Esquire Construction Litigation Solutions (ECLS)

Committed to the Paulson innovative tradition 20 years of experience Unique solutions to manage complex CD litigation. 14 West Coast offices. 50 offices throughout the United States. Largest full-service construction litigation support company in the nation.

Strong Foundations

Winning Team!

Construction Defect Overview

• History of CD and how it started• CD litigation is case driven• About 45% of CD cases go to depositions• Average case will last between 18-24 months• Currently over 1300 active cases• Track number of cases to forecast future revenue• We average about 400 new cases a year

Our Regional CD Team

• Djuana

• Stacey

• Doug

• Christiaan

• Tracy

• Emidia

• Kevin

• Melanie

Commercial Construction Defect

Commercial Construction Defect

• Plaintiff usually represents building owner bringing an action against contractors, sub contractors, banks etc

• Schools, hospitals, shopping centers, office buildings, hotels etc.

• Cases can be structural or financial

The Role of the Insurance Carrier

The Role of the Insurance Carrier

• Developer– Self insured– Additional Insurance

Doug DJ needs to help on this one

Phases of CD Litigation

Phases of CD Litigation

• In most jurisdictions CD cases are deemed by the court to be complex litigation due to the number of litigants involved

Phases of CD Litigation• The court asks that all litigants create a CMO to

be approved by the court

• The CMO designates the following– Appointment of Special Master or Mediator– A timeline for the life of the case– Designation of independent depository– Designation of deposition firm– Discovery protocols

Phases of CD Litigation• Discovery period

– documents are deposited and reviewed by all parties

• Mediations – determine case issues and any possible settlements

• Depositions of Home Owners

• Depositions of PMK’s

• Depositions of Experts

• Settlement or Trial

Prospecting for CD Cases

Prospecting for CD Case• Market Drivers

– Key plaintiff and defense firms that specialize in CD

• Industry issues– Chinese Dry Wall– Material Defects (plumbing, roofing materials)– Environmental

• Toxic soil • Highway construction

Prospecting for Clients• Plaintiff firms that market to home owners

• Law firms that represent HOA’s

• Defense firms that represent developers or commercial construction firms

• Specialty insurance carriers that underwrite contractors or sub-contractors

Market Trends

Market Trends• 2009 equal to previous two years• When home equity drops owners tend to look for

other ways to increase value• Current home building decline should not result in

reduced CD litigation for another 3-5 years• Comercial CD will continue to grow

– LV example

• California CD business model is moving east – Florida, Texas

.

WHAT IS A

CONSTRUCTION DEFECT?

Samples of Construction Defects

Foundation, Structural, Architectural, Concrete, Windows

Soils, Roofing, Insulation, Grading & Paving, Electric, Trim

Heating, Doors, Cabinets, Toilets, Showers, Bathtubs, Air

Conditioning, Fireplaces, Flashing, Stucco, Siding, Drywall,

Floor Tiles, Plumbing, Eaves, Street Lamps, Garbage

Disposals, Kitchen Counters, Closets, Stairs, Railings, Fire

Alarms, Views, Sprinklers, Irrigation, Carpeting, Painting,

Landscaping, Ovens, Dishwashers, Cabinets, Countertops,

Everything right down to the Kitchen Sink.

4 Main Categories of Construction Defects

• Design Deficiencies• Architectural

• Material Deficiencies• Stucco, Deteriorating Wood Trim, Drywall, Siding

• Construction Deficiencies• Improperly Installed Windows, Plumbing, Roofs

• Subsurface/Geotechnical Deficiencies• Soils, Foundation

WHAT IS

CONSTRUCTION DEFECT LITIGATION?

Types of Construction Defect Litigation

• Residential• Single Family Homes (SFH)

• Individual Homeowner Claims

• Homeowners Associations (HOA’s)• HOA will bring a claim on behalf of Homeowners

• Class Actions• Allegations involving the exact same defects within the development

• Commercial CD• Structural• Financial

Who Are the Major Players in a CD Lawsuit?

• Individual Homeowners • Homeowners Associations (HOA’S)• Developers• General Contractors• Plaintiff Firms• Developer/General Contractor Defense Firms• Subcontractors (3rd)Party Defendants• Insurance Carriers

THE COMPLAINT

• Plaintiff’s file a lawsuit against the Developer• Developer files a Countersuit against the Subcontractors

(3rd Party Defendants)• Developer and Subcontractors are typically all insured

for Construction Defect Litigation• Most Developers have a Self-Insured Retention (SIR) or

deductible which must be met before the Insurance Carriers will contribute financially with the litigation

• Each Insurance Carrier is represented by Counsel• Most Developers have Additional Insured Endorsements

(AI’S) with the Subcontractors

Depository Basics

When First Deposit is Received

• Check the Notice of Compliance and verify documents have been deposited at Esquire Deposition Solutions or Paulson Reporting and verify our correct address

• Check for a Case Management Order (CMO) & Service List (SL).

CMO Stipulations • Document Depository

Document depository shall be maintained at the offices of:

Name: Esquire Deposition Solutions

Address:

Phone No:

Fax No:

Our firm needs to be listed on the CMO as the official document depository

CMO Stipulations Cont’d• Document Production

CMO should state the manner in which documents are to be deposited

All pages should be bates labeled with a prefix of the party’s choosing followed by a six digit number.

i.e.: IVY 000001

What format are the documents to be deposited in

(Hard Copy, Electronic etc.)

Notice of ComplianceStandard Format includes • Depositing firm, attorney’s name and address• Name of depositing party

– (Plaintiff, Dev, or Sub)

• Case name and number• Title of deposit

– (i.e. Job file, Expert file, Defect list, Cost of repair. Etc.)

• Esquire name and address• Bates range and if applicable a detailed index

Case Binders • Master Binder: Kept with coordinators (Exceptions in some offices)

• sign-in sheet for viewing documents• index of all deposits • document request forms• a case status report• check off-list• CMO, SL• copy of all Notices for the case

• Depository Binder: Kept with the documents for the clients

• Pleading Binder: Kept with the documents for the clients

• Depository Order Binder: Kept with production of all hard copy orders

New Case Memo is sent out to all other offices

Making a Deposit• All notices shall be date stamped when received *Always*• Deposit is prepared

– For hard copy deposits page are paginated

– For electronic deposits (CD or DVD) the first and last number is checked.

– If there are missing page/s then letter is sent out.

• Coordinators ensure any stipulation the CMO states for deposits

• NOC is scanned to the “p” drive. – An extra copy of the notice is printed for the Depository Binder

• Deposit is entered into Solaria and notice is attached to corresponding job number.

Case Reports via Intranet

• All ACTIVE depository cases in all offices.

• Report includes;– All parties that have deposited documents

– Date of deposit

– Document description including to bates range, hard copy, size or electronic

Closing a Case

After notification is received via settlement agreement, signature pages or word of mouth;

1) Confirm with Plaintiff and Defense that case is closed

2) Send out a “closed case letter” to all parties indicating our understanding the case has settled.

- includes an option for document disposal or pick up and a specified date to contact us by notifying us of their intentions regarding the documents in the depository. Storage fees may apply.

Scheduling for Construction Defect

Cases

How it all Begins

Case is set up in depository and once the first mediation or deposition is set, scheduling will:

Case Data Sheet Reporter Sheet Exhibit Sheets Enter mediation/deposition in Solaria Set up case in EsquireConnect (No more faxing!)

Scheduling for Construction Defect Cases

Create a case folder with the Service List and Caption - Put in original Service list and any updated lists that you receive. Write the date at the top

Print out reporter sheet and put in case folder

Put depositions in Solaria database

Create Shared Calendar in ECN & send out invitations 

Deponent Sheets: Homeowner, PMK/Percipient Witness and Expert

 *Standard Stipulation included in Reporter File - Give to lead Reporter.

 Date (September 18, 2009)CASE NAME: VASQUEZ vs. OTAY PROJECTCASE NUMBER: 98266

New Case Set-Up

  Plaintiff vs. Defendant

 Enclosed in this file you will find the following:

 ______ Memos pertaining to case

(Most current on top) 

______ Master Service List 

______ Case Caption 

______ Standing Orders  

______ Spellings

Reporter Sheet

NOTE TO LEAD REPORTER:  

IT IS YOUR RESPONSIBILITY TO INCLUDE IN THIS FILE THE FOLLOWING: 

_____ CAPTION (TO BE USED ON TRANSCRIPT COVER) 

_____ EXHIBIT INDEX PAGE WITH SHORTENED CAPTION 

_____ STANDARD STIPULATION WITH SHORTENED CAPTION 

_____ A MEMO EXPLAINING HOW THEY WANT THE EXHIBITS TRACKED 

_____ ANY STANDING ORDERS 

Please also include any other information another reporter may need to maintain continuity between witnesses. REMEMBER: Everything must be accurate and the same.

Reporter Sheet

GREEN vs. HENRY CONSTRUCTION EXPERT – TRACK 3

 REPORTERS: PLEASE WRITE CLEARLY AND GIVE US AS MUCH INFORMATION AS YOU CAN!!!

GIVE FULL DESIGNATIONS - (i.e. Plaintiff soils Expert) 

DATE  TIME DEPONENT NAME PARTY & DESIGNATION EXHIBIT NUMBERS REP. # TURNED IN?                                                                                                                        

Exhibit Sheet

Enter in Solaria

PREVIOUS METHOD OF MAINTAINING A CD CASE:

Enter in all depositions into Microsoft Access, viewable on-line

Fax out changes to all parties regarding the following days deposition

Call the setting party to confirm the schedule depositions for the following week

After confirming fax to all parties on the service list updated schedule

If the fax did not go through, would re-send or call and have client check their fax and attempt to re-send again

How does the client benefit from EsquireConnect?

Schedule, reschedule or cancel a deposition in a minute or less

Recall previously used information instead of retyping it each time

Share one calendar with a scheduling team, and still track who scheduled what, and when

Easily view how many times a deposition was rescheduled

Attach a deposition notice to the setting so that everything is taken care of at once

Share a case calendar with others on the team, or even opposing counsel, so that you can coordinate calendars more easily

Receive email notification of any settings, changes, cancellations or postponements

Calendar and GM decide which case has good visibility and good relationship with the main setting firm.

Create an email listing of Service List attorneys along with those responsible for setting depositions in the case or persons requiring access to the Case Calendar

Send out an email to all those explaining ECN

Log on to ECN as Case Administrator (username & passwords supplied)

Create a shared calendar for the case case name must be identical to Solaria case

Input users to the shared calendar  Users will need to create an ECN account & join shared calendar  Users defaulted NOT to receive email notifications unless requestedFollow up with all users

Need to be prompted to accept ECN invitation May need some training and support to get started

Generate a future settings report from Solaria and input to ECN by “Acting As” that clientStay in contact with users and gather feedback.Email users weekly the Future Schedule

Construction Defect Rates

Construction Defect Rates

• Construction Defect rate structure • Construction Defect rates vs. Regular rates• How are rates applied?• General rate protocol in CD cases• San Diego CD Standard Billing protocol• Costa Mesa Standard Billing protocol• Billing the Insurance Companies directly

Construction defect rate schedule for a determined market is not always the same rates applied to regular case because a construction defect case will certainly have:

o Complex litigationo Several Partieso Multiple deponentso Voluminous Exhibits

       Therefore, rates must be tailored accordingly

Regular vs. Construction Defect rate structures 

How are rates applied?Rates are applied according to the CMO. If there are no special billing provisions detailed in the CMO, or special rates provided for the case then billing is based according to the territory rates and protocols.

General rate protocol in CD casesMost territories apply the general billing rule where the noticing attorney bears the cost of the Original transcript.  However, it is not uncommon to see the following billing protocols:a) Original transcript cost is split amongst all parties ordering a copy

b) Original transcript cost split amongst all parties present at the deposition

c) Original transcript split by all parties questioning the deponent

• San Diego CD Standard Billing protocol

In San Diego, the CD rates are established on a sliding scale. The cost of the original transcript is included on the copy page rate. The more copies ordered, the lower we bill for the original

• Costa Mesa Standard Billing protocol?Costa Mesa bills the noticing attorney for the O&1. The noticing attorney is usually the attorney who initiated the questioning.

• Billing the Insurance Companies directlyOnce we obtain the insurance information in writing from the client, we can bill the insurance carriers directly. The insurance information should be entered in Solaria including the adjuster’s name, address, claim number, insurer’s name etc and any special instructions or references passed on to our billing department.

Access to

Case DocumentsOn-Line

Online Depository• If a client expresses interest in an electronic or online

depository please contact Marty Steinberg or Doug Jarvis

• Several options for online depositories – For shared depositories - IPRO or CaseShare

• Very important to establish the clients needs when determining which online option is the best solution - Do they wish to code their documents?- Will files be accessible to all parties or only one side?- Is cost an issue?

Online Depository• IPRO, using the Inet server

– hosted by ELS in secured Data Center in San Diego – all of the data maintained by us – basic viewer and search, inexpensive

• IPRO allows clients to;– view, download and print documents– perform basic text and bates number searches.

• CaseShare – third-party hosted platform– customized to fit a clients, very robust – full fielded and full text search capabilities– more costly

• CaseShare will allow clients to;– code data, redact images, and review documents before making them

available to all parties.

Strong Foundations

Winning Team!