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CASE TYPE: Breach of contract, negligence, fraud CASE: Association of Apartment Owners of Royal Palm Resort v. Mitsui Construction Co. Ltd., No. CV1885-93 (Guam Super. Ct.) PLAINTIFFS’ ATTORNEYS: Richard T. Williams, Robert L. Ivey, Roger B. Coven, Paul S. Marks and Alex R. Baghdassarian of the Los Angeles office of Holland & Knight; and Thomas C. Sterling of Hagatna, Guam’s Klemm, Blair, Sterling & Johnson DEFENSE ATTORNEYS: Robert J. Cathcart, Mark R. Hartney and Seth T. Karpinski of Los Angeles’ Allen, Matkins, Leck, Gamble & Mallory, for Mitsui Construction Co.; Mark N. White of the San Francisco office of Pillsbury Winthrop, for SsangYong Engineering & Construction Co.; and David C. Romm and Scott A. Schipma of the Washington, D.C., office of Winston & Strawn, for Insurance Co. of North America JURY VERDICT: $73.4 MILLION This verdict gets the nomination as the most unusual of 2001. It comes from a court that is located 6,000 miles and six time zones from the mainland United States. The parties had to build their own courtroom because the existing courts were not equipped to handle a trial with multiple defendants and alternate jurors. The jury took more than a year to render its decision. And the trial is not completely over. While the jury returned a compensatory damages verdict, the punitives phase has yet to begin. It was scheduled for January, but delayed because one of the jurors gave birth just before New Year’s Eve. The lawsuit began shortly after an earthquake hit Tumon Bay in Guam on Aug. 8, 1993, causing massive damage to the 12-story Royal Palm Resort. The Royal Palm, a combination hotel and condominium, had been built as two connected but separate towers. As the magnitude 7.6 earthquake hit, the beachside tower collapsed onto its second floor, then toppled against the roadside tower. There were no deaths and few personal injuries and the roadside tower kept the buildings from falling further. But the structural damage to the Royal Palm Resort was so severe that the Guam Department of Public Works declared the two towers unsafe and ordered their demolition. The Royal Palm had been open for only three weeks. Kawasho International (Guam) Inc., the Guam division of the Japanese company Kawasho, had bought the land on Tumon Bay and hired Mitsui Construction Co. Ltd., a Japanese company, and SsangYong Engineering & Construction Co. Ltd., a Korean company, to build the project, paying more than $68 million. After the collapse of the Royal Palm, Kawasho, along with the owners and administrators of the condominiums in the Royal Palm, sued Mitsui and SsangYong, charging breach of contract, negligence and fraud. According to the plaintiffs’ complaint, “Mitsui and SsangYong had built a building which was destined to collapse.” Among other things, Mitsui and SsangYong deliberately left out reinforcing steel at almost every beam/column joint in the Royal Palm Resort buildings, the complaint alleged. There is a gag order on the attorneys, preventing them from discussing the claims or specifics about the trial. The action was set for trial in the Superior Court of Guam in Hagatna. But there has never been a trial of this magnitude in Hagatna. No courtroom in Guam could seat more than 16 jurors. Failing to find a courtroom big enough, the parties built their own. The plaintiffs and defendants leased part of a warehouse in the Ixora Inc. industrial complex near the airport and built it into a state-of-the-art courtroom, complete with small computer monitors for every person — 20 in all — in the jury box. All exhibits were digitized; transcripts and translations were immediate. The cost, according to a Guam newspaper, was $750,000. The trial began in February 2000. A verdict was not returned until Dec. 14, 2001. The jury awarded the plaintiffs $73.4 million, finding SsangYong 75 percent and Mitsui 25 percent responsible for the building’s collapse. The jury also found SsangYong had committed fraud, leaving the company at risk for punitives. The punitive phase has not yet begun.

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