Sullivan v. Washington Mutual Bank FA et al

Filing 185

ORDER re 183 Letter. ADR referral remains in place. Signed by Judge Edward M. Chen on 6/21/16. (bpfS, COURT STAFF) (Filed on 6/21/2016)

June 16, 2016
Honorable Edward M. Chen, District Judge
U.S. District Court, Northern District of California
450 Golden Gate Avenue, Courtroom #5, 17th Floor
San Francisco, California 94102
Re:

Joint Letter, Sullivan v. Washington Mutual, et al., Case No. 3:09-cv-02161-EMC

Dear Judge Chen:
On June 2, 2016, plaintiff Katy Sullivan (“plaintiff” or “Ms. Sullivan”) and defendants
JPMorgan Chase Bank, N.A. (“Chase”), California Reconveyance Company (“CRC”), and U.S.
Bank National Association, as Trustee, etc. (U.S. Bank, and collectively, “Defendants” or “the
Bank”) (jointly, the “Parties”) came before this Court for a case management conference to
discuss outstanding issues between the parties. Your Honor directed the parties to meet and
confer to resolve the issues and file a joint letter informing the outcome to the Court. Pursuant to
the Court’s order, the parties hereby submit the following joint letter.

The Subject Property
This case arises from a dispute between plaintiff and defendants over property located at
2628-2628A Sutter Street, San Francisco, California (“Property”). Pursuant to a settlement
agreement dated February 5, 2015, plaintiff transferred title and interest to Unit 2628A (“lower
unit”) to defendants. Plaintiff retained ownership of all other portions of the subject property
including Unit 2628 (“upper unit”), the basement, and parking area. The parties have met and
conferred on several post-settlement issues concerning structural repairs to the exterior porch
area attached to the lower unit, the increased charges to plaintiff’s modified loan, the increased
charges to plaintiff’s water bill, the theft and vandalism to plaintiff’s property, and plaintiff’s
proposal to purchase the lower unit from defendants.

PLAINTIFF’S STATEMENT:
A. Structural Repairs Issues are Almost Resolved
The parties met and conferred regarding the issue of whether Ms. Sullivan is responsible
for certain structural repairs on the Property. John Sorich, counsel for Defendants, conveyed that
defendants are only aware of structural repairs to the lower unit’s rear porch area. Mr. Sorich
indicated that defendants are solely responsible for these structural repairs and would not be
asking Ms. Sullivan to share in the costs of such repairs. Ms. Sullivan wants to memorialize this
agreement in an addendum to the settlement agreement to avoid any future misunderstanding.

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Hon. Edward M. Chen
June 16, 2016
Page 2 of 4

B. Increased Charges to Current Loan are Possibly Resolved
The parties met and conferred on the issue of increased charges to Ms. Sullivan’s current
modified loan. Mr. Sorich has investigated this issue and determined that the increased charges
were a result of improper property taxes (defendants’ property taxes for the lower unit) charged
to Ms. Sullivan’s escrow account. Mr. Sorich indicated that defendants have reimbursed Ms.
Sullivan for the “amount of overpayment” (neither Counsel nor Ms. Sullivan know the exact
amount at this time). Mr. Sorich indicated that an amount of $3,471.31 have been refunded to
Ms. Sullivan’s account. Mr. Sorich indicated that all future loan statements will reflect the
previously agreed upon monthly mortgage payment amount ($3,094.51 per month). Ms. Sullivan
has not received any refunds as of the filing of this letter. Ms. Sullivan’s most recent loan
statement, received on the week of June 6, 2016, continues to reflect a monthly payment of
$4,155.19, due July 1, 2016. This has to be corrected. The parties will continue to meet and
confer to ensure that the full reimbursement is made and that the revised loan statements are
accurately stated by defendants.
C. Increased Charges to Water Bill – No Commitment Yet
The parties met and conferred regarding the issue of Ms. Sullivan’s monthly water bill
doubling since defendants began entering the Property in late March 2016. There is only one
water bill account for the entire property as the condominium conversion did not require the
separation of the water bill account. Mr. Sorich indicated that he received no information from
defendants’ vendor to suggest that they left the water running in the lower unit. Mr. Sorich stated
that the lower unit has not been occupied and there has been no water usage. Mr. Sorich has
requested that Ms. Sullivan produce the water bills to determine the amount of the water bill
increase. Ms. Sullivan believes the water bill has increased by approximately $100 for the
months of April, May, and June 2016. Ms. Sullivan previously produced notices from the Public
Utilities Commission reflecting continuous water use on the Property. Ms. Sullivan will also
produce the most recent water bills to defendants. Mr. Sorich and defendants have not indicated
that they would reimburse Ms. Sullivan for the amount of the increased water bill charges. Ms.
Sullivan renews her request that defendants provide the contact information of its vendor who
handles maintenance for the lower unit, so that this issue may be resolved directly with the
vendor.
D. Theft and Vandalism – No Commitment Yet
The parties met and conferred regarding the issue of theft and vandalism to the Property.
Ms. Sullivan believes that defendants are liable for the acts of its agents, contractors,
subcontractors, and their insured. Defendants disagree, but ask that Ms. Sullivan provide
information regarding the value of the patio furniture taken. Ms. Sullivan believes that the cost of
replacing the patio furniture (1 table, 1 bench, and 4 chairs) is approximately $2,000. Ms.
Sullivan renews her request that defendants provide the name and contact information of all
contractors, vendors, and agents entering the Property to alleviate her safety concerns.

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Hon. Edward M. Chen
June 16, 2016
Page 3 of 4

E. Proposal to Purchase Lower Unit
The parties met and conferred regarding Ms. Sullivan’s proposal to purchase the lower
unit from defendants. Ms. Sullivan will present an offer for purchase this week.
F. Whether Referral to ADR for Mediation is Required
Ms. Sullivan believes that the parties will be best served by a return to mediation in order
to wrap up all issues herein outlined in one addendum to the settlement agreement. Ms. Sullivan
believes that a half day mediation will complete this process.

DEFENDANT’S STATEMENT:
On Tuesday, June 14, 2016, John Sorich, counsel for JPMorgan Chase Bank, N.A.
(“Chase”), spoke with attorney Kevin Liu, counsel for Ms. Sullivan, regarding the issues
identified herein. Chase’s position on the issues is as stated below.
A. Structural Repairs
Mr. Sorich disputes the representations attributed to him in Ms. Sullivan’s discussion of
this issue. Mr. Sorich did not state that he or his client are “only aware of structural repairs to the
lower unit’s rear porch area,” because Mr. Sorich is not aware of whether structural repairs are
required or not to the lower unit’s rear porch area or any other portion of the property. Chase
maintains its previously stated position -- per the terms of the recorded CCRs, the owner of each
unit is responsible for the repairs to its/her individual unit and the Association is responsible for
repairs to common areas.
B. Increased Charges to Current Loan
Upon learning of this issue, Chase investigated and discovered that it had inadvertently
billed Ms. Sullivan for taxes for both units. This billing error has been corrected and the amount
of $3,471.31 has been refunded to Ms. Sullivan’s escrow account. Mr. Sorich likewise disputes
the statements attributed to him in Ms. Sullivan’s discussion of this issue. Mr. Sorich did not
state that a check was mailed by Chase to Ms. Sullivan, nor would he have, because he only
confirmed to Ms. Sullivan’s counsel today that the monies had been refunded.
C. Increased Charges to Water Bill
Upon learning of this issue, Chase looked into it but has not found any information to
confirm that anyone working in its unit left the water running. Chase has received
documentation from Ms. Sullivan showing recent water changes, but that documentation does
not reflect that any excessive charges were caused by someone leaving the water running
unattended in Chase’s unit. Nonetheless, in an effort to resolve the matter, Mr. Sorich has asked
Ms. Sullivan’s counsel for the amount of the water bill in excess of the “normal” monthly
charges.

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Hon. Edward M. Chen
June 16, 2016
Page 4 of 4

D. Theft and Vandalism
Upon learning of this issue, Chase looked into it but was not able to find any information
to suggest that individuals working in Chase’s unit misappropriated Ms. Sullivan’s personal
property. Ms. Sullivan’s counsel advised Mr. Sorich that they have evidence that individuals
working in Chase’s unit took Ms. Sullivan’s patio furniture. Mr. Sorich has asked for whatever
documentation Ms. Sullivan’s counsel has to support her contention. Mr. Sorich also asked for
documentation showing the value of the patio furniture that was purportedly taken. To date, that
information has not yet been provided.
E. Proposal to Purchase Lower Unit
Based on prior communications with Ms. Sullivan’s counsel, Mr. Sorich understands that
Ms. Sullivan’s brother intends on submitting an offer to Chase to purchase Chase’s unit. To
date, Mr. Sorich has not received any such offer. Mr. Sorich believes that Chase may be actively
trying to market and sell its unit, so if Ms. Sullivan’s brother intends on submitting an offer, he
should do so sooner rather than later.
F. Whether Referral to ADR for Mediation is Required
Chase does not believe that a referral to ADR for mediation is necessary because there
are no outstanding issues remaining from the settlement of the underlying lawsuit which was
dismissed months ago. With the possible exception of the tax issue discussed above, which has
now been addressed, none of these other issues implicate the terms of the settlement agreement.
It is plain that Ms. Sullivan is attempting to modify the settlement agreement rather than enforce
it. Chase will not agree to any modification of the settlement agreement Therefore, there is no
basis or reason to refer the matter to ADR.

Respectfully submitted,
/s/ Therese Y. Cannata
THERESE Y. CANNATA
Attorneys for Plaintiff
KATY SULLIVAN
Also known as Katy Marie Sullivan

Respectfully submitted,
/s/ __John M. Sorich__________
John M. Sorich
Attorneys for Defendants
WASHINGTON MUTUAL, et. al.

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IT IS SO ORDERED. ADR referral remains in place.
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Edward M. Chen
U.S. District Judge
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Dated: June 21, 2016

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