Courts: About half the homeowners in 4 of 7 Argyrous neighborhoods have alleged widespread construction defects.
November 24, 1999 - Developer George Argyros built seven neiborhoods in Orange County in the late '80s and early '90s.
In four of those neighborhoods, about half the homeowners have alleged widespread construction defects, court records and interviews show.
A Superior Court jury awarded $1.75 million. to the owners of 24 homes in one of those neighborhoods. The plaintiffs, who bought houses in a Yorba Linda tract called Brighton Estates, were Asking for $8.4 million.
Although the homeowners will have to settle for less, barring a successful appeal, the jury verdict does not end the legal headaches Argyros faces.
The Yorba Linda homeowners represent a fraction of the 260 Orange County families who have accused Argyros' Brighton Homes of shoddy construction from the foundations to the roofs.
Six more cases are windin through the Orange County court system, and plaintiffs are asking for more than $120 million in damages.
One Trabuco Canyon neiahborhood is blaming Brighton for mysterious illnesses they say are caused by molds growing in their homes as a result of water seepage, according to their attorney, Kenneth Kasdan.
"Some of the molds are actually toxic" said Kasdan, who is representing nearly all of the plaintiffs. "There is a whole panoply of problems." In another tract, roof tiles have been falling off homes that sold for close to $400,000, Kasdan said.
Argyros has declined to comment on the cases. His attorney Robert Carlson said the lawsuits are frivolous.
"It only takes $188 to file a lawsuit," Carison said. "They don't have to have merit." The plainfiffs disagree.
"I sort of feel like they're laughing their way to the bank with our money," said -Lisa Lake, who bought a home for about $320,000 in Trabuco Canyon nine years ago. "We definitely got a lemon-I think they- built this-house on Friday afternoon." At her Cape-Cod-style home in a gated community, Lake said the concrete is eroding, the foundation is slipping, the walls are cracking and the roof tiles are slipping.
Brighton Vice President Rudy Baldoni would not comment on the Trabuco Canyon cases because defect testing is proceeding.
"There is still discovery going on," Baldoni said. "Until we have the results of the testing, I really can't say what all the issues are. " But Baldoni said that construction-defect lawsuits are a routine part of the business for every developer.
Brighton, its co-defendants and its insurance company have already paid roughly $10 million to settle other construction-defect cases in Orange County.
Although lawsuits were filed by homeowners in all seven Orange County neighborhoods in 1992, not all the neighborhoods were plagued with problems.
In Mission Viejo Brighton built 90 houses and was sued by just one homeowner.
In one Yorba Linda tract the pompany built 90 houses and was sued by two homebuyers.
The ratio of plaintiffs to homes is much higher in other areas of Yorba Linda and Trabuco Canyon on court records show.
At Brighton Estates in Yorba Linda, the company built 75 homes and 62 ended up in litigation. Of those 62 homes, 24 were part bf Tuesday's jury verdict.
At Brighton Ridge in Yorba Linda, the company built150 homes and 73 are in litigation.
In Brighton Glen and Brighton Summit in Trabuco Canyon, the company built 230 homes and 103 are in litigation.
"This is clearly above the norm that we experience with most homebuilders in Orange County," said attorney Thomas Miller, a construction-defect specialist who has not been involved in any litigation against Brighton Homes. "Two-thirds of these developments had significant defects." Argyros, who no longer builds houses, earned his
fortune building retail, commercial an apartment complexes and only briefly built single-family homes.
Brighton's Baldoni downplays the construction-defect suits, saying they had nothing to do with Argyros' decision to stop building houses.
Instead, it was the economy of the early '90s. "The housing market just got hit-hard and ended up being a very difficult business," Baldoni said. "We'll never say never, but here are no plans at this point to build anymore homes." During the Santa Ana trial, transcripts also show that Brighton Homes obtained near 600 building permits in Orange County before the company received a valid contractor's license, a violation of state law.
The company finally got a license Dec 29, 1988. Before that, however, Brighton applied for permits - using another company's license number. The applications stated the permits were for Brighton Homes, but the license number belonged to Arnel Development, another company owned by Argyros.
Under the state's Business and Professions Code, it is a misdemeanor to lend a contractor's license number to an unlicensed firm. But the statute of limitations expired in 1993, according to a statement from the State Contractor's Licensing Board.
Argyros acknowledged in court testimony that Brighton did not have a license when it began construction. But he said he was unaware of this at the time.
"I don't know how that happened," he testified.
Argyros has amassed a net worth estimated at $250. The 1959 Chapman University graduate's generous behests led Chapman to name its business school after him.
Long a major donor to Republican causes, Argyros saw his political, profile soar in 1994 when he bankrolled a ballot measure promoting a commercial airport at El Toro. Since then, the Newport Beach resident has been the leading private sector figure pushing the airport.
Argyros recently took on a new role with his selection to the GOP's Victory 2000 campaign, meant to revive the reeling, debt-ridden California Republican Party. A top local GOP' offcial said that allegations about defective homes would do nothing to dim the high regard in which Argyrosis held.
"George Argyros is a pillar of the Republican Party and the Republican movement in this county," said Michael Capaldi, president of the Lincoln Club of Orange County. "He's shown his stripes time and taine again" Capaldi said he fully expected Argyros to be highly influential in county Republican matters for years to come.
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