Jou v. Argonaut Insurance Company

Summary

The Supreme Court of Hawaiʻi considered whether Emerson M.F. Jou was entitled to appellate costs after the Intermediate Court of Appeals affirmed enforcement of a settlement agreement but vacated dismissal of a related tort action. The court held that the ICA misapplied Hawaiian Ass’n of Seventh-Day Adventists v. Wong by treating the absence of a finally determined prevailing party as categorically precluding costs. Under Hawaiʻi Rules of Appellate Procedure Rule 39(a), the appellate court must exercise discretion to determine which party prevailed on the main disputed appellate issues when a judgment is vacated or affirmed and reversed in part.

Holdings

1. When a judgment is vacated, appellate costs fall within HRAP Rule 39(a)'s fourth category and may be awarded, in the appellate court's discretion, to the party that prevailed on balance on the main disputed appellate issue.
2. The ICA misapplied Seventh-Day Adventists by treating the fact that no prevailing party had yet been determined in the entire case as an automatic bar to awarding appellate costs.
3. Jou was the prevailing party on Appeal No. 30607 because the ICA vacated the circuit court's judgment and order dismissing the 2009 action, thereby granting the sole remedy he sought on that appeal.
4. Jou was not entitled to costs for Appeal No. 30606 because the ICA affirmed the circuit court's settlement-enforcement order against him.
5. The readily discernible rationale principle discussed in Schefke does not govern HRAP Rule 39(a) cost requests, and in any event the ICA provided a readily discernible rationale for denying costs on Appeal No. 30606.

Questions Presented

1. Whether HRAP Rule 39(a) permits an appellate court to award costs when a judgment is vacated and whether the court must determine which party prevailed on the main disputed appellate issue.
2. Whether the ICA misapplied Hawaiian Ass’n of Seventh-Day Adventists v. Wong by treating the absence of a final prevailing party in the case as a bar to appellate costs.
3. Whether Jou was entitled to appellate costs for the appeal in which the ICA vacated the judgment dismissing his 2009 action.
4. Whether Jou was entitled to appellate costs for the appeal in which the ICA affirmed the settlement-enforcement order.
5. Whether the ICA was required to provide a readily discernible rationale under Schefke v. Reliable Collection Agency Ltd. for denying costs under HRAP Rule 39(a).

Disposition

vacated