Court Opinion

ID: 9529908
Source: CourtListenerOpinion
Date Created: 2023-08-07 03:55:22.591885+00
Date Added: 2024-06-11T13:27:57.139705
License: Public Domain

NAKAYAMA, Justice,
dissenting.
For the reasons set forth below, I disagree with the majority’s holding that “the circuit court erred when it entered thirty-two separate final judgments pursuant to HRCP Rule 54(b).” Majority at 104. Accordingly, I dissent.
A. Entry of Thirty-two Separate Judgments
As stated by the majority, the Trustees argue that “the collective result” of the circuit court’s COL and its entry of thirty-two separate judgments, each of which is subject to a separate final order of condemnation, is that the “HFDC may condemn as few as one lot, even if the Lessee of that lot does not qualify [to purchase the lot] under [HRS] § 516-33.”1 Majority at 97. The Trustees contend, and the majority agrees, that such a result violates HRS Chapter 516, which they claim requires the HFDC to acquire and resell to qualifying lessee-applicants a minimum of twenty-five leased fee interests in a given development tract. The Trustees further argue that strict compliance with the requirements of HRS Chapter 516 is a necessary condition to satisfaction of the constitutional public use requirement; therefore, the possibility that the HFDC will acquire fewer than the minimum twenty-five leased fee interests violates the Hawaii and United States Constitutions.
As presented on appeal, and focused on by the majority, the validity of the Trustees’ *185arguments turns on whether HRS Chapter 516 establishes a “minimum lot” requirement — i.e., requires the HFDC to acquire a minimum number of leased fee interests in a given development tract. The majority holds that HRS § 516-22 sets the minimum lot requirement. As noted, HRS § 516-22 permits the HFDC to designate for acquisition and to acquire the leased fee interests in the residential houselots in a development tract
after twenty-five or more lessees or the lessees of more than fifty per cent of the residential lease lots within the development tract, whichever number is the lesser, have applied to the [HFDC] to purchase the leased fee interest in their residential leasehold lots pursuant to section 516-33 and if ... the [HFDC] finds that the acquisition of the leased fee interest in residential houselots in all or part of the tract through exercise of the power of eminent domain or by purchase under threat of eminent domain and the disposition thereof, as provided in this part will effectuate the public purpose of this chapter.
(Emphasis added.)
The majority agrees with the Trustees that, because receipt of a minimum number of applications is a condition precedent to the commencement of condemnation proceedings under HRS Chapter 516, and because the Act was designed to achieve “the simultaneous conversion of sizeable numbers of leasehold lots to individual fee simple ownership[,]” Sen. Conf. Comm. Rep. No. 630, in 1975 Senate Journal, at 1071, it logically follows that the minimum number requirement should apply to each phase of the process. That is, the HFDC must designate for condemnation, acquire, and then re-sell to qualifying lessee-applicants at least the minimum number of leased fee interests. The trustees argue that, to hold otherwise, the minimum application requirement is “irrelevant” and “superfluous” and the purpose of the statute would be frustrated.
The majority also points to HRS § 516-23 (1985 & Supp.1992), which provides in part that “[w]ithin twelve months after the designation of all or part of the development tract for acquisition, the [HFDC] shall acquire through voluntary action of the parties, or institute eminent domain proceedings to acquire the leased fee interests in the tract or portion so designated.” The majority interprets this as meaning that HRS § 516-23 does not permit acquisition by the HFDC of less than the statutory minimum number of lots that can support a designation and public purpose finding under HRS § 516-22.
I disagree with the majority’s holding and the Trustees’ arguments. HRS § 516-22 makes receipt of a minimum number of applications a prerequisite to condemnations under HRS Chapter 516.2 Among other things, the requirement functions as a presumption that the residential fee simple market is malfunctioning due to the disproportionate concentration of land ownership. See Hawaii Housing Authority v. Midkiff, 467 U.S. 229, 242, 104 S.Ct. 2321, 2330, 81 L.Ed.2d 186 (1984) (“The [Land Reform] Act presumes that when a sufficiently large number of persons declare that they are willing but unable to buy lots at fair prices the land market is malfunctioning.”). Once the filing of the minimum number of applications triggers the presumption, HRS § 516-22 authorizes the HFDC to designate “all or a portion of’ the development tract for acquisition. The HFDC’s designation is subject to only one condition: after due notice and a public hearing, the HFDC must find that the acquisition of the leased fee interests in the residential houselots in all or part of the tract will effectuate the purposes of the Act. The statute does not expressly require the HFDC to designate a minimum number of leased fee interests for condemnation. It simply requires the HFDC to make a separate finding that the acquisition of the designated leased fee interests in the tract, or a portion thereof, will further the purposes of the Act.3
*186Neither do I discern any language in HRS § 516-23 expressly requiring the HFDC to acquire the leased fee interests in a minimum number of lots. HRS § 516-23 requires only that within a year of the designation, the HFDC acquire or institute eminent domain proceedings to acquire the leased fee interests designated for acquisition.
I would also conclude that the statutes do not implicitly evidence a legislative intent requiring the HFDC actually to condemn a minimum number of lots. The majority adopts the Trustees argument that a minimum number of lots must be condemned in order to effectuate the purposes of HRS Chapter 516.
“[The] stated intent [of HRS Chapter 516] is to increase the availability, alienability and turnover of single family residential-lots, spread ownership of fees simple, disperse the oligopolistic market power of the large landowners, and stabilize land prices, inflation, and the state’s economy by containing the cost of living and the cost of public assistance.”
Lyman, 68 Haw. at 64, 704 P.2d at 893 (citations omitted). I see no reason why, as a matter of law, a minimum number of lots must be condemned in order to effectuate those purposes. To the contrary, given the Act’s central purpose of redistributing and dispersing the ownership of residential land in fee simple, the HFDC could rationally and justifiably find that the actual condemnation of “as few as one lot” would effectuate the purposes of the Act.
Of course, there may be instances where the effectuation of the public purposes of the Act will depend, as a matter of fact, on the condemnation of a minimum number of lots. That is, there may be specific cases where, pursuant to HRS § 516-22, the HFDC finds that the purposes of the Act will not be furthered unless a minimum number of leasehold interests in a given development tract are actually condemned.
This, however, is not a ease where the HFDC found that the purposes of HRS Chapter 516 would be effectuated only if a certain number of leasehold interests were condemned. The HFDC found that the acquisition of “the leased fee interests] in the residential houselots in all or part of the Haiku Knolls Subdivision” would effectuate the public purposes of the Act. I perceive nothing in the record to indicate that the HFDC found, as a matter of fact, that the acquisition of a minimum number of leased fee interests was necessary to effectuate the purposes of the Act. I therefore presume that the HFDC found that the acquisition of the leased fee interest in any of the residential houselots in the subdivision would effectuate the purposes of the Act. Because HRS Chapter 516 does not require the acquisition of a minimum number of leased fee interests, the HFDC is not precluded from making that finding.
In sum, I believe that HRS Chapter 516 does not require the HFDC actually to acquire a minimum number of leasehold interests by eminent domain in order to effectuate the purposes of HRS Chapter 516. Inasmuch as the majority concurs with the Trustees’ basic argument on appeal that COL Nos. 1, 7, 8, and 10 are wrong because, collectively, they permit the HFDC to acquire fewer than the twenty-five leasehold interests, I reject that argument. I therefore would hold that COL Nos. 1, 7, 8, and 10 were not wrong and that the circuit court did not err in entering thirty-two separate judgments pursuant to HRCP 54(b).
B. Blight of Summons Damages
The majority chose not to address the Trustees’ blight of summons argument because they “are vacating the judgments with respect to the houselots that remain in this appeal.” Majority note 1. However, because I reject the majority’s .analysis and would *187hold otherwise, I believe that the Trustees’ blight of summons argument is relevant and should be addressed.
As previously indicated, between January 28, 1993 and May 7, 1993, deposits were made with respect to six of the houselots. The Trustees argue that COL No. 5 is wrong because “a deposit of money with the court that is conditional will not stop the accrual of blight of summons damages” and “any deposit that is made in a Chapter 516 action before the time of sale to the respective Lessee is very much conditional on the subsequent qualification of the Lessee.” I reject the Trustees’ argument.
There is no dispute that the Trustees are entitled to blight of summons damages as part of the just compensation owed to them for the taking of their property. Midkiff, 69 Haw. at 250-51, 739 P.2d at 250-51. In addition, none of the parties challenge the interest rate at which the blight of summons damages accrue. The only question is whether the blight of summons damages should stop accruing after the funds were deposited with the clerk of the circuit court.
I initially note that I agree with the Trustees that HRS §§ 101-28 through 101-33 do not supply the answer to that question. In general terms, HRS §§ 101-28 through 101-33 govern the procedures by which a condemning authority, in ordinary condemnation actions, may gain possession of condemned property after the date of summons but before the condemnation proceedings have been completed. “In order to do this, the condemning authority has to deposit what it, in good faith, estimates the compensation for the property condemned to be, and the owner, if there are no tax liens outstanding, can usually draw down that deposit.” Housing Finance and Dev. Corp. v. Castle, 72 Haw. 383, 384, 819 P.2d 82, 83-84 (1991). In Castle, we indicated that, because “condemnations under [HRS] Chapter 516 are handled very differently” from ordinary condemnations, HRS §§ 101-28 through 101-33 were inapplicable to HRS Chapter 516 condemnations. Id. at 385, 819 P.2d at 84. Thus, I would hold that HRS § 101-33 (1985),4 which limits the accrual of blight of summons damages after the condemning authority makes the appropriate deposit with the clerk of the court, does not control the disposition of the instant case. The Lessees and the HFDC do not contend otherwise.
Instead, the Lessees and the HFDC argue that their deposits were made pursuant to HRS 101-25 (1985)5 and represented payment of the amounts owed as per the final judgments entered by the circuit court — ie., the fair market value of the respective lots as determined by the jury’s special verdict, plus accrued blight of summons damages. Further, the Lessees and the HFDC take the position that the deposited funds “are available for withdrawal by the Trustees without condition.” Lessees’ answering brief at 8; HFDC’s answering brief at 14. They contend that the Trustees’ argument that their ability to withdraw the deposited funds is “conditional on the subsequent qualification of the Lessee,” is mistaken because “all six lessees who deposited with the court were deemed qualified by the HFDC at the time of deposit.” More importantly, they concede that, even if the lessees had yet to be qualified, the Trustees would still be able to withdraw and use the funds without restriction.6 *188Thus, they aver that “any dispute arising from the failure of the lessee to qualify is a dispute between the lessee and the HFDC, not between the lessee and the Trustees.”
Given the Lessees’ and the HFDC’s concession that the Trustees are entitled to withdraw the deposited funds without condition — i.e., without regard to whether the Lessees are ultimately qualified to purchase the lots in question — I see no reason why the blight of summons damages should not stop accruing on the date the funds are deposited with the clerk of the court. As we stated in Market Place, Ltd., blight of summons damages represent the “indemnification due a condemnee for the damages resulting from the government’s delay in paying the full cash equivalent of the property taken on the date of summons[,]” 55 Haw. at 235, 517 P.2d at 15, and their purpose “is to compensate a condemnee for the loss of use of the cash equivalent of the taken property[.]” Id. at 237, 517 P.2d at 16. The deposits made by the HFDC represented the cash equivalent of the property taken (plus accrued blight of summons damages). Stated otherwise, even though the funds were deposited prior to entry of the final judgment, State v. Heirs of Kapahi, 50 Haw. 237, 240, 437 P.2d 321, 323 (1968) (final judgment means judgment that is entered after disposition of appeal to the supreme court), they were equivalent to payment of “the amount[s] assessed as compensation or damages.” HRS § 101-25. Thus, as long as the Trustees were entitled to withdraw and use those funds unconditionally, see Market Place, Ltd., 55 Haw. at 239, 517 P.2d at 17 (only an unconditional deposit of funds “stop[s] the running of interest as blight of summons damages”), they could have completely mitigated the accrual of any further damages resulting from “the loss of use of the cash equivalent of the taken property[J”7 Id. at 237, 517 P.2d at 16.
Because the Lessees and the HFDC concede that the funds were available for the Trustee’s unconditional withdrawal and use, the only reason blight of summons damages continued to accrue was the Trustees’ failure to make a request to withdraw the funds. Under those circumstances, I would hold that the circuit court’s conclusion that the blight of summons damages should stop accruing on the date the funds were deposited was not incorrect. See Castle, 72 Haw. at 385, 819 P.2d at 84 (“blight of summons damages should be measured from the date of summons to the date of payment”).
For the foregoing reasons, I would hold that COL Nos. 1, 5, 7, 8, and 10 are not wrong and that the circuit court did not err in entering thirty-two separate judgments; therefore, I would affirm the judgments of the circuit court. Accordingly, I dissent.

. HRS § 516-33 (Supp.1992) sets forth criteria that a person must meet before the "sale of any residential houselot within a development tract shall be made[.]” Among other things, the person must be at least eighteen years of age, a bona fide resident of Hawai'i or have a bona fide intent to reside in the development tract, and have a “letter of credit, certificate of deposit, proof of funds, or approved application from any lending institution demonstrating that the person will be able to promptly pay the [HFDC] for the leased fee interest in the lot[J" The criteria now must be met at the time of sale and at the time the lessee submits his/her application to purchase the leased fee interest. HRS § 516-33 (1993 Compilation).

. As noted, under HRS § 516-22, the HFDC must receive applications from "twenty-five or more lessees or the lessees of more than fifty per cent of the residential lease lots within the development tract, whichever number is the lesser,” before it can commence condemnation proceedings. All of the parties agree that the minimum number in this action was twenty-five.

. The HFDC’s finding that the acquisition of all or part of the development tract would effectuate *186the purposes of HRS Chapter 516 is subject to review in proceedings under HRS § 101-34, where the owners of designated land can "contest the public use, ... includ[ing] a contest of whether or not the prerequisites to such a condemnation set forth in the various provisions of HRS Chapter 516 such as the size of the tract, the number of persons applying, etc., have been met.” Takabuki v. Housing Finance and Development Corp., 72 Haw. 466, 468, 822 P.2d 955, 956 (1991) (emphasis added); see also Housing Finance and Development Corp. v. Castle, 79 Hawai'i 64, 89-90, 898 P.2d 576, 601-02 (1995).

. HRS § 101-33 provides, in pertinent part:
If an order is made letting the plaintiff into possession as provided for in sections 101-28, 101-29, and 101-32, the final judgment shall include, as part of the just compensation and damages awarded, interest at the rate provided in section 101-25 from the date of the order until paid by the plaintiff; provided that except in the case of an appeal by the plaintiff as provided in section 101-32, interest shall not be allowed upon any sum paid by the plaintiff to the clerk of the court from the date of payment.
(Emphasis added.)

. HRS 101-25 provides in part that "[t]he plaintiff shall within two years after final judgment pay the amount assessed- as compensation or damages.... The payment shall be made to the clerk of the court rendering the judgment.”

.I understand the Lessees’ and the HFDC's position that the deposited funds "are available for withdrawal by the Trustees without condition” as meaning just that — i.e., that the Trustees are entitled, upon making an appropriate motion in the circuit court, to withdraw and use the deposited funds without condition, as if they constituted final payment of the just compensation owed for the taking of the respective leased fee interests. Thus, by withdrawing the deposited funds, the Trustees would not be waiving or abandoning *188any defenses they may have to the condemnation action. Cf. HRS § 101-32 (1985) (if the defendant who is entitled to the compensation deposited with the circuit court appeals to the supreme court, the defendant can demand and receive payment of the deposited funds “at any time thereafter, upon filing a receipt therefor and an abandonment of all defenses to the action or proceeding except as to the amount of compensa-tíon or damages that the defendant may be entitled to if a new trial shall be granted”).

. In my view, the fact that the Trustees may, at some point, have to return the deposited funds as restitution if the HFDC does not acquire the respective leasehold interests does not render the Trustees' ability to withdraw the funds conditional.