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Articles Posted in Construction Law

NSiegfried2013-thumb-200x300-94905-199x300Stuart-Sobel-2013-thumb-180x270-86799Firm shareholders Stuart Sobel and Nicholas D. Siegfried were quoted in an article that now appears on the main South Florida page of The Real Deal, the real estate news magazine and website.  The article, which is titled “Codina Partners affiliate allegedly owes $3.6M for Downtown Doral condo construction: lawsuit,” focuses on the firm’s work on behalf of the general contractor for the prolific developer’s new 5350 Park condominium tower in Downtown Doral.  The article reads:

. . . Grycon LLC is suing 5350 Park LLC and the project’s surety bond provider Arch Insurance Company in Miami-Dade Circuit Court for breach of contract. According to the complaint, Grycon hasn’t been paid for $3.1 million in construction services and $500,000 in bonuses for achieving completion milestones.

RDealIn February, the 20-story, 238-unit tower and attached garage were substantially completed, and buyers began closing on 5350 Park condos, the lawsuit states.

“When it came time to pay us and settle up, [the developer] has come up with excuse after excuse,” said Stuart Sobel, a Siegfried Rivera shareholder representing Grycon. “They have played it very heavy-handed.”

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For the South Florida construction industry, the coronavirus pandemic has caused suspensions of construction projects and a complete shutdown of the permitting/inspection department in Miami-Dade County.  Contractors facing these and other challenges during the COVID-19 outbreak will need to consider several strategies to help mitigate the impact and decrease their losses.

The process should begin with thorough contract reviews by qualified construction attorneys for their “force majeure” provisions, which are typically incorporated in construction contracts to afford contractors with relief in circumstances that are considered “acts of God,” “unforeseen events” or “natural disasters.”  These clauses may allow contractors to obtain time extensions on completions and possibly also recover additional costs or increase their total payment terms.

Legal counsel will evaluate whether current conditions categorize the COVID-19 outbreak as a force majeure event or whether other contractual provisions may apply to allow for claims for added costs and time extensions.  Though a virus has never impacted the construction industry to this magnitude before, contractors may be able to turn to force majeure law or other similar contract provisions to file claims and seek damages.

Contractors will also need to follow the notice provisions under their contracts for communicating delays and additional costs.  It is essential to use their contracts as the guide for the time limits for giving proper notice as well as determining who must be copied on the notice and how it should be delivered.

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Our firm’s founder and managing partner, Steven M. Siegfried was awarded the 2020 Lifetime Achievement Award by the Construction Law Committee of The Florida Bar.  The award, which he received at the group’s annual awards reception in Orlando on Friday, March 6 (see photo below), recognizes one Florida construction law practitioner per year for their lifetime of exemplary dedication and mentoring, and their commitment to maintaining the very highest level of professional reputation and integrity.

Lifetime-Achievement-Award-2020-60-1024x681Steven has focused on construction law in Florida since 1976.  He has served as an adjunct professor of construction law at the University of Miami since 1984, and he has also conducted many seminars and presentations for construction law practitioners throughout Florida during his entire career.  He is board certified by The Florida Bar as both a civil trial and construction law, having earned both designations in their year of inception from the state’s bar association.  Steven is also a founding Fellow of the American College of Construction Lawyers, and he is the author of Florida Construction Law and The Florida Construction Lien Law, An Overview.  He earned his undergraduate degree from Brooklyn College in 1971 and his law degree from American University, Washington College of Law in 1974.

All of the attorneys and professionals at our firm are very proud of the impact that our founder has had in teaching a generation of attorneys about the intricacies of construction law at the University of Miami while helping to build one of the state’s most respected practices in the field.  We congratulate Steven and salute him for receiving this prestigious recognition from his peers in The Florida Bar’s Construction Law Committee.

The Florida Senate passed a new bill that took effect on July 1 which could have serious ramifications for contractors. The new bill, House Bill 7125, substantially altered Florida Statute 489.126 in order to afford homeowners more protection against contractor fraud by making it easier for a homeowner to press criminal charges.

The statute provides that once a consumer makes a payment in excess of 10 percent of the contract price for any residential construction, the contractor must first apply for the necessary permits within 30 days and then begin the work 90 days after the permits issue. In the event the contractor fails to apply for the necessary permits or begin the work, pursuant to the revised statute, a homeowner can make a written demand on the contractor and require that the contractor either: (1) applies for the necessary permits, (2) starts the work, or (3) refunds the payment.

Florida-legislature-300x169The amended statute also provides that a contractor who receives money in excess of the value of the work performed may not fail or refuse to perform any work within a 90-day period or any period mutually agreed upon and specified in the contract. If the contractor doesn’t have just cause for failing to perform any of the work within the 90-day period or specified contractual period, or the contractor doesn’t terminate the contract with proper written notice to the owner, then the owner can likewise make a written demand to the contractor demanding either that (1) the work be performed, or (2) the money be returned.

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Stuart-Sobel-2013-thumb-180x270-86799An article authored by shareholder Stuart Sobel was featured as the “Board of Contributors” guest commentary column in today’s edition of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper.  The article, which is titled “‘Daubert’ Standard in Fla. Construction Litigation Requires Deft Implementation,” focuses on the ramifications of a decision earlier this year by the Florida Supreme Court to reinstate the Daubert standard for evaluating and admitting expert testimony, after having abandoned it in favor of the Frye standard.   Stuart’s article reads:

. . . The more stringent Daubert standard, which is used in federal courts and most state courts, requires that the court act as the gatekeeper, determining that proposed expert testimony is based upon scientific methods appropriately applied to the matter at hand, presented by appropriately qualified witnesses. The resurrection of the Daubert standard in Florida has the potential to increase the cost and time needed for litigating construction disputes, since Daubert challenges will now become the norm, rather than the exception.

dbrlogo-300x57Trial courts will employ a multi-factor test to determine whether experts’ methods are “scientifically reliable.” They will hold pretrial hearings on Daubert motions to determine whether experts will be limited in the scope of their testimony or excluded from testifying at trial.

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A recent ruling by the Fifth District Court of Appeal demonstrates the potential ramifications of ambiguities in the mediation and arbitration provisions of construction contracts. The ruling found the lower court correctly determined that the parties had a valid agreement to arbitrate certain claims because the contract clearly required arbitration for claims arising before final payment was due. However, it was silent regarding the procedure for resolving claims arising after the final payment became due, so the case was remanded back to the lower court for a determination as to whether the claims arose before or after final payment was due.

In Royal Palms Senior Apartments Limited Partnership v. Construction Enterprises Inc. et al., Royal Palms appealed the nonfinal order entered in favor of Construction Enterprises Inc. staying the developer’s lawsuit pending mediation and arbitration based on its assertion that the trial court erred in finding a valid arbitration agreement existed and its claim was subject to arbitration.

5DCA-300x183The Fifth DCA affirmed lower court’s finding that the parties had a valid agreement to arbitrate certain claims. However, because it is unclear whether Royal Palms’ claim was one subject to arbitration, it remanded the case for a determination of that issue.

The parties entered into a contract in 2006 for CEI to build the Royal Palms Senior Apartments. The agreement was comprised of the “AIA Document A201-1997 General Conditions of the Contract for Construction” (“General Conditions”) and a supplementary document (“Supplementary Conditions”), which modified and deleted portions of the General Conditions and controlled if the two documents conflicted.

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Stuart-Sobel-2013-thumb-200x300-87324-200x300The firm’s Stuart H. Sobel was the subject of the weekly “Profiles in Law” feature in today’s edition of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper.  The article, which is titled “How Miami Construction Lawyer Stuart Sobel Accidentally Built a Trial Empire,” discusses the entire span of Stuart’s career in the law and his varied litigation experience.  It reads:

. . . Sobel’s represented Miami’s New World Center concert hall, the contractor who built the Port of Miami tunnel, the steel fabricator who built Miami’s Brightline train terminal — and the one who put the roof on the Hard Rock Stadium, home of the Miami Dolphins.

As shareholder at Siegfried, Rivera, Hyman, Lerner, De La Torre, Mars & Sobel’s Coral Gables office, construction cases account for 98% of Sobel’s practice, and avoiding trial is the top priority. But in the 1980s, Sobel cut his teeth trying “any kind of case and every kind of case” that got him into the courtroom.

. . . Sobel took the law boards “on a lark” but had decided on a business degree at the Wharton School of the University of Pennsylvania. While driving to Philadelphia for his first semester, Sobel changed his mind. Somehow, his brother Jack Sobel, in law school at the University of Miami at the time, convinced law school dean Soia Mentschikoff to take a call from Sobel on his travels.

dbr-logo-300x57“I was literally in my car, pulled over, went to a phone booth and got interviewed by Dean Mentschikoff,” Sobel said. “And at the end of the conversation she said, ‘Keep driving.’ I got to Miami on a Thursday afternoon and I started law school on Monday morning without ever applying.”

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susanodess-srhl-224x300LindseyTLehr-200x300An article authored by shareholders Lindsey Thurswell Lehr and Susan C. Odess was featured as the “My View” guest commentary column in the Business Monday section of today’s Miami Herald.  The article, which is titled “Lawsuits by Condo Associations Against Neighboring Developers, Builders Are New Norm,” focuses on the spate of recent lawsuits against South Florida condominium developers and general contractors alleging their construction work caused physical damage to neighboring condominium towers.  Their article reads:

. . . This new litigation trend appears to have especially taken hold in South Florida, where several prominent condominium developers and contractors have been sued by adjacent associations for damages emanating from their construction sites. The lawsuits raise claims for structural damage, fallen stucco, splattered paint, excessive dirt, broken glass/windows, and other damage resulting from the construction practices of neighboring developments.

The insurer for the 1060 Brickell Condominium Towers brought a lawsuit alleging construction debris from Panorama, 1010 Brickell and the Bond damaged the two 1060 Brickell buildings. The lawsuit claims that the construction activities at these properties damaged 1060 Brickell’s facade, balconies, railings, pool deck, roof, cooling tower and other components.

MHerald2015-300x72The entire development team behind the ultra-luxe Porsche Design Tower faced a similar lawsuit brought by the association for the adjacent Millennium Condominium. The association alleged that its building suffered millions of dollars in damage caused by the Porsche Tower’s construction next door, including extensive cracks to the lobby, parking garage and pool deck. Engineers concluded that the cracks were caused by excessive vibrations from the pile-driving equipment used for the neighboring tower’s foundation, and the suit also alleged concrete overspray splattered onto Millennium’s balconies, ruining the building’s paint job and related exterior components.

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With more than 6,000 members, the American Bar Association’s Forum on Construction Law is the world’s largest organization of construction attorneys.  It offers invaluable opportunities for construction lawyers to interact and learn from many of the most accomplished practitioners in the profession.

The Forum has 14 distinct divisions focusing on different aspects of construction law, including insurance, surety, contract documents, design, construction delivery methods, and labor issues. It conducts simultaneous events at four different cities every fall focusing on the same issue, and it also hosts several other yearly gatherings that enable participants to learn about various timely issues impacting the industry.

NSiegfried2013-thumb-200x300-94905-199x300Our firm’s construction law attorneys have a long history of playing very active roles in the Forum, and partner Nicholas Siegfried is continuing to build on our legacy of involvement as the former Chair of the Young Lawyers Division of the Forum.  He has had the honor of speaking at numerous events, including the Forum on Construction Law 2016 Fall Meeting in Chicago where he spoke on the legal implications associated with new wearable technology in the construction industry.  He was also a speaker at the ABA Forum on Construction Law’s regional February 2016 program in Jacksonville, Fla., where he spoke about the types of damages recoverable in a construction claim as well as the negotiation of damage provisions in a construction contract.  In 2017, he spoke on trends in construction defect claims as well as Chapter 558 at the National Construction Defect Conference in Fort Lauderdale, Fla.

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If a party is contractually obligated to supervise construction work and determine the suitability of construction materials used in the construction, but the party fails to properly supervise and inferior materials are used by a third party, are the costs to repair damage caused by improper materials general, special or consequential damages? That is the query that led the First District Court of Appeal to certify a question of great public importance to the Florida Supreme Court in a recent case involving a construction defect dispute.

The certified question arose in Keystone Airpark Authority v. Pipeline Contractors, Inc. Keystone retained Pipeline Contractors to build airplane hangars and taxiways, and it contracted separately with Passero Associates, LLC to provide services that included “part-time resident engineering and inspection [and] material testing.”

keystone-airport-300x225Specifically, Passero agreed to “[o]bserve the work to determine conformance to the contract documents and to ascertain the need for correction or rejection of the work,” and to “[d]etermine the suitability of materials on the site, and brought to the site, to be used in construction.”

In Keystone’s eventual lawsuit against Passero for breach of contract and negligence, it alleged that Pipeline used substandard material for stabilization underneath the structures, which Passero failed to detect, causing the premature deterioration of the concrete hangar slabs and asphalt taxiways. It sought to hold Passero as well as Pipeline Contractors responsible for the cost to remove, repair and replace the hangars, taxiways and underlying subgrade.

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