STARK & STARK CASE STUDY
“ABC” Condominium Association v. Lookout Builders, LLC, et. al., BER-L-10051-02.*
*In order to preserve our client’s interests in confidentiality, we have used the fictitious designation “ABC” Condominium Association
STARK & STARK’S CLIENT:
ABC Condominium Association
Construction defect litigation
The ABC Condominium is a forty-two unit, six story condominium building located in Hackensack, New Jersey. The exterior of the condominium building was clad with brick facing on the first story with the balance of the structure clad with an Exterior Insulation and Finish System (“EIFS”) manufactured by Senergy. The building has a front plaza finished with brick pavers and planters and a garage/parking area below the building. The roof on the building is a flat style, EPDM roof system.
The ABC Condominium Association is a non-profit corporation comprised of the owners of the condominium units that was established to provide the management, administration and maintenance of the Common Elements of the Association and to promote the health, safety and welfare of the unit owners of the Association.
Construction of the ABC Condominium began in 1988/89 and was completed sometime in late 1991, early 1992. The Sponsor of the condominium was Lookout Builders, LLC. After the construction of the condominium was completed, Lookout Builders controlled the building through majority ownership of units within the building up until approximately May, 2001, when Lookout sold all the remaining units it owned and turned control of the Board of Trustees of the Association over to the independent unit owners via a process known as transition.
The condominium experienced significant water intrusion problems almost from the date of its completion. Unit owners suffered from water leaks through sub-standard windows and in ceiling areas throughout the building. The front plaza area of the condominium, due to improper waterproofing, allowed water to penetrate into the underground garage area, causing significant water damage. Despite multiple complaints from unit owners from 1991 up to 2001, the water intrusion problems were never properly addressed.
After control of the Board of Trustees of the Association was turned over the independent unit owners in 2001, the Board retained Stark & Stark. Shortly thereafter, several engineering firms were brought in to investigate and diagnose the water intrusion problems with the building. Those studies revealed multiple construction defects and damages in the building including improperly installed EIFS cladding, defective windows that were leaking water into the exterior walls, improper waterproofing of the front plaza and associated retaining walls, high levels of water intrusion into and behind the EIFS cladding causing damage to the gypsum sheathing on the building, high levels of mold growth inside the walls of the building, improper installation of aspects of the EPDM roof, as well as other problems.
Stark & Stark’s Construction Litigation Department filed suit on behalf of the ABC Condominium Association in December of 2002. The suit was filed to pursue damages against responsible parties for the cost of correcting all damages to the building and all construction defects.
The defendants in the suit included Lookout Builders, LLC, the Sponsor, Impact Realty Associates, a management company, Senergy, the manufacturer of the EIFS, E.Robinson Group, the distributor of the EIFS, Dorwin Manufacturing, the manufacturer of windows used in the building, J.P. Patti Roofing, a roofing contractor, Concrete Construction Company, a contractor that performed caulking and maintenance work on the building, and several individuals who were appointed by the Sponsor to be Trustees for the Association from 1991 to 2000.
Stark & Stark’s Construction Litigation Department settled the lawsuit on behalf of the ABC Condominium Association for a total recovery of $1,645,000.00. The recovery will be used by the Association to correct the damage to the building.