The Florida defense bar has always struggled in creating enforceable Proposals for Settlement/Offers of Judgment to trigger an award for attorneys’ fees. In no area has this been more apparent than in the construction defect setting.
A typical defendant in a construction defect case may face claims by a homeowner’s association and a cross-claim by the general contractor seeking defense and indemnity. Defendants even face challenges in smaller, single-family home cases when the Plaintiffs are a husband and wife and are both plaintiffs. Here the subcontractor is forced to serve separate Proposals for Settlement to each plaintiff, which poses risks.
In the first circumstance, Rule 1.441(c)(2)(d) Florida Rules of Civil Procedure, allows a contractor defendant to include non-monetary terms in the Proposal for Settlement to the Association, which is done through a simple release. Without a release for the subcontractor’s scope, the Association can just take the subcontractor’s money, dismiss the subcontractor, and continue the claim against the general contractor. However, the subcontractor remains in the case because of the general contractor’s cross-claim and indemnity obligation continues because the scope is still an issue in the litigation. Because of the complexity and amount of claims in a construction defect case, they always require a thoughtful Proposal for Settlement with specific non-monetary terms.
However, the Florida Supreme Court has just changed the current rule and is no longer allowing parties to include non-monetary terms in the Proposal for Settlement except for a dismissal with prejudice. The change become effective July 1, 2022. With the new rule change, defendants in a construction defect case are once again hamstrung by the rules. Without the ability to include a non-monetary term in the Proposal for Settlement, a defendant subcontractor can no longer require the Association to release the scope of work through the Proposal for Settlement. This takes the away the ability of a contractor defendant to recover fees against the Association should they beat the Proposal.
About Michael J. Childers:
Mr. Childers is Board Certified in Construction Law by the Florida Bar and is AV® Preeminent Peer Review Rated by Martindale-Hubbell. He is an expert in handling construction-related claims involving defects, breach of contract or warranty, professional negligence, delay, liens / bonds, product defects and insurance coverage. He has trial experience involving large, complex construction cases.
He represents owners, contractors, design professionals, subcontractors in various trades, material suppliers, and manufacturers in construction disputes, and also assists clients in transactional work including drafting and negotiating construction contracts.