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Warrant enforcement attorney fees

Published (2/13/2009)
By Mike Cook
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Eighteen months after moving into their “dream home,” Steve Palmer and his family began to notice water intrusion.

More than two years later the Woodbury resident still has a case pending against the builder to honor a warranty and fix the problem. So far, he said it has cost him about $40,000 in legal fees, and it’ll cost another $50,000 to go to trial and possibly another $12,000-$13,000 if his family wins and the builder appeals. Then they may have to sue to get their awarded damages.

“I had a home warranty,” he told the House Civil Justice Committee Feb. 9 at Woodbury City Hall. “I bought a $583,000 house. I never thought I’d have to spend $40,000-$90,000 to ensure my warranty.”

The committee road trip allowed members to hear from people that aren’t able to make it to the Capitol.

Palmer was one of a dozen people to speak in support of HF211, sponsored by Rep. Marsha Swails (DFL-Woodbury). It would allow homeowners who are successful in suing a builder or contractor for a home warranty violation to receive reasonable attorney fees and any other costs related to the suit. The committee took no action, but is expected to have a future hearing on the issue in St. Paul. There is no Senate companion.

The problem, Palmer and others said, is that builders, contractors and their insurance companies will drag out a case, hoping a homeowner will exhaust their financial resources and settle for less than needed to fix the problem.

Ed Seifert of Shoreview said it cost $151,000 to fix water intrusion damage in his $260,000 home that was under warranty. His contribution ended up being $77,000 when legal fees and other costs were included.

“I thought a warranty meant something, when it’s nothing more than a piece of paper,” said Yvonne McGonigal of Woodbury.

Nobody testified against the bill.

A second bill, HF412, sponsored by Rep. Julie Bunn (DFL-Lake Elmo), would clarify intent of a 2004 law to provide that a lawsuit for a warranty violation must be brought within two years of the breach discovery, but cannot be filed more than 12 years from when the warranty took effect. Bunn said one subdivision in law has a 10-year maximum and some courts have used that shorter timeframe.

It was also held over for potential action. A companion SF470, sponsored by Sen. Sandy Rummel (DFL-White Bear Lake), awaits action by the Senate Judiciary Committee.

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