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Ashley v. Hart

Intermediate Court of Appeals of Hawai'i

October 24, 2014

AUSTIN ASHLEY, MARISSA ASHLEY and ACTION TEAM REALTY, INC., Plaintiffs-Appellees,
v.
TODD E. HART and HART OF KONA REALTY, INC., Defendants-Appellants and DEBRA A. HART, Defendant

Editorial Note:

This decision is published in table format in the Pacific and Hawai'i reporter

APPEAL FROM THE CIRCUIT COURT OF THE THIRD CIRCUIT. S.P. NO. 06-1-10K.

On the briefs: Francis L. Jung, Carol M. Jung (Jung & Vassar, P.C.), for Defendants-Appellants.

Stephen D. Whittaker, for Plaintiffs-Appellees.

By: Fujise, Presiding Judge, Leonard and Ginoza, JJ.

OPINION

SUMMARY DISPOSITION ORDER

Defendants-Appellants Todd E. Hart and Hart of Kona Realty, Inc. (collectively Hart Appellants) appeal from the March 2, 2012 Final Judgment (Judgment) and February 28, 2012 " Findings of Fact; Conclusions of Law; Order Confirming Final Arbitration Award and Final Judgment" (FOF/COL) entered by the Circuit Court of the Third Circuit[1] (circuit court). The Judgment confirmed a June 5, 2006 Final Arbitration Award entered in favor of Plaintiffs-Appellees Austin Ashley, Marissa Ashley, and Action Team Realty, Inc. (collectively the Ashleys) and against the Hart Appellants. Judgment was entered pursuant to an order of remand from the Intermediate Court of Appeals (ICA) for further consideration of two claims of prejudicial misconduct by an arbitrator.

The parties submitted a contractual dispute to arbitration before attorney Shawn M. Nakoa (Arbitrator). After the circuit court confirmed the Arbitration Award, the Hart Appellants appealed to the ICA in Case No. 28207. This court issued a Memorandum Opinion remanding two limited issues to the circuit court: (1) whether the Arbitrator's alleged ex parte consultation with attorney Kenneth Ross (Ross) constituted prejudicial misconduct under Hawaii Revised Statutes (HRS) § 658A-23(a)(2)(C) (Supp. 2013); and (2) whether the Arbitrator's ex parte telephone contacts with the Ashleys' counsel constituted prejudicial misconduct. Ashley v. Hart, No. 28207 (App. Feb. 25, 2011) (mem.).

On November 17, 2011 the circuit court held an Evidentiary Hearing to determine the outstanding issues, taking testimony from Stephen D. Whittaker (counsel for the Ashleys), Usha Kilpatrick Kotner (former counsel for the Hart Appellants), Ross, and the Arbitrator. The circuit court then issued its FOF/COL, and filed its Judgment confirming the Arbitration Award. On March 29, 2012, the Hart Appellants filed this appeal.

As their point of error on appeal, the Hart Appellants assert that " [t]he sole issue in this appeal is whether or not the Third Circuit Court erred and abused its discretion in holding that '[the Hart Appellants] have failed to meet their burden of proving that [the Arbitrator] committed misconduct prejudicing their rights in the arbitration proceeding.'" In support of their point of error, the Hart Appellants argue that the circuit court was clearly erroneous in making certain Findings of Fact (FOFs) and erred in its Conclusion of Law (COLs) related to whether the Arbitrator committed prejudicial misconduct by consulting with Ross and failing to make appropriate disclosures.[2]

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, as well as the relevant statutory and case law, we resolve the Hart Appellants' points of error as follows, and affirm.

The Hart Appellants challenge three of the circuit court's FOFs and one COL. They are:

[FOF] 6. No specific agreement was reached among [the Arbitrator] and the parties as to whether or not [the Arbitrator] could confer with Mr. Ross about the case.
[FOF] 7. It was [the Arbitrator's] belief that she disclosed to the parties at the first prehearing conference that she intended to confer with Mr. Ross or " her partners" about the case and that no one objected to her expressed intent.
[FOF] 9. Mr. Ross did not have a conflict of interest with any of the named parties in the case.
[COL] 2. On the record, [the Hart Appellants] have failed to meet their burden of proving that [the Arbitrator] committed misconduct prejudicing their rights in the arbitration proceeding. Accordingly, under the standard set forth in HRS ยง ...

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