Florida Construction Law

Industry now could begin to meet pent-up demand In a ruling that could stir near-dormant condo construction in Colorado, the state Supreme Court on Monday ruled that a homeowners association was wrong to sue a builder after disregarding bylaws that require binding arbitration to settle claims of construction defects. The association's key misstep, the court said in a 5-2 ruling, involved its bid to change the rules to allow litigation without getting the consent of the development's builder. "Because the unit owners did not obtain the Declarant's written consent to remove the declaration's arbitration provision, the attempted amendment was ineffective," the court majority ruled. "Consequently, the Association remains bound by the arbitration agreement..." The ruling in the case Vallagio at Iverness Residential Condo Association vs. Metropolitan Homes Inc. has potentially far-reachinf implications for both homeowners and builders. Advocates of...

George Jackson v. The Shakespeare Foundation, Inc. 38 Fla. L. Weekly S67a, Case No. SC11-1196, filed January 31, 2013. A broad arbitration clause, such as "arising out of or relating to" is enforceable when there is a "significant relationship" of the claim to the contract.  In this case, an arbitration provision was upheld where the purchaser to a real estate contract alleged misrepresentation under a general duty to disclose notwithstanding that the misrepresentation was not included in the contract itself. (from RPPTL Subcommittee). Trenton H. Cotney Florida Bar Certified Construction Lawyer Trent Cotney, P.A. 1211 N Franklin St Tampa, FL 33602 www.trentcotney.com

Continental Casualty Company v. A. W. Baylor Versapanel Plastering, Inc., 37 Fla. L. Weekly D2167a, Case No. 5D11-3523, filed on September 7, 2012. Arbitration panel declined to award attorney’s fees pursuant to section 713.29, finding that neither party to an action to enforce a private payment bond action. Trial court awarded fees to successful subcontractor claimant under sections 627.756 and 627.428, which apply generally to actions against insurance and bonding companies. On appeal, this order was reversed and the court concluded that the more specific statute, section 713.29, applied.  Pre-arbitration, the parties had agreed that the determination of entitlement and amount of attorney fees was governed by section 713.29, Fla. Stat.  (from RPPTL Subcommittee). Trenton H. Cotney Florida Bar Certified Construction Lawyer Trent Cotney, P.A. 1211 N Franklin St Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

C. C. Borden Construction, Inc. and Fidelity and Deposit Company of Maryland v. Walding Company , 37 Fla. L. Weekly D1991a, Case No. 1D12-1744, filed August 21, 2012. Even though contract arbitration provision was ambiguous, trial court’s denial of insurer’s Motion to Compel was reversed in part and remanded for entry of an order granting the motion. (from RPPTL Subcommittee). Trenton H. Cotney Florida Bar Certified Construction Lawyer Trent Cotney, P.A. 1211 N Franklin St Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

In U.S. for the use of Postel Erection Group, L.L.C. v. Travelers Casualty and Surety  Company of America , Case No. 6:12-cv-182 (M.D. Fla. June 28, 2012) a second-tier  subcontractor sued the sureties on the prime contractor’s Miller Act payment bond. The  first tier subcontractor was engaged in arbitration with the prime contractor, and the  sureties moved to stay the Miller Act suit pending the outcome of the arbitration. The  court granted the sureties’ motion based on its inherent power to control its docket and  the interests of judicial economy. The court noted that there was a “murky” but close  relationship between the first tier subcontractor and the claimant but did not depend on  that relationship in granting the motion.  (from RPPTL Surety and Insurance Subcommittee). Trenton H. Cotney Florida Bar Certified Construction Lawyer Trent Cotney, P.A. 1211 N Franklin St Tampa, FL 33602 (813) 579-3278 www.trentcot...

Zak Rhodes v. Newport Building and Construction, Inc. , 37 Fla. L. Weekly D4091b, Case No. 2D10-3006, filed May 4, 2012: Order foreclosing construction lien on incomplete residence was reversed, because the property owner had already paid contractor the amount of an arbitration award for damages cause by breach of contract. In addition, the trial court’s determination that the contractor was entitled to attorney fees was dismissed as a non-final non-appealable final order.   Editor’s Note: This case did not discuss that the lien included the balance due on the contract for the incomplete work, but the arbitration award included a major set off in favor of the owner. (from RPPTL Subcommittee). Trenton H. Cotney Florida Bar Certified Construction Lawyer Trent Cotney, P.A. 1211 N Franklin St Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

Talel Corporation v. Shimonovitch , 37 Fla. L. Weekly D790a, Case No. 4D10-3886, filed April 4, 2012. Arbitration award was vacated pursuant to section 682.13(1)(d), Florida Statutes (2008), due to arbitrator’s failure to hold a hearing on a determination of the amount of unliquidated damages, after thought defendants had defaulted for violating multiple Arbitration Orders. (from RPPTL Subcommittee). Trenton H. Cotney Florida Bar Certified Construction Lawyer Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

An arbitration provision can be incorporated by reference even if it is not specifically identified.   See JS & H Construction Company v. Richmond County Hospital Authority , 473 F.2d 212 (5th Cir. 1973). Trenton H. Cotney Florida Bar Certified Construction Lawyer Trent Cotney, P.A. 1207 N Franklin St, Ste 222 Tampa, FL 33602 (813) 579-3278 www.trentcotney.com

The fact that a contractor has lien rights does not waive the right to arbitration.  Lien claims are normally stayed pending resolution of the matters that are arbitrated. Genstar Southern Development Corp. v. Troup Bros., Inc. , 396 So.2d 211 (Fla. 3d DCA 1981).   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 U.S. for the use of McAllister Construction Co., LLC v. Diversified Maintenance Systems Inc ., 2011 WL 6112903 (N.D. Fla. 2011) a subcontractor on a federal project sued the Miller Act surety for the prime contractor, and the contractor intervened. The subcontract included an arbitration provision requiring that all disputes be settled by arbitration in Utah. The prime contractor demanded arbitration, but the subcontractor did not participate in the arbitration and claimed that it was invalid. The intervening prime contractor and surety moved for summary judgment. The subcontractor argued that by intervening in the Miller Act suit the prime contractor waived the right to have the dispute resolved by arbitration. The court noted that the petition to intervene cited the arbitration provision and sought to enforce it. The court rejected the subcontractor’s waiver argument, granted the motions, and dismissed the case with prejudi...

Raymond James Financial Services, Inc. v. Phillips , Case No. 2D10-2144. In a case of first  impression, the court affirmed the trial judge’s finding that the Statute of Limitations provided for  in s. 95.011 did NOT apply to arbitration, absence a contract provision to the contrary, because it is  not an “action” or “proceeding” as used in the statutes. This case has been certified to the Florida  Supreme Court as a case of great public importance. (from RPPTL Construction Committee). 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 bankruptcy court can use a "non-binding arbital decision as the basis for estimating a claim."   In re Enron Corp ., 2006 WL 544463 (Bankr. S.D.N.Y. 2006). Trenton H. Cotney Florida Bar Certified in Construction Law www.trentcotney.com

Trial court's grant of stay of arbitration was reversed based on terms of AIA Document A201-1997 General Conditions of the Contract for Construction, despite use of a “Supplemental General Conditions” agreement that deleted the arbitration provisions and referenced an outdated 1987 AIA document.   Speegle Construction Company, Inc. v. District Board of Trustees of Northwest Florida State College,  2011 WL 4597505 (Fla. 1st DCA 2011). 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

Active participation in a lawsuit may result in the waiver of the right to arbitrate.   Florida Education Association v. Sachs , 650 So.2d 29 (Fla. 1995). 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, 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

A court order vacating an arbitrator's award was not subject to appeal because it was not a final judgment.  Kineard v. State , 987 So.2d 1231 (Fla. 1st DCA 2008). 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 surety is not bound by an arbitration provision contained in a subcontract agreement between the prime contractor and subcontractor.  Because the surety did not sign the agreement, the surety is not bound by the arbitration provision.  Graham Contracting, Inc. v. Flagler County , 458 So.2d 418 (Fla. 5th DCA 1984).   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

Denial of a motion to compel arbitration was upheld because seller failed to attach terms and conditions which contained arbitration provision.  Incorporated documents must be attached or specifically identified to form part of the contract terms.  BGT Group, Inc. v. Tradewinds Engine Services, LLC , 2011 WL 2200800 (Fla. 4th DCA 2011). 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 contractor is entitled to a final judgment of foreclosure on it lien claim even if the arbitration award was silent as to the contractor’s right to foreclose the lien.  Because the arbitrator found that the lien was proper and perfected, the contractor could obtain a final judgment of foreclosure.  Royal Palm Collection, Inc. v. Lewis , 36 So.3d 168 (Fla. 4th DCA 2010). 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