All posts by Christie Bredahl

Christina Bredahl Gierke is a partner in the firm’s Orlando office. Mrs. Gierke focuses her practice in the areas of complex commercial and civil litigation, with an emphasis in construction litigation, professional malpractice law, and condominium and homeowners’ association law. Mrs. Gierke earned a Bachelor of Science degree in Mathematics from the University of Richmond and her Juris Doctorate from Florida State University College of Law.
18DEC 2015

As Florida’s 2016 Legislative Session approaches, two companion bills have been introduced – Senate Bill (“SB”) 316 and House Bill (“HB”) 297.  These bills seek to address the interpretation and application of the statute of repose set forth in § 95.11(3)(c), Florida Statutes. Intended to impose finality on the availability of claims for latent defects, the statute of repose imposes a ten-year expiration date on actions founded upon the design, planning, or construction of improvements to real property.  Per the statute, the ten-year expiration date begins to run from the latter of the following events:

  1. Actual possession of the improvement by the owner;
  2. Issuance of a Certificate of Occupancy;
  3. Abandonment of the construction, if not completed; or
  4. Completion or termination of the contract between the professional engineer, registered architect, or licensed contractor and his or her employer.

SB 316 and HB 297 were introduced as a direct response to the Fifth District Court of Appeal’s decision in Cypress Fairway Condominium Association, Inc. v. Bergeron Construction Co., Inc., 164 So. 3d 706 (Fla. 5th DCA 2015).

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27JUL 2015

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.

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18FEB 2015

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

14JAN 2015

On December 24, 2014, the United States Court of Appeals for the Eleventh Circuit published an opinion finding no coverage for a shipbuilder under a marine engineering firm’s Architect’s and Engineer’s professional liability insurance policy.  Atlantic Marine Florida, LLC, et al. v. Evanston Ins. Co., et al., No. 13-11342 (to view the opinion please click here).

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25APR 2013

The Design Professional Limitation of Liability Act, that we have been following and discussing here and here, outlined in the version of SB 286 that ultimately passed both the Senate and House has been approved by Governor Scott.  Governor Scott signed the act on April 25th.  The act creates § 558.0035, Florida Statute, and will take effect on July 1, 2013. It does not appear that this new statute will apply retroactively and will only apply to contracts entered into on or after July 1, 2013.

22APR 2013

As we have previously posted, we have been closely monitoring Senate Bill (“SB”) 286 and House Bill (“HB”) 575, which have moved quickly through their respective committees and chambers with little opposition.  On March 27, 2013, the Senate passed SB 286 by a 37 to 1 vote.  SB 286 was then substituted in place of HB 575 (thus tabling HB 575).  Subsequently, the House passed SB 286 by a 103 to 13 vote on April 17, 2013.

SB 286 is now being converted into an “act” for presentation to the Governor.  If presented while the legislature is in session, the Florida Constitution allows a 7-day period following presentation of the act to Governor Scott within which Governor Scott can either sign or veto the bill. If the legislature adjourns sine die before an act is presented to the Governor or while an act is in the Governor’s possession, the Governor has 15 days from the date of presentation in which to take action.  The last day of this year’s regular legislative session is May 3, 2013.  There is no indication that Governor Scott intends to veto this bill.

The version of SB 286 that ultimately passed both the Senate and House was similar to the originally-introduced bill.  The only material amendment to the original version of the bill was the addition of geologists within the act’s definition of design professional.

The act permits business entities providing professional services to limit by contract the liability of their individual employees or agents for negligence arising from the performance of professional services under a contract.  Florida courts have routinely held that provisions within in a professional services contract which place limitations on the liability are enforceable as to the professional association/business entity only and have not extended the contractual limitations of liability to the individual professionals performing the contracted services on behalf of the professional association/business entity.  The act provides the professional association/business entity the ability to extend the contractual limitations of liability to the individual professionals it employs.

The act, if executed by Governor Scott, will take effect on July 1, 2013.  The Legislature has not expressed an intent that the law apply retroactively.  For the protections afforded to design professionals to be enforceable, the professional services contract must comply with the requirements of the act, one of which is to “include a prominent statement, in uppercase font that is at least 5 point sizes larger than the rest of the text, that, pursuant to this section, an individual employee or agent may not be held individually liable for negligence.”  Due to the act’s contract requirements, it is very unlikely that this law can be retroactively applied because it is impossible for existing contracts to contain the disclaimer or waiver.  Therefore, we do not anticipate any successful litigation with respect to the retroactive application of the law to contracts in effect before July 2, 2013.

Nonetheless, it will be prudent for design professionals – architects, interior designers, landscape architects, engineers, surveyors, and geologists – and their related business entities to familiarize themselves with this proposed new law and ensure strict compliance with the contractual requirements of the law moving forward.

We will provide a final update on the Design Professional Bills and the new Florida Statute the Design Professional Bills propose, § 558.0035, Florida Statute, when Governor Scott either signs or vetoes the bill.

04MAR 2013

Florida’s 2013 Legislative session kicks off tomorrow, Tuesday March 5, 2013. This legislative session, CSK’s Construction Law Division is closely following Senate Bill (“SB”) 286 titled Design Professionals and its identical companion bill in the House, House Bill (“HB”) 575.  Both bills were introduced and filed in January of 2013.  The bills intend to alter the current state of Florida Law concerning liability of individual engineers, surveyors and mappers, architects and interior designers, and landscape architects.

Presently, tort claims against individual engineers, surveyors and mappers, architects and interior designers, and landscape architects are not barred by the economic loss rule[1] even though the individual professional was performing services pursuant to a contract between the individual professional’s employer and the property owner that contained provisions limiting liability.   Florida courts have routinely held that provisions within in a professional services contract which place limitations on the liability are enforceable as to the professional association/business entity. See e.g. Fla. Power & Light v. Mid-Valley, Inc., 763 F.2d 1316 (11th Cir. 1985)(applying Florida law).  However, Florida courts have not extended such contractual limitations on liability to the professionals individually performing the contracted services.  See Witt v. La Gorce Country Club, 35 So.3d 1033 (Fla. 3d DCA 2010) and Moransais v. Heathman, 744 So.2d 973 (Fla. 1999).

For example, in Witt, Defendant Witt was a professional geologist licensed in Florida.  Witt’s company, Gerhardt M. Witt and Associates, Inc. (“GMWA”), entered into contracts with La Gorce Country Club for geological consulting services related to a water treatment system. The contracts between GMWA and La Gorce each contained limitation of liability provisions, limiting the liability of [GMWA] and its subconsultants to the total dollar amount of the approved portions of the scope for the project. Within 14 months after the project was completed, the system failed completely.  Accordingly La Gorce sued GMWA and Witt, individually, for professional malpractice, among other things.

The Third District Court of Appeal ultimately held that Witt and GMWA were liable to La Gorce for professional malpractice, but that the limitation of liability provision applied only to GMWA and not to Witt.  The court noted that Witt was not a party to the contract and that the Florida Statutes contained a section that recognized a cause of action against an individual professional geologist for professional negligence, irrespective of whether the geologist practices through a corporation. Based on Florida Statutes and Moransais, the court determined that a cause of action in negligence exists irrespective, and essentially, independent of a professional services agreement.  Thus, the court held that the limitation of liability provision was, as a matter of law, invalid and unenforceable as to Witt.

SB 286/HB 575 seeks to amend this current state of the law by extending contractual provisions limiting liability entered into between a business entity[2] and property owner, to individual professionals, like Witt.  The bills specifically create Florida Statute Section 558.0035, amends Florida Statute Section 558.002 to include as (3) a definition of “business entity,” and amends Florida Statute Sections 471.023(3) (liability as to engineers), 472.021(3) (liability as to surveyor and mapper practices), 481.219(11) (liability as to architects and interior designers), and 481.319(6) (liability as to landscape architects) to include the provision “except as provided in s. 558.0035.”

Based on the current proposed bill text, Florida Statute Section 558.0035 is created and permits business entities to limit by contract the liability of individual employees or agents of that business for negligence arising from the performance of professional services under a contract.  Section 558.0035 enumerates a number of conditions that must be met though in order for the liability limitation to apply.  Specifically, those conditions are:

  • The business entity must execute the contract with the claimant or with another entity for professional services on behalf of the claimant;
  • The contract must include a prominent statement in uppercase font that is at least 5 point sizes larger than the rest of the test, that the individual employee or agent may not be held liable;
  • The individual employee or agent must not a party to the contract;
  • The business entity must maintain professional liability insurance if required by the contract;
  • The conduct by the design professional giving rise to the damages occurs within the course and scope of the contract; and
  • The harm is solely economic and the harm does not extend to persons or property beyond the contract.

In its current form, the bill provides an effective date of July 1, 2013.

To date, SB 286 has been referred to the Senate’s Regulated Industries, Judiciary, and Community Affairs Committees and HB 575 has been referred to the House’s Civil Justice Subcommittee, Business and Professional Regulation Subcommittee and Judiciary Committee.  The bills will be heard by a respective committee and if passed by that committee will proceed to the next committee.  Should the bills pass through all committees; one of the two companion bills will be ultimately voted on by the entire Senate and House.  If the bill does not move through the committees, or is not ultimately voted on by the Senate and/or House before the close of session the bill will be said to have “died” either within the respective committee or on the floor of the Senate or House.

To date, SB 286 has already started moving during the pre-session committee meetings.  The Senate Regulated Industries committee voted on the bill on February 6, 2013.  The bill passed with an 8-0 vote.  SB 286 is now in the Senate’s Judiciary Committee and is waiting to be calendared on the committee’s meeting agenda.  In contrast, HB 575 is awaiting discussion and a vote in the House’s Civil Justice Subcommittee.

We intend to continually track these two bills through session and will update this blog with news, votes, amendments, and potential implications concerning these bills.  Please check back frequently for more Capitol Reports concerning SB 286 and HB 575.

[1] The Economic Loss Rule is a judicially created doctrine that sets forth circumstances under which a tort action is prohibited if the only damages suffered are economic losses.  The Economic Loss Rule is applicable when the parties are in contractual privity and one party seeks to recover damages in tort for matters arising from the contract.

[2] The bills define “business entity” as any corporation, limited liability company, partnership, limited partnership, proprietorship, firm, enterprise, franchise, association, self-employed individual, or trust, whether fictitiously named or not, doing business in this state.