TIUMALU SIA SCANLAN, Plaintiff,
v.
SOLOMONA GLEN LEVI, FALEIVA FA`AMAO TIUMALU, SUIAVA
ALAMOANA MULITAUAOPELE, LISA MULITAUAOPELE, and ALAMOANA RECIPE, INC.,
Defendants.
High Court of
Land and Titles Division
LT No. 12-99
LT No. 13-99
LT No. 14-99
May 18, 2000
[1] Where a lease concerns a building or a portion of
a building, and [4ASR3d292] does not
include communal land, it is not subject to the requirement that leases of
communal land be approved by the Governor under A.S.C.A. § 37.0221, and is not
invalidated because the Governor’s approval was not obtained.
[2] Estoppel generally arises from silence only when a
party has a duty to speak; an owner is not estopped from pursuing a claim for
rent despite failing to insist on timely payment; and a lessee remains liable
for rent, and materially breaches a lease by failing to pay rent.
[3] A party
cannot unilaterally modify a contract, and providing tautua in lieu of
rent does not relieve a lessee of its obligation to pay rent absent evidence of
a mutual agreement otherwise.
[4] Although a lessee is not justified in failing to pay rent, the lessor’s failure to demand immediate payment of it justifies the lessee in treating the time of lease payments as not of the essence.
[5] A lessor is entitled to the eviction of a lessee
at the expiration of the lease, or when the lessee has breached the lease by
assigning or subletting the premises without obtaining permission to do so.
[6] The traditional remedy for breach of contract is
compensatory damages, generally described as returning the parties to the
position they would have held had a breach not occurred, and a claim for
equitable damages generally will not lie for simple breaches of contract.
[7] Good-faith improvers are entitled to reimbursement
for their actual expenses in improving property or for the amount by which the
improvements enhance the value of the property, whichever is less, when a
landlord allows a tenant to improve property, it is inequitable for the owner
to deny compensation while the owner receives the benefits.
[8] Under A.S.C.A. § 43.0120, the statute of
limitations on contract actions is 10 years; an action for rent due more than
10 years before the action is filed is barred by the statute of limitations.
Before:
Counsel:
For Plaintiff, Paul F. Miller
For Defendants,
Katopao T. Ainu`u
OPINION AND ORDER
Plaintiff Tiumalu Sia Scanlan (“Tiumalu”), as the sa`o
(senior chief) of the Tiumalu family of Fagatogo, brought three actions
for eviction from [4ASR3d293] buildings
located on Tiumalu family communal land known as Poata and for breach of lease
agreements for failure to pay rent. Each defendant occupies Tiumalu communal
property and has used it for commercial benefit. These actions were originally
filed as summary eviction proceedings under A.S.C.A. §§ 43.1401-.1416 in CA No.
19-99, CA No. 20-99, and CA No. 21-99.
However, they were transferred to the Land and Titles Division because
they involve intra-family issues germane to the communal status of the
land. Trial was held jointly in these
three matters on March 9-17, 2000.
I. The Leases
Underlying Each Action
Tiumalu is suing defendant Solomona Glen Levi
(“Levi”), a member of the Tiumalu family, in LT No. 12-99. Tiumalu and Levi agreed to a three-year lease
on premises located between the Pago Bar building and TK Spencer’s, Inc. to
commence on June 1, 1997, with a monthly rental of $200.00. The lease permits Levi to sublet the premises
for the term of the lease, and on or about May 28, 1998, he subleased the
premises to Mee Won, Inc., with a monthly rental of $850.00. However, the sublease extends through
December 31, 2002, well beyond the lease term.
Levi has never paid rent to Tiumalu, and his sublessee continues to
occupy the premises.
The facts in LT No. 13-99 are very similar. The
defendant in this case is Faleiva Fa`amao Tiumalu (“Faleiva”) another member of
the Tiumalu family. Tiumalu and Faleiva
entered into a lease for premises known as the Pago Bar building (or the
Shimasaki building) for a term of three years beginning on January 1, 1997,
with a rental of $1,000 per month. This lease also permits subleasing for the
term of the lease, and on or about December 20, 1999, Faleiva subleased the
premises to Kuo Yen Chen dba MAKRO, with a monthly rent of $2,500. However,
this sublease was for term of 10 years, far beyond the lease period. Faleiva
has not paid rent to Tiumalu, and her sublessee presently occupies the premises.
In LT No. 14-99, Tiumalu is suing defendants Suiava
Alamoana Mulitauaopele (“Alamoana”), also a member of the Tiumalu family, Lisa
Mulitauaopele (jointly “the Mulitauaopeles) and Alamoana Recipe, Inc.
(“Recipe”). This action is based on a
20-year lease agreement between Tiumalu and the Mulitauaopeles for a portion of
the structure known as the Kneubuhi building.
The Mulitauaopeles are primary owners of Recipe, and Recipe operates a
business on the premises. Tiumalu seeks
to evict the Mulitauaopeles and Recipe from the leased area, and recover back
rent from the Mulitauaopeles from December 1, 1988, the beginning of the lease
period, to the present.[4ASR3d294]
II. The Subject
Matter of Each Lease: Building or Land
[1] Tiumalu
and the defendants disagree as to whether the leases include only improvements
or include the land as well. The leased
property is described in each of Levi’s and Faleiva’s leases as a “one story
building . . . located on Tiumalu
communal land known as POATA . . . .”
The Mulitauaopeles’ lease describes the property at issue as “[t]he
extension to the eastern side of the building located on the commonly known as
the Kneubuhl Building located on the real property known as ‘POATA’ . . . .” The leases unequivocally state that the buildings,
not the land, are the properties to be leased.
It does not matter whether the defendants subjectively understood the
leases to be for the land as well as the buildings or portions of a building,
because the contracts are clear, making their beliefs unreasonable and without
legal force.
Because the leases are for the buildings or portions
of a building, they are not subject to the requirement that leases of communal
land be approved by the Governor. See
A.S.C.A. § 37.0221. As such, they
are not invalidated because the Governor’s approval was not obtained.
III. The Right
to Lease Premises
Faleiva, the Mulitauaopeles, and Recipe argue that
Tiumalu has no right to enforce the leases.
According to defendants, the Tiumalu family gave up its right to income
from the leased properties when it allowed members of the family to
individually retain income from leases in a 1926 agreement. This issue was decided over 40 years
ago. The 1926 agreement allowed certain
family members to retain the profits from then-existing leases. One lease was with Frank Shimasaki, who
leased the same building at issue in Faleiva’s lease, and another was with B.F.
Kneubuhl, who leased the building at issue in the Mulitauaopeles’ lease. The
1926 agreement only allowed the money from leases existing at that time to be
divided, while ownership was to remain with the matai of the Tiumalu
family. Haleck v. Taimane, 3
A.S.R. 380, 385 (Trial Div. 1959). The
land and the buildings on the land, along with the right to profit from
buildings after the termination of the leases existing at the time of the 1926
agreement, therefore belong to the Tiumalu family.
The buildings have not been the subject of separation
agreements, which would allow separate ownership of the building and the
land. See A.S.C.A. §
37.1501-.1506. Structures that have not
been separated from land are considered part of the land. Scanlan v. B.F. Kneubuhl, Inc., LT No.
47-83, slip op. at 4 (Land & Titles Div. Aug. 17, 1983) (citing Van Ness
v. Pacard, 27 U.S. 137, 143 (1829)).
The Tiumalu family therefore owns the buildings, and Tiumalu has the
right to lease them.[4ASR3d295]
IV. Rent or Tautua
A. Levi and
Faleiva
While Levi and Paleiva possibly could have used the
land and provide tautua (traditional service to the family) rather than
make rent payments under a lease if the family had agreed to it, Levi and
Faleiva agreed to pay rent for the right to use their respective buildings,
including the right to sublease the buildings to a third party. Levi and
Faleiva are thus obligated to pay rent even though they are members of the
Tiumalu family.
[2] Tiumalu
is not estopped from asserting the family’s right to the rent payments. Levi
and Faleiva are still responsible for paying for their leases despite Tiumalu’s
failure to insist on timely payment. See
Hunkin v. Grisard (Hem.), 13 A.S.R.2d 38, 40 (Trial Div.
1989). Estoppel may generally only arise
from silence when the other party has a duty to speak. Heuer v. Heuer, 704 A.2d 913,
919 (N.J. 1998); Huff v. N. Pac. Ry. Co., 228 P.2d 121, 126 (
B. The
Mulitauaopeles and Recipe
[3] Like
Levi and Faleiva, the Mulitauaopeles argue that they occupy the building as a
traditional assignment from the sa`o in return for tautua rather
than occupying the premises under the lease.
They assert that Tiumalu agreed not to enforce the lease as long as
Alamoana provided tautua. As
evidence, they submitted a 1992 letter written by Alamoana, asking Tiumalu, as
the sa`o, to allow them to render tautua rather than pay
rent. They also state that Tiumalu only
twice requested payment in the more than 11 years they have occupied the
building, arguing that acceptance of tautua in lieu of rent is
consistent with this fact.
The parties have not agreed to modify the lease to
allow the Mulitauaopeles or Recipe to occupy the land in exchange for tautua
rather than rent payments. Tiumalu
stated that she agreed only to consider the Mulitauaopeles’ request to replace
the lease with tautua. One party cannot unilaterally modify a contract,
and we have insufficient evidence from which to find that Tiumalu agreed to a
modification.[1][4ASR3d296]
The Mulitauaopeles admit that they have not paid rent
under the lease. This failure is a material breach of the lease. They also breached the lease in other ways. The lease specifically states that they
“shall not assign or sublet the leased premises or any part thereof for all or
any part of the term of this lease without the written consent and approval of
the Lessor.” Nonetheless, the
Mulitauaopeles allowed others to use the building for profit.[2] They
allowed Recipe, their business though a separate legal entity, to use the
premises in violation of the provision not to assign or sublet the premises
without Tiumalu’s consent. In addition,
Recipe entered into an agreement with Lin Ta-Li and ShihKai Lin for the Lins to
run Recipe. While the agreement is
styled as a contract to hire managers, the Lins pay fees to Alamoana,
indicating that the agreement is an assignment or sublease in violation of the
Mulitauaopeles’ lease with Tiumalu.
There is no express evidence that Tiumalu permitted either Recipe or the
Lins to occupy and use the premises.
V. Remedies
A. Eviction
[4] Although
defendants were not justified in failing to pay their rent, Tiumalu’s failure to
demand immediate payment of rent when defendants did not pay on their leases
justifies their treating time of lease payments as not of the essence. Hunkin, 13 A.S.R.2d at 40 (immediate
eviction denied when payment not required for several years). Immediate eviction on the ground of failure
to pay rent is inappropriate in this case.
However, there are other grounds on which Tiumalu is entitled to
eviction.[4ASR3d297]
[5] Levi’s
lease began on June 1, 1997. The lease
is listed as a three-year lease. It
gives Levi the right to lease the premises for three years from June 1, 1997,
but it also states that the term should be computed through January 1,
2000. It is therefore unclear whether
the lease expired on January 1, 2000 or whether it will expire on May 31, 2000.
However, determination of this issue is unnecessary because of the proximity of
the present date to the later expiration date.
As of June 1, 2000, Levi will no longer have permission to remain on the
premises. We therefore grant Tiumalu’s request for eviction, effective on June
1, 2000. Faleiva’s three-year lease,
which began on January 1, 1997, has expired.
Faleiva does not have permission to remain on the premises and thus is
not entitled to remain there. We
therefore grant Tiumalu’s request for eviction of Faleiva.
The Mulitauaopeles, as noted above, breached their
lease by failing to obtain Tiumalu’s written permission to assign or sublet the
premises. We therefore grant Tiumalu’s
request for eviction of the Mulitauaopeles. Because the Mulitauaopeles no
longer have a right to remain on the premises, Recipe, having no separate
lease, also has no right to remain there.[3]
B. Monetary
Damages for Breach of Contract
[6] Tiumalu
also seeks monetary damages. She first
seeks restitution as an equitable remedy based on unjust enrichment in the
amount of the [4ASR3d298] rent
defendants made by subleasing the property.
Tiumalu has cited no compelling law in support of her claim for
equitable damages under the facts of these cases, simple breaches of contract,
and has not explained why compensatory damages are inadequate. The traditional remedy for breach of contract
is compensatory damages, generally described as returning the parties to the
position they would have held had a breach not occurred.
[7]
Good-faith improvers are entitled to reimbursement for their actual expenses in
improving property or for the amount by which the improvements enhance the
value of the property, whichever is less.
Lutu v.
Semeatu, 17 A.S.R.2d 18, 19
(land & Titles Div. 1990); Tulisua v.
Olo, 8 A.S.R.2d 169, 172 (App. Div. 1988). When a landlord allows a tenant to improve
property, as here, it would be inequitable for the owner to deny compensation
while the owner receives the benefits. See
Fealofa’i
v. Reid, 14 A.S.R.2d 57, 60 (Trial Div. 1990).
There is little question that Tiumalu implicitly, if
not expressly, agreed to the building improvements. Building improvements were necessary for Levi
and the Mulitauaopeles to use the buildings for commercial purposes as
contemplated in their leases.
Furthermore, the location of the buildings and the fact that the
improvements were made by the Tiumalu family members make it very likely that
Tiumalu knew about the improvements and at least acquiesced to them. Tiumalu is therefore entitled to the rental
payments owed by defendants, less the value of improvements made to the
buildings.
The total rent owed by Levi through May 2000 is
$7,000. Levi submitted evidence that he
spent from $29,400 to $31,950 on improvements, which included $14,400 for night
security during the work period. In any event, his expenditures on improvements
substantially exceeded the rental amount due to Tiumalu. Levi, therefore, does not owe any rent to
Tiumalu.
Tiumalu is entitled to the $1,000 monthly rent Faleiva
agreed to pay for a term of three years beginning on January 1, 1997, plus rent
for the months she has held over beyond the lease period. The amount owed through May 2000 totals
$42,000. Faleiva did not present
evidence on improvements, and Tiumalu is therefore entitled to recover $42,000
from her.
[8] Tiumalu
seeks monetary damages against the Mulitauaopeles in the amount of $1,500
monthly from December 1, 1988 to the present. However, the statute of
limitations on contract actions is 10 years. A.S.C.A. § 43.0120. This action was filed on March 18, 1999. Rent due more than 10 years before this date
is barred by the statute of limitations. Rent owing from March 18, 1989 through
May 2000 totals $201,650.[4ASR3d299]
The Mulitauaopeles calculated that they made improvements
of $65,000 to $75,000 to the building structure and $25,000 to the building
interior. While the Mulitauaopeles may have expended $90,000 to $100,000 in
building improvements, we believe this amount is substantially overstated. We
have no itemized list of expenses incurred by the Mulitauaopeles and little
information from which to determine a reasonable amount. We must nonetheless make what we believe to
be a fair estimate of the value of the improvements, and on this basis estimate
this amount at $75,000. Tiumalu is
therefore entitled to recover $126,650 from the Mulitauaopeles.
Orders
1. Eviction is
granted as to Levi, effective June 1, 2000.
2. Eviction is
granted as to Faleiva, the Mulitauaopeles, and Recipe, effective immediately.
3. Damages are
denied as to Levi.
4. Faleiva
shall pay to Tiumalu damages in the amount of $42,000. This amount shall be payable in installments
of $1,400 per month for 30 months, commencing with July 2000.
5. The
Mulitauaopeles shall pay to Tiumalu damages in the amount of $126,650. This amount shall be payable in 60 monthly
installments, commencing with July 2000.
They shall pay 59 monthly installments of $2,111 and a final installment
of $2,101 in the sixtieth month.
It is so ordered.
[1] On March 17, 2000,
Tiumalu’s counsel filed a “Memo and Brief as To Modification of Contracts” in
LT No. 14-99. This memorandum on
modification, except for an introduction and conclusion, consists entirely of
text from 17 Am.Jur.2d Contracts
§ 520 (1985). Nowhere, however, does
counsel cite American Jurisprudence. In
doing so, counsel has plagiarized, passing off research and writing by the
authors of American Jurisprudence as his own.
He has also included all of the citations from the same part of American
Jurisprudence. As these citations are
quite lengthy and improperly cited, counsel has almost undoubtedly failed to
read and verify these cases as supporting his position.
The conduct of attorneys is governed by the American Bar Association Model Rules of Professional Responsibility (“Model Rules”). H.C.R. 104. It is professional misconduct for a lawyer to engage in conduct involving dishonesty or misprepresentation. Model Rule 8.4(c). Failure to abide by the Model Rules constitutes grounds for discipline under H.C.R. 155.
[2] A lease between Recipe
and Peacock Partners Pacifica Ltd., commencing September 11, 1988, appears to
have been in place when the lease with Tiumalu became effective. It is unclear
whether this sublease violated the Multitauaopeles’ lease with Tiumalu since it
predated the lease at issue.
[3] Other arguments by Tiumalu’s counsel for Recipe’s
eviction are not well taken. Counsel
asserts that Recipe is a trespasser on the premises, and that an order by the
Court compelling discovery under T.C.R.C.P. 37 precludes any denial by the
Mulitauaopeles and Recipe that Recipe came onto the premises by trespass. The Court’s order of February 24, 2000 does
not preclude such a denial, and specifically excluded Tiumalu’s proposed ruling
that facts alleged in her requested admissions are deemed admitted. Recipe is not a trespasser because it had
permission from the Mulitauaopeles, as lessees, to occupy the premises.
Under Model
Rule 3.3(a), every attorney has a duty of candor, including the duty not to
knowingly make false statements of material fact to the court. By asserting that the Mulitatuaopeles and
Recipe were precluded from denying that they were trespassers, counsel either
failed to read and understand the Court’s order or attempted to intentionally
mislead the court. The Court cannot
properly function unless attorneys make reasonably diligent inquiry into the
truth of the facts they assert. The Court will not tolerate misstatements of
its decisions.
We have not requested an investigation into this matter, pursuant to H.C.R. 158, but in light of the two possible violations noted in this Opinion and Order, we will not hesitate to do so if we see misconduct in the future.