A construction company that mistakenly built a house on a Hawaiian Paradise Park lot owned by a California woman has been ordered to pay for the demolition of the structure and removal of debris.
Third Circuit Chief Judge Robert Kim issued the order Monday in response to a request for a preliminary injunction by Annaleine “Anne” Reynolds, the lot’s owner. The contractor who built the house for Keaau Development Partnership is Patrick John Lawrence Jr., doing business as PJ’s Construction.
Kim denied Reynolds’ request seeking to restore her one-acre lot — which she purchased for $22,000 at a county tax auction in 2018 — to its original, predevelopment condition, deeming it “impossible to return the real property to its original state.”
“However, Ms. Reynolds will be able to present a case at trial for any and all damages, if appropriate,” the judge noted in his order.
The judge also ruled that Reynolds is entitled to “reasonable attorney’s fees and costs.”
In addition, Kim ruled that PJ’s can seek reimbursement in court for the demolition from KDP.
KDP sued PJ’s and Reynolds after learning the house had been built on her 8th Avenue lot rather than an adjacent lot owned by KDP. The civil litigation came after Reynolds rejected KDP’s offer of the adjacent lot in a proposed land swap and made a counter-offer the developer found unacceptable.
That lawsuit is still active, and KDP is seeking general damages of $307,318.57 and special damages between $200,000 and $300,000 for lost profits had the home been sold.
The judge heard evidence on Reynolds’ motion for injunction in his Kona courtroom on three dates in April. He ruled that Reynolds is likely to prevail at trial “on the merits as she is an innocent victim in this case.”
“This was not a minor encroachment, but an entire house was built (on the wrong lot),” Kim wrote. “This included complete grading of (Reynolds’ lot), removal of all natural flora and fauna, installation of a septic tank and construction of a catchment system.”
Kim ruled that both the developer and contractor “intentionally took a big risk” by proceeding with the lot-clearing and construction without having a survey done.
“By taking a chance they assumed the risk that a negligent mistake could be made,” he noted.
Both Lawrence and Reynolds said they learned the house was built on the wrong property from Dana Kenny of Savio Realty, after Kenny sold the completed home for the developer and ran a title check for the prospective buyer.
The developer and contractor argued that Reynolds didn’t have clear title to the property because Leora White, the prior lot owner who had defaulted on the tax bill, hadn’t been found and given notice by the county. Kim ruled PJ’s and KDP “failed to present sufficient evidence … to establish that Ms. Reynolds’ deed was defective.”
County Planning Director Steven Pause testified that the home had the proper building permits, but they were issued for the adjacent property owned by KDP, not Reynolds’ land.
“The public interest supports the granting of injunctive relief caused by the negligence of KDP and PJ because the structures violate the law, and are illegal, based on the sworn testimony of Director Pause …,” Kim found.
Both KDP and PJ’s, as well as their associates, “are restrained and enjoined from entering, trespassing, or conducting any activities or operations on the real property” owned by Reynolds, according to the ruling.
Kim’s order instructs Reynolds, within 60 days, to present to the court three licensed contractors not previously associated with KDP or PJ’s to remove the unauthorized structures on her lot. Those companies are to submit estimates for the demolition of the structures and removal of debris, with the court selecting a contractor and approving the budget proposal, which is to be paid by PJ’s.
“All other claims involving damages are to be reserved for trial,” Kim wrote. A trial scheduling conference is set for July 29.
If a settlement isn’t reached, and the lawsuit goes to trial, Kim will not preside, because he is retiring from the bench on July 1.
Email John Burnett at jburnett@hawaiitribune-herald.com.
