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Oral Argument Before the Hawaii Supreme Court–SCAP-15-912

No. SCAP-15-0000912, Thursday, December 15, 2016, 8:45 a.m.

LAURA GABRIEL, Petitioner/Plaintiff-Appellant/Cross-Appellee, vs. ISLAND PACIFIC ACADEMY, INC., a domestic nonprofit corporation, Respondent/Defendant-Appellee/Cross-Appellant; and JOHN DOES 1-10; JANE DOES 1-10; DOE CORPORATIONS 1-10; DOE PARTNERSHIPS 1-10; DOE UNINCORPORATED ORGANIZATIONS 1-10, and DOE GOVERNMENTAL AGENCIES 1-10, 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

Attorneys for Petitioner:

Elizabeth Jubin Fujiwara and Joseph T. Rosenbaum

Attorneys for Respondent:

Jeffrey S. Harris and John S. Mackey

NOTE: Order granting Application for Transfer, filed 07/21/16.

COURT: MER, CJ; PAN, SSM, RWP, and MDW, JJ.

[ Listen to the entire audio recording in mp3 format ]

Brief Description:

Former Island Pacific Academy (“IPA”) teacher Laura Gabriel filed suit against IPA. She alleged that IPA retaliated against her (for complaining of sexual harassment by her students) by declining to renew her employment contract for the 2014-2015 school year. An arbitration provision within the employment contract required the parties to submit disputes to an arbitrator “selected in accordance with the standard procedures of Dispute Prevention Hawaii.” The standard procedures of Dispute Prevention Hawaii require both parties to pay half of the deposit. IPA moved to compel arbitration. The Circuit Court of the First Circuit granted IPA’s motion, but it concluded that the requirement that each party pay half the deposit was substantively unconscionable, finding that Gabriel would have to pay over $10,000.00 to arbitrate her claim. The Circuit Court therefore conditioned arbitration upon IPA’s paying all fees and costs of the arbitration.

Gabriel appealed, arguing that the 2014-2015 employment contract was not entered into, as no consideration was given for it; therefore, IPA could not seek to enforce the arbitration provision contained therein. Assuming the arbitration provision governed the parties’ dispute, Gabriel nonetheless argued that its requirement that she split the cost of arbitration was procedurally and substantively unconscionable, and that the Circuit Court should have denied the motion to compel arbitration on that basis. She contends that the Circuit Court’s decision to compel arbitration conditioned upon IPA’s paying the arbitration costs was error, as the Circuit Court’s solution was to improperly rewrite the arbitration clause.

IPA cross-appealed the Circuit Court’s order granting its motion to compel arbitration. It argued that the Circuit Court should not have ordered it to pay all arbitration costs, because Gabriel had not carried her burden of proving what the arbitration costs would be, or that she was unable to pay such costs. IPA also asserted that the Circuit Court erred in denying its request for attorney’s fees and costs associated with bringing its motion to compel arbitration, because Gabriel’s arguments in opposition to the motion were frivolous.

This court accepted a transfer of this case from the Intermediate Court of Appeals.