Recently, the legal counsel at one of our nation’s leading surety companies, a longstanding client of Guardian Group, Inc., requested expert litigation support from our Surety Group. Their bond covered site construction and underground utilities for a large shopping center, and our client knew Guardian’s staff includes not only civil engineers with extensive experience in evaluating site design and utility projects, but experienced, former surety claim personnel who possess the credibility and credentials to testify on proper claim investigations and procedures.
ABOUT THE CLAIM/CASE
The Owner, Developer and General Contractor on the shopping center brought suit against the site subcontractor and its surety two years after the shopping center’s completion. The lawsuit alleged that improperly constructed drainage was causing ponding throughout the parking lot and had resulted in damage to the underground utilities. The site subcontractor had engaged his own expert to review the plans and specifications. That expert concluded that there were design defects in the drain plans. His argument was that the site subcontractor built the project according to provided plans. He reasoned it was the architect’s job to properly design the project and not the site subcontractor’s responsibility.
The surety had relied on the principal’s engineering expert, had denied the claim, and was subsequently sued for breach of its bond and for bad faith. The suit demanded that the shopping center’s parking lot be removed and regraded and also that the damaged underground utilities be replaced or repaired. The total estimated cost for the repairs stood in excess of $5M.
ABOUT OUR LITIGATION SUPPORT & EXPERT TESTIMONY
Surety’s counsel engaged Guardian to provide litigation support and expert witness testimony in support of the principal’s position and to provide expert testimony that the surety’s claim denial was proper and that the installation conformed with the original design. Collaborating on case strategy with counsel, Guardian’s engineers interviewed the principal’s project team, including the case experts the surety had relied on, evaluated the quality of the work, reviewed the surety’s claim file and interviewed the claim handler. Ultimately, the case was bifurcated. On the “Bad Faith” count, the court agreed with Guardian’s expert testimony in determining that the surety’s denial was perfectly legitimate. The judge rendered a directed verdict dismissing the bad faith count. The remaining issues were negotiated out of court, between the subcontractor, his General Liability carrier, the developer and the owner, with the financial participation of the architect. Our surety client faced no costs.
ABOUT GUARDIAN GROUP, INC.
Sureties and their counsel often require more than engineering expertise. They need even more than claims handling experience. They need the unique combination of the two. For nearly 30 years, Guardian Group, Inc.has rallied on behalf of sureties and their counsel, efficiently investigating cases, claims and issues and providing the litigation support and expert testimony they need to mitigate losses and protect their bottom-lines.