Pelosi v. Wailea Ranch Estates

• Decision Date: 10 February 1999
• Docket Number: No. 20254.,20254.
• Citation: 91 Haw. 522,985 P.2d 1089
• Parties: Angelo PELOSI, Plaintiff/Counterclaim Defendant-Appellant, v. WAILEA RANCH ESTATES, a Hawai`i general partnership, John Kean, Stephen Pitt, Satish Gholkar, Eduardo F. Bello, Hugh Jeffrey Farrington, Stephen K. Rink, Tina Sohn, individually and as Personal Representative of the Estate of Robert C. Sohn, Deceased, Defendants-Appellees, and 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, Chu II Wong, John Does 1-10, Jane Does 1-10, Doe Partnerships 1-10, Doe Corporations 1-10, and Doe Governmental Entities 1-10, Defendants/Counterclaimants-Appellees.
• Court: Hawaii Court of Appeals

985 P.2d 1089

91 Haw. 522

Angelo PELOSI, Plaintiff/Counterclaim Defendant-Appellant, v. WAILEA RANCH ESTATES, a Hawai`i general partnership, John Kean, Stephen Pitt, Satish Gholkar, Eduardo F. Bello, Hugh Jeffrey Farrington, Stephen K. Rink, Tina Sohn, individually and as Personal Representative of the Estate of Robert C. Sohn, Deceased, Defendants-Appellees, and 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, Chu II Wong, John Does 1-10, Jane Does 1-10, Doe Partnerships 1-10, Doe Corporations 1-10, and Doe Governmental Entities 1-10, Defendants/Counterclaimants-Appellees.

No. 20254.

Intermediate Court of Appeals of Hawai`i.

February 10, 1999.

Certiorari Granted April 7, 1999.

Kevin H.S. Yuen (Law office of Kevin H.S. Yuen, of counsel); Edward F. Mason¹, on the briefs, Wailuku, for plaintiff/counterclaim defendant-appellant.

Gary Robert, on the brief, Lahaina, for defendants/counterclaimants-appellees, except Tina Sohn.

Wilson M.N. Loo and Steven B. Jacobson (Torkildson, Katz, Fonseca, Jaffe, Moore & Hetherington, of counsel) Honolulu, for Tina Sohn, individually and as Personal Representative of the Estate of Robert C. Sohn, Deceased.

BURNS, C.J., WATANABE, and ACOBA, JJ.

Opinion of the Court by WATANABE, J.

The primary issue in this appeal is whether Plaintiff/Counterclaim Defendant-Appellant Angelo Pelosi (Pelosi) is entitled to a mandatory injunction requiring the removal of a roadway and tennis court that were constructed on Lot 29 of the Maui Meadows III (MM III) Subdivision, in clear violation of an MM III restrictive covenant prohibiting the lot from being used "except for residential purposes." The Second Circuit Court (circuit court) answered the foregoing question in the negative and also declined, in the exercise of its discretion, to order removal of the roadway and tennis court.

We conclude that the circuit court should have issued an injunction, ordering removal of the tennis court. However, due to Pelosi's laches in bringing the action to enforce the covenant as to the roadway, Pelosi is not entitled to a mandatory injunction to remove the roadway. Moreover, the circuit court did not abuse its discretion when it balanced the equities and declined to order removal of the roadway.

BACKGROUND

A. Pelosi I

This case has previously been before this court. In Pelosi v. Wailea Ranch Estates (Pelosi I), 10 Haw.App. 424, 876 P.2d 1320, reconsideration denied, 10 Haw.App. 631, 879 P.2d 591, cert. denied, 77 Hawaii 373, 884 P.2d 1149 (1994), we concluded that (1) the restrictive covenant at issue clearly and unambiguously required that "only one single-family dwelling and such buildings as are strictly accessory to the use of that dwelling may be constructed on an MM III houselot," id. at 437, 876 P.2d at 1327; (2) the restrictive covenant was clearly violated when Defendant-Appellee Wailea Ranch Estates, a general partnership whose partners were Defendants-Appellees John Kean (Kean), Stephen Pitt (Pitt), Satish Gholkar (Gholkar), Eduardo F. Bello (Bello), Hugh Jeffrey Farrington (Farrington), and Stephen K. Rink (Rink) (the partnership and partners will hereinafter be collectively referred to as "the WRE Defendants"), constructed across Lot 29 of the MM III Subdivision, a tennis court and roadway which were accessory to residences in a completely different subdivision, the WRE Subdivision, id. at 441, 876 P.2d at 1329; and (3) the circuit court was wrong when it refused to enter a declaratory judgment that the WRE Defendants and the individual Defendants/Counterclaimants-Appellees² (Individual Defendants) (collectively, Defendants) "had breached the MM III Covenants because they were not using Lot 29 for residential purposes[.]" Id. at 433, 876 P.2d at 1325.

In Pelosi I, we remanded the case to the circuit court, with instructions that it determine whether Pelosi, the owner of MM III Lot 28, the houselot adjoining Lot 29, was entitled to a mandatory injunction to remove the violation of the restrictive covenant. Id. at 446, 876 P.2d at 1331. More specifically, we instructed:

If the [circuit] court determines that Defendants deliberately and intentionally violated the MM III Covenants or intentionally assumed the risk of such violation, a mandatory injunction should issue forthwith, ordering Defendants to remove the roadway and tennis court on Lot 29.

If, on the other hand, the [circuit] court determines that Defendants did not intentionally violate the MM III Covenants or intentionally assume the risk of such violation, then the [circuit] court may balance the equities in determining whether to grant injunctive relief by ordering removal of the roadway and/or tennis court. If the [circuit] court concludes that the relative hardships to the parties preclude an award of injunctive relief, then the [circuit] court shall hold a hearing to determine whether [Pelosi] is entitled to damages resulting from Defendants' breach of the MM III Covenants which are in addition to the $20,000 in damages already awarded to him for his nuisance cause of action.

Id.

B. Pelosi II

On remand following our decision in Pelosi I, Pelosi filed a motion for entry of mandatory injunction "based upon the trial transcript and the exhibits admitted in evidence at the trial." Following a hearing on Pelosi's motion on July 14, 1995, the circuit court, on August 24, 1995, entered its "Findings on Issues Submitted by the Intermediate Court of Appeals," "Conclusions of Law," and "Order" (August 24, 1995 Order on Remand). The court found and determined as follows:

Question No. 1. Whether defendant deliberately and intentionally violated MM III Covenants? No.

Question No. 2. Whether defendant intentionally assumed the risk of such violation? No.

Question No. 3. In balancing the equities should the court grant injunctive relief by ordering removal of the roadway and/or tennis court? No.

Question No. 4. What, if any, damages should be assessed the defendants? Further hearing is necessary.

The pertinent facts of this case reflect that:

1) the County of Maui approved the consolidation of Lot 29 with twenty (20) adjacent acres which became the Wailea Ranch Estates upon purchase by defendant developers.

2) The County of Maui approved the Wailea Ranch Estates subdivision to include the construction of a road and tennis court upon Lot 29.

3) Without Lot 29 as access to the subdivision, no approval could have been given by the County.

4) No other access is available and by necessity, Lot 29 was included as part of the subdivision.

5) Defendants purchased the property with subdivision and development as their purpose and would have had no reason to do so if no subdivision or development were possible or permissible.

6) County and state laws do not prohibit roads or tennis courts from being built in rural subdivisions.

7) The County of Maui had no objection to and indeed permitted the construction of a tennis court and road on Lot 29.

8) Roads and tennis courts exist in the Maui Meadows subdivision. Although the restrictive covenants are not County or state laws and are to be considered separately and individually, considering the milieu of governmental regulations, real estate practice, construction and comparable uses, defendants' decision to proceed with a tennis court and road on Lot 29 cannot be found to have been deliberate and intentional violations of the MM III Covenants.

9) Indeed, it would appear that the defendants' expertise in law, construction, real estate development, and architecture gave credence to their conclusion as to the proper interpretation of the restrictive covenants and not necessarily that they knew or should have known better.

10) The finding of a jury of their peers that the defendants were not using Lot 29 for residential purposes would seem to have confirmed the defendants' and their experts' opinions in interpreting the use of Lot 29.

11) Plaintiff is himself well educated, [and] experienced and practicing real estate person, and was living adjacent to the defendants [sic] development with a clear observation as to the progress of the construction. He had the opportunity to determine from the instigation of the defendants [sic] plans in 1986 whether to involve himself but expressed no objections until the spring of 1988. Even if plaintiff's version were accepted, construction on Lot 29 was substantially completed by July 1987 way before plaintiff alleges he met with defendants in late 1987 and warned defendants.

12) Since 1986, development has not been enjoined or delayed and additional party defendants have been added who have purchased lots and/or built upon them. The Wailea Ranch Estates may no longer exist as the original entity it once was.

13) Subjecting the defendants as well as subsequent innocent purchasers to the injunctive relief sought by plaintiff would create substantial hardship on their part by effectively terminating access to the subdivision and thereby creating an illegal subdivision.

14) The facts presented at trial regarding damages suffered by plaintiff resulted in an award of $20,000 for nuisance. Further hearing and briefing are required for any additional argument for damages.

15) The issues submitted to this [c]ourt by the Intermediate Court of Appeals do not include a resolution of zoning and land use practices or matters by the defendants and have not heretofore been considered nor will they for purposes of this decision.

CONCLUSIONS OF LAW

1) Since defendants did not deliberately or intentionally violate MM III Covenants, injunctive relief is not appropriate.

2) Since defendants did not assume the risk of violating the MM III Covenants,

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