$7.3 Million Awarded to Downtown Los Angeles Arts District's Barker Block Homeowners Association

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Nov 08, 2016, 01:45 ET

LOS ANGELES, Nov. 8, 2016 /PRNewswire/ -- The Miller Law Firm reached a $7,300,000 settlement for the Barker Block Homeowners Association to help correct common area building defects at the live/work loft community, originally converted and sold by The KOR Group ("KOR") and CityView.

This is believed to be the largest single settlement against KOR for construction defects on one of its many high profile residential projects in California.

"These proceeds will immediately go to reconstructing and replacing all of the building systems that were compromised by the shoddy construction practices of KOR and return the community to its well-earned reputation," states the Board of Directors of the Barker Block Homeowners Association.

This 310-unit loft condominium project at 510/530 S. Hewitt St. and 527 Molino St. in the Arts District of Los Angeles, was a former furniture manufacturing factory that was acquired in 2004 by KOR.

KOR designed, built, renovated and marketed "this discreetly high profile landmark" with the investment backing of Henry Cisneros' CityView. KOR currently advertises Barker Block on its website as a "cutting edge" and "one of a kind live/work lofts" whose "experienced leadership, celebrities, artists, and style luminaries were drawn to the project, purchasing units and effectively selling out Phase One."

According to Thomas E. Miller, an attorney with 43 years of construction defect experience, "Los Angeles' popular Adaptive Reuse Ordinance brought numerous LA landmark buildings back to life. Like any era where there is a building boom to satisfy consumer housing demands, especially in high profile neighborhoods like the Arts District, building deficiencies naturally arise due to the lack of proper oversight, a shortage of trained workers, and the sheer speed of design and construction to market and sell the units."

Two phases were sold under what is called "The Hewitt Project" with 242 units, and "The Molino Project" with 68 units, all located in six industrial buildings with a roof-top pool, spa, fitness center, fireplace, viewing area and other stylized amenities.

While KOR further boasts that they "exceeded revenue pro forma goals by 40% through the process of devising a game-changing, strategic sales and marketing program that delivered multiple offers on every single home," building defects almost immediately appeared and the Association faced daily emergency repairs. In 2014, just as the last few units were selling, Barker Block's Board of Directors, recognizing their fiduciary duties to timely investigate how the building was performing, turned to The Miller Law Firm for help. Independent forensic experts were brought in to evaluate the buildings that were suffering from plumbing shut-downs, window leaks, roof leaks, pool deck delaminating and Cal/OSHA violations, which led to the Board putting the builder on formal notice under the "SB 800 Process" in April of 2014.

The Board invited the builders to participate in inspections, testing and emergency repairs and, after several months of negotiations, filed a lawsuit when the builder made no offer to repair the issues. The builder only fought back forcing a vote of the owners to approve the lawsuit, trying to sway the resolve of the HOA Board to pursue the claims to recover millions of dollars to repair the defects.

A combination of three insurance "WRAP" policies responded to pay out this partial settlement of $7.3 Million, including Gemini Insurance Company, Insurance Company of the State of Pennsylvania, and Ironshore Specialty Insurance Company. The Association is still pursuing claims against four other defendants, including the project architect Nakada & Associates, plumbing manufacturer Victaulic Company, mechanical engineers Spec Group Inc. dba Spec Engineering and KMA Consulting. Each of these entities is also insured for the risk they undertook during the design and construction phases.

Russell Roney, President of the Board of Directors of the Barker Block Homeowners Association recognizes today, "If we did not pursue these funds, and accepted the builder's appalling position to specially assess ourselves, all owners would have faced tens of thousands of dollars each to pay for these repairs. In turn, we accepted the experts' findings and pursued the necessary recovery against the developer group to return the development to Barker Block's reputation as the premier live/work condominium residence in the burgeoning Arts District."

Thomas E. Miller, Rachel M. Miller & Matthew T. Miller of The Miller Law Firm (www.ConstructionDefects.com) are the co-authors of, "Home and Condo Defects: A Consumer Guide to Faulty Construction," (Seven Locks Press, 2012), available online at www.amazon.com. Celebrating 40 years, The Miller Law Firm was awarded the National Litigator Award by the Trial Lawyers Board of Regents for the second consecutive year. This award honors only the top 1% of attorneys in the nation and based strictly on tangible verdict & settlement dollar achievement.

Media Contact: Rachel Miller
(800) 403-3332
[email protected]

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SOURCE The Miller Law Firm