Follow by Email

Friday, May 24, 2013

Senate Bill No. 286 Protects Design Professionals from Personal Liability

  1. Introduction
            On April 24, 2013, Gov. Rick Scott signed Senate Bill No. 286 (the “Bill”) into law.  The Bill protects design professionals employed by a business entity from personal liability in certain situations and supersedes existing common law on the issue. 

  1. Summary of the Changes
Most importantly, the Bill created section 558.0035, Florida Statutes, which provides that a design professional employed by a business entity or an agent of the business entity is not individually liable for damages resulting from negligence occurring within the course and scope of a professional services contract if:

a)     The contract is made between the business entity and a claimant or with another entity for the provision of professional services to the claimant;

b)     The contract does not name as a party to the contract the individual employee or agent who will perform the professional services;

c)     The contract includes a prominent statement, in uppercase font that is at least 5 point sizes larger than the rest of the text, that, pursuant to section 558.0035, an individual employee or agent may not be held individually liable for negligence;

d)     The business entity maintains any professional liability insurance required under the contract; and

e)     Any damages are solely economic in nature and the damages do not extend to personal injuries or property not subject to the contract.

The Bill also added “geologist” to the definition of design professional in s. 558.002 and amended ss. 471.023 (engineers), 472.021 (surveyors and mappers), 481.219 (architects), 481.319 (landscape architects), and 492.111 (geologists) to reference the new Fla. Stat. § 558.0035. 

The practical effect of section 558.0035 is that business entities will now have the opportunity going forward to limit the personal liability of their design professionals.  It is important to remember, however, that this protection from personal liability is not without limit.  Whether section 558.0035 is applicable depends not only upon the existence of the statement required by subsection (c), but also upon the conduct of the design professional and the type of damages alleged.  For example, the negligence must occur within the “course and scope of a professional services contract.”  Thus, a design professional whose conduct exceeds mere negligence and can be considered reckless or intentional may be precluded from claiming protection under the new law.  Likewise, a design professional acting beyond the scope of the professional services contract may also be precluded from claiming protection.  Moreover, protection is also not available where the damages alleged arise from personal injuries or property not subject to the contract. 

  1. Effect on Existing Common Law

Senate Bill No. 286 effectively supersedes existing case law addressing the personal liability of design professionals.  For example, in Witt v. La Gorce Country Club, Inc., 35 So. 3d 1033 (Fla. 3d DCA 2010), the Third District Court of Appeal found that even if the geologist, in his individual capacity, was covered by the limitation of liability provisions contained in the contract with his employer and the owner, such a limitation was unenforceable as a matter of law.  Under the amendments provided by Senate Bill No. 286, a geologist is now expressly included within the definition of design professional and would not be personally liable if all of the statutory requirements were followed.

  1. Retroactivity
It does not appear that Senate Bill No. 286 will have retroactive effect because the Bill expressly provides that it shall take effect July 1, 2013.  The legislature’s inclusion of an effective date for an amendment is considered to be evidence rebutting intent for retroactive application of a law.  See State Dep’t of Rev. v. Zuckerman-Vernon Corp., 354 So. 2d 353, 358 (Fla. 1977).  Moreover, a substantive statute will generally not operate retroactively.  Because the Bill affects the rights, duties, and/or powers of design professionals and negligence claimants, it is likely that the Bill will be classified as substantive, and not operate retroactively.

Even if a Florida court finds that the Bill is retroactive, it’s application to existing contracts is unlikely given the new requirement contained in section 558.0035(1)(c) that the contract include “a prominent statement, in uppercase font that is at least 5 points 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.” 

  1. Practice Pointers
  • Owners:  Evaluate and adjust current professional liability insurance requirements in existing contracts prior to accepting a personal liability limitation for design professionals. 
  • Architects, Interior Designers, Landscape Architects, Engineers, Surveyors, and Geologists:  To take advantage of the new law, ensure that all new contracts:
    • do not name as a party to the contract the individual employee or agent who will perform the professional services;
    • include a prominent statement, in uppercase font that is at least 5 point sizes larger than the rest of the text, that, pursuant to section 558.0035, Florida Statutes, an individual employee or agent may not be held individually liable for negligence; and    
    • Ensure the business entity maintains all professional liability insurance required by the contract.

Wednesday, February 6, 2013


HB 0521 Regulation of Cranes

This issue has been before the legislature for several years and finally passed in this session. It amends Section 489.113 of the Florida Statutes to preempt any regulation of hoisting equipment, mobile cranes, conveyors, and tower cranes used in construction. This prevents a patchwork of different regulations by cities and counties. The effect is to make the recent OSHA changes to the rules regulating crane operations as the single standard to be followed. In addition, the prohibitions and preemptions include work site regulations regarding hurricane preparedness or public safety.

Effective Date:  April 2012
SB 1202 Construction Liens and Bonds

Section 95.11 was amended to make it clear that payment bonds under Section 255.05 and Chapter 713 as well as payment bonds under Section 337.18 are subject to the one year statute of limitation established in those sections. Payment bonds which are not subject to those sections also have a one year statute of limitation under Section 95.11(5)(e).

For Section 255.05, this bill now:
  • Requires that the bond number assigned by the surety be placed on the first page of the bond.
  •  Requires that the contractor, before commencing work, record the required statutory bond in the official records of the county where the project is located and provide the public entity contracting for the work a certified copy of the recorded bond. The public entity may not make any payments on the project until it receives the certified copy.
  •  Requires the governmental entity having charge of the work to provide a certified copy of the   contract with the general contractor and the recorded bond upon the request of a claimant.
  • Provides, for contracts entered into after October 1, 2012, that any limitation or expansion of the effective duration of the bond or any additional conditions precedent to the enforcement of a claim are unenforceable.
  • Requires that the contractor or its attorney serve a Notice of Contest of Claim Against Payment Bond rather than the Clerk of Court.
  • Changes the requirement that a Notice to Contractor be “delivered” to a requirement that it be “served.”
  • Provides that where the contractor records and furnishes the public entity with a bond and written  consent of surety, the public entity may not condition payment on the production of a release or waiver from a claimant. The surety may revoke its consent by serving written notice on the public entity. This will apply only to contracts entered into on or after October 1, 2012.
Section 255.0518 was amended to:
  • Require that sealed bids for construction work which include prices be opened in a public meeting  and the name and amount of the bid must be announced at that time.
  • Require a public entity to make available, upon request, the name of a bidder and amount of the bid.
For Chapter 713 Part I, this bill:

    Amends 713.10 – Liens on Leaseholds – to make the prohibition of liens on a particular property effective for a leasehold that has a lien prohibition even if some of the other leases on the property do not have language prohibiting liens.

    Amends 713.13 – Notice of Commencement – to delete language in the Notice of Commencement stating that the Notice of Commencement may not expire before the completion of construction and final payment to the contractor.

    Amends 713.132 – Notice of Termination – to require service of the Notice of Termination only upon those who have served a Notice to Owner or who have a direct contract with the owner.

    Amends 713.16 – Demand for copy of contract and statements of account – to require that any request for a sworn statement include a description of the property, the names of the owner, contractor, and the lienor’s customer as set forth in the lienor’s Notice to Owner or for a bonded job, the Notice to Contractor.

    Amends 713.18 – Manner of serving notices and other instruments – to add “common carrier delivery service” and “global express guaranteed” to the methods of service and deleting “overnight or second day delivery. It would allow posting of a notice on a site only when other methods of service cannot be accomplished.

    Amends 713.18 – Manner of serving notices and other instruments – to provide that service of a Notice to Owner or a Notice to Contractor is effective as of the date of mailing if it is sent by one of the specified methods and is mailed within forty days of commencing work and a log of the mailing is maintained.

    Amends 713.18 – Manner of serving notices and other instruments – to allow reformatting a bad address in a Notice of Commencement and use of an address from the building permit application if the address in the Notice of Commencement is bad.

    Amends 713.23 – Payment bond – to provide that where a copy of the bond is not attached to the recorded Notice of Commencement, the Notice to Contractor may be served up to forty-five days after the lienor is served with a copy of the bond.

    Amends 713.23 – Payment bond –  to provide that a Notice to Owner served on a contractor meets the requirement for a 45 day Notice to Contractor.

    Amends 713.23 – Payment bond – to clarify that a combined Notice to Owner and Notice to Contractor may be used and makes minor changes to the statutory form of the Notice to Contractor.

    Amends 713.23 – Payment bond – to provide that where the bond is not recorded before commencement of construction, the time for serving a Notice of Nonpayment may be calculated, at the option of the lienor, as 90 days from final furnishing of labor or material or 90 days after  the lienor is served with a copy of the bond.

    Amends 713.23 – Payment bond – to allow a contractor to serve a Notice of Contest of Bond rather than the current requirement that the Clerk serve it.

    Amends 713.23 – Payment bond – to provide that, for contracts entered into after October 1, 2012,  any limitation or expansion of the effective duration of the bond or any additional conditions precedent to the enforcement of a claim are unenforceable.

    Amends 713.23 – Payment bond – to require that the bond be attached to any Notice of Bond.

    Amends 713.23 – Payment bond – to allow a contractor to serve a Notice of Bond rather than the current requirement that the Clerk serve it.

Effective Date: October 1, 2012

HB 1013 Construction Warranties
A number of years ago, Florida courts created a common law implied warranty for construction called the Warranty of Habitability. This is similar to the implied Warranty of Fitness and implied Warranty of Merchantability that is applicable to goods. The implied part means that it exists as a matter of law as distinguished from a written warranty. The Warranty of Habitability extends only to residential improvements and only to the first purchaser. Several cases have addressed the issue of how far the coverage of this warranty extends. They have held that the warranty only extends to the home or other improvements immediately supporting the home.

In a recent case, this warranty was extended to cover roads and drainage systems that were part of the subdivision improvements where the home in question was located. This Act creates Section 553.835 in the Florida Building Codes section of the statutes and contains legislative findings that this warranty should not extend to “off-site Improvements.” Off-site improvements are defined as the street, road, driveway, sidewalk, drainage, utilities or any other improvement or structure that is not located on or under the lot except for improvements that are shared by two or more separately owned structures that are attached, if such improvements affect the habitability of one or more of the structures.

This act forbids any cause of action by the purchaser of a home or a homeowners’ association for off-site improvements. This does not alter any existing rights of purchasers of homes or homeowners’ associations to pursue any other causes of action arising from defects on offsite improvements based on contract, tort or statute including, but not limited to, Sections 718.203 and 719.203. This act is retroactive which means that it will apply to any pending cases.

Effective Date: July 2, 2012

SB 704 Building Code Bill

This is the glitch building code bill for the Session.  It has the same language as SB 1202 requiring local governments to publicly open and read bids. It also has the same language as HB 387 allowing voluntary electronic filing of construction plans.
Among other things, this bill:
  • Defines a “bedroom.”
  • Allows transfer of permits for onsite sewage treatment along with title to the property; provides that an onsite sewage treatment system is not abandoned by disconnection caused by a disaster and that change to an onsite sewage treatment system is not required for a remodeling addition that does not add a bedroom.
  •  Requires use of an electrician for work on solar panels when the local government is participating in the Department of Energy Rooftop Solar Challenge.
  • Adds skylights and related work to the scope of work of a roofing contractor.
  • Allows Class A and Class B Air Conditioning Contractors and Mechanical Contractors to test and evaluate HVAC systems, but mandatory licensing is not established for these services.
  •  Deletes the provision for licensing glass and glazing contractors added last year. This language is also in HB887/SB 1252.
  •  Makes the contractor responsible for the work of an unlicensed subcontractor working under his license.
  •  Exempts reconstruction and repair of hunting cabins from the Building Code under certain conditions.
  • Requires specific identification of reasons for denying or revoking a building permit.
  • Sets up a work group to develop a rule for alternate design of screen enclosures to allow removal to accommodate high wind events.

Effective Date: July 1, 2012

HB 887 Department of Business and Professional Regulation

Up until 2005 there were provisions for registered contractors to be grandfathered in to become certified contractors.  It required a valid registered local license, passing of a written exam substantially similar to the requirements of a certified contractor, at least 5 years of experience as a contractor, no license revocation or suspension and no fine in excess of $500.00 in the previous 5 years and there is compliance with the insurance and financial responsibilities set out in Section 489.115(5).  This has been effectively reenacted by moving the expiration date to November 1, 2014.

Effective Date: October 1, 2012

By: Christina L. Feyen, Esq.

EEOC Provides New Guidance on Criminal Background Checks

             The Equal Employment Opportunity Commission (EEOC) recently issued new Enforcement Guidance regarding employers’ criminal background policies, taking a tougher stance against blanket employment policies that automatically reject job candidates with criminal records. The new Enforcement Guidance is rooted in the EEOC’s long-held view that an employer’s use of criminal history information has a tendency to disproportionately and adversely affect minority groups and, thus, violate Title VII.
             Previously, employers had to consider three criteria when making the decision to hire an applicant with a criminal background: 1) the nature and gravity of the offense or conduct; 2) the time that has passed since the offense or conduct and/or completion of the sentence; and 3) the nature of the specific position the applicant has applied for.
            Now the EEOC recommends that employers go through an extensive “individual assessment” on each candidate, including but not limited to, the following criteria:
  • the number of offenses for which the applicant was convicted
  • evidence that the applicant performed the same type of work, post-conviction, with the same or a different employer, with no known incidents of criminal conduct
  • the length and consistency of employment history before and after the offense or conduct
  • rehabilitation efforts, such as education or training
  • employment or character references and other information regarding fitness for the particular position
  • whether the applicant is bonded under a federal, state or local bonding program.
However, if the applicant does not cooperate in providing the background information requested by the employer, the employer can make the hiring decision based on the information at hand.      
            Employers who choose to utilize criminal background checks should use the following suggested “best practices” to avoid possible discrimination complaints or lawsuits:
     General Considerations
  • Eliminate policies or practices that exclude people from employment based on any criminal record.
  • Train managers, hiring staff and decision makers about Title VII and its prohibition on employment discrimination.
Develop a Policy
  • Develop a narrowly tailored written applicant screening procedure and policy; identify essential job requirements and determine specific offenses that may demonstrate unfitness for performing such a job.
  • Determine the duration of exclusions for criminal conduct based on all available evidence and include an individualized assessment of each potential or current employee’s background report.
Questions About Criminal Records
  • Limit job application inquiries to records for which exclusion would be job related for the position in question and consistent with business necessity.
  • Keep information about applicants’ and employees’ criminal records strictly confidential. Only use the information for the purpose for which it was intended.
          Employers should consult an attorney when evaluating or establishing new policies to ensure compliance with any applicable local or state laws.

By: Christina L. Feyen, Esq.

Thursday, January 31, 2013



GMPF Framing, LLC., v Villages at Lake Lily Associates, LLC., 2012 WL 5364649 ( Fla. 5th DCA 2012)

In a nutshell: Prevailing on a lien claim does not automatically entitle you to an award of attorney’s fees.

GMPF filed a lien foreclosure action against the owner of Villages at Lake Lily for certain unpaid work. As part of its foreclosure suit, GMPF asserted claims for unjust enrichment and for an equitable lien. The owner prevailed on the lien claim and was awarded attorney’s fees under Florida Statute 713.29 as the “prevailing party” by the Trial Court. GMPF appealed the Trial Court’s award of fees arguing that it was improper to award the Owner fees before the claims for unjust enrichment and equitable lien had been decided. The 5th District agreed with GMPF and reversed the award of fees until the other claims raised by GMPF were considered. The 5th District reasoned that GMPF may yet be the “prevailing party” under 713.29 if it carried the day on its other two claims. The 5th District explained that GMPF may still prevail on the “significant issues” of the case (unjust enrichment and equitable lien).


Espresso Disposition Corp., v. Rowland Coffee Roasters, Inc., 37 Fla. L. Weekly D2643A (Fla. 3rd DCA 2012)

In a nutshell: Accidently copying and pasting a provision into your contract will not remove it from the agreement.

            In Espresso, two parties to a contract failed to realize that they had designated Illinois as the exclusive place to bring any disputes regarding their contract. The party that drafted the contract accidently copied and pasted a venue selection clause from another contract. The drafter of the contract argued that the clause was erroneously made part of the contract and that venue should be in Florida. The 3rd District held that the case must be dismissed in Florida because venue provisions are “enforceable and presumptively valid”. The Court refused to excuse the drafter from his error and enforced the venue selection clause.

Vila & Son Landscaping Corp., v. Posen Construction, Inc., 2012 WL 4093545 (Fla. 2nd DCA 2012).

In a nutshell: Being terminated under your contract because another contractor is willing to do it cheaper is not grounds for contesting a termination for convenience.

            In Vila, a subcontractor was terminated by the contractor pursuant to a termination for convenience provision in the contract. The contractor explained that the subcontractor was terminated because someone else was willing to do the same work for less money. The subcontractor sued the contractor arguing that the termination was in bad faith and sought to enforce its contract. The Second District sided with the contractor holding that the subcontractor’s termination for the reason stated was permissible under the language of the contract.

The Cool Guys, LLC., v Jomar Properties, LLC., 2012 WL 716084 (Fla. 4th DCA 2012)

In a nutshell: When your lien is transferred to a bond, the clock starts ticking once again on your claim.

            In Cool Guys, a lienor filed a lien foreclosure action against the Owner’s property after properly recording its claim of lien. The Owner thereafter transferred the lien to a Lien Transfer Bond as provided for under Florida Statutes §713.24. According to §713.24 once a party posts a lien transfer bond (effectively removing the lien from the subject property) a lienor must amend its complaint to include a claim against the bond within one year of the bond being posted. In Cool Guys the lienor amended its complaint to include a claim against the bond 2 years after it was posted. The Owner moved for summary judgment arguing that the lien was transferred to the bond and that the lienor had waived its rights against the bond by failing to amend its complaint. The Fourth District agreed with the Owner and entered summary judgment against the lienor.


Guarantee Co., of North America v. Mercon Construction Co., 2012 WL 1232104 (MD Fla. 2012)

In a nutshell: Indemnification agreements can result in settlements you never planned for.

            In Mercon, the contractor defaulted on the subject project and its surety stepped in to pay for completion of the job. After making payment under the bond, the surety sued the contractor under an indemnity clause in their agreement. The surety then proceeded to settle a claim the contractor had with another bond company claiming it was entitled to do so pursuant to their indemnity agreement. The contractor argued that the surety had no authority to settle with the unrelated bonding company by virtue of the indemnity agreement. The Middle District disagreed with the contractor holding that the indemnity agreement as drafted permitted the surety to take possession and otherwise use any collateral of the contractor in the event of a default. The court explained that the term collateral included the contractor’s contract rights and causes of action.




Florida Hurricane Prot. And Awning Inc., v. Pastina, 43 So. 3d 893 (Fla. 4th DCA 2010)

In a nutshell: Not all attorneys’ fees provisions are created equal. Be careful to read the scope of the relevant provision.

            In Pastina, a homeowner brought a breach of contract claim against a contractor that had performed shutter installation work at his house. The homeowner prevailed on its claim and sought an award of attorney’s fees pursuant to the contract. The trial court awarded fees to the owner and the contractor appealed. The 4th District in reversing the Trial Court’s award of fees, explained that the contract as drafted provided for an award of fees and costs only in suits for collection of monies owed. The court explained that the Owner’s suit was for breach of contract and not a collection action and therefore an award of fees was improper.

Meadows v. Medical Optics, Inc., 90 So. 3d 924 (Fla. 4th DCA 2012)

In a nutshell: In order to determine the appropriate amount of a temporary injunction bond, a court must conduct a hearing on the matter.

            In Meadows, a former employer sought a temporary injunction against its former employee pursuant to a non-compete agreement. The Trial Court entered the temporary injunction and set a bond of $100,000 to be posted by the former employer. The Trial Court set the bond without conducting a hearing on the issue of the bond amount. The former employee appealed the entry of the temporary injunction. On appeal, the 4th District upheld the entry of the temporary injuction but remanded the action to the Trial Court with instructions to conduct a hearing on the issue of the amount of the bond. The 4th District explained that the Trial Court should have conducted an appropriate evidentiary hearing to determine whether the amount of the bond correlated to the potential damages the defendant might suffer should the injunction have been improperly entered.

Telesur v. DOT, Inc., 2012 WL 5499994 (Fla. 2nd DCA 2012)

In a nutshell: Ignore personal jurisdiction at your own risk, a Defendant with no connections to the State of Florida can’t be sued in the State of Florida.

            In Telesur, the defendants filed a motion to dismiss the complaint alleging that the Trial Court lacked personal jurisdiction. The Trial Court denied the motion and the defendants appealed. The 2nd District reversed the Trial Court’s denial explaining that the Plaintiffs’ had failed to adequately show how the Trial Court had jurisdiction over a non-resident internet corporation. The District Court explained that in the absence of any allegations that the Defendants had interfered with business relationships in the State of Florida, that the defendants had set up servers in this State or that the operative tortuous conduct came from communications made in the State, the Trial Court should not have denied the motion.

Anarkali Boutique Inc., v. Ortiz, 2012 WL 6163181 (Fla. 4th DCA 2012)

In a nutshell: A non-compete agreement is not terminated simply because your job status changes.

            In Ortiz, a former employer sought a temporary injunction against its former employee pursuant to a non-compete agreement. The employee argued that when his status was changed from employee to independent contractor, he was essentially terminated under the contract and the non-compete had expired. The Trial Court agreed with the former employee and denied the employer’s motion for an injunction. On appeal the 4th District reversed the Trial Court specifically finding that the language of the agreement did not support the employee’s argument. The 4th District disagreed with the former employee that a change in status was in fact a termination event.

Jasser v. Saadeh, 2012 WL 2328230 (Fla. 4th DCA 2012)

In a nutshell: A note that is silent as to the date of payment is due on demand.

            In Jasser, the Plaintiff sued to enforce a promissory note against the Defendants. Plaintiff claimed that the note was due on demand because there was no specific maturity date. The Trial Court agreed the note was payable on demand. On appeal, the 4th District upheld the lower court citing Florida Statutes §673.1081 and explaining that when a note is silent as to the time of payment, it is payable on demand.

Spencer Estates of Florida LLC., v. Havil, 2012 WL 6719463 (Fla. 5th DCA 2012)

In a nutshell: A separate and distinct lawsuit must be filed to challenge a property appraiser’s classification.

            Appellate court held that in the event a property appraiser fails to prospectively classify lands as it has in the past, the proper course of action for an aggrieved party is to file a new lawsuit seeking to reclassify the land. The court further found that such a claimant may be entitled to fees pursuant to Florida Statutes §57.105.

Rocka Fuerta Construction Inc., v. Southwich, Inc., 2012 WL 6719470 (Fla. 5th DCA 2012)

In a nutshell: An affirmative defense is just that, a defense. It is not a means to automatically dismiss a case.

            Appellate court held that the Defendant was not entitled to a dismissal of the suit brought against it by Rocka, where it alleged that the opposing side failed to inform the court of the existence of a settlement agreement. The court refused to find that the failure to disclose the existence of the settlement agreement was a fraud upon the court requiring sanctions and a dismissal. The court explained that the existence of the settlement agreement was an affirmative defense which the Defendant was entitled to raise.

Universal Music Venezuela, S.A., v. Montaner (2012 WL 6681989 (Fla. 3rd DCA 2012)

In a nutshell: The mere existence of an affiliated company of the Defendant in a State does not mean the court has automatic jurisdiction over the Defendant.

            Plaintiff sought to bring a lawsuit against a Venezuelan company in the State of Florida pursuant to Florida Long Arm Statute. The Plaintiff argued that despite the contracting being executed abroad and the Defendant having no offices or employees in the State, the court could exercise jurisdiction over the company because it was affiliated with a company based in Florida. The Appellate court found the lower court did not have jurisdiction pursuant to its relationship with the affiliated company because there was no evidence that principals of the defendant controlled or directed the activities of the company based in Florida.

Vorbeck v Bentancourt 2012 WL 6681995 (Fla. 3rd DCA 2012)

In a nutshell: Discovery can’t be used to create a cause of action.

            On the death of their father Plaintiffs’ inherited 50% interest in two separate companies. The Plaintiff’s suspected that the individual holding the remaining 50% was misusing the companies’ funds and filed a pure bill of discovery admittedly for the purpose of finding out if any wrongdoing had occurred. Defendant sought to dismiss the bill as a pure fishing expedition. The Appellate court agreed with the Defendant holding that a bill of discovery is not a tool to determine if any ground for suit exists but rather to determine theories of liability, identity of defendants or for collecting information to establish a condition precedent when no legal remedy exists to accomplish the same end.