Niguel Summit Landslide Case Settled

Owners of condominium units that were heavily damaged last March when Niguel Summit subdivision homes crashed down a slope on them reached a $9.4-million settlement Friday with two Orange County developers.

The Crown Valley Parkway Homeowners Assn., representing the homeowners, settled with Hon Development Co. and the owner of J.M. Peters Inc., developers of the Niguel Summit project in Laguna Niguel.

The suit was filed in 1994 but received widespread attention after the dramatic landslide sent homes from Niguel Summit tumbling down the slope and upending five condominiums in the Crown Cove complex.

The lawsuit originally was filed after years of buckling and stress damage to the 41-unit condominium complex. Just weeks after the March 19 landslide, geologists determined that the slope was moving three inches a day.

Under the settlement, Hon and Capital Pacific Holdings, which owns J.M. Peters, agreed to buy out all 41 homeowners and give them an additional $100,000 for relocation expenses, according to a joint statement issued by the homeowners’ attorney Thomas E. Miller and the defendants.

“There is some relief in reaching a settlement,” Mike DeStefano, president of the homeowners group, said in the statement. “Although the initial shock has worn off, we will never really get over this. We will certainly never forget it.”

The condominium homeowners’ association had sought $15 million to settle the case in April.

Residents of the condominium complex, completed in 1980, started seeing problems in 1986 after construction of Niguel Summit began with the regrading and buttressing of the slope above them. The development was in an old landslide area, and developers added 4 million cubic yards of dirt.

According to county records, the developers were warned that building on “ancient landslides” could be unsafe, but they were able to continue construction after producing their own geological report that persuaded county officials to let the project go forward.

More than 3,000 pages of records related to Niguel Summit show that the project was troubled from the start with construction repeatedly delayed because of complaints of mudslides, slope washouts, erosion and dust.

Half of the condominium owners have been evacuated from the complex, with Hon and Capital Pacific Holdings paying $20,000 a month for temporary relocation costs under an agreement worked out in May. The remaining residents are expected to move by December.

“The goal has been to acquire funds to enable homeowners to recover their monetary losses,” Miller said in the statement.

Miller said the settlement agreement prevented him from saying more about the case. The joint statement said the repurchase of an entire condominium complex because of construction defects was unprecedented.