Kellberg v. Yuen. , 135 Haw. 236 ( 2015 )

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Electronically Filed
Supreme Court
SCWC-12-0000266
15-APR-2015
08:39 AM
IN THE SUPREME COURT OF THE STATE OF HAWAI#I
---o0o---
MARK C. KELLBERG, Respondent/Plaintiff-Appellant,
vs.
CHRISTOPHER J. YUEN, in his capacity as Planning
Director, County of Hawai#i, and COUNTY OF HAWAI#I,
Petitioners/Defendants-Appellees.
SCWC-12-0000266
CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
(CAAP-12-0000266; CIV. NO. 07-1-157)
APRIL 15, 2015
RECKTENWALD, C.J., NAKAYAMA, McKENNA, AND POLLACK, JJ., AND
CIRCUIT JUDGE GARIBALDI, IN PLACE OF WILSON, J., RECUSED
OPINION OF THE COURT BY RECKTENWALD, C.J.
This appeal requires us to consider the circumstances
under which a court must consider ordering the joinder of unnamed
parties under Rule 19 of the Hawai#i Rules of Civil Procedure
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(HRCP).
A dispute arose when the Planning Director of the
County of Hawai#i (Planning Director) approved the application of
Michael Pruglo to consolidate and resubdivide the pre-existing
lots on his 49-acre parcel of land in Ninole, Hawai#i (Subject
Property). Respondent/plaintiff-appellant Mark C. Kellberg, who
owned land adjacent to the Subject Property, objected to the
approval because he claimed that the consolidation and
resubdivision violated the Hawai#i County Subdivision Control
Code, also known as Chapter 23 of the Hawai#i County Code (HCC),
by increasing the number of lots on the Subject Property.
Kellberg later filed suit against
petitioners/defendants-appellees, Christopher J. Yuen, in his
capacity as Planning Director, and the County of Hawai#i
(collectively, “County Defendants”) in the Circuit Court of the
Third Circuit.
Kellberg’s complaint included six counts: Count I
alleged that the Planning Director violated Chapter 23; Count II
alleged that the Planning Director’s violations of Chapter 23
rendered the subdivision void and entitled Kellberg to a
declaratory judgment; Count III alleged that the County
Defendants violated Kellberg’s right to due process; Count IV
alleged that the Planning Director abused his discretion by not
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remedying the violations of Chapter 23 in a timely manner; Count
V alleged that Kellberg was entitled to an injunction requiring
the County Defendants to comply with Chapter 23; and Count VI
alleged that Kellberg was entitled to monetary damages. Kellberg
prayed for a declaratory judgment that the subdivision was
illegal and void under Chapter 23, a decree of specific
performance for the Planning Director to bring the subdivision
into compliance with Chapter 23, an injunction enjoining further
subdivision of the Subject Property inconsistent with Chapter 23,
monetary damages, and attorney’s fees and costs.
The circuit court granted the County Defendants’ motion
for summary judgment on all counts. Kellberg appealed, and the
Intermediate Court of Appeals (ICA) vacated and remanded with
instructions for the circuit court to dismiss the case for lack
of subject matter jurisdiction because Kellberg failed to exhaust
his administrative remedies. Kellberg filed an application for a
writ of certiorari, which was accepted.
This court held that the ICA erred “by holding that
Kellberg’s Complaint should have been dismissed for lack of
subject matter jurisdiction based on the exhaustion doctrine.”
Kellberg v. Yuen, 131 Hawai#i 513, 534, 319 P.3d 432, 453 (2014)
(“Kellberg I”). Accordingly, this court vacated the ICA’s
judgment and remanded to the ICA for consideration of the
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remaining issues raised by Kellberg in his appeal. Id. at 537,
319 P.3d at 456.
On remand, the ICA held that the Planning Director’s
approval of Pruglo’s subdivision was invalid because it increased
the number of lots, and therefore, Kellberg was entitled to
judgment as a matter of law on Counts I and II. The ICA further
held that Counts III and IV were moot. The ICA vacated the
circuit court’s judgment in favor of the County Defendants and
remanded to the circuit court.
We accepted the County Defendants’ timely application
for a writ of certiorari, which presented the following
questions:
1. Where the undisputed evidence demonstrated the
subject property consists of six, not seven
lots, was it error to declare the subdivision
invalid?
2. Prior to vacating the judgment in favor of the
County and entering judgment in favor of
Kellberg, should the ICA have considered all of
the County’s arguments which were relied upon by
the Circuit Court in granting summary judgment?
3. When a party seeks to invalidate a subdivision
must the owners of the subject property be
joined as parties prior to voiding the
subdivision?
As set forth below, the ICA erred in ruling on the
merits of Kellberg’s claims without addressing whether the owners
of the lots within the Subject Property (lot owners) were
required to be joined as parties under HRCP Rule 19. Because
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Kellberg sought to have the subdivision declared void, the lot
owners were necessary parties under Rule 19(a). Nothing in the
record establishes that they could not have been joined.
Therefore, we vacate the judgments of the ICA and circuit court
and remand to the circuit court with instructions to order the
joinder of the lot owners under Rule 19.
On remand, if it is not feasible to join the lot
owners, the circuit court must consider the factors set forth in
HRCP Rule 19(b) and determine whether in equity and good
conscience the action should proceed among the parties before it,
or whether the action should be dismissed, the lot owners thus
being regarded as “indispensable.” In other words, a court may
not reach the merits of a case until either the necessary parties
are joined, or the court determines that the action may proceed
in their absence.
I. Background
A. Factual background
In April 2000, Prudential Orchid Isle Properties
(Prudential) requested from the County of Hawai#i Planning
Department a determination of the number of pre-existing lots1 on
1
HCC § 23-3(21) (Supp. 2012) defines “pre-existing lot” as “a
specific area of land that will be treated as a legal lot of record based on
criteria set forth in this chapter.”
HCC § 23-118(a) (2005) provides that the Planning Director
(continued...)
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a 49-acre parcel of land zoned as AG 202 in Ninole, Hawai#i.
Kellberg I, 131 Hawai#i at 516, 319 P.3d at 435. On May 22,
2000, then-Planning Director, Virginia Goldstein, wrote to
Prudential that the Subject Property consisted of six pre-
existing lots. Id. A map attached to Goldstein’s letter showed
that the larger 48.47–acre portion of the Subject Property
consisted of five adjoining lots, and that the smaller 0.6–acre
non-contiguous portion of the Subject Property constituted a
sixth lot (identified as Lot 4 on the map). Id.
In December 2003, the then-owners of the Subject
Property informed the Planning Department that they desired to
consolidate and resubdivide the Subject Property and believed
1
(...continued)
shall certify that a lot is pre-existing if the lot
meets one of the following criteria:
(a) The lot was created and recorded prior to November
22, 1944 or the lot was created through court order
(e.g. partition) prior to July 1, 1973, and the lot
had never been legally consolidated, provided that no
preexisting lot shall be recognized based upon a lease
except for a lease which complied with all other
applicable laws when made, including Territorial
statutes regulating the sale or lease of property
. . . , and on September 25, 2002, the proposed lot
contains a legal dwelling, or has been continuously
leased since January 8, 1948, as a separate unit.
(b) The lot was created prior to December 21, 1966, as
an agricultural lot in excess of twenty acres pursuant
to County ordinance.
2
“AG 20” means the land is in an agricultural district, so under
Chapter 25 of the HCC, the parcel may not include a lot smaller than twenty
acres. HCC § 25-5-71 (Supp. 2009).
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that the property consisted of at least seven lots. Id. In June
2004, Yuen, who had taken over as Planning Director, responded
that the Subject Property consisted of two separate lots, one of
which was the small non-contiguous plot. Id.
Also in 2004, Pruglo purchased the Subject Property.
Id. In January 2005, Sidney M. Fuke, a planning consultant
working with Pruglo, wrote to the Planning Director to
memorialize a discussion between Fuke and Yuen, in which Fuke
claimed that the Planning Director agreed that based on
Goldstein’s May 2000 letter, the Subject Property consisted of
six pre-existing lots. Id. On April 7, 2005, Fuke, on Pruglo’s
behalf, filed a “Consolidation/Resubdivision Application” with
the Planning Department, seeking to consolidate and resubdivide
the Subject Property’s six pre-existing lots into six new lots.
Id.
On June 1, 2005 the Planning Director granted tentative
approval of the preliminary plat map included with Pruglo’s
application. Id. Fuke submitted a final plat map to the
Planning Director on July 1, 2005. Id. Both the preliminary
plat map and the final plat map identified a 48-acre portion of
the Subject Property as “Parcel 1,” and divided Parcel 1 into six
lots. Id. Both maps also showed the existence of a 0.6-acre
non-contiguous portion of the Subject Property. Id. While the
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non-contiguous portion was labeled “Parcel 2” on the preliminary
plat map, it was not labeled on the final plat map. Id.
In July 2005, the Planning Director approved Pruglo’s
consolidation and resubdivision application. Id. Kellberg, an
owner of a parcel of land adjacent to the Subject Property,
claimed that he first learned of Pruglo’s application and the
Planning Director’s approval “on August 11, 2005, when he
observed a ‘for sale’ sign on the Subject Property, and a realtor
later called him with an offer to sell him a newly created lot
along his property line.” Id. at 517, 319 P.3d at 436. The next
day, Kellberg went to the Planning Department and attempted to
file an appeal. Id. A Planning Department employee informed
Kellberg that he could not file an appeal because the thirty-day
period for filing appeals had already passed. Id. Kellberg left
his contact information with the employee and requested that the
Planning Director call him later that day. Id. The Planning
Director did not call Kellberg. Id.
Kellberg voiced his concerns about the subdivision
approval in letters to the Planning Director on August 16, 2005,
and January 17, 2006. Id. In both letters, Kellberg explained
that because the subdivision resulted in seven lots instead of
six, it was inconsistent with the Planning Director’s prior
approval for a six-lot subdivision. Id. Kellberg further
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explained that this error was evident in the final subdivision
plan on file with the Planning Department, which revealed that
the Planning Department did not account for the existence of the
non-contiguous portion of the Subject Property. Id.
In March 2006, Kellberg requested from the Planning
Department information on how to appeal the Planning Director’s
approval of Pruglo’s subdivision application to the Board of
Appeals, County of Hawai#i (BOA). Id. The Chairman of the BOA
informed Kellberg that he could not appeal because the thirty-day
period for filing appeals had passed. Id.
On April 19, 2006, Pruglo submitted a second
consolidation and resubdivision application to the Planning
Department, this time seeking to consolidate the non-contiguous
portion of the Subject Property with one of the six lots created
by the previous subdivision. Id. at 517-18, 319 P.3d at 436-37.
Kellberg asked the Planning Director to notify him when Pruglo’s
subdivision application was approved. Id. at 518, 319 P.3d at
437.
Several months later, in August 2006, Kellberg’s
counsel informed the Planning Director that he assumed an appeal
was premature because Kellberg had not received notice of any
action on behalf of the Planning Director in regards to Pruglo’s
pending application. Id. Kellberg’s counsel requested
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notification of when tentative approval was granted. Id.
The following passage is taken from an October 23, 2006
letter from the Planning Department to Kellberg and his counsel:
On May 22, 2000, the Planning Department sent a letter
on this subject stating that the department recognized
six pre-existing lots within this tax map key [(TMK)]
parcel. However, in response to a December 24, 2004
request to recognize seven lots, based on some old
plantation camp houses, the Planning Department sent a
letter stating that only two lots were recognized.
This was a mistake, because the Department should have
respected the previous determination. Later, Mr.
Fuke, representing the owner, met with me to discuss
the case for more lots based on the old houses. . . .
When [Fuke] brought it to my attention that the
Department had previously recognized six lots, I told
Mr. Fuke that we would honor the previous letter,
which is our general policy. I did not re-analyze the
number of lots based upon the old houses.
[Pruglo] then submitted a consolidation/resubdivision
(Sub. 05-00064) based on the six pre-existing lots.
As Mr. Kellberg correctly points out, there was a
mistake in the approval of that subdivision. One of
the six recognized lots was a 0.699 acre portion of
Grant 11,070. For some reason, it was not contiguous
with the remainder of TMK No. 3-2-2-35. In the
consolidation/resubdivision, the Planning Department
did not notice that this noncontiguous portion had
been included in the lot count. Thus, it remained
separate, and is now TMK No. 3-2-2-110. Thus, with
the six lots in Sub. 05-00064 and parcel 110, there
are now seven lots instead of six.
I am not going to do anything to undo this situation
at this time. Sub. 05-00064 has received final
subdivision approval and at least some of the lots
have been sold. Given that parcel 110 is physically
separated from the remainder of Sub. 05-00064, and
from any property owned by the subdivider, I cannot
see a way to erase its separate existence.
(Emphases added).
Kellberg responded to the Planning Director in a
February 6, 2007 letter, asserting that it was within the
Planning Director’s power under Chapter 23 “to resolve the
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original lot count ‘mistake’ by simply . . . reducing the total
number [of lots] created to the requisite six.” Kellberg I, 131
Hawai#i at 519, 319 P.3d at 438.
B. Proceedings in the circuit court and before the BOA
In May 2007, Kellberg filed a complaint in the circuit
court against the County Defendants. Id. Kellberg’s complaint
included six counts.
Although not pled with precision, Count I alleged the
Planning Director violated Chapter 23 of the HCC by approving
Pruglo’s application because the subdivision resulted in seven
lots rather than two, and that Kellberg was “a person aggrieved”
by the approval; Count II alleged that the Planning Director’s
violations of Chapter 23 rendered the subdivision void and that
Kellberg was entitled to a declaratory judgment as to these
violations; Count III alleged that the County Defendants violated
Kellberg’s right to due process under the United States and
Hawai#i constitutions by not providing him with notice of the
Planning Director’s approval of Pruglo’s application and by
depriving him of an opportunity to voice his objections to the
approval; Count IV alleged that the Planning Director abused his
discretion by not remedying the violations of Chapter 23 in a
timely manner and thus his approval of the subdivsion was void;
Count V alleged that Kellberg was entitled to an injunction
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requiring the County Defendants to comply with Chapter 23 and
prohibiting them from permitting more than two lots on the
Subject Property and from allowing any subdivision of the Subject
Property other than in accordance with the HCC; and Count VI
alleged that Kellberg’s property had been “adversely and
materially impacted” by the Planning Director’s approval of
Pruglo’s subdivision application, that Kellberg suffered
“material and substantial disadvantage and monetary harm,” and
that he was entitled to monetary damages. Id. at 519-20, 319
P.3d at 438-39. Counts II-VI incorporated all of the allegations
in the prior counts.
The complaint included the following prayer for relief:
A. Pursuant to all Counts, that SUB-05-00064 be
declared illegal and violative of the
Subdivision Control Code and therefore void; and
B. That pursuant to Count II and Chapter 632 this
Court declare that Defendant Yuen’s conduct in
approving SUB-05-00064 as described hereinabove
is illegal and void as against public policy;
and
C. That pursuant to Count III and the Fifth and
Fourteenth Amendments to the United States
Constitution and Article I, § 5 of the Hawai#i
Constitution Plaintiff be provided procedural
and substantive due process with notice and an
opportunity to be heard on the merits of SUB-05-
00064; and
D. That pursuant to Count IV this Court find
Defendant Yuen’s refusal to act to correct SUB-
05-00064 constitutes an abuse of discretion and
direct him to take such actions as are necessary
to correct SUB-05-00064 to comply with the
Subdivision Control Code and Zoning Code; and
E. That pursuant to Count V this Court issue its
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mandatory injunction requiring Defendant Yuen
correct SUB-05-00064 and restraining and
enjoining Defendant Yuen and Defendant County
from approving further subdivision of the
Subject Property unless and until the Subject
Property is brought into compliance with the
Subdivision Control Code; and
F. That pursuant to Count VI this Court award
Plaintiff monetary damages according to proof at
trial; and
G. That Plaintiff be awarded his attorney’s fees
and costs; and
H. That this Court grant Plaintiff such other and
further relief as is just and proper.
(Emphasis added).
The County Defendants raised ten defenses in their
answer, including that Kellberg failed to join necessary parties
and failed to exhaust administrative remedies.
In July 2008, the County Defendants filed a motion to
dismiss for failure to exhaust administrative remedies and for
failure to join an indispensable party (County’s Motion to
Dismiss). They argued that (1) the circuit court did not have
subject matter jurisdiction because Kellberg failed to exhaust
all available administrative remedies by not appealing the
Planning Director’s October 23, 2006 letter within thirty-days,
and (2) dismissal was warranted because Pruglo was an
“indispensable” party under HRCP Rule 19.3
3
HRCP Rule 19 (2000) provides, in relevant part:
(a) Persons to be Joined if Feasible. A person who is
subject to service of process shall be joined as a
(continued...)
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At the hearing on the motion,4 the following exchange
occurred between the circuit court, Kellberg’s counsel
(Whittaker), and the County Defendants’ counsel (Udovic):
THE COURT: -- okay. The indispensable parties
one really depends on what remedies you’re -- you’re
really seeking. If you’re seeking to undo the
subdivision, then maybe Mr. Udovic’s correct. If
you’re just seeking damages, maybe not.
. . . .
. . . But if I determined that it is an illegal
subdivision, it will definitely affect the property
rights of the people who have now bought the
3
(...continued)
party in the action if . . . (2) the person claims an
interest relating to the subject of the action and is
so situated that the disposition of the action in the
person’s absence may (A) as a practical matter impair
or impede the person’s ability to protect that
interest or (B) leave any of the persons already
parties subject to a substantial risk of incurring
double, multiple, or otherwise inconsistent
obligations by reason of the claimed interest. If the
person has not been so joined, the court shall order
that the person be made a party. . . .
(b) Determination by Court Whenever Joinder Not
Feasible. If a person as described in subdivision
(a)(1)-(2) hereof cannot be made a party, the court
shall determine whether in equity and good conscience
the action should proceed among the parties before it,
or should be dismissed, the absent person being thus
regarded as indispensable. The factors to be
considered by the court include: first, to what
extent a judgment rendered in the person’s absence
might be prejudicial to the person or those already
parties; second, the extent to which, by protective
provisions in the judgment, by the shaping of relief,
or other measures, the prejudice can be lessened or
avoided; third, whether a judgment rendered in the
person’s absence will be adequate; fourth, whether the
plaintiff will have an adequate remedy if the action
is dismissed for nonjoinder.
(Emphases added).
4
The Honorable Glenn S. Hara presided, and continued to do so until
December 17, 2010. The Honorable Ronald Ibarra presided thereafter.
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subdivided lots.
MR. WHITTAKER: Indeed. Indeed. But that is
not Mr. Kellberg’s complaint and that is not the suit
that he has filed; and indeed if the County’s got a
problem with that or a concern, then all of the
remedies Rules 19 [joinder of persons needed for just
adjudication], 20 [permissive joinder of parties], 14
[third-party practice], 13 [counterclaim and cross-
claim], they join who they want, but they can’t make
[Kellberg] sue his neighbor because he complains
against the County’s Planning Director for his illegal
action. They can’t just say, well, Rule 19, you’ve
got to go through your neighbor. No, no. The bad act
complaint that was committed by the County of Hawaii
and its Planning Director.
. . . What pleading would I create when I have
had no complaint from Mr. Kellberg versus Mr.
[Pruglo]? Mr. [Pruglo] is the beneficiary of the
County’s illegal action . . . .
. . . If they want him in, let them bring him
in.
MR. UDOVIC: Your Honor, the real issue here is
that the lawsuit filed by Mr. Kellberg is going to
affect Mr. [Pruglo] and the other persons by holding
the property, and we’re not the one doing that. Mr.
Kellberg is. It’s his obligation to bring in the
necessary parties under Rule 19 to make sure that just
determination of the action takes place.
THE COURT: Okay. I’m going to, again, deny
your motion with respect to the dismissal because of
the lack of joinder of indispensable parties. At this
point, it doesn’t seem to me that the landowners are
indispensable.
If the Court -- the Court given the, uh,
requested relief I think [it] can give complete relief
in terms of what Mr. Kellberg’s asking for. I think
it’s the County’s anticipation of the fallout of that
relief that will, uh, possibly, uh, affect the rights
of other parties; and at that point, I don’t know if
it’s more of a problem of the County versus those
landowners and the subdivider without Mr. Kellberg’s
participation in that matter if it gets that far.
In September 2008, the circuit court entered an order
denying the County’s Motion to Dismiss, finding that the County
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failed to establish that administrative processes were available
to Kellberg, and that while Pruglo “has an interest in SUB 05-
00064, he is not an indispensable party to this action.”
In May 2009, Kellberg filed a motion for partial
summary judgment as to Counts I (Violation of Statute), II
(Declaratory Judgment), and IV (Abuse of Discretion) of the
complaint. Kellberg I, 131 Hawai#i at 521, 319 P.3d at 440. In
opposition, the County Defendants again argued that Kellberg
failed to join indispensable parties. In July 2009, the circuit
court entered an order granting Kellberg’s motion for partial
summary judgment, concluding that Kellberg should have been
afforded an opportunity to appeal the Planning Director’s
October 23, 2006 letter, and “remand[ing]” the case to the BOA to
consider Kellberg’s appeal of the October 23, 2006 letter. Id.
It appears the circuit court did not address the issue of
indispensable parties.5
In September 2009, Kellberg filed a petition with the
BOA appealing the Planning Director’s: (1) January 12, 2005
5
Subsequently, on August 12, 2009, “Fuke submitted a revised
application for Subdivision 06–000333, to consolidate the non-contiguous
parcel (TMK 3–2–02:110) with another lot created by Subdivision 05–00064 (TMK
3–2–02:68),” which revised Pruglo’s April 19, 2006 application. Kellberg I,
131 Hawai#i at 518 n.3, 319 P.3d at 437 n.3. “Although the final approval of
Subdivision 06–000333 is not included in the record on appeal,” id., it
appears the consolidation was approved in December 2010. On April 13, 2011,
Daryn Arai, the Planning Department’s Planning Program Manager and an employee
of the Planning Department since 1987, declared that the non-contiguous lot
had “been consolidated with an adjoining property.”
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decision to honor Goldstein’s May 22, 2000 determination that the
Subject Property consisted of six lots; (2) July 11, 2005
approval of Pruglo’s first consolidation and resubdivision
application; and (3) October 23, 2006 letter stating that the
Planning Director had valid reasons for not bringing the Subject
Property into compliance with Chapter 23. Kellberg I, 131
Hawai#i at 521, 319 P.3d at 440. The County Defendants filed a
motion to dismiss Kellberg’s petition. Id. at 522, 319 P.3d at
441. The County Defendants argued that Kellberg lacked standing,
the Planning Director’s October 23, 2006 letter was not an
appealable decision, and that the BOA lacked jurisdiction because
Kellberg failed to file an appeal within the thirty-day time
period allowed for appeals.
Following a hearing, the BOA dismissed Kellberg’s
petition on the basis that it lacked jurisdiction because
Kellberg’s appeal of the Planning Director’s October 23, 2006
letter was filed after the thirty-day appeal period had expired.
Id.
In March 2010, Kellberg then filed in the circuit court
a motion for partial summary judgment on Count V (Injunction) and
for Injunction Against the County of Hawai#i (Motion for
Injunction). Id. Kellberg’s Motion for Injunction sought “an
injunction remanding the case to the Planning Department with
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instructions to the Planning Director to bring the subdivision
into compliance with [Chapter 23 of the HCC], and enjoining the
County Defendants from ‘allowing the further sale, transfer of
ownership, or development and improvement of lots created’ by the
subdivision until compliance is demonstrated.” Id.
In opposition, the County Defendants argued that an
injunction was not warranted because, inter alia, such relief
would adversely affect the rights of the lot owners who were not
parties to the suit, and thus would violate HRCP Rule 19.
At the start of the April 28, 2010 hearing on the
Motion for Injunction, the circuit court sought clarification on
why the parties were before the court in light of its remand to
the BOA:
THE COURT: . . . I just have a couple
questions, and I understand that this is basically a
motion for the summary judgment on injunctive relief,
but my recollection is that this case was remanded
back to the [BOA]?
MR. UDOVIC: Yeah. But the problem is it never
came from there the first time, Judge.
THE COURT: Oh, okay.
MR. UDOVIC: It was sent there. You sent it to
there. You called it remand, but it never came up
from the [BOA].
THE COURT: I thought that was more like a -- an
order to -- to have the hearing on the appeal.
. . . .
. . . I guess the question I had was, didn’t
they finally dismiss the appeal on the same grounds
that I found that Mr. Kellberg had a basis to go ahead
and have an appeal, and that is -- the timing of all
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of these matters did not allow him to adequately lodge
an appeal with the board?
. . . .
MR. WHITTAKER: . . . I pointed out to the [BOA]
and to Mr. Udovic, in response to the motion at that
proceeding, that it was contrary to the intent and to
the letter of Your Honor’s order.
. . . It was manifestly Your Honor’s intent that
the [BOA] and the administrative agencies deal with
the substance of this problem. Having failed to do
so, we have asked Your Honor, on this motion, to deal
with it in a very direct way, by instructing the
planning director to bring it into compliance.
The court then considered whether it was appropriate to
grant the Motion for Injunction.
MR. UDOVIC: I don’t think this is an
appropriate vehicle for a summary judgment. I think
there needs to be an evidentiary hearing with respect
to the issues in this particular case. As we’ve
pointed out, Your Honor, there are multiple issues in
this case which exist, irrespective of the claims, the
claims that title to these properties is being
affected by requested [sic] injunction, that these
parties aren’t parties to the -- to the -- to the –-
to these proceedings. They weren’t named parties. I
just stand on the issues that were submitted already
in the documents that were submitted.
THE COURT: So why can’t I just grant the motion
with respect to, as Mr. Whittaker says, having the
planning director put things in order as it should
have been, and you guys deal with the parties that
need to be dealt with?
MR. UDOVIC: Well, if that’s the case, Your
Honor, I would ask that, if the court issues an order
like that, I would ask for an interlocutory appeal.
THE COURT: Okay, but why can’t -- what would be
the problem with that?
MR. UDOVIC: Because what he’s asking you to do,
Judge, is to have the planning director somehow, like
there’s three different pieces of property which have
already been sold. There’s bona fide purchasers on
those lots. Are we going to disassociate those
persons with – with -- from their properties? Are we
gonna dispel them?
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THE COURT: That’s your problem, right? You may
have to buy ‘em out, you may have to pay ‘em, I don’t
know.
MR. UDOVIC: Well, but those are issues, I
think, which -- which underlie this entire action,
Your Honor.
THE COURT: But then why are we at that point
now that we have those three buyers?
MR. UDOVIC: Because the properties were sold
before this -- this lawsuit was even filed. You know,
they were already owner of this property before this -
- before Mr. Kellberg filed this action.
THE COURT: Mr. Whittaker?
MR. WHITTAKER: There was an owner, actually two
owners, I believe, before the action was filed. There
were no bona fide purchasers for value. These parties
knew, or should have known, because Mr. Pruglo knew
from the day after the illegal subdivision was
approved, that it was objected to by Mr. Kellberg,
because a realtor presented at his property line
offering to sell him a two-acre parcel of a 49-acre
adjoining parcel. And he immediately began questions
that’s led him, four and a half years later, to Your
Honor’s courtroom asking that the planning director be
told to bring the subdivision into compliance with the
subdivision control code.
Yes, Judge, as you pointed out, they may have to
deal with those two buyers. One of them is -- has
subsequently sold to another party, who certainly
cannot claim to be ignorant of the proceedings. She
was involved in the [BOA] proceedings. The other
buyer, or owner, was Sydney Fuke, the individual who
was instrumental in securing this subdivision for the
buyer. And they are basically problems that they
created with the planning director and the planning
department, and they are not Mr. Kellberg’s problem.
. . . .
MR. WHITTAKER: . . . I know the court will,
rely on Hawaii law in determining the issuance of the
injunction. It’s clear that we have met the three-
part test, including the likelihood of prevailing on
the merits. We’ve prevailed already on Your Honor’s
determination that there is a problem with compliance
with the subdivision control code. The balance of
irreparable damage clearly favors Mr. Kellberg in this
lawsuit with the planning director and, as Your Honor
has pointed out, they turned their back on the
opportunity that this court gave them to solve it the
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first time. It now requires a more clear
direction. . . .
THE COURT: . . . I’m inclined to go ahead and
grant the motion, but I’m reluctant to do so, at the
same time. And let me tell you why.
First of all, in the back of my mind, there is a
-- a feeling that perhaps if, at least on a summary
judgment level, the issue of whether or not there may
be adequate remedies at law in terms of damages would
preclude the granting of a motion for summary
judgment.
Second of all, the arguments that I have not
fully resolved in my mind right now is whether
injunctive relief of the nature that you’re requesting
would, in fact, involve the part -- the interest
parties who are not joined in the suit. Being that it
would affect parcels that are already, at least on the
book, legally subdivided and already conveyed. So, at
this point, I really haven’t made up my mind, so I’ll
take the matters under advisement, and I’ll reread the
memos and consider the evidence.
(Emphases added).
The circuit court subsequently entered an order denying
Kellberg’s Motion for Injunction, explaining in pertinent part:
2. [Kellberg’s Motion for Injunction] seeks to
have this court issue an injunction prayed for in
Count V in the initial complaint in this case filed on
May 11, 2007. [Kellberg’s] Motion for Partial Summary
Judgment filed on May 27, 2009 resulting in the
court’s June 24, 2009 order remanding the matter to
the [BOA] did not specifically invoke Count V of the
complaint. This court’s order dated June 24, 2009,
however, rendered Count V moot as the remand addressed
[Kellberg’s] right and opportunity to be heard
referred to in Count V.
3. The court denies [Kellberg’s] motion for the
additional reason that [Kellberg] has failed to join
the property owners of the subdivided property who
would be affected by undoing the subdivision as
required by the provisions of Rule 19 of [the HRCP.]
4. The motion for summary judgment would also
be denied because there are genuine issues of material
fact as to the equities of granting the motion in
terms of the effect of the injunction on others even
if they were found to be not required to be joined by
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Rule 19 [of the] HRCP. [Kellberg’s] motion is not for
a temporary restraining order or preliminary
injunction to maintain the status quo. It is for a
mandatory injunction to undo a completed action of a
county agency upon which others have already relied.
Granting the plaintiff injunctive relief would entail
possible irreparable harm to others. The extent of
such harm needs to be balanced as against the harm
plaintiff sustains if injunction is not granted.
These are material issues of which the facts are not
undisputed.
5. Assuming there were no genuine issues of
material fact involving the irreparable harm involved,
the court would still deny the motion for injunctive
relief finding that the equities in this matter do not
favor [Kellberg] even assuming the property may have
been subdivided in violation of the provisions of the
[HCC]. A mandatory injunction undoing the subdivision
would directly affect vested property rights of the
persons who are now owners of the subdivided property
which clearly outweighs the indirect effects of a
presumed illegal subdivision that an adjoining
property owner such as Mr. Kellberg might suffer due
to, for example, increased density of use of the
adjoining property.
(Emphases added).
Approximately three weeks later, the circuit court
entered a second order denying the Motion for Injunction.
Kellberg I, 131 Hawai#i at 523, 319 P.3d at 442. The second
order, which was substantially similar to the first order,
concluded, in relevant part:
1. Plaintiff’s Motion for Partial Summary Judgment
on Count V is deemed moot in light of the
court’s ruling on Plaintiff’s Motion for Partial
Summary Judgment on Count I (Violation of
Statute), Count II (Declaratory Judgment) and
Count IV (Abuse of Discretion) filed May 27,
2009 ordering the case to the [BOA] for
consideration of the issues. Plaintiff’s
failure to exhaust his administrative remedies
forecloses this court from further action in
this matter.
2. Furthermore, the court finds that owners of the
subdivided property are indispensible parties to
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this action as required under Rule 19 of the
HRCP, as to the relief sought on Count V.
3. Plaintiff’s failure to join owners of the
subdivided property means the action cannot
proceed in good conscience against the parties
before the court.
4. A mandatory injunction undoing the subdivision
would directly affect vested property rights of
the persons who are now owners of the subdivided
property and are not parties to this action.
5. Genuine issues of material fact exist when
balancing the equities between the unnamed
property owners and the Plaintiff which would
result in irreparable harm to the unnamed
property owners if the court were to grant
Plaintiff’s request for a permanent injunction.
6. Even assuming no genuine issues of material fact
are in existence, the court denies Plaintiff[’]s
motion for a permanent injunction. The grant of
an injunction is an equitable remedy and the
court is required to balance the equities
between the Plaintiff and the unnamed
indispensable parties.
7. Even in the event the court were to find the
subject property was subdivided in violation of
the provisions of the Hawaii Subdivision Code, a
mandatory injunction would be denied. The
issuance of an injunction would directly affect
vested property rights of the persons who are
now owners of parcels of the subdivided
property. The equities of the vested property
owners clearly outweigh the indirect effect of a
presumed illegal subdivision that an adjoining
property owner might suffer.
(Emphases added).
On December 9, 2010, nearly two months after the
circuit court filed its second order, Kellberg filed a Motion for
Leave to File First Amended Complaint (Motion to Amend).
Kellberg explained that although he continued to disagree with
the circuit court as to the issue of indispensable parties, he
had “no alternative but to request permission to amend his
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Complaint” to include the lot owners as parties. Kellberg’s
proposed amended complaint, which was attached to his memorandum
as an exhibit, added a number of new counts and named the
following defendants in addition to the County Defendants:
Pruglo; Christie D. Guastella and John H. Payne, II; John Scott
McCann and Frances Santa Maria McCann; and Susan T. McGuire, as
owners of lots within the Subject Property. Those parties were
named defendants as to all counts, including the additional
counts contained in the amended complaint.
The County Defendants opposed the Motion to Amend,
arguing that the amended complaint added new allegations and
claims, which Kellberg was dilatory in raising and would
“unfairly prejudice the County.” The County Defendants further
argued that because additional discovery may be needed with
respect to the additional parties, Kellberg “should not be
allowed to impose these costs, expenses and delays upon the
County simply because he forgot to include necessary parties in
his complaint . . . .”
The circuit court granted Kellberg’s Motion to Amend on
March 3, 2011. Kellberg, however, did not file the amended
complaint.
On April 21, 2011, the County Defendants moved for
summary judgment on all counts, asking the court to dismiss the
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complaint. Kellberg I, 131 Hawai#i at 523, 319 P.3d at 442. The
County Defendants argued that (1) Pruglo’s application to
consolidate and resubdivide the Subject Property did not seek to
change the number of lots on the property and the number of lots
did not change, and thus Pruglo’s application was exempt from the
standards and requirements of the HCC; (2) Kellberg’s due process
claims were without merit; (3) Kellberg’s abuse of discretion
claim was without merit; (4) Kellberg made a strategic decision
not to name the owners of the lots created by the consolidation
and resubdivision of the Subject Property as defendants, it was
too late to join the lot owners because the two-year statute of
limitations had run, and the case should not proceed without
them; and (5) Kellberg failed to exhaust his administrative
remedies by failing to appeal within thirty days of both the
Planning Director’s approval of Pruglo’s application and the
BOA’s ruling against Kellberg, and the circuit court therefore
lacked jurisdiction.
The County Defendants argued that the lot owners were
indispensable parties because by seeking to void the subdivision,
Kellberg’s action “would severely affect the property owners who
are not parties and cannot be parties.” The County Defendants
pointed out that even after the circuit court granted Kellberg
permission to add the indispensable parties, Kellberg failed to
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file his amended complaint and did not add them as parties.
Kellberg responded that: (1) the maps on file with the
Planning Department, together with the Planning Director’s
June 2, 2004 letter, indicate the Subject Property consisted of
two pre-existing lots, not six or seven; (2) Kellberg exhausted
all administrative remedies available to him prior to filing the
lawsuit with the circuit court; and (3) the owners of the lots
were not indispensable parties, or were only indispensable as to
Count V of Kellberg’s complaint.
The County Defendants replied that Kellberg failed to
put forth any admissible evidence refuting the County Defendants’
arguments, and there were no genuine issues of material fact.
At the May 2011 hearing on the County Defendants’
motion for summary judgment, the following exchange occurred
between the attorneys and the court:
MR. WHITTAKER: But, Judge, other than what I
put in the Memorandum in Opposition and referenced
back in the record, I don’t have a whole lot more to
add. It is concerning to me that this motion was
brought when it was by counsel who is new to the case,
to a Court that is new to the case. . . . [O]n today’s
motion I can stand on my papers, Judge, there’s enough
in the record. It just cannot be granted.
THE COURT: Yeah, if -- I think you’re correct,
if there’s admissible evidence in the file which you
point out to, certainly the Court should review that.
But frankly, as you stated, you know, whatever the
past record is regarding this, this Court has not
reviewed the entire file. Except the motions and
pleadings in support of the motion before the Court.
. . . .
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So if you want me to review the entire file and
argue that what is in the entire file is supplement to
your position, the Court would appreciate if you would
point out that certain document.
MR. WHITTAKER: Well I believe in our statement
of facts we refer the Court back to the memorandum
that we filed that rebut the spin on the facts that
the Defendants tried to give this court. And it is,
Judge, a spin. Definitively.
And in answer to the allegations that I am
making some kind of scurrilous statement about anybody
here in my opposition; not so, Judge. I am simply
telling the Court the facts as Plaintiff believes the
record clearly supports them. . . .
THE COURT: Okay. Miss Martin?
MS. MARTIN: Thank you, Your Honor.
Your Honor, it’s undisputed that pre-existing
lots were recognized back in 2000. And it’s
undisputed that pre-existing lots are not subject to
the subdivision ordinance. There is [sic] really no
facts in dispute for a jury to decide in this case. .
. . The Defendants are entitled to this -- to have
summary judgment granted their favor. Thank you, Your
Honor.
THE COURT: Okay, I’m going to take it under
submission.
In June 2011, the circuit court granted summary
judgment in favor of the County Defendants on all counts.
Kellberg I, 131 Hawai#i at 523, 319 P.3d at 442.
C. Kellberg’s appeal to the ICA
Kellberg timely appealed to the ICA the order granting
summary judgment in favor of the County Defendants, and eight
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prior orders by the circuit court.6 Kellberg I, 131 Hawai#i at
523, 319 P.3d at 442.
As relevant here, Kellberg argued in his opening brief
that (1) he had no available administrative remedy prior to
filing the lawsuit and his attempt to pursue an administrative
remedy at the BOA had been futile; (2) the circuit court erred in
granting summary judgment in favor of the County Defendants and
“dismissing the case” based on its finding that the lot owners
were “indispensable parties” because there was no evidence in the
record that the lot owners could not have been joined; and (3)
because the subdivision was illegal, the lot owners’ rights did
not vest.
The County Defendants answered, inter alia, that (1)
Kellberg failed to exhaust administrative remedies; (2) Kellberg
made a strategic decision not to name the property owners, who
were “indispensible parties”; and (3) the lot owners had
significant property rights and the Planning Director
appropriately refused to take those away. The County Defendants
6
Kellberg appealed the following eight orders that were identified
in the circuit court’s Final Judgment: (1) July 24, 2009 order granting
Motion for Partial Summary Judgment; (2) September 22, 2010 order denying
Motion for Injunction; (3) October 15, 2010 order denying Motion for
Injunction; (4) June 14, 2011 order denying Motion for Supplemental Injunctive
Relief; (5) June 16, 2011 order denying Motion to Enforce Judgment; (6) June
16, 2011 order granting motion for summary judgment; (7) August 31, 2011 order
granting in part and denying in part Motion to Vacate; (8) January 23, 2012
order denying Motion for Clarification; and 9) February 28, 2012 Final
Judgment. Kellberg I, 131 Hawai#i at 523 n.12, 319 P.3d at 442 n.12.
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also argued that the lot owners could no longer be joined as
defendants because the applicable two-year statute of
limitations, Hawai#i Revised Statutes (HRS) § 657-77, had run,
and neither HRCP Rule 15(c)8 nor Rule 17(d)9 provided relief
because Kellberg knew the identities of the lot owners and “made
7
HRS § 657-7 (1993) provides: “Actions for the recovery of
compensation for damage or injury to persons or property shall be instituted
within two years after the cause of action accrued, and not after, except as
provided in section 657-13.” HRS § 657-13 (1993) provides an exception to the
two-year statute of limitations for plaintiffs who are, at the time the cause
of action accrued, minors, insane, or imprisoned.
8
HRCP Rule 15(c) (2012) provides:
(c) Relation back of amendments. An amendment of a
pleading relates back to the date of the original
pleading when
(1) relation back is permitted by the law that
provides the statute of limitations applicable to the
action, or
(2) the claim or defense asserted in the amended
pleading arose out of the conduct, transaction, or
occurrence set forth or attempted to be set forth in
the original pleading, or
(3) the amendment changes the party or the naming of
the party against whom a claim is asserted if the
foregoing provision (2) is satisfied and the party to
be brought in by amendment (A) has received such
notice of the institution of the action that the party
will not be prejudiced in maintaining a defense on the
merits, and (B) knew or should have known that, but
for a mistake concerning the identity of the proper
party, the action would have been brought against the
party.
9
HRCP Rule 17(d) (2000) provides, in relevant part:
(d) Unidentified defendant.
(1) When it shall be necessary or proper to make a
person a party defendant and the party desiring the
inclusion of the person as a party defendant has been
unable to ascertain the identity of a defendant . . .
.
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a strategic decision” not to name them as defendants. The County
Defendants pointed out that despite the circuit court’s grant of
Kellberg’s motion for leave to amend his complaint to add the lot
owners, Kellberg did not do so.
In his reply, Kellberg conceded the he made a
“strategic decision” not to name the lot owners because they were
“not necessary parties to the action.” Kellberg argued that he
made this decision because the County, not the lot owners, was
responsible for the subdivision approval. Kellberg further
argued that the statute of limitations did not apply and that if
the County was “genuinely concerned” about being subject to
multiple or inconsistent obligations, it “always had the power to
insulate itself by way of a third party complaint.”
In its June 20, 2013 Memorandum Opinion, the ICA
concluded that “Kellberg failed to exhaust the administrative
remedies available to him before commencing his action, leaving
the circuit court without jurisdiction to act on his complaint.”
Kellberg I, 131 Hawai#i at 524, 319 P.3d at 443. Based on the
foregoing conclusion, the ICA vacated the circuit court’s Final
Judgment and remanded the case for an order of dismissal. Id. at
525, 319 P.3d at 444.
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D. Kellberg I
Kellberg sought and this court accepted review of the
ICA’s decision. This court held that the ICA erred “by holding
that Kellberg’s Complaint should have been dismissed for lack of
subject matter jurisdiction based on the exhaustion doctrine.”
Kellberg I, 131 Hawai#i at 534, 319 P.3d at 453. Accordingly,
this court vacated the ICA’s July 19, 2013 Judgment on Appeal,
and remanded to the ICA for “consideration of the remaining
issues raised by Kellberg in his appeal.” Id. at 537, 319 P.3d
at 456.
E. The ICA’s decision on remand
On remand, the ICA considered whether the circuit court
properly granted summary judgment in favor of the County
Defendants. The ICA first concluded the County Defendants were
not entitled to summary judgment on Counts I and II. As noted
above, Count I of Kellberg’s complaint alleged the Planning
Director violated Chapter 23 of the HCC by approving Pruglo’s
application because the subdivision resulted in seven lots rather
than two, and that Kellberg was “a person aggrieved” by the
approval. Id. at 519, 319 P.3d at 438. Count II alleged that
the Planning Director’s violations of Chapter 23 rendered the
subdivision void and that Kellberg was entitled to a declaratory
judgment as to these violations. Id. The ICA therefore
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concluded that the Planning Director’s approval of Pruglo’s
application was invalid, and that Kellberg was entitled to
judgment as a matter of law on Counts I and II. Based on its
disposition of Counts I and II, the ICA concluded that Kellberg’s
constitutional claims asserted in Count III and allegation that
the Planning Director abused his discretion and violated the law
in Count IV were moot. The ICA then vacated the circuit court’s
judgment as to Counts V (Injunction) and VI (Damages) because it
concluded that the circuit court granted summary judgment in
favor of the County Defendants as to Counts V and VI based on its
grant of summary judgment as to Counts I-IV. The ICA did not
address the Rule 19 issues raised by the parties.
The ICA therefore vacated the circuit court’s February
28, 2012 Final Judgment, and remanded with instructions for the
circuit court to enter summary judgment in favor of Kellberg on
Counts I and II, and to conduct further proceedings consistent
with its opinion, including a determination of any appropriate
forms of relief in favor of Kellberg.10
10
In a footnote, the ICA clarified that its ruling as to Count V
should not be construed as a ruling that Kellberg is
entitled to an injunction prohibiting the County “from
permitting more than two (2) lots on the Subject
Property,” which he is not, or any other specific form
of relief. Rather, the circuit court may consider
other appropriate relief on remand.
(Emphasis added).
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The ICA entered its Judgment on Appeal on May 1, 2014,
and the County Defendants timely filed an application for a writ
of certiorari. The County Defendants raise the following three
questions in their application:
1. Where the undisputed evidence demonstrated the
subject property consists of six, not seven
lots, was it error to declare the subdivision
invalid?
2. Prior to vacating the judgment in favor of the
County and entering judgment in favor of
Kellberg, should the ICA have considered all of
the County’s arguments which were relied upon by
the Circuit Court in granting summary judgment?
3. When a party seeks to invalidate a subdivision
must the owners of the subject property be
joined as parties prior to voiding the
subdivision?
II. Standard of Review
This court reviews a grant or denial of summary
judgment de novo. First Ins. Co. of Haw. v. A&B Props., 126
Hawai#i 406, 413, 271 P.3d 1165, 1172 (2012) (citing Nu#uanu
Valley Ass’n v. City & Cnty. of Honolulu, 119 Hawai#i 90, 96, 194
P.3d 531, 537 (2008)).
Furthermore, summary judgment is appropriate if the
pleadings, depositions, answers to interrogatories and
admissions on file, together with the affidavits, if
any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to
judgment as a matter of law. A fact is material if
proof of that fact would have the effect of
establishing or refuting one of the essential elements
of a cause of action or defense asserted by the
parties. The evidence must be viewed in the light
most favorable to the non-moving party. In other
words, we must view all of the evidence and inferences
drawn therefrom in the light most favorable to the
party opposing the motion.
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Id. (quoting Nu#uanu Valley Ass’n., 119 Hawai#i at 96, 194 P.3d at
537) (brackets omitted).
III. Discussion
The County Defendants argue that even if the Planning
Director’s approval of the subdivision was error, the ICA did not
consider alternative arguments raised in the County Defendants’
motion for summary judgment, including Kellberg’s failure to join
indispensable parties. Kellberg responds that although the ICA
did not explicitly address the County Defendants’ alternative
arguments, the ICA implicitly rejected them. Kellberg further
argues that the lot owners are not indispensable parties under
HRCP Rule 19 because they could have been joined by either the
County Defendants or by the court.
Resolution of this appeal requires us to consider HRCP
Rule 19, which was cited by the County Defendants as an
alternative argument in their motion for summary judgment. The
purpose of this rule is to protect the parties, and certain non-
parties who have the requisite interest in the case, to prevent
duplicative litigation and possibly inconsistent judgments. As
set forth below, the ICA erred in ruling on the merits of
Kellberg’s claims without addressing whether the lot owners were
required to be joined as parties under Rule 19. Because Kellberg
sought to have the subdivision declared void under each count,
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which would practically impair or impede the lot owners’ ability
to protect their interests, the lot owners were necessary parties
under Rule 19(a). Nothing in the record establishes that they
could not have been joined, and thus the ICA should have vacated
and remanded with instructions for joinder under Rule 19.
On remand, if it is not feasible to join the lot
owners, the circuit court must consider the factors set forth in
Rule 19(b) and determine whether in equity and good conscience
the action should proceed among the parties before it, or it
should be dismissed, the lot owners thus being regarded as
“indispensable.”
Rule 19, Joinder of Persons Needed for Just
Adjudication, provides in relevant part:
(a) Persons to be Joined if Feasible. A person who is
subject to service of process shall be joined as a
party in the action if . . . (2) the person claims an
interest relating to the subject of the action and is
so situated that the disposition of the action in the
person’s absence may (A) as a practical matter impair
or impede the person’s ability to protect that
interest or (B) leave any of the persons already
parties subject to a substantial risk of incurring
double, multiple, or otherwise inconsistent
obligations by reason of the claimed interest. If the
person has not been so joined, the court shall order
that the person be made a party. . . .
(b) Determination by Court Whenever Joinder Not
Feasible. If a person as described in subdivision
(a)(1)-(2) hereof cannot be made a party, the court
shall determine whether in equity and good conscience
the action should proceed among the parties before it,
or should be dismissed, the absent person being thus
regarded as indispensable. The factors to be
considered by the court include: first, to what
extent a judgment rendered in the person’s absence
might be prejudicial to the person or those already
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parties; second, the extent to which, by protective
provisions in the judgment, by the shaping of relief,
or other measures, the prejudice can be lessened or
avoided; third, whether a judgment rendered in the
person’s absence will be adequate; fourth, whether the
plaintiff will have an adequate remedy if the action
is dismissed for nonjoinder.
(Emphases added).
The purpose of Rule 19 is “to protect the interests of
absent persons as well as those already before the court from
multiple litigation or inconsistent judicial determinations.” 7
Charles Alan Wright, Arthur R. Miller, & Mary Kay Kane, Federal
Practice and Procedure § 1602 (3d ed. 2001) § 1602.11
An analysis under Rule 19 “typically follows two
steps.”12 Marvin v. Pflueger, 127 Hawai#i 490, 499, 280 P.3d 88,
11
Although this treatise interprets Rule 19(a) of the Federal Rules
of Civil Procedure (FRCP), this court has observed that “[b]ecause [HRCP Rule
19 is] in all relevant aspects substantively identical to the federal rule[],
we may look to federal cases interpreting their rules for persuasive
guidance.” Marvin v. Pflueger, 127 Hawai#i 490, 499 n.11, 280 P.3d 88, 97
n.11 (2012).
12
The timing for raising a defense under Rule 19 is critical. In
Marvin, this court held that under HRCP Rule 12(b)(7), the defense of failure
to join a necessary party under Rule 19(a) must be raised by the defendant in
its answer or by motion, and “before pleading if a further pleading is
permitted[.]” 127 Hawai#i at 500, 280 P.3d at 98. Although the term
“necessary parties” is not used in Rule 19(a), Hawai#i courts sometimes refer
to persons that should be joined as parties if feasible under Rule 19(a) as
“necessary parties.” See, e.g., Life of the Land v. Land Use Comm’n, 58 Haw.
292, 298, 568 P.2d 1189, 1194 (1977) (“If the necessary parties cannot be made
parties to the action then the court should determine whether in equity and
good conscience the action should proceed among the parties before it, or
should be dismissed, the absent person(s) being thus regarded as
indispensable.” (internal quotations omitted)). If such a defense is not
timely raised (i.e., in an answer or by motion, and “before pleading if a
further pleading is permitted”) it is deemed waived under Rule 12(b)(h).
Marvin, 127 Hawai#i at 500, 280 P.3d at 98. Marvin further held that Rule 12
and Rule 19 read together allow “the defense of failure to join an
indispensable party under Rule 19(b)” to be raised at any time. Id. at 502,
280 P.3d at 100 (emphasis in original).
(continued...)
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97 (2012) (citing UFJ Bank Ltd. v. Ieda, 109 Hawai#i 137, 142,
123 P.3d 1232, 1237 (2005)). The first step includes
determination of whether Rule 19(a) applies and of whether
joinder is feasible: the court “must determine whether an absent
party should be joined if feasible according to the factors
listed in subsection (a).” Id.Rule 19(a) is applicable when nonjoinder would have
either of the following effects. First, it would
prevent complete relief from being accorded among
those who are parties to the action or, second, the
absentee “claims an interest relating to the subject
matter of the action and is so situated” that the
nonparty’s absence from the action will have a
prejudicial effect on that person’s ability to protect
that interest or will “leave any of the persons
already parties subject to a substantial risk of
incurring double, multiple, or otherwise inconsistent
obligations.”
Wright et al., supra § 1604 (emphasis added).
If Rule 19(a) applies, the court then considers whether
the person is subject to service of process in determining
whether joinder is feasible. If joinder is feasible, the court
must order it. HRCP Rule 19(a) (“A person who is subject to
service of process shall be joined as a party in the action
. . . . If the person has not been so joined, the court shall
order that the person be made a party.” (Emphases added)); see
12
(...continued)
The timing/waiver issues addressed in Marvin are not implicated
here because the County Defendants raised the defense of “necessary parties”
in their Answer. The County Defendants also raised the Rule 19(a) defense in
their Motion to Dismiss and their Memorandum in Opposition to Kellberg’s
Motion for Injunction.
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also Wright et al., supra § 1611 (“If joinder is feasible, the
court must order it; the court has no discretion at this point
because of the mandatory language of the rule.”).
Under the second step of the Rule 19 analysis, “if the
party meets the requirements under subsection (a) but it is not
feasible to join the party to the lawsuit, the court must proceed
to Rule 19(b) to determine whether it may decide the case without
the nonparty.” Marvin, 127 Hawai#i at 499, 280 P.3d at 97.
Factors to be considered by the court under this second step
include: “to what extent a judgment rendered in the person’s
absence might be prejudicial,” the extent to which “prejudice can
be lessened or avoided,” “whether a judgment rendered in the
person’s absence will be adequate,” and “whether the plaintiff
will have an adequate remedy if the action is dismissed for
nonjoinder.” HRCP Rule 19(b). This list of considerations is
not exhaustive, and “to a substantial degree the effective
operation of the rule depends on the careful exercise of
discretion by the [trial] court.” Wright et al., supra § 1608.
If, under this second step, the court dismisses the action rather
than moving forward without the absent party, the nonparty is
described as “indispensable.” Marvin, 127 Hawai#i at 499, 280
P.3d at 97.
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Kellberg’s prayer for relief in his complaint
explicitly sought to void the subdivision as “to all counts.” In
their motion for summary judgment, the County Defendants raised
numerous arguments, including that Kellberg failed to exhaust his
administrative remedies and that the lot owners were
indispensable parties because Kellberg failed to join them and
could no longer do so. The circuit court granted the County
Defendants’ motion with little explanation, stating only that
“the record reflects the absence of any genuine issue of material
fact.” On appeal in the ICA, the parties’ arguments included
both the exhaustion issue and the Rule 19 joinder issue.
The ICA affirmed the circuit court’s judgment,
concluding that the circuit court lacked jurisdiction because
Kellberg failed to exhaust his administrative remedies. Having
concluded that the circuit court lacked jurisdiction, the ICA did
not consider the County Defendants’ remaining arguments--
including the issue of whether the lot owners were indispensable
parties. In Kellberg I, this court vacated the ICA’s judgment
and remanded the case, “for consideration of the remaining issues
raised by Kellberg in his appeal to the ICA.” 131 Hawai#i at
537, 319 P.3d at 456. Although Kellberg did not file a cross
motion for summary judgment, the ICA concluded on remand that the
subdivision was invalid and that Kellberg was entitled to
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judgment as a matter of law, without considering the parties’
arguments under Rule 19. The ICA erred in this regard.
In the ICA, Kellberg argued that even if the lot owners
should have been joined under Rule 19(a), there was no evidence
in the record that they could not have been joined. Therefore,
dismissal of Kellberg’s complaint and summary judgment in favor
of the County Defendants was inappropriate. Specifically,
Kellberg argued that “[t]he remedy for an absent party adjudged
to be indispensable is not to take the radical step of dismissing
the case . . . . Instead, under HRCP 19, the court was required
to evaluate whether the missing person was needed for just
adjudication, determine whether the person can be joined, and if
so, to order joinder.”
Application of Rule 19 to the facts of this case
demonstrates that Kellberg should be ordered to join the lot
owners as defendants. As set forth above, under the first step
of the Rule 19 analysis, the initial question is whether the
absent party “claims an interest relating to the subject of the
action and is so situated that the disposition of the action in
the person’s absence may . . . as a practical matter impair or
impede the person’s ability to protect that interest.” HRCP Rule
19(a). The lot owners meet this requirement, and the circuit
court recognized as much in denying Kellberg’s Motion for
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Injunction, noting that “undoing the subdivision would directly
affect vested property rights of the persons who are now owners
of the subdivided property.”13 The lots are owned by several
owners, who therefore claim an interest relating to the Subject
Property. Further, invalidating the subdivision would “impair or
impede” the lot owners’ ability to protect their respective
property interests. See, e.g., Haiku Plantations Ass’n v. Lono,
56 Haw. 96, 103, 529 P.2d 1, 5 (1974) (“This court cannot
undertake to hear and determine questions affecting the interests
of these absent persons unless they are made parties and have had
an opportunity to come into court.” (quotation marks and citation
omitted)).
Moreover, failing to include the lot owners in the
instant case may leave the County Defendants “subject to a
substantial risk of incurring double, multiple, or inconsistent
obligations.” HRCP Rule 19(a). For example, if the subdivision
is rendered invalid, the lot owners will likely seek their own
13
On appeal in the ICA, Kellberg argued that the lot owners did not
have vested property rights because the subdivision was void. This argument
is without merit because, as noted above, the first step of the Rule 19
analysis asks whether the absent party “claims an interest relating to the
subject of the action[,]” not whether the absent party has a vested interest.
HRCP Rule 19(a). Put another way, the question of whether an absent party has
an interest sufficient to trigger the obligation to join that party is
distinct from the ultimate determination of the merits of that claim.
Additionally, an absent party may be silent and still “claim an interest”
under Rule 19(a) because “‘claims an interest’ in this context means nothing
more than appears to have such an interest.” Tell v. Trs. of Dartmouth Coll.,
145 F.3d 417, 419 (1st Cir. 1998).
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relief from the County Defendants. In these circumstances, Rule
19(a) plainly applies. Relatedly, granting summary judgment in
favor of the County Defendants without first ordering joinder of
the lot owners was inappropriate.14 See HRCP Rule 21 (2000)
(“Parties may be dropped or added by order of the court on motion
of any party or of its own initiative at any stage of the action
and on such terms as are just.”).
Kellberg appears to now argue that the lot owners are
not necessary because “he asserted only that the Director (1)
wrongfully approved the 2005 subdivision and (2) denied Kellberg
due process.” Although this argument is ambiguous, it appears
that Kellberg may be suggesting that he seeks only limited
relief, such as damages. But his prayer for relief in his
complaint explicitly sought to void the subdivision as “to all
counts.” Voiding the subdivision would certainly impair or
14
We note that the circuit court should have ordered joinder of the
lot owners at several points earlier in the litigation, which could have
prevented the delay and inconvenience that the parties now face and Rule 19
was intended to avoid. For example, the circuit court should have ordered
joinder of the then-existing lot owners when it ruled on the County
Defendants’ Motion to Dismiss and before ruling on Kellberg’s first motion for
partial summary judgment. The County Defendants had raised the issue of
joinder in both proceedings. Further, although the circuit court
appropriately concluded that the lot owners were required to be made parties
as to Count V in its denial of Kellberg’s second motion for partial summary
judgment, the circuit court should have also specifically ordered that the lot
owners be made parties as to all counts in Kellberg’s complaint, since it
sought to invalidate the subdivision in all of the counts. See HRCP Rule
19(a) (“A person who is subject to service of process shall be joined as a
party in the action . . . . If the person has not been so joined, the court
shall order that the person be made a party.” (Emphases added)).
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impede the lot owners’ ability to protect their ownership
interests.
Under Rule 19, the next question is whether joining the
lot owners is feasible. Here, there is no suggestion in the
record that the lot owners are not subject to service of process
or that joinder is otherwise not feasible. Indeed, in the ICA,
Kellberg asserted that “[t]here is no basis in the record to
conclude that the lot owners could not be joined as a party to
Kellberg’s lawsuit.” (Internal quotation marks and brackets
omitted). Moreover, after the circuit court denied Kellberg’s
motion for partial judgment as to Count V, Kellberg moved for
leave to file an amended complaint, which would have added the
lot owners as defendants as to all counts. The circuit court
granted Kellberg’s Motion to Amend, but Kellberg did not file his
amended complaint because he believed the lot owners “were not
necessary parties to the action.”15
In short, the record does not establish that joinder of
the lot owners is not feasible. Because it appears that joinder
is feasible, it must be ordered.16 See HRCP Rule 19(a) (“A
15
We note that Kellberg should have filed the amended complaint once
approved by the circuit court. See HRCP Rule 15(a)(2) (2012) (stating that if
a motion to amend a pleading is “granted or allowed, the amended pleading
shall be filed . . . and served forthwith.”).
16
Because nothing in the record suggests joinder is infeasible, we
need not reach the second step of the inquiry under Rule 19(b), i.e., whether
(continued...)
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person who is subject to service of process shall be joined as a
party in the action . . . . If the person has not been so
joined, the court shall order that the person be made a party.”
(Emphases added)).
As noted above, the County Defendants argue that the
lot owners are indispensable under Rule 19(b) because the statute
of limitations prevents the circuit court from joining them as
parties. This argument is without merit because the statute of
limitations is a personal defense that a defendant may waive;
thus, it is unclear at this point whether the lot owners will
even assert it and, if so, whether it will apply. See Mauian
Hotel v. Maui Pineapple Co., 52 Haw. 582, 569, 481 P.2d 310, 314
(1971) (holding that “the statute of limitations is a personal
defense and a person may waive the benefits of such statute”).
Moreover, Rule 19(a) implies that feasability is determined by
whether a person is subject to service of process, rather than
the likelihood of success on the merits. See HRCP Rule 19(a) (“A
person who is subject to service of process shall be joined as a
party[.]”).
16
(...continued)
the circuit court may decide the case without the lot owners. See Marvin, 127
Hawai#i at 499, 280 P.3d at 97 (holding that the court must proceed to Rule
19(b) only if the non-party meets the requirements under Rule 19(a) and cannot
be joined). If that issue arises, it can be considered by the circuit court
in the first instance on remand.
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Finally, Kellberg asserts that when he sought to amend
his complaint to add the lot owners, the County Defendants
“objected to their inclusion.” In opposing the Motion to Amend,
however, the County Defendants did not argue that the lot owners
were not necessary under Rule 19 but instead argued that joining
the lot owners would “unfairly prejudice the County” by causing
additional “costs, expenses, and delays.” Regardless, the
circuit court granted Kellberg’s motion for leave to amend, but
Kellberg did not file an amended complaint.
In sum, the ICA vacated the judgment in favor of the
County Defendants and directed that the circuit court enter
judgment in favor of Kellberg based on its conclusion that the
subdivision was invalid. Because invalidating the subdivision
may impair or impede the lot owners’ respective property rights,
and there is no indication that it is not feasible to join the
lot owners, the ICA should have vacated the circuit court’s
judgment and remanded the case with instructions to order that
the lot owners be joined. See Life of the Land, 58 Haw. at 298,
568 P.2d at 1194 (holding that “the circuit court’s dismissal of
appellants’ complaint for failure to join indispensable parties
was” in error because after finding that the parties were
necessary under Rule 19(a), “the court should have ordered that
they be made parties”); see also Haiku Plantations Ass’n, 56 Haw.
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at 102, 529 P.2d at 5 (holding that a court was “in no position
to render a binding adjudication” if that ruling could affect a
non-party holding a reversionary interest in the parcel of land
that was the subject of the litigation).
IV. Conclusion
In conclusion, we vacate the ICA’s judgment, vacate the
circuit court’s judgment, and remand the case to the circuit
court for further proceedings consistent with this opinion.
Specifically, the circuit court must order that the lot
owners be made parties if feasible pursuant to HRCP Rule 19(a).
If it is not feasible to join the lot owners, the circuit court
must then determine, based on consideration of the factors set
forth in Rule 19(b), whether the action should proceed or should
be dismissed.
Laureen L. Martin /s/ Mark E. Recktenwald
for petitioners
/s/ Paula A. Nakayama
Robert H. Thomas
/s/ Sabrina S. McKenna
for respondent
/s/ Richard W. Pollack
/s/ Colette Y. Garibaldi
46