Almanac

News - October 27, 2010

Homeowners file $10 million suit against Atherton

• Couple alleges that the town's building department was negligent in ensuring that their new house is safe and built to code.

by Renee Batti

The town of Atherton has been hit with another lawsuit, this one by homeowners charging that the town and its building department's "gross negligence, fraud and breach of duties" have cost them millions of dollars and severe emotional distress.

Kimberly Sweidy and her husband, Raymie Stata, filed the lawsuit on Oct. 20 in San Mateo County Superior Court, seeking at least $10 million in damages.

In addition to the town, the lawsuit names two former building officials — Mike Hood and Mike Wasmann — as well as consultant Michael Cully.

The lawsuit charges the defendants with breach of duty, fraud, conspiracy to breach duty, and a "taking" of property, which the couple says has substantially decreased in value "due to the unfinished or improper design and construction."

In addition to asking for damages "in excess of $10 million," the couple is asking for punitive damages against Mr. Wasmann, charging that he "acted with malice, fraud, oppression, evil motive or intent, or with reckless/callous disregard of and indifference to" their rights, interests and well-being.

Mr. Wasmann, communicating through a building department staff person, declined to comment for this story.

Contacted by The Almanac late last week, City Attorney Wynne Furth said the town had yet to be served with the lawsuit.

Ms. Furth noted that when Ms. Sweidy and Mr. Stata filed a claim with the town earlier this year, the matter was forwarded to the town's insurer. Atherton has insurance coverage through the Association of Bay Area Governments (ABAG), and that carrier would be expected to pay most damages against the town.

Behind the lawsuit

Ms. Sweidy, Mr. Stata, and their two daughters moved into their 8,000-square-foot Atherton home on Broadacres Road in 2007, after a years-long period of construction.

After moving in, they discovered major structural deficiencies, inadequate plumbing and electrical work that doesn't comply with building code requirements, and a long list of other problems. They are now spending millions of dollars to make the house structurally sound and repair other problems.

Plan reviews for the home, as well as regular inspections and the final sign-off on its code-compliance and safety, were performed or overseen by the town's building department. At the beginning of the project, the department was headed by Mr. Hood, who abruptly retired in 2006, then by Mr. Wasmann. Mr. Wasmann retired in August amid charges by the couple and other residents that he didn't have proper credentials and qualifications to head the department.

Defendant Michael Cully was named because, according to the lawsuit, he issued the occupancy certificate as an employee of CGS Consultants. The town contracts with CGS Consultants to perform some of its building department duties.

Go to alturl.com/y4o5k to see an Almanac article in August about the couple's complaints against the town.

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