Opinion
No. CAAP–14–0001032.
11-23-2015
PFLUEGER, INC., Plaintiff–Appellee, v. NOGUCHI & ASSOCIATES, INC., Defendant–Appellant, and AIU Holdings, Inc., National Union Fire Insurance Company of Pittsburgh, Pennsylvania, Defendants–Appellees, and Doe Corporations 1–10, Doe Partnerships 1–10, and Doe Entities 1–10, Defendants.
Richard B. Miller, Patricia Kehau Wall, (Tom Petrus & Miller) and Christopher Shea Goodwin, Thomas D. Sands, (with them on the opening brief), On the briefs, for Defendant–Appellant. Lyle S. Hosoda, Raina P.B. Gushiken, (Hosoda & Morikone), On the briefs, for Plaintiff–Appellee.
Richard B. Miller, Patricia Kehau Wall, (Tom Petrus & Miller) and Christopher Shea Goodwin, Thomas D. Sands, (with them on the opening brief), On the briefs, for Defendant–Appellant.
Lyle S. Hosoda, Raina P.B. Gushiken, (Hosoda & Morikone), On the briefs, for Plaintiff–Appellee.
MEMORANDUM OPINION
[136 Hawai'i 1]
Defendant–Appellant Noguchi & Associates, Inc. (Noguchi) appeals from the “Amended Final Judgment as to All Claims and All Parties,” entered July 11, 2014 in the Circuit Court of the First Circuit (circuit court).
The Honorable Jeannette H. Castagnetti presided.
The IRS issued additional grand jury subpoenas to Pflueger on July 2, 2008; July 10, 2008; July 18, 2008; and October 29, 2008. Although the record reveals that an indictment was eventually handed down, further details of the IRS dispute are irrelevant to the instant disposition.
On appeal, Noguchi contends the circuit court erred in: (1) excluding deposition testimony of out-of-state witnesses as hearsay; (2) denying its “Motion for a New Trial” filed December 13, 2013; (3) granting the “Motion to Preclude Application of the Good Faith Settlement Credit” filed by Plaintiff–Appellee Pfleuger, Inc. (Pfleuger) under Hawaii Revised Statutes (HRS) § 663–15.5 (Supp.2014); and (4) granting Pfleuger's Judgment as a Matter of Law.
I. BACKGROUND
Pfleuger is an automotive retailer and employed Noguchi as its insurance broker for over twenty years. In the event of an incident, Pfleuger would inform Noguchi according to an oral understanding between the two parties. Pfleuger communicated with Noguchi and did not have any direct communication with its insurance carriers.
In 2005, Pfleuger received notice that it was being audited by the Internal Revenue Service (IRS). Pfleuger informed Noguchi of the audit.
On May 22, 2008, Pfleuger received Grand Jury subpoenas for the production of documents in the United States District Court for the District of Hawai‘i. Upon receiving the subpoenas, Pfleuger's Chief Financial Officer, Randall Kurata (Kurata), contacted Noguchi. Glenn Maruyama, an agent at Noguchi, told Kurata that there were no claims under Pfleuger's insurance policies until the Grand Jury issued an indictment. During the relevant time, Pfleuger was insured by Defendant–Appellee National Union Fire Insurance Company of Pittsburgh, PA (National Union).
On February 11, 2009, Pfleuger notified Defendant–Appellee AIU Holdings, Inc. (AIU) and National Union of the proceedings before the Grand Jury. Dennis Van Dina (Van Dina), a claims analyst for AIU, denied coverage because the “materials submitted ... would not constitute a Claim.”
On June 10, 2009, Pfleuger filed a “Complaint for Declaratory Relief, Negeligence, Negligent Misrepresentation and Breach of the Duty of Good Faith And Fair Dealing” against AIU, National Union, and Noguchi alleging that it was entitled to coverage under its insurance policies. Pfleuger brought negligence and negligent misrepresentation claims against Noguchi, and a breach of the duty of good faith and fair dealing against AIU and National Union. In its claim for negligence against Noguchi, Pfleuger alleged the following:
20. Noguchi owed a duty to Pfleuger to tender the Grand Jury proceeding to Pfleuger's insurer.
21. Noguchi breached its duty to Pfleuger,
22. As a direct and proximate result of Noguchi's negligence, Pfleuger has been denied coverage for the Grand Jury matter and has suffered and continues to suffer financial damage, and other general and special damages in an amount to be proven at trial, and for which Noguchi is liable.
[136 Hawai'i 2]
Regarding its claim for negligent misrepresentation, Pfleuger alleged:
24. Noguchi represented to Pfleuger that the Grand Jury Proceeding was not covered under the aforementioned insurance policies.
25. Noguchi's representations were untrue and were made to Pfleuger without reasonable investigation, and with the intent to induce Pfleuger to rely thereon.
26. Pfleuger was unaware that Noguchi's representations on this point were untrue, and reasonably relied on them in declining, for a time, to further tender the Grand Jury matter directly to its insurer under the aforementioned insurance policies.
27. But for Noguchi's representations, Pfleuger would have immediately tendered the May 22, 2008 Grand Jury Subpoena to [AIU] and National Union.
28. As a proximate result of Noguchi's representations, [AIU] and National Union have denied Pfleuger's tender of the Grand Jury proceedings as untimely, and denied Pfleuger coverage under the aforementioned insurance policies.
29. As a proximate result of Noguchi's actions, Pfleuger has suffered and continues to suffer financial damage, and other general and special damages in an amount to be proven at trial, and for which Noguchi is liable.
AIU and National Union entered into a confidential settlement with Pfleuger. The circuit court found that the settlement was in good faith pursuant to HRS § 663–15.5.
On June 28, 2013, Noguchi filed its designation of excerpts from the depositions of Van Dina and Tiffany Ngeo (Ngeo), a senior complex claims director for AIU, pursuant to Hawai‘i Rules of Civil Procedure (HRCP) Rule 32.
The jury trial began on July 22, 2013. On July 26, 2013, the jury returned a special verdict for Pfleuger, assigning 30% of fault to Pfleuger and 70% fault to Noguchi.
II. STANDARD OF REVIEW
A. Admission of Depositions
“The admissibility of depositions at trial is reviewable under the abuse of discretion standard. A trial court's exercise of discretion in ruling on the admissibility of depositions will be upheld unless an abuse of discretion is manifest.” Aqa v. Hundahl, 78 Hawai‘i 230, 241, 891 P.2d 1022, 1033 (1995) (quoting Wilart Assocs. v. Kapiolani Plaza, Ltd., 7 Haw.App. 354, 362, 766 P.2d 1207, 1212 (1988)).
An abuse of discretion occurs if the trial court has “clearly exceeded the bounds of reason or disregarded rules or principles of law or practice to the substantial detriment of a party litigant.” Amfac, Inc. v. Waikiki Beachcomber Inv. Co., 74 Haw. 85, 114, 839 P.2d 10, 26 (1992).
III. DISCUSSION
A. Exclusion of Deposition Testimony
Noguchi contends the circuit court abused its discretion by excluding deposition testimony of out-of-state witnesses as hearsay. Noguchi argues that the testimony was admissible under HRCP Rule 32(a), to which the hearsay rule does not apply. At trial, Pfleuger objected to the introduction of deposition testimony evidence of two witnesses who were out-of-state based on Noguchi's failure to establish that the witnesses were unavailable for purposes of HRCP Rule 32 and because the deposition testimony was hearsay under Hawaii Rules of Evidence (HRE) Rule 802 (1993).
Although Pfleuger initially objected to the admission of the testimony based on Noguchi's failure to establish that the witnesses were “unavailable” under HRCP Rule 32, the circuit court's decision to exclude the testimony was based solely on HRE Rule 802, HRE Rule 803 (1993 and Supp.2014), and HRE Rule 804 (1993 and Supp.2014). Pfleuger clarified that its objection to the testimony was based on hearsay.
AIU Holdings, Inc. was at different times a corporate affiliate of American Insurance Group (“AIG”). National Union was a subsidiary of AIG.
[136 Hawai'i 3]
The circuit court sustained Pfleuger's request to exclude the testimony on the basis that such testimony was hearsay. Hearsay “is a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.” HRE Rule 801 (Supp 2014.). “Hearsay is not admissible except as provided by [the HRE], or by other rules prescribed by the [Hawai‘i Supreme Court], or by statute .” HRE 802.
HRCP Rule 32(a) permits a party to use “any part or all of a deposition, so far as admissible under the rules of evidence applied as though the witness were then present and testifying” where “the witness resides on an island other than that of the place of trial or hearing, or is out of State, unless it appears that the absence of the witness was procured by the party offering the deposition[.]” A party who wishes to admit such testimony must “provide to other parties and promptly file with the court ... information regarding the evidence that it may present at trial ... at least 30 days before trial.” HRCP Rule 32(b). The opposing party may object at the trial or hearing “for any reason which would require the exclusion of evidence if the witness were then present and testifying.” HRCP Rule 32(c).
Under HRCP Rule 32(a), evidentiary rules are to be applied “as though the witness were then present and testifying[.]” Thus, the conclusion that the entire deposition testimony was hearsay because it was out-of-court testimony is erroneous. Additionally, HRCP Rule 32(a) is an “other rule” prescribed by the Hawai‘i Supreme Court, falling within the explicit definitional exception in HRE Rule 802. See Nationwide Life Ins. Co. v. Richards, 541 F.3d 903, 914–15 (9th Cir.2008) (concluding that Federal Rules of Civil Procedure Rule 32(a)(3)(B) is an “other rule” prescribed by the United States Supreme Court).
Pfleuger argued at trial that Noguchi was required to provide a subpoena or letter establishing that Van Dina and Ngeo were unavailable to testify at trial. HRCP Rule 32(a)(3) allows a party to use a deposition “if the court finds ... that the witness resides ... out of the state.” HRCP Rule 32 does not require a party to provide a subpoena or letter evidencing the deponent's place of residence.
There was sufficient evidence before the circuit court to find that Van Dina and Ngeo resided out of state for the purposes of HRCP Rule 32(a)(3). Noguchi's designation of Van Dina's deposition excerpts includes Van Dina's testimony that he resides in New York, New York. Pfleuger's subpoena was addressed to Van Dina in New York, New York and the deposition was taken in New York, New York. Similarly, Ngeo's deposition was also taken in New York, New York.
In addition to the evidence establishing that the deponents resided out of state, Pfleuger waived its objection to the admissibility of Van Dina and Ngeo's deposition testimony because Pfleuger delayed its unavailability objection until after the commencement of trial. In preparation for trial, Pfleuger submitted its objections to Noguchi's designation of excerpts from Van Dina's testimony, which listed specific objections to portions of Van Dina's testimony, but did not include the HRCP Rule 32 objection to Van Dina's unavailability. Pfleuger also submitted objections to Noguchi's designation of excerpts from Ngeo's testimony, but again did not raise a HRCP Rule 32 objection to Ngeo's unavailability. At the hearing on motions in limine, the parties had an opportunity to address the designations of excerpts from deposition testimony. The circuit court allowed the deposition testimony to be used at trial with specific limitations. Pfleuger raised the unavailability objection only after trial had already begun (though Pfleuger's unavailability objection was based ultimately in hearsay rules). Pfleuger's delay in bringing its unavailability objection left Noguchi no opportunity to respond to the objection with documentary evidence. The delay amounted to a waiver of Pfleuger's right to object to the admission of the deposition testimonies of Van Dina and Ngeo at trial.
[136 Hawai'i 4]
Pfleuger argues that even if the trial court erred in sustaining its objection, the error was not prejudicial because evidence that the insurance carrier would have denied coverage was in evidence through cross-examination of Pfleuger's expert witness. Van Dina and Ngeo's testimonies directly contradict Pfleuger's claims.
Van Dina testified in his deposition that AIU had received notice of the IRS subpoena in May 2008 instead of February 2009, AIU would still not have covered Pfleuger because a Grand Jury subpoena is not a “claim” within the meaning of the AIU policy. Ngeo, a senior complex claims director within AIU, testified that after reviewing the subpoena, she agreed with Van Dina's finding that the subpoena did not fit within the definition of a “claim” under Pfleuger's policy with AIU.
Regarding its negligence claim, Pfleuger alleged, “As a direct and proximate result of Noguchi's negligence, Pfleuger has been denied coverage for the Grand Jury matter ....“ Van Dina and Ngeo's testimonies suggest that had Noguchi acted in accordance with the applicable standard of care, Pfleuger would have suffered the same harm, negating Pfleuger's causation argument. On its negligent misrepresentation claim, Pfleuger alleged, “As a proximate result of Noguchi's representations, [AIU] and National Union have denied Pfleuger's tender of the Grand Jury proceedings as untimely, and denied Pfleuger coverage under the aforementioned insurance policies .” Again, Van Dina and Ngeo's testimonies undermine the causation element of negligent misrepresentation because even had Pfleuger submitted the information to AIU in a timely manner, AIU would still have denied coverage.
At trial, Pfleuger's expert Jim Schratz (Schratz) testified that based on his review of Van Dina and Ngeo's depositions, the decision to deny coverage would have been the same regardless of when it was reported to the insurer. Schratz was questioned:
Q: Is it your opinion, that based upon your review of Mr. Van Dina's tesimony, that [AIU] would have denied this claim regardless of when it was reported by Noguchi or anyone else?
[Schratz]: The best way I can answer that question is that Mr. Van Dina, incorrectly, was pretty stubborn in his coverage opinion, saying he would deny it, but that's the best way I can answer that question.
Q: Okay. Can you turn to page 100 of your deposition.
....
Regardless of whether or not a Court determines there's coverage in this case, if, in fact, that is an issue that's presented to the Court, you would agree with me, that based on your review of the deposition testimony of Mr. Van Dina and the deposition testimony of Tiffany Ngeo that it is the position of [AIU] that regardless of when Noguchi or any other entity had reported this claim to [AIU], [AIU's] coverage denial decision would have been the same? And what was your answer?
[Schratz]: Yes, based on Van Dina's deposition testimony, yes.
[136 Hawai'i 5]
Q: And Mr. Van Dina was, in fact, your understanding, the claims representative at [AIU] who made the coverage decision regarding this matter? And your answer?
[Schratz]: Poorly trained and very inexperienced claims adjuster, but, yes. And then I issued my own motion to strike.
Pflueger argues that this testimony was sufficient to mitigate the prejudice done by excluding the testimony of Van Dina and Ngeo. However, this testimony suggests that Van Dina improperly denied coverage for Pfleuger's claim, and would have improperly denied coverage even if the claim had been submitted in a timely manner. Schratz's testimony on cross-examination does not adequately substitute the testimony likely to have been provided by Van Dina and Ngeo. As such, Schratz's testimony is insufficient to render the exclusion of Van Dina's and Ngeo's testimonies as non-prejudicial.
The testimonies of Van Dina and Ngeo were essential to Noguchi's defense against Pfleuger's accusations of negligence and negligent misrepresentation. By excluding their testimony, the circuit court disregarded rules or principles of law to Noguchi's substantial detriment. Amfac, 74 Haw. at 114, 839 P.2d at 26.
B. Remaining Points of Error
Because we have held that the circuit court's decision to exclude the testimony of Van Dina and Ngeo was reversible error which warrants a new trial, we need not address Noguchi's remaining points of error.
IV. CONCLUSION
The “Amended Final Judgment as to All Claims and All Parties,” entered July 11, 2014 in the Circuit Court of the First Circuit is vacated and this case is remanded for further proceedings consistent with this opinion.
Dissenting Opinion of REIFURTH, J.
[136 Hawai'i 5]
I respectfully dissent. Because the circuit court's ruling on Pflueger's evidentiary objection is reviewed under an abuse of discretion standard, and because the basis for the court's ruling is heavily dependent on the arguments advanced (and not advanced) by the parties, particular attention to the facts of the case is warranted.
I. Background
A. Pflueger submitted its claim to its insurance broker, Noguchi, for coverage under its Directors and Officers liability insurance policy, but Noguchi did not forward the claim to Pflueger's insurer.
National Union issued Directors and Officers liability insurance policies to Pflueger, its officers, and its directors via Pflueger's long-time insurance broker, Noguchi, for policy periods covering September 27, 2007 to September 27, 2008, and September 27, 2008 to September 27, 2009 (collectively, the “Policies”). The Policies required that National Union defend and indemnify Pflueger against covered claims.
On or about May 22, 2008, grand jury subpoenas were issued on behalf of the Internal Revenue Service and the IRS's ongoing investigation involving Pflueger, its subsidiaries, and its officers and directors. The subpoenas demanded that a Pflueger representative appear and produce certain company records.
[136 Hawai'i 6]
Pflueger's then Chief Financial Officer testified that he met with Noguchi representatives on or about that same day, and claims to have presented them with copies of the grand jury subpoenas in order to inform Noguchi of the grand jury proceeding's existence and to discuss how to proceed in obtaining the relevant documents. Pflueger and Noguchi had developed a practice over the years that if Pflueger had questions about whether or not a possible insurance claim would be covered, Pflueger was to inform Noguchi, and if the claim was likely covered, Noguchi would instruct Pflueger on how to properly file the claim. Noguchi declined to forward Pflueger's claim for reimbursement of fees/costs related to the grand jury subpoenas to the insurer, stating, however, that the claims were not covered under the Policies until indictments might be handed down.1
On or about February 11, 2009, Pflueger tendered each of the grand jury subpoenas directly to AIU,2 which is National Union's “authorized representative”, stating that its tender was effective as of the May 22, 2008 meeting with Noguchi. On or about April 29, 2009, AIU, in a letter written by Van Dina, stating that AIU's “preliminary coverage position” was that “no coverage is afforded for this matter” because the claims “w[ere] made outside the Policy Period.” Furthermore, the letter stated that even if the matter “was both made and reported as per the requirements of the Policy,” the subpoenas “would not constitute a Claim.” According to AIU, “an indictment, information or similar document is necessary for a Claim as defined” in the Policies.
Pflueger sued AIU, National Union, and Noguchi, alleging counts for declaratory relief (AIU/National Union), Negligence (Noguchi), Negligent Misrepresentation (Noguchi), and Breach of the Duty of Good Faith and Fair Dealing (AIU/National Union). Pflueger and AIU/National Union settled outside of court, and Pflueger and Noguchi proceeded to trial in late July, 2013. On July 10, 2013, the circuit court issued an “Order Granting in Part and Denying in Part Plaintiff Pflueger Inc.'s Motion for Partial Summary Judgment, Filed on May 15, 2013,” in which it ruled that the May 22, 2008 grand jury subpoenas directed at Pflueger did, in fact, constitute a “claim” under the Policies.
B. Pretrial proceedings.
On June 28, 2013, Noguchi filed its designation of excerpts from Van Dina's March 30, 2012 deposition for use at trial in lieu of Van Dina's live testimony. That same day, Pflueger and Noguchi each filed similar designations with regard to Ngeo's July 22, 2011 deposition testimony. On July 12, 2013, Pflueger filed its objections to Noguchi's designation of the Van Dina deposition. Based on the circuit court's subsequent ruling on Pflueger's motions in limine, the court allowed the deposition designations of Van Dina because they were relevant to the issue of proximate cause.
Noguchi sought to introduce excerpts from Van Dina's March 30, 2012 deposition at the following pages and relating to the following subjects (including exhibits referenced therein) (page:line): 6:9–7:3 (name, residence address, business address, current and prior employer); 7:11–7:25 (law degree and work history; 12:6–13:10 (law school, undergraduate, and work chronology); 18:17–19:5 (chronology of early employment with AIG/AIU); 24:12–24:19 (types of claims handled in early years at AIG/AIU); 26:22–27:10 (history of handling Pflueger claims for AIG/AIU); 30:7–31:14 (attempt to place this case within the context of any other Pflueger claims that he handled); 63:4–65:7 (February 11, 2009 letter from Pflueger to AIG (Exh. 5); relationship between that letter and coverage opinions dated April 29, 2009 and May 13, 2009 (Exh. 12)); 71:4–72:15 (industry meaning of “tendered” and “covered matters”); 73:3–74:2 (further discussion of “tendered” within context of Pflueger letter of February 11, 2009 and a “duty to defend” insurance policy); 74:18–76:23 (explanation of what it means when Pflueger tenders the claim to AIG/AIU; coverage versus defense; limited recollection of what happened after presentment of letter except that coverage was declined); 80:16–82:4 (limited recollection of his review of attached grand jury subpoenas; explanation of what's relevant in such cases to determine coverage); 106:2–106:10 (he wrote Exh. 10); 112:7–112:19 (even if the claim had been timely, he may not have viewed it as a claim because it was a subpoena and not an indictment); 126:2–126:10 (why he contends that a grand jury investigation is not a criminal proceeding); 135:19–137:7 (he believed at the time that there were two bases for denying coverage, untimely and not a claim, and he still believes that).
C. The circuit court sustained Pflueger's objection at trial that the deposition testimonies of Van Dina and Ngeo were inadmissible as hearsay.
[136 Hawai'i 7]
During trial, Pflueger objected to the introduction of Van Dina's deposition testimony on the basis that it was hearsay in violation of Hawai‘i Rules of Evidence Rule 802 that did not qualify for an exception under Rule 804 because Noguchi had, to that point, failed to establish the foundational fact that the witness was unavailable to testify. In response, Noguchi did not contest that it had failed to demonstrate unavailability and made no attempt to demonstrate unavailability, but argued instead that the testimony was admissible as an “admission[ ] by a party opponent” under HRE Rule 803(a)(1).
HRE Rule 803, unlike Rule 804, does not require a showing of unavailability. Compare Haw. R. Evid. 803 (“The following are not excluded by the hearsay rule, even though the declarant is available as a witness ....”), with Haw. R. Evid. 804(b) (stating in part (b) that “[t]he following are not excluded by the hearsay rule if the declarant is unavailable as a witness ...,” and defining “Unavailability as a witness” in part (a)).
The circuit court agreed that the testimony would be admitted on that basis if Noguchi could establish the required elements of the admission-by-a-party-opponent exception: (1) “[t]hat the statement was made by a party to the litigation,” and (2) “[t]hat the statement now be offered against that party.” However, Ngeo and Van Dina are National Union's (i.e., the “carrier's”) representatives and Noguchi offered their testimonies against Pflueger, so the circuit court sustained Pflueger's objection and held that the evidence should not be admitted at trial. In support of its ruling, the circuit court explained that Noguchi's response to the objection had been limited to the admission-by-a-party-opponent argument, which the court found to be insufficient. Nonetheless, the court explicitly offered Noguchi the opportunity to reconsider its response and to make an alternative argument that the court promised to entertain. Moreover, later that day, the circuit court reminded Noguchi that it had merely sustained the objection with regard to the deposition testimonies on hearsay grounds, but that it was not precluding Noguchi from calling Van Dina or Ngeo as witnesses. Nonetheless, Noguchi never re-offered the deposition testimony under any other exception to the general rule against hearsay, see generally Haw. R. Evid. Rule 802, and it never called either Van Dina or Ngeo as witnesses at trial.
Specifically, the court explained:
Okay. So plaintiff's objection at this point is that it's hearsay. You're saying this evidence is admissible under [HRE Rule.] 803(a)(1) as an admission ... by a party opponent, but that party opponent is no longer in the litigation. They have settled, and so for that—if you're offering it under [HRE Rule] 803(a)(1), I'm inclined to sustain the objection, because I understand at the time it was taken, they were a party opponent, but they are no longer a party opponent, and this evidence ... still has to be offered, ... it has to be admissible ... under a rule.
(Format altered.)
Noguchi then argued that the objection was untimely and a surprise, explaining that, in an earlier order by the circuit court, the court had set a deadline for objections to deposition designations which, Noguchi contended, had not been met. The court replied that it considered the objection to be evidentiary in nature, and that objections of that sort were not waived by any failure to make the objection as part of the designation/counter-designation process: “We don't need to raise each and every evidentiary objection before trial, whether it's through a motion in limine or through objecting to depo designations,” Accordingly, it determined, the objection was not untimely.
Rather, Noguchi argued that it was being prevented from presenting evidence of a one-time co-defendant's (i.e., the carrier's) wrong, in violation of Adams v. Yokooji, 126 Hawai‘i 420 (App.2012). The circuit court explained that Yokooji was inapplicable under the circumstances of this case, where the question was whether Van Dina's deposition testimony constituted an admission of a party opponent. (Citing to the commentary to HRE Rule 803(a) and Kekua v. Kaiser Foundation Hospital, 61 Haw. 208, 217, 601 P.2d 364, 371 (1979).) Thus, the court's ruling was based on the requirement that parties lay a proper foundation for the admission of evidence under HRE Rule 803(a)(1).
The jury found in favor of Pflueger on the issues of negligence and negligent misrepresentation and the circuit court denied Noguchi's subsequent motion for a new trial. Noguchi timely appealed and, among other arguments on appeal, contends that Pflueger's hearsay objection should have been overruled pursuant to HRCP Rule 32(a) because Van Dina and Ngeo were out-of-state at the time of trial and were therefore unavailable to testify.
II. Discussion
The majority holds that the circuit court's decision to exclude deposition testimony of Van Dina and Ngeo was reversible error that warrants a new trial. Specifically, the opinion holds that (A) the circuit court erred by concluding that the entire deposition testimony was hearsay not falling within any exception to the rule against hearsay, and (B) that such error was not harmless. I disagree as to both conclusions.
A. The deposition testimonies were not admissible as admissions of a party opponent, and the circuit court therefore did not abuse its discretion in declining to admit them at trial on that basis.
[136 Hawai'i 8]
It was not an abuse of discretion for the trial court to exclude the deposition testimony when Noguchi's only argument in response to Pflueger's objection was that the deposition testimony should be admissible as an admission by a party opponent under HRE Rule 803(a)(1). The testimony, however, was not made by either of the remaining parties to the litigation (i.e., Pflueger or Noguchi) as required. See Commentary to HRE Rule 803(a) (citing Kekua, 61 Haw. at 217, 601 P.2d at 371). Instead, the deposition testimony at issue was made by a representative of National Union, which had settled out of the case before trial.
As noted above, the circuit court took care to explain that the admission-by-a-party-opponent exception did not apply in this case. And, to that end, the court gave Noguchi multiple opportunities to present it with the proper response to the objection. Indeed, the evidence should probably have been admitted into evidence under HRE Rule 804(b)(1), which allows courts to admit former-testimony hearsay if the declarant is unavailable as a witness, but Noguchi failed to make that argument. See Commentary to Haw. R. Evid. R. 804(b)(1) (“Depositions of parties to the litigation may be usable as admissions under Rule 803(a)(1); as to other deponent-declarants, the requirement of unavailability and the conditions of this exception govern.”).
As such, the circuit court neither abused its discretion by denying Noguchi's Rule 803(a)(1) argument, nor did it abuse its discretion by failing to raise Rule 804(b)(1) sua sponte. State v. Matias, 57 Haw. 96, 101, 550 P.2d 900, 904 (1976) (“[T]his court [has] observed that ‘there can be no doubt that the making of an objection upon a specific ground is a waiver of all other objections.’ “ (quoting Choy v. Otaguro, 32 Haw. 543, 556 (1932))); State v. Gray, No. 29051, 2009 WL 1204948, at *1 (Haw.Ct.App. Apr. 29, 2009) (“A specific objection waives other objections not made.” (citing State v. Vliet, 91 Hawai‘i 288, 298–99, 983 P.2d 189, 199–200 (1999))); Tableros v. Clark Equip. Co., 85 Hawai‘i 336, 379 n.29, 944 P.2d 1279, 1322 n.29 (1997) (“Waiver will also occur when the trial objection, properly overruled, differs from that pressed on appeal.” (emphasis omitted) (quoting A. Bowman, Hawaii Rules of Evidence Manual 7–9 (1990))); accord State v. Winfrey, No. 28737, 2009 WL 1144409, at *1 (Haw.Ct.App. Apr. 29, 2009) (citing Vliet, 91 Hawai‘i at 298–99, 983 P.2d at 199–200). See generally State v. Moses, 102 Hawai‘i 449, 456, 77 P.3d 940, 947 (2003) (“As a general rule, if a party does not raise an argument at trial, that argument will be deemed to have been waived on appeal; this rule applies in both criminal and civil cases.” (citing other sources)); accord Asato v. Procurement Policy Bd., 132 Hawai‘i 333, 354 n.22, 322 P.3d 228, 249 n.22 (2014) (citing Moses, 102 Hawai‘i at 456, 77 P.3d at 947).
Nor does the fact that Van Dina's deposition transcript established that Van Dina lived and worked in New York satisfy Noguchi's obligation to bring that information to the court's attention under HRCP Rule 32(a)(3)(B), or to argue that Van Dina was therefore unavailable.
This would normally be the end of the matter except that, while appellate courts “need not consider a point that was not presented in the trial court in an appropriate manner,” they “may [also] correct any error appearing on the record” under the doctrine of plain error. Haw.Rev.Stat. § 641–2 (Supp.2014); see Haw. R.App. P. Rule 28(b)(4) (“Points not presented in accordance with this section will be disregarded, except that the appellate court, at its option, may notice a plain error not presented.”). Cf. Matias, 57 Haw. at 101, 550 P.2d at 904 (noting that, while the doctrine of plain error constitutes an exception to the general rule prohibiting appellate courts from considering grounds urged by a party that were not raised when the party made its initial objection below, but stating that plain error would not apply in the case at hand because admission of the evidence at issue depended on balancing probative value and prejudicial effect, which is the province of the trial court (citing State v. Iaukea, 56 Haw. 343, 349, 537 P.2d 724, 729 (1975)).
[136 Hawai'i 9]
Appellate courts consider three factors to determine whether justice requires review of an issue not raised below for plain error: (1) “whether the issue is of great public import”; (2) “whether consideration of the issue ... requires additional facts”; and (3) “whether its resolution will affect the integrity of the trial court's findings of fact.” In re Pub. Utils. Comm'n, 125 Hawai‘i 210, 218, 257 P.3d 223, 231 (App.2011) (quoting Okada Trucking Co. v. Bd. of Water Supply, 97 Hawai‘i 450, 458, 40 P.3d 73, 81 (2002)) (explaining that courts should only invoke the doctrine of plain error “sparingly” in civil cases); see also Liftee v. Boyer, 108 Hawai‘i 89, 98, 117 P.3d 821, 830 (App.2004) (declining to exercise plain error review where one of the three Okada factors was not present).
Here, plain error review is unwarranted. First, the issue presented is not one of “great public import” because the exclusion of Van Dina's deposition testimony did not affect the public interest. Alvarez Family Trust v. Ass'n of Apartment Owners of Kaanapali Alii, 121 Hawai‘i 474, 491, 221 P.3d 452, 469 (2009) (“[I]n civil cases, an issue is of ‘great public import’ for the purposes of plain error review only when such issue affects the public interest.”). Second, the parties conceded that Noguchi never established “unavailability” of the deposition witnesses pursuant to HRE Rule 804(a), so “consideration of the issue not raised at trial requires additional facts.” Liftee, 108 Hawai‘i at 98, 117 P.3d at 830; cf., State v. Lee, 83 Hawai‘i 267, 925 P.2d 1091 (1996) (finding that prosecution's speculation about difficulty of locating witness did not relieve it of its obligation to attempt to show legal “unavailability”). Third, in this case, resolution of the non-raised issue (i.e., by ruling that the deposition testimony should have been admitted under HRE Rule 804(b)(1)) is unlikely to “affect the integrity of the [jury]'s findings,” Liftee, 108 Hawai‘i at 9.8, 117 P.3d at 830, but only because, as explained below, the testimony was redundant. Consequently, Noguchi was not prejudiced by its exclusion, and plain error review is unwarranted.
Compare Montalvo v. Lapez, 77 Hawai‘i 282, 291, 884 P.2d 345,354 (1994) (holding that the court's failure to instruct the jury on the correct meaning of an element was so essential as to threaten the integrity of our jury system); and Fujioka v. Kam, 55 Haw. 7, 9, 514 P.2d 558, 570 (1973) (constitutionality of a statute was a matter of “great public import”); and Kobashigawa v. Silva, 126 Hawai‘i 62, 66, 266 P.3d 470, 474 (App.2011) (trial court's “incorrect statement of the law in its instruction to the jury” was an issue of great public import), aff'd, 129 Hawai‘i 313, 300 P.3d 579 (2013); with Cnty. of Haw. v. C & J Coupe Family Ltd. P'ship, 124 Hawai‘i 281, 305, 242 P.3d 1136, 1160 (2010) (“Whether the court correctly valued the property in Condemnation 2 is not of general public importance.”).
B. Even if the circuit court erred in excluding the hearsay evidence, any error in doing so was harmless because Noguchi experienced no prejudice as a result.
The majority notes that Van Dina testified in his deposition that, if AIU had timely received notice of the IRS subpoena in May 2008 instead of February 2009, “AIU would still not have covered Pflueger because a Grand Jury subpoena is not a ‘claim’ within the meaning of the AIU policy.” Based on this, the majority concludes that, “[b]y excluding the [deposition] testimony, the circuit court disregarded rules or principles of law to Noguchi's substantial detriment.” However, even if the circuit court erred in sustaining Pflueger's objection and excluding Van Dina's deposition testimony, I would still hold that the error was not prejudicial where the relevant details from that testimony were put before the jury through other admitted evidence. See State v. Rivera, 62 Haw. 120, 128, 612 P.2d 526, 531–32 (1980) (“[E]ven where error occurs, there will be no reversal where on the record as a whole, no prejudice to appellant has resulted.” (citing Kekua v. Kaiser Found. Hosp., 61 Haw. 208, 218, 601 P.2d 364, 371 (1979))).
Furthermore, although the majority observes that Ngeo testified in her deposition that she agreed with Van Dina's opinion “that there's no claim,” Ngeo's referenced testimony appears irrelevant to the argument since the circuit court ruled initially, before subsequently granting Pflueger's hearsay objection, that any potential Ngeo testimony would be limited to the AIU corporate structure because Ngeo had not reviewed the Pflueger submission contemporaneously with Van Dina. Thus, Ngeo would not have been permitted to offer the referenced testimony.
Noguchi does not address Pflueger's harmless error/cumulative argument. The majority states that Van Dina and Ngeo's testimonies “directly contradict” the claim.
[136 Hawai'i 10]
Indeed, “[e]ven an erroneous exclusion of relevant evidence does not necessarily call for reversal of the trial court, if no prejudice results [; a]nd where essentially the same evidence is given by other witnesses or other means, the trial court's exclusion of the relevant evidence consitutes harmless error.” Wakabayashi v. Hertz Corp., 66 Haw. 265, 272, 660 P.2d 1309, 1314 (1983) (citing Kekua, 61 Haw. at 218–19, 601 P.2d at 371); see also Ching v. Valencia, No. 27331, 2008 WL 3919892, at *1 n.12 (Hawai‘i Aug. 27, 2008) (citing HRS § 641–16 (1993); State v. Rivera, 106 Hawai‘i 146, 165–66, 102 P.3d 1044, 1063–64 (2004), abrogated on other grounds by State v. Maugaotega, 115 Hawai‘i 432, 168 P.3d 562 (2007); and Wakabayashi, 66 Haw. at 272, 660 P.2d at 1314). Here, Noguchi's own expert, Schratz, testified that he had reviewed Van Dina's letter in addition to his review of the deposition transcripts. The majority recognizes that Schratz's testimony referenced Van Dina's conclusion-that AIU would not have recognized the grand jury subpoenas as a claim under the Policies even if they were submitted at the time that Pflueger submitted them to Noguchi-and concludes that AIU still would have been incorrect in denying coverage on that basis.
Specifically, during Schratz's trial testimony, he confirmed that he reviewed the Van Dina and Ngeo depositions and that his opinions were based on those depositions.
It is not clear why Schratz's testimony, which describes and discusses Van Dina's conclusion, “does not adequately substitute [for] the testimony likely to have been provided by Van Dina .... [and] is insufficient to render the exclusion of Van Dina's ... testimon[y] as non-prejudicial” merely because it criticizes Van Dina's conclusion. Moreover, Noguchi's defense depended on Schratz's conclusion that Van Dina was wrong and on other exhibits establishing that AIU would likely have denied coverage regardless of when Pflueger tendered the subpoenas. Indeed, these facts arose multiple times throughout the trial. So too did the fact that the circuit court made a pre-trial ruling that the grand jury subpoenas were claims under the Policies. Therefore, since the sum of that evidence was already before the jury, I would hold that Noguchi was not prejudiced by the trial court's decision to exclude the proposed designations from Van Dina's deposition testimony.
Based on the foregoing, I would affirm the circuit court's July 11, 2014 Amended Final Judgment as to All Claims and All Parties.