AN elderly couple has been awarded a massive $1.8 million payout after a seven-year legal feud with their homeowner’s association.
Homeowners Doug Ridley and Sherry Shen will be paid out the largest known lawsuit amount in California against their HOA for fraud and elder abuse.
A judge recently decided that the Rancho Palma Grande Homeowners Association in Santa Clara had been deceptive regarding an abandoned well discovered beneath a couple’s condominium.
The judgment follows an extended legal dispute that started when Ridley and Shen, who purchased their three-bedroom residence in 1991 and had previously leased it, noticed water collecting in the crawlspace of their house in April 2018.
Based on records from The Mercury News, their homeowners association determined that the water leakage was originating from an unused well situated over 400 feet below their living area.
Ridley, 85, installed a sump pump under the house to fight the mold and awful smell that would “practically knock your head off” when the issue first started, but it was no use.
As the fungus grew worse, Ridley and Shen went to their HOA to beg for help – but they refused to look into the problem, insisting the home was still habitable.
Ridley and Shen were forced to dip into their retirement income to address their condo’s damages.
“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 told The Mercury News.
“The HOA would not investigate, so we paid to investigate.”
In September 2019, the retirees found the ground under the living room’s crawlspace had collapsed into a sinkhole.
But the collapse could’ve been preventable, according to Santa Clara County Superior Court Judge JoAnne McCracken.
McCracken said in her decision on February 26 that if the HOA “acted timely, the well could have been located and destroyed in a few months.”
Court documents showed the HOA had taken a few steps to address the issue by June 2018 but hadn’t acted with any urgency.
The HOA’s attorney, Steve Barber, claimed in a letter to the city and the water department in January 2019 that experts didn’t say there was a well under the house and instead blamed it on rain soaking into the ground.
Former HOA president Steve Moritz admitted in court he knew Barber’s letter was full of lies.
What is an HOA?
One in five Americans live in an area with a Homeowners’ Association – or HOA. But what exactly is it that they do?
- An HOA is a homeowner’s association – an organization that aims to maintain a clean and cohesive place to live for its residents.
- Entire neighborhoods, subdivisions, condominiums, family homes, or townhouses within “a planned development” will often make up an HOA.
- They also act as a governing body for tenants, who run and fund the HOA through monthly fees.
- Their principal aims are to keep the community functioning and visually appealing and to maintain property values.
- They primarily focus on common areas of a neighborhood, such as roads, parks, and pools – but may also stipulate what residents can do with their properties, such as yards and driveways.
- Often these restrictions enforce uniformity on properties, for example, ensuring most houses look the same and all driveways are clear of weeds.
- An HOA rulebook of covenants, conditions, and restrictions (CC&R) is distributed to all residents, and an elected volunteer board of directors enforces these regulations.
- Breaking these rules can result in penalties such as fines and even litigation – as most HOAs are incorporated and subject to state law.
- HOAs are often the subject of controversy, with some members feeling that the rules are too punitive and restricting, or that the leadership has too much power.
- But others like that HOAs give communities the power of self-governance, and can ensure a degree of harmony between residents.
Moritz repeatedly told Ridley the condo was still livable despite the known mold issues.
In January 2020, the HOA finally explored the sinkhole and found it had “no discernible bottom,” court documents said.
The well was discovered and, a month later, destroyed.
The hole in the floor has since closed up, but Ridley and Shen’s home is still uninhabitable due to the ruined floors.
One of Ridley and Shen’s attorneys, Mary Ann O’Hara, said the couple deserves their $1.8 million award for the stress they’ve dealt with over the past seven years.
“It’s really put them through the ringer emotionally, financially,” O’Hara told The Mercury News.
“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.”
The HOA and Moritz are responsible for the million-dollar payout, which includes lost rent, damages, and emotional distress.
The HOA has 60 days after February 26 to appeal the court’s decision.
