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Multifamily Construction Defect Claims (Part 1)

July 14, 2015

Construction Defects, Contracts, Dispute Resolution, Litigation

In this 2 part blog post I wanted to touch on some basics of the typical “multifamily” construction defect case. Whether the project is a condominium, apartment, assisted living facility or hotel they share many of the same issues. There are six primary considerations in bringing these claims but each of those has many subparts which depend on specific facts of the project. The first consideration is who is the true owner and is that entity able to recover for the defective construction. Is there a condominium association or building owner? Maybe it is the hotel or facility operator that is the aggrieved party or is the developer of the building? Knowing who has the rights to make the defect claims is a critical first step. The second consideration is to determine against whom any claims may be asserted. Is there a claim against the developer of real property who designed, built...

Construction Defects, Contracts, litigation, multifamily construction

2015 Chapter 558 Legislative changes

July 8, 2015

Sanjay Kurian

Construction Defects, Legislation

As previously noted, House Bill 87 modified some of the requirements of Chapter 558, Florida Statutes. The statute was recently signed by Governor Rick Scott and the changes will take effect Oct. 1. The original intent of Chapter 558, enacted in 2003, was to require compliance with a mandatory pre-suit process before claims for construction defects could be brought in court. Originally the claims subject to Chapter 558 were limited to residential defect claims but now include all residential and commercial project claims for defects. All public projects are also included except for projects involving the Florida Department of Transportation. In my experience the pre-suit process does not resolve many claims and add barriers and costs to owners and end-users. A cynic might believe that the statute is working as intended. Chapter 558 requires written notice from the claimant to the construction or design professionals believed to be responsible for defects or...

Chapter 558, Construction Defects, Legislation

Insurance Considerations post-Baltimore

May 27, 2015

Sanjay Kurian

Article, Disaster Preparation and Recovery, Insurance, Litigation

Let me start with the caveat that I am not getting into the political or race issues at the heart of recent events in Baltimore. However, from the point-of-view of someone working in construction and insurance law, the insurance and rebuilding questions created by the protests/riots in these cities is of great interest. Although the specific article here references insurance issues and struggles to rebuild in Maryland, similar concerns and analyses would apply anywhere that such events take place. As the article from Insurance Business America notes, many small businesses have been unable to reopen post damage as they are caught in a web of what is and is not covered under their applicable policies. Many questions loom: does the property insurance policy afford coverage; what about the Business Interruption policy; what are the applicable deductibles? As is typical of any insurance coverage the devil is in the details of the specific...

claims, coverage, deductible, disaster recovery, Insurance

Citizens Property Insurance Not Liable for First Party Bad Faith Claims

May 15, 2015

Sanjay Kurian

Cases, Disaster Preparation and Recovery, Hurricane, Insurance, Litigation

Thursday, the Florida Supreme Court issued its opinion in Citizens Property Insurance Corp., v. Perdido Sun Condominium Association, Inc., considering the issue as to whether Citizens Property Insurance could be liable for First Party Bad Faith Claims. The Supreme Court determined that Citizens was not liable for such claims and that no exception for such claims existed from Citizens statutory immunity. This places Citizens in a different position, in regard to insureds, than other insurance carriers who may be offering similar property policies. The issue in was whether the Legislature intended CitizensProperty Insurance Corporation, a state-created entity that provides property insurance, to be liable for statutory first-party bad faith claims as an exception to its statutory immunity from suit. The issue had come before the Supreme Court from the First District's decision in Perdido Sun Condominium Ass’n v. Citizens Property Insurance Corp., 129 So. 3d 1210 (Fla. 1st DCA 2014), which...

bad faith claims, Cases, citizens insurance, hurricane, Insurance

Preparing for the 2015 Hurricane Season

May 13, 2015

Sanjay Kurian

Disaster Preparation and Recovery, Hurricane, Insurance, News

The Atlantic hurricane season is defined as running from June 1 through November 30. No one bothered to tell that to Tropical Storm Ana which hit South Carolina over the weekend. The Ana had sustained winds of 45 mph at landfall and brought anywhere between 2"-6" of rain depending on location. The early start of the hurricane season does not mean that we will necessarily have more hurricanes or what the severity of those hurricanes will be. However, it is always good to be prepared and plan ahead. The next few weeks will be important to finalize, or even start, our personal and business hurricane preparedness plans. Even if you do not have one yet there is still time to prepare. Below is a 12-point Hurricane Preparedness Checklist for condominium and homeowner associations to prepare for the 2015 hurricane season: 1. Disaster Plan – If you have a disaster plan be ready...

Disaster Preparation and Recovery, disaster preparedness, emergency, hurricane, tropical storm ana

New Case: Cypress Fairway v. Bergeron Construction (Statute of Repose)

May 11, 2015

Sanjay Kurian

Cases, Construction Defects, Litigation

Interesting opinion issued last week by the Florida's Fifth District Court of Appeal on the statute of repose. The opinion can be found here. It is not yet final. The Cypress Fairway Condominium was a conversion condominium. The suit was brought by the Association "individually" and also as assignee of claims by the general contractor. Suit was filed against parties involved in the original construction and also the conversion. Suit was filed on February 2, 2011. There is no reference to when the certificate of occupancy was issued. Rather, the last non-settling defendant argued that the statute of repose period began when application for final payment was made on January 31, 2001, which was they argued was the completion date of construction. The Association argued that the repose period did not begin until February 2, 2001, when final payment was actually made. The trial court granted summary judgment to the defendant on...

Cases, Construction Defects, statute of limitations, statute of repose

2015 Florida Construction Legislation Update

April 29, 2015

Sanjay Kurian

Construction Defects, Legislation, Litigation, Public Construction

The regular Florida legislative session is almost concluded. The House adjourned on Tuesday and the Senate is in session until Friday. A special session to address the state budget is expected but not yet set. I previously addressed two construction related bills being considered this year: HB 87/SB418 related to construction defects, as noted here, and HB 501/SB 1158 related to shortening the statute of repose from 10 years to 7 years, as noted here. The Chapter 558 bill, HB 87, was amended to address many of the concerns raised in my prior blog post. The amended bill passed the House on a vote of 112 to 0. The House bill was substituted for the “companion” Senate bill, SB 418, and passed 35-4. The bill will be sent to the Governor for his consideration. The Governor will have 7 days to veto, sign or allow the bill to become law without...

Chapter 558, condominium, construction defect, HOA, Legislation, limitations, litigation, Public Construction, repose, statute of limitations, statute of repose

HB 501 Passes Civil Justice Subcommittee

February 17, 2015

Sanjay Kurian

Construction Defects, Legislation, Litigation, Public Construction

HB 501 to reduce the statute of repose in construction cases was heard by the House Civil Justice subcommittee. There was an amendment to the bill to allow any claims that are currently over 7 years, but less than 10 years, to have until July 1, 2016, to file suit. This “savings clause” is similar to the one used in 2006 when the statute of repose was then reduced from 15 years to 10 years. The bill passed the subcommittee on a vote by 8-6. For those interested in watching the hearing you can do so here beginning at the 7:18 mark. Special recognition to Ronald Woods, P.E. of Woods Engineering and Tom Miller, P.E. of Structural Engineering and Inspections, Inc. for appearing and speaking out against the bill....

condominium, Legislation, limitations, repose, statute of limitations, statute of repose

Proposed Legislation Will Hurt Owners by Shortening Timeframe to Bring Claims

February 16, 2015

Sanjay Kurian

Building Codes, Construction Defects, Legislation, Litigation, News

In addition to the proposed legislation to substantially change Chapter 558, link here, the Legislature is considering other legislation that will materially impact owners and taxpayers. HB501 proposes to reduce the time owners have to pursue construction defect claims from 10 after completion to 7 years after completion. Specifically, the proposed legislation reduces the time frame within which a claim can be brought for latent defects (a defect you did not know about or had no reason to know about) in the design, planning or construction of improvements to real property from the current 10 years to 7 years. This reduction of time to pursue claims apply to claims where the building code was violated. Why should Florida provide less protection to owners when historically, and now again, the biggest building booms have been occurring in Florida. Even the AIA Form Agreements, not always owner friendly, provide for a 10 year...

condominium, HOA, Legislation, limitations, litigation, Public Construction, repose, statute of limitations, statute of repose

Proposed Legislation to change Chapter 558

February 4, 2015

Sanjay Kurian

Construction Defects, Legislation, Litigation, Public Construction

The Legislature will be considering legislation this year to change Chapter 558, Florida Statutes. Chapter 558 is required process for any party seeking to pursue claims for construction defects. The original goal of Chapter 558 was to provide an opportunity to settle defect claims without litigation or arbitration, and not to create another source of dispute or litigation. This bill is contrary to that original intent. The proposed bill would create new rights and defeats any realistic hope to amicably resolve claims as more fully explained below. These changes, if enacted, will negatively impact all owners of construction improvements including hospitals, doctor's offices, school buildings, condominiums, single family homes and commercial buildings. The proposed legislation can be found here and the specific problems are noted below. Lines 66-76: Requiring the notice to specify the location of each alleged defect is impossible relative to any structure of any size. To require a claimant...

Chapter 558, construction defect, Legislation, litigation