Rancho Santa Fe Association stops severance payments to former manager

As of Oct. 1, the Rancho Santa Fe Association has halted severance payments to former Manager Pete Smith, as it believes he is in breach of the non-disparagement clause in his severance agreement.

Association attorney Mary Howell wrote a letter to Smith informing him that his comments in the Sept. 10 edition of the Rancho Santa Fe Review in regards to the Rancho Librado project, stating that his clients “were not being treated fairly,” were a breach of contract.

The Sept. 10 article discussed Golden Eagle Land Investment’s pending lawsuit against the Association, which alleges numerous complaints, including that the Association violated the Common Interest Development Open Meeting Act and took action on an item that was not on the agenda. Smith serves as a consultant to Golden Eagle Land Investment and the Mabee Trust’s Rancho Librado, a proposed senior housing project on Calzada del Bosque.

According to the Golden Eagle lawsuit declaration, Smith’s quote to the Rancho Santa Fe Review was accurate, stating: “What the Mabees are looking for in the lawsuit is that they be given a level playing field to present this project to the community in a fair way. The lawsuit is not about the merits of the project. The lawsuit is about the process. There are a set of rules and the Mabee family only wants the Association to follow the rules and the process.”

In the Oct. 16 letter from Howell, Smith was told that this statement was considered by the Association board and counsel to be a breach of contract and he could correct the breach with a letter to the editor of this newspaper acknowledging that his clients had been “treated fairly by the Association and in the same fashion as other applicants for CDRC (Covenant Design Review Committee) and Association approval.”

The Association declined to comment on this issue.

“The matter about which you’re inquiring is involved in pending litigation, therefore, as you’ll understand, we cannot comment at this time,” RSF Association Manager Bill Overton said.

Smith’s severance agreement when he retired in May 2014 stated that he was to receive severance pay that represents approximately 85 percent of his annual compensation in equal monthly installments of $16,254 ending on Jan. 1, 2016. Those payments have stopped, and according to a declaration filed by Smith on Nov. 20, the Association has “threatened” him with “substantial financial harm and continued litigation” unless he retracts his statement.

“They are demanding that I publicly lie about my opinion and state that the Mabees are being treated fairly; such statement is untrue,” wrote Smith in the declaration. “Their demand that I issue a false statement to the public appears to be their attempt to defeat this pending lawsuit which asserts that the Mabees have not been treated fairly and that the Association has not followed the legal process and has breached its fiduciary duty to treat all members equally and fairly.”

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