Legal Update – Feb. 5, 2021

From David Andersson, Attorney for Class Members

Our hearing of January 22, 2021 resulted in significant progress in our litigation against 18 Paradise, LLP and MJ Management, LLC.

The Court sees the Sixth and Seventh Amendments as suspect and worthy of further scrutiny. The Court declared, “Nothing in this ruling serves to establish that the Sixth and Seventh Amendments are valid in fact or law.” In addition, the Court provided a useful roadmap for the Class Members to have the Amendments ruled invalid at our next hearing on the matter, which will most likely be scheduled in March.

The Court recognized a long-standing legal rule as to “Whether the conduct of the Defendants 18 Paradise LLP and MJ Management was reasonable and consistent with the general plan of development.”

Another important finding of the Court was that “Defendant 18 Paradise has ratified the actions of MJ Management” with respect to the Sixth and Seventh Amendments. 18 Paradise presented evidence that it “fully authorized” MJ and Mick O’Bryan to make the Amendments to the CC&Rs. Therefore, if/when the Court rules to invalidate those Amendments it will be ruling against 18 Paradise and an award of damages can then be registered against the golf course property.

The Court invited us to identify the common open space “of the development in which all homeowners have a collective interest.”  We plan to return to Court immediately to provide the Court with an opportunity to make a formal determination of the “common open space” as defined in the CC&Rs.

The Court is also interested in understanding the mechanism within the CC&Rs by which Class Members can form a governing homeowners association.

As part of the January 22, 2021 proceedings the Plaintiffs entered important evidence into the Court’s record of the misappropriation of over $200,000 diverted to the Sea Links golf course being developed by MJ Management and 18 Paradise owner Morris Chen.  This misappropriation was disclosed by 18 Paradise in response to the Plaintiffs’ discovery request.