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Florida Public Bidders Must Understand the “Cone of Silence”

In Florida, public agencies typically have restrictions on bidder communications with public officials and employees. For example, an agency may have a prohibition on communicating with anyone other than a designated representative during the competitive solicitation process. These restrictions are often referred to as a “Cone of Silence”. Violations of the Cone of Silence can result in disqualification of the bidder. The purpose of a Cone of Silence is to prevent bidders or their representatives from lobbying decision makers while designated staff are afforded the opportunity to evaluate the bids or proposals in accordance with the terms of the solicitation. The restriction on communications may, for example, terminate when the agency’s board or commission meets to make a final decision. At that time the bidder may be able to address the board or commission directly before it makes a final award decision. While the restriction is in place, however, bidders must...

Safety First: Public Safety vs. Due Process

Does public safety take precedence over due process in a pending litigation? An on-going construction defects case in Las Vegas, Nevada recently addressed this concern.  Clark County District Judge Elizabeth Gonzalez recently approved a petition to demolish the Harmon Hotel—a never-opened 26-story structure fronting Las Vegas Boulevard between the Crystals shopping center and the Cosmopolitan resort—acknowledging the public safety risk if the building were to collapse during an earthquake. The Harmon was originally was designed to be a 40-story boutique hotel but has sat unfinished, as a costly Cirque du Soleil billboard since construction was halted in 2010 after the discovery of defects involving missing or improperly installed reinforcing steel.  The owner, CityCenter, blames Tutor-Perini, the general contractor and its subcontractors saying demolition is the surest way to deal with the dangerous structure.  The general contractor was sure the Harmon could be repaired and claims CityCenter is just trying to get rid...

New Public Records Requirements for Contracts with Public Agencies

The Florida Legislature recently enacted Florida Statutes, Section 119.0701 (Chapter 2013-154) which requires that contracts for services with public agencies, where the contractor is acting on behalf of the agency, must provide a provision mandating compliance with the public records laws.  Specifically, Section 119.0701(2) mandates that the provision require the contractor to: (a) Keep and maintain public records that ordinarily and necessarily would be required by the public agency in order to perform the service. (b) Provide the public with access to public records on the same terms and conditions that the public agency would provide the records and at a cost that does not exceed the cost provided in this chapter [119] or as otherwise provided by law. (c) Ensure that public records that are exempt or confidential and exempt from public records disclosure requirements are not disclosed except as authorized by law. (d) Meet all requirements for retaining public records and transfer,...

What Owners Need To Know About Florida Statute §558.0035

Effective July 1, 2013, Florida Statutes Chapter 558 was amended to provide a “safe harbor” to individual design professionals for claims of negligence. Specifically, Florida Statutes §558.0035 states that any design professional “who is employed by a business entity or is an agent of a business entity is not individually liable for damages resulting from negligence occurring within the course and scope of a professional services contract.” Florida Statute §558.0035 also expands the definition of “design professionals” to include geologists in addition to architects, interior designers, landscape architects, engineers and surveyors. These changes are limited to individual design professionals only, not business entities, and the statute covers only economic damages. The new law does not limit claims for personal injury or property damage. It is also worth noting that §558.0035 will not limit professional negligence claims by parties who have no contract with an individual design professional and/or his or her...

Florida courts’ application of the “new” economic loss rule since Tiara Condominium Ass’n, Inc. v. Marsh & McLennan, Cos., Inc.

The Florida Supreme Court’s March 7, 2013 decision in Tiara Condominium Ass'n, Inc. v. Marsh & McLennan, Cos., Inc., 110 So. 3d 399 (Fla. 2013), limited application of the economic loss rule [a judicially created doctrine that sets forth the circumstances under which a tort claim is prohibited if the only damages suffered are economic losses] to product liability matters. So, how have Florida courts analyzed the application of the economic loss rule since this March 7, 2013 decision? In short, Florida courts appear to be allowing non-contractual claims, such as fraud, negligence, negligent misrepresentation, and breach of fiduciary duty to proceed, notwithstanding the existence of a contractual relationship. F.D.I.C. v. Floridian Title Group Inc., 2013 WL 5237362 (S.D.Fla. Sept. 17, 2013).(denying a defendant’s motion to dismiss breach of fiduciary duty and negligence claims based upon the economic loss rule and rejecting an argument that these claims were in reality inextricably intertwined...

Consequential Damages in Green Construction Lawsuits

By Mark J. Stempler

A primary concern in any lawsuit involving green construction is damages.  One party will claim it has been harmed and will typically demand money or specific performance.   There are different types of damages that can be sought including actual damages, future damages, punitive damages, and consequential damages.  That last category raises some unique issues in a green building lawsuit.
 
Consequential damages are typically defined in Florida as those that do not necessarily, but may directly or indirectly, result from the injury for which compensation is sought.  Consequential damages can include items like loss of use, lost profits, loss of rental income, etc.  These are all issues in the green building context too, but determining the value of these damages may be more difficult to define.  For example, suppose an owner is seeking green building certification for an apartment complex.  If the contractor or other professional responsible for attaining such certification does not get the certification, the owner may be entitled to consequential damages for lost rent for the units.  But, the owner could encounter difficulties in proving the amount of damages.  The owner likely believes that green buildings command higher rents than non-green buildings, but that is not guaranteed.  The burden will be on the owner to prove what that added value would have been.  Or, if the failure to achieve the green certification cause the owner to miss related tax credits or grants, the owner may have a claim for those values.  It will, of course, depend on what representations were made in the contract.  In fact, the loss of tax credits was the issue in one of the first reported green construction lawsuits.  In that case, which eventually settled, the contract contained a waiver of consequential damages.  Another potential scenario is when the project does not deliver the energy cost savings promised to the owner, or promised by an owner to a tenant for example.  Those lost savings may also provide a basis for a consequential damages claim.  These examples illustrate the need for clear and specific language in a construction contract regarding each parties’ representations, expectations and responsibilities.

The Pitfalls of Professional Liability Insurance Coverage

Insurance coverage can generally be an invaluable resource when things go wrong on a construction project. However, in the case of professional liability policies, there are several issues that deserve special attention when negotiating with a design professional, to make sure the desired coverage is available when you need it....