Appellate Court Narrowly Interprets Subcontract’s Venue Selection Provision in Payment Bond Lawsuit Against Surety

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Analysis of Southeastern Concrete Constructors, LLC v. W. Sur. Co., No. 2D20-2475, 2021 WL 2557297, (Fla. 2d DCA June 23, 2021)

One frequent consideration on the minds of those drafting construction contracts is the actual reach of contract provisions that use broad, expansive language, including the often-used phrase “relate to.” Cf. California Div. of Labor Standards Enforcement v. Dillingham Constr., NA, Inc., 519 US 316, 335 (1997) (Scalia concurring) (“…the ‘relate to’ provision according to its terms was a project doomed to failure, since, as many a curbstone philosopher has observed, everything is related to everything else.”). The Second District Court of Appeal recently faced a provision with similar language in narrowly interpreting a subcontractor’s venue selection clause in Southeastern Concrete Constructors, LLC v. Western Surety Co., 2D20-2475 (June 23, 2021). There, a subcontractor brought a payment bond claim against a surety in Hillsborough County, Florida. The surety filed a motion to transfer venue to Levy County, citing the venue selection clause in the subcontract between the subcontractor and general contractor. That clause stated, “[a]ny suit relating to the Subcontract, or the performance of Prime or Subcontractor shall be commenced in the state court of competent jurisdiction in Levy County, Florida, and shall remain there until its conclusion.” The trial court agreed with surety, and ordered that the case be transferred to Levy County. The Second District Court of Appeal reversed the trial court, setting forth multiple reasons, including that: 1) the general contractor was not a party to the lawsuit brought by the subcontractor, 2) the complaint did not bring any counts related to breach of the Subcontract, 3) the venue provision in the Subcontract did not mention either the surety or the surety bond, 4) the payment bond and the subcontract were “separate and distinct”, and 5) the surety agreed to the payment bond without a venue selection clause. Also, in discussing its reasoning, the Court looked to the opinion of Insurance Co. of North America v. Jetstar Dev., 515 So. 2d 272 (Fla. 4th DCA 1987), which applied a venue selection clause in a subcontract to a subcontractor’s suit against a surety. The Court pointed to different facts of Jetstar, including that the subcontractor also brought suit against the contractor, in addition to the surety; moreover, the subcontract at issue contained a more detailed venue selection clause that specifically mentioned the particular parties it applied to, including the surety.

Although the decision is likely limited to the facts of this particular case, authors of construction contracts should be aware of how courts may, in certain circumstances, narrowly interpret such venue selection provisions.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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