Verdicts / Settlements - Defendants

Huntington View Point Owners' Association vs. Huntington View Point, et al.

Facts

In 1976 Defendant Huntington View Point developed the Huntington View Point project in Huntington Beach. It consisted of 79 units. Defendant Robert P. Dennis, soils engineer, performed certain services at the project; and Henry J. Kelly Co., Inc. performed certain rough grading as a subcontractor at the project.

In November, 1983 Plaintiff Home Owners' Association (HOA) discovered patios separating from Building No. 11, wooden fences separating from the building, cracks in the building's exterior stucco, cracks in the interior drywall and other evidence of soils related distress. Henry J. Kelly Co., Inc. was the only subcontractor still in business at the time of the lawsuit and was cross complained against by the developer for implied and expressed indemnity. Defendant Robert P. Dennis represented himself in pro per.

Plaintiff

That the Defendant developers were strictly liable for settlement, creep and yielding of the fill slope below and to the rear of Building No. 11, consisting of seven condo units, and the resulting structural damage. Plaintiff further contended that the fill soil below Building No. 11 contained organics and was improperly compacted.

Damages

Structural damage including patios separating from the building, cracks in both exterior/interior walls and cracked floor slabs.

Defendant

Contended by Defendant and CrossDefendant that fill settlement was primarily caused by overwatering and very poor drainage which was the subject of a previous lawsuit by the HOA against the developer, who had also in turn cross complained against the rough grading subcontractor. Further, Cross-Defendant Kelly contended that the developers concealed an original soils report by the original project soils engineer, who was later replaced by developers with Defendant Dennis. The previous soil report discovered the existence of ancient layers of peat in the vicinity of Building No. 11 and warned that if not removed, significant settlement and structural distress would occur to any structures built on top of those organic deposits.

Demand

$1.654 million reduced to $1.2 million at MSC OFFER: None

Verdict

$697,000 settlement following the 8th day of trial after four MSCs, with CrossDefendant Henry J. Kelly Co., Inc. contributing $195,000 and Defendant developers paying $502,000. Settlement conditioned on Plaintiff entering into a repair contract with Kelly's expert, the rough grading subcontractor, for a fixed price of $497,000. All parties to bear own costs.

Notes

The Court granted Kelly's motion to bifurcate the trial to first try the affirmative defenses of the statute of limitations, retraxit, res judicata and collateral estoppel as to the earlier lawsuit filed by the HOA regarding drainage issues. After 4 days of trial, the Court ruled in favor of the HOA as to the affirmative defenses; and following the commencement of the liability phase of the trial, the Court ordered the parties to attend MSCs, which took place on 4 consecutive nights following trial each day. The developers contended that the indemnity clause contained in the subcontract with crossDeft Kelly was a "Type I" express indemnity agreement. Kelly contended the indemnity clause was a general or "Type II" indemnity clause. A separate hearing was held wherein the Court concluded that the indemnity clause was a general or "Type II" clause.

Trial Time

8 days

See Neubauer's Confidential Report for Attorneys No.: 3090