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Au v. The Association of Apartment Owners of The Royal Iolani

United States District Court, D. Hawaii

January 4, 2016

RONALD GIT SUM AU, Plaintiff,
v.
THE ASSOCIATION OF APARTMENT OWNERS OF THE ROYAL IOLANI, ET AL., Defendants.

FINDINGS AND RECOMMENDATION TO DISMISS CASE PURSUANT TO THE PARTIES' SETTLEMENT AGREEMENT

BARRY M. KURREN, Magistrate Judge.

The Court received letter briefs, dated December 23, 2015 and December 28, 2015, (Docs. 133, 134), and was directed by Judge Susan Oki Mollway to issue Findings and Recommendations regarding whether to dismiss the case pursuant to the parties' Settlement Agreement. (Doc. 135.) Based on the following, the Court finds and recommends that dismissal of this case, pursuant to the parties' settlement agreement, is appropriate.

Inasmuch as the parties and the Court are familiar with the factual and procedural background of this case, the Court will only address herein the background that is relevant to the issue currently pending before the Court. (See Doc. 112 for a more complete background of this matter.)

On April 3, 2015, the parties entered into a settlement following a settlement conference before the Court, and the material terms and conditions were placed on the record. (Doc. 94, 96.) Counsel for Defendants Hawaiiana Management Company and the Association of Apartment Owners of the Royal Iolani ("Association"), Phillip Li, put the material terms of the settlement on the record as follows:

The parties have agreed that the plaintiff, Mr. Au, will dismiss his complaint and the claims asserted in that complaint against any and all parties who were either named, or could have been named, in that case with prejudice. In exchange for that, the arbitration will take place between Hawaiiana Management Company, the... Association of Apartment Owners of Royal Iolani, and Mr. Au.
And the point of that arbitration is to resolve the issues of what amount of attorney's fee - what amount of maintenance fees, and other charges, and attorney's fees he was supposed to pay; what amount of attorney's fees and maintenance fees, and associated fees he actually did pay; to determine whether [] he was charged too much for those, or whether he didn't pay enough, and to affix a number that will determine who gets paid what.
It will also address the issue of what amount of attorney's fees the Association would be entitled for pursuing the collection effort.
The parties have also agreed that with respect to any issues related to a deposition of Ms. McGuire, which we've agreed that Mr. Au will be allowed to take - I think on the 28th of April, it's already been scheduled - that the arbitrator will assume jurisdiction over that to the extent that there are any discovery issues that exist concerning that, and the arbitrator will make all other decisions regarding discovery.

(Doc. 96 at 2-3.) The parties further indicated that the dismissal of the case, with prejudice of all claims, "does not impact upon the rights of any of the parties to confirm the arbitration award in the appropriate court[.]" (Doc. 96 at 4.) Plaintiff then clarified that as a result of the dismissal, he would not be barred by collateral estoppel or res judicata in the arbitration. (Id. at 4.) Counsel for the AOAO and the Hawaiiana again clarified that

[t]he only thing I want to make clear is that the arbitration that we're having is about what amount should have been paid... and - I mean there's a lot of claims for violations of the constitution, those are not part of the arbitration... Those are all barred. This is about the numbers. This is, in any other case, for an Association trying to collect against the owner and the owner's right to make sure that he is only being charged what he's supposed to pay.

(Doc. 96 at 5(format altered).) The Court then questioned Plaintiff as to whether he agreed with Counsel's representation, to which Plaintiff stated "Yes, I'm not raising due process claims or anything like that." (Id.) Plaintiff did indicate that he did not want to be barred from arguing, for example, which statute governing the right to charge specific amounts should be applied, to which Counsel for AOAO and Hawaiiana agreed because those types of issues "go to the question of the amount of fees anyway." (Doc. 96 at 6-7.) Counsel further explained that Plaintiff would be barred from asserting new claims, as well as other claims that are in his complaint, and that the arbitration "really, is supposed to be how much is supposed to have been paid and who gets what credit, but that issue of how much fees for this whole process that we've been involved in, obviously, it's part of that, and that is part of the issue. So that - I don't have a problem with that." (Doc. 96 at 7.) Plaintiff agreed. Id . Essentially, the parties agreed that the arbitration would deal only with "[t]he amounts." (Id.) All parties agreed to the material terms of the settlement agreement and the agreement to arbitrate as stated on the record, (id. at 10-11), and the Court ordered the parties to submit the appropriate documentation by April 20, 2015. (Id. at 12.)

On April 27, 2015, a status conference regarding settlement was held. (Doc. 97.) The parties informed the Court that they were in disagreement over the terms of the settlement placed on the record. (Id.) On May 5, 2015, a further status conference regarding settlement was held, at which the parties discussed the scope of the arbitration. (Doc. 99.) The Court ordered the parties to file a motion to enforce or compel arbitration, and upon review and consideration, the Court would issue a written order. (Id.)

On May 18, 2015, the parties filed their respective Motions to Compel Arbitration. (Docs. 100, 101, 104.) On May 26, 2015, the Court elected to decide this matter without a hearing, pursuant to Local Rule 7.2(d) of the Local Rules of Practice for the United States District Court for the District of Hawaii. (Docs. 106, 107.) On July 30, 2015, the Court issued its Order Enforcing Agreement to Arbitrate. (Doc. 112.) The Court granted Defendant Laree McGuire's Motion to Enforce Settlement and reiterated that Defendant McGuire is dismissed from this case with prejudice and neither McGuire nor her law firm will be parties to the arbitration. (Doc. 112 at 10.) With regard to the remaining parties' motions to compel arbitration, the Court clarified that the parties do not challenge the validity of the agreement to arbitrate, and instead, the sole issue before the Court was the scope of the parties' agreement. (Doc. 112 at 12.) The Court determined that the scope of the parties' agreement to arbitrate was limited only to a determination as to

(1) what Au was assessed for maintenance fees and related costs; (2) what amount Au paid; (3) what amount Au was overcharged or undercharged, and which party is entitled to reimbursement; and (4) the amount of attorneys' fees and ...

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