434 P.3d 1215
Haw. Ct. App.2018Background
- Lumford alleged her aunt Cindy Aoyagi conveyed a Waipahu house to Ota, retaining a life estate, in reliance on Ota's promise to hold the property for Aoyagi and later convey it to Lumford; deed was recorded.
- After Aoyagi's death, Ota reconveyed and later mortgaged and sold the property; Lumford alleges Ota retained rents, mortgage proceeds, and sale proceeds without accounting.
- Lumford sued asserting breach of fiduciary/confidential relationship and sought equitable relief (constructive trust, accounting) on an unjust enrichment theory; amended complaint alleged Aoyagi (third party), not Lumford, conferred the benefit on Ota.
- Ota moved to dismiss, arguing unjust enrichment requires a plaintiff to have directly conferred the benefit; the circuit court took judicial notice of related proceedings and granted dismissal/summary judgment on that basis.
- The circuit court denied Ota attorneys' fees under HRS § 607-14; Ota cross-appealed that denial.
- The Intermediate Court of Appeals vacated the judgment and remanded, holding that, in limited circumstances, a plaintiff may assert unjust enrichment when a third party conferred the benefit, but the plaintiff must allege a superior legal or equitable right to the asset.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether unjust enrichment claim is viable when benefit came from a third party | Lumford: she can sue because Aoyagi conveyed to Ota in reliance on Ota's promise benefiting Lumford later; Lumford has standing | Ota: unjust enrichment requires plaintiff directly bestowed benefit on defendant; Lumford lacks standing because she did not confer the benefit | Held: In limited circumstances yes; plaintiff may assert such a claim if she shows a superior legal or equitable right to the asset |
| Pleading sufficiency for unjust enrichment | Lumford: complaint sufficiently alleges promise, confidential relationship, and unjust enrichment remedied by constructive trust/accounting | Ota: complaint fails under 12(b)(6)/Rule 56 because no direct conferment alleged | Held: Dismissal was erroneous; court must evaluate whether plaintiff can allege/establish a clear legal entitlement or equitable priority to the disputed assets |
| Whether dismissal converted to summary judgment due to judicial notice of outside records | Lumford: dismissal should be evaluated under 12(b)(6) based on pleadings | Ota: court properly considered outside materials and ruled as Rule 56 summary judgment | Held: Because the court took judicial notice and did not exclude outside materials, appellate court treated the ruling as summary judgment and reviewed accordingly |
| Whether prevailing party fees under HRS § 607-14 were warranted | Lumford: action sought equitable relief, not assumpsit; fees not appropriate | Ota: prevailing party in nature of assumpsit; entitled to fees | Held: Premature to decide fees because dismissal was erroneous; remand required for further proceedings |
Key Cases Cited
- Durette v. Aloha Plastic Recycling, Inc., [citation="105 Hawai'i 490"] (Haw. 2004) (explaining unjust enrichment requires conferment of benefit and restitution to prevent injustice)
- Small v. Badenhop, 67 Haw. 626 (Haw. 1985) (describing unjust enrichment as a broad, equitable concept guiding restitution)
- Pavsek v. Sandvold, [citation="127 Hawai'i 390"] (Haw. App. 2012) (affirming dismissal where unjust enrichment allegations involved third-party benefits but no showing the plaintiff was entitled to those benefits)
- Kealoha v. Machado, [citation="131 Hawai'i 62"] (Haw. 2013) (standard for reviewing motions to dismiss: pleadings viewed in the light most favorable to plaintiff)