Cmty. Associations of Hualalai, Inc. v. Leeward Planning Comm'n

150 Hawai‘i 241

500 P.3d 426

The COMMUNITY ASSOCIATIONS OF HUALALAI, INC., Appellant,

v.LEEWARD PLANNING COMMISSION, County of Hawai‘i; and Zendo Kern,¹ Planning Director, County of Hawai‘i, Appellees.

SCOT-16-0000690

Supreme Court of Hawai‘i.

DECEMBER 2, 2021

Michael J. Matsukawa, Kailua-Kona, for appellant

D. Kaena Horowitz, (Molly A. Stebbins and Angelic M. Ho on the briefs) for appellees

J. Porter DeVries, Kailua-Kona, for applicant Bolton, Inc.

RECKTENWALD, C.J., NAKAYAMA, McKENNA, AND WILSON, JJ.²

OPINION OF THE COURT BY WILSON, J.

This is a direct appeal³ from a special permit application proceeding before Appellee Leeward Planning Commission ("LPC") and Appellee Planning Director ("Planning Director") of the County of Hawai‘i (collectively, "Appellees") by Appellant The Community Associations of Hualalai ("Hualalai"), a group of Hawai‘i County community associations. See HRS §§ 205-19 (2017) and 91-14 (2017). The special permit application requested approval to use an agricultural parcel of land as an equipment base yard and security dwelling, and for stockpiling and crushing natural materials for commercial use. We find Appellees wrongfully denied Hualalai a hearing and decision on its petition to intervene as a party to contest the special permit application, and remand to the LPC for proceedings consistent with this opinion.

I. BACKGROUND

A. Bolton's Permit Application and Appellant/Hualalai's Petition to Intervene

On February 4, 2000, the Hawai‘i County Planning Commission⁴ issued Special Permit No. 1047 to Nani Kona Coffee LLC granting construction of a "coffee visitor center" and related improvements on a parcel of approximately 7.33 acres of land "located on the southeast corner of the Hawai‘i Belt Road and Hualalai Road intersection" within the state and county agricultural land use districts. Approval was granted pursuant to the Planning Commission's authority under HRS § 205-6 to issue special permits. Approval of Special Permit No. 1047 was subject to conditions: Condition No. 4 required that the "coffee visitor center and all related improvements" be established within five years from the effective date of the permit, and Condition No. 9 required the applicant to submit a drainage study to the Department of Public Works and complete all improvements required to mitigate flooding before the issuance of any building permits. Nani Kona Coffee LLC was subsequently granted two administrative time extensions to comply with Condition No. 4: one in September 2004 until February 2007, and one in 2007 until February 2010.

Some years later, in 2015 and 2016, Bolton, Inc. ("Bolton")⁵ applied for a grading permit (Permit No. 092524) and two stockpiling permits (Permit Nos. 092525 and 092529) to complete the "Kona Coffee & Tea Co. Flood Channel Project" on two parcels of land on "Hualalai R[oa]d [m]auka of Queen K[a‘ahumanu Highway]." The first parcel, identified by Tax Map Key ("TMK") number 7-5-17:31 ("Parcel 31"), is the parcel for which Special Permit No. 1047 was issued in 2000;⁶ the second parcel, identified by TMK number 7-5-17:44 ("Parcel 44"), is adjacent to and immediately east/mauka of Parcel 31. The two parcels are owned by Daniel B. Bolton and Janet T. Bolton of Bolton, Inc. Bolton's applications for grading and stockpiling on the two parcels were approved in January 2016 by the Hawai‘i County Planning Department and the Department of Public Works, with approval of the grading permit conditioned on compliance with Condition No. 9 of Special Permit No. 1047.

Approximately one month after approval of the grading and stockpiling permits, on February 19, 2016, Appellee/Planning Director⁷ sent Bolton a "Warning Letter" concerning activity on the two parcels. According to the letter, the Planning Department had received a complaint that Bolton was operating a quarry on the parcels and using the parcels as an equipment base yard without an applicable special permit. A subsequent investigation revealed that Bolton appeared to be operating a rock crusher for commercial purposes (i.e., operating a quarry) on Parcel 44, storing construction equipment on the parcels (i.e., using the properties as a construction base yard), and maintaining a junk yard on the parcels. The letter warned Bolton that those activities potentially violated the Zoning Code,⁸ and requested a response from Bolton by April 30, 2016. The letter stated that if Bolton wanted to conduct a commercial quarry operation, it could "submit an application for a special permit that would allow for the creation of a (Quarry) and would allow for the use of the properties as a construction base yard," so long as Bolton "immediately cease[d]" commercial and unauthorized activity.⁹

On March 1, 2016, Bolton submitted an application ("Special Permit Application No. SPP-16-188") to the Planning Department, requesting a special permit to use Parcel 44 for "[a] baseyard/staging yard for equipment, storage of materials, stockpiling and crushing of natural materials for commercial use" and a "[s]ecurity dwelling[.]" Bolton stated that Special Permit Application No. SPP-16-188 was intended to resolve the issues raised in the February 19 warning letter and to bring Parcel 44 into compliance with the Zoning Code.

On April 12, 2016, Bolton sent a letter to the Planning Department disputing that it had violated the Zoning Code, as suggested in the February 19 warning letter, but stating that it had filed Special Permit Application No. SPP-16-188 "[a]s a show of good faith and cooperation[.]"

On April 22, 2016, Bolton was notified that Special Permit Application No. SPP-16-188 was scheduled for a public hearing before the LPC¹⁰ on May 19, 2016.¹¹ The agenda for the LPC's May 19 meeting gave public notice that Special Permit Application No. SPP-16-188 would be considered as Agenda Item No. 4. The agenda explained how a party could seek to intervene:

Pursuant to Rule 4, Contested Case Procedure, of the County of Hawai‘i Planning Commission Rules of Practice and Procedure, any person seeking to intervene as a party to a contested case hearing on the above Agenda Items Nos. 1 through 4 is required to file a written request which must be received in the office of the Planning Department no later than seven (7) calendar days prior to the Planning Commission's first public meeting on the matter. Such written request shall be in conformity with Rule 4, in a form as provided by the Planning Department entitled "Petition for Standing in a Contested Case Hearing."

The agenda referenced County of Hawai‘i Planning Commission Rules of Practice and Procedure ("LPC Rules") Rule 4 (2017), which allows a person to request to formally intervene and be admitted as a party to the proceeding. LPC Rule 4 - 6 provides, in relevant part:

(a) In all proceedings where the Commission's action is directly appealable to Third Circuit Court, the applicant and the Planning Director will be designated parties to the action. Any other person seeking to intervene as a party shall file a written request on a form approved by the Planning Director and accompanied by a filing fee of $200 no later than seven calendar days, prior to the Commission's first meeting on the matter. If the applicant files a request with the Commission for the deferral or continuance of the hearing prior to the commencement of the hearing, the next regularly scheduled meeting of the Commission will then be considered the subsequent rescheduled hearing date. If the request for intervention is withdrawn in writing before the commencement of the hearing, the filing fee shall be refunded to the person seeking standing to intervene.

(b) Upon receipt of a written request to intervene, the Commission, at the first meeting on the matter, shall hold a hearing on the written request. The petitioner shall be admitted as a party if it can demonstrate that:

(1) His or her interest is clearly distinguishable from that of the general public; or

(2) Government agencies whose jurisdiction includes the land involved in the subject request; or

(3) That they have some property interest in the land or lawfully reside on the land; or (4) That even though they do not have an interest different than the public generally, that the proposed action will cause them actual or threatened injury in fact; or

(5) Persons who are descendants of native Hawaiians who inhabited the Hawaiian Islands prior to 1778, who practice those rights which are customarily and traditionally exercised for subsistence, cultural or religious purposes.

The Commission will grant or deny such written request prior to any further action on the matter.

(c) Appeal from Denial. Any petitioner who has been denied standing as a party may appeal such denial to the Third Circuit Court pursuant to Section 91-14, Hawai‘i Revised Statutes.

(d) After establishing the parties to the proceeding, the Commission may either proceed with the hearing, or continue the matter to a more appropriate time and date.

LPC Rule 4 - 6.

On May 9, 2016 the Planning Department issued a background report on Special Permit Application No. SPP-16-188, in which it noted that Special Permit No. 1047 had been approved for Parcel 31 in 2000, that Bolton had received an extension until 2010 to comply with Condition No. 9, and that "[a]ny additional time extensions to comply with conditions will need to be approved by the [LPC]." That same day, the Planning Department also issued a recommendation to the LPC in which the Planning Director recommended that the LPC approve Bolton's Special Permit Application No. SPP-16-188, with the caveat that "[s]ince this recommendation is made without the benefit of public testimony, the Director reserves the right to modify and/or alter this position based upon additional information presented at the public hearing."¹²

On May 12, 2016, a week before the LPC's scheduled public meeting on Special Permit Application No. SPP-16-188, Appellant/Hualalai submitted a "Petition for Standing in a Contested...