United States District Court, D. Hawaii
SUNDAY'S CHILD, LLC, SUNDAY'S THIRD CHILD, LLC, SUNDAY'S FOURTH CHILD, LLC, and SUNDAY'S FIFTH CHILD, LLC, Plaintiffs,
IRONGATE AZREP BW LLC, Defendant.
ORDER DENYING DEFENDANT IRONGATE AZREP BW LLC'S
MOTION TO DISMISS COUNTS III, IV, V, VI AND VII OF
Derrick K. Watson United States District Judge.
Sunday's Companies allege various state-law claims arising
out of the purchase of condominium units from developer and
seller Irongate AZREP BW LLC (“Irongate”).
Irongate seeks dismissal of the claims for conversion and
unjust enrichment because they are redundant of the facts and
duties at issue in Plaintiffs' breach of contract claims.
According to Irongate, the Sunday's Companies have an
adequate remedy at law through their contract claims and,
therefore, neither tort damages nor equitable remedies are
the Sunday's Companies may not recover twice for the same
injury in contract, tort or any other theory of liability,
their claims for conversion and unjust enrichment are
sufficiently alleged as alternatives to their claims for
breach of contract. Accordingly, Irongate's Motion to
Dismiss is denied with respect to Counts III and V.
because the parties agree that the Court's previous
dismissal of Counts IV, VI, and VII is unaffected following
remand from the United States Court of Appeals for the Ninth
Circuit, Irongate's Motion to Dismiss is denied as moot
as to those claims.
Sunday's Companies seek to recover deposits paid under
Sales Contracts for four condominium units in the Trump
International Hotel & Tower at Waikiki Beach Walk
(“Project”). Irongate, the Project's
developer, contends that it is entitled to retain the
deposits following a Settlement Agreement between the parties
and Plaintiffs' acknowledged failure to close.
Complaint alleges that in November 2006, the Sunday's
Companies executed separate Sales Contracts to purchase the
four Project units, advancing twenty percent of the purchase
price as a deposit to Irongate. Complaint ¶¶ 9-10.
The Sunday's Companies' failure to perform their
contractual obligations entitled Irongate to terminate the
contract. In that event, the Sales Contracts permitted
Irongate to retain fifteen percent of the sales prices of the
units with any deposit overage being returned to the
purchaser. Complaint ¶¶ 12-13.
2009, a series of disputes arose between Irongate and several
purchasers, including the Sunday's Companies. On May 13,
2011, the Sunday's Companies entered into a Settlement
Agreement with Irongate that resolved their dispute.
Complaint ¶¶ 14-16. According to the Sunday's
Companies, the Settlement Agreement did not modify the Sales
Contracts, including Irongate's obligation to return any
deposits exceeding fifteen percent of the sales price in the
event of termination. Complaint ¶¶ 18-19.
executing the Settlement Agreement, changing the units to be
purchased, and making an additional $50, 000 deposit, the
Sunday's Companies were not successful in their attempts
to secure financing to complete their transaction. Unable to
finance and close on the units, Irongate elected to terminate
the Sales Contracts on June 23, 2011. The Sunday's
Companies demanded that Irongate return all deposits in
excess of fifteen percent of the sales price, but Irongate
declined to do so. Complaint ¶¶ 20-26.
Sunday's Companies allege that Irongate breached the
Sales Contracts by failing to return the excess deposits and
to release certain escrow funds to them (Count I), and seek a
declaration to the same effect (Count II). The Complaint also
asserts claims for conversion (Count III), tortious breach of
contract (Count IV), unjust enrichment (Count V) and breach
of the implied covenant of good faith and fair dealing (Count
VII), and seeks punitive damages (Count VI).
February 4, 2014 Order, the Court granted Irongate's
motion to dismiss. The Court found that, because the claims
asserted in this action arise out of the purchase and sale of
the units, the Sunday's Companies waived and released
their deposit and escrow claims when they entered into the
Settlement Agreement. See Dkt. No. 22 (2/4/14 Order).
Court dismissed the claim for breach of contract (Count I),
and likewise concluded that, to the extent the Sunday's
Companies' remaining claims for declaratory relief (Count
II), conversion (Count III), tortious breach of contract
(Count IV), unjust enrichment (Count V), and breach of the
implied covenant of good faith and fair dealing are covered
by the Settlement Agreement, they likewise failed, because
they sought the recovery of deposits paid pursuant thereto.
Additionally, the Court dismissed the claim for punitive
damages, which cannot be maintained as a stand-alone cause of
action (Count VI). See Dkt. No. 22 at 11-12 (2/4/14
November 15, 2016 memorandum disposition, the Ninth Circuit
reversed the Court's February 4, 2014 Order, concluding
instead that the Settlement Agreement is ambiguous as to the
extent to which the Sunday's Companies' claims are
barred, and remanded for further proceedings. See
Dkt. No. 43. The Sunday's Companies did not appeal and
the Ninth Circuit's ruling did not disturb the
Court's dismissal of Count IV (tortious breach of
contract), Count VI (punitive damages), and Count VII (breach
of the implied covenant of good faith and fair dealing).
now seeks dismissal of the Sunday's Companies'
non-contract claims, arguing that Hawaii law does not allow
for recovery in tort or in equity where the parties'
rights and claims are governed by contract.
Rule of Civil Procedure 12(b)(6) authorizes the Court to
dismiss a complaint that fails “to state a claim upon
which relief can be granted.” Rule 12(b)(6) is read in
conjunction with Rule 8(a), which requires only “a
short and plain statement of the claim showing that the
pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2).
The Court may dismiss a complaint either because it lacks a
cognizable legal theory or because it lacks sufficient
factual allegations to support a cognizable legal theory.
Balistreri v. Pacifica Police Dep't., 901 F.2d
696, 699 (9th Cir. 1988).
to Ashcroft v. Iqbal, “[t]o survive a motion
to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to ‘state a claim to relief
that is plausible on its face.'” 555 U.S. 662, 678
(2009) (quoting Bell Atlantic Corp. v. Twombly, 550
U.S. 554, 570 (2007)). “[T]he tenet that a court must
accept as true all of the allegations contained in a
complaint is inapplicable to legal conclusions.”
Id. Accordingly, “[t]hreadbare recitals of the
elements of a cause of action, supported by mere conclusory
statements, do not suffice.” Id. (citing
Twombly, 550 U.S. at 555). Rather, “[a] claim
has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Id. (citing Twombly, 550
U.S. at 556). Factual ...