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ACK OBTAINS DEFENSE JUDGMENT IN MULTIMILLION DOLLAR LITIGATION OVER FIRST LEED PLATINUM BUILDING

Following a week long bench trial, the U.S. District Court for the District of Maryland entered judgment in favor of Permapost Products Company in what has been a five year legal battle over the cause of a construction defect that required substantial remediation to the Chesapeake Bay Foundation’s Philip Merrill Environmental Center (“PMEC”) in Annapolis, Maryland.

The case arose from the environmentally friendly construction of the PMEC in 2000. The Chesapeake Bay Foundation (“CBF”) contracted with SmithGroup, Inc. and Clark Construction Group to design and construct the PMEC. As part of the design, the parties decided on a structural and design element that utilized external columns and beams made of wood. Weyerhaeuser Company assisted with the construction by supplying an engineered laminate wood product called Parallam PSL® for the columns and beams. Weyerhaeuser then contracted with Permapost to treat the exterior Parallams with an environmentally friendly preservative treatment called PolyClear 2000.

Immediately after CBF moved into the building, the PMEC experienced issues with water leaking through the Parallam that required multiple investigations by forensic engineering and building experts. Despite the initial concerns, it was not until 2009 that CBF claimed that they first began to notice deterioration of the exterior columns and beams. CBF, SmithGroup and Clark eventually concluded that the use of PolyClear 2000 as the wood preservative for the primary structural component of the building was inherently flawed. Those three parties then entered into an agreement to replace the damaged Parallam with a similar wood product treated with a more robust wood preservative. CBF, SmithGroup, and Clark also collectively filed suit against Weyerhaeuser seeking over $9.6 million dollars in damages due to the remediation project. Weyerhaeuser then filed third party claims for negligence, breach of contract, indemnification, and contribution against Permapost. Before trial, Weyerhaeuser settled the claims filed by CBF, SmithGroup, and Clark for $3.5 million and sought to recoup the entire settlement amount from Permapost.

On behalf of Permapost, Matthew Angotti and Cullen Casey presented factual and expert evidence that the sole legal cause of the damages in this case – the replacement of the exterior Parallam – was related to the decision to recommend and ultimately choose PolyClear 2000 as the wood preservative on the exterior Parallams. Matt and Cullen argued that Permapost was not involved in the decision to use PolyClear 2000 and had they been consulted, they would have recommended that a much more robust preservative be used. Following the close of all the evidence, the Court agreed with the defense and entered judgment in favor of Permapost and against Weyerhaeuser on all remaining claims.

In his opinion, Judge Paul W. Grimm determined that it was “crystal-clear that PolyClear 2000 was not an appropriate choice [as] ... the preservative for the structural Parallams under the conditions used at the Chesapeake Bay Foundation” and that “Permapost had no material involvement at all in the determination to use PolyClear 2000 for the preservative in this particular case.” Judge Grimm also held that “as a matter of fact that there were too many design, construction, and maintenance failures that allowed water to penetrate the ... Parallam beams and columns at the structural connections” and it was these and other “deficiencies in design” that were the cause of the damages incurred by CBF, SmithGroup, Clark, and Weyerhaeuser.

As one of the Mid-Atlantic’s preeminent litigation firms, Anderson Coe & King has represented numerous general contractors, sub-contractors, product manufacturers and material suppliers. Our construction litigation team has successfully defended clients in many commercial and residential construction matters where faulty construction practices and defective products were alleged. For more information about how we may be able to help you, please contact our office.