THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Tuesday, April 23, 1996 TAG: 9604230345
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY DEBBIE MESSINA AND MARC DAVIS, STAFF WRITERS
DATELINE: VIRGINIA BEACH LENGTH: Medium: 90 lines
Sandbridge homeowners cannot collect nearly $500,000 from the company that built their failed bulkheads, the Virginia Supreme Court has ruled.
The homeowners were counting on that money to help rebuild their storm-damaged bulkheads. Now they must decide whether to make the repairs themselves, pull out the bulkheads or pursue further legal action.
Another option is to do nothing and face the consequences with the city.
The city has declared these wrecked bulkheads at 22 homes a public safety risk. The city has imposed a May 1 deadline for the homeowners to remove, replace or repair the bulkheads. If the homeowners do nothing, the city will rip out the walls, then bill the homeowners.
``Each one of these homeowners has some difficult choices to make,'' said John S. Norris Jr., the homeowners' attorney.
The city had extended the deadline twice so the homeowners could work out their legal problems with the builder, Waterfront Marine Construction Inc.
``We have given them many, many opportunities to act on their own behalf,'' said Phillip J. Roehrs, a city coastal engineer. ``If the May 1 deadline is not met by the owners, our intention is to remove the bulkheads and bill the property owners.''
The homeowners spent $850,740 to build the bulkheads in 1988. A year later, an engineer hired by the homeowners said the bulkheads were defective, so the homeowners sued. The dispute wound up in arbitration.
In 1991, an arbitration panel ordered the company to fix the bulkheads and ordered the homeowners to pay the remaining $178,328 on the original contract.
The repairs were never done. Instead, the bulkheads were ruined in a storm a few months later.
The homeowners sued again, and Circuit Judge Thomas Shadrick let the case go back to arbitration. This time, the panel ordered the company to pay $491,795 in damages.
On appeal, the company argued that this amounted to trying the same case twice. The Supreme Court agreed. It ruled that the second arbitration hearing violated the principle of res judicata - a rule that says once a case has been decided, it cannot be re-litigated.
The court also ruled that the judge, not the arbitration panel, should decide if a case has already been tried once. Shadrick let the panel make that decision.
The bulkhead company's attorney, Gregory A. Giordano, hailed the ruling as good for arbitration.
``Arbitration is supposed to be speedy and cost-effective,'' Giordano said. ``What this decision says is you've got to have some certainty. You've got to have just one bite of the apple.''
But Norris, the homeowners' attorney, said he was disappointed.
``In my opinion, it's going to restrain the arbitrability of claims,'' Norris said. ``In my opinion, the court is creating a presumption against arbitration.''
Now, Sandbridge homeowners face a costly dilemma.
When the bulkheads were built, prices averaged $35,000 to $40,000 per home. Today, repairing or replacing them could cost up to $80,000 per home.
``We don't have the money to repair it at this point,'' said Adelaide C. Snyder, who owns a Sandbridge vacation home with her husband, Charles E. Snyder Jr.
The Snyders probably will take their bulkhead out, leaving their home vulnerable to storms. The family lost another Sandbridge home in the Ash Wednesday storm of 1962.
``We've committed ourselves to do what is required by the city now, even though we don't go along with it,'' Snyder said.
Another bulkhead owner is taking a different tack. ``This bulkhead is not going to be removed,'' said Helen McDonald, who declined to discuss her plans further.
It is not known what the other bulkhead owners will do.
Giordano, the contractor's lawyer, said he feels sorry for the homeowners but said their problems go deeper than a simple contract dispute.
``The fact of the matter is they're in harm's way,'' Giordano said. ``If they had won this case, that wouldn't have solved their problems. Someday, those houses are going to get knocked over.'' MEMO: THE COST
When the bulkheads were built, prices averaged $35,000 to $40,000 per
home.
Today, repairing or replacing them could cost up to $80,000 per
home.
KEYWORDS: EROSION by CNB