The following is an excerpt from an Interface Consulting work product issued for use in litigation, arbitration, or mediation (dispute resolution). Names, dates, and other information has been modified for client confidentiality purposes.

Hotel "Leaky Building" Dispute
Technical and Damage Assessment
CBR, Inc. v. AMB Corporation Litigation

I. Overview of the Project and Dispute

CBR, Inc. (CBRI), retained Beachside Architects, Inc., as its architect to design a 690-room convention center/hotel complex known as the Sandy Beach Hotel (Hotel) in Miami Beach, Florida. CBRI then contracted with AMB Corporation (AMB) on or about September 20, 1996, to construct the Hotel. AMB’s contracts with CBRI required them to act as Construction Manager, as well as General Contractor, for the entire project. AMB substantially completed construction activities on or about December 23, 1998, with the Hotel opening the next day, December 24, 1998. The relationship between the parties is illustrated below.

 

Relationship between the Parties

 

In early 2002, CBRI discovered certain defects in the construction of the exterior walls of....

CBRI rejected AMB’s inadequate remedy. After AMB’s refusal to commence appropriate repair of the failed stucco system that caused the water intrusion problems, CBRI retained a general contractor to perform the repair....

…CBRI discovered additional defects in....

 

II. Summary of Opinions

Based on Interface Consulting’s review of certain project documents as listed in Exhibit A; our education and training; and our extensive experience in contracting for construction services, as well as executing and administering construction projects; we conclude the following:

• AMB failed to properly install the “V” control joint reveals, as they were not constructed in accordance with the requirements of the contract....

• AMB failed to properly prepare the substrate for the stucco....

• AMB failed to properly seal windows around the perimeters, as they were not sealed according to the requirements of the plans and specifications....

• AMB failed to....

• AMB knew that water was intruding into the building due to the stucco work and....

• CBRI acted appropriately in not accepting the inadequate proposal of AMB to remedy the leaking reveals....

• AMB is obligated to reimburse CBRI an amount of money equal to....

 

III. Discussion of Observations and Conclusions

On March 1, 2002, Mr. Alan DeSoto with ACE Engineering, Inc., issued a report titled Limited Water Intrusion Study on the Sandy Beach Hotel. In this report, he concludes that most of the water intrusion problems with the building resulted from defects with the installation of the....

III.A.    Notification to AMB of Certain Defects

The issues with the installation of the stucco, “V” control joints, and seals around the perimeters of the windows had developed during construction, as the water intrusion was caused by faulty construction....

III.B.    Improper Installation of “V” Control Joint Reveals

Mr. DeSoto of ACE Engineering, Inc., conducted water leak tests and confirmed that water was indeed entering the Hotel through....

Provided below are two (2) pictures taken at the Hotel showing the “V” control joint reveals improperly installed by AMB. These pictures are typical of the defective workmanship AMB provided in installing the “V” control joint reveals throughout the Hotel.

 

 

…

III.C. Improper Installation of the Stucco on the Exterior Walls of the Hotel

…These pictures are typical of the defective workmanship AMB employed when it failed in providing an adequate substrate on which the stucco was to be applied.

 

 

…

III.D.    Defective Construction Discovered During Water Intrusion Testing

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III.D.1. Faulty Caulking/Sealing of Window Perimeters

…

III.D.2. Faulty Application of Topping on Balconies

…

III.E. Other Issues that Resulted from AMB’s Defective Work

Approximately 300 hotel rooms had suffered water intrusion, resulting in damages to those rooms....

III.E.1. Carpeting and Draperies Damage

…

III.E.2. Lost Revenue

…

 

IV. Grounds and Basis of Opinions

To formulate this Opinion, Interface Consulting relied on the project documentation relating to this matter, observations we made during several site inspections, our education, and our experience in the construction industry. We have interviewed....

In addition to the above, Interface Consulting’s opinions are based on the inspection work....

IV.A. AMB Failed to Supervise and Coordinate Its Subcontractors

…

IV.B. AMB Failed to Perform in Accordance with the Highest Professional Standards

…

 

V. Damages

V.A. CBRI Is Entitled to Recover Damages from AMB

CBRI provided notice to AMB that the water was intruding into the Hotel. AMB proposed an inadequate remedy....

V.B. Quantification of Damages

We have reviewed the cost of the repair work required to correct the AMB defects, and the costs that resulted from the damage, and determined that CBRI’s costs to remedy the defective work of AMB are reasonable and necessary. 

CBRI is due at least…, as summarized below.

CBRI Damages

 

V.B.1. Remediation Costs

…

V.B.2. Lost Revenue Costs

...CBRI’s lost revenue costs are summarized below:

 

 

 

…

V.B.3. Drapery and Carpet Replacement Costs

…

 

VI. Signature

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VII. Exhibits

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