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Thursday, January 31, 2013


CONSTRUCTION LAW UPDATES

 

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.

 

            BUSINESS LITIGATION UPDATES

 

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.