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Dispute Resolution Keyed to Folberg, 4th Ed.
David Co. v. Jim Miller Construction
Citation:
444 N.W.2d 836 (1989)Facts
David Company contracted with Jim W. Miller Construction to build seven luxury townhouses in two phases on property at Big Detroit Lake. Construction problems began shortly after commencement and continued throughout the project. Phase I completion was delayed from May 1984 to October 1984, causing David Company to lose sales and incur additional expenses. Despite being aware of numerous deficiencies, David Company made final payment in November 1984, allegedly after Miller reaffirmed its obligation to remedy the defects. Subsequently, David Company discovered additional serious construction defects and building code violations. When Miller refused to correct these issues, David Company initiated arbitration, claiming breach of contract, negligence, and misrepresentation. The arbitrators heard evidence over three days, inspected the site, and found extensive water infiltration problems, structural damage, missing anchor bolts, walls out of plumb, and other serious defects. The arbitrators fashioned a “sell back” option requiring Miller to purchase the property for $884,476, with an alternative monetary award of $497,925 if the property could not be conveyed free of liens.
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