Homeowner's Townhome Was Scheduled to Be Torn Down and Rebuilt

Homeowner used her unit for rental income. Because of an upcoming construction project, Edgewater Isle Homeowners Association repeatedly told homeowner not to rent that unit during a specified timeframe. Homeowner wrote the Association and received limited information return. Homeowner went to Board meetings and again did not receive absolute answers. Construction dates kept slipping and as a result, homeowner's unit was vacant for over one year, depriving homeowner of rental income.

Homeowner's suit was settled for an intial sum of at least $20,000 plus monthly payments of $1,200 for over one year to homeowner and two other owners. The HOA's insurance carrier paid the first $20,000, and the remaining monthly payments were paid directly by Edgewater Isle North Homeowners Association.

 

WILLIAM J. PETERS
(SBN: 104787)
GORDON & REES LLP
Embarcadero Center West
275 Battery Street, Suite 2000
San Francisco, CA 94111
Telephone: (415) 986-5900
Facsimile: (415) 986-8054

Attorneys for Plaintiff KAREN KLEIN

 

Filed San Mateo County October 11, 1994


Summons Issued

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN MATEO

KAREN KLEIN ,

Plaintiff

v.

 

EDGEWATER ISLE HOMEOWNERS
ASSOCIATION, a California Corporation;
PELICAN MANAGEMENT GROUP, a
California Corporation; and DOES 1-25,
inclusive

 

Defendants.

Case No. CIV420339

COMPLAINT FOR BREACH OF 1 ) CONTRACT, BREACH OF FIDUCIARY DUTY, NEGLIGENCE, FRAUD-
INTENTIONAL MISREPRESENTATION,
FRAUD-NEGLIGENT MISREPRESENTATION, FRAUD- NONDISCLOSURE OF KNOWN FACTS, INTENTIONAL INTERFERENCE WITH PROSPECTIVE ECONOMIC
ADVANTAGE, NEGLIGENT
INTERFERENCE WITH PROSPECTIVE
ECONOMIC ADVANTAGE.

Plaintiff KAREN KLEIN alleges as follows:

THE PARTIES

1. Plaintiff KAREN KLEIN is an individual residing in the County of San Luis Obispo, State of California.

2. Defendant EDGEWATER ISLE HOMEOWNERS ASSOCIATION is, and at all times relevant hereto, was a non-profit corporation organized and existing under the laws of the State of California, with its principal place of business in the city and county of San Mateo, California.

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3. Defendant PELICAN MANAGEMENT GROUP (hereinafter PMG) is, and at all times relevant hereto, was a corporation organized and existing under the laws of the State of California, with its principal place of business in the city and county of San Mateo, California.

4. The true names and capacities, whether individual, corporate, associate or otherwise, of defendants, DOES 1-25, inclusive are unknown to plaintiff at this time, and plaintiff therefore sues said defendants by such fictitious names. When the true names and capacities of said defendants are ascertained, plaintiff will move this court for leave to amend this complaint accordingly.

GENERAL ALLEGATIONS

5. Plaintiff is a member of the Edgewater Isle Homeowner Association, and the owner of a condominium located in Building 18 of the Edgewater Isle North development, commonly known as at 1925 Vista Cay, San Mateo, California, and which property is hereinafter referred to as the "Subject Property".

6. Plaintiff is informed and believes, and therefore alleges that defendant EDGEWATER ISLE HOMEOWNERS ASSOCIATION, is the managing association for the development known as Edgewater Isle North (hereinafter referred to as "Development"), which is administered through an elected Board of Directors.

7. Plaintiff is informed and believes, and therefore alleges that defendant PMG is an agent, servant or employee of defendant EDGEWATER ISLE HOMEOWNERS ASSOCIATION, hired to act on behalf of defendant EDGEWATER ISLE HOMEOWNERS ASSOCIATION in the maintenance, repair, replacement, restoration, operation and management the of the cornman areas of the development.

8. The contractual relationship between, and the duties, responsibilities, and powers : of the plaintiff and defendants and DOES 1-25 regarding the Subject Property and Development is defined in the provisions of the Enabling Declaration Establishing a Plan for Condominium Ownership (hereinafter "CC&R's") and EDGEWATER ISLE HOMEOWNERS ASSOCIATION bylaws (hereinafter "Bylaws"). The CC&R's and Bylaws are attached hereto as Exhibits A & B.

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9. The maintenance, repair, replacement, restoration, operat ion and management of the common areas of the Development, including those areas surrounding the Subject Property, are vested with the defendant EDGEWATER ISLE HOMEOWNERS ASSOCIATION in accordance with the provisions of the CC&R's and Bylaws.

10. Common areas are defined in the CC&R's and include, but are not limited to land, garage and carport areas, exterior stairs, patios, bearing walls, interior stairs, columns, ceiling joists, subfloors, roofs and foundations.

11. Plaintiff is informed and believes, and therefore alleges that the common areas of the Subject Property including, but not limited to the interior walls, wall cavities, attic, roof, structural hold-downs, foundation and land beneath the Subject Property require reconstruction.

12. Plaintiff is informed and believes, and therefore alleges that the reconstruction of the Subject Property will, at a minimum require demolition of substantial portions of the Subject Property, excavation and recompaction of land, repair or replacement of foundations, framing, window siding, trim, roofing, stucco, and interior walls.

13. Plaintiff is informed and believes, and therefore alleges that the reconstruction of the Subject Property as described in Paragraph 11 was scheduled to begin on or about June 1, 2001.

14. Plaintiff is informed and believes, and therefore alleges that the reconstruction of the Subject Property described in Paragraph 11 is estimated to take twenty-four weeks to complete.

15. The reconstruction of the Subject Property as described in Paragraph 11 did not begin on June 1, 2001, or anytime thereafter.

16. Beginning in September 2000 and continuing to date, plaintiff informed defendants EDGEWATER ISLE HOMEOWNERS ASSOCIATION, PMG, and DOES 1-25 on numerous occasions, both orally and in writing, of the following: 1) the importance of the Subject Property to her continued economic well being; 2) the necessity to rent the Subject Property as much as possible in order to maintain an income

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stream; and, 3) the difficulty she was having in renting, leasing, or continuing existing lease and rental agreements of the Subject Property to prospective and/or existing tenants, because of her inability obtain information necessary to disclose the future availability, status or condition of the Subject Property.

17. Beginning in September 2000 and continuing to date, p1aintiff made numerous oral and written requests to defendants EDGEWATER ISLE HOMEOWNERS ASSOCIATION and PMG, and DOES 1-25 for accurate and timely information regarding the actual scope, start date, and expected duration of the reconstruction of the Subject Property in order to disclose this information to prospective tenants.

18. The defendants and DOES 1-25 have repeatedly ignored plaintiffs requests for the information as described in Paragraph 17.

19. Plaintiff is informed and believes, and therefore alleges, that at all times mentioned herein, unless stated otherwise, the defendants, DOES 1-25, and each of them, were acting as an agent, servant or employee of each other and was acting within the course and scope of said agency and/or employment. The defendants, and each of them, with full knowledge and advice expressly and impliedly ratified the acts of each other in all respects and adopted in his or her own acts the acts of others and each of them as set forth in detail hereinafter.

FIRST CAUSE OF ACTION: (Breach of Contract)

Plaintiff alleges against defendants EDGEWATER ISLE HOMEOWNERS ASSOCIATION, PMG and DOES 1-25:

20. Plaintiff realleges and incorporates herein by reference, as though separately set forth herein, the allegations contained in paragraphs 1-19 above, inclusive.

21. The CC&R's and Bylaws (hereinafter "Contract") constitute a valid contract in writing between plaintiff and defendants.

22. Plaintiff has, in good faith, performed all of her obligations and duties as a member of the BillA under the terms and provisions afthe Contract.

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23. In violation of their promises and obligations under the Contract, the defendants and DOES 1-25 have breached the Contract by, among other things, failing to maintain, repair, replace, and restore the common areas of the Subject Property, as described in Paragraphs 11 and 12.

24. As a direct and proximate result of defendant's breach of the Contract, plaintiff has been damaged in an amount in excess of the jurisdictional minimum of this court, said amount to be determined at trial. WHEREFORE, Plaintiff prays for judgment against the defendants, and each of them, as set forth below.

SECOND CAUSE OF ACTION (Breach of Fiduciary Duty)

Plaintiff alleges against defendants EDGEWATER ISLE HOMEOWNERS ASSOCIATION, PMG and DOES 1-25:

25. Plaintiff realleges and incorporates herein by reference, as though separately set forth herein, the allegations contained in paragraphs 1-19 above, inclusive.

26. By reason of their special relationship, defendants and DOES 1-25 have a fiduciary relationship to the plaintiff homeowner.

27. At all times relevant to this Complaint, defendants and DOES 1-25 had a fiduciary duty to the plaintiff to exercise undivided loyalty, act in good faith and trust, hold special confidences, and exhibit candor in all matters regarding the Subject Property.

28. At all times relevant to this Complaint, defendants and DOES 1-25 had a fiduciary duty to the plaintiff to maintain, repair, replace, restore and reconstruct the common areas of the Subject Property, as described in Paragraphs 11 and 12.

29. Defendants and DOES 1-25, breached their fiduciary duties as described in Paragraph 27 by ignoring plaintiff's numerous and repeated requests for accurate and timely

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information regarding the actual scope, start date, and expected duration of the reconstruction of the Subject Property.

30. Defendants and DOES 1-25, breached their fiduciary duties as described in Paragraph 27 by failing to maintain, repair, replace, and restore the common areas of the Subject Property, as described in Paragraphs 11 and 12, after having been notified by the plaintiff of the difficulties as described in Paragraph 16.

31. As a direct and proximate result of the defendants' and DOES 1-25 breach of fiduciary I duties as described in Paragraphs 29 and 30, plaintiff has been damaged in an amount in excess ! ofthe jurisdictional minimum of this court, said amount to be determined at trial. ! WHEREFORE, Plaintiff prays for judgment against the defendants, and each of them, as set forth below.

THIRD CAUSE OF ACTION (Negligence)

Plaintiff alleges against defendants EDGEWATER ISLE HOMEOWNERS ASSOCIATION, PMG and DOES 1-25:

32. Plaintiffrealleges and incorporates herein by reference, as though separately set forth herein, the allegations contained in paragraphs 1-19 above, inclusive.

33. The defendants and DOES 1-25, owed a duty to plaintiff to 1) maintain, repair, replace, restore and reconstruct the Subject Property, as described in Paragraphs 11 and 12, and 2) to timely communicate accurate information regarding the actual scope, start date, and expected duration of the reconstruction of the Subject Property.

34. The defendants and DOES 1-25, breached their duty by 1) failing to maintain, repair, replace, restore and reconstruct the Subject Property, as described in Paragraphs 11 and 12, beginning on or about June 1,2001 or anytime thereafter, and 2) failing to respond to plaintiffs repeated requests for accurate information regarding the actual scope, start date, and expected duration of the reconstruction ofthe Subject Property.

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35. As a direct and proximate result of defendants and DOES 1-25 negligence plaintiff has been damaged in an amount in excess of the jurisdictional minimum of this court, said amount to i be determined at trial. i VlHEREFORE, Plaintiff prays for judgment against the defendants, and each ofthem, as set forth below.

FOURTH CAUSE OF ACTION (Fraud-Intentional Misrepresentation)

Plaintiff alleges against defendants EDGEWATER ISLE HOMEOWNERS ASSOCIATION, PMG and DOES 1-25:

36. Plaintiff realleges and incorporates herein by reference, as though separately set

37. Defendants and DOES 1-25, represented to plaintiff both orally and in writing, that the maintenance, repair, replacement, restoration and reconstruction of the common areas of the Subject Property, as described in Paragraphs 11 and 12, would begin on or about June l, 2001.

38. Plaintiff is informed and believes, and therefore alleges, that defendants and DOES 1-25, knew the statements as described in paragraph 37 were false, or made recldessl y I without knowing whether they was true or false.

39. Plaintiff is informed and believes, and therefore alleges, that the defendants and DOES 1-25 made the statements with an intent to induce the plaintiff not to enter into any long term leases or rental contracts.

40. Plaintiff was unaware of the falsity or recklessness ofthe statements as described in Paragraph 37, and because of her position as a homeowner, and the defendants and DOES 1- 25 position as quasi-landlords in total control of the maintenance, repair, replacement, restoration and reconstruction of the common areas of the Subject Property, justifiably relied upon the statements to avoid entering into long term leases or rental contract.

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41. As a direct and proximate result of the fraud by defendants and DOES 1-25 plaintiff has suffered emotional distress and pecuniary loss and has been damaged in an amount in excess of the jurisdictional minimum of this court, said amount to be determined at trial. WHEREFORE, Plaintiff prays for judgment against the defendants, and each of them, as set forth below.

FIFTH CAUSE OF ACTION (Fraud-Negligent Misrepresentation)

Plaintiff alleges against defendants EDGEWATER ISLE HOMEOWNERS ASSOCIATION, PMG and DOES 1-25:

42. Plaintiff realleges and incorporates herein by reference, as though separately set forth herein, the allegations contained in paragraphs 1-19, and 37 above, inclusive.

43. Defendants and DOES 1-25 represented to plaintiff both orally and in writing, that the maintenance, repair, replacement, restoration and reconstruction of the common areas of the Subject Property, as described in Paragraphs 11 and 12, would begin on or about June I, 2001.

44. Because the maintenance, repair, replacement, restoration and reconstruction of the common areas of the Subject Property, as described in Paragraphs 11 and 12, did not begin on or about June 1,2001, the statements as described in paragraph 43 must have been untrue.

45. Regardless of defendants' or DOES 1-25 actual belief in the truthfulness of the statements as described in paragraph 43, plaintiff is informed and believes, and therefore alleges that defendants' or DOES 1-25 must have made the statements without any reasonable ground for believing they were true.

46. Plaintiff is informed and believes, and therefore alleges, that defendants and DOES 1-25 made the statements described in Paragraph 43, with an intent to induce the plaintiff not to enter into any long term leases or rental contracts.

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47. Plaintiff was unaware of the falsity of the statements as described in paragraph 43 and because of her position as a homeowner, and the defendants' and DOES 1-25 positions as quasi-landlords in total control of the maintenance, repair, replacement, restoration and reconstruction of the common areas of the Subject Property, plaintiff justifiably relied upon the statements to avoid entering into a long term rental contract.

48. As a direct and proximate result of the fraud by defendants and DOES 1-25 plaintiff has suffered emotional distress and pecuniary loss and has been damaged in an amount in excess of the jurisdictional minimum or this court, said amount to be determined at trial WHEREFORE, Plaintiff prays for judgment against the defendants, and each of them, as set forth below.

SIXTH CAUSE OF ACTION (Fraud-Nondisclosure of Known Facts)

Plaintiff alleges against defendants EDGEWATER ISLE HOMEOWNERS ASSOCIATION, PMG and DOES 1-25:

49. Plaintiff realleges and incorporates herein by reference, as though separately set forth herein, the allegations contained in paragraphs 1-19, 26, 27, and 37 above, inclusive.

50. At all times relevant to this Complaint, defendants and DOES 1-25 had a fiduciary duty to the plaintiff to disclose 1) all known facts regarding the maintenance, repair, replacement, restoration and reconstruction ofthe common areas of the Subject Property as described in Paragraphs 11 and 12, and 2) all known facts regarding the actual scope, start date, and expected duration of the reconstruction of the Subject Property.

51. At all times relevant to this Complaint, Defendants and DOES 1-25 completely ignored plaintiff s repeated oral and written requests for the disclosure of any known facts as described in Paragraph 50, regarding the Subject Property.

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52. As a direct and proximate result of the defendants' and DOES 1-25 fraudulent nondisclosure plaintiff has suffered emotional distress and pecuniary loss and has been damaged in an amount in excess of the jurisdictional minimum of this court, said amount to be determined at trial WHEREFORE, Plaintiff prays for judgment against the defendants, and each of them, as set forth below.

SEVENTH CAUSE OF ACTION (Intentional Interference with Prospective Economic Advantage)

Plaintiff alleges against defendants EDGEWATER ISLE HOMEOWNERS ASSOCIATION, PMG and DOES 1-25:

53. Plaintiff realleges and incorporates herein by reference, as though separately set forth herein, the allegations contained in paragraphs 1-19, above, inclusive.

54. An economic relationship in the form of a renewable six-month lease existed between plaintiff and a tenant prior to June 1, 200 1.

55. The economic relationship described in Paragraph 54 was renewable and therefor contained a probable economic benefit to the plaintiff.

56. The defendants and DOES 1-25 knew of the existence ofthe economic relationship described in Paragraphs 54 because ofplaintiffs communications to the defendants , and DOES 1-25, as described in Paragraph 17

57. The defendant and DOES 1-25 intentionally told plaintiff the following: 1) not to enter into any long term leases or rental contracts after June 1, 2001 because the maintenance, repair, replacement, and restoration of the common areas of Subject Property, as described in Paragraphs 11 and 12.was scheduled to begin by June 1, 2001; and, 2) the EDGEWATER ISLE HOMEOWNERS ASSOCIATION was considering purchase of the Subject Property.

58. The defendants and DOES 1-25 engaged in the conduct described in Paragraph 57 by design, to interfere with or disrupt the economic relationship described in Paragraph 54.

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59. The economic relationship described in Paragraph 54 was actually disrupted wher the tenants decided not to renew the lease on June 15, 200 1, because of the apparent unavailability of the Subject Property after June 1, 2001 due to the scheduled and/or pending reconstruction of the common areas of the Subject Property, or the possible purchase of the Subject Property by the defendant EDGEWATER ISLE HOMEOWNERS ASSOCIATION.

60. Plaintiff is informed and believes, and alleges, that after June 1, 2001, the defendants and DOES 1-25 intentionally ignored plaintiffs repeated requests for information as described Paragraph 17, by design to interfere with or disrupt the economic relationship described in Paragraph 54, and all other possible future economic relationships.

61. Because of the designed acts of the defendants and DOES 1-25 as described in Paragraphs 57 and the ending oftne economic relationship as described in Paragraph 59, the plaintiff has suffered damages, in an amount in excess of the jurisdictional minimum ofthis court, said amount to be determined at tria!. WHEREFORE, Plaintiff prays for judgment against the defendants, and each of them, as set forth below.

EIGHTH CAUSE OF ACTION (Negligent Interference with Prospective Economic Advantage)

Plaintiff alleges against defendants EDGEWATER ISLE HOMEOWNERS ASSOCIATION, PMG and DOES 1-25:

62. Plaintiff realleges and incorporates herein by reference, as though separately set forth herein, the allegations contained in paragraphs) -19, and 55-60, above, inclusive.

63. The defendants and DOES 1-25 knew of the existence of the economic relationship described in Paragraph 54 because of plaintiff's conmmnications to the defendants and DOES 1-25, as described in Paragraph] 7 and was or should have been aware that if they did not act with due care, their actions would interfere with this relationship and cause plaintiff to lose in whole or in part the probable future economic benefit or advantage of the relationship.

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64. The defendants and DOES 1-25 failed to exercise due care to avoid interfering, in the manner as set forth in Paragraph 57, with the prospective economic advantage of the plaintiff from the economic relationships described in Paragraph 54.

65. Because of the negligence of the defendants and DOES 1-25 as described in Paragraph 57, and the ending of the economic relationships as described in Paragraph 59, the plaintiff has suffered damages in an amount in excess ofthe jurisdictional minimum of this court, said amount to be determined at trial.

PRAYER FOR RELIEF

Plaintiff prays for ajudgment against defendants and each ofthem as follows:

1. For diminution in value and/or repair damages according to proof;

2. For loss of use damages according to proof;

3. For loss of rents and profits according to proof;

4. For general damages according to proof;

5. For costs of suit;

6. For interest according to proof;

7. Punitive damages in an amount to be determined by the jury sufficient to deter the conduct of the defendants in the future;

8. For such other further relief as this Honorable Court may deem just and proper.

 

Dated: January 18, 2001.

GORDON & REES, LLP

William J Peters

WILLIAM J. PETERS
Attorneys for Plaintiff
Karen Klein