Court Opinion

ID: 2648894
Source: CourtListenerOpinion
Date Created: 2014-01-11 02:15:11.71588+00
Date Added: 2024-06-11T12:14:10.127362
License: Public Domain

***FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER***

                                                              Electronically Filed
                                                              Supreme Court
                                                              SCWC-12-0001024
                                                              10-JAN-2014
                                                              01:50 PM

           IN THE SUPREME COURT OF THE STATE OF HAWAI#I

                                ---o0o---

  HOVEY B. LAMBERT, TRUSTEE UNDER THAT HOVEY B. LAMBERT TRUST,
     an unrecorded Revocable Living Trust Agreement dated
          April 5, 2002, Respondent/Plaintiff-Appellee,

                                    vs.

         LESIELI TEISINA, Petitioner/Defendant-Appellant

                                    and

      PENISIMANI TEISINA, Petitioner/Intervenor-Appellant,

                                    and

              WAHA (K), et al., Defendants-Appellees.

                            SCWC-12-0001024

         CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
              (CAAP-12-0001024; CIV. NO. 09-1-2529)

                            JANUARY 10, 2014

  NAKAYAMA, ACTING C.J., ACOBA, McKENNA, AND POLLACK, JJ., AND
   CIRCUIT JUDGE LEE, IN PLACE OF RECKTENWALD, C.J., RECUSED

                              PER CURIUM

          Petitioners/defendants-appellants Lesieli Teisina and

Penisimani Teisina (collectively, “the Teisinas”) apply for
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certiorari review of the Intermediate Court of Appeals’ (“ICA”)

dismissal of their appeal from the “Order Granting Plaintiff’s

Motion to Allow Overbidding, to Confirm Sale, to Account for and

Direct Reimbursement of Expenses and Attorneys’ Fees and to

Disburse Net Proceeds” (“Confirmation Order”) for lack of

jurisdiction.    The Teisinas contend that the ICA has jurisdiction

over the appeal because the Confirmation Order qualifies as a

final, appealable order in the absence of a final judgment under

the exception announced in Forgay v. Conrad, 47 U.S. 201 (1848).

Respondent/plaintiff-appellee Hovey B. Lambert, Trustee Under the

Hovey B. Lambert Trust (“Trustee Lambert”) argues that the ICA

correctly dismissed the appeal for lack of jurisdiction because

no final judgment has been entered in the case, and the

Confirmation Order does not satisfy any of the exceptions to the

final judgment requirement for appeals.

            We conclude that the Confirmation Order qualifies as a

final, appealable order under the Forgay doctrine, and may be

immediately reviewed on appeal in the absence of a final

judgment.    Accordingly, we vacate the dismissal order and remand

the matter to the ICA for disposition of the appeal on the

merits.

                            I.   Background

     A.     Brief Factual History

            The Lambert family owned a substantial portion of two

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parcels of land located in Laie, Hawai#i -- Parcel 331 and the

Kuleana parcel.2     Peter K. Lua (“Lua”) owned a small portion of

Parcel 33.

            In 1991, Lua sold 10,000 square feet of Parcel 33 to

the Teisinas and the Teisinas built what is now a 5,800 square

feet, three-story home valued at approximately $393,200.00.                 The

Teisinas have always lived in their home and at some point rented

out some of the rooms.      The Teisinas later conveyed a small

portion of their interest in Parcel 33 to the Fa family.3

      B.    Brief Procedural History

            1.    Summary

            The Teisinas property was sold to Trustee Lambert in

      1
         “Parcel 33” is identified as Tax Map Key No. (1) 5-5-001-033 and
described as:

            All of that certain parcel of land (being portion of
            the land(s) described in and covered by Royal Patent
            Number 7494, Land Commission Award Number 8559-B,
            Apana 36 to William C. Lunalilo)) situate, lying and
            being at Laie, Koolauloa, Island of Oahu, City and
            County of Honolulu, State of Hawaii[.]
      2
         The “Kuleana parcel” is identified as Tax Map Key No. (1) 5-5-001-035
and described as:

            All of that certain parcel of land (being all of the
            land(s) described in and covered by Royal Patent
            Number 1303, Land Commission Award Number 3741, Apana
            4 to Waha) situate, lying and being at Laie,
            Koolauloa, Island of Oahu, City and County of
            Honolulu, State of Hawaii[.]

      3
         Based on the information presented in the record, it appears that
Mr. Teisina conveyed a portion of his interest in Parcel 33 to the Fa Family.
Ms. Teisina did not sign the conveyance document.

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the underlying partition sale.4        The sale was confirmed to

Trustee Lambert pursuant to the Confirmation Order.             The Teisinas

appealed from the Confirmation Order, but the ICA dismissed the

appeal for lack of jurisdiction because no final judgment was

entered in the case.      The Teisinas applied for certiorari review

of the ICA’s dismissal order, which we accepted.

           2.    Relevant Procedural History - Circuit Court

           Trustee Lambert alleged that the Teisinas owned 3/5824

interest (less than 10,000 square feet) in Parcel 33 and moved

for summary judgment to partition their interest along with the

remainder of Parcel 33 as well as the Kuleana parcel.             The

Teisinas opposed summary judgment on the ground that they owned a

larger portion of Parcel 33 (10,000 square feet).            The circuit

court granted summary judgment for partition, appointed a

commissioner to sell the parcels at a public auction, and ordered

the sale proceeds to be distributed pursuant to court order.                The

court’s decision was memorialized in the “Order Granting

Plaintiff’s Motion for Summary Judgment Regarding Partition and

Title, Filed April 26, 2010”, filed on June 20, 2011 (“Summary

Judgment Order”).     The Summary Judgment Order authorized Trustee

Lambert and any party holding a 10% or greater interest in the

     4
         This was the second partition action filed by the Lambert family. In
1996, the Lambert family sought to partition Parcel 33 and the adjoining
Kuleana parcel (Civil No. 96-0859-03) but failed to prosecute their lawsuit
following an appeal from a default judgment, see Lambert v. Lua, 92 Hawai#i
228, 990 P.2d 126 (1999), and the case was dismissed.

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respective parcels to credit bid5 at the auction.            The Teisinas’

3/5824 interest in Parcel 33 was less than a 10% interest.

            The circuit court stayed the sale for a short time.

Trustee Lambert successfully moved to dissolve the stay.              At that

time, the court affirmatively declared that the Teisinas owned

the home they built on Parcel 33 and that they were free to

remove or abandon the home.       The court also ordered the

commissioner to turn over to the Teisinas any monies he collected

from the tenants residing at the Teisinas’ house.

            The Teisinas later moved the court to include their

house in the partition sale and requested an evidentiary hearing

to establish the enhancement value of their house before the

auction could take place.       The circuit court included the house

in the partition sale but declined to hold an evidentiary hearing

on the enhancement value.

            The circuit court also denied the Teisinas request to

allow them to use the enhancement value of their house, which

their expert valued at $393,200.00, in lieu of a supersedeas bond

for any future stay requests and to allow them to use the value

to bid at the auction.

      5
         A “credit bid” is a bid up to an amount equal to the unpaid principal
and interest of a debt, together with costs, fees, and other expenses, without
tendering cash. See generally First Commercial Mortg. Co. v. Reece, 89 Cal.
App. 4th 731, 737 (Cal. Ct. App. 2d Dist. 2001) (“The purpose of [a credit
bid] is to avoid the inefficiency of requiring the lender to tender cash which
would only be immediately returned to it.”).

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             When the Teisinas appealed the summary judgment order

and several interlocutory orders (CAAP-12-0000529), the circuit

court conditioned a stay upon the posting of a $400,000.00 bond.

The Teisinas were unable to post a bond and the appeal was

eventually dismissed for lack of appellate jurisdiction.

             The public auction took place on June 5, 2012.          There

were two bids for Parcel 33 –- a $400,000 bid to include the

Teisinas’ house and a $425,000 bid from Trustee Lambert not to

include the Teisinas’ house.

             On October 25, 2012, the circuit court confirmed the

sale.    The Confirmation Order states that “the Teisinas’ house on

Parcel 33 contributed $150,000 in value to the confirmed purchase

price of $425,000” and, therefore, “it is appropriate that the

Teisinas’ house bear 150/425ths of the fees and costs incurred in

this partition as attributed to Parcel 33[.]”            After payment of

the respective percentage of the commissioner’s fees and expenses

($12,336.52), Trustee Lambert’s attorneys’ fees ($180,000.00) and

costs ($4,100.97), and Parcel 33’s real property taxes

($44,914.26), the Teisinas were awarded $71,750.126 to be

distributed when they surrendered their house.            The circuit court

     6
         The Teisinas’ share of the sale proceeds was calculated as follows:

     Share   of Gross Proceeds ($425,000)       $   150,000.00
     Share   of Commissioner’s Fees/Costs      ($     3,918.66)
     Share   of Property Taxes                 ($    15,852.09)
     Share   of Trustee Lambert’s Fees/Costs   ($    58,479.13)
             NET DISTRIBUTION                   $    71,750.12

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ordered the sale to close by November 25, 2012, unless extended,

and “retain[ed] jurisdiction, as needed to assure the orderly

transition of Parcel 33 and to make any adjustments to the

distribution to the Teisinas as may be warranted if there is

noncompliance or delay in [peacefully surrendering their house].”

In all respects, the Confirmation Order effectively terminated

the Teisinas’ rights to the property.

               Final judgment as to Parcel 33 has not been entered.7

               3.    The Appeal

               On November 20, 2012, the Teisinas appealed from the

Confirmation Order.         After the opening brief was filed but before

the answering and reply briefs were filed, the ICA dismissed the

appeal for lack of jurisdiction because a final judgment was not

entered in the case.         The Teisinas moved for reconsideration of

the ICA’s dismissal order, which the ICA denied.

               4.    The Application for a Writ of Certiorari

               On June 12, 2013, the Teisinas timely filed an

application for a writ of certiorari to review the ICA’s “Order

Dismissing Appeal for Lack of Appellate Jurisdiction”, filed on

May 16, 2013 (“Dismissal Order”) and the ICA’s May 29, 2013 order

denying their motion for reconsideration.             We accepted the

certiorari application and directed the parties to file

supplemental briefs addressing the applicability of the Forgay

        7
            Final judgment as to the Kuleana parcel was entered on August 27,
2013.

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doctrine to an order confirming a partition sale.           The parties

timely responded.

          The Teisinas argue that the Forgay doctrine is

applicable to the Confirmation Order because they will suffer

irreparable injury once the court-ordered transfer of Parcel 33

to Trustee Lambert is completed.         Trustee Lambert argues that the

Forgay doctrine is not binding on Hawai#i courts and that its

application to an order confirming a partition sale would

liberalize the interpretation of Hawai#i’s appellate jurisdiction

statute thereby increasing the likelihood of multiple appeals

from the same case.    He maintains that a writ of possession has

not been issued against the Teisinas and that any irreparable

injury or immediate loss of property is a result of the Teisinas’

decision to include their house in the partition sale.

                          II.   Discussion

          Disposition of this certiorari application is limited

to a single question -- Does the ICA have jurisdiction to

entertain the appeal in this case?        To answer this question, we

must determine whether an order confirming a partition sale is

appealable as a final order in the absence of Hawai#i Rules of

Civil Procedure (“HRCP”) Rule 54(b) certification.           We conclude

that the Confirmation Order meets the requirements of

appealability under the Forgay doctrine, and therefore, may be

immediately reviewed as an appealable final order.

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     A.     The Separate Judgment Requirement

            Hawai#i Revised Statutes (“HRS”) § 641-1(a) (Supp.

2012) authorizes appeals in civil cases from final judgments,

orders, or decrees.    Such appeals “shall be taken in the manner .

. . provided by the rules of court.”        HRS § 641-1(c)) (1993).

Consistent with HRS § 641-1(c)’s directive, HRCP Rule 58 was

promulgated and specifically requires that “[e]very judgment

shall be set forth on a separate document.”          Based on this

requirement, the supreme court has held that “[a]n appeal may be

taken . . . only after the order[] ha[s] been reduced to a

judgment and the judgment has been entered in favor of and

against the appropriate parties pursuant to HRCP [Rule] 58[.]”

Jenkins v. Cades Schutte Fleming & Wright, 76 Hawai#i 115, 119,

869 P.2d 1334, 1338 (1994).      The separate judgment must “either

resolve all claims against all parties or contain the finding

necessary for certification under HRCP [Rule] 54(b).”            Jenkins,

76 Hawai#i at 119, 869 P.2d at 1338.        “An appeal from an order

that is not reduced to a judgment in favor or against the party

by the time the record [on appeal] is filed in the supreme court

will be dismissed.”    Id. at 120, 869 P.2d at 1339 (footnote

omitted).

     B.     The Forgay Doctrine Exception to the Separate Judgment
            Requirement

            There are several exceptions to the separate judgment

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requirement.8    One recognized exception is the Forgay doctrine.

This doctrine, which is sometimes referred to as the hardship and

irreparable injury exception to the final judgment requirement,

was established by the United States Supreme Court in Forgay v.

Conrad, 47 U.S. 201 (1848),9 and adopted by this court in dictum

in Ciesla.10    Although narrow in scope and limited in use, the

Forgay doctrine permits a direct appeal from a non-final,

interlocutory order or decree that commands the immediate

transfer of property, where the losing party will be subjected to

undue hardship and irreparable injury if appellate review must

wait until the final outcome of the litigation.            See Ciesla, 78

Hawai#i at 20, 889 P.2d at 704; Bank of Hawai#i v. Davis Radio

Sales & Serv., Inc., 6 Haw. App. 469, 475 n.10, 727 P.2d 419, 424

n.10 (1986); Penn v. Transportation Lease Hawai#i, Ltd., 2 Haw.
8
         Exceptions to the separate, final judgment requirement include the
Forgay doctrine, the collateral order doctrine, and HRS § 641–1(b) (1993).
See Ciesla v. Reddish, 78 Hawai#i 18, 20, 889 P.2d 702, 704 (1995) (discussing
the two requirements for appealability under the Forgay doctrine); Abrams v.
Cades, Schutte, Fleming & Wright, 88 Hawai#i 319, 322, 966 P.2d 631, 634
(1998) (discussing the three requirements for appealability under the
collateral order doctrine); HRS § 641–1(b) (setting forth the requirements for
an appeal from an interlocutory order).
      9
         In Forgay, the United States Supreme Court held that an order
providing for the immediate delivery to an assignee in bankruptcy of property
that had previously been conveyed to the bankrupt was appealable even though
the underlying case was to continue for an accounting. The court held that
the order was appealable because it directed the immediate delivery of
property and threatened irreparable hardship to the appellant. The order was
found final, in itself, even though the case was not fully resolved.

      10
          In Ciesla, the court dismissed the appeal as untimely but went on in
dictum to note that the judgment for possession being appealed, which was
accompanied by a writ of possession, would have been immediately appealable
under the Forgay doctrine.

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App. 272, 630 P.2d 646 (1981).       The Forgay doctrine is therefore

an appropriate exception to the final judgment requirement in

light of the consequences of an order or decree requiring an

immediate change in the ownership or possession of real property.

     C.   The October 25, 2012 Confirmation Order is Appealable
          Under the Forgay Doctrine

          We now turn to our original inquiry -- Whether the

October 25, 2012 Confirmation Order is appealable as a final

order in the absence of Rule 54(b) certification?

          Foreclosure decrees, writs of possession, and orders

for the sale of specific property are examples of orders and

decrees that this Court has held to be appealable under the

Forgay doctrine.    See, e.g., Waimanalo Village Residents’ Corp.

v. Young, 87 Hawai#i 353, 363 n.7, 956 P.2d 1285, 1295 n.7 (1998)

(judgment for possession, accompanied by writ of possession, was

appealable under Forgay doctrine); International Sav. & Loan

Ass’n v. Woods, 69 Haw. 11, 16, 731 P.2d 151, 154-55 (1987)

(decree foreclosing mortgage and ordering sale of property was

appealable under the Forgay doctrine because the appellants would

be subjected to irreparable injury if their condominium apartment

was sold before the foreclosure decree could be reviewed).             This

court, therefore, has traditionally permitted appeals of non-

final, interlocutory orders that command the immediate transfer

of property.   Thus, a partition confirmation order that

effectively terminates property rights is similarly appealable

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under the Forgay doctrine.

            We recognize, however, that no Hawai#i case law has

specifically addressed the applicability of the Forgay doctrine

to an order confirming a partition sale and directing

distribution of the sale proceeds -- like the order at issue in

this appeal.11    We, therefore, look to cases from other

jurisdictions for guidance.       See Sierra Club v. Department of

Transp., State of Hawai#i, 120 Hawai#i 181, 200-03, 202 P.3d 1226,

1245-48 (2009) (the court can look to other jurisdictions for

assistance); County of Hawai#i v. C & J Coupe Family Ltd. P’ship,

119 Hawai#i 352, 369, 198 P.3d 615, 632 (2008) (opinions on an

issue from other jurisdictions were useful where no Hawai#i case

addressed the issue).

            There are a number of jurisdictions that have addressed

the appealability of a partition decree or confirmation order in

the absence of a final judgment, but the holdings in those cases

are based upon the statute or case law of the specific

jurisdiction.     The Ninth Circuit’s analysis and application of

the Forgay doctrine to a partition decree in Sekaquaptewa v.

MacDonald, 575 F.2d 239 (9th Cir. 1978), however, is helpful to

our present jurisdictional query and supports this court’s

conclusion that an order confirming a partition sale is

      11
         Hawai#i’s case law has established that an order appointing a
commissioner and directing a partition sale (e.g., a partition decree) is an
interlocutory order that is not appealable unless allowed by the trial judge.
See Cooke Trust Co., Ltd. v. Ho, 43 Haw. 243 (Terr. 1959).

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appealable under the Forgay doctrine.        There, the Ninth Circuit

inquired as to whether it had jurisdiction to review an appeal of

a partition judgment, which ordered a partition sale that would

effectively transfer separate possession from one party to

another and use of lands previously held jointly.           Sekaquaptewa,
575 F.2d at 241-42.    Recognizing the pragmatic construction given

to the finality requirement, the court addressed the narrow

relaxation of the finality rule for orders transferring property

announced in Forgay v. Conrad and concluded that even though the

partition judgment did not direct the immediate delivery of

property, the order had the effect of depriving one group of

property owners of property they previously occupied and,

therefore, the hardship of relocation would be exacerbated by a

refusal to undertake immediate review.         Id. at 243.     The court

determined that the partition judgment was sufficiently “final”

to be appealable.    Id.

          Here, the October 25, 2012 Confirmation Order meets the

requirements of appealability under the Forgay doctrine.

Although the October 25, 2012 Confirmation Order does not command

the immediate execution of the property to Trustee Lambert, the

order confirms the sale to Trustee Lambert, directs the

commissioner to convey the property to Trustee Lambert, and

orders the Teisinas to surrender the property within 30 days of

the conveyance.    The Confirmation Order effectively terminates

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the Teisinas’ rights to the property and they will suffer

irreparable injury if appellate review is postponed until final

judgment.

                            III.    Conclusion

            Based on the foregoing, the ICA’s May 16, 2013

Dismissal Order is vacated and the matter is remanded to the ICA

for disposition of the appeal.12

 R. Steven Geshell for                  /s/ Paula A. Nakayama
 petitioners
                                        /s/ Simeon R. Acoba, Jr.
 Philip J. Leas, W. Keoni
 Schultz and Lori K. Amano for          /s/ Sabrina S. McKenna
 respondent
                                        /s/ Richard W. Pollack

                                        /s/ Randal K.O. Lee

     12
         The certiorari application also seeks review of the ICA’s May 29,
2013 order denying the Teisinas’ motion for reconsideration, which is not
reviewable by this court by application for writ of certiorari. Cf. HRS §
602-59(a) (application for writ of certiorari must be filed within a specified
time after the filing of the ICA’s judgment or dismissal order); HRAP 40.1(a)
(same).

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