Jury Faults Newhall Land in Quake Case

After four weeks of deliberation, a Los Angeles County Superior Court jury awarded nearly $8 million Thursday to a group of homeowners and an insurance company who sued a developer alleging that shoddy construction made Santa Clarita homes susceptible to damage in the 1994 Northridge earthquake.

In a 12-0 verdict, the jury found that defects in condominiums constructed by Newhall Land & Farming Co. were brought to the fore by the 1994 earthquake. The jury awarded more than $960,000 to the Franciscan Hill Homeowners Assn. and $6.7 million to State Farm Insurance, which sued the developer to recoup costs they said they accumulated while rebuilding the properties.

The award amounts were more than half of what the plaintiffs originally sought.

“I had hoped for more,” said Myrna Saltzberg, treasurer of the association, whose home had to be rebuilt from the foundation. “But I’m glad we came out with something.”

The homeowners wanted $1.8 million, but attorneys for the association said the award would help pay off a 30-year Small Business Administration loan the association took out for earthquake damage assistance.

State Farm Insurance, which originally sought $11.7 million, looked upon the verdict as “favorable,” according to a company spokesman.

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A Newhall Land spokeswoman said the company was disappointed with the verdict and maintains the earthquake, not faulty construction, is responsible for the damage.

The company further maintains that the area around Franciscan Hill was the most vulnerable to earthquake damage, citing the $30-million damage sustained by the nearby California Institute of the Arts.

“It is clear that the jury thought the earthquake was a contributing factor because they awarded less money,” said company spokeswoman Marlee Lauffer. She said the company plans to appeal.

Juror Tricia Eugenio said that it was difficult for the jury to determine an award amount given the volume of financial documentation it had to wade through, but that she hoped the verdict would send a message to developers.

“Lives were at risk due to shoddy, negligent construction,” said the Valencia resident. “Builders should do their jobs to make sure this doesn’t happen again.”

The Franciscan Hill Homeowners Assn. and State Farm Insurance filed suit against Newhall Land in 1995 claiming that company-built Franciscan Hill Condominiums constructed in 1987 were poorly built, leaving them vulnerable to the 6.7 magnitude earthquake.

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Saltzberg, who owns one of the 71 units in the Franciscan Hill complex, said her condominium was declared unsafe by building inspectors after the earthquake. When the earthquake hit, entire walls shattered and the house felt as though it was “bouncing up and down,” she said.

She later discovered that the house was missing crucial nuts and bolts that would have held it firmly to its foundation. It took two years, eight months and 14 days, she said, before she could return to her rebuilt home. But, she said, her daughter’s condominium about a mile away in Valencia suffered minor damages.

“There’s no doubt in our minds that the quake would not have taken its toll had the defects not been there.”

Many of her neighbors, including some elderly couples, lost their homes to foreclosure because they couldn’t afford to pay their mortgages in addition to relocation fees, she said.

“The developer blames everybody but their own incompetence,” said Kelly G. Richardson, attorney for the plaintiffs. “The jury’s decision has finally ended the stalling and the excuses.”

Times Community News correspondent Jason Song contributed to this story.