Dillingham Construction, N.A. v. Nadel Partnership, Inc.

Appellant the Nadel Partnership, Inc. (Nadel), an architecture firm, was found by a jury to be 10 percent liable for a discrete set of defects in a construction project which would cost $3,437,494 to repair. The cost of overall repairs to the project was estimated at up to $51 million by the plaintiff, who settled for a total of approximately $15 million paid by other defendants. On a cross-claim for indemnity brought by one of the settling defendants, the trial court allowed the jury to decide how much of the unallocated lump-sum settlement should be attributed to the defects for which Nadel was ultimately found responsible. The jury concluded that $4,658,677 of the $15 million settlement was reasonably paid toward those claims. Based on the jury’s findings, the court ordered Nadel to pay cross-claimant $1,633,971 as its percentage share of the settlement entered into by the plaintiff and the settling defendants.

The trial court’s ruling meant that the cross-claimant was permitted to recover from nonsettling codefendant Nadel an amount in indemnity greatly in excess of that which the plaintiff could have recovered in actual damages from Nadel, based on the findings of…