One Kalakaua condos
ordered to arbitration

The court order will resolve disputes
over financial and management affairs

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By Debra Barayuga
dbarayuga@starbulletin.com

A Circuit Court judge has ordered the owners of an upscale condominium for senior citizens and its condo association into binding arbitration to resolve a dispute over its financial and management affairs.

Condo owners Alice Clay and Lila Chrystal at One Kalakaua, which offers skilled nursing and assisted-living services, had sued the association in April, alleging that it was running an assisted-living facility without a state license.

One of the main issues is the way the association picked Sound Health for a $10,500-a-month job to help One Kalakaua obtain the license required by the state Department of Health.

Other homeowners had joined a breach-of-contract lawsuit filed earlier this month by former managing agent Hawaii First Inc. and its President Richard Emery, asking that the court appoint a special master to take over.

Hawaii First Inc., hired in December by a vote of more than 94 percent of members and condo owners, had uncovered alleged irregularities in the association's financial records and management but was terminated earlier this month.

Yesterday, Lyle Hosoda, counsel for Hawaii First and Emery, said they are considering withdrawing their lawsuit because the judge's order for binding arbitration addresses what they had sought. Their suit had asked for a neutral third party to review the association's finances and accounting to protect the interests of the homeowners.

"Our concern was to move this matter along expeditiously," Hosoda said.

Emery and Hawaii First, which manages more than 50 other condo associations and 70 properties, no longer want the One Kalakaua contract and have turned over the association's documents to another managing agent, Chaney Brooks, Hosoda said.

If Hawaii First withdraws from the lawsuit, which could come as soon as the end of the week, the suit filed by Clay and Chrystal can proceed to arbitration.

George Van Buren, attorney for the association, said it has no objection to the homeowners' case proceeding to binding arbitration.

James Hochberg, who represents Clay and Chrystal, said the sooner arbitration starts the better.