Wednesday, December 26, 2007

Hollywood couple opens new dispute with Ketchum contractor

$2.5 million sought for defective construction, design in arbitration hearing

Express Staff Writer

Tom Hanks

Hollywood actor Tom Hanks and his wife, Rita Wilson, have opened a second dispute with the Ketchum-based contractor that built their house north of Ketchum.

On Nov. 12, Hanks and Wilson filed a request for arbitration with the American Arbitration Association, a nonprofit organization that administers mediation and arbitration proceedings. The filing claims $2.5 million in “defective construction and/or design” of the couple’s home and three surrounding guest cottages, and names Storey Construction Inc., the Ketchum contractor that built the home.

A prior arbitration proceeding between the two parties concluded in January 2004. In that arbitration proceeding, Hanks and Wilson claimed that Storey breached a construction contract by performing substandard work, while Storey Construction claimed that it was owed more than $1 million for work completed on the property.

The blow-by-blow chronology of the previous dispute spans two years, but the result was that Hanks and Wilson were awarded nothing, and Storey was awarded $1.85 million in unpaid contract balance, interest and legal fees.

In this latest round of the dispute, Storey Construction responded to Hanks’ and Wilson’s November arbitration request on Friday, Dec. 21, by filing a lawsuit in Idaho 5th District Court in Hailey. The lawsuit, which names Hanks and Wilson, is a complaint alleging abuse of process, and it seeks an order to stay arbitration. It also claims the couple’s demand for arbitration is a malicious act motivated by revenge.

Hanks’ and Wilson’s arbitration filing claims their home has faulty snow dams, roof failures, improper roof ventilation, water intrusion, improper ventilation of chimneys, underground water leakage, surface drainage issues, improper structural connections and sheer-wall failures.

The filing was made by Kelly Donegan, an attorney with the Los Angelses-based Peckar & Abramson law firm. Donegan referred questions to a New York City public relations firm representing the Hollywood couple. Leslee Dart, founder and CEO of 42West, said the new filing has nothing to do with the prior dispute between the two parties.

“This arbitration has absolutely no bearing whatsoever on any prior legal actions and is a totally separate issue,” she said, reading from a prepared statement. “For anyone to call this ‘revenge’ is inaccurate and scurrilous. Tom and Rita, like anyone in this position, are simply trying to recoup substantial expenditures caused by substandard workmanship.”

This issue has created a legal battle as well as a public relations duel. Storey has hired a Seattle public relations firm called Firmani & Associates Inc., and that firm issued a press release that coincided with the filing of Storey’s lawsuit on Friday.

Storey is represented by Seattle-based attorney Miles Stanislaw, who said his client was “shocked” to receive the November request for arbitration. Stanislaw said the Hanks and Wilson case was dismissed in January 2004 “with prejudice,” which means it cannot be re-tried. He said that, given the dismissal, he expects the arbitration request to be a non-starter this time.

“That’s why we’re asking to stay the arbitration, because there’s nothing to arbitrate,” Stanislaw said.
Storey’s 18-page filing chronicles the history of the dispute, dating back to 2000 when the couple signed contracts hiring Storey Construction to build the home.

During construction, the suit alleges, Wilson directed Storey Construction to “complete extra, additional work and changed work” during the 24-month project.

In July 2002, Storey finished construction, and Hanks and Wilson moved in shortly thereafter, but did not pay Storey for the balance of the work, Storey’s complaint states.
The complaint adds that after Storey placed a lien on the property in 2003, the construction company took Hanks and Wilson to mandatory arbitration, where Hanks and Wilson counter-claimed that the work was defective and demanded $80,000 in damages.

The complaint states that after weighing the evidence on Jan. 27, 2004, the arbitration panel’s decision stated, “Respondents’ (Hanks’, Wilson’s and Lily Reeves’) counterclaims are denied and are hereby dismissed with prejudice in their entirety. Respondents are awarded $0 on their counterclaims.”

Storey contends that Hanks’ and Wilson’s demand for arbitration is born out of the couple’s quest for “revenge for, among other reasons, Storey’s recovery of virtually 100 percent of (its) claim.”

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