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Subcontractor Loses Contract Interpretation Argument But Wins Recovery on Unpaid Invoice in Florida Mansion Renovation Dispute

houseSometimes, in civil litigation, you may find yourself in the position of losing a battle but still winning “the war” in your Florida commercial litigation action. That was the case for one roofing subcontractor in its breach of contract lawsuit against a general contractor that had not paid the subcontractor’s invoice. While the Fifth District Court of Appeal ruled that the merger clause in the two parties’ agreement meant that the contract applied retroactively, which was a position argued by the general contractor, the court nevertheless concluded, even with the retroactive application of the contract, the subcontractor was still entitled to be paid as it had advocated.

The dispute in this case was a contractor-versus-subcontractor matter. In 2010, a licensed general contractor inked a deal with a historic mansion’s owner to do various work. One task was installing a new roof on the mansion. The contractor retained a licensed roofing subcontractor to do the roof work. That contract, consummated in June 2011, stated that payment was due upon completion of the work. By the time that the contract was signed by both sides, the subcontractor had already completed roughly 90% of the roof work.

When the subcontractor finished, it invoiced the general contractor for $22,370. That was in the late spring of 2011. The general contractor disputed some of the subcontractor’s charges, and it did not pay the subcontractor anything for the work.

By December, the subcontractor filed suit for breach of contract, naming both the general contractor and the owner. It is important to make sure, in any lawsuit including a breach of contract matter, that you make sure you’ve named all of the proper defendants. If the court decides that a party that you didn’t name as a defendant was an “indispensable” party, your lawsuit can be thrown out entirely.

Three weeks after the subcontractor sued, the general contractor informed it that the owner had allegedly found a leak in the roof. The owner, however, didn’t allow the subcontractor onto the property to fix the leak until the following May.

The trial court concluded that the subcontractor agreement didn’t apply retroactively but that the general contractor owed the subcontractor $15,400 ($16,300 minus certain set-offs) for the work that the subcontractor performed.

The general contractor argued on appeal that the trial court was mistaken and should have applied the contract retroactively. The appeals court agreed, concluding that the express language of the contract indicated that retroactive application was proper. Section 18 of the agreement contained a merger clause. That was key to the outcome on the retroactivity question. “The merger clause requires retroactive application because it acts to replace the original contract with the new one.”

Unfortunately for the general contractor, it was not as successful in persuading the court that, if the contract applied retroactively, the subcontractor was owed nothing because the subcontractor failed to comply with a condition precedent of the agreement. The reason for this lay in the way the general contractor worded its pleadings. It stated that the subcontractor “failed to allege, nor can it establish that it had meet [sic] each and every condition precedent to recovering payment.” The Florida court procedural rules require a party making such an argument to specify which conditions precedent its opponent didn’t meet or how its action or inaction constituted a failure to comply. The general contractor didn’t provide these specifics, so that argument couldn’t succeed, and the subcontractor was owed payment for the roof work.

Whether you are the plaintiff or the defendant, it is important to have experienced counsel on your side in your breach of contract case. The knowledgeable South Florida commercial litigation attorneys at Stok Folk + Kon have been helping businesses for many years as they pursue or defend their rights in breach of contract and other commercial lawsuit matters. Find out how you can put our skills and resources to use for you to help your business.

Contact us online or by calling (305) 935-4440 to schedule your consultation and find out how this firm can help you protect your interests.

More blog posts:

Building Owner’s Florida Breach of Contract Case Against Contractor Revived Due to Improper Consideration of ‘Abandoned’ Complaint, Florida Business Lawyers Blog, Feb. 10, 2017

Language in Contract Defeats Subcontractor’s Summary Judgment in Florida Contract Breach Case, Florida Business Lawyers Blog, July 15, 2016

Photo credit: Leonard J. DeFrancisci at Wikimedia Commons.