Ruling reached in Eskaton appeal involving homeowner’s association | TheUnion.com
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Ruling reached in Eskaton appeal involving homeowner’s association

Victoria Penate
Staff Writer

An appellate ruling has been reached on a case involving Eskaton Village Grass Valley and homeowners, reversing part of a previously reached judgment and sending several aspects of the case back to a trial court.

It’s unknown how long it will take for a trial court to begin reexamining the case.

The suit, brought against the village’s homeowner’s association, two directors of the association’s board, and the directors’ employers, was filed November 2014.

In the suit, homeowners Robert Coley and Karen Lorini accused Eskaton President and Chief Executive Officer Todd Murch and Chief Operating Officer Betsy Donovan of managing the homeowner’s association to the benefit of Eskaton and detriment of homeowners.

Although Coley and Lorini moved to certify their action as a class action before it went to trial, Coley’s individual claims were severed from it in order to expedite their resolution. The hearing on the motion for class certification has been postponed until Coley’s claims are resolved.

Murch and Donovan were found in early 2017 by the trial court to have breached their duty to the association’s homeowners, and damages in the amount of $2,328, as well as $654,242 in attorney fees, were awarded to Coley — a decision both parties appealed.

Eskaton and the two defendants appealed on the basis that they should have been granted more deference, the court had misjudged their liability, and the attorney fees awarded were excessive.

Coley, on the other hand, filed a cross-appeal, saying the court should have found Murch and Donovan personally liable for their conduct, alleging the court wrongly rejected several of his claims.

According to the appellate ruling document, handed down June 11, the trial court is directed to enter a modified judgment finding Murch and Donovan liable for breaches of their fiduciary duties, recalculate damages and attorney fees awarded, and determine Murch and Donovan’s liability in those damages and fees.

Murch couldn’t be reached for comment.

When contacted, Coley declined to comment, stating he preferred questions be directed toward his attorney. Coley’s legal representatives couldn’t be reached as of Thursday afternoon.

NEXT STEPS

“The sticking point to putting an end to this case is the enormous amount of attorney fees,” said Tom Garberson, general counsel for Eskaton, in an email. “Based on the appellate ruling, we anticipate that the plaintiff’s award may be reduced by as much as 40%, and believe that the attorney’s fees should be reduced by a similar proportion.”

Garberson said the possibility of further appeal will depend upon the trial court’s subsequent rulings.

“Eskaton takes the court’s findings seriously and made early changes in cost apportionment to comply with the court’s ruling, in order to avoid problems while the case is ongoing,” said Garberson.

With regards to changes at Eskaton going forward, Garberson said, “Further discussions to potentially amend the HOA’s legal documents are pending final resolution of the case.”

Victoria Penate is a staff writer for The Union. She can be reached at vpenate@theunion.com.


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