Thomas v. Kidani.Thomas v. Kidani.
Petitioner/Plaintiff-Appellant Tara Thomas filed this lawsuit against her former attorney, Respondent/Defendant>-Appellee Grant Kidani. Kidani represented Thomas in a real estate dispute wherein Thomas sued Ricardo Barbati, a realtor involved in the pur
chase
We granted certiorari to clarify the standard of review for an appeal from a motion for summary judgment and also to clarify the burdens of proof on parties to legal malpractice eases in the procedural context of a summary judgment motion. We hold that the ICA apрlied an incorrect standard of review on appeal. However, upon de novo review, we hold that Kidani is entitled to summary judgment in this case, though our analysis differs from that of the trial court and ICA. We therefore affirm the grant of summary judgment on different grounds.
I. BACKGROUND
In 1989, Thomas purchased real property in Hilo, Hawai'i. According to Thomas, Bar-bati represented at the time of the sale that the property had a cesspool. The property does not have a cesspool, whiсh Thomas contends she discovered 11 years after the sale, in 2000. Thomas filed a lawsuit in Circuit Court 1 alleging misrepresentation, unfair and deceptive trade practices, negligence, and emotional distress. Kidani represented Thomas at trial against Barbati, and the jury delivered a verdict against Thomas, finding that she “knew or in the exercise of reasonable care should have discovered the location of the subject cesspool servicing her property оn or before January 23, 1994.” This date reflected the application of a six-year statute of limitations.
Following the conclusion of that underlying trial, Thomas filed this lawsuit against Kidani for legal malpractice. 2 In her complaint, Thomas alleged that Kidani committed malpractice when he did not argue that Barbati was Thomas’s agent in her purchase of the property. Thomas contends that this “fiduciary fraud” argument would have rebutted Barbati’s successful statute of limitations defense. Kidani filed a motion for summary judgment, arguing that he did present facts supporting an agency claim to the trial court, but alleging that “the trial court did not accept this interpretation of the facts.” Ki-dani also argued that the fiduciary fraud claim is not supported by case law and would not have been successful at trial. The trial court agreed with Kidani and granted his motion for summary judgment, explaining that Kidani “did attempt to argue that the realtor was Plaintiffs sole agent and/or fiduciary; however, the trial court did not accept this interpretation of the facts.”
Thomas appealed to the ICA. On August 26, 2010, the ICA filed a Summary Disposition Order (“SDO”) affirming the trial court’s November 3, 2008 judgment.
Thomas v. Kidani,
No. 29456,
The circuit court did not err in granting Kidani’s MSJ, Omerod v. Heirs of Kaheananui,116 Hawai'i 239 , 254-55,172 P.3d 983 , 998-99 (2007), and the findings in the Order Granting Kidani’s MSJ that Tara [Thomas] contests are not clearly erroneous. Bh akta v. County of Maui,109 Hawai'i 198 , 208,124 P.3d 943 , 953 (2005).
Id. On September 16, 2010, the ICA filed its Judgment on Appeal. On October 26, 2010, Thomas timely filed an application for writ of certiorari, which this court granted on December 7, 2010. On April 28, 2011, this court granted a stay upon motion of petitioner’s counsel. The stay was lifted on June 30, 2011.
II. STANDARD OF REVIEW
A. Motion for Summary Judgment
An appellate court reviews an award of summary judgment
de novo
under the
Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.
Id.
(citations omitted). We must review the evidence in the light most favorable to the party opposing the motion for summary judgment.
Id.
at 137,
III. DISCUSSION
A. The Standard of Review for Motions for Summary Judgment on Appeal
In her application for wilt of certiorari, Thomas argues that the ICA erred because it applied the clearly erroneous standard of review, rather than the proper
de novo
stán-dard.
3
In response, Kidani argues that the ICA did apply the
de novo
standard, and offers the ICA’s citation to
Omerod v. Heirs of Kaheananui,
The parties are correct that the proper standard for an appellate court reviewing a grant of summary judgment is
de novo. Fujimoto v. Au,
Bhakta
is relevant to today’s case only for the articulation of the
de novo
standard. In that ease, the petitioners challenged two of the trial court’s actions: the denial of summary judgment, and the court’s entry of an order supported by its findings of facts and conclusions of law.
Bhakta v. County of Maui,
The clearly erroneous standard is irrelevant to this appeal. In
Bhakta,
the court utilized the standard only in reviewing the facts found by the trial court subsequent to its denial of
summary
judgment.
Id. at
208,
The ICA’s invocation of the clearly erroneous standard is inconsistent with Hawai'i law; the entirety of the trial court’s decision should have been reviewed de novo. We granted certiorari in part to clarify that standard. Having done so, we now perform a proper de novo review of defendant’s' motion for summary judgment.
B. De Novo Review Of The Motion For Summary Judgment
1. Legal Malpractice Standard And Burden Of Proof
The elements of an action for legal malpractice are: (1) the parties had an attorney-client relationship, (2) the defendant committed a negligent act or omission constituting breach of that duty, (3) there is a causal connection between the breach and the plaintiff’s injury, and (4) the plaintiff suffered actual loss or damages.
Coscia v. McKenna & Cuneo,
In this ease, the fact that Thomas and Kidani formed an attorney-client relationship is undisputed. Because of this relationship, Kidani owed Thomas a duty “to use such skill, prudence, and diligence as lawyеrs of ordinary skill and capacity commonly possess and exercise in the performance of the tasks which they undertake.”
Blair v. Ing,
would have precluded the jury from even considering whether Ms. Thomas should have discovered that there was no cesspool on the property, because such an issue would have been irrelevant. Further, such a position would have shifted the burden of proof to the realtor that everything he did was in Ms. Thomas’ best interest. Thus, rather than Ms. Thomas having to prove that the realtor was negligent, acted intentionally, made misrepresentations, etc., the realtor would have had the burden of proof to prove by a preponderance that evеrything he did was in Ms. Thomas’ best interest.
The causation element of legal malpractice is often thought of as requiring a plaintiff to litigate a “trial within a trial.” 7 Am.Jur.2d
Attorneys at Law
§ 223 (2007). That is, a plaintiff must show “both the attorney’s negligence and also what the outcome of the mishandled litigation would have been if it had been properly tried.”
Collins v. Greenstein,
2. Summary Judgment Standard And Burden Of Proof
This court has articulated the following rale for motions for summary judgment:
Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.
Fujimoto v. Au,
The party moving for summary judgment bears the burden of proof to show the absence of genuine issues of material fact and entitlement to judgment as a matter of law.
Stanford Carr Dev. Corp. v. Unity House Inc.,
The Supreme Court of the United States explained the burden of proof in the context of a motion for summary judgment in
Celotex Corp. v. Catrett.
In that case, Myrtle Nell Catrett, acting as administratrix of her deceased husband’s estate, filed a lawsuit against Celotex and other corporations arguing that her husband’s death was caused by exposure to products containing asbestos.
Celotex Corp. v. Catrett,
As articulated within the context of this case, even though Kidani is moving for summary judgment, the ultimate burden of proof in the case rests with Thomas. Summary judgment for Kidani is proper if Kidani shows that Thomas cannot meet her burden of pi’oof. He may do so by showing either that he presented the agency theory at trial (thus defeating the breach element to Thomas’s legal malpractice claim), or by showing that Thomas cannot establish that she would have prevailed at trial, had Kidani presented the theory (thus defeating the causation element).
3. Kidani Shows That Thomas Cannot Meet Her Burden Of Proof That She Would Have Prevailed At Trial
As noted above, a plaintiff in a legal malpractice case must litigate a trial within a trial; she must show that the outcome of the litigation would have been in her favor, had the attorney refrained from committing the alleged breach of duty.
Collins v. Greenstein,
Thomas argues that under a “fiduciary fraud” theory of liability, there is a burden shift, and instead of the plaintiff carrying the burden to show fraud, the defendant carries a burden to show that no fraud was committed. She also contends that the statute of limitations begins running upon actual knowledge of the misrepresentаtion, not when the plaintiff should have known of it. Kidani disputes both arguments. We hold that her argument regarding the statute of limitations is a misstatement of law, and that the application of the proper statute of limitations, combined with the jury’s findings from the underlying trial, show that Thomas would not have prevailed at trial, had Kidani presented her fiduciary fraud argument.
Thomas argues “in cases where the fraud-feasor stands in a fiduciary relationship with plaintiff, courts, including those in Hawaii, generally require that thе plaintiff have actual notice to begin the statute on the claim.” To support her argument, Thomas cites
Poka v. Holi,
The language Thomas cites from
Poka v. Holi
is inapposite to today’s case. In that case, William Poka, a former administrator of an estate, sought specific performance on an oral contract for land transfer he claimed to have made with decedent, Alice Holi, before she died.
Poka v. Holi,
Adair v. Hustace is similarly unsupportive. In fact, the languagе Thomas cites from footnote seven is appended to one of the case’s holdings, a holding that directly contradicts her argument. As this court wrote,
crosselaimants argue that where the basis of a claim is fraud or breach of a confidential relationship, laches should not operate until after a claimant has actual knowledge of the claim, as opposed to knowledge of facts and circumstances sufficient to impute his knowledge of the сlaim. This proposal is untenable....
Adair v. Hustace,
Thomas offers a third ease,
Neel v. Magana,
Under Hawaii’s discovery rule, the statute of limitations begins to run when the plaintiff “discovers or should have discovered the negligent act, the damage, and the causal connection between the former and the latter.”
Yamaguchi v. Queen’s Medical Center,
Kidani also shows that Thomas’s expert declaration from Steven D. Strauss, an attorney licensed to practice in Hawaii, likewise does not satisfy Thomas’s burden of proof. Strauss opined that Kidani had a duty to attempt to plead and prove a cause of action for fiduciary fraud. He also opined that pleading this cause of action would have shifted the burden for the trial from Thomas to Kidani. Kidani contends that Strauss’s declaration does not meet the requirements of
Exotics Hawaii-Kona, Inc. v. E.I. Du Pont De Nemours & Co.,
In
Exotics Hawaii-Kona, Inc. v. E.I. Du Pont De Nemours & Co.,
the trial court awarded summary judgment to defendant Du Pont in a case brought by commercial growers alleging fraud, misrepresentation, nondisclosure, and other claims following a settlement agreement.
The Strauss declaration is similar to the affidavits this court considered in
Exotics
We agree with Kidani that Thomas does not satisfy her burden of proof to show that she would have prevailed at trial becausе her argument relies on the faulty premise that actual notice is required to trigger the statute of limitations. The discovery rule states that the statute of limitations begins running when the plaintiff knew or should have known of the damage. Accordingly, Barbati’s “key defense” that the statute of limitations had run on her claims would have also defeated this agency claim, had Kidani made it. “When there has been a belated discovery of the cause of action, the issue whether the plaintiff exerсised reasonable diligence is a question of fact for the court or jury to decide.”
Vidinha v. Miyaki,
In summary, even though Kidani moved for summary judgment, Thomas retains the burden of proving that she would have prevailed at trial had Kidani presented the fiduciary fraud theory. As the movant for summary judgment, Kidani may prevail if he shows that Thоmas cannot meet her burden. The court holds that Thomas did not carry her burden to prove that she would have prevailed on her “fiduciary fraud” theory in trial. Kidani’s defense against Thomas’s unsupported claim is successful; there are no material facts in dispute that would affect our analysis of this element, and Kidani has shown that he is entitled to summary judgment as a matter of law. The ICA’s judgment affirming the trial court’s grant of summary judgment is thus affirmed, on the grounds articulated above.
Notes
. The Honorable Greg K. Nakamura presided over the underlying real estate case.
. The Honorable Bert I. Ayabe presided over the instant legal malpractice case.
. Thomas raises three additional questions in her application. These questions are no longer relevant to the case because our de novo review affirms the grant of summary judgment on different grounds than the trial court and ICA.
. The
Morgan
rule, inapplicable here, states that a trial court’s denial of summary judgment due to the trial court’s finding of genuine issues of material fact is not reviewable on post-trial appeal.
Bhakta
at 209,
. Federal Rule of Civil Procedure Rule 56 has since been modified. However, the version in effect at the time of
Celotex
is in relevant aspects substantively identical to the current Hawai'i Rules of Civil Procedure Rule 56. We may look to federal cases interpreting their rule for persuasive guidance. See
Pulawa v. GTE Hawaiian Tel,
. Black’s Law Dictionary defines "Laches” as "Unreasonable delay in pursuing a right or claim—аlmost always an equitable one—in a way that prejudices the party against whom relief is sought.” Black’s Law Dictionary 953 (9th ed. 2009). This court has explained that the statute of limitations applies to legal causes of action, while laches applies to actions requesting equitable relief.
Adair v. Hustace,
. There is no explicit statute of limitations for claims of real estate fraud. We need not determine exactly which general statute of limitations should apply because six years is the longest statute of limitations potentially applicable to the case.
See Higa v. Mirikitani,