City and County of Honolulu v. Sherman

• Decision Date: 28 February 2006
• Docket Number: No. 26896.,26896.
• Citation: 129 P.3d 542
• Parties: CITY AND COUNTY OF HONOLULU, a municipal corporation of the State of Hawaii, Plaintiff-Appellee/Cross-Appellant/Cross-Appellee, v. James M. SHERMAN, also known as James Malcolm Sherman, and Akiko S. Sherman, also known as Akiko Sakiyama Sherman, as Trustees under that certain unrecorded James M. Sherman and Akiko S. Sherman Revocable Trust dated May 2, 1989; Jan Camille Bellinger, Trustee under the Jan Camille Bellinger Revocable Living Trust, under that certain unrecorded Trust, Agreement dated November 23, 1993, Clarence K. Lee, as Trustee of and for the Clarence K. Lee Revocable Trust, under that certain unrecorded Trust Agreement dated January 28, 1992, as amended; and Myrna P. Chun-Hoon, Successor Trustee under that certain unrecorded Revocable Trust of Albert C.K. Chun-Hoon dated October 11, 1984, as amended, and Myrna P. Chun-Hoon, Trustee under that certain unrecorded Revocable Trust of Myrna P. Chun-Hoon, dated October 11, 1984, as amended, George B. Garis, also known as George Benjamin Garis, as Trustee under that certain unrecorded George B. Garis Revocable Trust dated November 28, 1989, as amended; Chinh Trong Le; Karen Wilson Rosa; Elizabeth W. Takahashi, Trustee of the Elizabeth W. Takahashi Revocable Living Trust under that certain unrecorded Trust Agreement dated July 14, 1993, Stuart Edwin Gross, as Trustee under that certain unrecorded Trust Agreement known as The Stuart E. Gross Trust dated February 19, 1985, and Marcia Kurzweil Gross, as Trustee under that certain unrecorded Trust Agreement known as The Marcia K. Gross Trust dated February 19, 1985; John Philip Spierling; Mark Sperry and Mollie Sperry, Co-Trustees of the Mark Sperry Revocable Trust dated May 29, 1989, and Mollie Sperry and Mark Sperry, Co-Trustees of The Mollie Sperry Revocable Trust dated May 29, 1989; Sayuri Taniguchi and Erica Taniguchi Dorman; Kenneth Graham Patterson and Lillian Papacolas Patterson; Moses Mosai Lo and Sheila Dickenson Lo; Frank K. Min, also known as Frank Kui Pong Min, and Elaine N. Min, also known as Elaine Nam Min, Trustees under that certain Trust Agreement dated April 9, 1985, and Elaine N. Min, also known as Elaine Nam Min and Frank K. Min, also known as Frank Kui Pong Min, Trustees under that certain Trust Agreement dated April 9, 1985; Arthur R. King, Jr., and Ruth Mildred King, Co-Trustees of the unrecorded Arthur R. King, Jr. Trust Agreement dated May 18, 1990; and Ruth Mildred King and Arthur R. King, Co-Trustees of the unrecorded Ruth Mildred King Trust Agreement dated May 18, 1990; Deanna Lou Levy, as Trustee under that certain unrecorded Trust Agreement known as The Deanna Lou Levy Revocable Trust dated December 4, 1990; Robert G. Lees and Yuko Lees, Co-Trustees under that certain unrecorded Trust Agreement known as The Yuko Lees Trust dated June 14, 2000; Elisabeth Kehrer Anderson, as Trustee of the Elisabeth Kehrer Anderson Revocable Living Trust Agreement dated June 29, 1981, as amended and restated; Ramez Bassir; Paul John Casey, as Trustee under that certain unrecorded Self-Trusteed Trust dated August 31, 1987, and Janice Yoko Casey, as Trustee under that certain unrecorded Self-Trusteed Trust dated May 20, 1988; George Henry Lumsden and Joanne Chun Lumsden; Ann Takako Yamamoto, as Trustee of the Self-Trusteed Trust Agreement of Ann Takako Yamamoto, under unrecorded Trust Agreement of Ann Takako Yamamoto dated April 10, 2000; Frances M. Watanabe, Trustee under that certain unrecorded Frances M. Watanabe Revocable Trust dated April 2, 1993, Meredith Kwock Leong Pang; Neil Simms Bellinger, Trustee under that certain unrecorded Neil S. Bellinger Revocable Living Trust dated November 20, 2002; Wallace Lee Young and Ernestine Ching Young; Joyce A Hagin and Lawrence Reich; David Patrick Kelly and Keiko Kelly; Patricia Carleen Brown, Trustee for the Patricia Carleen Brown Revocable Trust Agreement dated January 21, 1993; Randy Neil Yeager and Susan Kaycie Yeager; and Gail Suzanne Koglman, Defendants-Appellants/Cross-Appellees, and First United Methodist Church, a Hawaii non-profit corporation, Defendant-Appellee/Cross-Appellee/Cross-Appellant, and John Doe 1-200; Mary Doe 1-200; Doe Partnership 1-100; Doe Corporation 1-100; Doe Non-Profit Corporation 1-100; Doe Entity 1-100, Defendants.
• Court: Hawaii Supreme Court

129 P.3d 542

CITY AND COUNTY OF HONOLULU, a municipal corporation of the State of Hawaii, Plaintiff-Appellee/Cross-Appellant/Cross-Appellee, v. James M. SHERMAN, also known as James Malcolm Sherman, and Akiko S. Sherman, also known as Akiko Sakiyama Sherman, as Trustees under that certain unrecorded James M. Sherman and Akiko S. Sherman Revocable Trust dated May 2, 1989; Jan Camille Bellinger, Trustee under the Jan Camille Bellinger Revocable Living Trust, under that certain unrecorded Trust, Agreement dated November 23, 1993, Clarence K. Lee, as Trustee of and for the Clarence K. Lee Revocable Trust, under that certain unrecorded Trust Agreement dated January 28, 1992, as amended; and Myrna P. Chun-Hoon, Successor Trustee under that certain unrecorded Revocable Trust of Albert C.K. Chun-Hoon dated October 11, 1984, as amended, and Myrna P. Chun-Hoon, Trustee under that certain unrecorded Revocable Trust of Myrna P. Chun-Hoon, dated October 11, 1984, as amended, George B. Garis, also known as George Benjamin Garis, as Trustee under that certain unrecorded George B. Garis Revocable Trust dated November 28, 1989, as amended; Chinh Trong Le; Karen Wilson Rosa; Elizabeth W. Takahashi, Trustee of the Elizabeth W. Takahashi Revocable Living Trust under that certain unrecorded Trust Agreement dated July 14, 1993, Stuart Edwin Gross, as Trustee under that certain unrecorded Trust Agreement known as The Stuart E. Gross Trust dated February 19, 1985, and Marcia Kurzweil Gross, as Trustee under that certain unrecorded Trust Agreement known as The Marcia K. Gross Trust dated February 19, 1985; John Philip Spierling; Mark Sperry and Mollie Sperry, Co-Trustees of the Mark Sperry Revocable Trust dated May 29, 1989, and Mollie Sperry and Mark Sperry, Co-Trustees of The Mollie Sperry Revocable Trust dated May 29, 1989;

Sayuri Taniguchi and Erica Taniguchi Dorman; Kenneth Graham Patterson and Lillian Papacolas Patterson; Moses Mosai Lo and Sheila Dickenson Lo; Frank K. Min, also known as Frank Kui Pong Min, and Elaine N. Min, also known as Elaine Nam Min, Trustees under that certain Trust Agreement dated April 9, 1985, and Elaine N. Min, also known as Elaine Nam Min and Frank K. Min, also known as Frank Kui Pong Min, Trustees under that certain Trust Agreement dated April 9, 1985; Arthur R. King, Jr., and Ruth Mildred King, Co-Trustees of the unrecorded Arthur R. King, Jr. Trust Agreement dated May 18, 1990; and Ruth Mildred King and Arthur R. King, Co-Trustees of the unrecorded Ruth Mildred King Trust Agreement dated May 18, 1990; Deanna Lou Levy, as Trustee under that certain unrecorded Trust Agreement known as The Deanna Lou Levy Revocable Trust dated December 4, 1990; Robert G. Lees and Yuko Lees, Co-Trustees under that certain unrecorded Trust Agreement known as The Yuko Lees Trust dated June 14, 2000; Elisabeth Kehrer Anderson, as Trustee of the Elisabeth Kehrer Anderson Revocable Living Trust Agreement dated June 29, 1981, as amended and restated; Ramez Bassir; Paul John Casey, as Trustee under that certain unrecorded Self-Trusteed Trust dated August 31, 1987, and Janice Yoko Casey, as Trustee under that certain unrecorded Self-Trusteed Trust dated May 20, 1988; George Henry Lumsden and Joanne Chun Lumsden; Ann Takako Yamamoto, as Trustee of the Self-Trusteed Trust Agreement of Ann Takako Yamamoto, under unrecorded Trust Agreement of Ann Takako Yamamoto dated April 10, 2000; Frances M. Watanabe, Trustee under that certain unrecorded Frances M. Watanabe Revocable Trust dated April 2, 1993, Meredith Kwock Leong Pang; Neil Simms Bellinger, Trustee under that certain unrecorded Neil S. Bellinger Revocable Living Trust dated November 20, 2002; Wallace Lee Young and Ernestine Ching Young; Joyce A Hagin and Lawrence Reich; David Patrick Kelly and Keiko Kelly; Patricia Carleen Brown, Trustee for the Patricia Carleen Brown Revocable Trust Agreement dated January 21, 1993; Randy Neil Yeager and Susan Kaycie Yeager; and Gail Suzanne Koglman, Defendants-Appellants/Cross-Appellees, and First United Methodist Church, a Hawaii non-profit corporation, Defendant-Appellee/Cross-Appellee/Cross-Appellant, and John Doe 1-200; Mary Doe 1-200; Doe Partnership 1-100; Doe Corporation 1-100; Doe Non-Profit Corporation 1-100; Doe Entity 1-100, Defendants.

No. 26896.

Supreme Court of Hawai`i.

February 28, 2006.

As Corrected March 22, 2006.

COPYRIGHT MATERIAL OMITTED

John P. Manaut, of Carlsmith, Ball LLP (James H. Case and John P. Manaut of Carlsmith Ball LLP on the briefs), Honolulu, for defendant/appellants/cross-appellees James M. Sherman, et al.

Lex R. Smith, of Kobayashi, Sugita & Goda (Lex R. Smith and Ann C. Teranishi of Kobayashi, Sugita & Goda, Honolulu, and Carrie Okinaga, Corporation Counsel and Winston K.O. Wong, Deputy Corporation Counsel on the briefs), for plaintiff-appellee/cross-appellant/cross-appellee City and County of Honolulu.

James K. Mee of Ashford & Wriston (James K. Mee, Rosemary T. Fazio, and Kevin W. Herring of Ashford & Wriston, on the briefs), Honolulu, for defendant/appellee/cross-appellee/cross-appellant First United Methodist Church.

MOON, C.J., LEVINSON, NAKAYAMA, and DUFFY, JJ., and Circuit Judge SAKAMOTO, in place of ACOBA, J., Recused.

Opinion of the Court by LEVINSON, J.

This appeal involves the interpretation and application of Ordinance 91-95 of the City and County of Honolulu, as codified in Revised Ordinances of Honolulu (ROH) Chapter 38 (1991). ROH ch. 38, entitled "Residential Condominium, Cooperative Housing and Residential Planned Development Leasehold Conversion," established the authority of the City and County of Honolulu to file eminent domain actions for a lease-to-fee conversion of certain leased-fee interests.¹

The present matter arises out of a condemnation action filed by the plaintiff-appellee/cross-appellant/cross-appellee City and County of Honolulu [hereinafter, "the City"], pursuant to its eminent domain power, in which it originally designated twenty-eight units and later amended the designation to add six units within the Admiral Thomas condominium complex (the Admiral Thomas) for conversion from leasehold to fee simple on behalf of forty-seven owner-occupant applicants (collectively, the lessees).² The defendant-appellant/cross-appellee/cross-appellant First United Methodist Church [hereinafter, "the Church"], the fee owner of the Admiral Thomas, opposed condemnation and counterclaimed for violations of (1) federal and state constitutional rights of separation of church and state and freedom of religion, (2) the federal Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA), 42 U.S.C. § 2000cc et seq. (2000)³ and (3) federal civil rights.

The three parties to the action, i.e., the City, the Church, and the lessees, moved for summary judgment on the complaint on various grounds. The circuit court ruled in favor of the Church and against the City and lessees by finding that because the Admiral Thomas is a "mixed-use" condominium project, it does not qualify for conversion under ROH ch. 38 and that there was an insufficient number of qualified applicant units to acquire the fee. On the other hand, the circuit court ruled in favor of the City and the lessees and against the Church by finding that the City Council of the City and County of Honolulu did not improperly delegate the power of eminent domain to the Department of Community Services (DCS) and that RLUIPA is inapplicable as a defense to conversion under ROH ch. 38.

As discussed more fully infra in section III, the lessees argue on appeal (1) that the circuit court impermissibly legislated an exception to ROH ch. 38 by classifying the Admiral Thomas as a "mixed-use" building rather than applying the plain meaning of ROH ch. 38 to the defined 148 residential units located on the property and (2) that disqualifying three of the lessee applicant units and subsequently determining that the number of qualified applicant units fell below the twenty-five necessary for condemnation was erroneous.

The City argues on cross-appeal that the inclusion of the words "mixed-use" in the condominium declaration for the Admiral Thomas did not provide any legal basis to disqualify the conversion of the Admiral Thomas units from leasehold to fee simple under ROH ch. 38.

The Church argues on cross-appeal: (1) that the City Council impermissibly delegated the power of eminent domain to the DCS; (2) that RLUIPA is an applicable defense to the condemnation of fee simple residential property owned by the Church; and (3) that the affidavits of the Administrator of the City's Leasehold Conversion Program, Sally Cravalho, which stated that the lessees were qualified under ROH ch. 38 to participate in the lease-to-fee conversion program, were hearsay and should have been deemed inadmissible as evidence of the lessees' qualifications, pursuant to Hawai`i Rules of Civil Procedure (HRCP) Rule 56(e).⁴

This court has never had occasion to address (1) whether ROH ch. 38 is inapplicable to religious institutions owning land in fee simple, (2) whether a building's designation as "mixed-use" excludes it from condemnation pursuant to ROH ch. 38, or (3) whether RLUIPA is a valid defense to the application of ROH ch. 38 to property owned by a religious institution.

For the reasons discussed more fully infra, in section III, we hold (1) that ROH ch. 38 does not provide an exception to lease-to-fee conversion of "mixed-use" buildings, (2) that RLUIPA does not provide a defense to condemnation of the Admiral Thomas condominium units owned in fee simple by the Church, (3) that the City Council did not impermissibly delegate the power of eminent domain to the DCS, (4) that there are genuine issues of material fact as to whether the requisite number of applicant units exists to acquire the fee pursuant to ROH ch. 38, and (5) that Cravalho's affidavits do not run afoul of HRCP Rule 56(e).

Accordingly, we affirm the circuit court's grant of...