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RICHARD W. TAYLOR W. STEPHEN SCOTT KENNETH A. NICHOLS TAYLOR, SCOTT & NICHOLS A PROFESSIONAL LAW CORPORATION 120 N. HUNTER STREET - SECOND FLOOR STOCKTON. CA 95202 POST OFFICE BOX 1930 MARK E. TRIBBLE STOCKTON. CALIFORNIA 95201 MICHELE M. LARSON September 25, 1987�__ffye` Jogi Khana, M.D. San Joaquin Local Health District 1601 East Hazelton Avenue Stockton, California 95202 Re: Insured San Joaquin File No. : C4435 Claimant : Schlueter D/Loss 2/15/86 Dear Dr. Khana: MICHAEL J. MATTEUCCI OF COUNSEL TELEPHONE 12091 942-4300 SEP 281987 gn.,d JO,AQUIN LOCAL I iLALtH DISTRICT Local Health District I am writing with a synopsis of recent developments in the above -entitled matter as well as overview of the status of the Los Ranchos/Wakefield Court Indemnity matter, which is consuming increasing amounts of time. As to the Indemwity matters, I understand that as a result of two recent meetings between my associate, Michele M. Larson, and Ron Valinoti, San Joaquin Local Health District does not intend to halt development in the Los Ranchos/Wakefield area. The reason for this, as I understand it, is that Mr. Valinoti feels no health threat is involved but only questionable palatability of the water. Specifically, he feels that the levels of totaled dissolved solids and specific conductance in that area are not sufficient to cause property damage to plumbing and appliances and there is no evidence that those levels will result in personal injury, as alleged in the Schlueter matter. On the other hand, he feels it is quite likely that Howard Seligman will pursue suit on behalf of the developers should construction be halted by the Health District or should a Cease and Desist Order be posted against the wells in the Los Ranchos/Wakefield Court area. Essentially, this decision represents taking a calculated risk that Mr. Seligman is more likely to sue for damages resulting from loss of construction profits than the property owners are to sue for personal injury and property damage, as the plaintiffs in Schlueter already have done. My understanding is that Ms. Larson explained to Mr. Valinoti that Mr. Seligman's success in such a suit is questionable, but that we cannot guarantee current or former property owners will not sue hence generated defense costs to the Health District.