HILO, Hawai‘i — A California woman being sued by a developer whose contractor mistakenly built a house on her Hawaiian Paradise Park lot in Puna is seeking more than $1.3 million in damages, according to both the developer and Hawaii County.
After a week of testimony in Kona Circuit Court last month, the case of Keaau Development Partners vs. Annaleine “Anne” Reynolds, Third Circuit Chief Judge Robert Kim advised the parties to settle their claims.
The state Judiciary’s website doesn’t specify a date for a settlement conference, but according to documents, the numerous parties in the case are ordered to meet with each other to “confer in good faith” at least 21 days before a conference about issues including: the basis for their claims and defenses; possibilities for promptly resolving the case; initial disclosures and a proposed discovery plan.
Keaau Development is seeking general damages of $307,318.57 and special damages between $200,000 and $300,000 for speculative loss profits had the home been sold.
The parties have filed settlement conference statements. The county, which is being sued by Keaau Development for issuing permits for the house’s construction, has filed a motion to dismiss the case against it.
“Special damages are being demanded by defendant Reynolds in excess of $1 million in a letter sent to the county and plaintiff and defendant (PJ’s Construction) on May 13, 2024,” Deputy Corporation Counsel Sherilyn Tavares said in the county’s filing. “The county has no intention of responding to Reynolds’ demand at this time.”
Keaau Development has filed a motion for partial summary judgment against Reynolds. They are asking the judge to find that Reynolds’ methodology in calculating her damages to real property are higher than allowed under property damage measurement rules.
According to the developer, Reynolds — who bought the lot for $22,000 at a property tax auction in 2018 and has asked for the lot to be returned to its original, predevelopment condition — “claims to have suffered total damages of no less than $1,399,808.64.”
The developer also is asking that Reynolds’ request for reimbursement of her attorney fees be denied, saying that legal precedent “does not authorize the court to award attorney’s fees in tort actions.”
In its lawsuit, Keaau Development is accusing Reynolds of unjust enrichment. The developer is making the same claim against previous lot owner Leora White Thompson, whom the county said defaulted on property taxes and/or Thompson’s assigns or heirs, questioning whether Reynolds has a clean title to the property.
In addition, the developer accuses its contractor, Patrick John Lawrence Jr., doing business as PJ’s Construction, of breach of contract for building on the wrong property, as well as architect Robert Smelker.
Lawrence claims the master contract to build 12 homes on HPP lots owned by Keaau Development Partnership provided that the developer “would provide a survey for the proper performance of the work.”
“Defendant PJ’s Construction had requested that (Keaau Development) provide a survey for the first two homes to be built under the master contract, but the request was rejected,” PJ’s settlement conference statement claims. “Defendant PJ’s Construction therefore proceeded with the construction of the home on Lot 115 based upon the same method it had used for the eight prior houses built for the plaintiff, but mistakenly built the house on Lot 114.
“The construction of the house was completed on or about April 6, 2023.”
PJ’s contention is that Keaau Development’s failure to provide a survey constitutes a breach of contract by the developer.
According to Smelker, the three-bedroom house is a package home design sold by HPM Building Supply.
“Since the design had been prepermitted by the County of Hawaii, new permits for the construction of the design on other property could be obtained much quicker than the lengthy permit review process for new designs, which was a major marketing factor for HPM,” his document states.
According to Smelker, he re-reviewed and updated plans for the home. He was hired by HPM and did his work on HPM’s premises. While Smelker’s architectural stamp is on the drawings, the drawings are owned by HPM and its copyright is at the bottom of the page. The drawings specifically note the house was to be built on Lot 115.
Smelker’s contention is that any claims against him “are without any foundation in either fact or law.”
Reynolds statement said Keaau Development and PJ’s negligently built a home entirely on her property, and “the legal foundation for these claims crumbles in the absence of any demonstrable obligation or indebtedness of the part of Reynolds.”
“Somehow, all necessary building permits were obtained after which they cleared … much of the property of its flora and fauna,” the document states. “They completed the construction of a house entirely on Reynolds’ land and then managed to close the building permit. They even listed the property for sale and found a buyer.
“The shocking truth only emerged when a title report was run for the prospective buyer, revealing that the house had been built entirely on the wrong acre of land.”
Email John Burnett at jburnett@hawaiitribune-herald.com.
