Volume 8, Issue 3 - March 2007
LEGAL AND LEGISLATION
The American Architectural Manufacturers Association (AAMA) has agreed to participate in an amicus (“friend of the court”) brief to be submitted to the California Supreme Court as part of further appeal of a construction defect lawsuit ruling. The case involves liability for court costs under California contractual law.
Specifically, under a contract indemnity clause requiring subcontractors to cover a builder’s legal fees that accrued in a specific construction defect lawsuit involving multiple plaintiffs and multiple subcontractors, Weather Shield Manufacturing was held liable for $100,000 in such fees, even though the state Court of Appeals later ruled that the manufacturer was not negligent for its products craftsmanship.
In essence, the ruling means that any subcontractor or manufacturer can be compelled to pay for the defense fees of a builder or general contractor in a construction defect lawsuit, regardless of the subcontractor or manufacturer’s lack of negligence, according to AAMA.
There is a ruling in California to properly assign comparative fault, but the Court of Appeals disregarded the fact that Weather Shield had no negligence, according to AAMA. The Appellate Court believed that the builder should recover an arbitrary amount for their defense costs only because Weather Shield contractually indemnified the builder.
AAMA says that the case is important to manufacturers, as the California Supreme Court’s decision could set a far-reaching precedent that would apply to both residential and commercial projects. Although this case is specific to California, the arguments and decision could influence court decisions in other states. In addition to curbing liability for manufacturers, a favorable decision could also encourage insurance companies to return to the market because they would be able to quantify the risk to their intended insured and not the arbitrary risk to an indemnified third party, AAMA says. Reduced premiums rates would be a further bonus.
Deceuninck® Obtains Permanent Court Injunction In Lawsuit Against Bavarian Polymers
The lawsuit concerns the alleged unlawful appropriation and use of trade secrets related to extruded lineal profiles used by Deceuninck’s 2900 and 4300 window systems. The permanent injunction, entered by the United States District Court for the Eastern District of Arkansas, prohibits Bavarian Polymers, former Deceuninck North America chief executive officer (CEO) Ralph Weiss, Robert Weishaeupl, Giovanni Menegazzo and Bryan Harris from designing, producing, manufacturing and/or selling lineals used in those systems. The injunction also prohibits the design or sale of any lineals interchangeble with those systems. In addition, Bavarian Polymers is prohibited from manufacturing any other lineals utilized in any other Deceuninck window system developed using intellectual property which Bavarian or any of the foregoing individuals has obtained, or may obtain in future, from any Deceuninck drawings, dies or other proprietary and confidential information. Other aspects of the lawsuit’s resolution remain confidential.
“This is a significant victory for our company,” said Mark Parrish, president and CEO, Deceuninck North America. “This court injunction sends a strong, positive message that Deceuninck North America will diligently protect the proprietary intellectual properties that make our company a world-class leader in the design, manufacture and sale of the highest quality fenestration and building products.”
Weiss, who once worked for Deceuninck, has been the president of Bavarian Polymers since 2005.
He says, “Bavarian Polymers and Deceuninck entered into a consent judgment expressly providing that ‘the parties have agreed to resolve this lawsuit without any admission of fault or liability.’ Bavarian Polymers consented to resolve the parties’ dispute, in which Bavarian Polymers had also asserted claims against Deceuninck, which had been costing the company a prohibitive amount of legal fees and costs. Our company determined that its resources would be better spent investing in new product and market development,” Weiss adds.
WDMA Reviews Window Safety Legislation
This bill establishes a safety standard for window screens on certain windows in residential dwellings and requires the adoption of the standard in the next revision of the State Building Code and the Uniform Fire Code.
“WDMA supports the intentions of the Minnesota legislature to make screens safer, especially for children, but we’ve found that the most successful forum is in the code arena, and we urge that this issue be addressed the same way,” says Hoiland.
The standard says that “A safety screen must be reasonably expected to withstand a force of 30 pounds or less and must be capable of being opened from the inside by someone with no special training or knowledge. The meeting provided an opportunity to form a coalition to address the potential effects of the bill that would require the installation of “safety screens” on residential dwellings with above-grade windows. This requirement would take effect for new construction of multi-family dwellings on or after January 1, 2008, and single-family dwellings on or after January 1, 2009. Hoiland says, “We aren’t aware of any safety screens that would meet these specifications.”
MI Windows and Doors Unveils Brand Realignment Strategy
“Nothing is changing at MI,” says Matt DeSoto, eastern division executive vice president. “We are producing the same quality product as we always have, they will just be more clearly recognized as an MI product.”
Integrated Composite Technologies Closes its Doors
ICT manufactured wood plastic composites. The company’s products were both private label original equipment manufacturers’ products, as well as products produced under the company’s own brand name, EverGreen Wood Composites®.
A representative at the company reported that the company is still looking for options and is “trying to be sold.”
The company reports in a letter to its creditors that its board of directors analyzed all alternatives to determine the most efficient process through which the assets of the company could be liquidated. It was determined that ICT would execute an Assignment for the Benefit of Creditors. Management and the directors of ICT firmly believe that the assignment provides the most efficient form of liquidation and thus the greatest potential recovery for creditors.
Republic Windows & Doors Receives Equity Financing from Chase
We had been looking for a partner that believed in Republic’s potential for growth and valued our longstanding reputation as an innovator in the building products industry,” said Barry Dubin, Republic’s chief operating officer, “We found that partner in Chase Capital.”
The infusion of equity capital has allowed Republic to restructure its trade debt while giving the company the additional capital it requires to:
“We chose Republic as our first equity investment because it has worked very hard over the past 15 months to reduce its costs and improve its quality, timeliness and productivity, while maintaining its customer base,” said Dave Schabes, co-head of Chase Capital, which began investing in mid-size businesses in January. “We are confident that the company can continue to build on this significant progress.”
More Wood Species Attracts Buyers
“The market has diversified in terms of which wood species are utilized today,” said Shane Meisel, door product manager for JELD-WEN. “More species are readily available, which has led to more choices for builders and consumers. Homeowners want to personalize their spaces and wood species help them do that.”
“Nearly 80 percent of all interior doors used in new construction are molded fiber doors,” said Meisel. “But when you look at remodeling, half of homeowners choose wood stile and rail doors for their projects, and only 20 percent choose molded interior doors … There’s more variation available today than ever before,” he added.
Therma-Tru Named Lowe’s Supplier of the Year
Chosen from finalists in 20 product categories, Therma-Tru was the only supplier to achieve the top honor as Supplier of the Year. This is the company’s second consecutive year receiving this award.
In late 2004, Therma-Tru added Benchmark by Therma-Tru™ fiberglass door systems as a stock product in Lowe’s stores, along with a corresponding Therma-Tru & Benchmark by Therma-Tru special order kiosk. Informative consumer-oriented product brochures were created for both product lines, along with step-by-step point-of-purchase guides to further assist Lowe’s customers in selecting a door. The company also worked hand-in-hand with the Lowe’s training department to educate the sales staff on the benefits of fiberglass and attributes of the product lines.
Mississippi Building Code Bill Passes Senate
Supporters hope to move the bill through the House by the end of February (results were not known at press time.)
The Saflex government affairs team helped draft SB 2851 for the coalition and worked to secure Senator Mike Chaney as the bill’s sponsor.
Window Manufacturers Press for Stricter Building Codes
A “pan flashing” is a waterproof barrier, typically a non-conductive formed pan or a flexible material that is wrapped into the window opening before the window is installed. BAM is concerned that without pan flashings, if a window or its installation begins leaking the water will simply migrate down the wall and be trapped in the wall itself.
Marvin Windows and Doors, Andersen Windows and Pella Corp. are three of the many companies that have supported BAM in their effort that this requirement be added. Representatives from these companies spent time with Minnesota’s International Residential Code (IRC) advisory committee to fine-tune language that allows certain exclusions to the rule.
However, DLI is under no obligation to adopt the recommendations.
“In the state of Minnesota, due to stringent thermal regulations, moisture in the walls doesn’t dry out as quickly,” says Jim Krahn, advanced research manager at Marvin Windows and Doors in Warroad. “This creates the potential for a higher number of failures in Minnesota, so BAM decided the best way to protect the builders—which in turn protects the homeowners and the manufacturers also—was to require a sill pan.”
Krahn says that they and other manufactures have worked with BAM to write and modify the requirement, though it is still in draft form.
“We’ve supported them [BAM] in trying to get the requirement passed as long as they supported us with some of the exceptions,” he adds. “We’ll probably know one way or the other somewhere in the next six months.”
“There are many drainage systems out there, but we’ve decided we’re going to use a solid pan made out of a poly/plastic material and sloped to the outside,” Krahn explains.
“We recommend this preformed pan flashing system in walls configurations where it’s applicable. This provides a second barrier and level of protection.”
Stiles Machinery Installs Hänel System
Hänel Lean-Lifts use available room heights and store the parts without any loss of space by means of height optimization, resulting in maximum storage capacity on a minimum footprint. The third largest integrated Hänel system in North America, Stiles installed six units that are each 9- by 9- by 19-feet. Five of the units have 44,000 pounds capacity to store 551 pounds per pan; one of the units has 66,000 pounds capacity which is capable of handling 883 pounds per pan to accommodate large, bulky items.
ICA Group Continues to Expand
2006 consolidated sales should reach approximately $127 million—up 13.5 percent from the previous year, the company says. Underpinning this positive result is the company’s increased sales (8 percent) from the Italian market, where a greater number of coating cycles are seeing the substitution of solvent-based coatings with water-based coatings in order to meet the restrictions contained within the VOC Directive. ICA says the switching process currently under way in Italy is providing a great source of new customers. The company’s main growth (21 percent) has been in export markets.