LL Chan Limited Partnership v. SDB Enterprise LLC

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
17-APR-2026
08:01 AM
Dkt. 50 SO

NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

LL CHAN LIMITED PARTNERSHIP,
Plaintiff/Counterclaim Defendant-Appellee,
v.
SDB ENTERPRISE LLC, a Hawai#i limited liability company,
dba Bourbon Street Restaurant & Bar; and
BEVERLY CHAPMAN, Defendants/Counterclaimants-Appellants

APPEAL FROM THE DISTRICT COURT OF THE FIRST CIRCUIT
HONOLULU DIVISION
(CASE NO. 1DRC-XX-XXXXXXX)

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

SDB Enterprise LLC and Beverly Chapman (together, SDB)
appeal from the Judgment for LL Chan Limited Partnership entered
by the District Court of the First Circuit, Honolulu Division.
SDB challenge the District Court's Decision and Order, which
contained findings of fact, conclusions of law, and mixed
findings and conclusions.1 We affirm.
Chan leased commercial property on Alakea Street to SDB
Enterprise LLC by a Lease dated February 26, 2021. Chapman
guaranteed the Lease. On February 14, 2022, Chan sued SDB for
summary possession, unpaid rent, and other amounts due under the
Lease. SDB counterclaimed for breach of a January 21, 2021

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The Honorable Thomas A.K. Haia presided.
NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Letter of Intent and for abatement of rent under the doctrine of
impracticability. SDB filed an amended counterclaim on
September 12, 2022, adding allegations of fraud.
A judgment for possession was entered on June 15,
2022.2 Trial on Chan's claim for damages and SDB's counterclaim
was held on February 15, 16, and 23, 2023. The Decision and
Order was entered on December 29, 2023. The Judgment was entered
on April 23, 2024. This appeal followed.
SDB contend the trial court erred by excluding their
Exhibit L from evidence. They also challenge the trial court's
findings of fact and conclusions of law, some of which were mixed
findings and conclusions.
(1) Chan objected to admission of Exhibit L based on
hearsay under Rule 802 of the Hawaii Rules of Evidence (HRE).
Admission or exclusion of hearsay evidence is reviewed under the
right/wrong standard. State v. Fitzwater, 122 Hawai#i 354, 362,
227 P.3d 520, 528 (2010).
The trial transcript shows that SDB offered Exhibit L
through Richard Bain, a claim adjuster for Crawford & Company.
Crawford adjusted SDB's insurance claim for property damage at
the leased building. Crawford recommended retaining a structural
engineer "because there were things there that looked like they
were preexisting issues." Exhibit L appears to have been the
engineer's report, but we can't confirm this because the exhibit
does not appear in the record on appeal.
Bain testified that Exhibit L came from Crawford's
records. SDB moved it into evidence. Chan objected to hearsay.
SDB argued the "business records exception" applied. The court
sustained the objection.
Further questioning revealed that the person who
stamped or signed the report (Best) was not the person (Yala) who
had inspected and photographed the building with Bain. SDB again

2
SDB do not challenge the judgment for possession.

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

moved Exhibit L into evidence. Chan objected to hearsay. The
court sustained the objection based on circumstances indicating
lack of trustworthiness, citing Fitzwater.
HRE Rule 803(b)(6) provides an exception to the hearsay
rule for "records of regularly conducted activity":

A memorandum, report, record, or data compilation, in any
form, of acts, events, conditions, opinions, or diagnoses,
made in the course of a regularly conducted activity, at or
near the time of the acts, events, conditions, opinions, or
diagnoses, as shown by the testimony of the custodian or
other qualified witness, . . . unless the sources of
information or other circumstances indicate lack of
trustworthiness.

(Emphasis added.)
In Fitzwater, the supreme court held:

when an entity incorporates records prepared by another
entity into its own records, they are admissible as business
records of the incorporating entity provided that it relies
on the records, there are other indicia of reliability, and
the requirements of HRE Rule 803(b)(6) are otherwise
satisfied. The requirements of (1) reliance, and
(2) indicia of reliability do not supplant the provisions of
the rule; rather, we view them as necessary in these
circumstances to satisfy the rule's requirement that the
records were "made in the course of a regularly conducted
activity" of the incorporating entity.

122 Hawai#i at 367–68, 227 P.3d at 533–34 (emphasis added).
Here, SDB did not make a request under Hawai#i Rules of
Civil Procedure Rule 43(c); the record does not contain a copy of
Exhibit L. We do not know what was reported, whether Best (the
declarant) incorporated what was reported by Yala (the person who
inspected the building), which would be double hearsay, or how
the report was otherwise produced. See Fitzwater, 122 Hawai#i at
368, 227 P.3d at 534 (noting "the record does not clearly
establish how the speed check card was produced"). Bain admitted
not knowing why Best signed the report instead of Yala. Bain's
"testimony did not adequately establish that there were other
indicia of reliability" required under HRE Rule 803(b)(6). Id.
at 369, 227 P.3d at 535. On this record, we cannot say the
District Court was wrong to sustain Chan's objections.

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(2) SDB challenge a number of the District Court's
finding of fact, conclusions of law, and mixed findings and
conclusions. We review findings of fact under the clearly
erroneous standard, and conclusions of law de novo. Cowan v.
Exclusive Resorts PBL1, LLC, 156 Hawai#i 268, 272, 574 P.3d 288,
292 (2025). A conclusion presenting mixed questions of fact and
law is reviewed under the clearly erroneous standard because it
implicates the facts of the case. Id.
SDB's arguments challenge the weight of the evidence
before the District Court and the credibility of the witnesses.
The court specifically found Chan's representative, Larry Chan,
and SDB's property inspector, Oscar Libed, to be credible. "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." Maunalua
Bay Beach Ohana 28 v. State, 154 Hawai#i 144, 151, 547 P.3d 1174,
1181 (App. 2024), (quoting Fisher v. Fisher, 111 Hawai#i 41, 46,
137 P.3d 355, 360 (2006)), aff'd, 157 Hawai#i 150, 575 P.3d 783
(2025).
With one exception, the findings of fact challenged by
SDB were supported by substantial evidence in the record and were
not clearly erroneous.
The District Court found:

[SDB] failed to set forth any evidence that [Chan]
falsely represented, [sic] that in lieu of [SDB]'s
continuing obligations under the Lease to pay its rent,
utilities and real property taxes, [SDB] could instead pay a
total of $5,000.00 a week for rent, reimbursement of
electricity and real property taxes beginning September 14,
2021.

The finding that SDB "failed to set forth any evidence"
was clearly erroneous; Chapman briefly testified about what she
claimed was a rent novation. But Larry Chan had previously
testified the $5,000 payments were for "all the backup rent."
The court believed Larry Chan, not Chapman. Its finding that

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

Chan did not make a false representation was not clearly
erroneous.
The challenged conclusions of law were not wrong, and
the challenged combined findings and conclusions were not clearly
erroneous.
The April 23, 2024 Judgment is affirmed.
DATED: Honolulu, Hawai#i, April 17, 2026.
On the briefs:
/s/ Karen T. Nakasone
Keith M. Kiuchi Chief Judge
for Defendants/
Counterclaimants-Appellants /s/ Katherine G. Leonard
SDB Enterprise LLC Associate Judge
and Beverly Chapman.
/s/ Keith K. Hiraoka
Nathan T. Natori, Associate Judge
Philip W. Miyoshi,
for Plaintiff/Counterclaim
Defendant-Appellee
LL Chan Limited Partnership.

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