Construction Litigation

September 5, 2018

Article by Georg Ketelhohn in Today’s Daily Business Review: “Going Strong: Slavin Doctrine Continues to Protect Florida’s Builders, Designers”

For the second consecutive day, an article by one of our attorneys 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 authored by shareholder Georg Ketelhohn and is titled “Going Strong: Slavin Doctrine Continues to Protect Florida’s Builders, Designers,” focuses on a recent appellate ruling that illustrates how the Slavin Doctrine continues to offer vital protections from liability for the state’s contractors, subcontractors and design professionals against future injuries alleged to have been caused by defects in their work. Georg’s article reads:

The 60 year-old ruling by the state’s highest court held that a contractor’s liability in negligence, which is the duty of care that it owes to third parties, terminates if the property owner accepts the contractor’s work with patent defects. It is used to defend contractors from liability for patently obvious and apparent defects when they cause injuries after the property owner has accepted the improvements together with the responsibility for their ongoing maintenance and repair.

The recent ruling applying the doctrine was issued by the state’s Third District Court of Appeal in the case of Melitina Valiente v. R.J. Behar. It stems from the tragic death of a motorcyclist who collided with another vehicle at a Hialeah intersection in 2008. The subsequent complaint was filed by the victim’s mother against the city of Hialeah, R.J. Behar & Co., Williams Paving and Melrose Nursery, among others.

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June 5, 2018

New Law Brings Relief to Developers, Contractors Facing Untimely Construction Defect Suits

by Diane J. Zelmer

Diane J. Zelmer

One of the most significant changes in years to the Florida laws governing construction defect litigation will take effect on July 1, and for some of the state’s real estate developers and general contractors the changes are going to bring meaningful relief. The new law will provide one year for developers and contractors to file claims against design professionals, subcontractors and suppliers when they are hit with defect lawsuits just prior to the expiration of the 10-year deadline for latent defect litigation.

The new amendments to Section 95.11(3)(c) of the Florida Statutes are intended to correct what many believe to be an unfair byproduct of the state’s 10-year statute of repose, which functions as a final deadline for the filing of construction defect suits. It provides that actions for latent construction defects must commence within 10 years of the last of the following four events: the date of actual possession by the owner; the date of the issuance of a certificate of occupancy; the date of abandonment of construction if not completed; or the date of completion or termination of the contract between the professional engineer, registered architect or licensed contractor and their employer.

February 8, 2018

Article by Michael Clark in Today’s Daily Business Review: “Statute of Limitation Begins to Run When Principal Under Surety Bond Abandons Construction Project”

by Siegfried Rivera

Siegfried Rivera

Firm partner B. Michael Clark Jr. authored an article that appeared as a “Board of Contributors” guest 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 “Statute of Limitation Begins to Run When Principal Under Surety Bond Abandons Construction Project,” focuses on a recent ruling by the Second District Court of Appeal finding that the limitations period for action on a surety bond began to run when the principal under the bond abandoned a construction project. Michael’s article reads:

The [Lexon Insurance v. City of Cape Coral and Coco of Cape Coral] case stems from an ordinance that was adopted by the city of Cape Coral in January 2005 to initiate the development of an approximately 450-acre parcel, which included a single-family subdivision to be built by Priority Developers. The city’s ordinance required the developer to provide a surety bond, and Lexon issued two subdivision bonds totaling $7.7 million. Disputes arose, and the contractor stopped work on the project in March 2007.

In March 2012, Coco of Cape Coral purchased the project for $6.2 million, and in July of the same year the city adopted a resolution demanding that Lexon fulfill its obligations under the bonds. When Lexon declined, the city filed suit against it for breach of contract and declaratory relief, and the claims were later assigned to Coco.

January 17, 2018

Article by Nicholas Siegfried in Today’s DBR: “Contractors That Allow Court Notices to Fall Through the Cracks Will Face Severe Consequences”

by Siegfried Rivera

Siegfried Rivera

Firm partner Nicholas D. Siegfried authored an article that appeared as a “Board of Contributors” guest 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 “Contractors That Allow Court Notices to Fall Through the Cracks Will Face Severe Consequences,” focuses on the takeaways from a recent appellate ruling against a contractor that failed to file suit against a surety bond within the required 60 days. His article reads:

In the case of Rabil v. Seaside Builders, a dispute arose between the homeowners and their contractor. Thereafter, the contractor recorded a construction lien against the property under Chapter 713, Florida Statutes, and filed suit. The homeowners responded by posting a lien transfer bond and recording a notice of contest of lien. The notice shortened the time for the contractor to file suit against the transfer bond from one year to 60 days. The clerk of court recorded a certificate of transfer of the lien to bond and mailed a copy to the contractor along with the notice of contest of lien.

January 3, 2018

Article by Michael Clark in Today’s Daily Business Review: “Fla. Supreme Court Finds Insurers Liable From Onset of Construction Defect Pre-Suit Process”

by Siegfried Rivera

Siegfried Rivera

Firm partner B. Michael Clark Jr. authored an article that appeared as a “Board of Contributors” guest 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 “Fla. Supreme Court Finds Insurers Liable From Onset of Construction Defect Pre-Suit Process,” discusses the ramifications of the recent decision by the state’s highest court holding that the pre-litigation notice and repair process for construction defect cases does indeed constitute a claim which general liability insurance carriers must recognize. The article reads:

The state’s pre-litigation defect procedure, outlined in Chapter 558, was enacted in 2003 to provide a means by which property owners could notify builders of alleged construction or design defects. The responsible contractors, subcontractors and design professionals must then either voluntarily resolve the defects or deny liability. The goal of the statute was to reduce the amount of complex, multiparty construction defect litigation, which had ballooned during the building boom prior to the collapse of the housing market and the foreclosure crisis.

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December 28, 2017

Stuart Sobel Quoted in Daily Business Review Article on Lawsuit by MiamiCentral Steel Contractor Against All Aboard Florida

by Siegfried Rivera

Siegfried Rivera

The firm’s Stuart Sobel was quoted in an article in today’s Daily Business Review, South Florida’s exclusive business daily and official court newspaper, about a lawsuit by client ADF International, the steel contractor on Brightline’s downtown Miami train station. ADF was hired in 2016 by Suffolk Construction Co. Inc., the MiamiCentral general contractor, to work on Brightline’s private passenger rail station and one of the office buildings in the complex. The company claims it is owed $25.8 million for extra work blamed on on-site issues and incomplete and faulty plans. It is suing Suffolk Construction, project architect and engineer Skidmore, Owings & Merrill LLP, and All Aboard Florida, which plans to run Brightline trains between Miami and Orlando and is building MiamiCentral along Northwest First Avenue between Third and Eighth streets.

August 15, 2017

Article on Economic Loss Rule by Firm Attorneys, Allen Bonner and the Late Ervin Gonzalez Featured in New Issue of University of Miami Law Review

by Siegfried Rivera

Siegfried Rivera

The latest edition of the University of Miami Law Review, the quarterly legal journal published by the UM School of Law, features an article that was authored by the firm’s Steven M. Siegfried, H. Hugh McConnell and James S. Czodli, together with Allen Bonner and the late Ervin A. Gonzalez of Colson Hicks Eidson. The article, which is titled “The Economic Loss Rule: Is a Building a Product? — Another View,” is among the last published works co-authored by Gonzalez (pictured here), the highly renowned civil trial attorney who tragically passed away in June. Our firm’s attorneys and professionals extend our deepest and most heartfelt condolences to Ervin’s family, friends and colleagues.

Click here to read the complete article in the publication’s website.

April 14, 2017

Nicholas Siegfried Quoted in Articles on Appellate Ruling Against Trump National Doral by Daily Business Review, The Real Deal and South Florida Business Journal

by Siegfried Rivera

Siegfried Rivera

For insight into the ramifications of important court rulings involving construction law in South Florida, the region’s most widely read and highly regarded business and real estate media outlets often turn to the expertise of our firm’s construction lawyers. The latest example can be found in articles on an appellate ruling against the Trump National Doral golf resort that appeared today in the Daily Business Review, The Real Deal and South Florida Business Journal. Journalists from all three of these outlets interviewed firm partner Nicholas D. Siegfried, who is board certified in construction law by The Florida Bar, and quoted him in their articles.

The litigation stems from The Paint Spot’s 2014 lien against Trump National Doral Miami, which is owned by companies belonging to President Donald Trump. The paint supplier claimed it was due a final payment of approximately $32,000 from the resort. The renovation project utilized two contractors, and a Trump representative inadvertently handed The Paint Spot incorrect contractor information for its pre-suit notice to owner.

The Trump company argued the lien was invalid because The Paint Spot had served the wrong contractor. However, the appellate court ruled that the resort had actual knowledge of the supplier’s “notice to owner,” which had “substantially complied with statutory requirements.”

The end result for the Trump company is that by fighting the $32,000 bill, it will now end up paying well over 10 times as much just for the plaintiff’s attorney fees. According to the report by the Daily Business Review, South Florida’s exclusive business daily and official court newspaper, the resort is now facing a legal tab of approximately $390,000 to cover the prevailing party’s attorneys’ fees and costs.

That’s because the circuit court ruling applied a risk, or contingency fee, multiplier of 1.75 to calculate The Paint Spot’s reasonable attorney rates, which amounted to approximately $284,000 prior to the appeal. Now the company expects to tack on the multiplier for the appellate proceedings, multiplying the $75,000 it incurred on appeal also by 1.75. In addition, the amount for the lien itself has ballooned with interest to about $50,000, and the costs for the resort’s own legal fees undoubtedly are also very substantial.

The article concludes:

“This is what happens in these cases. Legal fees start to drive it,” said construction attorney Nicholas Siegfried, who was not involved in the litigation. “It appears that it got to a point where the parties were really fighting about the fees, and both sides dug in on their position,” he said.

March 24, 2017

Bill Aims to Clarify Statute of Repose Trigger for Construction Defect Disputes

by B. Michael Clark, Jr.

B. Michael Clark, Jr.

A 2015 opinion by the Fifth District Court of Appeal had significant ramifications for the application of the statute of repose in construction defect cases. In response to the uncertainty created by the ruling, Florida lawmakers have introduced a bill to clarify one the trigger dates for the tolling of the statute of repose.

In Cypress Fairway Condominium v. Bergeron Construction Co., the condominium association brought suit on February 2, 2011 on behalf of the condominium, and as assignee of claims held by the general contractor, for recovery of more than $15 million in damages caused by construction defects. Da Pau Enterprises, Inc., the only remaining defendant after other parties reached settlements, moved to dismiss and/or for summary judgment against the association, alleging that the statute of repose expired three days prior to the date the litigation commenced.

The statute of repose in Section 95.11(3)(c) provides that actions for latent construction defects must commence within 10 years of the last of the following four events:

the date of actual possession by the owner;
the date of the issuance of a certificate of occupancy;
the date of abandonment of construction if not completed; or
the date of completion or termination of the contract between the professional engineer, registered architect or licensed contractor and their employer.

At issue was the last of the four trigger events under Section 95.11(3)(c). The defendant argued that the statute of repose commenced the date the contractor submitted its Final Application for Payment on January 31, 2001, which represented the “completion of construction.” However, the association contended that the repose period did not begin until the date final payment was actually paid by the owner on February 2, 2001, which represented the date of the “completion of contract.” The trial court disagreed with the association and granted summary judgment to the defendant, dismissing its claims.

The Fifth DCA reversed, reasoning that the unambiguous statutory language of Section 95.11(3)(c) required the completion of performance of the contract by both parties, and not just the completion of the performance of the contractor’s duties under the contract. The appellate panel concluded that the statute of repose was not triggered upon completion of construction. It found that the final act for the “completion of the contract” was final payment, and not three days earlier when the Final Application for Payment was submitted.

March 16, 2017

Article by Nicholas Siegfried in Today’s Daily Business Review: “Contractor’s Fraudulent Lien Doesn’t Mean Owner Automatically Wins”

by Siegfried Rivera

Siegfried Rivera

The firm’s Nicholas D. Siegfried authored an article that appeared as a “Board of Contributors” guest 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 “Contractor’s Fraudulent Lien Doesn’t Mean Owner Automatically Wins,” focuses on the surprising results of a recent ruling by the Fourth District Court of Appeal involving a contractor’s lien that the lower court found to be fraudulent. His article reads:

For those in the construction industry, the right to impose a lien against the improved property in the event of nonpayment is an effective tool to get paid. Chapter 713, Florida Statutes, as well as countless cases require lienors to prepare their liens accurately and to include only lienable items. The failure to properly prepare a claim of lien can result in a claim for punitive damages and exposure to attorney fees and costs.

However, based upon a Fourth District Court of Appeal case, not all is lost if a contractor’s lien is discharged as fraudulent. In fact, despite a contractor’s fraudulent lien, a contractor can still be deemed the prevailing party in an action against an owner and avoid a claim for attorney’s fees.

In Scott Newman v. Sony Construction et al., the homeowner retained the general contractor to build an addition to his home. When the owner failed to pay, the contractor ceased work, recorded a claim of lien for approximately $134,000 and later recorded a partial release of lien reducing the lien to about $100,000.

The contractor filed suit against the owner for foreclosure of the construction lien, breach of contract and quantum meruit (payments due that are not enforceable under contract). The owner filed a counterclaim against the contractor for fraudulent lien and breach of contract, and the parties subsequently agreed to a bifurcated proceeding whereby the trial court would first determine whether the claim of lien was fraudulent prior to a trial on the remaining issues.

The trial court found that many of the charges included in the lien amount by the contractor were not lienable. These included a charge for approximately $15,000 for supervision and an additional $22,200 for the contractor’s 20 percent profit margin. The trial court found that these charges, which represented a large percentage of the lien, were not supported by the contract between the parties and therefore were not lienable items. It also found other charges included in the lien for pool cleaning chemicals and services, hand tools purchased for use at the job site but not left on the premises after completion, air-conditioning warranty work and rental equipment abandoned by the contractor at the job site were “not lienable by any stretch of the imagination.”