ORANGE COUNTY

Construction Law Attorneys

What's the Difference Between Construction Defects and Resulting Damage from Construction Defects?

Clients all call our offices claiming they have construction defects and want to sue a contractor. Construction defects are poor or bad workmanship, i.e. the door will not close because they put the jams in wrong. There is no insurance coverage for construction defects. Why is that important to know? Because if a contractor is a fly by night operation even if you get a judgment you may be faced with collecting a small amount from his/her bond but not being able to collect the whole amount because either the contractor does not have assets or he has been in this rodeo before and has hidden all his assets so well it will be impossible to collect from them.

That brings us back to resulting damage from construction defects. If a construction defect leads to or could lead to resulting damage then the contractor's General Liability Insurance Company normally will defend the action on the contractor's behalf. They do so with what is called a "reservation of rights." That means they pay for the attorney to defend the contractor but are not agreeing they have liability under the policy. What good does that do you, if they are paying for the contractor's attorney, that means he is not paying his attorney and you are paying yours. The good news is, normally the insurance company if resulting damage can be proven will enter into a settlement of your construction defect and resulting damage claims. Why would they do that if they don't think they have liability? They do it for several reasons, one, they may have liability if the contractor performed work that did result in damages to some other work and two they are paying attorneys fees and costs which they do not want to incur to later at trial have a judgment rendered against their insured which they might then be liable for in addition to the fees and costs they incurred in defending the contractor.

The big question is what are resulting damages and how to you substantiate them? Resulting damages are ones that result from the work of the contractor. For example, if the contractor installs drywall in your home and during the installation you notice you can see tape marks after the wall is painted, that is just a construction defect, but if the contractor punches a small hole in a water pipe in the wall and it starts dripping and the drywall gets wet and moldy, that is a resulting damage. A good expert can find the nexus between poor construction and resulting damage to support a Negligent Construction Defect With Resulting Damage claim. Once the insurance company becomes involved you can ask them to mediate the claims and often arrive at an early settlement without the necessity of spending countless thousands of dollars in legal fees to get a judgment you might never be able to collect.

Make sure you consult an attorney who knows construction law before making any claims.