United States District Court, D. Hawaii
WILLIAM R. HANCOCK, individually and as Trustee of HANCOCK AND COMPANY, INC. PROFIT SHARING TRUST, under trust instrument April 3, 1993, Plaintiff,
KULANA PARTNERS, LLC, A HAWAII LIMITED LIABILITY COMPANY; FIDELITY NATIONAL TITLE & ESCROW OF HAWAII, INC., DOES 1-10; Defendants
For William R. Hancock, individually and as Trustee of Hancock and Company, Inc., Profit Sharing Trust, under trust instrument April 3, 1993, Plaintiffs: Timothy Joseph Hogan, LEAD ATTORNEY, Attorney at Law, Honolulu, HI.
For Kulana Partners, LLC, a Hawaii Limited Liability Company, Defendant: Jade L. Ching, LEAD ATTORNEY, John S. Rhee, Alston Hunt Floyd & Ing, Honolulu, HI.
For Fidelity National Title And Escrow of Hawaii Inc., a Hawaii corporation, Defendant: Eric B. Levasseur, Royce R. Remington, Steven A. Goldfarb, LEAD ATTORNEYS, PRO HAC VICE, Hahn Loeser & Parks LLP, Cleveland, OH; Ryan H. Engle, LEAD ATTORNEY, Bays Lung Rose & Holma, Honolulu, HI; Sarah M. Love, Bays Lung Rose & Holma, Honolulu, HI.
Derrick K. Watson, United States District Judge.
ORDER (1) GRANTING DEFENDANT KULANA PARTNERS, LLC'S MOTION TO DISMISS COMPLAINT; (2) GRANTING DEFENDANT FIDELITY NATIONAL TITLE & ESCROW OF HAWAII INC.'S MOTION FOR JUDGMENT ON THE PLEADINGS; AND (3) DENYING PLAINTIFF WILLIAM HANCOCK'S COUNTER-MOTION FOR SUMMARY JUDGMENT AND PRELIMINARY INJUNCTION
Before the Court are the following motions: (1) Defendant Kulana Partners, LLC's (" KPL" ) Motion to Dismiss Complaint, filed on June 24, 2013 (" KPL Motion" ); (2) Defendant Fidelity National Title & Escrow of Hawaii Inc.'s (" Fidelity" ) Motion for Judgment on the Pleadings, filed on September 6, 2013 (" Fidelity Motion" ); and (3) Plaintiff William R. Hancock (" Plaintiff" ) individually and as Trustee of Hancock and Company, Inc. Profit Sharing Trust's Counter-Motion for Summary Judgment and Preliminary Injunction, filed on October 11, 2013 (" Plaintiff's Motion" ). Pursuant to Local Rule 7.2(d), the Court finds these matters suitable for disposition without a hearing. After careful consideration of the supporting and opposing memoranda, and the relevant legal authority, the Court hereby GRANTS the KPL Motion and Fidelity Motion and DENIES Plaintiff's Motion for the reasons set forth below.
I. Plaintiff's Complaint
Plaintiff filed his Complaint against KPL and Fidelity on April 26, 2013, seeking declaratory and injunctive relief relating to the ownership of real property known as Remnant 3, a 14.6 acre parcel associated with the Kulana 382, LLC development in Kapaa, Kauai (the " property" or " Remnant 3" ). Plaintiff alleges that, in July 2002, he was the fee simple owner of the property, and negotiated its sale to KPL. In a July 22, 2002 Deposit Receipt Offer and Acceptance (" DROA" ), Plaintiff and Dustin Crane, acting on behalf of KPL, agreed to the following sales terms: a $2 million purchase price consisting of $1.1 million in cash and $900,000 by way of " Kulana Partners Privileged Right to Purchase Properties." Complaint ¶ 10.
Fidelity served as escrow agent for the transaction. According to Plaintiff, on August 12, 2002, he went to Fidelity's Kapaa office to review two deeds that were to convey the property: (1) a Warranty Deed conveying from Plaintiff William Hancock individually to William Hancock as Trustee of Hancock and Company, Inc. Profit
Sharing Trust, under trust instrument April 3, 1993; and (2) a Trustee's Deed conveying from Plaintiff as Trustee to KPL. Complaint ¶ ¶ 11-12. Plaintiff alleges that the Trustee Deed that he reviewed contained in the " Subject To" section, Paragraph 12, language making the conveyance subject to " Any rights of the parties in possession of a portion of, or all of, said land, which rights are not disclosed by the public record." Complaint ¶ 13. He further alleges that, at Paragraph 16, the Trustee Deed " described an easement in the 'north corner' that by meets [sic] and bounds set forth the description of an easement that is in the north corner of the property at or near the location of the Grinpas Easement." Complaint ¶ 14. Plaintiff alleges that " but for the existence of this in the 'Subject To' section, Plaintiff would not have executed the deed." Complaint ¶ ¶ 13-14.
According to Plaintiff, on August 13, 2002, Fidelity faxed the Warranty Deed and Trustee Deed to Glenn Hale, KPL's counsel. Plaintiff asserts that he did not know of Hale's involvement in the escrow. Complaint ¶ ¶ 15-16. He then alleges that, on August 19, 2002, Fidelity faxed three more documents to Hale: (1) a " Subject To Page for Deeds" ; (2) a " copy of Land Patent (Per Buyer's Request" ; and (3) an " Updated Prelim (Rollback Taxes Removed)." Complaint ¶ 19. Finally, Plaintiff alleges that, on August 26, 2002, a Fidelity employee (Lorretta) sent a memorandum to another Fidelity employee (Jeannette) regarding the Hancock-KPL escrow, stating: " WE NEED TO REPLACE THE SUBJECT TO PAGE ON BOTH OF THE DEEDS . . . THE TOGETHER WITH PARAGRAPH (ON THE TOP) IS MISSING. I BELIEVE THAT YOU ALREADY HAVE THE DEED AND I HAVE IT SET UP FOR RECORDING ON WEDNESDAY." Complaint ¶ 18.
Plaintiff claims that the " Subject To" section of the Trustee Deed that he executed on August 12, 2002 was fraudulently modified to remove the easement at Paragraph 16 and unrecorded interest at Paragraph 12. The " altered deed" was then recorded in the Bureau of Conveyances, State of Hawaii, by Fidelity on August 28, 2002 as Document Number 2002-152285. Plaintiff alleges that he never received a copy of the August 26, 2002 memorandum, nor was he otherwise informed that the documents were modified. Complaint ¶ ¶ 19-20. According to Plaintiff, he did not learn of the " forged deed" until 2013 because of " fraudulent concealment by Fidelity and KPL[.]" Complaint ¶ 23.
Plaintiff's April 26, 2013 Complaint sets forth the following claims for relief: (1) declaratory judgment that the Trustee Deed recorded as Document No. 2002-152285 is void; (2) injunctive relief barring KPL from " uttering the forged Trustee Deed" in any proceeding or transaction; and (3) a writ of ejectment against KPL for its trespass on the property.
II. State Court Action
Prior to the filing of the instant action, Plaintiff and KPL were named as defendants in Grinpas v. Kapaa 382, LLC, et al., Civ. No. 07-1-0132, which is currently before the Fifth Circuit Court, State of Hawaii (" state court action" or " Grinpas " ). The Grinpas plaintiffs were parties to a license agreement under which they allege that Plaintiff and Kapaa 382, LLC approved the construction of a roadway over the Remnant 3 easement. The parties thereafter entered into a September 11, 2003 Settlement Agreement to resolve disputes that had arisen ...