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Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
27-JUN-2024
08:00 AM
Dkt. 144 SO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI#I
MARK C. KELLBERG, Plaintiff-Appellant,
v.
ZENDO KERN, in his capacity as Planning Director, County of
Hawaii; COUNTY OF HAWAII; MICHAEL PRUGLO, indivicually
and dba HOME TECH CONSTRUCTION; CHRISTIE D. GUASTELLA
and JOHN H. PAYNE, II; GLENN ISAO TAKEMOTO;
MICHAEL DANIEL LOCK and MARY ANN LOCK;
NIKOLAY PRUGLO; BECKY ANN McQUIRE TRUST;
FRANCES SANTA MARIA TRUST, Defendants-Appellees,
and
JOHN DOES 1-10, JANE DOES 1-10, DOE
PARTNERSHIPS, CORPORATIONS, GOVERNMENTAL UNITS
OR OTHER ENTITIES 1-10, Defendants
APPEAL FROM THE CIRCUIT COURT OF THE THIRD CIRCUIT
(CASE NO. 3CC071000157)
SUMMARY DISPOSITION ORDER
(By: Hiraoka, Presiding Judge, Wadsworth and Nakasone, JJ.)
Mark C. Kellberg appeals from the Final Judgment for
the County of Hawai#i, its Planning Director,1 and others,
1
Christopher J. Yuen was the County planning director when Kellberg
filed suit. Duane Kanuha succeeded Yuen and was automatically substituted as
the defendant under Hawai#i Rules of Appellate Procedure (HRAP) Rule 43(c)(1).
Zendo Kern succeeded Kanuha and is the current Defendant-Appellee.
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entered by the Circuit Court of the Third Circuit on November 4,
2019.2 We affirm.
The facts of this case were summarized in Kellberg v.
Yuen, 131 Hawai#i 513, 319 P.3d 432 (2014) (Kellberg I), and
Kellberg v. Yuen, 135 Hawai#i 236,
349 P.3d 343 (2015)
(Kellberg II). In April 2005 Michael Pruglo applied to the
County to consolidate and resubdivide lots on a 49–acre Property
in Nīnole. Kellberg I, 131 Hawai#i at 516,
319 P.3d at 435. The
County Planning Director approved the application on July 11,
2005.
Id. The first lot was sold on October 19, 2005.
Id. at
517,
319 P.3d at 436.
Kellberg owned land next to the Property. He learned
of the subdivision approval on August 11, 2005. Kellberg I, 131
Hawai#i at 517, 319 P.3d at 436. He objected to the subdivision.
He claimed it violated Chapter 23 of the Hawai#i County Code by
increasing the number of lots on the Property. Kellberg II, 135
Hawai#i at 237,
349 P.3d at 344. He sued the County and the
Planning Director on May 11, 2007. He didn't name Pruglo or any
of the subdivision's Lot Owners as defendants;3 he made a
"strategic decision" not to sue Lot Owners because he didn't
think they were "necessary parties to the action." Id. at 248,
349 P.3d at 355. His complaint sought a declaration that the
subdivision was illegal and void; a mandatory injunction
requiring the County to comply with Chapter 23; and damages for
"materially and adversely impacting [his] property both in
monetary value and in use and enjoyment."
Kellberg moved for an injunction. The circuit court
denied the motion; it found the "owners of the subdivided
property are indispensible [sic] parties to this action as
required under Rule 19 of the Hawai#i Rules of Civil Procedure"
2
The Honorable Henry T. Nakamoto presided.
3
The Lot Owners are Pruglo, individually and doing business as Home
Tech Construction; Christie D. Guastella; John H. Payne, II; Glenn Isao
Takemoto; Michael Daniel Lock; Mary Ann Lock; Nikolay Pruglo; Becky Ann
McGuire Trust; and Frances Santa Maria Trust.
2
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(HRCP). Kellberg then moved to amend his complaint to add Lot
Owners as defendants. The circuit court granted the motion on
March 3, 2011, but Kellberg did not file an amended complaint.
Kellberg II, 135 Hawai#i at 246, 349 P.3d at 353.
The circuit court eventually granted summary judgment
for the County and Planning Director. Kellberg appealed. We
held the subdivision approval was invalid. Kellberg v. Yuen,
No. CAAP-XX-XXXXXXX, 2014 WL 1271028 (Haw. App. Mar. 28, 2014)
(mem. op.), vacated by Kellberg II, 135 Hawai#i 236,
349 P.3d 343
(2015) (Memorandum Opinion). On certiorari, the supreme court
stated we erred by ruling on the merits of Kellberg's claim
without addressing whether the Lot Owners had to be joined under
HRCP Rule 19. Kellberg II, 135 Hawai#i at 238,
349 P.3d at 345.
The supreme court held that Lot Owners were persons to be joined
if feasible under HRCP Rule 19(a) because Kellberg sought to have
the subdivision declared void.
Id. The supreme court remanded
the case to the circuit court. The mandate was:
[T]he 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.
Id. at 254, 349 P.3d at 361.
On remand, Kellberg filed an Amended Complaint on
December 2, 2015, adding Lot Owners as defendants and omitting
his claim for damages. He sought a declaration that the
subdivision approval was invalid; an injunction against further
development of the subdivision; and an injunction against Lot
Owners trespassing on his property. Each Lot Owner was served.
Kellberg moved for partial summary judgment based on our
Memorandum Opinion's holding that the subdivision approval was
invalid. The circuit court denied the motion.
Various Lot Owners moved for partial summary judgment,
or joined, based on the statute of limitations. The circuit
court granted the motions and joinders. Kellberg's trespass
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claim was voluntarily dismissed without prejudice. The circuit
court entered findings of fact, conclusions of law, and an order
dismissing the Amended Complaint on July 23, 2019. The Final
Judgment was entered on November 4, 2019. This appeal followed.
Kellberg contends the circuit court erred by:
(1) denying his motion for a partial summary judgment declaring
the subdivision approval invalid; (2) concluding the statute of
limitations had run on his claims against Lot Owners; and
(3) dismissing his Amended Complaint after concluding that Lot
Owners were indispensable parties.
(1) Kellberg argues the circuit court should have
followed our Memorandum Opinion and granted his motion for a
partial summary judgment declaring the subdivision approval
invalid because "[n]othing material has changed[.]" But it has.
The supreme court vacated the Memorandum Opinion because we
didn't address whether Lot Owners were persons needed for just
adjudication under HRCP Rule 19 before reaching the merits.
Kellberg II, 135 Hawai#i at 238, 349 P.3d at 345. The supreme
court concluded Lot Owners were needed for just adjudication.
Id. at 252-53,
349 P.3d at 359-60.
"A declaratory judgment is a form of equitable relief."
Kau v. City & Cnty. of Honolulu, 104 Hawai#i 468, 473, 92 P.3d
477, 482 (2004) (citation omitted). "The relief granted by a
court in equity is discretionary and will not be overturned on
review unless the circuit court abused its discretion[.]"
Id.
(cleaned up). It would have been inequitable for the circuit
court to grant the declaratory relief sought by Kellberg under
the circumstances of this case. Kellberg unreasonably delayed
joining Lot Owners. The order letting him amend his complaint
was entered on March 3, 2011 — before the statute of limitations
on his claims against Lot Owners would have expired. "Kellberg
should have filed the amended complaint once approved by the
circuit court." Kellberg II, 135 Hawai#i at 253 n.15,
349 P.3d
at 360 n.15 (citing HRCP Rule 15(a)(2)). He didn't file the
Amended Complaint until December 2, 2015. By then, the statute
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of limitations against Lot Owners had expired. That prejudiced
the County. Lot Owners would not be bound by a judgment
declaring the subdivision invalid. The supreme court recognized
that could "leave the County Defendants subject to a substantial
risk of incurring double, multiple, or inconsistent obligations.
For example, if the subdivision is rendered invalid, the lot
owners will likely seek their own relief from the County
Defendants." Id. at 253, 349 P.3d at 360 (cleaned up). Kellberg
says "he does not much care whether the unlawful lots continue to
exist on the County's records, or who pays the real estate tax.
It is enough that they remain as they are today and that the code
not be further abrogated by way of the erection of nonconforming
dwellings." (Emphasis added.)
That is the problem. If Kellberg prevailed against the
County, and the County tried to enjoin Lot Owners from erecting
dwellings, Lot Owners could sue the County for depriving them of
constitutionally protected property interests. See In re
Application of Maui Elec. Co., 141 Hawai#i 249, 260, 408 P.3d 1,
12 (2017) (noting that "a protected property interest exists in a
benefit — tangible or otherwise — to which a party has 'a
legitimate claim of entitlement.'" (citations omitted)).
Conversely, if the County let Lot Owners develop their lots, or
failed to assess fines or penalties against those who developed
their lots, Kellberg could sue the County again. Under these
circumstances, it would have been inequitable to grant Kellberg
the declaratory relief he sought. The circuit court did not
abuse its discretion by denying Kellberg's motion for partial
summary judgment.
(2) The circuit court concluded Kellberg's claim for
declaratory relief against Lot Owners was time-barred. The court
did not specify which statute of limitations it applied. In a
case seeking declaratory relief on a government contract award,
Chief Justice Recktenwald noted:
HRS § 632–1 does not impose any time limitations on
declaratory judgment actions. It would appear that a
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declaratory judgment action challenging an agency's
reconsideration decision on a procurement protest would be
subject to the general statutes of limitations set forth in
HRS chapter 657, which may be as long as six years.
Alaka#i Na Keiki, Inc. v. Matayoshi, 127 Hawai#i 263, 301, 277
P.3d 988, 1026 (2012) (Recktenwald, C.J., concurring in part)
(footnote omitted) (citing HRS § 657–1(4) (1993)).
Lot Owners argued Kellberg's claims were time-barred
under HRS § 657-1's 6-year catch-all provision. Kellberg's cause
of action accrued at the latest on August 11, 2005, when he
learned of the subdivision approval. His Amended Complaint was
not filed until December 2, 2015. Kellberg argues the statute of
limitations should be tolled because Lot Owners' "'continuing' or
'ongoing' wrongful conduct is 'not referable exclusively to the
time when the [action] first occurred[.]" But it is.
Hawai#i has long recognized that a continuing wrong may, in
effect, toll the statute of limitations with respect to
tortious conduct that is ongoing. Under the continuing tort
doctrine, while the statute of limitations is "tolled" by a
continuing tortious act, recovery may be had only for
damages accruing within the statutory period before the
action, but not for damages accrued prior to that period.
In effect, the date that the tort "first accrues" moves
forward into the future so long as the tortious conduct
continues.
Garner v. State, Dep't of Educ., 122 Hawai#i 150, 168, 223 P.3d
215, 233 (App. 2009) (emphasis added) (footnote and citation
omitted). Here, Lot Owners' only allegedly tort was trespass.
Kellberg dismissed that claim before entry of the Final Judgment.
Lot Owners committed no other alleged tort for which damages
could be awarded; they just own lots in a County-approved
subdivision. Even if the County's approval was improper, the
continuing tort doctrine does not apply to Kellberg's claims
against Lot Owners.
Kellberg argues the "wrong" is "continuing" because the
County "continues to do nothing about the invalid subdivision."
But the statute of limitations was not applied to bar Kellberg's
claims against the County. The circuit court was not wrong to
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conclude that Kellberg's claim for declaratory relief against Lot
Owners was time-barred.4
(3) The circuit court's July 23, 2019 findings,
conclusions, and order dismissed Kellberg's Amended Complaint
after "[a]pplying the factors in HRCP [Rule] 19(b)" and
concluding Lot Owners were indispensable parties. Kellberg
argues that "[t]he circuit court did not support its conclusion
that Lot Owners are 'indispensable' parties under Rule 19(b)[.]"
We conclude the circuit court erred by applying HRCP Rule 19(b),
but did not err by dismissing the Amended Complaint.
The supreme court held that Lot Owners were necessary
for a just adjudication under HRCP Rule 19(a). Kellberg II, 135
Hawai#i at 252-53, 349 P.3d at 359-60. An HRCP Rule 19(b)
determination of whether they were indispensable had to be made
only if "it is not feasible to join [them] to the lawsuit[.]"
Civ. Beat L. Ctr. for the Pub. Int., Inc. v. City & Cnty. of
Honolulu, 144 Hawai#i 466, 484,
445 P.3d 47, 65 (2019) (quoting
Marvin v. Pflueger, 127 Hawai#i 490, 499,
280 P.3d 88, 97 (2012))
(emphasis added). HRCP Rule 19(a) "implies that feasibility is
determined by whether a person is subject to service of process,
rather than the likelihood of success on the merits."
Kellberg II, 135 Hawai#i at 254,
349 P.3d at 361.
Here, Lot Owners were subject to service of process.
Joinder was feasible. All were served with the Amended
Complaint. The circuit court's conclusion that "as a consequence
[of their statute of limitations defense], the Lot Owners cannot
be made parties to Count I of the First Amended Complaint" was
wrong. Lot Owners were parties. Once they were joined as
parties, it was unnecessary to make an HRCP Rule 19(b)
determination of indispensability.
4
Although declaratory relief is equitable in nature, "with the
merger of law and equity there is no longer a good reason to distinguish
between the legal and equitable character of defenses[.]" Ass'n of Apartment
Owners of Royal Aloha v. Certified Mgmt., Inc., 139 Hawai#i 229, 235-36, 386
P.3d 866, 872-73 (2016) (citation omitted). See HRCP Rule 2 ("There shall be
one form of action to be known as 'civil action'.").
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The supreme court has "consistently held that where the
decision below is correct it must be affirmed by the appellate
court even though the lower tribunal gave the wrong reason for
its action." State v. Taniguchi, 72 Haw. 235, 239,
815 P.2d 24,
26 (1991) (citation omitted); cf. Reyes v. Kuboyama, 76 Hawai#i
137, 140,
870 P.2d 1281, 1284 (1994) (noting that appellate court
"may affirm a grant of summary judgment on any ground appearing
in the record, even if the circuit court did not rely on it").
Under the circumstances of this case, the circuit court's
decision to dismiss the Amended Complaint wasn't wrong.
Kellberg's claims against the County and Planning Director are
moot.
"[A] case is moot if the reviewing court can no longer
grant effective relief." Bank of New York Mellon v. R. Onaga,
Inc., 140 Hawai#i 358, 366, 400 P.3d 559, 567 (2017). The relief
Kellberg seeks cannot bind Lot Owners. Any declaratory or
injunctive relief Kellberg obtained against the County and
Planning Director couldn't be enforced against Lot Owners.
Kellberg's case became moot when he did not join Lot Owners
before the statute of limitations against them expired.
For these reasons, the Final Judgment entered by the
circuit court on November 4, 2019, is affirmed.
DATED: Honolulu, Hawai#i, June 27, 2024.
On the briefs:
/s/ Keith K. Hiraoka
Robert H. Thomas, Presiding Judge
Mark M. Murakami,
Joanna C. Zeigler, /s/ Clyde J. Wadsworth
Veronica A. Nordyke, Associate Judge
for Plaintiff-Appellant.
/s/ Karen T. Nakasone
D. Kaena Horowitz, Associate Judge
Deputy Corporation Counsel,
for Defendants-Appellees
Zendo Kern and the County
of Hawai#i.
Francis L. Jung,
Carol Monahan Jung,
for Defendants-Appellees
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Michael Pruglo, Nikolay
Pruglo and Frances Santa
Maria Trust.
Charles A. Price,
for Defendants-Appellees
Michael Daniel Lock and
Mary Ann Lock.
John G. Horak,
for Defendants-Appellees
Christie D. Guastella and
John Payne II.
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