County of Hawai'i v. C & J Coupe Family Ltd.

***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***

Electronically Filed
Intermediate Court of Appeals
29887
10-NOV-2010
11:50 AM

IN THE SUPREME COURT OF THE STATE OF HAWAI#I

---o0o---

COUNTY OF HAWAI#I, a municipal corporation,
Plaintiff/Counterclaim Defendant-Appellee

vs.

C&J COUPE FAMILY LIMITED PARTNERSHIP,
Defendant/Counterclaimant-Appellant

and

ROBERT NIGEL RICHARDS, TRUSTEE UNDER THE MARILYN
SUE WILSON TRUST; and MILES HUGH WILSON, Defendants

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C&J COUPE FAMILY LIMITED PARTNERSHIP,
Third-Party Plaintiff-Appellant

vs.

1250 OCEANSIDE PARTNERS aka HOKULI#A,
Third-Party Defendant-Appellee
(CIV. NO. 00-1-0181K)

COUNTY OF HAWAI#I, a municipal corporation,
Plaintiff/Counterclaim Defendant-Appellee

vs.
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C&J COUPE FAMILY LIMITED PARTNERSHIP,
Defendant/Counterclaimant/Cross Claimant-Appellant

and

1250 OCEANSIDE PARTNERS aka HOKULI#A,
Defendant/Cross Claim Defendant-Appellee

and

ROBERT NIGEL RICHARDS, TRUSTEE UNDER THE MARILYN
SUE WILSON TRUST; and MILES HUGH WILSON, Defendants
(CIV. NO. 05-1-015K)

NO. 29887

APPEAL FROM THE THIRD CIRCUIT COURT
(CIV. NOS. 00-1-0181K; 05-1-015K)

NOVEMBER 10, 2010

RECKTENWALD, C.J., NAKAYAMA, ACOBA, AND DUFFY, JJ.,
AND CIRCUIT JUDGE PERKINS, ASSIGNED DUE TO A VACANCY

OPINION OF THE COURT BY ACOBA, J.

This case is the post-remand sequel to County of

Hawai#i v. C&J Coupe Family Ltd. P’ship, 119 Hawai#i 352, 198 P.3d

615 (2008) [hereinafter, Coupe I]. In that case, this court

reviewed two condemnation actions (Condemnation 1 and

Condemnation 2) brought by Plaintiff/Counterclaim Defendant-

Appellee County of Hawai#i (the County) to condemn property

belonging to Defendant/Counterclaimant-Appellant C&J Coupe Family

Limited Partnership in Civ. No. 00-1-0181K and

Defendant/Counterclaimant/Cross Claimant-Appellant in Civ. No.

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05-1-015K (Coupe). In the instant appeal, we hold that

(1) the County’s asserted public purpose for Condemnation 2 was

not a pretext for a primarily private benefit, (2) Coupe’s

challenge to the value of just compensation set for the property

in Condemnation 2 could not be considered on remand, (3) the

circuit court of the third circuit (the court)1 erred in denying

Coupe’s request for attorneys’ fees associated with the

preparation of billing records and/or preparation of Coupe’s fee

petitions for the failed Condemnation 1, and (4) the court did

not abuse its discretion in denying Coupe’s request for

prejudgment interest on attorneys’ fees and other expenses

incurred in Condemnation 1. Therefore, we affirm the court’s

conclusion that Condemnation 2 was not pretextual, its valuation

of just compensation set for the property in Condemnation 2, and

its denial of Coupe’s request for prejudgment interest. We

remand to the court to decide Coupe’s request for attorneys’ fees

associated with the preparation of billing records and/or

preparation of Coupe’s fee petitions in Condemnation 1.

I. BACKGROUND

A. Condemnation 1 and Condemnation 2

While the facts giving rise to Condemnations 1 and 2

are discussed in Coupe I, a recitation of the facts is necessary

1
The Honorable Ronald Ibarra presided.

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to an understanding of the instant appeal.2 Third-Party

Defendant-Appellee 1250 Oceanside Partners in Civ. No. 00-1-0181K

and Defendant/Cross Claim Defendant-Appellee in Civ. No. 05-1-

015K (Oceanside) is the developer of the Hokuli#a subdivision

(Hokuli#a) which extends from the ocean almost to the Mâmalahoa

Highway and crosses the border between North and South Kona. Id.

at 357, 198 P.3d at 620. In exchange for a change in zoning for

Hokuli#a, Oceanside agreed to construct a bypass highway (Bypass)

between Keauhou and Captain Cook to “alleviate unacceptable and

unsafe traffic conditions.” Id. (brackets omitted). A

Development Agreement dated April 20, 1998 between the County and

Oceanside provided that the County would use its power of eminent

domain to acquire any property along the Bypass route that was

2
This case is before us by virtue of this court’s acceptance of
Coupe’s request for transfer from the Intermediate Court of Appeals (the ICA),
pursuant to Hawai#i Rules of Appellate Procedure (HRAP) Rule 40.2 (2009) and
Hawai#i Revised Statutes (HRS) § 602-58 (Supp. 2009). HRS § 602-58 states in
part as follows:

(a) The supreme court, in the manner and within the
time provided by the rules of court, shall grant an
application to transfer any case within the jurisdiction of
the intermediate appellate court to the supreme court upon
the grounds that the case involves:
(1) A question of imperative or fundamental public
importance;
. . . .
(b) The supreme court, in a manner and within the time
provided by the rules of court, may grant an application to
transfer any case within the jurisdiction of the
intermediate appellate court to the supreme court upon the
grounds that the case involves:
(1) A question of first impression or a novel legal
question; or
(2) Issues upon which there is an inconsistency in
the decisions of the intermediate appellate
court or of the supreme court.

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refused for private sale to Oceanside. Id. at 358, 198 P.3d at

621.

In an effort to construct the Bypass, Oceanside

purchased all of the private property needed, except for the

property owned by Coupe, who refused to sell. Id. at 359, 198

P.3d at 622. As agreed upon in the Development Agreement, the

County Council issued Resolution No. 266-00, which authorized the

condemnation of Coupe’s property and made reference to the

Development Agreement. Id. On the basis of Resolution No. 266-

00, the County then filed Condemnation 1, Civ. No. 00-1-0181K, in

the court against Coupe3 to condemn 2.9 acres of Coupe’s

property. The issue of whether Condemnation 1 was for a public

use was initially resolved in favor of the County by partial

summary judgment on November 27, 2001. Id. However, the court

reversed its ruling and set the matter for trial because “there

was a genuine issue of material fact as to the purpose.” Id. at

360, 198 P.3d at 623.

3
According to Coupe I,

[t]he complaint[] w[as] initially filed against Robert Nigel
Richards, Trustee Under the Marilyn Sue Wilson Trust; Robert
Nigel Richards, Trustee Under the Joan Elizabeth Coupe
Trust; Charles William Coup; Joan Elizabeth Coupe; Miles
Hugh Wilson; Joan Coupe, Trustee under Revocable Trust of
Joan Coupe Dated March 30, 1989, and unidentified
defendants. All named defendants except Robert Nigel
Richards, Trustee Under the Marilyn Sue Wilson Trust, and
Miles Hugh Wilson answered the complaint[]. On May 23,
2007, the parties stipulated to substitute C&J Coupe Family
Limited Partnership for the foregoing named defendants who
appeared in the [] case[].

119 Hawai#i at 356 n.1, 198 P.3d at 619 n.1.

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During the pendency of the Condemnation 1 trial, on

February 5, 2003, the County passed Resolution No. 31-03,4

authorizing the County to initiate a second condemnation of 3.348

acres of Coupe’s property for the Bypass. Resolution 31-03 “did

not reference the Development Agreement” and instead stated that

“the Bypass would provide ‘a regional benefit for the public

purpose and use which will benefit the [County].’” Id. On the

basis of Resolution No. 31-03, on January 28, 2005, the County

filed Condemnation 2, Civ. No. 05-1-015K, in the court against

Coupe.5 Id.

In Condemnation 2, Coupe moved to dismiss the

condemnation on the ground of abatement, or in the alternative,

to consolidate the cases. The court denied the motion to

dismiss, but consolidated Condemnation 1 and Condemnation 2 and

tried the cases in a non-jury trial. Id. As to Condemnation 1,

the court ruled that the condemnation was invalid because the

County unlawfully delegated its sovereign power of condemnation

to Oceanside through the Development Agreement. Id. As to

Condemnation 2, the court held that (1) the case was not abated

by Condemnation 1, and (2) Condemnation 2 was supported by a

4
Resolution 31-03 “authoriz[ed] the acquisition of [Coupe’s]
private property by eminent domain . . . for the development and construction
of a bypass highway between the vicinity of Keauhou and Captain Cook, Kona,
Hawai#i.” (Capitalization omitted.)

5
Again, the parties in Condemnation 2 “stipulated to substitute C&J
Coupe Family Limited Partnership for the . . . named defendants who appeared
in the [] case[].” Coupe I, 119 Hawai#i at 356 n.1, 198 P.3d at 619 n.1.

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public purpose. Id. at 361, 198 P.3d at 624. The court issued

its Findings of Fact (FOF), Conclusions of Law (COL), and Order

on September 25, 2007, and issued a First Amended Findings of

Fact, Conclusions of Law, and Order (First Amended FOFCOL) on

September 27, 2007. The court entered its First Amended Final

Judgment against the County with respect to Condemnation 1, in

favor of the County with respect to Condemnation 2, and

determined just compensation for the condemned property to be

$162,204.83.

On October 11, 2007, Coupe filed a motion for statutory

damages pursuant to HRS § 101-27 (1993)6 [hereinafter,

6
HRS § 101-27 states in its entirety:

Whenever any proceedings instituted under this part
are abandoned or discontinued before reaching a final
judgment, or if, for any cause, the property concerned is
not finally taken for public use, a defendant who would have
been entitled to compensation or damages had the property
been finally taken, shall be entitled, in such proceedings,
to recover from the plaintiff all such damage as may have
been sustained by the defendant by reason of the bringing of
the proceedings and the possession by the plaintiff of the
property concerned if the possession has been awarded
including the defendant's costs of court, a reasonable
amount to cover attorney's fees paid by the defendant in
connection therewith, and other reasonable expenses; and the
possession of the property concerned shall be restored to
the defendant entitled thereto. Issues of fact arising in
connection with any claim for such damage shall be tried by
the court without a jury unless a trial by jury is demanded
by either party, pursuant to the rules of court, within ten
days from the date of the entry of an order or judgment
allowing the discontinuance of the proceedings, or
dismissing the proceedings or denying the right of the
plaintiff to take the property concerned for public use. In
the event judgment is entered in favor of the defendant and
against the plaintiff, any moneys which have been paid, and
any additional security which has been furnished, by the
plaintiff to the clerk of the court under sections 101-28
and 101-29, shall be applied or enforced toward the
satisfaction of the judgment. In the case of the State or a
county, if the moneys so paid to the clerk of the court are
insufficient, then the balance of such judgment shall be
(continued...)

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October 11, 2007 Motion]. In this motion, Coupe requested from

the County, attorneys’ fees and costs, plus tax and prejudgment

interest for the County’s failure to take Coupe’s property for

public use in Condemnation 1.7

On November 5, 2007, in its Reply Memorandum in Support

of its October 11, 2007 Motion, Coupe included an Errata which

amended Coupe’s damages to $1,535,375.00 in attorneys’ fees,

$134,940.17 in costs and expenses, $61,612.03 in general excise

taxes, and $276,722.41 in prejudgment interest. At the court’s

request, Coupe filed a supplemental memorandum in support on

December 6, 2007, the County and Oceanside filed their

supplemental pleadings on December 14, 2007, and Coupe filed its

supplemental Reply on December 19, 2007. The court did not rule

on or enter any order on Coupe’s October 11, 2007 Motion. Thus,

on January 15, 2008, the October 11, 2007 Motion was deemed

denied by operation of HRAP Rule 4 (2007).8

6
(...continued)
paid from any moneys available or appropriated for the
acquisition of the property concerned, or if that is
insufficient then the same shall be paid from the general
fund of the State or county, as the case may be.

(Emphases added.)

7
On October 31, 2007, the County countered, arguing that (1) “HRS
§ 101-27 d[id] not apply because . . . the property was finally taken for
public use[,]” and because Coupe was “not the prevailing party on the main
issue of ultimately preventing condemnation of the property[,]” (2) “[Coupe]
filed [its October 11, 2007 Motion] outside of the 10-day period permitted
under HRS § 101-27[,]” and (3) “[a]ssuming arguendo that [Coupe was] entitled
to an award of damages . . . any award [was] limited to reasonable attorneys’
and [sic] costs paid by [Coupe] to establish the defense of improper
delegation of condemnation power claim in the first case[.]”

8
HRAP Rule 4(a)(3) requires that any motion not disposed of by
order within ninety days is deemed denied. It states:
(continued...)

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B. Coupe I - Coupe’s First Appeal to This Court

On July 9, 2008, this court accepted transfer of

Coupe’s first appeal from the ICA to this court. Coupe I, 119

Hawai#i at 361, 198 P.3d at 624. This court held that (1) the

court did not err in concluding that “Condemnation 2 was not

abated by Condemnation 1,” id. at 372, 198 P.3d at 635,

(2) “where there is evidence that the asserted [public] purpose

is pretextual, courts should consider a landowner’s defense of

pretext[,]” id. at 357, 198 P.3d at 620, and (3) Coupe was

entitled to seek statutory damages under HRS § 101-27 “insofar as

the property in question was not taken in Condemnation 1[,]” id.

at 366, 198 P.3d at 629. As to the second holding, this court

determined that “it [was] unclear from the entirety of the

court’s findings and conclusions regarding Condemnation 2 whether

the court did in fact consider and reject [Coupe’s] pretext

argument.” Id. at 382, 198 P.3d at 645. The judgment in

Condemnation 2 was vacated, and the case was remanded for “an

express determination by the court of whether the asserted public

purpose was pretextual.” Id. at 390, 198 P.3d at 653.

8
(...continued)
(3) TIME TO APPEAL AFFECTED BY POST-JUDGMENT MOTIONS.
If any party files a timely motion for judgment as a matter
of law, to amend findings or make additional findings, for a
new trial, to reconsider, alter or amend the judgment or
order, or for attorney's fees or costs, the time for filing
the notice of appeal is extended until 30 days after entry
of an order disposing of the motion; provided, that the
failure to dispose of any motion by order entered upon the
record within 90 days after the date the motion was filed
shall constitute a denial of the motion.

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As to the third holding, this court held that (1) Coupe

was “entitled to costs and attorneys’ fees, as well as any

expenses that may have been incurred by reason of [the County]

taking possession of the property[,]” and (2) “[i]t is for the

court to determine whether the fees claimed by [Coupe] are

related to Condemnation 1 and are reasonable under relevant

standards.” Id. at 368, 198 P.3d at 631. Thus, this court also

“remanded [the case] to the court for a calculation of the

damages to which [Coupe was] entitled in defending against

Condemnation 1.” Id.

C. Coupe II - Coupe’s Request for Statutory Damages
Associated With its First Appeal

On January 20, 2009, Coupe filed with this court its

Request for Statutory Damages incurred by Coupe during its appeal

in Coupe I [hereinafter Coupe II Request]. County of Hawai#i v.

C&J Coupe Family Ltd. P’ship, 120 Hawai#i 400, 403, 208 P.3d 713,

716 (2009) [hereinafter, Coupe II]. On January 30, 2009, the

County filed its memorandum in opposition to the Coupe II

Request. Id. Oceanside joined the County’s memorandum in

opposition and also filed a separate memorandum in opposition to

the Coupe II request. Id. Pursuant to this court’s order, on

February 19, 2009, Coupe filed a Response to the County’s and

Oceanside’s objections (Coupe II Response), and on March 2, 2009,

the County filed its Reply, in which Oceanside joined. Id.

As to statutory damages, Coupe “asked for $45,383.50 in

attorneys’ fees plus $2,098.07 in general excise tax[es] on those

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fees, $5,775.59 in costs, and prejudgment interest on those fees

and costs in the amount of $1,900.35, all of which it claim[ed]

to have incurred pursuant to its appeal in Condemnation 1[,]” and

“[i]n addition to those fees and costs, [Coupe] request[ed] that

it recover for the fees and costs incurred in preparing the

[Coupe II] Request and the court-ordered [Coupe II] Response.”

Id. On March 5, 2009, Coupe filed an “Errata to Responses to

Objections re: Request for Statutory Damages (Errata) purportedly

to correct certain errors in the [Coupe II] Request and in the

[Coupe II] Response.” Id. The Errata revised the amount of the

attorneys’ fees requested to $44,696.88, which “include[d the]

amount incurred in preparing [Coupe’s Coupe II Request.]” Id.

The Errata also included an additional request for $6,424.50 in

attorneys’ fees and $259.69 in excise tax on the attorneys’ fees

for preparation of the [Coupe II] Response itself. Id. at 415,

208 P.3d at 728.

In Coupe II, this court held that (1) “HRS § 101-27

provide[d] a proper basis for fees and costs incurred on appeal

in Condemnation 1,” id. at 405, 208 P.3d at 718, (2) “this court

[was] the appropriate venue in which to request fees and cost

incurred on appeal,” id. at 406, 208 P.3d at 719, (3) the rates

claimed in the Coupe II Request appeared reasonable, id.,

(4) Coupe was entitled to $25,676.21 in fees, $1,105.67 in excise

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tax,9 and $1,206.35 in costs,10 id. at 415, 208 P.3d at 728,

(5) Coupe was not entitled to certain attorneys’ fees in the

amount of $12,220.06 because “it was not clear that [the fees]

were related in their entirety to [Coupe]’s successful appeal of

Condemnation 1[,]” id. at 415 n.12, 208 P.3d at 728 n.12,

(6) Coupe was not entitled to any prejudgment interest, id. at

411, 208 P.3d at 724, (7) Coupe was not entitled to “costs

associated with legal research[, ] messenger fees/courier fees[,]

and [] one-half of the claimed photocopying costs[,]” id. at 415,

208 P.3d at 728, and (8) Coupe was not entitled to its attorneys’

fees, excise taxes, and costs associated with preparing the Coupe

II Request and Coupe II Response, id.

D. Remand Following Coupe I

1. The Court’s May 14, 2009 Supplemental Findings of
Fact and Conclusions of Law and Order as to
Condemnation 2

On remand, the court, on May 14, 2009, issued a

Supplemental Findings of Fact, Conclusions of Law and Order to

First Amended Findings of Fact, Conclusions of Law and Order

filed September 27, 2007 as to Condemnation 2 (Supplemental

FOFCOL as to Condemnation 2). The court’s findings listed

numerous traffic studies and plans conducted by the County and

9
Coupe was awarded excise tax on its $24,570.54 award of attorneys’
fees at a rate of 4.5%. Coupe II, 120 Hawai#i at 415, 208 P.3d at 728.

10
Coupe was awarded costs for postage, long distance, fax,
transcripts, color copies, filing fees, and parking. Id.

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the State of Hawai#i, which recognized “the public need for a

roadway to bypass the Mâmalahoa Highway and that an arterial

highway in the area of the [Bypass] would relieve unacceptable

traffic congestion of the Mâmalahoa Highway.” Furthermore, the

court’s findings, in part, stated as follows:
19. The Coupes contend that Condemnation 2, like
Condemnation 1, was driven by the County’s desire to comply
with its obligations under the Development Agreement. No
evidence supporting this contention was presented at trial,
and the [c]ourt finds passage of Resolution No. 31-03
(Condemnation 2) evidences the County’s desire to get the
Bypass built for public purposes.
20. The Coupes contend that construction of the Bypass
Highway was necessary to provide access to Hokuli#a.
Oceanside already had public access to Mâmalahoa Highway
through Haleki#i Street. The Bypass Highway, which bisects
Hokuli#a and connects with other public roads at both ends
beyond the Hokuli#a property, does provide improved access
to Hokuli#a for development of a luxury subdivision, but
that does not negate the County Council’s predominant
purpose by enacting Resolution No. 31-03 to obtain the
Bypass Highway for broader public purposes, consisting of an
additional traffic corridor for those traveling through the
region (as opposed to those traveling to and from Hokuli#a).
21. A highway to bypass the Mâmalahoa Highway is a piece
of regional infrastructure for the benefit of those residing
in the Kona area and has thus been determined to serve the
public interest.
22. Notwithstanding the [c]ourt finding that Condemnation
1 was invalid because the County delegated its condemnation
power to Oceanside, the County’s predominant purpose in
entering into the Development Agreement with Oceanside as
referred in Condemnation 1 is the construction of the Bypass
for public use.

(Emphases added.) The court concluded in part that the Bypass

“was not of a predominantly private character[,]” the County’s

“public purpose [was] not ‘irrational’ with ‘only incidental or

pretextual’ public purpose benefits[,]” the “adoption of

Resolution No. 31-03 was rationally related to the need for the

Bypass[,]” and therefore the resolution “was not pretextual”:
13. The [court] concludes that the use (Bypass) was not of
a predominately private character. The Bypass is a much
needed road for the public benefit. A number of studies and
plans prepared by the County and State of Hawai#i determined

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a public need long before the County and Oceanside entered
into the Development Agreement.
14. The [court] concludes that the government’s stated
public purpose is not “irrational” with “only incidental or
pretextual” public purpose benefits. The totality of the
factual circumstances beyond the face of Resolution No. 31-
03 does not support [Coupe’s] claim of pretext.
15. Despite any ostensible private benefit to Oceanside
the actual purpose of Condemnation 2 was for a valid public
use.
16. The County Council’s adoption of Resolution No. 31-03
was rationally related to the need for the Bypass Highway
and the County Council’s asserted public purpose and
supported by the circumstances beyond the face of the
resolution was [sic] not pretextual.

(Emphases added.)

2. Coupe’s March 20, 2009 Motion for Additional
Statutory Damages Not Previously Claimed in the
October 11, 2007 Motion for Statutory Damages for
Condemnation 1

On March 20, 2009, Coupe filed a motion for statutory

damages not previously claimed pursuant to HRS § 101-27 for

Condemnation 1 [hereinafter March 20, 2009 Motion] with the

court. This March 20, 2009 Motion requested additional

attorneys’ fees and costs as HRS § 101-27 damages incurred by

Coupe from “September 1, 2007 through January 14, 2008” that were

not previously included in Coupe’s October 11, 2007 Motion, and

from “February 20, 2009 through March 20, 2009,” that were not

previously included in Coupe’s Coupe II Request to this court.

On March 30, 2009, the County filed its objections to Coupe’s

March 20, 2009 Motion and Oceanside joined. On April 6, 2009,

Coupe filed a Reply Memorandum in support of its March 20, 2009

Motion. The Reply Memorandum included an Errata, which amended

the requested amounts to $117,069.00 in attorneys’ fees,

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$5,093.81 in costs, $4,949.76 in general excise tax, and

$8,564.49 in prejudgment interest.

On May 14, 2009, the court issued an order granting

Coupe’s March 20, 2009 Motion in the amounts of $41,685.00 in

attorneys’ fees, $3,703.33 in costs, and $1,557.48 in general

excise tax. Of the $117,069.00 in attorneys’ fees requested in

the March 20, 2009 Motion, the court excluded $75,384.00 in

attorneys’ fees sought for the preparation of the billing records

and the preparation of Coupe’s fee petition. Of the $4,949.76 in

general excise tax requested in the March 20, 2009 Motion, the

court excluded $3,392.28 in excise taxes that were associated

with the $75,384.00 in attorneys’ fees. Of the $5,093.81 in

costs requested in March 20, 2009 Motion, the court excluded

$1,390.48 in costs that were associated with electronic research,

messenger/courier services, and travel and hotel costs. The

court denied all of Coupe’s request for $8,564.49 in prejudgment

interest.

In rejecting the $75,384.00 of attorneys’ fees

associated with preparing the billing records and Coupe’s fee

petition, the court ruled as follows:
WHEREFORE, there shall be no recovery for fees and
expenses incurred in litigating the propriety of the fees to
be awarded pursuant to Hawai#i Ventures, LLC v. Otaka, Inc.,
116 Hawai#i 465, 173 P.3d 1122 (Haw. 2007) (holding
receivers are not entitled to recover fees and expenses
associated with litigation involving the propriety of the
fees to be awarded to them because the law imposes on a
party the duty to pay her won [sic] fees and expenses in
vindicating her personal interests). See also [Coupe II,
120 Hawai#i at 414-15, 208 P.3d at 727-28] (denying
[Coupe’s] recovery for the costs it incurred in preparing
the Request for fees and the Response).

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WHEREFORE, $75,384.00 sought for the preparation of
billing records for [Coupe’s] fee petition and/or
preparation of the [Coupe’s] fee petitions shall be excluded
pursuant to Otaka as objected to by [the] County.

3. The Court’s May 14, 2009 Supplemental
Findings of Fact and Conclusions of Law and
Order on Coupe’s original October 11, 2007
Motion for Statutory Damages, HRS § 101-27,
in Condemnation 1

Also on May 14, 2009, with regard to the damages

requested in Coupe’s original October 11, 2007 Motion, the court

issued a Supplemental Findings of Fact and Conclusions of Law and

Order to First Amended Findings of Fact, Conclusions of Law, and

Order filed September 27, 2007 Regarding Motion of Defendant C&J

Coupe Family Limited Partnership For Statutory Damages Pursuant

to [HRS] § 101-27, filed October 11, 2007 (Supplemental FOFCOL

for Statutory Damages). Therein, the court awarded Coupe

$1,535,375.07 in attorneys’ fees, $111,112.28 in costs, and

$61,612.03 in excise taxes, but denied Coupe’s request for

$276,762.41 in prejudgment interest and $23,827.89 in costs

associated with electronic research charges and miscellaneous

fees including messenger fees, costs to obtain real estate

documentation and delivery services.

4. Supplemental Final Judgment

The court filed its Supplemental Final Judgment on

May 14, 2009. With respect to Condemnation 2, the Supplemental

Final Judgment stated that “Condemnation 2 is valid” and ordered

judgment to be entered in favor of the County and Oceanside and

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against Coupe because (1) “there was a valid public purpose in

Condemnation 2 and no pretext was found[,]” (2) “[t]he

Development Agreement did not invalidate Condemnation 2[,]”

(3) “[t]here [wa]s no trespass[,]” and (4) “[t]here [wa]s no

inverse condemnation.” Just compensation for the property in

Condemnation 2 was set at $162,204.83 and blight of summons

damages11 at 10% per annum.

With respect to Coupe’s October 11, 2007 Motion for

statutory damages for Condemnation 1, the Supplemental Final

Judgment ordered that judgment be entered against the County in

the amount of $1,586,871.52.12

11
The term “blight of summons damages” appears to be “unique to
Hawai#i and apparently stems from this court’s past observation that:

What is commonly called interest is in fact an additional
award of damages for injury caused to the owner by the
“blight of the summons” . . . so that the owner may have
that “just compensation” granted to him by the fifth
amendment to the Federal Constitution.

Hous. Fin. & Dev. Corp. v. Ferguson, 91 Hawai#i 81, 86 n.2, 979 P.2d 1107,
1112 n.2 (1999) (quoting Territory v. Honolulu Plantation Co., 34 Haw. 859,
872 (Haw. Terr. 1939)) (emphasis added)). This court has also recognized that

[o]ther states have referred to [this type of] compensation
for delay in payment in condemnation proceedings by various
other terms, including “interest,” see, e.g., State ex rel.
Dep’t of Transp. v. Barsy, 113 Nev. 712, 941 P.2d 971
(1997), “pre-judgment and post-judgment interest,” see e.g.,
Carter v. City of Oklahoma City, 862 P.2d 77 (Okl. 1993),
“detention damages,” see Walker v. Acting Director, Dep't of
Forests and Parks, 284 Md. 357, 396 A.2d 262 (1979), and
“delay compensation,” see Pa. Cons. Stat. Ann. § 1-611 (West
1997).

Id.

12
The court applied a deduction for a “courtesy discount and/or
write-downs of $58,054.41 provided on the invoices plus the court-ordered
discovery sanction amount of $63,173.45.”

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With respect to Coupe’s March 20, 2009 Motion for

additional damages not previously claimed in its October 11, 2007

Motion, the Supplemental Final Judgment ordered that judgement be

entered against the County in the amount of $46,945.81.

5. Coupe’s Motion to Alter Judgment

On May 22, 2009, Coupe filed a Motion to Alter Judgment

in Condemnation 2, requesting that the court amend its

Supplemental Final Judgment to “correct the just compensation and

blight amounts in [Condemnation 2] . . . based on an apparently

inadvertent miscalculation in the 2005 valuation of the property

sought to be taken.” On June 19, 2009, the court denied Coupe’s

Motion to Alter Judgment because “this issue was not raised on

appeal and there was no mathematical error by the [c]ourt.”

II. COUPE’S CURRENT APPEAL (SECOND APPEAL)

On June 10, 2009, Coupe filed its notice of appeal on

Condemnation 1 to the ICA, appealing the court’s May 14, 2009

Supplemental FOFCOL for Statutory Damages, the court’s May 14,

2009 Order granting Coupe’s March 20, 2009 Motion for statutory

damages, and the court’s May 14, 2009 Supplemental Final

Judgment. On July 1, 2009, Coupe filed its notice of appeal on

Condemnation 2, appealing the court’s Supplemental FOFCOL as to

Condemnation 2, the court’s June 19, 2009 order denying Coupe’s

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Motion to Alter Judgment in Civ. No. 05-1-015K, and the court’s

May 14, 2009 Supplemental Final Judgment.13

This court accepted Coupe’s motion to transfer the

Second Appeal from the ICA to this court on December 21, 2009.

Coupe’s opening brief contains two parts. First, related to the

court’s judgment on Condemnation 2, Coupe argues that

(1) “Condemnation 2 was per se pretextual under the Fifth and

Fourteenth Amendments of the U.S. Constitution, and article I,

section 20 of the Hawai#i Constitution[,]” (2) “the undisputed

evidence reveals that County’s stated purpose in Resolution 31-03

was patently and obviously pretextual,” because the actual

purposes for Condemnation 2 were “to insulate County from

liability to Oceanside [under the Development Agreement] and to

[Coupe under HRS § 101-27], and to provide an overwhelming

private benefit to Oceanside[,]” and (3) “if this court sustains

Condemnation 2, the court’s award of just compensation was

erroneous because it did not take into account the appreciation

in land values between 2000 and 2005.” Second, related to

Condemnation 1, Coupe argues that under HRS § 101-27, Coupe was

entitled to (1) attorneys’ fees and costs for preparing and

litigating the propriety of fees, which were denied in the

13
Coupe’s Notice of Appeal filed ex officio in this court on
June 10, 2009 in Civ. No. 00-1-0181K, and its Notice of Appeal filed ex
officio in this court on June 12, 2009 in Civ. No. 05-1-015K, were both filed
under Appeal No. 29887 on June 16, 2009 and June 17, 2009, respectively. On
July 1, 2009, Coupe filed another Notice of Appeal ex officio in this court in
Civ. No. 05-1-015K, which was filed under Appeal No. 29887 on July 9, 2009, as
an Amended Notice of Appeal.

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court’s May 14, 2009 Order on Coupe’s March 20, 2009 Motion, and

(2) prejudgment interest to “compensat[e] for the loss of use of

funds[,]” which the court denied in its May 14, 2009 Supplemental

FOFCOL for Statutory Damages.

III. PRETEXT ISSUE AND VALUATION OF CONDEMNATION 2 IN COUPE’S
SECOND APPEAL

A. Coupe’s Per Se Pretext Argument

Coupe’s first argument urges this court to create a per

se rule that “[c]ondemnations instituted pursuant to a contract

which delegates the power of eminent domain are invalid as a

matter of law, without inquiry into any benefits which may result

from the taking[,]” and therefore, any condemnation “instituted

before [the contract] was repudiated or invalidated” is also

“tainted[.]” Coupe maintains that a per se rule is merited to

avoid the appearance of government impropriety and bias and to

protect the public against “serial takings . . . [that] would

render judicial review futile” inasmuch as “proof of pretext

would be impossible . . . as a practical matter, because ‘[t]he

government will rarely acknowledge that it is acting for a

forbidden reason[.]’” (Quoting Coupe I, 119 Hawai#i at 379, 198

P.3d at 642 (quoting Franco v. Nat’l Capital Revitalization

Corp., 930 A.2d 160, 169 (D.C. 2007)).

It appears that the County does not address Coupe’s per

se argument. However, Oceanside argues that “a per se rule for

takings under the public use clause [(a)] has not been adopted by

the Hawai#i courts or in any other jurisdiction, [(b)] would

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infringe on the legislature’s discretion to make public use

determinations[,] and [(c)] would clash with case precedent.”14

In its reply brief to Oceanside, Coupe contends, in part, that a

“bright line rule . . . does not eliminate judicial inquiry, but

rather focuses it where it will be most productive” and that “any

inquiry into legislators’ motives would in all likelihood be

pointless” “because the government understands what it must not

say to avoid revealing the private influence[.]”

Article I, section 20 of the Hawai#i Constitution

states that “[p]rivate property shall not be taken or damaged for

public use without just compensation.” Whether a particular use

is a public use “is a judicial question of law to be decided on

the facts and circumstances of each particular case.” Ajimine,

39 Haw. at 550. This court has interpreted the “public use”

clause to authorize takings for a “public purpose[.]” Haw. Hous.

Auth. v. Lyman, 68 Haw. 55, 68, 704 P.2d 888, 896 (1985) (“Where

the exercise of the eminent domain power is rationally related to

a conceivable public purpose, a compensated taking is not

proscribed by the public use clause.” (Citing United States v.

Gettysburg Elec. Ry. Co., 160 U.S. 668, 680 (1896).)). A

challenge to “the validity of the asserted public purpose

underlying [a] condemnation presents a question of constitutional

14
Oceanside contends that “courts will not lightly disturb such a
finding [of public use] and will not overrule it unless it is manifestly
wrong,” and, thus, a per se rule would “take[] away any judicial inquiry into
the facts and circumstances of each particular case[.]” (Citing Haw. Hous.
Auth. v. Ajimine, 39 Haw. 543, 550 (Haw. Terr. 1952).)

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law, which this court reviews de novo under the right/wrong

standard.” Coupe I, 119 Hawai#i at 374, 198 P.3d at 637 (citing

State v. Cuntapay, 104 Hawai#i 109, 113, 85 P.3d 634, 638

(2004)).

As discussed above, in Coupe I, this court instructed

that the court may “look behind the government’s stated public

purpose” where the purported public purpose may be pretextual.

Id. at 375, 198 P.3d at 638. Coupe I relied on Ajimine, which

held that “‘where . . . the [l]egislature declares a particular

use to be a public use[,] the presumption is in favor of this

declaration . . . unless such use is clearly and palpably of a

private character[.]’” Id. at 381, 198 P.3d at 644 (quoting

Ajimine, 39 Haw. at 549) (emphasis, ellipsis, and brackets in

original). Coupe I indicated that “legislative bodies vested

with the power of eminent domain have broad discretion in

determining what uses will benefit the public and what land is

necessary to facilitate those uses[,]” and quoted Ajimine for the

general rule which states as follows:
[W]hen the public nature of a use for which a taking has
been authorized by law is disputed, the question as it
presents itself to the courts is whether the legislature
might reasonably have considered the use public, not whether
the use is public. This rule rests on the presumption that
a use is public if the legislature has declared it to be
such.

Id. at 393, 198 P.3d at 656 (quoting Ajimine, 39 Haw. at 549

(internal quotation marks and citations omitted)) (emphasis in

original) (boldfaced emphasis omitted). Additionally, Coupe I

stated that “legislative findings and declarations of public use”

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are accorded “great weight” and are entitled to “prima facie

acceptance of [the determination’s] correctness.” Id. at 374-75,

198 P.3d at 637-38. Thus, to overcome this prima facie

acceptance, a defendant must show that such a finding of public

use “‘is manifestly wrong.’” Id. at 375, 198 P.3d at 638

(quoting Ajimine, 39 Haw. at 550).

A contract that delegates a county’s eminent domain

powers, raises well founded concerns that a private purpose is

afoot. However, a per se rule of pretext would threaten the

established rule of deference given to the findings and

declarations of the government in these cases. Furthermore, a

bright line rule would deprive courts of the judicial function

recognized in Coupe I. Relying on this court’s prior decisions

and the majority opinion in Kelo v. City of New London, 545 U.S.

469 (2005), Coupe I posited that the decision of the legislature

is not “‘conclusive, for the issue of public use is a judicial

question and one of law to be decided on the facts and

circumstances of each particular case.’” Coupe I, 119 Hawai#i at

384, 198 P.3d at 647 (quoting Ajimine, 39 Haw. at 550) (emphasis

in original). Consequently, this court concluded that a court

may “look behind an eminent domain plaintiff’s asserted public

purpose” to determine whether a purported public purpose is

pretextual. Id.

Coupe I indicated that whether the Development

Agreement was in effect at the time of Condemnation 2 would be a

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factor in determining pretext. This court explained that “the

court’s conclusion that Condemnation 2’s public purpose was

valid,” based solely on Resolution 31-03, “may have elevated form

over substance[,]” and thus ruled that
[d]espite the lack of reference to the Development Agreement
in Resolution No. 31-03, it is not apparent from the record
whether any or all of the same provisions in the
[Development] Agreement that led the court to invalidate
Condemnation 1 were still in effect and underlay
Condemnation 2, or whether other conditions existed such
that the private character predominated. Those issues may
be factors relevant to the pretext issue.

Id. at 383, 198 P.3d at 646 (emphasis added) (footnote omitted).

Hence, “whether any or all of the [] provisions in the

[Development] Agreement . . . were still in effect” at the time

Condemnation 2 was executed or “whether other conditions

[surrounding Condemnation 2] existed” that could cause the

private character to predominate over the public purpose, were

“factors relevant to[,]” but not per se dispositive of, the

pretext issue. Accordingly, the adoption of a bright-line per se

rule would conflict with Coupe I.

As observed, Coupe argues that the adoption of a per se

pretext rule is necessary because the government “will rarely

acknowledge that it is acting for a forbidden reason.” But, this

consideration was identified as an obvious problem in Coupe I.

See id. at 379, 198 P.3d 642 (stating that “‘[t]he government

will rarely acknowledge that it is acting for a forbidden reason,

so a property owner must in some circumstances be allowed to

allege and to demonstrate that the stated public purpose for the

condemnation is pretextual’” (quoting Franco, 930 A.2d at 169

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(emphasis omitted))). This court addressed that issue by

allowing the court to look beyond government findings and

declarations in deciding whether the stated public purpose was

pretextual. Id. There may be evidence outside of the

government’s declarations and findings that would prove that the

asserted public use was “‘clearly and palpably of a private

character’” and that the government’s findings were “‘manifestly

wrong[,]’” and thus, would enable a defendant to rebut the prima

facie acceptance of a public purpose. Id. at 375, 198 P.3d at

638 (quoting Ajimine, 39 Haw. at 550).

However, the burden rests on the defendant, who must

show that the public purpose asserted in the findings or

declarations was “‘mere pretext[,]’” and the “‘actual purpose was

to bestow a private benefit.’” Id. at 379, 198 P.3d at 642

(quoting Kelo, 545 U.S. at 477-78) (emphasis omitted). Indeed,

this court cautioned that such a showing “‘may be difficult to

make[,]’” but a defendant was not foreclosed from making such a

showing. Id. (quoting Franco, 930 A.2d at 169). Given that this

court has decided this issue by allowing a defendant to present

evidence of pretext beyond the government’s findings and

declarations, the fact that a legislative body may not admit that

the purpose is for a private benefit does not alleviate the

defendant’s burden or necessitate a per se rule of pretext.

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B. Coupe’s Pretext Contentions

1. The Parties’ Arguments

Coupe’s second argument contends that the court failed

to recognize that the actual purposes of Condemnation 2 was

first, “to avoid liability for breach of the Development

Agreement,” inasmuch as “[a]t the time County was considering and

adopting Resolution 31-03, the Development Agreement . . .

appeared to be in full force and effect[,]” and “[the] County

believed it had obligated itself to comply with the Development

Agreement[.]” (Emphasis in original.) Second, Coupe asserts that

the County instituted Condemnation 2 so that, if Condemnation 1

failed, the County could “[take] the position that Condemnation 2

would insulate it from [HRS §] 101-27 damages should Condemnation

1 ultimately fail.” Third, Coupe contends that “only Oceanside

benefitted from [Condemnation 2]” because (a) “Oceanside was

obligated” to build the Bypass as a condition of rezoning

Hokulia, (b) the “County would have no means to condemn the

right-of-way from Oceanside” should Oceanside “go bankrupt or the

Development Agreement be in fact void ab initio,” and (c) “[t]he

[r]ecord contains no evidence that Resolution 31-03 was part of a

carefully considered and integrated plan to alleviate traffic

apart from the Development Agreement.”

In response, the County maintains that “there is no

evidence that the County passed Resolution 31-03 either to avoid

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liability to Oceanside or to [Coupe.]”15 Oceanside contends that

Condemnation 2 was not predominantly for Oceanside’s benefit

because “the facts and circumstances surrounding Condemnation 2

evidences the County’s independent desire to get the Bypass built

for public purposes.”16

In response to the County’s and Oceanside’s arguments,

Coupe initially contends that “[t]he only conclusions which can

be drawn from the [court’s] finding that the record contains ‘no

15
The County contends that Condemnation 2 was not for Oceanside’s
private benefit, inasmuch as (a) “[t]here [wa]s overwhelming evidence[,]”
including “several government studies that recognized the long-standing public
need for the Bypass based on traffic capacity and safety considerations[,]”
(b) the “alignment of the [Bypass] . . . was preferred and selected by the
County of Hawaii’s Department of Public Works, and [was] consistent with the
General plans that ha[d] been adopted by the County” (internal quotation marks
and citation omitted), (c) the Hokulia subdivision “already ha[d] two access
points into the subdivision[,]” (d) other portions of the Development
Agreement, “such as[] the requirement for Oceanside to secure a performance
bond to complete the Bypass and eventual dedication of the Bypass to the
County, [are] still valid” if Oceanside or its lenders were not viable at the
time of performance, (e) “the Development Agreement (and the relevant
Ordinances) clearly indicate[d] the need for the regional roadway[,]” (f) the
court “did not strike down the entire Development Agreement . . . [but]
determined that the condemnation and share fair provisions were invalid[,]”
and (g) “Resolution 31-03 specifically found a public purpose, separate from
the infirmed portions of the Development Agreement.”

16
Oceanside contends that (a) after “[t]here were concerns about the
validity of Condemnation 1[,] . . . the County Council concluded at that time
that a second condemnation was necessary to ‘get this [Bypass] road
moving’[,]” and that “they would move forward with the Bypass even if it
required that ‘the County condemn and pay for some of the property . . . in
the interest of the general public so that [the public] have an alternative
highway[,]’” (b) Coupe has failed to “provide any evidence showing either that
Oceanside would sue the County if Condemnation 1 failed and the County elected
not to initiate another condemnation action, or that the County Council
believed that [the County] was liable under the Development Agreement to
initiate another condemnation suit if Condemnation 1 failed[,]” (c) it “[was]
obligated to build and dedicate the Bypass under Ordinances 96-7 and 96-8 as a
condition of rezoning the project[,]” and these ordinances were in effect
“before the Development Agreement was executed[,]” (d) Resolution 31-03 was
part of an integrated plan, stating that “there was a long-standing need for
the Bypass and there already existed a number of studies and plans prepared by
the County and State of Hawai#i for a bypass highway long before . . . the
Development Agreement[,]” and (e) “the public hearings on Resolution 31-03
were duly noticed, that Mr. Coupe attended . . . and was given the opportunity
to fully present his position . . . , and that the County Council addressed
and rejected Mr. Coupe’s arguments of no public purpose.”

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evidence’ of pretext is that the [court] either did not look at

the undisputed evidence . . . or . . . it simply did not

understand what this [c]ourt tasked it to do on remand.”

According to Coupe, the County’s and Oceanside’s “admission that

Condemnation 2 was filed because Condemnation 1 was failing

destroys Oceanside’s and the County’s claim that Condemnation 2

was independent of Condemnation 1” because “an unrevealed side

benefit [of saving County from breach of the Development

Agreement] is sufficient to show that the County’s professed

reason for Condemnation 2 was not the actual reason, since the

side benefit was never advanced as a reason for Condemnation 2.”

Additionally, Coupe argues that the court relied on

erroneous evidence of public benefit because the review by the

Department of Public Works was a technical review that does not

diminish delegation to Oceanside, Oceanside had no access for the

Hokalia project and could not obtain its rezoning to build

Hokulia without building the Bypass, and there was no new

consideration for the Development agreement because “Oceanside

was already obligated to acquire and build the Bypass before the

Development Agreement[.]”

Furthermore, Coupe maintains that “a claim of ‘need’ is

not the comprehensive plan envisioned by the majority opinion in

[Kelo]” and that the general plan “shows two roadways which

roughly parallel the shoreline” whereas the proposed Bypass

“results in a deletion of one roadway and alters the route of the

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other, resulting in a single bypass (which strikes diagonally

across the two general plan corridors) [and] instead of

paralleling the shoreline, cuts from nearly sea level to nearly

2,000 feet.”

2. Whether the Actual Reason Behind Condemnation
2 was to Avoid Liability Under the
Development Agreement

As to Coupe’s first assertion that “[a]t the time

County was considering and adopting Resolution 31-03, the

Development Agreement . . . appeared to be in full force and

effect[,]” neither the County nor Oceanside argues to the

contrary. However, the fact that the Development Agreement

existed at the time that Condemnation 2 was instituted, as

discussed supra, does not in and of itself require a finding of

pretext. While Coupe asserts that the County’s true purpose in

proceeding with Condemnation 2 was to comply with its obligations

under the Development Agreement, the court’s Supplemental FOF 19

of its Supplemental FOFCOL as to Condemnation 2 found that “[n]o

evidence supporting this contention was presented at trial.”

Coupe challenges this finding, arguing that it “does not reflect

the undisputed evidence in the record of overwhelmingly private

benefit, and lack of public benefit from Condemnation 2.”

However, other than Coupe’s assertion, there is no support in the

record on remand that complying with the Development Agreement

predominated over the public purpose of building a traffic

corridor for the public at large traveling through the Kona area.

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Instead, the record suggests that at least some of the council

members believed that the County was not in breach of the

Development Agreement and that Condemnation 2 was necessary to

build the Bypass for the general public.

For example, the minutes of the January 7, 2003 public

hearing on Resolution 31-03, reflect that one council member

stated:
I’m going to vote against [Resolution 31-03] [], although
the need for the road is enormous, the people in Kona do
need it. What I see is that we’re being having [sic] to pay
multiple times for this road. We’ve carried out our portion
of the development agreement. I think that we don’t need to
carry out any further parts of this. The ball should be in
Hokulia or [Oceanside’s] court, and they should be taking
care of these costs. Thank you.

(Emphasis added.) Another council member asserted:
I’ll be supporting the resolution. We need to get this road
moving; and if it requires that the County condemn and pay
for some of the property in order to get this road done in
the interest of the general public so that we have an
alternative highway, because of the terrible traffic
conditions in Kona; I think that we need to do this; and
that we need to show our resolve in getting this road built.

(Emphasis added.) Further, another council member declared:
I, too, will be supporting [Resolution 31-03]. When I ran
for election, part of my promise was that I’d do everything
that I could to improve the road situation in Kona; and
believe me, when I was going door to door, that was the
biggest concern of the people. And to not do everything we
can do would be derelict, in my opinion; and particularly
for me, since this is in the heart of my district.

(Emphasis added.)

As noted before, Coupe argues that “even if saving

County from breach of the Development Agreement was only a ‘side’

benefit[,]” “an unrevealed side benefit is sufficient to show

that the County’s professed reason for Condemnation 2 was not the

actual reason[.]” However, Coupe cites no authority for this

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proposition. “[G]reat weight is accorded to legislative findings

and declarations of public use” and a heavy burden is on the

defendant to demonstrate that the use was “clearly and palpably

of a private character.” Coupe I, 119 Hawai#i at 374-75, 198 P.3d

at 637-38 (internal quotation marks and citations omitted).

Consequently, the argument that a “side benefit[,]” even if “not

advanced[,]” should automatically establish that the government’s

professed reason for condemnation is not the actual reason, is

not persuasive.

3. Whether the Actual Reason Behind Condemnation 2
was to Avoid Liability Under HRS § 101-27

Next, as stated previously, Coupe argues that

Condemnation 2 was instituted so that if Condemnation 1 failed,

the County could assert that it was not liable for damages under

HRS § 101-27 because the land would eventually be taken in

Condemnation 2. In response to this argument, Oceanside asserts

that “Coupe[] did not make this argument to the court below[.]”

Coupe, on the other hand, contends that it raised this issue

below when Coupe “urged the court to view Condemnation 2 in light

of Condemnation 1 and the Development Agreement” in its proposed

COL 21.17 Coupe’s proposed COL 21 stated:
21. Thus, in the present case, the [c]ourt must look to
the context of Condemnation 2 and the factual
situation surrounding it, which includes the
historical context of the taking, the specific series
of events leading to Resolution 2 and Condemnation 2,
and the legislative history including statements made
by County officials - not just the text of Resolution

17
On March 20, 2009, Coupe submitted to the court its proposed
findings of fact and conclusions of law in Civil No. 05-1-015K.

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2 - to determine whether Condemnation 2 is for a
public use, or whether it was pretextual as the Hawai#i
Supreme Court instructed on remand. Church of Lukumi
Bablu Aye. Inc. v. City of Hialeah, 508 U.S. 520
(1993); [Coupe I], 119 Hawai#i 352, 198 P.3d 615
(2008).

Although proposed COL 21 contends in general terms that the court

must look at the facts surrounding Condemnation 2, proposed COL

21 did not make any reference to avoiding liability under HRS

§ 101-27. Thus, Coupe did not raise the County’s avoidance of a

liability claim under HRS § 101-27 as a reason for Condemnation

2. Consequently, this court need not address this issue on

appeal. See State v. Moses, 102 Hawai#i 449, 456, 77 P.3d 940,

947 (2004) (“[I]f a party does not raise an argument at trial,

that argument will be deemed to have been waived on appeal; this

rule applies in both criminal and civil cases.”); State v.

Hoglud, 71 Haw. 147, 150, 785 P.2d 1311, 1313 (1990) (“[T]he

failure to properly raise an issue at the trial level precludes a

party from raising that issue on appeal.”) (Citation omitted.).

Even if Coupe did raise this argument below, there is

no evidence in the record to reflect that the County’s actual

purpose for Condemnation 2 was to avoid liability for attorneys’

fees and costs under HRS § 101-27. It is true that in defending

against Coupe’s October 11, 2007 Motion, the County asserted,

inter alia, that it was not liable because the property was

eventually taken in Condemnation 2. However, there is no

evidence that this was the prevailing reason for the County

Council’s approval of Condemnation 2. Thus, while Condemnation 2

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provided an incidental benefit to the County, as Coupe maintains,

it is insufficient to rebut the strong presumption in favor of

the court’s finding of public purpose in Condemnation 2.

4. Whether the Actual Reason was to “Provide an
Overwhelming Benefit to Oceanside”

a. Coupe’s argument that Oceanside could
not open Hokulia without acquiring,
completing, and conveying the Bypass to
the County

Coupe argues, as said before, that the only entity that

stood to benefit from Condemnation 2 was Oceanside because

Oceanside could not open the Hokulia project without completing

and conveying the Bypass to the County. To support this

argument, Coupe asserts that Oceanside had invested in excess of

$90 million in Hokulia, and Ordinance 94-73 required Oceanside to

build the Bypass as a condition of its zoning change.

The Supreme Court has recognized that “the government’s

pursuit of a public purpose will often benefit individual private

parties.” Kelo, 545 U.S. at 485. Where the asserted public

purpose is a road, this court has noted that “the character of

the proposed public use, i.e., a public road, is itself strong

evidence mitigating in favor of the presumption of validity” and

“[i]ndisputably, public roads have long been recognized as a

public purpose for which private property may be condemned.”

Coupe I, 119 Hawai#i at 380 n.32, 198 P.3d at 643 n.32 (citations

omitted). “But, ‘the single fact that a project is a road does

not per se make it a public road.’” Id. (quoting City of Novi v.

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Robert Adell Children’s Funded Trust, 701 N.W.2d 144, 150 (Mich.

2005) (emphasis in original)). “[W]hen considering a

condemnation action for the purpose of constructing a public

road, there is no mechanical formula for determining public use”;

instead, “[t]his issue must be decided on a case-by-case basis.”

Id. (internal quotation marks, brackets, and citations omitted).

There are many factors that courts have considered when

determining whether a road is a public use. Courts have

recognized that roads often benefit the owners of adjacent or

nearby property and are often constructed at the request of

individuals; however, such a benefit to adjoining property owners

does not render the taking invalid. See e.g., Sturgill v.

Commonwealth, Dept. of Highways, 384 S.W.2d 89, 91 (Ky. 1964)

(“Any public way naturally confers a special benefit on those

persons whose property adjoins it.”); Rogers Dev. Co. v. Town of

Tilton, 781 A.2d 1029, 1034 (N.H. 2001) (holding that “although

[the developer] will be particularly benefitted by the dedication

of the roads to public use, the taking of the landowners’

property for that use is constitutional”); cf. Territory by Sylva

v. Mendonca, 46 Haw. 83, 95, 375 P.2d 6, 13 (1962) (recognizing

that landowners in a condemnation proceeding may receive special

and direct benefit “arising from its own position upon the way

itself” in addition to general benefit.) Where the road is to be

open for public travel, courts have weighed such a factor in

favor of a public use even if the road is more convenient only to

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a few individuals. See, e.g., Road Dist. No. 4 v. Frailey, 145

N.E. 195, 197 (Ill. 1924) (stating that “the great weight of

authority in this country sustains the right of the Legislature

to authorize the taking of private property against the owner's

consent where the taking is for a public use, notwithstanding a

much greater benefit will accrue to private parties especially

interested than to the public generally”); Sturgill, 384 S.W.2d

at 91 (“The accepted test is whether the roadway is under the

control of public authorities and is open to public use, without

regard to private interest or advantage.”); City of Novi, 701

N.W.2d at 151 (upholding a public use where (a) the city

“initiated the project in response to the growing traffic

problems in the area[,]” (b) “[o]wnership, control, and

maintenance w[ould] remain with that public body[,]” and

(c) “although [a private entity]” may be the primary user of the

spur, [i]t is the right of travel by all the world, and not the

exercise of the right, which constitutes a way a public highway”

(internal quotation marks and citation omitted)); State Highway

Comm’n v. Thorton, 156 S.E.2d 248, 260 (N.C. 1967) (holding that

“[a] road does not cease to be a public road merely by reason of

the fact that one individual or corporation derives more benefits

from it than does anyone else”).

On the other hand, courts have held that a road which

is not a public highway or which is not open to the public is not

a public use. See Tolksdorf v. Griffiff, 626 N.W.2d 163, 169

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(Mich. 2001) (holding unconstitutional a state law that allowed

landlocked private landowners to build private roads on property

of others, finding that “[a]ny benefit to the public at large was

purely incidental and far too attenuated to support a

constitutional taking of private property” (citation omitted));

Thorton, 156 S.E.2d at 260 (stating that, “if, in reality, [the

road] is by its very nature and location to be used only by one

family or corporation, save for occasional incidental use by

visitors, it is not a public road and the property of another

person cannot be taken for its construction under the power of

eminent domain”);.

i.

Contrary to Coupe’s assertions, the record reflects

that Oceanside was not the only entity that stood to benefit from

the construction of the Bypass. As indicated in the court’s

findings in the Supplemental FOFCOL as to Condemnation 2, the

record reflects that “a number of studies and plans” were

undertaken by the County, prior to the development agreement,

that recognized the public’s need for a Bypass. In particular,

on remand, the following Supplemental FOFs in Supplemental FOFCOL

as to Condemnation 2 state in relevant part:
3. A 1979 State Department of Transportation study stated
that a highway to bypass the Mâmalahoa Highway would be
beneficial because the Mâmalahoa Highway did not conform to
the desired level of service criteria due to the inadequate
physical elements of the existing highway, high accident
rates, anticipated higher traffic volume and congestion, and
the need for a route continuously around the island.
4. The Department of Planning Kona Regional Plan (1982) stated
that “traffic counts [on Mâmalahoa Highway] show the traffic to be
equal to or exceeding the roadway design capacity which is an

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undesirable traffic condition . . . [resulting in] heavy burden on
the roadway network, increasing both travel time and
inconvenience.” A community survey conducted in connection with
the report indicated that the deteriorating traffic condition was
viewed as a major problem by a third of the sample group.
5. The 1989 Hawai#i County Council General Plan (Ordinance 89-142)
adopted the 1979 State Bypass highway and Ali#i Highway. The
General Plan’s South Kona transportation course of action
identified as desirable the construction of a roadway from Keauhou
to Nâpô#ôpo#o.
6. A November 1995 traffic study stated that the Bypass
Highway “will result in a beneficial reduction of traffic
volumes on Mâmalahoa Highway.”
7. A June 1997 traffic study concluded that: “The
fundamental public enhancement provided by the proposed
project [Bypass] will be its contribution to helping relieve
the congested regional transportation system.” The traffic
study again confirmed that there was a limited ability to
improve the Mâmalahoa Highway between the areas of Honalo
and Captain Cook because of the limits to the existing
highway right of way, the existing business and structures
that presently exist on the right away and the number of
other topographical constraints.
8. A 1998 study prepared for the Department of
Transportation recognized the need, based on traffic safety
considerations, for the Bypass Highway.
. . . .
15. Community and public meetings, including those held
before the Planning Commission, the Planning Committee and
the County Council, have shown support for the Bypass
Highway.
16. A highway to bypass the Mâmalahoa Highway has thus been
determined to serve the public interest and no credible
evidence was presented that indicate that the County Council
intended that Oceanside, as opposed to the public, would
predominantly benefit from Resolution No. 31-03.

(Brackets in original.) Coupe did not challenge any of the above

findings on appeal, and therefore, these findings are binding on

this court. See Bremer v. Weeks, 104 Hawai#i 43, 63, 85 P.3d 150,

170 (2004) (“This court has held that findings of fact . . . that

are not challenged on appeal are binding on the appellate

court.”) (Internal quotation marks and citation omitted.).

Hence, these studies and plans support a conclusion that the

Bypass satisfied a broad public use of alleviating traffic

congestion in the area, rather than to simply confer a wholly

private benefit to Oceanside.

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Furthermore, the instant case does not present the

situation where “[the Bypass] is by its very nature and location

to be used only by [Oceanside], save for occasional incidental

use by visitors[.]” Thorton, 156 S.E.2d at 260. While the

condemned property is to be initially transferred to Oceanside,

the Development Agreement required that Oceanside dedicate the

Bypass to the County upon its completion and that the County

would “assume all responsibility and costs for operation,

maintenance, repair, or reconstruction of the [Bypass].” In the

instant case, the County would ultimately be given ownership,

control and maintenance of the Bypass, and Oceanside would have

no ability to control the use of, or access to, the Bypass.

Coupe admits that “over 1,250 acres of Oceanside’s

project did touch a public road” and the existing road system was

“at 80% capacity, and traffic improvements along Mâmalahoa

Highway would significantly increase traffic flow through the

area.” Moreover, the court’s Supplemental FOF 20 in the court’s

FOFCOL as to Condemnation 2, stated that “Oceanside already had

public access to the Mâmalahoa Highway through Haleki#i Street”

and “[t]he Bypass . . . , which bisects Hokulia and connects with

other public roads at both ends beyond the Hokulia property[.]”

(Emphasis added.) Supplemental FOF 20 acknowledged that the

Bypass “does provide improved access to Hokulia for development

of a luxury subdivision[.]” It stated further, however, that

“that does not negate the County Council’s predominant purpose by

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enacting Resolution 31-03 to obtain the Bypass Highway for [a]

broader public purpose, consisting of an additional traffic

corridor for those traveling through the region (as opposed to

those traveling to and from Hokulia).” (Emphasis in original.)

Coupe challenges the court’s Supplemental FOF 20,

arguing that Oceanside’s “requested rezoning could not be

accommodated by the existing road system,” and, thus,

“Oceanside’s needs predominated over public needs, because it was

Oceanside’s need for a rezoning that would add hundreds of

residential units to the system that required the construction of

the [B]ypass so Oceanside would have sufficient access without

burdening the existing traffic net.” Nevertheless, that the

Bypass allows Oceanside to develop its property does not detract

or destroy the public character of the Bypass or render the

condemnation invalid.

ii.

Next, according to Coupe, the change in the northern

terminus of the Bypass from Kuakini Highway to Ali#i Highway was

to benefit Oceanside. The court clearly rejected this argument,

stating in FOF 18 of its Supplemental FOFCOL as to Condemnation

2, that “the alignment of the [Bypass], with a northern terminus

at Ali#i Highway rather than at Kuakini Highway, was

[(1)] preferred and selected by the [C]ounty, and [(2)] is

consistent with the General Plans that have been adopted by the

County.” Coupe challenges FOF 17 and 18, that the Bypass was in

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conformity with the General Plan, arguing that the finding is

“plain error” and “reflects that the [] court made no effort to

look below the surface of Oceanside’s and [the] County’s

representations.”

However, contrary to Coupe’s assertions, there is

substantial evidence in the record to support the court’s

findings. For example, in the testimony of Donna Kiyosaki,

director and chief engineer of the County of Hawai#i Department of

Public Works from 1993 to 1998, Kiyosaki explained the County’s

reasons for moving the northern terminus from the intersection of

Kuakini and Mâmalahoa highway to the Ali#i Highway were as

follows:
As we started reviewing available information for this
bypass road and looking at options that were available,
alternatives that were available, we soon realized that
there were a lot of issues with the Kuakini intersection,
including some difficult engineering design, that would have
to be accomplished in order to make that intersection work
as well as the need to go through an area that would require
the taking of private properties in terms of actual smaller
lots in residential areas and would exact people in the
area.
At the same time we were pushing to get Ali#i Highway
Bypass Road designed and completed. When we looked at all
the concerns combined, we felt continuation of the Ali#i
Highway . . . would provide that type of regional bypass
road that would make sense for the Kona area.

(Emphases added.) Kiyosaki elaborated on the safety and

engineering design difficulties with the Kuakini intersection,

stating that:
Kuakini being an existing road was already seeing a host of
issues regarding safety, because it had a lot of direct
access from properties onto the road. So it was not what
you would call a limited access type of road. There were a
lot of stops along the road, a lot of direct driveways on
the road. And especially near that intersection point, the
grade was very steep, and it was not a place that it would
have been easy to make a connection to.

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Any connection you made to that would cause, I
believe, congestion and problems along Kuakini in the
condition that it was currently in. And making improvements
to Kuakini would have been very difficult.

(Emphases added.) She also testified that a letter from the

County of Hawaii Department of Public Works was sent to the

project manager of Oceanside on January 4, 1995, which related

that the alternative location of the Bypass, with the northern

terminus at Ali#i Highway, “provide[d] the best overall

circulation system for this region of Kona in accordance with the

General Plan Facilities Map.”

William Moore was “retained by Oceanside to assist in

the completion of the [Bypass Highway]” and “did the initial

contacts with all the landowners” along the Bypass. He testified

that (1) his work on the Bypass process resulted from “the

approval of the alignment by the Department of Public Works in

[a] January 1995 letter[,]” (2) “[it was] the Department of

Public Works that ma[de the] determination on the alignment,” and

(3) “it was [his] understanding that the determination was made

in that January ‘95 letter[.]”

In light of Kiyosaki’s testimony, the January 4, 1995

letter, and Moore’s testimony, there is substantial evidence in

the record to support the court’s supplemental FOF 20 in the

court’s Supplemental FOFCOL as to Condemnation 2. In re Water

Use Applications, 94 Hawai#i 97, 119, 9 P.3d 409, 431 (2000)

(recognizing that substantial evidence is “credible evidence

which is of sufficient quality and probative value to enable a

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person of reasonable caution to support a conclusion” (quoting

Leslie v. Estate of Tavares, 91 Hawai#i 394, 399, 984 P.2d 1220,

1225 (1999))). Thus, Supplemental FOF 20 is not clearly

erroneous. See id. (A finding of fact “is clearly erroneous when

(1) the record lacks substantial evidence to support the finding

or determination, or (2) despite substantial evidence to support

the finding or determination, the appellate court is left with

the definite and firm conviction that a mistake has been made.”).

b. Coupe’s argument that the County had no assurance
that Oceanside or its lenders would be viable at
the time of performance

Coupe contends that the County receives no benefit from

Condemnation 2 because should “Oceanside go bankrupt or the

Development Agreement be in fact void ab initio, County would

have no means to condemn the right-of-way from Oceanside.” Coupe

asserts that in the hypothetical situation in which Oceanside or

its lenders declare bankruptcy while the Bypass was being

constructed, “[t]he Development Agreement being an executive

contract, could be voided . . . , leaving County with an

unsecured damage claim” and the bankrupt estate could then sell

the “partially built right-of-way” to the highest bidder. Coupe

also argues that if the Development Agreement was illegal, then

Oceanside would have no obligation to build the Bypass.

As discussed above, there is a presumption that the

declared public purpose in Resolution 31-03 is valid, and Coupe

bears the heavy burden of proving that the finding of public

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purpose is manifestly wrong. See Coupe I, 119 Hawai#i at 375, 198

P.3d at 638. The fact that Coupe can posit a hypothetical

situation in which the Bypass may not be built, does not

establish that Condemnation 2 was clearly and palpably of a

private nature and provided no benefit to the public. Whether

there are contingencies in the future that might prevent

Oceanside from building the Bypass is not dispositive in the

inquiry of whether the actual reason for the taking was for a

public purpose. Thus, Coupe’s argument that Condemnation 2 was a

“sham” because the County had no assurance that Oceanside or its

lenders would be viable at the time of performance, is

unavailing.

c. Coupe’s argument that there is no evidence
that Resolution 32-03 was part of a carefully
considered and integrated plan to alleviate
traffic

As discussed supra, the court’s findings in the

Supplemental FOFCOL as to Condemnation 2 reflects that “a number

of studies and plans” were undertaken by the County prior to the

Development Agreement. For example, in 1979, the State of Hawai#i

Department of Transportation (DOT) conducted a preliminary

engineering report “to perform the preliminary planning

activities necessary to define a highway corridor through North

and South Kona . . . , thereby enabling the State to design a

safe and efficient highway through that area.” According to the

1979 Report, the planning for another highway through the area

was needed because of (1) “[t]he inadequate physical elements of

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the existing [Mâmalahoa H]ighway[,]” (2) “[h]igh accident rates”

on the Mâmalahoa Highway, (3) “[a]nticipated higher traffic

volume and congestion[,]” (4) the “improvement of a route

continuously around the island[,]” and (5) the “County land use

policy[.]”

The 1982 Kona Regional Plan also indicated the need for

improvements to the existing roadway infrastructure. In

particular, the 1982 Kona Regional Plan stated, in part, that:
The traffic counts at all recording stations show large
growth in recent years. Available data indicates that this
growth has nearly doubled the traffic volume from Captain
Cook to Keauhou . . . . The rapid growth has placed heavy
burdens on the roadway network, increasing both travel time
and inconvenience. The community survey indicates that the
deteriorating traffic situation is viewed as a major problem
by 33% of the persons polled.

(Emphasis added.)

A DOT Hawai#i Long Range Land Transportation Plan, dated

May 1998, also included a new two-lane highway including

intersection improvements from “Alii Highway terminus to [the]

Mâmalahoa [Highway]/Napoopoo Road intersection,”18 and then

“widen[ing] [the] (proposed) two-lane highway to four lanes[.]”

In sum, these traffic studies and general plans

presented at trial recognized (1) that there would be a projected

increase in the volume of traffic between Keauhou and Captain

Cook, (2) that the projected volume of traffic would exceed the

capacity of the existing Mâmalahoa Highway, and (3) that a Bypass

highway would result in a reduction of the traffic congestion on

18
The intersection of Mâmalahoa Highway and Nâpô#ôpo#o Road is
located in Captain Cook, Hawai#i.

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Mâmalahoa Highway. None of these FOFs were challenged on appeal.

Thus, the Kona Regional Plan, the Hawai#i Council General Plan,

and other traffic studies conducted by the County and the State

indicate that a proposed Bypass was contemplated even prior to

the Development Agreement.

i.

(a)

Instead, on appeal, Coupe challenges FOF 15 in the

court’s First Amended FOFCOL and Supplemental FOF 17 in the

court’s Supplemental FOFCOL as to Condemnation 2. FOF 15 states:
15. County Ordinance Number 96-8 amended 94-73 to include a
shift in the alignment of the bypass highway from Kuakini
Highway to the “appropriate vicinity of Keauhou.”

(Citation omitted.)

Ordinance 96-8 declared that it is “an ordinance

amending section 25-87 (North Kona Zone Map) and Section 25-88

(South Kona Zone Map), Article 3, Chapter 25 (Zoning Code) of the

Hawai#i County Code, and Ordinance No. 94-73, which classified

certain lands from agricultural (A-5a) and unplanned (U) to

Agricultural (A-1a)[.]” (Formatting altered.) (Emphasis added.)

As indicated in Ordinance 96-8, prior to its adoption, Section 3

of Ordinance 25-87 provided that the district classification was

conditioned upon numerous conditions, one of which was

construction of the Bypass. Among other amendments made,

Ordinance 96-8 amended Ordinance 25-87 Section 3 (L)(2) and

Section (L)(3), by removing all references to an Exhibit “C”

which established the bypass location and amending the text to

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allow for the alignment of the Bypass “between the approximate

vicinity of Keauhou and Captain Cook[.]” Ordinance 96-8 also

deleted section (L)(4) which specifically designated that the

north end of the Bypass would intersect with Kuakini Highway.

Accordingly, Ordinance 96-8 amended Ordinance 25-87 to read in

part as follows (with deletions in brackets and the new, amended

language underscored):
(L) Roadway improvements and access(es) to the subject
property, including all plans and construction, shall meet
with the approval of the Department of Public Works. Prior
to the issuance of Final Subdivision Approval for any
portion of the subject property, the applicant shall:
. . . .
(2) determine the final right-of-way alignment of
the entire Mâmalahoa Highway Bypass [road as
shown in Exhibit “C”,] [sic] between the
approximate vicinity of Keauhou and Captain
Cook, including its intersection areas and its
acquired ownership or control. . . .
(3) construct [Phase One of] the Mâmalahoa Highway
Bypass [as shown in Exhibit “C”,] [sic] in its
entirety between the approximate vicinity of
Keauhou and Captain Cook, consisting of two
lanes with sufficient right-of-way for a total
of four lanes, provided further that the section
of the Mâmalahoa Highway Bypass between Keauhou
and Halekii Street shall be completed and
available for public use prior to the occupancy
of any dwelling unit within the entire project
area;
[(4) construct the channelization improvements
on Kuakini Highway at its intersection
with the north end of the Mâmalahoa
Bypass;]

In light of the foregoing amendments, the court’s FOF 15 that

“Ordinance Number 96-8 amended 94-73 to include a shift in the

alignment of the bypass highway from Kuakini Highway to the

‘appropriate vicinity of Keauhou’” was not clearly erroneous.

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(b)

Supplemental FOF 17 states:
17. The [c]ourt finds that the alignment of the Bypass
Highway from Keauhou to Captain Cook that was identified in
Ordinances 96-7 and 96-8 . . . is consistent with the 1989
General Plan.

Both Ordinances 96-719 and 96-8 required as a condition of the

change in district classification, that the applicant determine

the final right of away alignment of and construct the Bypass

“between the approximate vicinity of Keauhou and Captain Cook[.]”

A review of the 1998 General Plan Facilities Map indicates that

the 1998 General Plan anticipated the proposed arterial highway

from Keauhou to Captain Cook. A bypass “between the approximate

vicinity of Keauhou and Captain Cook,” as described in Ordinances

96-7 and 96-8, is consistent with the anticipated bypass

designated in the 1998 General Plan Facilities Map. Accordingly,

there is substantial evidence to support the court’s finding,

and, thus, Supplemental FOF 17 is not clearly erroneous. In re

Water Use Applications, 94 Hawai#i at 119, 9 P.3d at 431.

ii.

In sum, the court’s findings support the conclusion

that (1) numerous plans and studies conducted prior to the

Development Agreement recognized the need and anticipated the

19
Ordinance 96-7 Section 3 amended, among others, Section 25-88,
Article 3, Chapter 25 (Zoning Code) of the Hawai#i County Code to reflect the
change in district classification of the target property. Similar to
Ordinance 96-8, discussed in relevant part above, Ordinance 96-7 also
contained, among other conditions, a requirement for “[r]oadway improvements
and access(es) to the subject property” identical to Ordinance 96-8 Section 3
(L), including the identical “between the approximate vicinity of Keauhou and
Captain Cook” language.

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construction of a Bypass between Keauhou and Captain Cook and

(2) Ordinances 96-7 and 96-8 were consistent with the County of

Hawaii’s 1998 General Plan. Hence, Coupe’s assertion that

Condemnation 2 was not part of a general integrated plan is

incorrect.20

C. Coupe’s Challenge to the Valuation of the Property in
Condemnation 2

As to Coupe’s third argument, Coupe posits that the

valuation of the property taken in Condemnation 2 did not account

for the increase in appreciation during the time between

Condemnation 1 and Condemnation 2. According to Coupe, the court

erred in concluding that the County’s appraiser “determined that

the value of the land did not appreciate between Condemnation 1

and Condemnation 2” when in fact “the appraiser testified that

the land appreciated by 239% in that time.” Thus, Coupe

maintains that the property should be valued at $387,669.54

rather than $162,204.83.

In response, the County asserts, first, that “Coupe’s

contention is untimely because it reargued the issue of just

compensation after the trial on this issue was completed and it

was not one of the issues remanded back to the [court.]” Second,

20
Because the Bypass is consistent with the 1998 General Plan,
Coupe’s argument that there is “no evidence that Resolution 31-03 was part of
a carefully considered and integrated plan” is incorrect. Thus, this court
need not address Coupe’s arguments that the Development Agreement could not
serve as a comprehensive plan because (1) it was a “private development
agreement” which was “merely a contract between a developer and the local
government in which the government agrees to not apply future land use
regulations against the property for a period of time,” and (2) the
Development Agreement was illegal and void.

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the County argues that the just compensation amount for the

property was “appropriate” because “[t]here is nothing improper

of [sic] this [c]ourt finally deciding on a value of $140,500

(which is between the ranges testified to by [experts] Medusky

and Bloom [at trial]).”

In reply to the County, Coupe argues that valuation of

the property was “sufficiently preserved . . . by raising as

error the pretextual nature of the taking in Condemnation 2”

because Coupe “prevailed on the pretext issue in Coupe I, and

jurisdiction was once again vested in the trial court for further

consideration”; even if the valuation issue was not raised in the

prior appeal, this court “vacated the trial court’s entire

previous judgment in Condemnation 2” and “[a]s a result, . . .

the parties were returned to their respective prejudgment

positions”; “all that was required of [Coupe] was that [it]

preserve the issue by objecting below, which [it] did”; and this

court may “sua sponte notice and consider points of plain error

where substantial rights may be affected, even if not properly

raised on appeal or preserved below.”

1. Whether the Valuation Issue was Untimely

The record is clear that the court determined just

compensation for the property in Condemnation 2 prior to the

first appeal to this court in Coupe I. The court’s First Amended

FOFCOL and Order included the following relevant findings:
121. The [c]ourt finds that the fair market value of the
Property in [Condemnation 1] is $140,500.
122. For [Condemnation 1], based on the fair market value

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of the land sought to be taken, the blight damage
percentage is set at 10% per annum, and damages
computed from October 9, 2000 to January 28, 2005.
The [c]ourt finds that four years, three months, and
nineteen days have elapsed between the two dates.
With the percentage set at 10% per annum, and with the
fair market value of the Property in [Condemnation 1]
at $140,500, blight damages are $60,443.87.
123. The [c]ourt finds that the fair market value of the
Property in [Condemnation 2] is $162,204.83.
124. For [Condemnation 2], based on the fair market value
of the land sought to be taken, the blight damage
percentage is set at 10% per annum, and computed from
January 28, 2005 until date paid.
. . . .
126. Just compensation for [Condemnation 2] shall be as
follows: $162,204.83 (fair market value) plus 10%
(blight damages) per annum until paid.

(Emphases added.) On September 27, 2007, the court entered its

First Amended Final Judgment, stating in part, “Just compensation

for the condemnation of the [p]roperty in [Condemnation 2] is

$162,204.83. Additionally, [b]light of [s]ummons damage from

January 28, 2005 to the time of payment shall be 10% per annum.”

On February 8, 2008, Coupe filed its first notice of appeal, and

on July 9, 2008, this court accepted transfer from the ICA in

Coupe I. Coupe had the opportunity to challenge the evidentiary

valuation of the property in its first appeal to this court, but

did not do so. Therefore, Coupe’s just compensation challenge is

untimely.

2. Whether Coupe Preserved the Valuation Issue by
Challenging the Pretextual Nature of
Condemnation 2

Coupe argues that it preserved the valuation issue when

it raised the pretext defense in Coupe I. However, a pretext

defense is distinct from a just compensation challenge. A

challenge to just compensation assumes a valid taking but

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challenges the valuation amount for the property.21 On the other

hand, the pretext defense asserts that a private person's

constitutional right was violated because his or her property was

not taken for a public purpose, but as pretext for a primarily

private benefit. Coupe I, 119 Hawai#i at 384, 198 P.3d at 647

(recognizing that a “[c]ity would no doubt be forbidden . . . to

take property under the mere pretext of a public purpose, when

its actual purpose was to bestow a private benefit” (citing Kelo,

545 U.S. at 477-78)) (citations omitted). A taking for a private

benefit violates the “public use” requirement under the Fifth

Amendment to the U.S. Constitution and article I, section 20 of

the Hawai#i Constitution, irrespective of whether just

compensation was paid for the property. See Kelo, 545 U.S. at

477 (“[I]t has long been accepted that the sovereign may not take

the property of A for the sole purpose of transferring it to

another private party B, even though A is paid just

compensation.”). Hence, a determination that an alleged public

21
See Hawaii Hous. Auth. v. Midkiff, 69 Haw. 247, 249, 739 P.2d 248,
249 (1987) (stating that, under “equitable principles[,]” “a proper measure by
which to ascertain the additional amount necessary to put the defendant in as
good [a] position pecuniarily as he would have been had his property not been
taken” would “require[] the payment of just compensation contemporaneously
with the taking, and interest at a reasonable rate on . . . the value of the
property from that date until paid” (citing Honolulu v. Lord, 36 Haw. 348, 354
(Haw. Terr. 1943)) (emphases added); City & County of Honolulu v. Market
Place, Ltd., 55 Haw. 226, 247, 517 P.2d 7, 22 (1973) (“A major goal of the
valuation process in eminent domain proceedings is to determine market
conditions for the taken property as though no condemnation had ever been
contemplated.” (Citing State v. Heirs of Kapahi, 48 Haw. 101, 113, 395 P.2d
932, 939 (1964); Territory v. Am. Sec. Bank, 43 Haw. 167 (1959).)) (Emphasis
added.). In a just compensation challenge, a landowner argues that his or her
constitutional right was violated because the compensation he or she received
was not fair or adequate. See State by Atty. Gen. v. Midkiff, 55 Haw. 190,
195, 516 P.2d 1250, 1254 (1973) (recognizing that “the test of fairness . . .
is fundamental to a determination of just compensation”).

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purpose was a pretext will constitute an unlawful taking, even

though the landowner is justly compensated for the property.

Inasmuch as the issue of just compensation is not relevant to the

determination of a pretext defense, Coupe's pretext defense did

not “preserve[]” Coupe's just compensation challenge of the

property in Condemnation 2.

3. Whether this Court’s Remand in Coupe I Allows
Coupe to Challenge the Valuation of the Property
Taken in Condemnation 2

Additionally, Coupe argues that it could challenge the

just compensation amount because Coupe I returned the parties to

their “respective prejudgment positions.” This argument is also

unavailing. In Coupe I, this court remanded both condemnation

proceedings for the court to make two determinations: (1) “a

decision on [Coupe’s] motion for statutory damages,” Coupe I, 119

Hawai#i at 389, 198 P.3d at 652, and (2) a decision on “whether

the asserted public purpose was pretextual[,]” id. at 390, 198

P.3d at 653. As discussed above, a pretextual defense does not

implicate a just condemnation challenge. Similarly, the motion

for statutory damages under HRS § 101-27 in this case does not

implicate the valuation of the property. Thus, this court did

not remand on any issue concerning just compensation. The just

compensation value of the property taken in Condemnation 2, then,

was not open to litigation on remand. See Standard Mgmt. Inc. v.

Kekona, 99 Hawai#i 125, 137, 53 P.3d 264, 276 (App. 2001)

(“[R]emand for a specific act does not reopen the entire case;

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the lower tribunal only has the authority to carry out the

appellate court’s mandate.”) (Citation omitted.)

4. Whether this Court Can Notice Plain Error

Finally, Coupe contends that this court should sua

sponte address the just compensation issue based on plain error.

The three factors necessary for this court to take plain error

review in a civil case are “[(1)] whether the consideration of

the issue requires additional facts, [(2)] whether the resolution

of the question will affect the integrity of the findings of fact

of the trial court[,] and [(3)] whether the question is of great

public import.” Fujioka v. Kam, 55 Haw. 7, 9, 514 P.2d 568, 570

(1973) (citations omitted).22 In the instant case, Coupe’s

challenge to just compensation does not meet the third factor.

Whether the court correctly valued the property in Condemnation 2

is not of general public importance. The just compensation value

of the property applies exclusively to the specific parcel of

Coupe’s property being taken in Condemnation 2 and, thus, is

solely a matter of private interest. Inasmuch as the third

factor is not present here, plain error cannot be noticed.

IV. ATTORNEYS’ FEES AND COSTS AND PREJUDGMENT INTEREST ISSUES
ASSOCIATED WITH CONDEMNATION 1 IN COUPE’S SECOND APPEAL

With respect to Coupe’s attorneys’ fees and cost

arguments, Coupe argues that the court erred when it concluded,

22
This court has also recently confirmed this test in Alvarez Family
Trust v. Ass’n of Apartment Owners of Kaanapali Alii, 121 Hawai#i 474, 490,
221 P.3d 452, 468 (2009); see also id. at 502, 221 P.3d at 480 (Acoba J.,
dissenting, joined by Duffy, J.).

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as a matter of law, that (1) “the Coupes were not entitled to

recover damages under [HRS §] 101-27 for their efforts to obtain

. . . attorneys’ fees for preparing the damages motions and

litigating the same[,]” and (2) the Coupes were not entitled to

prejudgment interest, that is, “the damages [Coupe] incurred in

not having the free use of [its] money for the nine years in

which the defense of Condemnation 1 tied up [its] funds.”

A. The Denial of Attorneys’ Fees Associated With the
Preparation of Billing Records and/or Preparation of
Coupe’s Fee Petitions

As discussed supra, Coupe’s March 20, 2009 Motion

requested additional damages that were not included in its

initial October 11, 2007 Motion. On May 14, 2009, the court

issued an Order granting Coupe’s March 20, 2009 Motion but

excluded $75,384.00 in attorneys’ fees, which were associated

with “the preparation of billing records for [Coupe’s] fee

petition and/or preparation of [Coupe’s] fee petitions[.]” Coupe

challenges the court’s denial of these attorneys’ fees.

According to Coupe, the court’s determination is contrary to the

holding in Coupe I which awarded Coupe damages “including

attorneys [sic] fees and costs which were incurred in applying

for the damage award[.]” Also, Coupe challenges the court’s

reliance on Hawai#i Ventures, arguing that it “[wa]s not an

eminent domain case, and did not involve [HRS §] 101-27, and thus

has nothing to say about whether [it] . . . is entitled to

recover all the attorneys [sic] fees and costs it incurred[.]”

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In its answering brief, the County maintains that

“[g]enerally, there shall be no recovery for fees and expenses

incurred in litigating the propriety of the fees to be awarded

pursuant to [Hawai#i Ventures].” In its reply brief, Coupe

essentially reiterates the arguments made in its opening brief.

1. Coupe’s Argument that This Court has Awarded Such
Fees and Costs under HRS § 101-27

“The trial court’s grant or denial of attorneys’ fees

and costs is reviewed under the abuse of discretion standard.”

Kamaka v. Goodsill Anderson Quinn & Stifel, 117 Hawai#i 92, 105,

176 P.3d 91, 104 (2008) (quoting Kahala Royal Corp. v. Goodsill

Anderson Quinn & Stifel, 113 Hawai#i 251, 266, 151 P.3d 732, 747

(2007) (citation omitted)) (brackets omitted). Generally, under

the “American Rule,” “each party is responsible for paying his or

her own litigation expenses[,]” however, “attorney’s fees are

chargeable against the opposing party when so authorized by

statute, rule of court, agreement, stipulation, or precedent.”

Sierra Club v. Dep’t of Transp. of State of Hawai#i, 120 Hawai#i

181, 218, 202 P.3d 1226, 1263 (2009) (quoting Fought & Co. v.

Steel Eng’g & Erection, Inc., 87 Hawai#i 37, 50-51, 951 P.2d 487,

500-01 (1998)) (internal quotation marks and brackets omitted).

In Coupe II, this court was presented with the

threshold question of “whether ‘all such damage’ under HRS

§ 101-27 provide[d] adequate authority for [Coupe’s] request for

attorneys’ fees and costs on appeal and, if so, to what extent.”

120 Hawai#i at 404, 208 P.3d at 717. This court stated that,

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“[b]y its plain language, HRS § 101-27 appears to provide a

sufficient basis for the award of damages in the form of costs

and attorney's fees sustained as a result of [Coupe’s] appeal of

the automatic denial of fees in Condemnation 1.” Id. at 404-05,

208 P.3d at 717-18. Further, it was concluded that HRS § 101-27

encompassed damages sustained “in seeking fees and costs owed”:
The statutory language “all such damage . . . sustained
. . . by reason of the bringing of the proceedings,” on its
face would appear to encompass what [Coupe] seeks
herein. . . . Had the County not brought the unsuccessful
proceedings in Condemnation 1, [Coupe] would never have had
cause to move for fees and to subsequently appeal.
Therefore, the “damage” sustained by [Coupe] in seeking the
fees and costs owed and in appealing the denial of such fees
and costs, was part of the damage resulting from the County
having brought the unsuccessful proceedings in Condemnation
1. Consequently, under HRS § 101-27, the County should be
held liable for “such damage.”

Id. at 405, 208 P.3d at 718 (emphasis added) (brackets and

footnote omitted) (some ellipsis in original and some added).

Similar to the reasoning in Coupe II, had the County

not brought the unsuccessful proceeding in Condemnation 1, Coupe

would not have had cause to move for fees or to litigate the

amount of fees on remand. Thus, the expenses Coupe sustained in

seeking those fees and costs resulted from the County having

brought the unsuccessful proceeding in Condemnation 1.

Consequently, the County is liable for these damages under HRS

§ 101-27.

This court’s discussion of whether Coupe was entitled

to attorneys’ fees and costs for its Coupe II Request and Coupe

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II Response further supports this position.23 As discussed in

Coupe II, Coupe did not request “the damages it incurred in

filing or preparing the [Coupe II] Request and [the Coupe II]

Response” in its Coupe II Request but waited until its Coupe II

Response to do so. Coupe II, 120 Hawai#i at 414, 208 P.3d at 727

(brackets omitted). While Coupe’s request was ultimately denied,

it was not because this court concluded that there was no

recovery for fees and expenses incurred in litigating the

propriety of the attorneys’ fees and costs claimed. Rather, this

court stated that Coupe “did not expressly request attorneys’

fees for preparing the [Coupe II] Request in its original

Request, nor did it provide supporting documentation”; “upon

filing the [Coupe II] Response and requesting fees for preparing

that Response, [Coupe] again did not provide any supporting

documentation as required by HRAP Rule 39(d)(1)”;24 and although

23
As stated in Coupe II, Coupe filed its Coupe II Request for
Statutory Damages on January 20, 2009, and the County filed a memorandum in
opposition to this request on January 30, 2009. 120 Hawai#i at 403, 208 P.3d
at 716. Pursuant to this court’s order, on February 19, 2009, Coupe filed its
Coupe II Response to the County’s memorandum, and thereafter, on March 2,
2009, the County filed its reply. Id. On March 5, 2009, Coupe filed an
Errata “to correct certain errors in the [Coupe II] [R]equest and [Coupe II]
[R]esponse[.]” Id.

24
HRAP Rule 39(d)(1) states:

(d) Request for Fees and Costs; Objections.
(1) A party who desires an award of attorney's fees
and costs shall request them by submitting an itemized and
verified bill of fees and costs, together with a statement
of authority for each category of items and, where
appropriate, copies of invoices, bills, vouchers, and
receipts. Requests for indigent fees and necessary expenses
shall be submitted in a form that substantially complies
with Form 7 in the Appendix of Forms and shall be
accompanied by a copy of the order appointing counsel.
Requests for non-indigent attorney's fees and costs allowed
(continued...)

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Coupe later “filed the requisite itemized account of attorneys’

fees in its Errata, [Coupe] d[id] not provide this court with any

rationale as to why it should be permitted to essentially raise

new substantive arguments for the first time in an Errata.” Id.

at 414, 208 P.3d at 727 (citing Taomae v. Lingle, 110 Hawai#i 327,

333, 132 P.3d 1238, 1244 (2006)). As apparent from this court’s

discussion in Coupe II, that decision left open the possibility

that damages sustained in preparing and litigating the propriety

of fees could be recovered under HRS § 101-27.

2. Coupe’s Argument that Hawai#i Ventures is
Inapposite

The court, in its May 14, 2009 order granting in part

Coupe’s March 20, 2009 Motion, and the County in its answering

brief, rely on Hawai#i Ventures for the proposition that “fees and

expenses incurred in litigating the propriety of the fees to be

awarded” cannot be recovered. In Hawai#i Ventures, a receiver was

appointed to manage a hotel pending a foreclosure sale. 116

Hawai#i at 468, 173 P.3d 1125. The circuit court appointed a

special master to review the receiver’s final report, and entered

a deficiency judgment. Id. All parties appealed the circuit

court’s decision and challenged the actions taken by the

receiver. Id. On appeal, this court affirmed the circuit

24
(...continued)
by statute or contract shall be submitted in a form that
substantially complies with Form 8 in the Appendix of Forms.
A failure to provide authority for the award of attorney's
fees and costs or necessary expenses will result in denial
of that request.

(Emphasis added.)

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court’s final judgment in part but “vacated ‘the awards of fees

to the [r]eceiver and her professionals reflected in certain of

the circuit court orders’ and remanded the fee orders to the

circuit court ‘for clarification and, if necessary, a

redetermination of the amount[.]’” Id. at 469, 173 P.3d at 1126

(brackets omitted). The receiver then filed a request for

reimbursement of fees and costs she incurred on appeal.

This court stated, inter alia, that “the [r]eceiver and

her professionals are not entitled to compensation for work

performed in relation to the defense of fees issue.” Id. at 476,

173 P.3d at 1133. To support this position, this court quoted

United States v. Larchwood Gardens, Inc., 420 F.2d 531, 534 (3d

Cir. 1970), which stated that, “the law imposes on a party the

duty to pay [her] own fees and expenses in vindicating [her]

personal interests. . . . It is our understanding that services

necessarily involved in preparing [fee] application [sic] to the

district court and defending them are not compensable.” Id.

(brackets and ellipsis in original).

While, as indicated in Hawai#i Ventures, receivers in

foreclosure proceedings are “not entitled to recover fees and

expenses associated with litigation involving the propriety of

the fees to be awarded to them,” 114 Hawai#i at 497-98, 164 P.3d

at 755-56, the specific question here is whether Coupe is

entitled to fees and costs for litigating the propriety of fees

under HRS § 101-27. Hawai#i Ventures was not an eminent domain

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case, and it did not decide whether HRS § 101-27 may entitle a

landowner to attorneys’ fees expended because of the government’s

unsuccessful attempt to condemn property. As discussed supra,

Coupe II did not bar Coupe’s ability to seek damages “sustained

by [Coupe] in seeking the fees and costs [it is] owed[.]” 120

Hawai#i at 404-05, 208 P.3d at 717-18. Our holding herein is

limited to the specific circumstances of HRS § 101-27 involved in

litigating disputes as to fees and costs recoverable because of a

failed condemnation.

Because the court incorrectly determined that “there

shall be no recovery for fees and expenses incurred in litigating

the propriety of fees” under HRS § 101-27, the court based its

ruling on an “erroneous view of the law” and, therefore, abused

its discretion in failing to consider whether Coupe was entitled

to these attorneys’ fees. Because the court did not reach the

question of the reasonableness of these fees, the case must be

remanded to the court to determine the extent to which the

$75,384 of attorneys’ fees associated with preparing the billing

records and Coupe’s fee petitions were reasonable and should be

awarded.

B. Coupe’s Request for Prejudgment Interest on Its
Attorneys’ Fees and Costs for Condemnation 1

As to argument (2), Coupe asserts that the County

“never argued that [prejudgment] interest [wa]s not properly

awardable under [HRS §] 101-27,” “never contested [Coupe’s]

calculation of an approximate award nor the applicable rate,”

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and, therefore, has “waived any arguments not made[.]” Coupe

thus contends that “[t]he court should not have interposed its

own objection [to awarding prejudgment interest], when [the]

County made none.” (Citing Wong v. Takeuchi, 88 Hawai#i 46, 53,

961 P.2d 611, 618 (1998).). Coupe also maintains that COL 3325 of

the court’s Supplemental FOFCOL on Statutory Damages is erroneous

because HRS § 101-27 “must include the cost of funds encumbered

by a failed condemnation attempt”; “[t]he loss of the use of

[Coupe’s] money over nine years of Condemnation 1 must be a

recoverable element of [HRS §] 101-27 damages” or else it

“prevents [Coupe] from being made truly whole” (citing Lucas v.

Liggert & Myers Tobacco Co., 51 Haw. 346, 348, 461 P.2d 140, 143

(1969)); the governing statute for prejudgment interest in this

case is HRS § 101-27 and not the prejudgment interest statute,

HRS § 636-16 (1993);26 even if HRS § 636-16 does apply, the court

“wrongly rejected [] Coupe’s damage claim, because nine years is

by any reasonable measure a substantial delay in the proceedings

25
COL 33 of the court’s Supplemental FOFCOL on Statutory Damages
states:

33. This [c]ourt finds there is no legal nor factual basis
for the $276,762.41 in prejudgment interest sought as
damages under [HRS] § 101-27 as there is no allegations of
undue delay by Plaintiff County. See also [Coupe II, 120
Hawai#i at 410-11, 208 P.3d at 723-24] (denying [Coupe’s]
request for prejudgment interest).

26
HRS § 636-16 provides that

[i]n awarding interest [on a judgment] in civil cases, the
judge is authorized to designate the commencement date to
conform with the circumstances of each case, provided that
the earliest commencement date in cases arising in tort, may
be the date when the injury first occurred and in cases
arising by breach of contract, it may be the date when the
breach first occurred.

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and issuance of judgment” (citing Ditto v. McCurdy, 86 Hawai#i 93,

114, 947 P.2d 961, 982 (App. 1997)); and that “[the court]

wrongly placed the burden on [Coupe] to allege ‘undue delay by

Plaintiff County’”27 (quoting COL 33 of the court’s Supplemental

FOFCOL on Statutory Damages). In reply to the County, Coupe

contends that the court’s Supplemental FOFCOL on Statutory

Damages demonstrate that the County has waived any objection on

the issue of encumbered funds28 and an award will not result in a

windfall because “[t]he loss of use of funds is per se damage

under [HRS §] 101-27, and the Coupes are entitled to be made

whole.”

27
The County counters, arguing that “[t]he County always opposed any
damages except those that may be reasonable under HRS § 101-27”; that “[Coupe]
do[es] not cite any case or statutory authority that the cost of encumbered
funds relating to attorneys’ fees and costs is allowed . . . under either HRS
§ 101-27 or HRS § 636-16”; that Coupe has not “explained a rational basis to
allow such an award based on the final attorneys’ fee award where the billing
for the attorneys’ work was done over a nine year period”; and that Coupe’s
prejudgment interest claim was properly denied “[b]ecause [Coupe has] not
alleged undue delay by the County as to the payment of attorneys’ fees, either
in its pleadings or initial filing of its Motion for Statutory Damages, or
proved it[.]”

28
Throughout its opening brief, Coupe asserts that it is entitled to
damages “in the form of the cost of encumbered funds.” Subsequently, Coupe
also used the term “encumbered funds” in its reply brief to the County. Coupe
does not specifically define the term “encumbered funds[,]” but states that
the “encumbered funds represented damage suffered with each invoice related to
Condemnation 1 since October 2000 . . . until [Coupe] received payment for
[its] injuries in August 2009” and “include those [damages] resulting from the
loss of free use of funds which were tied up by the defense of Condemnation
1.” Black’s Law Dictionary defines the term encumbrance as “[a] claim or
liability that is attached to property or some right and that may lessen its
value, such as a lien or mortgage; any property right that is not an ownership
interest.” Black’s Law Dictionary 607 (9th ed. 2004).
Coupe acknowledges that “[t]he [c]ourt characterized this [loss of
use of funds] claim as prejudgment interest[.]” According to Coupe’s
memorandum in support of it October 11, 2007 request, Coupe requested
“[p]rejudgment interest (10% per annum from date of each bill) on those fees,
and the associated costs is proper because those fees are ‘damages’ under
[HRS] § 101-27[.]” Coupe does not state when Coupe paid these invoices, if at
all.

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1. Whether the County has Waived its Objections
to Coupe’s Request for Prejudgment Interest

Coupe first argues that the denial of prejudgment

interest damages “cannot be reconciled with” FOF 3729 and 3830 and

COL 731 in the court’s Supplemental FOFCOL on Statutory Damages,

which, according to Coupe, “reveal [that the] County waived [the]

objection” to Coupe’s request for prejudgment interest. Coupe

urges this court to conclude that the first sentence in

Supplemental FOF 38, which states that the “County has [] never

argued in this [c]ourt that such interest is not properly

awardable as damages under [HRS §] 101-27[,]” shows that the

County has waived its objection.

However, Supplemental FOF 38, when read in its

entirety, indicates that while the County did not argue that

“[prejudgment] interest [was] not properly awardable as damages

under [HRS §] 101-27[,]” the County did instead argue that “‘any

29
FOF 37 of the court’s Supplemental FOFCOL on Statutory Damages
states that the “County contests neither the calculation of interest nor the
applicable rate.”

30
In FOF 38 of the Supplemental FOFCOL on Statutory Damages, the
court found as follows:

38. County has also never argued in this [c]ourt that such
interest is not properly awardable as damages under [HRS
§] 101-27. Instead, County has argued only that “any award
under HRS § 101-27 should be limited to amounts paid for the
improper delegation of condemnation power defense in the
first case.”

(Citation omitted.)

31
COL 7 of the court’s Supplemental FOFCOL on Statutory Damages
states that the “County has waived any and all arguments and any new evidence
that it did not previously raise in its prior oppositions to [Coupe’s] Motion.
The last allowable pleading submitted was December 19, 2007.” (Citation
omitted.)

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award under HRS § 101-27 should be limited to amounts paid for

the improper delegation of condemnation power defense in the

first case.’” (Emphasis added.) (Citation omitted.) Thus, the

County challenged Coupe’s prejudgment interest claim inasmuch as

the prejudgment interest was not an “amount[] paid for the

improper delegation of condemnation power defense in the first

case.” Consequently, the County’s argument that it did object to

Coupe’s prejudgment interest claim is correct.

2. Whether Prejudgement Interest is Mandatory
under HRS § 101-27

Coupe interprets HRS § 101-27 as mandating the recovery

of prejudgment interest via the phrase “all such damage as may

have been sustained by the defendant by reason of the bringing of

the proceedings.” However, the plain language of HRS § 101-27

indicates that the “recovery of damages under HRS § 101-27” is

not mandatory, as Coupe asserts, but “subject to a reasonableness

requirement.” Coupe II, 120 Hawai#i at 411, 208 P.3d at 724.

As explained in Coupe II, the words in HRS § 101-27,
includ[ing] “the defendant’s costs of court, a reasonable
amount to cover attorney’s fees paid by the defendant in
connection therewith, and other reasonable expenses[]” . . .
is essentially a list of items that are to be included in
the damage award. Thus, the phrase “and other reasonable
expenses,” assumes that the previous items listed are also
types of reasonable expenses[,] . . . [because interpreting
HRS § 101-27 as commanding the grant of] all costs “actually
incurred,” regardless of reasonableness, renders the term
“other” superfluous.

Id. (citing Carlisle v. One (1) Boat, 119 Hawai#i 245, 255, 195

P.2d 1177, 1187 (2008)) (emphases omitted). Hence, a request for

prejudgment interest under HRS § 101-27 may be granted if it is

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an “other reasonable expense[].” See HRS § 101-27; Coupe II, 120

Hawai#i at 411, 208 P.3d at 724.

However, the plain language of the provision does not

clarify whether prejudgment interest is an “other reasonable

expense[].” Nor does the statute define the term. Therefore,

this court may look to the legislative history in construing the

statute. See Hawaii Providers Network, Inc. v. AIG Hawaii Ins.

Co., 105 Hawai#i 362, 369, 98 P.3d 233, 240 (2004) (recognizing

that “[w]hen there is doubt, doubleness of meaning, or

indistinctiveness or uncertainty of expression used in a

statute[,] an ambiguity [exists,]” and, thus, “courts may take

legislative history into consideration in construing a statute”)

(internal quotation marks, brackets, and citations omitted). The

legislative history recognized that, “at times [when]

condemnation proceedings are instituted but are not prosecuted to

final judgment, the owners of the property involved thereby

suffer[] loss for which there is no means now provided [by] which

they may be compensated.” H. Stand. Comm. Rep. No. 622, in 1929

House Journal, at 1400. To remedy this situation, the

legislature amended the eminent domain statutes for the purpose

of “giv[ing] to persons whose property is sought to be condemned,

a right of action to recover damages if the condemnation

proceedings are dropped before final judgment is reached.” Id.

Generally, this court has recognized that prejudgment

interest at common law is “[i]nterest on claims awarded for delay

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in payment” which is “measured from the accrual of the claim for

relief to the time of rendition of the judgment[.]” Rodrigues v.

State, 52 Haw. 156, 168, 472 P.2d 509, 518 (1970) (emphasis

added). This court has defined prejudgment interest as “‘an

element of complete compensation[,]’” Kalawaia v. AIG Hawai#i Ins.

Co., 90 Hawai#i 167, 172, 977 P.2d 175, 180 (1999) (quoting W.

Virginia v. United States, 479 U.S. 305, 310 (1987) (citation

omitted)), that “serves to compensate for the loss of use of

money due as damages . . . , thereby achieving full compensation

for the injury those damages are intended to redress[,]” id.

(quoting W. Virginia, 479 U.S. at 310 n.2 (citing Comment,

Prejudgment Interest: Survey & Suggestion, 77 Nw.U.L.Rev. 192

(1982))) (emphasis added). Thus, it follows that prejudgment

interest can be recovered as an “other reasonable expense” under

HRS § 101-27. Our holding as to such prejudgment interest is

limited to the specific circumstances of a failed condemnation

contemplated by HRS § 101-27.

3. Whether Coupe’s Request for Prejudgment
Interest Under HRS § 101-27 was Properly
Denied

This court must next address whether the court erred in

denying Coupe’s request for prejudgment interest under the

circumstances of the case. Prejudgment interest is “awarded at

the discretion of the court.” Rodrigues, 52 Haw. at 169, 472

P.2d at 518; see Metcalf v. Voluntary Employees’ Benefit Ass’n of

Hawai#i, 99 Hawai#i 53, 61, 52 P.3d 823, 831 (2002) (recognizing

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that “it is clearly within the discretion of the circuit court to

deny prejudgment interest where appropriate”). Accordingly, an

award of prejudgment interest under HRS § 101-27 should be

reviewed for abuse of discretion. Cf. Tri-S Corp. v. W. Worlds

Ins. Co., 110 Hawai#i 473, 489, 135 P.3d 82, 98 (2006)

(recognizing that in the context of HRS § 636-16, “[a]n award of

prejudgment interest is reviewed for an abuse of discretion”)

(citing Amfac, Inc. v. Waikiki Beachcomber Inv. Co., 74 Haw. 85,

136, 839 P.3d 10, 36 (1992)). “‘[T]o constitute an abuse [of

discretion,] it must appear that the court clearly exceeded the

bounds of reason or disregarded rules or principles of law or

practice to the substantial detriment of a party litigant.’” Id.

(quoting State v. Sacoco, 45 Haw. 288, 292, 367 P.2d 11, 13

(1961)) (brackets in original).

Similar to the situation here, Coupe in Coupe II

contended that “it [was] entitled to [prejudgment] interest from

the date of each invoice for attorneys’ fees and costs as a form

of damage, pursuant to HRS § 101-27” because “the purpose of a

damage award is to put a party in the position they [sic] would

have been in had not harm occurred” and that Coupe suffered

damage “each time it had to pay its lawyers.” 120 Hawai#i at 410,

208 P.3d at 723 (brackets and internal quotation marks omitted).

In Coupe II, Coupe argued that “‘[i]nterest from the date of harm

is an element of damage and this [c]ourt is authorized to award

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pre-judgment interest in all civil actions’ under HRS § 636-16.”

Id. (footnote omitted) (emphasis added).

After considering Coupe’s arguments, this court denied

Coupe’s request for prejudgment interest. Id. at 411, 208 P.3d

at 724. It was recognized that “[p]re-judgment interest may be

awarded under HRS § 636-16 in the court’s discretion ‘when the

issuance of judgment is greatly delayed for any reason.’” Id.

(quoting Tri-S Corp., 110 Hawai#i at 498, 135 P.3d at 107)

(emphasis in original). However, this court denied Coupe’s

request for prejudgment interest on its attorneys’ fees, costs,

and excise tax related to Condemnation 1 claimed on appeal under

both HRS §§ 101-27 and 636-16 because “[Coupe] ha[d] not asserted

. . . any lengthy delay in the issuance of the judgment of

attorneys’ fees or costs[.]” Id.

Similarly, in the instant appeal, it appears that Coupe

did not assert any lengthy delay in the issuance of the judgment

of the attorneys’ fees or costs at the trial level. Coupe, in

its October 11, 2007 Motion, moved for statutory damages pursuant

to HRS § 101-27, “in the amount of $1,547,748.80 and costs in the

amount of $200,226.58, plus tax and prejudgment interest,

incurred in [Condemnation 1].” Coupe’s only assertion with

regard to prejudgment interest in its supporting memorandum

stated, “Prejudgment interest (10% per annum from date of each

bill) on those fees, and the associated costs is [sic] proper

because those fees are ‘damages’ under [HRS] § 101-27.”

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(Emphasis added.) No claim was made in Coupe’s October 11, 2007

Motion for statutory damages or in Coupe’s supporting memorandum

that there had been any undue delay in the proceedings.

Accordingly, the court in the instant case properly cited to

Coupe II in COL 33 of its Supplemental FOFCOL on Statutory

Damages as support for its conclusion that “there [wa]s no legal

or factual basis for the $276,762.41 in prejudgment interest

sought as damages under HRS § 101-27[.]”32 As in Coupe II, Coupe

again “has not asserted . . . any lengthy delay in the issuance

of judgment[,]” 120 Hawai#i at 411, 208 P.3d at 724, and

therefore, Coupe’s request for prejudgment interest was properly

denied.

This denial of prejudgement interest under HRS § 101-27

is also consistent with this court’s interpretation of HRS § 636-

16. HRS § 636-16, which applies in all civil cases, vests a

court with discretion to award prejudgment interest. HRS § 636-

16 (stating in part that “[i]n awarding interest in civil cases,

the judge is authorized to designate the commencement date to

conform with the circumstances of each case”); Coupe II, 120

Hawai#i at 410, 208 P.3d 723 (“Pre-judgment interest may be

awarded under HRS § 63-16 in the court’s discretion[.]”).

Consistent with the general definitions of prejudgment interest

32
While Coupe now asserts in this appeal that the nine-year period
of litigation “is by any reasonable measure a substantial delay in the
proceedings in the issuance of judgment[,]” Coupe does not cite where in the
record it made this argument to the court. Accordingly, the County asserts
that “[Coupe] ha[s] not alleged undue delay by the County as to the payment of
attorneys’ fees, either in its pleadings or initial filing of its [October 11,
2007 Motion] or proved it[.]”

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stated supra, the purpose of prejudgment interest, in the context

of HRS § 636-16, is to “‘correct injustice when a judgment is

delayed for a long period of time for any reason, including

litigation delays[,]’” Coupe II, 120 Hawai#i at 411, 208 P.3d at

724 (quoting Tri-S Corp., 110 Hawai#i at 498, 135 P.3d at 107

(internal quotation marks and citation omitted)), and “to permit

more equitable results and to more speedily resolve cases[,]”

Wiegand v. Colbert, 68 Haw. 472, 477, 718 P.2d 1080, 1084 (1986).

According to Tri-S Corp., a finding of fault by one of

the parties is not necessary, and a review of an award of

interest rests on three factors:
(1) if fault is found on the part of the party seeking
interest, denial of interest will not be considered an abuse
of discretion; (2) if fault is found on the part of the
party opposing interest, an award of interest will not be
considered an abuse of discretion; and (3) where no fault is
found on either side, the trial court may still award or
deny prejudgment interest in its discretion, depending on
the circumstances of the case.

110 Hawai#i at 498, 135 P.3d at 107 (emphasis added). Moreover,

“‘[a] trial court's denial of prejudgment interest is usually

affirmed’ if the requesting party caused the delay or the

opposing party did not cause the delay.” Id. (quoting Page v.

Domino’s Pizza, Inc., 80 Hawai#i 204, 209, 908 P.2d 552, 557 (App.

1995) (citations omitted)) (brackets in original). However, “‘a

trial court can award prejudgment interest for any substantial

delay in the proceedings, and [] no purposeful delay on the part

of the non-moving party is required.’” Id. (quoting Ditto, 86

Hawai#i at 114, 947 P.2d at 982) (emphases in original).

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In any event, because there is no fault found on the

part of either Coupe or the County, the court had discretion to

deny Coupe’s prejudgment interest claim under the circumstances

of the case. See id. As discussed above, the record reflects

there was no argument to the court below or to this court, that

there has been a delay attributable to the County’s fault.

Moreover, the County did not argue that there has been any delay

caused by Coupe. Hence, neither party argued to the court that

there was a purposeful delay on the part of any party, nor did

the court find such purposeful delay.33 Furthermore, Coupe did

not assert specifically where in the span of nine years the

substantial delay occurred.

Given the circumstances, it cannot be said that the

court “clearly exceeded the bounds of reason or disregarded the

rules or principles of law or practice to the substantial

detriment of [Coupe.]” Id. (quoting Sacoco, 45 Haw. at 292, 367

P.2d at 13). The court’s denial of Coupe’s request for

prejudgment interest was not an abuse of discretion, and thus,

the court did not err in denying Coupe’s request for prejudgment

interest under HRS § 101-27.

V. CONCLUSION

Based on the foregoing, (1) the court’s conclusion that

Condemnation 2 was not pretextual, (2) the valuation of just

compensation set for the property in Condemnation 2, and (3) the

33
See supra note 25.

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denial of Coupe’s request for prejudgment interest, are affirmed.

However, the case must be remanded for a determination of Coupe’s

request for attorneys’ fees associated with the preparation of

billing records and/or preparation of Coupe’s fee petitions in

Condemnation 1.

On the briefs:

Kenneth R. Kupchak, Robert H. /s/ Mark E. Recktenwald
Thomas, Mark M. Murakami,
and Matthew T. Evans (Damon /s/ Paula A. Nakayama
Key Leong Kupchak Hastert)
for defendant-appellant /s/ Simeon R. Acoba, Jr.
C&J Coupe Family Limited
Partnership. /s/ James E. Duffy

Lincoln S.T. Ashida, Corporation /s/ Richard K. Perkins
Counsel; Katherine A. Garson,
Assistant Corporation
Counsel; Joseph K. Kamelamela,
Gerald Takase, and Michael J.
Udovic, Deputies Corporation
Counsel, County of Hawai#i, for
plaintiff-appellee County of
Hawai#i.

William Meheula and Kurt
Kagawa (Meheula & Devens, LLP),
for third-party defendant-
appellee 1250 Oceanside
Partners aka Hokuli#a.

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