Janopaul + Block Companies v. Sundt Construction Co. CA4/1

I.

BACKGROUND

A. The Hotel to Condominium Conversion

J + B hired Ninteman Construction Company, Inc., now known as Sundt, to

convert a hotel that J + B owned to apartments and retail space. While construction was

ongoing, J + B deeded the hotel to S.D. No. 1.

A few years after construction was completed, the apartments were converted to

condominiums and sold to the public. In connection with these sales, J + B and S.D.

No. 1 (collectively Janopaul) made disclosures of construction defects, which reduced

their sales revenue by approximately $3 million. Janopaul also incurred approximately

$750,000 in out-of-pocket expenses for repairs.

B. The Construction Defect Litigation

The faulty construction resulted in several lawsuits, which were eventually

consolidated. The first to be filed was an action by Janopaul against Sundt seeking

damages for various construction defects on theories of negligence, breach of contract,

and breach of warranty. Janopaul also sought attorney fees on the breach of contract and

breach of warranty claims, but not on the negligence claim.1 The condominium

The construction contract between Janopaul and Sundt contained the…