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Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
20-OCT-2025
07:47 AM
Dkt. 68 SO

NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI‘I

WAIMANA ENTERPRISES INC.; SANDWICH ISLES COMMUNICATIONS, INC.;
PA MAKANI LLC; and CLEARCOM, INC., Plaintiffs-Appellants,
v.
DEPARTMENT OF HAWAIIAN HOME LANDS; HAWAIIAN HOMES COMMISSION;
HAWAIIAN HOMES COMMISSIONS TRUSTEES KALI WATSON,
WALTER KANEAKUA, ARCHIE KALEPA, PAULINE NAMU‘O, LAWRENCE LASUA,
MAKAI FREITAS, SANOE MARFIL, and MICHAEL KALEIKINI,
IN THEIR OFFICIAL CAPACITY, Defendants-Appellees 1

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
(CIVIL NO. 1CCV-XX-XXXXXXX)

SUMMARY DISPOSITION ORDER
(By: Nakasone, Chief Judge, Wadsworth and McCullen, JJ.)

This appeal challenges the dismissal of a complaint
alleging the violation of plaintiffs' exclusive license (License

1 Pursuant to Hawai‘i Rules of Evidence Rule 201 and Hawai‘i Rules of
Appellate Procedure (HRAP) Rule 43(c)(1), we take judicial notice that Kali
Watson, Walter Kaneakua, Archie Kalepa, Pauline Namu‘o, Lawrence Lasua, Makai
Freitas, Sanoe Marfil, and Michael Kaleikini are current Hawaiian Homes
Commissions Trustees and are automatically substituted as Defendants-
Appellees in place of William J. Aila, Jr., Patricia Kahanamoku-Teruya,
Russell Kaupu, Randy Awo, Zachery Helm, Dennis Neves, and David B. Ka‘apu.
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372) to build and operate a broadband telecommunication network
on lands administered by Defendant-Appellee Department of
Hawaiian Home Lands (DHHL). The First Amended Complaint (FAC)
raised the following claims: breach of contract (Count 1),
breach of the implied covenant of good faith and fair dealing
(Count 2), breach of fiduciary duties (Count 3), and for
declaratory relief (Count 4). We affirm the dismissal as to
Counts 1, 2, and 4, and vacate with respect to Count 3.
Plaintiffs-Appellants Waimana Enterprises Inc.
(Waimana), Sandwich Isles Communications, Inc. (SIC), Pa Makani
LLC (Pa Makani), and Clearcom, Inc. (Clearcom) (collectively,
Appellants) 2 appeal from the Circuit Court of the First
Circuit's 3 (Circuit Court) (1) November 3, 2022 "Findings of
Fact, Conclusions of Law, and Order Granting Defendants' Motion
to Dismiss Plaintiffs' First Amended Complaint Filed on July 19,
2022" (Dismissal Order), and (2) December 8, 2022 Final Judgment
in favor of Defendants-Appellees DHHL; Hawaiian Homes
Commission; Hawaiian Homes Commission Trustees William J. Aila,
Jr., Patricia Kahanamoku-Teruya, Russell Kaupu, Randy Awo,
Pauline Namuo, Zachery Helm, Dennis Neves, Michael Kaleikini,
and David B. Kaapu's (collectively, the DHHL Appellees).
Appellants raise the following points of error (POEs):
(1) the dismissal of Count 1 and Count 2 was erroneous because
License 372 granted Appellants an "[e]xclusive possessory right"
and "exclusive rights of entry to the 'premises' defined in
License 372," and the Circuit Court's conclusion to the contrary
was erroneous; (2) the 2017 Federal Communications Commission

2 SIC, Pa Makani, and Clearcom are subsidiaries of Waimana.

3 The Honorable Dean E. Ochiai presided.

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(FCC) order "did not preempt [Appellants'] exclusive possessory
right and/or exclusive rights of entry to premises," and the
Circuit Court's conclusion to the contrary was erroneous; and
(3) the dismissal of Count 3 for breach of fiduciary duties "on
the grounds that [Appellants] are not Native Hawaiian
Organizations under HRS § 673-2(c)" was erroneous, where the
complaint satisfied "notice pleading" standards; and the Circuit
Court "abused its discretion" by not allowing Count 3 to be
dismissed "without prejudice." 4 Appellants do not raise any
challenge or present argument specific to Count 4.
Upon careful review of the record and the briefs 5
submitted by the parties and having given due consideration to
the arguments advanced and the issues raised, we resolve
Appellants' contentions as follows.
On May 9, 1995, DHHL issued License 372 to Waimana,
granting it "the exclusive right and privilege to build,

4 Appellants raised six POEs. The three POEs we do not address
challenged the application of a two-year statute of limitations to
Appellants' claims (POE 3), the failure to grant the requested leave to add
Hawaiian Telcom Inc. (HTI) as an indispensable party (POE 4), and the
conclusion that the United States was an indispensable party (POE 6). Our
resolution of the first and second POEs regarding the claim of an "exclusive
possessory right" and the FCC Order are dispositive, and we need not reach
these remaining challenges to the Dismissal Order.

5 The parties submitted supplemental briefing on the effect, if
any, of the federal district court's decision, Sandwich Isles Commc'ns, Inc.
v. Hawaiian Telcom, Inc., Civ. Nos. 22-00426 JAO-KJM, 22-00427 JAO-KJM, 22-
00428 JAO-KJM, 22-00434 JAO-KJM, 22-00435 JAO-KJM, 22-00441 JAO-KJM, 2023 WL
6378626 (D. Haw. Sep. 29, 2023), which was entered after briefing in this
appeal had concluded. The federal decision resolved Appellants' consolidated
appeals from six Bankruptcy Court proceedings and determined issues relevant
to this appeal, that: (1) HTI acquired SIC's interest in License 372 through
the bankruptcy trustee's sale, id. at *14; (2) SIC's interest in License 372
was not an interest in real property, id. at *15; (3) SIC's interest in
License 372 was not a lease of real property, id. at **24-25; (4) SIC's
interest in License 372, which was acquired by HTI, was not limited to "voice
only" services, id. at *34; and (5) by acquiring SIC's interest in License
372, HTI had full rights of access to the buildings, network, and premises
conferred by SIC's interest in License 372, id.

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construct, repair, maintain and operate a broad band [sic]
telecommunications network" on DHHL lands and a "right of entry
upon the easement area" for that purpose. 6 DHHL granted License
372 to Waimana, "its legal successors and assigns, in perpetuity
. . . unless sooner terminated," and waived the nominal one
dollar rent. License 372 expressly prohibited any assignments
of Waimana's interest in License 372 without DHHL's prior
consent. 7 Waimana subsequently partially assigned portions of
License 372 to its subsidiaries with DHHL's consent, as follows:
to SIC in 1996, to Pa Makani in 2011, and to Clearcom in 2014,

6 The pertinent text describing the license states:

NOW THEREFORE, LICENSOR [(DHHL)], in consideration of the
services to be provided by LICENSEE [(Waimana)], and the
terms, conditions and covenants herein contained on the
part of LICENSEE to be kept, observed and performed, hereby
grants and issues to LICENSEE, and its legal successors and
assigns, the exclusive right and privilege to build,
construct, repair, maintain and operate a broad band
telecommunications network including poles, overhead and/or
underground lines, appliances, microwave and/or other types
of equipment over, across, under and throughout all lands
under the administration and jurisdiction of LICENSOR, and
its legal successors and assigns, including the right to
trim and keep trimmed any vegetation, shrubbery, bushes or
trees in the way of its lines and appurtenances, and
including also the right of entry upon the easement area
and adjoining land of LICENSOR for the construction,
maintenance, operation and removal of LICENSEE's line and
appurtenances over, across and under the LICENSE area.

(Emphases added.)

7 The "Assignments" prohibition stated as follows:

13. ASSIGNMENTS. Except as expressly provided in this
LICENSE, this LICENSE is not transferable. At no time
during the term of this LICENSE, shall LICENSEE assign,
mortgage or pledge its interest in this LICENSE or its
interest in the improvements now or hereafter erected on
the premises without the prior written consent of LICENSOR,
which consent will not be withheld unreasonably.

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for provision of different types of telecommunications services,
such as voice, data, and wireless.
In 2017, the FCC issued an order preempting Waimana's
exclusive right to build and operate the network, finding that
License 372's "exclusivity provision" banned telecommunications
competition on DHHL lands in violation of the Federal
Communications Act (FCC Order). 8
The Dismissal Order and the FAC also reflect that
after SIC defaulted on loans it obtained from the U.S.
Department of Agriculture's Rural Utilities Service (RUS), RUS
obtained a $138,557,635.82 judgment against SIC. On May 1,
2020, RUS recorded the judgment and obtained a writ of
execution, levying certain SIC property that included
infrastructure and equipment SIC had built and operated pursuant
to License 372. These assets were later acquired by HTI through
the bankruptcy trustee's sale.
Appellants' July 19, 2022 FAC alleged that "DHHL's
breach of License 372 have [sic] resulted in [Appellants] not
being able to charge HTI for use of [Appellants'] license

8 The FCC Order stated in pertinent part:

We therefore preempt enforcement of the exclusivity
provision of the Exclusive License because it has the
effect of prohibiting the ability of any entity other than
[SIC] to provide telecommunications services on the
Hawaiian home lands. We note that the Exclusive License
also contains a provision which states that "[a]fter
LICENSEE activates the existing and/or new
telecommunications infrastructure, [DHHL] agrees not to
allow any other telecommunications provider to use any
remaining telecommunications infrastructure to continue to
provide or initiate services on [DHHL's] lands." We also
find it necessary to preempt enforcement of this provision
to the extent that it acts as a restatement or extension of
the exclusivity provision.

(First brackets added.)

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easement areas and premises to pay for these beneficiary
benefits[,]" i.e., the telecommunications services. Relevant to
Appellants' contentions on appeal, in paragraphs 25 and 26 of
the FAC, Appellants explain their interpretation of License 372
as conferring exclusive rights of possession and entry to them,
more similar "to a lease than a license," as follows:

25. Thus, under License 372, once DHHL approves a
development plan for certain HHL areas – upon completion of
said development, those "lands" and "improvements" become
"Premises" and "easement areas" to which Waimana, or its
approved assignees, obtain exclusive possession, subject to
certain lessor-type of rights such as abandonment,
relocation, and/or breach.

26. Based on the provisions in License 372, under
Hawaii law, it is more a kin [sic] to a lease than a
license and regardless is an interest in real property.
Kiehm v. Adams, 109 Hawaii 296, 297, 126 P.3d 339, 340
(2005) [(quoting from the case)]. . . . License 372
satisfies the three factors for a lease.

With regard to the 2017 FCC Order, paragraph 46 of the FAC
alleges that Appellants' "right to exclusive possession of their
License 372 Easement areas survived the FCC Order."
Counts 1, 2 and 4 were premised on Appellants' claim
of an exclusive right of possession. Count 1, breach of
contract, alleged that DHHL breached License 372, among other
things, by "allowing HTI to enter into [Appellants'] easement
areas and premises." 9 Count 2, breach of good faith and fair
dealing, alleged that Appellants entered into the License 372
agreement to provide telecommunications services to HHL
beneficiaries "based on the promise that the easements were

9 Appellants' breach of contract claim also alleged that DHHL
"allow[ed] HTI to carry non-voice telecommunications via the A-2 Assets" that
HTI acquired in the bankruptcy proceedings, when SIC's interest in License
372 was limited to "voice only" communications. On appeal, however,
Appellants make no specific argument on this particular aspect of their
claim, and we do not address it. See HRAP Rule 28(b)(7).

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exclusive to areas they developed and used to provide said
services." Count 3, breach of fiduciary duties, did not
expressly rely on the claim of exclusive right to possession,
and alleged a breach of the "trust fiduciary duties" that DHHL
Appellees "owed" to Appellants "as native Hawaiian
corporations." Count 4 requested a declaratory finding, among
other things, that License 372 granted Appellants "exclusive
possession of easement areas and premises of HHL that they
developed."
We review the grant of a motion to dismiss de novo.
Civil Beat Law Ctr. for the Pub. Int., Inc. v. City & Cnty. of
Honolulu, 144 Hawaii 466, 474, 445 P.3d 47, 55 (2019).

A complaint should not be dismissed for failure to state a
claim unless it appears beyond doubt that the plaintiff can
prove no set of facts in support of his or her claim that
would entitle him or her to relief. Our review is strictly
limited to the allegations of the complaint, which we view
in the light most favorable to the plaintiff and deem to be
true. However, the court is not required to accept
conclusory allegations on the legal effect of the events
alleged.

Id. (citation modified).
(1) Appellants contend the Circuit Court "erred in
dismissing" Count 1 and Count 2 "on the grounds that License 372
did not grant [Appellants] any exclusive possessory right or
exclusive rights of entry to the 'premises' defined in License
372." Appellants argue that the "plain and ordinary meaning of
sections 17-20, 23 and 25 [in the license] is that License 372
granted [Appellants] exclusive possession and exclusive rights
of access to License 372 premises except for the rights reserved
by DHHL in sections 18-20." Relying on Kiehm v. Adams, 109
Hawaii 296, 126 P.3d 339 (2005), Appellants also argue that
License 372 "is akin to a lease under the Kiehm factors" because

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"(1) License 372 sets forth the right to possess 'premises' in
the sections discussed above; (2) this right is assignable in
section 25; and (3) for a term in perpetuity."
A plain reading of the specified sections in License
372 does not support Appellants' argument. Section 17 regarding
construction of improvements pertinently provides that: "All
buildings or structures or other major improvements of whatever
kind that LICENSEE constructs or erects on the premises shall
remain the property of LICENSEE" - and Licensee had the right to
"remove its property" from Licensor's premises prior to
termination of the license. Section 18 regarding maintenance of
premises pertinently provides that: "LICENSEE shall repair and
maintain all improvements . . . upon the premises," "keep the
premises and all improvements thereon in a strictly clean and
sanitary condition," "comply with all laws . . . applicable to
the premises and improvements[,]" and "allow LICENSOR or its
agents, at all reasonable times, free access to the premises" to
examine and monitor their condition. Section 19 regarding
breach provides that if Licensee failed to comply with the
conditions, "LICENSOR may, at its option, cancel this LICENSE
Agreement and, thereupon, take immediate possession of the
premises[.]" Section 20 regarding right of entry provides that
Licensor "shall have the right to enter the Premises at all
times for the purposes of conducting its own inspection and to
ensure that LICENSEE is in compliance with the provisions of
this LICENSE." Section 23 provides that: "The word 'premises',
[sic] when it appears herein, includes and shall be deemed to
include the lands described above and improvements whenever and
wherever erected or placed thereon." Section 25 explained who
was bound by the agreement. Nowhere in sections 17-20, 23 and

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25 set forth supra, did DHHL grant Waimana an exclusive right of
possession or exclusive right of access to the "premises"
identified under License 372.
With regard to Appellants' second argument that
License 372 was not a license but was "akin to a lease," the
Circuit Court's conclusions that License 372 was not a lease,
were correct. 10 In Kiehm, the Hawaii Supreme Court identified
three key factors for determining whether an agreement is a
license or lease: (1) "does the grantee have the right to
occupy a distinct and separate part of the premises"; (2) "[i]s
the grantee's right to possession assignable (suggesting a
lease) or is it a personal privilege (suggesting a license)";
and (3) "[i]s the agreement for a fixed term (suggesting a
lease)[.]" 109 Hawaii at 303, 126 P.3d at 346 (citation
modified).

10 The Circuit Court concluded that:

5. License 372 is a license.

6. A license does not grant a possessory interest in
land. [(citing Kiehm and other supporting authority).]

7. License 372 grants [Appellants] the right to use
Hawaiian home lands to build, construct, repair, maintain,
and operate a telecommunications infrastructure.

8. License 372 does not grant [Appellants] any
possessory or ownership rights over any portions of
Hawaiian home lands, much less the right to exclude others
from said lands.

. . . .

12. License 372 does not grant possessory rights over
definite parcels or "premises" as defined in License 372.

13. License 372 is not for a fixed term, but rather,
an indefinite period that is dependent on the nature of the
licensee's use of Hawaiian home lands.

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The first Kiehm factor weighs in favor of License 372
being a license and not a lease. Waimana was never granted a
right to occupy a distinct and separate part of the premises.
The Kiehm court noted, "[e]xclusive possession of the leased
premises is essential to the character of a lease" and "[t]here
must be a conveyance of a definite space in order for a lease,
rather, [sic] than a license, to exist[.]" Id. (quoting 49
Am.Jur.2d Landlord and Tenant § 21). License 372 did not grant
Appellants exclusive possession of DHHL lands or the premises.
Rather, it granted Waimana "the exclusive right and privilege"
to build and operate the telecommunications network. The second
Kiehm factor also weighs in favor of License 372 being a
license, not a lease. While DHHL did consent to Waimana's
partial assignments of License 372 to its subsidiaries, the
express terms of Section 13 precluded Waimana from assigning its
interest in License 372 to any party without approval by DHHL.
The third Kiehm factor also weighs in favor of License 372 being
a license and not a lease, because License 372 was not for a
fixed term, but was granted "in perpetuity."
Accordingly, Appellants' challenge to the dismissal of
Counts 1 and 2 on grounds that License 372 granted them
exclusive possessory rights and rights of entry to the
"premises" lacks merit. Because these Counts and also Count 4
made these same assertions, Appellants failed to state a claim
upon which relief could be granted, and the Circuit Court's
dismissal on this basis was correct. See Civil Beat, 144 Hawaii
at 474, 445 P.3d at 55.
(2) Appellants contend that the FCC Order did not
preempt their "exclusive possessory right and/or exclusive
rights of entry to premises." Appellants' argument for this

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second point of error is difficult to discern, as it is
presented in single-spaced sentences interspersed between
multiple block quotes from pleadings filed below. Appellants
claim that they are "not trying to re-litigate or attack the FCC
Order," but they appear to argue that the Circuit Court
erroneously interpreted the FCC Order.
This POE, like the prior point discussed above, again
relies on the incorrect premise that License 372 granted
Appellants exclusive possessory rights and rights of entry to
the License 372 "premises," and lacks merit.
(3) Appellants contend that in Count 3, they
sufficiently alleged that they were native Hawaiian
organizations under HRS § 673-2, 11 and dismissal with prejudice,
rather than without prejudice, on that count was erroneous.
Appellants argue the Circuit Court erred in determining they
were not "native Hawaiian organizations" with standing to sue
under HRS § 673-2(c); and although they failed to exhaust their
administrative remedies prior to filing suit as required by HRS
§ 673-3, 12 they should be allowed to dismiss their claim for
breach of fiduciary duty without prejudice, so that they may
pursue their administrative remedies. These arguments have
merit.

11 HRS Chapter 673, entitled "Native Hawaiian Trusts Judicial Relief
Act," identifies parties authorized to sue the State for breach of trust or
fiduciary duties in HRS § 673-2(a), including "native Hawaiian
organizations." HRS § 673-2(c) (2016) defines "native Hawaiian
organizations" to include a "corporation . . . whose purpose is to protect
and uphold . . . the social and economic self-sufficiency of native
Hawaiians[.]"

12 HRS § 673-3 requires that prior to the filing of a suit in
circuit court under the Chapter, the party "shall have exhausted all
administrative remedies available, and shall have given not less than sixty
days written notice prior to filing suit that unless appropriate remedial
action is taken suit shall be filed."

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In ruling on a motion to dismiss for failure to state
a claim, "the appellate court's consideration is strictly
limited to the allegations of the complaint, and the appellate
court must deem those allegations to be true." Kealoha v.
Machado, 131 Hawaii 62, 74, 315 P.3d 213, 225 (2013) (citation
modified). Hawaii only requires notice pleading. Bank of Am.,
N.A. v. Reyes-Toledo, 143 Hawaii 249, 263, 428 P.3d 761, 775
(2018), overruled in part on other grounds by Wilmington Sav.
Fund Soc'y, FSB v. Domingo, 155 Hawaii 1, 556 P.3d 347 (2024).
Here, although the FAC did not allege a statutory
basis for the breach of fiduciary duty claim in Count 3, the FAC
alleged that "[Appellants] are native Hawaiian organizations as
noted in License 372 and the Partial Assignments." The FAC
stated that License 372 provided that "LICENSOR believes and
intends that the issuance of this Exclusive 'Benefit' LICENSE
will also fulfill the purpose of advancing the rehabilitation
and welfare of native Hawaiians." Appellants pled they were
native Hawaiian corporations, and asserted that one purpose of
License 372 was to advance the rehabilitation and welfare of
native Hawaiians, which this court must deem true. See Kealoha,
131 Hawai‘i at 74, 315 P.3d at 225. The Circuit Court therefore
erred in concluding that Appellants failed to sufficiently
allege they were native Hawaiian organizations under Hawaii's
notice pleading requirements. See Civil Beat, 144 Hawai‘i at
474, 445 P.3d at 55.
The Circuit Court also dismissed Count 3 on a separate
basis, under HRS § 673-3, where Appellants failed to satisfy the
pre-suit requirements of 60-days notice of their claim and
exhaustion of their administrative remedies. The Circuit Court
ruled that it lacked subject matter jurisdiction over this

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claim. We conclude that although dismissal on this ground was
proper, the Circuit Court should have ordered a dismissal
without prejudice rather than with prejudice. See For Our
Rights v. Ige, 151 Hawai>i 1, 13 n.6, 507 P.3d 531, 543 n.6 (App.
2022) ("Dismissal for lack of subject matter jurisdiction should
be without prejudice, as a court is unable to reach the merits
of claims over which it has no subject matter jurisdiction."
(citations omitted)).
For the foregoing reasons, we affirm in part and
vacate in part the Circuit Court's Dismissal Order. The
dismissal of Counts 1, 2, and 4 is affirmed. The dismissal of
Count 3 is vacated, as the dismissal should have been without
prejudice. We vacate the Final Judgment and remand to the
Circuit Court for entry of an order of dismissal consistent with
this Summary Disposition Order.
DATED: Honolulu, Hawai‘i, October 20, 2025.
On the briefs:
/s/ Karen T. Nakasone
William Meheula,
Chief Judge
for Plaintiffs-Appellants.
/s/ Clyde J. Wadsworth
Jordan A.K. Ching,
Associate Judge
Deputy Attorney General
for Defendants-Appellees.
/s/ Sonja M.P. McCullen
Associate Judge