Award May Not End Worries for Owners of 44 Sinking Townhouses

Slowly, inexorably, 44 of the Estates Townhomes in Rancho Palos Verdes are sinking into the ground.

As they go, chimneys pull away from buildings, cracks trace lacy fingers of damage through bedrooms, foundations slide away from front-door frames, sidewalks buckle and a pool tilts oddly to one side.

Since 1985, when residents began suspecting that the ground beneath their townhouses had not been properly compacted, homeowner association board members at the 89-unit complex have worried about where they would get the money to shore up the sagging units.

Last Friday, after a seven-week trial, a Torrance Superior Court jury ruled that the developer that built the 44 failing units should pay $6.48 million to repair the damages.

But that does not necessarily mean the homeowners will get the money quickly.

Attorneys for the developer, Ring Brothers Corp., say that the company’s insurers are denying any financial liability for the subsidence problem, arguing that the flaw is not covered by the policies that Ring Brothers purchased.

Ring Brothers, which contended during the trial that repairs should cost no more than $4.4 million, has done no development work in nearly 10 years and has few assets to offer the homeowners. Attorney Mark Kane said the company has no active business.

Ring Brothers sued the company that sold it the land, contending that the firm--Lincoln Property Co.--should pay for damages because it allegedly botched the original grading and landfill work on the site.

The townhouse residents, fearing that the legal wrangling could delay repairs for months or years, can only hope that last week’s court victory will not end up being too little too late.

Experts have warned that repair costs could exceed $8 million.

“The damage has accelerated so much in the last two years,” said Susan Bernard, president of the Estates Townhomes Assn. “If we don’t take care of this now, we’re worried about what might happen.”

Even if the money is paid quickly, attorney’s fees that could exceed $1 million may have to be taken from the jury award. Attorneys for the residents are trying to have fees added to the jury award.

Everyone agrees that the crux of the problem at the Estates Townhomes, located just north of the South Coast Botanic Gardens on Crenshaw Boulevard, is how the ground was prepared.

The first 45-unit phase of the complex, which has suffered no damage, was completed by Lincoln Property Co. in 1973. At the time, Lincoln filled portions of a canyon and graded the plot of land just south of the initial complex to prepare it for 44 more units in 10 separate buildings.

Lincoln sold the graded, undeveloped site to Ring Brothers, which built and sold the second stage of the townhomes between 1977 and 1978.

Buyers said they were attracted by the $90,000-$100,000 price tags, the lush landscaping and the posh surroundings of the Palos Verdes Peninsula. But the units became a headache within weeks of their moving in, some said.

“None of the door latches matched up with the strike plates, grouting was just slopped on--you could stick a knife right down in between the grouting and the tile--and any number of odds and ends,” said Bernie Hiser, a developer who moved into his new unit in 1978. “These should have been pretty nice units, but they were just slopped together.”

More ominous signs of trouble did not begin to crop up until years later, he said. Bulges appeared on inside and outside walls, kitchen cabinets began separating from the ceiling and cracks appeared around windows and door frames.

“There is just so much pressure, you can see where the property has settled,” Hiser said.

Lyle Radeleff, a retired mechanical engineer who serves on the Estates board of directors, said experts determined that each of the 10 buildings is sinking at a different rate, based on how much fill is beneath each foundation. In some cases, one end of a building is sinking faster than another, he said.

Investigators who bored into walls and ceilings in some of the units to examine what was happening discovered slipshod workmanship, Radeleff said.

“The retaining walls, it turned out, had no reinforcing rod in them and they started to separate horizontally,” he said. “Patios were never rebarred into the foundation of the building. . . . Vents weren’t put in that were supposed to be put in.”

In addition, brackets to bind chimneys to units were improperly installed, allowing the two-story structures to begin pulling away from the buildings. Earlier this year, one unit’s chimney pulled an arm’s width away from the building and had to be torn down.

Attorneys for Ring Brothers have acknowledged that there were construction defects beyond the subsidence problem.

“Ring Brothers was never maintaining a position that there wasn’t a problem at the Estates,” Kane said. “We conceded that there was a problem and that Ring Brothers was responsible for the problem . . . but we are seeking indemnification from those people who sold the property to us.”

Residents have tried patchwork cosmetic repairs, but few last long. New grouting, cement work and plaster work are cracking away in many areas.

Once the homeowners have managed to collect the jury’s award, serious repairs can begin. At least two of the buildings will have to be vacated and lifted off their foundations so workers can build a stabilizing system, Bernard and Radeleff said. In other areas, a series of holes will be used to inject grouting into the soil beneath the units.

“It will look like a war zone once we get started,” Radeleff said. “But it sure will be nice to get it done.”