Judge on Big Island orders developer to demolish house on wrong lot

A construction company that accidentally built a home on a Hawaiian Paradise Park lot owned by a California woman has been ordered to pay for the structure’s demolition and debris removal.

Third Circuit Chief Judge Robert Kim issued the order Monday in response to a request for a preliminary injunction from Annaleine “Anne” Reynolds, the property owner. The contractor who built the house for Keaau Development Partnership is Patrick John Lawrence Jr., doing business as PJ’s Construction.

Kim denied Reynolds’ request to restore her 1-acre parcel — which she purchased for $22,000 at a county tax auction in 2018 — to its original pre-development condition, deeming it “impossible to return the property to its original able to bring back.”

“However, Ms. Reynolds will be able to present a case at trial for all damages, if any,” the judge noted in his order.

The judge also ruled that Reynolds is entitled to “reasonable attorneys’ fees and costs.”

Furthermore, Kim ruled that PJs can seek reimbursement from KDP in court for the demolition.

KDP sued PJ’s and Reynolds after learning the house was built on her lot on 8th Avenue instead of on an adjacent lot owned by KDP. The civil lawsuit came after Reynolds rejected KDP’s bid for the adjacent parcel in a proposed land swap and made a counteroffer that the developer found unacceptable.

That lawsuit is still ongoing, and KDP is seeking general damages of $307,318 and special damages between $200,000 and $300,000 for lost profits if the home had been sold.

The judge heard evidence on Reynolds’ request for an injunction in his Kona courtroom on three dates in April. He ruled that Reynolds will likely prevail at trial “on the merits as she is an innocent victim in this case.”

“This was not a minor violation, but an entire house was built (on the wrong lot),” Kim wrote. “This included the complete grading of (Reynolds’ property), the removal of all natural flora and fauna, the installation of a septic tank and the construction of a catchment area.”

Kim ruled that both the developer and contractor “intentionally took a major risk” by continuing to clear and build the lot without conducting an investigation.

“By taking a risk, they were taking the risk that a negligent error could be made,” he noted.

Both Lawrence and Reynolds said they learned from Dana Kenny of Savio Realty that the home was built on the wrong property after Kenny sold the completed home for the developer and performed a title check for the potential buyer.

The developer and contractor argued that Reynolds had no clear title to the property because Leora White, the former owner of the parcel who had defaulted on the tax bill, had not been located and notified by the province. Kim ruled that PJs and KDP “failed to present sufficient evidence… to establish that Ms. Reynolds’ act was defective.”

County Planning Director Steven Pause testified that the house had the proper building permits, but they were issued for the adjacent property owned by KDP, and not for Reynolds’ land.

“The public interest supports the granting of an injunction due to the negligence of KDP and PJ, because the structures violate the law and are illegal, based on the sworn testimony of Director Pause,” Kim concluded.

Both KDP and PJ, as well as their associates, are “restrained and prohibited from entering, entering, or conducting any activity or operation” on Reynolds’ property, according to the ruling.

Kim’s order directs Reynolds to submit to the court within 60 days three licensed contractors not previously associated with KDP or PJ’s to remove the unauthorized structures on her property. These companies must submit estimates for the demolition of the structures and removal of rubble, with the court selecting a contractor and approving the budget proposal, to be paid by PJs.

“All other claims for damages should be reserved for trial,” Kim wrote. A trial planning conference is scheduled for July 29.

If a settlement is not reached and the lawsuit goes to trial, Kim will not serve as chairman because he is retiring on Monday.