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Oral Argument Before the Hawaii Supreme Court

No. SCWC-30485, Monday, November 24, 2014, 3:30 p.m.

CLARENCE O. FURUYA AND LONA LUM FURUYA, Petitioners-Respondents/Plaintiffs-Appellees/Cross-Appellants, vs. ASSOCIATION OF APARTMENT OWNERS OF PACIFIC MONARCH, INC.; JAMES DOZIER; GRETA WITHERS; ELWIN STEMIG; FOIL CRAVER; KAZUO SAWADA, Respondents-Petitioners/Defendants-Appellants/Cross-Appellees.

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-Respondents Furuyas:

George W. Van Buren, Robert G. Campbell, and John B. Shimizu

Attorneys for Respondents-Petitioners AOAO Pacific Monarch, et al.:

Matt A. Tsukazaki

NOTE: Order accepting Application for Writ of Certiorari (Furuyas), filed 08/13/14.

NOTE: Order accepting Application for Writ of Certiorari (AOAO Pacific Monarch, et al.), filed 09/11/14.

COURT: MER, C.J.; PAN, SSM, RWP, & MDW, JJ.

[ Listen to the entire audio recording in mp3 format ]

Brief Description:

The parties in this case both applied for applications for writ of certiorari. This case contains issues from both of these applications.

Clarence and Lona Lum Furuya (“Furuyas”) own a leasehold interest in Apartment Unit 3206 at the Pacific Monarch Condominium (“Condominium”) located in Waikiki. Pursuant to the original June 1, 1979 Pacific Monarch Condominium Conveyance Document (“Conveyance Document”) from the developer, Unit 3206 enjoys an exclusive easement to 106 parking stalls at the Condominium.

In 1995, facing the possibility of a decrease in the value of the units in the Condominium and a rent increase after the lease expired on the Condominium, AOAO’s Board sought to purchase the leased fee interest in the Condominium from the Lessor to offer the owners the opportunity to own their units in fee simple. AOAO successfully purchased the leased fee interest to all the units in the Condominium.

The application submitted by Clarence and Lona Lum Furuya (“Furuyas”) involves a contract dispute between the Furuyas and AOAO regarding the alleged contract between the Furuyas and AOAO for the leased fee interest in Unit 3206 and the appurtenant 106 stalls.

The Furuyas present the following questions on certiorari:

Did the Intermediate Court of Appeals (“ICA”) commit a grave error of law and/or rule in a manner that was obviously inconsistent with this Court’s decisions by:

(1) Misinterpreting the governing documents of the Association of Apartment Owners of Pacific Monarch (“AOAO”) contrary to the plain language and intent of the governing documents and the Hawaii statute so as to not require an AOAO that acquires the leased fee interest from the lessor to then offer it to the individual lessees;

(2) Ruling that the Furuyas had waived the admission by the AOAO that a contract (offer/acceptance) had been formed yet ruling in favor of the AOAO on an argument not earlier made, i.e., that the AOAO was not required to offer the fee to the Furuyas; and

(3) Affirming the Circuit Court’s incorrect rulings that the promissory estoppel claim failed based on alleged breaches of a written contract that the ICA and Circuit Court ruled was never even formed?

At issue in AOAO’s application is the lease payment schedule for Unit 3206’s exclusive easement to the 106 Parking Stalls appurtenant to the Unit 3206. In addition, AOAO’s application involves two of the 106 stalls, which AOAO used for laundry related facilities for the Condominium without payment to the Furuyas.

AOAO presents the following questions on certiorari:

1. Did the ICA commit grave error in holding that the Condominium Conveyance Document for Apartment Unit 3206 at the Pacific Monarch was unambiguous as to the developer’s intent that the owner of Apartment Unit 3206 was not obligated to pay lease rent for the 106 Parking Stalls after April 26, 2014 despite the owner’s continued use and generation of income from the stalls for the remaining 40 years of the ground lease?

2. Did the ICA commit grave error in holding that Hawaii Revised Statute ‘ 514C-22(c) did not create an independent obligation for the payment of lease rent to the lessor (i.e., the Association)?

3. Did the ICA commit grave error in substituting its discretion for that of the Trial Court which held that the knowledge of the Furuyas for more than 21 years along with the investment in, and reasonable reliance by the Association on, the assigned use of two (2) parking stalls to the laundry facilities meant that the Furuyas’ loss of income form the use of the wo stalls from the date of the filing of the Complaint was not unjust?