Santa Clara HOA Lawsuit: A Landmark $1.8 Million Award for Deception and Negligence

In what is being called the largest financial award ever in a California HOA lawsuit, a Santa Clara couple has finally won their years-long battle against their homeowners' association (HOA) after uncovering an abandoned artesian well beneath their condo. The $1.8 million judgment against the Rancho Palma Grande HOA comes after extensive deception, negligence, and a failure to address a growing crisis that left the property uninhabitable for years (Hase, 2025).

The Hidden Well That Changed Everything

Doug Ridley and Sherry Shen, a retired couple, had planned to use rental income from their Santa Clara condo to fund their travels and family visits. But in 2018, their tenants noticed water pooling in the crawlspace under the unit—a discovery that would unravel a shocking reality. Beneath the condo sat a more-than-400-foot-deep abandoned well, a relic of Silicon Valley’s agricultural past. Initially, this seemed like an unfortunate but fixable problem. However, what followed was a saga of negligence, denial, and outright deception by the HOA.

HOA Negligence and Deception: A Systemic Failure

Instead of swiftly addressing the issue, the Rancho Palma Grande HOA ignored warnings, failed to disclose critical information, and actively misled authorities. Court documents revealed that the HOA knew about a map from the Santa Clara Valley Water District indicating the possible presence of a well but failed to share it with contractors. When experts raised concerns, the HOA dismissed them, and a proposal for water restoration was rejected over cost concerns. Meanwhile, the couple’s condo deteriorated. Mold spread, a strong odor made the home unlivable, and eventually, the ground beneath their living room caved into a sinkhole (Hase, 2025).

By early 2019, the HOA doubled down on deception. A newly hired attorney falsely claimed to city officials that no credible evidence supported the existence of an abandoned well. Even after more flooding and further expert warnings, the HOA remained dismissive. At trial, former HOA president Steve Moritz admitted he knowingly spread falsehoods, including denying the presence of mold. Despite all this, the HOA insisted the condo was still habitable.

The Legal Battle and Landmark Ruling

After years of inaction, the HOA finally excavated a large hole in the couple’s living room in early 2020, exposing the well. It was eventually destroyed, but the damage had already been done. Ridley and Shen’s condo remains uninhabitable, with exposed subflooring and unfinished repairs. The case dragged on for years, draining the couple’s finances and emotional well-being.

Judge JoAnne McCracken ultimately ruled in favor of Ridley and Shen, finding the HOA guilty of fraud, negligence, and elder abuse. The $1.8 million award covers lost rent, punitive damages, and emotional distress, marking it as the largest known award against an HOA in California for such violations (Hase, 2025). However, victory remains uncertain—the HOA has 60 days to appeal, potentially delaying compensation even further.

A Warning for HOA Residents Everywhere

This case serves as a cautionary tale for homeowners and condo residents nationwide. HOAs wield significant power, often backed by insurance companies and legal teams, making disputes difficult and expensive to fight. While many HOAs operate ethically, cases like this highlight the risks when an association prioritizes cost-cutting and deception over homeowners’ well-being.

For Ridley and Shen, the financial settlement is small consolation for the years of stress, legal battles, and lost income. Their case exemplifies why transparency, accountability, and legal safeguards are essential in HOA governance. Without them, homeowners can find themselves locked in a nightmare, fighting against the very organizations meant to protect their property values and quality of life.

Reference Hase, G. (2025, March 10). Award in Santa Clara HOA lawsuit is largest ever in California after extensive deception over abandoned well under condo. Silicon Valley News. Retrieved from https://www.siliconvalley.com/2025/03/10/award-in-santa-clara-hoa-lawsuit-is-largest-ever-in-california-after-extensive-deception-over-abandoned-well-under-condo/