Court Opinion

ID: 4177950
Source: CourtListenerOpinion
Date Created: 2017-06-15 22:09:29.473803+00
Date Added: 2024-06-11T07:47:13.949923
License: Public Domain

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                                                              Electronically Filed
                                                              Supreme Court
                                                              SCWC-13-0000449
                                                              15-JUN-2017
                                                              08:28 AM

           IN THE SUPREME COURT OF THE STATE OF HAWAI#I

                                ---o0o---

              IN THE MATTER OF THE ISHIDA-WAIAKAMILO
                  LEGACY TRUST DATED JUNE 27, 2006

                                    AND

                 IN THE MATTER OF THE ISHIDA-WINANT
                  LEGACY TRUST DATED JUNE 27, 2006

                            SCWC-13-0000449

         CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
               (CAAP-13-0000449, CAAP-13-0000450;
                 T. NOS. 12-1-0080 and 12-1-0081)

                              JUNE 15, 2017

 RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON, JJ.

             OPINION OF THE COURT BY RECKTENWALD, C.J.

          This case arises from the administration of two

irrevocable trusts established by Richard and Rachel Ishida:                the

Ishida-Waiakamilo Legacy Trust (Waiakamilo Trust), and the
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Ishida-Winant Legacy Trust (Winant Trust) (collectively, “the

Trusts”).    The Trusts name as beneficiaries the Ishidas’

daughters Jeri S. Wilson (Jeri) and Juney M. Ishida (Juney), and

their granddaughter Kauialohaokalani R. Wilson (Kaui), but they

expressly exclude the Ishidas’ third daughter, Richardeen Kimura

(Deenie).    Six years after the creation of the Trusts, the

Ishidas filed petitions in Probate Court of the First Circuit

(probate court) requesting rescission of both Trusts.            The

Ishidas alleged that they never intended to make the Trusts

irrevocable, and that Jeri had wrongfully transferred ownership

of property from the Waiakamilo Trust to herself.           Jeri and Juney

opposed the petitions.

            The probate court found that the transfer of property

to Jeri had violated the terms of the Waiakamilo Trust, ordering

the property returned to the Trust; it declined to rescind or

reform the Trusts.    The Ishidas appealed to the Intermediate

Court of Appeals (ICA), which affirmed the probate court’s denial

of their petitions.

            The Ishidas’ Application for Writ of Certiorari

presents two issues to this court:        1) whether that the probate

court’s failure to return the Waiakamilo Trust property to the

Ishidas was an abuse of discretion in light of alleged wrongdoing

by Jeri, and 2) whether the ICA improperly discounted the

evidentiary value of the Ishidas’ petitions, which were verified

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pursuant to Hawai#i Probate Rules (HPR) Rule 5(a).

          First, we hold that the probate court did not err in

denying the Ishidas’ requested relief, as the matter was within

the court’s equitable discretion.        Second, we affirm the ICA’s

holding that the probate court was not required to accept the

Ishidas’ petitions at face value, and in doing so we clarify the

status of HPR Rule 5(a) statements in relation to other types of

testimonial evidence.

                             I. Background

          The Ishidas hired an attorney to draft documents

creating the Trusts, which they executed on June 27, 2006.             The

Ishidas settled each Trust with a single residential and/or

commercial property.     Jeri and Juney were named as trustee for

the Waiakamilo Trust and Winant Trust, respectively.            The

Waiakamilo Trust designates Jeri as beneficiary, with full

ownership of the Trust’s property passing to Jeri’s daughter Kaui

upon Jeri’s death.    The Winant Trust provides that its property

will be distributed to Juney as beneficiary upon the death of the

Ishidas, with full ownership passing to Kaui upon Juney’s death.

The Trusts are irrevocable, with both including the following

provision:

          Section 3. Irrevocable Trust
          Our Trust is irrevocable. Except as expressly herein
          provided to the contrary, no Trustor or any other
          person shall have any right or power to alter, amend,
          or in any manner whatsoever modify any of the
          provisions hereof.

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          Additionally, both the Waiakamilo Trust and the Winant

Trust specifically exclude the Ishidas’ third daughter, Deenie,

with both Trusts including the following provision:

          c. Exclusions
          We hereby exclude RICHARDEEN R. KIMURA and such
          person’s descendants as beneficiaries under our Trust
          Agreement, including without limitation for the
          purposes of intestate succession. For the purposes of
          our Trust Agreement, all excluded persons shall be
          treated as having died prior to the execution of our
          Trust Agreement.

          On March 28, 2007, Jeri and the Ishidas executed a

series of deeds, transferring ownership of the Waiakamilo Trust

property (Waiakamilo Property) from the trust to Jeri personally.

          On May 4, 2012, the Ishidas filed in probate court a

Petition for Rescission of Warranty Deed, Imposition of

Constructive Trust and an Order for Disgorgement related to the

Waiakamilo Trust (Waiakamilo Petition), and a Petition for

Reformation of Trust and/or Order Setting Aside the Ishida-Winant

Trust (Winant Petition).      The Ishidas alleged that, although they

had asked their attorney to make simple wills and revocable

trusts as part of their estate planning, their attorney went

against their wishes and designed the Waiakamilo and Winant

Trusts to be irrevocable.      The Ishidas further claimed that Jeri

had schemed with their attorney to transfer the Waiakamilo

Property to Jeri personally in the March 28, 2007 deeds.

Accordingly, the Ishidas asked the probate court to rescind the

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deed transferring the Waiakamilo Property to Jeri, and to set

aside both Trusts and restore ownership of Trust properties to

the Ishidas.   In apparent compliance with HPR Rule 5(a),1 both

petitions included the following text above the Ishidas’

signatures:

          THE UNDERSIGNED UNDERSTANDS THAT THIS DOCUMENT IS
          DEEMED TO INCLUDE AN OATH, AFFIRMATION, OR STATEMENT
          TO THE EFFECT THAT ITS REPRESENTATIONS ARE TRUE AS FAR
          AS THE UNDERSIGNED KNOWS OR IS INFORMED, AND PENALTIES
          FOR PERJURY MAY FOLLOW DELIBERATE FALSIFICATION.

          Jeri and Juney (Respondents) disputed the Ishidas’

account of the Trusts’ creation, claiming that the Ishidas

intentionally made the trusts irrevocable because they had

disinherited Deenie.     Respondents further contended that Deenie

     1
          HPR Rule 5 (1999) provided:

          Rule 5. SIGNING OF PLEADINGS.

                (a) Verification of Pleadings; Affidavits. All
          pleadings (other than those signed by a party’s
          attorney) shall include a statement at the end and
          before the signature of the person presenting the
          pleading to the effect that the person understands
          that the document is deemed to include an oath,
          affirmation, or statement to the effect that its
          representations are true as far as the person
          executing or filing it knows or is informed, and that
          penalties for perjury may follow deliberate
          falsification. Such a statement shall be accepted in
          lieu of an affidavit as to the facts stated in the
          pleading. The signature of an applicant in informal
          proceedings shall be notarized.

                If a pleading requires consideration of facts
          not appearing of record or verified as provided above,
          it shall be supported by affidavit, signed by the
          person having knowledge of the facts and competent to
          testify. An attorney may submit a declaration in lieu
          of an affidavit to support facts outside of the
          record.

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had recently reconciled with their parents, and that she was

behind the petitions.      Respondents also alleged that the transfer

of property from the Waiakamilo Trust to Jeri personally had been

done with the Ishidas’ knowledge in order to avoid “issues”

raised by the Ishidas’ accountant.            Respondents concluded that

“further discovery into the Ishidas’ allegations is required as

they raise issues of material fact,” asking that both petitions

be assigned to the civil trials calendar pursuant to HPR Rule

20(a).2

            The Ishidas replied to Respondents’ objections,

asserting, “[w]hile the allegations against Deenie are absolutely

untrue, they are irrelevant and the Ishidas will not address

them.”    The Ishidas urged the probate court to grant their

petitions forthwith, arguing that “the equities of the case, as

well as public policy” required immediate relief.           The Ishidas

opposed discovery or otherwise prolonging the proceedings in

court, asserting that “the Court has all the information it needs

to declare the transfer void and return the [Trust properties] to

[their] rightful owners, the Ishidas.”

            After a hearing, the probate court issued an order

rescinding the March 28, 2007 deeds and restoring the Waiakamilo

     2
            HPR Rule 20(a) (1995) provides:

            (a) Assignment. The court by written order may retain
            a contested matter on the regular probate calendar or
            may assign the contested matter to the civil trials
            calendar of the circuit court.

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Property to the Waiakamilo Trust, finding that the transfer had

violated the terms of the Waiakamilo Trust.          However, the probate

court denied all other relief requested.         The Ishidas filed

petitions for reconsideration of the orders, which the probate

court denied, and final judgment was entered for both petitions

on May 2, 2013.

          The Ishidas appealed to the ICA, arguing that the

probate court erred in 1) failing to “right the injustice done to

the Ishidas” by refusing to set aside the Trusts and restore the

Properties to the Ishidas, and 2) failing to reform the Trusts

because they “were a mistake.”       Accordingly, the Ishidas urged

the ICA to reform or set aside the Waiakamilo and Winant Trusts,

or in the alternative, to impose constructive trusts on the

Waiakamilo and Winant Trust properties.

          In a published opinion, the ICA examined each of the

Ishidas’ arguments in turn, finding that the Ishidas had failed

to show by clear and convincing evidence circumstances warranting

the reformation of the Trusts or other equitable relief.            In re

Ishida Waiakamilo Legacy Trust, 138 Hawai#i 98, 103–09, 377 P.3d
39, 44–50 (App. 2016).     Regarding the evidence presented by the

Ishidas, ICA stated:

          On appeal, the Ishidas refer to “compelling evidence”
          and “the clear testimony of the Settlors regarding
          their own intent and the mistake that was made,” in
          apparent reference to the Ishidas’ signatures on the
          Waiakamilo Petition following a statement that:

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                THE UNDERSIGNED UNDERSTANDS THAT THIS DOCUMENT
                IS DEEMED TO INCLUDE AN OATH, AFFIRMATION, OR
                STATEMENT TO THE EFFECT THAT REPRESENTATIONS ARE
                TRUE AS FAR AS THE UNDERSIGNED KNOWS OR IS
                INFORMED, AND PENALTIES FOR PERJURY MAY FOLLOW
                DELIBERATED FALSIFICATION.

          . . . .

          As set forth in HPR Rule 5(a), this attestation is
          accepted in lieu of a sworn affidavit to the same
          effect, i.e., that the information contained therein
          is true as far as the affiant knows or is informed,
          and thus satisfied the requirements of the rule. It is
          not, however, identical in every way to testimony that
          has been subject to cross-examination, or a sworn
          affidavit, or a declaration made under penalty of law,
          that specified factual statements are true and
          correct. It is within the province of the trial court
          to determine the credibility of a witness and the
          weight to be given to a witness’s testimony.
          See, e.g., Tamashiro v. Control Specialist, Inc., 97
          Hawai#i 86, 92, 34 P.3d 16, 22 (2001). Written
          testimony that could be based upon limited memory or
          knowledge, or information and belief, rather than
          personal knowledge, particularly testimony that
          purports to reflect the joint recollection and intent
          of two people, without distinction, might reasonably
          be viewed as less reliable or less convincing than
          other forms of evidence.

Id. at 106–07, 377 P.3d at 47–48.

          The ICA also determined that the creation of the

irrevocable trusts was not “so inherently improvident and

unreasonable” that the probate court was required to infer that

it was the product of delusion or mental infirmity.           Id. at 109,

377 P.3d at 50 (citing Love v. Love, 17 Haw. 206, 215 (1905)).

Accordingly, the ICA concluded that the probate court did not

abuse its discretion when it declined to impose a constructive

trust on the Trust properties or otherwise return them to the

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Ishidas.    Id.   The ICA thus affirmed the probate court’s

judgments.     Id.

                         II.   Standards of Review

A.    Equitable Relief

            “The relief granted by a court in equity is

discretionary and will not be overturned on review unless the

circuit court abused its discretion by issuing a decision that

clearly exceeds the bounds of reason or disregarded rules or

principles of law or practice to the substantial detriment of the

appellant.”     Aickin v. Ocean View Invs. Co., Inc., 84 Hawai#i

447, 453, 935 P.2d 992, 998 (1997) (internal quotation marks,

citation, and brackets omitted).

B.    Interpretation of Court Rules

            The interpretation of a court rule is reviewed de novo.

Sierra Club v. Dep’t of Transp., 120 Hawai#i 181, 197, 202 P.3d
1226, 1242 (2009).

                               III.   Discussion

            In their Application for Writ of Certiorari, the

Ishidas argue that the ICA erred in 1) holding that the probate

court did not abuse its discretion when it declined to impose a

constructive trust on the Waiakamilo Property or otherwise return

it to the Ishidas; and 2) concluding that the Ishidas’ statements

in their petitions were “less reliable and less convincing,” even

though those statements were verified pursuant to HPR Rule 5(a).

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A.    Denial of Equitable Relief

            The ICA did not err in finding that the Ishidas failed

to produce clear and convincing evidence that the Trusts were the

result of mistake or other grounds justifying equitable relief.

            “A constructive trust arises where a person holding

title to property is subject to an equitable duty to convey it to

another on the ground that he would be unjustly enriched if he

were permitted to retain it.”         Kam Oi Lee v. Fong Wong, 57 Haw.
137, 139, 552 P.2d 635, 637 (1976) (citation omitted).               Hawai#i

courts will impose a constructive trust “where the evidence is

clear and convincing” that the grantee will be unjustly enriched

if allowed to retain the entire property.           Maria v. Freitas, 73
Haw. 266, 274, 832 P.2d 259, 264 (citation omitted).               The

Restatement (Third) of Property explains the rationale for this

high standard:

            When a donative document is unambiguous, evidence
            suggesting that the terms of the document vary from
            intention is inherently suspect but possibly
            correct. . . . Only high-safeguard allowance of
            extrinsic evidence achieves the primary objective of
            giving effect to the donor’s intention.

Restatement (Third) of Property § 12.1 cmt. b (Am. Law Inst.

2003) (emphasis added).

            Here, the Waiakamilo Trust is unambiguous, stating in

bold type that it is an irrevocable trust.           The Ishidas thus had

to offer clear and convincing evidence that Jeri would be

unjustly enriched if the Waiakamilo Trust remained unaltered.

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They failed to do so.       The Waiakamilo Petition made a colorable

argument that the Ishidas did not intend to make the Waiakamilo

Trust irrevocable, but Respondents made an equally plausible

argument that the Ishidas simply changed their minds regarding

the Trusts as a result of their alleged reconciliation with

Deenie.    Moreover, the Ishidas provided little evidence to

support their arguments beyond the bare assertions in the

Waiakamilo Petition, and they opposed discovery or assignment of

their case to the civil trials calendar–-steps which might have

allowed them to adduce additional evidence in support of their

position.     Faced with two competing stories and scant evidence,

it was well within the probate court’s discretion to deny

equitable relief.      See, e.g., Aickin 84 Hawai#i at 449 n.1, 935
P.2d at 994 n.1 (“Equity is a discretionary remedy; the trial

court was not obligated to grant it.”).           Thus, the ICA did not

err in affirming the probate court’s denial of the Ishidas’

request to impose a constructive trust upon the Waiakamilo

Property.

B.    Verification

            The Ishidas argue that the ICA erred “because it should

have treated the Ishidas’ account of their intent and experiences

as personal, and thus constituted personal knowledge.”              In

support of this contention, the Ishidas cite HPR Rule 5(a),

arguing that pursuant to this rule their petitions “had the

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effect of an affidavit.”       The Ishidas also assert that the ICA

displayed “uncritical reliance” on similarly verified statements

from Respondents’ briefs, arguing that there is “no principled

reason to treat the Ishidas’ and Jeri/Juney’s Rule 5(a)

statements differently, as the ICA did.”3          Lastly, the Ishidas

argue that the ICA’s position “will undermine the Rule 5(a)

verification” routinely relied upon in probate filings.

            We agree with the Ishidas’ argument to the extent that

a portion of the ICA’s opinion does have the potential to

“undermine Rule 5(a) verification.”         Referring to the

verification language in the Ishidas’ petitions,4 the ICA stated:

            It is not, however, identical in every way to
            testimony that has been subject to cross-examination,
            or a sworn affidavit, or a declaration made under
            penalty of law, that specified factual statements are
            true and correct.

In re Ishida Waiakamilo Legacy Trust, 138 Hawai#i at 107, 377
P.3d at 48 (emphasis in original).

            To the extent that this sentence suggests that a

statement verified pursuant to HPR Rule 5(a) has less evidentiary

      3
            Although the ICA refers to claims made in Respondents’ verified
statements, it does not make findings regarding the veracity of these claims.
See, e.g., In re Ishida Waiakamilo Legacy Trust, 138 Hawai#i at 108, 377 P.3d
at 49 (“in her objection, Jeri averred that . . . .”)
      4
            As noted above, the following text based on HPR Rule 5(a) is
printed above the signature block on the Waiakamilo and Winant Petitions:

            THE UNDERSIGNED UNDERSTANDS THAT THIS DOCUMENT IS
            DEEMED TO INCLUDE AN OATH, AFFIRMATION, OR STATEMENT
            TO THE EFFECT THAT ITS REPRESENTATIONS ARE TRUE AS FAR
            AS THE UNDERSIGNED KNOWS OR IS INFORMED, AND PENALTIES
            FOR PERJURY MAY FOLLOW DELIBERATE FALSIFICATION.

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weight than a sworn affidavit, it is in error.          HPR Rule 5(a)

provides that a verified statement “shall be accepted in lieu of

an affidavit as to the facts stated in the document.”5              A court

must thus accord a statement verified pursuant to HPR 5(a) the

same evidentiary weight it would a sworn affidavit of identical

content.

           However, on the whole the ICA’s analysis is correct in

its affirmance of the probate court’s judgments.           The ICA did not

display “uncritical reliance” on Jeri and Juney’s verified

petitions, but rather reviewed the record in accordance with the

relevant standard.     As stated in the ICA’s opinion:

           We consider the Ishidas’ verification in the context
           of the clear and convincing evidence standard
           applicable to their request for equitable relief from
           the unambiguous terms of the Waiakamilo Trust.

In re Ishida Waiakamilo Legacy Trust, 138 Hawai#i at 107, 377
P.3d at 48.

           The ICA correctly noted that “it is within the province

of the trial court to determine the credibility of a witness and

the weight to be given to a witness’s testimony.”           Id.     Whether

or not the Ishidas’ statements in their petitions constituted

     5
           As noted by the commentary to HPR Rule 5:

           Because the Registrar processes a large number of
           informal applications filed by pro se applicants, it
           is important to provide an easy mechanism for the
           Registrar to determine that the applicant is who he or
           she claims to be. A notarized signature gives the
           Registrar this proof without adding any significant
           cost to the probate process.

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clear and convincing evidence was a question clearly within the

probate court’s discretion.       The ICA carefully considered the

record, and it correctly concluded that the probate court did not

abuse its discretion in declining to impose a constructive trust

or other otherwise modify the Trusts in light of the evidentiary

burden the Ishidas were required to satisfy.

                            IV.    Conclusion

          For the foregoing reasons, the ICA did not err in

affirming the probate court’s judgment.         Thus, the ICA’s

September 6, 2016 judgment on appeal is affirmed.

Margery S. Bronster,                     /s/ Mark E. Recktenwald
Rex Y. Fujichaku, and
Angela K.H. Jacso                        /s/ Paula A. Nakayama
for petitioners
                                         /s/ Sabrina S. McKenna
Michael A. Lilly and
Valerie M. Kato                          /s/ Richard W. Pollack
for respondents
                                         /s/ Michael D. Wilson

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