Wednesday, August 15, 2012

ICA: Equitable Contribution Action not in Nature of Assumpsit (so no Fees)

Kim v. Kam (ICA August 10, 2012)

Background. Robert Kim, Nancy Kam, and others entered into an attorney-client contract with Matthew Pyun to represent them in bringing an action against their older brother and his handling of their deceased mother's property. Under the contract, Pyun was paid $45,000 and 25% contingency of any amount received through settlement, judgment, or award. The case settled. Based on the value of the recovered property, Pyun sent a bill of $917,529.12 to the parties. When they failed to pay, Pyun sued them. The court ultimately entered judgment against the parties and for Pyun. They ended up settling with Pyun for $767,000. They agreed that as long as they complied with the settlement, Pyun would agree not to enforce the judgment. If the parties breached the settlement agreement, however, the judgment would be immediately enforceable. Kam and the others paid Pyun only $736,000.

Years later, Kim tried to refinance the property, but discovered that Pyun put a lien against it. Kim interpreted the lien as a breach of the settlement agreement. Kim sued Pyun. Pyun prevailed. Ultimately, he was awarded $220,268.05. Kim then filed a complaint against Kam et al.--this case--seeking equitable contribution for payment of the judgment. Some defendants filed motions to dismiss or judgment on the pleadings. They were granted. The defendants sought attorneys' fees and costs in the amount of $17,517.58. The circuit court awarded the defendants and entered judgment against Kim. Kim appealed.

Award of Attorneys' Fees "in all Actions in the Nature of Assumpsit." Absent a statute or contract, each party is generally responsible for his or her own fees and costs. Ranger Ins. Co. v. Hinshaw, 103 Hawai'i 26, 31, 79 P.3d 119, 124 (2003). However, one statutory exception comes from HRS § 607-14. "[I]n all actions in the nature of assumpsit . . . there shall be taxed as attorneys' fees, t be paid by the losing party . . ., a fee that the court determines to be reasonable[.]" HRS § 607-14. Assumpsit permits "the recovery of damages for the non-performance of a contract, either express or implied written or verbal, as well as quasi contractual obligations." Leslie v. Estate of Tavares, 93 Hawai'i 1, 5, 994 P.2d 1047, 1051 (2000). "When the recovery of money damages is not the basis of a claim factually implicating a contract, the action is not in the nature of assumpsit." Id. at 7, 994 P.2d at 1053. Furthermore, claims of rescission and restitution are considered actions in the nature of assumpsit. Hong v. Kong, 5 Haw. App. 174, 683 P.2d 833 (1984). Equitable claims of unjust enrichment are also "in the nature of assumpsit." Porter v. Hu, 116 Hawai'i 42, 66, 169 P.3d 994, 1018 (App. 2007).

The Nature of Equitable Contribution is not of Assumpsit. Here, Kim sued Kam for equitable contribution. Resorting to cases outside Hawai'i, the ICA noted that this equitable contribution "is the right to recover from a co-obligor that shares liability with the party seeking contribution[.]" Crowley Maritime Corp. v. Boston Old Colony Ins. Co., 70 Cal. Rptr. 3d 605, 608 (2008); Sound Built Homes, Inc. v. Windermere Real Estate/South, Inc., 118 Wash. App. 617, 633-34, 72 P.3d 788, 797 (2003). This right is not founded on an agreement and is not contractual in nature. 18 Am. Jur. 2d Contribution § 4 (2004).

Here, the ICA held that Kim's complaint sought equitable contribution from Kam and the others in paying for his judgment debt to Pyun. The ICA noted that even though Kam and the others became co-obligors through a contract with Pyun, "Kim was not seeking recovery of damages under the contract--there was not contract between Kim and [the] Defendants." Nor was Kim seeking quasi-contractual obligations for unjust enrichment. In short, the ICA held that the fact that the underlying contract and settlements formed the basis for Kim's claim for equitable contribution did not render the claim in the nature of assumpsit. Thus, the trial court abused its discretion in awarding attorneys' fees to Kam and the others.

Finding Assumpsit in Porter v. Hu (but not here). The line between actions in the nature of assumpsit and those that are not is getting harder to discern. Equitable claims are "within the realm of assumpsit" when it is for unjust enrichment. Porter v. Hu, 116 Hawai'i at 66, 169 P.3d at 1018. So how come equitable contribution is not in the nature of assumpsit? True, there are treatises and cases that point in that direction, but it is unclear exactly why the equitable obligation to contribute to a debt owed--especially a debt flowing from a judgment or contract--is not "in the nature of assumpsit." The ICA cited American States Ins. Co. v. National Fire Ins. Co. of Hartford, 135 Cal. Rptr. 3d 177, 182 (2011). There, the California court noted that "an action for equitable contribution is rooted in equity, not contract." Id. Again, that may be so, but how does this square with Porter v. Hu? Unjust enrichment is rooted in equity, but somehow that is still in the nature of assumpsit. So how come equitable contribution isn't?

Furthermore, how close to "assumpsit" does an action have to be to fall within the ambit of HRS § 607-14? Should the court put any significance to the fact that the statute reads "in the nature of assumpsit" rather than "assumpsit"? Does the plain language suggest that actions that are kind of contractual--like unjust enrichment or restitution--in the "nature" of assumpsit even though they are not squarely in assumpsit? And if that is the case, wouldn't equitable contribution be among them? Not so, held the ICA.

Friday, August 10, 2012

Trial Court's Discretion in Limiting Cross Examination must Yield to Confrontation Clause

State v. Levell (HSC August 8, 2012)

Background. Donald Levell was charged with a single count of harassment (HRS § 711-1106(1)(a)) for allegedly shoving Malia Avila. Before trial, Levell moved for permission to cross-examine Avila about an incident in which she allegedly stole Levell's credit cards and used them after he had been arrested for harassment. Levell argued that the incident was a motive for Avila to fabricate the harassment accusation and to testify falsely at trial. The prosecution objected on the grounds that the incident was irrelevant. The district court denied the motion and refused to allow Levell cross-examine Avila about the credit card theft on the grounds that it was "not relevant to the elements of harassment[.]" And although it was evidence of a potential motive for Avila to fabricate her story, the evidence was highly prejudicial because the theft case was still being investigated, and thus, the cross-examination may cause Avila to violate her right against self-incrimination.

At trial, evidence showed that Levell met Avila while he was walking on the beach in Waikiki when he met Avila. Avila told Levell that she had no place to go, that her father was ill, and that she had just arrived from Las Vegas. Levell invited her to stay with him. Avila did not have a cell phone. Levell said that he had three phones and allowed her to use one of them.

Avila testified that on the night in question, she came home from work and saw Levell sitting there drinking. Levell approached her with a cell phone. He wanted to remove the SIM card in her phone and put it in the one he had. He transferred the card as Avila went to the bathroom. When she came back she asked for the card back, but Levell refused. She asked again and at that point, Levell stood up, walked up to her, and pushed her on her chest with open palms. Avila fell and hit her back and ribs on a rattan chair. There were no visible injuries. Avila got up and told Levell that she was calling the police. She went downstairs to the lobby and called the police from a security phone. She was not carrying her phone. The police arrived. When Levell went downstairs he was arrested. After he was taken away, Avila went back up to the apartment to gather her things and never returned to the apartment. She had not seen Levell until the day of trial.

On cross-examination, Avila admitted that when Levell took her phone, he gave her the other phone for her to use. Avila admitted that she did not want the other phone and was upset that he took the original phone away. Levell again renewed his motion to cross-examine her about the stolen credit cards, but the prosecution objected again and the district court sustained the objection.

Levell testified that when Avila came home, he had asked for her SIM card. Levell took the card, put it in another phone, called the new phone to make sure it was working, and gave Avila the working phone. Avila was upset. She asked Levell to return the original phone to her. Levell complied and Avila left the apartment with both phones. Levell went downstairs to find her and saw that she was talking to several police officers. He was arrested. Levell testified that he never had offensive physical contact with Avila or any other woman before.

On cross-examination, the prosecution asked why he was going downstairs. Levell explained that he wanted to find her to tell her that she could not stay in the apartment anymore. The prosecution asked if he was going to kick her out just because of the cell phone incident. Levell said no, he had noticed that she had been stealing things. The prosecution objected (presumably to its own question) and the district court sustained the objection.

The district court found Avila more credible than Levell and found Levell guilty as charged. The ICA affirmed.

The Right to Cross-Examine the Accuser Comes Before Trial Court's Discretion in Limiting Relevant Evidence. The trial court has the discretion to limit relevant evidence and the form of cross-examination. HRE Rule 403 and 611. However, that discretion is not unlimited. "In all criminal prosecutions, the accused shall enjoy the right to . . . be confronted with the witnesses against the accused[.]" Haw. Const. Art. I, Sec. 14; see also U.S. Const. Am. V. The confrontation clause affords the right "to demonstrate bias or motive of prosecution witnesses." State v. Balisbisana, 83 Hawai'i 109, 115, 924 P.2d 1215, 1221 (1996). "[T]he exposure of a witness' motivation in testifying is a proper and important function of the constitutionally protected right of cross examination." Id. According to the HSC, the trial court can limit cross-examination "only after the constitutionally required threshold level of inquiry has been afforded the defendant." Id. at 114, 924 P.2d at 1220.

Evidence of Bias, Interest, of Motive--no Matter how Weak--is Relevant. Moreover, "the credibility of a witness may be attacked by evidence of bias, interest, or motive." HRE Rule 609.1(a). This kind of evidence is always relevant. State v. Estrada, 69 Haw. 204, 220, 738 P.2d 812, 823 (1987). The HSC noted that the inquiry is not the degree to which the evidence may show possible bias, interest, or motive. That goes to the weight. Adopting Professor Bowman's treatise, the HSC explained that "the relevant inquiry is whether such evidence has 'any tendency to support an inference of the witness' disposition or tendency, consciously or unconsciously, to slant testimony, one way of the other, from the straight and true.'" Addison M. Bowman, Hawai'i Rules of Evidence Manual § 609.1-[1][C] (2010-11 ed.). And once this evidence has been established, "it is error not to allow cross-examination to reveal possible bias." State v. Estrada, 69 Haw. at 220, 738 P.2d at 823.

Trial Court Erred in Refusing Levell to Cross-Examine Avila About Stolen Credit Cards. The HSC held that the trial court erred in concluding that the evidence about potentially stolen cards by Avila were irrelevant. It was clear that the evidence was intended to show bias, interest, or motive to fabricate her claims of harassment against Levell. It was also clear that Levell had a constitutional right to cross-examine Avila about possible fabrications.

. . . And the Error was not Harmless Beyond a Reasonable Doubt. Denial of the constitutional right to cross-examine is subject to harmless error review. Balisbisana, 83 Hawai'i at 117, 924 P.2d at 1223. A conviction will not be overturned if the court commits an error that is harmless beyond a reasonable doubt. State v. Veikoso, 125 Hawai'i 126, 135, 270 P.3d 997, 1006 (2011). The error cannot be considered harmless "if there is a reasonable possibility that [the] error might have contributed to the conviction." Id. To determine harmlessness, the court will review the entire record and consider a variety of factors, including "the importance of the witness' testimony in the prosecution's case, whether the testimony was cumulative, the presence or absence of evidence corroborating or contradicting the testimony of the witness on material points, the extent of cross-examination otherwise permitted, and, of course, the overall strength of the prosecution's case." Balisbisana, 83 Hawai'i at 117, 924 P.2d at 1223.

According to the HSC, Avila's testimony was "central" to the prosecution's case. The allegations of credit card theft were not cumulative to any testimony introduced at trial. Nothing directly corroborates Avila's testimony and, thus, evidence of bias, motive, or interest "would have been particularly helpful in assessing" Avila's credibility. And although cross examination was permitted, questions about the credit card were summarily excluded. The HSC held that the error was not harmless beyond a reasonable doubt. The case was remanded for a new trial.

Wednesday, August 1, 2012

Knowing About Contraband and Having the Ability to Control or Exercise Dominion over it does not Presume Intent to do that.

State v. Foster (HSC July 31, 2012)

Background. One summer's night near Kaupo--a remote part on the East side of Maui--DLNR officers were patrolling for unlawful night hunting when they noticed a bright light roving back and forth. The officers caught up to the light and found a 4Runner. Foster was in the driver's seat and Malano was riding shotgun. Wendy Gonsalves and Malia Saunders were sitting in the backseat. The officers approached the vehicle and saw an ammunition clip between the driver's seat and the passenger's seat. All four were ordered out of the vehicle.

As the women got out from the backseat, the front passenger's seat slid forward. One of the officers saw a rifle under the seat. During the stop, the officers confirmed that the vehicle was registered to Foster and that Saunders was wanted on a warrant. Foster was arrested and gave a statement.

Foster told the police that he had picked up Malano earlier that night and he had a black ukulele case. The men picked up the women and headed toward Kaupo. Once they got near Kanaio, they pulled over to the side of the road to take a break. Malano took out a MAK-90 out of the ukulele case and fired off a few rounds at an abandoned boat on the side of the road. They got back into the car and started driving out toward town. Gonsalves held the gun for a little while in the backseat.

Foster was indicted with offenses related to the prohibited ownership or possession of a firearm. HRS §§ 134-7(b) and (h). At trial and after the prosecution rested, Foster moved for judgment of acquittal. The motion was denied. During deliberation, the jury asked the judge if "possession [was] determined by just being present with the object[.]" The circuit court responded with the following instruction:

A person is in possession of an object if the person knowingly procured or received the thing possessed, or was aware of his control of it for a sufficient period of time to have terminated his possession.

The law recognizes two kinds of possession, actual possession and constructive possession. A person who, although not in actual possession, knowingly has both the power and the intention at a given time to exercise dominion or control over a thing for a sufficient period of time to terminate his possession of it, either directly or through another person or persons, is then in constructive possession of it.

The fact that a person is near an object or is present or associated with a person who controls an object, without more, is not sufficient to support a finding of possession.

The law requires also that possession may be sole or joint. If one person alone has actual or constructive possession of a thing, possession is sole. If two or more persons share actual or constructive possession of a thing, possession is joint.

The element of possession has been proved if you find beyond a reasonable doubt that the defendant had actual or constructive possession, either solely or jointly with others.

The jury found Foster guilty as charged. Foster renewed his motion for acquittal. The circuit court concluded that there was insufficient evidence to show that Foster had the requisite intent to exercise dominion or control over the firearm and/or ammunition, and granted the motion. The prosecution appealed. The ICA, in a summary disposition order, held that the circuit court erred in granting the motion and reinstated the jury verdict. Foster applied for a writ of cert.

Actual and Constructive Possession in Hawai'i. Possession may either be actual or constructive. "A person who knowingly has direct physical control over a thing at a given time is then in actual possession of it. A person who, although not in actual possession, knowingly has both the power and the intention at a given time to exercise dominion over a thing, either directly or through another person or persons, is then in constructive possession." State v. Jenkins, 93 Hawai'i 87, 110, 997 P.2d 13, 36 (2000).

"To support a finding of constructive possession the evidence must show a sufficient nexus between the accused and the [item] to permit an inference that the accused had both the power and the intent to exercise dominion and control over the [item]. Mere proximity is not enough." State v. Moniz, 92 Hawai'i 472, 476, 992 P.2d 741, 745 (App. 1999). Furthermore, finding constructive possession requires an evaluation of certain factors and circumstances:

Proof of the defendant's knowledge of the presence of [the item] and the defendant's ownership of right to possession of the place where the [items] were found, alone, are insufficient to support a finding of the exercise of dominion and control. Other incriminating circumstances must be present to buttress the inference of knowing possession and provide the necessary link between a defendant and illegal [items].

Id. at 476-77, 992 P.2d at 745-46.

Defendant's Knowledge that a Firearm and Ammo were in his car and the Ability to Control and Exercise Dominion over it is not Enough. The HSC held that there was sufficient evidence that Foster knew a firearm and ammo were in his car. The moment Malano took the gun out of the ukulele case and started firing it into the darkness, Foster knew about the gun, its ammo, and one could infer that he could have exercised dominion and control over them. However, that alone does not presume Foster's criminal intent "to make use of that knowledge and ability." Moniz, 92 Hawai'i at 479, 992 P.2d at 748. The HSC formulated the rule differently: "intent to exercise dominion and control over the items must thus be proven in addition to knowledge of the items and power to exercise dominion and control over them."

There was no Evidence Showing that Foster had the Intention to Exercise Dominion and Control. The HSC moved on and held that the prosecution failed to show any evidence that Foster had the intent to exercise dominion and control over the gun and ammo.

In Moniz, the ICA examined constructive possession of a scale as drug paraphernalia and marijuana found in apartment shared by husband and wife. The ICA held that even though they had lived together and even though the wife--Juliet Moniz--saw and could have used the scale and marijuana, there was no evidence establishing her intent to do just that. Similarly, in State v. Brown, 97 Hawai'i 323, 326, 37 P.3d 572, 585 (App. 2001), the ICA examined whether the defendant had constructive possession of a "burglar's tools." There, a van stolen from a seafood distributor crashed into a wall. When the police showed up, they found the defendant and a backpack on the floor of the van with bolt cutters in it. The ICA held that a jury could infer that the backpack was not part of the seafood distributor and that it must have come from the person who stole the van in the first place.

Here, the HSC held that Foster's case is akin to Moniz and distinguishable from Brown. The gun and ammo were known to Foster and he could have taken hold of it. But he didn't. That knowledge and ability alone was not enough to show constructive possession. And unlike the defendant in Brown, there was no evidence that Foster and Malano planned to go deer hunting or pleasure shooting out in Kaupo. Finally, the HSC turned to two federal cases to support its holding that merely being the driver is not enough to show a joint venture into criminal activity. See United States v. Crain, 33 F.3d 480, 486 (5thCir. 1994) ("when two or more people are occupying a place, a defendant's control over the place is not by itself enough to establish constructive possession of contraband found there."); United States v. Wright, 24 F.3d 732, 735 (5th Cir. 1994) ("while dominion over the vehicle certainly will help the government's case, it alone cannot establish constructive possession of a weapon found in the vehicle, particularly in the face of evidence that strongly suggests that somebody else exercised dominion and control over the weapon.").

In the end, the HSC vacated the ICA's judgment and reinstated the order of acquittal.

Justice Acoba's Concurrence. Justice Acoba agreed with the majority that there was no evidence establishing that Foster intended to exercise dominion and control over the gun and ammo. However, he wrote separately because he did not believe that there was evidence showing that Foster even had the power to exercise dominion and control. Justice Acoba pointed out that there was no evidence that Foster knew what was in the ukulele case when he picked up Malano. Malano at some point got out of the vehicle, fired off the rounds, and got back in. As they drove toward Ulupalakua, Gonsalves was loading the gun. Foster kept driving. For Justice Acoba there was no evidence that Foster touched the gun and ammo or that his access was freely accessible to him.

Proving Intent is Never Easy. Mere presence to an item is not enough to show possession of that item. Moreover, the HSC made it clear that knowing about the item and having the ability to possess it is not enough to show intent to possess. Something more is needed. So what would prove it?

Prosecutors have to wrestle with this question in not only firearms cases, but cases involving drugs, unlawful fishing/hunting, and even stolen property. Each case presents a different set of circumstances and challenges.