Owner of a commercial plaza hires a contractor who engages a plumber who gets his lines crossed. Several years later after the Owner has sold the property and a second tenant has moved into the location, the problem is discovered.
No one likes to get stuck with the loss. So, the first Landlord figures that he should not have to pay the entire claim himself. In fact, he did nothing wrong. So, he gets to sue the first and second tenants for contribution. The second tenant did nothing wrong, he was a victim as well. So, he sues the first tenant. Remember that it was the first tenant that started this whole fiasco in the first place.
The first tenant sues his contractor. The contractor sues his sub-contractor. The sub-contractor sues the plumber that he hired. Now, all parties have to determine whether they were covered by insurance at the time of the loss. If so, then their respective insurance companies will be obligated to take over the defense of their claims and respond to any losses. Contractually, liability goes back up the chain starting with the plumber who got his pipes crossed. And, assuming that there is some insurance somewhere, the first plaza owner will find that he has recovered his loss.
One more little wrinkle! Just to make things a little more complicated, but this is really what happens, don’t forget about the City inspector. It was the inspector who looked in the open pit, saw the pipes, approved the connection and signed off on the inspection. Is there any liability here? You bet! Courts frequently will assess 50% of the liability against the city in such instances.
The problem is that the court date and the decision of the Judge was probably 4 or 5 years after the current owner paid the special tax assessment. The costs to just about everybody would be measured in the thousands.
The costs to clean up the legal fees afterwards would easily exceed the costs to clean up the noxious and deleterious waste from the toilets in the first place.
I think that there’s probably a good metaphor here but I’ll leave that to everyone’s imagination.
Brian Madigan LL.B., Broker