SYNOPSIS OF OUR CURRENT LEGAL SITUATION AS OF 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 $30,000, 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 we plan to discuss this affair in detail at the Special Meeting on November 10th.

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 the rest of the BOD at that time [Glenn Pressel, Steven Starnes, Jerry Gardner, Sherri Carden, and Carol Noel] were aware 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 has resigned, Wes Owens is now VP. Dawn Spurrel-Robinson is the only other director at this time. 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 is our current status, and there are a number of options to be explored.

To be continued…

Initial Suit [PDF: 46 KB - Sep 29, 2007]
pages 1-2

Initial Suit [PDF: 114 KB - Sep 29, 2007]
pages 3-7

Injunction [PDF: 774 KB - Sep 29, 2007]

Summary Judgement April 6, 1992 [PDF: 265 KB - May 17, 2007]
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.