Hsiung v. City and County of Honolulu

378 F. Supp. 2d 1258, 2005 U.S. Dist. LEXIS 15110, 2005 WL 1719392
CourtDistrict Court, D. Hawaii
DecidedJuly 19, 2005
DocketCV 05-00104DAE-LEK
StatusPublished
Cited by1 cases

This text of 378 F. Supp. 2d 1258 (Hsiung v. City and County of Honolulu) is published on Counsel Stack Legal Research, covering District Court, D. Hawaii primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hsiung v. City and County of Honolulu, 378 F. Supp. 2d 1258, 2005 U.S. Dist. LEXIS 15110, 2005 WL 1719392 (D. Haw. 2005).

Opinion

ORDER DENYING PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT

DAVID ALAN EZRA, Chief Judge.

The Court heard Plaintiffs’ Motion for Summary Judgment on June 22, 2005. Martin Anderson, Esq., and Joachim P. Cox, Esq., appeared at the hearing on behalf of Plaintiffs; Deputies Corporation *1260 Counsel Don S. Kitaoka, Derek T. Maye-shiro, and Paul M. Iguchi appeared at the hearing on behalf of Defendant. After reviewing the motion and the supporting and opposing memoranda, the Court DENIES Plaintiffs’ Motion for Summary Judgment.

BACKGROUND

Plaintiffs, who hold leasehold interests in residential condominiums at a condominium complex on Kahala Beach, have sued Defendant, the City and County of Honolulu (“the City”), seeking to invalidate a city ordinance that Plaintiffs claim violates the Contracts Clause of the United States Constitution.

Plaintiffs are owners of leasehold interests in a condominium complex on Kahala Beach located at 4999 Kahala Avenue in Honolulu, Hawaii. That property is owned in fee simple by the Bishop Estate (“Kamehameha Schools”). According to Plaintiffs’ complaint, they- each entered into contracts with the City and County of Honolulu (“the City”) in which each party agreed to seek diligently to acquire for Plaintiffs an undivided fee simple interest in the real property at Kahala Beach. Plaintiffs each paid the City $1,000 in consideration, and in return, the City agreed as follows:

The City shall convey to the Buyer by Quitclaim Deed (a) all of its right, title and interest in (i) the Unit and all limited common elements appurtenant to the Unit, and (ii) the undivided percentage interest in the real property and other common elements upon which the Unit is situated and (b) all of its right, title and interest in Buyer’s Condominium Conveyance Document (“Condominium Conveyance Document”) of the Unit and the real property (“Real Property”).

(Def. Memo, in Opp’n, Ex. B.) These actions were to be undertaken after the City acquired the property through its power of eminent domain, pursuant to Chapter 38 of the Revised Ordinances of Honolulu 1990 and the Rules for Residential Condominium, Cooperative and Planned Development Leasehold Conversion.

In 1997, pursuant to Chapter 38, the City first attempted on behalf of Plaintiffs to acquire Kamehameha Schools’ fee interest underlying the lessees’ leasehold units. In the City’s first attempt at condemnation, there were only 23 applicants for leasehold conversion from the 196 units in the condominium complex. Two decisions of the Hawaii Supreme Court ultimately invalidated the City’s designation of these 23 Kahala Beach units for condemnation. Coon v. City and County of Honolulu, 98 Hawai'i 233, 47 P.3d 348 (2002); City and County of Honolulu v. Ing, 100 Hawai'i 182, 58 P.3d 1229 (2002). The Hawaii Supreme Court held that the 23 lessees did not satisfy the minimum number of applications required for condemnation; the court found Chapter 38 to require, given the number of condominium units in the development, 25 applicants.

After Coon and Ing, the City again sought condemnation of the units on behalf of Plaintiffs, and filed a complaint seeking condemnation on February 14, 2003, in Hawaii state court. In the second action, 31 applicants participated; 15 of these applicants were in the first action. On March 4, 2004, the state court judge ruled that several lessees were not qualified applicants, and therefore Plaintiffs failed to maintain continuously the 25 units required under Chapter 38. The case was dismissed, and an appeal of the dismissal is pending before the Hawaii Supreme Court in the consolidated Ing cases.

On August 2, 2004, Honolulu City Council Member Mike Gabbard introduced City Council Bill 04-53 (“Bill 53”), which was written to repeal Chapter 38. In section 1 of bill, the City Council issued the following findings:

*1261 The council understands that the use of eminent domain should not be taken lightly and must be justified by a valid public purpose. Section 3-110 of the Revised Charter of the City and County of Honolulu (“Charter”) states: “The council shall by resolution determine and declare the necessity of taking property for public purposes, describing the property and stating the uses to which it shall be devoted.” Article I, Section 20 of the Hawaii Constitution. also states that private property shall not be taken for public use without just compensation. Thus, the exercise of eminent domain must be supported by (1) a valid public purpose and (2) just compensation. Under Hawaii law, the council has the discretion whether or not to exercise the power of eminent domain. The city has always taken the position that the eoun-cil has the ultimate power to condemn.
The public purposes of' Chapter 38 were set forth in detail in Ordinance 91-95. According to Ordinance 91-95, the purpose of Chapter 38 was to provide affordable housing and to strengthen the economy through fee ownership. Ordinance 91-95 lists “runaway land prices,” “shortage of fee simple residential condominiums,” “artificial inflation' of land values,” “lessees forced to accept long-term leases ... which contains terms and conditions which are financially disadvantageous to them,” “land values, artificially inflated by concentrated or single ownership,” and “potential for economic instability and disruption on Oahu” as public purpose furthered by Chapter 38.
The council finds that mandatory conversion of multi-family residential leaseholds under Chapter 38 is no longer needed to assuage the social and economic problems mentioned in Ordinance 91-95 and, therefore, no longer advances a public purpose for which the city should exercise its extraordinary powers of condemnation. The social and economic problems listed as the public purposes furthered by Chapter 38 do not exist .today to the same extent as they may have existed in 1991.
The council further finds that a lessee purchasing a residential leasehold unit knew or should have known about the negative aspects of the lease prior to the purchase. Since 1990, such a lessee should have received a copy of the underlying lease. Since 1991, the lessee should have received a simplified disclosure of the salient terms of the lease agreement, including but not limited to, the remaining term of the lease, the rent renegotiation dates, the potential .for significant increases in renegotiated rents, and the surrender clause.
In addition, it is a fundamental principle that the power to enact necessarily implies the power to repeal and one legislature cannot be limited or bound by the actions of a previous one. Thus, the council has the right to make an independent decision whether to repeal the law entirely.
Finally, “there is no vested right in a public law which is not in the nature of a private grant, and however beneficial a statute may be to a partieúlar person or however injuriously the repeal may affect him, the legislature has the right to abrogate it .... No person has a vested interest in any law or legislative policy which entitles him to have it remain unaltered for his benefit.” In re Application of Herrick,

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Bluebook (online)
378 F. Supp. 2d 1258, 2005 U.S. Dist. LEXIS 15110, 2005 WL 1719392, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hsiung-v-city-and-county-of-honolulu-hid-2005.