SANTA MONICA : Condominium Owners Win Settlement of $2.3 Million

Owners of a Santa Monica oceanfront condominium complex have been awarded $2.3 million in a court-approved settlement stemming from allegations that shoddy construction caused widespread water damage and left the luxury units vulnerable to fire.

The 10-unit complex, just south of the Santa Monica Pier at 2203 Ocean Ave., was built in the late 1980s. The project was a joint development of general contractor Koffman Construction Inc. and Moss and Co.

Attorneys for the developers acknowledged some problems with the building but said the settlement was reached to avoid a long court battle.

The settlement, negotiated by Los Angeles Superior Court Judge David Rothman days before the case was scheduled to go to trial, is one of the largest per-unit amounts ever in Los Angeles County, according to attorneys for both sides.

“All of this could have been avoided had the general contractor properly supervised the project,” said Ken Kasdan, the Irvine-based attorney who represented the homeowners.

“The problems were all hidden in the walls,” he said. “The longer people lived there, the more evident it became that there were serious problems.”

Problems at the building, where units cost between $925,000 and $1.2 million, included electrical defects, lack of fire blocks and other safety measures, cracking of drywall interiors and leaks throughout--from balconies into units and the underground parking garage.

“You have to keep in mind that many of these units sold for more than a million dollars,” said Robert Young, an attorney who represented Moss and Co. “We believe that perhaps some of the motivating factors for getting this amount was that people bought these homes at the top of the market and saw their investments dwindle.”

But Kasdan said the units, all with ocean views, were nightmares for the purchasers. “We found there was no waterproofing in some areas and only one-half the required waterproofing in others,” Kasdan said. “And there were numerous structural problems. For example, the lag bolts that are supposed to transfer earthquake forces were connected to nothing but air. . . . “