Dallas Partner Soña Garcia’s Successful Defense Limits Arbitration Award to 3% of Damages Sought

May 2023

Dallas Partner Soña Garcia recently tried a construction defect claim in a week-long arbitration in Oklahoma City, Oklahoma, defending a national glass and glazing company.

The plaintiff, a local real estate developer, contracted with a general contractor ("the GC") to build a strip center just north of Oklahoma City. The firm's client then contracted with the GC to install glass storefronts on the project. During construction, the developer’s son interfered with several trades, demanding that the glass company utilize a specific, less expensive caulking in the storefront installation. Following construction, the project experienced water intrusion through the glass storefronts and also from roof and wall penetrations. Gordon & Rees' client performed warranty work, taking out the entire storefront system and re-installing it with the preferred caulking. After completion of this warranty work, the storefront system passed the industry standard water tests, but the project still experienced water intrusion. The developer filed suit against the GC for breach of contract, breach of warranty, and negligence. The GC then moved the case to arbitration and sued its sub-contractors, including Gordon & Rees' client.

The developer argued at trial that, although the storefront system passed the industry standard tests performed by Gordon & Rees' client and its own experts, water was still infiltrating the system. The developer’s experts testified that the system was defective because he could force the storefront system to fail by overwhelming the sills with water. Notably, the developer’s experts failed to evaluate any other potential causes of water intrusion. 

At trial, the developer sought $1.3 million in construction costs, $300,000 in repair and mitigation costs, $475,000 in lost rent, $300,000 for costs to complete in-scope construction work, and nearly $250,000 in attorneys’ fees and arbitration costs. The developer sought an award of more than $2.3 million in damages, of which nearly $300,000 was related to the storefront system. Because the arbitration panel was persuaded by the defense arguments, the developer was awarded a total of $25,000, with Gordon & Rees' client owing only $8000.