Court Opinion

ID: 2654849
Source: CourtListenerOpinion
Date Created: 2014-02-27 01:02:55.98248+00
Date Added: 2024-06-11T12:58:53.702901
License: Public Domain

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                                                               Electronically Filed
                                                               Supreme Court
                                                               SCAP-12-0000764
                                                               25-FEB-2014
                                                               10:39 AM

           IN THE SUPREME COURT OF THE STATE OF HAWAI#I

                            ---o0o---
_________________________________________________________________

                       RAYMOND GURROBAT,
  individually and on behalf of all others similarly situated,
         Petitioner/Plaintiff-Appellee/Cross-Appellant,

                                    vs.

           HTH CORPORATION; PACIFIC BEACH CORPORATION,
       Respondents/Defendants-Appellants/Cross-Appellees.
_________________________________________________________________

                             SCAP-12-0000764

       APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
            (CAAP-12-0000764; CIV. NO. 08-1-2528-12)

                            FEBRUARY 25, 2014

 RECKTENWALD, C.J., NAKAYAMA, AND McKENNA, JJ., WITH ACOBA, J.,
    CONCURRING AND DISSENTING, WITH WHOM POLLACK, J., JOINS

                 OPINION OF THE COURT BY McKENNA, J.

                            I.   Introduction

          This case arises from a class action lawsuit filed

against HTH Corporation and Pacific Beach Corporation

(collectively, “Defendants”), in which Raymond Gurrobat

(“Gurrobat”), individually and on behalf of a class of similarly
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situated persons (“Plaintiff Class”), asserted claims of unlawful

withholding of wages under Hawai#i Revised Statutes (“HRS”) §§

388-6 and 388-10, and unfair methods of competition (“UMOC”)

under HRS §§ 480-2(e) and 480-13(a).         Gurrobat’s claims were

based on alleged violations of Hawaii’s hotel or restaurant

service charge law, HRS § 481B-14 (2008).          Pursuant to HRS

§ 602-58(b)(1) (Supp. 2011), we accepted a discretionary transfer

of this case from the Intermediate Court of Appeals.

          Gurrobat alleged that Defendants charged service

charges to customers of the Pacific Beach Hotel and the Pagoda

Hotel, but failed to distribute the entirety of those service

charges to service employees and failed to disclose to customers

its practice of retaining a portion of those charges.             The

Circuit Court of the First Circuit (“circuit court”)1 granted

summary judgment in favor of Gurrobat on the claim of unlawful

withholding of wages, but in favor of Defendants on the UMOC

claim.

          On appeal, Defendants argued that the circuit court

erred in: (1) granting Gurrobat’s motion for class certification

because he never worked at the Pagoda Hotel and he failed to

establish that he would be an adequate representative of the

     1
          The Honorable Karl K. Sakamoto presided.

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class under Hawai#i Rules of Civil Procedure (“HRCP”) Rule 23;

(2) granting summary judgment in favor of Gurrobat on the claim

for unpaid wages under HRS § 388-6 because he failed to show that

Defendants withheld wages “earned” by class members; (3) granting

double damages and attorneys’ fees/costs, and in concluding that

the Plaintiff Class were entitled to those portions of the

service charge income Defendants had paid to management

employees; (4) imposing joint and several liability against

Defendants; (5) granting final judgment in favor of Gurrobat

because it was premised on a manifest error of fact concerning

Defendants’ status as an “employer”; and (6) denying Defendants’

motion for reconsideration on the basis of judicial and equitable

estoppel with regard to joint and several liability because

neither party requested the imposition of joint and several

liability and it was only first mentioned in the Final Judgment.

          On cross-appeal, Gurrobat argued that the circuit court

erred in granting summary judgment to Defendants under HRS

§ 480-13(a) because: (1) it applied an erroneous legal standard

imposing requirements of proof not required under Davis v. Four

Seasons Hotel Ltd., 122 Hawai#i 423, 228 P.3d 303 (2010) or any

other Hawai#i law; (2) Defendants did not carry their burden of

showing that Gurrobat would be unable at trial to present

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evidence to establish the requisite injury under the applicable

standard; and (3) the record presented genuine issues of material

fact with respect to whether Gurrobat had the requisite injury

for a HRS § 480-13(a) claim.

          We hold that the circuit court did not err with respect

to the issues of: class certification, Gurrobat’s claim for

unpaid wages under HRS Chapter 388, the award of double damages

and attorneys’ fees and costs, and Defendants’ status as an

“employer.”   However, we hold that the circuit court erred in

imposing joint and several liability against the Defendants, and

also erred in denying Defendants’ motion for reconsideration on

the basis of judicial and equitable estoppel with respect to the

issue of joint and several liability.

          Specifically, we hold the following on the issues

raised by the Defendants: (1) Gurrobat established that he could

fairly and adequately protect the interests of the class members;

(2) a service charge is compensation “earned” as tip income under

HRS Chapter 388; (3) the Plaintiff Class was entitled to the

portion of the service charges that Defendants paid to

“management employees,” and to double damages and attorneys’

fees/costs because there was no equitable justification for

Defendants’ service charge distribution practices; (4) HTH

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Corporation and Pacific Beach Corporation are not jointly and

severally liable; (5) HTH Corporation is an “employer”; and (6)

judicial and equitable estoppel did not apply to Defendants’

joint and several liability arguments in its motion for

reconsideration.

            As to Gurrobat’s cross appeal, we hold that the circuit

court erred in granting Defendants’ motion for summary judgment

on Gurrobat’s UMOC claim because Gurrobat satisfied the “nature

of the competition” requirements set forth in Davis by alleging

and proving (1) how Defendants’ HRS § 481B-14 violation

negatively affected competition and (2) that the injury to his

property flowed from Defendants’ conduct that negatively affects

competition.

                               II.   Background

A.    Factual Background

            The instant case involves a class action lawsuit,

alleging that Defendants withheld tip income from non-management

employees who provided food and beverage services at the Pacific

Beach Hotel and the Pagoda Hotel (sometimes collectively referred

to as “Hotels”).      Defendants HTH Corporation and Pacific Beach

Corporation together operate the Pacific Beach Hotel on O#ahu,

Hawai#i; and Defendant HTH Corporation operates the Pagoda Hotel

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on O#ahu, Hawai#i.   The certified Plaintiff Class consists of all

non-management employees of the Hotels who provided services in

connection with the sale of food and/or beverages on and after

December 8, 2004, for which a service charge or gratuity was

imposed by the Hotels, and not distributed one-hundred percent to

those service employees.

          Gurrobat was an employee at the Pacific Beach Hotel

from February 1990 until December 2007.         Between December 8, 2004

and December 2007, and at other times prior to that period,

Gurrobat worked as a food and beverage server at numerous

banquets and other functions at the Pacific Beach Hotel.

Gurrobat did not at any point work at the Pagoda Hotel; he

claimed, however, that “[s]imilar functions, served by other

members of the Class, took place at the Pagoda Hotel during the

Class Period.”

          According to Defendants, the practice for distributing

service charges at the Pacific Beach Hotel was generally to

distribute eighty-five percent (85%) of service charges to

service employees and fifteen percent (15%) to managerial

employees (e.g., catering coordinator and pastry chef); the

practice at the Pagoda Hotel was generally to distribute

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eighty-two percent (82%) of service charges to service employees

and eighteen percent (18%) to managerial employees.

B.    Circuit Court Proceedings

      1.    Gurrobat’s Complaint

            On December 8, 2008, Gurrobat, individually and on

behalf of the Plaintiff Class, filed suit against Defendants.

Gurrobat alleged that, as operators of the Pacific Beach Hotel

and the Pagoda Hotel, Defendants charged customers at the Hotels

a “service charge” or “gratuity” that was calculated as a

percentage of the total cost of food and beverage (typically,

between seventeen and twenty percent), failed to distribute the

entirety of these service charges to non-managerial employees who

served the customers, and failed to clearly disclose to customers

that portions of the service charges were not distributed to

non-managerial employees.        Gurrobat claimed that this practice

violated HRS § 481B-14, that any violation of Chapter 481B was

deemed to be an UMOC under HRS § 480-2; therefore, members of the

proposed class were entitled to treble damages under HRS

§ 480-13(a).     Gurrobat sought (1) a declaratory judgment that

Defendants’ practice of retaining a portion of the service charge

without clearly disclosing so to customers was an UMOC, and (2)

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an injunction prohibiting Defendants from further engaging in

this practice.

          On March 29, 2010, this court issued its decision in

Davis v. Four Seasons Hotel, holding in part, that the “nature of

the competition” must be sufficiently alleged in a complaint to

bring a claim for damages under HRS §§ 480-2(e) and 480-13(a) for

a violation of HRS § 481B-14.       122 Hawai#i at 425, 228 P.3d at

305.

          Gurrobat then amended his complaint on May 24, 2010,

supplementing his claim for damages under HRS §§ 480-2(e) and

480-13(a) by adding the following allegations regarding the

“nature of the competition” affected by Defendants’ conduct:

          18.   The competition in which Defendants are engaged or
          participating is the competition with other providers of
          hotel, restaurant and banquet services. Defendants derive
          an unfair advantage over their law-abiding competitors by
          (a) lowering their overall costs through the means of
          retaining tip income due under law to Plaintiff and other
          Class members, (b) attracting customers by being able to
          offer seemingly lower “base” prices than law-compliant
          competitors through the retention of tip income, and (c)
          misleading customers into believing that the service charge
          will be paid as tip income and thereby obtaining the
          business of customers through an unfair and illegal business
          advantage over law-compliant hotels, restaurants and banquet
          service providers.

          19.   These unfair competitive advantages were gained by
          Defendants at the direct expense of Plaintiff and other
          members of the Class, and Plaintiff and the Class members
          were injured as a result of Defendants’ unfair method of
          competition and the Defendants’ unfair competitive behavior
          in the hotel food and beverage market.

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          On July 15, 2013, this court issued its decision in

Villon v. Marriot Hotel Services, Inc., 130 Hawai#i 130, 306 P.3d

175, holding that when a hotel or restaurant applying a service

charge for the sale of food or beverage services violates HRS

§ 481B–14 by failing to: (1) distribute the full service charge

directly to its employees as “tip income” (in other words, as

“wages and tips of employees”), and (2) disclose this practice to

the purchaser of the services, an employee may bring an action

under HRS §§ 388–6 (1993), –10 (1993 & Supp. 1999), and –11 (1993

& Supp. 1999) to enforce employees’ rights and seek remedies.

130 Hawai#i at 132-33, 306 P.3d at 177-78.

          Gurrobat then filed a Second Amended Complaint on

August 31, 2010, also asserting that based on Defendants’

violation of Hawaii’s wage and hour laws under HRS § 388-6 by

virtue of their violations of HRS § 481B-14, he was entitled to

double damages under HRS § 388-10.

          Defendants filed their Answer to the Second Amended

Complaint on September 10, 2010 and asserted, inter alia, that

the complaint failed to state a claim upon which relief could be

granted and that Gurrobat lacked standing to bring some or all of

his claims.   Defendants, however, admitted that they (1) charged

a service charge to customers at banquets and other functions

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held at the Hotels, (2) generally distributed eighty-five percent

(85%) of the service charge income to service employees, and (3)

generally distributed the remaining fifteen percent (15%) of said

service charge income to Defendants’ managerial employees.

     2.   Class Certification

          On February 8, 2010, Gurrobat filed a motion for class

certification and for approval of class notice and dissemination

plan pursuant to HRCP Rule 23.2       He stated:

          All four of the requirements of HRCP Rule 23 are satisfied
          here. The Class consists of in excess of 157 employees and
          is therefore presumptively too numerous to make joinder
          practical. . . . Class counsel and Mr. Gurrobat will
          adequately represent the class, who has no conflict and
          understands his duties and responsibilities as a class
          representative. . . . All of the Claims of the class arise
          from a common nucleus of operative facts: the putative Class
          consists of Defendants’ employees who served customers of
          the Pacific Beach and Pagoda Hotel who were charged a
          standardized “service charge” or “gratuity” as they
          sometimes call it, on top of the total cost of food and
          beverage, typically ranging between 17% and 20%. Rather
          than distribute all of the service charge as mandated by HRS

     2
          HRCP Rule 23(a) and (b)(2) state in relevant part:
                (a) Prerequisites to a class action. One or more
          members of a class may sue or be sued as representative
          parties on behalf of all only if (1) the class is so
          numerous that joinder of all members is impracticable, (2)
          there are questions of law or fact common to the class, (3)
          the claims or defenses of the representative parties are
          typical of the claims or defenses of the class, and (4) the
          representative parties will fairly and adequately protect
          the interests of the class.
                (b) Class actions maintainable. An action may be
          maintained as a class action if the prerequisites of
          subdivision (a) are satisfied, and in addition:
                      . . . (2) the party opposing the class has acted
                or refused to act on grounds generally applicable to
                the class, thereby making appropriate final injunctive
                relief or corresponding declaratory relief with
                respect to the class as a whole . . . .

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          §481B-14, the Defendant retained some of it without
          providing any disclosure to the consumers.

          Mr. Gurrobat’s claims are not only typical, they are exactly
          the same as that of the entire class. The facts and law
          here are not only universally common as to every class
          member, they are identical, such that Plaintiffs anticipate
          the Court will find by way of dispositive motion that the
          Defendant (sic) violated HRS §481B-14 as a matter of law.
          The only issue anticipated to remain for the jury will be
          how much each employee should be compensated for the monies
          improperly from them withheld over time. This is a
          quintessential class action.

Accordingly, Gurrobat sought certification for the class of all

past and present non-management employees of the Pacific Beach

Hotel and the Pagoda Hotel who provided services in connection

with the sale of food and/or beverages on and after December 8,

2004, for which a service charge or gratuity charge was imposed

by the Hotels and not distributed one-hundred percent to said

non-management employees.

          Defendants filed a memorandum in opposition to

Gurrobat’s motion for class certification on March 1, 2010.              They

contended that Gurrobat’s proposed class incorrectly

distinguished between managerial employees and non-managerial

employees while the plain language of HRS § 481B-14 made no such

distinction, and that the court should make an initial

determination as to whether HRS § 481B-14 required service

charges to be distributed only to “non-management employees.”                In

addition, Defendants argued that Gurrobat failed to meet the

requirements for class certification under HRCP Rule 23 because

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he provided no basis for his estimate of the class size or his

assertion that the amounts in dispute were not of sufficient

magnitude for employees to bring individual lawsuits.             They also

argued that Gurrobat was not a proper class representative

because he was only employed as a food and beverage server at the

Pacific Beach Hotel for a portion of the relevant period, from

December 8, 2004 through December 2007.

          In a reply memorandum dated March 4, 2010, Gurrobat

asserted that HRS § 481B-14 could not be construed to include

non-service managerial personnel because the legislative history

of the statute revealed an intent to protect those employees who

rendered the service for which customers believed they were

tipping and payment of “tip income” could not, therefore, extend

to salaried managers.     In addition, he argued that he had

provided a good-faith estimate of the class size, and Defendants

failed to state a basis for believing that he would not

adequately represent the interests of the certified class.

          After hearing arguments from the parties on March 9,

2010, the circuit court entered an order granting Gurrobat’s

motion for class certification and approving the class notice and

dissemination plan on March 25, 2010.         The certified Plaintiff

Class consisted of:

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           All past and present non-management employees of the Hotels
           who, on and after December 8, 2004, provided services in
           connection with the sales of food and/or beverage at the
           Hotels for which a service charge or gratuity charge was (a)
           imposed by the Hotels and (b) not distributed 100% to said
           non-management employees.

     3.    Defendants’ Motion for Summary Judgment

           Defendants filed a motion for summary judgment on

October 4, 2010.    They argued, among other things, that

distributing a portion of the service charge to managerial

employees was not a violation of HRS § 481B-14, because those

employees were involved in providing banquet services, and the

plain language of HRS § 481B-14 did not preclude managerial

employees from receiving a portion of the service charge as tip

income.   Defendants also argued that Gurrobat failed to provide

any evidence that Defendants’ service charge distribution

practices had a negative effect on competition, as required by

Davis, 122 Hawai#i 423, 228 P.3d 303.3        Finally, they argued that

     3
           Defendants asserted:
           In this case, Plaintiff does not have any evidence to
           support his allegation that the actions of HTH Defendants
           negatively affected competition. . . . Indeed, Plaintiff’s
           lack of evidence is a result of the simple fact that every
           other hotel was doing the same thing that HTH Defendants
           were doing. In fact, the eighty-five percent (85%)/fifteen
           percent (15%) split used by [Pacific Beach Hotel] in
           distributing service charges is a standard provision found
           in many Unite Here! Local 5 Union contracts. The Waikiki
           hotels that contain such a provision in their current union
           contract that HTH Defendants are aware of include: (1)
           Hilton Hawaiian Village; (2) Sheraton Waikiki Hotel; (3)
           Sheraton Moana Surfrider Hotel; (4) Sheraton Princess
           Kaiulani Hotel; (5) Queen Kapiolani Hotel; (6) Hale Koa
           Hotel (75/25 split); (7) Hyatt Regency Waikiki Resort & Spa;
                                                                (continued...)

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the legislative history of HRS § 481B-14 precluded Gurrobat from

asserting a claim for unpaid wages because service charges were

not “tips or gratuities of any kind,” and Defendants had not

retained any compensation “earned” by members of the Plaintiff

Class.

               Gurrobat filed a memorandum in opposition to

Defendants’ motion for summary judgment on October 20, 2010.                     He

argued that Defendants were not entitled to summary judgment

because it was undisputed that a portion of the service charge

was not distributed to either service employees or managers, as

required by HRS § 481B-14 and, in any event, managerial employees

were not entitled to share in the distribution of service

charges.       Gurrobat also argued that, even if he could not

identify a law-compliant competitor who distributed the entire

service charge to its service employees, he had satisfied the

requirements of Davis, 122 Hawai#i 423, 228 P.3d 303, because his

expert witnesses could identify the “nature of the competition”

and the negative impact on competition caused by Defendants’

practice of retaining a portion of the service charge.4                 Finally,

3
    (...continued)
               (8) Waikiki Beach Marriot Resort & Spa; (9) Kahala Hotel;
               (10) Royal Hawaiian Hotel; and (11) Ala Moana Hotel.

         4
               Gurrobat explained:
               Plaintiff has two expert witnesses who will identify the
                                                                   (continued...)

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he argued that neither the language nor the legislative history

of HRS § 481B-14 precluded the use of HRS § 388-6 as a mechanism

to enforce employees’ right to receive tip income.

               In a reply memorandum filed on October 25, 2010,

Defendants reiterated that Gurrobat was required to prove that

the Hotels’ service charge distribution practices had an anti-

competitive effect, that his expert witnesses were unaware of

whether the Hotels had gained a competitive advantage as a result

of these practices, and that these witnesses could not identify a

single hotel that distributed the entire service charge to its

service employees.

               After hearing arguments on this motion on November 17,

2010, the court concluded that there were no genuine issues of

material fact, and that Gurrobat failed to present evidence of an

anticompetitive injury where the testimony of his two expert

witnesses were not sufficiently based on facts.               It explained:

               The Court agrees with defendant’s position here.   The
               standards are provided in Davis v. Four Seasons.   Basically

4
    (...continued)
               “nature of the competition” and describe the impact on
               competition of Defendants helping themselves to the tip
               income that belongs to Plaintiff and the Class. Long-time
               isle hotelier Andre Tatibouet and Bank of Hawaii‘s now-
               retired chief economist Paul Brewbaker are serving as
               Plaintiff’s experts and have provided the relevant opinions
               that any hotel that complies with the law by distributing
               the entire service charge has higher labor costs and pricing
               structure than Defendants and is therefore at a competitive
               disadvantage to Defendants.

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          the plaintiff must still allege and prove antitrust injury
          by alleging the nature of competition in order to ensure
          that the injury results from a competitive-reducing aspect
          or effect of defendant’s behavior.

          It’s not that plaintiffs don’t have a basis or a cause of
          action to raise. The Court is ruling basically on there
          being no material issue of fact with regard to the evidence
          that will be introduced to support the anticompetitive
          injury aspect of the case.

          And specifically foundationally the Court believes that the
          expert or the plaintiff’s two experts had to have at least a
          foundation in fact or evidence of one or the other of the
          following:

          One, that there was another hotel that either did not
          require service charges or required service charges and then
          distributed 1009 [sic] percent of them to its service
          employees or disclosed the withholding to its customers.
          And basically the two experts had no knowledge of an
          existent market at all or the existence of any hotel that
          could provide either one of those two.

          On that basis, the opinions were not minimally based on
          facts. And for that reason, the defendant’s motion is
          granted.

          On December 2, 2010, the court entered an order

granting summary judgment in favor of Defendants on Gurrobat’s

UMOC claim under HRS § 480-2, but denying summary judgment on the

claim for unpaid wages under HRS § 388-6.

     4.   Gurrobat’s Motion for Partial Summary Judgment

          Gurrobat filed a motion for partial summary judgment as

to Defendants’ violation of HRS Chapter 388 on October 4, 2010.

He argued that he was entitled to judgment as a matter of law

where, according to Defendants’ own admissions, a portion of the

service charge income was not distributed directly to service

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employees as required by HRS § 480B-14, and this practice was not

clearly disclosed to customers paying the service charge.

          Defendants filed a memorandum in opposition to

Gurrobat’s motion on October 20, 2010.         They argued that HRS §

481B-14 provided the exclusive remedy for Gurrobat’s claims, and

that the legislative history revealed a decision not to permit

such claims under HRS § 388-6.       Defendants also argued that the

service charge did not constitute “tips or gratuities of any

kind” under HRS § 388-6, and that they did not retain any

compensation “earned” by members of the Plaintiff Class.

Finally, they argued that, even if Defendants had inadvertently

withheld portions of the service charge, Gurrobat could not

assert a claim for those amounts intended to be distributed to

managerial employees rather than service employees.

          In a reply memorandum filed on October 25, 2010,

Gurrobat argued that neither the language nor the legislative

history underlying HRS § 481B-14 precluded an independent claim

under HRS § 388-6.     He asserted that the “tip income” required to

be paid to employees under HRS § 481B-14 constituted

“compensation” under HRS Chapter 388, the term “employees” in HRS

§ 481B-14 referred to those employees who rendered the service

for which the customers believed they were tipping, there was no

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genuine issue of material fact as to whether the service charge

income withheld by Defendants was “earned” by members of the

Plaintiff Class, and Defendants’ practice of withholding a

portion of this income for managerial employees violated HRS

§ 481B-14.

           During the November 17, 2010 hearing on this motion,

the circuit court concluded that HRS § 481B-14 should be read in

pari materia with HRS § 388-6, that the legislative history of

this statute indicated an intent to protect service employees

rather than managerial employees, that service charges

constituted “compensation” under HRS § 388-6, and that Gurrobat

was entitled to partial summary judgment based on the undisputed

facts of this case.

           On December 6, 2010, the court entered an order

granting Gurrobat’s motion for partial summary judgment as to the

claim for unpaid wages under HRS Chapter 388.           In doing so, it

adopted the reasons set forth during its November 17, 2010

hearing.

     5.    Gurrobat’s Motion for Summary Judgment on Damages

           On May 23, 2011, Gurrobat filed a motion for summary

judgment as to damages, arguing that based on Defendants’

admissions and the court’s ruling as to liability, there were no

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genuine issues of material fact regarding damages.            He argued

that pursuant to HRS § 388-10, the Plaintiff Class was entitled

to double the service charges wrongfully withheld by Defendants

and interest at a rate of six percent per year from the date when

the service charges should have been paid, as well as reasonable

attorneys’ fees and costs.5

          Defendants filed a memorandum in opposition to the

motion on July 26, 2011.      They argued that both Gurrobat’s motion

and the accompanying report of Thomas A. Loudat should be

stricken as untimely, and also, that there were genuine issues of

material fact as to the amount of damages the Plaintiff Class was

entitled to recover.     In addition, Defendants argued that they

had equitable justification for not distributing one-hundred

percent of service charge income to service employees.             In

addition, Defendants argued that Plaintiffs were time-barred from

recovering damages for service charges paid before December 8,

2006 because pursuant to HRS § 378-5, claims for back pay were

subject to a two-year statute of limitations.

     5
          HRS § 388-11 provides in relevant part:
          The court in any action brought under this section shall, in
          addition to any judgment awarded to the plaintiff or
          plaintiffs, allow interest of six per cent per year from the
          date the wages were due, costs of action, including costs of
          fees of any nature, and reasonable attorney's fees, to be
          paid by the defendant.

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              In a reply brief dated July 29, 2011, Gurrobat argued

that (1) the motion was timely filed more than 50 days before the

scheduled trial date, (2) there were no remaining issues of fact,

(3) Defendants could not claim equitable justification for

violating a statute of which they had full knowledge, and (4) his

claims were not limited to a two-year statute of limitations

because pursuant to HRS § 657-1(4) governing “Limitation of

Actions” for “Personal Actions,”6 a six-year statute of

limitations applied to Gurrobat’s claim for damages.

              After hearing arguments on this motion, the court

entered an order on August 24, 2011, granting summary judgment as

to damages and awarding $1,678,783.00 in damages to the Plaintiff

Class.

      6.      The Court’s Amended Final Judgment

              On January 18, 2012, the court entered an order

granting Gurrobat’s Motion for (1) “Approval of the Plaintiff

Class’ Counsels’ Fees and Costs to Be Paid by Defendant,” (2)

      6
              A “personal action,” for the purposes of HRS § 657-1(4) has been
defined as:
              an action brought for the recovery of personal property, for
              the enforcement of a contract or to recover for its breach,
              or for the recovery of damages for the commission of an
              injury to the person or property; an action for the recovery
              of a debt, or damages from the breach of contract, or for a
              specific personal chattel, or for the satisfaction in
              damages for injury to the person or property.
Au v. Au, 63 Haw. 210, 217, 626 P.2d 173, 179 (1981) (citations omitted).

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“Approval of the Class Representative Stipend,” and (3) an “Entry

of Final Judgment.”     The court then entered Final Judgment in

favor of Gurrobat and against Defendants in the amount of

$1,984,039.

     7.   Defendants’ Motion for Reconsideration

          Defendants filed a motion for reconsideration on

January 31, 2012.    They argued that Gurrobat was not entitled to

summary judgment on his claim under HRS Chapter 388, because

Defendants did not withhold wages “earned” by members of the

Plaintiff Class; he was not entitled to double damages or fees

and costs under HRS § 388-6 because Defendants were not liable

under HRS § 388-10; he failed to establish his right to hold

Defendants jointly and severally liable for the wages at both

hotels, and his ability to represent class members who had only

worked at the Pagoda Hotel; and he failed to prove that HTH

Corporation was the “employer” of class members.

          The court summarily denied Defendants’ motion on

February 7, 2012.    The court concluded that Defendants had waived

any arguments not previously raised insofar as they were “based

on facts that were known well in advance of the hearing for

summary judgment that disposed of this case.”           The court also

concluded that, based on the totality of the circumstances,

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Defendants were equitably and judicially estopped from raising

new arguments regarding joint and several liability.7

            On August 7, 2012, the court entered an Amended Final

Judgment,8 dismissing Gurrobat’s UMOC claim under HRS § 480-2,

and entering judgment against Defendants in the amount of

$1,984,039.40 on the claim for withheld wages under HRS § 388-6.9

C.    Arguments on Appeal

      1.    Defendants’ Appeal Re: HRS Chapter 388

            Defendants argue on appeal that the circuit court’s

Amended Final Judgment was flawed for several reasons.               First,

they contend that the court erred in granting summary judgment on

the issue of liability because a violation of HRS § 481B-14

      7
            The court explained:
            Throughout the entire course of this case, the Defendants
            have acted as one. Defendants chose to be jointly
            represented by the same legal counsel, filed all of their
            motions and oppositions together, and even shared the same
            representative during settlement conferences. Only after
            summary judgment was granted did Defendants first make an
            argument based on their separate and distinct identities.
            Based on Defendants’ conduct, the Court finds that it was
            reasonable for the Court to rely on such conduct in
            concluding that judgment should be entered against
            Defendants jointly. Accordingly, the Court finds that to
            allow Defendants to raise a new argument based on their
            separate legal identities would be inequitable.

      8
            It appears that the court entered an Amended Final Judgment
because its January 18, 2012 Final Judgment did not specifically resolve all
claims against all parties, as required by HRS § 641-1(a), HRCP Rule 58, and
Jenkins v. Cades Schutte Fleming & White, 76 Hawai #i 115, 869 P.2d 1334
(1994).

      9
            The Amended Final Judgment awarded $1,678,783.00 in damages, and
$305,256.40 in fees/costs, to the Plaintiff Class.

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cannot form the basis of a claim for unpaid wages under HRS §

388-6, which provides a remedy for the wrongful withholding of

compensation “earned” by any employee.10          Second, they argue that

the court erred in certifying the Plaintiff Class because

Gurrobat lacked standing to represent employees of the Pagoda

Hotel and he failed to meet the requirements of HRCP Rule 23.11

Third, Defendants argue that the court erred in imposing joint

and several liability on HTH Corporation and Pacific Beach

Corporation because there was no basis for holding Pacific Beach

      10
            Defendants assert that the court erred in equating “tip income”
under HRS § 481B-14 with “earned compensation” under HRS § 388-6. They state:
            In fact, a worker never “earns” the service fees that are
            above and beyond what he is contractually entitled to. Any
            part of the service fees that an employee might claim as the
            result (solely) of an employer’s failure to make full
            disclosure was simply an unearned windfall.

      11
            Defendants explain that, because Gurrobat never worked at the
Pagoda Hotel, “it is insufficient to rely on unidentified Pagoda Hotel
employees who are purportedly similarly situated to obtain standing to assert
claims with respect to Pagoda Hotel.” They further elaborate:
            For similar reasons, Gurrobat failed to establish that his
            claims are typical of the claims of the class
            members—especially those employed at Pagoda Hotel. Assuming
            arguendo that Gurrobat may have a cause of action against
            Pacific Beach Corporation, he still could not represent a
            class with claims concerning Pagoda Hotel, which never
            employed him. . . . Nor did Plaintiff proffer any evidence
            supporting any exception to Rule 23’s typicality or adequate
            class representative requirements. . . . Moreover, the
            service charge distribution practices at the Pacific Beach
            Hotel and the Pagoda Hotel differed. Not only were the
            percentage breakdowns of the service charges different, the
            hotels’ definition of “management employee” differed as
            well. Thus, the Circuit Court should not have accepted
            Gurrobat’s assertion that his claim was typical of those of
            the class members, since many of the class members were
            allegedly harmed by a different policy.

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Corporation liable for alleged violations at the Pagoda Hotel.12

Fourth, they argue that the court erred in granting summary

judgment as to damages because the measure of damages should have

taken into account the portion of service charge income

distributed to both service employees and managerial employees,

and the question of equitable justification involved a question

of fact.    Fifth, Defendants argue that the court’s judgment was

premised on a manifest error of fact because Gurrobat failed to

present any evidence regarding HTH Corporation’s status as an

“employer” of class members who worked at the Pagoda Hotel.13

Finally, they argue that the court abused its discretion in

invoking judicial and equitable estoppel and denying Defendants’

motion for reconsideration without addressing manifest defects in

the final judgment.

      12
            Defendants contend that Pacific Beach Corporation should not be
held liable for any service charge income due to employees at the Pagoda Hotel
because the alleged violations at each hotel involved separate groups of
employees with different employers, Pacific Beach Corporation had no
managerial responsibility over employees at the Pagoda Hotel, and Gurrobat
failed to establish any nexus between the practices of the Pacific Beach
Corporation and the harm alleged at the Pagoda Hotel.

      13
            Defendants admit that HTH Corporation and Pacific Beach
Corporation collectively operate the Pacific Beach Hotel, and HTH Corporation
operates the Pagoda Hotel. They contend, however, that there was no evidence
that HTH Corporation qualified as an “employer” under HRS Chapter 388.
Instead, they maintain that Pacific Beach Corporation is the employer of all
individuals who work at the Pacific Beach Hotel, and Pagoda Hotel, Inc. is the
employer of all individuals who work at the Pagoda Hotel.

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            In his Answering Brief, Gurrobat asserts that five of

Defendants’ six alleged points of errors were raised for the

first time in their January 31, 2012 motion for reconsideration,

and that the circuit court did not abuse its discretion in

addressing these alleged errors.           He argues that the court did

not err in granting summary judgment on the issue of liability

because “tip income” under HRS § 481B-14 constituted compensation

“earned” under HRS § 388-6.14       Gurrobat also argues that the

court did not err in granting class certification because, by

Defendants’ own admissions, HTH Corporation “owned and operated”

both the Pacific Beach Hotel and the Pagoda Hotel, Pacific Beach

Corporation “operated” both Hotels, and Defendants were therefore

“employers” of Gurrobat and other members of the Plaintiff Class.

He argues that, even if he never worked at the Pagoda Hotel, this

fact would not preclude him from representing the Plaintiff Class

      14
            Gurrobat asserts that the “tip income” referred to in HRS
§ 481B-14 was “earned” compensation because the statute obligated Defendants
to pay such service charge income to members of the Plaintiff Class. He
elaborates:
            Because the Hotel Defendants made no disclosure to consumers
            about using a portion of the service charge for expenses
            other than payments to service employees, the law obligated
            them to pay all of the service charge to class members as
            “tip income.” Hence, by the Hotel Defendants’ own
            definition of “earned” (i.e., not “above and beyond” the
            amount to which the contract entitled an employee), the law
            obligated them to pay the Class members, and the tip income
            compelled by Section 481B-14 was therefore “earned” by
            laboring in a “disclosure-free” environment.

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because he had individual standing to bring his own claims

against both HTH Corporation and Pacific Beach Corporation, and

the requirements of HRCP Rule 23 were met so long as there was a

common defendant who injured all class members.15

            In addition, Gurrobat contends that the court did not

err in awarding damages because managerial employees were not

entitled to service charge income under HRS § 481B-14, and

Defendants could provide no equitable justification for its

withholding of service charge income.          Finally, he argues that

Defendants’ “joint and several” liability arose from their

contractual obligations to pay wages and tip income to employees;

however, even if Defendants’ liability arose in tort, the

practice of withholding service charge income in violation of HRS

      15
            Gurrobat explains that his non-employment at the Pagoda Hotel
would not affect his standing to bring suit against Defendants or his
appropriateness as a class representative. Because he had worked at the
Pacific Beach Hotel, which was operated by HTH Corporation and Pacific Beach
Corporation, he had standing to bring his own claim against both Defendants.
            He further states that, because the Pacific Beach Hotel and the
Pagoda Hotel were both owned by HTH Corporation, and jointly operated by HTH
Corporation and Pacific Beach Corporation, there was no meaningful distinction
between the class segments at the two hotels. He elaborates:
            The fact that some worked at one hotel and some worked at
            another is a difference without a distinction because both
            segments of the Class, the Pacific Beach Hotel workers and
            the Pagoda Hotel workers, worked for a common owner and had
            the same joint operators of their respective hotels. The
            only differences were thus location and perhaps dollar
            amounts. However, the Hotel Defendants have not shown that
            such differences between the two segments of the Class make
            Gurrobat inadequate or non-typical as a [HRCP] Rule 23
            representative.

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§ 388-10 constituted an intentional tort for which joint and

several liability could be imposed.

            Defendants reply that Gurrobat’s procedural arguments

for dismissing their appeal lack merit because they did not waive

any of the arguments they now raise.          They contend that Gurrobat

misstates the record by asserting that Pacific Beach Corporation

operated the Pagoda Hotel,16 there was no evidence of a nexus

between Pacific Beach Corporation and the Pagoda Hotel, there was

no basis for joint and several liability, and there was no

connection between Gurrobat and the employment practices or

policies at the Pagoda Hotel.         In addition, they reiterate their

argument that “service charges” under HRS § 481B-14 cannot be

construed to constitute “earned” compensation for purposes of

recovering unpaid wages under HRS § 388-6.

      2.    Gurrobat’s Cross-Appeal Re: HRS Chapter 480

            Gurrobat argues on cross-appeal that the circuit court

erred in granting partial summary judgment in favor of Defendants

      16
              Defendants contend that Gurrobat relies on a settlement conference
statement, in which Pacific Beach Corporation and HTH Corporation stated that
they operated the Pagoda Hotel. They argue, however, that this statement did
not constitute an admission by Defendants because it was not admissible under
Hawai #i Rules of Evidence Rule 408 and it was a mistake that conflicted with
Defendants’ statements throughout the litigation. In support of this
position, they point out that Defendants objected to Gurrobat’s proposed Final
Judgment on the ground that Pacific Beach Corporation did not own or operate
the Pagoda Hotel and, therefore, should not be liable for the entire amount of
the judgment.

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on his UMOC claim.      Specifically, he contends that the court

misunderstood and misapplied the requirements of Davis v. Four

Seasons Hotel Ltd., 122 Hawai#i 423, 228 P.3d 303.            Accordingly,

he claims that he provided sufficient proof to allege an UMOC

claim under HRS Chapter 480.

            Gurrobat argues, inter alia, that Defendants failed to

meet their burden of proof for summary judgment and that the

record presented genuine issues of material fact as to whether he

could establish the requisite injury for a claim under HRS

§ 480-13(a).     Gurrobat asserts that he satisfied the “causation

requirement” for an UMOC claim by showing that Defendants’

conduct both negatively impacted “fair competition” and caused

injury to members of the Plaintiff Class.17          He explains that he

      17
            Gurrobat argues that, while Clayton Act and Sherman Act cases
require a resulting “antitrust injury,” an unfair method of competition claim
under HRS § 480-13(a) simply requires the plaintiff to show some type of
injury to “fair competition.” Accordingly, he contends:
            In short, Gurrobat is merely required to show how Pacific
            Beach’s acts unfairly affect competition, not that
            Defendant’s acts constitute a Clayton or Sherman Act
            violation and caused the type of price-increasing effect
            that those federal statutes aim to prevent. The reports of
            Mr. Tatibouet and Dr. Brewbaker plainly satisfy this
            requirement. They show that by their improper acts, Pacific
            Beach has gained a competitive advantage over any other law
            compliant, non-disclosing hotel or restaurant that remits
            the entire service charge to their food and beverage
            servers. . . . Thus, Gurrobat has shown that Pacific Beach’s
            unfair acts have a negative effect on fair competition that
            was only made possible by Pacific Beach’s violation of HRS §
            481B-14 (i.e., retaining portions of the service charge
            without proper disclosure to customers) and by the injury to
            Gurrobat (loss of tip income) which flowed from this
                                                                 (continued...)

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identified Starwood Hotels as a law-compliant competitor that

retains fifteen percent of the service charge income but

discloses this practice to its customers; the fact that he could

not identify any hotels that distribute all of the service charge

income to its service employees does not preclude him from

showing that Defendants’ practices unfairly affected

competition.18        He maintains that requiring the injury to

employees to flow from the effect on competition, rather than

from the aspect of the conduct that affects competition, makes

little sense.

               In addition, Gurrobat asserts that the court erred in

disregarding the testimony of his expert witnesses merely because

they lacked knowledge of particular law-compliant hotels.

Gurrobat argues that HRS Chapter 480 is the only statutory remedy

that provides a right of action for injunctive relief, and the

17
     (...continued)
                violation.

         18
            Gurrobat explains that the non-existence of a hotel that
distributes one-hundred percent of its service charge income to its service
employees, rather than disclosing its practice to customers, does not preclude
employees from asserting an UMOC claim. He elaborates:
            The issue here is the effect on fair competition, not the
            effect on other cheaters. The lower court apparently
            assumed that there must first be a law-compliant hotel in
            order for anyone to have a claim for unfair methods of
            competition. However, in a market where everyone is engaged
            in the same unfair method of competition, there will be no
            “victims” other than consumers and workers.

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court’s failure to recognize a claim under this section would

deprive employees of adequate protection against violations of

HRS § 481B-14.

            In their Answering Brief, Defendants contend that

pursuant to Davis, 122 Hawai#i 423, 228 P.3d 303, a claim brought

under HRS § 480-13(a) requires Gurrobat to show that he suffered

an “antitrust injury” (i.e., that he was injured as a result of

Defendants’ anti-competitive conduct).19           They argue that

Gurrobat presented no evidence that Defendants’ service charge

distribution practices had an anti-competitive effect, or that

members of the Plaintiff Class suffered injury as a result of an

anti-competitive aspect of Defendants’ conduct.20            Defendants

also argue that, although Gurrobat could petition the Attorney

General or the director of the Office of Consumer Protection to

      19
            Defendants argue that Gurrobat’s HRS § 480-13(a) claim was based
on theoretical injury to hypothetical competitors, his allegation that the
entire hotel industry engaged in the same service charge distribution
practices indicated that there was no harm to competition, and his arguments
for imposing liability under HRS § 480-13(a) were contrary to Davis, which
rejected the position that a per se violation of HRS § 481B-14 was sufficient
to allege an UMOC claim.

      20
            Defendants contend:
            At best, Gurrobat had two experts who opined in the abstract
            that, generally, hotels and banquet providers that do not
            disclose service charge distribution policies hold a
            “competitive advantage” over those who either make such a
            disclosure or pay the entirety of the service charges to the
            service employees. Neither expert offered any opinion as to
            how such a competitive advantage harmed the plaintiffs in
            this case.

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bring a claim for unfair or deceptive acts or practices under HRS

§ 480-2(d), he cannot assert an UMOC claim based on conduct that

does not cause the kind of injury that HRS § 480-13(a) is

intended to prevent.

            In reply, Gurrobat repeats his argument that the

causation requirement for an UMOC claim is satisfied as long as

the plaintiff alleges and proves the “nature of the competition”

(i.e., the causal connection between the UMOC and the alleged

injury).    He maintains, therefore, that HRS § 480-2 was intended

to protect against the “unfair” nature of a defendant’s conduct

and its impact on “fair competition,” rather than simply a

reduction in competition.

                         III. Standards of Review

A.    Class Certification

            “The question of whether a suit shall be allowed to

proceed as a class action is one of fact, to be determined by the

trial judge within his discretion.”           Life of the Land v. Burns,

59 Haw. 244, 252, 580 P.2d 405, 410 (1978) (citations omitted).

“The party seeking class certification assumes the burden of

establishing the four prerequisites for class certification

delineated in [HRCP] Rule 23(a) as well as demonstrating the

presence of a suitable situation for the maintenance of a class

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action under HRCP Rule 23(b).”         Kemp v. State of Hawai#i Child

Support Enforcement Agency, 111 Hawai#i 367, 385, 141 P.3d 1014,

1032 (2006) (citation and internal quotation marks omitted).

            “As to the requirement of HRCP Rule 23(a)(3) that the

claims of the representative be typical of the claims of the

class as a whole, this court has equated typicality with the

absence of conflict of interest.”           Kemp, 111 Hawai#i at 385, 141

P.3d at 1032 (citation and internal quotation marks omitted).                  “A

class representative must be part of the class and possess the

same interest and suffer the same injury as the class members.”

Id. (citations and internal quotation marks omitted).

B.    Summary Judgment

            A motion for summary judgment is reviewed de novo,

under the same standard applied by the trial court.              State v.

Tradewinds Elec. Serv. & Contracting, 80 Hawai#i 218, 222, 908

P.2d 1204, 1208 (1995).        See Hawai#i Rules of Civil Procedure

(“HRCP”) Rule 56.      “Summary judgment is appropriate if the

pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, show

that there is no genuine issue as to any material fact and that

the moving party is entitled to a judgment as a matter of law.”

Pac. Int’l Serv. Corp. v. Hurip, 76 Hawai#i 209, 213, 873 P.2d

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88, 92 (1994) (citation omitted).           A fact is material if proof of

that fact would have the effect of establishing or refuting an

essential element of a cause of action asserted by one of the

parties.    Guajardo v. AIG Hawai#i Ins. Co., 118 Hawai#i 196, 201,

187 P.3d 580, 585 (2008).

            On a motion for summary judgment, the court must view

the evidence in the light most favorable to the non-moving party.

First Ins. Co. of Hawai#i        v. Sariaslani, 80 Hawai#i 491, 494, 911

P.2d 126, 129 (1996).       The burden lies upon the moving party to

show that no genuine issue of material fact exists with respect

to the essential elements of the claim and that, based on the

undisputed facts, he is entitled to judgment as a matter of law.

Id. at 493, 911 P.2d at 128.          Only once the moving party has

satisfied its initial burden of production does the burden shift

to the non-moving party to show specific facts that present a

genuine issue for trial.        Id.

                               IV. Discussion

A.    Class Certification under HRCP Rule 23

            Defendants argue that the circuit court erred in

granting class certification because Gurrobat never worked at the

Pagoda Hotel, he lacked standing to assert claims regarding that

hotel, and he failed to establish that he could adequately

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represent the Plaintiff Class under HRCP Rule 23.            Gurrobat

argues that even if he was never employed at the Pagoda Hotel, he

had standing to bring his own claims against both HTH Corporation

and Pacific Beach Corporation because (1) HTH Corporation was a

common defendant who had injured all class members, (2) there was

no meaningful difference between class segments at the two

hotels, and (3) he could adequately represent class members under

HRCP Rule 23.

           A party seeking to file suit as a representative member

of a class must establish his right to do so by establishing the

four prerequisites for class certification and demonstrating the

presence of a suitable situation for the maintenance of a class

action.   Life of the Land v. Land Use Comm’n of State of Hawai#i,

63 Haw. 166, 180-81, 623 P.2d 431, 443-44 (1981).            Class

certification is only appropriate where: (1) “the class is so

numerous that joinder of all members is impracticable”; (2)

“there are questions of law or fact common to the class”; (3)

“the claims or defenses of the representative parties are typical

of the claims or defenses of the class”; and (4) “the

representative parties will fairly and adequately protect the

interests of the class.”      HRCP Rule 23(a).

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          The first of these prerequisites focuses on “who are

the proposed class,” and requires members of that class to be

identifiable and their possible joinder impracticable.             Life of

the Land, 63 Haw. at 181, 623 P.2d at 444.          The second

prerequisite focuses on “what are the claims or defenses of the

class,” and requires the presence of common claims or defenses

extending throughout the class.        Id. at 182, 623 P.2d at 444.

The third prerequisite focuses on “what is the individual claim

(or defense) of the class representative,” and requires that this

claim or defense be coextensive with the claims or defenses of

the class.   Id. at 182, 623 P.2d at 444.         Finally, the fourth

prerequisite focuses on “who is the representative,” and requires

that this individual be capable of fairly and adequately

representing the entire class.       Id.

          As this court has explained, the third requirement

(i.e., “typicality”) was designed to be read in conjunction with

the fourth requirement (i.e., “fair representation”).             63 Haw. at

183, 623 P.2d at 444-45.      “Where claims or defenses are

coextensive, there is a probability of fair and adequate

representation; where they are potentially conflicting, absentees

are unlikely to be afforded representation consistent with

notions of fairness and justice.”         Id. at 183, 623 P.2d at 445

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(citation omitted) (concluding that plaintiffs failed to sustain

their burden for class certification by showing an absence of

conflict between the interests of a particular defendant and

members of the putative defendant class).

            Here, the claims asserted by Gurrobat are coextensive

with those asserted on behalf of the entire certified class

(i.e., all non-managerial service employees whose tip income was

unlawfully withheld by Defendants).          The conduct giving rise to

those claims was Defendants’ practice of retaining a portion of

service charge income in violation of HRS § 481B-14.             Although

phrased as an issue of standing, Defendants essentially challenge

Gurrobat’s ability to fairly and adequately represent class

members who were employed at a different location, by only one of

the two Defendants.21     Even if Gurrobat never worked at the

Pagoda Hotel, the legal and factual bases underlying his claims

are coextensive with those of all other class members.22

Further, employment at one but not another of the two hotels

      21
            Gurrobat had standing to bring claims against both HTH Corporation
and Pacific Beach Corporation because they operated the Pacific Beach Hotel,
at which Gurrobat was employed. The issue raised by Defendants, however, is
whether Gurrobat could adequately represent class members at the Pagoda Hotel,
which was only operated by HTH Corporation.

      22
            To the extent that any differences may exist between the
percentage of the service charge withheld or the entity responsible for
managing each hotel, such differences might affect the amount individual class
members are entitled to recover or the respective liability of each Defendant,
but not Defendants’ liability or the conduct giving rise to that liability.

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would not create a conflict of interest between Gurrobat and

other class members.       Under the facts of this case, Gurrobat

established that he could fairly and adequately protect the

interests of class members, and the circuit court did not err in

certifying the proposed class.

B.    Gurrobat’s Claim for Unpaid Wages

      1.    Liability under HRS Chapter 388

            Defendants contend that Gurrobat was not entitled to

summary judgment on his claim for unpaid wages because “tip

income” distributed to employees pursuant to HRS § 481B-14 does

not constitute “earned compensation” under HRS § 388-6.               Gurrobat

argues that, based on a plain reading of the statutes, “tip

income” from a service charge imposed on customers is earned by

service employees and is compensation due to them under law.

            This court’s recent decision in Villon v. Marriott

Hotel Services, Inc. controls this issue.            In Villon, we accepted

a certified question from the United States District Court for

the District of Hawai#i on whether service employees could bring

a claim against a hotel employer under HRS §§ 388-6, -10, and

-11, based on alleged violations of HRS § 481B-14.              Villon, 130

Hawai#i at 132, 306 P.3d at 177.         Answering this question in the

affirmative, this court held:

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           [W]hen a hotel or restaurant applying a service charge for
           the sale of food or beverage services allegedly violates HRS
           § 481B-14 (2008) (1) by not distributing the full service
           charge directly to its employees as “tip income” (in other
           words, as “wages and tips of employees”), and (2) by failing
           to disclose this practice to the purchaser of the services,
           the employees may bring an action under HRS §§ 388-6 (1993),
           -10 (1993 & Supp. 1999), and -11 (1993 & Supp. 1999) to
           enforce the employees’ rights and seek remedies.

Id. at 132-33, 306 P.3d at 177-78.

           This court agreed with the plaintiffs’ contention that

HRS § 481B plainly and unambiguously provides that “undisclosed

and unpaid service charges are ‘tips,’ ‘wages,’ and

‘compensation.’”    Id. at 134, 306 P.3d at 179.         We held that

“when a hotel or restaurant distributes less than 100% of a

service charge directly to its employees without disclosing this

fact to the purchaser, the portion withheld constitutes ‘tip

income,’ synonymously phrased within HRS § 481B-14 as ‘wages and

tips of employees.’”     130 Hawai#i at 135, 306 P.3d at 180.

           In addition, we concluded that the plain language of

HRS Chapter 388 on withholding of wages supported the plaintiffs’

contention that HRS § 481B-14 was enforceable through HRS Chapter

388.   130 Hawai#i at 135, 306 P.3d at 180.         We further concluded

that the provisions related to the withholding of wages in

Chapter 388, sections 388-6, -10 and -11, applied to the

enforcement of HRS § 481B-14.       Id.   We explained that HRS § 388-1

defines “wages” as “compensation for labor or services rendered

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by an employee.”     HRS § 388-1 also provides that “wages” include

“tips or gratuities of any kind.”         Id.   Therefore, we explained

that service charges are “compensation earned”•by the employee,

because they are levied upon the consumer based upon “labor or

services rendered by an employee,” usually in lieu of a

traditional tip.     Id. at 135, 306 P.3d at 180.        We further

explained that HRS § 388-6, titled “Withholding of wages,”

prohibits an employer from retaining any part or portion of any

compensation earned by the employee except where permitted by

law.   Id.    Thus, we held, “for the purpose of enforcement under

HRS § 388–6 . . . ‘wages’ includes service charges as ‘tips or

gratuities of any kind,’ because HRS § 481B–14 defines service

charges as ‘tip income’ and ‘wages and tips of employees.’”              Id.

             Accordingly, we held, “the plain language of HRS

§ 481B-14 and Chapter 388 indicates that a service charge is

‘compensation earned’ as ‘tip income’ or ‘wages and tips of

employees.’     Therefore, an alleged violation of HRS § 481B-14 is

enforceable through Chapter 388.”         130 Hawai#i at 136-37, 306

P.3d at 181-82.

             It is undisputed in this case that Defendants imposed a

service charge at banquets and other functions held at the

Pacific Beach Hotel and the Pagoda Hotel, and retained a portion

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of the service charge income without disclosing that practice to

customers.   Based on our decision in Villon, the circuit court

correctly held that “tip income” retained by Defendants in

violation of HRS § 481B-14 constitutes “compensation” earned by

service employees for purposes of bringing a claim under HRS

§§ 388-6, 388-10, and 388-11.

     2.   Summary Judgment on the Issue of Damages

          Next, Defendants argue that the court erred in failing

to take into account the portion of service charge income that

Defendants distributed to managerial employees when it awarded

damages in favor of Gurrobat and other non-managerial service

members, and there was a question of fact as to whether

Defendants were equitably justified in failing to comply with HRS

§ 481B-14.   Gurrobat, on the other hand, contends that tip income

distributed pursuant to HRS § 481B-14 is not intended to

supplement the income of managerial employees, and Defendants’

claimed misunderstanding of law did not qualify as equitable

justification for their unlawful withholding of tip income.

          As we explained in Villon, the legislature’s findings

in enacting HRS § 481B-14 evinced a twofold concern: “first, that

patrons may not know that service charges may be ‘used to pay for

costs or expenses other than wages and tips of employees’; and

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second, that employees ‘may not be receiving tips or gratuities’

from these service charges.”       130 Hawai#i at 137, 306 P.3d at 182

(citing 2000 Haw. Sess. Laws Act 16, at 21-22).           This dual focus

reflects the legislative evolution of the bill that eventually

gave rise to HRS § 481B-14.       130 Hawai#i at 137, 306 P.3d at 182.

          When it was first introduced, the bill sought only to

“protect employees who receive or may receive tips or gratuities

during the course of their employment from having these amounts

withheld or credited to their employers.”          Id. (citing H.B. 2123,

20th Leg., Reg. Sess. (2000)).       As the bill evolved, it focused

on the problem of uninformed consumers, who may not leave

additional tips for the service employees, mistakenly thinking

that the service charge they paid were tips.           130 Hawai#i at 138,

306 P.3d at 183 (citing H. Stand. Comm. Rep. 479-00, in 2000

House Journal, at 1155).

          We explained however, that toward the end of the bill’s

path to passage, the legislature recognized that “moneys

collected as service charges are not always distributed to the

employees as gratuities and are sometimes used to pay the

employer’s administrative costs.”         130 Hawai#i at 139, 306 P.3d

at 184 (citing S. Stand. Comm. Rep. No. 3077, in 2000 Senate

Journal, at 1286–87).     The legislature noted that the employee,

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therefore, “does not receive the money intended as a gratuity by

the customer, and the customer is misled into believing that the

employee has been rewarded for providing good service.”             Id.

          Accordingly, we reasoned that throughout the bill’s

journey through the legislature, the concern for employees was

never abandoned, stating: “We have previously recognized that

‘the legislative history of H.B. 2123 indicates that the

legislature was concerned that when a hotel or restaurant

withholds a service charge without disclosing to consumers that

it is doing so, both employees and consumers can be negatively

impacted.’”• 130 Hawai#i at 139-40, 306 P.3d at 184-83 (citing

Davis, 122 Hawai#i at 434, 228 P.3d at 314 (emphasis added)).

          Based on the legislative history of HRS § 481B-14 and

our analysis of the history in Villon, Defendants were not

entitled to retain a portion of service charges to supplement the

income of managerial employees, who are not otherwise entitled to

tip income.   Such a practice is analogous to using the service

charge to pay the employer’s administrative costs.            Defendants

were required to distribute one-hundred percent of service charge

income to non-management service employees who provided the

services for which customers believed they were tipping.

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             Defendants’ only argument in defense of these practices

was that they had acted in a manner consistent with a broader

industry-wide trend among Hawai#i hotels.            The fact that other

hotels unlawfully retained service charges does not provide

equitable justification for Defendants’ violations of HRS § 481B-

14.    Cf. Arimizu v. Fin. Sec. Ins. Co., Inc., 5 Haw. App. 106,

112, 679 P.2d 627, 632 (1984) (rejecting defendant’s argument

that it had a “good faith” belief for withholding employee’s

wages based on a setoff claim, and holding that there was no

genuine issue of material fact regarding the existence of an

equitable justification).

             As explained supra, the plain language of HRS § 481B-14

required Defendants to either distribute one-hundred percent of

the service charge to employees as “tip income” or disclose their

retention of a portion of the service charge to customers.                 Here,

Defendants failed to comply with either of these provisions or to

provide equitable justification for its violation of the statute.

For this reason, class members were entitled to an award of

double damages under HRS § 388-10.

C.     Imposition of Joint and Several Liability

             Defendants argue that the court erred in imposing joint

and several liability where the Pacific Beach Hotel and the

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Pagoda Hotel involved separate employers and employee

populations, and thus, there was no basis for holding Pacific

Beach Corporation liable for injuries suffered at the Pagoda

Hotel.   Gurrobat, on the other hand, argues that joint and

several liability arose from Defendants’ contractual obligations

to pay wages and tip income to employees, but would also be

available if Defendants’ practice of withholding service charge

income constituted an intentional tort in violation of HRS §§

388-10 or 388-11.

           Regarding contractual agreements, “joint and several

liability” is defined as “liability of copromisors of the same

performance when each of them, individually, has the duty of

fully performing the obligation[.]”         Black’s Law Dictionary 837

(6th ed. 1990).    Cf. HRS § 483-1 (defining “several obligors” as

“obligors severally bound for the same performance”).             Imposition

of joint and several liability turns on whether the parties have

promised the same performance to a third party.           Lee v. Yano, 93

Hawai#i 142, 147, 997 P.2d 68, 73 (App. 2000) (explaining that a

guarantor is not a co-obligor or joint and/or several obligor

with the principal debtor).

           In the context of tortious conduct, joint and several

liability may be imposed, inter alia, “for the recovery of

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economic and noneconomic damages against joint tortfeasors in

actions involving: [] Intentional Torts[.]”          HRS § 663-

10.9(2)(A).   “Joint tortfeasors,” in turn, are defined as “two or

more persons jointly or severally liable in tort for the same

injury to person or property, whether or not judgment has been

recovered against all or some of them.”         HRS § 663-11.      In this

regard, a plaintiff can only recover jointly and/or severally

against two or more defendants if he can recover against each

defendant.    Ozaki v. Ass’n of Apartment Owners of Discovery Bay,

87 Hawai#i 265, 270-71, 954 P.2d 644, 649-50 (1998) (explaining

that a tortfeasor cannot be jointly and/or severally liable with

another unless the person harmed can sue and recover against

both).   See Doe Parents No. 1 v. Dep’t of Educ., 100 Hawai#i 34,

96, 58 P.3d 545, 607 (2002) (Acoba, J., concurring) (“Under joint

and several liability, each defendant is completely and fully

liable towards the injured person for the full amount of

damages.” (citation and internal quotation marks omitted)).

           In determining whether HTH Corporation and Pacific

Beach Corporation may be held jointly and severally liable for

damages to the Plaintiff Class, we must consider the basis for

holding each defendant liable.       While Defendants’ liability arose

from the same conduct (i.e., their practice of retaining service

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charge income from non-managerial service employees), the claims

against HTH Corporation stemmed from its operation of both the

Pacific Beach Hotel and the Pagoda Hotel, whereas the claims

against Pacific Beach Corporation stemmed from its operation of

only the Pacific Beach Hotel.23         In this regard, HTH Corporation

can be held liable for injuries to employees at both hotels;

however, there is no basis for holding Pacific Beach Corporation

liable for injuries to employees at the Pagoda Hotel.24

            Therefore, the circuit court erred in failing to

apportion damages when it held Pacific Beach Corporation jointly

and severally liable for wages unlawfully withheld at the Pagoda

Hotel.     We remand the case for a determination of the respective

liability of each Defendant.25

D.    HTH Corporation's Status as an “Employer”

      23
            Gurrobat cites a September 20, 2010 settlement conference
statement in support of his contention that HTH Corporation and Pacific Beach
Corporation together operate the Pagoda Hotel. As Defendants argue on appeal,
however, this appears to be a mistake because it was inconsistent with
Defendants’ prior statements that Pacific Beach Corporation operated the
Pacific Beach Hotel but not the Pagoda Hotel.

      24
            We reach this conclusion regardless of whether liability is based
on Defendants’ contractual obligation to pay employees, or any tortious
conduct in intentionally withholding wages in violation of HRS Chapter 388.

      25
            Exhibit 9 to Gurrobat’s motion for summary judgment as to damages
summarized managers’ share of service charge income at each of the hotels per
year, and calculated a total of $1,678,783 based on an award of double damages
with 6% interest compounded annually. In order to determine Pacific Beach
Corporation’s joint and several liability as to wages withheld at the Pacific
Beach Hotel, the court would need to subtract that portion of damages arising
from conduct at the Pagoda Hotel.

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          Defendants argue that the court’s judgment was premised

on a manifest error of fact because Gurrobat failed to prove that

HTH Corporation was an “employer” of any member of the Plaintiff

Class.   Specifically, they contend that Pacific Beach Corporation

is responsible for hiring employees at the Pacific Beach Hotel

and is listed in the W-2 forms for that hotel, while Pagoda

Hotel, Inc. is responsible for hiring employees at the Pagoda

Hotel and is listed in the W-2 forms for that hotel.            Gurrobat,

however, argues that Defendants were “employers” of class members

where, by their own admissions, HTH Corporation “owned and

operated” the Pacific Beach Hotel and the Pagoda Hotel, and

Pacific Beach Corporation “operated” both Hotels.

          Under HRS Chapter 388, the term “employer” is defined

to include “any individual, partnership, association, joint-stock

company, trust, corporation, the personal representative of the

estate of a deceased individual or the receiver, trustee, or

successor of any of the same, employing any person, but shall not

include the State or any political subdivision thereof or the

United States.”    HRS § 388-1.     The term “employ,” in turn, is

defined to mean “permit or suffer to work.”          Id.

          The federal district court’s decision in Davis v. Four

Seasons Hotel Ltd. is instructive.        In Davis, plaintiff employees

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brought a claim for unpaid wages against the entity responsible

for managing the resorts at which plaintiffs worked, Four Seasons

Hotel Ltd. (“Four Seasons”), and also, the entity that had an

ownership interest in the two resorts, MSD Capital, Inc.             810 F.

Supp. 2d 1145, 1149 (D. Hawai#i 2011).         Four Seasons disputed,

among other things, that it was plaintiffs’ “employer” because

separate entities controlled the payroll of the subject hotels,

issued financial statements, and made human resources decisions.

Id. at 1158.

          The District Court for the District of Hawai#i held

that Four Seasons was contractually responsible for managing the

resorts at which plaintiffs worked and had the authority to do so

because it “permit[ted] or suffer[ed]” plaintiffs to work and was

their “employer” under HRS § 388-1.         810 F. Supp. 2d at 1158.         In

particular, the court noted that Four Seasons had power and

responsibility to control plaintiffs in their capacity as banquet

servers, had retained a portion of service charges, and was

plaintiffs’ employer “as a matter of economic reality.”             Id. at

1158-59 (“The overarching concern is whether the alleged employer

possessed the power to control the worker in question.”

(Citation and internal quotation marks omitted)).

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           In this case, Defendants admit that HTH Corporation

“operated” both the Pagoda Hotel and the Pacific Beach Hotel, and

Pacific Beach Hotel “operated” the Pacific Beach Hotel, but they

do not elaborate on what this means.         Instead, they assert that

HTH Corporation was not an “employer” of class members because

other entities were responsible for hiring employees at each of

the hotels.   As the federal district court recognized in Davis,

an employee may have more than one “employer.”           Specifically,

separate entities may control payroll, issue financial

statements, make human resources decisions, etc.            In addition, an

entity’s authority to manage the environment in which an employee

works or to effectuate policies that affect an employee can

constitute grounds for finding that it was an “employer” as a

matter of economic reality.       Cf. Davis, 810 F. Supp. 2d at

1158-59.

           By their own admissions, Defendants had authority over

the operation of the hotels at which Gurrobat and the Plaintiff

Class members were employed.       Moreover, Defendants failed to

raise an argument regarding their status as “employers” until

after the court had entered its final judgment.           Under these

facts, the circuit court did not err in concluding that HTH

Corporation was an “employer” under HRS Chapter 388.

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E.    Judicial and Equitable Estoppel

            Finally, Defendants argue that the court abused its

discretion in finding they were judicially and equitably estopped

from raising new arguments regarding joint and several liability,

and that the arguments in their motion for reconsideration were

waived as untimely.       Gurrobat argues that Defendants failed to

raise all but one of their alleged points of error before the

circuit court made the relevant ruling, and those arguments must

therefore be reviewed under an abuse-of-discretion standard.

            The doctrine of equitable estoppel, and specifically

judicial estoppel, precludes a party from assuming inconsistent

positions in the course of the same proceedings.              Cf. Rosa v. CWJ

Contractors, Ltd., 4 Haw. App. 210, 218-20, 664 P.2d 745, 751-52

(1983) (holding that plaintiffs, who defeated defendant’s motion

to dismiss by arguing that defendant was a separate entity from

an alleged co-obligor against which plaintiffs obtained a prior

judgment, were estopped from taking an inconsistent position on

summary judgment and arguing that defendant was a wholly-owned

subsidiary of alleged co-obligor and was privy to co-obligor).

The court held:

            This doctrine is not strictly one of estoppel but partakes
            rather of positive rules of procedure based on manifest
            justice and, to a greater or less [sic] degree, on
            considerations of the orderliness, regularity, and
            expedition of litigation. At stake is the integrity of the

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          judicial process. A party is stopped from playing “fast and
          loose” with the court or blowing “hot and cold” during the
          course of litigation.

Rosa, 4 Haw. App. at 218-19, 664 P.2d at 751 (citations and

internal quotation marks omitted).

          In this case, the circuit court estopped Defendants

from arguing against joint and several liability after they had

“acted as one” throughout the course of the case.            The court

noted, in particular, “Defendants chose to be jointly represented

by the same legal counsel, filed all of their motions and

oppositions together, and even shared the same representative

during settlement conferences.       Only after summary judgment was

granted did Defendants first make an argument based on their

separate and distinct identities.”

          As Defendants point out, however, the issue of

Defendants’ separate identities did not become relevant until the

court issued its judgment holding HTH Corporation and Pacific

Beach Corporation jointly and severally liable for damages.              The

Defendants have maintained throughout the case that they are

separate and distinct entities; HTH Corporation operates the

Pagoda Hotel and the Pacific Beach Hotel, while Pacific Beach

Corporation operates only the Pacific Beach Hotel.            Without more,

Defendants’ joint representation by the same counsel and filing

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of motions together are not grounds for invoking judicial and/or

equitable estoppel in this case.            Accordingly, the circuit court

abused its discretion in concluding that Defendants were estopped

from contesting joint and several liability.

F.    The Unfair Methods of Competition Claim

      1.      The Circuit Court’s Ruling

              The circuit court granted summary judgment on

Gurrobat’s UMOC claim based on an alleged lack of requisite

evidence to prove the “anticompetitive injury” aspect of his

case.      The circuit court concluded that although two experts who

had opined that law-compliant hotels would be at a competitive

disadvantage, the two experts had to have at least a foundation

in fact or evidence of one or the other of the following to

overcome Defendants’ motion for summary judgment: (1) another

hotel that either did not require service charges or required

service charges and then distributed one-hundred percent of them

to its service employees or (2) disclosed the withholding to its

customers.      The circuit court found that the “two experts had no

knowledge of an existent market at all or the existence of any

hotel that could provide either one of those two,” and granted

Defendants’ motion for summary judgment.

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          We conclude that there is no requirement that

plaintiffs asserting a claim based on HRS § 481B-14 prove the

existence of law-compliant competitors who (1) distributed one

hundred percent of service charge income to service employees or

(2) disclosed to customers the practice of withholding a portion

of service charge income.

     2.   Davis and the “Nature of the Competition”

          Gurrobat argues that the circuit court erred in its

interpretation of Davis, 122 Hawai#i 423, 228 P.3d 303.            In

Davis, this court answered a question certified by the United

States District Court for the District of Hawai#i relating to

whether banquet server employees had standing to bring a claim

against hotel employers under HRS § 480-2(e), for violating HRS

§ 481B-14 by retaining a portion of service charge income without

disclosing to customers that they were doing so.            122 Hawai#i at

424-25, 228 P.3d at 304-305.       As part of the certified question,

we addressed whether in order to have standing to bring an UMOC

claim, employees must plead the existence of competition or an

effect thereon, and also addressed the causation of injury

requirements of an UMOC claim.

          Davis explained that in order to state a cause of

action and recover money damages under HRS § 480-2(e), a

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plaintiff must first satisfy the requirements of HRS § 480-13.

Davis, 122 Hawai#i at 434, 228 P.3d at 314 (citation omitted).

“HRS § 480-13(a) provides that, with limited exceptions, any

person who is injured in the person’s business or property by

reason of anything forbidden or declared unlawful by [chapter

480]: (1) [m]ay sue for damages ...; and (2) [m]ay bring

proceedings to enjoin the unlawful practices[.]”            Id.    Davis

noted, therefore, that a claim under HRS § 480-13 has three

elements essential to recovery: (1) a violation of HRS chapter

480; (2) which causes an injury to the plaintiff’s business or

property; and (3) proof of the amount of damages.            Davis, 122

Hawai#i at 435, 228 P.3d at 315 (citations omitted).              In the

instant case, the first and third elements are not at issue.

          With respect to the second element, Davis explained

that this element includes two parts.         First, a plaintiff is

required to allege an injury in fact to his or her “business or

property.”   Like the plaintiffs in Davis, Gurrobat met the first

requirement, injury in fact to his or her ‘business or property,’

by alleging and later offering evidence that he did not receive

his entire share of service charges due to him.

          Second, a plaintiff is required to allege the “nature

of the competition.”     We explained that a plaintiff must allege

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the nature of the competition because, pursuant to HRS § 481B-4,

a violation of HRS § 481B-14 “shall be deemed” both an UMOC and

an unfair or deceptive act or practice in the conduct of any

trade or commerce (“UDAP”).       Davis, 122 Hawai#i at 439, 228 P.3d

at 319.   An employee, however, cannot pursue a claim for an UDAP

under HRS § 480-2(d); thus, in order to maintain the distinction

between claims of UMOC and UDAP, we held that a plaintiff was

required to allege the “nature of the competition.”            Davis, 122

Hawai#i at 437, 228 P.3d at 317.       We explained that this means

that the plaintiff must allege that “he or she was harmed as a

result of actions of the defendant that negatively affect

competition.”    Davis, 122 Hawaii at 438, 228 P.3d at 318.            The

plaintiff was further required to allege “how [Defendants]

conduct [would] negatively affect competition.” Davis, 122 Hawaii

at 437-38, 228 P.3d at 317-18.

          a.     How Defendants’ Conduct Negatively Affects
                 Competition

          We held in Davis that “although Employees allege that

they have suffered an injury resulting from Four Seasons’

violation of § 481B–14, which is deemed to be an unfair method of

competition by § 481B–4, Employees are additionally required to

allege the ‘nature of the competition,’” specifically how the

Four Seasons’ conduct will negatively affect competition.              Davis,

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122 Hawai#i at 443, 228 P.3d at 323.        We concluded that the

employees in Davis had made no such allegation, and therefore had

not satisfied the requirements to pursue a claim under HRS § 480-

2(e).   Id. at 437-38, 228 P.3d at 317-18.

           Unlike the plaintiffs in Davis, Gurrobat alleged in his

second amended complaint and offered evidence on summary judgment

that Defendants’ practice of withholding a portion of the service

charge without disclosure to customers allowed them to charge

lower base prices than law-compliant competitors, thereby

reducing “fair competition” in the market for hotels,

restaurants, and banquet service providers.          Moreover, Gurrobat

produced declarations from two experts, long-time isle hotelier

Andre Tatibouet, and Bank of Hawaii’s now-retired chief economist

Paul Brewbaker, who opined that any hotel that complies with the

law by distributing the entire service charge has higher labor

costs and pricing structure and is therefore, at a competitive

disadvantage than a hotel that does not comply.           Gurrobat plainly

satisfied the test set forth in Davis.

            The dissent argues that we relied on the reports of

Tatibouet and Brewbaker in concluding that Gurrobat demonstrated

harm to “fair competition.”       Dissenting Opinion at 18.        However,

proof of how a defendant’s conduct negatively affected

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competition does not necessarily require expert testimony, proof

that a defendant lowered their prices, or that a defendant’s

conduct injured other hotels.       A plaintiff is only required to

prove that a defendant’s conduct is harmful to fair competition.

          Additionally, we note that similar to HMA, plaintiffs

may prove how a defendant’s conduct negatively affects

competition by showing that defendant’s conduct enables the

defendant to create incentives for customers to purchase banquet

services from the defendant instead of competitors who did not

engage in the unlawful conduct.        In Davis, we noted that we

specifically stated in HMA:

          [I]f HMSA engages in acts or practices that impede or
          interfere with physicians’ ability to provide effective
          healthcare services to their patients and/or create
          incentives for patients to look elsewhere for medical
          services-that is, to other participating physicians who may
          be reluctant to challenge HMSA or to non-participating
          physicians-such acts or practices can, if proven, constitute
          unfair methods of competition[.]

Davis, 122 Hawai#i at 436, 228 P.3d at 316 (citing HMA, 113

Hawai#i at 112-13, 148 P.3d at 1214-15) (emphasis added).

          Thus, as stated supra, Gurrobat provided sufficient

evidence of how Defendants’ conduct negatively affected

competition, i.e., harmed fair competition, because Defendants’

unlawful conduct allows Defendants to lower their overall costs

through retaining the tip income, attract customers by being able

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to offer seemingly lower base prices, and mislead customers into

believing that the service charge will be paid as tip income.

Defendants’ unlawful conduct, therefore, enables Defendants to

obtain the business of customers through an unfair and illegal

business advantage over law-compliant hotels, restaurants and

banquet service providers.       Therefore, Gurrobat sufficiently

proved that Defendants’ conduct negatively affects fair

competition.

          b.     Injury as a result of conduct that negatively
                 affects competition

          Defendants argue that they were entitled to summary

judgment because Gurrobat failed to present evidence of the

anticompetitive effects of Defendants’ alleged conduct or that

his injury resulted from alleged anticompetitive conduct.

          As discussed supra, a sufficient “nature of the

competition” allegation requires a plaintiff to allege how the

defendants’ conduct negatively affects competition.            In addition,

pursuant to HRS § 480-13, a plaintiff is required to allege that

he or she was harmed as a result of the defendant’s violation of

HRS § 481B-14.    A plaintiff need not allege and prove, however,

that his or her injury was a result of the anti-competitive

effect of the violation.      Such a requirement would limit causes

of action under HRS § 480-13(a) to consumers and competitors of a

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defendant, and would thus, contravene this court’s holdings in

HMA and Davis that the plaintiff need not be a consumer, a

competitor of, or in competition with the defendant in order to

have standing under HRS § 480–13(a).         See HMA, 113 Hawai#i at

110, 148 P.3d at 1212 (“[P]laintiffs need not be competitors of,

or in competition, with the defendants to sustain their claims of

unfair methods of competition”); Davis, 122 Hawai#i at 429, 228

P.3d at 309 (concluding that HRS § 480-13(a) states “any person”

may bring suit for an injury, and therefore, standing is not

limited to consumers, businesses, or competitors, and can in fact

extend to employees).

            Accordingly, Davis does not stand for the proposition

that in order to recover for an UMOC claim for a violation of HRS

§ 481B-14, the plaintiff must prove that his or her injury

resulted from the negative effect on competition.            Although a

plaintiff must allege and ultimately prove how a defendant’s

conduct negatively affected competition, the plaintiff need not

prove that his or her injury resulted from that negative effect

on competition.    On the contrary, a plaintiff need only prove an

injury that flows from that which makes defendants’ acts

unlawful.   Davis, 122 Hawai#i at 439, 228 P.3d at 319 (citing

Robert’s Hawai#i, 91 Hawai#i 224, 254 n.31, 982 P.2d 853, 883

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n.31).     Gurrobat satisfied this requirement by alleging and

offering evidence of how (1) Defendants’ conduct negatively

affected competition, and (2) such unlawful conduct injured

plaintiffs in their business or property by depriving service

employees of tip income to which they were entitled.26

             Thus, pursuant to Davis, a plaintiff may recover under

HRS §§ 480-2 and 480-13 for violations of HRS § 481B-14, if the

plaintiff alleges and proves: (1) a violation of HRS Chapter 480;

(2) an injury to the plaintiff’s business or property that flows

from the defendant’s conduct that negatively affects competition

or harms fair competition; and (3) proof of damages.

             Elements (1) and (3) are not at issue in this case.

Gurrobat also presented sufficient evidence on element (2).

Therefore, we hold the circuit court erred in granting

Defendants’ motion for summary judgment.

                              III. CONCLUSION

             We hold the following on Gurrobat’s claims for unpaid

wages under HRS § 388-6: the circuit court correctly concluded

that (1) Gurrobat established that he could fairly and adequately

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            Gurrobat asserted: “These unfair competitive advantages were
gained by Defendants at the direct expense of Plaintiff and other members of
the Class, and Plaintiff and the Class members were injured as a result of
Defendants’ unfair method of competition and the Defendants’ unfair
competitive behavior in the hotel food and beverage market.”

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protect the interests of the Plaintiff Class, (2) Gurrobat was

entitled to judgment as a matter of law on Gurrobat’s HRS § 388-6

claim, (3) Gurrobat was entitled to double damages and interest

as a matter of law under HRS § 388-10, and (4) HTH Corporation

was an “employer” pursuant to HRS § 388-1.          However, we hold that

the circuit court erred in imposing joint and several liability

on Defendants.

          Therefore, we (1) affirm the circuit court’s order

granting Gurrobat’s motion for class certification, (2) affirm

the circuit court’s order granting Gurrobat’s motion for partial

summary judgment as to the claims for unpaid wages under HRS

Chapter 388; and (3) affirm in part Gurrobat’s motion for summary

judgment as to damages for his HRS Chapter 388 claim.             However,

we vacate the portion of the circuit court’s order granting

Gurrobat’s motion for summary judgment as to damages under HRS

Chapter 388 that imposed joint and several liability on the

Defendants, and remand for further proceedings to properly

apportion the damages between Defendants.

          As to Gurrobat’s UMOC claim, we hold that the circuit

court erred in granting Defendants’ motion for summary judgment

because Gurrobat (1) satisfied the “nature of the competition”

requirements under Davis, and (2) presented sufficient evidence,

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there being no issues with respect to the first and third

elements, to satisfy the second element required for recovery

under HRS §§ 480-2 and 480-13 for violations of HRS § 481B-14.

Therefore, we vacate the circuit court’s order granting

Defendants’ motion for summary judgment on Gurrobat’s unfair

competition claim, and remand the claim to the circuit court for

further proceedings consistent with this opinion.

James J. Bickerton,                       /s/ Mark E. Recktenwald
John F. Perkin, and
Brandee J.K. Faria,                       /s/ Paula A. Nakayama
for petitioner
                                          /s/ Sabrina S. McKenna
Paul Alston, Tina L. Colman
and John Rhee, for respondent

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