BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.
To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.
To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.
LOS ANGELES-Lawsuits alleging that defective weld metal led to damage in steel-frame buildings from the 1994 Northridge earthquake likely will lead to more questions about who was at fault for the damage.
The complaints against Lincoln Electric Co. and other makers of the metal, filed just before the third anniversary of the Jan. 17, 1994, earthquake, open a potentially thorny and costly issue. After the earthquake, several Los Angeles-area buildings were discovered to have cracks in and around the areas where vertical columns and horizontal beams connect. Just who ultimately will be liable for repairs and retrofitting-which city engineers estimate could cost from $3,000 to $20,000 per connection-has yet to be established.
A possible class-action lawsuit is sure to raise questions beyond the quality of the weld metal, said a senior vp for a large property insurer who asked to remain anonymous because of the pending litigation. Those involved will want to know whether factors such as improper design, construction work quality or the adequacy of building codes played a role in the cracking.
Answers to those questions eventually could involve different insurers, such as those issuing coverage for errors and omission, liability or property.
"Certainly underwriters will be watching from that potential," the insurer executive said.
Plaintiffs in a suit seeking class-action status to represent Los Angeles County building owners are asking for more than $1 billion on behalf of hundreds of building owners in Los Angeles County. They claim they already have or will incur costs for inspection, retrofitting and repair as well as loss of rents and diminished property values.
The plaintiffs claim a weld metal known as E7OT-4 was the proximate cause of that cracking.
Cleveland-based Lincoln is the nation's biggest seller of E7OT-4, and so far is the only defendant described by company name in the suit, which has yet to be served on Lincoln or certified as a class action.
The plaintiffs accuse Lincoln of marketing a weld metal that poses an unreasonable risk of danger to building owners and the public. Lincoln and the other unnamed defendants are at fault because the manufacturers knew or could have known E7OT-4 was not tough enough to resist even a moderate earthquake, the suit alleges.
The suit was filed one day before the earthquake's anniversary, when a statute of limitations was scheduled to expire for such suits. Lincoln was hit the same day with three other individual suits making similar allegations, according to documentation provided by Lincoln. The company already was named in an earlier lawsuit arising from alleged property damage related to the Northridge earthquake.
Lincoln failed to provide builders with the correct guidelines and directions for use of its products, said Kenneth R. Chiate, an attorney representing the class-action plaintiffs for the Los Angeles firm of Pillsbury, Madison & Sutro.
"Their own internal documentation shows they did not adequately inform the industry as to the application," Mr. Chiate said in an interview.
A spokesman for Lincoln emphatically denied the allegations. He said requirements for using Lincoln's product are outlined in a code approved by a standard-setting organization named the American Welding Society.
When applied in conformance with that code, the weld metal has produced high-quality welds for more than 30 years, he said.
Still, as a result of building-frame cracks discovered after the Northridge earthquake, Los Angeles has prohibited the use of E7OT-4 for major building connections, said Richard Holguin, chief of the city's engineering bureau.
But there are other building construction types, such as masonry, wood frame and "tilt up" styles that pose a greater danger to loss of life than do steel-frame buildings, said Fred Turner, a structural engineer with the California Seismic Safety Commission.
"None of the steel-frame buildings collapsed in the Northridge earthquake," he said. "From our standpoint, there are other far more vulnerable buildings we should be much more concerned about than steel-frame buildings."
So far only two plaintiffs have been named in the proposed class-action suit. They are the Automobile Club of Southern California, which demolished a building destroyed by the earthquake, and the Pacific Design Center, a huge, multistory marketplace for home decorating products.
Tests on the Pacific Design property did not reveal frame or weld cracking, Mr. Chiate said. But that is not the issue, he added.
"The point is that all these buildings in these seismic sensitive areas now have the equivalent of a potential inherent defect in the connections," he explained. "Whether they were damaged or not does not really make a difference, except as to the magnitude of the loss."
Other building owners are backing the lawsuit but do not wish to be named yet, Mr. Chiate said. Additionally, he expects dozens, or maybe hundreds, of other building owners to join in.
To date, many observers in the property insurance market have taken a wait-and-see attitude toward the steel-frame cracking issue, said a Los Angeles property manager for a global brokerage who asked to remain anonymous.
But the possible class-action lawsuit could open a Pandora's box by encouraging other building owners to take similar steps. "I think a lot of people will be watching it to see what happens," the broker said.