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Monthly Archives: December 2016

10DEC 2016

We have previously discussed the intent of Chapter 558, Florida Statutes, which is to provide parties with opportunities to avoid the commencement of litigation by providing a mechanism for them to enter into discussions through pre-suit notices of claim.  Among other things, Chapter 558 requires the notice of claim to “identify the location of each alleged construction defect sufficiently to enable the responding parties to locate the alleged defect without undue burden.”  However, contractors can further protect themselves from the commencement of litigation without inadequate notice by requiring notice of alleged defects, as well as the opportunity to cure those defects, as a matter of contract.

An example is illustrated by Underwater Engineering Services, Inc. v. Utility Board of the City of Key West, 194 So. 3d 437 (Fla. 3d DCA 2016). In Underwater Engineering Services, contractual language which promotes the idea of notification and opportunity to cure was found to be an effective defense against a claim for damages relating to allegedly defective work. The case involved a contract for structural concrete repairs, coating repairs, and new coating placement of approximately fifty-seven concrete pole structures supporting electric transmission lines running from Key West to the Seven Mile Bridge. The Utility eventually awarded the contract to Underwater.

The Utility made a claim against Underwater alleging Underwater defectively constructed the concrete structural collars on eight poles.  Underwater asserted multiple defenses to this claim including a defense based upon contract language requiring the Utility to notify Underwater of these alleged defects and to permit Underwater an opportunity to cure.  The language in the contract, entitled “Defect Assessment”, provided in part:

1.5 DEFECT ASSESSMENT

A. Replace the work, or portions of the Work, not conforming to specified Requirements.

B. If, at the request of the Contractor and in the opinion of the Engineer, it is not Practical to remove and replace the Work, the Engineer will direct one of the following remedies:

1. The defective Work may remain, but the Unit Price will be adjusted to a new price as agreed to by the Owner and Engineer.

2. The defective Work will be partially repaired to the instructions of the Engineer, and the Unit Price will be adjusted to a new price.

In light of this Defect Assessment provision of the contract and given the uncontested evidence at trial showing the Utility did not give Underwater the opportunity to “replace the [w]ork, or portions of the [w]ork, not conforming to the specified requirements,” the Court reversed the ruling of the trial court and found this language a sufficient defense against the damage claims of the Utility.

In conclusion, incorporating contract language providing for a notice of alleged defects and an opportunity to correct those defects may provide additional protection for contractors above and beyond those outlined in the Florida Statutes.

CSK’s Construction Group will continue to analyze the legal landscape as it relates to all matters impacting our clients.  If you have any questions about incorporating additional language into your construction contracts or the protections offered by Chapter 558, please contact David Salazar at david.salazar@csklegal.com or (305-350-5363), or George Truitt at george.truitt@csklegal.com or (305-350-5331).