Montserrat Overseas Holdings, S.A. v. David W. Larsen, British Hawaiian Properties, Ltd., Plantorel, Ltd.

In this diversity action under Hawaii law, Plaintiff-Appellant Montserrat Overseas Holdings, S.A., a Panamanian corporation, sued David Larsen, a resident of Hawaii, and two corporations controlled by Larsen, for specific performance and damages allegedly arising from the breach of an escrow agreement for the sale of certain Hawaiian real property. The District Court granted summary judgment on the specific performance claim and ordered that Montserrat post a $50,000 bond to cover costs on the contract claim. The action was dismissed upon Montserrat’s failure to post the bond. Montserrat appeals from the partial summary judgment and the dismissal of the action for failure to post the required bond.

I

It was not error to grant Defendants partial summary judgment on the specific performance count of the amended complaint. At the time Appellant secured its contract of sale an earlier sale contract between Larsen and one Hunter was in the course of litigation. Appellant took with notice of and subject to this earlier contract. The Larsen-Hunter suit was subsequently settled and title passed pursuant to the settlement. The general rule is that a prior purchaser prevails over a…