SPOTLIGHT: Highlights, Lowlights and Lessons Learned
In our Spotlight section, we will dive into our minds nether reaches, collect interesting nuggets that have sank to the bottom and bring them back to the surface. Trapped down there, under years of meetings, presentations, subcontracts, defect reports, cost estimates, settled cases, entirely too much coffee and a touch of whiskey (mmm! Next time you’re in San Francisco, get an Irish Coffee at The Buena Vista Cafe) are things that work, things that don’t and things that are just plain crazy (like a construction defect blog entry about Irish Coffee in San Francisco).
Our First Installment of SPOTLIGHT
For our first installment of “Spotlight”, we’ll highlight a project out of Arizona. The property is a commercial condominium center with most of the units/buildings purchased and used by the businesses that operate them. After completion of construction and occupancy by the owners, some of the units began demonstrating distressed finishes in the form of drywall cracks, buckled t-bar ceilings and damaged flooring. The distress was largely due to soils movement due to inadequate drainage around the site. Grading and drainage repairs were made around the site that improved the drainage conditions but, additional complaints continued to come in to the developer and additional damage continued over time.
When it became clear that additional repairs needed to be performed, and an ominous cloud of litigation began to hover over the site, the developer and their attorneys’ hired an expert team experienced in multiple disciplines to evaluate the site and develop repair recommendations. These experts conducted multiple visits of the site, prepared analysis and repair recommendations for conditions observed and made their findings available to the unit owners.
Destructive testing was not performed and the developer decided to implement the grading and drainage repairs recommended. Cosmetic repairs were not performed in order to allow the buildings to adjust to the new site conditions. During this time, clouds of litigation turned into a storm and a suit was filed.
The case languished for years, additional inspections, meetings and teleconferences took place between the parties and their consultants. Little was accomplished. Finally, twenty-one months after the developer had produced a report of their findings and recommendations, the plaintiff produced a report of their own.
Eventually, things began to move. Limited destructive testing was performed and meetings were held with the defense parties to develop new repair recommendations. After one meeting, a loose consensus repair recommendation was reached between the defense parties. A cost of repair was then prepared based on those recommendations. Plaintiff produced a revised cost estimate prior to the expert presentation and another prior to the first mediation. The case settled during the first mediation.
The total case timeline extended for roughly 31 months but only 10 months from production of plaintiff’s first report.
Joint defense repair recommendations prepared absent of allocating fault.
Defense focus on developing realistic repairs and not the smallest repair that could be defended.
Plaintiff counsel ignoring their experts revised repair cost estimates combining the plaintiff and defense repairs.
Developers repeated repair attempts without additional soils testing.
Developer repair recommendations made prior to plaintiffs’.
Plaintiff repair recommendations and costs prepared twenty-two months after initial involvement.
Subcontractor expert repair recommendations more extensive and would have been more expensive than the plaintiffs’.
What’s it mean?
The stakeholders stop posturing, evaluate the real issues, develop real solutions, and resolve within 12 months.