There can be many different ways to achieve a successful result as you defend against a breach of contract claim in Florida. Sometimes, it may involve winning on the facts by establishing evidence that shows that you are not liable or that the plaintiff didn’t suffer harm. In other situations, however, your success has nothing to do with the facts. For example, when someone sues you after the statute of limitations has expired, you are entitled to a judgment in your favor regardless of the other facts. Whichever strategy your case needs, an experienced Florida commercial litigation attorney can help pursue a successful result.
One recent multi-million dollar case from southwest Florida came down to an issue of the statute of limitations. The case arose from a dispute related to a real estate development project in Lee County. The City of Cape Coral required the developer to obtain surety bonds for the project. The developer obtained two bonds, both from the same insurance company, which totaled $7.7 million.
Eventually, the developer stopped paying its bills. As a result, first the city stopped making inspections in 2006. Next, the contractor stopped performing work in 2007. The developer’s lender obtained a foreclosure judgment against the developer in 2009.
In 2012, a new developer purchased the project for $6.2 million. That summer, the city made a demand on the insurance company for payment of the bonds. Three months later, in October, after the insurer didn’t pay, a lawsuit ensued, with the insurance company accused of breaching the surety bond contracts.
The insurance company argued that the lawsuit was prohibited because it was filed too late. The trial court rejected that argument, but, on appeal, the appeals court determined that the insurance company was correct. A breach of a surety bond contract case, like other commercial contract disputes, has certain legal rules that apply to it. One of those is the statute of limitations, which, in these cases, is a period of five years.
In many breach of contract situations, the period of time spelled out in the statute of limitations starts running when the actual breach takes place. In this case, the breach occurred when the insurance company had a duty to pay but did not do so. The plaintiff argued that the duty started when the city made a demand on the insurance company in 2012. The insurance company, on the other hand, argued that the duty was triggered much earlier, back in March 2007 when the original developer stopped making improvements to the project.
The appeals court agreed with the insurance company. The bonds were surety against the developer failing to perform. The developer’s failure to perform began in early 2007. Allowing the plaintiff to have until 2017 (2012 plus five years) would, in effect, give the plaintiff 10 years after the original developer failed to meet its obligations under the bonds to file its lawsuit, the court explained. That was not what the statute of limitations was intended to do.
The insurance company won this breach of contract lawsuit because the plaintiff waited seven months too long to sue. Whether you are pursuing or defending a breach of contract dispute in Florida, and whether your case needs a defense based upon the law or one that focuses on the facts to achieve success, contact the skilled South Florida commercial litigation attorneys at Stok Folk + Kon. Our team has spent many years helping businesses protect their rights and is ready to talk to you about your case.
Contact us online or by calling (954) 237-1777 to schedule your consultation and find out how this firm can help you protect your interests.
More blog posts:
‘Continuing’ Torts and the Statute of Limitations in Florida Tortious Interference Cases, Florida Business Lawyers Blog, Nov. 29, 2016
Limitations Period Trips Up Florida Creditor in Fraudulent Transfer Case, Florida Business Lawyers Blog, Aug. 26, 2016