The Meter is Running
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If construction defects are plentiful, stay level-headed and in contact with your attorney.
AUTHORAdam Leitman Bailey
Boards should be in constant contact with their attorneys and ask for correspondence with the opposing attorney to keep us on our toes.
Adam Leitman Bailey
Adam Leitman Bailey
The client’s tale. The board of managers of a very large new-construction Manhattan condo tried to compel the sponsor-developer of the condo to fix the multitude of construction defects and reimburse the board for expenses that were improperly incurred when the sponsor-developer controlled the board. The sponsor-developer, one of the city’s largest and most active developers, refused to acknowledge the board’s concerns. After years of unsuccessfully trying to get the sponsor-developer to engage in settlement talks with another law firm, the board hired us. The building’s construction defects were complex and required many specialists to fully understand. Professionals were hard to find because no one wanted to cross this powerful sponsor-developer. We compiled the proper team, including international experts, and worked with the architects and engineers to restructure the demands in a cohesive manner, each defect linked to a strong legal argument. Within weeks, the sponsor-developer came to the settlement table.
We negotiated a tolling agreement that included negotiation guidelines to maintain all of the board’s causes of action and keep the negotiations on track. The firm negotiated the complex construction defect issues and improper board expense issues. The intimate understanding of the architectural issues, and how each specific defect represented its own cause of action, helped us prevail. In the end, the settlement yielded millions of dollars in remediation work and a seven-figure cash settlement.
The lawyer’s take. The sponsor-developer responded quickly to our letters and e-mails and continued to meet with us and receive our engineer’s reports. In addition, the sponsor-developer hired its own engineers, who responded to our reports reasonably and listened to the reasons we needed such a high settlement number in addition to the work. Many settlement discussions become litigation because either 1) the attorney does not know the law, 2) the attorney refuses to spend time on the case, or 3) the client directs the lawyer to stall or ignore us. Boards should be in constant contact with their attorneys and ask for correspondence with the opposing attorney to keep us on our toes. Each case will depend on the facts and clients involved, but the board and its attorneys must be at their best.
Case closed. The issue is litigation versus settlement. First, our client avoided years of litigation and an incredible amount of money on legal fees with the possibility of winning but not being able to collect the judgment. Second, some of the claims would be very difficult to prove in a court of law, but we were gambling. The settlement talks could have busted and our clients would have lost precious time needed to get the building fixed and at the same time prove its case.