Florida Construction Lawyer Blog

A 5-2 majority decision by the Florida Supreme Court in the case of Tiara Condominium Association v. Marsh & McLennan limits the legal principle known as the "economic loss rule" only to product liability cases, thereby allowing many claims for breach of contract in the state to be accompanied by tort claims of negligence. The ruling allows the association to proceed with its lawsuit seeking to recover approximately $50 million in damages from its insurance broker, which it claims knew the 42-story oceanfront tower on Singer Island in Palm Beach County was underinsured and failed to tell the association.

The lawsuit stems from the more than $100 million in damages that the luxury condominium tower sustained as a result of two hurricanes in 2004. After settling with the insurance company for $89 million, the association then sued the broker for the remaining balance of the approximately $140 million in repairs, claiming breach of contract, negligent misrepresentation, breach of the implied covenant of good faith and fair dealing, negligence, and breach of fiduciary duty. The trial court in 2009 dismissed the lawsuit, and the association assessed each owner between $110,000 and $150,000 for the repairs and filed an appeal. The Eleventh Circuit Court of Appeals concluded that judgment in favor of the broker was proper as to the breach of contract, negligent misrepresentation and breach of implied covenant of good faith and fair dealing claims. However, as to the negligence and breach of fiduciary duty claims, a matter of state law, the Eleventh Circuit Court of Appeals directed a certified question to the Florida Supreme Court which restated the certified question as follows:

Does the economic loss rule bar an insured's suit against an insurance broker where the parties are in contractual privity with one another and the damages sought are solely for economic losses?

The majority opinion found that the economic loss rule did not bar the community association's lawsuit, and held that the economic loss rule only applies in the products liability context.

The legal principle of the economic loss rule originated as a means of limiting potentially unbounded losses based on a customer's expected profits from the use of a product that turned out to be defective. The most oft-cited case originating the rule involves a delivery company that sued a truck manufacturer for its lost profits resulting from a truck's defects that caused it to cease functioning. The court ruled that damages for lost profits and for money paid on the purchase price were appropriate under breach of warranty. However, the delivery company could not pursue the same claim in tort since it suffered only economic loss. The court reasoned that contract law was best to resolve economic losses as the parties are able to negotiate remedies for nonperformance. Tort law was more appropriate to address personal injury and damage to other property. Each state addresses the economic loss rule differently and Florida, while initially expanding the economic loss rule, began limiting the economic loss rule to its principled origins. With this decision, the Florida Supreme Court has now returned the economic loss rule to its original application and has limited it to products liability cases.

The dissenting opinion asserts that the majority expanded the use of "tort law at a cost to Florida's contract law." The number of tort claims will likely increase as a party may bring tort claims along with its breach of contract claim and recover remedies that may not otherwise be available under the contract. Our construction law attorneys write regularly in this blog about important business and legal matters for the construction industry in Florida, and we encourage industry followers to submit their email address in the subscription box at the top right of the blog in order to automatically receive all of our future articles.

Firm partners Michael J. Kurzman and Elisabeth D. Kozlow will be playing important roles at the Construction Defect Process full-day seminars taking place in Miami on Wednesday, May 1, and in Orlando on Friday, May 3. Michael will be serving as the co-chair and one of the speakers for these seminars, which qualify for 7.5 hours of continuing education credits for Florida contractors, engineers and attorneys, and 6.5 AIA LUs for architects. Elisabeth will also be one of the featured speakers, and she will be presenting the first session on the morning of the event titled "Construction Contract Terms Relevant to Warranty and Defect Claims."

All of the sessions at this seminar will focus on the latest developments and evolving solutions in construction defects. They will cover how to minimize the risk of construction defects, deal with them when they occur, and assess insurance coverage needs.

Michael will introduce Elisabeth and conduct the opening remarks for the seminars together with his fellow co-chair Miroslav "Misha" Mladenovic, PE, of M2E Consulting Engineers. Elisabeth will then focus her discussion on methods for avoiding warranty and defect problems before they occur, the terms to consider in construction contracts, typical and atypical contract forms, and a number of insurance considerations. In the afternoon, Michael and Misha will conduct a session titled "The Repair Process," which will focus on the risks associated with repair work, claims of lien for non-payment of repair work, insurance, and surety liability for repair work.

The Miami event on May 1 will take place at the Hampton Inn & Suites, 50 S.W. 12th Street in the Brickell area, and the May 3 seminar will take place at the Crowne Plaza at 304 West Colonial Drive in Orlando. For additional information and online registration, which ranges from $327 to $525, visit www.TheSeminarGroup.net or call toll-free at 1-800-574-4852.

The Florida Supreme Court recently issued a decision that has significant implications for contractors, subcontractors and property owners in Florida. On January 24, 2013, the court ruled in the case of Earth Trades, Inc., et al., v. T&G Corporation that Florida law precludes an unlicensed subcontractor from employing the common law defense of in pari delicto - referring to equal wrongdoers - by arguing that the general contractor knew or should have known that the subcontractor did not hold the required state licenses for the work to be performed.

As the general contractor, T&G Corp. subcontracted with Earth Trades to perform site work on a parking garage construction project. When T&G stopped making payments, Earth Trades sued T&G for breach of contract for nonpayment. T&G counterclaimed claiming that Earth Trades breached the contract and was unlicensed, therefore its breach of contract claim against T&G was barred under Florida Statute 489.128 which provides that: "As a matter of public policy, contracts entered into on or after October 1, 1990, by an unlicensed contractor shall be unenforceable in law or in equity by the unlicensed contractor."

Earth Trades responded by arguing that T&G should be barred from enforcing the construction contract because it knew or should have learned during the performance of the work that Earth Trades did not hold the required state license. As a result, the subcontractor claimed that T&G was equally at fault and could not recover against Earth Trades because both parties stand in pari delicto.

The trial court in Orange County, Fla., rejected Earth Trades' arguments and granted the motion for summary judgment by T&G, and the Fifth District Court of Appeal affirmed the decision. Because this decision expressly and directly conflicted with the opinion by the Third District Court of Appeal in the case of Austin Building Co. v. Rago, Ltd. in 2011, the Supreme Court of Florida had jurisdiction to review the case.

The Supreme Court upheld the Fifth DCA's opinion, noting that Section 489.128, Florida Statutes plainly places the onus for unlicensed contracting on the unlicensed contractor. The court concluded that the state legislature amended the statute in 2003 and stated that its intent was to "clarify that the prohibition on enforcement of construction contracts extends only to enforcement by the unlicensed contractor." The defense of in pari delicto requires that the parties be wrongdoers of relatively equal fault. Under Section 489.128, Florida Statutes, the fault of the person or entity engaging in unlicensed contracting is not substantially equal to that of the party who merely hires a contractor with knowledge of the contractor's unlicensed status. Accordingly, even if it was proven that T&G knew Earth Trades was unlicensed, such knowledge, as a matter of law, would be insufficient to place the parties in pari delicto. The Supreme Court disapproved of the Third DCA's decision in the Austin Building case to the extent that it held that under section 489.128, a party's knowledge that a contractor is unlicensed places the parties in pari delicto.

This decision is yet another reminder of the perils of working without the required state licenses for contractors and subcontractors in Florida. Our construction law attorneys and I will continue to monitor and write about important court rulings for the construction industry in Florida, and we encourage industry followers to submit their email address in the subscription box at the top right of the blog in order to receive all of our future articles.

The firm's Stuart Sobel prevailed in securing a final judgment this week in Monroe County circuit court in favor of his client Layne Heavy Civil, Inc. After a rigorous selection process, Layne was chosen by the Florida Keys Aqueduct Authority to build the Outer Islands Cudjoe Regional Wastewater System, the largest ever sewer construction project in Monroe County. Layne's $79.3 million winning proposal was $6 million less than that of Douglas N. Higgins, Inc. Higgins sued the Aqueduct Authority in Monroe County Circuit Court, seeking to invalidate the award to Layne and to have the contract awarded to Higgins. Layne, through Sobel and his local co-counsel, Barton Smith, intervened in Higgins' challenge of the Aqueduct Authority. Monroe County also intervened to support the award to Layne.

Higgins' lawsuit alleged that Layne's proposal did not meet all of the bid requirements and "was non-responsive to the Request for Proposal" because it lacked unit prices, cost and resource loaded schedules, preliminary designs and pertinent financial information. The suit alleged that Aqueduct Authority's evaluation committee overlooked material deviations from the request for proposals and "disregarded its own evaluation form and procedures."

In a one-day trial, Sobel, Smith and the Aqueduct Authority's counsel, Fred Springer, successfully demonstrated to the court that any irregularity in Layne's bid was minor and was waivable by the Aqueduct Authority for the benefit of the taxpayers, pursuant to the law and the contractual reservation of the Authority's right to waive irregularities in the Request for Proposal. In addition, they demonstrated that Higgins' proposal suffered from the same types of infirmities that Higgins alleged against Layne. The court's final judgment found that Higgins failed to prove that Layne's bid was non-responsive, failed to prove that Higgins' own bid was responsive, failed to prove that the Aqueduct Authority's award of the contract to Layne violated applicable law, and failed to prove that the Aqueduct Authority was obligated to award the contract to Higgins. Accordingly, the judgment was entered in favor of Florida Keys Aqueduct Authority, Monroe County and Layne Heavy Civil.

The lawsuit could have jeopardized $30 million in state funding for this important project. Monroe County received the $30 million last year from the state legislature, but the appropriation stipulated that construction contracts for the treatment system must be signed by March 1. The county was concerned that the lawsuit could have nullified the contract and, as a result of the ensuing delay, negated the state funding.

Layne is a leading supplier of infra-structure with a world-wide reputation for its high quality work. Sobel says that the successful defense of this bid protest was especially satisfying given the stature of his client and the extraordinarily compressed time period for the preparation and presentation of Layne's defense. The entire matter was resolved in less than one month from the time the bid protest was filed.

Our firm is pleased that Stuart and his team were able to validate the rights of this important client.

On January 31, 2013, the firm's Michael Clark spoke as part of a three-person panel during the American Bar Association Forum on the Construction Industry's Mid-Winter Meeting. The seminar, titled "It's Miller (Act) Time," provided an overview and in-depth discussion of both the Federal Miller Act and Florida's "Little Miller Act."

Michael discussed how both the "big" and "little" Miller Acts require general contractors to secure payment and performance bonds for public projects with a contract price of over $100,000 ($200,000 for municipal projects in Florida). The purpose of the performance bond is to protect the government by providing an added layer of security to ensure the work is performed pursuant to the contract. The purpose of the payment bond is to protect the subcontractors, suppliers and laborers, by providing them another layer of security upon which they can rely for payment.

Both the federal and state Miller Acts have requirements with which one must comply both at the commencement of work and prior to making a claim. Failure to comply with those requirements may result in a claimant being unable to recover. Further, both Miller Acts have nuances as to what types of entities can and cannot make claims and what damages are recoverable.

Prior to commencing work or providing materials to a government project, a subcontractor, laborer or supplier should seek legal counsel to ensure its rights are protected.

If you have any questions about the Federal Miller Act, or its Florida counterpart, contact Michael Clark directly at mclark@siegfriedlaw.com or 305.460.2964.

Stuart Sobel's work in securing a $58.5 million settlement for the builder of the new PortMiami tunnel was the subject of a front-page article in today's Daily Business Review titled "Dispute Resolution Board Reaches Rapid Settlement with PortMiami Tunnel Builder." The article written by the newspaper's Steve Plunkett reads:

"Imagine securing a $58.5 million settlement from a dispute panel that bans lawyers from the room.

That's the scenario Coral Gables attorney Stuart Sobel faced while representing Bouygues Civil Works Florida Inc., which is constructing the $1 billion tunnel that will connect PortMiami to I-395.

It didn't surprise Sobel -- he helped set up the tunnel's Technical Dispute Resolution Board when his client won the project."

The report chronicles how Stuart devoted many hours to preparing for the hearings on liability before the Technical Dispute Resolution Board outside of normal schedules.

"My work was at night, trying to anticipate the issues that were going to be discussed the next day," he says in the article.

The article reads:

"For the board presentation, Sobel put together PowerPoint presentations for his witnesses to use and coached them on how to answer the panel's anticipated questions. The board heard evidence for 13 days before making its decision largely in favor of Bouygues."

The article also notes that Stuart "used an early variation of a dispute resolution board for the Adrienne Arsht Center for the Performing Arts, which opened in 2006." He was involved in the negotiation of that contract on behalf of the contractor.

The article explains that the tunnel dispute was over extra work for grouting the limestone as the company dug. "We determined there was a changed condition. The geologic conditions were different than what we'd been led to expect," Stuart notes.

Stuart is also quoted discussing the merits of using Technical Dispute Resolution Boards for major construction projects. "The concept is you have construction people dealing with construction problems," he says:

"Sobel said having the dispute panel of construction laymen is much quicker than going to arbitration because the discovery process in arbitration could take eight to 10 months. Along with the added time would be added attorney fees.

"That's why you have tunnelers as judges," he said.

Sobel said he urges his clients planning malls, apartment houses, courthouses and other large construction projects to consider establishing similar boards. The tunnel panel meets quarterly whether or not there are disagreements.

"Dispute resolution boards for complex projects, in my view, are absolutely the way to go," Sobel said. "At the first whiff of a problem you bring it to the dispute panel."

Stuart's work was geared toward obtaining a favorable ruling on his client's entitlement to compensation. Thereafter, the client negotiated the financial resolution directly with the Florida Department of Transportation.

On behalf of all of the attorneys and professionals at our firm, we congratulate Stuart on achieving this fantastic result for the PortMiami tunnel builder that caught the attention of the Daily Business Review.

In December, firm partners Helio De La Torre and Laura M. Manning-Hudson, together with of-counsel attorney H. Hugh McConnell, prevailed in their appeal on behalf of the developer of the 28-story Courvoisier Courts condominium tower on Miami's Brickell Key before the Third District Court of Appeal. The appellate court found that the lower court erred when it entered a Final Judgment requiring the developer to relinquish to the association all of the parking spaces and storage areas that it assigned to an unsold penthouse prior to turning over control of the property to the association.

The appellate court's decision in the case of Courvoisier Courts, LLC v. Courvoisier Courts Condominium Association, Inc. hinged on the association's declaration of condominium, which states that the association would receive all parking spaces and storage areas that are left unassigned after the developer has sold all of its units. The panel found that the parking and storage spaces in question did not become the property of the association upon turnover, and the developer retained the right to assign the exclusive use of these limited common elements until such time as it had sold all of its units.

A report on the ruling from the Daily Business Review on December 27, 2012 quoted De La Torre indicating that "The lower court ruling said basically that all of the assignments made since the turnover were invalid. [The appellate decision] means we get our parking spaces back, [and] it's a very significant opinion." He, Manning-Hudson and McConnell believe that the trial court's interpretation of the condominium's declaration in this case could have set a challenging precedent for condominium developers in Florida.

Click here to read the Third District Court of Appeal's opinion for the case.

The attorneys and professionals of Siegfried, Rivera, Lerner, De La Torre & Sobel, P.A. would like to congratulate partners Steven M. Siegfried, Lisa A. Lerner and Stuart Sobel on being selected for inclusion in the 2013 edition of the peer-reviewed Best Lawyers in America listing.

Best Lawyers is the oldest and one of the most respected peer-review publications in the legal profession. Its lists are compiled by conducting peer-review surveys in which tens of thousands of leading lawyers confidentially evaluate their professional peers. Inclusion in the 2013 edition of The Best Lawyers In America is based on more than 4.3 million detailed evaluations of lawyers by other lawyers. Additional information is available at www.bestlawyers.com.

This article by Stuart Sobel appeared in the Daily Business Review on Oct. 24:

Board of Contributors: Avoiding Disputes Altogether Saves Money, Time, Relationships

By Stuart Sobel

Much has been written about alternative dispute resolution techniques, such as arbitration or dispute review boards. They are alternatives to traditional litigation that are often viewed as preferable to litigation in some respects. They may be more private, final and streamlined, for example.

But they can also be inferior to litigation. There is a limited ability to discover opposing evidence and, because of limited appeal, mistakes cannot easily be remedied.

And like litigation alternative dispute resolution still only comes into play after a dispute has ripened.

Traditional and alternative dispute resolution both take a toll on the clients who spend time and money with lawyers instead of their business. They also damage the clients' relationship. It is not likely that a dispute, played out through any resolution process, will leave the parties willing to continue doing business in the future.

Making matters worse, dispute resolution has become increasingly uncertain.

Courts have been clogged with foreclosures, distracting judges from devoting the time necessary to properly consider and adjudicate complex business disputes. Court clerk budgets have been slashed, making it more difficult for the court staff to have files up to date and hearing times promptly available.

Courts have more matters and less staff with which to address their increased case load. Results become more erratic, slower and less predictable. At its heart, an effective dispute resolution process must be predictable; a result -- or at least a range of outcomes -- given a set of facts should be likely.

Unfortunately, that is no longer the case in too many instances.

The recent decision by the Second District Court of Appeal in the case of Vila & Son Landscaping Corporation v. Posen Construction, Inc. addressed the issue of whether a contractor can use the termination for convenience clause in its contract with a subcontractor to terminate the subcontract and enter into another subcontract with a different subcontractor at a lower price.

In this case, Posen, the contractor, terminated its subcontract with Vila, the subcontractor, after it obtained a lower price for the same work from another subcontractor. Vila sued, arguing that Posen was obligated to exercise its right to terminate for convenience in good faith, and terminating the contract solely because it found a lower bidder for the work constituted bad faith and, therefore, a breach of contract. Without the imposition of good faith limitations, Vila argued, the termination for convenience provision reduces the contract to an illusory promise, lacking consideration.

The appellate court rejected these arguments. It noted in its decision that it found Vila's reliance on case law discussing a termination of convenience clause in a federal contract of limited value when interpreting a contract between private parties. Instead, the court looked to common law contract principles as articulated by Florida's courts. As to Vila's argument that the promise made by the party with the right of termination is illusory in nature, the court held that because the termination for convenience provision requires written notice, valid consideration exists and the promise is not illusory. It found that Posen invoked the termination for convenience provision of its subcontract with Vila and followed the agreed upon procedures by supplying written notice. While the consideration may be thin, it is sufficient if a party is required to do something that it is not legally bound to perform.

The appellate court also found that Vila failed to recognize the standard that is required to determine whether the implied covenant of good faith and fair dealing has been breached, namely that a party to a contract has acted contrary to the reasonable expectations of the parties in performing the contract. Given the plain language of the subcontract and its termination for convenience clause, the court was unable to find how Posen's decision to use the termination for convenience provision to obtain the services for a better price is contrary to "the reasonable expectations of the contracting parties."

The court concluded that because Vila did not establish that Posen wrongfully terminated the subcontract, the trial court erred when it failed to enter a judgment in Posen's favor on Vila's claim for breach of contract.

This decision has further clarified how contractors can terminate subcontracts by exercising their rights under a termination for convenience clause. Our South Florida construction law attorneys will continue to monitor and write about important decisions such as this for the construction industry in Florida, and we encourage industry followers to enter their email address in the subscription box at the top right of the blog in order to receive all of our future articles.

The firm's Stuart Sobel is representing ADF Steel Corp. in a lawsuit filed against the U.S. subsidiary of Canada-based ADF Group Inc. by WTC Tower 1 LLC, an assignee of 1 World Trade Center LLC owned by the Port Authority of New York and New Jersey, alleging that it has breached contractual obligations by refusing to ship the steel for the 458-foot antenna that will top the iconic new building that was originally dubbed the "Freedom Tower."

Stuart is quoted in an article on the lawsuit appearing in the Canadian newspaper The Globe and Mail indicating that the parties are trying to negotiate a resolution. He also disputes the complaint's allegation that the company had held up any steel shipments. "The site isn't really ready for the steel," Stuart explains in the article. "It's being sent to a marshalling yard." Click here to read the article in the newspaper's website. Moreover, Stuart says, ADF has performed its obligation in the face of daunting difficulties and has not, in fact, held up any shipments.

According to a statement released by ADF earlier this week, the company believes that the allegations in the lawsuit are without merit and intends to take all appropriate actions to defend its position. Discussions are currently ongoing between representatives of ADF and the Port Authority of New York and New Jersey. Unless the parties reach an agreement before then, the complaint is scheduled to be heard by the Supreme Court of New York on or about October 26, 2012.

ADF Group Inc. is a North American leader in the design and engineering of connections, fabrication and installation of complex steel structures, heavy steel built-ups, as well as in miscellaneous and architectural metals for the non-residential construction industry. ADF Group Inc. is one of the few players in the industry capable of handling highly technically complex mega projects on fast-track schedules in the commercial, institutional, industrial and public sectors. In Miami, ADF has provided the structural steel for the new terminal at the Miami International Airport, the Miami Performing Arts Center and the New World Symphony.

Stuart and Siegfried, Rivera, Lerner, De La Torre & Sobel are extremely proud to have served as ADF's American counsel since 1998.

Some major changes are now in effect for new applicants for contractor licenses in Florida, and the submission process has become simpler and less time consuming as a result. The Department of Business and Professional Regulation and the Construction Industry Licensing Board have revised their application process in an effort to avoid confusion and reduce the amount of time it takes to approve a license.

One of the most significant changes is that applicants are no longer required to include a third-party verification of their experience and qualifications. Instead, they are now required to attest to their experience under penalty of perjury, and they may be subject to disciplinary action for including false information on their application.

The new application does, however, maintain the requirement for applicants to submit a credit report that includes a FICO or Beacon score, which the board requires to be more than 660. If the score is under 660, applicants must obtain a licensing bond or letter of credit for $20,000 for Division I contractors and $10,000 for Division II contractors. The amount of the required bond or letter of credit may be reduced to $10,000 for Division I contractors and $5,000 for Division II contractors by taking a board approved financial responsibility course, and information on these requirements and courses can be found by clicking here.

The new application package and procedures, which took effect on July 16, should effectively streamline the licensure process and reduce the number of deficient applications. The new application forms feature clearer instructions, significantly diminish the amount of paperwork that is required, and provide clear criteria to establish financial stability/responsibility and work experience. Click here to access the different categories of applications from the Construction Industry Licensing Board.

A recent ruling by the Florida Fourth District Court of Appeal concludes that contractors are allowed to use bids from subcontractors in their final master proposals without it constituting an agreement to retain the subcontractor if the work is ultimately awarded. The appellate court's ruling in the case of West Construction, Inc. v. Florida Blacktop, Inc. reversed the trial court decision, which would have infringed upon the "equities of the bidding process."

The jury, at the trial court level, found that the contractor and subcontractor entered into an oral agreement whereby the contractor would use the subcontractor if the contractor was awarded the project. Since the contractor retained a different subcontractor, the jury found that the contractor breached the oral contract and awarded damages to the subcontractor.

The appellate court held that the parties' dealings did not give rise to an enforceable contract. For there to be an enforceable contract, there must be an offer, an acceptance, consideration, and sufficient specification of terms so that the obligations involved can be ascertained. Since a subcontractor's bid is nothing more than an offer to perform the subcontract under specified terms, the appellate court was left to determine whether the general contractor had accepted the bid. While there was no express oral or written acceptance of the subcontractor's bid in this case, the appellate court reviewed whether the contractor had accepted the bid through his actions and the circumstances surrounding the subcontractor's bid. Relying on the "settled common law contract principle that utilizing a subcontractor's bid in submitting the prime or general contract bid does not, without more, constitute an acceptance of the subcontractor's offer," the appellate court determined that the contractor did not accept the subcontractor's offer and there was no enforceable contract.

In support of its holding, the appellate court considered the fact that general contractors must review and select from a number of bids from subcontractors in preparing their master proposals for projects, and they cannot be required to accept the bids of the subcontractors whose figures are used in the master proposal if the job is awarded. Reliability, quality of work, and capability to handle the job are all considerations weighed by the general contractor in choosing subcontractors. Imposing a strict requirement to contract with a subcontractor because a particular bid was used would remove a considerable amount of needed flexibility for general contractors.

Our construction law attorneys regularly write about important issues affecting the construction industry in this blog, and we encourage industry followers to submit their email address in the subscription box at the top right of the blog in order to receive all of our future articles.

One of the most recent articles by our attorneys in publications covering the industries that we serve was authored by B. Michael Clark, Jr. and appeared on the cover page of the latest issue of the Newsletter from Division 7 of American Bar Association Forum on the Construction Industry. The article, titled "Subordinate Lienors Must Explore All Options for Payment," focuses on one of perhaps the most pressing legal and business issue for contractors, subcontractors and suppliers today: securing payment in foreclosure cases in which they are a subordinate lienor to the foreclosing lender.

Michael writes in the article that the contractor, subcontractor or supplier in these cases may be able to impose an equitable lien in order to secure payment from undisbursed construction loan funds or the lender's mortgage interest on the property. In some states, including Florida, the construction must be complete in order to impose an equitable lien upon undisbursed construction loan proceeds. In addition, Florida courts allow the imposition of an equitable lien superior to the lender's mortgage interest when the lender has committed some fraud or misrepresentation, such as misrepresenting that the loan is not in default.

The article also notes that Florida law stipulates that lenders which fail to give the required notice to contractors that they intend to stop disbursing funds may be liable to contractors that continue working based upon the expectation of payment.

Michael concludes that the conduct or misconduct of the lenders in these cases must be closely scrutinized in order to determine whether they have an obligation to pay. Click here to read the full article, and please contact Michael with any questions regarding the information that he covers in the article via email at mclark@siegfriedlaw.com or by calling him at (305) 442-3334.

I recently had the honor of appearing as a special guest on the ArchiTalk radio show airing on 880-AM "The Biz" in South Florida on Mondays at 11 a.m. Local architects Sebastian Eilert and Jane Decker host the show, which focuses on what's happening in the South Florida architecture world and beyond. Additional info on the show can be found at www.architalkradio.com.

My discussion with Sebastian and Jane focused on the current trends in South Florida real estate and related litigation, and how these trends impact architects. We discussed the statute of repose for design and construction defect claims for condominiums, which is ten years, and how litigation that commences before the ten year mark can continue for years after it. This served as a reminder about the importance of Errors and Omissions insurance for architects, who are often viewed as being a viable target for litigation by associations for latent defects in the years immediately prior to the expiration of the ten year statute of repose.

We discussed how architects should protect themselves and limit their liability by using the standard AIA contract provisions noting that they are not providing certification or supervisory services over the work of the general contractor at the jobsite.

We also discussed the importance for architects who are working on renovation projects at condominiums to ensure that their client, the unit owner, is aware of the association's rules and regulations regarding repair work, including the time of day work can take place and the importance of ensuring that all necessary permits are in place before the start of the project. I also recommended that architects should include similar requirements in their plans and specifications to make certain that the contractor is bound to comply with these requirements, as the contractor will ultimately be performing the work.

Click here to listen to my appearance on the show, and feel free to contact me with any questions about the information that I cover via email at nsiegfried@siegfriedlaw.com or by calling me at (305) 442-3334.