Florida Community Association Construction Law Blog : Sarasota Construction Lawyer & Attorney : Tannenbaum Scro Law Firm : Florida, Tampa Bay

We advise owners to insert prevailing party attorney's fee clauses in construction and repair contracts, as it is more likely that you as owner will pursue a claim against the contractor then vice versa. But does the clause that is inserted cover all possible attorney's fees? Maybe not. In a case just decided by the Florida Third District Court of Appeal in Miami, Pardo v. Kaplan, attorney's fees for an appeal, as opposed to the main case, were disallowed because the note being enforced did not specifically provide for appellate attorney's fees in the event of enforcement. The clause in question provided:

Collection: In the event this note shall be in default and placed for collection, then the undersigned agree to pay all reasonable attorney's fees and cost of collection.

The Third District determined that "all reasonable attorney's fees" did not include attorney's fees on appeal.  What should the clause have provided in order for appellate attorney's fees to be awarded?

Collection: In the event this note shall be in default and placed for collection, then the undersigned agree to pay all reasonable attorney's fees, including attorney's fees and costs on appeal, and cost of collection.

Turning to a second quirk, it is not uncommon if as owner you signed the contractor's form contract to confront a clause which provides for attorney's fees to be awarded to the contractor in the event the contractor is required to pursue legal action to collect what is owed under the contract. As an owner's lawyer, we looked kindly upon such clauses because Florida has a reciprocal attorney's fee statute. F.S. 57.105(7) provides that if a contract contains a unilateral attorney's fee provision, the court has authority to award attorney's fees to the other party in the event the other party prevails. Consequently, when pursuing contractors for recovery for defects in the work where such a contract provision was in play, for example, we would typically seek an award of attorney's fees per F.S. 57.105(7).

Unfortunately, last year the Fourth District Court of Appeal in Ft. Lauderdale created "a fly in the ointment" in the case of Florida Hurricane Protection and Awning v. Pastina, 43 So.3d 893 (Fla. 4th DCA en banc 2010). The owner had hired a shutter company to install hurricane shutters. The contractor walked off the job forcing the owner to hire another contractor to complete the work. The contract with the original contractor provided for attorney's fees in the event the contractor pursued a collection action. The owner sought attorney's fees against the contractor per F.S. 57.105(7) citing the unilateral attorney's fee clause in the contract.

The Fourth District unfortunately determined that since the contractor's attorney's fee clause was limited to the collection of money due under the contract, F.S. 57.105(7) did not apply to the owner's breach of contract action. Thus, the owner was left with no recourse for attorney's fees. Lesson to be learned: Be sure to insert a broad prevailing party attorney's fee clause in your contracts.

Disclaimer: The decisions reported are not necessarily the law in other appellate districts in Florida. To determine the law in the Second District Court of Appeal (Tampa Bay and Southwest Florida) on these points, specific research would need to be done on the decisions of the Second District.

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Most owners hire a general contractor for major repair projects based upon the track record of that contractor on similar projects.  But the reality for most general contractors is that performance varies from job to job.  Although there are a variety of possible causes for this variability, perhaps the most significant is the fact that different project superintendents and subcontractor crews show up to undertake one project versus another.  In essence, although your contract is with the "company", the odds of securing peak performance on your job is highly dependent on the particular superintendent and subcontractor crews who are assigned to your job.

In one job our firm was involved in (after the fact), it was disclosed in the course of discovery that the superintendent involved had been hired by the general contractor a week before the job began and was fired at the conclusion of the job.  In the end, the job in question ended up being the "tryout" with the company for this superintendent, a "tryout" that did not fare well, much to the detriment of the owner.

An owner can leave it to the discretion of the general contractor to assign the project superintendent and subcontractors for their job, hoping that the general contractor will assign their best superintendent and subcontractors.  But there is an option.  As part of the bid process, an owner can require that the bidders provide the resumes of the superintendents on their staff, as well as the subcontractors anticipated to be utilized for the job.  In inquiring of references, the owner can ask the references who the assigned superintendent and subcontractors were for their job.  If the owner wants to be even more in depth, it can inquire about who the crew chiefs were for the subcontractors on the other jobs.

Having vetted the available superintendents and subcontractors, it then becomes possible in the negotiation of the general contract to designate a particular project superintendent and particular subcontractors whom the general contractor must utilize for the performance of the work.  A provision could be added to the effect that if the general contractor due to exigencies outside of its control is required to replace that superintendent or certain subcontractors, the general contractor be obligated to find suitable replacements subject to the approval of the owner.  The result - - the owner has greater assurance that the best team the general contractor has to offer shows up to perform their job.

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BE SAFE:   National Lead Poisoning Prevention Week October 23-29, 2011

Since April 22, 2010, federal law requires that all contractors who perform renovation on buildings built prior to 1978 must be certified in lead safe work practices. The law was passed to protect homeowners, their families and the contractors themselves from the potentially toxic lead dust.

In order to obtain certification the contractors must attend a certified training course on the proper practices for safely removing and disposing of lead based paint. Also, before starting a project the contractors are required to provide disclosures on the dangers of lead based paint to the property owners.

Known as the Lead Pre-1978 Renovation Rule, the disclosure is intended to improve consumer and contractor awareness of the need for lead safe work practices. The document developed by the EPA that must be provided is titled "Protect Your Family From Lead In Your Home." The document and a multitude of other information on lead based paints is available by calling 1-800-424-LEAD or log onto www.epa.gov/lead.

The Environmental Protection Agency has the authority to allow states to administer their own program in lieu of the federal regulations however Florida has not been authorized as of yet. This means that Florida residents must look to the federal guidelines for information on pre-1978 renovations.

Although in theory because of the cost of the training and additional protective equipment, renovations may be more expensive, it is important because of the potential of personal injury that property owners only hire certified contractors for these types of renovations. In addition these contractors, if they do not follow the law could also face fines up to $37,500.00 per infraction per day.

To find a list of certified renovation contractors contact the EPA at 1-800-424-LEAD or log onto www.epa.gov/lead.

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Its best with commercial loans to know your lender and foster a strong working relationship so that when challenges arise there is the opportunity to work towards a solution which satisfies both lender and borrower concerns. Unfortunately, with certain big banks, often borrower concerns fall on deaf ears.

Last year our firm handled a case where one of the nation's largest banks declared a default on a loan to a retirement facility which in the eleven years of the loan the facility had never missed a payment on and where the loan to value on the real estate was less than 25%. The facility was forced to re-finance in haste into a loan with inferior terms. Our firm represented the facility in seeking damages from the bank.

Knowing that the loan documents were skewed in the bank's favor (no surprise there) and the big banks had successfully lobbied an exemption from Florida's Unfair and Deceptive Practices Act, we had to come up with a novel theory to confront the bank's actions. Fortunately, under the common law, every contract, including a loan agreement, contains an implied covenant of good faith and fair dealing. This covenant is especially applicable where one side through greater market leverage is able to require a contract containing numerous "gotcha clauses" in its favor.

In the case of this loan to the retirement facility, the bank utilized a "gotcha clause" to declare a default. We convinced the arbitrator that the bank's use of this clause as a justification to call the loan without providing the facility with sufficient opportunity to cure constituted a breach of the bank's covenant of good faith and fair dealing.

Result: The bank had to write a big check to the facility and the individual guarantors, which check included the facility's attorney's fees.

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On July 1, 2011, a new law took effect in regards to persons who provide mold related services.

The law provides a distinction between persons who provide mold assessment services and mold remediation services.

With the intent to protect the safety and welfare of the public the legislature has determined that persons who provide these services must be regulated by the state.

It is now law, with limited exceptions, that a person may not perform a mold assessment or mold remediation unless the person has among other things received substantial training in water, mold and respiratory protection, possess good moral character and pay a fee.

Because of the potential for a conflict of interest between these two types of services the law now provides several restrictions on providing these types of services. As an example the law states that persons who provide mold assessment services may not within a period of 12 months perform or offer to perform mold remediation on the same structure. The law further states that mold assessors may not accept or offer compensation to or from a mold remediator for the referral of business.

These restrictions are also provided in the reverse such that a mold remediator may not offer or perform assessment services on a property which they have provided remediation services within the last 12 months.  Further, a mold remediator may not offer or accept compensation or reward from a mold assessor for the referral of business.

As far as advertising, a person providing these services may not use the title "certified, registered, licensed or professional assessor or remediator" without complying with the new restrictions on qualification.

Persons who violate provisions of this law potentially face criminal charges for each violation up to and including a third degree felony.

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Tannenbaum Scro, a law firm with offices in Sarasota and Clearwater, announces that Mark C. Hanewich and Liz Alpert have joined the firm as partners.  The firm will now be known as TANNENBAUM SCRO HANEWICH & ALPERT, Attorneys at Law.

Mark Hanewich practiced as a real estate lawyer in Massachusetts and Rhode Island for 16 years prior to moving to Florida in 2000, where he has since concentrated his practice in the areas of residential and commercial real estate, lending and corporate law.  He is a member of the Florida, Massachusetts and Rhode Island Bars.  

Liz Alpert concentrates her practice in the areas of marital and family law. She sits on the Human Relations Board of the City of Sarasota. Before moving to Sarasota, she was a long-time resident of Tampa, where she ran for the State House of Representatives, as well as the Tampa City Council.

“These practices will be a great complement to the firm’s active construction, commercial, real estate, and personal injury litigation practices,” states firm managing partner and board-certified construction lawyer Alan Tannenbaum.  Adds firm partner Salvatore Scro: “I personally have more than 20 years of experience practicing both real estate and marital and family law.   Much of my time with the firm is also spent handling complex construction, commercial, and personal injury matters, so I look forward to supporting Mark and Liz as they expand the real estate, lending, corporate, and marital and family law practices of the firm.”

The firm's phone number is 888-883-9441.  The firm's website can be accessed at www.TannenbaumScro.com.

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Multiple class action law suits have been filed in federal court against KABA, one of the world's largest manufacturers of keyless locks mechanisms. KABA's keyless lock mechanisms are used in both residential and commercial applications and have been sold throughout the country, including Florida. The cases have been combined into a multi-district litigation in the United States District Court Northern District of Ohio as Case Number 1:11-md-02220-DCN.

The lawsuit alleges that KABA has manufactured and sold a defective lock that can be opened by placing a certain magnet in front of the lock. The manufacturer has acknowledged the defect but the issue of what to do about the locks that have already have been sold and installed is yet to be resolved.

One of the concerns when litigation of this sort is brought is the potential exposure of the defect to people with a criminal intent. The use of the magnet to open the locks, as expected, has now appeared in videos on the internet.

It has been suggested by the plaintiffs, that owners or associations responsible for buildings which contain KABA keyless lock mechanisms should be made aware of the defects by the manufacturer. However to date, no large scale notification has been sent. The complaint alleges specifically that locks sold under the trade names Unican and Simplex in the 1000, 3000, 5000, 6200, 7000 and 7100 series are defective.

We will continue to monitor and update you on this new construction defect case.

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In 2004, Phillip Coon, the Vice-President of Lending for Coast Bank of Bradenton, and John Miller of American Mortgage Link, a Tampa mortgage brokerage firm, hatched a scheme which they marketed nationwide through 2006 to entice investors to purchase Southwest Florida single-family home flip deals.  Eventually over 600 investors from 40 states signed on to the program.  Coon and Miller recruited small homebuilders, including CCI of St. Petersburg, to provide the lots and build the homes.  Coast Bank was to reap high interest rates on the construction loans and American Mortgage Link earned millions in mortgage brokerage fees and arguably illegal "finder's fees."  The selling points on the deal were no money down (other than the arguably illegal "finder's fees"), no out-of-pocket closing costs and interest payments during the life of the construction loan and the delivery of a home at 90% of appraised value.

Of course, the deal in actuality was far from what was represented.  The builders chosen, primarily CCI, were not capable of delivering homes at the pace the deals were being sold.  Building departments in the counties where the homes were supposed to be built often took six months or more at the height of the boom to even issue building permits.  Closing costs and interest carry eroded the loan in progress balances to the point where there was not enough money left to build the homes.  Coon and Miller knew by 2005 that builders like CCI as a result were losing millions on these contracts.  Jesse Battle of CCI admitted in his bankruptcy proceeding that as of January of 2006 his company was over six million dollars in the red.  Yet, Coon and Miller continued to actively and aggressively market these deals and collect huge fees for their companies well into 2006.  Only a small percentage of homes were completed.  Some were left half-finished.  Most borrowers ended up with bare lots with mortgage balances of $80,000 or more.

The other problem with the deals is that the appraisals were "cooked."  Expert testimony in federal court revealed that rather than the homes being priced at 90% of appraised value, they were actually priced at 110% or more of appraised value.  John Miller had secured the services of an appraiser who is currently in line to lose his license who magically produced appraisals at exactly 10% above contract price on each deal.  Consequently, for the few borrowers to whom homes were actually delivered, what they got was a home that was upside down loan to value from the get go.

Of course, Coon and Miller were not satisfied with the huge fees and interest payments the bank and the brokerage company were receiving on these deals (in Coon's case, he was heavily bonused by the bank for the loan volume generated).  So they decided to bump the mortgage brokerage fee on each new loan by a point and split that point between them.  Overall, 1.5 million dollars was skimmed from the loans by them.  The FBI caught wind of the scam and eventually Miller agreed to wear a wire and implicate Coon.  Despite the fraudulent nature of the overall scheme, the feds in charging Miller and Coon focused solely upon the skimmed point.  More astounding to the borrowers from whose mortgages the point was skimmed was the fact that the feds and Coon and Miller agreed in their plea agreements that Coast Bank and not the borrowers was the victim of the skimming scheme.  This despite the skimmed point having been funded from the construction loans which Coast Bank ended up declaring in default and pursuing the borrowers for.  What was convenient for the government in structuring the plea agreements in this manner is that Coast Bank was defunct and thus the government was in line to keep the full 1.5 million dollars being forfeited as part of the plea deal by Coon and Miller.  What was convenient for Coon and Miller is that by pleading to a crime with only one victim (Coast Bank) they escaped the enhanced sentencing guidelines which would have been in place for a crime with multiple victims (ie: the 600 plus borrowers whose loans they looted).

The borrowers learned of the plea deals through a press conference held by the federal prosecutor in Tampa.  Our firm quickly intervened, eventually on behalf of 150 of the borrowers, to establish the borrowers' status as victims of the skimming scheme and to seek restitution of the point skimmed from each of their construction loans.  The district court denied victim status to the borrowers.  This was appealed to the 11th Circuit Court of Appeals.  The 11th Circuit Court of Appeals in In re Stewart, 552 F.3d 1285 (11th Cir. 2008) reversed the district court and declared the borrowers to be victims of the crime entitled to rights under the federal Crime Victims' Rights Act (CVRA).  The district court in the Coon prosecution then held a trial to determine the borrowers' right to restitution of the point skimmed.  The district court a year ago decided against the borrowers.  This was in turn appealed to the 11th Circuit.  On May 25th, the 11th Circuit issued its ruling affirming the district court finding that the borrowers' gripe was with the builders not the bank and thus they were not entitled to restitution.

What is totally ignored in the new opinion is that Coon and Miller solicited CCI and the other builders (not the borrowers who were scattered across the country), conceived and executed the marketing plan to bring customers to the builders, cooked the appraisals to support loans exceeding the value of the properties and continued to have Coast Bank fund these deals well after it was apparent that CCI and the other builders could never perform.

An appeal to the U.S. Supreme Court is not being considered.  However, the borrowers are exploring the possibility of petitioning the U.S. Attorney General to be awarded a portion of the assets being forfeited to the government as part of the plea deal.

The district judge in the Miller prosecution has stated that he would follow the lead of the 11th Circuit in the Coon matter in determining the course of the borrowers' restitution claims in the Miller prosecution.  As a consequence, the 11th Circuit's decision in the Coon case for all intents and purposes forecloses the borrowers' restitution claims in the Miller prosecution too.

Sentencing of Phil Coon and John Miller will now be set.  The borrowers are entitled to a say at the sentencing hearings.  They intend to argue for the maximum sentences for Coon and Miller.

Contact us if you would like copies of either of the opinions issued by the 11th Circuit.

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A warranty period in the context of condominium and homeowner association construction warranties is the finite period of time that the quality of a particular building component is guaranteed by a developer, general contractor, etc.  A statute of limitations in the context of a warranty claim is the period of time during which a claim on the warranty must be filed in court to preserve the warranty claim.  These time periods are often confused.   Hopefully, this post will help clarify the matter.

Florida Condominium Warranties

 a.  Warranty Expiration

For new condominiums, per Florida Statute 718.203, statutory warranties extend from the developer, contractor, sub-contractors, material suppliers and manufacturers to original and subsequent purchasers for the stated periods of time in the statute.  For conversions, per Florida Statute 718.618, assuming lack of adequate reserve funding, warranties extend solely from the developer to original and subsequent purchasers for the stated period of time in the statute.  Express warranties (warranties created by contract) extend for the period of time stated in the contract. Common law implied warranties  (warranties created by court decision), to the extent they are not disclaimed, extend from the developer to original purchasers for up to ten years.  Most developers effectively disclaim implied warranties in their contracts.  In order for a defect to be covered under a statutory or express warranty, it must be discovered during the warranty period.

b.  Statute of Limitations Expiration

Ordinarily, the statute of limitations for pursuing a warranty claim in court would be four years from date of discovery.  However, Florida Statute 718.124 provides that no cause of action on behalf of a condominium association accrues until transition of the Association to unit owner control (turnover).  Consequently, the statute of limitations for a condominium association pursuing a warranty claim is four years from discovery or four years from transition, whichever is latest, but in no case more than 10 years from issuance of the certificate of occupancy.  Express warranty claims can be pursued only by original purchasers and must be pursued within four years of date of discovery but in no case more than 10 years from the issuance of the certificate of occupancy.  A claim is preserved by filing suit, although placing a party on notice of a claim pursuant to Chapter 558, Florida Statutes has the effect of extending statutes of limitation for a finite period as defined in the statute.  A Chapter 558 notice, however, does not extend the limitations period for a building whose certificate of occupancy issuance is approaching its ten-year anniversary.

Florida Homeowner Association Warranties

a.  Warranty Expiration

There are no statutory warranties applicable to homeowner associations.  There is also no equivalent of Florida Statute 718.124 applicable to homeowner associations.  Thus, only common law and express warranties apply to homeowner associations.   Express warranties extend for the period of time stated in the contract. Common law implied warranties, to the extent they are not disclaimed, extend from the developer to original purchasers for up to ten years from the date of issuance of the certificate of occupancy.  Most developers effectively disclaim implied warranties in their contracts.  In order for a defect to be covered under an express warranty, it must be discovered during the warranty period.

b.  Statute of Limitations Expiration

The statute of limitations for pursuing a warranty claim in court is four years from date of discovery, but in no case more than ten years after the issuance of the certificate of occupancy.  A claim is preserved by filing suit, although placing a party on notice of a claim pursuant to Chapter 558, Florida Statutes has the effect of extending statutes of limitation for a finite period as defined in the statute,   A Chapter 558 notice, however, does not extend the limitations period for a building whose certificate of occupancy issuance is approaching its ten-year anniversary.

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The Florida Supreme Court on April 20th agreed to hear the case of Maronda Homes, Inc. v. Lakeview Reserve Homeowners Association, Inc., an appeal from an October, 2010 decision of the Fifth District Court of Appeal.  In the decision under appeal (48 So.3d 902), the Fifth District determined that Lakeview Reserve could pursue the project developer, Maronda Homes, under an implied warranty theory for defects and deficiencies in the roads, drainage systems, retention ponds and underground piping of the subdivision.  At issue was the interpretation of the Supreme Court's decision in Conklin v. Hurley, 428 So.2d 654 (1983) in which the Supreme Court determined that implied warranties extended only to the construction of a residence and "improvements immediately supporting the residence" such as water wells and septic tanks.  The Fourth District Court of Appeal, in 1985, interpreted Conklin as precluding recovery by a homeowner's association under an implied warranty theory for defects in subdivision roads and drainage improvements.  Port Seawall Harbor and Tennis Club Owners Ass'n., Inc. v. First Federal Savings and Loan Association of Martin County, 463 So.2d 530.

Acknowledging its disagreement with the Fourth District, the Fifth District determined that when the Supreme Court used the phrase "improvements immediately supporting the residence," it did not intend the definition to be literal.  Consequently, the Fifth District developed a  new test for which improvements qualify as "supportive of the residence."  The new test is whether the improvement is providing a service essential to the habitability of the home.  The Fifth District reasoned that when the Supreme Court utilized water wells and septic tanks as examples, it did not intend these "services" to be the sole ones that would qualify.  The conclusion reached by the Fifth District Court on the applicability of implied warranties to the roads, drainage systems, retention ponds and underground piping of the Lakeview Reserve subdivision:  Since the services provided by these improvements are essential to the habitability of the homes, they do "support the residences" and thus carry implied warranties under Conklin.

The Florida Supreme Court will now decide whether the Fourth District (no implied warranties for site improvements)  or the Fifth District (implied warranties for site improvements) is the law in the State of Florida for homeowner's associations.  The other issue to be decided by the Supreme Court is whether the Association itself has standing to pursue the claim or whether a class action on behalf of the homeowners is necessary.  The Fifth District ruled that the Association had standing to bring the action.

Note to owners of new condominiums: statutory warranties under Florida Statute 718.203 extend to the owners from the developer and contractors for site improvements, so the Maronda decision should not affect condominium warranties.

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We are diverting from our usual construction-related topics to inform you of this serious threat to judicial independence in Florida.

On Friday, April 15th, the Florida House of Representatives passed HJR7111, a bill proposing amendments to the Florida constitution revamping the Supreme Court, giving the Legislature the authority to establish the rules of court and altering the judicial nomination process.  The bill is a transparent attempt by the Florida House of Representatives to rob the judiciary of its independence.

There is much wrong with this legislation.  Perhaps the worst element is the proposal to add three justices to the Supreme Court, split the court into two panels: one panel hearing only criminal cases and the other hearing only civil cases, and then assign the four most experienced justices to the criminal panel.  By no coincidence, the four senior judges led the majority on the panel which last year invalidated three proposed constitutional amendments proposed by the Legislature.  With judicial appointment being altered in the bill to provide the Governor with unbridled discretion to choose whomever he wishes to fill the new positions and to name the Chief Justice,  the adoption of the amendments will guarantee one party's control of all three branches of government.  This is a dangerous incursion into the separation of powers, a bedrock of our democracy.

For any of you who may be of the mind that this is "politics as usual" in the arena of court structuring and judicial appointments, understand that what this bill proposes is unprecedented not only in Florida, but nationally.  Every local and state bar association, and there are many from conservative districts, has come out against this legislation.  So have a number of former Florida Supreme Court justices, conservative and liberal.  Go to the Citizens for Fair and Impartial Courts website at www.fairandimpartial.com for their comments and several editorials on the issue.

Fortunately, one of our system's checks and balances is that in order to become law, the bill or something close to it must also clear the State Senate.  A companion bill has been introduced in the Senate, although it is unclear as to whether it is gaining traction.  If you are concerned about this threat to judicial independence, please contact your local State Senator and urge them to stop this dangerous legislation in its tracks.

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In 2009, as a response to severe droughts in the state, the Florida Legislature passed Senate Bill
2080. The Bill is now codified in Florida Statutes 720.3075(4).

The new law states that homeowner association documents "may not prohibit or be enforced so
as to prohibit any property owner from implementing Florida-friendly landscaping …"
Florida-friendly landscaping is defined in Florida Statute 373.185 as "quality landscapes that
conserve water, protect the environment, are adaptable to local conditions, and are drought
tolerant."

Further, the statute lays out the nine principles of Florida-friendly landscaping. The nine
principles are:

1. planting the right plant in the right place;
2. efficient watering;
3. appropriate fertilization;
4. mulching;
5. attraction of wildlife;
6. responsible management of yard pests;
7. recycling yard waste;
8. reduction of storm water runoff;
9. waterfront protection.

This law has a profound effect on the enforcement of homeowner association covenants, articles
and by-laws. The plain meaning of the statute is that restrictions which predate the law may now
be unenforceable.

In response to this new legislation, the Florida Extension Service has created numerous
publications written specifically for homeowner associations. The publications detail the law and
its implications. Visit http://fyn.ifas.ufl.edu/community_association_kit.htm

The publications include:

Florida-Friendly Landscaping Model Covenants, Conditions and Restrictions for New and Existing Community Associations.  fyn.ifas.ufl.edu/professionals/services.htm

A list of considerations for Florida-Friendly Landscaping™ guidelines for architectural review boards.  fyn.ifas.ufl.edu/materials/ARB_FFL_consideration_guidelines03_23_2011.pdf

Handbook—provides the basics of Florida-Friendly Landscaping™ with a summary of the nine principles; checklist for homeowner recognition of a Florida-Friendly Landscape.  fyn.ifas.ufl.edu/homeowners/publications.htm

The Florida-Friendly Landscaping™ Guide to Plant Selection and Landscape Design.  fyn.ifas.ufl.edu/pdf/FYN_Plant_Selection_Guide_v090110.pdf

Guidelines: What To Look For In A Landscape Maintenance Contract.  sarasota.extension.ufl.edu/fyn/Pubs/FYNCommunityGuidelines-Broc.pdf

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In Florida, under the "economic loss rule", a party is precluded from suing a party with whom it has contracted for negligence absent personal injury or property damage.  One exception carved out by the Florida Supreme Court has been for the negligence of "professionals", although the court did not specifically define what a "professional" is.  In the construction context, there has been no doubt that architects and engineers are "professionals."  Claims against them are not subject to the economic loss rule.  But what about land surveyors?

The issue of whether land surveyors are "professionals" excluded from the economic loss rule was decided by the Florida Fourth District Court of Appeal in Estate of Joanne Rocks v. McLaughlin Engineering Company, 49 So. 2d 823 (Fla. 4th DCA 2010).   They are.  In deciding this, the appellate court cited state statutes referring to land surveyors as professionals and relied in addition on the following attributes:

1.    surveyors are engaged by clients to perform a skilled service solely under their control and competence;

2.    the service performed by a surveyor is one requiring special education, training, experience and skill;

3.    the typical client is not competent to perform surveying personally nor direct that it be performed in a particular way; and

4.    the client/surveyor contract gives the client no power of direction and leaves performance up to the skill and expertise of the surveyor.
 

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Florida Statute 489.128 provides that contracts entered into by an unlicensed contractor are not enforceable by the unlicensed contractor. Importantly, this statute was amended in 2009 to clarify that the term "unlicensed" means the failure to secure a state license (as opposed to a local license). Florida Statute 489.532(1)(a) further clarifies that if a state license is not required for a scope of work to be performed under a contract, the individual performing the work is not considered unlicensed.

Three recent appellate decisions addressed the application of F.S. 489.128.

In MGM Construction Services Coro. v. Travelers, 36 Fla. L. Weekly D462a, (3d DCA 2011), the trial court denied relief to a stucco sub-contractor who liened a project for non-payment. The trial court dismissed the sub-contractor's suit on the basis that the sub-contractor could not enforce its contract with the general contractor because it did not possess a specialty contractor's license as required by county ordinance. The appellate court ruled that F.S. 489.128 did not render the contract unenforceable because there was no state licensing requirement for stucco sub-contractors. The appellate court then looked at whether the trial court could nonetheless deny contract enforcement because of the lack of the county license. The county ordinance in question did not render contracts unenforceable if licensing was not secured. Despite this, the appellate court determined that the trial court on remand could still rule the contract unenforceable, but had to weigh public policy concerns against possible inequities in reaching its determination.

In Earth Trade, Inc. v. T & G Corporation, 42 So.3d 929 (Fla. 5th DCA 2010), a site contractor without the required state license performed site work for a parking garage. The work was defective and the general contractor sued the site contractor for breach of contract. The general contractor prevailed at trial. On appeal, the site contractor and its surety contended that the general contractor could not enforce the contract because it knew that the site contractor was unlicensed. The appellate court rejected this argument citing the clear language of F.S. 489.128 rendering a contract by an unlicensed contractor unenforceable only where the unlicensed contractor is attempting to enforce the contract.

Finally, in MMII, Inc. v. Silvester, 42 So.2d 876 (Fla. 4th DCA 2010), the trial court rejected a breach of contract claim by a seller/installer of audio entertainment systems on the basis that the seller/installer did not have a state general contractor nor state electrical sub-contractor license. The appellate court reversed, finding that electrical work was only incidental to the installation of audio entertainment systems and thus the installation of such systems did not require a state license.

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