Jury Awards $8.6 Million to Calif. Condo Owners

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Jury Awards $8.6 Million to Calif. Condo Owners For Defects,

Personal Injuries

by 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 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, 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.

on IV & of on & 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.

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