Title: In re Tax Appeal of Alford v. City and County of Honolulu. S.Ct. Order Denying Motion for Reconsideration, filed 11/25/2005 [pdf], 109 Haw. 423.

State: hawaii

Issuer: Hawaii Supreme Court

Document:

‘***F0R PUBLICATION*#*

 

 

IN THE SUPREME COURT OF THE STATE. OF HAWAT'T,

 

000:

 

‘Wd 04 AON Soag

IN THE MATTER OF THE TAX APPEAL
oF

KENNETH & SOPHIA ALFORD, SURVIVOR’S TRUST, JERALD V.
DUNLAP, SEVERN STARZYNSKI, NOBUYUKI ISHINA, MCPROUD
FAMILY TRUST, HHBW FAMILY LTD. PARTNERSHIP, RICHARD C. &
JOAN ELLIOTT, BRADLEY W. BRIXON REVOCABLE TRUST, TED &
KAREN L. SIMON, THOMAS KHOY FONG WONG, WESLEY N. & JANICE M.
CALLAHAN, JEFFERY J. & ELISA V. RUNMEL, ADLOPH 6 ERICA
LAEPPLE, WAYLAND S. DUDLEY, GRACE KAE, CAROL A, LAECHELT,
HUGH C. & BARBARA J. PAPE, RUSSELL ANDERSON, DAVID J. 6
CAROL L. NOVICK, ERNEST W. @ PAMELA TUTTLE, JOHN H. COLEMAN,
WALTER S. & TERRY A. LEONG, HAROLD L. PREEMAN, WILLIAM

KOWALSKI, HENRI P. § RYOKO KOSTERMANS, RICHARD’ A. MOODY,
ERNESTO V. CASTRO, ET AL.,

GERTRUD EBERWEIN, BRUCE F. CONNELL,
PEARL R. GROVES, GLENN H. MEYER, LEO A. & JEANNETTE M. YOUNG,
GLENN R. & CYNTHIA R. CAKES, PETER © TERRY T. CHAN, ALFONSO
J. & FUJTKO BABZA, ALMA V. BROSIO, TRUSTEE, KAREN K. SCHUMANN,
AMERICAN TRUST CO. OF HAWAII, HARRIETTE 'W. RHODES, JOSEPH

MICHAEL MANKVITZ, JAMES W. WITT, WILLIS EDGAR III & LENA CHUNG
INC., BETTY JUNE CAULO, FRANK M.

HOWARD, BLACK PEARL VENTURES,
NOWDESHA, MARSHA E. LEWIS, BERNARD J. GAINEY, FRANK’ J. HATA,
YOUNG FANILY TRUST, KENDRICK WONG, RUSSELL & MAXINE ANDERSON,
YANG JA WANG, DENISE BAILEY EVANS, LEWIS G. WALDO, JAMES J.

HENRI PETRUS &

SULLIVAN, LELAND M. GARRISON, SANG TEA BOBAY,
HERBERT Y.K. WONG, PAUL N,

RYOKO KOSTERMANS, PATRICIA RUDY,
& ALICIA Y. CROMPTON, DONALD S-

BEST, ET AL., LOUIS W.
& MARILYN A. GUSTAFSON, CARL OLSON, DOROTHY

ROBERTSON, ROY D.

G. HOWARD, EDWARD RANDOLPH BROOKS & ARLENE SAYEKO KISHI, H.
VELMA JEAN BRIXON, JANES H. & DORA M. KANO,

JACK M. & MARIE A. FELIZ, YOLO TRUST,

© HELEN C. OLSON, WILLIAM C. WARREN,
BRUCE HOLLIDAY, ALBERT

HARRY MUEGGENBURG,
AUGUSTUS. TAGLIAFERRI,
JUDY L. MOORE, PAUL R.

GEORGE K. & SHARON D. IGI, MARY P. BERG,
W. & BEVERLY A. FINK, PETER & MYUNG CHOI, SALISBURY RESTAURANT

ENTERPRISE, JAMES R. TI & SANDRA R. JOHNSTON, MECHAM FAMILY
& MARY F. WITTEMAN, DANIEL W.

LIMITED PARTNERSHIP, MATTHEW H.
& SANDRA R. MOORMAN, RICHARD & KRISTINE BOSSELMANN, RONALD J.
SMERLING, FRANK & VIRGINIA REES, ANNE-MARIE VOLK, FRANKLIN M.
TOKIOKA, BARRY D. BERQUIST, WILLIAM R. KOWALSKI, JEANETTE M.
YOUNG, ERNESTO V. & NILA M. CASTRO, GAINEY TRUST, WILLIS E. I11
& LENA C. HOWARD, JOSEPH M. ¢ DOROTHY M. MANKVITZ, NEALE FAMILY

oad
FOR PUBLICATION***

ee
TRUST, JOHN & NANCY COLEMAN, TRUSTEES JACK H. COLEMAN LIFETIME
TRUST, AMNW TRUST A, UNIVERSITY OF NORTH DAKOTA FOUNDATION,
EARL STRINDEN TRUSTEE, PAPE REVOCABLE TRUST, ADOLPH & TRAUDE
(ERICA) LAEPPLE, MARGARET BERQUIST, MATTHEW & MARY WITTEMAN
RUST, LELAND M. GARRISON TRUST, HELFAND TRUST, PETER C. &
MyuNe Chor, HAROLD s BETTE L. PRESMAN, HOLLIDAY ASSOCIATES,
INC. KAREN TAGGART, GEORGE K. & SHARON D. IGI, JUDY L. MOORE
['paTRICIA HANSON, RICHARD K. RUDY, JAMES & MARGARET K-
SULLIVAN, DENISE B. EVANS, WHITE SAND VENTURES, INC.» ATILLA
(TED) & KAREN L. STMON, BRADLEY BRIXON, TRUSTEE, DOROTHY
MSLLER, SEVERN & GLORIA M. STARZYNSKI, CATHERINE GUIRING,
TRUSTEE, Appellants-Appellants

 

CITY AND COUNTY OF HONOLULU, Appellee-Appellee
a

No, 25275
APPEALS FROM THE TAX APPEAL COURT
(TAX APPEAL CASE NOS. 00-0084 THROUGH 00-0104, 00-0106,
00-0107, 00-0109, 00-0110, 00-0112 THROUGH 00-0169,
00-0171 THROUGH’ 00-0201, 01-0025, 01-0027 THROUGH
01-0115, 01-0117 THROUGH 01-0141)

NOVEMBER 10, 2005
MooN, C.J., LEVINSON, NAKAYAMA, ACOBA, AND DUFFY, JJ.

AION OF THE Cot
fie hold that (1) the separate judgment provision of
pawai'i Rules of Civil Procedure (HRCP) Rule $8 does not apply to
tax appeal cases, (2) pursuant to Rules 3.4(a) and 6.1 of the
nules of the Boards of Review of the City and County of Honolulu,
appellants-Appellants Kenneth and Sophia Alford, et. al.
(collectively Taxpayers) provided sufficient proof that
authorization to sue on behalf of eighty fee unit owners

‘accompanied the “Taxpayers Notice of Real Property Tax Appeal,”

 
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SSS

 

(raxpayers’ Appeal Notice) and (3) Taxpayers have not establish
that the tax appeal court! (the court) erred (a) in directing
that Appellee-Appellee City and County of Honolulu (the city)
promulgate 2 rule pursuant to Hawai'i Revised Statutes (HRS)
chapter 91 regarding classification criteria and reassessment of
the 114 subject properties for tax years 2000 and 2001, 34 of
which were “Leasehold Units” and 80 of which were “Fee Units,”
(b) in not restoring the classification of the disputed units to
an “Apartment” designation, or (c) in impliedly denying a refund
of monies collected pending reassessment. Therefore, the July
23, 2002 order granting in part and denying in part Taxpayers’
motion for summary judgment (order) issued by the court is
affirmed.
I.

This matter involves the real property tax
classifications by the City of condominium units located in the
Waikiki Shoreline Apartments (Waikiki Shoreline) for the 2000 and

2001 tax years.’ Taxpayers are apartment owners of units in the

 

Waikiki Shoreline. The 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 bottom floor is commercial space.

* the Honorable Gary M.B. Chang presided over this matter.

one hundred fourteen appeals were filed for the 2000 tax year and
Mere filed for the 2001 tax y

 

117 appeal

 
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a

 

Prior to 1962, the State of Hawai'i exercised the 7
property taxing function, and both apartments and hotels were
combined into the same category of “hotel and apartment.” HRS

§ 246-10(a) (e) (1) (1993) (superceded by Revised Ordinances of
Honolulu (ROH) $$ 8-7.1(c) (1) (C) and (D) (2008)). In 1982, the
real property taxing function was transferred to the counties and
separate classifications were created, including one identities
as “Apartment” and another identified as “Hotel and resort." ROH
§5 8-7.1(c) (1) (C) and (D). For the 1982 and 1983 tax years, the
Waikiki Shoreline was classified as “Hotel and resort” in line
with these new categories.

In 1984, the “Hotel and resort” classification was
challenged in an appeal to the board of review of the City and
county of Honolulu (the board of review). In 1985, the parties
reached a settlement agreenent whereby the classification for the
Waikiki Shoreline was changed to “Apartment.”

tn 1993, the Waikiki Shoreline was again classified as
sHotel and resort.” A second tax appeal was filed. Because of
the settlement agreement reached in 1985, the classification was
changed back to “Apartment.”

In December 1994, the Waikiki Shoreline was converted
to a condominium. After this conversion, the City was required,

pursuant to ROH 8-7.1(c) (3) (A) and (B) (1996),? to separately
> Row $6 8-7.2(c) (2) (A) and (B) provide, in relevant part:

when property is subdivided into condominium units, each
(continued. -)

 
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assess and classify each condominium unit in the Waikiki
Shoreline based upon the unit's actual use.

In 1999, the City conducted an investigation of the
actual use of the units in the Waikiki Shoreline and determined
that there were three rental pools operating in the Waikiki
Shoreline involving (1) Outrigger Hotel and Resorts, (2) Aston
Hotel and Resorts, and (3) Captain Cook and Associates. The
operators of these rental pools provided the City with a Mist of
the units in their rental pools. On this basis, the units were
classified as “Hotel and resort” for the tax year 2000.

Sonetime in December 1999, owners of the classified
units received assessment notices of the reclassification to
“Hotel and resort.” On or about Jamiary 18, 2000, Taxpayers
appealed this classification as related to 114 units to the board
of review, Of these 114 units, 34 were “Leasehold Unite” and 60

were “Fee Units.”

 

>(. sseontinued)
‘unit and its appertaining common interest:
(A) Shall. be classified upon consideration of the
unit's actual use into one of the generel classes in the
Sane manner as land? and
(B) Shall be deemed 2 parcel and assessed separately
fron other units.

 

 

    

+ tn its answering brief, counsel for the City declared that 34 of
the 114 units were “held in leasehold as of January 16, 2000 with "Wadkikt
Shore, Inc., the leased fee owner, ha(ving) an ounership interest” in these 24
units. The City identified these’ 34 units jehols Unite",
distinguishable fron 80 units that are identified as "Fee Units.” Counsel for
the City declared that the 80 unite "were omed in fee sinple as of January
16, 2000""with "Waikiki Shore, inc. ha{ving] no ounership interest” in these
gnits. In ite reply brief, Taxpayers co not dispute this distinction between
“[eagchold Units” and "Fee Unita.”

   

 

 
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a
In each of these 114 appeals,* the Taxpayers’ appeal

notice was signed by an attorney. The attorney represented the
poard of Directors of the Waikiki Shoreline condominium
association. Two docunents were appended to the notice. ‘The
first, entitled “Authorization” signed by a Richard Elliot,
president of Waikiki Shoreline, Inc., stated in relevant part

that

(oly authority of the Board of Directors of Wetkiki
Shore(linel,, inc.
(2) the dai eb ase Bigelow

Sfearement” te "uote: sBonb", ane ih which Waikike
BSHHINI], nc. nae an ownership interest as the fee
jot, oF fee simple ownership.

‘The lessees of ail Apartments in the Waikiki

Shoretlinel condoninium . . . generally noted on the
taxpayer", are hereby authorized

RS°Eiie appeals cf the real property” tax assessments of all

SSehApartnent unite in the Waikiki Shore{iine] condominium,

hich Reve been classifies fren "Apartment to “Hotel and

Resort”

 

   

(Emphasis added.) The second attachment entitled “Consent to

Action Without a Meeting” (consent) was signed by officers‘ of

 

the Board of Directors of the Waikiki Shoreline condominium

association. The consent stated, in pertinent part, that:

+ om Novenber 20, 2000, Robert 0. Magota, a real property
fied 5 “Cortssicate of Appeal” with the court that certifies the p
£EbtS operty located at Tax Map Hey 2-6-004-012-0045. Four docunents we
reel Bea'es this certificate and include (1) the Taxpayers’ oppeal notice, (2)
sppenshorizations’ (3) a Nconsent £o Action Without a Meeting,” and (4) &
weeckaioa’ by the board of review as to all the disputed units. Based on
These actachtents, it appears that the notice, authorizetion, and consent as
saree aeeacorey at Tax Hep. Key 2-€-004-012-0085 is provided as an example of

scenetts nat were filed a2 to each unit and owner appealing the 2000 tax
jonent Eo the board of review.

 

 

 

   

«the officers of the Board of Directors of the Waikiki Shoreline
condoniniun iesocistion who signed the consent were President Richard Elliot,
Sener dent June A. Kokolsky, Secretary Louis Crompton, Treasurer David J.
wesc eifector william 2. Dornbush, and Director Thomas M, Mull

6
‘**#FOR PUBLICATION*+#

Pursuant to Article 111 section 16 of the Bylaws of

the Association of Apartment Owners [(R0RO)] of Waikiki

Shore [line], the undersigned, being all of the menbere of
‘Hind’ and direct as follows:

 
   

6," fo address the serious problem posed by the
isproper assessments, the i

 

cally thet plow ft to

se a0ea ter have ths
sath

any settlenent. or aborave any other resolution of the
Dstters sccressed herein. Any Aparsment owner so
sageiind nav. at any tine, upon written notice to the Board
of Directors, tale control of any sopeal fiied on behalf or

Eeapron! rea als Any such
partment owner shail not continue to use Counsel retained
by the President and shall not look to the (ROAO) for
Payment of therr ingividus! legal or other fees and costs:
Subsequent to taking control of the appeal

(Emphasis added.)

On September 1, 2000, the board of review upheld the
classification of “Hotel and resort.” The board of review's
decision identified the disputed units by, inter alia, individual
tax map key numbers and board of review case appeal numbers. On
September 28, 2000, Taxpayers appealed the board of review's
decision to the court.

In December 2000, most of the Taxpayers again received
assessment notices that their units were classified as “Hotel and
resort.” This second group of classifications was appealed
directly to the court. Both appeals were consolidated into one

tax appeal action.

 
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ee
u.

on March 8, 2002, Taxpayers moved for summary judgment.
they argued that the City reclassified the Waikiki Shoreline
units from “Apartment” to “Hotel and resort” by using
classification criteria not set forth in an agency rule, thereby
violating the rulemaking requirement of HRS chapter 91, the
hawaii Administrative Procedure Act (HAPA). Taxpayers sought =
judgment vacating the classification of “Hotel and resort,”
restoring the classification to “Apartment,” and refunding all
excess taxes collected under the “Hotel and resort”
classification. on March 22, 2002, the City filed its memorandum
in opposition.

on April 1, 2002, the court conducted a hearing on
maxpayers' motion for summary judgment. The court observed “that
although ROH defines ‘hotel,’ the ordinance does not have a
definition for ‘apartment.’ Tt concluded that a criteria used
for “Hotels and resort” should “have been adopted as a HRS
Chapter 91 rule.” ‘The court declined to order that the
classification be changed to “Apartment,” observing that “the
criteria for that classification [was] nebulous as well.”

on July 23, 2002, the court issued its order
(2) vacating the assessments in the 2000 and 2001 tax appeal
cases, and (2) directing the City (a) to promulgate a rule
regarding the classification criteria used for the Maikiki

Shoreline units and (b) to reassess the disputed units for tax

 
‘***POR PUBLICATION***

 

years 2000 and 2001 in accordance with the rule.” On August 19,

 

2002, Taxpayers filed a notice of appeal from the order.
nr

‘Taxpayers contend that (1) “the City cannot promulgate
a rule... regarding its classification criteria which will
have retroactive effect and allow the City to assess the
apartments in question on the basis of that rule for tax years
2000 and 2001," (2) “the tax appeal court should have restored
the classification of the disputed units to their preexisting
[*Apartment’) classification,” and (3) “the tax appeal court
should have ordered the refund of money collected on the basis of
the improper assessments and should not have permitted the city
to keep [the] funds collected{.)”

In response, the City argues that (1) this court lacks
jurisdiction to consider this appeal because final judgnent was
not filed pursuant to HRCP Rule 58, (2) this court lacks
jurisdiction over certain 2000 tax year appeals because “proper
authorization was not obtained from the owners of the . . . units

at the time the Board appeals were filed,” (3) the court “was

The court's order read as follows

IP IS HERESY ORDERED, ADJUDGED AND DECREED that
Appellants’ Motion in GRANTED in part and DENIED in part a
follows:

1. The Motion ie granted in that the assessments for
tax years 2000 and 200] are vacated as to the Appellants
only. Further, the City shall promulgate rule pursuant to
Chapter 91, Hawaii Revised statutes, regarding its
classification criteria and shell reassess the subject
properties only for tax years 2000 and 2001

2."the motion is denied as to all renaining relief
requested.

 

 

 
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a
correct in . . . concluding [as a remedy] that the City . -

promulgate @ rule pursuant to HRS chapter 91 regarding
condominium classification criteria to apply . . - for tax years
2000 and 2001,” under Hawail Prince Hotel Waikiki Cor, vw. Clty &
county of Honolulu, @9 Hawai'i 361, 974 P.24 21 (1999), (4) the
court ‘wes correct in not reclassifying the subject units to
tapartment,'” and (5) the court “was correct in not ordering the
city to refund the monies collected . . . pending reassessment.”

taxpayers contend in their reply brief that Hawais
prince should be overruled or, in the alternative, should be
distinguished from the instant case and that the form of notice
jesued by the City did not comply with the notice requirements of
[ROH § 8-2.1(C)]-

‘Taxpayers request that this court (1) reverse that
portion of the court’s decision which dixects the City to
promulgate a rule regarding its classification criteria and
directs the retroactive application of that rule to the Waikiki
Shoreline units for the 2000 and 2001 tax years, (2) require the
classification of the disputed units be reverted to “Apartnent,”
‘and (3) order the refund of all taxes in excess of those which
would have been collected if the real property had been
classified as “Apartment,” plus interest and earnings on such
excess, where applicable.

wv.

wunlike other appellate matters, in reviewing summary

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**#FOR PUBLICATION***
judgment decisions an appellate court steps into the shoes of the

trial court and applies the same legal standard as the trial

court applied.” Beamer v, Nishiki, 66 Haw. 572, 577, 670 P.2d
1264, 1270 (1983) (quoting Fernandes v. Tenbruggencate, 65 Haw.

226, 228, 649 P.2d 1144, 1147 (2982).

Xt is well settled that, in reviewing the
decision and findings of the Tax Appeal Court, a
Presumption arises favoring its actions which should
hot be overturned without good end sufficient reason.
‘The appeilent has the burden of showing that the
decision of the Tax Appeal Court wes "clearly

-e Tax Aspeal court Cour Ltda, 85 Hawasi 26,

35, S36 Pizd 612, €75_(1957) (quoting

Hphglule s. steiner, 73 Haw, 640, 453, 854 Pred 1302, 1306

(1352) (Citation onitted)). A finding of fact is clearly

erroneous when it is not supported by substantial evidence

Gr "an appellate court is Left with te definite and firm

Conviction that a mistake has been mage.’” da. (quoting Ia

 

 

  

ze Tae Appeal-of Frank My Swan, ? Haw. App 390, (399, 796
P,2a395, 401 (19851)

  

Conversely, questions of Law are reviewable under the
Fight/wrong standard. Jn re-Waile Sty Court, 25 Hawaii at
33, 936 P.2d at 675. (citing.

swaii, Ines, 79 Hawaii 805; S08, 908 Pree Si, S22
(3338))

Hawaii Prince, 89 Hawai'i at 388, 974 P.2d at 28 (brackets
omitted) .
vy
In connection with its first argument, the city
contends that the separate judgment provision of HRCP Rule 58,
applicable to circuit court civil cases, applies to tax appeal
aA
In response, Taxpayers maintain that the July 23, 2002
order is the order that finally decided the underlying tax appeal

cases and that it constitutes the “decision of the tax appeal

-1-
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a
court” that is appealable under HRS $ 232-19 (1993). We believe

 

courte of the Sete." ARGE Role 58 seguires that *Telvery
sudsnent shel be ast forth on separate dooment."
venbisa v cadee Schutze flepina & Mish, 76 Hat's 138, 12,
peo 2a 1394, 198 (2894), HRCE Aude T states that the HRP
(1999), that statate pronides that

Seated meee te eh, BP tte beet
by ois ¢ 609-2. Rather, porevant bo HRS § 252-11 (1993)," the

+ Rs § 232-11, entitled “Court of record; general duties, powers,
seal” states, in relevant part, that

(t)ne tax appeal court shall hear and determine appeals as
[ideiscd sn? tins) “section 232-16 of 232-27. Te shall be 2
Pere of recora; have juriediction throughout the State with
Seopect to matters within ite jurisdiction: and shali have
TeePoSher and suenority in the manner provides in (HRS)
Secelon 252-13, te decide all questions of fact and all
Glestions of 6m, ineluding constitutional question
eeeieG sn any such matters, without the intervention of =
per.

n12-
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and determine, without a jury, appeals from tax assessments or

 

from decisions on such assessments made by the state boards of
review. The appeals are heard by a circuit judge of the first
circuit by assignnent of the first circuit court administrative
judge. HRS § 232-8 (1993), The tax appeal judge has “all the
powers and authority of a circuit court” in carrying out the
duties and functions of the court. HRS § 232-12 (1993).
Hearings before the court are hearings de novo to determine all
questions of fact and law, including constitutional questions,
involved in the appeal. HRS § 232-13 (1993).

The decision rendered by the court is appealable to
this court under HRS § 232-19. This provision states, in

relevant part, that

 

taxpayer or county aggrieved or the assessor may

appeal to the suprene court from

abbeal court by filing a written n

fax appeal court and depositing thi

sppeal within

‘The appeal shall be considered and treated for ail parpose:
‘a general appeal and shall being up for determination ail

and all questions of law, including
‘Questions, snvolved in the appeal:

 

ice of appeal with the
‘euith the costs of

   

 

       

(Emphases added.) See also Tax Appeal Court Rule 2 (2002) (“An
appeal to the Supreme Court and the Intermediate Court of Appeals
from any decision of the Tax Appeal Court in these actions must

be filed within thirty days after the filing of such deciaion.”),

 

Hence, the court is, by virtue of HRS § 232-11, separate and
distinct from the circuit court, although presided over by a

circuit court judge. Cf. In ze Campbell, 34 Haw. 10, 11 (1936)

(stating that the land court established under then-HRS § 5000 is

“13.
‘+#4F0R PUBLICATION***

—

‘a tribunal separate and distinct from the circuit court even
though a circuit judge sits by designation as a judge of the land
court).

Second, HRCP Rule 81(b) states that the “{Rules of

civil Procedure] shall apply to the following proceedings except

0! nd to the extent that are inconsistent with
cific statutes of the State or rules of court relating to such
proceeding (8) Actions for the collection of taxes{.]”

 

(emphasis added.) In contrast to HRCP Rule $8, the Tax Appeal
court Rules contain no provision requiring the court to enter @
sjudgnent” in a tax appeal. Rather, Tex Appeal Court Rule 29
(2002) provides, in pertinent part, that “[iln procedural matters
. ea} court! rules,

the he extent applic
by the Rules of the Circuit Courts of the State of Hawai"
[(RCCH) 1, and the IHRCP1.” (Emphases added.) Thus, Tax Appeal
court Rule 23 does not require the court to apply a separate
judgment rule in a tax appeal case. On the other hand, HRS
§ 232-19 specifically authorizes an appeal “from the decision of
the tax appeal court.”

he purpose of the separate judgment provision of HRCP
Rule 56 is to implement the finality rule of HRS § 641-1(a)
(1993), which authorizes appeals from “final judgments, orders,
or decrees” in circuit court civil cases. Jenkins, 76 Hawai'i at

118, 869 P.2d at 1337 ("We aze mindful, however, that we may hear

a4
+#*P0R PUBLICATION*++

 

appeals from only final judgments, orders, or decrees except as

 

otherwise provided by law. HRS § 641-1(a)."). “The separate
judgment rule [of HRCP Rule $8] is designed to simplify and make
certain the matter of appealability” and “[iJts sole purpose is
to determine when the time for appeal commences.” Id.

By contrast, in tax appeal cases, an appeal to this
court is taken from “the decision of the tax appeal court.” HRS
§ 232-19. “Decision” is not defined by the statutes or rules
governing tax appeals. However, consistent with the general rule
of finality governing appeals, the appealable “decision of the
tax appeal court,” HRS § 232-19, should be the decision that
finally decides all issues in the tax appeal.

B.

We concur with the reasoning of the Intermediate Court
of Appeals (ICA) in Lewis v, Kawafuchi, 108 Hawaii 69, 116 P.3¢
711 (2005). Tn Lewis, the taxpayer appealed from an “Order
Granting in Part and Denying in Part Director of Taxation, state
of Hawaii's Motion to Dismiss and for Rule 11 Sanctions Filed on
October 6 2003" and the “Order Denying Taxpayer/Appellant Donald
A. Lewis’ Supplemental Motion and Nemo filed on November 14,
2003.” Id. at 70, 116 P.3d at 712. The taxpayer opined that he
was conducting business within the sovereign territory of the
Kingdom of Hawaii and thus was not earning income within the

boundaries of the State of Hawaii. Id

n15-
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ee
The Department of Taxation assessed the taxpayer incon

 

tax, penalty, and interest for the 1996 tax year, Id. at 71, 116
p.3d at 713. The taxpayer challenged the assessment before the
board of review, maintaining that he had not earned income within
the State of Haxai'i and arguing that O'ahu was not within the
boundaries of the State. Id, The board of review rejected the
taxpayer's claims and he appealed to the court. Id, The
pixector of Taxation moved to dismiss the taxpayer’s appeal and
for HRCP Rule 11 sanctions. Id, The court dismissed the
taxpayer's appeal but denied the request for sanctions. Id. at
42, 116 F.3d 714, Separate judgments were not filed after the
aforenentioned orders. Id.

‘the ICA conducted an analysis of HRCP Rule 58, Jenkins,
uns § 232-11, and HRS § 232-19 substantially similar to ours.
Jus at 72-73, 116 P.3d at 714-15. Insofar as the analysis of the
Ick corresponds to ours, we agree with its reasoning. As the ICA
stated, “[ulader the plain language of the statutes and rules
governing (Tax Appeal Court (TAC)] appeals then, no separate
judgment is required and appeals must be noted within 30 days of
a TAC decision.” Ida at 73, 116 P.3d at 715. The ICA then held
that a separate judgment was not required as a prerequisite to an
appeal and jurisdiction was proper. Id, at 74, 116 P.3d at 726.

the City cites to Rhoads v. Okamura, 98 Hawai'i 407, 49
p.ad 373 (2002), for the proposition that a final judgment be

entered before an appeal from the court may be heard by this

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OO
court. In that case, this court analyzed RCCH Rule 23 with
reference to the separate judgment provision in HRCP Rule 58. In
Bhoads, the taxpayer appealed to the court from an assessment of
state income taxes. Id, at 409, 49 P.3d at 375. The court
decided the appeal by summary judgment and entered: (1) a
June 21, 2002 order granting summary judgment in favor of the tax
director that affirmed the income tax assessment against the
taxpayer, and (2) an August 8, 2001 judgment on the June 21, 2001
order that entered judoment in favor of the tax director and
against the taxpayer. Ide
‘The taxpayer appealed the judgment to this court and
argued, inter alia, that the August 8, 2001 judgment was invalid
because it was submitted by the tax director to the court more
than ten days after entry of the June 21, 2001 summary judgment
order, in violation of RCCH Rule 23.* Id, at 410, 49 P.3d at
376. This court rejected the taxpayer’s argument by adopting the
tax director’s position that:
Roch Rule 23 is @ procedural provision regarding the
separate document requirement of HRCP Rule 58 (“Every
Susment shall be set forth on 2 separate docunent.”} and it
appears to relate solely to the expedition of the court's
Bheiness.. “The separate document provision was copied from
a similar provision of the Federal Rules of Civil Procedure.
fee sole purpose is to determine when the time for appeal
commences.” ienkins v. Cades Schutte Fleming ¢ Wriaht, 76
fiaweii 115, fie, 869 P24 1352, 1337 997) A Late
Susnission of @ proposed Judgment by a party would not,
contravene the purpose behind the separate document

Fequirenent because the time for appeal Would not commence
neil the Judgment is entered,

 

 

 

+ RocH Rule 23 requires # prevailing party to submit a proposed
judgment to the ciroust juage for settlenent within ten days after 2 decision
awarding judgment.

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a

Ja. at 410-11, 49 P.3d at 376-77 (emphasis omitted). Although
Rhoads made reference to the separate document rule, it was
concerned with the requirement that a proposed judgment be
submitted to the trial court within ten days of an order granting
sunmary judgnent. The Rhoads court did not mention HRS § 232-19.
Hence, Bhoads is not dispositive.

Similarly, in In-re Cosmo World of Hawaii, Inc, 97
pawai'i 270, 271, 36 P.3d 814, 815 (App. 2001), taxpayers
appealed fron an order granting sunmary judgment to the state
pixector of Taxation, This court dismissed Cosmo World’s firet
appeal “for lack of appellate jurisdiction.” Id. at 275, 36 P34
at 619, After dismissal, “the tax appeal court entered a final
judgment” from which a timely appeal was filed and the ICR
adjudicated the case on its merits. 1d. Cosmo World, however,
is not dispositive inasmuch as, again, this court did not
consider HRS § 232-19 when it dismissed the appeal from the court
because an order granting summary judgment had not been reduced
to a separate judgment, as required by (HRCP] Rule 58. Id

c.

applying HRS § 232-19 and given that the purpose of the
separate judgment is to “make certain the matter of
appealability,” denking, 76 Hawaii at 119, 869 P.2d at 1338,
where the decision of the court finally deciding a tax appeal is

clearly ascertainable, the matter of appealability is not

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uncertain, and, thus, entry of a separate judgment on the
decision to “make certain the matter of appealability” would not
serve the purpose of the separate judgment rule. To the extent
Rhoads and Coamo World conflict with this proposition, they are
overruled. In the instant case, there was no uncertainty that
the July 23, 2002 order vacating the challenged tax assessments
and directing the City to take remedial action constituted “the
decision of the tax appeal court” that finally decided the
subject tax appeal cases. Consequently, the July 23, 2002 order
was appealable to this court by notice of appeal filed within
thirty days after the order was filed and the August 19, 2002
notice of appeal is a timely appeal of the July 23, 2002 order.
vi.

As to the second issue of jurisdiction raised by the
City, we conclude that proper authorization for their attorneys
to file appeals with the review board was tendered by the
‘Taxpayers.

AL

‘The City maintains that the appeals of the 60 fee units
for the 2000 tax year must be dismissed because the
authorizations attached to these appeals were signed by the Board
of Directors of the AORO, and not by the taxpayer, owner, or a

person under contractual obligation to pay the assessed tax as

© The parties appear not to have raised this issue in the court.

 

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—

required by ROH §§ @-12.1 (1996)" and 8-12.2 (1998)"" and Rules
6.1 (1998)! and 6.3 (1998) of the Rules of the Boards of Review
of the City and County of Honolulu. Thus, according to the City,
the Board of Directors “does not have standing to authorize a
representative to bring appeals on behalf of the owners of (flee

{ujnits.” ‘The City “acknowledges that HRS [§] 5148-93 ((1993)"")

ss ROH $ €-12.1 provides, in relevant part that

‘any taxaver or omnex who may deen himself or herself
any ampsver th gssesenent aade by the director. - Bay

Yo the board of review or
apeegl tres titctort pursuant to HRS Section 232-16 on oF
Before sanuary isth preceding the tax year, as provided in
this areiel

 

   

(Bephases added.)

© ROR § 812.2 provides, in relevant part thet

(whenever any person 2 contractual obligatios
yithe person shall have
Bars san setensed tibeal to the beard of review and the tex
reveal court and the Supreme Court, in such person’ s ow
appeal court pe tat were esseesed against such person. The
person against. whom the ‘Ssecssed shall also nave a
Pigne to appear and be he ny auch application oF
appeal

 

 

      

(emphasis added.)

Rule 6.1 state:

 

‘the notice of appeal shall (a) identity the ai
[Rvolved in the appeal, (b) state the grounds of
Gbjeceion to the sesesanent, and (c) be signed by the

oor hie thorized resreseneative. Proof
iPoRnorisation to represent taxpayer must be
Submitted with the appeal.

 

 

 

(Emphasis added.

«pute 6.9 states that “{£]ailure to comply with the provisions of
G1, and 6.2 "58 this Rule shall be grounds for dismission of the sppeal.”

ss ns § 5148-99 provides, in pertinent part, that
Iw)ithout Liniting the rights of any epartment owner,
Banager oF of
Teont ined.

 

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provides that actions may be brought by a board of directors with

respect to any cause of action relating to more than one
apartment.”

However, the City rejects this statutory directive on
the ground that “county law prevails . . . over conflicting state
law" inasmuch as “the language [of HRS § $14A-93) is Limited by

the constitutional grant of real property taxing authority to the

 

various counties” pursuant to article VIII, section 3 of the

Hawai'l Constitution,”* Weinberg v, City & County of Honolulu, 82

Hawai'i 317, 922 P.2d 371 (1996); Gardens at West Maui Vacation
Club v, County of Maus, 90 Hawai'i 334, 978 P.2d 772 (1999)? and

State ex rel Anzai v. Citv & County of Honolulu, 99 Hawai'i 508,
57 P.3d 433 (2002). The City maintains that pursuant to ROH

$§ 8-12.1 and 8-12.2 and Rules 6.1 and 6.3 of the Rules of the
Boards of Review of the City and County of Honolulu, “only a
taxpayer has standing to bring an appeal and . . . duly authorize

a representative.”

(continued)
dn elther case
aor ent ewnere, as their

Fespective interests may appear, sith resect to any cause
sLaction relating to, "nore than one apartaent

(Enphases added.)
Article VEIZ, Section 3 states

‘The taxing power shall be reserved to the State, except so
much therect as may be delegated by the legislature to the
political subdivisions, and except that all functions,
Powers and duties relating to the taxation of

Shall be exercised exclusively by the counties,
exception of the county of Kalawao. The legislature 2)
have the power to apportion state revenues among the S
political’ subdivisions

 

   
  

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In response, Taxpayers argue that (1) “[t}here is no
rule of other authority” that (a) “prescetbes any particular form
of ‘proof of authorization’ or execution by any particular
person,” (b) states “that the authorization granted under the
condominium statute or under the condominium by-laws ia somehow
inadequate," or (c) indicates “that counsel's mere assertion of
representation of . . . [Tlaxpayer{s] is not sufficient,” and
(2) “[tyhe City [cannot] impose additional requirements for the
sauthorization’ in the complete absence of the prior proper

promulgation of @ rule” under HRS chapter 91.

 

he Taxpayers’ appeal notice, which was submitted to
the board of review by the Texpayers, was signed by Roger S-
moseley, Esq. of the law firm Case, Bigelow 4 Lombardi, This
form nay be filed by the “Owner,” “Taxpayer,” or “other.” With
respect to “other,” the form states that “[w]ritten authorszation
to represent taxpayer must accompany this appeal.” (Emphasis in
original.) As previously mentioned, Taxpayers attached to this
form as proof under Rule 6.1, a document entitled “Consent to
ction Without a Meeting” (consent form) indicating that “the
president of the [AOAO], Richard Elliot, is authorized and
directed, pursuant to [HRS] Section 514A-93, to file appeals

| to retain counsel, specifically the firm of Case Bigelow &
Lombardi . . . to represent the owners of the individual

apartments affected . . . [with] the complete authority to direct

22+
 

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the appeals.” The consent form, purported to be written pursuant
to Article ITI Section 16 of the Bylaws of the AOAO of Waikiki
Shoreline, specifically addressed “the serious problem posed by
the improper assessments” for the tax year 2000 - 2001. Any
apartment owner was permitted at any time to take his or her own
appeal. On its face this consent form was signed by officers and
directors of the AOAO, was to be filed with the minutes of the
Board of Directors of the AOAO, and contained a provision that it
was to be mailed to each individual apartment owner.

Rule 6.1 states in relevant part, that “[t]he notice of

appeal shall . . . (c) be signed by the taxpayer or his duly

 

aut! representative.” (Emphasis added.) The
“authorization” document signed by the President of the AOAO
designated the law firm to file appeals. The “consent” document
extended to the President the power to give such authorization on
behalf of the individual apartment owners. Given its ordinary
meaning, “authorization” is defined as “the act of authorizing”
and “authorize” as “to endorse, empower, justify, or permit by or
as if by some recognized or proper authority.” Webster's Third
Mew Int’ Dictionary 146 (1961). The documents attached to the
‘Taxpayers’ appeal notice plainly purported to “empower [and]
permit” counsel to represent the Taxpayers." Nothing more

specific is set forth in Rule 6.1(c) as to the nature or quantun

 

We note also that under Rule 3.4(a) (1987) of the Rules of the
Boards of Review of the City and County of Honoluls, “attorneys at sw duly
Gualifsed and entitled to practice before the Supreme Court af the State of

Hawaii” cen appear before the board ins representative capacity.

23+
+**B0R PUBLICATION***
of proof of authorization required. In view of the attached

docunents, it would appear self evident that the signature and
designation of the attorney on the face of the notice of appeal
would suffice to satisfy Rule 6.1(c)-

he board of review apparently construed the provision

in this way since it did not reject the notice for “lack of

 

authorization.” We observe, also, that the City failed to rai
any objection to the authorization presented in its memorandum in
opposition. In view of the foregoing, the Taxpayers’ appeal
notice satisfied Rule 6.1 of the Rules of the Boards of Review of
the City and County of Honolulu."

vit.

AL

there being jurisdiction herein, we consider Taxpayers’

tiret argument that the City cannot promulgate a rule pursuant to
yrs § 91-1(4) (1993) and ROH $ 1-2.2(g) (1998) which will have
retroactive effect via reassessment of the subject properties.
he subpoints to this argument, Taxpayers (1) urge this court in
their reply brief to overrule Haxaii Prince or, in the
alternative, to distinguish it from the instant case, (2) argue
that HRS § 91-1(4) does not allow for the retroactive application

Mtn Light of this disposition we do not consider Texpayers’
argument thatthe Bylaws of the AORO provide contractual authorization to tile
argument chat iG, we observe that the Bylaws were not a part of the record of
the moticesg ginal Roles of Appellate Procedure (NRAP) Rule 20 (s

appeal: Saf Mornay be nade a part of the record on appesl).. References and
forth item Srebart ef the record on appeal cannot be considered. This 18 8
appendices 10 Ee jo and ssucn a practice cannot be tolerated.” Grea v. City
TeMaESS oe nonolulu, 58 Haw. 37, 39, 514 P.2d 859, 860 (2973)

 

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+**F0R PUBLICATION***

 

of a rule and that ROH § 1-2.1(g) creates a presumption that
rules are not retroactive, (3) cite Tax Appeal of County of Maui
Ma KM Hawaii Inc., 61 Hawaii 248, 915 P.2d 1349 (1996), which
allows for a refund, and (4) contend that the promulgation of =
retroactive rule creates a “catch 22” that results in an equal

protection violation. In response, the City argues that the

court “was correct in. . . concluding [as a remedy] that the
city . . . promulgate a rule pursuant to HRS chapter 91 regarding
condominium classification criteria to apply . . . for tax years

2000 and 2001,” under Hawaii Prince.

2
to deternine the deduction for inparted value [as related to a
goiz covese tax desesimene] vss cleeciy i ‘rile’ within she
aesning of HRS § S1-1(4).° 09 Hawas't at 292, 974 P.24 at 92,
imparted value.” Ii, at 369, 974 P.2d at 23, ‘The taxpayer
sprcpereten MAS SoU datertneg te cence of foperted velee tyteg cnet
party rauations avo their prosniey foe gole, curse, The, yuation

fo the Surrounding properties on # doller-for-dellar basis.” await Prince,
89 await ot 391, 974 P.2d at i.

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i

guidelines were promulgated to determine imparted value in 1985.
In

the City appraiser testified, however, that he
discontinued using the guidelines in 1994 because, due to adverse
court rulings, the guidelines caused him “too much heartache and
too much problems.” Id. He testified, however, that he retained
the guidelines “in his head.” Id. No written rules or
guidelines were used to determine imparted value after 1994. Id.
his court reviewed the credits given to various golf courses and
could not determine any coherent method for determining imparted
value. Ida at 391-92, 974 P.2d at 31-32. The City’s procedure
thus was seen as “result [ing] in a lack of uniformity and
Inequality in golf course assessments.” Id. at 392, 974 P.2d at
32.

it was concluded that the City appraiser’s unwritten
methodology for determining deductions for imparted value fell
within the definition of a rule for purposes of HRS § 91-1(4)-
Ids at 393, 974 P.2d at 33, The City was directed to follow
rulemaking procedures set forth in HRS § 91-3 before applying
imparted value deductions to golf course assessments. The City’s
total assessment of the golf course was therefore vacated and
this court “order[ed] the City to reassess the taxpayer's
property after it promulgates a rule establishing a methodology
for imparted value, pursuant to the rulemaking procedures in the

[RAPA], HRS § 91-3 (1993). Id. at 363, 974 P.2d at 23 (emphasis

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‘***FOR PUBLICATION®

 

 

added). Thus, Hawail Prince itself is an example of this court
specifically ordering the promulgation of a rule under chapter 91
and its retroactive application.

We decline Taxpayers’ invitation to overrule Hawaii
Bxince. Further, the entirety of Taxpayers’ argument that Hawai
Brince should be overruled is as follows:

Taxpayers believe that the (court, in all probability,
specified an inproper renedy in Hawai{ Prince[, aural.

years to be no indication of the Court! =
fon of the implications of the specific provisions
of Chapter 91, and/or potential violations of the equal
protection provisions o£ the U.S. Constitution, by the
application of the remedy chosen in that case.” Taxpayers!
position is that, if applied in the present case ac the City
lorges, the retroactive rulenaking remedy expressed in Hawai
Exinca, (auptal, should not be followed and should be
expressly overruled.

  

   

This argument does not contain any reasoning, supported by
citations to case law other than Hawaii Prince or other
authority, to constitute a discernible argument. Taxpayers
provide no argument as to why chapter 91 or the Equal Protection
Clause would lead to a different result, nor do they point to any
error in the reasoning of Hawaii Prince.” Accordingly, we are
not persuaded by this contention. See Wisconsin v. Pettit, 492
N.W.2d 633, 642 (Wis. Ct. App. 1992) (stating that the appellate
court “cannot serve as both advocate and judge”). Thus, we do

not overrule Hawaii Prince.

 

® this court did not consider any equal protection issue in Haxaid,
‘Exinca.
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ee
As we understand Taxpayers’ argument for distinguishing

Hawaii Prince from the instant case, they argue that in Havall
prince, the classification provisions had not been previously
applied to the golf course, whereas here, the classification
provisions had been applied prior to the reclassification
raxpayers seem to argue that in Hawaii Prince a retroactive rule
was required to avoid a continuing discrepancy between HPGC and
other similarly situated golf courses. According to Taxpayers, @
retroactive rule is unnecessary in the instant case because the
previous classification can be reverted back to and the status
quo ante maintained.

But Taxpayers have provided no authority for
distinguishing Hawaii Prince from the instant case. Taxpayers
assume that the prior classification of “Apartment” should be
reverted back to, despite the fact that the court found that the
classification criteria used for determining whether a unit is an
wapartment” was “nebulous.” Accordingly, we are not convinced
the instant case should be distinguished from Hawaii Prince.

c.
1.

With respect to Taxpayers’ subpoint 2, ROH § 1-2.1(¢
states in relevant part that “(no ordinance, resolution, o:
rules and regulations has any retrospective operation, unless
otherwise expressed or obviously intended.” (Emphasis added.

The plain language of ROH § 1-2.1(g) makes it clear that rules

28+
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can be applied retrospectively if that intent is “otherwise
expressed or obviously Intended.” We therefor reject Taxpayers’
assertion that under ROH § 1-2.1(g), @ rule can only have a
future effect and cannot have a retroactive application. “When
interpreting @ municipal ordinance, we apply the same rules of
construction that we apply to statutes.” Weinberg, 62 Hawaii at
322, 922 P.2d at 376 (quoting Bishop Square Assoc. v. City &
County of Honolulu, 76 Hawai'i 232, 234, 873 P.2d 770, 772 (1994)
(quoting Waikiki Resort Hotel v. City & County of Honolulu, 63
Haw. 222, 239, 624 P.2d 1353, 1365 (1981)). “The purpose of the
ordinance may be obtained primarily from the language of the
ordinance itself[.]” Id, The ROH grants power to promulgate
rules that are retroactive. Insofar as the court’s order may
require a rule to be retroactive, the ROH authorizes such a rule.
2.

le perceive no apparent conflict with HRS chapter 91.
HRS § 91-1(4) defines a rule as an “agency statement of general
or particular applicability and future effect that implements,

interprets or prescribes law or policy.” The definition of a

the definition of “rule” in HRS § S1-1(4) was taken from
subsection 1(2) of the Revised Model Act. Hse. Stand. com. Rep. No. 8 in 1961
House Journal, at 656, The final definition of “rule” adopted in the Model
State Auminiateative Procedire Act (1961) read as follows?

vimjule* means each agency statement of aeneral

Bepglicy, of ceseribes the ofganizaticn, procedure, oF

practice requirenents of any agency. The term includes the

Gnendnent of repeal of a prior rule, but does not include

ta) stetenente concerning only the internal managenent of an

agency. and not affecting private rights or procedures

available to the public, er (8) deciaratory rulings issued
(continued...)

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**#£0R PUBLICATION***
ee
wrule” in the Federal Administrative Procedure Act (the Federal

APA) contains language similar to HRS § 91-1(4). Tt provides at
5 U.S.C, § $51(4) that a rule is

tthe whole or a part of an agency statenent of general oF
Ebieclouiar applicability and {ature effect designed to
Paplesent, interpret, oF prescribe lew oF policy oF
Gascribing the organizstion, procedure, or practice
SeSulrencts of en agency and includes the approval or
Eedicripticn for the future of rates, wages, corporate or
Ginancial structures or reorganizations thereof, price:
finiietles, appliances, services or allowances therefor’ or
EP aiuationss costs, or accounting, or practices bearing on
any of the foregoing.

 

 

(emphasis added.) Hence both the Federal APA and HRS § 91-1(4)
refer to an “agency statenent of general or particular
applicability and future effect” that implements, interprets or
prescribes “law or policy.”

‘The United States Supreme Court discussed the
retroactive application of rules in Bowen v. Georgetown Univ.
Hosp., 488 U.S. 204 (1988). At issue was whether or not the
secretary of Health and Human Services could use the rulemaking
authority granted by Congress to promulgate retroactive
regulations setting limits on the levels of Medicare costs that
would be reimbursed. Id, at 206. Although finding that the
secretary did not have authority to promulgate retroactive cost~
Limit rvles, dd. at 215, the Court did not foreclose the

retroactive application of a rule, id, at 208. It stated:

*(,- continued)
Tporsuant to Section @, or (C) intra-agency menorenda.

= fe Acts (anended 1981), 15 U.L.A. 185 (waster ed.
Be00) (emphasis edged)

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Retroactivity ie not favored in the law. Thue,
Congressional enactnents and adainistrative rules will not.
be construed to have retroactive effect unless their
Language requires this result. By the sane principle, «
‘statutory orant of legislative rulemaking authority will
ot, as a general matter, be understood to encompass the
power to promulgate retroactive rules

 

Substantial justification for retroactive rulemaking 12
Presented, courte should be reluctant to find euch authority.
absent an'express statutory arent.

Id, at 208-09 (emphases added) (internal citations omitted).
Thus, despite the plain language of U.S.C. § $51(4), the Court
determined that a “rule” may have retroactive effect if it
contains language to that effect. In promulgating ROH § 1-
2.1(g), the City, Like Congress, expressly conveyed the power to
adopt retroactive rules in express terms. Thus, a rule
promulgated pursuant to ROH § 1-2.1(9) can be applied
retroactively if its language so requires.

This court discussed the validity of retroactive tax
legislation in Gardens at West Maui. In Gardens at West Maui,
the taxpayer, who vas an owner of a time share interest,
challenged the retroactive application of @ county ordinance that
changed the taxpayer’s real property classification from
“apartment” to “Hotel Resort,” thus subjecting the taxpayer to

higher tax rate. 90 Hawai'i at 337, 978 P.2d at 775. This court

 

stated:

The validity of retroactive tax legislation under the
due process clause depends on whether, in light of tne
ature of the tax and the circumstances in which it is laid,
the law is so harsh and oppressive as to tranagress the
constitutional limitation... . In United stares y
Garlton, (512 v.3. 26 (1994),j the United States Suprene
Court set forth two primary factors to be considered when
Setermining whether retroactive taxation violates the due
JSe. First, the court oske shether the
's purpose in enacting the legislation was

 

 

 

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‘+#4FOR PUBLICATION***

jilegitinate or arbitrary. Second, the court
sate tee iegislature acted promptly and established only
winodest period of retroactivity.

 

as at 344, 978 F.2d at 782 (internal quotation marks and
citations omitted). This court then applied the test fron
carlton and found that retroactive application of the ordinance
gid not infringe upon the taxpayer's due process rights." Id
at 345, 978 P.2d at 783. As the proposed rule referenced in the
instant case is not before us, such an analysis would be
premature. However, Gardens at West Maui and Carlton make it
evident that a tax may be applied retroactively without violating
due process.

D,

 

tn subpoint 3, Taxpayers refer to KM Hawaii. In KM
Hawaii, the County of Maui appealed from a court judgment

regarding real property tax assessments against KM Hawaii Inc.

 

9 Hawai'i at 249, 915 P.2d at 1350. The subject property was
the Hyatt Regency Maui. id, at 250, 915 P.2d at 1351, The

county assessor testified that the County used the Cost

———_——_

in United States vy, Carlton, 512 U.S, 26, 27 (1994), the Court,
hold that the seBHSEGHte appiication of an amendrent to a provision of the
held thee ente eax starute, 26 U.S.C. § 2057, Limiting the deduction for the
feces eer soles of stock to employee stock-omership plans, did not violate
proceeds of ees Clause of the Fifth Anendnent. The Court noted that

ne ove reef legisiation had repeatedly Deen upheld against due process
Ferenc eee “Eds at 30. The Court then applied # tworprong test to determing
challenges: ids thcess Clouse was violated. Id, at 32, Firat, it concluded
whether treso’a purpese in enacting the amendment to the statute was neither
SEES Cengsee ‘or groitrary. id. Second, "ene Court concluded that the
ALlegitiness oGniy a modest period of retroactivity and that Congress had
fiteg quickly in enacting it. Id. at 32.

32+

 

     

 
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Approach” for “mom and pop-type hotels” and “brand new” resort
hotels, but the Market Data Approach to assess properties like
the Hyatt, which was classified as 2 “Class A” resort hotel. Id.
at 251, 915 P.2d at 1352. The Tax Appeal Court found that the
County's assessments were not uniform and equal and were in
violation of HRS chapter 232 and the equal protection clauses of
both the federal and Hawaii Constitutions. Id. at 252, 915 P.2d
at 1353. These finding were not challenged on appeal. Id, This
court then listed three potential remedies to address the
discriminatory tax, stating that,

2 taxing authority “found to have isposed an impermissibly

Giscrininatory tax retains flexibility in responding to this

Setermanation.” I Div. of Alea!

‘43e Us, 18, 29 (1990)]. The taxing

authority may correct the inpermissible discrimination 6)

a)

and tis tax that Tt would have oald bad Te been aaseaseq in

Hhesats nether ae others in its clase; (2) retroactively

Seeing, “to the extent conasatent with other

tutional restrictions,” members of the taxpayer’ s
Class in the manner that the taxpayer had been assessed; or
(3) using a conbination of a partial refund to the taxpayer
and 2 partici retroactive assessment of the others within
the taxpayer’s class. Id, at 40-41

Id, at 256-57, 915 P.2d at 1357-58 (footnotes omitted) (emphasis

 

 

  

      

 

added). The case was remanded to the Tax Appeal Court with
instructions to allow the county to choose one of the

aforementioned remedies. Id, at 257, 915 P.2d at 1358.

 

 

2 the opinion a

 

jcribed the Cost Approach as follows: “Under the
‘cost approach,’ one determines the cost of constructing the building end
subtracts an anount for depreciation to determine the building's present value
and then adds the value of the underlying land.” of cat Mest
ELM tavals Inc,, 61 Hawai'i 248, 251, 918 F.2d 1543, 1552 T1996)

 

 

 

The Market Data Approach was described ag follows: “Under the
‘market data approach, one surveys the market to determine if there have been
a'sufticient nunber of recent voluntary sales of similar property to provide

Gopendable information a3 to the selling rate of ‘comparable property.’” Ida

 

   

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ee
As we understand Taxpayers’ argument, the first KW

Hawai cenedy of a refund should be afforded in the instant case.
put in KM Hawaii, there were clear and established methods for
assessing real property that the county was not applying
uniformly. In the present case, however, there was no rule
promulgated regarding classification for the “Hotel end resort”
category and the classification for “Apartment” was “nebulous.”
accordingly, were such a renedy appropriate, it would be
premature at this point to order it inasmuch as the rule has not
yet been promulgated and an assessment nade.

the Taxpayers’ fourth subpoint is that the use of
retroactive rule will result in a “Catch 22” because,

[ijn short: a new rule ig not a rule if it is applied
Lge S2eivery. “even if the rule could be sppiied
recreacrjuely, it sould have to be required to be applied to
Te'eeSSomin {um apartment in the county involved in any
BUS Ttie) of short-term rental, because the ordinances [ROH
PRLS} require uniformity. The condominium spartments
Soe dawslved in this appeal, [sic] cannot have their
BCheassents changed, so application of a new rule
Setreactively cannot be done uniformly

 

 

 

qo the contrary, as mentioned previousiy, ROH § 1-2.1(g) allows
for the retroactive application of a rule if the rule expressly
indicates that it should so apply or if the intent to apply it
retroactively is obvious. See discussion, supra. ROH § 8-7.1(a)

states in relevant part:

ne director of finance shall cause the fair market value of
INI taxable real property to be determined and annvslly:
SUesaed by the market data and cost approaches to value
Seine apprepriste systenatic methods suitable for mass
DELOgIBETOR properties for texation purposes, s0 selected
Ep ipelied te cbtein, as far-as possible, uniform anc
Gqualised assessnente throughout the county

 

 

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(Emphasis added.) This ordinance does not require complete and
exact uniformity as Taxpayers seem to suggest but, rather,
provides that the valuations should be as uniform and equal as
possible. Also, Taxpayers merely suggest that there are other
properties that are similarly situated to the properties in the
instant case without providing any evidence of the existence of
auch properties, and in the absence of specific cases we need not
decide such a question.
vant.

In their reply brief, Taxpayers ask this court to take
judicial notice “that the form of notice sent out by the City did
not comply with the specific and clear notice requirements of
[ROH § 6-2.1(c)]." Taxpayers argue that a change in the
classification of property is not effective unless the City
complies with the requirements therein. This argument was not
raised before the court. “As a general rule, if a party does
not raise an argument at trial, that argument will be deemed to
have been waived on appeal; this rule applies in both criminal
and civil cases.” State v, Moses, 102 Hawaii 449, 456, 77 P.3d
940, 947 (2003); see, e.c., State vs Hoalund, 71 Haw. 147, 150,
785 P.2d 1311, 1313 (1990) (Generally, the failure to properly
raise an issue at the trial level precludes a party from raising
that issue on appeal.”). Accordingly, we do not address this

argument.

 

% — gaxpayers algo did not raise the issue of proper notice in their
opening Brief:

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mx.

In their second argument Taxpayers maintain that “the
tax appeal court should have restored . . . the disputed units to
their preexisting (‘Apartment’) classification.” Taxpayers do
not specify for what period the classification should be changed
to “apartment.” In ordering promulgation of a rule and
reassessment thereunder, the court impliedly rejected Taxpayers’
argument that the classification of Waikiki Shoreline should be
restored to “Apartment.”

Neither party directs this court to any authority
pertaining to this issue other than Haaii Prince. However,
hawaii Prince is not dispositive because that case did not
address restoration of a classification. The parties’ arguments
focus on their views as to how Waikiki Shoreline should be

classified - either as an “apartment” or “hotel and resort."

 

ie cannot say, based upon the arguments of the parties, that the
court was wrong inasmuch as the court determined the “Apartment”
classification criteria was “nebulous.”
x
raxpayers’ last argument is that “the tax appeal court
should have ordered the refund of money collected on the basis of
the improper assessments and should not have permitted the City

 

the City reiterates that the court “wes correct in not
reclassifying the subject units to, ‘Apertnent’* because the classification
roclassifving for determining whether a unit is an “apartment” were 2350
geiteria oged for tir suneary judgment menorandun, Taxpayers requested thet
Pagbulouse,  Moriel the... former classification os ‘Apartment./* In its
sees. the court denied ail remaining relief requested,

 

 

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SSS

to keep [the] funds collected{.]” The City maintains that the
court “was correct in not ordering the Clty to refund the monies
collected . . . pending reassessment.” In their summary judgment
nesorandum, Taxpayers requested a “refund of . . . taxes... in
excess of those which would have been otherwise collected had the
properties not been inproperly reclassified as ‘Hotel and
resort.’" By its order, the court impliedly rejected Taxpayers’
argument that a refund should be ordered.

The parties have provided only limited argument on this
issue and have referred this court only to ROH § 6-1.7 and to
jlavaii Prince. Again, the entirety of Taxpayers’ argument that a
refund should be ordered is as follows:

Since the Tax Appesl Court did not order the classification
te revert to ita previous status, as Apartment” with the
accompanying lower fate, the Tax Appeal Court coulé not have
Graered the refund of the excessive taxes collected.

However, it is clear that even under the present
Circumstances, the City ie not entitled to Keep the taxes
Collected, ROH Sec, B-1.7 states in parti “The director

Shall coliect ail taxes under thie chapter according to the
Sesesanents se"Gince there is presently no assossnent
for the apartment’ in guestion for the tax years 2000 end
2001, the director of Budget and Fiscal Services has no
Guthority to keep the soney collected. This is problematic,
Since (Taxpayers) actually agree that the director should be
Gneitied to keep the amount attributable to taxation on an
‘Apartaent” classification. The only real solution to this
anomaly 14 to order the epartments returned to “Apartment”
abe refund the balance under established procedures.

       

 

 

 

ROH § 8-1.7 does not address refunds either explicitly or
impliedly. Although Taxpayers do not specifically argue KM
Hawaii in the portion of their Opening Brief addressing refund,
it appears, as stated supra, that they rely on that case.
However, as noted previously, the renedies set forth in KY Hawaii

were imposed upon a finding that a taxing authority had imposed

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a
an impermissibly discriminatory tax. No such finding has been

made in the instant case.

the City maintains that Hawaii Prince is dispositive.
In Hawaii Prince, however, the taxpayer did not request a refund
and the court did not order one pending reassessment. 69 Hawaii
at 28-29, 974 P.2d at 33-34. In any event, the parties do not
cite to any law or doctrine compelling such a course.” Hence,
we cannot say that the court was wrong in not ordering a refund.

xr.

Based on the foregoing, we affirm the court's July 23,

2002 order granting in part and denying in part Taxpayers’ motion

for summary judgment.

 

on the brief:

Roger S. Moseley (Case

Bigelow & Lombardi) for eta Aen ane

appellants-appellants.

susan A. Bender, Deputy Pecetes OM tec enuy ries
Corporation counsel,

City & County of Honolulu,
for appellee-appelle

Yane, Drags th»

 

> For example, ROH § 6-12.12(a) provides in relevant part that

[1in any case of any appeal to the tax appeal court, $0
percent of the tax paid upon the amount of the assessment
Rctusily in dispute and in excess of that adnitted by the
Cexpayer shall, pending the final determination of the
Seneals be paid by the director into the "litigated claims
SeBSank.n” Tr the’ final determination is in whole or in part
[e’gaver of the appealing taxpayer, the director shell repay
£0 the Eaxpayer out of the account]

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