255.05 (bonds)

Question 1

When are payment & performance bonds mandatory?

Answer 1

Construction or repair of a public building or public work.

Question 2

What additional language to 255.05 is designed to reduce common-law bond arguments?

Answer 2

“Regardless of form” all payment bonds for public works are deemed statutory bonds.

Question 3

If the Court’s acknowledged common law bonds on 255.05 (which they do not) what’s the test to determine a common law vs. statutory bond?

Answer 3

Statutory bonds = meet 255.05 minimum
Common law bonds = excess.

Question 4

Payment bonds on public construction are always statutory. BUT when might a Claimant not be held to the 1 year S/L?

Answer 4

Claimant was ignorant of its rights & bond was facially deficient (ex. no S/L stated) or not recorded.

Question 5

How to courts construe bonds?

Answer 5

Against Surety, in favor of laborer.

Question 6

Why did laborers historically try to have a statutory bond deemed common law?

Answer 6

S/L.
Statutory bond = 1 yr.
Common law = 5 yrs. [FS 95.11 (2)(b)]

Question 7

?????--------REMOVE---------?????
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255.05 P+P bonds
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How did legislature bring clarity to the CL/Statutory debate?

Answer 7

?????--------REMOVE---------?????
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255.05 P+P bonds
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Payment bonds "shall not under any circumstances be converted into common law bonds."

Question 8

?????--------REMOVE---------?????
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255.05 P+P bonds
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For whose benefit are P+P bonds made?

Answer 8

Owner only. It is directed only to those in privity w/ Owner.

Question 9

?????--------REMOVE---------?????
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255.05 P+P bonds
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Sub is not a party to the Payment bond & the bond was not written for his benefit.
Why may sub claim under P+P bond?

Answer 9

?????--------REMOVE---------?????
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255.05 P+P bonds
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He's a 3rd party beneficiary.

Question 10

?????--------REMOVE---------?????
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255.05 P+P bonds
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Why does being a 3rd party beneficiary to the P+P bond work to sub's advantage?

Answer 10

?????--------REMOVE---------?????
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255.05 P+P bonds
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Due to a lack of privity, P+P bonds are inherently common law bonds.  As to subs, there is no requirement that P+P have notice & time limit provisions.

Question 11

?????--------REMOVE---------?????
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255.05 P+P bonds
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Practically, how might sub implement this advantage?

Answer 11

255.05 P+P bonds
———–
P+P bond duly contains the notice & time limits.
As to Ktor, it is a P+P bond as it met the 255.05(2) requirement.
As to sub, that argument does not apply.

Question 12

What did legislature add making the answer always to be a ‘statutory bond’?

Answer 12

The requisite payment bond shall not
under any circumstances be converted into
common law bonds.
———–
Remember - 255.05 applies to those in privity w/ Owner. Doesn’t apply to subs.

Question 13

Unpaid supplier in public K didn’t get paid.
Can unpaid supplier claim vs. the bond even if unpaid supplier missed his deadline? He failed to comply w/ 255.05 notice & time requirements.

Answer 13

NO. Under no circumstances is the bond converted to a common law bond.
———–
“The payment bond provisions shall be construed and
deemed statutory payment bonds . . . & such bonds shall not under any circumstances be converted into
common law bonds.” § 255.05(4), Fla. Stat. (added in 2005).

Question 14

What 4 provisions are not enforceable in a bond?

Answer 14

255. 05 P+P bonds
     - ———-
     (1) Limits on classes protected,
     (2) Restricts venue,
     (3) Effects duration of the bond, or
     (4) Adds conditions precedent to enforcement.

Question 15

?????———–CONFLICT———–?????

S/L

Answer 15

?????———–CONFLICT———–?????

5 yrs - Performance bonds (comm law + stat)
1 yr - Payment bonds (comm law + stat)

Question 16

NEW 2021-
What is now required of claimant under payment bond?

Answer 16

Claim must be signed under oath.

Question 17

How do the penalties differ for negligent assertion of non-payment differ from fraudulent assertion?

Answer 17

Fraudulent (willfully exaggerated) lose all rights under the bond.

Question 18

What happens if, in a construction-management or design-build contract, LG fails to include the cost of design or other non-construction services in the bond amount?

Answer 18

Providers of those services are excluded from protection.
Bond may not be conditioned on performance of such services or payment to persons furnishing such services.

Question 19

What is timeline for payment bond claimant to submit its claim?

Answer 19

b/w 45 days aft start thru 90 days aft finish.

Question 20

County paid its Ktor. Ktor & subktor filed bankruptcy.
Sub-subcontractor did not get paid.
1) P+P bond failed to notify Sub-sub of the S/L.
2) Sub-sub files claim late.
———–
A. S/L applies even if not stated.
B. Bond = common law due to non-conformance.
C. Bond inapplicable in County roads.
D. County @ fault for accepting faulty bond.

Answer 20

A. S/L is enforceable.
BUT an estoppel argument might be made.
———–

American Home Assur. Co. v. Plaza Materials Corp., 908 So.2d 360 (Fla 2005).