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

Mon May 11 10:54:09 PDT 2015

Agreed, if you represent the contractor, but even then I'm not sure you can override the statutory triggers as interpreted by the court decisions.

Sent from my Verizon Wireless 4G LTE smartphone

-------- Original message --------
From: Robert Doan <rdoan at volusia.org>
Date: 05/11/2015 1:48 PM (GMT-05:00)
To: clc-discussion at lists.flabarrpptl.org
Subject: [SPAM] Re: [CLC-Discussion] New Statute of Repose Decision in 5th DCA

And perhaps a new practice point to consider:

In drafting settlement agreements where final payment was delayed for any reason, the parties should attempt to agree to and memorialize an agreed project completion date for the purposes of any future litigation related to latent defects. One less thing to litigate later on.

Robert E. Doan
County Attorney's Office
123 West Indiana Avenue, Ste. 301
DeLand, Florida 32720-4613
Telephone: (386) 736-5950
Fax: (386) 736-5990
Email: rdoan at volusia.org

>>> Fred Dudley <dudley at mylicenselaw.com> 5/11/2015 12:55 PM >>>
I understand, but would be opposed to opening up the SOR for this purpose.

Fred R. Dudley, Partner
Board Certified Construction Lawyer
Dudley, Sellers & Healy, P. L.
SunTrust Financial Center, Suite 301
3522 Thomasville Road
Tallahassee, Florida 32308
Cell: (850) 294-3471
Direct: (850)692-6368
dudley at mylicenselaw.com

From: clc-discussion-bounces at lists.flabarrpptl.org [mailto:clc-discussion-bounces at lists.flabarrpptl.org] On Behalf Of Robert Worman
Sent: Monday, May 11, 2015 12:18 PM
To: Timothy R. Moorhead; Jeff Price; 'Roberts, Hardy L.'; 'CLC Discussion'
Subject: Re: [CLC-Discussion] New Statute of Repose Decision in 5th DCA

So an owner can intentionally delay payment, or, where in good faith disputes final payment by litigation which it loses, and then is rewarded by getting the windfall of an extended SOL under the Statute of Repose?

Does not seem fair.  Maybe we should be considering a legislative fix?

Regards,

Robert B. Worman
Worman & Sheffler, P.A.
2707 West Fairbanks Avenue
Suite 200
Winter Park, FL 32789
407 843-5353
rworman at wormanlaw.com<mailto:rworman at wormanlaw.com>
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From: clc-discussion-bounces at lists.flabarrpptl.org<mailto:clc-discussion-bounces at lists.flabarrpptl.org> [mailto:clc-discussion-bounces at lists.flabarrpptl.org] On Behalf Of Timothy R. Moorhead
Sent: Monday, May 11, 2015 11:30 AM
To: Jeff Price; 'Roberts, Hardy L.'; 'CLC Discussion'
Subject: Re: [CLC-Discussion] New Statute of Repose Decision in 5th DCA

Peers:

Frankly, I think the 5th got it right.  I would be cautious that the question put to the Court was very finite and avoid the urge to over apply the ruling.  The question was, when is a contract complete for the purposes of the Statute of Repose?  The simple answer, in my simple mind at least, is when all performance due thereunder, including payment has occurred.  Here, payment was due after performance and is a clear indication of the Owner's agreement that performance by the Contractor was complete.

The legislature should have said "construction" if that is what they meant.  They said "contract."  We have to assume that they knew and appreciated the difference.

Timothy R. Moorhead, Esq.
[cid:image001.jpg at 01CF533E.817267B0]
Wright, Fulford, Moorhead & Brown, P.A.
505 Maitland Avenue
Suite 1000
Altamonte Springs, FL 32701
(407) 425-0234
(407) 425-0260 (fax)
Board Certified in Construction Law
tmoorhead at wfmblaw.com<mailto:tmoorhead at wfmblaw.com>
www.wfmblaw.com<http://www.wfmblaw.com>

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From: clc-discussion-bounces at lists.flabarrpptl.org<mailto:clc-discussion-bounces at lists.flabarrpptl.org> [mailto:clc-discussion-bounces at lists.flabarrpptl.org] On Behalf Of Jeff Price
Sent: Monday, May 11, 2015 10:43 AM
To: 'Roberts, Hardy L.'; 'CLC Discussion'
Subject: [CLC-Discussion] New Statute of Repose Decision in 5th DCA

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
http://npw-law.com<http://npw-law.com/>

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From: clc-discussion-bounces at lists.flabarrpptl.org<mailto: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<mailto: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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