Litigation can fall on either side of the equation. The experienced Long Beach, Los Angeles, Orange County, California Construction Defects Attorneys at Smith & Garg stand ready to assist either party. For example, just as a homeowner may want to sue a developer or contractor for construction defects associated with his/her home, a developer or contractor can sue the owner of a structure for nonpayment after work has been completed. Likewise, litigation may also ensue where the developers, contractors, and subcontractors may want to sue each other for breach of contract amongst themselves.

Some of the most common grounds for construction defect litigation include:

• Negligence;
• Breach of Contract;
• Breach of Implied Warranties; and
• Fraud / Negligent Misrepresentation.

NEGLIGENCE CASES

As with most other negligence claims, the Plaintiff (person filing the lawsuit) needs to show that there was a duty on the part of the Defendant (person being sued) to conform to a specific standard of conduct for protection of the Plaintiff against unreasonable risk of injury, and that this duty had been breached by the Defendant. Additionally, this breach must be the actual and proximate cause of the harm suffered by the Plaintiff, and actual damages must have occurred. In order to prove negligence in construction defect cases, it would have to be proven that the developer / contractor / subcontractor failed to exercise the ordinary care, skill and knowledge expected by other such specialists in the construction industry. Also, this duty of care extends to foreseeable Plaintiffs as well. Put another way, this duty is owed to anyone who could have reasonably been injured by the defect, such as subsequent buyers of the building. Also, developers / contractors may be held responsible for the negligent actions of their subcontractors.

BREACH OF CONTRACT CASES

A breach of contract occurs when a party has an absolute duty of performance, the party fails to perform, and this duty has not been waived. The party's failure to perform in accordance with the terms of the contract constitutes a breach. If a construction contract is breached by the owner, the builder will be entitled to profits that would have resulted from the contract plus any costs expended. If the contract is breached after the construction is complete, the measure of damages would be the equivalent of the contract price plus interest. If the contract is breached by the builder, the owner is entitled to the cost of completion plus reasonable compensation for the delay. Most courts will allow the builder to offset or recover for work performed to date to avoid unjust enrichment of the owner.

BREACH OF WARRANTY

A "Warranty" is actually a written guarantee with regards to the quality and integrity of a product or service. With regards to contract law, there are certain warranties that are implied. For the purpose of construction law, there are two implied warranties that are relevant which are: the Implied Warranty of Good and Workmanlike Performance in Service Contracts, and the Implied Warranty of Good and Workmanlike Performance and Habitability in the Sale of a Home. With regards to the first implied warranty, any contract for a service gives rise to a warranty that the service will be performed in a good and workmanlike manner. The second implied warranty asserts that when a home is sold, the seller gives the buyer an implied warranty that the home was constructed in a good and workmanlike manner and it is habitable. In some instances, the warranty of good and workmanlike performance may be waived; however the warranty of habitability may not be waived. In fact, the warranty of habitability imposes strict liability on the developer / contractor, which essentially means that the owner of the building does not need to prove negligence. However, the owner will still need to prove that a defect exists, that there are damages as a result of the defect, and that the developer / contractor proximately caused the defect.

FRAUD AND MISREPRESENTATION

Intentional misrepresentation (or Fraud) in the construction law context, is when the developer / contractor intentionally misrepresents facts regarding the quality of / or construction of a home. The developer / contractor knowingly makes false statements to the homeowner, or knowingly advertises false facts about the quality of the construction.

As a result of this misrepresentation, the homeowner relies on the misrepresentation, and suffers damages (pecuniary loss). The homeowner will have to prove that the developer / contractor intended to lie, and knew what he / she was doing when making specific assertions. As an aside, there are no defenses to intentional misrepresentation. Negligent misrepresentation is basically the same cause of action as fraud or intentional misrepresentation, with two main exceptions. First, rather than having to prove that the developer / contractor intentionally and knowingly misrepresented the quality of construction; you would have to prove that the developer / contractor was negligent. Thus, the basic elements of a negligence claim would have to be examined: (1) there was a duty owed (2) that the duty was breached, and (3) that the breach proximately caused actual damages (pecuniary loss) to the homeowner. Additionally, negligent misrepresentation is confined to misrepresentations made in commercial settings only.

A construction defect is a flaw associated with a building which reduces the value of it. Construction defects can be patent (obvious) or latent (hidden or not apparent). Deficiencies associated with a structure, whether it is a home or a commercial building, can include anything from the actual workmanship to imperfections with regards to blueprints, regulation and supervision of workers on site, inspections, or the preparation involved with the construction itself. Generally, construction defect cases can be broken down into four different categories. Depending on the case, defects will typically fall under one or more of the following: (1) subsurface deficiencies; (2) construction deficiencies; (3) material deficiencies; and (4) design deficiencies.

SUBSURFACE FLAWS

Subsurface flaws are those that involve soil conditions underneath a structure. Sometimes, homes or buildings are built on top of land that does not have a stable foundation, such as a hill. As a result of this lack of stability, the foundation or floor slabs of the structure may crack. Additionally, if the soil underneath the building has not been accurately compressed and there is no means for sufficient drainage, then the likelihood of the structure moving or shifting is very high. Thus, when finding a suitable place to build a structure on, subsurface conditions can play a very important role.

CONSTRUCTION DEFICIENCIES

Construction deficiencies are flaws that occur due to poor quality workmanship during the actual construction process. The issue here is that these types of deficiencies may not be readily apparent, and even once discovered, can have a long lasting effects on the structure, further requiring constant maintenance. Some examples of the types of structural defects that result from poor workmanship are cracks which may form in the foundation or walls, dry rot of wood, electrical or mechanical issues, leaks due to poor plumbing design, and water penetration through some portion of the structure which creates the ideal climate for toxic mold growth.

MATERIAL DEFICIENCIES

Generally, defects can also occur when below standard materials are utilized in the building or construction phase of the structure. As a result, this can cause significant damage to a home. For example, suppose a patio door is constantly leaking from the inside. There may be a variety of different reasons for why it continues to leak. Assume the installation process itself was perfect and the patio door itself seems strong. However, the wallpaper used for the building could be substandard, or the frame surrounding the patio door may be poor quality, or the drywall may be inferior compared to that commonly used in the industry. Therefore, you could have good subsurface conditions, and great workmanship, but if the materials used are second-rate, then defects can still occur.

DESIGN DEFECTS

Lastly, design deficiencies occur when the person responsible for coming up with the appropriate blueprints, such as an architect or an engineer, draft a design for the building which has flaws in the design itself. For example, if the roof on a building has a design defect, then this could result in water permeation, insufficient drainage, or weak structural support. Thus, the design of a structure, whether it is a home or a commercial building, must be flawless to begin with, in order to avoid any further complications down the road.

Although each construction defect case is unique with its own set of circumstances, there are some common types of damages that are recoverable when litigation is involved. For example, typically the Plaintiff can recover the expense incurred for repairs (the building owner has duty to mitigate damages and thus in some cases may have to repair the building), the decrease in value of the building, any temporary housing costs and relocation expenses associated with that, compensation for the loss of the use of the building and surrounding property, and attorney's fees and other related court costs. If there were any personal injuries that occurred due to the defects, any medical costs associated with such injuries would most likely be recoverable as well. Of course, if the court determines that outrageous conduct was involved, it may want to slap on punitive damages (compensatory damages intended to punish or penalize) as well.

Before pursuing litigation, the developer / contractor must be notified first of the defect(s), so that he / she has an opportunity to remedy the damage sustained. If no attempt is made to correct or repair the defect(s), after notifying the developer / contractor of the damage, then one should seriously consider a lawsuit. Depending on the cause of action alleged (Negligence, Breach of Contract, etc.), and whether the defect was patent (obvious) or latent (hidden and not obvious), the Statute of Limitations (the time limit for filing a lawsuit) will vary for a construction defect case. Typically, the clock starts to run when the defect was discovered or should have been reasonably discovered.

In the event a dispute arises over your construction project, the Long Beach, Lost Angeles, Orange County, California Construction Defects attorneys at Smith & Garg are very knowledgeable in the application of construction law and finding a solution to your dispute in a rational manner. We represent all types of litigants in complex construction litigation cases, from homeowners, commercial building owners, developers, contractors to subcontractors.

Between scheduling, project engineering and upholding contract agreements, disputes may occur between the parties working to complete a construction project. Subcontractors and general contractors want to be paid for their good work to maintain a healthy cash flow. Homeowners and owners of commercial buildings demand quality construction, free from defects, within specifications, and without reasonable delay. In a typical construction project, these objectives would not be difficult to achieve, however when the processes are complicated, we can provide you with the skill, experience, and legal advice you will require.

We take into consideration the time sensitivity of construction cases and work towards a rapid solution, whether through Mediation, Arbitration, Litigation or Negotiation.