Du Preez v. Banis et al

Filing 74

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS FIRST AMENDED COMPLAINT [DOC. 38 ] 42 Motion to Dismiss for Failure to State a Claim. Signed by JUDGE LESLIE E. KOBAYASHI on 01/30/2015. Defendants' Motion to Dismiss First Amended Complaint [Doc. 38], filed August 4, 2014, is HEREBY GRANTED IN PART AND DENIED IN PART. Defendants' Motion is GRANTED insofar as:- Count I is DISMISSED WITHOUT PREJUDICE as to Defendant R acquel Bridgewater;- the portion of Count III alleging a tort claim for bad faith is DISMISSED WITH PREJUDICE as to all Defendants;- the portion of Count III alleging a contract claim against Bridgewater for breach of the covenant of good fai th and fair dealing is DISMISSED WITHOUT PREJUDICE; and - Counts II, IV, V, and VI are DISMISSED WITHOUT PREJUDICE as to all Defendants.Defendants' Motion is DENIED in all other respects.Plaintiff has until March 2, 2015 to file her seco nd amended complaint, consistent with the terms described in this Order. (eps)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 HAWAII
RONI DU PREEZ,

)
)
Plaintiff,
)
)
vs.
)
)
RICK BANIS, DON CARANO, FRED )
SCARPELLO, JOHN MACKALL, ET
)
AL.,
)
)
Defendants.
)
_____________________________ )

CIVIL NO. 14-00171 LEK-RLP

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’
MOTION TO DISMISS FIRST AMENDED COMPLAINT [DOC. 38]
On August 4, 2014, Defendants Rick Banis, Don Carano,
Fred Scarpello, John Mackall, individually and as Trustees of the
Estate of William Pennington (“the Trustee Defendants”),
Kent Green, Racquel Bridgewater,1 WNP Enterprises, Inc., and
Western Equities, LLC (all collectively, “Defendants”) filed
their Motion to Dismiss First Amended Complaint [Doc. 38].
no. 42.]

[Dkt.

Pro se Plaintiff Roni Du Preez (“Plaintiff”) filed her

memorandum in opposition on October 9, 2014, and Defendants filed
their reply on October 20, 2014.

[Dkt. nos. 60, 64.]

also filed a surreply on October 27, 2014.

Plaintiff

[Dkt. no. 66.]

On

October 24, 2014, the Court issued an entering order (“EO”)
finding this matter suitable for disposition without a hearing

1

Plaintiff erroneously named Defendant Racquel Bridgewater
as Rachel Bridgewater. See First Amended Complaint at pg. 1;
Motion at 1.

pursuant to Rule LR7.2(d) of the Local Rules of Practice of the
United States District Court for the District of Hawai`i (“Local
Rules”).

[Dkt. no. 65.]

On November 26, 2014, this Court issued

an EO directing Defendants to file the trust documents relevant
to the Motion, and Defendants did so on December 10, 2014.
nos. 68, 73.]

[Dkt.

After careful consideration of the Motion,

supporting and opposing memoranda, and the relevant legal
authority, Defendants’ Motion is HEREBY GRANTED IN PART AND
DENIED IN PART for the reasons set forth below.
BACKGROUND
In January 2005, William Pennington hired Plaintiff to
be the “Manager/Housekeeper/Caretaker” of his residence located
at 4340 Melianani Drive in Wailea, Hawai`i (“the Pennington
Residence”).
38), at ¶ 6.2]

[First Amended Complaint, filed 7/21/14 (dkt. no.
The duties of the position included attending to

“Mr. Pennington and/or Mr. Pennington’s wife and/or guests and/or
entourage” when they were staying at the Pennington Residence, as
well as maintaining the residence and the Penningtons’ vehicles.
[Id. at ¶¶ 9, 11.]

Plaintiff acknowledges that: Mr. Pennington

was from Reno, Nevada; he was not a Hawai`i resident; and he used

2

Plaintiff filed her original Complaint in state court on
March 20, 2014. The Trustee Defendants and Western Equities, LLC
(“Western”) the only defendants named in the original Complaint,
removed the action April 11, 2014, based on diversity
jurisdiction. [Notice of Removal at pgs. 4-5.] Plaintiff timely
filed the First Amended Complaint pursuant to Fed. R. Civ. P.
15(a)(1)(B).
2

the Property as a vacation property.

[Id. at ¶¶ 6-7.]

However,

she alleges that Mr. Pennington and his wife “had the intention
to spend most of their time in Hawaii.”

[Id. at ¶ 7.]

Plaintiff alleges that, during her “hiring meeting,”
Mr. Pennington “made an express contractual offer to the
Plaintiff, of life time employment and compensation (along with
other benefits), until her death or voluntary decision to
retire.”

[Id. at ¶ 9.]

Mr. Pennington allegedly promised

Plaintiff that she would receive a monthly salary of $2,500 for
the rest of her life or “until her voluntary retirement.”
at ¶ 14.]

[Id.

Plaintiff believed this to mean that, if Mr.

Pennington died, “she would receive EITHER a lump sum equivalent
to her yearly income until retirement age of sixty five (65) OR
an annuity of $2,500 for her life or until retirement.”
¶ 19 (some emphases omitted).]

[Id. at

According to Plaintiff,

Mr. Pennington made “the specific promise: ‘stick with me and I
will take care of you for life.’”

[Id. at ¶ 18.]

In addition,

because Mr. Pennington’s wife was to inherit the Pennington
Residence after Mr. Pennington’s death, Plaintiff expected to
continue her employment at the residence after Mr. Pennington’s
death.

[Id. at ¶ 19.]
According to Plaintiff, Defendant Kent Green, who was

either Western’s chief executive officer (“CEO”) or chief
financial officer (“CFO”) at the time, was present at the hiring

3

meeting and took notes memorializing “the statements and
promises” that Mr. Pennington made to Plaintiff.

[Id. at ¶ 9.]

She asserts that she accepted the terms Mr. Pennington promised
by shaking his hand, and the hands of the other persons present.
She alleges that the promises he made were also made “by
extension” by “those present representing the Pennington
corporate interests.”

[Id. at ¶ 18.]

Plaintiff alleges that, during her employment at the
Pennington Residence, Mr. Pennington reaffirmed his promises to
her with statements like, “don’t do anything to get fired and I
will take care of you for life” and “don’t worry, you are taken
care of.”

[Id. at ¶ 20.]

Plaintiff alleges that there were at

least five other employees to whom Mr. Pennington made similar
promises, two of whom continue to be employed by the Trustee
Defendants.

[Id. at ¶ 21.]

Mr. Pennington died on May 15, 2011.

[Id. at ¶ 23.]

The Pennington Residence was sold in March 2012, and Defendants
terminated Plaintiff’s employment at some point thereafter.
Plaintiff states that Defendants did not provide her with a
severance package and they refused, without cause, to provide her
with an employment reference.

[Id. at ¶ 25.]

Plaintiff alleges

that, as a result of Defendants’ actions, she has been unable to
secure other employment, has been unable to collect unemployment
benefits, and suffered emotional distress.

4

[Id.]

The First Amended Complaint alleges the following
claims against all Defendants: breach of implied-in-fact contract
(“Count I”); wrongful termination in violation of public policy
(“Count II”); breach of the covenant of good faith and fair
dealing (“Count III”); interference with prospective economic
advantage (“Count IV”); “promissory fraud” (“Count V”); and
promissory estoppel (“Count VI”).

Plaintiff prays for:

compensatory and/or consequential damages; specific performance
of payment of the income and benefits she would have received
until age sixty-five and the pension that she would have received
upon retirement; $250,000 in damages for emotional distress;
$5,625,500 in punitive or exemplary damages; attorneys’ fees and
costs; interest; and any other appropriate relief.
In the instant Motion, Defendants urge this Court to
dismiss all of Plaintiff’s claims with prejudice pursuant to Fed.
Civ. P. 12(b)(6).

In the alternative, Defendants argue that this

Court should grant summary judgment in their favor as to all
claims.
DISCUSSION
I.

Choice of Law
This Court must first address Defendants’ argument that

Nevada law applies to Plaintiff’s claims.
This Court has ruled that, at the time of removal,
there was diversity jurisdiction over the instant case.

5

[Order

Denying Pltf.’s Motion to Remand and Pltf.’s Motion to Strike
Defs.’ Opp. to Remand, filed 6/25/14 (dkt. no. 28) (“6/25/14
Order”), at 10.3]

“A federal court sitting in diversity must

apply the forum state’s choice of law rules.”
Cassiday, 320 F.3d 906, 913 (9th Cir. 2003).

Jorgensen v.
The Hawai`i Supreme

Court
has “moved away from the traditional and rigid
conflict-of-laws rules in favor of the modern
trend towards a more flexible approach looking to
the state with the most significant relationship
to the parties and subject matter.” Lewis v.
Lewis, 69 Haw. 497, 499, 748 P.2d 1362, 1365
(1988) (citing Peters [v. Peters], [63 Haw. 653,
660, 634 P.2d 586, 591 (1981)]). This flexible
approach places “[p]rimary emphasis . . . on
deciding which state would have the strongest
interest in seeing its laws applied to the
particular case.” Id. Hence, this court has said
that the interests of the states and applicable
public policy reasons should determine whether
Hawai`i law or another state’s law should apply.
See Peters, 63 Haw. at 667–68, 634 P.2d at 595.
“The preferred analysis, [then] in our opinion,
would be an assessment of the interests and policy
factors involved with a purpose of arriving at a
desirable result in each situation.” Id. at 664,
634 P.2d at 593.
Mikelson v. United Servs. Auto. Ass’n, 107 Hawai`i 192, 198, 111
P.3d 601, 607 (2005) (some alterations in Mikelson).

Defendants

argue that Nevada law applies because it “has the most
significant relationship to the parties and subject matter here.”
[Mem. in Supp. of Motion at 10.]

3

The 6/25/14 Order is also available at 2014 WL 2895467.
6

A.

Choice-of-Law Provision
In addition, as part of the choice of law analysis,

this Court will consider any choice-of-law provisions in the
relevant trust documents.

Hawai`i courts have recognized that,

as a general rule, “a settlor’s choice of law regarding trust
administration is enforceable.”

In re Thomas H. Gentry Revocable

Trust, Nos. 29727, 29728, 2013 WL 376083, at *9 & n.8 (Hawai`i
Ct. App. Jan. 31, 2013) (citations omitted).

Defendants have

submitted the February 24, 2005 Restatement of “The William N.
Pennington Separate Property Trust” (“Pennington Trust
Restatement”), and the “Will of William N. Pennington,” dated
February 24, 2005 (“Pennington Will”).

[Defs.’ Submission of

Trust Documents in Supp. of Motion, Decl. of David J. Morandi,
Exhs. B, C.]

The Pennington Will gives Mr. Pennington’s entire

estate to the Pennington Trust.

[Pennington Will at 2.]

Defendants acknowledge that “[r]eferences to applicable
state law in the [Pennington Trust Restatement] appear only in
Article 11.”

[Defs.’ Submission of Trust Documents at 2.]

Article 11, titled Powers of Trustees, states:
To carry out the purposes of any trust
created under this instrument, the Trustees are
vested with the following powers with respect to
the trust estate and any part of it. The Trustees
shall also enjoy all other powers now or hereafter
conferred by law including, without limitation,
all powers set forth in the trust and probate laws
of the State of Nevada. All of the Trustees’
powers are exercisable only in a fiduciary
capacity.
7

[Pennington Trust Restatement at 9.]

This Court finds that

Article 11 only designates Nevada law as the applicable law for
the determination of the Trustees’ powers; it does not designate
Nevada law as the law applicable to claims against the Trust.
This Court therefore concludes that there is no choice-of-law
provision that applies to Plaintiff’s claims.

This Court will

determine which state’s law applies based on the “most
significant relationship” analysis.
B.

Most Significant Relationship
Hawai`i and Nevada each has a significant relationship

to the parties.

Plaintiff is a Hawai`i resident.

Complaint at ¶ 1.]

[First Amended

The Pennington Trust “is domiciled in the

State of Nevada and the Trust estate is being administered in the
State of Nevada.”

[Motion, Decl. of Andrew A. Lautenbach, Exh. A

(Decl. of David J. Morandi) at ¶ 3.4]

Plaintiff acknowledges

that: the Trustee Defendants’ “principal place of business for
meeting and conducting the affairs of Mr. Pennington’s estate” is
Reno, Nevada; and Western “is a Nevada corporation with its head
office located in Reno, Nevada.”

[First Amended Complaint at

¶¶ 2-3.]

4

The Trustee Defendants and Western originally filed
Mr. Morandi’s declaration with their motion to dismiss the
original Complaint, which they filed on April 17, 2014. [Dkt.
no. 5.] On July 24, 2014, this Court issued an EO deeming that
motion moot in light of the filing of Plaintiff’s First Amended
Complaint. [Dkt. no. 40.]
8

Defendants argue that “Nevada trust law also has the
most significant relationship to the subject matter here, which
is [the] administration of a Nevada trust.”
Motion at 10.]

This Court disagrees.

[Mem. in Supp. of

The instant case arises

from Plaintiff’s employment at the Pennington Residence.
Plaintiff alleges that she entered into an agreement with Mr.
Pennington, and others, regarding her employment.

The alleged

agreement was formed in Hawai`i, and Plaintiff’s employment
apparently occurred exclusively in Hawai`i.

The fact that

Plaintiff seeks damages from, inter alia, a trust is incidental.
Thus, although this Court agrees with Defendants that Nevada has
a significant interest in “efficient and timely adjudication of
claims against trusts,” [Mem. in Supp. of Motion at 12,] Hawai`i
has a significant interest in protecting the rights of employees
in Hawai`i and enforcing contracts formed in Hawai`i.

Insofar as

the crux of the action involves employment and contract issues,
this Court finds that Hawai`i has the most significant
relationship with the subject matter of this case.

This Court

therefore CONCLUDES that Hawai`i law applies.
II.

Whether the Motion Must Be Converted
into A Motion for Summary Judgment
Defendants’ Motion seeks dismissal of this action or,

in the alternative, summary judgment.

As a general rule, when a

district court considers a motion to dismiss, its review is
limited to the allegations in the complaint.
9

Daniels-Hall v.

Nat’l Educ. Ass’n, 629 F.3d 992, 998 (9th Cir. 2010).

“[A] court

may consider evidence on which the complaint necessarily relies
if: (1) the complaint refers to the document; (2) the document is
central to the plaintiff’s claim; and (3) no party questions the
authenticity of the copy attached to the 12(b)(6) motion.”
(citations and internal quotation marks omitted).

Id.

If the

district court considers exhibits that do not meet these
requirements, it must convert the motion to dismiss into a motion
for summary judgment.

Yamalov v. Bank of Am. Corp., CV. No.

10–00590 DAE–BMK, 2011 WL 1875901, at *7 n.7 (D. Hawai`i May 16,
2011) (citing Parrino v. FHP, Inc., 146 F.3d 699, 706 n.4 (9th
Cir. 1998)).5
In ruling on the choice-of-law issue, this Court
considered the Pennington Trust Restatement and the Pennington
Will.

This Court finds that those documents can be considered

without converting the Motion into a Motion for Summary Judgment.
Plaintiff has sued Banis, Carano, Scarpello, and Mackall in their
capacities as “the representatives/executors/trustees of William
Pennington/the Estate of William Pennington.”
Complaint at ¶ 2.]

[First Amended

She also alleges that: they, “as Trustees of

the Pennington Trust exercised complete control of
Mr. Pennington’s estate[;]” and she expected that, after

5

Parrino was superseded by statute on other grounds, as
stated in Abrego Abrego v. The Dow Chemical Co., 443 F.3d 676,
681-82 (9th Cir. 2006) (per curiam).
10

Mr. Pennington’s death, they “would carry out and honor
Mr. Pennington’s contractual obligations/promises.”
¶¶ 22, 24 (emphasis omitted).]

[Id. at

Further, Plaintiff alleges that,

because the Trustee Defendants will earn a percentage of
Mr. Pennington’s estate, they had an incentive to increase their
shares by selling his assets and terminating his staff, including
Plaintiff.

[Id. at ¶ 27.]

This Court therefore finds that the

First Amended Complaint refers to, and relies upon, the
Pennington Trust Restatement and the Pennington Will.

Further,

Plaintiff has not contested the authenticity of the copies of
those documents that Defendants submitted.
This Court also cited to David Morandi’s declaration
for the fact that the Pennington Trust is domiciled in, and is
being administered in, Nevada.

Although the declaration is not

the type of document described in Daniels-Hall, the citation to
the declaration does not require conversion of the Motion to a
motion for summary judgment because similar information is
available in the trust documents.

For example, the cover sheet

of the Pennington Will states that it was filed in the Second
Judicial District Court of the State of Nevada.
This Court therefore DECLINES to convert the instant
Motion into a motion for summary judgment.

This Court will rule

upon Defendants’ arguments based on the standards applicable to a
motion to dismiss.

11

III. Limitations Period for Claims Against the Estate
Defendants argue that Plaintiff’s claims are barred
because she failed to bring them within ninety days after
publication of notice to trust creditors.
Nev. Rev. Stat. § 164.025(3)).]

[Id. at 14 (citing

This Court will address

Defendants’ argument based upon the corresponding statute in
Hawaii’s Uniform Probate Code.

Haw. Rev. Stat. § 560:3-803

states, in pertinent part:
(a) All claims against either a decedent or a
decedent’s estate which arose before the death of
the decedent, including claims of the State and
any subdivision thereof, whether due or to become
due, absolute or contingent, liquidated or
unliquidated, founded on contract, tort, or other
legal basis, if not barred earlier by another
statute of limitations or non-claim statute, are
barred against the estate, the personal
representative, the decedent’s trustee and the
heirs and devisees of the decedent, unless
presented within the earlier of the following:
. . . .
(2) Within eighteen months after the
decedent’s death, if notice to creditors has
not been published as provided in section
560:3-801(a) or delivered as provided in
section 560:3-801(b).
. . . .
(c) All claims against a decedent’s estate which
arise at or after the death of the decedent,
including claims of the State and any subdivision
thereof, whether due or to become due, absolute or
contingent, liquidated or unliquidated, founded on
contract, tort, or other legal basis, are barred
against the estate, the personal representative,
the decedent’s trustee, and the heirs and devisees
of the decedent, unless presented as follows:
12

(1) A claim based on a contract with the
personal representative or trustee, within
four months after performance by the personal
representative or trustee is due; or
(2) Any other claim, within the later of four
months after it arises, or the time specified
in subsection (a)(2).
Plaintiff’s claim against Mr. Pennington’s estate did not arise
until after his death because it was not until approximately ten
months after his death that she was terminated without the
benefits that she was allegedly promised.

Thus, pursuant to

§ 560:3-803(c)(2), she was required to present her claim within
the latter of four months after it arose or within eighteen
months after Mr. Pennington’s death, if proper notice was not
provided.
Mr. Pennington died on May 15, 2011.
Complaint at ¶ 23.]

[First Amended

Plaintiff’s employment was terminated some

time after the Pennington Residence was sold in March 2012.
at ¶ 25.]

[Id.

Plaintiff alleges that:
On or around May 1, 2012 Plaintiff formally
reminded [the Trustee] Defendants of
Mr. Pennington’s implied-in-fact employment
contract and promise . . . . On or around
June 26, 2012, Plaintiff made a demand on [the
Trustee] Defendants for redress and to compensate
the Plaintiff according to that contract in
accordance with Mr. Pennington’s wishes and
expectations.

[Id. at ¶ 30.]

For purposes of the instant Motion, this Court

accepts these factual allegations as true.

See Ashcroft v.

Iqbal, 556 U.S. 662, 678 (2009) (“for the purposes of a motion to
13

dismiss we must take all of the factual allegations in the
complaint as true” (citing Bell Atl. Corp. v. Twombly, 550 U.S.
554, 555, 127 S. Ct. 1955 (2007)).

Further, this Court must

construe the First Amended Complaint liberally because Plaintiff
is proceeding pro se.

See Allen v. Gold Country Casino, 464 F.3d

1044, 1048 (9th Cir. 2006) (stating that the pro se plaintiff’s
pleadings “must be liberally construed” (citation omitted)).
Although it is a close question, this Court finds that
Plaintiff’s allegations are sufficient to raise a plausible
argument that she timely presented her claims against the Trustee
Defendants.

Cf. Iqbal, 556 U.S. at 678 (“To 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.’” (quoting Bell Atlantic Corp. v. Twombly, 550 U.S.
554, 570, 127 S. Ct. 1955 (2007)).

The issue of whether

Plaintiff properly presented her claims against Mr. Pennington’s
estate to the Trustee Defendants involves a factual inquiry that
is not appropriate in the context of a motion to dismiss.

This

Court therefore DENIES Defendants’ Motion as to their argument
that Plaintiff failed to present her claims against
Mr. Pennington’s estate in a timely manner.
IV.

Whether Plaintiff has Stated Plausible Claims
Defendants also argue that, even if Plaintiff’s claims

against the estate are not time barred, they fail to state a

14

claim upon which relief can be granted.

See Fed. R. Civ. P.

12(b)(6).
A.

Count I - Breach of Contract
Defendants argue that Count I, Plaintiff’s breach of

implied-in-fact contract claim, is barred by the Statute of
Frauds, Haw. Rev. Stat. § 656-1(7).

Section 656-1 states, in

pertinent part:
No action shall be brought and maintained in any
of the following cases:
. . .
(7) To charge the estate of any deceased
person upon any agreement which by its terms
is not to be performed during the lifetime of
the promisor . . .
. . .
unless the promise, contract, or agreement, upon
which the action is brought, or some memorandum or
note thereof, is in writing, and is signed by the
party to be charged therewith, or by some person
thereunto by the party in writing lawfully
authorized. . . .
First, this Court notes that, in addition to the
Trustee Defendants, Plaintiff alleges all of her claims against
Green, Bridgewater, WNP Enterprises, Inc. (“WNP”),6 and Western.
In particular, Plaintiff’s First Amended Complaint alleges that

6

WNP appears to refer to William N. Pennington Enterprises.
See First Amended Complaint, Exh. 6 (facsimile transmittal sheet
on “William N. Pennington Enterprises” letterhead).
15

Western and WNP were also her employers.7

[First Amended

Complaint at ¶ 3 (alleging that: Plaintiff received her paychecks
from Western and WNP; the Pennington Residence was owned by
Western; and there is “a unity of interest and ownership” in her
employer and her indirect employer), ¶ 9 (alleging that Green, in
his capacity as Western’s CEO or CFO, was present at her hiring
meeting), ¶ 18 (alleging that the promises that Mr. Pennington
made were also made on behalf of his corporate interests that
were represented at the meeting).]

Defendants’ argument

regarding § 656-1(7) does not apply to Plaintiff’s breach of
contract claim against Green, WNP, and Western.
Further, Hawai`i courts recognize that:
a trial court may relieve a party, who has relied
on an oral agreement, of the “hardships of the
Statute of Frauds” under certain circumstances:
(1) A promise which the promisor should
reasonably expect to induce action or
forbearance on the part of the promisee or a
third person and which does induce the action
or forbearance is enforceable notwithstanding
the Statute of Frauds if injustice can be
avoided only by enforcement of the promise.
The remedy granted for breach is to be
limited as justice requires.
(2) In determining whether injustice can be

7

This Court does not construe Plaintiff’s First Amended
Complaint as alleging that Mr. Pennington was her employer, but
that this Court should pierce the corporate veil to hold Western
and WNP liable for his obligations. This Court therefore will
not address Defendants’ argument that Plaintiff has not pled
sufficient allegations “to pursue a claim of alter ego or veil
piercing.” [Mem. in Supp. of Motion at 28.]
16

avoided only by enforcement of the promise,
the following circumstances are significant:
(a) the availability and adequacy of other
remedies, particularly cancellation and
restitution; (b) the definite and substantial
character of the action or forbearance in
relation to the remedy sought; (c) the extent
to which the action or forbearance
corroborates evidence of the making and terms
of the promise, or the making and terms are
otherwise established by clear and convincing
evidence; (d) the reasonableness of the
action or forbearance; (e) the extent to
which the action or forbearance was
forseeable [sic] by the promisor.
Mcintosh v. Murphy, 52 Haw. 29, 36, 469 P.2d 177,
181 (1970).
Morioka v. Lee, No. CAAP–13–0001761, 2014 WL 4251236, at *11-12
(Hawai`i Ct. App. Aug. 27, 2014).

This Court finds that the

factual allegations in the First Amended Complaint are sufficient
to support a plausible argument that this Court should grant
Plaintiff relief from the operation of the Statute of Frauds.
This Court therefore DENIES Defendants’ Motion as to their
argument that Count I is barred by the Statute of Frauds.
B.

Count II - Parnar Claim
Count II apparently alleges a claim pursuant to Parnar

v. Americana Hotels, Inc., 65 Haw. 370, 652 P.2d 625 (1982),
which established a “public policy exception” to the at-will
employment doctrine.

This Court has stated that, in Parnar,

the Hawai`i Supreme Court adopted a common law
tort, whereby an individual may bring a claim
against an employer if her discharge directly
violates clear public policy. The court
explained,
17

Because the courts are a proper forum for
modification of the judicially created
at-will doctrine, it is appropriate that we
correct inequities resulting from harsh
application of the doctrine by recognizing
its inapplicability in a narrow class of
cases. The public policy exception discussed
herein represents wise and progressive social
policy which both addresses the need for
greater job security and preserves to the
employer sufficient latitude to maintain
profitable and efficient business operations.
We therefore hold that an employer may be
held liable in tort where his discharge of an
employee violates a clear mandate of public
policy. In determining whether a clear
mandate of public policy is violated, courts
should inquire whether the employer’s conduct
contravenes the letter or purpose of a
constitutional, statutory, or regulatory
provision or scheme. Prior judicial
decisions may also establish the relevant
public policy. However, courts should
proceed cautiously if called upon to declare
public policy absent some prior legislative
or judicial expression on the subject. Of
course, the plaintiff alleging a retaliatory
discharge bears the burden of proving that
the discharge violates a clear mandate of
public policy.
[Parnar, 65 Haw.] at 379–80, 652 P.2d at 631
(footnotes omitted). “Parnar claims can only be
maintained in a ‘narrow class of cases’ where the
judicially created wrongful discharge action is
needed to effectuate the public policy at stake.”
Cambron v. Starwood Vacation Ownership, Inc., 945
F. Supp. 2d 1133, 1141–42 (D. Hawai`i 2013)
(citing Ross v. Stouffer Hotel Co., 76 Hawai`i
454, 879 P.2d 1037, 1047 (1994)).
Ritchie v. Hawai`i, Civil No. 14–00046 LEK–BMK, 2014 WL 4905336,
at *9-10 (D. Hawai`i Sept. 30, 2014).
The only public policy allegations in Count II are:
“[t]here is a public interest in maintaining the proper balance
18

between the employer’s interest in running its business as it
sees fit and the employee’s interest in retaining employment[;]”
and Defendants terminated Plaintiff’s employment because it was
against their “own best interests to continue to pay Plaintiff in
accordance with the employment contact,” and this violated public
policy.

[First Amended Complaint at ¶¶ 36-37.]

Plaintiff’s

allegations do not rise to the level of “a clear mandate of
public policy,” which Defendants violated when they terminated
her.

This Court therefore concludes that Count II, Plaintiff’s

Parnar claim, “fails to state a claim upon which relief can be
granted[.]”

See Fed. R. Civ. P. 12(b)(6).

The Ninth Circuit has recognized that, “[u]nless it is
absolutely clear that no amendment can cure the defect . . . a
pro se litigant is entitled to notice of the complaint’s
deficiencies and an opportunity to amend prior to dismissal of
the action.”

Lucas v. Dep’t of Corr., 66 F.3d 245, 248 (9th

Cir.1995) (citations omitted).

This Court finds that it is

arguably possible for Plaintiff to cure the defect in this claim
by amendment.

This Court GRANTS Defendants’ Motion insofar as

Count II is DISMISSED WITHOUT PREJUDICE.
C.

Count III - Breach of the Covenant
of Good Faith and Fair Dealing
Defendants argue that Count III fails because there is

no enforceable contract, and there is no independent tort claim
or contract claim for breach of the covenant of good faith and
19

fair dealing.
Under Hawai`i law, “every contract contains an implied
covenant of good faith and fair dealing that neither party will
do anything that will deprive the other of the benefits of the
agreement.”

Best Place, Inc. v. Penn Am. Ins. Co., 82 Hawai`i

120, 123-24, 920 P.2d 334, 337-38 (1996) (citations omitted).
This district court has noted that the tort of bad faith breach
of the covenant of good faith and fair dealing “has not been
recognized in Hawai`i outside of the insurance context.”
Sunday’s Child, LLC v. Irongate Azrep BW LLC, Civil No. 13–00502
DKW–RLP, 2014 WL 688582, at *5 n.5 (D. Hawai`i Feb. 4, 2014)
(some citations omitted) (citing Jou v. Nat’l Interstate Ins. Co.
of Haw., 114 Hawai`i 122, 129, 157 P.3d 561, 568 (App. 2007)).
Count III is therefore DISMISSED to the extent that it attempts
to allege a tort claim.

The dismissal is WITH PREJUDICE because

this Court finds that it is not possible for Plaintiff to cure
the defects in the tort claim by amendment.
This Court, however, finds that the allegations of the
First Amended Complaint as a whole are sufficient to state a
plausible breach of contract claim based on the alleged breach of
the covenant of good faith and fair dealing.

This Court

therefore DENIES Defendants’ Motion as to the breach of contract
claim in Count III.

20

D.

Count IV - Interference with Economic Advantage
Count IV merely recites the elements of a claim for

interference with prospective economic advantage and repeats the
same factual allegations as those supporting Plaintiff’s breach
of contract claim.

First, a plaintiff’s claim will not survive a

motion to dismiss if it merely “recite[s] the formulaic elements
of a cause of action.”

E.E.O.C. v. Global Horizons, Inc., 904 F.

Supp. 2d 1074, 1083 (D. Hawai`i 2012) (some citations omitted)
(citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556–57, 127 S.
Ct. 1955 (2007)).
Second, Plaintiff cannot rely solely upon the alleged
breach of contract to support Count IV.

This district court has

explained that,
if a court were to conclude that a breach of
contract could satisfy the improper interference
element of the tort of tortious interference with
a prospective business advantage under Hawai`i
law, it would be tantamount to resurrecting the
tort of tortious breach of contract, albeit it in
certain limited circumstances. Given that the
Francis [v. Lee Enterprises, 89 Hawai`i 234, 971
P.2d 707 (1999),] court abolished the tort of
tortious breach of contract, the Court predicts
that, if presented with the question, the Hawai`i
Supreme Court would hold that a breach of
contract, even if done for improper purposes, does
not without more give rise to improper
interference for purposes of a tortious
interference with a prospective business advantage
claim. See Burlington Ins. Co. v. Oceanic Design
& Constr., Inc., 383 F.3d 940, 944 (9th Cir. 2004)
(“To the extent [a] case raises issues of first
impression [under Hawai`i law], [a] court, sitting
in diversity, ‘must use its best judgment to
predict how the Hawaii Supreme Court would decide
21

[the] issue.’” (quoting Helfand v. Gerson, 105
F.3d 530, 537 (9th Cir. 1997))). . . .
Kapunakea Partners v. Equilon Enters. LLC, 679 F. Supp. 2d 1203,
1219 (D. Hawai`i 2009) (some alterations in Kapunakea Partners)
(emphasis added).

Insofar as Count IV does not allege any facts

beyond the alleged breach of contract, this Court finds that
Count IV fails to state a claim that is plausible on its face.
See Iqbal, 556 U.S. at 678 (“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.” (citation omitted)).
This Court, however, finds that it is arguably possible
for Plaintiff to cure the defects in Count IV by amendment.
Defendants’ Motion is therefore GRANTED as to Count IV, insofar
as Count IV is DISMISSED WITHOUT PREJUDICE.
E.

Count V - Promissory Fraud
Although Plaintiff titled Count V “Promissory Fraud,”

she appears to be alleging fraudulent misrepresentation.

See,

e.g., First Amended Complaint at ¶ 50 (“a promise to do something
necessarily implies the intention to perform; hence, where a
promise is made without such intention, there is an implied
misrepresentation of fact that may be actionable fraud”).
First, the Court notes that this district court has
stated:

22

Under Hawai`i law, the elements of a
fraudulent or intentional misrepresentation claim
are: “(1) false representations made by the
defendant; (2) with knowledge of their falsity (or
without knowledge of their truth or falsity);
(3) in contemplation of plaintiff’s reliance upon
them; and (4) plaintiffs detrimental reliance.”
Miyashiro v. Roehrig, Roehrig, Wilson & Hara, 122
Hawai`i 461, 482–483, 228 P.3d 341, 362–63 (Ct.
App. 2010) (citing Hawaii’s Thousand Friends v.
Anderson, 70 Haw. 276, 286, 768 P.2d 1293, 1301
(1989)). In order to support a finding of fraud,
the plaintiff must establish these elements by
clear and convincing evidence. See, e.g.,
Hawaii’s Thousand Friends, 70 Haw. at 286, 768
P.2d at 1301 (citation omitted). Further,
the false representation forming the basis of
a fraud claim “must relate to a past or
existing material fact and not the occurrence
of a future event.” Joy A. McElroy, M.D.,
Inc. v. Maryl Group, Inc., 107 Hawai`i 423,
433, 114 P.3d 929, 939 (Ct. App. 2005)
(citations and block quote format omitted)
(emphasis in original). Further, even if the
allegations satisfy the other elements of a
fraud claim, “[f]raud cannot be predicated on
statements which are promissory in their
nature, or constitute expressions of
intention, and an actionable representation
cannot consist of mere broken promises,
unfulfilled predictions or expectations, or
erroneous conjectures as to future events[.]”
Id. (citations and block quote format
omitted) (emphasis in original). The
exception to this general rule is that “[a]
promise relating to future action or conduct
will be actionable, however, if the promise
was made without the present intent to
fulfill the promise.” Id. (citations and
block quote format omitted) (emphasis in
McElroy).
Molina v. OneWest Bank, FSH, 903 F. Supp. 2d 1008, 1019-20 (D.
Hawai`i 2012) (alterations in Molina) (some citations omitted).
Thus, Plaintiff can allege a fraud claim based on representations
23

that a defendant made about future actions where there defendant
allegedly had no intention of fulfilling the promise.
In addition, this Court must review Count V under the
following standard to determine whether Plaintiff has
sufficiently pled a fraud claim:
[Fed. R. Civ. P.] 9(b) requires that, “[i]n
alleging fraud or mistake, a party must state with
particularity the circumstances constituting fraud
or mistake.” Pursuant to Rule 9(b), a party is
required to make particularized allegations of the
circumstances constituting fraud. See Sanford v.
MemberWorks, Inc., 625 F.3d 550, 557–58 (9th Cir.
2010).
In their pleadings, Plaintiffs “must allege
the time, place, and content of the fraudulent
representation; conclusory allegations do not
suffice.” See Shroyer v. New Cingular Wireless
Servs., Inc., 622 F.3d 1035, 1042 (9th Cir. 2010)
(citation omitted). “Malice, intent, knowledge,
and other conditions of a person’s mind may be
alleged generally.” Fed. R. Civ. P. 9(b); see
also Odom v. Microsoft Corp., 486 F.3d 541, 554
(9th Cir. 2007) (en banc) (“[T]he state of mind—or
scienter—of the defendants may be alleged
generally.” (citation omitted)); Walling v.
Beverly Enters., 476 F.2d 393, 397 (9th Cir. 1973)
(stating that Rule 9(b) “only requires the
identification of the circumstances constituting
fraud so that the defendant can prepare an
adequate answer from the allegations” (citations
omitted)).
When there are multiple defendants,
Rule 9(b) does not allow a complaint to
merely lump multiple defendants together but
require[s] plaintiffs to differentiate their
allegations when suing more than one
defendant . . . and inform each defendant
separately of the allegations surrounding his
alleged participation in the fraud. In the
context of a fraud suit involving multiple
24

defendants, a plaintiff must, at a minimum,
identif[y] the role of [each] defendant[] in
the alleged fraudulent scheme.
Swartz v. KPMG LLP, 476 F.3d 756, 764–65 (9th Cir.
2007) (alterations in Swartz) (internal quotation
marks and citations omitted); see also Meridian
Project Sys., Inc. v. Hardin Constr. Co., 404 F.
Supp. 2d 1214, 1226 (E.D. Cal. 2005) (“When fraud
claims involve multiple defendants, the complaint
must satisfy Rule 9(b) particularity requirements
for each defendant.” (citations omitted)).
Barker v. Gottlieb, 23 F. Supp. 3d 1152, 1164-65 (D. Hawai`i
2014) (alterations in Barker) (some citations omitted).
Plaintiff has not pled her fraud claim with sufficient
particularity to meet these standards.

Plaintiff has not

identified the specific fraudulent misrepresentations that her
claim is based upon, who made them, and the time and place where
they were made.

Further, as to each defendant named in the fraud

claim, Plaintiff must at least identify that defendant’s role in
the alleged fraud.
This Court therefore concludes that Count V fails to
state a claim upon which relief can be granted.

This Court,

however, finds that it is arguably possible for Plaintiff to cure
the defects in Count V by amendment.

Defendants’ Motion is

GRANTED, insofar as Count V is DISMISSED WITHOUT PREJUDICE.
F.

Count VI - Promissory Estoppel
The Hawai`i Supreme Court has stated:
Generally, a claim for promissory estoppel
may arise as an application of the general
principle of equitable estoppel to certain
25

situations where a promise has been made,
even though without consideration, if it was
intended that the promise be relied upon and
was in fact relied upon, and a refusal to
enforce it would be virtually to sanction the
perpetration of fraud or result in other
injustice.
In re Herrick, 82 Hawai`i 329, 337, 922 P.2d 942,
950 (1996) (quotation omitted). . . . [T]he four
elements of promissory estoppel are:
(1) There must be a promise;
(2) The promisor must, at the time he or she
made the promise, foresee that the promisee
would rely upon the promise (foreseeability);
(3) The promisee does in fact rely upon the
promisor’s promise; and
(4) Enforcement of the promise is necessary
to avoid injustice.
In re Herrick, 82 Hawai`i at 337-38, 922 P.2d at
950-51 (quoting 4 R. Lord, A Treatise on the Law
of Contracts by Samuel Williston § 8:5, at 85-95
(4th ed. 1992)). The “essence” of promissory
estoppel is “detrimental reliance on a promise.”
Ravelo [by Ravelo v. Cnty. of Hawaii], 66 Haw.
[194,] 199, 658 P.2d [883,] 887 [(1983)].
Gonsalves v. Nissan Motor Corp. in Hawaii, Ltd., 100 Hawai`i 149,
164-65, 58 P.3d 1196, 1211-12 (2002) (footnote omitted).
“[A] ‘promise’ for purposes of promissory estoppel [is]
a manifestation of intention to act or refrain from acting in a
specified way, so made as to justify a promisee in understanding
that a commitment has been made.”

Id. at 165, 58 P.3d at 1212

(citations and internal quotation marks omitted).

The First

Amended Complaint does not contain sufficient allegations of

26

either a promise by Defendants or how Plaintiff detrimentally
relied on that promise.

This Court therefore concludes that

Plaintiff has failed to allege a plausible promissory estoppel
claim.

This Court, however, finds that it is arguably possible

for Plaintiff to cure the defects in Count VI by amendment.
Defendants’ Motion is GRANTED as to Count VI, insofar as Count VI
is DISMISSED WITHOUT PREJUDICE.
G.

Defendant Bridgewater
Although Count I and the portion of Count III alleging

a contract claim survive Defendants’ Motion, this Court finds
that the allegations in the First Amended Complaint are
insufficient to state a claim against Bridgewater.

Bridgewater’s

only role in the relevant events appears to be that she sent
Plaintiff a background check form that the Trustee Defendants
wanted all employees to fill out.

See First Amended Complaint at

¶ 22 (alleging that, in August 2008 - when the Trustee Defendants
had Mr. Pennington declared incompetent and assumed control of
his estate - the Trustee Defendants performed a criminal
background check and credit check on Plaintiff), Exh. 6
(facsimile transmittal dated 8/7/08 from “Racquel” asking “Roni”
whether she received the background check form).

She also

notarized the Pennington Trust Restatement and the Pennington
Will, [Pennington Trust Restatement at 14; Pennington Will at 7,]
but that is not relevant to Plaintiff’s claims.

27

This Court finds that it is arguably possible for
Plaintiff to cure the defects in her claims against Bridgewater.
The Court therefore GRANTS Defendants’ Motion as to Count I and
the remaining portion of Count III against Bridgewater and
DISMISSES those claims WITHOUT PREJUDICE.
IV.

Leave to Amend
This Court has dismissed the following claims without

prejudice: Count I against Bridgewater; the portion of Count III
against Bridgewater alleging a contract claim for the breach of
the covenant of good faith and fair dealing; and Counts II, IV,
V, and VI against all Defendants.

If Plaintiff wishes to amend

these claims, she must file a second amended complaint by
March 2, 2015.

This Court CAUTIONS Plaintiff that, if she fails

to file her second amended complaint by March 2, 2015, or if the
second amended complaint fails to cure the defects in her claims
that this Court has identified in this Order, this Court will
dismiss those claims with prejudice, and only the remaining
portions of Counts I and III will proceed in this case.
This Court emphasizes that it has only granted
Plaintiff leave to amend the claims listed in this section.

If

Plaintiff wishes to make other changes — i.e., if she wishes to
add new parties, claims, or theories of liability — Plaintiff
must file a motion for leave to amend pursuant to Fed. R. Civ. P.
15(a)(2).
28

CONCLUSION
On the basis of the foregoing, Defendants’ Motion to
Dismiss First Amended Complaint [Doc. 38], filed August 4, 2014,
is HEREBY GRANTED IN PART AND DENIED IN PART.

Defendants’ Motion

is GRANTED insofar as:
-Count I is DISMISSED WITHOUT PREJUDICE as to Defendant Racquel
Bridgewater;
-the portion of Count III alleging a tort claim for bad faith is
DISMISSED WITH PREJUDICE as to all Defendants;
-the portion of Count III alleging a contract claim against
Bridgewater for breach of the covenant of good faith and
fair dealing is DISMISSED WITHOUT PREJUDICE; and
-Counts II, IV, V, and VI are DISMISSED WITHOUT PREJUDICE as to
all Defendants.
Defendants’ Motion is DENIED in all other respects.
Plaintiff has until March 2, 2015 to file her second
amended complaint, consistent with the terms described in this
Order.
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, January 30, 2015.

/s/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge

RONI DU PREEZ VS. RICK BANIS, ET AL; CIVIL 14-00171 LEK-RLP;
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO
DISMISS FIRST AMENDED COMPLAINT [DOC.38]
29