Opinion ID: 2632470
Heading Depth: 3
Heading Rank: 2

Heading: Cross-motions for judgment on the pleadings/summary judgment[13]

Text: The DLNR Defendants filed their answer to CASI's complaint on May 20, 2002. On June 19, 2002, approximately one month later, the DLNR Defendants filed a motion for judgment on the pleadings, or, in the alternative, for summary judgment against CASI on all claims (hereinafter motion for summary judgment). As relates to the instant appeal, the DLNR Defendants argued that (1) as per Figueroa v. State, 61 Haw. 369, 383-84, 604 P.2d 1198, 1206-07 (1979), the State of Hawai`i was immune from all tort claims asserted under HRS § 662-3 for recovery of money damages due to constitutional violations, and (2) in any event, CASI's claims were specifically barred under HRS § 662-15(1) and (2), [14] because (a) the DLNR Defendants were merely following existing administrative rules, and (b) the federal court found the ORMA permit fee to be a tax. On July 5, 2002, CASI filed a cross-motion for summary judgment, asserting, in relevant part, that (1) the ORMA permit for the Hula Kai was, or in the alternative was tantamount to, an express contract between the DLNR Defendants and CASI, with an implied promise of refund in the event the contract was illegal and void, [15] arising from a contracting party's duty of good faith and fair dealing; and (2) the DLNR defendants owed CASI a duty of restitution arising from their tortious conver[sion] of the ORMA permit fees. (Emphases omitted.) CASI argued that the State of Hawaii's sovereign immunity to suit was waived on account of both HRS § 662-2 (1993) [16] as to tort claims, and HRS § 661-1 (1993) as to contract claims. [17] This was the first time that CASI had raised the specter of a contract claim and invoked HRS chapter 661 as a basis for jurisdiction. On July 17, 2002, CASI filed its opposition to the DLNR Defendants' motion for summary judgment. CASI, inter alia, reiterated its July 5, 2002 position on cross-motion for summary judgment, albeit more explicitly this time, that CASI's claims sound in tort and contract. (Emphasis added.) The DLNR Defendants also filed their opposition to CASI's cross-motion for summary judgment on July 17, 2002, in which they pertinently argued as follows: (1) applying [HRS § 40-35] to [CASI's] situation, the [ORMA permit fees] refund issue is moot because the thirty-day [statute of limitations] passed long ago and the circuit court lacks jurisdiction over the matter (the tax appeal court has jurisdiction)[ ] (while noting in a following footnote that HRS § 662-15(3) bars [CASI's] tort claims on account of this alternate remedy at law); (2) there was absolutely no hint in any ORMA permit of an implied promise that [CASI] would be given a refund if the [ORMA permit fee] assessment was subsequently determined to be unconstitutional[;] (3) the ORMA permit was a valid contract; and (4) CASI's conversion claim must fail because the ORMA permit fees paid by CASI were never segregated or kept as an intact fund for [CASI] and the fees were never intended to be returned to [CASI][.] This was the first time that the DLNR Defendants had raised HRS § 662-15(3) and the HRS § 40-35 claim and statute of limitations as a bar to circuit court jurisdiction and CASI's claims in general, but no objection was made by CASI. CASI and the DLNR Defendants filed their replies to the oppositions to the cross-motions on July 22, 2002. CASI noted in its reply that (1) the ORMA permit fees were not taxes and DLNR had no constitutional authority to impose any form of taxes, (2) contrary to the DLNR Defendants' assertions, the ORMA permit was an express contract, (3) CASI was actually in compliance with HRS § 40-35 insofar as it effectively paid under protest and properly and timely initiated suit in a court of competent jurisdiction, namely federal district court, on January 2000, or roughly six months prior to the initial issuance of the ORMA permit on July 2000, [18] (4) in any event, the ORMA permit fees are not recoverable under HRS § 40-35 because they do not constitute taxes, and (5) principles of equity require the DLNR Defendants to refund the ORMA permit fees on account of the DLNR Defendants' failure to comply with HRS § 40-35 and deposit the disputed fees into a litigated claims fund pending the outcome of the federal litigation. The DLNR Defendants asserted in their reply, inter alia, that: (1) the circuit court should disregard CASI's contract claims and assertion of HRS § 661-1 as a basis for jurisdiction inasmuch as neither was raised within CASI's complaint, and (2) in any event, CASI has not pled that any express contract requires [the State of Hawai`i] to provide a refund if the fee assessment was subsequently deemed unconstitutional[.] Hearing on the cross-motions was held on July 25, 2002, and the circuit court granted summary judgment in favor of the DLNR Defendants. It orally ruled as follows: I am persuaded that the State has the better argument that when the theory that you use that was ultimately successful is, that this was an impermissible tax or a fee or whatever you want to call it that was prohibited because of the constitutional prohibition against tonnage duties; then you are required to use the concomitant remedy for obtaining relief against taxes, be they higher than they're suppose[d] to be or unconstitutional, and that would be the statute, HRS Section 40-35. . . . . there was nothing, so far as I can tell, to prevent [CASI from] having filed under [HRS § ] 40-35 and having the matter go to Tax Court and having litigated it there, although on [an] additional second track [(sic)] and, perhaps, having stayed it until the [federal district court] decided whatever they did. So my best judgment is, it's not that there's no remedy, but the remedy that is available had to have been timely invoked. Apparently, the requirements of HRS Section 40-35 were not met; and therefore the Court grants [the DLNR Defendants'] motion . . . . The circuit court's August 28, 2002 order granting summary judgment in favor of the DLNR Defendants read in pertinent part: With respect to [CASI's] claims against [the DLNR Defendants]. . . . such claims are barred by [HRS] § 662-15(3). . . . because [CASI] has a remedy provided by state law, specifically [HRS] § 40-35[.] [CASI] is not foreclosed from bringing an action under [HRS] § 40-35. . . . but the [c]ourt does not address whether the time has passed to bring such an action. The circuit court's final judgment was entered on September 13, 2002, and CASI timely appealed on October 7, 2002.