“Florida Supreme Court Weighs in on CGL Carriers’ Duty to Defend Chapter 558 Claims”

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 New AIA (2017) Documents

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 awindle@slk-law.com.

Resolving Disputes by Expert Determination

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).

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Favorable Ruling for Condo Associations in Second DCA

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.[1]

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”

2016 Continuing Contractor Education Seminar

If you are in the Charlotte, North Carolina area and need to obtain Continuing Contractor Education Credit for Florida, join Shumaker, Loop & Kendrick, LLP on July 19, 2016. The program will provide 4.0 credit hours covering:

  • The ABC’s of Florida Construction Lien Laws
  • Contract Changes, Constructive Changes
  • Differing Site Conditions
  • Chapter 558 & Other Notable Dispute Resolution Provisions

To RSVP contact Elizabeth Barnett at ebarnett@slk-law.com or 704.945.2171.

CHA Construction Law Seminar

Reconstructing Havana

Kevin P. Braig
Kevin P. Braig

During the first week of April, I visited Havana, Cuba, on an educational exchange trip with the Ohio State Bar Association. As we made our way through the city, including restaurants that served first class cuisine, I could not shake the feeling that I was mingling with a sophisticated civilization that was living amongst the ruins left behind by a former civilization.

Havana is a city of proud and resourceful people who welcomed us warmly. There did not appear to be a bone of apathy in the entire city.  Yet, the state of erosion of the physical infrastructure cannot be understated.

In some places, we saw homes being restored to past glory using nothing more than wheelbarrows of cement and shovels and other hand tools. But it was far more common to see blocks of the city where paint is peeling, sections of marble and railing have gone missing, and concrete has eroded to such an extent that one can see the aggregate in the walls of buildings. Continue reading “Reconstructing Havana”

Suppliers Beware: The Florida Construction Lien Law Will Be Strictly Construed

Brian R. Lambert
Brian R. Lambert

As construction lawyers asserting lien claims, we commonly have our opponents recite the maxim “construction lien statutes must be given a strict reading,” leading to an argument that a failure to follow the lien law’s very technical requirements leads to a windfall victory for the other party.  While leading to unmercifully unfair results in many instances, courts give little deference to claimants who have failed to jump through the statutory hoops necessary to perfect their lien claims.

Suppose for a moment that you’re a supplier on a large commercial construction project, supplying drywall materials to the drywall subcontractor. At some point during the project, the drywall subcontractor defaults and the general contractor begins purchasing drywall materials directly from you. Continue reading “Suppliers Beware: The Florida Construction Lien Law Will Be Strictly Construed”