Leaking Home Buyers: Builder Fell Short of Basic Codes

Johnson v. Cutler Group

$161,700 Verdict Date of Verdict: 

Oct. 13. Court and Case No.: 

C.P. Montgomery County, No. 2013-15971. Judge:

Thomas P. Rogers. Type of Action: 

Breach of warranty. Injuries: 

Damage to home. Plaintiffs Counsel:  

Steven H. Lupin and James S. Lee, Hamburg, Rubin, Mullin, Maxwell & Lupin, Lansdale. Defense Counsel: 

Bruce S. Pancio, Pancio Law Group, Lansdale. Plaintiffs Expert: 

Kevin Thompson, building codes, Unionville. Defense Expert:Timothy Ronan, engineering, Mount Laurel, New Jersey. Comment: In April 2007, plaintiffs Kevin and Kathleen Johnson purchased a new single-family home built by Cutler Group Inc., in North Wales, for $646,500.

The home had a brick exterior in the front and stucco around the three remaining sides. When the Johnsons purchased their home, Cutler promised it was “built by skilled tradesmen using modern techniques, and in accordance with industry accepted industry practices of this area.” One month after moving into the home, the Johnsons began experiencing leaks and complained to Cutler.

According to the Johnsons, while Cutler initially responded to the complaints and repaired the leaks, Cutler stopped responding when the leaks continued. The Johnsons eventually hired a building inspector, who performed a moisture inspection and found significantly elevated moisture levels throughout their home. The building inspector recommended that the stucco exterior be replaced to prevent leaks.

The Johnsons sued the Cutler Group, alleging breach of expressed warranty, breach of implied warranty of habitability, breach of warranty of workmanship, and violations under the Pennsylvania Unfair Trade Practices and Consumer Protection Law. The claims were bifurcated for the purposes of trial; the warranty claims proceeded to a jury trial, while the Johnsons’ unfair trade practices claim was to be determined at a bench trial, scheduled for a later date. During discovery, the Johnsons’ expert completed a second inspection of the home, known as destructive testing. The expert selected various areas around the home and essentially peeled back the stucco exterior in order to determine the nature and severity of the problem. The second inspection revealed that Cutler failed to follow basic township building code requirements, which was compounded by a failure to use modern techniques, let alone accepted industry practices of the times, according to the expert.

The township building code required the stucco to be seven-eighths of one inch thick, but the inspection revealed that the stucco was only one-half inch to five-eighths of an inch thick. This second inspection also revealed deficiencies and defects with the brick exterior.

Johnsons’ expert testified that Cutler failed to meet 16 out of 17 building-code requirements in constructing the home’s exterior.

The expert recommended that all four exterior walls be removed and replaced. The total cost to remove and replace the exterior walls was estimated to be $161,700.

Cutler’s expert in engineering testified that Cutler’s failures were acceptable deviations, because such deviations occur all the time in the housing industry.

The expert acknowledged that there were defects in the home but said that only spot repairs, as opposed to an entire house remediation, were required under the circumstances. The expert further disputed the findings of the Johnsons’ expert, since the alleged cause of the leak was not discovered during the inspections.

The Johnsons sought to recover $161,700 to remediate the home’s exterior, including ripping out and replacing the walls and repairing damaged insulation, doors, and windows.

The jury found against Cutler and in favor of Johnsons’ claims of breach of expressed warranty, breach of implied warranty of habitability, and breach of warranty of workmanship. The Johnsons were determined to receive $161,700.

This report is based on information that was provided by plaintiffs’ counsel. Defense counsel did not respond to calls for comment.

—This report first appeared in VerdictSearch, an ALM publication.  •