The long-running legal battle between Nordic PCL Construction, Inc. (Nordic) and LPIHGC, LLC has taken another turn, this time focusing on who gets to pay for the costs incurred during years of arbitration and appeals. The Intermediate Court of Appeals (ICA) in Hawaii has partially overturned a lower court’s decision regarding the taxation of costs awarded to Nordic, sending the case back to the Circuit Court for recalculation.
The core of the issue stems from a complicated arbitration over a contract dispute that has seen multiple rulings, vacatings, and remands involving the Circuit Court, the ICA, and the Hawaii Supreme Court.
The Road to the Cost Dispute
The saga began when an arbitrator initially ruled in favor of LPIHGC. Nordic sought to overturn this award, alleging the arbitrator showed “evident partiality.” After initial confirmation by the Circuit Court in 2011, Nordic appealed, posting a supersedeas bond—a financial guarantee designed to stay the judgment while the appeal was pending.
The case bounced between courts. The ICA initially vacated the judgment, but the Supreme Court stepped in (in what the opinion refers to as *Nordic I*). The Supreme Court ultimately vacated both the ICA’s ruling and the original Circuit Court judgment, ordering the Circuit Court to hold a new evidentiary hearing to examine Nordic’s claims of arbitrator bias.
Following this mandated hearing in 2017, the Circuit Court sided with Nordic, vacating the initial arbitration award and ordering a new arbitration before a different arbitrator. It was at this point that Nordic sought to recover costs related to the successful motion to vacate the first award.
Supersedeas Bond Premiums: Authorized, But Not All Reasonable
Nordic requested over $229,000 for premiums paid on the supersedeas bond it needed to maintain the stay on the original judgment. LPIHGC challenged this, arguing that only an appellate court, under Hawaii Rules of Appellate Procedure (HRAP) Rule 39, could tax costs related to an appeal, especially bond premiums.
The ICA disagreed with LPIHGC on the court’s authority. The court determined that the Circuit Court *was* authorized under Hawaii Revised Statutes (HRS) § 658A-25(b) to award Nordic its reasonable costs incurred on appeal once the first award was successfully vacated following the Supreme Court’s mandate. Furthermore, the court confirmed that premiums for supersedeas bonds are generally considered taxable costs under HRS § 607-9.
However, the court found that not all of the premiums Nordic sought were reasonable. A supersedeas bond exists to protect the appellee (LPIHGC) from loss if the judgment is affirmed. Crucially, the Supreme Court’s *Nordic I* decision, as amended, not only vacated the ICA’s judgment but also vacated the underlying 2011 Final Judgment. This vacation was finalized on August 27, 2015.
The ICA reasoned that after August 27, 2015, there was no longer an executable judgment against Nordic. Therefore, any bond premiums paid for coverage *after* that date were unreasonable.
The court noted that Nordic had initially paid for coverage extending until April 6, 2015, which LPIHGC did not contest. The court also upheld the cost awarded for the period between April 6, 2015, and August 27, 2015, concluding that LPIHGC failed to meet its burden of showing that Nordic could have obtained a pro-rated refund for that overlap period. However, the premium cost of $28,534.00 covering the period after April 6, 2016, was deemed an abuse of discretion and was struck down.
Questionable Cost Items
Beyond the bond premiums, LPIHGC challenged several other smaller costs Nordic sought to recover:
1. First-Class Airfare: Nordic claimed $1,187.02 for intrastate travel. The ICA found that HRS § 607-9 allows for travel expenses for counsel, and since LPIHGC offered no local authority stating first-class airfare is inherently unreasonable, the Circuit Court acted within its discretion by allowing this cost.
2. Messenger Fees: Nordic sought $372 for messenger delivery fees. The ICA ruled that these fees are generally considered part of a firm’s overhead and are not taxable costs unless the case presented an “extraordinary” volume or nature. Since Nordic’s motion didn’t prove such an extraordinary need, taxing these fees was an abuse of discretion.
3. Third-Party Attorney Fees: Nordic attempted to recover $2,602.09 it paid to attorneys for the Queen Liliʻuokalani Trust to comply with a subpoena for records. The ICA firmly rejected this. Citing HRS § 607-9, which limits taxable costs to those prescribed in Chapter 607, the court found no statute authorizing the recovery of another party’s attorney fees for responding to a subpoena duces tecum. This cost was also deemed improperly awarded.
Conclusion and Next Steps
In summary, the ICA partially sided with LPIHGC, agreeing that some of Nordic’s claimed costs were improper, but sided with Nordic regarding the authority to tax costs and the allowability of certain items like first-class travel.
The ICA vacated the September 23, 2025, Final Judgment and the underlying October 20, 2017, order taxing costs, in part. The case is remanded back to the Circuit Court with specific instructions: consolidate the two related proceedings, enter an amended judgment confirming the results of the *second* arbitration (which ultimately favored LPIHGC), and then tax costs for Nordic against LPIHGC only consistent with the ICA’s findings in this order.
Nordic’s subsequent attempt to have the judgment amended to include the full original cost award was deemed unnecessary given the remand order.