Kikuyama, et al v. Cordeira, et al

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAI‘I
KAVIN KIKUYAMA, et al.,
Plaintiff,
vs.
KAIPO CORDEIRA, et al.,
Defendants.
Case No. 25-cv-00439-DKW-WRP
ORDER GRANTING IN PART
AND DENYING IN PART
DEFENDANTS’ MOTION TO
DISMISS
On November 7, 2025, Defendants K. Cordeira Holdings, LLC, Kaipo
Cordeira, and Kyle Shockley filed a motion to dismiss Plaintiffs Kikuyama
Holdings, Inc. and Kavin Kikuyama’s Complaint. Dkt. No. 8. Having reviewed the
Complaint, the parties’ briefs, and the relevant legal authorities, and considered the
parties’ presentations at oral argument, the Court agrees that partial dismissal is
appropriate. 	Accordingly, the motion to dismiss is GRANTED IN PART and
DENIED IN PART, with leave to amend, as described below.
FACTUAL & PROCEDURAL BACKGROUND
I. 	The Complaint
On February 1, 2018, Kikuyama and Cordeira entered into an operating
agreement that established Akamai Maritime Solutions, LLC (“AMS”), a jointly
owned company specializing in the maintenance and outfitting of naval and
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commercial vessels. Dkt. No. 1-1 ¶¶ 10 & 16. The operating agreement set up AMS
as a partnership and provided that Kikuyama and Cordeira would each hold a 50%
membership interest in AMS, owe one another “fiduciary duties of disclosure, good
faith and fair dealing, and “refrain from comingling their assets with AMS’s.” 	Id.
¶¶ 16–17, 20. 	While Kikuyama and Cordeira each contributed $50,000 in seed
money, Kikuyama provided an additional $100,000 at Cordeira’s request. Id. ¶ 19.
In 2021, Cordeira and his girlfriend, Shockley (whom Cordeira had hired as
AMS’s bookkeeper), retained a Utah-based law firm, Kyler Kohler Ostemiller &
Sorenson (“KKOS”), to restructure AMS as an S corporation, ostensibly to provide
tax savings. 	Id. ¶ 22. 	Cordeira and Shockley retained KKOS unilaterally and in
spite of Kikuyama’s reservations about why restructuring was necessary or why it
should be done by a non-Hawai‘i based law firm. 	Id. ¶¶ 24–25. 	Cordeira and
Shockley represented to Kikuyama that KKOS would effectuate the restructuring by
creating holding companies for both himself and Kikuyama, which would then
become the members of AMS. Id. ¶¶ 22, 53. Instead, KKOS created a single holding
company, Kikuyama Holdings, the sole member of which was Kikuyama. Id. ¶ 25.
Cordeira, meanwhile, created a new entity, Akamai Maritime Solutions Partnership
LLC (“AMSP”). Kikuyama Holdings and AMS were listed as members of AMSP,
while Cordeira was listed as its manager. Id.
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On April 1, 2022, Cordeira unilaterally renamed AMS to K. Cordeira
Holdings, LLC (“KCH”). 	Id. ¶ 26. 	Cordeira further “tried to force Kikuyama to
sign papers” relinquishing control over and closing AMS’s existing bank account,
and to allow Cordeira to open a new account using AMS’s EIN for Kikuyama
Holdings. Id. ¶ 27. Examining AMS’s records, Kikuyama learned that Cordeira had
withdrawn $20,000 from AMS without Kikuyama’s consent. Id. ¶ 28.
On July 13, 2022, Kikuyama sent a demand letter to Cordeira in which he (1)
refused to surrender control of AMS’s bank account; and (2) stated that Cordeira had
improperly withdrawn money from AMS’s account. 	Id. ¶ 30. 	Kikuyama learned
that Cordeira had taken further unauthorized and improper actions, including
designating Cordeira as the sole member and manager of AMS and KCH; taking out
a credit card on behalf of AMS and KCH and using it for personal expenses;
unilaterally changing AMS and KCH’s health insurer and terminating Kikuyama’s
health insurance; and changing AMS’s compensation structure to prevent Kikuyama
from receiving guaranteed payments. 	Id. ¶¶ 31–39. 	Kikuyama and his counsel
requested access to AMS and KCH’s records and financial statements, but “each
request [was] ignored or only partially satisfied.” Id. ¶ 40.
On January 15, 2024, Cordeira and Shockley improperly removed Kikuyama
as a member of AMS. 	Id. ¶ 41. 	Cordeira continued to use AMS and KCH “as a
personal piggy bank” by using company funds to purchase personal vehicles and
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child-care services; provide close family and friends “generous compensation
package[s]”; and pay his personal taxes. Id. ¶¶ 42–51.
II. 	Procedural History
On September 17, 2025, Plaintiffs initiated this action in Hawai‘i state court.
Dkt. No. 1-1. 	On October 9, 2025, the action was removed to this Court by
Defendants. Dkt. No. 1.
Plaintiffs’ 	Complaint 	asserts 	the 	following 	Counts: 	(1) 	intentional 	or
fraudulent misrepresentation or inducement; (2) negligent misrepresentation; (3)
breach of contract; (4) breach of fiduciary duty; (5) unjust enrichment; (6) violations
of Hawaii Revised Statutes (“HRS”) § 428; (7) equitable accounting; (8) conversion;
and (9) judicial dissolution and accounting (“Counts 1–9”). Dkt. No. 1-1 ¶¶ 52–100.
On November 7, 2025, Defendants moved to dismiss the Complaint, arguing
that (1) the Court lacked personal jurisdiction over Cordeira and Shockley; (2) the
Complaint failed to state a claim against Shockley pursuant to Fed.R.Civ.P. 9(b) and
12(b)(6); 	(3) 	Count 	9 	should 	be 	dismissed 	because 	judicial 	dissolution 	and
accounting are remedies, not independent causes of action; (4) Plaintiffs’ derivative
claims on behalf of AMS and AMSP should be dismissed because Plaintiffs failed
to verify their Complaint pursuant to Fed.R.Civ.P. 23.1; and (5) Plaintiff’s tort
claims against Shockley are barred by the economic loss doctrine. Dkt. Nos. 8 & 8-
1.
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Plaintiffs 	oppose, 	responding 	that 	(1) 	the 	Court 	has 	specific 	personal
jurisdiction over Cordeira and Shockley because the claims arise from acts they
committed in Hawai‘i against fellow Hawai‘i residents; (2) the claims against
Shockley are adequately pled; (3) Count 9 arises from violations of HRS § 428 and
constitutes an independent cause of action; (4) the lack of a verification is not
grounds for dismissal and, regardless, the Complaint is now verified; and (5) the
economic loss doctrine does not apply because Plaintiffs’ claims against Shockley
do not arise from a contractual relationship. 	Dkt. No. 13. 	Plaintiffs also filed a
verification of the Complaint, which affirmed that Kikuyama was the sole member
of Kikuyama Holdings. Dkt. No. 12. Defendants replied, reiterating their arguments
concerning personal jurisdiction, the failure to state a claim, and economic loss. Dkt.
No. 14. 	Defendants further argued that Kikuyama’s verification was “defective.”
Id. at 8–9. On January 2, 2026, the Court held a hearing on the motion to dismiss—
this Order follows. Dkt. No. 15.
STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b)(6) authorizes the Court to dismiss a
complaint that fails “to state a claim upon which relief can be granted.” 	Rule
12(b)(6) is read in conjunction with Rule 8(a), which requires “a short and plain
statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P.
8(a)(2). Pursuant to Ashcroft v. Iqbal, “[t]o survive a motion to dismiss, a complaint
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must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that
is plausible on its face.’” 	556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). In addition, “the tenet that a court must accept
as true all of the allegations contained in a complaint is inapplicable to legal
conclusions.” Ashcroft, 556 U.S. at 678. Accordingly, “[t]hreadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, do not
suffice.” 	Id. 	Rather, “[a] claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” 	Id. 	Factual allegations that only
permit the court to infer “the mere possibility of misconduct” do not show that the
pleader is entitled to relief as required by Rule 8(a)(2). Id. at 679.
When a complaint fails to state a plausible claim, leave to amend should be
given when “justice so requires.” Fed.R.Civ.P. 15(a)(2). Indeed, the Ninth Circuit
has made clear that “a district court should grant leave to amend even if no request
to amend the pleading was made, unless it determines that the pleading could not
possibly be cured by the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122,
1130 (9th Cir. 2000) (citations and quotation marks omitted). However, justice does
not require leave to amend when (1) it would prejudice an opposing party, (2) it is
sought in bad faith, (3) it would produce an undue delay in litigation, (4) it would be
futile, or (5) there has been repeated failure to cure a deficiency. 	Abagninin v.
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AMVAC Chem. Corp., 545 F.3d 733, 742 (9th Cir. 2008); AmerisourceBergen Corp.
v. Dialysist West, Inc., 465 F.3d 946, 951 (9th Cir. 2006).
DISCUSSION
Before the Court is Defendants’ motion to dismiss. 	Dkt. No. 8. 	The Court
addresses each of the motion’s arguments below.
I. 	Personal Jurisdiction
Pursuant to Federal Rule of Civil Procedure 12(b)(2), a defendant may move
for dismissal due to a lack of personal jurisdiction. When a defendant does so, “the
plaintiff bears the burden of establishing that jurisdiction is proper.” Mavrix Photo,
Inc. v. Brand Technologies, Inc., 647 F.3d 1218, 1223 (9th Cir. 2011). 	As in this
case, when an evidentiary hearing is not held, while the plaintiff cannot rest on the
allegations of its complaint, uncontroverted jurisdictional allegations may be taken
as true, while related factual disputes are to be resolved in the plaintiff’s favor. Id.
At the motion to dismiss stage, plaintiffs are required only to make out a prima facie
showing of personal jurisdiction. 	See Glencore Grain Rotterdam B.V. v. Shivnath
Rai Harnarain Co., 284 F.3d 1114, 1119 (9th Cir. 2002).
Personal jurisdiction encompasses two distinct concepts: (1) general personal
jurisdiction; or (2) specific personal jurisdiction. 	Bristol-Myers Squibb Co. v.
Superior Court of Cal., San Francisco Cty., 137 S.Ct. 1773, 1779–80 (2017).
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Defendants move to dismiss on the grounds that Plaintiffs have failed to show
general or specific personal jurisdiction over Cordeira and Shockley. Dkt. No. 8-1
at 4–8. 	In their opposition brief, Plaintiffs respond only as to specific personal
jurisdiction, effectively conceding that general personal jurisdiction is not present.
Dkt. No. 13 at 3–4; see also Walsh v. Nevada Dep’t of Hum. Res., 471 F.3d 1033,
1037 (9th Cir. 2006) (holding that a plaintiff who failed to “raise [an] issue” in
response to a defendant’s motion to dismiss “effectively abandoned” the argument).
The Court thus turns to whether Plaintiffs “can establish personal jurisdiction by
demonstrating that specific jurisdiction is proper.” 	Delta Inn, Inc. v. Hyundai Sec.
Co., 2016 WL 11782790, at *2 (W.D. Wash. Sept. 20, 2016).
Specific jurisdiction “focuses on the relationship among the defendant, the
forum, and the litigation” and exists when “the defendant’s suit-related conduct
[creates] a substantial connection with the forum State.” Walden v. Fiore, 571 U.S.
277, 283–84 (2014) (internal quotation marks and citations omitted); see also
Shabanets v. ZF TRW Auto. Holdings Corp., 2020 WL 10934650, at *1 (C.D. Cal.
Dec. 8, 2020) (“[S]pecific jurisdiction arises when a defendant’s contacts with the
forum state give rise to the claim in question.”). 	For a court to exercise specific
jurisdiction, the defendant “must purposefully direct his activities or consummate
some transaction with the forum or resident thereof; or perform some act by which
he purposefully avails himself” of the forum. 	Freestream Aircraft (Bermuda) Ltd.
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v. Aero Law Group, 905 F.3d 597, 603 (9th Cir. 2018). 	Additionally, “the claim
must be one which arises out of or relates to the defendant’s forum-related
activities[.]” Id. 	Finally, “the exercise of jurisdiction must comport with fair play
and substantial justice, i.e., it must be reasonable.” Id.
Here, the Court has no doubt that Plaintiffs have established specific personal
jurisdiction. Per the Complaint, all individual parties were Hawai‘i residents at the
time the relevant conduct took place. Dkt. No. 1-1 ¶¶ 1–4. The corporate entities at
play—AMS, AMSP, KCH, and Kikuyama Holdings—were all formed pursuant to
Hawai‘i state law. Id. ¶¶ 2–6. Moreover, virtually all of the conduct at issue in this
action occurred in Hawai‘i, including the various allegedly-improper changes
Cordeira 	and 	Shockley 	made 	to 	the 	corporate 	partnership 	entered 	into 	with
Kikuyama. See, e.g., id. ¶¶ 18, 27, 32. These facts provide a strong basis for specific
personal jurisdiction. 	See Walden, 571 U.S. at 285 (“[P]hysical entry into the
State—either by the defendant in person or through an agent, goods, mail, or some
other means—is certainly a relevant contact.”); Picot v. Weston, 780 F.3d 1206,
1212 (9th Cir. 2015) (noting that, in determining if a business arrangement created
minimum 	contacts, 	courts 	look 	to 	whether 	the 	defendant 	“performed 	some
affirmative conduct which allows or promotes the transaction of business within the
forum state” (internal quotation marks omitted)); Steel v. United States, 813 F.2d
1545, 1549 (9th Cir. 1987) (“[C]ourts must examine the defendant’s contacts with
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the forum at the time of the events underlying the dispute when determining whether
they have jurisdiction.”).
Defendants acknowledge that Cordeira and Shockley were residents of
Hawai‘i and engaged in business activities during their residency, but argue that the
claims in this case arise from “internal governance decisions between private parties,
not forum-directed conduct.” Dkt. No. 8-1 at 6–7. Defendants, in other words, assert
that the disputed conduct was purely an internal matter within the relevant entities,
and that Plaintiffs have failed to allege that any actions were “purposely directed at
Hawaii residents or markets.” 	Id. at 7–8. Defendants’ assertions are belied by the
Complaint, which plainly alleges Cordeira and Shockley directed their allegedly
fraudulent 	conduct 	at 	Kikuyama, 	a 	Hawai‘i 	resident, 	utilizing 	the 	corporate
structures of Hawai‘i-based companies. 	See, e.g., Dkt. No. 1-1 ¶¶ 54, 60, 77. 	In
short, 	because 	the 	individuals 	involved 	in 	the 	relevant 	entities, 	the 	entities
themselves, and practically all of the individuals’ challenged conduct occurred in
and/or related to Hawai‘i, the Complaint’s allegations are more than adequate to
establish that Defendants purposefully directed their conduct at Hawai‘i. 	See U.S.,
ex rel. McCarthy v. Straub Clinic & Hosp., Inc., 140 F. Supp. 2d 1062, 1072 (D.
Haw. 2001) (finding that defendant “purposefully directed its conduct” at Hawai‘i
where 	plaintiffs 	alleged 	that 	defendant 	controlled 	companies, 	“conduct[ed]
business,” and committed the fraudulent conduct at issue within the state).
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In sum, this action concerns conduct undertaken in Hawai‘i by Hawai‘i
residents, aimed at other Hawai‘i residents, concerning entities formed and/or
operating in Hawai‘i. 	It is difficult to imagine a clearer case of specific personal
jurisdiction. Accordingly, the motion to dismiss on jurisdictional grounds is denied.
II. 	Failure to State a Claim
a. Rule 9(b)
Defendants 	assert 	that 	Plaintiffs’ 	claims 	for 	intentional 	or 	fraudulent
misrepresentation under Count 11 fail to meet the heightened pleading standards of
Rule 9(b). Dkt. No. 8-1 at 9. The Court disagrees.
To succeed on a fraudulent misrepresentation claim, a plaintiff must show that
“(1) false representations were made by defendants; (2) with knowledge of their
falsity (or without knowledge of their truth or falsity); (3) in contemplation of
plaintiff's reliance upon these false representations; and (4) plaintiff did rely upon
them.” 	Ass’n of Apartment Owners of Newtown Meadows v. Venture 15, Inc., 115
Haw. 232, 263 (2007) (internal quotation marks and emphasis omitted). 	Claims
1 In the motion to dismiss, Defendants also argue that the negligent misrepresentation claims under
Count 2 fail to satisfy Rule 9(b). Dkt. No. 8-1 at 9. As Plaintiffs point out, however, Rule 9(b)’s
heightened pleading standards apply only to claims grounded in fraud, not negligence. 	See
Smallwood v. NCsoft Corp., 730 F. Supp. 2d 1213, 1231 (D. Haw. 2010) (“A negligent
misrepresentation claim does not require intent, and accordingly is not subject to Rule 9(b).”).
Defendants do not mention Count 2 in the section of their reply concerning Rule 9(b), suggesting
they agree that Plaintiffs are correct, at least on this point. To the extent that Defendants continue
to press the dismissal of Count 2 on Rule 9(b) grounds, the motion is denied.
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sounding in fraud must also satisfy Rule 9(b), which requires a party to “state with
particularity” the circumstances constituting fraud. 	“[C]ircumstances must be
alleged 	with 	enough 	specificity 	“to 	give 	defendants 	notice 	of 	the 	particular
misconduct . . . so they can defend against the charge and not just deny that they
have done anything wrong.” Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th
Cir. 2009) (internal quotation marks omitted). 	To that end, Rule 9(b) demands
detailed allegations setting forth “the time, place, and nature of the alleged fraudulent
activities.” 	Moore v. Kayport Package Exp., Inc., 885 F.2d 531, 540 (9th Cir.
1989); see also Illinois Nat’l Ins. Co. v. Nordic PCL Const., Inc., 870 F. Supp. 2d
1015, 1036–37 (D. Haw. 2012) (explaining that allegations of fraud “must be
accompanied by ‘the who, what, when, where, and how’ of the misconduct
charged”) (quoting Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir.
2003)). “[M]ere conclusory allegations of fraud are insufficient.” Moore, 885 F.2d
at 540.
The allegations Plaintiffs plead are far more than conclusory. The Complaint
provides that, in 2021, Shockley retained KKOS to restructure AMS, Dkt. No. 1-1
¶ 22, and falsely represented to Kikuyama that the restructuring would create
multiple holding companies for tax benefits. In reality, Cordeira and Shockley used
KKOS to seize control of the company, to cut Kikuyama out of it, and to then utilize
the remaining entity’s assets for personal purposes, id. ¶¶ 22 & 53. 	These are not
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threadbare allegations—the Complaint provides precisely the who, what, where,
when, and why that Rule 9(b) demands. 	See Servco Pac., Inc. v. SkyBridge Glob.,
Inc., 2016 WL 6996987, at *8 (D. Haw. Nov. 29, 2016) (concluding that pleadings
met 	Rule 	9(b) 	requirements 	where 	plaintiff 	“identified 	with 	specificity” 	the
misrepresentations forming the fraud claim, as well as “the parties involved” and
“the basis for why the statements are false”). 	Defendants argue that Plaintiffs
nevertheless fail to allege “the precise words Cordeira or Shockley said” or specify
the exact day and time in which the false representations were made. Dkt. No. 14 at
3. 	Defendants, however, produce no authority that such specificity is required,
particularly in light of the already-detailed pleadings Plaintiffs have provided.
Defendants know enough to proceed with their defense of this claim. Accordingly,
the motion to dismiss Count 1 on the grounds that it fails to meet the requirements
of Rule 9(b) is denied.
b. Rule 12(b)(6)
Defendants 	argue 	that 	the 	negligent 	misrepresentation 	claims 	against
Shockley should be dismissed pursuant to Rule 12(b)(6) because Plaintiffs failed to
allege an independent duty owed by Shockley.2 Dkt. No. 8-1 at 10–11. The Court
agrees.
2 Defendants briefly state that Count 1 (i.e. Plaintiffs’ fraud claim) against Shockley should also be
dismissed pursuant to Rule 12(b)(6). Dkt. No. 8-1 at 10. However, Defendants’ only arguments
to dismiss under Rule 12(b)(6) concern negligent misrepresentation—no mention is made of any
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Plaintiffs do not dispute that the Complaint fails to allege a specific duty owed
by 	Shockley 	to 	Kikuyama—rather, 	Plaintiffs 	argue 	that 	a 	negligent
misrepresentation claim does not require a “duty at all.” Dkt. No. 13 at 15.
“Negligent 	misrepresentation 	has 	the 	following 	elements: 	(1) 	false
information be supplied as a result of the failure to exercise reasonable care or
competence in communicating the information; (2) the person for whose benefit the
information is supplied suffered the loss; and (3) the recipient relies upon the
misrepresentation.” 	Santiago v. Tanaka, 137 Haw. 137, 153–54 (2016) (internal
quotation marks omitted). 	Plaintiffs assert that an independent duty is not among
these elements and is therefore not required to state a negligent misrepresentation
claim. 	Dkt. No. 13 at 15. 	This ignores, however, that a “prerequisite to any
negligence action is the existence of a duty owed by the defendant to the plaintiff.”
Molfino v. Yuen, 134 Haw. 181, 184 (2014) (emphasis added). 	A negligent
misrepresentation claim is no exception to this rule. 	See Newtown Meadows, 115
Haw. at 286 (“[T]he tort of negligent misrepresentation is founded on the breach of
a duty[.]” (internal quotation marks omitted)).
Here, the Complaint does not specifically allege any duty owed by Shockley
to Kikuyama. 	Furthermore, given that Shockley was employed by Cordeira as a
grounds for dismissing the fraud claim pursuant to Rule 12(b)(6). See id. at 10–11. The Court
thus declines to consider this argument further.
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bookkeeper, 	it 	is 	not 	obvious 	what 	duty 	she 	might 	have 	owed 	Kikuyama.
Accordingly, the motion to dismiss the negligent misrepresentation claims against
Shockley is granted. Because Plaintiffs “could conceivably cure these deficiencies”
by identifying the duty they apparently believed was not necessary, this dismissal is
without prejudice and with leave to amend. Jones v. Rising Phoenix Holdings Corp.,
2025 WL 2802180, at *7 (D. Haw. Oct. 1, 2025); Lopez, 203 F.3d at 1130.
III. 	Judicial Dissolution and Accounting
Plaintiffs request judicial dissolution and accounting of AMS and KCH and
frame this request as a cause of action under Count 9. 	Dkt. No. 1-1 ¶¶ 103–06.
Defendants move to dismiss Count 9 as an independent cause of action, arguing that
judicial dissolution and accounting should instead be understood as equitable
remedies, and the Complaint should be “reframed” as such. Dkt. No. 8-1 at 12. Even
if dismissed, in other words, Defendants appear to acknowledge that judicial
dissolution and accounting would remain available as remedies under counts other
than Count 9. Dkt. No. 8-1 at 12.
Plaintiffs respond that Hawai‘i state statutes provide independent causes of
action for dissolution and accounting. 	More specifically, Plaintiffs rely on two
statutes that allegedly establish causes of action for dissolution and accounting. The
first, HRS § 428-410, provides that:
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A member may maintain an action against a limited liability company
or another member for legal or equitable relief, with or without an
accounting as to the company’s business, to enforce:
(1) The member’s rights under the operating agreement;
(2) The member’s rights under this chapter; and
(3) The rights and otherwise protect the interests of the member,
including 	rights 	and 	interests 	arising 	independently 	of 	the
member’s relationship to the company.
The second, HRS § 428-810, states that a limited liability company may be dissolved
by the “application of a member . . . , upon entry of a judicial decree” that the
“managers or members in control of the company have acted, are acting, or will act
in a manner that is illegal, oppressive, fraudulent, or unfairly prejudicial to the
petitioner.”
Plaintiffs provide no authority, however, indicating that these statutes form
the bases of an independent cause of action, nor has the Court found any. Section
428-410 states only that actions for legal or equitable relief may be pursued by
members “with or without an accounting”—it does not state that the accounting itself
is a cause of action. As for Section 428-810, the language of the statute merely states
that a company may be dissolved pursuant to a judicial decree upon finding member
or manager misconduct. Both statutes, in short, appear to provide statutory remedies
for members whose interests have been violated. 	The Court further notes that the
concept of a judicial accounting as a standalone claim based on Hawai‘i law has
been repeatedly rejected within this district. See e.g. Barnes v. Sea Hawai‘i Rafting,
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LLC, 493 F. Supp. 3d 972, 982 (D. Haw. 2020) (“[J]udges in this district regularly
reject standalone accounting claims, characterizing accounting as a remedy, not an
independent cause of action.”) (collecting cases), aff’d sub nom. Barnes v. Kris
Henry, Inc., 2022 WL 501582 (9th Cir. Feb. 18, 2022).
Given both the language of the cited statutes and available law, the Court
agrees with Defendants that judicial dissolution and accounting constitute remedies,
not causes of action in themselves. 	The Court thus grants the motion to dismiss
Count 9, albeit with leave to amend should Plaintiffs wish to specify through which
remaining counts the remedies of judicial dissolution and accounting are sought.
IV. 	Verification
Initially, Defendants argued that the Court should dismiss the derivative
claims because Plaintiffs had failed to verify the Complaint pursuant to Rule 23.1.
Dkt. No. 8-1 at 12–13. Taking the argument to heart, Plaintiffs subsequently verified
the Complaint, see Dkt. No. 12, which typically is sufficient to cure the absence of
a verification upon filing, see N. Acceptance Tr. 1065 v. AMFAC, Inc., 51 F.R.D.
487, 493 (D. Haw. 1971) (denying motion to dismiss derivative claims based on a
missing verification because “if such failure originally was ground for granting such
motion, it has been cured by subsequent verification”).
Defendants argue in their reply brief, however, that the now-filed verification
is “defective” because the Complaint still fails to comply with Rule 23.1 for two
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reasons. 	Dkt. No. 14 at 8–9. 	First, Rule 23.1(b)(2) requires that the complaint
“allege that the action is not a collusive one to confer jurisdiction that the court would
otherwise lack.” 	Second, Rule 23.1(b)(3) requires that the complaint “state with
particularity . . . any effort by the plaintiff to obtain the desired action from the
directors or comparable authority and, if necessary, from the shareholders or
members,” or alternatively “the reasons for not obtaining the action or not making
the effort.”
Examining the Complaint, it is true that Plaintiffs allege neither that the action
is non-collusive for jurisdictional purposes, nor do they describe any efforts made to
obtain the desired action—the remaining Rule 23.1 defects identified by Defendants.
See Lantz Ret. Invs., LLC v. Glover, 2021 WL 6118182, at *18 (E.D. Cal. Dec. 27,
2021) (dismissing for failure to comply with Rule 23.1 where the complaint did not
“allege the required information”), aff’d, 2023 WL 3533892 (9th Cir. May 18, 2023).
Nonetheless, with respect to Rule 23.1(b)(2), there is no remaining dispute as to the
Court’s jurisdiction, nor any argument that this action is collusive. 	As for Rule
23.1(b)(3), there is no apparent board of directors or “comparable authority” to
which Plaintiffs might have first petitioned—the only members of AMS and AMSP
evident from the Complaint are Kikuyama and Cordeira. Dkt. No. 1-1 ¶ 25. Given
that Cordeira is a defendant in this case, any attempt by Kikuyama to obtain
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Cordeira’s consent for this action would almost certainly be futile. That is sufficient
reason for “not making the effort,” as Rule 23.1(b)(3) expressly permits.
Accordingly, although amendment to comply with Rule 23.1 is not necessary,
as the Court has already granted Plaintiffs leave to amend the Complaint above, (see
e.g. Discussion, Section II(b), supra), Plaintiffs are directed to include allegations
addressing the aforementioned Rule 23.1 issues as part of their amended pleadings.
V. 	Economic Loss Doctrine
The economic loss rule precludes a plaintiff asserting certain contract claims
from also recovering its economic losses in tort. See Newtown Meadows, 115 Haw.
at 291; City Exp., Inc., v. Express Partners, 87 Haw. 466, 469 (1998). The rule is
codified at HRS § 663-1.2: “[n]o person may recover damages, including punitive
damages, in tort for a breach of a contract in the absence of conduct that: (1) Violated
a 	duty 	that 	is 	independently 	recognized 	by 	principles 	of 	tort 	law; 	and 	(2)
Transcended the breach of the contract.”
The crux of [the economic loss rule] is the premise that economic
interests are protected, if at all, by contract principles, rather than tort
principles. Contract law is designed to enforce the expectancy interests
created 	by 	agreement 	between 	the 	parties 	and 	seeks 	to 	enforce
standards of quality. This standard of quality must be defined by
reference to that which the parties have agreed upon. In contrast, tort
law is designed to secure the protection of all citizens from the danger
of physical harm to their persons or to their property and seeks to
enforce standards of conduct. These standards are imposed by society,
without regard to any agreement. Tort law has 	not traditionally
protected strictly economic interests . . . in other words, courts have
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generally refused to create a duty in tort to prevent such economic
losses.
Newtown Meadows, 115 Haw. at 291. 	The doctrine does not apply to non-tort
claims, AT ML Leasehold HI, LLC v. RCSH Operations, Inc., 2021 WL 6052286, at
*5 (D. Haw. Dec. 21, 2021), and if a plaintiff’s claims “are founded on a breach of
duty separate and apart from any contractual duty, then the economic loss rule [also]
does not apply,” Adon Constr. Inc. v. Renesola Am. Inc., 2019 WL 2236073, at *4
(D. Haw. May 23, 2019).
Defendants move to dismiss Counts 4, 5, and 83 against Shockley on the
grounds that they are barred by the economic loss doctrine. Dkt. No. 14 at 6–7.
Plaintiffs do not dispute that the economic loss doctrine may be applied to unjust
enrichment, conversion, and breach of fiduciary duty, the claims contained within
the referenced counts; rather, Plaintiffs argue that the doctrine is inapplicable to
Shockley because she was not party to the contracts that created and governed AMS.
Dkt. No. 13 at 20. 	Without a contract, Plaintiffs assert that the economic loss
doctrine has no place.
3 In the motion to dismiss, Defendants did not specify which particular claims were barred by the
economic loss doctrine, an omission that was cured in their reply brief. Defendants now clarify
that the argument is limited to Counts 2, 4, 5, and 8, and only as to Shockley. See Dkt. No. 8-1 at
13–14; Dkt. No. 14 at 6. However, because the Court has already granted dismissal of Count 2
(negligent misrepresentation) on Rule 12(b)(6) grounds, (see Discussion, Section II(b), supra), it
declines to also consider Count 2 here.
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The question of the economic loss doctrine’s applicability in cases where no
contractual relationship exists is not unknown to the courts. See Hawaii Motorsports
Inv., Inc. v. Clayton Grp. Servs., 2009 WL 3109941, at *4 (D. Haw. Sept. 25, 2009)
(“The economic loss rule becomes more complicated in claims between a plaintiff
and a defendant who have no contractual relationship and hence no privity between
them.” (internal quotation marks omitted)). Contrary to Plaintiffs’ arguments:
Many courts . . . have expanded the economic loss rule to bar economic
recovery in tort cases where there is no contract and, thus, no privity.
The policy behind this principle is to prevent potentially limitless
liability for economic losses: While the physical consequences of
negligence 	usually 	have 	been 	limited, 	the 	indirect 	economic
repercussions of negligence may be far wider, indeed, virtually open-
ended.
Newtown Meadows, 115 Haw. at 287 (cleaned up, internal quotation marks omitted).
In fact, while the present rule may not have always been the case, Hawai‘i courts
now “clearly stand[] for the proposition that the economic loss doctrine bars the
recovery of purely economic losses, even in the absence of privity of contract, so
long as ‘allowing such recovery would blur the distinction between contract and tort
law.’” 	Leis Fam. Ltd. P’ship v. Silversword Eng’g, 126 Haw. 532, 538 (Ct. App.
2012) (quoting Newtown Meadows, 115 Haw. at 292); see also Launiupoko Water
Co. v. J-M Mfg. Co., 2014 WL 6685965, at *3 (D. Haw. Nov. 25, 2014) (“Courts
apply the economic loss rule to bar economic recovery in tort cases such as this,
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where there is no contract and, thus, no privity between the parties.”)(internal
quotation marks omitted)).4
Plaintiffs do not acknowledge this reality in Hawai‘i law. 	They do not, for
example, assert that the claims against Shockley are based on a breach of duty
distinct from any contractual obligations, see Adon Constr., 2019 WL 2236073, at
*4, and thus should survive even where the economic loss doctrine applies. 	The
exact nature of the contractual relationship, if any, between Kikuyama and Shockley
is also not well-defined in the pleadings: the Complaint alleges that Shockley was
hired as a bookkeeper but does not elaborate. Dkt. No. 1-1 ¶ 22.
Accordingly, the Court grants the motion to dismiss as to the claims against
Shockley under Counts 4, 5, and 8 because the lone argument advanced by Plaintiffs
against the application of economic loss has no merit. Because Plaintiffs could cure
their pleadings with respect to economic loss, this dismissal is without prejudice and
with leave to amend. Jones, 2025 WL 2802180, at *7; Lopez, 203 F.3d at 1130.
4Newtown Meadows was concerned with the applicability of the economic loss doctrine in the
context of construction contracts. 115 Haw. at 287. However, subsequent courts have treated the
Newtown Meadows holding to be of more “general applicability,” applying the economic loss
doctrine in the absence of a contractual relationship to other claims and in other circumstances.
Leis Fam., 126 Haw. at 538; Launiupoko Water Co., 2014 WL 6685965, at *3 (applying Newtown
Meadows to negligent misrepresentation claim).
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CONCLUSION
For 	the 	reasons 	set 	forth 	above, 	Defendants’ 	Motion 	to 	Dismiss 	the
Complaint, Dkt. No. 8, is GRANTED IN PART and DENIED IN PART. 	Counts
2, 4, 5, and 8 against Shockley, as well as Count 9, are dismissed without prejudice
and with leave to amend, consistent with this Order. The motion to dismiss is denied
in all other respects. 	Should Plaintiffs wish to amend the pleadings, an amended
complaint that does not incorporate or rely on previous filings must be filed no later
than February 11, 2026. If no amended complaint is filed by that date, this action
will proceed only on the claims that survive in the present Complaint (Dkt. No. 1-
1).
IT IS SO ORDERED.
DATED: January 21, 2026 at Honolulu, Hawai‘i.
Kavin Kikuyama, et al vs. Kaipo Cordeira, et al; Civil No. 25-00439 DKW-WRP;
ORDER DENYING IN PART AND DENYING IN PART DEFENDANTS’
MOTION TO DISMISS
___________________________
Derrick K. Watson
Chief United States District Judge
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