On March 24, 2023, Governor DeSantis signed into law House Bill 837, with the goal “to decrease frivolous lawsuits and prevent predatory practices of trial attorneys who prey on hardworking Floridians.” The recently executed House Bill 837 substantially modifies, inter alia, Florida’s comparative fault statute, which could have sweeping effects on the construction industry.
Prior to the enactment of House Bill 837, Florida was a pure comparative fault jurisdiction, meaning a defendant was only responsible for its pro-rata share of the damages caused by its actions and not the portion attributed to others including the plaintiff. For example, if a plaintiff was awarded $100,000.00 in damages, but was found 60% at fault, the judgment would be reduced by $60,000.00. Meaning, a plaintiff could be at fault, even up to 99%, and still be awarded damages. House Bill 837 modifies the language of the statute to seemingly provide an inherent limitation to this principle whereby “any party found to be greater than 50 percent at fault for his or her own harm may not recover damages.” (emphasis added). Using the example above, a plaintiff would be barred from recovery and receive nothing.
Construction claims are a unique blend of tort, contract, statutory, and equitable remedies. Therefore, it is not uncommon for a plaintiff to bring claims for both breach of contract and negligence in the same litigation. However, the damages from a negligence claim can be more far-reaching than those permitted by contract. Ultimately, the plaintiff would eventually need to elect a remedy whether through contract or tort. Usually the election does not occur until trial, so a great deal of time and money may be spent defending against both contract and tort claims.
Independent Tort Doctrine
In defending these claims, the independent tort doctrine is commonly raised as an affirmative defense to a negligence claim where a contract between the parties exists. Generally, the independent tort doctrine bars tort claims (such as negligence) when the tort and breach of contract claim are based on the same set of facts. The independent tort doctrine can protect a defendant by limiting liability/damages to what was bargained for between the parties.
The new comparative fault limitation, which requires a plaintiff to be less than 51% at fault to recover damages, provides an interesting dilemma for litigants. The new amendment may cause plaintiffs to shift to a more contract-based litigation strategy where there is a chance that a majority of fault could be attributed to the plaintiff. Likewise, it may be more advantageous for defendants to consider framing plaintiff’s claim as a negligence action rather than a breach of contract if it can be established that 51% of the fault lies with the plaintiff, thereby baring plaintiff from recovering any of its damages.
Design Professionals
Interestingly, this amendment may have a unique impact on design professionals. Typically, construction is a collaborative effort between an owner, contractor, and design professional. In the traditional contract structure, the owner retains both the general contractor and the design professional. As such, the design professional tends to have limited control over the other entities retained by owner.
In a recent 2020 case, Broward County v. CH2M Hill, Inc., the Fourth District Court of Appeal reiterated that Section 768.81 of the Florida Statutes defines a “negligence action” as “a civil action for damages based upon a theory of negligence, strict liability, products liability, professional malpractice whether couched in terms of contract or tort, or breach of warranty and like theories.” (emphasis added). The Fourth District Court of Appeal stated that “the essence of a professional malpractice action is the breach of a standard of care, whether that standard is derived from the common law or contract,” thereby finding that the breach of contract asserted against an engineering firm “fell within the definition of a ‘negligence action’ in the statute[,]” and, thus, was subject to the comparative fault provisions of Section 768.81 of the Florida Statutes.
The court’s interpretation of the Section 768.81 in CH2M Hill, could mean that, even in a breach of contract claim against a design professional, a plaintiff would not be able to recover damages if a majority of fault is allocated to the plaintiff.
Offers and Demands of Judgments
In construction related matters, the litigation costs can be significant due to their size and complexity. Even a lawsuit involving a single-family home can result in numerous trades being sued. As a result, offers and demands of judgments, sometimes referred to as proposals for settlements, are commonly used to facilitate resolutions. Section 768.79 of the Florida Statutes provides that defendant shall be entitled to recover reasonable costs and attorney’s fees incurred if the plaintiff does not accept the defendant’s offer of judgment with in thirty (30) days of the offer and judgment if the judgment is one of no liability or the judgment obtained by the plaintiff is at least 25% less than the offer. Under the new amendment, where liability is a coin-flip between the plaintiff and defendant, the offer of judgment could present significant leverage where there are concerns that plaintiff may be found greater than 50% at fault.
If you have any questions about this opinion or Florida’s comparative fault statute, generally, please contact Ryan Soohoo of CSK’s construction group at Ryan.Soohoo@csklegal.com or 954-343-3899.
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