Target of Bitter Lawsuits : Top Builder Is Accused of Shoddy Work on Homes

Of the many homeowner grievances that Vedder received, one especially stuck in her mind. It came from owners of a home in the Riverside area who complained that the bathroom floor in their new house slanted so badly that they had to hold on to the toilet to keep from sliding off.

That and similar complaints from other homeowners in the Riverside area were initially ignored by Kaufman & Broad, Vedder testified. She said company officials seemed to think that "if this was pushed aside long enough it would go away."

The complaints have not gone away, however, and are now at the center of an uncommonly bitter and prolonged lawsuit between Kaufman & Broad--California's largest builder of single-family houses--and dozens of homeowners in Riverside County.

Kaufman & Broad officials dismiss most of the allegations in the suit as sour grapes by disgruntled or misinformed former employees and characterize the Riverside litigants as fortune-seekers manipulated by unethical attorneys who are trying to capitalize on honest and fixable errors. The company maintains that it consistently builds quality houses at reasonable cost to fulfill the American Dream of home ownership.

"The Riverside litigation is driven by plaintiffs with unreasonable expectations and fueled by greedy lawyers," said company chief executive Bruce Karatz.

But accusations emerging from interviews and testimony under oath in depositions taken by homeowners' attorneys in the 4-year-old lawsuit tell a story of dozens of dream homes gone bad.

It is a story that began with the promise of that increasingly rare commodity in California: quality housing for first-time home buyers at affordable prices. But, according to customers and former employees of Kaufman & Broad, the promise of quality was frequently compromised by fast-paced construction schedules, and homeowner complaints of shoddy workmanship often were ignored.

Privately, some construction workers laughed about the quality of the homes they were building in Riverside and even referred to them as a "joke," according to the testimony of one former construction employee.

Dozens of homes were built in Riverside and neighboring Corona without proper plans and, when serious structural problems appeared, company officials tried to cover them up, according to sworn statements.

Gifts for Inspectors

In addition, Kaufman & Broad gave liquor and substantial gifts to building inspectors who were responsible for enforcing construction code standards, and one inspector from the city of Riverside approved homes without even looking at them in order to help the company meet its construction schedule, according to a sworn admission by the inspector and other sworn statements.