Florida Senate - 2018                                     SB 908
       
       
        
       By Senator Steube
       
       
       
       
       
       23-00879-18                                            2018908__
    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         verified; requiring the notice to contain certain
    5         statements; requiring a claimant to attach certain
    6         documents to a notice of nonpayment; providing that a
    7         claimant who serves a fraudulent notice of nonpayment
    8         shall be deprived of his or her rights under a bond;
    9         requiring a notice of nonpayment to be in a prescribed
   10         form; amending s. 627.756, F.S.; providing that a
   11         provision relating to attorney fees applies to certain
   12         suits brought by contractors; deeming contractors to
   13         be insureds or beneficiaries for certain purposes;
   14         reenacting s. 627.428, F.S., relating to attorney
   15         fees; amending s. 713.23, F.S.; requiring a lienor to
   16         serve a verified notice of nonpayment to specified
   17         entities during a certain period of time; requiring a
   18         notice of nonpayment to contain certain statements;
   19         requiring a lienor to attach certain documents to a
   20         notice of nonpayment; providing that a lienor who
   21         serves a fraudulent notice of nonpayment is deprived
   22         of his or her rights under the bond; requiring a
   23         notice of nonpayment to be in a prescribed form;
   24         amending s. 713.245, F.S.; providing that a contractor
   25         may record a notice identifying a project bond as a
   26         conditional payment bond before project commencement
   27         to make the duty of a surety to pay lienors
   28         coextensive with the contractor’s duty to pay;
   29         providing that failure to list or record a bond as a
   30         conditional payment bond does not convert such a bond
   31         into a common law bond or a bond furnished under a
   32         specified provision; revising the statement that must
   33         be included on a conditional payment bond; providing
   34         applicability; providing an effective date.
   35          
   36  Be It Enacted by the Legislature of the State of Florida:
   37  
   38         Section 1. Paragraph (a) of subsection (2) of section
   39  255.05, Florida Statutes, is amended to read:
   40         255.05 Bond of contractor constructing public buildings;
   41  form; action by claimants.—
   42         (2)(a)1. If a claimant is no longer furnishing labor,
   43  services, or materials on a project, a contractor or the
   44  contractor’s agent or attorney may elect to shorten the time
   45  within which an action to enforce any claim against a payment
   46  bond must be commenced by recording in the clerk’s office a
   47  notice in substantially the following form:
   48  
   49                     NOTICE OF CONTEST OF CLAIM                    
   50                        AGAINST PAYMENT BOND                       
   51  
   52  To: ...(Name and address of claimant)...
   53  
   54         You are notified that the undersigned contests your notice
   55  of nonpayment, dated ............, ........, and served on the
   56  undersigned on ............, ........, and that the time within
   57  which you may file suit to enforce your claim is limited to 60
   58  days after the date of service of this notice.
   59  
   60         DATED on ............, .........
   61  
   62  Signed: ...(Contractor or Attorney)...
   63  
   64  The claim of a claimant upon whom such notice is served and who
   65  fails to institute a suit to enforce his or her claim against
   66  the payment bond within 60 days after service of such notice is
   67  shall be extinguished automatically. The contractor or the
   68  contractor’s attorney shall serve a copy of the notice of
   69  contest to the claimant at the address shown in the notice of
   70  nonpayment or most recent amendment thereto and shall certify to
   71  such service on the face of the notice and record the notice.
   72         2. A claimant, except a laborer, who is not in privity with
   73  the contractor shall, before commencing or not later than 45
   74  days after commencing to furnish labor, services, or materials
   75  for the prosecution of the work, serve furnish the contractor
   76  with a written notice that he or she intends to look to the bond
   77  for protection. A claimant who is not in privity with the
   78  contractor and who has not received payment for furnishing his
   79  or her labor, services, or materials shall serve a written
   80  notice of nonpayment on deliver to the contractor and on to the
   81  surety written notice of the performance of the labor or
   82  delivery of the materials or supplies and of the nonpayment. The
   83  notice of nonpayment shall be verified in accordance with s.
   84  92.525 and served during the progress of the work or thereafter
   85  but may not be served earlier than 45 days after the first
   86  furnishing of labor, services, or materials by the claimant or
   87  later than 90 days after the final furnishing of the labor,
   88  services, or materials by the claimant or, with respect to
   89  rental equipment, not later than 90 days after the date that the
   90  rental equipment was last on the job site available for use. The
   91  notice of nonpayment must state, as of the date of the notice,
   92  the nature of the labor or services performed; the nature of the
   93  labor or services to be performed, if known; the materials
   94  furnished; the materials to be furnished, if known; the amount
   95  paid on account to date; the amount due; and the amount to
   96  become due, if known. Any notice of nonpayment served by a
   97  claimant who is not in privity with the contractor which
   98  includes sums for retainage must specify the portion of the
   99  amount claimed for retainage. The claimant shall also include,
  100  as attachments to the notice of nonpayment, copies of the
  101  following documents to substantiate the amount claimed as unpaid
  102  in the notice, if such documents exist: the claimant’s contract
  103  or purchase order and any amendments or change orders directed
  104  thereto; invoices, pay requests, bills of lading, delivery
  105  receipts, or similar documents, as applicable; and a statement
  106  of account reflecting all payments requested and received for
  107  the labor, services, or materials. An action for the labor,
  108  materials, or supplies may not be instituted against the
  109  contractor or the surety unless the notice to the contractor and
  110  notice of nonpayment have been served, if required by this
  111  section. Notices required or permitted under this section must
  112  shall be served in accordance with s. 713.18. A claimant may not
  113  waive in advance his or her right to bring an action under the
  114  bond against the surety. In any action brought to enforce a
  115  claim against a payment bond under this section, the prevailing
  116  party is entitled to recover a reasonable fee for the services
  117  of his or her attorney for trial and appeal or for arbitration,
  118  in an amount to be determined by the court, which fee must be
  119  taxed as part of the prevailing party’s costs, as allowed in
  120  equitable actions. The time periods for service of a notice of
  121  nonpayment or for bringing an action against a contractor or a
  122  surety shall be measured from the last day of furnishing labor,
  123  services, or materials by the claimant and may not be measured
  124  by other standards, such as the issuance of a certificate of
  125  occupancy or the issuance of a certificate of substantial
  126  completion. A claimant who serves a fraudulent notice of
  127  nonpayment shall be deprived of his or her rights under the
  128  bond. A notice of nonpayment is fraudulent if the claimant has
  129  willfully exaggerated the amount due, willfully included a claim
  130  for work not performed or materials not furnished for the
  131  subject improvement, or prepared the notice with such willful
  132  and gross negligence as to amount to a willful exaggeration.
  133  However, a minor mistake or error in a notice of nonpayment, or
  134  a good faith dispute as to the amount due, does not constitute a
  135  willful exaggeration that operates to defeat an otherwise valid
  136  claim against the bond. The service of a fraudulent notice of
  137  nonpayment is a complete defense to the claimant’s claim against
  138  the bond, entitling the prevailing party to attorney fees under
  139  this subparagraph. The notice of nonpayment under this
  140  subparagraph must be in substantially the following form:
  141  
  142                        NOTICE OF NONPAYMENT                       
  143  
  144  To: ...(name of contractor and address)...
  145  ...(name of surety and address)...
  146  The undersigned claimant notifies you that:
  147         1.Claimant has furnished ...(describe labor, services, or
  148  materials)... for the improvement of the real property
  149  identified as ...(property description)... The corresponding
  150  amount now due and unpaid is $ .....
  151         2.Claimant has been paid on account to date the amount of
  152  $ .... for previously furnishing ...(describe labor, service, or
  153  materials)... for this improvement.
  154         3.Claimant expects to furnish ...(describe labor, service,
  155  or materials)...for this improvement in the future (if known),
  156  and the corresponding amount expected to become due is $ ....
  157  (if known).
  158  
  159  Under penalties of perjury, I declare that I have read the
  160  foregoing Notice of Nonpayment and that the facts stated in it
  161  are true.
  162  
  163  ...(signature and address of claimant)...
  164         Section 2. Subsection (1) of section 627.756, Florida
  165  Statutes, is amended to read:
  166         627.756 Bonds for construction contracts; attorney fees in
  167  case of suit.—
  168         (1) Section 627.428 applies to suits brought by owners,
  169  contractors, subcontractors, laborers, and materialmen against a
  170  surety insurer under payment or performance bonds written by the
  171  insurer under the laws of this state to indemnify against
  172  pecuniary loss by breach of a building or construction contract.
  173  Owners, contractors, subcontractors, laborers, and materialmen
  174  shall be deemed to be insureds or beneficiaries for the purposes
  175  of this section.
  176         Section 3. Section 627.428, Florida Statutes, is reenacted
  177  to read:
  178         627.428 Attorney’s fee.—
  179         (1) Upon the rendition of a judgment or decree by any of
  180  the courts of this state against an insurer and in favor of any
  181  named or omnibus insured or the named beneficiary under a policy
  182  or contract executed by the insurer, the trial court or, in the
  183  event of an appeal in which the insured or beneficiary prevails,
  184  the appellate court shall adjudge or decree against the insurer
  185  and in favor of the insured or beneficiary a reasonable sum as
  186  fees or compensation for the insured’s or beneficiary’s attorney
  187  prosecuting the suit in which the recovery is had.
  188         (2) As to suits based on claims arising under life
  189  insurance policies or annuity contracts, no such attorney’s fee
  190  shall be allowed if such suit was commenced prior to expiration
  191  of 60 days after proof of the claim was duly filed with the
  192  insurer.
  193         (3) When so awarded, compensation or fees of the attorney
  194  shall be included in the judgment or decree rendered in the
  195  case.
  196         Section 4. Paragraph (d) of subsection (1) of section
  197  713.23, Florida Statutes, is amended to read:
  198         713.23 Payment bond.—
  199         (1)
  200         (d) In addition, a lienor who has not received payment for
  201  furnishing his or her labor, services, or materials must is
  202  required, as a condition precedent to recovery under the bond,
  203  to serve a written notice of nonpayment to the contractor and
  204  the surety. The notice must be verified in accordance with s.
  205  92.525 and must be served during the progress of the work or
  206  thereafter, but may not be served earlier than 45 days after the
  207  first furnishing of labor, services, or materials by the lienor
  208  or not later than 90 days after the final furnishing of labor,
  209  services, or materials by the lienor, or, with respect to rental
  210  equipment, later than 90 days after the date the rental
  211  equipment was on the job site and available for use. The notice
  212  of nonpayment must state, as of the date of the notice, the
  213  nature of the labor or services performed; the nature of the
  214  labor or services to be performed, if known; the materials
  215  furnished; the materials to be furnished, if known; the amount
  216  paid on account to date; the amount due; and the amount to
  217  become due, if known. A notice of nonpayment that includes sums
  218  for retainage must specify the portion of the amount claimed for
  219  retainage. The lienor must also include, as attachments to the
  220  notice of nonpayment, copies of the following documents to
  221  substantiate the amount claimed as unpaid in the notice, if such
  222  documents exist: the lienor’s contract or purchase order and any
  223  amendments or change orders directed thereto; invoices, pay
  224  requests, bills of lading, delivery receipts, or similar
  225  documents, as applicable; and a statement of account reflecting
  226  all payments requested and received for the labor, services, or
  227  materials. The required. A written notice satisfies this
  228  condition precedent with respect to the payment described in the
  229  notice of nonpayment, including unpaid finance charges due under
  230  the lienor’s contract, and with respect to any other payments
  231  which become due to the lienor after the date of the notice of
  232  nonpayment. The time period for serving a written notice of
  233  nonpayment shall be measured from the last day of furnishing
  234  labor, services, or materials by the lienor and shall not be
  235  measured by other standards, such as the issuance of a
  236  certificate of occupancy or the issuance of a certificate of
  237  substantial completion. The failure of a lienor to receive
  238  retainage sums not in excess of 10 percent of the value of
  239  labor, services, or materials furnished by the lienor is not
  240  considered a nonpayment requiring the service of the notice
  241  provided under this paragraph. If the payment bond is not
  242  recorded before commencement of construction, the time period
  243  for the lienor to serve a notice of nonpayment may at the option
  244  of the lienor be calculated from the date specified in this
  245  section or the date the lienor is served a copy of the bond.
  246  However, the limitation period for commencement of an action on
  247  the payment bond as established in paragraph (e) may not be
  248  expanded. A lienor who serves a fraudulent notice of nonpayment
  249  shall be deprived of his or her rights under the bond. A notice
  250  of nonpayment is fraudulent if the lienor has willfully
  251  exaggerated the amount due, willfully included a claim for work
  252  not performed or materials not furnished for the subject
  253  improvement, or prepared the notice with such willful and gross
  254  negligence as to amount to a willful exaggeration. However, a
  255  minor mistake or error in a notice of nonpayment, or a good
  256  faith dispute as to the amount due, does not constitute a
  257  willful exaggeration that operates to defeat an otherwise valid
  258  claim against the bond. The service of a fraudulent notice of
  259  nonpayment is a complete defense to the lienor’s claim against
  260  the bond, entitling the prevailing party to attorney fees under
  261  s. 713.29. The notice under this paragraph must may be in
  262  substantially the following form:
  263  
  264                        NOTICE OF NONPAYMENT                       
  265  
  266  To ...(name of contractor and address)...
  267  ...(name of surety and address)...
  268  The undersigned lienor notifies you that:
  269         1.The lienor he or she has furnished ...(describe labor,
  270  services, or materials)...for the improvement of the real
  271  property identified as ...(property description).... The
  272  corresponding amount now due and unpaid is $.....
  273         2.The lienor has been paid on account to date the amount
  274  of $ ... for previously furnishing ...(describe labor, services,
  275  or materials)...for this improvement.
  276         3.The lienor expects to furnish ...(describe labor,
  277  service, or materials)...for this improvement in the future (if
  278  known), and the corresponding amount expected to become due is $
  279  .... (if known).
  280  
  281  Under penalties of perjury, I declare that I have read the
  282  foregoing Notice of Nonpayment and that the facts stated in it
  283  are true.
  284  ...(signature and address of lienor)...
  285         Section 5. Subsection (1) of section 713.245, Florida
  286  Statutes, is amended to read:
  287         713.245 Conditional payment bond.—
  288         (1) Notwithstanding any provisions of ss. 713.23 and 713.24
  289  to the contrary, if the contractor’s written contractual
  290  obligation to pay lienors is expressly conditioned upon and
  291  limited to the payments made by the owner to the contractor, the
  292  duty of the surety to pay lienors will be coextensive with the
  293  duty of the contractor to pay, if the following provisions are
  294  complied with:
  295         (a) The bond is listed in the notice of commencement for
  296  the project as a conditional payment bond and is recorded
  297  together with the notice of commencement for the project before
  298  prior to commencement of the project, or the contractor records
  299  a notice identifying the bond for the project as a conditional
  300  payment bond, with the bond attached, before commencement of the
  301  project. Failure to comply with this paragraph does not convert
  302  a conditional payment bond into a common law bond or into a bond
  303  furnished under s. 713.23.
  304         (b) The words “conditional payment bond” are contained in
  305  the title of the bond at the top of the front page.
  306         (c) The bond contains on the front page, capitalized and in
  307  at least 10-point type, the statement: THIS BOND ONLY COVERS
  308  CLAIMS OF SUBCONTRACTORS, SUB-SUBCONTRACTORS, SUPPLIERS, AND
  309  LABORERS TO THE EXTENT THE CONTRACTOR HAS BEEN PAID FOR THE
  310  LABOR, SERVICES, OR MATERIALS PROVIDED BY SUCH PERSONS. THIS
  311  BOND DOES NOT PRECLUDE YOU FROM SERVING A NOTICE TO OWNER OR
  312  FILING A CLAIM OF LIEN ON THIS PROJECT.
  313         Section 6. The amendments made by this act to ss. 627.756
  314  and 713.245, Florida Statutes, apply only to payment or
  315  performance bonds issued on or after October 1, 2018.
  316         Section 7. This act shall take effect October 1, 2018.