Costs mounting in mold lawsuit

There was nothing but dirt on the spot in the Ocean Heights subdivision in Newport Coast where Michael Sarver asked Margi Quick Sarver to marry him a decade ago.

The couple paid about $1.8 million and spent about another $500,000 in upgrades for their Italian-inspired Ocean Heights home on the spot with marble floors, vaulted ceilings and several fireplaces in 2000. Bedrooms on the upper floor of the two-story home open up onto a large, stone-paved patio overlooking the Pacific Ocean.

“You could see all the way to Catalina. It seemed like the perfect spot and we thought this would be a place where we wanted to retire,” Margi Quick Sarver said. “We’re looking at having to rebuild now in our 50s.”

The couple claim that the cracked, stucco walls of their 5,400-square-foot dream-home are now full of toxic mold that gives them headaches and nosebleeds.

The Sarvers and 16 other homeowners, including prominent Newport Beach residents such as sports agent Leigh Steinberg and plastic surgeon Milind Ambe, are suing luxury home builder Taylor Woodrow Homes, now Taylor Morrison Homes, for negligence and breach of contract, among other claims.

The homeowners allege that their multimillion-dollar houses need repairs that could cost in excess of $1 million because of leaky walls and roofs that were never properly fixed. Now the homes are petri dishes for toxic mold, the Sarvers and other homeowners contend.

The lawsuit has dragged on four years, with legal costs exceeding $200,000 a homeowner in some cases. A few Ocean Heights residents have dropped out of the suit since its 2005 start because of bankruptcy or divorce, Margi Quick Sarver said. At one point, legal fees in the case mounted $10,000 a month per homeowner.

Under California law, the homeowners can’t ask to recover the cost of their legal fees in the construction defect case.

The Sarvers claim that it will cost more than $2 million to repair the water damage and get rid of the mold in their home.

The case is slated to go to trial March 30, but Orange County Superior Court Judge Gail Andler has said there is no courtroom in Orange County big enough to house all the attorneys involved.

There are 37 different law firms involved in the suit representing numerous construction contractors, insurance and building materials companies. The judge has said the trial may have to be moved to a gymnasium to house all of the attorneys and parties involved.

The homeowners now allege fraud on the part of Taylor Woodrow Homes in a new complaint filed in February in Orange County Superior Court. In the complaint, homeowners allege that Taylor Woodrow Homes knew the houses were shoddily constructed, but instructed workers to make only minor repairs, which didn’t fix the underlying problems.

“They would goop it up,” Michael Sarver said. “It would rain, they would come out and say, ‘It’s fixed.’ Then it would rain again and it would leak.”

The spacious living room of the Sarver home was covered with plastic drop cloths last week. A large tub of stagnate, yellow water sat in one corner of the room, underneath a large, stained hole in the ceiling — leftovers from the last rainstorms that hit the area a few weeks ago.

The couple have stopped using some rooms in their home entirely after an environmental specialist said toxic mold in the walls was hazardous to their health.

The Sarvers’ spacious, second-floor patio with panoramic views is warped and full of cracks.

Michael Sarver claims that he can’t use his wood-paneled home office on the ground floor of the home because mold in the walls gives him nosebleeds.

In sworn depositions, contractors claim that Taylor Woodrow Homes knew homes in Ocean Heights had structural problems that cause leaky roofs and walls.

Contractors were instructed to patch up the leaky homes instead of addressing the structural issues the homes had, according to excerpts from sworn depositions included in the homeowners’ most recent complaint.

“It’s my understanding that we told them [Taylor Woodrow Homes] this is ridiculous. It’s like putting, you know, a Band-Aid on a broken window. And they said do it anyway,” John Ginger, a masonry contractor for Taylor Woodrow Homes testified in a sworn deposition.

The homeowners claim problems with leaky roofs, and cracked stucco began not long after they moved in. The homes were built between 1999 and 2000.

Ocean Heights resident Wen Lee began putting fliers about the leaky homes in mailboxes around the neighborhood in 2005, when he noticed other homes in the Ocean Heights neighborhood with the same floor plan as his house were having similar problems with leaky roofs and walls.

The residents quickly organized and filed a lawsuit.

“Nobody knew each other in the neighborhood at first, so we didn’t know other people were having these problem,” Margi Quick Sarver said.

Lee moved out of his home in 2005 when his adult son developed a rash that covered his entire leg. Lee says the rash came from the toxic mold that was growing in the walls of his home.

“I saw the rash and I said, ‘This house isn’t worth our health,’” Lee said. “The entire house was mold — all four walls.”

Lee has spent more than $2 million to have his $2.8-million home stripped down to the studs and rebuilt after finding toxic mold in the walls. After three years of construction, Lee just moved back in late last year.

Taylor Woodrow Homes merged with British home builder George Wimpey in 2007 and eventually changed its name to Taylor Morrison Homes.

Calls to attorney Andrew Ulich, who represents Taylor Morrison Homes in the lawsuit, were not immediately returned Friday and Tuesday. A request for a comment from a public relations firm that represents Taylor Morrison was not returned by 5 p.m. Tuesday.

“All we want is the money it would take to repair our home and we would walk away,” Michael Sarver said.

Reporter BRIANNA BAILEY may be reached at (714) 966-4625 or at brianna.bailey@latimes.com.