New Home Nightmares: First Coast News Investigates

A First Coast News investigation has found that some new homes — including those in very prestigious communities, with half-million dollar price tags — are plagued with construction defect allegations, leading to massive costs to homeowners, and years of legal wrangling. All this week, First Coast News looks at why the problems exist, why they are hidden behind a veil of secrecy, and what you need to know to protect yourself — before you buy.

Legal setback for homeowner

JACKSONVILLE, Fla. — Each year, tens of thousands of people buy new homes in Florida. Most do so with the belief that a new home will have fewer problems and headaches than an older one.

But a First Coast News investigation has found that some new homes -- including those in very prestigious communities, with half-million dollar price tags -- are plagued with construction defect allegations, leading to massive costs to homeowners, and years of legal wrangling.

For homeowners, publicizing these problems comes with its own cost -- making it harder to sell homes and causing property values to drop. But there are also restrictions in almost every new home contract, which tend to keep construction defect claims out of the courts -- and out of the headlines.

All this week, First Coast News looks at why the problems exist, why they are hidden behind a veil of secrecy, and what you need to know to protect yourself -- before you buy.

New Home Nightmares: Part 1 - The tip of the iceberg

New Home Nightmares: Part 2 - Living in squalor

New Home Nightmares: Part 3 - "We don't know who built this house"

New Home Nightmares: Part 4 - What's the deal with stucco?

"Outrageous": Lawmaker says secrecy hurts homebuyers

Homeowner loses $1.16 million fight against homebuilder

A First Coast News investigation has found that some new homes — including those in very prestigious communities, with half-million dollar price tags — are plagued with construction defect allegations, leading to massive costs to homeowners, and years of

Part 1: The tip of the iceberg

Elizabeth Walsh moved to the south Jacksonville community of Bartram Springs for the same reason many of her neighbors did: she knew other young families there. She loved the homes. And she wanted to be a part of the vibrant, amenity-filled development.

"We thought it would be a safe bet," says Walsh of their decision to buy the 2-year-old, 4-bedroom house. She and her husband even paid for a home inspection before signing the contract. "That's why you buy a new house," she observes, "because you don't want to have problems."

But the couple's care and caution – to say nothing of the home's almost $400,000 price tag -- weren't enough to protect them from a structural defect of massive proportions. Just 8 years after the house was built, Walsh paid tens of thousands of dollars to rip off the back of her house, to replace a wood frame so damaged by wood rot that -- as demolition videos show -- the studs could be ripped out by hand.

"It was just a very stressful time," says Walsh, whose daughter's nursery was one of the rooms that had to be torn apart. "The whole back of the house, from upstairs on down, had to be ripped out."

First Coast News first interviewed Walsh in March, when she was speaking against a bill that would have reduced from 10 to 7 years the period in which homeowners can sue their builder for structural defects. The decision to change the period of liability, known as "repose," would have left homeowners like her without legal recourse. (The bill died in committee after our story aired.)

But what we didn't know at the time was the Walsh home is the tip of the iceberg – one of more than 100 homes in Bartram Springs built by the same builder – Taylor Morrison – and which, according to claims made in court filings, have exactly the same problem.

According to lawsuits by 122 homeowners, their Taylor Morrison homes are plagued by construction defects, primarily failing stucco. According to the claims, the stucco was applied too thin, or not to code, causing the stucco to crack, which in turn allowed water to penetrate and destroy the wooden structure below.

"The problem here in Bartram Springs is there are a lot of these houses," says Ron Woods, a licensed professional engineer who has worked in Jacksonville for 35 years and has inspected many of the Bartram Springs homes. "These homes are intended to last 40, 50 years. We see them falling apart between 3 and 10 years."

According to lawsuits by 122 homeowners, their Taylor Morrison homes are plagued by construction defects, primarily failing stucco. According to the claims, the stucco was applied too thin, or not to code, causing the stucco to crack, which in turn allowed water to penetrate and destroy the wooden structure below. "They're very appealing," says Ratchford of the well-appointed homes. "The problem is when you realize it's almost like a Hollywood set. What we're seeing, kind of across the board, is shoddy construction."

Bartram Springs Homeowners Association declined to comment for this story, as did Taylor Morrison, citing ongoing litigation. But despite the large number of lawsuits filed, only one case is currently in the court system. The rest have been referred to arbitration, a private dispute proceeding that tends to limit damage awards, and is conducted in secret.

Arbitration was created as an alternative to court -- a way for businesses to manage complicated disputes in specialized fields. Ideally, it offers cheaper, faster resolution, with the benefit that the decision makers – or arbitrators – have a fertile understanding of the industry in question.

In recent years, however, arbitration has become common in consumer to business disputes – including home construction. Virtually every new home contract requires that homebuyers "waive the right to a trial by jury." And because arbitration is a private process – records, proceedings and outcomes are all secret – the effect is a veil of secrecy surrounding construction defects complaints.

"No business likes the publicity of a lawsuit," says Jacksonville real estate and construction lawyer Barry Ansbacher. "[Arbitration] is kept private, so even if things are said that would be embarrassing to the companies, that arbitration clause makes sure it doesn't go beyond the room."

For homeowners, that means it can be difficult if not impossible to find reliable information about a builder. Says Ansbacher, "I don't believe there is any readily accessible place go on a website and say how many complaints [have been made] against a [builder]."

The claims against Taylor Morrison homes in Bartram Springs are unique, because attorneys chose to file the original complaints in civil court – despite the fact the contracts require arbitration. The judge redirected them to arbitration, but the civil court filings gave the complaints at least one public airing.

Aside from those cases, many of which are still being heard, one Bartram Springs case managed to escape the constraints of arbitration – thanks to a typo. Whereas most homeowners "waive the right to a jury trial," the contract said the parties "waived the right to waive the right" – a mistake that allowed the homeowner to sue in open court. That case opened a rare window on a typically secret proceeding, and also led to a significant defeat for the homebuilder.

Lawyers for the homeowners were able to show that person who signed the home's building permit didn't actually work for Taylor Morrison when the permit was pulled. A judge determined that meant the company was operating as an unlicensed contractor when it defectively constructed the home, a determination that entitled the homeowner to triple damages plus legal fees (more on that later in this series). The case also set out a series of allegations that included significant stucco failure, and extensive structural problems.

The company admitted construction negligence and agreed to pay $200,000 to repair that house, but is fighting the $1.16 million award of punitive damages and legal fees. That appeal is currently before the First District Court of Appeals. But the company got a rough reception during a recent – and extremely rare -- court proceeding in March.

"You don't have a very sympathetic client here," observed Judge James Wolf, when company attorneys acknowledged construction of the home received little supervision – and none from Lisa Steiner, the person whose signature is on the building permit. The permit was pulled in April 2004; Steiner resigned in January (more on that later in Part 3) – a fact judge Robert Benton labeled "a farce."

But that case is unique. In most instances, construction defect claims are kept out of the courts – and out of the public eye. Meaning not only are the proceedings themselves secret, so are whatever explanations companies like Taylor Morrison might offer.

"Things that are going on in the arbitration aren't generally known in the community or the city at large," says attorney R. Casey Ratchford. "People don't realize that these problems have happened in other subdivisions, so they don't anticipate that it could happen to them."

It was supposed to be their dream home – backyard pool, spacious kitchen, extra bedrooms for aging parents. But the house on Silver Glen Drive has become a homeowner's nightmare.

Part 2: Living in squalor

It was supposed to be their dream home – backyard pool, spacious kitchen, extra bedrooms for aging parents.

But the house on Silver Glen Drive has become a homeowner's nightmare. For almost a decade, the residents of this $334,000 Bartram Springs house have lived in squalor – holes punched in hallways, insulation hanging out of walls, rooms destroyed by destructive structural testing.

"It consumed me," says homeowner Carol Ecos, a registered nurse who says she missed 150 hours of work between the Summer of 2006 up until 2008 coping with construction issues. "It was affecting everything: My work, my emotional stability. It pushed me over the edge."

"Put it this way," adds her attorney, Kevin Schoeppel. "This was their dream home. They had it built to specifications, and they moved into their dream home – and it turned into Swiss cheese."

And yet, in a strange way, Carol Ecos is lucky. Unlike every one of her neighbors, and just about every single new home owner in Florida, when she discovered widespread structural defects, she was allowed to sue her homebuilder.

Access to courts seems like a fundamental right, but most homebuyers give up that right voluntarily. Virtually every new home contract requires homebuyers to waive the right to sue, and instead settle any dispute in arbitration -- a private dispute resolution process that tends to limit damage awards, and is conducted in secret.

"The problem I have with arbitration is it's not an agreement both parties are making," says Barry Ansbacher, a real estate and construction lawyer who has represented both homebuilders and homeowners. He says that while buyers voluntarily sign the contract and therefore agree to the arbitration, in reality, they don't have much choice.

"It's take it or leave it," he says. People might object, but, "in the world of construction, the answer is, 'This is our form, and if you want to work with us, sign here.'"

In that respect, home contracts are as unalterable as most consumer to business deals. "Next time you go rent a car," Ansbacher jokes, "ask the person at the counter that you'd like to change paragraph three and make a tweak to paragraph seven, and you're probably going to be taking the bus."

Aside from being secret, arbitration sessions are quite different from court proceedings. They are run by panel of people with industry expertise – but not necessarily any legal knowledge. There is no right to appeal. And homebuyers have little choice but to accept the outcome.

For Carol Ecos, it was literally a typo that freed her from arbitration. In standard contract language, you "waive the right" to a trial by jury. The Ecos' contract said the homeowners, "waive the right to waive the right to a trial by jury." A judge agreed the double-negative obviated the limitation.

The effect of that ruling was twofold: One, it meant all filings would be public record. Two, it allowed the homeowners to sue under the state's unlicensed contracting statue, making them eligible for triple damages, plus legal fees. (Taylor Morrison declined to discuss the case, citing ongoing litigation.)

But most homeowners aren't so lucky. The reality is that when it comes to home construction defects, repairs are so expensive, homeowners are reluctant to sue and incur legal fees. Attorney Casey Ratchford, who along with Schoeppel is representing 122 homeowners in the Bartram Springs neighborhood -- all living in Taylor Morrison homes -- re-stuccoing homes can run between $140,000 to 190,000, he notes.

"And the more they spend on an attorney, the more it eats into whatever [reimbursement] they eventually get. So they're not going to be able to recover enough to fix their houses."

Ron Woods, licensed structural engineer involved in the Bartram Springs litigation, agrees, adding that in 35 years in the business, he's never seen a homeowner recoup the full cost of a construction defect repair. "Most homeowners can't afford to make those repairs."

"Most people in America are 31 days from bankruptcy," observes Schoeppel.

Warranties would appear to cover stucco problems, but that's often not the case. Most homebuilders offer a shorter, initial warranty – two years or less – which expires before most stucco problems manifest themselves. (Stucco generally fails in the 5th to 7th year, which is when moisture damage to the metal lath behind causes it to corrode and break apart.) Structural warranties are longer, but are typically limited to claims that make the house uninhabitable – not the case with most stucco problems.

Ecos says the company's response to her stucco problems was to offer cosmetic repairs -- to cover the problem with patch and paint, rather than strip and re-stucco the house. She says she refused because stucco doesn't adhere well over existing stucco and paint – and the problem wasn't just a surface concern.

In fact, a structural survey of the Ecos house found much bigger problems. Although the two-story house was engineered for 89 hurricane rods – the metal ties that connect the foundation to the roof – the survey found 46 were loose and 13 simply "missing." The report concluded the house could therefore be "compromised" in a 66.8 mph wind.

"A 60-mile-per hour wind could happen in a heavy thunderstorm during the summer," says Woods.

The report concluded, "The house should not be occupied in wind events which created a three second wind gust in excess of 70 mph" – a dire warning that the homeowners have simply had to live with.

"They had nowhere else to go," says Schoeppel. "We didn't know what to tell our client other than: You need to be careful in that house."

Shortly before trial, Taylor Morrison admitted the negligent construction allegations, and agreed to pay $200,000 to repair the home.

But Ecos' lawyer pursued – and won – a separate claim against the company, alleging what happened wasn't just a mistake, but a violation of Florida law. That's because the employee whose signature appeared on the building permit for the Ecos house didn't even work for Taylor Morrison at the time.

A judge agreed that meant the builder was operating as an unlicensed contractor and awarded an additional $1.16 million.

Taylor Morrison disputes that decision, and has appealed, but Carol Ecos, who has been waiting for resolution for more than 10 years, blames the company for dragging its feet through endless legal delays.

"How is that? The small guy gets screwed, but this company with billions of dollars is allowed to keep pushing it back and keep pushing it back and basically drive you into bankruptcy."

Court documents - Final Judgment:

Part 3: "We don't know who built this house"

It's clear from the outside that something is very wrong with Carol Ecos' house. Black lines outline cracked stucco, plastic sheeting encases window frames.

Inside, it's not much better. The smell of mold is strong enough that Ecos' dog sitter wears a mask when he visits. The roof is so poorly attached, an engineering report found it could rip off in as little as a 67 mile per hour wind. Ecos' insurance company even refused to insure her house in a hurricane.

So how does a home like this pass inspection?

We asked Tom Goldsbury, chief of the city's Building Inspection Division. He signed the home's certificate of occupancy, which signifies a house has passed all inspections and is safe to occupy. But he says the seven inspections the house underwent are no guarantee of quality. "[Inspectors] are not performing quality control," he says.

"They are doing a snapshot in time: As of that day, on that 5 minutes, half hour, one hour time they're at that site, whatever they see and whatever they're there to inspect is up to code."

In fact, city inspectors didn't even conduct the inspections that Goldsbury codified when he signed the home's certificate of occupancy. Taylor Morrison hired its own private inspectors for the roughly 400 homes it built in Bartram Springs, as state law allows.

Trying to figure out who is responsible for the home's many flaws is complicated by the fact that the building permit is signed by somebody who never set foot there – and didn't even work for Taylor Morrison at the time. By law, permits are to be pulled by a licensed contractor or qualifying agent, and that contractor is to "direct supervise manage and control" construction. At the Ecos house, the permit was signed by Marie Lisa Steiner on April 30, 2004 -- four months after she quit her job at Taylor Morrison.

"We don't know who pulled the permit," says Kevin Schoeppel, who represents Ecos and 122 other Bartram Springs homeowners. "We don't know who built this house."

Schoeppel calls the signature a "fraud," an assertion he made in court. But a March hearing before the First District Court of Appeal, Taylor Morrison's lawyer Kristin Norse disputed that characterization.

"If look at the quote from trial court judgment, it was not that we 'fraudulently obtained' the permit, it was that we obtained it without Miss. Steiner's position [sic]. I'm not going to dispute that."

Judge James Wolfe pressed her, asking if they had obtained the permit "without her knowledge or permission?"

"Right," Norse conceded, "without her knowledge or permission."

Company attorneys argued that the fact that Steiner didn't actually supervise construction wasn't relevant. They cited a separate state statute that requires a homebuilder to have a licensed contractor or qualifying agent on the day a contract is signed. And on the day the Ecos' contract was inked, Taylor Morrison did have a qualifying agent – not Steiner, but a company executive named Doug Guy.

An expert representing the homebuilder also argued in court that it wasn't necessary for a licensed contractor to actually supervise construction, but could reasonably oversee a project while living in Jamaica, serving in Afghanistan -- even if they were blind.

Attorneys further argued what's known as a "developer's exception" – which essentially says that it is not necessary to be a licensed contractor to build a home. Typically, this exception is used by individual landowners building on a single lot. But the company has asserted this rule, essentially for all the land it owns in the state, arguing it does not need to be licensed to build.

Judge James Wolf at the 1st DCA seemed skeptical of the company's arguments, telling attorney Norse, "you don't have a very sympathetic client here." Judge Robert Benton labeled the circumstances surrounding Ecos home "a farce."

Farce or no, it may not be unique. Steiner's signature appeared on at least 12 other permits for homes in Bartram Springs – sometimes months after she quit her job at Taylor Morrison.

"It's a crime to submit a document that's not authentic or to a city agency," says Schoeppel. He brought the fraud allegation to the state attorney, but says he was told the 4-year statute of limitations on fraud had expired. He also filed a complaint with the state Department of Business and Professional Regulation, which regulates construction licensing. But the agency's Construction Industry Licensing Board can only act against a license holder – in this case Steiner – not the builder that used the permits. The agency chose, without explanation, not to discipline Steiner.

Taylor Morrison released a statement yesterday, acknowledging stucco problems at Bartram Springs, but did not answer questions First Coast News submitted more than a month ago about Steiner and the building permit issue.

Read the statement below:

"Taylor Morrison is committed to quality work and customer satisfaction. As a standard practice, we ensure homeowners are contacted within 24-48 hours of a customer service request, followed by an appointment with a trade partner to examine the reported issue.

"Service repairs are then completed within a week to 45 days, based on the complexity of the issue. We proactively offered to remedy any stucco issues in the Bartram Springs community that fell below building standards immediately after they were brought to our attention.

"However, certain homeowners who were guided by their legal counsel decided to pursue monetary damages rather than accept the company's offer to repair their homes. Despite multiple attempts to repair these homes, Taylor Morrison was denied the ability to do so. Furthermore, Taylor Morrison continues to offer to undertake the necessary repairs of the homes currently in arbitration as we have done with other homeowners who chose not to pursue monetary damages.

"The stucco issues in some of the Bartram Springs homes are not a reflection of the normal standards and quality of Taylor Morrison's homes. The company has a solid history of going above and beyond industry standards to address homeowner concerns, and our outstanding customer satisfaction rate is one of the highest in the industry and a testament to our commitment to superior service.

"Our ongoing desire is to remedy these issues for our valued homeowners in the Bartram Springs community and we'll continue to take necessary steps to do so."

Part 4: What's the deal with stucco?

All this week, First Coast News has been reporting on structural defects in new homes. In every case, the root of the problem has been failing stucco. But the material is older than the state of Florida. And it's basically a cement wall -- a simple veneer of cement, sand and water.

So why is stucco causing so many problems?

In part, the problem is how it's being used. Unlike stucco over brick or masonry, the arrival of wood frame construction created a new challenge for stucco – making it easier for it to shift, crack and allow water intrusion, and wood rot.

The problem has been surprisingly persistent. It's been more than 10 years since the residents of the Southside Jacksonville neighborhood of James Island tried to file a class action suit against their homebuilder, Arvida, citing cracked and failing stucco. As First Coast News reported in 2003, the builder acknowledged the homes might not, strictly speaking, match state code. A letter to homeowners said, "Although we believe your home is being built to meet or exceed building practices, some homes upon completion may differ from the technical requirements of Florida's building code."

Barry Ansbacher represented the residents of James Island. And although a judge didn't allow the case to proceed as a class action lawsuit, he says the litigation proved eye opening.

"We found those problems were systemic, not only in that neighborhood but throughout North Florida," he says. At the time, he notes, it wasn't even possible to buy the hardware to make sure stucco was applied correctly -- 7/8 of an inch thick, as required by law. "They only sold ½ inch accessories or smaller in this area. You couldn't even purchase a 7/8 inch accessory. So it was clear the industry was just blatantly ignoring their obligation under the building code."

Casey Ratchford, a Jacksonville attorney, who represents hundreds of homeowners on the First Coast with failing stucco, including in the south Jacksonville neighborhood of Bartram Springs, says problems start when it's applied too thin, or too quickly. "It's not rocket science but it is a complex process. And it's hard work. What you have is homes being built by laborers, who are not trained correctly, and don't know what they're doing."

New Home Nightmares: Part 4 - What's the deal with stucco?

Stucco goes on in three coats, each of which is supposed to dry for 48 hours, so it's difficult to supervise. Florida doesn't require a license or any training to apply stucco. And there are no stucco inspections required during home construction.

Tom Goldsbury, chief of the city's Building Inspection Division, was in that post when James Island problems developed, and has heard about more recent problems in Bartram Springs. Asked why it continues to be such a persistent problem, he says when bad stucco surfaces, "there's a good chance people were moving too fast, hurrying job to job, and maybe didn't spend the time they should."

He adds that the boom years in Florida real estate were bad for home quality. "There was a 12-month period back in '05 '06 where we did 9,000 new houses a year. Now we do 2,500. That just tells you how fast things were going. And maybe people didn't take as good a care as they should've."

Goldsbury says there's little he can do to fix ongoing stucco problems. Although he personally signs each certificate of occupancy, indicating a house has passed all required inspections, he notes that those seven inspections are often conducted by private consultants, hired by the homebuilder --- a seemingly conflicted arrangement that is nonetheless allowed by state law.

Even when city inspectors are involved, though, Goldsbury says they don't have the manpower to oversee each stucco application. "It's just something can't do. We're not required to do, and we can't do."

In fact, the city could do more. State law allows for extra inspections, and communities in South Florida, like Broward County, have added them -- in part to cope with a wave of stucco failures. Goldsbury acknowledged that the city has discussed adding inspections, but for now: "You've got to count on your builder to see that it's done right."

Unfortunately, that doesn't appear to be happening. Ansbacher says that when it comes to stucco over wood frame construction, "it is almost universal you will find there to be problems with the stucco application."

And simply passing inspection, he says, can be almost meaningless. "I've been doing construction litigation for 25 years, and the vast majority of work I've done is for completed projects. And every one of those projects is completed has a Certificate of Occupancy, which means it had to pass inspection."

We asked the Northeast Florida Builders Association about stucco problems. Executive Director Corey Deal says, "we believe it's a good product, it just needs to be applied properly." He says NEFBA, prompted by litigation elsewhere, recently updated the stucco bulletin, which translates building code into layman's terms. He hopes that makes it easier for workers in the field. But he says that's the extent of the group's role -- and it's no guarantee it will prevent future stucco failures.

"Nothing is 100 percent foolproof," he says. "It depends on a lot of variables down the line, checks and balances."

But with repair costs that range from $40,000 to $190,000 to rip off and replace stucco, failure – for most ordinary homeowners – is not an option.

"They feel stuck," says Ratchford of homeowners with failing stucco. "The biggest investment that they've made is now worth half of what it should be, worth through no fault of their own. And I don't think that's what they're expecting when they're buying a brand new house."

Part 5: "Outrageous": Lawmaker says secrecy hurts homebuyers

Over the past few months, we've reported on the contract quagmire that can trap homeowners who discover structural defects – leaving them with huge costs and few legal options.

Our investigation has gotten a lot of reaction from homeowners. But lawmakers are paying attention, too.

"I think what they're going through is pretty outrageous," says State Rep. Charles McBurney about the residents of Bartram Springs -- a community on the edge of the Duval/St. Johns county line, and at the center of the First Coast News investigation into construction defects.

Some 122 homeowners living in Taylor Morrison homes in Bartram Springs have filed allegations in court complaining of widespread stucco failures, water intrusion, wood rot – even structural infirmities that could potentially destroy a home.

A seven-year veteran of the Florida House, McBurney's district includes Bartram Springs. And while he was previously unfamiliar with the scope of the community's problems, he took special interest in the series.

"This is their home!" he says. "This is their home. It's not just money, this is the place where you want to feel safe, and protected physically."

McBurney told First Coast News he was concerned about the financial and emotional burdens placed on his constituents. But he noted it's also an issue of safety – particularly at one house where a structural assessment found the roof could peel off in a strong thunderstorm.

"A 60-mile-an-hour sustained wind," says Bartram homeowner Carol Ecos, whose home lacks the hurricane rods it was designed to have. "That's what I was told it would take to blow my house over."

"At a minimum they should know that their place is safe," McBurney avers. "Not just that it's built correctly, but that it's safe, and it's safe to others."

But such information is almost impossible to obtain.

For the most part, all new home construction defects are secrets – even widespread ones that affect entire communities – because they are shielded from public scrutiny. Virtually every new home contract requires that disputes between builders and homeowners go to arbitration, not court, meaning none of what transpires is public record.

Protecting new home buyers from defects

Outcomes of arbitration proceedings are not disclosed, nor are the sheer number of complaints pending against home builders. The only reason the Taylor Morrison complaints are public knowledge is because the attorney representing homeowners also filed suit in civil court -- complaints that were ultimately redirected by a judge to secret arbitration, as the contract required. (Taylor Morrison has declined our request to comment for this series. You can read their statement here.)

McBurney believes secrecy hurts consumers' right to know and their ability to research a builder's track record before signing a contract. He wants to find a way for that information to be made public.

"I could see a role for the Legislature for continuing to provide information out there that is accessible to consumers when they are trying to make a reasoned decision," he says, adding rhetorically, "'Is this somebody I want to do business with for probably my most significant investment of my entire life?'"

On June 1, Florida lawmakers head back into special session, one that will largely be devoted to budget and unfinished business from the regular session. But McBurney promises he will explore creating a mechanism for disclosing claims against builders and making that information available to buyers.

"It's something we definitely ought to look at as a legislative body to see what we can do to provide more disclosure, more information to consumers," he says. "I think that's something to always look at -- but particularly (if) you have a situation like you have over at Bartram Springs."

Part 6: Homeowner loses $1.16 million fight against homebuilder

For the past several weeks, First Coast News has been reporting on allegations of widespread structural defects claims in the Bartram Springs community in south Jacksonville.

Now, the only homeowner permitted to bring those claims into open court – instead of secret arbitration proceedings – has suffered a resounding defeat.

The 1st District Court of Appeals in Tallahassee reversed a lower court judge who had awarded the homeowner $1.16 million, plus attorneys' fees. The opinion, issued in late May, leaves homeowner Carol Ecos with a house in shambles – and no money to fix it.

The company that built the home and hundreds of others in Bartram Springs, previously admitted construction negligence in her case, and paid Ecos $200,000 to repair it. But much of that went to pay legal fees in a battle that has lasted nearly 10 years. And much of the structural testing needed as evidence in court could not be repaired until the case's conclusion.

The result is that Ecos is living in a house with failing stucco on the outside, walls that her lawyer compares to Swiss cheese, and structural defects that could compromise the roof in as little as a 66.8 mile per hour wind.

The DCA ruling is based on parsing the statute that deals with unlicensed contracting. The lower court judge determined that since Taylor Morrison admitted it built the home without the knowledge or permission of the person whose name appears on the building permit – and by definition that person didn't "direct, manage supervise and control" construction, as defined in the statute – the company was operating as an unlicensed contractor.

Taylor Morrison appealed that decision. At an April hearing, the three-judge appeals court panel was critical of Taylor Morrison. Noting the company obtained the building permit without the former employee's "knowledge or permission," one judge chided the company's attorney, "You don't have a very sympathetic client here."

But the judges ultimately decided that even though the company "may have violated the law," those violations were "irrelevant" to the claim that Taylor Morrison acted as an unlicensed contractor. The judges determined that the company merely needed to have a contractor or qualifying agent employed at the time the contract was signed – it did – and reversed the $1.16 million compensatory damage award from the lower court.

Carol Ecos was never under any illusion about the difficult legal challenge she faced. "When it first started, people that I knew in real estate business said don't do, because it you're never gonna win. They've got more money, they've got more lawyers."

Ecos says she feels "lied to, defrauded" by the experience. But her bigger concern is that the appeal court decision essentially codifies what the company claimed in testimony – that it's not necessary for the person who pulls and signs a home building permit to actually supervise construction. In fact, the company testified, a contractor can be blind – even live overseas – and still supervise a project.

"It's not so much they're screwing me personally over, but if they are building all these houses, or all houses in Florida and things are just not being done appropriately, something's gotta be done," says Ecos. "We need to do something about the laws, and hold someone accountable."

At least 122 homeowners in the Bartram Springs neighborhood are still fighting to recover costs for what they call widespread structural defects. Those cases are currently in secret arbitration proceedings.

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