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

Filing 40

ORDER GRANTING DEFENDANT KIVALU RAMANLAL'S MOTION TO DISMISS re 12 , 38 - Signed by JUDGE DERRICK K. WATSON on 4/4/2017. "For the foregoing reasons, the Court GRANTS Ramanlal's Motion To Dismiss This Action As To Him , With Prejudice." (emt, )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,
Plaintiffs,

CIVIL NO. 16-00568 DKW-RLP

ORDER GRANTING DEFENDANT
KIVALU RAMANLAL’S MOTION
TO DISMISS

vs.
RENESOLA AMERICA INC.; KIVALU
RAMANLAL; et al.,
Defendants.

INTRODUCTION
Defendant Kivalu Ramanlal seeks dismissal of the sole claim asserted
against him by Plaintiffs Adon Construction Inc. (“Adon”) and Green Vision LLC
for “breach of duty to mitigate damages.” Because the Court previously ruled that
under settled state law, Plaintiffs cannot state a claim against Ramanlal for “breach
of duty to mitigate damages,” Ramanlal’s Motion To Dismiss This Action As To
Him, With Prejudice is GRANTED.1

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The Court finds this matter suitable for disposition without a hearing pursuant to Local Rule
7.2(d).

DISCUSSION
I.

Prior Rulings In This Matter
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. 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.
Plaintiffs contracted to install 80 Renesola PV panels on Ramanlal’s
residence in 2013 at a cost of $76,128.00 (“Ramanlal Project”). On December 3,
2014, Ramanlal sued Adon in the First Circuit Court of the State of Hawaii, Civil
No. 14-1-2463-12, demanding a full refund of the contract price, 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
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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, but assert a
single cause of action against Ramanlal for “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
replacement of defective PV panels as a remedy in the Ramanlal State Court Case.2
Complaint ¶ 180.
Renesola removed the case on October 20, 2016, without the consent of
Ramanlal, on the basis of diversity jurisdiction. See Notice of Removal ¶ 25. 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 a January 6, 2017 Findings and Recommendation to Deny
the Motion to Remand (“F&R”), the Magistrate Judge found that Ramanlal was

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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. See Ramanlal State
Court Case Counterclaim ¶ 49, attached as Ex. D to Notice of Removal, Dkt. No. 1-4.
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fraudulently joined because Plaintiffs failed to state a valid claim that was
“obvious under settled Hawaii law,” and hence, his presence as a Hawaii resident
may be ignored for purposes of establishing diversity jurisdiction. See F&R at 2-4,
7-9, Dkt. No. 27.
In its March 6, 2017 Order adopting the F&R, the Court concluded as
follows with respect to the validity of Plaintiffs’ lone claim against Ramanlal:
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 wellestablished 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 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.”).
3/6/17 Order at 14-15, Dkt. No. 31. Following the Court’s March 6, 2017 Order,
Plaintiffs filed their opposition to the instant Motion on March 17, 2017, and
continue to advance the viability of their claim for breach of duty to mitigate
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damages, notwithstanding the Court’s ruling to the contrary. See Pls.’ Mem. in
Opp’n, Dkt. No 34.
II.

Ramanlal’s Motion Is Granted
Ramanlal seeks dismissal with prejudice of the claim asserted against him.

Federal Rule of Civil Procedure 12(b)(6) authorizes the Court to dismiss a
complaint that fails “to state a claim upon which relief can be granted.” The Court
may dismiss a complaint either because it lacks a cognizable legal theory or
because it lacks sufficient factual allegations to support a cognizable legal theory.
Balistreri v. Pacifica Police Dep’t., 901 F.2d 696, 699 (9th Cir. 1988). As clearly
stated in the Court’s prior Order, Plaintiffs fail to state a cognizable claim for relief
under the settled law of Hawaii, and dismissal is therefore appropriate.
Plaintiffs’ arguments to the contrary, see Pls.’ Mem. in Opp’n at 5-12, are
without merit and barred by the law of the case doctrine. See Cape Flattery Ltd. v.
Titan Mar. LLC, 2012 WL 3113168, at *5 (D. Haw. July 31, 2012) (“Under the
‘law of the case’ doctrine, a court is ordinarily precluded from reexamining an
issue previously decided by the same court, or a higher court, in the same case.”)
(citing United States v. Jingles, 682 F.3d 811, 816–17 (9th Cir. 2012) (additional
citations and quotation signals omitted)); see also United States v. Park Place
Assoc., 563 F.3d 907, 925 (9th Cir. 2009) (stating that “when a court decides upon
a rule of law, that decision should continue to govern the same issues in subsequent
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stages in the same case”) (citations and quotation signals omitted). For the
doctrine to apply, the issue in question must have been “decided explicitly or by
necessary implication in the previous disposition.” United States v. Lummi Indian
Tribe, 235 F.3d 443, 452 (9th Cir. 2000). Because the March 6, 2017 Order
determined that Plaintiffs failed to state an affirmative claim for relief against
Ramanlal, the Court finds that the law of the case doctrine precludes Plaintiffs
from re-asserting the merits of the same non-existent claim for breach of duty to
mitigate damages.
The Court repeats its previous conclusion that no stand-alone claim exists
for failure to mitigate damages because it is an affirmative defense. See 3/6/17
Order at 14-18; 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)). Plaintiffs offer no serious argument to the contrary.
Because amendment of the claim would be futile, dismissal is without leave to
amend.3 Ramanlal’s Motion is accordingly GRANTED.

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Because the Court finds that Plaintiffs fail to state a claim against Ramanlal, the Court does not
reach the alternative basis for dismissal raised in the Motion, that—even assuming such a claim
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CONCLUSION
For the foregoing reasons, the Court GRANTS Ramanlal’s Motion To
Dismiss This Action As To Him, With Prejudice.
IT IS SO ORDERED.
DATED: April 4, 2017 at Honolulu, Hawai‘i.

Adon Construction Inc. et al. v. Renesola America Inc. et al.; Civ. No. 16-00568 DKW-RLP;
ORDER GRANTING DEFENDANT KIVALU RAMANLAL’S MOTION TO DISMISS

existed—Plaintiffs were required to assert it in the Ramanlal State Court Case as a compulsory
counterclaim pursuant to Hawaii Rule of Civil Procedure 13(a).
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