Tinguely Development, Inc. v. Markiewicz

NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
21-FEB-2025
07:50 AM
Dkt. 43 SO

NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

TINGUELY DEVELOPMENT, INC., a Hawaii Corporation,
Petitioner-Appellee,
v.
JAMES S. MARKIEWICZ, as Trustee of the James S.
Markiewicz Living Trust dated April 15, 1992,
JOANNE C. MARKIEWICZ, as Trustee of the Joanne C.
Markiewicz Living Trust dated February 10, 1999,
Respondents-Appellants

APPEAL FROM THE CIRCUIT COURT OF THE THIRD CIRCUIT
(CASE NO. 3CSP-XX-XXXXXXX)

SUMMARY DISPOSITION ORDER
(By: Wadsworth, Presiding Judge, and Nakasone and McCullen, JJ.)

This appeal stems from a dispute concerning an
arbitration award, which was issued in favor of Petitioner-
Appellee Tinguely Development, Inc. (TDI) and against
Respondents-Appellants James S. Markiewicz, as Trustee of the
James S. Markiewicz Living Trust dated April 15, 1992, and Joanne
C. Markiewicz, as Trustee of the Joanne C. Markiewicz Living
Trust dated February 10, 1999 (together, the Markiewiczes). The
Markiewiczes appeal from the Final Judgment, entered on April 13,
2021, by the Circuit Court of the Third Circuit (Circuit Court).1/
The Markiewiczes also challenge the Circuit Court's: (1)
February 2, 2021 "Findings of Fact, Conclusions of Law and Order
Re: (1) Granting [TDI's] Motion to Confirm Arbitration Award, and
(2) Denying [the Markiewiczes'] Motion to Vacate Arbitration

1/
The Honorable Robert D.S. Kim presided.
NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

Award Dated June 26, 2020"; and (2) April 13, 2021 "Order
Granting [TDI's] Non-Hearing Motion for Attorneys' Fees and Costs
Filed, February 5, 2021."
On appeal, the Markiewiczes contend that the Circuit
Court: (1) erred in concluding that the Final Award2/ does not
violate public policy as expressed in Hawaii Revised Statutes
(HRS) Chapter 444 and Hawaii Administrative Rules (HAR) § 16-77
by awarding amounts to an unlicensed contractor; (2) erred in
concluding that the arbitrator did not exceed the scope of his
authority; (3) erred in finding that the arbitrator did not
refuse to consider evidence material to the parties' dispute; and
(4) abused its discretion in granting TDI's February 5, 2021
motion for attorneys' fees and costs (Fee Motion).
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
Markiewiczes' contentions as follows, and affirm.
(1) The Markiewiczes contend that "[t]he Circuit Court
erred in failing to hold that the Final Award violated public
policy by awarding amounts to an unlicensed contractor." They
argue that the award "explicitly conflicts with HRS Chapter 4443/
by allowing TDI to recover for work done when TDI was using an
unlicensed subcontractor on the project . . . ." (Footnote
added.) They further argue that "TDI's disclosure to the

2/
The arbitrator issued the Partial Final Award of Arbitrator
(Partial Award) on May 11, 2020, and the Final Award of Arbitrator ( Final
Award) on June 26, 2020.
3/
HRS § 444-9 (2013) states:

Licenses required. No person within the purview of
this chapter shall act, or assume to act, or advertise, as
general engineering contractor, general building contractor,
or specialty contractor without a license previously
obtained under and in compliance with this chapter and the
rules and regulations of the contractors license board.

HRS § 444-22 (2013) states:
Civil action. The failure of any person to comply
with any provision of this chapter shall prevent such person
from recovering for work done, or materials or supplies
furnished, or both on a contract or on the basis of the
reasonable value thereof, in a civil action, if such person
failed to obtain a license under this chapter prior to
contracting for such work.

2
NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

Markiewiczes failed to identify the name, address, license
number, or classification of its subcontractors, in violation of
HAR §§ 16-77-79 and 80,4/ as well as HRS § 444-25.5."5/ (Footnotes
added.)
"Hawai#i recognizes a 'limited public policy exception
to the general deference given arbitration awards.'" In re

4/
HAR §§ 16-77-79 states, in relevant part:

Disclosure to homeowners. (a) Contractors engaging in
home construction or home improvements shall, prior to
obtaining a binding contract from the homeowner and prior to
applying for a building permit:
(1) Disclose all information pertaining to the
contract and its performance, the absence of
which might mislead the homeowner to the
homeowner's detriment including but not limited
to the lien rights of labor, suppliers, and
subcontractors[.]

HAR §§ 16-77-80 states, in relevant part:

Homeowner contracts. (a) All contractors shall
provide homeowners with a written contract involving home
construction or improvements which shall provide the
following:
(1) The name, address, license number, and
classification(s) of the contractor;

. . . .
(5) The approximate percentage of work to be
subcontracted and the names and license numbers
of all subcontractors, if any[.]
5/
HRS § 444-25.5 (2013) states, in relevant part:

Disclosure; contracts. (a) Prior to entering into a
contract with a homeowner, or at the time a homeowner signs
a contract, involving home construction or improvements,
licensed contractors shall:

(1) Explain verbally in detail to the homeowner all
lien rights of all parties performing under the
contract, including the homeowner, the
contractor, any subcontractor, or any
materialman supplying commodities or labor on
the project[.]

. . . .
(b) All licensed contractors performing home construction or
improvements shall provide a written contract to the
homeowner. The written contract shall:

(1) Contain the information provided in subsection (a)
and any other relevant information that the board may
require by rule[.]

3
NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

Hawai#i State Teachers' Ass'n (HSTA), 140 Hawai#i 381, 401, 400
P.3d 582, 601 (2017) (quoting Inlandboatmen's Union of the Pac.
v. Sause Bros., 77 Hawai#i 187, 194, 881 P.2d 1255, 1262 (App.
1994)). The public policy exception applies "only in cases where
enforcing an arbitration award or contract would involve
illegality or violate public policy." Id. (citing In re
Grievance Arbitration Between State Org. of Police Officers and
County of Kaua#i (SHOPO), 135 Hawai#i 456, 465-67, 353 P.3d 998,
1007-09 (2015)).
Hawai#i courts review public policy claims under the
following framework:

First, the court must determine whether there is an
explicit, well defined, and dominant public policy that is
ascertained by reference to the laws and legal precedents
and not from general considerations of supposed public
interests. Second, the court must determine whether the
arbitration award itself is clearly shown to be contrary to
the explicit, well-defined, and dominant public policy.

SHOPO, 135 Hawai#i at 465, 353 P.3d at 1007 (internal quotation
marks and citations omitted; emphases added).
Even if we assume that the public policies barring
recovery by unlicensed contractors and requiring certain
disclosures by licensed contractors are "explicit, well-defined,
and dominant public polic[ies]," id., the Markiewiczes fail to
clearly show that the Final Award is contrary to these policies.
In reaching the same conclusion, the Circuit Court determined:

42. With respect to [the Markiewiczes'] argument that
the Final Award violates public policy due to [TDI's]
alleged violation of HRS § 444-22 (use of an unlicensed
subcontractor), there is no indication in either the Partial
Award or the Final Award that this issue was presented to
the Arbitrator and addressed as part of the Final Award, nor
have [the Markiewiczes] argued that said issue was addressed
as part of the Arbitration.

43. Neither the Partial Award nor the Final Award
include a finding by the Arbitrator that an unlicensed
subcontractor was used by [TDI].
44. Neither the Partial Award nor the Final Award,
state that any portion of the Final Award related to amounts
owed by [the Markiewiczes] for work performed by an
allegedly unlicensed subcontractor.

45. Given the foregoing, there is no clear showing
that the Final Award violates public policy, based upon HRS
§ 444-22 and therefore vacatur is not warranted.

4
NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

46. With respect to [the Markiewiczes'] argument that
the Final Award should be vacated due to an alleged failure
by [TDI] to make disclosures as required under HRS § 444-
25.5 and HAR § 16-77, there is no indication in either the
Partial Award or the Final Award that this issue was
presented to the Arbitrator and addressed as part of the
Final Award, nor have [the Markiewiczes] argued that said
issue was addressed as part of the Arbitration.
47. Neither the Partial Award nor the Final Award
include a finding by the Arbitrator that [TDI] failed to
make adequate disclosures.
48. Given the foregoing, there is no clear showing
that the Final Award violates public policy, based upon HRS
§ 444-25.5 and HAR § 16-77 and therefore vacatur is not
warranted.

COLs 42 through 44 and 46 through 47 are actually
findings of fact, which the Markiewiczes do not specifically
dispute, and which are supported by the record. See Okada
Trucking Co. v. Bd. of Water Supply, 97 Hawai#i 450, 458, 40 P.3d
73, 81 (2002) (unchallenged findings of fact are binding on
appeal). Crucially, the record, including the record before the
Circuit Court, does not clearly show that any portion of the
Partial Award or the Final Award to TDI was for amounts owed by
the Markiewiczes for work performed by an unlicensed
subcontractor. Nor does the record clearly show that the Partial
Award or the Final Award violates any relevant disclosure
requirement. Accordingly, the Markiewiczes have not clearly
shown that the Final Award is contrary to the public policies
they claim were violated. The Circuit Court did not err in so
ruling.
(2) The Markiewiczes contend that "[t]he Circuit Court
erred in concluding that the Arbitrator did not exceed the scope
of his authority under the Contract." They argue that "[t]he
Arbitrator, in rendering his decision, ignored Hawaii and Ninth
Circuit case precedent," by quoting a New York case, In re
Arbitration of Gleason, 726 N.Y.S.2d 493, 494 (N.Y. App. 2001),
for the proposition that an arbitrator "may do justice as he sees
it, applying his own sense of law and equity to the facts as he
finds them to be." They further argue that "[t]he Circuit Court
improperly denied the Markiewiczes' Motion to Vacate in spite of
the Arbitrator's blatant disregard for the terms of the Contract,
which TDI indisputedly [sic] breached in multiple ways . . . ."

5
NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

Although "[j]udicial review of an arbitration award is
confined to the 'strictest possible limits,'" HSTA, 140 Hawai#i at
396, 400 P.3d at 597 (quoting SHOPO, 135 Hawai#i at 461, 353 P.3d
at 1003), an arbitration award must be vacated where "[a]n
arbitrator exceeded the arbitrator's powers." HRS § 658A-
23(a)(4) (2016). "In determining whether an arbitrator has
exceeded his or her authority under the agreement, 'there should
be no second guessing by the court of the arbitrator's
interpretation of his or her authority so long as the
arbitrator's interpretation 'could have rested on an
interpretation and application of the agreement.'" HSTA, 140
Hawai#i at 396, 400 P.3d at 597 (quoting SHOPO, 135 Hawai#i at
463, 353 P.3d at 1005).
Here, the parties' "Construction Agreement R-1"
(Contract) stated in relevant part:

All claims, disputes and matters in question arising out of,
or relating to, this Agreement, or the breach thereof, . . .
and including claims with respect to any alleged breach of
the Contractor's warranty as set forth in Article 7.10
above, shall be decided by binding arbitration in accordance
with the Construction Industry Arbitration Rules of the
American Arbitration Association then in effect unless the
parties mutually agree otherwise.

In addressing whether the arbitrator exceeded the scope
of his authority under the Contract, the Circuit Court concluded:

27. In reviewing the Partial Award and the Final
Award, the Court finds that the Arbitrator did not exceed
the scope of his authority.

28. The Arbitration Clause in the Contract is very
broad and does not place any limitation on the type of
relief that may be awarded by an arbitrator.
29. Furthermore, the Arbitration Clause refers to the
AAA Construction Industry Arbitration Rules, which
specifically states that the "arbitrator may grant any
remedy or relief that the arbitrator deems just and
equitable and within the scope of the agreement of the
parties, including but not limited to, equitable relief and
specific performance of the contract." AAA
Construction Industry Arbitration Rules and Mediation
Procedures at Rule 48(a).
30. Given the broad scope of the Arbitration Clause,
the Arbitrator acted within the scope of his authority with
respect to the relief that was awarded to TDI, including any
equitable relief. See Hokama v. University of Hawaii, 92
Hawaii 268, 273-4, 990 P.2d 1150, 1156-7 (1999) (arbitrators
"normally have broad discretion to fashion appropriate
remedies").

6
NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

31. Furthermore, the Partial Award includes references
to provisions contained in the Contract, and the Court finds
that the Partial Award and Final Award do not evince any
manifest disregard of law by the Arbitrator.

Having reviewed the Partial Award and the Final Award,
we conclude that the arbitrator's interpretation of his authority
"could have rested on an interpretation and application of the
[Contract]." HSTA, 140 Hawai#i at 396, 400 P.3d at 597. On this
record, we cannot conclude that the Arbitrator exceeded the scope
of his authority. The Circuit Court did not err in so ruling.
(3) The Markiewiczes contend that the Circuit Court
erred "in finding that the Arbitrator did not refuse to consider
evidence material to the controversy." More specifically, they
argue that "[b]y denying the Markiewiczes' Motion to Compel
[Production of Documents (Motion to Compel)], the Arbitrator
prevented the Markiewiczes from presenting evidence in support of
their allegations that (1) TDI had falsely billed the
Markiewiczes, and (2) TDI's delays were not caused by any alleged
owner interference, but by its own inability to prosecute the
work." The Markiewiczes assert: "Even if the Arbitrator did not
refuse to hear any evidence during the arbitration hearing, the
Circuit Court should have found that by denying the Markiewiczes'
Motion to Compel, he effectively barred the Markiewiczes from
presenting material evidence during the same hearings."
An arbitration award must be vacated where an
arbitrator "refused to consider evidence material to the
controversy[.]" HRS § 658A-23(a)(3) (2016).
In addressing whether the arbitrator refused to
consider evidence material to the parties' dispute, the Circuit
Court concluded:

33. The Arbitrator admitted all exhibits into evidence
during the arbitration hearing, and that the parties were
allowed to call witnesses to testify, without restriction.
34. Furthermore, the Arbitrator noted in the Partial
Award that he carefully examined the evidence and the
written submissions of the parties.

35. Given the foregoing, there is no evidence that the
Arbitrator refused to consider any evidence material to the
controversy.

7
NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

36. The Arbitrator's decision to deny [the
Markiewiczes'] Motion to Compel Production of Documents, did
not amount to a refusal by the Arbitrator to consider
evidence material to the controversy, as the Arbitrator's
ruling on the Motion to Compel Production of Documents
concerned the conduct of discovery, not the conduct of the
arbitration hearing. See Hyatt Franchising, L.L.C. v. Shen
Zhen New World, LLC, 876 F.3d 900 (7th Cir. 2017).
37. The Arbitrator's denial of [the Markiewiczes']
Motion to Compel Production of Documents does not fall
within any of the provisions contained in HRS § 658A-23,
allowing vacatur.

On this record, we cannot conclude that the Arbitrator
refused to consider evidence material to the parties' dispute.
The Circuit Court did not err in reaching this conclusion.
(4) The Markiewiczes contend that "[t]he Circuit Court
abused its discretion in awarding TDI its attorney[s'] fees and
costs." They argue that "[i]n order to rule on TDI's Fee Motion,
the Circuit Court should have determined (1) whether it had
discretion under HRS § 658A-25(c), and (2) how to properly
exercise that discretion."
"HRS § 658A-25(c) allows a court to award attorney's
fees incurred in judicial proceedings to confirm an arbitration
award when a motion to confirm award under HRS § 658A-22 is
contested." RT Import, Inc. v. Torres, 139 Hawai#i 445, 451, 393
P.3d 997, 1003 (2017) (citing In re Arbitration Between United
Pub. Workers, AFSCME, Local 646, AFL-CIO & City & Cnty. of
Honolulu, 119 Hawai#i 201, 209, 194 P.3d 1163, 1171 (App. 2008));
see also HRS § 658A-25(b) (2016) (allowing for an award of
reasonable costs). Such an award:

promotes the statutory policy of finality of arbitration
awards by adding a provision for recovery of reasonable
attorney's fees and reasonable expenses of litigation to
prevailing parties in contested judicial actions to confirm,
vacate, modify or correct an award. Potential liability for
the opposing parties' post-award litigation expenditures
will tend to discourage all but the most meritorious
challenges of arbitration awards. If a party prevails in a
contested judicial proceeding over an arbitration award,
Section 25(c) allows the court discretion to award
attorney's fees and litigation expenses.

HSTA, 140 Hawai#i at 402, 400 P.3d at 603 (quoting 2000 Revised
Uniform Arbitration Act § 25 cmt. n.3).
The Circuit Court concluded that the Markiewiczes'
contentions challenging the arbitration award were without merit,

8
NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

and we have affirmed those rulings. Accordingly, the Circuit
Court's decision to award TDI its attorneys' fees and costs
pursuant to HRS § 658A-25 served the purpose of the statute. The
Circuit Court did not abuse its discretion in making this award.
For the reasons discussed above, we affirm the
following, entered by the Circuit Court of the Third Circuit:
(1) the February 2, 2021 "Findings of Fact,
Conclusions of Law and Order Re: (1) Granting
Petitioner Tinguely Development, Inc.'s Motion to
Confirm Arbitration Award, and (2) Denying
Respondents' Motion to Vacate Arbitration Award
Dated June 26, 2020";
(2) the April 13, 2021 "Final Judgment"; and
(3) the April 13, 2021 "Order Granting Petitioner
Tinguely Development, Inc.'s Non-Hearing Motion
for Attorneys' Fees and Costs Filed, February 5,
2021."

DATED: Honolulu, Hawai#i, February 21, 2025.

On the briefs:

Ryan H. Engle and
David A. Imanaka /s/ Clyde J. Wadsworth
(Bays Lung Rose & Voss) Presiding Judge
for Respondents-Appellants.

Michele-Lynn E. Luke and /s/ Karen T. Nakasone
Saori Takahashi Associate Judge
(Kessner Umebayashi Bain &
Matsunaga)
for Petitioner-Appellee. /s/ Sonja M.P. McCullen
Associate Judge

9