Bruser v. Bank of Hawaii

Filing 88

ORDER GRANTING DEFENDANT/COUNTERCLAIM PLAINTIFF BANK OF HAWAII'S MOTION FOR PARTIAL SUMMARY JUDGMENT AS TO ITS FIRST COUNTERCLAIM AGAINST PLAINTIFFS/COUNTERCLAIM DEFENDANTS, AND JOINDER OF INTERVENOR DEFENDANT ASSOCIATION OF APARTMENT OWNERS OF DISCOVERY BAY; AND DENYING THE OTHER JOINDERS THERETO 50 Motion for Partial Summary Judgment 56 Motion for Joinder 57 Motion for Joinder 58 Motion for Joinder 59 Motion for Joinder Signed by JUDGE L ESLIE E. KOBAYASHI on 07/21/2015. BOH's Motion for Partial Summary Judgment as to Its First Counterclaim against Plaintiffs/Counterclaim Defendants, filed April 16, 2015, and the AOAO Joinder, filed April 23, 2015, are H EREBY GRANTED. The joinders of Intervenor Defendants Susan Sheetz and Patricia Sheetz Bow; Julie G. Henderson, trustee of the Jean K. Gowans Irrevocable Trust, Julie G. Henderson, trustee of the Louis L. Gowans, Jr., Irrevocable Trust, and Richard L. Gowans, trustee of the Richard L. Gowans Irrevocable Trust; and Kevin I. Yokoyama, trustee of the Kevin I. Yokoyama Trust and the Irvine K. Yokomaya, Jr. Trust, all filed April 23, 2015, are HEREBY DENIED. (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
MICHAEL DAVID BRUSER and LYNN
BRUSER, Trustees under that
certain unrecorded Revocable
Living Trust Agreement dated
July 11, 1988, as amended,
doing business as Discovery
Bay Center,

)
)
)
)
)
)
)
)
Plaintiffs,
)
)
vs.
)
)
BANK OF HAWAII, a Hawaii
)
corporation, as Trustee, as
)
successor by merger with
)
Hawaiian Trust Company,
)
Limited, a former Hawaii
)
corporation and as successor )
Trustee under that certain
)
Trust Agreement dated June 6, )
1974,
)
)
Defendant.
)
_____________________________ )

CIVIL NO. 14-00387 LEK-KSC

ORDER GRANTING DEFENDANT/COUNTERCLAIM PLAINTIFF BANK OF
HAWAII’S MOTION FOR PARTIAL SUMMARY JUDGMENT AS TO ITS FIRST
COUNTERCLAIM AGAINST PLAINTIFFS/COUNTERCLAIM DEFENDANTS, AND
JOINDER OF INTERVENOR DEFENDANT ASSOCIATION OF APARTMENT OWNERS
OF DISCOVERY BAY; AND DENYING THE OTHER JOINDERS THERETO
On April 16, 2015, Defendant/Counterclaim Plaintiff
Bank of Hawaii, as successor Trustee under that certain Trust
Agreement dated June 6, 1974 (“BOH”), filed its Motion for
Partial Summary Judgment as to Its First Counterclaim against
Plaintiffs/Counterclaim Defendants (“Motion”).1
1

[Dkt. no. 50.]

On April 23, 2015, Intervenor Defendants (1) Susan Sheetz
(continued...)

On June 15, 2015, Plaintiffs/Counterclaim Defendants
Michael David Bruser and Lynn Bruser, trustees under that certain
unrecorded Revocable Living Trust Agreement Dated July 11, 1988,
as amended, doing business as Discovery Bay Center (collectively
“the Brusers”), filed their memorandum in opposition and, on
June 22, 2015, BOH filed its reply.2

[Dkt. nos. 72, 81.]

The

Court finds these matters suitable for disposition without a
hearing 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”).

After careful consideration of the Motion,

supporting and opposing memoranda, and the relevant legal
authority, the Motion and the AOAO Joinder are HEREBY GRANTED,
and the other three joinders are HEREBY DENIED for the reasons
set forth below.

1

(...continued)
and Patricia Sheetz Bow; (2) Julie G. Henderson, trustee of the
Julie G. Henderson Irrevocable Trust, Julie G. Henderson, trustee
of the Jean K. Gowans Irrevocable Trust, Julie G. Henderson,
trustee of the Louis L. Gowans, Jr., Irrevocable Trust, and
Richard L. Gowans, trustee of the Richard L. Gowans Irrevocable
Trust; (3) Kevin I. Yokomaya, trustee of the Kevin I. Yokoyama
Trust and the Irvine K. Yokoyama, Jr. Trust (collectively
“Individual Intervenors”); and (4) Association of Apartment
Owners of Discovery Bay (“AOAO,” all together “Intervenors”)
filed their joinders. [Dkt. nos. 56, 57, 58, 59.]
2

On June 22, 2015, AOAO also filed a reply regarding its
joinder. [Dkt. no. 80.]
2

BACKGROUND
On August 29, 2014, the Brusers – California residents
– filed their Complaint for Declaratory Judgment (“Complaint”)
against BOH – a Hawai`i corporation – asserting diversity
jurisdiction and jurisdiction pursuant to the Declaratory
Judgment Act.

[Complaint at ¶¶ 1, 4, 5.]

This lawsuit

challenges the requirement that the Brusers, as owners of the
only commercial space (“Commercial Unit”) in the Discovery Bay
Center condominium building in Waikiki (“Discovery Bay”), must
pay the entire trustee’s fee (“Trustee Fee” or “Fee”) to BOH, as
trustee of a trust on behalf of the settlors of Discovery Bay.
[Id. at ¶¶ 6-19.]

In their single claim, the Brusers seek

declaratory judgments that: they are not liable for the Trustee
Fee because the trust agreement (“Trust Agreement”) is vague and
ambiguous, and indefinite, uncertain, and unenforceable; the
Condominium Conveyance Document for the Commercial Unit (“CCD”),
which purports to dictate the payment of fees under the Trust
Agreement, is vague and ambiguous and thus unenforceable; since
the Brusers were not aware of the Trust Agreement or CCD when
they purchased the Commercial Unit – and were not put on notice
of them – and the trustee failed to invoice, charge, or seek
enforcement of the Trustee Fee for the first twenty years of
Discovery Bay’s existence, BOH has waived, and should be estopped
from, collection of the fee; if the Brusers are found to be
3

liable for the Fee, they should only be liable for their
percentage interest in Discovery Bay; the Fee must be reasonable
and not simply determined by BOH’s unilateral decisions; and, if
they are liable for any portion of the Fee, the Brusers are
entitled to an accounting.

The Brusers also seek attorneys’ fees

and costs, and all other just and appropriate relief.

[Id. at

pgs. 8-10.]
One obstacle to the Brusers’ claim is ongoing state
probate court proceedings related to the Trust Agreement (“Trust
Litigation”), which has included the determination of a
reasonable rate for the Trustee Fee.

In stark opposition to the

Brusers, who attempt to avoid the Trust Litigation, BOH attempts
to use the Trust Litigation to enforce collection of the Trustee
Fee.

To that end, on January 28, 2015, BOH filed its

counterclaim against the Brusers (“Counterclaim”).3
34.]

[Dkt. no.

In it, BOH brings claims related to the Brusers’ failure to

pay the Trustee Fee, and to fulfill obligations required by the
Trust Agreement.

Its position is that the CCD and Trust

Agreement require the Brusers to pay it a reasonable Trustee Fee.

3

The Individual Intervenors filed their answers and
counterclaims on March 20, 2015 [dkt. no. 42 (Gowans),] April 2,
2015, [dkt. no. 46 (Yokoyama),] and April 3, 2015, [dkt. no. 47
(Sheetz/Bow),] respectively. AOAO filed its answer and
counterclaim on April 3, 2015. [Dkt. no. 48.] These filings are
only at issue in the Motion insofar as the intervenors joined in
the Motion. See Discussion Section III.
4

[Counterclaim at ¶¶ 12-43.]

Specifically, the Counterclaim

includes the following claims: declaratory judgment that the CCD
requires the Brusers to pay the Trustee Fee (“Counterclaim
Count I”); breach of the CCD (“Counterclaim Count II”); breach of
the Trust Agreement (“Counterclaim Count III”); breach of the
covenant of good faith and fair dealing (“Counterclaim
Count IV”); and recovery of attorneys’ fees, expenses, and costs
(“Counterclaim Count V”).

[Id. at ¶¶ 44-64.]

BOH seeks the

following remedies: a declaratory judgment that the Brusers are
obligated to pay the Trustee Fee; injunctive relief for the
amount of the Brusers’ default and a lien against the Commercial
Unit; damages for the various breaches; and all other just and
equitable relief.

[Id. at pgs. 25-26.]

Although its Counterclaim includes allegations that
rely on, and go to the merits of, the Trust Litigation, in the
Motion BOH solely moves for summary judgment as to
Counterclaim Count I, regarding the Brusers’ obligations under
the CCD.

5

DISCUSSION
I.

Undisputed Facts
The following facts are undisputed.4
A.

The Commercial Unit, Trustee Agreement and CCD
On or about December 11, 1984, the Brusers purchased

from 1178 Ala Moana Properties, Inc. the Commercial Unit, which
is one of 666 units in Discovery Bay and the only non-residential
unit.5

[BOH CSOF at ¶ 5; Brusers CSOF at ¶ 5, 19; BOH Response

CSOF at ¶ 19.6]

On December 14, 1984, the Brusers executed an

4

The facts in this Section come from: BOH’s Separate and
Concise Statement of Facts Relating to Motion for Partial Summary
Judgment as to Its First Counterclaim against
Plaintiffs/Counterclaim Defendants (“BOH CSOF”), filed 4/16/15
(dkt. no. 51); the Brusers’ Separate and Concise CounterStatement in Opposition to Defendants’ Motion for Partial Summary
Judgment and Joinders Therein (“Brusers CSOF”), filed 6/15/15
(dkt. no. 73); and BOH’s Response to Plaintiffs’ Separate and
Concise Counter-Statement in Opposition To Defendants’ Motion for
Partial Summary Judgment and Joinders Therein [Dkt. No. 73] (“BOH
Response CSOF,” all collectively “CSOFs”), filed 6/22/15 (dkt.
no. 82).
5

On February 23, 1989, the Brusers conveyed their
individual interests in the Commercial Unit to themselves as
trustees of their Revocable Living Trust Agreement dated July 11,
1988 (“Living Trust”) through a quitclaim deed (“Quitclaim
Deed”). [BOH CSOF at ¶ 8; Brusers CSOF at ¶ 8; BOH CSOF, Decl.
of Denise Hearn (“Hearn Decl.”), Exh. H (Quitclaim Deed).]
6

In addition to disputing or agreeing to certain facts in
the CSOFs with “Disputed,” “Agreed” and “Admitted,” both the
Brusers and BOH in places, write “Document Language” or “See
Documents.” See, e.g., Brusers CSOF at ¶ 5; BOH Response CSOF at
¶ 26. The Court construes this language to mean that the parties
agree that the statement of fact correctly states the language of
the document or cites to an undisputed and properly authenticated
(continued...)
6

apartment deed (“Apartment Deed”) as grantees-assignees of the
Commercial Unit, in which they, inter alia, agreed to:
pay all rents payable under the Ground Conveyance
as set forth in the [CCD] when the same become due
and payable, . . . pay all other costs, expenses,
assessments and charges payable by the apartment
owner as set forth in the [CCD], . . . [and]
observe, perform, comply with and abide by the
Declaration of Horizontal Property Regime, as
amended, and the By-Laws . . . .
Hearn Decl., Exh. G (Apartment Deed) at 3 (emphases added); see
also BOH CSOF at ¶ 7; Brusers CSOF at ¶ 7.
In a section titled “Lessors’ Costs and Expenses,” the
CCD provides that “[t]he Apartment Owner shall also pay to the
Lessor all fees and expenses charged or incurred by the lessor as
Trustee under the terms of said Trust Agreement dated June 16,
1974, as amended, as the same become due or are incurred.”
[Hearn Decl., Exh. F (CCD) at 15, ¶ 12 (emphasis added).7]

The

CCD also references the Trust Agreement on its very first page,
where it refers to Hawaiian Trust Company, Limited (“Hawaiian
Trust”) as “the Trustee under that certain Trust Agreement dated
June 6, 1974, and filed in the Office of the Assistant Registrar
of the Land Court of the State of Hawaii as Land Court Document
6

(...continued)
document, but not necessarily that they agree with the
characterization of the document in the statement of fact.
7

The Brusers appear to dispute the meaning of Paragraph 12,
but they do not dispute the document itself, its admissibility,
or authenticity. See Brusers CSOF at ¶ 10.
7

No. 687964, as amended[.]”

[Id. at 1.]

The CCD was executed by

Hawaiian Trust as trustee and MEPC Properties (Hawaii) Inc.
(“MEPC”) as the Apartment Owner of the Commercial Unit, on
December 15 and 16, 1976.

[Hearn Decl., Exh. F (CCD) at 33-36.]

The CCD also refers to the trustee as the “lessor.”

[Id. at 5.]

Hawaiian Trust merged with BOH, and thus BOH is currently the
trustee of the Trust Agreement (and the lessor, for purposes of
the CCD).

See, e.g., Complaint at ¶ 5; Counterclaim at ¶ 3.

MEPC was renamed 1778 Ala Moana Properties, Inc., in 1983, prior
to selling the Commercial Unit to the Brusers.
in Supp. of Motion at 3-4 n.4.

See, e.g., Mem.

Thus, the Apartment Deed

undisputedly requires payment under the CCD, and the CCD purports
to bind the Brusers under the Trust Agreement.
The Trust Agreement, dated June 6, 1974, was executed
by the settlors, including MEPC,8 Hawaiian Trust as trustee, and
MEPC as lessee, on or a few days before that date, and filed by
the Assistant Registrar of the Land Court on June 28, 1974.
[Hearn Decl., Exh. A (Trust Agreement).]

The trust res consisted

of cash and the fee interests in the parcels.
¶ 3; Brusers CSOF at ¶ 3.]

[Id.; BOH CSOF at

In a paragraph titled “Trustee’s

Fees,” the Trust Agreement provides:

8

At that time, MEPC was actually named Mainline-MEPC
Properties (Hawaii), Inc., before it was renamed MEPC Properties
(Hawaii) Inc. See Mem. in Supp. of Motion at 3 n.4.
8

The Trustee shall be entitled to such reasonable
fees as from time to time may be mutually agreed
upon. In addition to said reasonable fees, the
Trustee shall have the right to incur such
expenses and to be reimbursed by the Lessee as
provided for by the leases; and to incur such
expenses and be reimbursed for extraordinary
services. The Lessee or its assigns will pay the
Trustee’s fee and expenses until December 31, 2039
or the earlier termination of this trust.
[Trust Agreement at p. 13, ¶ 11 (emphases added).9]
B.

Payment and Litigation of the Trustee Fee
1.

2001 Lawsuit

In February 1994, Hawaiian Trust demanded a Trustee Fee
of $500 per month, plus Hawai`i General Excise Tax (“GET”),10
which the Brusers thereafter began to pay.

Beginning in January

1999, BOH increased the Trustee Fee to $1,900, and then, in
January 2000, it increased the fee to $2,586 per month.
CSOF at ¶ 12; Brusers CSOF at ¶ 12.11]

[BOH

The Brusers refused to

pay more than $500 per month and instead filed a lawsuit in this
district court in May 2001.

[BOH CSOF at ¶¶ 12-13; Brusers CSOF

9

Although the Trust Agreement was amended three times, BOH
represents (and the Brusers do not dispute) that none of the
amendments modify the text of Paragraph 11. [Mem. in Supp. of
Motion at 3 n.3.]
10

The Trustee Fee appears to always include GET.

11

Although the Brusers in their CSOF state,
Trustee’s Power to Unilaterally Determine Fees,”
dispute the fact that BOH demanded these fees as
and this fact is conceded in the Complaint. See
¶¶ 9-10, 14-15.
9

“Disputed as to
they do not
the Trustee Fee,
Complaint at

at ¶¶ 12-13, 25; BOH Response CSOF at ¶ 25.]

The parties

executed a settlement agreement on August 22, 2001
(“Settlement”), in which the Brusers agreed to pay a monthly fee
of $1,100, which they paid until January 2014.12

[Hearn Decl.,

Exh. I (Settlement) at 2, ¶ 3.1; BOH CSOF at ¶ 13; Brusers CSOF
at ¶¶ 13, 26; BOH Response CSOF at ¶ 26.]

In the Settlement, BOH

reserved its right to increase the Fee, and the Brusers did not
waive their right to object to any such increases.

[Settlement

at 2, ¶ 3.1.]
2.

2014 Lawsuit

On January 28, 2014, BOH as trustee initiated the Trust
Litigation in the Circuit Court of the First Circuit, State of
Hawai`i,13 in which it included the Brusers as “interested
persons.”

[BOH CSOF at ¶ 14; Brusers CSOF at ¶ 14, 27; BOH

Response CSOF at ¶ 27.]

As the litigation developed, BOH filed a

petition to increase the Trustee Fee.

On April 17, 2015, the

state court approved an increase in the Trustee Fee to $9,850 as
a “reasonable fee” for a five-year period beginning October 2014.

12

From this Court’s review of the docket in Civil 1:01-CV00340 DAE-BMK, it does not appear that any substantive decisions
were made prior to the Brusers’ voluntary dismissal of all claims
against BOH on August 22, 2001.
13

Among other things, BOH petitioned for its resignation,
appointment of a successor, reformation of the trust, and
approval of trustee accounts from January 2008 through December
2013. See, e.g., Hearn Decl., Exh. J (filed state court
petition).
10

[Brusers CSOF at ¶ 30; BOH Response CSOF at ¶ 30; BOH’s
Submission of Supplemental Exhs. “BB”-“EE” to Separate and
Concise Statement of Facts Relating to Motion for Partial Summary
Judgment as to Its First Counterclaim against
Plaintiffs/Counterclaim Defendants, filed 4/23/15 (dkt. no. 60),
Exh. BB (Second Order Granting in Part and Continuing in Part
Petition for Resignation of Trustee, Appointment of Successor
Trustee, Reformation of Trust and Approval of Trustee’s Accounts
Covering the Period from January 1, 2008 through December 31,
2013) at 4, ¶ A.4.(A).]

Both AOAO and the Brusers have appealed

the state court rulings, including its conclusion that it had
jurisdiction to determine a reasonable fee and its finding that
$9,850 was reasonable.

[Brusers CSOF at ¶¶ 32-33; id., Decl. of

Michael David Bruser (“Bruser Decl.”), Exhs. 7, 8; BOH Response
CSOF at ¶¶ 32-33.]
state court.14

Those appeals appear to be pending before the

See Mem. in Supp. of Motion at 11; Mem. in Opp.

at 5.
II.

BOH Motion
Although the Complaint and Counterclaim raise issues

related to the Trust Agreement and, in particular, the reasonable
Trustee Fee, none of those issues are relevant to the instant
Motion.

The Motion seeks summary judgment on Counterclaim

14

Although the parties have included various filings from
the Trust Litigation, neither has included the docket.
11

Count I only, which focuses entirely on the CCD.
In addition to a sentence incorporating the prior
paragraphs of the Counterclaim, [Counterclaim at ¶ 44,]
Counterclaim Count I consists of the following:
Counterclaim Plaintiff seeks a declaratory
judgment from the Court, pursuant to 28 U.S.C.
§ 2201 and Federal Rule of Civil Procedure 57,
that pursuant to the terms of the CCD, the
Counterclaim Defendants are obligated to pay the
‘reasonable fees’ of the Trustee as such fees are
determined under the Trust Agreement.
[Id. at ¶ 45.]

The sole issue then is the Brusers’ liability for

the Trustee Fee vis a vis the CCD, and thus the language of the
Trustee Agreement is not at issue.15

Consistent with BOH’s

position, the plain language of the CCD requires payment of fees
under the Trust Agreement, which includes the Trustee Fee.

15

The Court questions whether it has jurisdiction over any
claims by the Brusers related to their liability for the Trustee
Fee under the Trust Agreement or the reasonableness of the state
court’s determination regarding that Fee. Though neither is at
issue in the Motion, nor raised by BOH, such claims appear to be
barred by the Rooker-Feldman doctrine. See Rooker v. Fidelity
Trust Co., 263 U.S. 413 (1923); Dist. of Columbia Court of
Appeals v. Feldman, 460 U.S. 462 (1983). That doctrine “bars
‘state-court losers complaining of injuries caused by state-court
judgments rendered before the district court proceedings
commenced’ from asking district courts to review and reject those
judgments.” Henrichs v. Valley View Dev., 474 F.3d 609, 613 (9th
Cir. 2007) (quoting Exxon Mobil Corp. v. Saudi Basic Indus.
Corp., 544 U.S. 280, 284, 125 S. Ct. 1517, 161 L. Ed. 2d 454
(2005)). This Court may not act as an appellate court over the
state probate court and the Trust Litigation. To the extent that
the Brusers desire to challenge the probate court’s decisions and
its jurisdiction to hear such issues, or to litigate issues
related to the Trust Agreement, they must do so in state court.
12

The construction and legal effect of a contract, and
the determination of whether a contract is ambiguous are
questions of law for this Court to decide.

Hawaiian Ass’n of

Seventh-Day Adventists v. Wong, 130 Hawai`i 36, 45, 305 P.3d 452,
461 (2013).
The Hawai`i Supreme Court has described the
standards for interpreting the substance of a
contract:
Contract terms are interpreted according
to their plain, ordinary, and accepted sense
in common speech. Cho Mark Oriental Food v.
K & K Intern., 73 Haw. 509, 520, 836 P.2d
1057, 1064 (1992). The court’s objective is
“to ascertain and effectuate the intention of
the parties as manifested by the contract in
its entirety.” Brown [v. KFC Nat’l Mgmt.
Co], 82 Hawai`i [226,] 240, 921 P.2d [146,]
160 [(1996)] (citation and internal quotation
marks omitted).
A contract is ambiguous when its terms
are reasonably susceptible to more than one
meaning. Airgo v. Horizon Cargo Transp., 66
Haw. 590, 594, 670 P.2d 1277, 1280 (1983).
As a general rule, the court will look no
further than the four corners of the contract
to determine whether an ambiguity exists.
State Farm Fire & Cas. Co. v. Pac. Rent–All,
90 Hawai`i 315, 324, 978 P.2d 753, 762 (1999)
(noting that the parties’ disagreement as to
the meaning of a contract does not render it
ambiguous). The parol evidence rule
“precludes the use of extrinsic evidence to
vary or contradict the terms of an
unambiguous and integrated contract.”
Pancakes of Hawai`i v. Pomare Props. Corp.,
85 Hawai`i 300, 310, 944 P.2d 97, 107 (App.
1997) (citation omitted). This rule,
however, is subject to exceptions that permit
the court to consider extrinsic evidence when
the writing in question is ambiguous or
13

incomplete. Id. Where there is any doubt or
controversy as to the meaning of the
language, the court is permitted to consider
parol evidence to explain the intent of the
parties and the circumstances under which the
agreement was executed. Hokama v. Relinc
Corp., 57 Haw. 470, 476, 559 P.2d 279, 283
(1977).
Barranco v. 3D Sys. Corp., Civil No. 13-00412 LEK-RLP, 2015 WL
419687, at *7 (D. Hawai`i Jan. 30, 2015) (emphases omitted)
(alterations in Barranco) (quoting Wong, 130 Hawai`i at 45–46,
305 P.3d at 461–62).
It is undisputed that the Apartment Deed requires the
Brusers to pay “all other costs, expenses, assessments and
charges payable by the apartment owner as set forth in the
[CCD.]”

[Brusers CSOF at ¶ 7; Apartment Deed at 3.]

Further,

the language of the CCD requires the apartment owner to pay to
the lessor “all fees and expenses charged or incurred by the
Lessor as Trustee under the terms of [the Trust Agreement,] as
the same become due or are incurred.”

[CCD at 15.]

The Trust

Agreement undisputably provides that, regarding “Trustee’s Fees,”
the trustee “shall be entitled to such reasonable fees as from
time to time may be mutually agreed upon.”
13.]

[Trust Agreement at

The Brusers do not dispute that they are the apartment

owners and BOH is the trustee and lessor pursuant to the
Apartment Deed, CCD, and Trust Agreement.
CCD at 5, 33; Trust Agreement at 1.]

14

[Apartment Deed at 3;

The Court concludes that the plain and ordinary meaning
of the terms of the Apartment Deed and the CCD require the
Brusers to pay “all fees and expenses” as provided by the Trust
Agreement.

See Cho Mark, 73 Haw. at 520, 836 P.2d at 1064. One

such fee is the Trustee Fee.

The Court further concludes that

there is no ambiguity in the terms since they are not susceptible
of more than one meaning, see Airgo, 66 Haw. at 594, 670 P.2d at
1280, and the Brusers do not point to any language within the
documents to argue that the terms are ambiguous, see State Farm,
90 Hawai`i at 324, 978 P.2d at 762.

There being no ambiguity, it

would be improper for the Court to consider extrinsic evidence to
interpret the Apartment Deed and the CCD.

See Pancakes of

Hawai`i, 85 Hawai`i at 310, 944 P.2d at 107.

Even viewing the

evidence in the light most favorable to the Brusers, there is no
dispute of material fact that the CCD obligates the Brusers to
pay BOH a reasonable Trustee Fee.

The Court thus GRANTS summary

judgment on Counterclaim Count I in favor of BOH.

See Grenning

v. Miller-Stout, 739 F.3d 1235, 1238 (9th Cir. 2014) (“Summary
judgment is appropriate when, with the evidence viewed in the
light most favorable to the non-moving party, there are no
genuine issues of material fact, so that the moving party is
entitled to a judgment as a matter of law.” (citation and
internal quotation marks omitted)).

15

The Court here clarifies the limits on its ruling.

It

simply finds that the CCD requires the Brusers to pay all fees
under the Trustee Agreement and that one such fee is the Trustee
Fee.

This is the sum total of the ruling.

In short, this Court

makes no judgment as to what the Trustee Fee should be, who must
mutually agree to it, and what is reasonable.

Moreover, it does

not interpret Paragraph 12 of the CCD in the context of the
Trustee Agreement as a whole, or the understandings of the
parties to that agreement.

Those issues are best left for the

Trust Litigation, where the content of the Trust Agreement is
already being litigated.

If, on appeal, the state court finds

that the probate court does not have jurisdiction over such
matters, the Brusers may possibly press those claims in this
Court.

However, at present, this Court may not consider them due

to the Rooker-Feldman doctrine.

See infra note 13.

With these limitations in mind, the Court rejects the
Brusers’ arguments as to why the Court should deny the Motion.
The vast majority of the Brusers’ memorandum in opposition
consists of challenges to the state court’s rulings.

See, e.g.,

Mem. in Opp. at 8-9 (state court’s process for determining
reasonableness), 9-11 (state court’s jurisdiction).

The Court

has already ruled that these arguments are not relevant to the

16

Motion, and are likely precluded by the Trust Litigation.16
The Court also has already rejected the Brusers’
ambiguity argument, but will simply point out here that they
confuse the language of the CCD – at issue here – with that of
the Trust Agreement – at issue in the Trust Litigation.

See,

e.g., Mem. in Opp. at 12 (arguing that “[t]he CCD contains
language that ‘the Trustee shall be entitled to such reasonable
fees . . .’” and that language is “vague and ambiguous”).

To the

extent that the Brusers argue that the CCD cannot be read to
require them to pay the entire Trustee Fee, that interpretation
is belied by the plain language of the CCD.

Insofar as there is

no ambiguity in the CCD, the Court need not look beyond the
contract terms.

The Court will, however, note that it might not

be such an “absurd proposition,” defying “common sense and
economics,” [Mem. in Opp. at 11-12,] that the settlors, trustee,
and lessee, mutually and knowingly agreed that the Commercial
Unit would bankroll the Trustee Fee in its entirety, since that
unit, among all 666, was the sole unit that would likely provide
a regular income stream.

Moreover, although the Court makes no

16

Theoretically, this Court might have jurisdiction over a
claim that the reasonableness determination was extraordinary or
grossly excessive. Cf. BMW of N. Am., Inc. v. Gore, 517 U.S. 559
(1996) (considering whether punitive damages imposed by state
court were grossly excessive and violative of the Due Process
Clause). However, the Brusers do not raise such a challenge and,
even if they did, such a claim would not be ripe due to the
ongoing appeal in the Trust Litigation.
17

judgment as to how to determine a reasonable fee, that
determination must be guided by common sense and likely could not
encompass the hypothetical posited by the Brusers for fees
incurred unrelated to Discovery Bay.

See id. at 12-13.

Finally, to the extent that Plaintiffs allege certain
facts in the Complaint that theoretically could support a dispute
of material fact, see, e.g., Complaint at ¶ 13.b. (arguing that
the By-Laws of the Association of Apartment Owners of Discovery
Bay conflicts with the “all fees and expenses” language of the
CCD), those arguments are waived since they were not presented in
opposition to the Motion.17

See, e.g., Avilez v. Pinkerton Gov’t

Servs., Inc., 596 F. App’x 579 (9th Cir. 2015) (holding that the
defendant waived an “argument by not raising it in opposition to
the motion”).

For all of these reasons, the Court GRANTS the

Motion in its entirety.
III. Joinders
The four groups of Defendant Intervenors all style
their joinders as substantive joinders.18
59.]

[Dkt. nos. 56, 57, 58,

However, only the AOAO Joinder is properly supported as a

17

The Court notes that these arguments still would likely
not overcome the plain language of the CCD, even if they had been
properly submitted.
18

The Court herein refers to them as the Sheetz/Bow
Joinder, the Gowans Joinder, the Yokoyama Joinder, and the AOAO
Joinder.
18

substantive joinder, because only it attaches a memorandum in
support of the Motion.

See Mem. in Supp. of AOAO Joinder, filed

4/23/15 (dkt. no. 59-1); Local Rule LR7.9 (“‘Substantive joinder’
means a joinder based on a memorandum supplementing the motion or
opposition joined in.”).

The AOAO Joinder argues that “the

[AOAO] specifically agrees with [BOH’s] position that the Circuit
Court is the appropriate form [sic] to adjudicate the question of
what constitutes ‘reasonable fees,’” that,
[BOH] is entitled to judgment as matter [sic] of
law on its [Counterclaim Count I], and that the
[AOAO] is entitled to judgment as a matter of law
that, pursuant to the terms of the [CCD], the
Brusers are obligated to pay the “reasonable fees”
of the Trustee as such fees are determined under
the Trust Agreement, as amended, by the Circuit
Court of the First Circuit Court of the State of
Hawaii in the [Trust Litigation].
[Mem. in Supp. of AOAO Joinder at 4-5 (citation omitted).]

Since

AOAO seeks the same remedy, for the reasons stated above, the
Court GRANTS the AOAO Joinder.
On the other hand, the Sheetz/Bow, Gowans, and Yokoyama
Joinders do not provide sufficient support for the relief that
they seek.

Their entire argument is:
By this joinder, Intervenor Defendants
Sheetz/Bow request that the Court grant summary
judgment with respect to their claim for
declaratory relief that “Brusers are in breach of
their obligations under the [CCD] . . . by their
failure and refusal to pay Trustee’s reasonable
fees” (Counterclaim in Intervention (Dkt. 42, ¶ 21
at 7). Since [BOH’s Motion] addresses the
identical claim as raised in the Counterclaim in
19

Intervention, summary judgment thereon should be
granted in favor of Intervenor Defendants
Sheetz/Bow for the reasons outlined in [the
Motion].
Sheetz/Bow Joinder at 3 (italics and some alterations in
Sheetz/Bow Joinder) (emphasis added); see also Gowans Joinder at
2-3 (nearly identical language); Yokoyama Joinder at 3 (same).
Although they argue that they raise an “identical
claim” to BOH, that is not so.

This Court has concluded that the

Brusers do owe an obligation under the CCD to pay a reasonable
Trustee Fee.

See infra Discussion Section II.

However, it has

not reached the issue of whether the Brusers have in any way
breached that obligation.

Thus, what the Intervenor Defendants

request goes beyond the relief that BOH has sought and obtained.
Since these joinders neither make an “identical claim” to BOH,
nor provide support for their requested relief, this Court
concludes that summary judgment on their claims is not warranted.
The Court therefore DENIES the Sheetz/Bow Joinder, the Gowans
Joinder, and the Yokoyama Joinder.
CONCLUSION
On the basis of the foregoing, BOH’s Motion for Partial
Summary Judgment as to Its First Counterclaim against
Plaintiffs/Counterclaim Defendants, filed April 16, 2015, and the
AOAO Joinder, filed April 23, 2015, are HEREBY GRANTED.

The

joinders of Intervenor Defendants Susan Sheetz and Patricia
20

Sheetz Bow; Julie G. Henderson, trustee of the Jean K. Gowans
Irrevocable Trust, Julie G. Henderson, trustee of the Louis L.
Gowans, Jr., Irrevocable Trust, and Richard L. Gowans, trustee of
the Richard L. Gowans Irrevocable Trust; and Kevin I. Yokoyama,
trustee of the Kevin I. Yokoyama Trust and the Irvine K.
Yokomaya, Jr. Trust, all filed April 23, 2015, are HEREBY DENIED.
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, July 21, 2015.

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

MICHAEL DAVID BRUSER, ET AL. VS. BANK OF HAWAII, ETC.; CIVIL 1400387 LEK-KSC; ORDER GRANTING DEFENDANT/COUNTERCLAIM PLAINTIFF
BANK OF HAWAII’S MOTION FOR PARTIAL SUMMARY JUDGMENT AS TO ITS
FIRST COUNTERCLAIM AGAINST PLAINTIFFS/COUNTERCLAIM DEFENDANTS,
AND JOINDER OF INTERVENOR, DEFENDANT ASSOCIATION OF APARTMENT
OWNERS OF DISCOVERY BAY; AND DENYING THE OTHER JOINDERS THERETO

21