Jones v. Phillipson1/28/1999
As amended December 29, 1999. See end of opinion for corrections.
H. STANLEY JONES AND ROBERTA JONES, PLAINTIFFS-APPELLANTS,
v.
BILL PHILLIPSON AND HAPPY VINCENT, DEFENDANTS-APPELLEES, AND JOHN DOES 1-10, DOE ENTITIES 1-10, DOE PARTNERSHIPS 1-10, AND DOE CORPORATIONS 1-10, DEFENDANTS.
APPEAL FROM THE DISTRICT COURT OF THE FIFTH CIRCUIT (CIVIL NO. L-96-193)
John H. Murphy, on the briefs for plaintiffs-appellants. Malvin D. Dohrman, on the brief for defendants-appellees.
Burns, C.j., Acoba, And Kirimitsu, JJ.
The opinion of the court was delivered by: Acoba, J.
We hold that while Hawaii Revised Statutes (HRS) § 444-22 (1993) bars an unlicensed contractor from maintaining an action to recover for contracting services, where the other party to the contract is a member of the general public, that party can maintain an action on the contract against the unlicensed contractor.
We further hold that where such a party violates the owner-builder exemption under HRS § 444-2(7) (1993) by selling or leasing the subject property within one year of completion, that party may be subject to the sanctions imposed under HRS § 444-2(7), but will be able to maintain an action against the unlicensed contractor for breach of contract. We believe that in such a situation, and under the statutory scheme applicable to the case before us, non-enforceability of such a contract would be an additional penalty beyond that already authorized by HRS § 444-2(7) and is not warranted.
The district court of the fifth circuit (the court) held to the contrary as to the claim for breach of contract in Count I of the complaint filed by Plaintiffs-Appellants H. Stanley Jones (Stanley) and Roberta Jones (collectively, Plaintiffs), and therefore, we vacate that part of the September 26, 1996 judgment entered by the court which pertained to Count I of the complaint, and remand Count I for retrial. However, as to Plaintiffs' claims for fraud and punitive damages in Counts II and III, respectively, of their complaint, we affirm that part of the judgment in favor of Defendants-Appellees Bill Phillipson (Phillipson) and Happy Vincent (Vincent) (collectively, Defendants).
I.
Plaintiffs, along with Violet M. Trobough (Trobough), owned property located at 4610 Kapuna Road, Kilauea, Kaua`i, Hawaii (the property). Sometime in November 1994, Plaintiffs applied for a building permit for the property. As part of the application process, Stanley completed a contractor's statement dated November 28, 1994 (the contractor's statement) which listed Plaintiffs as the "Owner, Applicant, Contractor." In the contractor's statement, Stanley certified that he and Roberta were owners or lessees of the property, and as such, were exempt from contractor licensing laws under HRS chapter 444 (1993).
On March 17, 1995, the County of Kaua`i issued the building permit for the property. The permit listed Stanley as the owner of the property and designated the "contractor" as "self-builder."
On or about September 29, 1995, Stanley, on behalf of Plaintiffs, entered into an oral agreement (the agreement) with Defendants. According to the agreement, Defendants agreed to build a one-story, single-family residence (the residence) on the property. Plaintiffs agreed to pay Defendants a "fixed price" of $60,000 for the work plus fifty percent of Defendants' "tax liability." Payments in the amount of $1,250 were to be made weekly to Defendants. At the time the agreement was entered into, neither
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