Leone v. Cnty. of Maui

128 Hawai'i 183

284 P.3d 956

Douglas LEONE and Patricia A. Perkins–Leone, as Trustees under that certain unrecorded Leone–Perkins Family Trust dated August 26, 1999, as amended, Plaintiffs–Appellants

v.COUNTY OF MAUI, a political subdivision of the State of Hawai‘i, William Spence, in his capacity as Director of the Department of Planning of the County of Maui, DOE Entities 1–50, Defendants–Appellees (Civil No. 07–1–0496(3)).andWilliam L. Larson and Nancy H. Larson, as Trustees under that certain unrecorded Larson Family Trust dated October 30, 1992, as amended, Plaintiffs–Appellants

v.County of Maui, a political subdivision of the State of Hawai‘i, William Spence, in his capacity as Director of the Department of Planning of the County of Maui, Doe Entities 1–50, Defendants–Appellees (Civil No. 09–1–0413(2)).

No. 29696.^*

Intermediate Court of Appeals of Hawai‘i.

June 22, 2012.

Andrew V. Beaman (Chun, Kerr, Dodd, Beaman & Wong), (Leroy E. Colombe and Bethany C.K. Ace ), with him on the briefs, for Plaintiffs–Appellants.

Mary Blaine Johnston, Deputy Corporation Counsel (Brian T. Moto, Corporation Counsel, and Madelyn D'Enbeau, Deputy Corporation Counsel), with her on the briefs, for Defendants–Appellees.

NAKAMURA, Chief Judge, FOLEY and LEONARD, JJ.

Opinion of the court by LEONARD, J.

In this consolidated appeal, Plaintiffs–Appellants Douglas Leone and Patricia A. Perkins–Leone (Leones), as Trustees under that certain unrecorded Leone–Perkins Family Trust dated August 26, 1999, as amended, appeal from the Circuit Court of the Second Circuit's (Circuit Court) June 5, 2009 Amended Final Judgment dismissing their inverse condemnation, equal protection, due process, and 42 U.S.C. § 1983 claims.¹ Plaintiffs–Appellants William L. Larson and Nancy H. Larson (Larsons), as Trustees under that certain unrecorded Larson Family Trust dated October 30, 1992, as amended, appeal from the Circuit Court's October 15, 2009 Final Judgment dismissing their inverse condemnation, equal protection, due process, and 42 U.S.C. § 1983 claims, which are, in relevant part, identical to the Leones' claims.²

The Leones and Larsons (collectively, Appellants) argue that the Circuit Court erred in dismissing their claims for lack of subject matter jurisdiction on ripeness grounds. They also request that this court grant partial summary judgment against Defendants–Appellees County of Maui (Maui County) and Director of the Department of Planning of the County of Maui, William Spence (Director),³ on their claims of inverse condemnation. For the reasons discussed below, we conclude that the Circuit Court erred in dismissing Appellants' inverse condemnation claims as unripe. However, we decline to grant Appellants' request for partial summary judgment. Accordingly, we vacate the judgments and remand for further proceedings.

I. BACKGROUND

This appeal arises from Maui County's troubled attempts to create a public park at Palauea Beach in Makena, Maui. The 1998 Kihei–Makena Community Plan (Community Plan) assigned the beach lots a "park" land use designation, which does not permit the construction of single-family residences. In 1996, the Maui County Council (County Council) adopted Resolution No. 96–121, authorizing the Mayor to acquire the Palauea Beach lots for the creation of a public park. At that time, Palauea Beach was "one of the last undeveloped leeward beaches on Maui," and the County Council noted "an outpouring of community support" for the creation of a beach park.

In 1999, the County Council adopted Resolution No. 99–183, affirming its "official policy" to "preserve Palauea Beach in South Maui." Despite the Mayor's "appropriately raised concerns about the County's present financial constraints," the County Council urged the administration to acquire two of the Palauea Beach lots. Maui County purchased the two lots in January of 2000. However, it was unable to allocate sufficient funds to purchase the remaining seven lots, which were then sold to private individuals.

The Leones purchased Palauea Beach parcel 15 in February of 2000. The Larsons purchased Palauea Beach parcels 16 and 17 in December of 2000. Their properties are zoned "Hotel–Multifamily," permitting a variety of economically beneficial uses, including single-family residences. However, these parcels are among nine Palauea Beach lots that are designated "park" in the Community Plan.

The Palauea Beach lots are also located in a "special management area" (SMA) under the Hawai‘i Coastal Zone Management Act (CZMA). See Hawai‘i Revised Statutes (HRS) § 205A–22 (2001). The CZMA was enacted, pursuant to the federal Coastal Zone Management Act, to protect valuable shoreline and coastal resources by establishing heightened land use controls on developments within protected zones, or special management areas. HRS § 205A–21 (2001). The Legislature delegated responsibility for administering the SMA provisions to the county planning commissions or councils. HRS § 205A–22.

The CZMA imposes stringent permit requirements for "developments" within special management areas. HRS §§ 205A–28, 205A–26 (2001). The term "development" expressly excludes, inter alia, single-family residences, unless the relevant county authority finds the proposed construction may have a "cumulative impact, or a significant environmental or ecological effect on a special management area[.]" HRS § 205A–22 (2001 & Supp.2011). Three types of SMA permits are available, depending on the nature of the proposed development: minor use permits, major use permits, and emergency use permits. Id. The CZMA empowers the county authorities to adopt rules implementing procedures for issuing SMA permits. HRS § 205A–29(a) (2001).

In its rules implementing the CZMA, Maui County offers an assessment procedure allowing, inter alia, landowners to seek a determination that their proposed use is not a "development" under HRS § 205A–22. See Maui Department of Planning Special Management Area Rules for the Maui Planning Commission Rule (SMA Rule) 12–202–12 (2004). Upon review of an assessment application, the Director must make a determination that the proposed use either:

(1) Is exempt from the requirements of this chapter because it is not a development pursuant to section 205A–22, HRS, as amended;

(2) Requires a special management area minor permit pursuant to section 205A–22, HRS, as amended, which shall be processed in accordance with section 12–202–14;

(3) Requires a special management area use permit pursuant to section 205A–22, HRS, as amended, which shall be processed in accordance with sections 12–202–13 and 12–202–15;

(4) Requires a special management area emergency permit pursuant to section 205A–22, HRS, as amended, which shall be processed in accordance with section 12–202–16; or

(5) Cannot be processed because the proposed action is not consistent with the county general plan, community plan, and zoning, unless a general plan, community plan, or zoning application for an appropriate amendment is processed concurrently with the SMA permit application.

SMA Rule 12–202–12(f) (emphasis added).

Appellants and other Palauea Beach lot owners sought to construct single-family residences on their respective properties. The Director, inter alia, initiated a process for changing the Community Plan designation from "park" to "residential." Property owners, including Appellants, funded the requisite environmental assessment because Maui County was unable to do so. However, the Planning Commission refused to accept the environmental assessment and instead requested additional archaeological studies and historical narratives. Several commissioners advocated for prolonging the amendment process as a deliberate strategy to preserve the status quo—a de facto beach park on the privately-owned lots. As one commissioner explained:

So if we decide on no action on this thing then the whole beach would remain as it is now and they would not be able to build on the land that they own. Granted, we can't buy it but if we say no you can't develop it then we then have access to it, at least the beach.

This strategy would "allow the people of Maui to utilize [the] beach area" while preventing property owners from constructing homes. Another commissioner acknowledged that moving forward with the process would result in a loss of the "de facto parking that people are enjoying now" on the private lots and could force Maui County to use its own parcels for parking. At least one commissioner expressly sought to preserve the public's illegal camping, which had resulted in littering, defecating, and parking on the private beach lots, bemoaning the landowners' resort to hiring security guards to remove the trespassers.

Appellants nevertheless filed assessment applications under SMA Rule 12–202–12, seeking a determination that their proposed use is exempt from the SMA permit requirements. The Director rejected Appellants' applications because, inter alia, the proposed use was inconsistent with the properties' "park" designation in the Community Plan.⁴

Appellants then filed inverse condemnation claims under article I, § 20 of the Hawai‘i Constitution and the Fifth and Fourteenth Amendments to the United States Constitution, alleging that Maui County had engaged in regulatory takings by depriving their properties of any economically viable use.

They also asserted equal protection and substantive due process violations and, pursuant to 42 U.S.C. § 1983, sought compensatory damages, attorneys' fees, and punitive damages. In both cases, the Maui County filed motions to dismiss or, in the alternative, for summary judgment. The County's argument in both cases was that Appellants' claims were not ripe because they failed to exhaust available administrative remedies.

The Circuit Court dismissed all claims in both cases for lack of subject matter jurisdiction on ripeness grounds. It concluded that the claims were unripe for adjudication because Appellants failed to exhaust administrative...