In December 2017, Lang & Klain partner Mike Thal successfully defended Phoenix contractor Rondo Pools and Spas, Inc., in a breach of contract lawsuit and, in a counterclaim against the plaintiff homeowner, won an award of more than $310,000.
On May 26, 2019, the Arizona Court of Appeals upheld the verdict and award.
The case provides practical lessons for contractors in managing workmanship complaints (see "Keys to Victory, Contract Addition" below).
Background
In November 2013, homeowner Amy Fisher contracted with Rondo Pools to redesign and remodel her swimming pool, and she paid a deposit of $17,723. Work began in December. Multiple disputes soon arose, and Ms. Fisher terminated her contract with Rondo in January 2014. She did so without affording Rondo a reasonable opportunity to resolve her issues with the project.
Five months later Ms. Fisher sued Rondo, alleging breach of contract (among other claims) and demanding a full refund of her deposit, plus amounts paid to a subsequent pool contractor, and punitive damages (which are usually awarded only when a party acts with an "evil mind").
Rondo, represented by Mike Thal, filed a counterclaim against Ms. Fisher, alleging that she wrongfully terminated the contract.
After a six-day trial in Maricopa County Superior Court, the jury found against Ms. Fisher on all of her claims and found in favor of Rondo on its counterclaim. The court awarded Rondo $310,351, including $286,048 in attorney's fees - in a case that, at its core, was over a $17,723 deposit plus the costs of finishing the project.
Appeal Rejected. Ms. Fisher appealed, alleging that the trial judge erred by instructing the jurors that they could consider whether Rondo was ready, willing and able to rectify Fisher's complaints. Mike Thal and Lang & Klain partner George King represented Rondo at the Arizona Court of Appeals, which rejected Ms. Fisher's appeal and upheld the award to Rondo.
Keys to Victory
A vital asset in Rondo's trial court victory was their ability to produce emails and texts between Rondo and Ms. Fisher that documented (a) Rondo's multiple offers to fix the problem and (b) Ms. Fisher's termination of the contract without reasonably allowing Rondo to do so.
In terms of facts and issues of law, the Rondo case is remarkably similar to another recent Lang & Klain success (see "Victory for Client: Court Affirms Contractor's Right to Cure Workmanship Issues"). In each case, the contractor prevailed because it was denied the opportunity to cure the workmanship issues raised by the owner.
Contract Addition. Also in each case, the contractor could have been spared the ordeal of a lawsuit if it had included in its contract a clause that required the owner, before being permitted to terminate the contract, to allow a defined period of time for the contractor to evaluate and cure any workmanship issues.
Adding this simple clause helps keep the issue out of the Court's hands and makes clear that you are entitled to an opportunity to cure.
See: Amy S. Fisher v. Rondo Pools and Spas, Inc., No. 1 CA-CV 18-0343, 5/16/2019