Land auction involving Facebook CEO gets court’s OK

LIHUE >> A retired University of Hawaii professor Tuesday bid nearly $2.2 million to wrest 2 acres of land on Kauai from a few hundred family members in a forced court auction initiated partly by Facebook’s billionaire CEO Mark Zuckerberg.

The bid by Carlos Andrade was confirmed by state Circuit Court Judge Kathleen Watanabe moments after a final round of bidding in which Andrade, who bid through an attorney, topped competing bids by phone from a cousin, Kauai-born London attorney Wayne Rapozo, outside the courtroom.

Rapozo, in an email, called the result a distortion of good-faith use of the legal system.

“I want our kupuna to know their legacies matter, and I want (their) children to know that there is nobility in a principled defense even if painful and overwhelming,” he said.

Andrade was not available for comment.

Watanabe’s confirmation of the sale capped a divisive 2-1/2-year legal fight for four parcels totaling 2 acres within roughly 700 acres Zuckerberg bought in 2015 for about $100 million with plans to create an estate.

The small parcels are kuleana lands where initial private ownership was acquired by Hawaii citizens through the Kuleana Act of 1850. Such lands give owners rights that include crossing surrounding property for access.

Manuel Rapozo, a Portuguese sugar cane plantation worker, bought the parcels 125 years ago. After he died the land passed to his heirs and, over time, to subsequent generations of farther-flung relatives — an estimated 300 or so family members with fractional property interests.

Andrade, a great-grandson of Rapozo, partnered with Zuckerberg, who had bought stakes in the kuleana land from some owners, to file a quiet title lawsuit in 2016 to force other Rapozo family members to sell their fractional interests in the land at auction. Quiet title law allows such sales because it would not be possible to subdivide the property into equitable pieces for so many people.

At Tuesday’s hearing, attorneys representing a few Rapozo relatives opposed to Andrade’s bid alleged that Zuckerberg has helped Andrade with the expensive litigation, and asked that a sale not be confirmed.

“Confirming the sale at this point would be inequitable and imprudent,” said Dan Hempey, an attorney representing Shannon Buckner.

Wayne Rapozo said in his email that it’s a reasonable view that Andrade and Zuckerberg are cooperating and conspiring in the case generally and particularly in the bidding.

Andrade has previously said he cared for and lived on the property in recent decades while also paying property taxes, and that he wanted to acquire the parcels for his immediate family and his descendents while paying relatives for stakes. He also said he could not afford the quiet title action, so he initiated the litigation with Zuckerberg.

In early 2017, after heavy public criticism, Zuckerberg apologized and withdrew as a plaintiff, leaving Andrade to press ahead.

Shaylyn Kimura, a Kauai resident and great-great-granddaughter of Manuel Rapozo, called the sale approval a travesty.

“My children have grown up on the land,” she said. “We were just prevented by him from enjoying it.”

Tony Rapozo commented about Zuckerberg to family members watching the proceeding in the courtroom: “This guy is worth $60 billion. How you going outbid him?”

Harvey Cohen, an attorney representing Andrade, told the judge that opposition to the sale on Tuesday represented a vocal minority raising issues at the 11th hour.

“There’s no doubt that this is an incredibly complex case,” he said. “But having said that, I think it’s progressed in an orderly manner. I don’t think there’s been any shenanigans.”

Watanabe said some of the complaints from opponents had been previously addressed in court. She also noted that descendents of Manuel Rapozo will get a share of proceeds from the sale that are higher than the results from a preliminary auction in March at which Andrade’s bids totaled $1.06 million compared with $2.145 million Tuesday.

“This court is confirming the sale,” she said.

In the initial round of bidding in March, Wayne Rapozo submitted a high bid — $700,000 — on behalf of “holdout Rapozos” for the smallest of the four parcels, a 5,227-square-foot vacant house lot.

But on Tuesday, when higher bids were allowed, Cohen bid $735,000 with no response from Rapozo by phone through attorney Craig De Costa.

Andrade and Rapozo jousted with each other, through their attorneys, for two other properties that were bid up on Tuesday beyond previous high bids in March from Andrade, but Andrade’s new high bids prevailed: $500,000 for a parcel with a waterfall that topped a $300,000 March bid, and $450,000 for a parcel with a cottage that topped a $300,000 March bid.

The largest of the four parcels, 1.6 acres with taro fields, did not receive higher bids Tuesday, so Andrade’s prior bid of $460,000 was accepted.