Florida Senate - 2018                              CS for SB 908
       
       
        
       By the Committee on Judiciary; and Senator Steube
       
       
       
       
       
       590-02396-18                                           2018908c1
    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; providing that a claimant who serves a
    6         fraudulent notice of nonpayment shall be deprived of
    7         his or her rights under a bond; requiring a notice of
    8         nonpayment to be in a prescribed form; amending s.
    9         627.756, F.S.; providing that a provision relating to
   10         attorney fees applies to certain suits brought by
   11         contractors; deeming contractors to be insureds or
   12         beneficiaries for certain purposes; reenacting s.
   13         627.428, F.S., relating to attorney fees; amending s.
   14         713.23, F.S.; requiring a lienor to serve a verified
   15         notice of nonpayment to specified entities during a
   16         certain period of time; requiring a notice of
   17         nonpayment to contain certain statements; providing
   18         that a lienor who serves a fraudulent notice of
   19         nonpayment is deprived of his or her rights under the
   20         bond; requiring a notice of nonpayment to be in a
   21         prescribed form; amending s. 713.245, F.S.; providing
   22         that a contractor may record a notice identifying a
   23         project bond as a conditional payment bond before
   24         project commencement to make the duty of a surety to
   25         pay lienors coextensive with the contractor’s duty to
   26         pay; providing that failure to list or record a bond
   27         as a conditional payment bond does not convert such a
   28         bond into a common law bond or a bond furnished under
   29         a specified provision; revising the statement that
   30         must be included on a conditional payment bond;
   31         providing applicability; providing an effective date.
   32          
   33  Be It Enacted by the Legislature of the State of Florida:
   34  
   35         Section 1. Paragraph (a) of subsection (2) of section
   36  255.05, Florida Statutes, is amended to read:
   37         255.05 Bond of contractor constructing public buildings;
   38  form; action by claimants.—
   39         (2)(a)1. If a claimant is no longer furnishing labor,
   40  services, or materials on a project, a contractor or the
   41  contractor’s agent or attorney may elect to shorten the time
   42  within which an action to enforce any claim against a payment
   43  bond must be commenced by recording in the clerk’s office a
   44  notice in substantially the following form:
   45  
   46                     NOTICE OF CONTEST OF CLAIM                    
   47                        AGAINST PAYMENT BOND                       
   48  
   49  To: ...(Name and address of claimant)...
   50  
   51         You are notified that the undersigned contests your notice
   52  of nonpayment, dated ............, ........, and served on the
   53  undersigned on ............, ........, and that the time within
   54  which you may file suit to enforce your claim is limited to 60
   55  days after the date of service of this notice.
   56  
   57         DATED on ............, .........
   58  
   59  Signed: ...(Contractor or Attorney)...
   60  
   61  The claim of a claimant upon whom such notice is served and who
   62  fails to institute a suit to enforce his or her claim against
   63  the payment bond within 60 days after service of such notice is
   64  shall be extinguished automatically. The contractor or the
   65  contractor’s attorney shall serve a copy of the notice of
   66  contest to the claimant at the address shown in the notice of
   67  nonpayment or most recent amendment thereto and shall certify to
   68  such service on the face of the notice and record the notice.
   69         2. A claimant, except a laborer, who is not in privity with
   70  the contractor shall, before commencing or not later than 45
   71  days after commencing to furnish labor, services, or materials
   72  for the prosecution of the work, serve furnish the contractor
   73  with a written notice that he or she intends to look to the bond
   74  for protection. A claimant who is not in privity with the
   75  contractor and who has not received payment for furnishing his
   76  or her labor, services, or materials shall serve a written
   77  notice of nonpayment on deliver to the contractor and on to the
   78  surety written notice of the performance of the labor or
   79  delivery of the materials or supplies and of the nonpayment. The
   80  notice of nonpayment shall be verified in accordance with s.
   81  92.525 and served during the progress of the work or thereafter
   82  but may not be served earlier than 45 days after the first
   83  furnishing of labor, services, or materials by the claimant or
   84  later than 90 days after the final furnishing of the labor,
   85  services, or materials by the claimant or, with respect to
   86  rental equipment, not later than 90 days after the date that the
   87  rental equipment was last on the job site available for use. The
   88  notice of nonpayment must state, as of the date of the notice,
   89  the nature of the labor or services performed; the nature of the
   90  labor or services to be performed, if known; the materials
   91  furnished; the materials to be furnished, if known; the amount
   92  paid on account to date; the amount due; and the amount to
   93  become due, if known. Any notice of nonpayment served by a
   94  claimant who is not in privity with the contractor which
   95  includes sums for retainage must specify the portion of the
   96  amount claimed for retainage. An action for the labor,
   97  materials, or supplies may not be instituted against the
   98  contractor or the surety unless the notice to the contractor and
   99  notice of nonpayment have been served, if required by this
  100  section. Notices required or permitted under this section must
  101  shall be served in accordance with s. 713.18. A claimant may not
  102  waive in advance his or her right to bring an action under the
  103  bond against the surety. In any action brought to enforce a
  104  claim against a payment bond under this section, the prevailing
  105  party is entitled to recover a reasonable fee for the services
  106  of his or her attorney for trial and appeal or for arbitration,
  107  in an amount to be determined by the court, which fee must be
  108  taxed as part of the prevailing party’s costs, as allowed in
  109  equitable actions. The time periods for service of a notice of
  110  nonpayment or for bringing an action against a contractor or a
  111  surety shall be measured from the last day of furnishing labor,
  112  services, or materials by the claimant and may not be measured
  113  by other standards, such as the issuance of a certificate of
  114  occupancy or the issuance of a certificate of substantial
  115  completion. A claimant who serves a fraudulent notice of
  116  nonpayment shall be deprived of his or her rights under the
  117  bond. A notice of nonpayment is fraudulent if the claimant has
  118  willfully exaggerated the amount due, willfully included a claim
  119  for work not performed or materials not furnished for the
  120  subject improvement, or prepared the notice with such willful
  121  and gross negligence as to amount to a willful exaggeration.
  122  However, a minor mistake or error in a notice of nonpayment, or
  123  a good faith dispute as to the amount due, does not constitute a
  124  willful exaggeration that operates to defeat an otherwise valid
  125  claim against the bond. The service of a fraudulent notice of
  126  nonpayment is a complete defense to the claimant’s claim against
  127  the bond, entitling the prevailing party to attorney fees under
  128  this subparagraph. The notice of nonpayment under this
  129  subparagraph must be in substantially the following form:
  130  
  131                        NOTICE OF NONPAYMENT                       
  132  
  133  To: ...(name of contractor and address)...
  134  ...(name of surety and address)...
  135  The undersigned claimant notifies you that:
  136         1.Claimant has furnished ...(describe labor, services, or
  137  materials)... for the improvement of the real property
  138  identified as ...(property description)... The corresponding
  139  amount now due and unpaid is $ .....
  140         2.Claimant has been paid on account to date the amount of
  141  $ .... for previously furnishing ...(describe labor, service, or
  142  materials)... for this improvement.
  143         3.Claimant expects to furnish ...(describe labor, service,
  144  or materials)...for this improvement in the future (if known),
  145  and the corresponding amount expected to become due is $ ....
  146  (if known).
  147  
  148  Under penalties of perjury, I declare that I have read the
  149  foregoing Notice of Nonpayment and that the facts stated in it
  150  are true.
  151  
  152  ...(signature and address of claimant)...
  153         Section 2. Subsection (1) of section 627.756, Florida
  154  Statutes, is amended to read:
  155         627.756 Bonds for construction contracts; attorney fees in
  156  case of suit.—
  157         (1) Section 627.428 applies to suits brought by owners,
  158  contractors, subcontractors, laborers, and materialmen against a
  159  surety insurer under payment or performance bonds written by the
  160  insurer under the laws of this state to indemnify against
  161  pecuniary loss by breach of a building or construction contract.
  162  Owners, contractors, subcontractors, laborers, and materialmen
  163  shall be deemed to be insureds or beneficiaries for the purposes
  164  of this section.
  165         Section 3. Section 627.428, Florida Statutes, is reenacted
  166  to read:
  167         627.428 Attorney’s fee.—
  168         (1) Upon the rendition of a judgment or decree by any of
  169  the courts of this state against an insurer and in favor of any
  170  named or omnibus insured or the named beneficiary under a policy
  171  or contract executed by the insurer, the trial court or, in the
  172  event of an appeal in which the insured or beneficiary prevails,
  173  the appellate court shall adjudge or decree against the insurer
  174  and in favor of the insured or beneficiary a reasonable sum as
  175  fees or compensation for the insured’s or beneficiary’s attorney
  176  prosecuting the suit in which the recovery is had.
  177         (2) As to suits based on claims arising under life
  178  insurance policies or annuity contracts, no such attorney’s fee
  179  shall be allowed if such suit was commenced prior to expiration
  180  of 60 days after proof of the claim was duly filed with the
  181  insurer.
  182         (3) When so awarded, compensation or fees of the attorney
  183  shall be included in the judgment or decree rendered in the
  184  case.
  185         Section 4. Paragraph (d) of subsection (1) of section
  186  713.23, Florida Statutes, is amended to read:
  187         713.23 Payment bond.—
  188         (1)
  189         (d) In addition, a lienor who has not received payment for
  190  furnishing his or her labor, services, or materials must is
  191  required, as a condition precedent to recovery under the bond,
  192  to serve a written notice of nonpayment to the contractor and
  193  the surety. The notice must be verified in accordance with s.
  194  92.525 and must be served during the progress of the work or
  195  thereafter, but may not be served earlier than 45 days after the
  196  first furnishing of labor, services, or materials by the lienor
  197  or not later than 90 days after the final furnishing of labor,
  198  services, or materials by the lienor, or, with respect to rental
  199  equipment, later than 90 days after the date the rental
  200  equipment was on the job site and available for use. The notice
  201  of nonpayment must state, as of the date of the notice, the
  202  nature of the labor or services performed; the nature of the
  203  labor or services to be performed, if known; the materials
  204  furnished; the materials to be furnished, if known; the amount
  205  paid on account to date; the amount due; and the amount to
  206  become due, if known. A notice of nonpayment that includes sums
  207  for retainage must specify the portion of the amount claimed for
  208  retainage. The required. A written notice satisfies this
  209  condition precedent with respect to the payment described in the
  210  notice of nonpayment, including unpaid finance charges due under
  211  the lienor’s contract, and with respect to any other payments
  212  which become due to the lienor after the date of the notice of
  213  nonpayment. The time period for serving a written notice of
  214  nonpayment shall be measured from the last day of furnishing
  215  labor, services, or materials by the lienor and shall not be
  216  measured by other standards, such as the issuance of a
  217  certificate of occupancy or the issuance of a certificate of
  218  substantial completion. The failure of a lienor to receive
  219  retainage sums not in excess of 10 percent of the value of
  220  labor, services, or materials furnished by the lienor is not
  221  considered a nonpayment requiring the service of the notice
  222  provided under this paragraph. If the payment bond is not
  223  recorded before commencement of construction, the time period
  224  for the lienor to serve a notice of nonpayment may at the option
  225  of the lienor be calculated from the date specified in this
  226  section or the date the lienor is served a copy of the bond.
  227  However, the limitation period for commencement of an action on
  228  the payment bond as established in paragraph (e) may not be
  229  expanded. A lienor who serves a fraudulent notice of nonpayment
  230  shall be deprived of his or her rights under the bond. A notice
  231  of nonpayment is fraudulent if the lienor has willfully
  232  exaggerated the amount due, willfully included a claim for work
  233  not performed or materials not furnished for the subject
  234  improvement, or prepared the notice with such willful and gross
  235  negligence as to amount to a willful exaggeration. However, a
  236  minor mistake or error in a notice of nonpayment, or a good
  237  faith dispute as to the amount due, does not constitute a
  238  willful exaggeration that operates to defeat an otherwise valid
  239  claim against the bond. The service of a fraudulent notice of
  240  nonpayment is a complete defense to the lienor’s claim against
  241  the bond, entitling the prevailing party to attorney fees under
  242  s. 713.29. The notice under this paragraph must may be in
  243  substantially the following form:
  244  
  245                        NOTICE OF NONPAYMENT                       
  246  
  247  To ...(name of contractor and address)...
  248  ...(name of surety and address)...
  249  The undersigned lienor notifies you that:
  250         1.The lienor he or she has furnished ...(describe labor,
  251  services, or materials)...for the improvement of the real
  252  property identified as ...(property description).... The
  253  corresponding amount now due and unpaid is $.....
  254         2.The lienor has been paid on account to date the amount
  255  of $ ... for previously furnishing ...(describe labor, services,
  256  or materials)...for this improvement.
  257         3.The lienor expects to furnish ...(describe labor,
  258  service, or materials)...for this improvement in the future (if
  259  known), and the corresponding amount expected to become due is $
  260  .... (if known).
  261  
  262  Under penalties of perjury, I declare that I have read the
  263  foregoing Notice of Nonpayment and that the facts stated in it
  264  are true.
  265  ...(signature and address of lienor)...
  266         Section 5. Subsection (1) of section 713.245, Florida
  267  Statutes, is amended to read:
  268         713.245 Conditional payment bond.—
  269         (1) Notwithstanding any provisions of ss. 713.23 and 713.24
  270  to the contrary, if the contractor’s written contractual
  271  obligation to pay lienors is expressly conditioned upon and
  272  limited to the payments made by the owner to the contractor, the
  273  duty of the surety to pay lienors will be coextensive with the
  274  duty of the contractor to pay, if the following provisions are
  275  complied with:
  276         (a) The bond is listed in the notice of commencement for
  277  the project as a conditional payment bond and is recorded
  278  together with the notice of commencement for the project before
  279  prior to commencement of the project, or the contractor records
  280  a notice identifying the bond for the project as a conditional
  281  payment bond, with the bond attached, before commencement of the
  282  project. Failure to comply with this paragraph does not convert
  283  a conditional payment bond into a common law bond or into a bond
  284  furnished under s. 713.23.
  285         (b) The words “conditional payment bond” are contained in
  286  the title of the bond at the top of the front page.
  287         (c) The bond contains on the front page, capitalized and in
  288  at least 10-point type, the statement: THIS BOND ONLY COVERS
  289  CLAIMS OF SUBCONTRACTORS, SUB-SUBCONTRACTORS, SUPPLIERS, AND
  290  LABORERS TO THE EXTENT THE CONTRACTOR HAS BEEN PAID FOR THE
  291  LABOR, SERVICES, OR MATERIALS PROVIDED BY SUCH PERSONS. THIS
  292  BOND DOES NOT PRECLUDE YOU FROM SERVING A NOTICE TO OWNER OR
  293  FILING A CLAIM OF LIEN ON THIS PROJECT.
  294         Section 6. The amendments made by this act to ss. 627.756
  295  and 713.245, Florida Statutes, apply only to payment or
  296  performance bonds issued on or after October 1, 2018.
  297         Section 7. This act shall take effect October 1, 2018.