Kendrick v. Planning Department of the County of Kaua'i.

FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
25-OCT-2024
07:56 AM
Dkt. 54 OP

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAIʻI

---o0o---

ELIZABETH KENDRICK and JOE CHAULKLIN,
Petitioners-Appellants-Appellees, v.
PLANNING DEPARTMENT OF THE COUNTY OF KAUAʻI/
PLANNING COMMISSION OF THE COUNTY OF KAUAʻI; DONNA APISA,
in her official capacity as Chairperson of the Planning
Commission, 1 Respondents-Appellees-Appellants.

NO. CAAP-XX-XXXXXXX

APPEAL FROM THE CIRCUIT COURT OF THE FIFTH CIRCUIT
(CIVIL NO. 5CC181000190)

OCTOBER 25, 2024

HIRAOKA, PRESIDING JUDGE, NAKASONE AND MCCULLEN, JJ.

OPINION OF THE COURT BY MCCULLEN, J.

Respondents-Appellees-Appellants County of Kauaʻi, its

Planning Department and Planning Commission, and Donna Apisa, in

her official capacity as Chair of the Planning Commission,

1 Donna Apisa, the current chair of the Kauaʻi County Planning
Commission, is substituted for former chairs Sean Mahoney and Glenda Nogami-
Streufert under Hawaiʻi Rules of Appellate Procedure (HRAP) Rule 43(c)(1).
FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

(collectively, the County) appeal from the Circuit Court of the

Fifth Circuit's 2 (1) July 28, 2020 "Findings of Fact and

Conclusions of Law, Decision and Order," and (2) August 24, 2020

Final Judgment in favor of Petitioners-Appellants-Appellees

Elizabeth Kendrick and Joe Chaulklin.

The County contends that the circuit court erred in

reversing the Planning Commission's November 20, 2018 Findings

of Fact, Conclusions of Law, Decision and Order (Planning

Commission's Decision), which denied as untimely Kendrick and

Chaulklin's application to renew their nonconforming use

certificate for a transient vacation rental (or TVR). 3

We hold that the circuit court erred in reversing the

Planning Commission's Decision.

I. BACKGROUND

Prior to 2008, the Kaua‘i County Code (KCC) allowed

single-family residences to be used as transient vacation

rentals.

2 The Honorable Kathleen N.A. Watanabe presided.
3 "'Transient vacation rental' means a dwelling unit which is provided
to transient occupants for compensation or fees, including club fees, or as
part of interval ownership involving persons unrelated by blood, with a
duration of occupancy of one hundred eighty (180) days or less." Kauaʻi
County Code (KCC) § 8-1.5 (2008).

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A. 2008 - Ordinance No. 864

In 2008, the County adopted Ordinance No. 864,

prohibiting transient vacation rentals outside of the Visitor

Destination Area. 4 KCC Title IV, Chapter 8, Article 17.

The County Council found there was "a compelling need

to regulate single-family transient vacation rentals on Kaua‘i"

as they "are occurring at a greater rate and inflicting a larger

impact on the community of Kaua‘i than was ever anticipated[.]"

Ord. No. 864, § 1 (2008). "Since 2000, out of the 2,050 new

residential units, 1,070 have been built for the seasonal homes

market and less than half have been for local families to rent

(46) or own (936)." Id. "This also means that the limited

available infrastructure and resources on Kaua‘i, including

roads, water, sewer capacity, building materials, and contractor

time are being used primarily for expensive second or third

homes rather than the primary home needs of local residents."

Id.

The County Council's goal was "to promote a high

quality of life for all people on this island, to preserve the

residential character of neighborhoods, to encourage the

4 "'Visitor Destination Area or VDA' are those areas designated as
Visitor Destination Areas on County of Kauaʻi zoning maps." Ord. No. 864, § 2
(2008); see also Campos v. Plan. Comm'n, 153 Hawai‘i 386, 390 n.5, 539 P.3d
170, 174 n.5 (App. 2023) ("Ordinance No. 864 defined Visitor Destination Area
as 'those areas designated as Visitor Destination Areas on County of Kaua‘i
zoning maps.'").

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diversity of incomes and backgrounds that has made Kaua‘i a

special place of aloha, and to promote health and safety and the

general welfare[.]" Id.

Although Ordinance No. 864 prohibited transient

vacation rentals outside of the Visitor Destination Area, it

established a procedure for owners of a lawful transient

vacation rental operating outside the Visitor Destination Area

to obtain a nonconforming use certificate to continue operating

their property as a transient vacation rental. KCC § 8-17.10(b)

(2008).

An owner who obtained a nonconforming use certificate

was required to "apply to renew the nonconforming use

certificate by July 31 for every year" with proof that certain

conditions were met. KCC § 8-17.10(g) (2008). "Failure to meet

these conditions [would] result in the denial of the application

for renewal of the nonconforming use certificates." KCC § 8-

17.10(g)(2).

Kendrick and Chaulklin own real Property in Anahola,

Kaua‘i, and obtained a nonconforming use certificate, TVNCU

#4308. 5

5 However, the 2015, 2016, and 2017 renewal applications identified
"Ginger Beach House, LLC" as the owner of the Property.

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B. 2010 to 2014 - Amendments to KCC

In 2010, Ordinance No. 904 amended KCC § 8-17.10 by

changing the July 31 due date for renewals to "annually on the

date of issuance of the non-conforming use certificate." KCC

§ 8-17.10(h) (2010). This ordinance also made denial automatic

stating, "[f]ailure to meet this condition [would] result in the

automatic denial of the application for renewal of the

nonconforming use certificates." Id.

In 2013, Ordinance No. 950 added that each application

to renew with proof of the excise tax and transient

accommodation licenses "shall be received by the Department

prior to the expiration date of a held non-conforming use

certificate." KCC § 8-17.10(h)(1) (approved July 23, 2013). 6

In 2014, Ordinance No. 974 increased the annual

renewal fee from $500.00 to $750.00. KCC § 8-17.10(h) (approved

6 Upon its approval, Ordinance No. 950 indicated KCC § 8-17.10(h)(1)
would read:

(h) The owner or lessee who has obtained a
nonconforming use certificate under this section shall
apply to renew the nonconforming use certificate annually
on the date of issuance of the nonconforming use
certificate.

(1) Each application to renew shall include
proof that there is a currently valid State of Hawai‘i
general excise tax license and transient
accommodations tax license for the Nonconforming use
and shall be received by the Department prior to the
expiration date of a held non-conforming use
certificate. Failure to meet this condition will
result in the automatic denial of the application for
renewal of the nonconforming use certificates.

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Sept. 30, 2014). Thus, the final version of KCC § 8-17.10(h) as

relevant to this case provided:

(h) The owner or lessee who has obtained a Nonconforming
Use Certificate under this Section shall apply to renew the
Nonconforming Use Certificate annually on the date of
issuance of the Nonconforming Use Certificate.

(1) Each application to renew shall include proof that
there is a currently valid State of Hawai‘i general
excise tax license and transient accommodations
tax license for the nonconforming use and shall be
received by the Department prior to the expiration
date of a held Nonconforming Use Certificate.
Failure to meet this condition will result in the
automatic denial of the application for renewal of
the Nonconforming Use Certificates.

. . . .

(3) The applicant shall pay an annual renewal fee of
seven hundred fifty dollars ($750.00) which shall
be deposited into the County General Fund.

Id. (formatting altered and emphases added).

C. 2015 - Timely Application

In 2015, Kendrick and Chaulklin timely applied to

renew their nonconforming use certificate, with the Planning

Department receiving their application on November 25, 2015,

ahead of the December 12, 2015 annual renewal date. The

application indicated Kendrick's email address was

"BETH@VSE.COM." A November 25, 2015 letter from the Planning

Department approved the application and explained the

nonconforming use certificate was renewed to December 12, 2016.

The letter made no mention of a grace period.

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D. 2016 - Warnings and Timely Application

Less than three months later, on February 9, 2016,

Mike Laureta, Planning Department Program Manager, sent an email

to "beth@vse.com" and others warning that untimely or incomplete

applications for renewal would not be accepted:

Subject: FW: 2016 TVR Renewal

For the past several years, the Department has strongly
encouraged the submittal of complete TVR renewal packets at
least two months prior to the renewal date. Last year,
there were 6 who missed the deadline, and submitted their
renewal packets within 1-30 days after the renewal date.
This cost them $1,500 + 750. There were 2 who completely
forgot to renew, and are now appealing the forfeiture.

By this email, I am giving fair warning - Ordinance
No. 950, Sec. 8-17-10(h)(1) removed the ability to reapply
for renewal if you failed to timely renew. This means -
from here going forward, if you're 1 day late, the
Department will issue you a forfeiture notice. If you
don't run your business in a professional manner and forget
to timely renew, no excuse will be good enough.

If the renewal packet is incomplete beyond the renewal
date, the Department will issue a Forfeiture notice. It's
incumbent on the certificate holders to provide all the
documents listed on the renewal form - we will no longer
chase you for missing documents. At the time you submit
your packet, it had better be complete. You should all
know what is expected during the renewal process,
especially those with Special Permits. This includes a
hard copy of all the websites you advertise on, reflecting
at a minimum, your TVRNCU number and 24/7 on island
contact.

I will be sending this email to all, in groups of maybe 25.
So if you get this more than once, you really better not
miss a renewal date......

(Ellipsis in original and underline added.)

Kendrick and Chaulklin submitted a timely renewal

application on November 8, 2016, ahead of the December 12, 2016

annual renewal date. On November 16, 2016, the Planning

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Department approved the renewal application and explained that

the nonconforming use certificate was renewed to December 12,

2017.

The renewal letter also advised that renewal

applications must be made prior to the annual renewal date or

the Planning Department would issue a "Cease & Desist and Notice

of Forfeiture":

Your TVNCU is renewed to December 12, 2017 based on
the information submitted. Your file is active and
current. Please be advised that in order to keep your
Non-Conforming Use Certificate valid, you must:

1. Apply for renewal every year, no less than
thirty (30) days, and up to two months, prior to
the annual renewal date of December 12, 2017,
utilizing the most current renewal form on our
website, and the renewal fee existing at that
time (presently $750). Should your renewal be
at least one (1) day late, you will be served
with a Cease & Desist and Notice of Forfeiture.
Should your renewal be incomplete, it will not
be processed and will be returned to you via
USPS. The resubmittal of the complete
application must be before the renewal date.
The only supporting documents we will accept
after the renewal date is your tax documents
that are filed on an extension. . . .

E. 2017 - Untimely Application

In 2017, Kendrick submitted an application and a

$750.00 check, both dated December 15, 2017, and received by the

Planning Department on December 20, 2017. Because the

application was submitted after the December 12, 2017 renewal

date, the Planning Department denied the application.

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Kendrick and Chaulklin admitted their application was

submitted "'after the deadline set by the Planning Department.'"

They contested the denial of their untimely renewal application.

F. Contested Case Hearing, Oral Arguments, and Circuit Court
Appeal

Following a contested case hearing, the hearing

officer made findings and conclusions, and recommended the

Planning Commission affirm the Planning Department's decision

denying the renewal application because Kendrick and Chaulklin

"have not met their burden of proof by a preponderance of the

evidence establishing that this decision of the Planning

Department was based on an erroneous finding of a material fact,

or the Planning Director had acted in an arbitrary or capricious

manner, or had manifestly abused his discretion."

The Planning Commission heard oral arguments, and

issued its findings and conclusions, and decision and order

affirming the Planning Department's decision for the reasons set

forth by the hearing officer.

Kendrick and Chaulklin appealed to the circuit court.

Following oral arguments, the circuit court reversed the

Planning Commission and remanded the case to the Planning

Department "to timely accept and promptly process Appellants'

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renewal application for 2017 and affected subsequent years." 7

The County appealed.

II. STANDARDS OF REVIEW

In a secondary appeal, the circuit court reviews the

agency decision de novo under the right/wrong standard. See Dao

v. Zoning Bd. of Appeals of Honolulu, 144 Hawaiʻi 28, 38, 434

P.3d 1223, 1233 (App. 2019).

Hawaiʻi Revised Statues (HRS) § 91-14(g) (Supp. 2019)

provides:

(g) Upon review of the record the court may affirm
the decision of the agency or remand the case with
instructions for further proceedings; or it may reverse or
modify the decision and order if the substantial rights of
the petitioners may have been prejudiced because the
administrative findings, conclusions, decisions, or orders
are:
(1) In violation of constitutional or statutory
provisions;

(2) In excess of the statutory authority or
jurisdiction of the agency;

(3) Made upon unlawful procedure;

(4) Affected by other error of law;

7 The County also challenges various findings in the circuit court's
July 28, 2020 "Findings of Fact and Conclusions of Law, Decision and Order."
On the other hand, Kendrick and Chaulklin assert all the circuit court's
findings not challenged are binding on this court.

However, when a circuit court acts as an appellate court, it may not
make its own findings of fact. Sierra Club v. Bd. of Land & Nat. Res., 154
Hawai‘i 264, 284, 550 P.3d 230, 250 (App. 2024), cert. granted, No. SCWC-22-
0000516, 2024 WL 3378462 (July 11, 2024) (explaining the circuit court
reviewing an agency's decision under Hawaiʻi Revised Statues (HRS) § 91-14
acts as an appellate court and does not make findings of fact, cannot
consider the weight of the evidence, or pass upon the credibility of
witnesses).

Thus, we do not consider the circuit court's findings of fact, but
review the agency's decision pursuant to HRS § 91-14.

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(5) Clearly erroneous in view of the reliable,
probative, and substantial evidence on the whole
record; or

(6) Arbitrary, or capricious, or characterized by
abuse of discretion or clearly unwarranted
exercise of discretion.

"In a secondary appeal, '[t]his court's review is further

qualified by the principle that the agency's decision carries a

presumption of validity and [the party challenging the agency's

decision] has the heavy burden of making a convincing showing

that the decision is invalid . . . .'" Keep the North Shore

Country v. Bd. of Land & Nat. Res., 150 Hawai‘i 486, 503, 506

P.3d 150, 167 (2022) (quoting Korean Buddhist Dae Won Sa Temple

of Haw. v. Sullivan, 87 Hawai‘i 217, 229, 953 P.2d 1315, 1327

(1998)).

III. DISCUSSION

On appeal, the County contends the circuit court

"gravely erred in reversing" the Planning Commission's decision.

Kendrick and Chaulklin contend denial of their renewal

application violated state and county law, and their due process

rights. Here, the circuit court erred because the Planning

Commission did not violate state or county law and did not

violate Kendrick and Chaulklin's due process rights.

A. State and County Laws Were Not Violated

On appeal to the circuit court, Kendrick and Chaulklin

asked, "[d]id the Planning Commission violate state statute and

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county ordinance when it concluded [they] 'forfeited' their

[nonconforming use certificate] even though they never

discontinued their nonconforming use of the property?" In

particular, they argued the Planning Department violated HRS

§ 46-4(a) (Supp. 2017) and KCC § 8-13.2(a) when it denied their

renewal application, challenging the Planning Commission's

conclusion of law (COL) 15. 8

In their answering brief on further appeal to this

court, they argue there is no finding that they "discontinued

use of their nonconforming" transient vacation rental, and

8 COL 15 states:

15. When keeping in mind the purpose of Haw. Rev.
Stat. § 46-4 which is to empower the counties to enact
zoning ordinances allowing and encouraging the most
beneficial use of the land consonant with good zoning
practices, and construing it in a manner consistent with
that purpose, the zoning mandate of KCC § 8-17.10, as
commissioned by Haw. Rev. Stat. § 46-4(a), is to be
liberally construed to permit the nonconforming use of the
Subject Property to continue provided TVNCU #4308 is
maintained and registered with the Planning Department
pursuant to KCC § 8-17(h). See generally In the Interest
of CM, 141 Hawaiʻi at 353, 409 P.3d at 757 ("What is clear
in one statute [(i.e. KCC § 8-17.10(h))] may be called upon
in aid to explain what is doubtful in another [(i.e. Haw.
Rev. Stat. § 46-4(a))]."). If such registration lapses as
in this Contested Case, the nonconforming use is no longer
a lawful use because the Subject Property lacks a
"Nonconforming Use Certificate for [that] single family
vacation rental". KCC § 8-17.l0(b) and Cf. Waikiki
Marketplace. Inv. Co. v. Chair of Zoning of Appeals of the
C&C of Honolulu, 86 Hawaiʻi 343, 356, 949 P.2d 183, 196
(1997) ("[T]he terms 'lawful use' and 'previously lawful,'
as used in HRS § 46-4 and the LUO, refer to compliance with
previous zoning laws, not the building codes or other legal
requirements that may be applicable to the construction or
operation of a structure.").

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assert they used the transient vacation rental "throughout the

year prior to its December 12 renewal deadline."

HRS § 46-4 vests counties with their zoning power.

Kaiser Haw. Kai Dev. Co. v. City & Cnty. of Honolulu, 70 Haw.

480, 483, 777 P.2d 244, 246 (1989). HRS § 46-4 requires that

zoning "shall be accomplished within the framework of a long-

range, comprehensive general plan prepared or being prepared to

guide the overall future development of the county." HRS § 46-

4(a). Each county is allowed to adopt regulations to carry out

the purposes of HRS § 46-4 and "shall prescribe rules,

regulations, and administrative procedures and provide personnel

it finds necessary to enforce this section and any ordinance

enacted in accordance with this section." Id.

"The ordinances may be enforced by appropriate fines

and penalties, civil or criminal, or by court order at the suit

of the county or the owner or owners of real estate directly

affected by the ordinances." Id. The zoning powers "shall be

liberally construed in favor of the county exercising them, and

in such a manner as to promote the orderly development of each

county or city and county in accordance with a long-range,

comprehensive general plan to ensure the greatest benefit for

the State as a whole." Id.

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Importantly, HRS § 46-4(a) protects the existing

lawful use of a building or premises:

Neither this section nor any ordinance enacted
pursuant to this section shall prohibit the continued
lawful use of any building or premises for any trade,
industrial, residential, agricultural, or other purpose for
which the building or premises is used at the time this
section or the ordinance takes effect; provided that a
zoning ordinance may provide for elimination of
nonconforming uses as the uses are discontinued, or for the
amortization or phasing out of nonconforming uses or signs
over a reasonable period of time in commercial, industrial,
resort, and apartment zoned areas only. In no event shall
such amortization or phasing out of nonconforming uses
apply to any existing building or premises used for
residential (single-family or duplex) or agricultural uses.

Id.

Turning to the KCC, Chapter 8 is Kauai's zoning

ordinance. Article 13 of the zoning ordinance generally

addresses nonconforming structures and uses, and Article 17 of

the zoning ordinance specifically addresses transient vacation

rentals as nonconforming uses.

Generally, as provided in Article 13, a nonconforming

use "may continue to the extent that the use existed on

September 1, 1972" but "[i]f any nonconforming use ceases for

any reason for [a] continuous period of 12 calendar months or

for one season if the use be seasonal, then the use shall not be

resumed and any use of the land or building thereafter shall be

in full conformity with the provisions of this Chapter." KCC

§ 8-13.2(a), (b) (2012).

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Specifically, as provided in Article 17, nonconforming

use certificates for transient vacation rentals may be obtained

and renewed annually. KCC § 8-17.10. As discussed above, KCC

§ 8-17.10 requires an owner "who has obtained a Nonconforming

Use Certification under this Section . . . to renew the

Nonconforming Use Certificate annually on the date of issuance

of the Nonconforming Use Certificate." KCC § 8-17.10(h)

(emphasis added).

"Each application to renew . . . shall be received by

the Department prior to the expiration date of a held

Nonconforming Use Certificate" and "[f]ailure to meet this

condition will result in the automatic denial of the application

for renewal of the Nonconforming Use Certificates." KCC § 8-

17.10(h)(1).

To the extent Kendrick and Chaulklin rely on KCC § 8-

13.2(a) and (b) as the only means by which a nonconforming use

may cease, their reliance is misplaced. There is no language in

KCC § 8-13.2(a) and (b) preventing the County from separately

regulating nonconforming use certificates for transient vacation

rentals. And even if they were in conflict, KCC § 8-17.10

specifically applying to the renewal of nonconforming use

certificates for transient vacation rentals would trump. Cf.

Richardson v. City & Cnty. of Honolulu, 76 Hawai‘i 46, 54-55, 868

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P.2d 1193, 1201-02 (1994) (noting in part, "where there is a

'plainly irreconcilable' conflict between a general and a

specific statute concerning the same subject matter, the

specific will be favored") (citation omitted).

Moreover, holders of nonconforming use certificates

obtained under KCC § 8-17.10 must reapply annually prior to the

expiration date of the nonconforming use certificate. Thus, if

a nonconforming use certificate was issued pursuant to KCC § 8-

17.10, the provisions of KCC § 8-17.10 apply. Kendrick and

Chaulklin make no assertions that their TVNCU #4308

nonconforming use certificate for use as a transient vacation

rental was not issued pursuant to KCC § 8-17.10 governing

transient vacation rentals.

Finally, the 2016 letter approving the renewal of the

nonconforming use certificate for TVNCU #4308 stated, "Your

TVNCU is renewed to December 12, 2017[.]" Thus, on December 13,

2017, there was no nonconforming use certificate to renew. When

Kendrick and Chaulklin sent in the renewal form and check dated

December 15, 2017, which the Planning Department received on

December 20, 2017, the Planning Department was obligated to deny

the application as there was no existing nonconforming use

certificate to renew.

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In sum, the Planning Commission did not violate HRS

§ 46-4(a) and KCC § 8-13.2(a) when it affirmed the Planning

Department's decision to deny the untimely renewal application.

The Planning Commission's mixed finding and conclusion in COL 15

(providing in part that "[i]f such registration lapses as in

this Contested Case, the nonconforming use is no longer a lawful

use because the Subject Property lacks a 'Nonconforming Use

Certificate for [that] single family vacation rental") was not

clearly erroneous. (Some brackets in original.)

B. Due Process Rights Were Not Violated

For their due process argument, Kendrick and Chaulklin

contend (1) they did not receive sufficient notice of the

elimination of the thirty-day grace period, (2) the Planning

Department's refusal of their untimely renewal interfered with

their "constitutionally protected vested right to continue their

lawful nonconforming use," and (3) they were not provided an

opportunity to brief the alternate reason given by the Planning

Commission.

"The requirements of due process are flexible and

depend on many factors, but 'there are certain fundamentals of

just procedure which are the same for every type of tribunal and

every type of proceeding[,]' including those before

administrative agencies." Mauna Kea Anaina Hou v. Bd. of Land &

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Nat. Res., 136 Hawai‘i 376, 389, 363 P.3d 224, 237 (2015)

(citations omitted). "The basic elements of procedural due

process are notice and an opportunity to be heard at a

meaningful time and in a meaningful manner." Id. And, "due

process of law generally prohibits decisionmakers from being

biased, and more specifically, prohibits decisionmakers from

prejudging matters and the appearance of having prejudged

matters." Id. Substantive due process "guards against

arbitrary and capricious government action." DW Aina Le‘a Dev.,

LLC v. Bridge Aina Le‘a, LLC., 134 Hawai‘i 187, 219, 339 P.3d

685, 717 (2014) (citation and internal quotation marks omitted).

1. Notice

Before the circuit court, Kendrick and Chaulklin

contended they should be given a thirty-day grace period

pursuant to the 2014 Interpretive Rules. They argued they had

no notice of the elimination of the thirty-day grace period, or

in the alternative, inaccurate notice. They further argued, as

they do before this court, that the new rules cannot be applied

retrospectively. Contrary to their argument, Kendrick and

Chaulklin were not denied due process based on insufficient

notice.

Effective April 25, 2014, the Planning Commission

adopted KPAR-8-19-1, its administrative rule for "Transient

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Accommodation Units[.]" (Formatting altered.) The Planning

Commission found that the annual renewal process lacked

specificity, including where there was a late filing:

The requirements of the Chapter 8, Article 17 of the KCC
lack specificity pertaining to the annual renewal process,
including late filing, the documentation and evidence
required to maintain a non-conforming use as defined in KCC
Section 8-13, and the procedures necessary for a
certificate holder to seek due process in the event of a
non-renewal.

KPAR-8-19-1 FINDINGS. The rule then afforded late filers a

thirty-day grace period and charged an administrative processing

fee of twice the renewal fee:

"Late Renewal Applications. Renewal applications
received by the Planning Department within thirty
days (30) after the deadline may renew, provided
that in addition to the renewal fee, a
certificate holder shall pay an administrative
processing fee of twice the renewal fee."

KPAR-8-19-1(1)(F) (2014). 9 But "[a]fter the thirtieth (30th) day

after the renewal deadline, the Department shall reject any

renewal application and issue a forfeiture letter." KPAR-8-19-

1(1)(E) (2014).

However, this rule directly conflicted with the plain

language of KCC § 8-17.10(h) (2013), the ordinance in effect

when the rule was approved. KCC § 8-17.10(h) (2013) required

the renewal application and proof be received prior to the

expiration date otherwise the application would be denied:

9 We note there are two subsections labeled "F", and the subsection
which we refer to is the first subsection "F".

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(h) The owner or lessee who has obtained a
nonconforming use certificate under this section shall
apply to renew the nonconforming use certificate annually
on the date of issuance of the nonconforming use
certificate.

(1) Each application to renew shall include
proof that there is a currently valid State of Hawai‘i
general excise tax license and transient
accommodations tax license for the Nonconforming use
and shall be received by the Department prior to the
expiration date of a held non-conforming use
certificate. Failure to meet this condition will
result in the automatic denial of the application for
renewal of the nonconforming use certificates.

KCC § 8-17.10(h) (emphases added).

Because the thirty-day grace period directly

conflicted with the ordinance, the ordinance controlled. Cf.

Aregger v. Dep't of Tax'n, 124 Hawai‘i 325, 329, 243 P.3d 285,

289 (App. 2010) (explaining "where there is a conflict between a

court rule and a statute, the statute is controlling"); see

generally Robert D. Ferris Tr. v. Plan. Comm'n of Cnty. of

Kauaʻi, 138 Hawai‘i 307, 310, 378 P.2d 1023, 1026 (App. 2016)

(noting general principles of statutory construction apply to

municipal ordinances).

Effective November 23, 2017, the Planning Commission

amended KPAR-8-19-1 to remove the thirty-day grace period and

clarify that failure to submit a timely renewal application

would result in denial of the application:

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"Late Renewal Applications. Failure to submit an
application to renew the [nonconforming use
certificate] by the [nonconforming use
certificate]'s expiration date will result in the
automatic denial of the application. The
Planning Department shall not accept applications
submitted after the expiration date."

KPAR-8-19-1(C) (2017).

Thus, even if the thirty-day grace period was not

invalid, by the time Kendrick and Chaulklin's application to

renew was due, the rules did not provide for a thirty-day grace

period. And because the rule without a thirty-day grace period

was in effect at the time Kendrick and Chaulklin's application

to renew was due, it was not applied retroactively.

As for notice of the change in the rule, the amended

rule shows there was:

(1) "PUBLIC NOTICE: August 22, 2017 (Posted with the

Office of County Clerk)";

(2) "August 22, 2017 (Publications, Garden Island

Newspaper and Star Advertiser)"; and

(3) "PUBLIC HEARING: September 26, 2017."

As for notice of the KCC § 8-17.10(h) requirement to

file a timely renewal application, in addition to the plain

language of the ordinance, on February 9, 2016, Laureta sent an

email to Kendrick's email address as listed on her 2016 (and

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FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

2017) renewal application, "beth@vse.com", warning that untimely

or incomplete applications for renewal would not be accepted.

Based on the foregoing, Kendrick and Chaulklin were

not denied due process based on insufficient notice.

2. Vested Property Rights

On appeal to the circuit court, Kendrick and Chaulklin

contended that the "Planning Department's Forfeiture Letter and

denial of [their nonconforming use certificate] renewal packet

denied [them of] their right to due process of the law and

interfered with valuable and protected private property rights

because [they] have a constitutionally protected vested right to

continue their lawful nonconforming use."

In their answering brief to this court, Kendrick and

Chaulklin argue they "proved their lawful nonconforming use by

registering it," and "because the right to continue a

nonconforming use arises from Hawaii's zoning enabling act and

constitutional protections and not from regulatory provisions,

the right cannot be lost by a county ordinance or rule."

Again, "[t]he counties of the state of Hawai‘i 'derive

their zoning powers from HRS § 46–4(a) . . . , referred to as

the Zoning Enabling Act.'" Ferris, 138 Hawai‘i at 312, 378 P.3d

at 1028 (citation omitted). HRS § 46-4(a) provides in pertinent

part, "[n]either this section nor any ordinance enacted pursuant

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to this section shall prohibit the continued lawful use of any

building or premises for any trade, industrial, residential,

agricultural, or other purpose for which the building or

premises is used at the time this section or the ordinance takes

effect[.]"

"Under the United States and Hawai‘i Constitutions,

'preexisting lawful uses of property are generally considered to

be vested rights that zoning ordinances may not abrogate.'"

Ferris, 138 Hawai‘i at 312, 378 P.3d at 1028 (citation omitted).

But "[e]ven with respect to vested property rights, a

legislature generally has the power to impose new regulatory

constraints on the way in which those rights are used, or to

condition their continued retention on performance of certain

affirmative duties." U.S. v. Locke, 471 U.S. 84, 104 (1985);

see generally Save Sunset Beach Coal. v. City & Cnty. of

Honolulu, 102 Hawai‘i 465, 474, 78 P.3d 1, 10 (2003) ("[A]

zoning ordinance is a legislative act and is subject to the

deference given legislative acts."). "As long as the constraint

or duty imposed is a reasonable restriction designed to further

legitimate legislative objectives, the legislature acts within

its powers in imposing such new constraints or duties." Locke,

471 U.S. at 104.

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The Supreme Court of the United States has "upheld the

power of the State to condition the retention of a property

right upon the performance of an act within a limited period of

time" and explained that a taking does not occur where the

government is not required "to compensate the owner for the

consequences of his own neglect." Texaco, Inc. v. Short, 454

U.S. 516, 529-30 (1982); see also Bd. of Zoning Appeals,

Bloomington Ind. v. Leisz, 702 N.E.2d 1026, 1031 (Ind. 1998)

("The power to protect the property interest rests solely with

the landowner.").

Here, the County General Plan called for enacting

"clear standards and permit processes for regulating alternative

visitor accommodation structures and operations in Residential,

Agriculture, Open, and Resort zoning districts." Ord. No. 864,

§ 1. The County General Plan also provided that the

"[p]ermitting process should consider the cumulative impact that

a large concentration of alternative visitor units can have on a

residential neighborhood." Id.

In line with the County General Plan, the County

Council found "the uncontrolled proliferation of vacation

rentals in residential and other areas outside the Visitor

Destination Area . . . is causing significant negative impacts

to certain residential neighborhoods[.]" Id.

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The ordinance provided a process to identify and

register pre-existing lawful transient vacation rentals as non-

conforming uses. Id. § 11. The renewal process requires proof

of a valid Hawai‘i general excise tax license and a transient

accommodations tax license, and allows re-inspection of the

property to ensure compliance with other provisions of the

chapter. KCC § 8-17.10. Imposing an affirmative duty on the

holders of the nonconforming use permit to submit their renewal

application on time establishes a reasonable and efficient

process by which the County is able to receive the necessary

documents and ensure compliance with the chapter.

Hawai‘i courts are directed to liberally construe the

powers granted to counties under HRS § 46-4(a) in favor of the

counties and in a manner "to promote the orderly development of

each county . . . in accordance with a long-range, comprehensive

general plan to ensure the greatest benefit for the State as a

whole." HRS § 46-4(a). And this court has previously

determined that the "express purpose of KCC § 8-17.10 . . . is

consistent with the requirements of HRS § 46-4(a) as well as the

constitutional protection provided to property owners with

vested rights to pre-existing lawful uses of their property."

Ferris, 138 Hawai‘i at 313, 378 P.3d at 1029; Campos v. Plan.

Comm'n, 153 Hawai‘i 386, 400, 539 P.3d 170, 184 (App. 2023).

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Thus, the Planning Commission did not abrogate or

interfere with Kendrick and Chaulklin's vested rights when it

denied their untimely renewal application.

3. Alternate Theory

On appeal to the circuit court, Kendrick and Chaulklin

contended the Planning Commission relied on an alternate theory

"to deny Appellants' renewal packet" when it concluded that

"even if the [thirty-day] Grace Period [associated with the 2014

Interpretive Rules] were available to Petitioners, their Renewal

Application was incomplete when received by the Planning

Department on December 21, 2017 because it did not include the

administrative processing fee." 10 (Footnote omitted.) Kendrick

and Chaulklin argued that this violated their "right to due

process because the Planning Department only gave one reason for

denying the renewal packet, that it was untimely." As a result,

Kendrick and Chaulklin contended that they "were never given the

opportunity to brief that subject on appeal to the Planning

Commission."

However, the attorney for Kendrick and Chaulklin

raised the issue in oral argument before the Planning

Commission. For context, the thirty-day grace period rule

imposed an "administrative processing fee of twice the renewal

10 The December 21, 2017 letter from the Planning Department states
they received the renewal document packet on December 20, 2017.

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fee." KPAR-8-19-1 (2014). Thus, if Kendrick and Chaulklin were

genuinely relying on the thirty-day grace period when they sent

their untimely application and check to the Planning Department,

they presumably would have included the mandatory administrative

processing fee, which they did not. In any event, as mentioned,

Kendrick and Chaulklin had an opportunity to address this issue

in their oral argument before the Planning Commission.

IV. CONCLUSION

Based on the foregoing, we reverse the circuit court's

July 28, 2020 "Findings of Fact and Conclusions of Law, Decision

and Order" and August 24, 2020 Final Judgment, and affirm the

November 20, 2018 Planning Commission Decision.

On the briefs: /s/ Keith K. Hiraoka
Presiding Judge
Chris Donahoe,
Deputy County Attorney, /s/ Karen T. Nakasone
for Respondents-Appellees- Associate Judge
Appellants.
/s/ Sonja M.P. McCullen
Gregory W. Kugle, Associate Judge
Joanna C. Zeigler,
(Damon Key Leong Kupchak
Hastert),
for Petitioners-Appellants-
Appellees.

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