Winter / Spring 2015

LEGAL
A

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Property Rights, Eminent Domain,

and the Honolulu Rail Project

awaiis Constitution requires just compensation and monetary damages be paid if private
property is taken for a public use such as the 20-mile, 21-station Honolulu rail project.
Landowners along the rail route have substantial legal rights that must be respected by the
Honolulu Authority for Rapid Transportation, which is already acquiring privately-owned property
it needs for the rail corridor from Kapolei to Ala Moana.
In other words, its begun.
In the first step of the process to acquire the needed
land, HART will attempt to purchase property and other
rights through negotiation with owners. But if an agreement on the compensation and damages owed cannot
be reached, HART has the authority to force immediate
surrender of the property by filing an eminent domain
lawsuitalso referred to as condemnation against
the owner, which paves the way for a jury or a judge to determine the propertys value.
In response to the many questions weve received from
property owners, businesses, and homeowners whose
rights may be at stake in the rail takings, in mid-February,
the firms Eminent Domain Practice Group organized a
public forum to provide information about the project,
Hawaiis eminent domain process, and how to protect the
rights of people whose property or businesses are subject
to acquisition. Damon Key lawyers Mark M. Murakami
and Robert H. Thomas led the meeting.

Continued on page 2

Inside
this
Issue:

International Investment
Strategies Recap

Congratulations,
Matt!

If City Doesnt Fund

Improvements, Should You
and Your Neighbors?

Movie Review: The Big Eyes

Have It Hawaii Courts In
The Hollywood Spotlight

Continued from cover

Held at Farrington High School cafeteria, the town hall style forum ran for just over an hour, and in addition to
an overview of Hawaiis eminent domain laws and the protections available for landowners whose property is being
forcibly acquired, topics covered at the meeting included:
Can I prevent HART from taking my property?
What rights do I have if HART wants to enter my property to survey
and drill for soil testing?
The valuation process: how is just compensation and damages
calculated by the courts? HARTs offer does not adequately
compensate me do I have to wait for HART to sue?
What are my rights as a landlord, a tenant, or a business owner
whose property is taken by HART?
I have a mortgage on my property. Does the lender have any claim?
What are my rights if HART takes less than 100% of my parcel?
What does the law require if my home or my business must be
relocated as a result of the project?
Jim Hallstrom, a Honolulu appraiser experienced in
appraising property in these sort of cases also attended
and informed the audience about the differences
between an appraisal of property for eminent domain,
and other appraisals (such as for property tax assessments).
Mark appeared on both KHON2 and Hawaii News
Now, to talk about property rights and the rail project,
and was interviewed by KITV about the meeting.
Damon Key currently represents several landowners
whose property is targeted by HART for the rail. We
have also represented property owners in eminent
domain and similar matters for many years. Mark was
Best Lawyers in Americas Best Lawyer of the Year in
Eminent Domain and Condemnation Law for Honolulu
in 2013, and Robert shared this designation in 2014.
Kenneth R. Kupchak, Mark, and Robert are listed in

Honolulu Magazines Best Lawyers in Hawaii and

in Hawaii Super Lawyers in Eminent Domain and
Condemnation Law.
The March 20, 2015 edition of Pacific Business
News included a feature story on Damon Keys
eminent domain law practice, and an interview with
Robert about the Honolulu rail project. The interview
is available on-line here: http://www.bizjournals.com/
pacific/print-edition/2015/03/20/robert-thomas-oneminent-domain.html.
We know there can be serious misconceptions when
it comes to how eminent domain law works in Hawaii.
It is important that businesses and residents with
property targeted for acquisition by HART understand
their rights under the law and the Constitution, and
how to protect them.

We know there can be serious

misconceptions when it comes
to how eminent domain law
works in Hawaii.

For more information about the Honolulu rail project (including answers to frequently asked questions)
and property owners rights in eminent domain law, please visit www.hawaiilawyer.com/rail.

Damon Key Leong Kupchak Hastert

Te l e p h o n e ( 8 0 8 ) 5 3 1 - 8 0 3 1

1003 Bishop Street

Facsimile (808) 533-2242

Suite 1600

Honolulu, Hawaii 96813

We b s i t e w w w. h a w a i i l a w y e r. c o m

Congratulations, Matt!
Matthew T. Evans Named Director

ince joining Damon Key seven years ago, Matthew T. Evans has not failed to
impress his colleagues, members of the legal community and, most importantly,
our clients. Highly intelligent and equally enthusiastic, Matt has been busy advising
clients on a wide variety of legal matters while practicing in the firms Real Estate and
Construction, Business and Commercial, Dispute Resolution, and Creditors Rights
practice groups. He has zealously represented his clients interests at all levels of
state and federal courts in Hawaii and beyond. With this solid foundation, Damon Key
is proud to make Matt the newest Director of our firm.
Matt arrived at Damon Key directly out of law school
and quickly found immense satisfaction in helping clients
solve their problems. When a client has a need or is
facing an obstacle, I see it as my job to assume the
problem entirely, as if it were my own, says Matt.
Finding a resolution is always important, and oftentimes
its just as important to offer our clients peace of mind.
Attacking issues head-on is not
a new approach for Matt, who from
an early age showed he was not
prone to shy away from a challenge.
When he was about eight years
old, he desperately wanted a dog,
but his Grandmother, with whom
he lived, was reluctant to give her
permission. So, Matt did what any
eight-year-old kid would do: he drafted a proposed
contract as a way to facilitate the negotiation of terms
(4 pages long and handwritten). It was an early indication
of the Type-A personality that makes Matt the effective
lawyer he is today.
To date, Matts client work has included commercial
disputes, real estate transactions, construction law, land
use issues, and collection matters, among other things.
Along the way, several things have surprised him, one
being that disputes arent always about dollars and cents.
Ive found that not all business disputes are grounded
in disagreements over money alone, says Matt.
Sometimes, there is deep history underlying a dispute
maybe a personal matter or lack of trust between the
parties and finding an appropriate resolution might go
well beyond merely considering the bottom line.

Damon Key Leong Kupchak Hastert

Te l e p h o n e ( 8 0 8 ) 5 3 1 - 8 0 3 1

A quick study and strong communicator, Matts

goal is to listen more than he speaks at least at first.
Key to his success is his ability to rapidly learn about
clients businesses and assimilate information among
a wide range of industries. In Matts view, the best
way to do this is to listen carefully to what his clients
have to say. He also values clear and well-developed
communications, whether in a 30-page court filing or
a two-sentence email.
Matt, a local boy originally from Kaneohe, earned
his law degree, magna cum laude, from the University
of Hawaii William S. Richardson School of Law. While
there, he received numerous awards and served as an
editor of the University of Hawaii Law Review. Matt also
obtained his bachelors degree from the University of
Hawaii at Manoa where he majored in Communication
and minored in Music. He attended high school at
Hawaii Baptist Academy and currently sits on the
board of directors for the schools alumni association.
Currently, Matt is active in the American Bar
Association as Co-Chair of a Young Lawyers Committee.
He also serves as Damon Keys Young Lawyer Liaison
in Meritas, a prestigious global alliance of independent,
full-service law firms.
As for the future, Matt plans to continue growing his
practice, sharpening his skills in order to provide the
firms clients with the highest level of legal services
possible, and becoming a contributing member of his
community.
Congratulations, Matt! May the satisfaction you find
in your work continue to propel you.

1003 Bishop Street

Facsimile (808) 533-2242

Suite 1600

Honolulu, Hawaii 96813

We b s i t e w w w. h a w a i i l a w y e r. c o m

Integrity, Innovation and Effective Teamwork

Diane D. Hastert

Best Lawyers in America:

Commercial Litigation

James C. McWhinnie

Best Lawyers in America:

Commercial Litigation, Personal
Injury, Litigation Defendants
Super Lawyers: Business Litigation,
Civil Litigation Defense, Construction
Litigation

Douglas C. Smith

Lawyer of the Year 2015

Litigation Trusts & Estates
Lawyer of the Year 2013
Trusts & Estates
Best Lawyers in America: Trusts & Estates,
Litigation Trusts & Estates
Super Lawyers: Estate Planning
& Probate, Tax

Christine A. Kubota

Best Lawyers in America:

Corporate Law
Lawyer of the Year 2013
Corporate Law

David P. McCauley

Super Lawyers: Immigration

Gregory W. Kugle

Best Lawyers in America:

Land Use & Zoning Law, Construction
Law, Real Estate Law
Lawyer of the Year 2013
Land Use & Zoning Law
Super Lawyers: General Litigation

Mark M. Murakami

Best Lawyers in America: Eminent

Domain and Condemnation Law,
Land Use & Zoning Law
Lawyer of the Year 2013
Eminent Domain and Condemnation Law
Super Lawyers: Business Litigation, Land
Use/Zoning, Transportation/Maritime

Robert H. Thomas

Best Lawyers in America:

Eminent Domain and Condemnation Law,
Land Use & Zoning Law
Lawyer of the Year 2014
Eminent Domain and Condemnation Law
Super Lawyers: Appellate, State, Local &
Municipal, Land Use/Zoning

e congratulate our colleagues for being recognized as

Lawyers of the Year, Best Lawyers and Super Lawyers in
their respective practice areas. We applaud their unwavering
commitment to clients and excellence in professionalism.

Michael A. Yoshida

Kenneth R. Kupchak

Lawyer of the Year 2015

Litigation Land Use & Zoning
Best Lawyers in America: Corporate Law,
Construction Law, Litigation Construction,
Eminent Domain & Condemnation Law,
Litigation Land Use & Zoning
Super Lawyers: Construction Litigation, Business
Litigation, Eminent Domain

Super Lawyers:
Creditor Debtor Rights: Business,
Real Estate: Business, Construction
Litigation: Business

Anna H. Oshiro

Best Lawyers in America:

Construction Law
Super Lawyers: Construction
Litigation, Alternative Dispute
Resolution

Matthew T. Evans

Super Lawyers Rising Stars

Business Litigation, Construction
Litigation: Business,
Land Use/Zoning

International Investment Strategies Recap

amon Key offers full legal services to our clients. Various practice areas work as a team to provide our clients with
full support and coverage as their needs may require. We offer team presentations to clients, companies and
non-profit organizations and have done seminars in commercial transactions, real estate, estate planning, taxation,
human resources, land use and construction matters.
We recently presented a seminar LOOK WAY AHEAD International Investment Strategies for Your International
Clients to the real estate broker members of the Hawaii International Real Estate Council (HIREC).
A three lawyer team covered what foreign investor clients need to know before they invest, including issues regarding
corporate/formation, immigration, tax and estate planning. Each lawyer summarized topics that would be of interest to
the international investor clients of the brokers.
Sara Coes presentation covered what foreign investors need to know about buying real property in Hawaii:
Planning and education before a real property purchase can save money and headaches for any purchaser,
especially non-US purchasers. Non-US purchasers may need detailed explanations with respect to the Purchase
Contract/Purchase and Sale Agreement, title issues, seller disclosures, land use restrictions, building permits,
HOA/AOAO rules, the closing process, and the tax and reporting requirements of owning real property in Hawaii,
as these may differ greatly from the purchasers home country.
There is no one best way for a non-US purchaser to hold real property. Depending on what the purchaser is
buying, who the purchaser is, the purchasers objectives in purchasing the real property, and the purchasers other
goals and concerns, different ownership structures may best address the purchasers needs. Common ownership
structures include ownership through a revocable trust, a foreign corporation or a local corporation or LLC.
Caron Ikedas presentation detailed what foreign investors need to know about estate planning and US
estate tax issues, in particular:
Planning for a real property purchase can also help to eliminate estate issues on a purchasers death. One of the
biggest surprises to nonresident non-US citizen (NRNC) purchasers is federal and Hawaii estate taxes. Instead of
the $5 million exemption amount for US citizens and US and Hawaii residents (adjusted annually for inflation; $5.43
million in 2015), NRNCs are only entitled to exempt $60,000 of US/Hawaii situs assets from estate tax at death. At
the seminar we discussed how options including a tax treaty, trust or gifting program may be used to reduce this
tax liability.
Non-US purchasers are also surprised by the probate process in Hawaii. Probate is the court-supervised process
for administering an estate and is required when a purchaser dies holding title to real property in his or her individual
name. Disadvantages of probating an estate include cost, the delay in distributions to heirs, and the inability to control
who assets go to and how on death. At the seminar we discussed how probate can be avoided by, for example,
establishing a revocable trust, recording a Transfer on Death Deed, or holding title to property jointly with others.
Christine Kubota wrapped up the presentation by highlighting and further discussing issues regarding the
following:

Purchase and Sale Agreement what foreign investors should know and understand
Escrow Process
Investment and how it relates to your immigration status
What happens at death
Special tax issues for foreign investors.

There are numerous US regulations that deal specifically with foreigners and foreign
investment. Sharing the basics with those who work with incoming investors will help
the economic process as well as avoid litigation and other issues down the road.
Christine practices in Corporate, Commercial, and Real Estate Law, primarily with Japanesespeaking clients. Sara practices in Business and Commercial Law, and Real Estate Law.
She is fluent in Mandarin Chinese. Caron practices in Estate Planning and Tax Law.
To find out more information, call 531-8031 or email Christine at cak@hawaiilawyer.com,
Sara at sec@hawaiilawyer.com and Caron at cni@hawaiilawyer.com.
Damon Key Leong Kupchak Hastert
Te l e p h o n e ( 8 0 8 ) 5 3 1 - 8 0 3 1

1003 Bishop Street

Facsimile (808) 533-2242

Suite 1600

Honolulu, Hawaii 96813

We b s i t e w w w. h a w a i i l a w y e r. c o m

If City Doesnt Fund Improvements,

Should You and Your Neighbors?

f late, residents in Kailua have bemoaned the state of public facilities to cope with an
increasing tourist population. Public facilities created haphazardly over the last century
can easily be overwhelmed with the increased traffic stemming from the ease of information
about those facilities. If you build it, they will come gives way to if you put it on yelp,
brace for impact.
The City and County of Honolulu plainly have the
power to build roads, improve facilities, repair bathrooms, and manage traffic, but if it does not do so,
we wondered if property owners and business owners
have the ability to act.
Turns out, they do.
Under the Revised Ordinances of Honolulu, residents
can petition the City for the creation of a Community
Facility District. A slightly different entity called a Special
Improvement District can be created for improvement
of community infrastructure to improve the business
environment.
Under Chapter 34, a Community Facility District can
be created at the request of the Mayor, the action of
the City Council or by petition. It may be established to
finance the acquisition, planning, design, construction,
installation, improvement, or rehabilitation of any real
property or structure. Such improvements can be
streets, roads, bikeways, public parking facilities, park
or recreation facilities, cultural facilities, undergrounding
utilities, etc. A nonprofit corporation is established,
bond financing is available and the District has the

By Mark M. Murakami

power to assess properties in the district to pay for

such improvements.
Under Chapter 36, a Special Improvement District
can be created to provide financing and administration
for improvements like: services to enhance the security
of persons and property within the district; landscaping
services; enhanced sanitation services; services
promoting and advertising activities within the district;
marketing education for businesses within the district;
and decorations and lighting for seasonal and holiday
purposes.
These districts are valid creations of the municipal
government. See Von Damm v. Conkling, 23 Haw. 487
(1916) (City and County of Honolulus improvement
districts do not violate 5th Amendment).
We arent sure whether it was Thomas Jefferson
or Lyndon Johnson, but government is best which is
closest to the people. While Honolulu Hale is not that
far from Kailua, these districts provide a way for a
community to improve the public facilities in their own
neighborhood.

For more information on this article, please call Mark at 531-8031 ext 628
email him at mmm@hawaiilawyer.com or scan the code with your smartphone.

Damon Key Leong Kupchak Hastert

Te l e p h o n e ( 8 0 8 ) 5 3 1 - 8 0 3 1

1003 Bishop Street

Facsimile (808) 533-2242

Suite 1600

Honolulu, Hawaii 96813

We b s i t e w w w. h a w a i i l a w y e r. c o m

Movie
Review:
By Robert H. Thomas

The Big Eyes Have It Hawaii

Courts In The Hollywood Spotlight

nyone who was around in the 1960s and 1970s remembers those paintings and
prints of sad children with oversize eyes. They were ubiquitous. But they gave
my young eyes dissonance. To me, art was whatever the adults said it was, and
by any measure these paintings must have qualified, because they were everywhere,
and popularity equated to artistic quality, right? But at the same time, they were
kitschy, and not in the same way as my favorite kitsch, Dogs Playing Poker and
Velvet Elvis.
The weird-but-true backstory behind the big-eyed
paintings has recently hit the big screen, Tim Burtons
Big Eyes with Amy Adams as long-time Hawaii resident,
painter Margaret Keane, and Christoph Waltz as her
Svengali, husband Walter Keane.
Hawaii lawyers have always known the backstory due
to a spectacularly kitschy Honolulu trial in the mid-1980s,
the result of Margaret suing her by-then ex-husband
Walter and USA Today for defamation for his claim that
he, not Margaret, was the artist. During the rise of their
empire, Walter had taken sole credit, although she had
announced publicly in 1970 that she was the painter.
Big Eyes tells the story of a struggling single mother
with a passion for painting whose talents are slowly
co-opted by Walter. Before she knows it, he is opening
galleries, hobnobbing with celebrities, and being celebrated for his work, while she labors away in a locked
studio. Despite the money rolling in, she finally cant
take it anymore, divorces Walter, and flees for Hawaii.
U.S. District Judge Sam King presided over the
defamation trial, which makes up the final act of Big
Eyes. People Magazine covered the case, not the ABA
Journal. It was that kind of trial: the court held a paint
off in which Margaret and Walter were challenged to
produce for the jury a big-eyed painting in an hour;

Walter represented
himself, and more
than a few times
got Judge King hot under the collar, enough so that
the judge refused Walters request for a continuance
when he lost his lawyers right before trial, and (according
to the Ninth Circuit) lost patience with him and made
numerous prejudicial statements. In Keane v. Keane,
893 F.2d 1338 (9th Cir. 1990), the U.S. Court of Appeals
for the Ninth Circuit upheld the jurys finding of liability,
but reversed Margarets $4 million award for lack of
proof of that level of damages, thus ending the legal
tale.
There have been claims that Big Eyes is not an accurate portrayal of the Keane drama. It certainly comes
nowhere near to an accurate portrayal of how a trial
is conducted (in the vein of Anatomy of a Murder, for
example). But no matter: we shouldnt expect movies -even movies based on real history -- to be scrupulously
accurate, and Big Eyes gets its point across, and conveys
the sometimes surreal absurdity of the situation in a
highly enjoyable manner, even if it leaves unanswered the
biggest question about who got credit for the big-eyed
children phenomenon.
As a neighboring gallery owner puts it in the film, who
would want to?

Along with the Honolulu Museum of Arts Doris Duke Theater, the firm sponsors
a law film festival, Lets Film All The Lawyers. We are currently in the planning
stages for this years event. Contact Robert at 531-8031, or email him at
rht@hawaiilawyer.com with your suggestions for films to include in the festival.

Damon Key Leong Kupchak Hastert

Te l e p h o n e ( 8 0 8 ) 5 3 1 - 8 0 3 1

1003 Bishop Street

Facsimile (808) 533-2242

Suite 1600

Honolulu, Hawaii 96813

We b s i t e w w w. h a w a i i l a w y e r. c o m

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A D V E R T I S I N G

M A T E R I A L

Legal Alert is published periodically by Damon Key Leong Kupchak Hastert to inform clients of legal matters of general interest. It is not intended to provide legal advice or opinion.

Attorneys in the News

Christine A. Kubota, is one of three tri-chairs of the Aloha Golden Moment

Advisory Board. Christine was invited to assist Kristi Yamaguchi and her
non-profit organization Always Dream Foundation to raise funds to inspire
children to reach their dreams by providing innovative reading programs to
underserved schools and advancing the cause of early childhood literacy.

Carole Hayashino from the Japanese

Cultural Center, Christine Kubota,
Dusty Baker, Kristi Yamaguchi, and
her sister Lori Yamaguchi

Kristi will be bringing to the Blaisdell Center the Golden Moment Figure Skating
Show on November 21-22, 2015. This is more than just another figure skating
show; throughout the show her message about the importance of reading
will be creatively woven into the show format. Kristis Foundation has been
servicing schools in Hawaii since the fall of 2014 and the net proceeds from
this show will stay local to help serve more Hawaii students.
Christopher J.I. Leong, was elected as the 2015 Vice Chair for the Hawaii
State Bar Association Appellate Section.

Chris is 3rd from the left

pictured with the 2015 board

The March 20, 2015 edition of Pacific Business News included a feature story
on Damon Keys eminent domain law practice, and an interview with Robert H.
Thomas about the Honolulu rail project. The interview is available on-line here:
http://www.bizjournals.com/pacific/print-edition/2015/03/20/robert-thomas-oneminent-domain.html