Title: City and County of Honolulu v. Sherman. S.Ct. Order of Correction, filed 03/22/2006 [pdf].

State: hawaii

Issuer: Hawaii Supreme Court

Document:

LAW LIBRA

‘*** FOR PUBLICATION *#*

 
 
 
  

IN THE SUPREME COURT OF THE STATE OF HAMA:

  
 

000 =:

   

aa

CITY AND COUNTY OF HONOLULU, a municipal corporation
‘of Hawaii,
Plainti££-Appellee/Cross~Appel lant /Cross-Appellee,

JAMES M. SHERMAN, also known as James Malcolm Sherman, and AKIKO
S. SHERMAN, also known as Akiko Sakiyama Sherman, as Trustees
Under that certain unrecorded James M. Sherman and Akiko S.
Sherman Revocable Trust dated May 2, 1989; JAN CAMILLE BELLINGER,
Trustee under the Jan Camille Bellinger Revocable Living Trust,
under that certain unrecorded Trust, Agreement dated Novenber 23,
1993, CLARENCE K. LEE, as Trustee of and for the Clarence K. Lee
Revocable Trust, under that certain unrecorded Trust Agreement
dated January 28, 1992, as amended; and MYRNA P. CHUN-HOON,
successor Trustee under that certain unrecorded Revocable Trust
of Albert C.K, Chun-Hoon dated October 11, 1984, as amended, and
MYRNA P. CHUN-HOON, Trustee under that certain unrecorded
Revocable Trust of Myrna P. Chun-Hoon, dated October 11, 1984, as
anended, GEORGE B. GARIS, also known as George Benjamin Garis, as
Trustee under that certain unrecorded George 8. Garis Revocable
‘Trust dated November 28, 1983, as amended; CHINH TRONG LE; KAREN
WILSON ROSA; ELIZABETH W. TAKAHASHI, Trustee of the Elizabeth W.
Takahashi Revocable Living Trust under that certain unrecorded
‘Trust Agreement dated July 14, 1993, STUART EDWIN GROSS, as
Trustee under that certain unrecorded Trust Agreement known as
‘The Stuart E. Gross Trust dated February 19, 1985, and MARCIA
KURZWEIL GROSS, as Trustee under that certain unrecorded Trust
Agreement known as The Marcia K. Gross Trust dated February 19,
1985; JOHN PHILIP SPIERLING? MARK SPERRY and MOLLIE SPERRY, Co-
Trustees of the Mark Sperry Revocable Trust dated May 29, 1989,
‘and MOLLIE SPERRY AND MARK SPERRY, Co-Trustees of The Mollie
Sperry Revocable Trust dated May 29, 1989; SAYURI TANIGUCHI and
ERICA TANIGUCHI DORMAN; KENNETH GRAHAM PATTERSON and LILLIAN
PAPACOLAS PATTERSON; MOSES MOSAI LO and SHEILA DICKENSON LO;
FRANK K. MIN, also known as Frank Kui Pong Min, and ELAINE N.
MIN, also known as Elaine Nam Min, Trustees under that certain
Trust Agreement dated April 9, 1985, and ELAINE N. NIN, also
known as Elaine Nam Min and FRANK K. MIN, also known as Frank Kui
Pong Min, Trustees under that certain Trust Agreenent dated April
9, 1985; ARTHUR R. KING, JR., and RUTH MILDRED KING, Co-Trustees
Of the unrecorded Arthur R. King, Jr. Trust Agreement dated May

 
‘** FOR PUBLICATION ##*

18, 1990; and RUTH MILDRED KING and ARTHUR R. KING, Co-Trustees
of the unrecorded Ruth Mildred King Trust Agreement’ dated May 18,
1990; DEANNA LOU LEVY, as Trustee under that certain unrecorded
Trust Agreement known as The Deanna Lou Levy Revocable Trust
dated December 4, 1990; ROBERT G. LESS and YUKO LEES, Co-Trustees
under that certain unrecorded Trust Agreement known as The Yuko
Lees Trust dated June 14, 2000; ELISABETH KEHRER ANDERSON, as
Trustee of the Elisabeth Kehrer Anderson Revocable Living Trust
Agreement dated June 28, 1981, as amended and restated; RAMEZ
BASSIR; PAUL JOHN CASEY, as Trustee under that certain unrecorded
Self-Trusteed Trust dated August 31, 1987, and JANICE YOKO CASEY,
as Trustee under that certain unrecorded Self-Trusteed Trust
dated May 20, 1986; GEORGE HENRY LUMSDEN and JOANNE CHUN LUMSDEN;
‘ANN TAKAKO YAMAMOTO, as Trustee of the Self-Trusteed Trust
‘Agreement of Ann Takako Yamamoto, under unrecorded Trust
Agreement of Ann Takako Yamamoto dated April 10, 2000; FRANCES M.
WATANABE, Trustee under that certain unrecorded Frances M.
Watanabe Revocable Trust dated April 2, 1993, MEREDITH KWOCK
LEONG PANG; NEIL SIMMS BELLINGER, Trustee under that certain
unrecorded Neil S. Bellinger Revocable Living Trust dated
Novenber 20, 2002; WALLACE LEE YOUNG and ERNESTINE CHING YOUNG:
JOYCE A HAGIN and LAWRENCE REICH; DAVID PATRICK KELLY and KETKO
KELLY; PATRICIA CARLEEN BROWN, Trustee for the Patricia Carleen
Brown Revocable Trust Agreement dated January 21, 1993; RANDY
NEIL YEAGER and SUSAN KAYCTE YEAGER; and GAIL SUZANNE KOGLMAN,
Defendants-Appellants/Cross~Appellees,

 

and

FIRST UNITED METHODIST CHURCH, a Hawaii non-profit corporation,
Defendant -Appellee/Cross-Appellee/Cross~Appellant,

and
JOHN DOE 1-200; MARY DOE 1-200; DOE PARTNERSHIP 1-100; DOE

CORPORATION 1-100; DOE NON-PROFIT CORPORATION 1-100; DOE ENTITY
1-100, Defendants.

No. 26896

APPEAL FROM THE FIRST CIRCUIT COURT
(crv. No, 03-21-0963)

FEBRUARY 28, 2006
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MOON, C.J., LEVINSON, NAKAYAMA, AND DUFFY, JJ., ANO CIRCUIT JUDGE
‘SAKAMOTO, IN PLACE OF ACOBA,'J. RECUSED

QPINION OF THE COURT BY LEVINSON, J.

This appeal involves the interpretation and application
of Ordinance 91-95 of the City and County of Honolulu, as
codified in Revised Ordinances of Honolulu (ROH) Chapter 38
(1991). ROH ch. 38, entitled “Residential Condominium,
Cooperative Housing and Residential Planned Development Leasehold
Conversion,” established the authority of the City and County of
Honolulu to file eminent domain actions for a lease-to-fee
conversion of certain leased-fee interests.”

‘The present matter arises out of a condemnation action
filed by the plaintiff-appellee/cross-appellant /cross-appellee
City and County of Honolulu (hereinafter, “the City”), pursuant

 

& specifically, ROW ch. 38 authorized the City and County of
Honolulu te

acquire, either by voluntary purchase or through exercise of the
Power of eminent donain, the fee simple interest in land situated
Snderneath condominium developments from the fee owners of the
una in order to convey fee simple title to the oumer-occupants of
the cordoninium units, who, prior to the City's acquisition,
essed the fee interests from the fee owners, As auch, ROM’ ch. 38
Provides = mechanism by which condominium omers nay convert their
[eased fee interests into fee sinple interests appurtenant to
their condoninium units. RO# ch. 38 authorizes the City's
Department of Housing and Conmunity Development to promulgate
Suministrative roles sn order to facilitate the lesse-ro-fee
Conversion process.

 

 

Soon ys City and County of Honolulu, 98 Hawai'i 233, 237 n.1, 47 F.3d 348, 352
Bel {2002}. Eftective February 5, 2005, the City Council of the City and
County of ionolulu passed Bill 53/ordina ied ROH Ch. 38.
Nevertheless, the repeal of ROM Ch. 36 does not affect the present matter;
insemuch se the City Counesl hed aiceacy authorized the eminent domain
Proceeding at issue. See Ordinance 05-001 § 3(6) ("Any designation of @
Gevelopment for leasehold conversien shall be invalid on the effective aate of
this ordinance if the council did not authorize before the effective date of
this rdinence the eminent domain proceeding to acquire all of 2 portion of
the leased fee interests te the developeent-”)

   

3
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to its eminent domain power, in which it originally designated
twenty-eight units and later amended the designation to add six
units within the Admiral Thonas condominium complex (the Adniral
Thomes) for conversion from leasehold to fee simple on behalf of
forty-seven owner-occupant applicants (collectively, the
lessees)? The defendant-appellant /cross-appellee/cross-
appellant First United Methodist Church [hereinafter, “the
church"}, the fee owner of the Admiral Thomas, opposed
condemnation and counterclaimed for violations of (1) federal and
state constitutional rights of separation of church and state and
freedom of religion, (2) the federal Religious Land Use and
Institutionalized Persons Act of 2000 (RLUIPA), 42 U.8.C. §
2000ce gt sea. (2000)? and (3) federal civil rights.

 

2 me lessees
Clarence Lee, Myrna Chan-Hoon, Geer:
ERERRSR A Stuake "Geos, Marcle Gross, John Sperling, Mark Sperry, Molie
EESNeMiyari Tenigueni, Eeica Dorman, Kenneth Pateerson, Lillian Fattersen,
Wesco icy Sheila to, Frank Min, Elaine Min, Arthur King, dr.» uth King,
peehea eeyh Rovere Lees, Yuko Lees, Elisabeth Anderson, Ranez Bassir, Faul
Gitey, sarice Casey, George Lomecen, JoAnn tunsden, Ana’ Yamamoto, francis
eee 2aNet Sith! bang, Neil Bellinger, allece Young, Ernestine Young, Joyce
Nisin, Lawence Reich, bavid Kelly, Ketko Kelly, Patricia Srown, Randy Yeager,
Susan Yeager, and Gali Kogiman

 

re Janes Sherman, Akiko Sherman, Jan Bellinger,
Garis, chin Le, aren Rosa, Elizabeth

 

 

 

 

 

  

 

3 RLUIPA provides in relevant part:

No governnent shal impose or inplenent a lend use regulation in
MenSot*Enae imposes a sebstantial burden on the religious exercise
eee coon, including @ religious assembly or institution, unless
the government demonstrates that imposition of the burden on that
persons seeenbly, oF institution
ia) "te ih fartherance of a compelling governmental
incerest; 2nd
(s) is the least restrictive means of furthering thet
Compelling governmental interest
(2) Scope of application
Hs Scbsection applies in any case in which ~-
a) the supstantiel burden is inposed in a program or
Sctivity thet receives Federal financial assistance,
iver if the burden results fzon a rule of general
(continued...)

 

  

 

 

 

 
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‘The three parties to the action, 4

 

» the City, the

 

Church, and the lessees, moved for summary judgment on the
complaint on various grounds. The circuit court ruled in favor
of the Church and against the City and lessees by finding that
because the Admiral Thomas is a “mixed-use” condominium project,
it does not qualify for conversion under ROH ch. 38 and that
there was an insufficient number of qualified applicant units to
acquire the fee. On the other hand, the circuit court ruled in
favor of the City and the lessees and against the Church by
finding that the City Council of the City and County of Honolulu
Aid not improperly delegate the power of eminent domain to the
Department of Community Services (DCS) and that RLUIPA is
inapplicable as a defense to conversion under ROH ch. 38.

As discussed more fully infra in section 11, the
lessees argue on appeal (1) that the circuit court impermissibly
legislated an exception to ROH ch. 38 by classifying the Admiral
Thomas as a “mixed-use” building rather than applying the plain
meaning of ROH ch. 38 to the defined 148 residential units

 

-continued)
Spplicabsrity:
(B) the substantial burden affects, or rexoval of that

Substantial burden would affect, commerce with foreign
ations, among the several States, or with Indian
txibes, even if the burden results from @ rule of
general applicability: or

(c) the substantial burden 2 imposed in the
implementation of a land use regulation or system of
Lana’ use regulations, under waich 2 government makes,
or nas in place formsl or informal procedure: oF
Practices that permit the government to make,
Undividuelized assessments of the proposed uses for
the property involved.

42 0.8.c. $ 2000ce(a) (2000).
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Located on the property and (2) that disqualifying three of the
lessee applicant units and subsequently determining that the
number of qualified applicant units fe11 below the twenty-five
necessary for condemnation was erroneous.

‘The City argues on cross-appeal that the inclusion of
the words “mixed-use” in the condominiun declaration for the
Admiral Thomas did not provide any legal basis to disqualify the
conversion of the Admiral Thomas units from leasehold to fee

simple under ROH ch. 38.

 

‘The Church argues on cross-appeal: (1) that the City
Council impermissibly delegated the power of eminent domain to
the DCS; (2) that RLUIPA is an applicable defense to the
condemnation of fee simple residential property owned by the
Church; and (3) that the affidavits of the Administrator of the
City’s Leasehold Conversion Progran, Sally Cravalho, which stated
that the lessees were qualified under ROH ch. 38 to participate
in the lease-to-fee conversion program, were hearsay and should
have been deemed inadmissible as evidence of the lessees’
qualifications, pursuant to Hawai'i Rules of Civil Procedure

(HRCP) Rule 56(e) .

 

4 wacp Rule $6(e) provides

Fore of Affidavits; Further Testinony; Defense Required. Supporting snd
Opposing affidavits shell be Rage on personal knowledge, shall set forth
Such facte a2 would be sdmissible in evidence, and shall show
Stfirmacivery that the efflant is competent co testizy to the matters
Stated therein. Sworn or certified copies of sll papers or parts
thereof referred to in an affidavit shall be attached thereto or served
therewith: “the court may permit affidavits to be supplenented or
Sppesed by depositions, answers to interrogatories, or further
GPridavitt. When a notion for summary judgment is nade and supported a9
provided in this rule, an averse party may not rest upon the mere
continued...)

 
 

FOR PUBLICATION *#4

‘This court has never had occasion to address (1)
whether ROH ch, 38 is inapplicable to religious institutions
owning land in fee simple, (2) whether a building’s designation
as “mixed-use” excludes it from condemnation pursuant to ROH ch.
38, or (3) whether RLUIPA is a valid defense to the application
of ROH ch. 38 to property owned by a religious institution.

For the reasons discussed more fully infra in section
III, we hold (1) that ROH ch. 38 does not provide an exception to
Lease-to-fee conversion of “mixed-use” buildings, (2) that RLUIPA
does not provide a defense to condemnation of the Admiral Thomas

condominium units owned in f

 

simple by the Church, (3) that the
City Council did not impermissibly delegate the power of eminent
domain to the DCS, (4) that there are genuine issues of material
fact as to whether the requisite number of applicant units exists
to acquize the fee pursuant to ROH ch. 38, and (5) that
cravalho's affidavits do not run afoul of HRCP Rule $6(e).
Accordingly, we affirm the cizcuit court's grant of
summary judgment in favor of the City and lessees and against the
Church, which found that RLUIPA is not available as a defense to
condemnation and that the City Council did not improperly
delegate the power of eminent domain. However, we reverse the
circuit court's ruling that ROH ch, 38 is inapplicable to the

Admiral Thomas condominium complex, inasmuch as there are no

 

“(.scontinved)
allegations or denials of the adverse party's pleading, but the advei
party's response, by affidavite or as otherwise provided in this rule,
ust set foren specific facts showing that there is a genuine issue for
Essar." re the adverse party does not 20 rebpond, sumeary Juasnent, 32
appropriate, shall be ente: the adverse party

 

 

 

    

   

     
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genuine issues of material fact as to whether the Admiral Thomas
4s a residential condominium property regime project created
under Hawai'i Revised Statutes (HRS) Chapter 514A, the
condominium Property Act. In addition, we vacate the circuit
court's denial of summary judgment based on its ruling that there
were not qualified applicant units for at least twenty-five units
and remand to the circuit court for further proceedings to
determine whether there are sufficient qualified units for
conversion to fee simple based upon, inter alia, the applicants’
qualifications as of the date that their respective applications
were filed with the City, and, if so, to hear evidence of the

fair market value of the leased fee interests being acquired.

1. BACKGROUND

on May @, 2003, the City filed a complaint in eminent
domain, pursuant to HRS § 101-13 (1993), in the circuit court of
the first circuit, seeking condemnation of the leased-fee
interests in the Admiral Thomas condominium complex. On June 10,
2003, the Church filed its answer to the City’s complaint, along
with a counterclaim and a denand for jury trial. The Church
alleged, inter alia, that the relief sought by the City in its
complaint was barred because application of ROH ch. 38 to the

 

 

RS § 101-13 provides An relevant part

Exercise of power by county, fhenever any county deens it
advisable or necestary to exercise the right of eminent domain in
the furtherance of any governmental power, the proceedings may be
Ineeltuted as provided in section 10:14 after the governing
authority (county council, oF other governing board in the case of
in independent bears having control of ite oxn funds) of the
County hae authorized such suit sy resolution duly passed, oF
Sdopted and approves, es the case may be.

 

 

8
 

FOR PUBLICATION ###
Admiral Thomas: (1) violated the due process, equal protection,
and property rights of the Church as protected by the fifth and
fourteenth anendnents to the United States Constitution and
article I, sections § and 20 of the Hawai'i Constitution; (2)
impernissibly burdened the Church's right to free exercise of
religion as protected by the first amendment to the United states
Constitution and article I, section 4 of the Hawai'i
constitution; (3) violated the Church's right to protection under
RLUIPA; and (4) was barred because the Admizal Thomas is not a
residential condominium property regime. On June 23, 2003, the
defendant-appellants/cross-appell.

 

2 lessees James M. Sherman st
al (hereinafter, “the lessees”) filed their answer to the City’s
complaint

on April 29, 2004, the lessees filed a motion for
partial summary judgment on the legal issue of public use and the
qualifications of the individual lessees to purchase the fee
Anterest in their units pursuant to ROH ch. 38. The lessees
contended that there were no genuine issues of material fact
regarding the public use for condemnation from lease to f
the qualification of thirty-two units in the Admiral Thomas and

 

that the sole issue remaining for trial was a determination of
the valuation of the fee simple interests in the units. On May
7, 2004, the City joined in the lessees’ motion for partial
sunmary judgment.

on May 14, 2004, the Church filed 2 motion for partial
summary judgment on the issue of improper delegation. On May 17,
2004, the Church filed a second motion for partial summary
4*4 POR PUBLICATION ***

judgment on the issue of the alleged non-applicability of ROH ch.
38 to the Admiral Thomas condominium complex. On Nay 27, 2004,
the church filed a menorandum in opposition to the lessees’
motion for partial summary judgment. In its memorandum in
opposition, the Church argued that Cravalho’s affidavits
constituted inadmissible hearsay and violated HRCP Rule 56(e)
because they included “conclusory facts and conclusions of law
[that] cannot be considered by the [c]ourt.”

on June 4, 2004, the circuit court, the Honorable
Victoria §. Marks presiding, conducted a hearing on all of the
foregoing motions. The circuit court orally expressed its
inclinations in ruling on the parties’ motions as follows:

THE COURT: I've read everything that’s been
submitted, not word for word when it cones to all the
Gxnibits, put everything else nes been . reviewed. 1
SILL tell you ny inclination in very succinct terms, and
then if you need to make farther srgurents, certainly you
cant]

lon the Defendant Lessees’ Motion for Summary Judgment,
tne [clourt’s inclination is t0 deny that motion. The
Opposition really raised four nain issues in terme of
Whether [Cravalho]’s afticavit fron the City was adequate,
F'think that it was [insofar as it] detailed what actions
tne [Clity's employee took, what facts she reviewed and what
Conclusions she nade. So chat piece of oppositicn was not
persuasive to the (ejourt.

‘On the seve of whether there were 25 qualified

 

 

 

a
seems to be
facts are re
whether you Just n
the [clourt'e view thet you need 25 gualifi
Continuous basis, otherwise 1 think the whole issue of
fublie use could’ be nullified. You could have a triggering
Rechanion with 30 people and i0 or 20 of them could drop out
Sieing the process, but if yoo just use the trigger as the
only thing, ? don't think that‘e ~~ that's a probles, but on
the’ facts there, whether you have 25 continuous applicants,
F'think there's disputed facts on that... point. And
aybe the parties could enlighten me whether the facts are
Tealiy disputed or not of whether you nave an egreenent

    
  

 

 

 

10
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on the Religious Land Use and Institutionalized
Persons Act, the [clourt’s view le that it does not spply,
that really’ you're addressing secular activities of the
church through the proposes condennat ion

‘on improper delegation, that really goes to one of the

Bad cn the [C)hurch's motion alleging improper
delegation to the Department of Conmuntey Services, the
[clourt's inclination is to deny that motion, especially in
Light of the Richardson and Goan decisions

Rad then the (cJhurch’s motion regarding non-
applicability of Chapter 58, the Court's inclination 1s to
Grant the notien

The declaration of horizontal property regime
indicates that the property regine wat s mixed uae project,
the bylaws even indicated mixed use project, mixed use
Condominium. Exhibit cto Exhibit 2 of the declaration of
horizontal property regine agein indicates mixed use
project, and I think that it ie very different than @
horizontal property regine that le for residential purposes
oniy. And the aroument that residential condominius’
have other uses Like a convenience store or restaurant oF
Whatever, that does not change the residential use a2
Opposes to, from the outset, s horizontal property schene
Tnsicating char the project itself is mixed use.

 

 

 

 

 

‘The parties subsequently argued their positions, The Church
contested Cravaiho’s affidavits as follows:

[CHURCH'S COUNSEL]: [7]hese applications are
submitted in the year 2000 and they'fe taken at face value
by (the DCS] for things that are five years out of date. I
een, we £:t9t questioned whether that is, in fact, what
fccurred or whether [tne 0C3] hed seen these earlier. ihe
jecond we question whether that’s sufficient at that point
fo form a basis to find somebody qualified.

Td Like to clarity one thing. We don't dispute that
Sally Clralvaiho did what she aid in terme of reviewing
applications and the other information and making the
decisions she made, but ‘

 

 

 

eta go to the truth of z
which 4. in this cafe, whether the lessees theaseives

actually Bee the Guslificstions. ‘That's a atter to which
they. «themselves have to ettest to. Ie" not enough

for [Cravalho] to say, well, I got a comunication from %
thet told se that ¥ lived in this unit for this certain
amount of time. We have multiple levels of hearsay thet T
think have to be addressed. Se we'ze not disputing her
statements about what she did, ve are disputing whether
that's sufficient to support the underlying facts.

 

(Emphasis added.)

un
 

+ FOR PUBLICATION ***

Regarding the requisite minium number qualifying

condominium units, the circuit court and the lessees’ counsel

engaged in the following colloquy:

(LESSEES" COUNSEL]: Your Honor, I would submit that
«swede have 27 [qualitying units) row and we 60 quality
ntth' that sininom number. 1 understang chat there is sone
Concern about the number ever cropping below (25) at any
Given point, and what we would submit is that when you
Jetiow the initial 28 who were designated, and you even
apply this nunber st the time that the condemnation wai
initiated, there were @ minimum of 25 (units] that did
Qualify. Me don't believe there is any genuine issue of
spores sact about the three [lessee-applicants} that are
Teised here based on positions in cur Brief.

‘THE COURT! [T]he facts regarding (lessee-epplicants)
Me. Bellinger, Ms. ChuncHoon, and... Mr. Luneden, based
On these facts, the (cjoure would Conclude thet those
Ghalviduale were not qualifies

TLESSebs" ‘couNsEL]; The three that we have raised a=
fer as\the original applicants thet would qualify in oor
View has [been] maintained throughost. The. (] tho that
Groped ovty Puotts and Powers, clearly don't apply. But

"Gur view is that there is no disputed issue... of

fect iy"that ot the tine the applications were submitted for
too of these three, at minimum the challenged persons, that
= sa ot Hf °

 

 

 

 

He Gober: . . . . Based on whet I have said, either
there's a material question of fact regarding Bellinger,
Chunskoon, Lunaden, ‘and so the motion would be denied, or if
{he facts are not disputed, then the (cJourt concludes that
Based on those facta, those three individuals were not
proper lessees for determining 25 [units], and based on
Phat, the nnber falls below 25, ond on that basis the
notion would be denied

(LESSEES" COUNSEL]: Again, we would submit that it's
not genuinely disputed». - based on the materials that we
have submitted showing the application dates and that these
persons did qualify at the date of their application. So
Sur... wiew is as a matter of law, viewing the
spplication requirements, they do quality.

THE COURT: And I'm looking at allvof the |.
Gates} apd all of the circumstances. If T go through that,
for caanple, . . . Mrs Sellinger acquired his Admiral Thones
Grit 1. October ist, [13]99, he applied or he completed
the application Mey 13th, (19198, he owned property at the
Royal folant at that time, that property was subsequently
Seld dune 15, (19199, and his application was actually »
fetually subaitted to the City Novenber let, 2000

 

 

 

 

‘fué COURT: And based on those facts, the [clourt
concludes that he was not a proper lessee for purposes of

12
(Emphasis

 

FOR PUBLICATION *#*

(RoW ch} 38
TEESSEES' COUNSEL): [S]o. . . our view that the

delivery, the {ling dete of the application, would not be

tthe applicable date for purposes of determining compliance?

 

‘WE COURT: I'm {J Looking at a totality of the
cizcunstances rather than... focusing on just one date,
nd under ‘these facts,» . the (eloure concludes that he’
ot a proper lessee under’ [ROH ch] 38

With... Ms. Chun-Hoon, [} she actually . . . dated
her application’... October 19th, 2000, that was’ submitted
to the City Novenber 1, 2000. At that time, she had an
interest in three pieces of property(s] Kaneohe Bay Drive,
Bleva Heights . . sy and vacant Land in Kahaiuu. She was
informed by the City that’... those interests in the
property disqualified her izom'being a proper lesses for
(ROH ch.] 38, She then conveyed her interest in these
Propert: her daughter through an irrevocable
Ehen reapplied on April 22, 2002. Ttinose facts
don't Belteve, are disputed, and based on the totality’ of
those facts, the (clourt concludes that she's not a proper
Tessee for {ROW che) 36 purpo

Next 5 Mr. iumsden. He
Aygust. 31st, 1995." He then inherited sinple
Property at 999 Wilder. That property was conveyed to him
In Septenber (19198, he sola it Novenber (19195, bis
application was submitted to the City Novenber ist, 2000.

 

 

 

 

 

          

 

      

 

Based on those facts, . . . the [cJourt concludes that he's
not a proper lessee for purposes of [ROH ch.l 38.
added.)

On June 21, 2004, the circuit court entered an order

denying the Church’s motion for partial summary judgment on the

issue of improper delegation, concluding that the City Council

did not improperly delegate the power of eminent domain to the

pes.

On June 30, 2004, the circuit court entered an order

granting the Church's second motion for partial sunmary judgment,

ruling ROH ch. 38 inapplicable to the Admiral Thomas. on July 8,

2004, the

circuit court entered an order granting in part and

denying in part the lessees’ motion for partial summary judgment.

‘The circuit court concluded (1) that RLUIPA was unavailable as 2

defense to the application of ROH ch. 38, (2) that there were not

13
‘444 FOR PUBLICATION

 

qualified original or properly-added applicants for at least 25
units continuously throughout the legal proceedings to convert
the leaseholds to fee simple, (3) that ROH ch. 38 was
inapplicable to the Admiral Thomas condominium project, and (4)
that the City Council did not improperly delegate the power of
eminent domain.

on July 9, 2004, the lessees filed a motion for
reconsideration and clarification of the circuit court's (1) June
30, 2004 order granting the Church's motion for partial summary
judgment and (2) July 8, 2004 order granting in part and denying
in part their motion for partial surmary judgment, or, in the
alternative, for HRCP Rule 54(b)‘ certification for immediate
appeal. On July 13, 2004, the City filed = partial joinder in
the lessees’ motion to clarify and reconsider.

on August 19, 2004, the circuit court conducted a
hearing on the lessees’ motion. The circuit court orally ruled
in relevant part as follows:

‘the motion’s denied. The (clourt’s looking at [KOH
cch.] 35 Je ite entirelely, not singling cut any one

 

© nce Rule 54(b) provides in relevant part:

Sudguent upon multiple clains or involving multiple parties.
When more than one claim for relief is presented in an action,
Whether se 2 claim, counterclain, cross-claim, or third-party
Nelny or when multiple parties are involved, the court may direct
the eneey of o finel jucment ae'to one or more Sut fewer than all
of the claims or parties only upon an express determination that
there is no Just feason for delay and upon an express direction
For tne entry of judgnent.. in the absence of such determination
and direction, any order or other form of decision, however
Seeignated, which agjucicates fewer than all the clains cr the
Fighta and Liabilities of fever chon all the parties shall not
terainate the action as to sny of the claims or parties, and the
Sroer oF other form of decision ia subject to revision at any tine
Before the entry of judgrent adjudicating all the claims and the
Fights and liabilities of all the parties.

 

 

4
‘+44 FOR PUBLICATION **

provision or another. And basically, is this a.
Fesidential condominium regine project or a mixed use

i?) And, clearly, bese on the ‘documents, it's
d use project.
Tn terme of the celoslating the minimn number of
qualified applicants, the (c}ourt agrees with the comments
hat [the Church's counsel] has mage and is following
[ilgueine Finance and Devel, Como, v. 1Takabukii, 62 Hawai's
172, 821 P-2a 92 11956),] in that you peed to maintain 3
minimum nuaber of applicants throughout.

 

   

itjne Rule $41 (bI] Certification is granted. There’s
just no reason for delay, and... the (elourt expressly
directs the entry of judgment.

on September 21, 2004, the circuit court entered an

   

order regarding the lessees’ motion for reconsideration, which
denied the motion to reconsider and clarify (1) the June 30, 2004
order granting the Church’s notion for summary judgment on the
issue of nonapplicability of ROH ch. 38 to the Admiral Thomas and
(2) the July 8, 2004 order granting in part and denying in part
the lessees’ motion for partial summary judgment. The order
granted the lessees’ request for certification pursuant to HRC
Rule 54(b) and directed the entry of final judgment as to the
June 30, 2004 and the July 6, 2004 orders. On the same day, the
circuit court entered judgment pursuant to HRCP Rule 54(b). Also
on Septenber 21, 2004, the circuit court entered a notice of
entry of judgment.

On October 14, 2004, the lessees filed a timely notice
of appeal. On October 21, 2004, the City filed a timely notice
of cross-appeal. On October 27, 2004, the Church filed a tinely

notice of cross-appeal.

45
‘FOR PUBLICATION ***

II. STANDARDS OF REVIEW
A. Motion For Summary Judanent

lie review the circuit court's grant or denial of
summary Jusgment ge novo. await Ce reser
Union 2. kena, 34 Sawai 213, 221, 11 P30 7, 8 (2000).
The standard for granting « notion for summary judgment is
settles:

 

(slunmary judgnent ss appropriate if the
pleacings, depositions, answers to interrogatories,
Sod admissions on file, together with the affidavits,
WPanys snow that there is no genuine issue as to any
haterial fact and thet the moving party is entitled te
Shdgeent ase matter of law, A fact is material if
foe! of that fact would nave the effect of

ential elements

 

 

 

  

partis Wvidence mist be viewed in the light
Bott favorable te the nen-moving party.” In other
Nerds, we must view all of the evidence and the
Unterences drawn therefrom in the Light most favorable
te the perty oppesing the motion.

Id, (citations and Internal quotation marks omitted).

Durette v, Aloha Plastic Recycling, Inc., 105 Hawai'i 490, 501,
100 P.3d 60, 71 (2004) (quoting Simmons v. Puu, 105 Hawai'i 112,
117-18, 94 P.3d 667, 672-73 (2004) (quoting Kahale v. City and
County of Honolulu, 104 Hawai'i 341, 344, 90 P.3d 233, 236 (2004)

 

(quoting SCI Management Corp, v, Sims, 101 Hawai'i 438, 445, 71
P.3d 389, 396 (2003)))).

B. Statutory Interpretation

e review the circuit court's inter
statute de nove. Scate v. achaca, 96 Hawai'i #3, 94, 26
piSa's92) 583 13001)+ Our statutory construction is guided
by estabiianed rule
When construing a statute, our forenost
obligation is to ascertain and give effect to the
Shtention of the legislature, which is to be obtained
prinarily from the language contained in the statute
Eteelé. And we mist read statutory language in the
Context of the entire statute ang construe it in 2
manner consiatent with Lts purp
‘when there is doubt, doubleness of meaning, or
indistinct iveners or uncertainty of an expression used
ina statute, an ambiguity exists...
In construing an ambiguous statute, “[t}he
meaning of the ambiguous words may be sought by
Cnamining the context, with which the ambiguous words,

 

 

 

16
‘4% FOR PUBLICATION +#*

phrases, and sentences may be compared, in order to
Escertain their true nesning.” sas § 1-15(1)
[(2993)]. Moreover, the courte may resort to
extringié aids in determining Legisletive intent, One
avenue is the use of legislative history as an
interpretive cool

This court may also consider “{t}he reason
rit of the law, and the cause which Induced the
core to enact it”. to discover ite tr
meaning.” HRS § 1=15(2) (1993)

 

    

     

 

   

Ade at 94°95, 26 F.3d at 585-88 (some citations ang internal
Gestation marks added and sone in original) (prackete in
Sriginal)

Coon vy, City and County of Honolulu, 98 Hawai" 233, 245, 47 P.3d

348, 360 (2002).
C. Constitutional Law
“We answer questions of constitutional law by
exercising our own independent judgment based on the facts of the
case... . Thus, we review questions of constitutional law
under the ‘right/wrong’ standard.” State v. Jenkins, 93 Hawai'i
87, 100, 997 P.2d 13, 26 (2000) (citations, some quotation

signals, and some ellipsis points omitted).

 

Le + aroun
a. The lessees’ arguments

The lessees argue that the circuit court “erroneously
legislated new law by finding that the [Admiral Thomas] was a
‘mixed use’ project and therefore not eligible to utilize the
benefits of [ROH ch.) 38” and that “[tJhis ruling created a new
exception for applicability of [ROH ch.) 38, even though 148
residential units undisputably existed on the property.” The
lessees further contend that ROH ch. 38 “does not limit its

v
#4 POR PUBLICATION ##4
applicability to a project due to other non-residential uses that
may exist on the same underlying fee simple lands.” (Emphasis in

original.) The lessees as:

 

rt that “nowhere in [ROH ch.] 38 does
it state that the existence of @ non-residential use on the
property shall disqualify the entire project and its otherwise
qualified residential units.” The lessees aver that the
declaration of the Admiral Thomas refers to the building as
vmixed use” as 2 descriptive term to identify the purposes of the
building. In this connection, the lessees argue, the term “mixed
use” has no legal meaning. Finally, the lessees maintain that
the Admiral Thomas was established with 148 residential units and
only one specifically non-residential unit, that which expressly
described certain new church facilities and an existing sanctuary
that were labeled as “Apartment Q.” As such, the lessees contend
that there is no “genuine dispute that [the Admiral Thonas] is
primarily a residential project” created under HRS Chapter S148
a.

 

as requized by ROH ch. 38
b. The City's araunents

The City Likewise argues that the circuit court erred
in ruling that the inclusion of the words “mixed use” in the
Admiral Thomas’s condominium declaration provided a basis upon
which to disqualify the residential leasehold units from lease
to-fee conversion under ROH ch. 38. The City contends that ROH
ch. 38's “applicability is not limited to condominium
developments with exclusively residential uses.” The City also
insists that the “mere fact that Admiral Thomas’ (s] condominium

documents include the words ‘nixed use’ is of absolutely no legal

18
‘#4 FOR PUBLICATION *)

 

significance.” The City avers that the Admiral Thomas qualifies
for lease-to-fee conversion pursuant to the plain language of ROH
ch. 38 and that ROH ch. 38, by ite express terms, applies to all
condominium property regine developments. The City further
argues that ROH ch. 38 “applies to Admiral Thonas because
pursuant to the ordinance’s two requirements for ‘developments’:
(2) it was created under HRS Chapter 514A and (2) it contains
condominium apartment units occupied under apartment leases or
condominium conveyance documents.”

‘The City submits that the Church's overliteral reading

 

of the term “residential” as meaning condominium property regim
that are exclusively residential “contradicts the legislative
intent behind ROH (ch.] 38 and leads to absurd results.” ‘The
City continues by suggesting that “any landowner would be free to
dodge lease-to-fee conversion by merely adding a single non-
residential use.” The City notes, in support of its position,
that ROH § 38-1.2 recognizes that non-residential units may exist
on the property, and the City posits that the “mere existence of
one of these non-residential uses clearly does not disqualify the
whole development” from condemnation. The City points to this
court’s language in Kay v. City and County of Honolulu, 104
Hawas's 468, 476 n.7, 92 P.3d 477, 485 n.7 (2004), which, in
addressing whether a property met the requirements of ROH § 36-
1.3, noted that “{a]1l parties agreed that the Property contains
residential apartment units.” The City alleges, based on the
foregoing, that this court “has already refuted [the Church's)

strained argument that the term ‘residential’ requires that every

19
#4 FOR PUBLICATION ###
single unit be residential.”

Finally, the City propounds that the circuit court
erred in legiglating and creating an exception for condemnation
of the Admiral Thomas because its declaration contains the words
“mixed use.” The City argues that “[t]his arbitrary distinction
improperly creates a new limitation not contemplated by the [City
Council]: that a condominiun development containing both
residential and non-residential units may qualify for lease-to-
fee conversion, but not if the words ‘mixed use’ happen to appear
in the condominium documents." The City insists that the circuit
court “overstepped its judicial role” by “improperly cresting an
additional requirement to the conversion process not contemplated
by the City Councill.)”

c. The Church’s arouments

‘The Church responds by arguing that ROH ch. 38 does not
apply to the Admiral Thomas because it is a “nixed use,” and not
a residential, project. The Church focuses on a detailed
explanation that ROH ch. 38 applies only to residential
condominium regimes. The Church stresses that ROH § 38-1.3,
which pertains to “Applicability,” indicates that the entirety of
ROH ch, 38 is intended to apply only to residential condominium
property regimes because it includes the word “residential” in
ite purview. The Church counters that the City ignores the more
general application of ROH § 38-1.3 in favor of the more specific
ROH § 38-2.1, which delineates the applicability of only Article
2 to “condominium property regimes.” The Church argues that,

pursuant to Inge Water Use Permit Applications, 94 Hawai'i 97,

20
‘#4 FOR PUBLICATION *#*
151, 9 P.3d 408, 463 (2000), “{w]here [the legislature] includes
particular language in one section of a statute but omits it in

another section of the

 

me Act, it is generally presumed that
ly in the

 

[the legislature) acts intentionally and purpo:
disparate inclusion or exclusion.” (Citations omitted).
Furthermore, the Church maintains that the City “does not take
into account that the definition it relies upon is 2 subsidiary
one (under Article 2), and that the scope of the ordinance is
still controlled by the definition of applicability for the
chapter" found in ROH § 38-1.3. (Emphasis in original.)

‘The Church responds to the City’s relance on Kau for
the proposition that not all units in a condominium property
regine need be residential by observing that the condominium
project in Kay wae a purely residential building. The Church
points out that one-half of its fee land is devoted to non-
residential purposes and argues that “[t)here is nothing in
Chapter 3@ that would support condemning portions of a mixed-use
project, a major portion of which is devoted to religious
purposes.”

In support of its argument that the Adniral Thomas is
not @ residential condominium project, the Church notes that the
Church itself pre-existed the creation of the condominium regine
and that it created a residential project “in order to
financially support the activities of [the] Church.” The Church
contends that it is “disingenuous” for the City to argue that the
Admiral Thonas is not a mixed use project with a substantial

religious use component. The Church urges that the use of the

2
‘4s FOR PUBLICATION ***
property for religious purposes is not “simply an incidental use
such as a snack shop or restaurant in the first floor of (a)
high-rise condominium project.”

2. Bnalvsis of ROH ch, 38

‘This court has stated that

folur statutcry construction ig guided by established

 

linen construing a statute, cur forenost
obligation is to ascertain end give effect to the
Shtestion ef the legislature, which is to be obteined
prissriiy from the language contained in the statute
Feself. And we muse read statutory language in the
Context of the entire statute and construe it in
Banner consistent with Les purpose.

‘hen there is doubt, doublencss of mesning, or
indistinetiveness or uncertainty of an expression used
thie statute, an ambiguity exists.

Goon, 98 Hawal's at 245, 47 P.3d at 360. Moreover, “legislative

 

      

enactments are presumptively valid and ‘should be interpreted [in
such a manner as] to give them effect.” Richardson v, City and
County of Honolulu, 76 Hawai'i 46, $5, 868 P.2d 1193, 1202 (1994)
(quoting State v. Spencer, 68 Haw. 622, 624, 725 P.2d 799, 800
(1986) (citation omitted).

‘Three articles in ROH ch. 38 are applicable to the
present matter: Article 1, entitled “General Provisions”;
Article 2, entitled “Condemnation of Condominium Development
Leaseholds"; and Article 5, entitled “Eminent Domain.”

Article 1, § 38-1,3 provides that (ROH ch.) 38 applies
to “all lends|]' in the City and County of Honolulu on wnich
Gre situated |) residential condosinius property regime
Projects created under HRS Chapter 514A. .

Article 2; § 36-2.1 provides that  (Condoninivn
property regine| condemnation applies to developments that
bt the eine of acquisition by the City, are developed into!
[condominium property regimes] or “occupied by residential
lessees under leases of condominium conveyance documents
executed before the effective date of this chapter... .”

‘Reticle 5, $385.1 provides that eminent domain
applies to “developments which are crested by condoniniun

 

 

 

 

2
‘#4 FOR PUBLICATION +++
property regimes under HRS Chapter SIMA...
Kau, 104 Hawai'i at 476, 92 P.3d at 485 (footnotes omitted) .

‘The Church attempts to extricate itself from the
purview of ROH ch. 38 by insisting that the chapter applies only
to purely residential condominium property regimes and that the
Adniral Thomas is not such a regime. The Church seemingly argues
that because its use of “Apartment Q" is religious in nature, the
Admiral Thomas as 2 whole is exempt from condemnation. Pursuant
to the plain language of ROH ch. 38, the Church is mistaken.

The Church’s entire argument is based on the assumption
that the Admiral Thomas is not residential. In furtherance of
its argument, the Church would have this court look exclusively
to the language of ROH § 38-1.3, which pertains to “residential

condominium property regime projects,”

and ignore the language of
ROH § 38-2.1, which applies to “developments . . . [developed
into condominium property regimes,” including developments
“occupied by residential lessees under leases executed before the
effective date of [ROH ch. 38).” The Church appears to consider
the fact that the Admiral Thomas has been deemed a “nixed use
project" as sufficient to establish that it is thereby not
“residential.”

Pursuant to the Adniral Thomas’s declaration, in 1978,
the “Lessor and Developer . . . submit (ted) their interests in
and to the Land and the Project to a Horizontal Property Regime
established by [HRS] Chapter 514A." “While Act 180, 1961 Session
Laws of Hawai'i (Haw. Sess. L.), as amended, originally referred

to condominiums as ‘horizontal property regimes,’ in 1988 the

23
‘** POR PUBLICATION ¥#*

legislature changed the language to ‘condominium property
regimes’ (CPR). 1988 Haw. Sess. L. Act 65 § 2.” Kau, 104
Hawai'd at 471 n.3, 92 P.3d at 481 n.3, Condominium means

together with an appurtenant
Gndivided interest in common elements, located on land
Gubject to a declaration of condominium property regime as
Gefines by HRS Chapter SLA, together with an appurtenant
Ondivided interest in common elements, both used. or
Fa a er ence
stale family
ROH § 38-1.2 (emphases added). The Admiral Thomas declaration

 

 

designates 2 “Residential Tower” consisting of one hundred forty-
eight apartments.” ROH § 38-1.2 provides that “*{c]ondoniniun
property regime’ means a condominium property regime project
established under HRS Chapter 514A.” ROH § 38-2.2 provides in

relevant part that,

 

[slubject to subsection (b) of this section, the denartnent

nate Rat portion af = at

 

 

SSEHIESte the acquisition of the applicable leased
interests in chat land by the city through the exercise of
the'power of eminent domain or by purchase under the thre
of eminent dessin :

 

©

 

(Emphases added). ROH § 38-2.2's allowance for the condemnation
of “that portion of a development containing residential
condominium land” refutes the Church's argument that a project
must be purely residential to be condemned under ROH ch. 38.
‘The applicability of ROH ch. 38 to the Admiral Thomas
depends primarily on its qualification as a residential project
and on the chapter's express disqualification of certain units

from conversion. Based on the foregoing, the Admiral Thomas is

24
 

FOR PUBLICATION *##
properly classified as “residential,” inasmuch as (1) it was
established under HRS Chapter 514A, (2) it is a condominium

property regime, and (3) condominiums are residential units.

 

‘The Church's attempt to argue that the Admiral Thomas
is not subject to condemnation because it is designated as 2
“mixed use” building in the declaration is disingenuous.
Although this court has not yet had occasion specifically to
address the condemnation of “mixed use” buildings, we agree with
the lessees and the City that the term “mixed use” is an
adjective that has no legal significance as it pertains to the
Admiral Thomas’s declaration of horizontal property regime. The
term “mixed use” appears to be nothing more than a descriptor
that seeks to define the purpose, or multiple purposes, of
certain property. See Alford v. City and County of Honolulu, 109
Hawai'i 14, 122 P.3d 809 (2005) (“Phe Waikiki Shoreline is a
fifteen-floor, mixed-use, multi-family dwelling structure located
on Waikiki Beach, Presently, the top fourteen floors are
residential apartments and the botton floor is commercial
space."); Waters v, Cook, 2005 WL 2864806 (Mass. Land Ct. Nov. 2,
2005) ("86 Spring Street is a mixed use building, with its ground

floor rented by Julio’s Café . . . and its second and third
floors divided into apartments.”); L.A. Unified Sch. Dist. v.
2434 So. Grand Ave., LLC, 2005 WL 2722888 (Cal. Ct. App. Oct. 24,

2005) ("South Grand’s intended use for the building was 2 ‘mixed
use,’ including retailing, apparel manufacturing, and ‘some sort

of” communications.”)

25
 

+48 FOR PUBLICATION

3. Conclusion
ROH ch. 36 applies to “residential condominium property
regimes” “within the City and County of Honolulu” created “under
HRS Chapter 514A.” Notwithstanding the Church's contentions to
the contrary, the Admiral Thonas qualifies as a “residential
condominium property regime” “within the City and County of
Honolulu” that was created “under HRS Chapter S14A.” Inasmuch as
there is no “doubt, doubleness of meaning, or indistinctiveness
or uncertainty of an expression used in (this) statute,” Coon, 98
Hawas't at 245, 47 P.3d at 360, no ambiguity exists, Therefore,
we hold (1) that ROH ch. 38 does not provide an exception to the
condemnation of the Admiral Thomas by virtue of the self-
designation as a “nixed use” project contained in its declaration
and (2) that the circuit court erred in concluding that ROH ch.
38 was inapplicable to the Admiral Thomas. Accordingly, we
reverse the circuit court’s June 30, 2004 order ruling that ROH

ch. 38 is inapplicable to the Admiral Thomas

B. The Re: re. 4
Ig Nota Vi et
Qf The Church's Fee Simple Interest In The Admiral
‘Thomas.

‘The Church argues that the circuit court erred in
concluding that RLUIPA does not confer a defense to the
condemnation of the Admiral Thomas, ‘The Church contends that
there were genuine issues of material fact as to whether the
lease-to-fee conversion of Admiral Thomas apartments would

violate RLUIPA, The Church avers that the lessees and the City

26
‘#8 FOR PUBLICATION *#*
ignored the principal case on point in the matter, Cottonwood
Christian Ctr, v, Cypress Redevelopment Agency, 218 F. Supp. 2d
1203 (C.D. Cal. 2001), and alleges that Cottonwood “held that 2
condemnation action is a ‘land use regulation’ subject to
RLUIPA.” The Church maintains that Cottonwood “pointed to the
municipality's zoning system that allowed condemnation in
‘blighted’ areas” and that, in the present matter, “the City
similarly provides a condemnation right to lessees on multi-
family residential land as opposed to leasehold lands zoned or
developed for other purposes such as industrial, commercial or
agricultural use.”

‘The Church also directs this court to the website
http://www. becketfund.org/index.php/case/98.html to view the
February 15, 2005 complaint in Living Faith Ministries v. Camden
County Improvement Auth., allegedly filed in the United States

District Court for the District of New Jersey. The Church clains
that the Living Faith suit is similar to Cottonwood because it
“alleges that a municipal agency is violating RLUIPA by
attempting to condemn a church's property so that luxury condos
can be constructed on the property.”

The Church insists that “a government entity's actions
must be strictly scrutinized where it involves a ‘land use
regulation or system of regulations, under which a government
makes, of has in place formal or informal procedures or practices
that permit the government to make, individualized assessments.’”
(Quoting 42 0.8.C. § 2000cc(a) (2) (C)). The Church argues that

“fundamental rights” are involved in the present matter,

27
‘8% FOR PUBLICATION ###
requiring that ROH ch. 38 be “analyzed under the ‘strict
scrutiny’ test.”

The Church cites a number of cases that were decided
under the first amendment and argues that “RLUIPA establishes the
same standard.” As such, the Church apparently contends that the
condemnation of units in the Admiral Thomas would violate its
first amendment right to religious free exercise, and that, by
extension, RLUIPA operates as a shield against such condemnation.
In support of its contention, the Church cites Keeler v, Mavor
and City Council of Cumberland, 940 F. Supp. 879 (D. Md. 1996),
and construes it as holding “that a regulatory taking of a
church’s property” “substantially burdened religious free
exercise and was not justified by a compelling governmental
interest.” The Church observes that the United States Court of
Appeals for the Second Circuit, in Yonkers Racing Corp, v. city
of Yonkers, 858 F. 2d 855, 872 (2d Cir. 1988), agreed that “it is
well settled that a limitation by the government on the fr

 

exercise of religion is permitted only when the state can
demonstrate that @ compelling interest justifies the restriction
and that no alternate means of accomplishing the state's
compelling interest are available.” The Church also seeks
support from Order of Friars Minor v. Denver Urban Renewal Auth.,
527 P.2d 804, 805 (Colo. 1974) (only . . . upon finding that
there is a substantial public interest involved{,] which cannot
be accomplished ‘through any other reasonable means,’ can the
court proceed with the condemnation of the property.") and from
26 Am. Jur. 2d Eminent Domain § 130 ("where the property belongs

28
#4 FOR PUBLICATION +4

to a religious organization and it is e:

 

ntial to its activities
or is unique and of a special religious significance,
condemnation has been considered as an interference with the free
exercise of religion as protected by the First Amendment.").

‘The Church argues that the condemnation of leasehold
units in the Admiral Thomas “would substantially burden the
ability of [the] Church to carry on its religious activities.”

It notes that upon termination of the residential leaseholds, the
units would revert to the Church, thereby enabling it to
determine whether to use the property for religious purposes.
‘The Church complains that condemnation will “deprive” it of ite
“future ability to use the property,” inasmuch as there is “no
present ability . . . to expand or redesign its sanctuary and
administrative building.” The Church further fears that
“continued application of this law will eventually work to force
[it] out of its property entirely." Finally, the Church requests
“the opportunity to prove at trial that the City’s actions have
violated RLUIPA,” arguing that it is especially important “in a
case of first impression.”

b. The City's arguments

‘The City argues that @ “party challenging a government
regulation under RLUIPA must prove that the regulation
“substantially burdens its exercise of religion” and that RLUIPA
is not implicated in the present matter because the Church's
exercise of religion is unaffected. The City maintains that
leasehold conversion will only affect portions of the Church's

Property already committed to non-religious activities, to wit,

29
‘4% FOR PUBLICATION *##
residential condominium apartments. Furthermore, the City
contends that “RLUIPA limits the power of governments to enact or
implement land use reculations to exclude the use of property for
religious purposes,” (emphasis in original), and that ROH ch. 38
as applied is not 2 “land use regulation.”

‘The City cites Omnipoint Communications, Inc. v. City
of White Plains, 202 F.R.D. 402 (S.D.N.¥. 2001), in support of
ite argument that “RLUIPA was enacted to prevent discriminatory
treatment of religious entities in the enactment and
” mnipoint stated that

ed because Congress found that churches were

Amplementation of land use regulation

  

RLUIPA “was pai

‘frequently discriminated against’ where zoning codes ‘frequently

 

exclude churches in places where they permit theaters, meeting
halle, and other places where large groups of people assemble for
secular purposes."" 202 F.R.D. at 403.

‘The City argues that its application of ROW ch. 38 to
the Admiral Thomas

   

clearly does not violate RLUIPA because[:) (2) ROM (ch.1 38
Conversion does not constitute a "land use regulation” and
therefore is rot subject to RLUIPA; (2) collecting leasehold
rent. from lessees in a residential condoniniun building does
fot constitute a “religious exercise”; and (3) no
Bubstantial burden on religious exercise existe as SOM (ch)
3e does not prevent. (the Church}’s continued use of its
Property as a church,

(2) The City’s argument that ROH ch. 38 is
nota land use regulation

‘The City argues that RLUIPA “expressly limits its

 

  

 

application to land use regulations” in accordance with 42 U.S.C.

§ 2000cc(a) (1), which states that “{n]o government shall impose

 

or implement a land use regulation in a manner that imposes a

substantial burden on religious exercise of a person, including a

30
#4 FOR PUBLICATION

 

religious assembly or institution.” Quoting 42 U.S.C. §
2000ce-5(5), the City notes that the “statute narrowly defines
Mand use regulation’ as either a zoning or landnarking law” as
follows:

‘The term “land use regulation” means a zoning or landnarking
itu, or the application of sucha law, that limits or
restricts a claimant’s use or Gevelopment of land (including
a structure affixed to land), if the clainant has an
Gwersnip, leasehold, easenent, servitude, of other property
interest. in the regulated land or a contract or option to
acquire such an interest.

   

Based on the foregoing, the City argues that it is “impossible to
construe ROH [ch.] 38 as a zoning or landmarking law, as it has
nothing to do with ‘legislative division of a region’ or ‘a
historically significant building or site,” the terns’
respective common definitions. (Quoting Black’s Law Dictionary
(7th ed. 1999) .)
‘The City declares the Church's reliance on
Cottonwood “irrelevant” to the present matter because “the
property interests that are to be condeaned pursuant to ROH [ch.]
38 [are] not religious.” Accordingly, the City argues, RLUIPA is
inapplicable to the condemnation proceedings against residential
condominium units in the Admiral Thomas.
(2) The City's argument that collecting
easehold rent does not constitute
£ a
‘The City asserts that the legislative history of RLUIPA
“clearly establishes that government regulations affecting a
church's ability to collect rent place no burden on religious
exercise.” (Emphasis in original.) The City emphasizes that

such legislative history indicates that “the rule excluding

31
‘8 FOR PUBLICATION ***

commercial activity from ‘religious exercise’ applies with equal

force where the religious and secular activiti

 

take place on
different parts of the same property.” In the present matter,
according to the City, ROH ch. 38 “lease-to-fee conversion would
only affect portions of the property that [the Church] has
committed to non-religious activities, iie., residential
condominium apartments.” Furthermore, the City contends that the
“fact that lease rents may be used to support religious
activities does not convert this secular activity into a

religious exercise” and that any interpretation to the contrary

 

jould allow religious entities to engage in all manner of
commercial activities and claim protection for religious

exercise.

a s aroument that
Dot require individualized assessments

The City argues that the scope of RLUIPA is narrowly
directed at three expressly defined means by which a substantial
burden is imposed on religious exercise, only one of which

applies to the present matter and requires the government to make
“individualized assessments of the proposed uses for the property

involved.” (Quoting 42 U.S.C. § 2000cc(a) (2) (C).) As such, the

 

City argues, RLUIPA does not assist the Church because ROH ch. 38
does not permit such individualized assessments. The City
maintains that ROH ch. 38 contains no mechanism for official
discretion with regard to who is petitioning or in which building
the relevant leasehold units are located. Citing ROH § 38
2.2(a) (1), the City notes that “[t]he criteria evaluated to
determine if the City may designate all or a portion of a

32
 

FOR PUBLICATION #1

 

development for acquisition include a determination of whether

there is a sufficient number of less

 

applying for conversion.”
cwhether the lessee qualifies to purchase is an equally objective
determination, as defined by the statute, and does not lend
itself to individualized assessments,” thus making ROH ch. 38 “a
law of general applicability” and RLUIPA inapplicable, according
to the city.
(4) The City’s argument that ROH ch. 38 does
Church's relisious activities

Furthermore, the City avers, the Church is unable to
demonstrate that lease-to-fee conversion of Adniral Thomas’ s
residential condominium units would impose a “substantial burden"
on the Church's religious exercise, which is required to
establish a violation of RLUIPA. The City again cites to the
legislative history underlying RLUIPA for the proposition that
the application of ROH ch. 38 to the Admiral Thomas does not
impose @ substantial burden on religious exercise, noting that “a
burden on a commercial building, which is connected to religious
exercise prinarily by the fact that proceeds from the building’ s
operation would be used to support religious exercise, is not a
substantial burden on ‘religious exercise.’ (Quoting 146 Cong.
Rec. $7776 (daily ed. July 27, 2000) (joint statement of Sens.
Hatch and Kennedy).) Inasmuch as only the Church’s ability to
collect lease rent would be affected by conversion under ROH ch.
38, the City asserts that the Church's exercise of religion is
not substantially burdened.

33
s+ FOR PUBLICATION *#*
c. The lessees’ arcuments

Similar to the City, the lessees argue that RLUIPA is a
zoning act and that it does not apply to the facts of the present
condemnation suit. They claim that the Church is seeking special
treatment and an exemption from the purview of ROH ch. 38.

The lessees argue that RLUIPA is “aimed at prohibiting
local government from using its zoning powers to substantially
impair the right of churches to carry on religious activities”
and that it does not “apply to generalized condominium
condemnation regulations that are applied equally to all
condominium projects.” (Emphasis in original.)

Moreover, the lessees maintain, the condemnation of leasehold
units in the Admiral Thomas “does not infringe in any manner, let
alone ‘substantially,’ on the ability of the Church to carry on
its religious activities.”

2. Analysis A and xe "

Congress enacted RLUIPA in 2000 in response to the
United States Supreme Court’s decision in City of Boerne v.
Flores, 521 U.S. $07 (1997), which held that the Religious
Freedom Restoration Act of 1993 (RFRA), 42 U.S.C. § 2000bb st
Seq., exceeded the scope of Congress’s enforcement powers under
section 5 of the fourteenth amendment to the United states
Constitution. Congress sought to define the scope and extent of
the first amendment’s Free Exercise Clause through RLUIPA, which
prescribes a strict scrutiny standard of review in land use
cases. In particular, as noted supra at note 3, RLUIPA prohibits

governments from imposing or implementing

34
‘** FOR PUBLICATION *#*

4 land use regulation in a manner that inposes # substantial
Durden on the religious exercise of 2 person, inciuaing a
Feligious assenbly or institution, unless the government
Genonstrates that’ isposition of the burden on that person,
aecenbly, oF institution =~
(Ai {5 in furtherance of 2 compelling governmental
interest; ang
(Bj ia the least restrictive means of furthering that
Compelling governmental interest

42 U.S.C. § 2000cc(a) (1).”

“Congress enacted RFRA in direct response to the
[supreme] Court's decision in Employment Div, Dept, of Human
Res{.l of Orf.l v, Smith, 494 0.5. 872. . . (1990).” City of
Boerne, 521 U.S. at 512. As the Supreme Court elucidated in City

of Boerne, the Smith Court

considered 2 Free Exercise Clause claim Brought by menbers
of the Native American Church who were denied unemployment
Benefits when they lost their jcbs because they had used
peyote. Their practice was to ingest peyote for sacramental
Purposes, and they challenged an Oregon statute of general
Sppiieabiaity wnich made use of the drug criminal. “in
evaluating the claim, we declined to apply the balancing
test set forth in Sherbert e. Verner, 374 U.S. 398.
(1963), under which we ould have asked whetner Oregon's
prohibition substantially burdened s religious practice and,
If it did, whether the burden wes justified by 8 compelling
Government interest. Me stated:
“[The] governaent’s sbility to enforce generally
applicable prohibitions of socially hermful conduct
Gannot depend on measuring the effects of 5
Governmental action on a religious objector’ =
Spiritual development. To make an individual’ s
Gbligation to obey such a law contingent upon the
law's coincidence with his religious beliefs, except
here the State's interest is ‘compelling’ .
Contradicts both constitutional tradition and’ common
sense.” 49¢°0.5.[} at 685» . (internal quotation

 

 

 

 

 

 

‘The lessees impliedly challenge the constitutionality of RLUIPA in
thetr answering brief, nut do not reise it a2 9 point of error on appeal.
Therefore, we do not address the constitutionality of RLUIPA. In any event,
inasmuch as" we ultimately hold that the circuit court did not err in
Conciusing that ALUIPA was unavailable as s defense in the present matter, we
Would refrain from addressing the question of ALUIPA’s constitutionality.” gee
Lyna_v. NW Indian Cenetery Protective Ass'n, 485 U.S. 439,445 (1986) (A
fundamental and iongstanding principle of Judicial restraint requires that
courts avoid reaching conststutional questions in advance of the necessity of
Seciding them.")

 

35
 

+ FOR PUBLICATION

 

marks and citations onitted).
‘tne application of the shezsert test, the Saith decision
explained, would have prodsced an anonaly in the law, =
Constitutional right to ignore neutral laws of general
Gpplicability, The anomaly would have been accentuated, the
Court reasoned, by the difficulty of determining whether a
particular practice wee central to an individual's religion.
Re‘explained, moreover, that it "is not within the judicial
ken to question the cestrality of particuler beliefs or
practices to a faith, of the validity of particular
[ieigantes interpretations of those creeds.” 434 U.S.) at
fe7 s,s [internal quotation marks and citatien omitted)

City of Boeme, 521 U.S. at 512-13.
In July 2000, Senators Orrin Hatch (R-Utah) and Edward

 

 

Kennedy (D-Hass.) introduced RLUIPA in the Senate and, upon
gaining bipartisan support, the statute passed unanimously in
both houses Congress and was signed by President Clinton on
September 22, 2000.

‘The jurLedictional underpinning for RLUIPA is distinct from
RERA, Firat, RLOIEA only covers state action aimed at land
se decisions and persone in jails or mental facilities. 42
Urg.e, $8 2000ce [to] 2000ce~1. Second, “application of
RIDIPA is linited to cases that affect federally financed
programa, interstate and foreign cosmerce, oF cases where
Ene land’ use decisions are part of a systen of
Nindividualizes assessments.” (d,) § 2000cc(a) (2). By
Limiting ALUIFA in this way, Congress has acted prinarily
pursuant to ite power under the spending and Commerce
Elnuses, U.S. const, arts I, $8 cla. 1, 3. Only
splication of RLDIPA to “land use regulation[s] ox
System{s] of land ase regulations, under which a government
Rates, or has in place formal or inforsal procedures or
Practices that permit the government to make, individualized
Sessnonts” cones under the rubric of Congress's authority
Seder che Enforcenent Clause of the Fourteenth Anencnent.
42 U.S.C, § 2000ce(a) (2) (C)» To the extent that RLUIPA is
Ehacted under the Enforcenent Clause, it merely cedifies
humerous precedents holding that systess of individualized
Gssessmeres, 89 opposed to generally epplicable laws, are
Sebject to strict scrutiny.

Cottonwood, 218 F. Supp. 2d at 1220-21.

   

 

 

 

As a preliminary matter, we note that the
interpretation of RLUIPA as applied to ROH ch. 38 is a question
of first impression in this court. More broadly, this court has

36
+44 FOR PUBLICATION +1

 

never had occasion to address the provisions of RLUIPA in any
context.

RLUIPA, by its terms, prohibits a governments’
imposition or implementation of “a land use regulation in a
manner that imposes a substantial burden on the religious
exercise of a person, including 2 religious assembly or
42 0.8.C. § 2000ec(a) (1) -

 

institution.
RLUIPA defines a “land use regulation” as

a zoning of landnarking lav, or the application of such @
Jom, that limite or restricts = claimant's use or
development of land (including a structure affixed to land),
UP the claimant has an ownership, leasehold, easement,
servitude, or other property interest in the regulated land
Sra contact or option to acquire such an interest.

 

   

 

Id. § 2000ce-5(5). Under this definition, a government agency
implements a “land use regulation” only when it acts pursuant to
a “zoning or landmarking law” that limits the manner in which @
clainant may develop or use property in which the claimant has an
interest. Nevertheless, RLUIPA “does not provide religious
institutions with immunity from land use regulation, nor does it
relieve religious institutions from applying for variances,
special permits or exceptions, hardship approval, or other relief
provisions in land use regulations, where available without
discrimination or unfair delay.” 146 Cong. Rec. at $7776 (daily
ed. suly 27, 2000) (Joint statenent of Sens. Hatch and Kennedy)
(hereinafter, “Joint Statement”).

Thus, as a threshold matter, “[t]he applicability of

RLUIPA in the present matter . . . turns on whether the City
acted pursuant to a zoning or landmarking law,” Prater v, City of

Burnside, 289 F. 3d 417, 434 (6th Cir, 2002), when it sought to

37
#4 POR PUBLICATION #1

 

condenn certain units of the Admiral Thomas pursuant to ROK ch.
38.

A “landmark” is defined as “[a] feature of the Land,
monument, marker, of other erection set up on the boundary line
of two adjoining estates” or as 2 “[b]uilding or site having
historical significance.” Black's Law Dictionary 879 (6th ed
1990). The definition further notes thet “[t]he removing of a
landmark is a wrong for which an action lies.” Id. “Zoning” is
defined as “[t]he division of a city or town by legislative
regulation inte districts and the prescription and application in
each district of regulations having to do with structural and
architectural designs of buildings and of regulations prescribing
use to which buildings within designated districts may be put.”
Id, at 1618. “zoning” is also the “[dlivision of land into
zones, and within those zones, regulation of both the nature of
land usage and the physical dimensions of uses including height
setbacks and minimun area.” Id, Therefore, a “zoning or
landnarking law” as defined by RLUIPA must pertain either (1) to

the division of a city into districts and the

 

ulation of the
land usage within those districts or (2) to a monument, marker,
or building having historical significance. ROW § 38-1.1
establishes “the right of any person, who is = lessee under any
long-term lease of land upon which is situated . . . residential
condominium property regime projects created under HRS Chapter
SIA. . . to purchase at a fair and reasonable price the fee
simple title to such land.” On its face, therefore, ROH ch. 38

is not concerned with either zoning or landmarking.

38
44* FOR PUBLICATION **
In Prater, the fact that the city had already acquired
fan interest in the property at issue gave it the right to choose
the property's fate and was “thus not based upon any zoning or
landmarking law restricting development or use of the Church's
own private property.” 289 F. 3d at 434. As such, the United
States Court of Appeals for the Sixth Circuit held that no
jurisdictional basis existed for the church's RLUIPA claim. 14,

 

‘The United States District Court for the Northern
District of Illinois recently held that Chicago's proposed
expansion of O'Hare airport did not implicate RLUIPA because,
inter alia, the city’s authority to acquire the land did not stem
for a zoning regulation or landmarking law. St, John’s United
Church of Christ v. City of Chicago, 401 F. Supp. 2d 887, 899
(i.D. TLL. 2008).
RLUIPA only applies to government actions that “impose or
implement a land use regulation in a manner that imposes a
Substantial burden on the religious exercise of a person.”
42.0.5.c. § 2000ec. The term "land use regulation” is

Getined ae "a soning or lendnarking lav, oF the application
of such a Law, that Linste or restvicts claimant's use oF

Sevelopnent of land ss -" «2 U-8.C. § 2000ce-5(5). Zn.
nig case the Cll nent aonsin
‘stens from any cchina requlations or lendnarking law,

 

(emphasis added) .
In Faith Temple Church v, Town of Brighton, --- F.
Supp. 2d ---, 2005 WL 3454309 (W.D.N.Y. Dec. 19, 2005), the

 

 

United States District Court for the Western District of New York
held that a town's eminent domain proceedings did not constitute
a “land use regulations” for purposes of RLUIPA.

Faith Tesple doss not appear to contend... that the

Town’ # condemnation of the Groos parcel would involve a
NYShdnarking law." Landnarking laws generally involve the

38
88 FOR PUBLICATION ###

 

“regulat (ion) and restrict {ion of} certain areas as nations)
nistoric landmarks, special historic sites, places and
buildings for the purpose of conservation, ‘protection,
enhancement and perpetuation of these places of natural
heritage." Nothing of that nature is involved here.

‘Phe eminent donain proceedings here also do not amount
to. “honing law" or “the application sf euch 2 lau.”

 

 

Guien these differences between zoning and eminent
domain, it seens very unlikely that Congress assumed that
Courts would interpret RLUIPA’s reference to zoning laws as
Sneluding eminent domain proceedings as well. The simzie
fact is that Congress chose to Limit the application of
RLUIPA to cases involving "a toning or lananarking 1a, or
the application of auch a lay, thot Linite or restricts 0
Claimant's use or development of land...

Eonapicuouely absent is any mention of eminent domain.
Eninent domain ie hardly an arcane oF Lietle-knawn concept,
and the Cosrt will not assume that Congress simply
Overlooked it when drafting RLUIPA.

Ida at *3-4 (citation omitted).

 

 

 

In the only case to challenge Hawaii's land use laws
and claim RLUIPA as a bar to their enforcement, Hale O Kaula
Church v. Maui Planning Comm'n, 229 F. Supp. 2d 1056 (D. Haw.
2002), the United States District Court for the District of
Hawai'i held, inter alia, that Hawai'i statutes governing special
use permits were facially valid “land use regulations” in the
context of RLUIPA. The plaintiffs argued that the county's
denial of a special use permit to expand their facility and hold
religious services along with Hawaii's land use law violated the
“equal terms” and “nondiscrimination” provisions of RLUIPA, which
state that “(no government shall impose or implement a land use
regulation that” either “treats a religious assembly or
institution on less than equal terms with 2 nonreligious assenbly
or institution” or “discriminates against any assembly or
institution on the basis of religion or religious denomination.”

42 U.S.C. § 2000cc(b) (1)-(2). The court found that HRS $§ 205-

40
*** POR PUBLICATION ¥#*
4.5 (1993 & Supp. 1998)" and 205-6 (1993 & Supp. 1998)? are “Land

 

HBS § 205-4.5 provides in relevant part:

Peraissible uses within the agricultural districts. (a)
within the agricultural district ali Janda with soll classified by
the land study buresu"s detailea land classification as overall
(master) productivity rating class A or 8 shall be restricted to
the follohing permitted uses:
(2) "Cultivation of crops, including but not limited to
flowers, vegetables, foliage, fruits, forage, and
Einber
(2) Gane and £18h propagations
(3) Ralsing of livestock, including but not Limited to
poultry, bees, fish, or other animal or aquatic lite

Ehat ave propagated for economic or personal use:

Farm dwellings, employee housing, farm buildings, oF

Sctivity or see related to farming end animal

husbanary;

Farm dwelling as used in this paragraph means a

Single-family dwelling located on and used in

Connection with a farm, including clusters of

Single-family farm cwellings persitted within

Sgriculteral parks seveloped by the State, oF where

agricultural activity provides income to the family

Secupying the dwellings

(5) Publig institutions and bulldings which are necessary
for agricultural practices;

(6) Public and private open sree types of recreational
ses including sy eampt, picnic greunds, parks, and
Hiding stables, put not ineluding dragstrips,
airports, drive-in theaters, golf courses, golf
Griving ranges, country clubs, and overnight campsy

(7) Public, private, end quasi-public utility Lines and
Foacays, transformer stations, communications

ieipment bulldings, solid waste transfer stations,

Eajor water storage tanks, nd appurtenant small
Buildings such es booster pumping stations, but not
Uneluding offices or yaras for equipment, material,
sehicle storage, repslr or asintenance, cr treatment
plants, or corporation yards, or other 1ike

(6) Retention, restoration, rehabilitation, or inprovement
Of builoings of eites of historic or scenic interest?

(9) Roadside stands for the sale of agricultural products
growa on the premises;

(20) Buildings and uses, including but not limited to
mills, storage, and processing facilities, maintenance
facilities, and vehicle snd equipment storage areas
that are normally considered directly accessory to the
abovenentioned uses and are permitted Under (HRS §)
208-2(a);

(2) Agricalearat

(22) Wind energy facilities, including the appurtenances

(Cont ined. .

 

 

 

 

 

  

 

 

 

 

 

 

a
‘444 FOR PUBLICATION *#*
use regulations” for purposes of RLUIPA, despite Maui County's
contention that because the state land use classification system,

and not county zoning codes, were at issue, a “land use

 

regulation” was not involved. Hale © Kaula, 229 F. Supp. 2d at
1070. The court rejected the church's argunent that “merely
having to obtain a permit is a violation of federal law” by
concluding that the statutory provisions “do not facially
discriminate against religious institutions” and that
“classifying land inte agricultural, rural, urban, and

conservation districts does not discriminate against church

 

(.-scontinued)

Seeoclated with the production and transmission of

Ming generated energy; provided that such facilities

nd appurtenances are compatible with agriculture uses

hd Cause Maine! adverse impact on agricultural Lend.

(b) Uses not expressly permitted in subsection (a) shall be

prohibited, except the uses permitted as provided in (HRS $6) 205-6 and
Doses {(regerding nonconforming uses) .J

     

 

 

HES § 208-6 provides in relevent part

permit. {a} The county planning ccamission may
perait certain cnusoal and reasonable uses within agricultural and
Eurel districts other than those for which the disevict is
Glacasfied. Any person who Gerites to use the person's land within
Gn agricultural or rural disteiet other than for an agricultural
or rural use, as the case may be, may petition the planning
Sonassaion of the county within which the person's land is located
for permission te use the person's land in the manner desired.
Each county may establish the appropriate fee for processing the
Special permit petition.

 

 

 

ic) the county planning commission may under such protective
restrictions as may De deemed necessary, permit the desires use,
but only shen the Use would promote the effectiveness and
objectives of thie chapter. A decision in favor of the epplicant
shail require a madority vote of the total mesbership of the
county planning comission.

(G) Special permite for lend the area of which is greater
than ¢lfteen acres’ shall be subject to approval by the land use
Sonigeion. The land use commission may impose saditional

trietions as nay be necessary oF appropriate in granting such
spproval, including the adherence to representations nade By the
Sppiicent.

 

 

 

   

 

a
##4 FOR PUBLICATION ***
buildings or uses." Id. The court further concluded that the
“law is facially neutral and of general applicability,” which did

 

not treat the church “on less than equal terms with a

 

nonreligious assembly or institution,” and that “[tJo rule
otherwise would exempt religious institutions from all zoning
laws,” which “clearly was not the intent of RLUIPA.” Id. at
1070-71.

‘The court's designation of HRS §§ 205-4.5 and 205-6 as
“land use regulations” within the meaning of RLUIPA in Hale 0
Kaula can easily be distinguished from ROH ch. 38, at issue in
the present matter. HRS §§ 205-4.5 and 205-6, see supra notes 8
and 9, by their plain language, involve the “division of land
into zones” and “the regulation of [] the nature of land usage”
within those zones. Indeed HRS § 205-$, housed in the same
chapter, is entitled “Zoning” and describes appropriate land uses
within agricultural districts. Furthermore, the above-quoted
section (b) provisions of RLUIPA that were the basis for the
church’s claim in Hale 0 Kaula are not at issue in the present
matter.

Finally, the Church’s reliance on Cottonwood is
misguided. In Cottonwood, a church sued the city for denial of
land use permits to allow it to build a church facility on land
it owned and sought to preliminarily enjoin the city from
continuing eminent domain proceedings to condemn the land for use
as commercial retail space. 218 F. Supp. 2d at 1209. The
question at issue in Cottonwood was whether the city’s actions

should be subject to strict scrutiny, and the court subsequently

3
 

*** FOR PUBLICATION
applied the strict scrutiny standard “because the (c]ity’s
refusal to grant Cottonwood its application for a [conditional
use permit] involves @ ‘land use regulation or system of
regulations, under which a government makes, or has in place
formal or informal procedures or practices that permit the
government to make, individualized assessments.” 218 F. Supp. 2d
at 1222 (quoting 42 U.S.C. § 2000cc(a) (2) (C)). Cottonwood did
not hold, as the Church contends, that “a condemnation action is
a ‘land use regulation’ subject to RLUIPA.” Following its
explanation of the applicability of the strict scrutiny stendard,
the court noted:

Defendants argue that RLUIPA does not apply because the

erereise cf eninent domain ie not 2 "lend Use requiation”

Onder RLUIPA... Moreover, Defendants insist that only

the condemnation proceedings are at issue in this motion, @

position with whieh the Court has slready disagreed. Even

Bethe Court were only considering the condennat ion

proceedings, they would fell under RLUIPA's definition of

Elgnd se reguiation” which is defined as "a zoning or

lendnarking law, or the application of such a law, that
Linite or restricts the cisinant’s use or development of

 

land sc." 42 -U.8.C. § 2000ce~3(8),. The Redevelopment
nev e 8 es
doa. ate By tne ci cad
Ecttonmmegs “use oF seu asYTERG

218 F. Supp. 2d at 1222 n.9 (emphasis added) (some ellipses
added, some in original). The fact that the Cottonwood court
denominated the authority of the Cypress, California
Redevelopment Agency to exercise its power of eminent domain as
being “based on a zoning system” has no bearing on the present
matter. The Redevelopment Agency's authority apparently emanated
from “the Resolution of Necessity” and a zoning system developed

by that city, which by no means signifies that all exercises of

“
#4 FOR PUBLICATION ***
eminent domain are grounded in a zoning system. As such, the
court's analysis in Cottonwood does not affect this court's
interpretation of ROH ch. 38. See St. John’s United Church of
Christ, 401 F. Supp. 2d at 899-900 (holding that Cottonwood does

not stand for the proposition that all exercises of eminent

 

domain authority are subject to RLUIPA; “that case can be read to
suggest that RLUIPA is applicable to the specific eminent domain
actions where the condemnation proceeding is intertwined with
other actions by the city involving zoning regulations”).

Furthermore, the Church’s contention that the
condemnation powers conferred under ROH ch. 38 apply only to
“lessees on multi-family residential land as opposed to leasehold
lands zoned or developed for other purposes such as industrial,
commercial or agricultural use” is incorrect. ‘The “condemnation
right” under ROH ch. 38 derives from the fact that a person is a
lessee “under any long-term lease of land upon which is situated
( residential condominium property regime projects.” ROH § 36-
1.1. A condemnation right, standing alone, is not a “zoning
law," and the self-evident fact that ROH ch. 38 applies to
buildings that happen to be situated on land zoned to permit
residences does not alter that reality.

A plain reading of RLUIPA compels the conclusion that
the application of ROH ch. 38 to qualified units of the Admiral
‘Thomas condominium complex does not violate RLUIPA. Because ROH
ch. 38 is neither a zoning nor @ landmarking law, it does not
constitute a “land use regulation” pursuant to the RLUIPA

definition of that term. Inasmuch as we hold that ROH ch. 38 is

45
88 FOR PUBLICATION *##

not a “landmarking law," we need not determine whether its
application imposes a “substantial burden” on the Church's
religious exercise, involved an “individualized assessment,” or
is a least-restrictive compelling interest.
Therefore, we hold that the circuit court did not err

in concluding that RLUIPA was unavailable to the Church as a
defense to the condemnation of its fee simple interests in
qualified Admixal Thomas residential condominium units. we thus
affimm the circuit court’s July 8, 2004 grant of summary judgment
fon the issue of the inapplicability of RLUIPA to the present
matter.

c.

The lessees argue that the circuit court erred in
concluding that there were not qualified applicants for at least
twenty-five leasehold units." The lessees seek to clarify that
“the 28 qualified applicant [) [units] should be construed only as
a preliminary triggering number to initiate the conversion and
designation approvals at the City Council.” The lessees contend
that they only need twenty-five qualified applicant units to
trigger condemnation proceedings and that “if the number ever
dips below 25 for any reason, such as death [or] inheritance, {]
‘that should not disqualify all of the other remaining applicants

1 he City aid not address the nunber of qualified Adtival Thomas
lessees or unite in sts opening Brief

46
4 FOR PUBLICATION *#*

from continuing with the condemnation process.” The lessees
maintain that “at least a minimum of 25 qualified applicant ()
[units] have existed since designation by the City.” They insist
that “there are two separate triggering points” in this case -~
the first when the Admiral Thomas was initially designated on
October 11, 2002 and then when the amended and supplemental
designation vas filed on March 20, 2003. The lessees argue that
because the six new applicant units were added on March 20, 2003,
that they constituted part of the qualifying total twenty-five
units, such that “even subtracting the disputed [three]
disqualifications, the minimum number of qualified applicant
units never dipped below [twenty-five] after the amended
designation.”
‘The lessees further argue that ROH § 38-2.4," entitled

 

ROH § 38+2.4 provides in relevant part:

(a) No sale of any condominium land within 2 development shall

be made unless the lessees:
(1) Age at least 18 years of age and are owner-occupants
Of their condominium unite;
(2) Ree'bona fide residents of the City and County of
Honolulu
(3) Have Legal title to, or pursuant to an agreenent of
fe, have an equitable interest in a condominius

Situated on the leases property applied for
nd)

(4) Bonet own property in fee simple lands suitable for
Fesiential purposes within the City and County of
Honoluiu{.] ©. + A person ie deemed to own lands,

[or the purpose of this paragraph, if the person, the
person's spouse, or both the person and the person’ s
Efouse (unless separated and Living spart under &
Gecree of a court of competent jurisdiction) own
Sands, Incluaing any interest, ine land trust in the
city ane County of Honolulas

ts) Submgt'a letter of credit, certificate of deposit,
proof of funds, or approved application from any
Tending institution demonstrating that the lessees who
are participating in the purchase of the fee interest

(cont inved. -.)

 

 

 

a
‘FOR PUBLICATION ***

“qualifications for purchase,” allows for applicants to quality

 

at the time of sale rather than the time that their applications
are preliminarily approved by the City. They contend that
“[t}here is no rule that says that if the applicant does not meet
the technical requirements at any time before ‘sale,’ that they
would be disqualified.” (Emphasis in original.) The lessees
construe ROH § 38-2.2(a) (1) to mean that applicants are “deemed
to ‘apply’ to [the DCS) when they ‘file an application with the

(continued)
Will ne able to pay the city promptly for the leased
fee interests:

(6) Submit’ sn application for the purchase of the leased
fee interest in good faith, and in such form a5 6
acceptable to the department: and

(7) Execute a contract for the purchase of the fee
interest in good faith, and in such form a5 is
acceptable te the deperteent-]

2 pons 3

 

2.2 provides in rele

 

nt part:

(a) Subject to subsection (b) of this section, the department
may designate all or that portion of @ development
Containing residential condominium Land for acquisition, and
facilicate the acquisition of the applicable leased fee
interests an that lang by the city through the exercise of
the power of eninent domain or By purchase under threat of
eninent domain, after:

(Ei At ieast’ 29 of all the condominium owmers within the
Gevelopnent or at lesst omers of SO percent of the
Condoninium units, whichever number is less, apply to
the department to purchase the leased fee interest
Bursvant to Section 38-2.4, and file an application
ith the department; and

(2) Due notice is given and # public hearing held [and]
the department finde that the acquisition of the
leased fee interest in the develossent or 3 porticn
thereof, through exercise of the power of eminent
Gonsin Or by purchase under threat of eminent domain
and the disposition thereof as provided in this part,
wal eheectuste the public purposes of this chapter.
For purposes of this subsection, "condominium owners”
means the omer-cecupants of the condominium
Gevelopnent -

(b) This land designated and acquired by the city may consist of
a portion of cr ‘the entirety of the land ares submitted to
the Geclarstion of condominium property:

  

 

 

 

 

 

 

48
‘#4 FOR PUBLICATION ¥#*
department” and that “the department then preliminarily approves
the applicants.” (Emphasis in original.)

‘The lessees seek to reverse the circuit court's
disqualification of applicant-lessees George and JoAnn Lumsden
(unit 2901), Neil Bellinger (Unit PH-1), and Myrna Chun-Hoon
(onit 801) because they claim that the circuit court based its
decision “upon a determination that if an applicant ever owned
other fee simple property on Oahu at anv time prior to the time
the applications were ‘filed, then [the] applicants would be
disqualified.” (Emphases in original.) The lessees maintain
that “{n]o language in (ROH ch.} 38 supports this interpretation
and application of the qualification criteria.”

(2) Applicants George and JoAnn Wumsden

‘The lessees explain that the Lumsdens bought their
Admiral Thomas unit in 1962, signed their application for ROH ch,
38 leasehold conversion on August 31, 1995, and did not own any
other fee simple property on O'ahu at that time. The lessees
contend that Mr. Lumsden inherited a studio condominium apartment
from his mother in September 1997 and sold it in December 1997.
‘The Lumsdens’ application was filed with the City on November 1,
2000 “because it took several years to assenble the minimum pool
of (twenty-five) applicant [-Jowners in order to be submitted as a
group that could qualify to trigger the designation.” The
lessees note that, “[i]mportantly, at the time they filed their
application with the City, the Lumsdens did not own any other fee
simple property suitable for residential purposes.” The lessees

argue that “[nJeither [ROH ch.] 36 nor the [Amended Rules for

49
#4 FOR PUBLICATION *##

Residential Condominium, Cooperative and Planned Developnent
Leasehold Conversion (hereinafter, “OCS Rules”)) expressly
provide for disqualification of an applicant who may have at one
time in the past owned fee simple lands.” (Emphasis in
original.) The lessees contend that the Lumsdens’ application
and affidavit were “both entirely true and accurate when they
were originally signed” on August 31, 1995 and also when “they
were filed with DCS on November 1, 2000." (Emphases in
original.) As a result, the lessees argue that the circuit court
erred in disqualifying the Lumsdens for only temporarily holding
title to a fee simple property in the intervening period between
signing the application and filing it.
(2) Applicant Neil gellinger

‘The lessees argue that Bellinger also qualified to
purchase the fee simple interest in his Admiral Thomas unit at
the time his application was filed with the City. They contend
that since Bellinger sold his fee simple title to a condominium
at the Royal Iolani between the date that he signed his
application on May 13, 1998 and when he filed the application
with the DCS on November 1, 2000, the circuit court should not
have disqualified his unit from the original pool of applicants.
‘The lessees maintain that because Bellinger “did not own any
other fee simple lands suitable for residential purposes, as
expressly stated in ROH § 38-2.4(4),” see supra note 12, at the
time he filed his application, his unit qualified for leasehold

conversion.

50
‘#4 FOR PUBLICATION

 

(3) Applicant Myrna Chun-Hoon

‘The lessees aver that Chun-Hoon’s unit also qualified
for leasehold conversion because she did not own any other fee
simple lands at the time that her application was filed with pcs.
‘The lessees explain that Chun-Hoon inherited from her mother
undivided interests in three parcels of fee simple property on
O'ahu, all of which she sold prior to signing her application on
May 6, 2002. Furthermore, the lessees argue, Chun-Hoon did not
own any fee simple lands when her application was filed with DCs
on May 13, 2002.

Based on the foregoing, the lessees contend that it is
the filing date of the application “that should control the issue
of preliminary qualification” and that each of the disqualified
lessees “had conveyed away any interest in other property prior
to filing their application(s],” such that the circuit court
erred in disqualifying then. (Emphasis in original.)

Finally, the lessees construe ROH 38-2.4(a) (4), see.
supra note 12, to mean that a lessee may not own fee simple
property at the time that the condominium land is sold, but that
it does not disqualify @ lessee who owned fee simple property in
the past. The les:

 

8 conclude that “[a] clear reading of the
DCs rules and ROH § 36-2.4(a)(] simply requires the applicants to
be preliminarily qualified as of their application filing date

and to be fully qualified by the time of sale.

 

(Emphasis in

original.)

51
‘#4 FOR PUBLICATION ***
b. The Chureh’s arquments
‘The Church argues that the lessees have failed to
demonstrate that they maintained twenty-five qualified spplicant
units. The Church avers that “case law indicates that once there
are less than 25 qualified lessees, public purpose ceases and the

condemnation must be terminated.” The Church also contends that

Housing Finance and Devel. Corp. v. Takabuki, 62 Hawai'i 172, 921
P.2d 92 (1996) (Takabuki IT), held that the class of original

applicants must be continuously maintained throughout the
condennation in order for it to proceed. The Church cites this
court's decision in Coon, 98 Hawai'i at 250, 47 P.3d at 365, to
show that the public purpose of ROH ch. 38 is not served if the
requisite number of at least twenty-five units is not obtained to
convert to fee simple. ‘The Church also submits that the City
actenpted to “add new units and lessees after the twelve-month
period expired{,] despite the fact that the designation was
stale” and did not comply with the notification requirenents of
ROH ch. 38 or Coon.”

‘The Church argues that it showed that multiple le

 

simple land after the dates their

 

had owned disqualifying f

applications were signed but otherwise fails to articulate a

13 ener than surmarily stating that “the additional units .

never complies with the public notice and hearing requirenent of ROH § 38-

ofa) (2) ana Coane” the Church fsils to support its argument with citations
25 the ‘record. We note that the Church likely meant to cite to ROH § 38
Boots) (2), gas suaxa note 12, which pertains to the condemnation of
Echdeniniuntsevelopment leaseholds under Article 2 rather than ROH § 38

SE CeT a), which pertaing to the condemnation of cooperative housing
Sevelopment leasenolde under Article 3. Because the Church's claim lacks any
sepeceher elaboration, we do not address the contention that the addition of
Salts in'an nended aesignaticn eid not comply with the public notice and
hearing requirement of ROH ch. 38.

  

 

 

52
‘#4 FOR PUBLICATION

 

response the lessees’ argunent that the filing date of a lessee's
application with DCS is the controlling date for the
determination of eligibility for leasehold conversion. The
Church asserts that “ROH ch. 38 is not intended to be a welfare
program for the wealthy” and argues that the lessees could create
a “false poverty’ simply to qualify for a government

administered program,” which the Church calls “particularly
egregious when the attempted dispossession for the wealthy is
from a church [that] is providing social assistance to the
homeless, poor and needy in our community.”

2. Analysis of the applicable law

“As a general proposition, summary judgment should be
granted where there is no genuine issue as to any material fact
and one party is entitled to a judgment as a matter of lew.”
HRCP Rule S6(b) (c)? Querubin v, Thronas, 107 Hawai'i 48, 57, 109
P.3d 689, 698 (2005). Therefore, the relevant inquiry is
whether, in the absence of any genuine issue of material fact,
the circuit court’s conclusion that there were not qualified
applicants for at least twenty-five units to acquire the fee
simple title to the land was correct.

(a) Whether the city added units after the
twelve-month period beginning at desianation

on October 11, 2002, the Director of the DCS designated
a portion of the Admiral Thomas for acquisition, specifically
including the interests of twenty-eight residential condominium
unite.

on March 20, 2003, the Director of the OCS amended the

designation of the Admiral Thomas to include the acquisition of

53
 

FOR PUBLICATION *#*

the leased fee interests appurtenant to six additional units that
met the applicable requirements of ROH ch. 38. The Director was
permitted to amend the designation and add qualified units
pursuant to DCS Rules § 2-11(d) (2000), which provides in
relevant part that
[alny ower occupar condominium in the deve1é
was not one of the applicants at the time of the des
Df the incividual residential condominium Snterests may

apply and becone an additional applicant, subject to meeting
the applicable requirenents of [ROH ch. 36] and these rules:

      

 

on May 8, 2003, the City filed a complaint in eminent
domain. Contrary to the Church's assertion that, pursuant to
Goon, “after twelve months, a designation becomes ‘stale’ and of
no further force and effect” and that “the City added new units
well after the 12-month limit,” Coon does not require the City to
add newly approved units within twelve months of the original
designation date. Rather, Coon mandates that the City initiate a
condennation action within twelve months of designating the
property for acquisition. 98 Hawai'i at 255, 47 P.3d at 370. In
the present matter, the City both initiated condemnation action
and “added new units” within twelve months of its October 11,
2002 designation of the Admiral Thomas. Therefore, the City did
not violate the rule in Coon regarding the timely initiation of a
condemnation action, nor, without more, did it improperly add
units te the original designation.

() five 2
isonly to tricser condemnation proceedings

The lessees contend that, in order to comply with ROH
§ 38-2.2, they only need twenty-five units, presumably qualified

or not, to “trigger” condemnation proceedings, and that, in the

54
‘#4 FOR PUBLICATION *#

present matter, there were two separate triggering dates ~~
October 11, 2002, when the Admiral Thomas was initially
designated, and March 20, 2003, when the amended designation was
filed. Essentially, the lessees posit that they can make up for
any deficiency in the initial requirement of twenty-five units at
the outset if they properly add more qualifying units later.
Based on this court’s previous case law interpreting ROH § 38-
2.2, the lessees are wrong in this regard.

‘This court recently addressed the argument that "ROH
chapter 38 does not require that the statutory minimum number of
applicants be maintained only from the [applicants] originally
designated” in City and County of Honolulu v. Hsiung, 109 Hawai't
159, 177, 124 P.3d 434, 452 (2005) (brackets in original). “This
court has ruled that the failure to receive a sufficient number
of qualified applications prior to initiating ROH chapter 38
proceedings results in an invalid, void, and unenforceable
designation because the department exceeded its authority
pursuant to ROH § 38-2.2." Id, at 178, 124 P.3d at 453. In City
and County of Honolulu v. ing, this court held that “the circuit
court . . . erred in deciding that the use for which The Kahala
Beach [condominiums] is sought to be condemned is a public use
within the meaning of HRS ch. 101 and ROH ch. 38” because “the
City did not receive applications for lease-to-fee conversion
from twenty-five qualified ovner-occupants prior to initiating
ROH ch. 38 proceedings.” 100 Hawai'i 182, 193, 58 P.3d 1229,

1240 (2002) (brackets omitted) (emphasis deleted) (ellipsis
points deleted). In Coon, this court ruled that DCS Rules § 2-3

55
+** FOR PUBLICATION ***

(1993) conflicted with ROH § 38-2.2, see supra note 12, because
bcs Rules § 2-3 impermissible lowered the minimum number of
applicants required to trigger ROH ch. 38 proceedings pursuant to
ROH § 38-2.2. 98 Hawai'i at 246-52, 47 P.3d at 361-67.
“consequently, this court held that the City’s designation of The
Kahala Beach condominium development for lease-to-fee conversion
was invalid, void, and unenforceable, because the Department did
not receive a sufficient number of qualified applications from
‘The Kahala Beach condominium ouners and, therefore, exceeded its
authority pursuant to ROH § 38-2.2.” Ina, 100 Hawai'i at 193, 58
P.3d at 1240 (citing Coon, 98 Hawai'i at 251, 47 P.3d. at 366).
Furthermore, this court originally stated in Zakabuki 11 that

[blecause the (Housing Finance and Developrent Corporation]

ID fequired to acquire and dispose of the leased fee

incerests of at least that aunber of houselote represented
by statutory minimin number of applicants that it

 

Sesignstes, if, ater 2 por nt tract has
been deslanated oursuant to HESS Si-2e, the class of
isiices hose nouselore have Deon decigssted Talis Below the

heer willbe required to tesminate the proceedings (and
Start again with # new designetion only if encugh qualified
i an be found) =

 

82 Hawai'i at 183, 921 P.2d at 103 (emphasis added).
In Hsiung, this court also addressed the contention

that an amended designation provides the City and lessees with a

second “trigger” date by which to qualify 2 minimum of twenty-

five units for designation:

Roles § 2-3 provided in relevant part

 

Not less than 25 condominium owners by number, or SO¥ of the
Condominium owners cf 3 development, whichever shall be the lesser
umber, must apply as a condition precedent to the exercise of the
power of eminent donain or the threat of eminent domain by the
city.

 

56
‘** FOR PUBLICATION ***

‘The subsequent amendnents could not cure proceedings
initiated besed on Wold and invalia designation.
Additionally, we note that. RCP() Rule 15(c}

(2000) ("1 otters no relief because “*the rationale of the
relation back rate 15(c) 1 to ameliorate the effect of the
Statute of Limieations.’ Here, there is no Limieation of
action problem. Thus, Rule 15(c) has no applicability.”
Hanalei, BEC Inc, v Barter, 7 law, App. 30%, 303-10, 760
P.2a 676, 680 (1958) (citation, brackets, and footnote
onitees)} gee aluo Chin Kee v,’Kaeleku Sugar Co, 30 Hew.
17, 22 (1827); Barber e: Wards cow, Inca, 825 Food 684, 689
(24 Cir. 1967) (Rute Ia(c) governs the ‘relation back’ of
Snendes’ pleadings only for the purpose of the statute of
Limitations, which is simply not implicated in this case.");
Doe ve O'Bannon, 51 F.R-D. $42, 447 (B.D. Fa. 1561)
(rreiation back’ only exists for the purpose of
Aneliorating the effect cf statutory bars te relief and not
for the purpose of artificially assisting plaintiffs to
fulfill Constitutional prerequisites, such as standing”
(citation omitted) )-

109 Hawai'i at 178, 124 P.3d at 453 (footnote omitted). Hence,

 

 

 

the City’s anended designation adding units cannot cure the lack
of the requisite twenty-five at the original designation.
Notwithstanding the conclusion that the date of the
amended designation does not “relate back” to the original
designation date for the purposes of whether there were twenty-
five qualified applicant-units to initiate ROH ch. 38
proceedings, it follows from the foregoing discussion that if the

 

NRCP Rule 15(c) provides

{e) Relation back of amendments. An anendnent of a pleading
relates back to the sate of the original plessing when

(2) relation back is pernitted by the law that provides the
statute of limitations applicable to the action, or

2) the claim or defense asserted in the smended pleading
arose out of the conduct, transaction, of occurrence set forth oF

fenpted £0 be set forth in the original pleading, oF
13) the amendment changes the party or the naming of the

party against whom e claim is asserted if the foregoing provision
12) is satisfied ond the party te be Brought in by amendment (A)
has received such notice of the institution of the action that the
party will not be prejudiced in maintaining « defense on the
Eerits, and (8) knew or should have known that, but for a mistake
Concerning the identity ef the proper party, the action would have
been brought against the party.

 

 

 

 

 

 

57
s+ POR PUBLICATION ¥#*
numerosity requirenent was met when first designated, then any
properly added applicant-units may count toward the continuous
maintenance of the minimum twenty-five units, In other words, if
the lessees maintained at least twenty-five qualified units up to
the date of an amended designation, then the number from the
initial designation is added to the number of the amended
Gesignation for a total nunber of qualified units. If,
thereafter, a unit drops out of the condemnation process or the
lessee of another unit passes away, as long as the minimum number
of twenty-five units is continuously maintained, the condemnation
retains its public purpose and need not be terminated.
conversely, if there are not a minimum of twenty-five qualified
units initially, then the addition of units with an amended
Gesignation is moot, inasmuch as the added units cannot cure the
initial numerosity deficiency and the condemnation process must
be terminated. As we have indicated, this conclusion is
supported by the foregoing case law and we can Likewise find no
language in ROH ch. 38 that would preclude (1) the addition of
qualified units by amended designation or (2) the enumeration of
those added units toward the requirement that twenty-five
qualified units must be continuously maintained.

Therefore, the City’s amended designation adding six
units could not serve to increase @ previously insufficient
number of qualified applicant-units to the minimum twenty-five
applicant-units necessary to initiate ROH ch. 38 proceedings.
Conversely, the amendment of the original designation would allow

added qualified applicant-units to count toward the previously

38
#4 FOR PUBLICATION *#*
existing minimum qualified twenty-five units continuously
necessary for ROH ch. 38 proceedings.

te) i
lessees” nis fil

The lessees seek to reverse the circuit court’s
disqualification of applicants Chun-Hoon, Bellinger, and the
Lumsdens from the condemnation proceedings based on their
contention that all three units qualified on the date that their
applications were filed with the City.

In Hisiung, the lessees challenged the circuit court’s
disqualification of applicants Ault and the Dixons based upon the
circuit court's ruling that the applicants in question “owned fee
simple property suitable for residential purposes within the City
and County of Honolulu that was quitclaimed for no consideration
to relatives shortly before or at the time they applied to
participate in the condemnation proceedings.” 109 Hawai'i at
171, 124 P.3d at 446. Similar to the Church's argument in the
present matter, the opponents of the condemnation action argued
that the circuit court was correct in disqualifying the
applicants because “their transactions vere similar to the
creation of ‘false poverty’ to becone eligible for government
assistance programs or fraudulent conveyances." id, This court
concluded that the circuit court erred in disqualifying the

applicants, reasoning as follow:

 

‘The clear and unanbiquous Language of ROH § 38-2.4 provides
that applicants are slot eligible to participate in
Condemation proceedings under OH chapter #8 unless they
S{aje not oun property in fee simple Landa suitable for
resicentiel purposes within the City and County of Honolulu
of have pending; - . an Unrefused application to lease oF
purchase’ sesidentiel reel property for dwelling unit

39
‘+ FOR PUBLICATION ###
purposes." In the instant cage, it {a undisputed that, at
he tine they applied snd throsahost the condemnation

for residential purposes ui thin the

 

‘and County of Hondlulu ox had a pending, unrefused
‘Ghalisabisn to lesse or purchase residential real property
‘for-deelling unit curmeses. Based on the plain language of
The ordinence, we hola that the circuit court erred in
Foling that Ault and the Dixons were not qualified to
Participate in condemnation proceedings under ROW chapter
5e

 

 

ds (emphasis added) .
In the present matter, “at the time they applied and
throughout the condemnation proceedings,” Bellinger, Chun-Hoon,
and the Lumsdens neither “owned fee simple property suitable for
residential purposes within the City and County of Honolulu or
had 2 pending, unrefused application to lease or purchase
residential real property for dwelling unit purposes.” Id.
Furthermore, the Church neither presented evidence nor argued in
the circuit court that Bellinger, Chun-Hoon, or the Lumsdens were

not qualified on the date that their applications were filed with

 

the city. Based on fisiung, the relevant date to determine
whether a unit qualifies for ROH ch. 38 condemnation is when a
lessee files an application with the City and not when the
application is signed by the lessee. Given this conclusion, the
circuit court erred in disqualifying applicants Bellinger, chun
Hoon, and the Lunsdens based on its ruling that they owned
property either at the tine that they signed their applications
or at sone point between signing their applications and filing
them with the City, Because the Church did not claim that
Bellinger, Chun-Hioon, and the Lumsdens owned any disqualifying
property as of the date that their applications were filed with
the City, it has waived the argument on appeal.

«0
4** FOR PUBLICATION *#*

(4) Whether lessees may initially qualify at the
Lime of sale

‘The lessees’ further argue that ROH § 38-2.4 allows for
applicants initially to qualify at the time of sale rather than
the time that their applications are preliminarily approved by
DCS. The lessees’ attempt to shift the requirements for
qualification past the date that applications are filed is
unavailing.

ROH § 38-2.4, see supra note 11, states that “{nJo sale
of any condominium property land within a development shall be
made unless the lessees" satisfy seven requirenents. ROH 38-2.2,
see supra note 12, requires that, in order for DCS to designate
condominium land for acquisition by the City, “[a]t least 25 of
a1 the condominium owners within the development or at least
owners of 50 percent of the condominium units, whichever nunbe:
is less, apply to the department to purchase the leased tee
Anterest pursuant to Section 38-2.4, and file an application with
the department.” (Emphasis added.) By its plain language, ROH
§ 38-2.2 incorporates the requirements of section 2.4 into the
minimum number of twenty-five condominium owners necessary for
the City to initiate condemnation proceedings. Indeed, it would
be absurd for the DCS to designate residential condominium Land
for acquisition by the City with a minimum group of twenty-five

less:

 

who were unqualified to purchase the fee simple title to
their units pursuant to ROH § 38-2.4. Such a construction of ROH
§ 38-2.4 would negate the requirement that there be @ minimun
nunber of condominium owners to initiate the designation, because
the DCS could then allow applicants to join the designation who

a
444 FOR PUBLICATION *#*
night never become qualified.

This court has construed ROH $5 38-2.2 and 38-2.4 to
require that applicants be qualified to purchase the fee sinple
title to their units at the time that they file an application
with DCS. In Hsiung, we held that a lessee was properly
disqualified from the group of applicants designated to acquire
the fee to their condominium units because he owned property
suitable for residential purposes. 109 Hawai'i at 171, 124 P.3d
at 446. We stated that ROH § 38-2.4 required that lessee Poag
not own property in fee simple suitable for residential purposes

and rejected the lessees’ claim that Poag should not have bee!

 

disqualified because the property he owned was for business

purposes. Id, Hsiung concluded:

(z)he plain Language of ROH § 38-2-4 Le both unqualified and
Unambiguous: "No sale of condominium iand within
Sevelopment shall be made unless the lessees < . . [d]o not
own property in fee simple lands suitable for rasidentiat
purposes.” ‘There being no anbguity in the ordinance, ehis
Court is not at liberty to look beyond its plain language.
ee Ing, 100 Hawai at 109-90, 0 P34 at 1236-37
(citations omitted). Therefore, we hold that the circuit
court did not err in ruling that Poag was not qualified to
Participate in condemnation proceedings under ROH chapter
Be.

109 Hawai'i at 172, 124 P.3d at 447. Hsiung ultimately held that

 

 

“the City initiated condemnation proceedings based on a
designation that included, at most, 24 qualified applicants” and
that “the failure to receive a sufficient number of qualified

applications prior to initiating ROH ch{]. 38 proceedings results
in an invalid, void, and unenforceable designation.” 109 Hawai'i
at 178, 124 P.3d at 453, That holding forecloses the proposition
that ROH § 38-2.4 merely requires that lessees be qualified to

purchase their units at the time of sale. Therefore, we have

Cy
‘8 FOR PUBLICATION ###

consistently required that lessees be qualified pursuant to ROH
§ 38-2.4 at the time that they filed their applications with the
Des, and ROH § 38-2.4, read in pari materia with ROH § 38-2.2,
plainly reinforce that proposition.

3. Conclusion

In light of the foregoing, we hold that the time an
application is filed with the City is the operative date for
determining whether lessees initially qualify to purchase the fee
simple interest in their condominium units pursuant to ROH § 38

2.4. Therefore, the circuit court’s rationale for its July @,

 

2004 denial of the lessees’ motion for partial summary judgment,
ruling that there were not qualified original or properly-added
applicants for at least 25 units continuously throughout the
legal proceedings to convert the leaseholds to fee simple, was
exroneously based upon the finding that applicants Bellinger,
Chun-Hoon, and the Lumsdens did not qualify at the time that they
signed their applications. Accordingly, we vacate that portion
of the circuit court’s July & 2004 order and remand for further

proceedings consistent with this opinion.

b. —
The Power Of Eminent Domain To The Department Of
Community Service.

1, The parties’ arcunents
a. The Church's arounents
‘The Church argues that the Honolulu City Council
impermissibly delegated the power of eminent domain to the OCS in

violation of HRS §§ 101-13, see supra note S, and 101-14

63
‘FOR PUBLICATION ###

 

(1993). The Church contends that this court’s decision in
Richardson, 76 Hawai'l at $7-59, 868 P.2d at 1204-06, was only “a
facial consideration of Ordinance 91-95 and the relevant State
statutes” but that at the time this court ruled, “the City had
not attempted to condemn any property under ROH [ch.] 38.”
(emphasis in original.) The Church argues that the record in the
present matter establishes that “the City is interpreting the law
to mean that the decision of [the DCS] to designate property, far
from being a ‘preliminary step,’ legally mandates the City
Counei1 to condemn the property.” (Emphasis in original.) The
result, according to the Church, is that ROH ch. 38, “as
interpreted and applied by the City, reduced the City Council to
a mere rubber stamp.” ‘The Church believes that the City Council
was “instructed by its attorneys that it was ‘mandated’ to
approve [the DCS]"s acticns[] or it would be acting in violation
of ROH [ch.] 38 and the Council members could face suit from the
lessees.” The Church concludes that “the Council did not have
the authority to determine whether the taking was for a public
purpose, because that had already been determined by [the DCS]
and (the City Council was) bound by (the DCS}’s determination.”

‘The Church maintains that the lessees “cannot legally force the

 

 

MRS § 101-14 provides:

Plaintiff. The attorney genersi of the state may, at the
request of the head of any departeent of the State, or as
Stherwise provided by law, institute proceedings for the
Condennatien of property as provided for in this part. Any county
Say institute procesdinge in the name and on behsit of the county
Tor the condemnation of property within the county for any of the
purposes provides in this part which are within the powers granted
fo the county

 

64
** FOR PUBLICATION *#*
City to accommodate their desire for condemnation” and that “not
only has the power [of eminent domain] been improperly delegated
to [the DCS] in this case, it has been unlawfully co-opted by the
[Lessees.”

b. The City's arguments
‘The City argues that the circuit court correctly
concluded that the city council did not improperly delegate its
power of eminent domain to the DCS. The City maintains that the
“public use” of this eminent domain practice has already been

Well established by this court in prior cai

 

serts

 

8. The city
that because the Church “already obtained (a) complete judicial
de novo review of the City’s public use decision to proceed with
an eminent domain action” in the circuit court, it may not
“complain about the process that led to the filing of the eminent

domain action.” The City argues that this court’s decision in

‘Takabuki v. Housing Finance and Dev, Corp., 72 Haw. 466, 822 P.2d
985 (1991) [Takabuki I), “confirms that it doesn’t matter how

many ‘defects’ the landowner thinks exist in the City Council’s
procedures” because “the landowner’s recourse is to contest
public use in the eminent domain case, which [the Church had] an
opportunity to do in the [c]ircuit (cJourt.” Finally, the City
avers that this court has already held in Richardson that “this
process does not illegally delegate condennation power to (0CS].”
c. The lessees’ araunents

‘The lessees argue that the issue of improper delegation

alleged as error in the Church's opening brief is not properly

before this court “since [the] Church did not separately move to

6
44 FOR PUBLICATION ***
include that separately denied motion within the scope of the
[RCP] Rule 54(b) certification.” The lessees contend that the
City Council’s resolutions approving the condemnation of

qualified residential units within the Admiral Thomas “are
entitled to a presumption of validity and judiciel deference and
should only be overturned upon a showing that the resolution
approving the condennation was arbitrary, unreasonable or
invalid.” The lessees join the City in arguing that the public
purpose of ROH ch. 38 has already been established by this court.

‘The lessees maintain that “{t]here is no further discretion under

 

the ordinance, except to determine if the actual nunber of
[units] meets the specified qualification requirement.”

2. Analysis of the applicable law

As a preliminary matter, we note that the issue of
improper delegation is properly before this court. on July 8,
2004, the circuit court entered an order granting partial sunmary
judgment in favor of the City and lessees by concluding that “the

City Council did not improperly delegate the power of eminent

 

domain.” On September 21, 2004, the circuit court entered an
order that, inter alia, granted the lessees’ request for HRCP
Rule S4(b) certification and directed the entry of final judgment
as to the June 30, 2004 and the July & 2004 orders. Therefore,
the church did not need to separately move to include the issue
of improper delegation in the HRCP Rule 54(b) certification
because it was alzeady part of the July 8, 2004 order that was so
certified.

66
improperly

76 Hawai'i
omitted) (

that this

ROH ch. 38.

applicable
case. The

the pcs to

*** FOR PUBLICATION ##*

‘This court has already held that the City did not

delegate its power of eminent domain in Richardson:

The Trustees next urge that [t]he City lacks the
authority to redelegate its eminent domain powers as
attempted in Ordinance 91-85, because sections 2.2 (relating
te condemnation of condominium development leaseholds) 3-2
(relating to condemnation of cooperative housing development
leaseholds), and 4.2 (relating to condeanation of
residential planned development lesseholds) of (RO ch. 38]
impermissibly transfer the city’s limited condemnation power
from the "governing authority,” ive, the city counclly
prescribed by HRS § 101-13 (1985), to the City's Departnent
BE Housing and Community Development (the Department) Me
disagree

The Trustees appear to have misread (ROM) $6 38-2.2,
3803.2; and 384.2 (Apr. 1992 Rev.J." Although the
Departnent is enpowered to designate land for
pursuant to these sections, By theif very terms the
Department merely facilitates the City's acquisition of the
Lend subject to the decision of the City, enrough see City
Council, actually to gusicise the power of eminent domain as
prescribed by HAS $§ 10I-13 and 10i-14. In other words, the
Sections accord the Departnent the authority to assist the
City's statutorily designated “governing authority” in the
Ultimate exercise of that power! they de not, and cannot,
Sonfer che power ts condenh land on the Department itself

Because the Department’ s mere designetion of land, a
42 means of facilitating its acquisition by the City, 18 only
42 preliminary step in the condemnation process that, precedes
the institution of eminent domain proceedings at the benest
of the city Council, we hold that Ordinance 91-95 does net
entail the sort of inpermissible delegation of the power of
Guinent domain from the City Couneil to the Oepertnent that
would violate HRS § 101-13.

at 57-59, 868 P.2d at 1204-06 (citations and footnotes

 

 

 

 

    

 

 

 

emphases in original). We disagree with the church

court's decision was only a “facial” consideration of
We fail to see how Richardson is not as equally

to the present matter as it was to the facts in that

Richardson court interpreted ROH § 38-2.2 to empower

designate land for acquisition by the City, which

“merely facilitates the City’s acquisition of the land subject to

the decisi

on of the City, through its City Council, actually to

eo
 

#4 FOR PUBLICATION

exercise the power of eminent domain.” Id. at 58, 868 P.2d at
1205 (emphases in original). ROH § 36-2.2(a) performs the same

 

function in the present matter:

[t)he department may designate a1 or that portion of
development containing Fesidential condominium land for
acquisition, and facilitate the acquisition of the
applicable leased fee interests in chat land by the city
through the exercise of the power of eminent domain or by
purchase under the threat of eminent domaints

 

   

 

 

(Emphases added.) On its face, section (a) does not mandate that
the City condemn the designated property.

The Takabuki I court addressed a challenge to the
public purpose of designating residential lots for lease-to-fee

conversion under HRS chapter 516 as follows:

 

 

HRS § 516-22 states in part
and if, after." public hearing... the
Guthority finds the acquisition of the leased
fee interest... will effectuate the public

 

purposes of this chapter
Tn'this case, appeliants assert that the public
‘was pro forma only, attended by enployees of the

appellee corporation, that no findings were made at the
hearing, and chat che finding of public use in the
Pesolueion was not based upon what occurred at the hearing.

{eis ebvious that the public hearing called for under
Rs § 516-22 1s not a contested case hearing

Thus it would appear that the public Rearing called
for under HRS § 516-22 serves only an informational purpose,
‘and the agency's determination to proceed with a
Condennation of 2 tract of land because st would serve the
public purpose does not depend vpen sone form of prior
Rearing

Proceedings under HRS Chapter 516 are, hoever, not
unique in this regard. Agencies with the power of eninent
donain resch 2 determination to proceed with an action as
being for the public use administratively sn the usual case.

That does not mean, bowever, that che landowner hes NO
rneane of contesting public use, since HRS § 101-34
[i1999)"1 expressly provides that if the Landowmer properly

 

 

   

 

 

 

   

 

 

Rs § 101-34 provides:
eave as to use may be sat for immediate trial. If the
defendant in the defendast’s ansuer, or in return to the order to
Show cause, issued under section 101-28, denies that the use for
Teont inued.

 

 

68
*#4 FOR PUBLICATION +#*

the question of whether there is a public use, the
‘can be separated out and tried and indeed appealed in
advance of the valuation trial.

‘Thus, we hold that [the flousing Finance end
Development Corporation) had the power to adopt. the
resolution in question.

 

ight in the eninent donain proceedings ander Hes $ 101-34
Eeccofteat the public use, and that includes a contest of
mhsther or not che prerequisites to-such a condemation set

‘forth in the various oxovisions of BRS Chanter 316 such as
ihe sige of the tract. the number of the persons applying
‘Sisu_ have Desi meh, “Tesves raised as to those
Gusitvications are factual issues which the landowner is
entitled to try, de Novo, before the circuit court sn am
Svidentiary hearing, despite any previous determination with
respect thereto by the appellee. Since the appellants have

 

 

 

Ehey can riise che issue cf public-use in the epinent domain
‘brocesdings, they have oo aspeal fron the -adoation of the
Feslution in auestion=
72 Haw. at 467-68, 822 P.2d at 955-56 (emphases added).

‘The applicability of Takabuki I's analysis to ROH ch.
38/8 stated public purpose is explained in this court's recent
decision in Kau:

OH chapter 38 (entitled “Residential Condominius,

Cooperative Housing and Residentiel Planned Development

Leasehold Conversions”), enacted by City and County of

Honoluly Ordinsnce 91-96 1995), is moseled after HRS

chapter S16 (known a8 the Hawai'i Land Reform Act (KLRA))
lu, 602 F. Supp. 326,

 

 

340 (0. Naw.1992); age generally,
County of Honoiuli, ‘Te Hewei's 46, 866 P26 1193 (1994)
outlining Haweii"s involuntary fee conversion scheme under
state statute and county ordinance and stating that both HkS
Chapter 516 (HLRA) and ordinance 91-95 (presently codified
as ROH chapter 38) appertain to involuntary fee conversion:
however, the statute and ordinence cover different subject

 

17(, continued)
nici ‘the property sought to be condemned is a public use, or
Superior public use within the neaning of section 101-7, the issue
Say, upon the notion of any party, be set for immediate trial,
without» jury and withost regard to position on the calendar.
Notwithstanding eny provision of section édivi, an interlocutory
appeal shall Iie ffom the decision on the issue as of right, and
the appeal shall be given precedence in the suprene court.
Failure of the cefendant to reise the issue within ten days after
vice of an order granting innediate pos
Jani ssion that the use is 2 puolic wee
fae the case may be.

 

 

       

68
**4 POR PUBLICATION ##*

matter ~- the HLRA applies to Land underlying single family
Renee and ROH chapter 38 applies ‘to condominium, cooperative
housing and planned development units.) The intended
Similarity between ROH chapter 36 and the HLRA is evident in
tthe City Council's statenent regarding the purpose of the
Ordinance: "(t]he purpose of this nessure is to provide to
the leasehold ouners of condoniniun properties the sane
Hight to parchase the land under thelr hones as is currently
provided the omers of single family dvellings . « «

Goan, 98 Kawaii at 251 n.27, 47 P.3d at 366 0.27 (citing
the report of the City Council Comittee on Housing,
Committee Report No, 545 (1991).

Kau, 104 Hawai'i at 477, $2 P.3d at 486. As Kau illustrates, the

 

 

 

public purpose requirement underlying ROH ch. 38 condemnation has

been satisfied as a matter of law. Id.

In Bicherdsen v. Clty and County of Honeluly, 124 F.3d
41$0 (1597), the Unlted states Court of Appeals for the
Ninth Circuit nel thet Ordinance 91-95 (codified as ROM
Ghapter 38) ie constitutional! "[i]n summary, we hold that
Ordinance 91-95 (the lease to fee ordinance) is
Constitutional, The Ordinance adaittedly takes private
property, but it dose so for's sufficiently public purpose
End no constitutional deprivation has as yet been
established.” Richardson, 124 F-3g at 1166

‘Sinilarly, we previously held in HEDC thet the WLRA
acconplished 2 public purpose within the meaning of the HRA
and the United States and fiawes's Constitutions. EDC, 79
Hawai'i at’ 90,898 F.24 at 602. After reviewing the public
Purpose elucidated in the express language of the HLRA, its
Tegtsiative histery, end esriier case law, we held that the
iaiRa continues co accomplish = public purpose within the
meaning of the HLRA and the United State and. Hawal't
Constitutions. Jae at 91-92, 898 F.26 st 03-08. In
reaching this conclusion, we’ discussed the legisiative
Hindings and stated purpose of the HLRA and held as follows:

 

 

 

  

Locislatire has spoken on the accial tasve
ivolved. so lone as the exercise of the eninent
Soman power in rationally related to the
Eiscte Stock tne destalative public use
‘Geclaxation should be uoheld unless it ia.
Ealnably without reasonable foundation The
‘stucial_ingusty is whether the lecisiature miaht

ofthe scvereianrs 7
‘accomplish the public use coal,

smplovnent of the state's euinent domsin
authority te tedisteibute fees simple to correct
‘pociosecononic oroblens attributed by the’
‘iecislature coe Land oligopoly isa rational

70
‘+44 FOR PUBLICATION +#*

Ag. ates, B58 P28

 

397 (alteration in original).

izin'ueve, the fee owners proposed that “public
purpose" Getersinations be made on 2 case-by-case basis a2 3
function of the particular “tine” and general econonic
Schecusstances” at the time of condemnation. Id. at 67, 698
Podd at S09, Me held that the fee onnere in that case vere
mistaken and that the public purpose requirement of the HLA
would be satisfied as s matter of law by the lessees"
Sompliance with its threshold requirements of the number and
gueli fications of applying lessees ana the condemning
Guthority's determination that its acquisition will
etfectuate the public parpese of the HLRA:

Put more succinctly, pursuant to HRS

$ 516-22, the MFoc"s sole’ function 1s to

determine that the necessary guantu of lessees

have applied for purchase of their leased fee

cnterests in recidentis! lots eituated in 2

Gualitying "development tract,” gag HRS § 516-1,

Supra note 1, in conformity with the

Preconditions enunerated in HRS § 516-33, and

Ehat the acquisition by che #EDC will effectuate

the public purposes of the ALAR.

 

 

 

 

     

 

hese determinations of the number and
qualitications of applying lessees and the
Setfectuation” of the public purposes of the
MURA =~ which are ali that are required of the
FDC by HRS € 16-22 —~ are a far cry from a
reexamination of the question whether any given
acquisition would in fact accomplish the
legislature's articulated public purposes, @
feat thet the United States Supreme Coure ruled
that even the legislature was hot required to
accomplish in the first instance.  (Hayald

wil makiee, 467 US. (229) at

   

 

 

zee (see)
Ads ot 88-89, G98 P.24 at 600-01.

Kau, 104 Hawai'i at 478-79, 92 P.3d at 487-88 (emphases in
original).

In the present matter, the DCS properly designated the
Admiral Thonas for acquisition pursuant to ROH § 38-2.2 and the
City properly exercised its power of eminent domain in
determining that the designation effectuated a public purpose.
The Church then challenged the DCS's findings that the minimum
number of twenty-five units qualified for ROH ch. 38 conversion,

n
#8 FOR PUBLICATION ###
and the circuit court conducted a hearing that evaluated,
Anter alia, whether there were qualified applicants for at least
twenty-five units in the Admiral Thomas. Thus, per this court's
conclusion in Kay, “[clonsidering both the history of ROH ch[.]
38 and its close relationship with the HLRA and our holding in
HED,” 104 Hawai'i at 479, 92 P.3d at 488, the public purpose of
ROH ch. 38 has been satisfied as a matter of law in this case.

3. Conelusion

In light of the foregoing, we hold that the Honolulu
City Council did not improperly delegate the power of eminent
domain to the DCS. Therefore, we affirm the circuit court's July
8, 2004 grant of the lessees’ motion for partial summary judgment
on the issue of improper delegation.

5. o a i f The

Requirenents Of HRC? Rule 56(e).
1. he parties’ arauments
a. The Church's arouments
‘The Church axgues that Cravalho’s affidavits do not
comply with HRCP Rule 56(e), see supra note 4, and that their
conclusions that the lessees were qualified under ROH ch. 38

constituted inadmissable hi

 

say. The Church contends that the
lessees “adduced no independent evidence that [they] were in fact
qualified and that public purpose has been met.” Notwithstanding
the Church's citation to GECC Finan. Corp, v. Jaftarian, 79
Hawas's $26, 525, 904 P.2d 530, 539 (App. 1995), for support that
“lal ffidavits which state ultimate or conclusory facts or

conclusions of law cannot be utilized in support of a motion for

2
‘+ FOR PUBLICATION *#*

summary judoment,” it fails to explicate how Cravalho's
affidavits are hearsay. The Church likewise does not suggest how
the DCS might help “facilitate the acquisition of the applicable
leased fee interests in that land by the city,” ROH § 38-2.2(a),
without qualifying lessees in a manner such as that employed by
Cravalho in the present matter. The Church quotes Takabuki I as
stating that “[iJssues raised as to those qualifications are
factual issues which the landowner is entitled to try, de novo,
before the circuit court in an evidentiary hearing,” 72 Haw. at
468, 622 P.2d at 956, and thus concludes that “Cravalho's hearsay
assertions regarding the (1]ess
qualification should have been disregarded by the (circuit)

 

and their alleged

 

court.”
b. The City's arguments:

‘The City argues that Cravalho’s affidavits “clearly
comply with the rules.” The City avers that “[a]s the person
directly involved in the process of reviewing lessees’
applications and evaluating the lessees’ qualifications,
Icravalho] is clearly the appropriate person to testify as to the
facts and materials reviewed and conclusions reached by [DCS]
with regard to lessees’ qualifications.” Thus, the City
concludes, Cravalho “obviously has personal knowledge of relevant
facts regarding the lessees and is competent to testify regarding
these facts” in compliance with HRCP Rule 56(e)-

c. The lessees’ arouments
‘The lessees argue that the circuit court correctly

concluded that Cravalho’s affidavits comply with HRCP Rule 56(e).

3
 

+ FOR PUBLICATION

 

The lessees contend that the Church is attempting “to contest the
very information that the City is required to collect about an
applicant in order to determine if the applicant is qualified to
purchase the fee” simple title to his or her unit. The lessees
insist that Cravalho was “directly involved in the process of
qualifying applicants based on [ROH ch.] 38/s express directives
to [the DCS] and pursuant to the rules promulgated to effectuate
the purpose of [ROH ch.] 38.” The lessees argue that since ROH
ch. 38 “specifically appoints (the DCS] to administer the
application process,” “Cravalho's efforts to review and qualify
applicants were in fact performed within the scope of her
official duties and are made upon her own ‘personal knowledge of
the matters testified herein,’ as stated in her general
affidavit.” The lessees urge that Cravalho’s affidavits were
based on the filed affidavits of the lessees and that it “is the
responsibility of the City officials, through the DCS, to review
the filed applications, then gather, compile and opine on the
ability of the applicants to qualify under the criteria
established in [ROH ch.] 38.”

‘The lessees argue that Cravaiho properly authenticated
the record pursuant to Hawai'i Rules of Evidence (HRE) Rule
901(a) and (b) (7). The lessees importune that “[elven if these
public records were somehow considered to be hearsay, they
clearly are admissible under any of several exceptions to the

hearsay rule, including [HRE Rules] 803(b) (6) [(1993 & Supp.

1”
 

FOR PUBLICATION *##
2002)**), 803(b) (8) [(1993),"*] and 803(b) (24) ((1993)"*).”
Finally, the lessees contend that the Church “has not
presented any evidence to demonstrate that Cravalho did not in
fact have the stated personal knowledge and competency to testify

to the matters within the scope of her official duties under [ROH

 

 

NRE Rule 803(b) (6) provides for the following exception to the
general exclusion of hearsay:

 

Records of regularly conducted activity. A menorandun, report,
Tecord, er data compilation, in any form, of acts, events,
Sonditions, opinions, oF diagnoses, made’ in the course of 2
Feguiarly conducted activity, at of near the tine of the acts,
Events, conditions, opinions, or diagnoses, as shown by the
Eestinony of the custodian or other qualified witness, or by
Gertification thet complios with [HRE RJule 902(11) of a statute
Eernitting certification, unless the sources of information or
Ether circumstances indicate lack of trustworthin

 

 

 

 

NRE Role 803(b) (8) provides for the following exception to the
generel exclusion of hearsay:

Public records and reports, Records, reports, statements, or date
Compilations, in any fore, of public offices or agencies, setting
forth (hi the activities of the office or agency, or (B) matte:
Ebservad pursuant to duty imposes by law as to which natters there
Mae a duty to report, excluding, however, in criminal cases
Ritters observed by police officers and other Lew enforcenent
Perscnnel, or (€) in civil proceedings and against the goverment
Tneriminal cases, factual findings resulting from an
Investigation mage pursuant to authority granted by law, unless
the sources of information of other circumstances indicate lack of
Srustworthiness-

 

 

 

3 URE Rule €03(b) (24) provides for the following exception to the
general exclusion of hearsay:

other exceptions. A statement not specifically covered by ai
Gxceptions in this paragraph (b) but having equivalent circu
Gustentecs of trustworthiness, if the court Getermines that (A) the
Statement 1s more probative on the point for which it is offered than
any seher evidence which the proponent can procure through reasonable
Gttorts, and. (b) the general purposes of these rules and the interests
Se Sustice will best be served by admission of the statenent into
Sridence. However, a statenent say not be adnitted under this exception
Shless the proponent of it makes Kitown to the adverse party sufficiently
Sh advance of the trial of hearing to provide the adverse party with =
fale opportunity to prepare to meet it, the proponents intention to

Efe statenent snd the particulars ef it, including the name and

of the declarant.

 

  

78
#4 FOR PUBLICATION

 

ch. 38) and pcs rules.”

2. Analysis of the applicable law

As a preliminary matter, we note that the circuit court
did not specifically rule in its June 30 or July 8, 2004 orders
regarding the admissibility of Cravalho’s affidavits, the only
two orders included in the circuit court’s September 21, 2004
RCP Rule 54(b) certification. Nevertheless, the Church raised
the issue in its memorandum in opposition to the lessees’ April
28, 2004 motion for partial sunmary judgment on the issue of the
qualifications of the individual lessees to purchase the fee
interest in their units pursuant to ROH ch. 38. Thus, the issue
is substantively within the circuit court's July 8, 2004 order.
Furthermore, the circuit court had orally concluded that “the
affidavit from the City was adequate.”

on April 29, 2004, Cravalho submitted affidavits in
support of each Adsiral Thomas unit, attesting to the
qualifications of the lessees. Pursuant to ROH § 38-1.7" and

1.8," the DcS was responsible for administering ROH ch. 38. In

 

2 ROK § 381.7 provides that “(t)he department of housing and
community developaent shall administer this chapter.”

 

ow § 38+

 

-8 provides 4

 

relevant part:

In addition to any other duty prescribed by law and in thie
chapter, the director of the department of housing end community,
development shall

ivi” ie responsible for enforcement of thi chapter and the
rules adopted pursuant to ity

 

it} " Factiitate the acquisition of all necessary property
Interests by the city through eminent domain
proceedings as provided in this chapter)

(continued. «.)

6
‘+44 FOR PUBLICATION +
s0 doing, Cravalho, as administrator of the leasehold conversion
program at DCS, gathered and reviewed the records of the lessees.

HRCP Rule 56(e) provides in relevant part that
“[s]upporting and opposing affidavits shall be made on personal
knowledge, shall set forth such facts as would be adnissible in
evidence, and shall show affirmatively that the affiant is
competent to testify to the matters stated therein.”

HRE Rule 801 (1993 & Supp. 2002) provides in relevant
pert that “‘{hJearsay’ is a statement, other than one made by the
declarant while testifying at the trial or hearing, offered in
evidence to prove the truth of the matter asserted.” HRE Rule
802 (1993) provides that “(hearsay is not admissible except as
provided by these rules, or by other rules prescribed by the
Hawaii suprene court, or by statute.”

“[it]e believe that HRCP Rule $6(e) provides substance
through form. It is the only way that a circuit court, amidst
all of its other duties, can efficiently and uniformly insure
that summary judgment is granted or not granted based upon
evidence that will be admissible at trial.” Pioneer Mill Co. vy
ow, 90 Hawai'i 289, 298, 978 P.24 727, 736 (1999).

In our view, the City and the lessees do offer
Cravalho's affidavits “to prove the truth of the matter
asserted,” to wit, that the lessees are qualified pursuant to ROH

ch. 38 to have their leasehold interests in their condominiun

 

 

(continued)
Ti) "So all things nece
the powers express!

thie chapter:

ry and convenient te carry out
‘conferred upon the director by

 

7
‘FOR PUBLICATION ###

units converted into fee simple. Therefore, Cravalho’s

affidavits violate the rule against hear:

 

y unless they fall
under one of the hearsay exceptions.

HRE Rule 803(b) (8) allows as an exception to the rule
against hearsay “data compilations, in any form, of public
offices or agencies, setting forth . . . (C) . . . factual
findings resulting from an investigation made pursuant to
authority granted by law, unless the sources of information or
other circumstances indicate lack of trustworthiness.”
Cravaiho’s affidavits m
803(b) (8) (C). Robbins v. Whelan, 653 F.2d 47, 50 (ist Cir.
1981). They are a data compilation of a public agency. The

 

t the “literal requirements” of HRE Rule

findings they “set forth are purely factual, and resulted from a
detailed inguiry that the agency undertook,” see ROH § 38-2.4,
“pursuant to its statutory authority,” see ROH § 38-1.8.

Robbins, 653 F.2d at 50; cf. Beech Aircraft Corp. v. Rainey, 488
U.S. 153, 168 (1988) (*(TIhe Language of the [Federal Rules of
Evidence Rule 803(8) (C)*] does not compel us to reject the
interpretation that ‘factual findings’ includes conclusions or
opinions that flow from factual investigation.”). “Because
public records are presumed to be trustworthy, ‘the burden of

proof concerning the admissibility of public records is on the

Party opposing their introduction.’” Columbia First Bank v.
United States, 58 Fed. Cl. 333, 339 (2003) (brackets and citation

omitted). Therefore, despite the Church’s contention that the

 

Federal Rules of Evidence Rule 603(8) (C) is textually equivatent
to HRE Rule 803(b) (8) ()=

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lessees “adduced no independent evidence that [they] were in fact
qualified,” it was not the lessees’ burden to do so. In any
event, the investigation’s “sources of information” and “other
circumstances,” such as the applicants’ affidavits, title
reports, and the City real property tax record establish
trustworthiness. See Fraley v. Bockwell Int'l] Corp., 470 F.
Supp. 1264, 1267 (S.D. Ohio 1979) (“Although the author relied in
part on witness’ statements, these statements were made by

declarants with first-hand knowledge of the facts.”). Based on

 

the foregoing, we hold that Cravalho's affidavits fall under the
“public records and reports” exception to the rule against
hearsay codified in HRE Rule 803(b) (8) (C).

Although we determine that Cravalho’s affidavits are
admissible under the exception to the hearsay rule in HRE Rule
8031b) (8) (C), we nonetheless hold that the affidavits lack
sufficient evidence to show that the lessees qualify under ali
the necessary terms of ROH ch. 38. See ROH § 38-2.4(a), supra
note 11.

Cravaiho's affidavits are not probative of the fact
that the lessees qualified at the time that their applications
were filed with the City, the date that we hold to be operative
in determining eligibility, see supra section I11.C.2., to the
extent that the lessees signed the applications significantly in
advance of their filing. By way of illustration, Cravalho
“determined” “that Unit 2901," owned by the lunsdens, was “held
by a qualified owner-occupant of The Admiral Thomas,” based upon

information submitted by the Lumsdens, i.e., their application

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signed August 31, 1995, and other documentation that Cravalho
compiled. In support of the requirement that the Lumsdens are
“owner-occupants” of Unit 2901, pursuant to ROH § 38-1.2,
Ceavalho's affidavit lists the following nine items, copies of
the first eight of which being attached as exhibits: (1) the
application, signed August 31, 1995, in which the Lumsdens state
that their residence is Unit 2901 and that they are bona fide
residents of the State of Hawai'i; (2) the Lumsdens’ August 31,
1995 affidavit stating that Unit 2901 is their principal place of
residence; (3) the Lumsdens’ leased fee interest purchase
contract, signed Septenber 19, 20017 (4) @ confirmation of terns,
obligations, covenants and conditions of leased fee interest
purchase contract, signed by the Lumsdens on August 5, 2002+ (5)
TWK grantor-grantee reports; (6) the apartment lease for Unit

2901, dated July 9, 1980, signed by the Lumsdens; (7) a

 

preliminary title report; (8) the City and County of Honolulu’ s
real property tax record and homeowner exemption for years 1988
through 2004; and (9) communications with the Lumsdens. Under

item (3), for example, Cravalho states that the leased fee

 

interest purchase contract “confirms that (the Lums

 

requirements under ROH [ch.] 38.” The leased fee intel
purchase contract states, anong definitions of the parties and
terms and other information pertaining to the purchase of the
unit, that the buyers are the Lunsdens “whose residence and
mailing address is 1221 Victoria Street, Apartment 2901,
Honolul, Hawaii 96814." (Capitalization altered.) Without
more, it is impossible to evaluate, based upon the leased fee

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FOR PUBLICATION
purchase contract alone, how the contract “confirms that [the
Lumsden) meet all requirements under ROH Chapter 38.”

Furthermore, the affidavits fail to demonstrate that
each condominium unit has served “as the individual’ s principal
place of residence for a peried of not less than one year
immediately prior to application for conversion” in accordance
with ROH § 38-1.2. The foregoing list in Cravalho's affidavit
attesting to the qualifications of the Lumsdens does not
establish that they resided in Unit 2901 for the year prior to
their application for conversion.

to larity, notwithstanding our conclusion that
Cravaiho's affidavits alone contain insufficient evidence for
this court to evaluate whether the applicants qualify under ROH
ch. 38, we do not find Cravalho’s affidavits to expressly lack

“trustworthiness.”

There is 2 manifest difference between
accepting the material contained within Cravalho’s affidavits as
true and lacking sufficient evidence to evaluate truthfulness.

3. Conclusion

Based on the foregoing, we hold that Cravaino’s
affidavits do not violate HRCP Rule 56(e) and that the circuit
court did not err in concluding that the affidavits were
admissible, Nevertheless, the only evidence adduced in the
circuit court as to the qualifications of the applicants was
found within Cravalho's affidavits, which we consider to be
insufficiently probative. Because this court is not obligated to
sift through a voluminous record to verify an appellant’s

inadequately documented contentions, see Mivamoto v. Lum, 104

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Hawai" 1, 11 n.14, 84 P.3d 509, 519 n.14 (2004); Traders Travel
Int/1, Inc. v. Howser, 69 Haw. 609, 616, 753 P.2d 244, 248
(1988), it remains within the province of the circuit court to
determine the ROH ch. 38 qualification of the lessees. Hence, we
(2) vacate the July 8, 2005 order of the circuit court to the
extent that it ruled that there were not twenty-five qualified
applicants throughout the proceedings to acquire the fee and (2)
vemand for proceedings consistent with this opinion, including a
determination as to whether there are the requisite number of
qualified applicants, their qualifications to be determined from
the date that their applications were filed with the City, and,
Af so, to consider evidence of the fair market value of the

leased fee interest being acquired.

IV. CONCLUSION
In sum, we hold (1) that ROH ch. 38 does not provide an

se-to-fee conversion of “mixed-use” buildings,

 

exception to 1
(2) that RLUIPA does not provide a defense to condemnation of the
Admiral Thomas condominium complex units oned in fee simple by
the Church, (3) that the City Council did not impermissibly
delegate the poxer of eminent domain to the Department of
Community Services, (4) that Cravalho’s affidavits do not violate
HRCP Rule 56(e), and (5) that there are genuine issues of
material fact regarding the qualifications of individual lessees
to acquire the fee pursuant to ROH ch. 38.

Accordingly, we affirm the circuit court's grant of
sunmary judgment in favor of the City and lessees, which ruled

that RLUIPA is not applicable as a defense to condemnation and

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that the City Council did not improperly delegate the pover of
eminent domain. However, we reverse the circuit court's ruling
that ROH ch, 38 is inapplicable to the Admiral Thomas condominium
complex, inasmuch as there are no genuine issues of material fact
fas to whether that the Admiral Thomas is a residential
condominium property regime project created under HRS ch. 514A.
In addition, we vacate the circuit court’s denial of partial
summary judgment based on its ruling that there were not
qualified applicants for at least twenty-five units and remand
for further proceedings consistent with this opinion to determine
whether there are sufficient qualified units for conversion to
fee simple and, if 0, to consider evidence of the fair market
value of the leased fee interest being acquired.

John P, Manaut, of Carlsmith
Ball LLP (James H. Case and

defendant /appellants/cross~

appellees Janes M. Sherman, MAM aver
epals
Lex R. Smith, of Kobayashi, Aecarate Nall

Sugita & Goda (Lex R. smith
and Ann C. Teranishi of

Kobayashi, Sugita & Goda Gene. Bede Oe:

and Carrie Okinaga,

Corporation Counsel and Winston K.

©. Wong, Deputy Corporation

Counselon the briefs) for

plaintift-appellee/cross~

Eppel lant /eross-appel lee

Gity and County of Honolulu

 

vames K. Mee of Ashford &
Wriston (James K. Mee, Rosemary
T. Fazio, and Kevin W. Herring
of Ashford & Wriston, on the
briefs) for defendant/appellee/
cross-appellee/cross-appellant
First United Methedist Church

83