Tenants Win Methos Class-action Lawsuit Settlement

D Street Apartments at 102-120 D Street in Salida, declared by both Chaffee County and city as unsafe for occupancy. Photo by Merrell Bergin.

Signed, Sealed, and Nearly Delivered; Proposed Order Approving $1 Million Settlement to Mehos Victims

The saga of a group of tenant apartments known as the D Street, East First, and F Street Apartments will go down in Salida history for several reasons.

Not just because it was a neglected horror of buildings where bathtubs fell through floors, cockroaches crawled walls, and bedbugs were resistant to interventions. Not only because the heat didn’t work, and raw sewage poured into the basement. Not just because children’s health deteriorated from ailments from skin infections to asthma caused by walls covered in black mold.

Now, the final chapter has been written, and it appears there is soon-to-be justice for the victims of this place that no sane person would want to call home.

This past week, a proposed order approved the settlement of the class action lawsuit against defendants John G. Mehos, et al. The settlement applies to the tenants of 102 D Street, 233 East First Street and 117-1/2 F Street. It has taken seven years of legal efforts to push forward a premises liability and breach of contract case that was initially filed in 2018.

“I want to express that throughout these years, the clients really expressed admirable patience and fortitude to see this through. I can’t thank them enough,” said Attorney Matthew (Matt) Hobbs of the seven-year battle. “It’s individuals like these who don’t have a voice to speak out against power. We fought for their voice.”

From its beginnings in 2017, the case was handled by Salida Attorney Matthew Hobbs. Coming in a few years later was co-counsel law firm Cain & Skarnulis with offices in Austin, Texas, and Salida, Colorado.

Ark Valley Voice has obtained copies of the documents that grant a $1 million settlement to the tenants of the buildings who endured not just substandard conditions but threats and intimidation. The order is Court-stamped,  meaning the court agreed to everything described in the settlement documents.

One of the buildings (D Street) had sat empty since 2017 when it was deemed uninhabitable by the Chaffee County Building Department and Salida Police Department. Two sister buildings (on East First and F Streets) were occupied for a while, before the city acquired the East First and D Street sites in May, 2022. The structures were demolished in August 2023, potentially making room for a significant amount of workforce housing within walking distance of the downtown Historic and Creative Districts. The F Street building has been vacant for nearly two years, its entryway secured against admittance, and its future fate unknown.

The Mehos court settlement documents are time stamped as March 28, 3:25 and 3:26 p.m. while the Plan of Distribution is dated February 13, at 4:01 p.m. AVV Photo by Jan Wondra

Justice for the Victims

It’s taken longer than the two buildings’ demolition to get justice for the victims.

Hobbs explained, “We got an economic damage expert that placed their damages at upwards of $3 million. There were policy limits on their insurance policies and we got a fair settlement of $1 million. The conditions in those apartments were nightmarish. I toured them and have to say it took me a few days to get over what we saw there. It’s rare that an insurance company wants to write a check for a million dollars, but that’s what they are going to do.”

The proposed order granting settlements into the five figures for the former tenants is complex and lengthy. It breaks down the various amounts awarded to each tenant and the reasoning for those amounts.

The distribution depends on various factors, including how long the individual tenants resided at the property, whether they had any minor children living with them at the time, and whether the individual member served as a class representative.

There were three different “classes” of settlement set up by the court. The plan of distribution includes reimbursement to tenants for rent they paid, non-economic damages, the return of damage deposits, and additional compensation for class representatives. The settlements will be paid by General Casualty Company of Wisconsin, represented by QBE America’s Inc.

The first group of 30 tenants were living in the D Street Apartments on May 2, 2017, when they were shut down.

The second group of about 12 tenants (the number impacted by the statute of limitations) called a security deposit class, consisted of those impacted when the landlord routinely refused to return security deposits to the tenants when they left the abysmal conditions. “Conditions were horrible,” said Hobbs. “Nothing was fixed and the landlord wouldn’t clean the apartments so when new tenants moved in they would have to come in and do their own cleaning. But all their security deposits would be retained when they moved out.”

The third group referenced as the breach of contract class, is a group of 29 tenants set up by the court to receive a refund of all rent payments that applied to the D Street, East First Street, and F Street apartments.

“The plan of distribution was approved by the court, and a lot are getting life-changing amounts of money,” said Hobbs. “What they endured was horrible; bed bugs, [in] one apartment the bathtub fell through the ceiling into another apartment. There was black mold everywhere, raw sewage in the basement. There was no heat, no water, and the tenants were threatened that if they didn’t pay their rent, that DHS (Department of Human Services) would be called. It’s individuals like these who don’t have a voice to speak out against power that we fought for.”

A special negligence class was set up for the children of the families who endured these conditions. “The kiddos didn’t pay rent, so they’re not part of the economic damages subclass, but the kids who were living there as of May 2, 2017 will each receive $5,000,” said Hobbs. “The court-ordered money will be put into what is known as a “unified transfer of minor account” to be held by the court until they turn 18.”

Hobbs commended the tenant families for their patience and fortitude in pursuing legal action. “This has dragged out since 2017 and the case was filed in 2018, so it’s been on my desk for years. All those individuals have pretty unique stories. Since having been removed from those buildings, some have suffered chronic homelessness, a couple have been able to rebuild their lives, but all have horrific stories of landlord intimidation and threats that silenced them.”

Residual Fund to Stand up for Future Tenant Issues

With an eye to the fact that these were low-income working families, the settlement includes a residual fund for leftover case proceeds that will be donated in equal parts to the Chaffee County Housing Trust and to the Colorado Lawyer Trust Account Foundation.

“It’s been a long story and I’m glad the final chapter will be written,” concluded Hobbs. “Hopefully it sends a message to other landlords that you can’t treat tenants like this even if they are voiceless and powerless.”

The Mehos family members included brothers John Mehos, Dr. William Mehos, Mark Mehos (representing the estate of William Mehos),and Constantine Mehos. They owned these buildings outright (with Dr. Mehos listed as an owner on the D and East First Street Apartments, but not the F Street location).

“The Mehos were a prominent family. None of these buildings had a penny of debt … not a dime of debt. I don’t have a clue what they were doing with this money,” said Hobbs. “When I deposed Mehos he said ‘This was my brother’s deal, I had nothing to do with it’. ‘Well’, I said, ‘your name’s on the deeds. Your liability is there'”.

“It’s individuals like these who don’t have a voice to speak out against power. What matters is how you treat people who have no power,” added Hobbs, speaking about the seven-year battle to win justice for his clients. “They wouldn’t have been getting away with this if it were doctors, or journalists, or other professions.”