CONDO BUILDER SETTLES LAWSUIT.

Byline: Cecilia Chan Daily News Staff Writer

Condominium and town house owners at Shadow Ridge at Oak Park will receive $8.4 million to settle a lawsuit claiming construction was defective in the 440 homes.

The settlement will cover damages, attorney fees and repairs the homeowners must make in the 9-year-old development on Indian Oak Lane.

``The case is settled,'' said attorney Richard Glucksman, who represents Regis Construction Co., which built the complex. ``The attorneys agreed there's no admission of any liability, and we don't admit any wrongdoing or defects.

``The settlement was driven by the excessive cost of litigation.''

Thomas E. Miller, the Newport Beach attorney who represents the homeowners, sued Regis and Aetna Life Insurance Co. in May 1997, after he said he put them on notice and received no offer for a settlement.

Aetna was the financial partner in the construction of the condominiums. The company's attorney, Elaine Fresch, could not be reached for comment.

The lawsuit will be dismissed because of the settlement agreement, which is expected to be filed today in Orange County.

In the lawsuit, homeowners claimed decks leaked, water intruded into homes and there were plumbing and electrical problems.

``All of those buildings in that project showed signs of defects - leaks, that sort of thing,'' Miller said.

The lawsuit asked for more than $5 million, rather than a specific amount, because the homeowners did not initially know the full extent of defects and repair costs, Miller said.

He said directors of the homeowners association realized there were construction problems about three years ago, after they took control from the developers.

``They started to realize they were paying a lot of money out for doing these kinds of repairs, and they took a hard look at it and saw all these defects,'' Miller said.

``An interesting thing - what we found out later - was the developers knew about these problems,'' he said. ``They had filed their own lawsuit against the subcontractors before we got involved, settled the lawsuit without telling us about it and didn't make repairs.''

Glucksman disputed that explanation of events.

``That is a misleading and incorrect statement,'' he said. ``The earlier lawsuit did occur, but repairs were done.''

Gluckman said Regis builders do quality work and have good standing in the construction industry.

``They stand behind their product and take construction very seriously,'' he said.

Gerald Kline, president of the homeowners association, said the value of the homes range from $100,000 to $200,000.

Kline, who has lived there for seven years, said water intrusion was the main problem for homeowners.

``If there were a lot of wind and rain, the water would come through the window, and sometimes we got a lot of ponding of water on the decks and breezeways, which led to dry rot and seepage.

``Structurally there is nothing wrong with the place,'' he said. ``We came through the (Northridge) Earthquake beautifully.''

Kline said homeowners expect to receive the money 30 to 60 days after the agreement is recorded by the court.

``The next step is to get an architect and engineer to draw up specifications for repairs and go out to bid,'' he said. ``We believe the settlement is adequate, allowing us to correct the defects, address deferred maintenance issues and bring the aesthetics to a level appropriate to the Oak Park community.''