The latest episode of the AZ Big Podcast with Michael & Amy has officially dropped. Episode 177 features Paul Kular, shareholder at Burch & Cracchiolo, who talks what you should do if you encounter construction problems.
Listen to more of the AZ Big Podcast here.
Transcript:
Kyle Backer
Welcome to the AZ Big Podcast, sponsored by Burch & Cracchiolo. I'm Kyle Backer, Associate Editor at AZ Big Media, sitting in for Michael Gossie, and I'm joined by my co-host, our publisher, Amy Lindsey, and today we are in the studio with Paul Coulard, shareholder at Burch & Cracchiolo. Welcome, Paul.Paul Kular
Thank you.Amy Lindsey
Thank you for joining us. Kyle, thank you for filling in for Michael this morning. He's not feeling well.Paul, to start off, tell us a little bit about your background and your legal practice with Burch & Cracchiolo.
Paul Kular
So I've been practicing for 21 years. I've been with Burch for a little over five years, and I do insurance defense. I do plaintiff's work.When I say plaintiff's work, it's plaintiff's personal injury. I do construction defect litigation, which we're here to talk about a little bit today. Do some coverage work for insurance companies or insurers, and that's just dealing with whether certain things under your insurance policy are covered or not.
Started dabbling in some more corporate work. I'm doing more and more of that. Kind of just runs the gamut, you know.
I'm just trying to expand my book of business and try new things. Sounds like you stay busy.
Amy Lindsey
Paul, can you tell us what is construction defect litigation?Paul Kular
Sure. So imagine you buy, and it doesn't have to be a new home, but you purchase a new home, and you're there for a little while, and you start to notice maybe cracks in your wall. Maybe you got a leaky roof.Maybe your block fence outside is starting to move a little bit, and that shouldn't be happening. Your driveway has cracks in it. It could be a variety of different things, but those are some of the things that you see when you deal with construction defects, where homeowners believe that maybe they have an issue with their home, and then they contact their contractor, their builder, and try to seek a remedy for those issues.
Amy Lindsey
I've heard a lot of that lately.Paul Kular
Yeah, it was a big deal. I'd say early 2000s, and also going into, you know, 2010, and even to this day. It's definitely not as much as it was back then, but it's gonna be around because we have a lot of construction that goes on in Arizona, and whenever you have construction, sometimes you can have issues.Amy Lindsey
So is there any, like, arbitration areas that people could go to, or is it really between you and the builder and then straight to an attorney? Like, where do they get you involved?Paul Kular
Such a great question. So there's a statute in Arizona. It's known as the PDA, Purchaser's Dwelling Act, and you actually have to go through that before you go into a courtroom, and some contracts between builders and homeowners require you to do mediation, and then maybe even arbitration, and sometimes even you waive your opportunity to, you know, go in front of a judge or a jury, but before you can even get into a courtroom to answer your question, you got to go through this PDA process, and that's just basically an opportunity for the homeowner and the contractor to come together and try to reach a resolution to the issues that are being alleged by the homeowner.Kyle Backer
And what rights do a homeowner have when or if they discover a construction problem with their home?Paul Kular
So again, to start with, it's that PDA Act, the Purchaser's Dwelling Act. You start with that, you send a letter, and this is just the basics, but you send a letter to the contractor, you list out the issues that you believe you're having with your home, and at that point the builder has an opportunity to come to your home, do an inspection, and make repairs or offer you money to hopefully come to resolution, and if you're unsatisfied with what the builder has offered, then you have the opportunity, subject to any alternative dispute resolution provisions in your contract with a builder, but then you have your opportunity to bring a lawsuit.Kyle Backer
And is there a, like, a time span involved? You know, what if you find a problem, you know, a few years on after you have bought or are living in the home?Paul Kular
That's a great question. So there's also a statute in Arizona known as the Statute of Reposts, and that statute is 12552, and that statute says that after a certain amount of time, you're basically out of luck. You can't bring...Amy Lindsey
So don't put it off.Paul Kular
Right, yeah, don't put it off, and that statute is eight years. You could have a ninth year if the defect is discovered in the eighth year, but you cannot have more than nine years. Now that applies to contract claims and not negligence claims, and now we're going down a whole different path.You don't want to go down with me.
Amy Lindsey
I haven't had that much coffee this morning.Kyle Backer
So it sounds like, I mean, you mentioned a few minutes ago that, you know, a couple of types of, you know, construction defect litigation and some problems that folks might hone in on and end up pursuing this. You know, is there, like, a most common type? You know, is there one that, you know, vast majority are going to be, you know, this thing, or is it kind of like you mentioned, sometimes it's a cracked driveway, sometimes it's just cracks in the wall.Is it kind of all over the place, or is there something that really stands out as, like, this is the number one thing that most people have issues with?
Paul Kular
Yeah, I would say there's a number one thing. I think every home is unique, and sometimes homeowners think they have a defect, and they don't. There's a lot of great builders out there.Also mistakes can happen, but I would say if I were to pick one, I guess cracks in walls, drywall, stucco, ground caused by settlement, or various other things, you see that quite a bit.
Amy Lindsey
So once you discover the problem, you kind of go through the PDA Act, but should people engage with an attorney prior to to make sure that they're kind of being represented up front, or is this something that you find that if they go through the arbitration, and that doesn't work, then they get a lawyer involved?Paul Kular
Yeah, so I have to put food on the table for my family.Amy Lindsey
So you think they should contact you right away?Paul Kular
No, in all seriousness, I think, you know, these things can be handled by people on their own. I mean, it's always scary when you're dealing with, I can imagine, it's scary when you're dealing with statutes, and you're dealing with law, and, but for some people, they can handle that, you know. This stuff is now with the internet, and it's been around forever, but now with the internet, you know, you can hop online, and you can look up PDA Act, and you can, I mean, it's step-by-step what you need to do.So you could do it. You know, I think sometimes people like to get attorneys involved, and they feel like they don't, they're not being taken seriously by the contractor, or vice versa. A contractor is dealing with a difficult homeowner.
So to answer your question, I think it can be handled on your own, but I don't think it hurts to have an attorney involved if you start to feel like maybe you're getting in over your head.
Amy Lindsey
So what type of resolve, if you go to the lengths of having to have attorney involved, what type of resolve is there to it? Is it just getting it fixed, or is there a certain point where it becomes monetary, or you look in excess of fixing the issue?Paul Kular
I feel like you guys know more. These are like questions you know the answers to, because these are just great questions. So it can be both.It can be, you know, we're gonna make these repairs, and hopefully this resolves the issue. It can be we're gonna make some repairs, but we don't think this is an issue, but we'll give you some money just to buy our piece, so to speak. So it can be a mixture.
It can just be money. It can also be, you know, we don't see any problems with your home, and therefore we're not going to do anything, and that can often result in litigation.
Kyle Backer
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Contact them today at bcattorneys.com. That's bcattorneys.com. Okay, Paul, so we've been talking a lot about the kind of like the homeowner's perspective here, and you mentioned a little bit from the the contractor side.
So what sort of rights do a contractor have in a situation like this? You know, what if they feel like, well, maybe, you know, this isn't our fault, or that the homeowner is misconstruing what the facts are here, you know, what can they do to ensure that they are protecting themselves?
Paul Kular
Yeah, so I represent both homeowners and contractors. I represent homeowners, general contractors, subcontractors, so my my work runs the gamut. But to answer your question, you know, initially that PDA process that we've talked about, the Purchaser's Dwelling Act, a claim is brought to the contractor and the contractor has a right to do an inspection when they receive that notice, notice of claim under the PDA Act from the homeowner.They have a right to do an inspection. They have the right to make repairs. They have a right to, if they so choose to, they have the right to offer monetary compensation, which can or doesn't have to be accepted by the homeowner.
The homeowner must allow the contractor to do repairs, though. That doesn't mean they have to say, okay, fine, you did repairs and now everything's good, but the contractor's rights are laid out in that Purchaser's Dwelling Act. They do have a right to repair and they can choose not to again if they don't believe that there is a construction issue, and sometimes there isn't.
Sometimes there is.
Kyle Backer
Is there a difference between the, you know, the product itself having a defect and there being an issue with the, you know, labor involved in installing of the drywall or what have you, or are those kind of seen as one of the same?Paul Kular
Yeah, so, I mean, both of those could be considered construction defects. I think you have different remedies of law when you're dealing with a defect in a product versus a defect in a home or a defect in a product that's now being incorporated into the home, but essentially, if there's a problem with the product or there's a problem with the means and methods that were used to do the construction installation, either of those, I would think, if we're dealing with residence or commercial building, now the PDA doesn't apply to commercial, but if we're dealing with a residence or commercial building, either one of those could cause there to be a potential construction defect.Amy Lindsey
So, it sounds like they're using the PDA Act. There's a lot that's resolved prior to that. Can you give us an example of something you've had to actually end up in court with?Because it sounds like with arbitration, it should fix the majority. So, where would this situation come in that you'd have to actually get almost all the way to court, if not into court?
Paul Kular
Yeah, so, I mean, I think the spirit and the goal behind the PDA Act is to get things resolved in that pre-lawsuit, pre-courtroom situation. Unfortunately, that's not the way it happens. The PDA almost feels like this stumbling block.Before you get to go into the courtroom, things tend to not end in the PDA process. So, unfortunately, to answer your question, I would say from my experience, 99.9% of cases end up in litigation.
Amy Lindsey
Oh, wow. Okay. Yeah, that's very good.Paul Kular
It's sad because I think when the legislature implemented the Purchaser's Dwelling Act, the goal was, hey, you know, we're inundated, our courts are inundated with these construction cases. Let's figure out some things that we can bring people together and hopefully, if cooler heads prevail, we're giving a remedy to the homeowner still. We're just, you know, saving our courtrooms from maybe other issues that might be more pressing at that time and we're giving the contractors an opportunity to repair whatever construction defect is being alleged or help educate the homeowner or the Homeowner's Council that this is really not a construction defect and, you know, let's just figure out a resolution here that works for both sides.Kyle Backer
So, if folks think that they maybe have an issue with a construction defect, what's the best way for them to get in contact with you?Paul Kular
So, pretty easy to find on internet Burch & Cracchiolo's website. My profile is right there and, yeah, just give me a call.Amy Lindsey
You said you were handling things outside of just defect litigation. What other areas are you focusing on?Paul Kular
So, insurance defense. I work for a lot of insurance companies and handle claims anywhere from, you know, personal injury, property damage cases, wrongful death cases. I also handle those for the plaintiff's side.On the construction defect side, as I said, I do both homeowner and contractors. There's also corporate disputes between LLC members. I've done some work there.
Coverage work for insurance companies. You know, we, for example, your homeowner's policy. God forbid you have a issue at your home where you have a leak and it causes damage to your home and you contact your insurance company and they say this isn't covered.
You might call me and say, Paul, they're telling me it's not covered. Can you look at my policy? I think it's covered or vice versa.
Okay. A homeowner may say something's covered and the insurance company might not be sure. They may say, Paul, we're not sure.
Can you look at this policy and help us? We don't want to make the wrong decision here. If the insurance damages are covered, we want to make sure we cover them.
So, that's kind of the overview of the type of work that I've been doing recently.
Amy Lindsey
Well, fantastic.Kyle Backer
Sounds like you have a lot of free time, huh?Paul Kular
Yeah, tons of free time. I will give a plug to my golf game. I love golf.Amy Lindsey
Well, we'll keep you busy.Kyle Backer
Paul, thank you so much for joining us today. And thank you for listening to the AZ Big Podcast with Michael and Amy. For the latest and greatest business, real estate, and lifestyle news, check out the all-new azbigmedia.com.And once again, thank you to our sponsors, Burch & Cracchiolo. And thank you, Paul, for joining us today.
Paul Kular
Yeah, I appreciate your guys' time.Kyle Backer
Thank you, Paul.