Adkins v. Fischer.

FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
20-OCT-2022
07:54 AM
Dkt. 68 OP

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

–––O0O–––

RICHARD K. ADKINS and BROWN EYED GIRL, LLC, an Illinois
Limited Liability Company, Plaintiffs-Appellants,
v.
GARY R. FISCHER; SAMANTHA K. FISCHER; ANINI ALOHA
PROPERTIES, INC., a Hawaii corporation, Defendants-Appellees,
and
JOHN DOES 1-10; JANE DOES 1-10; DOE PARTNERSHIPS 1-10;
DOE CORPORATIONS 1-10; AND DOE ENTITIES 1-10, Defendants,

and

GARY R. FISCHER; SAMANTHA K. FISCHER; ANINI ALOHA
PROPERTIES, INC., a Hawaii corporation, Third-Party
Plaintiffs-Appellees,
v.
STEVEN NICKENS, CBIP, INC., dba COLDWELL BANKER ISLAND
PROPERTIES, ANY J. MARVIN and HANALEI NORTH SHORE
PROPERTIES, LTD., Third-Party Defendants-Appellees,
and
JOHN DOES 1-10; JANE DOES 1-10; DOE CORPORATIONS 1-10;
AND DOE ENTITIES 1-10, Third-Party Defendants

NO. CAAP-XX-XXXXXXX

APPEAL FROM THE CIRCUIT COURT OF THE FIFTH CIRCUIT
(CIVIL NO. 13-1-0032)

OCTOBER 20, 2022

GINOZA, C.J., AND WADSWORTH AND NAKASONE, JJ.
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

OPINION OF THE COURT BY WADSWORTH, J.

This appeal stems from a dispute involving the sale of
real property in Hanalei, Hawai#i (the Property). In their
Complaint, Plaintiffs-Appellants Richard K. Adkins (Adkins) and
Brown Eyed Girl, LLC (BEG) (collectively, Plaintiffs) alleged
that Defendants/Third-Party Plaintiffs-Appellees Gary R. Fischer
and Samantha K. Fischer (the Fischers) and Defendant/Third-Party
Plaintiff-Appellee Anini Aloha Properties, Inc. (Anini Aloha)
(collectively, Defendants) failed to disclose material facts
about the Property when they sold it to Adkins. Adkins then
conveyed the Property to BEG, a limited liability company (LLC)
whose sole member was Adkins. After Plaintiffs filed their
Complaint, Defendants filed a Third-Party Complaint for
indemnification and contribution against Third-Party Defendants-
Appellees Steven Nickens (Nickens), CBIP, Inc., dba Coldwell
Banker Island Properties (CBIP), Amy J. Marvin (Marvin), and
Hanalei North Shore Properties, Ltd. (HNSP) (collectively, Third-
Party Defendants).
Defendants moved to dismiss Plaintiffs' Complaint on
the grounds that: (1) BEG lacked capacity to commence and
maintain the lawsuit, because BEG did not have a certificate of
authority to transact business in Hawai#i pursuant to HRS chapter
§ 428-1008 (2004); and (2) Adkins was not a real party in
interest, because after conveying the Property to BEG, Adkins had
no interest in the Property. CBIP, Nickens, and HNSP joined the
motion. The Circuit Court of the Fifth Circuit (Circuit Court)
agreed with Defendants' arguments and granted the motion to
dismiss with prejudice as to Defendants and as to CBIP, Nickens,
and HNSP.1/
Plaintiffs appeal from the May 8, 2018 "Final Judgment"
(Judgment), which dismissed Plaintiffs' Complaint with prejudice
as to all Defendants and Third-Party Defendants, entered by the
Circuit Court pursuant to Hawai#i Rules of Civil Procedure (HRCP)

1/
The Honorable Kathleen N.A. Watanabe presided.

2
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Rule 54(b).2/ Plaintiffs also challenge the Circuit Court's
June 19, 2017 "Order Granting (1) Defendants['] . . . Motion to
Dismiss Under HRCP Rule 17, Filed on September 29, 2016 [(Motion
to Dismiss)]; (2) . . . CBIP[ and] Nickens' Substantive Joinder
in . . . Motion to Dismiss . . . Filed on October 18, 2016; and
(3) [HNSP's] Joinder and Memorandum in Support of . . . Motion to
Dismiss . . . Filed on October 21, 2016" (Dismissal Order).
On appeal, Plaintiffs contend that the Circuit Court
erred in: (1) granting the Motion to Dismiss in violation of HRCP
Rule 17(a); (2) granting the Motion to Dismiss pursuant to HRS
§ 428-1008, where BEG obtained a certificate of authority before
the Complaint was dismissed; and (3) finding that Adkins was not
a real party in interest.
We hold that the Circuit Court did not violate HRCP
Rule 17(a) in dismissing BEG's claims against Defendants. HRCP
Rule 17(a) allows a real party in interest to ratify the
commencement of an action that has not been brought in the name
of the party who has the right sought to be enforced. Here,
BEG's claims were not dismissed on the basis that it was not a
real party in interest; rather, its claims were dismissed because
it did not have a certificate of authority when the Complaint was
filed, and thus lacked capacity to sue Defendants. In these
circumstances, Plaintiffs could not use ratification under HRCP
Rule 17(a) to remedy BEG's lack of capacity to sue.
Additionally, we hold that the Circuit Court did not
err in dismissing BEG's claims pursuant to HRS § 428-1008(a). We
construe that statute to mean that a foreign LLC transacting
business in Hawai#i may not commence or continue an action or
proceeding in the state except when the LLC has a certificate of
authority. Further, HRS § 428-1008(a) does not provide an

2/
We note that Plaintiffs' Complaint did not name Nickens, CBIP,
HNSP, and Marvin as defendants. During a May 17, 2017 hearing on the motion
to dismiss, the Circuit Court orally expressed an intent to dismiss the
Defendants' Third-Party Complaint (see infra); however, the Judgment failed to
do so. It thus appears that the Third-Party Complaint remains pending before
the Circuit Court. See Order Den. Nov. 7, 2018 Mot. to Dismiss Appeal, Adkins
v. Fischer, No. CAAP-XX-XXXXXXX, Judiciary Information Management System dkt.
56 at 4 (concluding that the Judgment does not expressly dismiss the Third-
Party Complaint, but contains the necessary express finding of "no just reason
for delay" in entry of the Judgment as to one or more but fewer than all
claims or parties, as HRCP Rule 54(b) requires).

3
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

exception when a non-compliant foreign LLC obtains a certificate
of authority prior to final judgment. Here, it is undisputed
that BEG had no certificate of authority when it commenced this
lawsuit, Defendants first raised this deficiency in their answer
to the Complaint (Answer), and BEG continued the suit for over
three years without obtaining a certificate of authority. Under
these circumstances, BEG could not cure its failure to comply
with HRS § 428-1008(a) by obtaining a certificate of authority
prior to the hearing on the Motion to Dismiss.
We further hold, however, that the Circuit Court erred
in concluding that Adkins was not a real party in interest and in
dismissing his claims on that basis. Viewed in the light most
favorable to Plaintiffs, the facts alleged in the Complaint and
the inferences drawn from those facts support a claim that Adkins
was fraudulently induced to pay more for the Property than its
fair market value and thus suffered damages in an amount to be
proved at trial. Adkins therefore asserted a sufficient interest
in the action in his own right to make him a real party in
interest.
Accordingly, we affirm in part and vacate in part the
Judgment and remand the case to the Circuit Court for further
proceedings consistent with this opinion.

I. Background

On January 28, 2013, Plaintiffs filed their Complaint.
The Complaint alleged the following operative facts, among
others:
• In 2006, the Fischers listed the Property for sale,
describing it, in part, as having a "main house plus
guest house." In January 2007, Adkins entered into a
Deposit Receipt Offer and Acceptance Form agreement
(DROA) with the Fischers to purchase the Property. The
purchase price was $1.8 million. In the Seller's Real
Property Disclosure Statement (Disclosure Statement),
the Fischers failed to disclose that their simultaneous
leasing of the two structures on the Property as
transient vacation rentals "was illegal," and that the

4
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

smaller structure "was a Workshop, not a dwelling as
defined by the [Comprehensive Zoning Ordinance (CZO)]."
In reliance on the Disclosure Statement, Adkins made
additional deposits into escrow and obtained a purchase
money loan that was deposited into escrow for the
purchase of the Property. Escrow for the transaction
closed in March 2007.
• Thereafter, Adkins conveyed his "entire[] right, title
and interest in and to" the Property to BEG. BEG was
and is "a duly organized limited liability company
under the laws of the State of Illinois, and has its
principal place of business in Franklin, Tennessee."
Adkins is BEG's "sole and managing member."
• From 2007 through 2010, Adkins and BEG leased both
structures on the Property as transient vacation
rentals. In 2010, the County of Kaua#i passed Kaua#i
County Ordinance 904, relating to single family
transient vacation rentals. Adkins and BEG applied
under the ordinance for a permit to allow both
structures to be used as nonconforming use transient
vacation rentals. During the permit process, in or
about July 2011, Adkins and BEG "learned for the first
time ever" that their leasing of the two structures as
transient vacation rentals "was illegal and in
violation of the CZO" and that the smaller structure
"was not a dwelling as defined by the CZO, but was
instead a Workshop . . . ." The designation of the
smaller structure as a workshop caused Adkins "to lose
the opportunity to obtain a [nonconforming use
transient vacation rental] permit" for the structure
and "substantially diminished the fair market value" of
the Property at the time of the purchase by Adkins and
as of the date of the Complaint.
Based on these allegations, the Complaint asserted
fourteen claims for relief, denominated as follows:

(1) Civil Conspiracy, alleged against the Fischers and
Anini Aloha;

5
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

(2) Fraudulent Concealment, alleged against the
Fischers and Anini Aloha;

(3) Fraud and/or Negligent Misrepresentation, alleged
against the Fischers;

(4) Tortious Interference with Prospective Economic
Advantage, alleged against the Fischers and Anini
Aloha;

(5) Tortious Interference with Contractual
Relationships, alleged against the Fischers and
Anini Aloha;

(6) Tortious Interference with Business Relationships,
alleged against the Fischers and Anini Aloha;

(7) Intentional Interference with Economic Relations,
alleged against the Fischers and Anini Aloha;

(8) Unfair and Deceptive Trade Practices (in violation
of HRS Chapter 480), alleged against the Fischers
and Anini Aloha;

(9) Beach of Contract, alleged against the Fischers;

(10) Breach of the Covenant of Good Faith and Fair
Dealing, alleged against the Fischers;

(11) Violation of HRS §§ 508D-1 et seq., alleged
against the Fischers;

(12) Intentional Infliction of Emotional Distress,
alleged against the Fischers and Anini Aloha;

(13) Negligent Infliction of Emotional Distress,
alleged against the Fischers and Anini Aloha; and

(14) Attorneys' Fees and Costs, alleged against the
Fischers and Anini Aloha.

Plaintiffs sought special damages, general damages, punitive
damages, treble damages under HRS Chapter 480, pre- and post-
judgment interest, attorneys' fees and costs.
On June 3, 2013, Defendants filed their Answer to the
Complaint. The Answer included an affirmative defense alleging
that "[BEG's] claims are barred because it does not have a
certificate of authority to transact business in the State of
Hawai#i."
On September 29, 2016, Defendants filed their Motion to
Dismiss. Defendants argued that under HRS § 428-1008(a), BEG's

6
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

failure to have a certificate of authority barred it from
maintaining the action in state court, so it lacked capacity to
bring the suit. Defendants also argued that after conveying the
Property to BEG, Adkins had no interest in the Property and was
not a real party in interest with the right to assert the claims
in the Complaint. Third-Party Defendants CBIP, Nickens, and HNSP
filed substantive joinders to the Motion to Dismiss.
On October 19, 2016, Plaintiffs filed a Memorandum in
Opposition to the Motion to Dismiss, and on October 24, 2016,
Defendants filed a Reply in Support of the Motion to Dismiss.
On November 10, 2016, Plaintiffs filed a supplemental
memorandum in opposition to the Motion to Dismiss, arguing that
the State's issuance of a certificate of authority to BEG on
October 28, 2016, should allow Plaintiffs to continue their
action against Defendants. On November 25, 2016, Plaintiffs
filed a supplemental brief in support of the Motion to Dismiss,
and Plaintiffs filed an additional supplemental opposition to the
Motion to Dismiss.
The Circuit Court heard the Motion to Dismiss and
joinders on May 17, 2017. Following oral argument by the
parties, the court stated in relevant part:

Counsel, the Court has read the motion to dismiss, the
opposition, the reply, the joinders that were filed, and I
believe it's quite clear on its face this Court is in
agreement with the arguments that were raised by the
defendants.

Based on your respective pleadings and arguments, this
Court is granting the motion to dismiss and this would
include the dismissal of the third-party complaints as well.

On June 19, 2017, the Circuit Court entered the
Dismissal Order, and on May 8, 2018, the Circuit Court entered
the Judgment. This appeal followed.

II. Standards of Review

A. Motion for Judgment on the Pleadings

Although styled as a "Motion to Dismiss Under HRCP Rule
17," the Motion to Dismiss should be treated as a motion for

7
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

judgment on the pleadings pursuant to HRCP Rule 12(c).3/ See Ruf
v. Honolulu Police Dept., 89 Hawai#i 315, 319, 972 P.2d 1081,
1085 (1999).
We review a circuit court's order granting a motion for
judgment on the pleadings de novo. See In re Office of
Information Practices Opinion Letter No. F16-01, 147 Hawai#i 286,
294, 465 P.3d 733, 741 (2020) (citing Hawai#i Med. Ass'n v.
Hawai#i Med. Serv. Ass'n, 113 Hawai#i 77, 91, 148 P.3d 1179, 1193
(2006)).

In a motion for judgment on the pleadings under HRCP Rule
12(c), the movant must clearly establish that no material

3/
Defendants purported to bring the Motion to Dismiss "pursuant to
Rule 17 of the [HRCP.]" As to Defendants' argument that BEG lacked capacity
to maintain the lawsuit, under HRCP Rule 9(a), a party who wishes to raise an
issue as to capacity must do so by "specific negative averment, which shall
include such supporting particulars as are peculiarly within the pleader's
knowledge." Here, Defendants' Answer included an affirmative defense alleging
that BEG's claims were barred because BEG did not have a certificate of
authority. See 5A Charles Alan Wright & Arthur R. Miller, Federal Practice
and Procedure: Civil § 1294 (4th ed.) (construing analogous Federal Rules of
Civil Procedure (FRCP) Rule 9(a): "Although the specific denial as to a
party's capacity, authority, or legal existence required by [FRCP] Rule 9(a)
may not be regarded by some — strictly speaking — as an affirmative defense,
courts tend to treat it that way.") The issue of BEG's capacity to maintain
the lawsuit was also properly raised by a pretrial motion. See id. ("A
specific denial of capacity, authority, or legal existence should be made in
the responsive pleading or, if the lack of capacity, authority, or legal
existence issue appears on the face of the pleadings or is discernible
therefrom, the issue can be raised by a motion to dismiss for failure to state
a claim for relief. A motion to strike, a motion for judgment on the
pleadings, or a motion for summary judgment may also be employed to raise
capacity challenges, although parties must be careful to avoid waiver."
(footnotes omitted)).

As to Defendants' argument that Adkins was not a real party in
interest, "a HRCP Rule 17(a) objection may be made in [a defendant's] answer
as an affirmative defense or by a pretrial motion." Lagondino v. Maldonado, 7
Haw. App. 591, 596, 789 P.2d 1129, 1132 (1990) (citing 6A Charles Alan Wright,
Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure: Civil 2d
§ 1554 (1990)); see 6A Wright, Miller & Kane, supra (3d ed. 2010) (construing
analogous FRCP Rule 17(a): "[A] real-party-in-interest objection closely
resembles the defense of failure to state a claim for relief because it
presupposes that plaintiff does not have the substantive right to enforce the
claim being made. Treated as a Rule 12(b)(6) defense, it can be raised either
by motion or in the answer." (footnote omitted)); Siemens USA Holdings, Inc.
v. U.S., 960 F. Supp. 2d 221, 223-24 (D.D.C. 2013) ("[A] motion to dismiss
under [FRCP] Rule 12(b)(6) is one proper method of bringing [a real-party-in-
interest] issue to the Court. 'A real-party-in-interest defense can be raised
as a Rule 12(b)(6) motion because the plaintiff is not the person who should
be bringing the suit,' and thus, 'the plaintiff has failed to state a claim
upon which relief can be granted.'" (original brackets and ellipsis omitted)
(quoting Whelan v. Abell, 953 F.2d 663, 672 (D.C. Cir. 1992))).

Here, the pleadings were closed when Defendants filed the Motion
to Dismiss. Accordingly, the motion is properly viewed as a motion for
judgment on the pleadings pursuant to HRCP Rule 12(c).

8
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER
issue of fact remains to be resolved and that they are
entitled to judgment as a matter of law. In considering a
motion for judgment on the pleadings, the trial court is
required to view the facts presented in the pleadings and
the inferences to be drawn therefrom in the light most
favorable to the nonmoving party.

Our task on appeal is to determine whether the circuit
court's order supports its conclusion that the movant is
entitled to judgment as a matter of law and, by implication,
that it appears beyond a doubt that the nonmoving party can
prove no set of facts in support of its claim that would
entitle it to relief under any alternative theory.

Id. (brackets omitted) (quoting Ruf, 89 Hawai#i at 319 972 P.2d
at 1085).

B. Statutory Interpretation

"The interpretation of a statute is a question of law
reviewable de novo." McLaren v. Paradise Inn Hawaii LLC, 132
Hawai#i 320, 327, 321 P.3d 671, 678 (2014) (citing Lindinha v.
Hilo Coast Processing Co., 104 Hawai#i 164, 171, 86 P.3d 973, 980
(2004)). When construing a statute, we apply the following well-
settled principles:

We first examine the language of the statute itself. If the
language is plain and unambiguous, we must give effect to
its plain and obvious meaning. Also, implicit in statutory
construction is our foremost obligation to ascertain and
give effect to the intention of the legislature, which is
obtained primarily from the language of the statute itself.
Finally, when there is doubt, doubleness of meaning, or
indistinctiveness or uncertainty of an expression used in a
statute, an ambiguity exists. When there is ambiguity, the
meaning of ambiguous words may be sought by examining the
context or resorting to extrinsic aids to determine
legislative intent.

State v. Carlton, 146 Hawai#i 16, 22, 455 P.3d 356, 362 (2019)
(internal citations omitted) (citing State v. Choy Foo, 142
Hawai#i 65, 72, 414 P.3d 117, 124 (2018); Citizens Against
Reckless Dev. v. Zoning Bd. of Appeals, 114 Hawai#i 184, 194, 159
P.3d 143, 153 (2007)). Additionally, as relevant here, the
Hawai#i legislature has directed that "[a]ll provisions of
uniform acts adopted by the State shall be so interpreted and
construed as to effectuate their general purpose and to make
uniform the laws of the states and territories which enact them."
HRS § 1–24 (2009).

9
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

III. Discussion

A. "Ratification" Under HRCP Rule 17(a)

Relying on HRCP Rule 17(a), Plaintiffs contend that the
Circuit Court should have "permitt[ed them] to ratify the action
by obtaining the certificate of authority" after the Complaint
was filed. Plaintiffs argue that allowing ratification under
Rule 17(a) "would not have affected the original complaint's
factual allegations as to the events or the parties and would in
no way prejudice the Defendants." In response, Defendants argue
that Plaintiffs "misunderstand[] . . . the distinction between
[BEG's] statutory lack of capacity, which required dismissal of
its Complaint, and the real party in interest requirement, which
was irrelevant to the dismissal as to [BEG]."
The legal concepts of real party in interest and
capacity to sue, though both addressed by HRCP Rule 17, are
distinct. HRCP Rule 17(a) provides, in relevant part:

Rule 17. PARTIES PLAINTIFF AND DEFENDANT; CAPACITY.
(a) Real party in interest. Every action shall be
prosecuted in the name of the real party in interest . . . .
No action shall be dismissed on the ground that it is not
prosecuted in the name of the real party in interest until a
reasonable time has been allowed after objection for
ratification of commencement of the action by, or joinder or
substitution of, the real party in interest; and such
ratification, joinder, or substitution shall have the same
effect as if the action had been commenced in the name of
the real party in interest.

See Kahala Royal Corp. v. Goodsill Anderson Quinn & Stifel, 113
Hawai#i 251, 279, 151 P.3d 732, 760 (2007) ("HRCP Rule 17(a)
. . . requires the prosecution of an action 'in the name of the
party who, by the substantive law, has the right sought to be
enforced[.]'" (footnote omitted) (quoting Lagondino, 7 Haw. App.
at 596, 789 P.2d at 1132)); 6A Wright, Miller & Kane, supra
§ 1542 (construing analogous FRCP Rule 17(a): "[T]he real-party-
in-interest principle is a means to identify the person who
possesses the right sought to be enforced.").
HRCP Rule 17(c), on the other hand, allows the trial
court to appoint a next friend or guardian ad litem for a minor
or "incompetent person," i.e., a person lacking legal capacity to

10
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

sue, for purposes of prosecuting a lawsuit. See Leslie v. Estate
of Tavares, 91 Hawai#i 394, 400, 984 P.2d 1220, 1226 (1999); see
also Moore v. Matthew's Book Co., 597 F.2d 645, 647 (8th Cir.
1979) ("The question of capacity to sue is whether the person
bringing the suit has authority to use the courts of that
jurisdiction." (citing Basch v. Talley Indus., Inc., 53 F.R.D. 9
(S.D.N.Y. 1971))); 6A Wright, Miller & Kane, supra, § 1542
("capacity is conceived to be a party's personal right to
litigate in a federal court"). Thus, it is possible to be the
real party in interest and yet lack capacity to sue because, for
example, the party is a minor or has become mentally incompetent,
see 6A Wright, Miller & Kane, supra, § 1542, or is a business
entity that lacks the statutory authority to sue, see, e.g., In
re Village of Chestnut Ridge v. Town of Ramapo, 45 A.D.3d 74, 80
(N.Y. App. Div. 2007).
Here, the Motion to Dismiss did not assert, and the
Circuit Court did not rule, that BEG was not a real party in
interest under HRCP Rule 17(a). Rather, Defendants argued and
the Circuit Court agreed that BEG lacked capacity to bring suit
against Defendants because BEG did not have a certificate of
authority under HRS chapter 428 when the Complaint was filed.
Plaintiffs cite no authority, and we have found none, suggesting
that "ratification" under HRCP Rule 17(a) can be used to remedy a
plaintiff's lack of legal capacity to sue. Thus, the Circuit
Court did not violate HRCP Rule 17(a) in dismissing BEG's claims
against Defendants. The dispositive issue, which we address
below, is whether BEG lacked capacity to "maintain an action or
proceeding" against Defendants pursuant to HRS § 428-1008(a)
prior to dismissal of the Complaint.

B. Failure to Obtain a Certificate of Authority

Plaintiffs contend that the Circuit Court erred in
granting the Motion to Dismiss pursuant to HRS chapter 428, where
BEG had obtained a certificate of authority before the motion was
heard, thus "cur[ing]" BEG's initial failure to comply with the
"registration requirements" of chapter 428. Plaintiffs further
argue that nothing in the statute or its legislative history

11
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

reflects an intent "to revoke the [capacity] of a foreign LLC to
file suit if a foreign LLC fails to obtain a certificate of
authority prior to the commencement of the action." In response,
Defendants argue that HRS § 428-1008(a) prevents an LLC that has
failed to obtain a certificate of authority from commencing or
continuing an action in this state, and that the legislature did
not intend to allow a foreign LLC to cure such a failure after
commencing litigation.
Hawaii's Uniform Limited Liability Company Act (LLC
Act), HRS chapter 428, is "based in significant part on the
Uniform Limited Liability Company Act [(ULLCA)] adopted in 1994
by the National Conference of Commissioners on Uniform State
Laws[.]" Conf. Comm. Rep. No. 82 on S.B. No. 2723, in 1996 House
Journal, at 996-97, in 1996 Senate Journal, at 778-79. HRS
§ 428-1002 (Supp. 2021) allows foreign LLCs4/ to obtain a
certificate of authority to transact business in Hawai#i. HRS
§ 428-1008 addresses the effects of an LLC's failure to obtain
such a certificate. As set forth below, the failure of a foreign
LLC to have a certificate of authority does not prevent that LLC
from "defending" an action or proceeding in Hawai#i, but does
prevent it from "maintaining" an action or proceeding in the
state:
§ 428-1008 Effect of failure to obtain certificate of
authority. (a) A foreign limited liability company
transacting business in this State may not maintain an
action or proceeding in this State unless it has a
certificate of authority to transact business in this State.
(b) The failure of a foreign limited liability
company to have a certificate of authority to transact
business in this State does not impair the validity of a
contract or act of the company or prevent the foreign
limited liability company from defending an action or
proceeding in this State.
(c) Limitations on the personal liability of
managers, members, and their transferees are not waived
solely by transacting business in this State without a
certificate of authority.
(d) If a foreign limited liability company transacts
business in this State without a certificate of authority,

4/
A foreign LLC is defined as "an unincorporated entity organized
under laws other than the laws of this State which afford limited liability to
its owners comparable to the liability under [HRS] section 428-303 and is not
required to obtain a certificate of authority to transact business under any
law of this State other than this chapter." HRS § 428-101 (2004).

12
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER
service of process may be made upon the company as set forth
in section 428-110(b) at any address used by the company as
its address for purposes of its business transactions.
(e) A foreign limited liability company which
transacts business in this State without a certificate of
authority, shall be liable to the State in an amount equal
to all fees and penalties which would have been imposed by
this chapter upon that foreign limited liability company had
it obtained such a certificate and filed all records and
reports required by this chapter. The attorney general may
bring proceedings to recover all amounts due this State
under the provisions of this section.

(Emphases added).
Here, there is no dispute that BEG was a foreign LLC
transacting business in Hawai#i subject to the provisions of HRS
§ 428-1008. Additionally, Plaintiffs appear to concede that when
they filed their Complaint, BEG did not have a certificate of
authority. Plaintiffs argue, however, that HRS § 428-1008(a)
bars only "maintaining" an action in these circumstances, which
Plaintiffs construe as a bar on "continuing" rather than
"commencing" an action. Plaintiffs further argue that before the
Motion to Dismiss was heard, BEG obtained a certificate of
authority, allowing it to continue its suit against Defendants
and rendering the Motion to Dismiss moot.
Defendants, on the other hand, argue that "[t]he phrase
'maintain an action' means 'the commencement of an action or the
continuation of an action already begun[,]'" as stated in P.K.
Springfield, Inc. v. Hogan, 621 N.E.2d 1253, 1258 (Ohio 1993)
(citing Black's Law Dictionary 859 (5th ed. Rev. 1979)).
Defendants construe HRS § 428-1008(a) to mean that, "except when
a foreign LLC possesses a certificate of authority, it cannot
commence or continue an action in State courts." Defendants
argue that because BEG did not have a certificate of authority
when it filed suit, it lacked capacity to sue them, and the plain
language of HRS § 428-1008 precludes a foreign LLC from "curing"
that lack of capacity by later obtaining a certificate of
authority.
Pursuant to HRS § 428-1008(a), a foreign LLC such as
BEG may not "maintain an action or proceeding" in Hawai#i "unless
it has a certificate of authority . . . ." The quoted phrases

13
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

are not defined in HRS chapter 428.5/

To effectuate a statute's plain language, its words "must
'be taken in their ordinary and familiar signification, and
regard is to be had to their general and popular use.'" See
State v. Guyton, 135 Hawai#i 372, 378, 351 P.3d 1138, 1144
(2015) (quoting In re Taxes of Johnson, 44 Haw. 519, 530,
356 P.2d 1028, 1034 (1960)); see also HRS § 1–14 (2009). "In
conducting a plain meaning analysis, 'this court may resort
to legal or other well accepted dictionaries as one way to
determine the ordinary meaning of certain terms not
statutorily defined.'" Guyton, 135 Hawai#i at 378, 351 P.3d
at 1144 (quoting State v. Pali, 129 Hawai#i 363, 370, 300
P.3d 1022, 1029 (2013)).

Wells Fargo Bank, N.A. v. Omiya, 142 Hawai#i 439, 449–50, 420
P.3d 370, 380–81 (2018).
Black's Law Dictionary includes multiple definitions of
"maintain," including the definition relied on by Plaintiffs,
"[t]o continue (something)." Black's Law Dictionary 1142 (11th
ed. 2019). But Black's also defines "maintain" as "[t]o assert
(a position or opinion)[,]" id., lending support to Defendants'
position that the phrase "maintain an action" means "the
commencement of an action or the continuation of an action
already begun." These differing definitions suggest ambiguity in
the phrase "maintain an action or proceeding."
Black's does not define "unless," but Webster's does.
"Unless" means "except under the circumstances that[.]"
Webster's Encyclopedic Unabridged Dictionary 2080 (1996 ed.).
The same source defines "have" as "to possess[,]" which fits the
context of HRS § 428-1008. Id. at 877.
To the extent there is ambiguity in the phrase
"maintain an action or proceeding," we may examine the
legislative history of HRS chapter 428. As Plaintiffs point out,
the purpose of the LLC Act was to allow for the formation of LLCs
in Hawai#i, with the goal of "provid[ing] an attractive incentive
for new businesses to be established in the State" and
"promot[ing] economic development in the State." Conf. Comm.
Rep. No. 82 on S.B. No. 2723, in 1996 House Journal, at 996-97,
in 1996 Senate Journal, at 778-79. Although the legislative
history does not spell out the specific purpose of HRS

5/
The language of HRS § 428-1008(a) is identical to that of ULLCA
§ 1008(a). The ULLCA also does not define the quoted phrases.

14
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

§ 428-1008, it is reasonable to infer based on the section's
plain language that the legislature intended to encourage foreign
LLCs doing business in Hawai#i to obtain certificates of
authority before seeking affirmative relief in the state's
courts.
In construing the phrase "maintain an action or
proceeding," we may also examine HRS § 428-1008 in the context of
HRS § 414-432 (2004), which addresses the consequences of a
foreign corporation's failure to obtain a certificate of
authority to transact business in Hawai#i pursuant to HRS § 414-
432. See Omiya, 142 Hawai#i at 450, 420 P.3d at 381 ("What is
clear in one statute may be called upon in aid to explain what is
doubtful in another.'" (quoting State v. Kamana#o, 118 Hawai#i
210, 218, 188 P.3d 724, 732 (2008)). HRS § 414-432 states, in
relevant part:

Consequences of transacting business without
authority. (a) A foreign corporation transacting business
in this State without a certificate of authority may not
maintain a proceeding in any court in this State until it
obtains a certificate of authority.
. . . .

(c) A court may stay a proceeding commenced by a
foreign corporation, its successor, or assignee until it
determines whether the foreign corporation or its successor
requires a certificate of authority. If it so determines,
the court may further stay the proceeding until the foreign
corporation or its successor obtains the certificate.
. . . .

(e) Notwithstanding subsections (a) and (b), the
failure of a foreign corporation to obtain a certificate of
authority does not impair the validity of its corporate acts
or prevent it from defending any proceeding in this State.

(Emphases added.)
HRS § 414-432(a) substantially mirrors HRS §
428-1008(a) to the extent that both a foreign LLC and a foreign
corporation transacting business in Hawai#i without a certificate
of authority may not "maintain" a "proceeding"6/ in Hawai#i

6/
Black's Law Dictionary defines "proceeding," in relevant part, as
follows:

1. The regular and orderly progression of a lawsuit,
including all acts and events between the time of
(continued...)

15
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

"unless" (in the case of a foreign LLC) or "until" (in the case
of a foreign corporation) the entity obtains a certificate of
authority. However, in contrast to HRS § 428-1008, HRS § 414-432
includes an express stay and cure provision, i.e., HRS § 414-
432(c), which authorizes a court to stay a proceeding "commenced"
by a foreign corporation without a required certificate of
authority "until" the corporation (or its successor) obtains the
certificate. Such a stay and cure provision would presumably not
be necessary but for the effect of HRS § 414-432(a) on the
corporation's capacity to commence as well as to continue the
proceeding without a certificate of authority. Stated
differently, a court would not need to stay a proceeding
"commenced" by a foreign corporation without a certificate of
authority if such corporation had the capacity to commence the
proceeding and merely had to obtain the requisite certificate at
some point prior to judgment or other termination of the
proceeding. Comparing HRS § 428-1008 to HRS § 414-432 thus
supports the conclusion that the phrase "maintain an action or
proceeding" means the commencement or continuation of an action
or proceeding.7/

6/
(...continued)
commencement and entry of judgment. 2. Any procedural means
for seeking redress from a tribunal or agency. 3. An act or
step that is part of a larger action. 4. The business
conducted by a court or other official body; a hearing. 5.
Bankruptcy. A particular dispute or matter arising within a
pending case — as opposed to the case as a whole.
"'Proceeding' is a word much used to express the
business done in courts. A proceeding in court is an
act done by the authority or direction of the court,
express or implied. It is more comprehensive than the
word 'action,' but it may include in its general sense
all the steps taken or measures adopted in the
prosecution or defense of an action, including the
pleadings and judgment. . . ."
Black's Law Dictionary at 1457 (quoting John W. Salmond, Essays in
Jurisprudence and Legal History 3-4 (1891)); see id. (further describing the
term "action," making it clear that an "action" also means a lawsuit brought
in court).
7/
Defendants also correctly observe that the Hawai #i legislature has
used the phrase "maintain an action" in other contexts seemingly to indicate
the commencement, as well as the continuation, of an action. See, e.g., HRS
§ 663-3(a) (2016) ("When the death of a person is caused by the wrongful act .
. . of any person, the deceased's legal representative . . . may maintain an
action against the person causing the death . . . ."); HRS § 668-8.5 (2016)
(continued...)

16
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Comparing these two statutes also sheds light on
Plaintiffs' argument that BEG "cured" its initial failure to
comply with HRS § 428-1008(a) by obtaining a certificate of
authority prior to the hearing on the Motion to Dismiss. HRS
§ 414-432 prohibits a foreign corporation without a certificate
of authority from maintaining a proceeding "until" it obtains a
certificate. (Emphasis added.) When used as a conjunction,
"until" means "up to the time that or when[.]" Webster's
Encyclopedic Unabridged Dictionary, supra, at 2089; see Capital
City Energy Group, Inc. V. Kelley Drye & Warren LLP, No. 2:11-cv-
00207, 2011 WL 5175617, at *4 (S.D. Ohio Oct. 31, 2011) ("The
meaning of the word 'until' provides an inference that a
proceeding may be continued once a foreign corporation obtains a
license."). HRS § 414-432 also expressly provides a foreign
corporation an opportunity to cure a lack of certificate, by
authorizing the court to stay a proceeding to determine if the
corporation requires a certificate of authority and, if it does,
to continue the stay "until the foreign corporation . . . obtains
the certificate." HRS § 414-432(c) (emphasis added).
By contrast, HRS § 428-1008(a) uses the word "unless"
rather than "until," and includes no provision for a stay pending
an LLC's obtaining a certificate. The legislature's use of the
word "until" in HRS § 414-432, along with the express stay and
cure provision, reflects the legislative intent to allow a
foreign corporation to cure, during the pendency of a proceeding,
a failure to obtain a certificate before filing suit. The same
intent is not reflected in the language of HRS § 428-1008. Had
the legislature intended to afford foreign LLCs the same

7/
(...continued)
(in real property partition actions, "a person who . . . claims to hold by
[paramount title] . . . may maintain an action asserting that person’s title
against any or all of the parties"); HRS § 605-15.2 (2016) ("the attorney
general may maintain a criminal action against any person who violates section
605-14"); HRS § 605-15.1 (2016) ("The attorney general or any bar association
in this State may maintain an action for violations of section 605-14."); HRS
§ 603-23.5 (2016) ("Any person . . . or the attorney general or any county
attorney, prosecuting attorney, or corporation counsel may maintain an action
to enjoin a continuance of any act in violation of section 708-871 . . . .");
HRS § 634-1 (2016) ("The assignee of any nonnegotiable chose in action,
assigned in writing, may maintain thereon in the assignee's own name any
action which, but for the assignment, might be maintained by the assignor
. . . .").

17
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

opportunity to cure their non-compliance with state law in this
context, it presumably would have done so. See, e.g., Lanai Co.
v. Land Use Comm'n, 105 Hawai#i 296, 318, 97 P.3d 372, 394 (2004)
("If the legislature intended to grant the LUC enforcement powers
it could have expressly provided the LUC with such power.");
Morgan v. Planning Dep't, County of Kaua#i, 104 Hawai#i 173, 188,
86 P.3d 982, 997 (2004) (ruling that if the legislature had
intended to grant the commission injunctive powers, it would have
done so expressly).
Case law in other jurisdictions with LLC statutes
similar to HRS § 428-1008 also undermines Plaintiffs' cure
argument. For example, in Sta-Rite Industries, LLC v. Preferred
Pump & Equipment, No. 5:08 CV 1072, 2008 WL 3874676 (N.D. Ohio
Aug. 14, 2008), the court applied an Ohio statute providing that
"a foreign [LLC] transacting business in [Ohio] may not maintain
any action or proceeding in any court of this state until it has
registered in this state in accordance with [various code
sections]." Id. at *1 (original brackets omitted) (quoting Ohio
Rev. Code § 1705.58(A) (since repealed)). The court dismissed
the action, holding that the law required "a [LLC] to register
pursuant to [statute] before filing an action in Ohio and that
failure to do so cannot be cured by subsequent registration."
Id. at *3; see Blues Events, LLC v. Lincoln Prof'l Baseball,
Inc., No. 4:13-CV-3101, 2014 WL 347059, at *3 (D. Neb. Jan. 30,
2014) (holding that under Nebraska's Limited Liability Company
Act, which contains language identical to HRS section
428-1008(a), the plaintiff, lacking a certificate of authority,
"lacks capacity under Nebraska law to bring these claims in
Nebraska.").8/

8/
Similarly, in P.K. Springfield, the court construed an Ohio
statute providing that "no foreign corporation which should have obtained such
license shall maintain any action in any court until it has obtained such
license." 621 N.E.2d at 1256 (emphasis omitted) (quoting Ohio Rev. Code
§ 1703.29(A)). The court held:
[T]he beginning or continuation of an action by an
unlicensed corporation clearly violates [the statute].
Furthermore, the statute does not expressly provide an
exception in cases where the corporation acquires a license
prior to judgment, or indeed at any other time after it
commences the action. Thus, the failure of a corporation to
(continued...)

18
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

Plaintiffs' reliance on Nolte v. MT Tech. Enters., LLC,
726 S.E.2d 339 (Va. 2012), and A Guy Named Moe, LLC v. Chipotle
Mexican Grill of Colo., LLC, 135 A.3d 492 (Md. 2016), is
misplaced. Both cases are readily distinguishable from this one,
based on the differing language of the controlling LLC statutes,
which the courts construed as allowing a non-compliant foreign
LLC to "cure" its failure to comply with state registration
requirements.
In Nolte, the Virginia LLC statute stated that "a
foreign limited liability company transacting business in the
Commonwealth may not maintain any action, suit, or proceeding in
any court of the Commonwealth until it has registered in the
Commonwealth." 726 S.E.2d at 345 (original emphasis and brackets
omitted) (quoting Va. Code Ann. § 13.1-1057(A)). The court
relied on a prior case construing similar language in a statute
that imposed a registration requirement on a foreign corporation.
In the prior case, the court reasoned in part that the language
"takes no right away from the offending party after compliance.
When its terms are met, the barriers theretofore existing are
removed." Id. (emphasis added). Although the court in Nolte also
construed "maintain" as meaning to continue rather than to
commence, it appears that the statute's use of the phrase "until
it has registered" led the court to conclude that an LLC could
cure a failure to comply with registration requirements during
litigation. Cf. Capital City Energy Group, Inc., 2011 WL
5175617, at *4 ("The meaning of . . . 'until' provides an
inference that a proceeding may be continued once a foreign
corporation obtains a license.").
In A Guy Named Moe, the applicable statute explicitly
allowed a foreign LLC to cure a previous failure to comply with
registration requirements. The statute stated that if a foreign
LLC does business in Maryland without complying with registration

8/
(...continued)
procure the required license prior to maintaining an action
violates [the statute] and may be a sufficient basis for a
judicial remedy for that violation, regardless of whether
the corporation obtains a license prior to final judgment.
Id. at 1258.

19
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

requirements, the LLC "may not maintain suit in any court of this
State, unless the limited liability company shows to the
satisfaction of the court" that the LLC has paid the specified
penalty and registered, or that it is no longer doing business in
the state. 135 A.3d at 498 (quoting Md. Code Ann., Corps. &
Ass'ns § 4A–1007(a) (2007)) (emphasis added)). The court
interpreted "maintain" as meaning "to continue" because that
word, "coupled with 'unless the limited liability company shows
to the satisfaction of the court,' indicate[d] that the
Legislature intended to permit a noncompliant foreign [LLC] to
'cure' its failure to comply with registration requirements, even
though having failed to register before filing suit." 135 A.3d
at 499 (emphasis added). In contrast to the Maryland statute,
which deprives a foreign LLC of capacity to maintain an action in
the state unless the LLC makes a showing of certification and
satisfaction of penalties during the course of litigation, the
Hawai#i LLC statute deprives a foreign LLC of such capacity
unless it has a certificate of authority, i.e., without a similar
cure provision.9/
Based on the plain language of HRS § 428-1008(a), its
context and implicit purpose, our examination of the similarities
and distinctions between HRS § 428-1008 and HRS § 414-432, and
our review of case law in other jurisdictions with similar
statutes, we construe HRS § 428-1008(a) to mean that a foreign
LLC transacting business in Hawai#i may not commence or continue
an action or proceeding in the state except when the LLC has a
certificate of authority. Thus, the commencement or continuation

9/
Other cases cited by Plaintiffs also involved statutes with
language materially different from the language of HRS § 428-1008(a). See,
e.g., Super Prods., LLC v. Intracoastal Envtl., LLC, 210 So. 3d 240, 241 (Fl.
Dist. Ct. App. 2017) (construing Florida statute providing that "[a] court may
stay a proceeding commenced by a foreign limited liability company or its
successor or assignee until it determines whether the foreign limited
liability company or its successor requires a certificate of authority" and
that "the court may further stay the proceeding until the foreign limited
liability company or its successor obtains the certificate." (quoting Fla.
Stat. § 605.0904(3) (2014)); Commercial Credit Corp. v. Boyko, 137 A. 534, 536
(N.J. 1927) (construing New Jersey statute stating in part: "Until such
corporation so transacting business in this state shall have obtained said
certificate of the secretary of state, it shall not maintain any action in
this state . . . ." (emphasis added)); FH Partners LLC v. STS Refill America,
LLC, 2012 N.Y. Slip Op. 31737 (N.Y. Sup. Ct. 2012) ("unless and until"
language in state statute).

20
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

of an action by a non-compliant foreign LLC violates HRS §
428-1008(a) and subjects the action to dismissal. Furthermore,
the statute does not provide an exception where the non-compliant
foreign LLC obtains a certificate of authority prior to final
judgment.
Here, there is no dispute that BEG had no certificate
of authority when it commenced this lawsuit, Defendants first
raised this deficiency in their Answer, and BEG continued the
suit for over three years without obtaining a certificate of
authority. Under these circumstances, BEG could not cure its
failure to comply with HRS § 428-1008(a) by obtaining a
certificate of authority prior to the hearing on the Motion to
Dismiss. Accordingly, the Circuit Court did not err in granting
the Motion to Dismiss pursuant to HRS § 428-1008.10/

C. Whether Adkins Was a Real Party in Interest

Plaintiffs contend that the Circuit Court erred in
determining that Adkins was not a real party in interest.
Plaintiffs argue that this action stems from the original sale of
the Property to Adkins, and that as a result of Defendants'
alleged breach of contract and tortious conduct, Adkins "suffered
the damages from the loss in value of the . . . Property and loss
of income generated by his rentals." Plaintiffs also argue that
the Circuit Court should have granted their request for leave to
amend the Complaint to allow Adkins to transfer the Property from
BEG back to Adkins "to avoid the dismissal of the Complaint."
In response, Defendants contend that Adkins is not a
real party in interest "because the claimed damages arise from an
alleged loss of rental income, which accrued to [BEG] alone."
According to Defendants, "[v]iewing the Complaint's allegations

10/
We note that Plaintiffs do not contend that the Circuit Court
erred in dismissing the Complaint with prejudice, rather than without
prejudice, pursuant to HRS § 428-1008, such that BEG might have re-filed the
action following dismissal. See Corco, Inc. v. Ledar Transport, Inc., 946
P.2d 1009, 1010 (Kan. Ct. App. 1997) ("[T]he proper remedy was to dismiss [the
unregistered entity's] counterclaim without prejudice rather than with
prejudice. This would leave [the entity] the opportunity to comply with the
statutes and then reassert its claim against [the defendant]. On the other
hand, it would also leave the risk that the statute of limitations might run
against [the entity]."). Accordingly, we do not decide whether the proper
remedy in these circumstances was to dismiss BEG's claims without prejudice.

21
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

in the light most favorable to [Plaintiffs], the alleged economic
losses resulted from an alleged inability to legally rent the
second structure on the Property beginning in 2011[,]" and these
alleged losses were those of BEG as a distinct legal entity and
the sole owner of the Property.
As previously stated, the real-party-in-interest
principle is a means to identify the party who has the right
sought to be enforced. See Kahala Royal Corp., 113 Hawai#i at
279, 151 P.3d at 760.; see also 6A Wright, et al., supra, § 1542
("[T]he term [real party in interest] directs attention to
whether plaintiff has a significant interest in the particular
action plaintiff has instituted[.]"). "The rationale of [HRCP]
[R]ule [17a] is to protect the defendant from a multiplicity of
suits, to allow defendant to present all [its] defenses, to
protect defendant from multiple liability." Lagondino, 7 Haw.
App. at 596, 789 P.2d at 1132 (citing Pace v. General Elec. Co.,
55 F.R.D. 215, 218 (W.D. Pa. 1972)).
Here, the Complaint alleges, among other things, that:
(1) Adkins entered into the DROA with the Fischers to purchase
the Property; (2) the Fischers were obligated to disclose to
Adkins any fact, defect, or condition that would be expected to
measurably affect the value of the Property; (3) the Fischers
failed to disclose that their simultaneous leasing of the two
structures on the Property as transient vacation rentals "was
illegal," and that the smaller structure "was a Workshop, not a
dwelling as defined by the CZO"; (4) in reliance on the Fischers'
representations and disclosures, Adkins purchased the Property
for $1.8 million; and (5) the "Workshop designation on the
[smaller structure] substantially diminished the fair market
value" of the Property at the time of the purchase by Adkins.
Based on these allegations, the Complaint further asserts, for
example, that: (1) Defendants' purpose was to "fraudulently
induce [Adkins] to pay substantially in excess of the actual fair
market value of the . . . Property"; (2) in reliance on the
Fischers' false representations, Adkins placed additional funds
into escrow, did not exercise his right to cancel the DROA, and
borrowed money to close the sale of the Property; and (3) as a

22
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

result of the Fishers' breaches of the DROA and Disclosure
Statement and other wrongful conduct, Adkins (and BEG) have been
damaged "in an amount to be proved at trial."
Viewed in the light most favorable to Plaintiffs, the
facts alleged in the Complaint and the inferences drawn from
those facts support a claim, among others, that Adkins was
fraudulently induced to pay more for the Property than its fair
market value and thus suffered damages in an amount to be proved
at trial. Adkins therefore asserted a sufficient interest in the
action in his own right to make him a real party in interest.
Accordingly, the Circuit Court erred in concluding that Adkins
was not a real party in interest and in dismissing his claims on
that basis.11/

IV. Conclusion

For the reasons discussed above, we affirm in part and
vacate in part the May 8, 2018 Judgment, entered by the Circuit
Court of the Fifth Circuit. The Judgment is affirmed to the
extent that the Circuit Court dismissed the claims in the
Complaint asserted by Plaintiff-Appellant Brown Eyed Girl, LLC.
The Judgment is vacated to the extent that the Circuit Court
dismissed the claims in the Complaint asserted by Plaintiff-
Appellant Richard K. Adkins. The case is remanded to the Circuit
Court for further proceedings consistent with this opinion.

On the briefs: /s/ Lisa M. Ginoza
Chief Judge
Donna E. Richards and
Mark R. Zenger
(Richards & Zenger) /s/ Clyde J. Wadsworth
for Plaintiffs-Appellants Associate Judge

David J. Minkin, /s/ Karen T. Nakasone
Jesse J.T. Smith, and Associate Judge
Jordan K. Inafuku

11/
Because we conclude that Adkins is a real party in interest based
on the allegations of the Complaint, we need not address Defendants'
alternative arguments. Similarly, because Adkins is a real party in interest,
we need not decide the extent to which, if any, Adkins can claim damages
arising from the alleged loss of rental income as his own.

23
FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

(McCorriston Miller Mukai
MacKinnon LLP)
for Defendants/Third-Party
Plaintiffs-Appellees
Gary R. Fischer, Samantha K.
Fischer, and Anini Aloha
Properties, Inc.

24