Commercial Litigation

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Truth in Lending Act in Hawaii

The Truth in Lending Act (TILA) found in 15 U.S.C.A. section 1601, et. seq. was enacted to “protect consumers and promote the ‘informed use of credit.'” Washington v Americquest Mortgage.Co., 2006 WL 1980201, *6 (N.D.Ill., 2006). As such, TILA requires creditors to conspiciously disclose certain terms and costs information prior to a credit transaction. Id. This information includes, but is not limited to, the annual percentage rate and “finance charge,” order of disclosures, and use of different terminology. 15 U.S.C.A. section 1632(a).

Theft of a Corporate Opportunity

We have represented clients alleged to have been involved in a “theft of a corporate opportunity.” As most people know, “a corporate officer or director is under a fiduciary duty of individual loyalty, good faith and fair dealing in conducting corporate business.” Racine v Weisflog, 477 N.W.2d 326, 329 (Wis App., 1991). One of the primary duties is that a corporate officer cannot divert assets of the corporation and use them for the officer’s personal advantage.

Piercing the Corporate Veil in Hawaii

Occasionally, individual defendants try to hide assets by placing them in a corporation. In such cases, the attorney is forced to attempt to “pierce the corporate veil”. The rule at common law was that, “officers, directors or shareholders of a corporation are not personally liable for the tortious conduct of the corporation or its other agents, unless there can be found some active or passive participation in such wrongful conduct by such persons.” Cahill v. Hawaiian Paradise Park Corp., 56 Haw. 522, 526 (1975).

Six Million Dollar Award in Construction Litigation on Kauai

Last month we received an arbitration award and judgment in excess of Six Million Dollars, against a mainland contractor on behalf of a mainland couple victimized while building their dream home on the island of Kauai. We persuaded the Arbitrator to award our clients treble damages pursuant to H.R.S. 480-2, the Hawaii Unfair and Deceptive Trade Practices Act. In awarding treble damages, the Arbitrator found that the contractor committed several Unfair and Deceptive Acts including the following:

Sellers Right to Cure under the Hawaii UCC

Over the past few weeks, I have addressed the sale of goods in Hawaii under the Uniform Commercial Code. Article Two of the Uniform Commercial Code has been adopted in every state (except Louisiana) and governs contracts for the sale of goods. Hawaii has adopted the Uniform Commercial Code. Obviously, the express terms of a contract for the sale of goods will control the manner in which the sale is to be carried out. If the seller tenders goods that are not timely rejected by the buyer, the buyer is obligated to make payment pursuant to the terms of the sales contract.

Rejection of Hawaii Goods Under the UCC

Under the Uniform Commercial Code (“UCC“), a breach of a sales contract may occur when a seller delivers non-conforming goods to the buyer. It is the buyer’s burden of proof to establish this breach once goods are accepted. H.R.S. § 490:2-601. Upon delivery and acceptance of goods, the buyer is obligated to pay the contract price to the seller. H.R.S. § 490:2-401.


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