Construction work can be dangerous. The OSHA figures show that in 2013, 4,585 workers were killed on the job. That's 88 deaths per week, or more than 12 deaths per day. The “fatal four” leading causes of worker fatalities in construction are falls, being struck by falling objects, electrocution, and getting caught in or between objects. They caused almost 60% of construction worker deaths in 2013. Yet, there are many potential causes of fatalities on a site; even objects which do not appear dangerous, such as a cubic yard of soil, can weigh as much as a car and cause serious harm.
Recent punitive damage awards include the following:
- A Wisconsin jury awarded $39 million in damages, including $15 million in punitive damages, after an improperly attached 13-ton panel fell, killing a 15-year-old boy, Jared Kellner, and injuring two others. Testimony revealed that the Advanced Cast Stone panel was attached with only half of the required number of steel connecting rods.
- A Texas jury awarded $44 million in damages, including $8.5 million in punitive damages, to Tyler Lee, a construction worker who was injured by a falling crane. A supervisor from Berkel & Co. allegedly told the crane operator to continue working after the auger became stuck. The crane collapsed and a piece fell on Lee who was behind a safety fence 100 feet away. As a result of the accident, Lee lost his leg. The jury found Berkel 90% at fault and the crane manufacturer 10% at fault.
- A Pennsylvania jury awarded $15 million, including $3 million in punitive damages, to a worker whose foot was crushed by a forklift driven by an unlicensed forklift operator. At the time of injury, the worker was disassembling the 2012 International Manufacturing Technology Show.
Though rare, some courts have imposed punitive damages for defective construction:
- In 2012, the South Carolina Court of Appeals affirmed $6.5 million in actual damages and $2 million in punitive damages. In Magnolia North POA v. Heritage Communities, Inc., the Property Owners Association (POA) sued Heritage Communities, Inc. (HCI), Heritage Magnolia North, Inc. (HMNI) and BuildStar Corporation (Buildstar) for construction defects at Magnolia North, a twenty-one building condominium complex in Horry County. The defendants argued “the award of punitive damages has no deterrent effect because Appellants went out of business prior to the commencement of the litigation” and that Heritage had “no ability to pay punitive damages.” However, the punitive damages were upheld due to the “defendant’s degree of culpability,” “defendant's awareness or concealment,” “existence of similar past conduct,” and “likelihood of deterring the defendant or others from similar conduct.”
- In 2010, a Texas jury awarded the homeowners, Bob and Jane Cull, $7.1 million in actual damages and $40 million in punitive damages against Perry Homes in Cull & Cull v Perry Homes. It also awarded $7.1 million in actual damages and $4 million in punitive damages against the builder’s warranty provider, Warranty Underwriters Insurance. In October 1996, the Culls purchased a 2,900-square-foot house from Perry Homes for $233,730.00. By the following January, the house’s foundation was cracking. Although the couple testified that Perry Homes told them the house was just settling, the house soon had cracked walls, jammed windows and doors, and a punctured drainpipe, water damage, and mold. The Culls moved out for repairs. In 2000, the Culls sued Perry Homes; a year later they requested that the case be submitted to arbitration and were awarded $800,255. Perry appealed the arbitration award to the Texas Supreme Court, which in 2008 ruled that the Culls had waived their rights to arbitration. The Supreme Court vacated the arbiter’s ruling and sent the case back to the lower court where the jury awarded the multimillion award.
- In 2010, a trial court in Queens, New York, found that claims against a construction contractor for defective and incomplete work were enough to maintain a claim for punitive damages under the state’s consumer protection statute, Ma v. Peters Const. Grp., Inc., 958 N.Y.S.2d 646 (Sup. Ct. Queens Co. 2010). Additionally, in H. Novinson & Co., Inc. v. City of New York, the City of New York was found to have grounds for seeking punitive damages against a contractor who had billed for work that had not been performed. In that instance, public moneys were expended because of the contractor’s false billing. As a result, the tax base—and the public—were harmed.
Insurance products underwritten by Westport Insurance Corporation, First Specialty Insurance Corporation, North American Capacity Insurance Company, North American Specialty Insurance Company, North American Elite Insurance Company, Washington International Insurance Company, or Swiss Re International S.E. This document is intended to be distributed to licensed insurance producers only. Nonadmitted insurance products are available only through licensed surplus lines brokers and may not be available in all states.
In our ongoing efforts to improve the quality and relevance of our publications, we would like to know more about you.