Gray•Duffy Achieves Defense Verdict in High Stakes Arbitration Matter

September 2009


Overview

Patrick Roberts achieved a significant defense verdict on behalf of a sheet metal subcontractor in a high stakes construction defect arbitration matter involving a high end single-family home in Montecito, California. Gray•Duffy was retained to defend the client very late in the discovery process after expert depositions had commenced, and about 30 days before the arbitration hearing.

Discussion

Mishra v. Armstrong

The plaintiffs contended that the residence was so poorly constructed that it had to be completely re-built. During the pendency of the arbitration hearing, the plaintiffs undertook a complete multi-million dollar “remodel” of the residence. They contended the house, as originally constructed, had significant water intrusion at the roof and other building components. Mr. Roberts’ client, a sheet metal subcontractor, performed extensive work at the roof and other areas where water intrusion was alleged to have occurred.

At the arbitration hearing, the plaintiffs sought damages of more than $2.5 million against the general contractor and subcontractors. The general contractor asserted that any damages were the responsibility of the subcontractors on a joint and several liability basis. The general contractor also sought defense fees and expert costs of more than $790,000 against the subcontractors pursuant to the written indemnity provisions. In support of this claim, the general contractor relied on recent case law interpreting indemnity agreements in favor of general contractors (Crawford v. Weathershield 44 Cal.4th 541).

As a result of the firm’s defense, the arbitrator awarded the plaintiffs damages and costs of $530,000, but only awarded damages against Mr. Roberts’ client in the amount of $5,195.79. On the general contractor’s claim for defense fees and costs, Mr. Roberts convinced the arbitrator that no such award was warranted. On the total claim presented of $3,290,000 (indemnity and defense), the award against Mr. Roberts’ client of $5,195.79 was less than .15% the total damages claimed.

Please Note: This article is necessarily general in nature and is not a substitute for legal advice with respect to any particular case. Readers should consult with an attorney before taking any action affecting their interests.