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FIRM RESOLVES LITIGATION OVER HISTORIC SAN FRANCISCO JAPANTOWN PEACE PLAZA


Tharpe & Howell's Construction Defect Practice Group recently resolved litigation over San Francisco's historic Japantown Peace Plaza.

In this very interesting case, the Firm represented a General Contractor who entered into a public works contract with the City and County of San Francisco to renovate the historic Japantown Peace Plaza, an open air plaza located on top of a parking garage in San Francisco. The work involved the construction of a new plaza deck to add hardscape, landscape, and a major water feature to compliment the existing five tier peace pagoda, which was a gift to the City from Japan.

After work on the project was substantially complete, the City complained of water leaks into the parking garage. When our Contractor client was unable to stop the leaking, the City made a claim upon the Contractor’s Surety. A million dollars in repair costs and attorney fees later, the Surety was also unable to stop the leaking.

The litigation involved the City seeking to recover in excess of $2.7 million to perform repairs to stop the leaking, and the Surety seeking just under $1 million for the costs and expenses of attempting the repairs and the associated litigation. On behalf of our Contractor client, the Firm filed cross-complaints against seven Subcontractors who performed various aspects of the waterproofing work.

Upon our involvement, we immediately abstracted over forty thousand documents to determine what really happened. The documents revealed the City’s renovation design, as well as defective construction which had existed since 1967, were the true sources of the leaks. Additionally, we learned that half way through the renovation process, the City, as a political favor to then-Mayor Willie Brown, caused our client to accelerate the construction process, which led to the as-designed waterproofing being compromised. With regard to the Surety, we learned that the actions of the Surety lacked the requisite good faith by failing to adequately investigate the City’s claims and our client’s (its insureds) defenses, and that many of their actions were carried out on a "volunteer" basis.

Being forced to litigate, Tharpe and Howell executed a discovery strategy which led to our development of a very strong case against the City. We discovered how the political cronyism between the Mayor’s office and the Department of Public Works led to mismanagement of the construction project, and how this mismanagement led to design errors which caused the leaking. We also discovered the plaza had been leaking since it was constructed thirty years earlier and that prior attempts to repair the leaking failed, none of which was disclosed to our client. With respect to the Surety, we were able to prove that the claims representative improperly delegated investigation of the claim to certain forensic experts who were either unqualified, or failed to perform a proper investigation, or both.

With less than 30 days before the initial trial date, and with the hard-work of mediator George Calkins, we reached a global settlement that was within 10% of the target settlement amount previously established.

Like any case, this one had some ironic moments; the most obvious being the hard-fought litigation that took place over the Japanese “Peace Plaza.” Another arose when a repair concept involved removing and replacing certain Cherry Blossom Trees, which we were advised was forbidden by the Japanese culture (finding an expert to testify on this issue was a bit difficult). Lastly, due to the complexity of the construction, the source of water for many of the leaks was never determined, and probably will never be. In the end, the Firm achieved a great result for its Contractor client - after a hard fought battle.

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Related Attorney(s):
Robert M. Freedman

Related Practice Area(s):
Real Estate and Construction Law

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