Hurt? Injured? Need a Lawyer? Too Bad!
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Still, there were enough Democrats in high places that TLR didn’t get everything it wanted. Lieutenant Governor Bob Bullock, who presided over the Senate, forced TLR and other tort reform groups to sit down with the trial lawyers and negotiate a compromise, which they did, near the end of the 1995 session. Punitive damages were contained; instead of being calculated at four times actual damages, they were reduced to twice that amount, plus an amount equal to noneconomic damages (for pain and suffering), up to $750,000. (“Of course, the punitive damages are not what compensates somebody for their loss,” says Weekley. “It’s just pure money.”) The era of soaking the defendant with the deepest pockets came to an end; in the past, if a jury found that the defendant was more negligent than the plaintiff, that defendant could be held liable for the entire amount of a judgment. After 1995, a defendant was on the hook for only his share of the responsibility, a concept defined by TLR as “proportionate liability.” The effect of this was that if, say, an uninsured driver who rear-ended a poorly designed car was found to be 40 percent responsible for the resulting explosion, then the injured plaintiff would have to “eat” that 40 percent—the Legislature having chosen to protect the negligent automaker instead of the innocent victim. The rules covering where a case could be tried in Texas were tightened substantially; defendants could be sued only where negligence had occurred or where they were based. While plaintiff’s lawyers howled that victims would have a much harder time winning cases, it was hard to argue with reforms that probably corrected some of the worst abuses of the legal system.
Soon after the session, plaintiff’s attorney Mark Lanier found himself at a fund-raising lunch for a religious right organization, seated next to then—agriculture commissioner Rick Perry.
“What’s this next session gonna do to me?” Lanier asked.
“Hey, don’t worry,” Perry told him. “We’ve gone as far as we need to.”
That, of course, did not turn out to be accurate.
JUST BEFORE HE SIGNED the contract for his house, on New Year’s Day 2002, Brian Zaltsberg looked the KB Home salesman in the eye and gave him a stern warning. “Go ahead and lose the commission if there are going to be problems with the house,” he said. “Because your time will be better spent on someone else. If you screw me, I’m gonna come back on ya.”
The salesman for KB, one of the nation’s largest homebuilders, promised that the house would be just fine. So Brian and his fiancée, Stephanie, signed the contract and, thrilled, became first-time homeowners. They were just two young kids—27 and 23 years old, respectively—without much education or money to throw around. Brian, tall, wiry, and favoring gimme caps, was determined to finish college while he earned a living developing Web sites and repairing computers. Porcelain-skinned Stephanie had finished high school and was looking forward to life as a homemaker and a mom. Brian felt they had bought, for their hard-earned $140,000, a piece of the American dream. “Happy people,” Brian said of his envisioned future, when the three of us met at his favorite Mexican restaurant in Fort Worth. “Dream home and all that.” The 1,800-square-foot one-story brick house, in a sun-scorched suburb on the northwest side of the city, was far from lavish, but to the Zaltsbergs, it was paradise. “We were so damn excited,” Stephanie told me.
But the trouble started even before they moved in. Groundbreaking was delayed, and then construction was erratic. Brian would often find the site littered with trash and once pulled containers from fast-food restaurants from the half-finished walls. But those were small problems compared with the one that took place on moving day. The Zaltsbergs stored many of their belongings in the garage while they set up the house, and as night fell, so did a downpour. Brian stepped outside for a smoke and noticed that water was flowing from inside the garage out into the street. He ran inside and saw water cascading down the walls and pooling on the floor, soaking into everything they had stored there. The Zaltsbergs had paid an extra $2,000 for a drywalled garage; now the Sheetrock was damaged and everything within was ruined.
Every day after that seemed to bring new problems: KB repaired the roof flashing where the leak had occurred but refused to replace the Sheetrock; the attic door stuck, and some of the rafters in the attic had split. Brian could pry bricks out of their mortar on exterior walls, and shingles flipped up in the wind. He asked KB to schedule repairs so that workmen wouldn’t interrupt meetings with clients at his home, but they showed up unannounced. Eventually, Brian demanded a meeting with KB. He was stressed to the max; he wanted KB to buy the house back from him. “I don’t want to live there anymore,” he told them. KB refused. Then Brian threatened KB with the only weapon he had: He would exercise his First Amendment rights and put up a Web site he would call kbhomesucks.com. The representative laughed in his face and told him to go ahead.
Why, you may wonder, didn’t Brian sue KB? Because his contract prohibited him from doing so. It required him to seek binding arbitration instead of redress in the civil courts. In fact, only a handful of lawyers in Texas are now representing people who try to sue homebuilders, because the cases are so hard to win and so expensive to try before arbitration panels. “I always thought it was your constitutional right to sue people,” Brian said. “But we couldn’t sue KB.” Like victims of medical malpractice, homeowners have seen their access to the courthouse curtailed.
Had Brian’s confrontation with KB taken place a couple years later, he would have run into another obstacle: During the tort reform frenzy of 2003 that TLR helped stir up, the Legislature, after intense lobbying and millions of dollars in contributions from homebuilder Bob Perry, created the Texas Residential Construction Commission (TRCC). Disgruntled homeowners were not allowed to go directly to court; first, they had to go to the TRCC, an agency heavily influenced by homebuilders, for a determination of whether their case had merit, a finding that would then be admissible in court. (TLR did not endorse or lobby for this bill.)
Brian didn’t want to go to arbitration. He couldn’t afford an attorney. Instead, he decided to make good on his initial threat: In January 2003 he launched kbhomesucks.com. Almost immediately, he was swamped with e-mails from people claiming to have been harmed by the company. They posted their complaints too, and Brian added links for finding help. He appeared in a few local news stories, and pretty soon he was getting between 1,200 and 2,000 hits a day on his Web site. Then one night he checked his e-mail and found one from a lawyer, asking for the person in charge of the site. Attached was a copy of a $20 million lawsuit filed against someone else who had tried to take on KB. “I took that as a threat,” Brian told me. Still, Brian contacted the lawyer and requested a meeting with KB’s director of customer service. Brian had stopped paying on the house by then; KB had agreed to buy it back if he would disable his Web site. For a moment, peace appeared to be at hand. But then Brian asked for $4,000 in moving expenses and for reimbursement of his down payment. KB said it would not exchange any cash with him until the house sold. That was a deal breaker for Brian, so, as he put it, “the deal broke.”
Three months later, Brian started getting anonymous, threatening e-mails, including ones that suggested that his wife was being unfaithful, which added to the stress at home. (Stephanie had a miscarriage that spring.) Eventually, Brian started protesting publicly in front of KB’s Fort Worth offices and was harassed by the police. He had the persistent feeling he was being watched.
Finally, in September 2004, Brian sued KB in state court for harassment. The company countersued in October, hitting him with what many lawyers call a “slap suit,” a lawsuit filed by a big company against a much smaller firm or individual to try to scare the other party off. Among the claims against Brian was an accusation of cyber squatting, for misusing the KB name. Since that time, Brian has found himself in a lawsuit many might call frivolous, especially since it involves a company worth hundreds of millions and an accused party worth very little.
In late August of this year, Brian finally got to arbitration; to KB’s dismay, he was allowed to keep kbhomesucks.com up and running. In a much bigger case settled around the same time, KB Home was fined $2 million by the Federal Trade Commission and, more important, was prohibited from requiring mandatory arbitration in its homeowners’ contracts. The ruling came too late for Brian and Stephanie, who by then had let the bank take their house. “This is hell on earth, that’s what it is,” Stephanie said.
