United States District Court, D. Hawaii
ORDER: (1) GRANTING IN PART AND DENYING IN PART INDIVIDUAL DEFENDANTS’ MOTION FOR PARTIAL DISMISSAL OF CLAIMS IN PLAINTIFF’S COMPLAINT, FILED ON SEPTEMBER 18, 2015, AND FOR A MORE DEFINITE STATEMENT AS TO CERTAIN CLAIMS; AND (2) DENYING AS MOOT PLAINTIFF’S MOTION TO DISMISS DEFENDANTS’ AMENDED COUNTERCLAIM FILED NOVEMBER 12TH, 2015 PURSUANT TO FRCP RULE 12(B)(1), (3), (6)
Leslie E. Kobayashi United States District Judge
The instant case was removed to this Court on September 28, 2015, after originally being filed in the Circuit Court of the Second Circuit, State of Hawai`i. See Notice of Removal, filed 9/28/15 (dkt. no. 1), Exh. A, Parts 1-3 (“Complaint”). On November 30, 2015, Defendants Alan Arakawa (“A. Arakawa”), Patrick Wong (“Wong”), Keith Regan (“Regan”), David Goode (“Goode”), Milton Arakawa (“M. Arakawa”), William Spence (“Spence”), John Minn (“Minn”), and Jeffrey Hunt (“Hunt”), all in their individual capacities (collectively “Individual Defendants”), filed a Motion for Partial Dismissal of Claims in Plaintiff’s Complaint, Filed on September 18, 2015, and for a More Definite Statement as to Certain Claims (“Motion for Partial Dismissal”). [Dkt. no. 22.] Plaintiff Christopher Salem (“Plaintiff”) filed a memorandum in opposition on December 21, 2015, and the Individual Defendants filed a reply on December 28, 2015. [Dkt. nos. 40, 44.]
On November 12, 2015, Defendants County of Maui, Mayor Alan Arakawa, Corporation Counsel Patrick Wong, former Director of the Department of Finance Keith Regan, Director of Public Works David Goode, former Director of Public Works Milton Arakawa, Director of the Department of Planning William Spence, former Director of the Department of Planning John Minn, and former Director of the Department of Planning Jeffrey Hunt, all in their official capacities (collectively “County Defendants”), filed an Amended Counterclaim Complaint against Christopher Salem (“Counterclaim”). [Dkt. no. 18.] On December 3, 2015, Plaintiff filed a Motion to Dismiss Defendants’ Amended Counterclaim filed November 12, 2015 Pursuant to FRCP Rule 12(b)(1), (3), (6) (“Motion to Dismiss Counterclaim”). [Dkt. no. 25.] Plaintiff filed an errata to the Motion to Dismiss Counterclaim on December 6, 2015 (“Errata”). [Dkt. no. 29.] On December 21, 2015, the County Defendants filed a memorandum in opposition. [Dkt. no. 41.] Plaintiff filed a reply on December 28, 2015, and he filed an errata to the reply on December 29, 2015 (“Reply Errata”). [Dkt. nos. 45, 46.]
On February 25, 2016, this Court issued an entering order finding these matters suitable for disposition without a hearing pursuant to Rule 7.2(d) of the Local Rules of Practice of the United States District Court for the District of Hawai`i (“Local Rules”), and vacating the hearing set for February 29, 2016 at 11:15 a.m. [Dkt. no 74.] After careful consideration of the motions, supporting and opposing memoranda, the relevant legal authority, and for the reasons set forth below, the Motion for Partial Dismissal is HEREBY GRANTED IN PART AND DENIED IN PART and the Complaint is HEREBY DISMISSED in its entirety. Further, the Counterclaim is HEREBY DISMISSED, and the Motion to Dismiss Counterclaim is therefore DENIED AS MOOT.
The Complaint is 133 pages and includes 604 numbered paragraphs. In addition, 131 pages of declarations and exhibits are attached. The following is what the Court has gathered from its attempts to decipher the Complaint.
“On October 14, 1994, Anka Inc., which owned Lot 48 of the Mailepai Hui Partition along Lower Honoapiilani Road and Hui Road E” received approval for a three-lot subdivision, which it subdivided into Lot 48A, Lot 48B, and Lot 48C. [Complaint at ¶¶ 92, 97.] Plaintiff purchased Lot 48C in February 1999, and received a Warranty Deed from Anka, Inc. [Id. at ¶¶ 93, 100.] According to the law at the time, Special Management Area (“SMA”) permits were not required for subdivisions that had four or fewer parcels (“Three Lots or Less”). [Id. at ¶ 93.] Moreover, the Maui County Code stated that
“[i]mprovements to existing streets may be deferred for a subdivision containing 3 Lots or Less, provided sub-divider or owner, their heirs, executors for assigns agree to pay their pro rata share of the cost of road improvements [pursuant] to the terms of the ordinance authorizing said improvements by the County or to a formula determined by the County. The land so subdivided shall not thereafter qualify for the exemption with respect to any subsequent subdivision of any of the resulting parcels.”
[Id. at ¶ 96 (emphasis omitted) (quoting Maui County Code, § 18.020.040A).
Plaintiff alleges that the Three Lots or Less program did not provide a formula for calculating the pro rata share that individual landowners would need to pay for road improvements, but it did provide, according to Plaintiff, that the State of Hawai`i Bureau of Conveyances had an “open ended encumbrance in senior position on the title” of all properties that were part of such an agreement. [Id. at ¶ 150 (emphasis omitted).] It was Plaintiff’s understanding that any further development in the subdivision that included Lot 48C would require the developer to pay for infrastructure improvements, and the encumbrance on his title from the Three Lots or Less agreement would be removed. [Id. at ¶ 101.] In addition, Plaintiff believed any further subdivision of the three lots - Lot 48A, Lot 48B, and Lot 48C - would require an SMA permit, “public hearings, shoreline access parking, park land dedication, environmental assessment, and public review in an open forum.” [Id. at ¶ 102.]
Plaintiff alleges that in 2001, he discovered that Maui County was not keeping records of the Three Lots or Less agreements. [Id. at ¶ 155.] Plaintiff asserts that he undertook multiple efforts on multiple fronts to document the Three Lots or Less agreements, and that those efforts were stymied by various members of Maui County government at every step. Regardless, he was able to obtain over 10, 000 pages related to Three Lots or Less agreements, which he catalogued and used to map the location of each agreement. [Id. at ¶ 228.] In doing so, Plaintiff discovered that there were many “overlapping one time ‘3 Lots or Less’ subdivision deferral agreements on the same parent parcels of land thru out [sic] Maui County including the Plaintiff’s subdivision.” [Id. at ¶ 229.]
In March 2010, Anka, Inc. sold Lot 48A to developer Lot 48A LLC. [Id. at ¶ 298.] Lot 48A LLC received an SMA minor permit in June 2000. [Id. at ¶ 317.] SMA minor permits were reserved for development projects with a valuation of less than $125, 000. [Id. at ¶¶ 319.] The permit required certain “conditions, assessments, and roadway construction and drainage mitigations” that Plaintiff alleges Lot 48A LLC has not completed. [Id.
at ¶ 335.] Plaintiff asserts, therefore, that Defendant Arakawa,  in direct violation of procedures, policies, and provisions adopted by ordinance, incurred an illegal obligation for the County of Maui to pay for upwards to quarter million dollars in a private client Lot 48A, LLC’s financial obligations.” [Id. at ¶ 354.] Moreover, Plaintiff argues that, because Lot 48A LLC subdivided Lot 48A after a Three Lots or Less agreement had already been used for the land in question, Maui County should have removed the encumbrance from his property. [Id. at ¶ 356.]
In May 2010, Maui County sent a “‘Notice of Intent to Collect’ to property owners along Phase IV of Lower Honoapiilani Road for their pro rata share of monies” owed (“May 2010 Notice”), informing them of their responsibility to pay for roadway improvements pursuant to relevant Three Lots or Less agreements. [Id. at ¶ 253.] Plaintiff tried to sell Lot 48C in January 2011, and he states that, upon entering escrow, he had a legal obligation to inform the title company of the May 2010 Notice. [Id. at ¶ 260.] The title company sent Corporation Counsel a request for the amount of the encumbrance on Lot 48C, but the Corporation Counsel did not respond. As a result, the property was unappraisable, and many realtors would therefore not work with Plaintiff. [Id. at ¶¶ 260-68.] Thereafter, during a judicial foreclosure of the Property, Plaintiff’s tenant at Lot 48C agreed to buy the home. Another title company asked Maui County for the amount owed for the Three Lots or Less encumbrance, and they were told that no money was owed, but that an amount may be assessed in the future. [Id. at ¶¶ 269-75.]
Plaintiff’s family home and Lot 48C were sold in a judicial foreclosure on January 20, 2015. [Id. at ¶ 390.] Plaintiff makes a number of statements in the Complaint that seek to link the events described to the foreclosure of his two properties. See, e.g., id. at ¶ 57 (“Plaintiff Salem’s family home has now been lost to foreclosure due to the unlawful acts by the Defendant’s named herein.”); id. at ¶ 391 (“Plaintiff Salem has exhausted his life savings on legal fees spent to protect his property and his interests, as a direct and proximate result of an unfulfilled, open, and unenforced Lot 48A, LLC SMA Permit.”). Moreover, Plaintiff alleges that an attorney for Lot 48A LLC secretly drafted and recorded “private warranty deeds” that altered the Three Lots or Less agreement on the property to make it appear as if the agreement included five lots. [Id. at ¶ 78-79.] This allegedly led to a “fraudulent settlement agreement” and a ...