Liu v. Sou

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
27-AUG-2024
07:48 AM
Dkt. 193 SO

NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

HUI LIU, Plaintiff-Appellant,
v.
MIKE MANKONE SOU; ALEC SPOUPHONE SOU; A.M. ENTERPRISES, LLC,
and ALOUN FARM, INC., Defendants-Appellees

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
(CASE NO. 1CC171001944)

SUMMARY DISPOSITION ORDER
(By: Leonard, Acting Chief Judge, Hiraoka and McCullen, JJ.)

Hui Liu appeals from the Judgment for Alec Spouphone
Sou, Mike Mankone Sou, Aloun Farm, Inc., and A.M. Enterprises,
LLC (AME) entered by the Circuit Court of the First Circuit on
February 19, 2020.1 We affirm.
Alec Sou and Mike Sou are officers of Aloun Farm and
AME. Aloun Farm had the right to use 78 acres of Hawaiian home
lands in Honouliuli (the Land) for agriculture. AME managed the
Land for Aloun Farm.
In September or October of 2016, Liu approached Mike
Sou seeking land to farm basil. Liu didn't speak, read, write,
or understand English. Liu and Sou spoke in Mandarin. Sou gave
Liu a contract (the Grower's Agreement) to take home to review.
Liu testified that when he received the Grower's Agreement he:

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The Honorable Dean E. Ochiai presided.
NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

didn't have any friends that could read or understand English;
didn't ask anyone to review or translate the contract; didn't
hire an attorney to review the contract; and wasn't forced or
threatened to sign it. He signed the Grower's Agreement and
returned it to Sou on October 18, 2016.
The Grower's Agreement gave Liu the right to farm about
10 acres of the Land for one year, with four one-year renewal
options, subject to AME's right "to withdraw all or a portion of
the Farm Land which [Liu] is allowed to farm" upon 60 days
notice, "with or without cause[.]" AME had the right of first
refusal to purchase Liu's crops at prevailing market rates.
By letter dated August 22, 2017, AME terminated the
Growers Agreement. Liu sued on November 28, 2017. After a jury-
waived trial, the circuit court entered findings of fact (FOF)
and conclusions of law (COL) on September 25, 2019. The Judgment
was entered on February 19, 2020. This appeal followed.
Liu raises 13 points of error, challenging certain FOFs
and COLs. He contends the circuit court erred in: (1) COL 13, by
failing to consider the duty to disclose "the whole truth" in
tort and misrepresentation cases; (2) COL 13, by failing to
consider the applicability of Hawaii Revised Statutes (HRS)
§ 480-12; (3) COL 17, by applying the parol evidence rule;
(4 & 5) COL 13, by not concluding there was deception and fraud,
which made COL 28 gratuitous; (6) FOFs 26-29 and COLs 5, 12, 13,
and 40, by not applying the "likely to influence consumer
decision-making" standard; (7) COL 17, by not holding HRS Chapter
480 applied; (8) COLs 15 and 16, by failing to conclude the
elements of misrepresentation and deception had been proven;
(9) FOFs 19-23 and COLs 14-16, holding against an illiterate
consumer; (10) COL 19 and 26, by failing to consider unfairness
and unconscionability; (11) failing to consider forfeiture;
(12) in COLs 11 and 12, by upholding the validity of the notice
of termination; and (13) in conjunction with other FOFs
(apparently 33-43) as a result of "Defendants' Crafty Plan to
Bring about Confusion[.]" Liu also challenges FOF nos. 8, 25,

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and 47. We address Liu's arguments to the extent we are able to
discern them.
We review findings of fact under the clearly erroneous
standard. Est. of Klink ex rel. Klink v. State, 113 Hawai#i 332,
351, 152 P.3d 504, 523 (2007). We review conclusions of law
under the right/wrong standard. Id. When a determination
presents mixed questions of fact and law, we review it under the
clearly erroneous standard because the trial court's conclusions
are dependent on the facts and circumstances of each case. Id.

Findings of Fact

The circuit court found:

8. This lawsuit arises out of a contract ("Grower's
Agreement") between [Liu] and AME for the use of
approximately 10 acres of land ("subject property")
for the purposes of farming basil in Kapolei,
Hawaii[.]

Liu argues FOF no. 8 is clearly erroneous because
"[t]here is no document captioned 'Grower's Agreement.'" The
contract at issue is titled "Agreement." The circuit court
referred to it as the "Grower's Agreement" because it referred to
Liu as the "Grower." Liu does not otherwise challenge FOF no. 8.
It is not clearly erroneous.
The circuit court found:

25. The Grower's Agreement is clear and unambiguous on its
face[.]

The determination whether a contract is ambiguous is a
conclusion of law that is freely reviewable on appeal. Hawaiian
Ass'n of Seventh-Day Adventists v. Wong, 130 Hawai#i 36, 45, 305
P.3d 452, 461 (2013). A contract is ambiguous if its terms are
reasonably susceptible to more than one meaning. Id. The
Grower's Agreement is not ambiguous. FOF no. 25 was not wrong.

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The circuit court found:

26. Paragraph 3 of the Grower's Agreement contains a
termination provision, which allows AME to terminate
the Agreement with 60-days notice with or without
cause[.]
27. Paragraph 27 of the Grower's Agreement provides that
notices are to be sent by AME to [Liu] at his home
address by registered or certified mail[.]
28. The Grower's Agreement granted Defendants a right of
first refusal for the sale of [Liu]'s basil crop[.]

The construction and legal effect to be given a
contract are conclusions of law freely reviewable on appeal.
Ass'n of Seventh-Day Adventists, 130 Hawai#i at 45, 305 P.3d at
461. FOFs 26 and 28 are not wrong. FOF 27 is wrong because the
Grower's Agreement does not refer to a "home address[.]" But as
discussed below, the letter terminating the Grower's Agreement
was properly addressed and mailed. The error is harmless.
The circuit court found:

29. [Liu] sold his basil crop to distributors other than
[Aloun Farm] and AME without providing Defendants a
right of first refusal[.]

Liu makes no argument about why this finding was
clearly erroneous. His challenge is waived. Hawai#i Rules of
Appellate Procedure (HRAP) Rule 28(b)(7) ("Points not argued may
be deemed waived.").
The circuit court found:

33. On August 22, 2017, AME terminated the Grower's
Agreement, providing 60-days notice as required under
Paragraph 3 of the Grower's Agreement and sent the
Termination Letter by certified mail[.]

34. The effective termination date of the Grower's
Agreement was 60-days following the mailing of the
termination letter, October 21, 2017[.]
35. Although the Termination Letter was returned as
undeliverable, the Termination Letter was sent as
required under the Grower's Agreement to [Liu]'s home
address[.]
36. There is no evidence that the Termination Letter was
returned due to improper service[.]

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Exhibit D-5 was the Termination Letter. It is dated
August 22, 2017. It was addressed to "Mr. Liu Hui," which was
the name for "Grower" shown in the Grower's Agreement, at the
address shown in the Grower's Agreement. Exhibit D-13 is the
envelope showing the Termination Letter was certified-mailed on
August 22, 2017, and returned to sender with the notation
"Attempted — Not Known Unable to Forward." October 21, 2017 is
60 days after August 22, 2017. FOFs 33, 34, 35, and 36 are not
clearly erroneous.
The circuit court found:

39. In [Liu]'s Declaration dated November 28, 2017, [Liu]
indicated that he was aware of the termination of his
Grower's Agreement at the time of meetings with AME,
Royal Contracting Company, and D.R. Horton in August
2017[.]

Liu's brief does not cite to the record where his
declaration can be found. We are not obligated to search the
record for information that should have been provided by Liu.
See Hawaii Ventures, LLC v. Otaka, Inc., 114 Hawai#i 438, 480,
164 P.3d 696, 738 (2007). We decline to review FOF no. 39 for
error.
The circuit court found:

43. [Liu] testified that he cut the lock at the direction
of his attorney following a court order. No such
court order exists[.]

Liu's brief cites to the transcript of proceedings on
September 17, 2019, but the cited testimony does not mention
cutting a lock or a court order. Liu's brief cites to the
temporary restraining order entered on November 29, 2017, but we
are unable to correlate the restraining order to Liu's testimony.
We decline to review FOF no. 43 for error. See Otaka, Inc., 114
Hawai#i at 480, 164 P.3d at 738.
The circuit court found:

47. Following the capping of the water, [Liu] voluntarily
vacated the subject property[.]

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Liu makes no argument about why this finding was
clearly erroneous. His challenge is waived. HRAP Rule 28(b)(7).

Conclusions of Law

The circuit court concluded:

3. [Liu]'s claims arise out of the Grower's Agreement,
termination of the Grower's agreement, and the capping
of the water supply to the subject property[.]

4. [Liu] claims he did not receive proper notice of the
termination of the Grower's Agreement[.]

5. [Liu] failed to introduce sufficient evidence, by a
preponderance of the evidence, that the termination
was improper pursuant to the Grower's Agreement and
that he did not receive proper notice of the
termination[.]

6. Defendants presented evidence that the Termination
Letter was sent to [Liu] by certified mail, as
required by Paragraph 27 of the Grower's Agreement[.]

7. [Liu] attempts to argue he did not physically see a
copy of the Termination Letter, but failed to
introduce credible evidence sufficient to support his
allegations[.]
8. Defendants presented testimony from Alec Sou that the
Termination Letter had been sent accordingly, and
later introduced into evidence (Defendants' Exhibit D-
13) the actual envelope containing the Termination
Letter sent on August 22, 2017[.]
9. The envelope was addressed with the proper address
pursuant to Paragraph 27 of the Grower's agreement[.]

10. The envelope was addressed to Liu Hui, also known as
Hui Liu, both names which [Liu] has used[.]

11. Pursuant to Paragraph 27 of the Grower's Agreement the
fact that [Liu] claims he did not actually read the
Termination Letter is not relevant because the
Termination Letter was sent via certified mail to the
address listed in the Grower's Agreement[.]

12. Accordingly, the Grower's Agreement was terminated
effective 60 days from the date the Termination Letter
was sent on August 22, 2017, which is October 21,
2017[.]

As discussed above, the letter terminating the Grower's
Agreement was properly addressed and certified mailed on
August 22, 2017. Liu does not cite to the record or quote
testimony or an offer of proof to the contrary. Paragraph 27 of

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the Grower's Agreement provides that notice "shall be deemed
conclusively to have been given on the date of such mailing[.]"
October 21, 2017 is 60 days after August 22, 2017. COL nos. 3-12
are not wrong.
The circuit court concluded:

13. Although the reasons why the Grower's Agreement was
terminated are in dispute, the reason is irrelevant
according to Paragraph 3 of the Grower's Agreement,
which allowed for termination with or without cause[.]

Liu argues "COL 13 shows that the Circuit Court refused
to take into consideration anything but contract law." The
circuit court correctly applied the unambiguous words of
paragraph 3 of the Grower's Agreement. COL no. 13 is not wrong.
The circuit court concluded:

15. [Liu] failed to introduce any clear and convincing
evidence that Defendants committed fraud,
misrepresentation, or deception in any communications
between the parties regarding the Grower's
Agreement[.]

16. There was no credible evidence at trial that
Defendants made misrepresentations regarding the terms
of the Grower's Agreement or otherwise deceived [Liu]
with respect to the terms[.]

These are mixed findings and conclusions. Liu
testified he told Sou he "wanted five years" and Sou "said it's
doable." He was given the Grower's Agreement and was told, "you
take it back, and then you come back to sign it." He testified,
"I -- I could not read it and I did not read it." The Grower's
Agreement gave Liu the right to farm the Land for one year, with
four one-year renewal options, subject to AME's right "to
withdraw all or a portion of the Farm Land which [Liu] is allowed
to farm" upon 60 days notice, "with or without cause[.]" Liu
cites no other evidence of fraud, misrepresentation, or
deception. "It is well-settled that an appellate court will not
pass upon issues dependent upon the credibility of witnesses and
the weight of evidence; this is the province of the trier of
fact." Fisher v. Fisher, 111 Hawai#i 41, 46, 137 P.3d 355, 360

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(2006) (citation omitted). COL nos. 15 and 16 are not clearly
erroneous.
The circuit court concluded:

17. The parol evidence rule is applicable so that it is
unnecessary to look beyond the Grower's Agreement
itself. The terms and conditions are clear and
unambiguous; therefore, evidence regarding the pre-
contract negotiations and opinions of the parties are
unnecessary to interpreting the terms and conditions
of the contract.

The parol evidence rule precludes the use of extrinsic
evidence to vary or contradict the terms of an unambiguous
contract. Ass'n of Seventh-Day Adventists, 130 Hawai#i at 45,
305 P.3d at 461. Liu claims — without citing to the trial
transcript — that he was asked, "What did Mr. Sou tell you as far
as the term, the length of the agreement, for you to occupy those
ten acres was concerned?" He claims defense counsel objected
based on the parol evidence rule. He claims the circuit court
sustained the objection. He correctly argues that parol evidence
is admissible to show fraud. See Pancakes of Haw., Inc. v.
Pomare Props Corp., 85 Hawai#i 300, 310-11, 944 P.2d 97, 107-08
(App. 1997). But he did not argue that his answer would show
fraudulent inducement, or otherwise make an offer of proof to the
circuit court. See State v. Lessary, 83 Hawai#i 280, 288, 925
P.2d 1104, 1112 (App. 1996) ("An offer of proof (1) permits the
[trial] judge to consider further the claim for admissibility and
(2) creates a record to be used by the appellate court in
determining whether the judge's ruling sustaining an objection
was proper." (cleaned up)). Moreover, he was allowed to testify
that he told Sou he "wanted five years" and Sou "said it's
doable." On this record, we cannot conclude that COL no. 17 was
wrong.
The circuit court concluded:

18. Since there is no evidence of any fraud,
misrepresentation, or deception by Defendants related
to [Liu]'s signing of the Grower's Agreement, all
other claims based on the signing of the Grower's
Agreement, including any claims of conspiracy fail[.]

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Liu does not cite to the record or quote evidence or an
offer of proof that would show fraud, misrepresentation, or
deception by the defendants-appellees. We cannot conclude that
COL no. 18 was wrong.
The circuit court concluded:

19. [Liu] claims that the Grower's Agreement was
unconscionable[.]
. . . .
26. The 60-day termination clause in itself is not
unconscionable[.]

Liu's brief cites no legal authority to support his
argument that a 60-day notice of termination clause is per se
unconscionable. He improperly incorporates by reference the
memorandum in support of his motion for summary judgment filed in
circuit court. We disregard his claim of error. See Kapiolani
Com. Ctr. v. A&S P'ship, 68 Haw. 580, 584, 723 P.2d 181, 184–85
(1986) (disregarding arguments made to trial court incorporated
by reference in appellate brief).
For these reasons, the Judgment entered by the circuit
court on February 19, 2020, is affirmed.
DATED: Honolulu, Hawai#i, August 27, 2024.

On the briefs:
/s/ Katherine G. Leonard
Charles S. Lotsof, Acting Chief Judge
David A. Kwock,
for Plaintiff-Appellant. /s/ Keith K. Hiraoka
Associate Judge
Steven K. Hisaka,
for Defendants-Appellees. /s/ Sonja M.P. McCullen
Associate Judge

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