Q&A with Scott Sullan
"Enemy Role": Homeowners love lawyer who takes builders to court in shifting-soils cases

By real estate editor John Rebchook
Rocky Mountain News

News: You recently won almost a $1 million settlement in binding arbitration form Writer Corp. for two homeowners whose homes were damaged by shifting soils. Did you ever have any doubt you would win?

Sullan: You always have doubts. There is no sure thing in litigation. But I always thought we had a strong case, and I continue to believe that.

News: How did you get involved in construction litigation?

Sullan: I’ve always been involved in the construction field. My dad was an architect, so I used to go to construction sites with him from the time I was knee high to a grasshopper. I learned to read construction plans and held a number of jobs in construction. I was a laborer and an apprentice carpenter and worked on a number of buildings, including the Standard Oil building in Chicago, where my dad was the head architect. I also held a number of construction jobs in and around Chicago and in Virginia. So when our firm started taking construction litigation cases, I was sort of the natural choice.

News: Does your construction background help you in litigation?

Sullan: It’s invaluable. It gives me great insight to whether somebody is telling me the truth. If somebody tells me they can’t buy a 10-foot concrete form, I know that is not true. I used to build them.

News: I know you’ve been involved with large, class-action suits involving home builders. Was that your introduction to construction litigation?

Sullan: No, my first construction defect case was in the early to mid-‘80s, and it didn’t involve shifting soils. It involved a product called Sarabond.(Sarabond was a concrete adhesive made by Dow Chemical Co., which broke down, damaging hundreds of buildings and structures across the U.S.)

News: When did you get involved with expanding-soil cases?

Sullan: It was in 1990 or 1991. An attorney knew of our construction expertise. He has a case representing 13 homeowners in Highlands Ranch and needed someone to co-counsel with him.

News: How many homes have been involved with your shifting-soil cases?

Sullan: It’s been over 16,000 homes, which includes the largest class-action case of its kind.

News: How many cases are you still involved with?

Sullan: There’s something like 350 individual cases.

News: How are the cases usually resolved?

Sullan: A lot of these cases are resolved with the builder covering the cost of repairing the properties, the cost of expert witnesses and legal costs. Unfortunately, some of the insurance companies ( representing builders) feel like they’ve been burned when the cost of repairs was higher than they thought, so they’re not as willing to settle.

News: Are you Public Enemy No.1, as far as home builders are concerned?

Sullan: Without a doubt. I don’t think I would get out of a home builders association meeting alive. But I will tell you that I’ve strived for over 20 years to put up a hard fight, but in an honest and straightforward way. We stay within the lines. If I give another attorney my word, you can take it to the bank.

News: One builder told me you made $10 million last year on these cases.

Sullan: That’s ridiculous. I’m not going to tell you how much I made, but it’s just ridiculous the kind of rumors home builders float.

News: So you’ve heard the $10 million figure before?

Sullan: It’s gone up. The last number I had heard was $6 million.

News: Do you primarily work on a contingency basis?

Sullan: Sometimes we charge an hourly rate, but most of them are on contingency. Few homeowners can afford an hourly rate on this kind of litigation.

News: How much do you keep?

Sullan: Our fee is one third. But remember, our goal is to recover the cost of repairing the property, plus expenses. We’re not going after the “legal lottery,” despite what home builders think.

News: Does it bother you that home builders dislike you so much?

Sullan: I’m not in this business to make friends with home builders. My clients love me.

News: Do you think builders are doing enough to prevent damage from shifting soils?

Sullan : I don’t think builders have given proper attention to the soils issue. It’s amazing how much information is not disclosed to homebuyers. In the (John) Duffy home (in the Writer case), they had a 25 percent risk of serious foundation problems due to shifting soils. I told another reporter I wouldn’t buy a pack of gum if it had a 25 percent chance of it being defective. And this is true. You have better odds playing Russian roulette.

News: Are there some places where builders shouldn’t be putting up houses?

Sullan: In my opinion, yes. There are places where you have highly expansive clay soils. It’s called clay bedrock. Where you and I are from, when we think of bedrock, we think of bedrock that will never move. Out here, in certain areas, they’re building on clay bedrock with an 8 percent swell and 30,000 pounds of swelling pressure. If a Cadillac weighs 5,000 or 6,000 pounds, that’s enough pressure to move six Cadillacs. Imagine what that kind of pressure does to a home.

News: Is you own house in danger from expanding soils?

Sullan: No, I live in Willow Springs behind the Hogback. My house sits on red sandstone.

News: What should homeowners do if they think expanding soils are damaging their house?

Sullan: Don’t sit on it and monitor the situation. There’s a two-year statue of limitations, from the date on which the homeowner knew or should have known about the defect. Builders always say the two years start from the day the homeowner saw the first crack, but we don’t agree with that. But don’t mess around, or you might lose your legal rights. As soon as you suspect a problem, contact an attorney or a competent structural engineer. A lot of people call the builder, who puts them in touch with the engineer who built the house. Of course, he’s not going to find any problems with the foundation.