Subcontractors Pay More Than $14 Million to El Escorial Owners Association – News Release

Subcontractors pay more than $14 Million to El Escorial Owners’ Association

SANTA BARBARA, CALIF. — After an 11-month trial, a Santa Barbara judge ordered subcontractors to pay $3.7 million to a condominium association because of shoddy workmanship to its Santa Barbara-area complex (El Escorial Owners’ Association v. Santa Barbara Villas, et al., No. 01003147, Cal. Super., Santa Barbara Co., Dec. 22, 2003). Previously, a $10.4 million settlement was reached with other subcontractors regarding the conversion of apartment and hotel units that now make up El Escorial Villas. Cappello & Noël LLP represented the El Escorial Owners’ Association in both actions in which more than 40 defendants were involved.

During the early 1990s, real estate developer Investec renovated four residential and hotel buildings built in 1970. Investec hired subcontractors for the renovation project. Units in the newly named El Escorial Villas complex were first sold in 1991. The El Escorial Owners’ Association alleged that nearly every subcontractor’s work fell below the standard of care, something they claimed Investec encouraged to reduce costs and maximize profits. Among the charges were plumbers failing to replace corroded waste pipes, which after the sale of the condominiums, leaked raw sewage into the walls. The association claimed improperly waterproofed buildings allowed moisture to enter wall cavities, causing mold and dry rot in many of the 261 condominiums as well as in common areas that the homeowners’ association was required to maintain.

Cappello & Noël used videotaped site inspections, destructive testing and extensive computer animation in presenting its case.

© 2003 Cappello & Noël. All rights reserved.

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