Upwards of $60,000 in Damages to OVA for Not Waiting a Single Day
“Contractor shall be entitled to payment for Work rendered and unpaid through the date of termination of this Agreement, as may be applicable, and no other amounts shall be due to Contractor upon termination of this Agreement.” [OVA/Siri Construction Agreement]
With the recent release of the OVA settlement with Siri Grading and Paving, the question bears asking: Why would two OVA directors, Andie Altman and Frank Batchelor, claim uncertainty about the terms of a contract they approved and then publicly raise red flags that could potentially send a message to a contractor to pursue damages against OVA?
And that is exactly what happened. On April 3, 2017, a day before the BOD election, the 2016 Board, which included President Altman and Secretary Batchelor, authorized Siri Grading and Paving, Inc. to commence construction on the pickleball courts behind the Central Pool. The most important issue in the election was whether or not pickleball courts should be built in this location and the voters would decide this in a matter of hours.
According to sources close to the project, Siri informed OVA that they were reluctant to start their work before the soil had adequate time to dry out so as to avoid compaction by heavy equipment. Such compaction would increase excavation costs. California was experiencing the wettest rainy season in over a decade and the forecast for Thursday of that week called for an additional 3 inches of rain.
The OVA/SIRI agreement was terminated by the Leznik Board at the April 18, 2017 business meeting by a vote of 5-2, with Batchelor and Altman voting against stopping the project. Batchelor stated, “There are going to be some legal issues that will have to be addressed, issues about are we breaching the contract, what are our rights to termination, what are the damages going to be.” Altman added, “We don’t know what we are actually getting into. We don’t know what our exposure is, we don’t know what our risks are, we don’t know what it’s going to do to us to have breaching all of these contracts as well.” It was after this meeting that Siri made a legal demand for “damages” against the Association.
The final settlement amount reached by the 2017 Board is as follows: $15,419 for the day and a half of grading work completed (in accordance with the terms specified in the contract) and $12,000 for loss of profit (a term not included in the contract).
Damage to the site earlier this year
There was an additional $2200 that OVA paid to remove a pile of damaged concrete for a total of $29,619. Not included in this total are the unspecified OVA attorney fees to negotiate the settlement and the yet to be determined expense to restore the damage to the former putting green. One recent proposal to the board for restoration of the site requested $30,000.
As fiduciaries, these are costs to the Association incurred by the Altman Board that clearly could have been avoided by waiting just one day.
Hardly surprising given that the Altman Board was all about a new Pickleball site irrespective of cost. It would seem that trying to stop the new Board if their slate lost was an easy decision by starting construction. It also seems according to their argument about liability for canceling the contract was premeditated. I am not suggesting such a course of action, but under fiduciary laws Altman and Bachelor have a liability for these unnecessary expenses.
Bachelor, a retired attorney, would have known of any possible damages before the signing the Siri contract. Since both Altman and Bachelor were party to approving the contract, authorized the questionable day to commence construction and the only two board members voted to continue the project in opposition to the board majority I suggest an Attorney review of their fiscal responsibility is appropriate.
Seems as though the board members who authorized this and allowed the demolition are legally liable. How can this be pursued by the current BOD?
“Board members cannot act out of passion or prejudice, personal self-interest or gain, or through revenge or other negative motivations. The rational basis for all decisions must be the best interests of the association consistent with its purposes. This fiduciary duty owed by each board member to the home owners is the same one that directors of publicly traded corporations owe to their shareholders.”
https://www.echo-ca.org/article/beginners-guide-hoa-boards-directors-duties-and-responsibilities
Any construction of that amount should be voted by members of Oakmont.
This is ugly dystopian behavior by petty revengeful outgoing “leadership”.
Such “individuals” must be called out, exposed, and held responsible for their
destructive misuse of power and OUR money…. My hope is that current
Oakmont leadership is significantly more enlightened, kind, and superior in all social, and financial ways to those past…
Robert Hixson (Oakmont resident for 10 years)…
Mike, I have lived here for over thirteen years and have noticed that several projects costing considerable amounts of time and money were ill concieved, never completed or abandoned. If residents were able to vote on these projects as they do in communities with more up to date Bylaws, perhaps we could avoid some of these problems.