In re: Arbitration Between Moir Family Limited Partnership and Association of Beachhouse Owners of Kiahuna Plantation

NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
27-NOV-2024
12:22 PM
Dkt. 80 SO

NOS. CAAP-XX-XXXXXXX AND CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

CAAP-XX-XXXXXXX

IN THE MATTER OF THE ARBITRATION BETWEEN MOIR
FAMILY LIMITED PARTNERSHIP, Petitioner-Appellant, and
ASSOCIATION OF BEACHHOUSE OWNERS OF KIAHUNA PLANTATION
(PHASE IIIA and IV), a Hawai#i non-profit association;
MOANA CORPORATION, a California corporation,
Respondents-Appellees
(CASE NO. 5CSP-XX-XXXXXXX)

CAAP-XX-XXXXXXX

IN THE MATTER OF THE ARBITRATION BETWEEN
Peter Baldwin, John Horwitz, Matthew Guard and
George R. Robinson, Co-trustees of the ERIC A. KNUDSEN
TRUST, KVH LLC, CGB PARTNERS, MAKANA PROPERTIES LLC,
MOIR FAMILY LIMITED PARTNERSHIP, AUKAHI FARM LLC,
Jocelyn Knudsen, Trustee of the KNUDSEN IRREVOCABLE TRUST,
dated December 12, 2012; and KAMALI#I FAMILY LIMITED
PARTNERSHIP, Petitioners-Appellants,
and
ASSOCIATION OF BEACHHOUSE OWNERS OF KIAHUNA PLANTATION
(PHASE III-B), a Hawaii non-profit association,
on behalf of 36 separate Lessees for the premises
commonly known as Kiahuna Plantation Phase III-B, and
as more particularly described in the legal descriptions
of the 36 separate Apartment Leases - TMK (4) 2-8-014:018
(Koloa, Kauai, Hawai#i), Respondent-Appellee
(CASE NO. 5CSP-XX-XXXXXXX)

APPEALS FROM THE CIRCUIT COURT OF THE FIFTH CIRCUIT
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SUMMARY DISPOSITION ORDER
(By: Wadsworth, Presiding Judge, and Nakasone and McCullen, JJ.)

These consolidated appeals arise from disputes
concerning two arbitration awards. One award determined the
annual ground rent to be paid to the lessor, Petitioner-Appellant
Moir Family Limited Partnership (MFLP), for Phases III-A and IV
of the Kiahuna Plantation on Kaua#i (the Phase III-A/IV
Arbitration Award). The other award determined the annual ground
rent to be paid to the lessors for Phase III-B1/ of the
development (the Phase III-B Arbitration Award).
Respondent-Appellee Association of Beachhouse Owners of
Kiahuna Plantation (Phase IIIA and IV) (AOBO III-A/IV)
represented the interests of the lessee/sublessor, Respondent-
Appellee Moana Corporation, for certain purposes, and the
interests of the sublessee unit owners in the arbitration related
to Phase III-A and IV (the Phase III-A/IV Arbitration).2/
Respondent-Appellee Association of Beachhouse Owners of Kiahuna
Plantation (Phase III-B) (AOBO III-B) represented the interests
of the lessee unit owners in the arbitration related to Phase
III-B.
In case no. 5CSP-XX-XXXXXXX, MFLP filed a motion to
vacate the February 27, 2019 Phase III-A/IV Arbitration Award or,
in the alternative, for an evidentiary hearing. On June 5, 2020,
the Circuit Court of the Fifth Circuit (Circuit Court) entered an
order denying the motion to vacate, denying the request for an
evidentiary hearing, and confirming the Phase III-A/IV
Arbitration Award (Order Denying Motion to Vacate 1). On July 7,
2020, the Circuit Court entered a final judgment (Judgment 1)

1/
The Phase III-B lessors are Petitioners-Appellants Peter Baldwin,
John Horwitz, Matthew Guard, and George R. Robinson, Co-trustees of the Eric
A. Knudsen Trust; KVH LLC; CGB Partners; Makana Properties LLC; MFLP; Aukahi
Farm LLC; Jocelyn Knudsen, Trustee of the Knudsen Irrevocable Trust, dated
December 12, 2012; and Kamali#i Family Limited Partnership (collectively,
Phase III-B Lessors).
2/
Although the term "Phase IIIA" is not hyphenated in the name of
the corresponding Respondent-Appellee in the CAAP-XX-XXXXXXX caption, it is
hyphenated in the Phase III-A/IV Arbitration Award and in the text of the
July 7, 2020 final judgment referenced below. We thus hyphenate the phrase
throughout this Summary Disposition Order.

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confirming the award.3/ In CAAP-XX-XXXXXXX (the Phase III-A/IV
Appeal), MFLP appeals from the Order Denying Motion to Vacate 1
and Judgment 1.
In case no. 5CSP-XX-XXXXXXX, Phase III-B Lessors filed
a motion to vacate the November 9, 2020 Phase III-B Arbitration
Award. On June 7, 2021, the Circuit Court entered an order
denying the motion to vacate and confirming the Phase III-B
Arbitration Award (Order Denying Motion to Vacate 2). On
September 28, 2021, the Circuit Court entered a final judgment
(Judgment 2) confirming the award and awarding AOBO III-B its
attorneys' fees and costs. In CAAP-XX-XXXXXXX (the Phase III-B
Appeal), Phase III-B Lessors appeal from the Order Denying Motion
to Vacate 2 and Judgment 2.4/
In the Phase III-A/IV Appeal, MFLP raises four points
of error, contending that the Circuit Court erred in: (1)
refusing to vacate the Phase III-A/IV Arbitration Award pursuant
to HRS § 658A-23(a)(2)(A), based on arbitrator Chris Ponsar's
(Ponsar) "evident partiality"; (2) refusing to vacate the award
pursuant to HRS § 658A-23(a)(1), because the award was "procured
by fraud, corruption or undue means"; (3) confirming the award
and entering Judgment 1; and (4) refusing to order an evidentiary
hearing.
In the Phase III-B Appeal, Phase III-B Lessors raise
five points of error, contending that the Circuit Court erred in:
(1) refusing to vacate the Phase III-B Arbitration Award pursuant
to HRS § 658A-23(a)(2)(A), based on arbitrator Ponsar's "evident
partiality"; (2) refusing to vacate the award pursuant to HRS §
658A-23(a)(2)(C), based on the arbitration panel's "misconduct in
rendering an award that fails to meet the requirements of HRS §
466K-6(b)"; (3) refusing to order an evidentiary hearing; (4)

3/
The Honorable Randal G.B. Valenciano entered the Order Denying
Motion to Vacate 1 and Judgment 1.
4/
Phase IIIB Lessors also challenge the Circuit Court's: (1) July 8,
2021 Order Granting [AOBO III-B]'s Petition for Award of Attorneys' Fees and
Costs Pursuant to HRS § 658A-25(c); and (2) September 13, 2021 Order
Establishing [AOBO III-B]'s Attorneys' Fees and Costs (collectively, the Fee
Orders).

The Honorable Randal G.B. Valenciano entered the Order Denying
Motion to Vacate 2, Judgment 2, and the Fee Orders.

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granting AOBO III-B's attorneys' fees and costs; and (5)
confirming the award and entering Judgment 2.
Because these appeals involve related issues and have
overlapping parties, on May 11, 2022, we entered an order
consolidating CAAP-XX-XXXXXXX and CAAP-XX-XXXXXXX under CAAP-20-
0000437.
After reviewing the record on appeal and the relevant
legal authorities, and giving due consideration to the issues
raised and the arguments advanced by the parties, we resolve the
contentions of MFLP and Phase IIIB Lessors as follows.

I. Discussion

MFLP's fourth contention and Phase III-B Lessors' third
contention are dispositive of their respective appeals. They
argue that the Circuit Court erred in not ordering an evidentiary
hearing to determine disputed issues of material fact regarding
whether the respective arbitration awards should have been
vacated. We agree.
The Hawai#i Supreme Court has repeatedly ruled that
"whenever material facts are in dispute in determining whether an
arbitration award should be vacated, the circuit court should
conduct an evidentiary hearing and render findings of fact and
conclusions of law in support of granting or denying a motion to
vacate an arbitration award." Nordic PCL Const., Inc. v. LPIHGC,
LLC, 136 Hawai#i 29, 43, 358 P.3d 1, 15 (2015) (brackets omitted)
(quoting Clawson v. Habilitat, Inc., 71 Haw. 76, 79, 783 P.2d
1230, 1232 (1989)).
In Nordic, a subcontractor challenging an arbitration
award filed a motion to vacate the award on several grounds,
including (1) that the arbitrator acted with evident partiality
by failing to disclose his relationship with a law firm that
represented the opposing general contractor in the arbitration,
and (2) because the award was "procured by corruption, fraud and
other undue means." Id. at 36, 358 P.3d at 8. The general
contractor filed a motion to confirm the award. Id. at 35, 358
P.3d at 7. No evidentiary hearing was held. Id. at 38, 358 P.3d
at 10. The circuit court denied the motion to vacate and granted

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the motion to confirm without explaining its reasoning or
entering findings of fact and conclusions of law. Id. at 38, 43,
358 P.3d at 10, 15. On appeal, the supreme court ruled that
because material facts were in dispute, "the circuit court should
have conducted an evidentiary hearing and rendered findings of
fact and conclusions of law." Id. at 44, 358 P.3d at 16.
Further, because the circuit court did not explain the basis of
its rulings on the record, the supreme court was unable to
determine whether the circuit court erred in denying the
subcontractor's motion to vacate. Id. at 31, 358 P.3d at 3.
Because the supreme court was unable to appropriately review the
circuit court's ruling, it vacated the circuit court's judgment
and related orders confirming the arbitration award and denying
the motion to vacate, and remanded the matter for the circuit
court to conduct an evidentiary hearing and render findings of
fact and conclusions of law. Id.

A. Application to the Phase III-A/IV Appeal
(Case No. 5CSP-XX-XXXXXXX)

In this case, MFLP moved to vacate the Phase III-A/IV
Arbitration Award pursuant to HRS § 658A-23(a) on the grounds
that: (1) Ponsar acted with evident partiality by failing to
disclose his ongoing substantial business relationship with AOBO
III-A/IV's counsel, Bays Lung Rose & Holma (BLRH); and (2)
Ponsar's nondisclosures indicated that the award was procured by
fraud, corruption, or undue means. Alternatively, MFLP requested
an evidentiary hearing in the event the Circuit Court found there
was a genuine issue of material fact as to whether the award
should be vacated on these grounds. MFLP filed declarations and
multiple exhibits in support of the motion.
AOBO III-A/IV opposed the motion, arguing that: (1)
because the three-arbitrator panel reached a unanimous decision,
it could not be overturned; (2) MFLP could not show evident
partiality; and (3) MFLP could not show that the award was
procured through fraud, corruption or undue means. Regarding the
latter argument, AOBO III-A/IV pointed out that HRS § 658A-23
imposes a 90-day deadline after notice of the award to file a

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motion to vacate – here, February 27, 2019 – and that this
deadline had expired about nine months before MFLP filed its
motion to vacate. Under HRS § 658A-23(b), however, this 90-day
deadline does not apply where "the movant alleges that the award
was procured by corruption, fraud, or other undue means, in which
case the motion shall be made within ninety days after the ground
is known or by the exercise of reasonable care would have been
known by the movant." AOBO III-A/IV argued that MFLP "cannot
access the time exception because [MFLP] cannot demonstrate
fraud, corruption, or undue means, and even if it could, [MFLP]
failed to exercise reasonable care because it knew of Mr.
Ponsar's engagements with BLRH's clients years ago." AOBO III-
A/IV filed declarations and exhibits in support of its
opposition.
In its reply, MFLP denied the legal and factual bases
for AOBO III-A/IV's assertions. In particular, MFLP detailed the
alleged undisclosed engagements of Ponsar by BLRH, argued based
on the timeline and exhibits that Ponsar "knowingly conceal[ed]"
his relationship with BLRH, and contended that Ponsar's
"fortuitous participation in an unrelated matter involving MFLP's
counsel" did not discharge his affirmative disclosure
allegations.
In denying the motion to vacate, the Circuit Court
stated in relevant part:

[I]t's not unusual for an attorney to select someone that
they have some kind of working relationship with.
If that would be a basis for excluding a person, an
attorney, from picking some arbitrator, appraiser, or what
have you, then basically the attorney would never be able to
pick someone that they had a working relationship with
because the argument would be well, you had a relationship
with them. You made money and you're hope is you're going
to continue to make money, so that was the concern that I
had.

. . . .
So I don't necessarily view that as a so-called
conflict where the award should be vacated, and so that's
the concern the Court had. Given all of that, the Court is
going to deny the motion to vacate . . . ."

(Emphasis added.)

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The court subsequently entered the Order Denying Motion
to Vacate 1, which stated in relevant part: "The Court hereby
finds that the alleged relationships between . . . Ponsar . . .
and the law firm of [BLRH] or its clients do not rise to the
level of evident partiality or fraud, corruption, or other undue
means[.]" The court also denied MFLP's request for an
evidentiary hearing.
Although the Circuit Court stated its ruling on the
record, it appears to have denied the motion to vacate based on
its conclusion that there was no "conflict," i.e., conflict of
interest, rising to the level of evident partiality or fraud,
corruption, or other undue means. That, however, is not the
relevant standard for determining evident partiality or fraud in
this context, where MFLP argued that Ponsar knowingly concealed
his relationship with BLRH.

In a nondisclosure case, "evident partiality is
established where 'undisclosed facts demonstrate a
reasonable impression of partiality.'" [Noel ]Madamba[
Contracting LLC v. Romero], 137 Hawai#i [1,] 10, 364 P.3d
[518,] 527 [(2015)] (quoting Nordic, 136 Hawai #i at 51, 358
P.3d at 23). "Under this standard, a finding of evident
partiality 'is not dependent on a showing that the
arbitrator was actually biased, but instead stems from the
nondisclosure itself.'" Narayan[ v. Ass'n of Apt. Owners of
Kapalua Bay Condo.], 140 Hawai#i [75,] 84, 398 P.3d [664,]
673 [(2017)](quoting Madamba, 137 Hawai#i at 10, 364 P.3d at
527).

. . . .
The supreme court has held that "a neutral
arbitrator's violation of statutory disclosure requirements
under HRS § 658A-12(a) or (b) 'constitutes "evident
partiality" as a matter of law.'" Narayan, 140 Hawai #i at
85, 398 P.3d at 674 (quoting Nordic, 136 Hawai #i at 50, 358
P.3d at 22).

Ass'n of Apt. Owners of Palm Villas at Mauna Lani Resort v.
Constrx, Ltd., 150 Hawai#i 446, 455-56, 504 P.3d 1034, 1043-44
(App. 2022); see Low v. Minichino, 126 Hawai#i 99, 106-08, 267
P.3d 683, 690-92 (App. 2011) (adopting a three-part test for
determining when fraud constitutes a basis for vacating an
arbitration award). Because the Circuit Court did not directly
address the issues raised in MFLP's motion to vacate, we are
unable to determine whether the court erred in denying the
motion. For example, it is unclear whether the court considered

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and found that Ponsar did not violate his duty to reasonably
investigate, disclose, and continually disclose, and/or did not
knowingly conceal his relationship with BLRH. In any event,
based on the parties' evidentiary submissions, these questions
involve disputed issues of material fact.
AOBO III-A/IV argues that MFLP's motion to vacate was
untimely under HRS § 658A-23(b), and this court must affirm the
Circuit Court's decision on that basis. However, MFLP alleged
that the Phase III-A/IV Arbitration Award was procured by fraud,
corruption, or other undue means, invoking section 658A-23(b)'s
exception to the 90-day deadline for a "motion . . . made within
ninety days after the ground [wa]s known or by the exercise of
reasonable care would have been known by [MFLP]." AOBO III-A/IV
argues that "there is no evidence in the [r]ecord that can
establish . . . Ponsar's intent[,]" and that "[MFLP] had actual
and constructive knowledge of the Clearly Waikoloa engagement and
other matters" that were disclosed. But based on the parties'
evidentiary submissions, these questions involve disputed issues
of material fact.
Where, as here, material facts are in dispute in
determining whether an arbitration award should be vacated, "the
circuit court should conduct an evidentiary hearing and render
findings of fact and conclusions of law in support of granting or
denying [a] motion to vacate the . . . award." Nordic, 136
Hawai#i at 43, 358 P.3d at 15 (quoting Clawson, 71 Haw. at 79,
783 P.2d at 1232). Accordingly, we remand this case to the
Circuit Court to conduct an evidentiary hearing and render
findings of fact and conclusions of law on MFLP's motion to
vacate.

B. Application to the Phase III-B Appeal
(Case No. 5CSP-XX-XXXXXXX)

In this case, Phase III-B Lessors moved to vacate the
Phase III-B Arbitration Award pursuant to HRS § 658A-23(a) on the
grounds that: (1) Ponsar acted with evident partiality by
failing to disclose "he had stood to receive more than $150,000
in compensation from [AOBO III-B]'s counsel[, BLRH,] and failed
to disclose his substantial business history with [BLRH]"; and

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(2) the arbitration panel committed misconduct by rendering an
award that failed to meet the requirements of HRS § 466K-6(b) and
"[to] present the data, analyses, methodologies, and bases for
their decision[.]" The evident partiality contention rested in
part on the argument that Ponsar had concealed his dealings with
BLRH during the Phase III-A/IV Arbitration. Alternatively, the
Phase III-B Lessors requested an evidentiary hearing in the event
the Circuit Court found there was a genuine issue of material
fact as to whether the award should be vacated on these grounds.
The Phase III-B Lessors filed declarations and multiple exhibits
in support of their motion.
AOBO III-B opposed the motion, arguing that: (1) the
arbitration panel "clearly satisfied HRS § 466K-6" by
"provid[ing] 'information regarding' the 'data, methodologies,
and analysis' that formed the basis of the Award'"; (2) Phase
III-B Lessors' "evident partiality and fraud claims against . . .
Ponsar" were "issue precluded" by the court's denial of the
motion to vacate in case no. 5CSP-XX-XXXXXXX; (3) because the
three-arbitrator panel reached a unanimous decision, it could not
be overturned; (4) Phase III-B Lessors could not show evident
partiality; (5) there was no evident partiality because Phase
III-B Lessors knew of Ponsar's engagements with BLRH's clients
and failed to investigate; and (6) Phase III-B Lessors could not
show that the award was procured through fraud, corruption, or
undue means.
In their reply, Phase III-B Lessors denied the legal
and factual bases for AOBO III-B's assertions, based in part on
the relevant evidentiary submissions. Phase III-B Lessors also
clarified that they were not seeking vacatur of the Phase III-B
Arbitration Award due to fraud, corruption, or other undue means.
In denying the motion to vacate, the Circuit Court
stated in relevant part:

[S]o I do have some feeling, maybe a lot, of déjà vu all
over again because some of the arguments are similar in the
initial case that we have.
. . . [S]o the ruling is that the -- based on the
totality of the circumstances, there is insufficient reason
to vacate the arbitration award. The Court also finds that
the award is in compliance with the appropriate statutes. I
am confirming the arbitration award.

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The court subsequently entered the Order Denying Motion
to Vacate 2, which stated in relevant part:

(1) The Court hereby finds that based on the totality of
circumstances that there is no evident partiality on
the part of . . . Ponsar . . . ;
(2) The Decision and Award of the Arbitrators, dated
November 9, 2020, complied with the plain language
requirements of [HRS] § 466K-6; [and]
(3) The Arbitrators did not commit misconduct[.]

The court also denied Phase III-B Lessors' request for an
evidentiary hearing.
Although the Circuit Court generally stated its
conclusions in denying the motion to vacate, because the court
did not enter findings of fact or conclusions of law, the court's
reasoning is not clearly stated on the record. See Nordic, 136
Hawai#i at 54, 358 P.3d at 26. It is unclear, for example, with
respect to the evident partiality contention, whether the Circuit
Court found that Ponsar did not violate his duty to reasonably
investigate, disclose, and continually disclose, or found that
despite a violation, Phase III-B Lessors' objection was not timely
or had been waived. See id. at 31, 358 P.3d at 3. In any event,
based on the parties' evidentiary submissions, these questions
involve disputed issues of material fact. This court is not in
the business of fact-finding. "[I]t is for the circuit court as
factfinder . . . to determine whether reasonable inquiry and
disclosure standards were met, and if not, whether the
Arbitration Award should be vacated for this or any other
reason alleged." Id. at 54, 358 P.3d at 26. Accordingly, we
remand this case to the Circuit Court to conduct an evidentiary
hearing and render findings of fact and conclusions of law on
Phase III-B Lessors' motion to vacate.
In light of our disposition, we vacate the Fee Orders,
as AOBO III-B is no longer the prevailing party.

II. Conclusion
For the reasons discussed above, we vacate the
following judgments and orders entered by the Circuit Court of
the Fifth Circuit:

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(1) in case no. 5CSP-XX-XXXXXXX, the June 5, 2020
"Order Denying Petitioner Moir Family Limited Partnership's
Motion to Vacate Arbitration Award or, in the Alternative, for
Evidentiary Hearing" and the July 7, 2020 final judgment; and
(2) In case no. 5CSP-XX-XXXXXXX, the June 7, 2021
"Order Denying Petitioners' Motion to Vacate Arbitration Award,
Filed January 29, 2021"; the July 8, 2021 "Order Granting
Respondent Association of Beachhouse Owners of Kiahuna Plantation
(Phase IIIB)'s Petition for Award of Attorneys' Fees and Costs
Pursuant to HRS § 658A-25(c), Filed May 17, 2021"; the
September 13, 2021 "Order Establishing Respondent Association of
Beachhouse Owners of Kiahuna Plantation (Phase IIIB)'s Attorneys'
Fees and Costs"; and the September 28, 2021 "Final Judgment."
We remand these cases to the Circuit Court for further
proceedings consistent with this Summary Disposition Order.

DATED: Honolulu, Hawai#i, November 27, 2024.

On the briefs:
/s/ Clyde J. Wadsworth
CAAP-XX-XXXXXXX Presiding Judge
Michael D. Tom, Lyle M.
Ishida, and Ashley R. Shibuya
(Tom Petrus & Miller, LLLC) /s/ Karen T. Nakasone
for Petitioner-Appellant Moir Associate Judge
Family Limited Partnership.

Bruce D. Voss and /s/ Sonja M.P. McCullen
Grant Fasi Allison Associate Judge
(Bays Lung Rose & Voss)
for Respondent-Appellee
Association of Beachhouse
Owners of Kiahuna Plantation
(Phase IIIA and IV).

CAAP-XX-XXXXXXX
Michael D. Tom, Lyle M.
Ishida, and Ashley R. Shibuya
(Tom Petrus & Miller, LLLC)
for Petitioners-Appellants
Peter Baldwin, John Horwitz,
Matthew Guard, and George R.
Robinson, Co-trustees of the
Eric A. Knudsen Trust; KVH
LLC; CGB Partners; Makana
Properties LLC; MFLP; Aukahi
Farm LLC; Jocelyn Knudsen,

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Trustee of the Knudsen
Irrevocable Trust, dated
December 12, 2012

Bruce D. Voss and
Grant Fasi Allison
(Bays Lung Rose & Voss)
for Respondent-Appellee
Association of Beachhouse
Owners of Kiahuna Plantation
(Phase III-B)

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