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Green v. Kanazawa

United States District Court, D. Hawaii

March 12, 2002

JEREMY GREEN and SHIZUKO GREEN, Plaintiffs,
v.
SIDNEY K. KANAZAWA, ESQ., a resident of California, MCGUIREWOODS, LLP, a Virginia limited liability partnership, and DOE DEFENDANTS 1-50, Defendants. HYE JA KIM, Plaintiff,
v.
SIDNEY K. KANAZAWA, ESQ., a resident of California, MCGUIREWOODS, LLP, a Virginia limited liability partnership, and DOE DEFENDANTS 1-50, Defendants.

          ORDER DENYING PLAINTIFFS' MOTION FOR RECONSIDERATION AND GRANTING CLARIFICATION

          Leslie E. Kobayashi, United States District Judge

         On November 30, 2017, this Court issued its Order: Denying Defendants' Motion for Summary Judgment on the Claims Asserted by Plaintiff Hye Ja Kim; Denying Defendants' Motion for Summary Judgment on the Claims Asserted by Plaintiffs in Counts I and II of the Complaint; and Granting in Part and Denying in Part Defendants' Motion for Summary Judgment for Lack of Actual Damages, or Alternatively, for Partial Summary Judgment Regarding Punitive Damages Arising out of the Acts or Omissions of Centex Homes ("11/30/17 Order"). [Dkt. no. 200.] On December 14, 2017, Plaintiffs Jeremy Green and Shizuko Green ("the Greens") and Hye Ja Kim ("Kim, " all collectively "Plaintiffs") filed a motion seeking reconsideration or clarification of the 11/30/17 Order ("Motion for Reconsideration"). [Dkt. no. 201.] Defendants Sidney K. Kanazawa, Esq. ("Kanazawa"), and McGuireWoods LLP (collectively "Defendants") filed their memorandum in opposition on December 28, 2017, and Plaintiffs filed their reply on January 11, 2018. [Dkt. nos. 203, 205.] The Court has considered the Motion for Reconsideration as a non-hearing matter pursuant to Rule LR7.2(e). The Motion for Reconsideration is hereby denied on all issues raised, and the Court clarifies that: 1) if Plaintiffs establish they could have prevailed on an unfair or deceptive acts or practices ("UDAP") claim against Centex by proving Centex Homes ("Centex") engaged in conduct that was reckless or intentional, the nonrecourse clauses in their contracts with Centex would not apply; 2) there are genuine issues of material fact for trial as to whether Centex engaged in intentional or reckless conduct that would support a UDAP claim; 3) the remedies Plaintiffs could have obtained if they prevailed in UDAP claims against Centex are part of Plaintiffs' damages in their claims against Defendants in this case; but 4) because treble damages are similar in nature to punitive damages, Plaintiffs cannot recover any treble damages they could have recovered from Centex as damages in this case against Defendants.

         BACKGROUND

         The relevant factual and procedural background of this case is set forth in the 11/30/17 Order, which ruled on Defendants': Motion for Summary Judgment on the Claims Asserted by Plaintiff Hye Ja Kim ("Kim Motion"), filed on April 17, 2017; Motion for Summary Judgment on the Claims Asserted by Plaintiffs in Counts I and II of the Complaint ("Liability Motion"), filed on April 19, 2017; and Motion for Summary Judgment for Lack of Actual Damages, or Alternatively, for Partial Summary Judgment Regarding Punitive Damages Arising Out of the Acts or Omissions of Centex Homes ("Damages Motion"), also filed on April 19, 2017. [Dkt. nos. 77, 82, 84.]

         These consolidated cases arise from Defendants' representation of residential unit owners in The Beach Villas at Ko Olina ("Beach Villas") in disputes with Centex Homes ("Centex"), the developer of the Beach Villas. Plaintiffs allege that, because of Defendants' sub-standard representation, they lost valuable claims against Centex through a settlement agreement in 2010 ("2010 Settlement Agreement") and another in 2013 ("2013 Settlement Agreement"). Plaintiffs therefore assert a legal malpractice claim ("Count I") and a breach of fiduciary duty claim ("Count II") against Defendants. [11/30/17 Order at 4-6.]

         The focus of the Motion for Reconsideration is the rulings on the Damages Motion. In particular, this Court ruled Plaintiffs knowingly and willingly entered into the limitation of liability provisions in their sales contracts with Centex (the "Limitation Provisions" and the "Sales Contracts"), and the Limitation Provisions were not unconscionable.[1] [Id. at 39-40, 47.] Thus, the Limitation Provisions are enforceable and would have precluded Plaintiffs from seeking treble damages from Centex in a UDAP claim. The 11/30/17 Order granted the Damages Motion as to the portion of Plaintiffs' damages based on the lost-treble-damages theory because Plaintiffs cannot prove Defendants' actions or omissions caused Plaintiffs to lose the ability to recover treble damages from Centex in UDAP claims related to the 2010 Settlement Agreement and the Lockout.[2] [ Id. at 47-48.] As to Plaintiffs' position that Defendants' actions and omissions caused Plaintiffs to lose the ability to recover punitive damages from Centex in fraud claims, this Court ruled the Limitation Provisions would not have precluded such recovery from Centex, but attorneys cannot be held liable for lost punitive damages in a legal malpractice claim. [Id. at 39, 54.]

         In the Motion for Reconsideration, Plaintiffs argue reconsideration of the 11/30/17 Order is necessary because this Court committed legal error in its unconscionability analysis. Plaintiffs also seek clarification of the 11/30/17 Order because they assert nothing in the order precludes them from recovering lost treble damages against Defendants if they prove they would have prevailed on their UDAP claims against Centex based on Centex's reckless behavior.

         STANDARD

         This Court has previously stated that a motion for reconsideration

"must accomplish two goals. First, a motion for reconsideration must demonstrate reasons why the court should reconsider its prior decision. Second, a motion for reconsideration must set forth facts or law of a strongly convincing nature to induce the court to reverse its prior decision." See Davis v. Abercrombie, Civil No. 11-00144 LEK-BMK, 2014 WL 2468348, at *2 (D. Hawaii June 2, 2014) (citation and internal quotation marks omitted).... "Mere disagreement with a previous order is an insufficient basis for reconsideration." Davis, 2014 WL 2468348, at *3 n.4 (citations and internal quotation marks omitted).

Riley v. Nat'l Ass'n of Marine Surveyors, Inc., Civil No. 14- 00135 LEK-RLP, 2014 WL 4794003, at *1 (D. Hawai"i Sept. 25, 2014). Local Rule 60.1 states, in relevant part: "Motions for reconsideration of interlocutory orders may be brought only upon the following grounds: (a) Discovery of new material facts not previously available; (b) Intervening change in law; [or] (c) Manifest error of law or fact."

         DISCUSSION

         I. Unconscionability

         Plaintiffs first argue this Court committed clear error in conducting an unconscionability analysis of the Limitation Provisions because unconscionability is a contract defense, and Plaintiffs never asserted the Limitation Provisions in the Sales Contracts were unconscionable. Plaintiffs contend the contract defense of unconscionability is ...


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