Life of the Land, Inc. v. CITY COUNCIL, ETC. , 60 Haw. 446 ( 1979 )

OPINION OF THE COURT BY

MENOR, J.

The plaintiffs-appellants have petitioned this court for a temporary injunction pending appeal, seeking to halt all proceedings, including all affirmative actions on the part of the appellee-developers (The Victoria Partnership and The Admiral Thomas Venture) to proceed with the construction of the Admiral Thomas condominium project, in the Kakaako development area, for which a building permit has been issued by the city. In their suit they question the validity of the permit. The appellee-developers, in whose favor summary judgment had been entered by the circuit court, oppose the petition. The First United Methodist Church, intervening defendant-appellee, also opposes the petition. They allege substantial injury to themselves in the event the petition is granted.

The only question before this court, at this stage of the appeal, is whether the motion for temporary injunction should be granted. In order for an appellant to obtain an injunction pending appeal, there must be a showing that he is threatened with irreparable injury and that there is substantial likelihood that he will prevail on the merits of his appeal. MDG Supply v. Ellis, 51 Haw. 480, 482, 463 P.2d 530, 532 (1969); Life of the Land v. Ariyoshi, 59 Haw. 156, 577 P.2d 1116 (1978). Applying the criteria established by this court to the record in its present state, we are constrained to deny the plaintiffs-appellants motion for a temporary injunction pending appeal.

Because the merits of the controversy are still to be fully heard, we will not in this opinion engage in a detailed exposition of the law and the facts that may be relevant to the ultimate determination of the issues before this court. The briefs of the parties have yet to be filed, and the parties, thereafter, have yet to be given the opportunity to present oral argument on the merits of the appeal.

We will, however, outline some of the basic facts. Ordinance No. 4551, which established a moratorium on the issuance of building permits in the Kakaako district, became effective on January 23, 1976. While this interim development control was in effect, the appellee-developers on July 11,1977, made application with the city council for exemption from the moratorium, pursuant to Section IV of the ordinance which permitted the council, in its discretion, to grant relief from the operation of the ordinance. Such an application, in and of itself, was not unusual for, as the record shows, other applications for exemptions had been made and approved by the city council during this interim period. What set this particular application apart from the others was the nature of the proposed construction and the strong opposition voiced against the project.

After taking into consideration the concerns expressed by those in opposition, the city council on September 21, 1977, approved the developers’ application for the construction of a 350-foot, 35-story, 177-unit apartment structure. At the time of council approval, the proposed building project was clearly a permitted use of the property under the then operative provisions of Ordinance No. 3234, which had designated the area as an A-4 high density apartment zone. Ordinance No. 4551 did not purport to alter in any manner the underlying zoning districts, general plan, development plan or detailed land use maps applicable to the land under review. The processing of building permit applications on file with the city building department before the effective date of the ordinance was not proscribed. The ordinance simply prohibited the acceptance of building permit applications that would otherwise have been proper in the designated zoning districts.

Subsequent to its approval of the developers’ application, the city council on November 10, 1977, determined that several other conditions ought to be imposed. As of that date, approximately $85,000 had already been incurred by the developers for planning and design consistent with the construction specifications initially approved by the city council. The new conditions limited the construction to a building of an average height of not more than 299 feet, with a reduced density of approximately 150 units, and required a set-back from Victoria Street of not less than 95 feet.

The developers were willing to comply. When the necessary plans were completed on January 24, 1978, an application for a building permit was submitted to the city building department. The application included plans, drawings and specifications designed to meet the conditions imposed by the city council. On February 22, 1978, the Thomas Square Historic Cultural and Scenic (“HCS”) District Ordinance (Ordinance No. 78-18) became effective. On May 2, 1978, the plaintiffs-appellants filed suit. Presumably because of the pending litigation, the city council withheld final action on the application. Meanwhile, the city’s department of utilization, at the request of the city council, continued to monitor the developers’ construction plans and designs for conformance with the conditions established by the city council. After the circuit court ruled in favor of the defendants-appellees, the city council on October 25, 1978, determined that all of the conditions it had imposed had been met, and this left the building department free to issue the building permit.

In Denning v. County of Maui, 52 Haw. 653, 485 P. 2d 1048 (1971), this court instructed the trial court to the effect that if the developer, in good faith reliance upon existing law, had expended substantial sums for the preparation of plans and documents for the purpose of applying for a building permit, and it was further shown that he had been given assurances of some form by county officials charged with administering the law that his proposed construction met zoning requirements, and he had a right to rely on such assurances, the county would be equitably estopped from denying him a building permit by reason of a subsequently enacted prohibitory ordinance. In a principal supporting footnote case cited by this court in Denning, the Illinois supreme court said:

“[Plaintiff’s substantial change in position by expenditures in reliance upon the probability of the issuance of a building permit, based upon the existing zoning ordinance and the assurances of city officials, entitles it to the issuance of a building permit.” Cos Corporation v. City of Evanston, 27 Ill.2d 570, 576, 190 N.E.2d 364, 367-8 (1963). ( mphasis added)

We reaffirmed the viability in this jurisdiction of this doctrine of equitable estoppel in Allen v. City & County, 58 Haw. 432, 571 P.2d 328 (1977), where we said that “if the facts establish that the doctrine of equitable estoppel should apply to prevent the City from enforcing newly enacted prohibitive zoning, then the property owner is entitled to continue construction. ’ ’ 58 Haw. at 439, 571 P.2d at 331. The developers in both Denning and Allen claim that they, in good faith reliance upon existing law, had expended substantial sums for architectural, engineering and other services necessary to obtain a building permit.

In this case, the expenditures made by the developers were substantial. In reliance upon Section IV of Ordinance No. 4551, they proceeded to file an application for an exemption from the moratorium on July 11, 1977. The record is not clear exactly how much was spent by the developers in the preparation of plans and designs in support of their application, but it does show that up to September 21,1977, when the city council gave its express approval to the proposed construction, they had already incurred expenditures in excess of $150,000 for planning and design. They first acquired development rights to the property on August 22, 1975, before the passage of Ordinance No. 4551. Following council approval, and between September 21, 1977 and November 10, 1977, they incurred expenditures of close to $95,000 for the project, of which the sum of approximately $85,000 was allocated for planning and design. Subsequent city council action on November 10, 1977, necessitated further construction design modifications. Between that date and April 20, 1978, the developers incurred expenditures of approximately $321,000, of which some $275,000 went for planning and design. By the time suit was filed on May 2, 1978, in an attempt to put a halt to the project, they had incurred further expenditures of approximately $7,500 for planning and design. These expenditures for planning and design were incurred by reason of, and in compliance with, council action on their application, and in reliance upon the implicit assurance that if the special construction conditions imposed by the council were met, a building permit would issue.

Fred Paul Benco for plaintiffs-appellants for the motion. Joseph T. Kiefer for defendants-appellees.

Under these circumstances, the petition for injunction pending appeal will be denied.