The Hill From Hell

First mud, then lawyers: A neighborhood drama in five acts.

Act I. The Hill Comes Down

At center stage, a decimated Oakland hillside. At its base, three houses owned by the Gong family. Above, on Wallace Street, three houses are beginning to crumble.

It is February of 2002, a particularly wet winter. A massive chunk of the rain-soaked slope has fallen away from behind the three uphill houses, destroying their backyards and leaving an eighteen-foot drop-off. Soil pushing down the hill has created a mound eight feet tall at the point closest to the Gongs’ properties, and two of the uphill buildings jut out five feet over the escarpment. A rear addition on one already has peeled off and tumbled down the hill. City officials have red-tagged the three uphill homes, forcing everyone out, and engineers are warning that there is danger of a second slide.

None of the Gongs saw the hill come crashing down — they just remember getting warning calls from neighbors, hurrying home, and finding television crews and passersby gawking at the spectacle in their backyard. The odds that a three-home landslide would rain down on three houses owned by the same family seemed incredible. “If I bought a lottery ticket I wouldn’t be that lucky,” says family matriarch Ying Gong.

Until that February, the Gong family had indeed been lucky, but it was the kind of luck that comes from hard work. For nearly forty years, the parents ran a tiny convenience store in the shadow of Oakland’s Highland Hospital. They were beloved neighborhood fixtures, particularly the rosy-cheeked, wavy-haired Ying, whom customers nicknamed “Mrs. Highland” after the store’s original name, Highland Grocery, or “Maggie” for reasons no one can quite pin down. In typical mom-‘n’-pop-shop fashion, they lived in the apartment behind their store. Their four kids helped run it, stocking the shelves, mopping the floors, and delivering to housebound customers. Because Ying always seemed to be behind the counter, neighbors left things in her care: house keys in case they locked themselves out, money so their kids could stop by after school for a snack. “It wasn’t just a business,” says Greg Gong, her eldest son. “It was a form of friendship. My mom knew everybody.”

The store is an anchor in this working-class residential neighborhood, which seems caught between two epochs of Oakland history. Teenagers propel their bass-thumping rides along tree-lined streets; blue light from giant TVs flickers inside faded Craftsman homes. ER-bound ambulances scream through at all hours. Every now and then there’s a wayward rooster.

From their shop, the Gongs watched generations of neighbors grow up and move away. Sometimes they offered to sell their houses to the Gongs. The self-employed family believed Bay Area real estate was a safe retirement investment. “That was our IRA,” says James Gong, Ying’s husband, a vigorous man with close-cropped hair. “We put the money back in the neighborhood. We didn’t take it someplace else.”

Now in their seventies, the parents still live in the first house they bought, an early-20th-century bungalow directly across from their shop on 14th Avenue. When their next-door neighbor, a close friend, was widowed, she offered to sell them her house. Later the Gongs bought the one next to that, making it three in a row. Then came a couple of others, until they owned five houses, plus the store.

The couple sold the family business and retired in late 2001. They’d paid off the mortgages on the three adjacent 14th Avenue properties and planned to live in one, funding their retirement with rent from the others. Like most of the houses on their side of the street, theirs were nestled into the base of the aforementioned hill. Above, carved into the hill’s belly, is Wallace Street, a narrow alley lined with residences. The Gongs, avid gardeners, had terraced their portion of the slope and used it to grow a profusion of produce: loquats, lemons, grapefruits, pumpkins, which they hoped to spend some of their new leisure time tending. Yet what should have been a lovely retirement lasted only a few months.

Enter the landslide.

Following that disastrous day in February, the Gongs knew their first step would be to find out who owned the properties now crumbling toward their nest egg. Little did they know that the wreckage would still be sitting there virtually untouched more than five years later, even as the uphill homes decayed into traffic-stopping eyesores. Nor that the slide and its aftermath would propel the couple, with their limited English literacy, into a bureaucratic maze involving county courts and city government agencies. They had just been cast in the lead roles in a drama that was about to consume their lives.

Act II. Rising Tensions

The dramatis personae: Jason Griffin, then a 21-year-old construction worker, owned the easternmost of the three Wallace Street houses, a modest brown two-story where he lived with a few friends. He was proud of being a first-time homeowner, and had already poured $40,000 into rehabbing the building, hoping to eventually trade up.

The ownership of the westernmost parcel was less clear. It was actually two buildings on one lot, rental units painted swimming-pool aquamarine. On paper, the property belonged to a family trust named after a San Leandro couple, Alan and Angela Au-Yeung. It was managed by the couple’s son, Humphrey Lau, whom the Au-Yeungs would later claim was the true owner.

According to public records, Lau and his wife, Yuk Chu Alice Dai, have invested in many properties throughout the East Bay. In fact, Dai previously owned the middle property as well, a three-unit apartment building painted the same pool-blue. A few months before the slide, however, Dai had sold it to an investor named William Lebrun. After the slide, this building’s foundation was the most visibly undermined, and its lot was the source of most of the dirt that threatened the houses down below.

A fourth player, who would hover in the wings for several years, was the City of Oakland. Although city officials quickly dispatched inspectors and engineers to assess the damage, they decided to stay clear of the dispute. “It’s all contained on private property,” says Antoinette Renwick, inspection services manager for Oakland’s Community and Economic Development Agency (CEDA). “The city does not have any liability associated with this landslide.”

The City Attorney’s office considered filing an injunction against two uphill owners, but ultimately reached the same conclusion. “We said, ‘Okay, if we step into it, we assume some sort of liability that’s not ours,'” spokeswoman Erica Harrold says. Had the city seized the properties, it would have been liable for demolition and repairs, and perhaps damages from future landslides. Moreover, Harrold says, it became clear that a massive multiparty lawsuit was brewing, and the city wanted to wait it out.

All of the homeowners had general liability insurance, but none had landslide coverage. Therefore each party’s best hope of recovering damages and lost rental income was to sue the neighbors for their insurance money.

It was a battle royale. The Gongs sued all of their uphill neighbors. Lau and the Au-Yeungs filed a cross-complaint against the Gongs, Griffin, and Lebrun. Griffin filed a third cross-complaint against the three other parties. Lebrun started a claim against the city, alleging that a municipal sewer leak caused the slide, but later dropped it.

A host of supporting players — lawyers — now had speaking parts. The Gongs, Griffin, and Lebrun had two attorneys apiece — one on offense, one on defense. And although they are related, the Au-Yeungs and Dai hired separate lawyers, while Lau alternately represented himself and his parents, and showed up in a few legal documents as the client of his wife’s or his parents’ attorneys.

With so many conflicting interests, the suit was destined to eat money and time and to drive most everyone to distraction. Attorney Steve Nielsen, who represented the Au-Yeungs and now works on intellectual property cases, jokingly put it this way: “This case was so difficult I went into patent law.”

The Express contacted each of these property owners and their attorneys multiple times, but only a handful responded. Nearly all who did agreed on something CEDA had sussed out early on: Geologically, Wallace Street is a disaster. The one-way, single-lane street was likely carved out by housing developers a century ago, says Clark Gertner, CEDA’s principal inspection supervisor. The excess dirt from the road-building was pushed over the side of the hill, and houses were built on that noncompacted fill, which wasn’t integrated with the main slope. During the 2002 rains, the soil saturated, Gertner says, and “the fill dirt slipped away from the original angle of the hill and fell down the hill.”

It’s worse than this one slide, lawyer Nielsen says: “What you have is a whole hillside that is coming down because it wasn’t compacted. If you drive around you see a lot of empty lots.” He’s right — where Wallace dead-ends into 19th Avenue a half-block away, there’s an enormous empty space caused by a 1998 slide. Grass now covers the slope, but you can see where the soil gave way. Two other slides were reported on Wallace in the 1950s. “Probably the primary culprit is the original grading and lack of compaction,” agrees Greg Doyle, who defended the Gongs against the cross-complaints. But he notes that even if anyone knew who the original developers were, the statute of limitations for holding them accountable has long expired.

So instead, the neighbors all blamed each other. Among the competing allegations: that improper drainage on the uphill properties fed water directly into the hillside, soaking the soil. That the Gongs’ terraced gardening weakened the slope by cutting off its “toe.” That Griffin and Lau had made half-hearted efforts to shore up their properties, but that these repairs were — in the words of Jeffrey Cereghino, the Gongs’ attorney — “like having a big old nasty melanoma and putting a Band-Aid on it.” That Lau’s work on his property, as well as the one that his wife later sold to Lebrun, was done poorly and without permits. That Lebrun was told of his building’s defects before he purchased it, but failed to make improvements.

The case would rage on for four years. In the meantime, the uphill properties steadily fell apart. The roof and rear rooms of the Griffin house sloughed off, leaving its interior exposed like some sort of deranged dollhouse. During the winter of 2006, the Lebrun building, already perched over the scarp, separated from its foundation and began to tilt backward. Its front is now pitched several feet into the air and the structure folds along its midsection as though sucker-punched. Windows are smashed out, and all three buildings are covered in graffiti. Neighbors complain that the vacant houses have become a magnet for drug dealing, vagrancy, trash dumping, and even prostitution.

The Gongs continued to live in their house below, but for safety reasons evicted the tenants from their threatened rental houses shortly after the slide. As the engineers predicted, the soil continued downhill. It moved twenty feet in five years, and a head-high wall of dirt pressed so hard against the utility room of the Gongs’ middle house that the family finally smashed in the room to relieve pressure on the rest of the structure. In the meantime, a steady stream of debris — parts of Griffin’s house, a motorcycle carcass, tires, a doghouse — flowed into their backyards.

The Gongs couldn’t sell. Besides, they didn’t want to. “All my life I lived in this neighborhood,” Ying Gong says. “I know everybody, so I can talk to anybody. It took my lifetime to invest that money in there. It’s very heartbreaking to walk away.”

Life for the Gongs became increasingly hard. Besides the houses, the family had no savings, and without those tenants their income plummeted — in 2002, the two rentals were bringing in about $2,000 a month, and today would earn $3,000. The couple still had to cover property taxes and insurance, not to mention their day-to-day living expenses and the mortgages on the other houses. The landslide left them with “zero cash flow,” daughter Michelle Gong says.

On top of it all, the legal process was unfamiliar, conducted in hard-to-decipher bureaucratese, and incredibly expensive. “My parents have always done everything themselves,” Michelle says. “It’s hard enough to ask for help, and it’s worse when you have to pay someone more than you’ve ever paid for anything, by the hour.”

The apartment-building-shaped sword of Damocles teetering uphill began to take an extraordinary psychic toll on the Gongs. Nobody ate or slept in the back of the house. They wired surveillance cameras to the eaves to keep an eye on the hill in case it slipped again. Others watch, too — like vultures: Traffic slows while the drivers stare, and each time it rains, TV trucks park across the street hoping to score some hot disaster footage.

Ying often walks up to Wallace Street to see if the Lebrun property has tipped further. Her son Gilbert monitors its steady slippage by marking the building’s outer wall, using a stake driven into the soil as his reference point. Dozens of marks indicate that the structure has slid several feet since he began. The tension is almost unbearable. “I don’t want to stay in the house,” Ying says. “I just have to keep myself busy.” Sometimes, to get out of the house, she goes to the park to watch kids play. Sometime she just gets on the bus and rides. At night, when she has to be indoors, she tries to drown out her worries with television. “Every time the TV is not on,” she says, “I think too much.”

Act III. The Plot Thickens

As the three uphill houses decayed, something strange happened: It became trickier to tell who owned them.

Rumors abounded that they’d been abandoned, foreclosed upon, or purchased by shadowy investment companies. Even the city was unsure, which made it difficult to do anything about the most enormous blight the neighborhood had ever seen.

Although Oakland was loath to seize the uphill properties, CEDA had filed a steady stream of liens and abatement orders against their owners since 2002. The notices rarely elicited a response — sometimes they came back unopened. Oakland sent crews to remove trash, trim weeds, install fencing and the like, and billed what it believed were the uphill property owners. Yet the fees piled up with little reaction — by January 2007 there were $25,000 in liens against the Lau/Au-Yeung property, $34,000 against Lebrun’s, and nearly $47,000 against Griffin’s.

In April, the city tried its nuclear option. It levied a fine of $1,000 a day against each property, retroactive to November 2006. As of mid-May, each owner will owe more than $200,000. But are officials pursuing the right people? Maybe not.

The ownership of the Au-Yeung/Lau property had always been hazy. The deed on file with the county states that the owner is the Au-Yeung family trust. In a 2005 court declaration, however, the Au-Yeungs claimed they bought the property for son Humphrey Lau and that he kept the rent money, paid the property taxes, and conducted repairs without their involvement. “The reason that we did not change the property to Humphrey Lau’s name is because it was against our tradition,” they wrote. “We considered it to be bad omen [sic], especially to us, to pass along property before we pass away.” (The family did not respond to interview requests.)

CEDA was at least billing the right family in that case — until this February, when David Laurentiu quietly bought the house for $12,000. In a brief phone interview, he said he’d intended to pay off the liens, fix it up, and live there. But hiring a soil engineer to suggest repairs has proved much more expensive than the new owner planned, and he says he’s called the police three times about trespassers breaking in. Laurentiu seemed surprised to learn that his property was the subject of fierce debate. “Twelve thousand dollars I paid for it to take a headache on,” he says in resignation.

Neither the city nor the Gongs had heard about Laurentiu. “He may think he got a bargain,” James Gong muses of his new upslope neighbor, “but he didn’t get a bargain.”

In 2006, its deed was transferred to an entity called Greenbelt Holdings. But just try to contact anyone there, or verify its existence. The entity appears to have no Web site, phone number, nor office address — just a post office box in San Ramon. While the California Secretary of State’s office lists a limited-liability company called Greenbelt Holdings, it is owned by a San Francisco couple who say they’re not affiliated with Lebrun or the Wallace Street property.

Could this other Greenbelt Holdings and William Lebrun be one and the same? A property records search showed that when Greenbelt purchased the building for $5,000, the buyer’s mailing address was listed as the San Ramon post office box “in care of” William Lebrun, and indeed the city has mailed its notices to him at that address. Nobody responded to letters sent to the post office box by the Express. Reached by phone, however, Lebrun promised to be available in ten minutes, but didn’t answer subsequent calls or respond to voice messages asking about his affiliation with Greenbelt Holdings.

Jason Griffin proved far easier to find. He now lives in Richmond, where he rents, thanks to bad credit that resulted from his disastrous stint as a homeowner. Yet the ownership of his Wallace Street property is something of a mystery. “I don’t know if I still own it or not,” he says.

Since Griffin’s home was red-tagged, he had to vacate immediately. He rushed his belongings into storage and crashed at his mom’s house. He was appalled to discover that his insurance didn’t cover landslides, and that his additional emergency policy would kick in only if his house was permanently condemned. It wasn’t, so he was reimbursed for only three mortgage payments. “I was really young at that time, so it was really hard on me,” he recalls. “Every dime I had I was putting into fixing up the house slowly but surely, and everything I had worked up to in my life was gone.”

Once the insurance money ran out, Griffin stopped making payments. “I pretty much walked away, because it is hard to pay for one mortgage, let alone mortgage and rent,” he says. He didn’t follow the lawsuit too closely — he doubted he’d get any money out of it. He also dropped his cross-complaint, because “it was taking a toll on me mentally.”

He thinks the bank had started foreclosure proceedings, but said he’s not sure whether it went through. “I definitely still have some type of attachment to it,” he says of the property. “It was my first house, and I still think about it every now and then. When I’m in the area, I go by and look at it.”

For years, the city has been under the impression that Griffin lost the house to foreclosure, and has been sending notices to his lenders. The most recent documents on file at the county list the owner as the Federal Home Loan Mortgage Corporation — aka Freddie Mac — care of Bank of America Mortgage. Thus BofA was the lucky recipient of the city’s $1,000-a-day demand.

But the bank says it doesn’t own the house. After a records search, spokeswoman Colleen Haggerty concluded that the owner is Freddie Mac, which originated Griffin’s loan. Not so fast, says Freddie Mac spokesman Brad German. He was able to produce documents showing that Griffin’s property was foreclosed upon twice — in 2003 and 2004 — but that both foreclosures were rescinded, reverting the title to the original owner. Oddly, the recision notices never made it to the assessor’s office.

Looks like Jason Griffin still owns the house after all.

Act IV. Turning Point

After four years of battle, on the verge of trial, the uphill neighbors’ insurance companies settled in favor of the Gongs last summer. While nobody admitted fault, Cereghino, the Gongs’ attorney, says you can read between the lines: “The fact is, they settled with us and they paid every penny of their insurance limits.” The total: $900,000 and change.

Lebrun and Griffin were ready to throw in the towel back in 2004, but Lau had held out for a slice of the settlement. Initially, he wanted $300,000 to settle his cross-complaint. Until that was resolved, nothing could move forward. “He just kept chipping and chipping at the $900,000,” says James Gong. After two more years, the Gongs’ attorneys finally negotiated Lau down to about $70,000. Problem solved, right?

Wrong.

The Gongs’ settlement money, which actually comes to around $600,000 after attorneys’ fees, Lau’s payment, and some other major expenses, is still untouched. That’s partly because the family wasn’t sure what to do with it. There was no set of instructions on how to stabilize a hill, or guidelines as to who should pay for it. The absent landowners? The Gongs? The city? A private developer willing to assume some risk? And though there’s no shortage of ideas about how to redevelop the Wallace Street lots — as a park, say, or condos — nobody knows how feasible or expensive those might be.

The Gongs thought they needed to protect only their own houses, not fix the entire hill. So they had a scare in December, when the city — quiet for so many years — suddenly issued a $50,000 prospective lien and blight-abatement notice against the Gongs’ easternmost house. The family was instructed to provide plans for removing soil and building a retaining wall and drainage system. The Gongs thought they were being told to fix the entire hill, which they believed was a multimillion-dollar proposition. Worse, Gilbert Gong says, it seemed they were being ordered to go it alone, rather than as part of a broader plan involving all parties.

The language barrier didn’t help matters. Every time Ying Gong went to City Hall for clarification, she emerged confused. The family felt hassled. Why were they the ones being punished? They appealed the lien, and at the hearing a clearly distraught Ying told city officials, “I don’t know what really needs to be done on my side. If you want me to fix the whole hill, I don’t have a solution.”

Neighborhood sympathy was certainly with the family as local frustration with the city peaked this past winter. Residents have long wanted officials to deal with the public hazard. Sherry Congrave-Wilson and Greg Mowbray, who live across Wallace Street from the slide, have taken the lead in pressuring the city to take action. They are sick of people dumping junk in front of the dilapidated houses, camping out and dealing drugs in them, or breaking into cars. “I do not think the city would be handling it like this if this was in Montclair,” Congrave-Wilson says. “Our lives are as valuable as anyone else’s.” In their view, the threat of fines is pointless. They want Oakland to seize the dilapidated properties. “I’m not a firm believer in eminent domain, but if it’s going to be used in any situation this is one,” she says.

Watching the houses decay has taken a toll on neighbors’ nerves, too. “Every time I hear a loud crack, I think, ‘Oh God, it’s coming down,” says Maxine Evans, who lives near the Gongs’ old store. “I’m so angry with Oakland for this ‘Well, we can’t do anything’ kind of attitude.”

In January, neighbors finally seemed to gain some traction when Councilwoman Pat Kernighan hosted a meeting to hear their concerns. Although she agrees that the city initially had no liability, she says, “What hasn’t been dealt with in all of this in my view is that the three uphill buildings also just constitute a blight in the neighborhood.”

When the uphill property owners walked away, she says, the city’s administrative process simply got gridlocked. The councilwoman has asked staff to research the city’s options and to order an updated geotechnical report on the hill. CEDA agreed, and commissioned a report that’s due in June. The agency has also managed to smooth out some misunderstandings with the Gongs. The city holds the family responsible only for repairing its own property, and will drop the lien now that the Gongs have agreed to take steps to remedy the problem.

Now city officials must deal with the broader situation. “It’s a delicate dynamic,” says City Attorney spokeswoman Harrold, noting that while landowners often resent government interference in private property matters, this case may be different. “Private individuals have walked away and now community members want us to take care of it,” she says. “That may be our role.”

The city is still reluctant to seize the land, Renwick says. But there are other options: It could demolish the uphill structures, or at least the parts of them deemed a public hazard, Gertner says. Perhaps rehab the hill, then recoup costs by selling it, Kernighan suggests. The neighbors could sue the owners, Renwick says. As could the city, Harrold notes, although that might be “like trying to get blood from a turnip.” Some of the neighbors, meanwhile, are mulling yet another option: sue the city.

One thing’s for sure. If the city does step in, the people financing the fix will be Oakland’s taxpayers.

Act V. Finale?

A few weeks ago the Gongs and the city finally nailed down a plan for the lower slope. The family will build a retaining wall about ten feet behind all three of its houses. The rest is up to the city and the uphill property owners. But the last act has to have a plot twist, and this one’s name is Kevin Dawson.

Dawson is an Emeryville insurance adjuster who heard about the landslide on the radio back in 2002, and turned up offering to help the Gongs negotiate an insurance claim. They signed a contract promising him 20 percent of any winnings. “I told them going in, the likelihood of recovery was one in ten or less,” because of their lack of landslide insurance coverage, Dawson says. However, the adjuster claims his investigation turned up key evidence showing that the uphill neighbors were responsible for negligent construction that had contributed to the slide — namely nonpermitted repairs on the Lebrun and Lau/Au-Yeung properties, and water discharge from the Griffin property. “That triggered coverage under the three properties on the uphill,” he says. “That was the crux of the case.” Now, he says, the Gongs owe him $180,000.

Dawson claims he spent substantial time working for the Gongs, and that he has been involved in their case since 2002 — he says he didn’t keep track of hours because he was hired on contingency. Among his contributions, he says, were arranging for Cereghino’s law firm to represent the Gongs, commissioning an engineering report, organizing a conference among the various insurance companies, and talking to the media on the Gongs’ behalf. In other words, his attorney Francis Doherty says, Dawson did everything to ensure victory except litigate: “Everything is set, the powder is dry, the cannonballs are ready to go, and all the lawyer has to do is light the fuse.”

The Gongs counter that Dawson did little work, and say they hadn’t heard from him in years. After the suit settled, the family instead offered to pay Dawson an hourly fee. “He did nothing for us,” James Gong says emphatically. Cereghino says Dawson could be credited with, at most, one hundred hours of work; that he has not been involved since 2002; and that most of what his investigation turned up would have come out in discovery anyway.

The attorney also claims Dawson overstepped his professional bounds, since insurance adjusters are supposed only to help clients negotiate with their own insurers. “When they start trying to collect third-party liability policies, that means they are engaged in the practice of law, which you can’t do unless you are a lawyer,” he says. “Technically, he is entitled to zippo, absolutely nada, and the idea that he is going to get somewhere in the range of $1,800 an hour and get a windfall profit is outrageous and just greedy.”

Dawson sued the Gongs and their law firm in April, demanding payment according to the original terms. “They made an agreement with me,” he says. “They have $900,000 they did not have when the hill slid.” A contingency fee is riskier than paying by the hour, Doherty acknowledges, but, he says, “You don’t switch it after you get a lot of money, now that you know what the outcome is. That would not be fair.”

So after four years of legal wrangling, the family is dealing with yet another suit. This may delay some repairs, Cereghino says, because the Gongs won’t know how much money they have to spend until it’s resolved. “Any light that they saw at the end of the tunnel is being taken away by Dawson,” Michelle Gong says of her parents.

Now there’s even talk that they’ll move away. One possibility, Greg Gong says, is to sell the homes to a low-income-housing developer willing to take on the uphill lots as well. But some of the siblings can’t imagine their folks anywhere else. “If they sold it all and moved to Hayward, I don’t think they could be happy,” Michelle muses. “They wouldn’t know anyone.”

On a recent afternoon, standing in front of her former store where she’d gone to socialize, Ying Gong gazed across the street at her houses and the wreckage teetering above. She pointed out that yet another chunk of Griffin’s house had recently fallen off. But despite all the problems of living below the slide, when asked if she now preferred the idea of moving, she shook her head sadly and said no. She is, after all, Mrs. Highland.

Full disclosure: Kara Platoni lives in the neighborhood, but is not affected by the slide.

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