Source: http://hi.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20151222_0001648.HI.htm/qx
Timestamp: 2017-11-21 21:06:20
Document Index: 25200868

Matched Legal Cases: ['§ 207', '§ 207', '§ 207', '§ 220', '§ 207', '§ 207', '§ 207', '§ 207', '§ 207', '§ 207']

HAWAIIAN HOMES COMMISSION; JOBIE M.K. MASAGATANI, in her capacity as Chairperson of the Hawaiian Homes Commission and the Director of the Department of Hawaiian Home Lands; WILLIAM KÄ HELE RICHARDSON, MICHAEL P. KAHIKINA, RENWICK V.I. TASSILL, DOREEN NÄ PUA CANTO, GENE ROSS DAVIS, KATHLEEN PUAMAE'OLE CHIN, WALLACE A. ISHIBASHI, and DAVID B. KA'APU [1], in their capacities as members of the Hawaiian Homes Commission; and the DEPARTMENT OF HAWAIIAN HOME LANDS, Appellees-Appellants
APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT. (CIVIL NO. 08-1-1855-09).
On the briefs: Diane K. Taira, Matthew S. Dvonch, Deputy Attorneys General, for Appellees-Appellants.
Moses K.N. Haia, Alan T. Murakami, (Native Hawaiian Legal Corporation), for Appellant-Appellee.
[137 Hawai'i 73] NAKAMURA, C.J.
Appellees-Appellants the HHC, its Chairperson and members, and DHHL (collectively, DHHL) appeal from the Final Judgment entered by the Circuit Court.[3] On appeal, DHHL argues that the Circuit Court erred in concluding: (1) that HHCA § 207.5[4] applies to the Kalawahine Project; and (2) that DHHL was therefore required to comply
[137 Hawai'i 74] with the rulemaking requirements of HHCA § 207.5 before incorporating the DCCRs into homestead leases granted to Kalawahine Project residents. DHHL contends that HHCA § 207.5 does not apply to the Kalawahine Project because the Project was developed pursuant to HHCA § 220.5.[5] DHHL further contends that it properly issued the homestead leases for the Kalawahine Project pursuant to HHCA § 207(a),[6] which DHHL asserts permits it, without promulgating rules, to impose conditions, such as DCCRs, on residential lot leases. Accordingly, DHHL argues that the DCCRs are valid and enforceable conditions of the homestead leases it issued for the Kalawahine Project.
DHHL notes that if HM is correct that HHCA § 207.5 requires DHHL to promulgate rules in order to impose the DCCRs as conditions of the Kalawahine Project's homestead leases, then the validity of the sales contracts under which HM members purchased their homes would be called into question. HHCA § 207.5 requires DHHL to prescribe rules for the " method of disposition" as well as " the terms, conditions, covenants, and restrictions as to the use and occupancy" of single-family and multifamily units falling within the scope of HHCA § 207.5. Just as DHHL did not prescribe . rules regarding the DCCRs, it did not prescribe rules regarding the method of disposition of units in the Kalawahine Project. DHHL asserts that HM's argument, if taken to its logical conclusion, would require invalidation of the sales contracts under which HM members acquired their residences.
As explained in greater detail below, we conclude that HHCA § 207.5 applies to the Kalawahine Project and that DHHL should have promulgated administrative rules before incorporating the DCCRs into the homestead leases issued to the Kalawahine Project residents. We further conclude that independent of the homestead leases, the Kalawahine Project residents are bound by the DCCRs pursuant to their sales contracts with KIC, and that the DCCRs, which are intended to benefit the entire planned community, remain subject to enforcement by the Association. Accordingly, we affirm the Circuit Court's Final Judgment to the extent that it vacated the decision of the HHC and declared that under HHCA § 207.5, DHHL was required to promulgate rules before incorporating the DCCRs into the homestead
[137 Hawai'i 75] leases issued to the Kalawahine Project residents. We vacate the Circuit Court's Final Judgment to the extent that it declared that the DCCRs are invalid and not subject to enforcement by the Association.
Prior to construction of the homes, KIC sent letters to certain applicants on DHHL's homestead waiting list, informing them of the lot selection process for the Kalawahine Project. A draft copy of the DCCRs was attached to these letters. Selected applicants then entered into a " Deposit Receipt and Sales Contract" (Sales Contract) with KIC for the construction and purchase of homes in the Kalawahine Project.[8] Each Sales Contract between KIC and the selected applicants provided that everyone purchasing homes in the Kalawahine Project would be subject to the DCCRs as follows:
Buyer acknowledges that the Declaration[9]] provides that all owners in the Project are subject to the Declaration, copies of which have been received by the Buyer. The Declaration provides, among other things, that (a) Buyer automatically becomes a member of the Association upon issuance of the Lease to Buyer, (b) that Buyer must pay assessments to the Association (including assessments for upkeep maintenance and repair of certain common areas within the Project), (c) that no construction, or alteration of improvements on the Property is permitted except in accordance with certain design rules and guidelines, and (d) that the Property is subject to certain restrictions o[n] use, all as more fully set forth in the Declaration. The Declaration also provides that initiation and monthly or other periodic assessments must be paid.
On March 28, 2000, the DCCRs were recorded in the Bureau of Conveyances of the State of Hawai'i. The purposes of the DCCRs are to " enhance the orderly and proper development and use" of the planned community, " to protect the value, desirability and attractiveness of the [Kalawahine] Project, and to promote the quality of improvements and uses of the [planned community] as a whole[.]" The DCCRs provide that its covenants, conditions, and restrictions create mutual equitable servitudes upon each lot in favor of every other lot in the planned community and create reciprocal rights and obligations among all persons and entities having any right, title, or interest in and to any lot within the planned community.
The DCCRs established the Association and imposed various duties and obligations
[137 Hawai'i 76] on the Association to be performed for the maintenance and improvement of the Kalawahine Project, including the responsibility for managing and maintaining the common areas. The DCCRs also empowered the Association to, among other things: (1) levy assessments on members of the Association to cover the Association's costs and expenses in performing its duties; and (2) adopt and amend rules to govern the use of the common areas and to govern other matters, such as the collection and disposal of refuse and the maintenance and preservation of the Kanaha Stream. The Articles of Incorporation ...