Kite Hill residents picket builder

DISPUTE: The Laguna Niguel homeowners, upset that they were not warned about unstable soil, protest at a new tract nearby.

June 14, 1998

By Joseph J. Nelson
The Orange County Register

LAGUNA NIGUEL — A portion of a new hillside housing tract opened Saturday as sign-carrying, chanting protesters issued a warning to prospective homebuyers: Check the soil reports and grading records before opening escrow.

Five Kite Hill homeowners who are suing their developer alleging defective construction and fraud picketed before the entry gates of the builder's nearby Hillcrest Estates project. They complained of cracked walls and shifting earth that have plagued them for years.

"I really wish someone had warned us about soils conditions at Kite Hill before we bought our homes," said protester Joan Leeb.

Leeb, along with her four Chat Drive neighbors, says they found out too late that the hillside on which their homes were built was unstable and reinforced in 1985 before the homes were built.

Now, they say, the hillside isn't holding up. Walls and swimming pools are cracking, concrete pylons are ripping away from divider walls and back yards have dropped up to a foot in some places over the past two years.

The same developer, S&S Construction, is building the Hillcrest homes, priced at $500,000 and up, on land that geotechnical reports indicate is an ancient landslide site.

Christine Herdman, an attorney for S&S Construction, said the developer has responded to the Kite Hill homeowners' complaints and made several repairs to each of the homes.

"It is not our practice to get into lawsuits with our customers, and we have a history of where we have gone out and (performed) repairs on homes after the 10-year statute of limitations ran out," Herdman said.

Herdman added that the developer had offered to install caissons under Roy and Ann Brown's home, which has suffered the most cracking, and to buy the house at fair market value.

The Browns said they declined the offer by S&S to install the caissons after they were told by the developer that a report on a geological inspection done by an S&S contractor wasn't available. Herdman said reports can't always be provided immediately upon request.

"How are you supposed to make a decision of that magnitude when they don't even have a report to provide you?" Roy Brown said.

On the advice of their attorney, Serge Tomassian, the five homeowners hired their own geotechnical expert, David Lee, who drilled a hole 75 feet deep into the back yard of Steve and Sue Guenther's home. Lee concluded that a clay seam 40 feet below the surface was contributing to the slope's instability.

"I'm not saying the hillside could or might slide," Lee said. "I'm saying that there will be a landslide at some point in time in that area."

Herdman disagrees.

"There is agreement that movement exists on the slope," she said, "but there is a fundamental disagreement between our geotechnical experts and the homebuyers' geotechnical experts over the severity of the movement."

Geotechnical experts for S&S Construction were unavailable for comment.

Two years ago, the homeowners sued S&S Construction, alleging construction defects. In April, they amended their case to include fraud, contending the developer was aware of the slope problems and should have warned them.

"My clients want a complete and correct repair that will last," Tomassian said. "We don't want to be reading on the front pages about this hillside collapsing a year from now."

Herdman said all slope instability problems on Chat Drive were corrected by graders before the homes were built. The company had no legal obligation to disclose the area's geological history to homeowners.

"I think it is far-reaching at this point to say that these homes are imperiled," she said. "The conditions of distress vary in each home, and we believe the matter requires further investigation."

The five homes sit side by side on an area of hillside that was determined to be unstable in a 1984 report by Leighton & Associates, a geotechnical consultant hired by the builder. The firm also was the consultant on the Hillcrest Estates project.

The hillside was buttressed, which entails cutting away a portion of the hillside and then recompacting the soil back into the cut for reinforcement.

As drivers stopped to ask the protesters questions and received fliers, others shopped the new homes inside the development.

Hillcrest Estates is showcasing 18 homes this week. A lottery will be conducted, and the winners who are approved for the homes will be announced Saturday. The development ultimately will have 185 homes.

Scott and Samantha Spearman, who came to Hillcrest to shop for homes with their infant daughter, said that they were surprised by the picketing.

"Honestly, it wasn't even on my mind today until I drove in here," Scott Spearman said, referring to the soils reports and ancient landslide areas within the development. "Seeing these picketers at a new development raises a red flag with me, and I'll look more carefully into buying a house up here."

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