Motel Settlement Failure

Hazard, Kentucky
Motel Settlement Failure

The Project

Motel Facility located in the Eastern Kentucky Coal Fields with 108 Rental Units in three, two story buildings and a single

story commercial building. All structures utilized masonry bearing wall construction with shallow foundations. The estimated construction cost is $3,800,000

The Site

The site is a relatively level former coal strip mine with uncompacted mine spoil fills to depths of 10 feet to over 100 feet.

The Problem

One of the two story rental units began to settle during construction and has never been placed into service. The damages are the total loss of the settled building, the lost revenues from the 36 rental units in the settled building, and the required underpinning of a second, adjacent rental building.

The Cause

Borings and test pits made by the geotechnical engineer on behalf of the general contractor failed to discover the range of depth of fills underlying the site. In addition, when settlements were first observed by the general contractor in the early stages of construction, he continued the work without contacting the design team or the geotechnical engineer.

The Resolution

The owner took bankruptcy due to inadequate cash flow from the property, and the lender took possession of the property. The lender has recovered a total of about $1,900,000 from the general contractor and the geotechnical engineer through arbitration and negotiated settlements, respectively.

The Attorney Clients

For the Owner:

Frost & Jacobs
1100 Vine Center Suite 340
Lexington , KY
Mr. Richard Getty
Ms. Denise McClelland
(606) 254-1100

For the Lender:

Taft, Stettinius & Hollister
1717 Dixie Highway.
Covington , KY 41011
Mr. Rob Craig
(606) 331-2838

For additional information concerning this case, you may contact:

STOKLEY-CHEEKS AND ASSOCIATES, INC
P. O. Box 130
Nicholasville , Kentucky 40340-0130
Cheeks@RichardCheeks.com