A general contractor seeks more than $2 million in exemplary damages and $700,000 in actual damages alleging it was forced to replace every nail in more than 100 homes.

J.C. Cantera Homes filed a lawsuit March 1 in Jefferson County District Court against Aaron Jaramillo; Zulema Escobedo, doing business as Escobedo's Insurance Co.; and Farmers Insurance Co., doing business as Texas Farmers Insurance Co.

Cantera claims it hired Jaramillo to provide framing work on certain homes it was building in Jefferson County. As part of its contract, Jaramillo agreed to provide liability insurance coverage, which it obtained through Escobedo. In turn, Escobedo secured a commercial liability policy through Farmers, the suit states.

At the end of 2010, Jaramillo told Cantera it had completed the framing work for the homes in accordance with building standards, the complaint says.

According to the suit, however, a windstorm engineer discovered rusted nails used in the wall sheathing and roof decking, Cantera claims. This led Cantera to discover that Jaramillo did not use nails that were in accordance with applicable building codes, according to the complaint.

"Since the Defendant Jaramillo did not use the correct nails the Plaintiff is now required by the Texas Department of Insurance to take off all the roof decking and wall sheathing on all the homes involved and redo all the roofing and siding with galvanized nails," the suit states. "This has to be done and is being done to over 100 homes."

After Cantera discovered the problem, it submitted a claim against the insurance policy Jaramillo had secured when he began framing work on the homes, the complaint says.

However, Escobedo and Farmers are not willing to honor the insurance coverage, Cantera claims.

In its complaint, J.C. Cantera Homes alleges fraud, common law fraud, negligent misrepresentation, breach of contract and negligence against the defendants.

In addition to the $700,000 in actual damages and the $2.1 million in exemplary damages it seeks, Cantera wants the court to award it post-judgment interest at the highest legal rate, attorney's fees, costs and other relief to which it may be entitled.

Kenneth D. Baugh of Houston will be representing Cantera.

Judge Donald Floyd, 172nd District Court, has been assigned to the case.

Case No. E189-481

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