Surf-museum case settlement a step closer

A man who opened then closed a surfing museum and art gallery claimed that promises were allegedly made to him, but not kept, by owners of the mall in which the museum opened. Attorneys for both sides indicated yesterday that an oral agreement has been reached that could end the court actions filed in the aftermath.

Lee C. Williams opened the International Surfing Hall of Fame and the He’e Nalu Surfing Arts Museum in June 2004 at the Anchor Cove Shopping Center in Nawiliwili.

Six months later, he was evicted.

Representatives of Aina Hou Development Corp., Anchor Cove’s owner, took Williams to court, saying he owes $40,645.39 in rent.

Williams filed a countersuit, claiming that he signed a lease after being led to believe promises that were allegedly made by Richard Jasper, Aina Hou’s president.

Williams also claimed that after he moved into his Anchor Cove space, he learned that Aina Hou leaders “wrongfully appropriated and registered” the domain name with the state Department of Commerce and Consumer Affairs.

Williams is seeking a court order to rescind the lease, a court order to revoke Aina Hou’s leaders’ registration of, and special, general, punitive and treble damages to be determined at a jury trial.

Williams’ attorney, Mark Zenger, pointed out on Tuesday that the two sides are in the process of documenting a global settlement.

“That should bring the case to a close,” said Zenger.

Aina Hou attorney David Proudfoot indicated that there is a “tentative oral agreement to settle the matter.”

According to court records, Williams alleged that Jasper made false representations over the course of an eight-month negotiation period in order to induce him to sign a five-year lease.

In court records, Williams claimed that in 2003 and 2004 he negotiated and secured from the International Surfing Hall of Fame the rights to open an attraction on Kaua’i.

He also negotiated for the exclusive rights to use the trade names of the International Surfing Hall of Fame and the Surfing Hall of Fame.

In early June 2003, according to court records, Williams was shown retail space in Phase II of the shopping center that was then a pool hall.

Williams thought that the space was larger than what he was looking for, and he was unconvinced that the space would be economically suitable for the project, court records indicate.

Williams alleged that during negotiations, Jasper made representations that Aina Hou leaders had conducted recent marketing studies that showed that the commercial cruise ships docking at Nawiliwili Harbor would result in foot traffic of 350,000 visitors going to Anchor Cove in 2004.

Williams alleged that Jasper led him to believe that, if he leased space, Jasper would see to it that four new Aina Hou shuttle buses would bring visitors from the ships and drop them off in front of Williams’ main entrance.

Williams alleged in his countersuit that, during negotiations, Aina Hou leaders said they would make changes to facilitate foot traffic from Anchor Cove’s Phase I to Phase II.

Williams also alleged that he was led to believe that the view of the ocean and of the surf spot known as Kalapaki’s would remain unobstructed from his leased space.

If he leased space at Anchor Cove, Williams alleged that Aina Hou officials said they would put up signs at Anchor Cove to promote the International Surfing Hall of Fame.

If he signed a lease, Williams alleged that Aina Hou leaders would specifically mention the International Surfing Hall of Fame in all Anchor Cove print and broadcast advertising.

Williams alleged in his countersuit that he was led to believe that Aina Hou officials had binding agreements with officials of all of the cruise ships, all the timeshare projects on the island, and all activity desks on the island, to market discount tickets contingent upon his signing a lease.

During negotiations, Williams alleged that he was led to believe that Aina Hou leaders also had binding agreements with two tourbus companies to bring visitors to his front door, contingent upon his signing a lease.

In January 2004, according to court records, Williams signed a fiveyear lease, to begin May 1, 2004, and end April 30, 2009.

When he moved into his Anchor Cove space, Williams said in his countersuit, he spent more than $175,000 to make improvements, bring in equipment, and buy inventory.

After he moved in, Williams alleged that he found out that Aina Hou leaders never conducted the marketing studies, that there were never four new shuttle buses, and that changes were not going to be made in such a way as to facilitate foot traffic between Phase I and II.

He also alleged that he found out that a new building going up would obstruct his view of the ocean and of Kalapaki’s, and he wanted Aina Hou leaders to take corrective action.

Williams alleged in his countersuit that he found out that Aina Hou officials were never going to put up the signs, there were no binding agreements with the cruise lines, the time-shares, or with the activities desks, to market discount tickets.

He alleged that Aina Hou leaders were never going to market the International Surfing Hall of Fame in Anchor Cove advertising, according to court documents.

He alleged that Aina Hou officials did not have binding agreements with the tour-bus companies, and that Aina Hou leaders registered the Web site with state DCCA officials, court documents indicate.

Williams claimed that he was allegedly fraudulently induced into signing a lease, and was forced to vacate in December 2004, court records indicate.

In his counterclaim, Williams alleged that each time he confronted Jasper about the alleged promises, Jasper told him that he had no idea what Williams was talking about, according to court documents.

According to court records, Aina Hou officials claimed that construction on the building that would block the ocean view started before Williams signed the lease, and that it was being built by county officials.

According to court records, Williams was ordered by a judge to produce documents, and to answer interrogatories sent by Aina Hou attorneys, by July 26.

Williams did not provide full and complete responses to the interrogatories, and he provided them six days late, court records show.

Aina Hou attorneys needed the documents and the interrogatories to evaluate Williams’ counterclaim, according to court records.

Court records also show that Williams claimed that he had damages of more than $4.548 million, but he failed to explain how he arrived at that number.

According to court records, Williams provided Aina Hou attorneys with incomplete, illegible and not properly labeled and organized documents.

A loose and disorganized pile of documents was essentially dumped off with an attorney representing Aina Hou, according to court records.

In November, Aina Hou attorneys filed a motion for a court order calling for sanctions against Williams for violating the earlier court order. The sanctions sought included dismissing Williams’ counterclaims.

In court records, Williams wrote that the documents were in several different places, and were in no particular order. He said it took him longer to find the documents than he originally thought it would take.

To assuage concerns by Aina Hou’s attorneys, and to move the case along, Williams wrote that he was willing to make additional documents available.

An Aina Hou attorney wrote in court records that Williams did not fully comply with discovery rules, and that he should not be permitted to produce additional documents at this late date.

A hearing on the sanction motion was held Nov. 22. According to court records, Williams had 30 days to produce bank statements and other financial information to Aina Hou’s attorneys.

The hearing on the sanction motion was continued to Tuesday, Dec. 27.


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