Storm Is Long Gone, But The Damage Isn't

By BILLY TOWNSEND The Tampa Tribune

Published: Jan 25, 2007

LAKE WEOHYAKAPKA - They spent their lives walking a beat or working an assembly line or keeping a home. They came from the Midwest or the Caribbean, dreaming of some ease in their retirement years, looking for a good life they could afford.

They found it near Lake Wales, in remote southeast Polk County. For $50,000 or so, a lifetime of working and saving, they could buy a condominium overlooking a lagoon stocked with bass and a canal leading to nearby Lake Weohyakapka. They shared an auditorium, outdoor dinners in a town center, a gymnasium and bingo nights.

The residents of Lakeshore Club Villas didn't need luxury. They enjoyed the tranquility of nature and comfort of community.

And then came the hurricanes of 2004, three of which strafed this complex of 39 buildings holding 500 condo residences.

Now those who still live in their condos lay tar against the seams of their walls or hook hose contraptions to the holes in their ceilings in the hope of keeping leaks at bay. They fight a constant, often losing battle with mold.

One 81-year-old widow, with only partial command of English, moves from vacant unit to vacant unit, because hers is destroyed.

Mostly they wait and worry in unsanitary or unsafe units and pray for ever elusive insurance money to rescue them.

Shortly after the storms, Lakeshore Club's insurer, Philadelphia Indemnity Insurance, provided a $265,000 check, according to the Lakeshore Homeowners Association. But the association's appraiser puts the damage and repair costs at as much as $33 million. Residents have been living at the mercy of that gap.

Chip Merlin, a Tampa lawyer who specializes in hurricane-related claims, has represented Lakeshore since last year. He said what has happened to Lakeshore is unprecedented in his experience.

"I haven't seen a situation involving a large apartment or condominium complex - where people actually reside - where an insurance company has been so atrociously off with respect to such easily observable damage," he said.

Relief may come soon.

Andy Fuxa Jr., the damage appraiser working for Lakeshore, said he and a counterpart with the insurance company have agreed in a sort of binding arbitration process that Lakeshore is due at least $25 million. A final figure could come within days, Fuxa said.

However, Janet Brown, an Orlando lawyer representing the insurance company, said she knows of no agreement and that the appraisal process is ongoing.

Sloppy 'Drive-By' Appraisal

Fuxa blames sloppy, "drive-by" work of the private adjustor who contracted with Philadelphia Indemnity just after Hurricane Charley for the huge discrepancy in damage assessments.

Fuxa said he and the current adjustor working for Philadelphia Indemnity have spent months poring over the damage at Lakeshore. They have made dozens of visits, he said.

He and Lakeshore officials contend the original adjustor spent less than a full afternoon after Charley and didn't go inside the units or on the roofs. Inspections after subsequent storms also were flawed.

Based on that work, Philadelphia Indemnity came up with a figure far below what Lakeshore needs and is entitled to, Fuxa said.

The association owns the common grounds, roofs, drywall and an insurance policy to cover all of it, Fuxa said. Individual owners are responsible for the interior features of their units.

A key driver of repair expense, Fuxa said, is that the 45-year-old buildings are hopelessly noncompliant with modern building codes.

The sodden roofs and the need to bring the buildings up to code call for virtual reconstruction of the complex. And the insurance policy requires Philadelphia Indemnity to pay for that, Fuxa maintains.

Brown would say little about the case, except that disputes over claim sizes are common and are resolved through the appraisal process.

Asked whether the adjustor who first visited Lakeshore did his job properly, Brown responded: "I'm not at liberty to comment on that."

Jeff Tackacs, a spokesman with the Florida Department of Financial Services, which oversees the insurance industry, declined to say whether a $32.7 million dispute is unusual, citing his lack of specific knowledge of the case. But he agreed that disputes between claimants and insurance companies are common.

He also noted condo claims are "without a doubt" more complex than typical homeowner claims because of the multiple buildings and units often involved.

A 'Most Complicated Claim'

Said Fuxa, whose Epic Group is a large firm specializing in post-hurricane issues: "I've been doing this since [Hurricane] Andrew [in 1992], and this is probably the most complicated claim I've ever worked on,"

Built in the early 1960s, Lakeshore originally was known as Fedhaven. It was designed, as the name suggests, as a rental complex for retired federal workers.

Fedhaven converted to private ownership, and its residential units became condos for sale. In 2003, the developer turned the complex over to the homeowners association.

Lakeshore's population is a bit of a kaleidoscope. The condos are second homes for many residents, a large number of whom are snowbirds. Other residents were recruited by the developer from Puerto Rico and other Caribbean islands. English is a second language - at best - for many condo owners, Lakeshore officials say. The population peaks and ebbs, depending on the season.

The bulk of the damage is to Lakeshore's flat roofs. They were built before wide use of air conditioning and designed to hold water for cooling purposes.

"When it was put in place in the 1960s, it was considered very high-tech," said Chris Purdy, secretary of the homeowners association.

Before turning over maintenance and ownership of the grounds to the homeowners association in 2003, the developer sprayed a foamy membrane on the roofs, presumably for insulation.

When the center of Charley passed less then 10 miles from Lakeshore, its winds lifted and punctured the roofs, allowing water to seep into this membrane, said Alberto Cardona, an engineer hired by the development.

Damage spread from unit to unit in the days, weeks and months that followed "because of water conduction in the membrane," he said.

For many units, the damage worsened in the months after the storms, as steady leaks undermined the structure of the units, causing ceilings and walls to collapse.

Purdy speculates at least 100 of the 500 units are unlivable. Many of those have been gutted. But Fuxa said leaks have made virtually all units unsafe enough that they should receive immediate temporary repairs to ease lurking mold and structural problems.

Despite the glut of news coverage after the 2004 storms, Lakeshore Club's ordeal remained virtually unknown, even to local government.

Out Of Sight, Out Of Mind

Residents and their advocates point to two general reasons. One is location. Lakeshore sits about 15 miles from the nearest town - Lake Wales - in a sparsely populated corner of Polk County.

Another is the seasonal population patterns and inexperience of the homeowners association, which took over control of Lakeshore the year before the storm.

Fuxa says Lakeshore's plight shows how easily - and catastrophically - residents can get lost in the process without help.

"They're not skilled claimants," Fuxa said. "They're retired people quietly suffering."

It wasn't until the association hired Merlin in 2006 that it gained momentum in its dealings with Philadelphia Indemnity, residents said.

Lakeshore officials said they have had no significant contact with county government officials about their plight.

Several residents said they are afraid increased government attention might lead some units to be condemned and their occupants forced out.

"They're definitely afraid of being homeless," Fuxa said.

But absent the money for repairs, the population is dwindling anyway.

Leading a golf cart tour of the grounds, Purdy lamented the absence of anglers on the banks of the lagoon.

"It should be packed with people right now," she said. "Look at how quiet it is."

Some residents have abandoned their units, and the homeowners association has foreclosed on more than 20 since the storms. That leaves the association in possession of units it has no way of getting rid of or fixing until it gets an infusion of repair money.

Even if the money does come through, Lakeshore faces two or three years of reconstruction before something like normalcy returns, Fuxa said.

Bitter Irony

Beside a road approaching Lakeshore Club Villas, a satirical mileage marker serves as a welcome sign. It reads:

.5 miles - Fun

.5 miles - Great Times

.5 miles - Friendly Neighbors

1 million miles - Worry

That's what 81-year-old Norma Carrasquillo and her husband imagined when they decided to leave Bayamon, Puerto Rico, for retirement in Lakeshore. Carrasquillo's husband died before they could move. She came anyway, honoring her husband's dream.

Storm damage eviscerated her unit, forcing her to rent from other Lakeshore residents. For months, she moved from unit to unit as owners came and went with the seasons. Like virtually everyone else, she has become painfully well-acquainted with worry.

"I came here to paradise," Carrasquillo said through an interpreter. "And I found an inferno."

Reporter Billy Townsend can be reached at (863) 284-1409 or wtownsend@tampatrib.com.