The first case was a single-family home in Laguna Beach, California. The homeowner was unhappy with the quality of the construction and hired an attorney to sue the general contractor. I was hired by Nick Cipiti, a partner at the law firm of Walsworth, Franklin, Bevins & McCall, who was defending the general contractor. I took part in extensive visual inspections and observed destructive testing which gave me the opportunity to document the construction provided by the general contractor. I prepared a scope of repair and estimate based on the inspections and concluded that the homeowner was entitled to receive approximately $109,000.
The plaintiff homeowner made a demand of $1,200,000. There was an offer made by the defense prior to trial of $400,000 which was rejected.
The trial was held and both sides made their case to the jury. As with all trials there were many ebbs and flows but at the end of the jury deliberation the jury started with my estimate and with several offsets against the homeowner the jury verdict was that the homeowner owed the general contractor $200,000. Since the homeowner’s case did not beat the general contractor’s $400,000 offer prior to trial the homeowner was also required to pay the general contractors attorney’s fees and costs. He had the opportunity to get almost 4 times our estimate prior to trial but instead owed almost $400,000 a net $800,000 difference.
The second case involved 60 homes in the Inland Empire. A group of homeowners hired an attorney and a team of experts to advise them of the defects at each of their homes. Eventually the plaintiff homeowners filed a lawsuit against the developer. I was hired by the developer’s attorney, Phil Kopp, a partner at the law firm of Newmeyer & Dillion. This case was driven by the alleged concrete issues that the plaintiff experts created.
The plaintiff homeowners made a demand of $30,000,000. ($500,000 per house) That is more than double what it would cost to tear the houses down and re-build them. There was an offer made by the defense prior to trial of $100,000 per home, ($6,000,000) which was rejected.
The trial was held and both sides made their case to the jury. As with some trials this was a very time consuming trial. Mostly due to the plaintiff taking 4 months to put on their case. At the end of the jury deliberation the jury verdict was that the homeowners were not owed anything, zero, zilch, nada. We call this a defense verdict, and since the homeowner’s case did not beat the general contractor’s $6,000,000 offer prior to trial the homeowners were each required to pay the attorney’s fees and costs, which were substantial. Each homeowner owed the developer approximately $30,000. The developer eventually settled with each homeowner for $0 in exchange for a signed release of all the developer’s liabilities ending any chance for future litigation.
The third case involved one single family home in Brentwood, California. The plaintiff was a construction defect plaintiff attorney for one of the most prolific plaintiff firms in California. This individual purchased the home for approximately $5,600,000. One month after the purchase he filed a construction defect lawsuit against the general contractor. I was hired by Aaron Booth who is the principal at The Law Offices of Aaron Booth. As a part of a defense team of experts we performed our analysis, prepared a scope of repair and an estimate. I was deposed for several days leading up to the trial.
The trial was held and both sides made their case to the jury. As with all trials there were many ebbs and flows but at the end of the jury deliberation most of the ebbs were in favor of the defense. The jury started with my estimate and then started deducting from that. The jury verdict was that the homeowner owed the general contractor $170,000.
Since the homeowner’s case did not beat the general contractor’s $1,000,000 offer prior to trial the homeowner was also required to pay the general contractors attorney’s fees and costs. In addition to all of that, the jury found the homeowner guilty of fraud and assessed a substantial fine to that charge. The fraud conviction was eventually overturned, but in this case, he had the opportunity to get about 20 times more than our estimate if he had accepted the $1,000,000 offer prior to trial. Instead he owed almost $200,000 a net $1,200,000 difference.
Each of these 3 cases are good examples of why mediation should work. In these trials, the homeowners each went into them expecting to prevail. They did not see the train-wreck of their case coming. The moral of these stories is “don’t be too sure of the things that you are sure of”. They each are a precautionary tale.
The nature of the consulting business within the construction defect arena is that most cases settle in mediation. I have had several hundred of those. A good settlement is when everyone is unhappy.
A few will progress to depositions. I have had over 85 of those in 25 years. Many times, if everyone is paying attention, the case will settle not too long after depos.
In only a small percentage of cases do both defense and plaintiff decide they have each made their last best offer and it is just not enough. They then choose to go pick a jury or an arbitrator. I have testified in 19 trials and 13 arbitrations in the past 25 years. When a case goes that far, it comes down to good lawyering and an excellent expert presentation.
