[RPPTL-constructionlaw] Setoff

Wed Aug 17 10:28:27 PDT 2011

Hey George, hope all is well.  I have researched the issue in the past and
came to the conclusion that, absent a contractual cross-default provision, a
GC cannot withhold payment which is admittedly due to a sub on project A, as
a result of damages or "backcharges" under contract B on an entirely
separate project.  I will see if I can dig up those cases for you.

Steven F. Thompson, Esq.
Thompson & Brooks
412 E. Madison St., Ste 900
Tampa, Fl. 33602
813-387-1821
Fax 813-387-1824

THE ABOVE MAY CONTAIN OR CONSTITUTE A  CONFIDENTIAL 
AND PRIVILEGED COMMUNICATION. IF YOU ARE NOT THE INTENDED 
RECIPIENT, OR IF YOU HAVE OTHERWISE RECEIVED THIS COMMUNICATION 
IN ERROR, PLEASE NOTIFY THE OFFICE OF THOMPSON & BROOKS BY TELEPHONE 
AT (813) 387-1821 [collect] AND INFORM THE OFFICE OF THE ERROR; 
AND PLEASE DESTROY OR DELETE THIS MESSAGE. THIS MESSAGE MAY NOT 
BE REVIEWED, PRINTED, DISPLAYED, OR RE-TRANSMITTED WITHOUT THE 
SENDER'S CONSENT. ALL RIGHTS PROTECTED. THERE MAY BE NO FURTHER 
DISTRIBUTION OR PUBLICATION OF THIS COMMUNICATION OR ITS CONTENTS 
WITHOUT THE EXPRESS CONSENT OF THOMPSON & BROOKS. THANK YOU.

  _____  

From: constructionlaw-bounces at lists.flabarrpptl.org
[mailto:constructionlaw-bounces at lists.flabarrpptl.org] On Behalf Of Gibbons,
Michael
Sent: Wednesday, August 17, 2011 1:08 PM
To: RPPTL constructionlaw
Subject: Re: [RPPTL-constructionlaw] Setoff

      Good question George.  I don't have caselaw.  The issue does come up
periodically with Owners contracting with same GC over several projects and
GC's contracting with same subs over several projects.  One practical
constraint on the application of setoff in this context is the ripple
prejudicial effect on othewise "innocent" lower tier subs and suppliers (or
owners on unbonded projects).  

      Assuming GC withholds payment to Sub on project A  due to damages
caused by Sub to GC on project B, any subs or suppliers on project A will
now be prejudiced and likely unpaid even for conforming work.  If such
lienors record liens, now Owner is prejudiced.  If GC pays directly such
subs and suppliers, the value of the setoff may be lost or greatly reduced.

      Also, you should take a look at Fla. Stat. s. 713.345.  A GC receiving
monies for improvements on Project A may be guilty of misappropriation of
construction funds if GC fails to pay out such monies to lienors on Project
A due to damages incurred on Project B especially if there is no contractual
right to withhold the monies.  The statute does allow a GC or other lienor
to withhold monies pursuant to terms of a contract.  It also references
withholding "pursuant to a bona fide dispute regarding the amounts due".
Open question whether claim on unrelated project fits within the "bona fide
dispute" safe harbor.

Michael R. Gibbons  (Bio
<http://lowndes-law.com/our-people/michael-r-gibbons> )
Shareholder
Lowndes, Drosdick, Doster, Kantor & Reed, P.A.
450 South Orange Avenue, 8th Floor
Orlando, FL 32801
Phone: 407-418-6378
Fax: 407-843-4444
email:  <mailto:michael.gibbons at lowndes-law.com>
michael.gibbons at lowndes-law.com
website:  <http://www.lowndes-law.com/> http://www.lowndes-law.com

  _____  

From: constructionlaw-bounces at lists.flabarrpptl.org
[mailto:constructionlaw-bounces at lists.flabarrpptl.org] On Behalf Of George
Dramis
Sent: Wednesday, August 17, 2011 11:36 AM
To: RPPTL constructionlaw
Subject: [RPPTL-constructionlaw] Setoff

Is anyone familiar with a right to offset/setoff monies owed to party A by
party B on one project against damages caused by party A to party B on a
separate project where the contracts do not contain a cross default
provision?

Negative or positive case law is welcome.  Thank you in advance. 

George J. Dramis

Attorney at Law

Florida Bar Board Certified in Construction Law

http://www.floridabar.org/TFB/TFBResources.nsf/Attachments/E9FCC9C6B2384C368
52574FA00690DDC/$FILE/ConstructionLaw.jpg?OpenElement 

MorgannDramis

2364 Fruitville Rd.

Sarasota, Fl. 34237

(941) 953-4555 Office

(941) 953-4533 Facsimile

This transmittal may be a confidential attorney-client communication or may
otherwise be privileged or confidential.  If it is not clear that you are
the intended recipient, you are hereby notified that you have received this
transmittal in error.  In that case, any review, dissemination, distribution
or copying of this transmittal is strictly prohibited.  If you suspect that
you have received this communication in error, please notify us immediately
by telephone (941) 953-4555, or e-mail at  <mailto:gdramis at morgandramis.com>
gdramis at morgandramis.com and  immediately delete this message and all of its
attachments.

Notice of Confidentiality: This e-mail communication and the attachment(s)
hereto, if any, are intended solely for the information and use of the
addressee(s) identified above and may contain information which is legally
privileged from disclosure and/or otherwise confidential. If a recipient of
this e-mail communication is not an addressee (or an authorized
representative of an addressee), such recipient is hereby advised that any
review, disclosure, reproduction, re-transmission or other dissemination or
use of this e-mail communication (or any information contained herein) is
strictly prohibited. If you are not an addressee and have received this
e-mail communication in error, please advise the sender of that circumstance
either by reply e-mail or by telephone at (800) 356-6818, immediately delete
this e-mail communication from any computer and destroy all physical copies
of same. 

Replies Filtered: Any incoming reply to this e-mail communication or other
e-mail communication to us will be electronically filtered for "spam" and/or
"viruses." That filtering process may result in such reply or other e-mail
communications to us being quarantined (i.e., potentially not received at
our site at all) and/or delayed in reaching us. For that reason, we cannot
guarantee that we will receive your reply or other e-mail communications to
us and/or that we will receive the same in a timely manner. Accordingly, you
should consider sending communications to us which are particularly
important or time-sensitive by means other than e-mail. 

Notice Under U.S. Treasury Department Circular 230: To the extent that this
e-mail communication and the attachment(s) hereto, if any, may contain
written advice concerning or relating to a Federal (U.S.) tax issue, United
States Treasury Department Regulations (Circular 230) require that we (and
we do hereby) advise and disclose to you that, unless we expressly state
otherwise in writing, such tax advice is not written or intended to be used,
and cannot be used by you (the addressee), or other person(s), for purposes
of (1) avoiding penalties imposed under the United States Internal Revenue
Code or (2) promoting, marketing or recommending to any other person(s) the
(or any of the) transaction(s) or matter(s) addressed, discussed or
referenced herein. Each taxpayer should seek advice from an independent tax
advisor with respect to any Federal tax issue(s), transaction(s) or
matter(s) addressed, discussed or referenced herein based upon his, her or
its particular circumstances. [v4.30] 

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/constructionlaw/attachments/20110817/43a2e03f/attachment.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: LEED_GArgb.jpg
Type: image/jpeg
Size: 16088 bytes
Desc: not available
URL: <http://mailman.fsr.com/pipermail/constructionlaw/attachments/20110817/43a2e03f/LEED_GArgb.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image001.jpg
Type: image/jpeg
Size: 1643 bytes
Desc: not available
URL: <http://mailman.fsr.com/pipermail/constructionlaw/attachments/20110817/43a2e03f/image001.jpg>