Lawsuit filed over falling house in Gatlinburg
By: CANDICE GRIMM
Staff Writer
July 02, 2005
GATLINBURG - A lawsuit seeking $2.5 million in damages has been filed in Sevier County against 14 defendants alleged to be directly or indirectly at fault for conditions that are causing a new house to slide down a mountainside

The suit was filed by attorney Douglas E. Taylor, of Sevierville, on behalf of Preserve Real Estate LLC, of Colorado, which now owns the Forest Springs development in which the house is located.

Completed in July 2004 on Lot 26 of the development, the overnight rental unit was sold by Thomas Homes LLC, a Sevierville builder, to Anthony and Debby Larocco, of Erie, Pa. Problems with the house began around Dec. 20, 2004, according to Ron Greene, director of public services for Gatlinburg.

Greene said a water main about 10 feet above the house broke Dec. 20 and the rushing water eroded around the foundation. Soils engineers hired by the city later determined that the house foundation cracked and the house began to move down the mountain because it was partly located on unstable ground. Greene said he believes movement of the house caused the water line break.

Although the house is still standing, the foundation is cracked and the house has tilted. According to the city's soils engineer, it should be demolished or moved because movement of the slope is expected to continue.

The city had condemned the house as being unsafe. According to attorney Ron Sharp, the city's legal counsel, the Laroccos were notified that unless they demolish or move the house, at some point the city would demolish it.

This week the Laroccos filed an appeal to try to keep the city from demolishing the house.

"That means the process the city has been going through will be stopped to give the homeowners an opportunity to come in and say why demolition should not happen," said Sharp, adding that the appeal process may take up to four weeks.

The 14 defendants are accused of "breach of contract, negligence, fraudulent concealment, trespass, nuisance, interference with the plaintiff's right of lateral support to its land in a natural state, and interference with the plaintiff's right to lateral support to its land containing improvements, to pierce the veil of an organized business entity, and pursuant to the Tennessee Consumer Protection Act." The defendants:

Thomas Homes LLC and its owners, Danny and Jeanne Thomas, of Sevierville; Anthony and Debby Larocco; Thomas Buxton, of Irmo, S.C.; David Gilmer, of Irmo, S.C.; MESH Properties LLC, of Irmo, S.C.; Forest Springs Development Partners, of Memphis; Forest Springs Development Co. LLC, of Memphis; Southland Capital Partners, of Memphis; The Southland Companies, of Memphis; Southland Capital Corp., of Memphis; Southland Capital LLC, of Memphis; Karl Schledwitz and his wife, Gail R. Schledwitz, individually, doing business as Forest Springs Development Partners, Forest Springs Development Company LLC, Southland Capital Corp., Southland Capital Partners, The Southland Companies, and Southland Capital LLC, of Memphis; and Terry A. Lynch, individually, doing business as Forest Springs Development Partners, Forest Springs Development Company LLC, Southland Capital Corporation, Southland Capital partners, and/or The Southland Companies, and/or Southland Capital LLC, of Memphis.

According to the lawsuit, Preserve Real Estate purchased Phase I of the development in July 2002 from the Schledwitzes and Lynch, doing business as Southland Capital Partners.

Preserve claims that the previous owners of the development negligently and defectively designed, excavated, and caused negligent and defective construction and installation of roads and utilities, then knowingly transferred the development without informing Preserve of its condition.

Those conditions were discovered in spring 2003, when Preserve was sued regarding the stability of the land between lots 11/14 and 26/27 in the development and subsequently hired engineers to produce and implement a plan to prevent future problems in the affected area. That lawsuit was settled without any admission of liability.

In November 2003, however, Preserve claims that the Thomases "in anticipation of entering into a contract for the purchase of Lot 26," excavated the lot without consulting a geotechnical engineer, although they had experience with building in the development and were aware of the work performed on the slope below Lot 26 and had previously sought geotechnical advice on other projects in the development prior to construction.

Preserve also claims that Buxton and Gilmer, and/or MESH Properties, purchased Lots 27 and 31 "as is," and without performing a feasibility study with regard to the suitability of the property for its intended use, had Lot 27, which is below Lot 26, and Lot 31, excavated by the Thomases. Preserve blames the improper excavation for failure of the water line.

Calls to the Laroccos and their Knoxville attorney Paul Helton were not returned.

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