Court Opinion

ID: 9614477
Source: CourtListenerOpinion
Date Created: 2023-08-22 04:25:55.636019+00
Date Added: 2024-06-11T18:03:36.504205
License: Public Domain

DISSENTING OPINION OF
WAKATSUKI, J.
I concur with the majority’s decision on Count II, but respectfully dissent from the decision on Count I.
The majority, in my opinion, misplaces reliance on Ikeoka. In Ikeoka, the sale of the property in question was not subject to any conditions dependent on the acts of third parties. There was no offer made by the purchaser for acceptance by the seller. Further, the seller accepted $5000 in earnest money, cashed the check and advanced the broker a partial payment on his commission prior to refusing to execute the agreement of sale.
The material facts of this case are distinguishable. Here, a copy of a check in the sum of $1,000,000 payable to First American Title Insurance Company evidencing a deposit was attached to the DROA, but First American would not vouch for the value of the check. The record is *381clear that the check was never accepted as a partial payment by the sellers. The language in the DROA and the June 13th letter of Fulcrum’s attorney to Mr. Roy Kelley, construed strictly and in its plain meaning, clearly indicates that Fulcrum submitted an offer to purchase the hotels in question to the sellers for their acceptance.
The letter attached to the DROA states as follows:
“Dear Mr. Kelley:
For your review and files, enclosed is a copy of our offer to purchase the hotels discussed. The original and three (3) copies have been sent to Mr. Cotter. (Emphasis added.)
Cordially,
Henry Martin”
The material parts of the June 13th letter from Fulcrum’s attorney to Mr. Roy Kelley states as follows:
“As you are aware, Fulcrum Capital Corporation met with Mr. Cotter in Los Angeles very soon after our meeting and submitted a written offer for the hotels on Thursday, June 12th. It is my understanding that three copies of the offer were sent to Mr. Cotter, and an additional copy was mailed to you.
My client. Fulcrum Capital Corporation is fully prepared to complete the purchase, and we are looking forward to your acceptance of the offer."
(Emphasis added.)
The sellers never accepted the submitted offer, but instead, made a counter-offer to Fulcrum which was not accepted. Not having accepted the offer to purchase in writing, the DROA falls within the Statute of Frauds, and therefore, the DROA is unenforceable. See, Hawaii Revised Statutes § 656-1; Carter v. Notley, 32 Haw. 183, 187 (1931); Cf. Perreira v. Perreira, 50 Haw. 641, 642, 447 P.2d 667 (1968).
Furthermore, the special conditions contained in the DROA reiterates “an offer for acceptance”, to-wit:
“8. SPECIAL CONDITIONS:
1. This offer is subject to any one of the following conditions:
a.) Buyer obtaining financing within 90 days of Seller’s acceptance of this purchase contract
b.) Assignment of all ground leases and other leases.
c.) renegotiation of all ground leases to provide for such fixed terms as are necessary to obtain financing.
2. Seller shall upon acceptance of this purchase contract deliver *382to buyer audited operating statements for the four hotels named herein covering periods 1975 to present year to date.
3. Buyer agrees that Mr. & Mrs. Roy Kelley shall have the use of the Penthouse located in the “Waikiki Tower Hotel” for a period of five years from closing.”
(Emphasis added.)
It is clear that the “offer to purchase” was subject to several material conditions. Based on the foregoing documents in evidence, the failure of the sellers to execute the DROA is not, as a matter of law, an act of bad faith. The sellers were entitled to reject the offer, or to propose a “counter-offer” to Fulcrum. See, Honolulu Rapid Transit v. Paschoal, 51 Haw. 19, 449 P.2d 123 (1968); Francone v. McClay, 41 Haw. 72, 78 (1955).
The April 28th listing agreement indicates that a commission of five per cent will be paid when the purchase is consummated. The pertinent paragraph of the listing agreement states as follows:
“It is presumed that if they purchase the properties, we will pay a commission based on five percent (5%) of the gross. If they fail to consummate the purchase within thirty days, the potential purchase will be null and void.”
Fulcrum offered to purchase subject to, inter alia, two material conditions which the sellers had no control over; the obtaining of adequate financing from a lender, and the obtaining of favorable fixed-term ground leases to meet financing requirements that may be imposed by a lender. Even if the sellers executed .the DROA, the sale may or may not have been consummated based on whether the two conditions enumerated in the DROA were met. Under these circumstances, it is inconceivable that Property House earned a commission by bringing forth to the sellers a potential purchaser, especially when the offer to purchase is subject to certain favorable actions by third parties. Absent a consummation of the sale in question, Property House should not be entitled to any commissions.
Property House had the burden to prove that there was a valid offer to purchase the hotels in question and a valid acceptance thereof; that Fulcrum was willing and able to perform, and that either the sale was consummated, or that the sellers breached the binding offer and acceptance agreement between Fulcrum and the sellers. Here, Property House failed in all respects.
I would affirm the trial court’s decision for the foregoing reasons.