Archive: 2008

1
Foreign Contractor’s Failure to Register with Secretary of State Does Not Void Contract or Arbitration Clause
2
Inclusion of Disallowed Items in Lien Not Always Bad Faith
3
Court Rules Contractor’s Failure to File Action or Counterclaim to Enforce Lien within 20 days in Compliance with the Statute Requires Discharge of the Lien
4
Court Holds Action on Performance Bond Accrues Upon Contractor’s Acceptance of Subcontractor’s Work and Payment for that Work in Full
5
Court Rules Lien Timely Filed Pursuant to Florida Statute 713.08(5)
6
Insurer Granted Summary Judgment against General Contractor where Contract between Subcontractor and Injured Worker’s Firm Fails to Meet Indemnification Requirements
7
Inability to Determine Whether Owner Owed General Contractor when Subcontractor filed Lien Precludes Summary Judgment
8
Finding Surety Sufficiently Pled for Quia Timet, Court Denies Motion to Dismiss
9
The Class of One Theory of Equal Protection has No Application in the Public Hiring Context
10
Contractor Authorized by Condo Association to Work on Common Areas May Sue Association as Unit Owners’ Representative

Foreign Contractor’s Failure to Register with Secretary of State Does Not Void Contract or Arbitration Clause

City of Westfield v. Harris & Assocs. Painting, Inc., 567 F. Supp. 2d 252 (D. Mass. 2008)

In this case, the Federal District Court for the District of Massachusetts allowed a contractor’s motion to compel arbitration and remanded the case to arbitration despite the fact that the contractor failed to register as a foreign corporation with the Massachusetts Secretary of State as required by M.G.L. c. 30, § 39L.

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Inclusion of Disallowed Items in Lien Not Always Bad Faith

Politano v. GPA Constr. Group, 2008 WL 515661 (Fla. Dist. Ct. App. Dec. 10, 2008)

In Politano, an owner moved to discharge a contractor’s lien for willful exaggeration based on the contractor’s inclusion of overhead and profit.  The Third DCA affirmed the trial court’s decision to reduce the amount of the lien accordingly, but not discharge the lien based on the finding that the disallowed items included in the lien were a result of mistake not willful exaggeration.  It rejected the owner’s argument that a lien is willfully exaggerated if it includes non-lienable items without regard to ignorance or good faith, or that a court’s reduction of a lien amount necessarily means the original lien amount was fraudulent.
 

Court Rules Contractor’s Failure to File Action or Counterclaim to Enforce Lien within 20 days in Compliance with the Statute Requires Discharge of the Lien

Brookshire v. GP Constr. of Palm Beach, Inc., 99 So.2d 179 (Fla. Dist. Ct. App. 2008)

In Brookshire, an owner filed a complaint to discharge a contractor’s lien and the clerk issued an order to show cause under Florida Statute Sec. 713.21(4).  Accordingly, the contractor had 20 days to show cause as to why his lien should not be enforced by action or vacated and cancelled of record.  Failure to do so would result in cancellation of the contractor’s lien.  The contractor filed a motion to compel arbitration and set it for hearing within the 20 day period, but did not respond to the show cause order.  The contractor argued that the motion to compel satisfied Section 713.21.  The appellate disagreed and directed the trial court to discharge the lien.

The contractor had argued that the motion to compel arbitration satisfied Section 713.21 because the dispute would ultimately be arbitrated and the contractor wanted to avoid any issue as to whether he was waiving arbitration.  The court held that Section 713.21 does not allow for exceptions, such as extensions of time, nor does it leave the court with any discretion to excuse a failure to comply.  The court also noted that any concern regarding waiving arbitration could have been satisfied by contemporaneously filing a motion to arbitrate those issues that were allegedly subject to arbitration.

Court Holds Action on Performance Bond Accrues Upon Contractor’s Acceptance of Subcontractor’s Work and Payment for that Work in Full

BDI Constr. Co. v. Hartford Fire Ins. Co., 2008 WL 4568075 (Fla. Dist. Ct. App. Oct. 15, 2008)

In BDI Construction Co., a subcontractor filed a third party action on a sub-subcontractor’s performance bond.  The surety moved for summary judgment claiming that the agreed five-year statute of limitations under Florida Statute Section 95.11(2)(b) began to run when the subcontractor accepted the sub-subcontractor’s work as complete and paid for the work in full.  The subcontractor on the other hand argued that the statute of limitations began to run when the entire project was completed and accepted by the owner.  The subcontractor relied on the Florida Supreme Court’s opinion in Fed. Ins. Co. v. Southwest Florida Retirement Ctr., Inc., 707 So. 2d 1119, 1121 (Fla. 1998), which stated that Section 95.11 “as it applies to an action on a performance bond, accrues on the date of acceptance of a project as having been completed according to the terms and conditions set out in the construction contract.”
 

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Court Rules Lien Timely Filed Pursuant to Florida Statute 713.08(5)

J.S.L. Constr. Co. v. Levy, 994 So.2d 179 (Fla. Dist. Ct. App. 2008)

In this case, a homeowner sued a contractor to discharge a mechanic’s lien and for breach of contract.  The contractor was hired to construct the shell of a residence, with non-shell work performed by change order.  Among other things, this case addresses whether the contract recorded its claim of lien timely.

Florida Statutes Section 713.08(5) provides that a "claim of lien may be recorded at any time during the progress of the work or thereafter but not later than 90 days after the final furnishing of the labor or service or materials by lienor."  The parties had agreed that the contractor would oversee work performed by electrical and other subcontractors.  Moreover, because the subcontractors’ permits were tied to the master permit, the contractor could not close out its permit and complete the project until the electrical and other subcontract work was performed.  The contractor also did a final walk through of the project with the building inspector.  Because the contractor filed its claim of lien within 90 days of those activities, the claim of lien was timely.

Insurer Granted Summary Judgment against General Contractor where Contract between Subcontractor and Injured Worker’s Firm Fails to Meet Indemnification Requirements

Connolly Bros., Inc. v. Nat’l Fire & Marine Ins. Co., Civ. No. 06-11673-NG, 2008 WL 5423198 (D. Mass. Sept. 30, 2008)

In this case, the Federal District Court for the District of Massachusetts granted an insurer’s motion for summary judgment on a general contractor’s claim for indemnification and for unfair and deceptive practices under M.G.L. c. 93A, because the general contractor was not covered for the relevant incident by the insurer’s policy.

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Inability to Determine Whether Owner Owed General Contractor when Subcontractor filed Lien Precludes Summary Judgment

In Nitro Dynamics v. Petruzzi Bros., Inc., 2008 WL 4635884 (Mass. Super. Ct. Sept. 26, 2008)

In this case, a subcontractor sued three defendants – the owner, the general contractor, and a surety – asserting claims for breach of contract, quantum meruit, and for recovery on a mechanic’s lien dissolution bond.  The Superior Court granted the owner’s motion for judicial notice of a stipulation of dismissal in a related action, but denied the owner’s motion for summary judgment.

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Finding Surety Sufficiently Pled for Quia Timet, Court Denies Motion to Dismiss

Safeco Ins. Co. of America v. Tarragon Corp., 2008 WL 427969 (M.D. Fla. Sept. 16, 2008)

In Safeco, a third-party sued a general contractor and a surety in state court to recover against a Section 713.24 lien transfer bond.  Because the contractor refused to honor its obligations to the surety under their indemnity agreement, the surety then sued the contractor in federal court, asserting a claim quia timet, based on the future monies that the third-party was demanding on the bond.  Quia timet allows a person to seek equitable relief from future probable harm to a specific right.  Under Florida law, quia timet relief is not appropriate without proof that the surety realistically faces loss under the bond and is in jeopardy.

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The Class of One Theory of Equal Protection has No Application in the Public Hiring Context

Douglas Asphalt Co. v. Qore, Inc., 541 F.3d 1269 (11th Cir. Sept. 2, 2008)

In Douglas Asphalt, a highway paving contractor sued State Department of Transportation officials, in their individual capacity, under 42 U.S.C. Section 1983.  The contractor claimed that the Department wrongfully singled out the contractor and treated it differently than other paving contractors in violation of the equal protection clause.  The contractor argued that the officials were not shielded from liability by their qualified immunity defense because the contractor was alleging a “class of one” equal protection claim.

The Eleventh Circuit disagreed and held that the reasoning behind the U.S Supreme Court’s 2008 decision in Engquist v. Oregon, 128 S. Ct. 2146 (2008), a government-employee relationship case, applied in the government contractor context.  Specifically, there is a “crucial difference between the government exercising its power to regulate or license, as lawmaker, and the government acting as proprietor to manage its internal operation.”  Employment decision making, including the hiring of government contractors, is “often subjective and individualized, resting on a wide array of factors that are difficult to articulate and quantify.”  Thus, the class of one theory of equal protection has no application in the public hiring context—otherwise every government hiring decision would become a constitutional matter.

Contractor Authorized by Condo Association to Work on Common Areas May Sue Association as Unit Owners’ Representative

Trintec Constr., Inc. v. Countryside Village Condo. Assoc., 992 So. 2d 277 (Fla. Dist. Ct. App. 2008)

This case addresses whether the term “owner” for the purpose of applying mechanic’s lien law to a condominium property and improvements to its common elements refers to:  (a) each and every unit owner in the condominium, or (b) the condominium association created by the declaration.  The association argued that lien law’s use of “owner” means each individual condominium owner such that those owners are indispensable parties.  The Court, analyzing the construction lien statute and Florida civil procedure rules as to condominium associations held that the unit owners are not indispensable parties and the roofing contractor could proceed against just the association.

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