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LLC v. Irongate Azrep BW LLC

United States District Court, D. Hawaii

June 6, 2018



          Derrick K. Watson Unated States District Judge


         Irongate seeks summary judgment on the Sunday's Companies'[1] remaining claims for breach of contract, conversion, and unjust enrichment, as well as on its own Counterclaim for breach of contract arising out of the failure of the Sunday's Companies to close on the sale of four condominium units in Honolulu, Hawaii.

         The Sunday's Companies' claims each turn on the parties' intent with respect to the material terms of a 2011 Agreement. Consistent with the Ninth Circuit's direction on remand, the parties present evidence on summary judgment of their intent and understanding of the material terms of the 2011 Agreement, terms that the Ninth Circuit determined were ambiguous. That evidence reveals that although Wang, the Sunday's Companies' owner, did not read or understand the 2011 Agreement that she admittedly executed, her attorneys negotiating the Agreement on her behalf understood its terms. Contemporaneous with the Agreement, these attorneys advised Wang that the Agreement waived and released Plaintiffs' claims to recover their original deposits paid for the four units in 2006. Irongate's interpretation was no different. Accordingly, because Plaintiffs' instant claims each seek the return of those original deposits released by the 2011 Agreement, the Court GRANTS Irongate's Motion for Summary Judgment on Plaintiffs' First Amended Complaint (Dkt. No. 132).

         The evidence is equally unequivocal that the Sunday's Companies breached the 2011 Agreement by failing to make additional non-refundable payments when due and failing to close. As a result, Irongate is likewise entitled to summary judgment on its Counterclaim for Plaintiffs' Breach of Contract for Failure to Make the Additional Nonrefundable Payment (Dkt. No. 134).

         Finally, because Wang and certain Plaintiffs' counsel, with full knowledge of the parties' intent with respect to the 2011 Agreement, advanced untenable theories of liability, interpreting the 2011 Agreement contrary to the undisputed evidence, and certified pleadings to the Court based upon what can only be seen as a misrepresentation, the Court GRANTS IN PART Irongate's Motion for Sanctions (Dkt. No. 202).


         I. Factual Background

         The 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 (the “Project”). As a result of the Sunday's Companies' failure to close, Irongate, the Project's developer, contends that it is entitled to retain the original deposits and the additional non-refundable payment made by Plaintiffs following a 2011 Agreement between the parties. Irongate also seeks the balance of the additional non-refundable payments due under the Agreement that were never made.

         A. 2006 Sales Contracts and 2011 Agreement

         On November 9, 2006, the Sunday's Companies executed separate Sales Contracts to purchase four Project units, advancing twenty percent of the collective purchase price as a deposit to Irongate. Irongate Ex. X, Dkt. No. 133-25. These original deposits totaled $1, 439, 320, and the Sales Contracts indicated a cash purchase that was not conditioned on buyer financing. Id.; 12/12/17 Jason Grosfeld Dep. Tr. 60, Dkt. No. 133-7. The Project was scheduled for construction and completion within six years, and under the identical Sales Contracts, Irongate could determine the closing date. In the event of default by the Sunday's Companies, Irongate was permitted to terminate, and Section D.37 of the Sales Contracts generally permitted Irongate to retain fifteen percent of the sales prices of the units with any deposit overage being returned to the purchaser.[2] Wang did not read the Sales Contracts before signing them. 10/6/17 Wang Dep. Tr. 33, 254-55, Dkt. No. 162-2.

         In July 2009, a series of disputes arose between Irongate and several purchasers, including the Sunday's Companies. Several prospective purchasers filed at least two lawsuits against Irongate (the “Buyers' Suits”), alleging statutory and common law claims, based upon misrepresentations during the sales process. The plaintiff purchasers in the Buyers' Suits sought to nullify and rescind their Sales Contracts and obtain return of their deposits.[3] The plaintiffs in these suits were represented by Hawaii attorney Warren Price. The Sunday's Companies were not named parties in the Buyers' Suits, but were represented by Price, and by agreement of counsel, preserved their rights to pursue claims made or asserted in the Buyers' Suits and postponed their closing dates.

         Wang was introduced to Price by her attorney, Lyle Hosoda. Hosoda previously represented Wang on other real estate matters, but did not have a formal engagement agreement with her with respect to the acquisition of the four units in the Project.[4] 10/6/17 Wang Dep. Tr. 80-83; 12/5/17 Lyle Hosoda Dep. Tr. 14-15, Dkt. No. 133-5; 12/15/17 Warren Price Dep. Tr. 17-20, Dkt. No. 133-6. Wang retained Price to represent the Sunday's Companies in connection with Irongate and the Project units sometime in 2009. 12/15/17 Price Dep. Tr. 19-20. Beginning in early 2011, several of Price's clients, including Wang, attempted to close under their original Sales Contracts, rather than attempt to recover their deposits in litigation. 12/15/17 Price Dep. Tr. 23-24. Wang signed a Confidentiality Agreement and reached out to negotiate directly with Irongate's principal, Jason Grosfeld, to achieve an agreement regarding the Project units. Irongate Ex. G (Confidentiality Agreement), Dkt. No. 133-8; 10/6/17 Wang Dep. Tr. 67-68, 73, 103-105. Wang met with Grosfeld in January 2011 at Irongate's offices in Los Angeles. 10/6/17 Wang Dep. Tr. 103-105.

         By 2011, Wang did not have sufficient assets to pay cash for the four units because the value of her assets had decreased between 50 to 70% since the signing of the Sales Contracts. As a result, she intended to finance the remainder of the purchase. 10/6/17 Wang Dep. Tr. 46-47. During her meeting with Grosfeld, she says he told her that Irongate would not provide the financing that Plaintiffs needed. 10/6/17 Wang Dep. Tr. 105. Despite that, she never expressed to her counsel that she lacked the financial resources to close. 10/6/17 Wang Dep. Tr. 107.

         On March 31, 2011, Grosfeld sent Wang an email with two possible options for closing on Plaintiffs' units: both offers were subject to an additional non-refundable down payment of 10% of the purchase price, a 30-day closing period, and a mutual release of all claims. Irongate Ex. H (3/31/11 Email); Dkt. No. 133-9. On April 6, 2011, Grosfeld followed up, sending an email to Wang, Hosoda, and Price, stating that “we must sign a deal very shortly or I will be forced to begin the steps toward default and termination of your contracts.” Sunday's Companies' Ex. R (4/6/11 Email), Dkt. No. 162-18. Wang acknowledged that if no deal was made soon, Irongate would terminate the Sales Contracts and pursue remedies for default. 10/6/17 Wang Dep. Tr. 123-24.

         Concerned that she would lose her original deposits of nearly $1.5 million (10/6/17 Wang Dep. Tr. 88), Wang sent Grosfeld a counteroffer by email on April 6, 2011 with four options. Among other things, her counter included asking for a “straightforward return” of the original deposits. It also proposed as an alternative “clos[ing] on two of my three studio units, and we can swap unit #3607 for the same size unit on floors 30-34 which I understand have an average sales price of $2.5M. And, swap one studio unit for a one bedroom suite which has an average sales price of $1.5M.” Irongate Ex. I (4/6/11 Email), Dkt. No. 133-10. Grosfeld left a voicemail message for Wang on April 11, 2011, advising her that her fourth proposed option might work for Irongate, but that he needed to clarify some matters with her. Irongate Ex. K (4/11/11 Email), Dkt. No. 133-12.

         On May 5, Grosfeld sent an email to Wang accepting option four subject to “(i) a non-refundable down payment of 10% of the purchase price upon signing of the definitive agreement; (ii) a 30 day close; the contract amendment will provide for an extended closing option for an additional 30 days for a fee of $1000 per day; and (iii) a mutual release of any and all claims.” Irongate Ex. L (5/5/11 Email), Dkt. No. 133-13. The balance due at closing was $5, 757, 280 plus closing costs, and “must be a cash purchase or a purchase financed by an institution other than Beach Walk Mortgage LLC (“BWM”), [Irongate's] wholly owned mortgage company.” Id. A closing agreement was attached to the email, to be signed by May 9, 2011. Section 4 of the proposed agreement entitled “Extended Closing Date” provided that the purchaser “agrees to deposit into escrow an additional non-refundable payment” upon execution of the agreement. Grosfeld's email instructed: “if we don't hear from you or you reject this offer, we will begin the process of contract termination.” Id. Wang received a revised agreement the next day from Price's office, correcting errors in the prior version of the agreement sent by Grosfeld. Irongate Ex. M (5/6/11 Email), Dkt. No. 133-14. Wang responded to Grosfeld on the May 9, 2011 deadline, asking to swap unit #3607 for a lower floor unit at a lower price. Irongate Ex. N (5/9/11 Email), Dkt. No. 133-15. Grosfeld responded to Wang by email that same day, agreeing to swap the unit and offering her several options, while informing her that his offer would expire on May 10, 2011. Irongate Ex. O (5/9/11 Email), Dkt. No. 133-16.

         On May 10, at Wang's direction, Hosoda accepted Grosfeld's May 9 offer, and Price's office informed Grosfeld of the identity of the replacement unit to be swapped. Irongate Ex. P (5/10/11 Email), Dkt. No. 133-17. On May 11, Wang and Hosoda received the 2011 Agreement from Price for her signature, to be returned by May 12. Irongate Ex. Q (5/11/11 Email), Dkt. No. 133-18. The email from Price's office stated “As you can see from the Agreement, the additional funds are required at the same time, ” by the close of business on May 12, 2011. Id. Wang executed the 2011 Agreement on May 12, but did not send the balance of funds due at that time. Irongate Ex. B, Dkt. No. 133-3.[5]

         Instead, on May 12, Wang's assistant sent an email to Hosoda, indicating that she wished to amend the amount of additional payment due to $308, 170.00, rather than $566, 607.00. Irongate Ex. R (5/12/11 Email), Dkt. No. 133-19. Hosoda's office responded by email that same day, writing that $566, 607.00 was due under Section 4 of the Agreement by the close of business, and informing Wang that her “failure to do so could jeopardize the settlement of this matter and subject you to significant exposure, the likes of which Lyle has explained to you in numerous prior discussions.” Irongate Ex. R. Nonetheless, Irongate appeared willing to accept Wang's modified proposal, and requested Price's office to have her make an immediate payment towards the $308, 170.00 as a sign of good-faith. Irongate Ex. S (5/12/11 Email), Dkt. No. 133-20. Wang, however, made only one payment of $50, 000, on May 18, 2011, towards the $308, 170.00. Irongate Ex. T (5/23/11 Email), Dkt. No. 133-21.

         Under the May 2011 Agreement, the Sunday's Companies were to pay Irongate “additional non-refundable payment[s]” in order to secure an extended closing for the units.[6] If the Sunday's Companies were unable to timely close on the units, under Section 4 of the Agreement, they would forfeit these additional non-refundable payments and further “release all rights and claims pursuant to [S]ection 8.” Section 8 of the Agreement reads:

Purchaser's Release. Each Releasor and each of such Releasor's members, successors, heirs, assigns, parents, owners, investors, managers, agents, officers, directors, employees, attorneys, lenders, insurers and affiliates (collectively, “Releasor”) hereby releases Releasee and each of Releasee's members, successors, heirs, assigns, parents, owners, investors, managers, agents, officers, directors, employees, attorneys, lenders, insurers and affiliates (collectively, “Released Parties”) from the claims made or asserted, or that could have been made or asserted, in the Litigation, including but not limited to claims for equitable and/or legal relief and including damages of any and all kind; provided, however, that this release does not include or release claims that Releasor may have arising (a) after the execution of this Agreement, (b) out of any design or construction defect claims, known or unknown, and (c) out of the contractual duties, rights or obligations of the Released Parties, if any, relating in any way to the (i) management and/or operation of the Front Desk Unit, (ii) the Home Owners Association (“HOA”), including without limitation any claims made by or on behalf of the HOA, and any claims made against the HOA, and/or (iii) the assignment or non-assignment of the Trump License to the HOA. In other words, upon the execution of this Agreement, this release is intended to forever release and waive any and all claims by the Releasor arising out of the purchase and sale of the Units and the Litigation, but is not intended to release, limit or impair in any respect Releasor's claims as owner of the Units existing after the execution this Agreement, subject to and limited only by the release described in this paragraph. To the extent Releasor is a party to the Litigation, Releasor also agrees to execute a stipulation for dismissal with prejudice of any and all claims that have been, or could have been, made or asserted in accordance with the terms of this release.

         Irongate Ex. B (2011 Agreement), Dkt. No. 133-3. Section 12 of the Agreement states: “This Agreement supersedes, cancels and replaces all prior discussions or agreements to supplement or amend the Sales Contract, and the Sales Contract is in all respects enforceable according to its terms, except as modified herein.” Id.

         When the Sunday's Companies did not make the additional payments due under the Agreement, Hosoda and Price each communicated to Wang that Plaintiffs were in breach of the Agreement she had just executed on May 12, and at risk of losing the units and all payments previously made to Irongate. Irongate Ex. T (5/23/11 Email from Hosoda) (“My strong sense is that if you don't follow through with at least the $308, 000 that you put yourself at serious risk of losing the purchases.”); Irongate Ex. U (5/25/11 Email from Price), Dkt. No. 133-22 (“You defaulted when you failed to make the payment required in the ‘Agreement' you entered with Irongate on May 12, 2011, copy attached. Because of this default, you not only lost your right to purchase the units in Trump, but you also lost any claim for the return of your deposits on these units.”).

         Price secured a brief extension of time for the Sunday's Companies, until June 6, 2011 to perform under the Agreement by making the required additional non-refundable payments. In a May 25, 2011 letter to Wang, Price explained to her: “Under the terms of this Agreement, you released Irongate from any claims on behalf of Your LLCs arising out of the Sales Contracts, or relating to the sale of these units, in exchange for various considerations from Irongate.” Irongate Ex. U (5/25/11 Letter attached to Email from Price). The letter directs her to wire funds to Irongate and informs her of the consequences of further failure to comply with the Agreement:

In an effort to give you one last chance not to lose your chance to buy these units, and not to lose your deposits, we have obtained an agreement from Irongate to give you an additional ten (10) days to ‘cure' your default in not making the above payments. This will require that you wire the above funds to the appropriate escrow accounts at Title Guaranty Escrow Services no later than close of business Hawaii time on Monday, June 6, 2011. If you do, the remainder of the provisions of the Agreement will remain in full force and effect.
Allowing you this period to ‘cure' the breach of the Agreement that occurred on May 12, 2011, is a major concession by Irongate. Irongate has made clear, however, that there will be no more time given, and this will mean that if this money is not received in time, not only will you lose the right to purchase these units, but you will lose the deposits paid on these units by Your LLCs that were quite substantial. Accordingly, we cannot emphasize enough how important it is for you to ‘cure' this breach of the Agreement so we can move forward.

Id. On May 31, when Plaintiffs did not make any additional payments, Irongate notified them that they were in default and allowed an additional twenty-day period of time to cure. This further extension, however, had no effect. The Sunday's Companies again failed to remedy the default, and Irongate sent a notice of termination on June 23, 2011. Irongate Ex. K to Counterclaim MSJ (6/27/11 Notice of Termination), Dkt. No. 135-12. Irongate declared Plaintiffs in default under Section D.37 of the Sales Contracts and refused to return any of the $1, 439, 320.00 in original deposits, relying on Section 8 of the 2011 Agreement. Id.

         On July 22, 2011, Plaintiffs' current counsel, J. Patrick Fleming, sent a letter to Irongate demanding the return of the original deposits paid under the Sales Contracts totaling $1, 439, 320.00, and the additional $50, 000.00 paid into escrow under the 2011 Agreement. Irongate Ex. V (7/22/11 Demand Letter), Dkt. No. 133-23. According to the Sunday's Companies, the 2011 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.

         II. Procedural Background

         Plaintiffs' filed their original complaint in 2013. In a February 4, 2014 Order, the Court granted Irongate's motion to dismiss, finding 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 2011 Agreement. See Dkt. No. 22 (2/4/14 Order). In a November 15, 2016 memorandum disposition, the Ninth Circuit reversed the Court's February 4, 2014 Order, concluding instead that the 2011 Agreement's release terms were ambiguous, and remanded for further proceedings. See Sunday's Child, LLC v. Irongate AZREP BW LLC, 666 Fed.Appx. 587 (9th Cir. 2016).[7]

         The Ninth Circuit's November 15, 2016 decision explained that relevant portions of the 2011 Agreement were ambiguous, including “Section 8(a) of the Settlement Agreement preserving claims arising ‘after the execution of [the 2011] Agreement.' Here, Sunday's Child's claims arose after the signing of the Settlement Agreement: Sunday's Child failed to make its required payments under the Agreement after it was signed, Irongate decided to declare Sunday's Child in default before the purchase and sale were complete, and Irongate then refused to return any portion of the deposits.” 666 Fed.Appx. at 589. The relevant portion of Section 8 is ambiguous because it declares-

the Agreement “is intended to forever release and waive any and all claims by [Sunday's Child] arising out of the purchase and sale of the Units and the Litigation.” The use of the conjunctive here makes it possible to interpret this phrase in its entirety as releasing claims relating to the purchase and sale which were set forth, or which could have been set forth, in the Litigation. The claims at issue here, although they relate in a general sense to the purchase and sale of the condominium units, post-date the Litigation and the signing of the Settlement Agreement. Per Section 8(a), Sunday's Child may not have released its right to seek a partial refund of deposits-or to raise related claims-based on events arising “after the execution of [the Settlement] Agreement.”

666 Fed.Appx. at 590.

         The Ninth Circuit's decision also addressed the relationship between Sections 4 and 8 of the 2011 Agreement, with respect to Irongate's argument that Section 4 modified the 2006 Sales Contracts, notably Section D.37, such that Irongate was allowed to keep all deposits made, no longer requiring it to refund deposit monies remaining after subtracting 15% of the purchase price. The Ninth Circuit panel found Section 4 ambiguous as to whether it “changed Section D.37 of the Sales Contracts, allowing Irongate to keep all deposits ever made by Sunday's Child.” Id. at 591. “Section 4 required Sunday's Child to make new payments, which would be forfeited if Sunday's Child did not close on the property by the agreed upon date. Section 4, however, said nothing about the original deposit made in 2006 pursuant to Section D.37 of the Sales Contracts. Furthermore, Section 4 only requires forfeiture of ‘additional' payments. . . . Under this interpretation, the payments that are forfeited could be the additional payments (made pursuant to the Settlement Agreement), but might not include the original deposit (made in 2006).” Id. at 591. In light of these ambiguities, the parties conducted discovery regarding their intent and understanding of material terms in the 2011 Agreement.

         Presently before the Court are two Motions for Summary Judgment filed by Irongate (1) on all remaining claims in Plaintiffs' First Amended Complaint (Dkt. No. 132) and (2) on its Counterclaim for Plaintiffs' breach of contract for failure to make the additional nonrefundable payment (Dkt. No. 134). Irongate summarizes its argument on Plaintiffs' claims as follows:

The evidence now before the Court conclusively establishes that there is no ambiguity in the May 2011 Closing and Settlement Agreement in that: (1) if Plaintiffs failed to close, Plaintiffs would lose all payments made by them under the Agreement; (2) the May 2011 Closing and Settlement Agreement contained no liquidated damages limitation or other restriction limiting Irongate to 15% of all payments; (3) Plaintiffs waived and released all claims under the 2006 Sales Contracts; and (4) Plaintiffs' sole representative, Ingrid Wang, never read - or read only limited portions of - the May 2011 Closing and Settlement Agreement and relied entirely on her former counsel, Messrs. Price and Hosoda, concerning the meaning and interpretation of the May 2011 Closing and Settlement Agreement. Therefore, Plaintiffs are legally bound by former counsels' understanding of that Agreement.

Mot. for Summ. J. at 4, Dkt. No. 132.

         In its motion for summary judgment on its Counterclaim for breach of contract, Irongate “requests that the Court find that, pursuant to Section 4 of the May 2011 Closing and Settlement Agreement, Sundays was required to pay Irongate $566, 607.00 as an ‘additional nonrefundable payment' toward closing. It is undisputed that Sundays only paid $50, 000, and thus owes Irongate an additional $516, 607.00.” Mot. for Summ. J. on Counterclaim at 2, Dkt. No. 134.

         In addition to summary judgment, Irongate seeks sanctions under Federal Rule of Civil Procedure 11 and the Court's inherent authority against Plaintiffs' counsel, J. Patrick Fleming, Esq., and Plaintiffs' sole member, Wang. Sanctions Mot., Dkt. No. 202.


         Irongate meets its summary judgment burden both as to Plaintiffs' claims for the return of the original deposits and on its own Counterclaim for breach of the 2011 Agreement. First, the record demonstrates that all parties intended the 2011 Agreement to waive and release all claims relating to the Sunday's Companies' recovery of their original deposits. Second, Plaintiffs breached the 2011 Agreement when they failed to make the additional non-refundable payments necessary to close on the four units. Finally, because Plaintiffs' counsel, J. Patrick Fleming, Esq., and Wang knew or reasonably should have known at all relevant times that Plaintiffs' claims were factually and legally baseless in light of the intent of the parties with respect to the material terms of the 2011 Agreement-yet continued to advocate for a contrary meaning even after the Ninth Circuit determined that the terms were ambiguous and that the parties' intent would control-the Court grants in part Irongate's Motion for Sanctions.

         I. Irongate Is Entitled to Summary Judgment on Plaintiffs' Claims

         Because Plaintiffs' claims for breach of contract and related declaratory relief (Counts I and II), conversion (Count III), and unjust enrichment (Count IV) all turn on the meaning of the Agreement, [8] the Court first addresses the intent of the parties to determine the meaning of portions of the Agreement previously identified as ambiguous by the Ninth Circuit. The evidence before the Court now reveals that during the course of negotiating the 2011 Agreement and its extensions, both Price and Hosoda, Wang's attorneys, intended and understood that the Agreement released all claims that the Sunday's Companies had to recover any of their deposits, including the original deposits under the 2006 Sales Contracts, in exchange for curing their default, allowing additional time to close, swapping the units to be purchased, and applying the 2006 deposits to the modified transaction. The evidence is equally clear that no one associated with the Agreement's negotiations had any contrary understanding. Accordingly, pursuant to Federal Rule of Civil Procedure 56(a), the Court grants Irongate's Motion for Summary Judgment on Plaintiffs' First Amended Complaint. Dkt. No. 132.

         A. Legal Framework

         In light of the Ninth Circuit's determination that relevant provisions of the 2011 Agreement are ambiguous as a matter of law, the Court may resolve the ambiguity by examining extrinsic evidence to explain the intent or understanding of the parties and the circumstances under which the Agreement was executed. See Found. Int'l, Inc. v. E.T. Ige Const., Inc., 102 Hawai‘i 487, 496, 78 P.3d 23, 32 (2003) (“Generally, the determination of whether a contract is ambiguous is also a question of law.”); Hawaiian Ass'n of Seventh-Day Adventists v. Wong, 130 Hawai‘i 36, 45-46, 305 P.3d 452, 461-62 (2013) (The parol evidence rule “permit[s] the court to consider extrinsic evidence when the writing in question is ambiguous or incomplete. Where there is any doubt or controversy as to the meaning of the language, the court is permitted to consider parol evidence to explain the intent of the parties and the circumstances under which the agreement was executed.”) (quoting Hokama v. Relinc Corp., 57 Haw. 470, 476, 559 P.2d 279, 283 (1977)) (other citations omitted); see also Stewart v. Brennan, 7 Haw.App. 136, 143, 748 P.2d 816, 821 (1988) (when the meaning of specific contractual terms is unclear, a court may consider extrinsic evidence, such as evidence of surrounding circumstances and the subsequent acts and conduct of the parties); Am. Auto. Ins. Co. v. Hawaii Nut & Bolt, Inc., Civ. No. 15-00245 ACK-KSC, 2017 WL 5895162, at *7 (D. Haw. June 27, 2017) (citation omitted) (“Hawaii also allows consideration of extrinsic evidence to explain the intent of the parties and circumstances under which the agreement was executed if there is doubt as to the agreement's meaning.”) (citation and internal quotation marks omitted).

         Where, as here, “an ambiguity exists in [the Agreement], its proper means of construction remains to be determined as a matter of law[, ]” by examining “extrinsic evidence, i.e., all evidence outside of the writing including parol evidence, . . . to determine the true intent of the parties if there is any doubt or controversy as to the meaning of the language embodying their bargain.” Hokama, 57 Haw. at 475-76, 559 P.2d at 283.

Therefore, it is invariably necessary before a court can give any meaning to the words of a contract and can select one meaning rather than other possible ones as the basis for the determination of rights and other legal effects, that extrinsic evidence shall be heard to make the court aware of the “surrounding circumstances, ” including the persons, objects, and events to which the words can be applied and which caused the words to be used.

Hokama, 57 Haw. at 475, 559 P.2d at 283 (quoting 3 Corbin, Contract § 536, 27-28).

         The Court turns to consideration of the entire record, including extrinsic evidence, in order to determine the intent of the parties and resolve the ambiguities in the Agreement ...

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