Confidential
Settlement – $1,353,700Judge
Court
L.A. Superior Santa Monica
Attorneys
Plaintiff
Alexander T. Robertson IV
(Robertson & Associates LLP)
Defendant
Michael A. Portigal
(Law Offices of Vivian L. Schwartz)
Larry A. Rothstein
(Law Offices Larry A. Rothstein)
Phyl Grace
(Center for Disability Access)
Facts
In 1993, the plaintiffs, husband and wife, purchased a Malibu beachfront house from the defendant seller for $2.5 million. The seller had renovated a pre-existing home on the property in what is commonly referred to as a "California tear-down." The plantiffs claimed the house was represented as "new" construction with state of the art building materials and components, including an electronic automation system designed to control lighting, heat, ventilation and air conditioning, security system, audio visual and other major systems in the house. The seller claimed he never met the plaintiffs and never represented the house as "new" construction. As part of the sale to the plaintiffs, the defendant seller assigned all warranties to the plaintiffs and purchased a standard home warranty plan for their use. Shortly after their purchase, the plaintiffs began to experience severe water instrusion from leaking exterior balconies, the roof and windows as well as a complete malfunction of the electronic automation system. Approximately one year after their purchase, the plaintiffs contacted the defendant seller and demanded he make repairs. The seller, who never occupied the residence or had knowledge of any of the claimed problems, promptly notified all responsible parties (the other defendants) including the contractor, subcontractors and suppliers, and demanded that they make the necessary repairs. During the three years that this case was pending, the plaintiffs claimed that the water intrusion from these leaks caused several strains of toxic fungus to grow on the cellulose insulation material in the walls. During this period, the defendants claimed the plaintiffs refused to allow the seller to make the necessary repairs and failed to take any steps themselves to make the property watertight. The defendants claimed that the plaintiffs removed a tarp that was placed on their balcony, thereby worsening their water intrusion problems. The most toxic fungus detected in the house was stachybotrys. The plaintiffs brought this action against the sellers, the general contractor, the roofer and the electrical, framing, waterproofing and plumbing subcontractors based on construction defects and negligence theories of recovery.
Settlement Discussions
The plaintiffs made settlement demands totalling $1.7 million, including $500,000 from the automation and electrical defendants. The defendants made settlement offers that varied between $500,000 and $900,000.
Damages
The plaintiffs claimed $662,000 in damages for cost of repair, plus damages for loss of use, stigma and personal injury resulting from stachybotrys fungus exposure.
Other Information
The settlement was reached approximately two years after the case was filed. A mediation was held on Feb. 17, 1997 before Justice Campbell M. Lucas, retired, resulting in in the reported settlement. EXPERT TESTIMONY: The plaintiffs' experts recommended that in order to decontaminate the plaintiffs' home, the entire two-story house would have to be "shrink wrapped" in plastic and placed under "negative air containment" in order to avoid the release of these mycotoxins. The plaintiffs' experts recommended the complete removal and replacement of all drywall and contaminated cellose insulation material, effectively tearing the house down to the wood studs, which then must be chemically decontaminated. The defendants' experts estimated the cost of repair at approximately $150,000, and contended that the entire house could be torn down and entirely rebuilt, excluding caissons and pilings, to match its present class of construction for approximately $450,000.
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