[RPPTL-constructionlaw] Lien Law Legislative Proposal

Mon Jul 11 10:46:15 PDT 2011

Michael, your concern about the change to 95.11 misses the mark.  

First and most importantly, there is an initial obvious conflict in the statutes in question that needs to be resolved as to when the SOL on a payment bond claim starts to run.  That’s priority.  

Second, there is no need for a one year SOL on claims against bonds that are not required or provided for by statute such as 255.05, 337.18 or 713.23 bonds.  The reasons are as follows:  (1) those statutory bonds are simply that – statutory creatures to be strictly construed as they derogate the common law by providing a statutory claim/basis to get paid for something otherwise protected by contract law; and (2) the statutory bonds are required to be identified and attached to the Notice of Commencement and recorded in the public records placing the beneficiaries of those bonds on “notice” that they exist, hence the short SOL.

A bond issued on behalf of a subcontractor is simply a contract.  It is not provided for or required by any statute and does not need to be recorded.  As such, it should be subject to the standard 5 year SOL applicable to claims on written contracts, especially since those bonds are not recorded nor identified in the NOC.  

Finally, the common law v. statutory bond dichotomy is for the most part extinct.  Additionally, from my experience the argument generally centered on the position that a GC statutory bond was rendered a common law bond because it was not recorded or identified and/or attached to the NOC.  Those are legitimate concerns as they impact the time requirements for serving a Notice to Contractor and/or a Notice of Non-payment as well as the time to file suit.  However, those concerns are not applicable to subcontractor bonds.  And for the most part, the common law bond concerns were cured by different amendments to 255.05 and 713.23 and 713.13.  

In sum, I see no harm in making sure that we are all on the same page as it pertains to when the SOL starts to run on GC bond claims and that those claims against bonds not required by statute be subject to the same SOL applicable to any other contract.

Thank you.  

Daniel R. Vega

Board Certified in Construction Law

Vezina, Lawrence & Piscitelli, P.A.

121 Alhambra Plaza, Suite 1604

Coral Gables, Florida 33134

Main (305) 443-2043

Fax (305) 443-2048

Cell (305) 962-5186

dvega at vlplaw.com

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From: constructionlaw-bounces at lists.flabarrpptl.org [mailto:constructionlaw-bounces at lists.flabarrpptl.org] On Behalf Of Gibbons, Michael
Sent: Monday, July 11, 2011 1:01 PM
To: RPPTL constructionlaw
Subject: Re: [RPPTL-constructionlaw] Lien Law Legislative Proposal

    I could not make the call today but write to express my views on the proposed legislative changes.  The proposed changes to Ch. 85 (dealing with Owner's exposure to personal judgments on claims brought by non-privity claimants) and Ch. 95 (dropping the one year SOL for all bonds) are problematic for following reasons:

    1.  Fla. Stat. s. 85.021---    This unintelligible legislation admittedly cries out to be rewritten.  Issue is making the Owner liable personally to non-privity lienors foreclosing their construction liens.  I realize that there is a 1917 case and a 1969 case that arguably supports holding an Owner personally liable for claims of non-privity lienors.  As construction law is practiced today, however, at least in my universe, the Owner is only personally liable to lienor claimants who enjoy a direct contractual relationship with owner.  So, for example, when a subcontractor lien is bonded off by a GC pursuant to Fla. Stat. s. 713.24, the Owner is no longer a proper party to the action.  Owners should not bear personal liability for construction debts owed to subcontractors.  I believe having an in rem remedy along with a contractual remedy against the contracting party (other than Owner) is adequate for the protection of lower tier subs and suppliers.  I would recommend that the statute be clarified, consistent with practice today, that the Owner not be subject to personal liability when a non-privity lienor is foreclosing its lien.  Owner, under certain circumstances, should continue to be liable to non-privity claimants for unjust enrichment.

    2.  Fla. Stat. s. 95.11 (2) (b) and (e)--   While there is an inconsistency among the SOL's as noted, the prescribed "cure"  will prove far more harmful than the existing shortcoming (which boils down to measuring the one year SOL period from the date of sub's last date of furnishing vs. GC's last date of furnishing).  The proposed change will lead us right back to the bad old days when bond claims were dominated by arguments about whether the bond was a "statutory bond" or a "common law bond".  The provision sought to be deleted at s. 95.11 (2) (e) was actually passed to eliminate all the uncertainty and expense associated with litigating that issue which generated great confusion in the trial courts.   The beauty of the existing language is that it doesn't matter whether the bond is "statutory" or "common law"-- the one year period applies.  Now we are going to replace that clarity with the ambiguous proposed language which introduces the same fog that generated the years of unproductive and wasteful litigation on common law vs. statutory bonds.  If you want to make the SOL's all consistent, it is easy to do without injecting all the uncertainty and ambiguity the proposed legislation offers.  

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: michael.gibbons at lowndes-law.com <mailto: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 Reese J. Henderson, Jr.
Sent: Monday, July 11, 2011 11:24 AM
To: constructionlaw at lists.flabarrpptl.org
Subject: [RPPTL-constructionlaw] Lien Law Legislative Proposal
Importance: High

Folks,

In connection with today’s call, please find attached the legislative committee’s proposal for which we are seeking approval to forward to the Executive Council for further action and, hopefully, submission during the 2012 legislative session.  Attached are:

1.       Legislative Position Request Form

2.       Proposal

3.       White Paper

The long and short is that we are seeking to clarify certain provisions of the lien law to eliminate contradictory references, clarify the statute of limitations on actions on payment bonds, tweak the statutory claim of lien form; tweak the statutory notice of commencement form and clean up the section dealing with electronic proof of delivery.  I will be on the call to answer any questions.

Thanks,

Reese

Reese J. Henderson, Jr.

Board Certified Construction Attorney 

707 Peninsular Place
Jacksonville, Florida 32204

Phone (904) 354-5200
Facsimile (904) 354-5256
Reese.Henderson at atritt.com <mailto:%5Be-mail%5D> 
www.tritthenderson.com <http://www.tritthenderson.com/> 

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[v4.30]

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