Barnes v. Sea Hawaii Rafting, LLC et al

Filing 767

ORDER GRANTING DEFENDANTS KRIS HENRY, INC., R.S. MARLIN INC. DBA ALI'I OCEAN TOURS, AND MARY LYN OGLETREE'S MOTION TO DISMISS COUNTS V AND VI OF THE THIRD AMENDED COMPLAINT (ECF NO. 713) - Signed by JUDGE ALAN C. KAY on 10/07/2020.For above-stated reasons, the Court GRANTS Defendants Kris Henry, Inc., R.S. Marlin Inc. dba Ali'i Ocean Tours, and Mary Lyn Ogletree's Motion to Dismiss Counts V and VI of the Third Amended Complaint, ECF No. 713, as follows:1. Count V (intentional infliction of emotional distress) is DISMISSED WITHOUT PREJUDICE as against the Moving Defendants. Paragraphs 62 and 63 of the Third Amended Complaint are STRICKEN to the extent that they contain any references to the Moving Defe ndants. The prayer for relief is STRICKEN to the extent that it pleads damages from the Moving Defendants.2. Count VI (accounting) is DISMISSED WITH PREJUDICE as against the Moving Defendants. The prayer for relief is STRICKEN to the extent t hat it pleads an accounting from the Moving Defendants.If Plaintiff wishes to amend the Third Amended Complaint by asserting an IIED claim and/or other claims against the Moving Defendants, he must seek approval to do so by the Magistrate Jud ge within 30 days of issuance of this Order. Any proposed amendments must strictly comply with Rule 15 and Local Rule 10.4. The proposed complaint must include all of the claims that Plaintiff Barnes wishes to pursue, as well as all of the all egations that his claims are based upon, even if he previously presented these allegations in the Third Amended Complaint. Plaintiff cannot incorporate by reference any part of the prior complaints into the proposed amended complaint.The Cour t cautions Plaintiff Barnes that if he fails to seek leave to assert his IIED claim within 30 days, the Court will dismiss that claim with prejudice.COURTS CERTIFICATE of Service - Non-Registered CM/ECF Participants have been served by First Class Mail to the addresses of record listed on the Notice of Electronic Filing (NEF)(jni)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAI`I
CHAD BARRY BARNES,
Plaintiff,
v.
SEA HAWAI`I RAFTING, LLC;
et al.
Defendants.

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Civ. No. 13-00002 ACK-WRP

ORDER GRANTING DEFENDANTS KRIS HENRY, INC., R.S. MARLIN INC. DBA
ALI`I OCEAN TOURS, AND MARY LYN OGLETREE’S MOTION TO DISMISS
COUNTS V AND VI OF THE THIRD AMENDED COMPLAINT (ECF NO. 713)
The parties have been litigating this case since 2013.
What began as a seemingly common maritime case was then
complicated by two bankruptcies and several novel legal
questions at the intersection of bankruptcy and admiralty law.
Putting aside most of those complex—and in some cases stillunresolved—issues, now before the Court is a Motion to Dismiss
filed by three of the six named Defendants:

Kris Henry, Inc.;

R.S. Marlin Inc. dba Ali`i Ocean Tours; and Mary Lyn Ogletree
(together, the “Moving Defendants”).

The Moving Defendants ask

the Court to dismiss counts V (intentional infliction of
emotional distress) and VI (accounting) against them.

For the

reasons discussed below, the Court GRANTS the Moving Defendants’

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Motion to Dismiss Counts V and VI of the Third Amended
Complaint, ECF No. 713 (“Motion”).

BACKGROUND
For purposes of this Order, the Court will not recount
this case’s lengthy procedural history.

The Court only

discusses those facts and events of specific relevance to the
issues that this Order addresses.
I.

Procedural History
Even though this case has been pending for almost eight

years, the operative complaint was just filed in May of this
year.

Plaintiff Barnes first moved for leave to amend his claims

in March.

ECF Nos. 662 & 671.

In his proposed complaint, he

sought to name four new Defendants, including the three Moving
Defendants.

ECF No. 671-2.

the following claims:

Relevant here, he also sought to add

(1) a claim for intentional infliction of

emotional distress (“IIED”) against Defendant Sea Hawai`i
Rafting, LLC (“Defendant SHR”) and Defendant Aloha Ocean
Excursions LLC (“Defendant AOE”), ECF No. 671-2 at 16-17; and (2)
a claim for accounting against the three Moving Defendants, id.
at 7, 17-18.
On May 11, Magistrate Judge Porter granted in part and
denied in part Plaintiff Barnes’s motion for leave to file a
third amended complaint.

ECF No. 676 (the “MJ Order”).
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Pertinent here, Judge Porter granted Plaintiff Barnes leave to
(1) “add a claim for intentional infliction of emotional distress
against Defendant SHR and Defendant AOE,” and (2) “add a claim
for accounting against Mary Lyn Ogletree, Kris Henry, Inc., and
Ali`i Ocean Tours.”

Id. at 15.

Plaintiff filed his amended

complaint, ECF No. 677, on May 26, 2020, and an errata to the
complaint, ECF No. 679 (“Third Amended Complaint” or “3AC”) three
days later.

On July 10, the Moving Defendants filed the pending

Motion to Dismiss.

Plaintiff Barnes filed his Opposition on July

15, ECF No. 715, and the Moving Defendants filed their Reply on
September 16, ECF No. 747.

A telephonic hearing on the Motion

was held on September 30.
II.

Factual Allegations
Plaintiff Barnes is a seaman who was injured in 2012

when the boat on which he was working, the M/V Tehani, exploded.
Plaintiff Barnes initially brought this lawsuit seeking the
maritime remedy of maintenance and cure, among other relief.
This Motion involves an ongoing dispute over a commercial-use
boating permit that used to be owned by Defendant SHR and
associated with the M/V Tehani but was wrongfully and in bad
faith transferred to Defendant AOE.1/

See 3AC ¶ 7 (alleging

1/
Without getting into the specifics of this dispute over the permit,
which are outside the bounds of the Complaint allegations, the Court notes
that these issues have been the subject of compensatory sanctions imposed on

(Continued . . . )

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“matters that relate to the alleged misappropriation of the
commercial use permit and its further use by current Defendants
and the [Moving Defendants]”).
The Third Amended Complaint alleges two claims against
the Moving Defendants:

(1) intentional infliction of emotional

distress and (2) accounting.

In support of those claims, the

Third Amended Complaint asserts that the Moving Defendants worked
with Defendant Henry to use and profit from the wrongfullytransferred commercial-use permit.

3AC ¶ 18.

Defendant Ogletree

in particular had “some kind of social and /or personal
relationship” to Defendant Henry and Defendant Kris Henry, Inc.,
id. ¶ 24, and “worked in collusion” with Defendant Henry to earn
money from the commercial-use permit “rightfully belonging to
SHR,” id. ¶ 15, by “passing the funds” through the other Moving
Defendants, id. ¶ 17.

Defendant AOE and Defendant Henry. See ECF Nos. 608, 657, & 739. In the
course of imposing those sanctions, the Court made express findings that
Defendant AOE and Defendant Henry’s transfer of the permit from Defendant SHR
was wrongful and akin to bad faith. See id.

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STANDARD
I.

Rule 12(d)
Although the Moving Defendants brought their Motion

under Federal Rule of Civil Procedure (“Rule”) 12(b)(6), they
included evidence and indicated that the Motion should be
converted under Rule 12(d) into one seeking summary judgment.
Mot. at 3.

Plaintiff Barnes likewise treated the Motion as one

for summary judgment under Rule 12(d) and filed evidence along
with his Opposition.

See Opp. at 4.

Rule 12(d) provides that, “[i]f, on a motion under
Rule 12(b)(6) or 12(c), matters outside the pleadings are
presented to and not excluded by the court, the motion must be
treated as one for summary judgment under Rule 56.”

“Whether to

convert a Rule 12(b)(6) motion into one for summary judgment
pursuant to Rule 12(d) is at the discretion of the district
court.”

Adobe Sys. Inc. v. Blue Source Grp., Inc., 125 F. Supp.

3d 945, 968 (N.D. Cal. 2015).

“[A] district court is not

obliged to convert a 12(b)(6) motion to one for summary judgment
in every case in which a defendant seeks to rely on matters
outside the complaint.”

United States v. International

Longshoremen’s Ass’n, 518 F. Supp. 2d 422, 451 (E.D.N.Y. 2007).
Even though both parties here have submitted evidence
outside the pleadings and acknowledged that the Motion could be
converted under Rule 12(d), see Mot. at 3 & Opp. at 4, the Court
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exercises its discretion and declines to convert the Motion.
The Court finds conversion of the Motion to dismiss into one for
summary judgment inappropriate in these circumstances for a few
reasons.

For one, although this case has been in litigation for

several years, the three Moving Defendants were just recently
named in the lawsuit.

As a result, no discovery has been

conducted involving those Defendants in the context of the
claims asserted against them in the Third Amended Complaint.
The evidence submitted by the parties is also minimal,
incomplete, and unnecessary.2/

The Moving Defendants provide a

simple declaration effectively denying Plaintiff Barnes’s
allegations, without providing documents or other evidence;
Plaintiff Barnes’s evidence in response focuses on establishing
some meaningful connection or relationship between the Moving
Defendants and Defendant Henry to substantiate his complaint

2/
Other district courts have similarly found cases in the early stages
with little discovery between the parties and scant evidence submitted by the
parties to be inappropriate for conversion under Rule 12(d). See, e.g.,
Young v. City of Visalia, 687 F. Supp. 2d 1141, 1143 (E.D. Cal. 2009)
(declining to convert motion and review evidence where defendants filed a
12(b)(6) motion but included declarations and sought conversion under 12(d));
Johnson v. Mobile Cty. Sheriff Dep’t, No. CIV.A.06 0821 WS B, 2007 WL
2023488, at *2 (S.D. Ala. July 9, 2007) (“At this time, it would be
inappropriate to perform such a conversion, inasmuch as this action is in its
infancy and the parties are ill-equipped at this early stage of the
proceedings to present all the evidence that would be required for a proper
Rule 56 review.”); Grillo v. John Alden Life Ins. Co., 939 F. Supp. 685, 686
(D. Minn. 1996) (declining to consider affidavits submitted with motion to
dismiss and concluding that “the parties are in no position to present all
material pertinent to a motion for summary judgment”); see also Shaver v.
Operating Eng’rs Loc. 428 Pension Tr. Fund, 332 F.3d 1198, 1201 (9th Cir.
2003) (affirming district court’s decision to exclude evidence that merely
substantiated the plaintiff’s allegations).

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allegations.

See Shaver v. Operating Eng’rs Loc. 428 Pension

Tr. Fund, 332 F.3d 1198, 1201 (9th Cir. 2003) (holding that the
district court properly declined to review evidence and convert
motion because the submitted evidence was “superfluous because
the non-moving party does not have to substantiate its
allegations; the Court presumes everything it claims is true
anyway”).
Finally, the Court declines to convert the Motion
under Rule 12(d) to avoid creating unnecessary procedural
problems.

The Moving Defendants seek dismissal of one of the

claims (IIED) on procedural rather than substantive grounds,
making it unsuitable for disposal on summary judgment.
Specifically, the Moving Defendants argue that Count V should be
dismissed pursuant to Rule 15—which governs leave to amend—
because it exceeded the scope of leave granted by the Magistrate
Judge.

Thus, besides being unnecessary because the Motion can

be decided under Rules 12(b)(6) and 15(a), converting the Motion
to one for summary judgment would create procedural problems
that neither party has addressed.
For those reasons, considering extrinsic evidence and
converting the Motion to Dismiss at this stage would be
premature and inappropriate.

The Court therefore exercises its

discretion and declines to convert the Motion to a Rule 56
motion for summary judgment.

Instead, the Court looks to the
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face of the Third Amended Complaint and applies the proper Rule
12(b)(6) standard.
II.

Rule 12(b)(6)
Rule 12(b)(6) authorizes the Court to dismiss a

complaint that fails “to state a claim upon which relief can be
granted.”

Rule 12(b)(6) is read in conjunction with Rule 8(a),

which requires only “a short and plain statement of the claim
showing that the pleader is entitled to relief.”
P. 8(a)(2).

Fed. R. Civ.

The Court may dismiss a complaint either because it

lacks a cognizable legal theory or because it lacks sufficient
factual allegations to support a cognizable legal theory.
Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir.
1988).
In resolving a Rule 12(b)(6) motion, the Court must
accept all well-pleaded factual allegations as true and construe
them in the light most favorable to the plaintiff.

Sateriale v.

R.J. Reynolds Tobacco Co., 697 F.3d 777, 783 (9th Cir. 2012).
The complaint “must contain sufficient factual matter, accepted
as true, to ‘state a claim to relief that is plausible on its
face.’”

Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937,

173 L. Ed. 2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929
(2007)).

Mere conclusory statements in a complaint or

“formulaic recitation[s] of the elements of a cause of action”
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are not sufficient.
167 L. Ed. 2d 929.

Twombly, 550 U.S. at 555, 127 S. Ct. 1955,
Thus, the Court discounts conclusory

statements, which are not entitled to a presumption of truth,
before determining whether a claim is plausible.

Iqbal, 556

U.S. at 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868.

However,

“[d]ismissal with prejudice and without leave to amend is not
appropriate unless it is clear . . . that the complaint could
not be saved by amendment.”

Harris v. Cty. of Orange, 682 F.3d

1126, 1131 (9th Cir. 2012) (quoting Eminence Capital, LLC v.
Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (per curiam)).

DISCUSSION
As mentioned, the Complaint asserts two claims against
the Moving Defendants, which the Court will address in turn.
I.

Count V – IIED
Count V of the Third Amended Complaint asserts a claim

for intentional infliction of emotional distress against the
Moving Defendants, as well as against Defendants Henry, AOE, and
SHR.

It alleges that those Defendants breached a “duty to avoid

causing [Plaintiff Barnes] undue emotional distress” and that
Plaintiff Barnes suffered damages as a result of the breach.
3AC ¶¶ 62-63.

The Moving Defendants argue that Count V should

be dismissed against them because Plaintiff Barnes did not have
leave to file that claim against them.
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The Court agrees.

Rule 15 governs amendment of pleadings and states that
a party may amend a pleading once as a matter of course within
twenty-one days of serving it, or after service of a responsive
pleading or motion if one is required, whichever is earlier.
Fed. R. Civ. P. 15(a).

Otherwise, a party may amend a pleading

only with the opposing party’s written consent or with leave of
court.

Id. 15(a)(2).
When Plaintiff Barnes sought leave of court to amend

his claims, he specifically sought leave to assert his IIED
claim against Defendant SHR and Defendant AOE (as well Defendant
Henry, against whom the claim was already asserted).

See ECF

No. 671-2 ¶ 63 (“Defendant Henry, SHR and AOE owed the Plaintiff
a duty to avoid causing him undue emotional distress.”); id.
(“As a proximate result of HENRY’s SHR and AOE [sic] intentional
actions and omissions, HENRY, SHR and AOE has [sic] inflicted
severe mental and physical distress, anxiety, fear,
embarrassment, shock, and indignity on Plaintiff BARNES . . . .”
(emphasis added)); see also MJ Order at 14 (“Plaintiff seeks
leave to add Defendant SHR and Defendant AOE to his claim for
intentional infliction of emotional distress, which is currently
only asserted against Defendant Henry.”).

The Magistrate Judge

granted Plaintiff Barnes’s request for leave to “add a claim for
intentional infliction of emotional distress against Defendant
SHR and Defendant AOE.”

MJ Order at 15 (emphasis added).
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Because the Magistrate Judge did not grant leave for
Plaintiff Barnes to bring new claims against new Defendants,
Barnes’s attempt to assert an IIED claim against the Moving
Defendants fails.

Generally speaking, amended pleadings may not

exceed the scope of leave granted by the district court.

When

leave is granted to amend certain claims against specific
parties, the Court may dismiss and strike any portions of the
amended pleading not expressly permitted.

See Raiser v. City of

Los Angeles, No. CV 13-2925 RGK RZ, 2014 WL 794786, at *4 (C.D.
Cal. Feb. 26, 2014); see also Fed. R. Civ. P. 15(a).

“The rule

applies even if the court did not expressly bar amendments other
than the one(s) it did allow.”

Raiser, 2014 WL 794786 at *4

(citing FDIC v. Kooyomjian, 220 F.3d 10, 15 (1st Cir. 2000)).
That rule is particularly compelling here, considering
that the amendment at issue comes almost eight years after the
original suit was filed.

In short, Plaintiff Barnes has made

changes that he was not permitted to make.

In fact, Plaintiff

Barnes never even bothered to ask for leave to make the
addition, or any addition that would entitle him to seek damages
from the Moving Defendants.
Because Plaintiff Barnes did not have the right to
assert new claims against new defendants in his Third Amended
Complaint, the Court DISMISSES the newly-asserted IIED claim

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without prejudice.3/

Accordingly, the Court strikes from

paragraphs 62 and 63 of the Third Amended Complaint any
references to Defendant Kris Henry, Inc., Defendant Ali`i Ocean
Tours, and Defendant Ogletree.

In other words, those paragraphs

are stricken to the extent that they assert an IIED claim
against the Moving Defendants.4/
II.

Count VI – an Accounting
Count VI of the Third Amended Complaint pleads “as a

distinct cause of action” a claim for accounting.

3AC ¶ 23.

It

“demands a full and complete accounting of all funds” that
Defendants “have generated from the use in any way of the Tehani
and the commercial use permit and the use of the M/V Wiwo`ole in
relationship to the use of the permit which now lists M/V
Wiwo`ole as the vessel attached to[] [t]he permit.”
see also 3AC ¶ 23.

3AC ¶ 64;

As discussed above, despite the extraneous

3/ The Moving Defendants argue that any claim for damages against them
should be stricken because the MJ Order only granted Plaintiff Barnes leave
to seek the equitable remedy of judicial accounting, not any legal damages.
Plaintiff Barnes did not respond to this argument in his Opposition. The
Court has held that the only legal claim asserted against the Moving
Defendants must be dismissed because it was outside the scope of leave
granted by the Magistrate Judge. Thus, there indeed is no basis for damages
against the Moving Defendants and that portion of the prayer for relief is
stricken.
4/ The Moving Defendants also seek Rule 11 sanctions, asking the Court
to issue an order to show cause why Plaintiff Barnes’s inclusion of the IIED
claim against the Moving Defendants does not violate Rule 11(b). The Court
declines to impose Rule 11 sanctions. Although Plaintiff Barnes included the
IIED claim improperly, it was not—in the Court’s view—presented to “harass,
cause unnecessary delay, or needlessly increase the cost of litigation.” See
Fed. R. Civ. P. 11(b). In any event, the major issue raised by the Moving
Defendants’ Motion is the accounting claim, which Plaintiff Barnes was
allowed to assert.

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evidence submitted by the parties, the Court exercises its
discretion not to rely on that material.

Looking to the Third

Amended Complaint on its face, the Court holds that the
allegations do not adequately state an independent claim for
relief against the Moving Defendants.
The action of accounting is an equitable remedy.

It

is “designed to provide a remedy to compel a person who, by
virtue of some confidential or trust relationship, has received
or been entrusted with money or property belonging to another or
which is to be applied or disposed of in a particular manner, to
render an account thereof.”

Gaspar v. Bank of Am., N.A., Civ.

No. 10-00323 JMS/BMK, 2010 WL 4226466, at *7 (D. Haw. Oct. 18,
2010); see also Block v. Lea, 5 Haw. App. 266, 277-278, 688 P.2d
724, 732-33 (Ct. App. 1984).

A “necessary prerequisite to the

right to maintain a suit for an equitable accounting, like all
other equitable remedies is . . . the absence of an adequate
remedy at law.”

Porter v. Hu, 116 Haw. 42, 55, 169 P.3d 994,

1007 (Ct. App. 2007) (quoting Bd. of Dirs. of the Ass’n of
Apartment Owners of Regency Tower Condo. Project v. Regency
Tower Venture (Regency Tower Venture), 2 Haw. App. 506, 513, 635
P.2d 244, 249 (1981)).

The Moving Defendants argue that there

is no legal basis for a claim for accounting because (1) there
was no confidential or trust relationship between Plaintiff
Barnes and the Moving Defendants, nor did the Moving Defendants
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receive any money or property belonging to Plaintiff Barnes, and
(2) Plaintiff Barnes has an adequate remedy at law.

See Mot. at

3.
Plaintiff Barnes premises his request for an
accounting on the Moving Defendants’ relationship with Defendant
Henry, and their “use [of] the permit that [Defendant] Henry
improperly converted from the Sea Hawai`i Rafting LLC to earn
significant amounts of money.”

3AC ¶ 18.

As to Defendant

Ogletree, the Third Amended Complaint alleges that she has “some
kind of social and /or personal relationship” to Defendant Henry
and Defendant Kris Henry, Inc., and that she “worked in
collusion” with Defendant Henry to earn money through the use of
the commercial-use permit.

3AC ¶¶ 15, 17, 24.

Defendant

Ogletree worked with Defendant Henry to earn money and to hide
those profits by “passing the funds through” the other Moving
Defendants.

3AC ¶ 17.

As to Defendant Ali`i Ocean Tours, the

Third Amended Complaint alleges simply that it is “involved in
some fashion with the events described in this pleading.”

3AC ¶

25.
The Third Amended Complaint contains no facts
explaining why Plaintiff Barnes is entitled to an equitable
accounting from the Moving Defendants.

While not entirely

clear, Plaintiff Barnes’s theory appears to be that he is
entitled to an accounting because the various Defendants have
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profited from—or helped Defendant Henry profit from—the use of
the commercial-use permit.

As stated above, judicial accounting

is an equitable remedy meant to compel “a person who, by virtue
of some confidential or trust relationship, has received or been
entrusted with money or property belonging to another or which
is to be applied or disposed of in a particular manner.”
Gaspar, 2010 WL 4226466 at *7.
The Third Amended Complaint does not allege—either
explicitly or implicitly—any “confidential or trust
relationship” between Plaintiff Barnes and the Moving
Defendants.5/

Indeed, the Complaint allegations, as well as

Plaintiff Barnes’s arguments in his Opposition, focus on the
relationship between the Moving Defendants and the other
Defendants.6/
best.7/

Even those allegations are vague and tenuous, at

See, e.g., 3AC ¶ 24 (alleging “some kind of social and

Some courts have compared the “confidential or trust” relationship
to a fiduciary one. See, e.g., Lindsey v. Meridias Capital, Inc., No. CIV.
11-00653 JMS, 2012 WL 488282, at *6–7 (D. Haw. Feb. 14, 2012) (collecting
fiduciary duty cases and holding that there is no “confidential or trust
relationship” between a mortgagor and a mortgagee “unless the mortgagee
exceeds its role as a lender of money”).
6/
At the hearing, counsel for both Plaintiff Barnes and the Moving
Defendants likewise focused on the relationship between those Defendants and
other Defendants. Again, that is not the relevant question for deciding
whether Plaintiff Barnes is entitled to an accounting remedy.
7/
Even at the pleading stage, such vague allegations are insufficient.
In Lee v. Mortg. Electronic Registration Sys., Inc., Civ. No. 10-00687
JMS/BMK, 2012 WL 2467085 (D. Haw. June 27, 2012), another judge in this
district dismissed without leave to amend an accounting claim brought against
a bank and Mortgage Electronic Registration Systems, Inc. (“MERS”) in a nonjudicial foreclosure case. Id. at *7. The complaint alleged breach of
contract and other wrongdoing by MERS in connection with the foreclosure, and
5/

(Continued . . . )

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/or personal relationship” between Defendant Ogletree and
Defendant Henry); id. ¶ 25 (alleging that Defendant Ali`i Ocean
Tours is “involved in some fashion with the events described in
this pleading”).

The Court understands that Plaintiff Barnes

has not conducted discovery to glean details about those
relationships between the various Defendants, but that does not
excuse the fact that there are no allegations of a “confidential
or trust relationship” between the parties that matter for
purposes of the analysis:
Defendants.

Plaintiff Barnes and the Moving

In any event, the Court also agrees with the Moving

Defendants that the case law requires something more than a
simple business connection to entitle a plaintiff to a judicial
accounting.
Also absent from the Third Amended Complaint is any
allegation that the Moving Defendants ever received or were
entrusted with money or property belonging to Plaintiff Barnes.
The closest the Complaint gets to any such allegation is the
assertion that the Defendants profited from the use of the

included a claim for accounting. Id. The accounting claim alleged that the
bank and MERS were “co-conspirators” “unjustly enriched by MERS’ material
breach of contract . . . entitling Plaintiff to a full accounting of such ill
gotten profits and all such unjust enrichment . . . .” Id. In dismissing
the accounting claim, the court held that the allegations left “wholly
unanswered” what exactly the bank did that was the basis for any claim or how
it acted as a co-conspirator. Id. (noting that “[t]he FAC includes no
allegations of any wrongdoing by [the bank]”). Moreover, beyond that “basic
pleading deficiency,” the court cited other cases in this district holding
that “a claim for an ‘accounting’ fails as a matter of law.” Id. (collecting
cases).

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commercial-use permit.

But the permit never belonged to

Plaintiff Barnes, and he does not allege as much.8/

Indeed, the

Third Amended Complaint asserts that the permit “rightfully”
belonged to Defendant SHR (not Plaintiff Barnes) and was then
transferred to Defendant AOE.

3AC ¶ 15.

Accordingly, Plaintiff

Barnes’s accounting claim fails in substance for the two
independent reasons that (1) it does not allege a “confidential
or trust relationship” between the Moving Defendants and
Plaintiff Barnes, and (2) it does not allege that the Moving
Defendants received or were entrusted with any money or property
belonging to Plaintiff Barnes.
The Moving Defendants’ second argument is that an
accounting is not necessary because Barnes has an adequate
remedy at law.

Mot. at 3.

Again, the Court agrees; but with

the qualification that Plaintiff Barnes asserts no other claim
from which damages might be recovered from the Moving
Defendants.

“The necessary prerequisite to the right to

maintain a suit for an equitable accounting, like all other
equitable remedies, is . . . the absence of an adequate remedy
at law.

Barranco v. 3D Sys. Corp., No. CV 13-00412 LEK-RLP,

2017 WL 1900970, at *4 (D. Haw. May 9, 2017).

Plaintiff Barnes

8/
The Court notes once more that this issue has been the subject of
sanctions against Defendant Henry and Defendant AOE, but there is no
allegation in this case that the permit ever was owned by or belonged to
Plaintiff Barnes.

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has pleaded no factual allegations from which the Court can
infer that he lacks an adequate remedy at law.
The information sought in the accounting claim is
accessible to Plaintiff through the normal discovery process.
See Didion Milling, Inc. v. Agro Distrib., LLC, Case No. 05-C227, 2007 WL 702808, at *11 (E.D. Wis. March 2, 2007) (“Although
an accounting cause of action was traditionally utilized as a
means of obtaining access to relevant records, the need for a
party to pursue an accounting cause of action in order to obtain
such access has been greatly minimized in light of the modern
federal discovery rules.”).

Most notably—as the Moving

Defendants point out—Plaintiff Barnes could third-party subpoena
the Moving Defendants for records related to these business and
financial activities.

And to the extent that Defendant Ogletree

or other Moving Defendants were involved in Defendant Henry and
Defendant AOE’s business practices, such information could be
sought in discovery.

Likewise, this Court has repeatedly

suggested ways for Plaintiff Barnes to pursue discovery from the
previously-named Defendants, including by offering him another
opportunity to seek the information when the Court imposed
sanctions on Defendant Henry and Defendant AOE for wrongfully
transferring the permit.
In any event, other judges in this district regularly
reject standalone accounting claims, characterizing accounting
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as a remedy, not an independent cause of action.

See, e.g.,

Amina v. WMC Fin. Co., 329 F. Supp. 3d 1141, 1158 (D. Haw. 2018)
(holding that accounting claim sought a remedy but was not a
stand-alone claim, and noting that the plaintiff cited “no
authority for any independent cause of action for an
accounting”), aff’d on other grounds, 812 Fed. App’x 509 (9th
Cir. July 10, 2020); Gray v. OneWest Bank, Fed. Sav. Bank, No.
CIV. 13-00547 JMS, 2014 WL 3899548, at *14 (D. Haw. Aug. 11,
2014) (rejecting claim for accounting and noting that “Plaintiff
may seek such information through discovery as opposed to a
claim for relief”); Lee v. Mortg. Electronic Registration Sys.,
Inc., Civ. No. 10-00687 JMS/BMK, 2012 WL 2467085, at *7 (D. Haw.
June 27, 2012) (“[T]his court has already explained that a claim
for ‘accounting’ fails as a matter of law.”); Lindsey v.
Meridias Capital, Inc., No. CIV. 11-00653 JMS, 2012 WL 488282,
at *7 (D. Haw. Feb. 14, 2012) (finding that plaintiffs were not
entitled to an equitable accounting because “if they are able to
state a claim upon which relief may be granted, they may seek
such information through discovery”); Gaspar, 2010 WL 4226466 at
*7 (finding that “a claim for an ‘accounting’ fails as a matter
of law”).
Plaintiff Barnes in his Opposition cites no cases to
support his independent claim for accounting.

See Opp. at 4-8.

The case often relied on to support an accounting remedy under
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Hawai`i law is Porter v. Hu, 116 Haw. 42, 169 P.3d 994 (Ct. App.
2007).

Porter involved breach of contract and other misconduct

allegations brought by insurance agents against a parent
insurance company.

Id. at 55-56, 169 P.3d at 1007-08

(discussing allegations that an agent “wrongfully lost his book
of business as a result of the parent insurer’s misconduct”).
The Hawai`i Intermediate Court of Appeals (the “ICA”) held that
the trial court did not abuse its discretion by awarding
equitable relief for an “unjust enrichment/accounting” claim
even though the plaintiff-agents had recovered some contract
damages.

Id. at 51, 55-56, 169 P.3d at 1003, 1007-08.
Porter does not save Plaintiff Barnes’s accounting

claim here.

For one, the claim in Porter was framed as “unjust

enrichment/accounting.”
1003.

Porter, 116 Haw. at 51, 169 P.3d at

In other words, accounting was not asserted as a

standalone claim.

Moreover, the jury trial and the trial

court’s factual findings established wrongdoing on the part of
the defendant insurer.

See id. at 55-56, 169 P.3d at 1007-08.

The trial court then found that remedy at law was inadequate, so
“imposed an equitable remedy upon determining that the contract
remedies did not adequately address Defendants’ unjust
enrichment (a matter within the circuit court’s discretion).”
Id.

Here, Plaintiff Barnes asserts no claim—either legal or

equitable—against the Moving Defendants from which damages might
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be recovered, such as the unjust enrichment or the contract and
tort claims in Porter.
Finally, nothing in the ICA’s decision in Porter
addresses whether an accounting was ever even imposed as a
remedy.

To the contrary, the trial court awarded the plaintiff-

agents equitable damages as restitution.
56, 169 P.3d at 1008.

Porter, 116 Haw. at

The ICA decision says nothing about

bringing a standalone accounting cause of action absent other
claims or allegations of specific wrongdoing.

For those

reasons, Porter is distinguishable from the case here, and
Plaintiff Barnes has not provided any argument persuading the
Court that he is entitled to an equitable accounting against the
Moving Defendants.9/
For the foregoing reasons, the accounting claim is
dismissed against the Moving Defendants WITH PREJUDICE, as the
Court concludes that the accounting claim could not be saved by
amendment.

A recent Ninth Circuit decision applying Hawai`i law also
distinguished Porter and its implications for the availability of equitable
relief. The panel noted that even though some Hawai`i cases have made
equitable relief available even where there is a contract remedy, those cases
are inapposite where the plaintiff “did not elect to bring claims for unjust
enrichment or breach of the duty of loyalty.” See Barranco v. 3D Sys. Corp.,
952 F.3d 1122, 1130 (9th Cir. 2020).
9/

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CONCLUSION
For above-stated reasons, the Court GRANTS Defendants
Kris Henry, Inc., R.S. Marlin Inc. dba Ali`i Ocean Tours, and
Mary Lyn Ogletree’s Motion to Dismiss Counts V and VI of the
Third Amended Complaint, ECF No. 713, as follows:
1.

Count V (intentional infliction of emotional

distress) is DISMISSED WITHOUT PREJUDICE as against the Moving
Defendants.

Paragraphs 62 and 63 of the Third Amended Complaint

are STRICKEN to the extent that they contain any references to
the Moving Defendants.

The prayer for relief is STRICKEN to the

extent that it pleads damages from the Moving Defendants.
2.

Count VI (accounting) is DISMISSED WITH PREJUDICE

as against the Moving Defendants.

The prayer for relief is

STRICKEN to the extent that it pleads an accounting from the
Moving Defendants.
If Plaintiff wishes to amend the Third Amended
Complaint by asserting an IIED claim and/or other claims against
the Moving Defendants, he must seek approval to do so by the
Magistrate Judge within 30 days of issuance of this Order.

Any

proposed amendments must strictly comply with Rule 15 and Local
Rule 10.4.

The proposed complaint must include all of the

claims that Plaintiff Barnes wishes to pursue, as well as all of
the allegations that his claims are based upon, even if he
previously presented these allegations in the Third Amended
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Complaint.

Plaintiff cannot incorporate by reference any part

of the prior complaints into the proposed amended complaint.
The Court cautions Plaintiff Barnes that if he fails
to seek leave to assert his IIED claim within 30 days, the Court
will dismiss that claim with prejudice.

IT IS SO ORDERED.
DATED:

Honolulu, Hawai`i, October 7, 2020.

________________________________
Alan C. Kay
Sr. United States District Judge

Barnes v. Sea Hawai`i Rafting, et al., Civ. No. 13-00002 ACK-RLP, Order
Granting Defendants Kris Henry, Inc., R.S. Marlin Inc. dba Ali`i Ocean Tours,
and Mary Lyn Ogletree’s Motion to Dismiss Counts V and VI of the Third
Amended Complaint (ECF No. 713).

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