In rulings issued in January and July 2001, after a trial on the merits in Fairfield Development, Inc. v. Georgetown Woods Senior Apartments L.P., No. 49D02-9404-CP-390, the Marion County, Indiana Superior Court entered a judgment in excess of $1 million in favor of Novack and Macey's client. The court held that Fairfield Development, Inc. ("Fairfield") had breached its construction contract with our client, the Georgetown Woods Senior Apartments Limited Partnership ("Georgetown"), by failing to pay subcontractors and constructing a 90-unit Indianapolis senior apartment project with numerous defects. The rulings represent complete vindication for Georgetown in the litigation, which had been initiated by Fairfield against Georgetown for alleged non-payment of certain construction fees.

At the time of construction, Fairfield was a partner in Georgetown. Fairfield had argued that the partnership could not recover damages because it failed to provide written notice of various construction defects. But in a ruling of apparent first impression in the Indiana courts, the court rejected this argument. The court held that a partner who takes on the additional role of contractor in the construction of a building for the partnership must disclose to the partnership any defects in the partner's own construction work.

In another ruling of apparent first impression in the Indiana courts, the court held that a contractor cannot avoid liability for damages for defective construction work by invoking a standard one-year warranty in the construction contract. According to the court, the standard one-year warranty provision in a construction contract was not an exclusive remedy that precluded the owner from bringing damage claims for defective construction. Instead, the one-year warranty merely provided an additional remedy that would require the contractor to repair the defects if it received timely notice.

Finally, the court pierced Fairfield's corporate veil and imposed personal liability on members of the family that owned the company. The ruling concludes that, "the Fairfield corporate form was so ignored, controlled and manipulated by [the family] that it was merely an instrumentality of the . . . family and it would be unjust not to pierce the corporate veil." Partners Donald A. Tarkington and Stephen J. Siegel tried the case for Georgetown.