Zanakis-Pico v. Cutter Dodge, Inc.

parties in- duty non-patient third owes by an

jured accident caused in an automobile prescribed medication reaction to the

adverse physician has days where the

three earlier patient warn the

negligently failed to ability impair driving

the medication are such that

and where the circumstances have been patient could not

the reasonable risk without the

expected to be aware of the

physician’s warning. Factors to consider patient

determining the reasonable whether expected to be aware

could have been knowledge of

risk include: the relative physi- lay persons and risk as between

cians; patient previously whether the experienced the the medication

used and/or effect; warning whether adverse futile.

would otherwise have been

47 P.3d 1222

Mary M. and Thomas ZANAKIS-PICO

Pico, Jr., Plaintiffs-Appellants/Cross-

Appellees, DODGE, INC.

CUTTER d/b/a Plymouth Jeep Eagle, Chrysler

Dodge

Defendant-Appellee/Cross-Appellant, 1-10, Defendants. Entities

Doe

No. 22987.

Supreme of Hawai’i. Court 14, 2002.

June July

As Amended Honolulu, Pico, Jr., on the

Thomas M. briefs, Plaintiffs-Appellants/Cross-Appel- for Pico, Mary and Thomas M. Zanakis-Pico lees Jr. (of Hughes

Roy Hughes F. & Shin James Honolulu, briefs, Taosaka), De- on the for & fendant-Appellee/Cross-Appellant Cutter Inc., Dodge Chrysler Dodge, Cutter d/b/a Plymouth Jeep Eagle. NAKAYAMA,

MOON, C.J., LEVINSON, J., ACOBA, ACOBA, RAMIL, JJ.; with separately. concurring also LEVINSON, By Opinion of Court J. plaintiffs-appellants/eross-appellees, (the M. Pico Mary and Thomas Zanakis-Pico Picos) judgment of appeal from the amended court, Gary first circuit the Honorable Chang on November presiding, filed W.B. argue that the circuit The Picos granting the partially in: motion erred defendant-appellee/cross-appellant Cut- Dodge Chrysler Dodge, Cutter ter d/b/a (Cutter), partial Eagle Plymouth Jeep summary judgment as to based the Picos were entitled its conclusion “benefit-of-the-bargain” in con- to Hawaii pursuant with claim nection (HRS) (1993 chapter & Statutes Revised (2) partially granting Cutter’s Supp.2000);1 §HRS 480- part or commerce are unlawful.” provides trade chapter 480 in relevant 1. HRS competition and unfair "[u]nfair methods deceptive practices in the conduct acts dismissal, or, alternative, (HRCP) motion Hawaii Rules Civil Procedure (1990).6 summary judgment, on its based conclu- Rule sion that the Picos had failed to establish We hold that circuit court erred cognizable damages chapter under HRS concluding allege the Picos failed 480;2 granting motion in Cutter’s cognizable damages respect with to their or, alternative, limine for dismissal statutory chapter claim under HRS them verdict, concluding directed that Cutter was grounded common law claim for relief as a law entitled matter of re- fraud, cognizable common law garding remaining all the Picos’ claims as sufficiently pled. tort claims that the Picos complaint set forth them third amended We further hold that the circuit court cor- subsequent rectly judg- more ruled that definite statement of entitled to and, respect as a matter of claims—specifically, their contract ment law to the lib- Finally, contract claim. erally Picos’ on the record construing opening their on ap- brief us, hold before we that the circuit court did peal, grounded law their common claims in denying not err Cutter’s motion for attor- negligence negligent misrepresenta- either or fees, costs, neys’ Accordingly, and sanctions. tion, advertising, false and fraud.3 judg- we vacate the circuit court’s amended cross-appeals, urging Cutter that the cir- and pro- ment remand this case for further (1) partially denying cuit court in: erred its ceedings opinion. consistent with this partial summary judgment motion for as to I. by BACKGROUND failing dismiss the Picos’ claim punitive damages; partially denying dispute by This an involves advertisement motion Cutter’s to dismiss the Picos’ third appearing September in the or, alternative, complaint amended in the daily editions of both of the Honolulu news- summary judgment, by fading to dismiss the papers general circulation—the Advertiser complaint Picos’ third amended its entire- large print and the Star-Bulletin. at the ty; partially denying request and Cutter’s top, the advertisement a announced fees, attorneys’ costs, sanctions, and by “$13,000,000 INVENTORY REDUCTION” failing pursuant claimed, to enter an award to HRS and “We’re # For a Reason! = (1993)4 (1993)5 §§ 481A-4 Prices!.] 607-14.5 and Volume Low Come on Down supra reasonably by note 1. supported frivolous and are not the facts and law in civil the the action.” argue appeal 3. The Picos do not finding provided circuit court 6.In HRCP Rule 11 erred that Cutter relevant motions, part signed pleadings, regarding that entitled to as a matter of law and other "concealment,” papers by signatory a "outrage” their constitute certificate the tort claims of or might that: whatever those be. information, knowledge, the best of his A-4(b) provides part HRS in relevant that inquiry belief formed after reasonable it is well "[cjosts prevailing party shall be allowed to the grounded by existing in fact and is warranted unless the court otherwise directs. The court extension, good argument law or a modification, faith for the may attorneys' prevailing party award fees to the law, existing or reversal party complaining deceptive if ... the of a trade interposed any improper pur- that it is not practice brought party action which pose, unnecessary such or harass to cause groundless knew to be delay litiga- or needless increase in the cost of motion, pleading, ... paper tion. If a other or 607-14.5(a) provides part: 5. HRS in relevant rule, court, signed in violation initiative, party civil upon upon [i]n action this State a where motion or its own shall relief, money damages injunctive it, impose upon person signed seeks or repre- who just, both, sanction, may, against party, the court it appropriate deems assess sented or party either ... a pay reasonable sum for attor- include an order to to the other neys’ by party parties fees in an amount to be determined the amount of the reasonable upon specific finding par- expenses filing the court incurred because of motion, ty’s pleading, paper, including claim or defense was frivolous. 607-14.5(b) attorney’s HRS mandates reasonable fee. awarding attorneys’ January writing fees "must find in Effective tially rule was substan- party that all claims or defenses made amended. (out- why!! Picos filed On October $0 and find out Cash Down!*” court, complaint in the circuit based on first original). At print and bold the bot- line advertisement, it amended several text, including were lines of two tom five In their third amended times thereafter. asterisks, type-face. in a much smaller complaint, alleged they had the Picos qualifica- was followed first asterisk City lot in re- to Cutter’s Pearl traveled Key all tion: Down on Gold Plus “$0 Cash sponse One of the to the advertisement. pyrnnt. vehicles.” Jeep Laredos advertised Grand Cherokee advertisement, body of The main be- available, and the Picos test drove was still introductory tween the text and fine liking, Finding it to their the vehicle. depictions pictorial of and print, they included agent Picos advised Cutter’s sales specific ready, willing, purchase for fourteen different model terms were able vehicle, instance, whereupon agent informed the sales vehicles. In each the advertise- have make a down them that would ment stated the number vehicles $1,400.00. payment protested, The Picos at the stated terms particular model available that, pointing according to Cutter’s ad- out price appear to be and listed what vertisement, purchased the vehicle could be inventory Five identification numbers. twenty- two for no cash down and hundred price, the models were listed with a cash month, per agent but the sales nine dollars simply for “$0 while nine were advertised per explained that cash down/$229 the “$0 Down,” subject varying monthly Cash month” offer was available recent periods of time.7 payments over various a college graduates who entitled to were prominently displayed premises The first and most Picos “loyalty rebate.” The left purchasing shortly was a “NEW '97 GRAND without the ve- vehicle CHERO- thereafter LAREDO,” hicle. priced “$229 KEE Month* $20,988.” A

$0Mos. Down or second Cash complaint al- Picos’ third amended The print fine at the asterisk bottom leged that had violated numerous Cutter APR advertisement read: “Rebate and on (1) statutory provisions, including: HRS models, combinable, prices not incl. select (2) (1993) (“false advertising”);8 § 708-871 Grad, Loyal- College 480-2(a) (1993) (“unfair Recent $750 $400 $1000 deceptive § or HRS Loyalty (3) 481A-3(a)(9), & ty Rebate on Grand Cherokees § practices”);9 acts or HRS (12) (1993) (11), prac- Rebate on Caravans & Grand Caravans on (“Deceptive and trade 437-4(b) (4) tices”); § pymnts prices applicable (Supp. & all other re- and HRS & 1996) (“False, pymnts/ misleading approved deceptive, All or adver- bates. credit. On addition, tax, tising”).11 In Picos claimed plus lie. doc prices & fee.” $195 supra note price a cash could 9. See 1. 7. Four of the models with also monthly pay- "$0 be had Cash down” and a for plan. ment 481A-3(a) provides part: § 10. in relevant HRS engages deceptive prac- person in a trade A provides part: HRS in relevant 708-871 when, person's course of the busi- tice vocation, ness, (1) occupation, person: person or A commits the of false offense if, pro- advertising with the connection services, (9) goods or with intent property Advertises services motion the sale of or advertised; knowingly recklessly as person makes not to sell them or or misleading or to be made a false state- causes (11) misleading Makes false or statements ment in advertisement addressed for, concerning persons. reason exis- public fact or to a substantial number of, (2) price "Misleading amounts of reduc- includes offer tence or statement” tions; property if or the offeror does or sell services (12) Engages conduct which provide to sell or the advertised intend similarly creates a likelihood of confu- property or services: (a) misunderstanding. price equal than or to or lower sion [a]t price offered.... 437—4(b)(2) "[a]ny provides ad- 11. HRS product stated advertising must be available a vertised False is misdemeanor. 481A-4; generally law, that the advertisement was “mis- HRS and as matter of false!,] leading, deceptive!,] private and in that a standing citizens lack to assert claims 437-4(b) reading pursuant consumer §§ advertisement would HRS 708-871. believe, were, be led to ... PLAINTIFFS The circuit court elaborated as follows on its Jeep dismissing new 1997 chapter Grand Cherokee Lare- reasons for the HRS month, purchased per during do could for hearing claim motion: $229 Cutter’s or, months Cash Down alter- of law ... $0 “[A]s matter the cost of travel is $20,988.” natively, total sum of contemplated The item of under prayed general, special, Chapter Picos puni- and ... the kind of specific really tive perfor- contemplated as well as for Chapter under 480 is (ie., unjust prevent enrichment, mance the sale the vehicle to them cost of advertised) injunctive prohibiting damages.” relief travel is not that kind of false, deceptive, motion, Cutter from further mis- circuit court denied Cutter’s howev- er, leading Finally, advertising. the Picos extent it sought complete prayed that the circuit court Motor order the dismissal of the Picos’ third amended com- Industry Instead, Licensing suspend Vehicle plaint. Board to the circuit court ordered the Cutter’s motor li- revoke vehicle dealer Picos to file a more definite re- statement levy cense and a fíne garding as authorized stat- such claims for relief as remained ute. complaint.12 their third amended complaint by answered Picos’ The Picos filed their more definite state- alia, denying, January inter ment of They advertisement claims on misleading. approximate- realleged was false or chapter After them HRS 480 claim and ly eight discovery, months of Cutter filed a complaint asserted that them third amended partial motion summary as to also set forth: the common law torts 18,1998, fraud, On deceit, concealment, November advertising, the circuit false court, Chang pre- misrepresentation, the Honorable Kevin negligence, gross negli- S.C. siding, granted part gence, outrage, Cutter’s motion allegedly gave rise part. denied it in general, special, The circuit court as punitive damages; ruled to and (2) of law that matter the Picos and They were claim of breach of contract. entitled to for emotional distress clarified that seeking gen- were nominal “benefit-of-the-bargain” in with damages, punitive connection eral damages, specific per- claim, § formance, 480-2 injunctive HRS but denied Cutter’s response, In relief. prejudice respect motion without with to oth- Cutter filed to motion dismiss the Picos’ or, er complaint third amended in the alterna- tive, 1,1999, April for a directed verdict. On Subsequently, Cutter filed a motion to dis- court, the circuit M. Honorable Steven or, complaint miss the Picos’ third amended presiding, Nakashima treated Cutter’s mo- alternative, summary judgment. for tion as a summary judgment motion for 12, 1999, February court, On the circuit it, granted ruling genuine no there were Gail presiding, grant- Honorable C. Nakatani issues of material fact and that respect ed Cutter’s motion with to the Picos’ judgment entitled as of law all matter claims, statutory following: based on the of the Picos’ claims.13 Picos, law, aas matter of had faded damages cognizable 19, 1999, court, establish Finally, May under HRS the circuit 480; (2) chapter the Picos’ third amended presiding, Honorable Gail C. Nakatani complaint allegations supporting costs, set forth no granted request pursuant Cutter’s (1993),14 claim required by § future HRS 607-9 the amount of inventory, delivery findings terms from with order 13. Additional of fact and conclusions period within a during reasonable time.” law entered the circuit court the hear- ing on the motion noted III. section infra exception 12.The Picos took directive to provides part: 14. HRS 607-9 relevant statement, arguing file a more definite that Cut- disbursements, complaint ter's including answer to their third amended All actual but untimely. rendered a more definite statement expenses limited to travel wit- intrastate doubt, doubleness $3,781.25, request When there but Cutter’s denied meaning, or indistinctiveness uncertain- costs, attorney’s pursuant to HRS fees and statute, an expression in a ty of an used sanctions, 607-14.5, supra see note ambiguity exists.... supra Rule note pursuant to HRCP statute, ambiguous construing ambiguous words meaning of the “[t]he II. OF REVIEW STANDARDS context, by examining sought may be Judgment Summary A. Motion for words, phrases, ambiguous with which the may compared, in order sentences grant or circuit court’s deni We review the meaning.” HRS their true to ascertain summary judgment Hawai'i al of de novo. 1-15(1) (1993) Moreover, the courts [ ]. Keka, Community Federal Credit Union determining may aids in resort extrinsic (2000). 213, 221, 11 Hawai'i The avenue is the use legislative intent. One summary granting a motion for standard for history interpretive tool. legislative judgment is well settled: “[t]he ... also consider This court [Sjummary appropriate if the judgment is law, spirit of and the cause reason and depositions, to inter- pleadings, answers it legislature enact which induced file, together rogatories, and admissions on meaning.” HRS its true to discover affidavits, any, if show there 15(2) (1993). § 1 fact genuine issue as to material (some 94-95, cita- 26 P.3d at 583-84 Id. at moving party is and that entitled quotation marks added and tions internal A fact of law. as matter (brackets original). original) some in proof if of that fact would have material ’ refuting establishing or one C.Attorneys the effect of Fees And Costs a cause of action the essential elements of circuit court’s denial review the We parties. by the or defense asserted for abuse of attorneys’ and costs fees light most in the evidence must be viewed Au, 95 Hawai'i Fujimoto v. discretion. non-moving party. In oth- favorable to the (citing Eastman 19 P.3d words, must view all of the evidence er we McGowan, 86 Hawai'i therefrom the and the inferences drawn Weinberg v. (quoting opposing 52-53, party light Mauch, most favorable 78 Hawai'i denied, 289-90, 78 Hawai'i motion. reconsideration (1995))). ‘“An abuse P.2d 172 (citations quotation marks and internal Id. clearly if the trial court discretion occurs omitted). or has disre bounds of reason exceeded the Statutory Interpretation B. practice law or principles garded rules or party liti of a detriment to the substantial the circuit court’s inter We review ” 137, 19 P.3d Fujimoto, 95 Hawai'i gant.’ of a statute de novo. State pretation Davia, 87 Hawai'i (quoting at 720 State 83, 94, Pacheco, 26 P.3d 96 Hawai'i (citations (2001). guided statutory construction is Our omitted)). signals quotation and internal by rules: established statute, construing a our foremost When III. DISCUSSION to give and effect obligation is to ascertain Chapter Con- to HRS A. Pursuant which to legislature, is intention of the the Actually Pur- Do Not sumers Who language primarily from the be obtained . May Recover Or Services chase Goods And we in statute itself. contained the Damages. Statutorily Prescribed in con- statutory language the must read concluded, as a mat court it in The circuit statute and construe text of the entire law, to Picos had failed “estab- purpose. ter with its a manner consistent court, may by be counsel, reasonable deposition and deemed expenses for and nesses determining In of costs. taxation originals copies, other inci- allowed transcript and taxed, costs, be what costs should whether and including copying intra- expenses, dental equities of the situa- charges, consider long telephone distance state postage, attorney by parly, tion. or a sworn required damages cjhapter lish plaintiff, plaintiff [HRS under is for the shall and, thus, had 480” failed to state a claim be attorneys’ awarded reasonable together under the statute could fees relief be with the cost of suit. granted. prem- court’s conclusion was chapter “injury” neither HRS defines nor actual- ised the fact the Picos had not but it “damages,” does define the term “con- ly purchased the or advertised vehicle other- part mean “a sumer” relevant natural Thus, 'given any wise value to Cutter. who, person primarily family, personal, or circuit court kind of dam- concluded purposes, purchases, attempts household ages by contemplated chapter HRS 480 were purchase purchase, goods or is solicited to or enrichment, prevent unjust “to and the cost (1993) (emphasis services[.J” § HRS 480-1 damages.” travel is not kind of added). regard, circuit court erred. Thus, plain language of the stat appears specif- It that this court has never legislature ute reflects that the intended not ically parameters cognizable addressed the only protect persons actually pur who 480; damages chapter particu- under HRS goods or chased services as result of unfair appellate lar the Hawaii not courts have deceptive practices, or acts and but also damages considered whether are recoverable attempted those who or were solicited to do purchase under the statute absent an actual strange legisla so. It would most if goods Wiginton But see services. sought protect persons had such ture but Corp., Haw.App. Credit Pacific provide any remedy. failed to them with In that, (holding under 480-13(b) deed, § qualify HRS not does chapter plaintiff wrongfully HRS in- limit way. the term “consumer” We payment duced to make a could asso- recover therefore construe the term “consumer” as it fee, costs—including money ciated order 480-13(b) appears § consistently HRS gasoline, parking, general wear tear § with its definition in 480-1. Reading HRS pay- his automobile—in addition to permit § 480-13 recovery HRS itself). Following ap- ment our well—settled injuries by sustained means of proach statutory interpretation, we look purchases actual generate would an absurd plain language first to the of the statute. legislature presumed “[TJhe result.16 480-13(b) (1993)15provided HRS rele- result, legislation intend absurd part: vant avoid, possible, will if be construed to incon Any injured by any consumer who is contradiction, sistency, and illogicality.” deceptive

unfaii- practice act or forbid- Kida, Inc. v. 96 Hawai'i Hawai'i Beneficial 289, 309, by den or unlawful 480-2: declared section (2001) (citations 914-15 omitted). quotation and internal marks May by sue sustained 1-15(3) (1993) (“Every consumer, and, also HRS construc if absurdity tion which leads to an shall be plaintiff, for the shall rejected.”). Accordingly, plain lan awarded a sum than less statute, guage of $1,000 pur the entire no actual or threefold necessary prerequisite sustained, chase to a sum is whichever recovering damages consumer under HRS greater, and reasonable attor- 480-13, injuries stemming based on from together neys with costs of fees the § violations of suit; HRS 480-2.

(2) May bring enjoin proceedings assuming statutory to the But even ambiguity, practices, legislative history

unlawful and if the underlying chap- decree the HRS 15, 1998, 480-13(b)(l) 1, July § 15. Effective HRS and the definition of that Cutter substantively stylistically 480-13(b). was both amended urges § into HRS The statute would directly analysis respects material to our “Any attempts [person pur- then read: who case, in this note 16. see See goods injured by any infra or services] chase who 179, § 2 Sess. L. Act at 668-69. deceptive practice may unfair or act or sue damages [resulting pur- from actual readily apparent by inserting 16. This is the defi- added.) goods (Emphases chase or services].” “consumer,” § nition of as set forth in HRS 480- practices; it therefore foregoing deceptive acts inter- 480 is in accord ter $1,000.00 below, minimum assured follows argued based on pretation. Cutter to all recovery to be available was intended addressing the legislative reports committee consumers who could demonstrate § in- 480-13 that 1969 amendment HRS history suggests that Nothing in the injured by of the persons violations sured anomalous result legislature intended the $1,000.00, recovery of not less than chapter a spent ninety-nine cents that a consumer who con- legislature intended potentially re- overpriced soda could on an actually purchased goods or ser- who sumers $1,000.00, expend- a who but consumer cover under the would be entitled recover vices money pursuing an far time and ed more legisla- Specifically, Cutter cites the statute. nothing. illusory bargain could recover who expressed concern that consumers ture’s low-priced unlikely purchase items would be statutory construction foregoing The $1,000.00 pursue relief absent the assured chapter 480’s function is consistent with HRS recovery. minimum Sen. Stand. Comm. See abating practices that a as mechanism Journal, 600, at Rep. No. in 1969 Senate injure general. potentially consumers 607, 1111. Ltd., Haw. Agency, Ai v. Frank Huff (1980) history 616, 1304, too legislative (noting reads $1,000.00 lan narrowly. § assured minimum “was constructed broad HRS 480-2 tool to recovery legislative guage intent to do to constitute flexible manifests order fraudulent, decep unjust unfair or simply prevent stop prevent enrichment more than protection of practices for the expense purchased who tive business at the consumers businessmen”), both consumers and honest relatively inexpensive goods. As both the Haw grounds Robert’s at overruled on other legislative houses declared the time Bus, Laupahoehoe $1,000.00 Inc. v. recovery minimum was ai'i School assured 480 n Co., Inc., 480-13, Transp. 91 Hawai'i chapter § to HRS HRS added (1999); v. R. Kukui Nuts Hawai‘i purpose “encourage those paramount was 598, 610, Co., Inc., Haw.App. engag- by persons Baird & who have been victimized (1990); Toro Man Beerman v. deceptive practices acts or to P.2d ing in unfair or claim,” Corp., Haw.App. thereby affording ufacturing “an prosecute their (1980). misleading False or prac- P.2d to those who would additional deterrent damage when do them deceptive business acts.” advertisements tice unfair and would not that a consumer Rep. in 1969 induce action No. Stand. Comm. Sen. Journal, 1111; If a consumer have undertaken. Hse. Comm. otherwise Stand. Senate injury, § 480- Journal, resulting HRS at 882- can establish Rep. No. 1969 House 13(b)(1) greater Thus, him or her legislature sought protect entitles $1,000.00 statute’s damages.17 The by unfair or treble adversely affected all “consumers” elder, court, legislature other civil supra in addition in note 17. As indicated penalty 480-13(b), July may impose not to penalty, a civil § effective amended HRS $10,000 § for each violation. L. Act 2 at 668- exceed 1998. 1998 Haw. Sess. amount, alia, any, (b) following determining if added the In Act inter (a), 480—13(b)(1): the court penalty proviso civil under subsection to HRS following: elder, shall provided is an consider that where the wil- alternative, person's was in conduct Whether plaintiff, be award- in the elder; rights disregard of the $5,000 ful or threefold not less than ed sum damages person knew or should Whether the plaintiff, whichever sustained person’s conduct determining known that greater.... wheth- sum is the elder; targeted $5,000 in an directed toward adopt alternative amount er to elder, vulnerable elder was more Whether the court shall consider the award to an person’s than other con- to the conduct 13.5[.] set forth in section 480 factors health, age, poor 480—13(b)(l) infir- because of (Supp.2000). 480- sumers HRS HRS created, understanding, mity, impaired restricted (Supp.2000), 179 also which Act 13.5 mobility, disability; provides: § or 1 L. 1998 Haw. Sess. Act loss, (4) damage injury, or penalties The extent of civil for consumer Additional elders, elder; (a) per- suffered against If a committed frauds appro- Any deems factors the court 480-2 a violation under section son commits toward, injures priate. targets, or an which is directed 318 N.J.Super. is with both scheme consistent its A.2d plain purpose. language legislative and its (holding plaintiff that could recover “ moneys ‘ascertainable loss statutory construction foregoing is fees, property,’ together filing with counsel consistent with federal and

likewise relevant costs, fees and if no reasonable even contract misleading A state case law. false or adver parties,” between executed under tisement has been held to violate the Federal consumer-plaintiff circumstances which regardless of Trade Commission Act wheth purchase given had had made no but defen actually purchases any goods aer consumer (citations thirty deposit dant dollar omit deception.18 a result of the services as ted)); Honda, Beslity v. Manhattan Int'l, Figgie Trade v. See Federal Comm’n Cir.1993) (N.Y.App. Misc.2d Inc., (9th N.Y.S.2d (predi F.2d Term.1983) (holding plaintiff was enti cating liability not on the fact defendant’s detectors, fifty statutory tled to the dollar minimum sold heat but on defendant traveling practices or fraudulent it em to car dealer’s show dishonest them); advertisement, ployed room to sell Resort Car Rental based false but de Comm’n, Sys., nying Inc. Federal paid being Trade him extra after $250.00 (9th Cir.1975) (holding F.2d deal”); apprised of the “real Weaver v. J.C. Federal Trade Comm’n Act is violated if “it Co., Penney App.2d 53 Ohio 372 N.E.2d through deception, induces the first contact (holding 635-36 that no sale need buyer fully if even later in becomes actually place for a take order contract”); entering Spie formed before statutory recover the one hundred dollar Comm’n, gel, Inc. v. Federal Trade 494 F.2d minimum); Sight ‘N Ap Brashears v. Sound Cir.1974) (7th that, (holding while Centers, Inc., (Okla.Ct. pliance 981 P.2d 1270 “[protection public jus of the is essential to App.1999) (holding plaintiffs’ loss of tify filing complaint[,] proof a Section time, inconvenience, telephone travel and ex unnecessary injury support of actual is penses legally cognizable damages were un order”). Commission cease and desist Most Act, der the Protection Oklahoma Consumer jurisdictions of the that have state addressed despite actually fact that never question purchase whether an actual defendants); purchased anything from but required, within the context similar con see Ceshker v. Bankers Commercial In Life statutes, sumer fraud order state a (Tex.Civ. Company, surance 558 S.W.2d granted, claim upon which relief can be seem App.1977) (holding that “[a] consumer in agreement ap to be with the federal bring action an alleged based mis See, proach. e.g., Piano McCormick & Or representation policy of an insurance which (Ind.Ct. Geiger, gan Co. v. N.E.2d bought” he never under the Tex. Bus. & (“to App.1980) say actually that a sale Comm.Code). place take would the intent of circumvent being Deception Legislature great pains took the evil consumer include regardless prohibited rectify, fraud seek to deceptive acts of solicitation statutes conduct”); Dodge, purchases resulted, Truex Ocean 219 whether actual (c) course, Act, chapter, As used this "elder” means a Of the Federal Trade Commission sixty-two years 480-2, age consumer who is exclusively by unlike HRS is enforced older. government agency, comparison, so the for the govern Although HRS 480-13.5 does this purposes utility is of limited and not case, we that there is evidence in note expressly mandated the statute. What rele- record that either of the Picos was during "elder” however, purposes, vant for our that "the period. the relevant predicate factual for the cause action rests in deception public.” of the Federal Trade Comm'n 480—2(b) that, construing "[i]n 18. HRS directs Williamson, section, Brown and 778 F.2d 40 n. 2. die courts and die offices of consum- (D.C.Cir.1985) (comparing Federal give Trade protection er shall due consideration Act, rules, regulations, Act and the Commission Lanham which are decisions Federal addressing Trade preting Commission the federal courts inter- tire two statutes federal false advertis- 5(a)(1) Trade ing). section of the Federal Com- (15 45(a)(1)), mission Act U.S.C. as from time to time amended.”

319 Haw.App. 2 Fin. Co. why a er v. no reason consum- there is discernible Hawai‘i Beneficial 1071, 01, 307, actually purchase P.2d 1076 required to er should 3 480-13, (“under ... precondition §§ 480-2 and goods or services as a [HRS] action, alia, damages damages personal for for for bringing an inter there is no room injuries recovery injury from caused false or can no hence[ ] that result there misleading We pain suffering”); advertisements. therefore Beer for mental injured 111, Haw.App. a consumer who is as Mfg. Corp., hold that man v. Toro goods attempting purchase 117, 749, (barring result of recov 615 P.2d practice pro- virtue of act or injury services ery damages personal for under may 480). § by HRS 480-2 recover dam- hibited chapter HRS chapter HRS § ages pur- HRS No actual injury under 480-13. designed personal a vehicle for if necessary. Accordingly, Cutter’s actions, already chase law respect to which the with 480-2,19 § Rather, advertisement violated HRS provides adequate, remedies. have stated claim for Picos con legislature sought regulate granted pursuant can be which relief HRS by preventing and commerce duct trade 480—13(b)(1). Haw.App. § at Wiginton, practices that deceptive unfair acts and Cf. 444, (holding at 118 that 634 P.2d consumer- injurious and con to other businesses are out-of-pocket plaintiffs included ex- marketplace. sumer-participants See order, money penses gasoline, parking, Beerman, Haw.App. at P.2d and tear automobile result- wear In practice). unfair addi- ed from business tion, precluded plain language Finally, of HRS 480- by the the Picos are enjoin 13(b)(2), may Picos under HRS seeking punitive seek from 480-13(b) of such chapter future use advertisements. HRS enumerates may specific damages a consumer however, not, may Picos The recov chapter—the greater of recover under the “benefit-of-the-bargain” er $1,000.00 damages—and makes or treble of a con preconditioned are the breach also provision punitive See Holiday Macadamia Hawaiian tract. See Leibert, (holding 788 P.2d 833 71 Haw. Co., Co., Indem. Inc. Industrial Nut under damage award the maximum (1994); Hawai'i compensatory chapter 480 is treble HRS Arita, Haw.App. Burgess v. 162, 931 Yang, damages); Han v. 84 Hawai'i (1985). contract dam Such Leibert). (citing (App.1997) P.2d 604 speaking, available ages, generally under chapter 480. Leibert v. Finance HRS B. Cowrt Erred Conclud- The Circuit Ltd., Factors, 788 P.2d 833 To Entitled ing That Cutter Was (1990). But, for the discussed reasons infra A Law With Judgment As Matter III.D, the circuit we hold section Of On To The Picos’ Tort Claims Respect correctly that there was no concluded court To That Picos Failed Basis The The present Similarly, matter. contract Pecimiary Loss.” Allege “Substantial specific performance assuming arguendo that chapter remedy under HRS is a available that the circuit Picos assert denying not err the circuit did ruling that was entitled court erred performance. request specific the Picos’ respect with a matter of law Benton, Haw.App. See Schrader claims, alleged in which to their tort (failure prove duty to advertise “its that Cutter breached specific per precludes of a contract existence construing liberally truthfully.” Specifically, formance). brief, argue opening the Picos seem then- entering judg

Moreover, court erred in that the circuit not recover the Picos respect to their ment favor of Cutter Ailetch- damages for emotional distress. See 480-2, we reach it either. do not violated HRS did not reach the 19. Because the circuit court in fact question whether Cutter’s advertisement (1938). sounding negligence claims relief in compen- or Torts aim The of fraud, negligent misrepresentation, put and false sation in deceit is to the cases advertising. appears position It circuit in [or she] court he would have been negligence [or construed the Picos’ claim had not been she] as a he defrauded.... negligent misrepresentation20 recovery claim of There be no for mental an- guish premised intentionally that a not concluded claim relief on humiliation in- misrepresentation flicted .... negligent or either fraud required a showing pecuniary “substantial Pecuniary damages, being narrow in granted court loss.” The circuit therefore (either damages are scope, general those summary judgment in favor Cutter’s special) accurately or which can calcu- against respect the Picos with to the Picos’ monetary lated in terms such as loss of negligent misrepresentation and fraud claims wages expenses. and cost of medical dollars, on basis that three to five cases, pecu- fraud or deceit the measure allegedly spent gasoline the Picos on in reli damages niary usually confined either advertisement, ance on Cutter’s was not ‘out-of-pocket’ loss or the ‘benefit enough “substantial” to constitute “substan bargain’.... of the pecuniary tial loss.” The circuit court does Crockett, 45, 52-53, Ellis v. appear specifically any to have addressed (1969) (some 814, 820 citations and footnote advertising." 21 claim for relief based on “false omitted) added); (emphases also Haw Anderson,

ai'i’s Thousand Friends v. Haw. P.2d This in court held that order to (“plaintiff must show that he [or she] suf grounded maintain claim for relief in fraud Thus, pecuniary fered damage”). substantial deceit, juxtaposition “substantial actual damage” must have suffered substan- “nominal” or “speculative” indicates, damage, specu- tial actual plaintiffs nominal suing fraud Prosser, (3d lative. Law required Torts are show both that suffered 1964). ed. courts pecuniary The have often ex- actual loss and that such pressed requirement pecu- ascertainable, this terms are definite and rather than niary damage, ... as speculative. does the Restatement no There is threshold amount So, know, suggested following colloquy you 20. This is brings Cutter Mr. kind of during February limine, hearing on Cutter' well, saying, defense his case we didn’t do motion strued which the circuit con- intentionally people. Maybe this to defraud summary judgment: as a motion for my guy any who ad writes the doesn’t know And ask [Cutler]: on basis I defense, Okay. better. If that’s their then failing Court dismiss their fraud claims negligent misrepresentation part that’s their pecuniary show substantial loss as well as mis- going I rather than intentional. don’t think it’s representation claims. fly. totally bogus. I think it’s any negligence far Court: So as And, know, you perfectly happy I’m to not fraud, negligence those be the would and fraud just I make claim because would as soon .that claims? go jury jury to the ask is this intention- Yes. [Cutter]: al or not? Is The Court: this wilful or not? Is this a There’s other—I don’t think I any negligence saw other I disregard rights claim. mean people it’s conscious negligent misrepresentation, the fraud or de- reading who are not, ad or this not? And if it is ceit which—and the contract claims.” negligent, they appear negligent if it’s When the circuit court asked the Picos to address oh, my part, goodness, we didn't realize "negligent misrepresentation question,” college graduates Jeeps recent who owned arguably sounding Picos abandoned claims only qualify ones who here for this ad. negligence by responding: kind Okay. Fine. Then I’ll let Mr. off Cutter negligent. [The Picos]: I don’t think this was Dodge hook I’ll let Cuter off the hook. allege negligence— I didn’t I don't think that’s I And the case. think Okay. The Court: bogus. that’s put [The Picos]:—to it in our more definite depo- statement because Mr. his advertising” 21. There is no tort "false under gave basically sition they a basis for defense that law, negligent Hawai'i and we were rather decline establish one in than intentional part.... appeal. conduct on their Pocket’ considerations do required pecuniary in order for loss to be fraud.... ‘Out of however, not, recovery Turner v. prevent deemed “substantial.” General con- Cf. Bureau, Inc., Adjustment 63 n. damages proximately caused sequential (Utah (rejecting Ct.App.1992) argument (cita- vipon misrepresentation[.]” reliance “substantial” in order omitted) (some emphases added and tions fraud), to be for overruled on recoverable in original)). the some grounds by Campbell other v. State Farm money — Accordingly, hold that that we the Co., 89, Mut. 2001 P.3d Auto. Ins. UT expended responding to Picos in the Cutter’s (2001) —, (holding WL that 2001 1246676 advertisement, proved, if satisfies re- damages are for emotional distress recovera pecuniary of loss” fraud). quirement “substantial ble for necessary support a claim for relief us, nevertheless, urges affirm in grounded fraud. damages “[t]he the circuit court because a claim confined recoverable under fraud Furthermore, pocket’ assuming ‘out of of the it was either ‘benefit 20,

bargain’ damages.” abandoned, This court has never we supra note hold see specifically kind of addressed whether the damages adequate were also Picos’ damages alleged Picos constitute “out- negligent misrepresentation maintain a sup of-pocket” sufficient to losses and are This has that a claim. held fraud, a in port grounded claim for relief but claiming misrepresentation negligent they do. The loss we have doubt “(1) supplied [is] that: false information show money alleged by they Picos is the a failure reason result to exercise consequence spent a of them reliance communicating competence care or able consequential advertisement. Such Cutter’s (2) information; person whose proven, pocket” if “out constitute supplied the information suffered benefit losses. v. Tele See Ostano Commerzanstalt (3) loss; recipient upon relies (2d Inc., 642, Systems, wide 880 F.2d 648 misrepresentation.” Ing, Blair 95 Hawai’i Cir.1989) (“Damages fraud include 452, (2001) 247, 269, (citing 21 474 P.3d Ko for, performing, preparing costs incurred Touche, Agriculture v. & 86 hala Deloitte passing up opportunity, other business 141, 301, 323, (App. 949 163 P.2d Hawai'i making as well as costs incurred reason (Second) 1997), and Torts Restatement mitigate damages[.]”) (citing able efforts to (1977)). may Plaintiffs recover the § 552 Paper D. Fort v. William Wit Howard Co. justifiable pecuniary caused losses (2d ter, Cir.1986), Inc., 784, F.2d n. 6 787 793 misrepresentation. negligent on a reliance Corp., 205 v. Elevens Lanite Sales Co. States ex rel. Bronster v. United State (Sup.Ct. Misc. N.Y.S.2d Corp., 82 Hawai'i Steel 1954)); Signal Companies, Walker (1996) “pecuniary (recognizing that losses are Cal.Rptr. Cal.App.3d negligent misrep claim for in a recoverable (“A consequential party dam recover Park, resentation”); Haw. Chun resulting from acts in ages his reliance (approving “out party’s misrepresentations.”); Cas the other in connection pocket” expenses incurred Cooke, tle & Inc. v. Lincoln Merchandise purchase property of a reliance with the Corp., A.D.2d 477 N.Y.S.2d misrepresentation). But upon negligent (“[T]he prime standard (N.Y.App.Div.1984) Partners, Express, Express City Inc. v. see measuring pecuniary loss sus actual Hawai'i of fraud is the ‘out tained as direct result (holding that “in of construction the context Recovery profits pocket rule’.... negligence alleged litigation regarding the in the absence would have been realized negli action for design professionals, tort pocket’ possible the ‘out of fraud is not under misrepresentation alleging gent theory party is ... because the defrauded is not available purely on economic loss based recovery sum solely to [the] entitled with, design party privity of contract oc necessary position restoration to the ]”). professional cupied commission before Although pecuniary gener- negligent claim, such will misrepresentation losses assuming transaction, it, ally completed they supra stem from a have not abandoned Accordingly, note 20. According not. the circuit need court erred the Restatement (Second) in granting summary judgment Torts, in favor of recoverable Cutter on the basis that the Picos’ negligent misrepresentation for a are: inadequate. were [damages] necessary compensate those pecuniary for the loss to him C. Circuit Err Did Court Not misrepresentation [or her] of which the is a Failing To Dismiss The Picos’ Third cause, legal including Complaint Entirety Amended In Its (a).the difference between value of Sufficiently For Failure To Plead what [or he received the trans- she] Any Cognizable Common Law Claim. purchase price action its value Finally, argues in its Cutter cross- it; given and that, appeal the whatever merits of the Picos’ (b) pecuniary loss otherwise as suffered claims, common law the circuit court erred in consequence plaintiff’s a the reliance of failing to dismiss Picos’ third amended upon misrepresentation. complaint entirety in its when it dismissed (Second) (1977) Restatement Torts 552B of claims, statutory the Picos’ because them added). Thus, (emphasis agree. pecuni- We complaint provide did fair of notice ary stemming attempt losses from an to con- particular, common law claims. In ar Cutter duct a transaction upon reliance informa- gues that the Picos failed to a “fraud” state are, negligently supplied tion assuming the specificity claim by with the demanded plaintiff has established the other elements Inc., court in Systems, Larsen v. Pacesetter tort, support sufficient to a claim for (1992).22 P.2d misrepresentation. negligent agree We that the Picos’ third amended Therefore, because the claim to Picos complaint is not a of clarity.23 model Never- spent gasoline their three to five dollars in theless, we need not consider whether them advertisement, upon reliance Cutter’s alone, complaint, standing satisfies Hawai'i they allege was intended to induce them to (HRCP) Rules of Civil Procedure Rules 8 (2000)24 visit purpose purchas- Cutter’s lot for the (2000),25because, and 9 when the automobile, ing they have shown sufficient speculate circuit court regarding declined to purposes maintaining might a common-law that claims lie there- Larsen, 30-31, claims, 22. 74 Haw. at expressly identify 837 P.2d at rise to their it does not recognized we that: particular common law actions that Picos QHRCP[)] seek to assert. [Hawai'i Rules of Civil Procedure 9(b) provides Rule all "[i]n averments of constituting fraud ... the circumstances fraud 8(a) provides 24. part: Rule HRCP in relevant particularity.” or mistake shall stated be with pleading Claims for A Relief. which sets designed, part, rule The to insure the relief, original forth a claim for whether an necessary particularized information for a de- claim, counterclaim, cross-claim, third-par- prepare fendant to an effective defense ato claim, (1) ty plain shall a contain short variety poten- claim which embraces a wide showing plead- statement of the claim Miller, Wright tial conduct. 5 & Federal Prac- relief, (2) er entitled a demand for (1990). Thus, tice Procedure at 580 % pleader for the relief the seeks. Re- 9(b) general allegations under Rule of "fraud” lief in the or of alternative several different are insufficient because serve little or no may types be demanded. function, informative v. Mutual Ins. Wolfer Life York, Haw.App. New Co. 9(b) provides part HRCP Rule in relevant (1982) Wright Miller, (citing & that, ., all "[i]n averments fraud .. circum- Federal Practice and Procedure 1298 at 415 constituting ... stances fraud shall be stated (1969)); rather, state the cir- intent, particularity. knowledge, with Malice constituting cumstances fraud or mistake with person and other conditions of mind of a particularity allege (e.g., who made the false generally.” averred We note that the Picos’ representations) specify representa- complaint particularizes third amended Crockett, tions made. v. Haw. Ellis made, (2) representations false Cutter's knowl- (1969). edge falsity, upon of their tire Picos’ reliance Although complaint representations, the Picos’ third amended their not, however, specific giving complaint specifically allege does describe the circumstances does in, respect contract a more ter of law with chose to move for definite Indeed, generally ap this is statement. argue that adver- claim. The Picos Cutter’s to resolve ambi propriate manner in which amounted to contractual offer tisement See, e.g., pleadings. Seligson guity accept, thereby creating an they were free Tree, F.Supp. Plum disagree. We enforceable contract. (E.D.Pa.1973) (construing a motion to dis failure to miss a claim fraud for state the appears that this court has never It constituting fraud as a circumstances motion directly question whether addressed the statement), a more overruled on definite can constitute a contractual advertisement Machinery grounds Indus. Seville Co., But Trust offer. see Sutton Hawaiian Corp. Machinery Corp., Southmost (1959) (announcement Ltd., 43 Haw. 310 (3d Cir.1984) (recognizing F.2d property will sold at auction is certain (FRCP) Federal Rules Procedure Civil merely binding offer to but contractual sell 9(b) necessarily require Rule does not fraud an auction date, of intention hold declaration allege place, plaintiffs specific received). misrepresentation); of each Britz v. at which will be There time bids substantia] Corp., 87 Nev. Consolidated Casinos among courts that agreement (1971) (“failure 915-16 however, that question, have addressed the requirement comply particularity [the listing goods merchants advertisements subjects com pleading fraud] price generally particular for sale a are at plaint to a motion for a more state definite deal, binding rather than con invitations to ment, very or at the worst to dismissal with may freely tractual that consumers offers Sax, (citing to 294 F.2d leave amend” Sax Bloom, 27 See, Georgian accept. e.g., Co. v. (5th Cir.1961))). As this court has stat (hold (1921) 813, Ga.App. 108 S.E. ed, adoption “by of HRCP we have re “ advertisements, ‘stating ing newspaper (the jected approach pleading game is a quantity a that the has certain advertiser misstep by in which counsel of skill one dispose of goods which wants to [or she] he and in decisive to the outcome’ turn ac not which become prices, at certain are offers purpose cepted principle ‘the any person to whose contracts as soon proper to ” a pleading is facilitate decision Kim, 215, 221, signifies they might [or her] come his the merits.’ Hall v. notice (quoting Conley v. by notifying the that he acceptance [seller] Gibson, 99, 2 355 U.S. 78 S.Ct. quantity of will take a certain [or she] (1957)). Consequently, although L.Ed.2d 80 Sch., ”); Steinberg Chicago Med. them[ ]’ complaint, standing Picos’ third amended N.E.2d Ill.2d 13 Ill.Dec. deficient, alone, might it we review (noting that advertisements conjunction Picos’ more with the definite price invitations goods at a fixed are sale of statement, alleges plethora which com offers); binding Osage to deal rather than (as torts, including law fraud well the mon Homestead, Sutphin, 657 S.W.2d Inc. giving rise specific circumstances to ad (holding that an (Mo.Ct.App.1983) 351-52 claims), sufficiency of which Cutter has speci offering riga at a sale vertisement challenged. not offer); Ehr price not a contractual fied was Co., App. lich v. Willis Music Ohio Binding Being D. There No Contractual (1952) (noting that an adver 113 N.E.2d 252 Agreement, The Circuit Court Cor- specified of a television at a rectly tisement for sale That Cutter Was Enti- Ruled A Judgment To As Matter than an invitation price tled “was no more Of Respect store”). Williston, Law With To Picos’ Con- A See also patronize tract Claim. § 4.7 at Law Contracts Treatise (4th 1990) (“if goods are adver 286-87 ed. urge that the circuit court The Picos price, generally a certain it is mat- tised for sale at granting as a erred state- the Picos’ more definite published was corrected ment, was in or- that Cutter's advertisement upon specifically alleged "fraud.” induce consumers also der to reliance which This contained therein. omission information offer, $3,000 an offering not contract is be- a minimum formed tisement “allow pur- cause of an intending the statement of ance” for vehicle that a consumer traded specified quantity in, value, chaser that will regardless he take a its actual constituted (Sec- price”); at goods offer); Restatement binding contractual Hen Oliver v. (“[a] ond) § 26 at 75 Contracts ley, (Tex.Civ.App. S.W.2d 578-79 1929) willingness manifestation of into a enter advertisement, (holding that an offer person bargain is not an offer if the whom each, “ship ing freight sacks of 3 bushels it addressed knows or has reason know prepaid, any point per in Texas for $4 person making it does not sack, intend tagged according said sack to our state bargain until a fur- conclude he made laws,” binding seed constituted contractual assent”). than ther manifestation Rather offer); Bank, Chang v. First Colonial Sav. offer, an make advertisements invite offers (1991) (hold 242 Va. 410 S.E.2d by prospective purchasers. “Only when ing that promising bank’s advertisement two money accep- merchant takes there an gifts $20,136.12upon free maturing 3½ purchase.” Steinberg, tance of offer to years exchange $14,000 for a deposit con 639; 13 Ill.Dec. at N.E.2d see also accepted stituted offer that was when Osage, 657 (holding S.W.2d 351-52 that a $14,000 deposited). In such advertise contract for sale an advertised item was ments, ordinarily “there must be some lan complete accepted until the seller guage of commitment or some invitation to buyer’s purchase offer to based on the adver- take action without further communication.” tisement). (Second) Restatement at 76 Contracts (1981); also Corbin on 2.4 Contracts narrow, very yet There well- (1993) (noting at 116-122 that advertisements established, exception rule, presumed to be offers unless “clear, arises when advertisement is defi unusually contain clear words to con nite, explicit, nothing open leaves trary). negotiation.” v. Great Minne Lefkowitz Store, apolis Surplus Minn. agree foregoing We with the well- (1957); N.W.2d also R.E. see Cram principles. Accordingly, established hold we (7th Nuveen, mer & Co. v. 147 F.2d generally that advertisements are not bind Cir.1945) (holding inviting that advertisement offers, ing they contractual ac unless invite specific bond-holders to them to a send bonds ceptance negotiations without further in designated bank for pursuant surrender clear, definite, express, and unconditional clearly specified binding terms constituted a language. offer); Pepsico, contractual Leonard (S.D.N.Y.1999) (hold F.Supp.2d provisions of Cutter’s advertisement ing any that “the absence of words of limita upon rely asserting the Picos in tion[,] come, served,’ such ‘first [ren first binding contract claim do not a constitute alleged fighter jet dered] the offer a in [for contractual offer. As described su- detail exchange ‘Pepsi-points’] I, sufficiently for pra exception indef section with the ]”); prices inite no contract could be formed[ cash stated for five the fourteen vehicles, Corp., v. RRL Cal.4th hardly Donovan was a advertisement Cal.Rptr.2d clarity. model of The Picos ad- themselves (holding that a they licensed automobile mitted dealer’s were not all of certain what regarding particular print a advertisement vehicle the fine at the bottom the advertise- specific price light at a constituted offer ment meant. ofOne the few clear and intel- Code, of the California ligible Vehicle which ren print, statements located in the fine however, illegal dered the failure to sell the at approved vehicle was that sales “[o]n were price any person the advertised while it But credit.” a condition that a sale “on unsold); (Gus) remained Izadi v. approved Machado cannot credit” constitute an offer Ford, Inc., (Fla.Dist.Ct. a unilaterally So.2d ac- consumer free App.1989) (holding cept.26 that car e.g., dealer’s adver- Ford Motor Credit See] Co. offer, financing acceptance 26. Even if the advertised were terms would condi- still been Industry Li- Russell, (Minn.Ct.App. 519 N.W.2d The Hawai'i Motor Vehicle 1994) censing similarly regulates advertise- (holding containing Act advertisement financing binding by for licensed terms not a offer be ments the sale automobiles (1993 everyone qualified financing). Supp.2000), not for cause dealers. 437-4 & HRS Thus, per the advertised cash relating “[advertising,”- provides rele- down/$229 “$0 financing not terms could constitute part: month” vant binding a in contractual offer because (a) ... No new motor vehicle used financing, public apply for not to

vited dealer advertise or for sale shall offer financing any accept without further manifes actually sale at motor vehicle part. tation of assent Cutter’s premises available to of the dealer or or au- manufacture[ ] from the had dealer

The case would different the Picos auto- car distributor of such thorized new sought purchase the Grand Cherokee mobile at the time the advertisement price for the cash Laredo advertised $20,988.00. offer made. goods While advertisements particular price generally at a sale do (b) False, misleading deceptive, or ad- offers, binding not constitute contractual vertising. analyze supra, discussion we advertise- licensed ments automobiles dealers product Any advertised must be light Industry Hawai'i Motor Vehicle from available on the stated terms (1993 (HRS Licensing Supp. Act ch. 437 & inventory, delivery order 2000)). Court, Supreme The California period a of time. within reasonable recently example, that an held advertise- Although expressly § 437-4 HRS does by a licensed ment automobile dealer for the prohibit refusing from to sell a a dealer specified particular a at a sale of vehicle price vehicle to a customer advertised price binding contractual constituted offer unsold, long so as it has remained like light rendering of California statute un- Code, statute California the Hawai'i Vehicle '%> n sell failure lawful the vehicle to does, by of its that advertised virtue mandate person price, at the advertised total exclu- actually adver- vehicles be available on the [specified such as charges, taxes and sive terms, similarly justify a consumer’s tised fees], vehicle registration while the remains that, ad- expectation if an automobile dealer unsold, unless advertisement states particular particular vertises a vehicle at price good only total for a advertised price, to make cash the dealer intends elapsed[.]” specified time the time to sell for the contractual offer the vehicle Donovan, Cal.Rptr.2d P.3d at vehicle price, long stated so as the cash (quoting California Vehicle Code does remains unsold and advertisement 11713.1) (some § brackets added and some period expressly limit the of time within not opined, court original). The Donovan price cash effect. which the stated remains Code, it light of the California Vehicle that Thus, circumstances, that all under such to the consumer inter- was reasonable con- required of the would be consumer pret an as offer to sell advertisement contract, assuming advertised clude and, negotiation, without further the vehicle available, be to ten- vehicle were still would unsold, if that con- the vehicle remained price. cash der advertised the transaction sumer free conclude case, however, Picos did tendering purchase present In the advertised cash attempt not advertised price.27 Id. tender the did upon approval. 27. The court held the statute credit Because the Picos Donovan that tioned regarding applicable common law alter the information to Cutter for never submitted credit offers, but, rather, changed consum- contractual they position approval, accept were not in a its expectations, in deter- er mining which was "relevant Indeed, any alleged offer of "0 down.” it cash con- defendant’s advertisement whether hardly surprise come to reasonable could as governing principles pursuant to stituted an offer need to run that Cutter would a credit consumer 807, 27 Cal.Rptr.2d law.” 109 of contract financing. extending before check Rather, fees, price sanctions, attorneys’ pursuant the Cherokee Laredo. costs and sought Picos §§ finance the vehicle. Accord- to HRS 481A-4 and 607-14.5 and HRCP ingly, portion we hold of Cutter’s Rule 11. upon rely

advertisement which the Picos did offer, to a amount contractual but was IV. CONCLUSION merely invitation to deal. light In foregoing, we vacate the amended of the circuit court and Correctly E. The Circuit Court Denied proceedings remand the case for further con- Fees, Attorneys’ Cutter’s Motion For opinion. sistent with this Costs, And Sanctions Pursuant To §§ HRS And And mA-U 607-U.5 ACOBA, Opinion Concurring Rule 11. J. HRCP claims circuit that the court I majority’s concur in the resolution of the denying requests attorneys’ erred in its claims of Plaintiffs-Appellants/Cross-Appel- fees, costs, pursuant and sanctions to HRS Mary lees Zanakis-Pico and Thomas M. Pico 481A-4, §§ supra 607-14.5, (the see Picos).1 note claims, As to the Picos’ tort I supra see note Rule HRCP separately clarify write that minimal supra disagree. 6. We note compensatory damages sums of syn- are not onymous damages,” with “nominal as seem- is no There evidence the record Picos, ingly suggested § that the Picos knew them HRS 481A claim dispel the view the circuit court the first “groundless,” required be as for an award court) (the circuit pecuniary “substantial 481A-4(b). attorneys’ fees under HRS damage” encompasses a threshold amount. event, In both award of costs and I believe it is essential in our case law to 481A-4(b) attorneys’ fees under HRS definitions, clarity maintain applica- within the discretion the circuit court. See tion, and use terms such compensatory, Furthermore, supra II.C. it ap section punitive, nominal damages and “substan- parent the Picos’ claims were neither tial” pecuniary damage. imprecise use faith, pursued frivolous nor in bad as re confusion, but, worse, these leads to terms quired attorneys’ for an award of fees and may deprive parties of remedies defenses costs HRS under 607-14.5 sanctions to which properly would otherwise Thus, say under HRCP Rule 11. we cannot entitled. ruling the circuit abused its discretion in frivolous, claims Picos’ were neither I. groundless, brought nor faith. bad Accordingly, brief, we hold that the circuit opening the Picos character- in denying did not gasoline err Cutter’s motion expenses ize their claim for as “nom- new, pro- I believe Because we should endeavor to changes the decision establishes a guidance possible parties, law”); vide as much 976(b) (deter- to the existing rule of Cal. R. Ct. counsel, courts, wholeheartedly and the trial I mining opinion Appeals that an of the Court of agree publish opinion. with the decision to appellate department may published if it applies This of decision new rules law. Various law”, newa rule of or “establishes fulfills other state, rule, jurisdictions, by both federal and ei- criteria); 7.215(A)-(B)(ordering Ct. R. Mich. publication opinions adopting ther mandate of opinion published “[a] court must be if it ... or, least, very new law at rules of advise that law"). new rule establishes a of opinions published. such should be See 4th Cir. Also, appellate principle, matter of 36(a) as a sound (stating publish- opinion R. that an will be appropriately published. "establishes, alters, modifies, this is clarifies, decision See ed if it or 3.37, Appellate § ABAStandards explains cuit”); Courts at 63 a rule of law [the within Cir- Fourth] of (1977). ("A concurring dissenting (explaining opinion Cir. R. or 5th 47.5.1 that an opinion published published should be if its is if it a new author believes it "establishes rule law”); be; 206(a) (indicating opinion published of Cir. should if such an is 6th R. majority well.”). opinion published [a decision] "whether a new rule should be establishes of as determining Although law” adopted is considered whether an the ABA Standards are 53(c)(1) (stat- opinion published); jurisdiction, is 7th R. I Cir. our believe this ABA Standard to ing published opinion salutary that "a will be filed when be a one. (Second) (1937); ... see also Restatement compensatory damages inal ac- of Tenis, expense responding supra, (defining § to nominal dam- [Defendant tual Appellee/Cross Appellant Cutter]’s money advertise- to ages “a trivial sum of awarded a However, appears to ment.” confuse litigant a of action who has established cause damages” compensatory with dam- “nominal he [or she] but had not established that ages, an error that have dramatic effects damages” (empha- compensatory to entitled ability damages, in on to recover some added)); McCormick, C. Handbook on the sis eases. (1935) (“Nomi- Damages § Law at 85 of damages damages nal awarded in a ti'ivi- are II. merely l’ecognition as a al amount of some duty a to [a] [a] breach of owed defendant plaintiff respect to to a for a With awards recompense plaintiff and not as a measure action, tort it axiomatic that basic three (1) damages [and are] for loss or detriment sustained categories compensatory exist: (2) (general punitive damages symbolic.”). specific);2 merely (also (8) “exemplary damages”); and called Thus, compensatoxy damages whereas are (Sec- damages. nominal See Restatement “monetary damages recompense to awai'ded ond) (1979) (“Nominal § Torts 907 cmt. a a victim loss sus toi't value damages distinguished are to be from com- tained[,]” Actions, supra, 1 Damages in Tort pensatory damages on the one hand and 3.01, damages § nominal are when awarded other[.]”). damages punitive from plain a thei’e has been a technical invasion of “Compensatory damages” range a broad legal duty or a rights tiffs a breach of damages plaintiff a that seek restore resulted; damage or either harm position prior his or her tortious act. harm, although plaintiff proves or its Minzer, a!., Actions, Tort Damages et 1996) (Matthew pi'oven or is not with suffi amount extent § 1.01[3] [hereinafter Bender certainty Compensatory him or to an Damages Actions]. in Tort cient to entitle her pain damages “damages and suf- include id. compensatory award of distress, injury, (6th fering, permanent 2.10; Dictionary emotional ed. Black’s Law life, enjoyment expenses, 1990) (“Nominal loss of medical damages trifling a sum ai-e capacity, wages, impafrment earning lost action, to a in an where awax-ded damage personal property.” Id. [and] injury there is no substantial loss be compensated, recognizes law a but still the contrast, By damages” “nominal are “a rights plaintiffs] [the technical invasion sum awarded for a technical small and trivial duty, in cases a breach of defendant’s right injury legal violation some due a where, injury, although a there has been real damages consequence of which and as a some plaintiffs entirely fails to show right.” evidence must be awarded determine amount.”). Co., Nippu Jiji its Van Poole sought damages," compensation Special damages "natural but not the are the "General "encompass damages plaintiff, necessary alleged wrong all the and ... result of legal naturally necessarily result from depend peculiar to the in- circumstances by implica- wrong done. Such follow Ellis, particular injury.” of each fliction wrong[.]” upon proof law Ellis v. tion of (citations omitted). Haw. at Crockett, Haw. special “To recover omitted). (internal citation "General prove plead each item loss claimed both "damages damages” have been defined as sjpecial the individ- flow from [because frequently resulting harm so from the tort injury.” Damages in Tort ualized factors of an the basis of the action that the existence Actions, supra, personal injury 3.01[3]. normally anticipated damages is to be and hence torts, "[slpecial are often considered alleged proved.” not be order to need Minzer, pecuniary synonymous loss include Actions, etal., Damages 1.01[4] in Tort hospital expenses, loss such items medical and (Matthew 1996) Damages in [hereinafter Bender capacity earnings, work.” diminished and anticipated damages Actions]. Whether are Tort 315, 306, Thompson, 901 79 Hawai'i Dunbar v. by depends upon specific tort and the a claim 1285, (App.1995) (quoting 22 Am. id; (Second) P.2d 1294 pled. Torts harm See Restatement 41, 65, (1993)). Damages (1979). at Jur.2d cmts. a-c 418, appellate recognized 416, 113, Our courts (App.1995) wai'i 894 P.2d concepts category. embodied in first (holding plaintiff proven when See, Mauch, 40, e.g., Weinberg v. 78 Hawai‘i injury prove but has failed the amount of 44, 277, (stating plain P.2d that the damages, only is entitled to nom prove damages. tiffs also “have failed Thus, damages). inal a small award com They argue only showing of nom pensatory damages distinguishable is from damages required]—that [is inal a breach damages nominal recognize awarded to damages occurred and can in therefore be violation, compensate not technical but However, ferred. to maintain a in tortious See, for the amount of harm caused. ..., with terference contract claim e.g., Spring Co. v. McGrew Mach. One Alarm plaintiff must show that a breach has oc Co., Clock Neb. 245 N.W. separately curred and must establish dam (1932) (“By damages’ the term ‘nominal is denied, ages”), reconsideration 78 Hawai'i sum, recognizes right, meant a trivial (1995); Island-Gentry 895 P.2d 172 no adequate but makes return It therefor. State, 259, 267, Joint Venture v. 57 Haw. has been said that a return of dam nominal (1976) (“The 554 P.2d 766-67 law on the all, ages really damages no but a mere damages, purchaser measure wherein the (Citations peg hang the costs on.” omit executory purchase breaches contract to ted.) added.)). (Emphasis land, is that the vendor entitled to recov against defaulting er vendee the differ III. price ence the contract between the sale and the market value of land on the A. breach[, unless] date of the market value of As damages, noted one treatise on tort land greater on the date [is] breach the distinction damages between nominal price, than the contract [then] the vendor is compensatory small awards of damages is only to nominal damages.”); entitled Hall misapplied, leading sometimes to confusion: Airlines, Haw.App. American It recognized should be that courts have (determining always precise not been in their choice damages appropriate that nominal were terminology particular damage describe appellant where “counsel for stated that his eases, awards. although some damages client was interested in but plaintiff has made out a cause of action principle”). case one presented proof of damages sufficient Likewise, jurisdiction our has confirmed warrant an compensatory assessment of proposition embodied the second cate damages, the loss or harm be trivial See, Martin, gory. e.g., Neary v. 57 Haw. nothing in nature—justifying more than a (1977) (deter minimal award. Cou/rts have sometimes mining that where trial court no “[t]he made imprecisely characterized such minimal finding, evidence, and the record contains damages." awards as “nominal use respect amount of the actual loss damages” the term “nominal in these injury by Appellees, sustained ... we incorrect, technically instances since conclude that for substantial monetary is, small sum awarded in reali- damages must be aside set nominal ty, compensatory injury sustained. damages may awarded”); Uyemura It confusing would less if the courts— Wick, 102, 110, 111-12, litigants—would use the term “mini- that, (determining because mal” rather than “nominal” to describe review of the record fails “[a] further to show actually what are insubstantial or trivial evidence basis which the trial compensatory damage awards. reasonably court could the loss and measure Actions, by appellee[,]” Damages “any judg supra, § suffered Tort 3.01 added). appellee (emphases ment favor suf also v. Flan Cowan fered, (Iowa 1990) nery, over above nominal 461 N.W.2d (“Nominal herein”); unsupported by allowed, would be the record Investors, equivalent wrong, Omura American River 78 Ha- in recognition but

329 jurisdictions also way declaring have confirmed the injury a and Other technical damages money compensa as right a and same sums as are award small not.the (Citing damages in amount.” Danker v. Iowa all that is tory small when that is needed 327, Co., Light See, 249 86 Power Iowa N.W.2d plaintiff. e.g., & compensate the Trokn (Iowa 1957).)); 835, Hunter, Clinic, Richard v. 837 280 ya Chiropractic v. F.3d Cleveland 109, 185, 111 (8th Cir.2002) 151 St. 85 N.E.2d 1200, Ohio (disagreeing 1208 (“Small however, not, damages actual are jury’s in actual that award of $1.00 defendant damages, be confused with mere nominal and were, fact, damages, damages in nominal be damages that small not the fact the are does jury plaintiffs cause “the could have found bring the case within the rule that nominal monetary ato small amount of each entitled support puni damages will not a verdict for compensation”); Werschkull United Cal. (Quoting damages.” 15 Am.Jur. Dam tive Bank, Cal.Rptr. Cal.App.3d 829 271.)); ages Heathing Texas & P.R. v.Co. (1978) (upholding compensatory the award ton, (Tex.Civ.App.1938) 115 S.W.2d $1); damages amount of Frazee v. in the that, in (stating fact that the amount “[t]he Brazda, P.2d 239 Or. no controversy why plain is is reason small (determining that was not nominal dam $25 permitted prove, if he tiff should be jury “may as well ages, inasmuch have can, damages” amount in con his where the com also that was reasonable $25 concluded $50.00); 22 troversy was Dam Am.Jur.2d superficial a or abrasion pensation for bruise (1988) (“[Njominal damages ages § 13 mean compensation that was reasonable $25 only any sub damages name and not may medical treatment damages stantial to be amount. Such are injury”). required by such an been award of dam distinguished from small ages. damages may A small still amount B. substantial, be if that sum is sufficient to law, Similarly, nominal in Hawai'i case injured compensate party all the sustained.”). damages to small sum have never referred damage actually Uyemura, compensatory See Dombrouskas, example, in For Buden (“And at 177 Haw. at (1960), A.2d 157 trial Conn. ‘... defining damages we nominal stated: plaintiff. id. at court awarded See $340 ” costs.’ sum Dollar his of One damages in 157. The had claimed (Quoting Ferreira Honolulu Star-Bulle $15,000 for a breach of cove amount tin, reh’g 44 Haw. In by the defendant. See id. nants lessor (1960).) denied, P.2d 112 award, stated, making the the trial court fact, prior points original.)). (Ellipses find to nominal on I “The nominal expressly limited Hawai'i cases have complaint. ground alleged So that token, only damages, it to $1.00. because may damages—judgment be rendered Ferreira, P.2d at 658 44 Haw. at See Id. recover $340.” jurisdictions term (considering that other Supreme appeal, Court On the Connecticut ranging various awards nominal incorrectly trial court had observed cents, and, noting “[a] from $300 “[njom- “nominal,” stating that used the term dam majority of cases hold nominal vast damages. They exist inal mean only usually ages are a token award name, Id. at and not in amount.” amount[,j” “[ijt adjudge one dollar to appellate explained 157. The rule); Minatoya v. adopting majority language from the of the court is obvious Mousel, 6,1, Haw.App. spoke extemporaneously and without that it (“We Ferreiral, supra,], bind think legal precision commenting trivial authority ing that nominal Clearly, using it case. character 1.00.”). Thus, faithfully in order to equivalent of exceed $ the word ‘nominal’ ” law, distinction between Accordingly, adhere the court ‘small.’ Id. at 158. award, was, damages,” symbolic “nominal in actu award $340 determined a small compensatory damages that ality, compensatory damages, let amount, should be maintained. award stand. id. lot,

IV. traveling the to Cutter automobile rather simply request token, symbolic than for a discussion, foregoing As indicated in the . any specific compensable unrelated to claim.3 damages sought by the the Picos are more mentioned, As necessary the Picos met the accurately “compensatory,” characterized as requirements pleading for damages, these legally accepted and not in nominal the pursuant 9(g). Accordingly, to HRCP Rule alia, sought, sense. The Picos here inter amount, although in minimal claim the Picos’ nature, compensatory damages special of a compensatory damages, is for and not for given compensation for travels costs is Thus, claim, nominal the Picos’ result”, Ellis, necessary “not the 51 Haw. at is, precluded such as it cannot be on the 50, 819, alleged misrepre- 451 P.2d at of the special damages basis that claim was sentation in Cutter’s advertisement. See “nominal.” supra in note As third indicated them complaint, revised “Plaintiffs demand[ed] V.

judgment against ... Defendant Cutter special damages follows: in such As allegation, to Picos’ the fraud nominal proved amounts as mil be trial.” In defined, damages, properly supra, may Statement, Picos’ Settlement Conference punitive be for in damages basis fraud special damages were stated to include actions, punitive because the aim of damages “Plaintiffs’ actual loss for the cost gas of defendant, punish is to than rather dealership travel and from the compensate See, plaintiff. e.g., Wagstaff 14, September 1997.” The amount at issue Apparel Corp., v. Protective 760 F.2d 1074 was stated the Picos as “$3.00 $5.00 Cir.1985) (10th (fraud); Ins. Co. v. Life gas[.]” worth Smith, (Ala.1998) (fraud); So.2d Pi Cottrell, hakis v. sufficiently pled special The Picos 286 Ala. these So.2d 685 (fraud deceit); damages complaint, pur Nappe the amended v. Ansche for lewitz, Barr, Bonello, poses of Hawaii Ansell Rules of Civil Procedure & 97 N.J. (HRCP) fraud); that, 477 A.2d 1224 9(g). provides (legal Rule This rule Beavers v. Inc., claimed, Lamplighters special damage Realty, “[w]hen items of 556 P.2d 1328 (fraud). specifically alleg (Okla.Ct.App.1976) An By pu shall be stated.” award of ing “special damages damages upon nitive egregious such as will rests na amounts conduct, proved at ture trial” com defendant’s see Masaki v. them amended plaint, Corp., met General Motors 71 Haw. specificity required Picos 780 P.2d (“In 9(g). Techs., determining Genesys Rule In re an Data whether award punitive damages appropriate, inqui 95 Hawai'i ry (determining primarily focuses plaintiffs prayer upon defendant’s state, “general, degree, for relief in form mental and to a special, lesser treble, conduct.”), punitive nature of his damages [or her] in an reconsidera amount to denied, tion complaint be determined at trial” in Haw. its was (1989), sufficiently specific proof than purposes rather extent of HRCP (internal injury 9(g) quotation can Rule cita show at trial. marks and omitted)). tion course, damages may nominal Of be the Picos’ claim for punitive worth damages basis for tort “$3.00 $5.00 ac- Hence, gas” clearly compensate imprecise them tions.4 an use term precedent, 3. Because this case establishes it has even in the absence of financial loss beyond implications far its facts and will compensatory own damages appropriate” would be impact encompass greater cases that (internal loss. omitted)); quotation marks citation Clayton, 117 N.M. Sanchez appropriate, upon When based the conduct of (1994) (stating may damages that nominal defendant, punitive award an punitive damages the basis of award See, may rights e.g., be awarded in civil actions. torts, jury may intentional "the because award Lohr, (Fla.1989) (al Ault So.2d acknowledge nominal the cause that, action, though rights civil based on a stated punitive damages of action was established Florida, finding liability under law of "a punish wrongdoer violating rights punitive support will alone award of A. allowing the effect of “nominal” plaintiffs to who have harmed defendants Friends In Hawai'i’s Thousand when an escape punitive even (1989), Anderson, P.2d 1293 appropri- damages would be award of such fraud, or the common this court stated ate. deceit,6 showing requires a action of law tort VI. (1) by made de- representations were false (2) fendants, falsi- misrepresenta knowledge of their As to the Picos’ deceit (or truth or claims, knowledge of their ty court concluded that these without tion barred, plaintiffs of upon contemplation inaccu in falsity), based actions were representations, damage upon false of the Picos’ these rate characterization reliance rely upon Fur- pecuniary damage.” It must them. plaintiff did not “substantial grant ther, she] apparently [or must show that he plaintiff that the court be observed pecuniary damage for regarding all of the summary judgment suffered substantial ed alia, because, in cases is compensation it be deceit claims inter the aim of Picos’ tort position he plaintiff [or to five in the put Picos’ claim of three lieved that the [or she] not “sub been had he gasoline expenses was would have she] dollars for satisfy requirement of enough to defrauded. stantial” been damage.”5 pecuniary “substantial (citations 286, P.2d at 1301 at 768 Id. added). omitted) Ellis (emphasis brackets believed that argued, and the court Cutter damages in deceit issue of alleged considered the special compensatory 52-53, P.2d at at 451 damage,” 51 Haw. pecuniary cases. See were not “substantial required damage This court defined required in proof of that nature was nominal or damage, not “substantial actual proceed. As for tort claims to order (cita- 52, 451 P.2d at 820 speculative.” Id. at in Picos’ char- implied with the threshold omitted). have often ex- “The courts expenses as tion gasoline acterization of their pecuni- requirement terms “nominal,” pressed this “substantial” the use of the term original) threshold, damage[.]” (emphasis Id. ary as be- similarly not connote a does Pubs., 302 (citing v. Hanlon court. and the lieved Cutter Macfadden deceit, that, "plaintiff must victim”); for in an action v. Mur Save Charleston Found. 60, pecuni 170, he suffered substantial (S.C.Ct.App. [or she] ray, 65 show 333 S.E.2d 286 S.C. 286, P.2d at 1985) ary damage[.]” at 768 (conversion). 70 Haw. 52, Ellis, (citing 451 P.2d at Haw. at 1301 51 Moreover, alleging constitutional vio in cases 820). lations, damage punitive awards allow courts damage compensatory nominal either without (Second) § Torts 525 6. The Restatement 294, Macri, King 297- v. 993 F.2d awards. See misrepresen- as "fraudulent describes this action Cir.1993) (2d damage, (allowing punitive 98 It states: tation.” alleging exces 1983 claims awards to stand fraudulently misrepresenta- makes a arrest, force, One who prosecu and malicious false sive fact, or law for the opinion, intention tion, tion compen although jury either did not award inducing or to re- another to act purpose of (citing satory damages) the same or nominal it, subject upon in reliance from action Dep't frain Correc proposition, v. Alabama Glover pecuniary liability Cir.1984), to the other deceit tions, 691, (11th rev'd on F.2d 694 734 [or her] his 40, her] him 806, [or caused to loss 88 grounds, 474 U.S. 106 S.Ct. misrepresentation. upon justifiable reliance (1985); Glasgow, v. 620 McCulloch L.Ed.2d 33 (1977) provides Restatement Cir.1980); 531 of the (5th Section v. Western F.2d 51 Guzman Lake, (8th 953 540 F.2d Bank Devils State misrepresenta- Cormier, a fraudulent who makes Cir.1976); [o]ne F.2d 163- v. Silver liability persons or Staras, subject to the Cir.1976); tion is (10th Spence F.2d intends or Manuel, persons [or she] he whom Cir.1974); class (7th 488 F.2d Gill v. Weir, refrain from expect act or to (9th Cir.1973); has reason Basista misrepresentation, upon the Cir.1965)). in reliance (3d action F.2d 87-88 through by them pecuniary loss suffered type transac- justifiable reliance in upon their apparently relied and the court Anderson, reason intends or has she] which he [or tion in Thousand Friends Hawaii’s influenced. (1989), expect conduct to be proposition for the P.2d 1293 (1951); respect N.Y. adopted N.E.2d The Ellis Kaisha, Toho Bussan Ltd. v. American Pres the term “substantial” from Prosser and Lines, Ltd., (2d Torts, Keeton, ident 265 F.2d Keeton W.P. on Prosser and Cir.1959); Restatement Torts Keeton on Law Torts 164-65 (1938)). (5th aim of compensation 1984) “The deceit [hereinafter ed. Prosser and Kee- put position cases is to in the he Torts], ton see Haw. at 451 P.2d at (“In [or she] [or would have been had he she] order to have a claim based a plaintiff been defrauded.” Id. Because deceit, suffered sub- anguish not recover mental and hu damage, stantial actual specu- not nominal or inflicted, id., intentionally miliation not Prosser, (3d lative. Law at 748 Torts ed. plaintiffs claims were to be said confined 1964).”), which, turn, cited cases that “pecuniary damage,” can “which be accu explain of the use the term “substantive.” rately monetary calculated in terms such as Torts, See supra, Prosser Keeton on wages expenses.” loss of cost medical at 765. 52-53, Id. at 451 P.2d at 820. upon by The cases relied Professors Pros- threshold, ser and do Keeton not a but set B. requirement plaintiff relate to a that pecuniary The element “substantial injury show certainty. loss or with some For then, damage,” in a action deceit refers to example, Welch, Casey 50 So.2d 124 i.e., proof injury, pecuniary injury rather (Fla.1951), Supreme Florida Court deter damages, than award of as by maintained that, plaintiff mined because “the was unable Generally, the court. Cutter and “substan- prove any damage, and the record is sum, tial damages” by way are assessed “[a] plaintiff injured devoid of that evidence was damages, having; which opposed is worth by misrepresentations!,]” the defendant’s damages, to nominal which assessed to judgment plaintiff in favor of should be re satisfy legal right[; a bare considerable versed and the case remanded. Id. at 124- compensation amount and intended as a real 25. supreme That court that “[i]t said is of injury.” for a Dictionary real Black’s Law very essence of action of fraud or at Damages § 392. See Am.Jur.2d accompanied deceit that same shall by (1988). contrast, “substantial,” By ap- as it damage.” Id. 125. Prosser Keeton plies plaintiff loss that a must show to Kan, upon Tsang on Torts also relied requirement damage, meet means 275, 177 (1947). Cal.App.2d P.2d 630 substance; actually “[belonging existing; real; seeming illusive; imaginary; not ease, Appellate that the California solid; true; veritable.” Black’s Law Dictio- that, applied Court provided statute which view, nary my Accordingly, at 1428. “sub- willfully “[o]ne who deceives another with damage,” adopted by stantial actual as this intent to induce him [or to alter his her] [or Ellis, court in 51 Haw. at 451 P.2d at position risk, injury her] to his [or her] is refers to this latter definition-rather than damage for any liable which he [or she] imposing some sort of as threshold to the thereby Stating Id. at suffers.” 633. amount the loss sustained fundamental, general that “[i]t rule real, plaintiff must be substantive rather course, that no matter what the nature speculative. than deceit, fraud or unless detriment has been thereby, plaintiff

occasioned has no cause of action!,]” that, 1. the court assum- determined supporting ing than promise made, Rather a threshold con- had been it was “diffi- struction, which source from cult [plaintiff] damaged Ellis to see that adopted phrase thereby!,]” indicates that appear plain- “sub- it did not when that convey certainty stantial” is used to tiff promises relied defendant.7 Stryker, operated prejudice slight See also Castleman v. 107 Or. party to the to a sufficient, (staling only, gives P. that "fraud without extent if its as fraud a cause damage support damage[,]” sufficient to action ... of action if it leads to sort of [hjowever, affirming grant plaintiff's if it be established that the fraud the trial court’s mo- Plaintiff discovered defendants Accordingly, general rule drawn later Id. informa- merely attempting to obtain from cases is not that some threshold were these damage id. required, pecuniary husband’s activities. See but some tion about her alia, suit, general claiming, is the rule fraud. shown. That inter She filed adopted by damages, plaintiff this court Ellis. claimed that id. As See approxi- paid babysitter had hired and she mately of the invitation for result $20.00 spree, that she lost time shopping disapproved an in courts have also Other spent working for her could have she “substantial” as terpretation of the term exchange credits. See landlord in for rent quoted from Prosser and Keeton on Torts pu- special, general, and sought id. Plaintiff amount. In Dil establishing a threshold Lauritzen, damages. id. nitive See 2d worth v. Utah (1967), stating that “one of after the rule case, jury returned At the close of the of fraud and deceit is the essential elements plaintiff on the fraud against a verdict damages[,]” the sustain Su therefore, the issue charge, and did not reach Prosser, quoted preme of Utah Law Court requested a id. Plaintiff (3d. ed.), Torts, at 747 to the effect verdict, notwithstanding must have suffered sub “the trial granted. trial court See id. The the damage the cause of action stantial before plaintiff had that the court determined case, at 138. In a later can arise.” Id. $20.00, proved damages for but concluded Bureau, Inc., Adjustment Turner v. General damage for lost regarding that the evidence (Utah denied, Ct.App.), 843 832 P.2d 62 cert. speculative.” Id. work time was “too (Utah 1992), on other P.2d 1042 overruled that the appeal, defendants declared On Campbell Farm Mut. grounds by v. State comí; “competent evi trial had erred because — P.3d —, Co., Ins. 2001 UT Auto. jury’s of no supported the verdict dence (2001) (overturning Tur 2001 WL 1246676 damaged as a [plaintiff] in that was not fraud availability holding on the of emotional ner’s investigation.” Id. result the undercover fraud), Ap damages for the Utah Court Dilworth, supra, Relying upon at 65-66. claim that peals addressed the defendants’ plaintiff that had to maintained defendants damage” re was threshold “substantial to damage” in order re prove “substantial at n. 1. In quirement in a fraud case. Id. 66 court, 1. The for fraud. Id. at 66 n. cover defendants, case, employees of a that the however, as a to this statement declined read investigate plaintiffs hus firm hired to the “[Defen id. threshold for See claim, compensation had band’s worker’s broadly. Utah Dilworth too dants] read[ ] marketing masqueraded product as a re only sustain some requires party that a law gain company, in order to access search omitted).8 (citations injury damage.” Id. or id. at 64-65. De plaintiffs home. See in a plaintiff participate asked fendants C. day of shopping spree. id. On the See however, Consequently, although the term “substan- can spree, defendants shopping formulations, that employed in some trip. at 65. tial” is shopping id. celed the stating "[t]his is so fraud[,]" defendants had been a directed verdict because tion for loss) (citation fraud elements of failed to establish” one of the essential because “wholly Co., omitted); Benson v. Garrett Inv. damages”). 287 P.2d sustain and deceit is that the plaintiff Ct.1955) (in (Cal.App. "an 405, 408 Dep’t Super. damages defec fraud, it is action for fatally judgment reviewing grant In the trial court’s damage-there being failing allege tive in any notwithstanding the court deter- verdict, damages allegation general neither an damage had not mined that plaintiff proven which she conveyed value of plaintiff's property Tinner, 66, and, thus, 832 P.2d adequately, Lauritzen, defendant"); Dilworth v. 18 Utah 2d notwithstanding verdict should (1967) (determining that 424 P.2d 138 although granted. Hence, not have been ruling "justified in for the court was the trial damage damage sufficient, amount of ground that no further defendant on the compe war- with sufficient certainty was not proven damages given regarding tent evidence was rant a verdict for plaintiff. might even if there which have been sustained 334 requirement Pecuniary damages, being scope,

word to the such narrow in refers (either pecuniary damages general spe in nature and not those actions, Indeed, cial) speculative. accurately Ha which can deceit calculated in monetaiy appellate wages waii courts recov have barred terms such as loss ery pecuniary expenses. is no when there evidence cost medical fraud or cases, Shanghai pecuniary at all. See Inv. Co. deceit the measure 482, 498, Co., usually Hawai'i P.2d Alteka 92 998 confined either the (see, (affirming “out-of-pocket” e.g., the trial court’s deter loss Beardmore v. Co., prove Burgess mination that “because Alteka did T.D. ... [245 387] Md. (1967)) damage, pecuniary jury’s verdict A.2d or the “benefit of the (difference supported bargain” issue of fraud was not between the actual evidence”), part on property overruled in at time sold and value grounds it Ing, representa Blair v. 96 Hawai'i would if value have had true) (2001); (see, e.g., Sys., P.3d 184 Larsen v. tions had been Pacesetter McInnis & (“An Co., Equip. Western Tractor Haw. P.2d Co. v. [&] (1966)). action will lie [67 965] based fraud where Wash.2d P.2d plaintiff damage.” injury has suffered no 52-53, Id. at 451 P.2d at This (Citations omitted.)), reconsider amended on ques- “[w]e concluded do not reach the ation, (1992); applicable tion of measure is in this Friends, Haw. at Hawaii’s Thousand plaintiffs appear case since the do not (stating at 1301 that there was alleged any pecuniary loss from the no evidence that had suffered alleged misrepresentations.” Id. at damage pecuniary misrep as a result of added). (emphasis P.2d at Ellis, resentations); 51 Haw. at (ICA) Appeals The Intermediate Court of (determining at 820 did not similarly referring construed Ellis allege any misrepresentations). loss from the “pecuniary damages,” as inasmuch the Ellis Ellis,

Consequently, employed opinion as in “sub- equivalent itself uses that as the term damage” synonym stantial actual is a for damage.” Reiterating of “substantial actual 52, damage,” Ellis, “pecuniary 51 Haw. at rule ICA stated Cresencia “[sjuch 820, is, Kim, 461, 725, damage at can 10 Haw.App. as be P.2d 878 cert. compensated money; denied, 373, by (1994), in and 77 estimated Hawai’i P.2d 1149 merely money property respect of or the loss salable to claims for “[w]ith fraud or loss, rights, deceit, all deprivation, only or such or damages generally but recovera injury subject i.e., of ‘pecuniary damages’', as can be made the calcula- damages ble are recompense money[,]” ‘put tion and plaintiff position of Black’s which will in the he Ellis, Dictionary (citing at 392 Law 51 Haw. would have been had not been he defrauded’ 820). at accurately at can and “which be calculated in monetary wages terms such of as loss and

D. 482-83, expenses.” cost of medical Id. at Ellis, (citing 52-53, P.2d at 51 Haw. at have, fact, Hawai'i cases treated the 820) added). at (emphasis Ellis, terms alike. the first case to use the “substantial,” employed term “sub- the terms VII. damage” “pecuniary stantial dam- actual sum, interchangeably. age” stating After first the court’s treatment the words plaintiff prove that a must actual pecuniary establishing “substantial “substantial loss” as damage,” requiring id. at 451 P.2d at deceit threshold substantial amounts of cases, only “pecu- prove injury this court utilized term element ac- niary damage” opinion. the balance of the tions for fraud or incorrect.9 deceit is As pointed “pecuniary supra, It was out that the term a threshold construction discussed expenses damages” supported by referred established the word “substantial” is not term, interpretation origins and not amount of such loss: of the of the may consequences. per plaintiff, aggre It also unintended small sums gate individual but the may combining example, For often class action suits are for be enormous when the total by its shown statements representation,11 case as jurisdictions,10 other our own term Therefore, does motion12 for during hearing the word “substantial” on Cutter’s law. pecuniary amount summary judgment: a threshold not mean satisfy must in order to loss on that basis I ask And [CUTTER]: recover, apparently as believed. their fraud claims that the Court dismiss connotes as “substantial” Insofar the term failing pecuniary to show substantial for particular of a amount pecuniary misrepresentation claims. as well as loss pecuniary than concreteness of rather any negli- far as THE COURT: So loss, consigned to misleading it is and is best fraud, negli- those would be the gence past eases. claims? gence fraud Yes. [CUTTER]:

VIII. THE COURT: There’s other—I the Picos’ apparently The court construed negligence I for mis- think saw negligence negligent as one don’t claim pecuniary damage recover for his actual loss sustained the class. A threshold con sustained Rickert, actions, wrong.”); when such a direct result of the UPSv. struction would bar such See, ("In may appropriate. e.g., (Ky.1999) Mace an action for suits would S.W.2d (7th fraud, Corp., necessary prove Ru v. Van Credit F.3d it is not amount 1997) (disagreeing with the court’s de certainty, Cir. trial with but establish recovery of between 28 cents termination that certainty damages."); the existence per potential Inc., $12.00 of a class member out Crowley Realty, v. Global N.H. action, $100,000 stating to a (1984) ("The total was a bar class general rule A.2d (in recovery minimis mone "we believe that a de damages recovera- that the measure of therefore terms) tary automatically bar a class should not misrepresentation, whether intentional ble very policy of the class action. core loss.”); pecuniary negligent, Lama is actual problem action mechanism is to overcome the Barney, Holding 88 N.Y.2d Co. Smith provide do not the incentive that small recoveries N.Y.S.2d 668 N.E.2d 646 ("The bring prosecut individual to a solo action for ing damage indemnity true measure rights”). or her his pecuniary the direct actual loss sustained as damage presents Aggregating the class wrong the ‘out- of the or what is known as result problems (Internal under a threshold rubric. quotation its own of-pocket’ marks rule[.]” plaintiff’s assuming "insubstan- omitted.)); Metropolitan Even that each Co. citation Ins. Life aggregated purposes tial loss” Haney, (Tex.Ct.App.1999) 987 S.W.2d threshold, substantiality meeting fraud, such an indi- ("To plead recover claim, certification, plaintiffs prior to re- vidual pecuniary prove he as a result suffered a loss Many class ac- mains vulnerable to dismissal. representation upon which he re- false initially begun by plaintiff, one lied.”). tion lawsuits are thereafter, attempts complaint, who files a may certify the A defendant file a Rule class. negligent mis law indicates that 11. Our case 12(b) for to state a motion to dismiss failure "(1) representation requires that false informa Accordingly, prior claim this certification. supplied result of the failure to as a tion created, may wherein a to the courthouse race competence or in com exercise reasonable care requests quickly dismissal defendant who information; (2) municating person the for the liability, damage tort and a evade supplied suf benefit the information whose certify reaching the class the threshold loss; recipient upon relies fered the plaintiff's before such a motion eliminates Blair, misrepresentation." 95 Hawai'i at the 269, least, very At this have the claim. would (citing Agric. v. 21 P.3d Kohala at plaintiffs pursu- chilling of individual from effect ing 301, Touche, 323, 949 P.2d & 86 Hawai'i Deloitte actions, allowing thereby large-scale fraud 141, (1997); (Second) Torts Restatement of minimal, damage plaintiffs when and, to individual 552). adequacy § of other elements As thus, meet does not the "substantial” appears negligent misrepresentation, it of threshold. Accordingly, matters. did not reach these court elements of this claim. I not address the other do showing jurisdictions simply require a 10.Most See, damage. pecuniary e.g., Echols some loss by Homes, any simple negligence Beauty claim of 132 Ariz. 12. As Built Cutter, Picos, correctly, (1982) ("We did not I would note that that the Bax- P.2d believe argument that there is a pecuniary a similar to show what advance should be allowed ters damage negli- requirement in a for as a of their threshold loss have sustained result Instead, argues gence upon misrepresentation action. reliance the defendants’ credit.”); negligence Asphalt simple fails on the element claim tax B & B Co. v. T.S. as to the Cutter, as, 1976) according Co., (Iowa duty, it owes inasmuch 242 N.W.2d McShane duty (“A to the plaintiff in a is entitled Picos. successful fraud case negligent misrepresen- I by [plaintiffs] justifiable claim. mean it’s upon reliance tation, the fraud or deceit which—and the (Emphasis original.)). in information[.]” contract claims. Touche, Agric. See also Kohala & Deloitte (1997). 86 Hawai'i Negligent misrepresentation occurs when prior This court’s case law confirms that a who, in [o]ne the course of her] his [or prima negligent misrepresenta facie case for business, profession employment, or in requires only proof tion pecuniary some in other transaction which [or she] he injury.14 alleged Picos that. interest, pecuniary supplies has a in- false guidance formation for in others transactions, IX. subject

their business liability pecuniary loss to them caused Accordingly, interpretation the court’s justifiable by them upon reliance the infor- incorrect, the word “substantial” was as it mation, if [or she] he fails to exercise apparently requires a sizable amount of dam- competence obtaining reasonable care or in and, age preceding as indicated discus- communicating the information. sion, wrongly applied. specifi- The court (Second) § Restatement at Torts 126- cally granted summary judgment for Cutter added).13 (emphasis Although the court regarding using all Picos’ tort claims this determined that term im “substantial” application of pecu- incorrect the “substantial poses a threshold amount for fraud or deceit Therefore, niary damage” standard. actions, jurisdiction Park, this Chun granted court erred when it motion Cutter’s (1969), expressly Haw. 462 P.2d 905 summary judgment. adopted the elements set forth in Restate (Second) elaboration, § negligent ment foregoing agree Torts 552 for With the I misrepresentation. disposition id. with the by major- case by ity. at 909. See also State Bronster v. United Corp.,

States Hawai'i Steel (“[B]oth (Sec [Restatement

ond) Chun, Torts ] and this

recognize pecuniary losses are recovera claim negligent misrepresenta

ble 552(1) expressly

tion. Section states

liability will attach pecuniary ‘for loss caused Although specifically representations, cited either (misrepresentations 552C party, apparently sale, the court believed Re- exchange of a material fact in a rental or (Second) pro- another). statement Torts transaction with negli- a cause of vides action “information "pecuniary ofAll these tort actions allow for gently supplied guidance loss,” for lire of others unmodified the terms "substantial” or id., transactions[,]” applied pres- business in the "actual.” ent It situation. is unclear whether the Picos’ rely upon support other Restatement sections Accordingly, adopting "substantial” generically of their described tort[.]“ "action in threshold also to an leads inconsistent result (intentional comparing when fraud deceit mis- misrepresentations, In addition to fraudulent representation), negligent misrepresenta- (Second) provides the Restatement Torts for a An tion. construction variety erroneous term upon of tort actions based concealment nondisclosure, "substantial" in liability deceit fraud cases result depends for which damage, in two different standards of upon culpability one for of the defendant. exam- For (substantial nondisclosures, misrepresentation intentional ple, intentional concealment or (“One pecuniary damages) party amount see id. at 550 to a another transaction who (no threshold, negligent misrepresentation intentionally pre- concealment or other action pecuniary damages). The acquiring vents the other from untoward result would material informa- other, subject liability tion be that with minimal to the same would to the pecuniary though he be able to recover from a loss as had stated the defendant who had only negligently, nonexistence the matter that the acted while the other was same prevented discovering.”); (duty damage thus from with the same would not be able to transactions), negligent of disclosure in business recover from a defendant who had acted fraudu- misrepresentations, lently. §see and innocent mis-

Case Details

Case Name: Zanakis-Pico v. Cutter Dodge, Inc.

Court Name: Hawaii Supreme Court

Date Published: Jul 26, 2002

Citation: 47 P.3d 1222

Docket Number: 22987

Court Abbreviation: Haw.