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Excerpted from Verdicts & Settlements
Verdicts & Settlements (front page), March 14, 1997

"WATER TORTURE"

By Michael Solender


Water intrusion in construction projects is one of the most vexing of problems to the property owner. Water leaks, together with the numerous problems caused by this condition, are generally one of the major reasons for the many lawsuits filed in construction defect cases, and the handling of such disputes has spawned a new legal specialty.

The causes of water intrusion are rain and sprinkler water, which can enter the building envelope through inadequate flashing at the joints of doors and windows, roof penetrations, fireplace chases and chimneys, decks, dormers and window frames. Prolonged moisture buildup often occurs when leaks go unnoticed within the wall itself even though the moisture does not manifest itself at any interior surface.

In nearly every case, investigation into these issues discloses additional problems, and very often the source of the leak itself will be elusive. Investigation into the source of the water intrusion is now the new benchmark for a whole series of consequential damage claims, none of which may have been previously contemplated by the plaintiff's attorneys.

Water itself is the real enemy of construction elements and stucco plaster and the conditions it is designed to protect are among its chief victims. The water-resisting material used behind most plaster or stucco systems in the southwestern United States is a building paper. Generally in areas that get less than 20 inches of rainfall a year, the building paper requirement is called grade D and can withstand prolonged moisture for about 18 minutes before becoming saturated.

With exterior insulation finish system (sometimes called one-coat stucco), some interior elements can hold water like a bowl for weeks at a time. When a small probe is driven into the EIFS to test for moisture in the subsurface, sometimes weeks after a rainfall, water may pour from the aperture for several minutes. Damage due to the wetting of the substrate, along with the resultant damage to some of the hidden elements such as structural lumber, are considerations that tend to drive many construction-defect cases right through the fiscal roof.

Many lawyers and their experts incorrectly identify any kind of interior dampness with the term "construction defect," when often the so-called defect is merely the stucco system performing as it is designed to perform. Of course, the stucco system is designed to shed practically all the water that strikes its surface, but water may enter the stucco system through cracks in its surface, through voids around windows and doors and even eventually through the stucco system itself if it becomes saturated.

In construction-defect litigation, the plaintiff's experts have the task of preparing an appropriate plan of technical repairs and remediation of all the existing real or imagined construction problems or defects, including structural damage due to moisture. These plans often include a repair matrix that involves bringing the existing improvements up to the most recent building code.

Of course the preparation of the plaintiff's defect reports, propounded by the many technical experts, provides gainful employment to many. Unfortunately, the cost of repair often exceeds the cost of building a new project.

In response, the defense needs to take a similar stand with its experts to provide and address the plaintiff's contentions. Sometimes these contentions prove to be fairly accurate; the contractor or developer then must line up the various construction subcontractors, who actually built the work in dispute, to come to the table with their insurance carriers in order to fund the necessary repairs. Now the flames are fanned for ensuing confrontation, which all started with one small leak of water into the building envelope.

As complex as are the construction problems, the legal problems pose yet greater problems-from sorting through exactly who is most at fault on various issues, then on to the time-consuming negotiations with counsel for plaintiffs and various defendants, then to the myriad questions if insurance coverage.

Many substantial construction defects are not covered by insurance, simply because of the lack of consequential damage. The fact that a particular construction element has been improperly or poorly built, even to the point where the construction violates building codes or deviates from the construction blueprints, may be of no consequence to the insurance carrier if, as is often the case, the contractor's policy contains work product exclusions or other types of exemptions.

All such cases are insurance-driven, for without appropriate coverage there is no one to pay the tab for the experts and the legal staffs, let alone for claims payments. In any event, the coverage policy doesn't protect the insured from poor workmanship unless that condition has caused consequential damage to other elements, and then generally only to that extent.

The mediation meeting is where the large majority of cases are eventually settled, but the settlement doesn't come cheap and it doesn't happen quickly. Nevertheless, the mediation process is the most effective device for settling construction disputes. The solution to most construction-defect cases involves overcoming the innumerable conflicting questions of insurance coverage. Those legal mediators with the most comprehensive handle on these tricky insurance issues are the ones who successfully resolve the complexities of interlocking disputes, prior to litigation.


MORE ARTICLES:

- THE CONSTRUCTION-EXPERT INDUSTRY: NEW DEVELOPMENTS

- CONSTRUCTION EXPERT CAN BUILD, OR DESTROY, A CASE

- EXPERTS CAN RESOLVE THE CONSTRUCTION CONUNDRUM
   Standard Construction Seldom Is Really Standard

- IN CONSTRUCTION CASES, BEWARE THE HIRED GUN

- THE COMPOUND CONSEQUENCE OF ONE SMALL
   DISCERNABLE LEAK INTO THE BUILDING ENVELOPE

- THE PANDORA'S BOX OF WATER INTRUSION LITIGATION

- CONSTRUCTION DEFECTS:
  How To Avoid the 'Big Hit' And Costly Litigation

- BUILDING A REMEDY

- WATER TORTURE

- THE WATCHER
   A third party may be helpful in monitoring the expert when figuring
   the cost of repairs

- KNOW-HOW
   A general contractor should have knowledge in related
construction areas to be effective as an expert witness

- EXPERT EASE
  OPINION: Construction defect experts provide lists of failures in
  preparation for litigation, and counsel must verify reports for accuracy

- MAKE READY
  Properly prepared expert witnesses will save both time and money.

- ON THE WATCH

- THE NUMBERS


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