Judge Indicates CRA Is Liable for Damages to Condo Complex

A judge has indicated that he intends to find the Los Angeles City Community Redevelopment Agency entirely liable for damage to 84 condominiums in the Drake Terrace section of the agency’s sinking Monterey Hills housing complex.

In courtroom remarks last week, Los Angeles Superior Court Judge Philip F. Jones said the city agency will have to reimburse tenants for all the damage to their condominiums, which are tilting and cracking on improperly compacted landfill.

“I view it as a matter of absolute liability,” Jones said. “And if it happened, even if it was totally unforeseeable, it is chargeable to the agency.”

The judge is hearing a multimillion-dollar lawsuit filed by the Drake Terrace Homeowners Assn. against the redevelopment agency.

Jones made the comments to explain why he was denying evidence that could implicate a developer in the suit. He said the agency is responsible because it coordinated the public improvement project.

Jury Instructions

If Jones’ instructions to jurors at the end of the trial next week reflect those opinions, jurors will not have latitude to decide the extent to which others involved in the project, such as developers and contractors, must share liability. Jurors would be asked to decide only the extent of damage to the condominiums.

Drake Terrace is one of six developments in the complex to suffer damage due to soil settlement. It is on as much as 120 feet of landfill.

The inverse condemnation lawsuit is the first of many suits in the case to go to trial. Homeowners associations and individuals who have been unable to sell their homes have filed numerous suits against the agency and others involved in the project.

Attorneys for the 84 Drake Terrace homeowners are seeking almost $10 million in damages. An appraiser hired by the plaintiffs testified that the homes, worth $9.6 million when they were built in the late 1970s, have no market value today.

But a structural engineer hired by the city testified Tuesday that damage to the Drake Terrace complex could be repaired for less than $300,000.

Envisioned in the late 1960s as a haven of affordable housing for mostly first-time homeowners who wanted quick access to downtown, Monterey Hills has instead become a legal morass for the CRA, developers and investors in the project.

Many of the 1,600 condominiums and townhouses in the complex northeast of downtown Los Angeles are built on landfill that is compressing so severely in spots that city inspectors last October ordered residents in one 36-unit building to vacate for fear the units would collapse. The site was created by lopping off the top of three hillsides and using the earth to fill canyons in between.