Slum Suit Settled for $2.4 Million : Housing: The award will be split by 65 families that lived in a rundown, roach-infested building. Three sets of owners will pay.

Attorneys representing 65 families announced Tuesday a $2.4-million settlement of a lawsuit filed by tenants over slum conditions in a downtown Los Angeles apartment building.

The out-of-court settlement involving a building at 106 E. Washington Blvd. was described by attorneys as the second largest of its kind in Los Angeles history.

“The building was maintained in poor condition for a number of years,” said Mercedes Marquez, who represented the tenants.

For this reason, she said, the suit was filed against three different sets of owners who held the property over the past decade: Edward Rubin, a Los Angeles doctor; Rand Financial Corp. together with Descartes Financial Corp., and Washington Management Corp.

The building was demolished in 1988 and has been replaced by a mini-mall.

During a news conference at the St. Francis Center, Marquez described a rat and roach-infested building where the plumbing did not work and ceilings had collapsed.

Most of the former tenants are Latinos who do minimum-wage work for the garment, restaurant and jewelry industries downtown, she said. About half of the tenants were children.

Twelve-year-old Laura Cruz recalled that her family moved to the old brick structure when she was 7. She lived on the third floor with two brothers, a sister and her parents, who were garment workers.

When she got home from school, she said, she stayed in the cramped apartment and never ventured out because gang members controlled the hallways. “Gangs didn’t live in the building,” she said. “They hung out there and terrorized people.”

Margarita Chavez, who lived in the building 12 years and paid $260 a month for an apartment, said her two children suffered skin infections from cockroach bites.

Sister Kathy Wood of the St. Francis Center said she got involved in the case after several tenants became so desperate that they tried to fix up their apartments themselves.

For many years, Wood has organized tenants in several buildings in the garment-district area.

Wood said it was raining the first night she went to a tenant meeting at 106 E. Washington. “I watched water pour down the light fixture in the ceiling and children playing in the puddle on the floor underneath,” she said.

Wood said she was unsuccessful in getting local health and building inspectors to respond to tenant complaints, so she contacted Litt & Stormer, the public-interest firm for which Marquez works. The lawsuit, filed in 1987, alleged that the building was uninhabitable and that the landlords were negligent in making repairs and intentionally inflicted emotional distress on the tenants.

Attorney Paul Cohen, who represents Rand Financial Corp. and Descartes Financial Corp., both Los Angeles real estate investment firms, said his clients settled because, “The costs of litigation of this kind are prohibitive.”

“The settlement will provide that no party admits any liability,” he said.

The other former owners could not be reached for comment.

Marquez said that the tenant families will receive an average of about $37,000 each. Attorney Barry Litt said that Litt & Stormer will receive between 10% and 40% of the payments.

The record for such a suit, Litt said, is a $2.5-million out-of-court settlement in a 1988 suit by 70 families against landlord Milton Avol.