Opinion ID: 1190415
Heading Depth: 4
Heading Rank: 4

Heading: Damages awarded for initial lump sum payment

Text: Pursuant to COL Nos. 24 and 25, the trial court awarded WBIC the sum of $200,000.00, being the initial lump sum payment WBIC made to the Group on April 30, 1987 as partial consideration for the Group's execution of the Joinder Agreement, as damages by reason of Amfac's breach of the Indemnification Agreement. Amfac argues that these COLs are erroneous because the contemplation of the parties to the Indemnification Agreement was that the costs referred to in paragraph 2(a) would be determined judicially on the basis of fair market value considerations; from this premise Amfac urges that WBIC's execution of the Joinder Agreement (obligating WBIC, inter alia, to pay the Group the sum of $200,000.00) was neither foreseeable nor contemplated by the parties at the time Amfac executed the Indemnification Agreement. Amfac supports its argument on the basis of Tom's testimony that, as co-drafter of the Indemnification Agreement, he intended that the language any and all costs would be subject to fair market valuation. Amfac's position is misplaced, however, because parol evidence regarding the parties' intent as to the language used in a contract may be considered only when the contract language is ambiguous. See, e.g., MPM Hawaiian, Inc. v. World Square, 4 Haw.App. 341, 345-46, 666 P.2d 622, 625 (1983) (where the contract was unambiguous, the parol evidence rule was applicable and `extrinsic evidence of the surrounding facts and circumstances existing prior to, contemporaneously with and subsequent to [its] execution' could not be considered) (citing Midkiff v. Castle & Cooke, Inc., 45 Haw. 409, 422, 368 P.2d 887, 894 (1962)). In the present case, the trial court concluded in COL No. 9 that the Indemnification Agreement was unambiguous. On appeal, Amfac has not challenged this COL and therefore we treat it as binding on this court. See Hawaii Rules of Appellate Procedure (HRAP) Rule 28(b)(4)(C) (1984); cf. Leibert v. Finance Factors, Ltd., 71 Haw. 285, 288, 788 P.2d 833, 835 (1990). Because the Indemnification Agreement is unambiguous, the parol evidence rule precludes Tom's testimony as to the meaning of the phrase any and all costs in paragraph 2(a). [14] Nevertheless, COL Nos. 24 and 25 are clearly erroneous because, according to the trial court's own FOFs, not all of WBIC's $200,000.00 lump sum payment to the Group was foreseeable. In FOF No. 30, the trial court found that: At the meeting [held prior to January 31, 1985] ..., Saunders demanded, as a condition to the Group's execution of a sewer easement for the Sewer Line, a lump sum payment equal to a proportionate share of the Group's leasehold rental obligations to WDC and Queens from 1980 to that time. ... Saunders determined the proportionate share by dividing the total square foot area of Lot 30-A into the total square foot area of Roadway Easement H on Lot 30-A. This proportionate figure was approximately 14%.... Testimony of Melvin Kaneshige; Deposition testimony of George Fujikawa, read and disavowed at trial. (Emphasis added.) Kaneshige testified that Saunders had wanted some money for ... what he considered `rent' for past use of the sewer easement. However, the record reflects that the entire lump sum payment of $200,000.00 comprised more than the Group's lease rent payments from 1980 to January 31, 1985. Saunders testified that he derived a lump sum rent figure of $167,713.32 based on seventy-nine months of prior use of Lot 30-A multiplied by fourteen percent of the Group's monthly lease rents to Queen's under the master lease and to WDC under the sublease. [15] The difference between the lump sum of $200,000.00 and the $167,713.32 rent amount represented the proportionate figure that Saunders estimated was due and owing for real property taxes. Fourteen percent of the Group's lease rent obligations from 1980 to January 31, 1985 obviously does not include real property taxes and, therefore, by the express terms of FOF No. 30, the payment of monies for such taxes would not have been foreseeable, i.e., in the contemplation of the parties at the time the Indemnification Agreement was executed. See Jones v. Johnson, 41 Haw. 389, 394, reh'g denied, 41 Haw. 651 (1956); Bow v. Nakamura, 6 Haw.App. 290, 293, 719 P.2d 1103, 1106 (1986). Accordingly, we hold that COL Nos. 24 and 25 are clearly erroneous and that WBIC is not entitled to recover from Amfac that portion of the $200,000.00 lump sum payment allocable to the Group's estimated real property taxes.