Through the Gordon Rees Scully Mansukhani Honolulu office, Partner Gaurav Bobby Kalra and Associate Brianne “Bree” Zamora successfully obtained a dismissal on behalf of a successor trustee and its law firm in a breach of fiduciary duty action in a state court in Hawai‘i.
The plaintiffs alleged, inter alia, breach of trust, breach of fiduciary duty, conflict of interest and self-dealing, failure to account and produce records, surcharge, disgorgement, restitution, declaratory relief, punitive damages, and related equitable remedies arising from the administration of a trust. At the time the complaint was filed, however, active and ongoing probate proceedings involving the same trust and allegations raised in the complaint were already pending.
GRSM’s defense rested on two independent legal theories for dismissal. First, the civil division of the circuit court lacked subject matter jurisdiction under Rule 12(b)(1) over trust administration claims. Under Hawai‘i law, the probate court has exclusive jurisdiction over trust administration claims. The GRSM team argued that Hawai‘i Supreme Court precedent, Rules of the Circuit Court of Hawai‘i, Hawai‘i Probate Rules, Hawai‘i Probate Code, and Hawai‘i Trust Code support the argument that the probate court is a distinct tribunal from the civil division of the circuit court because it is exercising specific procedural rules and specialized statutory jurisdiction.
Second, the GRSM team argued that the complaint should be dismissed under Rule 12(b)(6) pursuant to the abatement doctrine, claim and issue preclusion, and the collateral attack doctrine. The substance of allegations in the complaint involved similar and tangential issues already decided upon by the probate court and affirmed by the Intermediate Court of Appeals. The GRSM team asserted that the proper recourse is to appeal the probate court’s judgments and orders, not to circumvent the probate court by filing a separate action based on the same claims in the civil division of the circuit court. The argument emphasized the importance of judicial economy and avoiding duplicative litigation and potentially inconsistent rulings in parallel proceedings.
In the alternative to dismissal, the GRSM team argued that the matter be transferred to the probate court under Rule 12(b)(3) because it is a more appropriate venue, with active probate proceedings. The co-defendant also filed a substantive joinder in the motion to dismiss, further supporting GRSM’s jurisdictional and procedural arguments.
The judge ultimately granted the motion to dismiss. Although GRSM and the client were prepared to defend the matter if it proceeded in the probate court, GRSM’s successful motion to dismiss resulted in an early resolution, minimizing the time and expense to the client.