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Slab o' Trouble

We at David Weekley Homes are not just selling shelter; we are selling the dream of home ownership ... a sense of security and stability ... a stress-free retreat from the world ... a place to raise a family ... rest and relaxation ... a place to create warm memories ... comfort."

-- "Commitment to Excellence III,"
a booklet for David Weekley employees

Claudia Murillo still gets that rapt, tilt-of-the-head look when she recalls the day she, her husband Carlos and her two children moved into their newly constructed David Weekley home. "We were so happy," Murillo says. "Everything was so good."

Not that all had gone smoothly. At the April 1989 closing, the title company informed the Murillos that a 16-foot utility easement -- which the Weekley salesman had neglected to mention -- bisected the spot in the back yard where they had intended to build a swimming pool. Nonetheless, the Murillos signed the closing papers.

After all, when you've lived in a trailer park most of your life, as Claudia had, and you've struggled for years to build a business and scrape together the $10,000 down payment, and you're ready to make the move of a lifetime, disappointment over the lack of a swimming pool isn't reason enough to postpone your dream another six months or more.

So the following week, the family occupied the $97,000, four-bedroom house at 3651 Laurel Hollow Drive, on the bulb end of a quiet cul-de-sac in the growing Cypresswood subdivision of suburban Spring. It was a little more than they could afford, but the neighborhood was good for the kids. And besides, it carried the name of Houston-based David Weekley, one of the nation's biggest homebuilders. "That's why I wanted to buy it," Claudia says. "I had heard his reputation was real good, and he stood behind his work."

As is common with new homes, detail work still needed to be done. When Weekley failed to take care of the unfinished items after more than a month of requests to do so, however, Carlos posted a sign in the front yard that said, "Come Talk to Me Before You Buy a David Weekley Home." That day, says Claudia, a crew arrived and tackled the checklist.

But mere protests couldn't solve their next problem. Carlos Murillo owned and operated a security company, so he couldn't figure out why the state-of-the-art alarm system he'd installed kept going off. About once a week, Claudia recalls, he'd have to leave a job site downtown and race home, where he'd determine that no burglar had intruded and reset the alarm.

One afternoon, about six months after they had bought the house, Carlos was doing some yard work and noticed a jagged gap in the mortar where the exterior brick wall had split. Closer examination revealed what appeared to be a crack in the slab. Shortly thereafter, cracks appeared in the living room Sheetrock and ceiling. He called Weekley Homes, which inspected the premises. Just a few surface cracks, the Murillos were told, the result of the normal settling process that occurs with many slab foundations in Texas. There was nothing to be concerned about.

Indeed, cracked and shifting foundations are the bane of many homeowners in the Houston area, with its expanding and contracting gumbo soil. But the seriousness of the problem at the Murillos' house -- and only six months after its construction -- seemed oddly suspicious to Carlos. So he hired his own inspector, who delivered an altogether different opinion: the foundation was splitting apart, in effect twisting the whole structure like a pretzel. When the kitchen wallpaper was peeled back, the Sheetrock looked like a spider web. "I came home and saw all the cracks," says Claudia, "and I started crying."

And Carlos finally figured out what was causing his alarm to sound. One afternoon, while his niece was working in the room they used as the security company office, one of the windows suddenly groaned and bowed outward like a giant bubble, then cracked.

Okay, said David Weekley Homes. We'll take care of it.

We call it "custom quality," and you can feel and see this higher level of craftsmanship

in every David Weekley home. Look at the
finishes and details on mantels and cabinets. The evenness of things. The way windows

and moldings fit. The roof. It will
tell you a lot about a builder's dedication.
-- From a Weekley Homes brochure

For the next three years, the Murillos endured a constant stream of repairmen in and out of their residence. A foundation repair company jacked up the house and put in piers to stabilize the slab -- three times. Crews of Sheetrock hangers and painters regularly paid visits to repair the repairs of the repairs, often leaving the house trashed at the end of the day. "You'd come home every day, and there was something they messed up," says Claudia.

 

Workers also helped themselves to the phone without asking, racking up long-distance bills to Mexico, though Claudia says they paid them off. And the leering looks at her teenage daughter and other troubling behavior made the Murillos feel uneasy when away from home, and uneasy while there.

Especially infuriating were reports from two neighbors who asked a Weekley employee why repair trucks were always parked in front of the house. The employee told them Carlos had botched his alarm installation. "They had the nerve ...," recalls Claudia, unable to finish the sentence.

After constant reassurance that the latest corrections had finally remedied the problems, the Murillos took a new tack. Fed up with the incessant disruptions and what they considered ill treatment by the subcontractors and Weekley employees, they sued David Weekley Homes in December 1992. After numerous delays and postponements, the latest on June 5, the case currently is on hold.

For most people, buying a home has an import beyond any other single purchase. Consequently, expectations are extremely, sometimes unreasonably, high. And when everything isn't just perfect, homebuyers often take it personally, and conflicts erupt.

But when a pattern of complaints emerges, the odds that hyper-finicky owners are at fault decreases significantly. In Cypresswood, the Murillos are but one of 13 families who have sued David Weekley Homes over foundation problems. They all charge that not only did their homes not live up to Weekley's guarantees, but that Weekley knew in advance that problems would occur and did nothing to prevent them. And according to court documents, Weekley has bought back five other Cypresswood homes -- including one next door to the Murillos -- and addressed customer complaints at six more.

On the advice of his attorney, company president and CEO David Weekley would not comment directly on the charges. But records indicate that Weekley has denied having advance knowledge of the problems and claims to have done everything possible to satisfy his clients, including stabilizing the homes to the point where experts say the foundations are no longer experiencing any shifting. In addition, Weekley says, he has tried to work with the plaintiffs, but to no avail. "We made generous settlement offers that included buying their home back and [an additional sum for] appreciation, that they chose not to take," he says.

Claudia Murillo disagrees that the offers were at all generous. As she recaps the history, her mood darkens. She points to flaws she says will make it nearly impossible to sell the place -- out-of-plumb doors that swing shut by themselves, what appears to be a new crack under the bathroom wallpaper, the original slab crack under a corner of the living room rug, a severely fissured driveway, discolored mortar repairs.

But what bothers Murillo most is reflected in the sparse, cool emptiness of the interior that somehow overrides the pink and light blue pastels dominating the decor. A couple of years after they bought the home, Carlos developed a liver disease that gradually incapacitated him. Unable to work, he lost his business. Faced with mounting medical bills and other expenses (including, ironically, payment on the house note) that Claudia's salary with Houston Light and Power couldn't cover, the family sank into debt. Though on the transplant list, Carlos never found a donor, and he died this March.

Claudia believes that the stresses of fighting David Weekley and their financial hardship hastened Carlos' demise, and she's resolved to take the suit to a jury rather than settle for anything less than substantial damages. In 1993, the Murillos asked for a package totaling $473,000 that included a buyback, moving expenses, punitive damages and attorney's fees, and the price has not gone down since her husband's death. "That's the one last thing I want to do for Carlos," she says. "I want to win."

Our commitment to excellence goes beyond just the people on our payroll. It extends to our

subcontractors, suppliers and the Realtors we work with. We look at everyone involved

as part of the same team, and we'll do whatever it takes to help them succeed. Because

their success, quite literally, is our success.
-- From the video "Quality: The Weekley Way"

Kevin and Jeri Townsend weren't exactly inspired with confidence when the third different framing crew arrived to work on their David Weekley home. After the fourth and fifth had come and gone, Kevin asked the Weekley "master builder" in charge of his home at the time (they went through three during the course of construction in 1989) why the turnover. "[He] just claimed they were running off," Townsend says.

 

But when he asked one of the crew members, he got a different response: Weekley paid less than other builders, so if another job was available, they'd bolt. "Weekley could not keep a framing crew," he says.

The Townsends' frustration wasn't limited to personnel changes. Before a drop of cement had been poured, they'd had to accept a major change in their house plans to protect the stately trees that had attracted them to the lot in the first place. During construction, Kevin noticed such deviations from the plans as walls erected in the wrong places, a bathroom ceiling four feet lower than intended and inadequate framing in the attic. When he pointed the problems out, the crews would fix them, but the seeming lack of quality control or supervision baffled him.

And one afternoon Kevin arrived at the site and noticed something odd: the dining room walls had been built, but no door had been added. The room was completely sealed off.

Still, it was a David Weekley home, and David Weekley was one of the most reputable names in the business, with fast-growing operations in Denver, Dallas and Austin, as well as Houston. "According to the newspaper, this guy walks on water," Townsend says. "So we trust this guy, right?"

Like the Murillos, however, the Townsends' troubles with their house were just beginning. Within four months of moving in, trim had begun to pull away from the house frame, cracks had appeared in the slab, doors were sticking -- all the signs of serious foundation problems. And as it was for the Murillos, the initial diagnosis by the engineers Weekley dispatched to the scene, Kevin says, was "typical settlement problems."

After two years, however, the problems were considered atypical enough to require major excavations around the perimeter of the house and the installation of 14 concrete piers. Meanwhile, the Townsends had witnessed a battalion of painters, wallpaper hangers and others doing what they considered shoddy work to fix damage that would simply reappear a short time later. Following an epoxy job to fill cracks in their garage slab, one crew painted over the floor with an extremely slippery coating. A week before the first family vacation in three years, Jeri Townsend slipped on the surface and injured her knee, requiring arthroscopic surgery. "That stuff was slicker than owl shit," says Kevin. "We had to cancel our vacation."

Other Weekley buyers in Cypresswood recount similar horror stories. Bobby and Vicki Ferrell, who moved into their home in August 1990 and sued Weekley five years later, were appalled at the number of people who worked on the construction. "Every time I came out, there were different plumbers, roofers, flatwall people," says Bobby Ferrell. "They'd be here one day and gone the next."

Bobby Ferrell's observation of the supervision matches the Townsends'. "I had about four master builders," he says. One in particular, he recalls, had a most cursory method of inspecting the subcontractors' work: "He'd drive into the cul-de-sac, look at the house, turn around and drive off."

No surprise, then, that Bobby Ferrell was the one who noticed that the front door was out of plumb and that bricks had been improperly laid. "Most of the things that were wrong with this house," he says, "I caught."

Though neither Weekley's attorney nor Weekley himself would comment directly on the allegations of underpaid subcontractors or poor supervision, they both say that Weekley has invested heavily in quality control since the mid-1980s, and that steady improvement is clearly reflected in customer satisfaction surveys that show 92 percent or more as willing to recommend Weekley to others. "It makes no sense not to have every home stand up and be good," Weekley says. "I mean, we built our whole business on our reputation and word of mouth and all those things."

Consistent soil testing and sampling are conducted by a third party to insure foundations are engineered to neighborhood soil conditions.

-- From the brochure "David Weekley Homes"

Like most of the homebuyers who eventually sued Weekley, Kevin Townsend figured it was just plain bad luck that he'd bought a lemon. That is, he says, until an elderly man bicycled up to his house one day and told him exactly what his problem was.

The man was Robert Gorman, who lived in a Weekley home a few blocks away on Blue Lake Drive. Gorman and his wife Thomasine had been locked in a legal battle with Weekley over his own home and had taken to informing his neighbors -- at least those regularly besieged by repair crews -- that perhaps their troubles were all related.

 

The similarities between Gorman's experience and his own shocked Townsend. But what really widened his eyes was Gorman's contention that not just a few, but dozens of homes in Cypresswood had suffered foundation failure over the years, and that poor soil conditions were at least partly to blame. This was especially galling because before he closed on his house, Townsend had asked the Weekley salesman why piers were being installed under the model home nearby. One house toward the back of the subdivision had had a cracked foundation, he was told, so it was just a precaution.

Later it turned out that the model home's slab had also cracked, and that Weekley had subsequently sold it to Anthony and LuAnn Mason -- without telling them of the breach or the repairs.

Townsend asked for the name of Gorman's lawyer. Within a few months, he, the Murillos and their neighbors Ahmed and Farideh Ganji joined the suit. So did the Masons.

The case has evolved considerably after several years of depositions and document-gathering. For one thing, the Gormans and Masons accepted a settlement in October 1994. But at issue now is not only what caused the multiple hassles the homeowners had to brook, but whether Weekley knew they were likely to occur before he built the houses, yet fraudulently failed to address the issue in advance. Not only is the company guilty, the homebuyers charge, but Weekley bought the lots at a discount precisely because the soil needed considerable prep work before it would be fit to hold a foundation.

If and when the case goes to trial, the plaintiffs will be toting several weighty pieces of evidence to back their assertion that Weekley was well aware of the soil problem before he built their houses. The first is a February 5, 1987, report by the engineering firm Geotech. Though several previous soil studies had noted unstable conditions in the subdivision, the Geotech report was commissioned by the subdivision's developer, Friendswood, in response to foundation failures in a number of houses.

The top layers of soil, the report reads, "are loose, variable in strength and, therefore, will not be suitable for support of major structural loads ... in an area well-known for construction problems related to a surface layer of soil consisting of silty, fine sands." The report recommends compacting the soil to 95 percent, further noting that because the existing silt and sand would be difficult to compact, they should probably be removed and replaced with standard fill dirt.

The report was passed from Friendswood to David Weekley several days later with a letter that stated, "under certain conditions, the top layer of sands can become saturated with water and lose bearing capacity strength. This condition will require your foundation be designed accordingly."

According to the homeowners, the compaction never happened, even though the report was backed by additional reports and letters in succeeding months. "Geotech recommends that the surficial soils at the home sites be compacted to a minimum of 95 percent," emphasized Friendswood in an April 1, 1987, letter to Weekley.

Further backing the assertion that Weekley had prior knowledge of the problem are the statements of Dutch Raitz, who owned a foundation repair business and worked on a number of the Cypresswood slabs, and engineer Ronnie Lee Kelm, who did some consulting work for the firm that designed most of Weekley's foundations. In a deposition he gave for the homeowners' lawsuit, Raitz testified that Weekley had a meeting with Friendswood and Geotech about soil conditions in January 1987 -- prior to Weekley's commitment to purchase lots for home-building. "David was kind of edgy about taking over these lots because of the problems that [another builder] had had," Raitz said.

In his deposition, Kelm testified that in late 1986, he had examined property near several Weekley lots in the area, one of which had a freshly poured slab, for the engineering firm MFI and Associates. Within 15 feet of the slab, Kelm said, he actually felt the ground ripple, so he jumped up and down a bit to test it.

"What was hard ground on top actually became mush underneath, wet mud," he said. "I sunk into it close to my knees."

His recommendation, which he passed to Weekley at a February 1987 meeting also attended by Raitz, was to add piers to the foundation design and prepare the soil, as the previous soil reports had suggested, by clearing away the silts and compacting the fill.

Kelm, who earlier had sent Weekley a letter claiming that hundreds of Cypresswood foundations had cracked because of the soil conditions, said he later asked the builder what he'd thought of the letter. "I don't recall him getting too excited about it," Kelm said in his deposition.

 

As for the alleged discount Friendswood offered Weekley to cover the additional costs of soil preparation, the developer wrote the builder on July 10, 1987, about what it would take to deal with poor conditions on ten specific lots, one of which later became the site of the Ganji home. "We will be willing to pay up to $500 per lot to help with your efforts," the Friendswood letter stated. And a Weekley Homes' "Lot Status Report-Houston Division" dated December 31, 1987, includes the following comment in the Cypresswood entry: "Note: $750 discount on all lots."

In a 1994 deposition, Weekley denied that he had attended any meetings at which the topics described by Raitz and Kelm were discussed, and said that while others in the company may have heard of widespread soil and foundation problems, he himself was unaware until late in the game. And he denied that the lots were purchased at any sort of discount to offset extra prep work.

Regardless, Weekley plans to argue that the soil reports and the testimony of the plaintiffs' own expert witnesses disagree to some extent on the causes and solutions to the perceived problems, a truth akin to the notion that lawyers disagree on fine points of the law.

"There are clearly differences in terms of recommendations made by the various professionals," says Weekley attorney Chris Pappas, who adds that ultimately all Weekley did was follow that professional advice as best he could, implying that perhaps that advice proved faulty. "If there's anything that we could have done in Cypresswood to not have this happen," adds Weekley, "we would have done that."

But even if it appears on balance that his company should have compacted the soil to 95 percent and otherwise prepared the lots more thoroughly, Weekley has another argument he plans to mount: that the work was actually done. Pappas provided documents to the Press that reflect some investment in fill dirt and "lot preparation" on the sites of the plaintiffs' homes, though they don't specify where the dirt went or what the work consisted of.

On the other hand, Weekley's contention that the prep work was done seems to be contradicted by other pretrial testimony, including that of Weekley executive Mike Humphrey, who was a project manager in Cypresswood at the time the slabs were poured. Asked if Weekley had done any soil preparation work other than the basic work done by the developer, Humphrey replied, "None that I know of."

One more fact in favor of Weekley, he and his lawyer say: the problems are solved. "There isn't any objective evidence that the foundations are moving at this time," says Pappas, referring to the testimony of their expert engineers who have inspected and photographed the homes and concluded that the repairs have stopped the hemorrhaging. Even the plaintiffs' experts won't say that the problems are ongoing, Pappas says.

But while all acknowledge that the crumbling has slowed to a virtual standstill in the last couple of years, none of the experts will say the fix is permanent. And the defense's photographic evidence -- the shots of nice, tight joints in the Townsend attic, for example -- conflict with other recent photos showing boards still being pulled away from each other and bowing from stress.

If all else fails, Pappas has filed a motion to dismiss the case on technical grounds. And in but the latest of a series of delays, Weekley's co-defendant and longtime slab engineer, Structural Engineering Consultants Inc., declared bankruptcy the day before the case was to go to trial this month, postponing the case indefinitely.

For us, quality is not only craftsmanship and materials, it's also the way people are treated.

-- From the video "Quality: The Weekley Way"

The office of David Weekley Homes pays tribute to Weekley's success in the industry. Poster-size collage photos of the company's "Team Members" at work and play together line the walls, promoting that good-hands family feel. A pair of glass trophy cases display only a fraction of the many trade awards Weekley has won during its 22 years in the business, including those coveted National Builder of the Year prizes so prominent in Weekley's glossy promotional materials.

Those materials are a big part of the Weekley pitch: the reprints of glowing magazine profiles, the "Commitment to Excellence III" employee booklet, the "Quality: The Weekley Way" video, the David Weekley Homes Internet site. Above all else, they stress customer service and quality. "I will tell you that the whole theme of David Weekley Homes is that the entire focus of the company is on customer satisfaction, and everything that's done is done with that being the utmost priority," says David Weekley's brother Dick, who owns a portion of the business (See "Weekley for the Defense," page 18). "It's in front of employees in the company, it's in front of profitability, it's in front of everything."

 

The company does indeed devote a good deal of time and energy to the "quality" corporate culture popularized in the mid-1980s by Total Quality Management guru Edwards Deming. Employee manuals overflow with such concepts as "excellence charting," "Quality Walks" and "P.A.T.H. (Pro Active Truthfulness and Honesty)." David Weekley himself admits to being somewhat of a fanatic on the subject. "I went to every seminar in the country in the mid-'80s," he says.

Customer satisfaction is so important, according to the Weekley code, that the company religiously polls its homebuyers one, three and ten months after their purchases. Any who don't say they'll recommend David Weekley Homes to their friends and family get a personal visit from a top executive, possibly David Weekley himself, to find out how the company can improve.

So how to reconcile the customer-first ethos with the impressions of his Cypresswood homeowners, who have a decidedly different view? When Claudia Murillo's request to meet with Weekley was granted -- after her husband was denied several similar requests before he died -- she came unglued. "He just sat there, very calm, cool, collected," she says. "I broke down, started crying. I told him, 'You come along, and you got all this money, and you screw us.' I lost it."

"He's disrupted five years of our lives," says Kevin Townsend. "We have an eight-year-old daughter who despises David Weekley."

"The neighbors affectionately named this house the House from Hell," says Bobby Ferrell. "I'm really easygoing, or I'd probably have killed 'em all a long time ago and blown the place up."

Weekley's public posture also doesn't jibe with some reports from farther afield than Cypresswood. Bob and Sharon Schilling's dream home in the Greatwood subdivision in Fort Bend County turned into a slab-cracked nightmare "within a matter of months," according to Robert Ray, the attorney representing them in their lawsuit. Ray reels off a list of familiar complaints: fans that vent to nowhere and other poor workmanship; assurances that their mounting foundation problems were no big deal; years of delay, then a belated attempt to make good as the trial date approached. "These people are bad, bad news," Ray says of the company.

Weekley has also had its share of unsatisfied customers in the Dallas-Fort Worth region, where the company has gained prominence. A local homeowners advocacy group, the Homeowners Organization for Mediation and Education, says that Weekley tops the list of complaints on their telephone hotline. "I feel trapped in my own home," says one Weekley customer and hotline caller who is in the middle of lengthy litigation against the company. "It seems like it's never going to end."

Mark Voit's ordeal finally came to an end when Weekley settled on his Dallas home. Though terms of the agreement prevent Voit from talking about his case, he voices a simple opinion of the product. "I just wouldn't recommend buying one," he says.

And in Denver, where David Weekley Homes has established another significant beachhead, OSHA just fined the company $221,500 for six "willful" health and safety violations at one of Weekley's building sites -- the largest fine ever levied against a homebuilder in Colorado. What exacerbated the penalty, according to OSHA's John Healy, was Weekley's "plain indifference."

But to David Weekley, reconciliation of his company's image with the customers' complaints isn't an issue, because if he had actually engaged in deceptive business practices and treated customers like dirt his company would have quickly faced disaster. Instead, the business is thriving: Weekley sold more than 2,200 homes last year, totaling revenues of $428 million, and is one of only two builders nationwide selected by Disney for a planned community in Florida.

"There's some thought on the other side that there's either some grand conspiracy or that we were attempting to cut corners or something in that vein, and I just want to assure you that we haven't done that in 20 years," Weekley says. "We haven't been successful by doing that. It makes no good business sense."

To the Townsends and Ganjis and Claudia Murillo and others who have spent half a decade or more stuck in homes they don't want and can't sell, reconciliation isn't the point, either, which is one reason the cases continue to approach the trial stage. "Most people have homes," says Kevin Townsend. "[Ours] isn't a home, it's a house."

"I want another home," adds Claudia Murillo. "I will have another home.


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