Case Title: Kaanapali Hillside Homeowners Association v. Doran. ICA Opinion, filed 10/13/2006 [pdf], 112 Haw. 356. ICA Order Denying Plaintiff-Appellees Motion for Reconsideration, filed 10/31/2006 [pdf], 112 Haw. 470. S.Ct. Order Accepting Application for Writ of Certiorari, filed 03/08/2007 [pdf], 113 Haw. 471. S.Ct. Order Denying Motion for Reconsideration, filed 07/20/2007 [pdf].

Citation: 114 Haw. 361

Docket Number: 

State: hawaii

Court: Hawaii Supreme Court

Date: 2007-06-21T00:00:00Z

Document:
LAW LIBRARY

+++ FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER ***

IN THE SUPREME COURT OF THE STATE OF HAWAI'I

 

00.

 

 

YAANAPALI HILLSIDE HOMEOWNERS’ ASSOCIATION, a Hawai"i nonprofit
corporation, by and through its Board of Directors,

set leloner/Plaintift-Appellee 2
ws. a. =
ze 8
one 8 ney mma som EF s 2
Aespondanee/becancencestpoeiance BRB
AMERICAN SAVINGS BANK, F.S.B., a federal savings’ Ek, 2 i
Respondent /Sefendent-appeltee 2

 

JOHN DOES 1-10; JANE DOES 1-10; DOE PARTNERSHIPS 1-10; DOE
CORPORATIONS 1-10; DOE ENTITIES 1-10; DOE GOVERNMENTAL AGENCIES
1-10; and DOE ELEEMOSYNARY CORPORATIONS 1-10,
Defendants

  

 

No, 25585

CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
(CIV. NO. 99-0488(3))

June 21, 2007

MOON, C.J., LEVINSON, NAKAYAMA, ACOBA, AND DUFFY, JJ.
OPINION OF THE COURT BY DUFFY, J.

Petitioner/Plaintiff-Appellee Kaanapali Hillside

einafter, KHHA] filed a timely

 

Homeowners’ Association (1

Application for Writ of Certiorari (Application) seeking review

(1) the November 3, 2006 judgment of the Intermediate Court

(CA) on its published opinion in Kaanapali Hillside

145 P.3d 899 (App.

 

of Appeals

Homeowners’ Ass'n v. Doran, 112 Hawai'i 356,

2006) [hereinafter, KHHA I), which (a) affirmed in part the
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Novenber 26, 2002 final judgment of the Circuit Court of the
jecond Circuit! in favor of KHHA, but (b) vacated that portion of
thé judgment awarding fees and costs to KHHA and remanded for
redetermination of the appropriate amount of fees and costs: and
(2) the ICA's subsequent “Order Approving in Part and Denying in
Part [KHHA]’s Request for Attorney's Fees and Costs”
(hereinafter, fees and costs order]. KHHA asserts that the ICA
gravely erred in: (1) holding that (a) KHHA is not a “planned
community association” as defined by Hawai'i Revised Statutes
(HRS) § 4219-2 (Supp. 2002), and thus, (b) KRHA is not entitled
to recover the fees it incurred in the circuit court pursuant to
HRS § 4210-10 (Supp. 2002);? and (2) holding in its fees and
costs order that (a) RHHA is not a “planned community

association” as defined by HRS § 607-14 (Supp. 2006),? and thus,

\ the Honoreble Joseph €. Cardoza presided over this matter.
2 WRS § (219-10 states, in relevant part:
(a) A121 costs and expenses, including reasonable

attorneys’ fees, incurred by or on behalf of the sssociation
for

 

(2) Gellecting any delinguent assessments against
fany nit er the owner of any unity
(2) Foreciesing any Vien on any unit; or
(3) Enforcing any provision of the asscciation
documents or this chapter;
sozinet 2 senner, occupant, tenant, employes of a member, or
any other persen’ who in any manner may use che property,
shall be promptly paid on demand to the association by such
person or persons =

 

  

 

2 HRS § 607-14 states, in pertinent part:

(continued...
FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER ***

 

8 cannot exceed

 

(b) the amount that KHHA can recover in f
twenty-five per cent of the judgment. We accepted KHHA’s
Application. We now: (1) affirm the ICA’s November 3, 2006
judgment, but for the reasons stated herein, and therefore vacate
the circuit court’s judgment with respect to its award of fees
and costs and remand with instructions; and (2) reverse the ICA’s
fees and costs order with respect to its award of fees.
1. BACKGROUND

‘The following are relevant portions of the facts and
procedural history as set forth by the ICA.
AL Des i ion

on Decenber 15, 2972, pursuant to an sqreenent of
sale, Ploneer Mil Company, Limited (Picneer| sold 70 acres
Of long on Maui (the Property) to Chbaysshi Hawaii.

 

 

 

-continved)
a ail the courts, in all actions in the nature of
acconpeit'. ..- there shell be taxed as attorneys’ fees, to

 

be paig by the losing party and te be included in the sum
for which execution may iseue, @ fee that the court
Geternines to be reascrable; <=. prov

inet exceed twenty-five per Cent of the tu

" Nothing in this section shall limit the recovery of

 

 

‘Socuments, or affect any right of a prevailing party to
Fecover attorneys’ feas in excess of twenty-five per cent of
the judgnent porsuant fo any statute thet specifically
provides that a prevailing Party may recover all of ite
Feasonsble attorneys’ fees

ist the variates of this section neana-e-nennrodit
fezeouners or conmonity association existing pursuant te
covenants Tunnsng with the lang.

(Exphases added.)

 

 
‘** FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER ***

Corperation (ONC). The bulk of the Property was used to
Sevelop the [xsanapali Milleige Supdivieien hereinafter,
Subdivision) ]. On June 18, 1980, Pioneer recorded a
Declaration of Covenants and Restrictions (Declaration)
against the Property. Later that day, in satisfaction of
the agreesent of sale, 2 deed was recorded conveying the
Property to OHC, subject to the Declaration.

 

 

   

fon July 16, 1982, Pioneer and ORC recorded a First
Anendnent of Declaration of Covenants and Restrictions
(First vended Declaration), which conpletely anended and
replaced the Declaration. Ihe First Aeanded Declaration
dmbored various covenants and restrictions relating to-land
stand te permissible architecture, structures. and

‘The First Anesded
Deciarstion declared that the covenants and restrictions
were "in furtherenee of 8 connon building schene hereby,
Imposed on the Property « ..« for the purpese of enhancing
and protecting the valve, dessramiiity ana attractiveness of
the Property.” Tt further provided that the gavenante and
xestricticns “shall run with the land and shali be binding
‘Saal partics havina or accuirina-any right. citle or
interest in the Property or any part therect.”

Under the First Anended Declaration, all structures
built, inprovenents nade, and landscaping dene in the
Property were subject to Pioneer's prior approval. Pioneer
ues suthorizeg to sssign ite rights ang duties under the
First Amended Declaration "at any time” and "to any party.”
Pioneer, ONC, and any lot cwner in the Property were
suthorited to bring @ civil action to enforce compliance
ith the covenants ang restrictions set forth in the First
Bnended Declaration. The First Anendes Declaration dig not
include @ provision establishing « procedure by which its
Sere cobla be snendes

KHHA I, 112 Hawai'i at 357-58, 145 P.3d at 900-01 (emphases

 

  

 

 

 

 

added) (footnote omitted) (some alterations in original).

B. The Incorporation of KHHA, Its Charter, and Ite By-Laws

‘on ctober 1, 1962, employees of OHC filed a Petition
for Charter of Incsrporaticn with the Department of
Regulatory Agencies (now known as the, Def
and Censuner Affaizs), state of Hawai's,
KHHA se a non{]profit corporation. The petition was
granted. WiIIA's Charter of Incorporation (Charter)...
Provided that each owner of a lot in the Subdivision “shail

 

 

 

+ the agreement of sale stated that the Property was subject to the
Soeelaration of Covenants and Restricticns,” which wae attached as an exhibit

and later recorded on June 19, 1980

 
 

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autonaticelly become a nenber of (KHHA} and chal be
entitled to ang be bound by all the rights, duties,
Privileges and obligations of 2 nenber” as’ cstablizhed by
the ‘Charter, the By-Laws of KUNA, and any rules and
Fegelatione adopted by KAKA.” The Charter granted various
Powers co KHHA, including the following express powers:

 

(6) Te may fix, levy, collect, and enforce
payment of, by any lawful means, any and all charges
nd sssessnents against ite nenbers . «+

 

(e) 1 may adopt rules and regulations governing
the’ facklities, propert. mente, and other areas
Sunes ond/or mointsined and persted by [HHA].

   

{£) 1 may, but shell not be obligated to, take
such action a6 1¢ dened necessary to enforce sny
Eecerded or unrecorded covenants and restrictions
Governing the use of the property within the
Scbaivisson, including, but pot limited to, the
Declaration of Covenents and Restrictions = + = as
sane may be amended from time to time.

HSA’ s By-Laws provides, anong other things, that

[t]he rights of nenbership [in KiHA) are subject to
the paynent of sesesenents levied by [KHKA], the
Sbligation of which aesesenents 1s Imposed Sosinst
Sach Owner of and becomes a 1ien upon the lot ageinet
which such sssecenents are made

 

 

 

 

Neither OHC nor Pionsex recorded WA's Charter or
joules soainet Subaiv
shih were
csseureter gesocistion To lev carers in
the Subdivision.
KBA I, 112 Hawai'i at 358-59, 145 P.3d at 901-02 (emphasis

added) (some alterations in original).

¢. The Bartial Assignment and Other Services Provided by KHHA

Since [Merch 27, 1986], KHKA has maintained... a private
Park avaliable for vse’ by KHHA senbers only. Tho park
Eontaine inprovenent® such ae welkways, lights, benches,
plenle: tables, grace, trees, and hedges which require
Fegular expenditures for repair, maintenance,

Feplacenents the fark has been’a enefit ce lot owere in
the Subdivision. Te has been used By let owners for
recreational activities ané has provided open space for the
Subdivision.

      
 

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(on June 20, 1986, @ Partial Assignment of Declaration
of Covenants and’ Restrictions (Partial hesignnent) wae
Fecorded in the Puresu of Conveyances. Pursuant to the
Earelal aselonnent, Pioneer assigned and transferred to XiA

i et z =

hs “KHER agreed to enforce each of
the provisions, covenants, and conditions of the Declaration
and First Amended Decisration and to indennify Pioneer
Sgainet any lose or somage arising from KHHA's failure to 60
So. GHC consented te and joined in the Partial Aseigraent-

 

  

By virtue of the Partial Assignnent, KINA has been
reepeneible since 19€8 for reviewing and Seproving
architectural plans for inprovenents to lots submitted by
ot owners. MHHA has monitorea construction of the
improvenents to ensure compliance with the approves plans
and specifications. Kia has also enforced the other
Ceverante and restrictions contained in the First Amended
Declaration. It has incurred expenses in resolving dispute
relating to its architectural review decisions and its
enforcenent of covenants and restrictions, including
Forsving and defending ageinat leeuite afising out of these
matters.

 

   

In addition to maintaining the park, reviewing and
approving plans for propoted improvenents, and enforcing the
Gevenante snd reetrietsons in the First Auended Declaretions
WKA has provided other services that Benefit the
Subdivision. Anong other things, MINA has maintained &
Flanting screen estenent and landscaping along public rights
Of may, including an srrigaticn aysten and fences within the
Ssndscspes area. it has cleaned unkengt vacant lots by
owing then and removing fubbisn. Kila also maintained the
Toads in the Sobdivieion until the roads were dedicated to
the County of Maui in April 1950. KHMA hae imposed
assessments against lot omers and collected such
Sescesnents to fund its activities since October 1, 1983.

 

 

 

 

 

HEHA I, 112 Hawai'i at 360, 145 P.3d at 903 (enphasis added).

D. The Dorans' Purchase of Their Lot

(on July 5, 1596, [Respondents/Defendents-Appellents
Dena 0. Doran ahd Michael P. Doran) became the ouners of Lot
No. ¢2'in the Subsivision when their warranty deed was
recorded. ‘Prior te purchasing their let, the Dorans had

actual and constructive notice of the existence of AHR

u the First dnended pects

Enrtial Assionzent. The Partial Assicnsent identified Kits
Sethe oreanizstion ressonsible for enforcing the covenants

and restrictions in the Declaration and First muenced
Declaration, The corens’ warrenty dees, however, G2d not

 
 

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state that their lot w
(laws.

fevbject to KMMA'® Charter or By-

 

. Prior to closing, the Dorans received documents which
referred to KilK, the tandstory nature of nenbership in
Kuh, “and the obligation to pay assessments for services
provided by HHHA. “In particular, the Dorans scnit they
Feceived copies of xiNA’s Charter and By-(L]aws Before they
porchesed. The Dorans” Deposit Receipt Offer and Acceptance
TOROA) stated that "Maintenance Fees are $240.00 paid
Guarterly,” ang their escrow sett lenent statenent reflected
fhe apportionment ‘sf the £240.00 guerterly saintenence fee
With the seller. The Derang’ OROA notified chen that thelr
obligation to purchase wae contingent on their review of
henecwner crgenization documents, including the articles of
incorporation, [B]y-[Llawe, minstes of the Lest annual
and financial statements. The Derans also executed
je dated duly 1, 1996, that contained & planned unit
Gevelopnent (PUD) rider, which stated that the Dorans’
property vas part of a PUD. The PUD rider required the
Berane to perform sil thesr obligations snder PUD" s
‘Const stvent Documents,” which were defined to include the
cuore association's articles of incorporstion and (B)y=
[Ljaws. The Derans were required to “promptly pay, when
ve, 2il dues and assessments imposed pursuant to the
Constituent Documents.”

 

 

 

 

    

 

 

At trial, Michael Doran testified that at the tine he
purchased hie home, he was under the impression thet the
Subdivision was a PUD, that menbersnip in KAKA was
mandatory, and that he wae obligated to pay acsesenente to
NUMA. From July 1596 through March 1989, the Dorans paid
assesenente to KUNA, participated in KEEA meetings, and even
Feguested that KilA enforce the land use restrictions
Contained in the Faret Amended Deciarstson against other lot
Senora. tn Tezruszy 1999, however, the Oorane circulated &
Resletter to nonccwners disputing the authority of KHHA to
Collect seeesenents. The Corans stopped paying their
Sesesenents and denanded that HHA refund the assessments
they hed previously paid. On June 22, 1998, the Derans sued
KGHA dn shail claims court seeking the return of ments
Paid to KHEA. ‘The suit was leter dismissed.

        

 

 

KOA I, 112 Hawai'i at 360-61, 145 P.3d at 903-04 (emphasis

added) .
E. The Circuit Court Proceedings

on August 2, 1999, KHHA filed a complaint in circuit
court against the’ Dorané, Anerican Savings Bank, F.8.8.
(ierican Savings), and varsove Doe ineividvels ang
entities. MIA sought: 1) a Judgnent declaring thet the
Dorane were obligated to pay assesenents (Count 2); 2) an

 

 

 
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injunction ordering the Dorans to pay assessments (Count 2):
3) a lien against the Dorans" lot for the aeeesements end
ether charges due and owing (Count 31; 4) a Jucgment against
the Dorans for the sssesenente and other charges due and
owing (Ccunt 4); 5) a judgment estopping the Dorans fro
Fefusing to pay sesessnents and other charges due {Count 5)
6) a foreclosure sale of the Corsns’ lot ae a seans of
collecting the outstanding fees and charges (Count 6); and
7) an award of attorney's fees and costs (Count 1). KRHA s
claine against hnerican Savings were later volunterily
Gienissea By stipolation.

 

 

 

fon Yay ¢, 2000, Judge Artemio Baxs entered an order
granting the Corans’’sotion for partial summary jodgment and
Gismiseing Count € of the complaint (the foreclogure ceunt)
vith prejudice. Inthe erder, Juage Baxe found:

 

 

1. That Plaintiff ie not on “aesociation” within
the meshing of... (HRS) (cJhapter 4239 (2004).

2. The mandatary membership in Plaintitt and any
obligation to pay assessments is not 5 real covenant
Fonning with the land at law

3."That there is not cnd he never been any
present, valid, existing lien on Defendent’s property
in‘ favor of Flaineaze.

After a bench trial before Judge Cardoza held in
August and Septenber of 2002, Judge Cardozs ruled in favor
Of KHIA ch all the Tesaining’ counts. Judge Cardota encered
2 Final Jodgnent in fever of KiHIA that: i) declared that
the Dorans are required to pay their share of the costs of
neintsining the commen ares and acainistering the
Subdivision; 2) granted injunctive relief ordering the
Dorans to comply with thelz payment cbligations as long as
they own Lot 42; 3) determined thet KHKA has a 1ien on the
Dorans’ lot for unpaid assessments and other charges due and
owing anda right to enforce the lien; 4) entered = monetary
judgment in the sun of $6,411.23, representing accrued
assessments of $8,150, late fees of $175, and interest of
£486.23; 5) entered judgnent equitably of otherwise
estopping the Dorans from refusing to pay sesessments and
ether charges due to KiWA; and 6) entered s monetary
judgment in fevor of KOHA tor Aes legal fees of $261,287.35
and its costs of $44,255.71.

 

 

 

   

In the Final Judgment, Judge Cardoza acknowledged the
prior dieniseal of KINA's foreclosure count by JU;
but ruled that KiHA 1s not precluded from attempting to
enforce its lien for unpaid arsesenente and cther charges
onder any available renedies, including foreclosure. in his
post-trial “Findings of Fact and Conclusions of Law and
Order,” Judge Cardeza also reconsidered ang reversed the
eerlier findings nade by Judge Baxa when Judge Saxe granted
tthe Dorane’ motion for partial summary judonent and
Gitniseed the foreclosure count. Judge Cardoze concluded

   

 

 
 

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REPORTS AND PACIFIC REPORTER ***

 

‘thet: 1) MIWA As an ssocistion within the meaning of HRS
(elhapter 4219 (2004); 2) that mandatory membership in KAHA
ind the obligation to pay secessnente axe covenante running
ith the Iang; and 3} SHHA has a valid Lien on the Dorens’
Joe ko secure paynent of acsessnents. Judge Cordoza’s
deternination that HHA was an association under HRS
[cinapter 4219 was particularly significant because At
provided a statutery Basis for MAHA to seek full recovery of
Kes attorney's fees and costs.

   

 

 

KAWAI, 112 Hawai'i at 361-62, 145 P.3d at 904-05 (sone
alterations in original).

F . cad
qhe-Aopen)-and the Ich’s Published cpinion-and Fees and

The Dorans appealed, pro se, alleging twenty-five
points of exror, the relevant portions of which can be distilled
into the folowing two contentions: (1) the Dorens are not

obligated te pay assessments to KHHA because the Declaration and
First Amended Declaration do not mention KEHA and do not inpose

an obligation upon lot owners to pay assessments; and (2) the

 

circuit court erred in awarding attorneys’ fees and costs
pursuant to HRS § 4219-10 because KHHA does not meet the HRS
chapter 4210 definition of “association.” With respect to the
first issue, the ICA affirmed the circuit court’s Novenber 26,
2002 judgment, holding that “under the circumstances of this
case, the Dorans implicitly contracted and agreed to pay the
assessments authorized under KHHA’s Charter and By-[L]aws. The

Dorans were bound by an implied obligation to pay their share of
   

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WEST'S HAWATI REPORTS AND PACH

the costs incurred by KRHA in providing services that benefitted
the Subdivision.” KHHA I, 112 Hewai'l at 363, 145 P.3d at 906.

. In regard to the second issue, the ICA vacated that
portion of the circuit court's judgment awarding fees and costs
to HHA and remanded for redetermination of the appropriate
amount of fees and costs. Id. at 365-67, 145 P.3d ati 908-10,

‘The ICA reasoned that KHHA was not entitled to fees and costs
under HRS § 4210-10 because KHHA did not meet the HRS § 4219-2
definition of “association” inasmuch as there were no recorded
instruments that granted KHHA the authority to impose on units or
on the owners or occupants of the lots, any mandatory payment of
money. Id, The ICA rejected KHHA’s argument that the First
Amended Declaration -- because it required a lot owner seeking
architectural approval for planned improvements from KHHA to bear
all costs incurred in connection with the review and approval
Process, and authorized KHHA to bring a civil action to enforce
land use and architectural restrictions against a lot ovner whe

violated such restrictions and to recover damag

 

and attorney's

fees in such an action -- created such authority in KHHA. Id. at

 

366, 145 P.3d at 909. Specifically, the ICA state:

We agree with the Dorane thet KHHA’s ability to
require a lot onner to pay the costs aesociated with
Srenitectural approval for desired improvenents te his or
her cum lot dees not cenonstrate that HAHA hag the authority
te inpose on Jot cuners 8 “mandatory payment of money as 8
regular ennual essescrent or otherwise” under the ARs &
4219-2 definition of “aeclaration.” Nor se the statutery

 

 

 

 

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definition satisfied by KiHA'e ability to collect demages or
attorney's fees inva civil suit to enforce Land use ang
architectural restrictions. Under the First inended
Declaration, os sesigned, KIKA did not have the authority to
impose a “mandatory Payment” on lot omers becsuse KINA
could not compel ict cuners to pay any money. Only the
Earticular lot cwner sho sought aychitecturai approval. for
Secired inprevenente or who violated @ restrictive covenant
was cbligeted eo pay.

 

 

 

As we construe the HRS § 4213-2 definition of
“declaration,” the recorded instruments must give the
association the power to require lot owners, on a collect
basis, ‘to pay for the services renceres by the association.
The abilicy to denana peyment. from an individual lot omer
for & specific service requested by that lot cuner or as
Sencticn for that lot owner's siolation of the restrictive
Covenants ie not enough. Otherwise, the statute's Use of
the plural form of the term “onite" in referring to "the
autherity in the eesociation to impose oh unite” and the
statute's use of the term “mandatory” to cescrsbe the
“payment of money” would be superfidous. See Camara wa
\SeAlud, 67 Maw. 232, 215-16, 685 F.2d 794, 797 (198@) ("It
isa cardinal rule of statutory construction that courts are
bound, if retionel and procticable, to give effect to ai]
parts of a statute, and that no clause, sentence, of word
Shall be construed as svperfiueus, void, or insignificant if
2 construction con be legitimately Found which will give
force to and preserve all the words of che statute.”)
Although Kia's unrecorded Charter and By=[Llous provided
‘that KGHA had the authority to impose mandatory payments of
snoney on let cuners, the instruments that had been recorded
Bowinet the Subdivision lets did not.

 

 

 

 

 

 

 

 

Id. (footnotes omitted) (emphases in original).
‘The ICA entered its judgment on appeal on Novenber 3,
2006. On Novenber 14, 2006, HHA filed a request for attorneys’
fees and costs incurred on appeal, noting that HRS § 607-14
provided a basis for an evard of fees to KHHA. KHHA also
asserted that because it was a “planned community association”
for purposes of HRS § 607-14, its fee award was not subject to
HRS § 607-14"s cap of twenty-five per cent of the judgment. KHHA

reascned that, “whether or not KHHA is a planned conmunity

a
 

2+ FOR PUBLICATIO’

association for the purposes of [HRS] [cJhapter 4213. . . is
irrelevant to its entitlement to an award of all of its
feasonable attorneys’ fees and costs pursuant to [HRS] § 607-14"
because the definition of “planned community association” in HRS
§ 607-14 was significantly broader than the definition in HRS
chapter 4213. On December 29, 2006, the ICA granted in part
KHHA’S request for fees and costs pursuant to HRS § 607-14 and
Hawai'i Rules of Appellate Procedure Rule 39, but capped KHHA'S

award of fees at twenty-five per cent of the judgment based on

 

its conclusion, without discussion, that KHHA was not a “planned
community association” as defined by HRS § 607-14.
G. Application for writ of Certiorar:

KHHA filed this timely Application on January 30, 2007,
and the Dorens filed their response on February 14, 2007. we
accepted certiorari by order dated March &, 2007. On March 16,
2007, the Dorans filed a “Notion for an Order Permitting the
Filing of @ Supplemental Brief," and on March 19, 2007, KHHA
filed a “Motion for Leave to File Supplemental Brief.” By order
dated March 20, 2007, this court granted both parties’ motions.
On April 2, 2007, KHHA filed its supplemental brief, alleging:
(1) public policy supports the circuit court's decision that KHBA
falls within the scope of the statutory definitions of @ “planned

community association”; (2) KHHA is a planned conmunity

2
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association under BRS chapter 421d; (3) the Dorans should not be
permitted te make new arguments in their response (4) HHA is a
planned conmunity association under HRS § 607-14; and (5) the
Dorans misinterpiet the ICA’s decision and attempt to raise
issues not before this court. The Dorans filed their
supplemental brief ex officie on April 2, 2007, contending: (2)

the ICA correctly determined that KHHA is not a planned conmunity

 

association under HRS chapter 421J;* and (2) the ICA committed
plain error in determining that the Dorans have an inplied
ebligation to pay assessments.‘
IT. STANDARD OF REVIEW
Statutory interpretation is “a question of law
reviewable de nove.” State v, Levi, 102 Hawai'i 282, 285, 75
P.3d 2173, 1176 (2003) (quoting State v. Arceo, 84 Hawa

928 P.2d 843, 852 (1996)). This court's statutory construction

 

"41, 20,

Ag guided by established rules:

 

+ In ther supplenental Brief, the Dorans dizect this court's attention
failed legislative bill, which would have anended the definition of
“planned cenmunity aseeciation” in HRS § 4219-2 and URS § 607-14, Such
cltation will not be ciscveced further ineenuch ae st is in contravention of
Jinks § 64172 (Sopp. 2006), which stoter that "[elvery appeal shell be texen on
the Fecore, and ho new evidence shall be introduced in the supreme court.

te

 

    

 

 

«Because the Dorans did not apply for a writ of certiorari to review
the ICA's determination that the Derane have an implies cbligation to pay,
ezenente, and because we perceive no plain error, we will not address this
irgument forther herein. See State -v. Belesan, 7€ Heuei'i 86, 69, £90 P26
693, 676 (1998) ("When a party fails to properiy chi @ ‘ruling of the
Sex, he ordinarily will net adcrese thet! roling absent plain error.” (Citing
State's. iiiets, 77 Hawai'i 308, 310 n.1, #84 P.2d 372, 373 m2 (2894).)).

 

 

  

 

     

 

2
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the fundanental starting point for statutory
rotation ir the language of the stetute itself,
Second, where the statutory Language is plain and
ranbiguovs, cur sole duty is to give effect to its
Plain and obvious meaning: Third, implicit in the
task of statutory construction is our forenost
Sbligatsen to ascertain and give effect to the
Sntention of the legislature, which is to be cbtained
primarily from the language contained in the statute
Eeeelf. Fourth, when there is doubt, doubleness of
Reaning, of indietinctiveness or uncertainty of an
enpressicn used in a statute, an snbiguity exist

And fifth, in construing an ébiguous statute, the
Reaning of the anbigueus words may be sought. by
Seamining the contest, with which the sabscuous words,
Phrases, snd sentences may be conpared, in order to
Becertein their true meaning.

Peterson v. Hawaii Elec. Light Co., Inc,, 85 Hawai'i 322, 327-28,
944 P.2d 1265, 1270-71 (1997), superseded on other rounds by HRS

§ 269-15.5 (Supp. 1999) (block quotation format, brackets,

   

 

 

 

citations, and quotation marks omitted).
m1. USSION

KHHA_is Not_a “Planned Community Association”
hs 7

HRS Chapter 4210 and Thus is Not Entitled to Recover the
Fees It Incurred in the Circuit Court Pursuant to HRS $
4239-10.

KHHA asserts that the ICA gravely erred in holding that

 

(2) KUNA is not a “planned community association” as defined in
HRS chapter 421J, and thus, (2) KHHA is not entitled to recover
the fees it incurred in the cireult court pursuant to HRS § 421J-
10, We disagree.

HRS 4213-2 defines “association” as “a nonprofit,
incorporated, or unincorporated organization upon which

responsibilities are imposed and to which authority is oranted in

u
+ FOR PUBLICATION IN WEST'S HAWAT'T REPORTS AND PACIFIC REPORTER ***

 

declaration which governs a planned community.”” (Emphasis

added.) In turn, “declaration” is defined as:

 

any recorded nstrunent, however denominated, that impos
Gh an sesociatson neintenance or operations?

   

ponsibilities for the connon @ at

pies sto0! ‘on_units, or-on the
ea reaui heruize in

be benefit of ser =

Secunente of the unite or the common areas. A declaration

Ghelodes ony esenceent or supplement to the instrunente.

described in this definition.

 

 

> A “planned community, the definition of which is not at issue here,

2 connon interest community, other than a condeningum or
EeoSperstive housing corporation oF # tine share plan which
Sheluses si"ef the following characterastice
2)" xean property subject to 8 reccrded declaration
Placing restrictions and obligetions on the
Ourere of the real property and proviging for
signee snd reepenibilseies of a separete
entity, “the setocistio
(8) “mien Sime and maintains certain propert
thin’ the planned ceanunity for the
Connon ee or Benefit, or both, of the
Genere of unite within the penned
conmsnity:
(8) hich ir obligated co maintoin ceztein
Property it aes not own within the
Planned conmanity for the comon use oF
Benefit, or bothy of the ouners of units
within the planned community) or
tc) mien is soligated to provide services to
Say auch owners or units
(2) Individual onners cm separate unite which are
pert of a planned cenmunity st least cone of
hich are inproved by or are to be inproved by
Feridential Gwellings?
(2) Sines nave suzanstic and non-seversble
menserehip in an atscciation by virtue of
Sunership of unite mithin the planned cenmunity:
(6) Giners, other than ¢ master developer ox
declarant, are cbligated to pay mandatory
fetenants by virtue of cunership of 2 dst
within the planned conmonity.

   

 

 

 

 

ns § 4213-2
‘** FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER ***

HRS § 4219-2 (emphases added).
‘The question here is whether the First Amended
Declaration, which is the only relevant instrument that is

recorded, creates in KHHA the authority as required by the

 

definition of “declaration” set forth ebove.' The portion of the

First Amended Declaration that KHHA contends constitutes such a
grant of authority states:
2. Architectural Contrel. mo structure shall be

‘ctedy placed or altered on the Property untsi the plant
and specifications therefor have been submitted to and
pprcved by. {KBHA]

 

   

 

  

Sneluding = a, en a
Ssbreving plane and epecisiestione
(Emphasis added.) We disagree that a requirenent that a lot

owner “bear all costs” incurred in connection with the review and
approval of that lot owner's proposed architectural plans is
equivalent to e grant of authority to “impose . . . [a] mandatory
Payment of money as a regular annual assessment or otherwise in
connection with the provisions, maintenance, or services for the
benefit of some or all of the units, the owners, or occupants of
the units or the common areas.” Notwithstanding the statute's

use of broad terminology such as “or otherwise” and “some or

 

+ the Dorans also argue thet there is no recorded instrument “that
imposes on an steociation maintenence or operational responsibilities for the
common eres” as required by the first part of the definition of “declarsticn.”
This axgusent, however, need not be discussed further herein Because our
helding that the First Anenced Declaration does not create in ¥iltA the
suthersty required by the second part ef the definition is dispositive.

 

 

1
#9 FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTE!

 

11,” KHHA’s argument asks this court to stretch the language of

 

HRS .§ 4213-2 beyond its reasonable interpretation.’ Clearly, the
statute meant to encompass instruments with language such as that
used in KHHA’s unrecorded Charter -- “(KHHA) may fix, levy,
collect, and enforce payment of, by any lawful means, any and all
charges and assessments against its members[.]” Because the
Charter was not recorded, however, and because KHHA’s First
Amended Declaration cannot reasonably be interpreted as creating
the requisite authority in KHHA, the ICA did not gravely err in
concluding that KRHA is not an “association” under the plain
meaning of HRS § 4219-2.!° Consequently, the ICA did not gravely
with the ICA's conclusion that “the recorded
“Teeociation the power te require lot owners, on @
ccllective ‘ervices fendered by the association.” KIA
[112 Hawai't at 366," 145 7.38 at 909. We agree with the ICA that the plain
Reaning of the statute requires that the recorded snstrumenta authorize the
Scsccldcion te infete on mublaie onita, cimerg, ot cecupanta mandatory

sents of resey sn connection with cetvices for the benefit of "some of all
[Liew not just one) of the unitg, the owners, oF cceupantg.” “ARS § 4210-2

(exphises added).

 
   

 

 

 

 

% AGHA’ s argument that public policy favors supporting the legal
framework of community Theeed, this se not a
situation wherein a9 or status és @ “planned
nvnity seeceiat ion” tute’ s requirenent®,
isther, it appears chat HAS chapter é21i was enacted epproxinetely £1 ft
years after the incorporation cf KallA. Thus, it 1s possible that the
Yegisuature, in enacting IRS chapter (213, intended that exteting
organisations such ss HHA -- s.e,, orsenizetions that would be *associations”
pursuant to chapter 4217 but for the failure to include the aesesanent power
Ena recorded snstrunent =~ wovld fall under chapter 4210. However, even if
we Believe thet the legislature sntended to include organizations such ss KEHA
Unser HRS § 4219-2"s definition of “aescciation,” we cennot depart from the
plain and snanbiguoss language requiring that the instronent granting the
Required authority must be recorded. See State ¥. Dudeit, $0 Hawai't 262,
251, 976 P.24 700, 108 (7993) ("He do not legislate or sake laws. even where
Ene court is convinced in ita own mind that the Legislature really meant and
(Continved.

   

   

 

 

 

 

 

n
 

++ FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER

err in concluding thet KHHA is not entitled to fees and costs
puréuant to HRS § 4219-10.
B.’ Fees and Costs on Remand

While we agree with the ICA that KHHA is not entitled
to fees and costs pursuant to HRS § 421J-10 and that the matter
should be remanded, ve write to clarify the extent to, which
attorneys’ fees and costs may be avarded. We emphasize, that, on
remand, the circuit court is limited to redetermining an avard of
fees and costs pursuant only to those grounds upon which KHHA had
previously relied. Remand is not an opportunity for KHHA to be
awarded fees and costs besed on other grounds upon which it could
have raised earlier, but did not.

1. Fees

Aside from HRS § 4219-10, KHHA requested fees based on
HRS § 607-14.5 and also specifically requested $2,995.06 in fees
pursuant to the circuit court’s March 20, 2000 order finding that
the Oorans violated Hawai'i Rules of Civil Procedure (HRCP) Rule
11 and granting KHHA’s request for sanctions to include
attorneys’ fees and costs. Because the Dorans did not appeal the

circuit court’s award of $2,995.06 in fees based on the sanctions

 

(, .seontinved)
Antended Senething not expressed by
acthority to cepart from the plain meaning of the language used.”

 

phraseology of the Act, it has ne
(Qucting

     

States mever, €1 Haw. 74, 75, S98 F.2d 266, 291 (1979)+) (Enphasss,
eaitted.])

Fey
s+ FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER ***

 

order, limiting their appeal to the circuit court’s determination
that KHHA was entitled to fees pursuant to HRS § 4219-10, KHHA is
entitled to this amount.

‘Therefore, on remand, the circuit court is instructed
to award KHHA fees in the amount of $2,995.06, and determine
whether and to whet extent KHHA is entitled to additional fees
based on HRS § 607-14.5.

2. Costs

Although KHHA is not entitled to costs under HRS §
4210-10, KHHA also requested costs in the circuit court pursuant
to HRCP Rule 54 and HRS § 607-9 (1993)."" However, because, as
recognized by the ICA, “[t]he circuit court's award of $44,225.71
in coste included items . . . that KHHA only argued were
authorized under HRS § 4210-10(,]” KHHA IT, 112 Hawai'i at 364-65,
145 P.3d at 907-08, the ICA did not err in vacating the circuit
court’s order of costs and remanding for recalculation of costs

purevant to HRCP Rule 4 and HRS § 607-9, We therefore affirm

4 BRE § 607-9 provides in relevant part:

ALL actual éisbursenents, including but not Limited
to, ineractate travel expenses for witnesses and counsel,
expenses for deposition transcript originals and copies, and
Other incidentsl expenses, including copying costs,
Sntrastate long distance telephone charges, ané postage,
guorn to by an attorney or a party, and deemed reasonable by
the court, may be siloved in taxation of costs.

 

 

1s
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that portion of the ICA's judgnent that vacated the circuit

court's award of costs.

C.' Kila {sa “Planned Commun a5 Defined in HR
Coste Incurred on Appeal.

KINA also argues that the ICA gravely erred in holding
in Ste Decenber 29, 2006 fees and costs order that, because KHHA
is not @ “planned community association” as defined in the
assunpsit statute, HRS § 607-14, supra note 3, “the attorney's
fees that nay be svarded [to HHA) pursuant to HRS § 607-16 are
Limited to twenty-five per cent of the judgnent.”

Notwithstanding the ICA's conclusion that KHHA is not @ “planned
community association” as that phrase is utilized in liRS chapter
4210, KHHA argues that it is a “planned conmunity association” as
that phrase is defined in HRS § 607-14. KHHA therefore asserts
that it is not subject to the twenty-five per cent cap on its

fees and costs incurred on appeal. We agree.

1, The definition of a “planned community association” in
HRS § 4219-2 differs from the definition of that phrase
in URS § 607-:

 

WHA points out that in contrast to the definition of
‘planned community association” set forth in HRS § 4219-2
discussed in Section III.A, supra, HRS § 607-14 provides a
significantly broader definition: “*Planned community

association’ for the purposes of this section means @ nonprofit

2
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homeowners or community ssseciation existing pursuant to
covenants running with the land.” HRS § 607-14 (emphasis added).
HRS chapter 4213 was created by the sane Act that anended HRS

§ 607-14 to include an exception to the twenty-five per cent cap
for planned conmunity associations. 1997 Haw. Sess. 1. Act 132,

the legislature

 

§§ 1-2 at 247-53. KHHA argues that becau:

defined the sane phrase differently in the same Act, the

 

legislature intended different definitions. The Dorans appear to
counter that, because the ICA concluded that HINA is not a
planned community associetion under HRS chapter 4219, it cannot
be a planned community association under HRS § 607-14. Based on
the following, we agree with KHHA.

Ie must be presumed that in defining the phrase
‘planned community association” when the legislature amended HRS
§ 607-14 in Section 2 of Act 152, the legislature knew the
definition it sseigned to that phrese in Section 1 of the same
Act, which would create chapter 4210. Cf. Tenashiro v, Dep't of
Hunan Servs., 112 Hawai'i 368, 427, 146 P.3d 103, 142 (2006)
(stating that “the legislature is presumed to know the law when
enacting statutes") (quoting Agustin v. Dan Ostrow Constr. Co.
Inca, 64 Haw. 60, 63, 636 P.2d 1548, 1351 (1981)). Thus, had the
legislature intended that the definition of a “planned community

association” be the same for both statutes, the legislature could

2
 

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have defined the phrase in HRS § 607-14 by reference to the
definition in chapter 4219. The legislature did not. Rather, in

the legislature used the

 

defining the phrase in HRS § 607-14,
language “for the purposes of this section,” expressly indicating
that the legislature intended a different definition. See State
vs Kalani, 108 Hawai'l 279, 283-84, 118 P.3d 1222, 1226-27 (2005)
("[C)ourts are bound, if rational and practicable, to give effect
to all parts of a statute, and that no clause, sentence, or word
shall be construed as superfluous, void, or insignificant if a
construction can be legitimately found which will give force to
and preserve all words of the statute.” (Citations omitted.)).
Gf. Rodrigues v. State, $2 Haw. 156, 168, 472 P.2d $09, SIE
(1970) (stating that “in the absence of an express intention to
the contrary, words or phrases used in two or moze sections of a
statute are presumed to be used in the same sense throughout")
(quoting Gaspro, Ltd. v. Comm'n of Labor & Indus. Rel., 46 Haw.
164, 377 P.2d 932 (1962)). Thus, notwithstanding the fact that
the word “association” is used in HRS § 607-14’s definition, it
does not have the same meaning as “association” es defined by HRS
§ 4219-2. Because the legislature utilized different definitions
within the same Act, it may reasonably be inferred that the
legislature ultimately decided to implement @ broader definition

in HRS § 607-14. This court need not determine why the

2
 

LICATH

 

IN WEST'S HAWAP REPORTS AND

 

FOR.

     

legislature acted as it did; it suffices to conclude that,
although KHHA may not be a “planned conmunity association” for
purposes of HRS chapter 4219, it can be a “planned community
association” for’ purposes of HRS § 607-14.

2. KBHA is a “planned community association” pursuant to

HRS § 607-14 and is thus not subject to the twenty-five

Per cent cap on its award of fees.

We next address whether KHA is a planned community
association pursuant to HRS § 607-14 such that it is not subject
to the twenty-five per cent cap on its award of fees. As set
forth above, HRS § 607-14 defines a “planned community

association” as “a nonprofit homeowners or community association

 

existing pursuant to covenants running with the land.” There ss
no dispute that KIHA is a nonprofit organization. The question
that remains 1s whether KHHA “exist(s] pursuant to covenants
running with the land.”

According to the Charter, KHHA exists for the purpose
of, inter alia, “provid{ing) for the management, maintenance,
protection, preservation, adzinistration, and development of the

(Subdivision, ]” and has the power to, inter alia, “take such

YRS chapter ¢219 uae enacted in 1997 and Spplies to “ell planned
conmunity ssscciatsone evicting as of June 16, 1997 and all plannea corsunity
Gecocsations created thereafter.” HRS § 421J-2 (Supp. 2002). KHBA wae
Sneorporated in 1952. the legislature contemplated that sone sroups
wosld sot qualify a5 “sescciations” st defined by HRS chapter 4210, But stil]
Nented to sliow the full recovery of ateorn w=" Lees, net subject te
Titi Menty-five per cent cap uncer #RS § 60 fo tne preveiling party sn
Ttigetion invelving those erganizaticns

 

 

 

 

     

 

2
 

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action as is deened necessary to enforce any recorded or
unrecorded covenants and restrictions governing the use of the
property within the Subdivision, including, but not limited to,

‘the Declaration of Covenants and Restrictions . . . as same may

 

be amended fron time to time.” The First Anended Declaration
sets forth various covenants, and pursuant to the Partial
Assignment, also provides that KHHA is authorized to enforce such
covenants. Based on the following analysis, it is clear that
these covenants run with the land such that KHHA falls within the
definition of a “planned community association” as set forth in
HRS § 607-14.

Our discussion begins with Haikiki Malia Hotel, Inc, vs
Kinkai Properties Ltd, Partnership, in which we stated that
“[£ler @ covenant to run with the land: (1) it must ‘touch and

concern’ the lands (2) the covenanting parties must intend it to

 

run with the lend; and (3) there must be privity of estate.” 75
Haw. 370, 383, 862 P.2d 1048, 1057 (1993) (quoting Flying Diamond
Oi] Corp, vs Newton Sheep Co., 776 P.2d 618, 623 (Utah 1989).
Although Waikiki Malia is distinguishable from the instant case
insofar as the issue in that case was the enforceability of a
covenant against @ party as opposed to the interpretation of a
statute, we look to the three-prong Waikiki Melia analysis for

guidance.
 

FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER ***

Here, with respect to the first requirenent, the First
Amended Declaration sets forth various covenants that “touch and
concern” the land, including the imposition of various
restrictions relating to land use, permissible architecture, and
landscaping within the subdivision. See Waikiki Malia, 75 Haw.
at 384, 862 P.dd at 1087 (concluding that @ height restriction
“[ellearly” satisfied the touch and concern element because it
diminished the value of the land by limiting what could be built
on it). Thus, the first elenent is satisfied.

To determine whether the covenanting parties intended
the covenant to run with the land, the language of the deed is
examined. Id, at 384, 862 P.24 at 1057. The Dorans’ warrenty
deed states that their lot is subject to the First Amended
Declaration, which expressly states that the covenants and
restrictions set forth therein “shall run with the land and shall
be binding on all parties having or acquiring any right, title or
interest in the Property or any part thereof.” Such language

et

 

rly supports the conclusion that the parties intended the
covenants to run with the land. Cf, Lee v, Puamana Cnty. Ass’n,
109 Hawai'i $61, $68, 128 P.3d 874, 881 (2006) (*{W]e have long
held that where a deed makes a specific reference to @
restrictive covenant, the grantee is on notice that his interest

is subject to the terms of that restrictive covenant.”

 
*** FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER ***

(Citations omitted.)). Furthermore, the fact that the covenants
weré created as part of a general plan of development for the
Subdivision demonstrates that the covenants were intended to run

with the land. As set forth in the Restatement of Property:

If the promise was procured by the promises in pursuit
of general flan of ceveicpnent which includes not only the
Jand with respect to whieh the promise was made but other
land @s well, the likeliheed that the promise was expected
to be binding upon the successors of the promicor is’ greet,
es st would in ali prozabslity seriovely interfere with the
successful carrying out of the plen sf this were not true

A general plan implies a controlled stability of use end
eppesronce. “This fact is one of the chief inducenente to
Purchase under the plan. Such stability de within che
norms] expectations of the parties to promises nade persuent
to it. “Tt would not exist unieas the prom: eting
bse nade by the perties to the conveyances uncer the play
ound not ondy the respective proniscrs but their successors
ee well. Hence the fact that 6 promise ie nage pursuent te
general plan tence strongly to prove that the promise War
intended to bind the successors of the prosiser.

 

 

  

 

 

 

Restatenent of Prop.: Servitudes § $31 cmt. ¢ (1944). Thus, the
second element is also clearly net.

According to Waikiki Malia, privity of estate is the
third element required for covenant to run with the land. 75

Haw. at 383-84, 862 P.2d at 1057. As stated in that cast

 

Generaily, “privity of estate requires @ particuler kind of
relationship! between the original covensnter and the.
covenantee." Elving Oiencnd' Oi], 776 F.2d at 626, There
are three types of privity:
(2) mutuai, ite, a covenant arising from sincltanecus
Snterests in the sane land; (2) norizentel, sec,
covenant created in connection with a conveyance of en
estate from one of the perties to ancther and. (3)
vertical, i.e,, the devolution of an estate burdened
or benefitted by s covenant fron an original
covenanting party to a successor.

 

 

 

2
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IC REPORTER ***

 

REPORTS AND |

Waikiki Malia, 7 Haw. at 386-87, 862 P.2d at 1088. We did not
specify, however, which of the foregoing three types of privity
are required to fulfill the privity of estate element. Rather,
we focused only én vertical privity, holding that its existence
satisfied the requirenent. Id, at 387, 862 P.2d at 1058. As
stated in that case, “[vJertical privity arises when the person
presently claiming the benefit, or being subjected to the burden,
is a successor to the estate of the original person so benefited
or burdened.” Id, at 387, 862 P.2d at 1058 (inteznal quotation
marke, brackets, and citations omitted). It appears, however,
that the vertical privity analysis is not applicable to the
instant case. As mentioned above, Waikiki Malia is
distinguishable from the instant case because the igsue in that
case was whether privity of estate existed between the
covenanting parties such that a specific covenant was enforceable

against @ specific covenantor. Here, on the other hand, there is

 

no “person presently claiming the benefit, or being subjected to
the burden” because we are not determining whether a specific
covenant is enforceable against @ specific party. Rather, we are
faced with the more abstract question of whether the covenants
set forth in the First Amended Declaration constitute covenants

that run with the land as a matter of statutory interpretation.

‘Thus, a vertical privity of estate analysis is not necessary in

2
++ FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER ***

the unique situation presented here. We therefore turn to a
discussion on the renaining two types of privity: horizontal and
mutual.

It appears that horizontal privity was present in this
case with respect to the original Declaration insofar as the
covenants therein were created in connection with the: conveyance
of the Property from Pioneer, the original covenantee, to OHC,
the original covenantor. See supra Section I.A. It further
appears that mutual privity is elso present in this case with
respect to the First Amended Declaration because the covenants
therein arcse from “simultaneous interests in the sane land”
inasmuch as OHC was the fee owner of the entire Property at the
time the covenants were imposed thereon by recordation of the
First Anended Declaration, and Pioneer, by virtue of the original
Declaration, had the authority to enforce the covenants. See

supra Section I.A.#

 

8 we recognize that scne suthority suggests that horizontal and mutual
privity should no longer be required for a covenant to run with the land.
‘a. Elvine Disnend O11, 776 P.24 at €28 ("Mocern legal writers unanineusly

 

Favor the abolition of at leset mutual and horisontal privity.” (voting §
Richard R. Powell, ‘The Lew of Real Proverty 4 €73(2) (el, at 66-67 (2968) 2))7
Bright v. Lake Litsanore tern, Ind,, €56 A.24 377, 390" (Md. App. 1998)

 

(noting that snodern view" of privity “abolished the requirenenta of both
horizontal ane mitual privity, retaining only she requsrenent of vertical
privity"

1986) (Horizontal privity of estate is
for an agreement to run with the land and bind
Successors in snterest.” (Citation omitted.)}. It sppeare however, that
those cases focusing ch vertical privity, Like Haikiki Malia, ciseves whet!
a covenant runs with the land for purposes of determining its enforceability

(continued)

 

 

 

 

 
FOR PUBLICATION IN WEST'S HAWATT REPORTS AND PACIFIC REPORTER ***

 

Accordingly, the covenants in the First Amended
Declaration run with the land such that KHHA is 2 “planned
community association” for purposes of HRS § 607-14. we
therefore hold that KHHA is not subject to the twenty-five per
Gent cap on ite attorneys’ fees incurred on appeal."*

Iv. CONCLUSION

Pased on the foregoing, we affirm the ICA's November 3,

2006 final judgment, which affirmed the circuit court’s judgment

3, .continved)
ageingt Specific party. See, e.0., Flving Disnond O11, 776 P.2d 618 (suit
iohiRfecee cnner of mineral estate's promise to pay surface owner); Bright.
$Se hida°S2)" tnemecwnere’ azsociation sued lot ouners seeking te enforce
CSkehine ageinse them). The focus on vertical privity arises from the view
Efet"ethe Parties te en action to enforce a covenant, if not thenselves makers
Shine contract. most each have succeeded by privity te the estate of one of

 

 

 

Such makers... =" Flying Disnond Oi, 776 P.2d at €28 0-23 (quoting 163
pictavay' giao. inc. vi ity investing Co, 120°F.26 €13, 816 (2nd Cir
PETES aitcussed above, however, the present case is not an ection to

thos, the reason for

 

anforee a covenant sgeinst 4 specific party, and,
focssing on vertical privity dees not exist he

 

We express no opinion regarding the view that horizontal and mutusl
privity shoold not be requized for e covenant to run with the land in the
Pettkd Gf enforcing @ specific cevenent against a specific party. Rather, we
Seip aete that horizontel and mtual privity exist here and hold that

Strlicel privity anaiyets se not necessary in the unique situation presented
by his cece because there is he person “presently claiming the benefit, or
Bling Subjected to the burcen,” thereby distinguishing Maikiki Malia.

 

   

 

1M the Restatement (Third) of Property supports this conclusion, In «
ction entitled *Servivudes iaplied from Generel Plan,” it provides: “Unless
She eSces “or circunstances indicate a contrary intent, conveyance of land
poleuast te 2 generel plan of cevelopment inplies the creation of servitudes

: (third) of Prop.? servitudes § 2.14 (2000). The
hestatenent defines “servitude” a *a legal device that creates e right or an
Seiigotien het suns with Jand or an interest in land,” Restatenent. (Thire)
Of Prope! Servitudes § 1-1 (2000).

 

 
   

 

 

 

© We enphasize that our holding that MHKA is entitled to attorneys’
fees incutfed on appeal pursuent to HRS § 607-14 does not entitle KHER to
itguest fees, porsuent to this statute for the fees it incurred in the circuit
Scere. See Section I71-8.1, sunra.

 

2s
 

‘OR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER **#

in part and vacated with respect to its avard fees and costs, but
for the reasons stated herein. Accordingly, the matter is
Femanded to the circuit court with instructions: (2) (a) to
enter an award of fees in favor of KHHA to be taxed against the
Dorans in the amount of $2,995.06 and (b) to determine whether
and to what extent KHHA ie entitled to additional feed based on

HRS § 607-14.5: and (2) to recalculate its award of costs

 

Pursuant to HRCP Rule 54(d) and HRS § 607-9, We further reverse
the ICA's December 29, 2006 fees and costs order with respect to

soyce ¥. Nesiey, J

be sata OD. Paviny Over
bana 8. Soren, fe
Peopondents/defendancs- aaa

he response
me seers Krm €, Daly Be +

«A separate order suarding fees and costs incurred on apre:
of MIKA to be taxed against the Derans will be entered forthwie
‘this opinion.

    

 

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