2 companies sued following balcony repairs at W Austin Hotel and Residences [Austin American-Statesman]

June 14--A two-year battle over who's responsible for millions of dollars worth of repairs to glass balconies at a high-profile downtown Austin high-rise has spawned a lawsuit.

Old Republic General Insurance Corp., the insurer for general contractor Austin Building Co., contends in the lawsuit that "defectively manufactured glass panels" from XYG Glass were to blame for the problems at the W Austin Hotel and Residences.

In documents filed in Travis County district court, Old Republic General Insurance Corp. says it paid $2 million -- the policy's limit -- to cover a portion of the cost of replacing about 1,000 glass panels on the 37-story, $300 million building, at 200 Lavaca St.

Stratus Properties, developer of the high-end hotel topped by luxury condos, reported it suffered about $9 million in damages, according to Old Republic General Insurance Corp.

According to the lawsuit, balcony glass manufactured by XYG Glass and stainless steel railings supplied by Steel Studio, U.S.A. were replaced buildingwide after eight panels shattered "without obvious explanation" on June 10, 2011; June 27, 2011; and June 28, 2011, raining glass into the hotel's pool area and onto surrounding streets.

XYG Glass and Steel Studio, U.S.A. are named as defendants in the suit.

David Schubert, a Dallas attorney representing Old Republic General Insurance Corp., declined on Friday to discuss the case.

Austin Building Co., XYG Glass and Steel Studio, U.S.A. did not respond to messages from the American-Statesman seeking comment.

"On information and belief, the incidents were caused by defectively manufactured glass panels supplied by defendant XYG Glass ... which testing has shown to include nickel sulfite inclusions, thereby making them susceptible to sudden failure under certain conditions, and/or inadequate stainless steel railing systems used for ... the glass balconies supplied by defendant Steel Studio ... which did not meet the project's designed load criteria and thus was inadequate for its intended use," Old Republic General Insurance Corp. says in court documents.

"As a result of the incidents, the W Hotel had to be shut down for certain periods of time, guests and residents affected thereby relocated, and the balconies throughout the project had to be replaced. In addition, other portions of the project were damaged by the falling glass, necessitating repairs."

In addition to reimbursement for the $2 million claim it paid, Old Republic General Insurance Corp. is seeking attorneys' fees and pre-judgment interest, among other things, from XYG Glass and Steel Studio, U.S.A., according to the suit.

Stratus Properties isn't involved in the lawsuit as a plaintiff or defendant, chairman and CEO Beau Armstrong told the American-Statesman.

"As far as the insurance companies litigating with the glass manufacturer, that has absolutely nothing to do with us," he said.

The XYG glass was replaced with specially engineered glass capable of withstanding hurricane-force winds and even bomb blasts, according to its manufacturer, DuPont.

The new glass was also mounted differently. Instead of brackets on the sides, stainless steel mounts were installed at the top and bottom of each panel.

Following the repairs, things quickly returned to normal at the W Austin Hotel and Residences, Armstrong said. Occupancy at the hotel remains strong, according to Stratus' most recent quarterly report, and sales of condos continue to be brisk.

"It was very disruptive but, thankfully, with help from the city, the willingness of our contractor to accept responsibility and the patience of our residents, everything is good," he said. "All's well that ends well."

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