By Clark Mason Press Democrat Staff Writer
Attorneys involved in a property dispute in which a Sea Ranch homeowner had his $300,000 coastal home sold out from under him to collect $567 in delinquent homeowner's dues have failed to reach a compromise in the case.
Lawyers met last week with Sonoma County Municipal Court Judge Gayle Guynup to discuss a potential settlement, but were unable to agree on a dollar amount.
Patrick Mahaffay, the Sea Ranch resident who lost title to his house when the association foreclosed on his property to collect the back dues, offered to contribute an undisclosed amount to get his home back.
The new owners would have recouped their $2,403 purchase cost in addition to attorney fees and other expenses totalling about $14,000, according to Michael G. Miller, Mahaffay's Santa Rosa attorney.
Sea Ranch attorney Dave Feingold of San Rafael said The Sea Ranch, actually its insurance company, was willing to chip in $10,000 to the new owners of the house to end the litigation and give the property back to Mahaffay.
But the new owners, Bob Dixon and Cathy Liner, who operate a Sebastopol partnership known as Real Estate Recovery Inc., rejected the package offer as too low.
"I'm thoroughly disgusted," said Miller. "There was a proposal in front of them to reimburse them for every penny they put out and put thousands of dollars in their pocket - and they refused. It's money falling out of the sky for them and it's just not enough."
Dixon on Monday would only say that he had a larger figure in mind for a settlement and the two sides were "substantially apart."
"I'm not at liberty to disclose terms," said Dixon, who also has a hypnotherapy practice in Sebastopol. "We put in an offer and they put in an offer. Both sides turned it down."
Feingold, however, said Real Estate Recovery wanted to keep title to the $300,000 home and give Mahaffay $100,000 to end his litigation.
Dixon said Mahaffay needs to come up with a better offer than he did last week.
"Mahaffay sees himself as a victim," Dixon said. "He's not a victim. He made his own bed."
Mahaffay, a 44-year-old carpenter, owned the house free and clear until he got seven months behind in his homeowner association dues during a period when work was scarce. He claims he never received the numerous notices mailed to him warning that his home was about to be foreclosed on and would be sold if he did not pay up.
At a court hearing in January, testimony showed that most of the 17 letters mailed by the Sea Ranch Association to Mahaffay were sent to the wrong address or returned unopened. Mahaffay also claims he never saw a prominent foreclosure notice posted on his door.
Critics say Sea Ranch officials should have tried to personally contact Mahaffay to let him know he was about to lose his home. But Sea Ranch attorneys say he had the opportunity up to the last minute to pay what he owed and stop the foreclosure process, but failed to do so.
Ironically, because Mahaffay owned the house free and clear and there was no mortgage, it was easier to foreclose on his home. If a bank or financial institution had a stake in it, it would have been notified of the association lien and likely have stalled the process.
After the title changed on Mahaffay's home, he sued The Sea Ranch Association; its manager, Jerrold Gonce; Bay Counties Foreclosure Service, the company hired to sell his home at auction; and Real Estate Recovery, which bought the house.
Mahaffay said he just wants to get his home back in his name, although he also asked the court to award him general damages.
Real Estate Recovery has filed a so-called "unlawful detainer" action against Mahaffay in an attempt to evict him.
That action was put on hold until the settlement conference but now will apparently go ahead sometime in June. Miller said he will seek a jury trial.