Homeowners’ Suit Settled for $7.1 Million

A group of 90 Laguna Niguel homeowners plagued with leaky roofs and rotting floors have reached a $7.1-million settlement in a lawsuit over faulty construction of their homes, attorneys for both sides said Monday.

The settlement, one of the region’s largest for individual homeowners, came out of a $20-million lawsuit by the residents against developer D.T. Smith Inc. and a host of subcontractors.

“There’s probably 50 different insurance companies contributing to the settlement,” said the homeowners’ attorney, Ken Kasdan.

The homes in the hilly Vista Monte and Vista Mar neighborhoods of Laguna Niguel have suffered from a variety of construction problems that resulted in water leaking from roofs and windows and seeping from walls and flooring, Kasdan said. In some cases, residents said their floors rotted and had to be replaced.

“It’s really, truly an outrage,” said Kasdan, noting that most of the residents were looking forward to repairing their homes before the winter rains hit. The residents will each get between $30,000 and $42,000 after litigation costs.

But Thomas J. Lincoln, a San Diego attorney who represented the developer, said Kasdan is exaggerating the construction problems. The fact that the homeowners initially sought more than $20 million for repairs and then settled for $7.1 million is evidence that the problems were overblown, he said.

“I don’t think they will even use $7 million for the repairs,” he said. “In any project there are always examples of poor workmanship, and in this project there were such instances. The plaintiffs’ team of experts tried to find those and then apply them throughout the project by extrapolating.”

Kelly Gonis said she bought her two-story home in the Vista Mar tract in 1988 and has had trouble every year since.

“I can’t leave the house if it rains,” she said. “I’ve got pots and pans and those huge kitchen trash cans all over the place.”

Gonis is expecting to net $30,000 from the settlement for her repairs.

Gene Bloom, who paid about $300,000 for his house in 1991 and has replaced his kitchen floor once and repainted a rear wall in his home each year to cover leak marks, said he and his neighbors are relieved to have the case settled.

“Everybody’s really happy with it,” he said. “I think it really was a fair settlement all the way around.”

Kasdan said problems were rampant. In some cases, he said, newspapers were stuffed in joints where mortar was required, ceramic roof tiles were improperly nailed and inferior concrete was used for slabs.