Raymond Lyle Hanoski Plaintiff - v. -, 2011 SKPC 075

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Date: May 2, 2011 Citation: 2011 SKPC 075 File: #227 / 2010 Location: Saskatoon _____________________________________________________________________________ Between: Raymond Lyle Hanoski Plaintiff - and - Cornerstone Homes Ltd., Tyler Calow Defendants Nolan Dooley for the Plaintiff Tyler Calow appearing for both Defendants _____________________________________________________________________________ JUDGMENT S. P.

WHELAN, J _____________________________________________________________________________ Introduction [ 1 ] This action concerns a contract between the Plaintiff and the Defendant Cornerstone Homes Ltd. (Cornerstone) for the purchase of a new home that was under construction. The Defendant Tyler Calow is the President of the Defendant Corporation and he performed the work which is the subject of this action. The Plaintiff claimed that Cornerstone breached the contract by failing to properly install the hardwood flooring in the home.

Further the Plaintiff maintained that both Defendants were liable in tort for negligence, stating that both the Corporate Defendant, with whom it contracted, and Mr. Calow who personally installed the flooring, owed a duty of care and breached that duty by failing to properly install the flooring. [ 2 ] The Plaintiff claimed damages in the sum of $20,000.00 for replacement of the flooring in the kitchen, living room, dining room,

den, and hall. Liability and damages were disputed. The Defendants took the position that the Plaintiff was responsible for the damage to the flooring and that in any event the damaged boards need only be replaced. [ 3 ] These were the issues:

a) Are the Defendants liable to the Plaintiff for the tort of negligence?

b) Is the Corporate Defendant, Cornerstone Homes Ltd. liable in contract for poor workmanship?

c) If the Corporate Defendant is liable, should the Plaintiff receive damages for full replacement of the flooring ? I have made my findings having regard to the civil burden of proof, which is on a balance of probabilities. [ 4 ] Mr. Hanoski described the installation process. The day prior to the installation, the hardwood flooring was not yet in the home. On the day of the installation, he saw Mr. Calow take the wood from the packaging as he nailed it to the floor. The furnace and air- conditioning were not yet functioning and according to Mr. Hanoski that spring and summer were particularly humid.

Further, a good deal had yet to be done in the home, including: drywalling, mudding and painting in the basement, and on the main floor, painting and installation of the kitchen and bathroom cabinets and a pony wall between the kitchen and dining room. [ 5 ] Mr. Hanoski took possession in June of 2008. In the latter part of September 2008, he noticed cupping of boards (the ends of a board were raised slightly higher than the middle of the board) throughout the hardwood floor and he alerted Mr. Calow. He phoned first and then sent Mr. Calow an email on October 1, 2008. Mr.

Calow said that he would monitor it and did not accept responsibility for the problem. Eventually, Mr. Calow did submit the claim to Progressive Home Warranty Solutions. It was a condition of the contract that Cornerstone obtain a new home warranty. Mr. Hanoski began to make his own inquiries about proper installation procedures. [ 6 ] Mr. Hanoski presented three estimates for total floor replacement which were obtained in April and May of 2010: Braid Flooring - $18,529.40 + GST (Exhibit P-5), First Choice Flooring Ltd. - $21,168.85 (Exhibit P-6), and Dale Zakreski - $19,900.00 + GST (Exhibit P-7). [ 7 ] Mr.

Hanoski presented numerous pictures of the flooring, taken in April 2010. He placed bits of tape on each board that had cracked; at that time about 90 boards. By the time it was inspected by the Plaintiff’s witness, Mr. Dale Zakreski, the number had increased to about 130 boards. [ 8 ] The Defendants maintained that Mr. Hanoski caused the damage to the hardwood flooring because he did not follow the manufacturer’s instructions and in particular that he did not control the humidity in the home. Mr.

Calow also maintained that he was under pressure to complete the work to meet the Plaintiff’s possession date, specified in the contract to be June 15, 2008. [ 9 ] Mr. Dale Zakreski was qualified to give expert testimony regarding hardwood installation and inspection of failed hardwood floors. Mr. Zakreski examined the floors in the Hanoski home twice and produced a report, dated December 10, 2010, Exhibit P-9. He appended to his report the manufacturer’s instructions which called for acclimation prior to installation. [ 10 ] Mr.

Zakreski stressed the importance of following the manufacturer’s instructions, stating that different products have different requirements and that the industry standard is to follow the manufacturer’s instructions. At

Part 6 of his report he concluded: There are many factors involved with the failure of the floor. They are highlighted from the installation instructions as well as from the NWFA (National Wood Flooring Association) Installation Manual:

- Improper acclimation, the hardwood was delivered and installed the same day (attached #1 page 1, attached #4 pages 1-2). - No moisture readings or any data recorded prior to and during installation. - No moisture barrier was used as per manufacturer instructions (attached #1 page 4, attached #5) If the subfloor was high in moisture it will go up into the hardwood causing cupping (attached #3). - Hardwood was installed over a non-approved subfloor, it requires a minimum 19mm OSB. The actual subfloor is 17.5 mm (attached 1 page 4, photo #8).

The thinner OSB can cause deflection between the joists causing boards to loosen and squeak. - Improper and inconsistent nailing pattern (attached 1 page 2). The manufacturer requires at least 2 fasteners per piece approx 8 inches apart (photo #3). - Heating and ventilation was not operational during acclimation and installation (attached 1 page 1). Proper acclimated and installed hardwood should not cup after installation due to relative humidity as we do encounter RHM levels over 75% over the summer months. Refinishing the hardwood is not an option as this will not correct the cracks in the boards.

The only solution is to replace the hardwood which is installed under the cabinets and under a pony wall between the kitchen-dining, making removal more difficult. At

Part 7, he stated that the problem was caused because the manufacturer’s instructions were not followed. The attachments are identified as follows: 1 – Trillium Hardwood Floor Installation Guide, 2 – 5 - National Wood Flooring Association Manual excerpts, Photos 1 – 8. [ 11 ] Mr. Zakreski testified to the importance of allowing the wood to acclimate to normal living conditions in a house before installation. This means that the wood flooring should not be installed until after work which impacts on the moisture levels in the house, has been completed.

I f after the wood is installed, there is painting or the basement floor is poured, the wood will absorb the moisture from these improvements and when the home returns to normal living conditions, the wood will shrink. Consistent with the manufacturer’s instructions attached to his report, he stated that it is important that the heating and air-conditioning systems be operational before the wood flooring is installed because this represents normal living conditions. [ 12 ] Mr.

Zakreski was asked to further explain the manufacturer’s instructions, in particular the first bullet under the heading of “Owner Installer Responsibility”, which provides: It is the sole responsibility of the purchaser/owner/installer/contractor to, prior to installation, verify and confirm that the wood has acclimated to the local environment and has reached a “moisture content %” (MC) which is suitable and will ascertain that the wood will be stable after installation and not subject to potential shrinkage or expansion. To test the MC of the wood, the use of a “wood humidity meter” is required.

They are available from most equipment rental, hardware stores and hardwood dealers. Note that in some regions/climates (dry land or humid) the period of acclimatization may take longer than 2 weeks. If in doubt additional time is recommended. When installing wider-width boards: 3 ¼” (83 mm) or wider, additional acclimatization time is recommended. MC testing should be made on several boards from several boxes so to give a representative result. Your local TRILLIUM supplier can advise you of the correct MC range suitable for your homes/region.

He stressed the importance of acclimation in new home construction as there is a lot of humidity associated with the construction. [ 13 ] Mr. Zakreski described his practice when determining the moisture content of flooring. He checks the moisture reading on the subfloor as well as the hardwood. He was asked about the manufacturer’s instructions under the heading, General Pre-Installation Recommendations which provided: Subflooring must be sound and dry. Test moisture using a digital moisture meter. Moisture should not exceed 14%. . . .

It was explained that the moisture in a subfloor rises and is absorbed by the hardwood. Mr. Zakreski stressed that it was essential that there be no more than a 4% difference in the moisture readings of the subfloor and the hardwood. He testified that it is standard practice to acclimate the wood and take three moisture readings, before installation of: the subfloor, hardwood and relative humidity. This is especially important in new home construction. He based his opinion on the advice that Mr. Calow did not take these three readings before installation. [ 14 ] Mr.

Zakreski was asked to discuss the nailing pattern and placement of the boards. He found only two nails or staples in the boards. He advised using six to eight nails, one to three inches from the end of the board. With respect to placement, he stated that the ends of adjacent boards should be 6 inches apart. Referring to the photos attached to his report, he testified that the boards were not positioned in keeping with this practice. In photo 7 a ruler had been positioned in the centre, demonstrating that the ends of a number of the boards are positioned far less than six inches apart.

[ 15 ] With respect to the issue of repair or replacement, Mr. Zakreski testified that it’s feasible to replace a few boards but that replacing numerous boards affects the structural integrity of the floor, because the damaged board is cut out and the replacement board is glued in. Glued boards don’t move with expansion and contraction of the floor and this will result in more splitting and cracking. He found a great number of damaged boards throughout the floor and recommended replacement of the entire floor. He observed cracked and cupping in the boards.

He expressed the opinion that the cupping and cracking are evidence of a failure to properly acclimate the flooring. The cupping is created by a lot of moisture. If the boards cup and the finish is not flexible, it will crack when the board lays back down. What begins as a hairline crack in the finish can result in the board cracking. [ 16 ] Mr. Zakreski was asked about the importance of the homeowner maintaining an optimal humidity level after installation.

Reference was made to the manufacturer’s instructions found under General Pre-Installation Recommendations, bullet 7: “Optimal relative humidity should be maintained between 35% and 55% for a minimum of 12 days prior to, during and on a year round basis after installation.” He testified that should the relative humidity vary slightly outside those ranges, the floor may expand and cupping may appear but this typically returns to normal when the humidity drops to the state that it was in at the time of installation. He added that wood typically expands in summer and shrinks in winter.

When he examined this flooring, he found the humidity readings to be acceptable and within range. He testified that once a floor has been installed without proper acclimation, there’s nothing that the homeowner can do to stop or affect the damage occurring. [ 17 ] Mr. Zakreski was of the view that the flooring failed because the moisture content in the subfloor was higher than the hardwood and when it evaporated up and through the hardwood, cupping and cracking developed. He attributed the failure to improper installation, specifically a failure to follow the manufacturer’s instructions. [ 18 ] Mr.

Zakreski elaborated upon the quote (Exhibit P-7) that he provided with respect to replacement of the flooring. It is more work to install a floor around existing kitchen cabinets and walls. The quote was based on 1,025 square feet of flooring and comparable hardwood as the product originally installed is no longer available. [ 19 ] Mr. Robert Keep was qualified as a hardwood inspector. He provided a report, dated April 25, 2009, with respect to his examination of that spring. It would seem that he was disadvantaged by limited information and that the damage may have continued to develop after his examination.

He found the humidity of the home to be very dry and expressed the view that this could cause cracking and splitting. He was of the view that environmental and installation issues caused the problem. He found splitting and squeaking throughout the floor. He recommended replacing the damaged boards and installing a humidity control system. He qualified that by saying that this was accepted practice except where the damage is so severe that ripping up the whole floor is required having regard to the issue of structural integrity. [ 20 ] On cross-examination Mr.

Keep was most emphatic as to the importance of following the manufacturer’s instructions. He agreed that he had identified a number of things about the installation that had not been done in accord with those instructions. He testified that he was not informed that the flooring had not been acclimated, nor that the installer had failed to take any moisture readings. He agreed that if that was the case that it could be a huge problem down the road. Acclimation was in his view, critical.

He agreed that cupping can cause cracking in the wood and he stated that while cupping can subside over time to a certain extent, if it is severe enough, the chances of it returning to the original state are “slim to none”. He agreed as well that it was important that the difference between the moisture content of the hardwood and the subfloor be around 4%. He found the floor to measure approximately 1,026 square feet. [ 21 ] On re-examination Mr. Keep was questioned about when the problem with the floor started to become evident and if that pointed to a failure by Mr.

Hanoski to control the humidity levels in the home and to his being responsible for the damage to the floors. Mr. Keep did not support this suggestion, citing a number of variables, in response. [ 22 ] Mr. Calow advised that during the wet phase of construction of the home, he installed a 50 pint dehumidifier and that it ran until after Mr. Hanoski took possession. [ 23 ] Mr. Calow testified to his observations about the humidity levels in the home after possession was assumed by Mr. Hanoski.

He also testified that in March 2009, he observed that only 20 boards were damaged but acknowledged that the examination was not complete. At a subsequent meeting between Mr. Calow and Mr. Hanoski, Mr. Hanoski had marked over 100 boards that he claimed were damaged. [ 24 ] Mr. Calow felt that as Mr. Hanoski had insisted upon a new home warranty, that his remedy should be limited to that warranty.

This was important to his position that he had attempted to resolve the problems and with his view that his liability should be limited toreplacement of the damaged boards only. There was insufficient notice and information regarding the issue of this warranty and so it wasnot addressed. [25] It was the new home warranty program that gave Mr. Calow the name of Mr. Keep whom he contacted with a view to resolvingthe dispute. He maintained that Mr. Hanoski had agreed to split Mr. Keep’s costs and the Plaintiff agreed with this. The invoice, ExhibitD-10 is for the total sum of $500.00. Mr.

Hanoski’s share of that is $250.00. [26] Mr. Calow suggested that the amount of flooring required if replacement was appropriate, should be determined by the return offlooring evidenced in an invoice filed as Exhibit D-5. He also sought to rely upon an estimate prepared by his original supplier of thehardwood (Exhibit D-6) and presented a salesperson from that supplier. The quote was for 855 square feet. Her ability to express anopinion about the cost of doing the work was limited by her skills and ultimately she indicated that she would have to rely upon theadvice of an installer. [27] Mr.

Calow also testified to the pressure that he was under with respect to the possession date and completing the construction byJune 15, 2008. He had a number of other shareholders that pressured him to accept a possession date, against his wishes. Mr. Calow wasthe President and an employee when he carried out the work on Mr. Hanoski’s home and he acted within the scope of his duties as anemployee. Reasoning [28] I accepted the evidence of Mr. Hanoski and I accepted the opinion evidence of Mr. Zakreski without hesitation. Mr. Zakreskiwas well qualified and balanced in his approach. Mr.

Keep stated that his report was limited by the information that was available to himat the time and he was unaware of the failure of Mr. Calow to properly acclimatize the flooring or to take moisture readings. The twoexpert witnesses were in accord generally with respect to proper practices concerning the installation of hardwood flooring. Where therewas conflict between the evidence of the Plaintiff and that of the Defendants, I accepted the evidence of the Plaintiff. My findings havebeen made on a balance of probabilities.

a) Are the Defendants liable to the Plaintiff in the tort of negligence? [29] The Plaintiff has argued that the Defendant should be held liable in negligence. I was referred to: London Drugs v. Kueline &Nagel International Ltd., (SCC), [1992] S.C.J. No. 84, Winnipeg Condominium Corporation No. 36 v. BirdConstruction Co., (SCC), [1995] S.C.J. No. 2, Edgeworth Construction Ltd. v. N.D. Lea & Associates Ltd., (SCC), [1993] S.C.J. No. 101, Roy v. Thiessen, [2005] S.J. No. 195, 2005 SKCA 45, and Buena Vista Kennels

(1979) Inc. v.Hartley, [2008] S.J. No. 19, 2008 SKQB 15. [30] I reviewed, Canadian Tort Law, Allen M. Linden, Bruce Feldthusen, LexisNexis Canada Inc. 2006, and the discussion inChapter 12, Negligent Infliction of Pure Economic Loss, at C. Defective Products and Structures, pages 471 to 477 and notedspecifically the following excerpts: “Pure economic loss” has a specific meaning in the product liability context. The term refers to any damage to the product itself exceptdamage caused by an external calamitous accident.

Accordingly, a claim for damage to a house that stands on faulty foundations withcracks in the walls and ceilings is a claim for pure economic loss. There is no category of economic loss claim where there exists greater diversity between and among the various common lawjurisdictions as to whether economic loss may be recovered in negligence. The rule in Canada is that one may recover economic lossrelated to correcting dangerous defects in the product or structure. The question of recovery for non-dangerous defects was left open bythe Supreme Court. . . . . . .

The Canadian decisions following Winnipeg Condominium dealing with non-dangerous defects seem to fall into three categories.Some refuse to strike a claim for non-dangerous defects on a preliminary motion, and hold that this is a viable issue to be determined attrial. Others seem to misinterpret Winnipeg Condominium, and allow recovery. Finally, there are those where recovery has been deniedeither because the loss has been allocated by a contract between the parties or because the loss is held to be unrecoverable for otherreasons.

The recent trend is simply towards disallowing recovery for non-dangerous defects as a matter of law. If the Canadian courtsever did decide to extend negligence law to purely non-dangerous defects, it is most likely they would do so for defective residentialhousing as has happened in Australia and New Zealand.

[ 31 ] In Roy v. Thiessen , supra , the Saskatchewan Court of Appeal followed Winnipeg Condominium in finding recovery in tort was appropriate where the negligent construction of the house constituted a real and substantial danger to the plaintiffs and other occupants of the house. The evidence in this case did not disclose a real and substantial danger and accordingly, I declined to make a finding of liability in tort against either of the Defendants.

b) Is the Corporate Defendant, Cornerstone Homes Ltd., liable in contract for poor workmanship? [ 32 ] I had no hesitation in concluding that the Defendant, Cornerstone, breached the contract by failing to install the flooring in a workmanlike manner. More specifically, it was not installed in keeping with industry standards. The Corporate Defendant, Cornerstone, alone is responsible to the Plaintiff for breach of contract.

c) If the Corporate Defendant is held liable, should the Plaintiff receive damages for full replacement of the flooring? [ 33 ] I am satisfied further that the Plaintiff has proven on a balance of probabilities that it is necessary to replace all of the flooring. I have accepted the evidence of Mr. Zakreski regarding his estimate of the cost of replacement and the Plaintiff shall have judgment in that amount. [ 34 ] Accordingly, the Plaintiff shall have judgment against Cornerstone in the sum of $19,900.00, less the sum of $250.00, which represents the Plaintiff’s contribution for the cost of Mr. Keep’s report.

He shall then receive interest on the remaining sum of $19,650.00 pursuant to The Pre-judgment Interest Act , from June 30, 2010 to the date of judgment, providing that the combined judgment and interest does not exceed the sum of $20,000.00, which is the maximum jurisdiction of this Court. The Plaintiff shall further have costs against Cornerstone which I set at $125.00, representing the cost of issuing the Summons and $25.00 towards the cost of service. ____________________________________ S. P. Whelan, J