On June 16, 2015, Governor Rick Scott signed into law House Bill 87, which amends Chapter 558 of the Florida Statutes. The amendment takes effect October 1, 2015.
The intent of Chapter 558 is to avoid the commencement of an action by providing a mechanism for the parties to enter into discussions with one another through pre-suit notices of claim. Prior to the amendment, Chapter 558 notices of claim were often ambiguous and were inadequately supported and documented. Further, these notices failed to provide the locations of the alleged defects, and were subject to change. Recipients of the notices were often forced to incur significant expense to determine the specific nature and locations of the claimed construction defects, some of which might not exist or were not in the scope of work of the party who received the notice. These circumstances were not conducive to settlement negotiations. Accordingly, an amendment was proposed to streamline alternative dispute resolution in for construction defect disputes.
The Fifth District Court of Appeal of the State of Florida recently issued an opinion in Cypress Fairway Condominium Association, Inc. v. Bergeron Construction Co., Inc., No. 5D13-4102, 2015 WL 2129473 (Fla. 5th DCA May 8, 2015), directly addressing the issue of when a construction contract is complete for purposes of determining if a lawsuit was barred by the Statute of Repose. In Cypress Fairway, the Court evaluated whether the contract was completed on the date the final application for payment was submitted or the date the final payment was actually made. Although the contested period in Cypress Fairway was only three days, this decision is important in clarifying when the contract between the owner and an engineer, registered architect or a licensed contractor is complete. In Cypress Fairway, the Court determined a contract is complete when final payment is made.
The United States District Court for the Southern District of Florida recently issued an opinion in Altman Contractors, Inc. v. Crum & Forster Specialty Ins. Co., No. 13-80831-CIV, 2015 WL 3539755 (S.D. Fla. June 4, 2015), addressing an issue of first impression. In Altman, the Court evaluated whether an insurer has a duty to defend and indemnify an insured who receives a Notice of Claim pursuant to Chapter 558, Florida Statutes. Altman is important because a Court ruled that a Chapter 558 Notice of Claim is not a “civil proceeding” and therefore is not a “suit” under a standard form CG 00 01 insurance policy. Therefore, the insurer had no obligation to defend or indemnify ACI, and it did not breach the policies, as a matter of law.
We are pleased to report yet another appellate victory in a case George Truitt and Greg Willis of the firm’s Construction Group tried and Scott Cole and George Truitt of the firm’s Appellate Group defended on appeal.
David Salazar and Craig Distel recently published an article titled “Goodnight Contractors – Sanislo v. Give the Kids” analyzing the Florida Supreme Court’s February 12, 2015 decision in Sanislo v. Give the Kids the World, Inc. and its potential impact on the construction industry. Their article will be appearing in the upcoming edition of The Lawyer Issue, an international publication providing updates to the legal and business community throughout the world. The Sanislo opinion resolved a conflict regarding the enforceability of exculpatory agreements between the First, Second, Third, Fourth and Fifth District Courts of Appeal and determined that the terms “negligence” or “negligent acts” are not necessary to have an enforceable exculpatory provision. To read more about the Sanislo decision and its potential impact on the construction industry, please follow this link: http://www.lawyerissue.com/good-night-contractors-sanislo-v-give-the-kids/.
 No. SC12-2409 (Fla. Feb. 12, 2015) (note: the final opinion has not been released for publication in the permanent law reports and until release, it is subject to revision or withdrawal).
The Eleventh Circuit Court of Appeals recently reaffirmed Florida as an injury-in-fact trigger state in Carithers v. Mid-Continent Cas. Co., Case No. 14-11639 (11th Cir. April 7, 2015). However, the Court did not end the manifestation versus injury-in-fact debate, choosing instead not to address the appropriate trigger where it is “difficult (or impossible) to determine when the property was damaged.”
The flow of construction stormwater legislation and rulemaking from Washington D.C. and Tallahassee has been steady in recent years. With another construction boom underway in many parts of the state, stakeholders must remain vigilant of the Florida Department of Environmental Protection (“FDEP”) regulations governing construction dewatering and stormwater runoff promulgated in February of 2015.
Recently, the First DCA addressed the issue of dual employment as it relates to a contractor and subcontractor. See Roof Painting by Hartzell, Inc./Summit Holdings Claim Center v. Andres Hernandez, Colors Construction, Inc., and Guarantee Insurance Company, 2015 WL 641199, (Fla. 1st DCA 2015).
Dual employment occurs when a single employee is under a contract of hire with two separate employers. See Interstate Industrial Park v. Afterdeck Restaurant, 478 So. 2d 852, 854 (Fla. 1st 1985). Under the separate control of each employer, the employee performs services for each employer that are largely unrelated to the services it performs for the other. Under the dual employment doctrine, two employers may be liable for workers’ compensation separately or jointly depending on severability of the employee’s activity at the time of injury. When the employee’s activities are separable and can be clearly identified with one employer or the other, the particular employer whose work was being done at the time of injury will be held exclusively liable.
In addition to HB 87 / SB 418, CSK also continues to monitor the progress of House Bill (“HB”) 501, entitled “Limitation of Actions,” as it makes its run through the 2015 session of the Florida legislature. The objective of HB 501 is to alter the current state of Florida law regarding the time within which claims may be brought for a latent defect in the design, planning, or construction of an improvement to real property. Simply put, enactment of the proposed Bill will decrease the statute of repose on construction-related claims in Florida from 10 years to 7 years.
Florida’s 2015 Legislative session kicks off on Tuesday March 3, 2015. This Legislative session CSK’s Construction Law Division is closely tracking the following bills:
• House Bill (“HB”) 87 titled Construction Defect Claims and a similar bill, Senate Bill (“SB”) 418; and
• HB 501 titled Limitations of Actions.
These bills, if passed, will impact the industry. This post focuses on HB 87 and SB 418. A separate post will be dedicated to HB 501.
HB 87 and SB 418 propose to make drastic changes to Chapter 558, Florida Statutes, Florida’s “Notice and Opportunity to Cure.” Continue Reading