Maui oceanfront property lawsuit for equitable estoppel – the doctrine that when a citizen acts in good faith reliance on government actions, the government cannot then turn around and pull the rug out from under him.
New Maui lawsuit alleges
criminal conspiracy
reprinted courtesy Maui News 3/8/07
HONOLULU – Asghar Sadri, owner of the middle lot at Montana Beach, has sued two former mayors of Maui, Corporation Counsel Brian Moto and three other former county officials in U.S. District Court under the RICO (Racketeer Influenced and Corrupt Organizations) Act.
Sadri alleges that a conspiracy of public officials dating to 2001 deprived him of the right to build a house on the beach, and that the conspiracy is continuing. He is suing the six as individuals.
The six are James "Kimo" Apana, mayor from 1999 to 2002; Alan Arakawa, mayor from 2002 to 2006; Moto, corporation counsel under Arakawa and still in that job under Mayor Charmaine Tavares; James Takayesu, corporation counsel under Apana; John Min, Apana’s planning director; and Richard Minatoya, formerly a deputy corporation counsel.
Last week, the County Council Policy Committee met behind closed doors to decide what to bring to the table in a last-ditch settlement negotiation with Sadri that was ordered by 2nd Circuit Judge Shackley Raffetto in a separate, state lawsuit. If that doesn’t succeed by next Thursday, the state suit will go back to arguments in court.
Meanwhile, a similar – in many paragraphs, identically worded – federal suit against the county and current and former members of the Maui Planning Commission is making fairly slow progress in U.S. District Court.
That suit, filed for Sadri by lawyer Deborah Wright in August, alleges constitutional violations, conspiracy to violate civil rights and equitable estoppel – the doctrine that when a citizen acts in good faith reliance on government actions, the government cannot then turn around and pull the rug out from under him.
The new suit, filed for Sadri in the same federal court by lawyer Jim Fosbinder, relies on the same evidence but a completely different legal theory – that county officials canceled building permits and a special management area exemption on Sadri’s lot, but let him know that he could get them back if he would just give the county a walkway along the ocean to the county.
Fosbinder alleges that Apana started the conspiracy because he foresaw political advantage against Arakawa, then a council member, in a coming contest for mayor.
Allegedly, the other conspirators cooperated because they hoped to keep their jobs if Apana were re-elected, which he was not.
Apana said Wednesday that he had not been served and did not know anything about the new suit.
Depositions taken in earlier lawsuits over the Montana Beach permits provided much of the evidence for both Sadri’s suits, including Wright’s version of the June 2001 meeting where, she said, Apana first threatened to cancel the permits unless the county got its beach path.
According to Fosbinder, the conspiracy continued even after Arakawa defeated Apana in the 2002 election. Takayesu was replaced by Moto, the suit says, and Min by Mike Foley. But the same threat – no permits unless Sadri turned over the land – continued under the new regime, the suit says.
Arakawa, who had not seen the suit, denied it.
"I wasn’t even around (when the conspiracy allegedly began in the summer of 2001)," he said. "I can’t possibly be a criminal conspirator."
He added, "If they want to do frivolous lawsuits, they can do whatever they feel like."
Arakawa said Sadri "and the others" are "trying to make money off their project."
Although Sadri says his monetary damages exceed $20 million, Wright says he does not want the county to buy his lot, as it did the other two Montana Beach lots. He wants his SMA exemption and building permits to proceed with construction although two other owners of the condominium lots have relented and allowed the county to take over the properties for more than $6 million.
Opposition to the development on the 5.5-acre former lime kiln site next to Baldwin Beach Park broke out in early 2001 when one house was near completion in the three-unit project.
Three luxury house projects had been granted waivers from normal county special management area requirements as residential units. But when a public protest broke out over the developments next to the park, then- Planning Director John Min withdrew the SMA exemptions and building permits that had been issued, agreeing that the waiver allowing three houses to be built did not comply with state Coastal Zone Management law.
However, Sadri (in Wright’s suit) claims equitable estoppel – at the time he spent money when he did have permits, he was relying on the county approvals.
If the county were wrong, the reasoning goes, the county owes compensation.
But the county, after initially blocking construction, made an offer to allow work to proceed. One claim is that Apana verbally sought to have the landowners donate beach land.
In a written settlement proposal made in February 2005, Moto offered to reinstate the permits and allow construction to resume in exchange for a lateral access along the shore.
That proposal didn’t go anywhere, but it contains the kernel of Fosbinder’s argument – that the county tried and kept trying to extort real estate from Sadri (and the other owners) in exchange for permits and SMA exemptions.
Fosbinder says state law has a specific definition of extortion, and the county’s actions fit it.
To demonstrate the county’s bad faith, Fosbinder (and, separately, Wright) allege that the county spoke out of both sides of its mouth during years of lawsuits and contested case proceedings.
For example, Fosbinder alleges that in September 2002, Takayesu, then the corporation counsel, told a contested case hearings officer that "the Maui Planning Commission is not a court of equity nor is it equipped to deal with the constitutional issues raised by a ’vested rights’ claim."
But 13 months later, the suit alleges, Deputy Corporation Counsel Madelyn D’Enbeau submitted a motion in U.S. District Court saying "there can be no dispute that plaintiffs (the Hollands) may raise their constitutional claims during the contested case hearing and/or on judicial review."
Besides the RICO claims, Fosbinder alleges violation of due process and seeks an injunction and declaratory judgment to prevent the county from continuing its "contradictory and self-serving" behavior, conspiracy to violate civil rights and intentional infliction of emotional distress.
Sadri wants a jury trial.
Moto said he was aware of the suit but that the county had not been served and he had no comment.
Harry
Eagar can be reached at heagar@mauinews.com.
MONTANA BEACH / TIMELINE
The former Paia lime kiln site, used by Hawaiian Commercial & Sugar Co. to produce agricultural lime, was sold in 1992. An effort to develop the property has led to a series of legal actions by and against Maui County:
MAY 1995 – Owner Kurt Ulmer consolidates the five lots he purchased in 1992, then establishes a condominium with three "apartments," which in layman’s language would be "lots."
APRIL 1997 – Ulmer obtains two building permits for dwellings, under an owner-builder plan review waiver.
APRIL 1998 – Ulmer obtains a written exemption from special management area permit requirements for one of his building permits.
MARCH 1999 – Ulmer gets another plan review waiver building permit for a third dwelling.
JULY 1999 – Ulmer incorporates property as Montana Beach LLC, sells Apartment A and transfers B and C to new company.
JANUARY 2000 – Asghar Sadri agrees to buy the middle lot ("Apartment B") for $2.5 million and makes a down payment of $125,000. Later, Sadri sues Ulmer, demanding that he complete the sale, which is to include building permits. After arbitration, in 2004, Ulmer is told to complete the sale. However, because he has not been able to recover the permits, the sale has not yet closed.
MAY 2000 – Ulmer renews the building permit for Apartment B, which at 2.9 acres occupies more than half of the original property.
SEPTEMBER 2000 – Maui County introduces Form SM-5, its first formal document to establish SMA exemptions. Ulmer and Dennis and Dianne Holland, who had purchased Apartment A, obtain SM-5 exemptions from John Min, the planning director, in December 2000 and January 2001.
SEPTEMBER 2000 – During the revision of the Wailuku-Kahului Community Plan, the county rezones the lime kiln site from interim to urban reserve.
JANUARY 2001 – Upcountry resident Christina Hemming appeals the SM-5 exemptions, saying the exemption is available only to a single parcel and that because the three lots are linked through a condominium regime, that makes each one part of a larger development and therefore ineligible for an exemption. She also contends there should be a shoreline certification.
JUNE 2001 – Mayor James "Kimo" Apana meets the owners or their representatives about a resolution to the controversy. Participants in a meeting later testify that Apana demanded shoreline access or he would cancel the building permits and rescind the SMA exemptions. Apana denies this.
JULY 2001 – Apana asks Corporation Counsel James Takayesu for an opinion letter about the county’s practice of granting SMA exemptions when more than one dwelling is constructed on a condominium lot.
JULY 2001 – Deputy Corporation Counsel Richard Minatoya tells Apana the exemption policy has been in effect but "is probably invalid."
JULY 2001 – Apana writes Min, telling him to work with the Department of Public Works and Waste Management to issue stop work orders and rescind the building permits.
AUGUST 2001 – Min withdraws his SMA exemptions. The county posts stop work orders. The Hollands are evicted, although they say they were not occupying the house anyway.
OCTOBER 2001 – The county changes its practices regarding SMA exemptions to conform to state law.
MARCH 2002 – The Hollands sue in 2nd Circuit Court to recover their permits and exemption.
FEBRUARY 2005 – Settlement talks begin.
AUGUST 2005 – County Council agrees to settlement with Hollands and Michael Weidner, owner of Apartment C, for $6.4 million to settle their claims.
AUGUST 2006 – Sadri, who did not agree to the Holland-Weidner settlement, sues Montana Beach LLC, the county, and members of the planning commission in U.S. District Court alleging violations of constitutional rights, conspiracy to violate civil rights and equitable estoppel.
MARCH 2007 – Sadri sues former Mayors Apana and Arakawa and four other county officials in U.S. District Court, alleging RICO conspiracy.
reprinted courtesy Maui News 2/4/07
original story at: www mauinews.com/story.aspx?id=28385
brought to you by Wailea Makena Real Estate Inc.
www.wailea-makena-real-estate.com
Peter Gelsey R (PB)
Wailea Makena Real Estate, Inc.
direct (808) 344-8000
Toll free 800-482-5089
email pgelsey@aol.com