Hard Lesson For Property Owner: Fixing Your Leak Risks Sinking Your Case.

25 Feb

The Minnesota Court of Appeals dealt a heavy blow to property owners on December 22, 2009. 

The case is Miller v. Lankow, 776 N.W.2d 731 (Minn. Ct. App. 2009).  In it, the Court of Appeals held that Miller’s claims of defective construction and fraudulent efforts to conceal those defects should be dismissed because he fixed the damage to his home. 

The issue is called spoliation (that’s not a typo, but the concept is akin to “spoiling” evidence).  The goal in preventing spoliation is to ensure that parties in litigation are not hindered in their ability to respond to someone else’s claims by being denied the ability to investigate evidence in another’s sole possession or control.  For example, in a construction defect case, such as Miller, spoliation can arise when the property owner repairs damage without first telling the responsible party about the potential claim the owner has against that party. 

At about the time this case was decided, I addressed this very subject in an interview with www.HOAleader.com when they called me to talk about construction defect issues in common interest communities.  It’s a pay site, but you can read a free version of the article here.  The rule is simple, if you’re going to fix your problem (a reasonable desire, especially when the problem is a water leak), you must first alert the parties allegedly responsible for the damage. 

The concept of providing notice to the defendants of the alleged defects is not new.  This actually happened in Miller, which is what makes the outcome so shocking.  The defendants in this case knew plaintiff’s allegations, and they knew they were likely to be sued.  But they were in fact rewarded for their apparent refusal to investigate Miller’s clear claims that there were defects, and that the defects were fraudulently concealed.  The notice of the owner’s claims has not historically required notice of the specific work to be performed or of the specific date the work would occur.  The Court of Appeals has now changed this. 

The Court of Appeals held that the owner’s failure to tell the parties of his plans to repair the mold and rot created by ongoing water leaks was cause to deny him the opportunity to present any evidence of those conditions at trial.  The decision to exclude photographs, testimony, and other evidence of the mold and rot present in the walls of Miller’s home was fatal to his claims, and the case was dismissed for lack of evidence.  The dissenting judge leveled a blistering criticism at the majority for enhancing the burden on plaintiffs, particularly under the facts of the Miller case, saying that the majority judges were “simply wrong.”

I do not know whether Miller could have proven his case even with all the evidence at his disposal.  There may have been no defects and no fraud.  The point, however, is that Miller was denied the opportunity to present his evidence.  This case stands now as the perfect example of why we continue to advise clients that a well-crafted letter should be provided to potential defendants in even the most simple construction dispute or case of alleged misrepresentation.  If you own or manage residential or commercial property, and you believe your property suffers from defective construction, faulty repairs, or your seller failed to disclose a problem with the property, contact Thomsen Nybeck to make sure you clear all the hurdles.

Entry by Matt Drewes.  Matt Drewes is a Shareholder with Thomsen Nybeck.  He is the head of the firm’s 10-member Community Association Representation Group and co-leads the firm’s construction litigation group.  Matt practices in the areas of business and real estate litigation, construction litigation, community association law, debtor/creditor law, insurance and employment, and has been included in Minneapolis/St. Paul Magazine’s list of Rising Stars for several years.  He can be reached at mdrewes@tn-law.com.

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One Response to “Hard Lesson For Property Owner: Fixing Your Leak Risks Sinking Your Case.”

  1. property repair claims March 4, 2010 at 2:25 pm #

    Thanks for your advices. I wouldn’t be opposed to these identification..

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