Condo Owners Reported Near Settlement With Builder Lyon

Stanton condominium owners who filed a $20-million lawsuit against William Lyon Co. were reported in court Wednesday to be near a settlement with the Newport Beach home builder.

As jury selection was set to begin, lawyers for both sides told Orange County Superior Court Judge James L. Smith that they are working to settle the suit for an undisclosed amount. The trial was postponed so that negotiations could continue.

Filed by the Crosspointe Village Condominium Owners Assn. in 1990, the negligence suit alleges poor construction of a large Stanton condo complex and seeks to force Lyon and dozens of its subcontractors to pay for hundreds of repairs in the 495-unit complex.

“We have a skeletal settlement put together,” Gary Aguirre, the homeowners’ attorney, said in court Wednesday. “We need to revise some of the language, but it’s our intent to put a final settlement on the record today.”

Attorneys were in court for the rest of the day and could not be reached for comment. One reason for the delay in negotiations was that a subcontractor involved filed last week for bankruptcy protection, so the U.S. Bankruptcy Court judge must approve the final agreement, Aguirre said.

Gregory L. Dillion, the Newport Beach attorney representing William Lyon Co., said in court that among terms of the settlement being hammered out is a stipulation that the amount of money Lyon is to pay not be publicized.

The suit alleges that the condos were built without proper supervision by Lyon, the general contractor. Among the flaws alleged in the suit are improperly installed wiring; missing waterproofing paper under the roofing material; roofs that are not properly attached; and missing or improperly built fire walls.

Officials at William Lyon would not comment on the case and referred calls to their attorneys.

The case spotlights the issue of construction defects, for it centers on one of California’s largest and most reputable home builders. Since William Lyon Co. was formed in 1954, it has built about 60,000 homes and apartments.

In December, the builder paid $8.7 million to settle a faulty construction lawsuit filed by homeowners at the 350-unit Whispering Hills condo complex in Lake Forest.