Bill Text: FL S1200 | 2019 | Regular Session | Comm Sub
Bill Title: Construction Bonds
Spectrum: Slight Partisan Bill (? 2-1)
Status: (Introduced - Dead) 2019-05-01 - Laid on Table, companion bill(s) passed, see CS/CS/HB 1247 (Ch. 2019-94) [S1200 Detail]
Download: Florida-2019-S1200-Comm_Sub.html
Florida Senate - 2019 CS for CS for SB 1200 By the Committees on Rules; and Judiciary; and Senator Stargel 595-04133-19 20191200c2 1 A bill to be entitled 2 An act relating to construction bonds; amending s. 3 255.05, F.S.; requiring a notice of nonpayment to be 4 under oath; specifying that certain negligent 5 inclusions or omissions do not constitute a default 6 that operates to default an otherwise valid bond 7 claim; specifying that a claimant who serves a 8 fraudulent notice of nonpayment forfeits his or her 9 rights under a bond; providing that the service of a 10 fraudulent notice of nonpayment is a complete defense 11 to the claimant’s claim against the bond; requiring a 12 notice of nonpayment to be in a prescribed form; 13 amending s. 627.756, F.S.; providing that a provision 14 relating to attorney fees applies to certain suits 15 brought by contractors; deeming contractors to be 16 insureds or beneficiaries in relation to bonds for 17 construction contracts; reenacting s. 627.428, F.S., 18 relating to attorney fees; amending s. 713.23, F.S.; 19 requiring a lienor to serve a notice of nonpayment 20 under oath to specified entities during a certain 21 period of time; specifying that certain negligent 22 inclusions or omissions do not constitute a default 23 that operates to default an otherwise valid bond 24 claim; specifying that a lienor who serves a 25 fraudulent notice of nonpayment forfeits his or her 26 rights under the bond; providing that the service of a 27 fraudulent notice of nonpayment is a complete defense 28 to the lienor’s claim against the bond; requiring a 29 notice of nonpayment to be in a prescribed form; 30 providing applicability; providing an effective date. 31 32 Be It Enacted by the Legislature of the State of Florida: 33 34 Section 1. Paragraph (a) of subsection (2) of section 35 255.05, Florida Statutes, is amended to read: 36 255.05 Bond of contractor constructing public buildings; 37 form; action by claimants.— 38 (2)(a)1. If a claimant is no longer furnishing labor, 39 services, or materials on a project, a contractor or the 40 contractor’s agent or attorney may elect to shorten the time 41 within which an action to enforce any claim against a payment 42 bond must be commenced by recording in the clerk’s office a 43 notice in substantially the following form: 44 45 NOTICE OF CONTEST OF CLAIM 46 AGAINST PAYMENT BOND 47 48 To: ...(Name and address of claimant)... 49 50 You are notified that the undersigned contests your notice 51 of nonpayment, dated ............, ........, and served on the 52 undersigned on ............, ........, and that the time within 53 which you may file suit to enforce your claim is limited to 60 54 days after the date of service of this notice. 55 56 DATED on ............, ......... 57 58 Signed: ...(Contractor or Attorney)... 59 60 The claim of a claimant upon whom such notice is served and who 61 fails to institute a suit to enforce his or her claim against 62 the payment bond within 60 days after service of such notice is 63shall beextinguished automatically. The contractor or the 64 contractor’s attorney shall serve a copy of the notice of 65 contest to the claimant at the address shown in the notice of 66 nonpayment or most recent amendment thereto and shall certify to 67 such service on the face of the notice and record the notice. 68 2. A claimant, except a laborer, who is not in privity with the 69 contractor shall, before commencing or not later than 45 days 70 after commencing to furnish labor, services, or materials for 71 the prosecution of the work, servefurnishthe contractor with a 72 written notice that he or she intends to look to the bond for 73 protection. A claimant who is not in privity with the contractor 74 and who has not received payment for furnishing his or her 75 labor, services, or materials shall serve a written notice of 76 nonpayment ondeliver tothe contractor and ontothe surety 77written notice of the performance of the labor or delivery of78the materials or supplies and of the nonpayment. The notice of 79 nonpayment shall be under oath and served during the progress of 80 the work or thereafter but may not be served earlier than 45 81 days after the first furnishing of labor, services, or materials 82 by the claimant or later than 90 days after the final furnishing 83 of the labor, services, or materials by the claimant or, with 84 respect to rental equipment,notlater than 90 days after the 85 date that the rental equipment was last on the job site 86 available for use. Any notice of nonpayment served by a claimant 87 who is not in privity with the contractor which includes sums 88 for retainage must specify the portion of the amount claimed for 89 retainage. An action for the labor, services, or materials, or90suppliesmay not be instituted against the contractor or the 91 surety unless the notice to the contractor and notice of 92 nonpayment have been served, if required by this section. 93 Notices required or permitted under this section mustshallbe 94 served in accordance with s. 713.18. A claimant may not waive in 95 advance his or her right to bring an action under the bond 96 against the surety. In any action brought to enforce a claim 97 against a payment bond under this section, the prevailing party 98 is entitled to recover a reasonable fee for the services of his 99 or her attorney for trial and appeal or for arbitration, in an 100 amount to be determined by the court, which fee must be taxed as 101 part of the prevailing party’s costs, as allowed in equitable 102 actions. The time periods for service of a notice of nonpayment 103 or for bringing an action against a contractor or a surety shall 104 be measured from the last day of furnishing labor, services, or 105 materials by the claimant and may not be measured by other 106 standards, such as the issuance of a certificate of occupancy or 107 the issuance of a certificate of substantial completion. The 108 negligent inclusion or omission of any information in the notice 109 of nonpayment that has not prejudiced the contractor or surety 110 does not constitute a default that operates to defeat an 111 otherwise valid bond claim. A claimant who serves a fraudulent 112 notice of nonpayment forfeits his or her rights under the bond. 113 A notice of nonpayment is fraudulent if the claimant has 114 willfully exaggerated the amount unpaid, willfully included a 115 claim for work not performed or materials not furnished for the 116 subject improvement, or prepared the notice with such willful 117 and gross negligence as to amount to a willful exaggeration. 118 However, a minor mistake or error in a notice of nonpayment, or 119 a good faith dispute as to the amount unpaid, does not 120 constitute a willful exaggeration that operates to defeat an 121 otherwise valid claim against the bond. The service of a 122 fraudulent notice of nonpayment is a complete defense to the 123 claimant’s claim against the bond. The notice of nonpayment 124 under this subparagraph must supply the following information, 125 current as of the date of the notice, and must be in 126 substantially the following form: 127 128 NOTICE OF NONPAYMENT 129 130 To: ...(name of contractor and address)... 131 ...(name of surety and address)... 132 The undersigned claimant notifies you that: 133 1. Claimant has furnished ...(describe labor, services, or 134 materials)... for the improvement of the real property 135 identified as ...(property description).... The corresponding 136 amount unpaid to date is $ ...., of which $ .... is unpaid 137 retainage. 138 2. Claimant has been paid to date the amount of $ .... for 139 previously furnishing ...(describe labor, service, or 140 materials)... for this improvement. 141 3. Claimant expects to furnish ...(describe labor, service, 142 or materials)... for this improvement in the future (if known), 143 and the corresponding amount expected to become due is $ .... 144 (if known). 145 146 I declare that I have read the foregoing Notice of Nonpayment 147 and that the facts stated in it are true to the best of my 148 knowledge and belief. 149 150 DATED on ............, ......... 151 152 ...(signature and address of claimant)... 153 154 STATE OF FLORIDA 155 COUNTY OF 156 157 The foregoing instrument was sworn to (or affirmed) and 158 subscribed before me this .... day of ...., ...(year)..., by 159 ...(name of signatory).... 160 ...(Signature of Notary Public - State of Florida)... 161 ...(Print, Type, or Stamp Commissioned Name of Notary 162 Public)... 163 164 Personally Known .... OR Produced Identification .... 165 Type of Identification Produced.......................... 166 167 Section 2. Subsection (1) of section 627.756, Florida 168 Statutes, is amended to read: 169 627.756 Bonds for construction contracts; attorney fees in 170 case of suit.— 171 (1) Section 627.428 applies to suits brought by owners, 172 contractors, subcontractors, laborers, and materialmen against a 173 surety insurer under payment or performance bonds written by the 174 insurer under the laws of this state to indemnify against 175 pecuniary loss by breach of a building or construction contract. 176 Owners, contractors, subcontractors, laborers, and materialmen 177 shall be deemed to be insureds or beneficiaries for the purposes 178 of this section. 179 Section 3. For the purpose of incorporating the amendment 180 made by this act to section 627.756, Florida Statutes, in a 181 reference thereto, section 627.428, Florida Statutes, is 182 reenacted to read: 183 627.428 Attorney’s fee.— 184 (1) Upon the rendition of a judgment or decree by any of 185 the courts of this state against an insurer and in favor of any 186 named or omnibus insured or the named beneficiary under a policy 187 or contract executed by the insurer, the trial court or, in the 188 event of an appeal in which the insured or beneficiary prevails, 189 the appellate court shall adjudge or decree against the insurer 190 and in favor of the insured or beneficiary a reasonable sum as 191 fees or compensation for the insured’s or beneficiary’s attorney 192 prosecuting the suit in which the recovery is had. 193 (2) As to suits based on claims arising under life 194 insurance policies or annuity contracts, no such attorney’s fee 195 shall be allowed if such suit was commenced prior to expiration 196 of 60 days after proof of the claim was duly filed with the 197 insurer. 198 (3) When so awarded, compensation or fees of the attorney 199 shall be included in the judgment or decree rendered in the 200 case. 201 Section 4. Paragraph (d) of subsection (1) of section 202 713.23, Florida Statutes, is amended to read: 203 713.23 Payment bond.— 204 (1) 205 (d) In addition, a lienor who has not received payment for 206 furnishing his or her labor, services, or materials mustis207required, as a condition precedent to recovery under the bond, 208toserve a written notice of nonpayment to the contractor and 209 the surety. The notice must be under oath and served during the 210 progress of the work or thereafter, but may not be servednot211 later than 90 days after the final furnishing of labor, 212 services, or materials by the lienor, or, with respect to rental 213 equipment, later than 90 days after the date the rental 214 equipment was on the job site and available for use. A notice of 215 nonpayment that includes sums for retainage must specify the 216 portion of the amount claimed for retainage. The required. A217writtennotice satisfies this condition precedent with respect 218 to the payment described in the notice of nonpayment, including 219 unpaid finance charges due under the lienor’s contract, and with 220 respect to any other payments which become due to the lienor 221 after the date of the notice of nonpayment. The time period for 222 serving awrittennotice of nonpayment shall be measured from 223 the last day of furnishing labor, services, or materials by the 224 lienor and mayshallnot be measured by other standards, such as 225 the issuance of a certificate of occupancy or the issuance of a 226 certificate of substantial completion. The failure of a lienor 227 to receive retainage sums not in excess of 10 percent of the 228 value of labor, services, or materials furnished by the lienor 229 is not considered a nonpayment requiring the service of the 230 notice provided under this paragraph. If the payment bond is not 231 recorded before commencement of construction, the time period 232 for the lienor to serve a notice of nonpayment may at the option 233 of the lienor be calculated from the date specified in this 234 section or the date the lienor is served a copy of the bond. 235 However, the limitation period for commencement of an action on 236 the payment bond as established in paragraph (e) may not be 237 expanded. The negligent inclusion or omission of any information 238 in the notice of nonpayment that has not prejudiced the 239 contractor or surety does not constitute a default that operates 240 to defeat an otherwise valid bond claim. A lienor who serves a 241 fraudulent notice of nonpayment forfeits his or her rights under 242 the bond. A notice of nonpayment is fraudulent if the lienor has 243 willfully exaggerated the amount unpaid, willfully included a 244 claim for work not performed or materials not furnished for the 245 subject improvement, or prepared the notice with such willful 246 and gross negligence as to amount to a willful exaggeration. 247 However, a minor mistake or error in a notice of nonpayment, or 248 a good faith dispute as to the amount unpaid, does not 249 constitute a willful exaggeration that operates to defeat an 250 otherwise valid claim against the bond. The service of a 251 fraudulent notice of nonpayment is a complete defense to the 252 lienor’s claim against the bond. The notice under this paragraph 253 must supply the following information, current as of the date of 254 the notice, and mustmaybe in substantially the following form: 255 256 NOTICE OF NONPAYMENT 257 258 To ...(name of contractor and address)... 259 ...(name of surety and address)... 260 The undersigned lienor notifies you that: 261 1. The lienorhe or shehas furnished ...(describe labor, 262 services, or materials)...for the improvement of the real 263 property identified as ...(property description).... The 264 corresponding amountnow due andunpaid to date is $...., of 265 which $ .... is unpaid retainage. 266 2. The lienor has been paid to date the amount of $.... for 267 previously furnishing ...(describe labor, services, or 268 materials)... for this improvement. 269 3. The lienor expects to furnish ...(describe labor, 270 service, or materials)... for this improvement in the future (if 271 known), and the corresponding amount expected to become due is 272 $.... (if known). 273 274 I declare that I have read the foregoing Notice of Nonpayment 275 and that the facts stated in it are true to the best of my 276 knowledge and belief. 277 278 DATED on ............, ......... 279 280 ...(signature and address of lienor)... 281 282 STATE OF FLORIDA 283 COUNTY OF 284 285 The foregoing instrument was sworn to (or affirmed) and 286 subscribed before me this .... day of ...., ...(year)..., by 287 ...(name of signatory).... 288 ...(Signature of Notary Public - State of Florida)... 289 ...(Print, Type, or Stamp Commissioned Name of Notary 290 Public)... 291 292 Personally Known .... OR Produced Identification .... 293 Type of Identification Produced.......................... 294 295 Section 5. The amendments made by this act to s. 627.756, 296 Florida Statutes, apply only to payment or performance bonds 297 issued on or after October 1, 2019. 298 Section 6. This act shall take effect October 1, 2019.