85 Hawai'i 217, Keliipuleole v. Wilson

• Decision Date: 10 June 1997
• Docket Number: No. 18681,18681
• Citation: 941 P.2d 300,85 Hawaii 217
• Parties: 85 Hawai'i 217 Irwin K. KELIIPULEOLE, Plaintiff-Appellant, v. Michael D. WILSON, in his capacity as Chairperson, Board of Land and Natural Resources; Christopher J. Yuen, Herbert K. Apaka, Jr., Colbert Matsumoto, Michael H. Nekoba, William Kennison, in their capacities as members of the Board of Land and Natural Resources, Defendants-Appellees.
• Court: Hawaii Supreme Court

Page 300

941 P.2d 300

85 Hawai'i 217

Irwin K. KELIIPULEOLE, Plaintiff-Appellant, v. Michael D. WILSON, in his capacity as Chairperson, Board of Land and Natural Resources; Christopher J. Yuen, Herbert K Apaka, Jr., Colbert Matsumoto, Michael H. Nekoba, William Kennison, in their capacities as members of the Board of Land and Natural Resources, Defendants-Appellees.

No. 18681.

Supreme Court of Hawai'i.

June 10, 1997.

Arnold L. Lum, Native Hawaiian Legal Corporation, on the briefs, Honolulu, for plaintiff-appellant.

Sonia Faust and Linnel T. Nishioka, Deputy Attorneys General, on the briefs, Honolulu, for defendants-appellees.

Before MOON, C.J., and KLEIN, LEVINSON, NAKAYAMA and RAMIL, JJ.

RAMIL, Justice.

Plaintiff-appellant Irwin K. Keliipuleole (Appellant) appeals from the order and judgment granting the cross-motion for summary judgment of defendants-appellees Michael D. Wilson, in his capacity as Chairperson, Board of Land and Natural Resources (BLNR), Christopher J. Yuen, Herbert K. Apaka, Jr., Colbert Matsumoto, Michael H. Nekoba, and William Kennison, in their capacity as members of the BLNR (collectively Appellees), and the order denying Appellant's motion for summary judgment. Appellant disagrees with the land valuation method used by the BLNR to assess the value of lots subject to 999-year homestead leases. Inasmuch as the language of the statute itself, its legislative history, subsequent legislative activity, and the deference accorded administrative rulings support the position of Appellees, we affirm the order and judgment of the circuit court.

I. BACKGROUND

This case arises from Appellant's attempt to purchase, for the sum of $1.00, the fee simple interest in the land he leases from the BLNR. He argues that, pursuant to HRS § 171-99(a) (1993), ¹ the purchase price of his fee patent must take into account the remaining term of his homestead lease.

In 1895, the territorial legislature passed the Land Act, which permitted citizens of the Republic of Hawai'i, who did not own land classed as wet land, to apply for a 999-year homestead lease. Qualified applicants received a Certificate of Occupation, which entitled them to enter the land, build a home, and plant crops. At the end of six years, a homesteader who had met all the requirements of the act received a 999-year lease, which entitled him or her to live on the land rent-free, but required that he or she pay real property taxes. Additionally, unlike residential leaseholds, a homestead lease could not and still cannot be mortgaged, sold, or transferred except as provided in HRS § 171-99(e).

On May 11, 1912, Ms. Haui Naeole, Appellant's great-great grandmother, received Homestead Lease No. 17 to a 1.06 acre parcel, ² known as Lot 10, in Palolo Valley. Appellant and his family have lived on the parcel since 1912. It is currently zoned residential.

In 1949, the legislature passed Joint Resolution 12 (JR 12), which, subject to ratification by Congress, repealed the homestead law, thereby bringing an end to the issuance of 999-year leases, and also authorized the sale of fee patents to existing homesteaders. In 1950, Congress ratified JR 12, which provided in relevant part that:

Section 1. A fee simple patent shall be issued to every lessee under a 999 year homestead lease of public lands where such lands have been improved under such lease and have been occupied as a place of residence by the lessee for a period of not less than ten years, upon the payment to the commissioner of public lands of a fair price, disregarding the value of the improvements made by the lessee, which price shall be determined, by three disinterested citizens to be appointed by the governor.

(Emphasis added.) In 1962, subsection 93(a) of the Session Laws changed the valuation guidelines from "fair price" to "fair market price" and required that the value of the fee be determined by appraisal.

In 1988, the probate court declared Appellant to be the sole successor in interest to Homestead Lease No. 17. In 1992, Appellant applied to purchase the fee. The BLNR approved his request and contracted an appraiser to determine the fair market value of Lot 10, which he determined to be $365,000.00. This amount was later reduced to $300,000.00.

Appellant contacted both the BLNR and the Department of Land and Natural Resources (DLNR), requesting an explanation of the methods used to determine the fair market price of Lot 10. In a joint response, the BLNR and DLNR stated, inter alia, that:

An independent appraiser was hired to determine the fair market value of Lot 10. In the opinion of the Attorney General's Office[,] "fair market price" should be based upon the value of the fee simple estate unencumbered by the leasehold estate.

It has been the consistent policy of the DLNR to instruct BLNR appraisers to value the fee as if it were not subject to the 999-year lease.

On November 3, 1993, Appellant filed a complaint for declaratory judgment and injunctive relief against the BLNR, arguing that HRS § 171-99(a), which establishes the guidelines appraisers must follow to determine the fair market price of land, does not allow the BLNR "to instruct its appraisers to disregard the effect on value of the encumbrance of the remaining term of a ... homestead lease." Appellant subsequently filed a motion for summary judgment and the BLNR followed suit, filing a cross-motion. On October 19, 1994, the circuit court issued a minute order denying Appellant's motion and granting that of the BLNR. Final orders were filed on December 23, 1994 and judgment was entered on the same date. Thereafter, Appellant filed this timely appeal.

On appeal, Appellant cites the following conclusions of law (COLs) as error:

[T]he Court believes that a ruling for State Defendants and not Plaintiff is appropriate and just for the following reasons: First, the Board is charged with the responsibility of administration of these homestead leases. There are certain "contingent interests" under section 171-99(E), relating to descent and succession, to whom the Board bears fiduciary duties. A sale would cut off those interests, and an appraisal giving Plaintiff full credit for interests that he cannot represent would constitute a breach of fiduciary duties on the part of the Board. Essentially, Plaintiff is not entitled to credit for the full balance of the 999 year term.... At best he may seek a determination based upon his remaining life expectancy. Second, the Board's policy is not inconsistent with the general intent and purposes of the Homestead Lease legislation. Third, the homestead lease is unique and does not have the incidents and characteristics of usual residential leases. Essentially, it is inalienable. It is not subject to mortgage. It generally requires a certiciate [sic] of occupancy, and passes restrictively in accordance with statutory descent. Fourth, the Board's policy has existed and been implemented for decades. In that time frame, the Legislature has not acted to overturn that policy. Fifth, courts are required to give deference and uphold discretionary decisions of administrative agencies. The discretionary actions of the latter are presumptively valid. Plaintiff has not overcome that presumption. Sixth, matters of public policy are for the Legislature to decide when one is unable to discern a legislative intent either from the language of the statute or its history.

II. STANDARDS OF REVIEW

An order granting summary judgment is reviewed de novo, using the same standard as that applied by the trial court: whether there were any genuine issues of material facts and whether the movant was entitled to judgment as a matter of law. State ex rel. Bronster v. United States Steel Corp., 82 Hawai'i 32, 39, 919 P.2d 294, 301 (1996). Conclusions of law (COLs) are not binding upon an appellate court and are reviewed de novo under the "right/wrong" standard. State v. Tuipuapua, 83 Hawai'i 141, 145, 925 P.2d 311, 315 (1996). A COL will not be overturned if supported by the trial court's findings of fact and the application of the correct rule of law. State v. Bowe, 77 Hawai'i 51, 53, 881 P.2d 538, 540 (1994).

III. DISCUSSION

Appellant claims the circuit court erred when it granted the BLNR's motion for summary judgment and held that: (1) the BLNR's policy of instructing appraisers to disregard the remaining term of the homestead lease was consistent with the legislative history and intent of HRS § 171-99(a) (1993); (2) the appraisal provisions of HRS § 171-79 (1993) ³ provide a legal basis for appraising fee patents under HRS § 171-99(a); (3) the court was required to defer to the BLNR's interpretation of "fair market price"; (4) the buyer of a fee patent was not entitled to credit for the remaining term on a 999-year lease; and (5) because the legislature had not taken any action to overturn the BLNR's policy, the court had to abide by the BLNR's definition of "fair market price." ⁴

A. Applicable Rules of Statutory Construction.

We interpret statutes de novo. Shimabuku v. Montgomery Elevator Co., 79 Hawai'i 352, 357, 903 P.2d 48, 51 (1995). When construing a statute, the starting point is the language of the statute itself. Richardson v. City & County of Honolulu, 76 Hawai'i 46, 63, 868 P.2d 1193, 1210, reconsideration denied, 76 Hawai'i 247, 871 P.2d 795 (1994); see also Mathewson v. Aloha Airlines, Inc., 82 Hawai'i 57, 71, 919 P.2d 969, 983 (1996) (citation and internal quotation marks omitted). "[C]ourts are bound to give effect to all parts of a statute, and that no clause, sentence, or word shall be construed as superfluous, void, or insignificant if a construction can be legitimately found which will give force to and preserve all words of the statute." State v. Kaakimaka, 84 Hawai'i 280, 289-90, 933 P.2d 617, 626-27 (quoting State v. Ortiz, 74 Haw. 343, 351-52, 845 P.2d 547, 551-52, reconsideration denied, 74 Haw. 650, 849 P.2d 81 (1993)), reconsideration denied, 84 Hawai'i 496, ...