Friday, November 12, 2010

Arbitration starts in Hanks home dispute

Actor seeking $1.5 million in damages from architect

Express Staff Writer

Actor Tom Hanks and his wife, Rita Wilson, are seeking $3 million in damages from the architect and construction contractor of their home north of Ketchum. Photo by Getty Images

An arbitration hearing starts today in Ketchum in a home construction dispute that pits actor and producer Tom Hanks against a nationally renowned architectural firm.

Hanks and his wife, Rita Wilson, are seeking $1.5 million in damages from Lake Flato Architects, alleging that the San Antonio, Texas-based company breached its contract and defectively designed the couple's $10 million home north of Ketchum.

In a second case filed with the American Arbitration Association, Hanks and Wilson are also seeking $1.5 million in damages from Storey Construction, alleging that the Ketchum company built the home with "construction defects," the most serious being a roof that leaked and partially collapsed a few years after the home was finished in 2002.

Hanks and Wilson had the home repaired in 2008 after they claim it was damaged during the winter of 2005-06. Arbitration claims were filed against both Lake Flato and Storey Construction in 2007.

An arbitration hearing has not yet been scheduled in the case against Storey Construction. However, the case has been argued extensively in Blaine County 5th District Court and at the Idaho Supreme Court. The high court ruled in 2009 that the case could proceed to arbitration, something that Storey Construction was attempting to prevent.

The Lake Flato hearing is being held at the Clarion Inn. It is scheduled to last eight days, running through the weekend and ending on Friday, Nov. 19.

The case is being heard by Joseph P. McMahon Jr., an attorney and professional arbitrator and mediator from Denver.

The hearing is closed to the public. The Idaho Mountain Express was unable to confirm whether Hanks or Wilson is attending.


Arbitration is a quasi-judicial method of resolving disputes outside of the courts. It is often specified in construction contracts that either party can file for arbitration if a dispute arises.

Arbitrators and arbitration rulings lack the legal authority of judges and courts, but judges and courts can uphold arbitration rulings and get involved in the proceedings if need be.

Such was the case Monday in Blaine County 5th District Court when Judge Robert J. Elgee made it clear that he will uphold the authority of the arbitrator to issue subpoenas for witnesses or for depositions.

The issue before Elgee was a request by Ketchum attorney Ed Simon, one of several attorneys for Hanks and Wilson, that he order a former construction manager for Storey Construction, David Lister, to appear at a deposition and to testify at the Lake Flato arbitration hearing. Simon alleged that Lister had ignored previous subpoenas sent by the arbitrator.

"He has information and knowledge about what went on during construction," Simon told the court. "He's a critical witness in both cases. We're seeking truthful information in this arbitration, and this court and the arbitration deserve nothing less."

Storey Construction attorney Miles Stanislaw and Lake Flato attorney Robert Mills participated in the hearing via telephone hookup. Both offered legal arguments as to why Lister shouldn't be required to give a deposition or testify, but Elgee sided with Simon.

"The court has inherent power to compel witnesses to be present," Elgee said. "[If] they issue a subpoena in these proceedings, then I'm going to enforce it. That's all there is to it. If he fails to appear, then he's going to have the court to deal with on a contempt matter."

Stanislaw told the Express on Wednesday that he opposed Lister's providing information in the Lake Flato arbitration because it gives Hanks and Wilson an unfair advantage in the case against Storey Construction.

Terry Smith:

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