267 P.3d 683
Haw. App.2011Background
- DROA executed May 26, 2002; Minichino could not secure financing under the contingency and terminated, later purchasing a cheaper property on June 20, 2002.
- Low sued Minichino for breach of the DROA; circuit court compelled arbitration under the DROA terms.
- Arbitrator held Nov 3, 2006 hearing and May 7, 2007 award favored Low, finding Minichino breached and credit/communication failures occurred.
- Minichino moved to vacate the award (Aug 3, 2007) alleging fraud via Low’s perjured arbitration testimony and produced emails after arbitration.
- Evidence later located by Minichino included emails dated June 21–23, 2002; flood-damage issues were documented but not admitted at arbitration.
- Circuit Court denied the motion to vacate, confirmed the arbitration award, and judgment followed; Minichino timely appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether perjury constitutes fraud vacating an arbitration award. | Low contends fraud requires extrinsic fraud; perjury is insufficient. | Minichino argues perjury deprived the award of a fair hearing and warrants vacatur. | Yes; perjury can constitute fraud warranting vacatur under the statute. |
| Whether an evidentiary hearing was required given disputed facts. | Low asserts no material facts are in dispute and review is narrow. | Minichino shows prima facie fraud and material disputed facts; factual findings needed. | An evidentiary hearing and findings were required on remand. |
| Whether public policy warrants vacatur for perjury. | Public policy against fraud supports vacatur. | Public policy does not excuse vacatur when statutory fraud grounds exist. | Public policy ground inapplicable where fraud under HRS § 658A-23(a) exists. |
Key Cases Cited
- Bonar v. Dean Witter Reynolds, Inc., 835 F.2d 1378 (11th Cir.1988) (three-pronged Bonar test for vacatur in fraud cases)
- Seattle Packaging Corp. v. Barnard, 972 P.2d 577 (Wash.App.1999) (due diligence governs discoverability of fraud post-arbitration)
- Dogherra v. Safeway Stores, Inc., 679 F.2d 1297 (9th Cir.1982) (perjury can constitute fraud for vacatur purposes)
- Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F.3d 274 (5th Cir.2004) (discusses extrinsic/intrinsic fraud standards in vacatur context)