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Lambert v. Waha

Supreme Court of Hawaii

May 17, 2016

HOVEY B. LAMBERT, TRUSTEE UNDER THAT HOVEY B. LAMBERT TRUST, an unrecorded Revocable Living Trust Agreement dated April 5, 2002, Respondent/Plaintiff-Appellee,
v.
WAHA (k); PAHUPU (k); RAHELA KANIU; GEORGE KAKELAKA LUA; CLARENCE LUA; ROSE DAVIDSON LUA; GEORGE LUA; ARDYS LUA; KENNETH LUA; ELLEN LUA; DELARINE TEENEY, also known as DELIRINE GALLAGHER; VIOLETLUA, also known as VIOLET OHUMUKINI; ARTHUR OHUMUKINI; MELODY OHUMUKINI; SIMEON LUA, also known as SIMEON LANI LUA; MAKAHIWA K. LUA, JR.; DAWN K.T. WASSON; JOANNA THOMPSON; HOWARD LUA, also known as HOWARD KEAWE LUA; TONI-SUE LUA; JEREMY K. LUA; JOEL LUA; JENILYNNE LUA LONGI; PATRICIA MALIA LUA MATAGI; GRAYCE DEAN; GERALDINE ROBERTS; VICKIE PILI; FALEMA'O PILI; JAMES LUA; PAULINE THORNTON, also known as PAULINE LUA; ROBERT LUA; JANICE L. KAI; JEAN P. CARSON; LAURENCE LUA; MARGO HOWLETT; ETUATE FA, also known as EDWARD FA; JOELENE FA; MARIA LUA KAMAI, also known as MARAEA KAMAE; LEONARD LUA; LORRAINE LUA; LEONARD R. LUA, JR.; EVELYN MAKAVECKAS; HENRY KAMAE, JR.; KANE KAMAE; KENNETH KAMAE; KLENNMEYER KAMAE, SR.; HARRIET KAMAE; KAY-VOLA SHANNON; KWEN-LYNN BRANDOW; CRAIG T. BRANDOW; HAZEL LUA NEMOTO; LAWRENCE NAOKI NEMOTO; LARYNELL NEMOTO-HUSEMANN, also known as GIGI GALDONES; TYRONE GALDONES; HEIDI K. KELEOPAA; KIANA N.H. JODELL; DAWNE BALDERSON, also known as DONNA SMITH; MAUREEN HARDIN; JOEL K. LUA; CYNTHIA LUA; SAMUEL LUA, also known as SAMUEL MASAO LUA; CAROLYN LUA; ROBERT E. MASSEY; DANIEL L. MASSEY; CAROL L. MASSEY; ROBIN ING; AMY DRUMMUNDO; MAILE VANAMAN, also known as MAILILEI VANAMAN; GEORGE LUA, also known as GEORGE POOKELA LUA; KALLEN LUA; INGRED MAILE; STRAIDE LUA; LANELL LUA; WARREN LUA; ROSE KOLUANA LUA; THELMA LUA, also known as THELMA WHITE, also known as LANI WHITE; PROPERTY RESERVE, INC.; ANA TEKIATA FINAU; LUCY LEIAHOLA GIRELLI; GEORGE NEHEMIA NIHIPALI, JR.; ROSEMARY MONTANO; COLLEEN CARRIER; JEFFREY UA; HARMONY ELAM; ELIZABETH BAL; HYRUM K. YEE POONG; MARGARET-ANN LUA; MARIAN KAPANUI; ANNETTE LAMM; SAFFIRE MAKAENA; erica MASSEY; JUANITA KAHANU POST; KEINARD HANS POST; KEINARD K. POST; WALTER SHANNON; GEORGE SHANNON; KATHLEEN SHANNON; DEPARTMENT OF TAXATION OF STATE OF HAWAII; UNITED STATES OF AMERICA INTERNAL REVENUE SERVICE; DEPARTMENT OF PLANNING AND PERMITTING, CITY AND COUNTY OF HONOLULU; CHILD SUPPORT ENFORCEMENT AGENCY OF STATE OF HAWAII; HAWAII PACIFIC FEDERAL CREDIT UNION, Respondents/Defendants-Appellees, and LESIELI TEISINA, Petitioner/Defendant-Appellant, and PENISIMANI TEISINA, Petitioner/Intervenor-Appellant, and MALTBIE K. NAPOLEON, Respondent/Party-In-Interest-Appellee.

         CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS (CAAP-12-0001024; CIVIL NO. 09-1-2529)

          R. Steven Geshell for petitioners Lesieli Teisina and Penisimani Teisina

          Philip J. Leas, W. Keoni Shultz and Trisha H.S.T. Akagi for respondent Hovey B Lambert, Trustee under that Hovey B. Lambert Trust, an unrecorded revocable living trust agreement

          NAKAYAMA, ACTING C.J., POLLACK, AND WILSON, JJ., AND CIRCUIT JUDGE PERKINS, IN PLACE OF RECKTENWALD, C.J., RECUSED, AND CIRCUIT JUDGE KIM, IN PLACE OF McKENNA, J., RECUSED

          OPINION

          POLLACK, J.

         INTRODUCTION

         This case arises out of a dispute over title to a parcel of land in Lā'ie, O'ahu, referred to as Parcel 33, in which the ownership interests of individuals holding estates in common were challenged by a co-owner of the property as the statutory period for adverse possession was nearing completion. Three primary issues are presented: (1) whether the statutory period for adverse possession tolls as to a party named in the quiet title action while litigation is pending; (2) whether the statutory period for adverse possession tolls for a tenant in common who is not joined as a party until later in the litigation; and (3) whether, on summary judgment, proof that a tenant in common built a house on the portion of the parcel over which he or she is asserting an adverse possessory interest is sufficient to demonstrate good faith, as required by statute and caselaw involving adverse possession of a property held in tenancy in common. For the reasons stated below, we hold that the statutory period for adverse possession tolls for a named party to the litigation but continues to accrue for unnamed claimants. We further hold that the facts of this case satisfy the evidentiary burden on summary judgment of demonstrating compliance with the good faith requirement prescribed by statute and under the common law in cases involving adverse possession against cotenants.

         II. BACKGROUND

         A. Relevant Facts

         The property in dispute includes two parcels of land in Lā'ie, O'ahu; the first is referred to as Parcel 33 and the second is referenced by the parties as a piece of Kuleana land (collectively Property). Lesieli Teisina (Lesieli) and Penisimani Teisina (Peni) (collectively, the Teisinas) acquired their interest in Parcel 33, on July 24, 1991, by quitclaim deed from Peter K. Lua for $25, 000.[1] The deed indicated that it conveyed "title, equity & [i]nterest to all 10, 000 [s]quare ft." within Parcel 33 (10, 000-square-foot parcel). The quitclaim deed was recorded on March 17, 1997. According to a certificate of title submitted by Hovey V. Lambert as Trustee under the Hovey B. Lambert Trust (Lambert), the Teisinas' interest can be traced to Makahiwa K. Lua, who received an undivided ½ interest in Parcel 33 from his brother and shared his undivided ½ interest with Hattie Lua Nihipali.

         In 1991, the Teisinas erected a house (a single-story structure consisting of three bedrooms, 1½ baths, and a living room) on the 10, 000-square-foot parcel, where they raised their children and lived continuously until the partition sale of the Property in 2012. During the period in which they lived at their home, the Teisinas expanded the house into a 5, 840-square-foot, two-story structure, consisting of eight bedrooms and 5½ bathrooms, with plumbing, electric connection, and running water, so as to accommodate their children, including ten adopted children. In 2010, the house was valued at $393, 200.

         In March 1997, Peni conveyed 0.023 acres of his interest in the 10, 000-square-foot parcel to Etuate and Joelene Fa (collectively, the Fas) as tenants by the entirety by quitclaim deed. Also by quitclaim deed, recorded in April 1997, Peni conveyed 0.012 acres of his interest in Parcel 33 to Dawn K.T. Wasson (Wasson).

         B. Procedural Background

         1. Circuit Court Proceedings

         On October 28, 2009, Lambert filed a complaint to quiet title and for partition (quiet title action) of the Property in the Circuit Court of the First Circuit (circuit court). The quiet title action named Lesieli and numerous other individuals as defendants; however, Peni was not named. In October 2010, upon motion by Lambert, the circuit court entered default against Lesieli in the quiet title action; subsequently, the default was set aside pursuant to a motion filed by Lesieli. In support of Lesieli's motion to set aside default, both Lesieli's attorney and Peni had filed declarations stating that Peni should be named as a defendant. The motion to set aside default was filed in conjunction with Lesieli's answer to Lambert's quiet title action. The answer asserted adverse possession as an affirmative defense. Lesieli did not file a cross claim against any of her codefendants.

         On January 3, 2011, Lambert moved for summary judgment to quiet title in the Property in himself and the other cotenants, including Lesieli. Lambert submitted various documents purporting to indicate the various ownership interests of the cotenants. The result, Lambert argued, was that he had a 6769/10976 interest. Finally, Lambert also requested that the Property be sold at a partition auction pursuant to Chapter 668 of the Hawai'i Revised Statutes (HRS).

         Lesieli opposed Lambert's summary judgment motion, arguing that she owned 10, 000 square feet of Parcel 33 and that Peni was an indispensable party to the action. Lesieli also asserted that she and Peni had been in exclusive possession of the 10, 000-square-foot parcel for 20 years, "paid for and openly built a two-story house in full view of everyone, " "raised their children" there, obtained permits to build on it, paid taxes, "utilities, water and electric bills, " entered "into an easement agreement" concerning the 10, 000-square-foot parcel, "built a fruit stand, " and operated a farm on the 10, 000-square-foot parcel from 1991 onwards.[2]

         On January 5, 2011, Lesieli moved to dismiss the complaint (Precondition Motion), [3] arguing that Lambert had failed to pay $750.00 to Lesieli's attorney in accordance with a dismissal order previously entered on June 3, 2009 (2009 Dismissal Order), in an earlier partition action concerning the same Property filed in the circuit court by Lambert's mother. In a subsequent motion to dismiss the complaint, filed on January 11, 2011, Lesieli asserted that Lambert's failure to name Peni as an indispensable party in the quiet title action required its dismissal (Indispensable Party Motion). The circuit court denied the Precondition Motion and the Indispensable Party Motion as well as a motion to reconsider the denial of both motions.

         In an order issued on June 20, 2011, the circuit court granted Lambert's summary judgment motion, quieted Lambert's title in relation to the ownership interests of the parties named in Lambert's action, and appointed a commissioner to perform a partition sale of the Property (Order Quieting Title). The circuit court determined that Lambert had a 6769/10976 interest in Parcel 33 and that Lesieli had a 3/5824 interest in Parcel 33. The Order Quieting Title did not address Lesieli's adverse possession defense, but the circuit court's ruling--that Lesieli has only a minute interest in Parcel 33--was an implicit rejection of Lesieli's adverse possession defense.

         In July 2011, Peni moved to intervene, claiming an interest in Parcel 33 and the house on that parcel. Peni thereafter filed his proposed answer, in which he asserted adverse possession as an affirmative defense. In objecting to the motion to intervene, Lambert argued, inter alia, that Peni had no interest in Parcel 33 since he conveyed his interest away on two occasions.[4] On August 31, 2011, the circuit court granted Peni's motion to intervene.

         In September 2011, Lambert moved for summary judgment as to Peni's interest in Parcel 33 and for a determination of the Teisinas' interest in the house on Parcel 33. In opposition to this motion, Peni filed a declaration in which he averred that he purchased the 10, 000-square-foot parcel with Lesieli and that he and Lesieli received a deed from Peter K. Lua as tenants by the entirety.

         As support for his declaration, Peni attached copies of numerous documents related to the purchase, maintenance, and use of the 10, 000-square-foot parcel. Additionally, Peni submitted declarations from Valu Pauni (Pauni), Feao Heimuli (Heimuli), and Tomasi Naeata (Naeata). The declaration of Pauni stated that he assisted in expanding the Teisinas' house on the 10, 000-square-foot parcel--the house in which the Teisinas raised their children and 10 adopted children. The declaration of Heimuli averred that the Teisinas built the house on the 10, 000-square-foot parcel in 1991, shortly after they purchased it from Peter K. Lua, and that he assisted in the original construction. Naeata's declaration also stated that he assisted Peni in building the house on Parcel 33 in 1991 and the rewiring of the expansion.

         On November 23, 2011, the circuit court granted Lambert's motion for summary judgment as to Peni's property interest, determining that Peni had no interest in Parcel 33 (Order Regarding Peni's Interest). Consequently, the circuit court implicitly rejected Peni's adverse possession defense based upon the circuit court's conclusion that Peni "has no title or interest" in the Property.

         On June 5, 2012, the circuit court's commissioner sold Parcel 33, excluding the house, to Lambert for $425, 000[5] and the Kuleana for $125, 000. The circuit court confirmed the sale and valued the Teisinas' house on Parcel 33 at $150, 000 of the $425, 000 purchase price (Confirmation of Sale Order).

         2. Intermediate Court of Appeals (ICA) Proceedings

         On appeal, the Teisinas argued that Lambert was barred from maintaining the quiet title action (1) for failure to pay Peni $750.00 in accordance with the 2009 Dismissal Order and (2) because Peni was not named as a defendant, despite being an indispensable party. The Teisinas also contended that they are entitled to the 10, 000-square-foot parcel within Parcel 33 by adverse possession.

         In the answering brief, Lambert argued that he was not precluded from commencing an action to quiet title against Lesieli based on noncompliance with the 2009 Dismissal Order because the order did not condition the commencement of an action against Lesieli upon payment of $750 to Peni or Fa. Additionally, Lambert maintained that Peni was not a necessary party to the quiet title action because any interest he has in Parcel 33 had already been conveyed to the Fas and Wasson. Further, Lambert contended that even if Peni was a necessary party, joinder, rather than dismissal, is the proper remedy because Peni could be feasibly joined. Finally, Lambert claimed that the Teisinas have not met the elements for an adverse possession claim against cotenants, specifically the statutory period and the requirement of good faith. As to the statutory period, Lambert argued that his filing of the quiet title action on October 28, 2009--less than 20 years from when the Teisinas started occupying Parcel 33 in July 1991--terminated the accrual by the Teisinas of the required statutory period for adverse possession. Lambert asserted that the Teisinas were unable to satisfy the good faith requirement of HRS § 669-1(b)[6] because the Teisinas did not record their quitclaim deed until 1997. It follows, Lambert maintained, that the Teisinas could establish good faith starting only in 1997, which falls short of the required 20-year statutory period. Lambert additionally argued that the Teisinas failed to abide by the actual notice requirement announced by this court in cases involving adverse possession claims in properties held in cotenancy. According to Lambert, the Teisinas had the duty to actually notify their cotenants of their adverse possession claim, a requirement that the Teisinas failed to satisfy.

         In their reply, the Teisinas asserted that Lambert's 2009 action did not terminate their accrual of the required 20-year statutory adverse possession period because Lambert's failure to pay Peni $750 rendered the 2009 action a nullity. Hence, the Teisinas maintained that Lambert's 2009 action was incapable of terminating the Teisinas' adverse possession period. Additionally, the Teisinas contended that they are exempt from the requirement of actually notifying their cotenants of their adverse possession claim because their cotenants already had actual knowledge that the Teisinas were claiming adversely to their respective interests. Accordingly, the Teisinas concluded that they satisfied the good faith requirement of adverse possession against cotenants under the common law.

         The ICA dismissed the Teisinas' appeal for lack of appellate jurisdiction. After accepting the Teisinas' application for writ of certiorari, we concluded that the Confirmation of Sale Order by the circuit court constituted an appealable order ...


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