The company that built the apartment complex where six Irish students were killed in a balcony collapse paid $3 million last year to settle a case over alleged defects in apartment buildings.

Court records seen by The Irish Times show that Segue Construction, the company that built the Library Gardens complex in 2007, paid the sum to settle a legal action alleging water damage on balconies and windows.

Mayor of Berkeley Tom Bates has said the balcony collapse at the Library Gardens building in Berkeley was primarily caused by water-damaged wood. Mr Bates said initial findings by investigators suggested the wood was not properly caulked and sealed when the building was being constructed.

In an action filed in Santa Clara County Superior Court in 2010, a company that owned a 245-unit apartment building called The Pines at North Park, in San Jose, accused Segue of “failing to construct the breezeways, private balconies and stairwells at the project in substantial compliance with the contract documents and all applicable local and state codes.”

The developer, Irvine Company, said it discovered water damage on elevated decks, windows and other locations in the complex in January 2009 - nine years after it entered its agreement with Segue.

Irvine claimed it found defects in “waterproofing of breezeways, private balconies, and stairwells” as well as “window and stucco deficiencies; and podium defects.”

It alleged this was caused in part by improper slope in the deck framing. “Other trades alleged to be at fault for the elevated deck damage include: sheet metal, waterproofing, stucco, concrete, thresholds and doors,” the filing stated.

Irvine and Segue settled the case for $3 million in September 2014, court documents show. Segue blamed the problems on a subcontractor, and it was noted in the settlement that Segue was the general contractor for the Pines building project but did not itself carry out the disputed work.

Based in Pleasanton, a city in Alameda County, California, Segue has completed more than 6,000 apartments in the Bay Area.

‘Contract dispute’

Segue could not be reached for comment. However, a company spokesman told the San Francisco Chronicle, which first reported the court records, that the case amounted to “a standard contract dispute”.

The spokesman said the balconies in San Jose were “substantially different” from the one that collapsed in Berkeley. In the San Jose case, the building had long balconies, supported from below, that connected several units. The Berkeley balcony was much smaller and extended from the building without substructure supports. The spokesman called the case “a typical post-construction lawsuit” and said Segue had “a very good reputation,” according to the newspaper.

Separately, the Chronicle reported that Segue paid $3.5 million to settle a case brought by the owners of a 109-unit condominium complex that had been completed three years earlier in Millbrae, a city in San Mateo County, California.

Structural engineers and architects who spoke to The Irish Times said the most probable cause of the Berkeley tragedy was a failure of the timber joists on which it rested. Such a failure was most likely to have occurred because of prolonged exposure to moisture which in turn would have caused a weakening and, ultimately, a rotting of the timber fibre.

The balcony was thus in a precarious condition and unable to support the weight of, it is believed, about a dozen people, some or all of whom were moving at the time of the collapse. Such a dynamic load, as opposed to a static or immobile weight, would have increased the stress on a structure that experts agree was already degraded.