Gray•Duffy Negotiates Creative Settlement in Construction Defect Lawsuit

September 2012

Overview

Wendy Lin Suh of Gray•Duffy’s Encino office achieved a favorable settlement for the firm’s plumbing subcontractor client by convincing the plaintiff to adopt the defense repair plan at a small fraction of the amount claimed.

Discussion

Alan Hayase v. David Thompson dba Master Plumber, et al.

Gray Duffy, LLP represented defendant David Thompson dba Master Plumber (Master Plumber), with regard to plumbing work performed at the plaintiff’s residence. The work initially involved locating a slab leak and eventually evolved into relocating the plumbing lines through the framing and ceiling of the first floor. The complaint alleged that the defendant, The End Result, a contractor referral business, guaranteed Master Plumber’s work and that the defendant, American Contractors Indemnity Company (ACIC), was liable on the contractor’s bond. The plaintiff alleged that Master Plumber’s work affected the structural integrity of the residence. The End Result and ACIC filed cross-complaints against Master Plumber based on their written indemnity agreements with Master Plumber. The plaintiffs initially claimed more than $200,000 in damages for the cost to make the necessary structural repairs, loss of use, and attorney’s fees.

The parties agreed to an informal dispute resolution process whereby the plaintiff would agree to the defense structural engineering repair plan and the parties would cooperate in seeking the City’s approval of the plan. Thereafter, the City approved the plan, and a settlement agreement and mutual release was then executed by Master Plumber and The End Result, where Master Plumber would pay $25,000 and The End Result would pay $15,000. ACIC dismissed its cross-complaint as part of the settlement. The plaintiff then hired the defense structural engineer to implement the defense repair plan.

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.