Homeowners Group Wins $22.4 Million From Bren on Condos

A homeowners’ association has won a $22.4-million jury verdict against a construction firm owned by Irvine Co. Chairman Donald L. Bren to repair a series of construction defects at a 419-unit condominium project.

The verdict, returned Monday in San Diego Superior Court, found that the foundations of condominiums built by the Bren Co. were not built to adequately resist high winds or earthquakes.

The Bren Co. is a home construction firm owned by Bren and is not part of the Irvine Co.

The jury also found other defects such as untested fireplaces, as well as unstable soils and drainage systems that caused the partial landslide of an adjacent hillside onto nearby Interstate 5 in 1983, according to a lawyer for the homeowners.

“This is an engineering question,” attorney Mickey McGuire said. “Every time we looked at something in depth with those condominiums, we found problems of things that didn’t meet design restrictions.

“We found that their design assumptions just didn’t work on paper. The buildings weren’t designed to resist the lateral forces exerted by anticipated natural events such as high winds or earthquakes.”

Daren Groth, senior vice president and San Diego division manager for the Bren Co., said in a prepared statement that the company has never denied that there were problems with the condos but that it considered the jury verdict excessive.

“We believe the decision is disappointing,” he said. “In our judgment, it seeks to impose a penalty far beyond the actual responsibility that is properly ours.

“The Bren Co. has always acknowledged that some repairs were necessary. Our structural engineers contend that the homeowners’ association demands were based on very different approaches to a solution and inflated cost estimates.”

He said the company probably would appeal the verdict.

At the center of the disagreement, Groth said, is whether construction of the condominiums adheres to the uniform building code, which he called a complex document that, among other things, sets the standard for a building’s resistance to natural events such as high winds or earthquakes.

“Different structural engineers have different approaches to designing a building to withstand an earthquake,” he said. “Their qualified experts said the buildings were not structurally sound.

“But we had equally qualified experts who looked at those buildings and found them to be structurally sound. We couldn’t resolve the differences.”

The Bren Co. has built more than two dozen projects in the San Diego area over the past 15 years, Groth said.

The project in dispute, the 40-acre La Jolla Southpointe Village, was built in four phases between 1974 and 1979. The one-, two- and three-story condominiums have a market value in excess of $200,000.

The ruling allows slightly more than $50,000 for structural repairs needed at each of the 419 units, McGuire said.

McGuire said the verdict was a message from the jury that a homeowner has the right to rely first on a builder’s ethics.

“It says people have a right to expect code minimums to be met whether the city catches the violations or not,” he said. “The city didn’t catch them breaking the code, so it’s supposed to be all right. Well, it’s not all right.

“And when the builder gets caught, his hands should be slapped but good.”

Problems with the condos first came to light in 1983 when the complex’s storm drainage system overloaded after a rainstorm and caused a mudslide.

“Caltrans sent the homeowners’ association a letter saying that their faulty drainage system had caused a road hazard.”

Caltrans cleaned up the mess, he said, but told the homeowners, “ ‘We’re going to send you a bill unless you do something about the problem.’ ”

McGuire said engineers hired by the law firm later found numerous construction defects at the complex, including structural cracks and faulty roadway construction.