MULTI-PARTY CONSTRUCTION DEFECT LITIGATION (Webinar by Strafford Publications, Inc.)
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1 MULTI-PARTY CONSTRUCTION DEFECT LITIGATION (Webinar by Strafford Publications, Inc.) Key Challenges in Plaintiffing The Multi-Party Defect Case Presented By: Eric A. Grasberger 1
2 I. INTAKE a. Initial analysis of merits i. Nature of defects (defects v. damages) (visibility) (actual or theoretical) ii. Verification of defects and damages iii. Nature of Plaintiff litigant (business v. public agency v. individual) iv. Likelihood of funds to pay damages (insurance, bond, deep pockets) v. Dispositive defenses (statute of limitations, limitations of liability, etc.) vi. Attorney fee recoverability 2
3 I. INTAKE cont. Alerts to Threats in Europe, 2011 ALERTS TO THREATS IN 2011 EUROPE : BY JOHN CLEESE The English are feeling the pinch in relation to recent events in Libya and have therefore raised their security level from Miffed to Peeved. Soon, though, security levels may be raised yet again to Irritated or even A Bit Cross. The English have not been A Bit Cross since the blitz in 1940 when tea supplies nearly ran out. Terrorists have been re-categorized from Tiresome to A Bloody Nuisance. The last time the British issued a Bloody Nuisance warning level was in 1588, when threatened by the Spanish Armada. The Scots have raised their threat level from Pissed Off to Let s get the Bastards. They don t have any other levels. This is the reason they have been used on the front line of the British army for the last 300 years. The French government announced yesterday that it has raised its terror alert level from Run to Hide. The only two higher levels in France are Collaborate and Surrender. The rise was precipitated by a recent fire that destroyed France s white flag factory, effectively paralyzing the country s military capability. 3
4 I. INTAKE cont. Italy has increased the alert level from Shout Loudly and Excitedly to Elaborate Military Posturing. Two more levels remain: Ineffective Combat Operations and Change Sides. The Germans have increased their alert state from Disdainful Arrogance to Dress in Uniform and Sing Marching Songs. They also have two higher levels: Invade a Neighbor and Lose. Belgians, on the other hand, are all on holiday as usual; the only threat they are worried about is NATO pulling out of Brussels. The Spanish are all excited to see their new submarines ready to deploy. These beautifully designed subs have glass bottoms so the new Spanish navy can get a really good look at the old Spanish navy. Australia, meanwhile, has raised its security level from No worries to She ll be alright, Mate. Two more escalation levels remain: Crikey! I think we ll need to cancel the barbie this weekend! and The barbie is canceled. So far no situation has ever warranted use of the final escalation level. John Cleese British writer, actor and tall person 4
5 I. INTAKE cont. b. Client expectations i. Funding the case (hourly fee, contingency fee or other) ii. iii. Duration of case Net recovery scenarios 5
6 II. IDENTIFYING DEFENDANTS a. Scope issues who did what? (Owner has a knowledge gap) b. Statute of limitations issues c. Contractual limitation clauses getting around them d. Contract v. tort issues (economic loss doctrine) e. Tolling v. suing 6
7 III. INVESTIGATION a. Know state rulings regarding extrapolation of evidence b. Know state rulings on spoliation of evidence c. Selecting number and location of openings d. Notice to defendants (usually per Case Management Order) e. Site visit agreements (Exhibit 1) 7
8 III. INVESTIGATION cont. a. Know local trends regarding extrapolation of evidence b. Know local rulings on spoliation of evidence c. Selecting number and location of openings d. Notice to Defendants (per Case Management Order) e. Site visit agreements (Exhibit 1) f. Sample evidence gathering plan (Exhibit 2) 8
9 III. INVESTIGATION cont. g. Multiple experts? i. Forensic architect (usually for envelope or general expert lead) ii. Roofing consultant iii. Structural engineer iv. Mechanical engineer v. Geotechnical engineer vi. Civil engineer vii. Damages expert (accountant, real estate broker, etc.) 9
10 IV. DISCOVERY a. Electronic discovery i. Must be conservatively managed and budgeted ii. Effort and protocols must be reciprocal b. Hard paper files c. Deposition issues d. Subpoenas e. Contacting ex-employees, laborers, etc. 10
11 V. TRIAL a. Where s the beef? i. Juries, judges and arbitrators want photos and physical evidence first ii. iii. Descriptions of how it happened come second Blame comes third (see Section VI Allocating Damages) b. Show me the money! i. Repair costs: full v. partial repair ii. iii. iv. Repair costs: estimates v. hard bids Lost revenues/profits/stigma/market value Employee time v. Investigative v. expert time vi. Attorney fees 11
12 V. TRIAL cont. c. Embrace technology i. Demonstrative impact ii. Shortens learning curve iii. Electronic exhibits speed up trial time 12
13 VI. ALLOCATING DAMAGES a. Every case is different b. Allocation by plaintiff differs from prime contractor or developer c. Allocation will never be perfect always debatable just keep it reasonable 13 Tu e s d a y, M a r c h 6, Portland, Oregon
14 VI. ALLOCATING DAMAGES cont. d. Allocating is a group exercise e. Samples (Exhibits 3 and 4) 14 Tu e s d a y, M a r c h 6, Portland, Oregon
15 Questions? Eric A. Grasberger, Partner Construction & Design Section The Development Law Group STOEL RIVES LLP 900 SW Fifth Avenue, Suite 2600 Portland, OR (503) Cell: (503) Fax: (503) Tu e s d a y, M a r c h 6, Portland, Oregon 15
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