Technology continues to provide tools to improve our ability to address society’s complex, data-driven problems. Adjacent construction claims are teeming with complex, data-driven issues where technology can provide tools to aid in the investigation, management and resolution of such claims.
Because of the potential broad impact adjacent construction issues may have and the sheer volume of potentially impacted parties, managing these claims can be challenging. Aside from identifying the potential causes for the alleged damage, getting a broader understanding of the scope of affected parties and properties (and thus potential claimants) is beneficial from a claims management and legal perspective. One technical tool that can be helpful is Geographic Information System (GIS) software, which is designed to store, retrieve, manage, display, and analyze all types of geographic and spatial data. This software is used to create maps and other graphic displays of spatial information for analysis and presentation. Using tools such as GIS Software and data analytics in adjacent construction matters can help legal practitioners and claims professionals (and their related experts/consultants) manage claims by providing visual representations of the information. This can be helpful in a number of ways, including: (i) visual document management, (ii) categorizing claims based on their geographic location/proximity to the original construction site, and (iii) data-driven predictions of potential claimants and the nature of claims. As these types of claims develop, often fast and furiously, being able to visually manage (and even anticipate) these claims can have tremendous benefits and provide cost and time savings.
Cause and Effect of Adjacent Construction Claims
In urban environments, heavy construction is typically conducted in close proximity to neighboring buildings and other structures. This adjacent construction may cause damage to existing buildings and structures from construction-induced vibrations, temporary lowering of the groundwater table from construction dewatering, and/or from the loss of lateral support induced by excavation. The construction activities can produce effects such as cracking and separation of exterior and interior finishes (e.g., Figure 1), building settlement and bearing wall cracking (e.g., Figure 2) and, most commonly, complaints of disturbance by building occupants from noise or vibrations. Hence, construction activities, and their impact on surrounding structures, should be carefully designed, inspected, and instrumented.
Construction activities cause vibrations of various amplitudes and frequencies that propagate within the subsoils. Ground vibrations may be of sufficient magnitude to cause direct damage to structures. The magnitude of vibrations that causes damage varies with the type and the vibration response of the structure. Vibrations can also cause damage indirectly, because they can cause densification of loose soils, resulting in differential settlement of building foundations.
Excavations are often needed in construction projects, especially in dense urban environments and can cause multiple additional effects on adjacent properties. Soil removal reduces lateral support for neighboring soil and may induce movement in the surrounding soil and structures close to the excavation. Typically, when excavation is performed, dewatering is also performed in parallel to the excavation. Dewatering causes the lowering of the groundwater table within the soils, which can contribute to additional differential settlements of neighboring building foundations.
Fortunately, many of these effects can be mitigated so that existing buildings are not adversely affected. If damage is claimed from these construction methods, the above mechanisms should be investigated to demonstrate cause-and-effect.
Insurance Claims, and Pre-Suit Investigations
Some of the most commonly encountered claims are the allegation of cracks to the exterior and interior of the adjacent building as well as shifting of doors/windows. In order to adjust a claim, investigation is important, however, in many cases, the most important investigation is the one performed before the first shovel was put into the ground, the pre-construction investigation.
Such investigations should address multiple questions, for example:
- Were pictures taken of adjacent buildings? Were they close-up enough to show details of the exterior? Do they show prior damage to the building? If so, was extra care taken to document such cracking and other damage? Were pictures taken of adjacent buildings during construction to show (hopefully) no change in façades? Were pictures taken after construction?
- Was a survey taken of preconstruction elevation levels of various floors of adjacent buildings? If adjacent buildings are showing signs of distress prior to construction, what steps did the construction team take to consider these signs in subsequent construction steps?
- Was there a plan in place for monitoring vibration and dewatering activities? Was it closely followed? Was an expert retained to monitor activities consistently at the site? Many times a plan is in place but records are spotty compared to the monitoring that actually took place and the expert was not there consistently monitoring. It is important to know whether there exists any risk transfer to experts and what their contract states.
- Did any value engineering take place? What was changed during this process? A common impact is that less monitoring than originally intended is taking place.
- Finally - Record keeping, record keeping, record keeping… How good are the records to show the pre-construction condition?
Based on these records -or lack thereof-, after a claim is made, one should usually retain an expert to evaluate the pre- and post-construction conditions of the building. Based on the expert’s findings, one can evaluate the claim for settlement considering any risk transfer provisions.
Litigation, Alternative Dispute Resolution (ADR) and subrogation process for adjacent construction claims
The legal obligations involved in adjacent construction projects can be extensive. Of paramount importance is taking action to prevent, minimize and/or mitigate damages. While these actions/measures may vary state to state, depending on building codes and ordinances, in many states wherein these issues frequently arise there are specific processes in place. For example, in New York, Construction Access Agreements (voluntarily entered into between adjacent property owners) and judicial access licenses (allowing for work to be done and access to be provided by adjacent properties), provide a framework governing the work being done and the responsibilities of the parties and provide for measures to prevent damage, address liability, etc. Often, these agreements address indemnification obligations, insurance coverage, bonds or the equivalent and set forth protocols for monitoring the work.
If/when damage to an adjacent property occurs (or is alleged), determining the following are just some of the issues that should be addressed: (i) potential cause(s) of damages; (ii) the responsible parties involved; (iii) possible areas of expertise needed; (iv) remedial work to be performed; (v) the scope of damages and exposure; (vi) potentially applicable insurance policies; (vii) ability to seek recovery of attorneys’ fees and costs for any dispute; and (viii) the possible forum(s) for dispute resolution. While there are a number of potential contractual and indemnification claims that may be involved, general negligence, private nuisance, violation of building codes, and other claims may also be asserted. For example, in the Millennium Tower matter in San Francisco, multiple lawsuits were filed by unit owners, the homeowners’ association, the San Francisco City Attorney, etc., against the building owner, the architects, engineers, Webcor and the Transbay Joint Powers Authority. The litigation and claims included a legion of parties and an army of lawyers, claims professionals, construction companies and experts. The legal fees in the Millennium Tower dispute reached into the 8-figure range and despite the majority of the matters being resolved in the last year, they likely continue to climb. While the resolution is in process, which is likely to exceed projections of $100 million, it’s a glaring example of the complex and broad array of legal issues involved in these types of projects.
Managing Project Data: Utility of Geospatial Data
The quantity and types of geospatial data available to the public is increasing exponentially with time. Cities and government agencies provide publicly available geospatial data portals through which anyone can download data such as aerial imagery, property parcels, tax assessor information, city maps, surface elevations or other. GIS software can manage the data in simple to use graphical map interfaces (e.g., Figure 3).
This publicly available geospatial data and project specific data, including damage claim data, can be combined within GIS software to create an incredibly robust tool to efficiently perform sophisticated analyses of damage claims. For example, once the data is inputted into a GIS system, the user can create graphics and statistics that allow for analysis of the specific issues of each property. Moreover, the graphics produced can become very compelling exhibits in the arbitration or litigation of a dispute.
Compiled publicly available geospatial data and project specific data are efficiently analyzed to answer both simple and more complicated questions such as:
- What is the proximity of various construction activities most likely to cause damage to the subject property? An overlay of construction drawings, field records, and aerial photos allows for estimation of the distance of the subject property and the limits of various construction activities such as pavement removal, excavations, and pavement compaction with private buildings and improvements.
- Can construction-induced vibrations contribute to the claimed conditions? A geospatial overlay of the measured peak vibration levels can indicate whether significant vibrations occurred within a construction period and at what distances from the subject properties.
- Is the alleged cost of repair reasonable? A comparison of the claim value vs. the tax assessed market value of the property can provide an easy way to evaluate whether the claim value is reasonable based on the assessed value of the property.
- Are there any effects of non-construction activities that need to be considered? Has the damaged property ever been flooded from a large flooding event or experienced a high-wind event? A simple overlay of the property and an inundation map could show if that ever occurred. Can large trees (roots) affect the measured cracking within a building? An overlay of a city-wide tree map and aerial imagery can show whether any trees exist that can contribute to this damage mechanism.
Example Scenario: Asphalt Pavement Replacement
In this section, we present a hypothetical scenario for illustration purposes. A contractor is replacing the asphalt pavement and relocating some underground utilities on a city street. After construction is complete, 14 adjacent properties file claims for damage reportedly caused by the adjacent construction activities.
Publicly available geospatial data was acquired from the City. In this example a tree map, a sidewalk inventory, a parcel map and an elevation contour map have been utilized. On top of these layers, a city map is included in the GIS model and aerial imagery provided by Google. Finally, project specific data are loaded, which are the specific property parcels, the claim amounts and the peak vibration measurements recorded during construction.
Figure 3 shows how multiple layers of the above data can be incorporated into a simple map. The parcels are colored based on the value of each claim and the actual claim value is shown in select parcels. The surface elevation contours allow one to identify critical gradients that can potentially lead to adverse surface water drainage patterns. Aerial photographs show that trees exist in a dense spacing outside the claimants’ buildings. Therefore, one potential damage causative factor is the effects of trees’ roots on the claimants’ foundations. This analysis also quickly shows that properties with claims are situated in areas where larger vibrations were recorded at the claimant’s property lines during construction. The larger the symbol used in Figure 3, the greater the vibrations recorded. With a closer look at the data, many of these values measured next to claimant properties exceed 1 inch per second, a value which technical literature indicates potentially can lead to visible cosmetic damage to finishes within the subject buildings.
Data analysis of the construction records can provide even more insights about the contributing factors and assist in the analysis of damage claims. Typically, field vibration records include, apart from the vibration measurements, descriptions of the various construction activities performed. These activity descriptions can be digitized and statistically analyzed. The plot and table in Figure 4 reveal the most common words encountered in the description of construction activities when vibrations greater than 0.5 inches per second were measured. The size of the word indicates the frequency of the word. It is clear that pile driving and pavement breaking contributed the most in this example scenario.
Putting It All Together
Adjacent construction claims will continue to be a common claim associated with construction activities. Claimed damages can be small such as cracks to the exterior of the adjacent building and shifting of doors/windows or much larger such as building settlement or collapse.
Hence, the legal obligations involved in large construction projects can be extensive, and therefore it is important to take action to prevent, minimize and/or mitigate damages. The types of legal claims may be contractual or indemnification claims but also may include general negligence, private nuisance, violation of building codes, and other claims. When insurance claims occur, detailed investigation of such claims is needed but the most important investigation may be the investigation that was done before the first shovel was put into the ground.
Luckily, in situations where multiple claims arise, managing them has been more effective than ever with the rise of open data offered by multiple sources and the modern geospatial and data analysis tools. Lawyers, claims professionals and experts alike must become well-versed in these invaluable tools. Individual inspections and analysis are still necessary, especially when claims are litigated, but multiple data including the inspection data for multiple claims can now be managed more effectively. The value of the claims can be more readily identified and correlated with causative mechanisms. At the same time, the causation analysis performed by retained experts using such tools can be increasingly cost-effective, accurate and consistent. So, while detailed human analysis and on-site involvement remains critical, technology, such as GIS software, can greatly aid in the complex, data-driven investigation, management and resolution of adjacent