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Case of the Month February 2012

Carpenter's Negligence Results in Cellulose Insulation Fire

Jackson St. Town Homes v. CMA of Milwaukee

Case Type:
Construction & Industrial Accidents - Fire/Burn/Explosion
Construction Defects - Defective Workmanship
Insurance - Property

Specific Liability:
Subcontractor's failure to post warnings in construction area resulted in building fire

General Injury:
Monetary damages

Jurisdiction:
State: Wisconsin
Court: Circuit Court of Wisconsin, First Judicial District, Milwaukee County.

Related Court Documents:
Plaintiff's amended complaint: 2008 WL 8183551
Defendants' pretrial memorandum: 2010 WL 7504835
Plaintiff's expert witness Jantzen's affidavit: 2009 WL 7230892
Verdict form: 2010 WL 7504897

Case Name:
Jackson Street Town Homes Inc., v. CMA of Milwaukee Inc., Zurich American Insurance Company and Signature Group Inc.

Docket/File Number:
2007CV1137

Verdict:
Plaintiff, $152,962.01

Verdict Date:
Oct. 14, 2010

Judge:
Richard J. Sankovitz

Attorneys:
Plaintiff: Sean Lanphier, Mallery & Zimmerman, Milwaukee, Wis.

Defendants (CMA and Signature): Mark S. Nelson, Sarah A. Ponath and Christopher J. Conrad, Nelson, Connell, Conrad, Tallmadge & Slein, Waukesha, Wis.

Trial Type:
Verdict

Experts:
Plaintiff: Louis F. Jantzen, PE, civil engineer, Jantzen Facilities Development, Delafield, Wis.; Bonnie Schwid, handwriting analyst, Anagraphics, Green Bay, Wis.; Doug Hubert, CPA, Controller Company, New Berlin, Wis.

Defendants: John G. Peters, CPA, Peters & Associates, Brookfield, Wis.

Breakdown of Verdict:
$1,000.00 to plaintiff for its insurance deductible
$8,000.00 to plaintiff for moveable property, furniture, appliances and equipment purchased
$3,652.83 to plaintiff for utilities due to delay
$19,361.91 to plaintiff for real estate taxes
$21,124.00 to plaintiff interest
$3,625.00 to plaintiff for property maintenance
$850.00 to plaintiff for office expenses
$7,000.00 to plaintiff accounting fees
$80,719.33 to plaintiff for reduction in selling prices

Summary of Facts:
Jackson Street Town Homes (JSTH) reportedly hired in 2004 CMA of Milwaukee to build a four-condo unit at 1658 N. Jackson St. in Milwaukee, Wis. CMA hired Signature Group as construction manager.

A fire started in the building on the morning of May 1, 2006. The Milwaukee Police Department Fire Investigation Report noted the origin of the fire on the north side in front of the fireplace between the first and second floor. The building had to be gutted due to the damage.

JSTH filed a lawsuit in the Milwaukee County Circuit Court against CMA, Signature Group and the plaintiff's insurer Zurich American Insurance Company. The plaintiff alleged the fire was caused when a recessed light fixture ignited cellulose insulation. JSTH asserted a subcontractor, hired by CMA, placed cellulose insulation in the ceiling. Another subcontractor was instructed to install wire cages and batt insulation around the recessed light fixtures to keep the cellulose insulation at least three inches away from the fixtures.

On the Friday before the fire, three light fixtures in front of the subject fireplace had not yet been caged. There was no indication of any posted warnings to visitors regarding the potential hazard of turning on lights.

A building owner held an open house at the building on Sunday. The plaintiff alleged some cellulose ignited when the lights were turned on.

JSTH filed an insurance claim and received $1,685,700 from Zurich. The plaintiff alleged incurring an unreimbursed loss of $900,000. It sought judgment against the defendants, jointly and severally.

CMA and Zurich alleged the plaintiff assumed the risk of loss when it failed to purchase adequate insurance.

Judge Richard J. Sankovitz granted in part and denied in part the defendants' motions for summary judgment. Jackson Street's claims of delay losses for loan fees, late payment fees, interest and lost profits were dismissed. The damage claims consisting of costs for rebuilding the condominiums equivalent to that defined in the original contract were also dismissed.

A jury returned a verdict Oct. 14, 2010. It found CMA and Signature Group both breached their contracts. The panel also found Jackson Street failed to mitigate its damages. The plaintiff was awarded $1,000 for its insurance deductible; $8,000 for moveable property, furniture, appliances and equipment purchased; $3,652.83 for utilities due to delay; $19,361.91 for real estate taxes; $21,124 interest; $3,625 for property maintenance; $850 for office expenses; $7,000 accounting fees; and $152,962.01 for reduction in selling prices.

Judge Dennis P. Moroney ordered judgment Jan. 12, 2011, for the plaintiff against all the defendants, jointly and severally, in the amount of $132,736.89 and against CMA and Signature for $173,479.99.

Court: Circuit Court of Wisconsin, First Judicial District, Milwaukee County.

Westlaw Citation:
2010 WL 8020458