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Florida Appeals: Timing is Everything

Posted in Appellate

When commencing an appeal in Florida, timing is everything. For instance, the timely filing of a notice of appeal is a strict matter of subject matter jurisdiction. See Fla. R. App. P. 9.110(b); Miami-Dade Cnty. v. Peart, 843 So. 2d 363, 364 (Fla. 3d DCA 2003). If the notice of appeal is not filed within thirty days of the rendition of an order (either final or non-final), the appellate court is divested of subject matter jurisdiction by “an irremediable jurisdictional defect” and a litigant’s only right to appeal is gone. Peart, 843 So. 2d at 364. Similarly, if a motion for rehearing is not filed within fifteen days of the rendition of an opinion, the right to rehearing may be lost. See Hoenstine v. State Farm Fire & Cas. Co., 742 So. 2d 853, 854 (Fla. 5th DCA 1999) (denying as “unauthorized and untimely” a motion for rehearing that was one day late); see also Fla. R. App. P. 9.330(a). Thus, calculating the time requirements is essential to success on appeal.

As with trial court filings, Florida Rules of judicial Administration 2.514 & 2.516 provide the time computation requirements on appeal. Under rule 2.514, when time for the completion of an event—for example, the filing of a brief—is calculated in days, the calculation begins the day after the event that triggered the time period, and the last day of that period is counted in determining the end date. If the last day, however, is either a weekend or “legal holiday,” the end date is the next business day or non-legal holiday. Be sure to be careful regarding “legal holidays.” This term is defined under rule 2.514, and includes the mandatory holidays delineated by the Florida Legislature. Aside from those holidays, chief judges or the clerk’s office have discretion to add additional dates. As such, be sure to check your filing court’s holiday calendar when you believe a holiday may or may not give you extra time. If you believe a holiday may apply, and it does not, you may miss a crucial filing deadline.

Next, rule 2.514 provides that “”When a party may or must act within a specified time after service and service is made by mail or email, 5 days are added after the period that would otherwise expire under subdivision (a).” This five day additional period applies when service of a document was by mail or e-mail, and the party must respond in a period of time “after service.” If a rule or court order does not explicitly state that the person must act “after service,” the additional five days does not apply. See Miccosukee Tribe of Indians of Fla. v. Lewis, 122 So. 3d 504, 506 (Fla. 3d DCA 2013).For example, a party must file his notice of appeal within thirty days of rendition of the order appealed—not thirty days after service of the order. As such, the five day additional period does not apply when filing a notice of appeal and invoking the subject matter jurisdiction of the appellate court, even if the order is received by mail or email. Id. Furthermore, the additional five days applies when service was effectuated only by mail or email. If a party also effectuates service by another method—such as personal delivery or facsimile—along with mail or email, rule 2.516(2) requires the earlier end date to apply, i.e. the shorter period, which is that without the five days.

Accordingly, understanding how to compute time when calculating filing and service dates will help a litigator (on appeal and even at the trial court level) avoid missing crucial filing deadlines, perhaps give him or her a little more time than originally thought to complete a task, and may even provide a strategic advantage over an adversary who does not understand the time requirements of Florida’s Rules of Judicial Administration.

 

Trademark Infringement and Cybersquatting Non-Dischargeable in Bankruptcy

Posted in Bankruptcy, General Litigation

In the recent case of Nguyen v. Biondo (In re Biondo), 2014 WL 2702891 (Bankr. S.D.Fla. 2014)(http://www.flsb.uscourts.gov) the U.S. Bankruptcy Court for the Southern District of Florida (“Bankruptcy Court”) held that $1,130,742.68 in damages in the underlying judgment entered by the U.S. District Court for the Southern District of Florida (“District Court”) for trademark infringement and cybersquatting were not dischargeable in bankruptcy pursuant to 11 U.S.C. § 523(a)(6).  For a debt to be found nondischargeable pursuant to section 523(a)(6), the debt must be owing from the debtor to the plaintiff and arise from “willful and malicious” injury.  An act is “willful” within the meaning of section 523(a)(6) if it is undertaken with the intent to cause injury, or if it is an intentional act and injury is certain or substantially certain to result.  With respect to debts related to financial harms, a plaintiff must show that the defendant actually knew, at the time of the intentional act, that the injury was substantially certain to result.  An act is “malicious” under section 523(a)(6) if it is wrongful and without just cause, or excessive even where there is no ill will.  The Bankruptcy Court determined that findings by the District Court that the debtor intentionally infringed on the plaintiffs’ trademark and undertook cybersquatting, with full knowledge that such acts would harm the plaintiffs’ property, and without just cause or excuse, were entitled to collateral estoppel effect and satisfied the “willful and malicious” requirement of section 523(a)(6).

Florida Construction Liens: An Owner’s Notice Requirement and the “Notice of Commencement”

Posted in Construction & Real Estate

Generally, an owner or an owner’s agent is required to record a notice of commencement in the clerk’s office and post either a certified copy of the recorded notice of commencement or a notarized statement that the notice of commencement has been filed for recording along with a copy thereof. Fla. Stat. § 713.13(1)(a). The notice of commencement must contain the following information:

1.  A description sufficient for identification of the real property to be improved. The description should include the legal description of the property and also should include the street address and tax folio number of the property if available or, if there is no street address available, such additional information as will describe the physical location of the real property to be improved.

2.  A general description of the improvement.

3.  The name and address of the owner, the owner’s interest in the site of the improvement, and the name and address of the fee simple titleholder, if other than such owner. A lessee who contracts for the improvements is an owner as defined under s. 713.01(23) and must be listed as the owner together with a statement that the ownership interest is a leasehold interest.

4.  The name and address of the contractor.

5.  The name and address of the surety on the payment bond under s. 713.23, if any, and the amount of such bond.

6.  The name and address of any person making a loan for the construction of the improvements.

7.  The name and address within the state of a person other than himself or herself who may be designated by the owner as the person upon whom notices or other documents may be served under this part; and service upon the person so designated constitutes service upon the owner.

The Fourth District discussed the purpose of the Notice of Commencement in a 1999 decision. As the court explained:

Though the Notice of Commencement was originally required to trigger a commencement date from which to measure time limitations under the Mechanic’s Lien Law, the information contained in the Notice of Commencement provides all the details necessary to complete a Notice to Owner. Indeed, Section 713.13(1)(a), Florida Statutes, requires with Notice of Commencement information including the name and address of the owner and contractor. Thus, the legislature contemplated that the Notice of Commencement would provide the lienor with the current names and addresses of the owner and contractor, so that the lienor could properly mail the Notice to Owner. If no Notice of Commencement was ever posted or recorded by the owner as mandated by the statute, a lienor may have difficulty obtaining the names and addresses of the owners and contractor.

Sasso Air Conditioning, Inc., v. United Companies Lending Corporation, 742 So.2d 468, 470 (Fla. 4thDCA 1999), citing Symons Corp. v. Tartan-Lavers Delray Beach, Inc.456 So.2d 1254, 1259 (Fla. 4thDCA 1984). The Notice of Commencement signals the beginning of a construction project. Gulfside Properties Corp. v. Chapman Corp., 737 So.2d 604, 607 (1stDCA 1999). Under Fla. Stat. § 713.01(5), the “commencement of the improvement” is defined as “the time of filing for record of the notice of commencement provided in s. 713.13.” The key function of the Notice of Commencement is to provide the lienor and other third parties with the information they need to prepare necessary notices and related documents under Florida’s mechanic’s lien statutes. Gulfside Properties, 737 So.2d at 607.

 The failure by a property owner to file a Notice of Commencement does not relieve a contractor or supplier from satisfying the mechanic’s lien statute’s notice requirements. Professional Plastering & Stucco, Inc., v. Bridgeport-Strasberg Joint Venture, et al., 940 So.2d 444, 449 (Fla. 5th DCA 2006), citing Mursten Constr. Co. v. C.E.S. Indus., Inc., 588 So.2d 1061 (Fla. 3d DCA 1991). For instance, where a supplier failed to serve written notice of nonpayment on the contractor, the supplier’s failure to adhere to the requirements of the statute prevented its recovery under a construction bond despite the fact that the owner failed to file a notice of commencement. Murston, 588 So. 2d at 1062-63.

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W Mason is an associate with the law firm Fox Rothschild LLP. W practices in Fox Rothschild’s Litigation department in West Palm Beach, Florida. W focuses his practice on commercial litigation throughout Florida, with an emphasis on construction litigation. You can reach W at (561) 804-4432 or wmason@foxrothschild.com. Below are some recent posts W has written on Florida Construction Lien Law:

 

Florida’s New Data Breach Law – Tips for Employers

Posted in Labor & Employment

It seems like just about every week there is a new report on a data breach related to credit cards, debit cards or other sensitive information.  Here in Florida, hospitals and doctor’s offices are a popular source of identity information.

In response, Florida Gov. Rick Scott recently signed the Florida Information Protection Act of 2014 (SB 1524) into law, amending Florida’s breach notification statute effective July 1, 2014.  The amendments to Florida’s data breach law include an unique statutory requirement to provide copies of forensic reports and “policies regarding breaches” to the Florida attorney general upon request; an expanded definition of “personal information” to include online account credentials (i.e. email address and passwords); and a shorter deadline (30 days) for individual notice.

While FIPA will likely have a major impact on businesses and how they respond to consumer data breaches, employers and Human Resource professionals need to be proactive and aware that data breaches regarding employee information may also be covered by this law.

What Employers Need to Know

The definition of personal information has been expanded and is defined to include an individual’s first name or initial and last name in combination with one of the following:

(1) Social Security number;

(2) Driver’s license or identification card number, passport number, or similar government document;

(3) A financial account number or credit or debit card number, in combination with any required security code or password that is necessary to permit access to the account;

(4) Information about an individual’s medical history, treatment or diagnosis;

(5) Health insurance policy number or subscriber identification number and any unique identifier used by the health insurer to identify the individual;

(6) Username or email address in combination with password or security question and answer that would permit access to an online account.

A covered entity under FIPA includes sole proprietorships, partnerships, corporations, trusts, estates, cooperative, or other commercial entity that acquires, maintains, stores, or uses personal information.

The term breach now means unauthorized access of electronic data containing personal information.

Covered entities must take “reasonable measures” to protect and secure personal information and dispose of records containing personal information (paper or electronic) once the records no longer need be retrained. Of course, “reasonable measures” is undefined in the law and likely will be established through Court opinions.

What Happens if There is a Breach

If there is a breach, an individual must be notified via email or letter, as soon as possible, but not more than 30 days after the breach was discovered.

If a breach impacts 500 or more Floridians, then notice must be provided to Florida’s Attorney General within 30 days.

Penalties for violations do not include a private right of action.  What that means is that an employee or customer cannot sue you directly under FIPA.  Rather, the law provides that the Attorney General may bring an enforcement action against a covered entity and levy penalties up to $500,000.

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Dori K. Stibolt is an attorney with the law firm of Fox Rothschild LLP.  Dori defends and counsels management in labor and employment litigation matters pertaining to wage and overtime claims, discrimination, harassment, retaliation, leave/restraint, and whistle-blower claims.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

 

Gender Based Hiring – Beware of the Assumption Trap

Posted in Labor & Employment

Back in December 2013, I posted regarding a new lawsuit brought by the Equal Employment Opportunity Commission (“EEOC”) which involved a grocery store that would not hire a woman for an open courtesy van driver position.  The complaint alleged that the store manager told the applicant that he would not hire a woman for the position out of concern that the job would not be safe for a female driver.  The applicant otherwise met the qualifications for the position, but a few days later the grocery store hired a male candidate for the position.

This case has now been settled.  The applicant, Deborah Newell, will receive $10,500 as part of the settlement.  The employer will also adopt and implement a formal companywide anti-discrimination policy.  The employer will provide annual training to all of its managers, supervisors and employees regarding Title VII of the Civil Rights Act.  The employer is also required to provide the EEOC with reports, every six (6) months, which shall include the identities of all employees who have complained that they were discriminated due to their sex.

Remember, the EEOC has focused on eliminating barriers to hiring as one of its six (6) national enforcement priorities.  Gender based assumptions in hiring and promotions can quickly lead to claims for sex discrimination.  As an employer, do not assume that a woman will not want to work in a traditional male field, i.e. driver, construction, etc.  Rather focus on the actual duties of the position and apply them fairly and equally across your candidate pool.  So, while an employer hiring for a construction position may screen out applicants who are unable  to lift and carry items of a certain weight (assuming that is a real requirement of the position) an employer should not assume that women cannot fulfill that employment requirement.

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Dori K. Stibolt is an attorney with the law firm of Fox Rothschild LLP.  Dori defends and counsels management in labor and employment litigation matters pertaining to wage and overtime claims, discrimination, harassment, retaliation, leave/restraint, and whistle-blower claims.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

 

Payroll Cards – Convenience or Crooked?

Posted in Banking, Labor & Employment

More and more, employers are ditching the traditional paper check and providing wages to their employees via a payroll card which works much like a debit card or gift card.  But, some of those payroll cards come with fees and that has spawned litigation around the country.

Credit Card (Ficticious)

Here in Florida, Florida Statute § 532.01 was amended in 2009 to include payroll cards as a permissible form of wage payment.  Employers that choose to use payroll debit must ensure that the instrument is negotiable and payable in cash, on demand, without discount, at an established place of business in the state, the name and address of which must appear on the instrument or in the payroll debit card issuing materials. But, that doesn’t mean that fees associated with payroll cards are not permitted.  Rather, just like a check cashing fee, if an employee chooses to use his payroll card at a location where he will incur fees that is his choice.

There are benefits to payroll cards for the employee.  Payroll cards can be a less expensive option for low wage workers who do not have access to a free or low cost checking account.  Similarly, payroll cards can be cheaper than check cashing stores and other similar services.

Of course, employers like payroll cards because a payroll card deposit costs $0.35 compared to $2.00 to issue a payroll check.  Multiply those savings for hundreds of employees and it adds up.

Best Practices

In order for an employer to implement a successful payroll card program, make sure to be aware of the following best practices tips:

  • Employees should be able to access their full wages, without fee, at least once per pay period. Failure to provide such access will open up the employer to Fair Labor Standard Act or other minimum wage litigation (assuming that the fees bring the wages below the permissible threshold).
  • Federal law prohibits mandating payroll cards, rather employers must offer at least one other alternative.
  • Additionally, employers should be aware that payroll cards are subject to federal regulation under the Electronic Funds Transfer Act (“EFTA”) and Regulation E, which implements the EFTA.  Accordingly, the regulations require that the employee receive certain disclosures concerning the fees associated with the payroll card.  Also, there are limitations on the employee’s liability for unauthorized transfers using the payroll card (think about your own debit card).  Regulation E also provides error resolution procedures relating to the payroll card.  While the third party payroll card provider will likely be responsible for compliance with Regulation E, the employer likely will be the target of litigation if there is some failure or employees are dissatisfied with the payroll card program.

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Dori K. Stibolt is an attorney with the law firm of Fox Rothschild LLP. Dori defends and counsels management in labor and employment litigation matters pertaining to wage and overtime claims, discrimination, harassment, retaliation, leave/restraint, and whistle-blower claims. You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

 

Vacation Time – Optional or Medicine?

Posted in Labor & Employment

It’s summer time, which means family vacations and travel for many.  But, when was the last time you were able to take 11 weeks of vacation?

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In a recent Florida case, Hurley v. Kent of Naples, Inc., No. 13-10298 (11th Cir. 2014), that was exactly the issue. Patrick Hurley, began working for Kent of Naples, Inc. in 2001 as CEO.  In 2008, Hurley sent the CEO of the parent company, Gil Neuman, an email with a vacation scheduled that listed 11 weeks of vacation time over two years. Responding as many employers would to a demand for 11 weeks of vacation, Mr. Neuman denied the request.  There were a few back and forth emails in which Mr. Hurley explained that the requested vacation time was not optional and that he had been advised to take said time off by medial professions.  Shortly thereafter, Mr. Neuman terminated Mr. Hurley for insubordination and poor performance

A week after the termination, Mr. Hurley’s doctor filled out a Family Medical Leave Act (“FMLA”) form noting that Mr. Hurley suffered from depression and needed treatment.  Thereafter, Mr. Hurley filed a FMLA interference and retaliation lawsuit.

While the defendant admitted that Mr. Hurley had a chronic serious health condition there was no evidence that there requested vacation time was for a period of incapacity.  At trial, the jury found that Mr. Hurley was an eligible employee under the FMLA, that he suffered from a serious health condition and that he gave proper notice under the FMLA.  But, the jury answered “no” to whether Mr. Hurley’s leave request caused his termination, but then awarded damages.  In sum, an inconsistent verdict by the jury.

On appeal, Kent of Naples Inc. reasoned that Hurley’s requested vacation leave did not qualify for FMLA protection. Mr. Hurley, on the other hand, argued that he needed only to “potentially qualify” for FMLA leave in order to file an interference claim against his employer.

The Eleventh Circuit siding with Kent of Naples, found that:

Giving an employer notice of unqualified leave does not trigger the FMLA’s protection; otherwise, the FMLA would apply to every leave request.

Furthermore, the Eleventh Circuit also ruled that the requested leave was not for a period of incapacity (as defined by the FMLA) since Mr. Hurley did not contend that his leave was for a period of treatment or that he would be incapacitated (since he could not predict his period of incapacity) during the proposed vacation days.

Despite the fact that the employer eventually won this case, protracted litigation and an appeal are both expensive.  As such, employers need to train supervisors in the FMLA certification process and be careful and diligent in documenting the process when an employer provide notice of a need for leave that may qualify for FMLA.

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Dori K. Stibolt is an attorney with the law firm of Fox Rothschild LLP.  Dori defends and counsels management in labor and employment litigation matters pertaining to wage and overtime claims, discrimination, harassment, retaliation, leave/restraint, and whistle-blower claims.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

 

Drafting Non-Compete Agreements Under Florida Law

Posted in Labor & Employment

Florida’s non-compete statute, Fla. Stat. 542.335, provides numerous protections to employers or business purchasers who are looking to safeguard a company’s goodwill, trademarks and the like. Still, it is important to not overreach when drafting a non-compete. By that, should a party have to enforce a non-compete agreement, it will likely do so by seeking an injunction in state or federal court. A good non-compete agreement should balance an employee’s right to earn an income against a business’s right to protect its customer relationships, proprietary information and so on. This post will address some points to consider when drafting a non-compete agreement under Florida law.

Under Fla. Stat. 542.335(1)(a), Florida non-compete agreements are unenforceable unless they are in writing and signed by the person against whom enforcement is sought. By drafting a non-compete agreement, a party satisfies the writing requirement. Equally important, make sure the non-compete agreement is signed by the person you may ultimately seek enforcement against. This can be an employee, a franchisee or a person buying a business.

A non-compete agreement must identify at least one legitimate business which the enforcing party seeks to protect. In an action to enforce the non-compete agreement, if the court finds there is no legitimate business interest, than there is nothing for the court to protect and the enforcing party will not prevail. Florida’s non-compete statute lists five categories of legitimate business interests. A non-compete agreement should spell out that it seeks to protect at least one of these interests. Legitimate business interests include (i) trade secrets; (ii) confidential information; (iii) customer relationships; (iv) customer goodwill; and (v) specialized training.

The lists of legitimate business interests is non-exclusive, meaning other legitimate business interests in addition to the five listed above can be included in the non-compete agreement. Also, the non-compete agreement can, and probably should, list more than one legitimate business interest to protect.

When enforcing a non-compete agreement, the party seeking enforcement must show that the non-compete agreement is reasonably necessary to protect the legitimate business interests. When drafting the agreement, it is important not to overreach. For example, if you are seeking to protect customer relationships for a sales representative that deals with customers only in Florida, it may not be helpful to list the geographic region for enforcement to include the continental United States.

Section 542.335 provides several rebuttable presumptions of how long the enforcement period should last for a non-compete agreement. Be sure to read the statute and consider whether the enforcement period included in your non-compete agreement should follow the presumptions provided for in the statute. For example, for non-compete agreements between the seller and buyer of a business, a court must presume that a duration of 3 years or less is reasonable and that a duration for enforcement of 7 years or more is unreasonable. This does not mean that a non-compete agreement for 10 years is entirely unenforceable. Instead, the enforcing party must overcome the presumption that a 10 year duration is unreasonable.

Finally, even if a court were to find that a provision in the non-compete agreement is too long in duration, too broad in scope, or otherwise unenforceable, the court may still enforce a less restrictive form of the non-compete agreement. This practice is commonly referred to as “blue penciling,” meaning the court can modify, or pencil-in, terms to the non-compete agreement in order to protect the legitimate business interests. Section 542.335(c) specifically provides, “[i]f a contractually specified restraint is overbroad, overlong, or otherwise not necessary to protect the legitimate business interest or interests, a court shall modify the restraint and grant only the relief necessary to protect such interest or interests.” This gives the enforcing party, and the courts, tremendous flexibility when enforcing non-compete agreements to protect the business interests of a company in a reasonable manner.

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Jason Cornell is an equity partner with the law firm Fox Rothschild LLP. Jason practices in Fox Rothschild’s Litigation and Family Law departments in West Palm Beach, Florida. Jason focuses his practice on commercial and civil litigation throughout Florida, with an emphasis on non-compete litigation. You can reach Jason at (561) 804-4415 or jcornell@foxrothschild.com.

Below are some recent posts Jason has written on Florida non-compete litigation:

Common Defenses to Enforcement of a Non-Compete Agreement

Are Non-Compete Agreements Enforceable Against Third Parties?

What Are the Burdens of Proof When Enforcing a Non-Compete Agreement?

Florida’s Fifth District Narrowly Construes Geographic Scope Provision in Non-Compete Agreement

 

Florida Non-Compete Agreements: The Cessation of Business Defense

Posted in Labor & Employment

In Florida, a party opposing enforcement of a non-compete agreement may raise as a defense that the employer, or other enforcing party, no longer continues in the same business. Florida Statute § 542.335(1)(g)(2) provides that a court:

may consider as a defense the fact that the person seeking enforcement no longer continues in business in the area or line of business that is the subject of the action to enforce the restrictive covenant only if such discontinuance of business is not the result of a violation of the restriction.

Florida’s Second District Court of Appeal recently addressed the cessation of business defense in Richland Towers, Inc. v. Denton, et al., No. 2D12-5493 (Fla. 2d DCA Mar. 12, 2014). In Richland, two key employees left their employer to start a competing business. The employees had previously signed non-compete agreements which precluded the employees from engaging in a competing business during their employment and for a period of time after their departure.

The employer in Richland brought suit against the employees, alleging breach of their employment agreements and seeking an injunction. The employees raised several defenses, one being that their former employer, Richland Towers, Inc., was no longer in business, rendering the non-compete agreements unenforceable.

The trial court rejected the employers’ cessation of business defense and the appellate court agreed. The Richland court recognized the defense where an employer no longer continues in the same business if the discontinuation was not caused by the employee breaching the non-compete agreement. For example, suppose an employee is a sales rep and his district covers the entire State of Florida. If the employee leaves the employer to go work for a competitor, in breach of the employee’s non-compete agreement, the employee cannot argue that the non-compete agreement is unenforceable because the employer no longer operates in Florida. It was the employee’s breach (leaving his district in Florida to work for a competitor) which caused the employer’s cessation of business.

The cessation of business defense did not apply in Richland as the employees’ former employer designated a third party beneficiary, Richland Towers, LLC, who stood in the shoes of Richland Towers, Inc.. Although the employer, Richland Towers, Inc., ceased doing business in 2008, the non-compete agreements against the employees were valid through 2011. Equally important, the employment agreements identified the new entity, Richland Towers, LLC, as a beneficiary under the agreements. Even though the original employer was no longer in business, the non-compete agreements remained valid and enforceable against the employees.

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Jason Cornell is an equity partner with the law firm Fox Rothschild LLP. Jason practices in Fox Rothschild’s Litigation and Family Law departments in West Palm Beach, Florida. Jason focuses his practice on commercial and civil litigation throughout Florida, with an emphasis on non-compete litigation. You can reach Jason at (561) 804-4415 or jcornell@foxrothschild.com.

Below are some recent posts Jason has written on Florida non-compete litigation:

Common Defenses to Enforcement of a Non-Compete Agreement

Are Non-Compete Agreements Enforceable Against Third Parties?

What Are the Burdens of Proof When Enforcing a Non-Compete Agreement?

Florida’s Fifth District Narrowly Construes Geographic Scope Provision in Non-Compete Agreement

 

Florida Construction Liens: Payment Bonds and Notice of Nonpayment

Posted in Construction & Real Estate, General Litigation

Previously in this series, the Notice to Contractor condition precedent was discussed in the context of actions in connection with payment bonds. In addition to the Notice to Contractor, Section 713.23(1)(d) of Florida’s Construction Lien Law requires a lienor, as a condition precedent to recovery under a payment bond, to serve a written “Notice of Nonpayment” to the contractor and the surety not later than 90 days after the final furnishing of labor, services, or materials by the lienor. A written notice satisfies this condition precedent with respect to the payment described in the notice of nonpayment, including unpaid finance charges due under the lienor’s contract, and with respect to any other payments which become due to the lienor after the date of the notice of nonpayment. The time period for serving a written Notice of Nonpayment shall be measured from the last day of furnishing labor, services, or materials by the lienor and shall not be measured by other standards, such as the issuance of a certificate of occupancy or the issuance of a certificate of substantial completion.

The failure of a lienor to receive retainage sums not in excess of 10 percent is not considered a nonpayment requiring the service of the notice of nonpayment. If the payment bond is not recorded before commencement of construction, the time period for the lienor to serve a notice of nonpayment may at the option of the lienor be calculated from the date specified in this section or the date the lienor is served a copy of the bond. The notice may be in substantially the following form:

 NOTICE OF NONPAYMENT

(name of contractor and address) 

(name of surety and address) 

The undersigned notifies you that he or she has furnished   (describe labor, services, or materials)   for the improvement of the real property identified as   (property description)  . The amount now due and unpaid is $____ .

If a lienor fails to deliver a notice of nonpayment to the contractor and surety in accordance with the provisions of Fla. Stat. § 713.23(1)(d), no suit may be brought on the bond. See Standard Heating Service, Inc. v. Guymann Const., Inc., 459 So. 2d 1103 (Fla. 2d DCA 1984). As such, unless a lienor timely provides both a Notice to Contractor and Notice of Nonpayment, no action can be maintained against a contractor or surety. Fla. Stat. § 713.23(1)(e). Assuming compliance with the notice requirements, Fla. Stat. 713.23(1)(e) limits the time period for bringing an action on a bond to one year after the provision of labor, material, or supplies by the lienor.

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W Mason is an associate with the law firm Fox Rothschild LLP. W practices in Fox Rothschild’s Litigation department in West Palm Beach, Florida. W focuses his practice on commercial litigation throughout Florida, with an emphasis on construction litigation. You can reach W at (561) 804-4432 or wmason@foxrothschild.com. Below are some recent posts W has written on Florida Construction Lien Law: