Hancock et al v. Kulana Partners, LLC et al

Filing 49

ORDER (1) GRANTING DEFENDANT KULANA PARTNERS, LLC'S 16 MOTION TO DISMISS COMPLAINT; (2) GRANTING DEFENDANT FIDELITY NATIONAL TITLE & ESCROW OF HAWAII INC.'S 37 MOTION FOR JUDGMENT ON THE PLEADINGS; AND (3) DENYING PLAINTIFFWILLIAM HANC OCK'S 42 COUNTER-MOTION FOR SUMMARY JUDGMENT AND PRELIMINARY INJUNCTION. Signed by JUDGE DERRICK K. WATSON on 1/10/2014. ~ The Clerk of Court is directed to close this case. (ecs, )CERTIFICATE OF SERVICEParticipants 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 HAWAI`I

WILLIAM R. HANCOCK, individually
and as Trustee of HANCOCK AND
COMPANY, INC. PROFIT SHARING
TRUST, under trust instrument April 3,
1993,
Plaintiff,
vs.
KULANA PARTNERS, LLC, A
HAWAII LIMITED LIABILITY
COMPANY; FIDELITY NATIONAL
TITLE & ESCROW OF HAWAII,
INC., DOES 1-10;

CIVIL NO. 13-00198 DKW-RLP
ORDER (1) GRANTING
DEFENDANT KULANA
PARTNERS, LLC’S MOTION TO
DISMISS COMPLAINT; (2)
GRANTING DEFENDANT
FIDELITY NATIONAL TITLE &
ESCROW OF HAWAII INC.’S
MOTION FOR JUDGMENT ON
THE PLEADINGS; AND
(3) DENYING PLAINTIFF
WILLIAM HANCOCK’S
COUNTER-MOTION FOR
SUMMARY JUDGMENT AND
PRELIMINARY INJUNCTION

Defendants.

1

ORDER (1) GRANTING DEFENDANT KULANA PARTNERS, LLC’S
MOTION TO DISMISS COMPLAINT; (2) GRANTING DEFENDANT
FIDELITY NATIONAL TITLE & ESCROW OF HAWAII INC.’S
MOTION FOR JUDGMENT ON THE PLEADINGS; AND
(3) DENYING PLAINTIFF WILLIAM HANCOCK’S COUNTER-MOTION
FOR SUMMARY JUDGMENT AND PRELIMINARY INJUNCTION
INTRODUCTION
Before the Court are the following motions: (1) Defendant Kulana
Partners, LLC’s (“KPL”) Motion to Dismiss Complaint, filed on June 24, 2013
(“KPL Motion”); (2) Defendant Fidelity National Title & Escrow of Hawaii Inc.’s
(“Fidelity”) Motion for Judgment on the Pleadings, filed on September 6, 2013
(“Fidelity Motion”); and (3) Plaintiff William R. Hancock (“Plaintiff”) individually
and as Trustee of Hancock and Company, Inc. Profit Sharing Trust’s
Counter-Motion for Summary Judgment and Preliminary Injunction, filed on
October 11, 2013 (“Plaintiff’s Motion”). Pursuant to Local Rule 7.2(d), the Court
finds these matters suitable for disposition without a hearing. After careful
consideration of the supporting and opposing memoranda, and the relevant legal
authority, the Court hereby GRANTS the KPL Motion and Fidelity Motion and
DENIES Plaintiff’s Motion for the reasons set forth below.

2

BACKGROUND
I.

Plaintiff’s Complaint
Plaintiff filed his Complaint against KPL and Fidelity on April 26,

2013, seeking declaratory and injunctive relief relating to the ownership of real
property known as Remnant 3, a 14.6 acre parcel associated with the Kulana 382,
LLC development in Kapaa, Kauai (the “property” or “Remnant 3”). Plaintiff
alleges that, in July 2002, he was the fee simple owner of the property, and
negotiated its sale to KPL. In a July 22, 2002 Deposit Receipt Offer and
Acceptance (“DROA”), Plaintiff and Dustin Crane, acting on behalf of KPL, agreed
to the following sales terms: a $2 million purchase price consisting of $1.1 million in
cash and $900,000 by way of “Kulana Partners Privileged Right to Purchase
Properties.” Complaint ¶ 10.
Fidelity served as escrow agent for the transaction. According to
Plaintiff, on August 12, 2002, he went to Fidelity’s Kapaa office to review two deeds
that were to convey the property: (1) a Warranty Deed conveying from Plaintiff
William Hancock individually to William Hancock as Trustee of Hancock and
Company, Inc. Profit Sharing Trust, under trust instrument April 3, 1993; and (2) a
Trustee’s Deed conveying from Plaintiff as Trustee to KPL. Complaint ¶¶ 11-12.
Plaintiff alleges that the Trustee Deed that he reviewed contained in the “Subject
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To” section, Paragraph 12, language making the conveyance subject to “Any rights
of the parties in possession of a portion of, or all of, said land, which rights are not
disclosed by the public record.” Complaint ¶ 13. He further alleges that, at
Paragraph 16, the Trustee Deed “described an easement in the ‘north corner’ that by
meets [sic] and bounds set forth the description of an easement that is in the north
corner of the property at or near the location of the Grinpas Easement.” Complaint
¶ 14. Plaintiff alleges that “but for the existence of this in the ‘Subject To’ section,
Plaintiff would not have executed the deed.” Complaint ¶¶ 13-14.
According to Plaintiff, on August 13, 2002, Fidelity faxed the Warranty
Deed and Trustee Deed to Glenn Hale, KPL’s counsel. Plaintiff asserts that he did
not know of Hale’s involvement in the escrow. Complaint ¶¶ 15-16. He then
alleges that, on August 19, 2002, Fidelity faxed three more documents to Hale: (1) a
“Subject To Page for Deeds”; (2) a “copy of Land Patent (Per Buyer’s Request”; and
(3) an “Updated Prelim (Rollback Taxes Removed).” Complaint ¶ 19. Finally,
Plaintiff alleges that, on August 26, 2002, a Fidelity employee (Lorretta) sent a
memorandum to another Fidelity employee (Jeannette) regarding the Hancock-KPL
escrow, stating: “WE NEED TO REPLACE THE SUBJECT TO PAGE ON BOTH
OF THE DEEDS . . . THE TOGETHER WITH PARAGRAPH (ON THE TOP) IS

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MISSING. I BELIEVE THAT YOU ALREADY HAVE THE DEED AND I
HAVE IT SET UP FOR RECORDING ON WEDNESDAY.” Complaint ¶ 18.
Plaintiff claims that the “Subject To” section of the Trustee Deed that
he executed on August 12, 2002 was fraudulently modified to remove the easement
at Paragraph 16 and unrecorded interest at Paragraph 12. The “altered deed” was
then recorded in the Bureau of Conveyances, State of Hawaii, by Fidelity on August
28, 2002 as Document Number 2002-152285. Plaintiff alleges that he never
received a copy of the August 26, 2002 memorandum, nor was he otherwise
informed that the documents were modified. Complaint ¶¶ 19-20. According to
Plaintiff, he did not learn of the “forged deed” until 2013 because of “fraudulent
concealment by Fidelity and KPL[.]” Complaint ¶ 23.
Plaintiff’s April 26, 2013 Complaint sets forth the following claims for
relief: (1) declaratory judgment that the Trustee Deed recorded as Document No.
2002-152285 is void; (2) injunctive relief barring KPL from “uttering the forged
Trustee Deed” in any proceeding or transaction; and (3) a writ of ejectment against
KPL for its trespass on the property.
II.

State Court Action
Prior to the filing of the instant action, Plaintiff and KPL were named as

defendants in Grinpas v. Kapaa 382, LLC, et al., Civ. No. 07-1-0132, which is
5

currently before the Fifth Circuit Court, State of Hawaii (“state court action” or
“Grinpas”). The Grinpas plaintiffs were parties to a license agreement under
which they allege that Plaintiff and Kapaa 382, LLC approved the construction of a
roadway over the Remnant 3 easement. The parties thereafter entered into a
September 11, 2003 Settlement Agreement to resolve disputes that had arisen
amongst them. Under the Settlement Agreement, Plaintiff and Kapaa 382, LLC
agreed to provide the Grinpas plaintiffs an access and utilities easement through
Remnant 3. The Grinpas plaintiffs allege that Plaintiff and Kapaa 382, LLC did not
convey the agreed-upon easement and that KPL refuses to convey the access and
utilities easement through Remnant 3. See KPL Ex. 1 (Grinpas Complaint).
The Fifth Circuit Court granted final judgment against Plaintiff and in
favor of the Grinpas plaintiffs with respect to their breach of contract claim. The
state court ruled that Plaintiff breached the 2003 Settlement Agreement by failing to
convey the easement to the Grinpas plaintiffs, and Plaintiff did not appeal the final
judgment. See KPL Ex. 9 (Grinpas Order Granting Final Judgment). Following
the Grinpas plaintiffs’ appeal of the Fifth Circuit Court’s granting of partial
summary judgment to KPL, the matter was remanded back to the trial court. In a
March 22, 2013 order, the Fifth Circuit Court denied Plaintiff’s motion for summary

6

judgment, in which he argued that the Trustee Deed was forged, and therefore void.
KPL Ex. 12 (2/15/13 Motion for Summary Judgment); KPL Ex. 13 (3/22/13 Order).
The parties now seek adjudication of the claims in Plaintiff’s
Complaint. KPL seeks dismissal on the grounds that Plaintiff’s claims: (1) are
barred by the statute of limitations; (2) violate the Rooker-Feldman doctrine; and
(3) fail to allege fraud with the particularity required by Federal Rule of Civil
Procedure 9(b). Fidelity seeks judgment on the pleadings on the grounds that:
(1) none of Plaintiff’s allegations state a claim against Fidelity; and (2) Plaintiff’s
claims sound in fraud and are barred by the applicable statute of limitations.
Plaintiff seeks summary judgment on the issues raised in the KPL Motion on the
grounds that (1) there is no genuine issue of material fact that the Trustee Deed was
forged; and (2) Plaintiff did not have actual or constructive notice of the forged
Trustee Deed prior to the running of the statute of limitations.
STANDARD OF REVIEW
I.

Motion to Dismiss
KPL seeks dismissal pursuant to Federal Rules of Civil Procedure

12(b)(1) and (b)(6). Rule 12(b)(1) authorizes a district court to dismiss an action
for lack of subject matter jurisdiction. “[T] he party asserting subject matter
jurisdiction has the burden of proving its existence.” Robinson v. United States,
7

586 F.3d 683, 685 (9th Cir. 2009). Rule 12(b)(6) permits a motion to dismiss a
claim for failure to state a claim upon which relief can be granted. Pursuant to
Ashcroft v. Iqbal, “[t]o survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible
on its face.’” 555 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly,
550 U.S. 554, 570 (2007)). “[T]he tenet that a court must accept as true all of the
allegations contained in a complaint is inapplicable to legal conclusions.” Id.
Accordingly, “[t]hreadbare recitals of the elements of a cause of action, supported
by mere conclusory statements, do not suffice.” Id. (citing Twombly, 550 U.S. at
555). Rather, “[a] claim has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). Factual
allegations that only permit the court to infer “the mere possibility of misconduct”
do not constitute a short and plain statement of the claim showing that the pleader is
entitled to relief as required by Rule 8(a)(2). Id. at 679.
Courts may “consider certain materials—documents attached to the
complaint, documents incorporated by reference in the complaint, or matters of
judicial notice—without converting the motion to dismiss into a motion for
summary judgment.” United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003);
8

see also Cooper v. Pickett, 137 F.3d 616, 622-23 (9th Cir. 1997) (When ruling on a
motion to dismiss, a court may also consider documents central to the allegations in
a complaint even if the documents are not attached to the complaint, so long as the
authenticity of the documents is undisputed.). Accordingly, the Court takes judicial
notice of the publicly recorded deeds and the documents filed in the state court
action appended to the KPL Motion and Fidelity Motion. See United States v.
14.02 Acres of Land More or Less in Fresno County, 547 F.3d 943, 955 (9th Cir.
2008) (the court may take judicial notice of “matters of public record”); Lindsey v.
Matayoshi, 2012 WL 1656931, at *4 (D. Haw. May 9, 2012) (explaining when the
court may take judicial notice of documents); United States ex rel. Robinson
Rancheria Citizens Council v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir. 1992)
(Courts “may take notice of proceedings in other courts, both within and without the
federal judicial system, if those proceedings have a direct relation to matters at
issue.”).
II.

Judgment On the Pleadings
Fidelity brings its motion pursuant to Rule 12(c) for judgment on the

pleadings. The rule states: “After the pleadings are closed—but early enough not to
delay trial—a party may move for judgment on the pleadings.” Fed. R. Civ. P.
12(c). The standard governing a Rule 12(c) motion for judgment on the pleadings
9

is “functionally identical” to that governing a Rule 12(b)(6) motion. United States
ex rel. Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1054 n.4 (9th Cir.
2011). “Judgment on the pleadings under Rule 12(c) is proper when the moving
party establishes on the face of the pleadings that there is no material issue of fact
and that the moving party is entitled to judgment as a matter of law.” Jensen
Family Farms, Inc. v. Monterey Bay Unified Air Pollution Control Dist., 644 F.3d
934, 937 n.1 (9th Cir. 2011).
Generally, when matters outside the pleadings are considered, a motion
for judgment on the pleadings must be construed as one for summary judgment
under Rule 56 of the Federal Rules of Civil Procedure. See Fed. R. Civ. P. 12(d).
Courts have held, however, that when adjudicating a Rule 12(c) motion, courts may
consider matters subject to judicial notice without converting the motion into one for
summary judgment. See Heliotrope Gen., Inc. v. Ford Motor Co., 189 F.3d 971,
981 n.18 (9th Cir. 1999) (“When considering a motion for judgment on the
pleadings, this court may consider facts that are contained in materials of which the
court may take judicial notice.” (quotation marks omitted)); accord Lacondeguy v.
Adapa, 2011 WL 9572, at *2 (E.D. Cal. Jan. 3, 2011); Williams v. City of Antioch,
2010 WL 3632199, at *2 (N.D. Cal. Sept. 2, 2010).

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III.

Motion for Summary Judgment
Plaintiff seeks summary judgment pursuant to Rule 56. Pursuant to

Federal Rule of Civil Procedure 56(a), a party is entitled to summary judgment “if
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.” Because neither Defendant filed
a motion grounded in Rule 56, Plaintiff’s “Counter-Motion for Summary Judgment”
is a misnomer. In light of the Court’s granting of the KPL Motion and Fidelity
Motion, however, the Court concludes that Plaintiff is not entitled to judgment under
either Rule 12 or Rule 56.
DISCUSSION
I.

Plaintiff’s Claims Sound in Fraud
Whether styled as claims for declarative and injunctive relief, forgery,

“uttering” a forged deed, trespass, or ejectment, Plaintiff’s claims unmistakably
sound in fraud.
Plaintiff alleges that the Trustee Deed was “alter[ed]” (Complaint
¶ 19), was “fraudulently modified to remove the easement at paragraph 16 and
paragraph 12 regarding unrecorded interests,” (Complaint ¶ 20), and was a “forged
deed” (Complaint ¶ 23). Count I states that the Trustee Deed “was an altered
instrument and is a forgery,” and asks the Court to declare it “void.” Complaint
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¶¶ 24-25. Count II claims that “KPL knowingly and fraudulently offered the forged
Trustee’s Deed as a true and correct [sic] in court proceedings,” which “constitutes
the crime of uttering,” and seeks an injunction barring KPL “from uttering the
forged Trustee Deed[.]” Complaint ¶¶ 27-30. Count III asserts that KPL retains
physical possession of the property despite knowing that “the deed to it was forged
and is void,” and that Plaintiff is entitled to an order of ejectment based on KPL’s
“intentional and knowing trespass.” Complaint ¶¶ 33-34.
In order to succeed on any of these purported causes of action, Plaintiff
must establish fraudulent conduct with respect to the Trustee Deed. Regardless of
the label given by Plaintiff, the underlying factual allegations and relief sought relate
to Defendants’ purportedly intentional, fraudulent conduct. See Kearns v. Ford
Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009) (“Fraud can be averred by
specifically alleging fraud, or by alleging facts that necessarily constitute fraud
(even if the word ‘fraud’ is not used).”); State Farm Fire & Cas. Co. v. Metropolitan
Mgmt., 2007 WL 4157148, at *8 (D. Haw. Nov. 23, 2007) (“Hawaii courts do not
look merely at the label that a litigant places on his claim, but at the underlying facts
alleged in the pleadings.”).

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II.

Plaintiff’s Claims Are Barred By the Statute of Limitations
A.

Six-Year Statute of Limitations Applies
Plaintiff’s claims are subject to a six-year statute of limitations because

they sound in fraud. “Personal actions of any nature whatsoever not specifically
covered by the laws of the State” have a limitations period of six years.
HRS § 657-1(4). Claims sounding in fraud, whether based on state or federal law,
are governed by this six-year statute of limitations. Mroz v. Hoaloha Na Eha, Inc.,
360 F. Supp. 2d 1122, 1135 (D. Haw. 2005) (citing Eastman v. McGowan, 946 P.2d
1317, 1323 (Haw. 1997)); see also Au v. Au, 63 Haw. 210, 217, 626 P.2d 173, 179
(1981) (holding that “[s]ince fraudulent representations are not governed by a
specific limitations period, the general limitations period set forth in HRS § 657-1(4)
applies”); Trost v. Embernate, 2011WL 6101543, *3 (D. Haw. Dec. 7, 2011)
(“Accordingly, because Plaintiff's Complaint asserts a breach of fiduciary duty
claim based on fraud, the applicable statute of limitations is HRS § 657-1(4).”).
Plaintiff argues in opposition that Hawai‘i courts do not apply a statute
of limitations defense to a forged deed, and that constructive notice does not apply to
a forged deed recordation. In an apparent attempt to skirt the applicable statute of
limitations, Plaintiff styled his primary claim as one for declaratory relief, and
argues that “there is no statute of limitations over declaratory relief actions related to
13

regular system property based on a claim of a forged deed.” Pl.’s Mem. in Opp. to
KPL Motion at 3 (citing Palau v. Helemano Land Co., 22 Haw. 357, 361 (Haw. Terr.
1914)1). Plaintiff unsuccessfully argues that “a forged deed is not a common law
fraud” because forgery is a crime pursuant to HRS § 708-850. Pl.’s Mem. in Opp.
to Fidelity Motion at 8. The state criminal statute, however, does not provide for
any civil cause of action or civil penalties. As discussed previously, Plaintiff’s
artful pleading does not change the fact that his claims sound in fraud. See, e.g.,
Balog v. Center Art Gallery-Hawaii, Inc., 745 F. Supp. 1556, 1562 (D. Haw. 1990)
(“[P]laintiffs who wish to pursue damage claims for being sold counterfeit or forged
artwork must pursue their damages under the common law, general fraud provisions,
if any, or the Uniform Commercial Code as it has been enacted in that

1

Palau itself does not address whether a limitations period applies to forged deed claims.
Rather, it held that a plaintiff does not need to first bring a suit in equity seeking cancellation of a
deed before determining title to the land. Palau explains as follows:
Counsel for the complainant correctly contends that the title should be tried
at law, but he is mistaken in assuming that the complainant is unable to
proceed at law unless the deeds in question be first cancelled. The
complainant being out of possession is in position to, at any time, bring an
action of ejectment and therein litigate the title to the land, including the
question of the alleged forgery. A forged deed is void and passes no title.
The fact of forgery may be shown at law, in ejectment, as well as in equity,
in a suit for cancellation.
(citations omitted). That is, Palau addressed the availability of an action in equity or at law, and
did not speak to whether a limitations period is applicable.

14

jurisdiction.”); Scott D. Erler, D.D.S. Profit Sharing Plan v. Creative Finance &
Investments, L.L.C., 203 P.3d 744, 750 (Mont. 2009) (“A forgery is the ‘false
making or material alteration, with intent to defraud, of any writing which, if
genuine, might apparently be of legal efficacy or the foundation of legal liability.’”)
(quoting 23 Am. Jur. 2d. Deeds § 164 (2002)). Accordingly, the Court applies the
six-year statute of limitations in HRS § 657-1(4).
B.

Plaintiff’s Claim Accrued Outside the Limitations Period
The Court next turns to when the statute of limitations period on

Plaintiff’s fraud-based claims began to run. “Claims for fraud, whether based on
state or federal law, arise when the fraud is or should have been discovered.” Mroz,
360 F. Supp. 2d 1122, 1135 (citing First Interstate Bank v. Hartley, 681 F. Supp.
1457, 1460 (D. Haw. 1988)); see also Assoc. of Apartment Owners of Newtown
Meadows ex rel. its Bd. of Dirs. v. Venture 15, Inc., 115 Haw. 232, 270, 167 P.3d
225, 277 (2007) (Holding that under HRS § 657-7, “a claim accrues when the
plaintiff discovers, or through the use of reasonable diligence should have
discovered[,]” the cause of action.).
There is no dispute that the Trustee Deed was recorded in the Bureau of
Conveyances on August 28, 2002 as Document Number 2002-152285. See
Complaint ¶ 20. Defendants point to several cases from other jurisdictions holding
15

that public records serve as constructive notice for actions predicated on fraudulent
conduct when, as here, the public record itself constitutes evidence of the fraud.
For example, in Price v. Price, 2007 WL 2234585, at *7 (Wash. App. Aug. 6, 2007),
the court held that the party challenging a publicly recorded deed had constructive
notice of its contents. Price explained that:
When properly recorded, an instrument involving real property
provides notice to all the world of its contents. Accordingly,
when the facts upon which the fraud is predicated are contained
in a written instrument placed on the public record, there is
constructive notice of its contents, and the statute of limitation
begins to run as of the date of the recording of the instrument.
Id. (citations omitted).
Under Hawai‘i law, constructive notice “arise[s] as a legal inference,
where circumstances are such that a reasonably prudent person should make
inquiries, [and, therefore,] the law charges a person with notice of facts which
inquiry would have disclosed.” SGM Partnership v. Nelson, 5 Haw. App. 526, 529,
705 P.2d 49, 52 (1985) (citation omitted; brackets in original). Although Hawai‘i
courts have not addressed whether the recording of a deed serves as constructive
notice for purposes of a fraud claim, courts in the state have recognized that the
recording of a document gives notice to the general public of the conveyance. See
Markham v. Markham, 80 Hawai‘i, 274, 281, 909 P.2d 602, 609 (App. 1996) (noting

16

that the “central purpose of recording a conveyance of real property is to give notice
to the general public of the conveyance and to preserve the recorded instrument as
evidence”).
The Court agrees with the decisions of those courts holding that a
publicly recorded document, such as the Trustee Deed, provides constructive notice
where the document itself constitutes evidence of the fraud. See, e.g., Price, 2007
WL 2234585, at *7; Transamerica Ins. Co. v. Trout, 701 P.2d 851, 854 (Ariz. App.
1985) (“The statutory period may begin to run on the date of recording if the
recorded deed sets forth facts from which the aggrieved party should have realized it
had a cause of action. Thus, where a deed explicitly sets forth facts detailing the
entire consideration given for the property, creditors are deemed to have discovered
any inadequacy of consideration when the deed was recorded. Similarly, when the
deed, considered in the light of other facts known to the creditor, should have put
him on notice of fraud, the statute begins to run when the deed is recorded.”)
(citation omitted); Ayers v. Davidson, 285 F.2d 137, 139 (5th Cir. 1960) (holding
that the recording of a document “is notice to all the world, and that when the
instrument itself is the one upon which a suit to cancel for fraud is based, then the
statute begins to run from the date the instrument is filed for record”); see also
Hartley Pen Co. v. Lindy Pen Co., 16 F.R.D. 141, 158 (S.D. Cal. 1954) (“The
17

California statute of limitations applicable here provides a three-year period from
discovery of ‘the facts constituting the fraud. . . .’ Although intervener pleads
neither the date of discovery nor the circumstances surrounding discovery of the
alleged fraud, the facts of public record appear to have placed intervener on
constructive notice well more than three years prior to action taken.”) (citations
omitted).
Accordingly, Plaintiff is charged with constructive knowledge of the
contents of the Trustee Deed on the date it was recorded, August 28, 2002.
Plaintiff’s Complaint was not filed until April 26, 2013, more than six years after the
recording of the allegedly forged deed, and, therefore, Plaintiff’s claims sounding in
fraud are barred by the applicable statute of limitations.
C.

Plaintiff Fails to Establish Fraudulent Concealment
Plaintiff’s Complaint states that “[a]s a result of fraudulent

concealment by Fidelity and KPL, Mr. Hancock did not learn of the forged deed
until 2013.” Complaint ¶ 23. Plaintiff’s bare assertion, however, is insufficient to
survive the instant motions. Under HRS § 657-20, a statute of limitations may be
extended due to “fraudulent concealment” as follows:
If any person who is liable to any of the actions mentioned in this
part or section 663-3, fraudulently conceals the existence of the
cause of action or the identity of any person who is liable for the
18

claim from the knowledge of the person entitled to bring the
action, the action may be commenced at any time within six
years after the person who is entitled to bring the same discovers
or should have discovered, the existence of the cause of action or
the identity of the person who is liable for the claim, although the
action would otherwise be barred by the period of limitations.
HRS § 657-20.
Fraudulent concealment has been defined as “employment of
artifice, planned to prevent inquiry or escape investigation, and
mis[lead] or hinder acquirement of information disclosing a right
of action. The acts relied on must be of an affirmative character
and fraudulent.” Lemson v. General Motors Corp., 66 Mich.
App. 94, 97, 238 N.W.2d 414, 415 (1975). Fraudulent
concealment involves the actions taken by a liable party to
conceal a known cause of action.
Au, 63 Haw. at 215, 626 P.2d at 178 (some citations omitted). “The fraudulent
concealment which will postpone the operation of the statute must be the
concealment of the fact that plaintiff has a cause of action.” Id. at 215-16, 626 P.2d
at 178 (citation omitted).
Plaintiff does not set forth any facts to support a plausible allegation of
fraudulent concealment. He points to no conduct by either Defendant to conceal
anything, including the existence of Plaintiff’s current causes of action, and fails to
allege any acts by Defendants “to prevent him from suing in time[.]” Tanaka v.
First Hawaiian Bank, 104 F. Supp. 2d 1243, 1253 (D. Haw. 2000). Nor is it evident
how he can. On the contrary, the record shows that the allegedly forged Trustee
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Deed and its contents have been the subject of litigation between the parties to the
state court action since 2007. During the Grinpas trial, Plaintiff testified that the
recorded Trustee Deed did not convey the disputed easement, and that its omission
was a “mistake.” Fidelity Ex. J (7/13/09 Trial Tr.) at 49-50. At Plaintiff’s
deposition taken February 13, 2013, Plaintiff stated that he did not realize before he
signed the Trustee Deed that it did not reference the easement. In response to the
question, “When did you discover that there was no explicit mention of the Grinpas
easement [in the Trustee Deed]?” Plaintiff responded, “I think when this matter
came up in 2007.” Fidelity Ex. B (Hancock Dep. Tr.) at 58-60. Plaintiff’s claim
that Defendants fraudulently concealed the existence of his cause of action until
2013 is not consistent with his earlier statements that he knew the facts underlying
his cause of action in 2007.
Moreover, as set forth above, the alleged facts that Plaintiff contends
were concealed are evident on the face of the Trustee Deed recorded in 2002. See
Ayers, 285 F.2d at 139 (“[I]n short, when the deed contains the alleged fraudulent
conduct on its face and is then filed for record, there is no longer any concealment of
the fraud and the exception to the statute of limitations for concealed fraud does not
apply. The theory is that once the instrument is recorded the fraud is no longer
concealed.”).
20

In short, Plaintiff’s naked attempt to resurrect his time-barred claims by
alleging fraudulent concealment is unavailing. The Court GRANTS the KPL
Motion and Fidelity Motion because Plaintiff’s claims are time-barred and finds that
amendment would be futile.2
CONCLUSION
On the basis of the foregoing, the Court GRANTS Defendant Kulana
Partners, LLC’s Motion to Dismiss Complaint, filed on June 24, 2013, and
Defendant Fidelity National Title & Escrow of Hawaii Inc.’s Motion for Judgment

2

Although the Court bases its ruling on the statute of limitations, Plaintiff’s claims are also likely
barred by the Rooker-Feldman doctrine. Under the Rooker-Feldman doctrine (Rooker v. Fidelity
Trust Co., 263 U.S. 413 (1923), and District of Columbia Court of Appeals v. Feldman, 460 U.S.
462 (1983), collectively referred to as Rooker-Feldman), federal district courts are precluded from
reviewing state court judgments in “cases brought by state-court losers complaining of injuries
caused by state-court judgments rendered before the district court proceedings and inviting district
court review and rejection of those judgments.” Exxon Mobil Corp. v. Saudi Basic Indus. Corp.,
544 U.S. 280, 284 (2005). Although artfully styled to avoid mention of the state court orders in
Grinpas, Plaintiff appears to seek a de facto appeal of the state court decisions allowing the
“uttering” of the Trustee Deed and rejecting Plaintiff’s forgery theory. His present claims are
inextricably intertwined with the various state court judgments in Grinpas. See Cooper v. Ramos,
704 F.3d 772, 779 (9th Cir. 2012) (“Thus, we have found claims inextricably intertwined where
the relief requested in the federal action would effectively reverse the state court decision or void
its ruling.”) (citation and quotation marks omitted).
Even if Rooker-Feldman did not bar Plaintiff’s claims, res judicata would. Generally, the
doctrines of claim preclusion and issue preclusion prevent parties from relitigating claims or issues
that have already been decided by a competent tribunal. See, e.g., Santos v. State of Hawaii, 64
Haw. 648, 651-52, 646 P.2d 962, 965 (1982). Here, claims regarding the forged Trustee Deed
were either actually litigated in the Grinpas state court action, or could have been litigated in that
action. There is a final state court judgment, and the parties (Plaintiff and KPL) are the same in
both actions. See Hanson v. Palehua Community Ass’n, 2013 WL 1751504, at *7 (D. Haw. Apr.
23, 2013). Thus, Plaintiff’s claims against KPL would be barred for this independent reason.

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on the Pleadings, filed on September 6, 2013. The Court DENIES Plaintiff William
R. Hancock individually and as Trustee of Hancock and Company, Inc. Profit
Sharing Trust’s Counter-Motion for Summary Judgment and Preliminary
Injunction, filed on October 11, 2013. The Clerk of Court is directed to close this
case.
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAI‘I, January 10, 2014.

William R. Hancock v. Kulana Partners, LLC, et al.;
CIVIL No. 13-00198 DKW RLP; ORDER (1) GRANTING DEFENDANT
KULANA PARTNERS, LLC’S MOTION TO DISMISS COMPLAINT; (2)
GRANTING DEFENDANT FIDELITY NATIONAL TITLE & ESCROW OF
HAWAII INC.’S MOTION FOR JUDGMENT ON THE PLEADINGS; AND
(3) DENYING PLAINTIFF WILLIAM HANCOCK’S COUNTER-MOTION FOR
SUMMARY JUDGMENT AND PRELIMINARY INJUNCTION

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