Legal Issues
Listening to an Attorney give a presentation on “Legal Issues in the Building Industry” make me wonder if by designing a more sustainable and green home, we are “inviting” more reasons to be on the wrong side of a legal argument or not.
Has anyone experienced this first hand? Does anyone knows of lawsuits where “green building” per say was the issue? Any comments from attorneys?
To clarify this question, I know the problems with the EIFS systems where about installation details, or lack of, and not about the “building science” behind it. Therefore, if we have such differences of opinions in many “building science” issues, who is to say “our” method is the one, or the right one?
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Armando,
Houses with construction defects or dramatic failures end up in court.
If you build homes without construction defects, and if you promptly handle all callbacks, you're much less likely to end up in court -- whether you are a conventional builder or a green builder.
I agree with you statement, however, my question is about which correct method of a building science solution will come to play in a lawsuit. For example, there are some who believe that conditioned attics are it, while others believe ventilated attics are it, and some of us believe "depends" and the proof is some of the good arguments here in the GBA and elsewhere.
So in a court of law, would the answer be decided on who has the bigger "guns" or better attorneys? Who can hire BSC or XYZ Building Consultant?
It seems that the lawyers who are making money from "green" building disputes are fighting it out at a much higher level than local builder v. disgruntled homeowner.
Apparently the first "green" building litigation in the US was Henry Gifford (of Gifford Fuel Saving) v. USGBC and LEED, mostly based on the 2008 NBI comparison study of LEED projects vs all existing buildings, which was challenged (even by Dr. Joe) as using inappropriate statistical analysis.
"The lawsuit paints LEED™ as a farce that is not based on supportable science. Plaintiffs set forth six claims: (1) violation of the Sherman Antitrust Act for an alleged fraudulent monopoly of the green building market; (2) violation of the Lanham Act for alleged unfair competition by deceptive marketing; (3) deceptive trade practices and (4) false advertising for alleged misrepresentations and concealments in advertising; (5) RICO claims for defendants' alleged deceptive scheme; and (6) unjust enrichment for alleged fraudulently induced profits."
Another large suit is Shaw Development v. Southern Builders, which "grew out of the construction of a $7.5 million, 23-unit condominium project in Crisfield, Maryland called the Captain’s Galley, which was completed back in 2006. The development is adjacent to a local marina on the Chesapeake Bay and includes a number of green design features that were intended to support an application to USGBC for a LEED Silver rating. Southern Builders, the general contractor on the job, filed a $54,000 mechanic’s lien against the project late in 2006. In early 2007, a Maryland Circuit Court both reduced the lien to $12,000 and consolidated a related $1.3 million countersuit initiated by the owner Shaw Development that sought, among other things, $635,000 in what Shaw claimed were lost tax credits under a state-level green building program."
This, apparently, was settled secretly out of court.
And another interesting dispute arose as the Builders Association of the Twin Cities (BATC) sued Minnesota GreenStar and filed a restraining order against using a green building standard. GreenStar was created with money from BATC, but ran into financial difficulty, had to defer a subsequent loan owed to BATC and was planning to license its guidelines to other states to raise funds. GreenStar copywrited the guidelines but BATC claims ownership of this "intellectual property" and, apparently, wants to bypass GreenStar with a set of self-certified green standards.
So, rather than issues of quality of construction, it appears that the major "green" law suits are over control and dissemination of industry standards and the consequential damages of lost tax breaks on large development projects if standards are not met.
Armando,
As you probably know, jury trials are a particularly bad way to decide scientific questions. This is a broad problem that comes up in many legal cases, not just construction defect lawsuits. In many criminal and civil trials, juries decide questions of science after hearing presentations from paid experts hired by both sides.
There is absolutely no guarantee that juries will decide a scientific issue correctly. My advice: settle out of court.
Armando,
In our legal system, the winner is often the one with the "biggest guns". But any law suit over construction defects is going to rest on 1) what happened, and 2) who is responsible.
There must be financial damages, which typically involve a failure of some part of the building that requires replacement or repair. The argument will be based on who caused the failure, not on which building science theory best explains it or whether the contractor followed acceptable science - though people like Dr. Joe may get called in as "expert witnesses" to support or refute any particular allegation of cause and effect.
So, ultimately, it's not about which version of current building science a builder believes as gospel, but about whether the building performed as intended or failed. And no amount of yelling "but Dr. Joe said it was OK" is going to determine the outcome of a suit. As a building professional, you're supposed to know what works and what doesn't.
Those are good points you mentioned, Robert; but the fact is that any of us, while trying to do the “right thing”, may use incorrect techniques, materials or green philosophies that at the time, were deemed to be correct thing to do. I know for a fact, nowadays I do few things differently than I did just a few years a go. So, are we opening ourselves up to more scrutiny by using the latest techniques? Or the fact that we are trying to be on the cutting edge is enough to prove our “intent”?
Courts don't "decide scientific questions" - at least not since the Inquisition of Galileo and the Scopes trial in 1925.
Courts, in private law suits, decide responsibility for financial damages. Science may be used by either side to argue the case, but it's ultimately about whether there were damages and who was responsible.
Sorry, I posted while Martin's and Roberts posts had come in.
Robert,
Of course juries don't decide scientific questions. But if a building science question is introduced during a jury trial, one expert might explain (using references to published papers) why crawl spaces in North Carolina should always be vented, while another expert might explain (using references to other published papers) why crawl spaces in North Carolina should never be vented.
It's up to the jury to decide which expert to believe.
Armando,
You're right -- building is a risky profession. It's easy to screw up, and builders have a lot of liability.
There are several approaches you can take to these facts:
- Get out of the business;
- Buy liability insurance;
- Do the best job you know how to do and maintain good relationships with your customers.
Yes, there have been and are pending lawsuits related to green building and “green” products. Back in 2008 there was a lawsuit styled Southern Builders v. Shaw Development. In the Shaw matter, the general contractor filed a lawsuit to foreclose on a $54,000 mechanic's lien and the developer sued the general contractor for 1.3 million dollars claiming, among other things, that it lost $635,000 in tax credits. The developer claimed that the GC failed to construct an environmentally sound "green building" in conformance with the required LEED Certification. That case has settled.
Another pending lawsuit involves a proposed "green" building ordinance which the City of Albuquerque attempted to enact. In 2008 the Air Conditioning, Heating and Refrigeration Institute and others filed suit against the City of Albuquerque to stop the City from enacting its new green building law. The plaintiffs claimed that the City’s proposed ordinance was preempted by several federal laws, including the Energy Policy and Conservation Act of 1975 (EPCA). The federal court agreed with the HVAC parties and has granted a partial summary judgment against the City. Although the case is still going it appears that many green building ordinances enacted nationwide may in fact violate federal law.
Recently, in October 2010, LEED Critic Henry Gifford filed a class-action lawsuit against the USGBC and LEED for what amounts to claims of fraud. Mr. Gifford alleges that the whole LEED system is a rope-a-dope scheme that does not deliver the energy savings it promises and that LEED ignores other proven, green building systems.
Another emerging field of litigation involves what have been dubbed as “greenwashing” lawsuits. Greenwashing lawsuits generally relate to claims of false advertising. Two recent cases out of California are Paduano v. American Honda Motor Co., Inc., and Koh v. SC Johnson & Son, Inc. In Padunano, the owner of a 2004 Honda Civic Hybrid sued Honda claiming false advertising because his car did not achieve the advertised gas mileage. Honda advertised the car as achieving an EPA-estimated 48mpg, but the actual gas mileage was between 23-30 mpg. In Koh, a consumer filed a class-action against SC Johnson claiming that SCJ is misleading consumers about the environmental safety and soundness of household cleaners. The Koh plaintiffs claim that SCJ’s “Greenlist” label is misleading consumers.
The best advice I can give is the have all of your contracts in order and with the appropriate clauses and disclosures and to stay away from making specific claims that list a specific savings on energy. Watch very closely how you market the “green” building aspects of your business.
If anyone has any specific questions about potential green building liability do not hesitate to give me a call or shoot me an e-mail. I am happy to discuss any issue with anyone that may have questions.
Russell H. Daniels
Attorney at Law
The Bush Firm, P.C.
4025 Woodland Park Blvd., Suite 190
Arlington, Texas 76013
Telephone: (817) 274-5992
Back in January 2009, I reported on the Albuquerque lawsuit: Green Building Codes Are Derailed In Albuquerque and Santa Fe.
FYI, the issue the Air Conditioning, Heating and Refrigeration Institute (AHRI) had with the City of ABQ was that the AECC (I was a member of that committee) required SEER 14 min. in 1 out of 4 ways to get a building permit (not the only way). Also, their cost claims to remedy retrofits were outrageously misrepresented.
Subsequently, the AECC (the Albuquerque Energy Conservation Code) dropped the SEER 14 requirement but increased the envelope requirements, and the new code has been in use since last year.
Here is the AECC: http://www.cabq.gov/albuquerquegreen/pdf/volumeII.pdf
Armando
Thanks for inviting Russell to comment on this issue. I think his statement about having your contracts in order is what resonated with me, I know our local HBA attorney emphasizes the same thing.
I have attended seminars given by the Bush Law firm, specifically by Bob Bush, they are well known to home builders as experts on liability issues, including those that arise in regards to general liability insurance.
Allan
Roy,
GBA's policy is to provide this forum for people to ask questions related to green building, and for anyone to answer these questions.
It has always been our hope that discussion will focus on green building, building science, and related issues. The vast majority of readers do not come here to read comments pointing out the character flaws of other people who post comments.
When necessary, GBA deletes posts that don't conform to our policy. Among the posts that are occasionally deleted are posts that denigrate the character of other GBA readers or posters, rather than sticking to green building topics.
GBA extends its sincere thanks to all of the GBA readers who support this policy and work to make this a useful Web forum for visitors.
Roy I missed the content of the deleted gap but I have to say that I support deletion of comments that point out character flaws in other participants in the forum and prefer not to have to sort through the name-calling to find the useful information. I believe that people should not have to risk personal attack as a result of contributing to the conversation here.
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