Eminent Domain Abuse, Hawaiian Style

by Robert Thomas, Inverse Condemnation, January 18, 2018

Stewart Yerton, a reporter at Honolulu Civil Beat but also a lawyer, has posted a report about an ongoing eminent domain case in which the State of Hawaii's Attorney General is condemning a one-acre parcel on the south shore of Maui, property which the State had been leasing on a long-term 30-year lease. The above video is an aerial view of the property and its surrounding area. My firm represents the property owner in the case. 

The report's headline asks "Is This Maui Landowner Getting A Raw Deal From The State?"

In 2013, after nearly 20 years of leasing the property, the AG condemned the land because, in the words of one of his deputies, the lease "has not been great for the state." (The State thought it was paying too much in rent.)

The AG's initial condemnation appraisal concluded the highest and best use of the property was to continue leasing it to the State, and valued the land at $4.165 million.

But four years later, after the AG's same appraiser reviewed the landowner's appraiser's report (which also concluded the highest and best use of the land was as rental property), on his own initiative, he revised his previous appraisal to $5.06 million, an increase of nearly $1 million.

Prompted by that increase, the AG abruptly abandoned the earlier $4 million valuation, switched to a new appraiser, and took a different tack: he now argues the property is worth no more than $3 million. The AG argues that application of the "undivided fee rule" prohibits the jury from considering the fact that on the date of the taking, the property was being leased to the State.

But later, Hawaii Attorney General Doug Chin [known now for his multiple headline-grabbing lawsuits against the Trump Administration and who broke with the long-standing tradition of apolitical Hawaii AGs by recently announcing his run for a seat in Congress] invoked a legal doctrine known as the “undivided fee rule” to say the lease money owed Williams shouldn’t be factored into the equation. Maui state Circuit Court Judge Rhonda Loo, who is presiding over the matter, has agreed with the state.

As a result, the jury deciding how much Williams should be paid won’t be allowed to hear about the lease, which is now worth $350,000 a year for about 10 years.

Williams’ attorney, Robert Thomas, says Chin and Loo are mistaken.

“It’s a crackpot theory,” Thomas said of the state’s interpretation of the undivided fee rule. “No court in the United States has accepted that argument, and no condemning authority has had the chutzpah to make that argument."