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In re Application of Trustees Under Will and of Estate of Campbell

Intermediate Court of Appeals of Hawaii

June 13, 2013

In the Matter of the Application of THE TRUSTEES UNDER THE WILL AND OF THE ESTATE OF JAMES CAMPBELL, DECEASED, to register and confirm title to land situated at Kahuku, District of Ko'olau Loa, City and County of Honolulu, State of Hawai'i

APPEAL FROM THE LAND COURT OF THE STATE OF HAWAI'I (LAND COURT NO. 08-0054, APPLICATION NO. 1095).

Julie H. China Linda L.W. Chow (Donna H. Kalama with Julie H. China on the brief) Deputy Attorneys General for Respondent-Appellant State of Hawai'i.

Jennifer A. Benck Mark K. Murakami (Christopher J. Cole with Mark K. Murakami on the brief) for Petitioner-Appellee James Campbell Company LLC.

James J. Bickerton (Barry A. Sullivan with him on the brief) (Bickerton Lee Dang & Sullivan A Limited Liability Law Partnership) for Petitioner-Appellee James C. Reynolds, Inc.

Regan M. Iwao (Lani L. Ewart and Ronald H. W. Lum, Jr., with him on the brief) (Goodsill Anderson Quinn & Stifel A Limited Liability Law Partnership LLP) for Petitioner-Appellee Continental Pacific, LLC.

Robert H. Thomas (Damon Key Leong Kupchak Hastert) on the brief for Amicus Curiae Pacific Legal Foundation Hawaii Center.

NAKAMURA, CHIEF JUDGE, FOLEY, J., and CIRCUIT JUDGE CASTAGNETTI, in place of FUJISE, LEONARD, REIFURTH and GINOZA, JJ., all recused.

OPINION

NAKAMURA, C.J.

Petitioners-Appellees James Campbell Company LLC (Campbell), James C. Reynolds, Inc. (Reynolds), and Continental Pacific, LLC (Continental) (collectively referred to as "Petitioners") are the successors in interest to the Trustees under the Will and of the Estate of James Campbell, Deceased (Trustees), with respect to the property at issue in this appeal. Respondent-Appellant State of Hawai'i (State) is the successor in interest to the Territory of Hawai'i (Territory) . See Admissions Act of March 18, 1959, Pub. L. No. 86-3 (hereinafter, "Admissions Act"), § 5(a), 73 Stat. 4, reprinted in, Hawaii Revised Statutes (HRS), vol. 1 at § 5(a) of the Admissions Act.[1]

In 1934, the Trustees filed Application No. 1095 with the Land Court of the Territory of Hawai'i[2] to register title to a large area of land located on the North Shore of the Island of O'ahu. A small portion of the land covered by Application No. 1095, which Petitioners describe as approximately 235 acres, is the subject of this appeal (Subject Property). The Territory filed an "Answer and Claim" to the Trustees' application and asserted certain interests in the land sought to be registered. A portion of the Subject Property is derived from Land Commission Awards with Royal Patents and a Royal Patent Grant that contained reservations of mineral or metallic mines in favor of the government. However, in its "Answer and Claim, " the Territory did not assert any claim for the reservation of mineral or metallic mines. The Territory also did not assert a claim for a reserved easement for the free flowage of waters.

On November 30, 1937, the Land Court issued its "Decision" on the Trustees' Application No. 1095 (Original Decision), which stated that the claims of the Territory had been settled by agreement with the applicants or by exchange deeds filed in the record. The Original Decision held that the Trustees, subject to the exceptions noted, were the owners in fee simple of the lands described in the application. On January 24, 1938, the Land Court issued its original Decree of registration (Original Decree), which resulted in the issuance of the Original Certificate of Title No. 17, 854 (Original Certificate of Title). The Original Decree and the Original Certificate of Title, which included the Subject Property, did not contain a reservation of mineral or metallic mines or an easement for the free flowage of waters with respect to the Subject Property.

Over seventy years after the issuance of the Original Decree and Original Certificate of Title, Petitioners in 2008 initiated the Land Court proceeding that is the subject of this appeal. In 2009, Petitioners filed an "Amended and Restated Petition for Consolidation and Resubdivision, Creation of Shoreline Setback Line, and Designation of Easements" (Amended Petition) regarding the Subject Property. The State filed an answer to the Amended Petition and claimed various interests, including that (1) "[t]he State owns all mineral and metallic mines of every kind or description on the [Subject Property], including geothermal rights, and the right to remove the same"; and (2) "[t]he State has reserved an easement for the free flowage of any waters through, over, under, and across the [Subject Property.]" The Land Court[3] rejected the State's claims regarding these two interests and did not include them as encumbrances on the Subject Property. On July 16, 2009, the Land Court filed its "Findings of Fact, Decision and Order (Map 176)" and its "Decree (Map 176)."

On appeal, the State argues that the Land Court erred in denying its claim of ownership of all mineral and metallic mines, including geothermal rights, on the Subject Property and its claim of a reserved easement for the free flowage of waters. As explained below, we hold, under the circumstances of this case, that the Land Court did not err in denying these claims.

Accordingly, we affirm the Land Court's "Decision and Order" on the Amended Petition and its "Decree (Map 176)."

BACKGROUND

I. The Subject Property is derived from four prior land grants:

(1) Land Commission Award 8452 Apana 1, dated March 21, 1854, and Royal Patent No. 5616, dated October 15, 1867, both to A. Keohokalole (Royal Patent No. 5616);
(2) Land Commission Award 7130, dated October 1, 1852, and Royal Patent No. 5693, dated April 19, 1873, both to Kinimaka (Royal Patent No. 5693);
(3) Royal Patent Grant No. 550 to Charles Gordon Hopkins, dated March 12, 1851 (Grant No. 55 0); and
(4) the Deed of King Kamehameha III to Charles Gordon Hopkins, dated September 10, 1851, recorded in the Bureau of Conveyances of the State of Hawai'i in Liber 5, page 153 (Kamehameha III Deed).

Royal Patent No. 5616, Royal Patent No. 5693, and Grant No. 550, were subject to express reservations of mineral or metallic mines in favor of the Hawaiian Government. The Kamehameha III Deed did not contain an express reservation of mineral or metallic mines. None of the four land grants contained a reservation in favor of the government of an easement for the free flowage of waters.

On July 16, 1934, the Trustees filed Application No. 1095 with the Land Court to register title to approximately 15, 000 acres of land on the North Shore of O'ahu, of which the Subject Property was a small portion. The Trustees' application was brought pursuant to the then-exiting Land Court Registration Statute (the predecessor of HRS Chapter 501), and the Trustees sought to have their title to the land covered by their application "registered and confirmed as an absolute title." The Territory filed an "Answer and Claim" to the Trustees' application, asserting claims of title to and easements over certain of the properties covered by the application.[4] The Territory, however, did not claim ownership of any mineral or metallic mines or claim an easement for the free flowage of waters in its "Answer and Claim."

On November 30, 1937, the Land Court issued its Original Decision in Application No. 1095. With respect to the Territory's claims, the Original Decision stated that all claims set forth in the Territory's "Answer and Claim" "have been settled by agreement with the applicants or by exchange deeds filed in the record herein." On January 24, 1938, the Land Court issued its Original Decree regarding Application No. 1095, which resulted in the issuance of the Original Certificate of Title on that same date. The Land Court decreed that the Trustees "are the owners in fee simple" of the land described in the Original Decree, [5] which included the Subject Property, and that the Trustees' title was subject to various encumbrances. The list of encumbrances set forth in the Original Decree and the Original Certificate of Title does not contain a reservation of mineral or metallic mines or a reserved easement for the free flowage of waters in favor of the government. The Territory did not appeal from the Land Court's Original Decision or its Original Decree in Application No. 1095.

II.

On July 2, 2008, Petitioners filed a "Petition for Consolidation and Resubdivision, Creation of Shoreline Setback Line, and Designation of Easements" with respect to the Subject Property. On February 12, 2009, Petitioners filed their Amended Petition. In the Amended Petition, Petitioners asked the Land Court to (1) consolidate Lot 30 and 1198 of the Subject Property; (2) re-subdivide the Subject Property into Lots 1218 and 1219; (3) issue new certificates of title showing Campbell as the sole owner of Lot 1219 and Reynolds and Continental as joint owners of Lot 1218; (4) designate a shoreline setback based on the current shoreline which had been affected by erosion; and (5) recognize certain easements and encumbrances not at issue in this appeal.

The State filed an answer to the Amended Petition on March 11, 2009. In its prayer for relief, the State claimed the following interests in the Subject Property:

1. The State owns all mineral and metallic mines of every kind or description on the property, including geothermal rights, and the right to remove the same;
2. The State owns the submerged land up to the highest reaches of the wash of the waves, including the 34.113 acre eroded area;
3. The property is subject to the rights of native tenants;
4. The State has reserved all right, title, interest, or claim to waters having their source upon or flowing ...

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