IEQ Review
Jury Awards $8.6 Million to Calif. Condo Owners For Defects,
Personal Injuries

A California jury on Sept. 8 awarded $8,571,028 in damages for construction defects and personal injuries claimed by residents of a four-story condominium complex in Santa Ana, Calif.

IEQ Review
Jury Awards $8.6 Million to Calif. Condo Owners For Defects,
Personal Injuries

by Harris Martin Publishing 
  
SANTA ANA, Calif. - A California jury on Sept. 8 awarded $8,571,028 in damages for construction defects and personal injuries claimed by residents of a four-story condominium complex in Santa Ana, Calif. Spectrum Community Association v. Bristol House Partnership, et al., No. 00CC 07398 (Calif. Super. Ct., Orange Cty.).

Of that amount, $6,392,028 was awarded to the Spectrum Community Association for property damage claims and another $2,179,000 was awarded for bodily injury claims by 505 individual tenants.

The case involved claims by The Spectrum Community Association and various tenants in a four-story, 200-unit complex in Santa Ana, Calif. Defendants included numerous contractors, including the original developer, Bristol House Partnership, a subsequent developer, Goldrich & Kest Industries, and numerous other
contractors and subcontractors, including Bluestar Realty Ventures; Santa Ana Spectrum L.P.; Santa Ana Spectrum Corp.; C.H. Construction Co. Inc.; Prestige Homes Inc.; Mercantile Builders Inc.; and G&K Management Co.

Plaintiffs alleged that the complex had mold and extensive water damage from leaking roofs, windows and balconies, faulty plumbing, defective bathtubs, fire sprinkler systems and drains.

Bristol House began construction in 1987, with Mercantile Builders as the original general contractor. On June 7, 1987, when the project was nearly complete, the project was completely destroyed by fire. Reconstruction began in 1989, but stopped in July 1990, when nearly complete, because of the insolvency of the construction lender. The project was dormant from 1991 to 1993 until a Goldrich &
Kest subsidiary loaned$5.4 million to Bristol House to complete the project. Goldrich & Kest foreclosed on the property in July 1994, completed the project
and initiated sales of individual condominium units.

The personal injury plaintiffs, half of whom were children, filed 119 separate personal injury suits that were consolidated for discovery and trial. Those plaintiffs alleged allergic reactions to mold, including respiratory problems and aggravation of asthma conditions.

Trial was held before Orange County Superior Court Judge Stephen J. Sunvold.

Goldrich & Kest contended that it was not a developer and thus not liable for the original construction defects.

Bristol House argued that its president, Michael Reyes, who incorporated the spectrum Community Association and was its original board president, knew of the construction problems, and had instructed the general contractor, which Reyes owned, to repair all damage evident in 1991 and 1992.

Bristol House also argued that the Spectrum Community Association's claims were barred by the three-year statute of limitations, because Reyes' knowledge of the defects in 1991 and 1992 triggered the statute of limitations for Bristol House to sue its subcontractors and the cause of action accrued to Bristol House, and not to the association, which wasn't formed by Reyes until 1993.

The trial court granted summary adjudication to Reyes as to many of the defect categories alleged by the association, and the association is appealing that ruling. At the request of the Plaintiffs, Reyes' motion for summary judgment wasn't heard until the Spectrum Community Association was able to negotiate settlements with Goldrich & Kest and approximately 40 subcontractors.

Alexander Robertson IV & Kevin Davis of Robertson & Vick in Calabasas, Calif., represent the Spectrum Community Association and 505 Bodily Injury Plaintiffs. Chet Puchalski of Fiore Racobs & Powers is co-counsel for the Spectrum Community Association.

Defense counsel includes Bruno Wolfenzon of the Wolfenzon Law Group in Las Vegas and San Diego, for Bristol House; Elyn C. Holt of Palumbo, Bergstrom in Irvine, Calif., and Jerry Stein of Levin & Stein in Los Angeles, for Goldrich & Kest.