GLENDALE / BURBANK : Developers Spar in Lawsuit Over Condos : Glendale: Dispute over shoddy construction pits a local group against New York investors who bought and resold units.

Attorneys for two groups of developers in an $11.4-million civil suit over shoddy condominium construction in Glendale agreed on one thing in their opening statements Tuesday: The other guys are to blame.

The developers are being sued by an association of those who bought the 95 condos. The association contends that both groups are to blame--the local group that began building the condos and the New York group that bought and resold them.

“My clients are responsible for the problems with the building before it sold,” said Joe Burrow, attorney for Glen Mont Investments and Sepian Construction, which originally developed the project on Montrose Avenue.

“But not after it sold,” he said.

Burrow said the Glen Mont partnership group, which includes Glendale Councilman Larry Zarian, sold the unfinished complex to a “group of sophisticated professionals” from New York “who had every opportunity to know what they were buying.”

The New York investors, who were aware of minor construction problems and did additional work on the complex after it was sold, should share full liability with Glen Mont, Burrow said.

Thomas Dowling, attorney for the group of real estate investors from New York and their California contact man, said his clients investigated the venture before they agreed to the deal and were told by their private inspector that “the building had a clean bill of health.”

But in 1989 when the first residents began moving and complaints about water leakage, exploding pipes and shoddy construction started pouring in, the New York group realized the problems were much greater than expected, Dowling said.

“They didn’t create the problems,” Dowling said. “They tried to fix them.”

A dispute developed between the two groups, he said, over who would pay for the additional costs of fixing the structural problems. The dispute went to arbitration, resulting with the Glen Mont group reimbursing the New York group by $100,000, Dowling said.

The plaintiff in the Los Angeles Superior Court case is the Glen Valley Homeowners Assn., made up of condo owners who contend the business partners knowingly sold shoddy condos after contractors warned them of problems in order to make a quick profit.

The group’s attorney, Lee Barker, said the complex cost Glendale investors $5.5 million to build. He said the Glendale investors then sold the project for $11 million to the New York investors, who in turn sold the units individually for a total of $13 million.

Construction of Glen Valley was completed in April, 1989. Homeowners filed suit in Glendale Superior Court in February, 1990, less than a year after the condos were put on the market.

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According to court records, Zarian, a 12-year Glendale councilman, was a one-third investor in the project. He said his involvement in the project was limited to a $340,000 investment.

Both lawyers agreed on another point in their opening statements--that homeowners exaggerated their claims and the cost of fixing them.

Burrow said that for years he has tried to settle the lawsuit but to no avail.

“They want to convert these units into a multimillion-dollar type of complex,” Burrow said. “These were built for the lower-income scale of the area.”

Testimony continues today.