COBB, Calif. – The Lake County District Attorney's Office reported this week that a manager at Hoberg's Resort and Spa has pleaded guilty to a misdemeanor for potentially exposing his employees to asbestos during the early stages of the historic resort's renovation three years ago.
Daniel E. Nelson pleaded guilty to a misdemeanor violation of California Labor Code section 6423 – willfully violating a Cal/OSHA standard – on April 6, the District Attorney's Office reported.
The Lake County District Attorney's Office also filed charges against Nelson for failing to secure workers’ compensation insurance, a violation of section 3700.5 of the California Labor Code, and violations of section 42400 of the California Health and Safety Code concerning asbestos emissions control measures.
However, those counts were dismissed with a “Harvey waiver,” entitling Nelson’s victims to restitution, the District Attorney's Office said.
“The District Attorney’s Office will take serious any environmental crime that poses a health hazard to the owner’s employee and the general public,” District Attorney Don Anderson said in a written statement. “We will use all available resources to investigate and prosecute these types of crimes. In this matter the disposition of the case is adequate, not only is the defendant punished but a fund is established to treat the victims’ health needs.”
In its case, the District Attorney's Office alleged that in 2012 Nelson repeatedly violated the Cal/OSHA asbestos workplace-safety regulations for structure demolitions, which caused a real and apparent hazard to employees by means of potential exposure to asbestos.
The 55-acre resort was sold in April 2014 by Cobb Mountain Partners – who had owned it since July 2010 – to Silvester Rabic and Frank Sasselli of Lake County Partners LLC for an undisclosed amount, as Lake County News has reported.
The District Attorney's Office said Nelson was the acting manager of Hoberg’s Resort and Spa under the previous ownership at the time the violations occurred.
Nelson told Lake County News that in 2012 he was assisting the resort's previous owners by acting “in the capacity as a consultant.”
He continues to be involved in the resort's management, operations and renovation as its executive vice president.
The resort has since opened on a limited basis, and hosted a series of concerts last summer.
Investigating violations
Matthew Carr, a circuit prosecutor for the California District Attorneys Association, handled the case.
Circuit prosecutors like Carr bring experience in such cases to rural counties that don't have the resources, and increase those agencies' abilities to take on workplace safety crimes, Carr said.
Carr called the case “a somewhat unusual” one from both the environmental and workplace safety perspectives.
The case was investigated by Doug Gearhart, air pollution control officer for the Lake County Air Quality Management District, and by Lake County District Attorney’s Office Investigator John Flynn.
Gearhart told Lake County News that the renovation project started back in 2011 with some early work on the building across Highway 175 from the main resort.
The District Attorney's Office said an asbestos inspection was performed on Sept. 6, 2011, which found asbestos present in all samples.
Gearhart said the county received an incomplete asbestos notification form for the renovation that same month from Mary Jane Fagalde, the county's former Community Development Director, who was representing Hoberg’s. Gearhart said that notification was never completed.
Gearhart said he and his staff made “significant effort” to educate the resort's management staff on the asbestos issues and requirements, which also were requirements of the California Environmental Quality Act process that the resort went through to start the property renovation. Those requirements were not followed, Gearhart added.
Then, in August 2012, district staff observed large piles of demolition debris at the main resort, which kicked off an inquiry. Gearhart said his staff brought in the Lake County Community Development Department to help determine what activities were occurring and whether they were following all county permits.
“We also began receiving complaints from the community. We were additionally contacted by Air Resources Board and Cal OSHA regarding this site,” Gearhart said.
The District Attorney's Office said a notice of violation was immediately issued to Hoberg’s citing the failure to inspect for asbestos, failure to notify and for renovating without notice.
Gearhart said his staff issued the violation to Hoberg’s Resort, as no contractors were observed during any of the district's inspections.
However, Carr noted, “This case was unusual in that there was a contractor on site.”
Nelson and Carr both told Lake County News that Tom Carter was the contractor involved in the renovations.
“Tom Carter was the contractor we hired at the time to both manage and handle special construction projects with his crew and ours,” Nelson said. “Being that I was consulting the ownership of the resort and Tom Carter denied the direct responsibility for this occurrence, we decided to settle for a misdemeanor offense on this single matter.”
Nelson said he has filed a lawsuit against Carter, seeking reimbursement for the costs and penalties in the criminal case, and he's confident his case will prevail.
“At the end of the day, Tom Carter and Tom Carter Construction will eventually be held responsible for this incident,” Nelson said.
As for potential criminal repercussions for Carter, Carr said, “Nothing has yet been filed against Mr. Carter,” and no final decision has been made about how the District Attorney's Office may proceed against Carter.
“At the very least, Mr. Carter did not dot all of his i's and cross all of his t's,” Carr said.
Melanie Bedwell, a public affairs officer for the Contractors State License Board, told Lake County News that Carter's contractor's license expired on March 31, and he is not currently licensed to contract at this time.
“He will need to renew his license by paying the renewal fee, confirming a contractor bond, and having workers’ compensation insurance if he has employees,” Bedwell said.
Bedwell said there is no current, open complaint the agency is investigating regarding Carter.
Employer responsibilities
While Carter was involved, Carr said the District Attorney's Office had evidence to show that Nelson was actually the employer.
Therefore, the prosecution held that the ultimate responsibility for the renovation's handling belonged to Nelson, Carr said, as he was giving the orders about what work to do and setting the wages for workers.
“We felt that Mr. Nelson was the appropriate target,” Carr said.
Carr said that the “wanton lack of regard” for Hoberg's employees, and the potential exposure to asbestos of as many as 10 employees, was one of the reasons the District Attorney's Office pursued the case.
He said all employers owe their employees a duty to keep them safe. “In this case, that did not happen. Far from it.”
Gearhart said asbestos is a potentially significant issue in Lake County, as there are many buildings that contain asbestos building materials.
Generally, he said those materials are safe as long as they are encapsulated – painted or part of vinyl flooring, or in tar paper and roofing materials – but improper disturbance of these materials can result in exposures to those performing the work and the public.
“Improper disposal can result in asbestos exposures to waste haulers and landfill workers, as well as the public,” Gearhart said.
In Lake County, which has an older housing stock that may have asbestos materials, there are many renovations and demolitions during the year, “a number of which we are not aware of and are likely noncompliant with the federal asbestos regulations,” Gearhart said.
While there are asbestos-containing products on the market today, Gearhart said the number of such products and risk from those products has been significantly reduced.
Carr said he couldn't give a statistically valid estimate of how common asbestos-related criminal cases are, however, he believes they have gone down due to repeated prosecutions, as well as civil consequences, that have taken place across California.
“However, not all of it goes reported,” he said, and often workers aren't aware or willing to report such issues while a job is under way.
In the case of Lake County, Carr said permittees are informed both orally and in writing of the need to do a predemolition asbestos survey.
“When you're tearing down an old structure, you have to be sensitive to asbestos,” he said.
Carr asked that the community report such “rip and runs” to local authorities, adding, “I think it's important for all employers to carefully adhere to workplace safety laws.”
The terms of Nelson’s plea include three years’ probation, which require him to serve 60 days in the county jail. Nelson said he is eligible to serve that time not in jail but in home confinement through an electronic monitoring program.
In addition, he must complete 340 hours of community service, pay a $5,000 fine and a nondeductible sum of $20,000 to the Lakeside Health Clinic of Lake County, a comprehensive care clinic for the uninsured and underinsured.
The latter sum will be used for health screenings for potential victims in the case as well as to fill various urgent financial needs at the clinic that would allow it to further and better serve low-income residents of Lake County.
Nelson said he was happy that the fines are going to help the clinic.
Nelson was previously sentenced in Santa Clara County on one felony count of workers’ compensation insurance premium fraud on June 9, 2011. He said that felony charge was expunged from his record on Thursday.
“With my personal donation to four charities from the Hoberg's Cobb Mountain Concert Series in 2014 and other donations in the past, we are glad they will make a difference in the Lake County community,” Nelson said in a written statement. “I look forward to further assist Lake County charities that need financial assistance with special programs through my efforts.”
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