FLORIDA KEYS COMMUNITY COLLEGE, APPELLANT,
v.
INSURANCE COMPANY OF NORTH AMERICA AND FIDELITY FIRE INSURANCE COMPANY, APPELLEES

Fla. 3d DCA | 1984-09-25
No. 84-527
Before HENDRY, BASKIN and DANIEL S. PEARSON, JJ.
456 So. 2d 1250 Florida District Court of Appeal, Third District (1984) Positive Treatment
Cited by 6 cases

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Holding

The court held that the construction bonds, due to their expanded liability provisions beyond statutory minimums, were common law bonds, not statutory bonds. Therefore, the claims against the sureties were subject to the general four-year statute of limitations, not the one-year limitation for statutory bonds.


Headnotes

[1] A bond furnished pursuant to a public works project will be construed as a common law bond if its provisions are more expansive than those required by statute.

[2] The primary test for determining whether a bond is a statutory or common law bond depends upon a comparison of the minimum statutory requirements and the language contain…

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Facts & Procedural History

Florida Keys Community College sued sureties for construction defects after completion of a public building. The trial court dismissed the claims agai…

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Opinion of the Court
BASKIN, Judge.

BASKIN, Judge.

Within four years of completion of construction of the Fine Arts Center for Flori-da Keys Community College, pursuant to a construction contract between the college, Sherrod Construction Company, and C.A. Davis, Inc., Florida Keys Community College instituted an action against those responsible for building the center and against their sureties. The action alleged construction defects. The sureties, Insurance Company of North America and Fidelity Fire Insurance Company, were obligors on the construction contract bonds. The trial court dismissed the claims against the sureties on the ground that they had not been filed within the one year period set forth in section 255.05(2), Florida Statutes (1977). These appeals ensued.

Finding that the bonds in question were common law bonds which were not subject to the one year limitation, we hold that the claims against the sureties were filed within the four year limitation period applicable to common law bonds. § 95.11, Fla.Stat. (1977). Accordingly, we reverse and remand for further proceedings.

Appellant argues that Florida courts have recognized a distinction between statutory bonds and common law bonds. Statutory bonds are those which meet the minimum requirement of section 255.05; common law bonds are those which provide coverage in excess of the minimum statutory requirements. United Bonding Insurance Co. v. City of Holly Hill, 249 So. 2d 720 (Fla. 1st DCA 1971). When the sureties’ obligations have not been extend ed beyond minimum requirements, the bond remains a statutory bond. Quality Glass & Mirror, Inc. v. Ritch, 373 So. 2d 723 (Fla. 1st DCA 1979), cert, denied, 385 So. 2d 760 (Fla.1980).

The primary test in determining whether a bond is a statutory bond or a common law bond depends upon an examination of the obligations imposed upon the principal and its surety. The test requires a comparison of the minimum requirements enunciated in the statute and the language contained within the bond. State ex rel Consolidated Pipe & Supply Co. v. Houdaille Industries, Inc., 372 So. 2d 1177 (Fla. 1st DCA 1979).

Section 255.05, Florida Statutes (1977) requires:

(1) Any person entering into a formal contract with the state or any county, city, or political subdivision thereof, or other public authority, for the construction of any public building, for the prosecution and completion of any public work, or for repairs upon any public building or public work shall be required, before commencing the work, to execute a payment and performance bond with a surety insurer authorized to do business in this state as surety.

The statute requires bonds to be conditioned so that the contractor shall promptly make payments to persons whose claims derive directly or indirectly from the performance of the work required by the contract.

The bonds in question provide:

1. PERFORMANCE: Said Principal (Contractor) shall well and truly perform, carry out and abide by all the terms, conditions and provisions of said Contract and complete the structure therein specified in accordance with the terms thereof and in the event said Principal (contractor) fails to perform said Contract as aforesaid, it shall be the duty of the Obligor herein to assume responsibility for the performance of said Contract and to complete the structure therein specified in accordance with the terms thereof; and the Obligor herein shall and does hereby agree to indemnify the Obli-gee and hold it harmless of, from and against any and all liability, loss, cost, damage or expense including reasonable attorney fees, engineering and architectural fees or other professional services which said Obligee may incur or which may accrue or be imposed upon it by reason of any negligence, default and/or misconduct on the part of the said Contractor, and his agents, servants, and/or employees, in, about, or on account of the construction of said structures and performance of said contract by the said contractor, and shall repay to and reimburse to the said Obligee, promptly upon demand, all sums of money including reasonable attorneys, architects and other professional services, each and every, reasonably paid out or expended by the said Obligee on account of the failure and/or refusal of said contractor to carry out, do, perform, and/or comply with any of the terms and provisions of said contract at the time and in the manner therein provided.

It is clear that the performance provisions of the bonds are broader than those required by the statute in that the sureties have assumed the risks of negligence and of misconduct by employees of the contractor. Thus, under the Houdaille Industries test, the bonds qualify as common law bonds.

We reject the argument proposed by the sureties that it was incumbent upon the college to obtain a bond which qualified under section 255.05 and that no other bond was allowable. They maintain that any bond obtained in satisfaction of the statute must be deemed a statutory bond regardless of its expanded provisions. Their argument ignores the many cases which recognize distinctions in bonds issued in connection with public projects. Even though a bond is furnished pursuant to a public works project, it will be construed as a common law bond if its provisions are more expansive than those required by section 255.05. Southwest Florida Water Man agement District ex rel Thermal Acoustic Corp. v. Miller Construction Co., 355 So. 2d 1258 (Fla. 2d DCA 1978). Cf. Motor City Electric Co. v. Ohio Casualty Insurance Co., 374 So. 2d 1068 (Fla. 3d DCA 1979) [bond not governed by sections 255.-05 and 713.23, Florida Statutes (1977) even though it incorporates those statutes].

In Houdaille the court was concerned with the absence of a reference to section 255.05 in the bond. The court concluded, in effect, that failure to mention section 255.-05 did not automatically render the bond a common law bond.

For these reasons, we conclude that the expanded liability in the bonds under review renders them common law bonds subject to the general limitations period of section 95.11 and that the claims against the sureties were timely.

The fact that the lawsuit was brought by the college rather than by a materialman provides no basis for limiting the period for filing claims. See School Board of Pinellas County v. St. Paul Fire & Marine Insurance Co., 449 So. 2d 872 (Fla. 2d DCA 1984).

Reversed and remanded.


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Citator

Cited By

  • …argument went, provided coverage exceeding the minimum statutory requirements and thus was subject to the longer statute of limitations for an action on a contract founded on a written instrument. See Florida Keys Cmty. Coll. v. Ins. Co. of N. Am., 456 So. 2d 1250, 1251 (Fla. 3d DCA 1984); 7 Fla. Jur.2d Bonds § 9 (2004); see also, § 95.11(2)(b), Fla. Stat. (2004) (providing a five-year statute of limitation of actions on written contracts).11 Plaza Materials has made this argument throughout this litigation.…
  • …will lie. We think not. The cases which have determined that a certain bond expanded coverage all involve bonds which broaden either the class of claimants or the payment provisions. Florida Keys Community College v. Insurance Co. of North America, 456 So. 2d 1250 (Fla. 3d DCA 1984); Standard Heating; Southwest Florida Water Management Dist. ex rel. Thermal Acoustic Corp. v. Miller Constr. Co., Inc., 355 So. 2d 1258 (Fla. 2d DCA 1978); Quality Glass & Mirror, Inc. v. Ritch, 373 So. 2d 723 (Fla. 1st DCA 1979)…
  • The Sch. Bd. OF Volusia Cnty. v. Fid. Co. OF Md., 468 So. 2d 431 (Fla. 5th DCA 1985)
    …So. 2d 172 (Fla. 5th DCA 1980); General Electric Company v. Commercial Standard Insurance Company, 335 So. 2d 624 (Fla. 1st DCA), cert. denied, 342 So. 2d 1100 (Fla.1976); but see Florida Keys Community College v. Insurance Company of North America, 456 So. 2d 1250 (Fla. 3rd DCA 1984). There is no comparable deferral of, accrual of a cause of action for latent undiscovered defects in section 95.11(2)(b), unlike the four year statute of limitations found in section 95.11(3)(e). Therefore, [*433] whether the st…

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