Berkeley, California, 6 September 2012
A Berkeley senior housing cooperative’s insurance company would pay to repair defective waterproofing construction, under a draft of a lawsuit settlement made public on Tuesday. The co-op would also commission an engineering study of its building’s seismic condition, seek to change its management, and agree to submit future related disputes to binding arbitration.
The proposed settlement details were disclosed in a filing by Fred M. Feller, a Berkeley attorney representing Berkeley Town House Cooperative Corporation and seven of the defendants in a lawsuit filed in Alameda County Superior Court in March. The plaintiff in the suit, co-op member Jonathan Pool [the author and owner of this blog], claims that negligent contracting by directors and the former manager of the co-op caused losses of over $200,000 in failed waterproofing and exterior construction work by Danville contractor Garry Secrest, working with no license, no insurance, no building permit, and no contract. The suit also claims that the co-op’s board of directors has ignored expert warnings of possible seismic defects in the co-op’s nine-story 1960s building, illegally mismanaged the co-op’s finances, and violated numerous member rights.
In the settlement draft made public by Feller, the defendants would not admit any liability, but the co-op’s insurance company would pay for “necessary repairs” to Secrest’s work. The co-op would make available to all its members a new seismic study of the building by El Cerrito structural engineer Maryann Phipps, president of Estructure. The board would seek to contract out the co-op’s management to an experienced firm and to accept director training offered by the firm. The mediator who helped bring about the settlement would act as an arbitrator in any related future disputes. Pool, who has been managing two unofficial websites about the co-op, would return records to the co-op that he had obtained during his prior service on the board of directors and allow the co-op to take over domain names and web content related to the co-op for use on the co-op’s own website. Pool would label his own websites related to the co-op as unofficial, would not claim to represent the co-op, and would obey applicable rules and laws. The defendants’ insurer would repay Pool’s contribution to the cost of the mediation, and, if the insurer didn’t agree voluntarily to pay for Pool’s attorney fees and other legal costs, Pool would seek a court order for their reimbursement.
San Francisco attorney David H. Schwartz, representing Pool, stated in a filing yesterday that the Feller draft covered the agreed issues, but departed from some of the agreed terms. A tentative settlement had emerged from a one-day June mediation session with retired Alameda County Superior Court Judge Richard Hodge, but, according to Schwartz, the Feller draft “includes terms that were not discussed or agreed to at the mediation and limits certain other terrns to a more narrow application than was agreed to”. The attorneys also sparred on whether a settlement agreement would be possible without court approval and an opportunity for the co-op’s 60 members to comment on it beforehand.
Trial judge Steven A. Brick issued a tentative order yesterday postponing the lawsuit’s next hearing from 12 September to 19 November and setting forth criteria for approval of a settlement. The order also demanded that the co-op explain why it had missed a filing deadline, or face sanctions. The co-op had filed a cross-complaint against Secrest on 9 May, but more than the allowed 30 days had passed and the co-op had not filed proof that it had served its complaint on Secrest.
Update, 12 September 2012: On 10 September 2012, proofs of service of the cross-complaint against Garry Secrest and American Pacific Coatings, Inc., dated 18 and 19 June 2012, were filed with the Court.
The lawsuit, “Jonathan Pool vs. Berkeley Town House Cooperative Cooperation, Almalee Henderson, Judith Wehlau, Charles Tuggle, Katherine Miles, Nancy Epanchin, Raymond Dirodis, Rita Zwerdling, Cheryl L. Samson” (case RG12620088), was filed on 6 March. Public documents in this case include the following. Those containing significant substantive information are marked “*”.
Update, 13 September 2012: The outline below was current as of 6 September 2012. Another entry contains a complete, up-to-date outline of the documents.
The public records are also available from the Superior Court at its case website.
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To avoid proliferation of similar content, my news and others’ comments on this topic are collected in this one entry. Comments below were made in response to the then-current version of this entry.
Earlier posting dated 23 July 2012:
Judge orders Berkeley co-op litigants to meet after “tentative settlement”
On 23 July 2012, an Alameda County judge ordered all parties in a Berkeley senior housing cooperative lawsuit to meet and then appear before him in September.
Judge Steven A. Brick of the Alameda County Superior Court issued the case management order in a suit brought by a shareholder of Berkeley Town House Cooperative Corporation against the corporation and 8 of its present and former officials. The order canceled a case management conference scheduled for 25 July, scheduled a new one for 12 September, and told the parties to meet and prepare a joint statement in advance. Brick stated that he had read and appreciated a statement submitted by the plaintiff, which reported that the parties had reached a “tentative settlement” in a mediation session on 28 June before retired judge Richard Hodge in San Francisco. Brick reminded the attorneys, however, that, because the lawsuit was a “derivative action”, the parties will be required to obtain the court’s approval of any settlement. A derivative action is one brought by a shareholder to enforce the corporation’s rights against third parties.
The lawsuit, “Jonathan Pool vs. Berkeley Town House Cooperative Cooperation, Almalee Henderson, Judith Wehlau, Charles Tuggle, Katherine Miles, Nancy Epanchin, Raymond Dirodis, Rita Zwerdling, Cheryl L. Samson” (case RG12620088), was filed on 6 March. The plaintiff’s 224-page complaint, as summarized in his statement, alleges that “defendants wrongfully hired a contractor named Garry Secrest to perform maintenance and repair work at the property which ultimately failed, at a cost to the cooperative in excess of $224,000”, “have wrongfully failed to take necessary steps to review and determine the conditions for seismic safety at the property”, and “have violated numerous procedural requirements” of California laws and the corporation’s governing documents. The defendants responded that they “dispute all of plaintiff’s allegations”.
On 9 May, the corporation filed a cross-complaint against Secrest and a Secrest firm, American Pacific Coatings, Inc., seeking indemnification for all judgments against the corporation and its legal costs.
Public documents in this case include the following. …