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CONFIDENTIAL

May 3, 2005

Contracts
Breach of Contract
Construction Defect

Confidential

Settlement –  $3,497,000

Facts

The plaintiff is a condominium homeowner's association established to manage a common interest development known as Stonefield Condominium Association. The Stonefield Condominiums consist of 122 units. The plaintiff alleged that the Stonefield property was originally developed by the defendant George Michael Shipsey, dba Shipsey Construction (Shipsey). The plaintiff also alleged that Carpenters Pension Trust Fund of Northern California, Pension Trust Fund for Operating Engineers, Northern California Plastering Industry Pension Fund, Sheet Metal Workers Pension Trust Fund (Pension Funds) were the construction lenders to Shipsey. Shipsey, as the general contractor, entered into subcontracts with subcontractors and material suppliers who supplied work, labor and materials in connection with the construction of the property. Due to Shipsey's default on the construction loans with the pension funds, and the subsequent bankruptcy of Shipsey, the Pension Funds foreclosed on the Stonefield property. Thereafter, the Pension Funds retained Morrison Karsten Group as a project manager to repair, complete and market the units. The remainder of the project was completed by Wright Contracting Inc. who subcontracted with various subcontractors and material suppliers.

Settlement Discussions

A settlement was negotiated between the parties on Dec. 9, 2004 with the plaintiff settling all claims for $3,497,000. Retired Judge William L. Bettinelli served as the Special Master.

Other Information

PLEASE PROVIDE THE SETTLEMENT DATE


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