Friday, August 28, 2009

Horseshoe Cove Landslides—Bowen Letter

On May 6, 2003 rain set off landslides in a Maggie Valley, North Carolina subdivision. This event threatened homes, damaged roads and prompted legal action.

The Horseshoe Cove residential community was designed and developed by Don Condren, Doncon, Inc.

The following is a copy of the letter that Mr. Bowen sent apprising other property owners of the situation in Horseshoe Cove.

Darell Bowen
12669 Headwater Way
Wellington, FL 33414

June 19, 2003

Dear Horseshoe Cove Property Owner:

I have now been in Maggie Valley for a week. During this time, I have personally walked the area to review the damage, met with Pam Williams to discuss the May 31st meeting and met with our attorney to discuss our future options. I have also opened a bank account of “Horseshoe Cove Property Owners” so that we have a place to collect funds and pay bills for whatever we decide to do. I rented a post office box in Maggie Valley so checks can be sent there. Pam will check the box regularly and make deposits. I will maintain the checkbook and will set up an accounting system so you can all receive regular financial statements.

Within a few days you will receive a letter from our law firm outlining a plan of action and the approximate cost of such. We are asking each property owner to send a check for $500.00 to P. O. Box 1102, Maggie Valley, N.C. 28751. If everyone sends their money in quickly we should be able to complete the groundwork necessary before pursuing parties responsible for the mess we are facing. Hopefully this can all be finished by the middle of July. (Atty. Review, engineering report, etc.). At that time we can decide whether we need to make some repairs and seek restitution from the responsible parties or we work our way through the legal system to force the responsible parties to make repairs. You will note that I keep referring to parties because I think several people may be sharing in this responsibility including the developer, engineers, Haywood County, Town of Maggie Valley, contractors and possibly even the state of N. C. Again, this will be determined during the
attorney and engineering review stage.

It is very clear to me that everyone of us in Horseshoe Cove is affected by the current situation. Our property values have declined substantially, if we sell at all. Those of you that are renting are being affected by loss of rental income. At this point, none of us can rent or sell without first disclosing this situation to any potential tenants or buyers. Currently there is a potential danger to every one of our homes. Some areas are more dangerous than others. First of all, there are two spots on Bridle Drive, one on Stirrup and one on Creekside where the road could completely wash out very easily. If the one spot on Bridle goes, so goes the sewer, which will effect all of us. Secondly, there are some boulders placed up on Stirrup that are going to come loose at some point. When they do there is the potential to damage property and injure people down on Bridle and or Creekside. Lastly, we have to get the erosion under control or the whole mountain is going to continue to deteriorate.

After the engineering report is done, we may need to consider making some of these repairs now because I don’t think they can wait very long. As for the erosion, I observed many problems on individual lots and I think each of you need to deal with these problems as quickly as possible because they are making the overall situation worse. These problems on your individual lots will not be part of any action we take regarding the common areas. Please address them individually as soon as you can.

With all of this said, I feel our case is getting stronger and stronger and I intend to do everything I can to strengthen it. I hope that each of you will do the same. We seem to have the press on our side. The local paper has done a couple of articles so far and both have been slanted in our favor. We also had WLOS (TV) in Asheville come out last week and do a segment for their six o’clock news. This piece was also very favorable toward us. Hopefully, we will be able to keep the press on it and on our side. I am also hopeful that we can make some political connections, particularly at the state level, to help us. The law firm has offered to help with this.

I hope that you all will thank Pam for all she has done and continues to do. Her role is so important because she is here year round and most of us are part time residents.

One thing that would be very helpful is for all of you to email me so I can get your email addresses. That would make communicating much easier and cheaper.

Sincerely yours,


Darell Bowen
Legal Obligation to Restore Privately-Owned Roads

In the succeeding months the property owners learned several facts: Their subdivision roads were built on unstable soils and they, as defined by the Horseshoe Cove Disclosure of Private Roadway document, owned and were responsible for these roads.

Mary Euler, the lawyer representing the property owners, advised her clients of the costs and risks of pursuing litigation. She warned them that Mr. Condren would likely declare bankruptcy if faced with a lawsuit. Practicality won: litigation was dropped. The property owners assumed responsibility and paid $300,000 to repair their roads. Future landslide-prevention measures as recommended by McGill engineers were not undertaken. Estimated costs for stabilizing 4 roads: $2,868,750-$5,230,000.

In the absence of litigation, two issues were not resolved. Mr. Condren’s failure to disclose Horseshoe Cove hazardous-land conditions and his competency as a developer.

Disclosure of Private Roadway Document

Sample

State of North Carolina

County of Haywood

Disclosure of Private Roadway


To:

RE: Lot____, _______________ Subdivision

This disclosure is given in accordance with North Carolina General Statutes Section 136-102.6. In connection with the purchase by you of Lot____ of the ___________ Subdivision, as shown on a map recorded in Plat Cabinet ______, Slot____________ of the Haywood County Registry, this is to advise that the ______ foot wide roadway shown thereon leading from ________ Road and serving the subdivision is designated on that map as a private road and not a public road. All of the property owners of property facing on this private road have easements with each other in order to travel over and across this roadway. As a private road, and not a public road, the responsibility for maintenance of this road is upon the property owners although the undersigned shall have the right to improve said roadway to the extent it deems appropriate. No representation is made to you that construction of this roadway is sufficient to be included in the state secondary road system or that the State of North Carolina would eventually assume maintenance of this roadway.


This __________day of _____________, 1987.

By:_______________________



The undersigned purchasers of Lot_____ of _____________Subdivision
(Cabinet____, Slot_____, Haywood County Registry), do hereby acknowledge receipt of the above disclosure statement.

This the_______ day of ______________, 1987

_________________________________________

__________________________________________

Horseshoe Cove Landslide Report—Maggie Valley, North Carolina

On May 6, 2003 landslides covered and destabilized portions of five roads in the Horseshoe Cove Subdivision.

What likely would have remained a private dispute became public when the developer refused to repair the damaged roads within his subdivision.

Don Condren— Developer of Horseshoe Cove — Subdivision Street Disclosure Statement

At the time of sale of Horseshoe Cove lots Mr. Condren provided his clients with a form titled Disclosure of Private Roadway. By signing these documents, Horseshoe Cove property owners relieved Mr. Condren of all future financial obligations. These forms are currently titled Subdivision Street Disclosure Statements and are required for all developer-declared planned communities.

North Carolina General Statutes Section 136-102.6
If the street is designated by the developer and seller as a private street, the developer and seller shall include in the disclosure statement an explanation of the consequences and responsibility as to the maintenance of a private street, and shall fully and accurately disclose the party or parties upon whom responsibility for construction and maintenance of such street or streets shall rest, and shall further disclose that the street or streets will not be constructed to minimum standards, sufficient to allow their inclusion on the State highway system for maintenance.
Assessing Horseshoe Cove Landslide Damage

Darell Bowen, a Horseshoe Cove property owner, summarized the situation in a June 19, 2003 letter:
It is very clear to me that every one of us in Horseshoe Cove is affected by the current situation. Our property values have declined substantially, if we could sell at all. Those of you that are renting are being affected by loss of rental income. At this point, none of us can rent or sell without first disclosing this situation to any potential tenants or buyers. Currently there is a potential danger to every one of our homes. Some areas are more dangerous than others. First of all, there are two spots on Bridle Drive, one on Stirrup and one on Creekside where the road could completely wash out very easily. If the one spot on Bridle goes, so goes the sewer, which will affect all of us. Secondly, there are some boulders placed up on Stirrup that are going to come loose at some point. When they do there is the potential to damage property and injure people down on Bridle and or Creekside. Lastly, we have to get the erosion under control or the whole mountain is going to continue to deteriorate.

After the engineering report is done, we may need to consider making some of these repairs now because I don’t think they can wait very long. As for the erosion, I observed many problems on individual lots and I think each of you need to deal with these problems as quickly as possible because they are making the overall situation worse. These problems on your individual lots will not be part of any action we take regarding the common areas. Please address them individually as soon as you can.
Litigation

Facing extraordinary repairs the Horseshoe Cove property owners unanimously elected on May 31, 2003, to retain the Asheville law firm of McGuire, Wood and Bissette, P.A., to investigate their “possible causes of action against the developer of their community, Don Condren, Doncon, Inc., and possibly others, for faulty design, workmanship, and other failures which have led to road erosion, improper drainage, sewer problems and landslides in the Horseshoe Cove Area.”

The Horseshoe Cove road engineering report was given to Mary Euler, the property owners’ attorney, on November 6, 2003. Engineers from McGill Associates estimated construction cost repairs to range from $3,175,771 to $5,537,021.

Shortly after this report, Ms. Euler advised her clients of two facts: Litigation would be expensive, $50,000, and the process would be a long-term commitment. She also warned the property owners that Mr. Condren would likely declare bankruptcy if presented with a lawsuit.

Horseshoe Cove homeowners declined to pursue litigation: they formed the Horseshoe Cove Property Owners’ Association and assessed members $7,000 to cover the costs of the most urgent repairs ($300,000).

Most of the landslide-prevention measures recommended by McGill Associates were not undertaken and their findings were not publicized.

Donin Landslide— Maggie Valley, North Carolina— January 7, 2009

As a result of the Donin landslide the Asheville Citizen-Times published a series of Western North Carolina investigative reports. The newspaper found that the past and current practice of permitting hazardous-land residential development would significantly impact lives and property.

The newspaper provided a look at associated issues such as the unavailability of landslide insurance but they did not discuss the liability linked to private road ownership.

WNCSOS

This landslide advisory web site was established in 2006 to publicize Western North Carolina’s hazardous-land conditions. Pam Williams, a Maggie Valley landslide victim, provided the documents for this report. Copies of the McGill Report, Bowen letter, legal correspondence and landslide photographs are posted.

McGill Engineering Report— Horseshoe Cove Landslides—Maggie Valley, NC

On November 6, 2003 Horseshoe Cove property owners were provided with a landslide-damage evaluation report. McGill appraisal: roads and drainage system repairs $307,021; landslide- prevention measures $2,867,750-$5,230,000.

For additional information please read the Horseshoe Cove Landslide Report.























Tuesday, August 25, 2009

Horseshoe Cove Landslides— Legal Correspondence

On May 6, 2003 rain set off landslides in a Maggie Valley, North Carolina subdivision. This event threatened homes, damaged roads and prompted legal action.

The Horseshoe Cove residential community was designed and developed by Don Condren, Doncon, Inc.









Developer Avoids Responsibility for Horseshoe Cove Landslides




Horseshoe Cove Landslides—Maggie Valley, North Carolina—May 2003
Please click
here for additional photographs.

The landslides that endangered homes and damaged roads in the Horseshoe Cove residential community raised the question of developer responsibility.

Don Condren— Developer Horseshoe Cove Subdivision— Maggie Valley, North Carolina

At time of the lot sales Mr. Condren provided his clients with a Horseshoe Cove Disclosure of Private Roadway Statement as required by North Carolina Statute 136-102.6. By signing this waiver, property owners relieved Mr. Condren of all responsibility for matters pertaining to Horseshoe Cove private roads.

As noted in the sample disclosure statement below, Horseshoe Cove purchasers acknowledged and accepted two specified future risks: developers’ private roads do not have to comply with minimum state construction standards and property owners in designated subdivisions must jointly assume financial responsibility for the maintenance of these roads.

Sample

State of North Carolina

County of Haywood

Disclosure of Private Roadway


To:

RE: Lot____, _______________ Subdivision

This disclosure is given in accordance with North Carolina General Statutes Section 136-102.6. In conjunction with the purchase by you of Lot____ of the ___________ Subdivision, as shown on a map recorded in Plat Cabinet ______, Slot____________ of the Haywood County Registry, this is to advise that the ______ foot wide roadway shown thereon leading from ________ Road and serving the subdivision is designated on that map as a private road and not a public road. All of the property owners of
property facing on this private road have easements with each other in order to travel over and across this roadway. As a private road, and not a public road, the responsibility for maintenance of this road is upon the property owners although the undersigned shall have the right to improve said roadway to the extent it deems appropriate. No representation is made to you that construction of this roadway is sufficient to be included in the state secondary road system or that the State of North Carolina would eventually assume maintenance of this roadway.


This __________day of _____________, 1987.

By:_______________________


The undersigned purchasers of Lot_____ of _____________Subdivision (Cabinet____, Slot_____, Haywood County Registry), do hereby acknowledge receipt of the above disclosure statement.

This the_______ day of ______________, 1987

_________________________________________

__________________________________________




Facing responsibility for extensive road repairs the homeowners asked their attorney to pursue the question, via an engineering report, of whether Mr. Condren was negligent in the planning, development and construction of Horseshoe Cove roads.

McGill Associates Engineering Report—Horseshoe Cove Subdivision—November 6, 2003

Highlights of the report: numerous road construction deficiencies caused by improper positioning of drainage pipes, ten (10) specific areas of moderate to severe slope failure adjoining road surfaces, suspicion of highly unstable colluvial soils throughout the subdivision, estimated repair construction costs-roads & drainage ($307,021), slope failures ($2,868,750-$5,537,021).

Horseshoe Cove Homeowners Assume Responsibility for Road Repairs

Upon receipt of the engineering report, Mary Euler, the attorney representing the Horseshoe Cove homeowners advised her clients of their options: they could pursue expensive long-term litigation, in which case Mr. Condren would likely declare bankruptcy, or form a property owners’ association and share the costs of restoring the subdivision’s roads.

The Horseshoe Cove property owners chose to abandon litigation. They formed a property owners’ association and assessed members $7,000 for roads and drainage repairs. The subdivision remains at risk: landslide concerns have not been resolved.

Court of Public Opinion

In the absence of litigation a serious issue was never addressed or publicized.

As a developer, Mr. Condren had an obligation to check the Haywood County Soil Survey to determine whether his subdivision site was suitable for homes and road construction. It was only after the fact that Horseshoe Cove property owners were advised that they individually owned and were responsible for a hazardous-land tract. By failing to disclose hazardous-land conditions—a material fact—Mr. Condren quite likely invalidated the terms of the Horseshoe Cove Private Roadway document.

Postscript

Mr. Condren is still designing and building subdivisions. His latest, Rolling Hills Estates, is located in Jackson County.

Horseshoe Cove Landslides— Maggie Valley, North Carolina

On May 6, 2003 landslides endangered homes and damaged roads in the Horseshoe Cove neighborhood. This subdivision was designed and developed by Don Condren.