Consumers' suit on roof plywood is turned aside Court of Appeals says homeowners can't sue producers

Fire protection claimed

'Deceptive practice' must occur in sale to trigger remedy

November 15, 1995|By Dennis O'Brien | Dennis O'Brien,SUN STAFF

Maryland's highest court ruled yesterday that homeowners cannot sue the makers of defective fire-resistant plywood -- used in 30,000 townhouses in Maryland -- because Maryland's consumer laws offer no protection to such buyers.

The Court of Appeals ruled, 4-3, that a group of Montgomery County homeowners cannot sue makers of fire-retardant treated plywood.

The decision essentially blocked the only avenue of redress for thousands of Maryland homebuyers.

"This is a black day for a lot of consumers and for a lot of homebuyers in Maryland," said Gary Mason, the lawyer representing the homeowners' group.

Three homeowners filed suit in Montgomery County Circuit Court in 1991 against Osmose Wood Preserving Inc. of Buffalo, N.Y., Hoover Universal Inc. of Milwaukee, and Hoover Treated Wood Products Inc. of Thomson, Ga., alleging deceptive trade practices under the Maryland Consumer Protection Act.

But the Court of Appeals affirmed Circuit Judge J. James McKenna's July 29, 1991, dismissal of the suit, ruling that the homeowners could not seek compensation under the act because they did not deal directly with the manufacturers.

"The deceptive practice must occur in the sale or offer for sale to consumers. In this case, the allegedly deceptive practices occurred entirely during the marketing of the plywood to the builders," Chief Judge Robert C. Murphy wrote in a 26-page decision.

Read K. McCaffrey, a lawyer for Osmose, said fire-retardant plywood was used in townhouses throughout Maryland from 1979 to 1989 after building codes were changed to allow it to be used in townhouse roofs as a fire safety feature, as a replacement for concrete-block common walls.

"When the laws were changed, these builders saved a lot of money using this material," he said.

A report by the state Department of Housing and Community Development estimated that 30,000 townhouses in Maryland were built in the 10-year period when the defective plywood was used, said John Nethercut, an assistant attorney general in the Consumer Protection Division.

Mr. Nethercut said the high court's ruling leaves many of those home buyers with no means to seek reimbursement for the costs to replace their roofs.

Thomas Murtaugh, vice president of sales for Ridge Lumber, said townhouse roof replacements cost $1,600 to $3,200.

But Mr. McCaffrey said the homeowners never should have tried to use the Consumer Protection Act to sue the plywood manufacturers because the act was intended to protect consumers from fraudulent merchants -- not from suppliers.

"I think the [Maryland] attorney general and the plaintiffs in this case tried to bend the law to suit them, and it didn't work," he said.

Mr. Nethercut said many builders incorporate for a specific housing development and then dissolve their corporation after the project is completed, which makes it difficult to sue them.

"The idea was to go against the manufacturers because they were the ones responsible for the defective materials," Mr. Nethercut said.

The court also ruled that the case did not meet legal test for a tort claim because there was no evidence to show that the roofs were in danger of collapsing and injuring the plaintiffs.

"There is no allegation that any injury has ever occurred since the roofs were installed or that any of the roofs have collapsed because of weather conditions," the opinion said.

In a tartly worded dissent, Judge John C. Eldridge said tort claims should have been allowed because the roofs continue to pose a danger.

"The message the majority sends to these homeowners is that they should attempt to clean their downspouts, replace shingles, etc., and sue for economic loss only after the roofs give way and they fall, breaking their legs or their necks," Judge Eldridge said.

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