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Association of Apartment Owners of Nihilani At Princeville Resort v. Nihilani Group, LLC

Intermediate Court of Appeals of Hawaii

September 30, 2013

ASSOCIATION OF APARTMENT OWNERS OF NIHILANI AT PRINCEVILLE RESORT, Plaintiff-Appellee,
v.
NIHILANI GROUP, LLC; BROOKFIELD HOMES HAWAII, INC.; JOHN DOES 1-10; JANE DOES 1-10; DOE PARTNERSHIPS 1-10; DOE CORPORATIONS 1-10; DOE GOVERNMENTAL ENTITIES 1-10, Defendants-Appellants NIHILANI GROUP, LLC AND BROOKFIELD HOMES HAWAII, INC. Third-Party Plaintiff
v.
JD PAINTING & DECORATING, INC.; JOHN DOES 1-10; JANE DOES 1-10; DOE PARTNERSHIPS 1-10; DOE CORPORATIONS 1-10; DOE GOVERNMENTAL ENTITIES 1-10, Third-Party Defendants

NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS AND PACIFIC REPORTER

APPEAL FROM THE CIRCUIT COURT OF THE FIFTH CIRCUIT (CIVIL NO. 09-1-0274)

Randall K. Schmitt Jordon J. Kimura (McCorriston Miller Mukai MacKinnon) for Defendants-Appellants.

Laree McGuire Christian P. Porter (Porter McGuire Kiakona & Chow) for Plaintiff-Appellee.

Nakamura, C.J., Foley and Fujise, JJ.

MEMORANDUM OPINION

Defendants-Appellants Nihilani Group, LLC and Brookfield Homes Hawaii, Inc. (collectively, Brookfield) appeal from the September 12, 2 012 "Order Granting Plaintiff Association of Apartment Owners of Nihilani at Princeville Resort's Motion to-Enforce Settlement Filed May 10, 2012" entered in the Circuit Court of the Fifth Circuit[1] (circuit court). Plaintiff-Appellee Association of Apartment Owners of Nihilani at Princeville Resort (AOAO) and Brookfield's July 2011 settlement agreement resolved breach of construction contract and damages claims relating to a condominium construction project in Princeville, Kaua'i (Project).

On appeal, Brookfield contends the circuit court erred in (1) "concluding that there was no genuine issue of material fact that the parties had entered into a valid compromise agreement because the Brookfield Appellants were mistaken as to a basic assumption at the time of [executing the settlement agreement]" and (2) awarding attorneys' fees to AOAO.[2]

I. BACKGROUND

Nihilani Group, LLC and Brookfield Homes Hawaii, Inc. are, respectively, the developer and general contractor for the Project. On February 16, 2010, AOAO filed their first amended complaint in circuit court, alleging that Brookfield breached its construction contract by failing to (1) provide a proper surface for an interior turnaround area and visitor parking stalls; (2) construct a trash enclosure; and (3) remediate a building mold problem that resulted from improper ground surfacing. Existing surfacing for the turnaround area and visitor parking stalls consisted of "grass crete" (a plastic piece that holds the grass/base) that AOAO found unsatisfactory.

In July 2011, AOAO and Brookfield entered a General Release and Settlement Agreement (Agreement) that resolved all claims between the parties. Paragraph 11 of the Agreement provided:

11. Merger; Interpretation
This Agreement contains the entire Agreement between the Parties hereto and supersedes all other prior or concurrent oral or written letters, agreements, or understandings between the Parties regarding the Incident. The terms of this Agreement are contractual and not a mere recital. The interpretation of this Agreement shall be decided and construed in accordance with Hawaii law. This Agreement is the product of arms-length negotiations between the Parties and therefore shall be deemed to have been drafted jointly by the Parties.

The Agreement required Brookfield to replace existing grass crete and install pervious concrete in the Project's visitor parking and turnaround areas, pending approval from the Princeville Community Association's Community Design Committee (CDC) and the County of Kaua'i (County) . If those permits were not approved, Brookfield would "offer the AOAO the 'cash equivalent'" of pervious concrete installation; and if AOAO rejected the "cash equivalent", pay AOAO $20, 000 and install a grass-crete alternative to the form already installed in the Project.

On July 6, 2011, CDC approved Project plans to install pervious concrete as stated in the Agreement. On August 26, 2011, Brookfield requested approval from the County "to change the [Project's] grass pave material to a pervious concrete material supplied by the local concrete vendor" for work scheduled to begin on October 1, ...


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