The owner of Lupin Lodge has pleaded no contest to a misdemeanor charge of trespassing on public land, where prosecutors say she siphoned water from a creek to her drought-affected nudist resort.
According to the Santa Clara County District Attorney’s Office, the Los Gatos-based company and owner Lori Kay Stout, 53, piped water from nearby Hendry’s Creek despite repeated warnings to stop.
Judge Allison Danner sentenced Stout to three years of probation and 100 hours of community service. She also has to pay a $2,500 fine and $9,800 in restitution to the Midpeninsula Regional Open Space District, a public agency that oversees the Hendry’s Creek property.
Lupin Heights, Inc. also pleaded no contest to three misdemeanors: conspiracy, trespassing to impede property right and unlawful diversion of water without alerting the Department of Fish and Wildlife. Judge Danner sentenced the company to three years of court probation with several conditions.
“The victim in this case, a public entity whose purpose is to protect open space for future generations, will receive full restitution for the costs incurred repairing the environmental damage caused by the defendant’s actions,” Denise Raabe, a deputy district attorney, said in a statement. “This appropriate sentence underscores that individuals and businesses cannot simply take what they want from their neighbors without permission or consequence.”
Stout and the company repeatedly claimed innocence in the lead-up to the no contest pleas. In conversations with San Jose Inside, Stout has said that the creek flows through the Lupin Lodge property and that permission from the previous owner gives them “historic rights” to the water.
But Lupin Lodge settled the criminal case after Stout’s husband and lodge co-owner Glyn Stout died in November. He was 77.
In summer 2014, the Stouts asked MidPen if they could place temporary lines to draw water from Hendry’s Creek. The open space district said no. Prosecutors say that didn’t stop the company from repeatedly trespassing between July and November 2014.
Evidence shows that the Stouts and some employees cleared a fire trail, causing environmental damage, and installed several water lines to steal water from the creek for the resort’s water system.
Charges against Glyn Stout and two live-in workers, 50-year-old John Berryessa and 39-year-old Michael Buckland, were dismissed.
“Lupin pled ‘no contest’ to misdemeanor charges but we are quite certain that we did nothing wrong,” Lori Kay Stout said in a statement earlier this week. “I certainly did not trespass.”
In an email with the subject heading “Lupin Lodge — For journalistic impartiality,” Lori Kay Stout shared a letter from a SoCal attorney named James Ciampa, who concluded that the resort does indeed possess water rights to Hendry’s Creek. The attorney wrote that in times of water shortage, riparian owners must decrease water use and share the available water.
MidPen, of course, thought otherwise. Regardless, Lori Kay Stout said, with the criminal case behind her, Lupin Lodge can now move forward.
“Now that we have expeditiously put this case behind without incurring a huge legal expense for a small family business that is needed to go further with this case, we can focus on our upcoming season and move on to the celebration of our 81st anniversary,” she said.
However, legal troubles for Lupin Lodge could be far from finished.
According to court records, the company has a long-running pattern of ignoring the law in other ways. The Division of Labor Standards and Enforcement has fined the company for failing to compensate workers and keep enough safety measures in place. Its restaurant has been repeatedly shut down for violating health standards.
More serious allegations have been filed in civil court. A wrongful death case aims to hold the resort liable for a car accident involving a Lupin Lodge employee who barreled into an oncoming motorcyclist.
Michael Schaupp, 36, died when 47-year-old Lupin Lodge resident Joline Fay Cohen—described in court records by Lupin Lodge residents as a methamphetamine user and reckless driver—hit him with her SUV in late 2013.
Cohen was already sentenced in the felony hit-and-run, but Schaupp’s family filed a lawsuit against her in civil court, claiming Lupin Lodge bears responsibility for the crash because Cohen was driving the Stouts’ car and, as an on-call worker, she was driving around in her capacity as an employee. Lupin Lodge has repeatedly denied the claim, asserting that Cohen was fired right before the crash.
In a separate case, several Lupin Lodge employees claim that the resort has violated a litany of labor laws. The class-action suit filed by former employee Dara McClellan accuses the resort of forcing her and many others to work without a written agreement for less than minimum wage and no overtime.
According to the lawsuit, Lupin Lodge requires its live-in workers to work under a barter system, putting in an unspecified number of hours in exchange for food and lodging. McClellan’s attorney Amy Carlson compared the conditions to indentured servitude.
But the terms of that oral agreement would constantly change, according to the plaintiff. Meanwhile, housing provided in compensation was, in many cases, legally uninhabitable. Trailers and cabins were rife with rats, mice, faulty plumbing and electrical wiring and a lack of heat.
“When I first moved in, my foot crunched on rat feces on the floor, which I had to clean,” says McLellan, a single mother who was recently evicted from the resort.
Several current and former Lupin employees have described coming to the resort because they had nowhere else to go. Once they agree to work there in exchange for a place to stay and food to eat, they tell San Jose Inside, the conditions change. The hours increase, food gets denied and housing falls into disrepair.
One man was forced to live in a converted toolshed, county records show. According to McClellan and several other current and former live-in workers, they were constantly threatened with eviction if they complained or failed to comply with demands to work beyond the terms of their agreement.
In 2011, McClellan says, Lupin Lodge told its workers that they would no longer receive wages because they were independent contractors. But the company continued to control their scheduling, housing and meals, according to the lawsuit.
The lack of cash forced several employees to sign up for public assistance or rely on meals from the Second Harvest Food Bank. Several more said that, because they worked for so many years off the grid with no pay and no written record of employment, they became homeless after leaving Lupin Lodge.
Robert Fullerton, a handyman who says he regularly worked up to 60 hours a week for about $50 in cash, blames dangerous working conditions for an explosion that left him covered in second- and third-degree burns when he went to fix a gas leak in 2010. The U.S. Department of Labor, Occupational Safety and Health Administration (OSHA) fined Lupin $12,000 for the incident.
“My lips were like sausages,” he says.“I couldn’t talk for months because of the burns, which went inside my throat. I still have problems with my larynx.”
When he got back to Lupin after a week in a coma at Valley Med, he says, Lupin Lodge management told him to tell OSHA that he was trained to fix the gas leak.
“But there were never any precautions,” he says. “There were really no safety meetings, no equipment, no training.”
McClellan’s lawsuit names Lori Kay Stout and the company’s board members Bradley Chibos, Charles Perkins (no relation to the Los Gatos attorney by the same name) and Michael Fjelstad as defendants.