Residents of Suntop Farms in Enumclaw won a three-year long lawsuit against developer LGI last month.
In short, LGI and its subcontractor, Laer Enterprises, have been ordered to pay dozens of Suntop residents more than $2 million to cover damages to their home after a 2021 snow and windstorm.
“It’s a huge relief,” said resident Annie Nahon, adding that she spent the three years worried that another storm would damage her house, as insurance did not cover faulty construction and paying out-of-pocket was too cost prohibitive. “It should be enough to do whatever needs to be done to the house to make it right.”
And as for Chris Casey of Casey Law, it was one of the best days of his life.
“It’s a huge deal,” he said, adding that he’s a “small fish” in the legal world, and that LGI is the 10th largest developer in the country. “I had everything riding on this case.”
Casey said it’s unknown how often LGI has gone all the way through court or arbitration, or if they did, what the results were. But the success of this lawsuit might snowball.
“I’ve got calls from Texas, North Carolina, Montana, I think, and Arizona, in addition to… other [Washington] LGI communities,” he said.
A TIMELINE RECAP
Back in February 2021, dozens of homeowners in the 289-home development suffered damage to their brand-new homes when a snow and wind storm blew through the Plateau. Some had their roof and siding damaged, while the more unlucky residents had water damage — one couple said it was “like someone dumped a kiddie pool of water” into their master closet and bathrooms.
When a contractor arrived to evaluate the damage on Nahon’s home, she said the contractor “was shocked and horrified” at what appeared to be shoddy work like shingles not being nailed down correctly; another construction expert also said he found that some siding was nailed into the drywall instead of studs.
At least a few residents attempted to cash in on their one-year warranty for their home, but they said LGI considered the damage was caused by “inclement weather” or an “act of God,” neither of which were covered by the warranty.
A class action lawsuit was filed by Casey Law that summer, alleging that LGI failed to comply with building codes and/or product installation requirements in building the homes; that the company breached its contract with homeowners via the one-year warranty; that LGI violated the Consumer Protection Act; and that the company breached Washington state’s “implied warranty of habitability,” with is a landlord’s guarantee that the home is safe to live in.
According to arbitration documents, a judge granted a motion by LGI to move the lawsuit into arbitration instead of going through the court system, in May 2022. At some time before the case was moved into arbitration, homeowners had already settled with a company concerning roof damage claims — according to Casey, the roofers “wrote a big check at the last minute” for homeowner’s to cover the damages and avoid trial. Casey could not go into further settlement details.
But the remaining claims were argued in arbitration, and a hearing was conducted via Zoom on Jan. 22, 2024. There were 13 days-worth of testimony, and closing arguments were held on Feb. 14.
In response to the allegations, LGI claimed that any contract breach claims were barred due to the residents’ purchase and sale agreements they made with the company, that there was a lack of evidence to support their claims, and that the issues homeowners experienced with their homes were caused by an “act of God” and not covered by their warranty.
Additionally, LGI claimed that there was a breach of contract with Laer Enterprises — the subcontractor who built the Suntop homes — and that LGI should receive an award against Laer for the damages to the homes.
In turn, Laer claimed LGI failed to mitigate potential damages by withholding information, and sought a ruling that any damage award for Suntop residents should not be paid for by Laer.
Some unlucky homeowners suffered water damage as well as roof and siding damage during the storm. Submitted photo
ARBITRATION RESULTS
After the hearing, arbitrators ruled on Feb. 23 in favor of Suntop homeowners and approved the claims of a breach of contract with their purchase and sales agreement (PSA), the state’s implied habitability warranty, and the Consumer Protection Act.
“LGI was obligated to build [the homes] to the construction specifications,” arbitration documents read in regard to the breach of the PSA, including following the city of Enumclaw’s building code, which requires siding on homes to be able to withstand wind speeds of up to 120 mph.
And as for the breach of the PSA, arbitrators noted LGI’s sales team pressured to-be-homeowners to “‘take it or leave it’” and did not allow buyers to negotiate the agreement. Casey noted that these people were often first-time homeowners looking to start a family, and “they don’t have the savvy that LGI has,” he said. “LGI knew what they were doing and pulled the wool over their eyes.”
Finally, Washington’s “implied habitability warranty” is an “unspoken promise” by landowners or developers that the a residence is safe to live in.
Arbitrators also found Laer breached its contract with LGI for the shoddy work.
However, an LGI construction manager “knew from working a prior job that Enumclaw had a special 120 mph wind requirement and he did not share that fact with Laer,” so both companies were ordered to pay the above damages — Laer was responsible for 60%, and LGI the remaining 40%. It’s possible that Laer received a higher percentage of the work because, as contractors, they were independently supposed to check in with the city of Enumclaw about any special development requirements.
At the same time, Casey noted that Laer originally attempted to do the repairs for the 2021 storm for free, but LGI took them off the job in order to have residents go through their insurance companies. Several residents confirmed this at the time, but Laer did not immediately respond to comments about this or the ruling in general; LGI also did not return earlier requests for comment.
Total damages awarded to Suntop residents was $2.3 million; individual awards ranged between $23,000 and $38,000 for repairs.
Attorney fees and costs were also awarded to homeowners.
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