Prudential Plaza, High-Rise Office Building Claims Analysis

MDC Systems^® was retained by counsel for Turner Construction to assist in the evaluation and defense of a $60 million claim involving $14M in alleged remedial work and $23M in delay damages. MDC Systems^® also assisted in prosecuting Turner’s counterclaim of $20M for the $8.6M balance due on the construction contract, plus damages.

The Prudential Plaza building is a 64-story office and retail project in downtown Chicago with an approximate construction cost of $125M. Construction started in April 1978, with completion scheduled at the end of 1989. Due to various delays, the project was not finished until June 1990 after the commercial real estate market had collapsed.

The owner/developer sued Turner for $60M in damages, including lost rents from prospective clients and alleged remedial costs. Turner claimed that the owner/developer improperly denied time extensions for force majeure events and owner-generated change orders to shift to Turner the losses associated with a poorly timed project.

MDC Systems^® assisted Turner and its counsel in properly assessing the project delays and in refuting the analysis by the owner’s delay expert. Evaluating an early report by the owner’s scheduling consultant, MDC Systems^® demonstrated that the report actually showed that most of the delays were the responsibility of the owner or its architect. At trial, a block of time model was used to demonstrate delay. For every delay request, a block was inserted into a model of the building that represented the 34-month original construction time. The model was extended for every block inserted to illustrate the additional time to which Turner was entitled.

MDC Systems^® also assisted in the defense of numerous remedial costs claimed by the owner. The principal remedial damages concerned alleged defective work in the installation of the roofing and its interface with the curtainwall system and the resulting water damage. The owner alleged that Turner was responsible for $14M in costs to remove and replace the roof due to faulty construction and modify the curtainwall. After completing our investigation, MDC Systems^® concluded that defective design was the major reason for the failure of the systems.

MDC Systems^® supervised the preparation of computer animation, prepared by Engineering Animation, Inc., to show the differences between the original roof design required by the contract and the remedial roof later installed by the owner. The animation clearly depicted: (1) that the original roof and curtainwall system was flawed because of the architect’s design and not Turner’s installation, and (2) that the remedial design was a completely different type of roof and flashing system, constituting a betterment.

MDC Systems^® assisted counsel in the investigation of the alleged remedial items and in developing testimony, documents, exhibits and an animated computer model to illustrate the issues. We assessed the counterclaim costs, remedial costs and damages and provided expert testimony at trial concerning the technical issues and as to damages.

The jury found for Turner in the amount of $8.3M on its claim for the balance due on the contract, but awarded no damages to Prudential on any of its claims, including delay, lost profits and remedial costs.