County of Haw. v. C & J Coupe Family Ltd. P'ship

• Decision Date: 10 November 2010
• Docket Number: No. 29887.,29887.
• Court: Hawaii Supreme Court
• Parties: COUNTY OF HAWAI'I, a municipal corporation, Plaintiff/Counterclaim Defendant-Appellee v. C & J COUPE FAMILY LIMITED PARTNERSHIP, Defendant/Counterclaimant-Appellant and Robert Nigel Richards, Trustee under the Marilyn Sue Wilson Trust; and Miles Hugh Wilson, Defendants. C & J Coupe Family Limited Partnership, Third-Party Plaintiff-Appellant v. 1250 Oceanside Partners aka Hokuli'a, Third-Party Defendant-Appellee. County of Hawai'i, a municipal corporation, Plaintiff/Counterclaim Defendant-Appellee. v. C & J Coupe Family Limited Partnership, Defendant/Counterclaimant/Cross Claimant-Appellant and 1250 Oceanside Partners aka Hokuli'a, Defendant/Cross Claim Defendant-Appellee and Robert Nigel Richards, trustee under The Marilyn Sue Wilson Trust; and Miles Hugh Wilson, Defendants.

242 P.3d 1136

124 Hawai'i 281

COUNTY OF HAWAI'I, a municipal corporation, Plaintiff/Counterclaim Defendant-Appellee

v.C & J COUPE FAMILY LIMITED PARTNERSHIP, Defendant/Counterclaimant-AppellantandRobert Nigel Richards, Trustee under the Marilyn Sue Wilson Trust; and Miles Hugh Wilson, Defendants.

C & J Coupe Family Limited Partnership, Third-Party Plaintiff-Appellant

v.1250 Oceanside Partners aka Hokuli'a, Third-Party Defendant-Appellee.

County of Hawai'i, a municipal corporation, Plaintiff/Counterclaim Defendant-Appellee.

v.C & J Coupe Family Limited Partnership, Defendant/Counterclaimant/Cross Claimant-Appellantand1250 Oceanside Partners aka Hokuli'a, Defendant/Cross Claim Defendant-Appellee

and

Robert Nigel Richards, trustee under The Marilyn Sue Wilson Trust; and Miles Hugh Wilson, Defendants.

No. 29887.

Supreme Court of Hawai'i.

Nov. 10, 2010.

Kenneth R. Kupchak, Robert H. Thomas, Mark M. Murakami, and Matthew T. Evans (Damon Key Leong Kupchak Hastert), on the briefs, for defendant-appellant C & J Coupe Family Limited Partnership.

Lincoln S.T. Ashida, Corporation Counsel; Katherine A. Garson, Assistant Corporation Counsel; Joseph K. Kamelamela, Gerald Takase, and Michael J. Udovic, Deputies Corporation Counsel, County of Hawai'i, on the briefs, for plaintiff-appellee County of Hawai'i.

William Meheula and Kurt Kagawa (Meheula & Devens, LLP), on the briefs, for third-party defendant-appellee 1250 Oceanside Partners aka Hokuli'a.

RECKTENWALD, C.J., NAKAYAMA, ACOBA, and DUFFY, JJ., and Circuit Judge PERKINS, assigned due to a vacancy.

Opinion of the Court by ACOBA, J.

This case is the post-remand sequel to County of Hawai'i v. C & J Coupe Family Ltd. P'ship, 119 Hawai'i 352, 198 P.3d 615 (2008) [hereinafter, Coupe I ]. In that case, this court reviewed two condemnation actions (Condemnation 1 and Condemnation 2)

[124 Hawai'i 285, 242 P.3d 1140]

brought by Plaintiff/Counterclaim Defendant-Appellee County of Hawai'i (the County) to condemn property belonging to Defendant/Counterclaimant-Appellant C & J Coupe Family Limited Partnership in Civ. No. 00-1-0181K and Defendant/Counterclaimant/Cross Claimant-Appellant in Civ. No. 05-1-015K (Coupe). In the instant appeal, we hold that (1) the County's asserted public purpose for Condemnation 2 was not a pretext for a primarily private benefit, (2) Coupe's challenge to the value of just compensation set for the property in Condemnation 2 could not be considered on remand, (3) the circuit court of the third circuit (the court) ¹ erred in denying Coupe's request for attorneys' fees associated with the preparation of billing records and/or preparation of Coupe's fee petitions for the failed Condemnation 1, and (4) the court did not abuse its discretion in denying Coupe's request for prejudgment interest on attorneys' fees and other expenses incurred in Condemnation 1. Therefore, we affirm the court's conclusion that Condemnation 2 was not pretextual, its valuation of just compensation set for the property in Condemnation 2, and its denial of Coupe's request for prejudgment interest. We remand to the court to decide Coupe's request for attorneys' fees associated with the preparation of billing records and/or preparation of Coupe's fee petitions in Condemnation 1.

I. BACKGROUND

A. Condemnation 1 and Condemnation 2

While the facts giving rise to Condemnations 1 and 2 are discussed in Coupe I, a recitation of the facts is necessary to an understanding of the instant appeal.² Third-Party Defendant-Appellee 1250 Oceanside Partners in Civ. No. 00-1-0181K and Defendant/Cross Claim Defendant-Appellee in Civ. No. 05-1-015K (Oceanside) is the developer of the Hokuli'a subdivision (Hokuli'a) which extends from the ocean almost to the Mamalahoa Highway and crosses the border between North and South Kona. Id. at 357, 198 P.3d at 620. In exchange for a change in zoning for Hokuli'a, Oceanside agreed to construct a bypass highway (Bypass) between Keauhou and Captain Cook to "alleviate unacceptable and unsafe traffic conditions." Id. (brackets omitted). A Development Agreement dated April 20, 1998 between the County and Oceanside provided that the County would use its power of eminent domain to acquire any property along the Bypass route that was refused for private sale to Oceanside. Id. at 358, 198 P.3d at 621.

In an effort to construct the Bypass, Oceanside purchased all of the private property needed, except for the property owned by Coupe, who refused to sell. Id. at 359, 198 P.3d at 622. As agreed upon in the Development Agreement, the County Council issued Resolution No. 266-00, which authorized the condemnation of Coupe's property and made reference to the Development Agreement. Id. On the basis of Resolution No. 266-00, the County then filed Condemnation 1, Civ. No. 00-1-0181K, in the court against Coupe ³ to condemn 2.9 acres of Coupe's property. The issue of whether

[124 Hawai'i 286, 242 P.3d 1141]

Condemnation 1 was for a public use was initially resolved in favor of the County by partial summary judgment on November 27, 2001. Id. However, the court reversed its ruling and set the matter for trial because "there was a genuine issue of material fact as to the purpose." Id. at 360, 198 P.3d at 623.

During the pendency of the Condemnation 1 trial, on February 5, 2003, the County passed Resolution No. 31-03,⁴ authorizing the County to initiate a second condemnation of 3.348 acres of Coupe's property for the Bypass. Resolution 31-03 "did not reference the Development Agreement" and instead stated that "the Bypass would provide 'a regional benefit for the public purpose and use which will benefit the [County].' " Id. On the basis of Resolution No. 31-03, on January 28, 2005, the County filed Condemnation 2, Civ. No. 05-1-015K, in the court against Coupe.⁵ Id.

In Condemnation 2, Coupe moved to dismiss the condemnation on the ground of abatement, or in the alternative, to consolidate the cases. The court denied the motion to dismiss, but consolidated Condemnation 1 and Condemnation 2 and tried the cases in a non-jury trial. Id. As to Condemnation 1, the court ruled that the condemnation was invalid because the County unlawfully delegated its sovereign power of condemnation to Oceanside through the Development Agreement. Id. As to Condemnation 2, the court held that (1) the case was not abated by Condemnation 1, and (2) Condemnation 2 was supported by a public purpose. Id. at 361, 198 P.3d at 624. The court issued its Findings of Fact (FOF), Conclusions of Law (COL), and Order on September 25, 2007, and issued a First Amended Findings of Fact, Conclusions of Law, and Order (First Amended FOFCOL) on September 27, 2007. The court entered its First Amended Final Judgment against the County with respect to Condemnation 1, in favor of the County with respect to Condemnation 2, and determined just compensation for the condemned property to be $162,204.83.

On October 11, 2007, Coupe filed a motion for statutory damages pursuant to HRS § 101-27 (1993) ⁶ [hereinafter, October 11,

[124 Hawai'i 287, 242 P.3d 1142]

2007 Motion]. In this motion, Coupe requested from the County, attorneys' fees and costs, plus tax and prejudgment interest for the County's failure to take Coupe's property for public use in Condemnation 1. ⁷

On November 5, 2007, in its Reply Memorandum in Support of its October 11, 2007 Motion, Coupe included an Errata which amended Coupe's damages to $1,535,375.00 in attorneys' fees, $134,940.17 in costs and expenses, $61,612.03 in general excise taxes, and $276,722.41 in prejudgment interest. At the court's request, Coupe filed a supplemental memorandum in support on December 6, 2007, the County and Oceanside filed their supplemental pleadings on December 14, 2007, and Coupe filed its supplemental Reply on December 19, 2007. The court did not rule on or enter any order on Coupe's October 11, 2007 Motion. Thus, on January 15, 2008, the October 11, 2007 Motion was deemed denied by operation of HRAP Rule 4 (2007).⁸

B. Coupe I-Coupe's First Appeal to This Court

On July 9, 2008, this court accepted transfer of Coupe's first appeal from the ICA to this court. Coupe I, 119 Hawai'i at 361, 198 P.3d at 624. This court held that (1) the court did not err in concluding that "Condemnation 2 was not abated by Condemnation 1," id. at 372, 198 P.3d at 635, (2) "where there is evidence that the asserted [public] purpose is pretextual, courts should consider a landowner's defense of pretext[,]" id. at 357, 198 P.3d at 620, and (3) Coupe was entitled to seek statutory damages under HRS § 101-27 "insofar as the property in question was not taken in Condemnation 1 [,]" id. at 366, 198 P.3d at 629. As to the second holding, this court determined that "it [was] unclear from the entirety of the court's findings and conclusions regarding Condemnation 2 whether the court did in fact consider and reject [Coupe's] pretext argument." Id. at 382, 198 P.3d at 645. The judgment in Condemnation 2 was vacated, and the case was remanded for "an express determination by the court of whether the asserted public purpose was pretextual." Id. at 390, 198 P.3d at 653.

As to the third holding, this court held that (1) Coupe was "entitled to costs and attorneys' fees, as well as any expenses that may have been incurred by reason of [the County] taking possession of the property[,]" and (2) "[i]t is for the court to determine whether the fees claimed by [Coupe] are related to Condemnation 1 and are reasonable under relevant standards." Id. at 368, 198 P.3d at 631. Thus, this court also "remanded [the case] to the court for a calculation of the damages to which [Coupe was] entitled in defending against Condemnation 1." Id.

C. Coupe II-Coupe's Request for Statutory Damages Associated With its First Appeal

On January 20, 2009, Coupe filed with this court its Request for Statutory Damages incurred by Coupe during its appeal in Coupe I [hereinafter Coupe II Request].

[242 P.3d 1143, 124 Hawai'i 288]

County of Hawai'i v. C & J Coupe Family...