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Jou v. Argonaut Ins. Co.

Supreme Court of Hawai'i

June 5, 2014

EMERSON M.F. JOU, M.D., Petitioner/Plaintiff-Appellant,
v.
ARGONAUT INSURANCE COMPANY, An Entity, Form Unknown; CITY AND COUNTY OF HONOLULU, A Self-Insured Governmental Entity; HEMIC, aka Hawaii Employers Medical Insurance Company, An Entity, Form Unknown; and MARRIOTT CLAIM SERVICES CORPORATION, a Corporation, Respondents/Defendants-Appellees. EMERSON M.F. JOU, M.D., Petitioner/Plaintiff-Appellant,
v.
HEMIC, aka Hawaii Employers Medical Insurance Company, An Entity, Form Unknown, Respondents/Defendants-Appellees

Page 450

CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS. ICA NO. 30606; CIV. NO. 03-1-1445. ICA NO. 30607; CIV. NO. 09-1-1529.

Stephen M. Shaw, for petitioner.

NAKAYAMA, ACTING C.J., MCKENNA, AND POLLACK, JJ., AND CIRCUIT JUDGE TRADER, IN PLACE OF RECKTENWALD, C.J., RECUSED, AND CIRCUIT JUDGE BROWNING, IN PLACE OF ACOBA, J., RECUSED.

OPINION

Page 451

[133 Hawai'i 473] POLLACK, J.

The sole issue in this case is whether Petitioner Emerson M.F. Jou, M.D. (Jou) is eligible to be awarded appellate costs. Jou filed separate appeals to the Intermediate Court of Appeals (ICA) regarding two orders of the Circuit Court of the First Circuit (circuit court) that had granted motions in favor of Respondent Hawaii Employers Medical Insurance Company (HEMIC). The ICA vacated one order, but denied Jou's request for costs related to the appeal of that order, relying on Hawaiian Ass'n of Seventh-Day Adventists v. Wong, 130 Hawai'i 36, 305 P.3d 452 (2013). We hold that the ICA misapplied Seventh-Day Adventists in denying Jou's request for costs related to that appeal. Accordingly, we vacate the order and judgment of the ICA that pertained to its denial of appellate costs.

I.

On July 11, 2003, Jou filed Civil No. 03-1-1445 (the 2003 Case) against Argonaut Insurance Company (Argonaut), the City and County of Honolulu, HEMIC, and Marriott Claim Services Corporation (Marriott), alleging insurer bad faith, interference, and statutory torts. On April 22, 2005 the circuit court entered a judgment in favor of Argonaut, the City and County of Honolulu, HEMIC, and Marriott as to all counts in the complaint, and awarded HEMIC $8,750.00 in attorneys' fees and $833.20 in costs.[1]

Jou appealed the circuit court's decision to the ICA. While the appeal was pending, Jou settled with Argonaut, and a partial dismissal of the appeal was approved by the ICA. On April 5, 2007, the ICA entered a summary disposition order affirming the circuit court's decision. The ICA entered an order awarding attorneys' fees and costs related to the appeal: $4,804.50 to Marriott, $6,275.40 to the City and County of Honolulu, and $9,462.20 to HEMIC.

Thereafter, Jou and HEMIC began settlement negotiations regarding the awards of attorneys' fees and costs by the circuit court and the ICA. In a settlement conference held at the circuit court on May 4, 2009, HEMIC, Jou, and the court signed a handwritten document (Settlement Document).[2]

A.

Following the apparent settlement agreement, Jou initiated Civil No. 09-1-1529 (the 2009 Case) on July 6, 2009 against HEMIC, alleging that, during the May 4, 2009 settlement negotiations, HEMIC concealed the fact that it had recorded a judgment lien against Jou's property. Jou further alleged that the lien resulted in a denial of a real estate loan. Jou filed an amended complaint on July 9, 2009 that asserted claims of tortious judgment lien, settlement fraud, intentional infliction of emotional distress, and negligence.

On February 19, 2010, HEMIC filed two motions. The first, a Motion to Enforce Settlement was filed in the 2003 Case. The second, a Motion to Enforce Settlement by Dismissing Action, was filed in the 2009 Case.

The circuit court held a consolidated hearing and orally granted both motions on May 28, 2010. The circuit court entered two orders: (1) an " Order Granting Defendant HEMIC's Motion to Enforce Settlement" (Order Enforcing Settlement) in the 2003 Case, which enforced the Settlement Document

Page 452

[133 Hawai'i 474] as a binding agreement; and (2) an " Order Granting Defendant HEMIC's Motion to Enforce Settlement by Dismissing Action" (Order Dismissing Action), which dismissed the 2009 Case. Judgment pursuant to the orders was entered on July 8, 2010.

B.

Jou filed separate appeals to the ICA of the Order Enforcing Settlement and the Order Dismissing Action. The appeals, Appeal Nos. 30606 and 30607, were consolidated by the ICA as Appeal No. 30606 (Consolidated 30606 Appeal). However, the ICA continued to refer to the original appeal numbers in addressing and deciding the issues that pertained to each appeal in its memorandum opinion and subsequent order pertaining to costs.

In Appeal No. 30606, Jou argued that the circuit court's Order Enforcing Settlement in the 2003 Case was contrary to law. Jou contended that the Settlement Document was merely a proposal for a release that required the execution of a signed release and indemnity agreement (indemnity agreement), and HEMIC waived a material condition in the release by not pursuing the execution of an indemnity agreement. The ICA disagreed, holding that the Settlement Document sufficiently represented the terms of the settlement and a separate indemnity agreement was not required. Jou v. Argonaut Ins. Co., No. 30606, 2013 WL 6043901 at *2 (App. Nov. 15, 2013) (mem.). The ICA therefore affirmed the Order Enforcing Settlement. Id.

In Appeal No. 30607, Jou argued that the circuit court's Order Dismissing Action in the 2009 Case was also in error. Jou contended that the circuit court erred by enforcing the Settlement Document as a global release of claims that had accrued after May 4, 2009. Id.

The ICA reviewed HEMIC's Motion to Enforce Settlement as a motion for summary judgment because it found the Order Dismissing Action was based " in part on a substantive determination as to the merits of the claims asserted in [the 2009 case]." [WL] at *3. The ICA concluded summary judgment was improper because HEMIC failed to establish that there were no genuine issues of material fact that either Jou's claims in the 2009 Case had accrued by the time the Settlement Document was executed, or that the dismissed claims were precluded by the Settlement Document. [WL] at *3-4. Further, the ICA found that the substantive merits in regards to Jou's fraud claims were not properly raised or addressed by the parties. [WL] at *4. The ICA therefore vacated the judgment entered by the circuit court and the Order Dismissing Action. [WL] at *5.

C.

Following the ICA's entry of judgment, Jou filed a Request and Declaration of Counsel for Costs (Request for Costs).

1.

Jou requested reimbursement of $1,396.85 in costs associated with the Consolidated 30606 Appeal based on the following breakdown:

Item

Cost - 30606

Cost - 30607

Filing Fees:

$275.00

$275.00

Transcript:

$151.83

$291.80

Copy:

$224.91

$116.75

USPS Postage:

$46.66

$14.90

Total:

$698.40

$698.45

In regards to Appeal No. 30607, which pertained to the Order Dismissing Action in the 2009 Case, Jou argued that costs should be awarded because the ICA ruled in his favor by vacating the circuit court's judgment in favor of HEMIC.

Page 453

In regards to Appeal No. 30606, which pertained to the Order Enforcing Settlement in the 2003 Case, Jou argued that the thrust of HEMIC's Motion to Enforce Settlement was to achieve dismissal of the tort claims in the 2009 Case. Therefore, according to Jou, the ICA's decision vacating the judgment in Appeal No. 30607 granted him " the remedy he sought (and obtained) in [Appeal No. 30606]; that is, saving the [2009 Case] tort [133 Hawai'i 475] claims from the effects of the previously signed settlement document." Jou argued that he thereby was rendered the prevailing party on the main issue in Consolidated Appeal 30606.

2.

On December 30, 2013 HEMIC filed an " Objection and Memo in Opposition to [Jou's] Request and Declaration of Counsel for Costs." HEMIC argued that Jou would not be able to repudiate the Settlement Document on remand, and would be barred from filing any claims to the extent that the claims accrued during the time covered by the Settlement Document.

HEMIC contended " the central issue in both appeals was whether the parties had entered into an enforceable settlement." Because the Settlement Document was enforceable, HEMIC was the " prevailing party" in both appeals.

HEMIC further argued that the ICA's affirmation that the Settlement Document was enforceable was significant because the circuit court, on remand, would determine when Jou's claims accrued and whether those claims were barred. Similarly, HEMIC argued that the ...


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