Under the American Rule, each litigant pays its own attorneys fees. I have been practicing civil litigation for over twenty years, and nothing seems to anger clients more about the American legal system than when they are forced to pay thousands of dollars in attorneys fees and costs simply to prove that they didn’t do anything wrong. Fortunately, under Hawaii law, in certain commercial cases, the prevailing party may recover some or all of its attorneys fees from the losing party. HRS § 607-14, states as follows:

§607-14 Attorneys’ fees in actions in the nature of assumpsit, etc. In all the courts, in all actions in the nature of assumpsit . . . there shall be taxed as attorneys’ fees, to be paid by the losing party and to be included in the sum for which execution may issue, a fee that the court determines to be reasonable . . . . The court shall then tax attorneys’ fees, which the court determines to be reasonable, to be paid by the losing party; provided that this amount shall not exceed twenty-five per cent of the judgment.
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The above fees provided for by this section shall be assessed on the amount of the judgment exclusive of costs and all attorneys’ fees obtained by the plaintiff, and upon the amount sued for if the defendant obtains judgment.

Haw. Rev. Stat. § 607-14 (emphasis added).

There are certain key points regarding this statute about which each client should be made aware, including the following:

1. Plaintiff’s recovery of attorneys fees is capped at twenty five percent (25%) of the judgment awarded. Thus, for example, if the plaintiff is awarded a judgment of $100,000, the plaintiff’s recovery is capped at 25% of $100,000 or $25,000.

2. The defendant’s recovery is capped at 25% of the damages unsuccessfully sought by plaintiff. Thus, for example, if the plaintiff seeks $100,000, the defendant’s potential award is capped at $25,000.

3. If the plaintiff doesn’t specify the amount that he is seeking and it is impossible for the Court to determine the damages sought by the plaintiff, the prevailing defendant may be awarded all of its reasonable attorneys fees. Thus, the plaintiff is highly encouraged to specify early in the case the damages that plaintiff is seeking to ensure that if the plaintiff is unsuccessful, the attorneys fees award is capped.

4. The Hawaii Supreme Court has held that the attorneys fees award under HRS § 607-14 is not discretionary. The Court must award attorneys fees to the prevailing party.

5. The statute only applies to cases concerning “assumpsit” damages. The Hawaii Supreme court has defined an “assumpsit” case as a claim “for the recovery of damages for the non performance of a contract . . . as well as quasi contractual obligations.” Schulz v. Honsador, Inc. 67 Haw. 433 (1984). Although this law only applies to matters of “assumpsit,” it has been applied to various types of litigation including breach of contract, breach of fiduciary duty, and legal malpractice so long as they concern (i) an attempt to recover damages and (ii) a contractual arrangement.

Unfortunately, Hawaii does not have a similar attorneys fee provision in personal injury cases. Moreover, although HRS § 607-14 is not the only Hawaii law that allows for the recovery of attorneys fees. Therefore, when analyzing a case, a Hawaii attorney should also explore other theories that may allow the recovery of attorneys fees. Those theories will be discussed in subsequent entries of this blog.

In certain cases, clients can prevail in a case by filing a Motion for Summary Judgment.

Under Rule 56(c) of the Hawaii Rules of Civil Procedure, summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Summary judgment can be defeated if a party shows that a genuine and material issue of fact is in dispute, State v. Midkiff, 49 Haw. 456, 421 P.2d 550 (1966).

[S]ummary judgment is only 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 a judgment as a matter of law. See Hawaii Rules of Civil Procedure ( HRCP) Rule 56(c) (1990). “A fact is material if proof of that fact would have the effect of establishing or refuting one of the essential elements of a cause of action or defense asserted by the parties.” Hulsman v. Hemmeter Dev. Corp., 65 Haw. 58, 61, 647 P.2d 713, 716 (1982) (citations omitted). Konno v. County of Hawaii, 85 Hawaii, 61, 70, 937 P.2d 397, 406 (1997) (quoting Dunlea v. Dappen, 83 Hawaii 28, 36, 924 P.2d 196, 204 (1996)).

“The evidence must be viewed in the light most favorable to the non-moving party.” State ex rel. Bronster v. Yoshina, 84 Hawaii 179, 186, 932 P.2d 316, 323 (1997) (citing Maguire v. Hilton Hotels Corp., 79 Hawai'i 110, 112, 899 P.2d 393, 395 (1995)). “[W]e must view all of the evidence and the inferences drawn therefrom in the light most favorable to [the party opposing the motion].” Maguire, 79 Hawaii at 112, 899 P.2d at 395 (citation omitted). State Farm Mutual Automobile Insurance Co. v. Murata, 88 Hawaii 284, 287-88, 965 P.2d 1284, 1287-88 (1998) (citation omitted) (brackets in original); See also United States Steel Corp., 82 Hawaii at 38-39, 919 P.2d at 300-01.

“The moving party bears the ultimate burden of persuasion. This burden always remains with the moving party and requires the moving party to convince the court that no genuine issue of material fact exists and that the moving party is entitled to summary judgment as a matter of law.” Pioneer Mill Co., Ltd. v. Dow, 1999 WL 174460, 6 (Haw. 1999). “The moving party’s burden of proof is a stringent one, since the inferences to be drawn from the underlying facts alleged in the relevant materials considered by the court in deciding the motion must be viewed in the light most favorable to the non-moving party.” Id. at 7. “Summary judgment is a drastic remedy. To avoid improperly depriving a party to a lawsuit of the right to a trial on disputed factual issues, summary judgment must be “cautiously invoked.” Id. at 6.

Although Courts grant summary judgment in only the strongest cases, for obvious reasons, its an outcome that we are always trying to achieve.

Hawaii Revised Statutes § 480-2 provides a powerful tool to protect investors or consumers who have been injured by misleading or deceptive advertising. The Hawaii Supreme Court has concluded that if advertising has a “capacity to mislead” it may violate the Hawaii Unfair and Deceptive Trade Practices Act.

The reason this tool is so helpful to investors or consumers is two-fold. First, it is much easier to prove a violation of H.R.S. § 480-2 than it is to prove a claim of fraud. Unlike a fraud claim, to prevail in a H.R.S. § 480-2 case, the victim does not have to demonstrate that the advertiser intended to mislead the consumer. Indeed, the consumer must only demonstrate that the advertising has a “capacity to mislead.” A far easier standard of proof.

The second reason H.R.S. § 480-2 is so important in the protection of Hawaii consumers is the damages that are recoverable. An investor or consumer injured under H.R.S. § 480-2 may recover actual damages trebled (multiplied by three), attorneys fees and costs. Obviously, when faced with the prospect of paying treble damages and attorneys fees, a company in Hawaii should be highly motivated to truthfully advertise its products. As such, H.R.S. § 480-2 is a vital weapon in the fight for truth in advertising.