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Wallace v. Burrows

Intermediate Court of Appeals of Hawaii

December 30, 2013

KENNETH L. WALLACE, Trustee of the Kenneth L. Wallace Living Trust Dated June 20, 2001, Plaintiff-Appellant,
v.
HARLOW BURROWS, Defendant/Cross-claimant/ Cross-claim Defendant-Appellee, and LA BAHIA, 1993, INC., a Hawaii corporation, Defendant/Cross-claim Defendant-Appellee, and SCOTT DEAN, ROBERT J. CELLA, CBIP, INC., dba COLDWELL BANKER ISLAND PROPERTIES, Defendant/Cross-claim Defendant/ Cross-claimant-Appellee, and JOHN DOES 1-2 0 and JANE DOES 1-2 0, Defendants

NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

APPEAL FROM THE CIRCUIT COURT OF THE SECOND CIRCUIT (CIVIL NO. 05-1-0141)

Michael L. Lam and Mark G. Valencia (Case Lombardi & pettit) and Peter Van Name Esser (with them on the replay) for plaintiff-Appellant.

Craig G. Nakamura and Erika L. Lewis Associate Judge (Carlsmith Ball LLP) for Defendant/Cross-claim Defendant/Cross-claimant-Appellee Harlow Burrows and Defendant/Cross-claim De fendant-Appe11ee La Bahia, 1993, Inc.

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

SUMMARY DISPOSITION ORDER

This appeal arises from a contract for the sale and purchase of a home in Wailea, Maui (the "Home, " or the "Property"), entered into between Defendant-Appellee La Bahia 1993, Inc. ("La Bahia") as seller and Plaintiff-Appellant Kenneth L. Wallace, Trustee of the Kenneth L. Wallace Living Trust Dated June 20, 2001 ("Wallace") as buyer, on December 15, 2004. Defendant-Appellee Harlow Burrows ("Burrows") is the sole officer and director of La Bahia. Defendant-Appellee CBIP, Inc., dba Coldwell Banker Island Properties ("Coldwell Banker") entered into a dual agency agreement with Wallace and Burrows. In the Coldwell Banker Dual Agency Consent Agreement, under which Coldwell Banker represented both parties in the transaction, Defendant-Appellee Scott Dean ("Dean") and Peter Gelsey ("Gelsey") were identified as the listing agent and selling agent respectively, and Defendant-Appellee Robert J. Cella ("Cella") was identified as the seller's broker-in-charge.[1]

Wallace appeals from the May 12, 2008 order denying his motion for partial summary judgment ("Order Denying MPSJ"); the November 18, 2009 Findings of Fact, Conclusions of Law, and Order; the March 9, 2 010 Final Judgment; and the March 23, 2 010 final judgment in favor of Burrows and La Bahia, each entered in the Circuit Court of the Second Circuit ("Circuit Court").[2]

Wallace raises five points of error on appeal. He contends that the Circuit Court erred in (1) denying his Motion for Partial Summary Judgment; (2) entering inadequate findings of fact ("FOF"); (3) entering clearly erroneous FOF and wrong conclusions of law ("COL"); (4) limiting cross-examination of defense witness James Worley; and (5) awarding attorneys' fees to Burrows without apportionment.

Upon careful review of the record and the briefs submitted by the parties and having given due consideration to the arguments advanced and the issues raised by the parties, we resolve Wallace's points of error as follows:

(1) Under the "Morgan rule, " see Morgan v. Am. Univ., 534 A.2d 323 (D.C. 1987), "an order denying [a] motion [for summary judgment] could not be appealed if denial was based on the presence of factual questions for the jury, but could be appealed if based on questions of law." Larsen v. Pacesetter Systems, Inc., 74 Haw. 1, 17-18, 837 P.2d 1273, 1282 (1992). Attempting to distinguish Morgan, Wallace contends that the Order Denying MPSJ "was based on legal error, and not 'on the presence of factual issues.'" Wallace further claims that "the trial court denied summary judgment based on the mistaken assumption that Wallace must show an intentional failure to disclose prior repairs or defects in order [for Defendants-Appellees] to be found liable for breach of contract."

The Order Denying MPSJ, however, expressly states that it is based on disputed issues of material fact. Indeed, the hearing transcript illuminates the court's thinking.

At the hearing, the Circuit Court identified two issues raised by Wallace's motion: (i) whether the Deposit Receipt Offer and Acceptance ("DROA")[3] and Hawaii Revised Statutes chapter 508D ("Chapter 508D") required the seller to disclose all material facts concerning the Property; and (ii) whether the seller failed to disclose material facts to the buyer. As to the first issue, the court concluded, as a matter of law, that the seller was under an obligation to disclose all material facts concerning the Property under the DROA and Chapter 50 8D. As to the second issue, the court explained:

However, with respect to the second portion of this motion, that is that the seller failed to disclose material facts to the buyer, including repairs to the roof of the residence on the subject property, and repairs to the interior of the property, the Court has determined that there are genuine issues of material fact that would prevent this Court from entering judgment as a matter of law in this summary fashion.

Although the Circuit Court did not elaborate further on the genuine issues of material fact, the transcript makes it clear that the court was referring to unresolved questions regarding whether Burrows actually disclosed material past defects. Here, as in Bhakta v. Cnty. of Maui, 109 Hawai'i 198, 124 P.3d 943 (2005), the Circuit Court separated out the issues in the motion into issues of law and issues of fact, and denied the motion based on the latter. Cf. Gump v. Walmart Stores, Inc., 93 Hawai'i 428, 437-38, 5 P.3d 418, 427-28 (App. 1999), aff'd in part, rev'd in part sub nom. Gump v. Wal-Mart Stores, Inc., 93 Hawai'i 417, 5 P.3d 407 (2000) (allowing review on appeal because the trial court denied the motion for summary judgment based on an issue of law). Therefore, the Morgan rule applies, and the Order Denying MPSJ is not reviewable by this court.

(2) Wallace argues that the Circuit Court failed to enter findings sufficient to explain its ultimate conclusions or to address almost a dozen critical ...


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