951 HARBOR DRIVE, LLC, ETC.

v.

SD CONSTRUCTION, LLC, ETC.

Third District Court of Appeal State of Florida

Opinion filed June 19, 2024. Not final until disposition of timely filed motion for rehearing.

________________

No. 3D22-1992 Lower Tribunal No. 17-14568 ________________

951 Harbor Drive, LLC, etc., Appellant,

vs.

SD Construction, LLC, etc., Appellee.

An Appeal from the Circuit Court for Miami-Dade County, Maria de Jesus Santovenia, Judge.

Sodhi Spoont PLLC, and Eric M. Sodhi and Nathaniel M. Edenfield, for appellant.

Robert Joseph Alwine, P.A., and Robert J. Alwine, for appellee.

Before LOGUE, C.J., and EMAS and MILLER, JJ.

EMAS, J.

2

INTRODUCTION

951 Harbor Drive, LLC, the plaintiff/homeowner, appeals the trial court’s final summary judgment entered in favor of SD Construction, LLC, the defendant/general contractor, based on the rule against claim-splitting.¹ Upon completion of their new home, 951 Harbor Drive (the homeowner) discovered water damage to the home’s interior which it contends was caused by SD Construction’s negligent construction of the roof. This discovery led to the filing of two lawsuits. In the first lawsuit (a subrogation action), 951 Harbor Drive’s insurance company (Privilege Underwriters Reciprocal Exchange or PURE) sued SD Construction to recover monies it paid to 951 Harbor Drive, under the insurance policy, for damages caused to the home’s interior. In the second lawsuit—which was filed while the first lawsuit was still pending—951 Harbor Drive sued SD Construction for damages “to repair and/or replace” the negligently constructed roof system, for which damages were not covered by the PURE insurance policy.

FACTS AND PROCEDURAL HISTORY

951 Harbor Drive is the owner of the home located at 951 Harbor Drive in Key Biscayne. In 2010, it retained SD Construction as a general contractor to construct a new home on the property. Once construction was completed and the home occupied, the homeowners observed water intrusion causing damage to the home’s interior. 951 Harbor Drive filed a claim with its insurance company, PURE, and PURE, in turn, commissioned an engineering company to inspect the home and determine the cause of the water damage. Its report documented water intrusion in various areas of the home, and indicated the cause was a faulty roof waterproofing system. PURE ultimately paid the claim in the amount of $226,789.12, however the payment only covered the interior damage to the home, not repair or replacement of the faulty roof system. This is so because the repair or replacement of the roof system was not covered by the PURE insurance policy.

2 Because this issue is dispositive, we do not reach the remaining claims raised by 951 Harbor Drive on appeal, including whether SD Construction consented to both claims being brought when it executed its settlement with PURE; and whether the trial court erred in refusing to apply the Rosenthal exception in this case. Rosenthal v. Scott, 150 So. 2d 433 (Fla. 1961).

3 The subrogation agreement between PURE and 951 Harbor Drive provided:

Neither the Claim, the Settlement Sum or the Release are related to the construction defects which caused the water intrusion; but rather, only the damage to the Residence resulting from the water intrusion caused by the Loss and paid by Insurer in the Settlement Sum.

[T]his Assignment and Subrogation Receipt does not waive, cover, address, affect or alter any claims that Owners may have against any third parties for any loss or damages that were not covered by the Claim and Settlement Sum, including, but not limited to, negligence, breach of contract, breach of warranty, and construction defect claims against contractors, design professionals, materialmen or other persons, to recover costs associated with repairing and replacing the faulty design, construction, and materials that caused the water intrusion.

(Emphasis added).

STANDARD OF REVIEW

This Court reviews de novo a trial court’s granting of summary judgment. Volusia Cnty. v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000). The determination of the sufficiency of a pleading is also a matter of law, which we review de novo. See D’Agostino v. CCP Ponce, LLC, 274 So. 3d 1141, 1147 n.9 (Fla. 3d DCA 2019); Ladner v. AmSouth Bank, 32 So. 3d 99, 103 (Fla. 2d DCA 2009) (“The determination of the sufficiency of a pleading is a matter of law and subject to a de novo review.”).

ANALYSIS AND DISCUSSION

The claim-splitting doctrine “ensures that a plaintiff may not ‘split up his demand and prosecute it by piecemeal, or present only a portion of the grounds upon which relief is sought, and leave the rest to be presented in a second suit, if the first fails.’” Vanover v. NCO Fin. Servs., Inc., 857 F. 3d 833,

(Emphasis added).

11

A core purpose for the rule requiring a party to plead an affirmative defense “is to place the opposing parties on notice that a particular defense will be pursued so as to prevent surprise or unfair prejudice.” Saks v. Franklin Covey Co., 316 F. 3d 337, 350 (2d Cir. 2003) (addressing parallel Federal Rule of Civil Procedure 8(c)). As this court has observed: “A properly pled affirmative defense includes ultimate facts sufficient to provide notice of the proof the defendant intends to rely upon to defeat the plaintiff's claim.” S. Fla. Coastal Elec., Inc. v. Treasures on Bay II Condo Ass’n, 89 So. 3d 264, 267 (Fla. 3d DCA 2012) (citing Zito v. Wash. Fed. Savs. and Loan Ass’n, 318 So. 2d 175, 176 (Fla. 3d DCA 1975)); see also Stone v. Stone, 97 So. 2d 352, 354 (Fla. 3d DCA 1957) (reversing dismissal on grounds of res judicata/estoppel by judgment, where such was not pled as an affirmative defense, but instead raised in a motion to dismiss; noting that permitting such a procedure would deny the opposing party the benefit of notice and opportunity to reply, “if not in effect denying him due process”). Rule 1.140(h) provides that a party waives all defenses and objections that the party fails to present in a responsive pleading (or, though inapplicable here, by motion filed prior to a responsive pleading). See also Scott v. Rosenthal, 118 So. 2d 555, 558 (Fla. 3d DCA 1960) (“The rule that a cause of action may not be split into two or more causes of action is for the

(Emphasis added). As can readily be seen, nowhere does SD Construction use the term claim-splitting, nor allege that 951 Harbor Drive is prohibited from pursuing this lawsuit because it failed to join it with the subrogation lawsuit previously filed by PURE. Instead, SD Construction’s affirmative defense alleges that the claim raised in the present lawsuit was already “assigned, and subsequently settled and released” in the subrogation lawsuit filed by PURE

4 While SD Construction correctly notes that “[t]he rule against splitting causes of action is ‘an aspect of the doctrine of res judicata,’” see Tyson v. Viacom, Inc., 890 So. 2d 1205, 1209 (Fla. 4th DCA 2005) (citation omitted), but it is nevertheless unavailing in the instant case, given that SD Construction did not include res judicata, collateral estoppel, or claimsplitting among its twenty-six asserted affirmative defenses.

(Emphasis added).

In other words, after reviewing SD Construction’s twenty-sixth affirmative defense in tandem with the above release and settlement agreement, 951 Harbor Drive would have had no reason to reply to the affirmative defense, take any further action in contemplation of that affirmative defense, or believe that SD Construction had invoked the rule against claim-splitting. Throughout the litigation, SD Construction acted inconsistently with any purported pursuit of a claim-splitting defense. For example, SD Construction did not raise the claim-splitting rule until its motion for summary

5 951 Harbor Drive rightly contends it was prejudiced by the fact SD Construction failed to adequately plead this affirmative defense, raising it for the first time three years later in its motion for summary judgment. Had SD Construction timely and adequately placed 951 Harbor Drive on notice that it intended to take the position that 951 Harbor Drive’s lawsuit would be barred by PURE’s earlier lawsuit by operation of the rule prohibiting splitting causes of action, 951 Harbor Drive could have addressed the issue promptly by, e.g., attempting to intervene into the PURE matter, moving to transfer and consolidate the PURE case with the instant lawsuit, or requesting that PURE participate in the instant lawsuit against SD Construction to preserve its subrogation rights. But the manner in which SD Construction pled the affirmative defense reasonably caused 951 Harbor Drive to take no action, which ultimately proved prejudicial when SD Construction moved three years later for summary judgment based upon an unpled affirmative defense.

And of course, given our decision, SD Construction may not, on remand, seek to amend its affirmative defenses to assert the rule against claimsplitting. See Don Suntan Corp. v. Tanning Rsch. Labs, 505 So. 2d 35, 36 (Fla. 5th DCA 1987). 6 Again, by the time SD Construction moved for summary judgment and, certainly by the time the trial court entered its order, the parties were prepared to proceed to trial: On March 23, SD Construction moved for summary judgment based on the rule against claim-splitting; on September

Unlike its twenty-sixth affirmative defense, SD Construction’s motion for summary judgment clearly and unequivocally invoked the rule against claim-splitting. Yet SD Construction provides no explanation for its failure to do the same in its affirmative defense, nor offers any reasonable basis to conclude that the affirmative defense, as pled, was “sufficient to provide notice of the proof the defendant intends to rely upon to defeat the plaintiff’s claim.” S. Florida Coastal Elec., 89 So. 3d at 267. The argument advanced in SD Construction’s own motion for summary judgment underscores the discrete and very different nature between a

22, the trial court held a hearing on the motion; on October¹³, the trial court entered an order on the pretrial conference; on October 20, the parties submitted their joint pre-trial statement (pursuant to the October¹³ order); and on October 22—two days before the scheduled trial date—the trial court entered its order granting summary judgment for SD Construction.

CONCLUSION

We hold that the trial court erred in entering summary judgment in favor of SD Construction based upon the rule against claim-splitting. SD Construction waived the rule against claim-splitting by failing to plead it as an affirmative defense. We therefore reverse the final summary judgment and remand for further proceedings consistent with this opinion.