Matsuura v. EI Du Pont De Nemours and Co.

proba did Gitter review the records at the department.

tion

B. request

Defendant’s vacation

finding light dangerousness frivolous challeng-

of Defendant’s stance he is not

ing the court's decision commit him the Hospital. is stat- State Commitment

utorily premised danger on the Defendant

poses to others. himself See HRS and/or But,

§ 704-411. Defendant chal- neither

lenges the commitment nor most of the find-

ings regarding dangerousness. his

C.

Finally, finding Defendant claims that the actions, “but would [Marciel]’s she bodily injury suffered substantial and/or death,” supported by “was not the evi contrary,

dence[.]” On the there is substan supports

tial evidence in record that

finding. supra.

XIV. reasons, foregoing respectfully

For the I and, jurisdiction exercising jur-

dissent as to

isdiction, August I would affirm the

judgment grounds stated herein.

73 P.3d 687 MATSUURA, Individually

David and dba Nursery, Stephen

Orchid Isle Mat

suura, Individually and dba Hawaiian Farm, Plaintiffs-Appellees,

Dendrobium

E.I. DE DU PONT AND NEMOURS

COMPANY, Defendant-

Appellant.

No. of Hawai'i. Court

July (Kenneth Price, Okamoto, III T.

Warren Yamamoto, Marks, Robert A. Terence S. briefs), with him on the of Price Okamoto Honolulu; Lum, Stephens Himeno & and A. III, Clay, Bogan, F. James and C. Allen (also Garrett, briefs), Kilpatrick Jr. LLP, Atlanta, GA, vice, pro hac Stockton defendant-appellant E.I. duPont de Nemours Company. (San Francisco, CA), Stephen pro T. Cox (Carl vice; Osaki; LaGuire; H. Kris A. hac (Columbia, SC), and A. Camden Lewis with brief), plaintiffs-appellants him on the Stephen David and Matsuura.

MOON, C.J., LEVINSON, NAKAYAMA, RAMIL,1 JJ., ACOBA, J., concurring dissenting, separately. MOON, Opinion of the Court C.J. District for the United States Court (U.S. court), District of Hawai'i district presiding, Alan Honorable David Ezra certi- following questions of Hawai'i law to fied the court, Ap- pursuant to Hawai'i Rules of (HRAP) (2001):2 pellate Rule 13 Procedure law, is a immune 1. Under liability for civil based misconduct, party’s including on that fraud, engaged during prior litiga- proceedings? tion plaintiffs’ attorneys Where others have accused the defendant of fraud dishonesty during course of prior, litigation, related precluded thereafter as a matter of law Ramil, any proceeding argu- heard oral there is involved in before it a 1. Associate Justice who question concerning ment in this retired from the bench on the law of Hawai'i that is December 2002. See Hawai'i Revised Stat- determinative of the cause and that there is no (HRS) § utes 601-10. controlling precedent judi- in the Hawai'i clear decisions, Supreme cial the Hawai'i Court pertinent part: 2. HRAP Rule 13 states question by opin- answer the certified written appellate When a federal district ion. certifies to the Hawai'i Court bringing September a cause action for On the Matsuuras’ discovery pur- fraudulent inducement cases settle be- were consolidated they poses seventy cause should not have relied on other Hawai'i cases in- representations? volving the Defendant’s November Benlate. On Honorable Ronald Ibarra conducted hear- recognize Does Hawai'i law a civil ing plaintiffs’ seeking motion Alta the damages cause of action for for inten- results, previously pro- test which were negligent spoliation tional of ev- and/or duced DuPont. DuPont asserted that this idence? protected by data attorney was the work product privilege. plaintiffs alleged The I. BACKGROUND3 results, along Alta with test certain other documents, “smoking gun” were- evidence Litigation A. Benlate in Hawai'i that Benlate contained herbicides. The evi- plaintiffs On November David and subject discovery dence was various (collectively, Steven Matsuura the Matsuur- throughout motions in as), nurserymen, commercial filed suit cases as well as in other Benlate cases against du defendant E.I. Pont de country. Nemours around the (DuPont) Company & separate in two actions By May finally produced DuPont had in the Circuit Court of the Third Circuit.4 plaintiffs the Alta test to results those who Both alleged arising actions out of had not settled them cases. One such case Benlate, agricultural fungicide the use of case, was the Kawamata Farms which went DuPont, produced that was contaminated to trial in Judge June 1994 before Ibarra. herbicides, with damage which in resulted January Trial completed was 1995. Dur plants repre- and soil. Matsuuras trial, the Kawamata Farms plaintiffs Malone, by attorney sented Kevin who addi- utilized the test results had been with tionally represented similarly over situat- case, i.e., Ranch the Bush diming held plaintiffs in ed Hawai'i and Florida and in Alta test as results as well evidence from the country. filed cases across documents,” so-called “Keeler released in July In involving trial June the first Ben- which also showed that Benlate [hereinafter, Ranch ease] Bush late com have been contaminated with toxins. Columbus, the Kawamata Farms Ultimately, plaintiffs menced federal court Geor gia. prevailed Mi-. nearly Malone monitored this mil were awarded $10 According reference in his cases. in compensatory damages Benlate lion than more DuPont, Matsuuras, the Bush Kawamata during punitive damages. million in $14 Products, Agri Ranch ease: Farms v. United misrepresented critical test addition, performed Alta In Judge results Laboratories5 (Alta results) engaged test that demonstrated that Ibarra found that DuPont had herbicides; discovery respect with with Benlate was contaminated serious violations widespread imposed withheld contami evidence the disclosure of information and Benlate; payable nation of and withheld sanctions field tests million the State $1.5 Moreover, Id. demonstrating that Benlate was harmful to Hawai'i. after the verdict 16,1993, entered, August the Kawamata Farms plants. jury On while in was the Bush Ranch violations, deliberating, discovery case learned additional Bush Ranch they brought the court’s settled. attention background Nursery); primarily 3. The are derived Isle v. E.I. Du Pont de Nem facts Matsuura (certifi- Co., from the U.S. district certificate (Stephen court’s & ours Civil No. 92-501 Matsuura cate), "a which contains statement of Farm). and Hawaiian Dendrobium case, proceedings in tire a statement of facts showing the nature the cause .. . and the 5. Alta one of the few laboratories was laborato question circumstances arises,” of which the out ries, one, only capable performing if not the 13(b). required by HRAP Rule analysis sophisticated and water to deter soil Co., mine if Benlate was contaminated herbi Matsuura v. E.I. Du Pont de Nemours & [hereinafter, (David suflonylureas SUs]. Civil No. 92-508 Matsuura and cides known as Orchid Georgia legal precedents,” the abuse in pur via motion ous September 1995 August and and con imposed sanctions Procedure district Hawai'i Rules of Civil suant million; (1995).6 howev (HRCP) 60(b)(3) penalties totaling Id. Judge tempt $115 er, proce award was later overturned by, DuPont sanctioned Ibarra then further I, grounds. Bush Ranch F.Supp. alia, Kawamata Farms dural awarding inter and costs. Id. at 1557.8 attorneys’ plaintiffs then* fees judgment in appealed from DuPont Settlements Subse- The Matsuuras’ B. af

Kawamata Farms and this court quent Litigation verdict, million jury’s $1.5 firmed April Matsuuras executed On sanction, pursuant awarded and the sanctions DuPont, agreements with 60(b)(3). Id. affirming to HRCP Rule million, David Matsuura received $1 which court, that “DuPont com this court held trial $500,000. Stephen Matsuura received and discoveiy circuit court fraud mitted indicated, Alta test results previously As Farms, parties.” Kawamata and the other May in and the Keeler disclosed at 1097. We at in June 1994. On documents were released nature of DuPont’s characterized the further 23, 1994, the Matsuuras’ suits Novémber “unusual, unique “egregious” and an fraud as by stipulation. prejudice with were dismissed discovery unprecedented fraud example of words, agreements the settlement In other against the court.” Kawamata perpetrated Alta test results were executed before Farms, 86 948 P.2d at 1098.7 released, but the and documents were Keeler in of the Alta test results The disclosure until after stipulated dismissal was filed first the Kawamata Fawns trial was the time Ka finally disclosed the evidence was public. many made of these results were Fawns trial. wamata de Nemours & Co.— In re: E.I. du Pont 10, 1996,9approximately two Litigation, P.Supp. On December Benlate 1538- (M.D.Ga.1995) [hereinafter, of them claims and Bush Ranch years after the dismissal Fawns months after the Kawamata of this informa fifteen I]. Based on the disclosure motion for relief under plaintiffs in the Bush Ranch case tion, peti plaintiffs filed them 60(b)(3) discovery on based for HRCP Rule States District Court tioned United [hereinafter, fraud, complaint in Georgia the Matsuuras filed District of the Middle DuPont, alleging against court against U.S. district Georgia court] for sanctions district fraud, racketeering, process, inflic things, “Du abuse Finding, among DuPont. distress, tion of emotional interference most serious abuse” Pont’s conduct be the advantage, spoliation of prospective economic had and “the most seri the court ever seen 60(b)(3) Appeals provides pertinent part: for the 8. The United States Court 6. HRCP Rule [hereinafter, Circuit] Eleventh Eleventh Circuit just, and such terms as On motion awarded in Bush Ranch ruled that the sanctions legal party's relieve a or a the court and, therefore, punitive could not be I were order, judgment, representative from a final or satisfying requirements imposed without (whether proceeding ... fraud heretofore for process. & In re: E.I. Du Pont De Nemours due extrinsic), misrepre- Cir.1996), intrinsic or denominated sentations, (11th Litigation, 99 F.3d 363 Co. — Benlate an adverse or other misconduct of U.S. 118 S.Ct. rt. ce 139 L.Ed.2d 190 party. .. be made within a The motion shall (1997) [hereinafter, Bush Ranch time, (2), (1), remand, reasonable and for reasons II], ultimately ap court On the district (3) year judgment, matter, than one after tire not more resolving proved a civil settlement order, Bird, proceeding was entered or taken. required which DuPont and Alston and firm, payments totaling $11.25 mil law to make Bird, findings the trial court’s 7. This court cited F.3d v. Alston & lion. Matsuura dismissed, Cir.) (citation omitted), litigation practices (9th engaged DuPont in "abusive cert. Matsuura, engaged that "DuPont ... in bad faith” and Nemours and Co. v. E.I. duPont 120 S.Ct. 145 L.Ed.2d 659 and intentional misconduct abused U.S. fraud faith, judicial process. DuPont acted in bad wantonly oppressive reasons.” Kawama Farms, original complaint filed on 948 P.2d at 1099. was ta 9. The Matsuura’s findings and their first amended January based on December The trial court made these 31,1997. complaint convincing” was filed on evidence. "clear and evidence, punitive damages analytical based on Du that the Alta results test included alleged discovery findings, experts Pont’s which some would construe processes. Essentially, Mat- as evidence that Benlate was contaminated they by suuras claimed that were harmed with SUs. The Matsuuras claim that issues alleged conduct DuPont’s fraudulent because already have been decided they money would requested more Kaivamata and that Farms issue they refused settle had known about the decided Eleventh Circuit Bush counterclaim, data. concealed DuPont filed Ranch II.11 requesting damages pursuant to the clause in April responded On DuPont agreement the settlement indemnified filing any litigation by DuPont from two future “related or counter motions”: granted Judgment Pleadings Matsuuras. U.S. district “Motion for on judgment pleadings favor of Du All Litigation Plaintiffs’ Claims Based on Pont, ruling that (motion the Matsuuras’ claims were judgment plead-, Conduct” agree barred the terms of the settlement ings); Summary Judg- “Motion ment. Inability ment Based on Mat- Plaintiffs’ as a ter of Law to Establish Reasonable Reliance” appeal, States On the United Court of (motion summary judgment).12 for its [hereinafter, In Appeals the Ninth Circuit Matsuura, judgment motion for on Du- pleadings, the Circuit] Ninth reversed. at 1012.10 F.3d The Ninth Circuit Pont held asserts that all of Matsuuras’ the state (which governed under Delaware law the damages law and claims their federal RICO agreement), terms the settlement the re by litigation claims are the barred doctrine provision agreement in lease the settlement words, immunity. argues DuPont bar did not the Matsuuras’ fraud and other separate that it cannot in a tort be held liable claims. The case was remanded U.S. arising litiga- action for conduct from court, and district the filed a series of tion. DuPont further asserts that Hawai'i motions. separate recognize spolia- does not tort of 1, 2001, evidence, and, thus, any March Matsuuras tion On the filed a claims based Estoppel “Motion Collateral to Preclude on such a tort must be dismissed. Re-Litigating Previously Defendant summary Du- judgment, In its motion for Fraud, Adjudicated Discovery Findings of Pont asserts that reasonable reliance is Abuse, Withholding and Intentional of Evi and element of the Matsuuras’ fraud claim (motion Farms case” dence Kawamata unable, the Matsuuras are as a matter Therein, estoppel). for collateral the Matsu law, they reasonably to establish that relied preclude uras seek to DuPont from “re-liti Specifically, on DuPont’s conduct. following gating” issues: DuPont “knew, DuPont maintains that the Matsuuras fraudulently intentionally withheld the settlement, had the time of DuPont litigants; test Alta results from Benlate repeatedly extensively been accused intentionally that DuPont withheld the Keel- litigants; making inadequate discovery re- er documents from Benlate false and Shortly con- after the Circuit decided construe as evidence that Benlate 50DF was Ninth II, Supreme Court of Delaware addressed taminated with SUs.” Bush Ranch 99 F.3d (on issue certification from the Southern 365-66. District of Florida in a similar DuPont/Benlate case) essentially agreed with the Ninth Cir 12.Local for the United States Rules of Practice cuit, holding that claims for "settlement fraud” 7.9 District Court for the District of Hawai'i Rule releases, go despite forward could part: “Any provides pertinent motion by long damages reduced so original subject mo- related to the matter of the original See E.I. Du amount settlement. may responding togeth- party tion be filed Evergreen De v. Florida Pont Nemours & Co. party’s opposition er no- with tire be 1999). (Del. Foliage, 744 A.2d 457 hearing original date ticed for on the same as the motion, order, background provided motions would other- In the its section judge.” Circuit Alta data included be heard same "[tlhe Eleventh stated wise analytical findings experts some would II. DISCUSSION was embroiled sponses, and that DuPont contending that Du- proceedings motions and Liability Litigation Misconduct In- A. engaging in dis- engaged and was Pont had cluding Fraud fraud, suppression and covery destruc- stated, the first certified previously As evidence, alleged and other forms of tion of question asks: discovery.” According- dishonest conduct Law, Hawai'i is a immune Under that Matsuuras could ly, DuPont submits liability for civil based on “reasonably any repre- relied” on not have misconduct, fraud, including party’s by DuPont.13 sentations made litigation proceed- engaged during prior ings? 10, 2001, May than one week be- On less applied an absolute Hawai'i courts have motions, hearing on substantive fore the litigation privilege in defamation actions for a “Motion for Certification of DuPont filed writings that are material words and Court,” Questions to the Hawai'i judicial proceedings. Abas pertinent to certify court to requesting the U.S. district Kekona, tillas two coun- questions presented its related (noting that the Inter May hearing At a termotions. (ICA) Appeals affirmed the mediate Court that Ha- court determined the U.S. district of a libel action circuit court’s dismissal complaint applied to Matsuuras’ wai'i law attorney against an based “absolute (as law, ap- opposed to which had Delaware Carlsmith, immunity”); Ferry v. 23 Haw. plied to construction of the settlement (1917) (adopting privi absolute agreement) of the issues and that several by attorneys lege for communications made presented parties in this case raised judicial proceedings,” “in conduct of dis Therefore, law. novel issues of state greater infra); Hall v. detail cussed certify State, 274, 285, 1048, to court indicated its intention Haw.App. 7 756 P.2d (1988) deputy attorney parties (holding 1056 that a questions and ordered the these alleged defamatory general’s statements precise language of the regarding confer of his preparation made in of the defense questions to be certified. absolutely privileged); clients were McCar 20, 2001, court the U.S. district On June 45, 48, thy Yempuku, Haw.App. P.2d v. 5 678 requesting court to this filed certificate (1984) 11, (noting the Hawai'i Su questions supra. listed On answer the three adopted litiga preme has an absolute Court 2001, 28, an stat this court filed order privilege). June tion ing questions amena that the certified urges those DuPont this court to follow ordering, by court and ble to answer this jurisdictions expanded protec submit among things, litigation privilege tion to claims out of the 8, 2002, February this record and briefs. On actions.14 DuPont also side of defamation with Exotics Haw court consolidated this case argues allowing subsequent suits based Kona, (1) E.I. Nemours ai'i Inc. v. du Pont de runs upon prior litigation misconduct: Co., 24626, purposes of oral contrary policy against No. for liti and derivative (2) ignores finality April gation; 2002. the interest argument, which was heard on rely largely A on Flor ment under Florida law. See id. 1289-98. Both of DuPont’s motions 13. EvergreenFoliage interlocutory v. E.I. Du Pont De Nemours petition appeal ida decision of this Co., (S.D.Fla.2001) F.Supp.2d 1271 and currently pending the Eleventh Circuit. before I], [hereinafter, Evergreen another Ben Florida substantially fraud” similar late "settlement case Anderson, cites, alia, Silberg v. DuPont inter I, Evergreen to the one at bar. Florida Cal.Rptr. 786 P.2d 50 Cal.3d Court for the Southern United States District (1990); Byrne-Stevens Bruce v. & Assocs. 370-71 law, held under Florida District of Florida the doctrine of Inc., Eng’rs., 113 Wash.2d immunity litigation barred all (1989); Hughes Long, 242 F.3d 670-71 litigation claims based on con state law Middlebrooks, Mabie, Cir.2001); Levin, (3d granted judg duct. Id. at 1278-83. It further Mayes claims, Mitchell, Thomas, plaintiffs' P.A. v. United States & ment to DuPont Co., 1994). (Fla. finding matter that the were unable as a Fire Ins. 639 So.2d require reliance” law to meet lire "reasonable 60(b);15 judgments by indicated HRCP policies must first address the associated (3) and public pol threatens the privilege. fundamental with the icy favoring compromise disputes. candid, promoting objective, a. and (1) The Matsuuras maintain that: undistorted disclosure evidence expand litigation should not privi- actions; (2) lege beyond defamation under (U.S. Supreme The United States Court DuPont, authorities cited the misconduct Court) has underlying noted that alleged in the instant protected by case is not litigation privilege “public policy (3) privilege;16 this court should not requires paths which lead to the follow Judge the decision of Gold in Florida ascertainment of truth should be left as free

Evergreen I it because was based possible.” unobstructed as Briscoe v. interpretation erroneous of Florida law. The LaHue, 325, 333, 460 U.S. 103 S.Ct. concerns, Matsuuras also address ar- (1983) (citing Sumner, L.Ed.2d 96 Calkins guing allowing to be held liable (1860)). 13 Wis. The Court ex misconduct: reinforces the plained: integrity legal system; encourages apprehension A subsequent witness’s voluntary disputes; settlement of does damages liability might induce two forms encourage litigation; collateral en- First, of self-censorship. might witnesses just victims; compensation sures testify. be reluctant come forward discourages litigation practices. abusive And[,] stand, once a is on witness his testimony might be distorted the fear of Underlying Litigation Policies subsequent liability. within Even the con- Privilege oath[,] straints of may the witness’s there ways give be various an account or to scope any privilege is based opinion. state may These alternatives upon policy generally considerations. See be more or less detailed differ Ing, Blair v. emphasis certainty. A witness who Cades, Schutte, Abrams v. Flem might knows that he be forced to defend a Wright, & lawsuit, subsequent perhaps pay As noted the authorities damages, might be inclined -to shade his infra, policies discussed the interrelated as testimony in potential plaintiff, favor of the litigation privilege sociated the include: uncertainties, magnify and thus to de- (1) candid, promoting objective, the and un candid, prive objective, the finder of fact of (2) evidence; distorted of placing disclosure and undistorted evidence. the of testing upon burden the evidence the (3) trial; litigants Briscoe, (cit during avoiding 333, chilling the 460 U.S. 103 S.Ct. 1108 resulting Veder, effect from ing the threat of Immunity subse Absolute in Defama (4) quent litigation; reinforcing finality Proceedings, the of tion: Judicial 9 Colum. (5) judgments; limiting 463, (1909)); collateral attacks L.Rev. 470 Murphy see also v. upon judgments; Mathews, promoting zealous advo A.A. Group a Division CRS of cacy; discouraging Inc., litigation 671, 674, Engineers, abusive reh’g 841 S.W.2d practices; overruled, (Mo.1992). encouraging Thus, settlement. 841 S.W.2d 671 Therefore, in order to litigation privilege determine whether upon the the is based the as litigation privilege subsequent sumption should bar a exposing liability witnesses to proceeding collateral for civil presented based result distorted evidence misconduct, fi-aud, litigation including we finder of fact. cites, alia, Crockett, cite, alia, Ferry; DuPont inter Ellis v. 16. The 51 Matsuuras inter McCar 45, (1969); Engi Cohen, 232, Haw. 451 P.2d thy; 814 Associated Myers Haw.App. v. 5 687 P.2d Contractors, State, 187, neers & Inc. v. 58 Haw. 6, rev’d, 389, (1984); 67 Haw. 688 P.2d 1145 322, reh'g 567 P.2d 58 Haw. 568 Chuck, Haw.App. v. 1 Giuliani (1980); 620 P.2d 733 (1977); Ho, Ming P.2d 512 v. 45 Haw. 371 47(b)(2); § Cal. Civ.Code v. Jones Can Tech., Inc., Genesys P.2d 379 In re Data non, (11th Cir.1999). 1271 F.3d (2001). 18 P.3d 895 liability arising from privilege’s purpose pants of en from torts litigation The candid, during judicial pro communications made objective, and undistorted couraging places upon litigants ceedings, the law finder of fact to to better enable the evidence exposing during of burden of trial the bias truth is consistent with this uncover the falsity of witnesses and the of evidence.” Sil regarding the function court’s statements berg, Cal.Rptr. 786 P.2d courts as courts. We have described truth,” discovery of v. “forums for the State litigation privilege helps The ensure 405, 415, Haanio, 94 Hawai'i investigate parties diligently and test the Barton, (quoting People v. 12 Cal.4th timely Placing in a evidence manner. Cal.Rptr.2d testing burden evidence (1995)), perform and have stated that courts newly potentially subsequent limits claims of through sifting “two tasks: conflict essential is, or fraud and there- discovered evidence of the facts to discover where versions fore, policy encouraging also related lies, applying legal truth the correct finality judgments, discussed infra. principles to facts as found.” Office of However, withholding destroying evi- Breiner, Disciplinary Counsel policy plac- obviously frustrates dence (quoting testing ing the burden of the evidence Vincenti, 92 458 A.2d In re N.J. litigants. Clearly, parties cannot test (1983)). Thus, discouraging candid dis willfully wrongfully what withheld amount and witnesses reduces the closure Therefore, policy such does not them. quality available to the finder of of evidence limiting liability subsequent proceed- favor fact, ability thereby impairing the court's ings judgment fraud is after when uncovered conflicting through sift versions of the facts case has has been rendered been truth. to discover the settled and dismissed. Generally speaking, policy considerations avoiding chilling resulting e. effect limiting liability litigation miscon- favor subsequent litiga- the threat liability might the threat of duct because tion quantity quality reduce the evidence However, in of fact. available the finder important resolving Courts serve role alleged present the defendants are defining rights. conflicts and U.S. Su The fraudulently “[ojver to have distorted the evidence preme has observed Court prior proceeding. Clearly, presented in a centuries, society our has course of settled directly contrary to such misconduct is redressing civil as a means candid, objective, policy promoting grievances, resolving disputes, and vindicat Accord- undistorted disclosure evidence. ing lights means fail.” Zauderer when other limiting ingly, does not favor lia- Disciplinary Counsel Su Office bility subsequent proceeding in a where Ohio, preme Ct. U.S. allegation of fraud there is an committed 2265, 85 L.Ed.2d 652 S.Ct. prior proceeding. the “traditionally that it has Court has also noted protect that Due Process Clauses

held the testing placing b. the burden the litigants in civil who seek recourse the of litigants during courts, evidence the hoping protect to either as defendants trial plaintiffs attempting property them or as to grievances.” Logan v. redress Zimmerman Supreme Court has stated that The U.S. Co., 422, 429, 102 Brush 455 U.S. S.Ct. if truth-finding process is better served “the (1982). 71 265 with the L.Ed.2d Consistent testimony to the witness’s is submitted ‘the courts, recog important role of the we have judicial process so that the crucible of the importance meaningful to nized of access the it, factfinder consider after cross-exami- Co., Penney v. them. See Setala J.C. 97 nation, together with the evidence (2002). ” 484, 491, 40 893 P.3d to the truth lies.’ the case determine where Briscoe, purpose litigation privilege’s of en- 460 at 103 S.Ct. 1108. The U.S. part to way, immunizing partici- couraging witnesses take “[I]n another Stated

157 judicial prem proceedings discourage parties turning is based on the to from the courts subsequent liability ise that the threat an irreconcilable conflict exists. In where Briscoe, discourages participation. manner, 460 chilling resulting this the effect By protecting U.S. 103 S.Ct. 1108. subsequent litigation the hinders threat judicial during proceedings, communications courts, the access to undermines the litigation privilege the “litigants affords disputes resolving role in courts’ vindi- utmost witnesses the freedom of access to cating rights. importance Given the of ac- being the courts without fear of harassed courts, policy avoiding the cess to subsequently by derivative tort actions.” chilling resulting effect threat of Anderson, Silberg Cal.3d Cal. subsequent litigation generally favors limit- Rptr. (Cal.1990); see liability subsequent proceedings. Levin, Middlebrooks, Mabie, Thomas, also reinforcing finality judgments d. Mitchell, Mayes, and P.A. v. United States (Fla.1994) Co., Fire Ins. 639 So.2d allowing party DuPont notes that a to be [hereinafter, ]; Murphy, Levin S.W.2d subsequent held liable for civil recognized 674. Hawai'i courts have also proceeding litigation based misconduct subsequent the threat of af encouraging with conflicts finali fects access to the courts. the context of ty judgments. Although this court has prosecution, an action for malicious the ICA recognized general policy favoring finality noted: judgments, Montgom see Shimabuku open We do not wish the door to Co., ery Elevator being second lawsuit filed defendant (1995), it has also stated “a every plaintiff previous time the loses judgment or final order should reflect the lawsuit, folloived, suppose, rue by a third Magoon true merits the case.” v. Ma plaintiff laivsuit in the law- second if goon, Haw. suit loses that one and so on ad infiniti- In Magoon, party sought relief things urn. We think that one of division, property alleging from a final distinguishes society our citizen’s procured through final order was fraud. relative freedom of access to courts. interpretation Family Based on of Hawai'i preservation of that lies be- freedom 60(a) (HFCR) (b), Court Rules Rule against hind the American allow- basic rule jurisdic family court had held ing attorney’s fees to the successful tion to entertain the motion relief from litigation except provided where such is Magoon, final order. Haw. at statute, by agreement, precedent. rule or (citations omitted). Although P.2d at 86 respect adopt policy urged] To [the applicable present HFCR summary granting judgments in malicious Magoon this court’s observation in is note prosecution expose suits would be to worthy: original action 60(b)(3), precursors, like its HFCR expense pros- harassment and of malicious 60(b)(3) of the Federal Rules Civil Pro- person bringing ecution without the suits 60(b)(3) of cedure and Rule the Hawaii having any the second action basis his Procedure, Rules Civil codifies a well- claim of malice. This would to dis- tend finality recognized exception princi- courage resort to the court rvhere irrecon- ple; permit has it been “formulated cilable exists. conflict in which relief several the situations Brodie v. Hawaii Automotive Retail Gaso- outweigh for truth is the desire deemed Ass’n., Inc., 2 Haw.App. line Dealers finality.” value the 321, 600, (emphases 604 add- 4, ed), 598, Magoon, 70 Haw. 780 P.2d at grounds, 655 at 616 n. 86 rev’d on other 65 Haw. omitted). (1982).17 indicated, (citations Thus, As n. 4 P.2d 863 the ICA has brackets 60(b)(3), 6, supra liability subsequent proceedings tends to Rule see note re- HRCP Brodie, ap- judgment relating expressly the Haw. This court concurred “with thereto.” 65 pellate exposition governing 599, of the law court's P.2d at 655 summary prosecution malicious and motions for 158 judgment The word “collater- judgments or decree. preference for this court’s

fleets connection, al”, always finality judgments is used as in this on the merits over “direct”, through procured fraud. and it is there- the antithesis enough any indepen- to embrace fore wide 60(b) states, Additionally, HRCP proceeding. To constitute a direct dent power of a court not limit the “This rule does said, it upon judgment, a it is is attack independent an action relieve to entertain proceeding necessary that a be instituted order, proceed judgment, a or a purpose. appeal If is very for that judgment fraud ing, a or to set aside error, judgment, from a or writ of taken Federal Rules Civil upon the court.” The (FRCP) it provi if a is made to vacate or set contain a similar or motion Procedure sion, alleged irregular- interpreted to re on account of some which courts have aside direct, directly obviously any ity, limit attack a attack is 'the sole move fixed time upon object proceeding being deny the court. judgment based on of the Co., 1332, validity judg- 573 F.2d disprove apparent v. Ford Motor Rozier (5th denied, Cir.), reh’g F.2d 871 proceeding 578 1337-38 But that action or ment. if Bank, (1978); Manhattan Serzysko independent v. Chase purpose and contem- has (2d 699, Cir.), result, 701-02 cert. although 461 F.2d or plates some other relief L.Ed.2d 139 93 S.Ct. overturning judgment may 409 U.S. be (1972); Corp., success, v. 405 F.2d Wilkin Sunbeam necessary important or even to its (10th Cir.1968); v. Dausu Dausuel upon judgment then the attack is col- (D.C.Cir.1952). el, F.2d Based lateral and falls within the rule. authority in upon persuasive of federal Estate, Kapiolani Atcherly, Ltd. v. 14 Haw. FRCP, this court has terpretations of the (1902) (citations quotation and some one-year limitation indicated that omitted) (italics (under- original) marks 60(b) applicable not when HRCP Rule added). stated, previously As scored upon the court. In re fraud was committed present claims of Matsuuras’ action includes P.3d Genesys, 95 Hawai'i 37 n. fraud, racketeering, process, abuse of inflic- (2001); Hayashi Hayashi, n. 4 but see v. distress, tion of emotional interference Haw.App. 175-76 prospective advantage, spoliation of economic equity no (noting that there is relief evidence, Thus, punitive damages. remedy adequate movant “had an when the present purpose independent action has vacated, modi opened, or could have at law overturning judgment of the third circuit judgment, or obtained decree or fied the contemplates than that court and relief other original by exercising action relief Therefore, original sought in action. situation from proper diligence, or where the upon attack present action is collateral sought has caused which relief is been granted stipulated dismissal on November fault, neglect, own inadvertence movant’s 23,1994. carelessness”). Thus, available un the relief general has as “a 60(b) 60(b)(3) This court stated reflect Rules der HRCP rule, a collateral attack not be made preference judgments on merits judgment by a or order rendered finality judgments, especially over the jurisdiction. only If it competent court of judgments procured through such when question irregularity and not of of error Accordingly, allega is an fraud. when there jurisdiction, it cannot be raised on collateral fraud, reinforcing the tion Weeks, attack.” First Hawaiian Bank limiting finality judgments does not favor Haw. 398 772 P.2d liability subsequent proceeding. in a (brackets, citations, quotation and internal limiting attacks collateral e. omitted); Grindling, also marks see State judgments 31 P.3d 915 In re 4, 18 Genesys, 95 Hawai'i at 37 n. attempt to im- A attack is an collateral 4; Navigation De n. v. Federal proceed- Matson Co. judgment or in a peach a decree 270, 916 P.2d 680 posit Corp., Ins. express purpose instituted for the Smith, (1996); Cooper 70 Haw. 776 modifying annulling, correcting or such of

159 (1989). However, Mohr, P.2d 1178 HRCP 97 653 of (2001) 60(b) specifically pro (noting policy for of allows collateral this court not to ceedings allegation court-appointed attorneys when there is an sanction if fraud their court, arguments stating, appeal advocacy “This on rule does not reflect zealous clients). power However, limit the a court to on entertain behalf their as the independent noted, action to relieve a from a ICA has “there are limits to how far order, attorney judgment, proceeding, go in representing or to should set client; a judgment requirement aside for there fraud the court.” is also added.) Thus, (Emphasis policy zealously represented like fa clients be ‘within the ” voring finality judgments, policy Myers, Haw.App. bounds of the law.’ 5 at against Chuck, judgments (citing collateral attacks on P.2d 687 at 16 Giuliani limiting liability Haw.App. absolute and does not favor (1980)).

in proceeding Accordingly, upholding a collateral when there is an even cases allegation litigation that fraud in privilege appli was committed circumscribe its prior proceeding. example, cation. For the ICA has noted purpose litigation privilege of the towas

f. promoting advocacy zealous attorneys allow in freedom them efforts “to justice” McCarthy, for secure their clients. The ICA has noted purpose that one Haw.App. Similarly, at P.2d at 14. litigation privilege parties is to force the Supreme the Florida Court stated that' the trial, present arguments stating: them best at privilege was intended to allow privilege grounded The absolute on judgment” pursuing use of in their “best important public policy “securing Levin, them at claims. So.2d 608. Liti attorneys as officers of the court the ut- gation misconduct that to a amounts fraud most freedom them efforts secure directly pursuit the court conflicts with the justice for them clients.” Restatement justice and never results from reasonable Thus, only § pro- 586 comment a. it not Thus, judgment. policy advocate’s best attorneys pro- pursuit tects of them promoting advocacy zealous is counterba fession, public’s but also right ensures the punish adequately lanced the need to legal representation. to zealous Counter- discourage Consequently, such misconduct. this, however, balancing equally is the im- promoting advocacy zealous portant public policy protecting individu- limiting liability subsequent does not favor defamatory als from statements which are proceedings collateral fraud. judicial proceeding unrelated to the in- volved. g. discouraging litigation abusive

McCarthy, Haw.App. at 678 P.2d at 14. practices Similarly, the California Court has litigation privilege stated that “promotes argue The Matsuuras this court judicial proceedings by effectiveness should allow the defendants to be held liable encouraging attorneys zealously protect in subsequent, collateral action Silberg, them clients’ interests.” 266 Cal. litigation practices. abusive dissuade Other Rptr. partici- P.2d at 370. “Just as jurisdictions noted that other estab- pants engage must be free to remedies, sanctions, including lished communication, unhindered so too must those prosecutions, contempt proceedings, criminal participants judg- be free to use them best disciplinary against attorneys al- actions prosecuting defending ment a lawsuit ready discourage litigation serve miscon- having without fear of to defend their actions I, Evergreen duct. See Florida subsequent in a civil action for misconduct.” (citations Levin, omitted); F.Supp.2d at 1283 Levin, at 639 So.2d 608; Silberg, Cal.Rptr. So.2d Thus, court has This stated that “zealous advoca 786 P.2d at must 370-71. we examine necessary judicial cy component efficacy litiga- is a of our of established remedies Breiner, system.” allowing 89 Hawai'i at tion misconduct and the benefits 1289; Attorney’s proceeding see a subsequent, also In re Fees for fraud. collateral case, principal attorney discovery in this contempt, discipline, and orders Criminal litiga allegations conduct could not type of of fraudulent prosecution criminal deter through a civil con alleged in the case. have been addressed tion misconduct instant Thus, requirement However, tempt proceeding. of compensate of none these remedies unambiguous court order limits of such misconduct. Criminal a clear and the victims utility past contempt civil as a contempt punish used defiance means is “to injured by compensating parties com judicial authority, thereby fraud a court’s vindicat Leander, pi'ior proceedings. LeMay during litigation Haw ing v. mitted the court.” (2000) (em 546, 553 ai'i provide also a to The HRCP means added) (citation omitted). Regarding phasis injuries compensate parties for suffered discipline, attorney this court has stated litigation mo from misconduct. A successful provide a disciplinary proceedings do “not 60(b) parties tion under Rule allows HRCP to have complaining for means of redress one through judgment procured to vacate a attorney.” wronged personally been pursue compensation is fraud to Disciplinary Bd. the Hawai'i Akinaka v. the true value of them claims. consistent with Court, P.2d Hawai'i successfully reopening a Additionally, upon (citation quota internal 60(b) proceed through an HRCP Rule case omitted). Similarly, principal tion marks aggrieved may pursue ing, parties appropri goals penal system, as our declared relitigating in the ate sanctions course pun legislature in are deterrence Virgin Auth. them claim. See Islands Hous. Medeiros, ishment. State Cir.1987). (3d David, F.2d (citing Sen. Moreover, egregious based nature 51-86, Rep. No. 1986 Senate Conf. Comm. of DuPont’s fraud the Kawamata Farms 748). Thus, Journal, although at criminal case, this Rule court construed HRCP attorney contempt, discipline, and criminal 60(b)(3) attorneys’ to allow award of fees prosecution punish kind deter and to and costs as affirmative relief addition case, alleged in the instant misconduct judgment. order the relief afforded procedures not to primary goal of these is Farms, Hawai'i Ka wamata injured by compensate parties such miscon (“Under 948 P.2d at 1100 the circumstances duct. egregious based on nature fraud, DuPont’s we construe the so HRCP hand, procedures exist the other On remedy a under as not to disallow HRCP litigation compensate parties to miscon 60(b)(3) post-judgment a Rule when there is contempt proceeding duct. A civil allows discovery supported fraud clear litigation parties pursue compensation for to evidence.”). Thus, convincing the HRCP noted, As has in a misconduct. this court provide to com receive means contempt proceeding, civil “the sanction resulting litigation pensation miscon remedial, wholly only purposes serves duct. complainant, not as a and is intended against public.” deterrent offenses Although contempt civil both HRCP 994 P.2d at 553 LeMay, 60(b) party ag- provide remedies (citation omitted). However, maintain a misconduct, by litigation we grieved believe contempt, claim of successful civil not that the existence of these remedies does oblige solely must that: the or limit movant establish us to victims of remedies, given der with which the contemnor failed nature these established unambiguous; comply is clear and and effect of fraud. proof non-compliance and con clear encouraging h.

vincing; and contemnor has attempted comply in a reason diligently argues preventing DuPont manner. able being subsequent, held liable collat- conduct, proceeding at 557 includ- LeMay, 92 Hawai'i at eral omitted). fraud, (citation encourages Quoting for the settlement. We note but 152, 161-62, Odum, specific fact Amantiad v. the circuit entered (1999), son, support 169-71 in of its 226 Kan. (1979)). argument, Indeed, DuPont states: portion the of this court’s opinion by clearly omitted DuPont articulates acknowledge We the well-settled rule that disapproval the law’s of the law favors resolution settlements obtained the of controver Further, through through compromise sies fraud. as Ninth or settlement the Cir- by than litigation. rather Such cuit alternative has noted: only brings to court not finality finality on Insistence the of is settlements parties; the the but uncertainties is parties the assumption based on that the policy consistent this court’s to foster freely bargained exchange have the amicable, efficient, inexpensive and resolu costs, potential litiga- risks and rewards of turn, disputes. tions of In it is advanta certainty tion for the of a judicial geous to administration and thus to light seems fair in of facts known at the government and its citizens as whole. by time. Settlements induced are agree with policy We the and law of settle however, set aside because the defrauded ments which the of Arkan Court party freely bargained has not but has succinctly Ragland sas sets forth in by been induced to settle affirmative mis- Davis, 106-107, 301 Ark. 782 S.W.2d representations by party. the En- (citation omitted): forcing such a settlement would undermine should, do, they Courts and so far as can policy encouraging voluntary the settle- legally do so properly, support agree- disputes: litigants ment of if cannot as- object which ments have for their the ami- representations sume the disclosures rights by cable settlements of doubtful opposing party good of the in are made parties; agree- the consideration such faith, they will be reluctant to settle. valuable, only highly ments is not but mer- they promote peace, itorious. Because vol- Matsuura, 166 F.3d at is Settlement untary ... settlements must stand and be voluntary relinquishment right the to a the if parties enforced intended the to be Thus, determination of law. en final, notwithstanding the settlement made couraging parties forego protections the might not that which be the court would requires adequate with a associated trial as controversy if had decreed been appropriate surance that exist for remedies brought before it for decision. Such through settlements reached faith bad agreements binding regard without policy of Accordingly, misconduct. en gets party bargain best of couraging limiting settlements does favor all gain whether fact one side liability during engaged for fraud and all the sacrifice on the other. litigation proceedings. sum, eight policies underlying litigation privilege, avoiding Washington Supreme Court said it chilling threat resulting effect tersely: even more “The law favors settle- subsequent litigation clearly limiting favors consequently it must favor ments their finality.” liability subsequent proceedings. Howev- er, remaining policies promoting of: cited, However, excerpt from within the Du- candid, objective, and undistorted disclosure highlighted Pont omits this court's state- “ evidence; placing testing the burden of ment: is an rule that the law ‘It elemental trial; litigants during the evidence compromise and settlement dis- favors reinforcing finality judgments; limit- putes generally, absence bad ing judgments; promot- fraud, collateral attacks on into when enter faith advocacy; discouraging zealous abusive agreement adjusting dispute, settling and ” litigation practices; encouraging settle- party permitted repudiate neither it.’ Amantiad, poli- ment do not. With aforementioned P.2d at (italics mind, (underscored original)' emphasis we address first certi- cies now added) presented. (quoting Thomp- question fied Matter Estates Analysis argues Dupont that Hawaii law on fraud- requires plain- ulent inducement district court question The first tiffs be reasonable and reliance held asks can be liable whether jurisdictions that court should follow other upon misconduct civil based en- plain- hold a matter of law when during prior litigation proceedings. gaged involving allegations tiff claims of settles remedies, supra, existing Initially, as noted dishonesty against opposing coun- fraud or 60(b), a under HRCP Rule such as motion sel, subsequently plaintiff cannot claim the contempt proceedings, and sanctions allow party’s upon opposing the his reliance damages parties to held for civil be liable representations on was reasonable.18 Based However, upon litigation misconduct. based pleadings, alleges the Mat- DuPont that the question by requires the court district joined allegations suuras and monitored Hawaii law this court to consider whether engaged had DuPont fraudulent party a held allows to be liable litiga- underlying conduct in dishonest proceeding in a collateral such as misconduct allegations tion and that the of misconduct instant case. in the current case are identical to those history pi'esent The case dem Thus, litigation. underlying in the raised proceedings onstrates how collateral burden DuPont, according to the Matsuuras could protract litigation. resources not, law, reasonably a matter have However, (1) objective given the courts’ upon representations. DuPont’s Fur- relied (2) truth, uncovering injurious effect of ther, argues DuPont the Matsuuras ability fraud on to the evidence test express war- have written should demanded (3) judgments preference for presented, representations any as to matters ranties merits, (4) duty to this court’s discour they to critical to their decision considered litigation practices, and age abusive settle. settlement, encourage we conclude desire law Matsuuras contend that Hawaii (a) avoiding chilling that the interests only requires regardless actual reliance (b) litigation, reinforcing effect collateral alternative, its In the reasonableness. (c) finality judgments, limiting argue alleged Matsuuras because the judgments out collateral attacks are perpetrated of court fraud course weighed alleged. Accordingly, when fraud proceedings, where court rules and rules discussion, upon foregoing an based we they professional apply, had an “ab- conduct question as follows: swer first certified repre- right rely” upon solute DuPont’s law, party a is not immune Under Hawaii Du- and that their reliance on sentations liability upon for civil based discovery responses Pont’s was reasonable during prior party’s engaged per also that other se. The Matsuuras note litigation proceedings. jurisdictions have held the mere exis- not suf- relationship of distrustful tence B. Inducement Fraudulent preclude finding ficient to of reasonable question The second asks: reliance. plaintiffs’ attorneys and Where others fraud and accused the defendant of dishon- 1. The Fraudulent Induce- Elements of esty prior, during the course related ment litigation, preclud- plaintiffs thereafter Regarding fraudulent the elements of bringing ed as matter of law from inducement, 2’ecently this court stated: cause action fraudulent inducement suf- they not have To constitute fraudulent inducement settle because should contract, representations? the terms of a relied on the defendant’s ficient invalidate (11th Cir.1984); cites, alia, Mergens Dreyfoos, v. 722 F.2d 706 Dela 18. DuPont inter Metrocall of (11th Cir.), ware, Corp., F.3d 528 U.S. cert Va. v. Cellular Inc. Continental (1999); I, Finn 120 S.Ct 145 L.Ed.2d 55 Evergreen 437 S.E.2d 189 Florida Securities, Inc., v. 821 F.2d Prudential-Bache supra. 1987); (11th Danzig, v. Cir. Pettinelli representation that[,] there must be of a knowledged accepted principle “the fact, (2) material purpose made might where reasonable minds differ as to act, inducing party the other conduct, known the reasonableness of reasonably to be false but believed true question jury.” Price, Young is for the v. party, the other Haw. 317 n. 208 n. 10 relies and acts [his Thus, her] the answer to the second certi damage. question hinges fied on whether reasonable Community Hawaii Federal minds could Credit Union differ as to the reasonableness Keka, 18 of repre the Matsuuras’ reliance Hawai'i, (quoting DuPont, Pancakes spite Inc. sentations previ of them Properties Corp., Pomare ous accusations of fraud and dishonest con 97, 109 (other (App.1997) duct. omitted).... citations similarly, Put “[t]he general party’s rule is that a misrepre ‘[i]f prior allegations a. offraud sentation of by assent is induced either a stated; This court has fraudulent or a misrepresentation material appears it party Where that one has been by party upon the other recipi which the guilty of an intentional and deliberate justified ent relying, is contract fraud, which, by knowledge, to his ” by recipient.’ voidable Park v. Gov misled, party has been or influenced Co., Employees ernment Ins. 89 Hawai'i action, in his escape legal he cannot 394, 399, 34, (1999) 974 (quoting P.2d 39 consequences of by his fraudulent conduct (Second) Restatement Contracts of saying might the fraud have been 164(1)(1979)). § discovered had the whom he de- Au, Fujimoto v. 95 Hawai'i 19 P.3d diligence ceived exercised reasonable (2001). 699, However, 740 recognize we care. always our case law required has not 652, Kang 659, Harrington, 59 Haw. See, e.g.

reliance be Shoppe reasonable. (1978) 285, (quoting Cummins v. Inc., Gucci Am. 14 P.3d Cummins, 116, 122 (1917)). 24 Haw. Howev (2000) (listing elements er, Kang, plaintiffs only required fraud as representations false were made actual, reasonable, prove opposed defendants, knowledge of their Kang, reliance. 59 Haw. at 587 P.2d at (or falsity knowledge without of their truth jurisdictions 289. Other differ as to whether falsity), contemplation plaintiffs prior allegations preclude finding of fraud upon reliance representations, these false upon reasonable reliance. Decisions based (cita- plaintiff) actual reliance Florida law indicate that when the omitted). Thus, opportuni- tions we take this relationship in an have been adversarial law, ty clarify pre- under Hawai'i plaintiff allegations has made inducement, vail on a claim of fraudulent fraud, plaintiffs subsequently rely could not plaintiffs prove upon must that them reliance upon representations. the defendant’s Mer representations defendant’s was reason- 1118; Finn, gens, 166 F.3d at F.2d able. 586; Pettinelli, 722 F.2d appar at 710. The 2. Reasonable Reliance bright-line ent rule established these cases general principle ques justifi

“As a ... recognize exception do “not to the tion of reasonably whether one has acted able reliance rule where the inves tigations under the circumstances is for the trier were frustrated or thwarted Sport I, fact to determine.” Richardson v. Evergreen defendant’s conduct.” Florida (Waikiki Corp.), Shinko F.Supp.2d at 1295. The United States 880 P.2d (citing Appeal Knodle v. Courts of for the Second Circuit Hotel, Inc., Gateway Waikiki Virginia Supreme similarly 69 Haw. Court hold (1987); prior allegations against Bidar v. Am de Inc., fac, 552-53, Haw. preclude subsequent fendant reasonable reli (1983)). Additionally, upon representations. this court has ac ance the defendant’s (2d Cir.), regardless not the un- Schlesinger, 957 F.2d 78 true of whether or Finz v. allegation derlying dispute cert. 506 U.S. 113 S.Ct. involves an Delaware, Metrocall L.Ed.2d 38 fraud. Corp., 246 Va. Inc. v. Continental Cellular Chase, 875 F.2d at 283. 365, 437 S.E.2d 189 jurisdic- holdings The different of other finding precluding rule of reasonable suggest tions reasonable minds indeed prior allega- been reliance when there have persuasively, on this More how- differ issue. Illinois tions of fraud is not universal. The ever, jurisdictions that ad- the other Appellate recognized rule Court followed this issue have based them conclu- dressed Virginia, in Florida and but' nevertheless complete sions of law factual more stated: presented than that to this court. record could; pronounce a This reluctant present Based the limited record whereby parties, of law accused broad rule to establish a broad we are reluctant dishonesty, myriad types fraud and future, holding foreclosing potentially merito- up allegations set loose to live rious claims. against attempting them while leveled likely original dispute. The ef- settle the representations by attorneys b. encourage a rule would be to fect such dishonesty drastically to reduce the argue Matsuuras that them The reliance willingness plaintiffs to settle them fraud upon representations DuPont’s was reason claims, hold because could never representations able because such were made any misrepre- defendants accountable attorneys. through DuPont’s This court has during sentations of fact made practice of law an stated: “The honorable negotiations. profession requires practitioners that its to Tezak, 503, Ill.App.3d 230 Ill. Sims v. high behave accordance with ethical stan 737, 1015, 1020, reh’g dards, Dec. 694 N.E.2d de including compliance with court rules nied, Ill.App.3d 230 Ill.Dec. Disciplinary and orders.” Counsel Office of 1015, appeal Lau, N.E.2d 179 Ill.2d 79 Hawai'i (1998). (1995). N.E.2d 235 Ill.Dec. Sim Hawaii The Rules Professional ilarly, Appeals (HRPC) the United States Court attorney’s outline an ethical Conduct Circuit, law, applying Eleventh Colorado professional responsibilities specifi categorically party held that “a is not barred cally type misrepresentations forbid the relying representations alleged by pro Matsuuras. The HRPC opposing party negotiating vide, when the settle lawyer “A shall not inter alia: counsel dispute a which a claim for client, ment of involves engage, a client to or assist a in con Chase, 875 F.2d at 283.19 The court fraud.” lawyer duct that knows is criminal or explained: 1.2(d) fraudulent,” (2001); “A HRPC routinely negotiates lawyer clearly public the settle- shall reveal information which

The disputes upon rep- a criminal or act of the ment reliance establishes fraudulent party. which law resentations of the other While client the furtherance of used, yer’s every dispute is “adversarial” to some de- services has been to the extent gree, parties reasonably necessary rectify must have some assur- the conse act, legal they quences if act has ance of recourse are induced of such where the result injury dispute on the basis of false ed substantial to the financial inter settle another,” property hold representations of material facts. To est or HRPC Rule 1.6(b) (2001); lawyer knowingly discourage parties would “A shall not otherwise fact settling disputes out of court. This is make false statement of material or them I, virtually knowledge Evergreen presents types had of similar of conduct in Florida Furthermore, parlies to that before this other related lawsuits. identical factual situation court, extremely position distinguishable held that was be- were in an adversarial when Chase underlying agreement signed type fraud was "similar in the settlement and execut- cause the I, Evergreen inducement claims that are ed in this case.” Florida to currently fraudulent Court, F.Supp.2d and Plaintiffs also at 1297. before 3.3(a)(1) tribunal,” representations law to a HRPC Rule able because the were made lawyer response discovery requests. “A not fail to shall disclose a HRCP, material fact to a tribunal when counterpart, disclosure is its like federal “reflect a necessary assisting philosophy avoid criminal or basic to a civil that a action client,” act fraudulent HRPC Rule should be of all entitled to disclosure 3.3(a)(2) (2001); lawyer “A shall possession not unlaw relevant information in the of an fully party’s trial, obstruct person prior another access to evi unless the infor alter, unlawfully destroy dence or or privileged.” Wakabayashi conceal mation is Hertz, having poten document other material 66 Haw. (1983) (citations omitted). tial evidentiary lawyer A upon value. shall not Based person any counsel assist another to do open same recog basic disclosure act,” 3.4(a) (2001). such court, HRPC Rule More nized this federal courts have held “[cjourts over, presume attorneys justified abide in relying upon dis professional responsibilities.” them covery responses. Asso This has stated that ciates Fin. Servs. Co. Inc. v. interpretations federal courts’ of the Federal of Hawai‘i Mijo, 1221 Rules of highly Civil Procedure are deemed conclusive, presumption persuasive, The courts’ attor albeit not neys representations will not make false interpretations be court’s of the HRCP. Kawa suggests Farms, fore them a similar assumption mata 948 P.2d at part opposing counsel and adverse parties is a one. reasonable Rozier, passenger widow of killed establishes, however, negligently as a alleged designed result of an

Hawai'i law unsuccessfully automobile fuel tank moved representations attorney reliance of an pursuant for a per justified. new trial FRCP Rule se reasonable or Al 60(b)(3). Rozier, F.2d at 1337. In though noting attorney hold- that “an should be ing that justified the trial court abused its discretion relying upon in the statements of motion, denying in plaintiffs United attorney attorneys pro another because are Appeals States for in Court of the Fifth Circuit engaging involving hibited from conduct fraud, deceit, noted: dishonesty, or misrepresenta tion,” parties the ICA held that the were not system litigation Our civil cannot

justified relying opposing in upon counsel’s parties, violation court function if representations because Hawai'i orders, suppress called information (HRS) § provides Revised 605-7 Statutes upon discovery. knowledge of all “Mutual authority attorneys that no settle gathered by parties both the relevant facts special authority writing. without Cook litigation. proper is essential to To that Co., Surety Ins. end, Life party may compel either the other (citation, (App.1995) internal pos- disgorge he has his whatever facts brackets, quotation marks, emphasis session.” Rules of Pro- The Federal Civil omitted). Thus, that, ICA determined discovery process cedure substitute the spite placed upon of the ethical duties attor inadequate reliance on earlier and it, neys, including the facts of case before pleadings notice-giving, issue-formula- 605-7, requirements § of HRS indicated tion, As the fact-revelation. upon attorney’s representa that reliance Taylor, [329 Court stated in Hickman v. tions was not under reasonable the circum 91 L.Ed. U.S. 67 S.Ct. ease, however, present stances. there (1947)], courts “civil trials in the federal no statutory authority is no clear indi longer earned on the dark. need be cating upon representations reliance clear, way The is now consistent with rec- a matter of law. unreasonable as ognized parties privileges, for the to obtain knowledge possible the fullest of the issues discovery responses c. The aim and facts before trial.” these argue discovery liberal is to “make a trial

The Matsuuras them reliance rules representations game less a man’s and more DuPont’s was reason blind bluff by parties, per- we are with the basic issues and ments advanced 'contest fair practicable minds could differ as disclosed to the suaded reasonable fullest facts “(djiscovery extent.” It is axiomatic of Matsuuras’ reli- to the reasonableness requires candor in re- by interrogatory representations. upon DuPont’s There- ance sponding.” fore, following we submit the answer to the question: second certified (citations Rozier, F.2d at 1345-46 omit- ted) added). (emphases Agreeing with the In an action for fraudulent inducement by policy considerations enunciated attorneys plaintiffs’ and others have where Rozier, Ap- the United States Court accused the defendant of fraud and dishon- peals for the Third Circuit held one esty during prior dealings, the course of reasonably rely upon opposing party’s precluded as a matter responses interrogatories, noting: establishing law from that them reliance on recognize The Federal Rules themselves representations the defendant’s was rea- discovery, permitting aspect of the reliance sonable. request parties, to information inadmissible request “reasonably at trial where such Negligent Spoliation Intentional and or C. discovery of to lead to the ad- calculated Evidence Fed.R.Civ.P.

missible evidence.” See question The final certified asks:' 26(b)(1). Discovery could not serve the triggering subsequent inquiry recognize civil Does Hawaii law cause of function parties rely were not entitled action for for intentional if and/or Rozier, step. obtained at each results spoliation negligent of evidence? (“Our system of civil 573 F.2d at 1345 Initially, allege the Matsuuras that conduct function if ... cannot spoliation DuPont constitutes evidence. suppress information called for dis- Accordingly, limit our of this we examination covery.”). allegations spoliation issue of evidence Co., Mfg. Averbach v. Rival 879 F.2d underlying litigation. We (3rd Cir.), reh’g 879 F.2d 1196 analysis expressly spoli- omit discussion or (1989), denied, 493 cert. U.S. S.Ct. party. ation a third (emphasis 107 L.Ed.2d 745 add ed). court in concluded Averbach 1. Elements of the Tort “[bjecause the Federal Rules of Civil Proce to truthful answers dure are structured elicit jurisdictions recognize that The few oath, opposing party, in cir given under the (as spoliation of action for cause intentional here, may presented rea cumstances such opposed negligent spoliation, to in- discussed sonably rely interrogatory Av answers.” fiu) require showing of evidence of the However, erbach, 879 F.2d at 1201. the (1) following the of a elements: existence specificalfy Third limited its decision Circuit (2) lawsuit; potential the defendant’s knowl specifically presented, to circumstances the (3) lawsuit; edge potential of the the inten justifiable declining to hold that reliance can designed tional to destruction evidence always from sworn answers to be inferred (4) lawsuit; disrupt potential or defeat the Averbach, discovery requests. 879 F.2d at (5) lawsuit; potential disruption of the Holding parties may reasonably 1200. that relationship spolia causal between the act of rely party’s responses opposing to lawsuit; inability prove tion and the to the discovery requests poli is consistent with the (6) damages. and Oliver v. Stimson Lumber discovery cy of liberal established the both (1999); Co., 297 Mont. 22 and the federal rules. HRCP Cornicelli, App.3d 124 Drawl v. Ohio Torres v. El N.E.2d Paso Analysis 3. Co., 127 N.M. Electric supra, generally, As noted whether reasonably circum under the one has acted negligent spoliation a claim of of fact to determine. For evi stances is the trier dence, jurisdictions require Considering policies argu- generally and the the raised lawsuit; prove: plaintiff relationship the the of a causal existence and be- action; potential legal civil the or contractu tween destruction evidence inability duty preserve prove al to lawsuit. Matsuur- evidence is relevant action; complaint potential following allega- to the civil as’ destruction includes the evidence; significant impairment in tions: lawsuit; (5) prove ability to a causal illegally In withholding 186. addition relationship between the destruction of evi above, laboratory data referred to DU- lawsuit, inability prove dence and the illegally also PONT withheld documents (6) damages. Continental Ins. Co. regarding testing information it had Herman, (Fla.App.1990), 576 So.2d conducted in field in Rica in Costa (Fla.1991); Oliver, reh’g 598 So.2d 76 1992.... 19. P.2d at test, Despite 209. the facts of Spoliation 2. The Matsuuras’ Claim confirming existence of data tests proper DuPont contends this is not a proving B plant the evidence caused enlate adopting independent ease to consider damage, produced never DUPONT these spoliation tort for of evidence because Ranch, documents in-Bush Kawamata/To- plead Matsuuras failed to and cannot cases, any mono in- MALONE prove relationship a causal between the de Plaintiffs’, cluding nor they ever iden- inability struction of evidence and an any privilege log, they tified nor were prove lawsuit. their The Matsuuras’ claims any testimony by in sworn revealed DU- virtually identical claims made employees specifically PONT who were plaintiffs in Evergreen Foliage Florida during about asked such tests discov- Co., E.I. Du Pont De Nemours and ery.... (S.D.Fla.2001) F.Supp.2d 1359-61 un When the Costa Rica test was [hereinafter, II], Evergreen Florida wherein with covered connection district plain federal court held Farms, Tree Inc. v. Davis DUPONT case satisfy tiffs in that case could not the ele Florida, deposition and the of Mr. filed spoliation ments of a claim rele because the scheduled, went to Cefalo21 DUPONT destroyed vant data had not been and the attempted Costa Rica and to intimidate plants destruction the actual used in the impede testimony, his in violation of and/or study significantly impair Costa Rica did not Sections 1503and 1512. U.S.C. prove render the unable to their In that admitted it DUPONT II, Evergreen F.Supp.2d claims. Florida objection product any waived work had at 1359-61. respect test documents reviewing adequacy of a com yet discovery and refused obstructed plaint, allegations we deem the contained produce of a court them even the face within it to be true and “it examine whether compelling it to order do so even appears beyond plaintiff doubt that the can under threat of a default order....

prove support of no facts in of or her set his claim that would him or her to entitle relief.” 214. the Davis Tree Farms case and Ing, 95 Blair v. it, previous including all cases to Plaintiffs’ Lewin, (quoting Haw. Baehr cases, intentionally withheld this DUPONT (1993) (internal 44, 53 Rica crucial information re: the Costa field omitted)). citations its exis- test conducted denied prevent in the disclosure tence effort supra, both As indicated intentional to the Plaintiffs and the Court.... negligent spoliation require: of evidence evidence;20 215. Once Costa Rica test was un- destruction DUPONT, effort, covered, disruption significant impairment in a of the last ditch complaint alleges plants According pleadings, 20. 21. Cefalo conducted The Matsuuras’ destroyed. from the Costa Rica test were the Costa Rica field test. field lawsuits, secrecy the Matsuur- underlying In them and concealed the mislabeled alleged and the with Welker from the use Benlate. agreement contract Plaints, Inc., log. This privilege Thus, claim in order to constitute a valid evidence, violated U.S.C. Sections spoliation conduct the Matsuuras must plants that the from prove destruction of Rica field test resulted them the Costa damaged inability prove them Benlate Costa 217. DUPONT concealed the However, and fields. the Matsuuras plants and the and evidence Rica test documents and other that documents informa- indicate many it in with other Benlate associated pertaining to Rica test— tion field Costa cases, Ranch, including Bush Kaiuama- including photos videotape of ta/Tomono, Plaintiffs’ and the other cases plants the harmful effects of eases.... concealment MALONE Such —demonstrated Additionally, Matsuuras indi- Benlate. in violation of 18 Section was U.S.C. Alta and the that the test results Keeler

cate both that Benlate was documents indicated conceal- 219. DUPONT’s fraudulent Moreover, contaminated herbicides. testing part Costa Rica was ment of the plaintiffs Kawamata Farms suc- prevent and did in Plain- fact intended substantially proving identical cessful discovering from fraud DU- tiffs herein any without the claims benefit evidence perpetrated and was had on them PONT Therefore, from the Costa Rica field test. prevent to and did them seek- meant allegations given that the Matsuuras’ indicate timely for such in a ing redress redress plants other than the evidence manner. test the harm- Rica demonstrated Costa field Benlate, destruction ful effects clients, 222. MALONE on of his behalf plants Rica did not result them Costa Plaintiffs, pro- including requested had inability prove suit. them information, pur- of documents duction pro- to which should have suant DUPONT support alleged cannot Because facts documents, the ALTA SU the other duced claim, spoliation this court need not them testing revealing contamination Ben- lab recognize law would resolve whether Hawaii docu- and the- Costa Rica field test late spoliation Petrik a tort of evidence. exception a small With the ments. Printing Ill.App.3d Corp., 150 Monarch of the other lab contamination amount 1312, 1321 103 Ill.Dec. 501 N.E.2d testing, of the infor- none above-referenced (1986), denied, reh’g Ill.App.3d MA- provided disclosed mation was (1987), appeal Ill.Dec. N.E.2d by DUPONT. LONE 114 Ill.2d 108 Ill.Dec. evidence 223. The above-referenced (1987). Therefore, insofar as N.E.2d DUPONT, damaging very helpful question appear to third certified does be clearly have en- to Plaintiffs would cause,” inappro it was “determinative their cases hanced priate for certification under HRAP Rule 13. 224. As a result of the fact DU- Accordingly, we to answer it. decline illegally and lied about concealed PONT and because

the above-referenced evidence III. CONCLUSION concealment, Plaintiffs of the effect than their them cases for far less settled foregoing, we answer Based on the and the fair value actual losses question as follows: Under Ha- first certified of them cases. law, liability is waii a not immune Thus, according complaint, upon party’s that the Matsuuras’ for civil based pro- during prior litigation in engaged and information from the Costa fraud documents ques- proved damaged ceedings. As to certified test that Benlate the second Rica field tion, plants. This was not de- we answer: In an action fraudulent documentation was, attorneys plaintiffs’ Du- where and stroyed ultimately, and disclosed inducement have accused defendant Pont. others the dishonesty during adopted and prior position the course of I forth the had set as to dealings, plaintiffs two; therefore, precluded questions not as are a certified one and I establishing my matter of law from out position their set in detail.2 representations reliance on the defendant’s view, my In where matters relevant For reasonable. the reasons discussed prior litigation procedures were concealed supra, we decline to answer the third certi- case, fraudulently induce a the question. fied injured party bring indepen- is entitled to post-settlement dent action for fraud. This Opinion Concurring Dissenting and decisions, rule is with consistent recent rea- ACOBA, J. son, policy. Accordingly, and would I answer questions the first and second certified (1) determining In policies of dis- negative.3 couraging practices, litigation abusive en- settlement, couraging reinforcing finality As to question, the first certified I believe judgments, and limiting underlying litiga collateral attacks four concerns upon judgments, opinion majority see at tion privilege affording sep 156- favor Plaintiffs a 158, 158-160, 694-696, 696-698, fraud, 73 P.3d at arate action for Hawai'i Rules of (HRCP) 60(b)(3) against litigation militate an extension of the Civil Procedure relat result, privilege,1 and as a govern law to fraud on the court should case, subsequent, does allow a independent separate action this outcome of a action for fraud litigation delay based misconduct in pro would not cause substantial and action, prior, a majority opinion long litigation, related see at separate a action to 160-161, 698-699, majority remedy perpetuated 73 P.3d has fraudulent inducement substantial, jurisdiction litigation recognized impacts 1. This dispo has be our Carlsmith, cases, privilege Ferry agree procedure libel actions. I sition of cannot awith (1917), adopted litiga Yamada, 23 Haw. 589 this court delay. in such results State Cf. privilege "attorneys, 542, 557, 467, 482, (Acoba, tion and held that 99 Hawai'i 57 P.3d judicial proceedings, privileged J., conduct of ("Inasmuch concurring) majority prosecution respect for libel or slander agrees my adopted position with and has that the writings, words or used in course of such erroneous, Special court’s Instruction 1 was No. proceedings, writings ... when such words detail.”), my position I set out reconsideration pertinent question are material and in 100 Hawai'i 59 P.3d 930 591; volved.” Id. at see also v. Keko Abastillas 394-95, Faria, State v. na, (2002) (Acoba, J., Concurring 344 — 45 (noting Appeals that the Intermediate Court Ramil, part Dissenting J. with to the decision granting summary affirmed tire circuit court’s Moon, (“Chief C.J.) opinion Justice Moon’s judgment attorney against libel of a action "in adopts incorporates position the initial [prior] representation his connection with ... on Justice Ramil.... Inasmuch Ramil’s as Justice immunity”), the basis of absolute reconsideration result, position majority I set forth ultimate denied, (1998). opinion believe announced his should have Compa- du & Defendant E.I. Pont de Nemours case.”); majority disposition in this State v. Enri ny argues expand appli- that this court should its quez, 2002 WL at *2 No. litigation privilege preclude cation a suit 2002) (Haw. Dec.20, (Aco- (unpublished opinion) prior based in a misconduct case. ba, J., concurring) (stating that "inasmuch as the Following reasoning, litigation privi- this if the majority agrees adopted with and con has this lege applied were to in the instant be curring reaching opinion's rationale in ma suit, upon litigation based misconduct conclusion, jority’s I facts and law set out the suit, prohibit- in a occurred would be majority support propositions agrees Conversely, litigation privilege ed. if the is held adopted”), http:// with and has available apply, subsequent proceed. not to suit www.state.hi.us/jud/22023con.htm. policy, respect, all due As matter view, my question, in 3.As to the third certified written, already separate position when a but indepen- to an inasmuch as Plaintiffs are entitled adopted majority, appear later would it fraud, necessary dent it to ad- action for is not accepted practice self-evident and of that the question. dress the third certified Evidence of separate majority opinion opinion. announce the trial, may spoilation, produced at be Any only unnecessary if addressed other course results by variety appropriate delay majority separate trial devices such as incorporates the as tire defenses, instructions, position striking previously opin limitation of new or written into a delay, testimony, resulting ion. as which Inasmuch can etc. law, Plaintiffs’ termi- by is ease well after claims had been prior supported in a reason, by no policy. certi settlement and Plaintiffs were As to the second nated majority longer parties to the question, disagree I with the suit. fied plaintiff must reliance that a show reasonable Second, policy encouraging settle proceeding in instead of actual reliance when against, heavily weighs not in fa ments but majority a cause of action for fraud. See of, permitting an inde vor Plaintiffs to file 161-162, opinion at 73 P.3d at 699-700. pendent action. See discussion section infra IV, Third, judgments are subsection C. when I. fraud, by policy reinforcing the tainted judgments by question finality outweighed asks: “Under this The first certified is law, liability party preference judgments is a on the mer Hawai'i immune court’s damages party’s generally Boughey, mis- for civil on that its. Lesser v. based See (1998) 260, 261, conduct, including fraud, during engaged Hawai'i P.2d litigation per prior proceedings?” (noting policy There are that “this court ‘to has eight policy litigants appeal associated mit cases concerns or criteria and to have their ” litigation posited privilege. (quoting with the It on the merits’ O’Connor heai’d Honolulu, arguably policies, four that of of the Diocese of 361, 363, practices, discouraging litigation en- P.2d reconsideration 77 Ha abusive (1994)) settlement, finality couraging reinforcing (emphasis P.2d 66 omit wai'i ted)); Long, judgments, limiting Long attacks collateral upon judgments, against, (App.2003)(noting “strong poli rather than weigh for, independent cy favoring fraud as a an action for resolution of on them mer cases its”). Fourth, remedy my may strong policy against invoke. In col Plaintiffs weigh judgments the four criteria do not favor attacks on been view lateral has never but, instead, litigation privilege count by absolute as evidenced the fact HRCP 60(b)(3) independent specifically judgment action recognizing favor of an Rule allows by gen fraud procured for fraud. to be set aside. See Inc., Techs., Genesys erally In re Data First, discouraging to the abu- as (“Pur (2001) litigation practices, sive the contention 60(b)(3), Rule ‘on motion and suant to HRCP application factor favors of the this upon just, may as such terms the court already privilege adequate because there are party ... judgment relieve a from a final remedies, including criminal and civil HRCP n omitted.)). ” (Brackets fraud[.]’ ... 60(b) (2002),4 litigation miscon- to deter Hence, criterion, alleged, when fraud is wrong. would be law reme- duct Criminal others, weighs allowing like the on the side of compensatory irrelevant dies are independent proceed. action by punitive sought Plaintiffs. Civil appear provisions largely inadequate law as II. in- post-judgment remedies. discussion 60(b)(3) For, my opinion, II. alleged section concealment HRCP Rule relat fra incriminating test Defendant to fraud on the court would be inade results largely remedy until in this quate Plaintiffs ease. In Kawamata undiscovered 60(b) judg- party; provides 4. HRCP Rule relief from a other misconduct an adverse or void; (5) provides, part, judgment judgment ment or order and in relevant has been satisfied, released, discharged, follows: or or a judgment which it is based has been just, On motion and such terms as are vacated, long- or otherwise it is no reversed or legal party's the court relieve a or a equitable judgment er that the should have order, representative judgment, or a final (6) any prospective application; other rea- proceeding take, inadvertence, following mis- reasons: justifying operation relief son from the surprise, ne- or excusable judgment. The within a motion shall be made newly glect; evidence discovered time, (1), (2), diligence reasonable for reasons due have been discovered could not year judgment, than one not more after the in time to move trial under Rule for a new order, 59(b); (whether proceeding denom- entered or taken.... heretofore added.) extrinsic), misrepresentation, (Emphasis inated intrinsic or Farms, Prods., year judgment, Agri. Inc. v. United Ha more than one or- after the (1997), der, proceeding wai'i 948 P.2d 1055 this court or was or taken.” entered added.) rule, parallel acknowledged (Emphasis that the federal Federal Rules Civil Rule Procedure Kawamata, Farms, theory In that the the 60(b)(3), application, having had limited been 60(b)(3) plaintiffs relied on for HRCP their interpreted “avail by the federal courts as However, it motion is unclear. is evident only prior judg or able to set aside order court affirmed circuit court’s this the ment; may a court [and not use Rule 60 that] of affirmative under HRCP allowance relief grant affirmative relief in addition to the 60(b)(3) “discovery per- Rule based on fraud judg or relief contained order petuated against the court.” Hawai'i at (citations ment.” at Id. P.2d at 1097 added). at (emphasis The omitted). quotation and internal marks one-year imposed time on limitation HRCP circuit court in Kawamata Farms had sanc 60(b)(3)5 present would not Rule obstacle alia, by, awarding tioned defendant inter in a motion fraud on relief based on attorneys’ “additional fees and court. v. Reliable Collection See Schefke trial, throughout pretrial, costs incurred Ltd., 431 n. Agency, post-trial proceedings relating (stating 75 n. 42 P.3d “courts previously misconduct that had not been place setting judg- time limit on aside a no been awarded as Id. at sanctions[.]” ground” of on th[e] ment on fraud the court” P.2d at 1098. (citations omitted)). But, on fraud the court However, considering “egregious after party, gravamen on a is not fraud as is the [defendant],” nature of fraud claim. 32 P.3d at Plaintiffs’ See id. at (“[Fraud not “construe[d] the HRCP so as on the be a court] must direct as- 60(b)(3) remedy disallow a under HRCP Rule judicial process. sault integrity discovery post-judgment when there is required Courts have than nondisclo- more supported by convincing fraud clear and evi party party’s attorney sure Thus, (Citations circuit sanc dence.” Id. court’s on in- find fraud the court.” attorneys’ omitted.)). tions and award of and costs fees quotation marks ternal were sustained because this court construed bar, allegedly case at 60(b)(3) “to HRCP Rule allow for affirmative Hence, against parties. if committed attorneys’ relief in th[at] case because 60(b)(3) applied, Rule to be HRCP were by” fees and costs were allowed HRS would seem to be foreclosed from Plaintiffs 603-21.9(1) §§ Id. at 60(b)(3) obtaining relief under Rule HRCP Nevertheless, . 1099 HRCP period one-year has because limitation 60(b)(3) provide adequate not would re April run.6 case on Plaintiffs settled them course. and their claims dismissed years two November More than

A. later, 1996, Plaintiffs filed on December 60(b)(3), complaint may based on fraud. Under HRCP Rule the court them relief order, judgment, complaint as Plaintiffs’ was filed relieve a from final Inasmuch settlement, year proceeding supra fraud. note 4. If one See more than after precluded dispen only remedy to Plaintiffs is to Plaintiffs be from the available 60(b)(3). court, return to to move to set aside the sation afforded HRCP Rule state Inc., Techs., Genesys agreement, reopen and to In re Data fraud, one-year (noting case for Plaintiffs with the 18 P.3d at 899 are faced 60(b) 60(b) plain barred requirement such a limitation HRCP Rule HRCP Rule seeking HRCP Rule “motion shall be made within a tiff from relief under reasonable 60(b)(3) time, (1), (2), timely plaintiff re and for reasons because failed discovery giving supra rise 5. See of tire facts note from the judgment.” request for relief brief, argued, reply 6. Defendant in its “the 60(b) one-year period [under ] runs HRCP Rule Brown, relief); Haw. Corp. Watson v. quest Dillingham Inv. v. Ku P.2d 753 235, 252, 258, 12, Trust, 226, (“[Questions Haw.App. 686 P.2d Yokoyama nio decide[.]”). 1316, 1320 jury to Ac (holding that of fact for the [are] relief 60(b)(3) 60(b)(1), provide would not cordingly, which is confined HRCP Rule under HRCP resolving fraudu adequate basis for of limitations as HRCP the same statute alleged. 60(b)(3), conduct Appellants “unavailable to lent Rule they motion within failed file them because Judgment”). year entry of the one of the D. discovery fraudulent concealment Because Finally, pursue if Plaintiffs their within one not be discovered matters court, in Plaintiffs would be remedies federal 60(b)(3) scope in

year, Rule limited HRCP acknowledged by Ka- with the obstacle faced just may preclude an claim and otherwise is, courts That that federal wannata Farms. recognition. from do not afford affirmative relief under FRCP 60(b)(3) kind in Kawa Rule of the awarded B. i.e., costs, Farms, attorney’s and mata fees only ap Additionally, Fanns Kawamata compensatory much an action for less proved of affirmative relief as a limited modi punitive damages. 60(b)(3). of HRCP fication the reach essentially attorneys’ remedies extended III. supported only not HRCP and costs fees subsequent I that a also do not believe 60(b)(3), by attorney’s but fees statutes. in- independent proceeding for fraudulent imply that com Kawamata Farms did delay in ducement would result substantial might pensatory punitive damages also prolong litigation. 60(b)(3) because be obtained under HRCP pow dispute this court further admonished “the is no that neither Plaintiffs There discovery attorney miscon er to sanction nor them learned Defendant’s province part duct is within the exclusive of the Alta test results concealment court, jury.” study not the 86 Hawai'i at all Rica until circuit of the Costa field Thus, complaint P.2d at 1084. insofar as 1997. Plaintiffs filed their initial 60(b)(3) judicial parties limits the on and them first amend- HRCP December sanctions, provide adequate January re complaint it would not on 1997. In ed to Plaintiffs. lief the federal district concluded complaint was barred them set-

Plaintiffs’ agreements with Defendant. C. tlement appealed Plaintiffs to the Ninth Circuit. court, mentioned, acknowledging in As Bird, 166 F.3d Matsuura v. Alston & See 60(b)(3), scope of HRCP Rule the limited Cir.1999). (9th 2, 1999, February On affirmative relief the form sanctioned Ninth reversed and remanded the Circuit Yet, present attorney’s fees and costs. 1, 2001, March case to the district court. On case, jury to a would be entitled preclude Plaintiffs moved Defendant fact, ie., respect to issues of trial fraud, discovery re-litigating the issues of ie., damages, compensa on Plaintiffs and of abuse, withholding of and intentional evi- Housing Dev. tory punitive. Fin. & ground dence Kawamata Farms Corp. Ferguson, Hawai'i 10, 2001, May estoppel. On Defen- collateral (1999) (“[Jjuries actions requesting a motion the district dant filed historically issues of law have determined certify questions court to to this court. On money damages particular!!]” ... fact granted the district court June (Citations omitted.)); Farm Fire & State litigation on- present motion. The has been Rent-All, Inc., 90 Hawai'i Cas. Co. Pacific going discovery that information since the (“[Q]uestions of had been concealed. jury.” fact for the determination [are] (Citations omitted.)), Hence, delay was no marks re there undue and internal present Based on the 978 resolution of the case. consideration delay allegations, was stems Similar to this district court whatever there the federal largely Defendant’s efforts conceal certified to the Delaware Court deception law, question, or fraud. Had Defendant act- ‘“Under Delaware does the good settling ed in faith in agreements the case with bar release these settlement ” Plaintiffs, present would not Plaintiffs’ fraudulent inducement claims?’ eight have found itself before this court some Id.

years agreement. after the settlement Tak- case, As it does Defendant asserted true, allegations delay Plaintiffs’ as independent that an set- cause action for substantially attributable to Defendant’s litigation mis- tlement fraud based on evidence, incriminating to scheme hide the conduct It should be allowed. See id. proceedings brought and not to vindi- only remedy that for a maintained “the Therefore, rights. Plaintiffs’ cate there is no fraudulently is induced release rescission justifiable denying reason for Plaintiffs the proceeds with restoration of settle- filing independent election an action. ment.” Id. 459-60. The Delaware Su- preme disagreed Court and held in the IV. specific “absence of a action- reference view, my allowing Plaintiffs the election release, may plaintiffs able fraud” in the post-settlement independent in an sue ac- independent elect an action for fraud. Id. at law, supported tion for fraud is case rea- son, policy. and option, Objecting independent suit protest Defendant raised same it raises A. here, i.e., option spawns that such an “collat- case, In another Benlate the Delaware Su- litigation.” response, eral Id. In the Dela- preme party fraudulently a Court held that pointed out a set- ware Court may a induced execute release file contract, agreement a and tlement effect remedy. independent suit E.I. as See Du- allowed for contract remedies rescission Pont de Nemours & Co. v. Florida Ever- or an action for fraud. id. at 463. See (Del.1999), green Foliage, 744 A.2d rehearing [hereinafter denied Florida B. II, Evergreen Evergreen In Florida II]. as appeal in this Matsuura7 involved a federal plaintiffs in this entered into allegations, Ninth case. as noted The agreement May settlement De- Circuit, that Plaintiffs were fraudulent About fendant executed release. four ly settling into induced with Defendant.8 later, years September plain- 166 F.3d The district tiffs filed action for fraudulent inducement district of Hawai'i that the ruled settlement federal district court. bringing suit. releases barred Plaintiffs plaintiffs alleged im- that Defendant The See id. plemented a fraudulent scheme induce they appeal, than that the them to settle “for less would have On the Ninth Circuit held upon.” independent ... Id. at 459. not bar an action otherwise insisted releases did alleged Af- alleging of fraud in fraudulent id. scheme consisted inducement. See withholding discovery, analyzing ter case material scienti- the relevant Delaware law,9 giving the Ninth Circuit reversed the district fic data information and false court, testimony holding “parties who have been other Benlate cases. See id. Bird, plaintiffs proceeding in the & Defendant 7. The in Matsuura v. Alston federal Cir.1999) (9th plaintiffs bar, are the same F.3d in the case at bar. DuPont and Alston case at unless otherwise indicated. Bird, & firm, are in Matsu- law also named defendants governs law be- 9.Delaware the Matsuura case ura. signed by cause the releases they 'governed "provide are to be defendant consistency, although 8. For DuPont and Alston & according to Delaware law.” construed' proceeding, Bird in the federal are defendants 1008 n. 3. F.3d at "Defendant” refers to the hereinafter defendants Hence, limiting is no reason there fraudulently into a contract induced enter in post-settlement available cases remedies they rescind of remedies: have a choice has induced the contract. See they may contract where affirm the the contract or Breeden, 51 Haw. Lemle v. at 1008. Also sur- for fraud.” Id. and sue (holding that remedies available jurisdictions, the veying from other decisions relationship of contractual “are weight breach decided “the Ninth Circuit damages, reforma- basic contract remedies authority according tort favors defrauded rescission”), tion, rehearing Id. plaintiffs an election remedies.” As Matsmira Haw. 462 P.2d 470 held, allegedly in cases where C. defrauded, jurisdictions majority of the party an election of rem- allow the defrauded Delaware, agreements in As in al- Accordingly, Plaintiffs should be edies. e.g., as contracts. See Hawai'i are viewed independent to an action for fraud. lowed file Co., 90 Hawai'i at Farm Fire & Cas. State (“[A] 323, agree- 978 P.2d at 761 settlement V. (Citations agreement....” and is an ment omitted.)). Any quotation marks internal Second, independent action an best serves through fraud vitiated as contract entered encouraging parties policy of to volun Au, parties. Fujimoto v. 95 between the cases, thereby avoiding- tarily them settle (“Fraud 699, 116, 157, 740 19 P.3d v. prolonged litigation. See Collins South agreements par- all as between vitiates 86, 90, Jeep Eagle, 87 Hawai'i Seas (Quoting v. Mur- by it.” Peine ties affected (“The 374, purpose of [Hawai'i 378 708, 233, 239, P.2d 712 phy, 46 Haw. 377 (HRCP) 68[, ] Rules of Civil Procedure (1962). (Internal quotation marks and cita- judg governs of settlement or offers omitted.)), reconsideration tion ment,] encourage settlement and avoid is' to litigation.”); Sylvester v. Animal protracted 560, Oahu, Emergency 72 Haw. Clinic of inducement, In an action for fraudulent (1992) (“[A 565-66, P.2d 1056 set 825 Peine, to plaintiff is entitled rescission. See settling an amicable method of or tlement] is (holding 712 Haw. at 377 P.2d at 46 resolving bona fide differences or uncertain into the party “who was induced to enter designed prevent put to or an end ties and is rep joint agreement fraudulent adventure (Citation quota litigation.” to and internal may ... ... obtain a decree resentations Arakaki, omitted.)); marks Arakaki v. tion cancelling agreement ab rescinding ” 383 54 Haw. (italicized original)). It font in initio concerning property (purpose of bill settle may party that a either basic contract law proceedings during was to ments divorce contract contract or affirm the rescind the resources), judicial rehearing de conserve damages. bring a suit for See DiSabati nied, Page v. Domino’s 54 Haw. Co., Fidelity & no v. States Guar. United Pizza, n. P.2d (D.Del.1986) (defrauded F.Supp. (“[S]ettlement (App.1995) provides a 557 n. 6 ... may contract or affirm party “rescind the case[.]”). quick of a resolution resulting from damages it and sue ]”); discussing policy In rationale for allow- Baeza v. misrepresentation! fraudulent bring independent Dodge, plaintiffs to Chrysler, Plymouth, E. Lee Robert fraud, post-settlement, Inc., the Florida 766 action 309 S.E.2d S.C. (a Eveogreen “[c]andor II court observed party alleging fraudu (S.C.Ct.App.1983) are, be, hall- fair-dealing or should may affirm the contract lent inducement contract); required mark of attributes damages or rescind sue Reaves, judicial process.” Machinery 158 those who resort Dallas Farm Co. court, (1957)(a According to that if a 744 A.2d at 461. defraud 307 S.W.2d Tex. rely good settling party cannot faith bargain and “stand to the ed encouraging fraud, party, policy of ... “the re for the recover ]”). jeopardy.” is in Id. the settlement cases scind the contract! ted.)); Evergreen Sylvester Emergency Florida II court reasoned Animal Clin “seriously Oahu, hold otherwise would un- ic 72 Haw. requirement dermine the of bona (stating policy that “this court’s fide amicable, efficient, execution contracts confi- inexpen undermine [is] foster dispute goal pro- through dence resolution disputes” compro sive resolutions moting litigation.” settlement of Id. at 462 by litigation). mise or rather than (emphasis original). Therefore, considerations enumerated Matsuura, Similarly, in the Ninth Circuit the Delaware Court and the Ninth allowing bring also observed that Plaintiffs to apply Circuit here. disclosures and Where independent action would “further Dela- faith, representations good are not made in policy favoring ware’s voluntary settlement parties “will reluctant be settle.” legal disputes.” 166 F.3d at 1012. The Matsuura, 166 F.3d at 1012. The “[assur “finality Ninth Circuit reasoned that of set- adversary’s good of an particu ance faith is assumption tlements is based on the that the larly partiés attempting critical when parties freely bargained exchange Thus, amicably.” a dispute resolve when Id. costs, potential risks and rewards of liti- other, distrust each “the gation for certainty of a settlement that encouraging jeop the settlement of eases” is light fair seems known facts at the II, Evergreen ardized. Florida A.2d (citing Appraisal time.” Id. In re Enstar regard, availability anof (Del.Ch.1991) 543, Corp., (citing 593 A.2d 548 independent action for fraudulent induce cases), grounds, rev’d other 604 A.2d 404 potential ment would deter fraudfeasor. (Del.1992). Hence, by “[settlements induced party “vitiate[d] The whose misconduct has fraud are set aside ... because defraud- dispute” an resolution of amicable would freely bargained, ed has not but has Consequently, poli not be rewarded. Id. by misrep- been induced settle affirmative cy encouraging weighs of settlements in fa by party.” (citing the other Id. resentations allowing subsequent of independent vor Appraisal re Corp., In 593 at Enstar A.2d sum, permitting fraud action. Plaintiffs tc of 549). such of policy file an action would further the Matsuura, encouraging settlements. See hand, “[e]nforcing [a On the other fraudu- F.3d at 1012. 166 policy lent] settlement would undermine the voluntary encouraging of settlement of dis- VI.

putes: if litigants cannot assume [that] representations oppos- disclosures and of A. faith, ing party they in good are made will be question The second certified asks: Matsuura, reluctant to settle.” 166 F.3d result, “[d]enying 1012. As a plaintiffs’ attorneys Matsuuras Where and others any remedy further would undermine rather of accused the defendant fraud and dishon- policy encouraging [the] than further esty during vol- prior, the course of related untary settlement of claims.” litigation, plaintiffs preclud- Id. thereafter bringing law ed as a matter of Delaware, jurisdiction Like our favors cause of action for fraudulent inducement disputes. settlement of See Associates Fin. they not have to settle because should Hawai'i, Mijo, Inc. v. 87 Servs. Co. Haw representa- relied on the [defendant's (1998) (“[A] 19, 1219, 30, ai'i 950 P.2d 1230 tions? judge encourage through should particularly majority certified out the case on the eve The answers second trial.”); Gossinger Apart question requiring prove v. that Plaintiffs Association Wai, Regency repre- ment Owners Ala 73 that “their reliance defendant’s 412, 5, 627, n. Majority opin- Haw. 424 P.2d 634 n. 5 835 sentations was reasonable.” (“Public mentioned, 165, I favors the settlement ion 73 P.3d at As courts, disputes question pro without resort to the would answer the certified fairly negative. regard, agree such In this I do with vided settlements are reached.” (Citation quotation majority’s reli- and internal marks omit belief “reasonable 176 (1979) (The a., at 471 shift in ethical shown Plaintiff under the cmt.

anee” must be accepted by community and this circumstances of case. standards ... ... shift the law of fraud are jurisdiction that in It is settled well change in law’s illustrated ... fraud, plain order establish action diligence.... great requirement “(1) representations prove must false tiff ordinary weight authority today holds that ], knowl were made defendant any negligence no contributory defense (or falsity knowledge of edge of without their grounded on fraud.” action intentional falsity), contemplation truth their Gray, (Quoting Misrepresenta & James represen these false reliance II, 488, 37 Md. L.Rev. 511 tion — Part tations, rely upon plaintiff did them." (1978).)). 868, Am., Inc., 94 Hawai'i Shoppe v. Gucci 386, 1049, (quoting 14 TSA P.3d 1067 243, B. Corp., Ltd.

Int’l v. Shimizu (1999)) 251, 713, add (emphasis 990 P.2d 725 Co., ed); Shanghai v. see Inv. Co. Alteka also As is from the elements of evident (2000), 993 P.2d 531 92 jurisdiction, ques for fraud in this action grounds by, Ing, v. overruled on Blair rely “plaintiff [in fact] did tion whether (2001); 327, 329, 31 P.3d 186 representations].” Shoppe, upon [the false Anderson, v. 70 Hawai'i’s Thousand Friends such, 14 at 1067. 94 Hawai'i at P.3d As (1989); 276, 286, 768 Haw. P.2d jurisdiction requires only actu the law this 652, 656, Kang Harrington, Haw. reliance, reliance. Ha al not reasonable (1978); Star, Inc., Eastern S.A. Friends, 70 Haw. at waii’s Thousand Corp., Haw.App. Bldg. v. Union Materials plaintiff (requiring P.2d at 1301 “that did Wolfer representations”); rely [the] ... false York, Ins. v. Mutual Co. New Life Kang Harrington, Haw. Haw.App. (requiring plaintiff “that argues Plaintiffs unrea Defendant rely representa ... [the] did false relying representations on dur sonable in its tions”); Peine, P.2d at Haw. negotiations Plaintiffs settlement because (“The [complaining] party must re have allegations had knew about that Defendant repre ... lied acted fraudulent discovery. engaged in dishonest conduct in sentations[.]”). Essentially, Defendant asserts that undisputed It is that Plaintiffs “relied “justifi in a fraud must “reliance” action be misrepresentations[ on [Defendant’s] ]” fact on able” “reasonable.” Defendant relies Thus, in negotiations. in them settlement Evergreen Foliage v. E.I. Du Pont Florida faith, of Plaintiffs bad i.e. actual the absence Co., F.Supp.2d 1271 De Nemours & knowledge subject facts mis- that the -were (S.D.Fla.2001) Ever [hereinafter Florida only actual I], represented, I believe reliance court in that green The federal district Therefore, view, my Plaintiffs required. where monitored case held not, law, precluded from are as a matter of courts, and had in other Benlate instituting a cause action fraudulent knowledge alleged fraud and of Defendant’s misrepre- inducement based Defendant’s dishonesty, plaintiffs’ on Defen reliance sentations. misrepresentations and omissions dant’s

deciding settle was unreasonable as

matter See id. at of law. requires agree policy Public the same As I would not with the rationale result. previously, agreement I. Evergreen As between a fraudfea- stated Florida parties in a arguably negligent person, engaged assumes that the have sor and an freely-bargained exchange. not reward the fraudfeasor fair law should Matsuura, inhering in F.3d if Plain- greater culpability at 1012. Even light (Sec knew of Defendant’s tiffs about some fraudulent conduct. Restatement Cf. ond) Contracts, representations, did Reporter’s § Note fraudulent Defendant not disclose the Costa Rica tests at the field Here,

time the settlement. based on the

allegations, hardly Plaintiffs can be said to “[ajssurance “freely bargained.” adversary’s good particularly faith is criti-

cal attempting when are resolve amicably.”

dispute availability Id. The aof

potential action, then, fraudulent inducement encourage settlements,

would aid deter- misconduct,

ring thus avoid extended

litigation. light foregoing, Plaintiffs when

have been misled Defendant’s fraud and

dishonesty during prior, the course related

litigation, precluded Plaintiffs

matter law and instituting

cause action for fraudulent inducement

settle based on Plaintiffs’ reliance on Defen- misrepresentations.

dant’s

73 P.3d 715 NAKASONE,

Carmen T.

Respondent/Plaintiff-

Appellee, NAKASONE,

Gerald

Petitioner/Defendant-Appellant.

No. 23460.

Supreme Court of Hawai'i.

July

Case Details

Case Name: Matsuura v. EI Du Pont De Nemours and Co.

Court Name: Hawaii Supreme Court

Date Published: Jul 29, 2003

Citation: 73 P.3d 687

Docket Number: 24355

Court Abbreviation: Haw.