FOR OWNERS, PATTERN'S ALL TOO FAMILIAR Many Can't Get Satisfaction From Developers, Suppliers By: Loretta Kalb / Bee Real Estate Writer Sacramaneto Bee Sunday, October 13, 1996 The litany is surprisingly familiar. Homeowners faced with problems fail in their attempts to get satisfaction from developers, subcontractors, suppliers and even insurers. They lose sleep. They feel overwhelmed and traumatized. In El Dorado County's Camino, a doctor and his wife hired a custom home builder to construct a mansion on a 42-acre site. But work on the $1.3 million project came to a halt more than a year ago. Now the unfinished home is encircled by weeds. Two lawsuits filed last year by the owners cite improper construction and complain that a specially treated, fire-retardant cellulose insulation manufactured by Fiberwood, Inc. of Sacramento was defective and negligently installed. "The chemicals in the Fiberwood insulation leached out into the wood, corroded the nails, bolts and all metal components of the exterior wall and compromised the integrity . . . of the walls," said Thomas C. Richards, attorney for plaintiffs Loreine and Nicholas Simopoulos. "At the least, we believe now it will be necessary to remove all affected wood and metal fasteners and start over again." Cellulose insulation manufacturers such as Fiberwood typically have their products certified by Underwriter's Laboratory in Chicago, and cellulose insulation treated with fire retardant is in wide use. Experts say that installed properly, it poses no problem. But plaintiffs' experts say problems can occur if the insulation is exposed to excessive water and then is exposed to cooper or other metals. The suit names Tom Engel Development, Inc. as the insulation installer. In this case, said attorney Richards, some 2,600 pounds of chemical were estimated to be in the walls - about five pounds of chemical for every 30 pounds of insulation. Lindy Scoffield, the Sacramento attorney for Tom Engel Development, said his client "followed the directions given by Fiberwood for installation. They pretty much did what they were supposed to do." "Everybody's contention is that there was too much water," Scoffield said. "But the (insulation) bag does not say that you have to use certain amounts of water. There's no warning about having too much water." The home's builder, Paragon Development, is no longer in business. The Contractor's State License Board has forwarded the firm's file to the state attorney general for possible legal action. A half-dozen other area companies use the Paragon name but are unrelated to Paragon Development. An attorney for defendant Paragon Development and its officers, Aristotle and Andrew Economon, declined to comment. Fiberwood, Inc. was sold last year. Fiberwood's attorney, Robert Luster of San Diego, said there is a problem in the Camino home but that his client didn't cause it. "This insulation is used in hundreds of thousands of homes," said Luster, adding that it was the only time it had ever been associated with corrosion. These days, the most frequent visitors to the unfinished, 9,000-square-foot home are the attorneys, insurance representatives, engineers and forensic inspectors - experts who must identify what went wrong - or right - during construction. In Placer County's Newcastle, quality of construction was not an issue. Instead, for owners Edward and Teresa Lang, it was the 1992 Street of Dreams builder hired for the job, Mishler Construction Co. The house is beautiful, but the contractor did not pay subcontractors with proceeds from the owners. A few weeks after the work was complete, subcontractors began arriving on the doorstep asking the Langs for their pay. They filed liens against the property. "I have never had people come to my door about not paying them," said a mortified Teresa Lang. The Langs filed a civil suit in Superior Court in April 1995 and won a court judgment in December for $204,000. They have yet to collect. Steven Mishler, who no longer operates his business, is contrite. "They are right," he said in reference to the Langs. "I wasn't able to pay all of the subcontractors that performed work on that job. I just ended up having too many expenses." Mishler, 41, said he had purchased some land and committed himself to another project that he did not have funds to finance. When the economy slowed, he could no longer operate. "When things stopped, I no longer had enough money to make all my ends meet," he said. "So there were a couple of houses I wasn't able to pay everybody fully on." He says he cannot pay the Langs. "I am out of business," he said. "I simply have a job" doing architectural and interior design work for another firm. "I don't handle any money." "I lost my house," he said. "I lost everything." This year, part of Mishler's job was designing a house for one of the builders in the 1996 Street of Dreams. (The book "What You Should Know Before You Hire a Contractor," by the Contractors State License Board, suggests steps to avoid liens. However, the key suggestions - requiring a contractor to purchase a performance or payment bond or seeking a waiver of lien from a subcontractor or supplier - do not always work.) (Subcontractors and suppliers typically will not waiver their lien rights without at least partial payment, says Los Angeles attorney Sam Abdulaziz, a construction litigator. And only the most financially able contractors can purchase bonds.) In Antelope, Sacramento County Sheriff's Deputy George McKinney and his wife, Barbara, say they have stopped making payments on their Winncrest home. "We're going to lose the house," said McKinney. "It's all over with. I'm not going to continue losing money." McKinney's attorney sued the builder in June. The suit complains that the pipes have leaked under the slab floor, cracks have appeared in the slab and in walls, siding has buckled, the lot has subsided, and the home was sited incorrectly on the lot. The title insurance policy does not protect the owners in this case. When they bought the home, according to the suit, the couple was not told of plans to widen Elverta Road to six lanes. That produced a traffic signal only feet from their driveway. Mike Winn, vice president of Winncrest Homes, declined comment on the McKinney lawsuit. But as a result of the traffic changes, Sacramento County has prohibited on-street parking in front of the McKinneys' home. So pulling in and out of the driveway, the suit says, is "dangerous and difficult at best, and impossible at worst". Several real estate agencies have told the couple that the property is virtually unsaleable. McKinney and his wife have offered the mortgage company a deed in lieu of foreclosure. [HOME PAGE] [WHAT'S NEW] [VERDICTS & SETTLEMENTS] [FIRM PROFILE] [BIOGRAPHIES] [CLIENT SERVICES] [CONSTRUCTION DEFECTS] [ONLINE PRESS] [LAW & LEGISLATION] [CLAIM DEVELOPMENT] [UPCOMING EVENTS] [CONTACT US] © Copyright 1996 The Miller Law Firm All rights Reserved. If you experience problems or have questions, contact us at Info@ConstructionDefects.com.