Title: City and County of Honolulu v. Hsiung. S.Ct. Order of Correction, filed 03/23/2006 [pdf].

State: hawaii

Issuer: Hawaii Supreme Court

Document:

«© * FOR PUBLICATION ***

 

 

 

 

InN THE SUPREME COURT OF THE STATE OF HAWAT'r 3
<- 000 === 3
e F
c
on JO. _03-1-0361 2 °
crty ano cowry oF HONOLGEY, a minicipal corporatign
Of che seate of Hawai's, Plaineife-Appellee/cross! = &

 

Appellant /Cross-Appellee,

KATHLEEN HSTUNG; JAMES 2, SHAW, Trustee under that
certain James B. Shaw Revocable Living Trust Agreement
‘dated June 4, 1990; RUTH G, RAND, Trustee under that
certain unrecorded Ruth G. Rand Revocable Trust
Agreement dated May 30, 1986; DEBORAH DARLENE DUPIRS-
NELSON; ROBERT LEE DUPIRE-NELSON; IRA NAGEL and DOROTHY
NAGEL, Trustees of the Dorothy Nagel Revocable Living
‘Trust under that certain unrecorded Trust Agreenent
dated November 28, 1989; BARBARA WEI LAU; JENNIFER
HWEI-MAY LAU; DAN H. DEVANEY, III, Trustee of the Dan
H. Devaney, IIT Revocable Living Trust dated October 7,
1993; CEDRIC CHOI; PATRICIA CHOI; MARY ILMA COSTIGAN
ANDERSON, Trustee under Declaration of Trust dated May
25, 1984; EDWARD BURNETT KEYES, JR.; KATHARINE ROGERS
RANDALL, Successor Trustee of the Kennedy Randall, Jr
‘Trust, under that certain unrecorded Trust Agreement
dated August 6, 1985; GERALD HENRY CUTTER; MILDRED P.
AULT, Trustee under the Mildred P. Ault Revocable Trust
dated July 23, 1987, as amended in full by First
Amendment dated March 28, 1990; MARY H. SHELTON,
‘trustee under that certain unrecorded Charles 0.
shelton, dr. and Mary H. Shelton Joint Living Trust
Agreement dated September 20, 1993; WALLACE DAVID 100;
MARJORIE ANNE LOO; LOLA GEBAUER, Successor Trustee of
the Paul W. Gebauer, unrecorded Paul W. Gebauer
Revocable Trust Agreement dated April 28, 1980, and
subsequently amended in ite entirety by an Amendment
Gated December 8, 1982, and a Second Amendment dated
December 26, 1997; LOLA GEBAUER, as Trustee under an
unrecorded Lola Gebauer Revocable Trust Agreenent dated
‘April 28, 1980, and subsequently amended in its
entirety by an Amendment dated December 8, 1982, and a
‘Second Amendment dated December 26, 1997; WILLIAM C.
DIXON, JR. AND PATRICIA DIXON, as Trustees under
certain unrecorded Dixon 1996 Trust dated November 21,
996; BRUCE D. DUGSTAD, Successor Trustee under that
certain Revocable Living Trust Agreement dated August

 

 

 
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a

27, 1980; JEAN MARIE MOREL; JEANNETTE J. WARREN, as
‘Trustee under unrecorded Revocable Living Trust
Agreement dated August 19, 1987, as amended; MARGUERITS
ELIZABETH GONSALVES; HARRISON CLIFFORD GONSALVES;
DANIEL YOUNG LEE; JULIET OK LEE; STEVEN JON BERMAN;
HEIDI YUEN BERMAN; GEORGE EDWARD ISAACS; SHIRLEY MAE
ISAACS; NORMA ANN STILWELL ;FIRST HAWAIIAN BANK, PAUL
€.T. 400, and VIOLET S.W. 100, Co-Trustees of the John
Sdseph’ Ryan and Marie Ryan Revocable Living Trust,
established by that certain unrecorded Trust Agreement
Gated August 6, 1991, as amended and restated by
instrument dated February 16, 1993, and as further
amended by instruments dated Novenber 10, 1993, October
Ta, 1996 and March 30, 1999; DEREK MICHAEL POAG; ERIK
STERLING; ETHEL H. BIRD, widow, as Trustee under an
unrecorded Revocable Trust Agreement dated September 3,
1987; GEORGE WM. SMITH and JULIA SMITH, as Co-Trustees
unde the Geroge and Julia Smith Revocable Trust, dated
March 10, 1987, Defendants-Appellants/Cross-Appellees,

 

 

and

JAMES DOUGLAS KEAUHOU ING, CONSTANCE HEE LAU, CHARLES
NAINOA THOMPSON, DIANE JOYCE PLOTTS, and ROBERT KALANT
UICHT KIHUVE, Trustees under the Will and of the Estate
‘Of Bernice Pauahi Bishop, deceased, Defendants-
Appellees /Cross-Appellees/Cross-Appellants,

 

and

GERMAINE HOPE BRENNAN, Trustee under that certain
unrecorded Revocable Trust of Germaine Hope Brennan
‘dated August 28, 1981, as amended; GERMAINE HOPE
BRENNAN, Successor of Trustee under that certain
unrecorded Revocable Trust of Edward Brennan dated
August 28, 1981, as amended; HENRY PAUL WEBER, Trustee
under unrecorded Revocable Living Trust Agreement dated
January 12, 1979, as amended, and CHARLES COOK
SPAULDING, as Trustee under that certain unrecorded
instrument known as The Spaulding 1993 Revocable Trust;
SAKIKO KISHINOTO, Truatee under that certain unrecorded
‘Trust Agreement known as The Sakiko Kishimoto Trust
dated January 12, 1989; JOHN DOES 1-200, MARY DOE 1-
200; DOE PARTNERSHIP 1-100; DOE CORPORATION 1-100; DOB

 

 

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

 
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cI. NO. 2-1-2955
JAMES DOUGLAS KEAUHOU ING, CONSTANCE HEE LAU, CHARLES
NAINOA THOMPSON, DIANE JOYCE PLOTTS, and ROBERT KALANT
UICHI KIHUNE, in their capacity as Trustees under the
Will and of the Estate of Bernice Pauahi Bishop,
deceased, and not in their individual capacitie:
Plaintiffs-appellants,

 

CITY AND COUNTY OF HONOLULU; DEPARTMENT OF
COMMUNITY SERVICES, CITY AND COUNTY OF HONOLULU,
Defendants-Appellees,
and

JOHN DOES 1-30; MARY DOES 1-30; DOE PARTNERSHIPS 1-30;
‘and CORPORATIONS AND OTHER ENTITIES 1-20, Defendants.

2).

No. 26544

APPEAL FROM FIRST CIRCUIT COURT
(CIV. Nos. 03-1-0361 and 02-1-2955)

DECEMBER 8, 2005

MOON, C.J., LEVINSON, ACOBA, AND DUFFY, J3.;
‘AND CIRCUIT JUDGE PERKINS, IN PLACE
OF NAKAYAMA, J., RECUSED
OPINION OF THE COURT BY MOON, ¢.9.

‘The instant appeale involve a condennation action
initiated by the City and County of Honolulu (the City) and a
related declaratory judgment action initiated by the trustees
under the will and of the estate of Bernice Pauahi Bishop
(hereinafter, the Trustees]. The condemnation action was

initiated by the City to acquire the fee interest in the Kahala

 
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Beach residential condominium development (The Kahala Beach) in
order to convey fee simple title to various owners of leasehold
interests in The Kahala Beach [hereinafter, the Applicants or
lessees]. The Trustees brought the declaratory judgment action
seeking, inter alia, an injunction prohibiting the City from
exercising ite power of eminent domain over The Kahala Beach and
a judgment declaring that, as applied to The Kahala Beach,
Revised Ordinances of Honolulu (ROH) chapter 38 and the City’s
condemnation efforts were illegal and unconstitutional

on appeal, the City and the Applicants (hereinafter,
collectively, Appellants] claim that the Circuit Court of the
First Circuit, the Honorable Béen Elizabeth Hifo presiding, erred
in granting summary judgment in favor of the Trustees in the
condemnation action. Generally, Appellants argue that the court
erred in ruling that the City did not have the requisite twenty-

five qualified applicants necessary to initiate and maintain the

 

condemnation proceedings. The Trustees cross-appeal, claiming
that, although the circuit court ruled in their favor, the court
erred in its interpretatione of ROH chapter 38. With respect to

contend that the

 

the declaratory judgment action, the Trust
circuit court erred in dismissing their claims as moot. For the
following reasons, we affirm the judgments of the circuit court.
However, we remand the instant case for findings of fact and

conclusions of law on the award of attorneys’ fees.

 
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SSS
I. BACKGROUND

‘The Condemation Action

1. The City’s Initial and amended Complaints

 

On February 14, 2003, the City filed a complaint in the
Circuit Court of the First Circuit againet the Trustees to
condemn certain leased fee interests in Kahala Seach pursuant to
Hawai'i Revised Statutes (HRS) § 101-13 (1993). The City filed
an amended complaint on March 5, 2003.

On October 10, 2003, the City filed a motion to amend
its amended complaint and, subsequently, filed an amended motion
to amend on October 31, 2003. In its amended motion, the city
requested leave to add additional applicants to the condemnation
proceeding, specifically, Ethel H. Bird (Unit 252) and George WM.
and Julia Smith (Unit 346).

‘The City’s amended motion was heard on November 19,
2003, With respect to Bird and the Smiths, the court ruled:

50, T grant the Motion to Amend by adding wird and the
Smiths. "r can see no reason at all to leave them outs Ze
doesn’t make any sense to ne that the City... could find
people who would be eligible either under the ‘condominium or
Ehet the State of houselote and then say ob, well, T got to
wait until I get another 25 of you to bring it. ‘That is
erazy and certainly inconsistent with the purpose of the law
Which was C0 put fee simple property in the hands of such

‘But, Z do not chink that those people can be used
against of in the condemnation to constitute the minimin
unber that had to be there and remain throughout,

I could imagine a situation where the duprene Court
would say, certainly not the facts, that if you hag 30 and
all 30 are qualitied and you filed the complaine and then
you added five sore, you had 35, and, then something
happened and after you had 35 qualities, you fell below the
28." Maybe then they would count the added. But, that's net
the facts here. So, I don't need to speculate as to whats
what that =~ whecher ir wae -- that that would Reppen or

 

 

 

 

 
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A221 tm saying 48 I'm granting the motion to add
‘and Julla smith and the Bird applicant with the
Gnderscanding that they cannot be used to constitute the
Sinmun 25 chat under (ious, Pin, & Dev. Corp. v. Takabuki,
2 Havas 172, 921 P.2d 92 (2996),] has to resain
throughout.

‘And, further, {t dosen't make sense to ne that the
fact that this case even if 1 were wrong and you could adé
then as of today, if, as of yesterday, they weren't 25 then
Gnder Takabuks the aithority has to terminate proceeding
Teiel

 

 

 

 

cn December 22, 2003, the Applicants filed a motion for
reconsideration arguing, inter alia: (1) this court’s opinion in
Takabuki did not require that the City maintain the minimum
number of applicants solely out of the group of lessees whose
unite were originally designated; (2) a liberal construction of
ROH chapter 38 indicates that additional qualified applicants
should be counted toward the required statutory minimum; and, (3)
based on the language of Rules for Residential Condominium
cooperative and Planned Development Leasehold Conversion
(hereinafter, DCs Rules] § 2-11(d) (1) (2000), Bird and the Smiths
should be considered part of the original designation. The City
joined in this motion. After a hearing on January 9, 2004, the
circuit court ruled that “this Court, after reconsideration and
upon further deliberation, adheres to its earlier ruling that

Applicants Bird and Smith [c]annot [cJount [t]oward the

 

[rlequired [sJtatutory [m)inimum [t]wenty-[flive [alpplicante for
[lease-to-{£]ee [clonversion in [p]laintiff City and County of

Honolulu’s Amended Motion to Amend filed on October 31, 2003.*

 
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2. The City’s Motion for Partial Summary Judgment
on October 3, 2003, the City moved for partial sunmary

judgment, arguing, inter alia:

The City has properly designated the Kahala Beach and
determined that the Applicants] have satisfied ©
qualifications for purchase of thelr respective leased fee
interest purcuant to 20H Chapter 38 and the Amended Rules
for Residential Condominium, Cooperative and Planned
Development Leasehold Conversion ("DCS Rules) -

Furthermore, under ROH § 38-2-4/(c) and DCS Rulon $5 2-2,
5, a-7, 1-8, 4-3, 2-3, 2-4, 2-5, 210, 2-13, and 2-18, the
City has determined that the owner-occupant applicants have
satiefied the qualifications for purchase of their
Fespective percentage in the leased fee interest under ROH
$°36-2.4 and oc8 Rules 6 2-4

   

 

 

‘The Applicants joined in the City’s motion.' After a hearing on
October 22, 2003, the circuit court denied the city’s motion,

finding, inter alia:

2. The Court finda, upon the record presently before the
court, that the following Défendant Lessees are qualified under
tthe requirements set forth in ROM Ch. 38: (1) Mary Tima Cost
Anderson, Unit 432; (2) Steven and Heidi Berman, Unit 172) (3),
Germaine H. Brennan, Unit 211; (4) Cedric and Patricia choy, Unit
427; (5) Gerald H. Cutter, Unit 153) (6) Dan Devany, 111, Unie
228) (7) Lola Gebaver, Unit 345; (8) Harrigon c. and Marguerite
Gonsalves, Unit 164; (9) Rathieen Hedung, Unit 303; (10) George B.
and Shirley M. Isaacs, Unit 272; (11) Edward B. Keyes, Jr., Unit
442; (12) Sakiko Kishinoto, Unit 448; (13) Barbare and Jennifer
Lau, Unit 224; (14) Wallace and Marjorie Loo, Unit 250;, (25)
Margaret L. Nontgonery, Usit 450; (16) Jean ¥. Morrell, Unit 451;
(27) Dorothy and Ira Nagel, Unit 11) (18) Ruch G. Rand, Unie 305;
(23) Marie Ryan, Unit 372;'(20) Janes shaw, Unit 304; (21) Mary H
Shelton, Unit 248) and. (22) Norma seiliweli, Unit 266

3." The Court finds that Mildred P.‘ault (Unit 242)
ie not qualified, because she owned fee simple property,
suitable for residential purposes within the City and County
Of Honoluls that she quitclaimed for no consideration £0
Felatives at the tine she applied.

4. Tee Court finds that Willian C. Dixon, Jr., and
Patricia Dixon (Unit 441) are not qualified, because they
owned fee simple property suitable for residential purposes
within the city and County of Honoluls that they quiteraimed
for no consideration to relatives shortly before the tine
they applied.

   

 

 

 

 

 

 

 

Te should be noted chat the Trustees algo filed motions for partial
summary Judgment on October 3, 2003. fog section T-A.3. intys

 

7
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ee

5. The Court finds that there is a genuine issue of
material fact a
Dupire-Nelson, also known
255) Scet che qualification requirements of ROH chapter 3

G. he Court finds that Daniel Y. and Juliet Le
(unis 165) are not qualified, because they did not meet the
one-year residency Fequirenent under FOH § 36-1.2

7, “tne Coure finds that Derek Poag (Unit 470) ie
not qualified becsuse he and nis wife om fee sinple
Feoidential property within the City and County of Nonolutu,

Go The Court finds that fatherine R. Randall (Unit
148) is not qualified Because she has rented out her unit
2nd thus hae not complied with the requirenent under ROH
$301.2 that the applicant retain complete possessory
Eontrei of the premises during the period pending legal
proceedings to acquire the fee

3. o the court finde that Charles Spalding (Unit 432)
has sold bie unit and therefore no longer meets the
qualification requirenente of chapter 38

io. The Court finde that Jeannette J. Warren (Unit
4453) io not qualified because she has rented out her unit
$a’ chue nae not complied with the requirement under ROH
E'get,2 chat che applicant retain complete possessory,
fontroi of the premises during the period pending legal
proceedings to acquire the fee.

Tic The Court finds that Menry Paul Weber (Unit 230)
has sold his une to Erik sterling, and that Brik Sterling
may substitute for Henry Paul Weber if he otherwise meets
ChE qualification requiresents of Chapter 38

   

 

 

 

 

 

 

 

 

 

on Decenber 22, 2003, the Applicants filed motions
requesting that the circuit court reconsider its findings that
Ault, the Dixons, the Lees, Poag, Randall, and Warren were not
qualified to participate in the condennation proceedings. The

Applicants argued: (1) the Lees were qualified to participate in

 

the condemnation proceedings based on DCS Rules § 2-14 (2000)
(2) the disqualification of Ault, the Dixons, and Poag was
inconsistent with the language and purpose of ROH chapter 38; and
(3) Randall and Warren were qualified to participate in the
condemnation proceedings based on DCS Rules § 1-2 (2000),

allowing exceptions to the residency requirenent for serious

 

+ cived in futi, intra.

 
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illness, employment requirements, military obligations, and
educational sabbatical. The City joined in these motions.

Following a hearing on January 3, 2004, the circuit
court granted in part and denied in part the Applicants’ motions
for reconsideration. The motion was granted in part “in that
[the court] reconsidered ite earlier ruling[s]” on the City’s
motions for partial sunmary judgment. However, ‘after
reconsideration and upon further deliberation,” the court adhered
to its earlier rulings disqualifying Ault, the Dixons, the Lees,
Poag, Randall, and Warren.

The Trustees’ October 3, 2003 Motions for Partial
Summary Judgment

   

As previously noted, the Trustees filed three motions
for partial sumary judgment on October 3, 2003. The Trustees
argued that they were entitled to summary judgment because:

(a) the Des Rules § 2-14, which allows the practice of “tacking,”
was inconsistent with ROH chapter 36; (2) lessees Henry Paul
Weber and Charles Cooke Spalding were not qualified to
participate in the condemation proceedings; (3) the
administrative rule allowing exceptions to the owner-occupant
requirements was inconsistent with ROH chapter 38; and (4) there
were fewer than 25 qualified applicants. The Trustees’ three
motions were heard on October 22, 2003, along with the city’s

motions for partial summary judgment.

 
 

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he stacking”

 

pes Rules § 2-14 provides in full:

Any peraon who acquires the lease of an applicant may be
Substituted for the withdrawing applicant, provided that the
tubstituted applicant neets all the applicable requirements
Sf chapter 28, ROH and these rules, except the requirenent
that che substituted applicant be a resident of the
condoninsum unit for a continuous and uninterrupted period
of one year prior to the application. If the substitution
Secure After the conmencenent of the condennation action, it
Shall require the consent of the court. The director shall
Sllow a substituted applicant a reasonable tine to meet all
the requirements for final approval. In the event there is
ho application for substitution within 60 days following &
Withdrawal, the director shall request the corporation
Counsel to dienise the withdrawing applicant ase party to
the condemnation act ice

 

 

 

 

‘The Trustees argued that DCS Rules § 2-14 “allows an applicant

who has satisfied the requirements to sell their position in the

Litigation to someone who would not otherwise meet the

requirements of being an ‘owner occupant.‘ Thus, the Trustees

claimed that DCS Rules § 2-14 directly conflicted with ROH

chapter 38. The Trustees further explained:

ruling:

‘This rule, in effect, sanctions “tacking on* to the previous
Gmner-oceupant without having lived in the unit for the
feguisite time period co become an owner-occupant under (ROH
Here, a number of che litigants are people who
jacked on.! “they have not met the requirements of ROM
f38-2.2, and in sone cases, they aid not even live in
"Cae the tine they applied.

     

" motion, orally

 

The circuit court denied the Trust

And ven I look at the ordinance, it’s silent on
tacking. To that extent, it’s not clear. It’s ambiguous.

‘Rhen { look at the rule, we're talking rule 2-14, the
court understands the rule to'mean, because it says I thine
Clearly by ite plain words, and i'm quoting it ae follows,
ny pereon who acquires the lease of an applicant may be
fubetituted for the withdrawing applicant provided that the
Substituted applicant meets all the applicable requiresents
Of chapter 30 FOR in these cules, except for the requirement
that the substituted applicant be a resident of the
condorinivn for a continuous and uninterrupted period of one
year prior to the application.

 

   

 

 

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So to me thet means, obviously, that if the person who
was the applicant wae an Omner-occupant and had resided
there continuously for one year before the date of the
application, and thereafter sells the condominium, then the
peraon who can be substituted, who obviously couldn't
posaibly have lived there for one year Before the date of
bubseieution because they're just purchasing, gete the
benefit of the tame that the original applicant hed been
there.

‘That does not mean that a person can be an applicant
and have lived there only two sohths and get the benefit of
the 10 or 20 yeare that the person they bought it from was
there, unless the person they Bought it from was the
original applicant’ for the applicable condemnation
proceeding.

Go what Z am saying is that 1 do not think the rule ie
inconsistent with the ordinance, and that x do think the
rule ig narrow. And, therefore, you can only tack if you
Eske after the peraon who lived there, for at least one,
year, had alveatly nade an application.

And as to the argument that it sakes a substantive
digterence, the Court finds that the rule does not create 2
Substantive difference. Because when you look at whether
there were 25, it’s 25 at the date of the filing of the
condensation proceeding, ie 25, I ought say, and the date
of determination.

‘Shu. so you look at 25, and sf you -- always still have
to have 25. And if it happene that you make 25, and then
one of those 25 later selia, ‘the person to whom they sold
Gets the benefit of the original 25. But I don't see how
Ghat isa substantive difference to the landlord, because
the landlord ae the fee omer can always dispute that the
original applicant wasn’t there for the 12 year period.

0 this notion is denied. But the Court will apply
Ate interpretation to the undisputed facts later.

 

 

 

 

 

The court's written order was filed on December 5, 2003, stating
in pertinent part that, “als [DCS] Rules § 2-14 allows tacking
Af the substituted applicant substitutes in for a withdrawing
original applicant for the applicable condemnation proceeding who

has lived in the unit for at least one year, the Court finds that

 

the rule is narrow and not inconsistent with ROH Chapter 39,”
b. lessees Webs adie
The Trustees moved for partial summary judgment against
lessees Keber and Spalding and for the dismissal of their units

from the condemnation proceeding because both applicants had sold

wane
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their interests in The Kahala Beach. The circuit court granted
the Trustees’ motion as to the individual lessees and denied the
motion as te the two units. The court essentially ruled that the
named applicants were no longer part of the proceedings and could
not be counted towarde the minimum number of applicants necessary
to proceed, but that their units could remain in the condemnation
action subject to subsequent application of its ruling on the
issue of tacking. The court’s ruling was expressly made “without
prejudice to hear[ing] the City’s pending Motion to Amend the
First Amended Complaint consistent with the Court's
interpretation regarding tacking.”

©. exceptions to the owner-occupant requirements

Both ROH § 38-1.2 and DCS Rules § 1-2 define “owner-

of qualifying to participate in

 

occupant” for purpo!
condemnation proceedings under ROH chapter 38. The definition
contained in the administrative rule allows the Department of
Housing and Community Development (hereinafter, the department] ,
nee ROH § 38-1.2; DCS Rules § 1-2 (2000), to consider exceptions
to the occupancy requirements for participation in condemnation

argued that the definition of ‘owner-

 

proceedings. ‘The Truste
occupant” in DCS Rules § 1-2 conflicted with ROH § 38-1.2.
‘The circuit court orally ruled:

Again, the Court is compelled wherever possible to
reconcile the rule with the ordinance, apd T believe that
thie part of the rule which deals with exceptions modifies
the principal place of residence language of the ordinance.

‘And, @= Mr. smith has argued, 1 (alo not believe, for
an example, If you're in the hospital, surgery, or Ina bed
Accident, or you're in the hospital and then you're

 

w12-
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transferred to Retab Hospital of the Pacific, or something
{Ike thats that that would deprive you of claiming that your
shold condominium i8 your principal place of residence,
Nor dot believe, ag Mr. Smith has argued, that if
you're assigned to Iraq that that means your principal place
Teicl is ia iraq, or wherever elee the military

 

 

E do'noe think that those aforesaid exceptions
contained in the rule nodify che omner-pare of the owner-
Scoupant definition and do not in any way create an
Shception for or controvert the ordinance which makes it
lear that you have to have complete possessory control and
That you donot have complate possessory control of the
preniges if the individual vents, leases, or assigns the
Rremises for any period of time to any other perecn in whose
ame legal title is not held.

‘and that is ow f reconcile the rule with the statute.
‘merefore, a motion for partial summary judgnent on the
[eaue of ad hoe exceptions i denied in pare, and co the
entent that it wae argued that the exceptions could be uced
ES'fbvalidate che ordinance and the rule's own language that
you have to have complete possessory control end you do not
YP'you rent, lease, or assign, it is granted.

 

 

 

‘me court's written order was filed on December 5, 2003 and

stated in pertinent part:

 

2. ‘the Department of Community Services may grant
ceptions to Revised Ordinances of Honolulu (2990) (“ROH”)
Section 38-3.2°8 cecupancy requirenent for serious i1iness,
Ceployment requirenents, milizary obligations, and
SGucavional sabbatical, ae provided under mule 1-2 of the
Rules for Residential Congominium, Cooperative and Planned
Development Leasehold Conversion, as amended ("Rules"). The
Getinitions of "owmer-cecupane” Contained in Rule 1-2 and
Roe g 382.2 can be veconciled. Rule 1-2's exception
fodifies the principal piace of residence language of ROH
Pe.

2. Applicants granted an exception to the occupan
requizenent Leder Rule 1-2 Of the Rules must still comply
With the other qualification requirenente of Revised
Ordinances of Honoluly {18 38-1-2, and may not rent, 1
Sr assign their unit for any period of tite to any other
person in shove name legal title is net held.

 

 

 

 

 

 

December 1, 2003 Motion for Summary

 

on Decenber 1, 2003, the Trustees moved for summary
judgment, arguing that there were “qualified lessee applicants

for less than 25 units.”

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on December 19, 2003, the Trustees filed a supplement
to their motion for summary judgment. The Trustees (1) indicated
that lessees Brennan and Kishimoto had withdrawn from the
condennation proceeding? an (2) argued that sterling was not
qualified to participate in the condemation proceeding because
his Kahala Beach unit was not his principal place of residence
and he was not a bona fide resident of the City and County of
Honolulu, as required by ROH §§ 38-1.2 and 38-2.4, respectively.
‘The Trustees submitted a copy of the assignnent of lease from the
unit’s prior owner to Sterling, which indicated that it was
executed by Sterling in California, and other documents in
support of their contention that Sterling was a resident of Los
Angeles.

The city argued that the record denonstrated that
Sterling was a qualified lease applicant, citing, inter alia,
sterling’s application to participate in the condemnation

proceedinge and supporting affidavit, which both indicate that

 

Sterling was “a bona fide resident of the State of Hawai'i, whose
principal residence is [Unit 230]." The City also argued that
the documents submitted by the Trustees did not demonstrate that
Sterling was not a resident of the City and County of Honolulu.
A hearing was held on January 9, 2004, during which
counsel for the City argued, inter alia, that the timing of when

applicants dropped out or were added to the condemnation

 

> a atipulation to diemiee Kishimoto and Brennan was filed on Decenter
32, 2003.

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a
proceedings affected the analysis of whether there were 25

applicants at the time the condemnation action was: initiated and
whether the minimum number wae maintained throughout the
proceedings. The court indicated that it dened Brennan not to
have been qualified from the beginning. At the conclusion of the
hearing, the circuit court granted the Trustees’ motion for
eunmary judgment, The court's March 4, 2004 written order

includes the following:

1. The Court finds that the following Defendant
S tico wits Ault, the Dixons, the Lees, Poag,
Randell, Spalding, and Warren)) are not qualified for the
Rasone ‘previously stated in the Court's Order Denying
Biaineie? city and County of Honolulu’s Motion for Partial
Euanaty Judgment Filed on October 3, 2003, filed on December
5, 2003:

Tiche order incorporates nearly verbatim Paragraphs 3, 4, 7,
S,°5S Sna'io of the Decenber §, 2003 order, quoted supra)!

ght 10.86 court finds that Defendant Lessee Erik
sterling (unit 230) ie not qualified because he did not live
{S*hls Unie as hie peincipal place of residence continuously
afer ne applied, and bectuse he was not a bona fide
eldent ofthe City and county of Nonolulu at the tine he
applied and afterward.

3. Defendant Lessee Gernain Hope Brennan (Unit 222)
has, by stipulation of the parties, withdrawn from the
Uehdemiation. For purposes of this motion, the Court must
ftke as undioputed the following facts set forth in the
Declaration of Paul §. Aoki, dated Novenber 14, 2003,
Because Mrs. Brennan did not provide the discovery ordered
By this Court within the tise frame set by the Court in its
Older Granting in Part and Denying in Part Defendant
Yanheceha Schools’ Motion to Dismiss Defendant Germaine Hope
Brennan ae a Party in Civil No. 03-1-0361-02 Piled on
October 29,2003, filed on December 26, 2003:

 

 

 

 

 

 

 

  

on the basis of these undisputed facts, the Court finds that
Seeendant Lessee Oernaine Hope Brennan is not qualified
Decause she has not lived sm her unit as her principal
Fesidence continously after she applied, and because she is
Hot a bona fide resident of the City and County of Honolulu.
3°" “Defendant Lessee Sakiko Kishimoto (Unit 445)
has, by stipulation of the parties, withdraw from the
UShdendation, “For purposes of this motion, the Court cannot
Sind that Defendant Lessee Saxiko Kishimoto is qualified,
Because she did not provide the discovery ordered by thie
Court in ies Order Denying Defendant Lessees’ Motion for
Frotective Order Filed On August 21, 2003, filed on October
te, 2003.

 

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5. the Court finds that trom and after october 11,
2002, the date of designation, there have not cont invous
Been qualified lessees for at Least 25 unite

‘6. The Court holds, in light of Housing Finance and
Development Corporation v. Takabuki, 82 Hawas 172, 922
P.2a 92 (2996), coon v. Clty and County of Honolulu, 38
Hawat'l 233, 47 P.3d 348 (2002), and City and County of
Honolulu v. Zag, 100 Hawai'i 162, 58 P.34 1225 (2002), that.
there must be qualified lessees for at least 25 unite
Continuously ehvoughout the legal proceedings to acquire the
Fee. If the class of qualified leseee spplicante whose
unite have been designated fails below the statucory sinimun
nunber of 25 units, for shatever reason, che proceedings:
Sune be terminated:

7." “hecordingly, the court holds that this
condennation action mst be terminated, and (the Trust
{e"encitied co summary judgment

 

 

 

 

 

 

 

5. The Trustee’s Motion for an Award of Damages

on March 9, 2004, the Trustees filed a “Motion for an

order Determining Amount of Danages Incurred by Movants Pursuant
to [HRS § 101-27]. The Trustees asserted that they were

2 from the City in accordance with

 

entitled to recover “$506,121.
the Summary Judgment Order for the period through and including
January 31, 2004, and additional anounts thereafter pursuant to a
supplemental filing,” pursuant to HRS § 101-27 (1993), quoted
infza.

In opposition to the Trustess’s motion for an award of
damages, the City argued that, under HRS § 101-27, the Trustees
were entitled only to reasonable fees and costs and that the
Trustees failed to establish the reasonableness of their
requested award. The Lessees joined in the City’s opposition.

After a hearing on April 7, 2004, the circuit court

granted in part and denied in part the Trustee’s motion, ruling:

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‘The Court partially denies the Notion and
‘a matter of law the following cost and expen:

   
     

(a) Bepert witnes Sn the amount of
S65, 198.70.
(b) Computer research fees in the anount of
$045.05.
(c) Hearing exhibits in che anount of $548.43.
2. the Court partially granta the Notion as it
applies ‘to the renaining amounts requested by [the
Trustees], and roles that (the Trustees] shall be entitled
fo reiabursenent of the following:
(s) Attorneys’ fees and general excise tax in
The amount Of $440,069.06
()  Goste and expenses’ in the ancunt of
519,030-49.

 

 

Final Judgment

 

Final judgment in favor of the Trustees was filed on

 

April 28, 2004. The Applicants and the City timely appealed.

 

The Trustees filed a timely notice of cross-appeal.
Bo 3

on December 18, 2002, the Trustees filed a complaint in
first cizcuit court against the City and the department. The
Trustees sought the following relief: (1) an injunction
prohibiting the City from exercising its power of eminent domain
in regard to The Kahala Beach; (2) entry of judgment declaring
that the City's efforte to condemn The Kahala Beach were
unconstitutional and illegal; (3) entry of judgment declaring
that ROH chapter 38 ie illegal and unconstitutional as applied to
‘The Kahala Beach; (4) reimbursement for actual expenses incurred
by the Trustees as a result of the City’s designation of The
Kehala Beach for condemnation; (5) an award of damages in an
amount proven at trial; (6) an award of attorneys’ fees and

costs; and (7) any further relief deemed just and equitable by

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the court. On dune 4, 2003 the declaratory judgment action was
consolidated with the condemnation action.

on January 22, 2004, following the award of summary
judgment in favor of the Trustees in the condemnation action, the
City moved to dismies the Trustees’ claims in the declaratory
judgment action as moot or, in the alternative for judgment on
the pleadinge in favor of the City. The Trustees did not
expressly oppose the City’s motion, but filed a *Memorandun in
Response,” incorporating by reference the evidence submitted and
arguments made in prior motions filed in the condemnation case.

During a hearing on January 30, 2004, the court
accepted a stipulation by the parties that, for the purpose of
the consolidated actions, the following was deemed proved:

2. the transcript of excerpts of the Honolulu

council regular Council meeting held on Decenber 4, 2002,

Sttached ag Sxnibit "3" to (the Trustee’) ation for

Partial surmary Judgment on Counts 1-111 of [the Trustees]

Complaint and supporting papers, filed herein on October 3,

S003, ip an accurate transcription of what was said.

20 “" the newspaper article attached as Exhibit °5* to

[the trustees'] Motion to Conpel Discovery of “Privileged”

Gomuniestions fron Plaintiff Clty and County of Honolulu

Sud Defendant Leseces, filed herein on Septerber 18, 2003,

Sccurately reflects what Corporation Counsel David Arakawa,

Beg. said vo the press

3. As Corporation Counsel, David ar
aurhority co make the statements co the press

 

 

 

 

   

awa, Beq. had

‘The court subsequently granted the City’s motion. A written
order was filed on February 10, 2004. A final judgment
indicating that all claims and prayers for relief in the
declaratory judgment action had been resolved or dismissed as

moot was filed on April 28, 2004. The Trustees timely appealed.

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1. sARDS VIEW
AL Award mary Ji E

“We review the circuit court’s grant or denial of

sunmary judgment de novo.” Simmons v. Puu, 105 Hawai'i 112, 117,
94 P.3d 667, 672 (2004) (quoting Hawai‘i Cmty. Fed. Credit Union

wKeka, 94 Hawai'i 213, 221, 11 P.3d 1, 9 (2000).
B. Awards of Fees and Costs

~This court reviews the circuit court's denial and
granting of attorney's fees under the abuse of discretion
standard." Price v, AIG Hawai'i Ins. Co., inc., 107 Hawai'i 106,
310, 111 P.34 1, 5 (2005) (citation omitted)
cC. Statutory Interpretation

“We review the circuit court’s interpretation of a
statute de nove.” City and County of Honolulu v. Ing, 100
Hawai'i 182, 189, 58 P.3d 1229, 1236 (2002) (citation omitted).

HT. ISCUSSION

‘A. The Condemnation Action

Appellants argue that the circuit court erred in ruling

that there had not continuously been qualified lessees for at

 

least 25 units to support the condemnation action because:
(2) genuine issues of material fact existed regarding Sterling's
principal place of residence; (2) Ault and the Dixons should not
have been disqualified based on their transfer of fee simple

property prior to applying for condemnation under ROH chapter 36;

(3) Poag’s fee simple property ownership did not disqualify hin

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because the property in question was not habitable or suitable
for residential purposes; (4) ROH chapter 38 does not require
that the minim number of qualified applicants come from those
originally designated; (5) the court erroneously applied Des
Rules § 2-14, which allows "tacking"; and (6) the court
erroneously applied the exceptions to the occupancy requirenents
articulated in DCS Rules § 1-2. The City additionally clains
that the cizcuit court erred in awarding the Trustees’ requested
attorneys’ fees,

In their cross-appeal, the Trustees contend that the
circuit court erred in determining that: (1) the definition of
‘owner-cecupant” contained in DCS Rules § 1-2 could be reconciled
with the definition of “owner-occupant” contained in ROH
§ 38-1.2; (2) the City may allow subsequent lessees to “tack ont
to the previous applicant's tine of residency for purposes of
fulfilling the twelve-month residency requirenent under ROH
§ 38-1.2; (3) units 230 (formerly Weber’s) and 412 (formerly

Spalding’s) remained subject to condemnation despite the fact

 

that the former applicants had sold their units and were no
longer qualified to participate in condemnation proceedings;

and (5) the

 

(4) the City could amend its first amended complaint;

Trustees could not recover expert witness fee!

 

1. Ault and the Dixons -- Units 242 and 441,
‘The circuit court ruled that applicants Ault and the

Dixons were not qualified because they owned fee simple property

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suitable for residential purposes within the City and County of
Honolulu that was quitelaimed for no consideration to relatives
shortly before or at the time they applied to participate in the
condemnation proceedings. The circuit court explained that it
did not believe Ault and the Dixons were qualified because the
property that they had quitelained in order to qualify for the
condemmation proceedings could be quitclaimed back to them.

Appellants contend that the circuit court’s ruling that
Ault and the Dixons were not qualified is not supported by the
plain language of ROH § 28-2.4, The Trustees argue that the
cirouit court was correct because the transactions by Ault and
the Dixons were similar to the creation of “false poverty" to
becone eligible for government assistance prograns or fraudulent
conveyances.

‘he clear and unambiguous Language of ROH § 38-2.4
provides that applicants are not eligible to participate in

condemnation proceedings under ROH chapter 38 unles

 

they *[dlo
not own property in fee simple lands suitable for residential

purposes within the City and County of Honolulu or have pending

 

. an unrefused application to lease or purchase residential
real property for dwelling unit purposes." In the instant case,
it is undisputed that, at the time they applied and throughout

the condemnation proceedings, neither Ault nor the Dixons owned

fee simple property suitable for residential purposes within the

city and County of Honolulu or had a pending, unrefused

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application to lease or purchase residential real property for
dwelling unit purposes. Based on the plain language of the
ordinance, we hold that the circuit court erred in ruling that
Ault and the Dixons were not qualified to participate in
condemnation proceedings under ROH chapter 38.
2. Poag

Appellants contend that the circuit court erred in
ruling that lessee Poag (Unit 470) was not qualified to
participate in the condemnation action because he and his wife
owned fee simple property within the City and County of Honolulu.
Appellants argue (1) Poag owned the property to secure financing
as part of his business of buying, renovating, and selling
residential and commercial property and (2) the property was not
habitable during the time Poag owned it due to plumbing,
electrical, structural, and security deficiencies. Thus,
Appellants appear to contend that the circuit court should not
have ruled that Poag was not qualified because of (1) the reason
he owned the property in question and (2) the state of the

structure atop such property.

 

ROH § 38-2.4 provides in pertinent part:

 

(a) Mo gale of any condominium land within « development

shall be made unless the lessees:
isi” pones roperty in fee simple lands suitabl

Sounty of Honolulu or having pending before the
state Housing finsnee and developnent
Corporation, oF the city department of housing
nd. community developrent an unrefused

application to lease or purchase ragidential
well ine x

Person is dened to own iands, for the purpote

 

     

 

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of this paragraph, if che person, che person's
Or both the person and the person’s
jeparated and Living apart under
e'gecree of a court of competent jurisdiction)
Owns lands, including any interest, in a land
trust in the City and County of Hosolulu;

 
 

Based on the language ‘property in fee simple lands suitable for
residential purposes” and “residential real property for dwelling
unit purposes,” the relevant inguiry under ROH § 38-2.4 centers
around the character of the land itself -- whether the property
can be used for residential purposes or dwelling unit purposes.
under the plain language of the ordinance, the habitability of
any structures atop land suitable for residential purposes is not
relevant.

In the inetant case, Poag aduitted during his
deposition that the fee simple land he owned at 1248 Inna Place
(hereinafter, the Makiki Property] was residential property, and
it 4s undisputed that the Makiki Property is within the City and
County of Honolulu, Poag algo explained that the following work
was done on the Makiki Property:

Ke gutted the entire residence. By that I mean we
core out ali the deywail, tore off the roof, tore cut sl)
the plumbing, reconfigured many of the interior wails, put
Ie'ai"Rew plusbing, all-new drywall, all new roofing, added
iis00 square feet, including a detaches garage and a guest
Gottage above the garage, resurfaced all the floors, put in
granite and marble throughout, all new eppliances, re~
Yandecaped the entire project ite. it was an extensive
renovation.

 

    

 

Poag's statements demonstrate that the Makiki Property was
residential property and that the land had been used as such

Thus, the record supports the circuit court’s determination that

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Poag owned fee sinple residential property within the City and
county of Honolulu.

Appellants argue that Poag should not have been
disqualified because he owned the property for business purposes.
However, the plain language of ROH § 38-2.4 is both unqualified
and unambiguous: *No sale of condominium land within a
Geveloprent shall be made unless the lessees . . . [do not own
property in fee simple lands suitable for residential purposes.”
There being no ambiguity in the ordinance, this court is not at
Liberty to look beyond ite plain language. See Ing, 100 Hawai'i
at 189-90, 58 P.3 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 38.

3. The Tesue of Tacking

Appellants and Trustees contend that the circuit court
erred in its rulings regarding DCS Rules § 2-14, which allows a
subsequent applicant to “tack on* to the time a withdrawing

applicant resided in the unit to eatisfy the one-year residency

 

requirement for participation in condemnation proceeding
Appellants contend that the circuit court erred in finding that
“Daniel and Juliet Lee (Unit 165) are not qualified because they
did not meet the one-year residency requirement under [ROH]

§ 38-1.2" The Trustees contend that the circuit court erred in

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a

ruling that DCS Rules § 2-14 “is narrow and not inconsistent with
ROH chapter 38.°

‘The Trustees contend that DCS Rules § 2-14 conflicts
with ROH chapter 38 because the administrative rule “allows an
applicant who has satisfied the requirements to sell their

position in the litigation to someone who would not otherwise

 

meet the requirements of being an ‘owner-occupant.‘* Appellants
argue that the definition of “lessee” in ROH chapter 38
specifically contemplates the situation where an applicant sells
or otherwise conveys his or her interest to another person.

*[W]hen interpreting municipal ordinances, we apply the
same rules of construction that we apply to statutes.” Coon v.
City and County of Honolulu, 98 Hawai‘i 233, 245, 47 P.3d 348,
360 (2002) (quoting Weinberg v. City and County of Honolulu, 62
Hawai'i 317, 322, 922 P.24 371, 377 (1996)). “While an
administrative agency’ interpretation of the ordinance that it
As responsible for implementing is normally accorded great
weight, no deference ie required when the agency's interpretation
conflicts with or contradicts the manifest purpose of the
ordinance it seeks to implement.” Id. at 251, 47 P.3d at 366
(citations omitted). Additionally, we have noted that

strict construction merely precludes “doubtful inferences"
and mandates that the grant of the power of eminent donain
Be tound in the ordinance, “either expressly or by necessary
[splication." The exprese pursose of the ordinance
promulgated by the city Council must, in turn, be effected
Povthe fullest extent possible through interpretation of its
Teoguage and the resolution of ambiguities in accordance
with ese ‘liberal construction" rule.

 

 

 

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Id. at 247 2.18, 47 P.3d at 362 0.18
HOH § 38-1.2 defines a lessee as “any person to whom
land is leased or subleased, including the person’ s heirs
successors, lecal representatives, and assigns and who is the
owner-occupant of the residential condominium unit, residential
condominium unit, residential cooperative housing unit or
residential planned developnent unit." (Emphasis added.) The
definition of “lessee” refers to an “owner-occupant,” which is
separately defined in ROK § 38-1.2. However, the definition of
“lessee" is ambiguous as to whether the owner-occupant
requirement applies to only “any person to whom land is leased or
subleased” or to ‘the heirs, successors, legal representatives,
and assigns" as well. Appellants argue that the former reading
resolves the arbiguity in the ordinance in accordance with the
rule of liberal construction and gives greater effect to the
intent of the legislature. Assuming but not deciding that the
owner-occupant requirement applies only to the “persons to whom

land is leased or subleased” and not “the person’s heirs,

 

successors, legal representatives, and assigns, it does not
resolve the question of whether DCS Rules § 2-14 conflicts with
ROH chapter 36.

Although ROH § 38-1.2 defines various terms used in ROH
chapter 38 including “lessee,” the eligibility requirements for
participation in condemnation proceedings are set forth in ROH

§ 38-2.4, which provides, inter alia, that “[nlo sale of any

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condominium land within a development shall be made unless the
lessees . . . [a]re at least 18 years of age and are owner
occupants of their condominium unite(.]” (Emphases added.) This

court has noted that “‘our rules of statutory construction
requires us to reject an interpretation of a statute or an
ordinance that renders any part of the statutory language a
nullity.’" Coon, 98 Hawai'i at 250, 47 P.3d at 365 (citations
and brackets omitted). Thus, although the definition of “lessee
in ROH § 36-1.2 may be interpreted to include individuals who do
not thenselves meet the owner-occupant requirements, the plain
language of ROH § 38-2.4 separately requires that lessees be
owner-occupants in order to participate in condemnation
proceedings under ROH chapter 38.

An owner-occupant is

any individual in whose nane sole or joint legal title se

hela'in s residential condominium one, residential

Gcoperstive apartment nit or residential planned

Sevelopment unit which, simultaneous to the individual's

omership, serves a8 the individual's orincipal place of
Hor 20 appl conv durina the

period pendina 1ecal_nroceedinaa to acauite the tee;
Provided, that the individual shall resin complete
ossessory control of the premises of the residential unit
Suring these periods. ‘An individual shall not be dened to
have complete possessory control of the premises if the
individual renee, igns the prenises for any
period of time £0 an Bin wot

{e not held. Proof of residency and posi
shall be

  

‘name legal title

 

 

ROH § 38-1.2 (emphasis added). Read together, ROH §§ 38-2.4 and
38-1.2 indicate that no sale of condominium land within a
development shall be made unless the lessee’s condominium unit,

simultaneous with hie or her ownership of it, serves as the

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individual's principal place of residence for a period of at
least one year inmediately prior to applying to participate in
condennation proceedings under ROH chapter 38.

Des Rules § 2-14 provides in pertinent part:

Any person who acquires the lease of an applicant may be
Substituted for the withdrawing applicant, provided that the

Eituted applicant neeta all the applicable regairenente
OF Chapter 38, ROH and these rules, except the requirenent
Chat the substituted applicant be a resident of the
condominium for a continuous snd uninterrupted period of one
year prior to the application

 

 

‘The administrative rule allows the sale of condominium property

under ROH chapter 38 to a lessee who does not satisfy the

 

requirement that the unit serve as the lessee’s principal place

of residence of one yt

 

x inmediately prior to application for
conversion, as well as during the period pending legal

proceedings to acquire the fee. Thus, on its face, the

 

administrative rule appears to conflict with the plain language
of ROH § 38-2.4.
ROH § 38-1.2 provides that “proof of residency and

possessory control shall be as established by rules adopted by

 

the department.* Based on this language, the Applicants argue
that DCS Rules § 2-14 constitutes @ special rule for proof of
residency and possessory control that establishes an othervise
qualified applicant is deemed to have constructively met the
twelve-month residency requizement by substituting for a
withdrawing applicant who was previously qualified. However, the

language of DCS Rules § 2-14 does not support the Applicants’

argument. This court has previously noted that DCS Rules § 1-9

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ee

articulates the rules governing the manner in which applicants
must prove their residency and possessory control. Ing, 100
Hawai'i at 194, 58 P.3d at 1241. DCS Rules § 1-9 (2000)

provides:

 

‘a of proof; cathe: affidavits. the party having
the burden of proof of any fact or event shall make such
proof by competent and credible evidence and testirony
Rcceptable and satisfactory to the director or his
Gceignated agent. Evidence at any hearing may be required
to be given under cath or by sworn written material. An
application may be required to be affirmed under oath,
else cethe and afficavite shal constitute perjury and a
(tion of wec+730-2060, HRS.

 

 

viol

 

pes Rules § 1-9 clearly establishes the type and amount of

evidence necessary to satisfy the applicable burden of proof. In

 

contrast, DCS Rules § 2-14 provides that a person may be

 

substituted for a withdrawing applicant need not “meet” the
requirement “that the substituted applicant be a resident of the
condominium for a continuous and uninterrupted period of one year
prior to the application.’ Thus, rather than establishing the

ary for a substituted applicant

 

type and amount of evidence nece:
to satisfy his or her burden of demonstrating residency and
possessory control, DCS Rules § 2-14 states that no evidence of
the aforementioned residency requirement is necessary. The rule
is plainly inconsistent with ROH § 38-2.4, Therefore, we hold
that the circuit court erred in holding that DCS Rules § 2-14 “is
narrow and not inconsistent with ROH chapter 38.* Because

(1) Des Rules § 2-14 is inconsistent with and contradicts the
manifest purpose of ROH § 36-2.4 and is, therefore, held to be

invalid and (2) it is undisputed that the Lees, absent the

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invalid rule allowing “tacking,” did not satisfy the requirements
of ROH § 36-2.4, we also hold that the circuit court did not err
in ruling that the Lees were not qualified.
4. Sterling

Appellants contend that the circuit court erred in
finding that Sterling was “not qualified because he did not live
in hie unit as his principal residence continuously after he
applied, and because he was not a bona fide resident of the City
and County of Honolulu at the time he applied and afterward.”
specifically, Appellants argue that Sterling's application to

to fee conversion and his supporting

 

participate in le:
affidavit, considered in the light most favorable to the

nonmoving party, demonstrates that there waa a genuine issue of

material fact regarding whether Sterling was qualified to
participate in the proceedings.

‘This court has noted that

 

sunmary judgnent ie appropriate if the pleadings,
depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there
ig no genuine iasue as to any material fact and that the
moving party is entitled to judgment as a satter of lav. A
fact ia material {f proof of that fact would have the effect
of establishing or refuting one of the essential elenents of
cause of action or defena
evidence mst be viewed in
Ron-moving party. in other words, we mst view all of the
evidence and the inferences drawn theretron in the Lisht
most favorable to the party opposing the motion

 

 

   

 

Simmons, 105 Hawai'i at 117-18, 94 P.36 at 672-73 (quoting Kahale

Ms City and County of Honolulu, 104 Hawai'i 341, 344, 90 P.3d

233, 236 (2004).

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a

In his application dated April 21, 2003, Sterling
indicated that he had occupied Unit 230 for three days and that
he is a bona fide resident of the City and County of Honolulu,

In his affidavit in support of his application, Sterling states,
under penalty of perjury that he is a bona fide resident of the
city and County of Honolulu. Thus, although the Trustees may
have presented evidence indicating that Sterling did not satisty
the residency requirenents, the City clearly presented admissible
evidence to the contrary. Given the contradictory evidence
adduced by the parties, the circuit court erred in ruling that
there were no genuine issues of material fact as to whether
Sterling wae a bona fide resident of the City and County of
Honolulu. However, it is undisputed that Sterling was nok a
resident of his condominium unit for a continuous and
uninterrupted period of one year prior to his application and
that the department deemed Sterling qualified based on DCS Rules
§ 2-14, Therefore, based on our holding that DCS Rules § 2-14 is
invalid, we also hold that Sterling was not qualified to
participate in condemnation proceedings under ROH chapter 38.

Accordingly, we hold that the circuit court correctly ruled that

 

sterling was not qualified, albeit for different reasons. See
Agsalud v. Lee, 66 Haw. 425, 430, 664 P.24 734, 738 (2983)
(stwlhere the decision below is correct it mat be affirmed by

the appellate court though the lower tribunal gave the wrong

a
*** FOR PUBLICATION ***

 

reason for its action" (brackets in original) (citations and
internal quotation marks omitted) ).

5. Exceptions to the Requirement that Applicants Retain
sory Control Over Their Condominium

 

Appellants and Trustees claim that the circuit court
erred in its interpretation of pcs Rules § 1-2. The circuit
court concluded that the “exceptions to the occupancy requirement
based only on serious illness, employment requirements, military
cbligations, and educational sabbatical” listed in 2cS Rules
§ 1-2 applied to the requirement in ROH § 38-1.2 that the
condominium unit serve Yas the [applicant’s) principal place of

residence for a period of not less than one year inmediately

 

prior to application for conversion, as well as during the period
pending legal proceedings to acquire the fee.” However, the

court also ruled that applicants Randall and warren were not

 

qualified to participate in the condemnation proceedings beca

they had rented out their units and, therefore, did not comply

 

with the requirement that applicants retain possessory control of
the premises during the period pending legal proceedings to
acquire the fee. On appeal, it is undisputed that Randall and
Warren rented out their unite during the year immediately prior
to application for conversion or during the period pending legal
proceedings to acquire the fee

As noted supra, ROH § 38-2.4 requires lessees to be

owner-occupants of their condominium unite in order to be

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a
eligible for condemation proceedings under ROH chapter 36. As

previously stated, ROH § 38-1.2 defines “owner-occupant” as

any individual in whose name sole or joint legal title is
Rola tn a residential condosinium unit, residential
petGeracive aparcnent unit or residential planned
Geveiopnene unis which, simultaneous to the individual's
aexeighIp, aerveo ee the individual's principal place of
Setidence for s period of not less than one year imediately
seri eere* application for conversion, as well as during the
Betod pending lege! proceedings to acquire the fees
petvided{] that the individual shall retain complete
peettesory control of the premises of the residential unit

Baring cheee periods s a
have complete sassesiory control of the premiess ifthe
vidual rents, 12a 35 reniees fOr

 

ee ee root of residency and possessory Control
Ag Bente eatabl ished by rules adopted by the departrent.

(emphasis added.) DCS Rules § 1-2 defines “owner-cccupant” as

any individual in whose nane sole or joint legal or
BEY {able eitie ie held ina residential condominium unit or
flannea developoent apartment or hone which server
Boncurrentiy wich such ownership as the individual's
SoiStipal place of residence for a continuous and
vretcerupted period ef not less than one year inmediately
weiaeging’en application for conversion, ae well as during
Pre“{esa) proceedings co acquire the fee simple title. An
ShherSSccupane mist retain complete possessory control of
Che"Scsdoninius unit or planned development apartment or
Boke throughout these periods and shall not be deened to
POSE EBipiece poscessory control if the condominium unit or
Pitaned Development apartment or hone is rented, leased or
Dances tor any period of time to any other person who ie
ASE Segal omer, or an equitable owner under an Agreement

 

 

 

 

Beteaiesvof the same condominium. The department nay
2) whe ocoupancy £26 ons

piitiche, and educational sabbatical

(emphasis added.)

a. the Trustees’ arcument

the Trustees argue that the circuit court erred in
ruling that DCS Rules § 1-2 and ROH § 38-1.2 can be reconciled
pecause the administrative rule expands the definition of *owner-
cccupant” beyond the plain language of the ordinance, As noted

gupra, an adninistrative agency's interpretation of the ordinance

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that it is responsible for implementing is normally accorded

great weight. Coon, 98 Hawai'i at 251, 47 P.3d at 366 (citations
omitted). Additionally, although the application of strict
scrutiny “precludes doubtful inferences and mandates that the
grant of the power of eminent domain be found in the ordinance,
either expressly or by necessary inplication[,]” “[t]he express
purpose of the ordinance promulgated by the City Council mist, in
turn, be effected to the fullest extent possible throush
interpretation of its language and the resolution of ambiguities
in accordance with the liberal construction rule.” Id. at 247
n.18, 47 P.3d at 362 n.18 (internal quotation marke omitted)

ROH § 38-1.2 requires, inter alia, that the subject
condominium unit serve as the applicant’s “principal place of

sidence” and that the applicant retain "complete possessory

 

Des Rules § 1-2 allows the department

 

control” of the premises.
to consider exceptions to the “occupancy requirement.” Inasmuch

tablish an

 

as neither ROH chapter 38 nor the DCS Rules
“occupancy requirement,” it is unclear whether, on their face,
the definitions of ‘owner-occupant” in DCS Rules § 1-2 and ROH

§ 38-1.2 are inconsistent.

 

rly establishes that

 

Because ROH chapter 38 cl
applicants mist meet the residency and possessory control
requirements articulated in ROH § 36-1.2, the Trustees are
correct that DCS Rules § 1-2 cannot be interpreted to create

exceptions to these requirements. See Coon, 98 Hawai'l at 251,

 

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47 P.3d at 366. However, ROH § 36-1.2 clearly expresses the City
Council's intent to allow the department to establish rules as to
how applicants prove that their unit served as their principal
place of residence and that they retained complete possessory
control of their units.‘ Thus, the department may consider
occupancy as a factor in determining whether the condominium unit
serves as the applicant’s principal place of residence.
Additionally, as the circuit court noted, it is reasonable for
the department to establish rules for proving residency and
possessory control that accommodate for situations where an
applicant does not occupy his or her unit for a period of time,
ouch as in-patient care in a medical facility or military
deployment. Therefore, in giving the effect to the city
council's intent to allow the department to establish rules for
proof of residency and possessory control to the fullest extent
possible, we hold that the language of DCS Rules § 1-2 allowing
the department to consider exceptions to the ‘occupancy

rious illness, employment requirements,

 

requizement” for
military obligations, and educational sabbatical is consistent
with ROH § 26-1.2, which allows the department to establish rules
of proof of residency and possessory control. Accordingly, we

hold that the circuit court did not err in ruling that the

 

“mie court has noted that the terms “principal place of residence”
and "possessory control" are not defined in ROH chapter 38. See Ing, 100
Bowails av 195, 58 P.3d at 2242

 

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a

definitions of “owner-occupant” contained in ROH § 38-1.2 and DCS
Rules § 1-2 may be reconciled.

b. the Appellants’ aroument

Appellants argue that the circuit court erred in
excluding applicants Warren and Randall because the exceptions
articulated in DCS Rules § 1-2 apply to the requirenent that
applicants retain “complete possessory control” of their
premises. ROH § 28-1.2 states that an applicant who leases his
or her premises during the relevant periods ‘shall not be dened

to have complete possessory control.” “The term ‘shall’ is

 

ordinarily used in a mandatory sense. Lingle, 108
Hawai'i 245, 251, 118 P.34 1288, 1194 (2005) (citations omitted) .

Thu

 

the plain language of ROH § 38-1.2 mandates that an
individual cannot be deemed to have complete possessory control
of the premises if they rent their unit for any period of time to

fa person in whose name legal title is not held. Applicants ‘who

 

do not maintain complete possessory control of the premises do
not meet the definition of an owner-occupant under ROH § 38-1.2
and, based on ROH § 28-2.4, are not eligible to participate in

 

condemnation proceedings under ROH chapter 38. Inasmuch
administrative rule cannot contradict or conflict with the
ordinance it seeks to implenent, gee Coon, 98 Hawai'i at 252, 47
P.3d at 366 (citations omitted), DCS Rules § 1-2 cannot be
interpreted to allow an individual to rent out his or her unit

and still meet the reguizement of retaining complete possessory

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a
control of the units. Therefore, we hold that the circuit court

did not err in concluding that the exceptions in DCS Rules § 1-2
cannot be interpreted to invalidate the mandate in ROH § 36-1.2
that any applicant who rente his or her unit during the relevant
periods of time cannot be deened an “owner-occupant.”
Accordingly, we also hold that the circuit court did not err in
ruling that applicants Randall and Warren were not qualified to
participate in condemnation proceedings under ROH chapter 38.

6. Bird and the smiths

Both the City and the Applicants contend that the

circuit court erred in ruling that applicante Bird and the smithe
could not be counted to satisfy the statutory minimum number of
applicants required to initiate a condemnation proceeding. The
Applicants argue that the

circult court erred when it interpreted... (Takabuki, €2
Hawai at 183, 921 P24 at 103) to require thet the
statutory ‘sinimm minber of applicente mst cone only from
the group of 1 Jainaliy designated, when it
probinived the courting of those fully qualified applicants
RGged by avendment, and when it thereby dienissed the
Subject’ conlemnation action when it erronecusly determined
that the number of axiainally designated applicants fell
below 25.

 

 

(capitals in original omitted.) Similarly, the City argues that
the circuit court erred because "ROH chapter 38 does not require
that the statutory minimum nunber of applicants be maintained
only fron the (applicants) originally designated.” (Capitals in
original omitted.) Additionally, both the Applicants and the

city argue that the circuit court’s amendment of the complaint to

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include Bird and the Smiths relates back to the date of the
original complaint

contrazy to Appellants argunents, the circuit court did
not hold that the required minimum number of unite must be
maintained from the group of applicants originally designated.
Rather, the court focused on whether the minimum number of
qualified units were designated at the tine condemation
proceedings were initiated. During the hearing on the
Applicants’ motion for reconsideration, the court explained:

ell, the point that I chink we are, ig to determine
whether, in fact, [the original designation net the
Runerosity requitenene when firet designated). And what Z/m
faying is, you make that determination without counting
[Bird and swith), who are later added. "So you have to lock

peant for you to snderstands

  

  

gone other people drop cut oF past
away of shatever. If'you still have 25, 1 could imagine
That that would not require the end of it, because at all
Eines there vere 25. gut what I's saying ie, you can't use
{Bird and the smiths) to cure any lack of 25 at the time,
and the Litigation that's challenging whether those 25 were
qualified under the lav has to be played ove.

‘And if (Bird and the smiths) weren’t in yet and
weren't coning in until after the fli Litigation on the 25,
then st would fall Below. So to the extent ehat 1 dian't
explain that as well as I hope I have aow, that was my
rational

 

 

 

 

(Emphasis added.) Thus, the record demonstrates that the circuit
court clearly did not rule that the statutory minimm number of
applicants must be maintained only from those originally

designated.

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In the instant cage, the circuit court initially ruled
that 22 applicants, including Brennan, were qualified. The
court's unchallenged ruling that Brennan was dened not to have
been qualified from the beginning, and our conclusion that the
circuit court erred in ruling that Ault and Dixon were not
qualified results in s total of 23 applicants deened qualified at
the time condennation proceedings were initiated. Taking into
consideration the circuit court's ruling that genuine issues of
material fact existed as to the Dupire-Nelsons, the City
initiated condemnation proceedings based on a designation that
included, at most, 24 qualified applicants. This court has ruled
that the failure to receive @ sufficient number of qualified
applications prior to initiating ROH chapter 38 proceedings

results in an invalid, void, and unenforceable designation

 

becat led its authority pursuant to ROW

 

the department exc
§30-2.2. See Ing, 100 Hawai'i at 193, 58 P.3d at 1240 (citing
Goon, 98 Hawai‘ at 251, 47 P.3d at 366). The subsequent
amendments could not cure proceedings initiated based on a void
and invalid designation. Additionally, we note that Hawai‘

Rules of Civil Procedure (HRCP) Rule 15(c) (2000)* offers no

 

* nc Rule 25 (c) provides:

on Back of Amendments. An anendnent of =
ack £0 the date of the original pleading

te)

 

 

(2). relation back is permitted by the lav that
provides the statute of limitations applicable to the
Betlon, oF

ia)" ne claim or defense asserted in the amended
pleading arose out of the conduct, trancaction, or

 

(continee..)

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relief because ‘the rationale of the relation back rule 15(c) is
to ameliorate the effect of the statute of limitations.’ Here,
there is no limitation of action problem. Thus, Rule 15(c) has
Hanalei, BRC Inc. v. Porter, 7 Haw. App. 304,
309-10, 760 P.2d 676, 680 (1988) (citation, brackets, and
footnote omitted); see algo Chin Kee v. Kaeleku Sucar Co., 30
Haw. 17, 22 (1927); Farber v. Wards Co., Inc., 825 F.2d 684, 689

(24 Cir. 1987) ("Rule 15(c) governs the ‘relation back’ of

 

no applicability.

amended pleadings only for the purpose of the statute of
Limitations, which is simply not implicated in this case."); Doe
v.O'Bannon, 91 F.R.D. 442, 447 (B.D. Pa. 1981) (**relation back’
only existe for the purpose of ameliorating the effect of

statutory bars to relief and not for the purpose of artificially

sting plaintiffs to fulfill constitutional prerequisites,

 

such as standing” (citation omitted) ).

7. Fees and costs

 

On appeal, the City contends that the circuit court
erred in awarding the Trustees’ requested attorneys’ fees because

the request included work that was “duplicative, unproductive,

continued)
‘Decurrence set forth or attempted to be
original plesding, or

(3)" the amendment changes the party or the naming of

the party againet won a claim is asserted if the foregoing
provision (2) is satisfied and the party to be brought in by
anendnent (A) has received such notice of the institution of
the action that the party will not be prejudiced in
tuaintaining a defense on the merits, and (3) knew or should
have known that, but for a mistake Concerning the identity
of the proper party, the action would have been brought
Sgainee the party

© forth in the

 

  

 

 

  

 

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excessive, or unnecessary.” The Trustees claim that the circuit

court erred in denying their requested expert witness fees,
arguing that such an award was authorized under HRS § 101-27.
vordinarily, attorneys’ fees cannot be awarded as
Garages or costs unless so provided by statute, stipulation, or
agreement.” yhai_Inv inc. v. Alteka Cou, Ltd, 92
Hawai! 492, 502, 999 P.2d 516, 535 (2000) (citations and
internal quotation marks omitted), other grow
Blaixy. Ing, 96 Hawai'i 327, 31 P.3d 184 (2001). HRS § 101-27

provides:

ihenever any proceedings instituted under this part
dare abandoned of discontinued before reaching a final
Monat, or 12, for any cauge, the property concerned 1s
AoC finaly taxen for public use,

 

possession of the property concerned shall Be
PisiGefendant entitled thereto. Issues of fact arising in
Sotnection with any claim for such damage shall be tried by
GRE NESSEE"wdenout 2 jury unless 2 trial by jury Js demanded
Brreither party, pursuant co the rules of court, within ten
blys fren the Gate of the entry of an order or judgment
Silowing ‘the discontinuance of the proceedings, or
Uislaclag the proceedings or denying the right of the
Glainesfe’co take the property concerned for public use. In
Pieitiene judgeent ie entered in favor of the defendant and
Sgsinss the plaintiff, any moneys which have been pai, and
oy Mauitional. security which hae been furnished, by the
piLiteste to the clerk of the court under sections 102~

End 101-29, shail be applied or enforced toward the
Steiafaction of the juagnent. In the case of the State or a
Semney, if the moneye so peid to the clerk of the court are
$Oeaeviciéat, chen the balance of such judgment shall be
paid from any soneya available or appropristed for the
Pedisition of che property concerned, or if that is
fGRiesicient then the same shall be paid from the general
fund of the State or county, as the case nay be

 

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(Bmphasis added.) Additionally, ROH § 38-5.2 provides in

pertinent part:

If the leased fee interest is not acquired or eminent domain
proceedings are not instituted within the 12 month period,
the city shall reinburse the feo ovner, the lessor, and the
egal and equitable omers of land go destonated for actual
CuE-of-pocket expenses they. incurre ial, survey,
Snd stcorneys fees as @ result of the de

     

         

Generally, judges must “specify the grounds for avards
of attorneys’ fees and the anounts awarded with respect to each
ground. Without such an explanation, we must vacate and renand
awards for redetermination and/or clarification." Brice, 107
Hawai'i at 123, 112 P.3d at 8 (citations omitted). In the
instant case, the Trustees focused primarily on HRS § 101-27.
However, the Trustees also quoted the pertinent language from ROH
§ 38-5.2 in their memorandum in support of an award for fees
Additionally, Appellants argued both that expert witness fees
could not be awarded under HRS § 101-27 and that the requested
amounts were unreasonable. Although the court’s order notes that
the Trustees’ notion was entitled “Defendants James Douglas
Keauhou Ing, Constance Hee Lau, Charles Nainoa Thompson, Diane
Joyce Plotts and Robert Kalani Uichi Kihune, Trustees under the

Will and of the Estate of Bernice Pauahi Bishop, Deceased’s

 

Motion for an Order Determining Amount of Damages Incurred by

 

Movants Pursuant to Haw. Rev. Stat. 101-27," it does not state
the statutory basis for its award of fees and costs, and does not
indicate whether its denial of the Trustees’ requested expert

witness fees was based on a conclusion that such an award had no

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a

statutory basis or on a finding that the requested witness fees
were unreasonable. Therefore, this court cannot effectively
review whether the circuit court abused its discretion in
granting in part and denying in part the Trustees’ request for
fees and costs. Accordingly, we must remand to the circuit court
for clarification

8. The Trustees’ Remaining Claims

 

the Trustees contend that the circuit court erred in
allowing (1) the City to amend its first amended complaint and
(2) unite 230 and 412 to remain subject to condemnation. As
previously indicated, the court had granted the Trustees’ motion
for partial sunmary judgnent, dismissing the individual lessees
(weber and Spalding), but allowing their units (230 and 412) to
remain in the condemnation action “without prejudice to hear{ing]

the City’s pending Motion to Amend the First Amended Complaint

 

consistent with the Court’s interpretation regarding tacking.”
Hawai'i Rules of Appellate Procedure Rule 28(b) (7)
(2003) requires that an opening brief contain an “argument,
containing the contentions of the appellant on the points
presented and the reasons therefor, with citations to the
authorities, statutes and parts of the record relied on. The
argunent may be preceded by a concise summary. Points not argued
nay be deemed waived." Because the Trustee’s opening brief fails

to include an argument on their claim that the circuit court

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erred in granting the City’s motion to amend its first amended
complaint, these points of error are deened waived.
The Declaratory Judsment Action

With respect to the declaratory judgment action, the

 

‘Trustees contend that the circuit court erred in (1) denying
their motion for summary judgment and (2) granting the City’s
motion to dismiss the Trustees’ claims as moot or, in the
alternative, granting judgment on the pleadings. In their
opening brief, the Trustees do not contest that the instant case
is moot. Instead, the Trustees argue that the declaratory
judgment action falle under an exception to the noctness doctrine
for cases that affect the public interest and are capable of
repetition yet evading review.

This court has held that

[a] case is moot where the question to be determined is
abstract and does not rest on existing facts or rights.
Thus, the nootnese doctrine is properiy invoked where

Sevents «shave #0 affected the relations between the

 

 

 

 

parties thit ‘the evo conditions for justiciability relevant
On appeal -- adverse interest and effective renedy ~~ have
‘been compromised.
CARL Corp. v. State, Dep't, of Educ., 93 Hawai'i 185, 164, 997
P.2d $67, 576 (2000) (citing In xe Application of Thomas, 73 Haw.

223, 226, 832 P.2d 253, 254 (1992)) (ellipsis in original).

Nevertheless, ve have repeatedly recognized an
exception to the motness doctrine in cases involving
Guestions that affect the public interest and are “capable
Of repetition yet evading review." "hmong the criteria,
Considered in determining the existence of the requisite
Segre: of public snterest are the public or private nature
of the question presented, the desirability of an
Authoritative determination for future guidance of public
Officers, and the likelihood of future recurrence of the
question,

 

    

 

 

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a

kada Trucking Co., Ltd. v. Bd. of Water |, 99 Hawai'i 191,
196-97, 53 P.34 799, 804-05 (2002) (citing CARL Corp., 93 Hawai'i
at 165, 997 P.2d at 577) (other citations omitted) .

‘the phrase, “capable of repetition, yet evading review,
meick that ta court will not dismise a case on the grounds
Se cootnese where & challenged governmental action would
Grade full review Because the passage of tine would prevent
Shy single plaintifé from reaaining subject to the
Sekeriction complained of for the period necessary to
complete the laweuit.”

Id, at 197, 53 P.3d at 805 (citing CARL Corp., 93 Hawai'i at 165,

 

 

997 P.2d at 577))

We are cognizant of the fact that ROH chapter 38 was
repealed on February 9, 2005. ‘The Trustees provide no
explanation of: (1) why the current dispute, based on a repealed
statutory scheme, should be considered public in nature; (2) why
an authoritative determination of ROH chapter 38 is desirable in
Light of ite repeal, and (3) the 1ikeliheod of a future

‘Thue, the Trustees fail to

 

recurrence of the issues they raisr

 

address the criteria considered in determining the existence of
the requisite degree of public interest. Additionally, the
Trustees offer no argunent as to how a condennation action under
ROH chapter 38 is capable of repetition or why it would evade
review. Therefore, we hold that the Trustees have failed to
establish that the circuit court erred in dismissing the
declaratory judgment action as moot.
HII. CONCLUSION
Based on the foregoing, we: (1) affirm the circuit

court’s award of summary judgment in favor of the Trustees in the

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condemnation action; (2) remand the issue of the Trustees’
request for fees and costs to the circuit court for
clarification; and (3) affirm the circuit court’s dismissal of

the declaratory judgment action as moot.

On the briefs: Ive-
Winston K. Q. Wong,
Deputy Corporation Counsel, BecccBlirnner

ane Lew Re onath, Ann c.

Teranishi, and Jeove W.

Schiel (of Kobayashi, Sugita, gG@—

E coda) ‘for plaintitt-appelice/

Gross appel lant cross appellee Come Pegi

City & County of Honolulu L Q

Martin Anderson, Joachim P.
Cox, and Robert 'K. Fricke

(of Goodsill Anderson Quinn &
Stifel), for defendants-appellants/
cross-appellees Kathleen Heuing,

et al.

 

James K. Mee, Paul S. Aoki,
and Wayne P. Nasser (of Ashford &
Wriston), for defendant-appellee/
cross-appellee/cross-appeliant
Kamehameha School

 

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