Pelosi v. Wailea Ranch Estates, 20254.

• Citation: 985 P.2d 1045,91 Haw. 478
• Decision Date: 08 July 1999
• Docket Number: No. 20254.,20254.
• Parties: Angelo PELOSI, Plaintiff/Counterclaim Defendant-Petitioner/Respondent-Appellant, v. WAILEA RANCH ESTATES, a Hawai`i general partnership, John Kean, Stephen Pitt, Satish Gholkar, Eduardo F. Bello, Hugh Jeffrey Farrington and Stephen K. Rink, Deceased, Defendants-Respondents-Appellees, Stephen M. Swanson, Louise S. Swanson, Margaret S. Smith, Batte T.L. Smith, Nahbut L. Smith, Peter Tucker, Lynne Coleman Tucker, Marc O. Yoshizumi, Davis Roland King, Dorian Keyes King, Dennis Rush, Cindy Rush, O'Green Estate, Bob Nick Oosterveen, Diane Oosterveen, Jane Greenspun, Ronald G. Mann, Edna Joan Mann, Stephen Fowler Chadwick, Annice Buckner Chadwick, Gerald K. Wong and Chu Il Wong, Defendants/Counterclaimants-Petitioners/Respondents-Appellees, Tina Sohn, individually and as Personal Representative of the Estate of Robert C. Sohn, Deceased, Defendant-Respondent-Appellee.
• Court: Supreme Court of Hawai'i

985 P.2d 1045

91 Haw. 478

Angelo PELOSI, Plaintiff/Counterclaim Defendant-Petitioner/Respondent-Appellant, v. WAILEA RANCH ESTATES, a Hawai`i general partnership, John Kean, Stephen Pitt, Satish Gholkar, Eduardo F. Bello, Hugh Jeffrey Farrington and Stephen K. Rink, Deceased, Defendants-Respondents-Appellees, Stephen M. Swanson, Louise S. Swanson, Margaret S. Smith, Batte T.L. Smith, Nahbut L. Smith, Peter Tucker, Lynne Coleman Tucker, Marc O. Yoshizumi, Davis Roland King, Dorian Keyes King, Dennis Rush, Cindy Rush, O'Green Estate, Bob Nick Oosterveen, Diane Oosterveen, Jane Greenspun, Ronald G. Mann, Edna Joan Mann, Stephen Fowler Chadwick, Annice Buckner Chadwick, Gerald K. Wong and Chu Il Wong, Defendants/Counterclaimants-Petitioners/Respondents-Appellees, Tina Sohn, individually and as Personal Representative of the Estate of Robert C. Sohn, Deceased, Defendant-Respondent-Appellee.

No. 20254.

Supreme Court of Hawai`i.

July 8, 1999.

Reconsideration Denied July 26, 1999.

Kevin H.S. Yuen, on the briefs, Wailuku, for the plaintiff/counterclaim defendant-petitioner/respondent-appellant Angelo Pelosi.

Wilson M.N. Loo and Steven B. Jacobson (of Torkildson, Katz, Fonseca, Jaffe, Moore & Hetherington), on the briefs, Honolulu, for the defendants/counterclaimants-petitioners/respondents-appellees Stephen M. Swanson, Louise S. Swanson, Margaret S. Smith, Batte T. L. Smith, Nahbut L. Smith, Peter Tucker, Marc O. Yoshizumi, Davis Roland King, Dorian Keyes King, Dennis Rush, Cindy Rush, O'Green Estate, Bob Nick Oosterveen, Diane Oosterveen, Jane Greenspun, Ronald G. Mann, Edna Joan Mann, Stephen Fowler Chadwick, Annice Buckner Chadwick, Gerald K. Wong, Chu Il Wong; and defendant-respondent-appellee Tina Sohn.

Gary Robert, on the briefs, Lahaina, for the defendants-respondents-appellees Wailea Ranch Estates, John Kean, Stephen Pitt, Satish Gholkar, Eduardo F. Bello, Hugh Jeffrey Farrington and Stephen K. Rink.

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

Opinion of the Court by LEVINSON, J.

On April 7, 1999, we granted the applications of both the plaintiff-petitioner/respondent-appellant Angelo Pelosi and the defendants-petitioners/respondents-appellees Stephen M. Swanson, Louise S. Swanson, Margaret S. Smith, Batte T. L. Smith, Nahbut L. Smith, Peter Tucker, Marc O. Yoshizumi, Davis Roland King, Dorian Keyes King, Dennis Rush, Cindy Rush, O'Green Estate, Bob Nick Oosterveen, Diane Oosterveen, Jane Greenspun, Ronald G. Mann, Edna Joan Mann, Stephen Fowler Chadwick, Annice Buckner Chadwick, Gerald K. Wong, Chu Il Wong, and Tina Sohn (collectively, "the individual defendants") for a writ of certiorari to clarify the opinion of the Intermediate Court of Appeals (ICA) in Pelosi v. Wailea Ranch Estates, 91 Hawai`i 522, 985 P.2d 1089 (App.1999) (hereinafter, the "ICA's majority opinion" or "Pelosi II").

In his application, Pelosi argues that the ICA majority erred in concluding that: (1) a balancing of the relative hardships was necessary to determine whether a mandatory injunction should have been issued; (2) Pelosi was barred by the doctrine of laches from obtaining mandatory injunctive relief to remove a roadway; and (3) the circuit court was correct in not allowing Pelosi to adduce additional evidence subsequent to trial. In their application, the individual defendants argue that the ICA majority erred in: (1) concluding, in its opinion in Pelosi v. Wailea Ranch Estates, 10 Haw.App. 424, 876 P.2d 1320, cert. denied, 77 Hawai`i 373, 884 P.2d 1149 (1994) (hereinafter, "Pelosi I"), that tennis courts are "buildings" for the purposes of a restrictive covenant; (2) failing to apply the defense of laches to Pelosi's claims regarding the tennis court; (3) failing to properly balance the equities involved in enforcing the covenant; (4) granting a mandatory injunction even though Pelosi had already been awarded damages; and (5) granting equitable relief although the covenant had lost its beneficial value.

We agree with Pelosi's point of error (2) and with the individual defendants' point of error (3); however, the ICA's errors in these instances did not lead to an incorrect result. We therefore offer the following discussion for the purpose of clarifying the points of law discussed in the ICA's majority opinion. The remaining points of error are without merit. Accordingly, we affirm the ICA's majority opinion in all other respects.

I. BACKGROUND

A. Lot 29

On October 26, 1977, Pelosi purchased Lot 28 of the Maui Meadows Unit III (MM III) Subdivision in Kihei, Maui. Since 1981, Pelosi has resided continuously on Lot 28. Adjoining Pelosi's lot is Lot 29, which is the focus of present dispute.

All of the "houselots" in the MM III subdivision are subject to a restrictive covenant,¹ which, according to its terms, "run[s] with the land" and is "binding upon and inure[s] to the benefit of the present owners of said lands and upon and to all subsequent owners of said lands[.]" The MM III covenant serves the purpose "of establishing and insuring a sound and proper subdivision for residential purposes." The covenant further provides in relevant part: "No lot shall be used except for residential purposes. No building shall be erected, placed, or permitted to remain on any lot other than a single family dwelling not to exceed one and one-half stories in height and any accessory buildings." (Emphasis added.)

On August 26, 1986, Wailea Ranch Estates, a Hawai`i general partnership whose partners are John Kean, Stephen Pitt, Satish Gholkar, Eduardo F. Bello, Hugh Jeffrey Farrington, and Stephen K. Rink (the partnership and partners will hereinafter be collectively referred to as "WRE"), purchased property north of and bordering the MM III subdivision. WRE also purchased Lot 29. The deed for the conveyance of Lot 29 contained an express reference to the MM III restrictive covenant. The property purchased by WRE comprised approximately 20.5 acres. WRE proceeded to subdivide the 20.5 acres into nine two-acre lots and three roadway lots. One of the roadway lots included a portion of Lot 29.

Also in August 1986, WRE entered into a "Farm Dwelling Agreement" with the County of Maui ("the county"), which provided that any dwelling built on the 20.5 acres must be a "farm dwelling," occupied by a family "deriv[ing] income from the agricultural activity on the parcel." Nonetheless, WRE chose to develop the 20.5 acres as an "exclusive, large lot subdivision," to be called "Wailea Ranch Estates" ("Wailea Ranch"), a "world-class community for those who seek out excellence and enduring value with the same single-mindedness that they apply to their successful careers and their leisure time." WRE's marketing materials offered, inter alia, a "common area Tennis Court with parking [that] shall be available for the exclusive use of the homeowners of `Wailea Ranch Estates' and their guests." A tennis court was not, however, included on the original subdivision map.

For the purpose of performing construction work on its 20.5 acres, WRE obtained oral permission to utilize a fire break road on the property of Ulupalakua Ranch. WRE never had any interest in the fire break road, however, nor did it obtain permission to use the road indefinitely.

In the second half of 1987, WRE began construction on Lot 29. A road was constructed on Lot 29, which Pelosi "figured they [were] using ... as a way to do some work" on the subdivision. In late 1987, Lot 29 was elevated. The road was paved in late 1987 or early 1988. Pelosi testified that in late 1987, he telephoned Bello and asked him "what was going on." Bello delivered a copy of WRE's marketing materials—which mentioned the planned tennis courts, but not their location—to Pelosi. The map accompanying the materials showed roadway access through Lot 29, but did not specify the type of access that Lot 29 would provide.

Pelosi testified that in late 1987, he protested to the construction workers and the county regarding the work being done on Lot 29. He further testified that in October or November 1987, he met with Kean, Farrington, and Rink, WRE's attorney. Pelosi testified that when he asked what the roadway was for, he was told, "it's just a private driveway." He also testified that the three developers told him that they were "considering" a tennis court, and that, when he protested that a tennis court would violate the MM III covenant, the developers denied that their actions would be in violation of the covenant. On November 10, 1987, Pelosi sent a letter to Kenneth Cohen of the Land Use and Codes Administration of the county to express his concerns. Pelosi also called the county to ask about the possible tennis court and was told that the county knew nothing about it.

Pelosi testified that at the end of 1987 or beginning of 1988, once the roadway was paved, construction of walls began on Lot 29. Pelosi testified that he did not learn until the spring of 1988 that there was going to be a tennis court on Lot 29. He learned of the planned tennis court through a series of letters and phone calls with the county.² A letter from Rink to the county indicated that, as of April 8, 1988, the walls had been completed, but the tennis court had not yet been constructed.

On May 18, 1988, Pelosi's attorney sent a letter regarding the use of Lot 29 to Rink. The letter read in relevant part:

Paragraph (1) of the Maui Meadows Restrictive Covenants provides that "No lot shall be used except for residential purposes." Obviously Lot 29 is not being used by your client for residential purposes[,] but for a roadway to service its subdivision. The use of the lot in this fashion not only violates the Maui Meadows covenants but constitutes an offensive nuisance in its own right. The idea that your client would in addition erect a tennis court on the property simply aggravates its violation of the covenants and its creation of a nuisance in a residential neighborhood.

The tennis court was completed in the summer of...