This case was based upon a 201 home class action filed June 8th, 2000. Trial started September 29th, 2004. Trial ended with a jury verdict on December 13th, 2004. The plaintiffs' pretrial cost of repair was $9,300,000. The pretrial defense cost of repair was $1,300,000. Issues of the case involved roofs, windows, sliding glass doors, stucco, showers and structural deficiencies. The plaintiffs' expert for architectural issues was Bob Carroll of Building Analysts. The plaintiffs' expert for structural issues was Mike Romanowski. Plaintiffs' expert for cost of repair was Steve Gustafson of Nautilus Construction. Defendant Developer Beazer Homes' expert was Tom Cook of Lombard Consulting for both architectural issues and the cost of repair. For structural issues, the defendant used Carl Josephson of Josephson Werdowatz.
The developer Beazer Homes filed a third-party complaint against the subcontractors for indemnity based upon the allegations brought by the plaintiffs. Only the subcontractors whose scopes of work were implicated by Plaintiffs' defect allegations were named as defendants. The subcontractor defendants included Pratte Construction and A&G Framing for the framing issues. ANSE (Arizona State Plastering) and Palo Verde Plastering did the stucco. Avanti was the window supplier and the sliding glass door installer. Finally, the roofing subcontractor was Fisher Roofing. All subcontractors were represented by counsel and, in most instances; two separate law firms were retained by separate insurers. All had their own experts, but only ANSE's expert and the roofer's expert testified.
The subcontractors and Beazer, at Beazer's counsel's initiative, agreed to forego the usual indemnity battle and agreed to let the jury decide on how to apportion fault/liability shares for indemnity purposes. In other words, even though the contract could have many interpretations regarding who owed whom for what, it was agreed between all concerned that the focus would be on whether a defect existed and what it would cost rather than who caused it. Therefore, Beazer did not put on witnesses to say that they could not understand why the subcontractors could not or did not build according to the plans and building code and the subcontractors did not spend their time arguing design and supervision issues. The unified defense, led by Beazer, focused on plaintiffs' claims and their experts. For the second time in two class action construction defect jury trials in Arizona this year, the strategy worked and paid significant dividends for the collective defense.
The jury gave a total verdict of $429,808.69. Of this amount, $235,200 was for the plaintiffs to repaint their homes. The jury gave nothing for structural issues and only minor amounts for the remaining issues. The window paper flashing issue was a claim for over $2,400,000. The plaintiff's received nothing. They did receive $41,000 for window leaks due to product failures based upon stains in the sill jamb. The overall verdict resulted in a percentage of responsibility for Beazer in the amount of $98,000. The two framers received no allocated responsibility. The two stucco subcontractors each received an allocation of $97,000. The roofing subcontractor was given responsibility for $132,000. The window supplier was also relieved of any responsibility.
After the first week of trial, Defendants collectively attempted to engage the plaintiffs' counsel in settlement negotiations. An offer of $1,500,000 was floated to the plaintiffs. The response was a demand of $4,700,000. The subcontractors had an unfunded authority in an amount close to $2,300,000. Fortunately the case did not settle.
Koeller, Nebeker, Carlson & Haluck
William A. Nebeker [EMAIL LAWYER]
