Adon Construction Inc.; et al. vs. Renesola America Inc.; et al.

Filing 31

ORDER ADOPTING 27 FINDINGS AND RECOMMENDATION TO DENY PLAINTIFFS ADON CONSTRUCTION INC. AND GREEN VISION LLC'S MOTION TO REMAND MATTER BACK TO THE FIRST CIRCUIT COURT OFTHE STATE OF HAWAII. Signed by JUDGE DERRICK K. WATSON on 3/6/2017. - The Court ADOPTS the Findings and Recommendation to Deny Plaintiffs Adon Construction Inc. and Green Vision LLC's Motion to Remand Matter Back to the First Circuit Court of the State of Hawaii and OVERRULES Plaintiffs' ; Objections. (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

UNITED STATES DISTRICT COURT
DISTRICT OF HAWAI‘I

ADON CONSTRUCTION INC. and
GREEN VISION LLC,

CIVIL NO. 16-00568 DKW-RLP

Plaintiffs,

ORDER ADOPTING FINDINGS
AND RECOMMENDATION TO
vs.
DENY PLAINTIFFS ADON
CONSTRUCTION INC. AND
RENESOLA AMERICA INC.; KIVALU GREEN VISION LLC’S MOTION
RAMANLAL; et al.,
TO REMAND MATTER BACK TO
THE FIRST CIRCUIT COURT OF
Defendants.
THE STATE OF HAWAII

ORDER ADOPTING FINDINGS AND RECOMMENDATION TO DENY
PLAINTIFFS ADON CONSTRUCTION INC. AND GREEN VISION LLC’S
MOTION TO REMAND MATTER BACK TO
THE FIRST CIRCUIT COURT OF THE STATE OF HAWAII

INTRODUCTION
Adon Construction Inc. (“Adon”) and Green Vision LLC (collectively,
“Plaintiffs”) seek remand on the basis that the Court lacks diversity jurisdiction
because both Plaintiffs and Defendant Kivalu Ramanlal are citizens of the State of
Hawaii. The Magistrate Judge found removal proper because Plaintiffs failed to
state a claim against Ramanlal and fraudulently joined him. Plaintiffs now object
to the Magistrate Judge’s January 6, 2017 Findings and Recommendation
(“F&R”), denying their Motion to Remand.

Under settled state law, Plaintiffs cannot state a claim against Ramanlal for
“breach of duty to mitigate damages,” the sole claim asserted against him. As a
result, Defendants have met their burden of demonstrating that Ramanlal was
fraudulently joined. Because the Court has diversity jurisdiction in the absence of
Ramanlal, the case was properly removed, and the Magistrate Judge appropriately
recommended denial of Plaintiffs’ Motion to Remand. The Court adopts the
conclusions of the F&R and overrules Plaintiffs’ Objections.1
BACKGROUND
I.

Complaint And Notice Of Removal
Plaintiffs filed a Complaint against Ramanlal and Defendant Renesola

America, Inc. (“Renesola”) in state court on September 15, 2016, Civil No. 16-11741-09, alleging exclusively state-law claims. Renesola removed the case on
October 20, 2016, without the consent of Ramanlal,2 on the basis of diversity
jurisdiction. See Notice of Removal ¶ 25 (Dkt. No. 1). Plaintiffs seek $808,677.55
in compensatory damages and additional amounts in special and punitive damages.

1

The Court finds this matter suitable for disposition without a hearing pursuant to Local Rule
7.2(d).
2
“Although the usual rule is that all defendants in a state court action must join in a petition for
removal, the ‘rule of unanimity’ does not apply to ‘nominal, unknown or fraudulently joined
parties.’” United Computer Sys., Inc. v. AT & T Corp., 298 F.3d 756, 762 (9th Cir. 2002)
(quoting Emrich v.Touche Ross & Co., 846 F.2d 1190, 1193 n.l (9th Cir. 1988) (internal citations
omitted)); Watanabe v. Lankford, 684 F. Supp. 2d 1210, 1220 n.4 (D. Haw. 2010) (“The Court
notes that ‘nominal, unknown or fraudulently joined’ defendants need not consent.”). Renesola
did not seek Ramanlal’s consent in light of its view that he was fraudulently joined to defeat
federal subject matter jurisdiction. See Notice of Removal ¶ 25.
2

Notice of Removal ¶ 18. Plaintiffs Adon and Green Vision are citizens of Hawaii.
Complaint ¶¶ 1-2; Notice of Removal ¶¶ 2-3. Renesola is a Delaware Corporation
with its principal place of business in California. Notice of Removal ¶ 4.
Although Ramanlal is a citizen of Hawaii, Renesola contends that his presence
does not destroy diversity because he was fraudulently joined in this matter.
Notice of Removal ¶¶ 6-17.
A.

Plaintiffs’ Claims

Plaintiffs contracted to install photovoltaic (“PV”) panels and systems on
residential and commercial properties in Hawaii. Complaint ¶ 3, attached as Ex. A
to Notice of Removal (Dkt. No. 1-1). Renesola manufactures and supplied PV
panels to Plaintiffs for use in their Hawaii installations. Complaint ¶ 5. According
to Plaintiffs, certain Renesola PV panels are defective and have been rejected by
their clients. Complaint ¶ 8. They allegedly paid Renesola over $2.5 million for
PV products and installed over 2,858 Renesola PV panels on residential projects
and over 6,030 Renesola PV panels on commercial projects. Complaint ¶¶ 15-17.
The majority of the Renesola PV panels installed purportedly have visible signs of
defects. Complaint ¶ 29.
Plaintiffs contracted to install 80 Renesola PV panels on Ramanlal’s
residence in 2013 at a cost of $76,128.00 (“Ramanlal Project”). That installation
was completed as of February 2014. Complaint ¶¶ 13-14. On December 3, 2014,
3

Ramanlal sued Adon in the First Circuit Court of the State of Hawaii, Civil No. 141-2463-12, demanding a full refund of the contract price, $76,128.00, in part, due
to visible defects to the PV panels (“Ramanlal State Court Case”). Plaintiffs allege
that although Renesola initially offered to replace certain panels under warranty,
“Renesola has denied fixing the damaged and/or defective PV Panels/Modules at
the Ramanlal Project and Ramanlal has refused to accept the proposed resolution
to replace 78 out of the 80 Renesola PV [panels].” Complaint ¶ 38. According to
Plaintiffs, they attempted to work with Renesola to resolve the defective PV panel
issues throughout 2015, but Renesola refused to remedy the defects, Complaint
¶¶ 41-50, while Plaintiffs continue to incur damages by having to defend the
Ramanlal State Court Case. Complaint ¶ 39-40.
Plaintiffs allege multiple state-law claims against Renesola,3 but assert a
single cause of action against Ramanlal: “breach of duty to mitigate damages.”
Complaint ¶¶ 176-184. That claim alleges that Ramanlal “failed to exercise
reasonable diligence to mitigate his damages” when he refused to allow
representatives from Renesola to access his property and refused to accept the

3

Plaintiffs assert the following causes of against Renesola: fraud and/or intentional and/or
reckless and/or negligent misrepresentation (Count I); tortious fraud in the inducement (Count
II); unfair or deceptive acts and practices (Count III); deceptive trade practices (Count IV);
business defamation and disparagement (Count V); unjust enrichment (Count VI); detrimental
reliance (Count VII); breach of contract (Count VIII); breach of express warranty (Count IX);
Complaint ¶¶ 56-175; and also assert the same breach of duty to mitigate damages claim alleged
against Ramanlal (Count X). Complaint ¶¶ 176-184.
4

replacement of defective PV panels as a remedy in the Ramanlal State Court Case.
Complaint ¶ 180. More specifically, the Complaint alleges in Count X that—
177. Plaintiff has been injured by Renesola’s intentional,
reckless and/or negligent fraudulent, misrepresentations,
breach of contract, unfair competition and business, as
well [as] breach of express warranty relating to the
damages and/or defects in the form of micro-fracturing,
and/or cracking, a defect also known as “snail trail(s)” on
the installed Renesola PV Panels/Modules at the
Ramanlal Project, as well as the 5 Commercial Sites.
178. Plaintiff provided notice and demand to Renesola to
honor their promises, literature and/or representations
made to defend their product and mitigate the damages as
alleged.
179. Renesola did visit the 5 Commercial Sites and did
acknowledge and admit to the existence of the damages
and/or defects in the form of micro-fracturing, and/or
cracking, a defect also known as “snail trail(s)” on the
installed Renesola PV Panels/Modules.
180. Ramanlal has failed to exercise reasonable diligence to
mitigate his damages by refusing to allow Renesola
representatives onto the Ramanlal Project and thereafter
refusing to accept the replacement of damaged and/or
defective PV Panels/Modules as a possible remedy.
181. Renesola has failed to exercise reasonable diligence to
mitigate the damages as provided by Plaintiff as they
relate to the Ramanlal Project and 5 Commercial Sites.
182. By each party refusing to cooperate and mitigate their
damages reasonably and fairly, the pending Ramanlal
Project has continued to damage Plaintiff.
183. Plaintiff was forced to mitigate its damages as alleged by
the owners of the 5 Commercial Sites without the
5

assistance of Renesola by providing a $501,064.75
damage-charge discount on the agreed-to price of the
work.
184. As a direct and proximate result of both Ramanlal and
Renesola [sic] to reasonably mitigate their damages,
Plaintiff has suffered direct, proximate, incidental and
consequential damages, as well as general and special
damages, including but not limited to disparagement of
business reputation, loss of time due to fielding client
dissatisfaction and complaints, service calls, and loss of
profits, business opportunities and contracts in the total
amount of $808,677.55, including attorney’s fees and
costs, in an amount to be proven at trial.
Complaint ¶¶ 177-184.
B.

Ramanlal State Court Case (Civil No. 14-1-2463-12)

Ramanlal, as plaintiff, sued Adon for installing the defective PV panels and
for the lack of necessary permits, alleging, among other claims, breach of contract
and misrepresentation. See Ramanlal State Court Case Complaint ¶¶ 21-43,
attached as Ex. C to Notice of Removal (Dkt. No. 1-3). On December 1, 2015,
Adon answered and counterclaimed. The Answer asserts the defense that
Ramanlal “failed to mitigate any damage to which [Ramanlal] may be entitled[.]”
Ramanlal State Court Case Answer ¶ 49, attached as Ex. D to Notice of Removal
(Dkt. No. 1-4). Adon also brought a Counterclaim for breach of contract against
Ramanlal for “refusing to allow [a] Renesola engineer access to the worksite to
verify if there is a possible defect and warranty issue, and therefore interfered with
[Adon’s] performance on delivery of a satisfactory product per contract
6

requirements.” Ramanlal State Court Case Counterclaim ¶ 49, attached as Ex. D to
Notice of Removal (Dkt. No. 1-4).
The Ramanlal State Court Case was pending at the time Plaintiffs filed the
instant action against Ramanlal and Renesola in state court. See Complaint ¶¶ 36,
39.
II.

Magistrate Judge’s F&R
On December 2, 2016, Plaintiffs filed a Motion to Remand, asserting that the

Court lacks diversity jurisdiction because Plaintiffs and Ramanlal are citizens of
the same state. Dkt. No. 16. In the January 6, 2017 F&R, the Magistrate Judge
found that Ramanlal was fraudulently joined, and hence, his presence as a Hawaii
resident may be ignored for purposes of establishing diversity jurisdiction. The
Magistrate Judge accordingly recommended that the Motion to Remand be denied.
The Magistrate Judge first addressed fraudulent joinder by examining
Plaintiffs’ claims against Ramanlal to determine if they failed to state a valid claim
that was “obvious under settled Hawaii law.” F&R at 7. The F&R reviewed the
procedural history of the litigation, detailing the claims brought by Plaintiffs
against Renesola and Ramanlal in the instant case and the claims and Counterclaim
in the parallel Ramanlal State Court Case. F&R at 2-4, 7-9. The Magistrate Judge
found that Plaintiffs’ sole claim against Ramanlal for breach of duty to mitigate
damages “obviously fails under settled Hawaii law.” F&R at 8. The F&R
7

surveyed the relevant law within this jurisdiction and elsewhere, noting that there
is no recognized stand-alone claim for “breach of duty to mitigate damages”—
The only reference in Hawaii case law to the mitigation of
damages is in reference to an affirmative defense. See, e.g.,
Tabieros v. Clark Equip. Co., 944 P.2d 1279, 1316 (Haw.
1997) (discussing the “plaintiff’s duty” regarding mitigation of
damages); Marco Kona Warehouse v. Sharmilo, Inc., 768 P.2d
247, 251 (Haw. Ct. App. 1989) (discussing the plaintiff’s duty
to mitigate its damages and the defendant’s burden to prove
whether plaintiff satisfied its obligation). The Hawaii
Supreme Court has held that “the plaintiff has a duty to make
every reasonable effort to mitigate his damages.” Malani v.
Clapp, 542 P.2d 1265, 1271 (Haw. 1975) (emphasis added).
“The burden, however, is upon the defendant to prove that
mitigation is possible, and that the injured party has failed to
take reasonable steps to mitigate his damages.” Id. (emphasis
added). Here, Mr. Ramanlal is not the plaintiff at issue, but is
instead named as a defendant in this action. The settled case
law of Hawaii is that mitigation of damages is an affirmative
defense, not a claim. There is no Hawaii case law that
supports a claim for “breach of duty to mitigate damages”
against a defendant for his alleged failure to mitigate his
damages in a separate lawsuit. Like the district court in
Willekes v. Serengeti Trading Co., this court has been unable
to find any case “in which failure to mitigate was referred to
as anything but an affirmative defense.” Civil Action No.: 137498 (ES) (MAH), 2016 WL 5334522, at *13 (D.N.J. Sept.
22, 2016) (dismissing the plaintiff’s “failure to mitigate” claim
because the court was unable to find any court that recognized
such a claim).
F&R at 8-9. The Magistrate Judge rejected Plaintiffs’ arguments that their failure
to mitigate claim against Ramanlal is valid because “it has all the hallmarks of a
claim,” observing that, “Plaintiffs do not cite any Hawaii case law that allows for a

8

claim to be asserted against a defendant for failing to mitigate damages in a
separate lawsuit.” F&R at 10.
The Magistrate Judge likewise rejected Plaintiffs’ alternative argument “that
this action must be remanded pursuant to Federal Rule of Civil Procedure 1 and
Hawaii Rule of Civil Procedure 1 to promote the just and expeditious resolution of
this action together with Mr. Ramanlal’s state court action.” F&R at 10-11 (citing
Mot. to Remand at 10-13). Plaintiffs cited no authority to support this basis for
remand.4 F&R at 11.
The Magistrate Judge found that the Court has subject matter jurisdiction
over this matter and accordingly recommended that Plaintiffs’ Motion to Remand
be denied. Plaintiffs’ Objections followed.
III.

Plaintiffs’ Objections
Plaintiffs object only to the Magistrate Judge’s finding that Ramanlal was

fraudulently joined and do not object to the F&R’s rejection of their second basis
for remand, namely, that the Court should order remand pursuant to Rule 1 of the
Federal and Hawaii Rules of Civil Procedure. Specifically, Plaintiffs argue that the
Magistrate Judge “fail[ed] to recognize the pleading requirements of Rule 8[:]”
4

Plaintiffs assert that they “had planned to consolidate the two matters in the First Circuit Court
and resolve matters in the same jurisdiction for convenience of record.” Mot. to Remand at 11.
Although the instant Complaint was filed in state court on September 15, 2016, it does not
appear from the record that Plaintiffs attempted to consolidate the two matters for purposes of
discovery prior to removal. Nor is it known whether the state court would have granted such a
request because the discovery cut-off in the Ramanlal State Court Case, Civil No. 14-1-2463-12,
was December 22, 2016. Id. at 5.
9

while “there may be no case law on the record identifying ‘failure to mitigate
damages’ as a claim, the facts and circumstances contained on the face of the
Complaint assert[] the required elements pursuant to both FRCP and/or HRCP
Rule 8.” Objections at 3.
STANDARD OF REVIEW
When a party objects to a magistrate judge’s findings or recommendations,
the district court must review de novo those portions to which the objections are
made and “may accept, reject, or modify, in whole or in part, the findings or
recommendations made by the magistrate judge.” 28 U.S.C. § 636(b)(1); see also
United States v. Raddatz, 447 U.S. 667, 673 (1980); United States v. Reyna-Tapia,
328 F.3d 1114, 1121 (9th Cir. 2003) (en banc) (“[T]he district judge must review
the magistrate judge’s findings and recommendations de novo if objection is made,
but not otherwise.”).
Under a de novo standard, this Court reviews “the matter anew, the same as
if it had not been heard before, and as if no decision previously had been
rendered.” Freeman v. DirecTV, Inc., 457 F.3d 1001, 1004 (9th Cir. 2006); see
also United States v. Silverman, 861 F.2d 571, 576 (9th Cir. 1988). The district
court need not hold a de novo hearing. However, it is the Court’s obligation to
arrive at its own independent conclusion about those portions of the magistrate
judge’s findings or recommendation to which a party objects. United States v.
10

Remsing, 874 F.2d 614, 616 (9th Cir. 1989). The district judge may accept the
portions of the findings and recommendation to which the parties have not
objected as long as it is satisfied that there is no clear error on the face of the
record. See United States v. Bright, 2009 WL 5064355, at *3 (D. Haw. Dec. 23,
2009); Fed. R. Civ. P. 72(b) advisory committee’s note.
DISCUSSION
As a preliminary matter, Plaintiffs limit their Objections to the F&R’s
discussion of whether Ramanlal was fraudulently joined—they do not re-argue
their second basis for remand based upon judicial efficiency. There being no clear
error, the Court adopts those portions of the F&R to which Plaintiffs do not object.
The Court turns its attention to Plaintiffs’ assertion that a valid stand-alone
claim exists under Hawaii law for “breach of duty to mitigate damages.” Because
it does not, Ramanlal is a sham defendant, fraudulently joined, and remand is
inappropriate.
I.

Removal Generally
Removal of an action from state to federal court is proper if the federal court

would have had original jurisdiction over the action. 28 U.S.C. § 1441(a).
“Federal jurisdiction must be rejected if there is any doubt as to the right of
removal in the first instance,” and a defendant who invokes the federal court’s
removal jurisdiction “always has the burden of establishing that removal is
11

proper.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (citations omitted)
(noting that there is a “strong presumption” against removal jurisdiction); accord
Washington v. Chimei Innolux Corp., 659 F.3d 842, 847 (9th Cir. 2011); MooreThomas v. Alaska Airlines, Inc., 552 F.3d 1241, 1244 (9th Cir. 2009) (“The
removal statute is strictly construed, and any doubt about the right of removal
requires resolution in favor of remand.”).
Federal courts have original jurisdiction over civil actions where the amount
in controversy exceeds $75,000 and there is complete diversity of citizenship. 28
U.S.C. § 1332(a)(1). Complete diversity of citizenship requires that each of the
plaintiffs be a citizen of a different state than each of the defendants. “[O]ne
exception to the requirement of complete diversity is where a non-diverse
defendant has been ‘fraudulently joined.’” Morris v. Princess Cruises, Inc., 236
F.3d 1061, 1067 (9th Cir. 2001). Joinder is fraudulent where plaintiffs “fail[] to
state a cause of action against a resident defendant, and the failure is obvious
according to the settled rules of the state.” McCabe v. Gen. Foods Corp., 811 F.3d
1336, 1339 (9th Cir. 1987).
Plaintiffs do not dispute that Renesola is a Delaware corporation with its
principal place of business in California, or that the matter in controversy exceeds
$75,000. Because Ramanlal is a citizen of Hawaii—the same state as Plaintiffs—

12

his presence destroys complete diversity, unless the Court agrees that he has been
fraudulently joined, rendering removal proper.
II.

Plaintiffs’ Objection Is Overruled
By their Objections, Plaintiffs insist that they sufficiently state a claim for

“breach of duty to mitigate damages” or “failure to mitigate damages” against
Ramanlal and that his presence in this action destroys diversity. Objections at 4.
The Court disagrees for the reasons that follow.
A.

Fraudulent Joinder

Under the fraudulent joinder doctrine, “[j]oinder of a non-diverse defendant
is deemed fraudulent, and the defendant’s presence in the lawsuit is ignored for
purposes of determining diversity, ‘[i]f the plaintiff fails to state a cause of action
against a resident defendant, and the failure is obvious according to the settled
rules of the state.’” Weeping Hollow Ave. Trust v. Spencer, 831 F.3d 1110, 1113
(9th Cir. 2016) (quoting Morris, 236 F.3d at 1067, and McCabe, 811 F.2d at 1339).
“[W]hile a showing of actual fraud would be sufficient to invoke the doctrine, the
term ‘fraudulent joinder’ is somewhat of a ‘misnomer,’ since in most cases the
focus will be on whether the plaintiff can ‘state a reasonable or colorable claim for
relief under the applicable substantive law against the party whose presence in the
action would destroy the district court’s subject matter jurisdiction.’” Id. at 1113
(quoting 13F C. Wright & A. Miller et al., Fed. Prac. & Proc. Juris. § 3641.1 (3d
13

ed.)); see also Nasrawi v. Buck Consultants, LLC, 776 F. Supp. 2d 1166, 1169-70
(E.D. Cal. 2011) (“[A] non-diverse defendant is deemed fraudulently joined if,
after all disputed questions of fact and all ambiguities in the controlling state law
are resolved in the plaintiff’s favor, the plaintiff could not possibly recover against
the party whose joinder is questioned.”) (citing Kruso v. Int’l Tel. & Tel. Corp.,
872 F.2d 1416, 1426 (9th Cir. 1989)).
A defendant asserting fraudulent joinder bears the burden of overcoming
both the strong presumption against removal jurisdiction as well as the general
presumption against fraudulent joinder. Hunter, 582 F.3d at 1046. Renesola meets
that burden here.
B.

The Court Has Subject Matter Jurisdiction

Plaintiffs’ single cause of action against Ramanlal for “breach of duty to
mitigate damages” fails to state a stand-alone claim for relief. Moreover, this
failure is obvious according to the settled rules of Hawaii. See Morris, 236 F.3d at
1067, and McCabe, 811 F.2d at 1339. “Breach of duty to mitigate damages,” or
“failure to mitigate damages,” is a well-established affirmative defense, not a
viable independent cause of action in the manner pled by Plaintiffs here. See, e.g.,
Tabieros v. Clark Equip. Co., 85 Haw. 336, 373, 944 P.2d 1279, 1316 (1997)
(“[I]n contract or in tort, the plaintiff has a duty to make every reasonable effort to
mitigate his [or her] damages. The burden, however, is upon the defendant to
14

prove that mitigation is possible, and that the injured party has failed to take
reasonable steps to mitigate his [or her] damages.”) (quoting Malani v. Clapp, 56
Haw. 507, 517, 542 P.2d 1265, 1271 (1975) (alterations in Tabieros)); Hawaii
Broad. Co. v. Hawaii Radio, Inc., 82 Haw. 106, 112–13, 919 P.2d 1018, 1024–25
(Ct. App. 1996) (Discussing requirement that affirmative defense of “failure to
mitigate damages” be pled in answer pursuant to Rule 8 where “[t]he primary
purpose of requiring affirmative defenses to be pleaded is to give notice to the
parties of such defenses.”).
Plaintiffs, however, insist that they have alleged a proper claim for relief
against Ramanlal in Count X. To that end, they argue that “as pled in the
Complaint[,] ‘failure to mitigate damages’ is a valid cause of action as it has all the
hallmarks of a claim, including but not limited to a short and plain statement of the
claim, damages sustained by Adon, and a demand for the relief sought.”
Objections at 4. Plaintiffs’ argument misses the mark. Whether their recitation of
the elements of a cause of action “has all the hallmarks of a claim” is not
dispositive of whether the settled law of Hawaii recognizes as viable a stand-alone
cause of action for “breach of duty to mitigate damages.” See, e.g., Nasrawi, 776
F. Supp. 2d at1169-70 (Explaining that the court’s task is to determine whether
joinder is fraudulent, where “disputed questions of fact and all ambiguities in the
controlling state law are resolved in the plaintiff’s favor, the plaintiff could not
15

possibly recover against the party whose joinder is questioned.”). To the contrary,
the settled case law of Hawaii is that the failure to mitigate damages is an
affirmative defense, which Hawaii courts have not recognized as an independent
claim—indeed, Plaintiffs acknowledge as much. See Objections at 3 (“While there
may be no case law on the record identifying ‘failure to mitigate damages’ as a
claim, the facts and circumstances contained on the face of the Complaint assert[]
the required elements pursuant to both FRCP and/or HRCP Rule 8.”). Plaintiffs’
arguments otherwise cannot withstand scrutiny.
As distilled concisely in the F&R, no stand-alone claim exists for failure to
mitigate damages because it is an affirmative defense. See F&R at 8-9 (citing
cases); see also Shahata v. W Steak Waikiki, LLC, 721 F. Supp. 2d 968, 988 (D.
Haw. 2010), aff’d, 494 F. App’x 729 (9th Cir. 2012) (“It is well established that,
whether in contract or in tort, a plaintiff has a duty to make every reasonable effort
to mitigate his damages. Defendant . . . has the burden of showing that mitigation
is possible.”) (citing Malani v. Clapp, 56 Haw. 507, 517, 542 P.2d 1265, 1271
(1975)). This well-settled principle is summarized by Hawaii’s Standard Civil
Jury Instruction on mitigation of damages, which provides that a plaintiff claiming
damages has a duty to mitigate or minimize those damages, and that a defendant
has the burden of establishing the damages which plaintiff could have mitigated.

16

The relevant instruction explains the plaintiff’s duty and the defendant’s burden, as
follows—
Any plaintiff claiming damages resulting from the
wrongful act of a defendant has a duty under the law to use
reasonable diligence under the circumstances to mitigate or
minimize those damages.
If you find plaintiff(s) suffered damages, plaintiff(s) may
not recover for any damages which he/she/it/they could have
avoided through reasonable effort. If you find that plaintiff(s)
unreasonably failed to mitigate or lessen his/her/its/their
damages, you should not award those damages which
he/she/it/they could have avoided.
You are the sole judge of whether plaintiff(s) acted
reasonably in mitigating his/her/its/their damages. Plaintiff(s)
may not sit idly by when presented with a reasonable
opportunity to reduce his/her/its/their damages. However,
plaintiff(s) is/are not required to exercise unreasonable efforts
or incur unreasonable expenses in mitigating his/her/its/their
damages. Defendant(s) has/have the burden of proving the
damages which plaintiff(s) could have mitigated.
You must consider all of the evidence in light of the
particular circumstances of the case in deciding whether
defendant(s) have satisfied his/her/its/their burden of proving
that plaintiff’s(s’) conduct was not reasonable.
Hawaii Civil Jury Instruction No. 8.18 (1999).5

5

In breach of contract actions, a specific jury instruction on mitigation of damages similarly
provides:
CONTRACT - MITIGATION OF DAMAGES
The law requires any plaintiff claiming damages resulting from a
breach of contract to use reasonable efforts under the circumstances to
avoid or minimize those damages.
17

Although Plaintiffs may have plausible claims against Ramanlal,6 a standalone cause of action for “breach of duty to mitigate damages” is not one of them.
In sum, Renesola has met its burden of establishing that Plaintiffs’ failure to state a
claim against Ramanlal is obvious under the settled law of the state, that
Ramanlal’s joinder is fraudulent, and that his presence may therefore be ignored
for the purpose of establishing diversity. As a result, this Court has subject matter
jurisdiction and remand is not appropriate.

If defendant(s) prove(s) that plaintiff(s) unreasonably failed to
avoid or minimize his/her/its/their damages, you must not award the
portion of those damages resulting from such failure.
Plaintiff(s) may not sit idly by when presented with a reasonable
opportunity to avoid or minimize his/her/its/their damages. However,
plaintiff(s) is/are not required to exercise unreasonable efforts or incur
unreasonable expenses in avoiding or minimizing his/her/its/their
damages. Defendant(s) has/have the burden of proving the damages
which plaintiff(s) could have avoided or minimized.
You must consider all of the evidence in light of the particular
circumstances of the case in deciding whether defendant(s) has/have
satisfied his/her/its/their burden of proving that plaintiff(s) unreasonably
failed to avoid or minimize his/her/its/their damages. You are the sole
judge of whether plaintiff(s) acted reasonably in avoiding or minimizing
his/her/its/their damages.
Hawaii Civil Jury Instruction No. 15.11 (1999, Am. 2002).
6

Indeed, Adon has already alleged affirmative claims against Ramanlal in the Ramanlal State
Court Case, including breach of contract and unjust enrichment. See Ramanlal State Court Case
Counterclaim ¶ 49 (Dkt. No. 1-4) (Alleging Counterclaim for breach of contract against
Ramanlal for “refusing to allow [a] Renesola engineer access to the worksite to verify if there is
a possible defect and warranty issue, and therefore interfered with [Adon’s] performance on
delivery of a satisfactory product per contract requirements.”).
18

Upon de novo review of the F&R and consideration of the parties’
submissions, the Court overrules Plaintiffs’ Objections and adopts the F&R’s
recommendation to deny the Motion to Remand.
CONCLUSION
For the foregoing reasons, the Court ADOPTS the Findings and
Recommendation to Deny Plaintiffs Adon Construction Inc. and Green Vision
LLC’s Motion to Remand Matter Back to the First Circuit Court of the State of
Hawaii and OVERRULES Plaintiffs’ Objections.
IT IS SO ORDERED.
DATED: March 6, 2017 at Honolulu, Hawai‘i.

Adon Construction Inc. et al. v. Renesola America Inc. et al.; Civ. No. 16-00568 DKW-RLP;
ORDER ADOPTING FINDINGS AND RECOMMENDATION TO DENY PLAINTIFFS
ADON CONSTRUCTION INC. AND GREEN VISION LLC’S MOTION TO REMAND
MATTER BACK TO THE FIRST CIRCUIT COURT OF THE STATE OF HAWAII

19