NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

NO. CAAP-20-0000342

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

GREG ALLEN, JR. and JOANNE B. ALLEN, Appellants-Appellees/CrossAppellants, v. PLANNING DEPARTMENT OF THE COUNTY OF

KAUAI/PLANNING COMMISSION OF THE COUNTY OF KAUAI; DONNA APISA, in

her official capacity as Chairperson of the Planning Commission,

Appellees-Appellants/Cross-Appellees

APPEAL FROM THE CIRCUIT COURT OF THE FIFTH CIRCUIT

(CASE NO. 5CC191000036)

SUMMARY DISPOSITION ORDER

(By: Leonard, Acting Chief Judge, Hiraoka and Wadsworth, JJ.)

The County of Kaua#i, its Planning Department and

Planning Commission, and Donna Apisa, in her official capacity as

Chair of the Commission,1 (collectively, the County) appeal, and

Greg Allen, Jr. and Joanne B. Allen (the Allens) cross-appeal,

from the Final Judgment entered by the Circuit Court of the Fifth

Circuit on April 1, 2020.2

 The Final Judgment reversed the

Commission's "Findings of Fact, Conclusions of Law, [and]

Decision and Order" issued on February 7, 2019. For the reasons

explained below, we vacate the Final Judgment, vacate the

Decision and Order in part, and remand this case to the circuit

1 Donna Apisa, the current chair of the Kaua#i County Planning

Commission, is substituted for former chairs Sean Mahoney and Glenda NogamiStreufert under Hawai#i Rules of Appellate Procedure Rule 43(c)(1).

2 The Honorable Kathleen N.A. Watanabe presided.

Electronically Filed

Intermediate Court of Appeals

CAAP-20-0000342

07-AUG-2024

08:23 AM

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court for further proceedings consistent with this summary

disposition order.

The Allens own a single-family home (the Wailua River

House) on the island of Kaua#i. On June 9, 2017, the Department

issued the Allens a Zoning Compliance Notice. The Allens were

told they were operating a transient vacation rental3 outside a

Visitor Destination Area4 in violation of Kaua#i County Code

(KCC) § 8-17.8(a) (1987). They were directed to stop using the

property as a transient rental and to cancel all transient

accommodation commitments for the property.

On August 22, 2017, the Department issued the Allens a

Notice of Violation & Order to Pay Fines. It determined that the

Allens continued to illegally offer the Wailua River House as a

transient vacation rental after they received the Zoning

Compliance Notice. The Allens were fined $10,000 and ordered to

correct their violation within 15 days, or face additional fines

of $1,000 per day.

The Allens appealed the Order to Pay Fines to the

Commission. A hearings officer conducted a contested case

hearing on October 15, 2018. The Department requested a fine of

$130,000. The hearings officer's report and recommendation was

filed with the Commission on January 3, 2019.

The Commission issued the Decision and Order on

February 7, 2019. The Commission found that the Allens had a

state Transient Accommodation Tax License, but their property was

not in a Visitor Destination Area and did not have a

Nonconforming Use Certificate. The Commission concluded that the

Allens received notice of their violation and that they would be

3 "'Transient vacation rental' means a dwelling unit which is

provided to transient occupants for compensation or fees, including club fees,

or as part of interval ownership involving persons unrelated by blood, with a

duration of occupancy of 180 days or less." Kaua#i County Code § 8-1.5

(1987).

4 "'Visitor destination area (VDA)' means those areas designated as

Visitor Destination Areas on County of Kaua#i Zoning Maps." Kaua#i County Code

§ 8-1.5.

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subject to civil fines for continued violations. The Commission

affirmed the Zoning Compliance Notice and the Order to Pay Fines

and imposed a fine of $130,000.

The Allens appealed to the circuit court on March 8,

2019. The circuit court entered "Amended Findings of Fact,

Conclusions of Law, [and a] Decision and Order" on March 19,

2020. The court reversed the Commission's Decision and Order and

vacated the Allens' fines. The Final Judgment was entered on

April 1, 2020. This appeal by the County and cross-appeal by the

Allens followed.

The County's Appeal

The County makes two arguments:5 (1) the Commission's

conclusion that the Allens unlawfully ran a transient vacation

rental in violation of the Kaua#i Comprehensive Zoning Ordinance

was supported by substantial evidence; and (2) the Commission's

conclusion that the Allens' continuing violation supported the

imposition of an initial $10,000 fine and $120,000 in additional

fines was supported by substantial evidence.

In this Hawaii Revised Statutes (HRS) § 91-14 secondary

appeal, we review the Commission's decision to determine whether

the circuit court was right or wrong to reverse the decision. 

Dao v. Zoning Bd. of Appeals, 144 Hawai#i 28, 38, 434 P.3d 1223,

1233 (App. 2019). The determinations at issue are mixed findings

of fact and conclusions of law. We review mixed findings and

conclusion under the clearly erroneous standard because they

depend on the facts and circumstances of the case before the

Commission. Id. at 39, 434 P.3d at 1234. A conclusion supported

5 The County's statement of the points of error challenges a number

of the circuit court's findings of fact. A circuit court reviewing an

agency's decision and order in a contested case under Hawaii Revised Statutes 

§ 91-14 acts as an appellate court; it does not review the evidence in the

agency record to make its own findings of fact. Sierra Club v. Bd. of Land &

Nat. Res., 154 Hawai#i 264, 284, 550 P.3d 230, 250 (App. 2024), cert. granted,

No. SCWC-22-0000516, 2024 WL 3378462 (July 11, 2024). We decline to review

the circuit court's findings of fact and instead analyze the issues presented

by the County's arguments.

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by the agency's findings of fact and applying the correct rule of

law will not be overturned. See Est. of Klink ex rel. Klink v.

State, 113 Hawai#i 332, 351, 152 P.3d 504, 523 (2007).

(1) The Kaua#i County Code provides:

Single Family Transient Vacation Rentals.

(a) . . . [S]ingle family transient vacation rentals are

prohibited in all areas not designated as Visitor

Destination Areas.

KCC § 8-17.8 (1987).

The KCC also provides:

Enforcement Against Illegal Transient Vacation Rentals.

. . . .

(b) Advertising of any sort which offers a property as a

transient vacation rental shall constitute prima facie

evidence of the operation of a transient vacation

rental on said property and the burden of proof shall

be on the owner, operator, or lessee to establish that

the subject property is not being used as a transient

vacation rental or that it is being used for such

purpose legally. . . .

KCC § 8-17.11 (1987).

The Department presented evidence that the Allens owned

the Wailua River House; the house was advertised as a per-night

rental on VRBO.com and wailuariverhouse.com; and the house was

located outside a mapped Visitor Destination Area. The

Department also presented evidence that on August 2, 2017 (two

months after the Zoning Compliance Notice was issued), the Allens

offered to rent the Wailua River House to an undercover

investigator for 8 days for $6,731.24, sending a rental agreement

and a credit card authorization. The Allens presented no

evidence that the Wailua River House was not being used as a

transient vacation rental or that they had a Nonconforming Use

Certificate. The record contains substantial evidence supporting

the Commission's finding and conclusion that the Allens "have not

overcome the [rebuttable] presumption that they operated the

[Wailua River House] as a Transient Vacation Rental outside of a

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Visitor Destination Area without a [Nonconforming Use

Certificate.]"

The Allens argue the Department did not submit a map

showing the Visitor Destination Area to the hearings officer. 

But a Department enforcement inspector testified she reviewed the

Department map and determined the Wailua River House was outside

a Visitor Destination Area. The Allens offered no evidence to

the contrary.

The Allens cite Dao and argue the Department did not

present "evidence of an actual rental to a transient occupant." 

Dao involved the City and County of Honolulu's Land Use Ordinance

(LUO). The LUO defined "transient vacation unit" as a dwelling

unit "provided for compensation to transient occupants for less

than 30 days[.]" 144 Hawai#i at 29 n.1, 434 P.3d at 1224 n.1

(emphasis added). In Dao, a City inspector testified that an

unidentified man said he was renting Dao's property for three

days. Id. at 30, 434 P.3d at 1225. We held the evidence was

insufficient to establish an LUO violation because "[t]here are

no details of a monetary transaction or other indicia of

compensation or any other supporting details or evidence of any

kind." Id. at 44, 434 P.3d at 1239. The Dao opinion does not

say whether the LUO contained an evidentiary presumption similar

to KCC § 8-17.11(b).

Here, the Department presented evidence sufficient to

establish a prima facie presumption of a violation under KCC

§ 8-17.11(b). The burden then shifted to the Allens to show that

the Wailua River House "is not being used as a transient vacation

rental or that it is being used for such purpose legally." Id.

The Allens presented no such evidence. Under these

circumstances, the Commission's finding and conclusion that the

Allens violated KCC § 8-17.8(a) was not clearly erroneous. 

(2) The Kaua#i County Code provides:

Enforcement, Legal Procedures and Penalties.

. . . .

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(b) Civil Fines.

(1) If the Director of the Planning Department

determines that any person, firm or corporation

is not complying with a notice of violation, the

Director may have the party responsible for the

violation served . . . with an order pursuant to

this Section. The order may require the party

responsible for the violation to do any or all

of the following: (A) correct the violation

within the time specified in the order; (B) pay

a civil fine not to exceed $10,000 in the

manner, at the place, and before the date

specified in the order; (C) pay a civil fine up

to $10,000 per day for each day in which the

violation persists, in the manner and at the

time and place specified in the order. . . .

KCC § 8-3.5 (1987) (emphasis added).

The Kaua#i County Code also provides, in relevant part:

Penalty.

An owner of any unit which is operated in violation of this

Article, and/or any other person, firm, company,

association, partnership or corporation violating any

provision of this Article, shall each be fined not less than

$500 nor more than $10,000 for each offense. . . . If any

person fails to cease such violation within one month, such

person shall be subject to a new and separate violation for

each day the violation continues to exist.

KCC § 8-17.6 (1987).

The Zoning Compliance Notice told the Allens that they

could be fined "up to $10,000.00 and/or up to $10,000.00 per day,

should the violation(s) persist." The Order to Pay Fines imposed

a civil fine of $10,000 and ordered the Allens to correct their

violation within 15 days, or "[a]n additional fine of $1,000 per

violation, per day, for each day in which such violation persists

shall be levied." The Commission's conclusion affirming the

$10,000 fine for the Allens' violation was supported by

substantial evidence, consistent with KCC §§ 8-3.5 and 8-17.6,

and not clearly erroneous.

A week before the October 15, 2018 contested case

hearing, the Department discovered the Allens were still

advertising the Wailua River House as a transient vacation

rental. According to the Department, the VRBO.com "website now

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contains 12 separate visitor reviews indicating visitors that

stayed in the Allen's [sic] property subsequent to them receiving

the zoning compliance notice and cease and desist order." The

Department asked that the $10,000 fine be increased "to $130,000

to encompass the continued violation." But the Order to Pay

Fines, which imposed the $10,000 fine for the advertising

violation, told the Allens that "[a]n additional fine of $1,000

per violation, per day, for each day in which such violation

persists shall be levied." (Emphasis added.)

The record does not support a finding or conclusion

that the additional $120,000 in fines was based on $1,000 per day

for each day the Allens continued to advertise the Wailua River

House transient vacation rental beginning 15 days after the Order

to Pay Fines was served. Instead, the record indicates that the

Department requested an additional $10,000 fine for each of the

12 visitor reviews. But the Department did not issue a zoning

compliance notice or a notice of violation and order to pay fines

for any of those 12 transient rentals. KCC § 8-3.5(b)(1). The

Commission thus exceeded its statutory authority by imposing the

additional $120,000 civil fine. HRS § 91–14(g)(2) (Supp. 2018).

The Allens' Cross-Appeal

The Allens argue that the 180-day period in the KCC's

definitions of Transient and Transient Vacation Rental "is unduly

burdensome and unreasonably restricts the free use of [their]

property" and is "arbitrary and does not bear a reasonable

relation to the public health, safety, morals or general

welfare." They cite the Hawai#i Landlord-Tenant Code, which

allows month-to-month rentals,6 and provisions in the Revised

Ordinances of Honolulu7 and the Hawai#i County Code8 that specify

6 HRS § 521-71 (2018).

7 Revised Ordinances of Honolulu § 21-10.1 (1990 & Supp. No. 31). 

The Revised Ordinances of Honolulu was amended effective November 18, 2022 to

specify 90-day periods for transient accommodations, occupants, and vacation

(continued...)

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30-day periods for transient or short-term vacation rentals. 

They cite no provision in the Hawai#i Constitution or the United

States Constitution. We nevertheless construe their argument as

an attack on the County's police power. See Lum Yip Kee, Ltd. v.

City & Cnty. of Honolulu, 70 Haw. 179, 190, 767 P.2d 815, 822

(1989) (noting that "the power to zone is an exercise of the

police power of a municipality").

The Allens made their argument to the Commission. The

Commission made no finding or conclusion on the 180-day issue,

nor could it have. See HOH Corp. v. Motor Vehicle Licensing Bd.,

69 Haw. 135, 143, 736 P.2d 1271, 1276 (1987) ("The administrative

agency is not empowered to pass on the validity of the statute

. . . ."). The circuit court did not address the issue. 

Accordingly, we remand this case to the circuit court to decide

whether the KCC's 180-day minimum rental period for single-family

homes outside a Visitor Destination Area was a proper exercise of

the County's police power. See id. at 143, 736 P.2d at 1276

(remanding to circuit court to determine constitutionality of

regulatory statute).

Disposition

The circuit court's April 1, 2020 Final Judgment is

vacated. The February 7, 2019 Decision and Order is affirmed to

the extent it vacated the additional $120,000 fine. This case is

remanded for the circuit court to decide whether the KCC's 180-

day minimum rental period for single-family homes outside a

Visitor Destination Area was a proper exercise of the County's

police power. If the circuit court concludes it was, it should

affirm the Commission's finding of a violation and imposition of

the $10,000 fine; if the circuit court concludes it was not, it

7(...continued)

units. Revised Ordinances of Honolulu § 21-10.1 (2021).

8 Hawai#i County Code § 25-1-5 (eff. Apr. 1, 2019).

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should reverse the Commission's February 7, 2019 Decision and

Order on that basis.

DATED: Honolulu, Hawai#i, August 7, 2024.

On the briefs:

/s/ Katherine G. Leonard

Chris Donahoe, Acting Chief Judge

Deputy County Attorney,

for Planning Department of /s/ Keith K. Hiraoka

the County of Kaua#i/ Associate Judge

Planning Commission of

the County of Kaua#i; /s/ Clyde J. Wadsworth

Donna Apisa, in her official Associate Judge

capacity as Chairperson of

the Planning Commission.

Gregory W. Kugle,

Joanna C. Zeigler,

for Greg Allen, Jr.

and Joanne B. Allen.

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