Court Opinion

ID: 9609076
Source: CourtListenerOpinion
Date Created: 2023-08-22 03:22:11.337146+00
Date Added: 2024-06-11T13:35:49.854085
License: Public Domain

DISSENTING OPINION BY PADGETT, J., WITH WHOM HAYASHI, J., JOINS
I respectfully dissent from the affirmance of the summary judgment in this case because, in my judgment, there is a sufficient question, in the record, as to whether the appellees fulfilled their fiduciary duties, as trustees for native Hawaiians, to require a trial of the issue, with additional evidence, and findings of fact and conclusions of law.
I.
The appellees claim the power to issue the lease in question under the second paragraph of § 204(2) of the Hawaiian Homes Commission Act, which reads as follows:
In the management of any retained available lands not required for leasing under section 207(a), the department may dispose of those lands to the public, including native Hawaiians, on the same terms, conditions, restrictions, and uses applicable to the disposition of public lands in chapter 171, Hawaii Revised Statutes; provided that the department may not sell or dispose of such lands in fee simple except as authorized under section 205 of this Act; provided further that the department is expressly authorized to negotiate, prior to negotiations with the general public, the disposition of a lease of Hawaiian home *553lands to a native Hawaiian, or organization or association owned or controlled by native Hawaiians, for commercial, industrial, or other business purposes, in accordance with the procedure set forth in section 171-59, Hawaii Revised Statutes, subject to the notice requirement of section 171-16(c), Hawaii Revised Statutes, and the lease rental limitation imposed by section 171-17(b), Hawaii Revised Statutes.
Appellees contend that the lease in question is not for a “commercial purpose” but for a “public purpose”. It does not seem to me, in the circumstances of this case, that the two terms are mutually exclusive. The lease is for a boat ramp. A boat ramp serves a public purpose, in that it is used by members of the boating public. It can, and often does, also serve a commercial purpose, in that fees can be charged for the use of the ramp by members of the public. Nothing in the lease in question excludes such charges being made by the lessee.
Appellees say that they have the power, under the Act, to make leases to government agencies as they will, and that, because they considered that the lease in question would be of benefit to native Hawaiians, by providing improvements to tract lands, we should honor their expertise in the field, and grant deference to their determination. The Department of Hawaiian Home Lands is not, however, an ordinary government agency. As we said in Ahuna v. Department of Hawaiian Home Lands, 64 Haw. 327, 640 P.2d 1161 (1982):
In dealing with eligible native Hawaiians collectively or individually, appellant must adhere to high fiduciary duties normally owed by a trustee to its beneficiaries.
Id. at 338. Later in that case, we said:
One specific trust duty is the obligation to administer the trust solely in the interest of the beneficiary. . . .
A second fundamental trust obligation is to use reasonable skill and care to make trust property productive, ... or simply to act as an ordinary and prudent person would in dealing with his own property.. . .
Given these two basic duties of a trustee, we now impose them on the Hawaiian Homes Commission, the individual *554commissioners, and the Department to determine whether there has been a breach of fiduciary duties.
Id. at 340.
Ahuna and other cases which have come before us indicate that the Department is sometimes less than perfect in executing its fiduciary duties.
Appellants, in their complaint at paragraphs 1, 28, 45, 46 and 52, allege that they are native Hawaiians, willing to take the lease in question. In the answer, most of the allegations of paragraph 1 are admitted. The remaining allegations of paragraph 1 and the allegations of paragraph 28 and 52 are denied for lack of knowledge. The allegations of paragraph 45 are admitted and the allegations of paragraph 46 are denied. Therefore, the question of the willingness and ability of the appellants to accept and carry out the lease in question was at issue. Nothing in the stipulation of facts or the papers in support of the motion for summary judgment refutes their claim.
Moreover, there is nothing in the record to indicate that the appellees ever gave any consideration to attempting to find a lessee who was a native Hawaiian, or an organization controlled by native Hawaiians, or that granting of a lease, equivalent to General Lease No. 213, to such a lessee could not have served the purposes of the trust equally as well as granting a lease to the Department of Transportation (DOT).
I would hold that so long as the lease in question had commercial as well as public aspects to it, the appellees, as fiduciaries, had a duty under the second paragraph of § 204(2) of the Hawaiian Homes Commission Act to, at least, give consideration to making the lease in question to beneficiaries of the Act and, accordingly, would reverse the summary judgment.
II.
A disposition of this case under I, above, would avoid the necessity of construing the second paragraph of § 204(2) to determine if appellees have the power, thereunder, to dispose of trust lands to other government agencies for “public purposes.” Since I am unable to persuade a majority of my brethren on the narrow trust issue, I must then deal with the construction question.
*555The Hawaiian Homes Commission Act, 42 Stat. 108, is a federal statute originally adopted by the Congress of the United States in 1921. Article 4 of the Hawaii Admission Act, 73 Stat. 4, gave the new State of Hawaii power to amend the Hawaiian Homes Commission Act by statute only with the consent of the United States. With respect to § 204(2) of the Hawaiian Homes Commission Act, the Admission Act, however, provided:
Provided, That. .. paragraph (2) of section 204,.. . relating to the powers and duties of officers other than those charged with the administration of said Act, may be amended in the constitution, or in the manner required for State legislation[.]
The lease in question was issued in 1983, but the amendment to § 204(2) by Act 271 of the Session Laws of 1965 was not approved by Congress until October 27, 1986. 100 Stat. 3143. I assume that that approval was retrospective in nature and validated the lease in question. Since the Hawaiian Homes Commission Act remains a federal statute, its proper construction is a matter of federal law, upon which we, of course, do not have the last word.
Appellees contend that they have power under the first clause of the second paragraph § 204(2) to make the lease in question. They assert that clause gives them the same power that the Department of Land and Natural Resources (DL&NR) has under HRS Chapter 171 in dealing with other public lands. They point to HRS § 171-95 as giving the DL&NR the power to make leases such as General Lease No. 213. In other words, appellees argue that the phrase “the department may dispose of those lands to the public, including native Hawaiians, on the same terms, conditions, restrictions, and uses applicable to the disposition of public lands under chapter 171” means that they may make dispositions (except in fee) to government agencies for public purposes as they choose.
The first question then is whether a government agency is a part of the “public”. While a government agency is often called a public agency, nevertheless, the function of the government is to serve the public and, in common usage, the government and the public are separate. I would not, therefore, in this context, construe “public” as including the government.
The second problem is with the argument that the granting of the right to the department to dispose of lands to the public in-*556eludes the right to dispose of them for a “public purpose”. There is, in the Hawaiian Homes Commission Act in § 207, a specific provision dealing with dispositions of lands for a “public purpose”. Section 207(c)(1) expressly provides, in summary, as the parties to this action agree, that the Department of Hawaiian Home Lands can grant easements for railroads, telephone lines, electric power and light lines, gas mains, and the like. It further provides that the Department can grant licenses within a district in which lands are leased under the provisions of the Act, for, among other things, public purposes. If the provision in § 204(2) granting the Department the power to dispose of lands to the public encompasses the power to make dispositions for a “public purpose”, then the provisions of § 207(c) of the Act are mere surplusage, devoid of any effect.
Moreover, the “public purpose” clause in § 207(c), under the principle of ejusdem generis, seems to encompass uses which directly benefit the particular Hawaiian Home tract, rather than a benefit to the public at large which, as in this case, only incidentally, by virtue of the construction requirements in the lease, also benefits the trust.
Section 212 of the Hawaiian Homes Commission Act, with respect to lands returned by the Department to the DL&NR, specifically provides:
Notwithstanding the provisions of section 171-95, Hawaii Revised Statutes, in the leasing of Hawaiian home lands by the board to a public utility or other governmental agency, where such use directly benefits the department of Hawaiian home lands or the homestead lessees, the rental may be nominal; in all other instances, the lease rental shall be no less than the value determined in accordance with section I71-17(b), Hawaii Revised Statutes.
HRS § 171-17(b) provides:
Drawing or negotiation. The sale price or lease rental of lands to be disposed of by drawing or by negotiation shall be no less than the value determined by a disinterested appraiser or appraisers whose services shall be contracted for by the board, and such appraisal, and any further appraisal made at the re*557quest of the purchaser and with the approval of the board, shall be at the cost of the purchaser.
The record reflects that the appraiser, under the DOT’S proposal to the appellees, was directed to discount the fair rental value of the land in question and the lease, by its terms, substituted in place of some of the rent, improvements of a specified value. Moreover, the lease does not restrict the area on which those improvements may be constructed, to the area affected by the lease, but allows the appellees to require their construction anywhere within the 11,000 trust acres in Kamaoa-Puueo.
Thus, under § 212 of the Hawaiian Homes Commission Act, the DL&NR, exercising its powers under HRS § 171-95, could not have done what appellees have done, with respect to the lease in this case.
Appellees argue, however, in their brief, that “dispose of those lands to the public” provision in the second paragraph of § 204(2) gives them broader powers than the DL&NR would have with respect to making leases of Hawaiian home lands for public purposes. This last argument of appellees is, in effect, that they have the right, unrestricted by any provision in the statutes, to lease trust lands to other government agencies for public purposes, and that, for the protection of the trust, we must rely entirely upon their word that they are, in such instances, acting for the benefit of the trust. The breadth of the argument, in the light of Ahuna, and past experience, points out the danger of adopting appellees’ broad construction of the disposal phrase in the second paragraph of § 204(2) of the Hawaiian Homes Commission Act.
I would read the Hawaiian Homes Commission Act, as amended, as a whole. It appears to contain in its language a complete framework for dealing with the trust lands. It permits, under § 207(c) (1), the appellees to make dispositions for public utilities easements and, in certain instances, for public purposes. It permits lands, not being used and turned over to the DL&NR, to be leased under HRS § 171-95 with certain very definite restrictions as spelled out in HRS § 171-17(b). It permits the Hawaiian Homes Commission, with restrictions, to make leases to the public. It does not, in my judgment, grant the appellees the unrestricted power *558they claim to make leases for public purposes to other government agencies.1
Thus, on the question of power to make the lease, I would also reverse the judgment below.

 I realize, from the record, that the Department has frequently exercised its claimed power, and that legislative action would be necessary to validate those acts under my construction. However, if there is to be a power, in the Department, to turn over trust lands to other government agencies, it should be as a result of express language enacted by the legislature and approved by Congress with a full public debate on the desirability and the terms thereof. We owe the trust and its native Hawaiian beneficiaries no less.