Dairy Rd. Partners v. Maui Planning Comm'n

150 Hawai‘i 364

501 P.3d 333 (Table)

DAIRY ROAD PARTNERS, a Hawai‘i Limited Partnership, Appellant-Appellant,

v.The MAUI PLANNING COMMISSION, an Agency of the County of Maui, a Political Subdivision of the State of Hawai‘i, A & B Properties, Inc., a Hawai‘i Corporation, Appellees-Appellees

NO. CAAP-16-0000838

Intermediate Court of Appeals of Hawai‘i.

December 28, 2021

On the briefs:

Frederick W. Rohlfing III, (Case Lombardi & Pettit), for Appellant-Appellant.

Calvert G. Chipchase, (Cades Schutte), for Appellee-Appellee A & B Properties, Inc.

Kristin K. Tarnstrom, Deputy Corporation Counsel, County of Maui, for Appellee-Appellee Maui Planning Commission.

(By: Hiraoka, Presiding Judge, Wadsworth and Nakasone, JJ.)

SUMMARY DISPOSITION ORDER

Appellant-Appellant Dairy Road Partners (DRP ) appeals from (1) the "Order Granting (1) Appellee A&B Properties, Inc.'s Motion for Summary Judgment filed August 2, 2016, and (2) Appellee Maui Planning Commission's Joinder in Appellee A&B Properties, Inc.'s Motion for Summary Judgment filed September 7, 2016" (Order Granting Summary Judgment and Joinder ); and (2) "Final Judgment" filed on October 27, 2016 (2016 Final Judgment ), both filed by the Circuit Court of the Second Circuit (Circuit Court ).¹

On appeal, DRP contends that the Circuit Court erred in granting Appellee-Appellee A&B Properties, Inc.'s (A&B ) Motion for Summary Judgment and Appellee-Appellee Maui Planning Commission's (Planning Commission ) Joinder.

Upon careful review of the record and the briefs submitted by the parties and having given due consideration to the arguments advanced and the issues raised by the parties, we dismiss this appeal for mootness.

This is the second appeal from the underlying case, for which the pertinent background is as follows. A&B applied for a Special Management Area Permit (Permit ) with the County of Maui Planning Department to construct a project (Project ) on land along Haleakala Highway in Kahului, Hawai‘i (Subject Property ). The Planning Commission scheduled a public hearing on the Permit application to be held on April 26, 2011. A Notice of Hearing (Notice ) was published and sent via certified mail pursuant to the Planning Commission rules to all owners and certain lessees within 500 feet of the Subject Property.

On April 25, 2011, DRP, a lessee, filed a Petition to Intervene (Petition ), asserting that the anticipated traffic from the Project would affect DRP's gas station business (Dairy Road Property ).

At the April 26, 2011 hearing, the Planning Commission voted to deny the Petition and to approve the Permit; and subsequently entered its July 12, 2011 Findings of Fact, Conclusions of Law, Decision, and Order Denying Dairy Road Partners' Petition to Intervene Filed on April 25, 2011 (2011 Planning Commission FOF-COL-Order ).

2011 Appeal to Circuit Court

On July 21, 2011, DRP appealed the 2011 Planning Commission FOF-COL-Order to the Circuit Court.

On September 7, 2011, A&B filed a Motion to Dismiss Appeal Filed on July 21, 2011, or In the Alternative, For Summary Judgment, arguing that DRP failed to meet its burden in establishing that it was a "person aggrieved" with an actual or threatened injury, or that such injury was traceable to the Planning Commission's conduct, which the Circuit Court granted. On September 29, 2011, the Circuit Court entered its Order Granting Appellee A&B Properties, Inc.'s Motion to Dismiss Appeal Filed on July 21, 2011, or, In the Alternative, For Summary Judgment (Order Granting A&B's Motion to Dismiss ), Filed on September 7, 2011.

2011 Appeal to Intermediate Court of Appeals

On October 31, 2011, DRP appealed the Circuit Court's Order Granting A&B's Motion to Dismiss. We concluded that DRP had sufficiently established standing based on a declaration by its general partner Glenn Nakamura (Nakamura ), stating that DRP was likely to suffer declining gasoline sales due to traffic-related issues related to the A&B development project, and thus, was a person aggrieved under Hawai‘i Revised Statutes (HRS ) § 91-14. Dairy Rd. Partners v. Maui Planning Comm'n, No. CAAP-11-0000789, 2015 WL 302643, at *4-6 (App. Jan. 23, 2015) (mem.). We explained that:

[t]here is nothing in the record to suggest why Dairy Road Partners, if it was allowed to intervene, would not or could not find relief for the injury it alleges. Indeed, intervention itself would at least "likely provide relief" by necessarily focusing the agency's attention further on the intervenor's concerns.

Dairy Rd. Partners, 2015 WL 302643, at *6. We vacated and remanded the matter back to Circuit Court.

2016 Circuit Court Proceedings on Remand

Upon remand, A&B filed a Motion for Summary Judgment on August 2, 2016, joined by the Planning Commission. A&B challenged DRP's standing, arguing that DRP lost its leasehold interest in the Dairy Road Property through a separate judicial foreclosure proceeding of the lease (Foreclosure Case ),² and thus, DRP had no interest remaining in the case. A&B submitted as an exhibit, an Order Granting Plaintiff Maui Gas Ventures LLC's Motion for Confirmation of Sale, For Distribution of Proceeds, For Issuance of Writ of Ejectment/Posession and For Deficiency Judgment as to Defendant Dairy Road Partners Filed March 29, 2016, filed June 21, 2016 (Foreclosure Order ).

In its Opposition, DRP argued that summary judgment was "procedurally improper" in an administrative appeal to the Circuit Court and that it was improper for the Circuit Court to consider the Foreclosure Order. DRP did not address the Foreclosure Case or the Foreclosure Order in its Opposition.

The Circuit Court held a hearing on the Motion for Summary Judgment on September 15, 2016. At the close of the hearing, the Circuit Court ruled that,

Diary [sic] Road Partners standing, as an agreed [sic] party due to traffic concerns, arose from its leasehold interest. That interest no longer exists. Diary [sic] Road Partners does not dispute that it lot -- lost its leasehold interest in the subject property.

Therefore, while standing may have existed previously, the Court is finding that Diary [sic] Road Partners no longer has standing to challenge SMA permit.

On October 10, 2016, the Circuit Court entered its Order Granting Summary Judgment and Joinder. On October 27, 2016, the Circuit Court entered its Final Judgment.

This timely appeal followed.

Concurrent Foreclosure Case (2CC131000283)

As mentioned supra, starting in 2013, the Subject Property was involved in foreclosure proceedings in a separate case, American Savings Bank, F.S.B. v. Dairy Rd. Partners, Civil No. 2CC131000283.³ The parties in the Foreclosure Case were plaintiff American Savings Bank, F.S.B. (American Savings ) and defendants DRP and general partner Nakamura. On January 12, 2015, Maui Gas Ventures LLC (Maui Gas Ventures ) filed a Notice and Substitution of [Maui Gas Ventures] as Real Party in Interest for [American Savings], to substitute Maui Gas Ventures for American Savings as the real party in interest. Maui Gas Ventures LLC v. Dairy Rd. Partners, No. CAAP-16-0000136, 2018 WL 2316509, at *1 (App. May 22, 2018) (mem.).⁴ Throughout the Foreclosure Case, judgments were entered in favor of Maui Gas Ventures and against DRP. At the conclusion of the Foreclosure Case, Maui Gas Ventures purchased the Subject Property. DRP appealed these judgments in a consolidated appeal that included, inter alia , a series of orders granting summary judgment, sale of the property, confirmation of sale, distribution of proceeds, writ of ejectment/possession, and a deficiency judgment.

On May 22, 2018, this court issued its Memorandum Opinion affirming the judgments entered by the Circuit Court in the Foreclosure Case. Maui Gas Ventures LLC, 2018 WL 2316509, at *4.

Current Appellate Proceedings

In its Opening Brief, DRP contends, inter alia ,⁵ that the Circuit Court erred in deciding a motion for summary judgment in an administrative appeal, and erred in holding that it did not have subject matter jurisdiction because, at the time of filing its Opening Brief, DRP had supplied a declaration that it had been at the Subject Property since 1985. DRP argues that while the Foreclosure Order states, "[U]pon closing of escrow ... the Purchaser or his written nominee shall be entitled to immediate and exclusive possession of the Mortgaged Property," there is nothing in the record to indicate that the purchaser of the Lease has immediate and exclusive possession of the Subject Property. DRP argues that, at the time of filing its OB, as the Foreclosure Order was under appeal, the "record on appeal therefore continues to support DRP's standing" as an "aggrieved person" pursuant to our Memorandum Opinion in Dairy Rd. Partners, 2015 WL 302643, at *6.

A&B argues that DRP lacks standing to appeal as a "person aggrieved" based on DRP's leasehold interest in the Dairy Road Property and the "allegedly adverse effect that the Project would have on traffic." A&B requests that this court take judicial notice of the Foreclosure Case and its then-pending appeal. A&B asserts that DRP lost its leasehold interest through the Foreclosure Case, a fact that is undisputed by DRP. A&B states, "The leasehold interest was sold, the purchaser was granted ‘immediate and exclusive possession’ of the Dairy Road Property and DRP's interest in the Property was ‘forever barred and foreclosed.’ " A&B argues that even if the Foreclosure Case has been appealed, the appeal makes no difference because DRP did not obtain a stay of enforcement of the Foreclosure Order and Judgment pending appeal in this case.

In light of the reference to the Foreclosure Order and Foreclosure Case in both parties' briefs, on September 7, 2021, we issued an Order to Show Cause (OSC ) to provide the parties an opportunity to explain why, given DRP losing its leasehold interest in the Subject Property, this appeal should not be dismissed for mootness and lack of subject matter jurisdiction.

Mootness

"It is axiomatic that mootness is an issue of...