FLORIDA FEDERAL CASES

• Contractor/Employee Injury Exclusion under Commercial General Liability Policy - After a worker suffered serious injury at construction site, insurer brought declaratory action seeking judgment that the injury-to-employees/contractors exclusion precluded coverage under its commercial general liability policy (“CGL”). The insurer moved for summary judgment, arguing that the worker was a “contractor” because he was providing services for the property owner at the time of his injury. The Southern District of Florida sided with the insurer, holding that the worker’s injuries occurred while he was “working for and or providing services” on the project for the property owner, thus bringing the worker within the policy’s definition of “contractor.” Accordingly, the policy afforded no coverage, and the insurer had no duty to defend. Atlantic Cas. Ins. Co. v. Scaltec USA Corp., No. 13-24473-Civ, 2015 WL 1968770, (S.D. Fla. April 30, 2015).

FLORIDA STATE CASES

• Statute of Repose for Construction Disputes – For statute of repose purposes, the “completion … of the contract” occurs when final payment under the contract is made.  In a construction defect suit, the case turned on whether the statute of repose commenced on the date on which final application for payment was made or the date of actual final payment. Applying the plain language of § 95.11(3)(c), Florida Statutes, the Fifth District Court of Appeal held that “completion . . . of the contract” means complete performance by both contracting parties rather than performance by just the contractor. Here, the date of completion was the date final payment was made under the contract. The court therefore reversed the trial court’s dismissal of the plaintiff’s claims. Cypress Fairway Condominium v. Bergeron Const. Co. Inc., No. 5D13-4102, 2015 WL2129473 (Fla. 5th DCA May 8, 2015) (Note: This opinion has not been released for publication in the permanent law reports. Until released, it is subject to revision or withdrawal).
• Sinkhole Litigation; FIGA; Waiver of the Right of Appraisal - On appeal by the Florida Insurance Guaranty Association, Inc. (“FIGA”) of a nonfinal order granting appraisal of the repair of a residence’s sinkhole damages, the Second District Court of Appeal held that the homeowners were not entitled to appraisal because they engaged in litigation activities amounting to a waiver of their right to appraisal. After a dispute arose over the scope and method of repair, the insurer requested a neutral evaluation, but the homeowners filed suit before the evaluation was completed. FIGA stepped in after the insurer became insolvent. FIGA did not deny the homeowners’ claim, but the dispute over the scope and method of repair persisted. The homeowners continued to press for a jury trial and did not seek appraisal until just prior to pretrial. These actions constituted a waiver of the right to appraisal. The Second DCA also certified two questions to the Florida Supreme Court: (1) whether the definition of “covered claim” in section 631.54(3), Florida Statutes, effective May 17, 2011 applies to a sinkhole loss under a policy issued before the new definition’s effective date but where the insurer becomes insolvent after the definition’s effective date; and (2) whether the statutory limitation of FIGA’s obligation to the amount of repairs precludes the insured from obtaining an appraisal award for the amount of loss pursuant to the homeowners’ insurance policy. Florida Ins. Guar. Ass’n, Inc. v. Lustre, No. 2D13-5780, 40 Fla. L. Weekly D968 (Fla. 2d DCA April 24, 2015) (Note: This opinion has not been released for publication in the permanent law reports. Until released, it is subject to revision or withdrawal).
• Construction Lender Liability; Fla. Stat. § 713.3471(2) Derogation of Common Law Equitable Lien – Because Florida Statute § 713.3471(2) immunizes a lender from liability to a contractor or lienor for ceasing disbursement of loan advances when the lender notifies the contractor of same, the statute derogates the common law and therefore precludes equitable lien claims. After a project owner failed to pay a contractor for its work, the contractor sued the owner for breach of contract and the owner’s lender, who foreclosed the project, for unjust enrichment and the foreclosure of an equitable lien. On appeal, the First District Court of Appeal affirmed the trial court’s grant of summary judgment for the lender on both claims. First, the contractor failed to file its equitable lien claim within the one-year statute of limitations provided in § 95.11(5)(b), Florida Statutes, that runs from the last furnishing of labor, services, or materials, which had long since expired when the contractor filed suit. Second, the trial court properly concluded that § 713.3471(2) precluded the contractor’s recovery under its common law equitable lien and unjust enrichment claims. Section 713.3471(2) provides that a lender will not be liable to a contractor for construction work where the lender ceases making advances of construction loan funds prior to full disbursement so long as the lender provides written notice of the contractor. If the lender fails to provide this notice, the lender is liable to contractors and lienors as calculated by the statute, but this statutory claim cannot interfere with foreclosure actions and cannot form the basis of an equitable lien. On a matter of first impression, the court concluded that because § 713.3471(2) changed the common law by imposing a duty to notify and granting immunity to lenders who comply, the legislature had regulated this area of law such that it was “so repugnant to the common law such that the two cannot exist.” Although the record did not indicate that the lender’s predecessor in interest provided the requisite notice, the contractor chose to bring common law claims for equitable lien and unjust enrichment which were repugnant to and displaced by the comprehensive statutory remedy in § 713.3471(2). Therefore, summary judgment in favor of the lender was proper. Jax Utilities Management, Inc. v. Hancock Bank, No. 1D14-664, 40 Fla. L. Weekly D948 (Fla. 1^st DCA April 22, 2015) (Note: This opinion has not been released for publication in the permanent law reports. Until released, it is subject to revision or withdrawal). Carlton Fields Jorden Burt attorneys Matt Conigliaro and Jason Perkins represented the lender in this case.