Legal Updates for Construction Litigation
Fourth Circuit Requires Apportionment of Damages in Construction Matter
The Fourth Circuit’s recent ruling in Broward County v. CH2M Hill, Inc., et al., 4D18-3401 (Fla. 4th DCA 2020), requires the apportionment of damages in construction matters, even where the claim is for breach of contract.
The County contracted with CH2M Hill, Inc. to provide engineering services for the design of improvements at the Fort Lauderdale Airport in compliance with the latest FAA requirements, including a 20-year life-span for the runway. Construction was done by others. After construction, design and construction errors led to rutting. As a result, the County hired a new design and construction team to redesign and rebuild a much more robust runway and withheld funds from the original contractor. The cost for the redesign and construction far outweighed the original work.
The original contractor filed suit against the County for breach of contract and failure to provide prompt payment. In response, the County filed a cross claim against the contractor for defective work and a suit against CH2M Hill (and others) for breach of contract and indemnity. The County alleged the design failed to meet the 20-year life-span requirement of the FAA, as required under CH2M Hill’s contract, and that CH2M Hill owed the County indemnity for the defective work of the contractor.
At trial, the underlying court ruled the redesign and construction of the runway was the result of breaches by both CH2M Hill and the contractor and allocated damages between the defendants.
The County appealed the final judgment, attacking the court’s allocation of fault and arguing comparative fault is not applicable in breach of contract cases. The County argued that, instead, the court should have applied joint and several liability as separate breaches of contract caused a single indivisible injury.
The Court of Appeals rejected the arguments of the County and held the apportionment of damages by the underlying court utilizing comparative fault was proper. As a result, the allocation of damages by the underlying court per § 768.81, Florida Statutes, was also proper. However, the Court of Appeals did reverse on the amount of damages.
The Court of Appeals specifically affirmed that Part II of Chapter 768, Florida Statutes, applies to any action for damages, whether couched in tort or contract. Further, the Court of Appeals noted that, although § 768.81(3), Florida Statutes, requires apportionment of damages in “negligence” actions, negligence is defined in the statute as:
. . . without limitation, a civil action for damages based upon a theory of negligence, strict liability, products liability, professional malpractice whether couched in terms of contract or tort, or breach of warranty and like theories. The substance of an action, not conclusory terms used by a party, determines whether an action is a negligence action.
§ 768.81(1), Florida Statutes (emphasis added).
This new ruling out of the Fourth Circuit continues the trend in Florida requiring apportionment of damages in construction cases, throwing aside the previous use of joint and several liability.
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