Berding | Weil Community Association ALERT Newsletter
Legal News and Comments for Community Association Boards and Managers Issue #89 • March 2012
BerdingWeil Partners Scott Barton and Randy Paul Get $20 Million Construction Defect Settlement on Eve of Trial
In January 2012, after four years of litigation without any offer of settlement, our clients, owners of a major luxury resort, got their first offer ($6.8 million) from the lead defendant. It was inadequate, rejected and the matter was prepared for trial.
On March 7, following jury selection and just before opening statements, the general contractor, twenty subcontractors, and design professionals found enough money--$19,648,000--to settle the case. Added to previous settlements the total settlement was $20.7 million.
The case required more than 20 visits to the client's site and review of over 1,000,000 documents. 100 depositions were taken, coast to coast. The depth of BerdingWeil, attorneys and legal assistants, made it possible to put an effective legal team on this case while also taking care of the dozens of other cases that our attorneys handle every day. No other plaintiff's construction defect firm in California has similar resources or our trial track record. We like to settle cases as early as we can, but sometimes it is necessary to be trial ready, with real trial experience to back that up, to make settlement happen.
Congratulations to Scott, Randy, and your entire team!
When Community Associations Lose "Critical Mass"
The Consequences to a Community Association of the Loss of Human Energy
by Tyler P. Berding, Esq.
(Editor's Note: The following article comes from our historical file. It was written in 1997. Its message is equally applicable today--community associations which ignore proper management, fail to encourage owner involvement, and do not adequately fund for future repairs will deteriorate over time. It and various articles which followed it became the basis for "The Uncertain Future of Community Associations" essays.)
"Critical Mass" is a physics concept. Basically, it is defined as the smallest hunk of matter that will sustain a nuclear reaction. If the mass of the material is too small, it cannot generate heat or light. When the mass is adequate, it can support a chain reaction that will continue to produce energy. While it may be a bit of a stretch, we can also apply the critical mass concept to social phenomena. A group must have enough people to produce the creative energy necessary to accomplish the goals of the group. If the group is too small, it will not be sufficiently energized, and will fail to accomplish its purpose. When this happens, members become disillusioned, and quit the group.
The "critical mass" concept has parallels in economics. A business project without sufficient funding or creative energy to sustain it will eventually wither and die unless it gets a periodic influx of new economic and intellectual capital. Both for profit and non-profit companies and organizations must, therefore, maintain a certain economic "critical mass" to sustain their economic health. In a manufacturing concern, if sales of its products fall below the level needed to pay the overhead, the organization loses capital until it fails. If a charity fails to attract sufficient donations to fund its operational costs, it will also fail. This economic model does not apply, by the way, to those organizations that are funded by outside sources. Government agencies, for example, are basically on permanent "life support" and have no obligation to sustain their capital, and therefore can operate at a very inefficient level and still survive.
Meeting the energy requirements necessary to sustain the life of an organization depends on many factors, including marketing, production, and various forms of human energy. If any of these factors fall below a certain level, determined by the needs of that particular organization, the enterprise will eventually fail. The failure may be rapid or gradual, depending on how quickly "energy" is lost, but failure is inevitable unless the means of producing energy is restored.

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