Thursday, June 5, 2014

Pain of Glass

As I used to write quite a bit about building materials and green build, I haven't forgotten the roots of what is my sustainability tree, I am returning to the subject as it is also about the issues I am very engaged in of late - legal ones.

Pella,a window manufacturer who is still American made and owned and has tried very hard during the worst recession for the home building industry to keep those employed but by 2012 were one of the top window/door companies with over $1 billion in sales. But they have also found themselves in the same predicaments as many other companies, litigants in a class action lawsuit. And this is not new to the industry as we have found that in the paint industry with regards to lead in paint, a still ongoing issue. For Pella, he issues were about numerous defects to windows that contributed to leaking and in turn damaging the home window frame. But the complaints have included overzealous sales tactics and poor service across the country. These can be found here.

This is from Consumer Affairs site.

In 2012, I purchased 13 Impervia double hung windows, installed by Pella. This cost me $10,000 on a house that was only 3 years old, another story. I loved the windows until 4 of them started leaking. I've contacted service twice before to service these windows and they reluctantly came out and told me this was my issue because of the J-channel on the house. The windows also leak air at the seal where the single latch is. The point is, I replaced cheap windows with expensive Pella windows and never had a leak on the old windows. The inside trim of the 4 windows in question is ruined and now must be replaced, which is added cost and a headache for me. With each rain in this rainy spring, the window trim just gets wetter.

I am currently attempting to get a return call from service for the last 2 weeks. I've contact the main office in Iowa and they assure me service in my area will call me within 24-48 hours. No call and I've talked to the main office twice in the last 2 weeks. I will make a 3rd call today. I give every vendor a chance to provide their service correctly. It's been 2 years and now the warranty has just expired. Pella has proven they are not worth the investment. I would never recommend Pella Windows or Doors to anyone, nor would I recommend using their installers. They blame their inability to install Pella windows correctly on you the customer! If a Class Action suit comes of this, I am on board!

Note the last sentence. Well there was. And it was actually thrown out of court but not in the way you think. We have a system that has been tossing many class actions of late and often kicked to the curb for many reasons or mostly settled out of court with the millions you see touted on the varying Attorney's websites actually going to the Attorney's - the ones not wronged or damaged.

It is why I follow Overlawyered. And I disagree that on many counts we are over doing it on class action cases, hello GM! It is a reason we have Court to supposedly expose the wrong doing and ensure some type of resolution that has long reaching effects. What it has become is deep pockets for everyone but those who have been wronged. It is why I still regardless of my missteps legally I refuse to ever work with an Attorney again. I simply will not. They are utterly unkind and unhelpful. And if you read the assholes blog that I do now and then it is of course my fault, the client is always in the wrong. Always. Thank you, ironically from a man with green in his name.

Lawyers like to ask questions, they like to be adversaries to even their clients apparently. I have experienced that first hand. I just now don't bother even trying to communicate to the ones I do have on hire. That is pretty adversarial I think.

As for Judges well they are all over the bench as they say. And then now and then they surprise you. Yes for beating down a PD but also for realizing that Attorney's are not always working in the best interest of clients! Shocking, I know! I also loved the salacious gossip in this case about the Attorney and his sexual misconduct. Hey one of ours just raped Asian massage therapists, predatorily and his wife a City Attorney, hid evidence. Just another day in Family Court. Harvard says I am snarky. That one was for you Harvard. They don't teach it there I bet.

The Pella Case was thrown out and the article below from Forbes explains why.

Pella Class-Action Settlement Is So Bad Court Tosses Lawyer -- And His Father-In-Law Lead Plaintiff

Daniel Fisher
Forbes Staff

The Seventh Circuit Court of Appeals has rejected, in scathing terms, a class-action settlement over Pella windows that was engineered by a lawyer who inserted his father-in-law as a named plaintiff and negotiated a $2 million advance on his fee before his other clients even knew the case had been settled.

It didn’t help matters that attorney Paul Weiss was in danger of losing his law license over allegations of sexual misconduct as he was wrapping things up with Pella, giving him extra impetus to work out a deal that paid him a fee before he was no longer able to avail himself of the privilege. Or that the agreement he worked out would pay him and his co-counsel $11 million while class members stood to gain, at an absolute maximum, $17 million.

“In sum, almost every danger sign in a class action settlement that our court and other courts have warned district judges to be on the lookout for was present in this case,” said Judge Richard Posner in the decision of a three-judge panel chucking out the deal. “The district court approved a class action settlement that is inequitable— even scandalous.”

Posner’s decision is unsparing toward U.S. District Judge James Zagel for approving the settlement even before notice had been sent out to class members. How could Zagel have known whether the $11 million fee award was fair and reasonable, Posner asked, before he had any idea how much money Pella would actually pay Weiss’s clients? Weiss argued the settlement was worth $90 million but Posner said the combination of complex forms, provisions for arbitration of larger claims and coupons and extended warranties for many class members meant the deal was worth a maximum of $17 million and probably far less.

“We don’t understand the judge’s valuing the settlement at $90 million or thinking the feeble efforts of class counsel led by Weiss to obtain benefits for the class (as distinct from benefits for themselves in the form of generous attorneys’ fees) worth $11 million. The restrictions that Pella was allowed to place on the settlement would, if upheld, enormously reduce the class members’ recovery of their losses, and the residue is to be returned to Pella. Class counsel sold out the class.

Judge Zagel certainly deserves criticism for approving the settlement — as do all judges who rubber-stamp deals cut between lawyers hungry for a fee and companies hungry for the absolution from future litigation only a class-action lawyer can deliver. But Weiss hardly covered himself in glory, either.

First of all, he set up his father-in-law, dentist Leonard Saltzman, as lead plaintiff and negotiated a $10,000 payoff if Saltzman approved the deal.

“The impropriety of allowing Saltzman to serve as class representative as long as his son-in-law was lead class counsel was palpable,” Posner wrote. (Author’s note: Please read Saltzman’s response below.)

Then when four other named plaintiffs objected to the settlement, Weiss booted them out of the case and replaced them with four more pliant class representatives. He had an incentive to work out a deal fast, Posner went on, because of the legal troubles hanging over him. A panel of the Illinois Attorney Disciplinary Commission was investigating him for alleged sexual harassment of five female employees (it recommended a 30-month suspension in April), and both Weiss and his attorney wife were battling a lawsuit by their old firm Freed & Weiss accusing them of misappropriating firm assets.

“Only a tiny number of class members would have known about the family relationship between the lead class representative and the lead class counsel—a relationship that created a grave conflict of interest; for the larger the fee award to class counsel, the better off Saltzman’s daughter and son- in-law would be financially—and (which sharpened the con- flict of interest) by a lot. They may well have had an acute need for an infusion of money, in light not only of Weiss’s ethical embroilment, which cannot help his practice, but also of the litigation against him by his former law partners and his need for money to finance his new firm.

All of these factors put pressure on Weiss to negotiate a deal that fixed his problems, not necessarily those of his clients.

“It was very much in his personal interest, as opposed to the interest of the class members, to get the settlement signed and approved before the disciplinary proceeding culminated in a sanction that might abrogate his right to share in the attorneys’ fee award in this case. He could negotiate a quick settlement only by giving ground to Pella, which upon discovering the box that Weiss was in would have stiffened its terms (it plays hardball, as its conduct throughout this litigation has demonstrated).

One sign of how badly Weiss apparently wanted his money is he spent some of his bargaining capital negotiating a $2 million fee advance from Pella, to be received before his clients even received notice of the settlement. Posner called this “another suspicious feature of the settlement”; perhaps a legal ethicist would have stronger terms for such an arrangement.

In short, this case demonstrates all of the reasons why the class action needs to be reformed or eliminated from the civil procedure books. Were it not for objectors (represented in this case by attorney Ted Frank, though not through his non-profit Center for Class Action Fairness), there would be no one to point out the obvious conflicts of interest that riddle such cases.

Plaintiff lawyers represent a class of clients who frequently don’t even know the lawsuit, or their supposed attorney, exist. That attorney is supposedly monitored by representative plaintiffs who frequently have close and undisclosed ties to the plaintiff lawyers. Defendant companies just want an end to the litigation and know they can get it by negotiating a fee. And judges like Zabel can’t be bothered to do their jobs in closely examining settlement terms, either because they believe they are presiding over an adversarial process, as Posner charitably put it, or because they want these cases off their docket.

In this case, Posner delivered the ultimate penalty: He ordered the case back to the trial court, minus Weiss and his father-in-law. They’re out the money, and perhaps Pella customers will get a better deal with different lawyers in charge. I’m not holding my breath.

So it bears to mind a company with the history, legacy and more importantly an American brand such as Pella finding itself the target of an expensive and now even more landmark making lawsuit, what does that mean for the consumer in an age when more and more American made businesses are being consolidated or folding under cost pressure.

Well you can do your homework. And yes I say that repeatedly but if your builder won't you wonder why he/she isn't. They are putting their name and their reputation out there as well so it needs to be done if not one from the other.

In December of 2013, Sears Home Improvements closed their doors, leaving hundreds of customers with unfinished jobs. Customers were surprised since this was a company that touted the 100% satisfaction guarantee! Ecowest Renovations, founded in 2007, leave a trail of jobs not completed as promised to the tune of $2.1 million.

Dallas-based Atrium Companies Inc., which owns Atrium Windows and Doors, filed for Chapter 11 January 21st, 2010 in the U.S. Bankruptcy Court. Meaning that for many warranties and other issues will go unresolved. And there are many many more companies with like minded business strategies and issues. Some simply were bought by other companies who may elect to not follow up on original purchase agreements.

Another example is Serious Windows. In February 2012, the company found itself in trouble with the Federal Trade Commission (FTC), which ruled that Serious and four other companies had engaged in deceptive practices and unsupported claims in marketing their windows. Serious announced that it sold its fiberglass window manufacturing business in Colorado to the former Alpen company (whom they were ironically bought by Serious) who said they will uphold warranties of the product. Hey you bought it, you broke it, you made it, you fix it. Isn't that how the expression goes? Something like that....

And in the case of Sears and Ecowest, they were dealers, not manufacturers, installing a product or service out of a storefront operation with no equipment or tangible assets to speak of. When selecting a product try to find a company who is the whole package – manufacturer, installer, and service provider.

What makes up a company that is guaranteed to be around?

1) Length of time in business: Look for a company that has already been around for a long time. A company with a proven track record for staying in business, say 20 years, has a better chance of being around in another 20 years.

2) Facilities: Choose a company that is not merely a storefront operation, but has tangible assets such as buildings, land, manufacturing equipment, and vehicle inventory. Check out the location to see who it is that you are doing business with; does the operation look poorly maintained? Do not rely on a fancy ad or website you happened to fall upon to be the only method of finding what you would consider to be a good company.

3) Reviews: Read consumer reviews. There are several online sites that host unbiased reviews, such as Homestars. These are sites where customers can go and rate a company on a scale of 1-10, then write about their personal experience. Look for a company that has both a high rating and a large number of reviews. My favorite site for product referrals as they do their homework is Green Building Advisor. Utter green buiding nerds who do know their stuff.

4) Financial strength of company: Consider the financial structure of the company. How do they guarantee they’ll be around in another 20 years? Companies with a rock solid foundation and a vested interest from their employees are a best bet. An employee-ownership structure ensures that if something were to happen to the owner, financially or otherwise, the company would remain standing strong as each employee has a vested interest in the company to ensure its future success.

Pella could have avoided this by addressing the customer first. Yes we all know crackpots and annoying people but when you are in business you have to expect that all kinds of people will come through the door. Maybe Mr. Green can pick and choose his clients but many cannot. So expect to have to deal with them regardless or shut your door.

Given the immense amount of complaints what does it take? A recall like GM had to finally admit to doing after lives were lost. Is that what it comes to now? Or can you simple look at a few cases, and what determines few is relative but it should not take that many, to realize that the customer may be right.

But the bottom line is that when you are working for someone else who is paying you.. you are working for THEM. And they need to be heard. Yes customers are such a pain but hey we are the real job creators.

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