Condo Developer to Pay $8.6 Million to Settle Lawsuit : Oxnard: Residents of the Colony at Mandalay Beach alleged that shoddy workmanship caused many units to leak when it rained.

The developer of a pricey waterfront condominium complex in Oxnard has agreed to pay $8.6 million to settle a lawsuit alleging that shoddy workmanship caused nearly half of the project’s 440 units to leak when it rained.

The homeowners association representing residents of the Colony at Mandalay Beach filed the suit in 1989 after discovering construction defects in roofs, windows and decks at the seaside complex.

After making repeated attempts to fix the problems and with a trial a few months away, developer Mandalay Beach Venture Ltd. finally agreed Friday to the settlement, which will go toward repairing the defects and related water damage.

“The problems were immediate and resulted in years of problems for the homeowners,” said Leonard Grasso, general manager of the complex. “It’s a sizable settlement but it’s a fair one, and it’s going to get the job done for us.”

Construction on the sprawling project overlooking Oxnard State Beach began in 1984 and was completed three years later.

Some of the units, which sold for $250,000 to $750,000, began to spring leaks almost as soon as they were occupied, said David Tredway, an Oxnard attorney representing the homeowners group. The first significant problems were discovered during the winter rains of 1986, Tredway said.

Heavy rains last year and again recently caused extensive water damage in nearly half the units, Tredway said.

“We knew there were some problems out there,” he said, “but we didn’t know they were that bad.”

Herb Bostrom, who moved into his split-level townhome in 1985, discovered that his bedroom and garage roofs leaked with the first rain.

The developer tried to patch the roof four times but it kept leaking, Bostrom said.

“Even with the roof leaking, it’s a wonderful place to live,” said the 66-year-old retiree, who left Northridge for Oxnard’s ocean view. “Once they correct the problems, everything is going to be great.”

The lawsuit named as defendants Mandalay Beach Venture--made up of Raznick & Sons Inc. of Woodland Hills and the Orange County-based Bergheer Co.--along with 18 subcontractors who worked on the project.

Aaron Raznick, president of Raznick & Sons, said Monday that the problems were virtually impossible to detect during construction and that his company teamed with the Bergheer Co. to pour about $1 million into remedying the deficiencies since they were first recognized.

“There is certainly no admission of wrongdoing on our part,” he said. “We do know the construction defects were caused by poor workmanship and construction materials installed by a few greedy subcontractors.”

Raznick, whose firm has completed a number of residential and commercial projects throughout the county, said he now employs an inspector to review each development as it is being built.

“We were bewildered ourselves as to what was happening,” Raznick said. “We learned a good lesson.”

The lawsuit, filed in Ventura County Superior Court, was scheduled to go to trial in July. Last year, the court appointed retired Orange County judge Jerrold Oliver to mediate the case.

Both sides said they were pleased that a settlement had been reached.

“I think all parties spent a lot of time, money and effort to put together a settlement to avoid even larger costs down the road,” Tredway said. “We believe we have enough money there to do the job.”