Confidential
Settlement – $827,500Judge
Court
L.A. Superior Central
Attorneys
Plaintiff
Defendant
John W. Streeter
(John W Streeter ALC)
Experts
Plaintiff
Robert M. Ellis
(technical)
Jack Charney
(technical)
Clayton McKeown
(technical)
Stanley H. Espenship
(technical)
Julius Kummerman
(technical)
Defendant
Peter Cruz
(technical)
Kenneth W. Drake
(Kenneth W. Drake & Associates Inc.)
(technical)
Daniel J. McNicoll
(technical)
Robert F. Schwartz
(technical)
Ernest R. Orchard
(technical)
Facts
In 1987-88, Defendants completed a housing project consisting of 18 luxury town homes, comprising Phase II of the exclusive residential development surrounding the country club in the Santa Monica mountains. Defendant developers formed a limited partnership to develop the project. Disputes developed between the partners during construction concerning control of the partnership, finances, and progress/quality of the work of the general partner who had the responsibility for construction. Allocations of voting shares and control over the construction were changed in response to construction problems, cost overruns, and defects (leaks) in the completed homes. The limited partner assumed further control over the construction at this point. Defendant general partner and owner of the general contracting company alleged that he was "ousted" from the partnership by this process and did not receive profits as per the limited partnership agreement. The homes were finished individually, before the entire project was completed in 1988 and occupancy established in 1989. The purchase prices ranged from $700,000 to $1,000,000. Occupied units experienced leaks through roofs, windows, doors, and decks during the first heavy rains. Defendant general contractor made ineffective repairs to the homes before this suit was filed. Due to the mountaintop location of the homes, the intensity and direction of wind-driven rain was higher than had been anticipated by the developers.
Settlement Discussions
Plaintiffs contend their demand was $2,000,000 and Defendants offered a package of $550,000.
Damages
(1) Balcony decks were improperly flashed and sealed, causing water leaks into the units (Plaintiff HOA rebuilt several decks); (2) wood casement windows: destructive tests revealed sizecraft window flashing was improperly installed; a heavy-duty weather-rated window should have been selected, rather than standard-quality wood windows (windows contained manufacturing defects; however, the window manufacturer was defunct and was not a party) (Plaintiffs repaired or replaced numerous windows); (3) roofer deviated from the roof specifications and installed an inferior roof using plastic drains, instead of cast-metal drains, as specified; the builder applied a reflective coating which was incompatible with the composition roof (the roofing subcontractor was bankrupt, and so the developer could not obtain contribution); numerous roof leaks necessitated a total re roof by Plaintiff HOA; (4) north-facing French doors were improperly installed and lacking astragals and interlocked thresholds (all French doors were replaced by Plaintiff HOA). Damages claimed by Plaintiffs were estimated to be: $432,450 prior repair costs; $600,000 future repair costs (including full replacement of the windows). Defendants' estimate was $300,000 total costs.
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