Jury rules against Philadelphia developer Streamline for water-damaged homes

A jury ruled against Philadelphia developer Streamline Solutions on Friday, finding that four new homes on Crease Street in Fishtown were defective and allowed water penetration to cause extensive damage.

The jury awarded the four households almost $3.2 million, finding that Streamline was negligent in its professional duties. Streamline’s codefendant, Philadelphia-based architecture firm Harman Deutsch Corp., was not found liable and did not have to pay.

As the jury read out the decision, the homeowners who filed the case — David Butera, Matthew Selbovitz, Nicholas Auger, and Daniel and Clarisa Kirk — become visibly emotional, crying quietly and hugging one another. They declined an interview request after the jury’s decision, citing a pending consumer protection aspect of the case that the judge has yet to rule on.

“Justice was served,” Jennifer Horn, founder of Horn Williamson, the law firm representing the homeowners, said in a statement. “The ... verdict, including punitive damages, reflected the harm suffered by these first-time home buyers.”

Streamline is a Philadelphia developer and contractor that formerly built single-family townhouses but has shifted its focus to multifamily rental buildings in recent years. The company argued that it had fulfilled its obligations and that the law firm representing the homeowners exaggerated issues that could have been resolved amicably.

“Horn Williamson’s tactics are that they don’t look for a resolution; they look to make a mountain out of a molehill,” Michael Stillwell, cofounder and CEO of Streamline, said in an interview before the jury rendered its decision. “Then they promise their clients the world and try to sue for really big numbers.”

In response, Horn said the jury verdict speaks for itself.

Steamline faces other similar lawsuits over alleged defects, but this case was unique in that the four homeowners did not have arbitration clauses in their home purchase contracts and could take their claims to a jury.

Horn Williamson has obtained judgments of $1.5 million from Streamline and related entities for other homeowners and has another $900,000 in arbitration awards pending confirmation before the court.

The case the jury decided on Friday centered on claims that Streamline knew “that they were engaging in defective, substandard, and unlawful construction practices” and breached warranties that guaranteed the homes had been built in compliance with the building code.

The plaintiffs bought their homes in 2015 in what their complaints describe as the “up-and-coming” Fishtown neighborhood. They wanted to purchase newly constructed homes, believing they would require little maintenance and would be a sound investment.

But those expectations were dashed, the complaint claims, when they discovered leaks, mold, and water damage in their homes, which had been purchased for between $515,000 and $590,000.

“The home … exhibits construction defects that allow water to infiltrate the home; the exterior envelope is wet, deteriorating and rotting,” one complaint reads.

Ultimately the plaintiffs had to sink almost $200,000 in repairs per building, the complaint states. They said that the damage could not be repaired without stripping the defective exterior materials and recladding the building themselves.

Streamline argued that the company had fulfilled its warranties with the buyers and that it had made repairs it was legally responsible for. Stillwell said two of the homeowners never made a warranty claim.

“Horn Williamson is trying to make out like we actually didn’t fix some of the warranty stuff, and we just tried to Band-Aid it,” Stillwell said. “That’s not the case. Nobody in their right mind goes back and doesn’t try to fix something.”

The buyers disagreed. Each sued Streamline in excess of $190,000, plus the diminution in market value of the house, and additional relief the court deemed proper. The jury decided to grant the homeowners punitive damages alone worth the price of the houses, then compensatory damages for the cost to fix the homes plus other damages.

Stillwell said he had not decided whether to appeal.

Streamline is not the only developer facing such charges. The Philadelphia Inquirer’s 2018 series “Rotting From Within” detailed the extent of these claims and cases in the region.

A couple dozen Philadelphia-area developers, including the nationally prominent Toll Brothers, have also been accused of negligent construction practices that allow water intrusion. Homeowners say they have incurred huge losses as they try to repair and reclad their homes at their own expense.

In 2020, WHYY’s PlanPhilly identified 45 home buyers who had found water penetration problems with homes purchased from Streamline. The company has also faced controversy and a lawsuit over its attempted rehabilitation of the historic Edward Corner building that resulted in extensive damage to the building. The Licenses and Inspections commissioner at the time, Dave Perri, called it “the worst case [of poor construction] I’ve ever seen.”

Despite such setbacks, Streamline became a major presence in Philadelphia, growing from their townhome-oriented beginnings into a successful multifamily developer.

Stillwell feels the company has been misrepresented in the media, blamed for homeowner neglect and targeted by Horn Williamson.

“I’m not a bad person. I’ve come to work every single day, grew a company from scratch that I’m now basically walking away from because guys like to put articles out there that are so far from the truth it’s not funny,” he said.

After the trial, Stillwell clarified that Streamline is not closing because of the lawsuits. He cited the difficult market conditions of recent years with rapidly rising interest rates and high construction material costs. The company’s final project, at 1102 N. Second St., is wrapping up in two weeks.

“We’ll see what happens with this trial, but I don’t have anything to give personally,” Stillwell said before the jury’s decision Friday. “I live in a house that’s a worth a few hundred thousand less than what they bought. So I don’t know what they think they’re getting from me.”