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<DIV dir=ltr align=left><SPAN class=579535116-17082011><FONT color=#0000ff
size=2 face=Arial> 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). </FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=579535116-17082011><FONT color=#0000ff
size=2 face=Arial></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=579535116-17082011><FONT color=#0000ff
size=2 face=Arial> 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.</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=579535116-17082011><FONT color=#0000ff
size=2 face=Arial></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=579535116-17082011><FONT color=#0000ff
size=2 face=Arial> 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.</FONT></SPAN></DIV>
<DIV> </DIV><!-- Converted from text/rtf format -->
<P align=left><SPAN lang=en-us><B>Michael R. Gibbons (<A
href="http://lowndes-law.com/our-people/michael-r-gibbons">Bio</A>)<BR>Shareholder<BR></B></SPAN><SPAN
lang=en-us><FONT color=#008000 size=2>Lowndes, Drosdick, Doster, Kantor &
Reed, P.A.<BR></FONT></SPAN><SPAN lang=en-us><FONT color=#008000 size=2>450
South Orange Avenue, 8th Floor<BR></FONT></SPAN><SPAN lang=en-us><FONT
color=#008000 size=2>Orlando, FL 32801<BR></FONT></SPAN><SPAN lang=en-us><FONT
color=#008000 size=2>Phone: 407-418-6378<BR></FONT></SPAN><SPAN lang=en-us><FONT
color=#008000 size=2>Fax: 407-843-4444<BR></FONT></SPAN><SPAN lang=en-us><FONT
color=#008000 size=2>email:</FONT> <A
href="mailto:michael.gibbons@lowndes-law.com"><FONT color=#0000ff
size=2>michael.gibbons@lowndes-law.com</FONT></A></SPAN><BR><SPAN
lang=en-us><FONT color=#008000 size=2>website:</FONT> <A
href="http://www.lowndes-law.com/"><FONT color=#0000ff
size=2>http://www.lowndes-law.com</FONT></A></SPAN><BR><BR>
<IMG src="cid:579535116@17082011-25EA"><BR></P>
<DIV> </DIV><BR>
<DIV dir=ltr lang=en-us class=OutlookMessageHeader align=left>
<HR tabIndex=-1>
<FONT size=2 face=Tahoma><B>From:</B>
constructionlaw-bounces@lists.flabarrpptl.org
[mailto:constructionlaw-bounces@lists.flabarrpptl.org] <B>On Behalf Of
</B>George Dramis<BR><B>Sent:</B> Wednesday, August 17, 2011 11:36
AM<BR><B>To:</B> RPPTL constructionlaw<BR><B>Subject:</B>
[RPPTL-constructionlaw] Setoff<BR></FONT><BR></DIV>
<DIV></DIV>
<DIV class=WordSection1>
<P class=MsoNormal><SPAN
style="FONT-FAMILY: 'Arial','sans-serif'; COLOR: #1f497d">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?<o:p></o:p></SPAN></P>
<P class=MsoNormal><SPAN
style="FONT-FAMILY: 'Arial','sans-serif'; COLOR: #1f497d"><o:p> </o:p></SPAN></P>
<P class=MsoNormal><SPAN
style="FONT-FAMILY: 'Arial','sans-serif'; COLOR: #1f497d">Negative or positive
case law is welcome. Thank you in advance. <o:p></o:p></SPAN></P>
<P class=MsoNormal><SPAN
style="FONT-FAMILY: 'Arial','sans-serif'; COLOR: #1f497d"><o:p> </o:p></SPAN></P>
<DIV>
<P class=MsoNormal><B><SPAN
style="FONT-FAMILY: 'Copperplate Gothic Light','sans-serif'; COLOR: #004f8a; FONT-SIZE: 14pt">George
J. Dramis<o:p></o:p></SPAN></B></P>
<P class=MsoNormal><SPAN
style="FONT-FAMILY: 'Copperplate Gothic Light','sans-serif'; COLOR: #004f8a; FONT-SIZE: 11pt">Attorney
at Law<o:p></o:p></SPAN></P>
<P class=MsoNormal><SPAN
style="FONT-FAMILY: 'Copperplate Gothic Light','sans-serif'; COLOR: #004f8a; FONT-SIZE: 11pt">Florida
Bar Board Certified in Construction Law<o:p></o:p></SPAN></P>
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style="COLOR: #1f497d"><IMG id=Picture_x0020_2
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src="cid:579535116@17082011-25F1" width=55 height=70></SPAN><U><SPAN
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</SPAN></U><SPAN
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lang=EN><o:p></o:p></SPAN></P>
<P class=MsoNormal><SPAN
style="FONT-FAMILY: 'Copperplate Gothic Light','sans-serif'; COLOR: #004f8a; FONT-SIZE: 11pt"><o:p> </o:p></SPAN></P>
<P class=MsoNormal><B><SPAN
style="FONT-FAMILY: 'Copperplate Gothic Light','sans-serif'; COLOR: #004f8a; FONT-SIZE: 18pt">Morgan</SPAN></B><B><SPAN
style="FONT-FAMILY: Wingdings; COLOR: #004f8a; FONT-SIZE: 11pt">n</SPAN></B><B><SPAN
style="FONT-FAMILY: 'Copperplate Gothic Light','sans-serif'; COLOR: #004f8a; FONT-SIZE: 18pt">Dramis<o:p></o:p></SPAN></B></P>
<P class=MsoNormal><SPAN
style="FONT-FAMILY: 'Copperplate Gothic Light','sans-serif'; COLOR: #004f8a; FONT-SIZE: 11pt">2364
Fruitville Rd.<o:p></o:p></SPAN></P>
<P class=MsoNormal><SPAN
style="FONT-FAMILY: 'Copperplate Gothic Light','sans-serif'; COLOR: #004f8a; FONT-SIZE: 11pt">Sarasota,
Fl. 34237<o:p></o:p></SPAN></P>
<P class=MsoNormal><SPAN
style="FONT-FAMILY: 'Copperplate Gothic Light','sans-serif'; COLOR: #004f8a; FONT-SIZE: 11pt">(941)
953-4555 Office<o:p></o:p></SPAN></P>
<P class=MsoNormal><SPAN
style="FONT-FAMILY: 'Copperplate Gothic Light','sans-serif'; COLOR: #004f8a; FONT-SIZE: 11pt">(941)
953-4533 Facsimile</SPAN><SPAN
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