HomeMy WebLinkAbout20260109_Answer Filed- Arnold Builders_City v Smith
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DEFENDANT ARNOLD BUILDERS INC.’S VERIFIED ANSWER TO PLAINTIFF’S VERIFIED COMPLAINT
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JONAS BAILEY, SBN: 297426
THE BAILEY LAW FIRM
1405 Garden Street, Suite 2
San Luis Obispo, CA 93401
Telephone: (805) 232-4577
E-mail: jbailey@jonasbailey.com
Attorney for Defendant
ARNOLD BUILDERS INC.
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN LUIS OBISPO
THE PEOPLE OF THE STATE OF
CALIFORNIA, EX REL, J. CHRISTINE
DIETRICK, CITY ATTORNEY OF THE CITY
OF SAN LUIS OBISPO; and, THE CITY OF
SAN LUIS OBISPO, a California municipal
corporation,
Plaintiff,
vs.
LAUREL CREEK, LP, a California Limited
Partnership; LAUREL CREEK, II, L.P., a
Delaware limited partnership; 1160 LAUREL
LANE, LLC, a California limited liability
company; PATRICK N. SMITH a/k/a PATRICK
SMITH, an individual; SMITH AND
COMPANY, A REAL ESTATE INVESTMENT
DEVELOPMENT CORPORATION, a
California corporation; PATRICK N. SMITH
a/k/a PATRICK SMITH, AS TRUSTEE OF
THE PATRICK N SMITH 2004 LIVING
TRUST;CPIF CALIFORNIA LLC, a California
limited liability company;
CPIF LAUREL CREEK, LLC, a Washington
limited liability company; ALL WALL
SYSTEMS, INC., a Delaware corporation;
AMERICAN RIVIERA BANK, a California
corporation; ARNOLD BUILDERS, INC., a
California corporation; B & B
CONSTRUCTION CLEANUP INC., a
California corporation BLUE STEEL
CASE NO.: 25CV-0667
DEFENDANT ARNOLD BUILDERS INC.’S
VERIFIED ANSWER TO PLAINTIFF’S
VERIFIED COMPLAINT
Complaint filed on: October 16, 2025
ELECTRONICALLY FILED1/9/2026 2:30 PM
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DEFENDANT ARNOLD BUILDERS INC.’S VERIFIED ANSWER TO PLAINTIFF’S VERIFIED COMPLAINT
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CONCRETE, LLC, a California limited liability
company; COAST ENGINEERING & DESIGN
INC., a California corporation;
CONSOLIDATED ELECTRICAL
DISTRIBUTORS, INC., d/b/a CALIFORNIA
ELECTRICAL SUPPLY, a Delaware
corporation; CULBERT PLUMBING INC.,
F/K/A CULBERT CONSTRUCTION AND
PLUMBING, INC., a California stock
corporation; EMPIRE ELECTRICAL
SOLUTIONS, INC., a California corporation;
FAMCON PIPE & SUPPLY, INC., a California
corporation; G W SURFACES, a California
corporation; HOMER T. HAYWARD LUMBER
CO., a California corporation; KIRK
CONSTRUCTION, a California corporation; LC
LENDERS, LLC, a Delaware limited liability
company; LW CONSTRUCTION, INC., a
California corporation; MAHOGANY
CONSTRUCTION, INC., a California
corporation; NOLAN CHURCH DOING
BUSINESS AS COLORTRENDS PAINTING &
DECORATING, a California sole ownership or
proprietor business; THE SHERWIN-
WILLIAMS COMPANY, an Ohio corporation;
UNITED RENTALS (NORTH AMERICA)
INC., a Delaware corporation; US AIR
CONDITIONING DISTRIBUTORS, LLC, a
Delaware limited liability company; and, DOES
1-50, inclusive
Defendants.
_____________________________ __________
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DEFENDANT ARNOLD BUILDERS INC.’S VERIFIED ANSWER TO PLAINTIFF’S VERIFIED COMPLAINT
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Defendant Arnold Builders, Inc. (“Defendant”) answers the Verified Complaint of The People of the
State of California, Ex Rel, Christine Dietrick, City Attorney of the City of San Luis Obispo; and The City
of San Luis Obispo, a California Municipal Corporation, as follows:
SUMMARY
1. Answering Paragraph 1: Arnold Builders admits that Plaintiffs have filed a Verified
Complaint seeking relief for alleged code violations, nuisance abatement, and related remedies at the
property identified as the “Subject Property.” Arnold Builders lacks sufficient information or belief to
admit or deny the remaining allegations in paragraph 1 (including any characterization of conditions as a
“nuisance” or violations of law) and, on that basis, denies any such allegations against Arnold Builders.
2. Answering Paragraph 2: Arnold Builders admits that Plaintiffs seek nuisance abatement,
injunctive relief, appointment of a receiver, and other relief as stated in paragraph 2. Arnold Builders
further admits that Plaintiffs seek to bring the Subject Property into compliance with state and local laws.
However, Arnold Builders denies that it has used or maintained the Subject Property in violation of any
law, and denies that there is any factual basis to impose liability on Arnold Builders for the conditions
described.
PARTIES
3. Answering Paragraph 3: Paragraph 3 alleges legal authority and standing of the People of
the State of California (through the City Attorney) to bring this action. This paragraph consists of legal
conclusions and statements of the Plaintiffs’ capacity, to which no response is required. To the extent a
response is deemed required, Arnold Builders lacks information sufficient to form a belief as to the truth of
the allegations in paragraph 3 and, on that basis, denies them.
4. Answering Paragraph 4: Admit.
5. Answering Paragraph 5: Admit.
6. Answering Paragraph 6: Admit.
7. Answering Paragraph 7: Admit.
8. Arnold Builders lacks information or belief sufficient to admit or deny the allegations in
paragraph 8 (including any allegations about Defendant 1160 Laurel Lane, LLC or its role with respect to
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DEFENDANT ARNOLD BUILDERS INC.’S VERIFIED ANSWER TO PLAINTIFF’S VERIFIED COMPLAINT
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the Subject Property) and therefore denies them. To the extent paragraph 8 alleges legal conclusions
regarding general partner liability, no response is required; to the extent a response is required, Arnold
Builders denies any liability on its part.
9. Answering Paragraph 9: Admit.
10. Answering Paragraph 10: Arnold Builders lacks sufficient information to admit or deny the
allegations in paragraph 10 regarding Defendant Smith & Company (a Real Estate Investment
Development Corporation) and any recorded interest it holds in the Subject Property. On that basis, Arnold
Builders denies each and every allegation in paragraph 10.
11. Answering Paragraph 11: Arnold Builders lacks information sufficient to form a belief as to
the truth of the allegations in paragraph 11 (including allegations regarding Defendant Patrick N. Smith as
trustee of the Patrick N. Smith 2004 Living Trust and any recorded interest of said trust in the Subject
Property) and therefore denies them.
12. Answering Paragraph 12: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 12 (including allegations regarding Defendant CPIF California LLC and
any deed of trust or other interest recorded on August 22, 2024) and, on that basis, denies them.
13. Answering Paragraph 13: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 13 and therefore denies them.
14. Answering Paragraph 14: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 14 and therefore denies them.
15. Answering Paragraph 15: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 15 (including allegations about Defendant American Riviera Bank and
five Deeds of Trust recorded August 10, 2023) and, on that basis, denies each and every allegation in
paragraph 15.
16. Answering Paragraph 16: Arnold Builders admits that it is a California corporation and that
it holds a recorded Claim of Mechanic’s Lien affecting the Subject Property, which was recorded on or
about October 11, 2023 (document number 2023-029784 in the San Luis Obispo County Official Records).
Arnold Builders further admits that it has been named as a defendant in this action pursuant to Health &
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DEFENDANT ARNOLD BUILDERS INC.’S VERIFIED ANSWER TO PLAINTIFF’S VERIFIED COMPLAINT
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Safety Code § 17980.7(c) because of its recorded lien interest. Except as expressly admitted, Arnold
Builders denies any remaining allegations in paragraph 16 (including any implication that Arnold Builders
engaged in wrongful conduct).
17. Answering Paragraph 17: Arnold Builders lacks knowledge or information sufficient to
admit or deny the allegations in paragraph 17 (concerning Defendant B & B Construction Cleanup, Inc.
and any recorded interest such entity holds in the Subject Property) and therefore denies them.
18. Answering Paragraph 18: Arnold Builders lacks knowledge or information sufficient to
admit or deny the allegations in paragraph 18 (including allegations regarding any recorded interest of Blue
Steel Concrete, LLC or any other entity in the Subject Property) and, on that basis, denies them.
19. Answering Paragraph 19: Arnold Builders lacks information sufficient to admit or deny the
allegations in paragraph 19 (including allegations regarding any recorded interest of Coast Engineering &
Design, Inc. (CED/C.E.) or similar entity in the Subject Property) and therefore denies them.
20. Answering Paragraph 20: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 20 and on that basis denies them.
21. Answering Paragraph 21: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 21 and on that basis denies them.
22. Answering Paragraph 22: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 22 and on that basis denies them.
23. Answering Paragraph 23: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 23 and on that basis denies them.
24. Answering Paragraph 24: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 24 and therefore denies them.
25. Answering Paragraph 25: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 25 and on that basis denies them.
26. Answering Paragraph 26: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 26 and on that basis denies them.
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DEFENDANT ARNOLD BUILDERS INC.’S VERIFIED ANSWER TO PLAINTIFF’S VERIFIED COMPLAINT
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27. Answering Paragraph 27: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 27 and therefore denies them.
28. Answering Paragraph 28: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 28 and therefore denies them.
29. Answering Paragraph 29: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 29 and therefore denies them.
30. Answering Paragraph 30: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 30 and on that basis denies them.
31. Answering Paragraph 31: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 31 (including allegations regarding Defendant The Sherwin-Williams
Company and any recorded interest such entity holds in the Subject Property) and therefore denies them.
32. Answering Paragraph 32: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 32 and on that basis denies them.
33. Answering Paragraph 33: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 33 and on that basis denies them.
34. Answering Paragraph 34: Arnold Builders lacks knowledge or information sufficient to
admit or deny the allegations in paragraph 34 (including allegations regarding fictitiously named Doe
Defendants and their responsibility for the conditions on the property) and, on that basis, denies them.
35. Answering Paragraph 35: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 35 and on that basis denies them.
FACTS
36. Answering Paragraph 36: Defendants incorporate by reference their responses to paragraphs
1 through 35 as though fully set forth herein.
37. Answering Paragraph 37: Admit.
38. Answering Paragraph 38: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 38 and on that basis denies them.
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DEFENDANT ARNOLD BUILDERS INC.’S VERIFIED ANSWER TO PLAINTIFF’S VERIFIED COMPLAINT
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39. Answering Paragraph 39: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 39 and on that basis denies them.
40. Answering Paragraph 40: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 40 and on that basis denies them.
41. Answering Paragraph 41: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 41 and on that basis denies them.
42. Answering Paragraph 42: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 42 and on that basis denies them.
43. Answering Paragraph 43: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 43 and on that basis denies them.
44. Answering Paragraph 44: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 44 and on that basis denies them.
45. Answering Paragraph 45: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 45 and on that basis denies them.
46. Answering Paragraph 46: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 46 and on that basis denies them.
47. Answering Paragraph 47: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 47 and on that basis denies them.
48. Answering Paragraph 48: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 48 and on that basis denies them.
49. Answering Paragraph 49: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 49 and on that basis denies them.
50. Answering Paragraph 50: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 50 and on that basis denies them.
51. Answering Paragraph 51: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 51 (including allegations concerning the May 5, 2025 CBOA hearing,
any appeal by the owners, and the outcome upholding a Notice of Violation) and therefore denies them.
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DEFENDANT ARNOLD BUILDERS INC.’S VERIFIED ANSWER TO PLAINTIFF’S VERIFIED COMPLAINT
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52. Answering Paragraph 52: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 52 and on that basis denies them.
53. Answering Paragraph 53: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 53 and on that basis denies them.
54. Answering Paragraph 54: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 54 and on that basis denies them.
55. Answering Paragraph 55: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 55 and on that basis denies them.
56. Answering Paragraph 56: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 56 and on that basis denies them.
57. Answering Paragraph 57: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 57 and on that basis denies them.
58. Answering Paragraph 58: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 58 and on that basis denies them.
59. Answering Paragraph 59: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 59 and on that basis denies them.
60. Answering Paragraph 60: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 60 and on that basis denies them.
61. Answering Paragraph 61: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 61 and on that basis denies them.
62. Answering Paragraph 62: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 62 and therefore denies them.
63. Answering Paragraph 63: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 63 and therefore denies them.
64. Answering Paragraph 64: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 64 and therefore denies them.
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DEFENDANT ARNOLD BUILDERS INC.’S VERIFIED ANSWER TO PLAINTIFF’S VERIFIED COMPLAINT
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65. Answering Paragraph 65: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 65 and therefore denies them.
66. Answering Paragraph 66: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 66 and therefore denies them.
67. Answering Paragraph 67: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 67 and therefore denies them.
FIRST CAUSE OF ACTIONS
(Violations of Health and Safety Code & Receivership – Plaintiff of San Luis Obispo Against all
Defendants)
(Health and Safety Code § 17980.7(c))
68. Defendants incorporate by reference their responses to paragraphs 1 through 67 as though
fully set forth herein.
69. Answering Paragraph 69: Paragraph 69 alleges legal conclusions and no response is
required.
70. Answering Paragraph 70: Paragraph 70 alleges legal conclusions and no response is
required.
71. Answering Paragraph 71: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 71 and therefore denies them.
72. To the extent paragraph 72 implies that Arnold Builders itself had the ability or duty to fully
abate the dangerous conditions, Arnold Builders denies any such implication. Arnold Builders lacks
information or belief sufficient to admit or deny the remaining allegations in paragraph 72 and therefore
denies them.
73. Answering Paragraph 73: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 73 regarding Defendants’ failure to comply with the Notice and Order,
and therefore denies them. Arnold Builders affirmatively states that it had no ability or legal obligation to
comply with said Notice and Order because it does not own or control the Subject Property. To the extent
paragraph 73 implies wrongdoing or non-compliance by Arnold Builders, such allegations are denied.
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DEFENDANT ARNOLD BUILDERS INC.’S VERIFIED ANSWER TO PLAINTIFF’S VERIFIED COMPLAINT
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74. Answering Paragraph 74: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 74 and therefore denies them. In particular, Arnold Builders denies that it
was unable or failed to comply with any law, and denies that a receivership is necessary due to any act or
omission by Arnold Builders.
75. Answering Paragraph 75: Paragraph 75 alleges legal conclusions and no response is
required.
SECOND CAUSE OF ACTIONS
(Public Nuisance—Plaintiff People of the State of California Against All Defendants)
(Civil Code sections 3479, 3480, 3491, and 3494)
76. Answering Paragraph 76: Defendants incorporate by reference their responses to paragraphs
1 through 75 as though fully set forth herein.
77. Answering Paragraph 77: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 77 and on that basis denies them.
78. Answering Paragraph 78: Paragraph 78 alleges legal conclusions and no response is
required.
79. Answering Paragraph 79: Arnold Builders denies the allegations in paragraph 79 to the
extent they allege or imply that Arnold Builders’ operation, use, or maintenance of the Subject Property is
in violation of any law or injurious to the public health or welfare. Arnold Builders has not operated, used,
or maintained the property in an unlawful manner. Arnold Builders lacks sufficient information to respond
regarding the operations of other Defendants, and on that basis denies any remaining allegations in
paragraph 79.
80. Answering Paragraph 80: Paragraph 80 alleges legal conclusions and no response is
required.
81. Answering Paragraph 81: Paragraph 81 alleges legal conclusions and no response is
required.
82. Answering Paragraph 82: Paragraph 82 alleges legal conclusions and no response is
required.
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DEFENDANT ARNOLD BUILDERS INC.’S VERIFIED ANSWER TO PLAINTIFF’S VERIFIED COMPLAINT
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83. Answering Paragraph 83: Paragraph 83 alleges legal conclusions and no response is
required.
84. Answering Paragraph 84: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 84 and therefore denies them.
85. Answering Paragraph 85: Arnold Builders denies the allegations in paragraph 85 as they
pertain to Arnold Builders. In particular, Arnold Builders denies that it is individually liable for, or that it
individually contributed to, permitted, or allowed the maintenance of any public nuisance on the Subject
Property. Arnold Builders had no control over the property and did not allow or maintain any nuisance
conditions. Arnold Builders lacks information as to the conduct of other Defendants, and on that basis
denies any allegations in paragraph 85 regarding those parties as well.
86. Answering Paragraph 86: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 86 and therefore denies them.
87. Answering Paragraph 87: Arnold Builders denies the allegations in paragraph 87 as they
pertain to Arnold Builders. Arnold did not operate, use, or maintain the Subject Property in violation of any
state or local laws. Arnold Builders performed limited construction work at the Subject Property. Arnold
Builders denies that its work is or was in violation of any law. Any allegations in paragraph 87 concerning
the acts of other Defendants are denied for lack of information.
88. Answering Paragraph 88: Arnold Builders denies the allegations in paragraph 88 insofar as
they suggest that Arnold Builders “caused, allowed, and/or maintained” continued violations or nuisance
conditions at the Subject Property. Arnold Builders did not cause or allow any such conditions. After
Arnold Builders ceased work due to non-payment, it had no control over what occurred on the property.
Arnold Builders lacks information about what other parties did or failed to do, and on that basis denies the
remaining allegations of paragraph 88.
89. Answering Paragraph 89: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 89 and therefore denies them.
90. Answering Paragraph 90: Arnold Builders denies the allegations in paragraph 90 as they
pertain to Arnold Builders. Arnold Builders has not “caused, contributed to, permitted, failed to prevent,
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DEFENDANT ARNOLD BUILDERS INC.’S VERIFIED ANSWER TO PLAINTIFF’S VERIFIED COMPLAINT
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maintained, or allowed” any public nuisance at the Subject Property. Arnold Builders did not own, possess,
or manage the property and had no ability to prevent or correct the conditions once it left the job. Any
allegation that Arnold Builders had a duty to prevent or did prevent nothing is denied. Arnold Builders is
without knowledge or information sufficient to respond as to the conduct of other Defendants, and on that
basis denies any remaining allegations in paragraph 90.
91. Answering Paragraph 91: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 91 and therefore denies them.
92. Answering Paragraph 92: Arnold Builders denies that it has taken any action that would
annoy or disturb a reasonable person. Arnold Builders is without knowledge or information sufficient to
respond as to the conduct of other Defendants, and on that basis denies any remaining allegations in
paragraph 92.
93. Arnold Builders denies the allegations in paragraph 93 as they relate to Arnold Builders.
Arnold Builders did not engage in any conduct that caused harm, and therefore denies that any balancing
test would weigh against any conduct by Arnold. Arnold Builders has not engaged in any “illegal” conduct
whatsoever with respect to the Subject Property. To the extent paragraph 93 refers to “the seriousness of
harm caused by Defendants” in general, Arnold Builders lacks information as to harm caused by other
parties and therefore denies the remaining allegations.
94. Answering Paragraph 94: Arnold Builders denies any implication in paragraph 94 that
Arnold Builders was asked to, or failed to, comply. Arnold Builders was never in a position of control over
the property requiring its compliance. To the extent paragraph 94 suggests that Arnold Builders engaged in
“violations” to which Plaintiffs could withhold consent, Arnold Builders denies engaging in any such
violations.
95. Answering Paragraph 95: Paragraph 95 alleges legal conclusions and no response is
required.
96. Answering Paragraph 96: Paragraph 96 alleges legal conclusions and no response is
required.
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DEFENDANT ARNOLD BUILDERS INC.’S VERIFIED ANSWER TO PLAINTIFF’S VERIFIED COMPLAINT
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97. Answering Paragraph 97: Paragraph 97 alleges legal conclusions and no response is
required.
98. Answering Paragraph 98: Arnold Builders lacks information or belief sufficient to admit or
deny the allegations in paragraph 98 and therefore denies them.
99. Answering Paragraph 99: Paragraph 99 alleges legal conclusions and no response is
required.
100. Answering Paragraph 100: Arnold Builders denies the allegations in paragraph 100 as they
pertain to Arnold Builders. Arnold Builders is not maintaining or allowing any continued nuisance activity
on the Subject Property. Therefore, Arnold Builders denies that an injunction against it is necessary or
appropriate. Arnold Builders makes no response regarding other Defendants; to the extent paragraph 100
refers to them, Arnold Builders lacks knowledge and denies those allegations on that basis.
101. Answering Paragraph 101: Paragraph 101 alleges legal conclusions and no response is
required.
102. Answering Paragraph 102: Arnold Builders denies the allegations in paragraph 102 as they
relate to Arnold Builders. Arnold Builders has not maintained the Subject Property as a public nuisance,
and therefore denies that its actions (or inaction) have caused the People to incur any nuisance abatement
costs, attorneys’ fees, or other expenses. Arnold Builders lacks information as to what costs Plaintiffs have
incurred in dealing with the property’s condition generally; therefore, to the extent paragraph 102 implies
costs due to “Defendants’” maintenance of a nuisance, Arnold Builders denies any liability for such costs.
THIRD CAUSE OF ACTION
(Nuisance Per Se—Plaintiff City of San Luis Obispo Against All Defendants)
(San Luis Obispo Municipal Code)
103. Defendants incorporate by reference their responses to paragraphs 1 through 102 as though
fully set forth herein.
104. Answering Paragraph 104: Paragraph 104 alleges legal conclusions and no response is
required.
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DEFENDANT ARNOLD BUILDERS INC.’S VERIFIED ANSWER TO PLAINTIFF’S VERIFIED COMPLAINT
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105. Answering Paragraph 105: Paragraph 105 alleges legal conclusions and no response is
required.
106. Answering Paragraph 106: Paragraph 106 alleges legal conclusions and no response is
required.
107. Answering Paragraph 107: Paragraph 107 alleges legal conclusions and no response is
required.
108. Answering Paragraph 108: Paragraph 108 alleges legal conclusions and no response is
required.
109. Answering Paragraph 109: Paragraph 109 alleges legal conclusions and no response is
required.
110. Answering Paragraph 110: Paragraph 110 alleges legal conclusions and no response is
required.
111. Answering Paragraph 111: Arnold Builders denies the allegations in paragraph 111 to the
extent they assert that “Defendants” (including Arnold) are responsible for causing, maintaining,
permitting, suffering, or allowing violations of the San Luis Obispo Municipal Code or other laws on the
Subject Property. Arnold Builders specifically denies that it caused, maintained, permitted, or suffered any
such violations. As a subcontractor with no control of the premises, Arnold Builders did not and could not
allow or maintain any condition on the property.
112. Answering Paragraph 112: Arnold Builders denies the allegations in paragraph 112 as they
relate to Arnold Builders. Arnold Builders was neither an owner nor a person in control of the property
during the relevant times and thus had no ability to prevent or correct the alleged violations. To the extent
paragraph 112 implies that Arnold Builders, as a party “with a recorded interest,” had a duty to ensure the
property’s compliance, Arnold Builders denies any such duty existed in law or fact. Arnold Builders
further denies that it is “responsible” for any of the violations or nuisance conditions at issue.
113. Answering Paragraph 113: Paragraph 113 alleges legal conclusions and no response is
required.
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114. Answering Paragraph 114: Paragraph 114 alleges legal conclusions and no response is
required.
115. Answering Paragraph 115: Arnold Builders denies the allegations in paragraph 115 as they
relate to Arnold Builders. Arnold Builders was neither an owner nor a person in control of the property
during the relevant times and thus had no ability to prevent or correct the alleged “nuisances per se.”
Arnold Builders makes no response regarding other Defendants; to the extent paragraph 115 refers to them,
Arnold Builders lacks knowledge and denies those allegations on that basis.
116. Answering Paragraph 116: Arnold Builders denies the allegations in paragraph 115 as they
relate to Arnold Builders. Arnold Builders was neither an owner nor a person in control of the property
during the relevant times and thus had no ability to abate the alleged “nuisances per se.” Arnold Builders
makes no response regarding other Defendants; to the extent paragraph 116 refers to them, Arnold Builders
lacks knowledge and denies those allegations on that basis.
FOURTH CAUSE OF ACTION
(Unlawful Business Practices—Plaintiff People of the State of California Against All Defendants)
(Business and Professions Code section 17203)
117. Defendants incorporate by reference their responses to paragraphs 1 through 116 as though
fully set forth herein.
118. Answering Paragraph 118: Paragraph 118 alleges legal conclusions and no response is
required.
119. Answering Paragraph 119: Paragraph 119 alleges legal conclusions and no response is
required.
120. Answering Paragraph 120: Paragraph 120 alleges legal conclusions and no response is
required.
121. Answering Paragraph 121: Paragraph 121 alleges legal conclusions and no response is
required.
122. Answering Paragraph 122: Paragraph 122 alleges legal conclusions and no response is
required.
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123. Answering Paragraph 123: Arnold Builders denies that it has violated any law related to the
Subject Property. Arnold Builders makes no response regarding other Defendants; to the extent paragraph
123 refers to them, Arnold Builders lacks knowledge and denies those allegations on that basis.
124. Answering Paragraph 124: Paragraph 124 alleges legal conclusions and no response is
required.
125. Answering Paragraph 125: Arnold Builders denies that it has engaged in any unlawful
business practices related to the Subject Property. Arnold Builders makes no response regarding other
Defendants; to the extent paragraph 125 refers to them, Arnold Builders lacks knowledge and denies those
allegations on that basis.
126. Answering Paragraph 126: Arnold Builders denies that it has engaged in any unfair
competition related to the Subject Property. Arnold Builders makes no response regarding other
Defendants; to the extent paragraph 126 refers to them, Arnold Builders lacks knowledge and denies those
allegations on that basis.
127. Answering Paragraph 127: Paragraph 127 alleges legal conclusions and no response is
required.
128. Answering Paragraph 128: Paragraph 128 alleges legal conclusions and no response is
required.
129. Answering Paragraph 129: Arnold Builders denies that it has engaged in any unlawful
business practices related to the Subject Property. Arnold Builders makes no response regarding other
Defendants; to the extent paragraph 129 refers to them, Arnold Builders lacks knowledge and denies those
allegations on that basis.
AFFIRMATIVE DEFENSES
As separate and distinct affirmative defenses to the Complaint, and each cause of action therein,
Defendant Arnold Builders alleges as follows:
FIRST AFFIRMATIVE DEFENSE
(Failure to State a Cause of Action)
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The Complaint fails to state facts sufficient to constitute a cause of action against Arnold Builders.
Plaintiffs have not alleged any specific wrongful act or omission by Arnold Builders that would give rise to
liability. Arnold Builders is named in this action solely because it holds a mechanic’s lien interest in the
property and must be given notice of a receivership petition. There are no allegations that Arnold Builders
violated any code, created any hazardous condition, or maintained any nuisance. In fact, Arnold Builders’
role was limited to performing construction work under contract, and it had ceased work long before the
City filed this lawsuit. Therefore, even accepting the Complaint’s allegations as true, no viable cause of
action is stated against Arnold Builders.
SECOND AFFIRMATIVE DEFENSE
(No Duty/Owning or Controlling Interest)
At all relevant times, Arnold Builders did not own, lease, or control the Subject Property, and thus
owed no duty to abate or prevent the conditions complained of. Arnold Builders was a subcontractor and
later a lienholder – not an owner, not a possessor, and not a person in charge of the property’s management.
It had no authority to enter the property or make repairs after its work was stopped. Accordingly, Arnold
Builders cannot be held liable for nuisance or code violations on a property that it did not control. The law
imposes nuisance-abatement duties on those in possession or control of property (such as owners and
operators), not on parties with a purely financial interest like a mechanic’s lien. Because Arnold Builders
lacked any ability to supervise, maintain, or correct the property’s condition, it had no legal obligation to
do so.
THIRD AFFIRMATIVE DEFENSE
(Lack of Causation (Acts of Others))
Any unlawful or hazardous conditions at the Subject Property were caused and continued by the
acts or omissions of others, not by Arnold Builders. Specifically, the property owner (Laurel Creek LP and
related entities) and the general contractor (Smith & Company, acting through Patrick N. Smith) are the
parties who controlled the project and property. It was their responsibility to obtain final inspections,
maintain the premises, and address code compliance. Arnold Builders’ involvement was limited to framing
and related work between February and June 2023. Arnold Builders performed that work properly and in
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accordance with plans and permits. When Arnold Builders left the project (due to no fault of its own), the
unfinished state of the construction and any resulting violations were due to the owner and general
contractor failing to complete the work. These intervening failures by the owner/developer — such as
abandoning the project, ignoring Notice of Violation orders, and leaving the building in disrepair — are the
direct and superseding causes of the public nuisance conditions. Arnold Builders’ actions did not
proximately cause any of the harms alleged. Therefore, even if any condition of the property constitutes a
violation or nuisance, the causal chain was broken by the conduct of third parties, relieving Arnold
Builders of any liability.
FOURTH AFFIRMATIVE DEFENSE
Prevention of Performance (Excuse)
Arnold Builders’ further performance of work at the Subject Property was prevented, hindered, and
excused by the conduct of the property owner and general contractor. On or about June 1, 2023, the general
contractor (Smith & Company) materially breached the subcontract with Arnold Builders by failing to pay
for the work completed. Despite repeated requests, Arnold Builders was never paid for work it had
completed, leaving Arnold uncompensated. This material breach by others excused Arnold Builders from
any further duty to perform work on the project. In fact, Arnold Builders had performed all required work
up to that point and would have continued but for the lack of payment. Once Arnold Builders justifiably
ceased work, it had no ability to correct or complete any remaining construction. In short, any contractual
or voluntary role Arnold might have had in remedying the property’s condition was nullified by the
owner’s/contractor’s own breach and prevention of Arnold’s performance. Equity and law do not hold a
party liable for failing to act when that party was prevented from acting by the very parties responsible for
the harm.
FIFTH AFFIRMATIVE DEFENSE
(Comparative Fault of Others)
Even if liability is considered, the fault lies overwhelmingly with other parties, not Arnold Builders.
The property owners and those in control (e.g. Laurel Creek LP, its general partners, and the general
contractor) had the responsibility to obtain permits, finish construction, and comply with code
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requirements. They failed to do so, which allowed the substandard conditions to persist. Arnold Builder’s
involvement was limited and terminated early through no fault of its own. Any obligation to abate or
liability for penalties should be apportioned among the truly responsible parties, with no liability assigned
to Arnold Builders.
SIXTH AFFIRMATIVE DEFENSE
(Statute of Limitations and Laches)
Plaintiffs’ claims, to the extent they seek to hold Arnold Builders liable for ongoing unlawful
business practices or nuisance conditions dating back several years, are barred by applicable time
limitations. The Unfair Competition Law claim (Bus. & Prof. Code § 17200 et seq.) is subject to a four-
year statute of limitations, yet Plaintiffs allege that the City has been attempting to gain compliance at the
property for over five years. Arnold Builders had no involvement with the property before early 2023, and
any purported unfair or unlawful practices prior to that time cannot be attributed to Arnold. It would be
unjust to impose liability on Arnold Builders for conditions that existed or were initiated outside of the
limitations period and long before Arnold’s limited work on the project. Additionally, to the extent
equitable relief is sought, the doctrine of laches may apply: the property’s issues were known for years, and
Arnold Builders was not brought into this matter until late 2025, after its role had long concluded. Any
claims against Arnold Builders that rely on events occurring more than four years before the filing of this
action, or before Arnold Builders became involved with the property, are time-barred.
WHEREFORE, Arnold Builders prays for judgment as follows:
1. That Plaintiffs take nothing by their Complaint and that the Complaint be dismissed in its
entirety, with prejudice;
2. For Defendant’s costs of suit incurred herein;
3. For reasonable attorneys’ fees as may be allowed by contract or statute; and
4. For such other and further relief as the Court may deem just and proper.
DATED: January 9, 2026 THE BAILEY LAW FIRM
By: _________________________________
Jonas Bailey, Esq.
Attorney for Defendant ARNOLD BUILDERS, INC
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Verification
I, Nicholas Francis Arnold, declare as follows:
I am the owner of Arnold Builders, Inc., the answering Defendant in this action. I am authorized to
make this verification for and on behalf of Arnold Builders, and I make this verification in that capacity.
I have read the foregoing DEFENDANT ARNOLD BUILDERS INC.’S VERIFIED ANSWER TO
PLAINTIFF’S VERIFIED COMPLAINT. I know the contents thereof, and the facts stated therein are true
of my own knowledge, except as to those matters which are stated on information and belief, and as to those
matters, I believe them to be true.
I declare under penalty of perjury under the laws of the State of California that the foregoing is true
and correct.
Executed on _____________, 2026, at ________________, California.
_________________________
Nicholas F. Arnold
Owner, Arnold Builders, Inc.
January 9 San Luis Obispo
PROOF OF SERVICE
STATE OF CALIFORNIA
COUNTY OF SAN LUIS OBISPO
I, Courtney Jenison, declare as follows:
I am a resident of the United States and an employee in the County of San Luis Obispo. I am over the age
of 18 and not a party to the above-entitled action. My business address is 1405 Garden Street, Suite 2, San
Luis Obispo, CA 93401.
On the date set forth below, I caused the document(s) described below to be served:
DEFENDANT ARNOLD BUILDERS INC.’S VERIFIED ANSWER TO PLAINTIFF’S VERIFIED
COMPLAINT
on the interested parties in this action addressed as follows:
[ ] BY UNITED STATES MAIL: I am readily familiar with the firm's practice of collection and processing
documents for mailing. Under that practice, the envelopes are sealed and with postage thereon fully
prepaid, deposited with the United States Postal Service on that same day at San Luis Obispo,
California, in the ordinary course of business. I am aware that, on motion of the party served,
service is presumed invalid if the postal cancellation date or postage meter date is more than one
day after the date of deposit for mailing in this affidavit.
[ ] BY HANDDELIVERY: I personally delivered such envelope to the offices of the addressee, following
ordinary business practices.
[ X ] BY E-MAIL: On the below-date, I sent the above-described document(s) electronically to the
recipient(s) noted below via e-mail addresses listed below.
[ ] BY OVERNIGHT COURIER: I caused such document(s) to be delivered by overnight mail to
the offices of the addressee by depositing such documents with FedEx.
I declare under penalty of perjury under the laws of the State of California that the foregoing is
true and correct. Executed on January 9, 2026 at San Luis Obispo, California.
/s/ Courtney Jenison
Courtney Jenison
SERVICE LIST
Sean Morrissey
smorrisssey@civicalaw.com
Matthew Silver
msilver@civicalaw.com
Lauren McElroy
lmcelroy@civicalaw.com
Nicholas Garces
ngarces@civicalaw.com
Meagen E. Leary
MELeary@duanemorris.com
Marcus O. Colabianchi
MColabianchi@duanemorris.com