Construction Law

March 2, 2021

Article by Michael Clark in today’s Daily Business Review: “Certified Question to High Court: Do Original Arbitration Provisions Apply to Subsequent Homebuyers?”

by Siegfried Rivera

Siegfried Rivera

An article authored by the firm’s B. Michael Clark, Jr. is featured as the expert 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 “Certified Question to High Court: Do Original Arbitration Provisions Apply to Subsequent Homebuyers,” focuses on the contractual provisions prescribing arbitration as the means of dispute resolution for construction defect claims. These stipulations, which are used by developers for sales of their new homes, are probably known and understood by the initial buyers of newly built properties, but are subsequent buyers of these homes also subject to the arbitration provisions of the original warranty deeds? Michael writes that is the question that an appellate court has certified as one of great public importance for consideration by the Florida Supreme Court. His article reads:

. . . In Hayslip v. U.S. Home, the Hayslips appealed a nonfinal order granting U.S. Home Corp.’s motion to stay their claim and compel arbitration pursuant to the terms of the original special warranty deed for the property. As subsequent buyers of the home from the original owners, the Hayslips asserted they were not bound by the arbitration provision because it is not a covenant running with the land but rather a personal covenant binding only to the original purchasers.

The Second District Court of Appeal found a valid arbitration agreement existed and, as a restrictive covenant running with the land, the arbitration provision contained in the original special warranty deed bound the Hayslips to arbitrate as subsequent purchasers. The court affirmed the circuit court’s order compelling arbitration, but it certified a question of great public importance to the Florida Supreme Court as an issue of first impression.

February 12, 2021

Ruling Clarifies What Constitutes Construction of Property Improvement Under Florida’s Statute of Repose for Defect Claims

by B. Michael Clark, Jr.

B. Michael Clark, Jr.

A 2019 Florida appellate court ruling in a case against a homebuilder alleging negligent construction of an attic ladder provided added clarity over what constitutes the construction of an improvement to real property under the state’s statute of repose law.

In James Harrell v. The Ryland Group, the First District Court of Appeal considered an appeal of a final summary judgment entered in favor of Ryland over the applicability of the 10-year statute of repose and whether the homebuilder failed to establish that the period of repose had run.

The case originally stemmed from injuries sustained by Harrell when the attic ladder he was climbing at his home collapsed. His lawsuit alleged that the homebuilder was negligent “by failing to ensure that the attic ladder was installed in a secure manner with the appropriate hardware” and “by failing to verify that the ladder was secure before selling the home.”

The builder filed a motion to dismiss, arguing in part that the claim was barred by the 10-year statute of repose of section 95.11(3)(c), Florida Statutes. The trial court found that the statute is applicable because an attic ladder is an improvement to real property, but it denied the motion because it was not clear from the face of the complaint whether the suit was filed before the expiration of the 10-year period.

February 5, 2021

Surety Can Use Defaulting General Contractor to Complete Project Without Owner’s Concurrence

by B. Michael Clark, Jr.

B. Michael Clark, Jr.

When a property owner finds defects in its general contractor’s work, declares the contractor to be in default and terminates the construction contract, perhaps the last thing it expects is to be forced to rely on the defaulting contractor to complete the project. Yet that is exactly what happened to a Marathon, Fla. condominium association after the provider of its surety bond elected to retain the original contractor to complete the project.

In Seawatch at Marathon Condominium Association v. The Guarantee Company of North America et al., the Florida Keys condominium association retained Complete Aluminum General Contractors for a $5.4 million construction contract for extensive renovations to the community’s three condominium buildings (pictured here). The Guarantee Company of North America executed a surety bond to secure CAGC’s performance under the contract for the association.

When the association discovered defects in the renovations, it declared the contractor in default and terminated the contract. It then requested Guarantee to promptly exercise one of its options pursuant to the performance bond.

August 4, 2020

The Real Deal Chronicles Stuart Sobel, Nicholas Siegfried’s Work Representing Contractor in Suit Against Codina Partners

by Siegfried Rivera

Siegfried Rivera

Firm 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.

In 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.”

April 13, 2020

Tactics for General Contractors Responding to Coronavirus Pandemic

by Nicholas D. Siegfried

Nicholas D. Siegfried

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.

March 11, 2020

Steven Siegfried Receives Lifetime Achievement Award from Florida Bar Construction Law Committee

by Siegfried Rivera

Siegfried Rivera

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.

Steven 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.

September 6, 2019

Contractors Could Face Criminal Charges Under New Florida Law

by Nicholas D. Siegfried

Nicholas D. Siegfried

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.

The 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.

September 5, 2019

Article by Stuart Sobel in Today’s Daily Business Review: “‘Daubert’ Standard in Fla. Construction Litigation Requires Deft Implementation”

by Siegfried Rivera

Siegfried Rivera

An 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.

Trial 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.

July 25, 2019

Appellate Ruling Over Arbitration Order Illustrates Repercussions of Ambiguous Provisions in Construction Contracts

by B. Michael Clark, Jr.

B. Michael Clark, Jr.

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.

The 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.

July 1, 2019

Stuart Sobel Profile in Today’s Daily Business Review: “How Miami Construction Lawyer Stuart Sobel Accidentally Built a Trial Empire”

by Siegfried Rivera

Siegfried Rivera

The 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.

“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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