KAILUA, KONA, Hawai'i — Three Big Island residents who successfully sued to stop a luxury subdivision from being built near Kealakekua Bay say settlement negotiations with the developer have reached an impasse.

Robert D.S. Kim, an attorney representing Charles Flaherty Jr., Patrick Cunningham and Michele Wilkins, said Wednesday that the sticking point is Hawai'i County's unwillingness to adopt all or portions of a 2003 ruling by Circuit Judge Ronald Ibarra.

Saying the Hokuli'a development violated state law on agricultural land use, Ibarra ordered construction to cease until the agricultural land was reclassified by the state Land Use Commission.

The county and Hokuli'a developer 1250 Oceanside Partners are appealing Ibarra's ruling.

"The requirement to preserve the judge's thoughtful and well-reasoned decision is a cornerstone to any proposed settlement," Kim said in a letter to John De Fries, chief executive officer of 1250 Oceanside Partners.

"My clients ... are unwilling to forego this important ruling as it involves protection of our agricultural lands," Kim said.

De Fries said the settlement offer was made in July.

"In the three months that have since passed, we have not received any counteroffers from other parties, and now our offer has been formally rejected by the three plaintiffs who initially were interested in pursuing settlement discussions," De Fries said.

Kim told De Fries in the letter that settlement discussions could continue if the developer agreed to submit the matter to the Land Use Commission.

"Going to the LUC is currently under serious consideration, but we've not made a final decision as yet," De Fries said.