New Home Warranty Act - Design and Construction Defects

Mr. Brennan and Ms. Theard represented the developer and design/builder of a 48-unit luxury condominium development against allegations of design and construction defects. The condominium association filed the lawsuit after occupancy of the condos, claiming that, among other things, issues related to terrace drainage, defective windows and terrace doors, and issues with exterior sealants, coating and insulation contributed to water intrusion within the building during various hurricanes. In addition to various theories of negligence, breach of contract and redhibition, the association claimed they were entitled to bring a claim under the New Home Warranty Act for the alleged construction defects, which created the potential for the recovery of attorneys fees. The contractor/developer added several subcontractors to the lawsuit pursuant to contractual defense and indemnity owed on the project. Over the course of the litigation, the association filed suit against the window supplier and manufacturer as well. Mr. Brennan and Ms. Theard filed a motion for summary judgment arguing that a condominium association did not satisfy the definition of an “owner” under the New Home Warranty Act, and as such the association did not have an NHWA claim against the defendants. The Civil District Court for Orleans Parish adopted that argument in granting the summary judgment. The plaintiff appealed the decision to the Fourth Circuit Court of Appeals, who ultimately upheld the lower court’s ruling, again citing the defendants’ argument. The plaintiff then took a writ to the Louisiana Supreme Court, which was denied. The ruling eliminated a major damage in the lawsuit, attorneys fees, and ultimately contributed to a reasonable settlement in the matter. Furthermore, the firm’s client was able to avoid potential exposure and legal fees associated with a projected three-month trial.