After a long and protracted public dispute, the parties involved in the DACHA lawsuits announced Wednesday afternoon that they had reached an agreement for a complete settlement.
Twin Pines Cooperative Foundation (TPCF) and Neighborhood Partners (NP) sued DACHA (Davis Area Cooperative Housing Association), the City of Davis and the Davis Redevelopment Agency in two separate lawsuits, both related to the DACHA limited equity cooperative affordable housing project. The cases have been pending for several years and were scheduled for trial in June 2013.
The settlement enables “All pending lawsuits and claims against the City, the Davis Successor Agency to the Redevelopment Agency, DACHA and its members will be resolved.”
The settlement further allows, “All claims and judgments that TPCF and/or NP have against DACHA and its members, including the NP’s arbitration judgment against DACHA, will be irrevocably assigned to the City and the Successor Agency.
“The City will hold harmless any claims by DACHA against either NP or TPCF. NP obtained funds from DACHA that partially satisfied its arbitration judgment so that, by NP’s calculation, the amount of the arbitration judgment remaining to be satisfied is about $350,000. This will avoid or resolve all claims and actions by TPCF and NP against the former members of DACHA so that the former DACHA members can also put these matters behind them.”
According to the press release, the Successor Agency and the City will pay the parties $315,000, to be divided as they see fit. The City will also return to NP the $15,000 in attorneys’ fees it paid to the city by court order last summer.
The agreement also contains a clause that prohibits the two sides from disparaging each other about DACHA. The press release states, “To facilitate the Settlement and future policy discussions of affordable housing in Davis, the parties agree to resolve this matter amicably, and not to disparage each other about DACHA or to continue to rehash the issues that led to these lawsuits.”
At the same time, “The parties will remain able to participate in policy discussions related to affordable housing and cooperative housing and to discuss DACHA on a ‘looking forward’ and ‘lessons learned’ policy basis.”
Finally, the parties will bear their own attorneys’ fees and costs.
In addition to ending the dispute between the City and the principals from Twin Pines and Neighborhood Partners, the Vanguard confirmed that this ends any legal entanglement for the former DACHA residents.
It was nearly a year ago, in arguing for the dissolution, that Attorney Elaine Roberts Musser argued, “DACHA is left incapable of defending itself, because corporations are required to be represented by an attorney, and no lawyer has been willing to take the case.”
“As long as DACHA technically remains in existence, burdened with two more potential default judgments, DACHA’s judgment creditors will use these judgments to continue severely abusing legal process,” Elaine Roberts Musser argued.
“DACHA is dead,” DACHA President Ethan Ireland explained to council. “It went into cardiac arrest when its accounts were levied, and it finally expired when its properties were foreclosed upon and sold at auction. It’s a corpse; it has nothing but liabilities and it exists on paper only.”
However, it represents a very dangerous corpse. “As long as this corpse – the corpse of DACHA – remains unburied, DACHA’s creditors, represented by Neighborhood Partners and Twin Pines, will never stop in their efforts to revive it – to save their own business reputations. Their desperation to exact vengeance has driven them to attempt conjuring up the dead,” he said.
“We live in fear,” he said. “Fear of our doorbells and mailboxes. Fear that upon opening the door there will be yet another process server with yet another subpoena in hand ordering us to yet another round of questions structured to only have wrong answers. Fear that there will be yet another shrewd and legally questionable attempt to levy our personal accounts.”
With this settlement, the former members of DACHA are now able to move on.
In November, the Vanguard reported that Twin Pines and Neighborhood Partners made an offer to the city to settle their dispute. The matter was scheduled for city council consideration during closed session of the council meeting. Attorneys for the City confirmed the amount was for $875,000, which the city quickly rejected and made a substantially reduced counter offer of $185,000.
This is considerably less than the offer made back in back in April of 2010 when Stephen Souza, on behalf of the city council or perhaps acting on his own, “conveyed a settlement offer to Neighborhood Partners and Twin Pines of $300,000.”
Early this year, the city offered another settlement, this time for $280,000.
At the time, the city council wrote, “This offer is more than reasonable, since nearly two years of additional attorney’s fees have been accumulated to the detriment of the City’s Affordable Housing program and, unlike the April 2010 offer, this offer cannot preserve DACHA because the City now owns the DACHA units and the DACHA Board is pursuing full dissolution of the co‐op.”
They continue, “Neighborhood Partners and Twin Pines have turned down this settlement offer as well, but the City has re‐extended the offer in hopes of reaching a reasonable settlement. This is a critical time in the legal disputes, as significant expenses will be incurred by all parties in upcoming months if Neighborhood Partners and Twin Pines continue to press their cases via litigation.”
David Thompson and Luke Watkins turned down the offer, in part because it did not include a settlement to Twin Pines. Some on the council objected that Twin Pines had no discernible damages, but David Thompson told the Vanguard that it would naïve of them to expect Twin Pines to drop their contentions and illegal of him to convince the non-profit to do so because he received a personal settlement offer (as a principal of Neighborhood Partners).
The Vanguard criticized the city at the time for not being serious about settling the case. While the city’s offer was still far less than the original offer from the plantiffs, it marked a healthy step up from what the city offered just a month ago.
A separate statement from Mayor Joe Krovoza read, ” I appreciate the hard work of all parties to resolve this dispute so we can all move forward with the important work of maximizing affordable housing in Davis.”
“I am very pleased and impressed that our current council stepped up to resolve a major issue that blossomed long before our respective elections to public service,” he added.
The Vanguard was unable to reach David Thompson of Neighborhood Partners for comment.
—David M. Greenwald reporting
About damn time, three years late, in fact. How much of our tax money went to our city attorney’s law firms during this period of resistance to a settlement (when it was obvious that both “sides” shared responsibility for DACHA’s failure)?
We won’t get the proof for David Thompson’s claims about city expenditures over the year–a likely reason for the city to get more reasonable and shove this disaster under the rug forever.
You were right, David, when you called for a real evaluation into what when wrong here. I suspect no one has the stomach for it now. And, since we don’t have a stream of RDA money to waste one these games anymore, maybe we don’t need to figure out how to keep the DACHA debacle from repeating.
Finally, maybe David and Rich finally can get together for lunch.
I hope the city has learned its lesson and from now on runs its own affordable housing programs, avoiding getting involved in convoluted deals such as this was.
David, remind us what the dollar amount for court case settlement in favor of NP was a few years ago…..thx.
$331,000
thanks….
We also won’t get a ruling on the claims but it is obvious that TP and NP felt they had more to lose by trying the case than they would gain by settling it.
Congratulations on moving past this
SODA: [i]. . . court case settlement . . .[/i]
DG: [i]$331,000[/i]
Court? I thought that was an arbitrator’s decision.
It was
“The agreement also contains a clause that prohibits the two sides from disparaging each other about DACHA.”
Thankfully, everyone but the two sides can disparage either or both sides as much they want from now until the end of time.
Good to not disparage, also good to never become involved with each other again.