David Salazar, Esq., a partner in Cole, Scott & Kissane’s (“CSK’s”) Construction Group, recently filed and argued a Motion for Judgment on the Pleadings (the “Motion”) on behalf of a threshold inspector in a complex, multi-party construction lawsuit. The general contractor on the project sued CSK’s client for, among other things, professional negligence. The claimed damages exceeded $28,000,000.00. The Circuit Court in and for Miami-Dade County (the “Court”) granted the Motion and entered judgment on the pleadings as to the general contractor’s professional negligence claim against the threshold inspector.
The crux of the Motion was based on the rule that design professionals generally do not owe duties to protect parties with whom they are not in privity of contract from purely economic losses. The authority relied upon centered around AR Moyer, Inc. v. Graham, 285 So. 2d 397, 402 (Fla. 1973) and Spancrete, Inc. v. Ronald E. Frazier & Associates, P.A., 630 So. 2d 1197 (Fla. 3d DCA 1994). In AR Moyer, Florida’s Supreme Court carved out an exception to this general rule in situations where the design professional has supervisory authority over the general contractor tantamount to the power of life and death over the project. In Spancrete, Florida’s Third District Court of Appeals held that an architect’s power to inspect and reject work does not constitute the supervisory control sufficient to satisfy the AR Moyer exception. Continue reading
After a 30 day trial, Mike Brand and David Salazar secured a complete defense verdict in Monroe County (the Florida Keys). Mike and David represented a general contractor who replaced 6 miles of a water pipeline on the median of the Overseas Highway. Plaintiff allegedly went into the median as part of an emergency maneuver because the FDOT defines this area as a “clear zone” (designed to be a safe refuge for the motoring public) and suffered a traumatic brain injury as a result. He claims our client built a concrete pad that wasn’t flush to grade per the plans and specifications (as well as the FDOT Greenbook and Utility Accommodations Manual) causing him to fly off his motorcycle 14 feet in the air and land on his face.
Plaintiff, himself a former FDOT employee, claimed he was aware this was a clear zone. He suffered a traumatic brain injury, stopped breathing at the scene, was air lifted to Jackson, and was in a coma thereafter.
Plaintiff’s counsel asked the jury for $14.5 Million. The jury was out 33 minutes.
The Florida Supreme Court recently issued an opinion in the Maronda Homes case and broadened the common law implied warranty of fitness and merchantability, also known as an implied warranty of habitability. Maronda Homes dealt with whether a developer’s common law implied warranty of fitness and merchantability extends to initial purchasers of residential property for defects in offsite improvements. The Supreme Court answered the question in the affirmative. Continue reading
The construction industry is not only riddled with a web of technical rules, regulations, and contractual scenarios, the lawyers in this industry often rely on such technicalities to prevail in litigation on behalf of their clients – occasionally contrary to what appears just and fair. However, from time to time, the courts step up and say “enough! We must be governed by the spirit, not just the letter, of the law.” This brief article discusses the United States District Court for the Middle District of Florida’s (Tampa Division) recent application of the futility doctrine in the context of a Miller Act claim in U.S. f/u/o Cemex v. EPB, 2012 WL 831610 (M.D. Fla. March 12, 2012).
In EPB, subcontractor, EPB, sub-subcontracted with John Carlo, Inc., to complete a portion of a government project for the United States Air Force. John Carlo purchased materials from Cemex in connection with its sub-subcontract. EPB and John Carlo’s contract provided that John Carlo was to supply EPB “with sworn statement(s), lien waiver(s), guarantee(s) and other reasonably requested documents,” as a condition precedent to final payment. “EPB withheld Carlo’s payment because Carlo had not provided the lien waivers and all of the releases required” per their contract. However, Cemex (John Carlo’s assignee) argued it had met the conditions precedent because it provided John Carlo with a lien waiver, conditioned upon EPB’s payment. EPB argued the letter of the law; that John Carlo and other sub-subcontractors of John Carlo had not provided the required documentation and therefore John Carlo (and by extension)
Cemex were not entitled to payment.
Cemex argued it was entitled to summary judgment because the “lien” period had expired under the Miller Act and therefore providing lien waivers would be futile. The Middle District noted that “[u]nder the doctrine of futility, a party may be excused from performing a condition precedent to enforcement of the contract, if performance of the condition would be futile.” Alvarez v. Rendon, 953 So. 2d 702, 708-709 (Fla. 5th DCA 2007). However, the court held that genuine issues of material fact remained as to “whether there were other effectual purposes for the [subject] documents.” The court further held that EPB could require John Carlo and its other sub-subs to provide general releases of liability.
While the Middle District denied Cemex’s motion for summary judgment, it recognized the futility doctrine in the Miller Act context and implicitly held that the futility issues could be addressed by the trier of fact and, ultimately, prove dispositive at trial. Thus, the futility doctrine in this context is seemingly not futile.
The Magazine of University of Florida’s School of Building Construction recently published an article written by David Salazar. The article is a primer on the difficulties a contractor faces when dealing with change order work. Additionally, the article sets forth the inevitable problems a contractor encounters and provides some risk management tips that can help the contractor manage these problems.