HOA COVER-UP Conspiracy EXPOSED!

California homeowners just delivered a crushing $1.8 million blow to an HOA that deliberately concealed a dangerous abandoned well beneath their property, proving that these power-hungry boards can’t hide behind legal loopholes when they put families at risk.

Story Highlights

California Court of Appeal upholds $1.8 million judgment against HOA for concealing abandoned well
HOA deliberately ignored expert warnings and made false statements to government authorities
Homeowners’ unit rendered uninhabitable by water damage and mold for years
Court finds HOA attorney made “grossly misleading” statements, triggering State Bar complaint
Landmark ruling establishes HOAs cannot escape liability through business judgment rule when acting in bad faith

HOA Board’s Deliberate Concealment Strategy Exposed

The Rancho Palma Grande HOA in Santa Clara County engaged in a systematic campaign to hide the existence of an abandoned 400-plus-foot well beneath the Ridley family’s condominium. Despite having access to maps and records from the Santa Clara Valley Water District showing the well’s location, the HOA board concealed this critical information from contractors, city officials, and the affected homeowners. When multiple experts warned that the flooding originated from an undestroyed well, the HOA rejected their recommendations and instead promoted a false theory blaming high groundwater.

Government Warnings Ignored for Nearly Two Years

The City of Santa Clara, Santa Clara Valley Water District, and independent contractors repeatedly warned the HOA about the likely presence of the abandoned well. Rather than conducting reasonable investigations, the HOA dismissed low-cost investigative measures that could have quickly identified the source. The well was only discovered accidentally by investigators nineteen months after the initial warnings. This deliberate inaction left the homeowners’ unit uninhabitable while water intrusion and mold damage continued to worsen.

Judge JoAnne McCracken’s Statement of Decision revealed that the HOA and its attorney “made extensive knowingly false and misleading statements to government authorities, the court, plaintiffs, and the community, all with the object of shirking defendants’ responsibilities to plaintiffs.” The court determined this conduct constituted gross negligence as “an extreme departure from reasonable care and as conscious indifference to the consequences.”

Attorney Misconduct Compounds HOA’s Legal Troubles

The HOA’s litigation director, Stephan A. Barber, sent letters containing false statements about the timeline of flooding and mold presence to city officials and the water district. The HOA president and vice president later admitted they knew these statements were false. Judge McCracken found Barber had “no satisfactory explanation for his false statements,” leading to a State Bar complaint. Plaintiffs’ attorney Terence J. O’Hara noted that “all of the safeguards and guard rails that should have been in place failed, starting with their attorney,” who “should have told the HOA what their duties and obligations were to their shareholder members.”

Precedent-Setting Victory for Homeowner Rights

The California Court of Appeal’s affirmation of the $1.8 million judgment establishes binding precedent that HOAs cannot rely on business judgment rules or exculpation clauses when engaging in gross negligence or intentional misconduct. O’Hara characterized the case as “groundbreaking,” noting he could not find another California case involving non-physical injury between condominium owners and HOAs with a higher award. The judgment includes damages for negligence, nuisance, breach of fiduciary duty, constructive fraud, and treble damages for elder abuse, sending a clear message that HOA boards will be held accountable for betraying their fiduciary duties to homeowners.