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 can not 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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