UCI housing suit settled for $11 million

Deirdre Newman

Future residents of a large student-housing complex will no longer

have to put up with plumbing problems, loose shower tiles and dry rot

now that the University of California has won an $11-million

settlement against the defunct construction company that built it.

The lawsuit, filed in March 2000, charged that Diversified Turnkey

Construction’s work on the Arroyo Vista housing complex resulted in

systematic defects.

The settlement, reached Nov. 13 in Orange County Superior Court,

allows the UC system to begin scheduling comprehensive repair work

throughout the 36-building complex.

“We think it’s a great settlement,” said Steve Morrell, university

counsel for the UC system. “This is a very difficult, complicated

case.”

Arroyo Vista opened its doors in early 1994. A year later,

sporadic water-related problems started popping up, Morrell said. It

wasn’t until 2000 that officials realized the defects were affecting

the entire project.

Morrell originally demanded $900,000 in compensation from

Fireman’s Fund, the project’s bonding company. Fireman’s Fund

refused, resulting in the lawsuit.

To bolster their case, UC officials hired consultants to gauge the

scope of the defects. The experts ended up uncovering a host of other

problems that contributed to the soggy state of Arroyo Vista and

ultimately cost the university millions of dollars.

“It seemed like every system that was designed to keep rainwater

out of the building failed,” Morrell said.

So Morrell upped his demand to $17.5 million. While the settlement

won’t provide that much, it will avert a risky trial, Morrell said.

UCI has been performing limited repairs to the housing complex and

will probably wait to schedule intensive work until a time when the

fewest residents will be displaced, Morrell said.

* DEIRDRE NEWMAN covers education. She may be reached at (949)

574-4221 or by e-mail at [email protected].