Greensboro-based Samet Corporation is suing a subcontractor and architecture company that were hired to work on a mixed-use development in Elon, Park Place at Elon, for allegedly failing to provide services in a manner that would’ve prevented future structural damage to the property – which Samet claims later cost more than $2 million to fix.
Samet has filed a lawsuit in Alamance County civil superior court against Plageman Architecture in Burlington and Teabo & Sons Stucco in Jacksonville, North Carolina, seeking damages for alleged breach of contract and other claims, as well as recovery of the more than $2 million that Samet claims to have spent to make structural repairs to Park Place at Elon.
The property owner, EDG Properties, hired Samet to design and build Park Place at Elon, a four-story mixed-use development at 202 West Haggard Avenue in downtown Elon, in November 2014. The lawsuit describes Park Place as a four-story student living facility with retail and/or restaurant space on the ground floor and 43 apartments on the second, third, and fourth floors. Elon University manages the apartments for Elon University students.
The defendant companies were hired in 2015 and 2016 to work on the project, and construction of Park Place at Elon was completed in 2016, according to the court file.
Samet claims in its suit that it was forced to make more than $2 million in repairs to the property in 2020 to correct defects that were discovered in the process of investigating a water intrusion – specifically, water entering the exterior walls and creating an “imminent risk” to the structural integrity of the building.
Teabo & Sons was contracted to provide labor, materials, and equipment for the project, specifically for an exterior insulation and finish system, based on a copy of the contract that is included in the court file.
Plageman was contracted to provide consulting and architectural services for the project, which was substantially complete in mid-June 2016.
Samet was later notified, in February 2020, by the owner of Park Place at Elon that a “potential water intrusion” had been discovered during the due diligence period for a potential sale.
The investigation later revealed that the “water intrusion was caused by numerous deficiencies in the construction…particularly related to the design, labor, materials, equipment, and services provided by the Defendants and [their] failure to perform their work…in accordance with the relevant contract documents and/or plans and specifications [and] in accordance with applicable building codes, and failure to perform their work” in a manner that would’ve prevented future damage to the property, Samet claims in its suit.
Samet’s suit alleges that Teabo & Sons failed to account for “shrinkage and movement”; improperly installed adhesive on the insulation boards; and failed to install the necessary wall-flashing at windows and door frames, according to the complaint.
Samet claims that these deficiencies in the work on the project caused substantial damage to the following portions of the building: Exterior plywood sheathing and structural framing; movement of the building frame associated with the “drying shrinkage” of the wood framing in the exterior walls; damage to vinyl window frames; damage to window units, including warping of several window frames; cracking of the exterior insulation finish system along the elevated floors of the building, which contributed to water entering into the exterior walls; and interior damage or the imminent risk of it.
Samet was the design-builder under the contract with EDG Properties and was liable for any structural damages and expenses for repairs, according to the suit. Samet claims to have made more than $2 million worth of repairs to the property between May and September 2020.
Teabo & Sons was a subcontractor hired to work on the Park Place at Elon project in August 2015, for a total contract price of $268,860, based on a copy of the contract that is included in the court file. Teabo & Sons has an office at 1323 Blue Creek Road in Jacksonville, North Carolina.
Plageman, which has an office at 408 South Spring Street in Burlington, was hired to provide architectural consulting services, which included developing unit plans, building plans, and elevation plans, according to Samet’s suit. The court file doesn’t indicate how much Plageman was paid for its services on the Park Place project.
Samet claims that Plageman failed to deliver a “design free of defect and in line with the contract documents [by] failing to account for building shrinkage and movement; failure to detail certain connections, and failure to detail certain aspects of the design that ultimately became areas of needed repair.”
While the defendant companies’ contracts included a provision that indemnified Samet against any future damage, losses, or expenses related to the project, they “failed to honor the request for indemnity” and failed to assist in funding the repairs, Samet asserts in its suit.
Samet is seeking more than $25,000 in damages against the defendants under multiple alleged claims for relief, including breach of contract; negligence; and breach of warranty.
The developer is also requesting a joint award for more than $25,000 in damages against the defendants, collectively; a motion to compel arbitration of the contracts; and recovery of its costs for filing the action.
The three parties (Samet, Teabo, and Plageman) met in late February of this year, hoping to resolve the dispute outside of court, but were unable to do so, according to the suit.
“Public policy favors arbitration because it represents ‘an expedited, efficient, relatively uncomplicated, alternative means of dispute resolution, with limited intervention or participation, and without the primary expense of litigation — attorneys’ fees,’” Samet notes in its suit, citing two rulings by the N.C. Court of Appeals that established the legal framework for attempting to resolve monetary and/or contractual disputes outside of court.
Samet is being represented for its lawsuit by Raleigh attorney Jeffrey D. Keister of the McAngus, Goudelock & Courie law firm.
Neither of the defendants had filed a response by press time.
The Johnston, Allison & Hord law firm in Charlotte has apparently represented Teabo & Sons during the dispute resolution process earlier this year; and the Ragsdale Liggett law firm in Raleigh represented Plageman Architecture, according to the court file.