County’s Lawsuit Against Ranch Proceeds

Molokai Ranch’s motion to dismiss utility lawsuit is denied.

By Molokai Dispatch Staff

In a hearing last week in the Second Circuit Court, Judge Joel August denied a motion by Molokai Properties, Ltd., also known as Molokai Ranch, to dismiss a lawsuit the County of Maui filed on August 29, 2008.

The County's lawsuit alleges that the Ranch breached a series of contracts under which it agreed to provide utility service to West Molokai in exchange for zoning and other County land entitlements.

In denying the company's motion to dismiss, the court allowed the County of Maui's civil suit to proceed against Molokai Ranch and its wholly-owned subsidiaries – utilities that provide water and wastewater services to Molokai residents.

Both the County and Molokai Properties are expected to now enter into a legal discovery phase that would involve document gathering and depositions of witnesses.

Although the utilities told the court they would continue providing service, the judge’s decision not to dismiss the suit means the County has the power of the court should the utilities renege on their promise and once again threaten to shut down, explained County attorney Jane Lovell.

"Claims that the attorneys' fees and other legal costs of proceeding with the litigation would be passed on to the rate payers would be disputed by the County. Molokai Properties, Ltd.'s legal fees and court costs cannot be passed on to the rate payers," said Lovell.

In August, the County of Maui filed suit against the Ranch to insure that “the company continues to meet its obligations to operate and maintain its water and wastewater systems in West Molokai.” Attorney Margery Bronster, a special counsel representing the county, announced the suit in a press release.

Bronster explained that the goal of the suit is two-fold. The first concerns the contractual agreements entered into with the County of Maui. “When Molokai Ranch and its predecessors sought to develop the property, it agreed to build, operate and maintain water and wastewater systems in West Molokai,” read the complaint filed by the county.

Thirty-one contracts have been uncovered, some dating as far back as 1978, that bind the Ranch to continue operating the utilities, among other agreements, according to the county’s complaint against the Ranch.

The second goal of the suit is to “ask the Ranch to pay for costs and expenses the county has incurred to prepare for this emergency situation,” said Bronster.