Court Opinion

ID: 9959836
Source: CourtListenerOpinion
Date Created: 2024-04-12 19:04:07.982371+00
Date Added: 2024-06-11T08:18:55.743691
License: Public Domain

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

                                                Electronically Filed
                                                Intermediate Court of Appeals
                                                CAAP-XX-XXXXXXX
                                                12-APR-2024
                                                08:12 AM
                                                Dkt. 127 SO

                          NO. CAAP-XX-XXXXXXX

                IN THE INTERMEDIATE COURT OF APPEALS

                        OF THE STATE OF HAWAI#I

                  TROPICAL PLUMBING & BATH, INC.,
            Plaintiff/Counterclaim Defendant-Appellee,
                                 v.
        ASSOCIATION OF APARTMENT OWNERS OF MOANA PACIFIC,
   Defendant/Counterclaimant/Third-Party Plaintiff-Appellant,1
                                 v.
   MELVIN CHARLES BEECK, JR.; RANDY KOWALKOWSKI; HAWAII FIRST,
              INC., Third-Party Defendants-Appellees
                                and
   JOHN DOES 1-10; JANE DOES 1-10; DOE PARTNERSHIPS 1-10; JOHN
 CORPORATIONS 1-10; DOE ASSOCIATIONS 1-10; DOE LIMITED LIABILITY
   COMPANIES 1-10; DOE "NON-PROFIT" CORPORATIONS 1-10; and DOE
              GOVERNMENTAL ENTITIES 1-10, Defendants

        APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
                      (CASE NO. 1CC161000689)

                     SUMMARY DISPOSITION ORDER
    (By:   Hiraoka, Presiding Judge, McCullen and Guidry, JJ.)

          The Association of Apartment Owners of Moana Pacific
(AOAO) appeals from the Hawai#i Rules of Civil Procedure (HRCP)
Rule 54(b) judgment for Tropical Plumbing & Bath, Inc. and its
owner, Melvin Charles Beeck, Jr., entered by the Circuit Court of

      1
            Association of Apartment Owners of Moana Pacific's counterclaims
against Melvin Charles Beeck, Jr., Randy Kowalkowski, and Hawaii First, Inc.
were incorrectly titled. They were actually third-party complaints. See HRCP
Rules 7(a), 14(a).
  NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

the First Circuit on April 23, 2019.2 The AOAO challenges the:
(1) July 7, 2016 order denying its motion to dismiss Tropical's
complaint;3 and (2) February 11, 2019 order granting in part and
denying in part Tropical and Beeck's motion for partial summary
judgment. We affirm in part, vacate in part, and remand for
further proceedings.
          (1) We review a ruling on a motion to dismiss de novo.
We assume the facts alleged in Tropical's complaint are true and
view them in the light most favorable to Tropical to determine if
they warrant relief under any legal theory. Bank of Am., N.A. v.
Reyes-Toledo, 143 Hawai#i 249, 256-57, 428 P.3d 761, 768-69
(2018).
          Tropical's complaint alleged that Tropical contracted
with the AOAO to hydro-jet the Moana Pacific's laundry and
kitchen sink drain lines. A copy of the contract was attached.
The AOAO terminated the contract before Tropical began its work.
          The AOAO argued the contract was void because it didn't
contain information about lien rights, bonding, and Tropical's
statutory right to resolve alleged construction defects before
litigation, as required by Hawaii Revised Statutes (HRS) § 444-
25.5.
          Tropical argued that the AOAO was not a "homeowner" to
whom HRS § 444-25.5 applied. We need not resolve that legal
issue because HRS § 444-25.5 does not apply to a contract for
maintenance work that does not require a permit. Hawaii
Administrative Rules (HAR) § 16-77-80(c) (eff. 2002). Viewing
the allegations in the complaint in the light most favorable to
Tropical, the scope of work under Tropical's contract is
"service-type work (e.g., maintenance work performed by . . .
plumbing contractors) that does not require a permit by a county
or other local subdivision of the State." Id. The circuit court
was not wrong to deny the AOAO's motion to dismiss.

        2
            The Honorable James C. McWhinnie presided.
        3
            The Honorable Virginia L. Crandall presided.

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   NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

            (2)   Tropical and Beeck moved for partial summary
judgment on its claim for breach of contract and the AOAO's
counterclaim for negligent misrepresentation and fraud in the
inducement on December 21, 2018.4 The AOAO counter-moved for
partial summary judgment on Tropical's claim for breach of
contract on December 28, 2018. On February 11, 2019, the circuit
court entered orders granting summary judgment for Tropical on
its claim for breach of contract and on the AOAO's claims for
negligent misrepresentation, fraud, and conspiracy, and denying
the AOAO's counter-motion.
          We review a grant of summary judgment de novo. Nozawa
v. Operating Engineers Local Union No. 3, 142 Hawai#i 331, 338,
418 P.3d 1187, 1194 (2018). Summary judgment is appropriate if
there is no genuine issue of material fact and the moving party
is entitled to a judgment as a matter of law. Id. at 342, 418
P.3d at 1198. A fact is material if it would establish or refute
an element of a cause of action or defense. Id. The evidence is
viewed in the light most favorable to the non-moving party. Id.
          (a) The AOAO's second amended counterclaim alleged
that Beeck negligently misrepresented Tropical's hydro-jetting
experience, and that Beeck, Tropical's CEO Olivia Kwong, and the
AOAO's former resident manager Randy Kowalkowski fraudulently
induced the AOAO to sign the contract.
          To prove negligent misrepresentation the AOAO must
show: (1) false information was supplied because of failure to
exercise reasonable care or competence in communicating the
information; (2) the AOAO relied on the false information; and
(3) the AOAO suffered a loss. Santiago v. Tanaka, 137 Hawai#i

      4
            Tropical moved for summary judgment on its claim for breach of the
implied covenant of good faith and fair dealing, but that claim was dismissed
by stipulation of the parties on February 12, 2019. Tropical also moved for
summary judgment on the AOAO's counterclaim that Beeck, Kwong, and Kowalkowski
conspired to defraud the AOAO, but "[c]ivil conspiracy does not alone
constitute a claim for relief." Robert's Haw. Sch. Bus, Inc. v. Laupahoehoe
Transp. Co., 91 Hawai#i 224, 260 n.44, 982 P.2d 853, 889 n.44 (1999)
(citations omitted), superseded on other grounds by statute as noted in, Haw.
Med. Ass'n v. Haw. Med. Serv. Ass'n, Inc., 113 Hawai#i 77, 106-07, 148 P.3d
1179, 1208-09 (2006).

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  NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

137, 154, 366 P.3d 612, 629 (2016). To prove fraudulent
inducement sufficient to invalidate the contract, the AOAO must
show (1) a representation of a material fact, (2) made to induce
the AOAO to act, (3) known to be false but reasonably believed
true by the AOAO, and (4) on which the AOAO reasonably relied and
acted to its damage. Matsuura v. E.I. du Pont de Nemours & Co.,
102 Hawai#i 149, 162–63, 73 P.3d 687, 700–01 (2003).
           Viewed in the light most favorable to the AOAO, the
AOAO's evidence showed that Tropical misrepresented its hydro-
jetting experience to the AOAO, and the AOAO relied on Tropical's
misrepresentation and would not have contracted with Tropical had
it known of Tropical's lack of experience. Tropical argues that
any misrepresentation to the AOAO was made by Kowalkowski (the
AOAO's resident manager), not Tropical. But the AOAO presented
evidence of the relationship between Kowalkowski and Beeck that,
when viewed in the light most favorable to the AOAO, could show
that Kowalkowski acted as Tropical's agent. Whether Tropical
exercised reasonable care or competence in communicating its
hydro-jetting experience, whether Kowalkowski was Tropical's
agent, and whether the AOAO's reliance was reasonable, are
questions for the trier of fact that should have precluded
summary judgment.
           (b) If the AOAO proves that Tropical fraudulently
induced it to contract for the hydro-jetting, the contract would
be invalid. There were genuine issues of material fact
precluding summary judgment on the AOAO's fraudulent inducement
claim. The circuit court thus erred by granting summary judgment
for Tropical on its breach-of-contract claim.
          For these reasons, the July 7, 2016 "Order Denying
Defendant Association of Apartment Owners of Moana Pacific's
Motion to Dismiss Plaintiff Tropical Plumbing & Bath, Inc.'s
Complaint with Prejudice, Filed on May 31, 2016" is affirmed; the
February 11, 2019 "Order Granting in Part and Denying in Part
Without Prejudice Plaintiff/Counterclaim Defendant Tropical
Plumbing & Bath, Inc. and Additional Counterclaim Defendant

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  NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Melvin Charles Beeck, Jr's Motion for Partial Summary Judgment,
Filed on December 21, 2018" is vacated; the April 23, 2019 "HRCP
Rule 54(b) Judgment in Favor of Plaintiff/Counterclaim Defendant
Tropical Plumbing & Bath, Inc. and Counterclaim Defendant Melvin
Charles Beeck, Jr. and Against Defendant/Counterclaim Plaintiff
Association of Apartment Owners of Moana Pacific" is vacated; and
this case is remanded to the circuit court for further
proceedings consistent with this summary disposition order.
          DATED: Honolulu, Hawai#i, April 12, 2024.

On the briefs:
                                      /s/ Keith K. Hiraoka
R. Laree McGuire,                     Presiding Judge
for Defendant/Counter-
claimant/Third-Party                  /s/ Sonja M.P. McCullen
Plaintiff-Appellant                   Associate Judge
Association of
Apartment Owners of                   /s/ Kimberly T. Guidry
Moana Pacific.                        Associate Judge

Ross T. Shinyama,
Summer H. Kaiawe,
John E. Dubiel,
for Plaintiff/
Counterclaim Defendant-
Appellee Tropical Plumbing
& Bath, Inc. and Third-Party
Defendant-Appellee Melvin
Charles Beeck, Jr.

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