Opinion ID: 2582211
Heading Depth: 4
Heading Rank: 2

Heading: the plaintiffs' claim for breach of trust

Text: With respect to the plaintiffs' claim for breach of trust, the plaintiffs argue on appeal that [t]he State, as trustee of the ceded lands trust, may be held accountable under standards applicable to trustees of private trusts. They also assert that [t]he questions raised by [their] breach of trust claim do not present a political question because (1) they are in fact the `traditional fare' of the judiciary, (2) there are adequate judicially manageable standards for resolving them, and (3) they do not involve an initial policy determination of a kind best left to the legislature. In response, the State contends that the plaintiffs have failed to state a claim for breach of trust because, inter alia, [1] [t]he State's fiduciary duty is owed not only to native Hawaiians, but also to the general public. OHA now relegates the general public to non-beneficiaries. Even if the State settled a claim against the State to benefit the general public at the expense of OHA  a proposition that is legally unsustainable . . . there was no breach of trust. Neither the Admission Act nor the Hawaii Constitution confers any preference or priority on the purpose of the betterment of native Hawaiians . . . [and] [2] whether or not a trustee has acted with the requisite prudence is adjudged not hindsightfully by outcome but solely by the circumstances existing at the time of the act. In determining whether a trustee has acted prudently, the court must look at the facts as they existed, unaided by subsequent events. Despite paying lip service to the circumstances existing at the time principle, OHA has erroneously premised its breach of trust claim solely on the alleged outcome that the Forgiveness Act caused the demise of Act 304 and therefore the decision in OHA I. OHA does not and cannot even allege that the State's decision to accept the Forgiveness Act was not prudent at the time. (Emphases in original.) The State correctly states that the court is not required to accept conclusory allegations on the legal effect of the events alleged, such as the allegation that the State breached its fiduciary duties to OHA. Likewise, this court also need not accept the conclusion that [t]he State did not breach its trust duties. Rather, as previously stated, we must first decide whether the plaintiffs stated a proper claim for breach of trust. In the instant case, the complaint alleges that the State breached its trust duties by: (1) failing to challenge the positions set forth in the FAA Memorandum; (2) resolving its dispute with the FAA by obtaining a forgiveness of the prior $30 million payment in exchange for a promise not to make future airport revenue payments to OHA and not to appeal the positions set forth in the FAA Memorandum; (3) breaching the trust duty of impartiality by not challenging the positions set forth in the FAA Memorandum in order to use them as a sword in [ OHA I ] and subsequent appeal; (4) failing to timely advise OHA that the State was not going to continue to challenge the positions set forth in the FAA Memorandum or IG Report, and that it was planning to settle with the federal government, in order to provide OHA with a fair opportunity to take measures to step into the State's position to oppose the FAA; and, (5) failing to obtain instructions from the Court on how to proceed given its conflict position of defending the State against OHA in OHA I and having a duty to challenge the positions set forth in the FAA Memorandum. As stated previously, the State holds ceded lands in a public trust for five purposes, one of which is for the benefit of native Hawaiians. See Section I.A. Article XII, section 4 of the Hawai`i State Constitution, see supra note 15, confirms that lands granted to the State by the Admission Act shall be held by the State as a public trust for native Hawaiians and the general public, thereby designating two groups of beneficiaries. Under the Admission Act, the State assumed a fiduciary duty to hold the land together with the proceeds from the sale or other disposition of [ceded lands] and the income therefrom.  Admission Act, § 5(f) (emphasis added). As this court held in Pele Defense Fund v. Paty, 73 Haw. 578, 837 P.2d 1247 (1992) [hereinafter, Pele Defense ], [a]rticle XII, § 4 imposes a fiduciary duty on Hawaii's officials to hold ceded lands in accordance with the § 5(f) trust provisions. Id. at 605-06, 837 P.2d at 1264. This court further noted that, in administering the ceded lands, the State is subject to the standard of high fiduciary duties recognized in Ahuna v. Department of Hawaiian Home Lands, 64 Haw. 327, 338, 640 P.2d 1161, 1168 (1982), which include well-settled principles laid out by the federal courts in dealing with lands set aside by Congress in trust for the benefit of native Americans and Alaskans, noting that: (1) the conduct of the government as trustee is measured by the same strict standards applicable to private trustees; (2) one specific trust duty includes the obligation to administer the trust solely in the interest of the beneficiary; and (3)  a trustee must deal impartially when there is more than one beneficiary. Id. at 339-40, 640 P.2d at 1168-70 (emphasis added). The common law of trusts also identifies two instances where a trustee is under a duty to inform. First, a fiduciary has a duty to give beneficiaries upon request `complete and accurate information as to the nature and amount of trust property.' Faircloth v. Lundy Packing Co., 91 F.3d 648, 656 (4th Cir.1996) (quoting Restatement (Second) of Trusts § 173 (1959)). Second, in limited circumstances, a trustee is required to provide information to the beneficiary even when there has been no specific request: Ordinarily the trustee is not under a duty to the beneficiary to furnish information to him in the absence of a request for such information . . . . [However,] he is under a duty to communicate to the beneficiary material facts affecting the interest of the beneficiary which he knows the beneficiary does not know and which the beneficiary needs to know for his protection [in dealing with a third person with respect to his interest.] Griggs v. E.I. DuPont de Nemours & Co., 237 F.3d 371, 380-81 (4th Cir.2001) (emphasis added) (ellipsis and some brackets in original) (citation omitted). In their complaint, the plaintiffs alleged that the State violated, inter alia, the duty of impartiality and the duty to inform them of its decisions regarding actions in response to the Federal government's position on its grant conditions. They further alleged that, due to the State's conduct, the trust beneficiaries, represented by the plaintiffs, lost the right to receive any future income from airport revenues for the use of ceded lands under the Admission Act, the Hawai`i State Constitution, HRS Chapter 10, and Act 304. Pursuant to HRS §§ 10-13.5 and -16, OHA may bring suit in its corporate name, act as trustee in carrying out its obligations, and serve as a receptacle for the public lands proceeds under the public trust. Therefore, the plaintiffs are entitled to bring a claim for breach of the public lands trust and states a proper claim upon which relief could, under the proper circumstances, be granted. Consequently, we next examine the State's defenses of (i) sovereign immunity, (ii) notice, and (iii) statute of limitations.
The State contends that sovereign immunity bars the plaintiffs' claim for breach of trust. The State focuses on HRS chapter 673 (codifying the Native Hawaiian Trusts Judicial Relief Act) as a specific statute regarding waiver of the State's sovereign immunity. Specifically, the State contends that the waiver is unavailable under chapter 673 because it applies only to claims for `the management or disposition of trust funds and resources of [the land trust,]' whereas, here, the plaintiffs have not even alleged improper management or disposition of trust assets. (Brackets in original.) (Citation and emphasis omitted). Second, the State argues that HRS § 673-9 (1993), quoted infra, which provides that the waiver is inapplicable to suits brought by OHA involving its proportionate share of ceded land or special fund revenues, applies such that it reserves the issue of OHA's proportionate share to the legislature. Third, the State contends that the implied waiver of sovereign immunity under United States v. Mitchell, 463 U.S. 206, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983), and United States v. White Mountain Apache Tribe, 537 U.S. 465, 123 S.Ct. 1126, 155 L.Ed.2d 40 (2003), are irrelevant to this case [because] Hawaii has a specific statute (chapter 673) [and] . . . [t]here is no federal counterpart to chapter 673.  (Emphasis in original.) The plaintiffs counter that (1) HRS § 673-1 does apply to their case because their claims relate to the mismanagement of trust assets or resources and, (2) if this court is to read section 673-9 broadly to exclude all claims involving OHA's proportionate share of ceded land and special fund revenues, then the exception would swallow the rule as any claim for unpaid revenues would necessarily involve OHA's proportionate share of revenues. The plaintiffs further contend that, even if chapter 673 does not apply, damages still may be sought here because, under Mitchell and White Mountain Apache Tribe, sovereign immunity is waived where a government undertakes statutory or constitutional trust obligations. Generally, [a] sovereign state is immune from suit for money damages, except where there has been a `clear relinquishment' of immunity and the State has consented to be sued. Bush v. Watson, 81 Hawai`i 474, 481, 918 P.2d 1130, 1137 (1996) (quoting Pele Defense, 73 Haw. at 605, 837 P.2d at 1264) (internal quotation marks omitted). Although the United States Supreme Court has held in Mitchell and White Mountain Apache Tribe that, in specific circumstances, the federal government may be held liable for money damages resulting from breaches of trust, our courts have not yet determined whether claims based on breaches of the public lands trust qualify for the same waiver. In Pele Defense, which was decided a decade after Mitchell, this court adopted the rule in Ex Parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908), that distinguished between allowable prospective relief and disallowable retrospective relief, stating that: If the relief sought against a state official is prospective in nature, then the relief may be allowed regardless of the state's sovereign immunity. This is true even though accompanied by a substantial ancillary effect on the state treasury. However, relief that is tantamount to an award of damages for a past violation of law, even though styled as something else, is barred by sovereign immunity. 73 Haw. at 609, 837 P.2d at 1266 (citations, internal quotation marks, and ellipses omitted). Subsequently, in Bush, this court noted that: We decline to adopt the federal courts' narrow view that a claim for relief based on past illegal action is necessarily retrospective. See Han [v. Dep't of Justice], 824 F.Supp. [1480,] 1489 [(D. Haw.1993)], aff'd, 45 F.3d [333], 338 [(9th Cir.1995)]. As suggested by counsel for the Appellants during oral argument, such an interpretation would force potential claimants to discern the potential impact of proposed agency action, ascertain the threat of injury, and acquire an attorney to draft a complaint and file suit (subject to sanctions under [HRCP] Rule 11)[.] Rather than imposing such an onerous burden on the potential claimants, the crucial inquiry under our sovereign immunity principle is whether the relief sought for a past violation of law is tantamount to an award of damages or would merely have an ancillary effect on the state treasury. Pele [Defense], 73 Haw. at 609-10, 837 P.2d at 1266 (citing Papasan v. Allain, 478 U.S. 265, 278, 106 S.Ct. 2932, 2940, 92 L.Ed.2d 209 (1985)[1986]). 81 Hawai`i at 482 n. 9, 918 P.2d at 1138 n. 9 (emphasis added). Given the principles in Pele Defense and Bush, it follows that sovereign immunity may not be invoked by the State if the suit seeks prospective, i.e., injunctive, relief and the State fails to carry its burden of proving with specific facts that the effect on the State treasury will be directly, substantially, and quantifiably impacted. [16] We, therefore, first examine the nature of the relief being sought to determine if it is prospective, i.e., seeking an injunction against the State from violating constitutional or statutory provisions, or retrospective, i.e., seeking monetary or other damages, in nature. The plaintiffs in this case essentially seek injunctive and declaratory relief, as well as monetary damages, based on the State's decision not to challenge the FAA regarding airport revenue payments and the State's failure to inform the plaintiffs of that decision. Inasmuch as all of the plaintiffs' claims for relief are based on past conduct, it would appear that the relief being sought is retrospective in nature and that, therefore, prospective or injunctive relief is not available. However, as previously noted in Bush, this court has rejected the federal court's narrow view that a claim for relief based on past illegal action is necessarily `retrospective.' Bush, 81 Hawai`i at 482 n. 9, 918 P.2d at 1138 n. 9 (citation omitted). If there is a continuing violation of or ongoing breach resulting from a past action, then prospective relief, i.e., an injunction to stop the continuing violation, is available. Here, the plaintiffs seek injunctive relief that is tantamount to an award of damages for past actions inasmuch as the injunction relates to payments that would be owed to OHA but for the passage of the Forgiveness Act and the subsequent invalidation of Act 304. Unlike in Bush, see supra note 16, the plaintiffs here do not seek an injunction to stop a continuing violation of law or breach of trust. Indeed, there is no statute from which to enjoin the State from violating inasmuch as the invalidation of Act 304 has once again left this court without judicially manageable standards to determine the State's payment obligations to OHA under HRS chapter 10. As such, the relief sought for the instant breach of trust claims is retrospective, i.e., for declaratory relief and monetary damages. We, therefore, examine whether the State has clearly relinquished its sovereign immunity with respect to retrospective relief. In Taylor-Rice v. State, 105 Hawai`i 104, 94 P.3d 659 (2004), this court noted the following principles used by federal courts when construing statutes regarding sovereign immunity: (1) a waiver of the Government's sovereign immunity will be strictly construed, in terms of its scope, in favor of the sovereign, Lane v. Pena, 518 U.S. 187, 192, 116 S.Ct. 2092, 135 L.Ed.2d 486 (1996) (citations omitted); (2) a waiver of sovereign immunity must be unequivocally expressed in statutory text, id. (citation omitted); (3) a statute's legislative history cannot supply a waiver that does not appear clearly in any statutory text, id. ; (4) it is not a court's right to extend the waiver of sovereign immunity more broadly than has been directed by the Congress, United States v. Shaw, 309 U.S. 495, 502, 60 S.Ct. 659, 84 L.Ed. 888 (1940); and (5) sovereign immunity is not to be waived by policy arguments, United States v. N.Y. Rayon Importing Co., 329 U.S. 654, 663, 67 S.Ct. 601, 91 L.Ed. 577 (1947). Id. at 110, 94 P.3d at 665 (brackets omitted). HRS § 673-1 provides in relevant part that, [t]he State waives its immunity for any breach of trust or fiduciary duty resulting from the acts or omissions of its agents . . . in the management and disposition of trust funds and resources of [the native Hawaiian public trust.] A plain reading of HRS § 673-1 indicates that it unequivocally waives the State's sovereign immunity, and, inasmuch as HRS § 673-4(a) (1993) provides for relief only in the form of land or monetary damages to restore the trust which has been depleted as a result of any breach of trust duty, the waiver specifically applies to suits for retrospective relief. Thus, as the State correctly argues, we need not look to the Mitchell line of cases to determine whether there is an implied waiver of sovereign immunity; rather, we examine whether HRS chapter 673 is applicable to the instant claims. The State contends that chapter 673 is inapplicable because the plaintiffs have not even alleged improper management or disposition of trust assets, under section 673-1. We disagree. As the facts indicate and as discussed previously, the instant breach of trust claims relate to the State's handling of its trust responsibilities with regard to a significant portion of revenues paid and payable to OHA, i.e., airport special fund revenues. Inasmuch as the revenues are derived from the ceded lands trust, they are trust assets and were payable to OHA, as provided at that time under Act 304. As such, the claims relate to the state's fulfillment of its fiduciary duties and its management of trust assets. The State next contends that, even if the claims fall under HRS § 673-1, section 673-9 reserves the issue for the legislature. HRS § 673-9 provides, Inapplicability to share of office of Hawaiian affairs. This chapter shall not apply to suits in equity or law brought by or on behalf of [OHA] in which the matters in controversy involve the proportionate share of ceded land or special fund revenues allocated to [OHA] by the legislature. (Bold emphasis in original.) We agree with the plaintiffs that this suit does not involve the proportionate share of OHA's revenues. At the time the conduct at issue occurred, OHA's proportionate share of revenues was set at twenty percent under Act 304. The instant breach of trust claims are for damages resulting from the State's breach of trust duties and do not require a determination of OHA's proportionate share of revenues, unlike the suit in Yamasaki. Were we to hold otherwise, as the plaintiffs contend, the exception [under HRS § 673-9] would swallow the rule. Accordingly, we hold that HRS chapter 673 applies to the instant claims. We now examine whether the plaintiffs have complied with chapter 673's statutory requirements with respect to notice under HRS § 673-3 (1993) and statute of limitations under HRS § 673-10 (Supp.2004), quoted infra.
In opposing the State's motion to dismiss, the plaintiffs contended that the written notice provision under HRS § 673-3 is inapplicable to their claims because that section is entitled Exhaustion of Administrative Remedies. HRS § 673-3 states in pertinent part that, [b]efore an action may be filed in circuit court under this chapter, the party filing suit shall have exhausted all administrative remedies available, and shall have given not less than sixty days written notice prior to filing of the suit that unless appropriate remedial action is taken suit shall be filed. (Emphases added.) Specifically, the plaintiffs maintain that, inasmuch as there were no administrative remedies available, the entire section is inapplicable, including the sixty-day-notice requirement. We disagree. A plain reading of the statute indicates that administrative remedies must be exhausted and written notification of not less than sixty days must be given. Thus, notwithstanding the absence of administrative remedies, the plaintiffs must still have complied with the sixty-day-notice requirement in order to meet the statutory prerequisites for filing suit. Their failure to comply with the notice requirement precludes us from reviewing any claims brought under chapter 673. See Garcia v. Kaiser Found. Hosp., 90 Hawai`i 425, 441, 978 P.2d 863, 879 (1999) (holding that the circuit court did not err in concluding that it had no subject matter jurisdiction as a result of Plaintiff's failure to comply with the requirements of HRS § 671-12, which mandated that such claims be first filed with the medical claim conciliation panel prior to filing suit); see also Hallstrom v. Tillamook County, 493 U.S. 20, 33, 110 S.Ct. 304, 107 L.Ed.2d 237 (1989) (holding that (1) the sixty-day-notice requirement in the citizen suit provision of the Resource Conservation and Recovery Act of 1976 (RCRA) was a mandatory precondition to suit and (2) the plaintiffs' failure to comply resulted in dismissal as the action was barred by the terms of the statute). However, even assuming arguendo that the statute does not apply, the claims are nonetheless barred by the statute of limitations under HRS § 673-10, as discussed below.
The statute of limitation requirement under chapter 673 is found in HRS § 673-10, which provides: Limitation on actions; native Hawaiians. Every claim arising under this chapter shall forever be barred unless the action is commenced within two years after the cause of action first accrues; provided that this statute of limitations shall be tolled until July 1, 1990; provided that the filing of the claim in an administrative proceeding pursuant to this chapter shall toll any applicable statute of limitations, and any such statute of limitations shall remain tolled until ninety days after the date the decision is rendered in the administrative proceeding; provided further that any cause of action that first accrues after July 1, 1995 shall forever be barred unless action is commenced within two years after the cause of action first accrues. (Bold emphasis in original.) (Underscored emphases added.) The plaintiffs, however, argue that, because OHA is a state agency, it is immune from the statute of limitations, pursuant to HRS § 657-1.5 (1993). [17] The State contends that HRS § 657-1.5 does not exempt the plaintiffs from the statute of limitations for this lawsuit [because] OHA is a `separate entity independent of the executive branch (HRS § 10-4 [(Supp.2003) [18] ]), and OHA brought this suit in its own corporate name under § 10-16 [(1993) [19] ], rather than as an agency of the State on behalf of the people of the State. We agree with the State. Under HRS § 10-16, OHA may sue . . . in its corporate name, and, pursuant to HRS § 10-4, the corporation is a separate entity independent of the executive branch. Therefore, OHA does not fall under HRS § 657-1.5 such that the instant claims are immune from any applicable statutes of limitations. The plaintiffs also contend that, because their claims are based in equity, the court is not bound by statutes of limitation[.] In response, the State contends that this court cannot expand the legislature's limited waiver of immunity by `equitable disregard' of the conditions of the waiver. We agree that we are held to the bounds of the applicable statutes of limitation inasmuch as they set specific limits on the State's waiver of sovereign immunity that we must strictly construe and cannot extend under these circumstances. The application of equitable tolling in this jurisdiction has been, for the most part, in the insurance context where a statute of limitations was tolled from the time a claim for benefits was filed. See Wright v. State Farm Mut. Auto. Ins. Co., 86 Hawai`i 357, 362, 949 P.2d 197, 202 (App. 1997). The federal courts generally agree that statutes of limitations accompanying a waiver of sovereign immunity should be narrowly construed. Irwin v. Dep't of Veterans Affairs, 498 U.S. 89, 94, 111 S.Ct. 453, 112 L.Ed.2d 435 (1990) (citation omitted). However, unless Congress has provided otherwise, the federal courts generally apply a rebuttable presumption that a statute of limitation is subject to equitable tolling. Id. at 94, 111 S.Ct. 453. In order to toll a statute of limitations for a complaint filed after its expiration, a plaintiff must demonstrate (1) that he . . . has been pursuing his right diligently, and (2) that some extraordinary circumstance stood in his way. Felter v. Norton, 412 F.Supp.2d 118, 126 (D.D.C.2006) (citing Pace v. DiGuglielmo, 544 U.S. 408, 417, 125 S.Ct. 1807, 1814, 161 L.Ed.2d 669 (2005); Zerilli-Edelglass v. N.Y. City Transit Auth., 333 F.3d 74, 80-81 (2d Cir.2003)). Extraordinary circumstances are circumstances that are beyond the control of the complainant and make it impossible to file a complaint within the statute of limitations. Id. (citing United States v. Cicero, 214 F.3d 199, 203 (D.C.Cir.2000)). In the instant case, the plaintiffs do not allege any facts or cite any legal authorities in support of their claim that equitable tolling applies in this case. Moreover, we are not aware of any facts in the record to indicate why the plaintiffs could not have brought their breach of trust claims within the two-year statute of limitations. The plaintiffs, however, believe that the original complaint was filed within two years of when they knew or reasonably should have known that an actionable wrong ha[d] been committed. They assert that, [i]n order for the statute of limitation period to commence, the plaintiff must have suffered, actual, rather than potential, injury. (Emphasis in original.) The plaintiffs explain that, before OHA I was decided, [the plaintiffs] at most knew of the mere possibility that Act 304 might suffer demise by virtue of the Forgiveness Act and the State's improper conduct underlying it. But [the plaintiffs] did not know, and could not have known, of any actual loss until it happened when the Hawaii Supreme Court in OHA I actually held it to be in conflict with provisions of federal law. . . . . Thus, the damage to [the plaintiffs] was the permanent loss of the right to receive monies-from whatever source-under Act 304, which happened when Act 304 was repealed. Before OHA I, no court had ever held that Act 304 conflicted with any other law. Until OHA I, the State's official revisor left Act 304 intact in the [HRS]. (Emphases in original.) The State, on the other hand, believes that the plaintiffs are wrong on both the facts and the law in asserting that [their] claims against the State did not accrue until September 2001 [(when OHA I was filed).] (Emphasis in original.) Specifically, the State argues that [t]he facts are that, as of June 10, 1999[ [20] ], the plaintiffs knew that [they] had lost all airport revenues. Thus, the State maintains that the plaintiffs' complaint, filed on July 21, 2003, was barred by the statute of limitations. In Pele Defense, this court held that the date the cause of action accrued in that case was when [plaintiffs] discovered or should have discovered the breach of the [public lands] trust [duties], the injury to its members, and the connection between the breach and the injury, 73 Haw. at 598, 837 P.2d at 1260 (emphasis added), comparing its holding to the similar rule articulated in Yamaguchi v. Queen's Medical Center, 65 Haw. 84, 90, 648 P.2d 689, 693-94 (1982), a medical malpractice case. [21] In so holding, the court  as plaintiffs correctly note  applied HRS § 657-7 (1993), [22] the general personal injury statute of limitations, to the plaintiffs' section 1983 claims, pursuant to the United States Supreme Court's direction that a state's `residual or general personal injury statute of limitations applies' to all section 1983 claims brought in state courts. Pele Defense, 73 Haw. at 598, 837 P.2d at 1260 (quoting Owens v. Okure, 488 U.S. 235, 236, 109 S.Ct. 573, 102 L.Ed.2d 594 (1989)). We recognize that the instant claims are not based on federal law, but on state law claims pursuant to chapter 673. This court, however, has not addressed the accrual of a cause of action for breach of trust outside the context of section 1983 claims, and, as stated previously, HRS § 673-10 is also untested. Federal court cases involving breach of trust claims against a government trustee provide guidance on the instant issue. In Shoshone Indian Tribe of Wind River Reservation v. United States, 364 F.3d 1339 (Fed.Cir.2004), the United States Court of Appeals for the Federal Circuit (court of appeals) explained that: A cause of action for breach of trust traditionally accrues when the trustee repudiates the trust and the beneficiary has knowledge of that repudiation. Hopland Band of Pomo Indians v. United States, 855 F.2d 1573 (Fed.Cir.1988); Restatement (Second) of Trusts § 219 (1992); Cobell [v. Norton, 260 F.Supp.2d 98, 105 (D.D.C. 2003)]; Manchester Band of Pomo Indians [v. United States, 363 F.Supp. 1238, 1249 (N.D.Cal.1973)]. A trustee may repudiate the trust by express words or by taking actions inconsistent with his responsibilities as trustee. Jones v. United States, 801 F.2d 1334, 1336 (Fed.Cir.1986); Philippi v. Philippe, 115 U.S. 151, 5 S.Ct. 1181, 29 L.Ed. 336 (1885). The beneficiary, of course, may bring his action as soon as he learns that the trustee has failed to fulfill his responsibilities. 3 Scott on Trusts §§ 199.3, 205 (2001). Id. at 1348. In the underlying suit in Jones v. United States, 9 Cl.Ct. 292 (Cl.Ct.1985), aff'd, 801 F.2d 1334 (Fed.Cir.1986), cert. denied, 481 U.S. 1013, 107 S.Ct. 1887, 95 L.Ed.2d 495 (1987), the United States Claims Court (claims court) held, and the court of appeals affirmed  as plaintiffs assert here  that the government's failure to fulfill its fiduciary responsibility constituted an implicit repudiation of the trust relationship[.] Id. at 296 (footnote omitted). [23] The Jones court, however, went on to state that the fiduciary's implicit repudiation should have put the beneficiary on notice that she might suffer damages[,] id., further noting the fact [t]hat [the plaintiffs] may not have fully appreciated the legal consequences flowing from defendant's nonfeasance  including the possibility that they might be entitled to money damages  does not toll the statute of limitations. Id. at 295 (emphases added) (citing Menominee Tribe of Indians v. United States, 726 F.2d 718 (Fed.Cir.1984)) (other citations omitted). The claims court concluded that the plaintiffs' claims did not accrue when they learned of the full extent of their damages, but rather they accrued  as in Pele Defense  when the plaintiffs had learned of: (1) the conduct establishing the government's liability or breach; (2) the injury to the trust beneficiaries and the link between the injury and the conduct; and (3) some damage to the trust. Jones, 9 Cl.Ct. at 296. We, therefore, address whether the plaintiffs knew of the material facts of their claims, i.e., the breach of duty, injury and causal connection, and some damage to the trust, within two years of July 21, 2003  the date they filed the instant complaint. With respect to the first element, i.e., the discovery of the breach, several facts alleged in the first amended complaint indicate that the plaintiffs discovered or should have discovered the breach of trust as early as August 19, 1997. As the plaintiffs allege, on July 22, 1997, a U.S. Senate Report No. 105-55 regarding the Department of Transportation and Related Agencies Appropriations Bill, 1998, stated: Federal aviation law . . . prohibits the diversion of airport revenues for non-airport purposes. Recently, the Department of Transportation Inspector General identified $30,000,000 in past payments to [OHA] as illegal diversions of airport revenues. The FAA agreed with the [IG's Report]. However, it is unclear whether a Federal court would agree with the [Inspector General] and the FAA[,] should their determination be challenged. Given the fact that the State of Hawaii owns the lands in trust for the betterment of native Hawaiians, it is conceivable that a reviewing court could find that the payments of airport revenues were in the nature of rent, which is [a] permissible use of airport revenue. To put the issue to rest, the general provision provides that the State of Hawaii is forgiven any obligation to repay past amounts diverted for trust purposes, in return for a clear congressional statement prohibiting any future diversions. (Emphasis added.) The plaintiffs stated in their complaint that [t]his was the first notice OHA could have reasonably received that the State may have decided not to challenge the FAA decision and to settle the issue. Shortly thereafter, in a letter dated August 7, 1997, from Senator Daniel Inouye, one of Hawaii's Congressional members, to OHA, Senator Inouye stated: In light of the State's decision not to appeal the U.S. Department of Transportation's ruling thereby allowing it to become final, I believe that the best course of action would be to clear the debt and allow the State and OHA to return to the negotiating table to work toward a mutually agreeable course of action that would uphold the State's obligation to OHA from other sources. Upon sensing that that may not be the case, I immediately included an additional provision to section 355, and an accompanying floor statement, to ensure that the Congressional intent was clear. Section 335 shall not affect the obligations to Native Hawaiians as set forth in existing statutes. Further, on August 19, 1997, the Honolulu Advertiser, a local daily newspaper of general circulation, published an article written by then-attorney general Margery Bronster, entitled Don't Litigate on OHA, wherein she stated that the State would not contest the FAA's position that using the State's airport revenues violated federal grant conditions on the use such revenues. As the plaintiffs stated in their complaint, Senator Inouye's letter and Attorney General Bronster's article were the first notice that OHA received that the State had given up its position. Thus, the facts alleged in the complaint demonstrate that the plaintiffs were aware of the State's repudiation, i.e., that an alleged breach of trust had occurred by the State's decision not to challenge the FAA's position, as early as August 19, 1997. And, alternatively, based on the discussion below, as late as July 9, 1999. With respect to the discovery of the injury and causal connection, the facts alleged in the first amended complaint also demonstrate that the plaintiffs became aware of their initial loss of both airport revenue payments as well as payments from any other source on June 10, 1999. On that day, Governor Cayetano issued a statement of objections to Senate Bill No. 1635, which, in conjunction with Act 329, sought to provide an alternative funding mechanism due to the uncertainty surrounding Act 304 and which appropriated $16,060,000 to OHA. Therein, Governor Cayetano stated: [T]he trustees of [OHA] have discontinued our earlier settlement efforts and asked me to veto this bill. I understand further that the trustees prefer that the differences between the State and OHA presently pending before the Hawaii Supreme Court in [ OHA I ], be decided by the Court. I must assume that the trustees are aware the federal legislation precludes the State's airports system from paying for the use of public trust lands with airport revenue, and that without the $16,060,000 appropriation this bill would make, there will be no non-airport revenue appropriation to pay for the airport system's use. Governor's Message, Statement of Objections to Senate Bill No. 1635, in 1999 Senate Journal, at 803 (emphases added). Once the governor gave notice to the legislature of his objections to Senate Bill No. 1635, the legislature had until July 9, 1999  forty-five days from the date of its adjournment on May 4, 1999 (excluding Saturdays, Sundays, and holidays)  in which to reconvene in special session to reconsider Senate Bill No. 1635. Haw. Const. art. III, § 16. Inasmuch as the legislature did not override the governor's veto, the plaintiffs  having themselves requested that Governor Cayetano veto Senate Bill No. 1635  should have discovered their injury, i.e., the loss of payments for the airport's use of ceded lands from the airport revenues or from any other source, as early as July 9, 1999. Moreover, with the veto of Senate Bill No. 1635 and the sunset of Act 329, the plaintiffs knew or should have known that the only payments that would be made were Act 304 payments, less the airport revenues. In other words, as Governor Cayetano made clear, his veto meant that there would be no non-airport revenue appropriation to pay for the airport system's use. Thus, the plaintiffs should have been aware that some loss had already occurred, even if the ultimate effect, i.e., the repeal of Act 304, was not yet known until this court's decision in OHA I. The plaintiffs' citation to Mun Seek Pai v. First Hawaiian Bank, 57 Haw. 429, 558 P.2d 479 (1977), for the proposition that the statute of limitations does not run until the damage is actual and permanent in character, as opposed to merely potential or contingent, has no effect on the instant case. In Mun Seek Pai, this court held that, where a debtor made a new promise to pay a debt subject to a condition, the cause of action on the promise does not accrue until the condition is performed. 57 Haw. at 435, 558 P.2d at 482. There, this court, quoting Segelken v. Hawaiian Trust Co., 20 Haw. 225, 229 (1910), noted that: When the payment of a claim or the liability of a party is made dependent on the performance of any condition precedent or the happening of any contingency, a right of action does not accrue, or the statute begin to run, until the performance of such condition or the happening of such contingency. Mun Seek Pai, 57 Haw. at 435, 558 P.2d at 483 (other citations and brackets omitted). In both Mun Seek Pai and Segelken, however, there was a condition or contingency that had to occur before the plaintiffs in those cases could bring suit in court. In Segelken, for example, the plaintiffs' right to money from a trust fund came into existence only upon her death. Here, there was no condition precedent or contingency such that the plaintiffs could not have brought their breach of trust claims within the statutory period. The plaintiffs' breach of trust claims cannot be said to have been contingent on OHA I as the loss suffered by the plaintiffs occurred during the pendency of OHA I and not because of OHA I. The plaintiffs in Jones made a similar argument regarding the need to wait for a judicial determination of their rights, stating that their [breach of trust] claim did not accrue, for statute of limitations purposes, until the district court litigation had been completed and they first learned that they had suffered monetary damages because of defendant's breach of trust. 9 Cl.Ct. at 294. There, the claims court held that the statute of limitations was not tolled even where [the plaintiffs] may not have fully appreciated the legal consequences flowing from defendant's nonfeasance  including the possibility that they might be entitled to money damages[.] Id. at 295. Similarly, although the plaintiffs here may not have appreciated all the legal consequences flowing from the State's alleged nonfeasance or the extent of their monetary damages, they knew of the material facts of the instant breach of trust claims on or before July 9, 1999. The plaintiffs did not file their complaint until July 21, 2003, more than four years after the claims first accrued, and over two years after the applicable statute of limitations ended on July 9, 2001. Accordingly, the circuit court did not err in dismissing the plaintiffs' complaint. See Romero v. Star Markets, Ltd., 82 Hawai`i 405, 416, 922 P.2d 1018, 1029 (App.1996) (noting that it is now common to allow an affirmative defense to be asserted by a motion under [HRCP] Rule 12(b)(6) when the validity of that defense is apparent from the face of the pleading) (citation omitted); see also Rivera v. England, 360 F.Supp.2d 1104, 1111 (D.Haw.2005) (holding that [a] motion under [the analogous FRCP] Rule 12(b)(6) should also be granted if an affirmative defense or other bar to relief is apparent from the face of the Complaint, such as . . . the statute of limitations) (citations omitted).