Wiseman denies motions to dismiss lawsuit, sanctions

The Superior Court has denied former Commonwealth Ports Authority’s legal counsel Douglas F. Cushnie’s motion to dismiss CPA’s lawsuit against him.

Associate Judge David A. Wiseman also denied Cushnie’s motion seeking sanctions against CPA for allegedly filing the complaint that falsely presented several allegations as facts.

Wiseman said that, as of this moment in the litigation, the language in CPA’s complaint referencing the Commonwealth Rules of Professional Conduct “is superfluous and does not warrant dismissal of CPA’s well-pleaded allegation of professional malpractice/negligence.”

He said that as CPA has not specifically identified the particular Commonwealth Rules of Professional Conduct it may use as evidence of a standard of care and Cushnie’s breach of it, “the court will refrain from ruling whether CPA will be allowed to present such evidence to the trier of fact.”

On the sanctions issue, the judge said he cannot detect any bad faith or unseemly ulterior motive behind CPA’s inclusion of the allegedly erroneous fact statements in its complaint.

“Therefore, the court will deny Cushnie’s motion at this time, but will revisit the issue, should Cushnie wish to pursue it, but only once a fact finder has weighed the evidence in the case or once the need for a fact finder has been dispatched,” Wiseman said.

In October 2007, CPA sued Cushnie for allegedly refusing to return $265,144 that was allegedly overbilled to CPA.

CPA sued Cushnie for alleged professional malpractice/professional negligence, breach of fiduciary duty, and breach of contract.

CPA, through its counsel attorney Robert T. Torres, stated that during the period of June 1, 2003 through Sept. 30, 2006, CPA paid Cushnie a total of $1.3 million.

Torres said Cushnie admits that when he compared his time records from June 1, 2003 through Sept. 30, 2006 to the billing statements he submitted to CPA during this period, CPA was overcharged $265,144.76.

Torres cited that the defendant has contended he is not responsible for the overpayment because the false billings were submitted by his employee, who, according to him, overbilled CPA to cover undeposited collections of CPA retainer fees and collections from other clients.

He said Cushnie further contended that he is not responsible for the overpayment because the bank where he maintained his account improperly paid forged checks issued by his employee.

Cushnie moved to dismiss CPA’s first claim for relief alleging professional malpractice/professional negligence. He specifically argued that CPA’s reference to the Commonwealth Rules of Professional Conduct is impermissible as a basis for relief.

In a separate motion, Cushnie asked the court to impose sanctions on CPA. He alleged that in violation of the Commonwealth Rules of Civil Procedure, CPA’s complaint falsely presented several allegations as facts.

In denying the motion to dismiss, Wiseman said that CPA bases its complaint on a theory of professional malpractice/negligence.

Wiseman said that CPA does not base its complaint on allegations that Cushnie violated the Commonwealth Rules of Professional Conduct.

“Instead, CPA’s complaint merely refers to the Rules, and Cushnie’s possible violation of the Rules as possible evidence that Cushnie’s acts and omissions with regard to CPA fell below the standard of conduct required of a lawyer in Cushnie’s position,” he said.

On the motion for sanctions, Wiseman viewed it as premature.

The judge noted that to award sanctions at this moment, he would be forced to act as fact-finder before the other party has been afforded an opportunity to discover evidence supporting its claims or refuting the evidence presented by Cushnie.

“In essence, to rule on Cushnie’s motion at this time would force the court to prematurely weigh evidence before a fact-finder has been identified to try the case,” Wiseman said.

In November 2006, Cushnie sued his former longtime legal secretary, Lucy M. Deleon Guerrero, for allegedly stealing money from his law office by inflating attorney’s fees and forging checks.

In June 2007, Cushnie and his law firm filed a lawsuit in federal court against Bank of Hawaii and its two employees for allegedly allowing his then secretary Deleon Guerrerro to unlawfully cash on various occasions through forged signature the company’s checks of over $250,000.