Florida Construction Lawyer Blog

A recent ruling by the Second District Court of Appeal in a lawsuit against Raymond James Financial Services for securities violations has major implications for the use of arbitration to resolve construction disputes. The court ruled that Florida's statute of limitations do not apply to arbitration unless the contract between the parties expressly provides for their application. This decision has far-reaching implications for those construction contracts which call for arbitration to resolve disputes. Until the decision is reviewed by the Florida Supreme Court or another district court, parties to a construction contract could potentially be liable for construction defects indefinitely if their contract calls for arbitration and does not specifically state that Florida's statute of limitations are applicable.

The Raymond James case hinges on the language in the contract, which fails to expressly state that Florida's statute of limitations are applicable. The contract stated that it will not "limit or waive the application of any relevant state or federal statute of limitation." Therefore, it essentially left it to the courts to determine whether Florida's statute of limitations is relevant to arbitration.

The appellate panel upheld the circuit court's ruling that Florida's statute of limitations was not applicable to the Raymond James account holders' arbitration claims. The lower court applied the Florida Supreme Court's decision in Miele v. Prudential-Bache Securities which determined that arbitrations are not considered "actions" or "proceedings."

The appellate court agreed with the circuit court's decision, noting that if the legislature intended for the word "proceeding" to include arbitrations, it could have expressly defined it to include arbitrations or specifically included a reference to arbitrations in the corresponding statutes. Absent this, the court determined that it was a stretch to determine that the legislators' intent was to extend the state's limitations periods to arbitrations. The appellate court also noted that most jurisdictions which have considered this question have not read into their statute of limitations any implicit extension to arbitrations as they are not generally regarded as "proceedings."

The problem for Raymond James is that it used a standard clause in the contract that it believed was suitable for use nationwide. It did not expressly include in its contract that Florida's statute of limitations would apply to any claims, and thus, the court determined that Florida's statute of limitations was inapplicable.

The appellate court determined that the applicability of the limitations periods to arbitration was an issue of first impression in Florida, and it certified the following question to the Florida Supreme Court as a question of great public importance:

DOES SECTION 95.011, FLORIDA STATUTES, APPLY TO ARBITRATION WHEN THE PARTIES HAVE NOT EXPRESSLY INCLUDED A PROVISION IN THEIR ARBITRATION AGREEMENT STATING THAT IT IS APPLICABLE?

Our construction law attorneys will continue to monitor whether the Supreme Court or another appellate court addresses this issue, which we will cover in this blog as it unfolds. In the meantime, all construction firms in the state should work with qualified legal counsel to ensure that their contracts expressly include Florida's statute of limitations in the arbitration agreement. Otherwise, they will remain potentially liable for construction defect claims in perpetuity.

The Florida Construction Lien Law is a statutory device which enables lienors, particularly those who do not have a contract directly with the owner, to protect their rights to payment for work performed on a project. The Construction Lien Law, found in Chapter 713 of the Florida Statutes, provides lienors with the right to look to the improved property as security to ensure payment. A secondary purpose is to protect an owner from liens against its property.

The Florida Construction Lien Law is complex, and the consequences of not complying with its provisions can be dire. Through this series of blog articles, my colleague Nicholas Siegfried and I will address issues both common and unusual in an attempt to clarify what is otherwise considered by some to be a confusing statute.

We begin this series by focusing on the Notice of Commencement, which is a "notice" that the owner is required to record, pursuant to the lien law. The purpose of the Notice of Commencement is to provide the lienor with the current names and addresses of the owner and contractor, so that the lienor could properly mail a Notice to Owner. It also may control the date the lien attaches. A properly recorded lien relates back to the date the Notice of Commencement was recorded and may affect the priority of intervening interests.

The Notice of Commencement provides lienors with valuable information in order for a lienor to comply with the Lien Law. Information which must be in the Notice of Commencement includes: 1) a description of the property; 2) a general description of the improvement; 3) the name and address of the owner and contractor; 4) the name and address of the surety or lender, as applicable; and 5) the expiration date.

An owner who fails to record a Notice of Commencement does so at its own peril, as they may not be aware of all prospective lienors who have served Notices to Owner. Although the failure to serve a Notice to Owner does not excuse a prospective lienor from serving a Notice to Owner on the owner, they may not be required to serve a Notice to Owner on the contractor.

A Notice of Commencement is void if the construction of the improvement is not begun in ninety days. Furthermore, in order for liens to "relate back" to a Notice of Commencement it must be re-recorded after the first year.

An owner/developer needs to understand the purpose and requirements of a Notice to Owner prior to beginning their project, and a lienor should always obtain a copy of the Notice of Commencement prior to commencing construction.

Our construction law attorneys are available for consultations regarding any questions pertaining to Notices of Commencement.

The firm's Stuart Sobel appeared on the evening newscast for Channel 10 News in South Florida on Wednesday, December 14, to discuss the unsuccessful challenge to the Port of Miami Tunnel project by Chalks Airline, Inc., the operator of the sea plane base at Government Cut. Stuart represents Bouygues Civil Works Florida, Inc., the constructor of the Miami Access Tunnel, for the public-private partnership among the Florida Department of Transportation and MAT Concessionaire, LLC, the concessionaire chosen to design, build, operate and maintain the tunnel.

Click here to watch the story and listen to Stuart's explanation as to why the court declined an emergency injunction to halt the digging operation based on his arguments on behalf of his client.

The Florida Legislature has enacted a number of new and expanded exemptions to the Public Records Act and the Sunshine Law which took effect earlier this year. The new exemptions are intended to provide governmental entities more ability to have full and frank discussions of the strengths, weaknesses and value of a bid. They are also intended to protect the confidentiality of bidders' proposals for government contracts during the bidding and selection process, as access to this information by competing bidders can lead to unfair competition. The changes have significant implications for contractors seeking to work on projects for all government agencies in the state Florida, including all counties and municipalities.

The new exemptions to Chapter 119, Florida Statutes, specifically address meetings involving oral presentations from the bidders and negotiations of the specific terms of the contract, which have previously been required to be open to the public as well as competing bidders. Now, the public can no longer observe these oral presentations and attend committee meetings where the government agency discusses strategies for selecting and negotiating with the successful bidder. The recordings of such meetings, however, can be obtained through a public records request at the time that the notice of intended award is posted or 30 days after the bids or proposals are opened, whichever is earlier.

The changes also expand the amount of time that bids and proposals remain sealed from public inspection to 30 days after the opening of the bids, if the Intent to Award is not published at an earlier time. The Public Records Act had previously held that bids and proposals were open to public inspection at the time of a notice of a decision or intended decision, or within 10 days after the bid or proposal was opened by the government agency, whichever was sooner.

For general contractors, architects, engineers, consultants and others who vie for contracts for major construction projects for government entities in Florida, these changes may help to ensure that competing bidders will not have access to their specific submissions and pricing during the selection process.

However, the expanded exemptions will make it more difficult for bidders and the public to observe the evaluation and selection process as it unfolds, and those which become dissatisfied with the process will have more difficulties in determining whether they have the grounds to file a protest. Any person considering a bid protest will need to immediately request all of the relevant public records, as some of the meetings which were previously open to the public during the evaluation process will no longer be open to the public. Thus, a bidder may not know whether another bidder made changes to its bid during the negotiation process that would be, in many circumstances, a valid basis for a protest. It is still unclear whether the changes will cause an increase or a decrease in the number of protests, as some bidders may find that it behooves them to file a notice of intent to protest in order to gather and review the meeting recordings and competing bids.

The new and expanded exemptions under the Public Records Act and Sunshine Law represent significant changes for the competitive solicitation process for bidders. Bidders should consult with experienced construction law attorneys who understand these changes and their implications when submitting a proposal and participating in the selection process, as the time requirements for filing any sort of bid protest are generally very aggressive and the failure to timely file a protest will result in it being waived.

A recent ruling by the Fourth District Court of Appeal serves as an important reminder for general contractors and construction firms which are contracted by tenants for improvements to leased property. The court upheld the lower court's decision that found that the contractor could not assert a claim of lien against the landlord when the tenant defaulted on its construction contract. For the landlord's perspective on this ruling and related changes to Florida's lien law, click here to read the article by Fern Musselwhite in our real estate blog.

In its ruling, the court specifically placed the burden on the general contractor, MHB Construction Services, to understand the landlord's prohibitions against liens and protect itself by binding the landlord under its construction contract with the tenant.

The appellate panel noted in its decision that the Notice of Commencement filed by the landlord/lessor does not provide the contractor with the right to lien the property of the landlord who is not party to the contractor-lessee contract for the improvements. Also noted in the decision were the facts that the landlord's lease and its properly recorded Notice of Lien Prohibition expressly prohibited claims of lien for improvements made by the tenant, the lease required advance written consent for the improvements by the landlord, and the lease did not require that the improvements be made by the tenant.

The court also was not swayed by the arguments by MHB Construction that a $10,000 reimbursement by the landlord towards the tenant's improvements constituted an unfair scheme by the landlord to avoid liens and use the tenant as a strawman for the improvements. The court found in its ruling that the $10,000 amounted to less than 10 percent of the total costs of the improvements and was contingent on the tenant receiving a final release from MHB.

The contractor in this case is now unable to assert a lien against the landlord and, additionally, must pay the landlord's attorney fees in the matter. Ultimately, it has learned a very expensive lesson about the importance of contractually ensuring its right to a claim of lien against the landlord/lessor in construction contracts with a lessee tenant.

Our South Florida construction law attorneys work closely with our clients to help ensure that their lien rights are soundly protected in all of their contracts with tenants, landlords and owners. We write about important cases and matters affecting the construction industry in this blog, and we encourage industry followers to submit their e-mail address in the subscription box at the top of the column on the right in order to automatically receive all of our future articles.

Our firm's construction law attorneys regularly conduct presentations and serve as the featured speakers at events focusing on the legal issues that affect the construction industry.

At the Construction Claims in Florida Seminar taking place November 10, 2011 at the Courtyard Miami West/FL Turnpike (11580 N.W. 105 Street), partner Michael J. Kurzman will conduct the presentation on "Florida Construction Lien Law and Lien Claims." This all-day seminar qualifies for continuing education credits for attorneys, contractors, architects and engineers. It will provide attendees with a clear understanding of the effects that construction defect claims have on the construction and legal processes in Florida. Click here for additional information or to register online for this event.

The 2011 Fall Meeting of the American Bar Association Forum on the Construction Industry in Atlanta on Oct. 13-14 featured partner Stuart H. Sobel's presentation titled "When it Comes to the Lay of the Land, Forum Matters." Stuart discussed crucial strategies for preparing, presenting and closing out contract disputes in state versus federal courts.

On Sept. 21, 2011, partner Vivien T. Montz conducted a complimentary webinar titled "Construction Contracts in Florida: Issues Involving AIA Documents" that focused on effective strategies in the negotiation of construction contracts, and how Florida law affects certain standard provisions in these documents. The webinar qualified for 1.5 hours of continuing education credits from The Florida Bar.

We encourage those who are interested in receiving the presentations and information that our attorneys covered at these seminars and webinars to call the corresponding attorney or send us an e-mail at info@siegfriedlaw.com.

A recent ruling by the Fifth District Court of Appeal which reversed the trial court's decision serves as a reminder that the Florida courts can find liens to be fraudulent even when they are filed based on a good faith belief that money is owed. The court's ruling is a reminder to contractors to carefully review the amounts included in a claim of lien so as not to include amounts which are not lienable (or which may not be lienable) under Florida law, as they will not necessarily avoid a fraudulent lien based upon a "good faith belief" that amounts were lienable.

The appellate ruling came in the appeal by Daniel Medellin and Susan Medellin of a ruling that contractor UBuildIt had not filed a fraudulent lien against their property because the company had reason to believe that it was entitled to more than $28,000 under the terms of its construction consulting contract with the Medellins. In its initial ruling, the trial court interpreted that under chapter 713 of the Florida Statutes, it was precluded from finding UBuildIt's claim of lien to be fraudulent because the company had a good faith belief that it was owed money by the Medellins.

The appellate panel found that in section 713.31(2)(b), the statute provides "that neither a good faith dispute as to the amount owed nor a minor mistake is sufficient to support a finding that a lien is fraudulent. This is quite different from the trial court's ruling that a good faith dispute as to the amount owed, or a minor mistake, necessarily requires a finding that the lien is not fraudulent."

In its ruling, the appellate judges agreed with the appellants that UBuildIt did not perform labor or services constituting an improvement on their property that would give it the right to file a lien. Instead, its lien was based on breach of contract and lost profits, which are not a proper basis for a lien. The panel agreed with the Medellins that the trial court could conclude that the lien was willfully exaggerated because the lienor included claims that were not lienable, notwithstanding the lienor's good faith belief that it was entitled to payment. The court reversed the parts of the final judgment denying the Medellins' claims for fraudulent lien, slander of title, and attorney's fees. It directed the trial court to reevaluate, on remand, its ruling on the slander of title claim in light of the fact that the lien was not based on lienable services, and to determine the amount of attorney's fees to award to the Medellins.

Our attorneys will continue to write about important court decisions and legal issues impacting the construction industry in Florida, and we encourage industry followers to submit their e-mail address in the subscription box on the right in order to automatically receive all of our future articles.

Our construction law attorneys in South Florida work very closely with our clients in reviewing and finalizing all of their job contracts. A decision by the Fifth District Court of Appeal from earlier this year serves as an excellent reminder for construction firms of the importance of avoiding mistakes in their contracts stemming from the use of multiple job proposals before contracts are finalized.

L & H Construction Company, the general contractor in the case, filed the appeal after the trial court ruled in favor of Circle Redmont, the subcontractor which had sued L & H for breach-of-contract. The trial court concluded that the contract between the two parties was in error as a result of a mutual mistake or scrivener's error stemming from Redmont's submission of multiple job proposals, which L & H had requested. The error resulted in an impasse on the issue of whether Redmont would complete the installation of a staircase or simply supervise the installation.

The appellate panel agreed with the trial court's ruling that the word "install" in the contract was the result of a mutual mistake, and it was the express understanding of both parties that Redmont would supervise the installation rather than actually install the staircase. However, the appellate court ruled that the trial court's judgment was internally inconsistent. It could not support the lower court's finding that L & H breached the contract in May 2006, as it could not find any conduct by L & H that constituted a breach by that date. The court noted that it was hampered in reviewing the record because the trial court had sustained objections by Redmont and disallowed evidence about exactly what transpired when the parties reached the stalemate on the installation issue. The trial court found that this evidence constituted settlement negotiations, represented attorney-client communications, or was irrelevant. As a result, the panel ruled that this resulted in insufficient evidence to support the trial court's final judgment, so Redmont essentially may have lost the appeal due to its own objections regarding the admission of the additional evidence.

Of course, this litigation very likely could have been avoided by both parties if they had thoroughly reviewed the contract for ambiguities to ensure it was complete and correct. The mistake now appears to have proven to be very costly for Redmont as well as L & H, and the case has become just one of the many examples of the potential implications of errors in construction contracts. Our other construction law attorneys and I will continue to monitor and write about cases and issues such as this, and we encourage industry followers to enter their e-mail address in the box on the right in order to automatically receive all of our future blog posts.

With the financial difficulties that developers, contractors and community associations are undergoing during the worst economic downturn of the last generation, disputes regarding construction defects can take a very significant toll on their already strained resources. Florida law governing this type of construction dispute is very conducive to mediation between the parties, and the construction law attorneys in South Florida from our firm often advise our clients to consider mediation and make serious efforts to use it whenever possible to resolve these potentially costly and time-consuming claims.

By creating a process for construction defect claims that begins with providing notice of the specific defect and giving the contractor/developer an opportunity to investigate and respond, Florida Statute 558 serves as a de facto precursor to mediation. These legal requirements have traditionally made mediation a popular alternative dispute resolution option for these defect claims in the state, and the sour economy and real estate market have also combined to create greater incentives for all of the parties involved in these cases to find equitable and expedited settlements through mediation.

Unlike arbitration, which for construction defect cases is typically used only when called for in the contract between the parties, mediation is generally a voluntary and nonbinding option for construction defect disputes. In addition, it is likely to be mandated by the court after the filing of the lawsuit in an attempt to have the parties explore the possibility of finding a resolution outside of the courtroom.

Mediation for defect cases has proven to be very effective in part because of the use of certified mediators who are familiar with construction law matters. The parties involved will select a neutral mediator who has a great deal of construction industry experience. This experience often enables resolution since the neutral is familiar with both the legal and construction issues involved in a matter. For example, Steven Siegfried and Stuart Sobel from our firm are regularly selected to serve as mediators for these cases.

Mediation, whether required as part of litigation or as a pre-condition to further legal action, can often result in a quicker and less expensive mechanism to resolve construction defect issues. While some discovery is usually necessary in order to reach a resolution through mediation, often times, mediation avoids significant litigation discovery costs. Moreover, in this current economic climate when many developers and contractors have reduced their staff, a prompt resolution through mediation reduces the hours of involvement required by developers and contractors in a prolonged litigation. Accordingly, developers and contractors can focus on business and not litigation.

Additionally, with mediation, the parties remain in control of the terms of resolution and decision-making process; whereas in litigation or arbitration, the decision is left to a judge, jury or arbitrator(s). This control, as well as the general nature of the mediation process, also helps to preserve business relationships which may be destroyed by prolonged and costly litigation.

In a mediation, each side will essentially present their case to the mediator, who then works with each of the parties to help broker a settlement. If the mediation fails to find a resolution to which the parties can agree, none of the discussions in the mediation process are admissible in a subsequent litigation.

In addition, mediation can be an effective means of engaging insurance carriers for contractors, subcontractors and suppliers into the process for cases in which there is insurance coverage based on the allegations of the complaint. If an insurance company is involved in the defense, engaging it in the mediation process can be critical to finding a fair resolution and avoiding continued litigation.

The vast majority of cases are resolved prior to trial. Ideally, mediation will often allow the parties involved to cut right to the heart of the matter and find a fair resolution. Thus, engaging in serious mediation proceedings with an effective mediator can be one of the best ways to resolve a construction litigation dispute in a timely and cost-effective matter, particularly in this economic climate.

The attorneys and professionals of Siegfried, Rivera, Lerner, De La Torre & Sobel, P.A. would like to congratulate several of our shareholders and an associate for, once again, being named to the annual Florida Super Lawyers listing. Pictured above from left to right, partners Steven M. Siegfried, Stuart Sobel and Michael J. Kurzman were each named to the listing for Construction Litigation practitioners, which includes less than 100 lawyers statewide. In addition, associate Jason M. Rodgers-da Cruz was recognized as a "Rising Star" in Construction Litigation, which includes less than 50 of the top up-and-coming construction law attorneys in Florida.

The 2011 list marked the sixth consecutive year as Florida Super Lawyers for Siegfried and Sobel, and it was the fifth consecutive yearly listing for Kurzman and the third consecutive year as a Rising Star for Rodgers-da Cruz.

Super Lawyers, a service of Thomson Reuters, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement.

Click here to read our press release with the complete details on this announcement and the stringent selection process used by Super Lawyers.

As the residential and commercial real estate markets continue their slow climb back to health, many of our client general contractors are now finding themselves working with developers whose ongoing financial viability has fallen into serious peril. Some of these developers have filed for Chapter 11 bankruptcy, typically to remain operating their projects and/or to stave off a lender foreclosure. The ensuing bankruptcy court litigation may take years to unfold and consume large sums in legal fees.

What should a contractor expect when a developer files for bankruptcy? First, it is important to quickly consult with an attorney specializing in bankruptcy. We emphasize "quickly" due to the fact that when a project owner files for bankruptcy, it is likely that certain significant decisions over what will occur with the project going forward and how the contractors will be paid may be made immediately after the bankruptcy is filed. There are crucial decisions that are made in the bankruptcy case which require that the contractors participate in the court process in order to best protect their ability to get paid.

It is prudent for the contractor to have a plan in place before a developer files bankruptcy in order to adequately preserve the contractor's rights. Generally, in bankruptcy, secured creditors get paid first and unsecured creditors get paid at a discount from what remains in the bankruptcy estate. Therefore, obtaining a security interest in the project or other assets of the developer provides an advantage to the contractor once the developer files bankruptcy.

Immediately upon the filing of a bankruptcy petition by the developer, its assets go into what is called the "bankruptcy estate" and the "automatic stay" goes into effect. The automatic stay prohibits creditors, such as contractors, from taking any action to collect amounts due from the debtor/developer, and it is broadly construed. Collection activity in violation of the automatic stay is often met with sanctions being imposed against the creditor by the bankruptcy court.

If a contractor continues to work on a project for an owner that has filed for Chapter 11 protection, then it is wise to undertake measures to protect the contractor's right to payment for current work. Although the automatic stay and preference rules prevent a contractor from collecting on pre-bankruptcy sums due, these rules do not apply to work that a contractor performs or materials furnished after the bankruptcy case is filed and while the case is pending. To best protect a contractor's interest, the bankruptcy case should be monitored to ensure that the claims against the developer are properly listed and classified (as secured, for example).

Another important element in a bankruptcy case for a contractor to look for is the Chapter 11 debtor's right to either assume or reject the construction contract at any time before the confirmation of the debtor's reorganization plan. This event could take several months. To assume the contract, the debtor is required to cure all defaults, which means paying the contractor and the contractor's subs and suppliers in full. Additionally, as a condition to assumption, the debtor is required to provide adequate assurances that it will make the future payments on the contract.

With that said, for the contractors with financially troubled developer clients, it's important that they give serious consideration to the possibility of negotiating a workout settlement for a lesser sum than they are owed in order to avoid being one of many creditors in a possible future bankruptcy. Once they get the first indication of financial strains from the developer, they should consider the possibility of meeting the situation head-on with their client and seek an out-of-court workout.

In general, most contractors will typically fare better by negotiating a workout settlement rather than going through the Chapter 11 bankruptcy process to collect on their debt. Once the developer is in bankruptcy, all bets are off. There will be a number of creditors, and the entire matter is under the control of a federal bankruptcy court and, perhaps, a Chapter 11 trustee assigned to administer the developer's case. Also, the developer's legal fees will erode a great deal of the funds that it has remaining to pay its debts, and the entire process could take years to complete. Contractors should give careful consideration to making a smart business decision and settling for less than they are owed before they get embroiled in the bankruptcy proceedings.

If an out-of-court workout cannot be reached and the developer files for bankruptcy, contractors need to be sure to make every necessary effort to establish their claim and play an active role in the entire process. They should work closely with both construction law and bankruptcy attorneys to ensure that they follow through on every detail in pursuing the matter. Once a contractor is deemed by the bankruptcy court as a secured creditor, they may have a claim for their attorney fees to be redeemed in the bankruptcy if there is any remaining equity in the property. However, if there is no equity, then the lender will have full priority over the property, and the contractor will be forced to pay its own legal fees, which can become substantial for large and complicated Chapter 11 cases.

Our South Florida construction lawyers and I are working very closely with many of our contractor clients to help them to make the soundest legal and business decisions in their dealings with financially troubled developers. We will continue to write about these and other important issues for construction businesses in Florida, and we encourage industry followers to enter their e-mail address in the box on the right in order to automatically receive all of our future blog posts.

Last month, the Fifth District Court of Appeal upheld the validity of an allegedly defective Notice of Termination. The court found that a mortgage recorded on the date that the Notice of Termination was filed maintained priority over a subsequently recorded construction lien.

In LaSalle Bank National Association v. Blackton, Inc., the Fifth DCA reversed a trial court which had declared a construction lien superior to a prior recorded mortgage based upon an allegedly defective Notice of Termination. The same entity was both the owner and builder of the home at issue. A Notice of Commencement was filed prior to construction commencing. Upon completion of the home, the builder/owner sold the home. The builder/owner recorded a Notice of Termination in order to shorten the one year effective date of the Notice of Commencement. On the same date, two mortgages were recorded against the property.

Subsequent to the new owners taking possession of the property, they hired a contractor to correct some deficiencies in the construction of the home. The correction contractor was not paid in full, and it recorded a construction lien against the property. Thereafter, the homeowners defaulted on their mortgages. The mortgagees and the correction contractor both obtained judgments against the homeowners.

The trial court declared that the Notice of Termination was ineffective because the owner and builder were the same entity. The appellate court declared that there was no such prohibition in Fla. Stat. § 713.132. Additionally, the appellate court was not swayed by the correction contractor's claim that the contractor's affidavit attached to the Notice of Termination was a nullity because it was authored by and intended for the use of the same entity, the owner/contractor. The appellate court did not comment on whether the contractor's affidavit was a nullity, because it was superfluous. While § 713.132(2) allows an owner to rely upon a contractor's affidavit to show that no lienors remain unpaid, the owner had already complied with § 713.132(1) by including a statement in the Notice of Termination that all lienors had been paid.

In its decision, the Fifth DCA wrote that under the correction contractor's interpretation of the law, "a Notice of Termination executed by an entity that was both the owner and the contractor would be valid only if accompanied by contractor's affidavits executed by each and every subcontractor retained on the job. We conclude that Chapter 713 does not impose such a cumbersome and unnecessary procedure."

Our construction law attorneys in South Florida will continue to monitor and write about important court decisions and legal issues affecting the construction industry in Florida. We encourage industry followers to enter their e-mail address in the box on the right in order to automatically receive all of our future blog posts.

In Weitz v. M.H. Washington, the Eight Circuit held that critical path testimony is not necessary to support a delay claim, making this a potentially precedential decision.

In the case, Weitz, a general contractor, retained an expert to analyze responsibility for delays on a townhome project. The expert employed "windows analysis," which distinguishes activities on the critical path with those with "float" time where a delay does not affect the overall job, and a "baseline schedule" that he created for his analysis.

M.H. Washington moved to exclude the testimony as unreliable. Washington argued that the expert's testimony was unreliable because it was premised upon the baseline schedule that was the expert's own creation and did not distinguish float and critical path activities. Therefore, the expert was not able to distinguish particular activities on the project as on or off the critical path, and the owner argued that it was incapable of verifying the opinion.

Weitz countered that the expert had testified that in his experience "near critical path activities" should be analyzed as critical. Furthermore, the baseline schedule was derived from the original project schedule, and Washington had not employed its own expert to analyze and refute its expert witness' opinion.

The District Court in allowing the expert's opinion had noted that it had some apparent weakness, but was sufficiently specific to allow Washington to analyze the opinion and identify specific documents which arguably could demonstrate flaws in the analysis.

The Eight Circuit discussed Daubert v. Merrell Dow Pharms, Inc. in holding that the District Court did not abuse its discretion in allowing the testimony. It noted that Washington's argument about which activities should have been excluded from the "critical path" do not rise to the level of inherent unreliability because most activities become critical if they are all that is left to complete the work. Furthermore, the court held that the expert's use of his own schedule went to the weight, not the fundamental reliability of his analysis.

The 10th edition of "The Florida Construction Lien Law, an Overview" by the firm's Steven M. Siegfried and Nicholas D. Siegfried has now been published and become available. Originally published in 1986 to provide lienors in Florida with important information to comply with the state's complicated lien statute, the book has become a valuable resource for all of the participants in the construction process, including lenders, owners, design professionals, contractors, subcontractors, suppliers and attorneys. It includes a complete copy of the Florida lien statute and all of the forms that are needed to comply with the lien law.

The book is priced at $90, and orders can be placed via e-mail at info@siegfriedlaw.com or by calling us at 1-800-737-1390.

A recent ruling by the Third District Court of Appeal affirmed the lower court's decision that a subcontractor used delay tactics in its dispute with the general contractor for a construction project at a Miami Beach elementary school. The appellate panel confirmed the trial court's decision that the subcontractor had been properly terminated.

The case stemmed from a breach-of-contract action filed by Mario's Enterprises Painting and Wallcovering, Inc. ("Mario's") against Veitia Padron, Inc., the general contractor which had contracted Mario's as a painting subcontractor for renovations at the Feinberg Fisher K-8 Center school in Miami Beach. Once the painting work began at the school, lead was discovered in the building that was being painted, and the general contractor notified the subcontractor of several deficiencies in its work. However, the subcontractor refused to return to the school to complete its work until the lead report on the entire project was completed, even though the tested levels in the building that had been painted were well below acceptable exposure limits.

The general contractor notified the painter that if it did not return to the jobsite to continue working within 72 hours, the company would hire a replacement painting subcontractor to complete the project. After the painting was completed by the new subcontractor, Mario's sued the general contractor for breach of contract. The trial court found in favor of Veitia Padron, and the appellate panel upheld the decision and noted in its ruling that "there is sufficient competent evidence in the form of correspondence and witness testimony in the record to uphold the trial court's findings that the painter's actions were essentially delay tactics and that it was properly terminated."

This ruling reaffirms that the courts will not tolerate delay tactics by subcontractors after they are notified of deficiencies in their work and a dispute arises. Our attorneys who focus on construction law matters will continue to monitor and write about court decisions affecting the construction industry in Florida, and we encourage industry members to submit their e-mail address in the box on the right in order to automatically receive all of our blog posts.