TREMACK CO., APPELLANT,
v.
HOMESTEAD PAVING CO., ET AL., APPELLEES
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Tremack Co. appeals a judgment notwithstanding the verdict (JNOV) granted to a surety on a construction payment bond. The court reverses the JNOV, holding that the payment bond's unambiguous language covering "all labor and material" costs includes acceleration damages incurred due to schedule changes on the construction project.
The court held that the payment bond's unambiguous language covering "all labor and material" costs clearly includes acceleration damages. The trial court erred in granting JNOV to the surety as a matter of law, and ambiguities in insurance bonds must be strictly construed against the insurer.
[1] A payment bond covers acceleration damages when its language unambiguously states it covers "all labor and material" costs incurred, regardless of its title.
[2] Ambiguous terms in a payment bond are strictly construed against the insurer.
Previewing 2 of 4 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“Looking at the content and substance of the words used in the bond itself, and not solely to the title or style of the policy at issue which refers to the bond as a "Subcontract Labor and Material Payment Bond," the bond clearly states that it covers "all labor and material" costs incurred.”
Establishes the court's interpretive principle: examine actual bond language rather than title to determine coverage scope
Previewing 1 of 3 key quotes on this case — the court’s exact language, pinpointed for members.
Join FLexlaw to unlock all legal intelligenceTremack Co., a sub-subcontractor, incurred acceleration damages on a construction project managed by Homestead Paving Co. Homestead Paving was bonded …
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PER CURIAM.
This is an appeal of an order granting a judgment notwithstanding the verdict to a surety on a construction project, and a cross-appeal by a subcontractor of the denial of its motion for directed verdict.
Finding no merit to the argument raised in the cross-appeal, we affirm the trial court order entered on a jury verdict finding appellee subcontractor Homestead Paving liable to appellant sub-subcontractor Tremack for acceleration damages incurred on a construction contract.
We reverse that part of the order granting a judgment notwithstanding the jury’s verdict to Homestead’s surety, Employers Insurance of Wausau. The trial court erred in ruling that, as a matter of law, the particular payment bond involved did not cover acceleration damages. Looking at the content and substance of the words used in the bond itself, and not solely to the title or style of the policy at issue which refers to the bond as a “Subcontract Labor and Material Payment Bond,” the bond clearly states that it covers “all labor and material” costs incurred. (Emphasis added.) Accordingly, applying this unambiguous language strictly against the insurer, e.g., Triano v. State Farm Mut. Auto. Ins. Co., 565 So. 2d 748 (Fla. 3d DCA 1990), we hold that the bond covers costs incurred due to acceleration of the construction project completion schedule.1
Other points raised are without merit.
For the foregoing reasons, the appeal by Tremack against Wausau is reversed and remanded with directions that the trial court enter final judgment in favor of Tre-mack and against Homestead Paving and Wausau pursuant to the jury verdict.
Affirmed in part, reversed in part, and remanded.
. Based on this analysis, we need not reach the decisions in D.I.C. Commercial Constr. Corp. v. Knight Erection and Fabrication, Inc., 547 So. 2d 977 (Fla. 4th DCA 1989) and U.S., f/u/b/o Pertun Constr. Co. v. Harvesters Group, Inc., 918 F. 2d 915 (11th Cir.1990). Moreover, we point out that D.I.C. dealt purely with a surety’s obligation under a payment bond which specified that its terms did not extend beyond the statutory requirements of section 255.05, Florida Statutes (1989). On the other hand, the case at bar deals strictly with a common law bond; section 255.05 is not mentioned.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By
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Martin Paving Co. v. United Pac. Ins. Co., 646 So. 2d 268 (Fla. 5th DCA 1994)…e notice and time limitations of 255.05(2). Section 255.05(6), Fla.Stat. (1993). That omission is not material under the facts of this case, however, and we do not address the legal effect of it. . One decision, Tremack Co. v. Homestead Paving Co., 582 So. 2d 26 (Fla. 3d DCA 1991), is probably a case involving a common law bond issued on a public project but because the contestants were a subcontractor and a sub-subcontractor, it is impossible to tell from the way the opinion is drafted. Footnote 1 is sugge…
Authorities Cited
- Triano v. State Farm Mut. Auto. Ins. Co., 565 So. 2d 748 (Fla. 3d DCA 1990)
- United States v. Harvesters Grp., Inc., 918 F.2d 915 (11th Cir. 1990)
- D.I.C. Commercial Constr. Corp. v. Knight Erection & Fabrication Inc., 547 So. 2d 977 (Fla. 4th DCA 1989)