Kellberg v. Yuen.Â

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Electronically Filed
Supreme Court
SCWC-12-0000266
22-JAN-2014
10:19 AM
IN THE SUPREME COURT OF THE STATE OF HAWAI#I
---o0o---
MARK C. KELLBERG, Petitioner/Plaintiff-Appellant,
vs.
CHRISTOPHER J. YUEN, in his capacity as
Planning Director, County of Hawai#i,
and COUNTY OF HAWAI#I, Respondents/Defendants-Appellees.
SCWC-12-0000266
CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
(CAAP-12-0000266; CIV. NO. 07-1-0157)
January 22, 2014
RECKTENWALD, C.J., NAKAYAMA, ACOBA, MCKENNA, AND POLLACK, JJ.
OPINION OF THE COURT BY POLLACK, J.
This appeal arises out of a decision by Respondents/
Defendants-Appellants Christopher J. Yuen in his capacity as
Planning Director of the County of Hawai#i (Planning Director)
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and the County of Hawai#i (County) (collectively, “County
Defendants”), to approve a subdivision on the subject property.
Petitioner/Plaintiff-Appellant Mark C. Kellberg (Kellberg), an
adjacent land owner, filed an action in the Circuit Court of the
Third Circuit (circuit court) challenging the subdivision
approval. The circuit court granted summary judgment on all
counts in favor of the County Defendants. In his Application for
Writ of Certiorari (Application), Kellberg seeks review of the
July 19, 2013 Judgment on Appeal of the Intermediate Court of
Appeals (ICA), filed pursuant to its June 20, 2013 Memorandum
Opinion, vacating the circuit court’s judgment and remanding for
an order dismissing the case. For the reasons set forth herein,
we vacate the ICA’s judgment and remand the case to the ICA for
consideration of the remaining issues raised by Kellberg in his
appeal to the ICA.
I. BACKGROUND
A. Subject Property
The subject property is a 49-acre parcel of land
located in N§ nole, County of Hawai#i (Subject Property).
Kellberg owns property adjacent to the Subject Property. On May
22, 2000, Virginia Goldstein, the Planning Director at the time,
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sent a letter to Robert Williams,1 President of Prudential Orchid
Isle Properties, reflecting the Planning Department’s
determination that the Subject Property consisted of six pre-
existing lots.2 A map was attached to Goldstein’s letter,
reflecting five adjoining lots in the larger 48.47-acre portion
of the Subject Property, and a sixth smaller, 0.600-acre non-
contiguous lot (identified as Lot 4 on the map).
In December 2003, the then-owners of the Subject
Property wrote to Christopher Yuen, who had taken over as
Planning Director, stating that they would like to consolidate
and re-subdivide the property. The owners wrote that it was
their belief that there were at least “seven usable lots of
record located” on the property. (Emphasis added). On June 2,
2004, the Planning Director responded to the owners and wrote
that based on a review of the relevant records, the Planning
Department had determined that “the subject property consist[s]
of two (2) separate legal lots of record[.]” (Emphasis added).
One of the lots included the small non-contiguous plot.
1
Ms. Goldstein was responding to Mr. Williams’ letter of April 10,
2000 regarding determination of pre-existing lots on the subject property.
2
§ 23-3(21) of the Hawai#i County Code (Supp. 2010) defines “pre-
existing lot” to mean “a specific area of land that will be treated as a legal
lot of record based on criteria set forth in this chapter.” § 23-118 (2005)
sets forth the relevant criteria for a pre-existing lot. A lot is a pre-
existing lot if it was created and recorded prior to November 22, 1944. § 23-
118(a).
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In 2004, Michael Pruglo purchased the Subject Property.
In a letter dated January 15, 2005, Sidney M. Fuke, a planning
consultant working with Pruglo, wrote to the Planning Director to
memorialize a January 12, 2005 discussion between Fuke and the
Director. Fuke wrote that at the January 12 meeting, the
Director confirmed that he “would accept the six (6) lots
acknowledged in the May 22, 2000 letter as lots of record[.]”
On April 7, 2005, Fuke filed a “Consolidation/
Resubdivision Application” (SUB 05-000064) with the Planning
Department, on Pruglo’s behalf. In the accompanying letter, Fuke
reiterated that pursuant to Goldstein’s May 22, 2000 letter and
Fuke’s January 15, 2005 discussion with the current Planning
Director, the Subject Property was determined to have six pre-
existing lots.
The preliminary plat map included with the application,
dated April 6, 2005, identifies the larger 48-acre portion of the
Subject Property as “Parcel 1,” and divides Parcel 1 into six
lots, labeled “1-A” through “1-F.” However, the smaller, 0.6-
acre non-contiguous lot from the Planning Department’s May 22,
2000 letter is not included as part of the proposed subdivision.
Instead, the non-contiguous lot is labeled “Parcel 2.”
On June 1, 2005, the Planning Director granted
tentative approval of the preliminary plat map.
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On July 1, 2005, Fuke submitted a final plat map to the
Planning Director. Consistent with the preliminary map, the
final plat map identifies the larger portion of the Subject
Property as “Parcel 1” and shows this portion divided into six
lots. The smaller non-contiguous portion of the property, while
reflected in the map, is no longer identified as “Parcel 2” or by
any label.
On July 11, 2005, the Planning Director sent a letter
to Fuke, providing, “FINAL SUBDIVISION APPROVAL NO. SUB-05-
000064.” The letter stated, “Please be informed that final
subdivision approval for recordation is hereby granted to the
final plat map as attached herewith inasmuch as all requirements
of the Subdivision Code, Chapter 23, as modified have been met.”
(Emphasis added).
According to Kellberg, he first became aware of the
subdivision of the Subject Property a month later on August 11,
2005, when he observed a “for sale” sign on the Subject Property,
and a realtor later called him with an offer to sell him a newly
created lot along his property line. The next day, he went to
the Planning Department. He asked an employee about filing an
appeal and was informed that the thirty-day period for appeals
had already passed. He asked to speak to the Planning Director,
but was told that he was unavailable. Kellberg then left his
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contact information and asked that the Director call him later
that day. When the Director did not contact him as requested,
Kellberg again visited the Planning Department on August 16 and
left his contact information. However, the Director did not call
him.
In a letter dated August 16, 2005, Kellberg informed
the Planning Director that he had recently learned of the
subdivision approval and that he was “writing to make [the
Planning Director] aware of serious omissions and errors” in the
approved subdivision plan. In relevant part, Kellberg noted that
the final subdivision plan on file with the Planning Department
divides the Subject Property into seven lots rather than six
lots. The seventh lot consisted of the smaller, non-contiguous
parcel reflected in the Planning Department’s May 22, 2000 map as
Lot 4. Kellberg wrote, “Your agreement to honor the previous
administration’s six pre-existing lot determination (as per your
01/12/05 meeting with Mr. Fuke), allows a six lot subdivision of
the subject property, while the ‘final’ subdivision plan on file
with your office divides the subject property into seven lots.”
Kellberg concluded his letter by stating that he “can
appreciate that at this late date, the errors and omissions I
have noted will be difficult to correct, and certainly
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inconvenient for all parties involved.” He wrote, “I would
encourage your prompt intervention in this matter[.]”
On October 19, 2005, the first subdivision lot was
sold.
In a letter dated January 17, 2006, Kellberg again
wrote to the Planning Director. He stated that in the five
months since his first letter, he had called the Planning
Director’s office and left numerous messages, with no response.
He reiterated that the most serious error in the subdivision
approval was that it failed to recognize Lot 4 and created seven
lots instead of the agreed-upon six lots. He concluded by
requesting a response and an account of the steps the Planning
Director had taken to correct the identified errors.
On February 17, 2006, Kellberg wrote to the County of
Hawai#i Office of the Corporation Counsel (Corporation Counsel)
with his concerns regarding the subdivision. Corporation Counsel
responded on February 24, 2006, and encouraged Kellberg to
continue attempting to contact the Planning Director and also
noted that Kellberg could consider appealing the matter to the
Hawai#i County Board of Appeals (BOA).
In a letter dated March 5, 2006, Kellberg wrote to the
Planning Department, stating that he was writing “at the
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suggestion of Corporation [Counsel] . . . to request information
concerning the [BOA].”
On March 21, 2006, the Chairman of the BOA responded to
Kellberg’s March 5 letter to the Planning Department. The
Chairman stated that “[a]ccording to our records, the Planning
Director granted Final Subdivision Approval on July 11, 2005 for
the 6-lot subdivision of the subject property.” (Emphasis
added). The Chairman continued by informing Kellberg that the
BOA rules required an appeal from the Planning Director’s
decision to be filed within thirty days of the decision: “For
your information, Section 8-3, Time Limit for Filing Appeal, of
Part 8 . . . states that an appeal from the decision of the
Planning Director shall be filed within thirty (30) days after
the decision.” A copy of the BOA’s Rules of Practice and
Procedures and a General Petition form were enclosed with the
letter.
On April 19, 2006, Pruglo and Fuke submitted a new
consolidation and resubdivision application for the Subject
Property (SUB 06-000333). The plan involved consolidating the
non-contiguous parcel with another parcel created by the previous
subdivision.3
3
On August 12, 2009, Fuke submitted a revised application for
Subdivision 06-000333, to consolidate the non-contiguous parcel (TMK 3-2-
02:110) with another lot created by Subdivision 05-00064 (TMK 3-2-02:68). On
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On June 19, 2006, Kellberg wrote a third letter to the
Planning Director.4 According to Kellberg, he had become aware
of the pending subdivision application and asked the Planning
Director to notify him when the subdivision application was
approved.
On August 25, 2006, Kellberg’s counsel, Stephen D.
Whittaker, wrote to the Planning Director at Kellberg’s request.
The letter provided that it was regarding “Subdivision Plan SUB-
05-000064; Resubdivision Plan 06-000333.” Whittaker wrote that
it was his assumption that “an appeal is premature in that Mr.
Kellberg has not received notice of any action purporting to
approve the ‘resubdivision’ . . . and on June 19, 2006, he asked,
in writing, to be notified ‘when tentative approval has been
granted . . . for the resubdivision.’”
On October 23, 2006, more than a year after Kellberg’s
first letter, the Planning Director responded by letter to
Kellberg and Whittaker. The Director stated that he was writing
in response to Kellberg’s letters of August 16, 2005, January 17,
October 21, 2009, Fuke submitted a final plat map to the Planning Director.
Although the final approval of Subdivision 06-000333 is not included in the
record on appeal, according to a Planning Department employee, the non-
contiguous parcel was “consolidated with an adjoining property.”
4
Kellberg’s June 19, 2006 letter is not included in the record on
appeal. However, the letter is referenced throughout the record, and the
Planning Director acknowledged receiving the letter.
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2006, and June 19, 2006, and to Whittaker’s letter of August 25,
2006. The Director wrote, “The number of pre-existing lots on
[the Subject Property], and their subsequent use in Sub. 05-00064
and the pending Sub. 06-000333 seems to be the most important
issue.”
With respect to the number of pre-existing lots, the
Planning Director acknowledged that the Planning Department had
previously recognized six lots on the subject property, per the
Department’s May 22, 2000 letter. The Director further
acknowledged that in the Department’s June 2, 2004 letter, the
Department only recognized two lots. The Director stated, “This
was a mistake, because the Department should have respected the
previous determination.”
The Director explained that he subsequently informed
Fuke that the Department “would honor” the May 22, 2000
recognition of six lots. Accordingly, Pruglo’s subdivision
application was based on recognizing six pre-existing lots. The
Director also acknowledged that “there was a mistake in the
approval” of the subdivision application because the Planning
Department had not accounted for the non-contiguous lot:
As Mr. Kellberg correctly points out, there was a mistake in
the approval of that subdivision. One of the six recognized
lots was a 0.699 acre portion of Grant 11,070. For some
reason, it was not contiguous with the remainder of TMK No.
3-2-2-35. In the consolidation/resubdivision, the Planning
Department did not notice that this noncontiguous portion
had been included in the lot count. Thus, it remained
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separate, and is now TMK No. 3-2-2-110. Thus, with the six
lots in Sub. 05-00064 and parcel 110, there are now seven
lots instead of six.
(Emphases added). The Director then stated that he would not be
taking any action to “undo this situation at this time” because
the subdivision had already “received final subdivision approval
and at least some of the lots have been sold”:
I am not going to do anything to undo this situation at this
time. Sub. 05-0064 has received final subdivision approval
and at least some of the lots have been sold. Given that
parcel 110 is physically separated from the remainder of
Sub. 05-00064, and from any property owned by the
subdivider, I cannot see a way to erase its separate
existence.
The Director concluded his letter by apologizing for
not responding earlier and informing Kellberg that the Planning
Department staff had been “instructed to send copies of future
correspondence from our office concerning Sub. 06-000333 and any
revisions of Sub. 05-00064.”
In a letter dated February 6, 2007, Kellberg responded
to the Director. Kellberg stated that he had reviewed the
revised final plat map referenced in the Director’s January 19,
2007 letter, and the “major defect” regarding the non-contiguous
lot remained. Kellberg continued, “[A]nd so I thought I would
avail myself of the opportunity to ask you to reconsider your
stated position that you are ‘not going to do anything to undo
this situation at this time.’” Kellberg cited § 23-74(c) of the
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Hawai#i County Code (County Code),5 providing that the Director’s
“approval for recordation of the final plat by the director shall
not relieve the subdivider of the responsibility for any error in
the dimensions or other discrepancies. Such errors or
discrepancies shall be revised or corrected, upon request, to the
satisfaction of the director.” Kellberg wrote that it was his
belief that this provision “would give you the legal power to
require Mr. Fuke and Mr. Pruglo to correct the mistake,
regardless of the cost or inconvenience to themselves.”
Kellberg noted that Fuke and Pruglo still owned two
pairs of abutting lots in the subdivision. Accordingly, it was
within the Director’s power “to resolve the original lot count
‘mistake’ by simply notifying Mr. Fuke and Mr. Pruglo that they
are required to combine one or the other of these abutting pairs
into a single lot, thereby reducing the total number created to
the requisite six.”
On June 15, 2007, the Planning Director wrote a letter
briefly responding to Kellberg, which did not address the
concerns raised by Kellberg.
5
The 2005 edition of the County Code, as amended by supplements
through 2012, is available at http://www.hawaiicounty.gov/lb-
countycode/#countycode.
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B. Circuit Court Proceedings
1.
On May 11, 2007, Kellberg filed a Complaint in the
circuit court against the County Defendants.6 In Count I,
Kellberg alleged that he is a “person aggrieved by the decision
of [the Planning Director] to approve SUB-05-00064.” He further
alleged that the Planning Director had continually refused to
revise the subdivision approval to comply with Chapter 23 of the
County Code, despite the Director’s acknowledgment that there was
a mistake in the approval of the seven-lot subdivision. The
Director had also refused to require Pruglo to comply with the
law.
In Count II, Kellberg alleged that he was entitled to a
declaratory judgment regarding “the application of the [County
Code] to SUB-05-00064 and [the Planning Director’s] arbitrary
decision to disregard the limitations of Section 23-67 and to
create seven (7) lots out of one in violation of Section 23-7
[(governing pre-existing lots)].”
Under Count III, Kellberg claimed that as an adjacent
landowner, he has a property interest in the subdivision. He
stated that the County Defendants approved the subdivision
6
The Honorable Glenn S. Hara, presiding.
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“without correcting patent defects” and without providing any
notice or due process to him. He alleged that the subdivision
approval therefore violated his right to due process under the
Fifth and Fourteenth Amendments to the U.S. Constitution and
article I, section 5 of the Hawai#i Constitution.
In Count IV, Kellberg alleged that the Planning
Director abused his discretion and violated statutes by refusing
to apply County Codes § 23-67, requiring tentative approval of
the preliminary plat map to be deemed void without timely
submission of a final map, and § 23-74(c), requiring errors in
subdivisions to be revised or corrected to the director’s
satisfaction.
In Count V, Kellberg alleged that he was entitled to an
injunction requiring the Planning Director to bring the
subdivision into compliance with the County Code and prohibiting
the County Defendants “from permitting more than two (2) lots on
the Subject Property and from allowing any subdivision of the
Subject Property other than in accordance with [the County
Code].”
Finally, in Count VI, Kellberg claimed that his
property had been adversely and materially impacted by the
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subdivision and by the County Defendants’ refusal to correct the
mistakes that had been made.7
2.
On January 9, 2008, the County filed a Motion to
Dismiss the Complaint (First Motion to Dismiss). The County
argued that the Complaint must be dismissed because Kellberg “has
not alleged any concrete interest which gives rise to standing on
his part to bring this suit.”
Following a hearing on the motion, the court entered an
order denying the County’s First Motion to Dismiss on April 1,
2008. The court found that Kellberg, “as the owner of real
property adjoining SUB-05-00064, has standing to assert the
claims in the Complaint.”
On July 23, 2008, the County Defendants filed a Motion
to Dismiss for Failure to Exhaust Administrative Remedies (Second
7
Based on the foregoing, Kellberg requested that the court provide
the following relief: 1) declare the subdivision violative of the County Code
and therefore void; 2) declare the Planning Director’s conduct in approving
the subdivision illegal and void as against public policy; 3) determine that
Kellberg should be provided with notice and an opportunity to be heard on the
merits of the subdivision approval; 4) find that the Planning Director’s
refusal to correct mistakes in the subdivision approval constitutes an abuse
of discretion and direct the Planning Director to take necessary action to
bring the subdivision approval in compliance with the County Code; 5) issue a
mandatory injunction requiring the Planning Director to correct the
subdivision and enjoining the County Defendants from approving further
subdivision of the Subject Property until it is brought into compliance with
the County Code; 6) award Kellberg monetary damages as proven at trial; 7)
award Kellberg attorneys’ fees and costs; and 8) grant Kellberg such other
relief as is just and proper.
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Motion to Dismiss).8 The County Defendants noted that pursuant
to County Code § 23-5, any person aggrieved by the Director’s
decision “may, within thirty days after the director’s decision,
appeal the decision to the board of appeals.” The County
Defendants argued that Kellberg was aware of the subdivision in
August 2005, and “the Planning Director, in a letter dated
October 23, 2006, refused to accede” to Kellberg’s requests. The
County Defendants argued that Kellberg had not appealed any
decision of the Director to the BOA within the required thirty-
day time frame. Accordingly, the circuit court lacked subject
matter jurisdiction over the case because Kellberg had failed to
exhaust all available administrative remedies.
Kellberg responded that the circuit court has original
jurisdiction over the Complaint, which alleged violations of the
state and federal Constitution and violations of statutes.
Kellberg argued that even if the court found that the Planning
Department or BOA has unique expertise regarding any issues
raised in the Complaint, the doctrine of primary jurisdiction
required the action to be stayed rather than dismissed.
A hearing on the Second Motion to Dismiss was held on
September 5, 2008. In response to the court’s questions
8
The Second Motion to Dismiss also sought dismissal based on the
failure to join indispensable parties.
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regarding notice of the subdivision to Kellberg, counsel for the
County Defendants argued that the Planning Director’s October 23,
2006 letter “says this was a final decision and nothing else
could have occurred.” Thus it was the County Defendants’
position that Kellberg had until November 23, 2006 to file an
appeal.
However, the court responded that the letter was
“somewhat ambiguous or at least confusing” because the Chairman
appeared to be saying that the final subdivision approval was on
July 11, 2005, and Kellberg should have filed an appeal by August
11, 2005, which was well before the Chairman’s letter.
On September 30, 2008, the circuit court entered its
findings of fact, conclusions of law and order denying the Second
Motion to Dismiss. The court found “the County has not shown
that there were administrative processes available to Mr.
Kellberg providing meaningful and adequate notice of SUB 05-00064
and an opportunity to appeal the Planning Director’s decision.”
The court concluded that it had “original jurisdiction
of Plaintiff’s Complaint which, under the circumstances, is not
subject to dismissal for failure to exhaust administrative
remedies.” The court further concluded that Kellberg “did not
fail to exhaust available administrative remedies and, instead,
the Court finds that, under the circumstances presented on the
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motion, Plaintiff did not have an available administrative
remedy.”
On May 27, 2009, Kellberg filed a “Motion for Partial
Summary Judgment on Count I (Violation of Statute), Count II
(Declaratory Judgment) and Count IV (Abuse of Discretion)”
(Motion for Partial Summary Judgment). Kellberg argued that
there was no genuine issue of material fact that the County
Defendants had violated the County Code by approving the
subdivision, which “yielded seven (7) lots out of six (6)[.]”
Additionally, Kellberg claimed that the Planning Director, who
acknowledged the “mistake” in his subdivision approval, was
required to correct the mistake.
In response, the County Defendants argued that the
“determinations of pre-existing lots as well as the approval of
the number of lots in a consolidation and re-subdivision are
determinations within the discretion of the Planning Director.”
On May 29, 2009, the County Defendants filed a “Motion
to Dismiss Pursuant to Rule 12(b)(6) of the Hawaii Rules of Civil
Procedure” (Third Motion to Dismiss). The County Defendants
argued that no private cause of action exists to permit Kellberg
to challenge the Planning Director’s actions regarding the County
Code.
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On June 19, 2009, a hearing was held on Kellberg’s
Motion for Partial Summary Judgment. The court explained that it
was “inclined to . . . flesh out the record at the County level”
by granting Kellberg’s Motion for Partial Summary Judgment “in
the form of an order remanding this back down to the County for a
appeal before the Board of Appeals.” The court further explained
that it was finding that “Kellberg was denied an appeal before
the Board of Appeals based on the October 23, 2006, decision of
the director,” but stopping short of finding a specific violation
of the subdivision approval and “leaving that up to the Board of
Appeals.” The court stated that it was “sending it back to the
Board of Appeals to process” Kellberg’s “[a]ppeal of the October
23 decision.”
On July 24, 2009, the court filed its order granting
the Motion for Partial Summary Judgment. The order provided, “IT
IS ORDERED ADJUDGED AND DECREED that Plaintiff should have been
allowed to appeal the decision of October 23, 2006 pursuant to
the provisions of Section 23-5 of the Hawaii County Code but
Plaintiff was denied such an opportunity to appeal.” The order
continued, “The Court remands this case to the Board of Appeals
for the County of Hawaii regarding the Appeal of the Decision of
the Director found in the October 23, 2006 letter to Mr.
Kellberg.”
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On the same day, the court entered its order denying
the County Defendants’ Third Motion to Dismiss, reaffirming that
Plaintiff, as the owner of real property adjoining SUB-05-00064,
has standing to assert the claims in the Complaint.”
C. Board of Appeals Proceedings
On September 15, 2009, Kellberg filed a “General
Petition for Appeal of Decisions by Planning Director” (Petition)
with the Board of Appeals.9 In his Petition, Kellberg stated
that he sought “reversal, modification, or remand” of “three
major decisions” of the Planning Director, “to whatever extent is
necessary” to satisfy the County Code: 1) the January 12, 2005
decision to honor the May 22, 2000 determination that the Subject
Property contained six pre-existing lots; 2) the July 11, 2005
decision to grant final subdivision approval; and 3) the October
23, 2006 letter stating that the Director would do nothing to
bring the subdivision into compliance.10
On October 21, 2009, the County Defendants filed a
motion to dismiss the Petition.
9
The Petition was attached as Exhibit B to Kellberg’s declaration,
which was attached to Kellberg’s March 4, 2010 motion for partial summary
judgment on Count V and for an injunction against the County.
10
Kellberg appears to have prepared and submitted the Petition
without the assistance of counsel.
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The BOA held a hearing to consider the Petition and the
motion to dismiss on November 13, 2009. Counsel for the County
Defendants argued that “[a]ny ruling by Judge Hara . . . cannot
confer additional jurisdiction to the Board” and that Judge Hara
“made no determination” that the BOA “should accept
jurisdiction[.]” Counsel also argued that if the BOA took
“October of 2006 as the date of the decision . . . then any
appeal would have had to been filed no later than . . . November
22, 2006.”
Kellberg and his counsel questioned “what decisions are
included in that October 2006 letter.” Kellberg’s counsel
further argued that whether the October letter could be
characterized “as a final decision that in the ordinary course
might be appealable” was not relevant to the BOA’s decision on
the Petition.
The BOA voted 5-1 to grant the motion to dismiss the
Petition. On February 19, 2010, the BOA filed its findings of
fact, conclusions of law, and decision and order (Decision and
Order). The BOA found that Kellberg was appealing “from a
written decision of the Planning Director dated October 23, 2006
. . . informing Appellant that the Planning Department would take
no further action on a complaint by Appellant regarding
consolidation and re-subdivision application SUB 05-000084.” The
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BOA found that Kellberg “filed an appeal from the Director’s
Decision on September 15, 2009.”
The BOA further found that Kellberg “received notice of
the requirements regarding the time for filing a notice of appeal
to the [BOA] on March 5, 2006 prior to the October 23, 2006
letter from the Planning Director.”
The BOA concluded that Kellberg’s appeal was filed
“beyond the time permitted to file an appeal,” and the BOA
therefore lacked jurisdiction to consider the appeal.
Accordingly, the BOA determined that Kellberg’s appeal was
“dismissed and the decision of the Planning Director . . .
affirmed.”
D. Circuit Court Proceedings Continued
1.
On March 4, 2010, Kellberg filed a “Motion for Partial
Summary Judgment on Count V (Injunction) and for Injunction
against the County of Hawaii” (Motion for Injunction) with the
circuit court. Kellberg requested an order granting summary
judgment on Count V of the Complaint, seeking an injunction
remanding the case to the Planning Department with instructions
to the Planning Director to bring the subdivision into compliance
with the County Code, and enjoining the County Defendants from
“allowing the further sale, transfer of ownership, or development
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and improvement of lots created” by the subdivision until
compliance is demonstrated.
Kellberg argued that he had fully complied with the
circuit court’s July 24, 2009 order granting the Motion for
Partial Summary Judgment, but was “deliberately and effectively
prevented” by the County Defendants “from obtaining the relief
intended by the Court.” Kellberg argued that the BOA’s treatment
of his appeal demonstrated that Kellberg “never had, nor would
have ever been allowed to have, an administrative remedy with
regard to any aspect of SUB 05-00064.”
The County Defendants argued in response that the BOA
rendered its final decision in its Decision and Order filed on
February 22, 2010, but Kellberg did not file an appeal from this
Decision and Order. Thus the BOA’s findings “are final and have
a preclusive effect upon the issues concerning the exhaustion of
administrative remedies and the jurisdiction of the circuit court
with respect to this case.”
A hearing on the Motion for Injunction was held on
April 28, 2010. At the hearing, counsel for the County
Defendants argued that “the problem” with the case was that
although the circuit court “remanded” the case to the BOA, the
case “never came up from the board of appeals.” The court
responded, “[D]idn’t [the BOA] finally dismiss the appeal on the
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same grounds that I found that Mr. Kellberg had a basis to go
ahead and have an appeal, and that is – the timing of all of
these matters did not allow him to adequately lodge an appeal
with the board?” The court clarified that it had remanded the
case to the BOA to “see what kind of remedies they had if they
were, in fact, convinced that the subdivision laws, as I was
convinced, was not complied with.”
The court concluded that it was “inclined to go ahead
and grant the motion,” but also stated that the court was
“reluctant” because “the issue of whether or not there may be
adequate remedies at law in terms of damages would preclude the
granting of a motion for summary judgment.”
Nearly five months later, on September 22, 2010, the
circuit court filed an order denying the Motion for Injunction.
The order provided that the court’s July 24, 2009 order remanding
the matter to the BOA rendered Count V of the Complaint “moot as
the remand addressed Mr. Kellberg[’s] right and opportunity to be
heard referred to in Count V.”
On October 15, 2010, the circuit court filed a second
order denying the Motion for Injunction. The order was largely
identical to the initial order. The second order additionally
provided that Kellberg’s “failure to exhaust his administrative
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remedies forecloses this court from further action in this
matter.”
2.
On April 21, 2011, the County Defendants filed a
“Motion for Summary Judgment” (Motion for Summary Judgment) on
all claims, asking the court to dismiss the Complaint.
In relevant part, the County Defendants argued that
Kellberg had failed to exhaust his administrative remedies.
Pursuant to County Code § 23-5, Kellberg “had thirty days to
appeal the Planning Director’s decision to recognize six pre-
existing lots or grant final subdivision approval.” “However,
Plaintiff failed to file an appeal with the BOA until the Court
ordered him to do so.”
On May 3, 2011, Kellberg filed a memorandum in
opposition to the Motion for Summary Judgment. Kellberg noted
that the circuit court had already determined in its September
30, 2008 order denying the Second Motion to Dismiss, that the
County had not shown there were administrative processes
available to Kellberg that provided notice and an opportunity to
appeal the subdivision approval. Accordingly, Kellberg argued
that the Motion for Summary Judgment should be denied as an
untimely motion for reconsideration.
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A hearing on the Motion for Summary Judgment was held
on May 11, 2011.11 On June 16, 2011, the court filed an order
granting the Motion for Summary Judgment as to all counts. The
order provided only that “the record reflects the absence of any
genuine issue of material fact.”
On February 28, 2012, the court filed a Final Judgment
in favor of the County Defendants and against Kellberg on all
counts of the Complaint.
E. Appeal
1.
On April 4, 2012, Kellberg filed an appeal with the
ICA, appealing the Final Judgment, as well as eight of the
circuit court’s prior orders.12
In his opening brief, Kellberg raised eight points of
error. In relevant part, Kellberg argued that the circuit court
erred in granting summary judgment based on a finding that
Kellberg failed to exhaust his administrative remedies by not
11
The Honorable Ronald Ibarra, presiding.
12
Kellberg appealed the circuit court’s 1) July 24, 2009 order
granting Motion for Partial Summary Judgment; 2) September 22, 2010 order
denying Motion for Injunction; 3) October 15, 2010 order denying Motion for
Injunction; 4) June 14, 2011 order denying Motion for Supplemental Injunctive
Relief; 5) June 16, 2011 order denying Motion to Enforce Judgment; 6) June 16,
2011 order granting Motion for Summary Judgment; 7) August 31, 2011 order
granting in part and denying in part Motion to Vacate; 8) January 23, 2012
order denying Motion for Clarification; and 9) February 28, 2012 Final
Judgment.
All eight orders were referenced in the circuit court’s Final
Judgment.
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timely appealing the Planning Director’s July 11, 2005 approval
of the subdivision.
Kellberg stated that under the doctrine of exhaustion
of remedies, an aggrieved party may apply directly to the court
for relief if no administrative procedures are provided for the
party to seek a remedy. In this case, Kellberg argued that no
administrative remedies were available to him, as reflected in
the circuit court’s order denying the County Defendants’ Second
Motion to Dismiss. In that order, the court concluded that
Kellberg “did not fail to exhaust administrative remedies and,
instead, the Court finds that, under the circumstances presented
on the motion, Plaintiff did not have an available administrative
remedy.”
Kellberg also argued that he had no available
administrative remedy because he received no notice (whether
“actual, constructive, or by way of visible developmental
activity”) of the subdivision application or approval. Rather,
he first learned of the subdivision on August 11, 2005, a day
after the thirty-day period of appeal had expired. Kellberg
maintained that where a litigant fails to exhaust remedies
because the litigant was not appropriately notified of its
availability in time to use the remedy, then failure to exhaust
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is excused. He was therefore entitled to seek direct judicial
review of his Complaint.
Kellberg further argued that the Planning Director’s
October 23, 2006 letter did not inform him that he had a right to
appeal the Director’s decision to do nothing about the mistakes
in the approval. He argued, “Having been rebuffed by the BOA . .
. , no reasonable person would have understood [the Planning
Director’s] decision to do nothing as a separately appealable
decision.” Accordingly, Kellberg exhausted every potential
avenue of administrative remedy before filing his Complaint.
With respect to his exhaustion of remedies following
the BOA’s dismissal of his Petition, Kellberg argued that the
doctrine of exhaustion of remedies is not absolute, and provides
for exceptions when no effective remedies exist. He complied
with the court’s July 24, 2009 order granting the Motion for
Partial Summary Judgment by filing his Petition with the BOA, but
the BOA and the County Defendants acted in defiance of the court
order by refusing to review the subdivision. Thus, “[t]he BOA’s
February 19, 2010 dismissal of Kellberg’s appeal definitively
demonstrated the further pursuit of an administrative remedy to
the dispute to be futile.”
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2.
The County Defendants argued in their answering brief
that Kellberg failed to timely file an appeal with the BOA, and
when the County Defendants “raised this jurisdictional issue,”
the circuit court “ordered this case to the BOA.” Subsequently,
the “BOA conducted an evidentiary hearing” and “ruled against
Kellberg.” However, Kellberg “failed to appeal the decision of
the BOA,” thereby “deliberately fail[ing] to exhaust his
administrative remedies.” The County Defendants argued that this
decision by Kellberg to not appeal the BOA’s decision precluded
the circuit court from granting any further relief, as reflected
in the circuit court’s October 15, 2010 order denying the Motion
for Injunction.
3.
The ICA concluded in its Memorandum Opinion that
“Kellberg failed to exhaust the administrative remedies available
to him before commencing his action, leaving the circuit court
without jurisdiction to act on his complaint.”
Kellberg v. Yuen, No. CAAP-12-0000266, 2013 WL 3156015, at *3
(Haw. App. June 20, 2013) (Memo. Op.).
Pursuant to Part 8 of the BOA Rules and § 23-5 of the
County Code, persons aggrieved by a decision of the Planning
Director have thirty days to appeal the decision to the BOA. Id.
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The ICA stated that “[t]he time limit for the taking of an appeal
established by statute is mandatory and if not complied with, the
appeal must be dismissed.” Id.
The ICA determined that “Kellberg did not file a
petition for an appeal until the circuit court issued its July
24, 2009 order ‘remanding’ the case to the BOA.” Id. at *3.
According to the ICA, the circuit court’s decision to deny the
County Defendants’ Second Motion to Dismiss for failure to
exhaust administrative remedies was based “on the March 2006
communications between Kellberg and the BOA.” Id. The ICA
disagreed with the circuit court’s interpretation of the BOA’s
letter as foreclosing Kellberg’s right to appeal. Id. at *3-4.
Instead, the ICA stated, “The BOA’s letter addressed Kellberg’s
right to appeal the July 11, 2005 subdivision approval only; it
did not preclude or otherwise address Kellberg’s right to appeal
any other decision of the Planning Director.” Id. at *4.
The ICA found that “[t]he Planning Director’s October
23, 2006 letter, in which he refused to reconsider the
subdivision approval despite the error, constituted an appealable
decision from which Kellberg should have appealed to the BOA” but
“he failed to pursue the available administrative procedures by
appealing to the BOA within the time limit.” Id.
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Based on the foregoing, the ICA held that the circuit
court should have dismissed Kellberg’s action for lack of subject
matter jurisdiction. Id. The ICA vacated the circuit court’s
Final Judgment and remanded the case for an order of dismissal.
Id. The ICA’s Judgment on Appeal was filed on July 19, 2013.
F. Application
1.
On September 17, 2013, Kellberg timely filed his
Application to this court.13 Kellberg raises the following
questions presented for review:
1. Final Decision. Does the Director’s letter conceding
that 15 months earlier he erroneously approved a
subdivision, but which states “I am not going to do anything
to undo this situation at this time,” constitute a new final
decision that must be appealed to the BOA, and which
supplants the existing right to judicial review of the
original final decision approving the subdivision?
2. Due Process Notice. If the Director’s letter was a new
final decision supplanting the original final subdivision
decision that must have been appealed to the BOA within 30
days in order to preserve the right to judicial review, did
the Director have a due process obligation to give Kellberg
notice?
Kellberg maintains that under the exhaustion of
administrative remedies doctrine, the administrative review
process “must be apparent, straightforward, and understandable to
the people required to utilize it.” Kellberg argues that the ICA
committed two grave errors in this regard.
13
Kellberg’s motion for extension of time was filed and granted on
August 7, 2013.
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a.
“First, the BOA has jurisdiction to review only ‘final
decisions’ by the Director, and by definition there can be only a
single ‘final’ decision approving a subdivision application that
can be appealed to the BOA.” In this case, the “final decision”
was the Director’s approval of the subdivision in 2005. Kellberg
thus maintains that any subsequent decisions made by the Planning
Director did not have to be appealed to the BOA.
Kellberg argues that the ICA erroneously held that he
was required to have appealed from the Director’s October 2006
letter, which was written fifteen months after the final
subdivision approval. Accordingly, the ICA effectively concluded
that the letter, and not the Director’s July 2005 subdivision
approval, was the “true final decision on the matter,” or
alternatively that there can be more than one “final decision.”
Kellberg contends that the “ICA’s conclusion rests on
the erroneous foundation that all decisions of the Director must
be appealed to the BOA.” The ICA thus erroneously held that the
BOA Rules allow for appeals of “any” decision of the Director in
the administration of the zoning and subdivision chapters of the
County Code.
Additionally, Kellberg argues that the Director’s 2005
approval of the subdivision was “final” under the plain meaning
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of the word, as it was “the last step in the process of approving
subdivisions, and nothing remained for the Director to do.” By
contrast, the Director’s 2006 letter was not “final” “because it
left open the possibility of future action (‘I am not going to do
anything to undo this situation at this time’).” Moreover, the
letter was not a “decision” regarding the subdivision but “simply
a statement 15 months after the fact that the Director was going
to do nothing.”
Kellberg concludes that the ICA’s decision creates a
situation of “administrative chaos,” “in which every decision
made by the Director potentially must be reviewed by the BOA
within 30 days, and no final decision can ever be understood to
be truly final because a later decision, even a decision to do
nothing must be appealed.”
b.
With respect to the second issue, Kellberg argues that
even if the October 2006 letter was a new “final” decision
requiring Kellberg to appeal anew to the BOA, “the Director had a
due process obligation to inform Kellberg of his right to appeal
this new decision,” particularly in light of the Planning
Department and the BOA previously informing him that no appeal
was possible.
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Kellberg contends that the BOA’s thirty-day time limit
for appeals is mandatory, exclusive, and short. When a statute
or rule provides for such shortened appeals periods, Kellberg
argues that the due process clauses of the state and federal
Constitution require an agency to give express and conspicuous
notice of the time period and of avenues for redress.
Kellberg notes that the Director’s letter only
acknowledged that a mistake had been made and did not mention the
BOA appeals process or the thirty-day limitations period. There
was also no notice in the letter that the letter constituted a
“final decision.”
In addition, Kellberg argues that the property interest
jeopardized by the Director’s lack of notice is “constitutionally
significant,” and the burden on the Director to inform recipients
that a letter represents a “final decision” that they must appeal
to the BOA within thirty days is “comparatively small.” Kellberg
notes in this regard that the City and County of Honolulu
includes “clear and conspicuous notice” that its letters must be
appealed to the Zoning Board of Appeals.
Kellberg thus concludes that assuming the Director’s
October 2006 letter was the exclusive means for him to challenge
the 2005 subdivision approval, the Director nevertheless failed
his due process duty to inform Kellberg. Accordingly, “the letter
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did not affect Kellberg’s right to institute a lawsuit to
invalidate the subdivision approval.”
Consequently, Kellberg requests that this court
“reverse the ICA’s opinion and judgment, and remand the case [to
the ICA] for consideration of the remaining issues raised by
Kellberg’s appeal.”
2.
The County Defendants respond by maintaining that
Kellberg failed to file an appeal “of the Planning Director’s
decision to recognize six pre-existing lots or grant final
subdivision approval.” Kellberg also failed to appeal the BOA’s
decision to dismiss the appeal following the circuit court’s
order.
Additionally, the County Defendants argue that the
Director’s October 23, 2006 letter “clearly stated no further
action would be taken” and thus constituted a final appealable
order under the BOA Rules.
II. STANDARD OF REVIEW
The existence of jurisdiction is a question of law that we
review de novo under the right/wrong standard. Questions
regarding subject matter jurisdiction may be raised at any
stage of a cause of action. When reviewing a case where the
circuit court lacked subject matter jurisdiction, the
appellate court retains jurisdiction, not on the merits, but
for the purpose of correcting the error in jurisdiction. A
judgment rendered by a circuit court without subject matter
jurisdiction is void.
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Lingle v. Haw. Gov't Emps. Ass'n, 107 Hawai#i 178, 182, 111 P.3d
587, 591 (2005) (quoting Amantiad v. Odum, 90 Hawai#i 152, 158-
59, 977 P.2d 160, 166-67 (1999)).
III. DISCUSSION
A.
The first issue raised by Kellberg in his Application
is whether the Planning Director’s October 23, 2006 letter
constituted a final decision that was required to be appealed to
the BOA.
1.
“Courts have developed two principal doctrines to
enable the question of timing of requests for judicial
intervention in the administrative process to be answered: (1)
primary jurisdiction; and (2) exhaustion of administrative
remedies.” Kona Old Hawaiian Trails Grp. v. Lyman, 69 Haw. 81,
92-93, 734 P.2d 161, 168 (1987) (quotation marks and brackets
omitted). “These principles are doctrines of comity designed to
outline the relationship between courts and administrative
agencies and secure their proper spheres of authority.” Leone v.
Cnty. of Maui, 128 Hawai#i 183, 192, 284 P.3d 956, 965 (App.
2012). Pacific Lightnet, Inc. v. Time Warner Telecom, Inc., __
Hawai#i __, __ P.3d __, at *13 (Haw. Dec. 18, 2013) (“under the
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doctrine of primary jurisdiction, the court and the agency share
concurrent jurisdiction over the matter”).
The doctrine of exhaustion of administrative remedies
provides that “where a claim is cognizable in the first instance
by an administrative agency alone,” “[j]udicial review of agency
action will not be available unless the party affected has taken
advantage of all the corrective procedures provided for in the
administrative process.” Kona Old, 69 Haw. at 93, 734 P.2d at
169 (quotation marks and citations omitted). “As such, the
doctrine of exhaustion of remedies temporarily divests a court of
jurisdiction.” Williams v. Aona, 121 Hawai#i 1, 9, 210 P.3d 501,
509 (2009).
In contrast, the doctrine of primary jurisdiction
“applies where a claim is originally cognizable in the courts,
and comes into play whenever enforcement of the claim requires
the resolution of issues which, under a regulatory scheme, have
been placed within the special competence of an administrative
body.” Kona Old, 69 Haw. at 93, 734 P.2d at 168 (quotation
marks, ellipses and brackets omitted) (emphasis added). “When
this happens, the judicial process is suspended pending referral
of such issues to the administrative body for its views,” and the
courts are effectively “divested of whatever original
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jurisdiction they would otherwise possess.” Id. at 93, 734 P.2d
at 168-69 (quotation marks omitted).
In this case, the ICA held that the County Code and BOA
Rules “expressly provide an administrative process for resolving
Kellberg’s claims challenging the Planning Director’s decision to
grant the subdivision approval.” 2013 WL 3156015, at *3. The
ICA then applied the doctrine of exhaustion of administrative
remedies and held that the circuit court should have dismissed
Kellberg’s action for lack of subject matter jurisdiction because
Kellberg “failed to pursue the available administrative
procedures by appealing to the BOA within” thirty days of
“receiv[ing] an appealable decision in the form of the Planning
Director’s October 23, 2006 letter.” Id. at *4.
a.
The basic premise of the ICA’s decision is that the
Planning Director’s October 23, 2006 letter constituted an
appealable “decision” within the meaning of County Code § 23-5
and BOA Rules Part 8.
“When interpreting [county charters], municipal
ordinances, and administrative rules, the general principles of
statutory construction apply.” Hoku Lele, LLC v. City & Cnty. of
Honolulu, 129 Hawai#i 164, 167, 296 P.3d 1072, 1075 (App. 2013).
In statutory construction, “our foremost obligation is to
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ascertain and give effect to the intention of the legislature,
which is to be obtained primarily from the language contained in
the statute itself.” Paul v. Dep’t of Transp., 115 Hawai#i 416,
426, 168 P.3d 546, 556 (2007) (quoting Gray v. Admin. Dir. of the
Court, 84 Hawai#i 138, 148, 931 P.2d 580, 590 (1997)).
In this case, both the County Code and the BOA Rules §§
8-2 and 8-3 provide that an aggrieved person may appeal “the
decision” of the Planning Director to the BOA within thirty days
after the decision. County Code § 23-5 (2005) provides that
“[a]ny person aggrieved by the decision of the [planning director
of the County] in the administration or application of this
chapter, may, within thirty days after the director’s decision,
appeal the decision to the board of appeals.14 (Emphasis added).
Similarly, the BOA Rules provide that “[a]ny person aggrieved by
the decision of the Director in the administration or application
of the Zoning, [and] Subdivision . . . chapters of the Code . . .
14
§ 23-5 provides that upon appealing the director’s decision to the
BOA, the BOA may take the following actions:
The board of appeals may affirm the decision of the director, or
it may reverse, modify or remand the decision if the decision is:
(a) In violation of this chapter or other applicable law; or
(b) Clearly erroneous in view of the reliable, probative and
substantial evidence on the whole record; or
(c) Arbitrary, or capricious, or characterized by an abuse of
discretion or clearly unwarranted exercise of discretion.
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may appeal the decision to the Board,”15 § 8-2 (emphasis added),
so long as the appeal is “filed within thirty days after the
decision.”16 § 8-3.
Neither the County Code nor the BOA Rules defines the
phrase “the decision.” However, the County Charter, which
establishes the BOA and its jurisdiction,17 specifies that the BOA
“shall: (a) Hear and determine appeals from final decisions of
the planning director or the director of public works regarding
matters within their respective jurisdictions.”18 § 6-9.2 (2010)
(emphasis added). “[A]n ordinance must conform to, be
subordinate to, not conflict with, and not exceed the charter[.]”
Fasi v. City Council of City & Cnty. of Honolulu, 72 Haw. 513,
518, 823 P.2d 742, 744 (1992) (quotation marks and citation
15
“Aggrieved person” is defined pursuant to County Code § 25-2-20
(2005). BOA Rules § 8-2. § 25-2-20 provides:
(b) A person is aggrieved by a decision of the director if:
(1) The person has an interest in the subject matter of the
decision that is so directly and immediately affected, that
the person’s interest is clearly distinguishable from that
of the general public; and
(2) The person is or will be adversely affected by the
decision.
16
The BOA Rules are available at
http://records.co.hawaii.hi.us/Weblink8/DocView.aspx?dbid=1&id=34351.
17
The BOA consists of seven members appointed by the mayor and
confirmed by the County council. County Charter § 6-9.2.
18
The 2010 County Charter is available at
http://hawaii.gov/elections/charters/charter_hawaii.pdf.
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omitted). Accordingly, the County Code and the BOA Rules must be
interpreted in a manner consistent with the Charter.
The County Charter requires appeals to be taken from
the Planning Director’s “final decisions.” The word “final”
means “not to be altered or undone,” “decisive” and “conclusive.”
Webster’s Third New Int’l Dictionary 851 (1993) [hereinafter
Webster’s]. See Black’s Law Dictionary 705 (9th ed. 2009)
[hereinafter Black’s Law] (defining “final” to mean “not
requiring any further judicial action by the court to determine
the matter litigated; concluded”).
Although the BOA Rules and the County Code do not use
the term “final decision,” the word “decision” alone also
connotes finality. “Decision” is defined to mean “the act of
deciding; specif: the act of settling or terminating,” “a
determination arrived at after consideration,” “the quality of
being decided,” and “the act of forming an opinion or of deciding
upon a course of action.” Webster’s, supra at 585. In the legal
context, “decision” means “[a] judicial or agency determination
after consideration of the facts and the law; esp., a ruling,
order, or judgment pronounced by a court when considering or
disposing of a case.” Black’s Law, supra at 467.
Thus the word “decision,” understood in its ordinary
and popular meaning, connotes a state of being final, settled or
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complete, and therefore has the same essential meaning as the
phrase “final decision.” See HRS § 1-14 (2009) (“The words of a
law are generally to be understood in their most known and usual
signification, without attending so much to the literal and
strictly grammatical construction of the words as to their
general or popular use or meaning.”); Saranillio v. Silva, 78
Hawai#i 1, 10, 889 P.2d 685, 694 (1995) (“Under general
principles of statutory construction, courts give words their
ordinary meaning unless something in the statute requires a
different interpretation.”).
Accordingly, when reading the County Code and BOA Rules
in concert with the County Charter, it is clear that only the
Planning Director’s “final decision” is appealable to the BOA.
Given that a “final decision” settles a matter, it is implicit
that there can only be a single “final decision” that may be
appealed. Additionally, County Code § 23-5 and BOA Rules § 8-2
refer to “the decision” in the singular.
b.
In this case, the subdivision challenged in Kellberg’s
Complaint19 was approved pursuant to the Planning Director’s July
11, 2005 letter to Fuke, which provided, “FINAL SUBDIVISION
19
Kellberg alleged in his Complaint that he was a “person aggrieved
by the decision of [the Planning Director] to approve SUB-05-00064.”
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APPROVAL NO. SUB-05-000064.” The letter stated, “Please be
informed that final subdivision approval for recordation is
hereby granted to the final plat map[.]” (Emphasis added). The
Planning Director’s decision to approve the subdivision was
understood by all interested persons to settle the matter of the
subdivision and to “decid[e] upon a course of action” with
respect to the Subject Property. Cf. Webster’s, supra, at 595.
Accordingly, Pruglo and Fuke acted in reliance on the
Director’s final approval, selling the first subdivision lot in
October 2005, and thereafter submitting a second subdivision
application in April 2006, which proposed consolidating lots that
were created by the July 11 subdivision approval.
Furthermore, the County Code consistently treats the
Director’s final plat approval as the “final decision” on a
subdivision application. For example, the final plat approval
triggers the owner’s ability to convey the land, to offer to
sale, lease or rent any subdivision, and to enter into options or
agreements for the purchase, sale, leasing or rental of the land.
§ 23-76 (2005) (“Land shall not be offered for sale, lease or
rent in any subdivision, nor shall options or agreements for the
purchase, sale, leasing or rental of the land be made until
approval for recordation of the final plat is granted by the
director.”). § 23-75 (2005) provides that “[n]o change in a
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subdivision, or in the plan of a subdivision, already approved,
may be made without the approval of the director.” (Emphasis
added).
The Code provides for the correction of “any error in
the dimensions or other discrepancies” contained in the final
plat, subsequent to final approval, but does not indicate that
any corrections have the effect of nullifying the final approval.
§ 23-74(c) (2005) (“The approval for recordation of the final
plat by the director shall not relieve the subdivider of the
responsibility for any error in the dimensions or other
discrepancies. Such errors or discrepancies shall be revised or
corrected, upon request, to the satisfaction of the director.”).
In fact, in 2006, County Code § 23-73 was amended to provide:
“The director’s issuance of final subdivision approval shall be
valid despite the absence of technical information as required by
section 23-69(1) and (3), or the absence of similar technical but
non-substantive information required by sections 23-69 and 70.”
County of Hawai#i, Haw., Ordinance No. 06-104 (Jul. 3, 2006),
available at
http://records.co.hawaii.hi.us/Weblink8/0/doc/30642/Page1.aspx.
Accordingly, although the subdivider in this case
submitted a revised final plat map in December 2006, which was
recertified on January 19, 2007, the County Defendants maintained
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that the revised map was “submitted to correct a deficiency” with
respect to showing the location of existing dwellings and did not
have the effect of “reevaluat[ing] the already-approved
subdivision.”20 In accordance with its position, the County
Defendants declared that “Final Subdivision Approval was
previously issued July 11, 2005.”
This position was further reflected in the BOA
Chairman’s March 21, 2006 letter to Kellberg, which stated,
“According to our records, the Planning Director granted Final
Subdivision Approval on July 11, 2005 for the 6-lot subdivision
of the subject property.” In the next sentence, the BOA Chairman
wrote, “For your information, Section 8-3 [of the BOA Rules]
states that an appeal from the decision of the Planning Director
shall be filed within thirty (30) days after the decision.”
Thus, the indisputable inference is that the Chairman considered
the Director’s final subdivision approval to be “the decision”
referenced in § 8-3.
Under these circumstances, it is clear that the July
11, 2005 subdivision approval was the Director’s final,
appealable “decision” within the meaning of County Code § 23-5
and BOA Rules Part 8.
20
County Code § 23-64 (Supp. 2006) provides that the preliminary
plat shall include information on the “location of all existing structures,”
“unless waived or deferred by the director.”
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c.
The ICA did not dispute that the Director’s July 11,
2005 subdivision approval constituted an appealable decision.
The ICA found that the BOA Chairman’s March 2006 letter to
Kellberg “addressed Kellberg’s right to appeal the July 11, 2005
subdivision approval only[.]” 2013 WL 3156015, at *4. However,
the ICA went on to find that the BOA’s letter “did not preclude
or otherwise address Kellberg’s right to appeal any other
decision of the Planning Director,” and the Director’s October
23, 2006 constituted a second appealable decision. Id. (emphasis
added).
First, as noted, only the Planning Director’s final
decision is appealable pursuant to the County Code, BOA Rules,
and County Charter. As Kellberg argues, if “any” decision of the
Planning Director triggered an appeal to the BOA, then
“administrative chaos” would result because “every decision made
by the Director potentially must be reviewed by the BOA within
thirty days, and no final decision can ever be understood to be
truly final because a later decision, even a decision to do
nothing must be appealed.” Thus, the ICA erred in determining
that Kellberg had a right to appeal “any other decision” of the
Planning Director in addition to the acknowledged final
subdivision approval.
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Second, the Director’s October 23, 2006 letter did not
constitute a final decision. The letter was sent over a year
after the final subdivision approval. In the letter, the
Director explained what had occurred with the Planning
Department’s determination of pre-existing lots, and
acknowledged, “As Mr. Kellberg correctly points out, there was a
mistake in the approval of that subdivision.” The Director then
wrote, “I am not going to do anything to undo this situation at
this time.” The Director explained, “Sub. 05-00064 has received
final subdivision approval and at least some of the lots have
been sold. Given that parcel 110 is physically separated from
the remainder of Sub. 05-00064, and from any property owned by
the subdivider, I cannot see a way to erase its separate
existence.” The Director concluded the letter by informing
Kellberg that any future correspondence from the Planning
Department concerning “Sub. 06-000333 and any revisions of Sub.
05-00064” would be sent to him.
The Director’s letter did not state that it constituted
a final decision on the subdivision approval, or alternatively
that it constituted a decision on a request for reconsideration
of the subdivision approval. Contrary to the ICA’s assertion, it
was not “clear [that] the Planning Director’s October 23, 2006
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letter constituted an appealable decision.” 2013 WL 3156015, at
*4.
Notably, the ICA did not explain what aspects of the
letter affirmatively made it “clear” that it constituted an
appealable decision. The ICA’s entire analysis consisted of
demonstrating that the Director’s letter was unlike the letters
at issue in Hoku Lele, LLC v. City & Cnty. of Honolulu, 129
Hawai#i 164, 296 P.3d 1072 (App. 2013),21 in the sense that the
Director did not “actively discourage[]” Kellberg from appealing
or “suggest[] the planning director could take further action
that would culminate in an appealable decision.” 2013 WL
3156015, at *4.
However, the fact that the Director did not “actively
discourage” Kellberg from appealing does not lead to the
conclusion that the Director’s letter constituted a final,
appealable decision.
Contrary to the ICA’s conclusion, an examination of the
Director’s letter demonstrates that there is nothing in the
21
In Hoku Lele, the plaintiff submitted a “zoning verification”
request to the city’s Department of Planning and Permitting, seeking
confirmation of the legality of the plaintiff’s property and certain buildings
on the property. 129 Hawai#i at 165, 296 P.3d at 1073. The Department’s
director response “actively discouraged [the plaintiff] from appealing to the
[Zoning Board of Appeals] by suggesting the director could take further action
and could change his position regarding [the plaintiff’s] right to retain
Buildings C and D through a determination on a variance application.” Id. at
165, 296 P.3d at 1077.
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letter to suggest that it constituted a separate appealable
decision from the July 11, 2005 “final subdivision approval.”
The most conclusive statement in the Director’s letter provides,
“I am not going to do anything to undo this situation at this
time.” However, the Director went on to explain that he could
not “undo” the situation because the subdivision had already
“received final subdivision approval and at least some of the
lots have been sold.” (Emphasis added). Thus, rather than
establishing a new decision, the Director’s October 23, 2006
letter reinforced the finality of the Director’s July 11, 2005
subdivision approval as the “final decision” on the subdivision.
The July 11, 2005 final subdivision approval therefore
constituted the Director’s final “decision” on the matter of the
subdivision. The Director’s October 23, 2006 letter did not have
the effect of supplanting the final subdivision approval and did
not constitute an appealable final “decision.” The ICA thus
erred by holding that Kellberg failed to exhaust available
administrative procedures based on the ICA’s determination that
the Director’s letter constituted an appealable decision.
2.
Under County Code § 23-5 and BOA Rules § 8-2 and § 8-3,
Kellberg was required to file an appeal with the BOA within
thirty days of the Planning Director’s final decision on July 11,
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2005. Prior to filing his Complaint with the circuit court,
Kellberg did not file such an appeal. As noted, generally the
doctrine of exhaustion of remedies requires an aggrieved party to
exhaust administrative remedies before seeking judicial review.
Kona Old, 69 Haw. at 93, 734 P.2d at 169.
However, the “doctrine of exhaustion is not absolute.”
Williams v. Aona, 121 Hawai#i 1, 11, 210 P.3d 501, 511 (2009).
See generally 2 Am. Jur. 2d Administrative Law § 478 (“Failure to
exhaust remedies is not an absolute bar to judicial consideration
and must be applied in each case with an understanding of its
purposes and of the particular administrative scheme involved.”).
This court has held that “‘[a]n aggrieved party need
not exhaust administrative remedies where no effective remedies
exist.” Williams, 121 Hawai#i at 11, 210 P.3d at 511 (quoting
Hokama v. Univ. of Haw., 92 Hawai#i 268, 273, 990 P.2d 1150, 1155
(1999)). Likewise, “[w]henever exhaustion of administrative
remedies will be futile it is not required.”22 Poe v. Haw. Labor
Relations Bd., 97 Hawai#i 528, 536, 40 P.3d 930, 938 (2002)
(quoting 4 Davis, Administrative Law Treatise § 26:11 (2d ed.
1983)) (quotation marks and brackets omitted).
22
“[T]he burden of proving that any particular administrative remedy
is futile rests with the litigant seeking to bypass it.” In re Doe, 96
Hawai#i 272, 287 n.20, 30 P.3d 878, 893 n.20 (2001).
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“Ordinarily, futility refers to the inability of an
administrative process to provide the appropriate relief.” In re
Doe Children, 96 Hawai#i 272, 287 n.20, 30 P.3d 878, 893 n.20
(2001). See e.g., Poe, 97 Hawai#i at 536-37, 40 P.3d at 938-39
(individuals who sue employers for breach of a collective
bargaining agreement need not exhaust remedies under that
agreement “when pursuing the contractual remedy would be
futile”); Haw. Insurers Council v. Lingle, 120 Hawai#i 51, 72,
201 P.3d 564, 585 (2008) (in suit challenging constitutionality
of statute requiring payment of fees to insurance commissioner,
commissioner would have been powerless to declare the fees
imposed to be unconstitutional or to provide a refund on that
basis).
It would appear self-evident that a party lacks an
effective administrative remedy in a situation where the party is
time-barred from appealing an administrative decision that the
party was never appropriately made aware of until after the time
for appeals had ended. If the party is not given notice that an
appealable administrative decision was made in the first
instance, then even the most sophisticated party who is aware of
the appeals process would be precluded from any opportunity to
timely appeal the decision. See Michael Asimow, Judicial Review:
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Standing and Timing, 27 Judicial Review of Agency Action 269
(1997) (“Where a litigant failed to exhaust a remedy because he
was not appropriately notified of its availability in time to use
the remedy, the failure to exhaust is excused.”).23
Washington courts have recognized the futility of an
administrative appeal in such circumstances, holding that a
party’s failure to exhaust administrative remedies will be
excused “if the aggrieved party has no notice of the initial
administrative decision or no opportunity to exercise the
administrative review procedures.” South Hollywood Hills
Citizens Ass’n for Pres. of Neighborhood Safety & Env’t v. King
Cnty., 677 P.2d 114, 118 (Wash. 1984) (en banc) (holding that
county ordinance requiring publication of plat approval and
posting of notices on property itself were constitutionally
sufficient to notify adjacent property owners). See Gardner v.
Pierce Cnty. Bd. of Com’rs, 617 P.2d 743, 745 (Wash. Ct. App.
1980) (exhaustion rule inapplicable where “[d]efendants
concede[d] that the County did not give notice of the negative
declaration when it was issued . . . , and there is nothing in
23
This report was prepared for the California Law Revision
Commission, an independent state agency. Cal. Gov’t Code § 8280. The
commission publishes its annual reports, recommendations and studies in
published bound volumes, available at http://www.clrc.ca.gov/Mreports-
publications.html. Asimow’s report to the Commission is available at
http://clrc.ca.gov/pub/BKST/BKST-Asimow5.pdf.
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the record . . . to indicate that [the plaintiff] had notice of
the declaration or an opportunity to challenge it[.]”).
In this case, the subdivision application, submitted
April 7, 2005, was approved by the Planning Director on July 11,
2005, through a letter sent directly from the Director to Fuke.
At the time of the approval, the County Code did not require any
notice to adjoining property owners of pending subdivision
applications or final approval of applications.24 Kellberg lacked
knowledge of the subdivision application and approval until
August 11, 2005, when he learned of the subdivision by chance,
through observing a “for sale” sign on the Subject Property and
being contacted by a realtor offering to sell him a subdivision
lot. By that time, the thirty-day time period for appealing the
Director’s decision to the BOA had already passed the day before,
on August 10, 2005. Under these circumstances, where Kellberg
failed to timely appeal the Director’s final subdivision approval
because he had no opportunity to receive notice of the approval,
24
Subsequently on September 18, 2005, the County passed an ordinance
adding County Code § 23-58.1, requiring the subdivision applicant to post a
sign on the subject property that would notify the public of the application
and remain on the property until final approval, or until the application has
been rejected or withdrawn. County of Hawai#i, Haw., Ordinance No. 05-135
(Sept. 18, 2005), available at
http://records.co.hawaii.hi.us/Weblink8/0/doc/27823/Page1.aspx.
In 2006, the County amended the County Code to add § 23-58.2,
requiring the director to publish, on a semi-monthly basis, a list of all
subdivision applications. County of Hawai#i, Haw., Ordinance No. 06-104 (Jul.
3, 2006), available at
http://records.co.hawaii.hi.us/Weblink8/0/doc/30642/Page1.aspx.
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the exhaustion doctrine should not be applied to preclude
Kellberg’s appeal.
Even if Kellberg had immediately filed an appeal with
the BOA on August 11, 2005, when he first learned of the
subdivision approval, his appeal would have been dismissed as
untimely. This was confirmed by the BOA Chairman’s March 21,
2006 letter, which was written in response to Kellberg’s request
for information regarding the BOA’s appeals process. The
Chairman wrote that final subdivision approval had already been
granted on July 11, 2005 and that any appeal from the Director’s
decision must be filed within thirty days of the decision.
The County Defendants have not claimed that Kellberg
had any way of knowing that the subdivision had been approved on
July 11, 2005. The County Defendants have also not addressed
what effect such lack of knowledge had on Kellberg’s inability to
exhaust administrative remedies. Instead, the County Defendants
sought to avoid the issue of whether Kellberg received any notice
of the final subdivision approval by arguing that they considered
the Director’s October 23, 2006 letter to be the “final decision”
from which Kellberg should have appealed.
However, as noted, the Director’s October 2006 letter
did not constitute an appealable decision. Accordingly, Kellberg
was only able to appeal from the July 11, 2005 final subdivision
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approval, of which he had received no notice within the period
allowed for an appeal. Because the County Code and the BOA Rules
did not require any such notice, the law did not provide Kellberg
with a meaningful opportunity to appeal the Planning Director’s
decisions. See Pele Defense Fund v. Puna Geothermal Venture, 9
Haw. App. 143, 151, 827 P.2d 1149, 1154 (1992) (“Where the
administrative machinery is not provided, the power of the court
is not ousted by a claim of failure to exhaust administrative
remedies.”). Thus, Kellberg’s failure to timely appeal the final
subdivision approval to the BOA is excused.
Furthermore, this court has held that the exhaustion
doctrine may be excused when the policy interests underlying the
doctrine, which involve interests of comity between courts and
administrative agencies, are “outweighed by other interests.”
Williams, 121 Hawai#i at 11, 210 P.3d at 511. See South
Hollywood Hills Citizens Ass’n, 677 P.2d at 118 (“Washington
courts have recognized exceptions to the exhaustion requirement
in circumstances in which these policies are outweighed by
consideration of fairness or practicality.”); Lochsa Falls,
L.L.C. v. State, 207 P.3d 963, 968 (Idaho 2009) (the court has
recognized exception to exhaustion doctrine “when the interests
of justice so require”).
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In this case, although the time for appeal had already
passed by the time Kellberg learned of the final subdivision
approval, Kellberg diligently made multiple efforts to correct
what he believed to be serious errors and omissions in the
subdivision approval. Kellberg immediately began attempting to
contact the Planning Director after learning about the
subdivision, visiting the Planning Department office the next day
and leaving messages for the Director to contact him. When the
Director failed to contact him as requested, Kellberg wrote his
first letter on August 16, 2006, detailing the errors he observed
in the subdivision approval. Kellberg continued attempting to
contact the Director to no avail, and wrote a second letter to
the Director on January 17, 2006.
In February and March 2006, Kellberg contacted
Corporation Counsel, the BOA, and the Mayor regarding his
concerns about the subdivision approval. Corporation Counsel
responded by suggesting that Kellberg simply continue attempting
to contact the Director and consider appealing to the BOA,
although the BOA subsequently informed him that the time for an
appeal had already passed. On June 19, 2006, Kellberg wrote a
third letter to the Director, and Kellberg’s counsel wrote a
fourth letter to the Director on Kellberg’s behalf on August 25,
2006. Despite Kellberg’s significant efforts, the first and only
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substantive response Kellberg received in regard to his concerns
with the subdivision approval was the Director’s October 23, 2006
letter.
Under these circumstances, it would be manifestly
unfair to apply the exhaustion doctrine to dismiss Kellberg’s
Complaint simply because he failed to appeal the July 11, 2005
decision within thirty days. The doctrine of exhaustion is one
of comity between the courts and the agencies. “Comity may be
broadly defined as ‘reciprocity,’” or the principle that courts
will give effect to the decisions of agencies “out of deference
and mutual respect.” Chun v. Bd. of Trs. of Emps.’ Ret. Sys. of
State of Haw., 92 Hawai#i 432, 446, 992 P.2d 127, 141 (2000)
(quotation marks and citations omitted).
This case does not implicate any concerns of comity
between the circuit court and the BOA, as the County Defendants’
actions and the BOA’s procedures had the effect of precluding
Kellberg entirely from filing an appeal of the Director’s final
subdivision approval. Similarly, exercising jurisdiction over
Kellberg’s Complaint raises no concerns that it will encourage
the “deliberate flouting of administrative processes,” or
infringe on “agency autonomy” by preventing the BOA from
“apply[ing] its expertise . . . and correct[ing] its own errors.”
Andrade v. Lauer, 729 F.2d 1475, 1484 (D.C. Cir. 1984). On the
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contrary, the circuit court expressly gave the BOA the
opportunity to address the merits of Kellberg’s claims and to
correct any errors of the Planning Director with respect to the
subdivision approval. Rather than taking the opportunity to
apply its expertise, however, the BOA dismissed Kellberg’s
Petition for untimeliness.
The purpose of the exhaustion requirement is “to
redirect grievances for their proper resolution, not to preclude
them altogether.” Hokama, 92 Hawai#i at 275, 990 P.2d at 1157.
From the time Kellberg learned of the final subdivision approval,
he was already precluded from an opportunity to appeal the
approval to the BOA because he was not notified of the approval,
and the applicable law at the time provided no mechanism for such
notification. When the circuit court sought to provide Kellberg
with an opportunity appeal to the BOA, the BOA dismissed his
appeal as untimely. Based on the foregoing, it cannot be said
that Kellberg had any meaningful administrative remedies left to
exhaust before filing his Complaint.
If the exhaustion doctrine were strictly and
mechanically applied in this case, then Kellberg would be left
without a remedy, prevented from any opportunity to redirect his
grievance for its proper resolution. Such a result would be
plainly inequitable under the circumstances. Cf. Hokama, 92
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Hawai#i at 275, 990 P.2d at 1157 (holding that twenty-day
limitations period for filing grievances under contract “should
not operate to automatically bar” the plaintiff’s claims where
the plaintiff’s failure to exhaust administrative remedies was
reasonable under the circumstances); Painters Dist. Council No.
2. v. Tiger Stripers, Inc., 582 F. Supp. 860, 863 (E.D. Mo. 1984)
(“[t]o now hold [the claimant] to the time period specified in
the contract for initiating the grievance procedure . . . would
neither be fair nor serve to further the purposes of the
exhaustion requirement,” where the claimant’s belief that the
administrative procedure “was neither mandatory nor available to
it” was “not unreasonable”).
Accordingly, Kellberg was not required to exhaust
administrative remedies by appealing the Director’s final
subdivision approval to the BOA within thirty days of the
decision. The ICA therefore erred by holding that Kellberg’s
Complaint should have been dismissed for lack of subject matter
jurisdiction based on the exhaustion doctrine.
3.
The County Defendants also argue that Kellberg
“deliberately failed to exhaust his administrative remedies”
because Kellberg did not appeal the BOA’s decision to dismiss his
Petition following the circuit court’s remand to the BOA.
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However, the circuit court’s order granting Kellberg’s
Motion for Partial Summary Judgment remanded the case to the BOA
specifically for the purpose of allowing Kellberg to appeal the
Director’s October 23, 2006 letter. The circuit court had
explained during the hearing on the motion that it wanted to
“flesh out the record at the County level,” and that the court
was “sending it back to the Board of Appeals to process”
Kellberg’s appeal. The court had also denied the County
Defendants’ Third Motion to Dismiss on the same day that it
entered its order remanding the case to the BOA.
Kellberg complied with the court’s order of remand by
filing his Petition with the BOA. Nevertheless, the BOA
dismissed the Petition based on Kellberg’s failure to file an
appeal with the BOA within thirty days of the Director’s letter.
Consistent with the circuit court’s order of remand,
after the BOA’s dismissal, Kellberg returned to the circuit court
and filed the Motion for Injunction, requesting an order granting
summary judgment on Count V of the Complaint and seeking an
injunction remanding the case to the Planning Department with
instructions to the Planning Director to bring the subdivision
into compliance with the County Code.
At the hearing on the Motion for Injunction, the
circuit court commented that the BOA dismissed the Petition for
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being untimely, even though the court had already held that “the
timing of all of these matters did not allow [Kellberg] . . . to
adequately lodge an appeal with the board[.]” The circuit court
again explained, “I was trying to give the county and the board
of appeals the opportunity [to provide remedies].” The court
further stated that it was “inclined to go ahead and grant the
motion[.]” However, five months later, the court filed orders
denying the Motion for Injunction, determining that Count V of
the Complaint was “moot” because the court’s order remanding the
case to the BOA “addressed Mr. Kellberg[’s] right and opportunity
to be heard referred to in Count V.” The court concluded that
Kellberg’s “failure to exhaust his administrative remedies
forecloses this court from further action in this matter.”
It is unclear how Kellberg’s actions could be
interpreted as failing to exhaust administrative remedies when
Kellberg complied with the court’s order remanding the case to
the BOA and the BOA undermined the purpose of the remand by
dismissing his Petition as untimely. The circuit court’s
consideration of Kellberg’s Complaint was still ongoing when the
court remanded the case to the BOA by granting Kellberg’s Motion
for Partial Summary Judgment as to Counts I, II and IV of the
six-count Complaint. As noted, the circuit court did not dismiss
the case when it remanded the case to the BOA; rather, it denied
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the County Defendants’ Third Motion to Dismiss. Thus it was
clearly contemplated that the parties would return to the circuit
court regardless of the outcome of the BOA appeal. It was
therefore unnecessary for Kellberg to have filed a separate
appeal of the BOA’s dismissal.
Filing such an appeal would also have been contrary to
the interests of judicial economy served by the exhaustion
doctrine. See Williams, 121 Hawai#i at 9, 210 P.3d at 509 (“In
general, the doctrine of exhaustion of remedies is a policy of
judicial economy.”).
“‘The exhaustion principle asks simply that the avenues
of relief nearest and simplest should be pursued first.’” Kona
Old, 69 Haw. at 93, 734 P.2d at 169 (quoting Moore v. City of
East Cleveland, 431 U.S. 494 (1977) (Burger, C.J., dissenting))
(ellipses omitted). In the context of this case, where the
circuit court ordered the BOA to consider Kellberg’s appeal, and
the BOA acted contrary to the order, the “nearest and simplest”
avenue of relief for Kellberg was to return to the circuit court
rather than filing an entirely new appeal. Accordingly, the lack
of a new appeal did not constitute a failure to exhaust
administrative remedies.
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B.
The second issue raised in Kellberg’s Application asks
whether, assuming that the Director’s October 23, 2006 letter was
an appealable final decision, the Director had a due process
obligation to give Kellberg notice that the letter constituted
such a decision.
As Kellberg notes, the court need not reach the second
question because the Director’s letter did not constitute an
appealable final decision. However, it is noted that while the
ICA did not address whether the Director’s letter satisfied due
process requirements, the ICA held that it was “clear” that the
Director’s letter constituted an appealable decision. 2013 WL
3156015, at *4.
In Hoku Lele, 129 Hawai#i 164, 296 P.3d 1072, the court
held that the Zoning Board of Appeals lacked jurisdiction to
review the planning director’s letters responding to requests for
zoning verification because the director lacked the ability to
render “decisions” on such requests. Id. at 167-68, 296 P.3d at
1075-76. However, the court found that even assuming the board
had jurisdiction to review the letters, “the procedure employed
by the [city planning department] in this case creates a
substantial risk of permanently depriving [the plaintiff] of its
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ability to seek review either at the ZBA or in court.” Id. at
168, 296 P.3d at 1076 (emphasis added).
In this regard, the Hoku Lele court noted that where
the time for appeal was “mandatory, exclusive, and short,” other
jurisdictions had held that “due process required the government
to provide affirmative notice” of the right to appeal. Id. The
court then found that the director’s letter in that case
“included several paragraphs explaining the variance application
process but failed to mention the ZBA” appeals process and
actively discouraged the plaintiff from appealing to the ZBA by
suggesting he could take further action and by suggesting a
variance application as a second option. Id. at 168-69, 296 P.3d
at 1076-77.
Similarly, even if the Planning Director’s October 2006
letter had constituted an appealable “decision,” the ICA’s
finding that the letter was “clear” in this regard is problematic
in two respects. First, it is unreasonable to expect the
recipient of the Director’s correspondence to know that any
casual conclusion or observation (“I am not going to do anything
to undo this situation at this time”) may constitute a final
appealable decision. Second, the difficulty of timely appealing
to the BOA from such correspondence is compounded when
considering that the time for appeals is relatively short; only
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thirty days from the time of the Director’s decision. These
challenges “create[] a substantial risk of permanently depriving”
the recipient of his or her ability to seek timely review through
the BOA. Hoku Lele, 129 Hawai#i at 168, 296 P.3d at 1076.
As noted by Kellberg, the burden on the Director to
inform recipients that a letter represents a “final decision”
that must be appealed to the BOA within thirty days is minimal
when considering the interests of the recipients. For example,
Kellberg argues that the City and County of Honolulu clearly
states in its letters that the Planning Director has reached a
decision, which may be appealed to the Zoning Board of Appeals
within thirty calendar days.
Providing notice that the Director’s letter constitutes
a final appealable decision is consistent with the exhaustion
doctrine. In order for the doctrine to apply, “[t]he statute,
ordinance or regulation under which the agency exercises its
power must establish ‘clearly defined machinery for the
submission, evaluation and resolution of complaints by aggrieved
parties.’” Pele Defense Fund v. Puna Geothermal Venture, 9 Haw.
App. 143, 152, 827 P.2d 1149, 1154 (App. 1992) (quoting
Rosenfield v. Malcolm, 421 P.2d 697, 701 (Cal. 1967)) (emphasis
added). Cf. Haw. Blind Vendors Ass’n v. Dep’t of Human Servs.,
71 Haw. 367, 374, 791 P.2d 1261, 1265 (1990), overruled on other
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grounds by Tamashiro v. Dep’t of Human Servs., 112 Hawai#i 388,
146 P.3d 103 (2006) (holding that plaintiffs were not time barred
from requesting an agency hearing because the agency process was
not “of such a nature as to impress fully upon the litigant the
opportunity for recourse it supplies and the consequence of
failure to seek such recourse”).
If the goal of the exhaustion doctrine is to redirect
grievances to their proper forum, then such a goal is not served
by fostering uncertainty over the Director’s decisions and the
BOA’s process for administrative review. Rather, claimants,
agencies, and courts alike benefit when the process for agency
review is clearly articulated so that claimants can fairly and
efficiently resolve their disputes without resorting to the
courts.
Similarly, providing such notice in the Planning
Director’s communications would also be consistent with basic
principles of due process, which generally provide that the right
to be heard is meaningless without being given the information
necessary to exercise that right. Cf. Brody v. Village of Port
Chester, 434 F.3d 121, 130-32 (2d Cir. 2005) (notice of
condemnation procedures “sent to affected property owners must
make some conspicuous mention of the commencement of the thirty-
day review period to satisfy due process”); Town of Randolph v.
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Estate of White, 693 A.2d 694, 696 (Vt. 1997) (“The right to be
heard is worth little unless one is informed that the matter is
pending and can choose ‘whether to appear or default, acquiesce
or contest.’”) (quoting Mullane v. Central Hanover Bank & Trust
Co., 339 U.S. 306, 314 (1950)); Memphis Light, Gas & Water Div.
v. Craft, 436 U.S. 1, 13 (1978) (municipal utility’s notice of
termination of utility service was not reasonably calculated to
inform customers of the availability of an opportunity to present
their objections, where the “final notice” simply stated that
payment was overdue and that service would be discontinued if
payment was not made).
The record in this case demonstrates that the errors
resulted from Kellberg’s lack of notice as to the Director’s
final subdivision approval, and confusion over the nature of the
Director’s October 2006 letter. As noted, the County Code now
includes mechanisms for providing public notice of subdivision
applications and final approval.25 In order to prevent future
misunderstandings over the significance and effect of the
Director’s statements and correspondence, it would be beneficial
for the Planning Director to clearly indicate when an appealable
“decision” has been made and how an interested person may
challenge that decision. In addition to being consistent with
25
See supra note 24.
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the doctrine of exhaustion of remedies and the principles of due
process, such efforts would impose only a minimal burden on the
Director while having the significant benefit of promoting
clarity in the review process. Such clarity would help to ensure
that grievances are actually resolved through their proper forum
rather than precluded due to lack of notice and confusion over
the review process.
IV. CONCLUSION
For the reasons set forth in this opinion, we vacate
the ICA’s July 19, 2013 Judgment on Appeal and remand the case to
the ICA for consideration of the remaining issues raised by
Kellberg in his appeal to the ICA.
Robert H. Thomas and /s/ Mark E. Recktenwald
Mark M. Murakami
for petitioner /s/ Paula A. Nakayama
Michael J. Udovic /s/ Simeon R. Acoba, Jr.
for respondent
/s/ Sabrina S. McKenna
/s/ Richard W. Pollack
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