United States District Court, D. Hawaii
ORDER IMPOSING SANCTIONS ON DEFENDANT ALOHA OCEAN
EXCURSIONS, LLC AND DEFENDANT KRISTIN KIMO HENRY
C. KAY SR. UNITED STATES DISTRICT JUDGE
reasons discussed below, the Court imposes monetary sanctions
in the amount of $25, 000 jointly and severally against
Defendant Kristin Kimo Henry (“Defendant Henry”)
and Defendant Aloha Ocean Excursions, LLC (“Defendant
AOE”), subject to potential substantial enhancement as
discussed more fully herein.
purposes of this Order, the Court will not recount this
case's lengthy procedural history beginning in 2013. The
Court only discusses those facts and events of specific
relevance to the issue that this Order addresses.
August 15, 2019, the Court issued a Minute Order (the
“08/15/2019 Order”), ECF No. 601, concerning the
commercial use permit and the matter of whether to sanction
Defendant Henry and Defendant AOE. The Court stated the
In furtherance of its directive from the Ninth Circuit to
proceed with establishing the rights of Plaintiff Barnes to
maintenance and cure, the Court is considering whether it
should sanction Defendant Henry and Defendant AOE for
wrongfully transferring the commercial use permit for the
vessel M/V Tehani by Defendant Henry's misrepresentation
to the harbormaster that he was simply requesting a change in
name from Sea Hawaii Rafting, LLC to Aloha Ocean Excursions,
08/15/2019 Order at 1. Defendant AOE and Plaintiff Barnes
filed briefs on the sanctions matter on August 20, 2019. ECF
Nos. 603 and 604. The Court held a hearing on the sanctions
matter on August 22, 2019. ECF No. 606.
upon the authorities hereinafter discussed, the Court imposes
sanctions against Defendant Henry and Defendant AOE for the
reasons that follow.
Events Concerning the Permit
review of the various events concerning the permit is
necessary in order to properly understand the Court's
decision to sanction Defendant Henry and Defendant AOE.
Plaintiff Barnes was injured in July 2012 when the vessel
Tehani, on which he was working as a seaman, exploded as it
was being lowered into the water at the Honokohau Harbor in
Kailua-Kona, Hawai`i. Plaintiff Barnes filed this lawsuit on
January 1, 2013, which includes a maritime lien claim for
failure to pay Plaintiff Barnes maintenance and cure. This
Court has ruled that Plaintiff Barnes is entitled to recover
for maintenance and cure from Defendant Sea Hawaii Rafting,
LLC (“Defendant SHR”) as the owner of the Tehani.
At the time of the accident, Defendant SHR operated the
vessel Tehani under a commercial use permit issued by the
Division of Boating and Ocean Recreation
(“DOBOR”) as part of a maritime tourist business.
The permit was issued to Defendant SHR, and the Tehani was
(and still is) the vessel named on the permit. Defendant
Henry is the sole member of Sea Hawaii Rafting, LLC and Aloha
Ocean Excursions, LLC. The parties have always agreed that
the commercial use permit significantly affects the value of
commercial use permit entitles the permittee to launch the
vessel named on the permit from the ramp at Honokohau Harbor.
Currently, 51 such permits exist; however, the No. of permits
is limited to 35 and there is a permit waitlist with six
individuals or entities on it. Transcript of February 28,
2019 Hearing (“Tr.”), ECF No. 539, at 8:8, 9:1-6
(testimony of William Wynhoff, Deputy Attorney General and
General Counsel for the State of Hawai`i's Department of
Land and Natural Resources (“DLNR”)). This means
that 16 individuals or entities must give up their permits
before an individual or entity on the waitlist will be issued
a permit. Tr. at 9:7-12.
November 3, 2014, Defendant Henry filed a voluntary chapter
13 bankruptcy petition. See In re Kristin Kimo Henry, No.
14-01475 (Bankr. D. Haw. 2014) (the “Chapter 13
Case”). On November 12, 2014, Defendant SHR filed a
voluntary chapter 7 bankruptcy petition. See In re Sea Hawaii
Rafting, LLC, No. 14-01520 (Bankr. D. Haw. 2014) (the
“Chapter 7 Case”).
Minute Order dated July 17, 2015, the Court noted that
Defendant Henry represented to this Court that Defendant SHR
owned the Tehani; yet in the Chapter 13 Case, Defendant Henry
represented that he himself owned the Tehani. ECF No. 158 at
2. After the Court noted the inconsistency in Defendant
Henry's representations, Defendant SHR amended its
bankruptcy schedules on August 4, 2015 to reflect the fact
that it owned the Tehani (although Defendant SHR did not
disclose that it owned the commercial use permit). Chapter 7
Case, Dkt. No. 24.
Henry formed Aloha Ocean Excursions, LLC on August 11,
2015./ Defendant Henry and Defendant AOE sought
to lease the Tehani and its trailer (but not the permit) from
the Chapter 7 Trustee, who then filed a motion on February
12, 2016 seeking the bankruptcy court's approval of a
lease agreement. Chapter 7 Case, Dkt. No. 102. On March 17,
2016, the ...