Rivergate Lofts loses $1M judgment in lawsuit

Thursday, May 17, 2012 4:11 PM

The developers of a condo project in south Durango were ordered Thursday to pay $1 million to an insurance company that forked over a large sum stemming from design and construction flaws with the development.

The jury verdict ended what has been a three-week civil trial in 6th Judicial District Court resulting from the construction of the Rivergate Lofts Condominium project at 555 Rivergate Lane, which sits above the Animas River across from the Durango Mall.

The lawsuit originally was filed in January 2010 by the Rivergate Lofts homeowners association against contractors and subcontractors for alleged defects, which included cracks in the foundation and other problems.

The lawsuit resulted in several separate claims and counter claims. Most of the disputes were settled out of court, including the dispute involving the homeowners association.

But the developers, RiverGate Loft Partners LLC, went forward with its portion of the lawsuit. The developers accused Genex, the original general contractor, of breech of contract by failing to perform its work free of defects.

Genex denied a breach of contract or that the RiverGate Lofts Partners incurred any damages.

Jurors found that Genex was in breach of its contract, but they awarded the developers $1 – nominal damages to show legal injury but no financial loss.

Bituminous Casualty Corp., the insurance company for Genex, paid $6.9 million to settle all of the homeowners’ claims against its client.

Bituminous counter sued RiverGate Loft Partners, claiming it had the right to recover all or portions of the $6.9 million from the developers.

Jurors awarded $1 million to Bituminous. It was unclear how they reached that dollar amount.

Denver lawyer Dan Wartell, who represented Bituminous, said he was pleased with the jury’s award, but he was hoping for more. He praised the nine-person jury for treating an insurance carrier fairly.

“We were hoping for 3 or 4 (million dollars), but I still think it’s a huge verdict,” Wartell said.

Denver lawyer David Mayhan, who represented the developers, declined to comment Thursday while leaving the courthouse.

RiverGate Loft Partners was formed in 2002. The registered agent is Durango resident Dale Kneller, who could not be reached Thursday for comment. Tony Whittle, owner of TL Roofing, and David L. West, a federal magistrate in Durango, also are involved with the partnership.

Neither West nor Kneller could be reached for comment Thursday.

Whittle said Rivergate property owners were led to believe everything about the building was substandard or defective. While there were some problems, they weren’t nearly as extensive as property owners alleged, he said.

Some complained of sound attenuation – or sound moving freely through the walls – which can be a subjective complaint, Whittle said.

“I can tell you that when the construction was going on, I thought it was as good as anything I have worked on personally,” he said.

Efforts to interview jurors before they left the courthouse Thursday were unsuccessful.

The jurors, four men and five women, deliberated about a day and a half before reaching their decision.