Verdicts / Settlements - Plaintiffs

Spectrum Community Association v. Bristol House Partnership, et al.

Background

Spectrum is a 200-unit, four-story complex condominium complex and in a redevelopment zone.

Bristol House began construction on the Spectrum project in 1987. Mercantile Builders acted as the original general contractor.

Sources said that in 1987, when the project was in the framing stage, a fire destroyed the project and that complete reconstruction began in 1989.

The sources continued that by July 1990, the project was nearly complete but construction stopped as a result of the insolvency of the construction lender.

In October 1990, sources said the construction lender filed a notice of default and elected to sell the project based upon the unpaid loans. Thereafter, sources said Bristol House filed for bankruptcy. According to sources, the project sat dormant between 1991 and 1993.

Sources said the parties dispute the role of Goldrich & Kest in the lawsuit. Sources said plaintiffs argued that

in 1993, Active Mortgage, a subsidiary of Gokirich and Kest, issued a loan to~ Bristol House to complete the project.

Sources said the plaintiffs further argued that Active Mortgage foreclosed on the property in July 1994 and that when Active Mortgage foreclosed, it assigned its interests to Santa Ana Spectrum LP and Santa Ana Corp. Sources said that the plaintiffs maintained that Goidrich & Kest is the parent company of Santa Ana Corp. and: Santa Ana LP and that Goldrich & Kest disputed the plaintiffs * argument.

Sources said the court consolidated the association * s construction defect and the individual bodily injury claims for discovery and trial. The sources added that a series of case management orders were issued to govern discovery of the property damage and personal injury claims.

The trial court sustained Reyes * and Bristol House * s motion for summary adjudication as to many of the defect categories alleged by the association. Sources said the association is appealing the trial court * s ruling on the summary adjudication in favor of Reyes and Bristol House.

Plaintiffs

The association and more than 500 condo dwellers who filed separate bodily injury complaints.

Defendants

Named defendants in the suit include Bristol House Partnership, Urban Ventures, Bluestar Realty Ventures, Santa Ana Spectrum L.P., Santa Ana Spectrum Corp., C.H. Construction Co. Inc., Prestige Homes Inc., Goldrich & Kest Industries, Mercantile Builders Inc. and G&K Management Co. and several contractors.

Claim

Sources said the association claimed that the developers and subcontractors of the condominium complex negligently built and repaired the Spectrum condos. Sources said the association claimed that the project suffered from water and mold damage caused by leaking roofs, windows, balconies, plumbing, defective tubs, fire sprinkler system and drains.

According to sources, more than 500 occupants of the condominiums filed more than 100 separate personal injury suits against various defendants, alleging allergic-type reactions to mold such as upper respiratory conditions and asthma. Sources said that of those claims, more than half were asserted on behalf of minor children.

Defense

Goldrich & Kest maintained that it was not a developer and, therefore, not liable for the original construction defects.

Sources said Bristol House argued that its president, Michael Reyes, knew of the construction problems and instructed his general contractor to repair all damage that was evident in 1991-1992

Bristol House also argued that the association's claims were time-barred by the three-year statute of limitations.

Settlement

Sources said that more than $6.3 million has been paid to the Spectrum Community Association and more than $2.1 million has been paid to the bodily injury plaintiffs.

Sources said the settlement payments were made over time. Sources said that among the settlement payments were: A&L Construction, $85,000; A.E. Allen d/b/a Allen Construction, $10,000; Active Mortgage Corp., $1 million; Alpha Windows, $2,500; Anthony Wholesale Electric Inc., $10,000; Atlas Pools, $20,000; Bowers Tractor Service Inc., $5,000; Cabinetland Inc., $20,000; Calcon, $1,000; Cell-Crete Corp., $15,000; Central Sprinkler Co., $30,000; Century Windows Inc., $95,000; Certified Tile, $7,000; Circulating Air Inc., $7,000; D&A Coatings, $30,000; Esso Wholesale, $1,000; Farmers Insurance Co., $75,000; First Fire Systems Inc., $35,000; Five Star, $7,500; Goldrich & Kest Management, $1.5 million; Gaines Electric Supply, $10,000; Gold Coast Enterprises, $20,000; Grand Pacific Landscape, $15,000; Hessco Industries Inc., $195,000; Hollman Inc., $2,000; Insulcrete, $3,528; Interstate Wallboard & Stucco of California, $250,000; J.B. Baker Co. Inc. $75,000 for construction defect claims and $25,000 for bodily injury claims; K&S Plumbing Inc., $25,000; Leedo Cabinetry, $75,000; Lite Center, $5,000; Manley/Hanleys, $5,000; Marathon Triad, $25,000; Matlin, $130,000; McDuff Daniels, $10,000; Millar Elevator Service Co., $15,000; NRC & So. Cal. Roofing Co., $375,000; Orco Block Inc., $2,000; Pacific Trend Co. Inc., $121,000; Pacific Sheet Metal, $350,000; Prestige Homes Inc., $1,200,000; Progressive Designed Plumbing, $325,000; Reliable Painting, $10,000; Santa Ana/ Prestige Homes, $1,836,000; Southbay Concrete, $1,000; Steel Tech, $1,000; Twining Lab, $5,000; U.S. Intec, $10,000; Ultrasonic, $1,000; United Fire, $20,000; and Weathermasters Waterproofing Inc., $187,500.

Later, sources said that a group of Goldrich & Kest defendants — including C.H. Construction Co., Prestige Homes Inc., Active Mortgage Corp, G&K Management Co. Inc., Goldrich & Kest Industries, Santa Ana Spectrum Corp and Santa Ana Spectrum L.P.— paid an additional $400,000 to settle the claims.