Damage awards reach $84 million in Shutters at the Beach Hotel construction defect arbitration; Award clears path to bad faith claim against Fireman's Fund Insurance Co.LOS ANGELES--(BUSINESS WIRE)--April 3, 1996--The second in a series of arbitration awards An arbitration award (or arbitral award) is a determination on the merits by an arbitration tribunal in an arbitration, and is analogous to a judgment in a court of law. was issued April 1, 1996 for $37.7 million to the Bankruptcy Estate of Santa Monica Santa Monica (săn`tə mŏn`ĭkə), city (1990 pop. 86,905), Los Angeles co., S Calif., on Santa Monica Bay; inc. 1886. Tourism and retailing are important, and the city has motion-picture, biotechnology, and software industries. Beach Hotel Ltd. (SMBH), the original developer of Santa Monica, Calif.'s luxury Shutters at the Beach Hotel in the longest construction defect arbitration in California history. Lawyers Lee F. Colton and Robert S Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. . Mann, of Los Angeles-based Colton Mann Partnership, represented the SMBH bankruptcy trustee, David Gill, and obtained the award against Fireman's Fund Insurance Co. The April 1 award in Estate of Santa Monica Beach Hotel Ltd. v. Fireman's Insurance Co. (American Arbitration Association The American Arbitration Association (AAA) is a private enterprise in the business of arbitration, and one of several arbitration organizations that administers arbitration proceedings. The AAA also administers mediation and other forms of alternative dispute resolution. Case No. 72 110 1014 90) follows a $47 million award issued in October 1995 against the project's general contractor A general contractor is an organization or individual that contracts with another organization or individual (the owner) for the construction of a building, road or any other execution of work or facility. , Gosnell Builders Corp. (Gosnell) of Phoenix. This brings the total damages awarded to SMBH arising from the hotel's construction to $84 million. Fireman's Fund had issued a $24.8 million performance bond for the project, but refused to perform when Gosnell defaulted. SMBH proved that Fireman's Fund breached its contractual obligation to complete the hotel, now owned and successfully operated by brothers Edward and Thomas Slatkin. Fireman's Fund is a subsidiary of the German firm, Allianz. The official opinion noted: "Not only did (Gosnell) essentially abandon its contractual obligations to the (Owner), but (Fireman's Fund) did as well." Additionally, the opinion said that Fireman's Fund "opted to stare liability in the face, fully cognizant of the germane ger·mane adj. Being both pertinent and fitting. See Synonyms at relevant. [Middle English germain, having the same parents, closely connected; see german2. facts of the situation." "The ruling clears the path to the owner's claim for bad faith against Fireman's Fund," explained Lee F. Colton. "Surety companies rarely face claims of this sort because developers are usually put out of business when the surety fails to complete the project. SMBH refused to let Fireman's Fund walk away from their duty. Fireman's Fund faces substantial punitive damages Monetary compensation awarded to an injured party that goes beyond that which is necessary to compensate the individual for losses and that is intended to punish the wrongdoer. since they bankrupted SMBH." "We anticipate that the damages for bad faith will substantially exceed those awarded to date," said Robert S. Mann, "especially since our client lost his entire personal fortune and has suffered terribly as a result of Fireman's Fund's unconscionable Unusually harsh and shocking to the conscience; that which is so grossly unfair that a court will proscribe it. When a court uses the word unconscionable to describe conduct, it means that the conduct does not conform to the dictates of conscience. failure to live up to its contract." The arbitration hearings commenced in January 1991. To date, there have been 245 hearing days, more than 10,000 exhibits, and hundreds of witnesses. The bad faith claim against Fireman's Fund will begin arbitration June 18, 1996 and it is anticipated that it will be concluded this year. Colton Mann Partnership specializes in complex construction and business litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. . Its partners, Lee F. Colton and Robert S. Mann, together have more than 50 years of combined experience. They have represented some of the largest builders in California and both have prosecuted and defended major business, construction and construction defect lawsuits. CONTACT: Communication Art Forms Kathy Pinckert, 310/836-8355 or Colton Mann Partnership Robert S. Mann, 310/556-1500 |
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