Archive:2008

J.C. Gibson Plastering Co. v. XL Specialty Ins. Co., 2008 WL 1931348 (M.D. Fla. May 2, 2008)

In J.C. Gibson Plastering, the U.S. District Court for the Middle District of Florida held that a surety could state a claim for common law indemnity against a subcontractor despite the absence of privity.  The court found that the two elements necessary to state a claim for common law indemnity were satisfied:  (i) the surety may be constructively, vicariously or derivatively liable for the subcontractor’s failure to pay sub-subcontractors, and (ii) the surety was without fault in causing the loss it was required to bear, despite failing to timely respond to the claim.

Also, despite the lack of Florida authority on the question, the court also held that a surety’s failure to respond to the subcontractor’s claim for payment under a payment bond within forty-five days (as required under the bond) barred the surety from challenging the claim or from asserting counterclaims to the extent the surety could have reasonably identified the bases of its affirmative defenses or counterclaims’ during the forty-five day period.  By failing to respond timely, the claim was undisputed and subject to summary judgment.

Saltponds Condo. Assoc. v. Walbridge Aldinger Co., 979 So. 2d 1240 (Fla. Dist. Ct. App. 2008)

In this case, a condo association sued a contractor in connection with alleged construction defects discovered after the control of the association passed from the developer to the unit owners.  The contractor argued that the claims were barred by the three-year “statute of limitations” set forth in Florida Statute Section 718.203.  That Section, however, merely sets the warranty period for construction improvements and materials, not the statute of limitations.

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Great West Contractors, Inc. v. WSS Ind. Constr., Inc., 162 Cal. App. 4th 581 (2008)

WSS Industrial Construction, a steel subcontractor, sued general contractor Great West Contractors, to recover for work performed on a public works project in Riverside, California.  At the time that WSS submitted its bid proposal to Great West, WSS had applied for but not yet obtained a corporate contractor’s license.  WSS did receive a license after the bid was accepted, but only after it had already ordered multiple sets of shop drawings and some of the material necessary for the project.  WSS initiated the lawsuit by suing Great West and its surety, Fidelity and Deposit Company of Maryland, for $91,000 due under the contract and subsequent change orders.

At trial, Great West and Fidelity moved for a nonsuit on the grounds that WSS was statutorily barred, pursuant to Business and Professions Code section 7031, from any recovery because WSS was not duly licensed at all times during performance of the contract.  The trial court determined that WSS’s president had held valid individual licenses at all times and that, in any event, WSS was not required to have a license for the work that it performed prior to receiving its license.  The court held that “there was substantial compliance with the licensing during the contract and work was performed in good faith.”  The jury awarded WSS $220,000 in damages, including statutory penalties and interest.  Great West and Fidelity appealed after the court rejected their post-trial motions for a new trial, vacation of judgment and judgment notwithstanding the verdict. Read More