Florida Construction Law

In mediation, the parties hire a professional mediator to facilitate a settlement.  The mediator has no power or authority to make any decisions for the parties.  All the mediator can do is to listen and ask questions regarding each party’s case to help the parties (and their lawyers) to see the strengths and weaknesses of each case.  Often times this is the first time the parties tell them their case is not a “sure thing,” and that dose of reality can be a strong motivation to settle.   Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

In Cannon v. Fournier , 57 So.3d 875 (Fla. 2d DCA 2011), the Court held that an injured construction worker could sue the general contractor and that contractor's qualifier individually under a tort theory.  The general contractor was a single member limited liability company where the qualifer was the single member.  The Court stated "officers or agents of corporations may be individually liable in tort if they commit or participate in a tort, even if their acts are within the scope of their employment." Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

Most Florida courts now require the parties to attend mediation before their dispute goes to trial, and a successful mediation may help avoid the expense of a trial or final hearing. Trenton H. Cotney Florida Bar Certified in Construction Law Glenn Rasmussen Fogarty & Hooker, P.A. 100 S. Ashley Dr., Suite 1300 Tampa, FL 33602 (813) 229-3333 http://www.glennrasmussen.com www.trentcotney.com

I will be speaking today at Associated Builders and Contractors' Multiplying Leaders Conference and Expo.   The first seminar starts at 11:00 a.m. and is entitled "Collecting Payments on Construction Projects" followed by "Construction Contract Provisions" at 1:00 p.m.  The seminars will take place at ABC's offices at 2008 N. Himes Ave., Tampa, FL.  Attendees will receive one hour CILB c.e. credit for each course. Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

Mediation is a formal method by which the parties can try to settle the dispute before it is decided by a third party at a trial or an arbitration final hearing.  Whereas litigation and arbitration are generally mutually exclusive, meaning parties can choose litigation or arbitration, but not both, mediation is available in arbitration and litigation.   Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

Arbitration is like a “private lawsuit.” In arbitration, the parties agree by contract to have a private judge or judges decide the issue at a final hearing without a jury and under less formal rules of procedure than litigation. Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

Litigation is what people typically have in mind when they think of a lawsuit.  In litigation, the dispute is presented to a judge and/or jury at a formal trial to decide who wins.  Litigation is open to the public and is conducted under strict rules of procedure and evidence.   Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

Litigation, arbitration, and mediation are three different methods used to resolve a dispute arising out of a construction contract.  Many non-lawyers are unsure regarding the differences between those three methods.  The next few blog posts will discuss the difference between these dispute resolution methods. Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

I will be presenting at the national annual Best of Success conference on Monday at the Sandpearl Resort in Clearwater Beach, Florida.  The topic of the seminar will be "Understanding Construction Contracts."  The seminar starts at 2:15 p.m. and is designed to provide an overview of contract formation and key contract provisions.     Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

The Penalty Compliance extension is over. The Occupational Safety and Health Administration Today will begin to penalize contractors that fail to comply with its new fall-protection measures for residential construction. The new rule requires use of conventional fall protection standards such as guardrails, safety nets and personal arrest systems when working six feet or more above ground. To read the OSHA Standard please go to the following link:   http://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=DIRECTIVES&p_id=4755 -- thanks to WCRCA for the information . Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

Rain delays are common on construction projects.  Generally, the construction contract addresses the steps needed for time extensions due to inclement weather.  Failure to provide sufficient notice of rain delays may result in the owner disallowing requests for additional time. Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

"The Hillsborough County Board of County Commissioners approved a Resolution yesterday that will reduce the fees for most building permits and related services by 50%, effective October 1, 2011.  This reduction applies to both residential and commercial activity.  Attached please find a copy of the Board agenda item and Resolution along with a notice of the Fee Reduction.  The Board took this action in response to industry requests for relief during the current economic climate .  The reduction is for a 15 month period from October 1, 2011 through December 31, 2012.   The important information is that this fee reduction ONLY AFFECTS APPLICATIONS OR REQUESTS FOR SERVICES SUBMITTED ON OR AFTER OCTOBER 1st , regardless as to when the permit is actually picked up/paid for.  There are a few items on the fee schedule that will not be discounted."  -- ABC Gulf Coast Chapter www.abcflgulf.com Trenton H. Cotney Board Certified in Construction Law Trent Cot

Several cases have expanded upon the original ruling in Slavin .  In El Shorafa v. Ruprecht , 345 So.2d 763 (Fla. 4th DCA 1977), the court upheld the Slavin doctrine and recognized that under Slavin the contractor would not be liable if it was the property owner’s negligence in failing to correct the defect that actually caused the injury.  The court held that if the owner could have corrected a defective condition that was known or reasonably would have been known after the owner accepted the project from the contractor, then the owner was the true cause of a third party’s injuries, and the contractor would not be liable. Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

The Slavin doctrine emerged from the Florida Supreme Court case Slavin v. Kay , 108 So.2d 462 ( Fla. 1958).   In Slavin , the plaintiff was injured in a motel as a result of a sink detaching from the bathroom wall and falling on the plaintiff.   The plaintiff sued the motel owner and the contractor that installed the sink seeking compensation for the injuries the plaintiff suffered.   Although the court recognized that a contractor may be relieved of liability for injuries to third parties occurring after the owner has accepted a project, the court also stated that the contractor would only be relieved of liability if the owner could have discovered and remedied the dangerous condition.   In other words, the condition must be discoverable rather than latent for the contractor to avoid liability.   The Slavin court found that the sink’s defective condition was hidden from ordinary observation and was therefore a latent defect, and held that the contractor could be held liable for

The Slavin doctrine holds that a contractor is not liable for personal injuries to third parties if the injuries were caused by patent defects and the owner has accepted the work.   In other words, if the defective condition was obvious at the time the owner accepted the contractor’s work, the contractor will not be liable for damages resulting from the defective condition which occur after the date of acceptance.   Trenton H. Cotney Florida Bar Certified in Construction Law Glenn Rasmussen Fogarty & Hooker, P.A. 100 S. Ashley Dr., Suite 1300 Tampa, FL 33602 (813) 229-3333 http://www.glennrasmussen.com

It is not unusual for a contractor to be sued when someone is injured on a project, even if the injury occurs after the project has been accepted by the owner.  Often the injured person sues the contractor alleging that his/her injuries were caused by the contractor’s defective construction.  Even if the person is injured and the construction was defective, the contractor still may avoid liability.  One method to avoid liability is the application of the Slavin doctrine.   Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

A subcontractor should also examine other documents that are incorporated by reference into its subcontract.  For example, on many commercial projects, the prime contract is often incorporated into the subcontract.  The prime contract may conflict with the pay when paid provision contained in the subcontract.  For example, there may be a valid pay when paid clause in the subcontract, but the prime contract requires the prime contractor to pay subcontractors before receiving payment from the owner.  In this case, courts have held that the pay when paid clause is deemed ambiguous because of this incorporation of other payment provisions.  See O.B.S. Co., Inc. v. Pace Construction Corporation , 558 So.2d 404 (Fla. 1990).  The courts state that payment must be made within a reasonable time.  The courts often construe payment within a reasonable time as whatever the normal payment cycle is.  Payment within a reasonable time can be anywhere from the date of the invoice submitted to 4

As with all contract provisions, the course of conduct or actions between the parties can result in the waiver of a contractual requirement.  With regard to a contingent payment clause or pay when paid provision, if the prime contractor previously paid the subcontractor despite not being paid by the owner, then the subcontractor will have an argument that the prime contractor waived the pay when paid provision.  In other words, the course of conduct between the parties on the project demonstrated that the prime contractor intended to pay the subcontractor regardless of the validity of the pay when paid provision. Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

The Court in Bentley Construction Development & Engineering, Inc. v. All Phase Electric & Maintenance, Inc ., 562 So.2d 800 followed the previous decisions and stated in the concurring opinion that “established precedent now seems to require this type of contract to contain a statement that payment by the owner is a ‘condition precedent,’ a statement that payment is ‘contingent upon payment to the contractor,’ or some comparable emphatic statement before the clause will be deemed sufficiently clear to permit judicial enforcement.”  Accordingly, subcontractors can defeat a pay when paid clause by arguing that the pay when paid clause does not contain the magic language in order for it to be enforceable in Florida. Trenton H. Cotney Board Certified in Construction Law Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

The Court in DEC Electric, Inc. v. Raphael Construction Corp., 538 So.2d 963 (Fla. 4th DCA 1989); aff’d   558 So.2d 427 (Fla. 1990) noted the history of pay when paid cases and stated that clauses that contain “contingency” or “conditioned” were upheld and clauses that contained “unless” or “until” were found ambiguous and payment was required within a reasonable time period.     Trenton H. Cotney Florida Bar Certified in Construction Law Glenn Rasmussen Fogarty & Hooker, P.A. 100 S. Ashley Dr., Suite 1300 Tampa, FL 33602 (813) 229-3333 http://www.glennrasmussen.com

The Peacock Court held that because this provision was a risk-shifting provision, the clause must contain specific language in order for it to be enforceable.   The clause must expressly state that payment to the subcontractor is conditioned upon receipt of payment by the prime contractor from the owner.   The Court also noted the public policy reason of holding pay when paid clauses to a higher standard.   Often, subcontractors are smaller than their prime contractor counterparts and cannot afford to bear the risk of owner non-payment.   Trenton H. Cotney Florida Bar Certified in Construction Law Glenn Rasmussen Fogarty & Hooker, P.A. 100 S. Ashley Dr., Suite 1300 Tampa, FL 33602 (813) 229-3333 http://www.glennrasmussen.com

In Peacock Construction Company, Inc. v. Modern Air Conditions, Inc. , 353 So.2d 840, the Florida Supreme Court looked at the issue of pay when paid clauses and their validity.   The Court reviewed a contract provision which provided that the subcontract would be paid: “within 30 days after the completion of the work included in this sub-contract, written acceptance by the Architect and full payment by the Owner.”   The Court held that this provision was ambiguous because it can be construed as pay within a reasonable time or that payment was contingent upon the prime contractor’s receipt of payment from the owner.   Because of the ambiguity, the Court held that the payment clause required payment within a reasonable time regardless of whether the prime contractor received payment.     Trenton H. Cotney Florida Bar Certified in Construction Law Glenn Rasmussen Fogarty & Hooker, P.A. 100 S. Ashley Dr., Suite 1300 Tampa, FL 33602 (813) 229-3333 http://www.glennra