ASSOCIATION OF OWNERS OF WEHILANI v. Welter

LAWH?F@ARY
NOT FOR PUBLICATION ]N WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

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No. 29310 y §
IN THE INTERMEDIATE COURT OF APPEALS §§ §:
OF THE STATE OF HAWAl‘I §§ af
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ASSOCIATJ:ON OF @WNERS oF WEHILANI, Plaintiff-Appell““éie, v

LEONARD M. WELTER, Trustee of the Leonard M. Welter 1983 Trust,
and JOHN DOES 1-5, Defendants-Appellants

APPEAL FROM THE CIRCUIT COURT OF THE THIRD CIRCUIT
(CIVIL NO. O'7-l-24K)

SUMMARY DISPOSITION ORDER
(By: Foley, Presiding Judge, Fujise and Leonard, JJ.)

Defendant-Appellant Leonard M. Welter,
Leonard M. Welter 1983 Trust (Welter)

Trustee of the

appeals from the Final

Judgment in favor of Plaintiff-Appellee Association of Owners of

Wehilani (Wehilani) entered by the Circuit Court of the Third

Circuit (circuit court) on April 8, 2OO9.1

This appeal arises out of a dispute over Welter's
failure to pay assessments imposed by Wehilani pursuant to the
Declaration of Protective Covenants,

Conditions and Restrictions
for Wehilani (CCR).

In motions for summary judgment and on
appeal, Welter contends that he rightfully withdrew the

properties he owned from Wehilani and therefore was not subject

to the assessments. We disagree and affirm.

On February 7, 2007, Wehilani filed a complaint against

welter for the unpaid assessments. Wehilani alleged that Welter

owned property within the Wehilani subdivision known as Lot 2-5
and Lot 2-6 (the Property); the Property was governed by the CCR;
a lien against the Property had been created by the nonpayment;

and the Property was therefore subject to foreclosure. Wehilani

sought a judicial determination of the amounts due under the CCR

from Welter and foreclosure of the lien against the Property to

recover those amounts. Welter denied the allegations and filed a

1 The Honorable Elizabeth A. Strance presided.

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counterclaim alleging that Koski Enterprises, Inc. (Koski) had,
under the CCR, the power to release lots from the CCR and had
transferred those rights to Puaa Development, LLC (Puda) with
respect to the Property and Puda had in turn transferred that
power to Welter. Welter claimed that Wehilani had committed
slander, intentional infliction of emotional distress, and breach
of contract. Wehilani denied the allegations of the
counterclaim.
Welter and Wehilani filed motions for summary judgment.
Welter argued, inter alia, that under the CCR, Koski had the
power as the Declarant to remove Lots from the CCR and that such
power could be transferred and was transferred to Puda who in
turn transferred the power to Welter. Welter stated that on
September 5, 2005, he filed an Amendment of Declaration of
Protective Covenant for Wehilani to Release Lots at Wehilani
(Amendment), which purports to release the Property from the
Wehilani subdivision. Based upon the Amendment, Welter contended
that the Property was no longer subject to assessments under the
CCR.
The CCR reserved to the Declarant the power to remove
Lots from the CCR2. The CCR defined the "Declarant" to include
successors and assigns of Koski.
In the sale of the Property by Koski to Puaa the deed

described the property transferred as:

(A) All improvements located on the property;

(B) All rights the Seller has in other property
because of the Seller's ownership of the property being sold
(these rights are known as "easements and appurtenances");

(C) All rents or royalties from the property;

(D) All other rights or privileges that the Seller
owns because of the Seller's ownership of the property.

2 Koski had previously removed Lots 2-l, 2~2, 2-3, and 2~4 from the CCR
by filing an Amendment of Declaration of Pr0tective Covenants for Wehilani to
Release Lots at Wehilani.

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The deed did not expressly or impliedly transfer Koski's rights

as Declarant. The deeds for the Property also included the

following representations by PuaHu

3. That by signing and accepting this warranty

Deed, the Buyer is (i) agreeing to abide and be bound by the
terms and provisions of the Declaration of Protective
Covenants, Conditions and Restrictions for WEHILANI
described in Exhibit "A", (ii) agreeing to join in, execute
and deliver any dedication or grants as described in this
warranty Deed, and (iii) agreeing with the Seller and with
all other "Owners" of property within the WEHILANI
subdivision to perform, comply with, and discharge each and
all of the responsibilities, duties and obligations imposed
upon the Buyer by the Declaration of Protective Covenants,
Conditions and Restrictions for WEHILANI.

The description of the Property expressly subjected the property

tO:

Covenants, conditions and restrictions set forth in that
certain Declaration of Protective Covenants, Conditions and
Restrictions for WEHILANI dated March 29, 2000, and recorded
in the Bureau of Conveyances of the State of Hawaii as
Document No. 2000-O48065.

An "owner" is defined by the CCR as follows:

l.9 Owner. "Owner" means the person or
persons, including Declarant:

(a) who holds fee simple title to a L0t;

(b) who has contracted to purchase the
fee simple title to a Lot, or a lease of a Lot for an
original term of not less than thirty (30) years, under a
recorded written agreement, in which case the seller under
any such purchase agreement shall cease to be the Owner
while said agreement is in effect; or

‘ (c) a lessee of a Lot under a recorded
lease from the owner of the fee simple title to said Lot for
a term of not less than thirty (30) years, in which case the
lessor under any such lease shall cease to be the Owner
while said lease is in effect.

Thus, neither the CCR nor the deeds transferring interest in the

Property to Welter transferred the power Koski held to withdraw

lots from Wehilani.

The circuit court granted summary judgment in favor of

iWehilani and against Welter. Welter filed a motion for

reconsideration on December 24, 2007 on the grounds that the

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parties should be provided an opportunity to present evidence of
the intent of Koski with respect to the right to withdraw. The
circuit court denied the motion for reconsideration.

On appeal, Welter challenges the grant of summary
judgment to Wehilani, arguing (a) there was an issue of material
fact "related to the intent of the developer to restrict or
withhold the right of withdrawal of lots from the Wehilani
Subdivision from its successors and assigns," (b) that conclusion
of law number 7, that Koski's right "to remove Wehilani
Subdivision lots 2-5 and 2-6 terminated and was extinguished"
when Koski transferred "the lot [sic] from its ownership" to
PuaTa, and (C) that the circuit court was wrong in failing to
resolve all doubts in "construing deeds and instruments
containing restrictions and prohibitions as to the use of
property conveyed." Welter also challenges the denial of his
motion for reconsideration because the circuit court failed to
allow the presentation of "direct evidence of the intent of the
developer with respect to the" CCRs.

The circuit court's entry of summary judgment in favor
of Wehilani is reviewed de novo. Tokuhisa v. Cutter Mgmt. Co.,
122 Hawai‘i 181, 187, 223 P.Bd 246, 252 (App. 2009). A motion
for summary judgment should be granted if "there is no genuine
issue as to any material fact and that the moving party is
entitled to judgment as a matter of law." Omerod v. Heirs of
Kaheananui, 116 HawaiU.239, 254, 172 P.3d 983, 998 (2007)
(citation omitted). The interpretation of a contract is a
question of law for the court to decide unless the contract is
ambiguous. Found. Int'l, Inc. v. E.T. Iqe Const., Inc., 102
Hawafi 487, 497, 78 P.3d 23, 33 (2003). Whether or not a
contract is ambiguous is also a question of law. ld4 at 496, 78
P.3d at 32. Conclusions of law are reviewed on appeal under the
right/wrong standard. Tri-S Corp. v. Western World 1ns. Co., 110
Hawai‘i 473, 439, 135 P.zd 82, 98 <2006).

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Welter does not dispute the fact that he stopped paying
assessments required by the CCR. Wehilani produced sufficient
evidence to establish that the assessments were properly
authorized, Welter had failed to pay the assessments, and that
Wehilani was entitled to foreclose on the assessment liens
against the Property. The sole issue is whether or not Welter
had the power to withdraw the Property from the requirements of
the CCR.

As noted above, the deed from Koski to PuaYa transfers
only those rights held by Koski "because of Seller's ownership of
the property." Therefore, Koski was transferring its rights as
owner and not as Declarant. There is no transfer of Koski's
rights as Declarant, nor is there any mention of successorship to
or assignment of the rights of Koski as the Declarant to the CCR
in the deed. The CCR itself states that the rights of the
Declarant may be exercised by Koski or "such other person or
persons whom [Koski] may, by recorded document, designate as
having the powers and functions of Declarant, or some of such
powers and functions." Welter presented no evidence that Koski
made such a designation to himself for his predecessor-in-
interest. Moreover, the deed required Puda to abide by the CCR
"with the Seller and with all other 'Owners' of property." As a
mere Owner, Welter was not entitled to withdraw the Property from
the CCR. The circuit court was correct in entering summary
judgment in favor of Wehilani.

The circuit court did not abuse its discretion in
denying Welter's motion for reconsideration. lt is well settled
that the purpose of reconsideration is to allow parties to
present evidence or arguments that could not have been presented
during the earlier adjudicated motion. See, e.g., Amfac, Inc. v.

Waikiki Beachcomber Inv. Co., 74 Haw. 85, 114, 839, P.2d 10, 26-

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27 (1992). Welter's arguments could have been presented earlier
and, for the reasons stated above, are without merit.

Based on the foregoing, it is hereby ordered that the
April 8, 2009 Final Judgement of the Circuit Court of the Third
Circuit is affirmed.

DATED: Honolulu, HawaiUq September 20, 2010.

on the briefs= ii

Francis L, Jung Presiding Judge
for Defendant-Appellant.

Mark '\/'an Pernis
Gary W. Vancil Associate Judge
//

for Plaintiff-Appellee.

A sociate J dge