On December 9, 2014, Florida Representative Kathleen Passidomo introduced House Bill 87, a bill aimed at amending Florida’s Construction Defect Statute. The bill contains several changes which could have a significant impact on construction defect claims in Florida.
Under the amendments to the notice requirements, a claimant would be required not only to describe the nature of the defects and resulting damages, but to provide the specific location of each alleged defect so that responding parties can locate the alleged defects “without undue burden.” Further, a claimant would be required to identify specific provisions of the building code, project plans, project drawings, project specifications, or other documentation, information, or authority that serve as the basis of the claim for each alleged construction defect. The bill also provides a consequence for non-compliance with the notice requirements. Failure to provide the required information would create a legal presumption that the notice is defective.
Additionally, the bill seeks to create penalties against a party that files a frivolous legal action. For instance, under the proposed amendments, if an owner files an action that includes a claim previously resolved by payment or repairs (or both), that portion of the action would be considered frivolous and stricken from the action. Further, upon motion of the party served with the action, the owner would be required to pay the costs incurred in defending the claim plus attorney’s fees.
The bill also authorizes monetary sanctions against a claimant who is found to be solely at fault for the defects complained of. Under the proposed changes, if a court finds that a claimant or the claimant’s attorney knew or should have known that the material facts or existing law did not support the claim when first presented, the claimant may be required to pay the opposing party’s costs of inspection, investigation, testing, related costs, and attorney’s fees. However, such monetary sanctions may not be awarded against the claimant’s attorney if he or she acted in good faith based on the representations of his or her client.
Finally, the bill revises the requirements relating to the production of documents by specifically limiting the exchange of expert reports to those that are “nonprivileged.” However, the proposed amendments add to the documents that must be produced by a claimant by requiring the production of maintenance records and other documents “related to the discovery, investigation, causation, and extent of the alleged defect … and any damages resulting therefrom.” Further, parties may face additional costs in the exchange of documents, as the bill requires the requesting party to offer to pay not only the reasonable costs of production but “related fees” as well.
If the bill becomes law, it will have significant impacts on construction defect claims in Florida. There has been consistent criticism of the Construction Defect Statute since it took effect in 2003 due to the fact that it lacks penalties for noncompliance. The proposed changes would add teeth to the Statute and perhaps help to reduce frivolous construction defect claims. On the other hand, it may have a chilling effect on legitimate claims due to the risk involved and the expense of more thorough pre-suit investigations. This is a bill that those in the construction industry should watch.
To read the full text of the bill, click here:http://www.myfloridahouse.gov/Sections/Documents/loaddoc.aspx?FileName=_h0087__.docx&DocumentType=Bill&BillNumber=0087&Session=2015