Ka'upulehu Land LLC v. Heirs and Assigns of Pahukula ( 2015 )

*** FOR PUBLICATION IN WEST’S HAWAII REPORTS AND PACIFIC REPORTER ***
Electronically Filed
Supreme Court
SCWC-30475
08-OCT-2015
08:51 AM
IN THE SUPREME COURT OF THE STATE OF HAWAI‘I
---oOo---
________________________________________________________________
KA‘UPULEHU LAND LLC, a Hawai‘i limited liability company,
Petitioner/Plaintiff-Appellee,
vs.
HEIRS AND ASSIGNS OF PAHUKULA (k); et al.,
Respondents/Defendants-Appellants.
________________________________________________________________
SCWC-30475
CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
(ICA NO. 30475; CIV. NO. 08-1-0023K)
OCTOBER 8, 2015
RECKTENWALD, C.J., NAKAYAMA, MCKENNA, AND POLLACK JJ., AND
CIRCUIT JUDGE PERKINS, IN PLACE OF ACOBA, J., RECUSED
OPINION OF THE COURT BY McKENNA, J.
I. Introduction
This case involves a title dispute between
Petitioner/Plaintiff-Appellee Ka‘upulehu Land LLC (“KLL”) and
Respondents/Defendants-Appellants Heirs and Assigns of Pahukula,
et al. (collectively “Defendants”), stemming from KLL’s
“Complaint to Quiet Title” to the following property:
All of that certain parcel of land (being all of the
land(s) described in and covered by Royal Patent Number
6667, Land Commission Award Number 8723, Apana 1 to
Kahoiwai) situate, lying and being at Mahukona, District of
Kohala, Island and County of Hawaii, State of Hawaii,
bearing Tax Key designation (3) 5-7-002:004, and containing
an area of approximately 11.746 acres, more or less.
(“Property”).1
Despite having obtained the Property through paper title
derived from a common grantor, KLL claims that it and
Defendants’ title to the Property is defective because the
common grantor had actually sold the Property prior to his
death. KLL claims that neither it nor Defendants received valid
title to the Property. KLL claims that it is therefore entitled
to one-hundred percent (100%) of the Property through adverse
possession. In the alternative, KLL claims that if title to the
Property descended to the common grantor’s heirs, it is a
cotenant with Defendants.
Defendants, on the other hand, argue that they and KLL are
cotenants because they both received their interests in the
Property through a series of conveyances stemming from the
common grantor.
We hold that the evidence presented by KLL was not
sufficient to establish that the common grantor was not vested
with title to the Property when he died. Therefore, title to
1
The acreage differs slightly from the description in the
“Certificate of Title” prepared by Title Guaranty of Hawaii, Inc. (“Title
Guarantee Certificate”), which described the Property as containing “11.300
acres, more or less.”
2
the Property descended in accordance with the law in effect at
the time of the common grantor’s death to his heirs. We further
hold that Defendants and KLL are cotenants, having received
interests in the Property through mesne conveyances stemming
from the common grantor. Accordingly, the Intermediate Court of
Appeals (“ICA”) erred in finding that there was a genuine issue
of material fact with respect to the existence of a cotenancy.
We therefore vacate the ICA’s January 9, 2014 Judgment on
Appeal and the circuit court’s March 25, 2010 Final Judgment,
and remand this case to the circuit court for a determination of
interests in title to the Property.
II. Background
A. Facts
Land Commission Award No. 8723 and Royal Patent No. 6667
were issued for the Property to Kahoiwai in 1851 and 1875
respectively. In 1885, Kahoiwai deeded the Property to his son,
Kaehuokekai, also known as David Hukai Kahoiwai (“David”).
David died intestate on December 13, 1903. His estate was
probated on August 24, 1904, where the court determined that
David had four heirs: two sisters, Kenoiaina and Miliama;2 a
brother, Pahukula; and Pua, a minor niece. Under the intestacy
laws in effect at the time of David’s death, each heir would
2
Miliama was also known as Miriama.
3
have received a 1/4 interest in David’s estate as Revised Laws
of Hawai‘i (RLH) § 2106 (1898) provided that “[i]f [the
intestate] shall leave no issue, nor father, nor mother, his
estate shall descend one-half to his widow, and the other half
to his brothers and sisters, and to the children of any deceased
brother or sister by right of representation.” As explained in
further detail in Part II below, the administrator of David’s
estate testified in the probate court that the Property had
“upon information been sold during [David’s] lifetime[,]” so the
Inventory he prepared reflected that David had no real property
subject to distribution through probate. No conveyance
document, however, was ever adduced. Therefore, David’s heirs
did not receive any interests in the Property through the
probate proceeding.
While probate was pending, however, three of David’s four
heirs proceeded to convey interests in the Property. A chart of
these conveyances is reflected in the attached Addendum. As can
be seen, through a series of conveyances, KLL obtained an
interest in the Property through one of David’s heirs, Miliama.
Miliama conveyed “all of [her] interest” in David’s estate to
her son, Samuel (“Sam”) Keanu, in 1906. Sam conveyed “all [of
his] right and title and interest” in the Property to Joseph
4
Iseke in 1914.3 Joseph Iseke conveyed “[a]ll of his undivided
interest, representing not less than a 1/3 undivided interest”
in the Property to Richard Smart by warranty exchange deed in
1961.4
In 1988, despite allegedly receiving only a 1/3 interest
himself, Richard Smart purported to convey the entire Property
to the Richard Smart Revocable Personal Trust by quitclaim deed.
In 2002, the Richard Smart Revocable Personal Trust conveyed a
number of properties including a purported 100% interest in the
Property by land trust deed to the Parker Land Trust.5 In 2004,
the Parker Land Trust conveyed four properties purportedly
including the entire Property by quitclaim deed to KLL.
According to the Title Guarantee Certificate issued to KLL
in 2007, Miliama’s interest in the Property “descends straight
and unbroken to” KLL from August 3, 1961, the date of the Joseph
3
Sam’s interest in the Property was conveyed to a “Joseph Isaacs.”
No conveyance of record appears under the name Joseph Isaacs; however, a deed
dated August 3, 1961 conveys a 1/3 interest in the Property from Joseph
“Iseke” to Richard Smart.
4
It is unclear how Joseph Iseke was able to convey a 1/3 interest
if he received his interest through a series of mesne conveyances from
Miliama, who would have received only a 1/4 interest in the Property through
intestacy.
5
There is a mark indicating that the Property was recorded in the
“Land Court System”; however, the Bureau of Conveyances stamp appears in the
“Regular System” portion of the deed. The deed that conveys the Property
from Parker Land Trust to KLL was recorded in the “Regular System.” Neither
KLL nor Defendants assert that the Property is Land Court property.
5
Iseke to Richard Smart deed, to June 15, 2004, the date KLL
received its interest in the Property.6
David’s heir Pahukula died intestate without conveying an
interest in the Property and without a probate proceeding of his
estate or a judicial determination of his heirs. The record,
however, includes a deed from Pahukula to his son, Henry C.
Hapai, that was recorded with the Registrar of Conveyances in
September 1910. In this deed, Pahukula conveyed his “undivided
interest in the estate of [his] father/uncle Kahoiwai[,]” which
included a property on Maui specifically described in the deed.
Pahukula conveyed only his interest in the Maui property, and
not any interest in the Property. Therefore, the status of
Pahukula’s interest, if any, remains unclear.
The remaining half of the Property descended to William P.
McDougall (“McDougall”). Kenoiaina deeded “all” of her “right,
title, interest and estate . . . in and to” the Property to
McDougall in 1907. In 1908, David’s heir Pua deeded her “right
to [her] share of” the property to H.L. Holstein, the attorney
of record for David’s heirs throughout the probate proceeding,
who conveyed “all” of his “right, title, interest and estate in
and to” the Property to McDougall in 1909.
6
Notably, the maximum liability of the Title Guarantee Certificate
is limited to one thousand dollars ($1,000).
6
McDougall died intestate in 1935. McDougall’s probate
proceeding inventory did not contain any real estate holdings.
No judicial determination was made of McDougall’s heirs;
however, according to the Title Guarantee Certificate, Bureau of
Health Statistics records reveal that McDougall had a son,
Albert McDougall, who died at the age of 37 in 1923, twelve
years before the elder McDougall’s death. The record further
reveals that Albert had a wife, Mary McDougall, who died in
1935, leaving four minor children: Walter, Hazzerd, Nani, and
George McDougall. The Defendants in this case are McDougall’s
great-grandchildren, who had not heard about the Property, but
who may have an interest in the Property through McDougall.
B. Circuit Court Proceedings
On January 25, 2008, KLL commenced its quiet title action.
KLL claimed title to the Property on alternative grounds.
First, KLL claimed title to 100% of the Property through adverse
possession. In the alternative, KLL claimed a cotenancy with
Defendants as record owner pursuant to the 2004 quitclaim deed
from Parker Land Trust.
1. KLL’s Motion for Default Judgment and/or Summary
Judgment
On December 3, 2009, KLL filed a motion for default and/or
summary judgment. KLL argued that it had title to 100% of the
Property by adverse possession due to an alleged “break in the
7
chain of title that gives rise to claims of paper title by both
[KLL] and [Defendants].” KLL contended that David sold the
Property prior to his death, and thus, neither party could claim
paper title through David’s heirs.
KLL admitted that there was no record of any conveyance
made by or under the name of Kaehuokekai or his alias David
Hukai Kahoiwai; however, KLL asserted that David’s probate
records constitute prima facie evidence that David sold the
Property before he died. The probate records KLL noted include
the Inventory of David’s estate, filed on February 14, 1905, in
which E.A. Fraser, a creditor and the administrator of David’s
estate stated under oath that “certain kuleana #8723 in the name
of Kahoiwai situate at Pulehu near Mahukona and which belonged
to deceased had upon information been sold during lifetime of
said Kahoiwai.” The Inventory further provided that the only
property remaining in David’s possession at the time of his
death was 10 shares in ‘Ewa Plantation, stating “None” for real
estate held by David.
In addition, KLL noted other records in the probate
proceeding that allegedly support its position, including (1)
clerk’s minutes entered on February 2, 1906 wherein the clerk
wrote, “Sam Keanu [] makes an appearance as a claimant to real
8
estate which he claims Kahoiwai owned and sold[;]”7 (2) Schedule
A of the Final Accounts filed on September 13, 1905, which
states that the estate’s only asset was “$314.50” derived from
the sale of the ‘Ewa Plantation Stock; (3) a master audit report
filed on August 30, 1917 (i.e., twelve years after the opening
of probate), which confirms the Final Accounts as “correct[;]”
and (4) a power of attorney signed by all four heirs in which
the heirs “accept as correct” the clerk’s accounting of the
assets and liabilities of the estate.
In further support of its adverse possession claim, KLL
argued that it and its predecessors in interest (1) continuously
used the Property for ranching operations since 1961; (2)
controlled access onto the Property by posting “no trespassing”
signs; (3) maintained fences, walls, gates, and chains; and (4)
excluded trespassers from the area.
In support of these assertions, KLL submitted a number of
declarations from individuals familiar with ranching operations
conducted on the Property. Declarations were submitted for
Melvin B. Hewitt (“Hewitt”), a retired trustee of the Richard
Smart Revocable Personal Trust and the Land Trust Agreement for
7
It is unclear why Sam Keanu made this statement as he was making
an appearance as a claimant to the Property he obtained from Miliama, one of
David’s heirs. In addition, the clerk’s minutes from February 5, 1906 note
that a certified copy of the deed from Miliama to Sam Keanu was filed in the
probate proceeding.
9
the Parker Ranch Foundation Trust, Masa Kawamoto (“Kawamoto”), a
rancher and resident of the area since 1922 who had been
employed by Parker Ranch as a foreman from 1937-1967, Harry M.
Von Holt (“Holt”) and Herbert M. Richards, Jr. (“Richards”),
ranchers and residents of the area since 1948 and 1955,
respectively, and John Metzler (“Metzler”), a managing member of
KLL.
Hewitt, Holt, and Richards stated that Richard Smart had
purchased the Property in 1961 and used it continuously for
ranching operations by Parker Ranch. Hewitt, Kawamoto, Holt,
and Richards stated that Parker Ranch (1) cleaned and maintained
the Property; (2) controlled access by posting no trespassing
signs, maintaining fences, walls, gates and chains, and
excluding trespassers from the Property; (3) did not allow
anyone to enter or remain on the Property without Parker Ranch’s
consent; and (4) used it continuously for ranching operations
since 1961, such as pasturage, breeding, and running cattle.8
They also stated that members of the community, including
neighboring property owners, acknowledged and recognized that
Parker Ranch owned and operated the Property until it was sold
to KLL in 2004.
8
Kawamoto also stated that he had been personally involved with
and supervised fence building, cattle operations, and various other ranching
activities on the Property.
10
Finally, Metzler stated that since KLL purchased the
Property in 2004, together with other surrounding properties,
KLL continued the ranching operations conducted by the
Property’s previous owner, Parker Ranch. Metzler stated that,
similar to Parker Ranch, KLL had controlled access to the
Property and that members of the community, including
neighboring property owners, acknowledge and recognize that KLL
owns the Property.
As an alternative to its adverse possession claim, KLL
argued that, if the circuit court found that the Property had
not been sold before David died, then KLL and Defendants were
cotenants with each having paper title to 1/2 of the Property.
b. Defendants’ Arguments
Defendants filed a memorandum in opposition to KLL’s motion
for default and/or summary judgment, denying that David sold the
Property. First, Defendants noted that no mention was made of
the person to whom the Property was purportedly sold, and
asserted that no other evidence of the alleged conveyance
existed. Defendants contended that the probate statements
regarding a sale were made in error as evidenced by the
conveyances by three of David’s four heirs in 1906, 1907, and
1908, while probate was still pending (probate closed in 1917).
Defendants argued, therefore, that the Property descended to
David’s heirs, Kenoiaina, Miliama, Pahukula, and Pua, through
11
intestacy. Defendants maintained that KLL and Defendants
therefore obtained title from David’s heirs and were thus
cotenants.
Second, Defendants argued that KLL’s predecessor was
plainly on notice of the cotenancy because (1) the 1961 deed
from Joseph Iseke to Richard Smart purported to convey only a
1/3 interest in the Property, and (2) multiple deeds recorded in
the Registrar of Conveyances in 1908 (from Kenoiaina and Pua)
and 1909 (from H.L. Holstein) show that David’s other heirs
conveyed the Property to McDougall. Defendants further argued
that KLL failed to prove that it acted in good faith to the
cotenants during the purported period of adverse possession.
Finally, Defendants asserted that whether any parties
inherited the Property from David based on the probate records
was an issue of fact required to be resolved at trial;
therefore, KLL’s motion should be denied.
c. KLL’s Reply
KLL argued in reply that Defendants failed to set forth
specific facts as to whether David had title to the Property
when he died in order to demonstrate a genuine issue of material
fact for trial. KLL argued that it presented undisputed
evidence that conclusively proved that David sold the Property.
KLL asserted that neither KLL nor Defendants had title to the
Property because title was vested in someone else when David
12
died. KLL therefore argued that no cotenancy existed and that,
therefore, the requirement of good faith notice to cotenants was
inapplicable to KLL’s claim of title by adverse possession.
2. The Circuit Court Ruling
On December 21, 2009, the circuit court held a hearing on
KLL’s motion for default and/or summary judgment.9 KLL argued
that there was direct testimony from the administrator of
David’s estate, and the entire probate record itself was devoid
of any reference to the Property; therefore, cotenancy was not
an issue because David had transferred his interest in the
Property before he died. KLL asserted that the only issue was
whether it had met its burden for adverse possession.
Defendants countered that the deed from the alleged
transaction never surfaced, nor was the person who took that
conveyance ever identified.
The circuit court then asked Defendants what other evidence
would be presented to the court at trial, and stated:
If there’s no genuine material issue of fact, these are the
facts, there’s not more facts and there’s not live
witnesses where the Court is placed in a position of
evaluating credibility, it is just – these are the facts
and we disagree as to what the legal results should be or
are there facts that the Court needs to weigh?
9
The Honorable Elizabeth A. Strance presided.
13
Defendants responded that they were not aware of any additional
facts, but they would have the opportunity to further
investigate if the case were to proceed to trial.
On February 4, 2010, the circuit court filed an order
granting KLL’s motion for default and/or summary judgment,
concluding that (1) there were no genuine issues of material
fact with respect to title to the Property, and (2) KLL was
entitled to judgment as a matter of law to 100% of the Property
by adverse possession free of all claims and encumbrances.
On March 24, 2010, the circuit court entered its final
judgment, which Defendants appealed to the ICA.
C. ICA Appeal
1. Defendants’ Opening Brief
In their Opening Brief, Defendants argued that the
circuit court erred as a matter of law in granting summary
judgment in KLL’s favor as to exclusive ownership of the
Property. Defendants contended that the only conclusion
supported by KLL’s evidence is that it holds paper title jointly
with Defendants. Defendants further argued that KLL cannot set
up title in an unknown stranger to defeat the cotenancy between
itself and Defendants in order to avoid its burden of notice to
cotenants. Defendants asserted that, at most, the circuit court
could have found that there were competing claims to paper title
to defeat summary judgment to the extent that KLL presented
14
sufficient evidence to raise a genuine issue of material fact
that David sold the Property before he died, or alternatively,
that KLL holds title jointly with Defendants.
2. KLL’s Answering Brief
KLL argued that the circuit court correctly granted summary
judgment in its favor because Defendants could not support their
claim of paper title to the Property and failed to raise a
genuine issue of material fact. KLL contended that it provided
sufficient evidence in the form of David’s probate records to
show that David was not vested with title to the Property at the
time of his death. KLL argued that because it derives title by
adverse possession and established that David was not vested
with title when he died, it could not be cotenants with
Defendants.
KLL further argued that the circuit court correctly ruled
that it had established title to 100% of the Property by adverse
possession where it established all the necessary elements of
title by adverse possession.
3. Defendants’ Reply Brief
In reply, Defendants maintained that KLL’s adverse
possession claim attempts to set up title in a stranger to
defeat Defendants’ claim, and cannot stand without the court
first determining that someone else held title to the Property
before David died. Defendants argued that the circuit court, in
15
ruling that KLL had title to 100% of the Property by adverse
possession, erroneously ruled by implication that an unknown
stranger held paper title to the Property against whom KLL was
adversely possessing.
4. The ICA Memorandum Opinion
The ICA ruled that, according to the record, David’s heirs
received no interest in the Property through the probate
proceeding. Kaʻupulehu Land LLC v. Heirs and Assigns of
Pahukula, No. 30475, at 2-3 (App. Dec. 11, 2013) (mem.). The
ICA cited the following in support: (1) the February 6, 1905
Inventory stating that David owned no real estate at death and
containing an averment by the estate’s administrator confirming
that to his knowledge, the Property had been sold during David’s
lifetime; (2) the February 2, 1906 clerk’s minutes regarding Sam
Keanu’s “appearance as a claimant to real estate which he claims
[David] owned and sold.”; and (3) the August 22, 1906 power of
attorney executed by David’s heirs acknowledging a clerk’s
accounting of the probate expenses and residue of the estate as
accurate. Kaʻupulehu, mem. op. at 3. The ICA also noted,
however, that there was no record of David’s “purported pre-
death conveyance of the Property[.]” Id.
The ICA concluded that Defendants “provided evidence
showing interests in the Property through a chain of paper title
that is not perfect. But in the case at hand, the break in the
16
chain of record title carries an added significance: the break
places the existence of a cotenancy between [KLL] and the
Defendants in dispute.” Kaʻupulehu, mem. op. at 6-7.
The ICA stated: “If there were no gaps in the chain of
record title, the parties would be cotenants because the paper
interests of all parties originate with the series of
conveyances made by David’s heirs.” Kaʻupulehu, mem. op. at 7.
The ICA reasoned that the break in record title occurred between
David and his heirs because “David’s probate records suggest the
Property was sold before he died, and that no interest in the
Property was distributed to David’s heirs through probate.” Id.
The ICA concluded, however, that “there is no recorded
conveyance by David to any third party, and three of David’s
four heirs conveyed an interest in the Property after David’s
death and before probate closed.” Id. The ICA thus concluded:
“The issue then is where there is a shared break in the parties’
chains of record title, does [KLL] prevail on summary judgment
by claiming superior title to the Defendants through adverse
possession?” Id.
The ICA explained that where a cotenancy exists, there is a
requirement of good faith between cotenants that requires the
tenant claiming adversely to actually notify the cotenants of
his or her claim against them, and that a “finding of bad faith
may be inferred from evidence that the cotenant in possession
17
should have known that a cotenancy existed.” Kaʻupulehu, mem.
op. at 8 (citing Wailuku Agribusiness Co. v. Ah Sam, 114 Hawaiʻi
24, 34, 155 P.3d 1125, 1135 (2007), as amended (Apr. 12, 2007)).
The ICA further stated, “Breaks in chains of record title
provide reason to suspect the existence of one or more
cotenancies.” Id. (citing Petra v. Allencastre, 91 Hawaiʻi 545,
985 P.2d 1112 (App. 1999)).
The ICA held that in concluding that a cotenancy did not
exist, the circuit court erroneously resolved the disputed issue
of material fact, the existence of a cotenancy, in favor of KLL.
The ICA concluded:
[T]he lack of a recording from David’s purported pre-death
conveyance, together with the recorded conveyances of
interests in the Property by David’s heirs, are genuine
issues of material fact regarding the existence of a
cotenancy. The existence of a cotenancy is a material fact
that [KLL] must overcome to satisfy its proof of title
through adverse possession.
Id. The ICA further concluded that the conveyances to Sam Keanu
and H.L. Holstein were particularly notable from an evidentiary
standpoint because (1) Sam testified during David’s probate
proceedings that the Property had been sold, and (2) H.L.
Holstein, the heirs’ probate attorney of record, received an
interest in the Property from one of David’s heirs. Thus,
“[w]hile Keanu and Holstein had knowledge of the probate
proceedings that did not distribute any interest in the Property
to David’s heirs, both took interests in the Property from
18
David’s heirs and subsequently conveyed those interests.”
Kaʻupulehu, mem. op. at 9. The ICA concluded that “[a]ny
inferences from this evidence must favor the Defendants, the
non-moving party.” Id.
The ICA then cited to its decision in Makila Land Co. v.
Kapu, 114 Hawaiʻi 56, 156 P.3d 482 (App. 2006), which states the
following regarding genuine issues of material fact arising from
conflicting interpretations of undisputed facts, as in the
instant case, that preclude summary judgment:
A judge ruling on a motion for summary judgment cannot
summarily try the facts; his role is limited to applying
the law to the facts that have been established by the
litigants’ papers. Therefore, a party moving for summary
judgment is not entitled to a judgment merely because the
facts he offers appear more plausible than those tendered
in opposition or because it appears that the adversary is
unlikely to prevail at trial. . . . Therefore, if the
evidence presented on the motion is subject to conflicting
interpretations, or reasonable men might differ as to its
significance, summary judgment is improper.
Id. (citing 114 Hawaiʻi at 67-68, 156 P.3d at 493 (citing Kajiya
v. Dep’t of Water Supply, 2 Haw. App. 221, 224, 629 P.2d 635,
638–39 (App. 1981))). The ICA held that it could not conclude
that KLL “has a right to judgment with such clarity as to leave
no room for controversy, nor ha[d] [KLL] established
affirmatively that Defendants cannot prevail under any
circumstances.” Id. The ICA therefore vacated the circuit
court’s final judgment granting KLL’s motion for default and/or
summary judgment, and remanded the case to the circuit court.
Kaʻupulehu, mem. op. at 9-10.
19
III. Standard of Review
This court has stated:
A motion for summary judgment is reviewed de novo,
under the same standard applied by the trial court.
Summary judgment is appropriate if the pleadings,
depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there
is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law.
A fact is material if proof of that fact would have the
effect of establishing or refuting an essential element of
a cause of action asserted by one of the parties.
On a motion for summary judgment, the court must view
the evidence in the light most favorable to the non-moving
party. The court is permitted to draw only those inferences
of which the evidence is reasonably susceptible and it may
not resort to speculation.
The burden lies upon the moving party to show that no
genuine issue of material fact exists with respect to the
essential elements of the claim and that, based on the
undisputed facts, he is entitled to judgment as a matter of
law. Only once the moving party has satisfied its initial
burden of production does the burden shift to the non-
moving party to show specific facts that present a genuine
issue for trial.
When a summary judgment motion is filed before the
discovery deadline, a [Hawai‘i Rules of Civil Procedure
(HRCP)] Rule 56(f) continuance provides the means by which
a non-moving party can assure that she has had adequate
time to conduct discovery before the motion is decided.
Winfrey v. GGP Ala Moana LLC, 130 Hawai‘i 262, 270-71, 308 P.3d
891, 899-900 (2013) (internal citations, brackets, and quotation
marks omitted).
IV. Discussion
A. Title to the Subject Property Vested in David’s Heirs
Upon His Death
This case turns on whether David was vested with title to
the subject property when he died. If he was, then KLL and
Defendants are cotenants, and as explained below, KLL would not
be able to meet legal requirements to establish adverse
20
possession with respect to its cotenants. If he was not vested
with title, then KLL and Defendants are not cotenants, and the
circuit court properly concluded that KLL is entitled to a 100%
interest in the Property based on adverse possession.
In this regard, the parties dispute whether David sold the
Property prior to his death and the sufficiency of KLL’s
evidence to prove the sale. KLL argues that it is entitled to
100% of the Property by adverse possession because David was not
vested with title to the Property at death and thus, the parties
are not cotenants. KLL asserts that it “provided ample,
uncontroverted evidence from David’s probate proceedings
establishing that he had sold . . . the Property prior to his
death.” For example, the order of distribution of David’s
estate admitted into evidence contains no mention of the
Property. KLL therefore argues that the ICA gravely erred and
was obviously inconsistent in finding genuine issues of material
fact regarding the existence of a cotenancy, and asserts that
the ICA’s conclusion that David’s heirs received no interest in
the Property through the probate proceeding disposes of
Defendants’ claims.
Defendants contend that the omission of the Property in the
probate distribution is not a conclusive or binding
determination of David’s non-ownership of the Property; thus,
21
title to the Property cannot fail to pass to David’s heirs by
virtue of a probate order.10
10
As a preliminary matter, although not argued by the parties, we
note the effect of two legal precepts relevant to the issues. First, the
statute of frauds in effect at the time provided, in relevant part:
No action shall be brought and maintained in any of the
following cases:
. . . .
Fourthly: Upon any contract for the sale of lands,
tenements or hereditaments, or of any interest in or
concerning them;
. . . .
Unless the promise, contract or agreement, upon which
such actions shall be brought, or some memorandum or note
thereof, shall be in writing, and be signed by the party to
be charged therewith, or by some person thereunto by him
lawfully authorized.
RLH § 1314 (1898); RLH § 1996 (1905) (recodification).
Defendants raised the statute of frauds in their Answer, but did not
provide any further argument. As this affirmative defense was pled, it was
not waived. Lee v. Kimura, 2 Haw. App. 538, 545, 634 P.2d 1043, 1048 (1981)
(“The defense of the statute [of frauds] . . . may undoubtedly be waived by
the defendant, and unless he sets up the statute and relies on it by some
proper pleading, he thereby impliedly waives the objection that the contract
was not in writing.” (internal quotation marks and citations omitted)). See
also HRCP Rule 8(c) (2000) (affirmative defenses). Because we rule in
Defendants’ favor on other grounds, we do not rely on the statute of frauds.
We note, however, that the alleged conveyance from David would be void and
unenforceable under the statute of frauds as no written memorandum signed by
David evincing the alleged sale of the Property has been produced.
Second, pursuant to RLH § 2380 (1905),
All deeds . . . or other conveyances of real estate within
this Territory, shall be recorded in the office of the
registrar of conveyances, and every such conveyance not so
recorded shall be void as against any subsequent purchaser,
in good faith and for a valuable consideration, not having
actual notice of such conveyance, of the same real estate,
or any portion thereof, whose conveyance shall be first
duly recorded.
The record is devoid of evidence of a deed from David’s alleged pre-
death sale of the Property. Therefore, if David had sold the Property, the
buyer’s failure to record the deed would have rendered it void as against
subsequent purchasers without actual notice of the purported sale, i.e., at
(continued. . . )
22
The only direct evidence in support of KLL’s allegation is
the administrator’s testimony under oath in the February 14,
1905 Inventory “[t]hat a certain kuleana #8723 in the name of
Kahoiwai situate at Pulehu near Mahukona and which belonged to
deceased had upon information been sold during lifetime of said
Kahoiwai[,]” and a February 2, 1906 entry in the clerk’s minutes
that reads: “Sam Keanu makes an appearance as a claimant to
real estate which he claims Kahoiwai owned and sold.” Neither
of these, however, conclusively establishes a sale as KLL
contends.
First, the administrator’s statement was based on “his
knowledge and belief[,]” and provides no information to support
the statement. Second, Sam Keanu purchased an interest in the
Property from his mother Miliama for $50 in exchange for “all of
[Miliama’s] interest in [David’s] estate . . . , being all the
real and personal property at Kohala[.]” Both of these
statements are being “offered in evidence to prove the truth of
the matter asserted[,]” i.e., that David sold the Property, and
thus constitute hearsay. Hawai‘i Rules of Evidence (HRE) Rule
801 (1993). Nonetheless, the statements may be admissible as a
hearsay exception under either HRE Rule 803(b)(15) (1993), which
( . . .continued)
minimum, McDougall and Joseph Iseke, subsequent purchasers not involved in
the probate proceeding. Again, Defendants do not rely on this theory, and we
decide this case in their favor on other grounds.
23
provides for the admissibility of “[s]tatements in documents
affecting an interest in property,” or Rule 803(b)(16), which
provides for the admissibility of “[s]tatements in a document in
existence twenty years or more the authenticity of which is
established.” The admission of these statements, however, is
not determinative.
As noted by the ICA, there were multiple conveyances of the
Property during the probate proceeding by individuals who would
have known if David had not been vested with title. Three of
David’s heirs conveyed interests in the Property during
probate.11 Notably, the record also reflects that Sam Keanu and
H.L. Holstein, the heirs’ attorney of record, accepted
conveyances of the Property12 that were inconsistent with the
statements made in the probate proceedings by the administrator
and Sam Keanu himself.
In addition to relying on these hearsay statements, KLL
notes that the probate record is devoid of any reference to the
Property being part of David’s estate. Multiple documents,
including the February 14, 1905 Inventory and the September 13,
1905 Final Accounts, state that the only asset remaining in
11
As discussed supra, there is no record of conveyance of the
disputed Property by David’s brother Pahukula, who was listed as an heir at
David’s probate proceedings.
12
Pua was a minor at the time of David’s probate proceedings in
1905. Although the record does not state how old she was, H.L. Holstein, her
attorney on record, received an interest from Pua in 1908.
24
David’s estate was 10 shares of ʻEwa Plantation stock.
Furthermore, the power of attorney signed by all four heirs, the
August 30, 1917 master audit report, and the August 30, 1917
probate court order accepting the report, all confirm that the
Property was not part of David’s probate estate subject to
distribution. KLL argues that Defendants had an opportunity to
dispute the Inventory and accounting, but did not do so.
For the following reasons, the omission of the Property in
the probate Inventory does not govern whether the Property was
part of David’s estate.
First, the Inventory is merely “prima facie evidence of the
property that has come to the possession, or under the control
of the [administrator].” In re Gill’s Estate, 2 Haw. 681, 688
(King. 1863) (Explaining that sworn inventories “are supposed to
contain a full and true exhibit of the entire assets of the
testator, whether they may have actually come to the possession
of the executor or not[.]”).
Second, the statute in effect in 1905 authorizing orders
for the filing of inventories of the assets of a decedent’s
estate by an administrator did not require real property to be
inventoried. In re Lopez’ Estate, 19 Haw. 620, 623 (1909) (“The
statute . . . authorizing orders ‘for the filing of inventories
of the assets’ by the administrator does not require real estate
to be inventoried and probably refers to . . . ‘all the goods,
25
chattels and credits of the deceased coming to his possession.’”
(citing RLH § 1850 (1905))).
Third, and most importantly, we note that under the law in
effect in 1903, “[t]itle to real estate vest[ed] at once on the
death of the owner in his heirs or devisees, and without an
order of court.” In re Kaiena’s Estate, 24 Haw. 148, 148 (Terr.
1917); cf. id. (quoting 2 Schouler on Wills (5th ed.), § 1212)
(“Real estate, at the common law, becomes vested at once on the
death of the owner in his heirs, or devisees, and the executor
or administrator has as such no inherent power over it.”). See
also In re Kekuewa, 37 Haw. 394, 397 (Terr. 1946) (stating that
real property “ordinarily constitutes no part of the assets of
administration”); Pahuilima v. Kela, 6 Haw. 573, 574 (King.
1885) (demonstrating that heirs at law succeed to possession of
real property); Keahi v. Bishop, 3 Haw. 546 (King. 1874)
(holding that where a probate court determines that a certain
relationship exists without reference to title to real estate, a
related party is entitled to use that decision for the purpose
of getting possession of and defending himself in possession of
real estate he or she inherits by such relationship); Rodrigues
v. Char Fook, 29 Haw. 284, 286-87 (Terr. 1926) (holding that
real estate of a decedent passes immediately upon death to the
heirs or devisees, subject to any proceedings to satisfy the
decedent’s debts).
26
Thus, if there was no valid conveyance of the Property
before David’s death and if he had been vested with title when
he died, his interest in the Property passed outside of probate
as a matter of law to David’s heirs at law, which the probate
court determined to be Kenoiaina, Miliama, Pahukula, and Pua.13
B. The Lost Deed Doctrine Precludes a Finding That David
Conveyed the Property Before His Death
Defendants argued before the ICA that in order for KLL to
claim title to 100% of the Property by adverse possession, KLL
must prove the lost deed from David’s alleged sale of the
Property.14 Defendants argued that pursuant to Kapuniai v.
Kekupu, 3 Haw. 560 (King. 1874), when an unrecorded lost deed is
set up as the basis of title, a movant must allege sufficient
facts to show clear proof of the execution of the deed and proof
of its contents to enable the court to determine the character
of the instrument. (citing 3 Haw. at 561). This is known as
the “lost deed” theory or doctrine. Defendants further argued
that in asserting a lost deed theory, factors required to
13
Defendants contend that HRS § 560:3-1008 (2006) and Rule 86 of
the Hawai‘i Probate Rules, which permit the probate court to address newly
discovered assets, “support the contention that property inadvertently left
out of probate by mistake or inadvertence once discovered must be
distributed.” As the Property would have passed outside of probate for
purposes of administration pursuant to the law in effect at the time of
David’s death, the modern view of real property in probate is not pertinent.
14
As noted in note 10, supra, Defendants did not specifically rely
on the statute of frauds.
27
support a movant’s presumption for a lost conveyance include the
following:
[T]he length of time the land has been in the movant’s
possession, the completeness of the chain of conveyances of
the land during the period under which the movant claimed,
references in other earlier deeds tending to indicate that
the title was out of the answering party’s predecessor, and
other facts tending to show the exclusive possession under
claim of ownership on the part of the movant’s
predecessors.
(citing Brown v. Speckles, 18 Haw. 91, 93 (Terr. 1906)).
In response, KLL asserted that Defendants misapprehend and
misapply the lost deed doctrine. KLL argued that its source of
title is by adverse possession, not the lost deed, thus the lost
deed theory does not apply as a matter of law.
In Kapuniai, the defendant in an ejectment action in
possession of a disputed property asserted that Kapuniai, the
last known owner, had given her late husband an unrecorded deed
that had been lost. The territorial court of Hawai‘i stated that
to prove the lost deed,
The law is undoubted that it will be necessary that there
should be presented clear proof of the execution of the
deed, and proof of its contents sufficient to enable the
Court to determine the character of the instrument. This
principle is so clear as not to need the citation of any
authority.
3 Haw. at 561.
Subsequently, in Brown, the Supreme Court of the Territory
of Hawai‘i considered whether evidence adduced by defendants in
support of their assertion of title by adverse possession was
28
sufficient to presume a lost grant to defendants’ predecessors.
The territorial court stated:
When for a long period a plaintiff in ejectment and his
predecessors have made no claim of title and the defendants
and their predecessors have been in possession under claim
of title, the court may, according to the circumstances,
instruct the jury that they may or should presume a deed to
the defendants’ predecessor in order to quiet their
possession and solve the difficulties, and in so doing the
jury may consider what may have occurred as well as what
may fairly be supposed to have actually occurred.
18 Haw. at 91. Although the lower court had instructed the jury
on the presumption of a lost deed as requested, the defendants
contended on certiorari that “the evidence was such that as a
matter of law the court should have directed a verdict” in their
favor. 18 Haw. at 107. The territorial court determined that
“the evidence was such as to permit, if not require, the jury to
find against the theory of a lost grant” because the purported
period of adverse possession involved was only 38 years and the
presumption was not based on a lost deed, but on a proved deed
between defendants’ predecessors that omitted part of the
disputed land. Id.
In this case, KLL’s assertion of a 100% interest in the
Property based on adverse possession is completely dependent on
the existence of a pre-death conveyance by David; KLL otherwise
concedes that it is a cotenant with Defendants and that it
cannot meet adverse possession requirements against Defendants
as cotenants. We therefore reject KLL’s assertion that it is
not claiming adverse possession under the purportedly lost deed.
29
In other words, in arguing that the lost deed theory does not
apply, KLL contends that it is not claiming an interest in the
Property through the chain of paper title; however, KLL’s
adverse possession claim depends upon the purported existence of
an unrecorded lost deed to an unidentified stranger. Thus, in
order for KLL to claim title to 100% of the Property by adverse
possession, it must establish the existence of the lost deed
under the doctrine.
KLL has not put forth any evidence of the execution of the
allegedly lost deed or its contents to enable this court to
determine its character. In particular, no evidence has been
adduced that indicates the grantee, the date of sale, or the
consideration provided for the Property. The evidence is
therefore insufficient, as a matter of law, to establish the
lost deed under the doctrine, and KLL has failed to satisfy its
burden to prove the existence of the purportedly lost deed.
C. KLL and Defendants are Cotenants
In light of the fact that (1) there was no record of a
conveyance by David to anyone before he died; (2) the existence
of the purportedly “lost deed” has not been proven; (3) the
purported grantee of the Property never attempted to assert
his/her rights to the Property; (4) real property was not
required to be included in an inventory of a decedent’s estate;
(5) under the law in effect at the time, “[t]itle to real estate
30
vest[ed] at once on the death of the owner in his heirs or
devisees, and without an order of court[;]” and (6) three of
David’s heirs conveyed interests in the Property after David’s
death but during the probate proceedings while acknowledging
that there was no real property in David’s estate subject to
distribution through probate, the evidence presented is not
sufficient to establish that David was not vested with title to
the Property when he died. In re Kaiena’s Estate, 24 Haw. at
148. We therefore hold that title to the Property descended to
David’s heirs as a matter of law.
As the evidence put forth by KLL failed to establish the
alleged break in the chain of record title, the ICA erred in
concluding that the issue in the instant case was whether KLL
could prevail on summary judgment by claiming superior title to
Defendants through adverse possession when there is a shared
break in the parties’ chains of record title. Kaʻupulehu, mem.
op. at 7.
KLL and Defendants each received their respective interests
through the same chain of title. KLL’s interest stems from a
series of conveyances starting with a conveyance by David’s
sister Miliama. While Miliama only had a 1/4 interest to
convey, KLL purportedly received an interest to 100% of the
Property from Richard Smart, who himself had received only a 1/3
interest in the Property in 1961 from Joseph Iseke; thus the
31
basis of Iseke’s 1/3 conveyance rather than 1/4 conveyance is
unclear.
Despite having actual knowledge that he received only a
fractional undivided interest in the Property, Richard Smart
purported to convey a 100% interest in the Property to his
Revocable Personal Trust in 1988. This purported conveyance
occurred despite the existence of recorded deeds conveying (1)
Kenoiaina’s interest in the Property to McDougall in 1907, (2)
Pua’s interest in the Property to H.L. Holstein in 1908, and (3)
H.L. Holstein’s interest in the Property to McDougall in 1909.
“Where one tenant in common makes a deed to the whole of the
common property the deed conveys only his own interest and does
not convey the interests of his cotenants[.]” Scott v. Pilipo,
24 Haw. 277, 282-83 (Terr. 1918). Moreover, “if real estate is
held in common, and one tenant assumes to convey the entire land
. . . , his deed will furnish color of title.” Kalamakee v.
Wharton, 16 Haw. 228, 234 (Terr. 1904). Applying and extending
these legal precedents, Richard Smart’s deed to his Revocable
Personal Trust furnished mere color of title to the entire
32
Property as opposed to the paper title that KLL claims. Thus,
KLL received paper title to a 1/4 interest in the Property.15
Defendants, on the other hand, claim their interest in the
Property through McDougall, whose interest stems from
conveyances by Kenoiaina and Pua in 1907 and 1908. There is no
evidence in the record that McDougall asserted any rights to the
15
We note that the deeds conveying the Property from the Richard
Smart Revocable Personal Trust to the Parker Land Trust, and then to KLL,
describe the Property under an incorrect Land Commission Award (LCA) number
(LCA 8098 as opposed to LCA 8723) and also by Tax Map Key (TMK) number.
“It is a well settled rule that descriptions of land in a deed must be
reasonably certain, either by express language contained therein or by
reference therein to some other deed or instrument or existing conditions
capable of ascertainment.” Hayselden v. Lincoln, 24 Haw. 169, 172 (Terr.
1917). In addition, “where a contradiction occurs in the description of land
conveyed by grant, the false or mistaken part of the description may be
rejected and effect given to the grant if the other parts of the description
identify the land and do not conflict with the manifest intent of the
parties.” Mist v. Kawelo, 11 Haw. 587, 590 (Rep. 1898) (“[I]f there be a
description of the property clear and definite and sufficient to render
certain what is to be demised, the addition of a wrong name or of an
erroneous statement as to quantity, occupancy, locality or an erroneous
enumeration of particulars, will have no effect.”).
Interpreting the description of the Property in the deed, the TMK and
LCA numbers provide conflicting descriptions that demonstrate a latent
ambiguity. Under established rules of construction, “the construction put
upon a deed by the parties, as shown by their possession, is entitled to
consideration in a case of latent ambiguity or of conflict between two
descriptions and [] a deed should be construed most favorably to the
grantee.” Ahmi v. Waller, 15 Haw. 497, 499 (Terr. 1904). Stated
differently, “if an ambiguity exists, the situation of the parties to the
deed should be considered in determining their intention, and the intent so
determined should be given effect if practicable.” State v. Hawaiian
Dredging Co., 48 Haw. 152, 178, 397 P.2d 593, 608 (1964). See also Lovejoy
v. Lovett, 124 Mass. 270, 270 (Mass. 1878) (cited in 15 Haw. at 499) (“Parol
evidence of the practical construction given to a deed by the subsequent acts
of the parties thereto is admissible, when the language thereof, in the
description of the land conveyed, is doubtful”).
Based on record evidence of a survey map and the above-mentioned deeds,
LCA number 8098 refers to a parcel adjacent to the subject property that
Richard Smart also owned. Following established rules of construction, if
the TMK used to convey the Property is correct, the description taken as a
whole shows an intent to convey the subject property, such that the deeds
would be construed as valid.
33
Property. Moreover, McDougall died intestate in 1935 and the
Property did not appear in the “Inventory of the First and Final
Account of the Estate of McDougall,” nor does it appear that
McDougall conveyed his interest in the Property. Therefore, if
the Property was in McDougall’s estate when he died, Defendants
have paper title to half of the Property as descendants of
McDougall.16
The issues in this case are purely issues of law, which we
resolve as follows: (1) we hold as a matter of law that title
to the subject property descended in accordance with the law in
effect at the time of David’s death in 1903 to David’s heirs;
(2) we further hold that Defendants and KLL are cotenants,
having received undivided fractional interests through mesne
conveyances stemming from David as a common grantor.
Accordingly, the ICA erred in finding that there was a genuine
issue of material fact with respect to the existence of a
cotenancy.
D. KLL’s Adverse Possession Claim Fails Against Its
Cotenants
“In an action to quiet title, the burden is on the
plaintiff to prove title in and to the land in dispute, and,
16
As of 1935, the time of McDougall’s death, real property still
vested on the death of the owner in his heirs or devisees, without a court
order. According to In re Kekuewa, even as of 1946, real property
“ordinarily constitutes no part of the assets of [a probate] administration.”
37 Haw. at 397.
34
absent such proof, it is unnecessary for the defendant to make
any showing.” Maui Land & Pineapple Co. v. Infiesto, 76 Hawaiʻi
402, 407, 879 P.2d 507, 512 (1994) (citing State v. Zimring, 58
Haw. 106, 110, 566 P.2d 725, 729 (1977)). “The plaintiff has
the burden to prove either that he has paper title to the
property or that he holds title by adverse possession.” 76
Hawaiʻi at 408, 879 P.2d at 513 (citations omitted). “While it
is not necessary for the plaintiff to have perfect title to
establish a prima facie case, he must at least prove that he has
a substantial interest in the property and that his title is
superior to that of the defendants.” Id.
KLL seeks to quiet title on the Property on the basis of
adverse possession. Hawai‘i Revised Statutes (HRS) § 669-1(b)
(1993) states in relevant part:
Action for the purpose of establishing title to a parcel of
real property of greater than five acres may be brought by
any person who had been in adverse possession of the real
property for not less than twenty years prior to November
7, 1978, or for not less than earlier applicable time
periods of adverse possession. For purposes of this
section, any person claiming title by adverse possession
shall show that such person acted in good faith. Good
faith means that, under all the facts and circumstances, a
reasonable person would believe that the person has an
interest in title to the lands in question and such belief
is based on inheritance, a written instrument of
conveyance, or the judgment of a court of competent
jurisdiction.
“Between 1898 and 1973, the statutory period for
establishing title to real property by adverse possession was
ten years.” Wailuku Agribusiness, 114 Hawai‘i at 33 n.19, 155
35
P.3d 1125, 1134 n.19 (citations omitted). KLL received its
interest in the Property in 2004. This court has held, “[W]here
there is such a privity of estate or title as that the several
possessions can be referred to the original entry, they may be
joined and are regarded as a continuous possession[.]” Kainea
v. Kreuger, 31 Haw. 108, 108 (Terr. 1929). Title to Miliama’s
interest in the Property descends straight and unbroken to KLL
from the Joseph Iseke to Richard Smart conveyance in 1961.
Thus, to establish adverse possession, KLL must prove that its
predecessors in interest met the elements of adverse possession
for either a ten year period between 1961 to 1973 or for a
twenty year period prior to 1978.17
“In order to establish title to real property by adverse
possession, a claimant must bear the burden of proving by clear
and positive proof each element of actual, open, notorious,
hostile, continuous, and exclusive possession for the statutory
period.” Wailuku Agribusiness, 114 Hawai‘i at 33, 155 P.3d at
1134 (internal quotation marks, citations, and brackets
omitted). KLL asserts that it “provided uncontroverted evidence
that it has been in actual, open, notorious, continuous,
17
We note that in 1978, the period of adverse possession was
extended from ten to twenty years and additional restrictions were placed on
claims to five acres or more. See Haw. Const. art. XVI, § 12; HRS § 657-31.5
(1993).
36
exclusive, and hostile use and possession of the Property and
has paid the property taxes thereon since 1961.”
“Actual, open, and notorious possession is established
where a claimant shows use of the land to such an extent and in
such a manner as to put the world on notice by means so
notorious as to attract the attention of every adverse
claimant.” Wailuku Agribusiness, 114 Hawai‘i at 33, 155 P.3d at
1134 (internal quotation marks, brackets, and citations
omitted). “Continuity and exclusivity of possession require
that the adverse possessor’s use of a disputed area . . . rise
to that level which would characterize an average owner’s use of
similar property.” 114 Hawai‘i at 34, 155 P.3d at 1134-35
(internal quotation marks and citations omitted). Based on the
declarations from Hewitt, Kawamoto, Holt, Richards, and Metzler,
KLL met its burden of proving that its predecessors had actual,
open, notorious, continuous, and exclusive possession of the
Property since 1961; however, KLL has not met its burden of
proving “hostile possession.”
This court has held, “where a cotenancy exists there is a
special burden in proving hostile possession that requires the
cotenants making a claim of adverse possession to show that they
had acted in good faith in relation to their cotenants.”
Wailuku Agribusiness, 114 Hawai‘i at 34, 155 P.3d at 1135
(internal quotation marks and citations omitted). “In most
37
circumstances, this requirement of good faith will in turn
mandate that the tenant claiming adversely must actually notify
his cotenants that he is claiming against them.” City & Cnty.
of Honolulu v. Bennett, 57 Haw. 195, 209, 552 P.2d 1380, 1390
(1976). This court has held, however, that good faith is
satisfied by less than actual notice in the following
exceptional circumstances:
where the tenant in possession has no reason to suspect
that a cotenancy exists; or where the tenant in possession
makes a good faith, reasonable effort to notify the
cotenants but is unable to locate them; or where the
tenants out of possession already have actual knowledge
that the tenant in possession is claiming adversely to
their interests.
Id. This court further held, “[i]n these limited circumstances,
the notice requirement will be satisfied by constructive notice
and ‘open and notorious possession[.]’” 57 Haw. at 209-10, 552
P.2d at 1390.
In this case, KLL’s predecessors, namely Richard Smart, had
reason to suspect that a cotenancy existed as of 1961. The deed
from Joseph Iseke to Richard Smart contains the first mention of
“a 1/3 undivided interest.” It therefore appears that Joseph
Iseke knew that he may have received only a fractional undivided
interest from Sam.18 Thus, Richard Smart could not, in good
18
It is unclear where the concept of a 1/3 interest originated as
the four heirs would have each received a 1/4 undivided interest through
intestate succession. Arguably, Joseph Iseke may have become aware that his
interest in the Property was a fractional undivided interest after viewing
the other recorded deeds.
38
faith, provide the cotenants with less than actual notice, which
KLL has admitted it is unable to prove. See Wailuku
Agribusiness, 114 Hawaiʻi at 34, 155 P.3d at 1135 (“[A] finding
of bad faith may be inferred from evidence that the cotenant in
possession ought to have known that there existed a cotenancy.”
(internal quotation marks, citations, and brackets omitted)).
In addition, the other “exceptional circumstances” are also
inapplicable to this case.
KLL’s alternative claim of paper title is therefore the
only basis on which it can claim an interest in the Property.
KLL has not shown that its title to the Property is superior to
that of Defendants and has therefore failed to establish that it
is entitled to judgment. Accordingly, the circuit court erred
in granting summary judgment in KLL’s favor.
E. The Case Must Be Remanded for a Determination of
Pahukula’s Interest
Based on our holding that title descended to David’s heirs,
David’s brother Pahukula received a 1/4 undivided interest in
the Property. Pahukula died intestate without conveying his
interest in the Property, and without a probate proceeding over
his estate or a judicial determination of his heirs. The only
record evidence of Pahukula’s heirs is a deed conveying an
unrelated Maui property to his son in 1910. Pahukula’s heirs or
successors in interest were named in KLL’s Complaint and
39
publication summons, but did not appear in the case. We
therefore remand this case to the circuit court with
instructions for a determination of Pahukula’s interest in the
Property.
In this regard, we note two additional issues that may
become relevant on remand. First, KLL asserts that, as owner of
the surrounding lands, Pahukula’s interest escheats to KLL.
Under Hawai‘i law prior to 1977, the interest of an owner of a
kuleana who died intestate or partially intestate without any
takers escheated to the ahupua‘a or ili owner. In re Kekuewa, 37
Haw. at 395; HRS § 532-15 (1968) (repealed 1987). KLL’s
assertion regarding Pahukula is without merit, as the record
reflects that Pahukula had a son to whom he conveyed property on
Maui. This pre-1977 law, however, could become relevant if
Pahukula’s heirs died intestate without any takers and the law
was still in effect at that point in time.
In 1977, this law was superseded by the Uniform Probate
Code, which provided for escheat to the State. HRS § 2-105
(1985) (“If there is no taker under the provisions of this
Article, the intestate estate passes to the State.”). In 1987,
the provision was further amended to provide for escheat to the
State of Hawaii, Department of Land and Natural Resources to
hold in trust for the Office of Hawaiian Affairs (OHA). 1987
Haw. Sess. Laws Act 307, § 1 at 961-62; HRS § 560:2-105.5
40
(2006).19 In this case, OHA was named as a defendant pursuant to
HRS § 669-2(e) (1993), which provides in relevant part that in
any action to quiet title under HRS § 669-1, OHA shall be joined
as a defendant when:
(1) The land claimed by the plaintiff is kuleana land; and
(2) The plaintiff has reason to believe that an owner of an
inheritable interest in the kuleana land died intestate or
died partially intestate and there is or was no taker under
article II of the Hawaii uniform probate code.
For purposes of [subsection e], “kuleana land” means
that land granted to native tenants pursuant to L 1850, p.
202, entitled “An Act Confirming Certain Resolutions of the
King and Privy Council, Passed on the 21st Day of December,
A.D. 1849, Granting to the Common People Allodial Titles
for Their Own Lands and House Lots, and Certain Other
Privileges”, as originally enacted and as amended.
KLL argued before the circuit court that OHA does not have
an interest in the Property because its interest “would arise
only if an owner of an inheritable interest in the Property died
intestate or partially intestate and there were no takers of
19
HRS § 560:2-105.5 provides:
Any provision of law to the contrary notwithstanding, if
the owner of an inheritable interest in kuleana land dies
intestate, or dies partially intestate and that partial
intestacy includes the decedent’s interest in the kuleana
land, and if there is no taker under article II, such
inheritable interest shall pass to the department of land
and natural resources to be held in trust until [OHA]
develops a land management plan for the use and management
of such kuleana properties, and such plan is approved by
the department of land and natural resources. Upon
approval, the department of land and natural resources
shall transfer such kuleana properties to [OHA]. For the
purposes of this section, “kuleana lands” means those lands
granted to native tenants pursuant to L. 1850, p. 202,
entitled “An Act Confirming Certain Resolutions of the King
and Privy Council Passed on the 21st Day of December, A.D.
1849, Granting to the Common People Allodial Titles for
Their Own Lands and House Lots, and Certain Other
Privileges”, as originally enacted and as amended.
41
such inheritable interest[.]” Therefore, on remand, the circuit
court must determine whether there were any takers of Pahukula’s
interest, and if none, whether escheat applies and to whom
Pahukula’s interest would escheat.20
Accordingly, we remand this case to the circuit court for a
determination of Pahukula’s interest in the Property.
V. Conclusion
Accordingly, we vacate the ICA’s January 9, 2014 Judgment
on Appeal and the circuit court’s March 25, 2010 Final Judgment,
20
In addition, we note that in quieting title, there may be an
issue as to whether Pahukula’s interest in the Property was advanced to him
pursuant to RLH § 2116 (1898), which provides as follows:
If any child of an intestate shall have been advanced by
him by settlement or portion of real or personal estate, or
of both of them, the value thereof shall be reckoned, for
the purposes of this section only, as part of the real and
personal estate of such intestate, descendible to his heirs
and to be distributed to his next of kin according to law.
And if such advancement be equal or superior to the amount
or share which such child would be entitled to receive of
the real and personal estate of the deceased as above
reckoned, then such child and his descendants shall be
excluded from any share in the real and personal estate of
the intestate.
Due to the fact that (1) Pahukula’s recorded conveyance to his son conveys
his “undivided interest in the estate of [his] father/uncle Kahoiwai[,]” and
specifically mentions his undivided interest in the Maui property; (2) David
received the Property by deed from his father Kahoiwai; and (3) Pahukula did
not convey an interest in the Property while the other three heirs did, there
may be a question as to whether Pahukula was advanced his interest in the
Property. In that case, Defendants would share a 2/3 interest, while KLL
would have a 1/3 interest in the Property.
42
and remand this case to the circuit court for further
proceedings consistent with this opinion.
Steven S.C. Lim and /s/ Mark E. Recktenwald
Arsima A Muller
for petitioner /s/ Paula A. Nakayama
Camille K. Kalama and /s/ Sabrina S. McKenna
David K. Kopper
for respondents /s/ Richard W. Pollack
/s/ Richard K. Perkins
43