Shared Costs for Localized Benefits?
Updated: Oct 4
Post 1 of a three-part series By Bernard Markowicz
There is a lot to digest in this post, and in the next two posts as well, but I think it will be worth the effort... This posts comes after significant research. I will note specifically which assertions are factual (FACT) and which are my opinions (Opinion.) My objective is always to explain and leave the readers to make their own decisions.
This post is about how the Mulls and Whites and SoS Hui organization is trying to take over the PHCA Board by all means necessary for the purpose of using Association reserves to finance the appeal to their original lawsuit against Starwood, and how this would be a horrible financial deal for Princeville as a whole. The second post will examine Board leadership failures and their impact on the management of our community. The third will address the two recent Schulzes’ lawsuits. The connection is how private interests, Board decisions, and community resources interact. Some of you may be angry already, but please read on, it's free...
Two facts Princeville members should weigh before thinking of sharing the cost of the lawsuit:
(FACT) 1. The original Mull/White lawsuit against Starwood expressly identifies harm to the plaintiffs’ and adjoining properties, never to Princeville as a whole. It states: “Plaintiffs’ real properties are located adjacent to the proposed development,” and alleges damage to their “use and enjoyment.” This is direct documentary support for a localized interest in stopping the development. It never establishes an equivalent financial benefit for every PHCA member. [S10, p. 7, paragraphs 40–41]
(FACT) 2. The term “open space” was never used in either the original Mull-White complaint or the proposed amended complaint (lawsuit) reviewed as part of this post. The original complaint sought to enforce restrictions for “golf course and ancillary recreational uses.” The amendment to the original suit adds allegations of anthrax-related health risks and declining property values. Neither document measures a community-wide property-value loss caused by losing "open space." [S10, p. 3, paragraph 10; S11, Exhibit 1, paragraphs 83–85 and 112–115] See more details about these two sets of facts in the section below "More on the two initial facts"
(Opinion) These two facts deserve a central place in the debate whether PHCA should finance any aspect of the Mull/White lawsuit. A case that identifies direct harm to adjoining owners should not automatically become a bill for the whole community. And an appeal to preserve open space should explain precisely what is being protected, what rights members would have, and what evidence supports the claimed benefit across Princeville. In my previous post "Open Space: What Are We Actually Protecting?" I explained why the slogan "we are protecting open spaces for the Ai'na" is actually a myth. SoS HUI supporters, and prominently Ema Schulz, have knowingly co-opted the broader cause of preserving Princeville’s open space to rally community support for this lawsuit. This lawsuit is and never was about preserving open spaces, it is about preserving the not so great views of someone else's neatly mowed grass and the back of other houses near the Mulls and Whites.
Members and readers of all ages should distinguish the public appeal of "preserving open spaces for the Ai'na" from what the Mull/White complaint actually says. Members should distinguish the public campaign from the arguments in the court filings, and ask whether those arguments justify using everyone’s money to fund the lawsuit. [S10–S11] Enforcing golf-use restrictions could preserve landscape views for a few, but does this localized interest relieves supporters of explaining why everyone should pay?
Who benefits—and at what cost?
(FACT) The campaign to have PHCA cover the Mull/White lawsuit cost, presented as serving the wider community, started in earnest with a May 29, 2025 Ema Schulz Nextdoor post describing the families pursuing the Starwood litigation as acting “for all of us.” Other appeals associated opposition to development with residents, wildlife, health, and preservation. [S1–S3] (Opinion) : Preserving views from nearby homes, protecting private property values, and securing access for everyone are different benefits. Clearly, the most direct benefits of maintaining the restrictions would go to owners beside the Woods Course. A benefit to those owners does not, by itself, establish an equivalent benefit to the whole Association. Before asking everyone to pay, supporters should explain what the wider membership would receive. Would members gain an enforceable right to use the land? The litigants never showed evidence that the restrictions would protect property values throughout Princeville. How would unexplained benefits compare with the litigation risks and costs?
Asking the Association to Pay
(FACT) : At the 2025 PHCA Board candidate forum, Andy White asked the candidates, point blank, whether PHCA should financially support sustaining the result of the Starwood litigation. Mark Gauthier, now an elected director on the PHCA Board, said he had personally contributed to SOS Hui and favored association involvement despite the financial consequences. As a candidate then, I personally expressed concern about the exposure across the membership. [S4] Hear him for yourselves:
(Opinion) In my view, a Board majority aligned with the Mulls/Whites will vote to use Association reserve funds to support the litigation and/or reimburse donors. Mark’s statement support that expectation. Such an action would spread expenses from a privately funded lawsuit between private owners (Mulls, Whites, and Starwood) across PHCA’s membership. If reserves are used, the Association and its members, including all condo and timeshare owners paying PHCA dues through their AOAOs, would lose the ability to fund necessary Princeville infrastructure expenses, and dues would automatically be raised significantly to replenish reserves as required by law. The recorded excerpt does not identify reserves as the funding source but in any way, dues would need to be raised to divert significant funds to the Mulls/Whites. My personal estimate is in the $2M range.
An uncertain outcome, with wider implications
(FACT) On September 14, 2026, the Hawaii Land Title Association and American Land Title Association requested permission to submit a joint brief supporting the golf-course owner’s appeal. Their brief warns that Judge Watanabe's ruling on Mull and White v. SOF-XI Kauai PV Golf, L.P., overriding a recorded Dedication of Golf Course Property February 28, 2026 expiration date, could increase title-insurance costs or limit title-insurance availability in the entire State of Hawai‘i. [S5]
(Opinion) My assessment is that the Mulls-Whites have roughly a fifty-fifty chance of preserving their victory on appeal. My judgment is informed by discussions with independent attorneys (not Starwood!!) and my own research. Even without assigning odds, we should always consider the cost of paying for something with an uncertain outcome. If the Title Associations’ concerns materialize, property transactions in Princeville would surely become more expensive and more difficult. Those potential effects arise from the ruling, whether or not PHCA funds the case.
Leadership and accountability
(Opinion) : In light of his recorded words, my view is that Mark Gauthier has a serious conflict of interest in Board decisions concerning this lawsuit. He publicly said that he supported the litigation financially and publicly advocated Association involvement. Based on my understanding that he owns property near the proposed development, he would stand to benefit himself financially from preserving the golf restrictions. That combination warrants disclosure and a formal conflict review before he participates in any decision about the case. [S4] This would be the case for anyone serving now with Mark on the Board or elected or appointed to the Board in the future who donated to the SoS lawsuit fund.
Speaking of... Pattie Thiele admitted to me that she donated to SoS Hui litigation fund in a one-on-one conversation. [E1] A person I trust told me that Dale Sands declined to answer when asked whether he had contributed.[E2] Patti’s stated support raises a conflict concern in my view when Association funding is considered, violating the Association's conflict of interest policy. Dale’s reported refusal leaves his contribution status unknown. Members deserve disclosure of relevant interests and a clear explanation of how the Board handles them.
(FACT) : HRS §421J-5(e), a State of Hawaii Statute which addresses conflicts of interest at planned community associations, requires a director with a conflict to “disclose the nature of the conflict of interest prior to a vote,” and requires the minutes to record the disclosure. PHCA’s policy requires that a director (member of the Board) must leave during discussion and voting on the transaction. [S6–S7] The next post will examine the broader record of Board leadership, including transparency, priorities, and accountability to the whole community.
Is this a sound bargain for Princeville? (Opinion)
HELL NO!!!!I
The initial Mull-White complaints clearly state that the benefit would be for them and the adjoining owners.
At the same time, their allegation of loss of value contain no valuation analysis in the two filings reviewed.
It is very possible that selected development on the Woods course may instead enhance the overall value and attractiveness of Princeville as a whole.
Association spending would spread my estimated $2M expense across the membership and leave less money for other needs.
The appeal is uncertain, and the Title Associations brief identify wider risks that deserve consideration.
Even a courtroom victory for the Mulls-Whites would not, by itself, make this a good use of members’ money. Before committing funds, the Board must explain (yes, communicate to the membership for a change) what the whole community gains, the spending limit, the funding source, and the priorities that would be displaced. And we know that the community would not gain access to "open space"... When the benefits are localized, the case for sharing the costs must be demonstrated—not assumed.
More on the two initial facts
The first fact: direct harm to adjoining properties
(FACT) The original complaint, filed June 24, 2021, states:
“Plaintiffs’ real properties are located adjacent to the proposed development.”
It then alleges:
“Plaintiffs’ use and enjoyment of their real properties will be immediately and irreparably damaged if SOF-XI is allowed to proceed with their proposed development in violation of the Dedication.” [S10, p. 7, paragraphs 40–41]
These statements concern the plaintiffs’ properties—the Mulls’ and Whites’—not the defendant’s. The original complaint concerns proposed glamping and harm to the plaintiffs’ use and enjoyment. It does not expressly estimate a decline in property prices across Princeville. (Opinion) Their own words establish a direct, localized interest in stopping development beside their homes. That supports my view that the most immediate benefits would only go to adjoining owners. The separate question remains: what benefit would justify asking every PHCA member to pay?
(FACT) The July 25, 2023 motion includes a proposed amended complaint. Paragraph 85 states:
“Starwood’s Proposed Development, along with the disturbed anthrax and the attendant health issues will also diminish the value of Plaintiffs’ real property.” [S11, Exhibit 1, printed p. 14; PDF p. 29]
Paragraph 115 extends the allegation to the community:
“If Starwood is allowed to proceed with its planned development, including glamping and the Proposed Development, on the Woods Course, Plaintiffs and the Community will be injured, including substantial health risk and diminution of property values.” [S11, Exhibit 1, printed p. 18; PDF p. 33]
The proposed amendment does identify a possible cause: it alleges that excavation could disturb anthrax-contaminated soil, create health risks, and reduce property values. These are the plaintiffs’ allegations, not findings established by these filings.
Neither document supplies a dollar estimate, percentage decline, appraisal, comparable-sales analysis, or calculation of a community-wide property-value loss. They do not identify how many homes would lose value or measure the geographic reach of that loss. This finding concerns these two documents; it does not establish what evidence may have been submitted later. (Opinion) : Members should ask for the evidence connecting the alleged risk to the claimed financial loss across Princeville. An allegation of community harm does not, by itself, establish the scale of that harm or justify a community-wide bill.
The second fact: golf-use restrictions, not an express “open space” claim
(FACT) : The term “open space” was never used in either the original complaint or the proposed amended complaint reviewed here. The original complaint instead quotes the Dedication as limiting the land to:
“golf course and ancillary recreational uses for a term of years expiring February 28, 2026.” [S10, p. 3, paragraph 10]
It also quotes the restriction as benefiting “the owners of land at Princeville at Hanalei,” as defined in the referenced declaration. [S10, p. 3, paragraph 11] The proposed amendment repeats that language and argues for extension through the CC&Rs. [S11, Exhibit 1, printed pp. 3–4, paragraphs 9–15] Their stated argument is therefore about enforcing land-use restrictions, with the proposed amendment adding alleged health and property-value risks. Neither filing calculates a loss in property values caused specifically by losing open space. (Opinion) : Keeping land in golf and related recreational uses may preserve a landscape that residents value. But a restriction on development, a right of public access, and a measurable benefit to every owner are different things. The cited language does not establish general public access i.e. "open space". Supporters of Association funding for the lawsuit MUST explain which benefits they seek to protect, who receives them, and why those benefits justify the proposed cost.
About Friends of Princeville
Friends of Princeville are committed to fostering a vibrant and sustainable community for all owners and residents of Princeville. Through clear communication, active advocacy, and community engagement, we aim to protect the integrity, value, and future of our special community. Our website reflects the natural beauty of Kauaʻi and the place we are working to preserve and improve.
Sources and references
S3: SOS Hui archive. Search “Schulz”; April 22, 2025 Earth Day
S4: Candidate forum transcript, 50:57–54:50;
S5: Mull-White re HLTA and ALTA Motion for Leave to File an Amici Curiae Brief (091426).pdf, filed September 14, 2026, appellate cases CAAP-25-0000609 and CAAP-25-0000862, Docket 146.
S6: HRS §421J-5(e), planned-community board meetings and conflict disclosure. Official Legislature text checked September 27, 2026.
S7: Supplied Conflict of Interest Policy.PDF, PHCA Policies of the Board of Directors, sections B.3, C.1–3, and D.
S8 — editorial legal reference: HRS §414D-150, director conflict of interest, especially subsections (a), (c), (d), and (f).
S9 — complaint locator only: Supplied Mull-White re R52 & R59 Motion with only Exhs 1 & 2.pdf, defendant’s motion filed August 18, 2025, Docket 1219, case 5CCV-21-0000063. References the original June 24, 2021 complaint and includes trial findings.
S10: Supplied 2021-06-24 [001] Complaint; Summons.pdf, filed June 24, 2021, Docket 1, case 5CCV-21-0000063. Printed/PDF p. 3, paragraphs 10–11; p. 7, paragraphs 40–41; pp. 8–9, requested relief.
S11: Supplied [482] Motion for Leave to File First Amended Complaint.pdf, filed July 25, 2023, Docket 482, same case. Exhibit 1 is the proposed marked-up amended complaint: printed pp. 3–4/PDF pp. 18–19, paragraphs 9–15; printed p. 14/PDF p. 29, paragraphs 83–85; printed p. 18/PDF p. 33, paragraphs 112–115.
E1: Bernard Markowicz firsthand recollection
E2: Bernard Markowicz account of another person’s report.
***
Comments