A $12.8 million mansion became a $19.8 million mansion — and lawsuits ensued

Feb 01, 2024
5 months ago
Laura Ricketts

Eight years after Laura Ricketts moved into her new lakefront mansion in the northern Chicago suburb of Wilmette and found flaws in it, a legal battle between her builders and their insurance company is playing out in court.

At stake is an estimated $7 million that Ricketts’ attorneys say was added to her $12.8 million mansion plan by a builder’s mistakes, overruns and changes.

Ricketts — a co-owner of the Chicago Cubs, co-owner of the Chicago Sky of the Women’s National Basketball Association and owner of the Chicago Red Stars of the Women’s Professional Soccer League — prepared a list of alleged problems with the house that runs to about 1,200 items, everything from a leaky roof to poorly installed bathroom tile and skylights.

The latest skirmish in the legal dispute that broke out in 2022 is a pair of lawsuits crossing one another, both filed late last week in federal court in Chicago.

The builder of Ricketts’ mansion, LG Construction Group, is suing its insurance company, Westfield, to cover its costs if it is found liable in the case Ricketts filed last year. Meanwhile, Westfield filed a suit requesting that a judge declare that the insurance company isn’t required to cover LG because a construction insurance policy expired before Ricketts’ complaints came out.

The policy, Westfield’s attorneys say in its suit, expired Jan. 24, 2018, but LG did not notify Westfield of Ricketts’ complaints until Aug. 8, 2019. LG’s attorneys argue that because the complaints are about the work that LG and subcontractors performed while the policy was in place, Westfield is required to help defend LG against Ricketts’ complaints.

LG and Westfield were scheduled to enter arbitration Jan. 23 said David Goodman, principal at Chicago law firm Goodman Law Group. Goodman is representing LG against Westfield but not against Ricketts.

Ricketts initially was also suing the house’s architects, Morgante Wilson, but she settled with them in recent months, according to Goodman. No terms of the settlement have been released.

Richard Valentino, a partner at Chicago law firm Amundsen Davis who is representing Westfield, declined to comment.

Dennis Culloton, a media contact for Laura Ricketts, did not provide a response from her to Crain's Chicago Business, a sibling publication of Crain Currency.

Ricketts began planning a mansion on a 1.2-acre parcel on in 2010, when she bought the site for $6.5 million. Two years later, she filed plans with the village to build a house that Chicago magazine reported at the time would take advantage of the site’s lakeward slope, making it two stories on the street side and three stories facing Lake Michigan. In 2014, Crain's reported that construction would cost $6.3 million, bringing total investment in the property to $12.8 million.

The six-bedroom house would have a long wing stretching nearly to the beach, with a sandy area built to connect the two.

According to the lawsuits, Ricketts originally planned to move into the house in March 2014. Because of construction delays, that was pushed back to August 2015, and the house was still incomplete when she moved in. 

LG’s suit says that “upon moving into the project, Ricketts continuously sent emails to LG and the project architect notifying them of construction defects she identified.”

Among the defects Ricketts allegedly spotted were “inadequate paint throughout the home, corners not being square, bumps in wallpaper, doors not properly sanded, leaks throughout the home and windows not properly closing,” LG’s suit says.

A roofing consultant hired by the architects found “improperly installed ice and water shield, gutters not pitched properly, inadequate flashing, downspout leaks, downspouts not connected to a sewer, improper materials used contrary to architectural drawings, ice damming and soffit leaks.”

One of the places that leaks were found was in the room built close to the edge of the sand, known in the lawsuits as the Lake Room.

Repairs to the roof alone cost $1 million, Ricketts’ original suit claims, according to Westfield’s suit.

LG worked on the house until June 2016, more than a year after Ricketts moved in. Even then, her attorneys wrote, the house was “riddled with significant construction defects.”

Three years later, in August 2019, Ricketts filed a request for legal arbitration with LG over the plethora of defects she found in the house and her costs to remediate them. 

When LG informed Westfield, according to the insurer’s suit, the builder said it “had no notice or knowledge of claim for damages [by Ricketts] until receipt” of her attorney’s Aug. 1, 2019, letter. LG’s attorney later told Westfield’s attorney that LG was “surprised” by Ricketts taking action and disputed her claims.

Westfield’s attorney, according to the suit, “sent a letter to LG, advising of Westfield’s position that it owed no coverage to LG for Ricketts’ claim.”

At the outset of the Ricketts project, LG took out an insurance policy from Westfield that provided up to $10 million in coverage.

The terms of the policy, according to LG’s suit, say Westfield would pay any sums that the insured “becomes legally obligated to pay” and that Westfield “will have the right and duty to defend [LG] against any suit seeking those damages.”

The two parties agreed to a “standstill,” which precluded either from suing the other during the Ricketts case, according to Westfield’s suit. But this month, LG told Westfield it was terminating the “standstill.”

LG alleges in its suit that it has incurred legal fees and other costs from the litigation against Ricketts for which Westfield should be liable. The builder’s attorneys wrote in the suit that LG “will continue to incur further damages as a consequence of Westfield’s breach of its obligation to provide LG with a defense in the Ricketts arbitration.”

LG is asking for a jury trial and that it be awarded damages.

Westfield, in its suit, is asking a judge to decide that the insurer “has no duty to defend or indemnify LG” and that Ricketts has no claim to any funds from Westfield.