Following the construction industry and related legal topics in the United States.

Thursday, May 11, 2006

Builder Must Pay Homeowners 5X Value for Out-of-Square House

A Wayne County builder constructing a $131,500 home with a foundation that was 8 inches out of square must pay the homeowners an award of $696,500. That is over $87,000 per inch! The Daniel v. Moore (Wayne County Superior Court No. 00-CvS-2386) judgment was for $790,800, which included treble damages for unfair and deceptive trade practices. The court subtracted an award of $94,600 that the homeowners received from Wayne County building inspections; however, attorneys fees and costs will be added.

Why did the builder have to pay damages that are more than five times the value of the house? The builder was aware that the front of the house was 8 inches longer than the back side during the early stages of construction. The builder actively covered up this fact and knowingly proceeded to build over the defective foundation assuring that the remaining construction would be replete with additional errors and defects.

The lesson for contractors is not to violate the building code and not to knowingly cover up major mistakes. The lesson for the homeowners is that it pays to persistently fight to have their day in court, since they had to appeal to the North Carolina Court of Appeals an earlier unfair and improper consent judgment that was entered in October 2002.

The jury found the builder liable for negligence, fraud and negligent misrepresentation. In April 2001, the North Carolina Licensing Board of General Contractor's revoked the contractor's license for incompetence, gross negligence and misconduct in connection with this case. See May 1, 2006, issue of North Carolina Lawyers Weekly.


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