July 27, 2020
For Immediate Release
Written by: Christopher J. Mueller, Esq. & Taylor Schmidinger, Law Clerk
Recently, the Fourth District Court of Appeals affirmed a trial court’s apportionment of damages between an engineering firm, a general contractor, and a program manager in the matter of Broward County, Florida v. CH2M Hill, Inc. In doing so, the appeals court dealt a substantial, if not fatal, blow to the concept of indivisible injury among multiple breaches of contract causing a single harm.
In the underlying case, Broward County alleged that the general contractor for a project to construct a taxiway at Fort Lauderdale-Hollywood International Airport breached its contract with the County by performing defective work which contributed to the defective construction of the taxiway. The County also alleged that an engineering firm, breached its contract with the County through errors, omissions, or defects in the design of the project as well. The trial court entered a final judgment in favor of the County and subsequently allocated damages for breach of contract between Triple R, CH2M, and a former party in the lawsuit that had settled before trial. The trial court allocated the damages as follows: (1) 60% of the damages to the former party; (2) 25% of the damages to Triple R; and (3) 15% of the damages to CH2M. In doing so, the trial court rejected the County’s argument that judgment should be joint and several, arguing the County’s breach of contract damages were indivisible and therefore not subject to allocation.
On appeal, the County asked the Fourth DCA to reconsider the trial court’s allocation of fault, which placed a bulk of the responsibility on the conduct of the former party, arguing that comparative fault was not the appropriate way to apportion damages in a breach of contract case. The County then proposed that the court should have followed the rule that, “where separate breaches of a contract cause a single, indivisible injury, comparative fault is inapplicable, so that the breaching parties are held jointly and severally liable for the plaintiff’s damages.”
The Fourth DCA rejected the County’s argument, holding that section Fla. Stat. §768.81 authorized the allocation of fault. The appeals court reasoned that the legislature adopted an expansive view that applied the statute to both contract and tort actions. The Court noted that although §768.81(3) requires apportionment of damages in “negligence” actions, the statute defines negligence in such a way that embraced the County’s action against the engineer since an engineer is considered a “professional” and the statute provides for “professional malpractice whether couched in terms of contract or tort.” The court then applied a holistic approach and concluded that the contract actions against the parties fell under the “umbrella” of the “negligence action” against the engineer, so that the allocation of fault was appropriate.
The decision is significant where often plaintiffs claim indivisible injuries in construction matters arising out of multiple breaches of contract. This might include an owner plaintiff asserting breach claims against the designer and builder, as was the case in Broward County. Or the circumstance might arise where a builder asserts negligence and breach of contract actions against downstream subcontractors, claiming each of the subcontractors caused an indivisible injury to the contractor. Whatever the circumstance, Broward County suggests an expansive interpretation of Fla. Stat. §768.81 is appropriate, prohibiting claimants from arguing joint and several liability applies in indivisible injury matters. Instead, defendants in construction matters should look to Broward County as the basis to argue any judgment against them should be based on allocation of fault and not joint and several liability.