2026-09-10 · Hawaii · Courts

A 200-unit Kona condominium association’s construction-defect claim settled for $15 million — and the money almost all came from insurance, not from the developer.¹

Association of Apartment Owners of Alii Cove v. SunStone Realty Partners X LLC, consolidated Nos. CAAP-22-0000040 and CAAP-22-0000263, Hawaii Intermediate Court of Appeals summary disposition order filed May 22, 2025. Unpublished.

The numbers

• Settlement of all claims in April 2020: $15 million, of which $14,301,916.30 was paid by insurance and $698,083.70 by a member of the developer entity.
• The developer then arbitrated contribution and indemnity against its general contractor. After nineteen days of hearings, it was awarded $8,351,848 in damages plus $1,252,777 in arbitration attorneys’ fees.
• The ICA affirmed confirmation of the award, rejecting excess-of-powers, misconduct and evident-partiality challenges, and affirmed in part and vacated in part the post-confirmation fee and cost order.

Why a developer-versus-contractor case matters to an association

Because it is a rare public data point on two things Hawaii associations negotiate in the dark: what a construction-defect claim on a 200-unit project is actually worth, and where the money comes from.

1. AOAO of Alii Cove v. SunStone Realty Partners X LLC, Nos. CAAP-22-0000040 and CAAP-22-0000263, Hawaii ICA summary disposition order, May 22, 2025 ↩
2. HRS § 514B-143, Insurance ↩
3. HRS § 514B-162, Arbitration (carve-outs at subsection (b)) ↩