Water Intrusion Damage Claim Settles for $1.6 Million

A water intrusion damage claim, brought on behalf of a luxury San Diego condominium complex, has been settled during mediation for $1,607,500.

The Seven on Anchorage luxury condominium complex in San Diego was completed in early 2007 and consisted of seven spacious three-story townhouses built on a plot of 21,000 square feet. Unfortunately, the subterranean garage was constructed with a defective fire sprinkler system that leaked and – due to inadequate waterproofing in the underground parking area – caused water intrusion damage throughout the structure.

Due to the nature of the construction defect, the extent of the damage was not realized for several years. Once identified and inspected, the cost of repairing the damage and installing effective waterproofing against future water intrusion was considerable. The Homeowners Association sought legal advice and – as property damage had already occurred – made a water intrusion damage claim against the developer of the complex, Anchorage Lane II, LLC.

Lawyers acting on behalf of the Homeowners Association filed the water intrusion damage claim at the San Diego County Superior Court in November 2014. In their filing, they argued that Anchorage Lane II LLC was responsible for the defective fire sprinkler and underground waterproofing system because the developer had hired the subcontractors who had fitted the faulty system and also supervised their work.

The lawyers also alleged that – due to the nature of the construction defect – Anchorage Lane II LLC was in breach of Section 896 of the California Civil Code and thus negligent, in breach of implied warranty and liable to the Homeowners Association under the theory of strict liability. After several years of dispositions and mediation, the developer admitted liability and agreed to settle the water intrusion damage claim for $1,607,500.

Please note: Claims for construction defects in California are subject to various regulations depending on the nature of the defect, the age of the property and how soon after “substantial completion” the defect is identified. If you believe you are entitled to compensation for a construction defect in California, you are advised to seek professional legal advice at the first practical opportunity.