Judge rules in favor of contractors in wet-home case

y Janice Gregorson

gregor@postbulletin.com

Mayo Foundation has lost its bid to recover $185,000 it sought from two local building contractors for water infiltration repairs to a home.

Olmsted District Judge Jodi Williamson on Wednesday ruled in favor of the two building contractors -- Mathias Home Builder and Handcraft Plastering Inc. -- and dismissed the civil lawsuit. Mayo had claimed the water infiltration was due to faulty workmanship.

Dan Heuel, the Rochester attorney representing Mayo, said no decision has been made on appealing the judge's ruling. They have 60 days in which to appeal.

Mayo brought the lawsuit against the two contractors to recover expenses Mayo incurred in paying for repairs to a home sold to a local attorney.

The home, at 1031 Hidden Ridge S.W., was built in 1997 for Dr. Leonard Gunderson and his wife, Kathryn. Mathias Builders was the general contractor.

The Gundersons subsequently relocated to Arizona and, in accordance with Mayo policy, the foundation agreed to buy the home when the Gundersons couldn't close on a sale date before they left Rochester. The home was marketed through a local real estate agent and sold to attorney Tom Patterson and his wife, Kelly.

The purchase was contingent on an inspection of the home and an agreement that Mayo pay for any required repairs. The inspection showed deficiencies in the installation of an exterior finish. The inspector said that these installation defects have been known to cause moisture penetration and subsequent damage inside the walls. The Pattersons contracted to have the repairs made to the home in 2002. Mayo agreed to reimburse the Pattersons for the repairs without independently inspecting the property. However, by the terms of an addendum to the agreement, Mayo retained the right to seek reimbursement for the damages from the responsible party or parties.

In a lengthy memorandum attached to her order, Williamson noted the complaint was served on the local builders in August 2003, representing the first written notice to the builders of the damages. Earlier this year, the two builders moved to have the suit dismissed, saying Mayo failed to given written notice within six months of becoming aware of the claim, as required by law. And, they asked the judge to exclude evidence offered by Mayo to prove negligence. They argued that Mayo failed to preserve the physical evidence of any damage, denying them the right to independent investigation and inspection.

Williamson agreed on both counts. She said the builders were never given a chance to inspect the evidence before it was destroyed and said they would suffer "extreme prejudice" if Mayo were allowed to use expert testimony and reports based on their inspections of the home.

Mayo contended the evidence was not in their exclusive possession or control, so they weren't responsible for its destruction. They said that even if the evidence was destroyed, there is no prejudice to the defendants.

But Williamson ruled that Mathias and Handcraft would suffer extreme prejudice if the evidence Mayo offers is not excluded at trial. She said the defendants should not be required to rely on Mayo's experts.

She said there is no doubt that at some point before the sale, Mayo knew of the potential for litigation and still controlled the evidence and should have protected it for inspection by the defendants. She said that even though Mayo wasn't directly involved with the destruction of the relevant evidence, it was responsible for protecting it.