Gang:  Sorry.  One more thing.  See attached the September case law
update from the Surety & Insurance subcommittee.  Arnie.

Arnold D. Tritt, Jr.
Board Certified Construction Attorney

707 Peninsular Place
Jacksonville, Florida 32204
Phone (904) 354-5200
Facsimile (904) 354-5256
Arnold.Tritt@atritt.com
www.tritthenderson.com

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Hi Arnie, to whom do I speak to change my email address for the listserv? I
have another I use for this kind of thing so it's not so distracting---
thanks!

Peyton White Lumpkin, Esq., LEED AP

The Lumpkin Law Firm P.A.

2655 Le Jeune Road

Fifth Floor

Coral Gables, FL 33134

Tel: (305) 667-1808

Fax: (305) 444-5366

peytonwhitelumpkin@bellsouth.net

thelumpkinlawfirm.com

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From: constructionlaw-bounces@lists.flabarrpptl.org
[mailto:constructionlaw-bounces@lists.flabarrpptl.org] On Behalf Of Arnold
D. Tritt, Jr.
Sent: Monday, September 12, 2011 10:49 AM
To: constructionlaw@lists.flabarrpptl.org
Subject: [RPPTL-constructionlaw] Construction Law Committee -: Surety &
Insurance Subcommittee Report

Gang:  Sorry.  One more thing.  See attached the September case law update
from the Surety & Insurance subcommittee.  Arnie.

Arnold D. Tritt, Jr.

Board Certified Construction Attorney

707 Peninsular Place
Jacksonville, Florida 32204

Phone (904) 354-5200
Facsimile (904) 354-5256
Arnold.Tritt@atritt.com  mailto:%5Be-mail%5D
www.tritthenderson.com http://www.tritthenderson.com/

CONFIDENTIALITY NOTICE: The information and all attachments contained in
this electronic communication are legally privileged and confidential
information, subject to the attorney-client privilege and intended only for
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recommending to another party any transaction or matter addressed in this
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Disclaimer regarding Uniform Electronic Transactions Act ("UETA") (Florida
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contract or agreement, UETA does not apply to this communication; contract
formation in this matter shall occur only with manually-affixed original
signatures on original documents.

I represent a contractor who furnished ground stabilization related to sinkhole activity.  My client has a lien on the property for the work.  The insurance company has cut a check payable to the owner, my client, and the mortgage lender.  The owner’s attorney is holding the check but is trying to get the insurance company to drop the owner’s name from the check and reissue a new check (I suppose to avoid any involvement in a dispute between my client and the lender for the insurance proceeds).  The owner is also considering interpleader.  The lender has requested that the owner endorse the check and send it to them and then they will consider what to do with it from there.  The owner does not want to do that because they feel the lender will not release the funds to my client and then the owner still has liability to my client.  The mortgage was recorded before the NOC for my client’s work.  The mortgage provides that insurance proceeds will be applied to restoration or repair of the property if it is economically feasible and lender’s security is not lessened.  Any suggestions on how to proceed from this point?

Andrea M. Fair-Purcell
Board Certified Construction Attorney
▬▬▬▬▬▬▬▬▬▬▬▬
FAIR•LAW•PLLC
▬▬▬▬▬▬▬▬▬▬▬▬
13046 Racetrack Road #236
Tampa, FL 33626
(813) 412-1077 phone
(877) 879-4990 fax
www.fairconstructionliens.com

The contents of this e-mail message and any attachments are intended solely for the addressee(s) named in this e-mail message. This communication is intended to be and to remain confidential and may be subject to applicable attorney/client and/or work product privileges. If you are not the intended recipient of this e-mail message, or if this e-mail message has been addressed to you in error, please immediately alert the sender by reply e-mail and then delete this e-mail message and its attachments. Do not deliver, distribute or copy this e-mail message and/or any attachments and if you are not the intended recipient, do not disclose the contents or take any action in reliance upon the information contained in this communication or any attachments.

Interpleader or Dec. Action.  It doesn’t sound like the insurance company and the lender will agree to very much. Let a judge decide.

From: constructionlaw-bounces@lists.flabarrpptl.org [mailto:constructionlaw-bounces@lists.flabarrpptl.org] On Behalf Of Andrea Fair
Sent: Thursday, September 29, 2011 9:58 AM
To: RPPTL constructionlaw
Subject: [RPPTL-constructionlaw] question re: priority of claims to insurance proceeds

I represent a contractor who furnished ground stabilization related to sinkhole activity.  My client has a lien on the property for the work.  The insurance company has cut a check payable to the owner, my client, and the mortgage lender.  The owner’s attorney is holding the check but is trying to get the insurance company to drop the owner’s name from the check and reissue a new check (I suppose to avoid any involvement in a dispute between my client and the lender for the insurance proceeds).  The owner is also considering interpleader.  The lender has requested that the owner endorse the check and send it to them and then they will consider what to do with it from there.  The owner does not want to do that because they feel the lender will not release the funds to my client and then the owner still has liability to my client.  The mortgage was recorded before the NOC for my client’s work.  The mortgage provides that insurance proceeds will be applied to restoration or repair of the property if it is economically feasible and lender’s security is not lessened.  Any suggestions on how to proceed from this point?

Andrea M. Fair-Purcell

Board Certified Construction Attorney

▬▬▬▬▬▬▬▬▬▬▬▬

FAIR•LAW•PLLC

▬▬▬▬▬▬▬▬▬▬▬▬
13046 Racetrack Road #236
Tampa, FL 33626
(813) 412-1077 phone
(877) 879-4990 fax
www.fairconstructionliens.com

The contents of this e-mail message and any attachments are intended solely for the addressee(s) named in this e-mail message. This communication is intended to be and to remain confidential and may be subject to applicable attorney/client and/or work product privileges. If you are not the intended recipient of this e-mail message, or if this e-mail message has been addressed to you in error, please immediately alert the sender by reply e-mail and then delete this e-mail message and its attachments. Do not deliver, distribute or copy this e-mail message and/or any attachments and if you are not the intended recipient, do not disclose the contents or take any action in reliance upon the information contained in this communication or any attachments.

Andrea,

You may want to make the owner and lender aware that your client also has a lien on the insurance proceeds pursuant to F.S. 713.32.  It sounds like your lien is inferior to the lien of the lender, but the lender also needs to be made aware of your claims (against the proceeds and the property).  The lender should cooperate if it has been timely paid.  If not ….  Interpleader will likely end up in the owner seeking fees.  If you file your action to enforce against the property and the insurance proceeds and you are successful, the owner should not be able to claim fees. See 457 So.2d 597.

Larry R. Leiby, Esq.
Malka & Kravitz, P.A.
1300 Sawgrass Corp. Pkwy., Suite 100
Ft. Lauderdale, FL  33323
Phone:  954-514-0984
Fax:      954-514-0985

e-mail:  leiby@mkpalaw.com

Board Certified in Construction Law
Fla. S. Ct. Certified Circuit Court Civil Mediator
Fellow, College of Commercial Arbitrators

From: constructionlaw-bounces@lists.flabarrpptl.org [mailto:constructionlaw-bounces@lists.flabarrpptl.org] On Behalf Of Andrea Fair
Sent: Thursday, September 29, 2011 9:58 AM
To: RPPTL constructionlaw
Subject: [RPPTL-constructionlaw] question re: priority of claims to insurance proceeds

I represent a contractor who furnished ground stabilization related to sinkhole activity.  My client has a lien on the property for the work.  The insurance company has cut a check payable to the owner, my client, and the mortgage lender.  The owner’s attorney is holding the check but is trying to get the insurance company to drop the owner’s name from the check and reissue a new check (I suppose to avoid any involvement in a dispute between my client and the lender for the insurance proceeds).  The owner is also considering interpleader.  The lender has requested that the owner endorse the check and send it to them and then they will consider what to do with it from there.  The owner does not want to do that because they feel the lender will not release the funds to my client and then the owner still has liability to my client.  The mortgage was recorded before the NOC for my client’s work.  The mortgage provides that insurance proceeds will be applied to restoration or repair of the property if it is economically feasible and lender’s security is not lessened.  Any suggestions on how to proceed from this point?

Andrea M. Fair-Purcell
Board Certified Construction Attorney
▬▬▬▬▬▬▬▬▬▬▬▬
FAIR•LAW•PLLC
▬▬▬▬▬▬▬▬▬▬▬▬
13046 Racetrack Road #236
Tampa, FL 33626
(813) 412-1077 phone
(877) 879-4990 fax
www.fairconstructionliens.com

The contents of this e-mail message and any attachments are intended solely for the addressee(s) named in this e-mail message. This communication is intended to be and to remain confidential and may be subject to applicable attorney/client and/or work product privileges. If you are not the intended recipient of this e-mail message, or if this e-mail message has been addressed to you in error, please immediately alert the sender by reply e-mail and then delete this e-mail message and its attachments. Do not deliver, distribute or copy this e-mail message and/or any attachments and if you are not the intended recipient, do not disclose the contents or take any action in reliance upon the information contained in this communication or any attachments.

Andrea,

Take a look at 713.32 addressing an insurer's obligations under this scenario.

Steven F. Thompson, Esq.
Thompson & Brooks
412 E. Madison St., Ste 900
Tampa, Fl. 33602
813-387-1821
Fax 813-387-1824

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From: constructionlaw-bounces@lists.flabarrpptl.org [mailto:constructionlaw-bounces@lists.flabarrpptl.org] On Behalf Of Andrea Fair
Sent: Thursday, September 29, 2011 9:58 AM
To: RPPTL constructionlaw
Subject: [RPPTL-constructionlaw] question re: priority of claims to insurance proceeds

I represent a contractor who furnished ground stabilization related to sinkhole activity.  My client has a lien on the property for the work.  The insurance company has cut a check payable to the owner, my client, and the mortgage lender.  The owner’s attorney is holding the check but is trying to get the insurance company to drop the owner’s name from the check and reissue a new check (I suppose to avoid any involvement in a dispute between my client and the lender for the insurance proceeds).  The owner is also considering interpleader.  The lender has requested that the owner endorse the check and send it to them and then they will consider what to do with it from there.  The owner does not want to do that because they feel the lender will not release the funds to my client and then the owner still has liability to my client.  The mortgage was recorded before the NOC for my client’s work.  The mortgage provides that insurance proceeds will be applied to restoration or repair of the property if it is economically feasible and lender’s security is not lessened.  Any suggestions on how to proceed from this point?

Andrea M. Fair-Purcell

Board Certified Construction Attorney

▬▬▬▬▬▬▬▬▬▬▬▬

FAIR•LAW•PLLC

▬▬▬▬▬▬▬▬▬▬▬▬
13046 Racetrack Road #236
Tampa, FL 33626
(813) 412-1077 phone
(877) 879-4990 fax
www.fairconstructionliens.com

The contents of this e-mail message and any attachments are intended solely for the addressee(s) named in this e-mail message. This communication is intended to be and to remain confidential and may be subject to applicable attorney/client and/or work product privileges. If you are not the intended recipient of this e-mail message, or if this e-mail message has been addressed to you in error, please immediately alert the sender by reply e-mail and then delete this e-mail message and its attachments. Do not deliver, distribute or copy this e-mail message and/or any attachments and if you are not the intended recipient, do not disclose the contents or take any action in reliance upon the information contained in this communication or any attachments.

Per Fla. Stat. s. 627.707(5)(c) governing sinkhole related claims, the insurer is required to obtain the "written approval" of both the insured and the lender prior to making payment to the contractor.  Insurer is legally compelled to either issue the check for endorsement of all or otherwise get the approval in writing of owner and lender prior to making payment to contractor.  Alternatively, per terms of most property policies,  the insurer may issue check jointly to insured and lienholder of record (typically designated as a "loss payee" under the policy).  Either way, the path to resolution obviously runs through the lender.

It would appear that the real issue relates to the value looking forward of the newly stabilized property. If the effect of the stabilization work is to restore the value of the collateral, then the lender should not be able to glom the proceeds.  On other hand, if the property after stabilization is still devalued materially from where it was prior to sinkhole activity, then the lender may have a legitimate claim to the insurance proceeds.  Appears to me that it may come down to some appraisal opinions.  Regrettably, sounds like a real tar baby for all involved.

Michael R. Gibbons  (Bio http://lowndes-law.com/our-people/michael-r-gibbons )
Shareholder
Lowndes, Drosdick, Doster, Kantor & Reed, P.A.
450 South Orange Avenue, 8th Floor
Orlando, FL 32801
Phone: 407-418-6378
Fax: 407-843-4444
email: michael.gibbons@lowndes-law.com mailto:michael.gibbons@lowndes-law.com
website: http://www.lowndes-law.com http://www.lowndes-law.com/

From: constructionlaw-bounces@lists.flabarrpptl.org [mailto:constructionlaw-bounces@lists.flabarrpptl.org] On Behalf Of Andrea Fair
Sent: Thursday, September 29, 2011 9:58 AM
To: RPPTL constructionlaw
Subject: [RPPTL-constructionlaw] question re: priority of claims to insurance proceeds

I represent a contractor who furnished ground stabilization related to sinkhole activity.  My client has a lien on the property for the work.  The insurance company has cut a check payable to the owner, my client, and the mortgage lender.  The owner’s attorney is holding the check but is trying to get the insurance company to drop the owner’s name from the check and reissue a new check (I suppose to avoid any involvement in a dispute between my client and the lender for the insurance proceeds).  The owner is also considering interpleader.  The lender has requested that the owner endorse the check and send it to them and then they will consider what to do with it from there.  The owner does not want to do that because they feel the lender will not release the funds to my client and then the owner still has liability to my client.  The mortgage was recorded before the NOC for my client’s work.  The mortgage provides that insurance proceeds will be applied to restoration or repair of the property if it is economically feasible and lender’s security is not lessened.  Any suggestions on how to proceed from this point?

Andrea M. Fair-Purcell

Board Certified Construction Attorney

▬▬▬▬▬▬▬▬▬▬▬▬

FAIR•LAW•PLLC

▬▬▬▬▬▬▬▬▬▬▬▬
13046 Racetrack Road #236
Tampa, FL 33626
(813) 412-1077 phone
(877) 879-4990 fax
www.fairconstructionliens.com

The contents of this e-mail message and any attachments are intended solely for the addressee(s) named in this e-mail message. This communication is intended to be and to remain confidential and may be subject to applicable attorney/client and/or work product privileges. If you are not the intended recipient of this e-mail message, or if this e-mail message has been addressed to you in error, please immediately alert the sender by reply e-mail and then delete this e-mail message and its attachments. Do not deliver, distribute or copy this e-mail message and/or any attachments and if you are not the intended recipient, do not disclose the contents or take any action in reliance upon the information contained in this communication or any attachments.

This email message has been delivered safely and archived online by Mimecast.  For more information please visit http://www.mimecast.com

Re applicability of Fla. Stat. s. 713.32, it appears that the last sentence of that statute renders the section inapplicable where, as here, there is a mortgagee with a lien perfected prior to recording of NOC.

Michael R. Gibbons  (Bio http://lowndes-law.com/our-people/michael-r-gibbons )
Shareholder
Lowndes, Drosdick, Doster, Kantor & Reed, P.A.
450 South Orange Avenue, 8th Floor
Orlando, FL 32801
Phone: 407-418-6378
Fax: 407-843-4444
email: michael.gibbons@lowndes-law.com mailto:michael.gibbons@lowndes-law.com
website: http://www.lowndes-law.com http://www.lowndes-law.com/

From: constructionlaw-bounces@lists.flabarrpptl.org [mailto:constructionlaw-bounces@lists.flabarrpptl.org] On Behalf Of Larry Leiby
Sent: Thursday, September 29, 2011 10:19 AM
To: RPPTL constructionlaw
Subject: Re: [RPPTL-constructionlaw] question re: priority of claims to insurance proceeds

Andrea,

You may want to make the owner and lender aware that your client also has a lien on the insurance proceeds pursuant to F.S. 713.32.  It sounds like your lien is inferior to the lien of the lender, but the lender also needs to be made aware of your claims (against the proceeds and the property).  The lender should cooperate if it has been timely paid.  If not ….  Interpleader will likely end up in the owner seeking fees.  If you file your action to enforce against the property and the insurance proceeds and you are successful, the owner should not be able to claim fees. See 457 So.2d 597.

Larry R. Leiby, Esq.

Malka & Kravitz, P.A.

1300 Sawgrass Corp. Pkwy., Suite 100

Ft. Lauderdale, FL  33323

Phone:  954-514-0984

Fax:      954-514-0985

e-mail:  leiby@mkpalaw.com

Board Certified in Construction Law

Fla. S. Ct. Certified Circuit Court Civil Mediator

Fellow, College of Commercial Arbitrators

From: constructionlaw-bounces@lists.flabarrpptl.org [mailto:constructionlaw-bounces@lists.flabarrpptl.org] On Behalf Of Andrea Fair
Sent: Thursday, September 29, 2011 9:58 AM
To: RPPTL constructionlaw
Subject: [RPPTL-constructionlaw] question re: priority of claims to insurance proceeds

I represent a contractor who furnished ground stabilization related to sinkhole activity.  My client has a lien on the property for the work.  The insurance company has cut a check payable to the owner, my client, and the mortgage lender.  The owner’s attorney is holding the check but is trying to get the insurance company to drop the owner’s name from the check and reissue a new check (I suppose to avoid any involvement in a dispute between my client and the lender for the insurance proceeds).  The owner is also considering interpleader.  The lender has requested that the owner endorse the check and send it to them and then they will consider what to do with it from there.  The owner does not want to do that because they feel the lender will not release the funds to my client and then the owner still has liability to my client.  The mortgage was recorded before the NOC for my client’s work.  The mortgage provides that insurance proceeds will be applied to restoration or repair of the property if it is economically feasible and lender’s security is not lessened.  Any suggestions on how to proceed from this point?

Andrea M. Fair-Purcell

Board Certified Construction Attorney

▬▬▬▬▬▬▬▬▬▬▬▬

FAIR•LAW•PLLC

▬▬▬▬▬▬▬▬▬▬▬▬
13046 Racetrack Road #236
Tampa, FL 33626
(813) 412-1077 phone
(877) 879-4990 fax
www.fairconstructionliens.com

The contents of this e-mail message and any attachments are intended solely for the addressee(s) named in this e-mail message. This communication is intended to be and to remain confidential and may be subject to applicable attorney/client and/or work product privileges. If you are not the intended recipient of this e-mail message, or if this e-mail message has been addressed to you in error, please immediately alert the sender by reply e-mail and then delete this e-mail message and its attachments. Do not deliver, distribute or copy this e-mail message and/or any attachments and if you are not the intended recipient, do not disclose the contents or take any action in reliance upon the information contained in this communication or any attachments.

This email message has been delivered safely and archived online by Mimecast.  For more information please visit http://www.mimecast.com

I would agree if the check were payable only to the mortgagee.  As I said, you are still going to be inferior to the prior lien of the mortgagee, but to the extent that the mortgagee doesn’t claim against the funds, and since the check is not payable only to the mortgagee, the claim may still have limited merit.

Larry R. Leiby, Esq.
Malka & Kravitz, P.A.
1300 Sawgrass Corp. Pkwy., Suite 100
Ft. Lauderdale, FL  33323
Phone:  954-514-0984
Fax:      954-514-0985

e-mail:  leiby@mkpalaw.com

Board Certified in Construction Law
Fla. S. Ct. Certified Circuit Court Civil Mediator
Fellow, College of Commercial Arbitrators

From: constructionlaw-bounces@lists.flabarrpptl.org [mailto:constructionlaw-bounces@lists.flabarrpptl.org] On Behalf Of Gibbons, Michael
Sent: Thursday, September 29, 2011 11:11 AM
To: RPPTL constructionlaw
Subject: Re: [RPPTL-constructionlaw] question re: priority of claims to insurance proceeds

Re applicability of Fla. Stat. s. 713.32, it appears that the last sentence of that statute renders the section inapplicable where, as here, there is a mortgagee with a lien perfected prior to recording of NOC.

Michael R. Gibbons  (Biohttp://lowndes-law.com/our-people/michael-r-gibbons)
Shareholder
Lowndes, Drosdick, Doster, Kantor & Reed, P.A.
450 South Orange Avenue, 8th Floor
Orlando, FL 32801
Phone: 407-418-6378
Fax: 407-843-4444
email: michael.gibbons@lowndes-law.commailto:michael.gibbons@lowndes-law.com
website: http://www.lowndes-law.comhttp://www.lowndes-law.com/

 [cid:image001.jpg@01CC7E9C.A3F8A0C0]

From: constructionlaw-bounces@lists.flabarrpptl.org [mailto:constructionlaw-bounces@lists.flabarrpptl.org] On Behalf Of Larry Leiby
Sent: Thursday, September 29, 2011 10:19 AM
To: RPPTL constructionlaw
Subject: Re: [RPPTL-constructionlaw] question re: priority of claims to insurance proceeds
Andrea,

You may want to make the owner and lender aware that your client also has a lien on the insurance proceeds pursuant to F.S. 713.32.  It sounds like your lien is inferior to the lien of the lender, but the lender also needs to be made aware of your claims (against the proceeds and the property).  The lender should cooperate if it has been timely paid.  If not ….  Interpleader will likely end up in the owner seeking fees.  If you file your action to enforce against the property and the insurance proceeds and you are successful, the owner should not be able to claim fees. See 457 So.2d 597.

Larry R. Leiby, Esq.
Malka & Kravitz, P.A.
1300 Sawgrass Corp. Pkwy., Suite 100
Ft. Lauderdale, FL  33323
Phone:  954-514-0984
Fax:      954-514-0985

e-mail:  leiby@mkpalaw.com

Board Certified in Construction Law
Fla. S. Ct. Certified Circuit Court Civil Mediator
Fellow, College of Commercial Arbitrators

From: constructionlaw-bounces@lists.flabarrpptl.org [mailto:constructionlaw-bounces@lists.flabarrpptl.org] On Behalf Of Andrea Fair
Sent: Thursday, September 29, 2011 9:58 AM
To: RPPTL constructionlaw
Subject: [RPPTL-constructionlaw] question re: priority of claims to insurance proceeds

I represent a contractor who furnished ground stabilization related to sinkhole activity.  My client has a lien on the property for the work.  The insurance company has cut a check payable to the owner, my client, and the mortgage lender.  The owner’s attorney is holding the check but is trying to get the insurance company to drop the owner’s name from the check and reissue a new check (I suppose to avoid any involvement in a dispute between my client and the lender for the insurance proceeds).  The owner is also considering interpleader.  The lender has requested that the owner endorse the check and send it to them and then they will consider what to do with it from there.  The owner does not want to do that because they feel the lender will not release the funds to my client and then the owner still has liability to my client.  The mortgage was recorded before the NOC for my client’s work.  The mortgage provides that insurance proceeds will be applied to restoration or repair of the property if it is economically feasible and lender’s security is not lessened.  Any suggestions on how to proceed from this point?

Andrea M. Fair-Purcell
Board Certified Construction Attorney
▬▬▬▬▬▬▬▬▬▬▬▬
FAIR•LAW•PLLC
▬▬▬▬▬▬▬▬▬▬▬▬
13046 Racetrack Road #236
Tampa, FL 33626
(813) 412-1077 phone
(877) 879-4990 fax
www.fairconstructionliens.com

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What is the meaning of the following language in FS 713.23(2) concerning a "Notice of Bond": "The notice shall be verified."  I have not been able to find any case law.  I interpret it as meaning verified by the surety that the bond is, indeed, valid an in effect.  A bond was recorded with the NOC, but the NOC expired before the project was complete, and, in an abundance of caution, I filed both a Notice of Nonpayment and a claim of lien.  The owner's attorney signed and recorded a "Notice of Bond" and attached a copy of the bond that was recorded with the NOC.  Does that satisfy the "verified" requirement and does this constitute a transfer of the lien to bond?

Chuck

Charles B. Hernicz, Esq.
Board Certified in Construction Law by The Florida Bar
Hernicz Legal Services, P.L.
15854 Bent Creek Road
Wellington, FL 33414
Telephone: (561) 753-7511
Facsimile: (561) 753-7082
Chernicz@HerniczLegal.com