Portisol Class Action Suit

S

samuroo

New member
Anybody have any info on a class action lawsuit against Cal Pac for their Portisol development in Woodbury?
 
it's not really any specific issue. these construction defect plaintiff's firm, namely Milstein Adelman, send mass letters out to new construction homeowners around year 6-7 (10 years statute of limitations for latent defects) in hopes that homeowners will join in a class action lawsuit against the builder.  The plaintiff's firm tells the homeowners that joining the lawsuit doesn't cost them anything and the attorneys make it seem like the homeowners will recover a huge sum of money.  What they don't disclose to the homeowners is what is involved in a construction defect lawsuit.  The homeowners file suit against CalPac.  CalPac in turn cross-complains against each and every sub that is involved.  This can be between 20-25 different subs.  Once the lawsuit gets underway,
"discovery" commences.  This means that the homeowners must open their homes to CalPac's attorney, experts as well as each sub's attorney and experts to come into their home for visual inspection.  Some of the homeowners are also required to open their home to destructive testing.  This means that CalPac and all the subs will have their attorney and experts go to their house and "destruct" their home.  For example, if the homeowner is alleging that their is a leak, the experts get to take out the drywall, remove the window and framing, and do water leak tests.  This can go on for days.  With CalPac and the sub's attorneys and experts, there can be at any given time 50+ people visiting the homes. 

After that, the homeowners will be deposed and the process is long and most result in settlement.  And who gets the bulk of the money? The attorney, not the homeowners.  Plus, when the homeowner is involved in a construction defect lawsuit, they must disclose that, thus may affect the value of the home as well as the subsequent buyer having issues with homeowner's insurance. 

So think twice before joining these construction defect class action suits.  I would have the builder come out and fix whatever issue you have first and if they don't, then maybe considering joining.
 
kalbi said:
it's not really any specific issue. these construction defect plaintiff's firm, namely Milstein Adelman, send mass letters out to new construction homeowners around year 6-7 (10 years statute of limitations for latent defects) in hopes that homeowners will join in a class action lawsuit against the builder.  The plaintiff's firm tells the homeowners that joining the lawsuit doesn't cost them anything and the attorneys make it seem like the homeowners will recover a huge sum of money.  What they don't disclose to the homeowners is what is involved in a construction defect lawsuit.  The homeowners file suit against CalPac.  CalPac in turn cross-complains against each and every sub that is involved.  This can be between 20-25 different subs.  Once the lawsuit gets underway,
"discovery" commences.  This means that the homeowners must open their homes to CalPac's attorney, experts as well as each sub's attorney and experts to come into their home for visual inspection.  Some of the homeowners are also required to open their home to destructive testing.  This means that CalPac and all the subs will have their attorney and experts go to their house and "destruct" their home.  For example, if the homeowner is alleging that their is a leak, the experts get to take out the drywall, remove the window and framing, and do water leak tests.  This can go on for days.  With CalPac and the sub's attorneys and experts, there can be at any given time 50+ people visiting the homes. 

After that, the homeowners will be deposed and the process is long and most result in settlement.  And who gets the bulk of the money? The attorney, not the homeowners.  Plus, when the homeowner is involved in a construction defect lawsuit, they must disclose that, thus may affect the value of the home as well as the subsequent buyer having issues with homeowner's insurance. 

So think twice before joining these construction defect class action suits.  I would have the builder come out and fix whatever issue you have first and if they don't, then maybe considering joining.
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Do you happen to be in the legal industry? Because this explanation is spot-on! At the end of the day, the builder will settle with the plaintiffs' attorney for, a sum of money....let's say $10,000.00/home (can be more or less depending on a number of factors, including, but not limited to, how strong the plaintiffs' case is, how bad the construction defects are, how aggressive the lawyers are, etc.). The plaintiffs' attorney then takes a cut of that settlement (let's say 30% although this depends on the contract that the homeowners have signed). The homeowner gets the remaining balance of $7,000 (sometimes more, sometimes less), and is that amount really sufficient to fix the leaky roof or window(s) with money left over to fix the stucco cracks and damaged flooring?

Also, remember that the lawsuit can take years to resolve, as the Developer exercises its legal options (filing motions to enforce the limited warranty, the provisions of Civil Code 895, suing the subs, etc.). In the meantime, you continue to live in a home with a leaking roof/window - your HOA and your builder won't do anything since the association is under litigation. Also, on some occasions, once you've been a party to a construction defect lawsuit, the builder will then advise its maintenance and warranty department to not perform any maintenance on your property, since, at the conclusion of the litigation, you will be required to sign a settlement agreement that releases the builder from any liability and obligation to you.

In the past, I've heard of anecdotes from homeowners who have stated that they simply wanted the issues fixed, but that developers refused to do so. This resulted in numerous construction defect lawsuits over the years. As developers' mindset have evolved (as insurance coverage has become more expensive, as the laws have evolved, etc.), many of them realize that it is ultimately cheaper to repair the homes, even if they are out of the 1-year warranty, than to litigate for 4-7 years.

However, don't let this discourage anyone from exercising their legal rights. There are obviously 2 sides to the coin, and not every plaintiffs' firm is the same, just as not all builders are the same. There are builders who do shoddy work and then refuse to stand by their work, and there are builders who will do the right thing, even if it takes some pushing on your part. Just make sure you do your homework before signing onto these types of lawsuits.
 
the original homeowner can sell the home during a pending construction defect lawsuit but you are required to diclose that to the potential buyer.  the potential buyer will have to disclose to its lender and this may affect financing until the defects are cured.
 
samuroo said:
What happens if the original owners sell the house?
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I'm not sure what you are asking, but here are my thoughts based on what I think you might be inquiring about:

(1) if you do not sign up for the lawsuit and then sell the home, the new homeowner can still join the lawsuit.

(2) if you are not the original owner, you can still join the lawsuit (so long as the former owner was not already involved in a prior construction defect lawsuit).

(3) if you sign up for the lawsuit but, before it is resolved, you sell the home, you probably have to disclose it to the new buyer that you are a party to the action. You can also assign your rights to the action to the new homeowner to pursue the action.

You can assign all of your rights (meaning the new owner collects 100% of any proceeds from any settlement) or you can assign a portion of your rights (I have seen situations where the former and new owners agree to a split in the recovery).

If you do not assign your rights to the new homeowner, the builder will seek to dismiss the home from the action.

(3) if you sell the home after settling the case, you will be required to disclose the existence and resolution of the lawsuit. The extent of your disclosure may depend on the terms of the settlement agreement.
 
My parents signed up for one of the construction defect lawsuits in the early 90s.  They got a 30k payout without having to fix anything since their home wasn't affected.  I feel the upside to joining is much higher than any potential downside..
 
woodburyowner said:
My parents signed up for one of the construction defect lawsuits in the early 90s.  They got a 30k payout without having to fix anything since their home wasn't affected.  I feel the upside to joining is much higher than any potential downside..
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A $30K payout may have been normal in the 90's, but in today's construction defect lawsuit environment (subcontractors who have gone out of business, subcontractors with no insurance, etc.), it would be surprising if you get 1/3 of that recovery.
 
JL-CG said:
woodburyowner said:
My parents signed up for one of the construction defect lawsuits in the early 90s.  They got a 30k payout without having to fix anything since their home wasn't affected.  I feel the upside to joining is much higher than any potential downside..
Click to expand...

A $30K payout may have been normal in the 90's, but in today's construction defect lawsuit environment (subcontractors who have gone out of business, subcontractors with no insurance, etc.), it would be surprising if you get 1/3 of that recovery.
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have to agree. the average payout i've seen is $10K or less per homeowner. The highest settlement I saw was about $113K for one homeowner. But he had some special expensive, italian marble flooring that had cracks all over due to foundation issues. Rare exception.
 
Good luck in purchasing a home with "pending litigation" in a financed deal.
It is veeeeery, veeeeeeery hard to find a reputable lender that will touch it.

-SG
 
That law firm trolled the condo development I lived in during the 1990's. Throw a little chum in the water and see the sharks come.

Pending litigation for Condo projects - attached AND detached - are problematic. With an attached property no matter the down payment you're going to have an issue. Generally with 25% down most detached condo's don't have an issue. If the property is a standard SFD in an area with an HOA, financing won't often be an issue.

An appraiser familiar with the are might comment on pending litigation in the community. If that happens, then even an SFD might have problems getting funded unless there is a significant amount of cash put down.  Reputable lenders will fund in these projects, but don't expect Provident Funding type rates.

That $30k settlement if you don't have any issues with the property might not taste as sweet as the $60k loss in value because of the stigma communities get when there is construction defect litigation. Selling homes in areas that are known to have construction defects - real, or imagined due to litigation, can be a problem. Don't read me wrong here - there are some pretty terrible builders and low grade subcontractors making things worse for home owners. Litigation in these instances is appropriate. It's not appropriate however in every case as the attorney class tends to conjure up more problems than there really are.

 
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