United States District Court, D. Hawaii
AMENDED ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
E. Kobayashi United States District Judge
March 9, 2016, Defendants the Association of Apartment Owners
of the Golf Villas (“AOAO”) and Certified
Management, Inc., doing business as Certified Hawaii, now
known as Associa Hawaii (“Certified, ”
collectively “Defendants”), filed their Motion
for Summary Judgment (“Motion”). [Dkt. no. 29.]
Plaintiff Vincent DeRosa (“Plaintiff”) filed his
memorandum in opposition on March 28, 2016, and Defendants
filed their reply on April 4, 2016. [Dkt. nos. 32, 36.] This
matter came on for hearing on April 18, 2016.
3, 2016, this Court issued an entering order ruling on the
Motion (“5/3/16 EO Ruling”). [Dkt. no. 43.] The
instant Order supersedes the 5/3/16 EO Ruling. After careful
consideration of the Motion, supporting and opposing
memoranda, and the arguments of counsel, Defendants'
Motion is HEREBY GRANTED IN PART AND DENIED IN PART.
Specifically, the Motion is DENIED WITHOUT PREJUDICE as to
Plaintiff's breach of contract claim, and the Motion is
GRANTED in all other respects. As to the remaining claims -
breach of contract and the Haw. Rev. Stat. § 515-16(1)
claim - any party who desires to file a motion for summary
judgment has leave to file by or before May 31,
filed his Complaint on January 22, 2015 in state court.
[Notice of Removal, filed 5/7/15 (dkt. no. 1), Decl. of David
R. Major (“Major Removal Decl.”), Exh. A
(Complaint).] Defendants removed the case based on federal
question jurisdiction. [Notice of Removal at ¶ 2.]
Complaint alleges that Plaintiff has a disability, as that
term is defined in the Americans with Disabilities Act
(“ADA”). Plaintiff owns a pug named Jake, who is
a certified Emotional Support Animal (“ESA”),
registered with the National Service Animal Registry
(“NSAR”). [Complaint at ¶¶ 8-10.]
Further, Plaintiff alleges that:
“Jake” meets the ADA definition of a service dog.
The Fair Housing Amendments Act of 1988, Section 504 of the
Rehabilitation Act of 1973 and Title II of the ADA require
property managers and landlords to make reasonable
accommodations to permit a disabled handler to keep an ESA
even when there is a policy explicitly prohibiting pets.
[Id. at ¶ 11.]
following facts are undisputed. Plaintiff previously owned a
condominium unit at the Kapalua Golf Villas (“Golf
Villas”), which is part of the Kapalua Resort, a master
planned community. [Defs.' Separate Concise Statement of
Facts in Supp. of Motion (“Defs.' CSOF”),
filed 3/9/16 (dkt. no. 30), at ¶¶ 1-2; Pltf.'s
Separate Concise Statement of Facts in Supp. of Mem. in Opp.
(“Pltf.'s CSOF”), filed 3/28/16 (dkt. no.
33), at ¶¶ 1-2.] The Kapalua Resort is subject to a
December 29, 1976 Declaration of Covenants and Restrictions,
the applicable version of which was amended and restated, and
recorded on September 30, 1987 (“Kapalua
Declaration”). [Defs.' CSOF at ¶ 2;
Pltf.'s CSOF at ¶ 2; Defs.' CSOF, Decl. of Alan
Fleisch (“Fleisch Decl.”), Exh. B (Kapalua
Decl.).] The Golf Villas's Declaration of Horizontal
Property Regime (“Golf Villas Declaration”)
states that it is subject to the Kapalua Declaration.
[Defs.' CSOF at ¶ 4; Pltf.'s CSOF at ¶ 4;
Fleisch Decl., Exh. C (Golf Villas Decl.).] The Kapalua
Declaration therefore contains numerous covenants and
restrictions that encumbered the title to Plaintiff's
Golf Villas unit. [Defs.' CSOF at ¶ 5; Pltf.'s
CSOF at ¶ 5.]
claims in this case arise from: the AOAO's refusal to
grant Plaintiff an exception to what the AOAO asserts is a
no- pets policy in the Golf Villas's governing documents;
and alleged retaliation by the AOAO and its agent, Certified,
for Plaintiff's opposition to a Golf Villas remediation
project and for his filing of a disability discrimination
complaint against the AOAO with the Hawai`i Civil Rights
Commission (“HCRC”) and the United States
Department of Housing and Urban Development
Complaint does not set forth his claims as numbered counts.
He lists them in one paragraph:
The actions and omissions of the AOAO and Certified
constitute retaliation, bad faith, selective enforcement of
the governing documents, negligence, gross negligence, breach
of contract, breach of fiduciary duty, negligent and
intentional emotional distress, prima facie tort,
racketeering, and violations of [Haw. Rev. Stat.]
§§ 515-16(1), 515-16(6), 514B-9, 514B-105, 514B-105
[sic] and [Haw. Admin. R.] §§ 12-46-301,
12-46-310(1) and 12-46-310(6).
[Complaint at ¶ 29.] The Complaint seeks the following
relief: a declaratory judgment that Defendants violated
§ 515-16(1) and (6), § 12-46-301, and §
12-46-310(1) and (6); “[j]ust compensation including
general, special, and punitive damages[;]”
attorneys' fees and costs; and any other appropriate
relief. [Id. at pg. 8.]
instant Motion, Defendants argue that all of Plaintiff's
claims should be dismissed with prejudice or this Court
should grant summary judgment in Defendants' favor.
memorandum in opposition, Plaintiff asks that he be allowed
to continue discovery, pursuant to Fed.R.Civ.P. 56(d), before
this Court rules on the Motion. [Mem. in Opp. at 2.] In an
April 13, 2016 entering order (“4/13/16 EO”),
this Court denied Plaintiff's request because he failed
to follow the requirements for a Rule 56(d) request. [Dkt.
Court also notes that Plaintiff failed to include a
declaration or affidavit authenticating his exhibits.
Although Plaintiff submitted a declaration, [Decl. of Vincent
DeRosa (“Plaintiff Declaration”), filed 3/28/16
(dkt. no. 34), ] it is not sufficient to authenticate any of
his exhibits. In the 4/13/16 EO, this Court informed the
parties that it would not consider any exhibits that were not
properly authenticated. However, out of fairness, this Court
recognizes that: several of Plaintiff's exhibits are
documents that are included among Defendants' exhibits;
some of Plaintiff's other exhibits are described -
although not specifically identified according to exhibit
number - in his declaration; and still more of
Plaintiff's exhibits could have been authenticated by
Plaintiff because they are correspondence either from him or
Court does not condone Plaintiff's failure to follow the
applicable rules, and this Court could rightly refuse to take
Plaintiff's exhibits into account because of the lack of
authentication. However, this Court, in its discretion,
declines to strike Plaintiff's exhibits, and it has taken
his exhibits into account in considering Defendants'
Motion. Even though this Court has considered Plaintiff's
exhibits, they do not establish a genuine issue of material
fact for trial. See Fed.R.Civ.P. 56(a)
(“The court shall grant summary judgment if the movant
shows that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of
law.”). This Court now turns to the merits of the
Claims Subject to Dismissal
though Defendants titled their motion “Motion for
Summary Judgment, ” they argue that some of
Plaintiff's claims should be dismissed because, based
upon the allegations of the Complaint, those claims fail as a
matter of law. This Court will therefore apply the dismissal
standards in considering those claims. See
Fed.R.Civ.P. 12(b)(6) (“failure to state a claim upon
which relief can be granted”); Levitt v. Yelp!
Inc., 765 F.3d 1123, 1135 (9th Cir. 2014) (stating that,
in order to survive a Rule 12(b)(6) motion to dismiss, a
plaintiff's “factual allegations must suggest that
the claim has at least a plausible chance of success”
(alteration, citation, and internal quotation marks
Hawai`i law, the tort of bad faith is also known as breach of
the duty of good faith and fair dealing. Because this Court
has supplemental jurisdiction over Plaintiffs' state law
claims, it must apply Hawai`i substantive law to those
claims. See Mason & Dixon Intermodal, Inc. v.
Lapmaster Int'l LLC, 632 F.3d 1056, 1060
(9th Cir. 2011). This Court has recognized that:
When interpreting state law, a federal court is bound by the
decisions of a state's highest court. Trishan Air,
Inc. v. Fed. Ins. Co., 635 F.3d 422, 427 (9th Cir.
2011). In the absence of a governing state decision, a
federal court attempts to predict how the highest state court
would decide the issue, using intermediate appellate court
decisions, decisions from other jurisdictions, statutes,
treatises, and restatements as guidance. Id.;
see also Burlington Ins. Co. v. Oceanic Design &
Constr., Inc., 383 F.3d 940, 944 (9th Cir. 2004)
(“To the extent this case raises issues of first
impression, our court, sitting in diversity, must use its
best judgment to predict how the Hawai`i Supreme Court would
decide the issue.” (quotation and brackets omitted)).
Evanston Ins. Co. v. Nagano, 891 F.Supp.2d 1179,
1189 (D. Hawai`i 2012) (some citations omitted). This Court
Hawai`i courts have recognized that “every contract
contains an implied covenant of good faith and fair dealing
that neither party will do anything that will deprive the
other of the benefits of the agreement.” Best
Place, Inc. v. Penn Am. Ins. Co., 82 Hawai`i 120,
123-24, 920 P.2d 334, 337-38 (1996) (citations omitted).
“Good faith performance ‘emphasizes faithfulness
to an agreed common purpose and consistency with the
justified expectations of the other party.'”
Hawaii Leasing v. Klein, 5 Haw.App. 450, 456, 698
P.2d 309, 313 (1985) (quoting Restatement (Second) of
Contracts § 205 cmt. a (1981)). This district court,
however, has observed that:
Hawai`i courts have not recognized a separate tort cause of
action for bad faith or breach of the duty of good faith and
fair dealing based upon any type of contract in any
circumstances. Moreover, in Francis v. Lee Enterprises,
Inc., 89 Hawai`i 234, 971 P.2d 707, 711-12 (1999), the
Hawai`i Supreme Court stressed the importance that claims of
bad faith be limited to “the insurance context or
situations involving special relationships characterized by
elements of fiduciary responsibility, public interest, and
adhesion.” The Hawai`i Supreme Court stated that the
limitation on the tort of bad faith was important due to the
fact that recovery in tort was very different from
contractual remedies. Id. at 712-13. Accordingly,
the Hawai`i Supreme Court stated that Hawai`i law will not
allow a recovery in tort “in the absence of conduct
that (1) violates a duty that is independently recognized by
principles of tort law and (2) transcends the breach of the
contract.” Id. at 717.
Sung v. Hamilton, 710 F.Supp.2d 1036, 1050 (D.
Flynn v. Marriott Ownership Resorts, Inc., No. CV
15-00394 LEK-BMK, 2016 WL 843251, at *21-22 (D. Hawai`i Feb.
instant case does not arise from the insurance context, nor
is the relationship between Plaintiff and Defendants the type
of special relationship that supports a bad faith claim, such
as “an innkeeper, a common carrier, a lawyer, [or] a
doctor.” See id. at *22 (quoting Best
Place, 82 Hawai`i at 131, 920 P.2d at 345). Although the
Hawai`i Supreme Court has never expressly addressed whether
it would recognize a bad faith claim in the context of the
relationship between an apartment owner and the apartment
owners' association, this Court predicts that the supreme
court would decline to do so because of the lack of a special
Court therefore CONCLUDES that Plaintiff's bad faith
claim fails to state a claim upon which relief can be granted
and must be DISMISSED. Further, this Court CONCLUDES that the
dismissal must be WITH PREJUDICE because it is not possible
for Plaintiff to cure the defect in the bad faith claim by
amendment. See Sonoma Cty. Ass'n of Retired Emps. v.
Sonoma Cty., 708 F.3d 1109, 1118 (9th Cir. 2013)
(“As a general rule, dismissal without leave to amend
is improper unless it is clear . . . that the complaint could
not be saved by any amendment.” (brackets, citation,
and internal quotation marks omitted)). The Motion is GRANTED
as to the bad faith claim.
Prima Facie Tort Claim
next argue that Plaintiff's prima facie tort claim is not
cognizable under Hawai`i law. Plaintiff relies on Metzler
Contracting Co. v. Stephens, Civil No. 07-00261 LEK,
2009 WL 1046666, at *5 (D. Hawai`i Apr. 17, 2009), in which
this Court predicted that the Hawai`i Supreme Court would
“recognize a separate cause of action for prima facie
tort under facts virtually identical to” Giuliani
v. Chuck, 1 Haw.App. 379, 620 P.2d 733 (Ct. App. 1980).
In Metzler, this Court pointed out that, in
Giuliani, the Hawai`i Intermediate Court of Appeals
(“ICA”) “did not recognize prima facie tort
as an alternative to another well-recognized cause of
action.” 2009 WL 1046666, at *5. Plaintiff argues that
the Hawai`i Supreme Court would allow him to pursue a prima
facie tort claim in this case because, like
Giuliani, “Plaintiff does not assert the claim
for prima facie tort as an alternative to another
well-recognized cause of action.” [Mem. in Opp. at 16.]
argument is misplaced. This Court again predicts, for the
reasons stated in Metzler, that the Hawai`i Supreme
Court would only recognize a prima facie tort claim in cases
with facts that are virtually identical to
Giuliani. See Metzler, 2009 WL 1046666, at
*5. In Giuliani, the plaintiffs entered into an
agreement to purchase residential property from the
defendant. They did not complete the sale because of disputes
regarding the sale documents, and the defendant's
attorney deemed the plaintiffs' deposit forfeited,
alleging that the plaintiffs breached the agreement. The
plaintiffs filed suit to rescind the contract and to obtain
the return of their deposit. Giuliani, 1 Haw.App. at
381, 620 P.2d at 735. The ICA held that “the amended
complaint [was] sufficient to state a cause of action for
intentional harm to a property interest, a cognizable cause
of action sounding in tort, ” but it was insufficient
to allege any other cause of action. Id. at 386, 620
P.3d at 738 (citing Restatement, Second, Torts §
871). This Court cannot find that the facts of
this case are virtually identical to Giuliani. This
Court therefore predicts that the Hawai`i Supreme Court would
not recognize a prima facie tort claim under the facts of
Court CONCLUDES that Plaintiff's prima facie tort claim
fails to state a claim upon which relief can be granted.
Further, this Court CONCLUDES that it is not possible for
Plaintiff to cure the defects in this claim by amendment.
Accord Barber v. Ohana Military Communities, LLC,
Civil No. 14-00217 HG-KSC, 2014 WL 3529766, at *13-14 (D.
Hawai`i July 15, 2014) (concluding that the plaintiffs'
prima facie tort claim was futile and dismissing the claim
with prejudice because “[t]he circumstances of [the]
case would not give rise to a prima facie tort claim”).
The Motion is GRANTED insofar as the prima facie tort claim
is DISMISSED WITH PREJUDICE.
Selective Enforcement of Governing
cites Restatement (Third) of Property: Servitudes
§§ 6.13 and 6.14 and Haw. Rev. Stat. §§
514B-9 and 514B-10 as the legal authority for his claim
alleging selective enforcement of the governing documents.
However, Plaintiff has not cited, nor is this Court aware of,
any case in which the Hawai`i Supreme Court has adopted
§§ 6.13 and 6.14 and recognized a cause of action
for selective enforcement under those sections. Further,
Plaintiff has not cited, nor is this Court aware of, any case
in which the Hawai`i Supreme Court has recognized that an
apartment owner may bring a selective enforcement claim
pursuant to §§ 514B-9 and 514B-10. Based upon this
lack of precedent, this Court predicts that the Hawai`i
Supreme Court would not recognize a cause of action for
selective enforcement pursuant to these sections.
Court CONCLUDES that Plaintiff's selective enforcement
claim fails to state a claim upon which relief can be
granted, and that it is not possible for Plaintiff to cure
the defects in this claim by amendment. The Motion is GRANTED
insofar as the claim for selective enforcement of the
governing documents is DISMISSED WITH PREJUDICE.
Breach of Fiduciary Duty
argues that, based on Restatement (Third) of Property:
Servitudes §§ 6.13 and 6.14, the board of directors
of an apartment owners' association owes a fiduciary duty
to all members of the association, not just to the
association itself. Plaintiff also argues that, in Lee v.
Puamana Community Ass'n, 109 Hawai`i 561, 128 P.3d
874 (2006), the Hawai`i Supreme Court recognized that an
owners' association owes a fiduciary duty to its members.
Lee, the Hawai`i Supreme Court did state that
“other courts have stated that nonuniform amendments
and amendments that breach any fiduciary duties owed by an
association to its members are invalid unless approved by
every member whose interest is adversely affected.”
Id. at 571, 128 P.3d at 884 (citations omitted).
However, the issue of whether an owners' association owes
fiduciary duties to individual owners was not before the
supreme court in Lee. It made that statement in
discussing exceptions to the general rule that an
“amendment made pursuant to a general amendment
provision will be upheld.” Id. at 570-71, 128
P.3d at 883-84. This district court has concluded that
Lee did not recognize that an owners'
association owes a fiduciary duty to its individual members.
See Baham v. Ass'n of Apartment Owners of Opua Hale
Patio Homes, Civ. No. 13-00669 HG-BMK, 2014 WL 2761744,
at *9-10 (D. Hawai`i June 18, 2014). This Court agrees with
the analysis in Baham, where the district court
stated that the plaintiff's claims were “based on
the AOAO's actions with respect to [his] failure to pay
his maintenance fees, ” and therefore his claims were
“more akin to those brought by a lender against a
borrower, a relationship in which a fiduciary duty does not
exist.” Id. at *10.
this Court CONCLUDES that Plaintiff's relationship with
Defendants was not the type of relationship that gave rise to
a fiduciary duty. This Court CONCLUDES that Plaintiff's
claim for breach of fiduciary duty fails to state a plausible
claim for relief, and it is not possible for Plaintiff to
cure the defects in this claim by amendment. The Motion is
GRANTED insofar as the claim for breach of fiduciary duty is
DISMISSED WITH PREJUDICE.
Statute of Limitations
argue that several of Plaintiff's claims should be
dismissed with prejudice because they are barred by the
statute of limitations. This Court has considered the
parties' exhibits in ruling on the issue of whether those
claims are barred by the statute of limitations. This Court
will therefore apply the summary judgment standard to those
claims. See Daniels-Hall v. Nat'l Educ.
Ass'n, 629 F.3d 992, 998 (9th Cir. 2010) (stating
that “generally the scope of review on a motion to
dismiss for failure to state a claim is limited to the
Evidence Before the Court
Kapalua Declaration states: “No house pets or other
animals shall be kept on any Lot or in any Apartment on a
Multiple Family Residential Lot or in a Condominium Unit
except where otherwise permitted by the Association Rules or
a Supplemental Declaration.” [Kapalua Decl. at 26, art.
V, § 1(a)(6).] In addition, the Golf Villas's House
Rules (“House Rules”) states:
“No house pets or other animals shall be kept on any
Lot or in any Apartment on a Multiple Family Residential Lot
or in a Condominium Unit except where otherwise permitted by
the Association Rules or a Supplemental Declaration.”
Page 26, Article V, Section 1, part (6), KRA CC&R's.
[Fleisch Decl., Exh. D (House Rules) at 3, § B-3.] Thus,
Defendants assert that pets are not allowed at the Golf
Villas. [Mem. in Supp. of Motion at 3.] Plaintiff's
position is that Haw. Rev. Stat. § 514B-156 requires
that a policy prohibiting owners from keeping pets must be in
the association's bylaws, and the Golf Villas bylaws
(“Bylaws”) did not have such a provision.
Plaintiff therefore argues the no-pets provision in the House
Rules is invalid, and the AOAO did not have the authority to
require him to give up Jake, even if Jake was a pet. If this
Court concludes that the no-pets provisions in the House
Rules and the Kapalua Declaration alone are enforceable,
Plaintiff argues that they must be read to include an
exception for disabled persons.
states that, after purchasing his unit, he ran for a seat on
the Board, and he publicly opposed a large
renovation/remediation projection. [Decl. of Vincent DeRosa
(“Pltf. Decl.”), filed 3/28/16 (dkt. no. 34), at
¶¶ 7-8.] After doing so, he “began to be
harassed, discriminated against, and retaliated against by
the Board.” [Id. at ¶ 8.] Plaintiff
alleges that the AOAO enforced the no-pets provision against
him in retaliation for his opposition to the renovation
present evidence that, in June 2011, the AOAO became aware
that Plaintiff and his wife were keeping a dog at the Golf
Villas. The AOAO, through its general manager, informed
Plaintiff that it was a violation of the governing documents
and requested that he not keep the dog there. The AOAO later
learned that Plaintiff continued to keep a dog there.
[Fleisch Decl. at ¶¶ 16-18.] The general manager
sent Plaintiff a letter, dated June 23, 2011, regarding the
no-pets policy (“6/23/11 AOAO Letter”). It
stated, inter alia:
If you have a pet on property it must be removed immediately.
Per the House Rules, this letter serves as your first
warning. If you have a pet on property and it is not removed
by Friday June 24, 2011 you may incur fines ...