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Green v. Kanazawa

United States District Court, D. Hawaii

May 21, 2018

JEREMY GREEN and SHIZUKO GREEN, Plaintiffs,
v.
SIDNEY K. KANAZAWA, ESQ., a resident of California, MCGUIREWOODS, LLP, a Virginia limited liability partnership, and DOE DEFENDANTS 1-50, Defendants. HYE JA KIM, Plaintiff,
v.
SIDNEY K. KANAZAWA, ESQ., a resident of California, MCGUIREWOODS, LLP, a Virginia limited liability partnership, and DOE DEFENDANTS 1-50, Defendants.

          ORDER RULING ON MEASURE OF DAMAGES FOR RESCISSION

          Leslie E. Kobayashi United States District Judge

         On April 24, 2018, Defendants Sidney K. Kanezawa (“Mr. Kanezawa”) and McGuireWoods LLP (collectively “Defendants”) filed their Brief Regarding the Measure of Damages (“Defendants' 4/24 Trial Brief”). [Dkt. no. 353.] Plaintiffs Jeremy Green and Shizuko Green (“the Greens”), and Hye Ja Kim (“Mrs. Kim, ” collectively “Plaintiffs”) filed their Trial Brief on the Measure of Damages on May 9, 2018 (“Plaintiffs' Trial Brief”). [Dkt. no. 384.] On May 17, 2018, Defendants filed their Trial Brief Regarding (1) Personal Use Component of Damages, (2) Interest, and (3) Depreciation (“Defendants' 5/17 Trial Brief”). [Dkt. no. 399.] The Court hereby clarifies its prior orders and rulings in this matter regarding the measure of damages, and rules on the parties' requests contained in Plaintiffs' Trial Brief, Defendants' 4/24 Trial Brief, and Defendants' 5/17 Trial Brief as set forth below.

         BACKGROUND

         The issue at hand, the measure of damages that Plaintiffs may recover if they prevail in the instant action, was first raised with this Court in Plaintiffs' Motion in Limine #1 to: (1) Exclude Evidence of Property Values and Rental Income After the Date on Which Plaintiffs Lost Their Claims Against Centex; (2) to Exclude Evidence Which Seeks to Deny that Plaintiffs Had Claims Against Centex Based on the Lockout; and (3) to Establish Defendants' Burden regarding “Lockout Claims” (“MIL 1”), filed April 3, 2018. [Dkt. no. 233.] On April 16, 2018, this Court denied MIL 1 and ruled, in pertinent part, as follows:

Plaintiffs contend that, but for Defendants' negligence, they would have been able to bring their [Haw. Rev. Stat.] § 514A-69 claim as of February 9, 2010 and would have been successful in rescinding the condominium purchase contract in return for the “full amount paid by the purchaser, with interest, together with all taxable court costs and reasonable attorney's fees . . . .” Id. Since § 514A-69 limits its remedies to actions brought within “two years from the date of the sale, ” Plaintiffs are currently time-barred from availing themselves of this section's remedies and thus bring the instant action seeking compensatory damages for alleged professional negligence which they claim caused them to release this claim in the 2010 Settlement.
In short, the Court FINDS that a component of Plaintiffs' measure of damages is rescission damages as set forth in § 514A-69 (that is, purchase amount paid, with interest, taxable court costs and reasonable attorney's fees). Damages calculation (and thus any evidence related to it) are not limited to what is provided in § 514A-69. This is for the simple and practical reason that the application of § 514A-69 is a fiction since Plaintiffs will not be required to return ownership of the condominiums. As such, Plaintiffs' benefit and burden of ownership since purchasing the condominiums play a role in calculating damages.

         [Order Denying Plaintiffs' Motion in Limine #1 (“Order Denying MIL 1”), filed 4/16/18 (dkt. no. 303), at 4 (emphasis in original).] Following this ruling, Defendants filed Defendants' 4/24 Trial Brief to reiterate their understanding of the Court's ruling as to the measure of damages, specifically that “the value of Plaintiffs' units, measured by the current market value of the units as of the date of trial, must be deducted from any damage award.” [Defs.' 4/24 Trial Brief at 4.]

         The Court subsequently ruled, on May 2, 2018 at trial, “that the current fair market value of Plaintiffs' units must be subtracted from the total of the §514A-69 remedy and monetary burden of ownership less the reasonable monetary benefit of ownership and the value of the personal use of the respective units.” [Defs.' 5/17 Trial Brief at 3 (citing Defs.' 5/17 Trial Brief, Decl. of Michi Momose, Exh. 2 (excerpts of 5/2/18 Trial Trans. (Trial Day 4)) at 117:7-11).]

         Plaintiffs filed their Trial Brief and, apparently, are seeking reconsideration of the Court's ruling on MIL 1 by arguing that deduction of the market value of Plaintiffs' units at the time of trial from any rescission damages awarded (i.e., the recovery permitted in Haw. Rev. St. § 514A-69) “unfairly penalizes Plaintiffs and confers an unwarranted benefit on Defendants.” [Pltfs.' Trial Brief at 5.]

         In their 5/17 Trial Brief, Defendants draw a finer point on the Court's rulings and take issue with three contentions: first, that occupancy of the units dictate whether a benefit was conferred; second, that interest should not be awarded on the rescission price; and depreciation should not be awarded.

         DISCUSSION

         I. Plaintiffs' Trial Brief

         This Court has explained the standard applicable to motions for reconsideration as follows:

A motion for reconsideration must (1) “demonstrate reasons why the court should reconsider its prior decision” and (2) “must set forth facts or law of a strongly convincing nature to induce the court to reverse its prior decision.” Hele Ku KB, LLC v. BAC Home Loans Servicing, LP, 873 F.Supp.2d 1268, 1289 (D. Haw. 2012). The Ninth Circuit has held that reconsideration is appropriate if (1) the district court is presented with “newly discovered evidence, ” (2) the district court “committed clear error or the initial decision was ...

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