Subcontractors Unseen Victims of Defect Suits
Subs Are Often Unaware of Problems Until Sued
by Joe Wheeler
From The Construction Zone: June 2000
The meeting of the Nevada Subcontractors Association brought together a roomful of contractors with something in common; they’ve all been sued over construction defects and feel victimized by the process.
Alan Conrady, plumbing contractor, said that his company is having a hard time finding coverage because he primarily does single-family new home construction.
"We’re getting hit hard this year," Conrady said. "One company canceled out and a lot are only handling commercial work. The one quote I got was for $70,000 more than I was paying last year."
Electrical contractor Steve Menzies said he responds to service calls with a real effort to satisfy the homeowner. "You show up because someone says their GFI outlet doesn’t work. You ignore the multiple refrigerators plugged into the single outlet and replace it anyway. Maybe you tell the homeowner that they shouldn’t plug all those refrigerators in one outlet. The point is, it’s easier to try to make them happy than to fight over it."
Even framing can be fixed, says longtime framing contractor Ken Black, Jr. "We’ve actually gone in and fixed things that were more than 10 years old," Black says of his company’s desire to do right by the homeowner. Black says that for him, keeping a good relationship with a builder is worth the extra time and expense of handling a complaint.
All the subcontractors agreed that they are often unaware of complaints until too late.
Plumbing contractor Conrady said that his company is in litigation over two projects and that he was never informed of any homeowner complaints about his plumbing. "They won’t even tell me if I did anything wrong," Conrady said. "The only thing I got was the complaint."
Conrady said he learned what one of the complaints was about and couldn’t believe he had been sued over such a minor concern.
"They said there wasn’t enough caulking around the tub," he said. "There was only one complaint like that and I was given no chance to go in and recaulk."
San Diego Attorney On Construction Defects:
"We Invented It, You’ve Inherited It."
by Joe Wheeler
"The trial lawyers aren’t going to pack up and go away because of Calloway," attorney Rick Storms said. "They’re going to find another way to go about it."
Storms knows about construction defects. His San Diego law firm, Gray Cary, has been fighting defects claims for over two decades. The construction defect lawsuit was "invented" in San Diego County, California, and Rick Storms was one of the first attorneys to defend contractors.
Storms spoke to the Nevada Subcontractors Association about the nature of construction defects lawsuits and the migration of California lawyers to Nevada to cash in on defects. "There are lots of California lawyers here now," Storms said. "Some have taken the bar, some are just acting like they’re Nevada lawyers." Storms has no plans to practice in Nevada, as he is staying quite busy in California.
Discussing Calloway V. City of Reno, Storms said that subcontractors were off the hook for liability, except for "resultant" damage.
"The hottest new thing is mold," he said. "Water runs in, gets behind the stucco, behind the drywall, and into damp areas. Add some heat, you get mold."
Storms said that in California there are already a whole group of experts saying how dangerous this mold is and using it to create a liability claim. "They’re saying, ‘My baby has asthma, and the mold made it worse,’" Storms said. "There’s your ‘resultant’ damage."
As soon as plaintiff’s attorney’s come up with how a contractor’s work caused resultant damage, the insurance company is going to look at the long haul, according to Storms. In most cases, that means a settlement offer.
The future of construction defect lawsuits in Nevada is clear, according to Storms. "As long as there is a deep-pockets developer out there, he’s going to get sued."
When asked about efforts to change the law, Storms said to watch out for the trial lawyers. "Expect trial lawyers to push through something that modifies strict liability," he said. He said that the argument that a home is the biggest investment most people will ever make becomes a strong one in legislatures.
"Only through an association like this one can you have an impact," Storms said of the Nevada Subcontractors Association. "You can’t give away enough money. When it comes down to it, you only have influence as an association."
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