Owners of Three Renaissance Condos File $1m Suit in Garage Collapse
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Note to attorneys who will doubtless read this post: All opinions expressed in this column are based on a personal, non-legal and untrained interpretation of the lawsuit filed with the Dallas County Clerk (full text at end of post). My legal experience extends to binge-watching LA Law and The Good Wife.
I’ll admit my only surprise is why it took so long. Didn’t we all instantly mutter, “someone’s gonna get sued” the second we saw the news of the partial collapse of The Renaissance parking garage back in October? So this first lawsuit’s only marvel is in beating others to the punch (and make no mistake this is only the first drop of blood in the water).
In my non-legal and completely weightless opinion, I see good-news for the plaintiffs. Assuming all is provable as written, this case will likely hinge on two facts. The contractor, Reconstruction Experts, Inc. not securing a building permit before beginning demonstrably inferior work and FirstService Residential, Renaissance’s management company, for allowing work to start without seeing the physical permit.
Note: The HOA is also named, but I suspect that’s more to do with the large insurance policies condos maintain on board members coupled with lawyers’ desire to have a hand in every wallet. The HOA insurance policies I’ve seen (admittedly few) seem to cover inadvertent acts by the board but drop them if an act was knowingly improper.
Because most HOA boards are made up of people with little experience beyond (maybe) balancing a checkbook, and certainly not large commercial construction projects, they’re likely not personally liable in this case … unless of course the HOA board knew work was beginning without a permit. In that case, all bets are off.
Of course no lawsuit in history is ever that simple, is it?
There’s also a wrinkle where the suit states that the city didn’t issue the permit “due to safety concerns with the project” but doesn’t specify. Without knowing what those concerns were and how they were communicated to the contractor and Renaissance management, it’s impossible to know how serious they were. Though to an idiot like me, it seems unlikely the safety concerns included the storage of rubble in a parking space because I just don’t see the city asking that (the building yes, the city, no). But we don’t know.
I suspect a second level to the suit will also have to prove that the lack of a building permit (while illegal) also resulted in foreseeable and preventable sub-standard “work” (rubble storage) to be carried out. After all, if the work was performed to legal standards regardless of the permit situation, the accident would have still occurred. In that case, I’d think the permitting issue becomes more of a legal inconvenience than a smoking gun for the defendants seeking cause and blame.
The third level hits as the plaintiffs try to prove that Reconstruction Experts knew about the garage weight limits and exceeded them. It may be difficult to figure out if building management knew of any weight limits, and if so, that they communicated them to Reconstruction Experts. The smoking gun here may be in understanding why the debris was moved from the area prior to the collapse. Did someone notice something?
A fourth level may come into play if there are known weight limits that were not exceeded but are incorrect. It’s certainly possible the original design or the garage’s construction may be a contributing factor. After all, if Renaissance was told of a weight limit and the evidence proves it was not exceed, there may be an original construction flaw. I suspect there’s going to be a lot of stress testing of the garage and its components as this plays out. If this is proven, expect the original developer to be pulled into the mess.
Of course there’s a bunch of other legalese in the lawsuit. It’s what I call kitchen-sinking. Lawyers leaving no stone unturned to bulk up simple concepts and to extend blame and consequences as far as the eye can see. You know what I mean … if lawyers could find a way to sue God for faulty workmanship after an earthquake, they would. Mostly it serves to intimidate the lay defendant … because every attorney from Perry Mason to Alicia Florrick surely knows (and plays) the same game.
How are Plaintiffs “Damaged?”
For there to be an award of damages, the plaintiffs must prove they’ve been “damaged” by the incident. Damages in their most basic are about making a plaintiff “whole.” Simply, returning the plaintiff as much as possible to a state before the incident occurred.
But we all know there’s another side to damages that seeks to punish defendants for wrongdoing. For example a car company knowingly marketing a car that cheats emission requirements or whose ignition switch is faulty. Those kinds of damages exceed making a plaintiff whole. We’ve all seen Erin Brokovich.
Personally, the only easily quantifiable damages listed at this time would be monetary assignments surrounding the loss of use of their still-trapped cars and their contents, along with the increased expenses incurred by the parking garage’s continued closure. To me this equates to rental car costs, additional insurance expenditures and any future increases, and whatever’s in their car they can’t live without (phone or prescription glasses … yes. Snickers bar and gym clothes … probably not.). I’d also extend the damages to parking fees, tickets and some added money for the sheer inconvenience of the whole experience. While these are ongoing expenses, they can be calculated to a final ending date and dollar amount.
If cars have been damaged in the garage, repairs and any lingering resale impairment (thanks Carfax) are also quantifiable. I’d need to understand further how an undamaged car that’s simply trapped would have its resale value diminished simply by being trapped.
What’s fascinating to me are the list of “non-quantifiable” damages. I call them non-quantifiable because at this time, there doesn’t appear to be an easy and accurate way to measure them. Perhaps by the time this case makes it to court, enough time will have passed to measure them. But I also feel these damages are on a downward sliding scale. Let me explain …
In addition to cars, the list includes reduced valuations for their condos. They’ve said the garage collapse, associated press coverage, and mandatory disclosures required when selling their condos has “significantly” reduced their value by creating a stigma and impairing the Renaissance’s reputation.
Certainly any reduction in resale prices would have to be proven (over time). Ideally, it would have to be proven over a protracted period (over more time). Perhaps insurance companies have actuaries who use national data on resale valuation trends after semi-catastrophic events who can calculate how diminished a condo’s value would be and for how long? Because as I said, without a recurrence, “damages” will almost certainly evaporate over time as the event passes into history.
How Damaged?
While it’s up to the jury (or out of court settlement) to determine liability and actual damage payouts, the lawsuit believes it’s a nice, round one-million dollars. At least part of the rationale for that number seems to be to allow the plaintiffs to conduct some extra “discovery” (investigations) into the circumstances of the accident that are only allowed for suits over (and including) the million mark.
Mr. Mallon’s condo is valued by DCAD at $151,370, they also place a value on Ms. LaCarra’s condo of $171,820. Messrs. Eghdami and Pourjavad’s unit is valued at $176,810. With DCAD valuations like these and current listings of similar units priced above these valuations, it’s tough to see any immediate effect. For trial, I’m sure a trend line will be constructed that maps all actual closed sales prices (versus listing prices) during 2015 and noting any change since the accident.
What do I think a fair judgement should be? That will depend on a lot more information and detail that’s not in the lawsuit paperwork … because that’s why we have a court system … not so idiots like me can guess.
In Conclusion
One thing you can bet on is that this suit is a trial balloon for others. With 600 units, a pile-on is guaranteed.
Do I think the plaintiffs will “win?” Yes. Do I think the lawyers on both sides will be the biggest winners? Aren’t they always?
But never having experienced a real courtroom drama, perhaps I should see how this all shakes out in person? If it’s like TV, I’m going to need a seat cushion.
Remember: Do you have an HOA story to tell? A little high-rise history? Realtors, want to feature a listing in need of renovation or one that’s complete with flying colors? How about hosting a Candy’s Dirt Staff Meeting? Shoot Jon an email. Marriage proposals accepted (they’re legal)! [email protected]
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I am also not a legal expert but I don’t see how the HOA isn’t on the hook. I find it highly unlikely that the management company hired the construction company, the HOA almost certainly did and as such the buck stops with them to properly vet and manage them.
We just did a major remodel project at my condo building and the contractors reported directly to the board, not the management company.
“The HOA is also named, but I suspect that’s more to do with the large insurance policies condos maintain on board members coupled with lawyers’ desire to have a hand in every wallet. The HOA insurance policies I’ve seen (admittedly few) seem to cover inadvertent acts by the board but drop them if an act was knowingly improper.
Because most HOA boards are made up of people with little experience beyond (maybe) balancing a checkbook, and certainly not large commercial construction projects, they’re likely not personally liable in this case … unless of course the HOA board knew work was beginning without a permit. In that case, all bets are off.”
What does a property management company know about managing large construction projects? In all likelihood they didn’t select the contractor or authorize the scope of the work, their responsibilities were probably limited to making sure that the workers complied with HOA bylaws, not playing permit enforcement. I would think it plays down to who the contractor was working for, the building management company might be the board’s authorized representative but say as a condo owner if I hire a contractor and the contractor fails to obtain the proper permits and tears up the carpet in the hallway I don’t see how I get to blame my management company for failing to properly supervise them.
Back when our HOA had a mgmt company (we now self-manage), they handled the hiring and management of major construction projects. It depends on what type of HOA board they have, but I can also see a situation where all the board did was sign off on the vetting and hiring of the contractor by the mgmt company (who frequently charge a percentage of the project cost for such “management”).
Exactly. We’re all speculating on relationships we don’t know the details of. The courts will figure it out.
I’m not saying the HOA isn’t on the hook (covered by their insurance), I’m saying they’re likely not personally on the hook. Because let’s face it, it’s doubtful the HOA has the experience to vet a project of this magnitude — that’s partly why high-rises have management companies, to bring their experience to the table. Sure the HOA saw the quotes and likely chose the cheapest one (not an indictment, it’s just pretty standard procedure). But how much due diligence was done and even if the contractor had previous issues is unknown but it’s doubtful their actions make them personally culpable. It is also absolutely building management’s job to check that any work being done in the building — whether it’s a kitchen renovation or pool deck — has a building permit and the proper insurance before workers are allowed on site. For a job this size, I’d expect the HOA to know this too, but ultimately the staff literally manning the doors belong to the management company.
In your example, yes, the management company is responsible for upholding the HOA rules and I’ll bet those rules spell out what work must be permitted and the permits be filed/shown to the management office before work begins. They also likely spell out what/how much insurance a contractor must have to perform their work to protect the building’s common assets like hallway carpet. The management company doesn’t supervise, but they do gatekeep.
What makes me uncomfortable now is that Reconstruction Experts is the contractor replacing the roofs on our condominium complex… (gulp)
It’s unknown if this lapse is an isolated incident. But I would certainly make my HOA aware of this suit (as I’m sure you have).
Isn’t a HOA made up of the owners…..so in effect aren’t the owners suing themselves and their neighbors? Granted they may be hoping the insurance will pay for it all but many HOA’s still have to kick in a deductible and attorney fees which could mean an assessment that the plaintiffs will have to pay.
I don’t know the answer but are the board of directors themselves shielded from liability if negligence could be proven? Each board member would have common ownership of the parking garage so in my non-legal mind I could see some sort of play on their personal insurance’s liability coverage.
The HOA is likely shielded unless they knowingly did something illegal (which, so far doesn’t seem to be the case). For example, theft would likely not be covered by the HOA insurance policy.
Yes. HOAs are co-owners and to the extent the HOA is found liable, insurance and deductibles will have to be paid. If the insurance company shoulders any burden it’s unlikely the deductible alone would require a special assessment.
I guess I am thinking more in terms of all the owners….if you have numerous suits….after a time it seems like this could add up to major bucks unless they are all lumped together.
Agreed.
I love living in build A of the Rennaisance, the HOA Board of Directors are incredible and have done a fantastic job for the residents. These people have a nerve and thanks for including their names in your article because they should be held accountable for their BS.
Mr. Sieber, While I do not know which owners currently make up the Board, your comments and apparent loyalty to them are, at best, misguided. In September of 2011 I informed the Board and management of possible structural problems with the garage after finding chunks of concrete falling from the joints and rusted rebar (I still have a piece of the concrete that fell on my car…). In October 2011 I followed up in writing after realizing that the floors of the garage were literally bouncing up and down when cars ran over the speed-bumps they installed, Just after the collapse a different owner called me to say he also complained about large movement of the garage flooring. Many serious and dangerous safety concerns were and still are being intentionally ignored, it is pure luck that no one was killed. Instead of calling the concerns of the owners that sued to protect their rights “BS”, why not ask the Board members (Leahy, Krider, Sikora) and management company (Premier, First Service) to explain why the parking garage, Fire Code violations and Building Code violations were never addressed ? Was my concern over the parking garage just “BS” given that the garage collapsed in EXACTLY the spot I predicted? If someone dies because required Fire Stops are missing, will that be “BS” too ? You would do better to have all the facts before judging the actions of other owners, unless of course you sit on the same pedestal that people like Leahy, Krider and a few others think they actually sit on…..
Hi Candy and Readers! I have extensive knowledge of the HOA, management company, the contractor Reconstruction Experts, and the Engineering firm of record PIE Engineering.
The garage and pool deck was a classified as a Construction Defect hence why it was being replaced within a fractions of the life span. There is lots of people in the industry that know about the defects and the Association and their directors chose not to pursue the developer when they had the chance.
The so called materials that the media claims caused the collapse was soil from the planters, not construction debris. Approximately 3 years of top soil.
The placement of said soil was approved by PIE engineering, First Service Residential Facilities director and safety liaison on the project Omar Mont-Louis, and the Association.
The Association or FSR did not inform PIE or RE of the repair that was made on that section of double T support.
Back to the defect and insert weather; there was a record setting weather event that hit in the area with record winds and rain fall. With the pool deck waterproofing removed, the lower level garage drainage theoretically should have collected the rainfall BUT the drains were all above grade AND the garage deck grading was done incorrectly sending all the water to pool against the sheetrock walls of the owner closets. Even worse; there was no barrier between the unit owner closets which separate the hallway and units from the garage, other than sheetrock. Needless to say there was flooding down the 5 levels of that tower.
The permit was approved by the City however it wasn’t issue because the HOA illegally installed pergolas without city approval.
The HOA did not have adequate insurance to cover the damage. The cost of repair was around 12,000,000 and the do not have the money. Who pays the bill?
My involvement in this project was as a consultant and to summarize this I would suggest that there is no bad guy here just a series of terrible events. All parties had good intentions abut fixing the pool deck which was failing due to poor construction practices when it was build and causing damage to the parking structure. I think it was rushed and not enough of the defects were reveled to the engineering firm. Had they known ALL of the issues and areas of repair there likely would not have been a collapse to begin with.