Confidential
Settlement – $3,550,000Judge
Court
L.A. Superior Torrance
Attorneys
Plaintiff
Defendant
Experts
Plaintiff
John Schuricht
(technical)
Don Hughes
(technical)
John M. Springman
(technical)
Victor A. Robinette
(technical)
Larry Fanning
(technical)
John J. Nicholas
(technical)
Doug Matthews
(technical)
Paul Kushner
(technical)
Jack Eagen
(technical)
A. James Montgomery
(technical)
Defendant
Michael Clements
(technical)
Lionel Vincent
(technical)
Byron V. Citron
(technical)
James Stevens
(technical)
Tom Howser
(technical)
Douglas Edwards
(technical)
Clayton McKeown
(technical)
Russell Harter
(technical)
Raymond E. Steinberg
(technical)
Joseph Millman
(technical)
Randall Ismay
(technical)
Bruce Patton
(technical)
Facts
In 1988, the defendants and cross-defendants built a 49-unit townhouse development overlooking the ocean in Rancho Palos Verdes. The plaintiff alleged that the development was marketed as "luxury" construction. The average selling price of a unit was over $450,000. The plaintiff homeowners association also alleged that numerous problems were discovered, including leaking roofs chronically, water penetration at balconies and through subgrade walls, interior and exterior cracking caused by the action of expansive underlying soils, leaning retaining walls, and electrical problems. During destructive testing the plaintiff discovered that the required fire blocking had not been installed between units and that some shear walls had been inadequately constructed. Excavation revealed defective waterproofing of subgrade wall surfaces and the absence of drainage behind retaining walls. The plaintiff brought this action against the defendants based on negligence, breach of contract and strict liability theories of recovery. The defendants filed a cross-complaint for indemnity against the subcontractors and design professionals.
Settlement Discussions
There were no settlement discussions before the mediation. At the mediation, the plaintiff demanded $5,400,000 and the defendants and cross-defendants offered $1,500,000. Mediation sessions took place on several days in November-December 1995, after which the parties agreed to settle around the defendant construction manager, for $3,100,000. The defendant construction manager subsequently agreed to pay $450,000 and stipulated to a judgment for a further $2,450,000 with a covenant not to execute and an assignment of rights against its non-defending insurer.
Damages
The plaintiff's original cost-of-repair estimate was $9,400,00 including $2,800,000 in relocation costs. The defendants' initial cost of repair estimate was $1,600,000.
Result
Mediation sessions were held on November 17, and December 6, 7, 14 and 21, 1995, before Ross Hart, Esq. of American Arbitration Association, resulting in the settlement.
Other Information
The settlement was reached approximately three years and six months after the case was filed.
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