 299 N.E.2d 295, 297 ([Ohio Ct.App.] 1973)). The rights of the third party beneficiary must be limited to the terms of the promise, and this promise may be express or it may be implied from the circumstances. Remington Typewriter Co. v. Kellogg, 19 Haw. 636, 640 (1909) (internal quotation marks and citation omitted). Furthermore, a prime requisite to the status of `third party beneficiary' under a contract is that the parties to the contract must have intended to benefit the third party, who must be something more than a mere incidental beneficiary. Black's Law Dictionary at 1480 (quoting McKinney v. Davis, . . . [84 N.M. 352] 503 P.2d 332, 333 ([N.M.1972])). For example, if contracting parties intend to confer direct benefits on a third party, that third party will have generally an enforceable contractual right. Id. (quoting Hunt v. First Ins. Co. of Hawai`i, 82 Hawai`i 363, 367, 922 P.2d 976, 980 (App.), cert. dismissed, 83 Hawai`i 204, 925 P.2d 374 (1996)) (some internal citations, brackets, and ellipsis omitted) (format altered). In 155 Harbor Drive Condo. Ass'n v. Harbor Point Inc., 209 Ill.App.3d 631, 154 Ill. Dec. 365, 568 N.E.2d 365 (1991), 155 Harbor Drive Condominium Association (the association) brought an action against the developer, general contractor, and subcontractors for alleged construction defects in the window units and the curtain wall of a condominium building. Id. at 366-69. Specifically, Elsa Benson, Inc. (Benson) was the general contractor for the construction of the condominium building. Id. at 366. According to the Illinois Appellate Court (the court): The contract with Benson to be the general contractor include[d], but [wa]s not limited to, a standard form of agreement between owner and contractor, general conditions of the contract for construction (AIA Document A201), supplementary general conditions, general requirements specifications, and architectural, engineering and shop drawings. These various documents are hereinafter referred to as the Benson contract. Benson hired [Consolidated Aluminum Corporation (Conalco)] as one of the subcontractors. The contract between Benson and Conalco incorporate[d] by reference the terms and conditions of the Benson contract. Conalco worked on the curtain wall and subcontracted some of the work to [Crescent Erection Company (Crescent)]. Id. at 366-67. In its complaint, the association alleged that it was a third-party beneficiary to the developer's contract with Benson, Benson's contract with Conalco, and Conalco's contract with Crescent. Id. at 369. Benson, Conalco, and WDS (an alleged successor-in-interest to Crescent) successfully moved to dismiss the association's complaint on the basis that the association was not a third-party beneficiary of the contract and warranties given by Benson and Conalco. [31] Id. On appeal, the association maintained that it was entitled to recover its losses on account of certain warranty violations because it was a direct and intended third party beneficiary of the contracts between Benson, Conalco, and Crescent. Id. at 373. Specifically, the association argued that it was a third-party beneficiary of the contract between the developer and Benson because the contract ma[d]e repeated references to the individual condominium unit owners who comprise the [a]ssociation[ ] and their warranty rights. Id. at 374. Additionally, the association argued that it was a third-party beneficiary of the contract between Benson and Conalco because: (1) it incorporate[d] by reference nine warranty and guaranty provisions of the contract between Benson and [the developer]; (2) the Conalco contract established a `warranty fund' as a security for the performance by the subcontractor of warranty service to the condominium purchasers; and (3) the contract between Conalco and Benson guaranteed the materials and workmanship used by Conalco. Id. at 374. The court disagreed with the association, stating that: With respect to construction contracts, this court has held that it is not enough that the parties to the contract know, expect or even intend that others will benefit from the construction of the building in that they will be users of it. The contract must be undertaken for the plaintiff's direct benefit and the contract itself must affirmatively make this intention clear. Waterford Condo[. Ass'n] v. Dunbar Corp. [, 104 Ill.App.3d 371, 60 Ill.Dec. 110, 432 N.E.2d 1009, 1011 (1982)]. . . . . We find that the trial court properly dismissed [the association's] third-party beneficiary claims. [The association] has the burden of proving that defendants intended to confer a direct benefit upon the [a]ssociation. [The association] has failed to meet this burden. The [a]ssociation has failed to identify any language in the subcontract which constitutes a virtual express declaration to overcome the presumption that the parties contracted only for themselves. The subcontracts make no reference to the [a]ssociation or its members[] and do not express an intent to directly benefit either the [a]ssociation or its members. The provisions in the construction contracts regarding guarantees to be provided by the contractor and the subcontractors do not mention the unit owners. There is no question that the parties were aware that the building was being built for subsequent purchasers. However, it is not enough that the parties know, expect or even intend that such people may benefit or that they are referred to in the contract. Id. at 374-75 (some citations, brackets, and internal quotation marks omitted) (emphases added). In Kisiel v. Holz, 272 Mich.App. 168, 725 N.W.2d 67 (2006), a landowner contracted with a construction company for the construction of a residence. Id. at 69. The owner of the construction company entered into an oral subcontract for excavation work and the pouring of concrete. Id. Sometime after the residence was completed, numerous cracks emerged in the basement walls and the basement floors. Id. Consequently, the landowner brought an action against the construction company and several other defendants, including the subcontractor. Id. The landowner's allegation against the subcontractor included breach of the oral subcontract between the construction company and the subcontractor. Id. The trial court apparently granted summary judgment in favor of the subcontractor. Id. On appeal, the landowner argued that he was an intended third-party beneficiary under the oral subcontract between [the subcontractor] and [the construction company]. Id. The Michigan Court of Appeals disagreed, stating that: In general, although work performed by a subcontractor on a given parcel of properly ultimately benefits the property owner, the property owner is not an intended third-party beneficiary of the contract between the general contractor and the subcontractor. Absent clear contractual language to the contrary, a property owner does not attain intended third-party beneficiary status merely because the parties to the subcontract knew, or even intended, that the construction would ultimately benefit the property owner. In the present case, on the basis of an objective review of the contract, we conclude that [the landowner] was not an intended third-party beneficiary of the oral subcontract between [the subcontractor] and [the construction company]. Before the start of construction, [the construction company] orally subcontracted with [the subcontractor] for excavation and concrete work. [The landowner] does not dispute the scope of this oral subcontract. There is nothing in the scope of the oral contract to suggest that [the subcontractor] expressly promised to provide [the landowner] with concrete walls. Because the oral contract did not contain an express promise to create the basement walls for [the landowner's] benefit, and because the contract was primarily executed for the benefit of the contracting parties, [the landowner] was only an incidental beneficiary. Accordingly, [the landowner] is unable to maintain an action against [the subcontractor] for breach of the subcontract. Id. at 70 (citations and footnote omitted) (emphasis added); see Vogel Bros. Bldg. Co. v. Scarborough Constructors, Inc., 513 So.2d 260, 261 (Fla.Dist.Ct.App.1987) (applying the general rule that a property owner is not the intended third-party beneficiary of a contract between a general contractor and a subcontractor) (citation omitted); Lake Placid Club Attached Lodges v. Elizabethtown Builders, Inc., 131 A.D.2d 159, 161-62, 521 N.Y.S.2d 165 (N.Y.App.Div.1987); Restatement (Second) of Contracts § 302, cmt. e, illustration 19 (1981) (property owner is merely an incidental beneficiary of construction subcontract between general contractor and subcontractor). Here, the AOAO clearly has not met its burden of proving that Venture 15, Royal, Lee, S. Horita, and Liu ( i.e., the contracting parties to the three relevant construction subcontracts) intended to confer a direct benefit upon the AOAO. The AOAO fails to identify any language in the relevant subcontracts which constitutes a virtual express declaration to overcome the presumption that the parties contracted only for themselves. 155 Harbor Drive Condo. Ass'n, 154 Ill.Dec. 365, 568 N.E.2d at 375. In fact, the AOAO does not point to any language in the relevant subcontracts that makes any reference to the AOAO or its members. Although [t]here is no question that the parties were aware that [Newtown Meadows] was being built for subsequent purchasers[,] id., it is not enough that the parties know, expect[,] or even intend that such people may benefit or that they are referred to in the contract. Id. (internal quotation marks, original brackets, and citation omitted); see also Kisiel, 725 N.W.2d at 69-70. Consequently, the AOAO is not an intended third-party beneficiary of the construction contracts between: (1) Venture 15 and Royal; (2) Royal and Lee; and (3) S. Horita and Liu. The AOAO, therefore, does not have enforceable contract rights. Accordingly, because we may affirm a grant of summary judgment on any ground appearing in the record, see Whitey's Boat Cruises, 110 Hawai`i at 309 n. 15, 132 P.3d at 1220 n. 15, we hold that the circuit court did not err in granting summary judgment in favor of Royal, Lee, and Liu on the AOAO's breach of contract claims. [32]
Although not entirely clear, it appears that the AOAO is contesting the circuit court's ruling that the six-year statute of limitations in HRS § 657-1 bars the AOAO's breach of contract claims against Venture 15 (as well as against Royal, Lee, and Liu), despite the fact that the AOAO does not mention any of the parties by name in its argument section pertaining to the statute of limitations. Venture 15, on the other hand, contends that: In its list of orders from which it is appealing in this matter, the AOAO does not include Venture 15's motion for partial summary judgment regarding the AOAO's claims for breach of contract against Venture 15. Moreover, in its opening brief . . ., the AOAO does not include Venture 15 in the group of Defendants-Appellees [( i.e., Royal, Lee, and Liu)] whom it claims that the trial court wrongfully granted summary judgment with respect to the AOAO's claims for breach of contract. However, in its [e]xhibits attached to the opening brief, the AOAO includes the order granting partial summary judgment to Venture 15 regarding the breach of contract claims asserted by the AOAO. The omission of an appeal of the order effectively dismissing the AOAO's breach of contract claims against Venture 15 is surprising, considering the appeal of similar partial summary judgments granted to . . . Liu, Royal, and Lee. However, Venture 15 will rely on the AOAO's apparent decision not to appeal the order granting partial summary judgment with regard to Venture 15's motion[.] Nevertheless, Venture 15 maintains that: During the [July 29, 2002] hearing of [Venture 15's] motion [for partial summary judgment regarding the AOAO's unintentional tort and breach of warranty claims,] the AOAO asserted that it had no contract with Venture 15, and since privity of contract between the parties is a predicate for application of the economic loss doctrine, the doctrine could not apply to dismiss the AOAO's tort-based claims for negligent and intentional misrepresentation. The [circuit] court gave the AOAO the choice at that point of standing by its assertion that it had no contract with Venture 15, and thereby foregoing any claims of breach of contract against Venture 15, or admitting that there was a contract and having the economic loss doctrine apply to bar the AOAO's claims of negligent and intentional misrepresentation against Venture 15. The AOAO chose to forego its breach of contract claim in favor of its misrepresentation claims against Venture 15, and the portion of Venture 15's motion for partial summary judgment regarding the misrepresentation claims (intentional and unintentional torts) was denied. While the AOAO calls its election to forego its breach of contract claim in favor of pursuing its tort claims a Hobson's choice, there either is privity of contract between the parties, whether by direct contract, third-party beneficiary[,] etc., or there is not. (Emphases added.) (Citations omitted.) In response, the AOAO asserts that it properly appealed the order granting partial summary judgment in favor of Venture 15 as to the AOAO's breach of contract claims. Moreover, the AOAO asserts that it did not voluntarily forgo its contract claims against Venture 15 or any of the Defendants. Specifically, the AOAO alleges: At the hearing on the economic loss motion[, presumably, the July 29, 2002 hearing, the AOAO] was compelled to forego its contract claim to avoid dismissal of its negligence claim. Forced to choose, [the AOAO] chose its tort over its contract claim. In fact, the [circuit] court admits it forced [the AOAO] to make an election between tort claims and contract claims based on the economic loss rule. Hence, the [circuit] court acknowledged [the AOAO's] concession was made only to avoid dismissal of the negligence claim and was not an abandonment. [The AOAO's] third-party beneficiary contract claim, however, should not have triggered the economic loss rule in the first place because, as a mere third-party beneficiary, [the AOAO] was not able to negotiate the terms of the contract or allocate the risks thereunder. (Citation to the record omitted.) Initially, we note that, contrary to Venture 15's assertion, the points of error set forth in the AOAO's opening brief include the order granting partial summary judgment in favor of Venture 15 on the AOAO's breach of contract claims and the AOAO's objections thereof, with corresponding record references. Nonetheless, based on the various arguments made at the hearings held by the circuit court, as discussed supra, it is unclear whether the AOAO is pursuing breach of contract claims against Venture 15 and, if so, the basis of such claims, notwithstanding the fact that the circuit court withdrew its requirement that the AOAO would have to forego its contract-based claims if it chose to pursue its tort-based claims and vice versa. As previously mentioned, on July 29, 2002, the AOAO's counsel stated that, on the part of the AOAO . . ., there's no claim [for] breach of contract[.] (Emphasis added.) And, counsel for the AOAO stated that [t]he only contracts that arguably exist are the sale of contract [sic] between Venture 15 and individual apartment owners[.] (Emphases added.) Moreover, when the circuit court inquired whether the AOAO would be arguing any breach of contract for the Plaintiffs or Plaintiff against Venture 15 or asking for any jury instructions thereon or bringing any evidence regarding that at trial, the AOAO's counsel responded that, [a]s far as the individual homeowners . . ., I haven't really thought that through at this point. The circuit court further inquired as to the AOAO's breach of contract claims against Venture 15, asking, [w]hen you say that there's no contract between the AOAO and Venture 15 . . ., the AOAO is under [HRS ch.] 514A bringing these claims on behalf of the owners, right? Counsel for the AOAO, however, responded: It's not. It's bringing the claims on behalf of the AOAO. Also, [HRS §] 541A-92 [sic] also gives it the ability to bring claims that are common to two or more owners. But, the claim itself is brought by the AOAO in [HRS chapter] 514 [sic] gives the AOAO standing to bring claims within the parameters of this lawsuit. (Emphases added.) Thus, according to the AOAO, it is apparently bringing breach of contract claims against Venture 15 on behalf of the AOAO, not the individual apartment owners who had [t]he only contracts that arguably exist[.] However, the AOAO does not explain how it is bringing breach of contract claims on behalf of itself in light of the fact that the AOAO previously asserted that, on the part of the AOAO . . ., there's no claim [for] breach of contract[.] (Emphasis added.) Nor does the AOAO assert or present any argument that it is an intended third-party beneficiary of the sales contracts that arguably exist between Venture 15 and the individual apartment owners. Consequently, even assuming arguendo that the AOAO is pursuing breach of contract claims on behalf of itself, it is not clear from the record the basis of such claims. Indeed, the AOAO does not point to any contract contained in the record that may form the basis of its breach of contract claims against Venture 15. Accordingly, inasmuch as we may affirm a grant of summary judgment on any ground appearing in the record, see Whitey's Boat Cruises, 110 Hawai`i at 309 n. 15, 132 P.3d at 1220 n. 15, we hold that the circuit court did not err in granting summary judgment in favor of Venture 15 on the AOAO's breach of contract claims.