Melchiori Wins $5.8 Million in Chapala One Fraud Case

A Santa Barbara jury awarded Mark Melchiori of Melchiori Construction $5.8 million in the fraud case embroiling Chapala One, the condo complex at Chapala and Gutierrez streets that wound up sparking Santa Barbara’s recent battle over building heights. Melchiori said he was ripped off by developer Don Hughes, who got millions of dollars behind on payments after making thousands of last-minute design changes. He testified Hughes kept him working, knowing that he didn’t have the funds to pay for the work.

Hughes countered that Melchiori failed to live up to the terms of his contract by refusing to provide key financial data and by stiffing many subcontractors. He said Melchiori hit him late with staggering bills, the last two invoices totaling more than $4 million. Construction on Chapala One concluded late in 2008 after the recession was well under way. None of the condos have been sold.