Los Angeles Dodgers star Shohei Ohtani and his agent, Nez Balelo of CAA, have been sued for allegedly forcing out business partners in a $240 million luxury housing development in Hawaii.
Real estate developer Kevin Hayes and real estate agent Tomoko Matsumoto of Hapuna Realty filed a complaint last Friday in Hawaii’s circuit court, accusing Ohtani and Balelo of tortious interference with contractual and business relations and unjust enrichment.
As Hayes and Matsumoto tell it, they spent more than a decade planning and developing a luxury project, The Vista at Mauna Kea Resort, on Hawaii’s big island. They claim Ohtani was brought into the deal mainly for his fame and “branding value.” But Balelo is depicted as exploiting that “celebrity leverage” to try to extract concessions and “destabilize and ultimately dismantle [Hayes’ and Matsumoto’s] role in the project.”
In that same vein, Hayes and Matsumoto contend their contractual rights were “trampled” by Ohtani and Balelo through their alleged use of “strong-arm tactics.” The duo says that Ohtani and Balelo “used threats” along with “baseless legal claims” to wrongfully interfere with Hayes’ and Matsumoto’s business dealings.
The complaint contends that Balelo “issued an ultimatum” to Kingsbarn Realty Capital, a business partner of Hayes and Matsumoto, that it “remove” the pair from the project “or else face retaliatory litigation.” Kingsbarn is depicted as “succumbing to this unlawful coercion,” which has allegedly denied Hayes and Matsumoto “millions of dollars in economic entitlements.”
As the plaintiffs tell it, “Kingsbarn began capitulating to Balelo’s every whim,” including by excluding Hayes from key meetings and making important decisions about operations without his input. Kingsbarn, which is neither a plaintiff nor defendant in the case, is depicted as being “more concerned about preserving its relationship with Ohtani than honoring its obligations to its business partners.”
Hayes and Matsumoto also complain that other than a “brief phone call” they were “given no warning” and “no opportunity to properly respond to their wrongful and pretextual termination.” The complaint details a so-called “coordinated ambush” last month when “Kingsbarn summoned Hayes and Matsumoto to a Zoom call” and “abruptly” informed the two that they were out.
In a statement, a spokesperson for Kingsbarn called the allegations against Ohtani and Balelo “completely frivolous” and “without merit.” The spokesperson also said Kingsbarn “takes full responsibility for its actions” regarding Hayes and Matsumoto, adding “the Mauna Kea project is world class, and we look forward to welcoming our final group.”
Ohtani’s role in the alleged misdeeds is hazy, and he might even be a victim. One of the plaintiffs’ attorneys, Joshua I. Schiller of Boies Schiller Flexner, said in a statement to Sportico that “it’s uncertain at this time whether [Balelo’s] alleged contractual interference and misdeeds were even known to Mr. Ohtani at the time, or whether he may have himself been misled by Mr. Balelo—but we aim to find out.” This statement suggests that the plaintiffs may hope that Ohtani points the blame at his agent, and boost Hayes’ and Matsumoto’s case against Balelo.
Last year, The Wall Street Journal reported on Ohtani being the first resident of the luxury complex. Ohtani was depicted as “planning to design and build a roughly 5,000-square-foot home with ocean views in Hapuna Estates,” billed as a new gated community within the resort. His house would sit on a 1.1-acre lot that “overlooks the eighth hole of a golf course.” Other lots on the complex were said to be priced “around $4.9 million and up.” The Associated Press reports the houses average $17.3 million each.
Ohtani and Balelo will answer the complaint and seek its dismissal. Expect them to deny the allegations and offer additional facts that complicate the situation. It’s clear there was a falling out between these business partners, but the complaint only tells one side of that falling out. Ohtani and Balelo might offer their own set of accusations against Hayes and Matsumoto.
Ohtani and Balelo will likely also counter the idea that disagreements about a business venture gave rise to actionable claims. It’s not uncommon for investors and other figures in a real estate deal to enter and leave a project, especially one of this value. Sometimes harsh words exchanged, but that doesn’t mean a law was broken.
Ohtani, 31, is having another stellar season for the Dodgers, which are in first place in the National League West. He’s tied with Philadelphia Phillies designated hitter Kyle Schwarber for first in the National League in home runs (42) and he leads in OPS (1.013) and runs (112). Ohtani is a five-time All-Star and three-time MVP. A couple of years ago, Ohtani signed a 10-year, $700 million contract with the Dodgers, with $680 million deferred.
Eben Novy-Williams contributed to this story.
(This story has been updated with a statement from Kingsbarn Realty Capital.)
