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Recent Case Studies

All of Amherst's work is related in some way to property damage. Amherst's most common projects are:

1.INSURANCE CLAIMS

– Property damage due to an insured peril (fire, water, hurricane, earthquake, explosion, etc.) and is assigned to Amherst as part of an insurance claim. Amherst provides expert engineering and consulting on above ground and subsurface environmental and non-environmental property damage.

Services include cause and origin, assessment, development of corrective repair scope, qualifying contractors and collecting bids, oversight of corrective repairs, agency code negotiations and expert witness evidence preparation and testimony for subrogation recovery. Amherst specializes in dispute resolution.

2.CONSTRUCTION DEFECT

– Property damage as a result of construction defect (construction defect, engineering defect, design defect, material defect, owner-operator defect, failure to comply with contract documents and/or codes, failure to meet standards of practice and standards of care, etc.) and is typically assigned to Amherst by an attorney, representing an owner or insurance company for the owner.

Amherst provides expert engineering and consulting to include forensic investigation and destructive testing, development of corrective repairs, oversight of corrective repairs, development of expert opinion and reporting and expert witness testimony. On almost all projects, Amherst is lead expert, supported by sub-consultant experts in specific required support disciplines (plumbing, electrical, mechanical, masonry, envelop, environmental, architectural, etc.). Depending on the project, this could be from one to as many as 10+ sub-consultant experts.

Below are 12 recent select projects that are representative of Amherst's work.

INSURANCE CLAIMS

1. Texas Data Center – Uninterrupted power supply cabinet fire

A fire occurred in a small uninterrupted power supply cabinet located within a 14,000 sq. ft. data center that housed over 6,200 pieces of electronic equipment, primarily client data servers. Amherst was retained by the insurance company for an equipment manufacturer that made some electrical equipment located within the cabinet and was thought to be potentially responsible for the fire. The insurance company for the data center brought in a company from the northeast United States to perform electronic restoration. Amherst scope of work was to review the restoration company's scope of work and costs and to provide expert opinion. In a 140-page Expert Opinion Report, Amherst opined that:

  1. Much of the cleaning was not necessary
  2. 52 of the servers had to be replaced due to the use of an improper cleaning process but were charged to the claim;
  3. Significantly enhanced billing practices were used by the electronic cleaning company to include exorbitant and unnecessary travel and per diem costs; and,
  4. The electronic cleaning scope of work was flawed from the outset by allowing the same company to consult to perform the characterization sampling and develop the scope of work as did the cleaning.

The law firm that retained Amherst, a global firm with over 20 offices, provided Amherst with a letter that stated, "…I am writing to let you know that the parties have reached a settlement agreement in the above-referenced matter. We very much appreciate your work on this case and believe that our strong expert reports were a significant factor in reaching favorable settlement terms for our client…".

Claimed value of electronic cleaning - $5,000,000.00

2. Northwest United States - new equipment sales display rack fire

A fire occurred at a new equipment sales rack within a 34,000 sq. ft. hardware/Feed & saddle store, with an additional 6,000 sq. ft. of upstairs office. The fire occurred at night and therefore discovery and Fire Department response was not immediate. The store was affected with varying degrees of a wet, plastic based smoke and soot residue. Amherst was retained by the insurer for the equipment manufacturer that owned the rack where the fire originated.

Amherst scope of work was to review the scope of work and costs of the restoration effort. When Amherst first inspected the store, restoration was ongoing. Originally the plan was to pack out the contents of the store and move the contents for off-site restoration. As such, some of the contents had already been moved to a local warehouse. In a 210-page expert opinion, Amherst opined:

  1. Well-organized restoration practices would have included a store short closure while all floor merchandise was cleaned in place;
  2. None of the contents needed to be moved out of the store for restoration;
  3. All structural and mechanical cleaning could have been performed at night; and,
  4. Amherst made recommendations for fair and reasonable restoration costs.

Claimed value of restoration - $600,000.00

3.Hawaii high-rise residential building – fire in one unit

A fire occurred in a residential building in Honolulu destroying the interior of one unit and distributing varying amounts of smoke throughout the remainder of the building. The owner of the building retained the services of Public Adjuster (PA). The PA filed the repair claim on behalf of the owner/insured. The claim included repairs and cleanup but also included numerous code upgrades, the largest of which was replacement of all windows. The PA submitted a letter detailing that, as part of the fire repairs, the Building Department was requiring compliance with all building codes.

Amherst scope of work was to review the building claimed scope of repairs and to provide expert opinion on fair and reasonable scope and cost of repair. Amherst inspected the building, collected take-offs, collected video and met with the owner and PA. The PA laid out the owner's position on code compliance that was required by the Building Department. Amherst then went to the City and County of Honolulu Department of Permitting and Planning (DPP) and met with the DPP Director.

We showed the DPP Director the PA's letter on code compliance applying to fire damage repairs. We explained that it had been our experience that fire damage repairs, if they were repairs to like-kind without structural re-configuration, were considered "repairs", not subject to code compliance except for certain, specific life-safety requirements by the Fire Department. Just the opposite of elective remodeling/renovation, which requires full code compliance. The DPP Director agreed with Amherst and provided a letter stating code upgrades, as associated with renovation, did not apply to this fire damage repair. Amherst provided the DPP Director's letter to the building owner along with our recommendations for scope modifications.

The actual fire repairs turned out to be about one third of the original claimed scope.

Claimed value of fire repairs - $3,200,000.00

4. Northern California High Rise Office Building – Water discharge on Floor 18


Amherst was retained by the insurance company for the 18th Floor Tenant. A piece of equipment used by the tenant was the source of the water discharge. Amherst's scope of work was to audit scope of work and costs claimed for repairs of the 18th Floor, the 17th Floor and the building core, mechanical chase and elevator cars, motors, cables and shafts . Amherst has been retained to provide expert opinion as to the scope of work and costs that were found to be fair and reasonable.

Claimed value of the repairs - $800,000.00

5. New York City high-rise condominium building and retail plaza – Superstorm Sandy

The high-rise condominium office building and retail plaza experienced partial flooding in its subterranean parking garage. Located within the floor of the garage were two below grade electrical utility vaults, approximately 7 feet in depth, where multiple horizontal 480-volt power supply feeder cables were spliced together. At the time of the occurrence, this distribution system was de-energized. The vaults were manually pumped out and the distribution system was inspected and re-energized. The distribution system had remained energized and there had been no reported faults.

Investigation revealed that there were sumps in the vaults, for the purpose of draining the vaults in the event of water intrusion, but the sumps had long been inoperable due to deferred maintenance. The electrical conductors were specified to be submersible and the 3M barrel connectors and cold shrink connector insulators were specified to also be submersible, if installed correctly. Many of the splices appeared to different, previously repaired and in poor condition. The vaults were neglected, full of trash and had evidence of previous repair work that was cobbled together.

The building owner submitted a claim to replace the entire subterranean electrical system. Amherst was retained by the insurance company for the building to evaluate the claim. Amherst's scope of work was to:

  1. Forensically investigate the condition of the electrical system;
  2. Develop repair options and costs for corrective repairs;
  3. Develop plans for destructive testing and observe destructive testing;
  4. Attend technical to technical meetings to discuss repairs amongst the experts; and,
  5. To develop expert opinion and reporting.

Claimed value of repairs - $8,000,000.00+

CONSTRUCTION DEFECT

6.Southern California Luxury residential high-rise – construction defect

Upscale neighborhood in southern California. The new owner closed on the newly constructed 121-unit residential building, which overlooked a prestigious private country club, in September. Heavy rains began in October. By December 79 of the 121 units experienced water intrusion. Amherst was retained by the property owner. Amherst scope of work was to:

  1. Forensically perform destructive testing to determine the source and extent of the water intrusion;
  2. Develop scope of corrective repairs;
  3. Work with the new construction contractor/developer to attempt to get them to perform the corrective repairs;
  4. In the event the new construction contractor/developer would not perform the corrective repairs, act as the owner's representative to develop RFPs for bidding contractors, qualify bidding contractors, collect bids and make recommendations;
  5. Negotiate with agencies, oversee corrective repairs;
  6. Collect evidence for recovery litigation;
  7. Assume the position of lead expert, coordinating all other discipline experts to present a smooth, well-coordinated technical case for the plaintiff in the recovery litigation against the developer, engineer of record, new construction contractor and subcontractors, and other defendants; and,
  8. To provide testimony in mediation and trial.

The corrective repairs and litigation ensued over a five-year period. Amherst developed and submitted a 2,300-page Preliminary Defect Statement that specifically addressed 22 defect categories including roofing system, stucco, windows, doors, topping slab, planters, pool, membrane, balconies, framed floors, parking levels, exterior decks, gutters and downspouts, passenger elevators, exterior features, plumbing, mechanical and mold. Listed violations in each category were Universal Building Code (UBC), manufacturer's specifications, contractual obligations, standard of practice, standard of care and intended use. Each category concluded with a scope of corrective repairs and costs and photographic and video evidentiary support.

The case settled favorably in court mandated mediation.

Settlement of mediated litigation - $19,800,000.00

7. Northern California Office building – Construction defect

The Partners purchased an office building for an investment. The three-story building was to be upgraded from a Class C office space to a Class A office space. Work planned included HVAC, mechanical, electrical, floors, walls, ceilings, bathrooms, permitting and code upgrades. The anchor tenant signed a lease for Floors 2 and 3. The Partners were under the gun to meet a tight construction schedule in order to turn the space over by the contract deadline. Well into the schedule, the contractor developed problems with – installing surplus HVAC equipment sold as new; billing abuses due to cost misrepresentations, over billing, unsupported billing, change orders; substandard work due to failure to supervise of workers and subcontractors; failure to obtain permits, meet building codes and failure of inspections; and, delays and consequential damages.

  1. The contractor was fired and replaced with a different contractor that completed the work. Amherst was retained by the Partners. Amherst scope of work was to go through all the documents, perform inspections, collect evidence and develop expert opinion. Amherst submitted a 385-page expert opinion that included:
  2. Contact information for all parties;
  3. Plans and specifications;
  4. A defect statement that listed eight specific disciplines of defective work with violations of contract plans and specifications, manufacturer's specifications, building codes, standards of practice and standards of care;
  5. A spreadsheet audit of all owner incurred corrective hard and soft costs to include complete proof of payment;
  6. A spreadsheet of all future corrective hard and soft costs;
  7. A spreadsheet of all Stearman costs (expert fees); and,
  8. All supporting evidence.

Value of construction defect claim – $2,359,802.00

Status of the claim – Pending, in litigation

8. Northern California car dealership – construction defect, new construction

A very centrally located, beautiful 32,000 sq. ft. new car dealership was built in 2016 in northern California. The facility included 13,000 sq. ft. contemporary designed showroom, 13,000 sq. ft. state-of-the-art service area and 6,000 sq. ft. of upstairs office area. As soon as the owner took possession of the building, plumbing problems started requiring digging up some of the showroom, first floor office area and service area floors. This was the first of several problems soon to manifest. At first, the owner made a good faith effort to work with the contractor to resolve the problems with the work. Six months after the work was complete, the contractor submitted a change order for $122,000.00 and filed a mechanics lien for $300,000.00. Amherst was retained by the owner.

Amherst scope of work was to forensically investigate the known problems, collect evidence, develop scope and cost for corrective repairs and develop expert opinion for litigation. In a 225-page expert opinion report, Amherst provided detailed findings, detailed support and a complete audit. Amherst opined:

  1. The contractor had billed $5,200,000.00 to include the six month late change order, and the owner had paid outright 4,850,000.00;
  2. The owner also paid out of pocket $190,000.00 to an unpaid subcontractor to remove a mechanics lien in order to secure long-term financing;
  3. The owner also had to pay another unpaid subcontractor $8,500.00 to stop picketing in front of the dealership;
  4. $150,000.00 in change orders were discounted 50% due to no support or prior agreement;
  5. The six-month late change order was a one-page submission with line items with no support or agreement and was discounted 100%;
  6. The owner paid an additional $17,000.00 of contractor incurred but unpaid costs; and,
  7. There was $700,000.00 in corrective repairs for roof replacement, showroom cracked tile replacement, service area leaks, uncompleted construction and structural damages that had to be fixed.

Whereas the contractor originally filed suit to enforce their $300,000.00 lien, it was determined through the audit that the lien was null and void because it was not filed timely and, in addition, the contractor actually owed the owner $735,000.00.

Value of the construction defect claim - $735,000.00

Status of the claim – Pending, in litigation

INSURANCE CLAIM AND CONSTRUCTION DEFECT

9. Northern California Upscale Department Store – defective new tile installation

Upscale Department Store in Northern California. An agglomerate tile was installed as part of a store renovation. At the point that 50,000 sq. ft. of the new tile were installed, it was determined that the new tile had cupped so badly that all 50,000 sq. ft. would have to be removed and replaced. Amherst was retained by the insurance company for the manufacturer of the tile setting materials (mortar, isolation membrane and grout used in the installation).

The Department store originally made demand on this manufacturer solely for all cost of removal and replacement of the newly installed tile. Amherst's scope of work was to:

  1. Forensically perform destructive testing to determine the cause of the tile cupping;
  2. Collect evidence to support the results of the destructive testing;
  3. Develop expert opinion on behalf of our findings and conclusions; and,
  4. Provide expert opinion testimony in mediation and at trial.

Amherst, with the help of the manufacturer's technical department, developed and built a one-of-a-kind rail mounted laser measuring system. An exact duplication of the in-store new tile to be replaced was installed in the manufacturer's R&D facility. All parties' experts and attorneys were invited to observe and document. Sixteen of the left-over agglomerate tiles were installed and laser measured at 8 points per tile after installation to determine the timing and extent of the cupping. There were seven Parties in the litigation. In a 600 page expert opinion report, Amherst opined:

  1. All seven Parties were potentially liable to some extent;
  2. The cupping of the tile to the extent that it had to be replaced occurred within a few days rather than the weeks it took to install the 50,000 sq. ft. to be replaced;
  3. If the architect and renovation manager had properly performed their contract specified observation and supervision responsibilities, they would have known the tile was cupping to the point of replacement when only 10,000 sq. ft. of the agglomerate tile was installed, rather than the 50,000 sq. ft. that was actually installed; and,
  4. The manufacturer was only responsible for their apportionment of liability of 10,000 sq. ft. of tile replacement. Amherst calculated the setting materials manufacturer's liability to be approximately $250,000.00.

Original demand on the tile setting materials manufacturer - $3,00,000.00

Settlement – unknown, confidential – reported to be very favorable

10. Southern California Community Development – Water intrusion property damage claim

Amherst was retained by the insurance company for the current property developer. The upscale community was originally developed by a different developer. The original developer built 10 beautiful model homes and then development construction stopped for financial reasons. The model homes construction at that time ranged from complete to almost complete. The model homes were uninhabited for 6 years until the property was bought the current developer. This developer performed cosmetic repairs on the 10 homes and then sold them as new. A variety of problems manifested in the ensuing two years, mostly centered around water intrusion. After claims from the owners of the recently purchased homes, the developer filed an insurance claim for water intrusion. Amherst's scope of work was to perform a causal investigation and provide expert opinion. In a 200-page report, Amherst opined that the cause of the water intrusion was defective construction by the current developer prior to selling the 6-year-old homes as new construction. Damages included warranty claims, corrective repairs, loss of use and diminution of value.

Claimed value of damages - $10,000,000.00+

11. Nevada community development – insurance claim for structural damage

The upscale community development included a total of 14,000 homes. The first 2,000 homes developed cracks in the foundation resulting in slab heaving, structural cracks and out of plumb structural walls, windows, ceilings, etc. The developer submitted an insurance claim for corrective repairs of the 2,000 homes in the amount of $50,000,000.00. The primary insurer paid policy limits for the claim.

Amherst was retained by the reinsurer for the developer. Amherst's scope of work was to,

  1. Forensically investigate to provide an expert opinion on the cause of the slab cracking;
  2. To forensically audit claims costs to provide recommendations for those claim costs that were fair and reasonable for repairs, without regard to the cause; and,
  3. Provide expert opinion reporting to be used in mediation, settlement negotiations and litigation.

Amherst used a random sampling of 10% of the 2,000 homes to develop an exemplar sample set that could be audited in detail and then used the exemplar audit results to extrapolate findings applicable to all 2,000 homes. In s 450-page Preliminary Claims Evaluation Expert Opinion Report, Amherst provided detailed spreadsheet analysis of the exemplar homes showing line item adjustments of claimed costs. Adjustments included unverified/unsupported costs, upgrade/betterment costs, claimed developer overhead and profit costs, unrelated costs and for developer unjust enrichment costs for the profits from the risky decision that caused the slab cracking.

Amherst opined that, for the exemplar home's claimed cost of corrective repairs of $8,132,000.00, $3,145,068.00 were found to be fair and reasonable. As to the cause of the slab cracking, Amherst opined that the cracking was due to an initial risky decision in the design of the first 2,000 homes that backfired. After the first 2,000 homes, this design was changed, and no further slab cracking occurred. A negotiated settlement resulted based on Amherst's report. After the settlement, the attorneys responded that, "…We appreciate all the hard work you put into the case on short order, including the preparation of a remarkable expert report…".

Claimed value of repairs - $50,000,000.00

Settlement – unknown, confidential – reported to be very favorable

12. Underground steam piping systems – several locations throughout California

Amherst has specific expertise in claims made by large facilities, with multiple structures (hundreds), for damages to buried steam and condensate systems supplying heat to the structures from a central boiler/chiller plant. Amherst has been retained by the manufacturers of the piping systems and, in one case, by the installer. Amherst's scope of work has been to forensically investigate potential damages to piping, pipe insulation, from installation and from operator error. Amherst has coordinated several sub-consultant disciplines to forensically investigate, develop expert opinion and develop resolution cost engineering. Amherst has coordinated multiple sites, insureds, insurers, logistics, reports, mediations and testimony.

Claimed value of litigation resolution – unknown, confidential, ongoing

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