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Nishimura v. Gentry Homes, Ltd.

Intermediate Court of Appeals of Hawaii

February 28, 2014

THOMAS NISHIMURA, COLETTE NISHIMURA, individually and on Behalf of a Class of All Persons Similarly Situated, Plaintiffs-Appellees,
v.
GENTRY HOMES, LTD., a Hawai'i Domestic Profit Corporation, Defendant-Appellant SIMPSON MANUFACTURING CO., InC., a Delaware Corporation; SIMPSON STRONG-TIE COMPANY, INC., a California Corporation; JOHN and JANE DOES 1-100, DOE PARTNERSHIPS 1-100; DOE CORPORATIONS 1-100; DOE GOVERNMENTAL AGENCIES 1-100; and DOES ASSOCIATIONS 1-100, Defendants

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT (CIVIL NO. 11-1-1522-07)

Ryan H. Engle Sarah M. Love Summer L. Sylva (Bays Lung Rose & Holma) for Defendant-Appellant.

Melvin Y. Agena (Law Offices of Melvin Y. Agena) and Glenn K. Sato (Law Office of Glenn K. Sato) and Graham B. Lippsmith (Girardi Keese) for Plaintiffs-Appellees.

FOLEY, PRESIDING J., FUJISE AND LEONARD, JJ.

OPINION

FOLEY, J.

Defendant-Appellant Gentry Homes, Limited (Gentry) appeals from the November 13, 2012 "Order Granting in Part and Denying in Part Gentry Homes, Ltd.'s Motion to Compel Arbitration Filed August 29, 2012" and the February 4, 2013 "Order Denying Gentry Homes' Motion for Reconsideration of the Order Granting in Part and Denying in Part Gentry Homes, Ltd.'s Motion to Compel Arbitration [Filed August 29, 2012], Filed on November 13, 2012" both entered in the Circuit Court of the First Circuit[1] (circuit court) .

On appeal, Gentry contends the circuit court erred by:

(1) requiring the parties to meet and confer on the selection of a local arbitration service in contravention of the parties written agreement;

(2) finding the Professional Warranty Services Corporation (PWC), who was to select the arbitration service under method the parties' agreement, had a potential conflict of interest in serving in that capacity;

(3) finding PWC's potential conflict of interest was a sufficient basis to sever and strike portions of the parties' agreement providing a method for selecting an arbitration service;

(4) relying upon Rules of the Circuit Courts of the State of Hawai'i (RCCH) Rule 12.2 to order the parties to confer on the selection of a local arbitration service; and

(5) denying Gentry's motion for reconsideration.

I. BACKGROUND

On October 12, 2011, Plaintiffs-Appellees Thomas and Colette Nishimura (Nishimuras) filed a First Amended Class Action Complaint (Amended Complaint) as individuals and on behalf of a class of others similarly situated, including homeowners, those with common interests in common elements of multi-family buildings, and any association of unit owners of the multi-family homes (collectively, Nishimura Plaintiffs) against "Designer, Developer and Builder Doe Defendants, " including Gentry, and "Manufacturer Defendants, " including Simpson Manufacturing Co., Inc. and Simpson Strong-Tie Company, Inc.[2] (collectively, Simpson). The Amended Complaint raised breach of contract, product liability, strict liability, negligence, breach of implied warranty, breach of implied warranty of habitability, breach of warranty of merchantability, breach of express warranty, and violation of Hawaii Revised Statutes (HRS) § 480-2 claims in relation to alleged failures to protect their homes from hurricane-related damages.

Gentry is a Hawai'i corporation and the developer and seller of homes in Ewa Beach, Hawai'i. The Nishimuras reside in a single-family home developed, designed, and built by Gentry, which is part of a subdivision called Prescott II. Gentry used hurricane straps manufactured and sold by Simpson in the construction of the Nishimuras' home, which was originally owned by Eric and Julie Javier (Javiers).

On August 29, 2012, Gentry filed a motion to compel arbitration. Attached to their motion was: (1) the Javiers' Deposit Receipt and Sales Agreement dated February 16, 2004 (DRSA); (2) the Home Builder's Limited Warranty (Limited Warranty); (3) the Javiers' Limited Warranty Registration form, dated April 30, 2004; and (4) a warranty deed by which the Nishimuras purchased the Javiers' home, recorded on March 3, 2006. Gentry's Limited Warranty is administered by ...


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