February 15, 2010
When you and your client are on different pages
By Robert Kennaley
McLauchlin & Associates
In 2003, a kitchen supplier/installer entered into a residential contract to install kitchen cabinets. Five years later, and after three days of trial, a dispute between the supplier and his residential clients over $32,000 was finally settled by a judge. The supplier was largely successful, however, we are quite sure that after enduring five years and significant legal fees, he was not happy.
Of interest to those in the landscape trades, the central issue in the dispute was whether or not the cabinet doors and drawer fronts should be rejected due to colour variations. The homeowners complained that they did not match the approved samples, in that they were darker at the edges. The supplier responded that the doors and drawer fronts were natural wood products, and as such the colour variations could not be avoided. Further, the supplier pointed out that his contract (which had been signed by the homeowners) expressly provided that, “All wood is a product of nature with inherent variations in colour and grain.” As a result, each door may be unique in appearance. “Such grain and colour variations are not defects.”
Still, the homeowners objected and demanded that the doors be replaced. The supplier refused and registered a lien against the homeowners’ property. Now troubled, the homeowners raised 13 further deficiencies, which included complaints that items were missing, that the doors were 1.2 mm too thin, that the drawers were too short and that, in places, maple was provided instead of cherry. In addition, the homeowners asserted a delay claim.
In the five years leading up to trial, the parties exchanged documents and attended at pretrial hearings and attendances. A mediation process may have been held. At trial, experts were called and each of the 14 deficiencies, along with the delay claim, was litigated. The supplier most likely incurred $12,000 to $15,000 in legal fees for the three days of trial, along with approximately $2,000 in experts’ fees. In addition, $10,000 to $15,000, or more, would have been spent on pretrial procedures and preparation. The supplier would have recovered some, but by no means all, of this money in a costs award. Indeed the cost award might have been anywhere from 50 per cent to 80 per cent of actual costs.
Landscape contractors, subcontractors and suppliers deal with natural products. In that regard, they are also somewhat more handicapped than, for example, a kitchen cabinet supplier, in the ability to describe a scope of work to their clients. This is because, for some reason, clients appear to have a fairly good perception of what they are going to get when the order kitchen cabinets, or painted walls, or terrazzo tile or brand-new windows. In this industry, however, many clients are not so well-equipped by their experience to actually visualize what a two-dimensional drawing will look like upon installation.
In the end, construction industry litigation cannot always be avoided. As those involved in the business grow, they come to understand that litigation will become a fact of life from time to time, and that when disputes arise no one (even the successful party) will be made whole. That having been said, however, it is important to avoid disputes if possible. As we find ourselves saying quite often, detailing and particularizing the scope of work is the first, and perhaps best, step in this regard. This case illustrates, for those involved in the landscape trades, properly dealing with variations in natural products is an important aspect of this strategy.
Robert Kennaley practices construction law in Toronto and Simcoe. He speaks and writes regularly across North America. He can be reached for comment at 416- 368-2522, or at kennaley@mclauchlin.ca. This material is for information purposes and is not intended to provide legal advice in relation to any particular fact situation. Readers who have concerns about any particular circumstance are encouraged to seek independent legal advice in that regard.
McLauchlin & Associates
In 2003, a kitchen supplier/installer entered into a residential contract to install kitchen cabinets. Five years later, and after three days of trial, a dispute between the supplier and his residential clients over $32,000 was finally settled by a judge. The supplier was largely successful, however, we are quite sure that after enduring five years and significant legal fees, he was not happy.Of interest to those in the landscape trades, the central issue in the dispute was whether or not the cabinet doors and drawer fronts should be rejected due to colour variations. The homeowners complained that they did not match the approved samples, in that they were darker at the edges. The supplier responded that the doors and drawer fronts were natural wood products, and as such the colour variations could not be avoided. Further, the supplier pointed out that his contract (which had been signed by the homeowners) expressly provided that, “All wood is a product of nature with inherent variations in colour and grain.” As a result, each door may be unique in appearance. “Such grain and colour variations are not defects.”
Still, the homeowners objected and demanded that the doors be replaced. The supplier refused and registered a lien against the homeowners’ property. Now troubled, the homeowners raised 13 further deficiencies, which included complaints that items were missing, that the doors were 1.2 mm too thin, that the drawers were too short and that, in places, maple was provided instead of cherry. In addition, the homeowners asserted a delay claim.
In the five years leading up to trial, the parties exchanged documents and attended at pretrial hearings and attendances. A mediation process may have been held. At trial, experts were called and each of the 14 deficiencies, along with the delay claim, was litigated. The supplier most likely incurred $12,000 to $15,000 in legal fees for the three days of trial, along with approximately $2,000 in experts’ fees. In addition, $10,000 to $15,000, or more, would have been spent on pretrial procedures and preparation. The supplier would have recovered some, but by no means all, of this money in a costs award. Indeed the cost award might have been anywhere from 50 per cent to 80 per cent of actual costs.
Relationship falls apart
Although it is impossible to know for sure, we would hazard a guess that the relationship between the supplier and the homeowners fell apart over the colour variation issue. When that hurdle could not be overcome, and human nature being what it is, distrust set in and the parties were off on a litigation treadmill. Even more tragic is the fact that the supplier did sit down with his clients and go through the contract. Unfortunately, it appears the supplier did not help his clients to fully understand the extent to which the wood grain and colour may vary, not only from piece to piece, but within an individual door or drawer.Landscape contractors, subcontractors and suppliers deal with natural products. In that regard, they are also somewhat more handicapped than, for example, a kitchen cabinet supplier, in the ability to describe a scope of work to their clients. This is because, for some reason, clients appear to have a fairly good perception of what they are going to get when the order kitchen cabinets, or painted walls, or terrazzo tile or brand-new windows. In this industry, however, many clients are not so well-equipped by their experience to actually visualize what a two-dimensional drawing will look like upon installation.
Ensure clients understand
The California Kitchens & Baths Limited v. Roti case, which we have reviewed above, serves as a reminder to landscape contractors, subcontractors and suppliers of the importance to ensure that their clients actually understand what they are going to get for their money. With respect to natural products, in particular, they need to do everything they can to ensure the clients understand that variations will occur and that these are not defects. Further, clients need to understand the extent to which these variances might occur. This case serves as an example of just how much money and grief a contractor can go through if this does not occur.In the end, construction industry litigation cannot always be avoided. As those involved in the business grow, they come to understand that litigation will become a fact of life from time to time, and that when disputes arise no one (even the successful party) will be made whole. That having been said, however, it is important to avoid disputes if possible. As we find ourselves saying quite often, detailing and particularizing the scope of work is the first, and perhaps best, step in this regard. This case illustrates, for those involved in the landscape trades, properly dealing with variations in natural products is an important aspect of this strategy.
Robert Kennaley practices construction law in Toronto and Simcoe. He speaks and writes regularly across North America. He can be reached for comment at 416- 368-2522, or at kennaley@mclauchlin.ca. This material is for information purposes and is not intended to provide legal advice in relation to any particular fact situation. Readers who have concerns about any particular circumstance are encouraged to seek independent legal advice in that regard.