Facts

The home solar water heating system of an Oregon Mutual Insurance Co.'s insured failed. In 2009, during a remodel of the insured residence, defendant contractor Greg Moore Construction Inc., or its subcontractor, replaced the copper plumbing of the solar water heating system with plastic PEX plumbing.

PLAINTIFF'S CONTENTIONS: In 2013, the solar water heating system failed and caused extensive water damage amounting to $397,607. Plaintiff developed its theory of the failure with the assistance of engineering and plumbing experts.

Plaintiff contended that defendant and its subcontractors replaced the copper plumbing in the solar water heating system during the 2009 remodel of the insured residence, as evidenced by date codes on the pipe. The PEX plumbing was not rated to handle the high temperature levels produced by the solar water heating system. The PEX plumbing failed because of continuous exposure to high temperature water.

Plaintiff claimed negligence and breach of contract.

Plaintiff was granted a motion in limine invalidating defendant's form clause because of its vague language and because it was contrary to public policy. Plaintiff was also granted a motion in limine precluding defendant's argument that it was not liable for the actions of its subcontractors, as California case law holds that a general contractor has a non-delegable duty to certify the work of its subcontractors.

DEFENDANT'S CONTENTIONS: Defendant claimed that no general contractor liability, for the acts of its subcontractors, contractual limitation on damages.

Defendant denied liability on both legal and factual grounds. Defendant contended that a form clause in its contract with the insured limited its liability to $20,000 for any damage arising from its work. Defense contended that the PEX plumbing must have been installed by a subcontractor, and as general contractor, it was not liable for this act of its subcontractor.

Insurer

United Fire Group

Settlement Discussions

Defendant offered $10,000 up through the date of the mandatory mediation. Defendant's highest offer before trial was $150,000.

Damages

Extensive water damage to residence, loss of contents, additional living expenses

Result

The jury reached a verdict in favor of plaintiff and awarded plaintiff its full damages in the amount of $397,607.

Other Information

Following an offset of $67,500 obtained through settlement with the plumbing contractor (unopposed by the general contractor) and the court's award of interest and costs, the final judgment against defendant amounted to $429,606. According to plaintiff, total recovery on its $397,607 in damages was $497,106, representing a 125 percent recovery on the claim.

Deliberation

five hours

Poll

10-2

Length

two weeks