July 02, 2007

TCPA claim against homebuilder

Homeowners of newly constructed houses may be proactive with their contracts and their litigation. In WAYNE'S CONSTRUCTION, INC. v. WILLIAM JONES, ET AL., the Tennessee Court of Appeals upheld treble damages ($417,750) plus attorney fees against the homebuilder, who appealed based on the proof of damages. In what was certainly a battle of the experts, the Court held that the homeowners "were [not] required to adopt a wait and see attitude to see if the house was going to fall down before being able to come to court with proof that was sufficiently definite to support an award of damages." The contract specified a three-month timeframe, and despite repeated assurances, the homeowners dismissed the builder after five months. At the time of termination, major aspects of the home had not been constructed, including the gutters, painting, trim, driveway, and site grading. At that point, the homeowners had already paid the builders the full $330,000 specified in their construction agreement. Further, the house was replete with structural problems, mainly stemming from the failure to properly connect the foundation girders to shift the load to the piers. Thus, the Court has come to the aid of individuals contracting for new home construction, allowing them to fire homebuilders who fail to live up to their contractual obligations, mitigate damages, and collect damages in court.

Interestingly enough, the builder originally filed the suit and demanded payment for services to date. After reviewing the opinion, one wonders why the builder would initiate the litigation. Was it a preemptive strike? Did the court overstate the nature of the proof against the builder? Did the builder fail to inform its attorney of all the relevant facts?

Additionally, the opinion noted that the only issue on appeal was proof of damages. It's difficult to tell from this opinion, but one has to wonder why the TCPA claim itself was not at issue.