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Homeowners win round in court battle against San Luis Obispo developer

November 19, 2025

By KAREN VELIE

Facing allegations he built a home in San Luis Obispo that is uninhabitable because of black mold and “egregious construction defects,” Gary Grossman of Coastal Community Builders fought for arbitration and a stay of legal actions. The court ruled against him.

By forcing arbitration, companies are often able to stack the deck and avoid or delay justice. Meanwhile, people regularly enter into contracts while failing to understand that arbitration is a way to circumvent court.

With costs from $400 per hour to $15,000 per day or more, arbitration appears to largely favor companies over plaintiffs who often cannot afford the cost.

Matthew and Jeannie Pleasant, along with their two children, moved into a new home in San Luis Ranch off Madonna Road in Oct. 2021. Their excitement, however, was short-lived. In less than a month, the couple observed “bowing walls, cracks in drywall, misaligned trim and water intrusion.”

The Pleasants submitted dozens of written requests for repairs. Subcontractors patched drywall and painted surfaces, but failed to fix the structural defects, according to the lawsuit. In June 2022, Coastal Community Builders concluded the Pleasant’s home did “not suffer from any structural deficiencies.”

Less than a month after receiving a $437,500 estimate to make repairs to their home, in April 2024 the Pleasants received an additional $45,000 repair estimate from a licensed mold remediation professional who “confirmed active mold growth and elevated moisture content behind bathroom and shower walls.”

“As a result of Coastal Community Builder’s substandard construction and repeated failure to remedy known defects, plaintiffs have experienced severe disruption, out-of-pocket expenditures, health concerns related to mold, and significant diminution in the value of their home,” according to the April 7 lawsuit.

Coastal Community Builders then attempted to compel arbitration. While Coastal Community Builders is the builder of the home, Presidio is the owner and seller of the San Luis Ranch project.

Attorneys for Coastal Community Builders argued they fell under the arbitration agreement with Presidio. After the court denied Grossman’s request for binding arbitration, his lawyer asked the court to stay the case while Presidio and the Pleasants engaged in arbitration.

On Nov. 3, San Luis Obispo Superior Court Judge Tana Coates denied both Coastal Community Builders’ request to compel arbitration and to stay the case pending the Presidio arbitration.

The Pleasants’ lawsuit seeks reimbursement for their medical, relocation and storage expenses. In addition, the lawsuit seeks attorney fees, and compensatory and punitive damages.

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It was a sad day when I realized SLO County (and the city) were as corrupt as anything I could imagine in a big city/county all the way up to the state…and beyond. The difference for me was this is such a relatively small pond that secrets are too hard to keep under wraps. Truly though, it just goes to show the human heart is so easily bent.


3

Since we are satisfying the demand required by the State, this issue would better be avoided by State Building Inspectors. It is just too obvious that local inspectors are not doing their job.


10

Agreed. Either incompetent or corrupt, when the flaws in new construction are if this magnitude and severity, it’s clear they are not doing their job.


7

What goes around comes around……..


2

Homes built by “skilled labor” found at a Home Depot parking lot?


5

Love, love to see investigative journalism like this versus chasing the Tribune and other petty biased topics.

CCN is the best at investigative issues. Looking forward to seeing more.


85

Yes, absolutely!


My question is, what responsibility does the City have in all of this since they make all construction phases subject to inspection (s)? I mean, what good are building codes and the land use/police powers of a local agency if something as egregious as this happens with new construction?


28

Good question. There were definitely omissions of inspections by the SLO planning department and refusals by the fire authority to inspect.


16

Looks like Grossman can’t win anymore now that he’s lost his protector, Adam Hill.


76

Pretty sure he has others that have received “campaign” donations.


40

He made a $5,000 donation to the group in Grover opposing water rate increases.


7

The million dollar question is, Did San Luis Obispo City Councilwoman Jan Marx have these same issues with her home in this complex that was plan restricted to affordable housing?


86

Don’t be ridiculous. Of course Jan got a good one. The developer wouldn’t gamble her support by cutting corners. The cut corners are for the little people.


65

Wonder if Jan Marx had to enter a contract with her new home purchase that authorized Presidio etal to have access to her sensitive and personal financial information like other buyers apparently have had to to buy at SLO Ranch?


26

Yes, and were also told that they could not use their own realtor to represent them; that they had to use Coastal Community Builders’ agents.


8

and Supervisor Dawn Ortiz Legg?


63

She had one in there too, in the name of her husband. She has since sold it. I wonder if she claimed the financial gain or relationship in the financial disclosures required of public servants.


6

Adam “hands out” Hill and Jan the Marxist are the cause of black mold, Slimy, sleazy and all wet.


35

Of course not, and it is just a few doors down the street. While championing affordable housing, she bragged that she got a home intended as an affordable unit, but says it’s OK because she paid market price.


7

Wonder if the City of SLO allows the developer to subject workforce and affordable housing buyers to binding arbitration clauses in their purchase contracts? Arbitration sounds to be a very expensive process that logistically stacks the wheels of justice in favor of big business.


Seems unconscionable, contradictory and downright wrong to require an affordable or workforce housing buyer to waive their rights to access justice through the much more affordable small claims or trial courts in event they were delivered a defective home. Its further unconscionable that the sellers and their contractors insurers pay for their defense.


80