Facts

Plaintiffs Jack M. Langson and Shanaz S. Langson, individually, and as Trustees of the Jack and Shanaz Langson Trust u/a dated 4/25/09 (the plaintiffs) sued their homeowners association, Bayshores Community Association, located in Newport Beach, alleging arbitrary and bad faith efforts to prevent the Plaintiffs from lawfully building their 11,600 sq. ft. home on the Plaintiffs' two bayfront lots located at 2636 Bayshore Drive, Newport Beach, California 92663.

Prior to litigation, plaintiffs made four separate submissions and revisions of their proposed construction plans for the subject property to the Association's Architectural Review Committee ("ARC"), beginning in November 2019. When the ARC continued with unwarranted denials of plaintiffs' proposed construction plans, plaintiffs then brought the matter to the Board of the Association on May 27, 2020. The Board also denied plaintiffs' request to overrule the ARC on June 8, 2020, with the Board vaguely claiming that plaintiffs' proposed home was "not in harmony with the community".

Plaintiffs filed their lawsuit against the Association on Dec. 21, 2020, alleging, among other things, violation of the CC&Rs, breach of fiduciary duties, breach of the implied covenant of good faith and fair dealing, etc.

PLAINTIFF'S CONTENTIONS: Plaintiffs contended that the Association's denial of plaintiff's construction plans for the subject property was arbitrary and in bad faith.

DEFENDANT'S CONTENTIONS: The Association contended that they had discretion to deny any plans that they felt were "not in harmony with the community".

Insurer

Farmers Insurance

Settlement Discussions

The parties utilized the mediation services of JAMS and Hon. Franz E. Miller (Ret.).

Damages

Plaintiffs sought compensatory damages of $2.5 million, including approximately $900,000 in out of pocket costs related to preparation and revision of architectural plans and submission of same to the Association on four occasions.

Result

Extensive discovery ensued along with various continuances, and the case was eventually set for trial on March 11, 2024. Settlement was agreed upon a few weeks before trial, and the settlement payment of $1 million from the Association to the Plaintiffs was made on Feb. 28, 2024.