Settlement reached in construction defect case

Grace Leong

Tuesday, Oct. 30, 2001 | 9:49 a.m.

A judge on Monday approved an $8.6 million settlement of a construction defect lawsuit that pitted Las Vegas condominium owners against contractor Picerne Development Corp. and developers KCN Ltd. Partnership and KCN Nevada Inc.

Opulence Homeowners Association sued Picerne, the KCN companies and 24 subcontractors in 1999, alleging its 396-unit condominium complex at Harmon Avenue and Lindell Road contained numerous defects. The alleged defects include inadequate or improperly designed and constructed roofs, chimneys, exterior and interior walls, balcony decks, floors, windows, stairs, electrical systems, landscaping and drainage problems.

Clark County District Judge Mark Denton said in a ruling Monday the $8.6 million settlement is a "fair, adequate and reasonable settlement" that was reached in "good faith" and that the monies are to be used to make repairs at the property.

Opulence attorney William Coulthard said Opulence has dropped its claims against the defendants except for one, landscaping architect Richard Emick & Associates doing business as E-Group. E-Group, which was not part of the settlement, was accused by Opulence of causing drainage problems at the property.

Coulthard said homeowners are pleased with the settlement and noted it was reached after eight days of jury selection instead of a three to five month jury trial that was initially expected.

While Opulence initially estimated its repair costs could reach $15.3 million, Coulthard said the homeowners agreed to the $8.6 million settlement to avoid the costs and expenses of continuing with a three to five month jury trial and because they want repairs to begin as soon as possible.

"The only way to get a $15.3 million award is to get the jury to award it and there are some uncertainties over that," he said. "And even if you hit that type of jury award, you'll likely be faced with an appeal by the developers and that's another two to three years of litigation."

The settlement includes $3 million, or 35 percent of the award, for the plaintiffs' attorneys fees.

Attorneys for Picerne and KCN said the settlement was fair, although both companies had significantly lower repair cost estimates. James Pengilly, Picerne's attorney, said it was looking at $3.1 million in repair costs. KCN's estimated repair costs were around $4.9 million.

James Randall, KCN's attorney, said the settlement is "a lot more than (KCN) wanted to pay," but acknowledged "it was a settlement that everyone could live with."

"There are risks that go with taking the case to trial. Nevada statutes allow for reasonable attorney fees and costs to be awarded to Opulence if the case went to jury trial and this could be another few million dollars," he said.