September 14, 1998 - Santa Ana - Orange County builders have agreed to pay 37
condominium owners $9.4 million for the fair market value of their Laguna Niguel homes
damaged when a hillside above the development shifted.
The settlement between the Crown Valley Parkway Condominium Association and Hon
Development, and J.M. Peters, among others, is reportedly the first time a builder has
agreed to buy out an entire community association because of construction defects. Unit
owners will also receive $100,000 for relocation expenses. Four owners settled with Hon
earlier this year. Crown Valley Parkway Condominium Association v. Hon Development et
al. 740265.
The settlement comes just 17 days before the trial was scheduled to begin in Orange
County Superior Court.
"The goal has been to acquire funds to enable homeowners to recover their monetary
losses," said Thomas E. Miller, an Orange County sole practitioner who represented
Crown Valley, in a prepared statement "On a per unit basis, the settlement represents
one of the largest in California. [The homeowners] are now closer to putting this behind
them and moving on with their lives."
The settlement brings an end to a suit that originally was filed in December 1994. The
association alleged that the adjacent hillside was not properly reinforced when it was
created by Hon and J.M. Peters as a base for luxury homes.
The hillside began to move, and the heavy winter rains exacerbated the problem, causing
some of the homes to slide down the hill.
As a result, 21 of the 41 units were evacuated, 17 of which were destroyed. The
remaining 20 units will be evacuated by December.
Attorneys for Hon or J.M. Peters could not be reached for comment.
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