The Soto Law Group, P.A.

CONSTRUCTION LAW UPDATES   GMPF Framing, LLC., v Villages at Lake Lily Associates, LLC., 2012 WL 5364649 ( Fla. 5 th 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 5 th District agreed with GMPF and reversed the award of fees until the other claims raised by GMPF were considered. The 5 th District reasoned that GMPF may yet be the “prevailing party” under 713.29 if ...

Customers filing for Chapter 11 or 7 Bankruptcy are a fact of life, yet few companies have any standard procedures to monitor for such filings or alert them as to what procedures should be followed with the bankruptcy court. Bankruptcy provides Debtors [formerly known as your customer] with various tools to shed contracts and financial obligations.   It also permits them to reorganize their business and sell valuable assets.   Suppliers which find themselves thrown in the mix of creditors and otherwise interested parties of the Debtor often have very little time to respond and properly determine if they should even be involved. The First Steps of Bankruptcy: Subsequent to the Bankruptcy petition filing and the dreaded “Automatic Stay” which freezes collection efforts against the Debtor, the Debtor will file the bankruptcy petition along with what are termed the “first day orders”.   These orders are filed to have the court approve retention of employees, special tr...

OWNERS, CONTRACTORS AND SUPPLIERS BEWARE             In response to legal action taken by The Pennsylvania Insurance Department, The Commonwealth Court of Pennsylvania issued an Order of Liquidation for First Sealord Surety on February 8, 2012. The Department’s actions were likely prompted by A.M. Best’s downgrading of First Sealord’s insurer ratings from an A- rating to a C- rating late last year amidst growing concerns of the company’s declining capitalization.             This news will necessarily create significant concern throughout the construction/surety industry as surety bonds are not themselves typically re-insured against company failure. Owners whose Contractors or Subcontractors are currently bonded with First Sealord should contact them as soon as possible to arrange for substitute bonding on any ongoing projects. Contractors, Subcontractors and Materialman...

You get an email from your lawyer to the tune of “a final judgment was entered,” to which you likely respond, great!!! So where is my money?!?! Followed by, “Got any copy of checks”? Obtaining an order of final judgment against a customer in default only entitles you to enforce the judgment; it does not per say “give” you any money. While there are many collection methods, the typical vehicle of collection for Suppliers and Materialman are Writs of Garnishment. Florida Statutes § 77.01 provides that “every person or entity who has sued to recover a debt or has recovered judgment in any court against any person or entity has a right to a writ of garnishment . . .” The writ can generally be issued against 3rd parties who have a monetary obligation to the defendant, typically a bank. In essence the writ of garnishment acts as a lien. Once the “lien” has attached to the debtors property (in this case a bank account), the property or money in that account is frozen until the court or...

Knowing your rights when it comes to dealing with bankrupt customers has become crucial for many business owners in recent times in getting paid for goods and services. Understanding the basics of “reclamation rights” and “critical vendor” status is a good place to start in protecting your business while still moving forward in this economy. RECLAMATION RIGHTS: defined: Reclamation permits a vendor to take back a certain amount of goods that it sold to a customer who is unable to pay, either before or after filing for bankruptcy. Before filing Bankruptcy: If the customer has not yet filed, the vendor shall look to the Uniform Commercial Code (UCC) for the required reclamation guidelines. The UCC allows for a vendor to reclaim goods bought on credit “while insolvent” if the demand is made within 10 days after the customer received the goods, and is limited to only those goods received during the prior 10 days. The written demand must be: • in writing • identify the spec...

• FPL SPONSORED PROGRAM GENERATES LAWSUITS: Five Hialeah homeowners have sued FPL and a local Broward roofing contractor alleging roof failures and leaks following application of reflective paint to their shingled roofs. The paint was applied as part of a FPL painting program aimed at lowering homeowner’s electrical bills. As part of a FPL sponsored program, over 400,000 homeowners allegedly contracted with roofing contractors to fit their roofs with reflective paint. An elastomeric paint, approved for use by FPL, has been blamed for the damage. The particular type of paint at issue in the case has been cited by the Asphalt Roofing Manufacturers Association as problematic. Although never recommended or approved by either the Federal Department of Energy or the Asphalt Roofing Manufactures Association, FPL began reimbursing Florida contractors which had painted residential shingle roofs with the paint. In their December 30, 2010 article titled “FPL sued over roof painting program,”...