Baskin v. EC PAIA LLC, 1:20-cv-00216

The dispute concerns a real estate investment in 340 acres of land in Paia, Maui, involving contracts between Michael Baskin (and his entities, the "Baskin Parties") and EC Paia LLC ("EC Paia").
The Baskin Parties initially contracted to purchase the property from Alexander & Baldwin (A&B), but lacked funds to close, and sought an equity partner.
EC Paia alleged it was induced into an assignment of the purchase contract, and additional agreements, based on Baskin's misrepresentations about the property’s entitlements, development potential, water availability, and backup offers.
The first phase focused on the Baskin Parties’ breach of contract claims against EC Paia, which the court dismissed—a decision upheld on appeal.
On remand, the second phase addressed EC Paia’s counterclaims for intentional and negligent misrepresentation against the Baskin Parties, claiming material reliance on false statements.
After trial, the court found in favor of EC Paia, concluding several of Baskin’s statements were actionable misrepresentations with resulting damages.

Issue	Baskin's Argument	EC Paia's Argument	Held
Whether statements regarding development and entitlements were actionable misrepresentations	Statements reflected opinions, projections, or future events, not existing facts	Representations purported to be about existing material facts and induced reliance	Some statements were speculative/opinion, but others (esp. water & inn claims) were actionable misrepresentations
Whether Baskin’s representation about a backup offer was actionable	Statement was negotiation bluff, not material or relied upon	Relied upon backup offer claim in raising purchase price	Backup offer misrepresentation was material, knowingly false, and reasonably relied upon
Whether reliance by EC Paia was reasonable after losing confidence in Baskin	Reliance was not reasonable considering sophisticated parties and end of joint venture	Reliance was still reasonable due to Baskin's detailed representations and expertise	Only the actionable misrepresentations (boutique inn, water, backup offer) were reasonably relied upon
Appropriate measure of damages	Sought to limit damages, arguing lack of causation and valuation disputes	Sought monetary and non-monetary damages including transfer obligations under agreements	Ordered $665,762.39 plus release from transfer/lease obligations; no punitive damages

Shoppe v. Gucci America, Inc., 94 Hawai‘i 368 (Haw. 2000) (actionable misrepresentation relates to past/existing material fact, not future events)
Philadelphia Indem. Ins. Co. v. Ohana Control Sys., Inc., 289 F. Supp. 3d 1141 (D. Haw. 2018) (elements of intentional and negligent misrepresentation under Hawai‘i law)
Sung v. Hamilton, 710 F. Supp. 2d 1036 (D. Haw. 2010) (fraud can arise from nondisclosure as well as affirmative misrepresentation)