United States District Court, D. Hawaii
ADON CONSTRUCTION INC., ET. AL. Plaintiffs,
RENESOLA AMERICA INC., ET. AL. Defendants.
FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY
IN PART DEFENDANT RENSOLA AMERICA, INC.'S MOTION FOR AN
AWARD OF ATTORNEYS' FEES AND NON-TAXABLE COSTS
Reber Porter United States Magistrate Judge
the Court is Defendant Rensola America, Inc.'s
(Defendant) Motion for an Award of Attorneys' Fees, filed
June 10, 2019 (Motion). See ECF No. 188. Defendant
requests an award of attorneys' fees of $296, 784.40,
plus general excise tax of $13, 978.55, non-taxable costs of
$62, 760.01, and post-judgment interest. See ECF No.
188-1 at 9. On June 26, 2019, Plaintiffs Adon Construction,
Inc. and Green Visions, LLC filed their Opposition to the
Motion. See ECF No. 192. Defendant filed its Reply
on July 10, 2019. See ECF No. 199. The Court found
this matter suitable for disposition without a hearing
pursuant to Rule 54.3(f) of the Local Rules of Practice for
the United States District Court for the District of Hawaii
reviewing the parties' submissions and the relevant case
law, the Court FINDS and RECOMMENDS that the Motion be
GRANTED IN PART and DENIED IN PART for the reasons set forth
Court and the parties are familiar with the history of the
case. Accordingly, the Court only recites those facts
relevant to the present Motion. Plaintiffs are contractors
who install photovoltaic (PV) solar panels on residential and
commercial properties in Hawaii. See ECF No. 183 at
2. Defendant is a solar panel supplier. Id. Between
2013 and 2014, Plaintiffs purchased solar panels from
Defendant and installed them on both residential and
commercial properties. Id. Purchase invoices dated
April 17, 2013, and April 25, 2013 provide a warranty for
“10 years for product, 10 years for 90% power output
and 25 years for 80% power output.” Id. A
Framework Sales Contract was drafted between the parties in
2014 and 2015. Id.
allege that Defendant represented their solar panels as free
from defects, micro-cracks, and snail trails. Id. at
3. Plaintiffs further allege that, in 2015, Plaintiffs'
customers began complaining about snail trails on
Defendant's solar panels. Id. Both Plaintiffs
and Defendant submitted expert reports about the cause of the
snail trails. Id. Plaintiffs' expert opined that
micro-cracking and the resulting snail trails were the fault
of the manufacturer and, in contrast, Defendant's expert
provided evidence that micro-cracks can be created during the
installation process. Id.
initiated the underlying action on September 15, 2016 in the
State of Hawaii's Circuit Court of the First Circuit.
See ECF No. 1 at 2. Plaintiffs brought the following
ten claims related to the snail trails and micro-cracks on
the solar panels and sought damages at common law and under
applicable statutes of the Hawaii Revised Statutes (HRS):
• Count I: fraudulent, intentional, reckless, negligent
• Count II: tortious fraud in the inducement;
• Count III: Unfair or Deceptive Acts and Practices
under HRS §480-2;
• Count IV: Deceptive Trade Practices under HRS §
• Count V: business defamation and disparagement;
• Count VI: unjust enrichment;
• Count VII: detrimental reliance;
• Count VIII: breach of contract;
• Count IX: breach of express warranty; and
• Count X: breach of duty to mitigate damages.
See ECF No. 1-1.
November 20, 2018, Defendant moved for judgment on the
pleadings as to Counts I, III, V, VI, and X and moved for
summary judgment on all claims. See ECF No. 117; ECF
No. 121. On May 23, 2019, the district court granted in part
and denied in part Defendant's Motion for Judgment on the
Pleadings and granted Defendant's Motion for Summary
Judgment as to all remaining claims. See ECF No.
183. Defendant then filed the present Motion pursuant to Rule
54 of the Federal Rules of Civil Procedure and Section 607-14
of the Hawaii Revised Statutes.
seeks an award of fees under HRS Section 607-14. Section
607-14 is a statutory exception to the American Rule and
mandates the recovery of fees in an action on a promissory
note or contract that provides for fees or an action in the
nature of assumpsit. See Haw. Rev. Stat. §
607-14. To award attorneys' fees under Section 607-14,
the court must determine whether: (A) Defendant is entitled
to attorneys' fees as the prevailing party; (B) the
action is in the nature of assumpsit; (C) the fees requested
are reasonable; and (D) the fees do not exceed twenty-five
percent of the amount sued for. Defendant also seeks an award
of non-taxable costs and post-judgment interest.
federal court sitting in diversity must apply the law of the
forum state including the award of attorneys' fees.
See Kona Enters., Inc. v. Estate of Bishop, 229 F.3d
877, 883 (9th Cir. 2000). Accordingly, the Court will apply
Hawaii law here to determine whether Defendant is entitled to
attorneys' fees. Under Hawaii law, “[o]rdinarily,
attorneys' fees cannot be awarded as damages or costs
unless so provided by statute, stipulation, or
agreement.” Stanford Carr Dev. Corp. v. Unity
House, Inc., 141 P.3d 459, 478 (Haw. 2006) (citation and
quotation marks omitted). “Generally, under the
‘American Rule,' each party is responsible for
paying his or her own litigation expenses. A notable
exception to the ‘American Rule,' however, is the
rule that attorneys' fees may be awarded to the
prevailing party where such an award is provided for by
statute, stipulation, or agreement.” TSA Int'l,
Ltd. v. Shimizu Corp., 990 P.2d 713, 733 (Haw. 1999).
As the Prevailing Party, Defendant is Entitled to
party ‘prevails' for purposes of attorneys'
fees if ‘they succeed on any significant issue in
litigation which achieves some of the benefit the parties
sought in bringing suit.'” See Eggs ‘N
Things Int'l v. ENT Holdings LLC, Civil No. 10-00298
JMS/LEK, 2011 WL 676226, at *9 (D. Haw.) (quoting Hensley
v. Eckerhart, 461 U.S. 424, 433 (1983)). Hawaii courts
have noted that “[i]n general, a party in whose favor
judgment is rendered by the district court is the prevailing
party in that court[.]” MFD Partners v.
Murphy, 850 P.2d 713, 716 (Haw. Ct. App. 1992)
(citations omitted). A judgment of dismissal in its favor
similarly supports a finding that a party prevailed. See
Ranger Ins. Co. v. Hinshaw, 79 P.3d 119, 124 (Haw. 2003)
(citations omitted); Blair v. Ing, 31 P.3d 184, 189
(Haw. 2001) (finding that “a defendant who succeeds in
obtaining a judgment of dismissal is a prevailing party for
the purpose of [attorneys'] fees under HRS §
Plaintiffs do not dispute that Defendant is the prevailing
party. See ECF No. 192. Of the ten claims asserted
against Defendant, the Court entered judgment on the
pleadings for one count, granted summary judgment for seven
counts, and dismissed the remaining two counts. See
ECF No. 183. The Court finds that that Defendant has obtained
final judgment in its favor on all claims at issue and is the
prevailing party in this action.
The Action is in the Nature of Assumpsit
next argues that, as the prevailing party, it is entitled to
an award of reasonable attorneys' fees pursuant to HRS
Section 607-14. See ECF No. 188-1 at 8. Section
607-14 provides a legal basis for the recovery of fees in
actions that are “in the nature of assumpsit.”
Haw. Rev. Stat. § 607-14. “[I]n all actions in the
nature of assumpsit ... or other contract in writing that
provides for an attorney's fee, there shall be taxed as
attorneys' fees, to be paid by the losing party and to be
included in the sum for which execution may issue, a fee that
the court determines to be reasonable.” Id.
Assumpsit is a common law cause of action which provides for
“damages for non-performance of a contract, either
express or implied, written or verbal, as well as quasi
contractual obligations.” 808 Dev., LLC v.
Murakami, 141 P.3d 996, 1013 (Haw. 2006) (citation and
Hawaii case law, an action in the nature of assumpsit
includes ‘all possible contract claims.'”
Helfand v. Gerson, 105 F.3d 530, 537 (9th Cir.
1997). For an action to be in the nature of assumpsit,
“the plaintiff's primary objective must be to
obtain monetary relief for breach of the contract.”
Kahala Royal Corp. v. Goodsill Anderson Quinn &
Stifel, 151 P.3d 732, 761 (Haw. 2007). To determine
whether the action is in the nature of assumpsit, the court
should examine “the substance of the entire pleading,
the nature of the grievance, and the relief sought.”
S. Utsunomiya Enters., Inc. v. Moomuku Cnty. Club,
879 P.2d 501, 505 (Haw. 1994).
Court must “determine whether each individual claim
alleged in a complaint sounds in assumpsit or tort.”
Kona Enters, 229 F.3d at 885. Depending on an
analysis of the nature of Plaintiffs' individual claims,
the Court may need to apportion the request for
attorneys' fees between the claims in the nature of
assumpsit and those claims.
ten claims against Defendant, Plaintiffs argue that the
misrepresentation and tortious fraud in the inducement claims
sound in tort because the allegations are based upon
misrepresentations Defendant made prior to the sales
contract. See ECF No. 192 at 5. Plaintiffs also
contend that statutory claims for “unfair or deceptive
acts and practices” and “deceptive trade
practices” under HRS Sections 480-2 and 481A are
expressly excluded as actions in the nature of assumpsit.
Id. Defendant argues that these contested claims
“are based solely on Plaintiffs' contention that
Defendant breached an express warranty or contractual
language, specifically, that the panels were free of defects
and that Defendant failed to honor its contractual warranties
once the alleged defects were present.” See
ECF No. 199 at 3.
discussed in greater detail below, the Court finds that, of
the ten claims asserted against Defendant, four are in the
nature of assumpsit for purposes of Section 607-14.
Count I - Fraudulent, Intentional, Reckless, or Negligent
claims typically sound in tort, even if related to a
contract. See TSA, 990 P.2d at 734 (holding that
fraud claims related to a contract still sound in tort);
see also Kohala Agric. v. Deloitte & Touche, 949
P.2d 141, 144 (Haw. Ct. App. 1997).
argues that the fraudulent, intentional, reckless or
negligent misrepresentation claim is both contractual and
tort-based. See ECF No. 1-1 ¶ 69. However,
Defendant's alleged misrepresentations about the quality
of the solar panels were made prior to the entering
into the contract. See id. ¶ 66. Even the
alleged misrepresentations about replacing damaged or
defective panels were oral representations made prior
to entering into the contract. Id. Accordingly,
the Court finds that the misrepresentation claim in Count I
sounds more in tort and is not in the nature of assumpsit for
purposes of Section 607-14.
Count II - Tortious Fraud in the Inducement
claims related to a contract similarly sound in tort. See
TSA, 990 P.2d at 734; see also Jou v. Adalian,
No. CV 15-00155 JMS-KJM, 2018 WL 5289496, at *6 (D. Haw. Aug.
30, 2018) (finding that a claim flowing from reliance on
alleged false representations made to induce a party into
entering in a contract sounds in tort). Again, the Court must
evaluate each individual claim including “the relief
sought.” S. Utsunomiya Enters., Inc., 879 P.2d
this fraud claim in Count II, Defendant does not allege
monetary damages flowing from the non-performance of a
contractual or quasi-contractual obligation. See ECF
No. 1-1 ¶ 76. Instead, Plaintiffs' relief sought
relates to their alleged reliance on Defendant's
misrepresentations made to induce Plaintiffs to enter into
the contract and purchase solar panels in the first place.
Id. Accordingly, based on the facts alleged and the
relief sought, the Court finds that the fraud in the
inducement claim sounds in tort and are not in assumpsit.
Counts III and IV - Claims under Hawaii Revised
claims brought under Hawaii Revised Statutes are not in the
nature of assumpsit. This Court has held that deceptive
practices claims under HRS Section 480 are not in the nature
of assumpsit. See Au v. Republic State Mortg. Co.,
No. CIV. 11-00251 JMS, 2014 WL 770291, at *4 (D. Haw.). Here,
the Court finds that Plaintiffs' unfair or deceptive acts
and practices claims in Counts III and IV are statutory
claims brought under HRS Sections 480 and 481 and therefore
not in the nature of assumpsit for purposes of Section
Count V - Business Defamation and Disparagement
of business defamation and disparagement sounds in tort.
See Hawaiian Ins. & Guar. Co. v. Blair,
Ltd., 726 P.2d 1310, 1315 n.9 (Haw. Ct. App. 1986)
(citing Restatement (Second) of Torts §§
623A, et seq. (1977) and W. Prosser & W. Keeton,
The Law of Torts § 128 (5th ed. 1984))
(“Trade libel or disparagement falls in the category of
torts designated as “injurious falsehood” rather
than “defamation.”). Accordingly, the Court finds
that Count V is not in the nature of assumpsit for purposes
of Section 607-14.
Count VI - Unjust Enrichment
unjust enrichment claim is quasi-contractual and is in the
nature of assumpsit. See Hong v. Kong, 683 P.2d 833,
841 (Haw. Ct. App. 1984) (citations omitted). “From its
inception as a form of action for breach of simple contract,
assumpsit also evolved as ‘a vehicle for recovery in
quasi contract,' basically ‘to deprive the
defendant of an unjust enrichment.' Indeed,
‘assumpsit will lie upon a promise implied by law,
which arises to prevent one man from being inequitably
enriched at another's expense.'” Id.
Here, Plaintiffs' unjust enrichment claim in Count VI is
based on Defendant's retention of Plaintiffs'
payments for solar panels without Defendant honoring the