After several years of litigation, actor Tom Hanks and his wife, Rita Wilson, have been denied financial compensation in a home-construction dispute with Ketchum contractor Storey Construction.

In a decision issued Saturday, May 21, the American Arbitration Association ruled against the Hollywood couple's claim that their $12 million home north of Ketchum was built by Storey with construction defects. Instead, arbitrators blamed problems with the home on "poor design and bad architectural and engineering advice" as provided by Lake Flato, a nationally renowned architectural firm headquarter in San Antonio, Texas.

Hanks and Wilson were seeking $3 million from Storey Construction in a claim filed with the Arbitration Association in 2007. The case was heard during a 10-day hearing held in April at the Clarion Inn in Ketchum.

Hanks and Wilson previously settled with Lake Flato, receiving $900,000 in compensation in an agreement reached in November 2010. That agreement was reached after just one day of arbitration between Hanks and Wilson and Lake Flato at a hearing also held at the Ketchum Clarion Inn.

In the Storey Construction case, a panel of three arbitrators determined that Hanks and Wilson had failed to prove that damages to the home were the fault of Storey Construction. The arbitrators determined that Hanks and Wilson were responsible for the full $167,623 cost of arbitration, but further denied a Storey Construction counterclaim that alleged Hanks and Wilson filed their claim out of malice.

Hanks and Wilson released the following statement Tuesday to the Idaho Mountain Express through their public relations firm, 42 West, in New York City.

"Over the years, we have experienced a number of serious problems with how our home was designed and built," Hanks and Wilson stated. "We have previously resolved our claims against the architect. For various legal reasons, including the passage of time, the arbitrators did not share our view of the contractor's portion of responsibility. While we disagree with the outcome, we are pleased that the contractor's counterclaims were rejected."

The Arbitration Association's ruling states that problems with the Hanks and Wilson home, completed in 2002, included leaking roofs, inadequate drainage, fireplaces that did not vent properly and an inadequate air-conditioning system. In 2003, sliding snow from the roof damaged kitchen windows and roof components.

In its ruling, the Arbitration Association determined that evidence in the case showed "overwhelmingly that the architectural and structural plans were very poorly executed and contained numerous design errors and deficiencies."

Kim Monroe, a partner in Lake Flato, said Tuesday that the firm hadn't yet seen the ruling and "we don't have a comment on it."

The Storey Construction and Hanks and Wilson dispute was tied up for two years in litigation in Blaine County 5th District Court and in the Idaho Supreme Court, as Storey Construction fought to stop arbitration, contending that the case had been settled in an arbitration claim that Storey Construction had filed against the couple in 2003. In that case, Storey Construction was awarded about $2 million in unpaid balance, interest and attorney's fees.

Storey Construction attorney Miles Stanislaw said Tuesday that the ruling vindicates his client.

"It is shocking and disgusting that Tom Hanks and Rita Wilson would treat anyone the way they treated Gary Storey," said Stanislaw, referring to the owner of Storey Construction. "The emotional and financial damage they have done to Gary Storey and his family is incalculable. Hanks and Wilson didn't just lose the case—they we're disgraced."

Terry Smith: tsmith@mtexpress.com