Judge sides with Andrade

LIHUE — A Fifth Circuit judge on Tuesday ruled that a retired history professor will not have to turn over accounting documents to a group of his distant relatives, who say the former educator conspired with Mark Zuckerberg in order to gain sole ownership of four land parcels on the Facebook CEO’s Kilauea estate that had been in their family for over a century.

Fifth Circuit Judge Kathleen Watanabe, who has presided over the land dispute case since late 2016, essentially closed the book on the lawsuit, ruling against several of Andrade’s relatives, who had asked the court to force Andrade to disclose financial statements to the court in order to determine whether he violated court procedure by colluding with Zuckerberg in the lawsuit.

“This is just another bite at the apple, and it’s way too late” Andrade’s lawyer, Harvey Cohen, said during Tuesday’s hearing, asking the judge to deny the request.

Cohen pointed out that similar claims had already been dismissed by Watanabe and another judge who recently threw out a separate lawsuit stemming from allegations that Andrade’s $2.1 million bid was paid for by Zuckerberg, who they believe has financed the lawsuit with the intent to eventually purchase the property for himself.

The “quiet title” lawsuit was initiated by Andrade and a Zuckerberg-controlled corporation, North Shore Kalo LLC, who co-filed the suit against hundreds of Rapozo descendants over the right to consolidate ownership of the four kuleana. Zuckerberg later publicly apologized for getting involved in the family land dispute in a TGI op-ed piece, promising to end his pursuit of the land.

North Shore Kalo was removed as a plaintiff in the quiet title suit, but because it had already acquired an ownership stake in the kuleana by paying individual Rapozo descendants for their tiny fractional stakes in the land, the LLC was automatically listed among the defendants in the case.

By the time the land sold at a court-ordered public auction earlier this year, North Shore Kalo owned a greater portion of the kuleana than Andrade or any of his relatives, with 44% of the kuleana shares.

Dan Hempey, one of the attorneys representing the handful of kuleana heirs attempting to fight the court-ordered land partition, argued that the separate lawsuit failed to move forward only because the judge ruled that the two cases were duplicitous and the matter should be litigated in a single courtroom.

“I was getting two bites at the apple. Well, now I got no bites at the apple,” Hempey said, asking the judge for a chance to prove that Andrade outbid his relatives and purchased the family-owned land with money Zuckerberg paid him to keep the remaining shareholders off the property.

Hempey argued that his client and the other defendants in the lawsuit should be compensated not only for their ownership shares but for any income the kuleana may have generated.

“If we prove, for example, that Dr. Andrade has misappropriated over the years, $2 million, that’s his bid!” Hempey said, attempting to convince the judge of the importance of looking into the source of Andrade’s income. “If he was getting paid by Mark Zuckerberg, or one of those other entities, we feel those funds should be distributed equitably.”

Watanabe denied the motion asking for the financial disclosure and sided with Andrade on a second issue on the docket for Tuesday’s hearing, ruling that if the former-kuleana shareholders want to appeal her decision to finalize the sale of the land to Andrade, they would have to put up over half a million dollars to compensate the remaining shareholders for delays caused by the appeal, in the event that the higher court upholds Watanabe’s ruling.

Hempey asked Watanabe to set the bond at “a nominal amount,” but in a brief supporting Andrade’s opposing view, Cohen recommended a $627,000 bond, based on the amount of interest the $1.57 million Andrade owes to the former kuleana co-owners.

Andrade transferred the kuleana to his name last week, less than 24 hours after he was legally allowed to do so. The following morning, the state intermediate court of appeals ordered that transfer of the land deeds and auction proceeds be delayed until after Tuesday’s hearing.

The court-ordered freeze has meant that over a hundred of Andrade’s relatives who don’t care about the case have yet to be paid for their interests in the property. If one of Hempey’s clients posts the $627,000 bond, it would put proceedings on hold once again, and the matter would be taken up in appeals court, a notoriously slow process.

“I can’t tell you how many of them just want to get their money,” Cohen said, describing conversations he’s had with numerous people awaiting payment for their kuleana interests. “They’ll be devastated to learn that this could be delayed another two to three to four years.”