Hawaiian Firm Says History Decrees Land Sales Invalid

With her salt-and-pepper hair pulled neatly in a bun, Edith Kawaiulailiahi Mar doesn’t look like a troublemaker. Her warm eyes and gentle face make her the quintessential Hawaiian grandma.

But today she stands at the center of a ruckus in Hawaii’s real estate industry that has disrupted property sales and is likely to cost her the home where she was born. Depending upon whom you ask, Mar is either the victim of a scam or a courageous individual trying to right a historical wrong.

“I’m just after the truth, the honest truth,” said Mar, who has lived all her 60 years in her modest house at the foot of Diamond Head, rearing six children. “I’ve got to do this for my kids and grandkids and the generations to come.”

Mar is a client of Perfect Title Co., a partnership formed by Donald Lewis and David Keanu Sai in December 1995, which has been challenging ownership of parcels of land by tracing titles back to the days of the Hawaiian kingdom. While the details of each case differ, the company invariably concludes that because the U.S.-backed overthrow of Hawaii’s monarchy in 1893 violated international treaties, any government or land title since then is invalid.

The firm has signed up more than 230 clients and completed more than 120 “investigative reports.” Each is recorded at the state Bureau of Conveyances. And therein lies the rub. Once in the public record, the reports create “clouds” on title, disrupting potential sales because title insurance firms are reluctant to handle disputed property.

“We believe the documents are spurious, but we also know that it costs money and time to get rid of them on the public record,” says John Jubinsky, general counsel for Title Guaranty of Hawaii Inc., the largest title company in the state. “We’re not about to go in and say we’ll take on that expense.”

Jubinsky considers Perfect Title’s work “a scam” and joined the state attorney general in lobbying the Legislature to crack down on it. Lawmakers now are considering a bill to make it easier to expunge frivolous title claims from the Bureau of Conveyances and stiffen penalties against those responsible.

Perfect Title reports also have prompted a handful of people such as Mar to stop paying their mortgages, putting their homes on the line. These homeowners argue that the payments should be picked up by the title insurance companies that originally guaranteed the titles were clear.

Mar obtained title insurance in 1993 when she took out a mortgage on her home. After obtaining a Perfect Title report last year, she filed a claim with her insurer and stopped making mortgage payments. Chicago Title, however, dismissed Perfect Title’s report as an “opinion” and denied the claim.

Last month, after many missed payments, Mar’s lender foreclosed, and her six-bedroom home was sold at auction. If the sale is confirmed in court next month, the Mars will be forced to leave.

Although Mar says she is not an activist, her actions dovetail with a push for self-determination among native Hawaiians. The chorus has grown louder in recent years, catching the attention of officials. In 1993, the U.S. government formally apologized for its role in the coup a century earlier, acknowledging that Hawaiians had “never directly relinquished their sovereignty as a people or over their national lands.”

Lewis approaches his mission with a preacher’s fervor. At free seminars across the state, the charismatic Hawaiian uses century-old handwritten documents and an overhead projector to describe the evolution of property rights in Hawaii since 1848, when King Kamehameha III first allowed private ownership.

By the end of his presentations, some listeners are ready to sign up for a title search, at $1,500 a pop.

Despite the zeal of the company and its clients, the courts aren’t buying Perfect Title’s analysis. Last month, a state circuit judge ruled that a Perfect Title report that delayed a property sale on the Big Island was an invalid lien and ordered the partnership to pay $5,000 in damages.

“However admirable its goals,” said Arnold Lum, an attorney with the Native Hawaiian Legal Corp., “Perfect Title’s attempt to take the law into its own hands and rewrite history has harmed Hawaiians.”