Trial Win - AAA Arbitration Claim - Sarasota County 

Tampa Partner Stephen Stukey and former Associate Rachel Leach recently won an AAA arbitration claim by regional builder, WCI Communities, Inc. and national homebuilder Lennar Homes, LLC.  After a six-day in-person final hearing in Sarasota County, a three member three-member panel completely exonerated Nova Engineering and Environmental, LLC.

The case centered on a homeowner’s claim of significant construction defects in the foundation of a residence purchased from WCI Communities, LLC ("WCI"), which the homeowner argued must be demolished and rebuilt costing almost $2 million. CSK represented Nova Engineering, hired by builder and general contractor, Lennar Homes, to conduct Quality Control Inspections of the slab’s formwork and reinforcement prior to the concrete pour.to ensure the foundation was able to withstand differential settlement, in which adjacent areas of the foundation settle at different rates, tearing the foundation and making the home unsafe.

Notably, Nova's contract with Lennar Homes was executed before it acquired WCI and became its corporate affiliate. Nova inspected and approved the form work and steel placement four days before the pour.  The County inspector also approved forms and steel after initially rejecting them for having washouts.

Post-construction testing revealed slab deficiencies, leading the homeowners to sue WCI. WCI, in turn, sued Nova, alleging building code violations and breach of a contractual duty to defend and indemnify it under Nova’s agreement with Lennar. WCI claimed to be a third-party beneficiary entitled for indemnitee as an “affiliate” of Lennar Homes.  After 18 months of litigation, WCI refused to settle, and had no other viable parties to contribute to a resolution..

Nova argued:

1. The absence of competent evidence regarding site conditions at the time of Nova’s inspection.

2. Lack of expert testimony to establish a breach of the standard of care by Nova.

3. The County’s subsequent re-inspection and approval of the site conditions.

4. The fact that Nova’s QA/QC inspections were not regulated by the building code.

5. The lack of evidence supporting WCI’s designation as an “affiliate” under the agreement.

At the conclusion of WCI’s case, Nova moved for directed verdict, citing these points, and arguing the unenforceability of the contractual defense and indemnity provisions. The Panel directed Nova to submit a post-argument brief, after which it granted Nova’s motion on all counts.

The client and carrier are thrilled with this outstanding result.