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Terence J. O'Hara, Esq. (SBN 144235)
Mary Ann O’Ilara, Esq. (SBN 136379)
Randall C. Creech, Lisq. (SBN 65542)
O'HARA ¢ CREECH LLP
255 W. Julian Street, Suite 402
San Jose, CA 95110
Telephone: (408) 380-7880
Facsimile: (408) 380-7899
Attorneys for Plaintiffs,
DOUG RIDLEY and SITERRY SUEN
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
aOR
DOUG RIDLEY and SHERRY SHEN, ) Case No.: 19CV349909
: )
Plaintifts, )
) REQUEST FOR JUDICIAL NOTICE
Vv. ) RE: PLEADINGS
>
RANCHO PALMA GRANDE )
TIOMROWNERS ASSOCIATION; STEVE )
MORITZ; and DOES 1 through 20, ) Complaint filed: June 14, 2019
inclusive, ) Trial Date: April 25, 2022
)
Defendants. )
j
Plaintiffs Doug Ridley and Sherry Shen respectfully request that this Court, pursuant to
Evidence Code Sections 451 and 452, take Judicial Notice of the following:
L. Complaint, filed June 14, 2019. A copy is allached hereto as Exhibit A.
2. First Amended Complaint, filed July 12,2021. A copy is attached hereto
as Exhibit B.
3. Cross-Complaint of Rancho Palma Grande Homeowners Association, filed
December 4, 2020. A copy is attached hereto as Exhibit C.
4, First Amended Cross-Complaint of Rancho Palma Grande Homeowners
Association, filed January 14, 202]. A copy is attached hereto as Exhibit D.
fi
iit
Pagel.
“REQUEST FOR JUDICIAL NOTICE RE: PLEADINGSSD OP MB DA mW PB BW HY HF
co
5, Request tor Dismissal of Cross-Complaint by Rancho Palma Grande Homeowners
Association, Filed April 19, 2022. A copy is attached hereto as Exhibit E.
Dated: October 14, 2022 O'HARA ¢ CREECH LLP
By:
‘Terence J, O'Hara
Mary Ann O’Hara
Randall C. Creech
Attorneys for Plaintiffs
Pape 2
REQUEST FOR JUDICIAL NOTICE
3; PLEADINGSDoug Ridley/Sherry Shen v. Rancho Palma Grande HOA, et al. CASE NO.: 19CV349909
SANTA CLARA COUNTY SUPERIOR COURT
PROOF OF SERVICE
STATE OF CALIFORNIA, COUNTY OF SANTA CLARA
Iam a citizen of the United States. My business address is 255 West Julian Street, Suite 402,|
San Jose, California 95110. I am employed in the County of Santa Clara where this service occurs.
Iam over the age of 18 years, and not a party to the within action or cause. I am readily familiar
with my employer's normal business practice for collection and processing of correspondence for
mailing with the U.S. Postal Service, and that practice is that correspondence is deposited with the
U.S. Postal Service the same day as the day of collection in the ordinary course of business.
On the date set forth below, following ordinary business practice, I served the foregoing
document(s) described as:
REQUEST FOR JUDICIAL NOTICE RE: PLEADINGS
on said date at my place of business, a true copy thereof, on the following parties by
enclosing said copies in a sealed envelope in the ordinary course of business, addressed to the
parties as follows:
See attached list of counsel.
[~ (BY MAIL) I caused such envelope(s) with postage thereon fully prepaid to be placed in the
U.S. mail at San Jose, California.
[~ (BY ELECTRONIC SERVICE) I caused such document(s) listed above to be electronically
served through the Superior Court of California, County of Santa Clara electronic
filing/service provider and also complies with CCP §1010.6.
[~ (BY OVERNIGHT DELIVERY) I caused such envelope(s) to be delivered to an overnight
delivery carrier with delivery fees provided for, addressed to the person(s) on whom it is to
be served.
[xX (BY ELECTRONIC MAIL) I provided the document(s) listed above electronically to the e-
mail address as stated on the attached mailing list.
[~ (BY PERSONAL SERVICE) I caused such envelope(s) to be delivered by hand this date to
the addressee(s).
[X ] (STATE) I declare under penalty of perjury under the laws of the State of California that the!
above is true and correct.
Executed on October 14, 2022 at San Jose, California.
/8/ Sovie Salaices
Lorie Salaices
Page |
PROOF OF SERVICEDoug Ridley/Sherry Shen v. Rancho Palma Grande HOA, et al.
CASE NO.: 19CV349909
SERVICE LIST
Bobby Dale Sims, Jr., Esq.
John T. Hill, Esq.
Sims, Lawrence & Broghammer
2261 Lava Ridge Court
Roseville, CA 95661
Telephone: 916-797-8881
Facsimile: 916-253-1544
bob@sims-law.net
jhill@sims-law.net
cc: Lori@sims-law.net
carlos@sims-law.net
Counsel for:
RANCHO PALMA GRANDE
HOMEOWNERS ASSOCIATION;
STEVE MORITZ
Stephan A. Barber, Esq.
JRG Attorneys at Law
318 Cayuga Street, Suite 101
Salinas, CA 93901
Telephone: 831-754-2444
Facsimile: 831-278-5935
steve@jrgattorneys.com
Co-Counsel for:
RANCHO PALMA GRANDE
HOMEOWNERS ASSOCIATION; STEVE
MORITZ
Joseph B. Muller, Esq.
Matheny. Sears, Linkert & Jaime, LLP
3638 American River Dr.
Sacramento, CA 95864
Telephone: 916-978-3434
Facsimile: 916-978-3430
jmuller@mathenysears.com
cc: arios@mathenysears.com
Counsel for Cross-Complainants:
DOUG RIDLEY and SHERRY SHEN
Page 2
PROOF OF SERVICEEXHIBIT AE-FILED
6/14/2019 5:40PM
Clerk of Court
Terence J. (O'Hara, Esq. (SBN 144235) Superior Court of CA,
Craig A Kisylia, Esq. (SBN 325702) County of Santa Clara
O’HARA ¢ CREECH LLP 19CV349909
255 W. Julian Street, Suite 402 Reviewed By: Yuet Lai
San Jose, CA 95110
Telephone: (408) 380-7880
Facsimile: (408) 380-7899
Attorneys for Plaintiffs,
DOUG RIDLEY and SHERRY SHEN
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
ea
DOUG RIDLEY and SHERRY SHEN, Case No.: 19CV349909
Plaintiffs, COMPLAINT:
v. 1. VIOLATION OF GOVERNING
DOCUMENTS
RANCHO PALMA GRANDE 2. VIOLATION OF DAVIS-
STIRLING COMMON INTEREST
DEVELOPMENT ACT (Ciy. Code
§§ 4000, et seq.)
BREACH OF IMPLIED
WARRANTY
NEGLIGENCE
NUISANCE
BREACH OF FIDUCIARY DUTY
CONCEALMENT
DECLARATORY RELIEF
INJUNCTIVE RELIEF
HOMEOWNERS ASSOCIATION, a
California non-profit mutual benefit
corporation; and DOES 1 through 20,
inclusive,
Defendants.
tt SS
SSA Ae
Plaintiffs DOUG RIDLEY and SHERRY SHEN allege as follows:
PRELIMINARY ALLEGATIONS
A. PLAINTIFFS
1, Plaintiffs DOUG RIDLEY and SHERRY SHEN (hereinafter referred to collectively
as “Plaintiffs”) are, and at all times relevant were, the owners of 2006 Stone Pine Court, Santa
Clara, CA 95050 (hereinafter referred to as “Subject Property”). Plaintiffs are, and at all times
relevant were, members in good standing of the Rancho Palma Grande Homeowners Association.
Mt
Page 1
COMPLAINTB. DEFENDANTS
2. On information and belief, Plaintiffs allege that Defendant RANCHO PALMA
GRANDE HOMEOWNERS ASSOCIATION (hereinafter “Association” and/or “Defendant”) was,
and is, a non-profit mutual benefit corporation duly organized and existing by virtue of the laws of
the State of California, has its principal place of business located in the city of Santa Clara, County
of Santa Clara, California; was, and is, a common interest development, as defined in Civil Code
Section 1351(a), and was formed for the purpose of managing, administering and operating the
Rancho Palma Grande condominium development, a common interest development consisting of
residential units and adjacent Common Areas (hereinafter “Development”).
C DOE DEFENDANTS
a: Plaintiffs are ignorant of the true names and capacities, whether individual,
corporate, associate or otherwise of Defendants named herein as DOES 1 through 20, inclusive, and
therefore sue said Defendants by such fictitious names pursuant to the Code of Civil Procedure
§474. Plaintiffs will pray for leave of Court to amend this Complaint to allege their true names and
capacities when the same have been ascertained.
4. Plaintiffs are informed and believe that DOES 1 through 20, inclusive, were
employees, and/or agents of the Association, and/or who served as members of the Board of
Directors of the Association and as such at all times mentioned herein were members of the
governing body of the Association encompassing the Subject Property.
Si Plaintiffs are informed and believe, and thereon allege, that each of the fictitiously
named Defendants are responsible in some manner for the occurrences herein alleged and that
Plaintiffs’ injuries and damages were proximately caused thereby. As used herein, the word
“Defendants” shall mean the named Defendant as set forth above and Defendants DOES 1 through
20, and each of them.
D. AGENCY/AIDING AND ABETTING
6. Atall times herein mentioned, the Association and DOE Defendants (hereafter
referred to collectively as “Defendants”), and each of them, were an agent or joint venture of each
of the other, and in doing the acts alleged herein, were acting within the course and scope of such
Pave 2
COMPLAINT -agency. Defendants, and each of them, had actual and/or constructive knowledge of the acts of eac!
of the other Defendants, and ratified, approved, joined in, acquiesced and/or authorized the
wrongful acts of each co-defendant, and/or retained the benefits of said wrongful acts.
7. Defendants, and each of them, aided and abetted, encouraged and rendered
substantial assistance to the other Defendants in breaching their fiduciary obligations to Plaintiffs,
as alleged herein. In taking action, as particularized herein, to aid and abet and substantially assist
the commissions of these wrongful acts and other wrongdoings complained of, each of the
Defendants acted with an awareness of his/her/its primary wrongdoing and realized that his/her/its
conduct would substantially assist the accomplishment of the wrongful conduct, wrongful goals,
and wrongdoing.
8. Adherence to the fiction of the separate existence of the Defendants as separate
entities distinct from the Association would permit an abuse of the corporate privilege and would
sanction fraud and promote injustice.
JURISDICTION AND VENUE
9. Plaintiffs have complied with California Civil Code section 5930’s ADR
requirements prior to filing this lawsuit against Defendants. Plaintiffs and Defendant actively and in
good faith attended and completed a mediation conference conducted by Anne Lawlor Goyette on
May 20, 2019.
10. Venue is proper in this County since Subject Property is located in the County of
Santa Clara, and the agreements referenced herein were to be performed in this County. Plaintiffs
are also informed and believe that Defendants, and each of them, either reside in and/or conduct
business in the County of Santa Clara, State of California.
11. The amount in controversy exceeds the jurisdictional minimum of this Court.
GENERAL ALLEGATIONS
12. The Association is the successor in interest to Citizen Savings, Federal Savings and
Loan Association, which, as Grantor, executed a certain Declaration of Covenants, Conditions and
Restrictions recorded on November 3, 1981, as Document No. 7204633 in the Official Records of
Santa Clara County, California (the “1981 Declaration”). On October 23, 1981, a condominium
Page 3
COMPLAINTplan was filed as Document No. 719655, in the Official Records of Santa Clara County, California.
An Amendment to Declaration of Covenants, Conditions and Restrictions of Tract No. 7175
Homeowners Association was recorded on October 20, 1995, as Document No. 13064211 in the
Official Records of Santa Clara County, California, On March 21, 2007, the Declaration of
Covenants, Conditions and Restrictions was once again amended and recorded as Document No.
19352355 in the Official Records of Santa Clara County, California.
13. The 1981 Declaration, as amended, establishes certain limitations, easements,
covenants, restrictions, conditions, liens, and charges which run with and are binding upon all
parties having or acquiring any right, title, or interest in that certain parcel of real property located
in the County of Santa Clara County, State of California, and more particularly described as
follows:
Lots 1 through 7 as shown on the Map of Tract 7175, Santa Clara,
California, filed for record in the Office of the Recorder of the
County of Santa Clara, State of California, on September 28, 1981,
in Book 490 of Maps at Pages 37 through 39.
14, The 1981 Declaration, as amended, is referred to herein as the “Governing
Documents” and is attached hereto as Exhibit A. The Subject Property is governed by the
Governing Documents applicable to the Development and is subject to the powers of the
Association set forth in those Governing Documents.
1S; On October 23, 1981, the condominium plan for Rancho Palma Grande development
was recorded by the Santa Clara Recorder which further defined the parameters of the term “unit”.
16. Following Section 8 of the Governing Documents, at all times relevant the general
purpose of the Association did (and does now) includes the management and operation of the
Development in accordance with the Governing Documents and California law. Such powers and
authority include the management, operation, improvement, maintenance and repair of the
Development; establishing and maintaining a common scheme and plan for the possession, use,
enjoyment, repair, maintenance, restoration and improvement of the Development; and to possess
and exercise all powers set forth in the Government Documents together with the general power to
do any and all things that a nonprofit mutual benefit corporation may lawfully do under the laws of
Page 4
COMPLAINTthe State of California, subject only to the limitations upon the exercise of such powers as are
expressly set forth in the Governing Documents.
17. Specifically, Section 8(a) of the Governing Documents stipulates that the
Association shall provide maintenance, repair, and replacement of the Common Area and all
facilities, improvements, and landscaping thereon. Therefore, pursuant to the Governing
Documents and the condominium plan, the Association must care for the Common. The Governing
Documents and condominium plan define Common Area as all real and personal property
comprising the Development, but excluding the Units. The Governing Documents and
condominium define Units, in part, as consisting of the interior space bounded by and contained
within the interior unfinished of the perimeter walls, floors, ceilings, windows and doors.
18. Plaintiffs are retirees living on a fixed income which had been comprised, in part, of
monthly rental payments submitted by tenants of the Subject Property. On or around April 22,
2018, the tenants observed water in the Common Area crawlspace beneath the Subject Property
through a vent supplying air to the utility room of the Subject Property, The tenants notified
Plaintiffs, who immediately hired a plumber and notified the Association. The Association’s
plumbing contractor concluded that the pooling in the Common Area crawlspace was due to some
broken pipe, and was therefore NOT the Association’s responsibility.
19. Plaintiffs notified the City of Santa Clara and other relevant water authorities who
inspected the conditions. Plaintiffs obtained a permit for the installation of a temporary sump
pump system, pending a permanent fix from the City of Santa Clara on or about May 9, 2018.
Plaintiffs were ultimately reimbursed in full by the Association for the costs incurred in having the
temporary sump pump system installed. The permit for the installation of a temporary sump pump
system has since lapsed in or about November, 2018,and is no longer active, since the permanent
repair was never performed.
20. The Association initially took the position that the temporary sump pump system
was adequate to drain the water from the crawlspace, steadfastly refused to pursue a more
permanent fix, despite the fact that water continued to pool up to four (4) inches in the crawlspace
even while the sump pump was running.
Page 5
COMPLAINT21. Consequently, the Common Area crawlspace continued to retain varying levels of
standing water through 2018 (and into 2019).
22. On November 5, 2018, Plaintiff Doug Ridley emailed Association VP Steve Moritz
expressing his concerns about the mold contamination. Mr. Ridley wrote:
The crawlspace has been wet to varying degrees for 6 months and
counting. At last inspection there was a standing pool of water
near the sump pump that was being replenished continuously from
the underground water source. Under these circumstances the
development of molds, mildews and fungus in the crawlspace is to
be expected. The results of the second mold test taken on 10/26/18
are attached, and contain the first sub-area (crawlspace) data.
23. The results from the October 26, 2018 mold air sampling were prepared by EMSL
Analytical, Inc., who found that thirty six thousand two hundred (36,200) Aspergillus/Penicillium
mold spores per cubic meter of air were recorded in the crawlspace. By contrast, the outdoor
“control” sample found only forty (40) Aspergillus/Penicillium mold spores per cubic meter of air.
24. | The Common Area crawlspace continued to retain varying levels of standing water
through the end of 2018 and into 2019.
25. On January 25, 2019 Association VP Steven Moritz wrote to Mr. Ridley with an
Association update on actions concerning the Subject Property. In his letter, Mr. Moritz references
the Association’s intention to complete work on a permanent solution to the crawlspace water
problem by the middle of March, 2019. He also commented that “no mold or hazardous materials
has been found in or under the unit adjacent to the site of the water. The only known location of
mold was under the kitchen sink and does not require professional abatement” and that “we are not
aware of any conditions which would prevent you from renting your unit to a tenant”. A copy of
the January 25, 2019 letter from Mr. Moritz is attached to this Complaint as Exhibit B, and
incorporated herein by reference.
26. By February/March 2019, visible splotches of mold could be seen was found on the
structural framing and drywall in the crawlspace, as well as inside the unit on the hardwood floors
and kitchen cabinets. Plaintiffs retained consultants to document the nature and extent of the mold
proliferation, the property damage resulting from the excessive crawlspace water and other latent
adverse conditions. The preliminary investigations completed through June 7, 2019 have confirmed
Page 6
COMPLAINTthe following adverse/unsafe conditions at or emanating from the Association controlled common
areas;
e Unsafe levels of airborne and surface toxic mold in all rooms of the house based on air,
bulk and tape lift sampling;
e Unsafe levels of airborne and surface toxic mold in the crawlspace and structural
framing;
e Arthropods (probably mosquito larvae) living and breeding in the crawlspace water;
e Deteriorated drywall at the crawlspace common area and fire separation wall between
the Subject Property and the neighboring unit from water, mold and excessive moisture;
e Damaged subfloor plywood panels from excessive crawlspace humidity and water
vapor;
e Moldy and discolored carpet and pads in all bedrooms and front room;
e Mold trapped on the top of plywood subfloor and the kitchen floor substrate;
© Mold trapped on the underside of the kitchen floor boards and cabinets;
e Mold trapped in the interstitial gaps between the individual kitchen floor boards;
e Mold trapped in the mitre joints and interstitial spaces at the kitchen cabinets;
e Mold trapped between kitchen floors/cabinets and interior trim/drywall;
e Mold trapped between kitchen cabinets and marble countertops;
e Mold on the surface of the kitchen floorboards and cabinets;
e Rusted vents and fasteners at various locations from excessive crawlspace moisture;
¢ Rotted wood trim around the outside window on the NE side of the unit;
e Interior damage to the framing, drywall, trim-board, paint, carpet, carpet pad and rotted
subfloor below the window on the NE side of the unit; and
e Interior damage to the framing, drywall, trim-board, paint, carpet, carpet pad and
subfloor from leaks around the front bedroom sliding glass door.
27. The investigation into other damages and defective conditions is ongoing. Plaintiffs
reserve the right to supplement this Paragraph via Amendment to the Complaint as additional
damages and defects are discovered.
Page 7
COMPLAINT28. The property damage will continue to spread throughout the house and will continue
to grow and multiply until the Association conducts a permanent and effective work plan to dry-out
the crawlspace, undertake professional abatement protocol efforts to address the mold problem and
restore all finishes. In the interim, the Subject Property remains uninhabitable, despite the
Association’s position that it is in a rentable condition. The impairment of the value of the property
is incalculable and the loss of use and lost rents continue to accrue on a daily basis.
29. Atno time in relation to the issues raised herein were the Defendants, either
individually or collectively, or any of their agents, denied reasonable access to the Subject Property
in order to perform any and all inspections/investigations requested by the Defendants.
30. Plaintiffs are informed and believe and thereon allege that Defendants, and each of
them, failed to take any meaningful reparatory or mediating action to either correct or abate the
discovered conditions which constitute a nuisance, leaving the Subject Property in a dangerous and
uninhabitable state. The Subject Property is defective and Defendants have failed and refused to
repair, mitigate or abate the common area nuisances.
31. Plaintiffs are informed and believe and thereon allege that Plaintiffs have sustained
and suffered consequential damages resulting from Defendants’ acts and/or omissions, including,
without limitation, physical injury and/or destruction of tangible property and the loss of use of the
Subject Property, and consequential damages to portions of the Subject Property.
32. Plaintiffs are informed and believe and thereon allege that from time to time during
the approximate period of discovery of the issues alleged herein to the date of this Complaint,
Defendants performed incomplete inspections of the common areas to develop an appropriate
engineered solution to abate the nuisances and return the property to habitability.
33. Plaintiffs are informed and believe and thereon allege that Defendants (or those who
such Defendants hired to make inspections) did not reveal, disclose or inform Plaintiffs of the true
conditions of the Subject Property known to Defendants, and Plaintiffs reasonably relied on the
implied and express representations that the Subject Property was free from significant defects and
premature deterioration, including the proliferation of toxic mold.
34. Plaintiffs are presently unaware of when all of the defective conditions alleged
Page 8
COMPLAINT27
28
herein first occurred or manifested themselves or caused physical injury to or destruction of tangibl
property, or the loss of use of such property, but asserts that the deficiencies within the Subject
Property have developed and occurred over a period of time presently unknown and that said
deficiencies and resulting physical injuries are continuous and progressive.
35. | To the extent Defendants promised and agreed to make repairs to improvements
and/or components within the Subject Property, and in doing so, Plaintiffs reasonably relied on
Defendants’ promises, agreements and repairs and thereby deferred the filing of the within action.
During the period in which Defendants made such promises, agreements and repairs, all statutes of
limitation were tolled and Defendants are estopped from claiming that the alleged expiration of all
the statutes of limitation bar the within action.
36. Plaintiffs are unaware of all of the defective conditions which contribute to the
conditions mentioned herein, and other problems, and Plaintiffs are continuing their investigation
into the nature and extent of said defects. Plaintiffs reserve the right to amend this Complaint, if
necessary, to conform to proof regarding defects not stated herein.
37. Plaintiffs are informed and believe and thereon allege that the defective conditions
described above, and each of them, were at all material times latent, and could not have been made
apparent to Plaintiffs by reasonable inspection. At all material times, in the exercise of reasonable
diligence, Plaintiffs could not and did not discover the nature and extent of latent defects in the
Subject Property including the cause of the defects.
FIRST CAUSE OF ACTION
(Violation of Governing Documents — As Against the Association and DOES 1 - 20)
38. Plaintiffs incorporate by reference the allegations of paragraphs 1 through 37 as
though set forth in full herein.
39. Atall times relevant hereto, Defendants controlled the Development by and through
the Governing Documents and through their positions as the Association and respective agents
retained by the Association. Defendants violated and/or failed to comply with the Governing
Documents that, collectively, require Defendants to maintain and operate various portions of the
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COMPLAINT27
28
Development in an appropriate manner and condition, and to take all actions to comply with the
Governing Documents.
40. Upon information and belief, Defendants, as controllers of the Development, had a
duty under the Governing Documents to repair and maintain portions of the Development, includin,
the Subject Property.
41. Asadirect and proximate result of Defendants’ breach of the Governing Documents
by failing to adequately operate and maintain the Development, elements of the Subject Property
were damaged including, without limitation, those items previously identified.
42. Defendants breached the aforementioned Governing Documents in that once
standing water in the crawlspace was identified and not promptly and permanently abated by
Defendant, physical damage to the structure and biologic growth began and will continue.
Defendant failed and has refused to take permanent corrective action.
43. Asadirect and proximate result of said breaches of duty as set forth by the
Governing Documents, and the conduct of Defendants and each of them, and of the defective
conditions in the Subject Property Plaintiffs have suffered, and will continue to suffer, damage
including, without limitation, repair and remediation costs, including investigation, replacement of
damaged and defective portions of Subject Property and possessions, the loss of use of the Subject
Property, loss of rent derived from use of the subject property, monitoring of the Subject Property,
additional periodic expenses, reimbursement for temporary repairs and other damages caused by the}
defects referred to herein, legal and professional costs, and attorney’s fees pursuant to the CC&Rs,
Article VIII, Section 8.1 as well as Civil Code § 5975, Plaintiffs have retained consultants to
evaluate the deficiencies existing throughout the Subject Property and to determine the nature and
extent of remedial measures required to correct these deficiencies, and have incurred and will incur
expenses in connection with all remedial measures performed at the Subject Property (including
construction costs, professional supervision and professional consulting efforts related thereto), all
of which result in further damages to Plaintiffs, Plaintiffs’ damages are in a sum to be proven at
trial. These damages will meet or exceed the jurisdictional minimum of this Court.
__Page 10
COMPLAINTWHEREFORE, Plaintiffs pray for judgment against Defendants, and each of them, as
hereinafter set forth.
SECOND CAUSE OF ACTION
(Violation of Davis-Stirling Common Interest Development Act (Civ. Code §§ 4000, et seq.) -
As Against the Association and DOES 1 - 20)
44. Plaintiffs incorporate by reference the allegations of paragraphs 1 through 43 as
though set forth in full herein.
45. _ Atall times relevant herein, Plaintiffs owned the real property, commonly known as
2006 Stone Pine Court, Santa Clara, California, an individual unit. The “individual unit” is a
“separate interest” contained in a “common interest development” as defined and utilized in
Sections 4100 and 4185 of the Civil Code, and the provisions of the Davis-Stirling Common
Interest Development Act (Civ. Code §§ 4000, et seq.) apply to the individual unit and the common
interest development.
46. At all times relevant herein, Defendant Association was an “association” as defined
in section 4080 of the Civil Code, and the provisions of the Davis-Stirling Common Interest
Development Act apply to the association and the common interest development known as Rancho
Palma Grande Homeowners Association.
47. — Section 5975 if the Civil Code provides for the enforcement of the Governing
Documents of a common interest development and the “covenants and restrictions in the declaration)
shall be enforceable” “by any owner of a separate interest”.
48. The Association was established as an association by way of the Governing
Documents, (see Exhibit A).
49. The Association has the duty to do all things necessary or proper for the peace,
health, comfort, safety, and general welfare of its owners/members, including Plaintiffs, and to
exercise powers normally exercised by residential homeowner associations under the laws of the
State of California.
_Page 11
COMPLAINT27
28
50. In particular, pursuant to Civil Code § 4775 and Article 6, Section 1 of the CC&Rs,
the Association has a duty to maintain, repair, replace, restore, operate and manage all of the
Common Areas and facilities, improvements, furnishings, equipment and landscaping thereon.
$1. The Association has failed to exercise its duties. It has failed to, among other things,
to enforce the Davis-Stirling Act requirements and CC&Rs as required by Article 6, Section 1.
52. Asa direct and proximate result of the acts and omissions of Defendants and each of
them, Plaintiffs has been damaged in that she has been forced to incur and has incurred attorney’s
fees in an effort to require the Association to fulfill its duties.
53. The Association is required to reimburse Plaintiffs for their costs and attorney’s fees
pursuant to Civil Code Sections 4955 and 5975(c).
WHEREFORE, Plaintiffs pray for judgment against Defendants, and each of them, as
hereinafter set forth.
THIRD CAUSE OF ACTION
(Breach of Implied Warranty - As Against the Association and DOES 1 - 20)
54, Plaintiffs incorporate by reference the allegations of paragraphs 1 through 53 as
though set forth in full herein.
55, Plaintiffs are informed and believe, and thereon allege, that the Association entered
into written agreements to provide labor and materials in the inspection, investigation and repair of
the Common Areas associated with and impacting the Subject Property wherein the Association
warranted and/or agreed that said services and work on the Subject Property would be, and was at
all relevant times, in compliance with the terms of the agreements and free from defects in
workmanship and materials and/or fit for its intended use by Plaintiffs, an legally permitted.
56. The Association knew that Plaintiffs were the owners of the Subject Property and
would be the intended beneficiaries of the services rendered by the Association pursuant to their
respective agreements.
57. Plaintiffs are informed and believe, and thereon allege, that they are the intended
and/or express intended beneficiaries to the agreements entered into by and/or between these the
Association wherein the Association agreed to investigate, inspect and repair the Association-
Page 12
COMPLAINTcontrolled areas, such as Common Area crawlspace, associated with and impacting the Subject
Property according to the applicable standards in the construction industry for such work.
58. At no time did Defendants, and each of them, or Plaintiffs, agents or representatives,
rescind the subject agreements.
59. During the approximate period from the commencement of their investigations and
repairs to the date of this Complaint, Defendants, and cach of them, breached and continued to
breach, the terms of said agreements by refusing, neglecting, or otherwise failing to improve,
maintain, repair and/or replace the Association-controlled areas associated with and impacting the
Subject Property defects in accordance with the terms and conditions of said agreements, and such
conduct is and was a material breach of the terms of said agreements. The aforesaid systems
require replacement, repair and reconstruction; and have resulted in consequential damage to the
improvements at and within the Subject Property and have resulted in injury to Plaintiffs.
60. | Asa proximate result of the foregoing breaches of the above-referenced contracts, as
set forth above, Plaintiffs have suffered damage in an amount to be shown according to proof at
trial, but not limited to, the loss of rents, the cost of repairing and replacing the defective materials
and workmanship, testing and investigation of such defective materials and workmanship,
diminution of fair market value, increased maintenance costs, damages arising from any and all
claims for property damage made by residents, legal and professional costs, damages resulting from
providing temporary housing, attorneys’ fees, and all other incidental and consequential damages.
Plaintiffs have retained consultants to evaluate the deficiencies existing throughout the Subject
Property and to determine the nature and extent of remedial measures required to correct these
deficiencies, and has incurred and will incur expenses in connection with all remedial measures
performed at the Subject Property (including construction costs, professional supervision and
professional consulting efforts related thereto), all of which result in further damages to Plaintiffs.
Plaintiffs will pray for leave to amend this Complaint to allege the precise amount of such damages
when same becomes known to them or upon proof at trial.
WHEREFORE, Plaintiffs pray for judgment against Defendants, and each of them, as
hereinafter set forth.
Page 13
COMPLAINTFOURTH CAUSE OF ACTION
(Negligence — As Against the Association and DOES 1 - 20)
61. Plaintiffs incorporate herein by reference the allegations of paragraphs 1 through 60
as though set forth in full herein.
62. Plaintiffs are informed and believe, and thereon allege, that Defendants, and each of
them owed a duty of care to Plaintiffs to inspect and keep safe the buildings and Common Areas of
the Development in a reasonable manner so as to maintain a safe and habitable condition for
residents, including the Subject Property.
63. Plaintiffs are informed and believe and thereon allege that the Association and
DOES | - 20, and all remaining Defendants as contractual agents, breached their duties of care to
Plaintiffs in that initial inspection, investigation, repair and/or replacement of components,
improvements and/or elements of defective conditions at the Subject Property were negligently
performed, including the negligent hiring of those who performed negligent work.
64. In addition, Defendants failed to use adequate materials, products, goods, devices
and procedures, so that elements, components and/or improvements within the Subject Property and
Development do not function or perform properly, are defective so as to create unsafe and
unhealthy conditions and have caused both consequential damage to the buildings, improvements
and personal property within the Subject Property, as well as loss of use of property.
65. Specifically, Defendants, and each of them, failed to supervise the work of other
Defendants herein, failed to ensure that reported and known defects were repaired, and failed to
notify Plaintiffs of the existence of defective conditions,
66. Defendants: (a) failed to properly inspect, repair and maintain the Subject Property
and corresponding Common Areas; (b) negligently advised Plaintiffs that all known defect issues
had been repaired or did not require further maintenance, repair and/or replacement; and (c)
performed inspections and repairs using methods and materials which were and are below
applicable industry standards,
67. Defendants, and each of them, had a duty to Plaintiffs to perform with reasonable
care, all of the foregoing described acts, and breached said duty in the manner described above.
Page 14
COMPLAINT68. As a direct and proximate result of said breaches of duty, and of the conduct of
Defendants and each of them, and of the defective conditions in at the Subject Property referred to
herein Plaintiffs have suffered, and will continue to suffer, damages including, without limitation,
repair and remediation costs, including investigation, replacement of damaged and defective
portions of the Subject Property and possessions, the loss of rents, the loss of use of the Subject
Property, relocation from the Subject Property during repairs and remediation, monitoring of the
Subject Property, additional periodic expenses, reimbursement for temporary repairs and other
damages caused by the defects referred to herein. Plaintiffs’ damages are in a sum to be proven at
trial. These damages will meet or exceed the jurisdictional minimum of this Court.
WHEREFORE, Plaintiffs pray for judgment against Defendants, and each of them, as
hereinafter set forth.
FIFTH CAUSE OF ACTION
(Nuisance — As Against the Association and DOES 1 — 20)
69. Plaintiffs incorporate by reference the allegations of paragraphs 1 through 68 as
though set forth in full herein.
70. Plaintiffs are the owners and controllers of the Subject Property whereon the
defective and adverse conditions within the Common Areas and subsequent damages and nuisance
occurred.
71. Defendants, by acting or failing to act, created a condition and/or permitted a
condition to exist at the Subject Property, and at the Development, that was and continues to be an
obstruction to the free use of the Subject Property by Plaintiffs, so as to interfere with the
comfortable use enjoyment of the Subject Property.
72. — Specifically, the Development suffers from significant defects in the Common Areas
beneath the Subject Property controlled by the Association which have resulted in damage to and
around the Subject Property, rendering it uninhabitable. Biological growth toxic mold was found to
exist beneath and inside of the Subject Property that poses significant health risk to Plaintiffs, their
tenants, and all occupants.
73. The conditions on the Subject Property created by the Defendants and/or permitted
Page 15
COMPLAINTto exist by the Defendants unreasonably interfered with Plaintiffs’ use and/or enjoyment of the
Subject Property.
74. Atno time did Plaintiffs consent to Defendants’ conduct or to the conditions on the
Subject Property created and/or permitted to exist on the Subject Property by the Defendants, the
existence of which would be reasonably harmful, annoying or disturbing to an ordinary person.
75. The seriousness of the harm arising from the conditions on the Subject Property
relating to Defendants’ conduct as alleged herein outweighs the public benefit of said conduct.
76. Defendants have failed and refused to abate said nuisance although Defendants have
been given reasonable notice and opportunity to do so.
77. Asa direct and proximate and legal result of said Defendants’ conduct, Plaintiffs
have sustained damage in an amount to be shown according to proof at trial, but not limited to, the
cost of repairing and replacing defective materials and workmanship, testing and investigation of
such defective materials and workmanship, loss of use, including but not limited to, diminution of
fair market value and loss of rents, any damages arising from any and all claims for personal injury
or property damage made by the residents, legal and professional costs, attorney’s fees and all other
incidental and consequential damages.
WHEREFORE, Plaintiffs pray for judgment against Defendants, and each of them, as
hereinafter set forth,
SIXTH CAUSE OF ACTION
(Breach of Fiduciary Duty / Concealment — As Against the Association and DOES 1 — 20)
78. Plaintiffs incorporate by reference the allegations of paragraphs 1 through 77 as
though set forth in full herein.
79. The common plan for the Association, a California non-profit mutual benefit
corporation, was to establish a common scheme and plan for the possession, use, enjoyment, repair,
maintenance, restoration and improvement of the development and the interests therein conveyed.
80. | Asamandatory membership homeowners association during all times relevant to the
matters set forth herein and above, the Association owed Plaintiffs certain fiduciary duties,
Page 16
COMPLAINT27
28
including but not limited to, a duty of loyalty and a duty of care to use reasonable skill, care and
diligence in the handling of the matters serving as the basis for Plaintiffs’ claims,
81. Plaintiffs are informed and believe and thereon allege that Defendants breached its
fiduciary duties owed to Plaintiffs by, among other things, failing to properly and promptly inspect,
repair and maintain the common areas in a nuisance-free condition; failing to enforce the governing
documents; failing to disclose to Plaintiffs the true nature and extent of the damages to the subject
property; failing to use care and diligence in the investigation of the issues; failing to meet duties of
disclosure; and failing to reasonably address and/or remedy the issues.
82. Defendants breached its fiduciary duties to Plaintiffs by making the active and
passive misrepresentations set forth above; failing to disclose and thereby suppressing facts that
materially affected Plaintiffs and the habitability of the subject property; inadequately investigating
and advising Plaintiffs with respect to the crawlspace conditions and repairs, failing to advise
regarding the presence of mold; failing to remediate safety hazards such as mold; advising Plaintiffs
that the unit was safe for occupancy when it was not; and otherwise failed to meet their obligations
as the governing homeowners association.
83. Plaintiffs are informed and believe, and thereon allege, that Defendants did the acts
herein alleged with the intent to deceive and defraud Plaintiffs.
84. Plaintiffs in fact placed confidence and reliance on Defendants and were not aware
of any facts making Plaintiffs suspicious of the veracity of Defendants’ representations until
sometime after May 2018.
85. Asa direct and proximate result of the conduct of Defendants by and through the
breach of its fiduciary duties, Plaintiffs have been damaged in an amount to be determined at the
time of trial.
86. The aforementioned conduct of the Association was an intentional breach of the
fiduciary duties owed by said Association, with the intention of said Association putting its own
financial interests above the best interests, rights and the health and safety of Plaintiffs and their
tenants, and was malicious, fraudulent and oppressive content as defined in California Civil Code
__Page 17
COMPLAINT27
28
Section 3294, in that the Association subjected Plaintiffs to a cruel and unjust hardship in conscious
disregard of Plaintiffs’ rights, so as to justify an award of exemplary and punitive damages.
WHEREFORE, Plaintiffs pray for judgment against Defendants, and each of them, as
hereinafter set forth.
SEVENTH CAUSE OF ACTION
(Declaratory Relief— As Against the Association and DOES 1 — 20)
87. Plaintiffs incorporate herein by reference the allegations of paragraphs 1 through 86
as though set forth in full herein.
88. Atall times relevant hereto, Defendants controlled Development by and through the
Governing Documents and through their positions as the Association, associated board of directors,
and as the property management company retained by the Association. Defendants violated and/or
failed to comply with the Governing Documents that, collectively, require Defendants to maintain
and operate various portions of the Development in an appropriate manner and condition, and to
take all actions to comply with the Governing Documents.
89. Upon information and belief, Defendants, as controllers of the Development had a
duty under the Governing Documents to repair and maintain portions of the Development, includin;
the Common Areas beneath and around the Subject Property.
90. Plaintiffs are informed and believe and thereon allege that Defendants dispute these
contentions, and instead contend that Defendants have some superior right to Plaintiffs concerning
the matters complained of herein.
91. Anactual, present and justiciable controversy has arisen and now exists between
Plaintiffs on the one hand and the Defendants on the other, concerning their respective rights, duties
and obligations under the Governing Documents and property management agreement for the
Association with respect to the obligations to repair or costs to repair the alleged deficiencies at the
Development.
92. Plaintiffs seek a judicial determination that Defendants owe a non-delegable
mandatory duty to manage, operate, improve, maintain, repair and replace the Common Area in a
safe and sanitary condition (the “Association’s Duty”), furthermore, that the Association’s Duty
Page 18
COMPLAINTincludes a duty to inspect and investigate the Common Area.
93. A judicial declaration is further necessary and appropriate at this time so that
Plaintiffs may ascertain their rights and duties because, among other things, Defendants have
interfered with, and threatened to interfere with, Plaintiffs’ rights under the Governing Documents
and duties relative to the prosecution and defense of this action.
ELGHTH CAUSE OF ACTION
(Injunetive Relief — As Against the Association and DOES 1 — 20)
94. Plaintiffs incorporate by reference the allegations of paragraphs | through 93 as
though set forth in full herein.
95. — Unless and until enjoined by order of this Court, the Defendants, their agents,
servants, employees, persons acting in concert with them, and their successors in interest will
continue to neglect their duty to maintain, repair, replace and restore the common area beneath and
around the Subject Property, as well as the portions of the Subject Property adversely affected by
the defective conditions of the Common Area crawlspace beneath the Subject Property as
prescribed by the Governing Documents and by law, causing harm to Plaintiffs. The damage
caused by Defendants’ failure to timely and adequately remediate the defective conditions of the
Common Area and Subject property is not easily quantifiable or compensable, and money damages
cannot adequately compensate Plaintiffs for the irreparable harm that Defendants have caused,
continue to cause, and threaten to cause.
96. Without affirmative injunctive relief, Subject Property will continue to endure
damaging and unhealthy conditions resulting from Defendants’ neglect. Plaintiffs have suffered
and will continue to suffer distress if Defendants are permitted to unlawfully forgo its duty to
adequately and completely maintain, repair, replace and restore the defective areas of the Common
Area crawlspace and Subject Property as described herein.
97. Plaintiffs are entitled to injunctive relief requiring Defendants to remediate the
defective conditions in the Common Area and the resulting damage to the Subject Property such
that their dwelling is fully restored in accordance its own assurances and obligations to Plaintiffs
under the Governing Documents as well as its obligations under the law.
Page 19
COMPLAINTPRAYER
WHEREFORE, Plaintiffs pray judgment against Defendants, and each of them, as follows:
1.
2
IA
ll.
Dated: June 14, 2019
For general damages according to proof:
For special damages according to proof;
For punitive or exemplary damages according to proof;
For prejudgment and post judgment interest as allowed by law;
For attorney’s fees and costs of suit incurred herein;
For professional and technical fees and costs;
For such other and further relief as the court may deem proper;
For a declaration and judgment of each party’s rights and responsibilities concerning
the Subject Property, investigations, repairs, governing documents and property
management agreement;
For a declaration and judgment that Defendants must remediate the defective
conditions in the Common Area beneath and around the Subject Property and restore
the Subject Property to a habitable and safe state.
For a declaration and judgment that Defendants must comply with the provisions of
the Governing Documents and property management agreement, and said
Defendants must take all measures necessary to comply with said documents; and
That the Court award any and all appropriate injunctive relief requiring Defendants
to fully repair, replace and restore the common area beneath and around the Subject
Property and restore the Subject Property to a habitable and safe state,
O’HARA * CREECH LLP
Z ~ x
Page 20
“COMPLAINTEXHIBIT Atsleholit
Sigs
LDEN STATE TLYLE COMPANY
crow No. 317895 FRD
act 7175
DECLARATION OF COVENANTS, CONDITIONS
AND RESTRICTIONS
CAS? 557
CITIZENS SAVINGS, FEDERAL SAVINGS AWD LOAN ASSOCIATION,
formerly CITIZENS SAVINGS AND LOAN ASSOCIATION, hereinafter
called "Grantor," is the Owner of Lets 1 through 7, inclusive,
as shown on the Subdivision Map entitled,
“PRACT NO. 7175, SANTA CLARA, CALIFORNIA,"
which Nap was filed for record in the
Office Of the Recorder of the County of
Santa Clara, State of California on
September 26, 1981, in Book 490 of Naps
at Pages 37-39, (hereinafter referred to
as “the Map")) )
WHEREAS, Grantor recorded a Condominium
Plan for Lots 2, 3, 4,,5, 6 and 7 of
TRACT HO, 7175 in the Office of the
Recordar of the County of Santa Clara,
State of California, on Octogow 2y7ELs
SEelelel tecoeae where nabeoe Pe tStrad to
as "the Plan");
WHEREAS, the Plan is a saparate "project" for each Lot
within the meaning of Califorynia Civil Codo Section 1350 (3), is
subject to the provisions of the California Condominium Act (Title
G, Part 4, Division Second of the Civil Code), and it is the desire
and intention of G
Preview
sc OBO Me Terence J. O'Hara, Esq. (SBN 144235) Mary Ann O’Ilara, Esq. (SBN 136379) Randall C. Creech, Lisq. (SBN 65542) O'HARA ¢ CREECH LLP 255 W. Julian Street, Suite 402 San Jose, CA 95110 Telephone: (408) 380-7880 Facsimile: (408) 380-7899 Attorneys for Plaintiffs, DOUG RIDLEY and SITERRY SUEN SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA aOR DOUG RIDLEY and SHERRY SHEN, ) Case No.: 19CV349909 : ) Plaintifts, ) ) REQUEST FOR JUDICIAL NOTICE Vv. ) RE: PLEADINGS > RANCHO PALMA GRANDE ) TIOMROWNERS ASSOCIATION; STEVE ) MORITZ; and DOES 1 through 20, ) Complaint filed: June 14, 2019 inclusive, ) Trial Date: April 25, 2022 ) Defendants. ) j Plaintiffs Doug Ridley and Sherry Shen respectfully request that this Court, pursuant to Evidence Code Sections 451 and 452, take Judicial Notice of the following: L. Complaint, filed June 14, 2019. A copy is allached hereto as Exhibit A. 2. First Amended Complaint, filed July 12,2021. A copy is attached hereto as Exhibit B. 3. Cross-Complaint of Rancho Palma Grande Homeowners Association, filed December 4, 2020. A copy is attached hereto as Exhibit C. 4, First Amended Cross-Complaint of Rancho Palma Grande Homeowners Association, filed January 14, 202]. A copy is attached hereto as Exhibit D. fi iit Pagel. “REQUEST FOR JUDICIAL NOTICE RE: PLEADINGSSD OP MB DA mW PB BW HY HF co 5, Request tor Dismissal of Cross-Complaint by Rancho Palma Grande Homeowners Association, Filed April 19, 2022. A copy is attached hereto as Exhibit E. Dated: October 14, 2022 O'HARA ¢ CREECH LLP By: ‘Terence J, O'Hara Mary Ann O’Hara Randall C. Creech Attorneys for Plaintiffs Pape 2 REQUEST FOR JUDICIAL NOTICE 3; PLEADINGSDoug Ridley/Sherry Shen v. Rancho Palma Grande HOA, et al. CASE NO.: 19CV349909 SANTA CLARA COUNTY SUPERIOR COURT PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF SANTA CLARA Iam a citizen of the United States. My business address is 255 West Julian Street, Suite 402,| San Jose, California 95110. I am employed in the County of Santa Clara where this service occurs. Iam over the age of 18 years, and not a party to the within action or cause. I am readily familiar with my employer's normal business practice for collection and processing of correspondence for mailing with the U.S. Postal Service, and that practice is that correspondence is deposited with the U.S. Postal Service the same day as the day of collection in the ordinary course of business. On the date set forth below, following ordinary business practice, I served the foregoing document(s) described as: REQUEST FOR JUDICIAL NOTICE RE: PLEADINGS on said date at my place of business, a true copy thereof, on the following parties by enclosing said copies in a sealed envelope in the ordinary course of business, addressed to the parties as follows: See attached list of counsel. [~ (BY MAIL) I caused such envelope(s) with postage thereon fully prepaid to be placed in the U.S. mail at San Jose, California. [~ (BY ELECTRONIC SERVICE) I caused such document(s) listed above to be electronically served through the Superior Court of California, County of Santa Clara electronic filing/service provider and also complies with CCP §1010.6. [~ (BY OVERNIGHT DELIVERY) I caused such envelope(s) to be delivered to an overnight delivery carrier with delivery fees provided for, addressed to the person(s) on whom it is to be served. [xX (BY ELECTRONIC MAIL) I provided the document(s) listed above electronically to the e- mail address as stated on the attached mailing list. [~ (BY PERSONAL SERVICE) I caused such envelope(s) to be delivered by hand this date to the addressee(s). [X ] (STATE) I declare under penalty of perjury under the laws of the State of California that the! above is true and correct. Executed on October 14, 2022 at San Jose, California. /8/ Sovie Salaices Lorie Salaices Page | PROOF OF SERVICEDoug Ridley/Sherry Shen v. Rancho Palma Grande HOA, et al. CASE NO.: 19CV349909 SERVICE LIST Bobby Dale Sims, Jr., Esq. John T. Hill, Esq. Sims, Lawrence & Broghammer 2261 Lava Ridge Court Roseville, CA 95661 Telephone: 916-797-8881 Facsimile: 916-253-1544 bob@sims-law.net jhill@sims-law.net cc: Lori@sims-law.net carlos@sims-law.net Counsel for: RANCHO PALMA GRANDE HOMEOWNERS ASSOCIATION; STEVE MORITZ Stephan A. Barber, Esq. JRG Attorneys at Law 318 Cayuga Street, Suite 101 Salinas, CA 93901 Telephone: 831-754-2444 Facsimile: 831-278-5935 steve@jrgattorneys.com Co-Counsel for: RANCHO PALMA GRANDE HOMEOWNERS ASSOCIATION; STEVE MORITZ Joseph B. Muller, Esq. Matheny. Sears, Linkert & Jaime, LLP 3638 American River Dr. Sacramento, CA 95864 Telephone: 916-978-3434 Facsimile: 916-978-3430 jmuller@mathenysears.com cc: arios@mathenysears.com Counsel for Cross-Complainants: DOUG RIDLEY and SHERRY SHEN Page 2 PROOF OF SERVICEEXHIBIT AE-FILED 6/14/2019 5:40PM Clerk of Court Terence J. (O'Hara, Esq. (SBN 144235) Superior Court of CA, Craig A Kisylia, Esq. (SBN 325702) County of Santa Clara O’HARA ¢ CREECH LLP 19CV349909 255 W. Julian Street, Suite 402 Reviewed By: Yuet Lai San Jose, CA 95110 Telephone: (408) 380-7880 Facsimile: (408) 380-7899 Attorneys for Plaintiffs, DOUG RIDLEY and SHERRY SHEN SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA ea DOUG RIDLEY and SHERRY SHEN, Case No.: 19CV349909 Plaintiffs, COMPLAINT: v. 1. VIOLATION OF GOVERNING DOCUMENTS RANCHO PALMA GRANDE 2. VIOLATION OF DAVIS- STIRLING COMMON INTEREST DEVELOPMENT ACT (Ciy. Code §§ 4000, et seq.) BREACH OF IMPLIED WARRANTY NEGLIGENCE NUISANCE BREACH OF FIDUCIARY DUTY CONCEALMENT DECLARATORY RELIEF INJUNCTIVE RELIEF HOMEOWNERS ASSOCIATION, a California non-profit mutual benefit corporation; and DOES 1 through 20, inclusive, Defendants. tt SS SSA Ae Plaintiffs DOUG RIDLEY and SHERRY SHEN allege as follows: PRELIMINARY ALLEGATIONS A. PLAINTIFFS 1, Plaintiffs DOUG RIDLEY and SHERRY SHEN (hereinafter referred to collectively as “Plaintiffs”) are, and at all times relevant were, the owners of 2006 Stone Pine Court, Santa Clara, CA 95050 (hereinafter referred to as “Subject Property”). Plaintiffs are, and at all times relevant were, members in good standing of the Rancho Palma Grande Homeowners Association. Mt Page 1 COMPLAINTB. DEFENDANTS 2. On information and belief, Plaintiffs allege that Defendant RANCHO PALMA GRANDE HOMEOWNERS ASSOCIATION (hereinafter “Association” and/or “Defendant”) was, and is, a non-profit mutual benefit corporation duly organized and existing by virtue of the laws of the State of California, has its principal place of business located in the city of Santa Clara, County of Santa Clara, California; was, and is, a common interest development, as defined in Civil Code Section 1351(a), and was formed for the purpose of managing, administering and operating the Rancho Palma Grande condominium development, a common interest development consisting of residential units and adjacent Common Areas (hereinafter “Development”). C DOE DEFENDANTS a: Plaintiffs are ignorant of the true names and capacities, whether individual, corporate, associate or otherwise of Defendants named herein as DOES 1 through 20, inclusive, and therefore sue said Defendants by such fictitious names pursuant to the Code of Civil Procedure §474. Plaintiffs will pray for leave of Court to amend this Complaint to allege their true names and capacities when the same have been ascertained. 4. Plaintiffs are informed and believe that DOES 1 through 20, inclusive, were employees, and/or agents of the Association, and/or who served as members of the Board of Directors of the Association and as such at all times mentioned herein were members of the governing body of the Association encompassing the Subject Property. Si Plaintiffs are informed and believe, and thereon allege, that each of the fictitiously named Defendants are responsible in some manner for the occurrences herein alleged and that Plaintiffs’ injuries and damages were proximately caused thereby. As used herein, the word “Defendants” shall mean the named Defendant as set forth above and Defendants DOES 1 through 20, and each of them. D. AGENCY/AIDING AND ABETTING 6. Atall times herein mentioned, the Association and DOE Defendants (hereafter referred to collectively as “Defendants”), and each of them, were an agent or joint venture of each of the other, and in doing the acts alleged herein, were acting within the course and scope of such Pave 2 COMPLAINT -agency. Defendants, and each of them, had actual and/or constructive knowledge of the acts of eac! of the other Defendants, and ratified, approved, joined in, acquiesced and/or authorized the wrongful acts of each co-defendant, and/or retained the benefits of said wrongful acts. 7. Defendants, and each of them, aided and abetted, encouraged and rendered substantial assistance to the other Defendants in breaching their fiduciary obligations to Plaintiffs, as alleged herein. In taking action, as particularized herein, to aid and abet and substantially assist the commissions of these wrongful acts and other wrongdoings complained of, each of the Defendants acted with an awareness of his/her/its primary wrongdoing and realized that his/her/its conduct would substantially assist the accomplishment of the wrongful conduct, wrongful goals, and wrongdoing. 8. Adherence to the fiction of the separate existence of the Defendants as separate entities distinct from the Association would permit an abuse of the corporate privilege and would sanction fraud and promote injustice. JURISDICTION AND VENUE 9. Plaintiffs have complied with California Civil Code section 5930’s ADR requirements prior to filing this lawsuit against Defendants. Plaintiffs and Defendant actively and in good faith attended and completed a mediation conference conducted by Anne Lawlor Goyette on May 20, 2019. 10. Venue is proper in this County since Subject Property is located in the County of Santa Clara, and the agreements referenced herein were to be performed in this County. Plaintiffs are also informed and believe that Defendants, and each of them, either reside in and/or conduct business in the County of Santa Clara, State of California. 11. The amount in controversy exceeds the jurisdictional minimum of this Court. GENERAL ALLEGATIONS 12. The Association is the successor in interest to Citizen Savings, Federal Savings and Loan Association, which, as Grantor, executed a certain Declaration of Covenants, Conditions and Restrictions recorded on November 3, 1981, as Document No. 7204633 in the Official Records of Santa Clara County, California (the “1981 Declaration”). On October 23, 1981, a condominium Page 3 COMPLAINTplan was filed as Document No. 719655, in the Official Records of Santa Clara County, California. An Amendment to Declaration of Covenants, Conditions and Restrictions of Tract No. 7175 Homeowners Association was recorded on October 20, 1995, as Document No. 13064211 in the Official Records of Santa Clara County, California, On March 21, 2007, the Declaration of Covenants, Conditions and Restrictions was once again amended and recorded as Document No. 19352355 in the Official Records of Santa Clara County, California. 13. The 1981 Declaration, as amended, establishes certain limitations, easements, covenants, restrictions, conditions, liens, and charges which run with and are binding upon all parties having or acquiring any right, title, or interest in that certain parcel of real property located in the County of Santa Clara County, State of California, and more particularly described as follows: Lots 1 through 7 as shown on the Map of Tract 7175, Santa Clara, California, filed for record in the Office of the Recorder of the County of Santa Clara, State of California, on September 28, 1981, in Book 490 of Maps at Pages 37 through 39. 14, The 1981 Declaration, as amended, is referred to herein as the “Governing Documents” and is attached hereto as Exhibit A. The Subject Property is governed by the Governing Documents applicable to the Development and is subject to the powers of the Association set forth in those Governing Documents. 1S; On October 23, 1981, the condominium plan for Rancho Palma Grande development was recorded by the Santa Clara Recorder which further defined the parameters of the term “unit”. 16. Following Section 8 of the Governing Documents, at all times relevant the general purpose of the Association did (and does now) includes the management and operation of the Development in accordance with the Governing Documents and California law. Such powers and authority include the management, operation, improvement, maintenance and repair of the Development; establishing and maintaining a common scheme and plan for the possession, use, enjoyment, repair, maintenance, restoration and improvement of the Development; and to possess and exercise all powers set forth in the Government Documents together with the general power to do any and all things that a nonprofit mutual benefit corporation may lawfully do under the laws of Page 4 COMPLAINTthe State of California, subject only to the limitations upon the exercise of such powers as are expressly set forth in the Governing Documents. 17. Specifically, Section 8(a) of the Governing Documents stipulates that the Association shall provide maintenance, repair, and replacement of the Common Area and all facilities, improvements, and landscaping thereon. Therefore, pursuant to the Governing Documents and the condominium plan, the Association must care for the Common. The Governing Documents and condominium plan define Common Area as all real and personal property comprising the Development, but excluding the Units. The Governing Documents and condominium define Units, in part, as consisting of the interior space bounded by and contained within the interior unfinished of the perimeter walls, floors, ceilings, windows and doors. 18. Plaintiffs are retirees living on a fixed income which had been comprised, in part, of monthly rental payments submitted by tenants of the Subject Property. On or around April 22, 2018, the tenants observed water in the Common Area crawlspace beneath the Subject Property through a vent supplying air to the utility room of the Subject Property, The tenants notified Plaintiffs, who immediately hired a plumber and notified the Association. The Association’s plumbing contractor concluded that the pooling in the Common Area crawlspace was due to some broken pipe, and was therefore NOT the Association’s responsibility. 19. Plaintiffs notified the City of Santa Clara and other relevant water authorities who inspected the conditions. Plaintiffs obtained a permit for the installation of a temporary sump pump system, pending a permanent fix from the City of Santa Clara on or about May 9, 2018. Plaintiffs were ultimately reimbursed in full by the Association for the costs incurred in having the temporary sump pump system installed. The permit for the installation of a temporary sump pump system has since lapsed in or about November, 2018,and is no longer active, since the permanent repair was never performed. 20. The Association initially took the position that the temporary sump pump system was adequate to drain the water from the crawlspace, steadfastly refused to pursue a more permanent fix, despite the fact that water continued to pool up to four (4) inches in the crawlspace even while the sump pump was running. Page 5 COMPLAINT21. Consequently, the Common Area crawlspace continued to retain varying levels of standing water through 2018 (and into 2019). 22. On November 5, 2018, Plaintiff Doug Ridley emailed Association VP Steve Moritz expressing his concerns about the mold contamination. Mr. Ridley wrote: The crawlspace has been wet to varying degrees for 6 months and counting. At last inspection there was a standing pool of water near the sump pump that was being replenished continuously from the underground water source. Under these circumstances the development of molds, mildews and fungus in the crawlspace is to be expected. The results of the second mold test taken on 10/26/18 are attached, and contain the first sub-area (crawlspace) data. 23. The results from the October 26, 2018 mold air sampling were prepared by EMSL Analytical, Inc., who found that thirty six thousand two hundred (36,200) Aspergillus/Penicillium mold spores per cubic meter of air were recorded in the crawlspace. By contrast, the outdoor “control” sample found only forty (40) Aspergillus/Penicillium mold spores per cubic meter of air. 24. | The Common Area crawlspace continued to retain varying levels of standing water through the end of 2018 and into 2019. 25. On January 25, 2019 Association VP Steven Moritz wrote to Mr. Ridley with an Association update on actions concerning the Subject Property. In his letter, Mr. Moritz references the Association’s intention to complete work on a permanent solution to the crawlspace water problem by the middle of March, 2019. He also commented that “no mold or hazardous materials has been found in or under the unit adjacent to the site of the water. The only known location of mold was under the kitchen sink and does not require professional abatement” and that “we are not aware of any conditions which would prevent you from renting your unit to a tenant”. A copy of the January 25, 2019 letter from Mr. Moritz is attached to this Complaint as Exhibit B, and incorporated herein by reference. 26. By February/March 2019, visible splotches of mold could be seen was found on the structural framing and drywall in the crawlspace, as well as inside the unit on the hardwood floors and kitchen cabinets. Plaintiffs retained consultants to document the nature and extent of the mold proliferation, the property damage resulting from the excessive crawlspace water and other latent adverse conditions. The preliminary investigations completed through June 7, 2019 have confirmed Page 6 COMPLAINTthe following adverse/unsafe conditions at or emanating from the Association controlled common areas; e Unsafe levels of airborne and surface toxic mold in all rooms of the house based on air, bulk and tape lift sampling; e Unsafe levels of airborne and surface toxic mold in the crawlspace and structural framing; e Arthropods (probably mosquito larvae) living and breeding in the crawlspace water; e Deteriorated drywall at the crawlspace common area and fire separation wall between the Subject Property and the neighboring unit from water, mold and excessive moisture; e Damaged subfloor plywood panels from excessive crawlspace humidity and water vapor; e Moldy and discolored carpet and pads in all bedrooms and front room; e Mold trapped on the top of plywood subfloor and the kitchen floor substrate; © Mold trapped on the underside of the kitchen floor boards and cabinets; e Mold trapped in the interstitial gaps between the individual kitchen floor boards; e Mold trapped in the mitre joints and interstitial spaces at the kitchen cabinets; e Mold trapped between kitchen floors/cabinets and interior trim/drywall; e Mold trapped between kitchen cabinets and marble countertops; e Mold on the surface of the kitchen floorboards and cabinets; e Rusted vents and fasteners at various locations from excessive crawlspace moisture; ¢ Rotted wood trim around the outside window on the NE side of the unit; e Interior damage to the framing, drywall, trim-board, paint, carpet, carpet pad and rotted subfloor below the window on the NE side of the unit; and e Interior damage to the framing, drywall, trim-board, paint, carpet, carpet pad and subfloor from leaks around the front bedroom sliding glass door. 27. The investigation into other damages and defective conditions is ongoing. Plaintiffs reserve the right to supplement this Paragraph via Amendment to the Complaint as additional damages and defects are discovered. Page 7 COMPLAINT28. The property damage will continue to spread throughout the house and will continue to grow and multiply until the Association conducts a permanent and effective work plan to dry-out the crawlspace, undertake professional abatement protocol efforts to address the mold problem and restore all finishes. In the interim, the Subject Property remains uninhabitable, despite the Association’s position that it is in a rentable condition. The impairment of the value of the property is incalculable and the loss of use and lost rents continue to accrue on a daily basis. 29. Atno time in relation to the issues raised herein were the Defendants, either individually or collectively, or any of their agents, denied reasonable access to the Subject Property in order to perform any and all inspections/investigations requested by the Defendants. 30. Plaintiffs are informed and believe and thereon allege that Defendants, and each of them, failed to take any meaningful reparatory or mediating action to either correct or abate the discovered conditions which constitute a nuisance, leaving the Subject Property in a dangerous and uninhabitable state. The Subject Property is defective and Defendants have failed and refused to repair, mitigate or abate the common area nuisances. 31. Plaintiffs are informed and believe and thereon allege that Plaintiffs have sustained and suffered consequential damages resulting from Defendants’ acts and/or omissions, including, without limitation, physical injury and/or destruction of tangible property and the loss of use of the Subject Property, and consequential damages to portions of the Subject Property. 32. Plaintiffs are informed and believe and thereon allege that from time to time during the approximate period of discovery of the issues alleged herein to the date of this Complaint, Defendants performed incomplete inspections of the common areas to develop an appropriate engineered solution to abate the nuisances and return the property to habitability. 33. Plaintiffs are informed and believe and thereon allege that Defendants (or those who such Defendants hired to make inspections) did not reveal, disclose or inform Plaintiffs of the true conditions of the Subject Property known to Defendants, and Plaintiffs reasonably relied on the implied and express representations that the Subject Property was free from significant defects and premature deterioration, including the proliferation of toxic mold. 34. Plaintiffs are presently unaware of when all of the defective conditions alleged Page 8 COMPLAINT27 28 herein first occurred or manifested themselves or caused physical injury to or destruction of tangibl property, or the loss of use of such property, but asserts that the deficiencies within the Subject Property have developed and occurred over a period of time presently unknown and that said deficiencies and resulting physical injuries are continuous and progressive. 35. | To the extent Defendants promised and agreed to make repairs to improvements and/or components within the Subject Property, and in doing so, Plaintiffs reasonably relied on Defendants’ promises, agreements and repairs and thereby deferred the filing of the within action. During the period in which Defendants made such promises, agreements and repairs, all statutes of limitation were tolled and Defendants are estopped from claiming that the alleged expiration of all the statutes of limitation bar the within action. 36. Plaintiffs are unaware of all of the defective conditions which contribute to the conditions mentioned herein, and other problems, and Plaintiffs are continuing their investigation into the nature and extent of said defects. Plaintiffs reserve the right to amend this Complaint, if necessary, to conform to proof regarding defects not stated herein. 37. Plaintiffs are informed and believe and thereon allege that the defective conditions described above, and each of them, were at all material times latent, and could not have been made apparent to Plaintiffs by reasonable inspection. At all material times, in the exercise of reasonable diligence, Plaintiffs could not and did not discover the nature and extent of latent defects in the Subject Property including the cause of the defects. FIRST CAUSE OF ACTION (Violation of Governing Documents — As Against the Association and DOES 1 - 20) 38. Plaintiffs incorporate by reference the allegations of paragraphs 1 through 37 as though set forth in full herein. 39. Atall times relevant hereto, Defendants controlled the Development by and through the Governing Documents and through their positions as the Association and respective agents retained by the Association. Defendants violated and/or failed to comply with the Governing Documents that, collectively, require Defendants to maintain and operate various portions of the Page 9 COMPLAINT27 28 Development in an appropriate manner and condition, and to take all actions to comply with the Governing Documents. 40. Upon information and belief, Defendants, as controllers of the Development, had a duty under the Governing Documents to repair and maintain portions of the Development, includin, the Subject Property. 41. Asadirect and proximate result of Defendants’ breach of the Governing Documents by failing to adequately operate and maintain the Development, elements of the Subject Property were damaged including, without limitation, those items previously identified. 42. Defendants breached the aforementioned Governing Documents in that once standing water in the crawlspace was identified and not promptly and permanently abated by Defendant, physical damage to the structure and biologic growth began and will continue. Defendant failed and has refused to take permanent corrective action. 43. Asadirect and proximate result of said breaches of duty as set forth by the Governing Documents, and the conduct of Defendants and each of them, and of the defective conditions in the Subject Property Plaintiffs have suffered, and will continue to suffer, damage including, without limitation, repair and remediation costs, including investigation, replacement of damaged and defective portions of Subject Property and possessions, the loss of use of the Subject Property, loss of rent derived from use of the subject property, monitoring of the Subject Property, additional periodic expenses, reimbursement for temporary repairs and other damages caused by the} defects referred to herein, legal and professional costs, and attorney’s fees pursuant to the CC&Rs, Article VIII, Section 8.1 as well as Civil Code § 5975, Plaintiffs have retained consultants to evaluate the deficiencies existing throughout the Subject Property and to determine the nature and extent of remedial measures required to correct these deficiencies, and have incurred and will incur expenses in connection with all remedial measures performed at the Subject Property (including construction costs, professional supervision and professional consulting efforts related thereto), all of which result in further damages to Plaintiffs, Plaintiffs’ damages are in a sum to be proven at trial. These damages will meet or exceed the jurisdictional minimum of this Court. __Page 10 COMPLAINTWHEREFORE, Plaintiffs pray for judgment against Defendants, and each of them, as hereinafter set forth. SECOND CAUSE OF ACTION (Violation of Davis-Stirling Common Interest Development Act (Civ. Code §§ 4000, et seq.) - As Against the Association and DOES 1 - 20) 44. Plaintiffs incorporate by reference the allegations of paragraphs 1 through 43 as though set forth in full herein. 45. _ Atall times relevant herein, Plaintiffs owned the real property, commonly known as 2006 Stone Pine Court, Santa Clara, California, an individual unit. The “individual unit” is a “separate interest” contained in a “common interest development” as defined and utilized in Sections 4100 and 4185 of the Civil Code, and the provisions of the Davis-Stirling Common Interest Development Act (Civ. Code §§ 4000, et seq.) apply to the individual unit and the common interest development. 46. At all times relevant herein, Defendant Association was an “association” as defined in section 4080 of the Civil Code, and the provisions of the Davis-Stirling Common Interest Development Act apply to the association and the common interest development known as Rancho Palma Grande Homeowners Association. 47. — Section 5975 if the Civil Code provides for the enforcement of the Governing Documents of a common interest development and the “covenants and restrictions in the declaration) shall be enforceable” “by any owner of a separate interest”. 48. The Association was established as an association by way of the Governing Documents, (see Exhibit A). 49. The Association has the duty to do all things necessary or proper for the peace, health, comfort, safety, and general welfare of its owners/members, including Plaintiffs, and to exercise powers normally exercised by residential homeowner associations under the laws of the State of California. _Page 11 COMPLAINT27 28 50. In particular, pursuant to Civil Code § 4775 and Article 6, Section 1 of the CC&Rs, the Association has a duty to maintain, repair, replace, restore, operate and manage all of the Common Areas and facilities, improvements, furnishings, equipment and landscaping thereon. $1. The Association has failed to exercise its duties. It has failed to, among other things, to enforce the Davis-Stirling Act requirements and CC&Rs as required by Article 6, Section 1. 52. Asa direct and proximate result of the acts and omissions of Defendants and each of them, Plaintiffs has been damaged in that she has been forced to incur and has incurred attorney’s fees in an effort to require the Association to fulfill its duties. 53. The Association is required to reimburse Plaintiffs for their costs and attorney’s fees pursuant to Civil Code Sections 4955 and 5975(c). WHEREFORE, Plaintiffs pray for judgment against Defendants, and each of them, as hereinafter set forth. THIRD CAUSE OF ACTION (Breach of Implied Warranty - As Against the Association and DOES 1 - 20) 54, Plaintiffs incorporate by reference the allegations of paragraphs 1 through 53 as though set forth in full herein. 55, Plaintiffs are informed and believe, and thereon allege, that the Association entered into written agreements to provide labor and materials in the inspection, investigation and repair of the Common Areas associated with and impacting the Subject Property wherein the Association warranted and/or agreed that said services and work on the Subject Property would be, and was at all relevant times, in compliance with the terms of the agreements and free from defects in workmanship and materials and/or fit for its intended use by Plaintiffs, an legally permitted. 56. The Association knew that Plaintiffs were the owners of the Subject Property and would be the intended beneficiaries of the services rendered by the Association pursuant to their respective agreements. 57. Plaintiffs are informed and believe, and thereon allege, that they are the intended and/or express intended beneficiaries to the agreements entered into by and/or between these the Association wherein the Association agreed to investigate, inspect and repair the Association- Page 12 COMPLAINTcontrolled areas, such as Common Area crawlspace, associated with and impacting the Subject Property according to the applicable standards in the construction industry for such work. 58. At no time did Defendants, and each of them, or Plaintiffs, agents or representatives, rescind the subject agreements. 59. During the approximate period from the commencement of their investigations and repairs to the date of this Complaint, Defendants, and cach of them, breached and continued to breach, the terms of said agreements by refusing, neglecting, or otherwise failing to improve, maintain, repair and/or replace the Association-controlled areas associated with and impacting the Subject Property defects in accordance with the terms and conditions of said agreements, and such conduct is and was a material breach of the terms of said agreements. The aforesaid systems require replacement, repair and reconstruction; and have resulted in consequential damage to the improvements at and within the Subject Property and have resulted in injury to Plaintiffs. 60. | Asa proximate result of the foregoing breaches of the above-referenced contracts, as set forth above, Plaintiffs have suffered damage in an amount to be shown according to proof at trial, but not limited to, the loss of rents, the cost of repairing and replacing the defective materials and workmanship, testing and investigation of such defective materials and workmanship, diminution of fair market value, increased maintenance costs, damages arising from any and all claims for property damage made by residents, legal and professional costs, damages resulting from providing temporary housing, attorneys’ fees, and all other incidental and consequential damages. Plaintiffs have retained consultants to evaluate the deficiencies existing throughout the Subject Property and to determine the nature and extent of remedial measures required to correct these deficiencies, and has incurred and will incur expenses in connection with all remedial measures performed at the Subject Property (including construction costs, professional supervision and professional consulting efforts related thereto), all of which result in further damages to Plaintiffs. Plaintiffs will pray for leave to amend this Complaint to allege the precise amount of such damages when same becomes known to them or upon proof at trial. WHEREFORE, Plaintiffs pray for judgment against Defendants, and each of them, as hereinafter set forth. Page 13 COMPLAINTFOURTH CAUSE OF ACTION (Negligence — As Against the Association and DOES 1 - 20) 61. Plaintiffs incorporate herein by reference the allegations of paragraphs 1 through 60 as though set forth in full herein. 62. Plaintiffs are informed and believe, and thereon allege, that Defendants, and each of them owed a duty of care to Plaintiffs to inspect and keep safe the buildings and Common Areas of the Development in a reasonable manner so as to maintain a safe and habitable condition for residents, including the Subject Property. 63. Plaintiffs are informed and believe and thereon allege that the Association and DOES | - 20, and all remaining Defendants as contractual agents, breached their duties of care to Plaintiffs in that initial inspection, investigation, repair and/or replacement of components, improvements and/or elements of defective conditions at the Subject Property were negligently performed, including the negligent hiring of those who performed negligent work. 64. In addition, Defendants failed to use adequate materials, products, goods, devices and procedures, so that elements, components and/or improvements within the Subject Property and Development do not function or perform properly, are defective so as to create unsafe and unhealthy conditions and have caused both consequential damage to the buildings, improvements and personal property within the Subject Property, as well as loss of use of property. 65. Specifically, Defendants, and each of them, failed to supervise the work of other Defendants herein, failed to ensure that reported and known defects were repaired, and failed to notify Plaintiffs of the existence of defective conditions, 66. Defendants: (a) failed to properly inspect, repair and maintain the Subject Property and corresponding Common Areas; (b) negligently advised Plaintiffs that all known defect issues had been repaired or did not require further maintenance, repair and/or replacement; and (c) performed inspections and repairs using methods and materials which were and are below applicable industry standards, 67. Defendants, and each of them, had a duty to Plaintiffs to perform with reasonable care, all of the foregoing described acts, and breached said duty in the manner described above. Page 14 COMPLAINT68. As a direct and proximate result of said breaches of duty, and of the conduct of Defendants and each of them, and of the defective conditions in at the Subject Property referred to herein Plaintiffs have suffered, and will continue to suffer, damages including, without limitation, repair and remediation costs, including investigation, replacement of damaged and defective portions of the Subject Property and possessions, the loss of rents, the loss of use of the Subject Property, relocation from the Subject Property during repairs and remediation, monitoring of the Subject Property, additional periodic expenses, reimbursement for temporary repairs and other damages caused by the defects referred to herein. Plaintiffs’ damages are in a sum to be proven at trial. These damages will meet or exceed the jurisdictional minimum of this Court. WHEREFORE, Plaintiffs pray for judgment against Defendants, and each of them, as hereinafter set forth. FIFTH CAUSE OF ACTION (Nuisance — As Against the Association and DOES 1 — 20) 69. Plaintiffs incorporate by reference the allegations of paragraphs 1 through 68 as though set forth in full herein. 70. Plaintiffs are the owners and controllers of the Subject Property whereon the defective and adverse conditions within the Common Areas and subsequent damages and nuisance occurred. 71. Defendants, by acting or failing to act, created a condition and/or permitted a condition to exist at the Subject Property, and at the Development, that was and continues to be an obstruction to the free use of the Subject Property by Plaintiffs, so as to interfere with the comfortable use enjoyment of the Subject Property. 72. — Specifically, the Development suffers from significant defects in the Common Areas beneath the Subject Property controlled by the Association which have resulted in damage to and around the Subject Property, rendering it uninhabitable. Biological growth toxic mold was found to exist beneath and inside of the Subject Property that poses significant health risk to Plaintiffs, their tenants, and all occupants. 73. The conditions on the Subject Property created by the Defendants and/or permitted Page 15 COMPLAINTto exist by the Defendants unreasonably interfered with Plaintiffs’ use and/or enjoyment of the Subject Property. 74. Atno time did Plaintiffs consent to Defendants’ conduct or to the conditions on the Subject Property created and/or permitted to exist on the Subject Property by the Defendants, the existence of which would be reasonably harmful, annoying or disturbing to an ordinary person. 75. The seriousness of the harm arising from the conditions on the Subject Property relating to Defendants’ conduct as alleged herein outweighs the public benefit of said conduct. 76. Defendants have failed and refused to abate said nuisance although Defendants have been given reasonable notice and opportunity to do so. 77. Asa direct and proximate and legal result of said Defendants’ conduct, Plaintiffs have sustained damage in an amount to be shown according to proof at trial, but not limited to, the cost of repairing and replacing defective materials and workmanship, testing and investigation of such defective materials and workmanship, loss of use, including but not limited to, diminution of fair market value and loss of rents, any damages arising from any and all claims for personal injury or property damage made by the residents, legal and professional costs, attorney’s fees and all other incidental and consequential damages. WHEREFORE, Plaintiffs pray for judgment against Defendants, and each of them, as hereinafter set forth, SIXTH CAUSE OF ACTION (Breach of Fiduciary Duty / Concealment — As Against the Association and DOES 1 — 20) 78. Plaintiffs incorporate by reference the allegations of paragraphs 1 through 77 as though set forth in full herein. 79. The common plan for the Association, a California non-profit mutual benefit corporation, was to establish a common scheme and plan for the possession, use, enjoyment, repair, maintenance, restoration and improvement of the development and the interests therein conveyed. 80. | Asamandatory membership homeowners association during all times relevant to the matters set forth herein and above, the Association owed Plaintiffs certain fiduciary duties, Page 16 COMPLAINT27 28 including but not limited to, a duty of loyalty and a duty of care to use reasonable skill, care and diligence in the handling of the matters serving as the basis for Plaintiffs’ claims, 81. Plaintiffs are informed and believe and thereon allege that Defendants breached its fiduciary duties owed to Plaintiffs by, among other things, failing to properly and promptly inspect, repair and maintain the common areas in a nuisance-free condition; failing to enforce the governing documents; failing to disclose to Plaintiffs the true nature and extent of the damages to the subject property; failing to use care and diligence in the investigation of the issues; failing to meet duties of disclosure; and failing to reasonably address and/or remedy the issues. 82. Defendants breached its fiduciary duties to Plaintiffs by making the active and passive misrepresentations set forth above; failing to disclose and thereby suppressing facts that materially affected Plaintiffs and the habitability of the subject property; inadequately investigating and advising Plaintiffs with respect to the crawlspace conditions and repairs, failing to advise regarding the presence of mold; failing to remediate safety hazards such as mold; advising Plaintiffs that the unit was safe for occupancy when it was not; and otherwise failed to meet their obligations as the governing homeowners association. 83. Plaintiffs are informed and believe, and thereon allege, that Defendants did the acts herein alleged with the intent to deceive and defraud Plaintiffs. 84. Plaintiffs in fact placed confidence and reliance on Defendants and were not aware of any facts making Plaintiffs suspicious of the veracity of Defendants’ representations until sometime after May 2018. 85. Asa direct and proximate result of the conduct of Defendants by and through the breach of its fiduciary duties, Plaintiffs have been damaged in an amount to be determined at the time of trial. 86. The aforementioned conduct of the Association was an intentional breach of the fiduciary duties owed by said Association, with the intention of said Association putting its own financial interests above the best interests, rights and the health and safety of Plaintiffs and their tenants, and was malicious, fraudulent and oppressive content as defined in California Civil Code __Page 17 COMPLAINT27 28 Section 3294, in that the Association subjected Plaintiffs to a cruel and unjust hardship in conscious disregard of Plaintiffs’ rights, so as to justify an award of exemplary and punitive damages. WHEREFORE, Plaintiffs pray for judgment against Defendants, and each of them, as hereinafter set forth. SEVENTH CAUSE OF ACTION (Declaratory Relief— As Against the Association and DOES 1 — 20) 87. Plaintiffs incorporate herein by reference the allegations of paragraphs 1 through 86 as though set forth in full herein. 88. Atall times relevant hereto, Defendants controlled Development by and through the Governing Documents and through their positions as the Association, associated board of directors, and as the property management company retained by the Association. Defendants violated and/or failed to comply with the Governing Documents that, collectively, require Defendants to maintain and operate various portions of the Development in an appropriate manner and condition, and to take all actions to comply with the Governing Documents. 89. Upon information and belief, Defendants, as controllers of the Development had a duty under the Governing Documents to repair and maintain portions of the Development, includin; the Common Areas beneath and around the Subject Property. 90. Plaintiffs are informed and believe and thereon allege that Defendants dispute these contentions, and instead contend that Defendants have some superior right to Plaintiffs concerning the matters complained of herein. 91. Anactual, present and justiciable controversy has arisen and now exists between Plaintiffs on the one hand and the Defendants on the other, concerning their respective rights, duties and obligations under the Governing Documents and property management agreement for the Association with respect to the obligations to repair or costs to repair the alleged deficiencies at the Development. 92. Plaintiffs seek a judicial determination that Defendants owe a non-delegable mandatory duty to manage, operate, improve, maintain, repair and replace the Common Area in a safe and sanitary condition (the “Association’s Duty”), furthermore, that the Association’s Duty Page 18 COMPLAINTincludes a duty to inspect and investigate the Common Area. 93. A judicial declaration is further necessary and appropriate at this time so that Plaintiffs may ascertain their rights and duties because, among other things, Defendants have interfered with, and threatened to interfere with, Plaintiffs’ rights under the Governing Documents and duties relative to the prosecution and defense of this action. ELGHTH CAUSE OF ACTION (Injunetive Relief — As Against the Association and DOES 1 — 20) 94. Plaintiffs incorporate by reference the allegations of paragraphs | through 93 as though set forth in full herein. 95. — Unless and until enjoined by order of this Court, the Defendants, their agents, servants, employees, persons acting in concert with them, and their successors in interest will continue to neglect their duty to maintain, repair, replace and restore the common area beneath and around the Subject Property, as well as the portions of the Subject Property adversely affected by the defective conditions of the Common Area crawlspace beneath the Subject Property as prescribed by the Governing Documents and by law, causing harm to Plaintiffs. The damage caused by Defendants’ failure to timely and adequately remediate the defective conditions of the Common Area and Subject property is not easily quantifiable or compensable, and money damages cannot adequately compensate Plaintiffs for the irreparable harm that Defendants have caused, continue to cause, and threaten to cause. 96. Without affirmative injunctive relief, Subject Property will continue to endure damaging and unhealthy conditions resulting from Defendants’ neglect. Plaintiffs have suffered and will continue to suffer distress if Defendants are permitted to unlawfully forgo its duty to adequately and completely maintain, repair, replace and restore the defective areas of the Common Area crawlspace and Subject Property as described herein. 97. Plaintiffs are entitled to injunctive relief requiring Defendants to remediate the defective conditions in the Common Area and the resulting damage to the Subject Property such that their dwelling is fully restored in accordance its own assurances and obligations to Plaintiffs under the Governing Documents as well as its obligations under the law. Page 19 COMPLAINTPRAYER WHEREFORE, Plaintiffs pray judgment against Defendants, and each of them, as follows: 1. 2 IA ll. Dated: June 14, 2019 For general damages according to proof: For special damages according to proof; For punitive or exemplary damages according to proof; For prejudgment and post judgment interest as allowed by law; For attorney’s fees and costs of suit incurred herein; For professional and technical fees and costs; For such other and further relief as the court may deem proper; For a declaration and judgment of each party’s rights and responsibilities concerning the Subject Property, investigations, repairs, governing documents and property management agreement; For a declaration and judgment that Defendants must remediate the defective conditions in the Common Area beneath and around the Subject Property and restore the Subject Property to a habitable and safe state. For a declaration and judgment that Defendants must comply with the provisions of the Governing Documents and property management agreement, and said Defendants must take all measures necessary to comply with said documents; and That the Court award any and all appropriate injunctive relief requiring Defendants to fully repair, replace and restore the common area beneath and around the Subject Property and restore the Subject Property to a habitable and safe state, O’HARA * CREECH LLP Z ~ x Page 20 “COMPLAINTEXHIBIT Atsleholit Sigs LDEN STATE TLYLE COMPANY crow No. 317895 FRD act 7175 DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS CAS? 557 CITIZENS SAVINGS, FEDERAL SAVINGS AWD LOAN ASSOCIATION, formerly CITIZENS SAVINGS AND LOAN ASSOCIATION, hereinafter called "Grantor," is the Owner of Lets 1 through 7, inclusive, as shown on the Subdivision Map entitled, “PRACT NO. 7175, SANTA CLARA, CALIFORNIA," which Nap was filed for record in the Office Of the Recorder of the County of Santa Clara, State of California on September 26, 1981, in Book 490 of Naps at Pages 37-39, (hereinafter referred to as “the Map")) ) WHEREAS, Grantor recorded a Condominium Plan for Lots 2, 3, 4,,5, 6 and 7 of TRACT HO, 7175 in the Office of the Recordar of the County of Santa Clara, State of California, on Octogow 2y7ELs SEelelel tecoeae where nabeoe Pe tStrad to as "the Plan"); WHEREAS, the Plan is a saparate "project" for each Lot within the meaning of Califorynia Civil Codo Section 1350 (3), is subject to the provisions of the California Condominium Act (Title G, Part 4, Division Second of the Civil Code), and it is the desire and intention of G