Suit: Condo builder misled plaintiffs about units' safety behind Galveston seawall

John Suayan, Galveston Bureau Dec. 17, 2008, 12:45pm

Artist's rendering of the proposed Diamond Beach condominiums in Galveston

GALVESTON – A Galveston County couple and a California woman claim a Galveston condominium builder misinformed them about the ability of the Galveston seawall to protect the property from hurricanes.

Plaintiffs Artem and Amy Ponomarev and Karen Gabrielle Lennon also claim the builder refuses to honor a contract clause which states they are entitled to reimbursement upon termination of their leases.

Now, the three – with the help of Houston attorney Jonathan D. Saikin – are suing Diamond Beach in Galveston County District Court in an effort to recover the funds.

The deceptive trade lawsuit was filed on Dec. 10. Galveston County 122nd District Court Judge John Ellisor has been assigned the case.

The plaintiffs say they have fully performed all of their obligations under the contracts they entered with Diamond Beach VP LP in late 2006, but management failed to return their money when they attempted to exit the agreements a couple of months ago.

They also fault Diamond Beach for misinforming them about the property's position behind the Galveston Seawall and its ability to protect the place from hurricanes, which was apparently proven false by Hurricane Ike.

According to the Diamond Beach Web site, the property is located at the west end of the seawall, which was "built for protection from hurricanes" and "has never been overtopped by storm surge."

While evacuating from Ike on or around Sept. 12, they learned from The Galveston County Daily News's Web site that the Category 2 storm's surge overtopped the Seawall as did Hurricane Carla's in 1961, affecting the condominium.

"The plaintiffs would further show that, after the execution of the contracts, defendant failed, and continues to fail, to effectively communicate to them regarding the status of construction, excessive delays in construction, and the structural damage caused by (Hurricane) Ike," the original petition says.

They accuse the defendant of diminishing the values of the plaintiffs' units.

Court papers say the plaintiffs purchased units, which are still under construction, and subsequently signed contracts with the defendant in December 2006.

On Oct. 27, the Ponomarevs and Lennon provided Diamond Beach with a written notice of termination for various reasons, but the defendant did not take heed of the letter, they add.

"The plaintiffs demanded the return of earnest money being held in escrow at First American Title – Tanglewood in Houston, Texas," the complaint explains. "In spite of this demand, defendant failed and refused to allow for the release of funds, in violation of the contracts and other applicable laws."

The suit argues the defendant failed to provide the tenants a copy of the condominium's property report in accordance to applicable laws and has not done so to this day.

"Even more, as of the commencement of this action, the plaintiffs find no record of the declaration or rules for the condominium in the real property records of Galveston County records," it says.

In addition to the money currently held in escrow, the plaintiffs look to recover consequential and exemplary damages.

Case No. 08CV1225

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