JULY 2010 MEETING
Residential Construction Defect Claims - Out with the Old, In with the New
Speaker: William Morfey, Attorney at Law, Zimmerman, Axelrad, Meyer, Stern and Wise, P.C. Houston TX, Tel. 713-552-1234
William Morfey is an associate attorney with Zimmerman, Axelrad, Meyer, Stern & Wise, PC. with a BA from the University of Illinois, 1997, and JD from South Texas College of Law, 2001. His practice includes a broad range of commercial litigation and trial work, including contract disputes, business torts, and construction litigation. He has handled a number of complex business litigation cases involving issues ranging from partnership disputes and recovery of fraudulently transferred assets to piercing the corporate veil and real estate fraud.
To an audience of about 70 at the HESS Club, Mr. Morfey gave a slide presentation titled "Residential Construction Defect Claims in Texas - Out with the New, In with the Old" that focused on three goals:
He discussed the two common types of Law:
Some of the terms defined were TRCCA, TRCC, SIRP, RCLA, DTPA.
Mr. Morfey stated that the TRCCA is a subset of the RCLA and RCLA is a subset of DTPA.
Mr. Morfey further discussed warranty periods. He discussed two types of warranties, implied and expressed, which he defined as follows:
Thus expressed warranties must be sufficient to meet implied warranties though there is some room for variation within this framework.
Mr. Morfey provided a brief history of the TRCCA and noted that it sunsetted (not actually abolished, they just let it die) by the Texas Legislature on Sep 1, 2009. There is a window of one year for claims after that date. There were many guidelines in TRCC but few areas for enforcement. An advisory committee to the sunset commission said the TRCC process was "fundamentally flawed" and should be abolished.
Mr. Morfey stated that there was a lot of criticism for the TRCC and specifically quoted a letter from Carol Keeton Strayhorn, Texas Comptroller of Public Accounts dated (Jan 23, 2006) including:
Mr. Morfey said that after the TRCC shuts down (August 31, 2010) we will go back to using RCLA rules and experts will again be more instrumental in determining construction defects as common law will now apply for defects - including warranties implied or expressed, as there will be no method for resolution other that through the courts. He stated that the safest course of action is for builders to offer warranties and performance standards that are more restrictive that those from TRCCA. In other words, the law will revert to what it was before TRCCA was adopted, i.e. implied warranties and good workmanship of construction. Courts will probably consider TRCCA for contracts executed before Sep 1, 2009.
Mr. Morfey also discussed House Bill 2295 that, had the Texas Legislature passed it in 2009, it would have:
He believes this bill, though not law, could raise the standard of care for upcoming homebuilding in the Texas.
In closing, Mr. Morfey believes "A big battle is brewing in Austin for 2011." He said that the Texas Legislature must clean up RCLA by removing all references to TRCCA. He stated that consumer interest faction groups wary of governmental influence of builders are likely still strong. He also said there is a chance a whole new legislative model will be started in 2011, and if so, this time he hopes it will allow more technical input from the community.To download Mr. Morfey's slide presentation, click here.