Homeowners ordered to pay almost half of a million dollars in construction defect trial

Landmark Judgment: Homeowners Must Pay $26,000 per Home for Defendant's Trial Costs
August 11, 2010

The owners of 19 Mission Viejo homes recently were ordered by an Orange County judge to pay $493,903.80 in defendant court costs after the defendant prevailed in a construction defect lawsuit.

The plaintiff homeowners, who filed the lawsuit four years ago claiming that the concrete foundations of their homes were damaged by sulfates in the soil, now must pay $25,994.94 per home.

Judge David C. Velasquez, of the Orange County Superior Court, ruled earlier this year that the plaintiffs, who asked for more than $5 million in damages (roughly $265,000 per home), failed to demonstrate that the defendant concrete suppliers had supplied defective concrete or that the concrete had subsequently been damaged by external sulfate attack.

He subsequently ruled that the defendant National Ready Mixed Services Co. could recover a portion of its expenses from the plaintiffs. In his concluding remarks in yesterday's ruling, Judge Velasquez said the costs are "appropriate" and the award to the defendant is "reasonable."

"At trial, plaintiffs relied in large part on scientific evidence, the general acceptance of which was highly contestable," the judge wrote. And because "the scientific evidence necessary for each side to produce in the case is very expensive ... there is the great temptation by plaintiffs to use the cost of litigation to bludgeon a settlement out of a defendant."

The judge also decried the tactics of the plaintiffs' attorney, saying: "Increasing the settlement demand at the June 28, 2004, settlement conference only guaranteed the case would never settle."

While the ruling in this case — Castron, et al. v. Fieldstone, et al. — sets no judicial precedent, it illustrates the downside risk involved in filing such a lawsuit.

"This judgment drives home the risk a homeowner takes when initiating litigation based on 'junk science,'" said William Ingalsbe, Esq., attorney for defendant National Ready Mix Services Co. "In addition, these homeowners may now be required by law to disclose the lawsuit and the damage asserted by their attorneys, should they sell their homes."

Lawsuits based on similar allegations of sulfate attack are not uncommon in California, but this judgment is rare. Most of the lawsuits filed in recent years have settled out of court and the plaintiffs received settlements from the defendants. However, this lawsuit not only went to trial, the defendant prevailed.

This is only the second known instance in California of plaintiffs being ordered to pay a defendant's court costs in a defect litigation trial in the past 15 years. The concrete industry sees this as the first step toward ending what it considers to be years of frivolous litigation.

The defendants submitted to the court a cost bill totalling $2.2 million, including roughly $2 million for expert witness fees and related costs.

The lawsuit centered on plaintiff testimony framed around tests that are not based on accepted scientific methods for the forensic examination of concrete.

"In a past lawsuit, the plaintiffs' expert witnesses, using these inappropriate methods of testing the concrete, were not able to tell the difference between a concrete sample and a Tums tablet, nor could they tell the difference between a diamond and a lump of coal," said Geoffrey Hichborn, Sr., president and CEO of Hichborn Consulting Group in Orange, Calif.

Hichborn, an expert witness for the defendant, testified that each of the techniques used to conclude sulfate attack by the plaintiffs' experts was a subjective and non-standard method used simply to justify their predetermined and biased opinions.

These techniques are at the heart of a string of lawsuits dating from the mid-1990s. The question is whether concrete foundations have been damaged by sulfates in the soil, and, if so, whether concrete manufacturers should have known of the risk of sulfate damage and taken steps to prevent it.

Judge Velasquez heard more than 40 days of testimony in the first phase of the trial and excluded from the second phase five kinds of tests submitted as evidence by the plaintiffs' experts because they failed to satisfy generally accepted scientific standards. That is, the tests were considered "junk science." The entire trial took more than ten months and involved hundreds of hours of testimony and associated expenses.

In his ruling, the judge said the plaintiffs "did not carry their burden to prove ... that the concrete supplied in the construction of their homes ... was defective," nor did the plaintiffs prove "that National was negligent in the designing or manufacturing of the concrete."

In 2001, in a case with similar allegations of "sulfate damage" — Spitz v. YL Brighton Associates I — Orange County Superior Court Judge Stuart T. Waldrip disallowed these same testing methods, as well as other tests that were not used in the Castron case.

However, that does not preclude plaintiffs' attorneys from attempting to use the same methods in new cases, which are now being contested in San Diego, California, and Scottsdale, Arizona

         
 

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