\u2018Aina Le\u2018a, Inc., owner of more than 1,000 acres of land near the Big Island town of Waikoloa, has effectively lost a foreclosure lawsuit that was brought against it by the creditor whose loan allowed the company to climb out of bankruptcy two and a half years ago. A minute order issued by 3rd Circuit Judge Wendy DeWeese on November 23 granted the motion for summary judgment and foreclosure decree sought by Iron Horse Credit, LLC.<\/p>\n\n\n\n
The company has been struggling for more than a decade to develop the\u00a0property, which was first placed in the\u00a0state Urban land use district more than 30 years ago. A decade ago, it began to build townhouses on the most mauka (upland) portion of the property, but, for a number of reasons, including a dispute over requirements of the state\u2019s\u00a0environmental disclosure law and financing issues, work on the property has stalled.<\/p>\n\n\n\n
Following a court hearing in November, DeWeese issued her order, stating\u00a0that the court \u201cfinds it is undisputed\u00a0that borrower \u2018Aina Le\u2018a, Inc., and its related entities … have failed to make the agreed monthly payments under [Iron Horse\u2019s] note and mortgage, that such failure constitutes an \u2018Event of Default\u2019 under the loan agreement, and that the loan agreement gives Iron Horse Credit, LLC, the right to accelerate the note and take possession of the project.\u201d Iron Horse attorneys were instructed to draft\u00a0the order, which was filed with the court\u00a0on December 10.<\/p>\n\n\n\n
The draft order authorizes a foreclosure auction of Iron Horse\u2019s interests in the secured property. The sale is to be\u00a0subject to confirmation by the court\u00a0and shall be \u201cfree and clear of any and all claims … except for the interests of\u201d three other \u2018Aina Le\u2018a creditors: Libo Zhang, a Chinese national; Romspen Investment Corporation, of Canada; and Bridge \u2018Aina Le\u2018a, LLC, of the Commonwealth of the Northern Mari- ana Islands. Bridge \u2018Aina Le\u2018a was the owner of the land prior to its sale to the corporate predecessor of \u2018Aina Le\u2018a.<\/p>\n\n\n\n
DeWeese\u2019s minute order dealt not only with Iron Horse\u2019s claim against \u2018Aina Le\u2018a, but it also addressed \u2018Aina Le\u2018a\u2019s third-party claim against the County of Hawai\u2018i, in which \u2018Aina Le\u2018a blames the county for its inability to perform on the Iron Horse loan. County attorneys had argued for dismissal of the complaint. Among other things, they noted that much the same claim was being litigated in a different lawsuit that \u2018Aina Le\u2018a made against the county in 2020. Litigation in that case was put on hold shortly after the administration of Mayor Mitch Roth was installed in the hope that the county and \u2018Aina Le\u2018a could work out a way to move its development forward that would satisfy the interests of both parties.<\/p>\n\n\n\n
During the November hearing, comments from the judge suggested she was sympathetic to \u2018Aina Le\u2018a\u2019s claim that the county bore at least some responsibility for the difficulties it had experienced.<\/p>\n\n\n\n
\u2018Aina Le\u2018a has argued, DeWeese said, \u201cthat the county somehow wrongfully refused to move forward with the environmental impact statement, or what have you, and that that then interfered with \u2018Aina Le\u2018a\u2019s ability to carry out its land use action plan, which then led to default.\u201d<\/p>\n\n\n\n
\u201cIf that is indeed the case,\u201d she continued, \u201cthen … why is the third-party complaint under those facts not correct procedurally?\u201d<\/p>\n\n\n\n
Ryan Thomas, the deputy corporation counsel arguing for the county, replied that the \u201cland use action plan\u201d \u2013 a unilateral plan presented to the creditors during bankruptcy as providing a path- way to move forward with development plans \u2013 \u201cwas all on \u2018Aina Le\u2018a.\u201d<\/p>\n\n\n\n
The following week, when DeWeese issued her minute order, she indicated that she was not convinced by the county\u2019s arguments. She rejected the county\u2019s motion to dismiss, noting that the third-party complaint \u201cincludes claims for breach of covenant of good faith, interference with business advantage, [and] negligence,\u201d in addition to the claims made in the 2020 complaint.<\/p>\n\n\n\n
The court, she wrote, \u201ccannot find that the claims in the third-party complaint are independent of those\u201d in the original complaint (that is, they differed from those alleged in the 2020 lawsuit), nor could the court determine that they are the same. In light of that, DeWeese rejected the county\u2019s motion to dismiss.<\/p>\n\n\n\n
Among the many twists in the long \u2018Aina Le\u2018a saga is this: the county corporation counsel, Elizabeth Strance, who now represents the county as it is being sued by \u2018Aina Le\u2018a, was the 3rd Circuit judge who, back in 2012, sided with \u2018Aina Le\u2018a when it challenged the state Land Use Commission\u2019s action to revert the property from the Urban district to the state Agricultural district.<\/p>\n\n\n\n
\u2014 Patricia Tummons<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" ‘Aina Le‘a, Inc., owner of more than 1,000 acres of land near the Big Island town of Waikoloa, has effectively lost a foreclosure lawsuit that was brought against it by the creditor whose loan allowed the company to climb out … Continued<\/a><\/p>\n","protected":false},"author":1,"featured_media":7162,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[492,338],"tags":[7],"class_list":["post-14157","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-january-2022","category-land-use","tag-patricia-tummons"],"_links":{"self":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/14157","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14157"}],"version-history":[{"count":0,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/14157\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/media\/7162"}],"wp:attachment":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14157"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14157"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14157"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}