Facts

The Indigo Community Association served a Third Amended Complaint seeking compensatory damages alleging violation of Residential Building Standards as set forth in California Civil Code section 895 et seq.

The Indigo Community Association discovered that the development and construction of The Indigo Community, including the common areas, undertaken by Defendants, was either never completed or was improperly and defectively performed. The Indigo Community was constructed in violation of the residential building standards set forth in California Civil Code sections 896 and 897.

The construction defects and damages include, but are not limited to load bearing elevated concrete slab contained significant vertical displacement, defective waterproofing and storm drainage system, incomplete, and non-reforming installation of planter waterproofing, degraded traffic coating on the driveway, the deck coating in the unit balconies is reverse sloped causing water to pond and contributing to water intrusion, portions of the roof and roof platforms lack the required slope for drainage resulting in ponding and stains, defective interface of the roofing system and scuppers, incorrect and incomplete stucco assembly, the paint finish on the exterior metal work is incomplete and incorrect leaving certain metal components unprotected from the marine environment, and resulting in corrosion and decay of building components.

These building standard violations existed at the time that the WL Indigo Associates created the Indigo Community Association, recorded the condominium map, filed their final subdivision reports, created and recorded the operative CC&Rs, and created and filed the articles of incorporation and by-laws of The Association.

As a direct and proximate result of the building standard violations, The Indigo Community Association had sustained damages, including the reasonable value of repairing any violation of the building standards, the reasonable cost of repairing any damages caused by the repair efforts, and the reasonable cost of repairing and rectifying any damages resulting from the failure to meet the standards.

Result

The Indigo Community Association shall receive as payment the total sum of $4,176,596 ($1 million funded by the funds withheld in an escrow account of the Trustee of WL Homes, LLC; $3,176,596 to be paid by Zurich North America Insurance Company).

Other Information

FILING DATE: May 20, 2010.