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HomeMy WebLinkAbout10-2008QUALITY BUILDERS WARRANTY CORPORATION, Plaintiff vs. SAVVY HOMES, LLC Defendant IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION DOCKET NO. NOTICE YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and Notice are served, by entering a written appearance personally or by attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the Court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHQNE ;_ IE OFFICE SET FORTH BELOW TO FIND OUT WHER YOU CAN GET LEGAL HEIR. rr; r ? S"tl CUMBERLAND COUNTY BAR ASSOCIATION J 34 South Bedford St. Carlisle, PA 17013 717-249-3166 C? 7oc y??? ?35aU7 QUALITY BUILDERS WARRANTY : IN THE COURT OF COMMON PLEAS CORPORATION, CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff VS. CIVIL ACTION SAVVY HOMES, LLC DOCKET NO. Defendant COMPLAINT AND NOW, this 22"d day of March, 2010 comes the Plaintiff, Quality Builders Warranty Corporation (QBW) and files the within Complaint against the above named Defendant and avers in support hereof the following: 1. Plaintiff is Quality Builders Warranty Corporation, a Pennsylvania corporation engaged in the Ten-Year New Home Warranty business with its principal place of business situate at 325 North Second Street, Wormleysburg, Cumberland County, Pennsylvania, 17043. 2. Defendant, Savvy Homes, LLC (Builder) is a North Carolina corporation engaged in the new home building business with its principal place of business situate at 6030 Creedmoor Road, Suite 101, Raleigh, NC 27612 3. In March 2009, Builder executed a Builder Agreement with addendum in which Builder agreed to become a member in the QBW Ten-Year Limited Warranty Program and maintain its membership in the QBW Ten-Year Limited Warranty Program for five years to commence on March 18, 2009. A copy of said document is attached hereto incorporated herein and marked as "Exhibit 111. 4. Builder returned the Builder Agreement to QBW at its principal place of business in Cumberland County Pennsylvania, which QBW received on March 9,2009. 5. QBW executed the Builder Agreement March 18,2009, at its office in Cumberland County Pennsylvania and the Builder was approved for membership and Builder was provided with a fully executed copy of the Builder Agreement. 6. Builder has breached its Agreement with QBW by failing to enroll all homes as required. Builder verbally informed QBW on March 17, 2010 that they had joined another warranty program and that they intended to terminate their membership in the QBW program and enroll the homes they construct in a different warranty program. 7. Section B 1 of the Builder Agreement executed by Builder states, "Builder agrees to enroll in the program every home Builder, Builder's Principals, or any entity under Builders or Builder's Principals common control constructs." (See Exhibit 1). 8. The Builder Agreement states in Section B 5, "If Builder fails to enroll any eligible homes as required by this Agreement, QBW may seek specific performance or other appropriate relief in legal or equitable proceedings." (See Exhibit 1). 9. Builder's failure to enroll all homes they construct is a violation of the Builder Agreement as amended and QBW seeks to specifically enforce the obligation of the Builder Agreement, as amended to compel Builder to enroll all homes they construct in accordance with QBW's membership requirements until to March 18, 2014. 10. In the alternative, QBW seeks damages from Builder for homes, which the Builder would be required to place warranties on during that period of time, which damages exceed the sum of $50,000. 11. QBW also seeks attorney's fees as authorized by Section B 5 of the Builder Agreement. 12. Jurisdiction is proper in the Pennsylvania courts since Section E 5 of the Builder Agreement indicates, "This Agreement shall be interpreted and enforced in accordance with the laws of the Commonwealth of Pennsylvania. All suits instituted under this Agreement shall be brought in Pennsylvania in a court of competent jurisdiction. Builder hereby consents to the personal jurisdiction of the Pennsylvania courts." WHEREFORE, Plaintiff, Quality Builders Warranty Corporation, demands judgment against Savvy Homes, LLC as follows: 1. That the Builder Agreement as amended executed by Defendant Savvy Homes, LLC be specifically enforced to require Savvy Homes, LLC. to enroll all homes they construct for the period March 18, 2009 through March 18, 2014 in accordance with the Builder Agreement as amended. 2. In the alternative that Defendant, Savvy Homes LLC be ordered to pay damages equal to warranty fees, which QBW was entitled to based upon homes projected for the period March 18, 2009 to March 18, 2014, said amounts to be in excess of $50,000.00. 3. Attorney's fees as authorized by Section B 5 of the Builder Agreement. 4. Such other relief as deemed appropriate by the court. Respectfully Submitted, <?? toA. Gill, Esquire 325 North Second Street Wormleysburg, PA 17043 (717) 737-2522 #41532 Attorney for Plaintiff Quality Builders Warranty Corporation QUALITY BUILDERS WARRANTY CORPORATION 325 North Second Street, Wormleysburg, PA 1104.3 BUILDER AGREEMENT AGREEMENT made this 3 day of March, 2009, between QUALITY BUILDERS WARRANTY CORPORATION, a Pennsylvania corporation, herein referred to as "QBW", and Savvy Homes LLC (LLC), of 207 W. Millbrook RoadSuite 115, Raleigh, NC 27609 , herein referred to as "Builder" SECTION A. MEMBERSHIP AND TERM: 1. QBW administers a program whereby home builders registered with QBW enroll homes they construct in the program and purchasers of those homes are protected by a warranty against certain specified defects. 2. In order to develop and maintain a good reputation for providing protection to purchasers of well-built homes, QBW protects and promotes its good-will by careful selection of builders to participate in its warranty program. 3. Builder desires to participate in QBW's warranty program end, agrees to abide by the and to conform its behavior to the standards expressed here and nt the Limited Warranty Agreement. Builder warrants that all information supplied to QBW in connection with its application is true and correct. 4. All registration fees (initial and annual rescreening) are set by QBW at its discretion and are non-refundable. 5. QBW, upon executing this Agreement, has accepted Builder as a member of its warranty program, subject to the Builder's continuing performance of its obligation under this Agreement. 6. Builder's membership shall commence on the date of Execution by QBW and shall continue until terminated by either party in accordance with the terms of this Agreement. QBW reserves the right to rescreen Builder annually. If QBW determines that Builder does not meet its approval standards upon rescreening then QBW may terminate Builder's membership and the provisions of Section B, paragraph 6, shall be in effect. SECTION B. HOME ENROLLMENT: 1. Requirements. As part of its participation in QBW's warranty program, subject to QBW's acceptance, Builder agrees to enroll in the program every home Builder, Builder's Principals, or any entity under Builder's, or Builder's Principals common control, constructs in any state in which QBW operates and agrees to pay all fees required by QBW in the enrollment process, which fees shall be non-refundable. 2. Procedures. Builder agrees to enroll its homes. according to procedures established by QBW. If Builder fails to do so, Builder will be subject to additional fee assessments. Builder may enroll homes currently under construction and homes completed but not sold or occupied (as of the date of this Agreement or the date of reacceptance following a period of suspension or non- participation) provided that enrollment is made within 45 days of execution of this Agreement or reacceptance, and QBW has inspected and approved the home. Homes which remain in a Builder's inventory longer than 18 months must be enrolled by the end of the 19th month from start date and model homes must be enrolled on the date of the Certificate of Occupancy or use as a model, whichever is earlier to qualify for enrollment. The warranty(s) will be issued to the Builder and the unexpired portion of the warranty will automatically transfer to the purchaser. When enrolling other than a detached single family dwelling, Builder shall enroll each individual unit of any multiunit dwelling such as but not limited to duplexes, townhouses and condominiums. If membership is terminated, at the direction of QBW, Builder agrees to enroll any remaining units not enrolled at the time of termination. For each home enrolled, the Builder shall pay a warranty fee as determined by QBW within the time periods established by QBW. All warranty fees are non-refundable. A minimum warranty fee of $150.00 shall apply. QBW will provide Builder with a copy of the Limited Warranty Agreement and Enrollment Form. Builder and purchaser must complete and sign the Enrollment Form at closing, and Builder agrees to furnish QBW with a copy of the signed Enrollment Form within ten (10) days of closing. Builder agrees not to charge the purchaser directly for the cost of the enrollment fee. A home will not be considered enrolled until QBW receives and approves the fully executed and completed Enrollment Form, payment of all fees, and an approved final inspection. 3. Reservation of Power of Review, QBW reserves the right to reject any home submitted for enrollment in the program if (a) the Builder is not a member in good standing; (b) the home is not constructed in accordance with the Warranty Standards or building codes specified in the Limited Warranty Agreement; (c) the Builder did not observe the enrollment procedures; (d) the builder misstates or misrepresents any information; (e) the Builder in any way fails to comply with the terms of this Agreement. 4. Assignment of Rights. If a purchaser files a Complaint pursuant to the Limited Warranty Agreement which the Builder fails to correct, the Builder hereby assigns to QBW or its insurer, as the case may be, any rights which Builder may have against a supplier, manufacturer, subcontractor or other person for work performed or materials supplied in connection with that claim. Builder agrees to cooperate fully with QBW and to provide QBW with all information which it requests pertaining to the claim, if Builder fails to so cooperate, Builder agrees to compensate and indemnify QBW for any damages sustained by such lack of cooperation. 5. Breach and Remedy. If Builder fails to comply with the obligations under this Agreement or fails to enroll any eligible home as required by this Agreement, QBW may seek specific enforcement or other appropriate relief in legal or i1111141111111111111111111111Ili11111111111111111111111 1111111111111111111111111111111111111111111111 IN I 25424038 11111111111111111111111111111111111111111111111111111111111 QBW OF 003 (02109) MAR ? 0 /_0109 ?x 1? i t3 (T -1 equitable proceedings, even if this Agreement has been terminated. If, in QBW's opinion, Builder experiences an adverse change in financial position, Builder agrees to provide alternate forms of security requested by QBW. Furthermore, Builder agrees to indemnify and hold harmless QBW and its insurer for any losses or any damages they may suffer as a result of Builder's breach of this Agreement and such losses and costs shall include reasonable attorney's fees and expert witness fees. Builder hereby irrevocably authorizes and empowers any attorney or any court of record of Pennsylvania or elsewhere to appear for and confess judgment against Builder for all amounts for which Builder may become liable to QBW for the breach of this Agreement, as evidenced by an affidavit signed by an officer of QBW setting forth the amounts then due, plus attorney's fees incurred by QBW, with costs of suit and release of errors. Such authority shall not be exhausted by any one exercise thereof but judgment may be confessed as aforesaid from time to time as often as there is a default. Remedies stated herein are elective and not exclusive and QBW may elect to proceed under this or any other paragraph in this Agreement. 6. Suspension or Termination. QBW may terminate, or at its option, suspend Builder's participation in QBW's Warranty Program, or any entity or individual with which Builder is affiliated, if QBW determines that Builder has done any of the following, which shall be deemed a breach of this Agreement: (a) fails to comply fully with any provision of this Agreement; (b) fails to perform any of its obligations under this Agreement, including, but not limited to, cooperating in the operation of the program's informal dispute resolution and arbitration procedure; (c) fails to respond to QBW's notice of a homeowner's complaint; (d) fails to comply with a decision which is rendered pursuant to complaint procedures; (e) fails to provide adequate assurance to QBW within ten (10) days after it receives a written request from QBN! for such assurance that (within a reasonable timetable established or approved by QBW) it is willing and able to meet its obligations under this Agreement including cooperating in dispute settlement and to perform the obligations under any decision which is rendered pursuant to such procedures; (f) fails to otherwise cooperate in the operation of the QBW Program in accordance with the rules and regulations of the QBW Program; (g) fails to provide timely proof of compliance with this Agreement, as and when requested by QBW; (h) fails to comply with QBW Warranty Standards and building codes as stated in the Limited Warranty Agreement; (i) fails to comply with the enrollment procedures established by QBW; (j) fails to provide proof that enrolled homes have been subjected to required inspections; (k) fails to respond to purchaser complaints in a timely manner and as provided in the Limited Warranty Agreement; (1) fails to perform its obligations with professional competence or conduct its operations from a position of financial strength and stability; (m)fails to notify QBW within 30 days of a change in ownership, company name or company standing, financial condition, or of any other material fact which might affect Builder's ability to meet its obligations under this Agreement; (n) fails to meet ethical standards in its dealings with customers; or (o) misstates or misrepresents any information in connection with its application or in the rescreening process. QBW reserves the option to reinstate terminated affiliates of the primary, terminated Builder if QBW determines that the terminated Builder or its principals are not in a position to control the affiliated Builder. Termination of Builder by QBW shall not affect the rights or obligations of any of the parties to this Agreement with respect to the Warranty Program in effect at the date of termination, subject to the provisions pertaining to voidability. If a Builder is suspended or terminated, he shall not represent himself to be a member of the QBW Warranty Program nor offer the QBW Warranty and shall not use its logo or refer to the program in any way nor attempt to enroll any home. The Builder shall immediately notify any Buyer currently under contract to purchase a home of the suspension or termination and that the QBW Warranty Program has been withdrawn. Upon request, Builder shall immediately return to QBW all materials supplied by QBW and all materials making reference to QBW. Should Builder fail to take these steps, it shall indemnify and hold harmless QBW and the insurer against any and all expenses incurred and losses suffered, including but not limited to attorney fees, by either of them as a result. In addition, Builder shall pay interest to QBW at the rate of 18% per annum on all sums due to QBW hereunder if such sums are not paid within 30 days of demand by QBW and additional fees, as calculated by QBW, if not paid 30 days thereafter. Builder may terminate this Agreement upon 30 days advance written notice to QBW. If so terminated by Builder or by QBW, Builder's obligations under this Agreement shall continue as to those homes enrolled during the period in which this Agreement was in effect. 7. Notice. If QBW possesses a reasonable belief that reason exists to terminate or suspend a Builder for violation of this Agreement, QBW may immediately terminate or suspend the Builder by providing it with written notice. If QBW elects to suspend the Builder, such suspension will remain in effect until Builder has cured all defects to QBW's satisfaction, however, QBW reserves the right to terminate any suspended Builder. 8. Voidability. QBW reserves the right to void any enrollment if Builder misstates or misrepresents any information in its application or in the rescreening process or misstates or misrepresents any information in the enrollment of a particular home or fails to pay any fees due for enrollment of any particular home or fails to forward an Enrollment Form for a particular home within 10 days as required, or fails to enroll all units of a multi unit building. SECTION C. BUILDER'S OBLIGATIONS: MAR i /?h9iS R 6 2009 1. Construction Obligations. (a) Builder shall construct all homes in conformity with the Warranty Standards provided in the Limited Warranty Agreement, and/or in conformity with approved building codes and other standards established by QBW and in effect at the beginning of QBW OF 003 (02/09) construction of the enrolled home. QBW reserves the right to establish special requirements for escrow payments or other means of protection with respect to any homes constructed by Builder which QBW determines to be "High Risks", or with respect to Builder's adverse change in financial position. (b) Builder agrees to have all homes inspected, as required by QBW, and to pay all fees for the inspection and to provide evidence of inspection as and when required by QBW. QBW shall provide inspectors or shall approve governmental inspectors. (c) QBW shall have the right to perform spot inspections to verify Builder's compliance with this Agreement and Builder agrees to cooperate. (d) The Builder agrees to indemnify and hold harmless QBW and/or its Insurer for any losses or damages QBW and/or its Insurer may suffer as a result of the use of fire retardant treated plywood on any building enrolled under the QBW Ten Year Warranty Program. This will include all claims and liability for losses, damages and expenses which QBW and/or its Insurer may sustain, incur, pay or be liable for by means of any investigation settlement or litigation of any claim or action which may be raised, made or brought due to the potential defects caused or likely to be caused by use of the subject plywood. (e) If the Builder is informed by QBW that it is building in an area designated as one with active soil conditions, the Builder agrees to obtain such soils investigations and reports as may be required by QBW. If such reports indicate a need for special foundation design the Builder agrees to construct the foundation according to the design of a registered professional engineer to take into account the conditions disclosed by the soil tests. 3. Warranty Obligations. Builder agrees to perform all obligations arising from this Agreement and the Limited Warranty Agreement. The Builder shall at its own expense perform all obligations as set forth in the QBW Warranty Program and this Agreement which includes meeting the warranty standards upon notice from the Purchaser without the necessity of QBW intervention. During years one and two under the QBW Warranty Program, if the Builder fails or refuses to perform its obligations in accordance with the Limited Warranty Agreement or this Agreement, QBW will perform the Builder's obligations, however, the Builder agrees to reimburse QBW and/or Insurer for all expenses incurred in performing their obligations, including but not limited to, cost of materials, cost of collection, labor, architect's fees, engineering fees and counsel fees. QBW and/or Insurer reserve all rights of subrogation., During years three through ten under the QBW Warranty Program, QBW will perform its obligations with respect to major structural defects as set forth and defined in the Limited Warranty Agreement without the right of subrogation against the Builder provided that the defect, or symptoms of the subsequent occurrence of the defect, first arose after the expiration of two years under the QBW Warranty Program in effect for that home, and that Builder did not attempt to conceal or cosmetically repair the defect or symptoms of the subsequent occurrence of a defect and that the defect does not arise from Builder's failure to construct the home to applicable QBW standards or adhere to Builder's responsibilities under the Builder Agreement. If the Builder repairs a major structural defect during years one or two, QBW must be notified. Once notified, QBW will a compliance inspection. 3. Builder is authorized to advertise its membership in the QBW Warranty Program and to use its Logo in its business, provided that any reference to QBW or its insurer, whether contractual or advertising copy, be approved by QBW in writing in advance of its use. SECTION D. INFORMAL DISPUTE PROCEDURE: 1. Builder should be aware that the Limited Warranty Agreement provides for an informal dispute settlement and arbitration procedure to resolve complaints by purchasers under the Limited Warranty Agreement. Builder should become familiar with the settlement procedures in order to be aware of its rights and responsibilities. Builder agrees to cooperate fully in the procedure and to be bound by and to comply with any decision of an independent third party, or arbitrator. If the Builder fails to perform its obligations hereunder in a timely and good and workmanlike manner, such failure shall be considered to be a refusal to perform governed by paragraph C.2 hereof. 2. The Builder agrees to pay all fees charged in connection with the informal dispute settlement and arbitration procedures. SECTION E. TERMS GOVERNING OPERATION AND INTERPRETATON: t. Builder agrees to perform its obligations under this Agreement in a timely manner. However, time provided for performance of obligations hereunder shall be extended by events not subject'to control by the person obligated to perform. Such events include acts of God, or the public enemy, or riot, civil commotion, or governmental conduct. 2. Descriptive headings as to the contents of particular provisions of this Agreement are intended for convenience only and are not to be considered in construing this instrument, 3. This Agreement shall not constitute or be considered an agency, employer-employee relationship, joint venture or partnership between the parties. None of the parties, nor any of their employees or agents, shall have the authority to bind or obligate the other party except as provided by this Agreement. 4. Should any provisions of this Agreement be determined by a court of competent jurisdiction to be unenforceable, that determination will not affect the validity of the remaining provisions. 5. This Agreement shall be interpreted and enforced in accordance with the laws of the Commonwealth of Pennsylvania. All suits instituted under this Agreement shall be brought in Pennsylvania in a court of competent jurisdiction. Builder hereby consents to the personal jurisdiction of the Pennsylvania courts. A Q 6 2009 QBW OF 003 (02/09) . Btz'd&f shall not assign this ?<greament t tat ttra prior written CC.-meat of QBW. 7. Gf THz th MPra sent ;tf" paff,; the nzi t of a.?,.d be W)dinu- upon one heirs, azec•, , adrnlnistrators, assignse, said za s= g. TTt?s ? rtres, strur?se»t, and sscurRYY docurn®nts and doeument3 roferred to or it ed herein by ra?ronca, c orrdain ? enure 30maement between the Goa, and no sta?nent, pi s, or indw,-mwta mada by s t;er tarty r or agant of atttea l party that is not ? in this written contract shad d t?ad or CirrCfrrg; and ttsr3 Cw'"Ct msy not be en3arged, moditd, or ate except in writing sgrred by the parties and e; x?srad +ri. 9 Failure VV*r party to insist upon cnr with any provision of Etas Ag? nt shall not codtituta a war of that 10-M notes rea d hereunder must be in IATWing and sent b rl dPi M at ft respective address WOcatad on ft front, or to wheva addr the may c#a;lgnate in writing. ?" rapt rec. tail, to ttre 1 t.The afi'ectMe date of this Agreement shall b,a dire date of meartion by (LBW. Sy WARRANTY CO TION late of exaeu*m by QSW 3-18-09 Builder's ReglsbWon No. 6004-27 BUILDER Sign Here In csiderador+ for ' ADDENDUM mWWV a reduced rais' Builder ZOOS to maintain its' mernbership to the QBW program for a period of 5 Years to Contment;s on ft or any afiitfate eorstrda this addandum is executed by QBW. Binder agrees tD subrnk for enmftW ail homes t+rhich BtAW x* The rate is provided b®sed on Bt?id rfr this term and any extensions. In eocohrar?ge, Builder's rate wI0 be $ 1.70 /per thousand. B?> rate isle for the rev sel ? If ? ? yolume. If &Ader's volume deaeasaa, QSW reserves the rW to irtcresse the rate ee not a or to Det> Qin" vtu five or srate ased ter any odder reason. Builder may tenr*u to rnembemhip. This ill nW mom , which renew for lka taints LINO" (30y days prior to the QBW will determine on a V*d by pr*d basis. The addendum will WO-Am of the term, or any ercterts OM advance wrktm notice that they b'rmnd not to expand the period waing the bolder to a kww r? guiid®r?provides niodoe ?q yW wig a*d Eire BWdWs rabo upward elrective at the end of the then curmt terra. BUILDER By rlease note that Eft certain casts are incurred MvI g applicants for the QBW Program, , therefore all appl10860n fees are iron-refmdable. 0 Copyright 1988 OWNY aulld„a Wam* Cape QSW of 003 (MM) MAR 0 6 QUALITY BUHZERS WAMANTX CORPORAUON March 1R_ ')nno VERIFICATION I, CINDY SHELLEMAN, Controller of Quality Builders Warranty Corporation, hereby certify and state that the factual allegations in the foregoing Plaintiff's Complaint is true and correct to the best of my knowledge, information and belief; and that I understand that false statements herein are made subject to the penalties of 18 Pa. C.S. §4904, relating to unswom falsification to authorities. Quality Builders Warranty Corporation Date: 2 - /G By: Cindy Shelleman, Controller