A Message from the LCA Secretary

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Agricultural uses of land in Leilani Estates are allowed!

4/29/22

Aloha Neighbors,

Hawaii state law(Hawaii Revised Statutes Chapter 205) established a Land Use Commission which created a legal framework for agricultural uses of land in the agricultural districts of Hawaii. Leilani Estates is located in an agricultural district and all lots are zoned Agriculture 1 acre, A1(a).

As amended in January 2021 the statute at 205-4.6(a) removes any restrictions on agricultural uses of agriculture lands created by any private agreement contained in any deed, agreement of sale, etc. recorded after 7/8/03 that subjects the agricultural land to any servitude, including but not limited to covenants, easements etc. As a result the portions of Leilani's CC&R's that prohibit agricultural uses of land in Leilani Estates are invalid and voidable.

The statute is lengthy but pertinent portions are:

205-2(d) Districting and Classification of Lands.

Agricultural districts shall include:

2. Farming activities or uses related to animal husbandry....

7. ......including farm dwellings as defined in 205-4.5(a).

205-4.5 Permissible Uses within the Agriculture Districts.

(a) 3. Raising of livestock, including poultry,bees, fish......that are propagated for economic or personal use.

4. Farm dwellings, employee housing, farm buildings.......

205-4.6 Private Restrictions on Agricultural Uses and Activities; not Allowed.

(a) Agricultural uses and activities as defined in sections 205-2(d) and 205-4.5(a) shall not be restricted.....

While I understand that this information will be met with a variety of reactions, It would appear that Hawaii State Law is clear. I would hasten to add that I am not an attorney and the above information should not be construed as legal advice.

Happy Farming,

Phil Denney 2022/2023 LCA Director

The following motion are proposed bylaw changes and must receive 2/3 of the votes cast to pass.

Motion 1 – Change the bylaws to mandate an annual audit in December prior to our Board of Directors election and the Treasurer’s final report at the Annual Meeting.  Currently, audits are performed at the request of the Board.  This change makes an audit part of the annual schedule of our association.  December is mandated to ensure any problems are known prior to the election and that the Treasurer presents audited results to us at the Annual Meeting.  It also ensures that the records handed over to the new Treasurer are complete and accurate.

Motion 2 – Change the bylaws so that any Director who misses three (3) consecutive monthly meetings has resigned from the Board and must be replaced. Our community needs active Directors, each helping with all the work involved in governing our community.

Motion 3 – Change the bylaws so the LCA and their representatives, the Board of Directors, must settle all disputes with members and outside entities (ex. vendors) via mediation and then binding arbitration. Our community has spent hundreds of thousands of dollars on lawsuits and lawyers over the last several years.  Some of these were brought by members, some by the Board in the name of the LCA.  This money could have been used to improve our community, and we want this to stop.  When the Board has a dispute with a member or an outside entity, this bylaw change will force the Board to first try mediation to resolve the dispute.  If no resolution is reached, then both parties will submit to binding arbitration.  Members will be bound to accept the results of arbitration as this is part of our bylaws.  We will write this arbitration clause into our agreements with any outside vendors binding them to the results of arbitration.  Lawsuits will be filed only when a party does not comply with the results of arbitration.

Motion 4 - Change the bylaws so that Directors are elected to a two year term. Each year we would elect half of the Board (first year 4, second year 3, then repeat) so that terms are staggered by one year.  This change will foster better continuity and consistency in our Boards and make it easier to persevere on multi-year projects. 

This motion establishes direction for the 2026 Board and requires a majority of votes cast to pass.

Motion 1.  Update our building guidelines and restrictions. 

Although we think of our community as a residential community, all lots in Leilani Estates are classified as agricultural.  There have been extensive changes to the laws that govern the use of agricultural land (State Statutes 205-4.5 and 205-4.6) and changes in county building codes (last major update in 2021) that affect how we build and use land in our community.  Our governing documents and state laws are very clear – state laws and county laws and rules take precedence over our documents.  We need to create an updated set of community building and land use rules based on the changes in the law so that everyone in our community is clear on what can and cannot be done.  This will enable the Architectural Committee to enforce a single standard set of rules.

We require the 2026 Board to commission a comprehensive review of current laws and codes to develop a new set of building and land use rules for our community.  This must be a line item in our budget for 2026 and used as part of calculating assessments.  This process must include a legal review by the corporate counsel and a review with county authorities.  The new rules must be finalized by March 31st, posted on the website prior to the April regular Board meeting, and formally presented at the April regular Board meeting.  

This is an official post from the Ica board of directors. It was brought to my attention that there is information circulating on fb suggesting that the board of directors is going to increase HOA fees. To clarify, the board has not voted on that, nor discussed it. There is no plan to raise dues or have any special assessments. What has been discussed by the board in board meetings is the need to have a survey to figure out the best way to deal with the covered lava roads. Figures were put together based on estimates for reconstructing the roads with either asphalt or cinder and related fees, such as surveying and permitting. From that information we discussed what it would cost each lot owner over a number of years to pay for rebuilding if the community chose to do so. As most of you know, derogatory posts are as common as coqui frogs in leilani. If you want accurate up to date info please refer to the official website where you're able to ask anything you like. Sincere thanks. 

-LCA Secretary

After almost a year and a half of litigation, both existing lawsuits have ended. Questions remain about how much the Leilani Community Association (LCA) will pay to the lawyers involved.

First Lawsuit – Jim Penny and 23 concerned citizens (plaintiffs) vs Al Morrow, Rod Kndle and Janet Morrow (defendants).

History: In the 2024 election cycle, Al and Rod declared all other nominated candidates ineligible due to a variety of “violations”. At the 2024 Annual Meeting, Al and Rod declared themselves the Board without election claiming they were the only “valid” candidates. They added Janet when it was pointed out the Board must have at least 3 members. In violation of our bylaws, Janet was never nominated to the Board. During the New Business portion of the meeting, the members present elected a new Board. Al and Rod declared that no new business could be conducted claiming many of the submitted proxies were “invalid”. They stated this meant there were not enough members represented (quorum) to have a valid vote. The elected members asked the defendants first for mediation and then for binding arbitration on the election issues. Both were refused by the defendants. The elected members then brought a lawsuit against the defendants. The lawsuit sought to force the defendants to seat the elected Board. It also alleged violations of state law and our bylaws around elections and financial information. 

The Money: Jim Penny and the other plaintiffs engaged their own attorney and paid their own legal fees. The defendants claimed coverage by the LCA’s insurance. The insurance company appointed a lawyer and the LCA potentially became liable for up to $35,000 in costs (the insurance deductible). Although they controlled the LCA’s checkbook, Al, Rod and Janet paid nothing to their lawyer leaving approximately $35,000 in invoices to be paid by the 2025 Board. This lawsuit was dismissed by the judge at the plaintiffs’ request with both sides responsible for their legal fees. The 2025 Board is working with our insurance carrier to determine if the LCA or the defendants should be responsible for the $35,000 owed. The 2025 Board’s position is that the LCA should owe nothing as our bylaws do not allow our insurance to cover Board members if they knowingly violate state law or our bylaws. 

End Result: The judge ruled that the reasons the defendants had used to eliminate rival candidates were invalid. This resulted in our 2025 election and the 2025 Board. Seating the members elected in 2024 became irrelevant with the election of the 2025 Board.

Second Lawsuit – LCA (plaintiff) vs John Segalla, Rich Willing, Marianne Farrell, Mark Hauanio, and Jim Penny (defendants).

History: The defendants, elected at the 2024 Annual Meeting, met on a monthly basis in the Pavillion to discuss what was going on in the LCA. The defendants met as private individuals and did not present themselves as the Board. Al and Rod hired a lawyer to write cease and desist letters to the defendants. In January, without informing Smiley Burrows (the newly appointed third member of the Board), Al and Rod filed a lawsuit in the LCA’s name against the defendants without a proper vote. This lawsuit alleged that these members were pretending to be the Board by meeting and discussing the community and were therefore interfering with the functioning of the LCA. At the 2025 Annual Meeting, the LCA members held a legally binding vote to dismiss this lawsuit. The majority members and officers of the new Board, Rich Willing, Smiley Burrows, John Segalla and Janice Tucker, recognized the will of the members and notified the LCA’s lawyer that he was fired, the lawsuit was to be dismissed, and we would pay no further bills. 

The Money: The defendants retained their own lawyer and paid their own legal fees. Al and Rod paid a $5,062.83 retainer to their lawyer using LCA funds (our assessments). By the time of the 2025 election, the LCA had received approximately $30,000 in invoices from the plaintiffs’ lawyer. Again, Al and Rod did not pay these invoices, leaving another $30,000 to be paid by the 2025 Board. Despite the legally binding vote of the members to dismiss the lawsuit, Al and Rod refused to settle and continued to rack up legal bills. The LCA has received approximately $45,000 in additional invoices since the LCA lawyer was dismissed in April.

End Result: This lawsuit was finally dismissed in November, 7 months after members voted to end it. Nothing was accomplished other than a lot of money was wasted. 3 of the defendants are Officers on the 2025 Board. The defendants paid their legal bills out of their own pockets. The LCA’s lawyer is owed approximately $75,000, $30,000 of which Al and Rod could have paid when they controlled the Board and $45,000 which they ran up after we voted to dismiss the lawsuit. The current Board’s position is that the previous $30,000 was not authorized by the LCA and we should not pay it. They firmly believe that the additional $45,000 that was spent after we had dismissed the lawsuit is clearly not the LCA’s responsibility.

Implications 

How much the LCA will end up paying largely depends on who is in the majority on the 2026 Board. If Al, Rod and their supporters are in the majority we should expect to pay the entire $110,000 outstanding. If the current majority members are returned to the Board, they will pay all legitimately authorized legal bills but will fight to ensure the LCA does not pay for work that was unauthorized by the LCA or that occurred after we voted to dismiss the lawsuit and notified the lawyer in writing in April.

This official document is supported by a majority of the 2025 board.