Advanced Air Conditioning, Inc. v. Smith

134 Hawai'i 180

339 P.3d 534 (Table)

ADVANCED AIR CONDITIONING, INC., Plaintiff–Appellee/Cross–Appellant

v.Gordon SMITH, Defendant–Appellant/Cross–Appellee.

No. CAAP–12–0000214.

Intermediate Court of Appeals of Hawai‘i.

Dec. 10, 2014.

Brandee J.K. Faria, Michelle L. Premeaux, (Perkin & Faria LLLC), on the briefs, for Defendant–Appellant/Cross–Appellee.

Ann C. Kemp, Gary W.K. Au Young, on the briefs, for Plaintiff–Appellee/Cross–Appellant.

NAKAMURA, C.J., LEONARD and GINOZA, JJ.

SUMMARY DISPOSITION ORDER

Defendant–Appellant/Cross–Appellee Gordon Smith (Smith) appeals from the “Findings of Fact; Conclusions of Law; Order” (FOF/COL) filed on December 30, 2011, and the Judgment filed on February 22, 2012, in the District Court of the First Circuit, Honolulu Division (district court).¹ Smith also challenges the “Order Denying Defendant's Motion for Summary Judgment as Plaintiff's Claims are Barred by the Statute of Limitations and. Laches” filed on April 29, 2011, and the district court's denial of “Defendant's Motion in Limine as to Plaintiff's Expert Witness Cedric Chong's Report Paragraphs 3 and 4.”

This case arises from Plaintiff–Appellee/Cross–Appellant Advanced Air Conditioning, Inc.'s (Advanced Air) complaint against Smith seeking payment for air conditioning materials, labor, and services provided during the construction of Smith's home. In the FOF/COL, the district court ordered judgment to be entered in favor of Advanced Air and against Smith in the amount of $17,835, dismissed Smith's counterclaims with prejudice, and awarded Advanced Air reasonable attorneys' fees and costs.

In his points of error, Smith contends the district court erred by (1) denying Smith's motion in limine; (2) entering its findings of fact (FOF) and conclusions of law (COL) which found that Advanced Air completed installation of the air conditioning system in April 2005 and thus concluding that Advanced Air's claims are not barred by the statute of limitations or the doctrine of laches; (3) denying Smith's motion for summary judgment; (4) entering judgment in favor of Advanced Air; and (5) concluding that Advanced Air did not engage in unfair or deceptive trade practices.²

Advanced Air cross-appeals from the Judgment and the district court's January 26, 2012 order partially granting “[Advanced Air's] Non–Hearing Motion for Attorney's Fees, Costs and Prejudgment Interest.” Advanced Air contends that the district court abused its discretion by (1) denying prejudgment interest, and (2) declining to award expert witness costs and all of the requested attorneys' fees.³

Upon careful review of the record and the briefs submitted by the parties and having given due consideration to the arguments advanced and the issues raised by the parties, as well as the relevant statutory and case law, we resolve the parties' points of error as follows and affirm.

Smith's Appeal

(1) Motion in Limine Smith contends that the district court erred by denying his motion in limine and admitting into evidence two paragraphs from Advanced Air's exhibit 29, a report from Advanced Air's expert witness, Cedric Chong (Chong). Smith contends that paragraphs 3 and 4 of Chong's report contained inadmissible hearsay.⁴

The district court admitted the report into evidence pursuant to Hawaii Rules of Evidence (HRE) Rule 703 over Smith's hearsay objection. “[T]he trial court's decision whether to disallow expert testimony under HRE Rule 703 involves a judgment call and is therefore reviewed for abuse of discretion.” Tabieros v. Clark Equipment Co., 85 Hawai‘i 336, 383, 944 P.2d 1279, 1326 (1997) (citation and internal quotation marks omitted). “The trial court abuses its discretion when it clearly exceeds the bounds of reason or disregards rules or principles of law or practice to the substantial detriment of a party litigant.” Id. at 351, 944 P.2d at 1294 (citation and internal quotation marks omitted).

Smith does not challenge on appeal admission of the disputed paragraphs under HRE 703, only asserting that paragraphs 3 and 4 contain hearsay and do not qualify for an exception under HRE Rule 803. Smith thus waives any argument related to HRE 703. Moreover, it appears that paragraphs 3 and 4 were properly admitted under HRE 703. HRE Rule 703 specifically permits expert witnesses to form their opinions based on facts or data that need not be admissible, as long as such evidence is “of a type reasonably relied upon by experts in the particular field[,]” and does not indicate a lack of trustworthiness. See Tabieros, 85 Hawai‘i at 386–87, 944 P.2d at 1329–30 (noting that an expert witness may reveal data upon which they have actually and reasonably relied in forming opinions as long as the evidence does not indicate a lack of trustworthiness). Phone calls that Chong, a mechanical engineer, had with the project manager appear to be evidence “of a type reasonably relied upon” by mechanical engineers and the phone calls do not indicate a lack of trustworthiness. Therefore, the district court did not abuse its discretion.

(2) Motion for Summary Judgment Smith contends that the district court erred in denying his motion for summary judgment because, even when viewing the evidence in the light most favorable to non-movant Advanced Air, Advanced Air's claims were barred by the statute of limitations and the doctrine of laches.

The appellate courts review “the [trial] court's grant or denial of summary judgment de novo.” Querubin v. Thronas, 107 Hawai‘i 48, 56, 109 P.3d 689, 697 (2005).

[S]ummary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law, ... The evidence must be viewed in the light most favorable to the non-moving party. In other words, we must view all of the evidence and the inferences drawn therefrom in the light most favorable to the party opposing the motion.

Id. (quoting Durette v. Aloha Plastic Recycling, Inc., 105 Hawai‘i 490, 501, 100 P.3d 60, 71 (2004) ). Additionally, the statute of limitations and the doctrine of laches are both affirmative defenses for which the defendant carries the burden of proof. See Hawai‘i Rules of Civil Procedure (HRCP) Rule 8(c) ; U.S. Bank Nat'l Ass'n v. Castro, 131 Hawai‘i 28, 41, 313 P.3d 717, 730 (2013) (“Generally, the defendant has the burden of proof on all affirmative defenses, which includes the burden of proving facts which are essential to the asserted defense.” (Citation and internal quotation marks omitted)).

The statute of limitations for actions to recover any debt founded upon a contract is six years. Hawaii Revised Statutes (HRS) § 657–1 (1993).⁵ The contract in this case provided that “[p]ayment will be made promptly upon completion of task.” Smith contends that Advanced Air did one-half of the work in 2003 and then “walked off the job.” Alternatively, Smith argues that, even viewing the evidence in the light most favorable for Advanced Air, the latest date its work could have been completed was in April 2004 before Smith moved into the residence, and yet Advanced Air filed suit in May 2010, more than six years thereafter. Smith contends that there is no genuine issue of material fact because Advanced Air presents no substantial evidence supporting the conclusion that installation was completed in 2005.

In support of his motion for summary judgment, Smith submitted a declaration in which he attested that by late 2003, only half of the installation was complete; Advanced Air ignored his repeated requests to complete the installation, essentially walking off the job; he was forced to hire a new company to complete the installation prior to February 2004; he began occupancy of the home in April 2004; and he never received a final invoice in 2005 from Advanced Air, which in turn, is in no way evidence of completion of the installation.

In opposing the summary judgment motion, Advanced Air provided the declaration of John Aguada (Aguada), president and an owner of Advanced Air, in which he attested that the last work performed by Advanced Air was in April 2005, and that it was Advanced Air's standard business practice to send a bill upon completion of the job and to offer the customer an agreement to service the equipment. Submitted with Aguada's declaration were the April 2005 invoice and a proposed service maintenance contract dated May 25, 2005. The counter evidence submitted by Advanced Air raised genuine issues of material fact, including when Advanced Air's services were allegedly completed and thus when any alleged breach by Smith occurred. “[I]f the evidence presented on the motion is subject to conflicting interpretations, or reasonable men might differ as to its significance, summary judgment is improper.” Makila Land Co. v. Kapu, 114 Hawai‘i 56, 67, 156 P.3d 482, 493 (App.2006) (block quote format altered; citation omitted). The district court did not err in denying Smith's motion for summary judgment.

In the alternative, Smith asserts the district court should have granted summary judgment because Advanced Air's claims were barred by the doctrine of laches.⁶ Assuming a laches argument is appropriate for summary judgment, a party claiming laches must demonstrate prejudice from any delay. Adair v. Hustace, 64 Haw. 314, 321, 640 P.2d 294, 300 (1982).

Smith asserts that the prejudice suffered is the loss over time of documentation that would demonstrate the statute of limitations had lapsed. This argument is without merit. Smith points to Advanced Air's inability due to the passage of time to produce evidence showing when work was completed. It is unclear how this would prejudice Smith, but in any event Advanced Air did claim to have evidence showing when work was completed. The only lost defense evidence Smith cites is evidence demonstrating he had to hire another company to complete installation. Yet, such...