Confidential
Settlement – $1,000,000Judge
Court
L.A. Superior Glendale
Attorneys
Plaintiff
Defendant
Facts
The defendant corporate developer contracted with defendant general contractor to build a 35-unit condominium complex in Montrose, California. The construction was completed in July 1989. Soon after construction was completed and the 35 units were sold, the homeowners experienced severe flooding and water intrusion throughout the complex and into the individual units. The plaintiff claimed that despite the developer and general contractor's repair attempts, the problems grew worse. Ultimately, the Association filed suit in May 1995 alleging damages from construction defects under various theories of recovery including strict liability, negligence, breach of warranty and breach of fiduciary duty. The plaintiff contended that the developer and general contractor failed to follow the building plans and specifications and local building codes in the design and construction of the condominium complex. The defendants cross-complained against various subcontractors for breach of express and implied warranties.
Settlement Discussions
The plaintiff's mediation settlement demand was $1.2 million. The defendants responded with an offer of $470,000.
Damages
The plaintiffs claimed damages from severe water intrusion and inadequate drainage including window leaks, roof leaks, flooding through first floor courtyard and walkways into units, warped and deteriorated wood siding and deteriorated elevated balconies, walkways and decks.
Other Information
The settlement was reached through mediation approximately one year and six months after the case was filed. A mediation was held in October 1996 before Ross R. Hart, of AAA, followed by a series of expert meetings and meetings among counsel for the parties. A final mediation session was held on March 5, 1997. A motivation for settlement in March was the prospect of obtaining settlement funds quickly and making repairs before additional rains. To ensure prompt payment of settlement contributions, the parties agreed to pay interest of 10 percent on all outstanding settlement payments to be paid by defendants. Final settlement funds were not collected until October 1997. According to defendants, a dispute arose regarding the interest payments. Finally, defendants paid an additional $8,000 to plaintiff.
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