Construction Case Law Update - January, 2015

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FLORIDA STATE CASES

  • Slavin Doctrine; Design Contracts - Under the Slavin doctrine, a subcontractor design company was not liable despite negligently designing intersection traffic lights that resulted in a fatal car crash where the Florida Department of Transportation, as the party in control, was aware of the defect, accepted the company’s plans, and put the construction contract out for bid. After the contractor completed the project, Broward County conditionally accepted the project, subject to a “burn-in period” after which FDOT would transfer control to Broward County. The fatal accident occurred during this burn-in period, when FDOT controlled the intersection and was the only entity able to make changes. Following an adverse jury-trial verdict, the plaintiff appealed, arguing that Slavin did not apply because Broward had not accepted the project. The Fourth District Court of Appeal affirmed the jury’s verdict, finding that “acceptance” of the patent defect under the Slavin doctrine applied to FDOT, not Broward, as FDOT alone controlled the site. Therefore, FDOT’s failure as the controlling entity to correct the patent defect proximately caused the injury. McIntosh v. Progressive Design and Engineering, Inc., No. 4D12-2335, 2015 WL 71931 (Fla. 4th DCA Jan. 7, 2015) (Note: This opinion has not been released for publication in the permanent law reports. Until released, it is subject to revision or withdrawal.).
  • Liens; Statutory Community Development Districts – Plaintiff-contractor who filed a breach of contract and lien foreclosure action could not recover unpaid invoices from one defendant-entity where said invoices had been wrongfully paid by another defendant-entity, despite the now-insolvent latter entity owing other unpaid balances to contractor. Furthermore, the former entity was a community development district (“CDD”) created by the Florida Land and Water Adjudicatory Commission, and it was therefore error to permit the contractor to execute its judgment against CDD’s property, as Fla. Stat. 194.044 bars such property from levy and stay by executions. Tern Bay Community Development District v. RyanGolf Corporation, No. 2D13-4436, 2014 WL 7404023 (Fla. 2d DCA Dec. 31, 2014) (Note: This opinion has not been released for publication in the permanent law reports. Until released, it is subject to revision or withdrawal.).

FLORIDA FEDERAL CASES

  • Surety; Bonds; Preliminary Injunctions - Surety that provided bonds to contractor in exchange for indemnity sought to enjoin contractor from transferring and subsequently selling property to 3 Limited Liability Companies the contractor formed after refusing to pay amounts owed to subcontractor, who had sued on the surety’s bonds for unpaid work and corresponding attorney’s fees. Although the surety had yet to secure a judgment against the contractor, the Middle District of Florida permitted the preliminary injunction because the indemnity contracts’ language permitted recovery of existing and anticipated losses; the contractor’s transfer of the properties to the LLCs caused irreparable harm to the surety, who could use such property as collateral; and according to precedent, a surety’s collateral claim is in essence a secured claim.

Travelers Casualty and Surety Company of America v. Design Build Engineers and Contractors, Corp., No. 6:14-cv-1636-Orl-31GJK, 2014 WL 7274803 (M.D. Fla. Dec. 22, 2014).

 

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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