Case Name: Angelo PELOSI, Plaintiff/Counterclaim Defendant-Appellant, v. WAILEA RANCH ESTATES, a Hawai'i general partnership, John Kean, Stephen Pitt, Satish Gholkar, Eduardo F. Bello, Hugh Jeffrey Farrington, Stephen K. Rink, Tina Sohn, individually and as Personal Representative of the Estate of Robert C. Sohn, Deceased, Defendants-Appellees, and Stephen M. Swanson, Louise S. Swanson, Margaret S. Smith, Batte T.L. Smith, Nahbut L. Smith, Peter Tucker, Lynne Coleman Tucker, Marc O. Yoshizumi, Davis Roland King, Dorian Keyes King, Dennis Rush, Cindy Rush, O'Green Estate, Bob Nick Oosterveen, Diane Oosterveen, Jane Greenspun, Ronald G. Mann, Edna Joan Mann, Stephen Fowler Chadwick, Annice Buckner Chadwick, Gerald K. Wong, Chu II Wong, John Does 1-10, Jane Does 1-10, Doe Partnerships 1-10, Doe Corporations 1-10, and Doe Governmental Entities 1-10, Defendants/Counterclaimants-Appellees
Court: Hawaii Intermediate Court of Appeals
Jurisdiction: Hawaii
Decision Date: 1999-02-10
Citations: 91 Haw. 522
Docket Number: No. 20254
Parties: Angelo PELOSI, Plaintiff/Counterclaim Defendant-Appellant, v. WAILEA RANCH ESTATES, a Hawai‘i general partnership, John Kean, Stephen Pitt, Satish Gholkar, Eduardo F. Bello, Hugh Jeffrey Farrington, Stephen K. Rink, Tina Sohn, individually and as Personal Representative of the Estate of Robert C. Sohn, Deceased, Defendants-Appellees, and Stephen M. Swanson, Louise S. Swanson, Margaret S. Smith, Batte T.L. Smith, Nahbut L. Smith, Peter Tucker, Lynne Coleman Tucker, Marc O. Yoshizumi, Davis Roland King, Dorian Keyes King, Dennis Rush, Cindy Rush, O’Green Estate, Bob Nick Oosterveen, Diane Oosterveen, Jane Greenspun, Ronald G. Mann, Edna Joan Mann, Stephen Fowler Chadwick, Annice Buckner Chadwick, Gerald K. Wong, Chu II Wong, John Does 1-10, Jane Does 1-10, Doe Partnerships 1-10, Doe Corporations 1-10, and Doe Governmental Entities 1-10, Defendants/Counterclaimants-Appellees.
Judges: BURNS, C.J., WATANABE, and ACOBA, JJ.
Reporter: Hawaii Reports
Volume: 91
Pages: 522–545

Head Matter:
985 P.2d 1089
Angelo PELOSI, Plaintiff/Counterclaim Defendant-Appellant, v. WAILEA RANCH ESTATES, a Hawai‘i general partnership, John Kean, Stephen Pitt, Satish Gholkar, Eduardo F. Bello, Hugh Jeffrey Farrington, Stephen K. Rink, Tina Sohn, individually and as Personal Representative of the Estate of Robert C. Sohn, Deceased, Defendants-Appellees, and Stephen M. Swanson, Louise S. Swanson, Margaret S. Smith, Batte T.L. Smith, Nahbut L. Smith, Peter Tucker, Lynne Coleman Tucker, Marc O. Yoshizumi, Davis Roland King, Dorian Keyes King, Dennis Rush, Cindy Rush, O’Green Estate, Bob Nick Oosterveen, Diane Oosterveen, Jane Greenspun, Ronald G. Mann, Edna Joan Mann, Stephen Fowler Chadwick, Annice Buckner Chadwick, Gerald K. Wong, Chu II Wong, John Does 1-10, Jane Does 1-10, Doe Partnerships 1-10, Doe Corporations 1-10, and Doe Governmental Entities 1-10, Defendants/Counterclaimants-Appellees.
No. 20254.
Intermediate Court of Appeals of Hawai'i.
Feb. 10, 1999.
Certiorari Granted April 7, 1999.
Kevin H.S. Yuen (Law office of Kevin H.S. Yuen, of counsel); Edward F. Mason , on the briefs, Wailuku, for plaintiff/counterclaim defendant-appellant.
Gary Robert, on the brief, Lahaina, for defendants/eounterclaimants- appellees, except Tina Sohn.
Wilson M.N. Loo and Steven B. Jacobson (Torkildson, Katz, Fonseca, Jaffe, Moore & Hetherington, of counsel) Honolulu, for Tina Sohn, individually and as Personal Representative of the Estate of Robert C. Sohn, Deceased.
BURNS, C.J., WATANABE, and ACOBA, JJ.
Edward F. Mason is deceased, having died on October 11, 1997.

Opinion:
Opinion of the Court by
WATANABE, J.
The primary issue in this appeal is whether PlaintiffiCounterclaim DefendanL-Appel-lant Angelo Pelosi (Pelosi) is entitled to a mandatory injunction requiring the removal of a roadway and tennis court that were constructed on Lot 29 of the Maui Meadows III (MM III) Subdivision, in clear violation of an MM III restrictive covenant prohibiting the lot from being used "except for residential purposes." The Second Circuit Court (circuit court) answered the foregoing question in the negative and also declined, in the exercise of its discretion, to order removal of the roadway and tennis court.
We conclude that the circuit court should have issued an injunction, ordering removal of the tennis court. However, due to Pelosi's laches in bringing the action to enforce the covenant as to the roadway, Pelosi is not entitled to a mandatory injunction to remove the roadway. Moreover, the circuit court did not abuse its discretion when it balanced the equities and declined to order removal of the roadway.
BACKGROUND
A. Pelosi I
This case has previously been before this court. In Pelosi v. Wailea Ranch Estates (Pelosi I), 10 Haw.App. 424, 876 P.2d 1320, reconsideration denied, 10 Haw.App. 631, 879 P.2d 591, cert. denied, 77 Hawai'i 373, 884 P.2d 1149 (1994), we concluded that (1) the restrictive covenant at issue clearly and unambiguously required that "only one single-family dwelling and such buildings as are strictly accessory to the use of that dwelling may be constructed on an MM III houselot," id. at 437, 876 P.2d at 1327; (2) the restrictive covenant was clearly violated when Defendant-Appellee Wailea Ranch Estates, a general partnership whose partners were Defendants-Appellees John Kean (Kean), Stephen Pitt (Pitt), Satish Gholkar (Gholkar), Eduardo F. Bello (Bello), Hugh Jeffrey Far-rington (Farrington), and Stephen K. Rink (Rink) (the partnership and partners will hereinafter be collectively referred to as "the WRE Defendants"), constructed across Lot 29 of the MM III Subdivision, a tennis court and roadway which were accessory to residences in a completely different subdivision, the WRE Subdivision, id. at 441, 876 P.2d at 1329; and (3) the circuit court was wrong when it refused to enter a declaratory judgment that the WRE Defendants and the individual Defendants/Counterelaimants-Ap-pellees (Individual Defendants) (collectively, Defendants) "had breached the MM III Covenants because they were not using Lot 29 for residential purposes[.]" Id. at 433, 876 P.2d at 1325.
In Pelosi I, we remanded the case to the circuit court, with instructions that it determine whether Pelosi, the owner of MM III Lot 28, the houselot adjoining Lot 29, was entitled to a mandatory injunction to remove the violation of the restrictive covenant. Id. at 446, 876 P.2d at 1331. More specifically, we instructed:
If the [circuit] court determines that Defendants deliberately and intentionally violated the MM III Covenants or intentionally assumed the risk of such violation, a mandatory injunction should issue forthwith, ordering Defendants to remove the roadway and tennis court on Lot 29.
If, on the other hand, the' [circuit] court determines that Defendants did not inten tionally violate the MM III Covenants or intentionally assume the risk of such violation, then the [circuit] court may balance the equities in determining whether to grant injunctive relief by ordering removal of the roadway and/or tennis court. If the [circuit] court concludes that the relative hardships to the parties preclude an award of injunctive relief, then the [circuit] court shall hold a hearing to determine whether [Pelosi] is entitled to damages resulting from Defendants' breach of the MM III Covenants which are in addition to the $20,000 in damages already awarded to him for his nuisance cause of action.
Id.
B. Pelosi II
On remand following our decision in Pelosi I, Pelosi filed a motion for entry of mandatory injunction "based upon the trial transcript and the exhibits admitted in evidence at the trial." Following a hearing on Pelosi's motion on July 14, 1995, the circuit court, on August 24, 1995, entered its "Findings on Issues Submitted by the Intermediate Court of Appeals," "Conclusions of Law," and "Order" (August 24, 1995 Order on Remand). The court found and determined as follows:
Question No. 1. Whether defendant deliberately and intentionally violated MM III Covenants? No.
Question No. 2. Whether defendant intentionally assumed the risk of such violation? No.
Question No. 3. In balancing the equities should the court grant injunctive relief by ordering removal of the roadway and/or tennis court? No.
Question No. 4. What, if any, damages should be assessed the defendants? Further hearing is necessary.
The pertinent facts of this case reflect that:
1) the County of Maui approved the consolidation of Lot 29 with twenty (20) adjacent acres which became the Wailea Ranch Estates upon purchase by defendant developers.
2) The County of Maui approved the Wailea Ranch Estates subdivision to include the construction of a road and tennis court upon Lot 29.
3) Without Lot 29 as access to the subdivision, no approval could have been given by the County.
4) No other access is available and by necessity, Lot 29 was included as part of the subdivision.
5) Defendants purchased the property with subdivision and development as their purpose and would have had no reason to do so if no subdivision or development were possible or permissible.
6) County and state laws do not prohibit roads or tennis courts from being built in rural subdivisions.
7) The County of Maui had no objection to and indeed permitted the construction of a tennis court and road on Lot 29.
8) Roads and tennis courts exist in the Maui Meadows subdivision. Although the restrictive covenants are not County or state laws and are to be considered separately and individually, considering the milieu of governmental regulations, real estate practice, construction and comparable uses, defendants' decision to proceed with a tennis court and road on Lot 29 cannot be found to have been deliberate and intentional violations of the MM III Covenants.
9) Indeed, it would appear that the defendants' expertise in law, construction, real estate development, and architecture gave credence to their conclusion as to the proper interpretation of the restrictive covenants and not necessarily that they knew or should have known better.
10) The finding of a jury of their peers that the defendants were not using Lot 29 for residential purposes would seem to have confirmed the defendants' and their experts' opinions in interpreting the use of Lot 29.
11) Plaintiff is himself well educated, [and] experienced and practicing real estate person, and was living adjacent to the defendants [sic] development with a clear observation as to the progress of the construction. He had the opportunity to determine from the instigation of the defendants [sic] plans in 1986 whether to involve himself but expressed no objections until the spring of 1988. Even if plaintiffs version were accepted, construction on Lot 29 was substantially completed by July 1987 way before plaintiff alleges he met with defendants in late 1987 and warned defendants.
12) Since 1986, development has not been enjoined or delayed and additional party defendants have been added who have purchased lots and/or built upon them. The Wailea Ranch Estates may no longer exist as the original entity it once was.
13) Subjecting the defendants as well as subsequent innocent purchasers to the in-junctive relief sought by plaintiff would create substantial hardship on their part by effectively terminating access to the subdivision and thereby creating an illegal subdivision.
14) The facts presented at trial regarding damages suffered by plaintiff resulted in an award of $20,000 for nuisance. Further hearing and briefing are required for any additional argument for damages.
15) The issues submitted to this [cjourt by the Intermediate Court of Appeals do not include a resolution of zoning and land use practices or matters by the defendants and have not heretofore been considered nor will they for purposes of this decision.
CONCLUSIONS OF LAW
1) Since defendants did not deliberately or intentionally violate MM III Covenants, injunctive relief is not appropriate.
2) Since defendants did not assume the risk of violating the MM III Covenants, injunctive relief is not appropriate.
3) Since in balancing the equities, the injunctive relief of removal of the road and/or tennis court would not serve justice, injunctive relief is not appropriate.
4) A hearing on damages resulting from defendants' breach of the MM III Covenants in addition to the $20,000 already awarded for nuisance is warranted.
On September 5, 1995, Pelosi filed a motion to vacate the circuit court's August 24, 1995 Order on Remand. The motion was denied by the circuit court on November 22, 1995.
On October 27, 1995, Pelosi, believing that the circuit court should have allowed him to produce additional testimony before "balancing the equities" and deciding whether to award him injunctive relief or damages, filed a "Motion for Additional Testimony on the Issue of Access." In support of his motion, Pelosi attached the affidavit of a licensed professional engineer who stated that an existing fire break road could be upgraded to provide access to the WRE Subdivision. This motion was denied by the circuit court pursuant to an order dated November 24, 1995.
On April 18, 1996, the circuit court conducted a hearing to determine what damages, if any, should be awarded to Pelosi for WRE's breach of the MM III Covenants. At the hearing, the circuit court limited the evidence to that in "regards to diminution in value and loss of economic use" of Pelosi's property as a result of WRE's breach of the MM III Covenants. The circuit court reasoned that because it had ruled that "there was no deliberate or intentional breach of the covenants, the court is kind of bound by its previous ruling, and accordingly!,]" the evidence presented at the hearing would have to be limited as such.
On June 25,1996, the circuit court entered "Findings of Fact [FsOF] and Conclusions of Law [CsOL]," as well as a Judgment which, consistent with our instructions in Pelosi I, found and declared that "Defendants are in breach of the [MM III] Declaration of Restrictive Covenants date [sic] November 5, 1971 because Defendants are not using Lot 29 of the [MM III] Subdivision . for residential purposes." The Judgment also awarded Pelosi two dollars in "nominal damages" and ordered that Pelosi be reimbursed the sum of $16,770 for attorney fees and costs previously paid to Defendants, together with interest thereon, from April 30, 1991 at the rate of ten percent (10%) per annum.
On July 5, 1996, Pelosi filed a "Motion to Amend, Vacate or Reconsider [the June 25, 1996 FsOF and CsOL and] to Vacate Judgment and/or for New Trial." On September 27, 1996, the circuit court denied Pelosi's motion and entered an "Amended Judgment" that consolidated the circuit court's previous rulings into a final judgment.
On October 8, 1996, Pelosi filed a "Motion to Alter 'Amended Judgment' Entered September 27, 1996," pointing out that the September 27, 1996 Amended Judgment did not meet the requirements of finality under Ha-wai'i Rules of Civil Procedure (HRCP) Rule 58 and the guidelines set forth by the Hawai'i Supreme Court in Jenkins v. Cades, 76 Hawai'i 115, 869 P.2d 1334 (1994). On October 28,1996, Pelosi filed his notice of appeal, and on November 25, 1996, the circuit court granted Pelosi's October 8, 1996 Motion to Alter Amended Judgment and entered a Post-Appeal Judgment. . Pelosi filed an Amended Notice of Appeal on December 19, 1996.
ISSUES ON APPEAL
Pelosi contends that (1) the circuit court wrongly determined that he was not entitled to a mandatory injunction requiring the removal of the tennis court and roadway from Lot 29; (2) the circuit court abused its discretion when it balanced the equities and denied him injunctive relief, without first allowing him to adduce testimony on whether an alternative access 'to WRE Subdivision was available; (3) FsOF Nos. 3, 4, 5, 7, 8, 9, 10, 11, 12, and 13 were clearly erroneous; and (4) CsOL Nos. 1, 2, and 3 were wrong. Pelosi has not appealed the circuit court's award of two dollars in nominal damages.
DISCUSSION
A. Whether Pelosi Established His Entitlement to Mandatory Injunctive Relief
In Pelosi I, we specifically instructed the circuit court to apply the principles set forth in Sandstrom v. Larsen, 59 Haw. 491, 583 P.2d 971 (1978), in determining whether Pe-losi was entitled to a mandatory injunction to remove the roadway and tennis court on Lot 29. 10 Haw.App. at 446, 876 P.2d at 1331. In Sandstrom, the Hawai'i Supreme Court held that
where a property owner "deliberately and intentionally violates a valid express re-strietion running with the land or intentionally 'takes a chance,' the appropriate remedy is a mandatory injunction to eradicate the violation."
59 Haw. at 500, 583 P.2d at 978 (emphasis in original) (quoting Peters v. Davis, 426 Pa. 231, 231 A.2d 748, 752 (1967)). The supreme court explained that in such a situation, a plaintiff is entitled to mandatory injunctive relief "without the necessity of consideration by the [trial court] of the relative hardship between» the parties," id., "regardless of the relative damage which may ensue from the injunction" id. at 501, 583 P.2d at 979, and "even absent a showing of the amount of damage which has in fact been caused by that breach." Id. (citations omitted). Moreover, embracing the holding of the Vermont Supreme Court in McDonough v. W.W. Snow Constr. Co., 131 Vt. 436, 306 A.2d 119 (1973), the supreme court held that where a defendant landowner "actually or constructively knew of the [land use] restriction" and yet proceeded with a construction project in violation of the restriction "without first obtaining a resolution of the covenant," the defendant "acted at its own peril," for " 'he who takes land with notice of such a restriction will not in equity and good conscience be permitted to act in violation of the restriction.' " Sandstrom, 59 Haw. at 499, 583 P.2d at 978 (emphases added) (quoting McDonough ).
More recently, in Fong v. Hashimoto, No. 19424, slip op. at 50, 1998 WL 71951, - Hawai'i -, -, - P.2d -, - (App. February 20, 1998), cert. granted (April 2, 1998), this court was called upon to determine whether a mandatory injunction should have been granted, requiring the defendant landowners to remove portions of any structure on their lot which violated a one-story, fifteen-foot setback restrictive covenant that had been incorporated as part of the defendants' warranty deed for the lot. The defendants, who had built a two-story home, had argued that they should not be required to remove the second story because they did not have "actual knowledge of the one-story restriction until after [the plaintiffs] brought it to their attention [which was] after the second story [of the home] was completed[,]" id. at 52, at -, - P.2d at -, and consequently, could not have intentionally and deliberately violated the restrictions nor intentionally assumed the risk of such a violation. Id. (emphasis in original).
In deciding Fong, we noted that "[w]hile the defendants in Scmdstrom were found to have had both actual and constructive notice of the height restriction they violated, the supreme court indicated that actual or constructive notice would support the granting of a mandatory injunction." Id. (emphases in original) (citation omitted). Based on our review of the record, we concluded that the Fong defendants had "constructive notice" of the covenant because: (1) their deed "provided that the conveyance was subject to the restrictions and covenants contained in the [previous owners'] deed . [and] review of that deed would have revealed the height and setback restrietions[,]" id. at 53, at -, - P.2d at -, and (2) " '[w]here a covenant is contained in a prior instrument within the successor's direct chain of title conveying that land in fee simple, the successor is charged with constructive notice of the covenant.'" Id. (citation omitted). Responding to the defendants' argument that they should be relieved of fault because they had been informed by their building contractor, who had examined all the relevant restrictions on construction of their home, that the construction of a two-story home would comply with all legal requirements, id. at 54, at -, - P.2d at -, we stated that the defendants' " 'mistaken assumption that they were acting legally and properly did not confer immunity upon them from the right of the plaintiffs . to seek equitable enforcement of the restriction.' " Id. (brackets omitted, quoting Sandstrom, 59 Haw. at 500, 583 P.2d at 978).
Under Sandstrom and Fong, therefore, mandatory injunctive relief must be granted to eradicate a violation of a restrictive covenant if two elements are present: (1) the defendant had actual or constructive knowledge of the restrictive covenant; and (2) despite such knowledge, the defendant deliberately and intentionally proceeded with construction violative of the covenant or intentionally assumed the risk of violating the covenant without first obtaining a resolution of the covenant. We examine, therefore, whether the record reveals the presence of those two elements in this case.
1.
The record overwhelmingly indicates that the WRE Defendants had actual and constructive notice of the restrictive covenant governing Lot 29 but nevertheless deliberately and intentionally proceeded to construct the roadway and tennis court on the lot or intentionally assumed the risk of violating the covenant, "without first obtaining a resolution of the restrictive covenant."
According to the record, when the WRE Defendants acquired Lot 29 by warranty deed on August 26, 1986, the deed expressly specified that the property was being conveyed subject to the MM III "[restrictive covenants and conditions contained in Declaration dated November 5, 1971, recorded in said Bureau of Conveyances in Liber 8043 on Page 464." Since these covenants were in the WRE Defendants' "direct chain of title," the WRE Defendants clearly had "constructive notice of the covenant." Fong at 53, at -, - P.2d at -.
Additionally, the evidence establishes that the WRE Defendants had actual knowledge of the covenant's existence. Their marketing brochure for the WRE Subdivision, for example, contained the following statement acknowledging the existence of the MM III restrictive covenants: "Maui Meadows lacks effective restrictive covenants which has resulted in a somewhat uneven quality of homes [.] " Moreover, the testimony of various WRE partners confirmed that the WRE Defendants were well-aware of the MM III restrictive covenants. For example, Kean, an experienced real estate developer and general contractor, admitted that he had previously owned a houselot in MM III which was subject to the same restrictive covenants that regulated Lot 29. Rink, a lawyer who practiced primarily in the area of real estate, stated that he had reviewed the MM III covenants during the creation of the WRE Subdivision. Bello, a real estate broker, testified that he was quite familiar with the MM III restrictive covenants, since he had owned a houselot in MM III for about ten years and had "transacted and been part of several sales up there[.]" Farrington, an architect and contractor, testified that over the past fifteen years, he had been dealing a lot with "covenants, guidelines, restrictions^]"
There is also substantial evidence that the WRE Defendants, despite their constructive and actual knowledge of the restrictive covenants governing Lot 29, intentionally and deliberately developed and moved ahead with plans to construct a roadway and tennis court on the lot, in direct violation of the covenant. Moreover, even when Pelosi noticed construction activity on Lot 29, began asking questions about what was transpiring, and expressed concerns that the construction appeared to violate the covenant, the WRE Defendants were not candid with Pelosi about their plans for the lot and continued their construction activity, without seeking a declaratory judgment or other resolution of the covenant issue.
Furthermore, even when Pelosi's legal counsel sent a certified letter dated May 18, 1988 to Rink, as attorney for the WRE Defendants, formally requesting that the roadway surface be removed from Lot 29 and that no tennis court be erected on Lot 29 because such construction would be violative of the MM III Covenants, the WRE Defendants did not seek a resolution of the covenant issue. Instead, Rink responded with a letter dated May 26,1988, in which he stated, in part:
Mr. Pelosi has been successful in harassing our workers and delaying completion of the project, however, the partnership will not concede that he is in the right. There is no law or regulation that prevents the use as intended. A tennis court is a permitted use as ancillary to park and recreational facilities and is permitted on residential land. There is no prohibition on placing private driveways on residential land. The partnership will not accede to your demands and intends to completed [sic] the tennis court.
(Emphasis added.)
In our view, the foregoing evidence clearly establishes the presence of the two elements that would entitle Pelosi to a mandatory injunction against the WRE Defendants. Therefore, if the WRE Defendants were still the owners of Lot 29, we would not hesitate to conclude, in' accordance with Sandstrom and Fong, that Pelosi is entitled to a mandatory injunction, ordering the WRE Defendants to remove the roadway and tennis court.
2.
It appears to be undisputed, however, that the interest of the WRE Defendants in Lot 29 has been transferred to the Individual Defendants or other owners of lots in the WRE Subdivision, as tenants in common. Although the Individual Defendants presumably had at least constructive notice of the restrictive covenant at issue, there is no evidence that they participated in any way in the construction of the roadway or tennis court that were in violation of the restrictive covenant. As to the Individual Defendants, therefore, the record does not indicate the presence of the two elements necessary for Pelosi to be entitled to a mandatory injunction eradicating the covenant violations.
The thorny dilemma that confronts us, then, is whether the Individual Defendants, who succeeded to the interest of the WRE Defendants in Lot 29 and had no part in breaching the restrictive covenant, can be required to bear the brunt of any mandatory injunction that Pelosi is entitled to enforce against the WRE Defendants.
3.
In Sandstrom, the appellees sued to enforce a restrictive covenant and sought a mandatory injunction, requiring the appellants to remove the top story of the appellants' residential structure. By the time the appeal was decided, the appellees had apparently sold their residence. The Hawai'i Supreme Court noted that if the appellees had in fact sold their property
there may be a valid question as to whether appellees continue to be the proper parties for purposes of the enforcement of the mandatory injunction. There is some indication that a party, after selling all interest in its relevant property, can no longer proceed with enforcement of in-junctive relief granted in its favor in connection with rights attaching to that property.
Sandstrom, 59 Haw. at 502, 583 P.2d at 979 (emphasis in original).
In this case, it is the party against whom injunctive relief should be granted which has transferred its interest in the property. The question confronting us, therefore, is whether Pelosi lost his entitlement to mandatory injunctive relief as against the WRE Defendants because the WRE Defendants transferred their interest in Lot 29 to the Individual Defendants.
From a public policy standpoint, we believe that where a property owner deliberately or intentionally violates, or intentionally assumes the risk of violating, a restrictive covenant running with the property and thereafter transfers the property to an "innocent purchaser," it would be inequitable to preclude a person seeking to enforce the covenant from entitlement to mandatory injunc-tive relief merely because the violator of the covenant no longer holds an interest in the property. At the same time, we recognize that it may be unfair in certain situations to require an "innocent purchaser" of property on which a prior landowner has deliberately and intentionally violated or intentionally assumed the risk of violating a restrictive covenant to bear the brunt of a mandatory injunction to remove the covenant violation.
In Sandstrom, the appellants conceded that their two-story home was constructed in violation of a covenant restricting the height of any structure to "one-and-one-half stories." However, they raised the affirmative defenses of abandonment and changed con ditions in arguing that the covenant could not be enforced against them. Alternatively, they argued that the trial court should not have issued a mandatory injunction requiring them to remove the top story of their home, without considering the relative hardship to the parties. Rejecting the appellants' arguments, the Hawai'i Supreme Court initially disagreed with the appellants that the covenant was no longer enforceable because it had either been abandoned or its purpose had been destroyed due to changed circumstances. The supreme court stated that "to support a finding of abandonment, it must be shown that the lot owners of the subdivision acquiesced in substantial and general violations of the covenant within the restricted area[,]" id. at 497, 583 P.2d at 976, a showing that had not been made. The supreme court also held that
in order to warrant a refusal to enforce a restriction, any change in conditions must be so great or radical as to neutralize the benefits of the restriction and destroy its purpose. Moreover, if the benefits of the original restriction can still be realized for the protection of the subdivision properties, no sufficient change of conditions will be recognized so as to defeat the restriction.
Id. at 498, 583 P.2d at 977 (quotation marks and citations omitted). The supreme court observed that the construction of a high-rise condominium nearby did not diminish the value of the restrictive height covenant but actually enhanced its protective value by making the remaining view of the subdivision residents "all the more valuable and worthy of preservation." Id. Therefore, the restrictive covenant remained enforceable.
Having determined that the covenant was enforceable, the supreme court then analyzed whether the trial court had erred by issuing a mandatory injunction to require removal of that part of their home which violated the restrictive height covenant, "without first considering the relative hardship between the parties." Id. In concluding that no error had been committed, the supreme court emphasized that mandatory injunctive relief to eradicate the covenant violation is the proper remedy "where a property owner deliberately and intentionally violates a valid express restriction running with the land or intentionally takes a chance" of violating the covenant. Id. at 500, 583 P.2d at 978 (emphasis in original, internal quotation marks omitted). The supreme court explained that "the relative hardships to the parties has [sic] no application to the award of final relief' in such instances because "the court is enforcing an established legal right embodied in the covenants[.]" Id. at 499, 583 P.2d at 978.
Clearly, under Sandstrom, the relative hardship to the WRE Defendants was irrelevant to any determination of whether a mandatory injunction should issue against them, since, with actual and constructive knowledge of the covenant, they acted at their own peril in proceeding with the construction of the roadway and tennis court " 'without first obtaining a resolution of the covenant.' " See Sandstrom, 59 Haw. at 499, 583 P.2d at 978. The Individual Defendants maintain, -however, that the relative hardships they would suffer should be weighed in considering whether a mandatory injunction should issue against them. We agree.
In Horvath v. Gladstone, 97 Nev. 594, 637 P.2d 531 (1981), the Nevada Supreme Court held, on similar facts, that the equitable principle of relative hardship is available to "a purchaser who has performed no act in violation of the restrictions and who merely purchased a house which contained an existing violation of the restrictions^]" Id. at 533. The supreme court thus distinguished the "innocent purchaser" situation from that of an owner with both actual and constructive notice of a covenant who nevertheless violates the covenant. Id.
We examine, therefore, whether the circuit court properly determined, after weighing the relative hardships, that injunctive relief should not issue in this case.
4.
In this case, the circuit court's determination that, upon "balancing the equities," in-junctive relief for removal of the roadway and/or tennis court "would not serve justice," appears to be premised on the following findings of fact:
11) [Pelosi] . was living adjacent to the defendants [sic] development with a clear observation as to the progress of the construction. He had the opportunity to determine from the instigation of the defendants [sic] plans in 1986 whether to involve himself but expressed no objections until the spring of 1988. Even if [Pelosi's] version were accepted, construction on Lot 29 was substantially completed by July 1987 way before [Pelosi] alleges he met with [the WRE Defendants] in late 1987 and warned [the WRE Defendants].
12) Since 1986, development has not been enjoined or delayed and additional party defendants have been added who have purchased lots and/or built upon them. The Wailea Ranch Estates may no longer exist as the original entity it once was.
13) Subjecting the defendants as well as subsequent innocent purchases [sic] to the injunctive relief sought by [Pelosi] would create substantial hardship on their part by effectively terminating access to the subdivision and thereby creating an illegal subdivision.
Our review of the record indicates that there was substantial evidence adduced below to support the circuit court's findings that the roadway was substantially completed by July 1987 and that Pelosi did not express concerns about the roadway until late 1987 at the earliest. Pelosi, in his opening brief, admits that "[i]n mid-1987 construction work on Lot 29 progressed to the point where it became apparent to [Pelosi] that it was going to be used for a roadway access to [the WRE] subdivision." Pelosi also testified that in October or November 1987, he asked for and received from WRE partner Bello a packet of materials about the WRE Subdivision, which included: a map of the subdivision, a price list of the nine lots for sale that indicated that Lots 1, 2, 3, 4, 5, 8, and 9 were already sold, and an offering circular describing the subdivision.
Since Pelosi waited until May 1988 to formally request that the WRE Defendants remove the roadway and until August 1988 to file the instant action, we cannot conclude that the circuit court erred when it considered Pelosi's delay, balanced the equities, determined that closing up the roadway would deprive the Individual Defendants of access to the WRE Subdivision and create too much of a hardship on them, and consequently, declined to award Pelosi mandatory injunctive relief.
Our review of the record on appeal reveals no evidence, however, to support a finding that construction of the tennis court was substantially completed by July 1987. The evidence reveals instead that when it became apparent that a roadway to a new subdivision was being constructed on Lot 29 sometime in 1987, Pelosi asked for and received a packet of materials about the WRE Subdivision. The materials indicated that a tennis court was to be built for residents of the Subdivision but did not indicate where on the lot the tennis court was to be constructed. When Pelosi began to ask the WRE Defendants questions about what was transpiring on Lot 29, he was not given direct answers. Consequently, Pelosi began his own investigation to determine what was happening on Lot 29. During a meeting with several WRE Defendants in October or November 1987, Pelosi specifically asked them whether a tennis court would be built on Lot 29. Although the initial plans for the WRE Subdivision submitted to the County of Maui (County), as drawn up in 1986, called for a tennis court to be constructed on Lot 29, the WRE Defendants did not answer Pelosi's question affirmatively; instead, they told him they were "considering" the placement of a tennis court on Lot 29. Unsatisfied with this response, Pelosi, in November 1987, wrote to several government agencies, in an effort to locate the WRE Subdivision plans submitted to the County, learn whether Lot 29 was to be used for a tennis court, and determine who approved the construction of a roadway and tennis court on the lot. On April 8,1988, the County, in response to Pelosi's inquiry, wrote a letter to Pitt, stating in part as follows:
It is our understanding that you plan to construct a tennis court on a part of Lot [29] . of the [WRE] subdivision. Said lot is designated as a private roadway, and as such, its use is restricted to access and utility purposes. Hence, construction of a tennis court is not allowed.
(Emphasis added.) The clear implication of the County's letter is that as of April 8,1988, the tennis court had not yet been constructed. In addition, a letter from Rink to the County, dated April 8, 1988, indicated that the tennis court had not yet been constructed on Lot 29. In the letter, Rink stated that because no objection had earlier been made by the County to the WRE Subdivision plans, the lots in the WRE Subdivision had been sold with a commitment that the tennis court would be built. Finally, in May 1988, after the County had determined that a roadway and tennis court on Lot 29 would not violate any county or state laws, and after Pelosi was unable to convince the WRE Defendants that a roadway and tennis court on Lot 29 would nevertheless violate the MM III covenant, Pelosi retained an attorney, who sent Rink a certified letter on May 18, 1988, demanding that the roadway be removed from Lot 29 and cautioning him that erecting a tennis court would aggravate the violation of the covenant. In a May 26, 1988 letter responding to the request from Pelosi's attorney, Rink stated: "The partnership . intends to completed [sic] the tennis court." True to Rink's words, the WRE Defendants did actually proceed to construct the tennis court, and Pelosi filed the underlying suit on August 26, 1988, seeking, among other remedies, mandatory injunctive relief to remove the roadway and tennis court.
In light of the foregoing evidence, FOF No. 11, insofar as it can be construed as a finding by the circuit court that the tennis court was completed in July 1987, is clearly erroneous. Moreover, in view of the clear evidence in the record that (1) the WRE Defendants were not candid with Pelosi when he asked them if -they intended to build a tennis court on Lot 29, (2) Pelosi actively sought to determine whether a tennis court was planned for Lot 29, (3) Pelosi voiced his strong objection to the construction of a tennis court on Lot 29, both to the WRE Defendants and the County, (4) Pelosi retained an attorney to file suit against the WRE Defendants, and (6) Pelosi warned the WRE Defendants that a tennis court would be in violation of the restrictive covenant governing MM III lots, we cannot conclude that Pelosi's failure to file the underlying lawsuit until August 1998 constituted laches that would deprive Pelosi of any entitlement to mandatory injunctive relief as to the tennis court.
B. Whether Pelosi Should Have Been Allowed to Adduce Testimony on the Availability of an Alternative Access to the WRE Subdivision
Pelosi claims that the circuit court abused its discretion when it refused to allow him to adduce testimony on whether an alternative access to the WRE Subdivision was available. We disagree.
The record reveals that on remand, Pelosi moved for entry of mandatory injunction "based on the trial transcript and the exhibits admitted in evidence at the trial." It was only after the circuit court balanced the equities and denied Pelosi the injunctive relief he requested that Pelosi filed a motion to allow him to adduce additional testimony on the access issue. In light of Pelosi's earlier request that the circuit court decide the appropriateness of the mandatory injunction remedy based on the evidence admitted at trial, we cannot conclude that the circuit court abused its discretion when it refused to allow Pelosi a second chance to prove his entitlement to a mandatory injunction.
C. The FsOF
Pelosi contends that FsOF No. 3, 4, 5, 7, 8, 9, and 10 were contrived, irrelevant, and clearly erroneous. We conclude that while these findings were not clearly erroneous, they were irrelevant to the issue of whether Defendants had violated the restrictive covenant at issue in this case.
For example, FsOF No. 3, 4, 5, 7, and 8 support Defendants' contention that the use of Lot 29 for a roadway and tennis court for the adjoining WRE Subdivision did not violate any state or county laws, the County of Maui had no objection to the use of Lot 29 for a roadway and tennis court, and the County of Maui would not have approved the WRE Subdivision if Lot 29 had not been available as an access to the subdivision. The fact that the roadway and tennis court were permissible uses of Lot 29 under state and county law, however, does not relieve the WRE Defendants from a covenant that is more restrictive than the law:
Restrictive covenants do not supersede or in any way affect the requirements of an already existing zoning ordinance. If the restrictive covenant is less restrictive than the ordinance, the ordinance prevails, and if the restrictive covenant is more restrictive than the ordinance, the covenant prevails as to purchasers; . Conversely, a zoning ordinance cannot destroy, impair, abrogate, or enlarge the force and effect of an existing restrictive covenant; that is, a valid restriction upon the use of property is not terminated, superseded, or nullified by the enactment of a zoning ordinance, nor is the validity of the restriction thereby affected. Zoning ordinances if less stringent do not diminish the legal effect of private building restrictions, and the rezoning of property for purposes other than residential does not supersede the original plat restrictions so as to prevent the enforcement of such restrictions.
20 Am.Jur.2d Covenants, Etc. § 242, at 658-59.
In view of our legal conclusion in Pelosi I that the MM III restrictive covenant prohibited use of Lot 29 for a roadway and tennis court for the WRE Subdivision, 10 Haw.App. at 441, 876 P.2d at 1329, it is irrelevant that Defendants' expertise gave credence to their conclusions that a roadway and tennis court were permitted on Lot 29, FOF No. 9, and that the jury's determination that Lot 29 was being used for residential purposes confirms the correctness of Defendants' expert opinions, FOF No. 10.
D. The CsOL
Pelosi's final argument on appeal is that the circuit court erred in entering CsOL No. 1, 2, and 3, all of which concluded that injunc-tive relief was not appropriate in this case. In light of our foregoing discussion, we agree that the CsOL were erroneous insofar as the tennis court was concerned.
CONCLUSION
Accordingly, we affirm the circuit court's denial of mandatory injunctive relief to Pelo-si, requiring removal of the roadway on Lot 29. However, we conclude that Pelosi was entitled to a mandatory injunction, ordering Defendants to remove the tennis court from Lot 29. Therefore, we vacate that part of the circuit court's judgments and orders which denied Pelosi a mandatory injunction as to the tennis court and remand this case to the circuit court for entry of a mandatory injunction order requiring the removal of the tennis court on Lot 29.
. The named Individual Defendants/Counter-claimants-Appellees at the time we issued our decision in Pelosi v. Wailea Ranch Estates (Pelosi I), 10 Haw.App. 424, 876 P.2d 1320, reconsideration denied, 10 Haw.App. 631, 879 P.2d 591, cert. denied, 77 Hawai'i 373, 884 P.2d 1149 (1994), were Stephen M. Swanson, Louise S. Swanson, Margaret S. Smith, Batte T. L. Smith, Nahbut L. Smith, Peter Tucker, Lynne Coleman Tucker, Marc O. Yoshizumi, Davis Roland King, Dorian Keyes King, Dennis Rush, Cindy Rush, O'Green Estate, Bob Oosterveen, Jane Greenspun, Ronald G. Mann, Edna Joan Mann, Stephen Fowler Chadwick, Annice Bucker Chadwick, Gerald K. Wong, and Chu II Wong.
Subsequently, on remand, Defendants-Appel-lees Tina Sohn (Tina) and Robert C. Sohn (Robert) (collectively, the Sohns), who had purchased four lots in the Wailea Ranch Estates (WRE) Subdivision from prior owners, were joined as additional defendants for "any and all injunctive relief claims involving their interest in the subject Lot 29." R.A. v.5 at 1107-08. Consequently, any reference to "Individual Defendants" in this opinion also includes the Sohns. Although the Sohns were served with copies of pertinent pleadings filed in this action, they never filed an answer to the complaint or entered an appearance before the circuit court because, according to Tina, by the time they were served with the pleadings, the circuit court had already denied Pelosi any injunctive relief. Robert subsequently died, and Tina, as administrator of Robert's estate, was substituted as a party to this appeal.
. For example, during a meeting with Defendant-Appellee Hugh Jeffrey Farrington, Stephen K. Rink (Rink), and John Kean in either July or late 1987, Plaintiff/Counterclaim Defendant-Appellant Angelo Pelosi (Pelosi) specifically asked them whether a roadway and tennis court for the WRE Subdivision were being built. Pelosi was told that a "private driveway" was being built and a tennis court was being "considered." Yet, a March 12, 1986 letter from WRE partner Stephen Pitt (Pitt) to Alvin K. Fukunaga, Director of Public Works for the County of Maui (County), clearly reveals that the roadway and tennis court were part of the WRE Defendants' initial plans for Lot 29. In that letter, Pitt states:
The County's preliminary subdivision approval dated January 20th, 1986, Section l.C requested that a fire hydrant be installed to serve Lot [29]. It is requested that this requirement be dropped due to the fact that Lot [29] is a roadway lot. The remnant of the land remaining after roadway construction is smaller than County requirements for residential construction. The intent in this instance is to construct a tennis court on this portion of land.
(Emphases added.)
There is other documentary evidence in the record that also reflects the WRE Defendants' express intention to build a tennis court on Lot 29. In a letter to Kenneth Kong (Kong) of the Land Use and Codes Administration Office of the County dated April 8, 1988, WRE partner Rink expressed dismay at having just learned of a telephone conversation between Kong and WRE partner Satish Gholkar (Gholkar) in which Kong advised Gholkar that a tennis court was not allowed on Lot 29. Rink informed Kong that it was the understanding of the WRE Defendants that they had gotten preliminary approval from the County for the construction of the tennis court. Rink further stated:
Had [WRE] ever been put on notice that there would be problems in proceeding as planned, an adjustment in this development would have been made to conform with any reasonable requirements that may have been imposed.
At this late date, the course of action has already been planned and committed to, with the sanction of your department. [WRE partners] have no alternative but to meet their obligations to Purchasers of lots and intend to conclude the project as originally planned.
Id.
. There is no direct evidence in the record as to whether the individual Defendants/Counterclaim-ants-Appellees (Individual Defendants) had actual or constructive notice of the restrictive covenant at issue in this case. However, we presume that the deeds of the Individual Defendants to their respective lots in the WRE Subdivision incorporated the Maui Meadows III (MM III) Covenants so that under the principles articulated in Sandstrom v. Larsen, 59 Haw. 491, 583 P.2d 971 (1978), and Fong v. Hashimoto, No. 19424, slip op. at 50, - Hawai'i -, -, - P.2d at -, - (App. February 20, 1998), cert. granted, - Hawai'i -, - P.2d - (April 2, 1998), the Individual Defendants had at least constructive notice of the requirements of the covenant.
. The appellants in Sandstrom contended that the restrictive height covenant had been abandoned and could no longer be enforced against them. 59 Haw. at 496, 583 P.2d at 976. In support of their contention, the appellants pointed to the presence of other structures in their subdivision which were two to three stories in height and claimed that the presence of these structures evidenced acquiescence in and a mutual disregard of violations of the covenant. Id.
. The Sandstrom appellants contended that because of changed conditions, specifically, the construction of a thirteen-story condominium building in close proximity to their subdivision, the height restrictive covenant could no longer be enforced against them. 59 Haw. at 498, 583 P.2d at 977.