SANTA CLARA — It’s been almost seven years since water started accumulating within the crawlspace of Doug Ridley and Sherry Shen’s rental — an alarming discovery that led to the uncovering of an deserted artesian effectively underneath their front room that will wreak havoc on the couple’s lives.
What adopted was a years-long authorized battle between Ridley and Shen — retirees who deliberate to make use of the rental revenue from the rental to journey and go to relations in the UK and Taiwan — and the Rancho Palma Grande Householders Affiliation. However late final month, Santa Clara County Superior Courtroom Choose JoAnne McCracken dominated that the HOA had breached its duties, “engaged in extensive deception,” and violated the Elder Abuse Act, in addition to a state regulation regulating HOAs.
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Now, the HOA and its former president, Steve Moritz, will likely be liable for greater than $1.8 million in damages — a quantity that one of many couple’s attorneys, Terry O’Hara, mentioned is the biggest identified award in California in opposition to an HOA for fraud and elder abuse.
“This whole thing is characterized by denial, delay and simply red herrings left and right,” Ridley, 85, mentioned in an interview.
Ridley bought the rental in 1991 and lived there for years till he and Shen determined to lease it out in 2015. The three-bedroom, two-bath house is considered one of greater than 100 condos in Rancho Palma Grande, which was developed across the early Eighties.
The saga that has consumed a lot of Ridley and Shen’s lives started in April 2018 when their tenants on the time noticed a mirrored image in a flooring grate from water accumulating within the crawlspace. The next month, the HOA realized that the town and the Santa Clara Valley Water District believed the water was coming from an deserted artesian effectively, in accordance with court docket paperwork.
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The more-than-400-feet-deep effectively, which has since been destroyed, was a remnant of Silicon Valley’s agricultural days, offering irrigation for orchards and farms. Many related wells within the space have been destroyed earlier than being developed over, however the one beneath Ridley and Shen’s front room was forgotten.
When the water first appeared, Ridley put in a sump pump underneath the rental that bailed 15,000 to 17,000 gallons of water a day. In the meantime, mildew and a powerful odor that he mentioned would “practically knock your head off” once you walked within the entrance door started to develop. The bottom underneath the crawl house in the lounge finally collapsed right into a sinkhole, which was found in September 2019.
In her Feb. 26 resolution, McCracken wrote that if the HOA had “acted timely, the well could have been located and destroyed in a few months.”
However the HOA, regardless of warnings from their attorneys that they wanted to instantly deal with the water as a result of it might trigger “exponential costs,” didn’t act. The HOA didn’t present a map from Valley Water exhibiting that there is perhaps a effectively underneath the rental to any of its contractors or consultants, in accordance with the choice. And a $7,104 proposal from a water restoration firm to dry out the crawl house in an effort to cut back the danger of mildew and fungus rising was rejected over the price, Moritz revealed at trial.
McCracken wrote in her resolution that by June 2018, the HOA had taken “some steps to address” the difficulty however known as them “inadequate and ineffectual and reflected a lack of urgency by the HOA.” After August 2018, nonetheless, the choose mentioned the HOA’s conduct “involved gross negligence, deception and a breach of the duties they owed to them.”
By the tip of 2018, McCracken concluded that the HOA had no intent to find or destroy the effectively.
In January 2019, Steve Barber, the HOA’s newly employed lawyer, falsely claimed in a letter to the town and Valley Water that no consultants they contacted gave “any credence to the hypothesis that there is an abandoned well” underneath the rental. As an alternative, he claimed that there was a “consensus” that the water within the crawl house was brought on by a excessive water desk — an assertion that one Valley Water worker known as “kooky” at trial.
Courtroom paperwork present that Moritz testified he knew Barber’s letter “was replete with falsehoods” and acknowledged that he falsely claimed there wasn’t mildew underneath the unit. The previous HOA president had instructed Ridely a number of occasions that the rental was liveable regardless of the identified presence of mildew.
In March of 2019, extra flooding occurred within the crawl house — this time worse than the preliminary flooding almost a yr prior — and the sump pump struggled to maintain up. The water was discharged from a effervescent gap, and consultants warned the HOA that it would proceed rising. The sinkhole was lastly found in September of 2019, and Moritz instructed different HOA board members that he believed the couple or their attorneys created the outlet, in accordance with court docket paperwork.
In January of 2020, the HOA lastly lower a gap in the lounge flooring above the sinkhole to discover — one thing that had been instructed to them in 2018. The opening was described in court docket paperwork as giant and with “no discernible bottom.” After two hours of excavation with a vac-truck, the effectively was found and subsequently destroyed the next month.
It’s been over 5 years for the reason that effectively was destroyed, and Ridley and Shen’s rental continues to be uninhabitable. Whereas the outlet within the flooring has been closed up, the subfloor is uncovered throughout the rental, and the yet-to-be-installed hardwood flooring sits in packing containers. A number of the baseboards have been torn out in an effort to eliminate the mildew that infiltrated the rental.
Ridley doesn’t know when the rental will likely be livable once more. He believes there’s a month’s price of labor to be accomplished, however the HOA has continued to tug its ft. The court docket order for mildew remediation was initially issued in September 2022.
O’Hara known as the state of affairs a “systemic failure at all levels” and likened the case to David and Goliath.
“We’re not fighting against just this HOA board, we’re fighting against the lawyers that are representing them, we’re fighting against the three insurance companies that are backing them and paying for the defense,” he mentioned. “It’s a multi-billion industry that we’re up against.”
The entire ordeal has put a pressure on Ridley and Shen’s retirement nest egg because it has price them a “significant fraction” of their retirement revenue.
“I had to sell things I wouldn’t have dreamt of selling — stocks and stock options and whatever had to go to fund the work that we were doing,” Ridley mentioned. “The HOA would not investigate, so we paid to investigate.”
However the $1.8 million — which incorporates misplaced lease, punitive damages and the price of emotional misery — may not be going to Ridley and Shen’s checking account any time quickly. The HOA has 60 days to attraction the choice, a transfer that will successfully tie the cash up in court docket. The $1.8 million, although, will gather curiosity within the meantime. Attorneys for the HOA and Moritz didn’t reply to a request for remark.
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Mary Ann O’Hara, one other considered one of Ridley and Shen’s attorneys, mentioned that whereas the $1.8 million may look like some huge cash, the value tag isn’t definitely worth the toll it took on them.
“It’s really put them through the ringer emotionally, financially,” she mentioned. “And it’s nothing that this hard-working couple should have to go through after working between the two of them over 100 years to deserve their retirement in peace and to have it disrupted in this way, they never would have chosen that.”
