Volume 8, Issue 3 - March 2007

What’s News

AAMA Helps with Construction Defect Case

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 
Deceuninck North America of Monroe, Ohio, has obtained a court approved permanent injunction in its favor to resolve a lawsuit against competitor Bavarian Polymers USA. 

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
Window Safety legislation has been introduced in the Minnesota legislature. Window and Door Manufacturers Association (WDMA) president Joel Hoiland and director of code and regulatory compliance, Mike Fischer, along with interested members met in St. Paul, Minn., last month to review its impact. 

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
MI Windows and Doors in Gratz, Pa., announced its new branding strategy at the International Builders’ Show last month. The company says that individual brand name MI products including Insight, BetterBilt, Capitol and Xact will streamline and allow the MI brand to step to the forefront in all of its marketing materials and branding efforts.The company says that unifying the products under the MI Windows and Doors brand will make doing business with MI even easier.

“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
On August 23, 2006, Integrated Composite Technologies (ICT) of Montezuma, Ga., ceased its manufacturing operations due to severe cash flow shortages and management’s desire to avoid incurring continued operating losses.

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 Capital
Republic Windows & Doors, LLC announced that Chase Capital Corp., a division of JPMorgan Chase & Co., has acquired a minority interest in Republic.“

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: 
• Continue to improve manufacturing efficiencies and quality through the acquisition of additional production equipment;
• Extend its portfolio of window products to include windows designed specifically for the distribution market; and
• Pursue strategic partnerships to maximize shareholder value.

“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
Wood is proving to be a classic, enduring and eye-catching feature for homebuyers who want to live in a house that feels one-of-a-kind, according to the experts at JELD-WEN in Klamath Falls, Ore.Discerning consumers are asking homebuilders to look beyond traditional woods such as pine, oak and fir and to incorporate a wide variety of species into high-end homes. In response, luxury homebuilders are using less familiar wood species to attract buyers and differentiate their products.

“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
Therma-Tru Doors of Maumee, Ohio, was named “Supplier of the Year” by Lowe’s Companies Inc. during the home improvement retailer’s annual Vendor Forum. The award honors companies that meet or exceed Lowe’s standards in innovation, product performance, environmental policies and responsive customer service, among other criteria.

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
The Mississippi Senate passed a bill on February 12 that would enact a statewide commercial building code and encourage further adoption of Mississippi state residential codes.  Key provisions of SB 2851 as passed by the Senate include:
• Requiring jurisdictions to use the 2003 International Building Code (IBC) and International Residential Code (IRC) if they amend or adopt codes;
• Requiring commercial buildings built after July 1, 2009 to be built to the 2003 IBC;
• Allowing cities and counties to establish agreements with other state governments or third party providers for purposes of code enforcement;
• Preventing counties from weakening the codes below that of the 2003 IBC and IRC; and
• Insurance discounts for wind mitigation.

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 
Some residential builders and window manufacturers are supporting the Building Association of Minnesota (BAM), which is pushing the Minnesota Department of Labor and Industry (DLI) to add a “pan flashing” requirement to the state’s residential building code, an addition that could reduce leaks that result in structural damage. BAM wants the code to require “pan flashing” under all doors and windows. 

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
Stiles Machinery Inc. of Grand Rapids, Mich., has installed a vertical storage and retrieval system for spare parts inventory and order fulfillment.The system was purchased from an authorized Hänel distributor, AME Vertical in Troy, Mich., who also provided installation support with factory certified technicians.

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
The ICA Group, manufacturer of special coatings for wood and markets based in Marche, Italy, plans to invest $26.4 million USD before 2008.

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.


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