LIHUE — The U.S. Supreme Court has delivered a ruling that could impact how Kauai property owners pursue disputes.
The June 21 decision in Knick v. Township of Scott, Pennsylvania, overturned a 1985 Supreme Court ruling that prohibited property owners from taking their property-rights disputes directly to the federal level instead of going through state and local courts as the first courses of action. Plaintiffs still have the opportunity to pursue cases at the state level first if they so choose.
It came just days after the Kauai County Council passed Bill 2746, which will allow the county to place liens on property deemed in violation of county zoning ordinances after posting violation orders at the location, or by publishing a notice in the newspaper. A lien can be placed on any property that has not paid fines or corrected an alleged violation within 90-days, after being signed off on by the county attorney.
Planning Director Ka‘aina Hull does not see Bill No. 2746 — which makes no reference to illegal transient vacation rentals — conflicting with the Knick v. Township ruling by the Supreme Court.
“The enforcement bill has nothing to do with eminent domain, or even taking,” Hull said. “It’s all about enforcement.”
Hull said that Bill No. 2746 applies to technically any violation of the zoning ordinance.
“It’s a measure of last resort,” Hull said. “It’s only after we issued a notice of violation which has fines in it, so the enforcement team goes through a fairly rigorous process. We’re required under state law to put all property owners under notice that they have a violation before even attempting to fine them or go after any full litigious legal action against them. We just put them on notice and the vast majority of people we put under notice come into full compliance.”
Hull said that at the end of the day government authority functions within the system of democratic checks and balances.
“As anybody tasked with enforcing laws and given enforcement powers, the potential for abuse is going to be there,” Hull said. “The department has had the authority to levy up to $10,000 fines per day on violations for several years.”
Hull added that the planning department goes through a very exhausting process to bring properties into compliance and that compliance is the department’s purpose.
“We’re not out there acting in a vindictive or punitive manner, our main purpose is to bring properties into compliance and we find in the vast majority of scenarios where properties owners are put on notice, they do come into compliance,” Hull said.
One property owner, Betsy Rigatti and her husband Steve, who reside in California and purchased a house in Haena in 2014, lost their permit for operating a legal transient vacation rental after allegedly filing their permit renewal application 20 hours late after the April 17, 2018, deadline. The Rigattis were using Na Pali Properties Inc. as their property managers and claim the company was afflicted by a federal disaster at that time and were unable to drive to the planning department from Hanalei due to the historic flooding.
According to Betsy, the husband and wife did not hesitate after their permit was pulled to hire attorney Greg Kugle with the Damon Key Leong Kupchak Hastert ALC.
“We immediately retained an attorney within a few weeks of hearing that his was all this was going down,” Betsy said. “We weren’t even on island when all of this was happening. We weren’t there for the flood, we weren’t there for the problem with the license, any of that stuff. So, we just found out through our property manager and the county through a cease and desist letter that finally came.”
Betsy alleges her and her husband had to ask the county for the letter after a few weeks had gone by.
“As a TVR licensed holder, you can”t renew your license online,” Betsy said. “You can pay your property taxes, but you can’t renew your license online. The county is purposely wanting to get rid of all TVRs on island.”
Greg Kugle, the attorney representing the Rigattis and a half dozen other Kauai plaintiffs, has a scheduled conjoined hearing on Kauai involving six separate cases that were filed prior to the Knick v. Township ruling in state court on Aug. 6, 2019.
“There’s six cases that will be decided that day or shortly thereafter in terms of whether those decisions violated county law, state law, state constitution,” Kugle said of his current pending administrative appeal cases. “The county has done two things. It will go through an administrative process where it will issue a forfeiture letter, or a cease and desist letter where they claim somebody can no longer rent their property, but they’re entitled to due process.”
Kugle anticipates the recent Knick v. Township ruling will lead to more lawsuits filed against the county in the coming months.
“I do anticipate that the county will be sued more,” Kugle said. “And I anticipate the county will be sued in federal court in Honolulu rather than in state court on Kauai.”
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Ryan Collins, county reporter, can be reached at 245-0424 or rcollins@thegardenisland.com.
