{"id":886309,"date":"2016-01-06T11:03:47","date_gmt":"2016-01-06T18:03:47","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=886309"},"modified":"2016-01-06T11:03:47","modified_gmt":"2016-01-06T18:03:47","slug":"11-defense-victory-in-breach-of-fiduciary-duty","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/11-defense-victory-in-breach-of-fiduciary-duty\/","title":{"rendered":"#11 &#8211; Defense Victory in Breach of Fiduciary Duty"},"content":{"rendered":"<p>Beverly Bevenflorez | Construction Defect Journal | February 26, 2015<\/p>\n<p>Earlier this month, Scott Calkins and Anthony Gaeta of Collinsworth, Specht, Calkins &amp; Giampaoli, LLP obtained a defense verdict in a breach of fiduciary duty action involving a high-rise condominium in downtown San Diego, California. The Association asked for excess of over $3 million, however, the jury returned with a 10-2 defense verdict in favor of K. Hovnanian.<\/p>\n<p>Cortez Blu Community Association, Inc. v. K. Hovnanian at Cortez Hill, LLC, et al. initially involved <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/requirements-tighten-for-construction-defect-claims\/\" target=\"_blank\">construction defect claims<\/a> against the developer, K. Hovnanian, and the general contractor, Turner Construction, as well as a claim of <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/unique-look-at-one-of-the-newest-aspects-of-construction-defect-coverage-and-a-broker-warning\/\" target=\"_blank\">breach of fiduciary duty<\/a>. However, the construction defect claims settled prior to trial leaving only the breach of fiduciary claim.<\/p>\n<p>\u201cWhile it is now becoming ever more common for attorneys representing homeowners associations to allege a <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/can-your-fee-dispute-rise-to-the-level-of-unfair-competition-maybe-but-not-this-time\/\" target=\"_blank\">breach of fiduciary duty<\/a> by the developer, there has been little actual litigation of the issues surrounding those claims which test the viability of the allegations or the defenses to them,\u201d defense attorney Anthony Gaeta stated. \u201cA breach of a fiduciary duty by a developer, which is demonstrated to damage the viability of an HOA either to perform regularly scheduled maintenance, or replace building components from its reserves, has the potential in economic terms to surpass the damages from purported construction defects.<\/p>\n<p>The Plaintiff argued that K. Hovnanian breached its fiduciary duty to the Association by failing to set adequate reserves within the initial Department of Real Estate budget (\u201cDRE\u201d) for painting, caulking, and power washing the exterior of the building, referencing Raven\u2019s Cove Townhomes, Inc. v. Knuppe Development Co., Inc. (1981) 114 Cal. App. 3d 783. In response, K. Hovnanian stated that in part, the initial reserves as set forth in the DRE budget were adequate, good faith estimates and, therefore, there was no liability for breach of fiduciary duty.<\/p>\n<p>\u201cOur case was exclusively concerned with the duties of the developer when forming the initial HOA, preliminary budgets, and reserves,\u201d Gaeta said. \u201cWe litigated&#8230;<\/p>\n<p><a href=\"http:\/\/constructiondefectjournal.com\/archives\/inside-issue\/2015\/02\/defense-victory-breach-fiduciary-action\" target=\"_blank\">To finish reading this article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Beverly Bevenflorez | Construction Defect Journal | February 26, 2015 Earlier this month, Scott Calkins and Anthony Gaeta of Collinsworth, Specht, Calkins &amp; Giampaoli, LLP obtained a defense verdict in a breach of fiduciary duty action involving a high-rise condominium in downtown San Diego, California. The Association asked for excess of over $3 million, however,&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/11-defense-victory-in-breach-of-fiduciary-duty\/\">Continue reading <span class=\"screen-reader-text\">#11 &#8211; Defense Victory in Breach of Fiduciary Duty<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[4,172,143],"tags":[9015,95,70],"class_list":["post-886309","post","type-post","status-publish","format-standard","hentry","category-construction-defects","category-construction-law-2","category-real-estate","tag-fiduciary-duty","tag-hoa","tag-homeowners-association","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>#11 - Defense Victory in Breach of Fiduciary Duty - Advise &amp; 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