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Florida Construction Law News

30JUL 2014

Construction Law Success Story: Partial Summary Judgment on Duty to Defend Structural Engineer

by Thomas Shea

Cole, Scott & Kissane’s Florida Construction Law Attorneys, David Salazar and Dave Peterson, recently obtained partial summary judgment on the duty to defend a structural engineer in a construction delay claim. This case is a winning example that the duty to defend is broader than – as well as separate and apart from – the duty to indemnify, extending to all potential claims, whether ultimately covered or not, so long as the proper contractual language is met.

Here, Plaintiff sued both the general contractor and our client, the structural engineer and special inspector, for delay damages arising from faulty workmanship. Due to the duty to defend provision in the general contractor’s contract with the developer, to which our client was an intended third party beneficiary, we placed the general contractor on notice of the lawsuit and demanded, among other things, that the general contractor assume our client’s defense. The contract provided, in pertinent part, that the general contractor:

shall . . . defend and hold harmless [the developer] and its . . . consultants . . . architects . . . (“Indemnitees”) [i.e., our client], from and against any and all loss, cost, expense . . . claim, demand, penalty or cause of action (including reasonable attorney fees and legal costs at trial and on appeal) arising from or in any way related to, or resulting from, performance of [the GC’s] Work under the Contract Documents, provided that such claim, damage, loss or expense is attributable to [the GC’s] duties or obligations under this Contract, to the extent caused by the intentional or negligent acts or omissions of [the general contractor], or [the general contractor’s] Subcontractors or Sub-subcontractors, anyone . . . for whose acts they may be liable . . .

(emphasis added).

With little hesitation, the general contractor refused to defend our client. The general contractor relied upon the Complaint’s allegations that our client performed its threshold inspection work negligently, and that such allegations are claims of direct negligence. The general contractor added that it can only be responsible for defending our client in the context of a pure vicarious liability claim. However, the contract provided for a duty to defend for “any . . . claim . . . arising from or in any way related to [the general contractor’s] Work . . . provided that such claim . . . is attributable to the [general contractor’s] duties or obligations under this Contract.” Accordingly, we argued that the duty to defend obligation did not depend entirely upon vicarious liability, but rather any liability arising from the GC’s work, whether vicarious or otherwise. The Court ultimately agreed.

As a procedural matter, we initially brought a crossclaim and eventually filed a motion for summary judgment against the general contractor based upon the duty to defend, per the contract between the Plaintiff Developer and the GC, seeking attorney’s fees, costs, and interest on those amounts incurred in defending the claim. In doing so, we relied upon, by analogy, Camp, Dresser & McKee, Inc. v. Paul N. Howard Co., 853 So.2d 1072, 1077 (Fla. 5th DCA 2003), where the Court held that “common law indemnity is an equitable remedy that arises out of obligations imposed through special relationships, but contractual indemnity is not concerned with ‘special relationships’ or vicarious, constructive, derivative or technical liability; it is concerned with the express terms of the agreement to indemnify[,]” citing Metropolitan Dade County v. Florida Aviation Fueling Co., 578 So.2d 296 (Fla. 3d DCA 1991), and Grain Dealers Mut. Ins. Co. v. Quarrier, 175 So.2d 83 (Fla. 1st DCA 1965). We argued that, if the duty to indemnify is not concerned with vicarious liability, neither should the duty to defend. The Court agreed and found that the general contractor had a duty to defend our client relative to the entire lawsuit.

Having obtained summary judgment, only the issue of damages remained to be litigated. Before incurring additional fees and costs, the general contractor settled with our client for a favorable amount that exceeded the defense costs of the underlying litigation. We are very proud and pleased to be able to successfully represent clients in complex construction litigation.

Posted By Thomas Shea