What do you call an appeal in which the Supreme Court doesn’t address any of your five questions presented?
If you are the petitioner’s attorneys in Save Diamond Head Waters LLC v. Hans Hedemann Surf, Inc., No. 27804 (July 13, 2009), you’d call it “victory.”
In that case — which was being considered by the Hawaii Supreme Court on secondary cert review — the petitioners asserted the Intermediate Court of Appeals “gravely erred” (see Haw. Rev. Stat. § 602-59(b)(1)) when it held the Director of the Honolulu Department of Planning and Permitting was within his authority when he concluded a surf school’s use of a space in a hotel lobby would be a valid nonconforming use if the school adhered to certain conditions imposed by the Director.
Usually, cases about nonconforming uses aren’t exactly the most interesting to read. Commonly known as “grandfathering,” and with an origin in theory of vested rights, the law of nonconforming uses is concerned with the scope and nature of a use, the changes to that use over time, and the details of the ordinance governing loss of use and phase-out. The Save Diamond Head Waters case is a bit more interesting, however, since it involves property on the Waikiki Gold Coast at the foot of Diamond Head, and the use at issue reminds us of a business where Elvis might have worked during his Blue Hawaii phase, a surf school.
A Waikiki hotel was constructed in the early 1950’s on land presently zoned for apartment uses, but was legally operating as a nonconforming use because the hotel use predated the apartment zoning. One of the lobby spaces was used as one of those typical hotel lobby shops and this use was considered a legal accessory use to the hotel use. Under Hawaii law, the state Zoning Enabling Act, Haw. Rev. Stat. § 46-4 requires the counties in their exercise of their zoning authority to recognize certain uses as nonconforming:
Neither this section nor any ordinance enacted pursuant to this section shall prohibit the continued lawful use of any building or premises for any trade, industrial, residential, agricultural, or other purpose for which the building or premises is used at the time this section or the ordinance takes effect; provided that a zoning ordinance may provide for elimination of nonconforming uses as the uses are discontinued, or for the amortization or phasing out of nonconforming uses or signs over a reasonable period of time in commercial, industrial, resort, and apartment zoned areas only. In no event shall such amortization or phasing out of nonconforming uses apply to any existing building or premises used for residential (single-family or duplex) or agricultural uses.
There are all sorts of nuances in the doctrine of nonconforming uses, but the basic concept is pretty simple — you can’t change the rules on someone in the middle of the game, so even though the law may change, it cannot immediately outlaw existing uses of property.
Over time, the lobby shop was used by the hotel to rent out beach and ocean equipment, but eventually, the hotel rented out the space to the surf school. According to the opinion, the “record is unclear when the Hotel’s use of Shop #7 ended and its use for commercial purposes began.” Slip op. at 23 (quoting ICA opinion). The surf school presently uses the lobby shop as an assembly point for its customers, who are brought in from other locations by shuttles.
Neighbors objected to the school’s use, complaining of the usual problems: “noise, congestion, parking issues, vandalism, trespassing and ‘other ills[.]'” ICA opinion at 6. The Save Diamond Head Waters group petitioned the Director for a ruling, asserting the use as a surf school expanded the nonconforming use, or was a change in use from the previous use of the lobby shop, to a place where hotel guests could rent surf boards, kayaks and other beach equipment.
The Director determined among other things that the school was allowed to operate as a nonconforming use even though its character had changed from a shop to an assembly point for the surf school because the effects of the use hadn’t changed (provided the surf school adhered to the Director’s limits about class size and number of students). The Honolulu Land Use Ordinance provides that a nonconforming is permitted to continue even if its actual use changes, provided certain conditions use may change, provided the new use is of the “same nature and general impact.”
SDHW appealed to the Zoning Board of Appeals, which affirmed, and then appealed the ZBA’s decision to the circuit (trial) court, which vacated the ZBA’s decision. The ICA reversed and upheld the authority of the Director to issue declaratory rulings, and as part of that authority could inform the school what uses would keep it within nonconforming status.
SDHW applied for a writ of certiorari to the Hawaii Supreme Court (oral arguments posted here), and presented five questions for review, all of them quite naturally dealing more or less with the issue the ICA considered: does the Director’s authority include telling the surf school what it needed to do to remain a valid change in a nonconforming use? See slip op. at 2.
Wait a minute, said the Supreme Court, “we need not consider any of SDHW’s additional arguments.” Slip op. at 24. Why? Because in order to change a nonconforming use, you had better not have already discontinued the nonconforming use:
It logically follows that once a nonconforming use is terminated there can no longer be a change in nonconforming use based on the terminated use.
. . .
[T]he party arguing for a change in nonconforming use bears the burden to demonstrate that the prior nonconforming use (1) was an original conforming use of the premises that was established before the change in zoning; or (2) was the result of a valid change in nonconforming use from a prior valid nonconforming use; and (3) neither the original nonconforming use nor the prior nonconforming use has been discontinued.
Id. at 21. The court then looked at the Record and determined the surf school had never introduced evidence that the prior use of the space as a shop was a valid nonconforming use. Id. at 22 (“the Surf School did not meet its burden to prove that there was a legally established prior nonconforming accessory use of Shop #7”). The court concluded that lacking evidence, the Director’s finding of fact was clearly erroneous.
Bottom line lessons: (1) sometimes, even when you make arguments that are ignored by the appellate court, you win; (2) don’t assume an appellate court which has the ability to control its docket is too busy to question the assumptions that the courts, parties, and agencies below relied on; (3) if you don’t make your factual record when you have the burden of proof, it could come back to haunt you.