Sunday, January 21, 2007

In the beginning, Bob and Jane Cull thought if they just wrote homebuilder Bob Perry a letter about all the defects in their new Mansfield house, everything could be resolved.Read the article at the Dallas Morning News

Builder fights claim of faulty house in court to which he's donated

Sunday, January 21, 2007
By WAYNE SLATER / The Dallas Morning News

AUSTIN – In the beginning, Bob and Jane Cull thought if they just wrote homebuilder Bob Perry a letter about all the defects in their new Mansfield house, everything could be resolved.

Bob and Jane Cull of Mansfield have been battling Perry Homes for 10 years, claiming their Perry-built house has fundamental flaws.

That was 10 years ago.

A tortuous legal battle has carried the retirement-age couple through the courts, to arbitration and now through the courts again – all the way to the Texas Supreme Court. The Culls have won every round, but their home has not been fixed, legal costs have soared and the couple has postponed retirement plans.

"You think you can wake up from a nightmare and it'll be over," said Ms. Cull, a physicians' liaison. Instead, the couple watches as the home's defective foundation continues to move, some windows won't open and more cracks form in walls, according to engineering reports.

A spokesman for Mr. Perry said the case is built around an important principle: whether arbitration or the courts will settle disputes. But the Culls say their case against Perry Homes illustrates how construction disputes can last for years without resolution and how the system is stacked against average homeowners who challenge homebuilders with wealth and political influence.

Particularly this builder: Mr. Perry is the nation's most generous individual political donor. He has been a leading advocate of laws to limit court awards against businesses and a financial benefactor to politicians and judges. And he has funded Republican candidates up and down the ballot in Texas, including more than $340,000 to the nine justices that will hear the Culls' case.

Perry Homes spokesman Anthony Holm said the donations are irrelevant.

"All we're trying to do is get our day in court," Mr. Holm said.

The Culls filed suit in 2000 to force repair of their house. But they grew concerned a legal battle could take years and went to arbitration instead, thinking it would resolve the issues quicker and with less expense.

Mr. Holm said the switch was unfair to Perry Homes, which had spent time and money preparing for a trial. He says the couple waived its right to arbitration.

It is that legal question – "at what point in time does a consumer waive their right to arbitration?" – the high court has been asked to decide, he said. Arguments will be heard in March.

Consumer advocates say Mr. Perry has spent millions of dollars creating a political and legal system tilted in his favor.

"It's not surprising that he showered tens of thousands of campaign dollars on the Texas Supreme Court," said Andrew Wheat of Texans for Public Justice, a nonprofit group that tracks campaign contributions.

"What is shocking is that the judges who took all this money have agreed to hear Perry's appeal of a lemon-home case – one that he already lost in front of an arbitrator and two Texas courts," he said. "It's three strikes and you're out in the Texas justice system – unless you own the league."

Mr. Wheat's group receives financial contributions from trial lawyers that represent people suing businesses.

Cracks in dream home

Bob Cull is 69, a stout man with round spectacles and suspenders who works as a manager in the health-care industry. His wife is 64, petite with white hair, and she carries a briefcase stuffed with documents about the couple's legal odyssey.

When they signed on with Perry Homes in 1996, the Culls thought they were building their dream retirement home, with 2,800 square feet and upgrades such as cedar closets and raised arches, in a new subdivision south of Fort Worth. There was a golf course and a view of the pond.

"I can remember sitting on the property before there was a house on it, watching the sunrise, and thinking, 'Oh my, this is the place,' " Ms. Cull said.

"This was going to be our forever, On Golden Pond nest," she added.

But the house was never whole.

"First we thought they'd bought the wrong-sized door," Ms. Cull said. "Leaves and critters could come in. Roof supporters were not staying attached in the attic; they were just hanging free. And there were cracks in the walls and the tile was cracking."

The couple complained, but work crews simply patched the problems, they said. Soon, they were sure their new $250,000 home had fundamental defects, and they expected Mr. Perry to make it right.

Mr. Cull described himself as "a firm believer that people settle their differences face-to-face and resolve things on a kind of man-to-man basis. We thought this was something we could talk to Bob Perry about over a cup of coffee and settle with a handshake."

He wrote to Mr. Perry, the first of many letters to come, outlining the problems. Engineering reports, both by the Culls and by the warranty company contracted by Perry Homes, concluded the foundation was defective, he said.

Their house was now valued at perhaps only a third of the original purchase price.

Eventually, the couple got a letter from the attorney for Perry Homes, John Krugh, saying the firm had done all it was going to do. Perry Homes had provided surface drains, patched the walls and sealed gaps in the concrete, but made it clear it bore no more responsibility for the Culls' problems.

In October 2000, the Culls filed suit against Perry Homes. But before the case went to trial, the couple had second thoughts and moved to have the matter decided by an independent arbiter because, now in their 60s, they feared spending their retirement years in a long legal battle.

The homebuilder resisted and both sides went to court. A district judge, the appeals court and the Texas Supreme Court all ruled for the Culls and directed that both sides go to arbitration.

After several days of hearings in 2002, an arbitrator directed Perry Homes to pay the Culls more than $800,000. That includes the cost of the house, punitive damages and legal costs. With interest, the award would now top $1.3 million.

In a lawsuit, discovery rules govern how the two sides must share information. The Culls' attorney says the couple got nothing in discovery it couldn't have gotten in arbitration, but Mr. Holm says the Culls got information the company didn't, and that the arbitrator was biased against the homebuilder.

"There appears from our perspective to have been very real bias on behalf of the arbitrator," said Mr. Holm. "And there is a real question about when the plaintiff waived their right to arbitration."

A district court rejected those arguments. Perry Homes took the case to the appeals court, which also ruled for the Culls. The homebuilder again appealed to the Texas Supreme Court, which has scheduled a hearing for March.

The attorney for the Culls said he was surprised the high court, which accepts a fraction of the appeals it gets, agreed to take the case.

"I'm certainly concerned there's politics at play," said Dallas attorney Van Shaw. "The law's clear. We're entitled to win and lots of courts have seen it that way. So I can't reach any other conclusion than it's politics."

Mr. Holm denied that. He said public disclosure of Mr. Perry's contributions to all nine judges makes his legal burden more difficult "because every justice there knows there's some kind of donor relationship."

"I have faith in all the justices and ... the justice system in Texas that things are being decided on the merits," he said.

The court does not explain its reasoning for accepting a case.

Major donor

For Mr. Perry, questions about whether his contributions affect public policy are common.

The Houston homebuilder gave more than $19 million to Republican politicians in state and federal races in 2006, including $6.7 million to Texas candidates.

He is the largest political contributor to Gov. Rick Perry (no relation). And in 2003, Perry Homes and other builders sought help from the Republican governor to create a new state agency, the Texas Residential Construction Commission, to settle homeowner disputes.

Builders touted the agency as a better way to resolve disagreements. Critics called it another obstacle for consumers.

Under state law, the agency can't force homebuilders to fix faulty houses. But homeowners must first go through the complaint process before being allowed to seek arbitration or litigation.

After signing the bill into law, Gov. Perry appointed Perry Homes' general counsel, Mr. Krugh – the lawyer who initially wrote the Culls to say their home wouldn't be repaired – to lead the commission that decides disputes.

The Culls say they have no issue with Mr. Perry's politics.

"I'm an economic conservative. I probably vote the same way Bob Perry does economically," said Mr. Cull.

But the toll on them is mounting, and they hope the dispute is nearly over. A favorable ruling would end the matter. But if the high court vacates the arbitration award, it would send the case back to district court for litigation that could take several more years.

In the meantime, Ms. Cull said recently, "We can't fix our house. We can't sell our house. The warranty company can't fix or sell the house."

They've kept up the appearance of the home, patching and painting. Some windows won't open. Some doors have to be jerry-rigged to close. Ms. Cull worries about how any future shifting might affect gas pipes and electric lines.

"These are the rooms where your grandbabies are taking a nap," she said.

Financially, the couple can't move. Mr. Cull, who had planned to be retired by now and faces some health issues, has gone back to work managing a small pharmaceutical business in Arlington. Ms. Cull continues to work as a liaison for a physicians' group.

"I'm no legal eagle. I'm just a mother and a grandmother and homeowner who would like to have some freedom from stress and fear over where I'm going to live the rest of my life," said Ms. Cull. "When you're in the final phase of your life, that's pretty frightening."

She shrugged. "We're kind of like in homeowner purgatory. And we've been here for 10 years."

Here's how much Houston homebuilder Bob Perry and groups associated with him have given to current members of the Texas Supreme Court:

Chief Justice Wallace Jefferson: $73,000

Justice Don Willett: $105,000

Justice Dale Wainwright: $67,467

Justice Phil Johnson: $25,000

Justice Scott Brister: $21,500

Justice David Medina: $20,000

Justice Nathan Hecht: $17,000

Justice Paul Green: $6,250

Justice Harriet O'Neill: $5,000

Total: $340,217

NOTE: Includes contributions from January 2001 through October 2006 from Bob Perry and two Perry-related political action committees, Hillco Partners and Texans for Lawsuit Reform.

SOURCES: Texas Ethics Commission; Dallas Morning News research