Developer pays $5.5 million
May 15, 1998
By Antonia Hannon Ehlers
More than $5.5 million has been awarded to the Edgewater Isle North Homeowners Association as restitution for construction defects.
The association challenged and won a lawsuit against Southern California developers Western Pacific Development, formerly known as the Anden Group, and against the O'Brien Group, previously known as O'Brien & Hicks.
The Edgewater Isle Homeowners Association filed the lawsuit because of damages caused by construction defects, which included roof and deck leaks, structural and framing deficiencies, problems with bay mud soil settlement and plumbing; deterioration of interior drywall; and engineering and electrical code violations.
"These construction defects were not simply nuisances to homeowners, they compromised the safety of everyone residing in the structures," said attorney Thomas Miller who represented the association and specializes in construction defect law.
"Because of these structural problems, in the event of an earthquake, the units could be subject to collapse, which would put the homeowners in jeopardy," Miller added. "This settlement represents an end to an ordeal and a beginning for the homeowners, who will now begin the process of rebuilding their homes."
The sum of $5.57 million will be paid to the Edgewater Isle North Homeowners Association and placed in a trust account to repair all damages. Of the $5.57 million, only $3.7 million will be paid by Western, Pacific and the O'Brien Group, according to Miller, with the rest of the money coming from 17 subcontractors who worked on the original construction.
Miller expects the money to be in the account in 30 to 60 days, but noted that it could take up to six months to select the right contractor for reconstruction. The attorney does not expect it to be necessary for most homeowners to move out during reconstruction months, except for a few people who live in a building damaged from too much soil settlement.
The lawsuit, which was scheduled to go to trial May 26, had dragged on for three and a half years with no offers from the developers.
However, after Miller agreed to represent homeowners in the 225-unit residential complex the case was wrapped up in eight months.
"For more than three and a half years, residents were subjected to an unsafe environment and the time consuming task of dealing with an array of problems on a daily basis," said Kerrilyn Cane, Edgewater Isle North Homeowners Association treasurer.
"Only after hiring Tom, who has a tremendous amount of experience working on construction defect cases, did all of the excuses and stagnation by the developer and our former counsel get resolved — and we were finally able to start the process of repair," she added.
According to Miller, the Anden Group declared bankruptcy and changed its name to Western Pacific Development some time ago.
"But consumers should not worry if builders go bankrupt, because (builders) have insurance," he was quick to point out. "In fact, insurance companies fund 95 percent of these cases."
Attorneys for the developers, western Pacific and the O'Brien Group, were unavailable to talk about the lawsuit despite numerous calls requesting comment.