A man walks into a lawyer’s office and says, “My new house is falling apart. Let’s sue the bum that built it.”

This article by Peter Lattey is published in the May 2012 issue of Advocate, The Journal of  Consumer Attorneys Associations for Southern California.

A homeowner walks into your office and says “My new house is falling apart and I want to sue the bum that built it.”

As a smart lawyer, you quickly decide that this may be your next money making case and you decide to find out what the case is all about. Being a prudent person, you do a bit of research before you take on the case. Just as an emergency room doctor does a triage on new cases to decide how each new patient is to be treated, a smart lawyer needs to do the same on new construction defect cases.

This is a story about what happens next.

You should start by asking the homeowner a few initial questions to determine what the contractual basis of the case is.

  • What sorts of problems are there with the house?
  • Is there a written contract between the owner and the builder?
  • Is the builder licensed?
  • Does the contractor have insurance?
  • Who drew the plans? Do they have insurance?
  • Was there a building permit issued?
  • Who took out the permit from city hall?

Chances are Mr. or Ms. Homeowner won’t know the answers to all of these questions but the questions will give you an idea of what is going on. You can then make a note of what documents you will need from the homeowner at your next meeting.

Next comes the slightly tricky part. As a good lawyer, you need to have a construction defect expert that you can call on to help assess the issues of the case. This needs to be an expert who understands the two main areas of dispute in construction defect cases; construction contracts and the technical aspects of construction. The design and construction contracts define who is responsible for all aspects of the project, who approves the work, who pays for what and so forth. There are standard contracts available but these are not always used, and when they are used they are often not adhered to. This is especially true in small projects such as single family homes but can also be true of large commercial projects.

Construction today is a complex business. Even a single family home can have 20 or 30 trades installing different systems. When the systems are installed incorrectly they can interact in unexpected ways to create problems. Then the problems will need to be sorted out. This is no game for an amateur.

But here is the conundrum for you. If you take the case you will need an expert but you don’t want to hire them until you have the case. Should this a problem for you? Not really. Call up your friendly building defect expert and ask him to take a walk around the site with you and the owner. An hour or two at the home should be enough to have a very good idea of what the issues are. This will also be a good opportunity to pick up those missing contracts, plans and other documents. If you decide to take the case, the expert can bill their time. If not, he can chalk it up to marketing as you do. If you and the expert have a relationship of trust, then he shouldn’t have a problem attending the initial site visit. If he doesn’t trust you enough to attend the site visit, then that is another issue that needs to be addressed in a different discussion.

A smart lawyer needs to pick the right expert to help them on this case and any future cases. What should you look for? As this is the same expert that you will go to trial with the criteria are the same as you would use to select an expert for trial.

A few criteria are:

  • The expert needs to have good credentials. But the credentials aren’t the whole picture.
  • The expert needs to have a good demeanor. Will they be credible with the client and, more importantly, in court?
  • When it is a small case, the fees won’t support many experts. The case may only afford one or two good, generalist experts. Therefore, the expert must be someone with a holistic understanding of design, construction and contract documents. Start by looking for an architect or an experienced licensed general contractor. The expert should be someone who has experience in the building type that the case concerns.
  • The expert should be someone who has a working style that meshes with your working style so that you can work well with them.

If you already have a favorite expert, call him up and set up a visit to the home to see the problems first hand. This will be a meeting with you, your expert and the homeowner. The purpose of the visit is to rough out the scope of the issues, get an order of magnitude of the potential costs to fix them, and to pick up construction contracts, plans and other documents.

If you don’t already have an expert from a previous case, a call to some colleagues will tell you where to look. A quick call, a google search, a review of the expert’s resume, a call to the expert’s references and meeting over lunch or coffee will give a pretty good idea if this is the right expert for the case.

What exactly do you do during the visit to the client’s home?

Take digital picture….. lots of pictures. They are cheap.

Have the owner explain the defects to you and the expert. The expert will take notes of and pictures of the defects so he can give an initial opinion about the causes of the problems and an order of magnitude cost to fix them. The report will be very rough and very preliminary but will provide the information needed for you to decide how to proceed. It is important that the expert look beyond the issues that the homeowner has raised. The homeowner is not an expert and will often focus on an issue that is a normal part of construction while missing something that is a more important issue or defect.

The reality is that if there are one or two major defects in a construction project, then there are probably more. A major defect indicates that someone was doing a sloppy job during the design and construction of the project. This sloppiness usually extends across many parts of the building, not just one part. The expert must take the time to fully explore the entire house to find as many of the problems as possible.

The causes of defects aren’t always easy to determine so it is important to have the expert do an initial appraisal of the causes. You should understand that these could well change later as the case unfolds and is more fully investigated. The problems may appear to be construction defects but they may not actually be. There could be a design defect. There could be an underlying soil issue that was never detected. The structural engineer could have made an error in their calculations. If you sue the contractor, you may be suing the wrong party. Suing the wrong party is never a good idea. It is really essential to find out what the issues really are and exactly who is the most likely responsible party.

Buildings, even small houses, are a complex assemblage of parts and systems. Often what appears to be the obvious reason for a problem isn’t the case at all. Here are a few examples of the complications in finding causes for defects from some past cases.

A leaky roof on a new building is usually the fault of the roofing contractor and is usually due to faulty installation or improper selection of the product used. A critical question is; did the contractor install the wrong product because the designer specified it incorrectly, or was it the right product poorly installed by the contractor? We had a client with a roof leak in a new tile roof on a new house. The general contractor had lowered the pitch of the roof during construction to save money on the roof trusses. He used an underlayment that was suitable for the steeper roof but hadn’t upgraded the underlayment type to a low slope type when he reduced the roof slope. The roof leaked and had to be removed and the underlayment replaced. This was entirely the contractor’s fault. In another apparent leaky roof case the water stains on the ceiling were not caused by a roof leak but from condensation dripping from pipes that the plumber had neglected to insulate.

The basement walls of a 50 year old building started to leak and the tenant went after the owner who in turn handed the case over to his insurance company. After significant investigation we found the leaks were due to tenant’s own actions. The tenant had hired gardeners to replace the landscape soil next to the building and in doing so the landscapers had removed the waterproofing from the outside of the basement walls. The leaks were real but they were caused by the tenant’s actions. The landscaping company had to pay for the damage and repairs.

Cracked stucco on the outside of a building is most likely the stucco contractor’s responsibility, right? Usually the answer is yes. But in one case the owner had hired a separate contractor to install the flashing at the windows and doors and they had done this work without proper supervision. As a result of the flashing contractor’s poor workmanship, the flashing directed rain water inside the wall, behind the stucco. The water inside the walls caused the wood framing to rot and the building to settle. This in turn caused the stucco to crack. On another case the soil engineer, hired by the owner, misinterpreted the soil report so that the foundations were inadequately designed. The entire building settled causing the stucco to crack. In this case the responsible party was the soils engineer, not the contractor. An experienced expert can often tell from the types of cracks what the cause is likely to be.

The failure of a retaining wall could be due to the contractor reducing the size of the footing, a washout of the soil under the footing due to a plumbing leak, improper soil compaction as required by the soils engineer or a poor design of the wall by the structural engineer. This situation presents one problem with four potential causes and four different responsible parties. This is where the expert must play Sherlock Holmes and solve the mystery of, “The Leaning Retaining Wall”.

The site visit and the expert’s preliminary report will probably raise more questions of cause and responsibility. The owner’s clear cut, black and white case about a bad contractor will be tempered by reality into a case with many shades of grey and you, the intrepid lawyer, will now have to decide what to do next. But, you will have the information needed to decide where to go with it. You will know if the potential damages are worth the effort of taking on the case. You will know what the real issues in the case are. You will know who is likely at fault and if there is a real possibility of recovering damages.

As a smart lawyer, you will be in a good position to go forward if that is the right thing to do. You will understand the case and you will have picked the right expert for the case and one who already understands the case.

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