Who’s Liable for Failed WOCD Hardware? Builders FirstSource Says Read Your Vendor Agreement

February 7th, 2024 by Drew Vass, Executive Editor

Door and window manufacturer Pella Corp. and dealer Builders FirstSource (BFS) appear to have a long-standing and successful relationship—so much so that under a Pella Pro Dealer website, the companies intertwine histories, suggesting they’re “two trusted names.” But legal proceedings between the two companies reveal a spat over who’s responsible for financial costs stemming from a case involving window opening control device (WOCD) hardware.

In a case filed in November 2023, BFS alleges that Pella Corp. is obligated to cover any legal expenses from a case involving the alleged failure of a WOCD. That obligation is defined in a vendor agreement established between the two companies, officials for BFS say. A series of legal filings have been made in the case, with the latest arriving this week. In court filings, Builders FirstSource suggests that Dallas County, Texas, is a proper venue for the case, because it was the county in which the company resided at the time of “accrual of the cause of action.”

The legal spat stems from a prior lawsuit in which a plaintiff alleged that a minor was injured when he fell from a bedroom window. The window involved in the incident was equipped with a WOCD, which was allegedly defective. According to court documents, Pella manufactured the WOCD and sold it to BFS under a vendor agreement that BFS officials say requires Pella to defend and indemnify BFS for claims arising from the WOCD hardware. “Moreover, Pella is required to provide BFS with primary commercial general liability and excess liability insurance coverage as an additional insured,” a complaint filed by BFS states. A third party, American Windows & Siding Inc. (AWS), allegedly installed the defective WOCD in August 2019. In May 2022, AWS filed a fourth-party complaint alleging it purchased the defective WOCD from BFS.

And so, the dispute over liability begins.

According to court documents, in March 2023, BFS sent a letter to Pella demanding common law and contractual indemnity, as well as insurance coverage as an additional insured under Pella’s liability policy. The company’s demands fall under the terms of the vendor agreement, BFS officials allege. According to the documents, Pella did not respond to the letter.

In June 2023, the underlying lawsuit involving WOCD hardware was resolved by a Final Release and Settlement of All Claims.

According to legal filings, on or about August 17, 2023, BFS tendered another letter to Pella, demanding the company indemnify BFS for the full amount of settlement and defense fees incurred in the lawsuit regarding WOCD hardware. The costs totaled $203,490.

According to exhibits filed by BFS, a vendor agreement between the companies states that Pella will maintain for the benefit of itself and BFS commercial general liability insurance, including a per occurrence and general aggregate limit of liability of not less than $1,000,000, protecting against bodily injury, property damage and personal injury claims. Officials say the agreement also calls for “contractual liability coverage for the indemnity obligation set forth in [the] agreement [and] excess liability; consisting of a per occurrence and general aggregate limit of liability of not less than $5,000,000.”

According to court documents, the vendor agreement requires Pella to add BFS as an additional insured on its general liability policy to the full extent of the actual limits of coverage. For this reason, BFS officials say Pella “assumed the legal obligation to defend, indemnify and hold harmless BFS with respect to the claims and causes of action which asserted in the underlying lawsuit.” Pella has breached the vendor agreement by failing and refusing to honor its contractual obligations, BFS officials allege.

BFS seeks to recover court costs, attorneys’ fees, and any reasonable damages incurred while seeking what officials say is the company’s “right to indemnification under Texas Civil Practice and Remedies Code Section 82.002.”

Look for additional details in [DWM]’s newsletter as the case unfolds.

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