Kendrick v. Planning Department of the County of Kaua'i. ( 2024 )

FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
25-OCT-2024
07:56 AM
Dkt. 54 OP
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAIʻI
---o0o---
ELIZABETH KENDRICK and JOE CHAULKLIN,
Petitioners-Appellants-Appellees, v.
PLANNING DEPARTMENT OF THE COUNTY OF KAUAʻI/
PLANNING COMMISSION OF THE COUNTY OF KAUAʻI; DONNA APISA,
in her official capacity as Chairperson of the Planning
Commission, 1 Respondents-Appellees-Appellants.
NO. CAAP-XX-XXXXXXX
APPEAL FROM THE CIRCUIT COURT OF THE FIFTH CIRCUIT
(CIVIL NO. 5CC181000190)
OCTOBER 25, 2024
HIRAOKA, PRESIDING JUDGE, NAKASONE AND MCCULLEN, JJ.
OPINION OF THE COURT BY MCCULLEN, J.
Respondents-Appellees-Appellants County of Kauaʻi, its
Planning Department and Planning Commission, and Donna Apisa, in
her official capacity as Chair of the Planning Commission,
1 Donna Apisa, the current chair of the Kauaʻi County Planning
Commission, is substituted for former chairs Sean Mahoney and Glenda Nogami-
Streufert under Hawaiʻi Rules of Appellate Procedure (HRAP) Rule 43(c)(1).
FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
(collectively, the County) appeal from the Circuit Court of the
Fifth Circuit's 2 (1) July 28, 2020 "Findings of Fact and
Conclusions of Law, Decision and Order," and (2) August 24, 2020
Final Judgment in favor of Petitioners-Appellants-Appellees
Elizabeth Kendrick and Joe Chaulklin.
The County contends that the circuit court erred in
reversing the Planning Commission's November 20, 2018 Findings
of Fact, Conclusions of Law, Decision and Order (Planning
Commission's Decision), which denied as untimely Kendrick and
Chaulklin's application to renew their nonconforming use
certificate for a transient vacation rental (or TVR). 3
We hold that the circuit court erred in reversing the
Planning Commission's Decision.
I. BACKGROUND
Prior to 2008, the Kaua‘i County Code (KCC) allowed
single-family residences to be used as transient vacation
rentals.
2 The Honorable Kathleen N.A. Watanabe presided.
3 "'Transient vacation rental' means a dwelling unit which is provided
to transient occupants for compensation or fees, including club fees, or as
part of interval ownership involving persons unrelated by blood, with a
duration of occupancy of one hundred eighty (180) days or less." Kauaʻi
County Code (KCC) § 8-1.5 (2008).
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A. 2008 - Ordinance No. 864
In 2008, the County adopted Ordinance No. 864,
prohibiting transient vacation rentals outside of the Visitor
Destination Area. 4 KCC Title IV, Chapter 8, Article 17.
The County Council found there was "a compelling need
to regulate single-family transient vacation rentals on Kaua‘i"
as they "are occurring at a greater rate and inflicting a larger
impact on the community of Kaua‘i than was ever anticipated[.]"
Ord. No. 864, § 1 (2008). "Since 2000, out of the 2,050 new
residential units, 1,070 have been built for the seasonal homes
market and less than half have been for local families to rent
(46) or own (936)." Id. "This also means that the limited
available infrastructure and resources on Kaua‘i, including
roads, water, sewer capacity, building materials, and contractor
time are being used primarily for expensive second or third
homes rather than the primary home needs of local residents."
Id.
The County Council's goal was "to promote a high
quality of life for all people on this island, to preserve the
residential character of neighborhoods, to encourage the
4 "'Visitor Destination Area or VDA' are those areas designated as
Visitor Destination Areas on County of Kauaʻi zoning maps." Ord. No. 864, § 2
(2008); see also Campos v. Plan. Comm'n, 153 Hawai‘i 386, 390 n.5, 539 P.3d
170, 174 n.5 (App. 2023) ("Ordinance No. 864 defined Visitor Destination Area
as 'those areas designated as Visitor Destination Areas on County of Kaua‘i
zoning maps.'").
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diversity of incomes and backgrounds that has made Kaua‘i a
special place of aloha, and to promote health and safety and the
general welfare[.]" Id.Although Ordinance No. 864 prohibited transient
vacation rentals outside of the Visitor Destination Area, it
established a procedure for owners of a lawful transient
vacation rental operating outside the Visitor Destination Area
to obtain a nonconforming use certificate to continue operating
their property as a transient vacation rental. KCC § 8-17.10(b)
(2008).
An owner who obtained a nonconforming use certificate
was required to "apply to renew the nonconforming use
certificate by July 31 for every year" with proof that certain
conditions were met. KCC § 8-17.10(g) (2008). "Failure to meet
these conditions [would] result in the denial of the application
for renewal of the nonconforming use certificates." KCC § 8-
17.10(g)(2).
Kendrick and Chaulklin own real Property in Anahola,
Kaua‘i, and obtained a nonconforming use certificate, TVNCU
#4308. 5
5 However, the 2015, 2016, and 2017 renewal applications identified
"Ginger Beach House, LLC" as the owner of the Property.
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B. 2010 to 2014 - Amendments to KCC
In 2010, Ordinance No. 904 amended KCC § 8-17.10 by
changing the July 31 due date for renewals to "annually on the
date of issuance of the non-conforming use certificate." KCC
§ 8-17.10(h) (2010). This ordinance also made denial automatic
stating, "[f]ailure to meet this condition [would] result in the
automatic denial of the application for renewal of the
nonconforming use certificates." Id.
In 2013, Ordinance No. 950 added that each application
to renew with proof of the excise tax and transient
accommodation licenses "shall be received by the Department
prior to the expiration date of a held non-conforming use
certificate." KCC § 8-17.10(h)(1) (approved July 23, 2013). 6
In 2014, Ordinance No. 974 increased the annual
renewal fee from $500.00 to $750.00. KCC § 8-17.10(h) (approved
6 Upon its approval, Ordinance No. 950 indicated KCC § 8-17.10(h)(1)
would read:
(h) The owner or lessee who has obtained a
nonconforming use certificate under this section shall
apply to renew the nonconforming use certificate annually
on the date of issuance of the nonconforming use
certificate.
(1) Each application to renew shall include
proof that there is a currently valid State of Hawai‘i
general excise tax license and transient
accommodations tax license for the Nonconforming use
and shall be received by the Department prior to the
expiration date of a held non-conforming use
certificate. Failure to meet this condition will
result in the automatic denial of the application for
renewal of the nonconforming use certificates.
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Sept. 30, 2014). Thus, the final version of KCC § 8-17.10(h) as
relevant to this case provided:
(h) The owner or lessee who has obtained a Nonconforming
Use Certificate under this Section shall apply to renew the
Nonconforming Use Certificate annually on the date of
issuance of the Nonconforming Use Certificate.
(1) Each application to renew shall include proof that
there is a currently valid State of Hawai‘i general
excise tax license and transient accommodations
tax license for the nonconforming use and shall be
received by the Department prior to the expiration
date of a held Nonconforming Use Certificate.
Failure to meet this condition will result in the
automatic denial of the application for renewal of
the Nonconforming Use Certificates.
. . . .
(3) The applicant shall pay an annual renewal fee of
seven hundred fifty dollars ($750.00) which shall
be deposited into the County General Fund.
Id. (formatting altered and emphases added).
C. 2015 - Timely Application
In 2015, Kendrick and Chaulklin timely applied to
renew their nonconforming use certificate, with the Planning
Department receiving their application on November 25, 2015,
ahead of the December 12, 2015 annual renewal date. The
application indicated Kendrick's email address was
"BETH@VSE.COM." A November 25, 2015 letter from the Planning
Department approved the application and explained the
nonconforming use certificate was renewed to December 12, 2016.
The letter made no mention of a grace period.
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D. 2016 - Warnings and Timely Application
Less than three months later, on February 9, 2016,
Mike Laureta, Planning Department Program Manager, sent an email
to "beth@vse.com" and others warning that untimely or incomplete
applications for renewal would not be accepted:
Subject: FW: 2016 TVR Renewal
For the past several years, the Department has strongly
encouraged the submittal of complete TVR renewal packets at
least two months prior to the renewal date. Last year,
there were 6 who missed the deadline, and submitted their
renewal packets within 1-30 days after the renewal date.
This cost them $1,500 + 750. There were 2 who completely
forgot to renew, and are now appealing the forfeiture.
By this email, I am giving fair warning - Ordinance
No. 950, Sec. 8-17-10(h)(1) removed the ability to reapply
for renewal if you failed to timely renew. This means -
from here going forward, if you're 1 day late, the
Department will issue you a forfeiture notice. If you
don't run your business in a professional manner and forget
to timely renew, no excuse will be good enough.
If the renewal packet is incomplete beyond the renewal
date, the Department will issue a Forfeiture notice. It's
incumbent on the certificate holders to provide all the
documents listed on the renewal form - we will no longer
chase you for missing documents. At the time you submit
your packet, it had better be complete. You should all
know what is expected during the renewal process,
especially those with Special Permits. This includes a
hard copy of all the websites you advertise on, reflecting
at a minimum, your TVRNCU number and 24/7 on island
contact.
I will be sending this email to all, in groups of maybe 25.
So if you get this more than once, you really better not
miss a renewal date......
(Ellipsis in original and underline added.)
Kendrick and Chaulklin submitted a timely renewal
application on November 8, 2016, ahead of the December 12, 2016
annual renewal date. On November 16, 2016, the Planning
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Department approved the renewal application and explained that
the nonconforming use certificate was renewed to December 12,
2017.
The renewal letter also advised that renewal
applications must be made prior to the annual renewal date or
the Planning Department would issue a "Cease & Desist and Notice
of Forfeiture":
Your TVNCU is renewed to December 12, 2017 based on
the information submitted. Your file is active and
current. Please be advised that in order to keep your
Non-Conforming Use Certificate valid, you must:
1. Apply for renewal every year, no less than
thirty (30) days, and up to two months, prior to
the annual renewal date of December 12, 2017,
utilizing the most current renewal form on our
website, and the renewal fee existing at that
time (presently $750). Should your renewal be
at least one (1) day late, you will be served
with a Cease & Desist and Notice of Forfeiture.
Should your renewal be incomplete, it will not
be processed and will be returned to you via
USPS. The resubmittal of the complete
application must be before the renewal date.
The only supporting documents we will accept
after the renewal date is your tax documents
that are filed on an extension. . . .
E. 2017 - Untimely Application
In 2017, Kendrick submitted an application and a
$750.00 check, both dated December 15, 2017, and received by the
Planning Department on December 20, 2017. Because the
application was submitted after the December 12, 2017 renewal
date, the Planning Department denied the application.
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Kendrick and Chaulklin admitted their application was
submitted "'after the deadline set by the Planning Department.'"
They contested the denial of their untimely renewal application.
F. Contested Case Hearing, Oral Arguments, and Circuit Court
Appeal
Following a contested case hearing, the hearing
officer made findings and conclusions, and recommended the
Planning Commission affirm the Planning Department's decision
denying the renewal application because Kendrick and Chaulklin
"have not met their burden of proof by a preponderance of the
evidence establishing that this decision of the Planning
Department was based on an erroneous finding of a material fact,
or the Planning Director had acted in an arbitrary or capricious
manner, or had manifestly abused his discretion."
The Planning Commission heard oral arguments, and
issued its findings and conclusions, and decision and order
affirming the Planning Department's decision for the reasons set
forth by the hearing officer.
Kendrick and Chaulklin appealed to the circuit court.
Following oral arguments, the circuit court reversed the
Planning Commission and remanded the case to the Planning
Department "to timely accept and promptly process Appellants'
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renewal application for 2017 and affected subsequent years." 7
The County appealed.
II. STANDARDS OF REVIEW
In a secondary appeal, the circuit court reviews the
agency decision de novo under the right/wrong standard. See Dao
v. Zoning Bd. of Appeals of Honolulu, 144 Hawaiʻi 28, 38, 434
P.3d 1223, 1233 (App. 2019).
Hawaiʻi Revised Statues (HRS) § 91-14(g) (Supp. 2019)
provides:
(g) Upon review of the record the court may affirm
the decision of the agency or remand the case with
instructions for further proceedings; or it may reverse or
modify the decision and order if the substantial rights of
the petitioners may have been prejudiced because the
administrative findings, conclusions, decisions, or orders
are:
(1) In violation of constitutional or statutory
provisions;
(2) In excess of the statutory authority or
jurisdiction of the agency;
(3) Made upon unlawful procedure;
(4) Affected by other error of law;
7 The County also challenges various findings in the circuit court's
July 28, 2020 "Findings of Fact and Conclusions of Law, Decision and Order."
On the other hand, Kendrick and Chaulklin assert all the circuit court's
findings not challenged are binding on this court.
However, when a circuit court acts as an appellate court, it may not
make its own findings of fact. Sierra Club v. Bd. of Land & Nat. Res., 154
Hawai‘i 264, 284, 550 P.3d 230, 250 (App. 2024), cert. granted, No. SCWC-22-
0000516, 2024 WL 3378462 (July 11, 2024) (explaining the circuit court
reviewing an agency's decision under Hawaiʻi Revised Statues (HRS) § 91-14
acts as an appellate court and does not make findings of fact, cannot
consider the weight of the evidence, or pass upon the credibility of
witnesses).
Thus, we do not consider the circuit court's findings of fact, but
review the agency's decision pursuant to HRS § 91-14.
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(5) Clearly erroneous in view of the reliable,
probative, and substantial evidence on the whole
record; or
(6) Arbitrary, or capricious, or characterized by
abuse of discretion or clearly unwarranted
exercise of discretion.
"In a secondary appeal, '[t]his court's review is further
qualified by the principle that the agency's decision carries a
presumption of validity and [the party challenging the agency's
decision] has the heavy burden of making a convincing showing
that the decision is invalid . . . .'" Keep the North Shore
Country v. Bd. of Land & Nat. Res., 150 Hawai‘i 486, 503, 506
P.3d 150, 167 (2022) (quoting Korean Buddhist Dae Won Sa Temple
of Haw. v. Sullivan, 87 Hawai‘i 217, 229, 953 P.2d 1315, 1327
(1998)).
III. DISCUSSION
On appeal, the County contends the circuit court
"gravely erred in reversing" the Planning Commission's decision.
Kendrick and Chaulklin contend denial of their renewal
application violated state and county law, and their due process
rights. Here, the circuit court erred because the Planning
Commission did not violate state or county law and did not
violate Kendrick and Chaulklin's due process rights.
A. State and County Laws Were Not Violated
On appeal to the circuit court, Kendrick and Chaulklin
asked, "[d]id the Planning Commission violate state statute and
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county ordinance when it concluded [they] 'forfeited' their
[nonconforming use certificate] even though they never
discontinued their nonconforming use of the property?" In
particular, they argued the Planning Department violated HRS
§ 46-4(a) (Supp. 2017) and KCC § 8-13.2(a) when it denied their
renewal application, challenging the Planning Commission's
conclusion of law (COL) 15. 8
In their answering brief on further appeal to this
court, they argue there is no finding that they "discontinued
use of their nonconforming" transient vacation rental, and
8 COL 15 states:
15. When keeping in mind the purpose of Haw. Rev.
Stat. § 46-4 which is to empower the counties to enact
zoning ordinances allowing and encouraging the most
beneficial use of the land consonant with good zoning
practices, and construing it in a manner consistent with
that purpose, the zoning mandate of KCC § 8-17.10, as
commissioned by Haw. Rev. Stat. § 46-4(a), is to be
liberally construed to permit the nonconforming use of the
Subject Property to continue provided TVNCU #4308 is
maintained and registered with the Planning Department
pursuant to KCC § 8-17(h). See generally In the Interest
of CM, 141 Hawaiʻi at 353, 409 P.3d at 757 ("What is clear
in one statute [(i.e. KCC § 8-17.10(h))] may be called upon
in aid to explain what is doubtful in another [(i.e. Haw.
Rev. Stat. § 46-4(a))]."). If such registration lapses as
in this Contested Case, the nonconforming use is no longer
a lawful use because the Subject Property lacks a
"Nonconforming Use Certificate for [that] single family
vacation rental". KCC § 8-17.l0(b) and Cf. Waikiki
Marketplace. Inv. Co. v. Chair of Zoning of Appeals of the
C&C of Honolulu, 86 Hawaiʻi 343, 356, 949 P.2d 183, 196
(1997) ("[T]he terms 'lawful use' and 'previously lawful,'
as used in HRS § 46-4 and the LUO, refer to compliance with
previous zoning laws, not the building codes or other legal
requirements that may be applicable to the construction or
operation of a structure.").
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assert they used the transient vacation rental "throughout the
year prior to its December 12 renewal deadline."
HRS § 46-4 vests counties with their zoning power.
Kaiser Haw. Kai Dev. Co. v. City & Cnty. of Honolulu, 70 Haw.
480, 483, 777 P.2d 244, 246 (1989). HRS § 46-4 requires that
zoning "shall be accomplished within the framework of a long-
range, comprehensive general plan prepared or being prepared to
guide the overall future development of the county." HRS § 46-
4(a). Each county is allowed to adopt regulations to carry out
the purposes of HRS § 46-4 and "shall prescribe rules,
regulations, and administrative procedures and provide personnel
it finds necessary to enforce this section and any ordinance
enacted in accordance with this section." Id.
"The ordinances may be enforced by appropriate fines
and penalties, civil or criminal, or by court order at the suit
of the county or the owner or owners of real estate directly
affected by the ordinances." Id. The zoning powers "shall be
liberally construed in favor of the county exercising them, and
in such a manner as to promote the orderly development of each
county or city and county in accordance with a long-range,
comprehensive general plan to ensure the greatest benefit for
the State as a whole." Id.
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Importantly, HRS § 46-4(a) protects the existing
lawful use of a building or premises:
Neither this section nor any ordinance enacted
pursuant to this section shall prohibit the continued
lawful use of any building or premises for any trade,
industrial, residential, agricultural, or other purpose for
which the building or premises is used at the time this
section or the ordinance takes effect; provided that a
zoning ordinance may provide for elimination of
nonconforming uses as the uses are discontinued, or for the
amortization or phasing out of nonconforming uses or signs
over a reasonable period of time in commercial, industrial,
resort, and apartment zoned areas only. In no event shall
such amortization or phasing out of nonconforming uses
apply to any existing building or premises used for
residential (single-family or duplex) or agricultural uses.
Id.
Turning to the KCC, Chapter 8 is Kauai's zoning
ordinance. Article 13 of the zoning ordinance generally
addresses nonconforming structures and uses, and Article 17 of
the zoning ordinance specifically addresses transient vacation
rentals as nonconforming uses.
Generally, as provided in Article 13, a nonconforming
use "may continue to the extent that the use existed on
September 1, 1972" but "[i]f any nonconforming use ceases for
any reason for [a] continuous period of 12 calendar months or
for one season if the use be seasonal, then the use shall not be
resumed and any use of the land or building thereafter shall be
in full conformity with the provisions of this Chapter." KCC
§ 8-13.2(a), (b) (2012).
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Specifically, as provided in Article 17, nonconforming
use certificates for transient vacation rentals may be obtained
and renewed annually. KCC § 8-17.10. As discussed above, KCC
§ 8-17.10 requires an owner "who has obtained a Nonconforming
Use Certification under this Section . . . to renew the
Nonconforming Use Certificate annually on the date of issuance
of the Nonconforming Use Certificate." KCC § 8-17.10(h)
(emphasis added).
"Each application to renew . . . shall be received by
the Department prior to the expiration date of a held
Nonconforming Use Certificate" and "[f]ailure to meet this
condition will result in the automatic denial of the application
for renewal of the Nonconforming Use Certificates." KCC § 8-
17.10(h)(1).
To the extent Kendrick and Chaulklin rely on KCC § 8-
13.2(a) and (b) as the only means by which a nonconforming use
may cease, their reliance is misplaced. There is no language in
KCC § 8-13.2(a) and (b) preventing the County from separately
regulating nonconforming use certificates for transient vacation
rentals. And even if they were in conflict, KCC § 8-17.10
specifically applying to the renewal of nonconforming use
certificates for transient vacation rentals would trump. Cf.
Richardson v. City & Cnty. of Honolulu, 76 Hawai‘i 46, 54-55, 868
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P.2d 1193, 1201-02 (1994) (noting in part, "where there is a
'plainly irreconcilable' conflict between a general and a
specific statute concerning the same subject matter, the
specific will be favored") (citation omitted).
Moreover, holders of nonconforming use certificates
obtained under KCC § 8-17.10 must reapply annually prior to the
expiration date of the nonconforming use certificate. Thus, if
a nonconforming use certificate was issued pursuant to KCC § 8-
17.10, the provisions of KCC § 8-17.10 apply. Kendrick and
Chaulklin make no assertions that their TVNCU #4308
nonconforming use certificate for use as a transient vacation
rental was not issued pursuant to KCC § 8-17.10 governing
transient vacation rentals.
Finally, the 2016 letter approving the renewal of the
nonconforming use certificate for TVNCU #4308 stated, "Your
TVNCU is renewed to December 12, 2017[.]" Thus, on December 13,
2017, there was no nonconforming use certificate to renew. When
Kendrick and Chaulklin sent in the renewal form and check dated
December 15, 2017, which the Planning Department received on
December 20, 2017, the Planning Department was obligated to deny
the application as there was no existing nonconforming use
certificate to renew.
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In sum, the Planning Commission did not violate HRS
§ 46-4(a) and KCC § 8-13.2(a) when it affirmed the Planning
Department's decision to deny the untimely renewal application.
The Planning Commission's mixed finding and conclusion in COL 15
(providing in part that "[i]f such registration lapses as in
this Contested Case, the nonconforming use is no longer a lawful
use because the Subject Property lacks a 'Nonconforming Use
Certificate for [that] single family vacation rental") was not
clearly erroneous. (Some brackets in original.)
B. Due Process Rights Were Not Violated
For their due process argument, Kendrick and Chaulklin
contend (1) they did not receive sufficient notice of the
elimination of the thirty-day grace period, (2) the Planning
Department's refusal of their untimely renewal interfered with
their "constitutionally protected vested right to continue their
lawful nonconforming use," and (3) they were not provided an
opportunity to brief the alternate reason given by the Planning
Commission.
"The requirements of due process are flexible and
depend on many factors, but 'there are certain fundamentals of
just procedure which are the same for every type of tribunal and
every type of proceeding[,]' including those before
administrative agencies." Mauna Kea Anaina Hou v. Bd. of Land &
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Nat. Res., 136 Hawai‘i 376, 389, 363 P.3d 224, 237 (2015)
(citations omitted). "The basic elements of procedural due
process are notice and an opportunity to be heard at a
meaningful time and in a meaningful manner." Id. And, "due
process of law generally prohibits decisionmakers from being
biased, and more specifically, prohibits decisionmakers from
prejudging matters and the appearance of having prejudged
matters." Id. Substantive due process "guards against
arbitrary and capricious government action." DW Aina Le‘a Dev.,
LLC v. Bridge Aina Le‘a, LLC., 134 Hawai‘i 187, 219, 339 P.3d
685, 717 (2014) (citation and internal quotation marks omitted).
1. Notice
Before the circuit court, Kendrick and Chaulklin
contended they should be given a thirty-day grace period
pursuant to the 2014 Interpretive Rules. They argued they had
no notice of the elimination of the thirty-day grace period, or
in the alternative, inaccurate notice. They further argued, as
they do before this court, that the new rules cannot be applied
retrospectively. Contrary to their argument, Kendrick and
Chaulklin were not denied due process based on insufficient
notice.
Effective April 25, 2014, the Planning Commission
adopted KPAR-8-19-1, its administrative rule for "Transient
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Accommodation Units[.]" (Formatting altered.) The Planning
Commission found that the annual renewal process lacked
specificity, including where there was a late filing:
The requirements of the Chapter 8, Article 17 of the KCC
lack specificity pertaining to the annual renewal process,
including late filing, the documentation and evidence
required to maintain a non-conforming use as defined in KCC
Section 8-13, and the procedures necessary for a
certificate holder to seek due process in the event of a
non-renewal.
KPAR-8-19-1 FINDINGS. The rule then afforded late filers a
thirty-day grace period and charged an administrative processing
fee of twice the renewal fee:
"Late Renewal Applications. Renewal applications
received by the Planning Department within thirty
days (30) after the deadline may renew, provided
that in addition to the renewal fee, a
certificate holder shall pay an administrative
processing fee of twice the renewal fee."
KPAR-8-19-1(1)(F) (2014). 9 But "[a]fter the thirtieth (30th) day
after the renewal deadline, the Department shall reject any
renewal application and issue a forfeiture letter." KPAR-8-19-
1(1)(E) (2014).
However, this rule directly conflicted with the plain
language of KCC § 8-17.10(h) (2013), the ordinance in effect
when the rule was approved. KCC § 8-17.10(h) (2013) required
the renewal application and proof be received prior to the
expiration date otherwise the application would be denied:
9 We note there are two subsections labeled "F", and the subsection
which we refer to is the first subsection "F".
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(h) The owner or lessee who has obtained a
nonconforming use certificate under this section shall
apply to renew the nonconforming use certificate annually
on the date of issuance of the nonconforming use
certificate.
(1) Each application to renew shall include
proof that there is a currently valid State of Hawai‘i
general excise tax license and transient
accommodations tax license for the Nonconforming use
and shall be received by the Department prior to the
expiration date of a held non-conforming use
certificate. Failure to meet this condition will
result in the automatic denial of the application for
renewal of the nonconforming use certificates.
KCC § 8-17.10(h) (emphases added).
Because the thirty-day grace period directly
conflicted with the ordinance, the ordinance controlled. Cf.
Aregger v. Dep't of Tax'n, 124 Hawai‘i 325, 329, 243 P.3d 285,
289 (App. 2010) (explaining "where there is a conflict between a
court rule and a statute, the statute is controlling"); see
generally Robert D. Ferris Tr. v. Plan. Comm'n of Cnty. of
Kauaʻi, 138 Hawai‘i 307, 310, 378 P.2d 1023, 1026 (App. 2016)
(noting general principles of statutory construction apply to
municipal ordinances).
Effective November 23, 2017, the Planning Commission
amended KPAR-8-19-1 to remove the thirty-day grace period and
clarify that failure to submit a timely renewal application
would result in denial of the application:
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"Late Renewal Applications. Failure to submit an
application to renew the [nonconforming use
certificate] by the [nonconforming use
certificate]'s expiration date will result in the
automatic denial of the application. The
Planning Department shall not accept applications
submitted after the expiration date."
KPAR-8-19-1(C) (2017).
Thus, even if the thirty-day grace period was not
invalid, by the time Kendrick and Chaulklin's application to
renew was due, the rules did not provide for a thirty-day grace
period. And because the rule without a thirty-day grace period
was in effect at the time Kendrick and Chaulklin's application
to renew was due, it was not applied retroactively.
As for notice of the change in the rule, the amended
rule shows there was:
(1) "PUBLIC NOTICE: August 22, 2017 (Posted with the
Office of County Clerk)";
(2) "August 22, 2017 (Publications, Garden Island
Newspaper and Star Advertiser)"; and
(3) "PUBLIC HEARING: September 26, 2017."
As for notice of the KCC § 8-17.10(h) requirement to
file a timely renewal application, in addition to the plain
language of the ordinance, on February 9, 2016, Laureta sent an
email to Kendrick's email address as listed on her 2016 (and
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2017) renewal application, "beth@vse.com", warning that untimely
or incomplete applications for renewal would not be accepted.
Based on the foregoing, Kendrick and Chaulklin were
not denied due process based on insufficient notice.
2. Vested Property Rights
On appeal to the circuit court, Kendrick and Chaulklin
contended that the "Planning Department's Forfeiture Letter and
denial of [their nonconforming use certificate] renewal packet
denied [them of] their right to due process of the law and
interfered with valuable and protected private property rights
because [they] have a constitutionally protected vested right to
continue their lawful nonconforming use."
In their answering brief to this court, Kendrick and
Chaulklin argue they "proved their lawful nonconforming use by
registering it," and "because the right to continue a
nonconforming use arises from Hawaii's zoning enabling act and
constitutional protections and not from regulatory provisions,
the right cannot be lost by a county ordinance or rule."
Again, "[t]he counties of the state of Hawai‘i 'derive
their zoning powers from HRS § 46–4(a) . . . , referred to as
the Zoning Enabling Act.'" Ferris, 138 Hawai‘i at 312, 378 P.3d
at 1028 (citation omitted). HRS § 46-4(a) provides in pertinent
part, "[n]either this section nor any ordinance enacted pursuant
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to this section shall prohibit the continued lawful use of any
building or premises for any trade, industrial, residential,
agricultural, or other purpose for which the building or
premises is used at the time this section or the ordinance takes
effect[.]"
"Under the United States and Hawai‘i Constitutions,
'preexisting lawful uses of property are generally considered to
be vested rights that zoning ordinances may not abrogate.'"
Ferris, 138 Hawai‘i at 312, 378 P.3d at 1028 (citation omitted).
But "[e]ven with respect to vested property rights, a
legislature generally has the power to impose new regulatory
constraints on the way in which those rights are used, or to
condition their continued retention on performance of certain
affirmative duties." U.S. v. Locke, 471 U.S. 84, 104 (1985);
see generally Save Sunset Beach Coal. v. City & Cnty. of
Honolulu, 102 Hawai‘i 465, 474, 78 P.3d 1, 10 (2003) ("[A]
zoning ordinance is a legislative act and is subject to the
deference given legislative acts."). "As long as the constraint
or duty imposed is a reasonable restriction designed to further
legitimate legislative objectives, the legislature acts within
its powers in imposing such new constraints or duties." Locke,
471 U.S. at 104.
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The Supreme Court of the United States has "upheld the
power of the State to condition the retention of a property
right upon the performance of an act within a limited period of
time" and explained that a taking does not occur where the
government is not required "to compensate the owner for the
consequences of his own neglect." Texaco, Inc. v. Short, 454
U.S. 516, 529-30 (1982); see also Bd. of Zoning Appeals,
Bloomington Ind. v. Leisz, 702 N.E.2d 1026, 1031 (Ind. 1998)
("The power to protect the property interest rests solely with
the landowner.").
Here, the County General Plan called for enacting
"clear standards and permit processes for regulating alternative
visitor accommodation structures and operations in Residential,
Agriculture, Open, and Resort zoning districts." Ord. No. 864,
§ 1. The County General Plan also provided that the
"[p]ermitting process should consider the cumulative impact that
a large concentration of alternative visitor units can have on a
residential neighborhood." Id.
In line with the County General Plan, the County
Council found "the uncontrolled proliferation of vacation
rentals in residential and other areas outside the Visitor
Destination Area . . . is causing significant negative impacts
to certain residential neighborhoods[.]" Id.
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The ordinance provided a process to identify and
register pre-existing lawful transient vacation rentals as non-
conforming uses. Id. § 11. The renewal process requires proof
of a valid Hawai‘i general excise tax license and a transient
accommodations tax license, and allows re-inspection of the
property to ensure compliance with other provisions of the
chapter. KCC § 8-17.10. Imposing an affirmative duty on the
holders of the nonconforming use permit to submit their renewal
application on time establishes a reasonable and efficient
process by which the County is able to receive the necessary
documents and ensure compliance with the chapter.
Hawai‘i courts are directed to liberally construe the
powers granted to counties under HRS § 46-4(a) in favor of the
counties and in a manner "to promote the orderly development of
each county . . . in accordance with a long-range, comprehensive
general plan to ensure the greatest benefit for the State as a
whole." HRS § 46-4(a). And this court has previously
determined that the "express purpose of KCC § 8-17.10 . . . is
consistent with the requirements of HRS § 46-4(a) as well as the
constitutional protection provided to property owners with
vested rights to pre-existing lawful uses of their property."
Ferris, 138 Hawai‘i at 313, 378 P.3d at 1029; Campos v. Plan.
Comm'n, 153 Hawai‘i 386, 400, 539 P.3d 170, 184 (App. 2023).
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Thus, the Planning Commission did not abrogate or
interfere with Kendrick and Chaulklin's vested rights when it
denied their untimely renewal application.
3. Alternate Theory
On appeal to the circuit court, Kendrick and Chaulklin
contended the Planning Commission relied on an alternate theory
"to deny Appellants' renewal packet" when it concluded that
"even if the [thirty-day] Grace Period [associated with the 2014
Interpretive Rules] were available to Petitioners, their Renewal
Application was incomplete when received by the Planning
Department on December 21, 2017 because it did not include the
administrative processing fee." 10 (Footnote omitted.) Kendrick
and Chaulklin argued that this violated their "right to due
process because the Planning Department only gave one reason for
denying the renewal packet, that it was untimely." As a result,
Kendrick and Chaulklin contended that they "were never given the
opportunity to brief that subject on appeal to the Planning
Commission."
However, the attorney for Kendrick and Chaulklin
raised the issue in oral argument before the Planning
Commission. For context, the thirty-day grace period rule
imposed an "administrative processing fee of twice the renewal
10 The December 21, 2017 letter from the Planning Department states
they received the renewal document packet on December 20, 2017.
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fee." KPAR-8-19-1 (2014). Thus, if Kendrick and Chaulklin were
genuinely relying on the thirty-day grace period when they sent
their untimely application and check to the Planning Department,
they presumably would have included the mandatory administrative
processing fee, which they did not. In any event, as mentioned,
Kendrick and Chaulklin had an opportunity to address this issue
in their oral argument before the Planning Commission.
IV. CONCLUSION
Based on the foregoing, we reverse the circuit court's
July 28, 2020 "Findings of Fact and Conclusions of Law, Decision
and Order" and August 24, 2020 Final Judgment, and affirm the
November 20, 2018 Planning Commission Decision.
On the briefs: /s/ Keith K. Hiraoka
Presiding Judge
Chris Donahoe,
Deputy County Attorney, /s/ Karen T. Nakasone
for Respondents-Appellees- Associate Judge
Appellants.
/s/ Sonja M.P. McCullen
Gregory W. Kugle, Associate Judge
Joanna C. Zeigler,
(Damon Key Leong Kupchak
Hastert),
for Petitioners-Appellants-
Appellees.
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