[RPPTL-constructionlaw] RPPTL: Construction Law Committee -: Surety & Insurance Subcommittee

Mon Aug 8 11:02:51 PDT 2011

Michael -  good observation.  Because all contractors have to indemnify their sureties from any performance bond claims, it would make sense to have the same SOL so that the surety's obligations on the bond is no greater than the contractor's obligation.

Sent from my iPad

On Aug 8, 2011, at 1:54 PM, "Gibbons, Michael" <Michael.Gibbons at lowndes-law.com<mailto:Michael.Gibbons at lowndes-law.com>> wrote:

  If one assumes that Fla. Stat. s. 95.11(2)(b) is the applicable SOL on a claim against a performance bond (as the parties and appellate courts evidently did), then the Federal Insurance decision is understandable.  The puzzler for most, however, is why 95.11(2)(b) was utilized by counsel and the courts for SOL analysis when the more specific 95.11(3)(c) exists and also applies.

  One of the notable illogical results of the Federal Insurance decision is that liability on a performance bond for patent defects actually exceeds liability on the underlying construction contract.  Assuming that the more specific 4 year SOL applies to an action for breach of contract on a construction contract, the SOL on a patent condition or early manifesting latent condition would expire after 4 years while exposure on a performance bond claim would exist for another year.  So,  liability on the bond exceeds liability on the underlying construction contract (which turns centuries of surety law on its head).

Michael R. Gibbons  (Bio<http://lowndes-law.com/our-people/michael-r-gibbons>)
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email: michael.gibbons at lowndes-law.com<mailto:michael.gibbons at lowndes-law.com>
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From: constructionlaw-bounces at lists.flabarrpptl.org<mailto:constructionlaw-bounces at lists.flabarrpptl.org> [mailto:constructionlaw-bounces at lists.flabarrpptl.org] On Behalf Of Ty G. Thompson
Sent: Monday, August 08, 2011 1:09 PM
To: <mailto:constructionlaw at lists.flabarrpptl.org> constructionlaw at lists.flabarrpptl.org<mailto:constructionlaw at lists.flabarrpptl.org>
Subject: [RPPTL-constructionlaw] RPPTL: Construction Law Committee -: Surety & Insurance Subcommittee

Hi everyone,

I was on a conference call and couldn’t get off to give the subcommittee report.  Since I didn’t have anything to report since last meeting, perhaps this will do.  Chris, thank you very much for your presentation and paper!

Ty G. Thompson
Board Certified Construction Attorney | Mills Paskert Divers
100 North Tampa Street, Suite 2010 | Tampa, Florida 33602
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