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                                                              Electronically Filed
                                                              Supreme Court
                                                              SCWC-13-0000785
                                                              06-MAY-2015
                                                              09:13 AM




           IN THE SUPREME COURT OF THE STATE OF HAWAI#I

                                ---o0o---


                            FETU KOLIO,
            Petitioner/Appellant/Plaintiff-Appellant,

                                    vs.

                 HAWAI#I PUBLIC HOUSING AUTHORITY,
             Respondent/Appellee/Defendant-Appellee.


                            SCWC-13-0000785

         CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
             (CAAP-13-0000785; CIV. NO. 12-1-2339-09)

                               MAY 6, 2015

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

                OPINION OF THE COURT BY NAKAYAMA, J.

          This appeal concerns Fetu Kolio’s (Kolio) eviction from

Mayor Wright Homes (Mayor Wright), a federally-subsidized public

housing project, which is owned and operated by Hawai#i Public

Housing Authority (HPHA).      While living at Mayor Wright, Kolio

served as the president of the Mayor Wright Homes Tenant
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Association (Association) and misappropriated approximately

$1,400 in Association funds.      He later pled guilty to second

degree theft.   HPHA evicted Kolio from Mayor Wright, alleging

that Kolio’s theft of Association funds violated a term in his

lease that stated: “Tenant . . . shall not engage in . . . any

criminal activity . . . that threatens the health, safety or

right to peaceful enjoyment of Management’s public housing

premises by other public housing residents or neighboring

residents.”   On appeal, both the Circuit Court of the First

Circuit (circuit court) and the Intermediate Court of Appeals

(ICA) affirmed.

           On review of the record, HPHA failed to carry its

burden of showing that Kolio’s theft threatened the health,

safety, or peaceful enjoyment of the premises.          Additionally,

Kolio’s theft did not meet the definition of criminal activity

given in Hawai#i Administrative Rules (HAR) § 17-2020, which

governs the practice and procedure for terminating the tenancy of

a person occupying a unit in a project that is owned or operated

by HPHA.   Therefore, we hold that the ICA gravely erred in

affirming the Eviction Board, and we reverse the Eviction Board’s

Order.

                             I.   BACKGROUND

           In 2004, Kolio entered into a rental agreement with


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HPHA (Rental Agreement) under which he became a tenant of Mayor

Wright, a federally-subsidized housing project.            The project is

under the jurisdiction of the U.S. Department of Housing and

Urban Development (HUD) and under the ownership and operation of

HPHA.     From 2009 until 2011, Kolio served as the President of the

Mayor Wright Tenant Association.1          On July 27, 2010, Kolio

received a check for $1,400 from HPHA to be used for resident

participation activities as required by HUD.2            In 2011, Kolio

failed to comply with HPHA’s requests for financial documentation

of the Association checking account, and HPHA’s Financial

Management Office confirmed that the check had been cashed and

deposited into Kolio’s personal account.           Kolio was charged with

Theft in the Second Degree, a Class C felony in January 2012 and

he pled guilty to the charge on May 29, 2012.3

A.    HPHA Proceedings

             On February 27, 2012, HPHA sent Kolio a Notice of

Violation of Rental Agreement and Proposed Termination of Rental


      1
            The Association is referred to as a “resident council” by HUD.
Pursuant to 24 C.F.R. § 964.18, housing authorities like HPHA must assist
residents in establishing and maintaining a resident council upon the request
of the residents. Participation in resident councils is voluntary, and the
governing board is democratically elected. 24 C.F.R. § 964.115.
      2
            These funds had been provided to the Association by HUD under 24
C.F.R. § 964.150(a)(1). These funds were to be used for purposes set forth in
24 C.F.R. § 964.
      3
            As a result, Kolio was sentenced to 30 days of incarceration, five
years probation, and directed to pay $1,400 in restitution to HPHA.

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Agreement (Non-Rent Violation) (Notice) stating that HPHA would

proceed to terminate Kolio’s tenancy because he violated, among

other sections, Section 8(p)(1) of the Rental Agreement.

Section 8(p)(1) stated that it was a tenant’s obligation to
          (p) Assure that Tenant, any member of the household, a guest
          or another person under Tenant control, shall not engage in:
                (1) Any criminal activity or alcohol abuse that
                threatens the health, safety or right to peaceful
                enjoyment of Management’s public housing premises by
                other public housing residents or neighboring
                residents or employees of Management[.]

The Notice further referred to Kolio’s misappropriation of

Association funds.

          After the parties were unable to settle the dispute

through the grievance process prescribed by Hawai#i

Administrative Rules (HAR) § 17-2021, a hearing was scheduled

before the Oahu Eviction Board A of HPHA on September 11, 2012 to

determine whether the Rental Agreement should be canceled and

terminated due to the alleged violations.         In addition to

providing evidence of Kolio’s theft and his conviction, the

Manager’s Report to the Eviction Board stated that “Theft in the

Second Degree is defined as a felony which constitutes criminal

activity in violation of Section 8(p)(1) of the Rental

Agreement.”   The Report also stated that the “Association funds

which were to be used solely for the benefit of the individual

residents that Mr. Kolio represented, caused mistrust within the

community causing a [threat to] health, safety or right to

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peaceful enjoyment of Management’s public housing premises by

other public housing residents or neighboring residents.”

            Kolio argued that he did not violate Section 8(p)(1) of

the lease because that Section referred only to activity that

“(1) meets the definition of ‘criminal activity’ as understood in

the context of public housing evictions and (2) ‘threatens the

health, safety, or right to peaceful enjoyment of the premises’

by others.”    He asserted that the argument that tenant safety and

health were threatened because the Association did not possess

the stolen funds was purely speculative, and “‘[a] legal

conclusion should not rest on a foundation of entirely fictitious

events.’”

            At the hearing, HPHA Project Manager Joanna Renken

(Renken) testified that:
            A lot of times, we feel that peaceful enjoyment or, or any
            kind of threat of health and safety is a lot times physical,
            but what people don’t know [is] that it can also mean
            emotional as well. So, I’m speaking on behalf of the
            residents of Mayor Wright Homes, and Mr. Kolio did violate
            the Rental Agreement.

When responding to a question about what the Association funds

were to be used for, Renken stated:
            Usually the resident participation fund is given by the HUD
            . . . and that specific fund is supposed to be used to
            generate programs for the residents within the community to
            gain either employment or anything to make them become self
            sufficient, or to provide anything that would be a benefit
            to the residents within the community.

She also testified that the funds Kolio stole were supposed to be


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used for any kind of services “from computer classes to sewing

classes to reading classes, anything that would benefit the, not

the association, the residents” and were not for personal use.

            In its Findings of Fact, Conclusions of Law, Decision

and Order, the Eviction Board found that Kolio violated Section

8(p)(1) of the Rental Agreement and noted that Kolio had held a

position of trust and had deprived the Association and residents

of “the funds and resources that could have been used for the

health, safety and welfare of all the residents . . . .”              The

Board ordered that Kolio be evicted.

B.    Circuit Court Proceedings

            Kolio appealed to the circuit court.4          Following the

notice of appeal, Kolio filed a Motion to Stay Writ of Possession

Pending Appeal, which was denied by the circuit court.              Kolio was

evicted from his home.       Following oral argument on Kolio’s

appeal, the circuit court affirmed the Eviction Board’s Findings

of Fact, Conclusions of Law, Decision and Order.

C.    Proceedings Before the ICA

            Kolio then appealed to the ICA, and the ICA affirmed

the circuit court.      The ICA held that:
            Kolio’s criminal theft misappropriated [Association funds]
            that were already allocated and were now unavailable for
            purposes that included the benefit of the health, safety,


      4
            The Honorable Rhonda A. Nishimura presided.

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            and peaceful enjoyment of the Mayor Wright Housing
            residents. Kolio’s theft thus constituted the kind of
            criminal activity that posed a “threat” within the meaning
            of section 8(p)(1) of the Rental Agreement and provided
            sufficient grounds for the Eviction Order.

                         II.   STANDARDS OF REVIEW

A.    Review of Administrative Agencies’ Findings and Conclusions

            We review the appeal of an administrative decision for

grave errors of law, applying the same standard that the ICA

applied:
                  Review of a decision made by the circuit court upon
            its review of an agency’s decision is a secondary appeal.
            The standard of review is one in which [the appellate] court
            must determine whether the circuit court was right or wrong
            in its decision, applying the standards set forth in HRS
            § 91-14(g) [(1993)] to the agency’s decision.

                  HRS § 91-14, entitled “Judicial review of contested
            cases,” provides in relevant part:

                        (g)   Upon review of the record the court may
                  affirm the decision of the agency or remand the case
                  with instructions for further proceedings; or it may
                  reverse or modify the decision and order if the
                  substantial rights of the petitioners may have been
                  prejudiced because the administrative findings,
                  conclusions, decisions, or orders are:

                        (1)    In violation of constitutional or
                               statutory provisions; or
                        (2)    In excess of the statutory authority or
                               jurisdiction of the agency; or
                        (3)    Made upon unlawful procedure; or
                        (4)    Affected by other error of law; or
                        (5)    Clearly erroneous in view of the reliable,
                               probative, and substantial evidence on the
                               whole record; or
                        (6)    Arbitrary, or capricious, or characterized
                               by abuse of discretion or clearly
                               unwarranted exercise of discretion.

            [U]nder HRS § 91-14(g), conclusions of law are reviewable
            under subsections (1), (2), and (4); questions regarding
            procedural defects under subsection (3); findings of fact
            under subsection (5); and an agency’s exercise of discretion
            under subsection (6).


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United Pub. Workers, AFSCME, Local 646, AFL-CIO, v. Hanneman, 106

Hawai#i 359, 363, 105 P.3d 236, 240 (2005) (quoting Paul’s Elec.

Serv., Inc. v. Befitel, 104 Hawai#i 412, 416, 91 P.3d 494, 498

(2004)).

            When determining whether an agency abused its

discretion pursuant to HRS § 91-14(g)(6), the court must first

“determine whether the agency determination under review was the

type of agency action within the boundaries of the agency’s

delegated authority.”     Paul’s Elec. Serv., 104 Hawai#i at 417, 91

P.3d at 499.    If the determination was within the agency’s realm

of discretion, then the court must analyze whether the agency

abused that discretion.     Id.   If the determination was not within

the agency’s discretion, then it is not entitled to the

deferential abuse of discretion standard of review.           Id.

            In regards to the abuse of discretion standard of

review, this court has held that “[a]gency determinations, even

if made within the agency’s sphere of expertise, are not

presumptively valid; however, an agency’s discretionary

determinations are entitled to deference, and an appellant has a

high burden to surmount that deference[.]”         Id. at 419, 91 P.3d

at 501.    This court has further described an agency’s proper

exercise of discretion as “not arbitrarily or willfully, but with

regard to what is right and equitable under the circumstances and


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the law, and directed by the reason and conscience of the judge

to a just result.”      S. Foods Grp., L.P. v. State, Dep’t of Educ.,

89 Hawai#i 443, 452, 974 P.2d 1033, 1042 (1999) (internal

quotations and citations omitted).          Therefore, “[a] hearings

officer abuses his or her discretion when he or she ‘clearly

exceeds bounds of reason or disregards rules or principles of law

or practice to the substantial detriment of a party.’”              Id.

(quoting Craft v. Peebles, 78 Hawai#i 287, 301, 893 P.2d 138, 152

(1995)).

                              III.   DISCUSSION

            The issue before the court is whether the Eviction

Board abused its discretion when it determined that Kolio’s theft

constituted criminal activity that threatened the health, safety,

or peaceful enjoyment of the premises by other residents or HPHA

employees.

A.    The Determination of the HPHA Eviction Board Was Within Its
      Realm of Discretion.

            This court has held that “[t]he boundaries of an

agency’s discretion are established by the legislature . . . and

these statutory boundaries will likely assist a reviewing court

in defining ‘discretion’ when that court examines an agency’s

action for an abuse of discretion.”          Paul’s Elec. Serv., 104

Hawai#i at 417-18, 91 P.3d at 499-500 (internal citations



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omitted).   HRS § 356D-94(a)(2006) provides that HPHA has the

discretion to terminate a public housing tenancy “[i]f it is

proven to the satisfaction of the eviction board that there is

cause to terminate a lease or rental agreement and evict the

tenant . . . .”    HRS § 356D-92(a)(2006) limits this discretion by

prescribing the causes for termination of a lease.           Relevant to

this case, HRS § 356D-92(a)(2) allows for termination if there is

a “[v]iolation of any of the provisions of a lease, rental

agreement, permit, or license[.]”        Additionally, HAR § 17-2020-

5(a)(2004)(amended 2014) states that the examiner or eviction

board “shall determine whether there are sufficient grounds for

termination of the rental agreement[,]” and a “[s]erious or

repeated violation of material terms of the rental agreement” is

listed as a ground for termination in HAR § 17-2020-5(b)(1).

            Pursuant to this legislative authority, it was within

the Eviction Board’s delegated authority to determine whether

Kolio violated the Rental Agreement and to evict him based on its

conclusion that he had.     See Paul’s Elec. Serv., 104 Hawai#i at

417, 91 P.3d at 499.     Thus, the next step in the analysis is to

consider whether the Eviction Board nonetheless abused its

discretion by making a determination that was arbitrary or

capricious.   See HRS § 91-14(g)(6).




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B.    The Eviction Board Abused Its Discretion When It Determined
      that Kolio’s Theft Was Criminal Activity that Threatened the
      Health, Safety, or Peaceful Enjoyment of the Premises.

            Although HPHA is given discretion to determine whether

grounds for eviction exist, this discretion is not unlimited.

HPHA is required to liberally construe the rules governing

eviction practice and procedure so that “the rights of the

parties are preserved in a just and timely resolution of every

hearing.”     HAR § 17-2020-1.     Here, Kolio was evicted from his

home and has had to live apart from his wife, who was allowed to

remain at Mayor Wright, because neither of them can afford to

live outside of public housing.         And even though HPHA has an

important interest in maintaining the peace and safety of the

projects, HPHA must abide by the rules and provisions that create

the boundaries of its discretion, especially where the

consequences of its actions are so dire.           In this case, it is

clear that HPHA abused its discretion when it found that Kolio’s

theft violated Section 8(p)(1) of the Rental Agreement.

            Section 8 of the Rental Agreement lists obligations of

the tenant.     Section 8(p) states that it is a tenant’s obligation

to “[a]ssure that Tenant . . . shall not engage in: (1) Any

criminal activity or alcohol abuse that threatens the health,

safety or right to peaceful enjoyment of Management’s public

housing premises by other public housing residents or neighboring


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residents or employees of Management[.]”         HPHA is required by HUD

to include this tenant obligation in its rental agreements, and

the language of Section 8(p)(1) traces the language of 24 C.F.R.

§ 966.4(f)(12)(i)(A)(2001).5      However, neither the Rental

Agreement nor HUD regulations define “criminal activity that

threatens the health, safety, or right to peaceful enjoyment.”

          The phrase “that threatens the health, safety, or

peaceful enjoyment of the premises” clearly qualifies the kind of

criminal activity that violates the provision.          There must be a

showing of a nexus between the tenant’s criminal activity and the

threat to health, safety, or enjoyment of the premises by other

residents or management employees.        D.C. Hous. Auth. v.

Whitfield, No. 04-LT-410, 2004 WL 1789912, at *6 (D.C. Super. Ct.

Aug. 11, 2004)(“To hold [that a nexus is unnecessary] would

require the court to adopt the position that a public housing

agency has blanket authority to evict its residents for any

criminal behavior committed anywhere, regardless of whether such

behavior posed a threat to the health and safety of the other


     5
          24 C.F.R. § 966.4 reads:

          (f) Tenant’s obligations. The lease shall provide that the tenant
          shall be obligated:
                . . .
                (12)(i) To assure that no tenant, member of the tenant’s
                household, or guest engages in:
                      (A) Any criminal activity that threatens the health,
                      safety, or right to peaceful enjoyment of the premises
                      by other residents . . . .

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residents where the tenant lives . . . [and] allow [a public

housing authority] to effectively evict without cause, any person

who has a criminal record.”).

            It appears that Hawai#i courts have not defined the

language of this provision, nor have they addressed HPHA

evictions pursuant to it.6       However, because HUD requires the

inclusion of this standardized provision in all lease agreements

between public housing authorities and tenants of federally-

subsidized projects, other jurisdictions have addressed evictions

under the same or substantially similar language to Section

8(p)(1).    These cases are instructive as to what a public housing

authority must show in order to prove that a tenant violated this

provision.

            In Guste Homes Resident Management Corp. v. Thomas,

Thomas leased an apartment from the Housing Authority of New

Orleans, which was managed by Guste and subject to the same HUD


      6
            The closest Hawai#i case appears to be Williams v. Hawai#i Housing
Authority. 5 Haw. App. 325, 690 P.2d 285 (1984). In that case, the tenants’
adult sons were involved in two altercations on project premises, one of which
was a fatal stabbing. Id. at 331, 690 P.2d at 290. The ICA held that the
tenants were properly evicted under a lease provision that required tenants to
“cause other persons who are on the premises with his consent to conduct
themselves in a manner which will not disturb his neighbors’ peaceful
enjoyment of their accommodations and will be conducive to maintaining the
project in a decent, safe, and sanitary condition . . . .” Id. at 326, 690
P.2d at 287. While the case implies that altercations on project premises are
conduct that disturbs residents’ “peaceful enjoyment” of their accommodations,
the ICA noted that the tenants “were evicted not on account of the incidents
per se, but because they failed to control the actions of their sons as
evidenced by the long list of complaints” preceding and including the two
altercations. Id. at 332, 690 P.2d at 290.

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regulations under 24 C.F.R. § 966.4.        116 So. 3d 987, 988 (La.

Ct. App. 2013).    Upon investigation, Guste learned that Thomas

had been charged with theft and illegal possession of stolen

goods following an incident at the New Orleans Arena.            Id.   Guste

determined that this criminal activity was a breach of the lease

agreement and served Thomas with a notice of termination.              Id. at

989.   At a trial on the merits of the eviction, Guste’s evidence

of the lease violation consisted of Thomas’s misdemeanor theft

conviction and the testimony of the property manager.            Id. at

988.   The trial court concluded that the theft was not a threat

to the health, safety, or peaceful enjoyment of the premises.

Id. at 989.   Although the property manager testified that she

believed that Thomas’s theft was a threat, when the trial court

asked her how it specifically threatened other residents, she was

unable to give support for her belief with testimony or evidence.

Id. at 991.   Although the record indicated that residents

reported the theft to Guste after it was exposed by the local

news, none of them stated that they felt threatened or concerned

for their individual health, safety, or peaceful enjoyment of the

premises.   Id. at 991-92.     The Louisiana Court of Appeal affirmed

the trial court’s decision holding that evidence of an actual

threat was “a necessary element to demonstrate that Mr. Thomas’

actions warrant eviction,” and Guste failed to meet its burden of


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proof to evict Thomas.        Id. at 991.

             In Sumet I Associates, LP v. Irizarry, the tenant’s

lease was terminated for “‘criminal activity by a tenant . . .

that threatens the health, safety, or right to peaceful enjoyment

of the premises by other residents.’”           959 N.Y.S.2d 254, 255

(N.Y. App. Div. 2013).        The tenant spray-painted graffiti in a

common area stairwell.        Id.   When the tenant failed to vacate the

premises, a summary holdover proceeding was brought, and a

videotape from the security camera capturing the tenant’s

vandalism was presented as evidence.           Id.   The New York Supreme

Court held that even though the landlord demonstrated the

tenant’s criminal activity, because the graffiti was on the

stairwell landing leading to the roof and there was no evidence

that any resident’s peaceful enjoyment was threatened, the

landlord failed to demonstrate that the lease term was violated.

Id.

             In Housing Authority of City of Bangor v. Bush, the

housing authority claimed that the tenant’s guest violated the

same standardized lease provision when he removed a stop sign

near the residence.        No. AP-00-22, 2001 WL 1719230, at *2 (Me.

Super. Feb. 2, 2001).        The court held that this criminal activity

did not threaten the health, safety, or peaceful enjoyment of the

premises by other residents because there was no evidence


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regarding the environment where the traffic sign had been

erected.   Id.   The court held that although in some

circumstances, the removal of a stop sign could pose a threat, in

other circumstances, such as in a remote area or on a road closed

to traffic, the removal of a stop sign would not be a threat.

Id. (“[E]ven though [removal of the sign] was criminal, its

effects on others is entirely a function of specific facts not

set out in the present record.”).

           Kolio has cited to Boston Housing Authority v. Bryant,

693 N.E.2d 1060 (Mass. App. Ct. 1998), throughout his appeal in

support of his argument that his theft did not threaten the

health, safety, or peaceful enjoyment of the premises.            In

Bryant, the tenant committed larceny by false pretenses when she

used the identity of a housing authority employee to apply for

credit cards, on which she ran up substantial charges.            Id. at

1061.   The Boston Housing court ruled that the tenant violated

the same HUD standardized lease provision prohibiting criminal

activity that threatened the health, safety, or peaceful

enjoyment of the premises.      Id.    HPHA and the ICA majority

asserted that Bryant is distinguishable from the present case

because the Boston Housing Authority used summary eviction

proceedings pursuant to a Massachusetts statute.           Id. at 1062.

The court in Bryant held that summary proceedings were


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inappropriate because “the right of peremptory termination of a

lease is limited by statute to violations of provisions that

forbid crimes that are physically destructive, violent,

associated with violence, or visibly asocial[,]” and Bryant’s

conduct did not fall under this statute.         Id. at 1062-63.

However, while the present case is somewhat distinguishable

because there is no comparable Hawai#i statute allowing for

summary proceedings, Bryant’s discussion of the lack of evidence

supporting an actual threat is still instructive.           The Boston

Housing Court judge reasoned that Bryant’s crime was a threat

because if the employee’s credit had been exceeded and the

employee had been unable to use it in an emergency, Bryant’s

conduct would have threatened the employee’s health and safety.

Id. at 1062.   However, the Appeals Court disagreed and reversed

the Boston Housing Court stating, “[t]he difficulty with this

reasoning is that it rests on a chain of conjecture about

hypothetical facts . . . [a] legal conclusion should not rest on

a foundation of entirely fictitious events.”          Id.

          Taken together, these cases all support the conclusion

that the mere showing of some criminal activity is not enough to

violate this provision; there must be evidence supporting a

finding of an actual threat to the health, safety, or peaceful

enjoyment of the premises by other residents or management.             A


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conclusory assertion that the removal of a stop sign is a threat

to resident safety, or that graffiti is a threat to peaceful

enjoyment, or that one resident’s theft is a threat to the health

and safety of the others is not enough.          If it were enough, a

violation of the provision could rest on a public housing

authority’s assumption of facts and circumstances not in the

record and would render the limiting phrase “that threatens the

health, safety, or peaceful enjoyment of the premises”

inoperative.    Almost any criminal activity could hypothetically

pose a threat to others.       Whether criminal activity actually

threatens health, safety, or peaceful enjoyment of the premises

is a fact-driven analysis, and there must be evidence to support

these facts.

           In this case, the evidence supporting a conclusion that

Kolio’s theft threatened the health, safety, or peaceful

enjoyment of the premises was limited to Manager Renken’s report

to the Eviction Board asserting that Kolio’s theft caused

mistrust within the community and Renken’s oral testimony at the

eviction hearing about what the funds could have been used for.7

However, there was no evidence of any tenant who reported feeling

threatened by Kolio’s theft.       Additionally, there was no evidence



      7
           See supra Part I.A regarding Renken’s testimony at the eviction
hearing.

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as to what kind of programs the funds had been used for in the

past or what programs were planned but then canceled due to the

absence of funds.    It cannot be assumed that Kolio’s theft was or

would have been a threat, and HPHA failed to carry its burden of

proving that Kolio violated Section 8(p)(1) of the Rental

Agreement.

          Therefore, although the HPHA Eviction Board was acting

within its realm of discretion when it determined that Kolio’s

theft violated Section 8(p)(1) of the Rental Agreement, there was

no evidence on which they could have reasonably relied in making

that determination.     An assumption that Kolio’s theft was a

threat, without supporting factual evidence, is not enough.

Therefore, the ICA gravely erred in affirming the Eviction

Board’s Order because the Eviction Board abused its discretion.

          Furthermore, as a matter of public policy, it should be

noted that administrative agencies are bound to abide by the

administrative rules that govern that particular agency.            Here,

HAR § 17-2020 contains the rules governing the practice and

procedure for terminating the tenancy of a person occupying a

unit in a project that is owned or operated by HPHA.            HAR § 17-

2020-1.   A definition of criminal activity can be found in HAR §

17-2020-2.   Although the definition was changed in 2014, the

definition of criminal activity at the time that Kolio was


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evicted stated the following:
                “Criminal activity” means the tenant, any member of
          the tenant’s household, a guest or another person under the
          tenant’s control has engaged in:
                (1) the illegal manufacture, sale, distribution, or
          use of a drug, or the possession of a drug with intent to
          manufacture, sell, distribute, or use the drug; or
                (2) any illegal activity that has as one of its
          elements the use, attempted use, or threatened use of
          physical force substantial enough to cause, or be reasonably
          likely to cause, serious bodily injury or property damage;
          regardless of whether there has been an arrest or conviction
          for such activity and without satisfying the standard of
          proof used for a criminal conviction.

HAR § 17-2020-2 (effective 2004-2014).         Kolio’s misappropriation

of Association funds did not involve drugs or the use of force,

and accordingly, it did not constitute criminal activity for

which Kolio could have been evicted under the rules controlling

evictions by HPHA.

                            IV.   CONCLUSION

          In conclusion, the Eviction Board erred when it held

that Kolio violated the Rental Agreement.         Accordingly, we

reverse the ICA’s June 25, 2014 judgment on appeal, reverse the

circuit court’s April 12, 2013 judgment, and reverse the HPHA’s

September 21, 2012 Findings of Fact, Conclusions of Law, Decision

and Order.

Philip W. Miyoshi                        /s/ Mark E. Recktenwald
for petitioner
                                         /s/ Paula A. Nakayama
Craig Iha, John C. Wong,
Diane K. Taira and                       /s/ Sabrina S. McKenna
Jennifer R. Sugita
for respondent                           /s/ Richard W. Pollack

                                         /s/ Michael D. Wilson

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