By Dana Bartholomew
Staff writer
Thursday January 6, 2000

Hundreds of Le Parc condominium owners forced to double their homeowners dues to pay off a multimillion-dollar judgment are in for some relief.

Farmers Insurance Group, which insured the Simi Valley complex prior to a legal sinkhole precipitated by a former homeowners association, has agreed to pay the court-ordered assessments of 264 homeowners for an indefinite period.

"We have agreed to pay the assessments until the matter has been resolved," said Farmers spokeswoman Kitty Miller prior to issuing a statement from the company whose state office is based in Simi Valley.

The decision to pay the $166-a-month assessment follows a class-action lawsuit filed by Le Parc residents against the insurance giant in December for bad faith and breach of contract for failure to pay the judgment.

It also precedes a mediation today attempting to negotiate means to pay the $7.3 million debt to ZM Corp. It is unclear how Farmer's decision will affect several dozen homeowners who face liens against their properties, and possible foreclosure, for failing to pay the extra assessment.

"Oh gosh, I can't tell what they're paying," said James Long, an attorney representing the Le Parc Community Association, who received word of the offer in a cryptically worded letter last month. "It's like, 'Because we're such good guys, we'll do this,' then, 'We have no obligation to do this.' "

Farmers, in its statement Wednesday, said its Truck Insurance Exchange division does not agree with the court ordered assessment and intends to assist the Le Parc Homeowners Association in appealing that order.

"We have offered to reimburse the association for past additional special assessments, however, we have not received any written response from the association council to our request for assistance in calculating the amount of reimbursement," the statement said.

The company, in offering to help homeowners, said it did not admit liability for paying the ZM Corp. judgment.

"I'm very pleased for the owners that Farmers has taken this important step," said Jim Lingl, an attorney representing the fired LeParc HOA. "I hope it's the beginning of the end of this saga."

The Le Parc debacle began in 1994, when ZM Corp. was hired by the Le Parc HOA board to repair earthquake damage to the west Simi Valley complex.

Four years later, an arbitrator slapped a $6.6 million judgment-- plus 10 percent interest -- against the association for breach of contract and defamation to the Arcadia contractor.

The courts then ordered a receiver to collect the debt through HOA dues and as a result water bills and other utilities went unpaid for months. Maintenance was taken over by stalwart homeowners. Many feared losing their homes.

Glen Campbell, an attorney representing ZM Corp., said Farmers' offer to pay the special assessment won't cover half the debt.

"It doesn't hurt," he said. "(But) they're a long way from putting this puppy to bed."