Picardy v. Sky Riber Management, LLC (Order Denying October 20, 2009 Motion to Dismiss Appeal and Striking November 5, 2009 Reply Memorandum Opinion)

SKY RIVER MANAGEMENT, LLC; PIERRE and PAMELA OMIDYAR;
ELAHE MIR DJALALI OMIDYAR; ANNA CHRISTIAN; KEVIN MAHONEY;
DOUGLAS COOMBS, Defendants-Appellees,

JOHN DOES 1-10; JANE DOES 1-10; DOE PARTNERSHIPS 1-10;
DOE CORPORATIONS 1-10; and DOE GOVERNMENTAL ENTITIES 1-10, Defendants

ORDER DENYING OCTOBER 20, 2009 MOTION TO DISMISS
APPEAL AND STRIKING NOVEMBER 5, 2009 REPLY MEMORANDUM
(By: Nakamura, Chief Judge, Watanabe and Foley, JJ.)

Upon review of (1) Defendants-Appellees Sky River Management, LLC, Pierre Omidyar, Pamela Omidyar, Elahe Mir Djalali Omidyar, Anna Christian and Kevin Mahoney's (the Appellees) October 20, 2009 motion to dismiss appellate court case number 29825 for lack of jurisdiction, (2) Plaintiff-Appellant Erin Picardy's (Appellant Erin Picardy) November 2, 2009 memorandum in opposition to the Appellees' October 20, 2009 motion to dismiss appellate court case number 29825, (3) the Appellees' November 5, 2009 reply memorandum in support of the Appellees' October 20, 2009 motion to dismiss appellate court case number 29825, and (4) the record, we initially note that Rule 27 of the Hawai‘i Rules of Appellate Procedure (HRAP) does not authorize a movant to file a reply memorandum in support of a motion, and, thus, we hereby strike the Appellees' November 5, 2009 reply memorandum in support of the Appellees' October 20, 2009 motion to dismiss appellate court case number 29825 as unauthorized. Furthermore, it appears that the Appellees' October 20, 2009 motion to dismiss appellate court case number 29825 lacks merit, because we have jurisdiction over Appellant Erin Picardy's appeal from the Honorable Sabrina S. McKenna's April 15, 2009 "Order Granting Defendants' Motion to Stay Proceedings" (the April 15 order staying proceedings pending arbitration) pursuant to Hawaii Revised Statutes (HRS) § 641-1(a) (1993 & Supp. 2008) and the collateral order doctrine.

HRS § 658A-28(a)(1) (Supp. 2008) authorizes an appeal from an order denying a motion to compel arbitration:

(b) An appeal under this section shall be taken as from an order or a judgment in a civil action.

HRS § 641-1(a) provides additional authority for appeals, authorizing appeals to the intermediate court of appeals from final judgments, orders, or decrees. Appeals under HRS § 641-1 "shall be taken in the manner . . . provided by the rules of the court." HRS § 641-1(c). Rule 58 of the Hawai‘i Rules of Civil Procedure (HRCP) requires that "[e]very judgment shall be set forth on a separate document." HRCP Rule 58. Based on HRCP Rule 58, the Supreme Court of Hawaii holds "[a]n appeal may be taken . . . only after the orders have been reduced to a judgment and the judgment has been entered in favor of and against the appropriate parties pursuant to HRCP [Rule] 58[.]" Jenkins v. Cades Schutte Fleming & Wright, 76 Hawai‘i 115, 119, 869 P.2d 1334, 1338 (1994). "An appeal from an order that is not reduced to a judgment in favor or against the party by the time the record is filed in the supreme court will be dismissed." Id. at 120, 869 P.2d at 1339 (footnote omitted). The circuit court has not yet entered a final judgment in this case. Nevertheless, as an exception to the general rule requiring a final judgment for appealability under HRS § 641-1(a), the Supreme Court of Hawai‘i "ha[s], in rare situations, considered an interlocutory order so effectively 'final' that [it] ha[s] exercised appellate jurisdiction over an appeal that is neither a final judgment nor has been allowed by the circuit court under HRS § 641-1(b)." Abrams v. Cades, Schutte, Fleming & Wright, 88 Hawai‘i 319, 321, 966 P.2d 631, 633 (1998).

Appellate jurisdiction in these cases is exercised under the collateral order doctrine. These interlocutory appeals are limited to orders falling in that small class which finally determine claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated.

Id. (citations and internal quotation marks omitted). In order to be appealable under the collateral order doctrine, an appealed order must satisfy all three of the following requirements: "the order must [1] conclusively determine the disputed question, [2] resolve an important issue completely separate from the merits of the action, and [3] be effectively unreviewable on appeal from a final judgment." Id. at 322, 966 P.2d at 634 (citations and internal quotation marks omitted) (brackets in original). The Supreme Court of Hawai‘i has observed that it "must construe the collateral order doctrine narrowly and be parsimonious in its application." Siangco v. Kasadate, 77 Hawai�‘i 157, 162, 883 P.2d 78, 83 (1994). Otherwise, "[a]llowing widespread appeals from collateral orders would frustrate the policy against piecemeal appeals embodied in HRS § 641-1." Id.

Based on the collateral order doctrine, we have held that "[a]n order granting a motion to compel arbitration is final and appealable" under circumstances when such an order "is one of that small category of orders which finally determine claims of right separable from and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated." Sher v. Cella, 114 Hawai‘i 263, 266-67, 160 P.3d 1250, 1253-54 (App. 2007) (citation and internal quotation marks omitted) (emphasis added). In Sher v. Cella, the parties were litigating a "complaint [that] contained six counts: (1) misrepresentation and non-disclosure, (2) breach of contract, (3) breach of duty of good faith and fair dealing, (4) negligence, (5) deceptive trade practices, and (6) unjust enrichment." Id. at 266, 160 P.3d at 1253. Thus, when the circuit court entered an order granting a motion to compel arbitration of these causes of action, we held that, under the collateral order doctrine, the "order granting [the] motion to compel arbitration is final and appealable[.]" Id. at 266-67, 160 P.3d at 1253. In so holding, we followed the Supreme Court of Hawaii's well established holding that, under the collateral order doctrine, "orders granting stays and compelling arbitration are appealable [final orders.]" Association of Owners of Kukui Plaza v. Swinerton & Walberg Co., 68 Haw. 98, 107, 705 P.2d 28, 35 (1985); Douglass v. Pflueger Hawaii, Inc., 110 Hawai‘i 520, 522 n.1, 135 P.3d 129, 131 n.1 (2006).

In the instant case, the April 15 order staying proceedings pending arbitration does not resolve the merits of Appellant Erin Picardy's two causes of action for (I) fraud and (II) intentional infliction of emotional distress. Instead, the April 15 order staying proceedings pending arbitration (1) conclusively determines the disputed question whether Appellant Erin Picardy's two causes of action in the instant case should be stayed pending the arbitration of her father John Picardy's related claims in Civil No. 09-1-0290, and, thus, (2) resolves this important arbitration issue that is completely separate from and collateral to the merits of the action, and (3) is effectively unreviewable on appeal from a final judgment.

Although the April 15, 2009 order staying proceedings pending arbitration does not compel arbitration but, instead, stays Appellant Erin Picardy's claims pending John Picardy's arbitration, the Supreme Court of Hawai‘i has specifically "note[d] that an order granting a stay of proceedings pending arbitration, like an order compelling arbitration, is an appealable final order." Luke v. Gentry Realty, Ltd., 105 Hawai‘i 241, 246 n.10, 96 P.3d 261, 266 n.10 (2004) (citation omitted). We conclude, therefore, that the April 15 order staying proceedings pending arbitration is an appealable final order pursuant to HRS § 641-1(a) and the collateral order doctrine.⁽¹⁾ All of the Appellees' arguments to the contrary lack merit. Accordingly,

IT IS HEREBY ORDERED that the Appellees' November 5, 2009 reply memorandum in support of the Appellees' October 20, 2009 motion to dismiss appellate court case number 29825 is stricken as unauthorized under HRAP Rule 27, and the Appellees' October 20, 2009 motion to dismiss appellate court case number 29825 is denied.

1. We note the following unpublished dismissal orders from five appellate cases involving appeals from orders compelling arbitration in special circuit court civil proceedings that parties had initiated for the primary purpose of adjudicating whether the parties' claims were subject to mandatory arbitration: Hawaii Government Employees Association, AFSCME, Local 152, AFL-CIO v. Hawaii Health Systems Corporation, No. 29661, 2009 WL 1879223 (Haw. Ct. App. June 29, 2009); Shelton v. Kaiser Foundation Health Plan, Inc., No. 29754, 2009 WL 1805047 (Haw. Ct. App. June 23, 2009); Clever Construction, Inc., v. Alcone, No. 29320, 2008 WL 5049906 (Haw. Ct. App. Nov. 21, 2008); Williams v. State of Hawai‘i, No. 29209, 2008 WL 4649397 (Haw. Ct. App. Oct. 17, 2008); Brown v. Hawaii Medical Service Association, No. 29117, 2008 WL 3148577 (Haw. Ct. App. Aug. 1, 2008). We dismissed these five appellate cases because the circuit courts had not entered final judgments, the appealed orders compelling arbitration resolved issues that were directly related to the merits of each action, and, thus, the orders did not qualify as collateral orders. The instant case is distinguishable from these five appellate cases because, in the instant case, the April 15 order staying proceedings pending arbitration resolves an important issue that is collateral to the merits of Appellant Erin Picardy's two causes of action for (I) fraud and (II) intentional infliction of emotional distress.