No. SCWC-29036, Monday, May 12, 2014, 8:45 a.m.

(Amended 03/28/14)

BENJAMIN PAUL KEKONA and TAMAE M. KEKONA, Petitioners/Plaintiffs-Appellees, vs. MICHAEL BORNEMANN, M.D., Respondent/Defendant-Appellant, and PAZ FENG ABASTILLAS, also known as PAZ A. RICHTER; ROBERT A. SMITH, personally; ROBERT A. SMITH, Attorney at Law, a Law Corporation; STANDARD MANAGEMENT, INC.; U.S. BANCORP MORTGAGE COMPANY, an Oregon company; Respondents/Defendants.

The above-captioned case has been set for argument on the merits at: 

Supreme Court Courtroom
Ali`iolani Hale, 2nd Floor
417 South King Street
Honolulu, HI 96813

Attorney for Petitioners/Plaintiffs-Appellees:

Fred Paul Benco

Attorney for Respondent/Defendant-Appellant:

Peter Van Name Esser

NOTE: Order accepting Application for Writ of Certiorari, filed 11/26/13.

NOTE: Certificate of Recusal, by Associate Justice Simeon R. Acoba, Jr., filed 01/06/14.

NOTE: Order assigning Circuit Court Judge Rom A. Trader in place of Acoba, J., recused, filed 01/31/14.

COURT: MER, CJ; PAN, SSM, & RWP, JJ; Circuit Court Judge Trader, in place of Acoba, J., recused.

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Brief Description:

Petitioners/Plaintiffs-Appellees Tamae and Benjamin Kekona (the Kekonas) have applied for a writ of certiorari from the Intermediate Court of Appeals’s (ICA) September 16, 2013 Judgment on Appeal filed pursuant to its May 31, 2013 Published Opinion (opinion). The opinion vacated the Circuit Court of the First Circuit’s (circuit court) final judgment.

This case arose in the aftermath of a 1993 civil trial that resulted in an approximately $191,000 judgment in favor of the Kekonas against Dr. Paz Abastillas (Abastillas), Robert Smith (Smith), and their corporation, Standard Management Inc. (SMI). Immediately following that trial, Abastillas and Smith transferred substantially all of their real and personal property to Dr. Michael Bornemann (Bornemann) to shield those assets from the Kekonas’ judgment.

The Kekonas filed suit against Abastillas, Smith, and Bornemann in the instant action, alleging that these conveyances were fraudulent. After various appeals and three jury trials, the Kekonas obtained a judgment against Bornemann in the amount of $253,075.29 in actual damages, and $1,641,857.13 in punitive damages. The punitive damage award was based on the jury’s determination that Bornemann participated in one fraudulent real estate conveyance. On appeal, the ICA held, among other things, that the punitive damages award violated Bornemann’s federal due process rights, and remanded the case with instructions that the circuit court offer the Kekonas the option of seeking a fourth trial or of accepting a remittitur that would reduce the punitive damages award to $250,000.

On application for writ of certiorari to this court the Kekonas argue that the ICA gravely erred in vacating the circuit court’s $1,642,857.13 punitive damages award against Bornemann and remitting those punitive damages down to $250,000.