County Of Haw.‘i v. Homeowners

123 Hawai'i 391

235 P.3d 1103

COUNTY OF HAWAI‘I, a municipal corporation of the State of Hawai‘i, Respondent-/Plaintiff-/Counterclaim Defendant-Appellee/Cross-Appellee,

v.ALA LOOP HOMEOWNERS, an unincorporated association, Respondent-/Defendant-/ Counter-Claimant-/Cross-Claimant-Appellee/ Cross-Appellant,andWai‘ola Waters of Life Charter School, a public school organized under the law of the State of Hawai‘i, Respondent-/Defendant-/Cross-Claim Defendant-Appellant/Cross-Appellee;

and

ALA Loop Community Association, an unincorporated non-profit association, Petitioner-/Defendant-/Counter-Claimant-/Cross-Claimant-/Third-Party Plaintiff-Appellee/Cross-Appellant;

v.Land Use Commission, State of Hawai‘i, Respondent-/Third-Party Defendant-Appellee/Cross-Appellee.

No. 27707.

Supreme Court of Hawai‘i.

July 9, 2010.

COPYRIGHT MATERIAL OMITTED

Thomas Yeh (Tsukazaki Yeh & Moore) for Petitioner Ala Loop Community Association.

Charlene M. Aina, Deputy Attorney General, for Respondent Wai‘ola Waters of Life Charter School.

MOON, C.J., NAKAYAMA, DUFFY, and RECKTENWALD, JJ.; with ACOBA, J., concurring separately and dissenting.

Opinion of the Court by RECKTENWALD, J.

Respondent Wai‘ola Waters of Life Charter School (Wai‘ola) ¹ acquired land in an agricultural use district on Ala Loop Road on the Island of Hawai‘i in 2003, with the intention of using it as a working farm and as a campus for its school. A dispute arose between Wai‘ola and neighboring residents regarding whether Wai‘ola should be required to obtain a special use permit under Hawai‘i Revised Statutes (HRS) chapter 205. The County of Hawai‘i filed a complaint in the Circuit Court of the Third Circuit (circuit court) seeking declaratory relief with regard to that issue, naming Wai‘ola and Petitioner Ala Loop Community Association (Ala Loop) ² as defendants. Ala Loop filed a cross-claim against Wai‘ola, seeking to enforce the provisions of chapter 205.

The circuit court subsequently entered default against Wai‘ola on Ala Loop's cross-claim, but denied Ala Loop's request for an award of attorney's fees. ³ Both parties then appealed from the circuit court's First Amended Final Judgment.

The Intermediate Court of Appeals (ICA) filed a summary disposition order (SDO) on March 12, 2009. The ICA, citing Pono v. Molokai Ranch, Ltd., 119 Hawai‘i 164, 194 P.3d 1126 (App.2008) cert. rejected, 2008 WL 5392320 (Haw. Dec.29, 2008), concluded that Ala Loop did not have a private right of action to enforce its HRS chapter 205 claims against Wai‘ola, and, therefore, the circuit court lacked jurisdiction to determine the claims. The ICA entered judgment pursuant to the SDO on April 22, 2009.

Ala Loop filed an application for writ of certiorari (application), requesting this court to review the ICA's judgment. In its application, Ala Loop argues, inter alia, that Pono was wrongly decided because it failed to consider article XI, section 9 of the Hawai‘i State Constitution⁴ and HRS § 607-25 (Supp.2002).⁵

On August 5, 2009, Wai‘ola filed a response in opposition (response) to the application, in which it contended that this court should reject the application on mootness grounds.

For the reasons set forth below, we conclude that this dispute is not moot, and that in any event review is appropriate under the public interest exception to the mootness doctrine. We further conclude that article XI, section 9 of the Hawai‘i Constitution creates a private right of action to enforce chapter 205 in the circumstances of this case, and that the ICA accordingly erred in its analysis in the SDO. Finally, we conclude that the circuit court erred in declining to set aside the entry of default against Wai‘ola.

Accordingly, we vacate the April 22, 2009 judgment of the ICA and the December 12, 2005 First Amended Final Judgment of the circuit court, and remand to the circuit court for further proceedings. In view of this disposition, we do not address the other issues raised by Ala Loop in its application, or by Ala Loop and Wai‘ola in their appeals to the ICA.

I. BACKGROUND

A. Dispute over whether Wai‘ola must obtain a special use permit

Wai‘ola is a new century charter school, chartered pursuant to HRS chapter 302A (Supp.1999). In July of 2003, Wai‘ola acquired ownership of a 28 acre parcel of land formerly known as the Sunshine Farm property, located in a district designated for agricultural use by the Land Use Commission (LUC) of the State of Hawai‘i. Wai‘ola intended to maintain the property as a working farm and to use it as a campus for its school.

When residents in the area learned of the acquisition, they began contacting various county officials to express concern. On July 21, 2003, Ala Loop received a letter from the County of Hawai‘i Planning Department stating that:

We have received your letter dated July 11, 2003 regarding the Waters of Life Charter School in escrow to purchase the old Sunshine Farm property on Ala Loop.

The Planning Department has received numerous inquiries regarding the operation of charter schools within the State Land Use Agricultural District in regards to H.R.S. § 302A-1184,⁶ which exempts charter schools from state laws, except those relating to health and safety, and a few other exceptions. Based on this law and a legal opinion received from the County Corporation Counsel, we are exempting charter schools from state land use laws not expressly related to health and safety.

The major effect of this exemption is that charter schools located in the State Land Use Agricultural District do not have to obtain special permits. Normally, a school in the agricultural district would need a special permit with a process that requires notice to nearby landowners and a public hearing.

Charter school facilities may need other approvals and permits, including those related to building, fire, and sanitation.

The law exempting the charter schools is open to interpretation and the courts have the final say. You, as homeowners concerned about the traffic impacts this operation may have on your community, have the right to take this matter to court to have a judge decide if this charter school needs a special permit.

On August 14, 2003, Ala Loop through counsel wrote to the County of Hawai‘i Office of the Corporation Counsel (Corp. Counsel), inquiring “whether the proposed operation of Waters of Life Charter School upon land zoned for agriculture and accessed through Ala Loop Road in the absence of a state or county land use regulatory process was proper.” The letter also stated that Wai‘ola purchased the property for the purpose of operating a charter school, and included background on the property as well as the reasons for Ala Loop's opposition to the operation of the charter school. Ala Loop requested that Corp. Counsel review HRS § 302A-1184 (Supp.2002) which exempts new century charter schools from all applicable state laws except, inter alia, “health and safety requirements.”

The letter explained Ala Loop's disagreement with the County's interpretation of HRS § 302A-1184 as follows:

As we understand, the County of Hawaii has previously interpreted certain statutes, particularly HRS Section 302A-1184, as exempting charter schools from applicable State land use district law to the effect that charter schools have been deemed exempt from obtaining special permits for the operation of charter schools on lands within the State agricultural district. Based upon our review of Section 302A-1184 and other applicable law, we find that:

1. There is no exemption from land use regulatory law that has been established for the purpose of protecting the public health and safety, and

2. There is no express exemption from or preemption of county land use laws and regulations.

We therefore believe that the County's interpretation is contrary to the plain language and intent of Section 302A-1184 and that the failure to require the Waters of Life school to undergo the scrutiny of a special permit or other land use approval process will severely compromise the health, safety and welfare of the residents of the Ala Loop community, students and others who work at or visit the proposed school, and the public at large. For this reason, we ask that you review the current interpretation that the County has apparently adopted in light of the [above] information and to provide us with your position on the issue.

In summary, Ala Loop argued that

a special permit was required for the charter school, pursuant to HRS § 205-6 (2001), county zoning laws, and Land Use Commission (LUC) rules, because the special permit requirements specifically involve a review of health and safety issues before an otherwise impermissible use can be established on land within the state agricultural district. [Ala Loop's] attorneys concluded that Wai‘ola was not exempt from compliance with State land use laws and county zoning laws, and that a use permit was required under county zoning laws in the absence of a special use permit.

In a letter to the Hawai‘i County Council dated October 9, 2003, Corp. Counsel opined that HRS § 302A-1184 exempts new century charter schools from obtaining a special permit under HRS § 205-6,⁷ but that such schools are required to obtain a county use permit under Chapter 25 of the Hawai‘i County Code 1983 (1995 ed.).

In a letter dated October 22, 2003, the Attorney General (AG) of the State of Hawai‘i advised Corp. Counsel that

Although the Office of the Attorney General has not issued a formal opinion concerning [whether charter schools are exempt from the special permit requirement set forth in HRS chapter 205], our position is that new century charter schools are required to adhere to special permit requirements prescribed in H.R.S. chapter 205.

....

Based upon legislative intent and statutory language, our interpretation of H.R.S. § 302A-1184 is that new century charter schools are exempted from state laws that relate to the regulation of education. However new century charter schools are subject to laws

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