354 P.3d 1160
Haw. Ct. App.2015Background
- The dispute involves family trusts that owned two rental properties; rental income was deposited into a single Mitsuo Trust bank account managed by successor co-trustees Neil and Owen Yoneji.
- Mary (Owen’s daughter) issued a $67,031.14 check from the Mitsuo Trust Account to Charlene (Owen’s wife) allegedly at Owen’s direction; Charlene endorsed it to Owen and Mary deposited it into an account Neil could not access.
- Plaintiffs (Neil as Successor Trustee and the Yoneji family trust) sued Mary and Charlene for conversion, unjust enrichment, conspiracy, constructive fraud, constructive trust, and prima facie tort, seeking recovery of trust funds.
- The court appointed a Special Master to audit the properties, determine co-owners’ interests, and calculate final accounting; the Special Master’s report was outstanding when defendant moved for summary judgment.
- The circuit court granted Charlene’s summary judgment motion, found plaintiffs’ claims frivolous, and awarded Charlene attorneys’ fees and costs; plaintiffs appealed.
- The appellate court vacated the summary judgment and fee award (except as to the prima facie tort claim), holding the MSJ was premature because it failed to show plaintiffs could not present proof once the Special Master’s report issued.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Conversion — whether Charlene wrongfully exercised dominion over trust funds | Yoneji: Charlene’s endorsement and redirection of funds deprived the trust and supports conversion | Charlene: No evidence she benefitted; moving party argued plaintiffs lack proof | Reversed: MSJ improper — Charlene failed to meet burden; Special Master’s pending report could produce triable issues |
| Unjust enrichment — whether Charlene retained an unjust benefit | Yoneji: Charlene received benefit from the diverted funds | Charlene: She did not keep, use, or benefit from the funds; plaintiffs have no evidence | Reversed: MSJ premature; defendant didn’t negate elements or show plaintiffs couldn’t prove benefit after Special Master report |
| Constructive fraud — whether a fiduciary/confidential breach supports claim | Yoneji: Charlene’s conduct breached trust/confidential relations and caused harm | Charlene: No fraud, no breach, no benefit; deposition and affidavit show no misuse | Reversed: MSJ failed — no affirmative negation of claim and unresolved fact issues remain |
| Conspiracy — whether plaintiffs alleged underlying actionable wrongs | Yoneji: Concerted action to divert funds supports conspiracy claim | Charlene: No underlying actionable torts; thus no conspiracy | Reversed: Because other tort claims cannot be resolved on MSJ, conspiracy survives pretrial challenge |
Key Cases Cited
- Querubin v. Thronas, 107 Hawai‘i 48, 109 P.3d 689 (Haw. 2005) (summary judgment standard and viewing evidence in the light most favorable to nonmovant)
- Ralston v. Yim, 129 Hawai‘i 46, 292 P.3d 1276 (Haw. 2013) (movant’s dual burdens: production and ultimate persuasion; cannot rely on nonmovant’s lack of record evidence where discovery is incomplete)
- Durette v. Plastic Recycling, Inc., 105 Hawai‘i 490, 100 P.3d 60 (Haw. 2004) (definition and elements of unjust enrichment and summary judgment principles)
- Freddy Nobriga Enterprises, Inc. v. State, Dep’t of Hawaiian Home Lands, 129 Hawai‘i 123, 295 P.3d 993 (Haw. App. 2013) (conversion does not require wrongful intent; knowledge and good faith generally irrelevant)
- Fries v. Federal Ins. Co., 78 Misc.2d 805, 355 N.Y.S.2d 741 (N.Y. Civ. Ct. 1974) (a recipient who deals with property inconsistent with the owner’s rights can be liable for conversion even without wrongful intent)