Gray•Duffy Negotiates Favorable Settlement in Construction Defect Lawsuit

June 2010

Overview

Michelle MacDonald of Gray·Duffy’s Encino office negotiated a creative settlement involving a repair protocol agreed to by the parties in order to bridge the gap between the claimed damages and the moneys available for settlement due to significant coverage issues with two separate insurance carriers.

Discussion

Mushovic v Ultimate Water Creations

Gray·Duffy’s client was retained by the plaintiffs to construct an elaborate swimming pool containing waterfalls, artificial rock and appurtenant structures for a final cost of approximately $330,000.  The plaintiffs alleged a number of defects in the construction of the swimming pool, and initially demanded $750,000 to settle the matter.  At a mandatory settlement conference, the plaintiffs dropped their demand to $200,000 after settling with the other subcontractors for $80,000.

Due to the nature of the claims, there were significant coverage issues. Ultimately, after in-depth negotiations between the parties and their counsel directly, Ms. MacDonald employed a creative solution involving certain repairs to be done by the client and moneys obtained from a second insurance carrier.  The case was settled for a total of $65,000, plus the repairs made by the client.

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.