Hyland v. County of Hawaii et al

Filing 273

ORDER Sua Sponte Reconsidering The Portion Of The March 16, 2016 Order Dismissing With Prejudice The Security Deposit Claims Against Defendant Hawaii Affordable Properties, Inc. re 47 . This Court HEREBY RECONSIDERS the 3/16/16 Order ins ofar as the portion of the order dismissing the security deposit claims against HAPI with prejudice is VACATED. All other portions of the 3/16/16 Order remain in effect and are not altered by the instant Order in any way.Plaintiffs' security deposit claims against HAPI in Count I of the Third Amended Complaint are properly before this Court at this time and will be addressed on the merits in connection with the parties' pending motions for summary judgment. This Court finds that th e issues relevant to the security deposit claims against HAPI were sufficiently briefed in connection with the motions for summary judgment 220 , 221 , 223 , 225 , and no further briefing is necessary. The parties' motions for summary judgment have been taken under advisement, and no further briefing will be considered unless the filing party obtains leave from this Court before filing any additional materials regarding any of the motions for summary judgment. Signed by JUDGE LESLIE E. KOBAYASHI on 9/24/2018. (cib, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
LANRIC HYLAND, ET AL.,

)
)
Plaintiffs,
)
)
vs.
)
)
OFFICE OF HOUSING & COMMUNITY )
DEVELOPMENT, ET AL.,
)
)
Defendants.
)
_____________________________ )

CIVIL 15-00504 LEK-RLP

ORDER SUA SPONTE RECONSIDERING THE PORTION OF THE MARCH 16, 2016
ORDER DISMISSING WITH PREJUDICE THE SECURITY DEPOSIT
CLAIMS AGAINST DEFENDANT HAWAII AFFORDABLE PROPERTIES, INC.
On August 11, 2015, Plaintiff Lanric Hyland
(“Plaintiff” or “Hyland”), who was proceeding pro se at the time,
filed his “Verified Complaint of Lanric Hyland; Complaint for
Complaint for [sic] Declaratory & Injunctive Relief; Appeal from
Declaratory Petition” (“Complaint”).

[Notice of Removal, filed

12/9/15 (dkt. no. 1), Decl. of Melody Parker, Exh. A.]

The

defendants named in the Complaint were Defendants Office of
Housing & Community Development (“OHCD”) and the County of
Hawai`i (collectively “the County Defendants”); Hawaii Affordable
Properties, Inc. (“HAPI”); and Ainakea Senior Residences LLLP
(“Ainakea”).
I.

3/16/16 Order
On March 16, 2016, this Court issued its Order Granting

in Part and Denying in Part Defendants Office of Housing &

Community Development, County of Hawaii’s Motion to Dismiss; and
Granting in Part and Denying in Part Defendant Hawaii Affordable
Properties, Inc.’s Substantive Joinder (“3/16/16 Order”).

[Dkt.

no. 47.1]
Count I of the Complaint alleged, inter alia, that the
increase in Hyland’s security deposit for Ainakea Senior
Residences (“ASR”) violated his right to due process under the
United States Constitution and the Hawai`i State Constitution.
See 3/16/16 Order, 2016 WL 1047344, at *2.
The Complaint alleges that, pursuant to the
[Housing Assistance Payment (“HAP”)] contract
between the County Defendants and Ainakea, “the
difference between the HAP and the contract rent
is the rent paid by the resident tenant. The
tenant portion varies with each individual but it
works out that tenants generally pay about 30% of
their own monthly income as their rent.”
[Complaint at 12, § V.F.1.] Plaintiff also
describes the process through which the contract
rent is determined by the County Defendants and
Ainakea, using the [United States Department of
Housing and Urban Development determination of
fair market rent]. [Id. at 14, § V.H.] Thus,
based on the allegations in the Complaint, HAPI is
not involved in the determination of either the
contract rent or the portion of the rent that
Plaintiff must pay. . . .
Id. at *3.

Further, when the total rent – referred to as the

contract rent in the 3/16/16 Order – was increased from $800 for
the 2014-2015 lease year to $981 per month for the 2015-2016
lease year, the amount of the security deposit was increased from

1

The 3/16/16 Order is also available at 2016 WL 1047344.
2

$800 to $981.

However, tenants who were living at ASR as of

October 2014 were not subject to the increased security deposit.
Id. at *4 (citing Complaint at 12, § V.G).

This Court therefore

dismissed Hyland’s claims related to the increase in the amount
of security deposit as to all of the defendants because he did
not allege that he was required to pay the increased security
deposit for the 2015-2016 lease year.

Id.

This Court further ruled the dismissal of Hyland’s
security deposit claims against HAPI was with prejudice because
it was absolutely clear, based on the factual allegations in the
Complaint, that no amendment could cure the defect in those
claims since HAPI was not involved in the determination of the
amount of the total rent and the security deposit.
II.

Id. at *7

Current Security Deposit Claims
The operative pleading is now Plaintiffs Lanric Hyland,

Karen Martinez, and Eliza Roze’s (“Plaintiffs”) Third Amended
Complaint for Declaratory and Injunctive Relief (“Third Amended
Complaint”), filed on May 1, 2018.

[Dkt. no. 170.]

The

defendants named in the Third Amended Complaint are: OHCD; HAPI;
Ainakea and Defendant Hawaii Island Community Development
Corporation (collectively “Ainakea Defendants”).

Count I of the

Third Amended Complaint alleges that Plaintiffs are or were
overcharged for their ASR security deposits.

Count I alleges

that the overcharging violates various legal authorities.

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Plaintiffs have pled Count I against all of the defendants, in
spite of the 3/16/16 Order’s dismissal of the security deposit
claims against HAPI with prejudice.

HAPI, however, did not file

a motion to dismiss Plaintiffs’ claims in Count I against it as
violating the 3/16/16 Order.
III. Sua Sponte Reconsideration
This Court has the discretion to sua sponte reconsider
one of its prior interlocutory rulings, as long as this Court
still has jurisdiction over the subject matter of the ruling.
Pac. Radiation Oncology, LLC v. Queen’s Med. Ctr., CIVIL
NO. 12-00064 LEK-KSC, 2016 WL 6996982, at *6 (D. Hawai`i Nov. 23,
2016) (citing United States v. Smith, 389 F.3d 944, 949 (9th Cir.
2004)).

In Smith, the Ninth Circuit explained that the law of

the case doctrine does not preclude such reconsideration.
The law of the case doctrine is “wholly
inapposite” to circumstances where a district
court seeks to reconsider an order over which it
has not been divested of jurisdiction. See [City
of Los Angeles v.] Santa Monica Baykeeper, 254
F.3d [882,] 888 [(9th Cir. 2001)]. In Santa
Monica Baykeeper, the district court sua sponte
reconsidered its own order certifying for
interlocutory appeal the denial of a motion to
dismiss. Id. at 884. We were asked to assess
whether the court’s reconsideration of its order
violated the law of the case doctrine. Id. Our
analysis emphasized the importance in law of the
case doctrine jurisprudence of distinguishing
between a district court’s consideration of its
own prior decision and the directive of a higher
court:
The legal effect of the doctrine of the law
of the case depends upon whether the earlier
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ruling was made by a trial court or an
appellate court. All rulings of a trial
court are subject to revision at any time
before the entry of judgment. A trial court
may not, however, reconsider a question
decided by an appellate court.
Id. at 888-89 (quoting, with emphasis added,
[United States v.] Houser, 804 F.2d [565,] 567
[(9th Cir. 1986)]). Accordingly, we determined
that “[t]he doctrine simply does not impinge upon
a district court’s power to reconsider its own
interlocutory order provided that the district
court has not been divested of jurisdiction over
the order.” Id. at 888 (citing Houser, 804 F.2d
at 567). Because the Baykeeper district court had
rescinded its own prior order, over which it
retained jurisdiction, we resolved that the court
did not violate the law of the case doctrine. Id.
at 889.
Smith, 389 F.3d at 949 (emphasis and some alterations in Smith).
The 3/16/16 Order was an interlocutory order, and this Court
still has jurisdiction over all of the claims and the parties in
this case.

For the reasons that follow, this Court concludes

that it is necessary to sua sponte reconsider the dismissal with
prejudice of the security deposit claims against HAPI.
The parties’ motions for summary judgment are currently
pending before the Court.

[Dkt. nos. 220, 222, 223, 225, 243.]

In support of its motion for summary judgment, OHCD submitted
evidence that: 1) Ainakea entered into a contract with HAPI to
oversee ASR’s day-to-day operations; and 2) HAPI’s duties include
determining the amount of the security deposits and collecting
the security deposits.

[OHCD’s Motion for Summary Judgment,

filed 8/2/18 (dkt. no. 220), Decl. of D. Kaena Horowitz, Exh. B
5

(Decl. of Keith Kato (“Kato OHCD Decl.”)) at ¶ 8.]

In support of

its motion for summary judgment, the Ainakea Defendants submitted
similar evidence.

[Ainakea Defs.’ Separate and Concise Statement

of Facts in Supp. of Its Motion for Summary Judgment, filed
8/3/18 (dkt. no. 224), Decl. of Keith Kato (“Kato Decl.”) at
¶ 9.]

However, in support of its motion for summary judgment,

HAPI submitted testimony that it only collects the security
deposits on behalf of Ainakea, but does not set the amount of the
security deposit.

[HAPI’s Motion for Summary Judgment, filed

8/3/18 (dkt. no. 221), Decl. of Charlene Sohriakoff at ¶¶ 11,
13.]
Thus, there is competing evidence regarding the issue
of which entity determines the amount of the ASR security
deposit.

This competing evidence was not available to this Court

when it issued the 3/16/16 Order because, in ruling on the motion
to dismiss the original Complaint, this Court was limited to
considering the allegations in the Complaint.

See Daniels-Hall

v. Nat’l Educ. Ass’n, 629 F.3d 992, 998 (9th Cir. 2010).
Further, although OHCD, Ainakea, and HAPI were parties in this
case at that time, they did not inform this Court that there may
be a factual dispute concerning which entity is responsible for
determining the amount of the security deposit.

Under the

circumstances of this case, it is appropriate for this Court to
sua sponte reconsider the portion of the 3/16/16 Order dismissing
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the security deposit claims against HAPI with prejudice.

See

Local Rule LR60.1 (stating that “[m]otions for reconsideration of
interlocutory orders may be brought only upon the following
grounds: (a) Discovery of new material facts not previously
available; (b) Intervening change in law; [or] (c) Manifest error
of law or fact”).
If the evidence in the current record regarding the
determination of the amount of the security deposit were
available to this Court at the time of the 3/16/16 Order, this
Court would not have dismissed the security deposit claims
against HAPI with prejudice.

The evidence is therefore

considered newly available and constitutes grounds for
reconsideration of that ruling.

This Court HEREBY RECONSIDERS

the 3/16/16 Order insofar as the portion of the order dismissing
the security deposit claims against HAPI with prejudice is
VACATED.

All other portions of the 3/16/16 Order remain in

effect and are not altered by the instant Order in any way.
Plaintiffs’ security deposit claims against HAPI in
Count I of the Third Amended Complaint are properly before this
Court at this time and will be addressed on the merits in
connection with the parties’ pending motions for summary
judgment.

This Court finds that the issues relevant to the

security deposit claims against HAPI were sufficiently briefed in
connection with the motions for summary judgment, and no further

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briefing is necessary.

The parties’ motions for summary judgment

have been taken under advisement, and no further briefing will be
considered unless the filing party obtains leave from this Court
before filing any additional materials regarding any of the
motions for summary judgment.
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, September 24, 2018.

/s/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge

LANRIC HYLAND VS. OFFICE OF HOUSING & COMMUNITY DEVELOPMENT, ET
AL; CIVIL 15-00504 LEK-RLP; ORDER SUA SPONTE RECONSIDERING THE
PORTION OF THE MARCH 16, 2016 ORDER DISMISSING WITH PREJUDICE THE
SECURITY DEPOSIT CLAIMS AGAINST DEFENDANT HAWAII AFFORDABLE
PROPERTIES, INC.

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