Facts

Plaintiff Treo@Kettner (Treo) is a 328-unit high-rise condominium complex located in downtown San Diego. On Feb. 7, 2007, the association filed suit against the developer Intergulf Development Corporation (Intergulf) and others for construction defects. In April 2011, Intergulf and its excess wrap insurer Insurance Company of the State of Pennsylvania (ISOP) settled with Treo for a combined $22,207,958. ISOP and Intergulf received an assignment of Treo's rights against all non-settling parties, including defendants Ecco Heating Products, Ltd. and Ecco Manufacturing (Ecco). Intergulf assigned its rights to ISOP for trial.

PLAINTIFF'S CONTENTIONS:
ISOP contended that Ecco's in-slab clothes dryer vent duct system was defectively designed for that use.

DEFENDANTS' CONTENTIONS:
Ecco contended that its system was properly designed, tested, engineered, and approved for use by the City of San Diego.

Settlement Discussions

No demand by ISOP. Defendant offered $125,000 to ISOP and $25,000 to Intergulf per C.C.P. §998.

Damages

$2,211,480 in costs of replacement. ISOP as assignee of Treo claimed it was necessary to abandon the Ecco duct system in place and install a new round duct system in the Ecco-equipped units at the project.

Result

Directed verdict for defendants Ecco. The trial court instructed the jury that costs to repair any design defect in the Ecco duct system that had not yet caused property damage to any Treo unit were not recoverable by ISOP. As ISOP did not introduce evidence of any costs to repair property damage to any Treo unit, a directed verdict against it was entered before closing arguments.

Other Information

Defendant filed a post-trial motion for costs and expert fees per CCP 998 in the amount of $125,047. ISOP filed a motion to strike or tax costs. ISOP appealed the directed verdict on April 27, 2012. The parties settled for a dismissal of the appeal in exchange for a waiver of costs on April 30, 2012.