{"id":898609,"date":"2021-03-31T11:39:21","date_gmt":"2021-03-31T17:39:21","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=898609"},"modified":"2021-03-31T11:39:26","modified_gmt":"2021-03-31T17:39:26","slug":"collateral-source-rule-construction-disputes","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/collateral-source-rule-construction-disputes\/","title":{"rendered":"Court of Appeals Applies Collateral Source Rule in Construction Dispute"},"content":{"rendered":"\n

Joseph Davies | Smith Debnam Narron Drake Saintsing & Myers<\/a><\/p>\n\n\n\n

Legal doctrines develop over time, with judges determined to allocate blame and risk fairly. One such doctrine \u2013 an old one \u2013 is the \u201cone recovery\u201d rule. The one recovery rule basically means that an injured party should only recover once for any particular injury. In practice, that usually means that if there are two people responsible for a plaintiff\u2019s particular injury (let\u2019s say $100,000 in damages) and one of them pays $75,000, then the plaintiff can only recover $25,000 from the other. However, as with every rule, this one has exceptions.<\/p>\n\n\n\n

For the first time, the North Carolina Court of Appeals recently applied one of those exceptions \u2013 the collateral source rule<\/a> \u2013 to\u00a0construction disputes. In\u00a0Caroline-A-Contracting, LLC v. J. Scott Campell Construction Company<\/em>, the court explained the basis for the exception and why it applied to the fairly unusual facts of this case. In general, the idea is that it is unfair to allow someone who caused an injury to avoid the full cost because of payments that the injured party recovered from some unrelated (or\u00a0collateral<\/em>) party. As the court noted in its conclusion, to the extent such payments overlap and allow a double recovery,\u00a0\u201cin this situation, the injured party\u2026not the tortfeasor\u2026should reap any such windfall.\u201d<\/em>\u00a0As noted above, however, the facts of this case were somewhat unusual.<\/p>\n\n\n\n

The collateral source rule most frequently arises in insurance coverage cases (the insurance company being the collateral source), but here it was the result of independent failures by two different subcontractors regarding the same project. The general contractor hired one subcontractor to build a retaining wall. When it was unable to do so, that subcontractor itself hired another company \u2013 the plaintiff in this case \u2013 to correct its work and build the wall. The plaintiff, however, was similarly unable to complete the work adequately. The general contractor then hired a third company to correct the errors of the previous attempts. Caroline-A-Contracting sued both the original subcontractor (with whom it had a contract) and the general contractor (Campbell Construction, whom it did not). The general contractor alleged counterclaims based on Caroline-A-Contracting\u2019s negligence (not any breach of contract). Caroline-A-Contracting argued that any amounts awarded to Campbell Construction on its counterclaim should be offset by amounts that it had previously recovered from the original subcontractor. The trial court determined that the original subcontractor was in no way related to Caroline-A-Contracting (it was not acting as its agent, for example) and that its payments resulted from its own failures and were independent of the plaintiff\u2019s negligence. Therefore, it was a collateral source, and any payments it made would not reduce Caroline-A-Contracting\u2019s liability for damages caused by its own negligence.<\/p>\n\n\n\n

The Court of Appeals affirmed this decision and noted that it appeared to be the first time the doctrine was applied in construction disputes. Because of the unusual facts, the application of the collateral source rule in construction disputes may be limited, but this case confirms that it does, in fact, apply.<\/p>\n","protected":false},"excerpt":{"rendered":"

Joseph Davies | Smith Debnam Narron Drake Saintsing & Myers Legal doctrines develop over time, with judges determined to allocate blame and risk fairly. One such doctrine \u2013 an old one \u2013 is the \u201cone recovery\u201d rule. The one recovery rule basically means that an injured party should only recover once for any particular injury.… Continue reading Court of Appeals Applies Collateral Source Rule in Construction Dispute<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[14],"tags":[9895,11443,204],"class_list":["post-898609","post","type-post","status-publish","format-standard","hentry","category-construction-2","tag-advise-consult","tag-collateral-source-rule","tag-construction-disputes","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nCourt of Appeals Applies Collateral Source Rule in Construction Dispute - 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