NEGLIGENCE OF PROPERTY APPRAISER

shutterstock_431491873A new appellate decision came out discussing the statute of limitations associated with a negligence claim against a property appraiser.   In this case, Llano Financing Group, LLC v. Petit, 42 Fla. L. Weekly D2071a (Fla. 1st DCA 2017), the court held that the four year statute of limitations for negligence claims commences when the lender relied on the appraisal to fund the loan.   The statute of limitations does not commence years later when the property is ultimately sold at a loss.  Oh no.  Once the lender receives the appraisal and funds the loan, the statute of limitations for the negligence claim begins.  Applying this rationale in other contexts, the statute of limitations to sue a property appraiser in negligence would commence once an appraisal is received and relied on.   This is best explained by the following hypothetical footnoted by the court:

 

Consider this example: An appraiser negligently appraises a $100,000 house at $150,000. A buyer reasonably relies on that negligent appraisal and buys the $100,000 house for $150,000. The buyer’s damages ($50,000) are easily determined immediately after the sale. Those damages would be the same whether the buyer promptly sold the home at a loss, lived in it forever, or sold it for $200,000 after decades of market appreciation.

Llano Financing Group, supra, n. 3.

 

 

If you feel like you suffered a loss at the hands of a negligent appraisal, make sure you consult counsel.  Based on the court’s decision in this case, the lender’s statute of limitations expired.  Make sure this does not happen to you.

 

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.

OWNERS: DON’T IGNORE THE STATUTE OF LIMITATIONS IN FLORIDA STATUTE s. 95.11(3)(c) FOR CONSTRUCTION DEFECTS / DAMAGE

Unknown-1If you are an owner experiencing construction defects or corresponding damage (e.g., water intrusion) please consult with counsel.  Not doing so can result in your lawsuit being forever time-barred by the statute of limitations!  Do NOT let this happen to you; this means that any valid claims you may have associated with the construction defects or corresponding damage are gone.

 

The statute of limitations for construction disputes including construction defect disputes is embodied in Florida Statute s. 95.11(3)(c), set forth at the bottom of this posting.  Please check out this article and this article for more information on the statute of limitations for construction defects. 

 

For example, in Brock v. Garner Window & Door Sales, Inc., 2016 WL 830452 (Fla. 5th DCA 2016), homeowners experienced water intrusion from their windows and sued the company that installed the windows.  The problem, however, was that the homeowners sued the window installer more than four years after the homeowners discovered the defect (the statute of limitations in s. 95.11(3)(c) as set forth below) but less than five years after the discovery of the defect.   The homeowners tried to creatively argue that the five-year statute of limitations governing written contracts should control because the window installer was not a licensed contractor and should not reap the benefit of the shorter four-year statute of limitations. The Fifth District rejected this argument. 

 

Regardless of whether your claims are against a licensed or unlicensed contractor, the four-year statute of limitations in s. 95.11(3)(c) is going to control your construction defect lawsuit.  In the case above, the homeowners waited more than four years after discovering the water intrusion to sue their window installer.  As a result, their counsel had to come up with an argument to try to circumvent the four-year statute of limitations.  Unfortunately, the argument was not successful and the homeowners potentially valid claims were time-barred.  Clearly, this is a situation you want to avoid so that you are not having to defend your valid claims with a statute of limitations defense.

 

 Florida Statute s. 95.11(3)(c)

(3) WITHIN FOUR YEARS.—

***

(c) An action founded on the design, planning, or construction of an improvement to real property, with the time running from the date of actual possession by the owner, the date of the issuance of a certificate of occupancy, the date of abandonment of construction if not completed, or the date of completion or termination of the contract between the professional engineer, registered architect, or licensed contractor and his or her employer, whichever date is latest; except that, when the action involves a latent defect, the time runs from the time the defect is discovered or should have been discovered with the exercise of due diligence. In any event, the action must be commenced within 10 years after the date of actual possession by the owner, the date of the issuance of a certificate of occupancy, the date of abandonment of construction if not completed, or the date of completion or termination of the contract between the professional engineer, registered architect, or licensed contractor and his or her employer, whichever date is latest.

 

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.

 

 

TIMELY FILE YOUR MILLER ACT PAYMENT BOND LAWSUIT

imagesIf you are a subcontractor, sub-subcontractor, or supplier on a federal construction project, please make sure to preserve your Miller Act payment bond rights.  This includes filing suit in a federal district court against the payment bond surety.   The Eleventh Circuit’s ruling in Thomas v. Burkhardt, 2016 WL 143351 (11th Cir. 2016) illustrates what can happen if you do not properly pursue your Miller Act payment bond rights.

 

In Thomas, a subcontractor sued a contractor in state court and recovered a judgment against the contractor.  When the subcontractor could not collect on its judgment, it sued the contractor’s Miller Act payment bond surety.  The problem was the subcontractor filed its lawsuit many years after the statute of limitations expired on the Miller Act.  The subcontractor argued the contractor’s surety should be bound by the state court judgment against the contractor (the principal of the payment bond). The Eleventh Circuit said “No!”  The surety was not bound by the state court judgment. Indeed, even if the surety had notice of the subcontractor’s state court suit against the contractor, the Eleventh Circuit still maintained that the surety would not be bound by the state court judgment and would not be estopped from raising the statute of limitations as a defense:

 

[T]he doctrine of estoppel against the surety rests on the principle that a surety with knowledge of a suit against the principal has a “full opportunity to defend” the suit and to protect its rights. But there is no such equitable principle at work here. The surety cannot protect its rights by joining in the defense of the suit. It cannot intervene as defendant any more than it could be named as defendant in the first place.

Thomas, supra, at *3 quoting U.S. Fid. & Guar. Co. v. Hendry Corp., 391 F.2d 13, 17 (5th Cir. 1968).

 

The morale is to timely file your Miller Act payment bond claim against the payment bond surety.  There is no reason not to!

 

 

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.

 

STATUTE OF LIMITATIONS AND REPOSE FOR INDEMNIFICATION CLAIMS (STEMMING FROM CONSTRUCTION DEFECT)

images-1I have written articles regarding the statute of limitations and statute of repose relating to construction disputes governed under Florida Statute s. 95.11(3)(c):

 

Within Four Years.  An action founded on the design, planning, or construction of an improvement to real property, with the time running from the date of actual possession by the owner, the date of the issuance of a certificate of occupancy, the date of abandonment of construction if not completed, or the date of completion or termination of the contract between the professional engineer, registered architect, or licensed contractor and his or her employer, whichever date is latest; except that, when the action involves a latent defect, the time runs from the time the defect is discovered or should have been discovered with the exercise of due diligence. In any event, the action must be commenced within 10 years after the date of actual possession by the owner, the date of the issuance of a certificate of occupancy, the date of abandonment of construction if not completed, or the date of completion or termination of the contract between the professional engineer, registered architect, or licensed contractor and his or her employer, whichever date is latest.

 

In the construction defect context, a claimant has four years to sue from the date they knew or reasonably should have known with the exercise of due diligence the defect (e.g, the latent defect).  This is the statute of limitations.  Nonetheless, a claimant must sue no matter what on a latent defect within ten years from the project’s completion (see statute above).  This is the statute of reposeA construction defect lawsuit cannot be initiated after the expiration of the statute of repose.

 

Let’s assume the following dates:

 

            Project completion (start of limitations)                                          2005

            First discovery of water intrusion                                                   2008

            General contractor completes repairs                                            2011

            General contractor sues subcontractor for indemnification            2013

 

In this scenario, the subcontractor may argue that the general contractor’s statute of limitations to sue the subcontractor for the defect and damage is barred by the statute of limitations since the first discovery of water intrusion was in 2008 and the general contractor waited to sue until 2013 (five years later).

 

But, wait…the general contractor is going to sue the subcontractor for indemnification (preferably, contractual indemnification based on the terms of the subcontract). In this scenario, the general contractor is suing after it completed repairs and established its liability to the owner for repairing the defects and damage. 

 

The statute of limitations for an action seeking indemnity does not being running until the litigation against the third-party plaintiff [general contractor] has ended or the liability [against the third-party plaintiff], if any, has been settled or discharged by payment.” Castle Constr. Co. v. Huttig Sash & Door Co., 425 So.2d 573, 575 (Fla. 2d DCA 1982) (finding general contractor’s indemnity claim against subcontractor did not accrue until the owner’s litigation against the general contractor ended or the general contractor’s liability determined).  Stated differently, the statute of limitations for the general contractor’s indemnification claim did not begin to start running until 2011 when its liability to the owner for the defects was discharged / settled.

 

Now, let’s assume the following dates:

 

     Project completion (start of limitations)                                          2005

            First discovery of water intrusion                                                   2008

            General contractor completes repairs                                            2013

            General contractor sues subcontractor for indemnification            2016

 

In this instance, the subcontractor may argue that the statute of repose expired because the general contractor waited until 2016 or eleven years after the statute of limitations started to accrue in 2005.  Guess what?  The subcontractor would be right.  See Dep’t of Transp. V. Echeverri, 736 So.2d 791 (Fla. 3d DCA 1999) (explaining that the statute of repose for construction defect claims still applies to claims for indemnity).  Stated differently, even though the general contractor sued the subcontractor for indemnification within three years of establishing its liability, it was still bound by the ten year statute of repose that started accruing in 2005, meaning such lawsuits were barred after 2015.

 

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.