Embattled Newport Homeowners Lose Court Round

A Superior Court judge, rejecting claims by a group of Newport Beach homeowners that their homes were built on shaky ground, effectively ordered them Tuesday to pay five years’ worth of back rent totaling about $450,000.

Judge Eileen C. Moore refused to grant a request from 63 Newport Shores homeowners that would have blocked Signal Landmark Co., which owns the lots on which their homes are built, from collecting the past-due rent.

The homeowners, each owing between $5,000 and $10,000, had tried to avoid paying rent on the home-site land leased to them by Signal Landmark until their own legal claims against the company for alleged soil slippage and other deficiencies at the 31-acre site can be resolved.

Those claims, part of a $20-million lawsuit by some of the more than 450 owners of the single-family Newport Shores homes, are scheduled for trial in November.

In the meantime, Moore said in her ruling in Superior Court in Santa Ana that she remained unconvinced that the homeowners could succeed on the merits of their claim or that they would face irreparable harm by having to meet unpaid rents dating back to 1984.

“This legal stuff is all a lot of mumbo jumbo to me,” said Xavier Kohan, a leader of the Newport Shores rent protesters, “but (the ruling) just doesn’t seem fair to me. . . . But I guess we’ll have to pay it.”

Kohan, owner of a wholesale flower business, added that while the payment of the back rent will be tough on him financially, “for me, the principle is 90% of it. I’m mad--they’ve held us hostage for the last six years.”

Attorney Cathy R. Schiff of Newport Beach, representing the homeowners on the motion in the Santa Ana courtroom, said she is not certain what avenues of appeal may be open to her clients. But given Moore’s ruling, she said, “I think they’re going to have to pay, rather than risk losing their homes.”

The 63 homeowners affected by Tuesday’s ruling are part of a broader group of about 100 Newport Shores homeowners who have refused to pay rent totaling about $1.3 million since 1984. Some of the others who were not parties to the motion before the court Tuesday have already made arrangements with Signal Landmark regarding the back rent.

The homeowners claim that their complex, on the inland side of Coast Highway in the northern tip of Newport Beach, was built with a faulty settlement process in the 1960s, producing soil slippage. That in turn, they claim, has prevented windows and doors from closing properly and has caused faulty plumbing, structural cracking and a dip in property values.

Kohan said it was not until the homeowners began meeting as a group about 1984 that they discovered their common household inconveniences.

‘Really Ominous’ Problems

“I thought it was peculiar to me, but then we found out everyone was having these hassles,” he said.

“A lot of (the problems) are really ominous,” added Ninfa O’Brien, a real estate broker and Newport Shores homeowner. “You don’t realize it for a while, but then you begin noticing things--like the beams being tilted.”

But Signal Landmark officials maintain that there are no structural deficiencies at the site and that they will be able to make that case at the coming trial. “Clearly, we certainly showed (in court Tuesday) that we had sufficient evidence to back up our case,” said Signal Landmark Vice President Jim Chiboucas.

Added attorney Kathleen Paone, representing the company in the dispute: “Right now, Signal just wants to collect its rents.”

Schiff, representing the homeowners, maintained that by ordering the group to pay their back rents now, Moore has effectively given Signal Landmark a “war chest” to fight the homeowners’ claims at the trial.

“These people will now have to put out money for this back rent themselves, while they may not see any money (from their own lawsuit) for years. . .