Facts

La Plaza de Cultura y Artes Shell and Core Project was a seismic retrofit and rehabilitation for adaptive re-use of the five-story Vickrey-Brunswig building and the adjacent two-story plaza house located in the historic La Plaza District in Los Angeles. Both buildings, now owned by the County of Los Angeles, were built in the late 1880s of bricks and mortar on timber frames.

The project owner is La Plaza de Cultura y Artes Foundation, a non-profit foundation for the purpose of establishing a Hispanic cultural history museum. The county hired Leonard Madson of Bottega Management to serve as the project manager throughout the project, beginning with the schematic design phase, through design, preconstruction, construction and post construction.

The project was not advertised for public bid. Instead, the county sent out Requests for Proposals to contractors to provide prices. Based upon the plans and specifications developed by the foundation, the county and their consultants, Accent Builders responded and then negotiated a contract price to perform the work.

PLAINTIFF'S CONTENTIONS:
Accent contended that the county failed to properly investigate and plan the project. The county's own expert, Robert Chattel, testified that proper planning for historic renovation projects requires testing and investigation in the design phase, which the county failed to do in spite of specific instructions and directives in the structural portion of the Environmental Impact Report.

There were no exploratory test pits dug to assess the foundation of the building. A wood report assessing the condition of the wood in the building was not disclosed to Accent until after the contract was signed and the work began. When Accent tried to install a man lift, it became apparent the building was too unstable to support one. Accent then discovered the building did not have the foundation beneath it, which was depicted in the plans. Accent recommended suspending the project for redesign of the foundation. The county and Bottega refused and instructed Accent to proceed with construction. The sequence of construction was totally disrupted. The schedule was delayed over one year while the county consultants redesigned the foundation.

Plaintiff claimed the cost of the construction escalated due to the inefficiencies created by proceeding with construction without a foundation in place. Plaintiff contended the project manager refused to approve Accent's requests for the added costs and expense.

Plaintiff claimed that the county failed to properly investigate and prepare the plans and specifications for pricing and construction. The incomplete and inadequate plans caused Accent added costs and damages totaling $5.2 million including its fee.

DEFENDANT'S CONTENTIONS:
The county claimed Accent failed to properly investigate the property when it submitted its price and negotiated the contract with the county. As to the building foundation, the county relied on ground penetrating radar and on existing plans, pre-dating the plans and specifications drafted by the county and its consultants for the project, which showed adequate foundations. Exploratory test pits were unnecessary and would have been impractical and potentially dangerous given the existing state of the building. Portions of the project were delayed while both the county and Accent consultants redesigned the foundation. Accent submitted claims to the county for additional foundation and wood framing work, including a request for additional time for the extra wood framing and foundation tasks. Upon approval of the change orders, the county paid Accent $3,488,699 and granted an additional 210 days to complete the project. However, defendant claimed that it was only at the end of the project that Accent submitted a flurry of additional demands to the county based, in part, on additional delay costs that Accent only then asserted were associated with the out of sequence work.

Defendant also claimed Accent failed to properly manage the construction, and submitted false claims during the course of the project.

Settlement Discussions

In August 2012, after the second mediation, the county made a CCP 998 offer for $1.9 million, to which Accent did not respond and allowed to expire.

Result

Judgment in favor of Accent Builders and against the County of Los Angeles. Plaintiff was awarded $3,738,032 gross, excluding interest, costs and fees.

Other Information

The county's motion for summary judgment was denied. However, it received summary adjudication on Accent's common counts claims. The county's cross-complaint for violations of the False Claims Act was dismissed on demurrer. A motion for a new trial has been heard and is currently under submission. Accent and the county engaged in three separate mediations, all of which failed to resolve the dispute. The first mediation was on May 3, 2012, before Alex Robertson at ADR Services. The second was on June 5, 2012, before Ross Hart at AMCC. The third and final mediation on Dec. 27, 2013, before Ken Gibbs of JAMS, was also unsuccessful. FILING DATE: Sept. 29, 2011.