Facts

Anacapa Ventures, LP, was formed on Dec. 16, 1985, for the purpose of acquiring the Anacapa Isle Apartments, located at 2901 and 3101 Peninsula Avenue in Oxnard, and converting them into condominiums. The apartment complex, originally built in the early 1970s, consisted of two, four-story residential buildings encompassing 120 residential units.

From approximately 1999 through 2001, Anacapa Ventures renovated the apartment buildings and converted the project to condominium units and related common areas. Anacapa Ventures, Anacapa Ventures' general contractor, Western Builders Group Inc., and Western Builders' subcontractors and laborers carried out the project.

The renovation involved a substantial rehabilitation of common area and separate unit interests, including, but not limited to, the installation of new and retrofit windows, doors and sliding glass doors, deck waterproofing, drywall, painting, replacement of deteriorated building materials, mechanical, removal and replacement of all exterior cladding, among other things. Completion of the substantial renovation project ultimately led to the creation of the Channel Island Condominiums Homeowner Association.

In July 2001, Anacapa Ventures sold the first units to the public. During and immediately after the 2005 winter rains, the Channel Islands project began experiencing severe water intrusion and consequential damages.

On Oct. 21, 2005, the HOA filed suit against Anacapa Ventures, Western Builders and Western's subcontractors alleging causes of action for strict liability, negligence, breach of implied warranty, breach of express warranty, negligent misrepresentation and breach of fiduciary duties.

Anacapa Ventures cross-complained against all defendants for indemnity and contribution.

PLAINTIFF'S CONTENTIONS:
The plaintiff contended that Anacapa Ventures was strictly liable for the defects and consequential damage discovered in the residential units and common area. The plaintiff also contended that Anacapa Ventures' individual partners should be held personally liable for the alleged construction defects on an alter ego theory.

DEFENDANT'S CONTENTIONS:
Anacapa Ventures contended that as a condominium converter it was not strictly liable for construction defects. Anacapa Ventures argued that its individual partners were not alter egos of the partnership.

Result

The case was settled for $4,934,500 at mediation before Ross R. Hart, Esq. of Forum Dispute Management.

Other Information

Anacapa Ventures' motion for summary adjudication of the strict liability cause of action was denied. The court denied plaintiff's motion to add Anacapa Ventures' individual partners as defendants.