FLORIDA’S NEW CIVIL REMEDIES ACT – BULLETPOINTS AS TO HOW IT IMPACTS CONSTRUCTION

There has been much talk about Florida’s new Civil Remedies Act (House Bill 837) that Governor DeSantis approved on March 24, 2023.  As it pertains to construction, here is how I see it with key bulletpoints on the impact this new Act has on the construction industry:

  • New Florida Statute s. 86.121– This is an attorney’s fees statute for declaratory relief actions to the prevailing insured to determine insurance coverage after TOTAL COVERAGE DENIAL. (Note: A defense offered pursuant to a reservation of rights is not a total coverage denial.) This right only belongs to the insured and cannot be transferred or assigned. And the parties are entitled to the summary procedure set forth in Florida Statute s. 51.011 requiring the court to advance the cause on the calendar. The new statute does say it does NOT apply to any action arising under a residential or commercial property insurance policy. (Thus, since builder’s risk coverage is a form of property insurance, the strong presumption is this new statute would not apply to it.)  Rather, the recent changes to Florida Statute s. 626.9373 would apply which provides, “In any suit arising under a residential or commercial property insurance policy, there is no right to attorney fees under this section.”
  • Florida Statute s. 95.11 – The statute of limitations for negligence causes of action are two years instead of four years. This applies to “causes of action accruing after the effective date of this act.”
  • Florida Statute s. 624.155 – Adds language relative to bad faith insurance claims including bad faith claims asserted under the common law.
  • Florida Statute 768.81 – Includes a greater percentage of fault section in the comparative negligence statute  that states, “In a negligence action to which this section applies, any party found to be greater than 50 percent at fault for his or her own harm may not recover any damages. This subsection does not apply to an action for damages for personal injury or wrongful death arising out of medical negligence pursuant to chapter 766.
  • Florida Statute s.  627.428– This statute was repealed. This was the attorney’s fees statute for insurance disputes.
  • Florida Statute s. 627.756 – This modified the language in this statute but still provides in a suit by an owner, contractor, a subcontractor, a laborer, or materialman against a surety under a payment or performance bond, if the claimant prevails, it can recover reasonable attorney’s fees for prosecuting the suit.
  • “This act shall not be construed to impair any right under an insurance contract in effect on or before the effective date of this act. To the extent that this act affects a right under an insurance contract, this act applies to an insurance contract issued or renewed after the effective date of this act.”

Please feel free to reach out to me if you view this Act differently.

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.

QUICK NOTE: CONTRACTOR’S STATUTORY BASIS TO RECOVER ATTORNEY’S FEES AGAINST PERFORMANCE BOND

On October 1, 2019, a modification to existing law (Florida Statute s. 627.756) will take place that allows general contractors to have a statutory basis to recover attorney’s fees against its subcontractor’s performance bond.     (Obviously, the subcontractor will need to be properly defaulted pursuant to the terms of the performance bond and incorporated subcontract.)  Now, while some manuscript subcontractor performance bonds already give the general contractor a contractual right to recover attorney’s fees against the performance bond, this right will also exist by statute for performance bonds issued on or after October 1, 2019.  This modification is good news for contractors that require certain subcontractors to obtain a performance and payment bond (as opposed to enrolling the subcontractor in a subcontractor default insurance program).  Irrespective of this modification, it is still good practice for a contractor requiring a subcontractor to provide a performance and payment bond to also ensure a contractual right exists to recover attorney’s fees under a bond claim.  However, with this modification, a contractor defaulting a bonded subcontractor will also seek to recoup its attorney’s fees against the performance bond under this statute.   Good news for contractors.  Perhaps, not so good news for sureties and subcontractors required to indemnify their sureties.  

 

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.