A state judge has dismissed a felony charge against the president of a now-defunct title company which questioned the validity of virtually all land ownership in Hawaii.

Circuit Judge Sandra Simms yesterday dismissed a first-degree attempted theft charge against Donald A. Lewis, co-founder and president of what was known as Perfect Title Co.

Lewis and three others, including Perfect Title co-founder David Keanu Sai, were indicted in December 1997 on attempted theft charges for allegedly trying to illegally gain control of an Aiea couple's home.

Their action was based partly on Perfect Title's property ownership research. The company used 19th-century Hawaiian kingdom law to conclude that existing land titles in Hawaii were invalid.

Michael and Carol Simafrancas -- the other two people indicted for attempted theft -- lost the Aiea home through foreclosure in 1996 but subsequently tried to reclaim ownership, citing Perfect Title's research. In November 1996 they filed a so-called warranty deed for the property that had been issued by Sai, described in Perfect Title documents as the kingdom's regent.

The deed was recorded even though another couple had purchased the home.

In January 1997, the Simafrancas gained access to the home with the help of a locksmith and had the locks changed just as the new owners were returning to the residence, according to court documents.

The four defendants went on trial Nov. 1. After the state rested its case yesterday, Simms granted Lewis' motion for acquittal, citing a lack of evidence.

But the judge declined to dismiss charges against Sai and the Simafrancas. The Simafrancas also face a charge of burglary in the first degree for allegedly entering the residence unlawfully.

The trial is scheduled to resume Monday with the defense presenting its case.

Lewis yesterday said he was happy about the acquittal but lamented that the state's investigation basically put Perfect Title out of business.

"In essence, they destroyed the company," Lewis said.

The other defendants could not be reached for comment, and the deputy attorney general handling the case didn't return a phone call.

Until Perfect Title shut down in September 1997, it had been filing its controversial title reports at the state Bureau of Conveyances. That caused problems by gumming up legitimate ownership records, critics contended.

Despite yesterday's action, Lewis is not free of legal problems stemming from Perfect Title.

He still faces charges of failing to obtain a state license to do business in Hawaii and failing to file a general excise tax return for 1996.

Lewis previously has said Perfect Title didn't obtain a license or file a return because it operated under Hawaiian kingdom laws, which Lewis believes still are in force, not state laws.

Lewis maintains the United States never entered into a treaty with the kingdom to obtain sovereignty over the islands and therefore kingdom laws still apply here -- a claim critics say is hogwash.

Lewis is scheduled to go to trial on the license and tax charges in January.