$11-Million Court Award Will Repair Faulty Work on Housing at UC Irvine

The University of California has been awarded $11 million in a lawsuit over numerous construction defects that caused millions of dollars in water damage to a UC Irvine student housing complex.

The settlement, reached this month after months of mediation in Orange County Superior Court, comes eight years after UC Irvine’s Arroyo Vista complex was completed by a San Diego contractor, Diversified Turnkey Construction Co., which has since gone out of business.

The company’s insurers will pay nearly $5 million for the repair work, with the rest coming from subcontractors and their insurers.

About three years ago, UC asked the project’s bonding company, Fireman’s Fund, to pay $900,000 to cover the cost of repairing leaky showers, tile and dry rot that have plagued Arroyo Vista and its three dozen buildings since it opened, said UC attorney Steve Morrell.

When the company declined, the university system filed suit in March 2000. An investigation revealed widespread water damage and mold in walls and ceilings, caused by defects including poorly constructed decks and leaking windows, doors and roofs.

“We didn’t realize [until then] that there were defects throughout the project,” Morrell said. “Virtually every system to keep out rainwater had failed.”

In all, UC estimates that the construction flaws caused $15 million in damage -- about $1.5 million less than the complex cost to build.

“It wasn’t a great project. It didn’t come out the way it was supposed to come out,” said John Simpson, an attorney who represented the contractor and Fireman’s Fund. “We’re glad to have the case resolved.”

Repairs at Arroyo Vista are far from done, and students who pay $345 a month for a shared unit are accustomed to dealing with clogged plumbing, minor floods and tiles falling from shower walls.

“We used the shower, it leaked down through the floors and it shorted the electrical system, and the fire alarm went off,” said Adam Knapp, a senior who has lived in the complex for three years. “The housing is actually really nice. The problems are in all the internal things you can’t see.

“It’s not that bad,” he added. “And the price is right.”