FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT (CIVIL NO.
Charles H. Brower, and Michael P. Healy, and Walter R.
Schoettle, for Plaintiff-Appellant/ Cross-Appellee
M. Murakami, E. Kumau Pineda-Akiona, (Damon Key Leong Kupchak
Hastert), for Defendant-Appellee/ Cross-Appellant.
GINOZA, CHIEF JUDGE, FUJISE AND LEONARD, JJ.
Tara Aoyagi Lumford (Lumford) appeals from
the Final Judgment (Judgment) entered on
April 19, 2016, by the Circuit Court of the First Circuit
(Circuit Court),  in favor of
Defendant/Appellee/Cross-Appellant Glenn Yoshio Ota
(Ota), both individually and as personal
representative of the Estate of Janis Yukie Ota
(Janis). Lumford also challenges the Circuit
Court's Order Granting Defendant Glenn Yoshio Ota's
Motion to Dismiss Plaintiff Tara Aoyagi Lumford's First
Amended Complaint, filed October 6, 2015 (Order
Dismissing Amended Complaint). On cross-appeal, Ota
challenges the Circuit Court's Order Granting in Part and
Denying in Part Defendant's Motion for Attorneys'
Fees and Costs, filed on March 8, 2016
(Attorneys' Fees Order).
short, the Circuit Court concluded, as a matter of law, that
no claim for unjust enrichment may be sustained by Lumford
against Ota because Lumford did not allege that she (rather
than a third party) bestowed a benefit upon Ota that he
wrongfully retained. As set forth below, we hold that the
Circuit Court erred and that, in limited circumstances, a
claim for unjust enrichment may be stated by allegations that
a third-party has conferred a benefit upon a defendant to
which the plaintiff claims he or she has a superior legal or
equitable right. The requirements for such a claim may be
satisfied by proof of a clear legal entitlement. Other
equitable circumstances might suffice, but in all cases, the
plaintiff must identify a right in the disputed assets that
is both recognized and accorded priority over the interest of
the defendant. It is insufficient to allege that the
defendant has received a windfall, that the claimant has been
ill-treated, and that the third party's payment or other
transfer to the defendant (or the defendant's retention
of payment or transferred assets as against the claimant)
violates rules of good faith, basic fairness, or common
decency. The Judgment is vacated, and this case is remanded
to the Circuit Court.
10, 2015, Lumford filed a complaint against Ota. An Amended
Complaint was filed on October 6, 2015. In the Amended
Complaint, Lumford alleged that in July of 2008, her aunt
Cindy Aoyagi (Aoyagi) owned a single-family
residence in Waipahu, Hawai'i (Waipahu
Property). Aoyagi learned that she was suffering
from cancer and decided to make provisions to dispose of her
property in case of her death. Lumford alleged in the Amended
Complaint that Aoyagi wanted to leave the Waipahu Property to
Lumford, but Aoyagi believed Lumford was not yet mature
enough to manage it by herself.
Amended Complaint further alleged that Aoyagi decided to
convey the Waipahu Property to Ota in fee simple absolute,
retaining a life estate for herself, in reliance on Ota's
promise to hold the Waipahu Property for the use and benefit
of Aoyagi during her lifetime and, thereafter, for the use
and benefit of Lumford's parents during their lifetimes,
and thereafter, for the use and benefit of Lumford until such
time as Lumford attained the maturity to manage the Waipahu
Property herself, whereupon Ota would convey the Waipahu
Property to Lumford. In addition, Lumford alleged that a
confidential relationship existed between Ota and Aoyagi at
the time of the conveyance and that the conveyance was based
on and arose out of that confidential relationship. The deed
recording this conveyance was recorded in the Bureau of
died in May of 2009, and the following July, Ota conveyed the
Waipahu Property to himself and his wife Janis as tenants by
the entirety; the deed was recorded in the Bureau of
Conveyances. In December of 2013, Ota and Janis mortgaged the
Waipahu Property in the amount of $100, 000. Janis later
died, and in September of 2014, Ota conveyed the Waipahu
Property to a third-party for a payment of $540, 000. In
November of 2014, Ota was appointed as personal
representative of Janis's estate. Lumford alleged that
between May 31, 2009, and September 19, 2014, Ota and/or
Janis received rental and other income from the Waipahu
Property for which they have not accounted and which they
have retained for their own use and benefit. Lumford's
parents are also now deceased.
Amended Complaint asserted two counts, "Count I: Breach
of Fiduciary and Confidential Relationship" and
"Count II: Alternative Claim for Breach of Fiduciary and
Confidential Relationship." Both counts averred that Ota
would be unjustly enriched unless equitable relief was
granted to Lumford by the court. Accordingly, based on
Ota's alleged unjust enrichment, Lumford sought to impose
a constructive trust upon the rental and other income and
proceeds from the mortgage and sale of the Waipahu Property
and sought an accounting from Ota of any income he and/or
Janis received from the Waipahu Property.
filed a Motion to Dismiss Plaintiff's First Amended
Complaint on October 6, 2015 (Motion to
Dismiss). Ota thereafter argued, inter
alia, that Lumford does not have a cognizable unjust
enrichment claim because such a claim requires that the
plaintiff have directly conferred a benefit upon the
defendant. Ota argued that because Lumford alleged that
Aoyagi had conferred the benefit (the Waipahu Property) upon
Ota, Lumford, as a third party to that conveyance, has no
justiable claim for unjust enrichment.
addition, Ota attached to a supplemental memorandum in
support of the Motion to Dismiss, inter alia, the
findings of fact and conclusions of law from June T.
Aoyagi v. Estate of Cindy Hatsue Aoyagi, et al., Civil
No. 10-1-2560 (Roger's Civil Case), an
action purportedly prosecuted by Lumford's father, Roger
Aoyagi, and the briefing from the appeal of the judgment in
Roger's Civil Case. See Aoyagi v. Aoyagi, 2017
WL 253545 (Haw. App. Jan. 20, 2 017) (SDO).
filed a memorandum in opposition to the Motion to Dismiss,
which included a declaration of Lumford in which she averred,
inter alia, that she was told by Aoyagi's
attorney that Aoyagi "decided to leave [Ota] in charge
of the property with the hopes that he would transfer the
property to [Lumford] once he felt [Lumford] was ready."
Circuit Court agreed with Ota's argument that an unjust
enrichment claim requires that a plaintiff have directly
conferred a benefit upon the defendant and that dismissal of
Lumford's claims on this basis was required. The Circuit
[M]y inclination is just based on a 12(b)(6) reading of the
First Amended Complaint, and under [Pavsek v.
Sandvold, 127 Hawai'i 390, 279 P.3d 55 (App. 2012)]
that the way it's pled, even in the First Amended
Complaint, for the reasons set forth by the Defendants, I
don't think you can withstand 12(b) (6) under that case
on the unjust enrichment, and if there is no unjust
enrichment that's legally cognizable, then the other
claims, I think I agree with the Defendants that those are
remedies and not stand-alone claims.
So that's my inclination, that I don't know that
it's -- I'm not certain it's necessary for the
Court to reach all of the issues, and just under 12(b)(6), my
inclination is I'm persuaded just by that.
hearing further argument, the Circuit Court stated:
I'm going to incorporate the comments I made in the
inclination as part of the basis of the ruling, and based on
the arguments made by the movant in their Defendant's
Supplemental Memorandum and the Reply, this Court finds that
there's no cognizable claim under 12(b)(6) the way this
is pled and looking at the elements of unjust enrichment, and
the claim of constructive trust is a remedy and not a claim,
so that's the Court's interpretation of what the case
law stands for as well.
This Court did take judicial notice, and I found that all of
the -- the exhibits in the Reply submitted by the Defendants
and under Rule 201, as well as in the supplemental
memorandum, this Court did take judicial notice of those, and
I think it's appropriate under Rule 201.
And also, with regard to the standard of review, I'm
disposing of this for failure to state a cognizable claim
under 12(b)(6). However, Thomas vs. Sterns, S-T-E-R-N-S, I
think that because my take on this case is even if I take
judicial notice, I think it still does convert this ...