Recovery of Hawaii Attorneys Fees (Part 2)

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As we wrote in our previous post regarding HRS § 607-14, “[t]he 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).

Since then, the Hawaii Supreme Court and Intermediate Court of Appeals have elaborated on the types of “quasi contractual obligations” that constitute a claim in the nature of assumpsit that will result in an award of attorneys fees.  Specifically, the Courts have also clarified that a claim for “unjust enrichment” may also be an “action in the nature of assumpsit.”  In Hawaii, “[a] claim for unjust enrichment requires only that a plaintiff prove that he or she ‘confer[red] a benefit upon’ the opposing party and that the ‘retention [of that benefit] would be unjust.” Wagner v. World Botanical Gardens, Inc., 2011 WL 6811263, *11 (Hawai‘i App. 2011) (citations omitted).

In Porter v. Hu, 116 Hawai’i 42 (Hawai‘i App. 2007), a number if insurance agents sued their employer for unjust enrichment.  The agents were fired by the insurance company, but the employer kept the agents’ insurance commissions.  The Agents successfully sued to recover their commissions based on unjust enrichment and were awarded attorneys’ fees based on HRS § 607-14.  The Intermediate Court of Appeals determined that the Plaintiffs’ claim for unjust enrichment was in the nature of assumpsit because the agents and their employer had a “promise implied by law, which arises to prevent one man from being inequitably enriched at another’s expense.”  It thus affirmed the circuit court’s award of attorneys fees under HRS § 607-14.

In contrast, in First Hawaiian Bank v. Lau, 116 Hawai’i 71, 169 (Hawai‘i 2007), the Hawaii Supreme Court determined that the plaintiff’s successful claim for unjust enrichment was not in the nature of assumpsit and denied attorneys fees.  In Lau, the defendant requested a transfer from her elderly mother’s account into a bank account that she jointly held with her mother.  First Hawaiian Bank mistakenly transferred money from the wrong account into the defendant’s bank account.  The defendant was unaware that the money transferred into her account was from the wrong account and used the money.  Plaintiff First Hawaiian Bank successfully sued to recover the money transferred under an unjust enrichment theory.  Nevertheless, First Hawaiian Bank was denied attorneys fees.  In affirming the denial, the Hawaii Supreme Court stated that even though the defendant was unjustly enriched, this did not “give rise to a contract claim and FHB did not prove that any type of contract or agreement existed between the parties to create an obligation between them.”

In their recent rulings the Hawaii Supreme Court and Intermediate Court of Appeals have clarified that while unjust enrichment can be a “quasi contractual obligation,” there must still exist some agreement “between the parties to create an obligation between them” in order for the claim to be “in the nature of assumpsit.”

Recently, the collection of attorneys fees in arbitrations has been clarified by the Intermediate Court of Appeals in Kona Village Realty, Inc. v. Sunstone Realty Partners, XIV, LLC, 121 Hawai’i 110, 214 P.3d 1100 (Hawai‘i App. 2009).  This will be the subject of our next blog.