The owner of this multi$-$tenant retail facility is a $65-$year$-$old retired construction engineer

professor. They has invested their life savings into the building and acts as their own property

manager. The facility received significant cosmetic and structural damage during an

earthquake. All the tenants were evacuated until repairs could be completed. The owner

immediately employed an architect, a structural engineer, and a general contractor to

implement repairs. The owner felt in this manner they were acting in the best interest of

themself and the tenants. By expediting repairs, they would get the tenants back into the

facility, thereby minimizing loss of sales. They felt they were also looking out for the insurance

company. The design teams$$ corrections were well$-$documented, and the contractor$$s costs

were tracked on a time and material basis. The insurance company also immediately mobilized

but did not take any action. They preferred to sit back and watch the corrective work take

place. Upon completion of this $$10$ million repair project, the insurance company then

questioned whether the fixes were proper and whether the actual costs reported were accurate.

They also referred to a provision in the property insurance policy, which required the owner to

obtain competitive bids on all portions of repair. The insurance company ultimately offered the

owner $80$ cents on the dollar for repairs, which the owner passed through and offered to both

his design and construction teams.

$$ Will they accept?

$$ Who loses in this situation?

$$ What should the different team members have done to have assured $100\%$ collection

on the repairs?

$$ Is this a standard situation in the insurance claim arena?

$$ If the owner sues the insurance company, will he collect $100\%$ of costs incurred by

himself and his agents?

$$ Will the tenants pitch in$?$

$$ What legal recourse does the owner, tenant and contractors$/$subcontractors have if

any?