Mediation Yields Favorable Settlement

Our client was a real estate developer and owner. A large new development was constructed immediately adjacent to a downtown office building owned by our client. The construction included a large excavation for a multi-story underground parking garage. As a result of the excavation, our client’s building was destabilized, damaged structurally, and had to be evacuated. We filed suit against the excavation and construction firm and the insurer. All parties agreed to mediate the dispute before a mutually agreed-upon professional mediator. Although there was little local legal precedent on point, after thorough legal research in the law of several jurisdictions which had decided similar matters, we presented arguments that the excavation and construction firm was liable under a legal theory of strict liability and that the earth movement exclusion was applicable only to natural earth movement, e.g., earthquake, and not to manmade earth movement. With the assistance of the mediator, the case was settled upon very favorable terms for our client, including the repair and restoration of the building, compensation for lost rental revenues, and compensation for other expenses.