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Shy Suit Against Homeowners Alleges Defamation, Loss of Business

By Eric Richardson
Published: Friday, August 08, 2008, at 01:32PM
SB Grand Eric Richardson []

The two homeowners named in Shy's suit live in SB Grand, at 5th and Broadway.

On June 17th, developer Barry Shy and 5th St Lofts LLC filed a lawsuit against two homeowners in the SB Grand lofts. The lawsuit alleges that the two, along with an unknown number of "John Does," made statements on the internet that led to a loss of business for 5th St Lofts and slandered both Shy and the company.

While this site is not named in the suit, the section alleging defamation against Shy includes six examples of disparaging statements made against the developer, and all are taken from comments here on blogdowntown.

It would not seem a controversial thing to say that Downtown residents hold developer Barry Shy in less than the highest esteem. In September of 2004, the Downtown News , Shy's first Downtown project.

Tenants in the Higgins Building at Second and Main charge that owner Barry Shy has exhibited a pattern of deceit and intimidation. Among the accusations are that Shy overstated the size of their units to lure them into the building, and that he promised in writing to sell units for tens of thousands of dollars less than he is now asking. Many charge Shy with bullying them into purchasing their units before they are legally required to do so.

Despite that trouble, Shy has continued to expand his Downtown collection, opening the Bartlett at 7th and Spring in 2005, SB Grand at 5th and Broadway in 2006, and more recently rental projects SB Manhattan and SB Lofts at 6th and Spring in .

Jessica Jordan, a resident of SB Grand and one of the named defendants, runs the website . On the site she says that it was created to "inspire positive change at the Shybary Grand by identifying issues that need to be dealt with by the board and management company, especially if those issues have ignored California Law." A favorite topic has been a lack of transparency by the Homeowners Association board.

Jordan is one of two homeowners at SB Grand named in the suit, which she . Though the suit claims that the other homeowner, Alan Dylan, is also connected with truedowntown, Jordan says that's not that case. Her defense has been taken up by the , a nonprofit advocacy organization that handles free speech cases. Attorney Jamey Leonard said that it's important people like Jordan are able to keep speaking:

"We encourage Ms. Jordan to continue to contribute to this debate, even in the face of strategic litigation, and we commend her for her courage. The United States and California Constitutions both guarantee that Ms. Jordan and her fellow citizens have the right to truthfully comment on matters of public interest. It is the goal of the First Amendment Project to insure that Ms. Jordan and others are not silenced, intimidated or removed from public discussion due to intimidating litigation. We encourage Ms. Jordan and others in her position to keep speaking-up and participating in America’s unique and powerful marketplace of ideas."

The suit contains three sections. The first alleges that Jordan and Dylan started truedowntown to publish false statements about Shy and 5th Street Lofts, with the "intention of discouraging prospective tenants and purchasers from moving into the building." The second alleges libel and slander against 5th St Lofts, alleging intentionally false statements about the work on the building.

The third alleges libel and slander against Shy, and the "disparaging statements" included are all drawn from comments on our two-paragraph story from March of 2006 about Shy's purchase of three buildings in the Historic Core. The story has attracted sixty comments, continuing to receive traffic to this day.

From the suit:

The disparaging statements made by Defendants were intentional, false, misleading and malicious, and include amoung other things, the following:

a) Barry Shy is a criminal

b) Barry Shy is a "slum lord"

c) Barry Shy is "dishonest" and only cares about "making a profit"

d) "Do Not Buy or Rent from Barry Shy you will regret it"

e) Barry Shy has broken Federal Laws

f) Barry Shy is a horrible business man with no principals

Given that plenty of the aforementioned sixty comments reflect this point of view, one might suspect that the courts aren't the place for Shy and 5th St Lofts to restore their image.

Shy and 5th St Lofts are represented by Lyden & Jackson, located in Woodland Hills. The case is filed in the State Superior Court.

Update (August 13): Added a longer quote from Jordan's attorney, Jamie Leonard. That portion of the story had previously read: "Attorney Jamey Leonard could not comment on the case itself, but expressed that the goal of the organization's legal defense was to allow people to keep talking."

PREVIOUSLY: Shy Keeps Buying on Spring

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Conversation

Guest 1

Haven on August 08, 2008, at 02:07PM – #1

"Given that plenty of the aforementioned sixty comments reflect this point of view, one might suspect that the courts aren't the place for Shy and 5th St Lofts to restore their image."

^exactly. I couldnt imagine this suit would have much traction. If Barry Shy would like to improve his reputation, he needs to do it with actions. Jordans website seems to be focused on correcting problems, holding Shy accountable, and improving the buildings and the area around the buildings. Many of buildings he now owns are really beautiful historic gems. Especially the buildings on spring street. I think this area - Spring between 4thish and 7thish, holds much more potential for revitalization than Broadway does. It has better buildings, it has beautiful mature trees, is very walkable, it is not overrun with shops the way Broadway is so existing businesses would not have to be threatened in the face of a revival plan.


Guest 2

David Kennedy on August 08, 2008, at 02:10PM – #2

Where do we send contributions to Ms. Jordan's defense fund? All who care about freedom of speech and the development of downtown ought to contribute.


Eric Richardson () on August 08, 2008, at 02:20PM – #3

Jessica's getting free counsel from the , which I'm sure would be glad to take your donation. They're a non-profit and funded by people who believe in free speech.


Guest 3

TONY OKAMA MASHITA on August 08, 2008, at 03:13PM – #4

MR.SHY needs realize it's freedom of speech,not slander or even libel!


Guest 4

Rich Alossi on August 08, 2008, at 07:13PM – #5

Another reason I won't involve myself or my brand with Shy.

Opening a business or development is a testament to one's desire to be a part of an established community -- but the disdain Shy shows for his historic structures (and by extension, tenants) is borderline Palmer-esque. Corners are cut just about everywhere. Ugh.


Guest 5

nanorich on August 08, 2008, at 08:54PM – #6

"The corporate technique of suing people into silence and submission has become so popular that it even carries its own cute nickname in legal circles. Such lawsuits are known in lawyer lingo as "SLAPP suits," an acronym for "strategic lawsuits against public participation." They are, in effect, fines imposed on opponents of those who can afford to use them."

It is not surprising that Barry is attempting to use this technique to silence his critics. (he also uses paid shills in an attempt to shout down and intimidate his victims. He has at least one HOA under his control at one of his worst buildings.

And oh, by the way...none of the above accusations against Barry can called "intentional, false, misleading and malicious.

However there has been a conspiracy on the part of real estate agents who carry listings not to disclose the myriad problems with his buildings....and that...my friend...is illegal.

And they go out of their way to muzzle people unhappy with his buildings.


Guest 5

nanorich on August 08, 2008, at 09:03PM – #7

If you are interested in Slapp suits, the 1st Amendment project has a lot of information on this anti-democratic pheonom...

I really hope that Barry's lawyers told him that what he is doing could backfire, because since 1993, California does not take kindly to these suits....

"The law allows a judge to decide at the outset of the suit whether the SLAPP has a "probability" of winning. If the judge finds that it does not, the SLAPP must be dismissed, and the SLAPP target wins his or her legal defense costs and attorneys' fees."


Guest 6

Benjamin Pezzillo on August 10, 2008, at 08:20PM – #8

The truth can often be the best defense when accused of slander, libel or defamation.

The accuser's burden is proving the both the falsehood of the comments and the nexus between the comments and the loss claimed.

Incidentally, you can exercise your freedom of expression while still slandering, libeling or defaming. Newspapers and other media outlets are not immune from such claims simply by stating comments were made in the course of exercising their freedom of expression.

The burden for claims of slander, libel and defamation is generally higher for people who are public figures ex officio or otherwise seek public figure status. One might argue that Shy's own public comments about his real estate holdings put him in the neighborhood of a public figure.


Guest 7

BusTard on August 11, 2008, at 03:12PM – #9

As the SLAPP suits imply it is not victory that is desired by those who know what has been done is wrong and that the slander/libel suits filed will make their actions appear wholesome, but the great drain and very possible demise of those entities that have brought to light the truth of the filing party's duplicitous actions. many a small newspaper has been destroyed despite winning in court, owing to their resources being exhausted from fighting a far better funded adversary. I only hope that this blog is not silenced by the S(o)Bs.


Guest 6

Benjamin Pezzillo on August 11, 2008, at 06:37PM – #10

For once, I actually agree with BusTard.


Guest 8

Jeremy R on August 12, 2008, at 04:18PM – #11

A) I might just donate some money to the first amendment project. It is a noble cause.

B) The la weekly should bust this story wide open and expose Barry for what he is. He has crossed the line with this SLAPP suit, and the full weight of bloggers and alternative journalism should attack him with everything they got!


Guest 9

Downtown Owner on August 13, 2008, at 04:57PM – #12

To clarify, The Bartlett Building is not owned by Barry Shy, although Shy was the developer of the building. The Bartlett Building is owned by the collective Home Owners Association of 140 condominium owners that make up the Bartlett Community. Barry Shy is only one of the condominium owners, who owns the first floor commercial unit/parking garage.

The Bartlett Building's HOA Association acted swiftly to get the property management company (who handles our accounting and day-to-day operation of the building) out of the influence of Barry Shy, ultimately replacing that property management company with one selected by the Home Owners Association. Barry Shy became a minority of "one" on the Board of Directors as the Association voted in Directors that better represented the interests of the entire community. As of this last March, Shy is no longer a Director on the Association Board (his term expired), so the building is entirely directed and controlled by the majority members of the Association.

Our finances have been managed very well by subsequent Boards of Directors, keeping our HOA dues low.

The Bartlett Building has turned out to be a great community, now that our initial growing pains are over.


Eric Richardson () on August 13, 2008, at 05:35PM – #13

Downtown Owner: And that's exactly how the process of an HOA should happen. The developer finishes the building, sells the units, and an HOA takes over operation.

The same is true with the Higgins, though I understand they have some issues with Shy left to work out.


Guest 5

nanorich on August 13, 2008, at 07:13PM – #14

As long as Shy controls the parking, only pays a token of homeowner fees while owning an illegal apartment and his slummy retail space...and continues to have a tame HOA association which refuses to aggressively go after him for the horrible problems there, there will be real estate agents who will fail disclose the myriad problems there in the desperate desire to sell anything there to anyone foolish enough purchase space developed by this man. There has been a continued effort to silence any serious discussion of the problems at the Bartlett. And can you blame the poor owners who are stuck at that place.

According to the Barlett web page, Shy continues to on the Board of the HOA.


Guest 9

Dowtown Owner on August 14, 2008, at 11:03AM – #15

Nanorich. You apparently don't own in the building, because you are not aware that the website has not been updated with the names of the two new Board members, one of which filled the position that Shy occupied. That website has not been maintained because the volunteer has had family matters to attend to. The Bartlett Building has been in successful litigation with the Shy over construction defects (public record - search for it), hiring a law firm that specializes in such suits and has never lost a case.

"Stuck at the place?" While almost every other development under the Adaptive Reuse Program is going through the same problems (try looking into the 1100 Wilshire building, for example - or the parking suituation that will hit the Rowan when it opens), or is run by an irresponsible Board of Directors who tank their finances into the red, or have had to double their HOA dues to pay for ridiculous property management companies an ammenities that serve no purpose - I'll stay "stuck" at the Bartlett Building.

The reason I posted the clarification is specifically to address people like Nanorich and bloggers who thrive off of the gossip mill and rumors, not knowing the facts or caring to investigate for themselves. We could have been a building that could have ended up a disaster, but because of the swift actions of owners that decided to become knowledgeable, that was avoided.


Guest 10

Bart Bldg parking on August 14, 2008, at 02:23PM – #16

Several calls to the Bartlett Bldg parking "manager" about the parking levels looking like a trash dump and asking for trashcans has deemed unsuccessful.


Guest 5

nanorich on August 14, 2008, at 03:55PM – #17

When one of these people says: "You aren't a homeowner" as if not buying a place which is overpriced by hundreds of thousands of dollars with a neutron bomb loan is a bad thing has always puzzled me.

I had to laugh when one of these people who look down their noses at me because I was a renter.....(I may have not had negative equity, but nobody is perfect.)



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