Suit Claims Cover-Up of Defects in New Homes

A construction supervisor on large Riverside County subdivisions has filed suit against his former employer, Kaufman and Broad Inc., alleging that company officials ordered him to cover up structural defects and lie to home buyers when they complained.

John W. Yturri Jr., 28, contends that he was wrongfully forced to quit his job after five years with the giant Los Angeles-based home builder because he would no longer take part in what he alleges were the company’s efforts to hide the structural problems in the tract homes.

The suit comes in the aftermath of four other lawsuits by 46 disgruntled Riverside and Corona homeowners who allege, among other things, that building inspectors were taking bribes to approve the houses, which owners now claim are defective and dangerous.

Yturri’s suit, filed earlier this month in Riverside County Superior Court, alleges that Kaufman and Broad construction crews worked on some houses without city-approved plans or permits in 1983. He said these buildings did meet the uniform building and safety codes.

Allegations Denied

A top Kaufman and Broad official denied all of the allegations, but acknowledged that 50 out of the several thousand homes built by the company in Riverside County had a structural problem. “Any business has some problems,” said Kaufman and Broad general counsel Alan Markizon. “We are struggling mightily to make it right by homeowners.”

Kaufman and Broad Inc. is one of the largest home builders in the nation, reporting housing revenues of $671.9 million in 1987. The company builds 3,000 to 4,000 houses a year in California, officials said.

The split-level, Tudor-style houses in question were designed and built by Kaufman and Broad of Southern California, a subsidiary of the parent company. They sold for about $95,000 in 1983 to mostly young middle-class couples seeking affordable housing.

The two-story models had an L-shaped overhang that enlarged the master bedroom and bath by extending the floor out over the yard. These corner overhangs are the primary points of contention. The homeowners claim that the overhangs sagged dangerously, walls and ceilings were inadequately supported, pipes leaked and bathtubs wouldn’t drain, among other things.

Markizon said homes now being built do not contain the design problem, which had caused floors to settle about two inches. And he said the company offered to fix the defective homes but that the owners who filed suit would not let crews back in to make repairs.

The homeowners say they decided to refuse further assistance from Kaufman and Broad after the company made a number of unsuccessful efforts to repair the problems.

Yturri worked as an assistant construction supervisor. The structural defects alleged in his complaint are the same as those set forth in the homeowner suits. Yturri said his bosses pushed hard to meet the company’s fast-paced building schedules, ignoring his warnings that the overhangs were unsafe.

Gift-Giving Alleged

Two of the owner suits allege that building inspectors for the cities of Riverside and Corona were given building materials, guns, liquor and other gifts by the builder “as bribes . . . in exchange for favors and considerations” while the buildings were under construction and during the final inspection approvals.

Both cities have policies against inspectors taking such gifts, but city officials acknowledge that inspectors sometimes are offered leftover building materials, liquor and boxes of candy and cookies. They said they have seen no evidence that such gifts influenced inspection.

Kaufman and Broad officials denied the bribery allegations.

“We absolutely deny it, there is no evidence which would lead one to that conclusion,” Markizon said. According to Markizon, Yturri had been on a paid leave for “personal problems” until February, then quit when he was offered a new job assignment. “We are baffled by his wrongful-discharge suit,” Markizon said.

Other homeowner suits are pending against Kaufman and Broad’s Northern California subsidiary. These complaints, filed by more than 100 homeowners in Contra Costa and Marin counties, allege construction defects, cracking foundations, improper grading and compaction problems.

In a Santa Clara County criminal case, a Kaufman and Broad supervisor and two Milpitas city building inspectors were convicted of falsifying inspection reports in 1981, court records show. One inspector admitted that he received gifts in exchange for signing off final inspection reports before work was complete, according to court documents. The company was fined more than $200,000, and two of the individuals were jailed.

Attorneys for the Riverside County homeowners and Yturri cite the Milpitas case as an example of company actions that they say are ongoing. In the current cases, the lawyers point to sworn statements by Dean C. Johnson, a retired Riverside city building inspector who acknowledged that he had taken gifts from Kaufman and Broad on the jobs he inspected.

Called Isolated Incident

Kaufman and Broad spokesman Markizon vigorously protested the mention of the Milpitas case, saying that it was an isolated incident. “That was . . . one guy going haywire in Northern California,” Markizon said, adding, “It happened a long time ago.”

Markizon said, “There is testimony from Dean Johnson (in the suits) that over a long period of time he received excess building materials from our sites. . . . There is no testimony that Johnson did . . . anything for K and B because he had received these building materials.”

In his deposition, Johnson said, “Kaufman and Broad was very generous in offering me gifts,” including liquor, plywood sheathing, framing lumber, window frames and a concrete pad for his recreational vehicle. The former inspector said that not every house in the tracts was inspected and that he had signed off on final inspections before the homes had been completed to expedite the company’s fast-paced building schedules.

Johnson was not available for comment, but John M. Porter, the attorney who represented him during the depositions, said:

“There’s no evidence whatever that the materials he was given in any way affected his judgment. In this case an inspector was simply trying to help the developer meet quarterly goals. . . . He was generally satisfied with their buildings.”

In a sworn statement to Riverside County district attorney’s investigators, Johnson said much the same thing after being granted immunity from prosecution. Deputy Dist. Atty. Randy Tagami said, “We were after a bigger target.” However, the investigation didn’t uncover enough evidence to make a case, he said. He would not name the larger target.

Manipulation Alleged

While Yturri was still working for Kaufman and Broad, he was questioned by the homeowners’ attorneys. Yturri said that during this sworn testimony Kaufman and Broad officials told him what to say. When he complained that his testimony had been distorted in the process, he said the company put him on a paid leave of absence and kept him there until he finally quit last month. He is suing for unspecified damages.

Markizon denied that Yturri had been forced out. He said the former employee had never been told to lie to customers nor had his testimony to plaintiffs’ attorneys been influenced by the company.

“We deny that anyone representing this company told John to tell anyone anything but the truth,” Markizon said.

Markizon said the company has already settled with a few homeowners by fixing up their homes and paying them approximately $30,000. The same settlement offer has been made to the remaining litigants, he said, adding, “We want to fix the houses so that they have the house they bought to live in.”