Deukmejian Signs Bill for Owners of Crumbling Homes

SACRAMENTO —  Gov. George Deukmejian signed legislation last week that makes it easier for homeowners whose houses have crumbling foundations to sue their insurance companies, but legislators were pessimistic that he would approve a separate measure setting aside $350,000 for a geological study of the problem.

The foundations of several hundred homes in Lakewood, La Palma and Cypress are disintegrating because of a mysterious problem believed to be related to the high concentration of sulfates in the soil. Residents, many locked in legal battles with their insurance companies and the three cities, have looked to the state for an impartial investigation of the problem.

Passed Second Time

Last week, for the second year in a row, the Legislature passed a measure that calls for a state study of the crumbling foundations. Written by Sen. Cecil Green (D-Norwalk), the bill directs the state Department of Conservation to contract with a university or college to review water quality, water tables, soil composition and other geological factors that may be causing the deterioration.

Last year’s measure--which specifically named Cal State Long Beach to conduct the study--was vetoed by Deukmejian. The governor rejected the measure because he said it would be inappropriate to allocate funds for a state university that were not requested and appropriated by its board of trustees.

Green and his co-sponsors, Assemblywoman Doris Allen (R-Cypress) and Sen. Marian Bergeson (R-Newport Beach), removed the direct reference to Cal State Long Beach in this year’s legislation. But with a budget crunch that has forced the governor and the Legislature to tighten their spending belts, there is little optimism that Deukmejian will approve a $350,000 study even with the change.

‘Not Too Hopeful’

“We are not too hopeful about this,” said one legislative consultant who has followed the bill. “With the budget crisis this year, we are not sure it will slip through.”

A spokeswoman for Deukmejian said the governor had not made a decision about the legislation. Deukmejian has indicated previously that he views the crumbling foundations as a local problem that does not necessarily require state involvement.

On Wednesday, Deukmejian signed the related bill, also written by Green, that protects homeowners from losing their rights to sue insurance companies over claims involving the foundations. The legislation requires insurance companies to notify policy holders 30 days before their rights to sue expire under their policies.

Green said the measure was a response to homeowners’ complaints that some insurance companies have intentionally responded to claims after the expiration date to prevent policy holders from taking them to court.

“Because of the expense involved in paying these claims, some insurance companies are using every legal tactic their lawyers can invent to prevent future lawsuits,” Green said in a written statement. “The last thing people need, whose homes are literally collapsing beneath them, is the runaround from an insurance company. This will at least close one loophole being used by such companies.”

Officials said the crumbling foundations first appeared about five years ago in the Landmark tract in La Palma. They then became prevalent in several housing developments in Lakewood and Cypress. Homeowners have since reported similar deterioration in cities extending from Artesia to Mission Viejo.

The crumbling has caused some foundations and slabs to split and buckle, walls to separate and stucco to disintegrate. The cost of repairs has ranged from $20,000 to $160,000, according to Green’s office.

“We look at it as a situation much like an earthquake,” said Bill Gage, an aide to Green. “It is not the fault of the homeowners that this has occurred.”