Category Archives: Negligence

NONDELEGABLE DUTIES

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Have you heard the expression “nondelegable duty”?  The issue of a nondelegable duty comes into play when a party hires an independent contractor and the independent contractor commits negligence, primarily in the personal injury context. In other words, a plaintiff wants to hold a defendant liable for the injuries caused by the defendant’s independent contractor.

A nondelegable duty is one that “may be imposed by statute, contract, or the common law.  In determining whether a duty is nondelegable, the question is whether the responsibility at issue is so important to the community that an employer should not be allowed to transfer it to a third party.” Garcia v. Southern Cleaning Service, Inc., 360 So.3d 1209, 1211 (Fla. 3d DCA 2023) (internal citation omitted).

When it comes to CONTRACTUAL duties:

[S]pecifically the principle that one who undertakes by contract to do for another a given thing cannot excuse himself to the other for a faulty performance by showing that he hired someone else to perform the task and that other person was the one at fault. In other words, where the contracting party makes it her or his duty to perform a task, that party cannot escape liability for the damage caused to the other contracting party by the negligence of independent contractors hired to carry out the task.

Gordon v. Sanders, 692 So.2d 939, 941 (Fla. 3d DCA 1997).

What about third parties and not contracting parties?

Liability for breach of contractual duties does NOT automatically form a recovery basis in negligence by third parties not related to the contract.  Garcia, 360 So.3d at 1211 (citation and quotation omitted).

In Garcia, a defendant company entered a contract with a supermarket to provide floor cleaning and janitorial services. It hired a subcontractor (an independent contractor).  The plaintiff fell at the supermarket and sued the defendant company in negligence alleging it owed a nondelegable duty and breached this duty by the slippery floors that caused her injury. The trial court granted summary judgment for the defendant company and the appellate court affirmed. The trial court and appellate court relied on precedent that found “the mere existence of a contract does not create vicarious liability as to third persons for the negligent acts of the independent contractor.” Garcia, 360 So.3d at 122 (citation and quotation omitted).  Hence, the defendant company’s contract with a supermarket does not create a nondelegable duty owed to a third-party that was not a party to the contract.  Id.

Importantly, liability for breach of a nondelegable duty “arises from direct-instead of imputed [or vicarious]-liability.”  Arminger v. Associated Outdoor Clubs, Inc., 48 So.3d 864, 874 (Fla. 2d DCA 2010) (“The liability for a nondelegable duty that we impose directly upon the employer of an independent contractor is grounded in a special public policy to protect third persons in an area of inherent danger and to encourage conscientious adherence to standards of safety where injury likely will result in the absence of precautions. The test of liability is the presence or absence of reasonable precautions; and direct liability is not dependent upon any apportionment to an employer of his or her concurrent negligence in failure to ensure that an independent contractor takes necessary precautions.”) (quotation omitted).

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

 

NEGLIGENT INSPECTION CLAIM AGAINST SUPERVISING DESIGN PROFESSIONAL / CONSULTANT

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Can a negligence argument be created against consulting design professionals or entities that are involved in the inspection of a trade’s work?  The recent opinion in Bautech USA, Inc. v. Resolve Equipment, Inc., 2023 WL 4186395 (S.D.Fla. 2023) contains an interesting fact pattern that touches upon this issue. While the case dealt with a motion to dismiss, it contains a number of issues that may be discussed in follow-up postings.

Here, a prime contractor was hired by Broward County, Florida to install offshore reef mitigation units.  The contractor entered into a subcontract with a concrete fabricator to fabricate the reef mitigation units. The contractor also separately hired consultants to inspect the units. The contractor and its consultants rejected the units even after the fabricator implemented design revisions.  The fabricator was then terminated and not paid for contract work plus revisions it implemented to finished units. The fabricator sued the contractor and the contractor’s consultants for non-payment under many (ten) different theories of liability claiming it was damaged to the tune of millions of dollars.

In one claim, the fabricator asserted the consultants along with the contractor’s parent entity (that had involvement in the project) were negligent in their inspection of the fabricated units. The contractor and consultants moved to dismiss the negligent inspection claim under the independent tort doctrine and because they argued they did not owe a duty of care to support a negligence claim. The trial court denied this argument. The grounds in which the trial court denied these arguments are important because these grounds create strategic considerations when asserting a negligent claim for economic damages under a negligent inspection theory or negligence theory that the supervising consultants breached their duty of care.

A. Independent Tort Doctrine

With respect to the argument the independent tort doctrine barred the negligent inspection claim, the trial court denied this argument because there wasn’t a contract between the parties, expressing:

To start, the independent tort doctrine does not bar [the fabricator’s] negligence claim against [contractor’s parent entity]. Under Florida law, “a breach of contract, alone, cannot constitute a cause of action in tort….It is only when the breach of contract is attended by some additional conductwhich amounts to an independent tort that such breach can constitute negligence.” To apply, “the [independent tort] doctrine requires contractualprivity between the parties.” Because [fabricator] does not allege that a contract exists between it and [the contractor’s parent entity], the independent tort doctrine is inapplicable and certainly does not bar a tort claim against this Defendant.

Bautech, USA, supra, at *4 (internal citations omitted).

B. Duty of Care

With respect to the argument the Defendants (contractor’s parent entity and consultants) did not owe a duty of care, the trial court denied this argument expressing:

Next, [the fabricator] has identified a source for [the contractor’s parent’s entity] duty in tort — it is the same theory as for [the contractor’s consultants]. [Fabricator] alleges [contractor’s consultants], “each acting as agent/consultants for the County, owed [Plaintiff] a duty, as subcontractorand direct manufacturer of the [u]nits, to fairly, truthfully and properly report the status of the [p]roject to the County and others, in accordance withthe requisite standard of care required by the law.” [Fabricator] then alleges that because [contractor’s parent entity] “also provided personnel forthe inspection of the [u]nits[,]” it “owed the same duties” to [Fabricator] as [the contractor’s consultants].

Bautech, USA, supra, at *5 (internal citations omitted).

Defendants argued they owe no duty of care to inspect as such duty of care is ONLY owed by supervising design professionals, which none of them are, and this duty nevertheless does not extend to subcontractors: “Defendants argue that [fabricator] cannot state of a claim for negligent inspection because Florida appellate courts have declined to extend supervising professionals’ tort duty to subcontractors.” Bautech, USA, at *5.  The trial court denied this argument because the precedent relied on by Defendants was a 1993 Florida Supreme Court case that has been overruled and the other case relied on was actually consistent with Florida’s Supreme Court’s leading 1973 opinion dealing with negligence claims against supervising design professionals, A.R. Moyer, Inc. v. Graham, 285 So.2d 397 (Fla. 1973), by considering numerous factors to determine whether such a duty of care by a supervising design professional exists.

In fact, to find a duty under Moyer, “the core issue is the extent to which the Defendant[s] supervised the Plaintiff or had sufficient control over [its] work to be able to exercise ‘economic life or death’ over the Plaintiff[,]” rather than a myopic focus on an individual’s job title. Here, the Amended Complaint indicates [Defendants] had supervisory control over [fabricator] because these Defendants “unfairly and in bad faith rejected completed [u]nits that conformed entirely to the Subcontract requirements, often for noncontractual and non-material issues.” Moreover, [fabricator] alleges the three Defendants were closely involved in the manufacturing process. This is minimally sufficient to plead that [Defendants] owed a duty to [fabricator] as supervising engineers.

Bautech, USA, supra, at *6 (internal citations omitted).

If asserting a negligent inspection claim or negligence claim against design professionals / consultants, keep the A.R. Moyer case (cited above) in mind. Also, keep this opinion in mind to plead and support the negligence claim demonstrating the duty of care that must exist to support such a negligence theory.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

NONDELEGABLE DUTY OF CARE OWED TO THIRD PERSONS

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Although a personal injury case, the recent opinion in Garcia v. Southern Cleaning Service, Inc., 48 Fla.L.Weekly D977a (Fla. 1stDCA 2023) raises an interesting issue regarding nondelegable duties owed to third persons applicable in negligence actions.  Remember, in order for there to be a negligence claim, the defendant MUST owe a duty of care to the plaintiff.  No duty, no negligence claim.

What if a defendant’s duty was delegated to, say, an independent contractor?

[A] party that hires an independent contractor may be liable for the contractor’s negligence where a nondelegable duty is involved. Such a duty may be imposed by statute, contract, or the common law. In determining whether a duty is nondelegable, the question is whether the responsibility at issue is so important to the community that an employer should not be allowed to transfer it to a third party.

Garcia, supra, (internal citations omitted).

In Garcia, a supermarket hired a company to provide floor cleaning and janitorial services.  The company subcontracted the work to an independent contractor. The plaintiff, an employee of the supermarket, fell at the supermarket and sued the cleaning company in negligence claiming the cleaning company “breached its duty of care to warn [the supermaket’s] employees and invitees of the unreasonably slippery floors that caused here injuries.” Garcia, supra.  The cleaning company moved for summary judgment claiming it is not liable for the acts of its independent contractor.  Thus, the fundamental question is whether the duty of care of the cleaning company was a nondelegable duty that could not be transferred to an independent contractor.

The trial court found the duty of care was NOT a nondelegable duty meaning it could be transferred to the independent contractor.  In this case, the cleaning company could not be liable in negligence because it owed no duty to the plaintiff (as that duty was transferred). The First District Court of Appeal affirmed, “[W]e hold that [the cleaning company’s] contract with [the supermarket] did not create a nondelegable duty on [the cleaning company’s] part to [the plaintiff], a non-party to the contract. As such, the trial court properly granted summary judgment as to this issue.”

In affirming, the First District relied on the Third District Court of Appeal’s opinion in Carrasquillo v. Holiday Carpet Service, Inc., 615 So.2d 862 (Fla. 3d DCA 1993), which stands for the proposition that the “‘mere existence of a contract does not create vicarious liability as to third persons for the negligence acts of the independent contractor.’” Garcia, supra, quoting Carrasquillo.  In other words, the contract, in of itself, does not create a nondelegable duty of care to third persons not a party to the contract.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

EXISTENCE OF “DUTY” IN NEGLIGENCE ACTION IS QUESTION OF LAW

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shutterstock_523440886In a negligence action, the issue of whether a duty applies is a question of law. See Limones v. School Dist. of Lee County, 161 So.3d 384, 389 (Fla. 2015) (“[T]he existence of a duty is a legal question because duty is the standard to which the jury compares the conduct of the defendant.”); McCain v. Florida Power Corp., 593 So.2d 500, 502 (Fla. 1992) (“Since duty is a question of law, an appellate court obviously could reverse based on its purely legal conclusion that no such duty existed.”).  Thus, the trial court determines, as a matter of law, whether a legal duty of care applies in a negligence action.

 

Florida law recognizes the following four sources of duty: (1) statutes or regulations; (2) common law interpretations of those statutes or regulations; (3) other sources in the common law; and (4) the general facts of the case.  

See id.  

 

Oftentimes it is the fourth source – the general facts of the case – that comes into play to determine whether the defendant owed the plaintiff a duty of care.  

 

To determine whether a defendant owed the plaintiff a duty under the general facts of the case, the issue becomes “whether the defendant’s conduct foreseeably created a broader ‘zone of risk’ that poses a general threat of harm to others.”  McCain, 593 So.2d at 502.  

 

For example, in White v. Ring Power Corp., a personal injury case discussed here regarding an expert’s qualifications, the trial court granted summary judgment (as a matter of law) finding that the lessor of a crane did NOT owe the plaintiff a duty to download certain crane overload data before renting the crane to the lessee.  The appellate court affirmed because nothing in the record established that the failure to download such data by the lessor before renting the crane created a broader zone of risk to the plaintiff.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

MEASURE OF DAMAGES IN NEGLIGENT PROCUREMENT OF SURETY BONDS / INSURANCE

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shutterstock_675053740My broker procured the wrong insurance and I am exposed to a loss.  My broker failed to procure proper insurance and I am exposed to a loss.  “Where the parties enter into an agreement to procure insurance and there is a negligent failure to do so, an insurance broker may be liable for damages.”  The Lexington Club Community Association, Inc. v. Love Madison, Inc., 43 Fla.L.Weekly D1860a (Fla. 4th DCA 2018).  The proper measure of damages in a negligent procurement of insurance claim is “what would have been covered had the insurance been properly obtained.”   Id. quoting Gelsomino v. ACE Am. Ins. Co., 207 So.3d 288, 292 (Fla. 4th DCA 2016).  This measure of damages  in a negligent procurement of insurance claim is important because it is the measure of damages that dictates recoverable damages under this claim.

 

In Lexington Club Community Association, Inc., condominium associations hired a contractor to perform post-hurricane repairs.  The contractor was required to obtain a performance and payment bond.  The contractor obtained bonds from a non-Florida surety (insurance) company that was not authorized to do business in Florida.  In doing so, the association paid the contractor’s surety agent $327,915 in premium, of which 10% of this amount went to the agent as commission.  The associations thereafter learned the surety was located in Barbados and not licensed in Florida, which raised a red flag, as it should.  The associations then sued, among others, the surety agent that procured the bonds and received the commission for negligent procurement of insurance, a declaration that the bond was unenforceable, and unjust enrichment.  (Notably, although the surety was sued, it did not respond to the complaint and a default was entered against it.). Ultimately, the associations paid a huge premium for a valueless product, i.e., surety bonds backed by a foreign entity that had no incentive to honor the bonds, particularly since it was not licensed to do business in Florida.

 

Of importance, the association had no cause to rely on the bonds because it did not incur any damage or issue to actually trigger the application of the bonds, other than wanting a refund in its premium.  This meant it was suing the surety agent for the $327,915 in premium that was paid to the surety not licensed to do business in Florida.  But, the lack of an actual loss under the bonds is an important consideration when it comes to proving damages.  A jury found that any negligence of the surety agent was not a cause of damage to the associations, presumably because the associations had no proven damage under the bonds.  Instead, the jury awarded the associations the 10% commission the agent received in procuring the bonds, approximately $32,000, through an unjust enrichment claim.  (An analogy would be procuring insurance from a non-Florida entity but not actually having a claim to trigger the insurance coverage.  The same rationale would apply.). 

 

Florida Statute s. 626.901 applies when dealing with an unauthorized insurer, which is an insurer not authorized to transact insurance in Florida, such as the surety in this case.  Section 626.901(2) provides:

 

If an unauthorized insurer fails to pay in full or in part any claim or loss within the provisions of any insurance contract which is entered into in violation of this section, any person who knew or reasonably should have known that such contract was entered into in violation of this section and who solicited, negotiated, took application for, or effectuated such insurance contract is liable to the insured for the full amount of the claim or loss not paid.

 

However, even under s. 626.901, an insurer’s unauthorized policy would still be deemed enforceable in Florida; however, the insurance broker could still be liable for amounts or loss not paid by the insurer.  Fla. Stat. s. 626.901.  Applied here, the bonds would still be enforceable (irrespective of the surety that actually issued the bonds).  But, again, the associations here did not actually incur a loss that would trigger the application of the bonds.

 

 

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

UNDERTAKER’S DOCTRINE IN NEGLIGENCE CLAIMS — NO GOOD DEED GOES UNPUNISHED?

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shutterstock_1035445624There are many times the old adage, “No good deed goes unpunished,” rings true.  At one point in time, or more likely many points in time, we have all felt this why.  We undertook a good deed only to feel unappreciated or the good deed backfires.

 

In Florida, there is a legal doctrine known as the undertaker’s doctrine.   Just the name of the doctrine has a morbid undertone, right?  This doctrine applies in negligence scenarios because it establishes a duty that the undertaker owes to another, even if he undertook a service because he is a swell guy.  This undertaker’s doctrine has been described as follows:

 

Whenever one undertakes to provide a service to others, whether one does so gratuitously or by contract, the individual who undertakes to provide the service — i.e., the ‘undertaker’ — thereby assumes a duty to act carefully and to not put others at an undue risk of harm.  The undertaker is subject to liability if: (a) he or she fails to exercise reasonable care, which results in increased harm to the beneficiary; or (b) the beneficiary relies upon the undertaker and is harmed as a result.

 

Muchnick v. Goihman, 43 Fla.L.Weekly D986b (Fla. 3d DCA 2018 (internal citations and quotations omitted). 

 

An example of the application of the undertaker’s doctrine can be found in Muchnick where the appellate court held former tenants could assert a negligence claim against their real estate rental agent.   In this case, a real estate agent knew a family looking to rent another high-end apartment because they lived in the same building.  He worked for a real estate brokerage firm and he approached the family about renting another unit in the same building.  During the walk through of that unit, there were items the family wanted repaired and the agent assured the family they would be addressed prior to the family moving in.  The family rented the apartment and the brokerage firm was listed as the broker for the transaction.

 

When the family moved into the unit, the items they wanted repaired were not.  And, to make matters worse, the family discovered a serious water intrusion and damage problem that resulted in mold getting into to the apartment’s ventilation system.  The family communicated predominantly with the real estate agent regarding the issues as the owner of the unit lived abroad and the agent lived in the building.  During a deposition, the father claimed that the agent told him that since he lived in the same building he would be the go-to-guy to address any issues with the apartment and undertake repairs.  The issues did not get resolved which impacted the children’s health and they were forced to terminate the lease early and relocate.

 

Initially, the real estate agent argued that his firm, and not him personally, should have been sued, because he was acting in the scope of his employment as a real estate agent in dealing with the family.  The appellate court rejected this argument stating:

 

[J]ust because Goihman [agent] was acting in the scope of his employment when he rented the apartment, promised to fix it, and managed the repairs, doesn’t mean that he was shielded from personal liability under all circumstances.   [O]fficers or agents of corporations may be individually liable in tort if they commit or participate in a tort, even if their acts are within the course and scope of their employment. All that needs to be alleged is that the agent or officer personally participated in the tort, even if the complained of action was because of and entirely within the scope of his or her employment.

 

Muchnick, supra (internal citations and quotations omitted).

 

Next, the real estate agent argued that since he did not own the apartment unit, he did not owe a duty to the family that was renting the unit to fix and manage the repairs.  The appellate court rejected this argument too…because of the undertaker’s doctrine.  Once the real estate agent volunteered, even if gratuitously, to fix the problems and manage the repairs, he assumed a duty to exercise reasonable care in performing those services.  

 

It is great to be a swell guy.  But, when you agree to undertake a service, even if that service is nothing but a good deed you are performing, you have a duty to use reasonable care in performing that service to prevent harm to the beneficiary of that service.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

THERE ARE TIMES AN EQUITABLE SUBROGATION CLAIM IS THE MOST PRACTICAL RECOURSE FOR REIMBURSEMENT

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shutterstock_627721505Equitable subrogation is a claim that can be pursued when a party (referred to as the subrogee) pays for damages to protect its interest–perhaps to mitigate its own exposure–seeks reimbursement from another party primarily liable for the damages.  There are times a party seeking reimbursement for purely economic losses is best able to pursue an equitable subrogation claim, as opposed to a common law indemnification or negligence claim.

 

Equitable subrogation is generally appropriate where: (1) the subrogee made the payment to protect [its] own interest, (2) the subrogee did not act as a volunteer, (3) the subrogee was not primarily liable for the debt, (4) the subrogee paid off the entire debt, and (5) subrogation would not work any injustice to the rights of a third party.

Tank Tech, Inc. v. Valley Tank Testing, L.L.C., 43 Fla.L.Weekly D868a (Fla. 2d DCA 2018) quoting Dade Cty. Sch. Bd. v. Radio Station WQBA, 731 So.2d 638, 646 (Fla. 1999).

 

Equitable subrogation is not dependent on a contract—it is simply an “equitable remedy for restitution to one [the subrogee] who in the performance of some duty has discharged a legal obligation which should have been met, either wholly or partially, by another.”  Tank Tech, Inc., supra, quoting W. Am. Ins. Co. v. Yellow Cab Co. of Orlando, Inc., 495 So.2d 204, 206 (Fla. 5th DCA 1986).

 

As shown in the recent decision below, there are times an equitable subrogation claim will generate more traction for purposes of a reimbursement claim than a negligence claim or common law indemnification claim, because an equitable subrogation claim does not require the party seeking reimbursement to show a duty is owed to it by the party it is seeking reimbursement from.

  

The recent decision of Tank Tech, Inc. involved damage to underground petroleum storage tanks at Circle K locations.  Company “A,” the subrogee, had been hired by Circle K to retrofit existing tanks by adding an interior wall inside of the tanks.  Company “B” was separately hired by Circle K to test the interstitial space between the new interior wall installed by Company “A” and the existing tank wall.  There was no contractual relationship between Company “A” and Company “B.”

 

After the tanks were retrofitted, Circle K notified Company “A” that the modified tanks were damaged and failing.  Although Company’s “A” investigation revealed the failure was the result of Company’s “B’s” testing methodology, Company “A” nevertheless repaired the damage to the tanks because its contract with Circle K required it to do so regardless of whether the damage was caused by a third party, such as Company “B.”

 

Company “A” then sued Company “B” for reimbursement of its repair costs under various claims, one of which was equitable subrogation.  Each party had expert opinions that pointed to the other for the cause of the tanks’ failure and damage.  The trial court granted a motion for summary judgment in favor of Company “B” finding that equitable subrogation did not apply.  This summary judgment was reversed on appeal as the Second District maintained that there were factual issues supporting the basis of the equitable subrogation claim:

 

Tank Tech’s [Company “A”] contract with Circle K obligated it to repair damages to the USTs [tanks]. But Tank Tech’s contractual obligation to Circle K did not convert Tank Tech into a “volunteer” to pay for damages caused by a third party and thus did not prevent the application of the equitable subrogation doctrine. Instead, Tank Tech was merely fulfilling its legal obligation to Circle K which was a necessary means of protecting itself from liability to Circle K. And Tank Tech, by virtue of Dr. Cignatta’s affidavit [expert opinion establishing Company “B” caused failure to tanks], established a genuine issue of material fact regarding whether Tank Tech or Valley Tank [Company “B”] was primarily liable for the damages. If Tank Tech is ultimately successful in proving that Valley Tank caused the damage to the USTs, then it would be entitled to seek any damages it incurred as a result of having to repair the damaged USTs.  To hold that Tank Tech is precluded from pursuing a claim for subrogation would leave Tank Tech without a remedy, a “most unfair and inequitable result.” 

Tank Tech, Inc., supra (internal citations omitted).

 

Negligence and Common Law Indemnification

 

Relatedly, Company “A” also sued Company “B” for negligence and common law indemnification for repairing tanks it claimed were caused by Company “B’s” testing methodology.  The trial court also granted summary judgment in favor of Company “B” on these claims.  Unlike the equitable subrogation claim, the Second District affirmed the summary judgment in favor of Company “B” on these claims. 

 

For Company “A” to sustain a negligence claim, it would have to establish that Company “B” owed it a duty.  Without a duty owed, there is no negligence claim.  Whether there is a duty is a question of law for the court.   In this case, when dealing with only economic losses, the relationship between the parties—Company “A” and Company “B”—needs to be examined to determine whether a special relationship exists to warrant creating a duty to protect the economic interests of another.  “[I]n order to proceed on a common law negligence claim based solely on economic loss, there must be some sort of link between the parties or some other extraordinary circumstance that justifies recognition of such a claim.”  Tank Tech, Inc., supra.   Here, the Second District agreed that Company “B” did not owe Company “A” a duty to support a negligence claim:

 

The reason why the negligence claim fails here is because there is neither a special relationship between Valley Tank [Company “B”] and Tank Tech [Company “A”] nor any extraordinary circumstance that would require imposition of a duty. Tank Tech’s injury did not flow from Valley Tank’s testing of the USTs [tanks]. Instead, Tank Tech seeks to recover the money it spent in repairing the USTs, an expense that was the result of a negotiated contract between Tank Tech and Circle K. There was no contract between Valley Tank and Tank Tech obligating Valley Tank to repair any USTs it damaged during testing or otherwise obligating Valley Tank to repay Tank Tech for the expenses incurred pursuant to Tank Tech’s contract with Circle K. And Valley Tank’s testing did not cause any personal injury or property damage to Tank Tech, the types of injuries for which the common law of negligence has historically permitted recovery.

***

This is simply a case of a party attempting to bring a tort claim to recover monies that it spent as a result of a contractual obligation to a third party. But negligence claims cannot proceed based on a party’s desire to relieve itself from a bad bargain.

Tank Tech, Inc., supra.

 

 

Likewise, regarding the common law indemnification claim, “actions for indemnity have been restricted to situations involving either a duty, an express contract, or the existence of active and passive negligence.”  Tank Tech, Inc., supra, quoting Hiller Grp., Inc. v. Redwing Carriers, Inc., 779 So.2d 602, 603 (Fla. 2d DCA 2001).  Since the Second District already agreed there was no special relationship between Company “A” and Company “B” and, thus, no duty owed, the common law indemnification claim failed for the same reasons as the negligence claim.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

SUING A PUBLIC ENTITY FOR NEGLIGENT MISREPRESENTATION …NOT SO FAST

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shutterstock_111122411Suing a public entity for negligent misrepresentation…let’s just say, is not that easy.  Not that easy at all!  Putting aside the doctrine of sovereign immunity (the doctrine that the king can do no wrong), a public entity does not have an affirmative duty to necessarily convey accurate information, no matter how fair or unfair this may sound.  And, a negligence claim fails without the defendant (in this case, public entity) owing the plaintiff a duty of care.  

 

For example, in City of Dunedin v. Pirate’s Treasure, Inc., 43 Fla. L. Weekly D783a (Fla. 2d DCA 2018), a commercial owner wanted to renovate its property to accommodate a refurbished marina and a new restaurant.  The owner met with the city to review its preliminary conceptual site plan.  Based on this meeting, the owner prepared a costly site plan to comply with the City’s development code for the restaurant and marina.  The City’s engineering department approved the site plan.  However, the City then informed the owner that it had concerns with the restaurant’s square footage and parking.  The owner and City agreed that the site plan for the marina and restaurant would be separated, as the owner did not want to ruffle any feathers.  The City then approved the separate site plan for the marina but told the owner that the site plan approval for the restaurant was terminated as the owner needed to submit a brand-new application and comply with the updated development code. The owner filed suit against the City claiming, among other things, the City made misrepresentations about the site plan approval only to engage in a bait-and-switch tactic where the misrepresentations were made to induce the development of the marina, without the accompanying restaurant. 

 

The City moved to dismiss the negligent misrepresentation claim on sovereign immunity grounds.  The trial court denied the City’s motion finding as a matter of law the City was not entitled to sovereign immunity and the City appealed. 

 

Interestingly, the appellate court rejected the City’s sovereign immunity argument but still reversed the trial court’s holding that the City is not liable to the owner for negligent misrepresentation.  The court based its reversal on its determination that the City did now owe the owner a duty of care, hence the negligent misrepresentation claim failed as a matter of law. 

 

A duty of care analysis is different from the analysis whether the City is sovereignly immune from the suit. If there is no duty owed, there is no reason to delve into whether sovereign immunity applies.   Here, the Court found no duty was owed because the City “does not owe a duty to convey accurate information concerning whether Pirate’s Treasure’s [owner] site plan complied with the City’s development code.”  City of Dunedin, supra.

 

The owner in this case could have been 100% correct.  It had assurances from the City and acted on those assurances in devoting the money and time in finalizing its site plan based on the current development code.  It then submitted separate plans at the behest of the City (to appease the City) only for the City to approve the marina (the project it wanted) while terminating the site plan for the restaurant (the project it really did not want).  But, assuming this is all true, it does not matter because the court found that the City never owed an affirmative duty to the owner to convey accurate information, i.e., in this case, whether the owner’s site plan complied with the development code. 

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

NEGLIGENCE AGAINST A CONSTRUCTION MANAGER-AGENT

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shutterstock_463586495Can a construction manager-agent / owner’s representative hired directly by the owner be liable to the general contractor in negligence?  An argument likely posited by many general contractors on projects gone awry where there is a separate construction manager.  Well, here is an interesting case out of Louisiana that supports a negligence claim against a construction manager-agent.

 

In Lathan Company, Inc. v. State, Department of Education, Recovery School District, 2017 WL 6032333 (La.App. 1st Cir. 2017), a general contractor entered into a contract with a public owner to renovate a school.  The public owner hired a separate construction manager (as the owner’s agent) for the project.  The general contractor claimed that the construction manager was negligent through its: unreasonable refusal to approve payment applications; delayed responses to submittals and questions; refusal to recommend substantial completion; refusal to properly manage construction oversight; and its interference with the progress of the project.   The contractor claimed, in particular, that given the scope of the construction manager’s supervisory and management responsibilities for the project, the construction manager owed a duty to exercise its responsibilities in a professional manner (akin to a professional negligence claim).  These factual assertions are not unusual facts asserted by a general contractor on a problematic project with a separate construction manager / owner’s representative.

 

The trial court granted summary judgment in favor of the construction manager on the negligence claim. But, the appellate court reversed finding that the construction manager did owe a duty to the general contractor:

 

Accordingly, after careful review of the record herein, we find that although Jacobs [construction manager] was not in direct contractual privity with Lathan [contractor], Jacobs must be deemed and held to know that its services were not only for the protection or interests of the owner but also third parties, including, specifically, Lathan, who was acting as the general contractor on the project. As outlined above, it was foreseeable and to a degree certain that Lathan would suffer economic harm if Jacobs failed to perform, or negligently performed, many of its professional duties.  Moreover, as outlined above, there is a close connection between Jacobs’s alleged failure to act according to industry standards, and the alleged economic harm suffered by Lathan. 

***

Thus, after carefully considering the record herein, and applying the balancing test enunciated in the jurisprudence noted above, we are unable to find any reason why the courts’ rationale in such prior jurisprudence, extending the liability of architects and engineers, should not likewise apply to a project management professional, under the facts of this case.

 

 

Lathan Company, supra, at *13-14 (internal citations omitted).

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

GENERAL CONTRACTOR’S PROFESSIONAL MALPRACTICE / NEGLIGENCE CLAIM AGAINST DESIGN PROFESSIONAL

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Untitled designA recent case supports a professional malpractice (negligence) claim by a general contractor against a design professional by reversing a trial court’s entry of summary judgment in favor of the design professional and finding a question of fact remained as to an architect’s role in the renovation of a public construction project.  By the appellate court finding that a question of fact remained, the appellate court was finding that it was a triable issue, which is exactly what the general contractor wanted in this case.  Getting this issue and the facts to the jury is the leverage the general contractor presumably wanted.

 

In Perez-Gurri Corp. v. Mcleod, 42 Fla. L. Weekly D2487c (Fla. 3d DCA 2017), a general contractor was hired by Miami to renovate a public project.  Miami’s prime consultant subcontracted with an architectural firm to prepare the design documents for the renovation.  The construction of the project was delayed and the general contractor filed suit against the architectural firm and other design professionals for professional negligence.  The general contractor’s theory was that the design professional’s professional negligence delayed construction thereby causing the general contractor to incur increased costs (such as extended general conditions). 

 

Architectural Role or Services

 

The architect claimed it played no role in the project.  It is uncertain from the opinion whether the architect was claiming it literally played no role in the project or whether its position was that its role was so limited that a duty was not owed to the general contractor.  Either way, the court was focused on the role the architect played in the renovation of the project and held a question of fact remained as to the services or role the architect played in the construction of the project.   This is a pretty loose standard because it presumably allows the jury to determine (i) whether the architect rendered services or performed a role on the project and, if so, (ii) whether the role or services caused a delay in the construction of the project.  The reason this standard appears loose is because there isn’t any discussion as to the type of professional services or role that the architect must play for a duty to be extended to the general contractor.  (For there to be a professional negligence claim against the architect, the architect must be deemed to owe a duty to the general contractor with respect to the services or role it is performing.)

 

No-Damage-For-Delay Provision

 

This case also had a discussion regarding the no-damage-for-delay provision in the general contractor’s contract with the City.  The trial court held that the architect was protected by this provision.  (A no-damage-for-delay provision provides that a contractor’s exclusive remedy for delay is an extension of time, and it is not entitled to damages.) The appellate court reversed maintaining nothing in the no-damage-for-delay provision extended to the architect.  And, the contract further provided there are no third party beneficiaries to the contract.

 

Considerations

 

This recent opinion leads to a few important points. 

 

First, as a general contractor, you ideally do not want to extend a no-damage-for-delay provision to anyone but the owner that hires you. From an owner’s perspective, if you want the no-damage-for-delay provision to benefit your consultants, you want to ensure that protection is clearly articulated in the no-damage-for-delay provision with a carve-out in the provision that references there are no third party beneficiaries.

 

Second, no-damage-for-delay provisions are not absolute, meaning there are exceptions to a no-damage-for-delay provision.  There was no discussion as to the applicability of those exceptions here.  Perhaps that is because the facts did not warrant the applicability of an exception or there was no need to go into such discussion since the no-damage-for-delay provision did not extend to the architect, or any design professional for that matter.  But, the applicability of an exception could also raise a question of fact.

 

Third, and mentioned above, there is no discussion as to the role or services the architect must perform for a duty to be extended to the general contractor.  Thus, even if the architect played a role or performed services, the case does not go into detail as to whether such role or services would even rise up to a level of the architect owing a duty to the general contractor.  This is important since the issue of duty is typically a question of law for the court to decide.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.