Disgruntled Homeowners File EIFS Synthetic Stucco Lawsuits

General Business Trial Group February 18, 2019

Traditional stucco siding provides a solid, long-lasting, low-maintenance, and seamless home exterior. But many homeowners have learned the hard way that what they thought was stucco is, in fact, a synthetic stucco known as Exterior Insulating and Finish System (EIFS). EIFS prone to water-related defects that can cause major headaches—and expenses—for homeowners.

Since the 1990s, homeowner across the country have filed EIFS lawsuits seeking compensation for water damage and other losses. As with other types of construction disputes, these cases can be difficult to litigate due to the many parties involved. When successful, however, EIFS lawsuits have resulted in plaintiffs recovering tens to hundreds of thousands of dollars.

The Business Trial Group handles construction litigation on a contingency-fee basis. Our clients pay only for results, not for hours. This model allows every legal option to be pursued without the burden of ever-accumulating attorney fees.

Find out if you might have an EIFS construction defect claim during a no-cost, no-obligation case review.

Real Stucco vs. EIFS

Commonly used in the Southwest, Florida, and Texas, stucco siding is a mixture of Portland cement, sand, lime, and water. It is applied in three layers over a wire or wood lath and finished with an acrylic-polymer top coat. Rock-hard but also permeable, stucco provides excellent insulation, durability, and breathability. Moisture that gets behind the façade escapes through tiny pores in the surface, reducing the chances of rot and decay.

EIFS is a stucco alternative developed in Europe and introduced in the United States during the 1960s. An EIFS cladding system utilizes a rigid-board insulation attached to masonry or stud-framed walls. A mesh-reinforced base coat is applied over the insulation board, followed by a finish coat. Although designed as a waterproof system, water and water vapor can seep behind the EIFS surface through cracks and fractures and enter the wall system. Once it does, there is no way for water to escape the non-breathable EIFS.

EIFS Problems

Water that becomes trapped behind an EIFS system can cause serious moisture-related problems, including:

Mold, mildew, or fungi growth on interior walls
Cracked drywall
Cracking, peeling, and bubbling paint
EIFS cracking and delamination
Rotting wood
Damage to wall structures
Structural failure
Increased humidity
Insect infestation
Respiratory and allergy ailments

In addition to moisture-related problems associated with EIFS systems, homeowner have reported other issues, including:

Diminution of home value (often as high as 20 to 35 percent)
Homeowners policies not being renewed
Banks refusing mortgage extensions
Realtors refusing EIFS home showings

In cases where insurers have limited their exposure with EIFS exclusions or refusal to insure EIFS homes, homeowners might be forced to bear the costs of home inspections and repairs. And if insurance becomes less attainable for EIFS, affected homes will continue to lose value.

EIFS installers may also have difficulty obtaining insurance coverage due to the high degree of risk and the possibility of litigation. EIFS manufacturers that are sued by homeowners generally deny the claims and attribute moisture problems to improper installation.

The latest generation of EIFS is purported to address moisture buildup issues. But insurers don’t always differentiate between older “barrier” EIFS and newer “drainable” EIFS.

Determining if Your Home Exterior is EIFS

Homeowners who are unsure whether their siding is real stucco or EIFS can perform a few simple tests.

The easiest is to knock on the siding. Real stucco is completely rigid and has no “give” to it, while synthetic stucco yields slightly and tends to produce a hollow sound when knocked on. The most foolproof way is to break into spot on the siding. A layer of foam board indicates EIFS.

If you are unable to tell whether you have real or synthetic stucco, hire a professional home inspector to examine the siding. A pro will also be able to inspect for water damage, something that is very difficult for a homeowner to do. The presence of water damage in an EIFS system might be cause for legal action.

Contingency-Fee Construction Dispute Lawyers

EIFS construction disputes tend to be complex. They often involve the EIFS manufacturer, distributor, applicator, contractor, and homeowner. A builder or real estate agent who fail to disclose the use of EIFS may also be implicated. The many contracts, individuals, and businesses that can make up a single EIFS case can lead to multiple claims and counterclaims that take a long time to resolve.

The Business Trial Group’s contingency-fee model takes the pressure off our clients to seek a quick settlement. However long it takes to recover your losses, you will never pay hourly fees. And if we don’t recover money for you, you pay nothing.

Discuss a potential EIFS lawsuit with our lawyers, free of charge, during an initial case review.

Scholastic Sued Over Allegedly Refusing to Pay Executive Commission

General Caroline Cornell July 12, 2018

Scholastic, the company synonymous with school book fairs, Harry Potter, and Clifford the Big Red Dog, may have been named to Forbes’ Best Large Employer list in 2017, but that doesn’t necessarily mean that it treats its employees fairly.

A former account executive alleges that the book company refused to pay a commission he earned and that was agreed upon in his contract. Business Trial Group attorney Benjamin Webster is now helping him fight back to recover the money he claims he is owed.

Client Claims Scholastic Only Paid Him a Fraction of His Commission

Scholastic had unilaterally decided to reduce the commission amount.

Joe Jernigan had an Account Executive compensation plan with Scholastic, which provided that the company would pay him commissions on sales achieved in his sales territory.

Less than a year after signing the compensation plan agreement, Mr. Jernigan helped negotiate and oversee a multi-million dollar sale with the School District of Palm Beach County in Florida. The sale closed in April of 2013 for approximately $8.7 Million.

According to the terms of his compensation plan, Mr. Jernigan should have received a commission equivalent to 7.5% of the sale, or roughly $653,000. However, Scholastic informed Mr. Jernigan that it would not pay him the amount he was owed, but instead had unilaterally decided to reduce the commission amount and send him a check for a fraction of what he was owed.

Business Trial Group Files Breach of Contract Lawsuit

As alleged in the Complaint, Scholastic’s actions breached the contract that it had with its former employee. The terms of the compensation plan didn’t permit Scholastic to decide after-the-fact to not pay Mr. Jernigan the commission amount he was owed, and especially not after the sale had been closed.

On November 27, 2017, attorney Benjamin Webster filed a breach of contract lawsuit on the executive’s behalf. The complaint alleges that Scholastic owes Mr. Jernigan more than $465,000 in damages and interest, plus attorney’s fees and costs.

The case is currently pending in U.S. District Court for the Middle District of Florida.

Employment Breach of Contract Attorneys

Companies often think they can get away with shortchanging their employees and contractors.

Why do companies shortchange their employees and contractors, even when payment terms are clearly specified in compensation agreements? It’s because they think they can get away with it, and they often do.

Most business dispute attorneys charge hourly fees. Corporate defendants with deep pockets simply drag out and delay litigation long enough until the employee or contractor is forced to withdraw their lawsuit or settle for less than is fair. After all, it doesn’t make financial sense for a plaintiff to pay more in legal fees and costs than the amount they are owed.

The Business Trial Group offers a different model that helps level the playing fields between large corporations and the contractors, employees, and small companies that stand up to them. By using a contingency-fee model rather than charging an hourly rate, employees don’t have to worry about the financial burdens that hourly fees often bring. If a case isn’t successfully resolved with a settlement or verdict, our clients pay nothing.

Our attorneys handle multiple types of employment contract breaches, including disputes over salary and compensation, benefits, and termination policies. If a company didn’t fulfill the terms of your employment agreement and owes you money or benefits, or failed to meet another obligation, you may be able to file a lawsuit. Contact us today for a free, no-obligation legal review.

Recruiters Allege They Were Never Paid for Securing Hired Candidates

General Caroline Cornell June 12, 2018

Recruiters are like the matchmakers of the business world, helping businesses find the perfect job candidates to fit their needs. Securing the best person for a role though can be a full-time job, which is why many companies rely on recruiters’ skills and networks to fill vacancies quickly.

Recruiters are compensated for this valuable work, often in the form of recruiter or placement fees. But, sometimes companies fail to fulfill their end of the bargain, forcing recruiters to fight for their hard-earned compensation.

When this happens, our breach of contract attorneys represent recruiters to help them obtain the compensation they are owed.

Recruiter Still Hasn’t Been Paid Months After Successfully Placing Candidate

To date, IAA has failed to pay anything to CLM Ventura.

This was the case for CLM Ventura & Associates, a third-party recruiting agency for the financial services industry, and their client International Assets Advisory (IAA), an independent broker-dealer and registered investment adviser.

In CLM Ventura’s situation, IAA and CLM Ventura agreed that CLM Ventura would be compensated for each financial advisor candidate that was both accepted and employed with IAA. For each successfully placed candidate, CLM Ventura would be paid 6% of the candidate’s trailing 12 months’ production.

Ultimately, CLM Ventura submitted a financial advisor candidate to IAA for consideration. IAA accepted and hired the candidate. But, to date, IAA has failed to pay anything to CLM Ventura.

Recruiting Firms File Lawsuits to Recover Unpaid Recruiter Fees

Attorney Aaron Garnett filed a lawsuit on behalf of another recruiting firm, Berkeley Search Associates.

CLM Ventura turned to the Business Trial Group for legal help in recovering the compensation that it was owed. On May 24, 2018, CLM Ventura filed a lawsuit against IAA in the Ninth Judicial Circuit for Orange County, Florida. The complaint alleges that IAA breached the parties’ contract by failing to pay plaintiff any compensation.

Breach of contract attorney Aaron Garnett is representing CLM Ventura, and disputes like these are sadly all too familiar to Mr. Garnett who has resolved numerous unpaid commission claims for recruiters and recently filed a lawsuit on behalf of another recruiting firm, Berkeley Search Associates.

In the case involving Berkeley Search Associates, First Watch Restaurants utilized Berkeley Search Associates services to secure a new employee/job candidate. Then, First Watch Restaurants hired the candidate, but, to date, Berkeley Search Associates hasn’t been compensated for its work. As a result, on March 6, 2018, Berkeley Search Associates filed a lawsuit against First Watch Restaurants in the Ninth Judicial Circuit for Orange County, Florida, which is still pending.

Are You a Recruiter That Needs Help Recovering Unpaid Compensation?

Sometimes, the only way to obtain the placement fees you are owed is by filing a lawsuit. If you are a recruiter who successfully placed a candidate but was not paid a commission, contact us for a free, no-risk case evaluation. You may be eligible to file a lawsuit.

Our attorneys work on a contingency-fee basis, which means you don’t pay us unless we recover compensation for you.

Fiduciary Rule on Shaky Ground After Fifth Circuit Ruling

General Business Trial Group April 4, 2018

An Obama-era Department of Labor (DOL) rule aimed at protecting retirement investors has been overturned by the Fifth Circuit Court of Appeals, casting further doubt on the rule’s future.

The fiduciary rule would require advisers to act in the best interests of retirement investors.

The DOL’s fiduciary rule, which would require financial institutions to act in their clients’ best interests when recommending retirement investments, had its implementation delayed under the Trump administration amid heavy pushback from financial services groups. Based on the ruling, the DOL says it will stop enforcing the rule, but that doesn’t mean the rule is officially dead.

In light of this setback for the fiduciary rule, retirement investors should seek out advisers who are willing to act in their best interests. Advisers still owe their clients certain professional duties, including recommending suitable investments, and can be held accountable for misconduct that causes investment losses.

If you lost significant money on an investment due to a financial adviser’s or institution’s misconduct, contact the Business Trial Group for a free case review.

Fifth Circuit Reverses Rule, Citing “Overreach”

The Fifth Circuit Court of Appeals voided the DOL fiduciary rule in a 2-1 split decision filed March 15. The majority agreed with the plaintiffs—a group that includes the U.S. Chamber of Commerce and the Financial Services Institute—that the rule was too burdensome and costly and could discourage lower-income Americans from receiving financial advice.

Writing for the majority, Judge Edith Jones said that the fiduciary rule was “unreasonable” and demonstrated “arbitrary and capricious exercises of administrative power.”

The fiduciary rule would provide stronger investor protections than the current suitability standard.

Chief Justice Carl Stewart wrote in dissent that the rule was “well within the confines set by Congress in implementing the challenged regulatory package.” Stewart cited a dramatic shift in the retirement-investment market away from private pensions controlled by large employers and money managers and toward individually controlled accounts that give investors greater responsibility for their own retirement savings. “This sea change within the retirement-investment market also created monetary incentives for investment advisers to offer conflicted advice,” said Stewart.

The fiduciary rule would provide a check on advisers offering conflicted advice by requiring them to act in the best interests of their clients when recommending retirement investments. This is stronger than the current standard, which only requires advisers to recommend investments that are suitable for their clients.

Consumer groups such as Better Markets have championed the rule, calling it a “simple, common sense principle.” Opponents claim the rule would make managing the accounts of small investors too expensive due to an increase in compliance costs and liability expenses for firms. They also claim the rule would limit the investment products that can be sold to retirement investors, since some firms would reduce their services, products, and offerings to comply with the higher standard of care.

What’s Next for Fiduciary Rule?

President Trump signed an administrative memorandum in February 2017 directing the DOL to perform an updated economic and legal analysis on the fiduciary rule. The order’s focus was whether the rule was “likely to cause an increase in litigation and an increase in the cost of retirement services.”

In November 2017 the DOL delayed implementation of the rule’s enforcement mechanisms from January 1, 2018 to July 1, 2019. Two provisions of the rule, however, were implemented in June.

Responding to press inquiries about the Fifth Circuit’s decision, a DOL spokesperson said, “Pending further review, the Department will not be enforcing the fiduciary rule.”

While the rule is not officially dead, many see the Fifth Circuit decision as the final nail in the rule’s coffin. The appeals court decision could be heard and overturned by the Supreme Court. The Securities and Exchange Commission (SEC) could also come up with its own version of the fiduciary rule. Some states, including Nevada and Maryland, are pressing ahead with fiduciary laws in lieu of federal action.

How Retirement Investors Can Protect Themselves

With the fiduciary rule on shaky ground, retirement investors should know how to act in their own best interests. Many financial institutions already act as fiduciaries to their clients and use this distinction as a marketing advantage. When looking for an adviser to handle your retirement investments, ask them whether they will act as a fiduciary on your behalf.

Other ways to screen prospective advisers include:

Perform a background check on FINRA’s Broker Check. Complaints and disciplinary actions are red flags.
Ask the advisor how they are paid. Large commissions can be a sign that the broker is motivated to sell you products that benefit them more than you.
Understand the investment products being suggested to you or used, and how they are managed.
Know how the adviser is registered. Someone registered as a representative of an investment adviser must act as a fiduciary, while someone registered as a representative of a broker-dealer only needs to follow the suitability standard. Advisers who are dual-registered may follow either standard. In the case of a dual-registered adviser, find out which role they are assuming when advising you.

Contingency-Fee Investment Loss Attorneys

The Business Trial Group’s securities litigation attorneys represent clients on a contingency-fee basis nationwide. We charge no upfront fees, and no fees at all unless we recover compensation for our clients.

If you suffered investment losses due to possible adviser misconduct or securities regulations violations, contact us for a free case review.