Leone v. County of Maui.
SCAP-15-0000599
| Haw. | Oct 16, 2017Background
- Douglas and Patricia Leone bought a Makena (Maui) beachfront lot (Lot 15) in 2000 intending to build a single-family home but were unable to obtain permits because the Kihei‑Makena Community Plan designated the parcel as "park" while zoning allowed hotel/multifamily and a recorded Declaration of Covenants restricted uses to single‑family residential.
- The County’s Planning Director returned the Leones’ SMA (Special Management Area) assessment application as inconsistent with the community plan and declined to process it unless a community plan amendment was filed.
- The Leones sued (2007) for inverse condemnation (state and federal), §1983 claims, and punitive damages, alleging a regulatory taking that deprived them of all economically beneficial use; the trial court initially dismissed for lack of ripeness but the ICA reversed and remanded.
- At a 2015 jury trial the court instructed the jury that the Director’s refusal effectively precluded processing and therefore prevented construction of a single‑family residence; the jury found the County did not deprive the Leones of economically beneficial use.
- The Leones challenged expert testimony (that “investment use” counts as economically beneficial use), several jury instructions (including burden‑shifting and effect of private covenants), denial of judgment as a matter of law, and award of costs; the Hawai‘i Supreme Court affirmed the trial court in all respects.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the County’s land‑use actions constituted a regulatory taking (deprived all economically beneficial use) | Leones: community‑plan inconsistency and director’s refusal left lot unusable for development or investment, so a taking occurred | County: property retained economically beneficial use (investment value and possible commercial/park uses); regulations are not absolute and other owners built by pursuing permits | Court: Jury reasonably found evidence of remaining economically beneficial use (investment and potential commercial uses); no taking established |
| Whether testimony that “investment use” is an economically beneficial use was admissible | Leones: investment is not a cognizable economically beneficial use as a matter of law; appraiser not qualified on use | County: value/use evidence is relevant; appraiser (Yamamura) qualified by long appraisal experience determining highest and best use | Court: Admissible. Investment/value evidence is relevant and expert was qualified; court mitigated risk by instructing jury on difference between value and economically beneficial use |
| Whether trial court erred by rejecting burden‑shifting instruction (plaintiff produces lack of use, then burden shifts) | Leones: once plaintiffs produce evidence they lack economically beneficial use, burden of production shifts to County to show plausible alternative use | County: burden‑shifting instruction would confuse jury in a jury trial and misstate procedure; plaintiffs retain burden to prove elements by preponderance | Court: No error. Proposed instruction misstated law and risked juror confusion; court properly instructed plaintiffs bear preponderance burden |
| Whether jury should have been instructed about effect of private restrictive covenants (DCR limiting use to single‑family) | Leones: DCR restricts permissible uses and must be considered in takings analysis | County: government action is the relevant focus; private agreements do not alter takings inquiry | Court: No error. No controlling authority required an instruction on private covenants; takings analysis centers on government action, not private restrictions |
Key Cases Cited
- Lucas v. S.C. Coastal Council, 505 U.S. 1003 (1992) (regulatory taking occurs when regulation denies all economically beneficial use; regulations forcing land to remain in natural state raise heightened taking risk)
- Palazzolo v. Rhode Island, 533 U.S. 606 (2001) (where regulation falls short of eliminating all beneficial use, takings analysis requires Penn Central balancing: economic effect, investment‑backed expectations, character of government action)
- Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104 (1978) (multi‑factor test for regulatory takings: economic impact, interference with reasonable investment‑backed expectations, and character of government action)
- Murr v. Wisconsin, 137 S. Ct. 1933 (2017) (takings adjudication is fact‑specific; purpose of Takings Clause is to avoid forcing unique public burdens onto particular owners)
- Del Monte Dunes at Monterey, Ltd. v. City of Monterey, 526 U.S. 687 (1999) (takings fact questions are for the jury in actions at law; value evidence relevant but cannot alone resolve economically viable use)
- Public Access Shoreline Hawai‘i v. Hawai‘i County Planning Commission, 79 Hawai‘i 425, 903 P.2d 1246 (1995) (recognizes regulatory takings concept under Hawai‘i law)