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Goo v. Arakawa

Intermediate Court of Appeals of Hawaii

September 19, 2013

KAREN GOO, et al., Plaintiffs/Counterclaim-Defendants /Appellants/ Cross -Appellees
v.
MAYOR ALAN ARAKAWA, Successor-in-interest to Mayor Charmaine Tavares, WILLIAM SPENCE, Director of Planning, County of Maui, Successor-in-interest to Director Jeff Hunt, County of Maui, Defendants/Cross-Claim Defendants/ Appellees/Cross-Appellants/Cross-Appellees and VP AJSID PK(ML) LLC, KCOM Corp., Defendants/lntervenor- Defendants/Cross-Claim Defendants/ Cbunterclaimants/ Cross-Claimants/Appellees/Cross-Appellees/Cross-Appellants and KILA KILA CONSTRUCTION, Defendant/Cross-Claim Defendant/Cross-Claimant and (JOHN G.) JOHN G'S DESIGN & CONSTRUCTION, INC., Defendant/Cross-Claimant/Cross-Claim Defendant and NEW SAND HILLS LLC, Defendant/lntervenor- Defendant/Counterclaimant/Cross-Claim Defendant/ Appellee/Cross-Appellee/Cross-Appellant and DAVID B. MERCHANT; JOYCE TAKAHASHI; BRIAN TAKAHASHI, Defendants/Intervenor-Defendants and DIANE L. REASER, et al., Defendants/Intervenor-Defendants/Counter-Claimants and HOOKAHI, LLC, SANDHILLS ESTATES COMMUNITY ASSOCIATION, Intervenors/Appellees/Cross-Appellees/Cross-Appellants and CHERYL CABEBE, GERRY RIOPTA, and MELISSA RIOPTA, Intervenor-Defendants/Appellees/Cross-Appellants and DOE DEFENDANTS 1-10 0, Defendants/Cross-Claim Defendants

NOT FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER

Apple from the Circutt Court of the Second Circutt (Civil No. 07-1-0258(1))

David J. Gierlach . Lance D. Collins for Plaintiffs/Counterclaim Defendants/Appellants/Cross-Appellees

Madelyn S. D'Enbeau Deputy Corporation Counsel Department of the Corporation Counsel for Defendants/Cross-Claim Defendants/ Appellees/Cross-Appellants/ Cross-Appellees

Ronald T. Ogomori Nathan H. Yoshimoto (Ogomori & Yoshimoto, LLP) for Defendants/Intervener-Defendants/ Cross-Claim Defendants/Counterclaimants/ Cross-Claimants/Appellees/Cross-Appellees/ Cross-Appellants New Sand Hills, LLC, VP&PK (ML), LLC and KCOM Corp. and for Intervenors/Appellees/Cross-Appellees/ Cross-Appellants Hookahi, LLC and Sandhills Estates Community Association

Fujise, Presiding Judge, Leonard and Ginoza, JJ.

MEMORANDUM OPINION

This case relates to the development of the Sandhills Estates (Sandhills Estates) and the Fairways at Maui Lani (Fairways), which are residential projects in the Maui Lani Project District on the island of Maui.

This appeal arises from the Final Judgment (Final Judgment) entered on September 30, 2009 by the Circuit Court of the Second Circuit (circuit court).[1] The Final Judgment entered judgment in favor of certain remaining Plaintiffs[2] (collectively Homeowners) as to Counts I and II of the Fourth Amended Complaint for Declaratory and Injunctive Relief and Damages (Fourth Amended Complaint). Judgment on Counts I and II were entered against, among others, Defendants/Appellees/Cross-Appellants Mayor Alan Arakawa, Successor-in-interest to Mayor Charmaine Tavares, William Spence, Director of Planning, County of Maui, Successor-in-interest to Director Jeff Hunt, [3] and the County of Maui (collectively the County)[4]; and Intervenors/Cross-Appellants KCOM Corp., Sandhills Estates Community Association (Association), and Hookahi, LLC. The circuit court entered judgment on Counts I and II pursuant to its "Findings of Fact, Conclusions of Law and Order Granting Plaintiffs' Motion for Partial Summary Judgment" filed on December 31, 2008 (2008 Order).

All other claims in the case were dismissed. Counterclaims by Intervenors/Cross-Appellants New Sand Hills, LLC (New Sand Hills) and VP & PK (ML), LLC (VP&PK) were among the claims dismissed by the circuit court.

In this appeal, KCOM Corp., New Sand Hills, VP&PK, and the Association are represented by the same counsel. For purposes of this opinion, these parties will be referred to collectively as "Developers."[5]

I. Issues Raised on Appeal

On appeal, Homeowners challenge the circuit court's April 3, 2009 "Order Granting in Part and Denying in Part Plaintiffs' Motion for Award of Attorneys' Fees and Costs" (Fees/Costs Order), asserting that the circuit court "erred in denying Homeowners' request for attorneys' fees against the County under the private attorney general doctrine."

The County, in turn, cross-appeals and challenges the circuit court's rulings regarding standing, injunctive relief, indispensable parties, the interpretation of Hawaii Revised Statutes (HRS) § 46-4, the deference to be accorded to the County's interpretation of the Maui County Code (MCC), and the grant of summary judgment for Homeowners.

The Developers also cross-appeal, collectively raising challenges to the circuit court's rulings regarding exhaustion of administrative remedies, vested rights, equitable estoppel, interpretation of a unilateral agreement, summary judgment, a laches defense, and a motion to intervene.[6]

II. Background

In Homeowners' initial Complaint filed on July 18, 2 007, Homeowners asserted a total of twelve counts against the County and various entities denominated as developers or subcontractors. In Counts I and II of the Complaint, Homeowners asserted that the County, the developers, and the subcontractors of the Sandhills Estates and Fairways violated County zoning ordinances by applying a pre-1991 definition of "building height" for the homes being built. In the subsequent counts, Homeowners alleged, inter alia, various claims for negligence, nuisance, emotional distress, and trespass related to the development-related activities. The Complaint sought declaratory relief, injunctive relief, and damages. Subsequently, Homeowners filed a number of amended complaints adding parties, but the substantive counts remained the same.

Over the objection of Homeowners, the circuit court granted a motion to bifurcate Counts I and II of the Complaint from the rest of the counts in the Complaint. As a result, this case proceeded only as to Counts I and II, which sought declaratory and injunctive relief related to the height restriction.

At issue is whether a pre-1991 definition of "building height" in a county ordinance applies to the Sandhills Estates and Fairways subdivisions, or whether a 1991 revised definition, contained in the MCC, applies. The 1991 definition provided a more limited height restriction and Homeowners contend it applied.

Zoning regulations are addressed in Title 19 of the MCC. MCC Chapter § 19.78, which was enacted in 1990 by Ordinance No. 1924 and Ordinance No. 1939, established the Maui Lani Project District and provides development standards. This chapter sets out the maximum building height of residential buildings as "two stories, not exceeding thirty feet [.]" MCC §§ 19.78.02 0(B) (1) (b) (iv); 19.78.02 0 (B) (2) (b) (iv) . However, MCC § 19.78 provides no formula for determining how the maximum height of thirty feet is to be measured.

In September 1990, the Maui Planning Commission approved a preliminary site plan, which the circuit court found constituted Phase II approval for the Maui Lani Project District. At that time, "building height" was defined, in relevant part, as "[t]he vertical distance from finished 'grade' to the highest point of the finished roof surface . . . ." The Permanent Ordinances of the County of Maui § 8-1.2 (1971) (emphasis added). In other words, if landfill was used to raise the elevation of a lot and then a house was built, the height of the house would be measured from the new elevation or "finished grade" created by the addition of landfill.

On September 4, 1991, the County adopted Ordinance No. 2031, which revised the definition of "building height" as follows: "'Building height' means the same as 'height'" and "'[h]eight' means the vertical distance measured from a point on the top of a structure to a corresponding point directly below on the natural or finish grade, whichever is lower." MCC § 19-04.040 (emphasis added). Under this new definition, if fill has been added, the height of the building is measured from the lower natural grade.

The County and Developers contend that the pre-1991 height definition applies to Sandhills Estates and Fairways because those subdivisions had received' Phase I and Phase II project district development approval by September 18, 1990, approximately one year before the 1991 change of definition restricted building height.

The circuit court disagreed, and instead determined that the 1991 definition applied to the two subdivisions. On December 31, 2 008, the court entered the 2008 Order, which provides, in relevant part:

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that:

1. The Maui Lani Project District, as a whole, is subject to the residential height restriction as determined in 1991 and codified at Maui County Code § 19.04.040, which states that building height "means the vertical distance measured from a point on the top of a structure to a corresponding point directly below the natural or finish grade, whichever is lower."
2. Defendant, County of Maui, is enjoined from taking any action which conflicts with the Court's determination of the applicable height restriction relative to the Sandhills project and the Fairways project including, but not limited to, the issuance of building permits the result of which would be inconsistent with Maui County Code § 19.04.04.
3. This Order shall remain in effect until further order of the Court.

As noted, Final Judgment was entered on September 30, 2009. Homeowners, the County, and Developers filed timely appeals and cross-appeals.

On August 28, 2 011, while this case was on appeal, Ordinance No. 3848 was adopted, which further amended the provisions related to "height" in MCC § 19.04.040. In particular, Ordinance No. 3848 clarified that the pre-1991 definition of "height" -- utilizing finish grade -- applied to certain development projects. Ordinance No. 3848 provides in relevant part:

SECTION 1. Section 19.04.04 0, Maui County Code, pertaining to comprehensive zoning provisions, is amended by amending the definition of "height" to read as follows:

""Height" means the vertical distance measured from a point on the top of a structure to a corresponding point directly below on the natural or finish grade, whichever is lower. For structures within projects that received site plan approval in association with a project district phase II approval, step II planned development approval, or final subdivision approval after September 4, 1991, building height shall conform to the elevation as indicated on the approved site plan, which may use finish grade to measure height. For structures within project districts that received phase II approval prior to September 4, 1991, finish grade shall be used to determine height."
SECTION 2. New material is underscored. . . .
SECTION 3. This ordinance shall take effect upon its approval and shall ...

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