Confidential
Settlement – $3,700,000Judge
Court
L.A. Superior Central
Attorneys
Plaintiff
Defendant
Kenneth J. Crede
(Law Offices of Kenneth J. Crede)
Michael T. Montgomery
(McCluskey & Montgomery LLP)
Robert M. Henstridge
(Small, Henstridge, Cabodi & Pyles LLP)
Carol R. Brophy
(Steptoe LLP)
Experts
Plaintiff
Jerry L. Pollak
(technical)
Sal Tabrizi
(technical)
Duane Simmons
(technical)
David Lemich
(technical)
John Cormack
(technical)
Martin Selko
(technical)
Gus Gutierrez
(technical)
Facts
Plaintiff Homeowner's Association, filed an action against the defendant developers, for construction defect claims arising out of a 93-unit condominium project. Plaintiff also sought a writ of attachment against the defendant developers for failure to pay monthly condominium assessments. The complaint was subsequently amended to include a number of individual plaintiffs. Plaintiffs alleged that the project had problems with water intrusion, including leaking roofs and a complete lack of waterproofing. This resulted in many of the units having mold and mildew problems which could not be cleaned through regular maintenance. Plaintiffs claimed developer defendants and the general contractor eliminated a key ventilation duct which allowed moisture to build up in the units. In addition to these problems, the residents complained that there was excessive noise transmission between units such that when a fourth floor resident flushed the toilet, a first floor resident would hear it. Plaintiffs' monthly assessment claim and all other non-construction defect claims were settled for $10,000, and defendants agreed that the individual homeowners would retain control of the Board of Directors for three years following the settlement. This three-year period was designed to give the Association enough time to prosecute its defect lawsuit, and to repair the project after completion. The plaintiffs brought this action against the defendant based on strict liability, breach of warranty and negligence theories of recovery.
Settlement Discussions
The defendant developer had formally offered only $200,000 and no offers were received from the general contractor. Small settlements of $5,500 and $12,500 were reached earlier with the fire control system subcontractor and the structural engineer, respectively. Ultimately, the developer defendants contributed $1,250,000 toward the $3.7 million settlement. The specific amounts paid by the general contractor and remaining subcontractors was kept confidential.
Damages
Plaintiffs claimed construction damages in excess of $4 million. Defendants claimed damages were approximately $2 million.
Other Information
The settlement was reached one year and seven months after the case was filed. THE RESULT: An early trial date was assigned by Judge Crispo, and the parties agreed to mediate the case with Ross Hart of the American Arbitration Association. Over the course of several months, at least five to seven separate mediation sessions took place. On Sept. 10, 1997, a global settlement of $3.7 million was reached with all defendants and cross-defendants. Of this amount, $750,000 was allocated toward settlement of the claims of the individual plaintiffs.
For reprint rights or to order a copy of your photo:
Email
jeremy@reprintpros.com
for prices.
Direct dial: 949-702-5390