Litigation director rebuked for misleading claims in HOA dispute

After a protracted 67-day bench trial, a Santa Clara County judge awarded $1.8 million to homeowner plaintiffs, citing extensive false statements made by the defense attorney, Stephan A. Barber, in a case involving water damage and mold at a condominium.

In her ruling, Judge JoAnne McCracken sharply criticized Barber, stating that he made "grossly misleading or false statements" in a letter on behalf of his client, the Rancho Palma Grande Homeowners Association, undermining his credibility and the defense's case.

Stephan A. Barber, a Salinas based partner with the firm who has been an attorney since 1976 without any public discipline, said in a phone interview Monday, "The judge's factual finding was based on her interpretation of a letter that I wrote six years ago, and I disagree with her interpretation. I testified in the trial and explained the meaning and intent of the letter to the court." He added that he has not been involved in the case since last July.

The Daily Journal received a copy of a State Bar complaint filed against Barber on Monday in connection with the case. He did not respond to an appeal regarding this.

Judge JoAnne McCracken wrote in a Statement of Decision on Feb. 26 that Barber and his client "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."

She wrote, "Barber was not a credible witness at trial and had no satisfactory explanation for his false statements" in a letter he sent to the City of Santa Clara and the Santa Clara Valley Water District

The lawsuit related to an abandoned well in the crawlspace under a Santa Clara condominium that began discharging water, according to McCracken's statement. The homeowner's association for the property withheld information from experts and ignored advice, failed to address the well and prevent fungal growth, mold, termite and water damage, which rendered the home uninhabitable, the judge's statement said.

The judge stated that Barber's letter on behalf of the Rancho Palma Grande Homeowners Association misrepresented the timeline of flooding at the property and the presence of mold.

The homeowners association was aware of the well problems and assumed responsibility for repairs but delayed fulfilling these obligations because of costs, the judge wrote.

At trial, the homeowners' association vice president and president during the litigation, Steve Moritz "acknowledged that Barber's letter was replete with falsehoods," the judge wrote. "He admitted he knew that Barber's claim that 'no mold has developed' was false."

She said the attorney claimed "no one with whom we consulted gives credence to the hypothesis there is an abandoned well" under the property.

The court found this statement false, quoting Moritz as admitting this at trial.

The judge's 61-page Statement of Decision repeatedly accused Barber of making false statements and omitting important facts.

The court awarded $1.8 million to the plaintiffs, including damages for negligence, nuisance, breach of fiduciary duty, constructive fraud and additional treble damages for elder abuse.

Attorney for the plaintiffs, Terence J. O'Hara, of O'Hara Creech LLP, said in a phone interview, "People ask me all the time how something like this could happen and the answer is pretty simple. All of the safeguards and guard rails that should have been in place failed, starting with their attorney, Steve Barber.

"He should have told the HOA what their duties and obligations were to their shareholder members."

O'Hara said the judge's award was the largest he could find in California in a dispute between a condominium owner and a homeowners' association.

"On a non-physical bodily injury issue this is the largest that I could find," O'Hara said in a phone interview. "As far as numbers go, I couldn't find another case in California [with a higher award]. From a lawyer's perspective that was kind of groundbreaking."

"The trial was unusual in its length," the judge wrote. "The trial and other hearings took place over 67 court days. The trial transcript is approximately 7,700 pages in length and documentary exhibits were voluminous."

The first phase of the remote trial started in Spring 2022. By the fall all witnesses had testified, and the parties were ready for closing but medical issues required a lengthy delay, O'Hara said.  He declined to specify on the record whose medical issues caused the delay.

The trial resumed in late 2023 and by April 2024 the judge issued her tentative ruling, while the parties moved on to deliberating expert fees. Once that wrapped up in 2024, the judge was ready to issue her final Statement of Decision. 

"Given the length of trial, volume of evidence and complexity of issues, the court extended time to permit a thorough review of the case and the court's tentative decision," the judge wrote.

The next phase will see the prevailing party attorney fees discussed, which should take a few months, according to O'Hara.