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Association of Apartment Owners of Lihue Townhouse v. McGrath Properties I, LLC

Intermediate Court of Appeals of Hawai‘i

February 17, 2012

ASSOCIATION OF APARTMENT OWNERS OF LIHUE TOWNHOUSE, Plaintiff-Appellant
v.
McGRATH PROPERTIES I, LLC, a Hawai‘i Limited Liability Company; John and Jane Does 1-10, Doe Partnerships, Doe Corporations, Doe Governmental Agencies and Doe Entities 1-20, Defendants-Appellees.

Editorial Note:

This decision has been designated as "Unpublished disposition." in the Pacific Reporter. See HI R RAP RULE 35

Appeal from the Circuit Court of the Fifth Circuit (Civil No. 08-1-0202).

Philip S. Nerney, on the briefs, for Plaintiff-Appellant.

Jonathan S. Durrett, Adrian W. Rosehill, Alan J. Ma, (Stubenberg & Durrett), on the briefs, for Defendants-Appellees.

Dorothy Sellers, Solicitor General, on the briefs, for amicus curiae State of Hawai‘i.

FOLEY, Presiding J., FUJISE and LEONARD, JJ.

MEMORANDUM OPINION

Plaintiff-Appellant Association of Apartment Owners of Lihue Townhouse (the Association) appeals from the " Order 1) Continuing Hearing on Plaintiff's Motion for Summary Judgment and for Default Judgment Filed May 12, 2009; 2) Granting Motion to Set Aside Entry of Default; and 3) Re: Arbitration per [Hawaii Revised Statutes (HRS) ] Section 514B-14S" (Order) entered by the Circuit Court of the Fifth Circuit [1] (circuit court) on December 9, 2009. On appeal, the Association contends that the circuit court erred when it ordered the Association and Defendant-Appellee McGrath Properties I, LLC (McGrath) to arbitration.

I. BACKGROUND

On September 4, 2008, the Association made a demand for payment on McGrath for an outstanding debt of $2,995.28. On October 17, 2008, the Association filed a Complaint to foreclose against McGrath.

On December 1, 2008 Suzanne McGrath-Kitamura (Kitamura) presented a personal check to the Association in the amount of $5,000. The Association refused to accept the check. On January 23, 2009, Kitamura presented a cashier's check in the amount of $5,000 to the Association, which the Association again refused to accept. On July 17, 2009, the Association informed McGrath that the outstanding debt owed was $17,216.90

On April 1, 2009, the Association requested " Entry of Default as to [McGrath]," which the circuit court entered on the same day. On May 12, 2009, the Association filed its " Motion For Summary Judgment and for Default Judgment" (Motion). The circuit court continued the Association's Motion several times. On October 22, 2009, the circuit court held a hearing on the Motion. During the hearing, the circuit court required counsel for McGrath to write a $10,000 check from counsel's client trust account to the Association. The circuit court clarified that it would not be requiring McGrath to pay the full amount claimed to begin mediation, as is generally required under HRS § 514B-146 (2006 Repl.). Id. On December 9, 2009, the circuit court entered its written Order, stating in part:

3. Plaintiff and Defendant McGrath Properties I, LLC shall arbitrate their respective claims and/or defenses, pursuant to [HRS] Section 514B-146; provided that Defendant McGrath Properties I, LLC shall pay the sum of $10,000.00 to Plaintiff by no later than October 30, 2009, and provided further that all ...

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