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HomeMy WebLinkAbout2026-02-06 Legal Memorandum, Appendices A, A-1, B and Certificate of Service (PL-BOA-2025-000124) RENEE N.C. SCHOEN 5936 Corporation Counsel JEAN K. CAMPBELL 7424 Deputy Corporation Counsel Office of the Corporation Counsel County of Hawaii 101 Aupuni Street, Suite 325 Hilo, Hawaii 96720 Telephone: (808) 961-8251 Facsimile: (808) 961-8622 E-Mail: jeank.campbell(i4.)hawaiicounty.)zov Attorneys for COUNTY OF HAWAI`i PLANNING DIRECTOR BEFORE THE BOARD OF APPEALS COUNTY OF HAWAPI STATE OF HAWAI`I MARK KELLBERG, CASE NO. PL-BOA-2025-000124 Appellant, DIRECTOR OF THE PLANNING DEPARTMENT, COUNTY OF HAWAI'I S LEGAL MEMORANDUM;APPENDICES A, vs. A-1, B; CERTIFICATE OF SERVICE JEFFREY W. DARROW, PLANNING DIRECTOR, COUNTY OF HAWAI'i, Hearing Date: February 13, 2026 Appellee, and GLENN TAKEMOTO;ALLA PRUGLO; CHRISTIE GUASTELLA and JOHN PAYNE; FRANCES SANTA MARIA TRUST; MARY and DANIEL LOCK; MATTHEW JACKSON and DEBRA BRUNO; NIKOLY PRUGLO, Landowners. DIRECTOR OF THE PLANNING DEPARTMENT, COUNTY OF HAWAI`I'S LEGAL MEMORANDUM COMES NOW, Appellee JEFFREY W. DARROW, PLANNING DIRECTOR, COUNTY OF HAWAI`I ("Director"),by and through his attorney, Jean K. Campbell, Deputy Corporation Counsel, hereby submits this Legal Memorandum in the above-captioned matter. This pleading is submitted pursuant to the Scheduling Order dated December 3, 2025. The Director respectfully requests that this Board of Appeals ("Board") determine that the Director properly denied Mark Kellberg's ("Appellant") Petition for Declaratory Ruling ("Petition"). This case turns only on whether the Director properly exercised his discretion to deny the Petition in accordance with Planning Department Rule 3-1. This Board's review does not include any substantive consideration of the questions posed in the Petition, the validity of past Planning Director's decisions, or the validity of the subdivision itself. 1. Statement of Position The Planning Department Rules of Practice and Procedure ("Rules")permit,but do not require, the Director to issue a declaratory order on the petition of interested persons: "On petition of an interested person, the Director may issue a declaratory order as to the applicability of any statutory provision, ordinance, or of any rule or order of the Director or the Department." See Rule 3-1(a) [emphasis added]. The Director's response, whether it be a responsive order or a denial of the petition, is due within sixty days of the submission of the petition: "Within sixty days after the submission of a petition for declaratory ruling, the Director shall either deny the petition in writing, stating the reasons for such denial or issue a declaratory order on the matters contained in the petition, or set the matter for a public hearing, as provided in Sections 3-2, 3-3 and 3-4 of these rules." See Rule 3-1(c). 2 In this instance, the Director properly complied with the requirements of Rule 3-1(c)in denying the Petition within the sixty-day deadline and clearly stating the reasons for denial based on the law. See ROA at Pages 27-33. Consistent with their 20-year history of challenging the underlying subdivision,Appellant filed this appeal of the Director's denial. However, disagreeing with the answers you receive does not mean that your questions have not been properly addressed. The Director ruled correctly on the Petition by determining that the declaratory ruling procedure is not an appropriate venue to reopen long-litigated matters or to seek determinations and applications of laws pertaining to Director decisions made long ago. This appeal asks this Board to overturn the Director's denial and remand to the Director for further action. This Board may only do so upon a finding that: (1) the denial of the Petition violates the law; (2) the denial of the Petition is clearly erroneous; or(3) the denial of the Petition is arbitrary or capricious, characterized by an abuse of discretion or a clearly unwarranted exercise of discretion. Without a finding of one of these three requirements, the Board must uphold the Director's decision. The fact that the Appellant is unsatisfied with the Director's legally adequate and reasonable response is not a basis to overturn the Director's decision. Prior to filing this appeal,Appellant has a long and unsuccessful history of attempting to upend the subdivision of the subject property. See Appendix A. Appellant, having failed to get the relief he sought to invalidate the subdivision approval through prior action of this Board or the courts in no less than three lawsuits, filed the Petition with the Department on May 23, 2025. See ROA at Pages 30-31. The Petition asked that the Director determine which provisions of the Hawaii County Subdivision Code, Chapter 23, and Zoning Code, Chapter 25, apply to the use of the Lots, which is thinly veiled attempt to seek a later application of law to prior agency action (the Department's 2005 approval of the subdivision based on Hawaii County Code, Chapter 23, 3 Article 11) and invalidate the subdivision. Appellant's attempt to attain new and different determinations today on agency actions taken on July 11, 2005 (the issuance of final subdivision approval) and on October 23, 2006 (the Director's letter reaffirming that he would "not do anything") fools no one. II. The Director's Denial Complies With Law This appeal must be limited to this Board's review of the Director's current decision to deny the Petition and is not an opportunity reopen appeal periods which lapsed 20 years ago. Unless this Board determines that: (1) denial of the Petition violates the law; (2) denial of the Petition is clearly erroneous; or (3) denial of the Petition is arbitrary or capricious, characterized by an abuse of discretion or a clearly unwarranted exercise of discretion, the Board must uphold the Director's denial of the Petition. The "arbitrary and capricious" standard is synonymous with the "abuse of discretion" standard. Under these standards, there need only be "rational foundation" for an action of the Director; this means that the actions of the Director must be upheld as long as there is a rational connection between the facts found and the conclusions drawn from those facts. Motor Vehicle Mfgrs. Ass'n a State Fame Mutl. Auto. Ins. Co., 463 U.S. 29, 4243 (1983). The party challenging the Director's action bears the burden of proof, including the burden of producing evidence and burden of persuasion. See Hawaii Revised Statutes § 91-10(5); BOA Rules § 8- I I(g). In this instance, the Director's denial of the Petition was entirely legal, reasonable, and well within his discretion and Appellant has produced no evidence otherwise. A. The Denial Complied with Planning Department Rule 3-1 Rule 3-1(a)provides the Director the discretion to either answer or decline to answer questions posed via a declaratory petition. The Rule 3-1(c) requirement that the Director provide 4 a response within 60 days was complied with by the issuance of the Director's denial on July 18, 2025, within 60 days of the filing of the Petition on filed May 23, 2025. See ROA at Pages 3 and 33. Rule 3-1(c)requires that the Director state the reason for the denial. The denial set forth not one but three reasons for the denial, all based clearly on law. See ROA at Pages 31-33. The Director's denial explains the Director's rational and legal foundation. See ROA at Pages 31-33. Each of the three reasons is supported by legal reasoning and case citations. See ROA at Pages 31-33. While Appellant may disagree with or dislike the reasons, that does not render the Director's decision a violation of law, erroneous, or arbitrary and capricious and Appellant has presented no evidence of such. B. The Petition Did Not Contain a Question the Director is Required to Answer Appellant continues to challenge the prior underlying decisions of past Planning Directors through the Petition and this appeal. Posing the same question with different words does not a new question make. The fact that the Petition cannot be articulated by the Appellant without rehashing the history of the project clearly evidences the Appellant's intent: to invalidate the subdivision. See ROA at Page 14: "The approval of SUB-05-00064 violated the Subdivision and Zoning Codes and is invalid." Posing questions about selected sections of the subdivision and zoning codes today is a thinly veiled attempt to force the Director to make a different ruling than was issued, and not timely or effectively challenged, many many years ago. This subdivision was completed in 2005 and no timely appeal was filed to challenge it then nor have Appellant's various lawsuits overturned the Director's past decisions. No amount of tricky lawyering will change the results twenty years later. 5 C. Potential Effect on Non-Party Landowners While the Board of Appeals procedure has allowed for the technical joinder of the current owners of the lots comprising the subdivision, the Planning Department's Declaratory Ruling procedure does not provide for the joinder of additional parties besides the petitioner and any parties who actively seek intervention. See Planning Department Rules of Practice and Procedure, Rule 3, Appendix B. Any determination other than to maintain the prior Director's decisions may adversely affect the landowners of the subdivided lots. Without their active participation in the process, the County would potentially be depriving those owners of their property rights without due process, which is problematic as recognized by the Hawaii Intermediate Court of Appeals in Kellberg v Kern: 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. Kellberg a Kern, No. CRAP-19-0000833, June 27, 2024 (SDO) The Hawaii intermediate Court of Appeals further stated that: 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 a Kern, No. CAA P-19-0000833, June 27, 2024 (SDO) Appellant's continued attempts to misuse yet another venue to attempt to overturn the 2005 subdivision approval, twenty years later, is not only harmful to the County it is potentially harmful to the owners of the subdivided lots today and an ongoing abuse of the system. 111. Conclusion The Director respectfully requests that this Board affirm the Director's denial of the Petition and dismiss this appeal. The Director's decision as set forth in the denial complied fully with Rule 3-1 in that it was timely filed and set forth the Director's reasoning for the denial. The 6 denial of the Petition did not violate the law, was not clearly erroneous, and was not arbitrary or capricious, characterized by an abuse of discretion or a clearly warranted exercise of discretion and must be upheld. Dated: Hilo, Hawaii, February 6, 2026. COUNTY OF HAWAI`I PLANNING DIRECTOR By: ls/Jean K. Campbell JEAN K. CAMPBELL Deputy Corporation Counsel Its Attorney 7 APPENDIX A IV. Back around Understanding the background and prior actions related to this matter will help the Board to understand that the Director properly exercised his discretion in denying the Petition. A. Brief Summary of Past Actions and Approvals. The property at issue involves land located at Waikaumalo,North Hilo, Hawai'i, formerly designated as Tax Map Key Parcel No. (3) 3-2-002-035, being 49.070 acres including a non-contiguous portion being 0.699 acre. A previous landowner requested from the Director recognition of 6 pre-existing lots. On May 22, 2000, the then-Planning Director issued a letter recognizing 6 pre-existing lots, including the 0.699 acre non- contiguous area,based on Hawaii County Code, Chapter 23,Article 11. See Record on Appeal ("ROA') at Page 22;Appendix A-1, Hawai'i Countv Code, Chapter 23, Article 11. On December 24, 2003, a similar request was made asking recognize 7 pre-existing lots and the Department responded that there were really only 2 lots. See ROA at Page 21. When the Department was presented with the 2000 determination of 6 lots, the Director said he would honor that older determination, thus establishing the proper number of lots at 6, still based on Hawaii County Code, Chapter 23,Article 11. See ROA at Page 22-23. Subdivision SUB 05-000064 was approved on July 11, 2005,by letter which noted that "all requirements of the Subdivision Code, Chapter, 23, as modified have been met." See ROA at Page 6. SUB 05-000064 intended to consolidate and resubdivide the 6 recognized pre-existing lots into 6 differently shaped lots based on the 2000 pre-existing lot determination and mistakenly overlooked the 0.699 acre non- contiguous area. See ROA at Pages 22-23. Appellant and his then-counsel inquired 1 about the subdivision and the then-Planning Director responded on October 23, 2006, that he recognized the mistake of overlooking the 0.699 acre non-contiguous area and that he was "not going to do anything this situation at this time." See ROA at Pages 22-23. By consolidation CON-10-000168 recorded in the Bureau of Conveyances of the State of Hawaii on November 18, 2010, the 0.699 acre non-contiguous parcel was consolidated into an adjacent lot. See ROA at Page 28. Thus, as of 2010 the mistakenly approved seventh lot was eliminated. B. Brief Summary of Civil Actions. Unsatisfied with the determinations made by the Director and having not filed an appeal to this Board in 2005 within the thirty-day appeal period,Appellant filed a civil lawsuit on May 11, 2007. See ROA at Page 28-29. The lawsuit against the County in the Third Circuit Court alleged several wide-ranging counts, including Count II alleging that Appellant "was entitled to a declaratory judgment regarding the application of the [County Code] to SUB-05-00064 and [the Planning Director' s] arbitrary decision to disregard the limitations of Section 23-67 and to create seven (7) lots out of one in violation of Section 23-7 [(governing pre-existing lots)]." See ROA at Pages 28-29. The Third Circuit Court entered an order in July 2009 granting partial summary judgment and remanding three of Appellant's counts to the Board. See ROA at Page 29. In September 2009,Appellant filed a petition with the Board appealing the Director's: 1) January 12, 2005, decision to honor the Director's May 22, 2000 determination that the property consisted of six lots; (2) July 11, 2005, final subdivision approval; and (3) October 23, 2006, letter determining that he would "not do anything." See ROA at Page 29. These appeals were dismissed by the Board on the basis that it lacked jurisdiction due to 2 Appellant' s failure to file within the 30-day deadline. See ROA at Page 29. Appellant did not appeal the Board's dismissal nor did Appellant file a Board appeal following the consolidation the 0.699 acre non-contiguous area in 2010. See ROA at Page 29. Following the County's filing of a motion for summary judgment on all claims, the Third Circuit entered a Final Judgment in favor of the County and against Appellant in 2012. See ROA at Page 29. Appellant appealed the Third Circuit Court's decision to the Hawaii Intermediate Court of Appeals ("ICA"). See ROA at Page 30. The ICA vacated the lower court's Final Judgment and remanded for an order of dismissal. See ROA at Page 29. Appellant applied to the Hawai'i Supreme Court ("HISC"), and in 2014 ("Kellberg I") the HISC opined only on the appealability of the Director's decisions and remanded the case to the ICA for consideration of the remaining issues. See ROA at Pages 29-30. On remand, the ICA vacated the Third Circuit Court's judgment and remanded to the Third Circuit Court. See ROA at Page 30. Before the Third Circuit Court ruled, the County petitioned to the HISC asking the Court: whether it was error to declare the subdivision invalid when it now consisted of six, not seven, lots; whether the ICA should have considered all the County's arguments; and whether the owners of the lots in the affected subdivision must be joined as parties prior to voiding the subdivision. See ROA at Page 30. The HISC, in its April 15, 2015 decision ("Kellberg II"), vacated the ICA's judgment and the Third Circuit Court's judgment and remanded the case to the Third Circuit once again. Finding that the lots owners were indispensable parties, the HISC 3 directed that the Third Circuit Court order that they be made parties if feasible. See ROA at Page 30. On remand at the Third Circuit Court,Appellant filed an amended complaint on December 2, 2015, adding the lot owners as defendants and, among other counts, seeking a finding that SUB-05-00064 was invalid. See ROA at Page 30. On July 23, 2019, the Third Circuit Court issued its Findings of Fact, Conclusions of Law, and Decision and Order as to Counts I Through V(Inclusive) of the First Amended Complaint. See ROA at Page 30. The Third Circuit Court stated that because Counts I through V, inclusive, of the First Amended Complaint were all predicated upon a determination as to whether SUB 05-00064 was invalid and Appellant was not entitled to relief on such a determination, all of Counts I through V, inclusive were dismissed with prejudice. Final Judgment in favor of the County was issued on November 4, 2019. See ROA at Page 30. Appellant appealed once again and the ICA issued a Summary Disposition Order on June 27, 2024, affirming the Third Circuit Court's Final Judgment for the County ("Kellberg III"). See ROA at Page 30. The HISC rejected Appellant's application for writ certiorari on November 27, 2024. See ROA at Page 30. APPENDIX A-1 CHAPTER 23 SUBDIVISIONS Section 23-3. Definitions. Whenever used in this chapter, the following words and phrases, unless the context otherwise requires, shall be defined as indicated: (21) "Pre-existing lot"means a specific area of land that will be treated as a legal lot of record based on criteria set forth in this chapter. Section 23-7. Applicability to consolidation or resubdivision action. The requirements and standards of this chapter shall not apply to consolidation and resubdivision action 4 resulting in the creation of the same or fewer number of lots than that which existed prior to the con soli dati on/resubdivi sion action; provided that the director, upon conferring with the director of public works and manager-chief engineer of the department of water supply, may require necessary improvements to further the public welfare and safety. Article 11. Pre-Existing Lots. Section 23-117. Purpose. The purpose of this article is to specify the criteria by which a pre-existing lot may be recognized and to state how certain uses will be accounted for during a consolidation/resubdivision action. Section 23-118. Criteria to determine a pre-existing lot. The director 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 pre-existing 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 by lot number or block number, 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. (c) The lot was created through evidence of a properly prepared deed and/or subdivision plat for fee simple ownership of such lot to a grantee other than the grantor or a grantor's trust which deed was recorded at the State of Hawai`i Bureau of Conveyances or with the Registrar of the Land Court prior to May 1, 1999, and was subsequently depicted on a County of Hawaii Tax Map, was issued a tax map parcel number therefor, and was individually assessed for real property taxation purposes. Section 23-119. Proof. The owner of property seeking certification as a pre-existing lot shall provide reasonable evidence to meet the criteria set forth therein, provided that recognition of a lot based on a lease shall be supported by evidence that a valid lease was in existence on January 8, 1948, which specifies the boundaries of the claimed lot with reasonable certainty. Section 23-120. Use of certain pre-existing lots in consolidation and resubdivision. A pre-existing lot that was created for use as a road lot, a railroad right-of-way, a flume line, or a pole anchor, shall be excluded for calculating the number of lots in applying section 23-7, unless it is conforming, except to create road lots or other nonbuildable lots. 5 APPENDIX B PLANNING DEPARTMENT COUNTY OF HAWAI`I RULES OF PRACTICE AND PROCEDURE RULE 3. DECLARATORY RULINGS 3-1 Petitions for Declaratory Rulings (a) On petition of an interested person, the Director may issue a declaratory order as to the applicability of any statutory provision, ordinance, or of any rule or order of the Director or the Department. (b) Petition for a declaratory ruling shall contain: (1)A non-refundable filing and processing fee of one hundred dollars; (2)Name, address, telephone number, if available, and signature of each petitioner; (3)A designation of the specific provision, rule, or order in question, together with a statement of the controversy or uncertainty involved; and (4)A statement of the petitioner's position or contention; and (5)A memorandum of authorities, containing a full discussion of reasons and legal authorities in support of such position or contention. (c)Within sixty days after the submission of a petition for declaratory ruling, the Director shall either deny the petition in writing, stating the reasons for such denial or issue a declaratory order on the matters contained in the petition, or set the matter for a public hearing, as provided in Sections 3-2, 3-3 and 3-4 of these rules. 3-2 Request for Public Hearing The Director, in his discretion, may order that a hearing be held on a declaratory ruling petition.Any petitioner or party in interest who desires a hearing on a petition for a declaratory ruling shall submit a written request for a hearing, setting forth in the request the reasons why the matters alleged in the petition and the supporting material submitted will not permit the fair and expeditious disposition of the petition and, to the extent that such request for a hearing is dependent upon factual assertion, shall attach to the request an affidavit establishing such facts. In the event a hearing is ordered by the Director, the hearing shall be conducted in accordance with Section 3-3 of this rule. 6 3-3 Notice of Public Hearing A notice of the declaratory ruling petition shall be published at least once in a newspaper of general circulation in the County, and the notice shall also be mailed or electronically mailed to all persons who have made timely written requests for advance notice. The notice shall be published at least ten days prior to the date set for the hearing. 3-4 Conduct of Hearin6 (a) The public hearing for the declaratory ruling petition shall be presided over by the Director or his authorized representative. The hearing shall be conducted in such a way as to afford all interested persons a reasonable opportunity to offer testimony with respect to the matters specified in the notice of hearing and so as to obtain a clear and orderly record. The presiding officer shall have authority to administer oaths or affirmations and to take all other actions necessary for the orderly conduct of the hearing. (b)At the commencement of the hearing, the presiding officer shall read the notice of hearing and shall then outline briefly the procedure to be followed. Testimony shall then be received with respect to the matters specified in the notice of hearing in such order as the presiding officer shall prescribe. (c)Any interested person will be afforded an opportunity to submit data, views, or arguments, orally or in writing, that are relevant to the matters specified in the notice of hearing. The period for filing written comments or recommendations shall not extend beyond the hearing date, unless specified by the presiding officer. (d)Unless otherwise specifically ordered by the presiding officer, testimony given at the public hearing need not be reported verbatim. All supporting written statements, maps, charts, tabulations, or similar data offered at the hearing, and which are deemed by the presiding officer to be authentic and relevant, shall be received and made a part of the record. 3-5 Action The Director shall consider all relevant comments and material of record before taking final action on the declaratory ruling petition. Final action shall be taken within sixty days after the close of the public hearing. 3-6 Status of Orders An order disposing of a petition shall have the same status as other Director or Department orders.An order shall be applicable only to the factual situation described in the petition or set forth in the order. An order shall not be applicable to different factual situations or where additional facts not considered in the order exist. 7 BEFORE THE BOARD OF APPEALS COUNTY OF HAWAI`I STATE OF HAWAI`I MARK KELLBERG, CASE NO. PL-BOA-2025-000124 Appellant, CERTIFICATE OF SERVICE vs. JEFFREY W. DARROW, PLANNING DIRECTOR, COUNTY OF HAWAF I, Appellee, and GLENN TAKEMOTO; ALLA PRUGLO; CHRISTIE GUASTELLA and JOHN PAYNE; FRANCES SANTA MARIA TRUST; MARY and DANIEL LOCK; MATTHEW JACKSON and DEBRA BRUNO; NIKOLY PRUGLO, Landowners. CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing document was served upon the parties identified below by electronic mail service upon the following on February 6, 2026: Delivered via Electronic Mail (E-Mail and/or EPIC) MARK M. MURAKAMI Attorney for Appellant GLENN TAKEMOTO ALLA PRUGLO CHRISTIE GUASTELLA and JOHN PAYNE FRANCES SANTA MARIA TRUST MARY and DANIEL LOCK MATTHEW JACKSON and DEBRA BRUNO NIKOLY PRUGLO Landowners SYLVIA WAN, ESQ. Deputy Corporation Counsel County of Hawaii 101 Aupuni Street, Suite 325 Hilo, HI 96720 Attorney for Board of Appeals BOARD OF APPEALS 101 Pauahi Street, Suite 3 Hilo, HI 96720 Board ofAppeals Dated: Hilo, Hawaii, February 6, 2026. ls/Jean K. Campbell JEAN K. CAMPBELL Deputy Corporation Counsel Mark Kellberg a Jeffrey W. Darrow, Planning Director; County of Hawai'i and Glenn Takemoto, et al.; PL-BOA-2025-000124 2