When defects arise in buildings and industrial facilities, owners sometimes race to repair them. If they wish to preserve warranty or other claims against designers or contractors who may be responsible for the defect, management needs to be mindful of preserving evidence of the defect before ordering repairs. Similarly, design professionals and contractors need to protect their interests when they learn of defect claims.
A recent Texas case (attached) highlights the serious consequences of failing to do so. An owner was notified of an oily substance in a ditch on adjacent property. The owner claimed that the substance was leaking through an expansion joint in its recently expanded facility. The owner asked the designer of the new facility to design a repair, and then demanded that the contractor who built it make expensive repairs under its warranty, using the new design. The contractor told the owner that a repair using a different design was not covered by its warranty. The contractor promptly notified the owner that it wished to inspect the original expansion joint to confirm that its work was done per the plans and specs, but the owner ignored these requests.
The owner hired another contractor to implement the new design that altered the original construction, sued the original contractor, and won a judgment.
The contractor appealed, complaining that the owner’s refusal to allow the contractor to inspect the allegedly defective work before it was altered prevented it from gathering evidence that would have shown the defect was caused by a design problem, not poor construction. The court of appeals threw out the judgment, finding that the contractor was deprived of the opportunity to show that it had complied with the plans and specs, fully develop its defensive theory, conduct its own forensic testing, and fully critique and refute the owner’s experts’ testing.
This case prompts these important practical reminders:
- If you own or manage property with a problem, be sure you preserve physical evidence of the problem before correcting it if possible. To the extent possible, you should notify the potentially responsible parties before testing or making repairs.
If you are a contractor or design professional who thinks a claim may be made against you for building defects, timely demand inspection!
To read the Court of Appeals Opinion, click here.
If you have questions regarding this alert or require assistance related to the issues described,
please contact Ken Alexander (713.226.6614; firstname.lastname@example.org)
Cindy Holub (713.226.6607; email@example.com) or any of our construction practice attorneys.