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Oral Argument Before the Hawaii Supreme Court — No. SCWC-16-000167

No. SCWC-16-000167, Thursday, June 24, 2021, 2 p.m.

BERNET CARVALHO, Individually, and as Personal Representative of the Estate of Royden Kalavi, Deceased, Petitioner/Plaintiff-Appellant, vs. AIG HAWAII INSURANCE COMPANY, INC., HAWAII INSURANCE CONSULTANTS, LTD., Respondents/Defendants-Appellees.

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

The oral argument will be held remotely and will be livestreamed for public viewing via the Judiciary’s YouTube channel at YouTube.com/hawaiicourts.

Attorneys for Petitioner Carvalho:

Arthur Y. Park, Patricia Kim Park, John C. McLaren, and Travis A. Yu of Park & Park

Attorney for Respondent AIG:

Steven L. Goto of Chong, Nishimoto, Sia, Nakamura & Goya, LLLP

NOTE: Order accepting Application for Writ of Certiorari, filed 04/05/21.

COURT: Recktenwald, C.J., Nakayama, McKenna, Wilson, and Eddins, JJ.

[ Listen to the entire audio recording in mp3 format ]

Brief Description:

This case arises from a dispute regarding payment of uninsured motorist (“UM”) and underinsured motorist (“UIM”) benefits to Bernet Carvalho (“Carvalho”), individually, and as Personal Representative of the Estate of her son.

Carvalho filed a Complaint against AIG seeking a declaratory judgment for increased and stacked UM and UIM insurance coverage totaling $1.2 million under the AIG policy covering her son. The parties submitted to arbitration and award was issued, but the case remained dormant for many years before trial was set. Prior to trial, AIG sought to preclude evidence that it breached its duty to settle the underlying UM and UIM claim prior to the arbitration award. The circuit court granted AIG’s motion. Carvalho filed a motion seeking to amend her Complaint, which the circuit court denied due to undue delay. The circuit court also denied Carvalho’s Motion for Reconsideration. AIG filed a Motion for Summary Judgment (“MSJ”) which the circuit court granted.

The Intermediate Court of Appeals (“ICA”) vacated the circuit court’s Order Granting AIG’s MSJ, and remanded the case to the circuit court, but affirmed the circuit court’s Order Precluding Evidence, the Order Denying Motion to Amend Complaint, and the Order Denying Reconsideration.

Carvalho appeals the ICA’s decision to this court and raises the following points of error:

(1) Whether the ICA grievously erred in affirming use of an in limine motion to dispose of a substantive basis for recovery.

(2) Whether the ICA grievously erred in affirming under an abuse of discretion standard the Circuit Court’s determination that AIG’s delay in payment was not within the issues raised by the pleadings, where Petitioner had sought a declaration she was entitled to $1.2 million in benefits and AIG was on notice that it would need to defend its delay in payment.

(3) Whether the ICA grievously erred in holding that the Circuit Court had discretion to deny leave to amend even in the absence of a showing of bad faith or prejudice.