Developers On Trial Over Sinking Condos

By David Frey
Aspen Daily News Correspondent

GLENWOOD SPRINGS - A developer spent hours on the witness stand on Tuesday admitting to faulty construction on a condominium complex that city building officials have said is sinking into the hillside.

Jay Harkins, of Aspen, admitted to bad work in the Riverview Terraces Condominiums project, and said contractors failed to follow developers’ building specifications. Harkins also said prospective buyers weren’t properly notified that the complex sits in a geologic hazard zone or that the condominiums were suffering cracks and other problems as a result of the foundations settling.

A complicated lawsuit over the Terraces complex in south Glenwood Springs is playing out in front of six jurors and two alternates in a 15-day trial in Garfield County District Court.

The Riverview Terraces Homeowners Association is seeking over $22 million in damages from a long list of defendants, including Harkins, who was a project manager and architect for developers The Terrace Group.

The homeowners association filed the lawsuit in April 2003 after complaints of cracked walls, and doors that wouldn’t close, revealed the buildings were sinking into the ground. Engineers investigating the problems for the city found at least half the buildings were sinking and had structural problems as a result.

Some residents faced eviction before the homeowners association put together a last-minute repair plan. After development defaulted on their loan, Mesa National Bank bought 24 or 25 units: the last was transferred to Harkins.

The lawsuit asks the defendants to repair the damage and reimburse residents for costs and annoyance, plus triple damages and attorneys fees.

The six women and two men who make up the jurors and alternates are left to sort out a complex case in 15 days of hearings stretched over a month.

The homeowners association is suing eight defendants, from the developers to contractors to engineers, whom they say were responsible for their damaged homes. The defendants are pointing fingers at one another, and at four contractors or subcontractors named as third-party defendants.

Eleven attorneys filled the front of the courtroom on Tuesday, surrounded by bookshelves full of notebook binders and about three dozen boxes stuffed with legal documents. Closed circuit TVs on each desk and in front of the jury box let jurors and attorneys follow along as cross-examining attorneys pointed to letters, contracts and studies from the development.

In the trial’s fifth day, Scott Sullan, the homeowners’ attorney, said while the developers have admitted liability for building damages, they haven’t accepted the financial damages being sought. While the jury was absent, Sullan told District Judge Jim Boyd the developers’ acceptance of responsibility “was a ruse and a scam.”

“They intended to pass the buck onto the homeowners’ association and always did,” he said.

Under questioning, Harkins told Sullan much of the work on the project didn’t meet developers’ specifications, including poor sound buffering and weaker support construction. Harkins said buyers didn’t get information about geologic hazards at the site, and that in a letter about problems with the units, a sentence about cracking was omitted, but he denied he asked it to be taken out.

Sullan asked Harkins about a letter to homeowners that seemed to show developers were leaving them with the responsibility for the damage.

“What I said in that letter, what my intent was, was to let the association know that there were issues in front of them and needed to be considered,” Harkins said, “and the best course of action was to move forward with action.”

Attorneys for other contractors sought to show that the developers shaved off costs by using cheaper materials and ignored their recommendations.

Source: Aspen Daily News, Wednesday, April 13, 2005, Page 3