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Commerce and Industry Insurance Co. v. Unlimited Construction Services, Inc.

United States District Court, D. Hawaii

December 6, 2018





         Plaintiff Commerce and Industry Insurance Company brought this subrogation action following the payment of insurance benefits to Phil and Fia Richmond, for a policy claim resulting from red dirt damage to the Richmonds' primary residence on Kauai. Plaintiff sues for negligence, trespass, and private nuisance, alleging that the Defendant construction companies[1] unreasonably and tortiously caused damage to the Kauai residence, and seeking all damages proximately caused by Defendants. Before the Court are Defendant Unlimited's Motion for Partial Judgment on the Pleadings and Motion for Summary Judgment. For the reasons set forth below, the Court concludes that Defendant's defense of consent precludes Plaintiff's trespass and nuisance claims, and Defendant's waiver and assumption of risk defenses preclude Plaintiff's negligence claim. Defendant's Motion for Summary Judgment is therefore GRANTED, and the Court need not address Defendant's Motion for Partial Judgment on the Pleadings.


         A. Facts

         Unless otherwise indicated, the following facts are not in dispute. In 2007, Philip and Fia Richmond (“the Richmonds”) purchased Lot 79 in the Kukui‘ula residential development on Kauai, with plans to build a custom home for themselves and their son Palmer, who had special needs. Doc. No. 27 at ¶¶ 1, 14; Plaintiff's First Supplemental Separate and Concise Statement of Facts (“Pl.'s FSCSF”) at ¶ 3. Plaintiff Commerce and Industry Insurance Company (“CIIC”) provided homeowners insurance coverage to the Richmonds for the custom home, located at 2791 Uluwehi Street in Koloa (“the Property”). Doc. No. 27 at ¶¶ 1, 14. The Richmonds purchased the Property on January 10, 2008, Doc. No. 140 at n.2, and were represented by attorney Anne Lopez in conjunction with the property conveyance. Defendant's Separate and Concise Statement of Facts (“Def.'s CSF”) at ¶ 7. The Richmonds acquired the Property via a Limited Warranty Deed (“the Deed”), which provided in relevant part:

The Lot is also subject to (in addition to the matters set forth above) each and every provision of that certain Community Charter for Kukui‘ula, dated May 8, 2006, and recorded in the Bureau of Conveyances of the State of Hawaii (the “Bureau”) as Document No. 2006-088739 . . . which imposes upon the Lot and other real property, under a general plan of development, certain covenants, conditions, restrictions, easements, servitudes and other provisions running with the land and binding title to the Lot and all owners of any portion thereof or interest therein, whether or not referenced in any future deed or instrument.

         Def.'s CSF at ¶¶ 6, 8. The Community Charter (“the Charter”) referenced in the Deed provided in relevant part:

Chapter 15 Disclosures and Waivers This chapter discloses some important information about Kukui‘ula for the benefit of prospective purchasers of property in Kukui‘ula. Each Owner, by accepting a deed to property in Kukui‘ula, also accepts and agrees to the matters set forth in this chapter. . . .
15.3. Changes in Master Plan
Each Owner acknowledges that Kukui‘ula is a planned resort community, the development of which is likely to extend over many years[.] . . .
15.6. Ongoing Construction Activities Construction activity by the Declarant, The Club, Builders designated by the Declarant, or other Owners will continue within Kukui‘ula, as well as on properties, including the golf course, adjacent to and within Kukui‘ula for an extended period of time. Such construction activity shall include the use of construction vehicles and heavy equipment for construction purposes that may result in the transmission, discharge, or emission of surface water, runoff, smoke, noise, dust, odors, noxious vapors, chemicals, vibrations, and other annoyances, as well as pose certain risks of injury to an Owner and his/her guests and visitors, and may limit the Owner's access to portions of Kukui‘ula. . . .
15.13. Blasting and Other Activities All Owners, occupants, and users of Units are hereby placed on notice that the Declarant, Declarant Affiliates, and/or their agents, contractors, subcontractors, licensees, and other designees, successors, or assigns, may, from time to time, conduct blasting, excavation, construction, and other activities within Kukui‘ula, which may cause windblown dust and other nuisances typically associated with such activities. By the acceptance of a deed or other conveyance or mortgage, leasehold, license, or other interest, and by using any portion of a Unit or Kukui‘ula generally, the Owners and all occupants and users of Units acknowledge, stipulate, and agree (a) that such activities shall not be deemed nuisances, or noxious or offensive activities, under any applicable covenants or at law generally; (b) not to enter upon, or allow their pets, children, or other Persons under their control or direction to enter upon (regardless of whether such entry is a trespass or otherwise) any property within or in proximity to the Unit where such activities are being conducted (even if not being actively conducted at the time of entry, such as at night or otherwise during non-working hours); (c) that the Declarant, any Declarant Affiliate, and all of their agents, contractors, subcontractors, licensees, and other designees, successors, and assigns, shall not be liable but, rather, shall be held harmless for any and all losses, damages (compensatory, consequential, punitive, or otherwise), injuries, or deaths arising from or relating to the aforesaid activities; (d) that any purchase or use of any portion of a Unit has been and will be made with full knowledge of the foregoing; and (e) that this acknowledgment and agreement is a material inducement to the Declarant or its Declarant Affiliates to sell, convey, lease, and/or allow the use of Units.

         Def.'s CSF at ¶ 9; Pl.'s FSCSF, Ex. 3 at 58-62 (emphases added). It is undisputed that the Richmonds received a copy of the Charter at the time of closing. Def.'s CSF, Ex. A at 140-142.

         The Richmonds moved into their completed home on May 16, 2013. Pl.'s FSCSF at ¶ 14. Starting in November 2014, the Richmonds began noticing heavy amounts of red dirt accumulating in their home. Doc. No. 27 at ¶ 9; Pl.'s FSCSF at ¶ 15. Plaintiff alleges that the Richmonds' housekeeper, who had been cleaning the home for eight to ten hours a week, then had to assist daily with cleaning the red dirt, and could not keep up with the dirt entering the home. Pl.'s FSCSF at ¶ 17-21. Fia Richmond (“Fia”) testified that when using the pool at their residence, she had to brush red dirt off the seat to find a place to sit. Pl.'s FSCSF, Ex. 2 at 56. Plaintiff alleges that at this time, multiple construction projects were underway near the Property. Doc. No. 27 at ¶¶ 10, 12-13. Defendant Unlimited was constructing bungalows directly west of the Property, while Defendant Kukui‘ula Development Company (“KDC”) was conducting landscaping work directly north of the Property, and Defendants Kainani Villas (“Kainani”) and Kukui‘ula Residential Development (“KRD”) were constructing a new resort community northeast of the Property. Doc. No. 27 at ¶¶ 10, 12-13. Defendant Unlimited began constructing on September 26, 2014. Pl.'s FSCSF at ¶ 22. It is unclear from the record when the KDC, Kainani, and KRD projects began, but Plaintiff's Amended Complaint alleges that the damage began “on our about November 6, 2014, ” and that Defendants were constructing “[a]t all pertinent times.” Doc. No. 27 at ¶ 9-12.

         In any event, the Richmonds testified that there were “piles and piles of dirt” on the construction sites for “weeks on end” and “for over a year, year and a half, ” and that “many times…dirt was left uncovered.” Pl.'s FSCSF, Ex. 2 at 39-42. Fia said during her deposition that Defendant Unlimited's dust fence was too low, and was lower than the dust fence the Richmonds were required to use when constructing their home. Pl.'s FSCSF, Ex. 2 at 43.

         On or about December 5, 2014, the Richmonds met with representatives from Defendant Unlimited to discuss the excessive amount of dirt entering their home. Pl.'s FSCSF at ¶ 24. Phillip Richmond (“Phil”) testified that the purpose of the meeting was “[t]o understand what the extent of the construction was” and that he had “concerns as a homeowner.” Pl.'s FSCSF, Ex. 1 at 54. Fia testified that they discussed the red dirt in the house and on the lanai, and Phil asked “how they were going to manage or take care of cleaning it.” She explained, “Phil's biggest issue was how they were going to deal with the red dirt and the iron deposits.” Pl.'s FSCSF, Ex. 2 at 56-57.

         Sometime after the meeting with Defendant Unlimited, the Richmonds filed a claim with CIIC. Pl.'s FSCSF, Ex. 1 at 95-96. CIIC alleges that it paid the Richmonds $817, 769.08 as a result of the red dirt damage caused by ...

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