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Kalaeloa Ventures, LLC v. City and County of Honolulu

Supreme Court of Hawaii

July 27, 2018

KALAELOA VENTURES, LLC, Appellant-Appellant,
v.
CITY AND COUNTY OF HONOLULU, Appellee-Appellee.

          APPEALS FROM THE TAX APPEAL COURT (CAAP-17-0000482, CAAP-17-0000483, CAAP-17-0000484, CAAP-17-0000485, CAAP-17-0000486, CAAP-17-0000487, CAAP-17-0000488, CAAP-17-0000489, CAAP-17-0000490, CAAP-17-0000491, CAAP-17-0000492, CAAP-17-0000493, CAAP-17-0000494, and CAAP-17-0000495) (TX NOS. 17-1-0203, 17-1-0204, 17-1-0205, 17-1-0206, 17-1-0207, 17-1-0208, 17-1-0209, 17-1-0210, 17-1-0211, 17-1-0212, 17-1-0214, 17-1-0215, 17-1-0216, and 17-1-0217)

          RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON, JJ.

          OPINION

          POLLACK, J.

         I. INTRODUCTION

         This case arises from the Tax Appeal Court of the State of Hawaii's dismissal of fourteen appeals of real property tax assessments as untimely filed. The notices of appeal were filed on Tuesday, January 17, 2017--the next business day following the January 15 deadline set by a county real property tax ordinance. The tax court dismissed the appeals, reasoning that the county ordinance superseded the "weekend rule" established by Hawai'i state law, which typically extends legal deadlines that would otherwise fall on a weekend or holiday to the following business day. Although the January 15, 2017 appeal deadline fell on a Sunday and was immediately followed by a State holiday, the tax court found that strict adherence to the deadline was required. We conclude that the tax court erred in determining that the timeliness of the appeal was determined by county ordinance and not state law.

         II. FACTS AND PROCEDURAL HISTORY

         In 2015, the City Council of the City and County of Honolulu (the City) passed Bill 39 FD1 to amend Revised Ordinance of Honolulu (ROH) § 8-1.16 (1990) to add an exception to the provision's general rule extending legal deadlines falling on weekends and holidays to the following business day. The addition provided that "[notwithstanding the foregoing, the due date for any appeal shall comply with the jurisdictional requirements set forth in the law establishing the right to appeal." (Emphasis added.)

         On December 19, 2016, Kalaeloa Ventures, LLC (KV) received notices of real property tax assessments (Assessment Notices) from the City for fourteen parcels. Page 2 of each notice stated under "Important Dates to Remember" that the deadline for filing appeals was "January 15 (on or before)." The Assessment Notices further provided that the assessments could be appealed to the City's board of review or the Tax Appeal Court of the State of Hawai'i (tax court). Appeals to the board of review, it noted, could be filed online, and the "[d]eadline to file is on or before January 15, 2017. Any appeals submitted after January 15, 2017 will be subject to dismissal." (Emphasis omitted.) Regarding appeals to the tax court, the Assessment Notices provided as follows: "Appeals to the Tax Appeal Court are filed at 777 Punchbowl Street, 1st Floor, Honolulu, Hawaii, 96813, on or before January 15 preceding the tax year."

         January 15, 2017, was a Sunday, and January 16, 2017, was Martin Luther King Jr. Day, a state holiday. The tax court clerk's office was closed on both dates. On January 17, 2017, KV filed a notice of appeal to the tax court for each of the fourteen parcels (collectively, Notices of Appeal) challenging the City's Assessment Notices.[1]

         A. City's Motions to Dismiss, or in the Alternative, Motions for Summary Judgment

         The City filed a "Motion to Dismiss, or in the Alternative, Motion for Summary Judgment" for each of KVs Notices of Appeal (collectively, the City's Motion). The City requested that the tax court dismiss KVs Notices of Appeal with prejudice pursuant to Rule 12(b)(1) of the Hawai'i Rules of Civil Procedure (HRCP), or, alternatively, grant summary judgment pursuant to HRCP Rule 56 for lack of subject matter jurisdiction.

         The City argued that KV did not timely file the Notices of Appeal on or before January 15, 2017, as required by ROH § 8-12.1(a)[2] and Hawaii Revised Statutes (HRS) § 232-16.[3] Anticipating KVs counterarguments, the City contended that HRS § 1-32, [4] one of the statutory "weekend rules" allowing acts that are legally required to be performed on a particular date to be done the next business day when the specified day is a Sunday or a holiday, does not apply to filing real property tax assessment appeals. The 2015 amendment of ROH § 8-1.16 excluded these appeals from the weekend rule's operation, the City argued. The amended ordinance made the deadline for perfecting appeals mandatory, the City asserted, and it thus could not be extended by the weekend rule.

         In addition, the City submitted that, where a conflict between specific and general statutes cannot be resolved in pari materia, the county ordinances dealing specifically with the deadline for real property tax assessment appeals--ROH §§ 8-12.1(a) and 8-1.16--must prevail over the general weekend rule.

         The City also asserted that article VIII, section 3 of the Hawai'i Constitution[5] broadly grants counties the exclusive authority over functions, powers, and duties relating to the taxation of real property, including the authority to set filing deadlines and any procedures relating to the filing of real property tax assessment appeals, so long as those deadlines and procedures do not violate the state or federal constitution. The City concluded that KV s Notices of Appeal were untimely executed, filed, and served, and therefore the tax court lacked subject matter jurisdiction to hear the appeals.

         KV opposed the City's Motion, contending that the date for filing the Notices of Appeal extended to January 17, 2017, because HRS § 1-29, [6] the weekend rule that sets forth the method for computing deadlines, excludes Sundays and holidays from the computation of time. Under this court's precedent, KV argued, the City's constitutional authority has not been interpreted to broadly extend to setting filing deadlines and any procedures related to real property tax assessment appeals. KV also asserted that the tax court's subject matter jurisdiction derived from HRS § 232-11.[7] Based on precedent, the City did not have authority to expand or limit the jurisdiction of the tax court beyond that provided by state statute, KV contended.

         KV alternately argued that, because statutes related to the same subject matter must be construed together, statutes establishing filing deadlines must be read in conjunction with HRS § 1-29. KV added that statutory deadlines must be interpreted in a manner that achieves the intent of the legislature to provide a meaningful opportunity to appeal.

         In reply, the City rejected KV s argument that ROH § 8-1.16 may be interpreted as allowing application of the weekend rule, contending that the ordinance provides specificity in regard to the appeal filing deadline. The City submitted that, because HRS § 1-32 conflicts with ROH § 8-1.16, the former does not apply here.

         B. Tax Court Hearing and Order

         On May 1, 2017, the City's Motion came on for hearing before the tax court.[8] The tax court consolidated the Notices of Appeal for purposes of the hearing and granted the City's request for the matter to be considered only as a motion to dismiss and not as a motion for summary judgment. The tax court stated that the dispositive issue in the case was whether the City had the constitutional authority to negate the weekend rule by ordinance as it relates to real property tax assessment appeals. Construing ROH § 8-12.1 together with ROH § 8-1.16, the tax court noted that the City was "emphatic" that all appeals must be filed on or before "and not after January 15."

         The tax court likened the case to State ex rel. Anzai v. City and County of Honolulu, 99 Hawai'i 508, 57 P.3d 433 (2002), which it interpreted "as providing or recognizing the superiority of the counties' interest in real property tax." Accordingly, the tax court explained that it "recognizes the constitutional principle of the superior power of the City to address matters of real property tax," noting that the counties do not have uniform appeals deadlines, "so there appears to be at least some variation in terms of a county or the City's interest in setting their real property tax deadlines."

         The tax court concluded that ROH § 8-1.16 negated the statewide weekend rule as it applied to tax appeals because the Hawai'i Constitution grants exclusive authority to the counties over real property tax assessments. Therefore, the tax court held that KV s Notices of Appeal were untimely and that the court lacked subject matter jurisdiction over the cases. On May 30, 2017, the tax court entered orders granting the City's Motion as to each of KV s Notices of Appeal and dismissed the appeals with prejudice for lack of subject matter jurisdiction.

         KV timely filed a notice of appeal from the tax court's order granting the City's motion to dismiss, and the case was subsequently transferred to this court.

         III. STANDARDS OF REVIEW

         The interpretation of municipal ordinances "is a question of law reviewable de novo." Weinberg v. City & Cty. of Honolulu, 82 Hawai'i 317, 322, 922 P.2d 371, 376 (1996) (citation omitted).

         This court "answer[s] questions of constitutional law by exercising our own independent judgment based on the facts of the case." State v. Aplaca, 96 Hawai'i 17, 22, 25 P.3d 792, 797 (2001) (quoting State v. Jenkins, 93 Hawai'i 87, 100, 997 P.2d 13, 26 (2000)). Thus, "questions of constitutional law are reviewed on appeal 'under the "right/wrong" standard.'" Id. (quoting Jenkins, 93 Hawai'i at 100, 997 P.2d at 26).

         IV. DISCUSSION

         KV s first two points of error on appeal contend that the tax court erred in concluding that the City had constitutional authority to negate the statutory weekend rule by ordinance as it applies to real property tax assessment appeals, thereby rendering the Notices of Appeal untimely filed.[9] The City responds that ROH § 8-1.16 does not restrict the jurisdiction of the tax court granted by HRS § 232-11 because ROH § 8-1.16 simply establishes that the weekend rule applies to only certain filings that do not include appeals. Nonetheless, the City argues, even if ROH § 8-1.16 does negate HRS §§ 1-29 and 1-32, the City has the authority to restrict the subject matter jurisdiction of the tax court as it relates to real property tax assessment appeals because the Hawai'i Constitution broadly confers all functions, powers, and duties related to real property tax assessment upon the counties. It is thus within the City's constitutional authority, the City argues, to negate HRS §§ 1-29 and 1-32 by ordinance insofar as the statutes apply to real property tax assessment appeals.[10]

         As stated, the City amended ROH § 8-1.16 in 2015 to read as follows:

When the due date for any notice, application, document or remittance required by this chapter falls on a Saturday, Sunday or legal holiday, the notice, application, document or remittance shall not be due until the next succeeding day which is not a Saturday, Sunday or legal holiday. Notwithstanding the foregoing, the due date for any appeal shall comply with the jurisdictional requirements set forth in the law establishing the right to appeal.

         ROH § 8-1.16 (2015) (pertinent amendment underlined).

         This court has held that "the right to appeal a tax assessment is purely statutory." Univ. of Haw, v. City & Cty. of Honolulu, 102 Hawai'i 440, 444, 77 P.3d 478, 482 (2003). HRS § 232-16(a) (2017) [11] establishes the right to appeal to the tax court, specifically providing that "[a] taxpayer . . . may appeal directly to the tax appeal court."[12] Indeed, the ROH expressly recognize HRS § 232-16 as a statute governing appeals to the tax court by stating, "An appeal to the tax appeal court may be filed by a taxpayer or the director as provided in HRS Sections 232-8 through 232-14 and Sections 232-16 through 232-18." ROH § 12.8 (a) (1983) .

         HRS § 232-16 also sets forth requirements for when and how appeals to the tax court will be taken, including the required contents of a notice of appeal, the cost for filing an appeal, [13] and the appropriate timeframe within which an appeal may commence. "An appeal to the tax appeal court is properly commenced by filing, on or before the date fixed by law for the taking of the appeal[.]" HRS § 232-16 (a). HRS § 232-16(d) (2017) states that an appeal "shall be deemed to have been taken in time if . . . the notice shall have been deposited in the mail . . . on or before the date fixed by law for the taking of the appeal."

         Pursuant to HRS § 232-16, the counties have by ordinance set the date to take an appeal from a real property tax assessment.[14] The City provided for such a date in ROH § 8-12.1, which provides in pertinent part as follows:

Any taxpayer or owner who may deem himself or herself aggrieved by an assessment made by the director or by the director's refusal to allow any exemption, may appeal from the assessment or from such refusal to the board of review or the tax appeal court pursuant to HRS Section 232-16 on or before January 15th preceding the tax year, as provided in this article.

         ROH § 8-12.1(a) (1997) (emphasis added). Therefore, HRS § 232-16's "date fixed by law" as it relates to appeals of City real property tax assessments is "on or before January 15th preceding the tax ...


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