COURT FINDS ABATING CASE ACCORDING TO CHAPTER 558 WOULD BE FUTILE WHEN MATERIAL SUPPLIER FAILS TO SEEK INSPECTION OF ALLEGED CONSTRUCTION DEFECTS

By: Michael Stearns, Esq. Stearns, Roberts & Guttentag, LLC

In Banner Supply Co. v. Harrell, 2009 WL 4927912 (Fla. 3rd DCA 2009) the court considered the issue of whether a material supplier could abate an owner’s lawsuit for alleged construction defects because of the owner’s failure to comply with the notice and opportunity to inspect requirements of Florida Statute, Chapter 558 (“Chap. 558”).

Jason and Melissa Harrell (“Owners”) filed their initial complaint on February 3, 2009, as lead plaintiffs in a class action lawsuit, against Banner Supply Co. (“Material Supplier”) seeking damages allegedly caused by the installation of defective Chinese drywall in their new residence. The initial complaint asserted only claims for personal injury, not property damage, due to the Chinese drywall. Although Chapter 558 does not apply to claims for personal injury, the Owners also served Material Supplier with a letter advising it of notice of the alleged construction defects under Chapter 558 simultaneously with the filing of the lawsuit.

Approximately one month after filing the initial lawsuit, Owners filed an amended complaint asserting a claim for property damage due to the alleged defective drywall. The new claim for property damage was within the scope of Chapter 558. Material Supplier filed a motion to abate the lawsuit pursuant to Chapter 558. Chapter 558 requires a suit to be abated if the Owner has not provided the contractor at least 60 days (120 for an association with 20 or more parcels) to follow the procedures in Chap. 558 prior to filing the lawsuit. The Trial Court denied by the trial court. Material Supplier appealed.

The Appellate Court applied the rule that if the performance of a condition precedent or task that must be performed prior to a lawsuit would be futile, then its performance may be excused. Fla. Stat. Section 558.004 generally requires that prior to an owner filing a lawsuit for construction defects, the owner must provide contractor with written notice of the defect and an opportunity for the contractor to inspect and correct the defect. If the Owner files suit, but has not followed the requirements of Fla. Stat. Section 558, the contractor can move to abate the action, until the notice and opportunity to cure provisions of the Chap. 558 have been satisfied.

In this case, Owners failed to follow the statutory requirements of notice and opportunity to inspect prior to filing their lawsuit. Owners gave “notice” at time of filing the initial complaint, but for claims for personal injuries that were not subject to Chapter 558. Owners’ invited inspection, but Material Supplier never attempted to comply with the Chap. 558 and/or to inspect the property even after the amended complaint with construction defects and damages within the scope of Chap. 558 was served. However, it did file a motion to abate and wait until the hearing. By the time Material Supplier’s motion to abate was heard by the trial court, more than sixty days had passed in which Material Supplier could have inspected the Project and followed the procedures in Chap. 558. Therefore, the trial court held that abatement would have been futile or unnecessary. Material Supplier had the opportunity to comply with the requirements of Chapter 558 and was given the opportunity to timely inspect and it chose not to do so. Thus, the Appellate Court affirmed the Trial Court’s ruling that the Motion to Abate was denied.

This case illustrates the notice and opportunity to cure provisions of Florida Statute, Chap. 558. Chapter 558 was amended recently to apply to a broad range of construction defect cases unless the parties opt out of the requirements of the Statute. Under Chap. 558, the Owner-Claimant is required to serve written notice of the alleged defects, among other things, to the Contractor at least 60 days (120 for an association with 20 or more parcels) prior to filing a lawsuit based on the defects. Within 30 days of the written notice the contractor may inspect the alleged defects and determine whether it will, among other things, correct the alleged defects, pay a monetary settlement, perform some combination of the two, or proceed to litigation. Note that the Court in this case did not decide that Chap. 558 applied, but simply that abating the case to allow the parties to attempt to follow the Chap. 558 procedures would be futile considering that the material supplier did not attempt to inspect the alleged defect upon notice or otherwise follow Chap. 558.