Archive: October 2008

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Court Holds Action on Performance Bond Accrues Upon Contractor’s Acceptance of Subcontractor’s Work and Payment for that Work in Full
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Court Rules Lien Timely Filed Pursuant to Florida Statute 713.08(5)

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.

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