Haiku Springs Land Development Initiative LLC v. Sheehan

NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER

Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
30-JUL-2025
07:51 AM
Dkt. 77 SO

NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAIʻI

HAIKU SPRINGS LAND DEVELOPMENT INITIATIVE LLC,
a Hawaii Limited Liability Company;
its Manager, JEFFREY BRONFMAN; and its Member
BRONFMAN FAMILY INVESTMENT PARTNERSHIP LLP,
a New Mexico Limited Liability Partnership;
AURORA INVESTMENTS CORPORATION, a Texas Corporation,
Plaintiffs/Claimants-Appellants, v.
MARK FRANCIS SHEEHAN, Individually and as Trustee of the
Mark Francis Sheehan Revocable Living Trust
dated March 14, 1988, Defendant/Respondent-Appellee.

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
(S.P. NO. 1CSP-XX-XXXXXXX)

SUMMARY DISPOSITION ORDER
(By: Nakasone, Chief Judge, McCullen and Guidry, JJ.)

Plaintiffs/Claimants-Appellants Haiku Springs Land

Development Initiative LLC; its manager, Jeffrey Bronfman; its

member, Bronfman Family Investment Partnership LLP; and Aurora

Investments Corporation (collectively, Bronfman) appeal from the
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Circuit Court of the First Circuit's July 18, 2022 order

granting Defendant/Respondent-Appellee Mark Francis Sheehan's

motion to confirm the final arbitration decision and award. 1

Bronfman raises three points of error contending the

circuit court erred in failing to (1) vacate the arbitration

award, (2) hold an evidentiary hearing, and (3) render findings

and conclusions.

Upon careful review of the record and the briefs

submitted by the parties, and having given due consideration to

the issues raised and the arguments advanced, we resolve the

points of error as discussed below and affirm.

Bronfman and Sheehan met in 2010. Sheehan owned two

parcels of land on Maui: Lots 173 and 174. Bronfman expressed

interest in purchasing Lot 173 outright 2 and gradually acquiring

Lot 174; to this end, Bronfman and Sheehan entered into several

memoranda of understanding and agreement:

2011 Planting MOA

On April 29, 2011, the parties entered into a

Memorandum of Agreement in which Bronfman, as president of both

the Aurora Foundation and O Centro Espirita Benficente União Do

1 The Honorable Gary W.B. Chang presided.
2 Bronfman purchased Lot 173 from Sheehan in 2011.

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Vegetal (UDV), 3 agreed to pay Sheehan $1,000.00 per month for

thirty-six months for the right to plant ceremonial plants "of

fundamental religious importance to the UDV" on Lot 174 (2011

Planting MOA).

2011 MOA and RFR

Also on April 29, 2011, the parties entered into a

Memorandum of Agreement and Right of First Refusal providing for

Lot 174's disposition (2011 MOA and RFR). Sheehan would "make

parcel 174 his primary residence for at least two years" during

which he would "execute a CPR (condominium property regime)

separating" out half an acre from Lot 174. If Sheehan needed to

sell Lot 174's remaining ten acres, Bronfman had the right of

first refusal.

2012 Acquisition MOU

On August 1, 2012, Bronfman and Sheehan (on behalf of

themselves and their wives) entered into a Memorandum of

Understanding, which set forth a scheme by which Bronfman would

"acquire the total property (Lot 174) over time" (2012

Acquisition MOU). (Emphasis added.) Bronfman and Sheehan

3 The Aurora Foundation is a tax-exempt public charity; its purpose is
to support "projects that embody strategic efforts for the preservation and
protection of planetary ecosystems as well as efforts that secure the
perpetuation and practice of indigenous cultures and ancient religious,
spiritual, and ceremonial traditions." (Formatting altered.)

UDV is a "federally recognized church (religious organization) [that]
utilizes a species of tropical vine (Banisteriopsis caapi) and a leaf bearing
tree (Psychotria viridis) to prepare a sacrament for its religious ceremonial
purposes. The plants are considered to be sacred, and of inestimable value,
by the adherents of the UDV religion."

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agreed to "establish a limited liability company (LLC)" to which

Sheehan would contribute his ownership in Lot 174, "valued at

$2,100,000." Sheehan would take half an acre, valued at

$100,000.00, sometime during the life of the LLC. And Bronfman

would initially contribute $250,000.00 in cash to the LLC. The

LLC would "own full title to the land with [Sheehan] initially

owning 88.095% of the LLC (worth $1,850,000) and [Bronfman]

owning 11.905% (worth $250,000)."

With the LLC holding title to Lot 174, Bronfman agreed

to pay Sheehan $9,722.25 per month; each payment would increase

Bronfman's share in the LLC and reduce Sheehan's share until

Bronfman had "full ownership of the LLC and with it [Lot 174]

which [would] be the company's sole asset after 15 years, when

the final payment of $9722.25 [would] be made."

2012 Operating Agreement

On December 27, 2012, Sheehan quitclaimed title to

Lot 174 to Haiku Springs. 4

Two days later, Bronfman and Sheehan formed Haiku

Springs, the LLC alluded to in the 2012 Acquisition MOU, by

entering into the "Operating Agreement for Haiku Springs Land

Development Initiative LLC" (Operating Agreement or OA). 5 In its

4 There are discrepancies in the deed, but neither Bronfman nor Sheehan
dispute that Sheehan transferred ownership of Lot 174 to Haiku Springs via
quitclaim deed.
5 The copies of the Operating Agreement in the record are unsigned.

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"Complete Agreement" provision, the Operating Agreement

expressly stated it "replace[d] and supersede[d] all prior

written and oral agreements or statements[.]"

The Operating Agreement again memorialized Bronfman

and Sheehan's intentions "to use the Company as a vehicle to

transfer the Real Property from Mark Sheehan to Jeffrey

Bronfman, over time." (Emphasis added.) It reiterated that

Bronfman would "make Capital Contributions to the Company, and

the Company is to use those same Capital Contributions to redeem

Mark Sheehan's Membership Interests, over time." (Emphasis

added.) It did not, however, specify the frequency or amount of

these capital contributions.

2013 Clarification MOA

On October 24, 2013, Bronfman and Sheehan entered into

a Memorandum of Agreement and Assignment of Interests (2013

Clarification MOA). This agreement referenced — and appended —

the 2011 MOA and RFR and the 2012 Acquisition MOU, and explained

that "Sheehan's interest in the property referenced in the April

2011 agreement was to be transferred to" Haiku Springs:

Memorandum of Agreement
and Assignment of Interests

In a Memorandum of Agreement ("MOA") between Jeffrey
Bronfman, Mark Sheehan, and Aurora Foundation, dated
April 29, 2011, certain agreements and responsibilities
related to plants "considered to be sacred and of
inestimable value, by the adherents of the UDV religion"
were codified. (see Appendix A in attachment).

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Under a separate agreement ("Memorandum Of
Understanding" or "MOU") between Jeffrey Bronfman and Mark
Sheehan, dated August 11, 2012, Mark Sheehan's interest in
the property referenced in the April 2011 agreement was to
be transferred to a new limited liability company (The
Haiku Springs Land Development Initiative LLC or "The
LLC"). (See Appendix B in attachment.)

This transfer of ownership interest was realized by a
Quit Claim Deed on [December 27, 2012] (See Appendix C in
attachment.)

(Emphasis added.)

The 2013 Clarification MOA then clarified "the current

and existing agreement" by stating, inter alia, that the

agreements "as delineated in the MOA" pass to Haiku Springs:

For the soul [sic] objective of now clarifying the
current and existing agreement between the parties (as
modified by the actions described herein):

(1) As of January 1, 2013, the payment responsibilities
of the Aurora Foundation, defined under the April 29,
2011 MOA are now to be paid to the new land owner -
the Haiku Springs Land Development Initiative LLC.
As previously defined this contractual arrangement
will continue through the end of May 2014.

(2) The agreements between Mark Sheehan and Jeffrey
Bronfman, as delineated in the MOA, pass to the LLC
for whom Mark and Jeffrey are both member/partners.

(Emphases added.)

For over seven years following the execution of the

Operating Agreement, Bronfman paid $9,722.25 monthly to Sheehan

as described in the 2012 Acquisition MOU. Soon thereafter,

Bronfman informed Sheehan "he wanted to sell the ten and a half

acre Lot 174, windup [Haiku Springs] and distribute the net

proceeds according to their respective membership interests."

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Sheehan did not want to move forward with Haiku Springs'

dissolution.

In October 2020, Bronfman stopped making the $9,722.25

monthly payments. As a result, Sheehan filed a demand and

submission for arbitration with Dispute Prevention and

Resolution, Inc. pursuant to section 11.8 of the Operating

Agreement.

The arbitration panel, as relevant to this appeal,

(1) required Bronfman to pay "$145,833.45 ($9722.23 x 15

months)" for past due payments and to resume the "$9,722 monthly

payments"; (2) awarded Sheehan the half-acre lot and allotted

roughly one year within which he could convert it into a CPR;

and (3) ordered Bronfman to pay "$135,477.58 for reasonable

attorney fees and costs for this arbitration."

Bronfman moved the circuit court to vacate the Final

Arbitration Decision and Award, arguing the panel exceeded its

powers "by basing their Decision and Award on prior agreements

or statements" in spite of the Operating Agreement's Complete

Agreement provision. After hearing arguments, the circuit court

denied Bronfman's motion explaining it was "unable to conclude

that the arbitrators exceeded their authority" based on "this

limited record[.]" Sheehan moved to confirm the award, which

was granted.

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(1) Bronfman's first point of error essentially

contends the circuit court was required to vacate the award

under Hawai‘i Revised Statutes (HRS) § 658A-23(a)(4) (2016),

because the panel exceeded its powers by altering material terms

of the Operating Agreement. Bronfman argues the arbitration

panel "altered and ignored" material terms of the Operating

Agreement when it ordered the "$9,722 monthly payments" to

resume with back payments and allowed Sheehan to attempt to

obtain a CPR.

HRS § 658A-23(a)(4) requires courts to vacate

arbitration awards upon motion if "[a]n arbitrator exceeded the

arbitrator's powers[.]" The panel's scope of "authority is

determined by agreement of the parties." Kona Vill. Realty,

Inc. v. Sunstone Realty Partners, XIV, LLC, 123 Hawai‘i 476, 477,

236 P.3d 456, 457 (2010) (citation and internal quotation marks

omitted). "In determining whether an arbitrator has exceeded

his or her authority under the agreement, there should be no

second guessing by the court of the arbitrator's interpretation

of his or her authority so long as the arbitrator's

interpretation could have rested on an interpretation and

application of the agreement." In re Hawai‘i State Tchrs. Ass'n,

140 Hawai‘i 381, 399, 400 P.3d 582, 600 (2017) (cleaned up).

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"Thus, an arbitrator's award is valid when it 'draws

its essence' from the arbitration agreement." Tatibouet v.

Ellsworth, 99 Hawai‘i 226, 235, 54 P.3d 397, 406 (2002) (footnote

and citation omitted). This standard has been interpreted "to

mean that a reviewing court must look to the arbitration clause,

the words of the contract, and the conduct of the parties." Id.

at 235 n.7, 54 P.3d at 406 n.7.

Appellate courts review "the circuit court's ruling on

an arbitration award de novo," but are also "mindful that the

circuit court's review of arbitral awards must be 'extremely

narrow and exceedingly deferential.'" Id. at 233, 54 P.3d at

404 (cleaned up).

Section 11.8, the "Dispute Resolution" provision in

the Operating Agreement, applied to "any other dispute,

controversy, or claim between the parties arising out of or

relating to this Agreement[.]" This section provided that the

"arbitration panel has no power to alter, amend, modify, or

change any of the terms of this Agreement or to grant any remedy

which is either prohibited by the terms of this Agreement or not

available in a court of law." Section 11.1, the "Complete

Agreement" section of the Operating Agreement, also stated that

it was "the complete and exclusive statement of agreement among

the Members" and contained an integration provision stating it

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"replace[d] and supersede[d] all prior written and oral

agreements or statements[.]"

The Operating Agreement established Haiku Springs for

the express purpose of using it "as a vehicle to transfer the

Real Property [(defined as Lot 174)] from Mark Sheehan to

Jeffrey Bronfman, over time." (Emphasis added.) It

"structure[d] that incremental transfer as follows: Jeffrey

Bronfman is to make Capital Contributions to the Company, and

the Company is to use those same Capital Contributions to redeem

Mark Sheehan's Membership Interests, over time." (Emphasis

added.)

"Alter" means "to change," while "interpret" means

"[t]o ascertain the meaning and significance of thoughts

expressed in words." Bryan A. Garner, Garner's Modern American

Usage 37 (2d ed. 2003); Interpret, Black's Law Dictionary 977

(12th ed. 2024).

Here, the arbitration panel did not alter the phrase

"over time," but rather interpreted it.

The arbitration panel interpreted "over time" as

meaning "$9,722 monthly payments" until Sheehan's interest was

fully redeemed, which was consistent with Bronfman's behavior in

the years following the execution of the Operating Agreement.

For the seven-plus years after the Operating Agreement went into

effect, Bronfman consistently made the $9,722.25 monthly

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payments. Bronfman's payments in those seven-plus years show

that the arbitration panel's "interpretation could have rested

on an interpretation and application of the agreement" as

Bronfman appears to have interpreted the Operating Agreement in

the same manner. See In re Hawai‘i State Tchrs. Ass'n, 140

Hawai‘i at 399, 400 P.3d at 600 (cleaned up).

We now turn to the arbitration panel's order granting

Sheehan time "to convert the half acre lot he occupies on the

upper portion of Lot 174 into a CPR[.]"

Nothing in the Operating Agreement refers to Sheehan

obtaining a CPR for half an acre. But section 11.13 allows for

amendments if in writing and signed by all members.

The 2013 Clarification MOA was in writing and signed

by Sheehan and Bronfman. The 2013 Clarification MOA

specifically referenced Sheehan's property interests, stating

that under the 2012 Acquisition MOU, "Sheehan's interest in the

property referenced in the April 2011 agreement was to be

transferred to a new limited liability company," Haiku Springs.

The 2013 Clarification MOA then stated, "The agreements between

[Sheehan and Bronfman], as delineated in the [2011] MOA [and

RFR], pass to the LLC for whom [Sheehan and Bronfman] are both

member/partners."

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Sheehan's interest in the property as explained by the

2011 MOA and RFR included "execut[ing] a CPR (condominium

property regime) separating the approximately half acre with the

bamboo house by the road from the rest of the valley." Thus,

the arbitration panel's award regarding obtaining a CPR for the

half acre "could have rested on an interpretation and

application of the agreement." See In re Hawai‘i State Tchrs.

Ass'n, 140 Hawai‘i at 399, 400 P.3d at 600.

"Given the broad discretion afforded to arbitrators

and the strict limits confining judicial review of arbitration

awards," we cannot say the panel exceeded its powers. See id.

at 400, 400 P.3d at 601. In turn, the circuit court did not err

in denying the motion to vacate and granting the motion to

confirm. See id.

(2) We address Bronfman's second and third points of

error together. Bronfman contends the circuit court "erred by

failing to (a) hold an evidentiary hearing . . . or (b) issue

findings of fact and conclusions of law[.]" Bronfman makes

these contentions in relation to whether the 2013 Clarification

MOA modified the Operating Agreement and whether the attorneys'

fees were reasonable.

Specifically, Bronfman argues that the circuit court,

in ruling on his motion to vacate, "heard argument from counsel

but declined to conduct an evidentiary hearing or issue findings

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of fact resolving what was a material factual dispute between

the parties — i.e., whether the 2013 MOA amended the LLC OA

between [him] and Sheehan." 6 Bronfman also argues that, because

the parties disputed the reasonableness of the claimed

attorneys' fees "before the Circuit Court on [Bronfman's] Motion

to Vacate the Arbitration Award with no finding in the Award,

the Circuit Court too should have conducted an evidentiary

hearing and issued appropriate findings of fact with respect to

the reasonableness of attorneys' fees included in the Award."

Bronfman, however, does not cite to where in the

record these proffered errors were raised to the circuit court.

See Hawai‘i Rules of Appellate Procedure Rule 28(b)(4) (providing

in part that "[e]ach point shall state . . . where in the record

the alleged error was objected to or the manner in which the

alleged error was brought to the attention of the court" and

"[p]oints not presented in accordance with this section will be

disregarded"). Our review of the record indicates that neither

error was preserved, and these contentions are waived. 7 Ass'n of

Apartment Owners of Wailea Elua v. Wailea Resort Co., 100 Hawai‘i

6 In his argument, Bronfman provides no record citation for this
statement.
7 With respect to the third point of error challenging the lack of
findings and conclusions, it appears Bronfman took a contrary position below,
filing an objection to Sheehan's submission of proposed findings and
conclusions because the circuit court 'did not articulate any' and '[n]either
[the statute] or Court Rules require[d]" such.

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97, 107, 58 P.3d 608, 618 (2002) ("Legal issues not raised in

the trial court are ordinarily deemed waived on appeal.").

Based on the foregoing, we affirm the circuit court's

July 18, 2022 order.

DATED: Honolulu, Hawaiʻi, July 30, 2025.

On the briefs: /s/ Karen T. Nakasone
Chief Judge
Gary G. Grimmer,
Ann Correa, /s/ Sonja M.P. McCullen
for Plaintiffs/Claimants- Associate Judge
Appellants.
/s/ Kimberly T. Guidry
Linda J. Nye, Associate Judge
for Defendant/Respondent-
Appellee.

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