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Electronically Filed
Supreme Court
SCWC-14-0000828
16-MAY-2017
08:20 AM

IN THE SUPREME COURT OF THE STATE OF HAWAI#I

---o0o---

COUNTY OF KAUA#I,
Respondent/Plaintiff-Appellee,

vs.

HANALEI RIVER HOLDINGS LIMITED, a Cook Islands corporation;

MICHAEL GUARD SHEEHAN;
Petitioners/Defendants-Appellants,

and

PATRICIA WILCOX SHEEHAN, as Trustee of that certain unrecorded

Revocable Trust Agreement of Patricia Wilcox Sheehan, dated
December 21, 1994; PATRICIA WILCOX SHEEHAN; GAYLORD H. WILCOX;
DANIEL H. CASE; GROVE FARM COMPANY, INC., a Hawai#i corporation;
HUGH W. KLEBAHN; DONN A. CARSWELL; PAMELA W. DOHRMAN;
ROBERT D. MULLINS; WILLIAM D. PRATT; RANDOLPH G. MOORE;
and the Heirs and/or Assigns of JOHN B. BROSSEAU, also known as
JOHN BROSSEAU, JOHN B. BRASSEAU and J.B. BRASSEAU;
Respondents/Defendants-Appellants.

SCWC-14-0000828

CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS

(CAAP-14-0000828; CIV. NO. 11-1-0098)

MAY 16, 2017

RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON, JJ.

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OPINION OF THE COURT BY NAKAYAMA, J.

I. INTRODUCTION

This case concerns the condemnation of three parcels of

privately-owned property and presents the following three issues:

(1) whether two parcels of land must physically abut in order for

a condemnee to be entitled to severance damages when one of the

parcels is condemned; (2) whether blight of summons damages only

begin to accrue after each condemnee has established its

entitlement thereto and; (3) whether a condemnor may withdraw a

portion of its estimate of just compensation based on an updated

estimate of the propertys value, after the deposit has been made

and the condemnor has taken possession of the property.

For the reasons stated below, we hold that: (1) the

presence or lack of physical unity is not dispositive of whether

a condemnee is entitled to severance damages; (2) a deposit of

estimated just compensation does not become conditional, and

blight of summons damages do not begin to accrue, when a

condemning authority objects to a condemnees motion to withdraw

funds based on the fact that the condemnees entitlement to such

funds is unclear and; (3) the court in an eminent domain

proceeding has the discretion to permit a governmental entity to

withdraw a portion of a deposit of estimated just compensation

when the deposit has not been disbursed to the landowner, the

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government acted in good faith in seeking to adjust the estimate

to accurately reflect the value of the property on the date of

the summons, and the adjustment will not impair the substantial

rights of any party in interest.

Therefore, we affirm the Intermediate Court of

Appealss May 11, 2016 judgment on appeal entered pursuant to its

March 31, 2016 published opinion, which affirmed the Circuit

Court of the Fifth Circuits (circuit court) final judgment

except with regard to the award of blight of summons damages, but

on different grounds with regard to the defendants entitlement

to severance damages.

II. BACKGROUND

This case concerns the condemnation of three parcels of

privately-owned land (Parcels 33, 34, and 49). In October 2004,

Michael G. Sheehan (Sheehan) acquired his ownership interests in

Parcels 33 and 34 from the Patricia Wilcox Sheehan Trust. At

that time, a portion of Parcel 49 was also a part of Parcel 33.

Parcel 49 was later created through consolidation and re-

subdivision of neighboring lands. On October 19, 2011, Sheehan

transferred ownership of Parcels 33 and 34 to Hanalei River

Holdings, Ltd. (HRH), but retained his fee simple title to Parcel

49. Geographically, the subject area consists of three

adjoining irregular shaped parcels[,] Parcels 49, 33 and 34

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respectively, located along the east side and toward the end of

a road in Hanalei, Kaua#i. Parcels 33 and 34 [are both adjacent

to each other, and] front along the Hanalei River along their

northern boundaries while Parcel 49 is one lot removed from the

river.

Although it is not being condemned by the County of

Kaua#i (the County), a piece of property referred to by the

parties as Area 51 is also relevant to this case. Area 51

includes land immediately to the east of Parcel 34. Area 51 is

also a part of Lot 127, owned by Patricia Wilcox Sheehan.1 In

2004, Patricia Wilcox Sheehan granted Sheehan an easement over

Area 51 to operate a boatyard. This easement provided in

pertinent part:
AND THE GRANTEE does hereby covenant and agree:

(1) That Grantee his successors and assigns easement to use

the premises shall be limited solely for a boat baseyard as
that use is permitted by the Decision and Order of the
Planning Commission of the County of Kauai, under its
Special Management Area Use Permit, SMA(U)-87-8; Special
Permit SP-87-9; Use Permit U-87-32, and Class IV Zoning
Permit Z-IV-87-40, dated June 24, 1987.

. . . .

(3) That in the event the Special Management Area Use

Permit, SMA(U)-87-8; Special Permit SP-87-9; Use Permit U-
87-32, and Class IV Zoning Permit Z-IV-87-40, and the

1
In 2006, Patricia Wilcox Sheehan gave Sheehan a quitclaim deed
conveying Area 51, an unsubdivided portion of Lot 127; however, the Land Court
mistakenly construed the deed as a conveyance of the entirety of Lot 127. In
response, Sheehan quitclaimed Lot 127 back to Patricia Wilcox Sheehan on
February 18, 2013. As of August 8, 2013 however, the new Transfer Certificate
of Title had not yet been generated by the Land Court.

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authority to use the easement premises as a boat baseyard is

withdrawn, cancelled or revoked by the Planning Commission
of the County of Kauai, State of Hawai#i, this Grant of
Easement shall expire and be null and void upon the
recordation at the Bureau of Conveyances of the State
of Hawai#i, of a certified copy of said action of the Kauai
County Planning Commission disallowing any further use of
the premises for a boat baseyard.

Sheehans permits to operate a boatyard were revoked in 2010.

Sheehan v. Cty. of Kaua#i, 134 Hawai#i 132, 337 P.3d 53 (App.

2014); Sheehan v. Cty. of Kaua#i, No. SCWC-11-601 (Haw. Jan. 16,

2015) (order rejecting application for writ of certiorari);

Although Area 51 has not been designated by the County as a

separate lot of record, it has been considered a separate lot of

record for tax purposes as TMK No. (4) 5-5-01:51.

A. Circuit Court Proceedings

On May 31, 2011, the County filed a complaint and

summons in the circuit court to condemn Parcels 33, 34, and 49

for use as a public park. In the Countys subsequently filed

first amended complaint, HRH, Sheehan, and Patricia Wilcox

Sheehan were listed among others as those who might have or claim

some right, title, or interest in the Parcels.

On April 30, 2012, the County filed an ex parte motion

for an order putting plaintiff in possession pursuant to Hawai#i

Revised Statutes (HRS) 101-29. After the circuit court2

2
The Honorable Kathleen N.A. Watanabe presided.

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granted the Countys motion in an order filed on May 4, 2012, the

County deposited estimated just compensation of $5,890,000 with

the clerk of the court.

On July 3, 2012, Patricia Wilcox Sheehan filed an

answer to the Countys first amended complaint, which asserted

that she is the owner of the fee simple interests, easements,

rights of way or the express contingent remainder man [sic], to

all or portions of the real property identified as Parcels 33,

34, and 49. Patricia Wilcox Sheehan requested that the circuit

court dismiss the complaint, and if it did not, that

the respective interests of all Defendants in the
property be determined and that appropriate orders be
entered thereon, and that the Court determine and
award the just compensation, including but not limited
to blight of summons, to which Patricia W. Sheehan is
entitled by virtue of the taking, and severance
damages to the remaining property.

On August 16, 2012, HRH moved the circuit court to

vacate the aforementioned order of possession because the initial

appraisal of the subject property was seven months old on the

date of summons, and consequently, HRH alleged it was stale as a

matter of law and did not in good faith represent the reasonable

fair market value of the property. The circuit court denied

HRHs motion on September 13, 2012.

On March 11, 2013, the defendants filed an application

for payment of estimated compensation pursuant to HRS 101-31

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and -37. The memorandum in support of the motion asserted that

Sheehan was the legal owner of Parcel 49 and that HRH was the

legal owner of Parcels 33 and 34. Patricia Wilcox Sheehan filed

a statement of no position regarding HRH and Sheehans

application.

The County filed a memorandum in opposition to HRH and

Sheehans application on April 2, 2013. The County argued that

HRH and Sheehan should not be allowed to withdraw the deposit

until the respective interests of all the defendants was

judicially determined. The County noted that Patricia Wilcox

Sheehan, HRH, and Sheehan all had asserted an interest in the

deposited money.

Additionally, in the same memorandum, the County noted

that it was filing a separate motion to withdraw a portion of the

deposit, based on an updated appraisal that reflected a lower

estimate of compensation at $4,860,000. The County asserted that

it should not be jeopardized by having Movants withdraw more

than the actual estimated value of the condemned property

because [o]nce Movants withdraw [all] the money, the County

would have no reliable means of recouping any excess payment.

On the same date that the Countys opposition to HRH

and Sheehans application was filed, the County also filed a

motion to withdraw $1,030,000 from the amount it had deposited

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with the clerk of the court in light of the second appraisal.

Citing University of Hawaii Professional Assembly v. University

of Hawaii, 66 Haw. 214, 221, 659 P.2d 720, 725 (1983), the County

contended that [p]ursuant to the doctrine of quasi estoppel,

[the defendants] cannot now object to the Countys obtaining an

updated appraisal as of the date of summons[,] because they had

objected to the Countys reliance upon the previous appraisal.3

On April 5, 2013, Patricia Wilcox Sheehan filed a

waiver and release of any claims or interest in the proceeds

payable by the County and consented to the disbursement of the

proceeds to HRH and Sheehan. And on April 10, 2013, the County,

HRH, and Sheehan entered into an agreement regarding the

withdrawal of the deposit. In addition to an agreement that the

County would stipulate that Sheehan and HRH could withdraw

$4,860,000, Sheehan agreed to indemnify the County if HRH failed

to repay any money that exceeded the jury verdict on Parcels 33

and 34. That same day, the parties filed a stipulation agreeing

that Sheehan and HRH could withdraw $4,860,000 (the amount of the

3
In University, this court noted that quasi estoppel is grounded
in the equitable principle that one should not be permitted to take a position
inconsistent with a previous position if the result is to harm another. 66
Haw. at 221, 659 P.2d at 725.

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second appraisal) minus taxes, to be apportioned among the three

parcels as stated in the stipulation.

On April 22, 2013, the defendants filed a motion in

opposition to the Countys motion to withdraw a portion of the

deposit, alleging that there is no provision in HRS Chapter 101

permitting the County to offer a new estimate as a basis for

withdrawing funds after it had already seized the subject

property and the condemnees have applied for release of the

funds, that the defendants consequently waived all defenses to

the condemnation action besides an assertion of greater

compensation or damages, and that the funds deposited constituted

an estimate of the subject propertys value at the time the

County seized the property. Following a hearing, the Countys

motion to withdraw $1,030,000 was granted on May 13, 2013.

The circuit courts scheduling order for trial required

Sheehan and HRH to produce their appraisal reports of the

properties. In the defendants expert report, Sheehan and HRHs

valuation expert, Paul Cool (Cool), provided valuation estimates

for Parcels 33, 34, and 49. Additionally, Cool also included a

valuation of damages to Area 51 in his report. Specifically,

Cools report stated,

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Area 51 consists of the lands immediately east of

Parcel 33.[4] In the past, Michael G. Sheehan has
used this area, together with Parcels 33 and 34 as a
boatyard and in conjunction with boat and ocean
activity operators from the property since the late
1980s. Improvements include:

-Canoe pavilion with kitchen

-Restroom facility
-Outdoor shower
-Boat wash down facility.

Over the years, the relationship between Mr. Sheehan

and the County with regards to these operations have
been contentious. The County has challenged and
continues to challenge the legality of operations.
Matters are pending before the State of Hawai#i
Intermediate Court of Appeals.

The taking of the three Hanalei River parcels will

require operations to be consolidated onto Area 51.
While having no contributory value to the highest and
best use of the three Hanalei River parcels, the
improvements on Parcels 33 and 34 are integral to
continued activities that remain on Area 51.

Cool opined that Area 51 suffered severance damages in an amount

of $250,000 to $300,000 caused by the taking of Parcels 33, 34

and 49. Prior to Cools report, neither HRH nor Sheehan asserted

a claim for severance damages in their answers, their pretrial

statement, or elsewhere in the record. Sheehan claims an

interest in Area 51 due to the boatyard easement that was granted

to him by Patricia Wilcox Sheehan in 2004.

On August 13, 2013, the County moved for partial

summary judgment against HRH and Sheehan on the issue of

severance damages. On September 3, 2013, HRH and Sheehan opposed

4
While Cool stated that Area 51 consists of lands immediately east
of Parcel 33[,] he likely intended this as Parcel 34. Tax maps indicate that
Area 51 is in fact directly to the east of Parcel 34, and not 33.

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the motion, and supported the opposition with a declaration from

counsel, an unsigned declaration from Sheehan,5 and a Parcel

history report for Area 51.6 The circuit court granted the

Countys motion based on its finding, inter alia, that Area 51

and Parcel 49 did not meet the three unities test as set forth in

City and County of Honolulu v. Bonded Investment Co., 54 Haw.

523, 525, 511 P.2d 163, 165 (1973) [hereinafter Bonded Inv.

II], as there was neither unity of title, physical unity, nor

unity of use between Parcel 49, the condemned parcel, and Area

51, the area in which Sheehan had asserted a right to severance

damages.
Jury trial began on November 4, 2013, and the jury

reached a decision on the condemnation action on November 8,

5
Sheehan later filed a signed declaration with the court on
March 27, 2014. The declaration stated:

1. I am one of the Defendants in this case.

2. The boatyard is situated on lots 33, 34, 49, 50
and Area 51. I call it Area 51 because I received a
separate TMK for the lot and its last two numbers were
51. The maintenance shed, office structure, part of
the wash-down facility, and its leach field are
located on Area 51.
3. Contrary to the Countys position, the Grant of
Easement remains in full force and effect. It has not
been cancelled by my former wife.
4. All lots, including Area 51 were integral parts
of my boatyard. I have always considered and treated
the lots to be one larger tract of land - my
boatyard.
6
A County Parcel History report retrieved on July 31, 2012 states,
OWNERS REPRESENTATIVE REQUESTS NEW TMK: 5501-51 with an effective date of
October 24, 1991, and approval date of May 7, 1998. Owner is listed as the
Patricia Sheehan Trust.

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2013. The jury awarded compensation for each of the three

Parcels, valuing Parcel 33 at $2,030,000, Parcel 34 at

$3,016,000, and Parcel 49 at $754,000. The verdict thus totaled

$5.8 million.

On November 18, 2013, the County filed its motion for

blight of summons damages. The County asserted that damages

should be measured for two time periods:

(1) from May 31, 2011 (the date of summons) until May
4, 2012 (the date the County deposited estimated just
compensation of $5.89 million pursuant to the Order
putting the County into possession) measured at 5%
simple interest/year on the jury verdict of $5.8
million, and (2) from April 29, 2013 (the date of
entry of the Order Granting the Countys Motion to
Withdraw Portion of Deposit) until the date the County
pays Defendants $940,000, which is the difference
between $4.86 million and the jury verdict.

In their response, Sheehan and HRH agreed that the first time

period on the $5.8 million jury verdict should be calculated

from May 31, 2011 through May 4, 2012. However, the defendants

contended that because the County moved to reduce the initial

estimate deposited with the court, the deposit was not an

unconditional deposit that was exempt from interest, and that

therefore, the proper calculation for the interest on the

$940,000 difference is from May 4, 2012 through the date that

the County paid the defendants in full.

At a hearing on the States motion held on January 8,

2014, the circuit court found that the Countys deposit was

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unconditional and that the blight of summons damages stopped

accruing on May 4, 2012. The circuit court granted the Countys

motion for blight of summons damages on January 16, 2014, and on

April 25, 2014, the circuit court issued its final judgment.

The circuit court concluded that total just compensation for the

condemned property was $5.8 million, and [a]s additional just

compensation, blight of summons damages at the rate of five

percent (5%) per annum (without compounding) accrued from

May 31, 2011 until County deposited $5,890,000 with the Clerk

of Court, and from April 29, 2013 until the County paid the

defendants in full.

B. Intermediate Court of Appeals Proceedings

The defendants appealed to the Intermediate Court of

Appeals (ICA) and asserted three points of error: (1) The trial

court erred when it permitted the County to withdraw a portion

of the estimate of just compensation after Defendants-Appellants

applied for its release; (2) The trial court erred when it

granted summary judgment in favor of the County on the issue of

severance damages; and (3) The trial court erred in its

calculation of blight of summons damages.

The ICA vacated the circuit courts award for blight

of summons damages and affirmed the circuit court in all other

respects. Cty. of Kaua#i v. Hanalei River Holdings, Ltd., 137

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Hawai#i 471, 474, 375 P.3d 250, 253 (App. 2016). Addressing the

circuit courts order allowing the County to withdraw a portion

of its estimated just compensation, the ICA reviewed HRS 101-

29, -30, and -31 and noted that the statutes do not expressly

authorize the withdrawal of a portion of the deposit. Id. at

479-80, 375 P.3d at 258-59. However, the ICA held that HRS

101-19 provides the court in an eminent domain action with

broad authority to permit amendments to the proceeding . . .

[and] authorized the circuit court to allow amendments in form

or substance of processes, motions, or other proceedings, as

long as the amendment will not impair the substantial rights of

any party in interest. Id. at 480, 375 P.3d at 259 (footnote

omitted).

The ICA also held that under federal case law, which

was cited favorably by this court in City and County of Honolulu

v. Bonded Investment Co., 54 Haw. 385, 507 P.2d 1084 (1973)

[hereinafter Bonded Inv. I], the government is allowed to

withdraw the excess of the cash deposited following a revised

estimate of just compensation. Id. at 481, 375 P.3d at 260

(citing United States v. 1,997.66 Acres of Land, More or Less,

in Polk Cty., Iowa, 137 F.2d 8, 13 (8th Cir. 1943)). The ICA

concluded:

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Based on HRS 101-19 and persuasive federal case law,

we hold that the court in an eminent domain proceeding
may permit a governmental entity to withdraw a portion
of the estimated just compensation deposit that has
not been dispersed to the landowner when the
governmental entity, acting in good faith, seeks to
adjust the estimate to accurately reflect the value of
the property on the date of summons and the adjustment
will not impair the substantial rights of any party in
interest.

Id.

Applying the new standard to this case, the ICA

concluded that the circuit court did not abuse its discretion in

allowing the County to withdraw part of its deposit because (1)

the deposit had not been disbursed yet; (2) the County appeared

to have acted in good faith because the withdrawal was based on

an updated appraisal, which the defendants had previously

requested; and (3) the withdrawal of a portion of the estimated

just compensation did not impair the defendants substantial

rights. Id. at 481-82, 375 P.3d at 260-61.

Regarding severance damages, the ICA first held that

Sheehans unsigned declaration, the sole paper upon which the

defendants relied to raise a genuine issue of material fact, did

not constitute admissible evidence under Rule 56(e) of the

Hawai#i Rules of Civil Procedure (HRCP) because it violated Rule

7(g) of the Rules of the Circuit Courts of the State of Hawai#i,

which sets forth the requirements for when a declaration may be

submitted in lieu of an affidavit. Id. at 483, 375 P.3d at 262.

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The ICA also rejected Sheehans contention that, under Bonded

Inv. II, there is no requirement that all of the pertinent lots

physically abut one another in order to meet the three unities

test. Id. The ICA concluded that no genuine issue of material

fact existed as to Sheehans inability to satisfy the three

unities test, and that therefore, Sheehan was not entitled to

severance damages for Area 51 as a matter of law. Id. at 483-

84, 375 P.3d at 262-63.

As for blight of summons damages, the ICA noted that

the only issue raised on appeal was whether the Countys deposit

of estimated just compensation was conditional, such that the

deposit did not stop accruing interest. Id. at 485, 375 P.3d at

264. The ICA determined that at the time the deposit was made,

there were no express conditions placed on the deposit. Id.

The ICA also held that the Countys opposition to the

defendants withdrawal of the deposit based on lack of clear

title was not a condition because, pursuant to HRS 101-31, a

party must be entitled to the just compensation in order to

receive payment of the estimated amount deposited with the

court. Requiring a party to demonstrate entitlement to the

money does not constitute placing a condition upon the deposit.

Id. at 486, 375 P.3d at 265.

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Following this reasoning, the ICA concluded that it

was not until April 5, 2013 when Patricia Wilcox Sheehan waived

any interest in the just compensation that it became clear that

the Sheehan Defendants were the parties entitled to just

compensation. Id. at 487, 375 P.3d at 266. However, the ICA

held that the deposit became conditional because the County did

not agree to release the deposit until April 10, 2013, which is

when Sheehan agreed to indemnify the County. Id. Therefore,

the ICA concluded that blight of summons damages were as

follows: (1) from May 31, 2011 to May 4, 2012, 5% interest per

annum on the $5.8 million jury verdict; (2) from April 5, 2013

to April 10, 2013, 5% interest per annum on the $5.8 million

jury verdict and; (3) from April 10, 2013 to the date upon which

the defendants are paid in full, 5% interest per annum on

$940,000. Id.

The defendants filed an application for writ of

certiorari on July 11, 2016. Therein, the defendants presented

this court with three questions for review: (1) Must two

parcels physically abut in order for the jury to consider

whether they are part of a larger parcel?; (2) Where there are

multiple properties being condemned from different owners, does

statutory interest on a conditional deposit only accrue after

each condemnee establishes an entitlement to its portion of the

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deposit? and; (3) Does [HRS 101-19] enable a condemnor to

withdraw a portion of its estimate of just compensation after

deposit with the Court and after taking possession of the

property?

The County responded to the defendants application on

July 25, 2016. On August 22, 2016, this court accepted the

defendants application for writ of certiorari.

III. STANDARDS OF REVIEW

A. Interpretation of a Statute

The interpretation of a statute is a question of law

reviewable de novo.
When construing a statute, our foremost obligation is
to ascertain and give effect to the intention of the
legislature, which is to be obtained primarily from
the language contained in the statute itself. And we
must read statutory language in the context of the
entire statute and construe it in a manner consistent
with its purpose.

Ka Pa#akai O Ka#Aina v. Land Use Commn, 94 Hawai#i 31, 41, 7

P.3d 1068, 1078 (2000) (quoting Amantiad v. Odum, 90 Hawai#i

152, 160, 977 P.2d 160, 168 (1999)).

B. Summary Judgment
On appeal, the grant or denial of summary judgment is

reviewed de novo. Nuuanu Valley Assn v. City & Cty. of

Honolulu, 119 Hawai#i 90, 96, 194 P.3d 531, 537 (2008).
[S]ummary judgment is appropriate if the pleadings,
depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if

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any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to
judgment as a matter of law. A fact is material if
proof of that fact would have the effect of
establishing or refuting one of the essential elements
of a cause of action or defense asserted by the
parties. The evidence must be viewed in the light
most favorable to the non-moving party. In other
words, we must view all of the evidence and inferences
drawn therefrom in the light most favorable to the
party opposing the motion.

Id. (alteration in original) (quoting Kahale v. City & Cty. of

Honolulu, 104 Hawai#i 341, 344, 90 P.3d 233, 236 (2004)).

C. Blight of Summons Damages Calculation

Blight of summons damages calculations are reviewed

under the abuse of discretion standard. Hous. Fin. & Dev. Corp.

v. Ferguson, 91 Hawai#i 81, 92, 979 P.2d 1107, 1118 (1999).

IV. DISCUSSION

HRH and Sheehan present the following questions to

this court:
QUESTION NO. 1.: Must two parcels physically abut in order
for the jury to consider whether they are part of a larger
parcel?

QUESTION NO. 2.: Where there are multiple properties being

condemned from different owners, does statutory interest on
a conditional deposit only accrue after each condemnee
establishes an entitlement to its portion of the deposit?

QUESTION NO. 3.: Does [HRS 101-19] enable a condemnor to

withdraw a portion of its estimate of just compensation
after deposit with the Court and after taking possession of
the property?

A. Sheehans Entitlement to Severance Damages

The defendants claim that the ICA erroneously

concluded that properties must actually abut in order to meet

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the three unities test for severance damages. The defendants

assert that the majority of other jurisdictions treat the unity

of use factor as controlling, and have awarded severance damages

even if the properties are not physically contiguous.

HRS 101-23 (1993) provides in pertinent part:

If the property sought to be condemned constitutes
only a portion of a larger tract, the damages which will
accrue to the portion not sought to be condemned by reason
of its severance from the portion sought to be condemned,
and the construction of the improvements in the manner
proposed by the plaintiff shall also be assessed, and also
how much the portion not sought to be condemned will be
specifically benefited, if at all, by the construction of
the improvement proposed by the plaintiff.

(Emphasis added.) This court has held that the test generally

used by courts to determine whether a parcel to be acquired by

eminent domain proceeding is a part of a larger tract of land to

entitle owners to severance damages is that there must be unity

of title, physical unity and unity of use of the parcel taken

and parcel left. Bonded Inv. II, 54 Haw. at 525, 511 P.2d at

165.

In Bonded Inv. II, the City and County of Honolulu

commenced eminent domain proceedings for the acquisition of Lot

65 of the Maili Beach Lots, and subsequently commenced another

proceeding to acquire Lots 59 and 60. Id. at 524, 511 P.2d at

164. Lot 65 adjoined Lot 59, and Lots 59 and 60 were contiguous

lots. Id. Consequently, the issue decided by this court in

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Bonded Inv. II was whether Lots 65, 59, and 60 comprised one

parcel or tract of land for purposes of severance damages. Id.

Prior to the condemnation proceedings, the owners had

consolidated Lots 57 and 58 into Lot 65 for the purpose of

constructing a condominium apartment building[,] and they

contended that expenses incurred for the condominium project had

enhanced the value of Lot 65. Id.

The Bonded Inv. II court concluded that Lot 65 and

Lots 59 and 60 did not constitute one parcel. Id. at 527, 511

P.2d at 166. This court noted:

[T]he owners not only by choice and design had
separated the use of Lot 65 from Lots 59 and 60, but
also based on the use for which they had committed Lot
65 for a condominium apartment building, attempted to
show that the value of the lot had been enhanced by
the expenses incurred by them for the project.

Id. at 527, 511 P.2d at 166. This court stated that this

factor is controlling here on the question whether Lots 65, 59

and 60 constituted one tract of land. Id. This court only

briefly mentioned the other two unities, stating:

There is no question as to the unity title and
physical unity of the three lots. However, we do not
agree with the owners that these factors make Lot 65
part and parcel of a larger tract of land comprising
Lots 59, 60 and 65 as they contend. Here, as pointed
out above, the uncontradicted evidence is that Lot 65
had been committed by the owners for a condominium
apartment building independent and separate from Lots
59 and 60. Thus, under the record of this case, we
hold that as a matter of law Lot 65 was a separate and
independent lot and not a part of a larger tract or
parcel of land.

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Id.

This court did not address the issue of whether

parcels must physically abut in order to satisfy the three

unities test for severance damages in Bonded Inv. II. More

important, this court has yet to address whether each of the

unities should be treated as essential elements, where it is

necessary to satisfy each of the unities to satisfy the test, or

as factors, where a court is given discretion to consider the

totality of the circumstances.

Here, the ICA has interpreted the three unities as

elements, given that it held that because Parcel 49 and Area 51

were not physically contiguous, the requirements of the three

unities test had not been met. This interpretation appears to

be supported by the general statement of the law, which states

that there must be unity of title, physical unity and unity of

use of the parcel taken and parcel left. Bonded Inv. II, 54

Haw. at 525, 511 P.2d at 165 (emphases added). Employment of

the words must and and suggests that all three unities are

required. Morever, Bonded Inv. IIs conclusion that the three

unities test is not satisfied as a matter of law when just one

of the unities is not present also supports an element-like

approach.

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However, there is also indication that Bonded Inv. II

intended to present the three unities as factors, rather than

elements. The opinion twice refers to the unities as factors.

Bonded Inv. II, 54 Haw. at 527, 511 P.2d at 166 ([T]his factor

is controlling here . . . we do not agree with the owners that

these factors make Lot 65 part and parcel of a larger tract[.]

(emphases added)). More significantly, the court stated that

HRS 101-23 is an enactment of the common law rule established

by courts of other jurisdictions and that the test adopted by

other courts is fair and reasonable and should be followed by

this court. Id. at 525, 511 P.2d at 165. A review of cases

from other jurisdictions shows that the unities are generally

treated as factors and not elements.

One of the cases that Bonded Inv. II cites to is

Barnes v. North Carolina State Highway Commission, 109 S.E.2d

219 (N.C. 1959). Therein, the North Carolina Supreme Court

stated:
There is no single rule or principle established for
determining the unity of lands for the purpose of awarding
damages or offsetting benefits in eminent domain cases. The
factors most generally emphasized are unity of ownership,
physical unity and unity of use. Under certain
circumstances the presence of all these unities is not
essential. The respective importance of these factors
depends upon the factual situations in individual cases.
Usually unity of use is given greatest emphasis.

. . . .

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The general rule is that parcels of land must be contiguous

in order to constitute them a single tract for severance
damages and benefits. But in exceptional cases, where there
is an indivisible unity of use, owners have been permitted
to include parcels in condemnation proceedings that are
physically separate and to treat them as a unit.

Id. at 384, 109 S.E.2d at 225. Barnes clearly describes the

three unities as factors and not as elements. See id.

Several other jurisdictions have also recognized that

where unity of use and unity of title are present, the lack of

physical unity may not be determinative. State ex. rel. Commr

of Dept of Corr. v. Rittenhouse, 634 A.2d 338, 343 (Del. 1993)

([W]hen there is physical separation but unity of use can be

demonstrated, a finding that a single tract existed is

appropriate.); M & R Inv. Co v. State, 744 P.2d 531, 534 (Nev.

1987) (The parcels damaged need not be physically contiguous to

those taken so long as the evidence discloses an actual and

existing unity of use and purpose and an existing, lawful and

utilized access between the parcels. (footnote omitted)); Hous.

Auth. of Norfolk Realty Co., 364 A.2d 1052, 1056 (N.J. 1976)

(The mere fact that the condemned parcel is physically

separated from the remaining parcel does not foreclose a

condemnee from recovering severance damages.); Sauvageau v.

Hjelle, 213 N.W.2d 381, 389 (N.D. 1973) ([T]racts physically

separated from one another may constitute a single tract if

put to an integrated unitary use. . . . Integrated use, not

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physical contiguity, therefore, is the test. (alterations in

original)); State ex rel. Road Commn v. Williams, 452 P.2d 548,

549 (Utah 1969) ([A]n award of severance damages to the

remaining property is appropriate where two or more parcels of

land, although not contiguous, are used as constituent parts of

a single economic unit.); City of Los Angeles v. Wolfe, 491

P.2d 813, 819 (Cal. 1971) (Unity of use if not the controlling

factor is relevant, however, and may be considered where the

properties are not physically contiguous).

Additionally, the Ninth Circuit has held that the

owner of one parcel in fee may be compensated for loss in market

value thereof as a result of the taking of another parcel owned

in fee by him, even if the latter is not contiguous, provided

that, by actual and permanent use, a unitary purpose is served

by both parcels. United States v. Honolulu Plantation Co., 182

F.2d 172, 178-79 (9th Cir. 1950). The Ninth Circuit has

concluded that contiguity is not a requirement because a

condemnee may still be harmed by a taking through a loss of

unitary use of the condemned property. See Cole Inv. Co. v.

United States, 258 F.2d 203, 204 (9th Cir. 1958) (Integrated

use, not physical contiguity, therefore, is the test. (citing

Baetjer v. United States, 143 F.2d 391, 395 (1st Cir. 1944)).

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In sum, the majority of jurisdictions have treated the

unities as factors and not elements, and Bonded Inv. II

expressed an intent to adopt the standard used by other courts.

Accordingly, we hold that when determining whether a claimant is

entitled to severance damages under the three unities test as

articulated in Bonded Inv. II, the three unities should be

evaluated and weighed against one another as factors, and should

not be viewed as essential elements. The unity of use should be

accorded more weight compared to the unity of title and physical

unity. Consequently, a lack of physical unity will not be

dispositive of a condemnees claim for severance damages.

Therefore, the ICA gravely erred to the extent that it applied

the three unities as elements and barred Sheehan from claiming

severance damages as a matter of law because Parcels 49 and Area

51 are not physically contiguous.

However, even under an application of the three

unities as factors, Sheehan is not entitled to severance

damages. None of the three unities are present in this case.

Unity of use, the most important factor to this analysis, has

not been met. Sheehans claim to unity of use is based solely

on the operation of a commercial boatyard. However, Sheehans

permits allowing him to operate the boatyard were revoked in

June 2010, nearly a year before the County instituted the

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condemnation action relevant to this appeal on May 31, 2011.

Sheehan therefore could not have legitimately been using Area 51

as a boatyard when the County condemned Parcel 49. Thus, unity

of use is not present.

Moreover, the other two unities, which are probative

but receive less weight compared to the unity of use factor, are

also not present here. There is no physical unity because

Parcels 33 and 34 separate Parcel 49 and Area 51. Additionally,

there is also no unity of title, because Sheehan does not own

both of the properties that are purportedly two portions of a

larger tract--he retained fee simple title to Parcel 49, but

Patricia Wilcox Sheehan owned and continues to own Area 51.

While Sheehan claims that he has a cognizable property interest

in Area 51 by virtue of the easement that Patricia Wilcox

Sheehan had granted him in 2004, his claim is not valid.

Pursuant to the easement itself, the easement expired when

Sheehans permits to operate the boatyard were revoked.

To conclude, although we elect to interpret the three

unities test articulated in Bonded Inv. II differently than the

ICA, we affirm the ICAs judgment to the extent that it affirmed

the circuit courts order granting summary judgment in favor of

the County on the issue of severance damages. There is no

genuine dispute of material fact that none of the three unities

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are present between Area 51 and Parcel 49. Sheehan therefore

cannot prevail on his claim for severance damages as a matter of

law.

B. Calculation of Blight of Summons Damages

The defendants contend that the ICA erroneously

calculated blight of summons damages based on its conclusion

that blight of summons interest will not accrue until

entitlement thereto is established by a condemnee. The

defendants argue that as the ICA concluded that the deposit was

conditioned on Sheehans agreement to indemnify the County,

there should have been no tolling because there is nothing in

HRS Chapter 101 that requires a condemnee to prove entitlement

in order for interest to accrue on a conditional deposit. The

defendants assert that the ICAs holding should be reversed, and

that they be allowed 5% interest per annum on the $5.8 million

jury verdict from the date of summons to the date that the

County agreed to release the conditional deposit.7 The County

responds that it stands by its position that the trial court did

not abuse its discretion, and while it disagrees with the

7
The defendants actually state that they should be allowed interest
on $4.86 million during this period, but this appears to have been stated in
error. Consistent with the approach they took at the circuit court and the
ICA, it is presumed that the defendants intended this to be $5.8 million.

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conclusion of the ICA, it contends that the difference is not of

a magnitude warranting this Courts further review.8

HRS 101-33 (1993) provides in pertinent part:

If an order is made letting the plaintiff into
possession as provided for in sections 101-28, 101-29,
and 101-32, the final judgment shall include, as part
of the just compensation and damages awarded, interest
at the rate provided in section 101-25 from the date
of the order until paid by the plaintiff; provided
that . . . interest shall not be allowed upon any sum
paid by the plaintiff to the clerk of the court from
the date of the payment.

(Emphasis added.)

Blight of summons damages refers to the

indemnification due a condemnee for the damages resulting from

the governments delay in paying the full cash equivalent of the

property taken on the date of summons. City & Cty. of Honolulu

v. Mkt. Place, Ltd., 55 Haw. 226, 235, 517 P.2d 7, 15 (1973)

[hereinafter Market Place]. Specifically, the purpose of

blight of summons damages is to compensate a condemnee for the

loss of use of the cash equivalent of the taken property[.]

Id. at 237, 517 P.2d at 16.

This court has held that

There are two basic varieties of blight of summons damages
in Hawaii. One arises during the period between the date of
order of possession under HRS 101-28 or 29 and the date
of final payment of just compensation to the defendant, and
consists of interest at the statutory rate of 5% per annum
provided in HRS 101-33 and 25 applied during this period

8
The County notes that the ICAs blight of summons interest
calculation results in an additional $6,419.18 for the defendants.

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to the amount by which the final award of just compensation

exceeds the deposit of estimated just compensation upon
which the order of possession was based. The other arises
during the period between the date of summons and the date
of order of possession, and consists of interest also at a
rate fo [sic] 5% per annum applied during this period to the
final award of just compensation.

Id. at 235, 517 P.2d at 1516 (emphases added) (footnote

omitted) (citations omitted). Although this court referred to

the date of the order of possession in both periods, this

court later used the date of the deposit as the operative date

because HRS 101-33 states that interest shall not be allowed

upon any sum paid by the plaintiff to the clerk of the court

from the date of the payment. Id. at 237, 517 P.2d at 16-17.

Therefore, in Market Place, even though the order of possession

was not issued until after the date that the City and County of

Honolulu (the City) deposited its estimated just compensation

with the court, this court held that the interest on the

unconditional deposit stopped running on the date that it was

deposited, not on the date of the order of possession. Id.

Accordingly, blight of summons damages appear to be calculated

as follows: (1) 5% per annum on the final award of just

compensation from the date of the summons until the date of the

deposit of estimated just compensation, and (2) 5% per annum on

the amount by which the final award of just compensation exceeds

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the amount of the deposit of estimated just compensation from

the date of the deposit until the date of final payment.

In Market Place, this court addressed the blight of

summons interest calculation on sums deposited by the plaintiff

with the court. 55 Haw. at 236, 517 P.2d at 16. The City

commenced eminent domain proceedings on August 25, 1969 for a

parcel of oceanfront property for the purpose of extending a

park. Id. at 227, 517 P.2d at 11. On May 28, 1970, the City

deposited estimated just compensation in the amount of $961,500

with the trial court (first deposit) and on June 5, 1970, the

trial court filed an order of possession for the City, to become

effective on June 20, 1970, and approved the Citys deposit with

the court. Id. at 229, 517 P.2d at 12. The condemnees were

served on June 10, 1970, but did not withdraw the deposit until

June 15, 1970. Id.

On April 14, 1972, the jury determined that just

compensation for the property was $1,036,571.61. Id. On May

19, 1972, prior to the entry of judgment, the City deposited an

additional estimated just compensation in the amount of

$75,071.61 with the court (second deposit), representing the

difference between the jury verdict and the Citys first deposit

of estimated just compensation. Id. at 229-30, 517 P.2d at 12.

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The second deposit was accompanied by a motion to approve the

deposit with the following restriction on distribution:

Plaintiff hereby consents to a court order of distribution
of the additional deposit, provided that such order contain
such protective measures to insure the return of any monies
not lawfully due the distributees together with such
additional interest, damages or charges for wrongful
withdrawal of funds to which distributees may not be
entitled.

Id. at 238, 517 P.2d at 17 (internal quotation marks omitted).

Because certain conditions were attached to this deposit . . .

this sum was not withdrawn by the condemnees until June 2,

1972. Id. at 230, 517 P.2d at 12.

The trial court in Market Place continued the running

of interest on the amount of the first estimate of just

compensation during the time lag of eighteen days between the

deposit of the estimate and withdrawal thereof by the

condemnees. Id. at 237, 517 P.2d at 16. However, this court

held that the trial court erred in this conclusion because the

Citys first estimated deposit was unconditional, and pursuant

both to HRS 101-30 and HRS 101-33:

[I]t appears that there is no obligation on the part of the
condemnor to pay interest to the extent that it makes an
unconditional deposit of estimated just compensation with
the clerk of the court. The City and County made such a
deposit on May 28, 1970, and that is the date on which the
trial court should have stopped the running of interest on
the deposited sum as non-statutory blight of summons
damages. . . . While the deposit was held by the court
pending its further order or orders, this was standard
practice in the course of which the condemnees at any time
could have moved for the withdrawal of the deposited sum
under HRS 101-31. There was, of course, a hiatus of 13

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days between the date of deposit and the date that the order
of possession was served on the condemnees, during which the
condemnees may not have been aware of the existence of the
deposit. However, this appears to be a necessary
consequence of the legislative choice to stop the running of
interest on the date of the payment of a deposit to the
clerk of court rather than on the date of service of the
order of possession. Certainly this gap was not the fault
of the City and County, which made an unconditional deposit
on May 28, 1970. In view of the clear statutory mandate of
HRS 101-33 against the running of interest beyond this
date, the City and County should not have been penalized by
an interest charge for the failure of the condemness [sic]
to demand promptly their right to the deposited estimate.

Id. at 237-38, 517 P.2d at 1617 (footnote omitted).

However, this court concluded that the Citys second

deposit on May 19, 1972 was conditional and that interest

accrued from May 19, 1972 until the second deposit was released

on June 2, 1972. Id. at 238-40, 517 P.2d at 17-18. The court

noted that
[i]t was not until June 2, 1972 that the trial court
released the additional deposit to the condemnees,
with interest computed at the rate of 5% to that date.
The record shows that this delay was a direct result
of the condition noted above and the opposition to
immediate withdrawal voiced by counsel for the City
and County at the hearing on his motion to approve the
deposit.

Id. at 238-39, 517 P.2d at 17. This court held that if a

condemnor could arbitrarily withhold its consent to a

distribution of deposited estimated just compensation, the

condemnees right to interest could be substantially

circumvented. Id. at 239, 517 P.2d at 18. As such, this court

emphasized again that in order to avoid depriving a condemnee of

the use of an additional deposit of estimated just compensation

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made subsequent to an order of possession, money paid by the

plaintiff to the clerk of the court must be unconditionally for

the use of the persons entitled thereto, in order to escape

interest charges under HRS 101-33. Id. at 240-41, 517 P.2d

at 18-19 (citation omitted).

As applied to this case, there has never been a

question at trial or on appeal that the defendants are entitled

to interest of 5% per annum on the $5.8 million jury verdict

from May 31, 2011 (the date of summons) until May 4, 2012 (the

date of the deposit of estimated just compensation). The

contention lies in the period from May 4, 2012 through the date

of final payment.

1. The Initial Deposit Made On May 4, 2012 Was

Unconditional.

The Countys deposit of estimated just compensation

was unconditional when it was initially made with the clerk of

the court. Similar to the first deposit in Market Place, when

the County deposited its estimated just compensation with the

clerk of the court on May 4, 2012, the County did not enumerate

any restrictions or limitations that would have prevented

entitled individuals from withdrawing the funds immediately.

See Market Place, 55 Haw. at 236-37, 517 P.2d at 16-17. Because

entitled condemnees could have withdrawn the funds on the date

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of deposit, the deposit was unconditional, and interest stopped

accruing on the final award of just compensation on that date.

See id. at 237-38, 517 P.2d at 16-17.

2. The Deposit Did Not Become Conditional on

April 5, 2013.

With respect to the Countys first objection to the

defendants motion to withdraw the funds, the defendants assert

that under HRS 101-31, condemnees are not required to prove

their entitlement to compensation prior to receiving the funds.

We disagree. Upon review of HRS 101-31 and our opinion in

Market Place, we agree with the ICA and hold that the deposit

did not become conditional when the County opposed the release

of the estimated just compensation on the grounds that title to

the Parcels was not clear, and that requiring a party to

demonstrate entitlement to the funds does not constitute placing

a condition upon the deposit.

The plain language of a statute is the fundamental

starting point for statutory interpretation. State v. Wheeler,

121 Hawai#i 383, 390, 219 P.3d 1170, 1177 (2009). It is a

cardinal rule of statutory construction that courts are bound,

if rational and practicable, to give effect to all parts of a

statute, and that no clause, sentence, or word shall be

construed as superfluous, void, or insignificant if a

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construction can be legitimately found which will give force to

and preserve all the words of the statute. Camara v. Agsalud,

67 Haw. 212, 215-16, 685 P.2d 794, 797 (1984). This court must

presume that the legislature meant what it said, and is barred

from rejecting otherwise unambiguous statutory language. Sato

v. Tawata, 79 Hawai#i 14, 23, 897 P.2d 941, 950 (1995).

HRS 101-31 (1993) provides, in pertinent part:

Upon the application of the parties entitled thereto
the court may order that the amount of the estimated
compensation or damages stated in the motion and paid
to the clerk of the court, or any part thereof, be
paid forthwith for or on account of the just
compensation to be awarded in the proceedings . . . If
the compensation or damages finally awarded in respect
of the land or any parcel thereof exceeds the amount
of the money so received by any person entitled, the
court shall enter judgment for the amount of the
deficiency.

(Emphases added.) In HRS 101-31, the legislature took care to

explicitly specify not once, but twice, that only entitled

parties may withdraw or otherwise receive funds pursuant to HRS

101-31. It follows that based on the plain language of HRS

101-31, a condemnee who seeks to withdraw a portion of an

estimated just compensation must meet the statutory prerequisite

of being entitled to such funds by showing that he or she has

clear and undisputable title to the condemned property.

Taken together with the principles from Market Place,

it appears that requiring a party to demonstrate that it meets

the statutory prerequisite under HRS 101-31 does not render

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the deposit conditional. As was the case with the first deposit

in Market Place, any delay between the date of the deposit and

the date of withdrawal that is a consequence of an issue as to

whether a party is properly entitled to withdraw the funds is

not the fault of [the County]. 55 Haw. at 238, 517 P.2d at

17. The County therefore should not be penalized by an

interest charge for delays stemming from the condemnees

disputed ability to demonstrate they meet the statutory

precursor to withdrawing funds under HRS 101-31 prior to

seeking the withdrawal of funds thereunder. Id.

Accordingly, a deposit of estimated just compensation

does not become conditional when a condemning authority objects

to a condemnees motion to withdraw funds based on the fact that

the condemnees entitlement to such funds is not clear. The ICA

did not err when it held that until April 5, 2013, any delay in

the availability of deposited funds was not due to conditions

placed by the County upon payment of the money, because it was

not clear which party was entitled to the just compensation[,]

due to the fact that Patricia Wilcox Sheehan had asserted that

she was the owner of the fee simple interests, easements,

rights of way, or the express contingent remainder man [sic], to

all or portions of the real property in her answer to the

Countys first amended complaint.

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3. The Deposit Became Conditional on April 5, 2013.

Although the deposit was initially unconditional when

made, and remained unconditional in the wake of the Countys

first objection to the defendants motion to withdraw the

deposit, the deposit ultimately became conditional on April 5,

2013. On April 5, 2013, Patricia Wilcox Sheehan waived all

claims or interests in the proceeds payable by the County and

consented to the disbursement of the proceeds to the defendants.

At that point, the defendants were clearly entitled to withdraw

and utilize the deposited estimate of just compensation, and

thereby satisfied the statutory prerequisite to receiving funds

under HRS 101-31. See HRS 101-31.

The County did not agree to release the funds until

April 10, 2013, when Sheehan agreed to indemnify the County in

the event that HRH did not repay the County for funds in the

excess of the jury verdict. Consequently, as was the case with

the second deposit in Market Place, there was a delay between

the date that the defendants were rightfully entitled to

withdraw the funds and the date that they ultimately received

them. See 55 Haw. at 238, 517 P.2d at 17. This delay was a

direct result of the condition that the County imposed upon the

release of the funds. Id. at 239, 517 P.2d at 17. Thus, the

ICA did not err when it held: The Countys requirement of an

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assurance that it could recover any excess payment made to HRH

further delayed payment to the Sheehan Defendants, and this

constituted a condition placed upon the deposit of estimated

just compensation.

We therefore hold that a deposit made unconditionally

at the outset may later become conditional if, after the initial

unconditional deposit, the condemning authority opposes the

withdrawal of the deposit to an entitled condemnee by imposing a

subsequent condition upon the withdrawal of the funds. The ICA

explained how our holding rests on sound policy and is necessary

to ensure the integrity of the statutory framework concerning

the right to blight of summons damages when it stated:

The supreme court noted in Market Place that [i]f a
condemnor were free to withhold arbitrarily its
consent to a distribution of an additional deposit of
estimated just compensation, it is evident that the
right to interest under HRS [] 101-33 could be
circumvented in substantial measure. 55 Haw. at 239,
517 P.2d at 18. This statement is equally applicable
in this case to the initial deposit of estimated just
compensation where the County, on the eve of
distribution, required conditions be satisfied to
merit the Countys acquiescence to the payment. The
Countys position would, in effect, allow it to
circumvent HRS 101-29, 101-30, 101-31 and 101-33,
by first depositing estimated just compensation to
stop the running of interest on that amount, but then
also conditioning access to that money by the persons
entitled thereto on the acceptance of protective
measures.

Hanalei River Holdings, 137 Hawai#i at 487, 375 P.3d at 266.

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4. Final Calculation of Blight of Summons Damages

Based on the foregoing, we affirm the ICAs

calculation of blight of summons damages, which is as follows:

(1) 5% interest per annum on the value of the jury verdict

($5.8 million) from May 31, 2011 (the date of the summons) to

May 4, 2012 (the date on which the County initially deposited

the estimated just compensation); (2) 5% interest per annum on

the value of the jury verdict ($5.8 million) from April 5, 2013

(the date that the defendants were entitled to withdraw the

funds) to April 10, 2013 (the date Sheehan agreed to indemnify

the County if HRH failed to repay any money that exceeded the

jury verdict on Parcels 33 and 34) and; (3) 5% interest per

annum on $940,000, reflecting the difference between the

initial deposit and the jury verdict, from April 10, 2013 to

the date upon which the defendants are paid in full.

C. Withdrawal of Estimated Just Compensation

Lastly, the defendants ask this court to decide

whether the ICA erred by holding that a condemnor may withdraw

a portion of its estimate of just compensation deposited with

the court after the condemnor has already taken possession of

the condemnees property. HRS 101-29, -30, and -31 (1993)

state the following regarding estimated just compensation:

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HRS 101-29. Possession pending action; alternative

procedure

Where the plaintiff is the State or any county, the

following alternative procedure may be followed. At
any time after the commencement of an action pursuant
to this part, the State or any county may file a
motion for an order of possession invoking this
section and supported by an affidavit alleging, or by
oral evidence prima facie showing:

. . . .

(3) The sum of money estimated by the State or

county to be just compensation or damages for
the taking of the real property.

Upon such motion and upon payment of such estimated

sum of money to the clerk of the court for the use of
the persons entitled thereto, the court shall issue an
order ex parte putting the State or county in
possession of the real property sought to be condemned

. . . .

HRS 101-30. Order of possession

No order of possession shall issue unless the

plaintiff has paid to the clerk of the court issuing
the order, for the use of the persons entitled
thereto, the amount of estimated compensation or
damages stated in the motion for the issuance of the
order . . . .

HRS 101-31. Payment of estimated compensation;

effect thereof

Upon the application of the parties entitled thereto

the court may order that the amount of the estimated
compensation or damages stated in the motion and paid
to the clerk of the court, or any part thereof, be
paid forthwith for or on account of the just
compensation to be awarded in the proceedings. . . . A
payment to any party as aforesaid shall be held to
constitute an abandonment by the party of all defenses
interposed by the party, excepting the partys claim
for greater compensation or damages. If the
compensation or damages finally awarded in respect of
the land or any parcel thereof exceeds the amount of
the money so received by any person entitled, the
court shall enter judgment for the amount of the
deficiency. The unexpended moneys and any additional
security so deposited with the clerk of the court
shall be available for, or for enforcement of, the
payment of any final judgment awarded by the court.

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These statutes do not expressly give the court

authority to permit a plaintiff to withdraw estimated

compensation once it has already been deposited with the court.

However, HRS 101-19 (1993) grants the court express authority

to allow amendments to condemnation proceedings:

In all proceedings under this part the court shall
have power at any stage of the proceeding to allow
amendments in form or substance in any complaint,
citation, summons, process, answer, motion, order,
verdict, judgment, or other proceeding, including
amendment in the description of the lands sought to be
condemned, whenever the amendment will not impair the
substantial rights of any party in interest.

(Emphases added.)

Because the eminent domain statute does not state

whether the County could or could not withdraw a portion of its

deposited estimated just compensation, the ICA looked to both

Bonded Inv. I and to federal case law for guidance.

In Bonded Inv. I, the City deposited $608,000 as

estimated just compensation for parcel 63, but the jury awarded

only $491,981.28 to the condemnees as just compensation for

parcel 63. 54 Haw. at 388, 507 P.2d at 1087. The circuit court

allowed the condemnees to retain the full amount of estimated

just compensation and disregarded the jurys verdict. Id. As

to this ruling, this court concluded that the circuit court had

erred, and held that after a determination is made on the final

amount of just compensation, any excess deposit must be set off

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against a deposit that is deficient. Id. at 395, 507 P.2d at

1091.

The Bonded Inv. I court observed that although HRS

101-31 only provides for a deficiency judgment for the

condemnee, in the event that the final award exceeds the

estimate [and] HRS makes no provision to cover the situation

where the verdict of the jury is less than the deposited

estimate[,] equitable principles required that the City be

allowed to recover any excess and be awarded blight of summons

damages on that excess. Id. In arriving at this conclusion,

this court cited to United States Supreme Court case law

interpreting the Federal Declaration of Taking Act on a similar

provision:
The purpose of the statute is twofold. First, to give
the Government immediate possession of the property
and to relieve it of the burden of interest accruing
on the sum deposited from the date of taking to the
date of judgment in the eminent domain proceeding.
Secondly, to give the former owner, if his title is
clear, immediate cash compensation to the extent of
the Governments estimate of the value of the
property. . . .

Id. at 393-94, 507 P.2d at 1090 (alteration in original)

(quoting United States v. Miller, 317 U.S. 369, 381-82 (1943)).

The Bonded Inv. I court held:

We find that the [Federal Declaration of Taking Acts]
purpose is similar to the purpose of HRS 101. It is
apparent that the statutes purpose is to avoid undue
hardship by either party caused by protracted
litigation. To hold the City rigidly to its estimate
would penalize the City for utilizing a statutory

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procedure designed to alleviate hardships caused by

the condemnation proceedings. City officials would
tend to make low estimates so as to avoid any
possibility that the deposit is excessive. The result
of such understimation [sic] would be that the City
would be compelled to pay interest on a larger sum
from the date of taking to final award. In effect the
condemnee gets less cash than what he would normally
have received and the City must pay interest on a
larger amount. Clearly, the policy of this statute
cannot be served by such a harsh approach

. . . .

[W]e are of the opinion that an estimate of just

compensation and damages is just that-an estimate. It
was not intended in any manner to be dispositive,
final or binding as a settlement on the amount due.
Its singular purpose is to serve the policy of HRS
101-29-to alleviate the hardship due to the action.
Thus, this estimate has no relevance to the conduct of
the primary eminent domain proceeding to determine
just compensation. It follows also that the estimate
cannot serve as an admission against interest.

Id. at 39495, 507 P.2d at 1090-91 (emphasis added).

Because Bonded Inv. I does not directly address the

question of whether a plaintiff may withdraw a portion of its

deposited estimated just compensation, the ICA looked to federal

case law addressing this same issue under the Federal

Declaration of Taking Act. In 1,997.66 Acres of Land, the

Eighth Circuit Court of Appeals addressed this issue and held

that:
[T]here is nothing in the Declaration of Taking Act,
inconsistent with an exercise of the implied, inherent
authority of the district court to allow the United
States to amend the declaration of taking filed in a
condemnation proceeding, for the purpose of reducing
(or increasing) an erroneous estimate of just
compensation for the land taken, and to permit the
Government to withdraw the excess of the cash
deposited over the revised estimate.

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137 F.2d at 13. Consequently, in light of two established

purposes of the Federal Declaration of Taking Act, which the

court recognized were to minimize the interest burden of the

Government in a condemnation proceeding, and to alleviate the

temporary hardship to the landowner and the occupant from the

immediate taking and deprivation of possession[,] the Eighth

Circuit concluded that

as a matter of fairness and sound practicality, the
right should exist in the Government to amend its
declaration of taking, for the purpose of correcting
an erroneous estimate of just compensation and of
enabling the Government to withdraw any excess of
public funds deposited, in order to apply them to
other uses and to pre vent [sic] waste. The
Declaration of Taking Act ought therefore to be
construed as being consistent with the existence of
such a right, unless this construction will do
violence to the legislative language or to some
substantive right of the landowner, created by the Act
or otherwise existing.

Id. at 11. The Eighth Circuit next addressed the issue of

whether the district court has the authority to refuse to allow

the government to revise its compensation estimate and withdraw

the excess where an error has been made, and held that the court

may refuse the above when either compensation has already been

paid out to the condemnee, or the government is found not to be

acting in good faith. Id. at 14.

The ICA applied this test to the present case, and

concluded that the circuit court did not abuse its discretion in

allowing the County to withdraw $1.03 million of the estimated

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deposit, because (1) estimated compensation had not been

distributed to the defendants at the time the County moved to

amend its estimate, (2) the County was acting in good faith on

an updated appraisal that reflected a current value of the

subject property as of May 31, 2011 (the date of summons), and

(3) the Countys withdrawal of partial estimated just

compensation did not impair the substantial rights of the

defendants.

Given our previous citation to and reliance on federal

law interpreting the Federal Declaration of Taking Act, the ICA

did not gravely err in similarly looking to federal case law

regarding a condemnors right to withdraw a portion of its

estimated just compensation based on an erroneous or outdated

appraisal. The rule adopted by the ICA is consistent with the

purposes of HRS 101-31 expressed by this court in Bonded Inv.

I: avoidance of undue hardship to either party caused by

protracted litigation. Accordingly, we agree with the ICA and

hold that the court in an eminent domain proceeding has the

discretion to permit a governmental entity to withdraw a portion

of a deposit of estimated just compensation when the deposit has

not been disbursed to the landowner, the government acted in

good faith in seeking to adjust the estimate to accurately

reflect the value of the property on the date of the summons,

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and the adjustment will not impair the substantial rights of any

party in interest.

We also agree that under the foregoing rule, the

circuit court in the present case did not abuse its discretion

by permitting the County to withdraw a portion of the deposit of

estimated just compensation. The County moved to withdraw the

funds before the funds had been disbursed to the defendants.

Moreover, the County was acting in good faith when it moved to

withdraw the portion of the deposit, as its motion was based on

an updated appraisal of the properties value, which HRH had

impliedly requested when HRH had challenged the Countys initial

appraisal as being stale as a matter of law. Finally, the

defendants burden of having their properties condemned was

alleviated because they were able to withdraw $4.6 million prior

to the final determination of just compensation. The defendants

were further awarded blight of summons damages, and thus

received full just compensation under the law.

Therefore, the circuit court did not abuse its

discretion when it permitted the County to withdraw $1,030,000

from the amount that it had deposited with the clerk of the

court in light of the second appraisal of the properties value.

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V. CONCLUSION

For the foregoing reasons, we affirm the ICAs May 11,

2016 judgment on appeal, which affirmed the circuit courts

April 25, 2014 final judgment as to all claims and all parties,

but on different grounds with regard to the defendants

entitlement to severance damages.

Richard E. Wilson /s/ Mark E. Recktenwald

for petitioners
/s/ Paula A. Nakayama
Mauna Kea Trask,
Rosemary T. Fazio, /s/ Sabrina S. McKenna
and James K. Mee
for respondent /s/ Richard W. Pollack
County of Kaua#i
/s/ Michael D. Wilson

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 NOTICE OF ELECTRONIC FILING

Electronically Filed
Supreme Court
SCWC-14-0000828
16-MAY-2017
08:20 AM
An electronic filing was submitted in Case Number SCWC-14-0000828. You may review the filing through the Judiciary Electronic Filing System. Please monitor your email for
future notifications.

Case ID: SCWC-14-0000828

Title: County of Kauai, Respondent/Plaintiff-Appellee, vs. Hanalei River Holdings, Ltd., a Cook Islands corporation, Michael
Guard Sheehan, Petitioners/Defendants-Appellants, and Patricia Wilcox Sheehan, as Trustee of that certain unrecorded
Revocable Trust Agreement of Patricia Wilcox Sheehan, dated December 21, 1994, Patricia Wilcox Sheehan, Gaylord H.
Wilcox, Daniel H. Case, Grove Farm Company, Inc., a Hawaii corporation, Hugh W. Klebahn, Donn A. Carswell, Pamela
W. Dohrman, Robert D. Mullins, William D. Pratt, Randolph G. Moore, and the Heirs and/or Assigns of John B. Brosseau,
also known as John Brosseau, John B. Brasseau,and J.B. Brasseau, Respondents/Defendants-Appellees, and John Does 1-
200, Doe Partnerships 1-25, Doe Corporations 1-25, Doe Entities 1-25, and Doe Governmental Units 1-25, Defendants.
Filing Date / Time: TUESDAY, MAY 16, 2017 08:20:52 AM
Filing Parties:
Case Type: Appln for Writ of Certiorari
Lead Document(s): Opinion Affirming ICA
Supporting Document(s): Opinion Affirming ICA

If the filing noted above includes a document, this Notice of Electronic Filing is service of the document under the Hawai`i Electronic Filing and Service Rules.

This notification is being electronically mailed to:

Mark Motojuro Murakami ( [email protected] )
Robert H. Thomas ( [email protected] )
Alfred B. Castillo ( [email protected] )
Rosemary T. Fazio ( [email protected] )
Lorna A. Nishimitsu ( [email protected] )
James K. Mee ( [email protected] )
Richard E. Wilson ( [email protected] )

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Mauna Kea Kaukaohu Higuera-Trask ( [email protected] )

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