Hawaii Small Claims Settlement: How to Settle and Dismiss Your Case

A Hawaii small claims case may settle before a judge's ruling — sometimes before the hearing, sometimes during court-connected mediation in the First Circuit on the hearing day itself. But reaching an agreement and closing the case are two different steps, and skipping the second one creates problems that outlast the dispute.

Why You Can't Just Pay and Walk Away

If you're the defendant and you pay the plaintiff what they're asking, the case doesn't automatically close. The Statement of Claim stays on the court docket as an open, active case. Without a formal filing, the judge doesn't know the dispute is resolved, and the hearing date remains on the calendar.

Worse, if the plaintiff later claims the payment was only partial or the agreement fell apart, there's no court record showing what was agreed. You're back to square one with no documentation of the settlement terms.

The Two Dismissal Forms

Hawaii District Courts use two forms to close a case after settlement, depending on who files:

Notice of Dismissal (for example, Form 1DC20 or 3DC20). The plaintiff files this to voluntarily dismiss their own claim. Confirm the correct form for your circuit with the Hawaii Judiciary.

Stipulation for Dismissal (for example, Form 1DC21 or 3DC21). Both parties sign this form, agreeing that the case should be dismissed. Confirm the correct form for your circuit with the Hawaii Judiciary.

The Stipulation records that both parties agree to dismiss the case. If the parties have additional settlement terms, put them in a signed agreement too; do not assume the dismissal filing alone captures them.

Writing the Settlement Agreement

For anything beyond a simple lump-sum payment, put the settlement terms in a separate signed agreement. It should include:

• The total amount being paid. Or, if not a monetary settlement, a clear description of what each side is doing (returning property, completing repairs, releasing a security deposit).
• Payment schedule. If paying in installments, specify the exact amount and due date for each payment, the method of payment, and where payments are sent.
• What happens if a payment is missed. State the agreed consequence clearly. If you want a judgment or other court enforcement, get advice on how to document that remedy.
• Mutual release language. If the agreement is intended to resolve all claims arising from the dispute, state exactly which claims each party is releasing.
• Dismissal with or without prejudice. That choice affects whether the claim can be brought again. If payments are ongoing, get advice on how to coordinate dismissal timing with the payment terms.

Both parties should sign the settlement terms and keep copies. File the appropriate dismissal form; confirm with the clerk how any separate agreement should be submitted.

Settling During Court-Annexed Mediation

In the First Circuit (Oahu), court-connected mediation is mandatory on the day of the hearing. Community mediation centers also serve the other circuits. If mediation produces an agreement, a formal settlement document is drafted and signed by the parties. File a Notice or Stipulation for Dismissal to remove the case from the trial calendar.

If mediation fails, the parties return to the judge for trial on the same day or a scheduled later date.

After the Settlement Is Filed

Before judgment, a filed Notice or Stipulation for Dismissal removes the case from the trial calendar and terminates the action without entry of a judicial judgment.

This matters for defendants especially. A judgment becomes part of the public judicial record through eCourt Kokua; if it is paid afterward, the judgment creditor must file a Satisfaction of Judgment to record the payment. A pre-judgment dismissal by stipulation closes the action without entry of a judicial judgment.

If Settlement Falls Apart After Filing

If the other side stops paying after a dismissal, do not assume you can reopen the case or obtain a judgment without a new filing. Before dismissing while payments remain due, get advice on what remedy the settlement agreement allows.

If the dismissal is "with prejudice," understand its effect on any later claim before signing. A dismissal removes the action from the trial calendar, so do not assume the court can reopen it or enter judgment for unpaid installments without a new filing. Get Hawaii-specific advice on enforcement before dismissing while payments remain due.

If you've been served with a Hawaii small claims case and want to understand whether settling makes sense — and what your other options are — our Hawaii small claims response guide walks through every path from service to resolution.

See more Hawaii guides →