Moloaa Farms owns almost 600 acres of undeveloped property. Jeffrey Lindner is the owner of Moloaa. Lindner is also the co-owner and manager of Green Energy Team.
Through Lindner, Moloaa and Green discussed the development of a closed-loop biomass power plant at the property, which resulted in Moloaa granting to Green an option to lease Moloaa’s acreage. Attached to the option agreement was an executed, proposed lease form that included many of the leasing terms, including escalating annual base rents.
But the lease form omitted several critical items, such as a commencement date, percentage rent generated by the harvest of trees from the property for use in the power plant, and other essential provisions.
Green timely exercised its lease option and notified Moloaa. Moloaa responded by preparing and executing a lease largely in the form of the proposed lease that was attached to the option agreement. Terms that were blank in the form remained blank in the lease Moloaa prepared.
This started a spirited discussion among LL and T about the missing terms. Moloaa argued that the lease obligations commenced at the moment Green exercised the option. Green claimed that exercise of the option merely started a 30-day period in which LL and T were supposed to finalize the terms. And that neither the lease form attached to the option agreement nor the lease executed by Moloaa and delivered to Green were enforceable.
So Moloaa filed a lawsuit for breach of contract and specific performance.
The circuit court found that the parties never intended to be bound by the form lease attached to the option agreement, and that it was used only to demonstrate to commercial lenders that acreage is available if other plans did not work out. The trial court entered a directed verdict for Green.
Moloaa appealed.
The Court of Appeals disagreed, finding that the lease properly identified the parties, reasonably described the property to be leased, and contained sufficient pricing terms for rent. Finding those minimum terms enough to form a binding lease, the Court vacated the trial court’s order.
Green appealed, claiming that the form lease attached to the option agreement presents little more than an agreement to agree. Which is unenforceable.
The Supreme Court determined that the proposed lease provides no mechanism for determining a commencement date, and as such is ambiguous. When an ambiguity exists, courts are entitled to consider parol evidence to explain the intent of the parties.
The trial jury – finders of fact while the Judge handles matters of law – took four days to conclude that the parties intended to continue lease negotiations after the option was exercised, to determine the start date and percentage rent. And importantly, that LL and T failed to reach an agreement on those key terms.
As such, the lease is hardly an unambiguous representation of the final and complete agreement of LL and T.
Since there was no “meeting of the minds” between LL and T, the lease must fail and the verdict and judgment of the trial court is affirmed. Green wins; Moloaa loses. Or truly, both parties lose if they originally intended to enter into a commercial lease.
See Moloaa Farms LL v. Green Energy Team LLC; Supreme Court of Hawaii Case No. SCWC-19-0000470; September 18, 2025: https://law.justia.com/cases/hawaii/supreme-court/2025/scwc-19-0000470.html.
Stuart A. Lautin, Esq.*
* Board Certified, Commercial and Residential Real Estate Law, Texas Board of Legal Specialization
Licensed in the States of Texas and New York