LEGAL ACTIONS & FILES

Here’s a list of our association current and past legal actions in PDF format. Adobe Reader is necessary to view PDF files.

We will try to post updates on the current status of cases here. Please keep in mind that 100% of our board is volunteers, and if we are in a legal case, that already significantly takes up our time and
energy as it is.

As directors and especially as officers of OLCA a certain amount of scrutiny is expected. There have been slanderous remarks and even propaganda distributed at our meetings. Generally, we choose to ignore
these and let our actions speak for themselves.

If you are a Orchidland owner, you are STRONGLY encouraged to get involved or ask questions at our board meetings (dates posted on our Event Calendar).

Below where case numbers are indicated, you can find a list of, and information about legal papers filed on that suit at
http://hoohiki2.courts.state.hi.us. Once to the search page, enter the case number, click the search button, then on the case overview
page click the Document List button.

SYNOPSIS OF OUR CURRENT LEGAL SITUATION AS OF Oct 12th, 2009

11/01/07
As you may know former Board member Bob Ely and Kwan Sung are suing OLCA to intervene in current negotiations to settle a foreclosure suit that the old Board (and Bob) began more than a year ago. That
foreclosure suit has already cost the Association–that’s you and me–nearly $40,000, and the Ely-Sung suit has the potential to cost us an additional $15,000. Moreover, all of these legal proceedings
have diverted the current Board’s energies and time away from the real business of the Association: fixing the roads, building community, etc. To help you better understand the situation we offer the
following chronology of events that have led us to this point. Please take the time to read it carefully, as the legal issues have become quite complex.

If you are unfamiliar with OLCA’s history, please check out our History of Orchidland page before reading this.

On 12/21/05 the OLCA Board of Directors appointed Bob Ely Collections Manager and passed a motion to implement foreclosure proceedings on up to ten property owners at a time. Mr. Ely began immediately,
and within a few months had filed several foreclosures with the court. Stuart Oda was hired. In January 2006, Mr. Ely was admitted to the BOD.

One of the foreclosures turned out to be the father of a very prominent Honolulu attorney named Allan Murakami, who chose to fight the foreclosure. He filed a counter-suit on April 17, 2006. Nine days
later, at our General Membership Meeting, this information was not revealed. The identity of our attorney was revealed only after the membership stood up and angrily demanded it. The fact that we were
being counter-sued was kept secret for nearly a year.

In July, 2006, there was an attempt to settle. Murakami agreed to pay his fees, but would not drop the counter-suit. The BOD at that time rejected this offer. However wise or unwise this was, it
establishes that all Board members at that time were informed of the counter-suit. During this time, the membership was organizing a movement against the BOD. In September 2006, four members accepted
nominations to the BOD. In October 2006, a petition was served to the President calling for a Special Membership Meeting for the purpose of removing Bob Ely from the BOD, in accordance with the bylaws.
Rather than face the membership, Mr. Ely resigned at the November BOD meeting. The resignations of Jerry Gardner, Sherri Carden, and Carol Noel were also announced at this meeting.

On December 1, 2006, the Murakami foreclosure case was heard by the court. Stuart Oda, Steven Starnes, and Bob Ely were there representing OLCA. Again, this hearing date was kept a secret from the
community and even from the newly elected directors. When new director Dean Monroe asked Steve Starnes about the counter-suit, he was told there was none. The judge ruled in favor of Murakami,
saying that since the encumbrances were not on his deeds, he was under no obligation to the association. In February 2007, Stuart Oda filed a motion to amend the complaint on the theory of “implied
contract”, which was a new law stemming from a recent Hawaii Supreme Court decision in Kaanapali Hillside Homeowners Association vs. Doran. Check the minutes of the February 2007 Special Membership Meeting for more on this. The judge agreed to hear this
new argument. The two sides were given time to prepare their arguments. Meanwhile, more directors were elected, some stayed, some didn’t. President Glenn Pressel resigned in April 2007, leaving VP Steven
Starnes in charge. Starnes left at the end of his term on June 30, 2007.

On July 1, 2007, the new officers were installed as follows: Roger Hawney, President; Dean Monroe, VP; Lisa Tostensen, Secretary; Yen Chin, Treasurer; and Andrew Coyne, Road Chair. Dean Monroe and
Lisa Tostensen have resigned, Wes Owens is now VP. We had learned of the counter-suit through research at the Court Records Dept. in Hilo, and our first order of business was to report to our insurance
company, who promptly told us that we would not be covered because it had been kept secret from them, too, for over a year. This, of course, seriously affects where we go from here. None of us is willing
to risk our own assets for this.

We entered into settlement negotiations with Murakami hoping to resolve the situation. Bob Ely and Kwan Sung have filed a suit against us to intervene in these negotiations.

This was the status of the situation last November, and we covered it in great detail in that membership meeting. There were many opinions, but the general mood was “let’s get out of this mess as cheaply
and painlessly as possible and move forward”. We have given the Ely/Sung suit much consideration, and have concluded that it has very little merit, if any. We began negotiating with Murakami again with the
best interests of our membership in mind. This process has been slow, but so far, fairly inexpensive. But things have changed drastically in the last couple of weeks. It has become apparent that the sides
are too far apart to reach an out of court settlement. The case will proceed to the courtroom.

Had we reached a settlement, the terms would have been shared, however, the contents of our negotiations are confidential, as is normal and ethical in settlement negotiations. Suffice to say, if Murakami
had agreed to our terms, he would have suffered substantial loss, and if we had agreed to his, likewise. So the decision as to who will suffer the losses and how much will lie with the judge. And we should
get at least some definitionas to the authority of OLCA. The hearing is scheduled for July 8, 2008 at 8:30am in Judge Nakamura’s courtroom.

One would think that this would have satisfied Ely/Sung, however, they did not drop their case. The day after our attorney informed them of this new development Mr. Sung filed another complaint, a continuation
of the previous one with some additions. Yen Chin and Dawn Spurrell-Robinson were served on the eve of our Annual Membership Meeting, the rest of us were served at the beginning of the meeting.

We have posted the complaint here on this website. Those of you who have been keeping up
with the events of the past couple of years should have no trouble seeing the truth. As you read the file, please note the abundance of accusations, yet the lack of examples or substantiation. Mr. Sung
claims to be suing “on behalf of all shareholders of Orchidland Community Association, Inc.” We have been supporting our membership to the best of our abilities, and you have appeared to support us, so we
wonder how many of you actually gave him permission to do this.

Aside from being costly, these lawsuits are a time consuming nuisance. We have been working very hard to put an end to this, but
there are a couple of people who would like the litigation to continue. We currently have 7 open lawsuits, and one counterclaim. It is important to note that the current Board of Directors had nothing to
do with the initiation of any of these lawsuits. All 7 were started by Bob Ely, Shikwan Sung, or both, and the counterclaim is a response to one of these.

We will post our answer to the latest complaint once we have condensed it into legal form with our attorney. Please stay tuned…

Board of Directors
OLCA
05/22/08

Another 5 months have passed. To update the previous paragraphs, we no longer have 7 open lawsuits. We are now dealing only with the counterclaim in the foreclosure action, the latest action by Mr. Sung,
and our counterclaim in that action. All others have either been dismissed or decided.

On July 8, 2008 the court heard the foreclosure case. OLCA’s authority to collect mandatory road fees was upheld, but the right to foreclose was denied. Also, the process by which we attach liens has been
changed. We must now obtain a judicial decision for the amount owed, and then place the lien for that amount. We are now in the process of correcting this, but it will take some time. A new collections
policy needs to be established in accordance with the court’s decision, and then we must start over.

Stuart Oda, the attorney hired by the previous Board of Directors to pursue foreclosures, has asked to withdraw as counsel. He had requested this about a year ago when we wanted to attempt negotiating
a settlement, stating that he did not believe in this direction and could not represent us in these negotiations in good faith. We did not approve his withdrawal at that time due to the uncertainty of
the negotiations, and the fact that he had already been paid to prepare his case, and he had done a satisfactory job of doing so. This time, we did not object to his withdrawal, and the court has approved
it. Our replacement counsel to defend the association in the foreclosure counterclaim is Ivan Van Leer. Our first approach, of course, will be an attempt to negotiate.

The recent action by Mr. Sung has been determined to be a derivative of the previous claim, Ely/Sung vs. OLCA (to intervene in our settlement negotiations). The earlier claim has been dropped, and the derivative
claim will be treated as a continuation by our insurance company, so the costs will be applied to the same deductible under the policy. This news is bittersweet – the deductible is $15,000. We have filed an
answer, basically that it is frivolous, and a counterclaim for damages. The case is now in the discovery phase.

The real damage that these lawsuits create is our inability to fill up the Board of Directors. Peaceful people are not usually willing to jump into a mess such as this, and when they do, they realize very
quickly what they have done, and want out. This is sad, because the vast majority of the people in our community are peaceful, and would be of great assistance in developing positive relations between the
Board and the members, rather than perpetuating the war. As this continues we find ourselves ever closer to being unable to make a quorum, and unable to do business, and therefore susceptible to
receivership.

We speak of receivership only because it is a real possibility. To some, the idea of the association dissolving is a pleasant one. OLCA has had rough times from the beginning, as any of you who have served
on the Board can attest. But it isn’t that simple. If we close up shop, our governing body will not go away, it will just change hands. The court will appoint a management company to take over. They will
be paid, and they will determine how much the fees will be to cover their administrative costs and the road maintenance operations. The fees will increase substantially without your vote, and your voice
will be lessened considerably.

The only thing that will save us from receivership is action from this community. At the very least, please come to the membership meeting on November 15th and learn more about the lawsuit you are involved in, and what all of this could mean to you personally. Ignoring it won’t make it go away. You are at risk, and we urge you to read the documents, talk to your neighbors, AND COME TO THE MEETING. Saturday, November 15th, 2008 at the HPP Owners’ Association on 16th and Makuu in Paradise park. 9am sign in, potluck lunch.

Aloha,
Board of Directors
OLCA
11-06-08

At
the General Membership meeting in November the Board of Directors
revealed the current liability insurance situation. In short, have only
been able find a Directors and Officers insurance policy that carries
significant exclusions. These exclusions mean that the Association will
have to foot the bill for any new legal actions that these named
exclusions may file.

After about 3 hours of very serious and
cooperative discussion, we came away with a directive to ask the full
membership to vote for a special assessment for a legal fund, to provide
protection for the Association and its Directors when the insurance
does not.

The requirement that the Directors and Officers are
protected by the association is already in our bylaws. However, a
realistic assessment of our finances clearly shows that normal budget
cannot provide such protection. The special assessment is to make sure
that the funds are available, and to give confidence to future Directors
that they will be protected in these volunteer positions.

Without
this confidence, it is doubtful that anyone would agree to serve on the
Board of Directors, and the prospect of receivership becomes even more
real.

The ballots have been sent out, and we will have a Special
Meeting to answer any remaining questions on January 17, 2009 at the
HPP Community Center on 16th and Makuu in Hawaiian Paradise Park. 8:30am
sign in, meeting starts at 9am. Ballots are due January 24th.

(New entry, October 12, 2009)
The
one-time $50 assessment to create a Legal Defense Fund was passed by a
vote of 255 for, 141 against. The policy for the proper use of this fund
was worked out in the April 2009 Membership Meeting. To view the
document, go to the minutes of this meeting. We thank you for supporting this.
      There is now a tentative settlement agreement
on the table in the Sung case. The agreement has been approved as to
form by the Board of Directors and the named individuals. Mr. Sung has
approved the form of the agreement except for provisions concerning the
amount of time that future disputes or claims must be mediated. We
expect to determine a fair number of hours in the upcoming membership
meeting, and amend the agreement if necessary. Membership approval and
ratification must be obtained because the Orchidland Community
Association, Inc. is named as both plaintiff and defendant in the
lawsuit.
      The case is titled
“Shikwan Sung, individually and on behalf of all shareholders of
Orchidland Community Association, Inc.; Plaintiff, vs. Roger Hawney, an
individual; Wes Owens, an individual; Yen Chin, an individual; Andrew
Coyne, an individual; and Dawn Spurrell-Robinson, an individual;
Orchidland Community Association Inc., a Hawaii non-profit corporation;
and DOES 1-10, Defendants”. Therefore, the membership (shareholders)
must approve it as well for this to be a binding, enforceable and
complete settlement agreement.
     We have
posted here on our website the complaint, our answer and counterclaim,
the settlement agreement and the related documents. We will be
discussing this issue first thing in the Semi-Annual Membership Meeting
on November 21, 2009 at the HPP Community Center. Sign in at 8:30am,
meeting starts at 9am. Please read through the documents before the
meeting, and print your own copies if possible. We will have a few
copies, but some of the documents are too long to print large amounts.
      We
will try to answer all of your questions in this meeting as best we
can. We would like to keep the discussion limited to the pros and cons
of the settlement as much as possible. We understand that you will need
at least some discussion of the merits in order to make an informed
decision on the settlement, but avoiding the costs of continuing
litigation will ultimately be the reason for this settlement.
      If
the settlement is approved in this meeting, it will then go out to a
ratification vote of the full membership. We will post the unapproved
minutes of the meeting on this website as soon as possible after the
meeting so that those who could not attend will have access to the
discussion, questions and answers. If you still have questions after
reading the documents and the minutes, you can contact us directly using
the e-mail form on the website. You may also use the community forum
for a more public discussion. We would like to discourage the use of
telephone or U.S. mail for discussion of this, as the accuracy of
documentation of these can be questioned. Once the form of the
settlement agreement is approved by all parties, including ratification,
we will all sign it. The OLCA President will sign for the membership.

Shikwan Sung & ALL OLCA owners/members vs. OLCA

Information about this case is covered in the synopsis of current legal situation above:
Yet another suit, served to the current board members April 25th, 2008 [PDF: 472 KB –
Oct 25, 2013]

Sung’s Motion for Entry of Default Judgment against OLCA (July 15th, 2008) [PDF:
218 KB – Oct 25, 2013]

Explanation of Time Frame

The latest complaint by Mr. Sung was served to the Directors on April 26, 2008. We immediately informed our insurance company, and were initially denied coverage due to a clause in the policy that
excludes claims for emotional distress. We retained Ivan Van Leer to represent us. He felt that, under the terms of the policy and a Hawaii State law that says that “the duty to defend is greater
than the terms of the policy”, the insurance company should cover us, and his first order of business was to file a Motion for Declaratory Relief with the court to compel them to do so. During this
time period, Mr. Van Leer was unable answer the complaint, because to do so would “taint” the case, i.e., the insurance company’s attorney may not choose to address the case in the same manner, and
this would have given them legitimate grounds to deny coverage. Plaintiff filed a Motion for Entry of Default Judgment. A hearing was held on July 15, 2008. The Judge suggested to Plaintiff’s attorney
that he withdraw the motion, and he did so immediately, in the hearing. The Judge also instructed Mr. Van Leer to provide the answer within 10 days. Since the answer was now court-ordered, there would
be no “tainting” of the case. The answer and counterclaim were filed on July 24, 2008. Shortly thereafter, the insurance company agreed to defend without court intervention, and the case was turned
over to the law firm of Ayabe, Chong, Nishimoto, Sia, and Nakamura.

OLCA’s response to the court of the allegations and demands. [PDF: 29 KB – Oct 25, 2013]
OLCA’s 1st request for Interrogatories (Nov 7, 2008) [PDF: 323 KB – Oct 25, 2013]
OLCA’s 1st request for Production of Documents (Nov 7, 2008) [PDF: 180 KB – Oct 25, 2013]
OLCA’s 2nd request for Interrogatories (Nov 10, 2008) [PDF: 117 KB – Oct 25, 2013]
OLCA’s 2nd request for Production of Documents (Nov 10, 2008) [PDF: 93 KB – Oct 25, 2013]
UPDATE! Orchidland Letter to Sung [PDF: 19 KB – Oct 25, 2013]
UPDATE! Sung Letter to Orchidland [PDF: 92 KB – Oct 25, 2013]
UPDATE! Proposed Settlement Agreement pages 1-9 [PDF: 363 KB – Oct 25, 2013]
UPDATE! Proposed Settlement Agreement page 10 [PDF: 11 KB – Oct 25, 2013]
UPDATE! Explanation of the settlement in layman’s terms from our Attorney Gary Miyamoto. [PDF: 22 KB – Oct 25, 2013]

Bob Ely and Shikwan Sung vs. OLCA

Case Number: 3CC0710301
On Wednesday, September 25th, the Sheriff served OLCA with papers that initiate a lawsuit against OLCA to prevent settlement of the Murakami foreclosure suit. The named
plaintiffs in the case are Orchidland property owners Bob Ely and Kwan Sung, and the papers arrived on the eve of initial discussions between the Board and the Murakamis.

OLCA must defend itself
in court against this suit, which will cost money. Fortunately, OLCA has insurance that gives it some protection. Unfortunately, the policy carries a $15,000 deductible, so OLCA must pay the first $15,000
in legal costs. Obviously, this means that the already slender budget will have to absorb an additional strain.

We will share with the community all the details of this case that we can via this
website.
Initial Suit [PDF: 46 KB – Oct 25, 2013], pages 1-2
Initial Suit [PDF: 114 KB – Oct 25, 2013], pages 3-7
Injunction [PDF: 774 KB – Oct 25, 2013]
Dismissal [PDF: 70 KB – Oct 25, 2013], Dismissed June 16, 2008

OLCA vs. Murakami Trust

Case Number: 3CC0610099
This case revolves around OLCA’s legal right to foreclose on property where the owners have not paid the required road fees. This case is currently in Settlement discussions. We will update this site soon
with at least asummary of the case.
May 2008 – Settlement discussions were unable to produce a mutually acceptable result, so the case was sent to the court for a decision from the Judge.

Court’s Decision [PDF: 542 KB – Oct 25, 2013]
The court’s decision is basically that OLCA may collect road maintenance fees (MRMA’s) from Land Court properties, all properties in Orchidland, even if it is not listed on their deeds. Further,
the court outlines the process by which OLCA may place liens on Land Court properties for which are in arrears in their MRMA’s. The court denies OLCA’s ability to seek foreclosure on liens for delinquent
MRMA’s, stating: “… Plaintiffs remedy is execution on a judgment lien and not foreclosure on the lien.”

OLCA’s attorney’s response to Judgement [PDF: 52 KB – Oct 25, 2013]
Mr. Oda’s explanation of the Judgement, and next actions

Road fees Encumberance

Summary Judgement April 6, 1992 [PDF: 265 KB – Oct 25, 2013]
Gave the OLCA the legal right to asses and collect road fees. Also gave the OLCA the legal right to place a lien on a property for non-payement of these road fees. 30th Fiscal year ends

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