*** FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER ***
Electronically Filed
Supreme Court
SCWC-13-0000785
06-MAY-2015
09:13 AM
IN THE SUPREME COURT OF THE STATE OF HAWAI#I
---o0o---
FETU KOLIO,
Petitioner/Appellant/Plaintiff-Appellant,
vs.
HAWAI#I PUBLIC HOUSING AUTHORITY,
Respondent/Appellee/Defendant-Appellee.
SCWC-13-0000785
CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
(CAAP-13-0000785; CIV. NO. 12-1-2339-09)
MAY 6, 2015
RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON JJ.
OPINION OF THE COURT BY NAKAYAMA, J.
This appeal concerns Fetu Kolio’s (Kolio) eviction from
Mayor Wright Homes (Mayor Wright), a federally-subsidized public
housing project, which is owned and operated by Hawai#i Public
Housing Authority (HPHA). While living at Mayor Wright, Kolio
served as the president of the Mayor Wright Homes Tenant
*** FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER ***
Association (Association) and misappropriated approximately
$1,400 in Association funds. He later pled guilty to second
degree theft. HPHA evicted Kolio from Mayor Wright, alleging
that Kolio’s theft of Association funds violated a term in his
lease that stated: “Tenant . . . shall not engage in . . . any
criminal activity . . . that threatens the health, safety or
right to peaceful enjoyment of Management’s public housing
premises by other public housing residents or neighboring
residents.” On appeal, both the Circuit Court of the First
Circuit (circuit court) and the Intermediate Court of Appeals
(ICA) affirmed.
On review of the record, HPHA failed to carry its
burden of showing that Kolio’s theft threatened the health,
safety, or peaceful enjoyment of the premises. Additionally,
Kolio’s theft did not meet the definition of criminal activity
given in Hawai#i Administrative Rules (HAR) § 17-2020, which
governs the practice and procedure for terminating the tenancy of
a person occupying a unit in a project that is owned or operated
by HPHA. Therefore, we hold that the ICA gravely erred in
affirming the Eviction Board, and we reverse the Eviction Board’s
Order.
I. BACKGROUND
In 2004, Kolio entered into a rental agreement with
2
*** FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER ***
HPHA (Rental Agreement) under which he became a tenant of Mayor
Wright, a federally-subsidized housing project. The project is
under the jurisdiction of the U.S. Department of Housing and
Urban Development (HUD) and under the ownership and operation of
HPHA. From 2009 until 2011, Kolio served as the President of the
Mayor Wright Tenant Association.1 On July 27, 2010, Kolio
received a check for $1,400 from HPHA to be used for resident
participation activities as required by HUD.2 In 2011, Kolio
failed to comply with HPHA’s requests for financial documentation
of the Association checking account, and HPHA’s Financial
Management Office confirmed that the check had been cashed and
deposited into Kolio’s personal account. Kolio was charged with
Theft in the Second Degree, a Class C felony in January 2012 and
he pled guilty to the charge on May 29, 2012.3
A. HPHA Proceedings
On February 27, 2012, HPHA sent Kolio a Notice of
Violation of Rental Agreement and Proposed Termination of Rental
1
The Association is referred to as a “resident council” by HUD.
Pursuant to 24 C.F.R. § 964.18, housing authorities like HPHA must assist
residents in establishing and maintaining a resident council upon the request
of the residents. Participation in resident councils is voluntary, and the
governing board is democratically elected. 24 C.F.R. § 964.115.
2
These funds had been provided to the Association by HUD under 24
C.F.R. § 964.150(a)(1). These funds were to be used for purposes set forth in
24 C.F.R. § 964.
3
As a result, Kolio was sentenced to 30 days of incarceration, five
years probation, and directed to pay $1,400 in restitution to HPHA.
3
*** FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER ***
Agreement (Non-Rent Violation) (Notice) stating that HPHA would
proceed to terminate Kolio’s tenancy because he violated, among
other sections, Section 8(p)(1) of the Rental Agreement.
Section 8(p)(1) stated that it was a tenant’s obligation to
(p) Assure that Tenant, any member of the household, a guest
or another person under Tenant control, shall not engage in:
(1) Any criminal activity or alcohol abuse that
threatens the health, safety or right to peaceful
enjoyment of Management’s public housing premises by
other public housing residents or neighboring
residents or employees of Management[.]
The Notice further referred to Kolio’s misappropriation of
Association funds.
After the parties were unable to settle the dispute
through the grievance process prescribed by Hawai#i
Administrative Rules (HAR) § 17-2021, a hearing was scheduled
before the Oahu Eviction Board A of HPHA on September 11, 2012 to
determine whether the Rental Agreement should be canceled and
terminated due to the alleged violations. In addition to
providing evidence of Kolio’s theft and his conviction, the
Manager’s Report to the Eviction Board stated that “Theft in the
Second Degree is defined as a felony which constitutes criminal
activity in violation of Section 8(p)(1) of the Rental
Agreement.” The Report also stated that the “Association funds
which were to be used solely for the benefit of the individual
residents that Mr. Kolio represented, caused mistrust within the
community causing a [threat to] health, safety or right to
4
*** FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER ***
peaceful enjoyment of Management’s public housing premises by
other public housing residents or neighboring residents.”
Kolio argued that he did not violate Section 8(p)(1) of
the lease because that Section referred only to activity that
“(1) meets the definition of ‘criminal activity’ as understood in
the context of public housing evictions and (2) ‘threatens the
health, safety, or right to peaceful enjoyment of the premises’
by others.” He asserted that the argument that tenant safety and
health were threatened because the Association did not possess
the stolen funds was purely speculative, and “‘[a] legal
conclusion should not rest on a foundation of entirely fictitious
events.’”
At the hearing, HPHA Project Manager Joanna Renken
(Renken) testified that:
A lot of times, we feel that peaceful enjoyment or, or any
kind of threat of health and safety is a lot times physical,
but what people don’t know [is] that it can also mean
emotional as well. So, I’m speaking on behalf of the
residents of Mayor Wright Homes, and Mr. Kolio did violate
the Rental Agreement.
When responding to a question about what the Association funds
were to be used for, Renken stated:
Usually the resident participation fund is given by the HUD
. . . and that specific fund is supposed to be used to
generate programs for the residents within the community to
gain either employment or anything to make them become self
sufficient, or to provide anything that would be a benefit
to the residents within the community.
She also testified that the funds Kolio stole were supposed to be
5
*** FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER ***
used for any kind of services “from computer classes to sewing
classes to reading classes, anything that would benefit the, not
the association, the residents” and were not for personal use.
In its Findings of Fact, Conclusions of Law, Decision
and Order, the Eviction Board found that Kolio violated Section
8(p)(1) of the Rental Agreement and noted that Kolio had held a
position of trust and had deprived the Association and residents
of “the funds and resources that could have been used for the
health, safety and welfare of all the residents . . . .” The
Board ordered that Kolio be evicted.
B. Circuit Court Proceedings
Kolio appealed to the circuit court.4 Following the
notice of appeal, Kolio filed a Motion to Stay Writ of Possession
Pending Appeal, which was denied by the circuit court. Kolio was
evicted from his home. Following oral argument on Kolio’s
appeal, the circuit court affirmed the Eviction Board’s Findings
of Fact, Conclusions of Law, Decision and Order.
C. Proceedings Before the ICA
Kolio then appealed to the ICA, and the ICA affirmed
the circuit court. The ICA held that:
Kolio’s criminal theft misappropriated [Association funds]
that were already allocated and were now unavailable for
purposes that included the benefit of the health, safety,
4
The Honorable Rhonda A. Nishimura presided.
6
*** FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER ***
and peaceful enjoyment of the Mayor Wright Housing
residents. Kolio’s theft thus constituted the kind of
criminal activity that posed a “threat” within the meaning
of section 8(p)(1) of the Rental Agreement and provided
sufficient grounds for the Eviction Order.
II. STANDARDS OF REVIEW
A. Review of Administrative Agencies’ Findings and Conclusions
We review the appeal of an administrative decision for
grave errors of law, applying the same standard that the ICA
applied:
Review of a decision made by the circuit court upon
its review of an agency’s decision is a secondary appeal.
The standard of review is one in which [the appellate] court
must determine whether the circuit court was right or wrong
in its decision, applying the standards set forth in HRS
§ 91-14(g) [(1993)] to the agency’s decision.
HRS § 91-14, entitled “Judicial review of contested
cases,” provides in relevant part:
(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; or
(2) In excess of the statutory authority or
jurisdiction of the agency; or
(3) Made upon unlawful procedure; or
(4) Affected by other error of law; or
(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.
[U]nder HRS § 91-14(g), conclusions of law are reviewable
under subsections (1), (2), and (4); questions regarding
procedural defects under subsection (3); findings of fact
under subsection (5); and an agency’s exercise of discretion
under subsection (6).
7
*** FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER ***
United Pub. Workers, AFSCME, Local 646, AFL-CIO, v. Hanneman, 106
Hawai#i 359, 363, 105 P.3d 236, 240 (2005) (quoting Paul’s Elec.
Serv., Inc. v. Befitel, 104 Hawai#i 412, 416, 91 P.3d 494, 498
(2004)).
When determining whether an agency abused its
discretion pursuant to HRS § 91-14(g)(6), the court must first
“determine whether the agency determination under review was the
type of agency action within the boundaries of the agency’s
delegated authority.” Paul’s Elec. Serv., 104 Hawai#i at 417, 91
P.3d at 499. If the determination was within the agency’s realm
of discretion, then the court must analyze whether the agency
abused that discretion. Id. If the determination was not within
the agency’s discretion, then it is not entitled to the
deferential abuse of discretion standard of review. Id.
In regards to the abuse of discretion standard of
review, this court has held that “[a]gency determinations, even
if made within the agency’s sphere of expertise, are not
presumptively valid; however, an agency’s discretionary
determinations are entitled to deference, and an appellant has a
high burden to surmount that deference[.]” Id. at 419, 91 P.3d
at 501. This court has further described an agency’s proper
exercise of discretion as “not arbitrarily or willfully, but with
regard to what is right and equitable under the circumstances and
8
*** FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER ***
the law, and directed by the reason and conscience of the judge
to a just result.” S. Foods Grp., L.P. v. State, Dep’t of Educ.,
89 Hawai#i 443, 452, 974 P.2d 1033, 1042 (1999) (internal
quotations and citations omitted). Therefore, “[a] hearings
officer abuses his or her discretion when he or she ‘clearly
exceeds bounds of reason or disregards rules or principles of law
or practice to the substantial detriment of a party.’” Id.
(quoting Craft v. Peebles, 78 Hawai#i 287, 301, 893 P.2d 138, 152
(1995)).
III. DISCUSSION
The issue before the court is whether the Eviction
Board abused its discretion when it determined that Kolio’s theft
constituted criminal activity that threatened the health, safety,
or peaceful enjoyment of the premises by other residents or HPHA
employees.
A. The Determination of the HPHA Eviction Board Was Within Its
Realm of Discretion.
This court has held that “[t]he boundaries of an
agency’s discretion are established by the legislature . . . and
these statutory boundaries will likely assist a reviewing court
in defining ‘discretion’ when that court examines an agency’s
action for an abuse of discretion.” Paul’s Elec. Serv., 104
Hawai#i at 417-18, 91 P.3d at 499-500 (internal citations
9
*** FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER ***
omitted). HRS § 356D-94(a)(2006) provides that HPHA has the
discretion to terminate a public housing tenancy “[i]f it is
proven to the satisfaction of the eviction board that there is
cause to terminate a lease or rental agreement and evict the
tenant . . . .” HRS § 356D-92(a)(2006) limits this discretion by
prescribing the causes for termination of a lease. Relevant to
this case, HRS § 356D-92(a)(2) allows for termination if there is
a “[v]iolation of any of the provisions of a lease, rental
agreement, permit, or license[.]” Additionally, HAR § 17-2020-
5(a)(2004)(amended 2014) states that the examiner or eviction
board “shall determine whether there are sufficient grounds for
termination of the rental agreement[,]” and a “[s]erious or
repeated violation of material terms of the rental agreement” is
listed as a ground for termination in HAR § 17-2020-5(b)(1).
Pursuant to this legislative authority, it was within
the Eviction Board’s delegated authority to determine whether
Kolio violated the Rental Agreement and to evict him based on its
conclusion that he had. See Paul’s Elec. Serv., 104 Hawai#i at
417, 91 P.3d at 499. Thus, the next step in the analysis is to
consider whether the Eviction Board nonetheless abused its
discretion by making a determination that was arbitrary or
capricious. See HRS § 91-14(g)(6).
10
*** FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER ***
B. The Eviction Board Abused Its Discretion When It Determined
that Kolio’s Theft Was Criminal Activity that Threatened the
Health, Safety, or Peaceful Enjoyment of the Premises.
Although HPHA is given discretion to determine whether
grounds for eviction exist, this discretion is not unlimited.
HPHA is required to liberally construe the rules governing
eviction practice and procedure so that “the rights of the
parties are preserved in a just and timely resolution of every
hearing.” HAR § 17-2020-1. Here, Kolio was evicted from his
home and has had to live apart from his wife, who was allowed to
remain at Mayor Wright, because neither of them can afford to
live outside of public housing. And even though HPHA has an
important interest in maintaining the peace and safety of the
projects, HPHA must abide by the rules and provisions that create
the boundaries of its discretion, especially where the
consequences of its actions are so dire. In this case, it is
clear that HPHA abused its discretion when it found that Kolio’s
theft violated Section 8(p)(1) of the Rental Agreement.
Section 8 of the Rental Agreement lists obligations of
the tenant. Section 8(p) states that it is a tenant’s obligation
to “[a]ssure that Tenant . . . shall not engage in: (1) Any
criminal activity or alcohol abuse that threatens the health,
safety or right to peaceful enjoyment of Management’s public
housing premises by other public housing residents or neighboring
11
*** FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER ***
residents or employees of Management[.]” HPHA is required by HUD
to include this tenant obligation in its rental agreements, and
the language of Section 8(p)(1) traces the language of 24 C.F.R.
§ 966.4(f)(12)(i)(A)(2001).5 However, neither the Rental
Agreement nor HUD regulations define “criminal activity that
threatens the health, safety, or right to peaceful enjoyment.”
The phrase “that threatens the health, safety, or
peaceful enjoyment of the premises” clearly qualifies the kind of
criminal activity that violates the provision. There must be a
showing of a nexus between the tenant’s criminal activity and the
threat to health, safety, or enjoyment of the premises by other
residents or management employees. D.C. Hous. Auth. v.
Whitfield, No. 04-LT-410, 2004 WL 1789912, at *6 (D.C. Super. Ct.
Aug. 11, 2004)(“To hold [that a nexus is unnecessary] would
require the court to adopt the position that a public housing
agency has blanket authority to evict its residents for any
criminal behavior committed anywhere, regardless of whether such
behavior posed a threat to the health and safety of the other
5
24 C.F.R. § 966.4 reads:
(f) Tenant’s obligations. The lease shall provide that the tenant
shall be obligated:
. . .
(12)(i) To assure that no tenant, member of the tenant’s
household, or guest engages in:
(A) Any criminal activity that threatens the health,
safety, or right to peaceful enjoyment of the premises
by other residents . . . .
12
*** FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER ***
residents where the tenant lives . . . [and] allow [a public
housing authority] to effectively evict without cause, any person
who has a criminal record.”).
It appears that Hawai#i courts have not defined the
language of this provision, nor have they addressed HPHA
evictions pursuant to it.6 However, because HUD requires the
inclusion of this standardized provision in all lease agreements
between public housing authorities and tenants of federally-
subsidized projects, other jurisdictions have addressed evictions
under the same or substantially similar language to Section
8(p)(1). These cases are instructive as to what a public housing
authority must show in order to prove that a tenant violated this
provision.
In Guste Homes Resident Management Corp. v. Thomas,
Thomas leased an apartment from the Housing Authority of New
Orleans, which was managed by Guste and subject to the same HUD
6
The closest Hawai#i case appears to be Williams v. Hawai#i Housing
Authority. 5 Haw. App. 325, 690 P.2d 285 (1984). In that case, the tenants’
adult sons were involved in two altercations on project premises, one of which
was a fatal stabbing. Id. at 331, 690 P.2d at 290. The ICA held that the
tenants were properly evicted under a lease provision that required tenants to
“cause other persons who are on the premises with his consent to conduct
themselves in a manner which will not disturb his neighbors’ peaceful
enjoyment of their accommodations and will be conducive to maintaining the
project in a decent, safe, and sanitary condition . . . .” Id. at 326, 690
P.2d at 287. While the case implies that altercations on project premises are
conduct that disturbs residents’ “peaceful enjoyment” of their accommodations,
the ICA noted that the tenants “were evicted not on account of the incidents
per se, but because they failed to control the actions of their sons as
evidenced by the long list of complaints” preceding and including the two
altercations. Id. at 332, 690 P.2d at 290.
13
*** FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER ***
regulations under 24 C.F.R. § 966.4. 116 So. 3d 987, 988 (La.
Ct. App. 2013). Upon investigation, Guste learned that Thomas
had been charged with theft and illegal possession of stolen
goods following an incident at the New Orleans Arena. Id. Guste
determined that this criminal activity was a breach of the lease
agreement and served Thomas with a notice of termination. Id. at
989. At a trial on the merits of the eviction, Guste’s evidence
of the lease violation consisted of Thomas’s misdemeanor theft
conviction and the testimony of the property manager. Id. at
988. The trial court concluded that the theft was not a threat
to the health, safety, or peaceful enjoyment of the premises.
Id. at 989. Although the property manager testified that she
believed that Thomas’s theft was a threat, when the trial court
asked her how it specifically threatened other residents, she was
unable to give support for her belief with testimony or evidence.
Id. at 991. Although the record indicated that residents
reported the theft to Guste after it was exposed by the local
news, none of them stated that they felt threatened or concerned
for their individual health, safety, or peaceful enjoyment of the
premises. Id. at 991-92. The Louisiana Court of Appeal affirmed
the trial court’s decision holding that evidence of an actual
threat was “a necessary element to demonstrate that Mr. Thomas’
actions warrant eviction,” and Guste failed to meet its burden of
14
*** FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER ***
proof to evict Thomas. Id. at 991.
In Sumet I Associates, LP v. Irizarry, the tenant’s
lease was terminated for “‘criminal activity by a tenant . . .
that threatens the health, safety, or right to peaceful enjoyment
of the premises by other residents.’” 959 N.Y.S.2d 254, 255
(N.Y. App. Div. 2013). The tenant spray-painted graffiti in a
common area stairwell. Id. When the tenant failed to vacate the
premises, a summary holdover proceeding was brought, and a
videotape from the security camera capturing the tenant’s
vandalism was presented as evidence. Id. The New York Supreme
Court held that even though the landlord demonstrated the
tenant’s criminal activity, because the graffiti was on the
stairwell landing leading to the roof and there was no evidence
that any resident’s peaceful enjoyment was threatened, the
landlord failed to demonstrate that the lease term was violated.
Id.
In Housing Authority of City of Bangor v. Bush, the
housing authority claimed that the tenant’s guest violated the
same standardized lease provision when he removed a stop sign
near the residence. No. AP-00-22, 2001 WL 1719230, at *2 (Me.
Super. Feb. 2, 2001). The court held that this criminal activity
did not threaten the health, safety, or peaceful enjoyment of the
premises by other residents because there was no evidence
15
*** FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER ***
regarding the environment where the traffic sign had been
erected. Id. The court held that although in some
circumstances, the removal of a stop sign could pose a threat, in
other circumstances, such as in a remote area or on a road closed
to traffic, the removal of a stop sign would not be a threat.
Id. (“[E]ven though [removal of the sign] was criminal, its
effects on others is entirely a function of specific facts not
set out in the present record.”).
Kolio has cited to Boston Housing Authority v. Bryant,
693 N.E.2d 1060 (Mass. App. Ct. 1998), throughout his appeal in
support of his argument that his theft did not threaten the
health, safety, or peaceful enjoyment of the premises. In
Bryant, the tenant committed larceny by false pretenses when she
used the identity of a housing authority employee to apply for
credit cards, on which she ran up substantial charges. Id. at
1061. The Boston Housing court ruled that the tenant violated
the same HUD standardized lease provision prohibiting criminal
activity that threatened the health, safety, or peaceful
enjoyment of the premises. Id. HPHA and the ICA majority
asserted that Bryant is distinguishable from the present case
because the Boston Housing Authority used summary eviction
proceedings pursuant to a Massachusetts statute. Id. at 1062.
The court in Bryant held that summary proceedings were
16
*** FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER ***
inappropriate because “the right of peremptory termination of a
lease is limited by statute to violations of provisions that
forbid crimes that are physically destructive, violent,
associated with violence, or visibly asocial[,]” and Bryant’s
conduct did not fall under this statute. Id. at 1062-63.
However, while the present case is somewhat distinguishable
because there is no comparable Hawai#i statute allowing for
summary proceedings, Bryant’s discussion of the lack of evidence
supporting an actual threat is still instructive. The Boston
Housing Court judge reasoned that Bryant’s crime was a threat
because if the employee’s credit had been exceeded and the
employee had been unable to use it in an emergency, Bryant’s
conduct would have threatened the employee’s health and safety.
Id. at 1062. However, the Appeals Court disagreed and reversed
the Boston Housing Court stating, “[t]he difficulty with this
reasoning is that it rests on a chain of conjecture about
hypothetical facts . . . [a] legal conclusion should not rest on
a foundation of entirely fictitious events.” Id.
Taken together, these cases all support the conclusion
that the mere showing of some criminal activity is not enough to
violate this provision; there must be evidence supporting a
finding of an actual threat to the health, safety, or peaceful
enjoyment of the premises by other residents or management. A
17
*** FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER ***
conclusory assertion that the removal of a stop sign is a threat
to resident safety, or that graffiti is a threat to peaceful
enjoyment, or that one resident’s theft is a threat to the health
and safety of the others is not enough. If it were enough, a
violation of the provision could rest on a public housing
authority’s assumption of facts and circumstances not in the
record and would render the limiting phrase “that threatens the
health, safety, or peaceful enjoyment of the premises”
inoperative. Almost any criminal activity could hypothetically
pose a threat to others. Whether criminal activity actually
threatens health, safety, or peaceful enjoyment of the premises
is a fact-driven analysis, and there must be evidence to support
these facts.
In this case, the evidence supporting a conclusion that
Kolio’s theft threatened the health, safety, or peaceful
enjoyment of the premises was limited to Manager Renken’s report
to the Eviction Board asserting that Kolio’s theft caused
mistrust within the community and Renken’s oral testimony at the
eviction hearing about what the funds could have been used for.7
However, there was no evidence of any tenant who reported feeling
threatened by Kolio’s theft. Additionally, there was no evidence
7
See supra Part I.A regarding Renken’s testimony at the eviction
hearing.
18
*** FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER ***
as to what kind of programs the funds had been used for in the
past or what programs were planned but then canceled due to the
absence of funds. It cannot be assumed that Kolio’s theft was or
would have been a threat, and HPHA failed to carry its burden of
proving that Kolio violated Section 8(p)(1) of the Rental
Agreement.
Therefore, although the HPHA Eviction Board was acting
within its realm of discretion when it determined that Kolio’s
theft violated Section 8(p)(1) of the Rental Agreement, there was
no evidence on which they could have reasonably relied in making
that determination. An assumption that Kolio’s theft was a
threat, without supporting factual evidence, is not enough.
Therefore, the ICA gravely erred in affirming the Eviction
Board’s Order because the Eviction Board abused its discretion.
Furthermore, as a matter of public policy, it should be
noted that administrative agencies are bound to abide by the
administrative rules that govern that particular agency. Here,
HAR § 17-2020 contains the rules governing the practice and
procedure for terminating the tenancy of a person occupying a
unit in a project that is owned or operated by HPHA. HAR § 17-
2020-1. A definition of criminal activity can be found in HAR §
17-2020-2. Although the definition was changed in 2014, the
definition of criminal activity at the time that Kolio was
19
*** FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER ***
evicted stated the following:
“Criminal activity” means the tenant, any member of
the tenant’s household, a guest or another person under the
tenant’s control has engaged in:
(1) the illegal manufacture, sale, distribution, or
use of a drug, or the possession of a drug with intent to
manufacture, sell, distribute, or use the drug; or
(2) any illegal activity that has as one of its
elements the use, attempted use, or threatened use of
physical force substantial enough to cause, or be reasonably
likely to cause, serious bodily injury or property damage;
regardless of whether there has been an arrest or conviction
for such activity and without satisfying the standard of
proof used for a criminal conviction.
HAR § 17-2020-2 (effective 2004-2014). Kolio’s misappropriation
of Association funds did not involve drugs or the use of force,
and accordingly, it did not constitute criminal activity for
which Kolio could have been evicted under the rules controlling
evictions by HPHA.
IV. CONCLUSION
In conclusion, the Eviction Board erred when it held
that Kolio violated the Rental Agreement. Accordingly, we
reverse the ICA’s June 25, 2014 judgment on appeal, reverse the
circuit court’s April 12, 2013 judgment, and reverse the HPHA’s
September 21, 2012 Findings of Fact, Conclusions of Law, Decision
and Order.
Philip W. Miyoshi /s/ Mark E. Recktenwald
for petitioner
/s/ Paula A. Nakayama
Craig Iha, John C. Wong,
Diane K. Taira and /s/ Sabrina S. McKenna
Jennifer R. Sugita
for respondent /s/ Richard W. Pollack
/s/ Michael D. Wilson
20