Since its enactment in 2003, Chapter 558, Florida Statutes (commonly referred to as Florida’s notice and opportunity to cure provision) has governed the pre-suit notice and opportunity to repair process between owners, designers, contractors, and subcontractors involved in construction defect claims. Although the statute speaks primarily to the obligations of these parties, Commercial General Liability (“CGL”) insurers also play an integral role in the resolution of such claims. While CGL insurers ordinarily monitor, and will sometimes agree to settle 558 claims pre-suit, until recently, Florida law was silent as to whether insurers had an obligation to defend their insureds during the 558 process. In the absence of a legal duty to defend, CGL insurers routinely denied their insured’s requests for defense counsel during the 558 process. However, more recently, the Florida legislature amended Chapter 558 in an effort to, among other things, include CGL insurers in the pre-suit 558 process.
On December 14, 2017, the Florida Supreme Court issued its ruling in Altman Contractors, Inc. v. Crum & Forster Specialty Insurance Company, which considered whether CGL insurers owe a duty to defend pre-suit claims pursuant to Chapter 558.1 Florida law now holds that under the terms of a standard CGL policy, an insurer who consents to its insured’s participation in the 558 process owes a duty to defend to the insured. Continue reading ““Florida Supreme Court Weighs in on CGL Carriers’ Duty to Defend Chapter 558 Claims””→
The American Institute of Architects (“AIA”) revises its standard contract forms every ten (10) years and, in April 2017, released some of the revised documents for 2017. An additional 18 forms will be released later in 2017. Anyone using the AIA documents should be aware of the changes. Once all of the 2017 documents have been released, the 2007 editions can continue to be used for 11 months.
List of Revised Documents – April 2017 Release:
A101-2017, Standard Form of Agreement Between Owner and Contractor where the basis of payment is a Stipulated Sum
A102-2017, Standard Form of Agreement Between Owner and Contractor where the basis of payment is the Cost of the Work Plus a Fee with a Guaranteed Maximum Price
A103-2017, Standard Form of Agreement Between Owner and Contractor where the basis of payment is the Cost of the Work Plus a Fee without a Guaranteed Maximum Price
A104-2017 (formerly A107-2007), Standard Abbreviated Form of Agreement Between Owner and Contractor
A105-2017, Standard Short Form of Agreement Between Owner and Contractor
A201-2017, General Conditions of the Contract for Construction
A401-2017, Standard Form of Agreement Between Contractor and Subcontractor
B101-2017, Standard Form of Agreement Between Owner and Architect
B102-2017, Standard Form of Agreement Between Owner and Architect without a Predefined Scope of Architect’s Services
B103-2017, Standard Form of Agreement Between Owner and Architect for a Complex Project
B104-2017, Standard Abbreviated Form of Agreement Between Owner and Architect
B105-2017, Standard Short Form of Agreement Between Owner and Architect
C401-2017, Standard Form of Agreement Between Architect and Consultant
E204-2017, Sustainable Projects Exhibit
Major Changes to the A201 General Conditions:
In regard to the AIA-A201 (2017), the provisions listed below are only a few of the differences between the 2007 Edition of the AIA A201 General Conditions and the 2017 Edition. A much more in-depth analysis of all of the changes to the A201 (2017) will be provided in the near future.
The most apparent major change in the AIA A201-2017 Edition is the total revision of Article 11 – Insurance. The AIA now addresses the required insurance coverages in a new stand-alone insurance exhibit.
The A201 now includes a new section 1.6 addressing contractually-required notices and how those notices must be delivered. Any notice required by the Contract Documents must be in writing, which includes email except for “claims.” A notice of a “claim” under Article 15 must be sent by certified or registered mail, or by courier providing proof of delivery.
A new section 1.8 was added to address the implementation of electronic protocols and BIM.
A new section 2.2.4 was added to address the owner’s confidential information.
Section 3.10.1 has been modified to require the contractor to provide a more detailed construction schedule.
Section 6.1.1 now provides a formal definition of the owner’s “Separate Contractor(s)” and small changes have been made in other provisions to implement the definition.
Several sections in Article 9 – Application for Payment add clarifications that the owner may request waivers of lien and releases.
A new section 9.6.8 has been added to Article 9, requiring the contractor to indemnify the owner for subcontractor and supplier liens, including a requirement that the contractor must bond off such liens.
In the 2007 edition of the AIA A201 General Conditions, when the owner terminated the contractor for convenience, the former section 14.4.3 required the owner to pay the contractor “reasonable overhead and profit on the Work not executed.” In the 2017 Edition, 14.4.3 states that the owner is to pay the contractor a “termination fee” instead of “reasonable overhead and profit on Work not executed.”
The 2017 Edition of the A201 now allows direct communications between owner and the contractor under section 4.2.4, and reduces the architect’s total authority to make minor changes under section 7.4.
More to follow….
If you have any questions, please contact Steele B. (“Al”) Windle, III at 704.945.2176 or email@example.com.
Increasingly we are seeing insurance policies and construction agreements that call for disputes to be resolved by a technical expert – such as an architect or engineer. This technical expert is charged with the responsibility to review project details and make decisions that will bind the parties. Known as expert determination, the use of technical experts to decide disputes can help streamline the dispute resolution process. But, what happens when one party refuses to follow the expert’s decision or the parties cannot agree on what facts and documents the expert should consider in making a decision? Florida law does not provide clear answers about how courts should treat the decisions of experts. Shumaker attorney Brian Willis takes a detailed look at these issues and more in his article “Resolving Disputes by Expert Determination: What Happens When Parties Select Appraisers, Accountants, or Other Technical Experts to Decide Disputes,” The Florida Bar Journal (Vol. 91, No. 7).
Among the hottest and most relevant blog and article topics is the subject of construction liens. No matter the quantity or ubiquity of such articles, construction liens are and will always be among the most highly discussed topics in the construction industry. This is because of the tremendous extra-contractual power legislators granted those not in direct privity of contract with property owners – the lower-tiered lien claimants. While contractors also possess the same ability to impress upon an owner’s real property a construction lien in the event of non-payment, the strength lower-tiered lienors possess in the event of non-payment is virtually unparalleled when compared to just about every other area of the law. But, in order for lower-tiered lienors to take advantage of such power, they must fully and completely comply with all notice requirements as part of the lien perfection process. The same holds true for contractors, albeit with slightly fewer lien perfection considerations. Continue reading “Construction Liens in Florida – The Timing and Manner of Perfection are Critical”→
Recently, in Ventana Condominium Ass’n, Inc. v. Chancey Design Partnership, Inc., et al., 2016 WL 4259999 (Fla. 2d DCA), the Second District Court of Appeal held that the Plaintiff, Ventana Condominium Association, Inc. (the “Ass’n”), was not the successor in interest to the prior owner of Ventana Condos, Ventana Tampa, LLC (the “Developer”), and reversed the trial court’s grant of summary judgment that had been contingent upon such a relationship between the two.
Sometime prior to July 2008, the Developer of the Ventana Condominiums (the “Condos”) contracted with Hardin Construction Company, LLC (“Hardin”) to build the Condos, and with Chancey Design Partnership, Inc. (“Chancey Design” or “Chancey”) to design them. Issues with delays and additional costs arose, and the Developer and Hardin entered into a Mediated Settlement Agreement (the “MSA”) which provided, among other things that: (i) Hardin was given authority to take action on behalf of the Developer against Chancey Design–although it made no mention of this being an assignment of the Developer’s interest in any such claims; and (ii) that the MSA was binding upon the parties’ successors, assigns, and all those holding title under them. Continue reading “Favorable Ruling for Condo Associations in Second DCA”→
Anyone working in waterfront construction long enough has a story (or knows someone who does) about pulled permits or burdensome local rules and regulations which may turn a waterfront dream renovation into a nightmare. Recently, Florida’s Second District Court of Appeal confirmed that some waterfront construction is just not meant to be. But, the Court’s ruling as to waterfront construction, which seems patently unfair from a practical standpoint, is not the only takeaway from Bair v. City of Clearwater, Case No. 2d15-1210 (Fla. 2d DCA, August 5, 2016). On its surface, Bair is cautionary tale for waterfront property owners regarding the strict statutory interpretation of the Bert J. Harris, Jr., Private Property Rights Protection Act (the “Bert Harris Act”); however, it also contains a postscript for legal practitioners concerning equitable estoppel as a standalone claim.Continue reading “Improving Waterfront Property: Challenges to the Fifty Percent Rule are Strictly Construed”→
Despite the numerous Immigration and Customs Enforcement (ICE) headlines, the last two years have brought a significant decrease in workplace audits: 3.127 audits in 2013 to 435 audits in 2015. Similarly, the fines during this time have dropped from $9.5 million in 2013 to $4.62 million in 2015. To put this in perspective, ICE assessed about $31.2 million in fines as a result of over 9000 worksite inspections between 2009 thru 2012. But it seems that this lull is about to come to an end.
On June 30, 2016, the U.S. Department of Justice (DOJ) published a rule that will result in an increase of anywhere from 35% to 96% in possible penalties for immigration related violations. For example, the minimum penalty for employing individuals not authorized to work in the U.S. will increase from $375 to $539, while the maximum penalty will go up from $3200 to $4313. Employers with multiple violations, which originally resulted in a penalty from $4300 to $16,000, will now be faced with a penalty of $6469 to $21,563. Similarly, the possible fines for Form I-9 paperwork violations nearly doubled. Fines now will be in the range of $216-$2156 per violation rather than $110-$1100 per instance. Continue reading “DOJ Hikes Fines for Immigration Related Violations”→