The Hawaii Intermediate Court of Appeals reversed the trial court's granting the insurance agent's Motion for Judgment as a Matter of Law on the insured's claim for punitive damages. Fuche Corporation, Inc. v. Leung, et al., 2018 Haw. App. LEXIS 37 (Haw. App. LEXIS Feb. 8, 2018).
Fuche Corporation sued its insurance agents, Bill Hin Bi Leung and Noguchi & Associates, for malpractice and breach of contract for their failure to procure coverage for water damage arising from flooding incidents which occurred from December 1, 2004 through November 17, 2005 at the insured's restaurant. After the first flooding incident in December 2004, Fuche Corporation notified Leung, who informed Fuche Corporation that the flooding incident was not covered by his policy and that coverage could not be provided until the policy was renewed in September 2005. After a third flooding incident at the restaurant on September 4, 2005, Fuche Corporation reported the flood to Leung and told Leung to add the flood coverage when Leung renewed the policy.
In November 2005, a fourth flood was reported by the restaurant to Leung. After visiting the restaurant, Leung assured the restaurant that it need not worry because the loss was covered under the policy. Leung further advised to shut down the restaurant and wait for a response from the insurance company on the latest flood claim before repairing any damage and reopening. In January 2006, Fuche Corporation went to Leung's office, and was informed that the policy did not cover flood.
Fuche Corporation sought punitive damages against Leung and his employer, Noguchi & Associates. The trial court granted summary judgment in favor of Noguchi and judgment as a matter of law in favor of Leung on Fuche Corporation's claim for punitive damages.
The court of appeals reversed as to Leung. There was sufficient evidence to support an award of punitive damages by the jury against Leung. The determination of whether Fuche Corporation presented clear and convincing evidence of wilfull misconduct or an entire want of care raising a presumption of a conscious indifference to consequences by Leung should have been submitted to the jury.
The court, however concluded that Fuche Corporation did not adduce or provide any evidence suggesting that Noguchi's actions were willful or indicated an entire want of care raising a presumption of conscious indifference by utilizing Leung's services. Further, the evidence did not show Noguchi acted recklessly in its retention of Leung. Therefore, the trial court did not err in granting partial summary judgment in favor of Noguchi on Fuche Corporation's claim for punitive damages.
The trial court also granted remittitur of the jury's award to Fuche Corporation of general damages from $110,000 to zero, or in the alternative, ordered a new trial on general damages. Fuche Corporation refused remittitur and demanded a new trial on the issue of general damages.
Leung and Noguchi then moved for summary judgment arguing that Fuche Corporation had failed to present any evidence that it had suffered any general damages. The trial court granted the motion, concluding that no genuine issue of material fact existed as to Fuche Corporation's claim for general damages.
The appellate court ruled that it was not an abuse of discretion to conditionally grant Leung and Noguchi's new trial/remittitur motion and to order a new trial on general damages in lieu of a remittitur. But it was error to grant the summary judgment motion and determine that Fuche Corporation had no valid claim as to reputational harm sustained during the several months the restaurant was closed while waiting to hear from Leung on the insurance claim. Fuche Corporation's claim for general damages should have been submitted to the jury for determination of the facts surrounding the general damages claim.