August 14, 1998


Members, Pacific Renaissance Plaza
Residential I Assn.
c/o Mr. Steve Davenport, Facilities Manager
388-9th St. Suite 229
Oakland, CA 94607

Re: Pacific Renaissance Plaza Lawsuit

Dear Association Members:

As you know, my office is representing the Pacific Renaissance Plaza Residential I association in a lawsuit against the developer and others pertaining to certain construction and design problems at your complex. The Master Association is represented by Michael DiGeronimo and Sean B. Absher of the Miller, Starr & Regalia firm in Walnut Creek. I am writing to give you a brief update on the status of the lawsuit.

1. Filing of Complaint.

After negotiations with the Developer failed to produce a result, a lawsuit was filed on December 11, 1997. The lawsuit enumerates the defective conditions alleged to exist at the complex. A copy of the Complaint may be obtained from the association office on payment of reasonable copying costs.

2. Appointment of Special Master.

With the agreement of counsel for the Developer, we asked the Court to appoint Thomas Castle of Walnut Creek as the Special Master for your case. The purpose of the Special Master is to supervise the case, streamline it as much as possible, and make various orders designed to save time and money and to promote a reasonable out-of-court settlement if possible. Mr. Castle is a well-known and effective Special Master who is almost always able to facilitate out-of-court settlements in cases like yours.

Mr. Castle has met with attorneys for all parties, and has made various orders designed to speed resolution of the case.

3. Identification of Responsible Parties.

In addition to the Developer, responsible parties may include the Project Architect, the General Contractor, and a large group of subcontractors. In some cases, our office did not know which subcontractor had done defective work until we received documentation from the General Contractor and the Developer. We believe we have now identified and sued all parties responsible for the problems at the complex. Most of these parties have insurance, assets and other resources that can help pay for the necessary repairs.

4. Production of Records.

The Special Master has ordered that all parties produce records pertaining to the design, construction and maintenance of your complex to a central document depository. This saves time and money by eliminating the need for your attorneys to prepare separate requests for production of documents to each of the responsible parties, and by avoiding the time and expense of legal wrangling over what documents must be produced. The existence of the depository will allow our firm and our consultants access to the various construction documents that may be needed to determine exactly what went wrong in the field.

5. Additional Testing.

In June, our consultants completed additional testing that was necessary to determine the condition of various hidden components of the buildings. This was needed because the sources of water intrusion and other problems could not, in some cases, be identified without removing the exterior finishes. Your consultants are preparing a report on the findings of the testing, which will be available shortly. Consultants for the various defendants attended and observed the testing so they could see the conditions for themselves.

6. Upcoming Meeting of Experts.

The Special Master has ordered that the experts for the Association and for the various defendants get together to discuss their observations and recommendations, and to attempt to agree upon a scope of work for the remedial work. The experts’ meeting will take place on July 29, 1998.

It often happens that cases like yours can be settled out of court if the consultants are able to agree upon what is going wrong, how extensive the problems are, and what needs to be done to correct the conditions. In your case, we have reminded counsel for the Developer that the Developer still owns property at the complex, and that it is therefore in the interest of the Developer to work with us to pressure the insurance companies for the responsible parties to pay for the necessary work before conditions get worse and property values decrease. It often takes several months to reach a resolution, once the responsible parties and issues have been identified, however. As you might imagine, each of the defendants contends that it did nothing wrong, and that the problems must be the fault of someone else, or must not be as severe as we think they are. Furthermore, in cases of this kind, we may be dealing with dozens or hundreds of different insurance companies. This is good, in that it gives us a significant source of recovery, but, as you might imagine, no insurance company likes to pay out money, and most will refuse to pay until they are sure there is no other way out! So please understand that we are making progress, but that a resolution will likely not come overnight.

The Special Master hopes to work with the consultants to facilitate a settlement as soon as possible. However, should that prove impossible, the case will be set for trial, and we will begin getting ready for the trial.

I will write you again when there are additional significant developments to report. Since the Association is on a budget, it will not be possible for me to answer individual questions from owners; however, I will keep you updated with future Disclosure Letters, and will also likely attend the Annual Meeting of your Association and make a report at that time.

This letter can be furnished by you to any potential purchaser of your home, and to any lender in connection with a requested refinancing of your loan.

Mr. Absher, Mr. DiGeronimo and I are committed to working with your Board and consultants toward a satisfactory resolution of your claim as quickly and as cost-effectively as possible.

Very truly yours,


Ann Rankin


cc: Sean B. Absher, Esq.
     Michael DiGeronimo, Esq.
     Jane K.Penhaligen, Esq.