Haseko ordered to pay $20M in damages to Ewa Beach homeowners following failure to build marina

HONOLULU (HawaiiNewsNow) - A jury on Tuesday ordered Haseko to pay $20 million in punitive damages to hundreds of homeowners in Ewa Beach. The hefty penalty is over the Tokyo-based developer's failure to build a marina for its Ocean Pointe and Hoakalei subdivisions.

"You have a local jury sending out a message to a foreign corporation that comes to Hawaii and rips off homeowners. That's exactly what they did," plaintiffs' attorney Michael Green said.

The jury also awarded the 1,800 plaintiffs who sued Haseko $1,300 per household. Jurors said Haseko engaged in "unfair and deceptive practices" when it scrapped the marina idea to build a lagoon instead.

Haseko blamed permitting delays and difficulties for forcing it to change its plans.

"They spent $32 million in 2008 lining it with armor stone," Haseko attorney Steven Chong said. "So there's no evidence that they never intended to deliver the marina.  And all of the homes were sold when the company fully intended to deliver the marina."

Plaintiffs in the class-action suit argued that they they bought their homes in part because of the marina.

"This is a great victory for homeowners and consumers across the state. It sends a clear message to developers that juries are not going to let them use deceptive practices," Hoakalei resident Matt Lopresti said.

But Chong said the $20 million ruling conflicts with court instructions that punitive damages couldn't be awarded for an unfair or deceptive act.

"It's probably going to be one of the things that we ask the court to set aside the award of punitive damages as being inconsistent with the law," he said.

Unless the court agrees, the 1,800 plaintiffs will split the $20 million. The $1,300 award per household will be tripled because the class action lawsuit is a consumer protection case.

"It sends a very strong message to not only Haseko but all developers to simply do what you say you're going to do. If you say you're going to deliver a marina, deliver it," plaintiffs' attorney Terrance Revere said.

Haseko can appeal the ruling, but would have to pay ten percent a month in interest while an appeal moved through the court.

Tom Sagawa, President of Haseko Hawaii Inc., released this statement following Tuesday's ruling:

"The jury returned a verdict today, finding that Haseko had not misrepresented any fact in selling homes to Ocean Pointe and Hoakalei residents. The jury did find there was a violation of a consumer protection statute, and did award the 1,874 members in the class $1,300 per home. Under the consumer protection statute, which trebles any actual damages, the total award will be $7,308,600. Under the statute, plaintiffs will also be allowed any legal fees and costs. While the jury awarded $20 million in punitive damages, this award is not authorized by the facts or the statute under which liability was found. Haseko is planning to appeal and bond the judgment. The first step before appealing is to move the court to set aside the entire verdict. We are confident the $20 million punitive damages award will be set aside."

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