Lease Dispute with One of Hawaii’s Most Well Known Families May Cause 81-Year-Old Woman to Lose Her Home

BY MALIA ZIMMERMAN – Joan Vannatta has cherished her home in Niu Valley for 56 years.

The plantation style house in the peaceful valley just across from the beach is the place she lived with her life long sweetheart, her husband, John A. “Bonny” Vannatta, where they raised their six kids and had many happy years together.

But now, at age 81, Joan is on the verge of losing her home because of a land lease dispute with one of Hawaii’s most well known families.

Her children say moving their mother on the verge of her 82^nd birthday, when she is in poor health, away from a home and community she’s known and loved for so many decades, could not only sink her spirits, but also put her in physical jeopardy.

They hope to resolve the issue by either buying the land or extending the lease. But her children said the landlords – the Cassidays and the Pfluegers – families that own hundreds of acres of land in Hawaii, seem unwilling to negotiate and have actually filed an action in First Circuit Court to evict their mother from the home she and her husband built.

Kevin Chee, an attorney for the family, represents the Pfluegers and Cassidays in court. During a recent hearing where he attempted to have the court grant Joan’s eviction, he noted it has been a year since the lease expired, and his clients want a “writ of possession and a writ of ejectment.”

The story starts nearly six decades ago, and is one that many Hawaii families can relate to, because it involves a land lease agreement between the Vannattas who owned their home, and the Cassidays and Pfluegers, who own the land.

Back in Hawaii’s territorial days, when the Vannattas selected Lot 21 for their Nui Valley home in 1956, there was no fee simple land for sale in the area and limited fee simple land on the island. Hawaii’s richest families and their trusts would lease land for decades at a set price and then renegotiate the price midway through the lease.

Joan and Bonny lived simply. They met while attending the University of Oregon and married just before Bonny left to serve in the Korean War. He was injured in the War, and after receiving treatment for one year at a rehab hospital in San Francisco, Bonny took Joan to Hawaii, first to Kamuela on the Big Island where Bonny was born and raised, and then on to Oahu.

They had two children, John R and Mark, when they moved into the Niu Valley four-bedroom home, and they had four more children while living in Niu Valley including David, Cindy, Steven and Linda.

Many of their neighbors also had big families, and at one time, there were more than 60 children living on their block.

The Vannattas, like their neighbors, leased their land from the Charlotte Harriet Lucas Cassiday and Mary Lucas Pflueger Trust.

All the Niu Valley kids knew the Pflueger, Cassiday and the Lucas families because besides being large and influential landowners, they built the long pier that stretched out to the coral reef where there was a swimming hole off Niu Beach.

“It was a fun place to grow up,” said Mark Vannatta who currently resides in San Diego with his wife, two daughters and grandchild.

Mary Lucas, the head of the wealthy and influential family at one time, was the Vannattas’ neighbor. Her daughters were Harriet Cassiday and Mary Pflueger.

Joan Vannatta has fond memories of old Mrs. Lucas.  She is also quick to point out the hedge that the family gave her.

“My husband went to work in the morning and when he came home we had a lovely, fully grown hedge planted. He was very surprised. Mrs. (Mary) Pflueger did that for us.  She had taken it out because she was planting something else and had the yardmen bring it to me and plant it in our yard. I was thrilled.”

They had many other personal ties. Mary Lucas’ great grandkids went to same elementary school as the six Vannatta children.

“They went to Punahou School after 6th grade, and we went to Niu Valley Intermediate, but I do remember both sisters fondly. They were nice girls,” Cindy said.

The families, like many in Hawaii, had a partnership between the landowner and the homeowner patterned after commercial leases and unique to Hawaii. One partner owned the house the other partner owned the land.

The Vannattas, like other homeowners on leased land, signed a 55-year residential lease with one adjustment after 30 years.

“It seemed like a good arrangement.  “There was a lot of trust back then between the homeowner and the landowner,” Joan said.  “We knew who owned the land.  Mrs. Lucas did. But she also knew who owned house.  We did.”

In the beginning during Hawaii’s territorial days, the Vannattas paid $19 per month for the property they leased under their new house.

When it came time to renegotiate the lease, the new property owner at the time, auto dealer Jimmy Pflueger, told them the lease would increase from $19 to $326 per month – more than an 1,800 percent spike.

Bonny, having a background in banking, was shocked, and felt the increase was too high.  He felt cheated, but also stuck.

The Vannattas continued to live in the Niu home throughout the 55-year lease. They always trusted they would be allowed to renew their lease or extend the existing one if they were still alive in October 2011.

The average life expectancy when they signed the lease in 1957 was under 70 years old. Joan said she and her husband were not worried, because they never thought they would outlive the lease.

During their many years in Niu, Joan and Bonny and family suffered through tragedies. They lost their son, David, when he was killed crossing Kalanianaole Highway before the crosswalk light was put in. His ashes are spread in the mountains at the back of the valley, which are visible from Joan’s patio.

Bonny died in the house of a sudden heart attack in December of 1998.  Joan, of course, surprised herself and outlived the lease. But she does not want to leave.

“This is where my memories are,” she says. “I do not want to move.”

Her daughters, Cindy and Linda, said their mother is a good neighbor, caring and kind.

Joan, who stayed home with the kids, watched out for all the other children on the street as they were growing up.

“Our house was the “go to” house. Latch key kids were instructed to make a run for the Vannattas’ home if there was trouble,” Linda said. “My mom was always up for helping anyone.”

Joan also took in her neighbors for three months when their house burned to the ground.  She has supported many of her ailing neighbors who needed an extra hand. Hundreds of stray animals have passed through the house.

Joan continues to love her home, her friends, and her neighborhood. Her friends, neighbors and kids say, Niu Valley would not be the same without her.

Two years ago, Joan’s children were becoming increasingly concerned because they knew the 55-year lease would expire in 2011.

Cindy was divorced and moved home after selling her Kailua home. She remembered the drastic rent increase her parents had endured in the 1980s and wanted to help her mother negotiate a new price for the leased land. Once that was settled, she planned to move back to Kailua. But the negotiations have not gone smoothly.

She and her siblings have been trying to negotiate a lease extension or land purchase, but they say they have been getting the run around.

After a year and a half of delays by the Pfluegers and Cassidays, Linda and Cindy said their mother was told three days before her lease expired that she would have to vacate the property or be evicted by sheriffs. They were all shocked.

Once the lease expired, Joan officially lost ownership of the family home to the landowners.

“Something bad happened to us,” Cindy says. “We were fully prepared to extend the lease at a higher price until our mother died or buy the land. How we ended up with nothing but an eviction notice is unbelievable to me.”

The kids want to help their mother buy the land and stay in the home.

“My mother has never worked. She stayed home and took care of us,” Mark Vannatta said.  “We were good kids and now we all have jobs and we will have good retirement accounts when we are her age.  All she has is us. We are her retirement account.  We want to buy the land for her so she live the remainder of her life where she is happy.”

They had the land valued at $550,000 in 2010 and offered to buy the land at $625,000.

But the Pfluegers and Cassidays as of this month have increased the price to $750,000. The Vannatta family can qualify for a loan of just $625,000. Cindy and Linda said the price increase has put the home out of their range.

The Vannattas are critical of First Hawaiian Bank’s handling of the lease – the bank managed the property for the Cassidays and Pfluegers.

But Brandt Farias, spokesperson for the bank, maintains “First Hawaiian Bank fulfilled our obligations based on our customer agreement.”

Chee said on the behalf of the Pfluegers and Cassidays in court: ““My clients have always wanted to settle. At this point there is no settlement. There never was a settlement.”

In the midst of the Vannattas negotiations, Jimmy Pflueger, his son Alan, two of their employees from their Pflueger dealership and Jimmy Pflueger’s accountant, were indicted on federal tax fraud charges.

Jimmy Pflueger, listed in Hawaii Business Magazine as Hawaii’s 18th richest person, was accused of selling a California property for $14 million and then hiding the money in a Swiss bank account. Jimmy Pflueger’s accountant pled guilty last week to participating in the scheme. Before that, Jimmy Pflueger’s son Alan and two employees pled guilty to tax evasion. Jimmy Pflueger is the only one of the five to fight the charges and is set to go to trial in January 2013.

Besides the IRS, there are other threats to the Pflueger assets.

On March 14, 2006, the Ka Loko Dam breached. The dam and reservoir are on property owned by partially by Jimmy Pflueger and partially by the family trust he once managed.

Nearly 400 million gallons of water roared like a tsunami down the mountain in waves that went as high as 40 feet. The powerful water ripped down homes, took away cars, and destroyed whole forests.

The river was filled with debris and the ocean with trash. The most horrifying news of all – seven people, and an unborn child, were swept to their death just before sunrise.

Weeks later, the families of the victims and those who owned land damaged by the breach, filed lawsuits against Jimmy Pflueger and his family’s trust.

Jimmy Pflueger was accused of covering the dam’s main safety feature, its concrete spillway, when he was preparing the area for home construction, ultimately causing the 118 year-old dam to overtop and burst. He has adamantly denied the allegations.

The civil lawsuits were settled in 2010 without a trial. Jimmy Pflueger was supposed to pay millions of dollars to the families of those who died and property owners who suffered property damage by September 2011. He never paid. A year later, this past September 2012, he paid the interest on the $12 million.

Criminal charges are also pending against Jimmy Pflueger for the breach. He was charged criminally with 7 counts of manslaughter and 1 count of reckless endangerment in the first degree in 2008.

Jimmy Pflueger has successfully delayed his criminal trial for years, but should he settle or be convicted in a trial, he could face financial consequences.

In February 2012, Jimmy Pflueger transferred the Vannattas’ Niu Valley home to his daughter Tracey Allen, a well-known realtor.

The judge overseeing the Pflueger/Cassiday eviction action ordered a settlement conference in mid October.

Joan’s children are extremely concerned their mother will be evicted.

The children said “the Pfluegers and Paul Cassidy can take their mother’s house but they will never take her family.  Her children and grandchildren love her.”

“I worry for elders that may not have the support my mom does. The law should not allow what is being done to her by Pflueger/Cassidy,” Cindy said.

Joan does have some good news to look forward to. She will soon meet her first great child who will be traveling to Hawaii from San Diego.

“Luca Kaimana Vannatta Rossi has never met his great grandmother. It will be a great party.  It would be even better if we could fix the expired lease problem for her too.  She does not deserve what is being done to her,” Cindy said.

 

Reporter Jim Dooley covered the court proceedings related to this case.

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