Madoff v. Bold Earth Teen Adventures et al
Filing
214
ORDER DENYING HAWAII PACK AND PADDLE DEFENDANTS' MOTION TO DISMISS; ORDER DENYING BOLD EARTH DEFENDANTS' MOTION FOR PARTIAL SUMMARY re 146 , 152 , 157 , 170 , 174 , 175 - Signed by CHIEF JUDGE SUSAN OKI MOLLWAY on 11/21/13 . "The court denies the reconsideration motion styled as a motion to dismiss and the motion for partial summary judgment with respect to the punitive damage claim." (emt, )CERTIFICATE OF SERVI CEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
MICHAEL MADOFF, Individually
and as Administrator of the
Estate of TYLER MADOFF,
Deceased; and MARIANNE
MADOFF,
)
)
)
)
)
)
Plaintiffs,
)
)
vs.
)
)
AMERICA’S ADVENTURE, INC.,
)
dba BOLD EARTH TEEN
)
ADVENTURES; ABBOTT WALLIS;
)
ANDREW MORK; KELSEY TYLER;
)
HAWAII PACK AND PADDLE LLC;
)
BARI MIMS; NOLAN KEOLA A.
)
REED; and LETITIA MIMS,
)
)
Defendants.
)
_____________________________ )
CIVIL NO. 12-00470 SOM/RLP
ORDER DENYING HAWAII PACK AND
PADDLE DEFENDANTS’ MOTION TO
DISMISS; ORDER DENYING BOLD
EARTH DEFENDANTS’ MOTION FOR
PARTIAL SUMMARY JUDGMENT
ORDER DENYING HAWAII PACK AND
PADDLE DEFENDANTS’ MOTION TO DISMISS;
ORDER DENYING BOLD EARTH DEFENDANTS’
MOTION FOR PARTIAL SUMMARY JUDGMENT
I.
INTRODUCTION.
On July 4, 2012, fifteen-year-old Tyler Madoff was
killed when he was swept out to sea near Kealakekua Bay on the
Big Island of Hawaii during a kayaking and hiking adventure tour
operated by Defendant America’s Adventure, Inc., dba Bold Earth
Teen Adventures.
On August 21, 2012, the Complaint in this matter was
filed.
See ECF No. 1.
In July 2013, a motion to file a First
Amended Complaint was filed.
See ECF No. 101.
Defendants did
not oppose this request.
See ECF Nos. 109, 111, and 122.
to file the First Amended Complaint was granted.
127.
Leave
See ECF No.
On August 6, 2013, the First Amended Complaint was filed.
See ECF No. 128.
Plaintiffs are Tyler’s mother and father, Marianne and
Michael Madoff, as well as Michael Madoff in his capacity as
Administrator of Tyler’s estate.
See id.
Defendants are
America’s Adventure, Inc., dba Bold Earth Teen Adventures; its
President and founder, Abbott Wallis; and its employees Andrew
Mork and Kelsey Martin.
Also named as Defendants are a Bold
Earth contractor called Hawaii Pack and Paddle LLC; its owner
Bari Mims; and its employees, Nolan Keola Reed and Letisha Mims
(collectively, “Defendants”).
The First Amended Complaint asserts claims for gross
negligence (Count I), negligence (Count II), wrongful death
(Count III), pain and suffering (Second “Count III”), negligent
infliction of emotional distress (Count IV), negligent hiring,
supervision, retention, and training (Count V), and negligent
misrepresentation (Count VI).
See id.
Before this court are a second motion to dismiss this
case because a forum selection clause states that any action
shall be filed in Colorado, and a motion for partial summary
judgment with respect to the punitive damage claim.
Although not
expressly stated in the motions, both motions, if granted, might
2
avoid application of section 663-1.54(a) of Hawaii Revised
Statutes to this matter.
The court treats the motion to dismiss filed by Hawaii
Pack and Paddle, Bari Mims, Nolan Keola Reed, and Letisha Mims
(collectively, “Hawaii Pack and Paddle Defendants”) as a motion
for reconsideration of this court’s order of March 28, 2013.
ECF No. 68.
See
Hawaii Pack and Paddle Defendants are unpersuasive
in arguing that the court should change its earlier ruling at
this time.
With respect to the motion for partial summary
judgment, America’s Adventure, Abbott Wallis, and Kelsey Martin
(collectively, “Bold Earth Defendants”), are also unpersuasive.
By failing to oppose the motion seeking leave to file the First
Amended Complaint, they may have waived any objection to the
assertion of the punitive damage claim absent compliance with
Colorado law.
Even if they did not waive this objection, Bold
Earth Defendants fail to show on the present motion that Colorado
law applies.
The court leaves for further adjudication the issue
of whether Colorado or Hawaii law governs this case.
II.
BACKGROUND FACTS.
Abbott Wallis is the sole shareholder of America’s
Adventure, Inc., dba Bold Earth Teen Adventures.
See Depo. of
Abbott Wallis at 96-97, Aug. 21, 2013, ECF No. 198-1, PageID
# 2018.
Bold Earth is a Colorado corporation run out of Wallis’s
3
home.
121.
Id.; Aff. of Abbott Wallis ¶ 1, ECF No. 21-3, PageID #
Bold Earth offers adventure trips to young people.
See
Wallis Aff. ¶ 2.
On or about January 31, 2012, a Trip Application was
submitted for Tyler Madoff to go on Bold Earth’s “Ultimate
Hawaii” trip, beginning July 1, 2012.
See ECF No. 190-3.
As
part of this application, the box next to “Parent and or guardian
has read and agrees to the Liability Release” was checked.
PageID # 1763.
Id.,
In relevant part, the Liability Release states,
“We understand and agree that Colorado substantive laws will
govern this Application and Release, any dispute we have with BE,
and all other aspects of our relationship with BE.”
# 1765.
Id., PageID
Tyler’s mother, Marianne Madoff, subsequently signed a
Parent Agreement that stated, “I agree that Colorado substantive
law will govern this Agreement and all other aspects of my and my
child’s relationship with Bold Earth.”
See ECF No. 196-1, PageID
# 1938.
The Liability Release states in a small font that it
is given in consideration of the services
provided by America’s Adventure, Inc (d/b/a
“Bold Earth Adventures”) and its owners,
officers, directors, employees and agents . .
. , as well as its contractors listed below
[including Hawaii Pack & Paddle], in allowing
applicant to participate in the [Bold Earth]
program. Applicant (“participant”) and
his/her parent or guardian (“parent”)
(collectively “we”) agree we have carefully
read, fully understand and agree to be bound
by this release, the terms and conditions
4
contained in the Application above, the
brochure and website, and the
Participation/Unity Agreement. We understand
that [Bold Earth] activities include inherent
and other risks, hazards and dangers
(“risks”) that can cause injury or other
loss, both common and severe. We agree that
[Bold Earth] representatives are and have
been available to answer any questions about
these activities, and the associated risks.
Therefore, we agree to accept and assume the
inherent and other risks and any injury or
other loss resulting from those risks or
resulting from participant’s negligence or
other misconduct. In addition, I (adult
participant and/or parent, for myself, and if
participant is a minor, for and on behalf of
my participating minor child) agree to
release [Bold Earth] and its contractors [,
including Hawaii Pack & Paddle,] . . . with
respect to any and all claims, liabilities,
suits, and expenses (“claims”), including
claims resulting from [Bold Earth’s] or any
contractor’s negligence (but not their gross
negligence or willful or wanton misconduct),
for any injury, damage, death or other loss
to me/my child in any way connected with
my/my child’s enrollment or participation in
these activities, or use of any equipment,
facilities, or premises.
ECF No. 190-3, PageID # 1765.
Although the “Ultimate Hawaii” trip was to occur in
Hawaii, the Liability Release for that trip was at odds with
section 663-1.54 of Hawaii Revised Statutes.
That statute
states:
(a) Any person who owns or operates a
business providing recreational activities to
the public, such as, without limitation,
scuba or skin diving, sky diving, bicycle
tours, and mountain climbing, shall exercise
reasonable care to ensure the safety of
patrons and the public, and shall be liable
5
for damages resulting from negligent acts or
omissions of the person which cause injury.
Section 663-1.54 then clarifies that
(b) Notwithstanding subsection (a), owners
and operators of recreational activities
shall not be liable for damages for injuries
to a patron resulting from inherent risks
associated with the recreational activity if
the patron participating in the recreational
activity voluntarily signs a written release
waiving the owner or operator’s liability for
damages for injuries resulting from the
inherent risks. No waiver shall be valid
unless:
(1) The owner or operator first provides
full disclosure of the inherent risks
associated with the recreational
activity; and
(2) The owner or operator takes
reasonable steps to ensure that each
patron is physically able to participate
in the activity and is given the
necessary instruction to participate in
the activity safely.
(c) The determination of whether a risk is
inherent or not is for the trier of fact. As
used in this section an “inherent risk”:
(1) Is a danger that a reasonable person
would understand to be associated with
the activity by the very nature of the
activity engaged in;
(2) Is a danger that a reasonable person
would understand to exist despite the
owner or operator’s exercise of
reasonable care to eliminate or minimize
the danger, and is generally beyond the
control of the owner or operator; and
(3) Does not result from the negligence,
gross negligence, or wanton act or
omission of the owner or operator.
6
The legislative history for section 663-1.54 indicates
that the Hawaii legislature did not intend to allow owners and
operators of recreational activities in Hawaii to have customers
waive claims against operators arising out of negligent conduct:
Your Committee finds that this measure is
necessary to more clearly define the
liability of providers of commercial
recreational activities by statutorily
invalidating inherent risk waivers signed by
the participants. Your committee further
finds that these inherent risk waivers
require providers to disclose known risks to
the participant, but these waivers do not
extend immunity to providers for damages
resulting from negligence. Thus, it is the
intent of your Committee that this
clarification in the law will appropriately
reduce frivolous suits without increasing
risks to participants.
Haw. Stand. Comm. Rep. No. 1537, 1997 Senate Journal, at 1476.
Tyler and his mother also signed a Participation Unity
Agreement stating, “Safety rules and the buddy system must be
respected at all times. . . .
Staff must know and approve of
your whereabouts 24 hours a day.”
See ECF No. 196-2, PageID
# 1939.
Defendant Andrew Mork, who worked for Bold Earth, first
met Tyler Madoff on July 1, 2012, at the airport in Kona, Hawaii.
See Depo. of Andrew Mork at 7, Aug. 20, 2013, ECF No. 190-5,
PageID # 1797.
Mork and Kelsey Martin were the co-leaders of the
trip Tyler was on.
Id. at 21, PageID #1798.
7
Before Mork was hired by Bold Earth in 2011, he had, in
2009, pled no contest to a disorderly conduct charge arising out
of an incident in which the police found a “marijuana stem” in
the couch at his apartment.
See id. at 30-32, PageID # 1800.
Mork was also convicted of misdemeanor possession of marijuana in
2008 or 2009, but that conviction was expunged.
45, PageID # 1803.
See id. at 44-
Mork admitted that, during the time he was
employed by Bold Earth, he smoked marijuana, but says that he
never smoked marijuana when leading a trip.
Id. at 45.
Mork
says that he bought and smoked marijuana right before the trip at
issue in this case, during the “pre trip” phase before the
customers showed up.
Id. at 56-57, PageID # 1804.
Mork had also
been thrown out of a bar in 2011 because he was drunk.
175, PageID # 1820.
Id. at
Finally, Mork was found not to have been
wearing his seat belt when in a car and found not to have stopped
at a stop sign when driving.
Id. at 35 and 39, PageID #s 1801-
02.
Wallis says that, had he known of these events, he
would not have hired Mork.
2, PageID # 2015.
See Wallis Depo. at 26, ECF No. 198-
However, nothing in the record directly
connects Mork’s criminal and driving history with Tyler’s death.
That is, there is no indication that Mork was drunk or stoned
when Tyler drowned, and the drowning did not involve driving a
car at all.
Moreover, had Wallis refused to hire Mork because of
8
his arrest and court record, he might have run afoul of section
378-2 of Hawaii Revised Statutes, which, in relevant part,
prohibits discrimination in the hiring of a person based on his
or her arrest and court record.
Wallis says that Mork had been fingerprinted and had
passed background checks by the Colorado Bureau of Investigations
and the Federal Bureau of Investigations.
However, Wallis could
not say what was involved with any background check.
Id. at 50-
52, PageID # 2017.
On July 4, 2012, Nolan Keola Reed and Letisha Mims,
Hawaii Pack and Paddle employees, were the guides for the kayak
trip scheduled for that day by Bold Earth.
27, 156, PageID #s 1813 and 1818.
See Mork Depo at 126-
Apparently, Bold Earth had
contracted with Hawaii Pack and Paddle to supply these guides,
and Hawaii Pack and Paddle had a State of Hawaii permit to
provide recreational activities.
Bold Earth did not tell Mork
about any limitation as to time, number of persons, or area
imposed by the permit to use the area for recreational
activities.
Id. at 131-33, PageID # 1814.
When the group left on the morning on July 4, 2012,
Mork had not asked the Hawaii Pack and Paddle guides about
weather or surf conditions.
Id. at 160, PageID # 1819.
Mork,
Martin, and the trip participants had left their cell phones in
the van.
See Deposition of Kelsey Martin at 175, Aug. 22, 2013,
9
ECF No. 197-1, PageID # 2011.
The participants landed their
kayaks and began hiking, leaving their life jackets behind.
Id.
After about ten minutes, the group left the established hiking
trail and went toward the shoreline.
# 2011.
See id. at 176-77, PageID
The group then sat in tide pools after one of the
participants asked to sit there.
190-5, PageID # 1823.
See Mork Depo. at 214, ECF No.
Mork says that, when asked whether
participants could sit in the tide pools, he looked at Letisha
Mims, who nodded that it was okay to do so.
Id. at 214-15, ECF
No. 190-5, PageID # 1823.
A large wave hit the people sitting in the tide pools.
Id. at 236, PageID # 1825.
This was followed by a second wave.
Id. at 239, PageID # 1826.
When a third wave hit them, Mork saw
Tyler and thought he had been rendered unconscious.
swept into the ocean.
Tyler was
Mork did not dive in to rescue him, as he
had not seen where the body went.
Id. at 246-49, PageID # 1827.
In a written statement dated July 18, 2012, Mork
explained that he knew that Tyler was in the water.
searched the area.
He and Reed
Reed spotted a body in the water and dove in.
It turns out that this was the body of Matt Alzate.
realizing this, Mork continued to look for Tyler.
Upon
He and Letisha
Mims flagged down a nearby fishing vessel to help in the rescue
of Alzate.
A little while later, a zodiac tour boat arrived to
help search for Tyler, presumably called by the people in the
10
fishing vessel.
Mims and Mork continued to search for Tyler for
about an hour before the fire department arrived via helicopter.
See ECF No. 196-3, PageID # 1943.
Mork says he had no training in ocean conditions.
Mork Depo. at 84, ECF No. 190-5, PageID # 1807.
See
Martin similarly
says she received no training about ocean conditions or rescuing
people.
See Martin Depo. at 87, ECF No. 197-3, PageID # 2009.
On September 14, 2012, the Board of Land and Natural
Resources for the State of Hawaii considered whether to revoke
Hawaii Pack and Paddle’s permit to go to Kealakekua Bay
Historical Park, noting that the July 4, 2012, tour had exceeded
the authorized number of people, exceeded the time limitation,
and deviated from areas authorized by the permit.
See Amended
Minutes for the Meeting of the Board of Land and Natural
Resources at 6-7, Sept. 14, 2012, ECF No. 196-8, PageID #s 197172.
It appears that the Board of Land and Natural Resources
decided to revoke the permit at that meeting.
See id., PageID
# 1978.
III.
MOTION TO DISMISS.
Rule 12(b)(3) of the Federal Rules of Civil Procedure
governs motions to dismiss for improper venue.
The standard for
a Rule 12(b)(3) motion was set forth in this court’s order of
March 28, 2013.
See ECF No. 68.
Hawaii Pack and Paddle
essentially argues that this court should modify its order of
11
March 28, 2013, which referred to Plaintiffs’ identification of
43 Hawaii-based witnesses.
Claiming that few of those witnesses
will actually be called at trial, Hawaii Pack and Paddle seeks
reconsideration of that order, making this motion governed by
Local Rule 60.1, instead of Rule 12(b)(3).
Local Rule 60.1
allows reconsideration when there has been discovery of new
material facts not previously available, an intervening change in
the law, or a manifest error of law or fact.
Hawaii Pack and
Paddle fails to justify reconsideration notwithstanding its
belief that many of the 43 Hawaii-based witnesses may not
actually testify at trial.
First, the motion presumes to know which witnesses
Plaintiffs will call to testify about what subjects, even before
discovery is complete.
It then presumes that the court will
preclude many of the witnesses because their testimony will be
cumulative or barred by Rule 403 of the Federal Rules of Civil
Procedure.
It also claims that certain witnesses are statutorily
precluded from testifying.
The court denies the motion because
the court cannot tell at this time which witnesses will be called
to testify or what the witnesses will actually testify about.
Even if fewer than 43 Hawaii-based witnesses ultimately
testify, the court cannot, on the present record, rebalance the
factors discussed in the court’s earlier order.
The exact nature
of the testimony of each witness is not actually in front of this
12
court, and the court has before it no motions to preclude
testimony.
The court cannot assume that it would preclude any
testimony without examining the unique circumstances surrounding
that testimony.
It may well be that Plaintiffs will not be
calling all 43 Hawaii-based witnesses.
But the court cannot, at
this time, make a determination as to how many of those witnesses
will actually be allowed to testify based on Hawaii Pack and
Paddle’s investigation into which witnesses it thinks are likely
to testify.
As noted above, discovery is ongoing and may clarify
which witnesses will testify about what.
Under the circumstances
presented here, the court declines to modify its earlier order,
determining that its reasoning applies even if fewer than 43
Hawaii-based witnesses testify.
IV.
MOTION FOR SUMMARY JUDGMENT.
Under Rule 56 of the Federal Rules of Civil Procedure,
summary judgment shall be granted when “the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
P. 56(a).
Fed. R. Civ.
See Addisu v. Fred Meyer, Inc., 198 F.3d 1130, 1134
(9th Cir. 2000).
The movants must support their position that a
material fact is or is not genuinely disputed by either “citing
to particular parts of materials in the record, including
depositions, documents, electronically stored information,
affidavits or declarations, stipulations (including those made
for the purposes of the motion only), admissions, interrogatory
13
answers, or other materials”; or “showing that the materials
cited do not establish the absence or presence of a genuine
dispute, or that an adverse party cannot produce admissible
evidence to support the fact.”
Fed. R. Civ. P. 56(c).
One of
the principal purposes of summary judgment is to identify and
dispose of factually unsupported claims and defenses.
Celotex
Corp. v. Catrett, 477 U.S. 317, 323-24 (1986).
Summary judgment must be granted against a party that
fails to demonstrate facts to establish what will be an essential
element at trial.
See id. at 323.
A moving party without the
ultimate burden of persuasion at trial--usually, but not always,
the defendant--has both the initial burden of production and the
ultimate burden of persuasion on a motion for summary judgment.
Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102
(9th Cir. 2000).
The burden initially falls on the moving party to
identify for the court those “portions of the materials on file
that it believes demonstrate the absence of any genuine issue of
material fact.”
T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors
Ass’n, 809 F.2d 626, 630 (9th Cir. 1987) (citing Celotex Corp.,
477 U.S. at 323).
“When the moving party has carried its burden
under Rule 56(c), its opponent must do more than simply show that
there is some metaphysical doubt as to the material facts.”
14
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
586 (1986) (footnote omitted).
The nonmoving party may not rely on the mere
allegations in the pleadings and instead must set forth specific
facts showing that there is a genuine issue for trial.
Elec. Serv., 809 F.2d at 630.
T.W.
At least some “‘significant
probative evidence tending to support the complaint’” must be
produced.
Id. (quoting First Nat’l Bank of Ariz. v. Cities Serv.
Co., 391 U.S. 253, 290 (1968)); see also Addisu, 198 F.3d at 1134
(“A scintilla of evidence or evidence that is merely colorable or
not significantly probative does not present a genuine issue of
material fact.”).
“[I]f the factual context makes the non-moving
party’s claim implausible, that party must come forward with more
persuasive evidence than would otherwise be necessary to show
that there is a genuine issue for trial.”
Cal. Arch’l Bldg.
Prods., Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468
(9th Cir. 1987) (citing Matsushita Elec. Indus. Co., 475 U.S. at
587).
Accord Addisu, 198 F.3d at 1134 (“There must be enough
doubt for a ‘reasonable trier of fact’ to find for plaintiffs in
order to defeat the summary judgment motion.”).
In adjudicating summary judgment motions, the court
must view all evidence and inferences in the light most favorable
to the nonmoving party.
T.W. Elec. Serv., 809 F.2d at 631.
Inferences may be drawn from underlying facts not in dispute, as
15
well as from disputed facts that the judge is required to resolve
in favor of the nonmoving party.
Id.
When “direct evidence”
produced by the moving party conflicts with “direct evidence”
produced by the party opposing summary judgment, “the judge must
assume the truth of the evidence set forth by the nonmoving party
with respect to that fact.”
Id.
Bold Earth Defendants argue that the court should apply
Colorado substantive law to this dispute because Plaintiffs
agreed to that application.
They point out that section 13-21-
203(c)(I) of Colorado Revised Statutes provides that a claim for
exemplary damages may not be included in an initial claim for
relief and “shall be allowed by amendment to the pleadings only
after the passage of sixty days following the exchange of initial
disclosures pursuant to rule 26 of the Colorado rules of civil
procedure and the plaintiff establishes prima facie proof of a
triable issue.”
Bold Earth Defendants’ partial summary judgment
motion seeks dismissal of the punitive damage claim in the First
Amended Complaint without prejudice, arguing that Plaintiffs did
not properly move to add the punitive damage claim.
Bold Earth
Defendants are not seeking summary judgment based on a lack of
evidence supporting the punitive damage claim.
Bold Earth Defendants seek dismissal of the punitive
damage claim contained in the First Amended Complaint even though
they did not oppose the filing of that document.
16
In other words,
Bold Earth Defendants did not argue that the request for punitive
damages was improper at the time Plaintiffs sought to amend their
Complaint in July 2013 to add Tyler’s mother as a Plaintiff.
See
ECF No. 109.
Under these circumstances, even assuming Colorado law
applies, Bold Earth Defendants may have waived any challenge to
the procedural propriety of the First Amended Complaint.
See
Haldeman v. Golden, 2007 WL 3238673, *2 (D. Haw. Nov. 1, 2007)
(“failure to raise an issue in a timely manner results in waiver
of that issue”).
A waiver would obviate the need for this court
to determine whether Plaintiffs have satisfied the prepleading
requirements of Colorado law.
Bold Earth Defendants argue that they could not be said
to have waived their argument because they raised the application
of section 13-21-203(c)(I) as a defense in their Answer to the
First Amended Complaint.
However, given the Colorado provisions
setting requirements that must be met before a punitive damage
claim may even be asserted, it is reasonable to think that any
challenge to the inclusion of a punitive damage claim in the
First Amended Complaint should have been raised at the time the
court was examining whether to allow the filing of the First
Amended Complaint.
Even if Bold Earth Defendants have not waived their
challenge, they fail to meet their initial burden on the present
17
motion for partial summary judgment because they fail to
establish that Colorado law governs this dispute.
The motion
assumes that Colorado law applies simply because the choice of
law provision says so.
The moving papers entirely fail to
acknowledge that there are broader legal principles governing
whether a court may apply a choice of law provision.
The motion
fails to meet the initial burden of demonstrating that Bold Earth
Defendants are entitled to summary judgment as a matter of law.
Accordingly, the court need not determine whether the punitive
damage claim was properly added under Colorado law.
In Airgo, Inc. v. Horizon Cargo Transport, Inc., 66
Haw. 590, 595, 670 P.2d 1277, 1281 (1983), the Hawaii Supreme
Court applied Restatement (Second) of Conflict of Laws § 187 to
determine whether to apply a choice of law provision.
At the
hearing on the present motion, Bold Earth Defendants argued that
this court should blindly apply section 187(1), which states,
“The law of the state chosen by the parties to govern their
contractual rights and duties will be applied if the particular
issue is one which the parties could have resolved by an explicit
provision in their agreement directed to that issue.”
Without
assisting the court by providing full briefing on the matter,
Bold Earth Defendants ask this court to apply section 187(1),
even though it is not at all clear on the present motion that
avoidance of section 663-1.54 of Hawaii Revised Statutes is
18
something “the parties could have resolved” via provisions in
their agreements.
In section 187(2), the Restatement notes that the law
of the state chosen by the parties to govern their contractual
rights and duties will be applied unless (a) the chosen state has
no substantial relationship to the parties or the transaction and
there is no other reasonable basis for the parties’ choice, or
(b) application of the law of the chosen state would be contrary
to a fundamental policy of a state.
In the present case, to
grant summary judgment on the punitive damage claim would require
this court to rule that Colorado law applies.
This court
declines to so rule without an examination as to whether the
release of Plaintiffs’ negligence claims would be contrary to
what may be fundamental Hawaii policy as expressed in section
663-1.54 of Hawaii Revised Statutes.
That statute clearly
provides that owners and operators of recreational activities
shall be liable for damages resulting from negligent acts.
This
court declines to rule that Colorado law trumps Hawaii law
without an express raising of the issue and the benefit of the
back-and-forth briefing of that issue that would flow from moving
papers that clearly framed the issue.
Bold Earth Defendants’ citation of Gemini Insurance
Company v. Kukui`ula Development Company, 855 F. Supp. 2d 1125
(D. Haw. 2012), without further analysis, does not establish that
19
this court should apply Colorado law in this case.
Gemini
involved an insurance contract with a choice of law provision.
Judge Leslie E. Kobayashi predicted in Gemini that Hawaii courts
would apply a “some nexus” test to a contractual choice of law
provision, stating that “the parties’ choice of law provision
will be upheld if that law has some nexus with either the parties
or the policy.”
Id. at 1141.
But Gemini did not involve the
application of a choice of law provision that might allow
Defendants to use another state’s law to escape liability for
conduct when Hawaii law specifically imposes such liability.
Even assuming that section 13-21-203(c)(I) of Colorado
Revised Statutes applies, Bold Earth Defendants’ argument that
the punitive damage claim was improperly added may well be a
procedural argument.
Certainly, to the extent the statute says
that an amendment to the pleadings to add a punitive damage claim
may come only “after the passage of sixty days following the
exchange of initial disclosures pursuant to rule 26 of the
Colorado rules of civil procedure,” the statute refers to the
timing of when leave may be sought to assert the claim, not to
the substance of the punitive damage claim itself.
In a diversity case, this court applies state
substantive law and federal procedural law.
Carnes, 491 F.3d 990, 995 (9th Cir. 2007).
See Zamani v.
The court recognizes
that, in Hartshorn Properties, LLC v. BNSF Railway Company, 2006
20
WL 3618292 (D. Colo. Dec. 7, 2006), the federal district court
applied a similar Colorado procedural rule.
But the order issued
in that case addressed a motion for reconsideration of an order
allowing the plaintiff in that case to file an amended complaint
with a punitive damage claim.
Calling the need to file an
additional pleading a “minor imposition,” the court ruled that
the plaintiff had demonstrated a prima face case of a triable
issue concerning punitive damages.
Bold Earth Defendants do not
show that application of section 13-21-203(c)(I) of Colorado
Revised Statutes in this case would similarly be nothing more
than a “minor imposition.”
Regardless of whether Plaintiffs did or did not
identify a triable issue of fact as to punitive damages before
seeking leave to file the First Amended Complaint, Bold Earth
Defendants agreed to the filing of that pleading.
Bold Earth
Defendants say that Plaintiffs could immediately seek leave to
file a Second Amended Complaint that includes the punitive damage
request if the court dismisses the punitive damage claim as
improperly raised in violation of section 13-21-203(c)(I).
This
defense position suggests that Bold Earth Defendants read section
13-21-203(c)(I) as raising procedural, not substantive,
requirements.
If those requirements are procedural, they do not
govern this federal diversity case.
21
Because Bold Earth Defendants have failed to meet their
initial burden of demonstrating as a matter of law that the court
should apply Colorado law and dismiss the punitive damage request
contained in the First Amended Complaint, the court denies the
motion for summary judgment.
The court is not here deciding
whether Hawaii or Colorado law applies.
Instead, this ruling is
premised on Bold Earth Defendants’ failure to meet their initial
burden as movants.
Any party may file a motion seeking a
determination as to whether Hawaii or Colorado law applies to
this case.
Any such motion should directly address the
applicability of the parties’ choice of law provision in light of
section 663-1.54 of Hawaii Revised Statutes.
22
V.
CONCLUSION.
The court denies the reconsideration motion styled as a
motion to dismiss and the motion for partial summary judgment
with respect to the punitive damage claim.
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, November 21, 2013.
/s/ Susan Oki Mollway
Susan Oki Mollway
Chief United States District Judge
Madoff, et al. v. America’s Adventure, Inc., et al., CIVIL NO. 12-00470 SOM/RLP; ORDER
DENYING HAWAII PACK AND PADDLE DEFENDANTS’ MOTION TO DISMISS; ORDER DENYING BOLD EARTH
DEFENDANTS’ MOTION FOR PARTIAL SUMMARY JUDGMENT
23
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?