Oral Argument Before the Hawaii Supreme Court–No. SCWC-16-0000260
No. SCWC-16-0000260, Thursday, November 29, 2018, 8:45 a.m.
DONNA H. YAMAMOTO, an individual, Petitioner/Plaintiff-Appellant, vs. DAVID W.H. CHEE; TOM CHEE WATTS DEGELE-MATHEWS & YOSHIDA, LLP, Respondents/Defendants-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
Attorneys for Petitioner:
Michael M. Ching of Ching & Yamamoto LLP, and Cheryl Y. Arakaki of Arakaki & Eugenio LLLC
Attorney for Respondents:
Gary S. Miyamoto of Chong, Nishimoto, Sia, Nakamura & Goya
NOTE: Order accepting Application for Writ of Certiorari, filed 08/22/18.
COURT: MER, C.J., PAN, SSM, RWP, and MDW, JJ.
This case concerns whether Petitioner/Plaintiff-Appellant Donna H. Yamamoto (“Yamamoto”) is required to arbitrate claims for conversion, fraudulent conversion, and punitive damages, which she filed on August 27, 2015, in the Circuit Court of the First Circuit (“circuit court”) against Respondents/Defendants-Appellees Tom Chee Watts Degele-Mathews & Yoshida, LLP, a law partnership in which she had formerly been a founding partner (the “Law Firm” or “Partnership”) and Law Firm Partner David W.H. Chee (“Chee”)(collectively, “Defendants”).
In summary, Yamamoto alleged that after leaving the Partnership she handed Chee a personal check made payable to the Law Firm to repay a 401(k) loan, but that funds were instead used by Defendants for other non-authorized purposes. When Yamamoto learned that the 401(k) loan had already been repaid using funds from her Partnership capital account, she demanded that Defendants return the funds obtained from her personal check, but Defendants refused.
On December 16, 2015, Defendants moved to compel arbitration of Yamamoto’s claims (“Motion to Compel”). They asserted that the agreement founding the Partnership (the “Partnership Agreement”), signed by Yamamoto, required the arbitration of any disputes “in connection with” that agreement. The circuit court granted Defendants’ Motion to Compel binding arbitration of the claims in Yamamoto’s Complaint, concluding that Yamamoto’s claims “arise out of the [P]artnership [A]greement,” and that therefore the Partnership Agreement’s arbitration clause applied. Additionally, the circuit court concluded Defendants had provided appropriate notice to initiate the arbitration under Hawaii Revised Statutes (“HRS”) § 658A-9 (2016), even though Defendants’ January 12, 2016 letter, which Defendants asserted had provided notice pursuant to the statute, was sent nearly one month after Defendants filed their Motion to Compel, and one day after Yamamoto filed her response to the Motion.
The Intermediate Court of Appeals (“ICA”) affirmed the circuit court’s decision, concluding that Defendants provided adequate notice and that Yamamoto’s allegations “touch[ed] [the] matter” of the handling of her Partnership capital account, which was covered by the Partnership Agreement. Yamamoto asserts the ICA erred on both issues. Specifically, Yamamoto presents the following two questions in her certiorari application:
A. Whether the [ICA] used the wrong test and ignored precedent to determine the arbitrability of a dispute under an agreement?
B. Whether strict compliance with § 658A-9, HRS is required and if so, whether the statute is jurisdictional?
Corollary: Whether it is reversible error to allow a party, effectively, to give a proper § 658A-9, HRS notice after that party filed a motion to compel?