On 18 October 2016 Judge George C. Hernandez, Jr., of the Alameda County Superior Court issued an order granting a motion asking the court to approve a settlement of two lawsuits, originating 4 years ago, involving the governance of Berkeley senior housing cooperative Berkeley Town House (“BTH”).
Hernandez ordered plaintiff Jonathan Pool to file a proposed order within a week for Hernandez to sign, approving the settlement.
Once Hernandez signs the order, the settlement will require BTH and Pool to perform various services, with deadlines mostly measured in days after the day when the judge signs the approval:
- Within 10 days after the approval date, BTH is required to give Pool:
- A final financial statement for the fiscal year 2010–2011.
- The general ledger of each BTH account from April 2010 until the approval date.
- A disclosure of matters discussed during 9 closed meetings of the Board of Directors in 2010.
- Pool is allowed 20 days after receiving these documents to request any supplementary documentation of transactions in the general ledger.
- Within 20 days after such a request from Pool, BTH is required to provide the requested supplementary documentation.
- Within 60 days after the approval date, BTH is required to conduct a general meeting of its members at which the recreational use of the BTH building’s roof is discussed.
- Within 90 days after the approval date, BTH is required to change its rules to allow any 3 BTH members to have topics placed on the agenda of the Board of Directors.
- Within a “reasonable” time after the approval date, Pool is required to organize a meeting for BTH members with an expert about a report on the seismic condition of the BTH building and related issues.
- Within 60 days after the meeting organized by Pool, BTH is required to hold a meeting of its Board of Directors on seismic issues.
- By 31 March 2017, BTH is required to have its governing documents reviewed to ensure that they comply with the California Civil Code provisions on housing communities.
This order follows a hearing on 4 October and an opportunity for BTH members to submit comments to the court about the proposed settlement. The comments submitted in writing are part of the record of the litigation.
Pool filed the first lawsuit in March 2012, claiming legal violations by 7 directors and former directors and a former manager of BTH. Pool complained that they had wasted over $200,000 in illegal payments for botched construction by an unlicensed contractor, neglected credible warnings of possible seismic defects in the BTH building, failed to exercise required financial oversight, and violated numerous rights of BTH members. Several attempts were made to settle the litigation over 4 years. One of those attempts resulted in a dispute over a settlement offer, producing further litigation, in which the Court of Appeal ruled that the defendants had fraudulently accepted Pool’s offer while intending to violate its terms. This ruling led to a second lawsuit filed by Pool in July 2015.
Has this litigation taught lessons for dealing with future disputes? Acutely aware of conflict as a problem in housing communities, as the litigation was nearing its end a group of six BTH members and residents hosted a meeting of East Bay housing co-ops on the management, resolution, and prevention of conflict. Three local experts gave advice and answered questions from members of East Bay co-ops in the packed BTH dining room. Key points:
- Senior-only housing communities suffer from more conflict than average, casting doubt on the idea that conflict-prevention skills become stronger with age.
- To minimize the risk of conflict over the rules of a housing community, permit the membership to participate effectively in the formation of the rules.
- The more effective your institutions for internal dispute resolution are, the less likely are disputes to escalate into litigation.
- Resolutions of disputes do not finish the disputes. As time passes and conditions change, revisit the issues and adjust your responses to keep peace robust.
- When you resolve a dispute, don’t trust your memory: Put the agreement in writing.