Claris, Ltd. v. Hotel Dev. Servs., L.L.C.

2018 Ohio 2602, 104 N.E.3d 1076
CourtOhio Court of Appeals
DecidedJune 29, 2018
Docket16AP-685 & 16AP-727
StatusPublished
Cited by47 cases

This text of 2018 Ohio 2602 (Claris, Ltd. v. Hotel Dev. Servs., L.L.C.) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Claris, Ltd. v. Hotel Dev. Servs., L.L.C., 2018 Ohio 2602, 104 N.E.3d 1076 (Ohio Ct. App. 2018).

Opinion

KLATT, J.

{¶ 1} Defendant-appellant, Hotel Development Services, LLC ("HDS"), appeals a judgment of the Franklin County Court of Common Pleas entered in favor of plaintiff-appellee, Claris, Ltd. Intervenor-appellant, Westfield Insurance Company ("Westfield"), also appeals. For the following reasons, we reverse the judgment and remand this case to the trial court to enter a directed verdict in HDS' favor.

{¶ 2} On August 24, 2005, Claris and HDS executed a contract in which HDS agreed to build Claris a 4-floor, 122-room hotel in the Polaris area of Columbus, Ohio. Claris planned to operate the hotel as a Candlewood Suites, a brand owned by InterContinental Hotels Group. HDS began construction in September 2005, and it completed the hotel late in the summer of 2006. Claris opened the Polaris Candlewood Suites in September 2006.

{¶ 3} This case concerns the construction of the hotel's exterior walls. For the most part, the exterior walls are covered with exterior insulation and finish system ("EIFS"), a building cladding system that resembles stucco. Stacked-stone veneer covers a relatively small portion of the hotel at the first-floor level.

{¶ 4} The hotel's exterior walls contain multiple layers. The innermost layer is drywall, which is attached to the inner side of the wooden framing. Oriented strand board ("OSB") sheaths the outer side of the framing. Batt insulation is wedged between the framing studs. Before the installation of the EIFS, the builder affixed to the OSB sheathing a water-resistive barrier, which is a pliable sheet material. The first step of installing the EIFS involved mechanically fastening expanded-polystyrene insulation boards to the water-resistive barrier. Over the insulation boards, the EIFS subcontractor applied a base coat into which the subcontractor embedded a fiberglass mesh. Finally, the subcontractor applied more base coat and a finish coat over the mesh.

{¶ 5} The outermost EIFS coating is watertight; water cannot penetrate it unless the surface is broken. After installing the EIFS, the EIFS subcontractor applied sealant to bridge junctures between adjacent building components to prevent water infiltration. 1 Sealant fills the expansion joints in the EIFS and the joints between the EIFS and the windows, as well as the EIFS and the sleeves holding the packaged-terminal-air-conditioner ("PTAC") units. The PTAC units are located directly beneath the windows.

{¶ 6} Behind the cladding and sealant, the openings for the windows and PTAC units are surrounded by tape-like, flexible flashing to prevent water intrusion. Incidental water that penetrates through the cladding or sealant is intended to slide over the flashing and onto the water-resistive barrier.

{¶ 7} The water-resistive barrier provides the last, innermost layer of protection against water infiltration. The water-resistive barrier used on the Polaris Candlewood Suites-Tyvek StuccoWrap-serves as a drainage plane. StuccoWrap is corrugated, so when installed, the StuccoWrap creates narrow, vertical spaces for water to collect and drain to the bottom of the wall.

{¶ 8} In July 2013, hotel guests began to complain of water intrusion in rooms 128, 228, 328, and 428, i.e., the "28 bank" of the hotel. When it rained, water penetrated the exterior wall around the windows and PTAC units. Claris hired Elford, Inc., a general contracting company, to investigate and fix the leaking.

{¶ 9} To complete its repair work, Elford removed the EIFS and water-resistive barrier from the exterior wall outside of the 28 bank. The removal of the outermost wall layers revealed sizable patches of organic growth on the OSB sheathing. For the most part, the organic growth was concentrated below the PTAC units. Such organic growth is consistent with moisture exposure.

{¶ 10} Additionally, at the first-floor level, water saturated the OSB sheathing, framing, and batt insulation. At higher levels, a moisture meter showed high levels of water within the OSB sheathing.

{¶ 11} After the repair and restoration of the exterior wall outside of the 28 bank, Claris hired Professional Service Industries, Inc. ("PSI") to assess the entire building envelope. Initially, PSI visually examined the condition of the hotel exterior and conducted water tests of certain windows. PSI then opened the exterior walls at 11 locations around the hotel to view the condition of the wall components and determine the extent of the water damage. As Konrad Surlej, the PSI project manager, later explained, PSI observed a number of deficiencies, which he defined as "something not performing as intended or perhaps not installed per industry standard or what we would have expected to see, as well as perhaps some components missing." (Tr. at 696-97.) PSI also found evidence of water damage at 10 of the 11 openings.

{¶ 12} On April 25, 2014, Claris sued HDS for breach of the construction contract. HDS filed a third-party complaint seeking indemnification from its subcontractors, including Five Star Plastering; Inloes Mechanical, Inc.; JHP Construction, Inc.; and Michael J. Baumann and Co., Inc. ("Baumann"). 2 After securing leave of court, Westfield intervened and sought a declaratory judgment stating that it was not obligated to provide coverage to HDS

under its commercial general liability policy for any of Claris' damages.

{¶ 13} Trial on Claris' claim for breach of contract occurred between August 16 and 26, 2016. For purposes of this appeal, we will recount the expert testimony introduced at trial regarding and relating to the cause of the water damage to the exterior walls.

{¶ 14} Surlej, Claris' expert witness, testified to the multiple deficiencies PSI identified in the wall assembly. First, Surlej stated that sheet-metal flashing "would usually be called for and installed at any penetration through the wall," but the Polaris Candlewood Suites did not have any such flashing. 3 (Tr. at 702.) Surlej also indicated that he would expect to see sheet-metal flashing at the horizontal expansion joints in the EIFS and at the base of the exterior walls. However, there was no sheet-metal flashing in those areas.

{¶ 15} Sheet-metal flashing has an L-shape, with a lip protruding from the end of the horizontal leg of the L. When installed, the vertical leg of the L is covered by the water-resistive barrier, and the horizontal leg extends through the wall assembly to the outside. Water flowing down the water-resistive barrier strikes the horizontal leg of the L, which directs the water out of the wall assembly through a small gap above the horizontal leg. The water then drips off the protruding lip and falls away from the building. Surlej explained that sheet-metal flashing acts as a "control mechanism" that directs water away from a building, preventing that water from "follow[ing] the path of least resistan[ce], which could be toward the interior." (Tr. at 719.)

{¶ 16} Second, Surlej categorized the sealants as in poor condition, meaning they had failed or could not be relied upon to perform their original function. In most locations, the sealant was pulling away from substrate it was intended to adhere to and/or was failing to hold together, causing tears within the sealant material.

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2018 Ohio 2602, 104 N.E.3d 1076, Counsel Stack Legal Research, https://law.counselstack.com/opinion/claris-ltd-v-hotel-dev-servs-llc-ohioctapp-2018.