Florida Construction Law

"In U.S. for the use of Capital Computer Group, LLC v. The Gray Insurance Co. , Case No. 10-15519 (11th Cir. December 21, 2011) the claimant alleged that it was an unpaid first tier subcontractor on a Miller Act project. The prime contractor had approached another contractor (Code 4 Systems, Inc.) about the work, but Code 4 could not qualify for financing. Code 4 and the claimant then arranged for the claimant to enter  into the “subcontract” and sub-subcontract the work to Code 4. The claimant financed the work via a factoring arrangement. The work had been performed and the prime contractor had not paid for it, but the surety argued that the claimant was simply providing financing and thus was not within the coverage of the Miller Act payment bond. The Court looked to the subcontract, which obligated the claimant to perform the work including maintaining insurance for the prime contractor’s benefit and indemnifying the prime c...

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...

Under a Miller Act payment bond, all first and second tier subcontractors and suppliers are entitled to  make a claim for payment. However, third tier subcontractors and suppliers are not entitled to make a claim on the bond.   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

"Actual notice that a materialman is providing materials to a project, therefore, is insufficient to satisfy the notice requirements of Section 713.23(1)(c) . A subcontractor is not excused from the notice requirement of Section 713.23(1)( c) even where the owner, surety or contractor did not fully adhere to the requirements of chapter 713, Florida Statutes. See Prof'l Plastering & Stucco, 940 So.2d at 448 (“[E]ven if the Subcontractor is correct that the Owner, the Surety, and the Contractor did not fully adhere to the requirements of chapter 713, the Subcontractor [is] not excused from complying with the requirements of Section 713.23  that it provide notice ....” (quoting Bridgeport, Inc. v. Tampa Roofing Co., 903 So.2d 306, 309 (Fla. 2d DCA 2005) )." Stock Building Supply of Florida, Inc. v.  Soares Da Costa Construction Services, LLC , 2011 WL 2694522 (Fla. 4th DCA October 5, 2011). Trenton H. Cotney Board Certified in Construction Law Tren...

Generally, a surety cannot be held liable beyond the penal amount or sum of the bond.  The concept is similar to insurance where a carrier can tender its policy limits.   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

An owner was entitled to attorney's fees against a plumbing contractor on the plumbing contractor's lien claim, because a 713.23 private payment and performance bond had been posted for the project.  United Plumbing and Heating Inc. v. Goldberger , 452 So.2d 591 (Fla. 4th 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

HB 0985 - Hillsborough County public project bonds.  This bill defers the repeal of Chapter 2004-414, Laws of Florida, which relates to projects for which payment and performance bonds may be waived for construction of public buildings, public works or repairs on public buildings or public work when the cost of the project is below a certain threshold amount and the bid is awarded through an economic development program created to encourage local small businesses to participate in county procurement programs. 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 Auto-Owners Ins. Co. v. Classic Carpet & Tile, Inc ., 2009 WL 350750 (S.D. Fla. 2009), a surety sued indemnitors under an indemnity agreement for losses resulting from the issuance of a payment and performance bond.  The indemnitors, in their individual capacity, argued that the company had been sold to a third party and that they did not request the bond.  The Court held that the indemnity agreement bound the indemnitors and that they were liable for the debts incurred by the company.  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 Fisk Electric Co. v. Travelers Casualty and Surety Co ., 2009 WL 196032 (S.D. Fla. 2009), the Court held that a subcontractor could pursue delay damages against a surety based on a private payment bond.  The Court reasoned that the language of the private bond was simliar to a Miller Act bond and that language would allow the subcontractor to pursue delay damges. 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 Plumbing Service Company v. Progressive Plumbing, Inc., Case No. 5D09-3717, filed October 22, 2010: Trial court ruled that sub-subcontractor was barred by election of remedies doctrine from recovering damages for breach of contract (loss profits on uncompleted work) due to recovery under a s. 713.23 payment bond. Reversed and remanded to allow such action since it was not duplicative of bond coverage for payment of completed work, since election of remedies is based on estoppels to prevent double recovery for the same wrong. Court noted that s. 713.30 provides that bond remedy is “cumulative to other existing remedies ….” 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