One of the more cynical vetoes issued by Gov. Tim Pawlenty last week was of a bill that has not been prominently covered in the media. This was the veto of HF211, the home warranty "attorney fees" bill that a group of interested homeowners has been working on getting passed for several years now.

Minnesota has a home warranty statute that provides homeowners with the legal means of recovering the cost of repairing a home defect.

Currently, when the homeowner with a defective house decides to pursue this remedy in our court system, the typical result is that the builder's insurance company provides attorneys to defend the builder.

These attorneys often employ a strategy of making the litigation as costly to the homeowner as is legally possible. This strategy is employed even if the home defect is clearly the fault of the builder.

Homeowner can't recover attorney costs
Why is this? Because the home warranty statute only provides for recovering repair costs when the homeowner prevails. The homeowner cannot recover attorney costs incurred to pursue the claim. By making the litigation costs high for the homeowner, it becomes more likely that a settlement will occur below the cost of the repairs — at some point, the cost of continuing the litigation becomes larger than what might be gained, and the homeowner gives up and settles for less. On the other hand, the builder has insurance and so the litigation costs the builder only the cost of his/her insurance premium. And by the way, homeowner insurance covers nothing in such disputes. Homeowner losses come straight out of the homeowner's pocket.

HF211 would have fixed this problem by including the possibility of recovering attorney fees for a homeowner who prevails in a home warranty dispute. This bill would have shortened the resolution time needed for a home warranty dispute since the insurance company would no longer have any incentive for making the litigation expensive for the homeowner.  This bill would have saved everyone involved money.

After advocates spent years attempting to get this bill passed through the Legislature, this was finally accomplished earlier this month. It took Pawlenty only one day after the bill appeared in is Bill Log before it was vetoed. What makes this veto different for our governor is that the bill involved no new taxes or additional government spending.

In his veto message the governor offered this rationale for the veto:

"The availability of legal fees can prolong litigation, and it does little to address the underlying issue of home defects. Moreover, attorney fees are typically only available in limited circumstances, and Minnesota should be careful not to overreach in that regard. … I encourage the authors to work towards a solution that addresses the issue of home defects without driving up the costs and burdens on contractors."

Change would shorten litigation
The governor is simply out of touch with reality in his first point. The availability of legal fees here will have the effect of shortening home warranty litigation, as described earlier, not prolonging it.

The governor is also grossly out of touch regarding his second point. In an Information Brief prepared in November 2008 by the Research Department of the Minnesota House of Representatives entitled "Attorney Fee Awards in Minnesota Statutes," the brief presents a 40-page list of current Minnesota Statutes that provide for attorney fees. Here is where this brief (PDF) may be found online.

The governor's third point was that there was a need to protect the contractors from the additional "costs and burdens" of this bill. But, what about the costs and burdens that thousands of Minnesota homeowners are now incurring because of lengthy home warranty disputes? Who will stand up to protect the homeowners?

Who is the governor's constituency here? Home-builder lobbyists or Minnesota homeowners? The answer is obvious.

Ed Seifert is a homeowner from Shoreview.