Attorneys representing Big Island logging company Steve’s Ag Services, Ltd., and its former partner Contract Milling, LLC, have responded to a suit filed by Damon Estate that seeks to recover costs incurred as a result of the loggers’ actions. Their answer is a countersuit that throws back into the estate’s face its accusations of breach of contract and negligence – and adds a few more charges for good measure.
In April 2003, the Land Board fined Damon Estate roughly half a million dollars for illegal logging conducted by Steve’s Ag Services and Contract Milling on the estate’s Kahuku Ranch. As landowner, the estate took responsibility for the Conservation Dis trict violations. In accordance with the Land Board’s decision, the estate spent a quarter of a million dollars restoring the Conservation District area where logging had occurred.
The original complaint, filed last February in Third Circuit Court in Hilo, accuses Steve’s Ag and Contract Milling of breach of contract and negligence, among other things. In 1992, Steve’s Ag had entered into an agreement with Damon Estate to harvest dead and dis eased trees from Kahuku Ranch and pay the estate $800 per thousand board feet of koa taken. (Over seven years of logging, Kahuku Ranch/Damon Trust was paid $400,000, according to the countersuit by Steve’s Ag.) The estate’s complaint argues that under the agreements, Steve’s Ag was responsible for obtaining all necessary permits, which would have included a Conservation District Use Permit.
But the response to the complaint, filed on April 12 by Ronald Self, an attorney repre senting Steve’s Ag Services, states that none of the loggers knew that a significant portion of Kahuku Ranch was in the Conservation Dis trict. No one with Damon Estate “ever told them, at any relevant time, that the Ranch was anything other than an agricultural ranch… Defendants are informed and believe that Plaintiffs failed to disclose the status of their Kahuku Ranch conservation land so that Defendants would enter the sharing agree ments and make illegal profits for Plaintiffs,” their response states.
What’s more, Self argues, Damon Estate was responsible for selecting the location of the trees to be harvested and the roads to be cleared, and that obtaining a CDUP was a “non-delegable legal duty” of the estate.
Self also filed a counterclaim against the Damon trustees on behalf of Steve’s Ag Ser vices, its owner Steve Bacziewicz, and his wife, Iris.
The Department of Land and Natural Resources discovered in May 2001 that illegal logging had taken place in the Conservation District near Kipahoehoe Natural Area Re serve in South Kona. According to the countersuit, the Bacziewiczes attempted to find out whether or not they had inadvert ently taken timber from Conservation Dis trict land. During the DLNR enforcement division’s investigation into the matter, “Damon Estate management was representing and acting as if it had no knowledge or information about their ranch lands or its conservation status,” the suit states.
Then in January 2002, the couple’s world “came crashing down on them like a hell storm,” when armed DLNR enforcement officers descended on the Baczkiewiczes’ Volcano home, the suit continues. The offic ers, Self writes, confiscated all records and computers they could find.
Based in part on the evidence collected by the DLNR’s Division of Conservation and Resources Enforcement agents, the Land Board in April 2003 determined that Damon Estate had violated Conservation District rules by allowing the illegal logging, and in June 2003, it voted to fine Steve’s Ag and Contract Milling nearly $2 million for log ging and clearing state land adjacent to Kahuku Ranch without a license.
The countersuit seeks general, special and punitive damages, as well as attorney’s fees and costs.
Contract Milling
On April 11, Contract Milling’s attorney William Chikasuye also responded to the Damon complaint, stating that while his clients assisted Steve’s Ag in logging Kahuku Ranch, they never entered into any contracts with Damon Estate or Kahuku Ranch, and therefore were not party to any breach of contract. The response adds that if improper conduct occurred, it was that of Steve’s Ag’s.
Furthermore, the response states, Damon Estate has made claims against Contract Milling’s owners Wesley and Raymond McGee that have resulted in “loss of business reputation and income, and…severe mental and emotional distress, in an amount which shall be proven at trial.”
Logging Violation Case
Turns on Ownership
On January 27, a Land Board hearing officer presiding over a case regarding Steve’s Ag Services and Contract Milling’s $1.5 million fine for clearing and logging unencumbered state land in South Kona issued his recommendation: Dismiss the case without prejudice.
After receiving testimony last year from owned all of the land. After the mahele of title and property experts on the history of 1848, in which lands throughout the islands the logged tract, the hearing officer, attorney Benjamin Matsubara, determined that there was a “genuine dispute” over owner ship of the 169-acre parcel and that he did not have the authority to settle it.
Despite Matsubara’s suggestion that the ownership issue should be settled in Circuit Court, the Land Board held oral arguments on his findings on May 12.
In his opening statements, deputy attor ney general Bill Wynhoff attacked claims that the Land Board did not have the au thority to hear arguments about whether the land is owned by the state.
For the Land Board to turn to the courts to resolve ownership disputes – whether in this case or any other – would be an abdica tion of the board’s responsibility, he said.
If what Matsubara (and the petitioners) claimed was true, Wynhoff said, “the only way you could ever hear a case is if violators admit its state property.” The Land Board does have jurisdiction to decide whether the parcel exists as a parcel of record and whether the state owns it, he insisted.
Wynhoff then proceeded to explain how the tract came to exist and why the state owns it:
Under the Hawaiian monarchy, the king owned all of the land. After the mahele of 1848, in whichh lands throughout the islands were divided for sale or assignment, the state (as the kingdom’s successor) became the owner of all lands that had not been conveyed to other landowners. As a result, 95 percent of state lands don’t have title records, he said.
The loggers’ representatives have argued that because no title documents exist for the property, the state cannot prove its owner ship of it. Any serious consideration of such an argument, though, Wynhoff told the board, would be a “huge mistake.”
During the contested case hearing last year, witnesses for the state testified that the parcel was created by surveying mistakes. Around 1900, surveyors accidentally left a small chunk of un-conveyed (and therefore, state-owned) land sitting between the ahupua‘a of Kahuku and properties known as Alika and Papa 1, he argued. The attorney for the loggers argued that despite the mistakes in the survey maps, other documents relating to the sale of Kahuku, Alika, and Papa 1 indicate that all the land in the area was conveyed into private hands.
“The question is, was this property ever sold to Kahuku?” Wynhoff told the Land Board in May.
The South Kona ahupua‘a of Kahuku was sold in 1861 to a man named C.C. Harris. At the time, the territorial govern ment delineated the property using ancient boundary markers called ahu, which are basically stacks of stones.
Then in 1875, Harris sold Kahuku to Kahuku Ranch. A survey done in conjunc tion with the sale led to the creation of a Certificate of Boundaries, a document Wynhoff calls ambiguous. What’s more, he said, the certificate’s western boundary line for Kahuku is wrong because it doesn’t follow the ancient ahu.
When the territorial government sold off the properties west of Kahuku known as Alika and Papa 1, the eastern border for Papa 1 on surveyor Sam Kanakanui’s map did not match up with the western border of Kahuku, leaving a 1000-foot wide gap between Kahuku and these two properties.
All parties agreed that the government intended to have Kahuku’s western bound ary and Alika’s and Papa 1’s eastern bound aries abut each other. However, Wynhoff said, the surveying mistakes, plus the fact that the ahus are not on the Kahuku prop erty, means that the property in that gap was never conveyed.
In his rebuttal to Wynhoff, the loggers’ attorney, Douglas Ing, focused on how surveyors had treated the courses, or bound ary segments, of Alika and Papa 1.
When both properties were conveyed in the early 1900s, he said, their metes and bounds and course descriptions state that their eastern boundaries run “along the Kahuku boundary.” (Wynhoff argued, however, that the location of ahus takes precedence over metes and bounds and course descriptions.) Ing also noted that between 1876, when Kahuku was conveyed, and 1908, when the last of the Alika/Papa 1 lands were sold, “you have 32 years where everyone understood that the subject parcel was in Kahuku.”
The Land Board is expected to decide on this case some time this month.
— Teresa Dawson
Volume 15, Number 12 June 2005
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