[CLC-Discussion] New Statute of Repose Decision in 5th DCA

Mon May 11 07:43:02 PDT 2015

Cypress v. Bergeron, 5D13-4102 (May 8, 2015).

The 5th DCA has created an unnecessary rule for when a construction contract
is complete. They have created what can only be called a bright-line rule.
The contract between an Owner and a Contractor is complete upon payment to
the Contractor.

A bright line rule should work all the time and be equitable to both parties
if, as the court said, the statute language is unambiguous. 

"[A] bright-line test will ordinarily require only a cursory review of the
record by a trial court." [A] bright-line rule [is] appealing in that it
establishes a rule that is easy to apply and relieves the trial court and
litigants of the burden of determining and guessing as to whether an
activity is merely passive or active." Chemrock Corp. v. Tampa Elec. Co., 71
So. 3d 786, 791-92 (Fla. 2011).

By holding that the date of final payment to the contractor signifies the
contract completion the Court add ambiguity to the mix. Further, this ruling
ignores three things in my mind:

1)       Reality - the facts on the ground. For example: In this case, had
the Owner and/or the A/E accepted the buildings and were they being used and
occupied by the Owner? At the time of submitting the final pay application
did anyone disagree that the work was done? 

a.      Was the 3 day lag for payment simply a "passive" ministerial act
whose timing was dependent upon the postal service? 

b.      The pay app was delivered on Wednesday and "final payment" was made
on Friday. So, was the check written on Friday? Was it "deposited" or was it
"settled" on Friday at the bank? Was it "mailed" on Friday? Was it "signed"
on Friday? Or was it handed to the contractor on Friday? 

If the Court is creating a bright-line rule about when a construction
contract is complete ("Completion of the contract means completion of
performance by both sides of the contract") then we need more direction than
"payment was made." 

The thing is, the trial court can hold an evidentiary hearing. The DCA
should have punted and said that the date of completion of the contract is
fact dependent.  

2)      The Fudge Factor - Owners now get to determine the contract
completion date (and this is just as unfair as allowing the GC to determine
it by sending the final pay app early). Would the Court have ruled
differently if the Owner took 90 days to pay? If they would have ruled
differently, then this is a bad bright-line rule. 

3)      Slow Pay Incentive - Any reason for an Owner to pay quickly  given
this ruling? Will this ruling delay final payments in some regards? 

Does the Court's ruling work if, say, the Owner and GC are at odds at the
end of the contract? 

Let's try an everyday construction law example:

GC says they are done and sends final pay app and everything else required
by statute and the contract.

Owner says GC is not done and withholds payment claiming some sticking point
(how many times does that happen?). 

For the next six months both sides argue about something. (I had one where
it was door numbers in the wrong typeface).

After six months they all realize the lawyers are costing too much money and
they just drop the matter.

No written settlement, no promises, no extra performance by either side;
they just decide to stop fighting.

The Owner sends the final payment. Is the contract complete now? Or was it
complete six months earlier?

Does the 5th DCA's bright-line rule accomplish justice if, later on in a
repose fight, the Owner gets to claim an extra 6 months?

Jeffrey L. Price, Esq.
Florida Bar Board Certified - Construction Law      
Florida Civil-law Notary

Niesen|Price|Worthy|Campo, PA
5216 SW 91st Drive  Gainesville, FL 32608
Ph (352) 373-9031   Fax (352) 373-9099

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From: clc-discussion-bounces at lists.flabarrpptl.org
[mailto:clc-discussion-bounces at lists.flabarrpptl.org] On Behalf Of Roberts,
Hardy L.
Sent: Friday, May 08, 2015 2:14 PM
To: CLC Discussion (clc-discussion at lists.flabarrpptl.org)
Subject: [CLC-Discussion] CLC -- New Statute of Repose Decision

The Fifth District held today (in the attached opinion that is not yet
final) that the statute of repose commenced to run when a construction
contract was completed rather than when construction was completed. The
parties argued over whether the statute of repose began to run from the date
the contractor made its final application for payment or whether the period
ran from the date the final payment was made. The Fifth DCA held that the
contract at issue was complete when the final payment was made and that the
statute began to run on that later date.

Carlton Fields Jorden Burt, P.A.
Hardy L. Roberts
Attorney at Law
Board Certified in Construction Law by the Florida Bar

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