A new civil complaint alleges actions taken by the Honolulu Authority for Rapid Transportation forced a trio of seafood- related businesses out of business in Chinatown.
Plaintiffs Kim Nguyen, owner of Mahal Kita Seafood Inc., and Vyna Nga Nguyen, owner of Tom’s Seafood Co. Inc. and LNV Seafood Inc., are siblings who jointly operated the businesses for over a decade.
They allege as the eventual landlord of the properties they occupied, HART’s rail construction and neglecting to fix costly plumbing and flooding issues in the city-owned buildings eventually forced the brother and sister to shutter their three small companies for good in 2018.
Now the Nguyens are suing the city, acting by and through HART, for over $2 million in damages and “just compensation” in connection to the loss of their livelihoods, the lawsuit indicates.
The HART board of directors is expected to review the lawsuit at its meeting today.
“We do think that we are entitled to damages associated with the business loss,” Mark M. Murakami, the plaintiffs’ attorney, told the Honolulu Star-Advertiser. “And we look forward to having a judge decide what damages (they) are entitled to for the lost business and loss of goodwill.”
On Thursday, HART declined to comment on the merits of the Nguyen civil complaint.
“HART appreciates the opportunity to respond, but at this time we are not able to discuss or comment on active litigation,” spokesperson Joey Manahan told the Star-Advertiser.
Filed in 1st Circuit Court on Jan. 16, the lawsuit notes the plaintiffs operated Tom’s Seafood and Mahal Kita, at 902 Kekaulike St. in Chinatown.
At the time, Tom’s Seafood was an importer and seller of uncommon and hard-to-find seafood and food products from throughout Asia. Mahal Kita operated a parking business next door to Tom’s Seafood at the property, the complaint says.
Mahal Kita’s income was intertwined with and primarily depended on Tom’s Seafood, where Tom’s Seafood’s customers would pay to park at Mahal Kita’s lot for quick visits to Tom’s Seafood to purchase seafood and other food products, the suit says.
Having been established for over a decade at the property and in a well- trafficked area, the lawsuit asserts Tom’s Seafood “was well-known among both the retail and wholesale customer base, the majority of whom either frequented Chinatown or were located in the Chinatown area.”
In or around 2010 the plaintiffs “were able to secure a loan to construct a custom million-dollar freezer warehouse, called Mahal Kita Freezer, at 924 Waiakamilo Road” in Honolulu, the lawsuit states.
Known as the Freezer, its construction was necessary to help Tom’s Seafood keep up with its expanding business demands and growing customer base, the suit alleges.
Over the following three years, nearly $3 million worth of seafood and food products was imported and stored at the Freezer for eventual sale at Tom’s Seafood. Since the Freezer did not supply products to any other retailers, Tom’s Seafood’s sales were the sole avenue for moving the Freezer’s volume of products, the lawsuit notes.
But in or around 2013, HART acquired the property for construction of the rail project, the suit says.
On or about April 1, 2013, amended leases for the property were executed with HART as the new landlord, according to the lawsuit. Under the amended leases, rent for both businesses increased substantially — over double the amount of rent they had paid previously for over a decade — with no explanation.
Other issues arose as well.
During HART’s tenure as landlord, the property experienced “serious plumbing issues that caused Tom’s Seafood to be flooded with sewage water numerous times, which caused closures of the business and loss of retail products,” the suit claims.
The plaintiffs’ suit alleges they “promptly notified HART of the regular floodings and plumbing issues and requested that HART remedy the problem.”
“Plaintiffs’ pleas fell on deaf ears, however, as HART did not send anyone to inspect and fix the issue,” the lawsuit reads. “Forced to take matters into their own hands, plaintiffs did everything they could to clean and air out the store.”
“Plaintiffs’ best efforts to remedy the issues would eventually prove to be futile in the face of HART’s indifference and crude, one-size-fits-all treatment of businesses that were in the path of the rail project,” the complaint states. “The stench of the flood waters hung around Tom’s Seafood’s store, polluting its environment and soiling the store’s commercial atmosphere.”
“The foul miasma drove away once-loyal customers one by one, causing both Tom’s Seafood and Mahal Kita to descend into further ruins,” the lawsuit asserts. “The repeated floodings also destroyed a significant amount of stocked retail products.”
The complaint claims Mahal Kita’s “cash flow correspondingly dwindled, as it primarily depended on Tom’s Seafood’s customers for its parking income.”
And once HART commenced construction, the rail-related work caused the size of Mahal Kita’s parking lot to be reduced by half, “which cut down on Mahal Kita’s monthly income significantly,” the lawsuit states.
By July 2014, HART issued an “urgent need” notice to vacate the property to the plaintiffs, giving them only 30 days to vacate the property. “At the end of August 2014, both Mahal Kita and Tom’s Seafood were evicted,” the complaint states.
The plaintiffs were forced to move Tom’s Seafood to 1717 N. King St. in Kalihi, “far from its long-established location at the property in Chinatown,” the suit states.
The plaintiffs say the move spelled the end for Tom’s Seafood, Mahal Kita and the Freezer.
“Mahal Kita was shuttered because no suitable property could be found that would enable plaintiffs to continue operating a parking lot to support Tom’s Seafood’s operation,” the lawsuit states.
By 2018, the Nguyen siblings say, they had no other choice but to shut down LNV Seafood and sell the Freezer.
“Before HART acquired the property and derailed plaintiffs’ lives, plaintiffs ran Tom’s Seafood successfully for over 12 years,” the civil complaint states. “Plaintiffs’ years of hard work disappeared in only a matter of months after HART condemned the property, drove up rent, and wreaked havoc on the daily operations of the businesses.”
But by 2020, HART contacted the Nguyen family regarding the relocation of Tom’s Seafood.
In November of that year, Vyna Nguyen “followed up with HART regarding plaintiffs’ claims for reimbursement and payment for losses and damages,” the suit states.
Around that time, too, HART conducted an expansive audit of its relocation services, the complaint states.
“In 2018, HART self- reported widespread deficiencies with its relocation practices to the Federal Transit Administration, concerning missing documents, vastly incomplete files, calculation errors in relocation payments, and general noncompliance with federal requirements,” the lawsuit reads.
“According to the FTA’s project management oversight consultant, Hill International, approximately 75% of HART’s relocation files were incomplete to the point that they could not be brought back into compliance,” the suit states.
And among other things, the lawsuit claims “HART’s relocation errors caused HART to return $4 million to the FTA which was supposed to be used for relocation assistance.”
As a result of Hill International’s findings, HART began rolling out “corrective action plans” for those negatively affected by insufficient and improper relocation assistance. Many of these “corrective action plans” required HART “to restart the relocation process for many constituents,” the complaint states.
In February 2021, HART noticed, “for the first time, that plaintiffs had not been provided advisory services as required” under federal law.
HART further informed the plaintiffs “that payments for their actual moving expenses were incorrect and that they might be entitled to more,” the suit states.
By February 2024, “plaintiffs demanded that HART reimburse them for the overpaid rent and pay the losses and damages they had suffered as a result of HART’s condemnation of the property, which forced the relocation and eventual shut down of their businesses.”
In May, HART denied the plaintiffs’ demand “but stated it remained open to discussion of amounts due to plaintiffs.”
In response, the plaintiffs’ lawsuit says they are entitled to “reimbursement of overpaid rents and also payment for losses and damages that their businesses suffered at the hands of HART, for a total amount in excess of $2 million.”
The HART board of directors’ meeting today is scheduled to begin at 11 a.m. at Ali‘i Place, 1099 Alakea St., Suite 150.
