Grinpas v. Kapaa 382, LLC
| Decision Date | 15 February 2012 |
| Docket Number | No. 30139.,30139. |
| Citation | 310 P.3d 1048,130 Hawai'i 347 |
| Parties | Robert GRINPAS and Esther Grinpas, Plaintiffs–Appellants, v. KAPAA 382, LLC, A Hawaii Limited Liability Company, Kulana Partners, LLC, a Hawaii Limited Liability company, William R. Hancock, and Does 1–10, Defendants–Appellees. Kulana Partners, LLC, Defendant/Third–Party Plaintiff–Appellee, v. William R. Hancock, Trustee of the Hancock and Company, Inc., Profit Sharing Trust, under trust instrument dated 4/3/03, Third–Party Defendant. |
| Court | Hawaii Court of Appeals |
OPINION TEXT STARTS HERE
Appeal from the Circuit Court of the Fifth Circuit (Civil No. 07–1–0132).
Robert Grinpas, for Plaintiffs–Appellants.
Jade Ching, Shellie Park–Hoapili (Jade ChingLaura P. Moritz with her on the brief) (Alston Hunt Floyd & Ing), for Defendant/Third–Party Plaintiff–Appellee.
MEMORANDUM OPINION
Plaintiffs–Appellants Robert and Esther Grinpas (the Grinpases) claim an access and utilities easement over property owned by Defendant–Appellee Kulana Partners, LLC (KPL) known as Remnant 3. Upon cross-motions for partial summary judgment, the Circuit Court of the Fifth Circuit (circuit court) 1 issued an order on August 3, 2009, granting KPL's motion for partial summary judgment and denying the Grinpases' motion for partial summary judgment, holding that no easement exists. On August 3, 2009, the circuit court also entered a Final Judgment in favor of KPL and against the Grinpases. The Grinpases subsequently filed a motion to alter and amend the summary judgment order and the judgment, which was denied by the circuit court on October 6, 2009.
The Grinpases timely appealed on October 28, 2009.
On appeal, the Grinpases raise a number of points of error, which we summarize as follows:
(1) The circuit court erred in granting KPL's motion for partial summary judgment because there were genuine issues of material fact:
(a) precluding application of the merger doctrine;
(b) whether Kulana Condominium Property Regime (Kulana CPR) documents established the easement, which could not be removed without the Grinpases' consent;
(c) whether the Grinpases were intended third-party beneficiaries of provision C–67(A)(2) of a Deposit Receipt Offer and Acceptance (DROA) and the recorded Kulana CPR documents;
(d) whether KPL purchased the Remnant 3 parcel with notice and thus subject to the easement;
(e) whether, at the time KPL purchased Remnant 3, KPL understood that DROA provision C–67(A)(2) referred to an easement rather than the License Agreement;
(f) whether the circuit court reached an inequitable and unreasonable result;
(g) such that the circuit court erred in denying the Grinpases' motion to alter or amend the summary judgment order and the judgment;
(2) The circuit court erred in denying the Grinpases' motion for partial summary judgment and in denying their motion to alter and amend the summary judgment order and the judgement.
For the reasons discussed below, we vacate the judgment filed on August 3, 2009, and remand for further proceedings.
I. BackgroundA. License Agreement
The Grinpases own and operate a tropical flower farm and flower marketing business in Kapahi, Kaua‘i, which they initially operated on property they own, known as Lot 77J. In 1998, the Grinpases sought to expand their farm business and assert that they had an agreement with defendants Kapaa 382, LLC (Kapaa 382) and William R. Hancock (Hancock) to purchase certain nearby property and that they would be granted a permanent access and utilities easement through property known as Remnant 3 to join the anticipated two portions of their farm properties.
The Grinpases allege that they could not purchase the nearby property until a subdivision and condominium property regime were completed, and thus in the meantime they entered into a fifteen year License Agreement with Kapaa 382 for use of approximately nine acres. The License Agreement was dated August 13, 1999 and subsequently recorded in the Bureau of Conveyances on January 27, 2000. A map attached to the License Agreement appears to show that the License Agreement covered portions of a nearby property known as Lot 2 and access to Lot 2 over a remnant parcel, apparently Remnant 3. The access way shown in the License Agreement map connects Lot 77J with Lot 2.
B. Sale of Remnant 3 to KPL
At some point in time, William R. Hancock, Trustee of the Hancock and Company, Inc. Profit Sharing Trust (Hancock Trust) gained ownership of Remnant 3. On July 22, 2002, the Hancock Trust and KPL entered into a DROA for the sale of Remnant 3 to KPL for $2 million. The DROA's “special term” C–67(A)(2) stated: “[t]ransaction contingent upon Buyer's review and approval by 7/29/02 of: ... Grimpas [sic] Access Easement[.]”
On July 24, 2002, Hancock sent correspondence to KPL and attached “two of the due diligence items” which consisted of a Seller's disclosure statement and, as to the “Grimpas [sic] Easement,” a “map of the current easement.” With respect to the easement, Hancock's letter stated in pertinent part:
We are working with Grimpas [sic] to reduce the easement size by moving the fence closer and more parasailed [sic] to the road. Originally, the fence was put up before the road was installed to keep the cows out of the area.
Fidelity National promised to have the preliminary title report to me tomorrow and I will fax or email it to you as soon as I get it. Steve Lee promised the easement document by Friday afternoon and I will likewise get it to you.
(Emphasis added). In the attached Seller's disclosure statement executed by Hancock, he answered “yes” to the question “[a]re there any easements affecting this Property” and further explained “Grimpas [sic] access easement to flower farm unit 2x[.]” Hancock also answered “yes” to the questions “[a]re there any roadways, driveways, walls, fences, and/or other improvements which are shared with adjoining land owners” and “[a]re there any written agreements concerning these items” and explained “written Grimpas [sic] easement, written access easement[.]” The map attached to Hancock's letter included a circled area and the handwritten notation “area of Grimpas [sic] current easement[.]”
KPL does not dispute that prior to purchasing Remnant 3, Hancock showed KPL members Curtis Crane and C. Dustin Crane a roadway on Remnant 3 that Hancock referred to as an access easement. However, the declaration of C. Dustin Crane further elaborates that:
On or around August 6, 2002, KPL received a Preliminary Report regarding Remnant 3 (“Preliminary Report”). The Preliminary Report did not include any reference to an “access easement”. Mr. Hancock approved the Preliminary Report and did not make any changes, supplements or amendments to the Preliminary Report. Based on the Preliminary Report and Mr. Hancock's approval of the same, KPL's members understood that there was no recorded easement encumbering Remnant 3.
There is nothing in the record evidencing that an “easement document” as contemplated in Hancock's July 24, 2002 letter was created or executed.
By way of a Trustee's Deed dated August 12, 2002, and recorded in the Bureau of Conveyances on August 28, 2002, the Hancock Trust conveyed Remnant 3 to KPL. The Trustee's Deed did not contain any provision concerning the Grinpases' alleged easement.
C. Settlement Agreement
On September 11, 2003, the Grinpases, Hancock, Kapaa 382 and James W. Lull (“Lull”) entered into a Settlement Agreement in order to settle various disagreements. Among other things, the Settlement Agreement purported to require that Kapaa 382, Hancock and Lull provide the Grinpases with certain easements. Only incomplete copies of the Settlement Agreement are contained in the record and it is thus unclear what property was affected by the Settlement Agreement. To the extent the Settlement Agreement purported to provide an easement over Remnant 3, KPL owned Remnant 3 when the Settlement Agreement was executed and KPL was not a party to the agreement.
D. Condominium Declarations and Maps
On December 14, 2004, a “Declaration of Condominium Property Regime of Kulana and Condominium Map No. 3902” (CPR Declaration), executed by Hancock on behalf of Kapaa 382 as the fee owner and developer, was recorded in the Bureau of Conveyances.2 It is uncontested that Condominium Map No. 3902 includes a map entitled “Condominium Map for UNITS 26A TO 26E, INCLUSIVE” (26A/26E Map), 3 which shows easements AU–26A and AU–26E in favor of the Grinpases' Lot 77–J. As reflected in the 26A/26E Map, Units 26A and 26E are part of Remnant 3.
At the time that the CPR Declaration and the 26A/26E Map were recorded, KPL owned Remnant 3 and did not execute the CPR Declaration. However, on either November 30, 2004 or December 1, 2004 4 (prior to recording of the CPR Declaration and the 26A/26E Map), C. Dustin Crane, as the Managing Member of KPL, executed a “Consent and Joinder” which referenced Document No. 2004–252101 (the CPR Declaration). The Consent and Joinder was then recorded at the Bureau of Conveyances on December 21, 2004 (one week after recording of the CPR Declaration and 26A/26E Map).5 The Grinpases contend the Consent and Joinder is of particular significance and establishes KPL's intent to create easements AU–26A and AU–26E reflected in the 26A/26E Map. KPL contends the Consent and Joinder does not create any easements because KPL was deceived as to its effect and, further, the document itself was void for failing to properly describe the subject property.6
On January 27, 2005, an “Amended and Restated Declaration of Condominium Property Regime” (First Amended Declaration) for Kulana was recorded. Based on the record, the First Amended Declaration was executed by Hancock on behalf of Kapaa 382. There is nothing in the record indicating that KPL approved or consented to the First Amended Declaration.
On July 20, 2005, a document entitled “Amendment to Declaration and to Condominium Map of the Condominium Property...
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