July 29, 1999

Watergate Community Association
c/o Mr. Tim Sutherland
8 Captain Dr.
Emeryville, CA 94608

Re: Watergate Community Assn.: Disclosure Letter: Drozdowska Litigation

Dear Members:

The purpose of this letter is to disclose pending litigation filed against Watergate Community Association by Elizabeth Drozdowska. The lawsuit is filed as Action 812918-5 in Alameda County Superior Court.

The plaintiff alleges she will ask the Court to certify her case as a class action on behalf of all Watergate residents with mobility problems. In order to have the case certified as a class action, the plaintiff would have to file an evidentiary motion and sustain the burden of proving that the case met legal standards concerning numerosity of similarly-situated plaintiffs, adequacy of class representatives, typicality of claims, and predominance of common questions of law and fact over individual issues. To date, plaintiff has filed no such motion.

The lawsuit alleges that Watergate Community Association has violated various state and federal laws prohibiting discrimination against the disabled, because the clubhouse at Watergate, known as the Clipper Club, is not handicapped accessible, and because a portion of the plaintiff’s dues are utilized to maintain the Clipper Club.

Watergate Community Association has tendered the defense of this claim to its insurer. Watergate Community Association intends to deny plaintiff’s claims, and has various defenses available. For example, the Clipper Club was designed and built prior to the enactment of the Americans with Disabilities Act, and the structure complied with laws then in effect. Therefore, Watergate Community Association contends, the law does not require the Association to retrofit the Clipper Club so it will be handicapped accessible, but only requires the Association to make any modifications that are "readily achievable." Watergate Community Association has previously investigated the feasibility and cost of various installations that could make the Clipper Club accessible to disabled persons, and has determined that none of them is affordable for the Association and that given the configuration of the building, none of the modifications proposed would be "readily achievable." In addition, Watergate Community Association does not believe any state or federal statutes require it to pro-rate assessments paid by members and to excuse disabled persons from paying for whatever small portion of the assessments is attributable to maintenance of the Clipper Club. Finally, the Department of Housing and Urban Development ("HUD"), the agency that enforces the American with Disabilities Act, previously investigated a similar complaint by a disabled resident that she was unable to use the Clipper Club and that this violated her rights under various state and federal statutes that protect the disabled. HUD determined that the Association had not committed any violation, and did not recommend any legal action be taken. Counsel for plaintiff was informed of the HUD investigation, but she nevertheless filed suit.

Plaintiff’s complaint also alleges that Watergate Community Association rents or sells property at the complex. The Association contends that these allegations are not true, and that all sales and rentals are conducted by the Watergate Sales Office, a separate organization that is not owned or controlled by Watergate Community Association.

Plaintiff seeks compensatory and punitive damages in unspecified amounts.

The case has not been assigned a trial date, and Watergate Community Association has not yet filed a responsive pleading in the lawsuit. Plaintiff has the burden of proving her allegations, and the burden of showing the lawsuit is suitable for class action treatment. The complaint is a matter of public record, and a copy may be obtained from Alameda County Superior Court, 1221 Fallon St., Oakland, CA 94612.

Very truly yours,


Ann Rankin