Terraces Lawsuit Settled

Donna Gray
Post Independent Staff

April 21, 2005

Terraces Homeowners Association in Glenwood Springs settled a lawsuit against developer Jay Harkins, construction companies and engineers for $12 million out of court Tuesday.

The River Terraces homeowners had asked for $22 million in damages.

“About 90 percent of these (kinds of) cases settle out of court,” said Bill Knapp, of Greenwood Village, who represented CTL/Thompson, a geotechnical firm in Glenwood Springs that evaluated the soils at the condominiums.

The nine defendants in the case will collectively pay the settlement, with Harkins paying almost half, Knapp said. That money will pay for fixing the buildings. A Broomfield company, Hayward Baker, specializes in compaction grouting, in which a cement-like substance is injected into the soil around the buildings. The grouting compacts the soils and stabilizes the foundations, Knapp said. “Then they can re-level the buildings.”

Knapp said the share each defendant would pay of the settlement depended on how much individual insurance companies covering the defendants were willing to pay.

The defendants also worked out “who is the primary target” of the suit- Harkins, Knapp said. Also paying “a substantial sum” is the general contractor, Marcal Construction, he said.

The smallest amount was pay by York Engineering because it had the smallest insurance policy.

Attorney Scott Sullan, who represented the Terraces Homeowners Association, said he was happy about the outcome.

“I’m really pleased for the association. There are going to be really significant issues dealt with and they’ll be able to move on … and put the past behind them,” he said.

Sullan is a Greenwood Village attorney who has represented thousands of homeowners in lawsuits against builders.

The association filed a lawsuit in April 2003 after residents complained about cracked walls, doors that wouldn’t close and other problems. City engineers found the buildings were sinking into the steep hillside on Midland Avenue and 27^th Street and had significant structural faults. The city also considered condemning some of the worst buildings and evicting residents, but enough repairs were completed in 2003 that the city withdrew the order.

Sullan and the homeowners hurried to file the suit before House Bill 1161 became laws so as not to be held to its restrictions. The bill includes a $250,000 cap on pain and suffering homeowners can claim against builders. HB 1161 was sponsored by former Glenwood Springs Rep. Gregg Rippy. Sullan feared the limits would have kept the homeowners from seeking full compensation for losses associated with the condos’ problems.

“This case was the last one we filed before the bill (passed),” he said.

Earlier in the nine-day trial, Harkins admitted construction of the 12-building condominium complex was faulty.

“We’re very thankful the matter is resolved,” said Dan Fowler, of Denver, who represented Terraces Group LLC and Harkins. “Terraces Group regrets that (it) wound up in litigation and the imposition it amounted to for the homeowners. … It’s too bad it didn’t get resolved two years ago” when Terraces offered to make repairs, he said.

Source: Glenwood Springs Post Independent, April 21, 2005