Florida Construction Law

Sometimes, renting equipment makes perfect sense. In this still-tight credit environment, some lenders aren't willing to finance a large piece of equipment, or an outright purchase might not add up financially if the equipment is only needed for a short duration. For contractors on a budget, rental companies usually have the latest models in their inventories, a luxury that is out of reach for many smaller firms. Plus, renting equipment  is convenient, with the duty of maintenance, set up and transportation being someone else's problem. Nevertheless, there are still ways contractors can end up paying more than they planned for that rented backhoe or core driller. The good new is that there are strategies to prevent that extra spend. Take Out an Insurance Policy Hands down, the first line of defense against serious out-of-pocket expense is insurance coverage. Rental outlets offer insurance as part of their services, but the more cost-effective route for contractors is addi...

Even if it appears that the liquidated damages are proper, the prudent contractor will not accept the assessment at face value because there are many ways to defeat a liquidated damages clause. Liquidated damages are a fact of life in modern construction contracting. However, even if your contract contains this provision and the owner has assessed liquidated damages that does not mean the assessment is valid or enforceable. There are a number of ways you might be able to prevent an owner from keeping contract proceeds that are rightfully yours. This article will provide the reader with an idea or two that will help keep hard-earned contract proceeds in the contractor’s pocket. In a breach of contract situation, liquidated damages are designed to provide a means to compensate the non-breaching party when the actual damages are not readily ascertainable. In other words, when the non-breaching party’s actual damages will be difficult to determine in the event of a breach, then t...

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

Pena v. Citizens Property Insurance Co ., 37 Fla. L. Weekly D946a, Case No. 2D10-2397, filed on April 25, 2012. Trial court’s dismissal of homeowners’ claim against insurer for sinkhole damages with prejudice due to fraudulent affidavits regarding compliance with the condition precedent that a contractor be hired prior to suit to perform repairs, was reversed and remanded for entry of a dismissal with leave to amend, or alternatively for abatement until a contractor has been hired for repairs, but on condition that the insurer could recover fees and costs as a sanction award for the homeowners’ fraud. 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

A prime contractor subject to an upstream termination for convenience clause should ensure that any subcontract agreement also allows for the prime to terminate the sub for convenience.  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 at least one case, the failure of a prime contractor to produce evidence of payment to subtiers was held not to be a material breach.   Eng v. Stein , 599 P.2d 796 (1979). 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 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

Contractors should address residential job site control in their contracts to determine who is responsible for safeguarding the property when the contractor is not present.  Normally, this is the contractor's responsibility.   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

Despite contractual provisions to the contrary, a contractor is not required to warrant against every plan/design error when the owner has provided the plans and specifications.   See Salem Engineering and Construction Corp. v. U.S. , 2 Cl. Ct. 803 (1983). 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, but not all , construction contracts contain clauses commonly refereed to as a “Differing Site Conditions Clause” and/or a “Changed Conditions Clause” that will allow the contractor to obtain additional compensation and time if a differing site condition is encountered.  Be aware, however, that there are public contracts in use in Florida that on their face do not allow for an equitable adjustment when a differing site condition is encountered.  If the contract documents do not contain the typical clauses mentioned above, then the contractor’s ability to recover additional time and money may be in jeopardy (and ultimately determined by the creativity of the contractor and its lawyer). 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 was entitled to delay damages despite a "no damages for delay" provision in the prime contract when the owner requested excessive design changes.  Kalisch-Jarcho, Inc. v. City of New York , 448 N.E.d2d 413 (NY 1983). 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 can obtain delay damages against an owner for owner-caused delays on a project provided that there is not a contractual provision that prevents the contractor from obtaining delay damages such as a "no damages for delay" clause. 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 the event of improper termination from the owner, the contractor is entitled to lost profit on the work unperformed and for the cost of the labor, materials and services provided for the project prior to termination. 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

If the owner furnished the plans to the contractor, the owner cannot claim delay damages against the contractor on the basis of a design defect.  Chaney Bldg. Co. v. City of Tucson , 716 P.2d 28 (Ariz. 1986). 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

Homeowner could amend answer and affirmative defenses asserted against contractor two months before trial because "all doubts should be resolved in favor of allowing amendment."  Thompson v. Jared Kane Company, Inc ., 872 So.2d 356 (Fla. 2d DCA 2004). 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

Even though a contractor failed to sign a subcontractor's proposal, the Court held that the contractor accepted the subcontractor's final proposal through its actions.  In particular, the contractor paid the initial deposit and two subsequent invoices.  L&H Construction Co., Inc. v. Circle Redmont, Inc ., 55 So.3d 630 (Fla. 5th 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 MBE must be a legitimate business that is performing construction on a project and not merely act as a pass through to a non-MBE contractor.  Section 287.0943, Florida Statutes. 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 implied warranty of constructability applies from an owner to a contractor but not from a contractor to a subcontractor.  Gillingham Const., Inc. v. Newby-Wiggins Const., Inc. , 42 P.3d 680 (Idaho 2002). 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

When a construction contract gives the contractor discretion over the subcontractor's work, the contractor must be reasonable in determining whether to accept or reject the subcontractor's work.  Haymore v. Levinson , 328 P.2d 307 (Utah 1958). 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