Though well-intentioned as a means to resolve construction defect disputes prior to litigation, the application of Florida Statute Chapter 558’s procedures can be unwieldy in practice, with cases interpreting its provisions emanating from Florida’s courts in a piecemeal fashion. Abatement Pending a Claimant’s Compliance with Chapter 558 May Be Futile. Under Chapter 558 a claimant must serve written notice of a claim on the applicable contractor, subcontractor, supplier or design professional at least sixty (60) days before filing a construction defect action. If the claimant fails to do so and proceeds with a legal action, the case may be abated pending compliance with the Chapter’s provisions. In one case the claimant had given the defendant an opportunity to inspect the claimed defect but did not follow Chapter 558’s procedure of serving a written notice of claim prior to the filing of its action.
The defendant, in turn, did not invoke the Chapter 558 procedure and also did not follow up on the claimant’s offer to inspect the defect. When the claimant filed suit, the defendant moved to abate the action on the ground that the claimant had not complied with Chapter 558. The motion to abate was set for hearing more than sixty days after the defect-related pleading was filed. Under this set of circumstances the court found that abatement would be futile. With the defendant having chosen not to inspect or follow Chapter 558’s procedures, the court found that the relief sought via the defendant’s motion to abate would have been useless and allowed the case to progress even though the claimant itself had never followed the pre-suit procedure outlined in Chapter 558.
Non-Compliance with Chapter 558 Does Not Preclude a Plaintiff from Raising Affirmative Defenses
If an owner terminates a construction contract without a legally sufficient reason or prevents the contractor from completing the contract, the measure of the owner’s damages is generally the reasonable cost of making the work conform to the contract. Under such a circumstance, the owner can use the reasonable cost for doing so as a setoff for any sums it may owe the contractor arising from the owner’s breach of contract. This right of setoff exists even if the owner never complied with Chapter 558.
The remedy for non-compliance with Chapter 558 is simply an abatement of the action, as one does not forfeit substantive rights as a penalty for noncompliance. As such, a claimant under Chapter 558 does not forfeit its right to seek offset damages in a case where it terminated a construction contract without a legally sufficient reason or prevented the contractor from completing the contract.
Specify the Defect and the Damages it Has Caused
Under Chapter 558 a notice of claim must describe the claim in reasonable detail sufficient to determine the general nature of each alleged construction defect and also must contain a description of the damage or loss resulting from the defect, if known. If a claimant fails to specifically describe the defect and the damages arising from that defect in its original notice of claim, and continues to fail to describe these items in its pleadings, it may be barred from presenting any evidence relating to non-noticed defects and damages.
For instance, where a plaintiff made a claim relating to missing lightweight concrete in a roof but did not indicate that it would seek recovery for additional roof defects or for the costs of replacing the roof, the plaintiff was not allowed to present evidence as to other defects on the roof and could not seek damages for the replacement of the roof.
Owner-Contractors Seeking to Make a Claim for a Construction Defect are Outside the Scope of Chapter 558
An entity that is both the property owner and the contractor for a condominium project is not a “claimant” for purposes of Chapter 558 and as such does not have to comply with Chapter 558 in the event it wishes to make a claim for construction defects. The statutory definition for “claimant” specifically excludes contractors from its ambit, and subcontractors, suppliers and design professionals are similarly excluded from the definition as well.
As more Chapter 558 issues are brought before the courts, a clearer path will begin to emerge which owners and contractors can follow to presumably avoid unnecessary litigation related to workmanship and defect claims – or so the legislature hopes.