Families Will Move Out, Agree Not to Sue : Owners Settle Fight Over Collapsing Condos

A dispute between purchasers of Agoura Hills condominiums that have begun collapsing and the project’s builder has been settled to enable all but one of the families who live there to move out.

Eighteen of the 19 owners at Westlake Villas have agreed to sell their $100,000 units back to developer Hilbert Chu in exchange for reimbursement for down payments, mortgage payments, upgrading costs and taxes, homeowners said Tuesday.

Each family also will receive $695 for each month they have lived in the development to cover what the increased value of the units would have been if they had been properly built. Another $1,000 will be paid for relocation expenses.

Residents Won’t Sue

As part of the deal, the town house dwellers have agreed not to sue Chu or construction companies involved in the problem-plagued $1.4-million project.

Besides exterior walls that are sinking because of shallow foundations, the two-story structures have leaky roofs, cracked walls and slabs, and thinly applied stucco and plaster.

The settlement was approved late Monday night by six families who hired the law firm of flamboyant attorney Melvin Belli to press a $31.5-million claim against Chu and contractors involved in the construction three years ago of the 27-unit complex. That action will be dropped.

One family is holding out for additional payments, Westlake Villas residents said. The family could not be reached for comment Tuesday.

Twelve families previously had approved the buy-back plan, negotiated in January by a retired San Diego judge who is refereeing an attempt at an out-of-court settlement involving a multimillion-dollar lawsuit filed by Chu two years ago against his contractors.

Finding New Residence

“I hate myself for giving it,” said one of the six dissidents, Diana Shulman, who will receive $38,000. “I’m not going to be able to find another place in Agoura with monthly payments I can afford with that as a down payment. But how can you fight the big boys?”

Arnold Gross, the attorney who has handled the case, acknowledged that the settlement was “grudgingly accepted” by the six families. He said they have asked him to file suit against Los Angeles County, which is not covered by the settlement’s no-lawsuit clause.

County officials have accepted partial blame for shoddy construction at the Colodny Drive complex. A county building inspector was disciplined after officials determined late last year that he contributed to “a complete breakdown of safeguards” that allowed the town house’s builders to take “deliberate” construction shortcuts.

Last month, the state Department of Consumer Affairs moved to revoke the contractor’s licenses of three builders involved with the construction at Westlake Villas. That action is pending.

Same Settlement

Gross conceded that his clients are receiving no more than the other 12 families are getting in the buy-back plan negotiated by retired San Diego Superior Court Judge William Yale.

Yale, who has informed homeowners that they should be able to move out within 45 days, could not be reached for comment Tuesday. But Gross and several homeowners said Yale has to work out some details of the plan before the reimbursements are made.

Chu, contacted at his San Diego home, said the plan is “one hurdle down” for him. “My objective all along has been to do what is best for the homeowners,” he said.

Money from insurance companies involved in the dispute will pay the residents’ reimbursements, Chu said.

After the residents move, the units will be repaired and resold or used for rentals, he said.