Home builders, Realtors want bill to limit negligence lawsuits

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Home builders and Realtors say Senate Bill 220 would reduce frivolous lawsuits. Critics say it strips homeowners of much of their right to sue builders for problems with their dwellings.

The bill, sponsored by Sen. Curtis Bramble and Rep. Stephen H. Urquhart, passed unanimously in the Senate. Now in the House, it is igniting controversy.

Neither Bramble, R-Provo, nor Urquhart, R-St. George, could be reached Wednesday for comment. But Taz Biesinger of the Utah Home Builders Association, the bill's chief supporter, said it would ensure that even if courts rule otherwise in coming years, homeowners in the state generally would be able to sue a builder only for breach of contract - which offers limited damages - and not negligence.

A negligence complaint can demand a larger payout, such as compensation for hotel bills for time a home was uninhabitable and for the stress of having to live elsewhere.

Attorneys who represent homeowners associations are enraged by the measure.

"All the builders are trying to do is limit their liability," said Michael Miller of Vial Fotheringham in Sandy. "It's just ridiculous."

He and others didn't know about the measure until a day after it passed the Senate Feb. 20, and they are trying to mount a fight against it.

Rich Thorn, president and CEO of Utah's Associated General Contractors trade group, said the measure isn't intended to be anti-consumer.

"This isn't something that tries to diminish any rights that homeowners or homeowners associations enjoy," Thorn said. He contends that the measure simply attempts to "codify" - or essentially reinforce - issues on which the courts have already ruled.

Thorn said the bill also is intended to prevent class-action lawsuits "based on small defects" and that "go after anybody who ever took part in a (construction) job."

That's not so, said Peter Harrison, a lawyer with Vial Fotheringham. He said if the bill becomes law, it would be more difficult for anyone who buys a new home to sue the builder for a construction defect - even one serious enough to render the property unlivable.

Harrison said the bill also makes it virtually impossible for a townhome or condo owner, or that project's homeowners association, to sue a builder for defects in their unit. He contends it prevents subsequent owners of properties to bring suit over a major defect.

Lincoln Hobbs, a lawyer specializing in homeowner and community associations at Hobbs & Olson in Salt Lake City, said home builders are being disingenuous in their characterizations of the bill.

"It isn't that they don't want frivolous lawsuits - they don't want any lawsuits," Hobbs said. "If all they are trying to do is codify existing law, then why are they doing this?"

Aside from the home builders association, the issue has the support of the Utah Association of Realtors.

Christopher Kyler, the association's CEO, said his group is in favor of the measure, chiefly because it believes frivolous lawsuits drive up the cost of home construction and homeowner's insurance.

"This absolutely does not make it more difficult for a homeowner to sue a builder," Kyler said.

Lehi townhome owner Cassandra Casey, who serves on the board of her homeowners association, said she opposes Senate Bill 220.

Casey said her association recently hired a company to analyze problems property owners were experiencing in her development.

"They basically said the problems were based on shoddy construction and it would cost millions of dollars to fix all the homes." That led to a lawsuit against the developer.

"What I'm concerned about is other communities that may be in the same position. If this bill passes, they aren't going to be able to file a lawsuit like we were able to. What the home builders are trying to do just isn't right."

lesley@sltrib.com