Case Notes

• Publication year: 2016
• Citation: Vol. 20 No. 02

CASE NOTES

Supreme Court

Administrative

Mama Kea Anaina Hou v. Board of Land and Natural Resources, No. SCAP-14-0000873, December 2, 2015 (Recktenwald, C.J., Nakayama and McKenna, J.J. with Pollack, J. concurring separately, with whom Wilson, J., joins and with whom McKenna, J. joins as to Part IV). This case required the Hawaii Supreme Court to determine whether the procedure followed by the Board of Land and Natural Resources (Board or BLNR) in issuing a permit to construct an observatory in a conservation district comported with due process. Specifically, the question was whether the approval of the permit before the contested case hearing was held violated the Hawaii Constitution's guarantee of due process. The Hawaii Supreme Court decided it did. A "fair trial in a fair tribunal is a basic requirement of due process." Sifagaloa v. Board, of Tr. of Employee Ret. Sys., 74 Haw. 181, 189, 840 P.2d 367, 371 (1992) (quoting In re Murchison, 349 U.S. 133, 136 (1955)). While the specifics of that guarantee can vary depending on the circumstances, in the instant case the Appellants were entitled to a contested case hearing and had unequivocally requested one before the Board voted on the permit at its February 2011 meeting. By voting on the permit before the contested case hearing was held, the Board denied the Appellants their due process right to be heard at "a meaningful time and in a meaningful manner." Sandy Beach Def. Fund v. City & Cnty. of Honolulu, 70 Haw. 361, 378, 773 P.2d 250, 261 (1989). The Board was on record in support of the project, and the permit itself was issued before evidence was taken and subject to adversarial testing before a neutral hearing officer. While UHH and the Board argued that the February 2011 decision was "preliminary" and subject to revision, the fact remained that the Board issued the permit prior to holding the contested case hearing. This procedure was improper, and was inconsistent with the statutory definition of a contested case.

Pollack, J. concurred separately, joined by Wilson, J., and McKenna, J. as to Part IV Pollack, J. stated that the Board's procedure of holding a contested case hearing after the permit had already been issued did not comply with state case law, see Kilakila 'O Haleakala v. Board of Land & Natural Res., 131 Hawaii 193, 205-06, 317 P.3d 27, 39-40 (2013), nor with due process under the Hawaii Constitution (lack of meaningful opportunity to be heard compromised appearance of justice). Pollack, J. concurred in the majority's result, but wrote separately because the Hawaii Supreme Court's precedents established that, in addition to these grounds, other provisions and guarantees of the Hawaii Constitution forged the right to a contested case hearing and established procedures essential to safeguard the rights protected by the Constitution in cases such as this one.

Appeal Pointers

A statement of jurisdiction must be filed by an appellant and a cross-appellant within ten days after the record on appeal is filed with the appellate clerk. HRAP 12.1(a). An appeal or cross-appeal is in default if the statement of jurisdiction is not filed. Relief from default must be obtained from the appellate court.

Arbitration

Noel Madamba Contracting LLC v. Romero, Nos. SCWC-12-0000778 and 12-0000868, November 25, 2015, (Wilson, J). In this case, the Hawaii Supreme Court considered the issue first addressed in Nordic PCL Constr, Inc. v. LPIHGC, LLC, 136 Hawaii 29, 358 P.3d 1 (2015), of whether under the Hawaii Uniform Arbitration Act a decision of a neutral arbitrator must be vacated due to evident partiality. The case arose from the arbitration of a construction contract dispute between homeowners Romero and contractor Noel Madamba Contracting LLC (Madamba). The main question was whether the arbitrator's failure to disclose his possible attorney-client relationship with the Romeros' counsel's law firm constituted evident partiality requiring vacatur of the arbitration award by the circuit court. Following the issuance of a partial final arbitration award, the parties learned that Cades Schutte LLP (Cades)—the law firm representing the Romeros throughout the arbitration—had been retained by the administrator of the arbitrator's personal retirement accounts to ensure that the accounts complied with state and federal laws. Based on this previously undisclosed information, Madamba moved to vacate the arbitration award. The Hawaii Supreme Court held that the arbitrator's failure to disclose his relationship with Cades created a reasonable impression of partiality, and as such, resulted in a violation of the disclosure requirements enumerated in Haw. Rev. Stat. § 658A-12. For neutral arbitrators, a violation of the disclosure statutes results in evident partiality as a matter of law.

Collections

Kondaur Capital Corp. v. Matayoshi, No. SCWC-12-0000867, November 23, 2015, (Pollack, J). In Ulrich v. Security Investment Co., 35 Haw. 158 (Haw. Terr. 1939), the Hawaii Supreme Court held that a personal property mortgagee seeking to enforce a non-judicial foreclosure sale bears the burden of establishing that the sale was conducted in a manner that is fair, reasonably diligent and in good faith, and that an adequate price was procured for the property. In the years after Ulrich was decided, the legislature made several amendments to the non-judicial foreclosure statute. The viability of Ulrich in light of these amendments and Ulrich's applicability to real property non-judicial foreclosures has recently been questioned, with federal courts in Hawaii reaching conflicting results. Therefore, the Hawaii Supreme Court held that the duties set forth in Ulrich remain viable law and applied to non-judicial foreclosures of real property mortgages. Additionally, in situations where a mortgagee acts as both the seller and the purchaser of the subject property at a...