Lambert v. Teisina
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Trustee alleged that Defendants owned an interest in a parcel of land and moved for summary judgment to partition their interest along with the remainder of the parcel. The circuit court granted summary judgment for partition, directed that the parcels be sold at a public auction, and ordered the sale proceeds to be distributed pursuant to court order. Defendants’ property was sold to Trustee at the public auction. The sale was confirmed to Trustee pursuant to a confirmation order. Defendants appealed from the confirmation order. The intermediate court of appeals (ICA) dismissed Defendants’ appeal for lack of jurisdiction because no final judgment had been entered in the case. The Supreme Court vacated the ICA’s dismissal order and remanded to the ICA for disposition of the appeal, holding that the confirmation order met the requirements of appealability under the doctrine announced in Forgay v. Conrad, which addresses the narrow relaxation of the finality rule for orders transferring property.
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Electronically Filed
Supreme Court
SCWC-12-0001024
10-JAN-2014
01:50 PM
IN THE SUPREME COURT OF THE STATE OF HAWAI#I
---o0o--HOVEY B. LAMBERT, TRUSTEE UNDER THAT HOVEY B. LAMBERT TRUST,
an unrecorded Revocable Living Trust Agreement dated
April 5, 2002, Respondent/Plaintiff-Appellee,
vs.
LESIELI TEISINA, Petitioner/Defendant-Appellant
and
PENISIMANI TEISINA, Petitioner/Intervenor-Appellant,
and
WAHA (K), et al., Defendants-Appellees.
SCWC-12-0001024
CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
(CAAP-12-0001024; CIV. NO. 09-1-2529)
JANUARY 10, 2014
NAKAYAMA, ACTING C.J., ACOBA, McKENNA, AND POLLACK, JJ., AND
CIRCUIT JUDGE LEE, IN PLACE OF RECKTENWALD, C.J., RECUSED
PER CURIUM
Petitioners/defendants-appellants Lesieli Teisina and
Penisimani Teisina (collectively, “the Teisinas”) apply for
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certiorari review of the Intermediate Court of Appeals’ (“ICA”)
dismissal of their appeal from the “Order Granting Plaintiff’s
Motion to Allow Overbidding, to Confirm Sale, to Account for and
Direct Reimbursement of Expenses and Attorneys’ Fees and to
Disburse Net Proceeds” (“Confirmation Order”) for lack of
jurisdiction.
The Teisinas contend that the ICA has jurisdiction
over the appeal because the Confirmation Order qualifies as a
final, appealable order in the absence of a final judgment under
the exception announced in Forgay v. Conrad, 47 U.S. 201 (1848).
Respondent/plaintiff-appellee Hovey B. Lambert, Trustee Under the
Hovey B. Lambert Trust (“Trustee Lambert”) argues that the ICA
correctly dismissed the appeal for lack of jurisdiction because
no final judgment has been entered in the case, and the
Confirmation Order does not satisfy any of the exceptions to the
final judgment requirement for appeals.
We conclude that the Confirmation Order qualifies as a
final, appealable order under the Forgay doctrine, and may be
immediately reviewed on appeal in the absence of a final
judgment.
Accordingly, we vacate the dismissal order and remand
the matter to the ICA for disposition of the appeal on the
merits.
I.
A.
Background
Brief Factual History
The Lambert family owned a substantial portion of two
2
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parcels of land located in Laie, Hawai#i -- Parcel 331 and the
Kuleana parcel.2
Peter K. Lua (“Lua”) owned a small portion of
Parcel 33.
In 1991, Lua sold 10,000 square feet of Parcel 33 to
the Teisinas and the Teisinas built what is now a 5,800 square
feet, three-story home valued at approximately $393,200.00.
The
Teisinas have always lived in their home and at some point rented
out some of the rooms.
The Teisinas later conveyed a small
portion of their interest in Parcel 33 to the Fa family.3
B.
Brief Procedural History
1.
Summary
The Teisinas property was sold to Trustee Lambert in
1
“Parcel 33” is identified as Tax Map Key No. (1) 5-5-001-033 and
described as:
All of that certain parcel of land (being portion of
the land(s) described in and covered by Royal Patent
Number 7494, Land Commission Award Number 8559-B,
Apana 36 to William C. Lunalilo)) situate, lying and
being at Laie, Koolauloa, Island of Oahu, City and
County of Honolulu, State of Hawaii[.]
2
The “Kuleana parcel” is identified as Tax Map Key No. (1) 5-5-001-035
and described as:
All of that certain parcel of land (being all of the
land(s) described in and covered by Royal Patent
Number 1303, Land Commission Award Number 3741, Apana
4 to Waha) situate, lying and being at Laie,
Koolauloa, Island of Oahu, City and County of
Honolulu, State of Hawaii[.]
3
Based on the information presented in the record, it appears that
Mr. Teisina conveyed a portion of his interest in Parcel 33 to the Fa Family.
Ms. Teisina did not sign the conveyance document.
3
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the underlying partition sale.4
The sale was confirmed to
Trustee Lambert pursuant to the Confirmation Order.
The Teisinas
appealed from the Confirmation Order, but the ICA dismissed the
appeal for lack of jurisdiction because no final judgment was
entered in the case.
The Teisinas applied for certiorari review
of the ICA’s dismissal order, which we accepted.
2.
Relevant Procedural History - Circuit Court
Trustee Lambert alleged that the Teisinas owned 3/5824
interest (less than 10,000 square feet) in Parcel 33 and moved
for summary judgment to partition their interest along with the
remainder of Parcel 33 as well as the Kuleana parcel.
The
Teisinas opposed summary judgment on the ground that they owned a
larger portion of Parcel 33 (10,000 square feet).
The circuit
court granted summary judgment for partition, appointed a
commissioner to sell the parcels at a public auction, and ordered
the sale proceeds to be distributed pursuant to court order.
The
court’s decision was memorialized in the “Order Granting
Plaintiff’s Motion for Summary Judgment Regarding Partition and
Title, Filed April 26, 2010”, filed on June 20, 2011 (“Summary
Judgment Order”).
The Summary Judgment Order authorized Trustee
Lambert and any party holding a 10% or greater interest in the
4
This was the second partition action filed by the Lambert family. In
1996, the Lambert family sought to partition Parcel 33 and the adjoining
Kuleana parcel (Civil No. 96-0859-03) but failed to prosecute their lawsuit
following an appeal from a default judgment, see Lambert v. Lua, 92 Hawai#i
228, 990 P.2d 126 (1999), and the case was dismissed.
4
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respective parcels to credit bid5 at the auction.
The Teisinas’
3/5824 interest in Parcel 33 was less than a 10% interest.
The circuit court stayed the sale for a short time.
Trustee Lambert successfully moved to dissolve the stay.
At that
time, the court affirmatively declared that the Teisinas owned
the home they built on Parcel 33 and that they were free to
remove or abandon the home.
The court also ordered the
commissioner to turn over to the Teisinas any monies he collected
from the tenants residing at the Teisinas’ house.
The Teisinas later moved the court to include their
house in the partition sale and requested an evidentiary hearing
to establish the enhancement value of their house before the
auction could take place.
The circuit court included the house
in the partition sale but declined to hold an evidentiary hearing
on the enhancement value.
The circuit court also denied the Teisinas request to
allow them to use the enhancement value of their house, which
their expert valued at $393,200.00, in lieu of a supersedeas bond
for any future stay requests and to allow them to use the value
to bid at the auction.
5
A “credit bid” is a bid up to an amount equal to the unpaid principal
and interest of a debt, together with costs, fees, and other expenses, without
tendering cash. See generally First Commercial Mortg. Co. v. Reece, 89 Cal.
App. 4th 731, 737 (Cal. Ct. App. 2d Dist. 2001) (“The purpose of [a credit
bid] is to avoid the inefficiency of requiring the lender to tender cash which
would only be immediately returned to it.”).
5
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When the Teisinas appealed the summary judgment order
and several interlocutory orders (CAAP-12-0000529), the circuit
court conditioned a stay upon the posting of a $400,000.00 bond.
The Teisinas were unable to post a bond and the appeal was
eventually dismissed for lack of appellate jurisdiction.
The public auction took place on June 5, 2012.
There
were two bids for Parcel 33 –- a $400,000 bid to include the
Teisinas’ house and a $425,000 bid from Trustee Lambert not to
include the Teisinas’ house.
On October 25, 2012, the circuit court confirmed the
sale.
The Confirmation Order states that “the Teisinas’ house on
Parcel 33 contributed $150,000 in value to the confirmed purchase
price of $425,000” and, therefore, “it is appropriate that the
Teisinas’ house bear 150/425ths of the fees and costs incurred in
this partition as attributed to Parcel 33[.]”
After payment of
the respective percentage of the commissioner’s fees and expenses
($12,336.52), Trustee Lambert’s attorneys’ fees ($180,000.00) and
costs ($4,100.97), and Parcel 33’s real property taxes
($44,914.26), the Teisinas were awarded $71,750.126 to be
distributed when they surrendered their house.
6
The circuit court
The Teisinas’ share of the sale proceeds was calculated as follows:
Share
Share
Share
Share
of Gross Proceeds ($425,000)
of Commissioner’s Fees/Costs
of Property Taxes
of Trustee Lambert’s Fees/Costs
NET DISTRIBUTION
6
$
($
($
($
$
150,000.00
3,918.66)
15,852.09)
58,479.13)
71,750.12
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ordered the sale to close by November 25, 2012, unless extended,
and “retain[ed] jurisdiction, as needed to assure the orderly
transition of Parcel 33 and to make any adjustments to the
distribution to the Teisinas as may be warranted if there is
noncompliance or delay in [peacefully surrendering their house].”
In all respects, the Confirmation Order effectively terminated
the Teisinas’ rights to the property.
Final judgment as to Parcel 33 has not been entered.7
3.
The Appeal
On November 20, 2012, the Teisinas appealed from the
Confirmation Order.
After the opening brief was filed but before
the answering and reply briefs were filed, the ICA dismissed the
appeal for lack of jurisdiction because a final judgment was not
entered in the case.
The Teisinas moved for reconsideration of
the ICA’s dismissal order, which the ICA denied.
4.
The Application for a Writ of Certiorari
On June 12, 2013, the Teisinas timely filed an
application for a writ of certiorari to review the ICA’s “Order
Dismissing Appeal for Lack of Appellate Jurisdiction”, filed on
May 16, 2013 (“Dismissal Order”) and the ICA’s May 29, 2013 order
denying their motion for reconsideration.
We accepted the
certiorari application and directed the parties to file
supplemental briefs addressing the applicability of the Forgay
7
Final judgment as to the Kuleana parcel was entered on August 27,
2013.
7
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doctrine to an order confirming a partition sale.
The parties
timely responded.
The Teisinas argue that the Forgay doctrine is
applicable to the Confirmation Order because they will suffer
irreparable injury once the court-ordered transfer of Parcel 33
to Trustee Lambert is completed.
Trustee Lambert argues that the
Forgay doctrine is not binding on Hawai#i courts and that its
application to an order confirming a partition sale would
liberalize the interpretation of Hawai#i’s appellate jurisdiction
statute thereby increasing the likelihood of multiple appeals
from the same case.
He maintains that a writ of possession has
not been issued against the Teisinas and that any irreparable
injury or immediate loss of property is a result of the Teisinas’
decision to include their house in the partition sale.
II.
Discussion
Disposition of this certiorari application is limited
to a single question -- Does the ICA have jurisdiction to
entertain the appeal in this case?
To answer this question, we
must determine whether an order confirming a partition sale is
appealable as a final order in the absence of Hawai#i Rules of
Civil Procedure (“HRCP”) Rule 54(b) certification.
We conclude
that the Confirmation Order meets the requirements of
appealability under the Forgay doctrine, and therefore, may be
immediately reviewed as an appealable final order.
8
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A.
The Separate Judgment Requirement
Hawai#i Revised Statutes (“HRS”) § 641-1(a) (Supp.
2012) authorizes appeals in civil cases from final judgments,
orders, or decrees.
Such appeals “shall be taken in the manner .
. . provided by the rules of court.”
HRS § 641-1(c)) (1993).
Consistent with HRS § 641-1(c)’s directive, HRCP Rule 58 was
promulgated and specifically requires that “[e]very judgment
shall be set forth on a separate document.”
Based on this
requirement, the supreme court has held that “[a]n appeal may be
taken . . . only after the order[] ha[s] been reduced to a
judgment and the judgment has been entered in favor of and
against the appropriate parties pursuant to HRCP [Rule] 58[.]”
Jenkins v. Cades Schutte Fleming & Wright, 76 Hawai#i 115, 119,
869 P.2d 1334, 1338 (1994).
The separate judgment must “either
resolve all claims against all parties or contain the finding
necessary for certification under HRCP [Rule] 54(b).”
76 Hawai#i at 119, 869 P.2d at 1338.
Jenkins,
“An appeal from an order
that is not reduced to a judgment in favor or against the party
by the time the record [on appeal] is filed in the supreme court
will be dismissed.”
Id. at 120, 869 P.2d at 1339 (footnote
omitted).
B.
The Forgay Doctrine Exception to the Separate Judgment
Requirement
There are several exceptions to the separate judgment
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requirement.8
One recognized exception is the Forgay doctrine.
This doctrine, which is sometimes referred to as the hardship and
irreparable injury exception to the final judgment requirement,
was established by the United States Supreme Court in Forgay v.
Conrad, 47 U.S. 201 (1848),9 and adopted by this court in dictum
in Ciesla.10
Although narrow in scope and limited in use, the
Forgay doctrine permits a direct appeal from a non-final,
interlocutory order or decree that commands the immediate
transfer of property, where the losing party will be subjected to
undue hardship and irreparable injury if appellate review must
wait until the final outcome of the litigation.
See Ciesla, 78
Hawai#i at 20, 889 P.2d at 704; Bank of Hawai#i v. Davis Radio
Sales & Serv., Inc., 6 Haw. App. 469, 475 n.10, 727 P.2d 419, 424
n.10 (1986); Penn v. Transportation Lease Hawai#i, Ltd., 2 Haw.
8
Exceptions to the separate, final judgment requirement include the
Forgay doctrine, the collateral order doctrine, and HRS § 641–1(b) (1993).
See Ciesla v. Reddish, 78 Hawai#i 18, 20, 889 P.2d 702, 704 (1995) (discussing
the two requirements for appealability under the Forgay doctrine); Abrams v.
Cades, Schutte, Fleming & Wright, 88 Hawai#i 319, 322, 966 P.2d 631, 634
(1998) (discussing the three requirements for appealability under the
collateral order doctrine); HRS § 641–1(b) (setting forth the requirements for
an appeal from an interlocutory order).
9
In Forgay, the United States Supreme Court held that an order
providing for the immediate delivery to an assignee in bankruptcy of property
that had previously been conveyed to the bankrupt was appealable even though
the underlying case was to continue for an accounting. The court held that
the order was appealable because it directed the immediate delivery of
property and threatened irreparable hardship to the appellant. The order was
found final, in itself, even though the case was not fully resolved.
10
In Ciesla, the court dismissed the appeal as untimely but went on in
dictum to note that the judgment for possession being appealed, which was
accompanied by a writ of possession, would have been immediately appealable
under the Forgay doctrine.
10
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App. 272, 630 P.2d 646 (1981).
The Forgay doctrine is therefore
an appropriate exception to the final judgment requirement in
light of the consequences of an order or decree requiring an
immediate change in the ownership or possession of real property.
C.
The October 25, 2012 Confirmation Order is Appealable
Under the Forgay Doctrine
We now turn to our original inquiry -- Whether the
October 25, 2012 Confirmation Order is appealable as a final
order in the absence of Rule 54(b) certification?
Foreclosure decrees, writs of possession, and orders
for the sale of specific property are examples of orders and
decrees that this Court has held to be appealable under the
Forgay doctrine.
See, e.g., Waimanalo Village Residents’ Corp.
v. Young, 87 Hawai#i 353, 363 n.7, 956 P.2d 1285, 1295 n.7 (1998)
(judgment for possession, accompanied by writ of possession, was
appealable under Forgay doctrine); International Sav. & Loan
Ass’n v. Woods, 69 Haw. 11, 16, 731 P.2d 151, 154-55 (1987)
(decree foreclosing mortgage and ordering sale of property was
appealable under the Forgay doctrine because the appellants would
be subjected to irreparable injury if their condominium apartment
was sold before the foreclosure decree could be reviewed).
This
court, therefore, has traditionally permitted appeals of nonfinal, interlocutory orders that command the immediate transfer
of property.
Thus, a partition confirmation order that
effectively terminates property rights is similarly appealable
11
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under the Forgay doctrine.
We recognize, however, that no Hawai#i case law has
specifically addressed the applicability of the Forgay doctrine
to an order confirming a partition sale and directing
distribution of the sale proceeds -- like the order at issue in
this appeal.11
We, therefore, look to cases from other
jurisdictions for guidance.
See Sierra Club v. Department of
Transp., State of Hawai#i, 120 Hawai#i 181, 200-03, 202 P.3d 1226,
1245-48 (2009) (the court can look to other jurisdictions for
assistance); County of Hawai#i v. C & J Coupe Family Ltd. P’ship,
119 Hawai#i 352, 369, 198 P.3d 615, 632 (2008) (opinions on an
issue from other jurisdictions were useful where no Hawai#i case
addressed the issue).
There are a number of jurisdictions that have addressed
the appealability of a partition decree or confirmation order in
the absence of a final judgment, but the holdings in those cases
are based upon the statute or case law of the specific
jurisdiction.
The Ninth Circuit’s analysis and application of
the Forgay doctrine to a partition decree in Sekaquaptewa v.
MacDonald, 575 F.2d 239 (9th Cir. 1978), however, is helpful to
our present jurisdictional query and supports this court’s
conclusion that an order confirming a partition sale is
11
Hawai#i’s case law has established that an order appointing a
commissioner and directing a partition sale (e.g., a partition decree) is an
interlocutory order that is not appealable unless allowed by the trial judge.
See Cooke Trust Co., Ltd. v. Ho, 43 Haw. 243 (Terr. 1959).
12
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appealable under the Forgay doctrine.
There, the Ninth Circuit
inquired as to whether it had jurisdiction to review an appeal of
a partition judgment, which ordered a partition sale that would
effectively transfer separate possession from one party to
another and use of lands previously held jointly.
575 F.2d at 241-42.
Sekaquaptewa,
Recognizing the pragmatic construction given
to the finality requirement, the court addressed the narrow
relaxation of the finality rule for orders transferring property
announced in Forgay v. Conrad and concluded that even though the
partition judgment did not direct the immediate delivery of
property, the order had the effect of depriving one group of
property owners of property they previously occupied and,
therefore, the hardship of relocation would be exacerbated by a
refusal to undertake immediate review.
Id. at 243.
The court
determined that the partition judgment was sufficiently “final”
to be appealable.
Id.
Here, the October 25, 2012 Confirmation Order meets the
requirements of appealability under the Forgay doctrine.
Although the October 25, 2012 Confirmation Order does not command
the immediate execution of the property to Trustee Lambert, the
order confirms the sale to Trustee Lambert, directs the
commissioner to convey the property to Trustee Lambert, and
orders the Teisinas to surrender the property within 30 days of
the conveyance.
The Confirmation Order effectively terminates
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the Teisinas’ rights to the property and they will suffer
irreparable injury if appellate review is postponed until final
judgment.
III.
Conclusion
Based on the foregoing, the ICA’s May 16, 2013
Dismissal Order is vacated and the matter is remanded to the ICA
for disposition of the appeal.12
R. Steven Geshell for
petitioners
/s/ Paula A. Nakayama
/s/ Simeon R. Acoba, Jr.
Philip J. Leas, W. Keoni
Schultz and Lori K. Amano for
respondent
/s/ Sabrina S. McKenna
/s/ Richard W. Pollack
/s/ Randal K.O. Lee
12
The certiorari application also seeks review of the ICA’s May 29,
2013 order denying the Teisinas’ motion for reconsideration, which is not
reviewable by this court by application for writ of certiorari. Cf. HRS §
602-59(a) (application for writ of certiorari must be filed within a specified
time after the filing of the ICA’s judgment or dismissal order); HRAP 40.1(a)
(same).
14
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