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Archive for 2009

Happy Holidays

Thursday, December 24th, 2009

Happy Holidays from everyone in our office. It has been a tough year for the State of Hawaii and the United States. Still, our office has managed to weather the economic storm that has caused such pain across our great nation. I am grateful to our clients for their trust especially during this difficult period.

May you all have a safe and joyous holiday.

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The Kaloko Dam Settlement

Tuesday, November 3rd, 2009

The Kaloko Dam flood was a terrible tragedy, about which I previously posted in September of 2007. I am happy to report that we have reached a successful settlement, which will allow our clients to restore their idyllic property.

Our clients’ property, on the island of Kauai, was severely damaged by the Ka Loko Dam flood. I represented one of the largest property owners damaged by the Ka Loko Dam flood. Admittedly, I was part of a team of plaintiffs attorneys. (A case this size had to be handled by a team of attorneys). The case allowed me to work with some of Hawaii’s best attorneys. It was also an honor to watch the manner in which this difficult case was handled by the Court. As an advocate, I was not always pleased with every ruling, however, the way the Court controlled the litigation was inspiring. I also participated in the mediation skillfully handled by Warren Price and Keith Hunter. It was conducted over several months and involved multiple parties and insurance carriers. This complex case involved every imaginable issue of law and procedure. The attorneys for the plaintiffs and the defendants handled this difficult case with the highest degree of courtesy and professionalism.

In my September 2007 Kaloko Dam blog, I wrote the following:

We are very proud to represent this family in their pursuit for justice. In a few years, we intend to write a follow up to this blog in which we will describe how we helped our clients restore their beautiful Kauai landscape.

This outcome will allow our clients to restore their home to the condition it was in before the flood. I also hope that this settlement allows the Kauai community to continue the process of healing from this tragedy.

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Hawaii Attorney Philip Brown selected to the Best Lawyers in America

Monday, August 24th, 2009

Hawaii attorney Philip R. Brown has been selected by his peers to be included in the 2010 edition of The Best Lawyers in America. Obviously, he is delighted to have received this great honor.

“For over a quarter of a century, Best Lawyers has been regarded- by both the profession and the public-as the definitive guide to legal excellence in the United States. Selection to Best Lawyers is based on exhaustive and rigorous peer-review survey … by the top attorneys in the country.”

Admittedly, legal professionals may disagree as to the “definitive guide to legal excellence in the United States”. Best Lawyers, Martindale Hubbell , The Bar Register of Preemenient Lawyers and the American Trial Lawyers Association can all make solid claims to be the definitive guide to legal excellence. Philip Brown has now received the highest rating from each of those legal guides.

Philip Brown is listed in The Best Lawyers in America under Commercial Litigation. Mr. Brown has the highest ethical/legal rating (AV) from Martindale Hubbell. Mr. Brown is also listed by the American Trial Lawyers Association in the Top 100 Trial Lawyers. Finally, Philip Brown is listed in the Bar Register of Preeminent Lawyers under Civil Trial Practice, Commercial Litigation, and Personal Injury.

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"Costs" In An Attorney Fee Contract

Friday, June 26th, 2009

What does it mean when the attorney says I must pay “costs”?

Costs are typically any expense the attorney incurs while representing you. These expenses vary depending on the type of the case and the location of the witnesses. However, examples of these costs are as follows: photocopying, travel expenses, court reporter expenses, expert witness fees, postage, long distance telephone charges, legal research charges, parking, costs billed by medical provider, insurance company or other entity for copies of medical reports and/or billing statements.

In most contingency fee cases, the attorney agrees to advance payment for these costs, and the client remains responsible for reimbursement of said costs out of client’s share of the proceed of any recovery obtained, whether by settlement or jury verdict. Any balance due and owing by client for costs advanced by attorney shall be deducted by attorney out of client’s share of the proceeds of said recovery.

In cases where an attorney is retained on an hourly basis, attorneys advance payment of these costs. The client then reimburses attorneys by payment of a monthly billing statement which includes attorneys fees and costs for the monthly billing period.

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Real Estate Settlement Procedures Act (RESPA)

Wednesday, June 3rd, 2009

The Real Estate Settlement Procedures Act (RESPA), 12 U.S.C.A Section 26, et seq, was enacted by Congress to “effect certain changes in the settlement process for residential real estate that will result:”

(1) in more effective advance disclosures to home buyers and sellers of settlement costs;

(2) in the elimination of kickbacks or referral fees that tend to increase unnecessarily the costs of certain settlement services;

(3) in a reduction in the amounts home buyers are required to place in escrow accounts established to insure the payment of real estate taxes and insurance; and

(4) in slight reform and modernization of local recordkeeping of land title information.

12 U.S.C.A. Section 2601(b).

A particular RESPA disclosure that must be made by a lender includes the following:

Each person who makes a federally related mortgage loan shall disclose to each person who applies for the loan, at the time of application for the loan, whether the servicing of the loan may be assigned, sold, or transferred to any other person at the time while the loan is outstanding.

12 U.S.C.A Section 2605(a)(emphasis added).

The failure of a lender to make the above disclosure establishes a private right of action for the borrower against the lender. Sanborn v American Lending Network, 506 F.Supp.2d 917, 923 (D.Utah, 2007).

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Samantha Alana Brown

Friday, May 15th, 2009

A business associate recently asked me if I have been involved in a difficult trial recently, because I have not updated my blog since March 10, 2009.

The inactivity on my blog is not the result of being overworked from a trial. My failure to blog is the result of exhaustion caused by a far more happy occasion. I am proud to announce that on March 20, 2009 my wife Sarah and I were blessed with the birth of a daughter, Samantha Alana Brown. Samantha was six pounds ten ounces at birth. Currently her hobbies seem to be eating, sleeping and staring at a picture of hearts painted by her sister, Fiona.

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Opportunity to Cure in a Services Contract

Tuesday, March 10th, 2009

A contracting party who fails to give proper notice and opportunity to cure any alleged breach, default, or defect (as expressly required in the contract) is in breach of the contract. See Kalaus v Prime Care Physician, 20 A.D. 3d 452, 454 (N.Y.A.D. 2 Dept., 2005)(Defendants breached the contract with plaintiff for failure to give plaintiff 30 days to cure plaintiff’s breach as expressly provided in the contract. Plaintiff was awarded summary judgment on the issue of liability). The party who is held in breach for failing to give proper notice and opportunity to cure also loses any of its claims or defenses related to the other party’s alleged breaches. Id. (“Based on the conclusion that that defendants breached the termination for cause provision of the employment agreement [for failing to give plaintiff notice of his breach and opportunity to cure], it is irrelevant whether the defendants did, in fact, have the requisite cause to terminate the plaintiff’s employment.”)(brackets added). See also The American Outdoorsman, Inc. v Pella Products, Inc., 144 P.3d 81, *8 (Kan.App., 2006)(“[E]ven if American Outdoorsman’s network change could be considered a material breach, Pella should not be allowed to assert this breach as a defense when it failed to give American Outdoorsman the opportunity to correct such breach.”) Likewise, “an injured party that acts precipitously and terminates before it is entitled to do so loses its defense as well as the possibility of claiming damages for total breach, and will itself be liable for damages for total breach.” Farnsworth on Contract section 8.18 (3d.ed., 2004).

Admittedly, the party breaching the contract could argue that (i) there was a mutual rescission of the agreement or (ii) it was orally modified. However, “to establish rescission by mutual consent, the contracting parties’ acts and declarations must be inconsistent with the continued existence of the previous contract.” AAA Uniform and Linen Supply, Inc. v. Barefoot, Inc., 17 S.W. 3d 627,629 (Mo.App. W.D. 2000) (emphasis added). Moreover, proof of these “acts and declarations” of “rescission must be clear, positive, unequivocal and decisive, and it must manifest the parties’ actual intent to abandon contract rights.” Id.

The second option, “a written contract can subsequently be orally modified if all of the requisites of a valid or enforceable agreement are met.” Honolulu Federal Sav. And Loan Ass’n v. Murphy 7 Haw.App 196, 205 (Haw.App.1988). “A requisite is that the modification must be supported by new consideration.” Id.

For a discussion of our Commercial Litigation Practice click
here .

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Arbitration in Hawaii (Part 2)

Friday, March 6th, 2009

Hawaii Courts strongly encourage arbitration. In fact, Hawaii Courts favor arbitration to such an extent that if there are three parties to a contract (and one didn’t sign the agreement containing the arbitration clause) the Court will likely enforce the arbitration agreement (if the nonsignatory wants the agreement enforced).

That’s right, in certain circumstances nonsignatories to an agreement have standing to invoke an agreement’s arbitration clause. The Hawaii Supreme Court explained this principle in Luke v Gentry, Ltd., 105 Hawaii 241, 248 (Hawaii, 2004) as follows:

[W]e hold that a nonsignatory agent has standing to invoke an arbitration agreement if one of the following two conditions is met:

First, when the signatory to a written agreement containing an arbitration clause must rely on the terms of the written agreement in asserting its claims against the nonsignatory. Second, when the signatory to the contract containing a arbitration clause raises allegations of substantially interdependent and concerted misconduct by both the nonsignatory and one or more of the signatories to the contract.

Id. at 248.

Thus, if you have entered into an arbitration agreement in Hawaii, it appears that it will be enforceable by parties and non parties.

Moreover, if a Hawaii court holds that defendant has standing to invoke an arbitration clause, the court will stay the case pending the outcome of the arbitration. H.R.S. section 658A-7. Admittedly, the stay may be limited to the claim(s) subject to the arbitration that are severable. H.R.S. section 658A-7; Ueoka v Szymanski, 107 Hawaii 386, 396 (Hawaii, 2005). However, in order to promote judicial efficiency, the court will likely the remainder of the action (not just the claims subject to the arbitration) until the arbitrable issues are decided or the parties waive their right to arbitrate. Creative Telecommunications, Inc. v Breeden, 120 F.Supp.2d, 1225, 1242-43 (D.Haw., 1999)(“[I]f non-arbitrable issues depend on arbitrable issues, or if resolution of arbitrable issues would render the district court’s ruling on the non-arbitrable issues unnecessary, litigation on the non-arbitrable issues should be stayed pending arbitration.”).

For a discussion of our Arbitration and Mediation Practice, please click
here.

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Arbitration in Hawaii

Monday, March 2nd, 2009

Hawaii courts favor arbitration. Arbitration is a device in which the litigants agree to hire a private, independent third party to decide their case. It is generally accepted that parties will reduce litigation costs by arbitrating a matter, since the process will be streamlined. It is quite common for parties to agree to arbitrate in a contract, although any case may be resolved through arbitration (so long as all parties agree to do so).

If there is an arbitration clause in an agreement, courts are obligated to enforce it so long as the court determines that the dispute is subject to the clause in the agreement. H.R.S. section 658A-6, H.R.S. section 658A-7. Moreover, if (i) a party to the contract files a motion to compel arbitration or (ii) the court orders arbitration, then the court shall stay any proceeding that involves the same claim(s). H.R.S. section 658A-7.

Hawaii Revised Statutes (“H.R.S”) section 658A-6 states the following:

(a) An agreement contained in a record to submit to arbitration any existing or subsequent controversy arising between the parties to the agreement is valid, enforceable, and irrevocable except upon a ground that exists at law or in equity for the revocation of a contract.

(b) The court shall decide whether an agreement to arbitrate exists or a controversy is subject to an agreement to arbitrate.

(c) An arbitrator shall decide whether a condition precedent to arbitrability has been fulfilled and whether a contract containing a valid agreement to arbitrate is enforceable.

(d) If a party to a judicial proceeding challenges the existence of, or claims that a controversy is not subject to, an agreement to arbitrate, the arbitration proceeding may continue pending final resolution of the issue by the court, unless the court otherwise orders.

Further, H.R.S. section 658A-7 provides,

(a) On motion of a person showing an agreement to arbitrate and alleging another person’s refusal to arbitrate pursuant to the agreement:

(1) If the refusing party does not appear or does not oppose the motion, the court shall order the parties to arbitrate; and

(2) If the refusing party opposes the motion, the court shall proceed summarily to decide the issue and order the parties to arbitrate unless it finds that there is no enforceable agreement to arbitrate.

(b) On motion of a person alleging that an arbitration proceeding has been initiated or threatened but that there is no agreement to arbitrate, the court shall proceed summarily to decide the issue. If the court finds that there is an enforceable agreement to arbitrate, it shall order the parties to arbitrate.

(c) If the court finds that there is no enforceable agreement, it shall not, pursuant to subsection (a) or (b), order the parties to arbitrate.

(d) The court shall not refuse to order arbitration because the claim subject to arbitration lacks merit or grounds for the claim have not been established.

(e) If a proceeding involving a claim referable to arbitration under an alleged agreement to arbitrate is pending in court, a motion under this section shall be made in that court. Otherwise a motion under this section shall be made in any court as provided in section 658A-27.

(f) If a party makes a motion to the court to order arbitration, the court on just terms shall stay any judicial proceeding that involves a claim alleged to be subject to the arbitration until the court renders a final decision under this section.

(g) If the court orders arbitration, the court on just terms shall stay any judicial proceeding that involves a claim subject to the arbitration. If a claim subject to the arbitration is severable, the court may limit the stay to that claim.

Arbitrations are heavily favored by Hawaii Courts. The Hawaii Supreme Court in Lee v Heftel explained the rationale behind this policy:

. . .[We] emphasize the importance of utilizing alternative methods of dispute resolution in an effort to reduce the growing number of cases that crowd our courts each year. This court has long recognized the strong public policy supporting Hawaii’s arbitration statutes as codified in HRS Chapter 658. We have stated that the proclaimed policy . . . is to encourage arbitration as a means of settling differences and thereby avoiding lititgation. Any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration. As with any contract, the parties’ intentions control, but those intentions are generously construed as to issues of arbitrability. The preeminent concern of Congress in passing the [Federal Arbitration] Act was to enforce private agreements into which parties had entered, [a concern which] requires that we rigorously enforce agreements to arbitrate.

Lee v. Heftel, 81 Hawaii 1,4 (1996)(no citations or brackets included).

For a discussion of our Arbitration and Mediation Practice, please click here.

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Civil Discovery in Hawaii

Friday, February 20th, 2009

In a lawsuit, Hawaii attorneys generally rely on two types of written discovery devices- interrogatories and document requests. Simply put, interrogatories are lists of questions that must be answered by the opposing party under oath. A discovery request lists categories of documents that must be produced for review by the opposing attorney. This blog will discuss each discovery device. A Hawaii party is required to timely respond to a Request for Answers to Interrogatories and to a Request for Production of Documents within thirty days after service of the request. If a party fails to respond to the discovery request within the thirty days, the party who served the discovery request may file a motion to compel answers to interrogatories or production. H.R.C.P. Rule 37(a)(2). However, under the Hawaii Model Rules of Professional Courtesy and Civility, Hawaii attorneys are required to “meet and confer” to attempt to solve any discovery issues before filing a motion to compel. If the “meet and confer” is unsuccessful, you may file a motion to compel. If the motion to compel is granted, the Court may award attorneys fees or costs (award the moving party’s expenses incurred in obtaining the order compelling answers to interrogatories or production, including attorneys’ fees, unless the court finds that the award of expenses would be unjust). Rule 37(a)(2) and (4), H.R.C.P.

Moreover, a “failure to serve objections to interrogatories and production of documents within the time period prescribed by the rule is a waiver of such objections.” Bohlin v. Brass Rail, 20 F.R.D. 224 (E.D. Pa. 1957); Davis v. Romney, 53 F.R.D. 247 (E.D. Pa. 1971); United States v. Acres of the Land, 66 F.R.D. 570 (E.D. Ill. 1975); Perry v. Golub, 74 F.R.D. 360 (N.D. Ala. 1976); Fretz v. Keltner, 109 F.R.D. 303 (D. Kan. 1986; Brock v. Grace, 110 F.R.D. 58 (D. N.J. 1986). Consequently, a party’s failure to respond within the thirty day period as prescribed by Rule 33, H.R.C.P., constitutes a waiver of any objections and all interrogatories must be answered in full and all documents requested must be produced.

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