Maui homeowners file second lawsuit over defects

By Timothy Hurley
Advertiser Maui County Bureau

WAILUKU, Maui — Buying a new home was a dream come true for Jennifer and Peter Konohia III. But the dream was beginning to seem like a nightmare after cracks began to appear in the ceiling and window sills.

Lori Sajor points to defects in the concrete in front of her Halemalu Place home in Wailuku, Maui. Timothy Hurley • The Honolulu Advertiser

But there were, and after talking to neighbors in their new Kehalani subdivision in Wailuku, the Konohias discovered they were not alone. Twelve homeowners on the same side of Halemalu Place were experiencing the same problems and, worse, were unable to get the developer to fix them.

So, together, they filed a lawsuit against developer C. Brewer Homes, which later changed its name to Hawai'i Land & Farming Co. Following more than three years of litigation, a Maui judge last year confirmed a $1.7 million arbitration award to the homeowners. The award was raised to $2 million after the developer failed to pay within three months.

The money still hasn't come. Now, the homeowners have filed another lawsuit, claiming Hawai'i Land & Farming and its new owner, Honolulu developer Stanford S. Carr, pulled off an illegal maneuver to dodge the court-ordered payout.

The suit, filed in Maui Circuit Court, claims Carr and his company transferred the title on 654 undeveloped acres at Kehalani to another firm he helped to create in a deliberate move to protect the company's largest asset.

The transfer, completed amid the Halemalu Place litigation, has thwarted the homeowners' attempts to get the money owed them, according to their lawyer, Andrew Winer of Honolulu.

"He understood the case against him,'' Winer said. "The motivating factor was to insulate the company's main asset against a potential judgment.''

But Carr's attorney, Ronald Sakamoto, said the land transfer was made for "valid business reasons'' that had nothing to do with the Halemalu Place homes, although he wouldn't say what those reasons were.

"Hawai'i Land & Farming is doing what it can to try to pay the homeowners what they are owed,'' he said. "Mr. Carr is a well-respected home builder, and it's unfortunate this lawsuit attempts to target him personally.''

Carr, a Maui native who also owns Stanford S. Carr Development Corp. in Honolulu, inherited the legal mess when he bought Hawai'i Land & Farming in 1999.

"(Carr) knew there was a problem, but he didn't realize it was that big of a problem,'' Sakamoto said.

Kehalani was originally built by C. Brewer Homes. The problems occurred when the homes on the south side of Halemalu Place, purchased for between $190,000 and $225,000, were built on pads of fill dirt that were not properly prepared to avoid soil expansion.

The problem of expansive soils has led to multimillion-dollar lawsuits and repair bills across the country. If not properly prepared prior to construction, soils with clay swell in volume when wet and shrink when dried, leaving structures to heave, settle and shift unevenly, causing damage that can be severe.

Lori and Greg Sajor noticed the defects in their new four-bedroom house on Halemalu Place within months of moving in at the beginning of 1997. Cracks in walls appeared from nowhere, the carpet buckled in spots and doors would not shut properly.

Four and a half years after applying green-dot stickers to the problem areas — flaws the original developer promised to fix — the couple is still looking at those stickers.

"It's very frustrating,'' Lori Sajor said. "We want to do some decorating, but we can't. We just don't want to have to think about this anymore.''

When the judgment was made in their favor last year, the Sajors thought their problems would soon be over. Their engineering consultants told them they would have to move from their home for two to four weeks while a solution was injected into the soil and moisture levels were stabilized. The carpets were to be replaced and other repairs done.

Most of the homeowners were expecting to receive between $140,000 and $175,000 to make the structural fixes, stabilize the soil and compensate for diminished property values, Winer said.

But now they don't know when, or if, the money will come. No hearing date has yet been scheduled for the suit.

"We're definitely furious and disappointed,'' Lori Sajor said. "We're sick and tired of it.''

Correction: Remarks by Halemalu Place homeowner Jennifer Konohia were mistakenly attributed to another homeowner, Lori Sajor.