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Kohala Agriculture v. Deloitte & Touche

11/10/1997

(Marrack) and Carleton L. Williams (Williams), D&T;s partner in charge and manager, respectively, of the 1983 Kohala audit.


The affidavits are nearly identical and state the following facts: D&T;was engaged to perform the 1983 Kohala audit solely by Kohala; the 1983 Kohala report was prepared solely for Kohala and not at the direction of or for the benefit of Keaau, its investors, or the attorneys who prepared the private placement memorandum for Keaau; Marrack and Williams were not aware and had no reason to be aware that the 1983 Kohala report would be provided to Keaau, its investors, or the attorneys; Marrack and Williams were not aware and had no reason to be aware that Keaau would rely on the 1983 Kohala report in contracting with Hawaiian Holiday, or that any potential Keaau investor would rely on the 1983 Kohala report in deciding to invest in Keaau, or that the attorneys would rely on the 1983 Kohala report in preparing the private placement memorandum for Keaau; and Marrack and Williams did not have any meetings or communication with Keaau, its investors, or the attorneys "regarding their reliance" on the 1983 Kohala report, nor did Marrack and Williams intend to supply information in the 1983 Kohala report for the benefit of Keaau, its investors, or the attorneys.


We believe that these affidavits, on their face, initially satisfied D&T;s burden to demonstrate that there was no genuine issue as to any fact which would establish that D&T;owed a duty to Keaau under section 552. Marrack and Williams, the employees of D&T;in charge of the 1983 Kohala audit, stated that they did not intend to supply the information in the 1983 Kohala report for the benefit or guidance of Keaau, and did not know that the 1983 Kohala report would be supplied to Keaau by Kohala, or that Keaau would rely on the 1983 Kohala report in contracting with Hawaiian Holiday. These statements, if taken as true, would mean that Keaau was not among the limited group of third parties who could recover from D&T;for negligent misrepresentation as set forth in section 552(2).


2.


After D&T;satisfied its preliminary burden, the burden shifted to Plaintiffs to respond and "demonstrate specific facts, as opposed to general allegations, that present a genuine issue worthy of trial." GECC Financial Corp., 79 Hawai'i at 521, 904 P.2d at 535 (citing 10A C. Wright, A. Miller & M. Kane, Federal Practice & Procedure: Civil ยง 2727, at 148 (2d ed. 1983)). "The inferences to be drawn from the underlying facts alleged in the materials (such as depositions, answers to interrogatories, admissions and affidavits) considered by the court in making its determination must be viewed in the light most favorable to the party opposing the motion." Miller v. First Hawaiian Bank, 61 Haw. 346, 348, 604 P.2d 39, 41 (1979). Granting Plaintiffs this favorable viewing of the facts, we conclude that Plaintiffs have demonstrated that genuine issues of material fact existed, and thus summary judgment on Keaau's claim based on the 1983 Kohala audit was improper.


The only affidavit submitted by Plaintiffs in opposition to the Keaau summary judgment motion was from Plaintiffs' counsel, stating that each of the exhibits attached to the affidavit were true and accurate copies of the original documents. As an initial matter, we note that none of the exhibits were properly certified under HRCP Rule 56(e), which provides that "sworn or certified copies of all papers or parts thereof referred to in an affidavit shall be attached thereto or served therewith." Because a motion for summary judgm

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