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Canterra

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Featured Case Study: Canterra

Facts:

120 unit Condominium Association located in North Phoenix. Approximately, the buildings were constructed from 1997 to 1998, with the remaining units thereafter. For over three years, the Association Board of Directors negotiatedt in good faith with the Developer to make repairs to defective roofs, among other issues. During this time frame, the Association was repeatedly promised repairs, and some partial repairs were actually started. In exchange for these promises, the Board decided not to bring a formal claim for the construction defects that existed in the common ar

Legal Analysis:

ARS 12-542 provides an Association 2 years from date of discovery to bring a claim for negligence. ARS 12-558 provides an Association with six years from date of discovery to bring a claim for breach of the Implied Warranty of Workmanship and Habitability for construction defects. ARS 12-552, the statute of repose, creates an eight year outside limit from the date of substantial completion of a residence in which to bring a construction defect claim. (note: ARS 12-552 (b) extends the eight year limit one year to nine years if the damage occurred in the eighth year or a latent defect was discovered in the eighth year.)

The defendant developer filed for summary judgment with respect to liability for defects and resultant damage in the buildings that were completed more than eight years from the date the formal construction defect claim was filed. The court granted the defendants motion. The Association argued the theory of equitable estoppel, which generally provides that a person may be precluded by his own acts or conduct, from asserting rights against another who has justifiably relied upon such conduct. Since the Association contended that it relied upon the affirmative statements of the developer that the defective roofs would be repaired, and did not bring a claim against the developer, that would have stopped both the running of the statutes of limitations, including the statute of repose. The Association took the position that the developer should not now be permitted to stand behind those same statutes to avoid liability for the very defects it created.

However, the court disagreed and refused to apply the doctrine of equitable estoppel, and barred the Association from bringing a claim for the older buildings, effectively, reducing the ultimate recovery in this case by over $2,000,000. Now the individual homeowners, who did not create the defects in the first place, are victimized a second time by believing the developer's promises and allowing them too much time to make repairs, will have to come out of pocket themselves for the repairs.

Recommendations based on the rulings:

First, if any buildings are close to eight years old from the date of substantial completion it is important to have a Construction Defect Attorney due a comprehensive statute of limitations analysis, including a visual inspection by a construction consultant. DCS will conduct such an investigation at no charge or commitment o the Association. Second, do not rely on the developer's promises, without formally protecting your Association's legal rights. Repairs offered are often band-aid in nature and the fact that they are being made or negotiated does nothing to stop the statute of limitations from running or the statute of repose from expiring. As you can see it can be a very costly mistake.

What Clients Say

We are very thankful that you believed in the case

I just wanted to thank you and your staff for all the hard work you did on our case. Nick and I are very appreciative of the time your firm took for us and the other class members. It was a long road to the end but we are very thankful that you believed in the case and continued to support it.

Elayne R. WilsonHomeowner, Cayman Square & Cayman Lane
We are truly grateful

Thank you all for achieving an awesome settlement for Costa Brava! We are truly grateful.

Maureen CrawleyCosta Brava Homeowners Association
Worked hard to back up its promise

Your firm was always optimistic and worked hard to back up its promise to resolve our litigation as expeditiously as possible. During the investigative process, your staff did an excellent job of managing the contractors selected to conduct the invasive testing of our homes.

Marty J. BrandtPresident, the Pueblos At Andersen Springs Association
Made the Board feel confident and well informed at every turn

Construction defect litigation is a long and arduous task, and Mr. Dicks and his team made the Board feel confident and well informed at every turn.

Lennard AnclamPresident of The Board of Directors, Serena Owners Association
We are especially pleased

We are especially pleased with the extent of your ability in protecting your client's rights and the expeditious decision of our case.

Danny Kim, et al Virgil Courts HOA, Inc.
Clearly had the Association's best interests at heart

With our litigation against Wilma Pacific now essentially concluded, I'd like to extend my thanks on behalf of the Camelot Homeowners Association to you and your firm for all of your hard work in driving it to a very successful conclusion. Christopher Coglianese and Jeff Miller deserve much of the thanks for their diligent pursuit of this case and their professional handling of the many issues that arose during the process. I enjoyed working with each of you as I think you clearly had the Association's best interests at heart

Don StevensonPresident, Camelot HOA
Everyone's performance was truly first class.

As we finish our re-construction project, I want to take this opportunity to thank you and Mike and your entire staff for all you have done for our association. Everyone's performance was truly first class. We were treated as though we were your only project. We had your undivided attention.

John KozarovichPresident, SeaCliff Court Homeowner's Association
Diligent expertise in handling our defect case

On behalf of the Board of Directors and homeowners of Morning Sun Condominium Owners Association I would like to express our sincere gratitude for your diligent expertise in handling our defect case.

Nancy P. LucePresident
Verdicts & Settlements

Verdicts & Settlements