Both Hilo Circuit Court judges have bowed out from hearing a case involving a California woman sued by a developer whose contractor mistakenly built a house on her lot in Hawaiian Paradise Park.
After certificates of recusal were filed by Hilo Circuit Judges Henry Nakamoto and Peter Kubota in the case of Keaau Development Partnership vs. Annaleine Reynolds and others, a motion by Reynolds for a preliminary injunction and temporary restraining order against Keaau Development, PJ’s Construction and Janel M. Araujo will be heard June 14 by Third Circuit Chief Judge Robert Kim in Kailua-Kona.
The motion filed on Reynolds’ behalf by Honolulu attorney James DiPasquale requests the judge order Keaau Development and PJ’s Construction, owned by Patrick John Lawrence, remove the home they built on the property and to restore the previously undeveloped one-acre lot on 8th Avenue “to its natural state prior to the wrongful construction, through the appointment of … independent arborists and environmental consultants as necessary and required.” The motion asks that Keaau Development and PJ’s Construction pay for the lot’s restoration.
The motion also asks for a temporary restraining order to prevent Keaau Development, PJ’s Construction and Araujo — who was contracted by PJ’s to shepherd the permitting process for the home’s construction — from trespassing on the property until the injunction request can be heard.
Reynolds, PJ’s Construction and Araujo are all being sued by Keaau Development, which is trying to recoup more than $307,000 it paid to PJ’s and its subcontractors, plus another $300,000 in lost profits, interest, attorneys’ fees and damages.
Reynolds and PJ’s have filed counter-complaints against Keaau Development.
“It caught her off-guard, to say the very least,” DiPasquale said, referring to Reynolds. “In terms of what she wants or what she’s hoping to get out of this — I mean, she never wanted to be in this situation in the first place. And then, when she didn’t bend over backwards and say, ‘Fine, you take our property’ or ‘I will agree to pay you for this house that is absolutely not what I would have ever chosen,’ they sued her.
“My client didn’t even know about this. They claimed that she should’ve stepped in and stopped it or let someone know of the error. Her family lives on the Big Island, and she purchased this lot with the eventual understanding or expectation that she would build a home for her children on the Big Island. She’s a meditative healer, relationships coach, and she was going to use the land in the short term until she could afford to build the house, for various women’s retreats, things of that nature.
“When she ultimately discovered what happened, it was because a broker called and said, ‘Hey, I’ve just sold a house, and we’ve discovered that the house is on your land. So, we’ve got to figure this out.’”
Paul Fujinaga, vice president and general manger of Keaau Development Partners — which is based on Oahu — said the developer is suing Reynolds, as well as PJ’s Construction, because they offered her the adjacent lot the house was supposed to have been built on in exchange for the house and property, but she refused what he believed to be a reasonable offer.
“Her representative said, ‘Why are you talking low-ball?’ And they started asking for three properties in exchange for their property,” Lau said. “Because they claimed that the owner had some sort of spiritual attachment to the property — which I can’t believe because she bought it at a tax sale. She said (she wanted) three properties or this property, or maybe a beachfront lot. And I said, ‘No. We’re way off, now.’ We’re not even near to coming to some type of agreement.
“We had no other way to go because we tried to work with the contractor, but he wouldn’t answer and said to talk to his representative. So, we had to do this.”
Fujinaga disputed a claim made by PJ’s through its attorney, Ted Hong, that Keaau Development was unwilling to pay for a survey of the land prior to the start of construction.
“That is untrue. I heard that on the news,” Fujinaga said. “At no time did we tell him we wouldn’t do a survey. We basically gave him what he asked for. We’re off-island, and we basically depended on him for everything.”
The lawsuit also claims that Reynolds, who bought the property for about $22,500 at a Hawaii County property tax sale in 2015, doesn’t have a clear title to the lot the home was built on.
“When we spoke with our realtor and when they ran that property, they found out that it was a tax-sale property, and they couldn’t clear the title from the previous owner. So, the previous owner is still attached to the property,” Fujinaga said.
Those previous owners are named as defendants as well, as the “heirs or assigns of Leora White Thompson” — which means it’s believed the individual who defaulted on property taxes for the lot is deceased.
Hawaii County also is named as a defendant for approving permits for building the house on the wrong property.
Assistant Corporation Council J Yoshimoto said the county’s civil attorneys don’t comment on ongoing litigation.
The original lawsuit is accusing both Reynolds and Thompson’s heirs of unjust enrichment and is seeking restitution for the home’s construction.
DiPasquale described the developer naming his client as a defendant for his contractor’s mistake as “a pretty slimy move.”
“Now, she’s got land with a house she wouldn’t have chosen to build that she cannot insure, cannot secure, cannot protect from squatters. She’s in a tough situation, and I think PJ’s Construction and the developer are just trying to bully her. That’s problematic, to say the least,” he said.
“She chose this lot, specifically. This is a subdevelopment that was relatively undeveloped at the time that she bought. And she looked at other lots within the subdevelopment. And she chose this one for a reason. And to be forced into a position of giving up something that is hers for their mistake — especially a one-for-one swap — is pretty crazy, frankly. And to sue her is even crazier.
“But beyond that, her damages are connected mostly to being sued, at this point. She’s going to be continually incurring legal fees. And I believe, punitive damages are appropriate in this circumstance, and they’re warranted by law.
“So, it’s going to be a very large payday, if they’re willing to settle. I’m sure she’s open to discussing other things, but she is not going to allow them to bully her because they made a mistake.”
Email John Burnett at jburnett@hawaiitribune-herald.com.