Lowe's suing developer of W.Va. shopping center for faulty work

By Jessica M. Karmasek | May 1, 2012

CLARKSBURG - Home improvement chain Lowe's is suing a Missouri company in a West Virginia federal court for its faulty site development work at the retailer's Clarksburg location.

Lowe's Home Centers Inc. filed its 10-page complaint in the U.S. District Court for the Northern District of West Virginia Thursday.

Lowe's alleges that defendants THF Clarksburg Development Two LLC and Michael H. Staenberg breached their obligations to perform the site development work "properly" and by leasing to Lowe's land that is "unfit for its intended purpose."

"As a result of THF's improper site preparation, the land underlying Lowe's retail store is unstable and is causing structural damage to the Lowe's store," Charleston attorney John H. Tinney Jr. wrote for Lowe's.

THF is the owner and developer of a large commercial real estate development in Clarksburg, also known as the Newpointe Plaza shopping center.

Lowe's, which is based in Mooresville, N.C., entered into a ground lease with THF in January 2002, in which the company leased to Lowe's a portion of the land within the plaza.

About the same time, Lowe's and THF entered into a site development agreement, or SDA, in which THF agreed to perform certain site development work on the tract. Lowe's, in turn, agreed to pay THF $4,087,154 for the work.

The SDA required that the site improvement work on the tract include the stabilization of subgrades and compaction of soils, and that THF must prepare and compact the surface and the subsurface of the building pad areas and other areas.

According to the SDA, if any reports or tests indicated that any portion of the site development work was not done as required, THF would be responsible for "curing the failure" without cost to Lowe's.

Staenberg, who works for THF, executed and delivered to Lowe's a guaranty of completion, which essentially promised that the developer would comply with its obligations in accordance with the SDA.

In April 2002, THF's engineering firm, CTL Engineering of West Virginia, issued a geotechnical engineering certification to Lowe's. It stated that the building pad on the tract had been "acceptably prepared" to support the construction of the Clarksburg store.

It wasn't until after construction of the store was completed that Lowe's discovered that it was experiencing structural damage as a result of what it calls "abnormal settlement."

Lowe's notified THF of the problem in April 2004, less than two years after the store opened. It also notified THF that it had contacted a monitoring firm to determine whether movement of the foundation was continuing.

The abnormal settlement involves differential vertical settlement and lateral spreading caused by a combination of shale embankment vertical settlement and deep-seated slope movement in the embankment, the retailer claims.

"This abnormal movement, in turn, was caused by THF's faulty design and construction of a shale fill embankment underlying Lowe's store," Tinney wrote for Lowe's. "THF, however, has refused to cure the defect."

Tinney argues that the tract continues to exhibit "marked signs" of settlement, including differential vertical settlement and deep slope movement. Remediation of the tract, he contends, is needed to prevent even more severe damage to the store.

As a result of the situation, Lowe's claims it has been forced to incur more than $925,000 in engineering costs to evaluate and monitor the site conditions and more than $210,000 in costs to repair damage to its store, plus a substantial amount in legal fees.

The retailer is seeking at least $4 million to "remediate the defects" in the tract; at least $925,000 for engineering costs to monitor the site; at least $210,000 in repairs; an award of all attorney's fees and costs that it has occurred and will incur; and an unspecified award to fund the "future monitoring" of the settling.

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