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Florida Appeals Court Overturns Lower Court Ruling in Construction Lien Case

Litigation

On January 22nd, 2020, the Fourth District Court of Appeals for the State of Florida overturned a lower court’s ruling for summary judgment in a construction defect lawsuit. In Prime Investors & Developers, LLC and Homestead Holdings II, LLC v. The Meridian Companies, Inc., the appeals court assessed that there are still genuine material facts in dispute regarding the quality of materials and quality of workmanship provided by the subcontractor. 

Dispute: Quality of Cabinets and Countertops at a Miami-Dade County Hotel Property 

The initial dispute in this case centers around the quality of cabinets and countertops installed at a South Florida hotel. Prime Investors & Developers (developer) hired Homestead Holdings II (contractor) as the primary contractor on the project. The specific task of putting in the cabinets and countertops was subsequently assigned to The Meridian Companies (subcontractor).

The construction contract contained standard language regarding quality of work. Specifically, it stated that the subcontractor should perform the project in a “timely, quality, professional and workmanlike manner.” At least at first glance, the subcontractor finished the project in a timely manner and was given partial payment. However, the full payment was withheld on the grounds that there were deficiencies with both the quality of the materials and installation.

Breach of Contract Lawsuit and Construction Lien

Eventually, concurrent breach of contract lawsuits were filed by the contractor and subcontractor. The contractor filed a claim on the grounds that the work product was defective, and thus, the agreement was breached. The subcontractor filed a breach of contract claim on the grounds that it never got paid the full amount owed. Notably, in its breach of contract claim, the subcontractor sought a construction lien against the developer, bringing in that company as a third party.

Reversal: Material Disputes Remain

At the summary judgment stage, the subcontractor was successful. A trial court found for it in the breach of contract and construction lien claims. However, on review, Florida’s Fourth District Court of Appeals determined that material facts remain in dispute. Thus, at this time, summary judgment is not appropriate. The case has been remanded for further proceedings to determine:

  • If the materials/installation provided by the subcontractor were actually substandard; and
  • If the subcontractor properly followed Florida’s construction lien notice and time requirements.

This case should serve as an illustrative reminder of the complexity of construction lien lawsuits and construction litigation in general. If your Florida company is currently involved in a dispute over a construction defect, it is imperative that you seek professional legal guidance as soon as possible.

Set Up a Consultation With a Florida Construction Law Attorney

At Pike & Lustig, LLP, our West Palm Beach commercial litigation lawyers have in depth experience handling complex construction litigation, including cases involving construction defects and construction liens. We will help you navigate the legal process and protect your interests. For a strictly confidential, no commitment review of your dispute, please reach out to us today. We have offices in West Palm Beach and Miami and we handle construction lawsuits throughout Southeastern Florida.

Resource:

.4dca.org/content/download/568947/6428783/file/191005_1709_01222020_09154632_i.pdf

https://www.turnpikelaw.com/florida-supreme-court-will-hear-complex-385-million-breach-of-contract-dispute-over-the-state-governments-failure-to-match-private-donations-to-the-university-system/

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