$9 Million Settles Suit Over Desert Project; May Touch O.C. Firm : Courts: The deal involves allegations of flawed construction at a 960-unit golf resort condominium. One builder did not settle.

Residents of a golf resort condominium development in Palm Desert settled a construction defect suit for $9 million Friday--much of it reportedly coming from a major Orange County builder’s liability insurer.

The settlement agreement prohibits either side from revealing the developer’s name, but the lawsuit that started the lengthy negotiating process was filed in Riverside Superior Court in 1991 against Newport Beach-based Presley Cos. and several affiliated companies and partnerships.

The suit, by the homeowners association at the 960-unit Palm Desert Resorter complex, identified Presley Cos. and its Presley of Southern California subsidiary as principal members of the partnership that planned and developed the 18-hole golf course and the surrounding condominiums.

Officials at Presley were not available for comment Friday.

The settlement was signed Friday by the project’s developer and two of three general contractors that built homes in the complex, said attorney Thomas E. Miller, who represented the homeowner association.

Miller said that the agreement calls for the insurance companies for the developer, its partners and two of three general contractors who built homes in the resort complex to pay $7 million to the homeowner association. An additional $2 million is to come from insurance companies representing a variety of subcontractors, architects, engineers and materials suppliers involved in the project, which was built during the 1980s.

The third general contractor, Affiliated Construction Co. in Palm Desert, did not sign the settlement.

Miller said trial on a suit seeking more than $12 million in damages from Affiliated Construction has been scheduled for July 5. Affiliated built the first 512 units in the resort complex, Miller said.

At Affiliated Construction, president Richard R. Oliphant said he was not able to comment because of “a gag order.” He did not elaborate.

Oliphant also was listed in the 1991 suit as a partner in the development partnership Presley formed to oversee the project.

Miller, who has offices in Irvine, Los Angeles and several other Southern California cities, is one of the attorneys who pioneered the field of construction defect law in the late 1970s in San Diego.

He would not confirm that Presley signed the settlement. He cited the confidentiality agreement in the settlement in declining comment on the suit he filed against Presley and others nearly three years ago.

Miller did say, however, that the suit had been scheduled for trial this summer and that the court appointed Judicial Arbitrator Mediation Services Inc., of Orange, to mediate the case in an effort to arrive at a pretrial settlement.

The private arbitration service got the case in October and helped hammer out the settlement, Miller said.