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Tritt|Henderson
707 Peninsular Place
Jacksonville, Florida 32204
Phone:
(904) 354-5200
Facsimile:
(904) 354-5256
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Pictures from Groundhog Day Extravaganza 2010 
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It is hard to believe that 2010 is now halfway over. We hope that this edition of our quarterly newsletter finds you enjoying some of the summer fun. As is the case with all of our third quarter newsletters, we begin by sharing with you a brief update on the Legislative Session in Tallahassee - in particular the Prompt Payment Act and Senate Bill 1964. We hope that after reading Reese & David's article, you will be better versed in their impact on the industry.
Save the Date...
September 23, 2010 - Construction Contracts Seminar with Reese Henderson & Arnold Tritt
October 14, 2010 - Florida's Construction Lien Law with Arnold Tritt
February 3, 2011 - Tritt|Henderson's 6th Annual Groundhog Day Extravaganza
Please contact Lynsey Merritt at Lynsey.Merritt@atritt.com for more details! |
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2010 Legislative Session Updates
With the close of the 2010 Legislative Session and the subsequent legislative actions taken by Florida Governor Charlie Crist, there are several changes to Florida law that impact the construction industry.
Prompt Payment Act
Florida's Local Government Prompt Payment Act (§§218.70-217.80, Florida Statutes) was amended to clarify some ambiguities in the statute and attempt to streamline the payment process to better protect the rights of contractors. The law now mandates that local government entities specify in the contract what the requirements are for a payment request or proper invoice. If the local government entity fails to make "timely payments under the statute", the contractor may send an overdue notice to the local government entity. If the local government entity does not reject the payment request or invoice within four (4) days after delivery of the overdue notice, then the payment request or invoice is deemed accepted, except for any portion of the payment request or invoice that is fraudulent or misleading.
The new law now requires the local government entity to identify a single point of contact to whom the contractor is to submit payment requests or invoices. The identification shall either be in the contract or in a written notice to the contractor delivered no later than ten (10) days after the date the contract is awarded or the contractor is given notice to proceed.
Local governments are now required to establish in the contract the responsibilities of the parties for developing a single punch list of items to be completed. Likewise, the final contract completion date now shall be at least 30 days from the date the punch list is delivered to the contractor. This provision should protect contractors from being penalized due to an artificially short deadline for completing the punch list.
The changes to the Local Government Prompt Payment Act also include a clarified process for dispute resolution procedures. Finally, the amended law adds teeth to the prevailing party attorney's fee provision. Previously, the contractor could only recover fees as a prevailing party if the local government entity withheld any portion of the payment without a reasonable basis in law or fact to dispute the claim to the amounts owed. As revised, the law now simply provides for courts to award attorney's fees to whomever is the "prevailing party" in an action to recover amounts due under the Local Government Prompt Payment Act.
Gov. Crist Vetoes Senate Bill 1964
With the passage by the legislature of SB 1964, design professionals in Florida appeared to have won a major victory in their attempts to limit their liability for economic losses since the landmark decision of the Florida Supreme Court in Moransais v. Heathman. As passed, SB 1964 would have overturned the Moransais decision and limited the liability of design professionals for economic losses caused by design defects in construction.
Citing concerns over the lack of alternate remedies and shifting losses for design defects to consumers, Gov. Crist vetoed SB 1964. Gov. Crist also noted that other professionals such as accountants, doctors, and lawyers cannot similarly limit their professional duty of care.
This veto is beneficial to both owners and contractors. In the decade since the Moransais, parties have been allocating risk on construction projects with the knowledge that the design professional was liable in tort for the economic losses as a result of his or her professional negligence. Had SB 1964 been enacted into law, the individual design professionals working on a project would likely have little or no liability for negligent design unless they contracted in their individual capacity.
Other Changes
· "Chinese Drywall" - New provision to determine the property value of properties affected by imported or domestic drywall that contain levels of elemental sulfur that results in the corrosion of certain metals.
· Florida Building Code - HB 663 includes numerous amendments to Chapter 553, Florida Statutes.
· Residential Fire Sprinklers- most recent version of the International Residential Code related to mandating fire sprinklers may not be incorporated in the Florida Building Code or a local amendment to the Florida Building Code. Classification of property as rental property does not require owners to install fire sprinklers.
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Navigating Chapter 558 of the Florida Statutes
For years, Florida's construction industry has been subject to a "Notice and Opportunity to Cure" Statute - Chapter 558, Fla. Stat. This article is intended to provide a brief synopsis of Chapter 558's current status and application. As of October 1, 2009, Chapter 558 applies to all contracts regarding substantially-completed projects unless parties opt out. This is a dramatic change from the prior versions of the Statute, which required that contracts for improvement of real property contain certain language in order to bind an owner to Chapter 558. Thus, prior to the October 2009 amendment, parties were not required to comply with Chapter 558 unless proper statutory language was expressly provided for in the written contract. In fact, parties who entered into verbal contracts were required to submit a written supplement with the required Chapter 558 language. Now the rules have changed, and all parties are subject to Chapter 558 unless the parties opt out.
Under the current Statute, any written contract for the improvement of real property entered into between an owner and contractor or between an owner and design professional should contain the following notice: "ANY CLAIMS FOR CONSTRUCTION DEFECTS ARE SUBJECT TO THE NOTICE AND CURE PROVISIONS OF CHAPTER 558, FLORIDA STATUTES." Interestingly, Chapter 558 uses the term "must." However, a party's failure to include the notice in its contract does not subject the contracting owner, contractor, or design professional to any penalty. Instead, the purpose of the notice is to promote awareness of Chapter 558. It is not a penalty. What does this mean for construction professionals? In short, owners are subject to Chapter 558 regardless of whether the above notice is provided in the construction contract. The obligation to participate in the pre-suit investigation process is balanced by the fact that the process tolls the statute of limitations.
Now that you know that Chapter 558 applies, what are the timeframes? The initial step is to determine the size of the project in question. The crucial distinction is whether the project involves an association representing more than 20 parcels. Typically, the claimant (i.e. the owner) must provide written notice of the alleged defect at least 60 days prior to filing an action. If the claim involves an association representing more than 20 parcels, the timeframe is 120 days. The party served with the notice (i.e. the contractor) has 30 days to inspect. If the claim involves an association with greater than 20 parcels, the party has 50 days to inspect. Within 10 days after service of the claimant's notice (30 days in the case of an association representing more than 20 parcels), the contractor may serve a copy of the notice on all subcontractors, suppliers, or design professionals who the contractor believes is responsible for the alleged defects. The parties served with the contractor's notice have 15 days (30 days in the case of an association representing more than 20 parcels) to serve a written response. Ultimately, the contractor has 45 days after service of the claimant's Chapter 558 notice (75 days in the case of an association representing more than 20 parcels) to serve its written response, which must state one of the responses outlined in §558.004(5)(a)-(e), Fla. Stat.
What about the exchange of documents? It is important for construction professionals to understand that there may be an obligation to exchange documents. Parties can request documents as part of the Chapter 558 process and the person served with the notice has an obligation to provide responsive documents. The failure to provide the documents can result in sanctions if litigation ensues. With that said, the request must cite to §558.004(15), Fla. Stat. and must include an offer to pay reasonable copy costs. The scope of discoverable information is outlined in the above-referenced Statute. Expert reports exchanged between the parties may not be used in any subsequent litigation for any purpose, unless the expert, or a person affiliated with the expert, testifies as a witness or the report is used or relied upon by a testifying expert.
In conclusion, as of October 2009, Chapter 558 applies to construction projects that have been substantially completed unless the parties opt out. If you find yourself participating in a Chapter 558 investigation, be sure to read the Statute carefully to ensure that the claimant is following the Statute and that you, as the professional, are complying with your obligations.
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Reese Henderson & Bryan Rendzio Appointed to the Florida Bar's Construction Law Institute
 Reese Henderson was recently appointed Conference Vice-Chair of the Florida Bar's Construction Law Institute and Bryan Rendzio was appointed to the Conference Committee. The Institute is an annual advanced course for Construction Attorneys throughout the state of Florida. Reese and Bryan received these appointments due to their dedication to Construction Law and their involvement in the Florida Bar. We look forward to having all of our attorneys attend the Institute in April of 2011 and seeing the hard work of both Reese and Bryan.
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ACE Mentoring Scholarship Presentation
 On May 21st, the Jacksonville chapter of the ACE Mentoring Program held its Annual Year End Event. At the event, high school students who participated in the mentoring program for 2009 - 2010 school year presented their projects and scholarships were awarded to participating seniors during the luncheon portion of the event. Reese Henderson, who serves on the Board of the ACE Mentoring Program, presented a $1,250 scholarship on behalf of Tritt|Henderson to Andrew Woods, a graduate of Orange Park High School. Andrew will be attending the University of Florida and plans to major in Engineering. ACE was founded in 1995 and is a not-for-profit national organization whose mission is to enlighten and increase the awareness of high school students to career opportunities in architecture, construction and engineering and related areas of the design and construction industries through mentoring; and to provide scholarship opportunities for students in an inclusive manner reflective of the diverse school population.
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Published Works
 Christopher Cobb & Bryan Rendzio co-authored an article entitled "Venue Considerations in Construction Disputes" in the May 2010 issue of the Florida Bar Journal. The criteria to have an article published in The Florida Bar Journal are stringent and the time commitment demanding. This is a very prestigious honor and a demonstration of both Christopher & Bryan's exceptional legal research and writing skills. Bryan & Christopher's article can be found at: Florida Bar Journal - May 2010
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American Bar Association's Forum on the Construction Industry Annual Conference - "The Age of Turbulence: Managing Money Issues in Construction"
Arnold Tritt and his co-presenter, Marilyn Klinger | At this year's American Bar Association's Forum on the Construction Industry's Annual Conference held in Austin, Texas, Arnold Tritt and Eileen LaCivita were asked to participate in two conference workshops. Arnold's presentation entitled "Pursuing Payment: Damned if you do; Damned if You Don't" explored the tough choices and related risks relating to payment. Eileen LaCivita organized and introduced the speakers for the "Pre- and Post-Judgment Collection Remedies: Show Me the Money!" workshop.
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Florida Super Lawyer "Rising Stars" in Construction Law
Along with co-authoring an article in the Florida Bar Journal, Christopher Cobb and Bryan Rendzio were both also recognized by Florida Super Lawyer Magazine as two of Florida's 2010 "Rising Stars" in Construction Law. No more than 2.5 percent of lawyers in Florida are named to this list of outstanding young attorneys. Christopher received this honor in 2009 as well. Congratulations to Christopher and Bryan for achieving such a prestigious honor. |
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Associated General Contractors Annual Chili Cook-Off
Team Tritt Henderson (l to r): Karen Farber, David Rottmann & Nancy Pavuk |
On April 27th, the Associated General Contractors of Greater Florida hosted their annual Chili Cook Off. Tritt Henderson's team, under the direction of chefs - Karen Farber, Nancy Pavuk and David Rottmann, won the "Best Presentation" Category. The entire firm enjoyed attending the event and sampling over 10 varieties of chili. |
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Law School Acceptance
Tritt|Henderson would like to congratulate our file clerk, Shaughn Hill, on his acceptance to Florida State University College of Law. Shaughn will sadly be leaving us in August but we are all very proud of his accomplishment and wish him the best of luck as he journeys to Tallahassee and tackles the adventures of law school!
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Thank you for choosing Tritt|Henderson as your construction attorneys. Please never hesitate to let us know how we can help your business achieve its goals!
- The Entire Team at Tritt|Henderson |
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