BKSN receives $13,572,000 Arbitration Award Against D.R. Horton for Aurora HOA

Golden, Colorado, April 4, 2017.  BKSN received a final arbitration award of $13,572,000 against KDB Homes, Inc., d/b/a/ DR Horton – Continental Homes arising from D.R. Horton’s improper design, construction and transfer of the underdrain system for a large single-family home HOA.  This award is believed to be one of the largest residential construction defect arbitration awards in Colorado.

In 2014, a homeowner reported to the HOA that hundreds of gallons of water were coming up through her sump pit and flooding her basement.  While investigating the damage, the HOA learned for the first time that many of the homes in the ten-year-old community were connected to an underground drainage system.  This underdrain system was intended to collect groundwater from the foundations of the homes and carry the water under the streets and out of the community, but was failing due to improper design, construction and lack of maintenance. 

The underdrain system was supposed to be maintained regularly by the HOA through vertical cleanout access points.  During construction, however, D.R. Horton’s contractors buried the access points under the asphalt, without leaving any markings or a map of their exact locations.  After this discovery, the HOA attempted to access the cleanouts by digging into the streets, which proved frustrating and expensive because the locations of the cleanouts did not appear to follow any particular pattern or standard depth.  After spending in excess of $100,000 digging for cleanouts, the HOA abandoned its efforts.  By that time, it had located only 9 out of the 350 or more cleanouts that were believed to exist throughout the community.  In an effort to expose the system, the HOA turned to D.R. Horton for help.  D.R. Horton was not willing to pay to expose the cleanouts and could not identify the cleanout locations.  The HOA retained Benson, Kerrane, Storz & Nelson, PC and filed an arbitration claim against D.R. Horton to recover the funds necessary to repair the underdrain system. 

After several years of investigation and over $800,000 in litigation costs, the HOA presented its case to a private arbitrator.  The arbitration hearing involved the testimony of numerous engineers and scientists who provided expert testimony on areas such as hydrology, geohydrology, geochemistry and soil mechanics.  After a two-week hearing, the Arbitrator found in the HOA’s favor and ordered D.R. Horton to pay a final award in excess of $13.5 million. 

“We are pleased that the Association finally achieved a reasonable resolution after years of hard work and anxiety as it navigated the legal process.  Fortunately, the HOA can now move forward with making repairs to ensure that its underdrain system will properly serve the 1200 homeowners who rely on the system for drainage,” said Duncan Griffiths, one of the attorneys for the HOA.  “After what this HOA has been through, it is a relief to see that D.R. Horton will be held accountable.”