Ke Nani Kai residents receive $3.87 million jury award against condo association

A pattern of harassment and intimidation against the owners at Ke Nani Kai Condominium on the West End has led to an award for residents Jim and Nancy Bevill of $3.87 million from a Maui jury last Wednesday.

The $3.87 million award is a record judgment in this type of case, according to the Bevills attorney Terry Revere. He described the case as the “the West Molokai version of Lord of the Flies or the equivalent of a John Ford Western where an isolated town is run by a villain and his collection of thugs.” Revere said the intimidation lasted for at least six years and continued even after the lawsuit was filed.

The jury found the condominium association’s board of directors, and its employees and agents violated state condominium laws. They were also found to be engaged in a variety of illegal acts including racketeering, civil conspiracy, gross negligence, malicious prosecution, breach of contract, and both negligent and intentional infliction of emotional distress.

The Bevills moved to Molokai in 2004 from California and soon found themselves the target of threats, harassment and intimidation from unlicensed contractor Frank Maruzio and resident manager Darrel Borling, who hired Maruzio to do work around the complex.

Other Ke Nani Kai residents, including Darryl and Jody Canady and Bob Aldrich, had also complained about the behavior of Maruzio and Borling to the condo’s board of directors. The board’s failure to act on these complaints led to some of the previous board members being named in the Bevill lawsuit.

Jody Canady, who was called to testify during the eight-day trial on behalf of the Bevills, said one of the strongest pieces of evidence was a taped conversation of Borling yelling at her. She also said that Maruzio once tried to run her off the road and had threatened to kill her husband Darryl. At one point, the Canadys were so concerned for their welfare that they hired a private security guard service for a month. The couple had placed a temporary restraining order against Maruzio but never needed to enforce it.

Aldrich also described these problems that persisted over a period of five to six years. “They (Borling and Maruzio) were the neighborhood terrorists,” he said. Aldrich described numerous threats made against him, the Canadys and the Bevills. Aldrich said a witness saw Maruzio back his vehicle into Nancy Bevill’s SUV intentionally.

“The board wouldn’t do anything,” said Aldrich. “They would label us troublemakers and liars.”

Darryl Canady said a group of about 20-30 condo residents had gathered years ago to discuss these complaints but found the board unresponsive. Jody Canady said the Bevills wanted to settle this case before it went to trial if the board would file an injunction preventing Maruzio from returning to the property. “They just wouldn’t do it,” she said.

When Aldrich and the Bevills started to speak publicly about these incidents, the previous board of directors filed a lawsuit against them for slander. The case was summarily dismissed.

Now, some of those previous board members, including Phil Schutte, Bruce Blough and Michael Preiss are being held responsible for a portion of the monetary damages, according to the Canadys.

The judgment against the association means the 119 owners of the units may also be liable for the damages. Although the association has three different insurance policies, it is still unclear if the individual owners may have to pay.

“It’s still too early to tell (about damages),” said Jody Canady. “It may cost us some money but it sent a loud message to the current board of directors that this is not acceptable behavior. Every single condo complex needs to read this because this kind of thing does go on … We went through a disgusting ordeal. But we are glad to see it happen.”

Aldrich, who didn’t join the Bevills lawsuit because he couldn’t afford the $900,000 of attorney fees, was also pleased with the result.

“This is a wake up call for homeowner associations in Hawaii and across the country,” said Aldrich. “The state legislature gives board of directors too much authority. This is a hard way to deal with it but let’s hope it’s over now and we can move on.”