Represented: Defendant ¨C T.A. Staben

Result: Non suit granted April 7, 2004 after a three week jury trial.

This case originally involved a full-blown construction defect action that was filed on behalf of the Stonegate Homeowners Association (hereinafter referred to as the "HOA") and the owners of 11 separate homes that are part of a 238 home development in West Hills, California. The law firm of Robertson & Vick, and in particular, Jonathan Vick represented all of the plaintiffs. Frank Sabaitis and Louis Chao of the law firm Sabaitis • O’Callaghan represented the defendant, T.A. Staben ("STABEN").

The Complaint originally included causes of action for strict liability, breach of implied warranties, and negligence against STABEN; however, the court granted a motion for summary adjudication that left the negligence cause of action as the only viable claim.

On or about the late 1980's or early 1990's, STABEN was hired by Palacios Construction, Inc. ("PALACIOS"), by way of an oral agreement, to do the following work: 1) apply thoroseal (the alleged waterproofing material); 2) install backdrains inside a gravel pocket; 3) backfill behind the walls; and 4) install the surface drainage devices. The law firm of Bremer & Whyte, and in particular, Matthew Eschenburg and Raymond Meyer represented Palacios.

As part of its action, Plaintiffs alleged that the construction of approximately 26,000 lineal feet (approximately 5 miles)was not done in conformance with the plans and specifications and the applicable industry standards because the backdrains behind the retaining walls were installed too high, the application of the alleged waterproofing material was not installed in conformance with the manufacturer's recommendations, and surface drainage devices (i.e., v-ditches) were not properly installed along the top of all of the retaining walls.

Plaintiffs alleged that the failure to properly apply the waterproofing behind the retaining walls allowed water to pass through, along with sulfates from the soils immediately adjacent to the walls, which in turn cause deterioration of the face of the walls. Furthermore, Plaintiffs also claimed that the improper installation of the backdrains allowed excess water to pass through the open head joints at the bottom of the retaining walls that caused soggy and boggy conditions in the front of the walls that was a nuisance to the homeowners. Plaintiffs alleged that both of these conditions, in time, could potentially affect the structural integrity of the retaining walls.

Plaintiffs were able to reach settlements with all of the parties, including a sliding-scale recovery with Palacios. Plaintiffs' original cost of repair for the repair of the retaining walls was approximately $23 million; however, prior to trial, plaintiffs reduced their cost of repair estimate to approximately $12 million.

As a result of a number of mediation sessions before mediator, Ross Hart, Plaintiffs reduced their settlement demand to STABEN to approximately $1.5 million. In turn, Staben offered approximately $200,000 to settle all claims against it, including the equitable indemnity claims being pursued by Palacios, but Staben's settlement offer was not accepted. As a result, Staben issued Offers to Compromise, pursuant to Code of Civil Procedure section 998, to each of the 11 homeowner plaintiffs for $5,000, to the HOA for $205,000, and to Palacios for $20,000. Six (6) homeowner plaintiffs accepted the Offers to Compromise, while the remaining five (5) homeowner plaintiffs assigned their rights to the HOA and issued dismissals with prejudice regarding their claims against STABEN. The HOA and Palacios allowed their respective offers to lapse.

At the start of trial, Palacios filed a motion to have its cross-complaint severed, and since the parties did not oppose the motion the court granted the motion. Thus, the trial proceeded only between the HOA and STABEN.

During the course of the trial numerous settlement discussions ensued whereby STABEN increased its settlement offer; however, the HOA and Palacios summarily rejected all of the settlement offers.

After three-and-a-half weeks of trial before a jury and the presentation of the HOA's case, which included testimony from Mr. Ron Palacios, Mr. Kelley Roberts (waterproofing expert), Mr. Kevin Keegan (civil engineering expert), Mr. Mohammad Joolazadeh (geotechnical expert), Mr. Jack Neal (cost estimating expert), Mr. Neil Thaulow (expert in chemistry and petrography), and the defendant, Mr. Tom Staben, STABEN's counsel moved for non-suit against plaintiff's claims on the grounds that no evidence had been presented that STABEN had failed the scope of work. The court issued a tentative decision granting STABEN's motion on April 6, 2004, which was placed on the record on April 7, 2004, after the court dismissed the jury.

Prior to trial the action was deemed to be a long-cause matter and therefore it was transferred from the Honorable Bert Glennon at the Van Nuys Superior Court to department 4 of the Los Angeles Superior Court, located at 111 N. Hill St., Los Angeles, California, where the Honorable Joseph R. Kalin (Ret.) was sitting on assignment.