Homeowners to Get $7.2 Million

A Superior Court judge Friday approved a $7.2-million partial settlement in a construction defect lawsuit by a San Juan Capistrano homeowners association against a builder.

The settlement covers just one phase of a the lawsuit by the Mesa North Townhomes Owners’ Assn. against builder CCL (California) Realty Inc. and Glendale Federal Bank, which developed the project.

In its lawsuit, the association cites a number of structural deficiencies, including improperly installed roofing and cracked foundations caused by sulfate in the soil.

Attorney Kenneth S. Kasden, whose firm represented the condominium association, said the settlement is the largest per unit ever reached in Orange County: $127,929 for each of 57 homes.

“In the past few years, it has become increasingly obvious that the foundations of many homes and other buildings in Orange County and other coastal regions of California are slowly, irreversibly being destroyed by a white, powdery substance called sulfate,” Kasden said. “Once the sulfate destruction begins, it can’t be stopped.”

Sulfate is a naturally occurring salt compound that comes in gypsum deposits commonly found in areas once covered by the ocean. When the soil becomes wet from rain or ground water, the sulfates dissolve and seep into concrete, eventually causing it to crumble.

Foster Furcolo, whose firm represented the builder, said the settlement “was made with the understanding that neither side admitted to liability. It was done to resolve the case and to avoid the uncertainties of litigation and the expense.”

The balance of the lawsuit is against Glendale Federal. Settlement of that portion is still pending and is scheduled for trial on June 8.