Category: News

Construction Defect Claim Statute of Repose (HB 377) Clarified

On June 14, 2017, Governor Rick Scott signed HB 377, making it law effective July 31, 2017. HB 377 relates to the 10-year statute of repose relative to construction defect claims. The statute repose is the absolute bar precluding claims for construction defects on projects 10-years-old or older. Specifically, Fla. Stat. §95.11(3)(c) states that, regardless of the latency of a defect, no claim for construction defects can be asserted if brought beyond ten (10) years of the latest of actual possession by the owner, issuance of a certificate of occupancy, abandonment of construction, or completion of the contract. “Completion of the contract” had, for many years, gone undefined and was the subject of much litigation and arguably opened the construction industry to claims beyond the ten (10) year statute of repose. Then, in 2015, a Florida Court in Cypress Fairway Condominium v. Bergeron Construction Co., Inc., 164 So.3d 706 (Fla. 5th DCA 2015) defined “completion of the contract” as the date the owner issued final payment. But what happens in cases where the owner endlessly negotiates final payment, refuses to make the final payment, or cannot make final payment? Arguably, the statute of repose would lag on and on to the detriment of the contractor in those circumstances. The Cypress Condominium case would also arguably allow unscrupulous owners to intentionally withhold final payment simply to extend the statute of repose on any potential defect claims.

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The Slavin Defense’s Application to a Contractor’s Claims Against Its Subcontractors

Oftentimes, subcontractors raise the so-called Slavin Doctrine as an affirmative defense to third-party indemnity claims brought by general contractors in construction defect matters. Under the Slavin Doctrine, a contractor cannot be held liable for injuries sustained by third parties when the injuries occur after the contractor completed its work, the owner of the property accepted the contractor’s work, and the defects causing the injury were patent.1 Typically, subcontractors argue the Slavin Doctrine excuses a defective construction claim if the evidence concludes 1) a third party claims injury or damages after the work is complete, 2) the property owner accepted the contractor’s work, and 3) the defect causing the injury was apparent, or patent. For example, the Slavin Defense might be raised by a general contractor in response to a condominium association’s claim that the windows suffer from condensation and require repair or replacement, if it can be shown the developer accepted the windows and approved their installation, the contractor completed the work, and the condensation issue is apparent. However, oftentimes subcontractors, too, assert the defense against the general contractor that is seeking indemnity due to an owner’s claims of defective construction, arguing the elements of the defense are met and, therefore, the subcontractor is absolved of the claims brought by the general contractor.

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