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                                                              Electronically Filed
                                                              Supreme Court
                                                              SCAP-15-0000599
                                                              16-OCT-2017
                                                              09:19 AM




           IN THE SUPREME COURT OF THE STATE OF HAWAI#I

                                 ---O0O---


           DOUGLAS LEONE and PATRICIA A. PERKINS-LEONE,
     as Trustees under that certain unrecorded Leone-Perkins
         Family Trust Dated August 26, 1999, as amended,
              Plaintiffs-Appellants/Cross-Appellees,

                                    vs.

          COUNTY OF MAUI, a political subdivision of the
       State of Hawai#i; WILLIAM SPENCE, in his capacity as
  Director of the Department of Planning of the County of Maui,
              Defendants-Appellees/Cross-Appellants.


                            SCAP-15-0000599

       APPEAL FROM THE CIRCUIT COURT OF THE SECOND CIRCUIT
            (CAAP-15-0000599; CIVIL NO. 07-1-0496(2))

                            OCTOBER 16, 2017

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

                OPINION OF THE COURT BY NAKAYAMA, J.

                            I.   INTRODUCTION

          Over seventeen years ago, Plaintiffs-Appellants/Cross-

Appellees Douglas Leone and Patricia A. Perkins-Leone
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(collectively, the Leones) bought a beachfront lot in Makena,

Maui with the expressed intent of building a family house on it.

Today the house has not yet been built, and the Leones contend

that the County of Maui’s land use regulations and restrictions

prevented them from doing so.       In 2007, the Leones filed suit

against Defendants-Appellees/Cross-Appellants County of Maui and

William Spence, in his capacity as Director of the Department of

Planning of the County of Maui (collectively, the County),

asserting, among other counts, that the County’s actions

constituted a regulatory taking for which the Leones were

entitled just compensation.      On May 5, 2015, a jury delivered a

verdict in favor of the County.

            This case requires this court to decide, inter alia,

whether the County’s land use regulations constituted a

regulatory taking of the Leones’ property.         But we do not decide

on a blank slate.    The jury determined that the County did not

deprive the Leones of economically beneficial use of their

property.    We conclude that there was evidence to support the

jury’s verdict in favor of the County.         As such, we affirm the

Circuit Court of the Second Circuit’s (circuit court):            1) June

1, 2015 judgment in favor of the County and against the Leones,

2) August 5, 2015 order denying the Leones’ renewed motion for

judgment as a matter of law or, in the alternative, motion for a

new trial, and 3) August 5, 2015 order granting in part and

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denying in part the County’s motion for costs.

                              II.   BACKGROUND

             In 1996, the Maui County Council (county council)

adopted Resolution No. 96-121, authorizing the Mayor to acquire

nine beach lots at Palau#ea Beach in Makena, Maui for the

creation of a public park.       The county council noted that

Palau#ea Beach was “one of the last undeveloped leeward beaches

on Maui” and that the community supported the creation of a beach

park.     Because of budgetary constraints, the County was able to

buy only two of the nine lots (Lots 18 and 19), and the seven

remaining lots were sold to private individuals.

             The beach lots were subject to the following

regulations and designations:

             1)   The 1998 Kihei-Makena Community Plan (the community

plan), which designated the lots as “park” land.            Maui Cty.,

Kihei-Makena Community Plan 59 (1998).          This designation “applies

to lands developed or to be developed for recreational use.”                 Id.

             2)   A Special Management Area (SMA) designation

pursuant to the Hawai#i Coastal Zone Management Act (CZMA).              Any

development within an SMA is prohibited unless the developer

applies for and receives an SMA permit.1          Hawai#i Revised


      1
            More specifically, under the CZMA, “development” does not include
the “[c]onstruction of a single-family residence that is not part of a larger
development.” HRS § 205A-22 (2001). However, if the “authority finds that
any excluded use . . . may have a cumulative impact, or a significant
                                                                (continued...)

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Statutes (HRS) §§ 205A-21 and 205A-26 (2001).

            3)   A “Hotel-Multifamily” zoning designation, which

permits, inter alia, the building of single-family residences.

            4)   A Declaration of Covenants and Restrictions (the

declaration), which states, “[a] lot shall be used only for

single family residential purposes regardless of whether the

applicable zoning would permit a more intensive or different

use.”

            In February 2000, the Leones bought one of the lots

(“Lot 15" or “the property”) for $3.7 million.           The Leones

initially relisted the property for $7 million and, in 2002, they

received two offers for its purchase,2 which the Leones refused.

            Four years after buying Lot 15, the Leones hired a land

use planning firm, Munekiyo & Hiraga, Inc. (Munekiyo), to prepare

a draft environmental assessment (DEA) of Lot 15 so that they

could eventually apply for SMA and development permits to build a

single-family residence.       As part of the environmental assessment

process, Munekiyo sent out an early consultation letter, seeking

comments from governmental agencies and non-profits on the

Leones’ proposed development of Lot 15.          In this letter, Munekiyo



      1
       (...continued)
environmental or ecological effect on a special management area,” then the
excluded use, including the construction of a single-family residence, “shall
be defined as ‘development’ for the purpose of this part.” HRS § 205A-22.

      2
            The offers were for $4.5 million and $4.6 million.

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described the property and the development plan as follows:
                 The parcel is located within the “Urban” district, is
           zoned Hotel “H-M” by the County of Maui and is designated as
           “Park” under the Kihei-Makena Community Plan. The owner
           intends to file a community plan amendment and change in
           zoning application with the County of Maui, Department of
           Planning for review by the Maui Planning Commission, and
           final action by the Maui County Council to achieve land use
           consistency for the parcel. Since a community plan
           amendment will be sought, the applicant will submit a Draft
           Environmental Assessment (DEA) in accordance with Chapter
           343, Hawaii Revised Statutes (HRS).

           On May 20, 2004, the County of Maui’s Department of

Planning (the Department) sent Munekiyo comments in response to

the early consultation letter.       The Department initially noted

that “the proposed action requires a Community Plan Amendment

which therefore triggers Chapter 343, HRS.”          The Department then

provided the following comments:
           1. Provide a view analysis from Makena-Keoneolo Road. The
           analysis should assume a 60% buildable area and 40% open
           view corridor for the property and address impacts of the
           structure’s massing.
           2. The Erosion Rate for the Property is approximately one
           foot per year. As such, the shoreline setback area is
           calculated as 60 feet from the certified shoreline.
           3. Lateral access along the shoreline shall be provided.
           4. In addition to the applications for a Community Plan
           Amendment and Change in Zoning, the proposed action requires
           a Special Management Area assessment.

           On June 3, 2004, the Leones directed Munekiyo to stop

work on the project.     In an intra-office email, Munekiyo

explained why the Leones instructed the firm to halt work on the

project:
                 I received a call from Doug Leone this morning. He
           asked that we stop work and close the project. He felt that
           the political climate is much too difficult to be seeking
           any land use entitlements for the property. He was not
           willing to accommodate a 40% road frontage view corridor and
           felt that it would be better for him to just hold on to the


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            property for now.

            In 2007, the Leones restarted the permitting process

and Munekiyo submitted the SMA assessment application to the

Department on September 28, 2007.          One month later, the

Department sent a letter declining to process the SMA application

with the following explanation:
                  The subject property is designated “Park” on the
            Kihei-Makena Community Plan (Community Plan). The proposed
            Single-Family dwelling is inconsistent with the Community
            Plan. An application for a Community Plan Amendment was not
            submitted concurrent with the subject application.

                  Section 12-202-12(f)(5) states that an application
            “cannot be processed because the proposed action is not
            consistent with the County General Plan, Community Plan, or
            Zoning, unless a General Plan, Community Plan, or Zoning
            Application for an appropriate amendment is processed
            concurrently with the SMA Permit Application.”

The letter further explained that, in order for the Leones to

proceed, they would have to file a new application consistent

with the community plan and with the appropriate submittals.

A.    Initial Circuit Court Proceedings3

            On November 19, 2007, the Leones filed a lawsuit

against the County, alleging that, because of the County’s

actions, the Leones were left with no economically viable use of

their property.      The Leones brought five counts against the

County:    1) inverse condemnation pursuant to article I, section

20 of the Hawai#i Constitution, 2) inverse condemnation pursuant

to the Fifth and Fourteenth Amendments of the United States


      3
            The Honorable Joseph E. Cardoza presided over the initial circuit
court proceedings.

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Constitution, 3) equal protection violation pursuant to 42 U.S.C.

§ 1983, 4) substantive due process violation pursuant to 42

U.S.C. § 1983, and 5) punitive damages under 42 U.S.C. § 1983.

The Leones asserted that the County was required to provide the

Leones with just compensation for their property, and that they

were also entitled to punitive damages in the amount of $50

million.

            The County filed a motion to dismiss, which the circuit

court granted on March 2, 2009.         The circuit court determined

that “there [were] effective remedies still available” to the

Leones, such as proceeding with a new application with

appropriate submissions, seeking an amendment to the community

plan, or applying for a special management use permit pursuant to

the provisions of HRS §§ 12-202-13 and 12-202-15.             Because

“effective remedies” were still available to the Leones, the

circuit court concluded that the Leones had “failed to exhaust

their administrative remedies.”         As such, the circuit court ruled

that the case was “not ripe for adjudication” and that the

circuit court lacked jurisdiction over the subject matter of the

case.

B.    Initial ICA Proceedings

            The Leones appealed this decision and on June 22, 2012,

the Intermediate Court of Appeals (ICA) published an opinion

which vacated the circuit court’s judgment and remanded the case

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for further proceedings.      See Leone v. Cty. of Maui, 128 Hawai#i

183, 284 P.3d 956 (App. 2012) (Leone I).         The ICA concluded that

the circuit court erred in determining that it lacked subject

matter jurisdiction because the Leones’ claims were not ripe for

adjudication.   Id. at 196, 284 P.3d at 969.         The ICA specifically

determined that the Department’s letter, which declined to

process the Leones’ SMA assessment application, satisfied the

finality requirement for ripeness, and that the Leones were not

required to seek a change in the community plan, which amounted

to seeking a change in the existing law, before they could bring

their inverse condemnation claims.        Id. at 193-96, 284 P.3d at

966-69.

          Of import to the proceedings on remand, the ICA

commented in a footnote on the inconsistencies of the Maui County

permitting process:
          [T]he proposed use - the construction of single-family
          residences - is not considered a “development” under the
          CZMA unless the authority finds a cumulative impact or
          significant environmental effects. HRS § 205A-22. Although
          the CZMA does not expressly require consistency for proposed
          land uses that are not considered “developments,” the Maui
          County Code (MCC) renders the Community Plan binding on all
          county officials. MCC 2.80B.030(B)(2006). Under the
          express language of the code, neither the director nor the
          Planning Commission may approve land uses that are
          inconsistent with the Kihei-Makena Community Plan. The
          language of the SMA Rules comports with this outcome,
          stating in mandatory terms that “the director shall make a
          determination . . . that the proposed action either: . . .
          (5) Cannot be processed because the proposed action is not
          consistent with the county general plan, community plan, and
          zoning[.]” SMA Rule 12-202-12(f) (emphasis added). In any
          case, the Director’s decision that Appellants’ assessment
          applications could not be processed had the same effect as a
          determination that it was a development. If, because of a
          “cumulative impact or a significant environmental or


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            ecological effect,” a single-family residence is considered
            a development, then an SMA permit would be required. If a
            permit were required, it could not be approved because it
            would be inconsistent with the Community Plan. Thus,
            regardless of the denomination of the assessment
            application, the Director’s determination of inconsistency
            with the Community Plan precludes further processing under
            applicable law.

Id. at 194 n.8, 284 P.3d at 967 n.8 (alterations in original)

(citations omitted).       Accordingly, the ICA vacated and remanded

the case to the circuit court for further proceedings.              Id. at

196, 284 P.3d at 969.4

C.    Circuit Court Proceedings on Remand5

            A jury trial was held from March 30 through May 5, 2015

on the same five counts.6       During opening statements, the Leones

showed the jury a tax map that depicted the Palau#ea Beach

properties and explained who owned them and how they were

developed:
                  And these are the present owners of properties. The
            north end of the beach you have Mr. Sweeney and Mr.
            Lambert’s properties. They have homes on them today, and
            the reason why they have homes on them, we’ll explore in
            more detail.
                  This is the Leones’ property. It has a path on it
            leading from Old Makena Road to the beach that is used every
            day by members of the public.
                  This is the Larsons’ properties. These two lots are
            owned by Bill and Nancy Larson. This parcel, Lot 52, is now
            being built upon, and the reasons why Mr. Larson got



      4
            On October 29, 2012, the County applied for a writ of certiorari
to this court, which was denied on December 12, 2012. Leone v. Cty. of Maui,
No. SCWC-29696, 2012 WL 6200401 (Haw. Dec. 12, 2012).

      5
            The Honorable Peter T. Cahill presided.

      6
            Prior to the start of the jury trial, the circuit court entered an
order granting the County’s motion for summary judgment as to Count V of the
Leones’ complaint, which asserted a claim for punitive damages pursuant to 42
U.S.C. § 1983. As such, only counts I-IV proceeded to the jury trial.

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          approval to build on his property we’ll go in to also.
                These two lots in the middle of the beach are owned by
          the County. The County bought them for beach-park purposes
          back in the end of 1999, but never improved the property. .
          . .
                This property is owned by Mr. Altman. This next
          property is owned by an associate of Mr. Leone’s named Dan
          Warmhoven, Galando, and Luzco, and these three properties
          are on the rocky point at the south end of the beach, and
          they’re improved with homes on them today.

          According to the Leones, the shifting political climate

on Maui was the reason why some landowners at Palau#ea Beach were

allowed to build homes on their properties, while the Leones were

denied that same right:
                Under Mayor Apana’s administration, some of the other
          lot owners were able to get those approvals. They got SMA
          Assessment Applications filed. The exemptions were granted
          by Planning Director Min, building permits were issued, and
          they went forward and started building their homes; Lambert
          and Sweeney among others.
                After Mayor Arakawa took office, during his first
          administration, he appointed a new Planning Director named
          Michael Foley, and within eight days after taking office,
          Planning Director Foley announced there would be no more
          approvals for homes at Palauea Beach and stopped granting
          extensions at Palauea.

The Leones contended that it was at that time that they sought to

obtain permits for building a single-family residence on their

property, after Mayor Arakawa took office and the new Planning

Director decided to stop development at Palau#ea Beach.            The

Leones further explained that after Mayor Arakawa took office for

the second time, the policy shifted again, but it was too late

for the Leones to build at that point:
                Now, after Mayor Arakawa takes office for the second
          time, the political winds shift again, and beginning in
          2012, the current Arakawa administration begins granting
          approvals to some of the other lot owners to build.
                The problem from the Leones’ perspective is that in
          September of 2011, there was a 40-year storm off of New


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            Zealand, which came up over the coastal dunes and into their
            property and left debris much further inland than it had
            been before. The debris line creates a shoreline, and since
            the debris line came so much farther inland than it had
            before, the Leones were unable to build. 7

As such, the Leones contended that the “effect of the County’s

actions was to deprive the Leones of all economically viable use

of their land.”

            For its part, the County presented the following

opening argument:
                  The County submits that the evidence in this case is
            not going to show that the Leones were denied the right to
            build on their lot. The evidence in this case is going to
            show that they did not want to go through the same process,
            the difficult process that each of the other seven lot
            owners out here who have single family residences on their
            lot went through. That’s why we’re here today.

                  . . . .

                  Regulations are not inflexible. We’ve got seven other
            lot owners out there who are, again, living in very
            luxurious single family homes. They dealt with these
            regulations. They built on the lot. There’s a guy out
            there building now.

            The testimony during trial focused almost exclusively

on two distinct but interrelated inquiries:           1) whether the

County’s regulations prevented the Leones from building a single-

family residence, and 2) if so, whether this deprived the Leones

of economically beneficial use of their property.            As to the


      7
            The Leones contended that they applied for a shoreline
certification on January 10, 2014, but that they were informed by the
Department of Land and Natural Resources (DLNR) of this court’s recent opinion
in Diamond v. Dobbin, 132 Hawai#i 9, 29, 319 P.3d 1017, 1037 (2014), which
required DLNR to “consider historical evidence” in making its shoreline
determination. The Leones contended that, because of the 2011 storm and this
court’s decision in Diamond, the shoreline setback on the property would have
overlapped the front yard setback, leaving no buildable area on the property.
At this point, the Leones withdrew their shoreline certification application.

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first query, the circuit court ultimately instructed the jury

that the County’s actions had prevented the Leones from building

a house on their property:
                 Ladies and gentlemen, at an earlier point during the
          trial, I read to you the law as you must apply in this case.
          I’m going to read three additional portions of the law that
          you must apply to the facts of this case.
                 The first instruction to you is as follows: Following
          an appeal at an earlier stage of this case, the Hawaii
          Intermediate Court of Appeals issued an opinion entitled
          Leone, et al., vs. County of Maui, et al. That opinion is
          the law of this case and is binding on the parties and this
          Court.
                 Second instruction. In the Leone opinion, the
          Intermediate Court of Appeals stated as follows: The
          language of the SMA Rules state in mandatory terms that the
          Director shall make a determination that the proposed action
          either cannot be processed -- actually that’s either, five,
          cannot be processed because the proposed action is not
          consistent with the County General Plan, Community Plan, and
          Zoning. That’s SMA Rule 12-202-12, subparagraph F.
                 In any case, the Director’s decision that the Leones’
          Assessment Applications could not be processed has the same
          effect as a determination that it was a development. If,
          because of a cumulative impact or a significant
          environmental or ecological effect, a single family
          residence is considered a development then an SMA permit
          would be required.
                 If a permit were required, it could not be approved
          because it would be inconsistent with the Community Plan.
          Thus, regardless of the denomination of the Assessment
          Application, the Director’s determination of the
          inconsistency with the Community Plan precludes further
          processing under applicable law.
                 The final instruction at this point of the case is as
          follows: Under the Maui SMA Rules, the Planning Director
          may not legally process an application for an SMA exemption
          for a land use that is inconsistent with the Kihei-Makena
          Community Plan.

(Formatting altered.)     These rulings shifted the parties’ focus

to the second inquiry:     whether the County’s regulations deprived

the Leones of economically beneficial use of their property.

          Both parties called expert witnesses to testify as to

the use and value of the Leones’ property.         The County called Ted

Yamamura (Yamamura), a real estate appraiser with over thirty-

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five years of experience appraising Maui real property, to

testify on the value and use of the Leones’ property.8               At the

outset, Yamamura testified that he has done thousands of real

estate appraisals on Maui over decades and that he determines the

“best uses” for the real estate in doing an appraisal.                Yamamura

explained the test that he uses for determining highest and best

use:       “There’s a four-item test; that use must be legally

permissible, physically possible, financially feasible, and

maximally productive, which means that use will yield the highest

value for that land.”

               Counsel for the County then asked Yamamura about

investment use:
               [COUNTY:] Mr. Yamamura, let me start by asking, what is
               meant by investment in land?
               [YAMAMURA:] It’s the use of land as an investment tool. In
               other words, people would buy land, hold it for a period of
               time, and as it increases in value and depending on the
               buyer’s strategy and financial objectives, sell it for
               profit.

                     . . . .

               [COUNTY:] Do you have an opinion as to whether investment is
               a use of land?

                     . . . .

               [YAMAMURA:] I consider investment as a bona fide use of
               land. It happens all the time. People by [sic] land, hold
               on to it; after it appreciates over time, people sell it for
               profit. I think that’s a bona fide land use.

                     . . . .



       8
             Prior to trial, the Leones filed a motion to exclude or limit
Yamamura’s testimony on the basis that he was not qualified to opine on
“economically viable use.” The circuit court granted in part and denied in
part this motion, explaining that Yamamura could not testify on the current
value of the property.

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          [COUNTY:] In your opinion, Lot 15 at Palauea –- based on
          your analysis of Lot 15 at Palauea, does it have potential
          use as an investment?

                . . . .

          [YAMAMURA:] Absolutely, yes.
          [COUNTY:] And looking at the first factor of your analysis,
          which is legally permissible, why do you draw that
          conclusion based on that particular factor?

                . . . .

          [YAMAMURA:] Legally permissible. It’s –- the underlying
          Zoning of that lot is HM.
          [COUNTY:] Meaning?
          [YAMAMURA:] Hotel.
          [COUNTY:] Hotel.
          [YAMAMURA:] But there’s a conflict in the Community Plan,
          but if –- under the context of legally permissible, if the
          issue of that conflict can be mitigated, then we can look at
          it as being a legally permissible use in the context of
          highest and best use because that issue or that conflict can
          be mitigated.

The circuit court overruled the Leones’ objections to this

testimony.

          Rick Tsujimura (Tsujimura), a real estate attorney,

testified as an expert witness for the Leones.          Tsujimura opined

that the inconsistences between the community plan and the zoning

requirements left the Leones “deprived of all economically

beneficial use for that lot.”       Tsujimura explained:
          The Community Plan is designated park. On the Zoning it’s
          hotel, multi-family. So as you can see, there’s an
          inconsistency between those two. They don’t line up.
                The original intent of the State Plan, the State land
          use, the General Plan, the Community Plan was for all of
          this to line up and, consequently, what has happened is
          we’re in a situation, because of this inconsistency, when
          the Leones come in for an SMA permit –- Assessment
          Application, part of the law, both at the State level and
          Chapter 205A and the County SMA law in Chapter 12-202-12, it
          requires that these pieces align. And when they don’t, when
          they’re not the same, these all end up causing the
          Assessment Application to be denied.
                And this is the problem for the landowner right now.
          Because of this inconsistency, this prevents the Leones from


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          doing anything to start the process to do anything with the
          lot, no matter what they wanted to do because they can’t get
          past this inconsistency.
                So what happens is you’re basically left with a piece
          of property that’s zoned for hotel family -- multi-family,
          Community Plan park, and because of that, you can’t do
          anything. And so there’s no economically beneficial use
          that they can use on that lot because of this.

          On cross-examination, Tsujimura explained why he did

not consider the property to have any investment value:
          [TSUJIMURA:] Investment value is premised upon an ability to
          use the property, and my opinion, as I’ve articulated, is
          that because of the inconsistency between the Community Plan
          and the Zoning, there is no ability to use the property.
                 So if you’re asking me from an investment perspective,
          I would say in this particular case, it would be zero
          because you could never harvest that value given the current
          situation.
          [COUNTY:] So would you disagree with me, then, that there’s
          potential economic benefit in the ownership and possession
          of a piece of real estate?
          [TSUJIMURA:] In a general sense, yes. But specifically to
          this particular property, no.
          [COUNTY:] So are you saying there’s no economic benefit in
          the Leones’ lot as a vehicle for an –- as an investment?
          [TSUJIMURA:] Not in the current situation because of the
          inconsistency.
          [COUNTY:] Really? Are you familiar with the Doug Schatz’ lot
          at Palauea?
          [TSUJIMURA:] No.
          [COUNTY:] Are you aware that after Doug Schatz got the very
          same return –- the same letter returning his application
          with the same language as the Leones’ lot, that he turned
          around and sold that property to somebody named Altman who’s
          got a house on it today?
          [COUNSEL FOR LEONES] Objection; relevance and beyond the
          scope.
          [THE COURT:] Sustained.

          Also on cross-examination, the County examined

Tsujimura about whether the Leones’ property could be used for

other purposes, to which Tsujimura conceded that the property

could potentially be used for commercial purposes:
          [COUNTY:] Mr. Tsujimura, you were asked whether the Leones
          could engage in commercial sales of concessions on their
          lot, and I believe you acknowledged that under the hotel
          district zoning, that they could, in fact, operate a park;


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       correct?
       [TSUJIMURA:] Yes.
       [COUNTY:] And then you said that they can only engage in
       noncommercial uses under the hotel zoning, but I’m going to
       read to you what the hotel zoning ordinance actually says.
             And it says, “Permitted uses:” –- this is 19.14.020 –-
       “Within Hotel Districts, the following uses shall be
       permitted: Any use permitted in residential and apartment
       districts.”
             Then when you go to 19.08.020, which says, “Permitted
       uses in Residential Districts,” what it actually says, Mr.
       Tsujimura, is, “Parks and playgrounds, noncommercial:
       Certain commercial, amusement, and refreshment sale
       activities may be permitted when under the supervision of
       the government agency in charge of the park or playground.”
             Which means a private land owner can engage in these
       commercial activities, but it’s just subject to permitting
       requirements and regulations under the agency, in this
       instance, the County; isn’t that correct?
       [TSUJIMURA:] I agree with you, Mr. Corporation Counsel. It
       should have been under the supervision of the County.
       [COUNTY:] All right. And so, in fact, the answer to the
       question, which you said, as to whether commercial uses
       would be allowed and to which you answered no, your answer
       is actually incorrect; right?
       [TSUJIMURA:] Well, my answer was that it would be subject to
       operation by the County.
       [COUNTY:] And that’s where your answer was incorrect.
       Because the ordinance which I actually just read to you said
       under the –- wait. You got to let me finish –- says under
       the supervision of the County, not the operation. That’s
       different; right?
       [TSUJIMURA:] Except if you –- as you read it –- it went
       further to say that the agency would have control over the
       park, which suggests that it’s who controls the park. If
       the Leones control the park, it’s not controlled by the
       Parks Department.
       [COUNTY:] The word “control” didn’t appear anywhere in what
       I just read –-
       [TSUJIMURA:] Supervise.
       [COUNTY:] –- so I’m going to read it again. There’s a
       difference between the word “supervise” and the word
       “control.” Correct?
       [TSUJIMURA:] There could be.
       [COUNTY:] . . . Isn’t what that says, is that the Leones can
       engage in refreshment sales and certain commercial
       activities as long as they get the proper permitting from
       the Department of Planning? Isn’t that what that says?
       [TSUJIMURA:] If you can get the proper permitting. If they
       intentionally try to put any sort of hard scape [sic] on it,
       it would lead to, again, this problem with the SMA.
       [COUNTY:] So your answer to the question originally was
       incorrect because a private land owner can, in fact, engage
       in commercial sale activities on their lot as long as they
       get the correct permits from the County of Maui; isn’t that
       correct?
       [TSUJIMURA:] If it’s supervised by the County.


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                . . . .

          [COUNTY:] So subject to permitting and supervision, it’s
          allowed, isn’t it?
          [TSUJIMURA:] Yes, if you can get an SMA assessment through.

          Dr. William H. Whitney (Dr. Whitney), a real estate

economist, also testified as an expert witness for the Leones.

As part of his evaluation of the property’s economically

beneficial use, Dr. Whitney created a speculative real estate

investment model for Lot 15, which allowed him to predict the

profit value the Leones lost because they were not allowed to

develop their property.     Dr. Whitney summarized his findings to

the jury, and estimated that, if the Leones had been allowed to

develop their property, they would have realized a value upwards

of $19 million by 2017.

          On cross-examination, counsel for the County examined

Dr. Whitney about the possibility of using the Leones’ property

for commercial park uses.      Dr. Whitney testified that one of the

main factors in determining whether the Leones’ property retained

economically beneficial use in a commercial context is whether

commercial activity is economically feasible.          Dr. Whitney

explained that he did not fully study whether commercial

activities were economically feasible, because he was operating

under the assumption that commercial activities were not legally

permitted on the Leones’ property:
          [COUNTY:] Okay. Let’s assume –- and I’m sure you can do
          this. Let’s assume that your opinion on whether parks and
          playgrounds and certain commercial activities are

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             permissible at the Palauea lots are incorrect.
                   Let’s assume they are permitted as reflected in the
             applicable Zoning Codes.
                   And then let’s talk about the second component of your
             analysis, which is the financial feasibility. And I handed
             you what was marked as -- what is marked as P-241, which is
             in evidence, and your testimony yesterday was that, even if
             you could engage in these activities, they’re not going to
             cover the property taxes, and you said that in 2014 the
             property taxes were $68,103.63.
                   So my question to you was, did you do any sort of
             analysis to determine whether or not the types of activities
             we’re talking about, recreational or amusement, would, in
             fact, be able to generate $68,103.63, per annum, to cover
             the property tax?

                   . . . .

             [WHITNEY:] I did not do any analysis. I relied on my
             judgment, as one who has provided leasing advisory services
             over the years and done park feasibility studies, and I
             would say, in my judgment, it’s very unlikely that that kind
             of activity at that location, on my judgement, wouldn’t
             cover the property taxes and perhaps the other costs that
             the Leones would face; the provision of utilities, security,
             and other activities that might be necessary to keep the
             property in good standing.

                   . . . .

             [COUNTY:] Did you do any exploration on Maui to determine
             how amusement and concession refreshment actually work on
             the beaches and parks in Maui?
             [WHITNEY:] No. No investigation.

                   . . . .

             [COUNTY:] Did you ask anybody on Maui, running that type of
             concession, how much they’re able to generate annually in
             income?
             [WHITNEY:] No.
             [COUNTY:] Renting surfboards, renting kayaks, selling
             refreshments on crowded beaches; you didn’t ask anybody
             that, did you?
             [WHITNEY:] No.

             Douglas and Patricia Leone also testified at trial.

Both testified on direct examination that they bought the

property with the expectation of building a single-family home on

it.    Patricia testified that her family “love[d] Maui, and we

thought it would just be great to build a home where our family

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could come for years –- you know, for years and be together.”

Douglas similarly testified that he bought the property because

he “wanted a dream home for my wife, our four children, and

eventually our grandchildren.”        On cross-examination, Patricia

testified that she and her husband, as trustees of the Leone

Family Trust, owned eight residential properties in addition to

Lot 15 at Palau#ea Beach.      Patricia also acknowledged on cross-

examination that one of the purposes of the trust was to “invest

and reinvest in real estate.”        Neither of the Leones could recall

at trial having relisted Lot 15 for $7 million soon after buying

it or receiving and refusing offers for it.

            At the close of evidence, the Leones moved for judgment

as a matter of law on Counts I and II -- the inverse condemnation

claims.9   The circuit court denied this motion.

            On May 1, 2015, the parties appeared before the court

to settle jury instructions.        Of relevance to the issues raised

on appeal, the Leones requested the following three jury

instructions, which the circuit court either modified or refused.

            First, the Leones requested a jury instruction

(proposed Jury Instruction No. 51) on economically beneficial

use:



       9
            During the trial, the Leones voluntarily dismissed Count IV, the
substantive due process claim, and Count III to the extent that it alleged a
denial of equal protection. As such, the only claims remaining for the jury
to determine were the inverse condemnation claims.

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                Land has economically beneficial use, if, under the
          applicable regulations, all three of the following are true:
          (1) there is a permissible use for the land, other than
          leaving the land in its natural state, (2) the land is
          physically adaptable for such use and (3) there is a demand
          for such use in the reasonably near future.

(Emphasis added.)    The circuit court modified this jury

instruction (Jury Instruction No. 22) over the Leones’ objection,

deleting the underlined phrase “other than leaving the land in

its natural state[.]”     The circuit court explained that it was

deleting that phrase because “this is a factual issue and better

left for argument[.]”

          Second, the Leones requested the following jury

instruction (proposed Jury Instruction No. 73) on the burden of

production:
                Plaintiffs initially bear the burden to produce
          evidence that they lack economically beneficial use of their
          property. Once Plaintiffs have produced such evidence, the
          burden of production shifts to the Defendants. To meet
          their burden of production on a proposed economically
          beneficial use, Defendants must produce evidence of
          reasonable probability that the land is both physically
          adaptable for such use and that there is a demand for such
          use in the reasonably near future.

However, the circuit court refused that jury instruction.

Instead, the circuit court issued the following jury instruction

on burdens (Jury Instruction No. 9):        “Plaintiffs have the burden

of proving by a preponderance of the evidence every element of

each claim that plaintiffs assert.        Defendants have the burden of

proving by a preponderance of the evidence every element of each




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affirmative defense that defendants assert.”10          The circuit court

explained why it modified the Leones’ proposed jury instruction:
            [T]his is an issue to be determined by the Court and has
            been determined by the Court in terms of the motions for
            directed verdict and judgment by the plaintiffs and [to]
            instruct the jury on burdens of production would
            unnecessarily and potentially confuse the jury and suggest
            to them that the burden of proof has somehow shifted.
                  Even though the words burden of production, this is a
            very complex area even for evidence professors at law
            school, and to now start to discuss all of these issues, I
            think, would be unduly confusing to the jurors, and also I
            am not sure that it’s –- while it may be an accurate
            reflection of what the law is, it’s not an accurate
            reflection of what has occurred in this case, based on my
            rulings.

            Lastly, the Leones requested the following jury

instruction (proposed Jury Instruction No. 71) regarding the

effect of the declaration of covenants and restrictions:
                  Plaintiffs’ lot is subject to a declaration of
            covenants and restrictions (“DCR”) that restricts what
            Plaintiffs may do with their land. Under the DCR,
            Plaintiffs may use their land only for single-family
            residential purposes. You may consider the DCR when
            determining whether Plaintiffs have any economically
            beneficial use of their land.

The circuit court refused this instruction.

            The circuit court also issued the following relevant

jury instruction:

      •     Jury Instruction No. 23:

                  There is a difference between economically beneficial
            use and value. A property that has value may not have
            “economically beneficial use.” To determine whether a
            defendant denied Plaintiffs economically beneficial use of
            their property, you may consider whether Plaintiffs were
            able to use their property in an economically beneficial
            way.


      10
            Additionally, Jury Instruction No. 10 explained that “[t]o ‘prove
by a preponderance of the evidence’ means to prove that something is more
likely so than not so. It means to prove by evidence which, in your opinion,
convinces you that something is more probably true than not true.”

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            On May 5, 2015, the jury returned a verdict in favor of

the County, concluding that the County had not deprived the

Leones of economically beneficial use of their land.              On June 1,

2015, the circuit court entered judgment in favor of the County

and against the Leones.

            On August 5, 2015, the circuit court:           1) denied the

Leones’ June 10, 2015 renewed motion for judgment as a matter of

law and, alternatively, motion for a new trial, and 2) granted in

part and denied in part the County’s June 12, 2015 motion for

taxation of costs, awarding the County $40,522.72 in costs.

            The Leones appealed and challenged the County’s expert

testimony, certain jury instructions, the circuit court’s denial

of the Leones’ motion for judgment as a matter of law, and the

award of costs to the County.         The County cross-appealed and

filed an application for transfer of the appeal to this court,

which was granted on June 29, 2016.

                        III.    STANDARDS OF REVIEW

A.    Expert Witness Qualifications and Testimony

                  [I]t is not necessary that the expert witness have the
            highest possible qualifications to testify about a
            particular manner [sic], . . . but the expert witness must
            have such skill, knowledge, or experience in the field in
            question as to make it appear that his opinion or
            inference-drawing would probably aid the trier of fact in
            arriving at the truth. . . . Once the basic requisite
            qualifications are established, the extent of an expert's
            knowledge of subject matter goes to the weight rather than
            the admissibility of the testimony.

                  “‘Whether expert testimony should be admitted at trial
            rests within the sound discretion of the trial court and


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            will not be overturned unless there is a clear abuse of
            discretion.’”

Estate of Klink ex rel. Klink v. State, 113 Hawai#i 332, 352, 152

P.3d 504, 524 (2007) (alterations in original) (citations

omitted) (quoting Tabieros v. Clark Equip. Co., 85 Hawai#i 336,

351, 944 P.2d 1279, 1294 (1997)).

B.    Jury Instructions

                  When jury instructions, or the omission thereof, are
            at issue on appeal, the standard of review is whether, when
            read and considered as a whole, the instructions given are
            prejudicially insufficient, erroneous, inconsistent, or
            misleading. Erroneous instructions are presumptively
            harmful and are a ground for reversal unless it
            affirmatively appears from the record as a whole that the
            error was not prejudicial.


Nelson v. Univ. of Haw., 97 Hawai#i 376, 386, 38 P.3d 95, 105

(2001) (quoting Hirahara v. Tanaka, 87 Hawai#i 460, 462-63, 959

P.2d 830, 832-33 (1998)).

C.    Judgment as a Matter of Law

                  It is well settled that a trial court's rulings on
            motions for judgment as a matter of law are reviewed de
            novo.

                        When we review the granting of a [motion
                  for judgment as a matter of law], we apply the
                  same standard as the trial court.
                        A [motion for judgment as a matter of law]
                  may be granted only when after disregarding
                  conflicting evidence, giving to the non-moving
                  party's evidence all the value to which it is
                  legally entitled, and indulging every legitimate
                  inference which may be drawn from the evidence
                  in the non-moving party's favor, it can be said
                  that there is no evidence to support a jury
                  verdict in his or her favor.

            Miyamoto v. Lum, 104 Hawai#i 1, 6-7, 84 P.3d 509, 514-15
            (2004) (internal citations omitted).

Aluminum Shake Roofing, Inc. v. Hirayasu, 110 Hawai#i 248, 251,

131 P.3d 1230, 1233 (2006) (brackets in original).

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                              IV.    DISCUSSION

            Before addressing the arguments, a brief summary of the

relevant law on takings provides useful context.

A.    The Takings Clause

            The Fifth Amendment to the United States Constitution

provides that private property shall not “be taken for public

use, without just compensation.”           This -- the Takings Clause --

is made applicable to the states through the Fourteenth

Amendment.     Murr v. Wisconsin, 137 S. Ct. 1933, 1942 (2017).

Similarly, article 1, section 20 of the Hawai#i Constitution

provides, “[p]rivate property shall not be taken or damaged for

public use without just compensation.”

            The United States Supreme Court (Supreme Court) has

established two discrete categories of government action as

compensable:     physical and regulatory takings.         Lucas v. S.C.

Coastal Council, 505 U.S. 1003, 1015 (1992).            The first are

“regulations that compel the property owner to suffer a physical

‘invasion’ of his property.”         Id.   The second are “regulation[s

that] den[y] all economically beneficial or productive use of

land.”    Id.; see also Pub. Access Shoreline Haw. v. Haw. Cty.

Planning Comm’n, 79 Hawai#i 425, 451-52, 903 P.2d 1246, 1272-73

(1995) (“A regulatory taking occurs when the government’s

application of the law to a particular landowner denies all

economically beneficial use of his or her property without


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providing compensation.”).      The relevant inquiry in the current

case is whether a regulatory taking occurred.

           The Supreme Court in Lucas explained that a

regulatory taking occurs when the “regulation denies all

economically beneficial or productive use of land.”           505 U.S. at

1015 (emphasis added).     The Supreme Court explained that

“regulations that leave the owner of land without economically

beneficial or productive options for its use -- typically, as

here, by requiring land to be left substantially in its natural

state -- carry with them a heightened risk that private property

is being pressed into some form of public service . . . .”             Id.

at 1018.

           More recently, in Palazzolo v. Rhode Island, 533 U.S.

606 (2001), the Supreme Court considered whether a taking could

still occur even though the regulation did not deprive a

landowner of all beneficial use of land.         Palazzolo owned a

waterfront parcel of land in Rhode Island and almost all of it

was designated as coastal wetlands under state law.           Id. at 611.

Because of this designation, Palazzolo’s development proposals

for portions of his property were rejected by the Rhode Island

Coastal Resources Management Council (the Council), and Palazzolo

sued, claiming that the Council’s application of its wetland

regulations constituted a taking without just compensation.             Id.

           In Palazzolo, the Supreme Court expanded the rule


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established in Lucas when it stated:
          Where a regulation places limitations on land that fall
          short of eliminating all economically beneficial use, a
          taking nonetheless may have occurred, depending on a complex
          of factors including the regulation’s economic effect on the
          landowner, the extent to which the regulation interferes
          with reasonable investment-backed expectations, and the
          character of the government action.

Id. at 617 (citing Penn Cent. Transp. Co. v. City of New York,

438 U.S. 104, 124 (1978)).      Utilizing this test, the Supreme

Court concluded that Palazzolo was left with more than a “token

interest” in his land because of the regulations.           Id. at 631.

The Supreme Court explained that, while some portions of

Palazzolo’s property could not be developed because of the

regulations, an upland portion of the property could be improved

and actually retained $200,000 in development value even under

the State’s wetlands regulations.        Id. at 630-31.     As such, the

Supreme Court concluded that a “regulation permitting a landowner

to build a substantial residence on an 18-acre parcel does not

leave the property ‘economically idle.’”         Id. at 631 (quoting

Lucas, 505 U.S. at 1019).

          As the Supreme Court most recently noted, adjudication

of regulatory takings cases “requires a careful inquiry informed

by the specifics of the case.”       Murr, 137 S. Ct. at 1943.

However, “[i]n all instances, the analysis must be driven ‘by the

purpose of the Takings Clause, which is to prevent the government

from forcing some people alone to bear public burdens which, in

all fairness and justice, should be borne by the public as a

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whole.’” Id. (quoting Palazzolo, 533 U.S. at 617-18).

            With this framework in mind, we turn to the arguments

on appeal.

B.    The Leones’ Arguments on Appeal

            The Leones present four points for our review.             The

Leones contend that the circuit court erred in:             1) denying the

Leones’ motion for judgment as a matter of law, 2) allowing

Yamamura to testify that “investment use” is an “economically

beneficial use” of land, 3) modifying Jury Instruction No. 22,

refusing proposed Jury Instruction No. 73 and replacing it with

Jury Instruction No. 9, and refusing proposed Jury Instruction

No. 71, and 4) awarding costs to the County.

            We address the second and third points first, as their

resolution is helpful in considering the Leones’ renewed motion

for judgment as a matter of law.

      1.    The circuit court did not abuse its discretion in
            allowing Yamamura to testify.

            The Leones take issue with the following testimony from

the County’s expert witness, real estate appraiser, Yamamura:
            [COUNTY:] Do you have an opinion as to whether investment is
            a use of land?

                  . . . .

            [YAMAMURA:] I consider investment as a bona fide use of
            land. It happens all the time. People by [sic] land, hold
            on to it; after it appreciates over time, people sell it for
            profit. I think that’s a bona fide land use.

                  . . . .

            [COUNTY:] In your opinion, Lot 15 at Palauea –- based on


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          your analysis of Lot 15 at Palauea, does it have potential
          use as an investment?

                 . . . .

          [YAMAMURA:] Absolutely, yes.


The Leones argue that the circuit court abused its discretion in

allowing Yamamura to testify on investment use for two reasons.

First, the Leones argue that “investment use” is not an

economically beneficial use as a matter of law.           Second, the

Leones argue that Yamamura was not qualified to opine on

“economically beneficial use.”

          a.     Testimony on investment use

          The Leones contend that the circuit court abused its

discretion in allowing the County to introduce evidence that

“investment use” is an economically beneficial use of land.

          While there is no Hawai#i legal authority on this

point, there is case law from other jurisdictions that discusses

this issue.    For instance, in Del Monte Dunes at Monterey, Ltd.

v. City of Monterey, 95 F.3d 1422, 1425 (9th Cir. 1996) (Del

Monte Dunes I), aff’d, 526 U.S. 687 (1999), the City of Monterey

persistently denied Del Monte Dunes’ development permits for

thirty-seven ocean-front acres in which Del Monte Dunes sought to

build a residential complex.       Del Monte Dunes sued the City, and

the jury found that the City’s actions denied Del Monte Dunes

equal protection and were an unconstitutional taking.            Id.   On

appeal before the Ninth Circuit, the City argued, inter alia,

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that it was entitled to a judgment as a matter of law on both the

equal protection and inverse condemnation claims.           Id.

          In arguing that the City had not denied Del Monte Dunes

of all economically viable use of its property, the City noted

that Del Monte Dunes sold the property to the State of California

for $800,000 more than it originally paid for it.           Id. at 1432.

The Ninth Circuit was not persuaded by this argument, noting that

“[f]ocusing the economically viable use inquiry solely on market

value or on the fact that a landowner sold his property for more

than he paid could inappropriately allow external economic

forces, such as inflation, to affect the takings inquiry.”             Id.

at 1432-33 (emphasis added).       Then, the Ninth Circuit explained

that “[a]lthough the value of the subject property is relevant to

the economically viable use inquiry, our focus is primarily on

use, not value” and that “the mere fact that there is one willing

buyer of the subject property, especially where that buyer is the

government, does not, as a matter of law, defeat a taking claim.”

Id. at 1433 (emphases added).

          Thus, Del Monte Dunes I established that, while

property value should not be considered to the exclusion of other

factors, it is still a relevant factor in the economically viable

use analysis.   See also MacLeod v. Santa Clara Cty., 749 F.2d

541, 547 n.7 (9th Cir. 1984) (“Holding property for investment

purposes can be a ‘use’ of property.”); Fla. Rock Indus., Inc. v.


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United States, 791 F.2d 893, 902-03 (Fed. Cir. 1986) (noting that

a “qualified real estate dealer” testified that the property had

“fair market value subject to the regulation” because there were

“investors willing to forego immediate income in hope of long-

term gain” and concluding that this was evidence of “sufficient

remaining use of the property to forestall a determination that a

taking had occurred”); City of San Antonio v. El Dorado Amusement

Co., 195 S.W.3d 238, 245 (Tex. App. 2006) (“A restriction denies

a landowner all economically viable use of the property or

totally destroys the value of the property if the restriction

renders the property valueless.”).

           In the present case, Yamamura testified that the

Leones’ property had “investment use” or, in other words, that

the property had value because the Leones could hold on to

property, wait until it increased in value, and sell it for a

profit.    While Del Monte Dunes I established that property value

should not be the sole focus in an economically viable use

inquiry, the Ninth Circuit did not foreclose the admissibility of

such evidence.    In fact, the Ninth Circuit noted that “the value

of the subject property is relevant.”        Del Monte Dunes I, 95 F.3d

at 1433.   Thus, guidance from other jurisdictions suggests that

testimony on investment use is appropriate in takings cases.

           Additionally, the circuit court took mitigating

measures in order to ensure that the jury did not improperly give


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the “value” evidence more weight than it was legally entitled.

For example, Jury Instruction No. 23 instructed the jury that:
                  There is a difference between economically beneficial
            use and value. A property that has value may not have
            “economically beneficial use.” To determine whether a
            defendant denied Plaintiffs economically beneficial use of
            their property, you may consider whether Plaintiffs were
            able to use their property in an economically beneficial
            way.

(Emphasis added.)     This instruction specifically explained to the

jury that the determination of whether property has any

economically beneficial use does not turn on whether the property

has value.

            As such, we cannot conclude that the circuit court

abused its discretion in allowing testimony on investment use.

            b.    Testimony on economically beneficial use

            The Leones also argue that Yamamura was not qualified

to opine on “economically beneficial use” and that the trial

court abused its discretion in permitting him to testify on that

topic.   According to the Leones, Yamamura “is an appraiser, not

an economist, and his testimony should have been limited to the

field of real estate appraisal.”

            Hawai#i Rules of Evidence (HRE) Rule 702 (1993)

provides:
                  If scientific, technical, or other specialized
            knowledge will assist the trier of fact to understand the
            evidence or to determine a fact in issue, a witness
            qualified as an expert by knowledge, skill, experience,
            training, or education may testify thereto in the form of an
            opinion or otherwise. In determining the issue of
            assistance to the trier of fact, the court may consider the
            trustworthiness and validity of the scientific technique or
            mode of analysis employed by the proffered expert.

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HRE Rule 702 commentary explains that “[t]he rule liberalizes the

traditional common law stricture limiting expert testimony to

some science, profession, business or occupation . . . beyond the

ken of the average layman” and that, now, “Rule 702 requires only

that the testimony be of assistance to the trier of fact.”             HRE

Rule 702 cmt. (1993) (ellipsis in original) (quotations and

citations omitted).

          In line with this rule, Hawai#i courts have noted that

“[i]t is not necessary that the expert witness have the highest

possible qualifications to testify about a particular [matter;]”

instead, “the expert witness must have such skill, knowledge, or

experience in the field in question as to make it appear that his

opinion or inference-drawing would probably aid the trier of fact

in arriving at the truth.”      Klink, 113 Hawai#i at 352, 152 P.3d

at 524 (quoting State v. Wallace, 80 Hawai#i 382, 419 n.37, 910

P.2d 695, 732 n.37 (1996)).      Additionally, “the determination of

whether or not a witness is qualified as an expert in a

particular field is largely within the discretion of the trial

judge and, as such, will not be upset absent a clear abuse of

discretion.”   State v. Torres, 60 Haw. 271, 277, 589 P.2d 83, 87

(1978).

          Yamamura testified to the following:          he has been a

real estate appraiser for almost forty years, and that he has


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been working for his current Maui-based firm, ACM Consultants,

Inc., for approximately thirty-five years; he has been a licensed

real estate appraiser in Hawai#i since 1991; as part of his job,

he conducts real estate appraisals on “single-family residential

properties, individual condominium units, improved and unimproved

vacant land,” as well as on commercial and industrial properties,

and open space and park uses; he conducts about 200 appraisals a

year, and that he is “intimately familiar with real estate on

Maui”; as part of his work, he has “to determine what the best

uses for those lands would be every time [he does] an appraisal”;

he determines the “highest and best use[es] of the property” by

conducting a “four-item test[:] that use must be legally

permissible, physically possible, financially feasible, and

maximally productive”; he has used this highest and best use test

“in connection with thousands of properties that [he] appraised

on Maui in [his] 35 years of experience.”

          The Leones contend that “[a]s an appraiser, Mr.

Yamamura’s expertise is in opining as to the value, not the use,

of real property” and that Yamamura was not familiar with the

term “economically viable use.”       However, Yamamura’s testimony

establishes that he has extensive knowledge and experience in

evaluating the “use” of real property.          Yamamura testified that,

for over thirty-five years, he has been a real-estate appraiser

on Maui and that, as part of his work, he has to determine the


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“highest and best use” of the properties he evaluates.            Yamamura

estimated that he conducted this highest and best use test “in

connection with thousands of properties . . . on Maui.”            Under

the parameters set by HRE Rule 702 and Hawai#i case law, this

testimony is enough to qualify Yamamura as an expert witness in

this area of expertise.

            As such, given Yamamura’s considerable experience and

expertise in appraising real property, and specifically Maui real

property, the circuit court did not abuse its discretion in

allowing Yamamura to testify as an expert witness.

     2.     The circuit court did not err in issuing the challenged
            jury instructions.

            The Leones also argue that the circuit court erred in

the issuance of three jury instructions.         First, the Leones

contend that the circuit court erroneously defined “economically

beneficial use” in Jury Instruction No. 22.          Second, the Leones

contend that the circuit court refused to instruct the jury, per

the Leones’ request, on the burden-shifting paradigm in takings

cases.    Third, the Leones contend that the circuit court failed

to instruct the jury on the effect of the declaration.            Each of

these arguments will be addressed in turn.

            a.   Jury Instruction No. 22: economically beneficial
                 use

            First, the Leones assert that they requested the

following jury instruction on economically beneficial use:


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                 Land has economically beneficial use, if, under the
           applicable regulations, all three of the following are true:
           (1) there is a permissible use for the land, other than
           leaving the land in its natural state, (2) the land is
           physically adaptable for such use and (3) there is a demand
           for such use in the reasonably near future.

(Emphasis added.)    The Leones assert that the circuit court’s

Jury Instruction No. 22, which omitted the underlined text, was

erroneous because “it failed to correctly state the law by

omitting that such use cannot leave the land in its natural

state.”

           The Leones’ interpretation of the law on this point is

too restrictive for a number of reasons.         First, a regulation

could potentially require land to be left substantially in its

natural state and still not be considered a taking.           It is true

that case law provides that regulations that require land to be

left “substantially in its natural state” suggest that the owner

of the land is being deprived of all economically beneficial use

of the land.   See Lucas, 505 U.S. at 1018 (“[R]egulations that

leave the owner of land without economically beneficial or

productive options for its use –- typically, as here, by

requiring land to be left substantially in its natural state –-

carry with them a heightened risk that private property is being

pressed into some form of public service . . . .” (emphasis

added)).   However, this rule does not state that regulations that

leave land in its natural state always constitute a taking.               As

such, Jury Instruction No. 22 is an accurate articulation of the


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law.

            Second, as the circuit court noted when modifying the

language of the instruction, the issue of whether the government

has deprived the landowners of economically beneficial use of

their land is a factual query better left for the jury to decide:
                  Okay. I’m familiar with the cases. I am deleting it,
            principally, on the grounds that I do think that, although
            the language is used, this is a factual issue and better
            left for argument, but the balance of the instruction is an
            accurate reflection of the law as we’ve discussed.

The circuit court’s reasoning is in line with well-established

case law.    See City of Monterey v. Del Monte Dunes at Monterey,

Ltd., 526 U.S. 687, 720 (1999) (Del Monte Dunes II) (“In actions

at law predominantly factual issues are in most cases allocated

to the jury.”).     Specifically, regulatory takings cases are “ad

hoc, factual inquiries” that are “informed by the specifics of

the case.”    Murr, 137 S. Ct. at 1942, 1943.         As such, “the issue

whether a landowner has been deprived of all economically viable

use of his property is a predominantly factual question” and “is

for the jury.”     Del Monte Dunes II, 526 U.S. at 720-21.

            Accordingly, the circuit court properly instructed the

jury on economically beneficial use.

            b.    Jury Instruction No. 9: burden of production

            Second, the Leones assert that the circuit court erred

by refusing the following proposed jury instruction:
                  Plaintiffs initially bear the burden to produce
            evidence that they lack economically beneficial use of their
            property. Once Plaintiffs have produced such evidence, the


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          burden of production shifts to the Defendants. To meet
          their burden of production on a proposed economically
          beneficial use, Defendants must produce evidence of
          reasonable probability that the land is both physically
          adaptable for such use and that there is a demand for such
          use in the reasonably near future.

Instead, the circuit court instructed the jury that “[p]laintiffs

have the burden of proving by a preponderance of the evidence

every element of each claim that plaintiffs assert.”            The Leones

argue that the circuit court prejudiced the Leones by not giving

the requested instruction because it relieved the County of

meeting its burden of production.

          As support for their argument, the Leones ask us to

rely on two cases from other jurisdictions:          Bowles v. United

States, 31 Fed. Cl. 37 (1994) and Loveladies Harbor, Inc. v.

United States, 21 Cl. Ct. 153 (1990).        These cases, while

persuasive, are not binding on Hawai#i courts.          Moreover, these

cases were federal bench trials and, as such, are distinguishable

from this case, which was tried by a jury.         The circuit court

implicitly acknowledged this distinction when it explained why it

refused the proposed burden-shifting instruction:
          [To] instruct the jury on burdens of production would
          unnecessarily and potentially confuse the jury and suggest
          to them that the burden of proof has somehow shifted.
                Even though the words burden of production, this is a
          very complex area even for evidence professors at law
          school, and to now start to discuss all of these issues, I
          think, would be unduly confusing to the jurors . . .

          Additionally, even if this court were to rely on the

cases cited by the Leones, the Leones’ proposed jury instruction

regarding burden shifting is not an accurate articulation of the

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law as reflected in Bowles and Loveladies.            For instance, the

Leones requested that the court instruct the jury that

“[p]laintiffs initially bear the burden to produce evidence that

they lack economically beneficial use of their property.               Once

Plaintiffs have produced such evidence, the burden of production

shifts to the Defendants.”         This proposed instruction, as

written, suggests that once the Leones have produced any evidence

that their property lacks economically beneficial use, they have

satisfied their burden on that issue.           This is incorrect.

Instead, a plaintiff in a takings case must produce sufficient

evidence to persuade the court that “it is more likely true than

not that there remains no economically viable use for their

property” before the burden shifts to the defendant.11

Loveladies, 21 Cl. Ct. at 158 (brackets omitted); Bowles, 31 Fed.

Cl. at 47.      Thus, the Leones’ proposed jury instruction on this

topic is an inaccurate articulation of the law that they

themselves rely upon.        The circuit court did not err in refusing

it.

             c.    Proposed Jury Instruction No. 71: effect of the
                   declaration

             Third, the Leones argue that the circuit court erred

when it “failed to instruct the jury that the only permissible

      11
            And, in fact, this is what the circuit court told the jury in Jury
Instruction No. 10: “To ‘prove by a preponderance of the evidence’ means to
prove that something is more likely so than not so. It means to prove by
evidence which . . . convinces you that something is more probably true than
not true.” (Emphases added.)

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economically beneficial use of the Property is as a single-family

residence.”    The Leones explain that they requested the following

jury instruction, which was refused by the circuit court:
                  Plaintiffs’ lot is subject to a declaration of
            covenants and restrictions (“DCR”) that restricts what
            Plaintiffs may do with their land. Under the DCR,
            Plaintiffs may use their land only for single-family
            residential purposes. You may consider the DCR when
            determining whether Plaintiffs have any economically
            beneficial use of their land.

The Leones contend that “[t]he jury must consider restrictive

covenants when making takings determinations.”           The Leones’

argument here is unpersuasive for two reasons.

            First, there is no authoritative legal support for the

Leones’ contention that a jury must be instructed on the effect

of a private restrictive covenant on a regulatory takings

analysis.    The circuit court, in giving jury instructions, is

limited to instructing the jury on the applicable law.               See

Tittle v. Hurlbutt, 53 Haw. 526, 530, 497 P.2d 1354, 1357 (1972)

(“The function served by jury instructions is to inform the jury

of the law applicable to the current case.”); Udac v. Takata

Corp., 121 Hawai#i 143, 149, 214 P.3d 1133, 1139 (App. 2009)

(“The boundaries of the trial judge’s discretion in informing the

jury of the law applicable to the current case are defined ‘by

the obligation to give sufficient instructions and the opposing

imperative against cumulative instructions.’” (quoting Tittle, 53

Haw. at 530, 497 P.2d at 1357)).          The Leones cite to no Hawai#i

or Supreme Court case for their contention that a jury must be

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informed on the effect of private restrictive covenants.            As

such, the circuit court acted well within its discretion when it

refused a jury instruction not grounded in the law.

            Second, the two cases relied upon by the Leones for

their persuasive weight are inapposite to the issue before this

court.    In both Bowles v. United States and Knight v. City of

Billings, the government defendants argued that the restrictive

covenants -- not their own action -- were responsible for the

taking.    Bowles, 31 Fed. Cl. at 49 (“[T]he government also argues

that the diminution in value of Lot 29 was somehow ‘caused’ by

non-federal action.”); Knight, 642 P.2d 141, 146 (Mont. 1982)

(“We turn now to consider whether the declaration of restrictions

of Lillis Subdivision limiting the use of plaintiffs’ lots to

residential purposes until the year 2000 prevents recovery

through inverse condemnation.”).         Both courts rejected this

argument, determining that it was the government action, not the

private restriction, that resulted in the elimination of the

economically beneficial use of the property.          Bowles, 31 Fed. Cl.

at 49 (“In this case it is only because of the federal

government’s refusal to issue a fill permit that Lot 29 has no

fair market value or economically viable use.”) (emphasis in

original); Knight, 642 P.2d at 146 (“It is not the restrictions

that are damaging plaintiffs’ properties; it is the action of the

City in making the improvements that is making their properties


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nearly unusable and unmarketable for residential purposes.”).

Essentially, these cases assert that the existence of a

restrictive covenant is irrelevant to a takings analysis.

            Here, the Leones argue the opposite -- that “[t]he jury

must consider restrictive covenants when making takings

determinations.”     (Emphasis added.)      This is certainly not the

holding of Bowles and Knight.12       Additionally, such a reading of

the law contravenes takings jurisprudence, which contemplates,

first and foremost, government action.          Just as the Bowles and

Knight courts determined that the existence of private

restrictive agreements cannot be used as a defense for government

actions, we similarly determine that the existence of such

private agreements cannot saddle the government with liability in

a takings analysis.      At all times in a takings analysis, it is

solely the government action that must be evaluated.

            For these reasons, the circuit court did not err in

declining to instruct the jury on the effect of the declaration.

      3.    The circuit court did not err in concluding that the
            Leones were not entitled to judgment as a matter of
            law.

            Next, we must determine whether the trial court erred

in concluding that the Leones were not entitled to a judgment as

a matter of law.     The Leones assert that the evidence presented


      12
            Significantly, Bowles and Knight did not touch on the issue of
whether jury instructions must include information about the existence of
restrictive covenants.

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at trial permitted only one reasonable conclusion:           the County’s

regulation of the Leones’ property constituted a taking for which

they are owed just compensation.           We review a trial court’s

ruling on a motion for judgment as a matter of law de novo.

Aluminum Shake Roofing, 110 Hawai#i at 251, 131 P.3d at 1233.               A

motion for judgment as a matter of law can be granted only when

“it can be said that there is no evidence to support a jury

verdict in [the non-moving party’s] favor.”           Id.   Additionally, a

court must give to the non-moving party’s evidence “all the value

to which it is legally entitled,” and to indulge “every

legitimate inference which may be drawn from the evidence in the

non-moving party’s favor.”      Id.

          This point on appeal presents a two-part inquiry:             1)

whether the County’s regulations prohibited the Leones from

building a single-family residence, and, if so, 2) whether the

County’s regulations deprived the Leones of economically

beneficial use of their land.         Because the circuit court

instructed the jury that the County’s regulations prohibited the

Leones from building a single-family residence on their property,

see supra Section II.C, we need only address the second inquiry:

whether there is evidence to support the jury’s finding that the

County did not deprive the Leones of economically beneficial use

of their land.

          The parties offered conflicting testimony on whether


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the Leones’ property retained economically beneficial use.             The

Leones’ expert witnesses included Tsujimura and Dr. Whitney, who

both testified unequivocally on direct examination that the

County’s regulations deprived the Leones of all economically

beneficial use of their property.        Tsujimura testified that

“[b]ecause of this [community plan] inconsistency, this prevents

the Leones from doing anything to start the process to do

anything with the lot” and that “there’s no economically

beneficial use that they can use on that lot because of this.”

Dr. Whitney similarly testified that the community plan

prohibited the Leones from building a single-family home on their

property, and that this regulation prevented the Leones from

realizing upwards of $19 million in value for their property.

          On the other hand, the County introduced expert

testimony from Yamamura, who testified on direct examination that

the Leones’ property had great “investment use.”           Yamamura

testified that “investment in land” means “the use of land as an

investment tool” and further explained that this occurs when

“people . . . buy land, hold it for a period of time, and as it

increases in value and depending on the buyer’s strategy and

financial objectives, sell it for profit.”         When asked if the

property had potential as an investment, Yamamura answered,

“[a]bsolutely, yes.”     Yamamura then explained that the property

had “tremendous opportunities for increases in value[]” because


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it was “a very scarce commodity” and “an ocean front lot on one

of the best beaches in south Maui . . . .”

          Indeed, the Leones’ attempts at selling their property

soon after buying it support Yamamura’s investment use testimony.

A year after purchasing the property, the Leones relisted it for

$7 million, a $4 million increase in the price they paid for it,

and received two offers, which the Leones eventually refused.

The offers –- one for $4.5 million and the other for $4.6 million

–- would have garnered the Leones, if accepted, close to $1

million in profit.    Also supporting Yamamura’s investment use

theory is the fact that the property is included in the Leone

Family Trust, which Patricia Leone conceded at trial was created,

at least in part, for the purpose of “invest[ing] and

reinvest[ing] in real estate.”       Because we have already

determined that investment use is a relevant consideration in a

takings analysis, see supra Section IV.B.1.a, we conclude here

that the record adduces some evidence that the property retained

a reasonable, economically viable use, specifically in the form

of an investment.

          In addition to Yamamura’s testimony about investment

use, there is also some evidence to support the County’s

contention that the property had economically beneficial use in

the commercial context.     For instance, on cross-examination,

Tsujimura conceded that the Leones could potentially conduct


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commercial activities on their property as a park.

Additionally, on cross-examination, Dr. Whitney similarly

conceded that point, and also conceded that he did not undertake

any research to determine whether commercial activity on the

Leones’ property was economically viable.

           As such, there is evidence to support the jury’s

finding that the property retained some economically beneficial

use.   Although the Leones were prevented from building a single-

family residence on the property, evidence was presented showing

that the property had value as an investment property and could

potentially be used in the commercial context as well.            See Penn

Cent., 438 U.S. at 130 (“[T]he submission that appellants may

establish a ‘taking’ simply by showing that they have been denied

the ability to exploit a property interest that they heretofore

had believed was available for development is quite simply

untenable.”).

           In sum, we conclude that there is evidence to support

the jury’s verdict that the County’s regulations did not amount

to a taking of the Leones’ property.        See Aluminum Shake Roofing,

110 Hawai#i at 251, 131 P.3d at 1233 (“A [motion for judgment as

a matter of law] may be granted only when . . . it can be said

there is no evidence to support a jury verdict in [the non-moving

party’s] favor.” (first brackets in original) (emphasis added)).

Accordingly, the circuit court did not err in denying the Leones’


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motion for judgment as a matter of law.13

      4.    The circuit court did not err in awarding costs to the
            County.

            The Leones argue that the circuit court erred in

awarding costs to the County because the County is not the

“prevailing party” under Hawai#i Rules of Civil Procedure (HRCP)

Rule 54(d).     This argument is contingent on this court’s decision

to vacate and remand this case on the grounds the Leones raised

in the previous sections.        Because we affirm the circuit court’s

judgment, the Leones’ argument that the circuit court erred in

awarding costs to the County is unavailing.

C.    The County’s Arguments on Cross-appeal

            Because we rule in favor of the County, we may quickly

dispense with its cross-appeal.         In its cross-appeal, the County

raises seven points for our review.          The Leones argue that the

County’s cross-appeal is not permitted by law because the County

is not an aggrieved party.

            “Generally, the requirements of standing are (1) the

person must first have been a party to the action; (2) the person

seeking modification of the order of judgment must have had

standing to oppose it in the trial court; and (3) such person

must be aggrieved by the ruling.”          Waikiki Malia Hotel, Inc. v.


      13
            The Leones also contend that they are entitled to a judgment as a
matter of law on their civil rights act claim. Because we affirm the circuit
court’s judgment that a taking did not occur, we need not address the Leones’
civil rights argument here.

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Kinkai Props. Ltd. P’ship, 75 Haw. 370, 393, 862 P.2d 1048, 1061

(1993) (emphasis added).      This court defines an aggrieved party

in the civil context “as ‘one who is affected or prejudiced by

the appealable order.’”     Id. (quoting Montalvo v. Chang, 64 Haw.

345, 351, 641 P.2d 1321, 1326 (1982)).         Thus, under the general

rule, the County is not an aggrieved party and would not be able

to appeal its case.

            However, as this court noted in City Exp., Inc. v.

Express Partners, 87 Hawai#i 466, 468 n.2, 959 P.2d 836, 838 n.2

(1998), “[w]hile the general rule is that a prevailing party may

not file a direct appeal, there is an exception for cross-

appeals.”    This court specifically determined that “[i]f the

appellate court reverses the ruling of the lower court, then it

must address any relevant issues properly raised on cross-

appeal.”    Id.   In Express Partners, because we affirmed the

circuit court’s directed verdict in favor of the cross-

appellants, we concluded that the cross-appeal was moot.            Id.

            Similarly, because we affirm the circuit court’s

judgment in favor of the County, we find its cross-appeal moot.

                             V.   CONCLUSION

            For the foregoing reasons, we affirm the circuit

court’s:    1) June 1, 2015 judgment in favor of the County and

against the Leones, 2) August 5, 2015 order denying the Leones’

renewed motion for judgment as a matter of law or, in the


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alternative, motion for a new trial, and 3) August 5, 2015 order

granting in part and denying in part the County’s motion for

costs.


Andrew V. Beaman,                   /s/ Mark E.     Recktenwald
Leroy E. Colombe,
and Daniel J. Cheng                 /s/ Paula A. Nakayama
for plaintiffs-appellants/
cross-appellees                     /s/ Sabrina S. McKenna

Patrick K. Wong, Brian A.           /s/ Richard W. Pollack
Bilberry and Thomas Kolbe
for defendants-appellees/           /s/ Michael D. Wilson
cross-appellants




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