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SS&M Auto Parts, LLC v. Sand Island Business Association

Intermediate Court of Appeals of Hawaii

December 27, 2013

SS&M AUTO PARTS, LLC, a Hawaii limited liability company, formerly known as American Recycling, Plaintiff-Appellant,
v.
SAND ISLAND BUSINESS ASSOCIATION, a Hawaii nonprofit corporation, ISLAND WORKS, INC., a dissolved Hawaii corporation, MICHAEL CHOCK, doing business as Mokihana Builders, Defendants-Appellees, and DOES 1-50, Defendants.

NOT FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT (CIVIL No. 05-1-0936-05)

Gary Victor Dubin Frederick J. Arensmeyer (Dubin Law Offices) for Plaintiff-Appellant.

Lissa D. Shults Bradley R. Tamm (Shults & Tamm, ALC) Edwin A. Ebisui, Jr. for Defendant-Appellee Sand Island Business Association.

Nakamura, C.J., and Leonard and Ginoza, JJ.

MEMORANDUM OPINION

In this appeal arising out of a commercial arbitration, Plaintiff-Appellant SS&M Auto Parts, LLC (SS&M) appeals from orders and a Judgment entered by the Circuit Court of the First Circuit (circuit court)[1] on March 10, 2011, that inter alia confirmed a Final Arbitration Award (Arbitration Award) dated April 28, 2010, as clarified by an "Order Granting in Part Respondent Sand Island Business Association's Motion For Clarification, Modification and/or Correction of Final Arbitration Award" (Arbitrator's Clarifying Order) issued on May 19, 2010. The Arbitration Award and Arbitrator's Clarifying Order are referred to collectively as "Arbitration Decision."

On appeal, SS&M contends that (1) the arbitrator failed to decide what was submitted to him and thus the Arbitration'. Decision was incomplete; (2) the arbitrator decided what was not submitted to him and exceeded the scope of his authority; and (3) the Arbitration Decision as it relates to a rent trust fund was not confirmable.

SS&M's appeal in essence challenges the circuit court's confirmation of the Arbitration Decision in favor of Defendant-Appellee Sand Island Business Association (SIBA). In the circuit court, SS&M had sought to vacate the Arbitration Decision pursuant to Hawaii Revised Statutes (HRS) § 658A-23 (Supp. 2012).

For the reasons discussed below, we affirm.

I. Background

SIBA holds a Master Lease for Sand Island Industrial Park (Industrial Park). In 1993, SIBA subleased a portion of the Industrial Park, known as Lot No. 44 (Lot 44), to Island Softworks, Inc. (Island Softworks), now dissolved, represented by owner Defendant-Appellee Michael Chock (Chock). Six years later, in 1999, Chock and William Mahas (Mahas), who apparently controlled SS&M at the time, entered into an agreement to assign the sublease of Lot 44 to SS&M, which was subject to SIBA's approval. Chock granted SS&M possession of Lot No. 44. However, the sale and transfer of the sublease failed to be executed, apparently due to SIBA withholding consent because of concerns that SS&M was controlled by Mahas.

In 2000, SIBA filed suit against Island Softworks and Chock, seeking to terminate the sublease and to divest Island Softworks, Chock and any other person or entity claiming through them of all interest in Lot 44 (2000 Lawsuit). Although SS&M was not named as a party to the 2000 Lawsuit, the complaint identified as doe defendants any persons or entities to whom Island Softworks and/or Chock had conveyed interests in Lot 44.

In order to resolve the 2000 Lawsuit, SIBA, Island' Softworks/Chock and SS&M entered into a Settlement Agreement dated December 19, 2002. The Settlement Agreement provided inter alia that Chock agreed to sell the sublease to SS&M with closing of the sale to occur within a specified time period, that SIBA agreed to provide written consent to the assignment within a specified time period, and that SS&M agreed to various covenants related to its ownership and management, its operations at the Industrial Park, and its procurement of pollution liability-insurance. The Settlement Agreement also provided for mutual releases among the parties from and against all claims "of any-kind relating to the [2000] Lawsuit or any compulsory counterclaim[.]" The Settlement Agreement contained a broadly worded arbitration clause requiring that "[a]ny and all claims, controversies, or disputes arising out of or relating to this' Settlement Agreement, or the breach thereof, shall be fully and finally resolved by arbitration[.]"

Subsequently, the parties did not execute the sale of the sublease. In 2005, SS&M filed suit against SIBA, Island' Works and Chock seeking transfer of the sublease and claiming breach of the Settlement Agreement, fraud, unfair and deceptive business practices, bad faith, and requesting ...


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