FROM THE CIRCUIT COURT OF THE FIFTH CIRCUIT (CIVIL NO.
Richard E. Wilson, for Defendants-Appellants.
Kea Trask, (Office of the County Attorney) Rosemary T. Fazio,
James K. Mee, (Ashford & Wriston) for Plaintiff-Appellee.
PRESIDING JUDGE, LEONARD and GINOZA, JJ.
case involves Plaintiff-Appellee County of Kaua'i's
(County) exercise of eminent domain to take private land in
which the Defendants-Appellants Hanalei River Holdings, Ltd.,
(HRH) and Michael Sheehan (Sheehan) (collectively, the
Sheehan Defendants) owned an interest. The Sheehan Defendants
appeal from a "Final Judgment As To All Claims and All
Parties" (Judgment) entered April 25, 2014, in the
Circuit Court of the Fifth Circuit (circuit
appeal, the Sheehan Defendants contend the circuit court
erred by (1) granting the County's motion to withdraw a
portion of estimated just compensation that had been
deposited with the circuit court; (2) granting the
County's motion for summary judgment on the issue of
severance damages; and (3) adopting the County's
calculation for blight of summons damages.
reasons stated below, we vacate the circuit court's award
for blight of summons damages and remand on that issue. In
all other respects, we affirm.
31, 2011, the County filed a Complaint against Sheehan
asserting its exercise of eminent domain to take private land
for a public use, specifically to expand a public park
located in Hanalei commonly known as Black Pot Beach Park.
The private land at issue consists of three parcels, referred
to in this case as Parcel 33 (TMK No. (4) 5-5-01-033), Parcel
34 (TMK No. (4) 5-5-01-034), and Parcel 49 (TMK No. (4)
5-5-01-049) (collectively referred to as the Subject
Properties). Subsequently, the County filed a First Amended
Complaint adding defendants, including HRH and Patricia
Wilcox Sheehan, individually and as Trustee of that certain
unrecorded Revocable Trust Agreement of Patricia Wilcox
Sheehan, dated December 21, 1994 (Patricia
April 30, 2012, the County filed an ex parte motion for an
order putting it in possession of the Subject Properties. In
an attached affidavit, Wallace G. Rezentes, Jr., Director of
Finance of the County of Kaua'i, stated that the County
had deposited with the chief clerk of the circuit court the
amount of estimated just compensation for the taking of the
real property, $5.89 million, as required under Hawaii
Revised Statutes (HRS) §§ 101-29 and -30 (2012).
4, 2012, the circuit court entered the requested ex parte
order of possession in favor of the County.
29, 2012, Patricia Sheehan filed an answer to the First
Amended Complaint and asserted that she, both individually
and as trustee, "is the owner of the fee simple
interests, easements, rights of way or the express contingent
remainder man [sic], to all or portions of the real property
[Parcels 33, 34, and 49.]" Further, Patricia Sheehan
requested that the circuit court decide the respective
interests of all named defendants and that the court
"determine and award the just compensation, including
but not limited to blight of summons, to which Patricia W.
Sheehan is entitled by virtue of the taking, and severance
damages to the remaining property."
August 16, 2012, HRH filed an answer in which it admitted it
has right, title, and interest in the subject parcels. HRH
also filed a "Motion to Vacate Ex Parte Order Putting
Plaintiff in Possession" in which it argued, inter
alia, that the appraisal used as a basis for the
estimate of just compensation was seven months stale on the
date of summons (the valuation date pursuant to HRS §
101-24 (2012)), thus "[i]t was stale as a matter of law
and did not in good faith represent the reasonable fair
market value of the property." At the hearing on the
motion, HRH argued that the primary defect in the appraisal
was that it did not value purported improvements made to the
lots. On September 13, 2012, the court entered an order
denying HRH's motion to vacate the order of possession.
September 25, 2012, Sheehan filed an answer and admitted that
"some of the identified individuals and/or entities have
right, title and interest in the subject parcels[.]"
March 11, 2013, the Sheehan Defendants filed an application
for payment of the estimated compensation, requesting that
the clerk of the court remit the entire deposit of estimated
compensation ($5.89 million), minus the required taxes,
penalties and interest, pursuant to HRS § 101-31 (2012).
On March 19, 2013, Patricia Sheehan filed a statement of no
position regarding the Sheehan Defendants' application
for payment of estimated compensation. However, Patricia
requested that her attorneys have an opportunity to review
any order entered in relation to the application.
April 2, 2013, the County filed an opposition to the
disbursement of the estimated compensation asserting,
inter alia, that it was unresolved how the Sheehan
Defendants would apportion the payment between the Subject
Properties given that Sheehan owned Parcel 49, HRH owned
Parcels 33 and 34, and the interests of Patricia Sheehan
remained to be adjudicated. The County also noted that title
to the Subject Properties was clouded as to exactly what
interest each of the three defendants had in the properties
because the tax map of the Subject Properties reflected a
subdivision that was never completed. The County also
contended that, in the event the jury awarded compensation in
a manner different than the allocation made by the
defendants, it "would have no reliable means of
recouping any excess payment" because, for example, if
HRH, a Cook Islands corporation, withdrew the estimated just
compensation and it was later determined HRH was not entitled
to that amount, the County would be forced to seek
reimbursement from a foreign corporation with potentially no
other assets in Hawai'i.
same day, April 2, 2013, the County also filed a motion to
withdraw $1.03 million of the estimated just compensation on
deposit with the court, contending it was entitled to adjust
its estimate based on an updated appraisal of the Subject
Properties that valued the properties at $4.86 million. The
County asserted that its initial deposit was based on an
appraisal conducted in anticipation of condemnation
litigation, but, once the Complaint was filed, it obtained an
updated appraisal by the same appraiser based on the
applicable valuation date, May 31, 2011, the date of summons.
April 5, 2013, Patricia Sheehan filed a waiver and release of
all proceeds payable by the County in the proceedings and
expressed her consent to disbursement of the proceeds to the
same day, April 5, 2013, the Sheehan Defendants filed a reply
in support of their application for payment of the estimated
compensation in which they asserted that none of the
County's objections prevented payment. The Sheehan
Defendants asserted inter alia that (1) Patricia
Sheehan's interests were now resolved; (2) the appraisal
valued each parcel separately, so the money could be easily
apportioned; and (3) whether HRH is a foreign corporation is
irrelevant as the governing statutes do not differentiate
between a local and a foreign owner.
April 10, 2013, the County and Sheehan executed an Agreement
Regarding Withdrawal of Deposit, which allowed the Sheehan
Defendants partial payment of the deposit, in the amount of
$4.86 million less unpaid property taxes (a total of $4, 538,
018.10), apportioned as follows: Parcel 33 -$1, 627, 295.03;
Parcel 34 - $2, 294, 407.11; and Parcel 49 - $616,
315.96. Further, as part of the agreement, Sheehan
agreed to indemnify the County if HRH failed to repay any
money that exceeded the jury verdict on Parcels 33 and 34.
The parties filed a stipulation on April 10, 2013 and an
amended stipulation on April 18, 2013, providing for partial
payment of the deposit to the Sheehan Defendants in the
amounts set forth in the agreement.
April 22, 2013, the Sheehan Defendants filed an opposition to
the County's motion to withdraw $1.03 million of the
estimated just compensation, generally challenging the
existence of any authority permitting the County to revise
its estimated compensation, especially after it seized the
property and the Sheehan Defendants had applied for the
release of the funds.
13, 2013, the circuit court granted the County's motion
to withdraw $1.03 million of the deposit.
August 13, 2013, the County filed a motion for partial
summary judgment on the issue of severance damages for an
area of land referred to in the Sheehan Defendants'
appraisal as "Area 51." The parties agree that
"Area 51" is not owned by the Sheehan Defendants.
Instead, it appears to be part of a lot owned by Patricia
Sheehan, Lot 127, which abuts Parcel 34, and is an area over
which Sheehan had an easement to operate a boat baseyard, to
the extent the baseyard was permitted by the County.
October 3, 2013, the circuit court filed an order granting
the County's motion for partial summary judgment, ruling
that the Sheehan Defendants were not entitled to severance
damages. The circuit court concluded inter alia that
there were no genuine issues of material fact and that the
Sheehan Defendants could not satisfy the unities test under
City & County of Honolulu v. Bonded Investment Co.,
Ltd., 54 Haw. 523, 525, 511 P.2d 163, 165 (1973)
[hereafter Bonded Inv. II]. Specifically, the court
concluded that there was no unity of title because HRH owned
Parcels 33 and 34, Sheehan owned Parcel 49, and Patricia
Sheehan owned "Area 51." Moreover, the court
concluded there was no physical unity because "Area
51" did not abut the only property owned by Sheehan,
Parcel 49. Alternatively, the circuit court also determined
that an easement is not title to land, and that the Sheehan
Defendants were estopped from claiming severance damages
because they had failed to disclose the claim in any pleading
or during discovery.
November 8, 2013, after a jury trial, the jury returned a
Special Verdict Form, finding that the total fair market
value of the three parcels on May 31, 2011, was $5.8 million,
broken down as follows: Parcel 33 (owned by HRH) - $2.03
million; Parcel 34 (owned by HRH) - $3, 016 million; and
Parcel 49 (owned by Sheehan) - $754, 000.
November 18, 2013, the County filed a motion regarding blight
of summons damages (an amount paid to a land owner as a
result of the government's delay in paying full just
compensation for the condemned property on the date of
summons). The County contended that the Sheehan Defendants
were entitled to blight of summons damages (5% per annum
interest) during two periods: (1) from May 31, 2011 (the date
of summons) until May 4, 2012 (the date the County asserted
it made its initial deposit)on the full $5.8 million jury
verdict; and (2) from April 29, 2013 (erroneously stated as
the date the court granted the County's motion to
withdraw a portion of the deposit) until the date the County
paid the Sheehan Defendants in full, on the $940, 000
difference between the $4.86 million already received by the
Sheehan Defendants and the $5.8 million jury
January 16, 2014, the circuit court granted the County's
motion regarding blight of summons damages and adopted the
County's calculation of damages. On January 24, 2014, the
Sheehan Defendants filed a motion for reconsideration of the
blight of summons order. The circuit court thereafter denied
the motion for reconsideration.
April 25, 2014, the circuit court entered the Judgment and a
Final Order of Condemnation. The Sheehan Defendants timely
Standards of Review
Withdrawal of a Portion of the Estimated Just Compensation
consider applicable Hawai'i statutes in determining
whether the circuit court was authorized to allow the County
to withdraw part of the estimated just compensation deposited
with the court.
Statutory interpretation is reviewed de novo by [an
appellate] court. "When construing a statute, our
foremost obligation is to ascertain and give effect to the
intention of the legislature, which is to be obtained
primarily from the language contained in the statute
itself." Taylor-Rice v. State, 105 Hawai'i
104, 108, 94 P.3d 695, 663 (2004) (citations omitted).
Moreover, "it is a cardinal rule of statutory
interpretation that, where the terms of a statute are plain,
unambiguous and explicit, we are not at liberty to look
beyond that language for a different meaning. Instead, our
sole duty is to give effect to the statute's plain and
obvious meaning." T-Mobile USA, Inc. v. Cty. of
Hawai'i Planning Comm'n., 106 Hawai'i 343,
352-53, 104 P.3d 930, 939-40 (2005) (citation omitted).
Bhakta v. County of Maui, 109 Hawai'i 198, 208,
124 P.3d 943, 953 (2005) (some citations and brackets
omitted). "[E]minent domain statutes are to be construed
liberally in favor of the landowner." County of
Hawai'i v. C & J Coupe Family Ltd. P'ship,
119 Hawai'i 352, 366, 198 P.3d 615, 629 (2008).
our conclusion, infra, that the circuit court had
the authority to allow the County to withdraw a part of the
deposit, we review the circuit court's exercise of that
authority for abuse of discretion. See United States v.
1, 997.66 Acres of Land, More or Less, in Polk County,
Iowa, 137 F.2d 8, 13-14 (8th Cir. 1943) .
Summary Judgment on Severance Damages
review the circuit court's grant or denial of summary
judgment de novo. The standard for granting a motion
for summary judgment is settled:
Summary judgment is appropriate if the pleadings,
depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there
is no genuine issue as to any material fact and that the
moving party is entitled to judgment as a matter of law. A
fact is material if proof of that fact would have the effect
of establishing or refuting one of the essential elements of
a cause of action or defense asserted by the parties. The
evidence must be viewed in the light most favorable to the
non-moving party. In other ...