Partial Settlement Reached in Condo Suit : Courts: Homeowners drop claim against Larry Zarian and his partners for alleged shoddy construction.

A homeowners’ group has accepted an undisclosed sum of money to drop a claim against Larry Zarian, chairman of the Metropolitan Transportation Authority, and his partners for shoddy construction of a building.

The deal allows homeowners to pursue their claims in a damage trial against a separate group of New York investors who bought the 95-unit Glen Valley Condominiums in Montrose from Zarian’s group.

Lawyers for both groups of defendants agreed in the trial in Los Angeles County Superior Court--which is in its seventh week--that Glen Valley is defective, but blamed each other for the damages.

Zarian, a Glendale City Council member, said Wednesday he was merely a passive investor in the project. He said he put $350,000 into the project, completed in 1989, which residents said they found was shot through with defects soon after they moved in.

In the lawsuit, Zarian was alleged to have been actively involved in the sale of the defective condominiums.

“I was an investor in this and nothing more,” Zarian said. “If my role in this was major, why wasn’t I asked to testify? The only time I spent with the attorneys throughout the whole thing was for a four-hour deposition.”

Zarian declined to disclose the terms of the settlement.

Lawyers for the defendants accuse homeowners of making unreasonable demands, saying repairs can be completed for $3 million or less. However, homeowners maintain repairs will cost an estimated $11.4 million.

Dwight Clark, president of the homeowners’ association, said plaintiffs are bound by an agreement not to discuss terms of the settlement until the trial is completed.

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