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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.

 

The Lakes at Sanford and High End Properties v. Fallbrook, Inc.

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I. Introduction

I.A. Project Background

On or about October 25, 1999, The Lakes at Sanford, L.P., c/o High End Properties, Inc. (HEP), entered into an agreement with Fallbrook, Inc. (Fallbrook), to perform an expansion study at The Lakes at Sanford. On or about April 24, 2001, Fallbrook and HEP executed a consulting agreement to provide site planning, architectural concepts, and schematic sketches for The Lakes at Sanford expansion. Then, on or about October 1, 2001, Change Order No. 1 was executed that provided for the design of The Lakes at Sanford improvements, including the construction of an ice skating rink (Project).

Prior to the construction of the expansion of The Lakes at Sanford, HEP had constructed an ice rink at Hasselback Property (Hasselback) in Rose, Texas. The Lakes at Sanford was to have a similar ice rink constructed there as well. The design/construction team for the ice rink at Hasselback included....

Regarding the expansion of The Lakes at Sanford, other than the ice skating rink (Ice Rink), the project scope was to include a major expansion of the mall and other retail facilities. As such, HEP executed Change Order No. 1 with Fallbrook and recommended Fallbrook retain the same team that designed and built the Hasselback ice rink. That design team included Jackson Architects (Jackson), to design the Ice Rink; Mattie Design Inc. (MDI), to design the mechanical system for the Ice Rink; Hail Technologies (Hail), to design and install the Ice Rink refrigeration system; and Waller Cooling (Waller), to design and install the desiccant dehumidification system. Skating Management Corporation (SMC) was also retained to consult with the design team.

The construction of the Project, though not executed as a design-build contract, was unconventional at most. Both Hail and Waller were heavily involved in the selection of equipment prior to the execution of the general contract. Both Jackson and MDI claim that Hail and Waller provided technical specifications for their respective equipment.

As such, the relationships between the parties crossed as shown below.

 

…HEP filed suit against Fallbrook and others alleging design defects, negligent construction, and defective materials and equipment, as well as negligent engineering services in connection with the design and construction of the indoor National Hockey League-sized ice skating rink located at The Lakes at Sanford.

HEP tasked the architectural firm Doyle & Sons to prepare an Ice Rink Remediation package for the Ice Rink. This remediation package was competitively bid at a proposed cost of $2,540,046. In addition to the cost of the remediation of the Ice Rink, HEP has alleged other economic damages in its lawsuit.

I have summarized HEP’s listed economic damages as follows....

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II. Summary of Opinions

  • Fallbrook was not responsible for the design of the Ice Rink refrigeration....
  • Fallbrook relied upon MDI, Jackson, Hail, and Waller to perform their duties and responsibilities correctly....
  • Fallbrook was never informed during the design and construction processes that....
  • HEP is not entitled to alleged economic damages in excess of....
  • HEP is not entitled to recover damages from Fallbrook as a result of....
 

III. Discussion of Opinions

III.A.   Discussion of Work Scopes

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III.A.1. Fallbrook Consulting Agreements

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III.A.2. MDI Mechanical Fee Proposal

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III.A.3. William Jackson Architectural Proposal

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III.A.4. Discussions Regarding Hail’s Actions

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III.A.5. Discussions Regarding Waller’s Actions

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III.A.6. Rink Management Service’s Development Consulting Agreement

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III.A.7. Gill Construction Contract

On or about…, Gill was awarded a contract for the construction of the Project including the Ice Rink. The contract was based on the design of Fallbrook and its ice rink design consultants....

III.B.   Discussion of the Design Process

Based on communications between the design team and fabricators of the ice rink equipment, it is clear that, throughout the design process and the award of the construction contract with Gill, the ice rink system was to be a design-build delivery system....

III.C.   Discussion of the CR Engineering’s Response

Even though Mr. Ryan indicated that Fallbrook appears to have responsibility for “these functions under its contract,” he concludes that “Fallbrook is responsible for the damages suffered by the Mall owner.” Mr. Ryan cites no documentation that places blame for deficiencies on Fallbrook, nor does he cite what proper standard of care for services Fallbrook failed to meet....

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IV. Discussion of Economic Damages

As shown in the table on page 5, HEP has claimed in excess of $5.5 million in economic damages as a result of alleged problems with the Ice Rink at The Lakes at Sanford. It has claimed (1) over $4 million in remediation costs; (2) over $250,000 in excess electric costs; (3) over $240,000 in increased maintenance costs; (4) over $350,000 in lost profits; and (5) over $630,000 in legal, design, and/or expert consultant costs. These alleged economic damages are through....

It is noted that Mr. Ryan failed to justify HEP’s alleged damages in excess of $5.5 million. He did, however, claim different damage values for the replacement of the refrigeration and dehumidification systems, and those will be discussed in this section.

As for the largest cost estimate produced by HEP, the remediation construction of the Ice Rink, it has not been determined whether all of the proposed construction is necessary. There is insufficient documentation to justify whether the desiccant dehumidification system has to be removed and replaced or whether six (6) rooftop HVAC units should be added. Mr. Ryan has also recommended the replacement of the six (6) rooftop HVAC units.

The associated work involving demolition and reconstruction of the existing equipment spaces has also not been determined necessary. Additionally....

I have included a table describing the range of costs Mr. Ryan alleges are the damages HEP may suffer as a result of the faulty design of the Ice Rink systems. As he failed to detail and/or support these alleged costs, I will not discuss them, but I reserve my rights to re-evaluate them if I receive additional information.

 

Summary of Ryan’s Alleged Damages

 

In summary…

 

 

V. Conclusion

In conclusion, Fallbrook was not....

 

VI. Signature

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VII. Exhibits

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