An elderly couple who since 2000 has been battling Houston-based Perry Homes over construction defects in their home in suburban Fort Worth, Texas, on Monday were awarded $58 million in damages by a jury in a Tarrant County court. That verdict has been characterized in press reports as a sharp rebuke of Bob Perry, Perry Homes’ owner and one of the state’s most powerful and politically influential businessmen.
The jury awarded the homeowners, Bob and Jane Cull, $7.1 million in actual damages and $40 million in punitive damages against Perry Homes. It also awarded $7.1 million in actual damages and $4 million in punitive damages against the builder’s warranty provider, Houston-based Warranty Underwriters Insurance.
Perry Homes referred all questions to its spokesman, Anthony Holm, who called the verdict “jackpot justice--absurd by any measure and an abuse of the legal system.” He said Perry Homes would “address these matters with a trial court, and if necessary, appeal.” Holm is a principal with Austin-based public affairs firm The Patriot Group, which states on its Web site that it only represents clients that “value the principles of free enterprise, liberty, limited government, private property, and peace.”
This case has a long and litigious history. In October 1996, the Culls purchased a 2,900-square-foot house in Mansfield, Texas, from Perry Homes for $233,730, in which they intended to live in retirement. But by the following January, the house’s foundation was cracking. The couple testified that a representative from Perry Homes had told them that the house was just settling and not to worry. But the problem got worse, causing more cracks in the walls of the home, and windows and doors to jam.
At one point, the Culls had to move out of their house for workers to remediate mold that the Culls assert was caused by a punctured drainpipe that led to water damage in their kitchen wall.
The builder refused to concede that construction defects caused these damages, and the Culls eventually sued Perry Homes in 2000. A year later the couple requested that the case be submitted to arbitration (a switch that Perry Homes unsuccessfully appealed) and were awarded $800,255.
Representatives from Perry Homes continued to insist there was nothing wrong with the house. In his statement, Holm claims that Perry Homes offered to buy back the house from the Culls. (Their lawyer, Van Shaw, retorts that by accepting the builder’s offer his clients would have lost $100,000.)
The builder appealed the arbitration award to the Texas Supreme Court, which in 2008 ruled that the Culls had waived their rights to arbitration by suing the company in the first place. The Supreme Court vacated the arbiter’s ruling and kicked the case back down to the lower court.
Much has been made in the local press that all nine judges on the Supreme Court aggregately had received more than $230,000 in campaign contributions from the billionaire Perry family.
This maneuvering turned out to be a serious misplay by Perry Homes when the jury in that lower court granted the multimillion-dollar award to the Culls. There is also some irony to be found in the fact that builder Bob Perry had been the driving force behind the formation, in 2003, of the builder-friendly Texas Residential Construction Commission, which Gov. Rick Perry (who is not related to the Perry family, but has been a beneficiary of the family's largess) established to minimize construction defect litigation.
(The Texas Senate voted to defund the Commission last year, which is scheduled to halt operations in August.)
Holm depicts the Culls’ lawsuits against his clients as little more than a money grab. They continued to sue, he states, “in hopes that a jury would make them rich.” However, the Culls, who continue to live in the house despite its still-shaky foundation, might not see any money for several years, if at all. A judge still has to sign off on the jury verdict. Perry Homes can petition the state’s Second Court of Appeals and, if it loses, could even get another hearing in front of the state’s Supreme Court. “I can tell you from experience that the war is really just beginning,” Shaw, the homeowners' lawyer, told the Dallas Morning News.
John Caulfield is senior editor for BUILDER magazine.
Learn more about markets featured in this article: Dallas, TX.