On par with rarity of the collapse of a high-rise building in the US, an unprecedented $1 billion settlement agreement was recently presented to the court presiding over the property, personal injury and wrongful death claims relating to the Champlain Tower South collapse.  Who contributed and the amounts they agreed to pay may surprise you.

 A.   The Settling Parties

The biggest contributors towards settlement are not who you might think they are or should be. As a 40+ year old building, the statute of repose had long ago cut off liability for the contractors and design professionals involved in the construction of the property. Instead, the security contractor retained by the condominium association and the contractors and design professionals involved in the construction of a nearby property contributed over 80% of $1 billion settlement fund.  Among the larger contributors to the settlement fund were the following parties.

1. Securitas Security Services (Securitas) contributed an astounding $517.5 million towards settlement, or slightly over half the total settlement amount. Plaintiffs alleged that Securitas failed to activate an “all-call alarm” after the pool deck collapsed into the underground parking garage, about 7 minutes before the mid- and ocean-front sections of the south tower collapsed. Although Securitas did not install or maintain the alarm system, it provided staff to operate it.
2. Entities associated with the development of an adjacent condominium high-rise condominium building, 87 Park, the construction of which Plaintiffs alleged contributed to the collapse, collectively agreed to pay over $325 million, as follows.
   1. 1. John Moriarity and Associates of Florida (JMAF), the general contractor for the construction of 87 Park agreed to contribute $157 million above and beyond what the Contractor Controlled Insurance Program (CCIP) contributed;
      2. The CCIP in which JMAF, 8701 Collins, Terra Group and its affiliate Terra World, and Bizzi & Partners Development (BPD) were enrolled agreed to contribute $84 million towards settlement;
      3. 8701 Collins Avenue Condominium Association (87 Park), the condominium association for 87 Park, agreed to contribute $29 million;
      4. 8701 Collins Development (8701 Collins), the single purpose entity that developed 87 Park, contributed another $28 million towards the settlement amount;
      5. NV5, the geotechnical engineer for 87 Park who warned 8701 Collins that vibrations from site preparation and construction of the foundation at 87 Park could damage the Champlain Towers, agreed to contribute $25.7 million;
      6. Stantec Architecture, the architect for 87 Park, agreed to contribute $25 million;
      7. BPD, another entity associated with development of 87 Park, agreed to contribute $16 million;
      8. DeSimone Consulting Engineers, the structural engineer for 87 Park, agreed to contribute $8.5 million;
      9. Florida Civil, the consulting firm that developed the dewatering plan for development of 87 Park, agreed to contribute $6.9 million; and
      10. Geosonics, a firm retained for a period of time to monitor vibrations associated with development of 87 Park, agreed to contribute $5 million;
3. Morabito, the engineer that inspected the Champlain Towers on 2018, agreed to contribute $16 million.
4. Becker & Poliakoff, the Champlain Tower Association’s law firm for about 25 years, which allegedly did not review the 2018 condition assessment report from Morabito, agreed to contribute $31 million.
5. Western Waterproofing Company, the repair contractor retained by the Condo Association many years prior to the collapse to clean and coat exposed reinforcing steel and repair spalled concrete, agreed to contribute $25 million.
6. Concrete Protection and Restoration, the forensic contractor that performed destructive testing in several areas of the first floor of Champlain Towers in 2018, agreed to contribute $11 million.
7. Sammet Pools, Inc., a pool contractor with whom the Condominium Association consulted, agreed to contribute $9.8 million.

B.   The Takeaways

The collapse of the Champlain Towers was both a “black swan” event and predictable.  Catastrophic building collapses that kill scores of people are thankfully exceedingly rare in the US.   Yet, the collapse of the Tower, like so many alleged building other types of failures and defects, was alleged to not have been caused by a single factor, but instead by a series of missteps over a lengthy period of time.

The large amount contributed by the developer entities, construction team, and design firms for the adjacent property—in excess of $325 million—speaks volumes about the risks entailed with development of properties in densely populated areas.  Also, given that almost all of the proceeds were paid for by insurance, the settlement agreement underscores the importance of procuring the right types and sufficient limits of insurance to guard against risks, even “black swan” ones.

The attorneys in our Austin and Dallas office have significant experience assessing risk, negotiating it, and assisting in managing it for our clients.  Please contact us with any questions you may have at info@gstexlaw.com.

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