The Florida Supreme Court on April 20th agreed to hear the case of Maronda Homes, Inc. v. Lakeview Reserve Homeowners Association, Inc., an appeal from an October, 2010 decision of the Fifth District Court of Appeal. In the decision under appeal (48 So.3d 902), the Fifth District determined that Lakeview Reserve could pursue the project developer, Maronda Homes, under an implied warranty theory for defects and deficiencies in the roads, drainage systems, retention ponds and underground piping of the subdivision. At issue was the interpretation of the Supreme Court's decision in Conklin v. Hurley, 428 So.2d 654 (1983) in which the Supreme Court determined that implied warranties extended only to the construction of a residence and "improvements immediately supporting the residence" such as water wells and septic tanks. The Fourth District Court of Appeal, in 1985, interpreted Conklin as precluding recovery by a homeowner's association under an implied warranty theory for defects in subdivision roads and drainage improvements. Port Seawall Harbor and Tennis Club Owners Ass'n., Inc. v. First Federal Savings and Loan Association of Martin County, 463 So.2d 530. Acknowledging its disagreement with the Fourth District, the Fifth District determined that when the Supreme Court used the phrase "improvements immediately supporting the residence," it did not intend the definition to be literal. Consequently, the Fifth District developed a new test for which improvements qualify as "supportive of the residence." The new test is whether the improvement is providing a service essential to the habitability of the home. The Fifth District reasoned that when the Supreme Court utilized water wells and septic tanks as examples, it did not intend these "services" to be the sole ones that would qualify. The conclusion reached by the Fifth District Court on the applicability of implied warranties to the roads, drainage systems, retention ponds and underground piping of the Lakeview Reserve subdivision: Since the services provided by these improvements are essential to the habitability of the homes, they do "support the residences" and thus carry implied warranties under Conklin. The Florida Supreme Court will now decide whether the Fourth District (no implied warranties for site improvements) or the Fifth District (implied warranties for site improvements) is the law in the State of Florida for homeowner's associations. The other issue to be decided by the Supreme Court is whether the Association itself has standing to pursue the claim or whether a class action on behalf of the homeowners is necessary. The Fifth District ruled that the Association had standing to bring the action. Note to owners of new condominiums: statutory warranties under Florida Statute 718.203 extend to the owners from the developer and contractors for site improvements, so the Maronda decision should not affect condominium warranties.
In Florida, under the "economic loss rule", a party is precluded from suing a party with whom it has contracted for negligence absent personal injury or property damage. One exception carved out by the Florida Supreme Court has been for the negligence of "professionals", although the court did not specifically define what a "professional" is. In the construction context, there has been no doubt that architects and engineers are "professionals." Claims against them are not subject to the economic loss rule. But what about land surveyors? The issue of whether land surveyors are "professionals" excluded from the economic loss rule was decided by the Florida Fourth District Court of Appeal in Estate of Joanne Rocks v. McLaughlin Engineering Company, 49 So. 2d 823 (Fla. 4th DCA 2010). They are. In deciding this, the appellate court cited state statutes referring to land surveyors as professionals and relied in addition on the following attributes: 1. surveyors are engaged by clients to perform a skilled service solely under their control and competence; 2. the service performed by a surveyor is one requiring special education, training, experience and skill; 3. the typical client is not competent to perform surveying personally nor direct that it be performed in a particular way; and 4. the client/surveyor contract gives the client no power of direction and leaves performance up to the skill and expertise of the surveyor.
Alan Tannenbaum was recently a guest speaker on America's Premier Lawyers Series on ABC RADIO, along with Jeff Raizner, of Doyler Raizner LLP.
U.S. agency sets drywall inquiry
"A lot of the builders involved have been reluctant to do anything at all, with the exception of Lennar," Chaikin said. "They have just said, 'We're studying the issue and will let you know,' or they simply say nothing. If the builders won't cooperate we have recourse against them."