MARK C. KELLBERG, Petitioner/Plaintiff-Appellant,
CHRISTOPHER J. YUEN, in his capacity as Planning Director, County of Hawai'i, and COUNTY OF HAWAI'I, Respondents/Defendants-Appellees.
CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS (CAAP-12-0000266; CIV. NO. 07-1-0157)
Robert H. Thomas and Mark M. Murakami for petitioner
Michael J. Udovic for respondent
RECKTENWALD, C.J., NAKAYAMA, ACOBA, MCKENNA, AND POLLACK, JJ.
This appeal arises out of a decision by Respondents/ Defendants-Appellants Christopher J. Yuen in his capacity as Planning Director of the County of Hawai'i (Planning Director) and the County of Hawai'i (County) (collectively, "County Defendants"), to approve a subdivision on the subject property. Petitioner/Plaintiff-Appellant Mark C. Kellberg (Kellberg), an adjacent land owner, filed an action in the Circuit Court of the Third Circuit (circuit court) challenging the subdivision approval. The circuit court granted summary judgment on all counts in favor of the County Defendants. In his Application for Writ of Certiorari (Application), Kellberg seeks review of the July 19, 2013 Judgment on Appeal of the Intermediate Court of Appeals (ICA), filed pursuant to its June 20, 2013 Memorandum Opinion, vacating the circuit court's judgment and remanding for an order dismissing the case. For the reasons set forth herein, we vacate the ICA's judgment and remand the case to the ICA for consideration of the remaining issues raised by Kellberg in his appeal to the ICA.
A. Subject Property
The subject property is a 49-acre parcel of land located in Ninole, County of Hawai'i (Subject Property). Kellberg owns property adjacent to the Subject Property. On May 22, 2000, Virginia Goldstein, the Planning Director at the time, sent a letter to Robert Williams,  President of Prudential Orchid Isle Properties, reflecting the Planning Department's determination that the Subject Property consisted of six preexisting lots. A map was attached to Goldstein's letter, reflecting five adjoining lots in the larger 48.47-acre portion of the Subject Property, and a sixth smaller, 0.600-acre noncontiguous lot (identified as Lot 4 on the map).
In December 2003, the then-owners of the Subject Property wrote to Christopher Yuen, who had taken over as Planning Director, stating that they would like to consolidate and re-subdivide the property. The owners wrote that it was their belief that there were at least "seven usable lots of record located" on the property. (Emphasis added). On June 2, 2004, the Planning Director responded to the owners and wrote that based on a review of the relevant records, the Planning Department had determined that "the subject property consist[s] of two (2) separate legal lots of record[.]" (Emphasis added). One of the lots included the small non-contiguous plot.
In 2004, Michael Pruglo purchased the Subject Property. In a letter dated January 15, 2005, Sidney M. Fuke, a planning consultant working with Pruglo, wrote to the Planning Director to memorialize a January 12, 2005 discussion between Fuke and the Director. Fuke wrote that at the January 12 meeting, the Director confirmed that he "would accept the six (6) lots acknowledged in the May 22, 2000 letter as lots of record[.]"
On April 7, 2005, Fuke filed a "Consolidation/ Resubdivision Application" (SUB 05-000064) with the Planning Department, on Pruglo's behalf. In the accompanying letter, Fuke reiterated that pursuant to Goldstein's May 22, 2000 letter and Fuke's January 15, 2005 discussion with the current Planning Director, the Subject Property was determined to have six preexisting lots.
The preliminary plat map included with the application, dated April 6, 2005, identifies the larger 48-acre portion of the Subject Property as "Parcel 1, " and divides Parcel 1 into six lots, labeled "1-A" through "1-F." However, the smaller, 0.6-acre non-contiguous lot from the Planning Department's May 22, 2000 letter is not included as part of the proposed subdivision. Instead, the non-contiguous lot is labeled "Parcel 2."
On June 1, 2005, the Planning Director granted tentative approval of the preliminary plat map.
On July 1, 2005, Fuke submitted a final plat map to the Planning Director. Consistent with the preliminary map, the final plat map identifies the larger portion of the Subject Property as "Parcel 1" and shows this portion divided into six lots. The smaller non-contiguous portion of the property, while reflected in the map, is no longer identified as "Parcel 2" or by any label.
On July 11, 2005, the Planning Director sent a letter to Fuke, providing, "FINAL SUBDIVISION APPROVAL NO. SUB-05-000064." The letter stated, "Please be informed that final subdivision approval for recordation is hereby granted to the final plat map as attached herewith inasmuch as all requirements of the Subdivision Code, Chapter 23, as modified have been met." (Emphasis added).
According to Kellberg, he first became aware of the subdivision of the Subject Property a month later on August 11, 2005, when he observed a "for sale" sign on the Subject Property, and a realtor later called him with an offer to sell him a newly created lot along his property line. The next day, he went to the Planning Department. He asked an employee about filing an appeal and was informed that the thirty-day period for appeals had already passed. He asked to speak to the Planning Director, but was told that he was unavailable. Kellberg then left his contact information and asked that the Director call him later that day. When the Director did not contact him as requested, Kellberg again visited the Planning Department on August 16 and left his contact information. However, the Director did not call him.
In a letter dated August 16, 2005, Kellberg informed the Planning Director that he had recently learned of the subdivision approval and that he was "writing to make [the Planning Director] aware of serious omissions and errors" in the approved subdivision plan. In relevant part, Kellberg noted that the final subdivision plan on file with the Planning Department divides the Subject Property into seven lots rather than six lots. The seventh lot consisted of the smaller, non-contiguous parcel reflected in the Planning Department's May 22, 2000 map as Lot 4. Kellberg wrote, "Your agreement to honor the previous administration's six pre-existing lot determination (as per your 01/12/05 meeting with Mr. Fuke), allows a six lot subdivision of the subject property, while the , final' subdivision plan on file with your office divides the subject property into seven lots."
Kellberg concluded his letter by stating that he "can appreciate that at this late date, the errors and omissions I have noted will be difficult to correct, and certainly inconvenient for all parties involved." He wrote, "I would encourage your prompt intervention in this matter[.]"
On October 19, 2005, the first subdivision lot was sold.
In a letter dated January 17, 2006, Kellberg again wrote to the Planning Director. He stated that in the five months since his first letter, he had called the Planning Director's office and left numerous messages, with no response. He reiterated that the most serious error in the subdivision approval was that it failed to recognize Lot 4 and created seven lots instead of the agreed-upon six lots. He concluded by requesting a response and an account of the steps the Planning Director had taken to correct the identified errors.
On February 17, 2006, Kellberg wrote to the County of Hawai'i Office of the Corporation Counsel (Corporation Counsel) with his concerns regarding the subdivision. Corporation Counsel responded on February 24, 2006, and encouraged Kellberg to continue attempting to contact the Planning Director and also noted that Kellberg could consider appealing the matter to the Hawai'i County Board of Appeals (BOA).
In a letter dated March 5, 2006, Kellberg wrote to the Planning Department, stating that he was writing "at the suggestion of Corporation [Counsel] ... to request information concerning the [BOA]."
On March 21, 2006, the Chairman of the BOA responded to Kellberg's March 5 letter to the Planning Department. The Chairman stated that "[a]ccording to our records, the Planning Director granted Final Subdivision Approval on July 11, 2005 for the 6-lot subdivision of the subject property." (Emphasis added). The Chairman continued by informing Kellberg that the BOA rules required an appeal from the Planning Director' s decision to be filed within thirty days of the decision: "For your information, Section 8-3, Time Limit for Filing Appeal, of Part 8 . . . states that an appeal from the decision of the Planning Director shall be filed within thirty (30) days after the decision." A copy of the BOA's Rules of Practice and Procedures and a General Petition form were enclosed with the letter.
On April 19, 2006, Pruglo and Fuke submitted a new consolidation and resubdivision application for the Subject Property (SUB 06-000333). The plan involved consolidating the non-contiguous parcel with another parcel created by the previous subdivision.
On June 19, 2006, Kellberg wrote a third letter to the Planning Director. According to Kellberg, he had become aware of the pending subdivision application and asked the Planning Director to notify him when the subdivision application was approved.
On August 25, 2006, Kellberg's counsel, Stephen D. Whittaker, wrote to the Planning Director at Kellberg's request. The letter provided that it was regarding "Subdivision Plan SUB-05-000064; Resubdivision Plan 06-000333." Whittaker wrote that it was his assumption that "an appeal is premature in that Mr. Kellberg has not received notice of any action purporting to approve the 'resubdivision' . . . and on June 19, 2006, he asked, in writing, to be notified 'when tentative approval has been granted . . . for the resubdivision.'"
On October 23, 2006, more than a year after Kellberg's first letter, the Planning Director responded by letter to Kellberg and Whittaker. The Director stated that he was writing in response to Kellberg's letters of August 16, 2005, January 17, 2006, and June 19, 2006, and to Whittaker's letter of August 25, 2006. The Director wrote, "The number of pre-existing lots on [the Subject Property], and their subsequent use in Sub. 05-00064 and the pending Sub. 06-000333 seems to be the most important issue."
With respect to the number of pre-existing lots, the Planning Director acknowledged that the Planning Department had previously recognized six lots on the subject property, per the Department's May 22, 2000 letter. The Director further acknowledged that in the Department's June 2, 2004 letter, the Department only recognized two lots. The Director stated, "This was a mistake, because the Department should have respected the previous determination."
The Director explained that he subsequently informed Fuke that the Department "would honor" the May 22, 2000 recognition of six lots. Accordingly, Pruglo's subdivision application was based on recognizing six pre-existing lots. The Director also acknowledged that "there was a mistake in the approval" of the subdivision application because the Planning Department had not accounted for the non-contiguous lot:
As Mr. Kellberg correctly points out, there was a mistake in the approval of that subdivision. One of the six recognized lots was a 0.699 acre portion of Grant 11, 070. For some reason, it was not contiguous with the remainder of TMK No. 3-2-2-35. In the consolidation/resubdivision, the Planning Department did not notice that this noncontiguous portion had been included in the lot count. Thus, it remained separate, and is now TMK No. 3-2-2-110. Thus, with the six lots in Sub. 05-00064 and parcel 110, there are now seven lots instead of six.
(Emphases added). The Director then stated that he would not be taking any action to "undo this situation at this time" because the subdivision had already "received final subdivision approval and at least some of the lots have been sold":
I am not going to do anything to undo this situation at this time. Sub. 05-0064 has received final subdivision approval and at least some of the lots have been sold. Given that parcel 110 is physically separated from the remainder of Sub. 05-00064, and from any property owned by the subdivider, I cannot see a way to erase its separate existence.
The Director concluded his letter by apologizing for not responding earlier and informing Kellberg that the Planning Department staff had been "instructed to send copies of future correspondence from our office concerning Sub. 06-000333 and any revisions of Sub. 05-00064."
In a letter dated February 6, 2007, Kellberg responded to the Director. Kellberg stated that he had reviewed the revised final plat map referenced in the Director's January 19, 2007 letter, and the "major defect" regarding the non-contiguous lot remained. Kellberg continued, "[A]nd so I thought I would avail myself of the opportunity to ask you to reconsider your stated position that you are , not going to do anything to undo this situation at this time.'" Kellberg cited § 23-74(c) of the Hawai'i County Code (County Code),  providing that the Director's "approval for recordation of the final plat by the director shall not relieve the subdivider of the responsibility for any error in the dimensions or other discrepancies. Such errors or discrepancies shall be revised or corrected, upon request, to the satisfaction of the director." Kellberg wrote that it was his belief that this provision "would give you the legal power to require Mr. Fuke and Mr. Pruglo to correct the mistake, regardless of the cost or inconvenience to themselves."
Kellberg noted that Fuke and Pruglo still owned two pairs of abutting lots in the subdivision. Accordingly, it was within the Director's power "to resolve the original lot count ''mistake' by simply notifying Mr. Fuke and Mr. Pruglo that they are required to combine one or the other of these abutting pairs into a single lot, thereby reducing the total number created to the requisite six."
On June 15, 2007, the Planning Director wrote a letter briefly responding to Kellberg, which did not address the concerns raised by Kellberg.
B. Circuit Court Proceedings
On May 11, 2007, Kellberg filed a Complaint in the circuit court against the County Defendants. In Count I, Kellberg alleged that he is a "person aggrieved by the decision of [the Planning Director] to approve SUB-05-00064." He further alleged that the Planning Director had continually refused to revise the subdivision approval to comply with Chapter 23 of the County Code, despite the Director's acknowledgment that there was a mistake in the approval of the seven-lot subdivision. The Director had also refused to require Pruglo to comply with the law.
In Count II, Kellberg alleged that he was entitled to a declaratory judgment regarding "the application of the [County Code] to SUB-05-00064 and [the Planning Director's] arbitrary decision to disregard the limitations of Section 23-67 and to create seven (7) lots out of one in violation of Section 23-7 [(governing pre-existing lots)]."
Under Count III, Kellberg claimed that as an adjacent landowner, he has a property interest in the subdivision. He stated that the County Defendants approved the subdivision "without correcting patent defects" and without providing any notice or due process to him. He alleged that the subdivision approval therefore violated his right to due process under the Fifth and Fourteenth Amendments to the U.S. Constitution and article I, section 5 of the Hawai'i Constitution.
In Count IV, Kellberg alleged that the Planning Director abused his discretion and violated statutes by refusing to apply County Codes § 23-67, requiring tentative approval of the preliminary plat map to be deemed void without timely submission of a final map, and § 23-74 (c), requiring errors in subdivisions to be revised or corrected to the director's satisfaction.
In Count V, Kellberg alleged that he was entitled to an injunction requiring the Planning Director to bring the subdivision into compliance with the County Code and prohibiting the County Defendants "from permitting more than two (2) lots on the Subject Property and from allowing any subdivision of the Subject Property other than in accordance with [the County Code]."
Finally, in Count VI, Kellberg claimed that his property had been adversely and materially impacted by the subdivision and by the County Defendants' refusal to correct the mistakes that had been made.
On January 9, 2008, the County filed a Motion to Dismiss the Complaint (First Motion to Dismiss). The County argued that the Complaint must be dismissed because Kellberg "has not alleged any concrete interest which gives rise to standing on his part to bring this suit."
Following a hearing on the motion, the court entered an order denying the County's First Motion to Dismiss on April 1, 2008. The court found that Kellberg, "as the owner of real property adjoining SUB-05-00064, has standing to assert the claims in the Complaint."
On July 23, 2008, the County Defendants filed a Motion to Dismiss for Failure to Exhaust Administrative Remedies (Second Motion to Dismiss). The County Defendants noted that pursuant to County Code § 23-5, any person aggrieved by the Director's decision "may, within thirty days after the director's decision, appeal the decision to the board of appeals." The County Defendants argued that Kellberg was aware of the subdivision in August 2005, and "the Planning Director, in a letter dated October 23, 2006, refused to accede" to Kellberg's requests. The County Defendants argued that Kellberg had not appealed any decision of the Director to the BOA within the required thirty-day time frame. Accordingly, the circuit court lacked subject matter jurisdiction over the case because Kellberg had failed to exhaust all available administrative remedies.
Kellberg responded that the circuit court has original jurisdiction over the Complaint, which alleged violations of the state and federal Constitution and violations of statutes. Kellberg argued that even if the court found that the Planning Department or BOA has unique expertise regarding any issues raised in the Complaint, the doctrine of primary jurisdiction required the action to be stayed rather than dismissed.
A hearing on the Second Motion to Dismiss was held on September 5, 2008. In response to the court's questions regarding notice of the subdivision to Kellberg, counsel for the County Defendants argued that the Planning Director's October 23, 2006 letter "says this was a final decision and nothing else could have occurred." Thus it was the County Defendants' position that Kellberg had until November 23, 2006 to file an appeal.
However, the court responded that the letter was "somewhat ambiguous or at least confusing" because the Chairman appeared to be saying that the final subdivision approval was on July 11, 2005, and Kellberg should have filed an appeal by August 11, 2005, which was well before the Chairman's letter.
On September 30, 2008, the circuit court entered its findings of fact, conclusions of law and order denying the Second Motion to Dismiss. The court found "the County has not shown that there were administrative processes available to Mr. Kellberg providing meaningful and adequate notice of SUB 05-00064 and an opportunity to appeal the Planning Director's decision."
The court concluded that it had "original jurisdiction of Plaintiff's Complaint which, under the circumstances, is not subject to dismissal for failure to exhaust administrative remedies." The court further concluded that Kellberg "did not fail to exhaust available administrative remedies and, instead, the Court finds that, under the circumstances presented on the motion, Plaintiff did not have an available administrative remedy."
On May 27, 2009, Kellberg filed a "Motion for Partial Summary Judgment on Count I (Violation of Statute), Count II (Declaratory Judgment) and Count IV (Abuse of Discretion)" (Motion for Partial Summary Judgment). Kellberg argued that there was no genuine issue of material fact that the County Defendants had violated the County Code by approving the subdivision, which "yielded seven (7) lots out of six (6)[.]" Additionally, Kellberg claimed that the Planning Director, who acknowledged the "mistake" in his subdivision approval, was required to correct the mistake.
In response, the County Defendants argued that the "determinations of pre-existing lots as well as the approval of the number of lots in a consolidation and re-subdivision are determinations within the discretion of the Planning Director."
On May 29, 2009, the County Defendants filed a "Motion to Dismiss Pursuant to Rule 12(b)(6) of the Hawaii Rules of Civil Procedure" (Third Motion to Dismiss). The County Defendants argued that no private cause of action exists to permit Kellberg to challenge the Planning Director' s actions regarding the County Code.
On June 19, 2009, a hearing was held on Kellberg's Motion for Partial Summary Judgment. The court explained that it was "inclined to . . . flesh out the record at the County level" by granting Kellberg's Motion for Partial Summary Judgment "in the form of an order remanding this back down to the County for a appeal before the Board of Appeals." The court further explained that it was finding that "Kellberg was denied an appeal before the Board of Appeals based on the October 23, 2006, decision of the director, " but stopping short of finding a specific violation of the subdivision approval and "leaving that up to the Board of Appeals." The court stated that it was "sending it back to the Board of Appeals to process" Kellberg's "[a]ppeal of the October 23 decision."
On July 24, 2009, the court filed its order granting the Motion for Partial Summary Judgment. The order provided, "IT IS ORDERED ADJUDGED AND DECREED that Plaintiff should have been allowed to appeal the decision of October 23, 2006 pursuant to the provisions of Section 23-5 of the Hawaii County Code but Plaintiff was denied such an opportunity to appeal." The order continued, "The Court remands this case to the Board of Appeals for the County of Hawaii ...