Nordic PCL Construction, Inc. v. LPIHGC, LLC

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
10-MAR-2025
08:01 AM
Dkt. 150 MO

NOS. CAAP-XX-XXXXXXX and CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

CAAP-XX-XXXXXXX
NORDIC PCL CONSTRUCTION, INC., f/k/a NORDIC
CONSTRUCTION, LTD., Plaintiff-Appellee,
v.
LPIHGC, LLC; FIDELITY AND DEPOSIT COMPANY OF MARYLAND; and
MAUI BEACH RESORT LIMITED PARTNERSHIP, Defendants-Appellants,
and LEDCOR INDUSTRIES (USA) INC., Defendant-Appellee

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
(CASE NO. 1CC181000689)

and
CAAP-XX-XXXXXXX
IN THE MATTER OF THE ARBITRATION OF NORDIC PCL
CONSTRUCTION, INC. f/k/a NORDIC CONSTRUCTION, LTD.,
Claimant-Counterclaim Respondent-Appellant,
v.
LPIHGC, LLC, Respondent-Counterclaimant-Appellee

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
(CASE NO. 1CSP-XX-XXXXXXX)

MEMORANDUM OPINION
(By: Hiraoka, Presiding Judge, Wadsworth and Nakasone, JJ.)

LPIHGC, LLC and Nordic PCL Construction, Inc. (formerly
known as Nordic Construction, Ltd.) had a dispute about Nordic's
performance of a Subcontract for concrete work on a construction
project. LPIHGC withheld payments under the subcontract. Nordic
applied for a mechanic's lien. The project's Owner, Maui Beach
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Resort Limited Partnership, posted a Bond from Fidelity and
Deposit Company of Maryland (Surety), and the mechanic's lien
case was dismissed.
LPIHGC and Nordic arbitrated their disputes. An
arbitrator made an award for LPIHGC against Nordic. The award
was vacated, and rearbitration before a new arbitrator was
ordered.
During the second arbitration, Nordic sued LPIHGC,
Owner, and Surety for a declaration that the Bond remained in
force. The defendants moved to dismiss. The Circuit Court of
the First Circuit denied the motion but certified its ruling for
interlocutory appeal.1 The Order Certifying Interlocutory Appeal
was entered on January 9, 2019. LPIHGC, Owner, and Surety's
appeal created CAAP-XX-XXXXXXX.
Meanwhile, a second arbitrator made an Interim Award
and a Final Award. The Circuit Court of the First Circuit
granted LPIHGC's motions to confirm the awards and denied
Nordic's motions to vacate or modify the awards. The Final
Judgment was entered on December 1, 2023.2 Nordic's appeal
created CAAP-XX-XXXXXXX.
We consolidated the appeals because CAAP-XX-XXXXXXX
could become moot depending on how we decide CAAP-XX-XXXXXXX. In
CAAP-XX-XXXXXXX, we affirm the December 1, 2023 Final Judgment
entered in JIMS No. 1CSP-XX-XXXXXXX. We dismiss CAAP-XX-XXXXXXX
as moot.

I. BACKGROUND

These cases have a history going back seventeen years.
Owner was building Honua Kai, a luxury condominium on Maui. See
In re Nordic PCL Constr., Inc. v. LPIHGC, LLC, 136 Hawai#i 29,
358 P.3d 1 (2015) (Nordic I). Nordic did the concrete work.

1
The Honorable Dean E. Ochiai presided.
2
The Honorable John M. Tonaki presided.

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LPIHGC found Nordic's work unacceptable. As summarized by the
second person to arbitrate the dispute:

The nature of the dispute centers around Nordic's
performance of the finish quality for concrete form and flat
work to achieve a desired smooth, flat and level criterion
for the mat slab, elevated slabs, walls, columns, lanais,
soffits and exterior formed surfaces.
In the demand for arbitration, Nordic claims and
alleges that it properly performed all the work that it was
obligated to perform in accordance with its Subcontract and
is therefore entitled to payment in full plus the payment of
a bonus.
In its counterclaim, [LPIHGC] alleges that Nordic
breached the Subcontract by failing to fully perform and
complete its contractual obligations to properly finish the
concrete surfaces, thereby resulting in [LPIHGC] incurring
costs to hire and pay third-party remedial contractors to
fix and complete Nordic's contractual obligations. [LPIHGC]
further asserts that it incurred other related expenses and
compensable delay in the completion of the Project caused by
Nordic's breach of the Subcontract.

After LPIHGC made only partial payment under the
Subcontract, Nordic applied for a mechanic's lien (the Mechanic's
Lien Case). Surety issued the Bond. Owner posted the Bond under
Hawaii Revised Statutes (HRS) § 507-45. The Mechanic's Lien Case
was dismissed on December 30, 2008. See Nordic Constr. Co. v.
Maui Beach Resort Ltd. P'ship, No. 30151, 2010 WL 1434304, at *1
(Haw. Apr. 8, 2010) (Order) (Maui Beach I).
The Subcontract provided for arbitration of disputes.
Nordic and LPIHGC arbitrated. During the arbitration, Owner
moved to discharge the Bond in the Mechanic's Lien Case. A
circuit court denied the motion without prejudice because the
arbitration was pending. See Maui Beach I, 2010 WL 1434304, at
*1.
An award (the First Award) was made on December 15,
2010. Nordic I, 136 Hawai#i at 35, 358 P.3d at 7. LPIHGC was
the prevailing party. Shortly after that, Owner again moved in
the Mechanic's Lien Case to discharge the Bond. A circuit court
granted the motion on May 16, 2011 (Discharge Order). See Nordic
Constr., Ltd. v. Maui Beach Resort Ltd. P'ship,

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No. CAAP-XX-XXXXXXX, 2019 WL 1450166, at *1 (Haw. App. Apr. 1,
2019) (Order) (Maui Beach II).
LPIHGC petitioned to confirm the First Award. Nordic
moved to vacate it. A circuit court confirmed the award and
entered a judgment for LPIHGC. Nordic appealed. In Nordic I the
supreme court vacated the judgment and directed the circuit court
to hold an evidentiary hearing on Nordic's claim of the
arbitrator's evident partiality. 136 Hawai#i at 54, 358 P.3d at
26. On March 3, 2017, the circuit court entered findings of
fact, conclusions of law, and an order. The court vacated the
First Award and ordered a new arbitration before a new
arbitrator. See In re Nordic PCL Constr., Inc. v. LPIHGC, LLC,
___ Hawai#i ___, ___ P.3d ___, 2024 WL 4341412, at *1 (App. 2024)
(Nordic II), cert. granted, No. SCWC-XX-XXXXXXX, 2025 WL 53242
(Jan. 9, 2025).
On November 14, 2017, Nordic moved for relief from the
Discharge Order in the Mechanic's Lien Case. See Maui Beach II,
2019 WL 1450166, at *1. On February 26, 2018, a circuit court
granted the motion and vacated the Discharge Order (Order
Vacating Discharge). Id. Owner appealed. We dismissed the
appeal because the Order Vacating Discharge was a final post-
judgment order and Owner's notice of appeal wasn't timely filed.
Id. at *2.
On May 4, 2018, Nordic sued LPIHGC, Surety, and Owner
for a declaration that the Bond "is legally-binding, valid, and
enforceable." LPIHGC, Surety, and Owner moved to dismiss. The
circuit court treated the motion as one for summary judgment,
held there were genuine issues of material fact because the Order
Vacating Discharge was ambiguous, denied the motion, and
certified its order for interlocutory appeal under HRS
§ 641-1(b). LPIHGC, Surety, and Owner filed a notice of appeal
on January 17, 2019, creating CAAP-XX-XXXXXXX.
Meanwhile, Nordic and LPIHGC rearbitrated their claims.
Nordic claimed it was entitled to $13,005,637 as full payment
under the Subcontract, plus a bonus. LPIHGC counterclaimed for

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$11,141,018 in damages caused by Nordic's breach of the
Subcontract. The arbitrator made an Interim Award on April 6,
2023. The Interim Award addressed "all issues submitted to the
Arbitrator in this matter except reasonable attorney fees and
costs." The arbitrator concluded that Nordic materially breached
the Subcontract; LPIHGC was not entitled to all of the damages it
claimed and "is not entitled to withhold $2,700,007 from Nordic
in labor costs budgeted but not expended by Nordic"; Nordic was
not entitled to recover delay damages or an early completion
bonus; and Nordic was liable for liquidated damages and premiums
LPIHGC paid for the Bond. The Interim Award stated:

18. [LPIHGC] is entitled to an award in the amount of
$7,197,223 under the Subcontract. The Subcontract amount
not paid to Nordic was $7,434,467. Therefore, [LPIHGC]
wrongfully withheld $237,244 from Nordic.

. . . .

A. [LPIHGC] is the prevailing party in this arbitration
having prevailed in its contested claim against [Nordic] in
the amount of $7,197,223 while [Nordic] is entitled to
recover $237,244 that was wrongfully withheld by [LPIHGC].
B. As prevailing party, [LPIHGC] is entitled to an award
of reasonable attorney fees and costs to be reduced in the
amount of $237,244 (credited to [Nordic]).

. . . .

D. Jurisdiction is retained by the Arbitrator pursuant to
the January 11, 2023 Stipulation and Order, as modified, in
order to decide the remaining issue of reasonable attorney
fees and costs and issue a Final Award in this arbitration.

The arbitrator made a Final Award on May 30, 2023.
LPIHGC's claim for fees and costs relating to the First Award was
denied; its claim for fees and costs relating to the second
arbitration was granted in part:

D. The total Final Award to [LPIHGC] is $1,937,474
($2,174,718 in reasonable attorney fees and costs minus
$237,244 credit due to [Nordic] pursuant to the Interim
Award).

On June 26, 2023, LPIHGC petitioned the circuit court
to confirm the Interim Award and Final Award. Nordic moved to

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vacate or modify the awards. The circuit court entered an order
confirming both awards and denying Nordic's motions to vacate or
modify. A $1,937,474 judgment for LPIHGC against Nordic was
entered on December 1, 2023. Nordic filed a notice of appeal on
December 11, 2023, creating CAAP-XX-XXXXXXX. We consolidated the
appeals.

II. POINTS OF ERROR

In CAAP-XX-XXXXXXX, Nordic contends the circuit court
erred by: (1) failing to vacate the award of attorney fees and
costs to LPIHGC; (2) failing to vacate the award of bond premiums
as damages to LPIHGC; (3) failing to vacate or modify the award
of damages that LPIHGC claimed for change order work it had
recovered from Owner; and (4) failing to vacate the awards or
remand to the arbitrator because the arbitrator refused to
consider Nordic's rebuttal evidence.

III. STANDARDS OF REVIEW

We review the circuit court's ruling on an arbitration
award de novo. Tatibouet v. Ellsworth, 99 Hawai#i 226, 233, 54
P.3d 397, 404 (2002).
"Judicial review of an arbitration award is confined to
the strictest possible limits, and a court may only vacate an
award on the grounds specified in HRS § 658A-23 and modify or
correct on the grounds specified in HRS § 658A-24." In re
Hawai#i State Teachers Association, 140 Hawai#i 381, 391, 400 P.3d
582, 592 (2017) (cleaned up). Courts "have no business weighing
the merits of the award." Id. at 392, 400 P.3d at 593. Parties
who arbitrate assume all hazards of the process, including the
risk the arbitrator "may make mistakes in the application of law
and in their findings of fact." Tatibouet, 99 Hawai#i at 233, 54
P.3d at 404.
The construction of, and legal effect given to, an
arbitration agreement is a question of law reviewed de novo.

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Yamamoto v. Chee, 146 Hawai#i 527, 533, 463 P.3d 1184, 1190
(2020).

IV. DISCUSSION

We first address Nordic's appeal from the December 1,
2023 Judgment confirming the Interim Award and Final Award made
in the second arbitration.

A. The arbitrator did not exceed his powers by
awarding attorney fees to LPIHGC.

HRS § 658A-23(a)(4) (2016) requires vacation of an
arbitration award if "[a]n arbitrator exceeded the arbitrator's
powers[.]" The supreme court has held that an arbitrator exceeds
their powers "by deciding matters not submitted." Mathewson v.
Aloha Airlines, Inc., 82 Hawai#i 57, 75, 919 P.2d 969, 987 (1996)
(citing Brennan v. Stewarts' Pharmacies, Ltd., 59 Hawai#i 207,
223, 579 P.2d 673, 681-82 (1978)). See, e.g., Koolau Radiology,
Inc. v. Queen's Med. Ctr., 73 Haw. 433, 436, 447-48, 834 P.2d
1294, 1296, 1301-02 (1992) (arbitration agreement limited scope
of arbitration to determining lease values and did not give
arbitrator power to decide legal issues such as statute of frauds
or parol evidence rule related to alleged oral agreement);
Krafchow v. Dongbu Ins. Co., 152 Hawai#i 248, 258, 525 P.3d 697,
707 (App. 2023) (appraiser and umpire exceeded their powers by
deciding what amounts property insurer owed to insureds — which
implicated coverage issues — rather than appraising value of what
insureds lost because of a wildfire irrespective of insurance
coverage); Nat'l Union Fire Ins. Co. v. Reynolds, 77 Hawai#i 490,
494, 889 P.2d 67, 71 (App. 1995) (holding, under arbitration
clause of underinsured motorist policy, that arbitration on
question of whether insured was "legally entitled to recover
damages" is limited to determining tortfeasor's fault and amount
of insured's damages, not whether underinsured motorist coverage
applied under any particular circumstance).

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The Subcontract's arbitration provision included this
paragraph:

(v) Powers of the Arbitrator. The arbitrator shall
have the power to decide all Disputes submitted to
arbitration hereunder in accordance with these procedures.
The arbitrator shall not have the power to decide any
Dispute that was not submitted to arbitration by the
Parties. The Parties agree that in any arbitration
proceeding conducted under these procedures, the arbitrator
shall apply Hawaii law, shall follow the terms of this
Exhibit J [to the Subcontract], and shall only have the
power to provide in the award for any remedy that would have
been available to a court deciding the same matter, subject
to the limitations and remedies contained in these
procedures.

(Emphasis added.)
Nordic argues the arbitrator exceeded his powers by
awarding attorney fees to LPIHGC in the Final Award, because "[a]
Hawai#i court could not have awarded 'prevailing party' attorneys
fees to a defendant found liable for a net judgment to the
plaintiff." Nordic's framing of the issue is too narrow.
HRS § 607-14 (2016) provides, in relevant part:

In all the courts, in all actions in the nature of
assumpsit and in all actions on a promissory note or other
contract in writing that provides for an attorney's fee,
there shall be taxed as attorneys' fees, to be paid by the
losing party and to be included in the sum for which
execution may issue, a fee that the court determines to be
reasonable . . . . The court shall then tax attorneys'
fees, which the court determines to be reasonable, to be
paid by the losing party . . . .

. . . .
The above fees provided for by this section shall be
assessed on the amount of the judgment exclusive of costs
and all attorneys' fees obtained by the plaintiff, and upon
the amount sued for if the defendant obtains judgment.

Nordic and LPIHGC each claimed the other breached the
Subcontract. Awarding attorney fees was a "remedy that would
have been available to a court deciding the same matter[.]"
Awarding attorney fees was thus within the arbitrator's power.
The Interim Award stated:

A. [LPIHGC] is the prevailing party in this arbitration
having prevailed in its contested claim against Nordic in

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the amount of $7,197,223[,] while [Nordic] is entitled to
recover $237,244 that was wrongfully withheld by [LPIHGC].
B. As prevailing party, [LPIHGC] is entitled to an award
of reasonable attorney fees and costs to be reduced in the
amount of $237,244 (credited to [Nordic]).

The arbitrator concluding that LPIHGC was the
prevailing party, if wrong, was one of the "hazards of the
arbitration process including the risk that the arbitrators may
make mistakes in the application of law[.]" Tatibouet, 99
Hawai#i at 233, 54 P.3d at 404. "A misinterpretation of law does
not amount to exceeding enumerated powers[.]" Id. at 235, 54
P.3d at 406. The arbitrator did not exceed his powers by
awarding attorney fees to LPIHGC, whom he concluded was the
prevailing party. The circuit court did not err by denying
Nordic's motion to vacate or modify under HRS § 658A-23(a)(4).

B. The arbitrator did not exceed his powers by
awarding bond premiums to LPIHGC.

LPIHGC claimed $442,313 for premiums paid for the Bond.
The arbitrator found and concluded:

153. On August 8, 2008, Nordic filed a lien claim against
the Owner to recover $8.5 million for its work to complete
the Honua Kai project. To remove the cloud on title caused
by the filing of Nordic's mechanic's lien action, the GC was
required by the Owner to post a bond for $17 million [as
required by Haw. Rev. Stat §507-45 (1998) in twice the
amount of Nordic's claim] in order to discharge Nordic's
lien application on December 2, 2008. Premiums paid by the
GC for the lien discharge bond amount to $442,312, as
reflected in GC-303A-D.
. . . .
16. [LPIHGC] is entitled to reimbursement for the premiums
it paid to acquire lien bond discharge protection as
required to discharge Nordic's lien claim in the amount of
$442,312.

A court may award costs to the prevailing party.
Hawai#i Rules of Civil Procedure Rule 54(d)(1). Bond premiums
are awardable costs. Dade v. Kuhta, 3 Haw. App. 89, 91, 641 P.2d
989, 990 (1982) (affirming award of attachment bond fee to
prevailing party). Nordic argues the arbitrator exceeded his

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authority because "[a] court deciding the same matter could only
have taxed these bond premiums as a litigation cost against
Nordic if LPI[HGC] had been determined to be the 'prevailing
party.'" (Emphasis omitted.) Whether right or wrong, the
arbitrator concluded that LPIHGC was the prevailing party. The
arbitrator did not exceed his powers by awarding bond premiums to
LPIHGC. The circuit court did not err by declining to vacate the
Final Award on that basis.

C. Nordic did not show that the awards were
procured by fraud or other undue means.

HRS § 658A-23(a)(1) (2016) requires vacation of an
arbitration award if "[t]he award was procured by corruption,
fraud, or other undue means[.]" Nordic argues $476,011 of the
damage award was procured by fraud because:

LPI[HGC]'s lead counsel falsely stated to the Arbitrator in
closing arguments at least three times that there was no
evidence in the record of any executed change order in favor
of LPI[HGC] for the claimed amounts. . . . So, LPI[HGC] was
essentially "double dipping" by seeking recovery against
Nordic for the same amounts. The Arbitrator nevertheless
made findings in his Interim Award which awarded LPI[HGC]
$476,011 in damages for amounts that Maui Beach had already
paid to LPI[HGC].

The arbitrator found:

131. The costs incurred to remediate Nordic's Scope of Work
were verified by the remedial subcontractors and subsequent
trades who described the efforts required to remediate
Nordic's substandard work.

. . . .
139. Nordic failed to provide credible evidence that
remedial work was false, fraudulent, unnecessary or
unreasonable.

The Interim Award didn't itemize the damage award but
Nordic claims, and LPIHGC doesn't dispute, that $476,011 of the
cost of work performed under the change orders was awarded to
LPIHGC.
We apply a three-prong test to determine whether fraud
is a basis for vacating an arbitration award:

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First, the movant must establish the fraud by clear and
convincing evidence. Second, the fraud must not have been
discoverable, upon the exercise of due diligence, prior to
or during arbitration. Third, the movant must demonstrate
that the fraud had a material effect on a dispositive issue
in the arbitration. . . .
. . . .

This three-prong test sets a high standard in order to
deter motions that merely seek to relitigate issues that
were already — or could have been — presented to the
arbitrator. The test therefore preserves the parties'
bargain for the judgment of an arbitrator. At the same
time, it offers relief for parties whose bargain does not
extend to a determination procured by fraud.

Low v. Minichino, 126 Hawai#i 99, 107, 108, 267 P.3d 683, 691,
692 (App. 2011) (emphasis added) (citation omitted).
(1) Nordic did not show by clear and convincing
evidence that LPIHGC's counsel intended to defraud the
arbitrator. LPIHGC's counsel submitted a declaration opposing
Nordic's motion to vacate stating: "I did misspeak in my closing
remarks when I said that there was no evidence that the Project
Owner and the GC had executed a change order covering the
$476,011 in remedial costs. . . . While I was mistaken in my
closing remarks, the mistake was not willful or intentional."
His declaration also explained his mistake.
In Low we held that "perjury may constitute a basis for
vacating an arbitration award." 126 Hawai#i at 108, 267 P.3d at
692. But "it is axiomatic that the arguments of counsel are not
evidence." State v. Quitog, 85 Hawai#i 128, 144, 938 P.2d 559,
575 (1997) (cleaned up). The circuit court's order stated: "If
every misstatement by counsel during closing argument was
interpreted as a fraud on the court, almost every jury trial
would end up in a new trial. More has to be shown than simply a
misstatement or false statement about the evidence." We agree.
Nordic did not satisfy the first prong.
(2) Even if LPIHGC's counsel had intended to defraud
the arbitrator, he didn't get away with it. Nordic caught it
during closing argument. By Nordic's own description:

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During closing argument and briefs, Nordic pointed out that
the parties' joint-exhibits contained change orders showing
that [Owner] had already paid LPI[HGC] for the amounts it
was seeking against Nordic.

Nordic did not satisfy the second prong.
(3) Nordic had to demonstrate that fraud had a
material effect on a dispositive issue in the arbitration. After
LPIHGC argued there was no evidence Owner paid LPIHGC for doing
remedial work, Nordic directed the arbitrator to specific
executed change orders showing Owner paid LPIHGC for that work.
What the arbitrator did with this information no one knows. But
the arbitrator erroneously including the change order amounts in
LPIHGC's damage award was an arbitration risk Nordic assumed.
Tatibouet, 99 Hawai#i at 233, 54 P.3d at 404. Nordic did not
satisfy the third prong and has not shown that the Interim Award
was procured by fraud. The circuit court did not err by denying
Nordic's motion to vacate or modify under HRS § 658A-23(a)(1).

D. The arbitrator did not refuse to consider
evidence material to the controversy to
Nordic's prejudice.

HRS § 658A-23(a)(3) (2016) requires vacation of an
arbitration award if the arbitrator "refused to consider evidence
material to the controversy[.]" Evidence is material to the
controversy "when it has a tendency to make the existence of any
fact that was of consequence to the determination of the action
more probable or less probable than it would be without the
evidence." Tatibouet, 99 Hawai#i at 243, 54 P.3d at 414 (cleaned
up) (quoting Mathewson, 82 Hawai#i at 78, 919 P.2d at 990);
Hawaii Rules of Evidence (HRE) Rule 401 (defining "relevant
evidence"). In Tatibouet and Mathewson the supreme court
reviewed the arbitrator's formulation of the issues and the
admitted evidence to determine whether the excluded evidence
would have been relevant under HRE Rule 401. We do so here.
According to the arbitrator: "[LPIHGC] alleges that
Nordic breached the Subcontract by failing to . . . properly

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finish the concrete surfaces, thereby resulting in [LPIHGC]
incurring costs to . . . fix and complete Nordic's contractual
obligations." The evidence showed that Nordic agreed to provide
"concrete floor finishing to specified tolerances[.]" LPIHGC
agreed that flatness and levelness tolerances had to be met when
the "floors are shored, but not necessarily when [the] shores are
struck."
Steve Baldridge was the structural engineer for Honua
Kai. Nordic's structural engineering expert John Osteraas took
Baldridge's design for areas where tile flooring was specified
and calculated that 40-73% of those areas would need leveling
even if Nordic had poured and finished them perfectly flat and
level before the shores were struck. Thus, Nordic argued, LPIHGC
did not account for post-shore-removal deflection-related surface
preparation when it priced its general contract and — by
implication — tried to recover its loss from Nordic.
LPIHGC called Baldridge as its witness. He claimed his
post-tensioned concrete slab designs never needed leveling due to
deflection:

Q. Okay. And what you're saying is that whatever
the design deflection was, you believe that that was
adequate to eliminate the need for any self-leveling or
leveling due to deflection?

A. At the level of deflections you design to, you
wouldn't need self-leveling.

Q. At all?
A. At all.

Q. Ever?
A. Ever.
Q. Okay. And is it your belief that for all of the
post-tensioned buildings that you've designed in Hawaii,
that no -- no slab leveling due to deflection was ever
required?
A. Not due to deflection. I'm sure there's been
leveling on slabs that we've been involved with.

(Emphasis added.)

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Baldridge also testified he was not aware if the
general contractors on his other Honolulu projects — Kō#ula,
A#ali#i, Ae#o, and Victoria Place — budgeted for slab leveling to
address post-tensioned slab deflection. In rebuttal, Nordic
called Igor Mokan. LPIHGC objected. This exchange occurred:

[ARBITRATOR]: Could you tell me what you're going to
be asking him?
[NORDIC'S COUNSEL]: Yes. I'm going to ask him his
name. I'm going to ask him who he works for, and it's BMK.
I'm going to ask what business BMK is in; and he's going to
say installing flooring, finishes, and whatnot.
I'm going to ask: Did BMK install any floor finishes
at Koula? And he's going to say yeah. And I said: Was
there any slab leveling done at Koula? He's going to say
yeah. I said: Was there a slabbing allowance -- slab
leveling? Yes.

I mean, were you involved in it? Yes. And was the
work done? Yes. And just describe briefly what was done
and what's the status of the amount.

And then I'm going to ask the same issue at Aeo,
basically the same answer, same issue at Aalii.

These are three projects that Mr. Baldridge says that,
you know, these were among all these buildings that never
had any slab leveling issues.

And that's it. That's all I got for him. And I --
I'm not calling him as an expert. I'm calling him as a fact
witness just to contradict what -- these arguments that they
made through Baldridge that weren't in Baldridge's report,
weren't in his declaration, and are being used to falsely
represent that on all his prior projects, there were no slab
leveling, which is not true.

[ARBITRATOR]: Isn't the major issue on impeachment,
as Mr. Baldridge testified, that there was no slab allowance
for these --
[NORDIC'S COUNSEL]: Yeah, there's no -- because there
would be no need for slab leveling on any of these things
and his knowledge --
[ARBITRATOR]: Okay. I'm going to limit the testimony
to whether or not there is a slab allowance, not what
happened.

(Emphasis added.)
Baldridge did not testify there was no slab leveling on
any of his projects. He said there was no slab leveling "due to

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deflection." He also said, "I'm sure there's been leveling on
slabs that we've been involved with." And Baldridge's claim that
slab leveling due to deflection would not be needed was already
contradicted by Osteraas's opinion that 40-73% of the areas where
tile flooring was specified would need leveling even if Nordic
had poured and finished them to be perfectly flat and level
before the shores were struck.
Nordic's opening brief describes a declaration signed
by Mokan as "submitted with Nordic's proffer to call Mr. Mokan as
a rebuttal witness during the arbitration hearing." Mokan's
declaration is dated June 27, 2023, after the April 6, 2023
Interim Award was made. The arbitrator could not have considered
Mokan's declaration as an offer of proof.
Even if Mokan's declaration had been before the
arbitrator, it would not have been material to whether Nordic's
work met flatness and levelness tolerances when the floors were
shored. Mokan's company, BMK, was the flooring subcontractor for
Kō#ula, A#ali#i, and Ae#o. Mokan stated:

8. For each of these three projects, the contractor
"shot" floor elevation laser surveys before and after the
forms and shores were removed to confirm or otherwise
address the concrete contractor's compliance with the
concrete surface tolerances for flatness and levelness
applicable to its work. This took place several months
before BMK did any of its work.

(Emphasis added.)
Nordic cites no evidence from the arbitration showing
that flatness or levelness was measured before the shoring was
removed to document Nordic's compliance with those tolerances.
The arbitrator found:

107. [Nordic]'s December 4, 2006 proposal provided
that Nordic would remediate areas that failed to meet the
3/8" gap under a 10' straightedge test based on measurements
taken after the support shores were removed. It was on this
basis that remedial work was performed at the GC's direction
and then back charged to Nordic after Nordic failed to
perform.

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Nordic cites no evidence showing how much time passed
between removal of the shores and performance of the straightedge
tests.
Mokan's declaration also stated:

5. On each of these projects, part of BMK's scope
of work was to prepare the floor slabs to receive the
specified floor finishes by performing selective grinding of
high spots and applying a "self leveling" material to low
spots on the floor slabs to achieve a floor surface profile
that would satisfy the floor surface tolerances for flatness
and levelness required for the installation of the specified
floor finishes. This work is generally referred to as "slab
leveling."

The arbitrator found:

113. There was no gap in Division 9 that prevented
Nordic from performing its obligations under the Division 3
specifications (03350). The Division 9 levelness criteria
applied to Global Stone and had nothing to do with Nordic's
failure to perform under Division 3. Global Stone itself
had expressly subcontracted and assumed all responsibility
to take all steps within its contract to receive floors
delivered by the concrete finisher at the 3/8" standard and
achieve compliance for any further efforts required to
install finish materials under Division 9. There was no
evidence that Global Stone charged for remedial work that
did not fail the 3/8" gap under a 10' straightedge remedial
standard agreed to by Nordic.

The work BMK performed on Kō#ula, A#ali#i, and Ae#o was
akin to Global Stone's work on Honua Kai. The arbitrator did not
hold Nordic responsible for the cost of Global Stone's work to
further level portions of the slabs that complied with the 3/8"
in 10-foot tolerance. On this record, we cannot conclude the
arbitrator "refused to consider evidence material to the
controversy[.]" The circuit court did not err by denying
Nordic's motion to vacate or modify under HRS § 658A-23(a)(3).

E. CAAP-XX-XXXXXXX is moot.

In Hawai#i, "mootness is an issue of justiciability[.]"
State v. Hewitt, 153 Hawai#i 33, 42, 526 P.3d 558, 567 (2023).
It is properly invoked when "events subsequent to the judgment of
the trial court have so affected the relations between the
parties that the two conditions for justiciability relevant on

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appeal — adverse interest and effective remedy — have been
compromised." Lathrop v. Sakatani, 111 Hawai#i 307, 313, 141
P.3d 480, 486 (2006).
Surety issued the Bond to secure a potential judgment
for Nordic against LPIHGC. See HRS § 507-45. The Interim Award
and Final Award were for LPIHGC and against Nordic. We are
affirming the circuit court's Final Judgment. There being no
debt for the Bond to secure, the dispute about its continuing
enforceability is moot. None of the exceptions to the mootness
doctrine — "capable of repetition, yet evading review"; "public
interest"; and "collateral consequences" — apply. See Hamilton
ex rel. Lethem v. Lethem, 119 Hawai#i 1, 5, 193 P.3d 839, 843
(2008). CAAP-XX-XXXXXXX is moot and will be dismissed.

VII. CONCLUSION

The December 1, 2023 Final Judgment entered in JIMS
No. 1CSP-XX-XXXXXXX is affirmed. CAAP-XX-XXXXXXX is dismissed as
moot.
DATED: Honolulu, Hawai#i, March 10, 2025.

On the briefs:
/s/ Keith K. Hiraoka
David Schulmeister, Presiding Judge
Keith Y. Yamada,
Anna H. Oshiro, /s/ Clyde J. Wadsworth
Michael R. Soon Fah, Associate Judge
for NORDIC PCL CONSTRUCTION,
INC., f/k/a NORDIC /s/ Karen T. Nakasone
CONSTRUCTION, LTD. Associate Judge

Terence J. O'Toole,
Judith A. Pavey,
Kukui Claydon,
Paul A. Shelowitz,
Linsey M. Lovell,
for LPIHGC, LLC; FIDELITY
AND DEPOSIT COMPANY
OF MARYLAND and MAUI BEACH
RESORT LIMITED PARTNERSHIP.

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