3 Developers Sue Irvine Co. Over Property Use

Three housing developers filed a $10-million suit against the Irvine Co., charging fraud and negligence regarding a Tustin property on which the developers were trying to build 55 single-family homes in 1990.

Filed in Orange County Superior Court in Santa Ana Tuesday, the suit accuses the Irvine Co. of failing to disclose environmental and legal problems impacting the Tustin Ranch property.

The suit was filed by San Remo, an Irvine partnership, Cameo Homes in Newport Beach, Glencrest Inc. of Lake Forest and three individuals, Jim Gianulius, Rob Frakes and Glen Brengle.

Specifically, the suit alleges that the Irvine Co. failed to tell the developers about problems with the gnatcatcher and coastal sage scrub. The suit alleges the Irvine Co. put the property in a nature conservancy after transferring the property to the developers.

“The Irvine Co. knew there were a myriad of environmental problems which would impede development of this site,” said Herbert Hafif, the attorney representing the developers. “They kept these to themselves. They told our people they were buying developable property and then put it into a bird park.”

However, Peter D. Zeughauser, an attorney for the Irvine Co., said he was unaware of any environmental problems on the site. “They were sold a fully graded lot and there was no coastal sage scrub on it,” Zeughauser said.