March 12, 2019

During the first week of March, a bill (SB 1246/HB911) to modify the chapter 558 process by adding nonbinding arbitration was filed in the Florida House.  Proposed Sec. 558.045 would require nonbinding arbitration in any construction defect lawsuit, within 180 days after all “proper parties” are joined:

“(2) In any action involving construction defects, the court
shall require that the parties take part in nonbinding
arbitration. Such arbitration must be conducted in accordance
with chapter 682, except as otherwise provided in this section.
The mandatory arbitration must take place once all proper
parties have been joined in the action, but not later than 180
days after the action is brought.”

It would seem the goal here is an early, neutral “ballpark” assessment of defects and damages, before the parties spend substantial amounts on defense.  The critique is that the defendant is necessarily at a disadvantage on this schedule, as developing a realistic defect and repair cost assessment that quickly, with no discovery, is difficult.  Conversely,  the 180 day arbitration deadline could be susceptible to multiple delays, because experience shows even in good faith and with due diligence, it is common to find, serve and join additional “proper parties” years into a multiparty lawsuit.

Section 3, which might be referred to as the “Own Work Exclusion” Proviso, directs the arbitrator to identify damage components which are the defendant’s “own defective work”, as distinct from damage caused by the work.

“3) If the arbitrator finds in favor of a claimant as to
one or more parties on the construction defect claim, the award
must include a detailed description of the nature of the defect
and of the monetary amount awarded against each separate party,
including the monetary amount of the award attributable to each
of the following:
(a) Repairing or replacing the party’s own defective work.
(b) Repairing or replacing other nondefective property damaged by that party’s defective work.
(c) Other damages being awarded against the party.”

The parties may agree in writing to accept the nonbinding arb award as binding and have it reduced to an enforceable judgment.

For those who do not accept the arb award, subsection 6 purports to require the court to provide a verdict form and final judgment which:

“must include a detailed
description of the nature of the defect and of the monetary
amount awarded against each separate party, including the
monetary amount of the award attributable to each of the
following:
(a) Repairing or replacing the party’s own defective work.
(b) Repairing or replacing other nondefective property
damaged by that party’s defective work.”

Given the Florida Supreme Court’s recent reaffirmation in DeLisle v. Crane Co. that it is prepared to strike down statutes which purport to impose requirements on litigants and courts which it deems procedural, it is hard to see how subsection 6 would survive a challenge on appeal.

Even without the constitutional limitation on legislative regulation of court procedure, one wonders how a nonparty to the arbitration or the lawsuit – such as the insurer — is afforded due process in this determination.  As a matter of strategy,  who at the arbitration, or at the trial, will care to offer evidence as to the repair cost of the defendant’s “own work,” which is likely not to be covered by insurance?  Neither the  plaintiff nor the defendant would benefit from such a ruling.

However, subsection 5 contains language which suggests that any finding concerning what is the defendant’s “own work” is not binding on the defendant or its insurer:

(7) This section does not affect the rights and duties of
insureds and insurance carriers under their policies.

Whether this is intended to mean that the “own work” ruling by the arbitrator is not binding in a coverage dispute between the insured, its judgment creditor and the carrier is not crystal clear.  If that is the intent, it seems unclear why the arbitrator is expressly required to do the work make this finding (except perhaps to assist with a neutral advisory opinion).

Another unanswered question is whether this proposed nonbinding arb process is deemed a “court ordered nonbinding arbitration” under Sec. 44.103, Fla. Stat.  That section awards attorneys’ fees to parties who do not accept the arbitral award, and then fail to do at least 25% “better” than the award at trial.  While the bills state that the arb shall take place under ch. 682, the general arbitration practice statute, the process is nevertheless a “court ordered nonbinding arbitration” which would fit within the mandate of Sec. 44.103.

The amendment has its heart in the right place — containing litigation costs — but there are problems with the path it takes to that goal.

The full bill text is at https://www.myfloridahouse.gov/Sections/Documents/loaddoc.aspx?FileName=_s1246__.DOCX&DocumentType=Bill&BillNumber=1246&Session=2019

HRKM News

02/09/2021

Florida Court Holds HDD Is Not An Abnormally Dangerous Activity; Alleged Damage to Bridge 90 Feet From HDD Bore Held Not Foreseeable As A Matter of Law

A Florida circuit court has rejected a claim by a property owner that HDD is an abnormally dangerous activity, and that the HDD contractor cannot be subjected to strict liability for damage alleged to bridge. In an earlier ruling, the court held th

04/03/2020

Beginning April 1, FFCRA Requires Employers Of 500 Persons Or Less To Provide Paid Medical Leave To Certain Employees Affected By Covid-19 — But Only If The Employee Can’t “Telework”

The Families First Coronavirus Response Act (“FFCRA”) was passed by Congress and signed by the President on March 18, 2020.  (The law in question is technically titled “Emergency Paid Sick Leave Act” see H.R. 6201 §5101.  We’ll call

03/17/2020

Florida Department of Economic Opportunity Is Pushing Out Emergency Bridge Loans to Small Business at 0% Interest For One Year

To assist small businesses to stay open and pay employees during the COVID-19 slowdown, Governor DeSantis has authorized the Florida Department of Economic Opportunity to extend 0% interest emergency bridge loans to small businesses.  The loans ar

01/10/2020

HRKM Wins Directed Verdict in Auto Repair Professional Liability Case

An often overlooked consideration during most initial case evaluations, is the applicability of the Statute of Limitations. A prime purpose of the statute of limitations  is to protect defendants from facing surprise and stale claims which positio

07/24/2019

HRKM Collaborates with ABC Student Chapter

Hill, Rugh, Keller & Main is proud to be a member of the largest commercial construction trade association, Associated Builders and Contractors (ABC), Central Florida Chapter. According to ABC’s website, “the Central Florida Chapter of ABC i

07/08/2019

Statute of Limitations for Roof Defect Claim Runs from Time of Notice of Roof Leak Not Knowledge of the Specific Defect

The Third District Court of Appeal in Covenant Baptist Church, Inc. v. Vasallo Construction, Inc. in an opinion filed on May 22, 2019, held that an owner was barred by the statute of limitations from filing a lawsuit for a defective roof when th

03/12/2019

Proposed amendment to ch. 558 would require nonbinding arbitration and allocation of damages to “own work”

During the first week of March, a bill (SB 1246/HB911) to modify the chapter 558 process by adding nonbinding arbitration was filed in the Florida House.  Proposed Sec. 558.045 would require nonbinding arbitration in any construction defect lawsuit

10/17/2018

The Repose That Wasn’t: Florida Extends The Statute of Repose For Construction Claims By A Year (Or Maybe More)

Folklore in the construction business is that you can safely throw out your records after seven years because the IRS will only chase you for that long.  Effective July 1, 2018, people in the business need to basically double that period, because o

03/01/2018

Protecting Your Business Domain Begins When You Select It

Check out the link below to read HRKM Owner and Partner, Chris Hill’s, Forbes magazine article. https://www.forbes.com/sites/groupthink/2018/02/25/protecting-your-business-domain-begins-when-you-select-it/#3c6da553130e

01/31/2018

Former Congressman Ric Keller’s T.V. Commentary on President Trump’s SOTU Address

Check out Former Congressman Ric Keller’s T.V. commentary on President Trump’s State of the Union Address (see at 1 min.) https://www.fox35orlando.com/politics/310093012-video

06/26/2017

Defending Class Action Lawsuits

Have you been served with a Telephone Consumer Protection Act (“TCPA”) class action? If so, several questions come to mind: What is the TCPA? Why am I being sued? How do I make this TCPA lawsuit go away without destroying my business? By

06/06/2017

Defending Property Owners When Serious Construction Accidents Happen

Has a construction worker been injured while working on your property?  If so, several questions come to mind: Will I be sued? Do I have enough insurance? Could the millions of dollars sought by plaintiffs’ attorneys for alleged wrongful death or

05/17/2017

Is There Still A Right To Setoff Settlement Amounts Paid By A Co-Defendant In A Negligence Case Involving Multiple Defendants

Florida Statute § 768.81, titled “Comparative Fault”, provides a statutory scheme for determining damages in a “negligence action” and apportioning these damages if there are multiple parties involved.  The statute expressly defines a

04/17/2017

Florida’s Open House Party Statute: Don’t Be The “Cool” Parents!

Many of our friends have “kids” who are in the 18-20 year old range.  Whether they are older high school students or younger college students, many of them want to have “a few friends over” to Mom and Dad’s house.  Spring Break, graduati

04/12/2017

Attorney Ric Keller Discusses State Attorney Aramis Ayala’s Decision To Sue Governor Rick Scott

Check out Ric Keller on this morning’s Fox 35 segment as he discusses recent news of State Attorney, Aramis Ayala’s decision to sue Florida Governor, Ric Scott. https://www.fox35orlando.com/good-day/248107537-video

04/03/2017

Issues To Consider If Your Personal Injury Claimant Is A Medicare Beneficiary, And Is Being Treated Under Letters Of Protection

One of the more challenging aspects of successful claims resolution arises in situations where a personal injury claimant receives medical care and treatment pursuant to letters of protection.  A letter of protection (“LOP”), of course, is an a

03/24/2017

Construction Liens: How Do You Prove The Date Of “Final Furnishing?”

Most construction folks in Florida know that to lien a job, the lienor must file its lien within 90 days of ….something.  An unpaid lienor usually starts focusing on this question sometime after its pay application hasn’t been paid for a month

01/26/2017

Chris Hill Receives Golden Gavel Award

HRKM Partner, Chris Hill, was recently awarded Westfield Insurance Company’s Golden Gavel Award! Presented by Jim Schumaker, the Golden Gavel was given to Chris for his outstanding handling of a claim on behalf of Westfield. We want to congratula

12/20/2016

Happy Holidays from Everyone at HRKM

Wishing you and your family happiness this Holiday Season and throughout the coming year from all of us at Hill, Rugh, Keller & Main!

12/05/2016

HRKM Owner, Chris Hill Participates in Charity Golf Scramble

HRKM Owner and Partner, Chris Hill and friends participated in BASE Camp Children’s Cancer Foundation‘s Golf Scramble this past weekend. HRKM was honored to sponsor this organization which supports children and their families going tho

11/20/2016

HRKM Attorneys Attend OCBA Event in Downtown Orlando

HRKM Attorneys, Nick Patrick, Andrew Showen and Scott Reed had the privilege of attending the Orange County Bar Association’s Joint Voluntary Happy Hour in Downtown Orlando last night. Thank you to the OCBA for hosting such a great event!

11/03/2016

Hurricane Matthew Reminded Us What Insureds Can Lose When They Give Assignments of Benefits

Hurricane Matthew has brought out repair contractors offering services to property owners who have suffered damages to their homes, businesses and condominiums.  Already we’ve seen one form of agreement between a repair contractor and a condomini

10/21/2016

Partners & Staff of HRKM Show Support for Breast Cancer Awareness

In recognition of Breast Cancer Awareness Month, partners and staff of Hill, Rugh, Keller & Main, P.L. “pink-out” the office in Orlando. #BreastCancerAwarenessMonth #PinktoberOrlando

09/28/2016

Employee Or Independent Contractor: What You Need To Know

The issue of whether an individual is an employee or an independent contractor for liability purposes is not always clear-cut. To resolve the issue, Florida courts apply a multifactor test, with the most important factor being the “extent of contr

09/12/2016

HRKM Attorney’s Winning Verdict in Asian Antiques Case

Chris Hill recently won a jury trial in a commercial litigation case for a local antiques dealer.  HRKM filed suit on behalf of a family-owned Winter Park company, seeking to collect more than $1 million from purchasers located in Chicago.  Th

08/24/2016

Aerial Photos Provide Inexpensive and Compelling Evidence

HRKM lawyers used aerial photography taken over time in a recent trial to prove that a property had numerous gaps in a fence line which the plaintiff claimed was secure.  In the above photo from property appraiser’s public records, one can se

08/15/2016

HRKM Staff Attends Popular Networking Event in Orlando

Partner, Ric Keller and staff of HRKM had the privilege of attending TCU Construction’s Networking Event at Bar Louie last Thursday. Our staff had an amazing time meeting everyone who participated in this occasion!

08/03/2016

HRKM Lawyers Recover Costs From Plaintiff After Dismissal of Warehouse Fire Case

Chris Hill and Andy Showen secured a judgment of dismissal at the close of plaintiff’s case in a Federal court trial in Orlando in December 2015.  The court taxed defense costs against the plaintiff of over $17,000 in post-trial proceedings, whic

07/19/2016

Can Legal Draftsmanship Fix The Florida Constitution Statute of Repose Problem?

We often hear that Florida has a ten year statute of repose for claims arising out of construction.[1]  Contractors design their risk management plans (such as they are) assuming there is an absolute ten year bar against lawsuits.  But the ten yea

04/07/2016

“What Do You Mean We Have To Go To Pennsylvania To Enforce Our Warranty?”: Roof Replacement, Venue Clauses, Warranty Limitations, And Other Pitfalls In Condominium Repair Contracts

The Life and Death of a Roof: A condominium building with a low-slope roof (commonly but incorrectly referred to as a “flat” roof) will need a reroof every seven to twenty years. This is a major budget item that can cost from $8 to $15 per squar

04/07/2016

Performance Bonds , Indemnity Agreements and Contractor’s Spouses

Building contractors often have to provide performance bonds to owners. Do their spouses understand they are cosigning for those bonds and may lose their homes and personal assets when obtaining the bond? Contractors’ spouses’ risk on bon