Articles Posted in Contract Law

cabinet water damageIn the recent case of Prepared Insurance Company v. Gal, the plaintiff appealed a lower court’s decision regarding a real estate contract and the liabilities associated with it. The insured was a homeowner who discovered that his kitchen sink leaked water, which caused damage to his custom-made cabinets. The insured filed a claim with the insurance company, which sent an adjuster to assess the damage. The report concluded that the cost to fix the cabinets would be $8,653.47, but this estimate did not include the general contractor’s overhead and profit.

A cabinetry expert also assessed the damage at the request of the insurer. He concluded that it would cost roughly $2,500 to fix the damage or almost $20,000 to replace the cabinets.  This cost estimate did not include the price of an electrician or plumber, who would both be necessary to finish the job. It also omitted the estimated cost for hiring a general contractor.

The insurance company tendered payment for $6,153.47 to the insured, reflecting an $8,653.27 cost less the insured’s deductible. The insured sued, claiming the insurer undervalued the damage because it did not pay for the replacement of the cabinets or the cost of a general contractor. In the meantime, the insured filed another claim for damage to the cabinets caused by a leaking air conditioner unit. The insured had a general contractor inspect the loss. This expert testified that the replacement of the cabinets would cost $107,902.50, due to their unique nature. This estimate failed to apportion the damage between the first leak and the second leak.

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sinkholeIn Tower Hill Signature Insurance, ETC v. Speck, et al., a construction company appealed a final judgment entered against it at the conclusion of a jury trial that ordered the defendant to pay over $160,000 in costs to make subsurface repairs and stabilization repairs to the homeowners’ property.

The homeowners’ claim against the insurance policy occurred in January 2010. After the insurance company completed an initial investigation, it denied the claim and rescinded the homeowners’ policy, stating that the home on the property had unrepaired damage in existence at the time the policy was issued. The homeowners then sued the insurance company for breach of contract, and in response the insurer asserted an affirmative defense that the contract was void because the homeowners failed to disclose a material fact–the unrepaired damage.

In 2001, the homeowners had made another claim with a prior insurer regarding sinkhole damage for the same property. The claim stated that the house was a total loss and that they were entitled to their policy limit of $330,000. The insurer retained an engineer, who stated that $166,000 in below ground damages was appropriate. According to the homeowners, an additional $64,000 for above ground repairs was needed. The parties settled the claim for $260,000. Documents indicated that the homeowners only spent $15,000 on repairs to the home and that the rest was used to pay two mortgages on the property.

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black ticking clockOne of the most important considerations in any lawsuit is the statute of limitations. This law operates to bar certain claims that are not filed within the statutorily defined window. For each type of claim, the state legislature will set a time limit on when it can be filed, usually consisting of a number of years. The statute of limitations runs from the date that the harm occurred or accrued.

However, there are a number of legally recognized doctrines that can affect the statute of limitations. In cases involving personal injury, for example, courts often apply a theory called discovery tolling. Since many individuals are unaware that they have suffered physical injuries related to another party’s malfeasance until a doctor informs them about the injuries, or until the symptoms manifest, it can be hard to know when the wrong has occurred. Under discovery tolling, the statute of limitations does not begin to run until the date that the plaintiff knew or should have known that his or her injuries were the result of another person’s negligence.

In the recent case of Riverwalk at Sunrise Homeowners Association v. Biscayne Painting Corporation, the Florida Fourth District Court of Appeal had the occasion to consider the application of a statute of limitations. In this case, a homeowners association appealed a lower court’s ruling that its negligence claim against defendant Sherwin-Williams was time-barred.

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5913334509_8382547a05_bA recent case involving a fatal car accident presented detailed questions regarding the scope of an insurance company’s duties and requirements to its policyholders and other individuals involved in a motor vehicle accident. In Geico General Ins. Co. v. Lepine, the surviving wife of a man killed in a car accident filed a complaint against the driver and his car insurance company, seeking damages on behalf of her husband’s estate and herself. In her complaint, the plaintiff alleged that the defendant’s insurer reneged on a verbal agreement to pay the plaintiff $100,000, which reflected the full amount of the defendant’s policy limits. The plaintiff based these claims on a breach of contract theory.

The insurance company filed a motion to dismiss the portion of the plaintiff’s claims involving the breach of contract claims. The insurer contended that Florida Statutes Section 627.4136 prohibited the plaintiff from directly filing a cause of action against the defendant’s insurance company. This provision, also called the non-joinder statute, prohibits a non-insured individual from filing a direct lawsuit against the insurance company without obtaining a settlement or verdict against the insured party beforehand.

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plaeamelia-thumb-360x270-94095Recently, the Florida First District Court of Appeal ruled that a commercial real estate tenant has the right to continue its exclusivity provision in each of its lease options. In Amelia Island Restaurant II, Inc. v. Omni Amelia Island, LLC, the plaintiff operated and maintained a restaurant located at the Amelia Island Plantation in Nassau County, Florida. In 2012, the plaintiff and the property owner were unable to agree on the terms of a lease extension. The parties’ original lease agreement contained a provision prohibiting the landlord from allowing another full-service restaurant to operate in the same shopping center. The plaintiff argued that this exclusivity provision would remain in effect during a renewed lease term, while the landlord argued that it would not remain in effect.

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file0001849487704Florida’s Second District Court of Appeal recently handed down an opinion agreeing with other appellate authority in the state that a resident of a nursing home is not bound by an arbitration agreement executed by the resident’s family member at the time of the resident’s admission to the facility. In Sovereign Healthcare of Tampa v. Estate of Yarawsky, 2D13-2083, an elderly nursing home resident had lived at the plaintiff’s facility for 10 months prior to his death. Following his death, the decedent’s estate filed a lawsuit against the nursing home, alleging that the decedent died due to the nursing home’s negligence. Shortly thereafter, the nursing home filed a motion to compel arbitration on the basis that the resident admission forms and financial agreement executed at the time of the decedent’s admission contained an arbitration agreement.

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Contract-300x200A liability release does not need to include language that specifically references “negligence” or “negligent acts” for it to release a defendant from liability arising from its own negligence, the Florida Supreme Court held recently.

The case was a personal injury action filed by a woman injured while on vacation with her family. The family was visiting a resort owned by a nonprofit organization that provided vacations to the families of seriously ill children. On applying for the vacation, the family signed a general release applicable to  all “damages or losses or injuries” sustained while engaging in a number of activities. It also released the defendant from “any and all claims and causes of action of all kinds.” The release never specifically mentioned the defendant’s negligence.

The plaintiff was injured after a pneumatic lift collapsed, and she filed suit against the nonprofit organization and other defendants. The nonprofit defendant moved for summary judgment on the basis of the release. The trial court denied the motion in part because of public policy. The reasoning is that, in order for a party to be released from its own negligence, all those involved should have a clear understanding of the agreement. After a trial, the jury returned a verdict for the plaintiffs and awarded just over $70,000 in damages.

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contract signatureReal estate sale and lease contracts can be extremely complicated, depending on the circumstances of the transaction. When large amounts of money are exchanged, and all the details of a real estate deal are taken into account, it is no surprise that disputes often arise in these situations. It is paramount to have a capable attorney who can draft, review, or negotiate a real estate contact on your behalf.

Even with a written contract, parties will frequently make oral changes or modifications. There are special rules when it comes to real estate contracts, however. In one case, the Florida Supreme Court has ruled that modifications made to a real estate contract weren’t enforceable unless they were made in writing and signed by the parties. Even if there was a verbal promise to the contrary, the parties were only bound to their written agreement.

This issue arose in DK Arena, Inc. v. EB Acquisitions I, LLC, a case involving a contract for the sale of property located in Florida. The parties entered into a contract to buy the property for the amount of $23 million. The real estate contract required a $1 million deposit to be deposited in escrow, and allowed the buyer to have 60 days to inspect the property and conduct due diligence. The contract also contained a provision stating that modifications to the contract were not enforceable unless they were in writing, signed and delivered.

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