Derek Greystone was a wealthy bowling alley tycoon with 10-pin alleys and associated billiard halls located throughout the Maritimes. To reflect his importance in the community, he hired Ontario-based Architect, Kiara Marboli to create a Great Gatsby-style residence overlooking Westbourne Harbour. Marboli’s portfolio of bespoke residences on the eastern seaboard displayed that mix of elegance and down-east hominess that Greystone was looking for. As the centrepiece of the Greystone mansion, he imagined a two-storey living area, dominated by a spectacular stone fireplace.
The spectacle created by the monumental fireplace was not at all what Greystone had envisioned, and it forced him and his family to spend more than a year “slumming it” in a luxury hotel. We call this story “WHINING AT THE RITZ.”
The demolition of the existing structure on the site, and the erection of the new house proceeded entirely without the Architect’s active participation, just as planned. The Architect Marboli and her Client Greystone had mutually agreed that her onsite presence would only be required if problems arose. This seemed to make the most sense, since Greystone had previous building experience—he had personally overseen the construction of all his bowling alleys—and Marboli would have to fly in from Toronto, which would only complicate her already overloaded schedule. Fortunately, no problems arose, but the Architect did manage to stop by once or twice to advise on aesthetic matters.
The project was shaping up to be everything that Greystone had hoped for. He and his wife moved in even before final completion, just to get a feel for the place, and to enjoy the warmth of the huge fireplace.
Their warm enjoyment was short-lived. On a chilly November night, the wood-frame country mansion went up in flames. The local volunteer firefighters did what they could to gather their forces and make their way up the hill, but by the time they had arrived, all they could do was hose down the ashes and put out the small satellite fires that ringed the smoldering ruins. There was nothing left standing —except the impressive stone fireplace.
The house had been insured, and the homeowner’s insurance had paid out, but the Greystones were also claiming another two million dollars was needed to compensate them fully. Statements of Claim were served on Kiara Marboli Architect, Frank Feldspar Masonry Contractor, the Regional Municipality of Westbourne, and Rubblestone Construction Ltd., the General Contractor.
On receipt of this claim, the Pro-Demnity team started an investigation. What had caused the fire? How much liability did the Architect have—if any? And what was the basis for the two million dollar claim to begin with?
The fire marshal had determined that the fire originated on the ground floor, adjacent to the fireplace, and had rapidly spread to the basement. The sudden and aggressive nature of the fire had at first suggested arson, and initial press coverage had latched onto this idea with great enthusiasm. However, there was no real evidence to support this theory, and Pro-Demnity’s investigation had uncovered a few explanations that were more plausible.
One possible cause was fairly obvious. The fireplace had no spark screen and yet a roaring fire had been left unattended, so sparks may have spit out. Or, another potential cause was that a log may have rolled onto the wood floor and ignited the carpets and furniture.
However, an examination of the construction drawings and pre-fire photographs of the interior revealed another, even more probable, cause: The stone fireplace was completely unsupported. Between the hearth, and the basement floor, three metres below it, there was only empty space. The whole structure had been sitting on a concrete pad, poured onto a plank floor, which was perched on wooden joists. It wouldn’t take much for the heavy stonework to stress the joists, break through the floor and set fire to whatever it landed on—which meant that, contrary to the fire marshal’s report, the fire had started in the basement and then rapidly spread to the ground floor, then to the rest of the house.
It was unlikely that Marboli had omitted a proper concrete or masonry foundation for a heavy stone structure—that’s architecture 101—so clearly, significant, unfortunate changes had been made to the interior.
Referring back to the Architect’s drawings, we found clear indication of a substantial masonry pier, intended to connect the fireplace to the footings. However, this masonry support had been part of the house that had previously existed on the site. And rather than preserving it, as the drawings clearly showed, the demolition contractors had removed it, along with everything else—a serious slip that had not been noticed by the Architect, who wasn’t required to be onsite, or Greystone himself, who hadn’t paid much attention to the demolition work. “Just knock it down and cart it away”, he said.
It really didn’t look like the Architect could be blamed for any of this, but here we were once again on depressingly familiar ground, with an Architect allegedly liable for something that was not included in the contractual scope of work.
The amount being claimed was outrageous. It seemed that, for more than a year, while the reconstruction was going on, the Greystone family had taken up residence in a luxury hotel and had dined extravagantly, as indicated by the mountain of receipts that they had carefully saved.
Then, there was the itemized list of personal possessions and clothing that had been lost in the fire. The number of Armani suits, Dior jackets, Prada shoes and diamond trinkets that were included in the claim would have embarrassed many Hollywood celebrities. The Greystones had certainly lived well. Obviously, Derek’s working-class business empire of bowling alleys and billiard parlours, with their simple fare of draft beer, hamburgers and mini-pizzas, had provided substantial revenue.
An attempt to reach an agreement was unsuccessful. We, and the other defendants, dismissed out-of-hand the exorbitant uninsured liabilities and accounts now being presented by the plaintiff. But the question of sharing liability among the defendants was unresolved, each party believing that it was more blameless than the others. The matter dragged on for two years. Expenses were mounting and a trial date was looming. We suggested to try mediating a settlement.
The mediation was held in the boardroom of a large Halifax law firm, dominated, at one end, by a life-sized portrait of the founding father in a high wing collar and spats, and at the other end, by a large window with a picturesque view of the old town and harbour.
The mediator was a wry senior lawyer who, one imagines, had turned down offers of elevation to the judiciary. He was a partner emeritus of the firm in whose boardroom we were assembled.
After the usual preamble, the plaintiff’s counsel opened with a short statement of his position.
The Greystones had expected peaceful enjoyment of their new home. They had lit a particularly cheery fire on a wintery night and had ended up in the cold, watching their home reduced to ashes. They had endured the life of displaced persons in a hotel room for over a year, faced with the added burden of rebuilding their house and fighting for their rights.
Pro-Demnity, finding it hard to generate the expected degree of sympathy, countered that the Architect’s role in the construction had been limited at Greystone’s request. Marboli had not been contracted or paid to review the work and had never done so. This was at the owner’s insistence, since he had preferred to look after things himself. Under the circumstances, it was grossly unfair to blame the Architect for “failing to observe” the lack of fireplace support. This fact should have been obvious to those onsite during construction.
Unfortunately, Pro-Demnity and its counsel were well aware of case law in which an Architect had been found liable for not observing a chimney defect while visiting a friend’s residence under construction. This mattered to us, because during one of her unscheduled visits to comment on aesthetic concerns, Marboli had taken photographs, standing under the unsupported fireplace. A court would likely find that she ought to have observed the obvious deviation from her design.
Plaintiff’s counsel then presented a second argument. Mr. Greystone’s health and business interests had suffered. Despite the increasing popularity of bowling, his profit margins had flattened out due to his being distracted by the current nightmare. His prized possessions had all gone up in smoke and his quality of life was shattered.
Compensation demands had now been increased to include psychological suffering, business opportunity losses and various other damages. If the matter proceeded beyond mediation, three million dollars wouldn’t come close to the final award.
After Greystone’s counsel had completed his remarks, and we were in the midst of a short break, two figures strode into the mediation room. The first figure was well dressed and slight in stature. The second was a bulky figure, casually attired, and with a serious demeanour. The Claims Specialist, never having met Greystone, assumed that the first figure was Greystone himself, and the second was a bodyguard, such as those who accompany famous celebrities who feel the need to keep their fans at bay. It soon became obvious that the first figure was a second lawyer, and the “bodyguard” was in fact, Greystone.
When the mediation resumed, Greystone confined his contribution to staring, quite disconcertingly, at those who opposed, his interests, with an expression that was hard to determine, but did not appear to be benevolent. When he needed to instruct his counsel, he gestured with his hand, and they left the room together.
The Municipality’s lawyer was an experienced and affable character, obviously well known to the mediator. He had done his homework and, after conceding that “the local inspector should have observed the departure from the drawings,” concentrated on the schedule of damages presented by the plaintiff.
He had obtained opinions from local real estate agents as to the cost of renting a home for the period that the Owners were living in the hotel. Enormous savings would have resulted, even if they had shunned the modest offerings available in Westbourne and rented a large luxury condominium in Halifax.
It also turned out that not all the Owners’ furniture and contents had been totally consumed. Rare wines and liquors had survived, with charred labels, but not necessarily any loss in the value of the contents.
The Municipality’s lawyer pressed on, pointing out that the fire insurance covered the “present value” of contents, clothing and so on, and not the “replacement cost,” which was what the claim was based on. We found this a much stronger legal argument, and more in line with our way of thinking.
Another argument in our favour concerned the plaintiff’s “contributory negligence,” in leaving a blazing fire unattended for twenty minutes—a fact that Greystone had admitted to the fire marshal on the night of the fire. Apparently, he had been alone at the time and was tinkering with his Mercedes in the driveway when the fire started. He had the presence of mind to drive the car away from the blaze as soon as he noticed the pillar of fire.
One final item further reinforced the argument of contributory negligence. The rapid spread of the fire—a fact that had incidentally, raised original suspicions of arson—had been caused by the careless storage of flammable materials.
According to Greystone’s testimony, Mrs. Greystone had undertaken the interior finishing without the Architect’s involvement, using direct labour. For this work, large amounts of construction materials, many of which were highly flammable, such as oil-based paints, varnish and turpentine, had been stored in the basement . . . immediately below the fireplace. When the blazing fire weakened the floor joists, the fireplace had crashed down into the basement and ignited the stored accelerants: ignition was virtually instantaneous.
Counsel representing Bern Rubblestone, the General Contractor, spoke next. Taking a confrontational approach to Greystone, he resurrected the already discredited theories of arson and other unpleasantries but failed to produce any new or revealing arguments. As the fire marshal had already apologized for publicizing his arson theories and had withdrawn them completely, there seemed little point in inflaming passions. After all, the purpose of a mediation is to reach a settlement.
The Masonry Contractor Feldspar was represented by a relatively young counsel who also had little to offer, since her client was uninsured, had no written contract with Greystone, and had made no changes to the fireplace design. Feldspar was unable to remember any occasion when the Architect had visited the site during construction and had wondered at times why the usual inspections were not being made. Having been a masonry contractor for 30 years, he claimed that he had questioned Rubblestone about the uncertain support of the fireplace, and had been told to just do as instructed.
When all arguments had been completed, the defendants’ representatives including Pro-Demnity met together and, after each had stated their reasons for contributing virtually nothing, due to the innocence of their clients, reality finally crept in.
When all was said and done, we believed that any court would award a reasonable sum—probably close to the actual reconstruction costs claimed. The additional uninsured amount was another matter. Something would certainly be awarded, but the amount was open to speculation.
Shuttle diplomacy by the mediator was surprisingly quick to resolve the issue, and the matter settled, fairly.
In his notes, the Claims Specialist observed that Greystone was single-minded in the pursuit of his objectives and had documented every conceivable expense. He even had receipts for shoe polish. But above all, he taught us a lesson in how to squeeze the maximum amount out of a claim, and the importance of keeping records. In addition, there are two other practical lessons to be learned.
Lesson No. 1: If your client is not prepared to pay for a full review service, avoid site visits and never offer on-the-spot advice. If you visit a site at all, do a thorough review and bill in accordance with your hourly fee rate, irrespective of any contractual obligations.
Lesson No. 2: Fireplaces and chimneys have caused countless claims that we have had to defend. In almost every case, inspection of the work at the appropriate time would have resulted in the discovery of a built defect, and remedies of the hazardous conditions could have been effected. In Pro-Demnity’s experience, courts are unlikely to forgive errors related to such obvious life safety matters as fireplaces in residences.
