A general contractor who settled a lawsuit with a homeowner after problems arose with the new residence should be able to have a trial court apportion the fault he shared with his subcontractors, his attorney told the Arkansas Supreme Court on Thursday.

Dean Overstreet, an attorney for Little Rock-based J-McDaniel Construction Co., said his client still has the ability to recover damages from the subcontractors who worked on the house, despite settling with the homeowner for the costs of the repairs. He said his client is still entitled to "contribution," which is the right to recover payment from people who share a debt when that debt is paid by a single person.

"At the end of the day ... it's clear that the right to contribution still exists and there has to be a way to prorate that," Overstreet told the court.

J-McDaniel performed no construction work, but hired several contractors to build the house at 16 Glasgow Court in Little Rock. The subcontractors, Robert Bostic Hauling and Excavating Inc., Dale Peters Plumbing Ltd. and Esquire Marble Co., performed various tasks, including preparing the site, laying the foundation and installing plumbing.

It was sold in 2006.

After the homeowners closed on the house, they began to notice various structural problems and filed a lawsuit against J-McDaniel for breach of implied warranty and negligence in 2009. The contractor named the subcontractors in a third-party complaint, arguing that they should pay for any losses J-McDaniel would suffer.

The subcontractors asked the trial court to be removed from the case, citing a three-year statute of limitations on negligence claims. Pulaski County Circuit Judge Tim Fox granted the motion without explanation, and they were dismissed from the suit on Aug. 22, 2011.

After the subcontractors were dismissed, J-McDaniel settled with the landowners, agreeing to pay $121,675 for all claims against the contractor and subcontractors but continued to deny liability. Fox dismissed the case on Dec. 20, 2011.

Overstreet appealed Fox's dismissal of the subcontractors, arguing that his client should still be allowed to collect from them. He wrote in court filings that the statute of limitations for contribution did not begin until the contractor suffered a loss, which happened when the company paid more than its share in the settlement.

Jamie Jones, an attorney for the subcontractors, told the court that J-McDaniel's third-party complaint became moot when the company signed off on a settlement with the homeowner. Jones wrote that Arkansas Code Annotated 16-61-202 bars the claim of contribution against the contractors because they were not a party to the settlement.

That statute states, in part, that "A joint tortfeasor who enters into a settlement with the injured person is not entitled to recover contribution from another joint tortfeasor whose liability to the injured person is not extinguished by the settlement."

A 2013 settlement document filed with the trial court included language releasing the subcontractors from any claims by the homeowner, but Jones argued there was no evidence that the original 2011 settlement extinguished their liability. She wrote in court filings that the 2011 agreement is the one that is binding and that it was never made available to the lower court.

Jones said that it would only be an "academic exercise" to go back to the trial court and assign fault and that the contractor was asking to "rewind the clock" to before the settlement.

"That is no longer a viable option," Jones said.

Metro on 06/08/2014