Texas Couple Wins $51 Million for Defective $250,000 House
A decade-long battle has carried the retirement-age couple through the courts, arbitration and all the way to the Texas Supreme Court. Though they've won every round, their home is still defective and the builder, Bob Perry of Houston-based Perry Homes, swears he'll appeal... "I think his heavy-handed efforts were one of the main reasons the TRCC went away," the independent homebuilder said.

Texas Couple Wins $51 Million for Defective $250,000 House
By Candy Evans
May 26, 2010

A Texas couple is still in home-repair purgatory even after winning a $51 million verdict against a major homebuilder in March.

A decade-long battle has carried the retirement-age couple through the courts, arbitration and all the way to the Texas Supreme Court. Though they've won every round, their home is still defective and the builder, Bob Perry of Houston-based Perry Homes, swears he'll appeal.

    
But for now, the lawyers appear to be keeping mum.

The verdict was a bonanza win for Bob and Jane Cull of Mansfield, Texas, who bought a 2,800-square-foot home from Perry Homes in 1996 and have been fighting the builder ever since. The Culls paid $233,730 dollars for the place on a golf course southwest of Fort Worth, and then, as soon as they closed, their home showed cracks and other foundation problems.

Leaves and critters came in the house due to poor-fitting doors; roof supports came loose in the attic; fissures appeared in the walls and tiles. Engineers said the home's foundation was defective, even those from the warranty company contracted by Perry Homes.

The Culls claim that Perry only applied "cosmetic fixes." A Tarrant County, Texas jury -- that's the home of Fort Worth, the Stockyards and Billy Bob's Texas -- awarded them $51 million in damages on March 3.

It is not clear why Perry continues to wage what is clearly a very expensive legal battle -- a spokesman from Perry refused to comment -- but it could have something to do with his personal convictions. He's the nation's most generous individual political donor and a leading advocate of laws to limit court awards, or tort reform. He's also a major donor to politicians and judges, particularly Republican candidates in Texas. And he donated more than $340,000 to the nine Texas Supreme Court justices who heard the Culls' case.

It could be that the Culls angered Perry when they decided to seek arbitration. Before the case went to trial the first time, back in 2000, the couple chose arbitration due to their age -- both are in their 60s. But Perry resisted and both sides went to court.

They ended up in arbitration anyhow after a district judge, the appeals court and the Texas Supreme Court all ruled in favor of the Culls.

In 2002 an arbitrator told Perry Homes to pay the Culls more than $800,000 in damages plus interest, which topped $1.3 million. But the former Swift Boater refused to pay up; so, too, did Warranty Underwriters Insurance Company. This time the Texas Supreme Court -- every single member of which got some dough from Bob Perry -- refused to rule in the couple's favor: In 2007 it vacated the arbitration award and kicked it back to the lower court, which is where it landed in early 2010.

All through the legal process everyone agreed that Bob Perry (who is no relation to Texas Gov. Rick Perry but is one his largest donors) was liable for repairing the home. That is, until they got to that friendly Supreme Court of Texas the second time around.

Local homebuilders are distressed over the verdict for many reasons. What a guy like Bob Perry has done, said one who wished to remain off the record, is ruin it for the independent home builders.

And now the Texas Residential Construction Commission (TRCC) has been dismantled, and some homebuilders think the reason why might be Bob Perry.

"I think his heavy-handed efforts were one of the main reasons the TRCC went away," the independent homebuilder said.

The TRCC was a state board to monitor home builders -- sort of. While it could not force homebuilders to fix defective houses, it could force homeowners to first go through a complaint process before seeking arbitration or litigation. Builders liked it because it prevented costly lawsuits which, they argue, drive up costs.

Gov. Perry signed the TRCC into being in 2003 and appointed Perry Homes' general counsel, John Krugh, to lead the commission. The TRCC was dismantled in February of this year.

"It was perceived that that agency was nothing more than a shell for the big builders like Perry," said the local builder. "What I really worry about is what kind of damage this does to the rest of us homebuilders – if we're perceived as being flush with cash, then what's to stop John and Jane Homebuyer from firing up the trial lawyers and suing at the first sign of a problem?"

Anthony Holm, Perry's spokesman, told the Fort Worth Star Telegram that the Cull's $51 million award is "equivalent to every single resident in Texas depositing $2 into the lawyer's bank account." He said it would be appealed.

Perry Homes reported revenues of $420 million in 2002 -- probably way more during the boom. There have been unsubstantiated reports that at one point Bob Perry offered to buy the Culls home back.

http://www.housingwatch.com/2010/05/26/texas-couple-wins-51-million-for-defective-250-000-house/

Even if he would have offered them $5 million, it likely would have been cheaper than his legal fees.