The Lowdown on Latent Defects

C O N S T R U C T I V E T A L K

Reese J. Henderson,

Jr., Esq.

Jacksonville, FL

Chair

Sanjay Kurian, Esq.

Fort Myers, FL

Co-Vice Chair

Robert E. Doan, Esq.

Deland, FL

Secretary

of construction; or (4) the

date of completion of the

contract between owner,

and engineer, architect, or

contractor – whichever is

latest. However, Section

95.11(3)(c) also provides

that when an action in-

volves a latent defect, “the

time runs from the time

the defect is discovered or

should have been discov-

ered with the exercise of

due diligence.” Section

95.11(3)(c) is the legisla-

ture’s attempt to protect

engineers, architects, and

contractors from time

barred claims. Snyder v.

Wernecke, 813 So. 2d

213, 216 (Fla. 4th DCA

2002).

(Connued on page 2)

Owners and con-

tractors alike should be

wary of when the statute

of limitations is triggered

for a construction defect

claim. The answer hing-

es, in part, on whether the

defect is considered pa-

tent or latent and whether

the plaintiff is on notice

of his right to a cause of

action.

Understanding Section

95.11(3)(c), Florida

Statutes

Section 95.11(3)(c),

Florida Statutes, provides

lawsuits founded on the

“design, planning, or con-

struction of an improve-

ment to real property,”

must be commenced

within four years of: (1)

owner’s actual posses-

sion; (2) issuance of the

certificate of occupancy;

(3) date of abandonment

The Lowdown on Latent Defects

By Natalie M. Yellow Esq. and Kristen E. Gray

Gray Robinson, P.A., Orlando, FL

H E R E P U T A B / W P I C T U R E O F

S K Y L I N E W / S K Y S C R A P E R T Y P E

B L D I N G S

CONSTRUCTive Talk

CONSTRUCTION LAW COMMITTEE NEWSLE TTER, A CO MMITTEE OF THE

FLOR IDA BAR RE AL PROPERTY, PROBATE & TRU ST LAW SECTION

V O L . V I I S S U E I I

2 0 2 0

Articles and Submissions:

Here at CONSTRUCTive Talk, we are always looking for timely articles,

news and announcements relevant to Construction Law and the

Construction Law Committee. If you have an article, an idea for

an article, news or other information that you think would be of

interest to Construction Law Committee members, please con-

tact: Peter Kapsales at pkapsales@milnelawgroup.com or Avery

Sander at adsander@mdwcg.com

C O N S T R U C T I V E T A L K

2 0 2 0 V O L . V I

I S S U E I I P A G E 2

I N S I D E T H I S

I S S U E :

What Does it Mean for a Defect to be Latent?

Black’s Law Dictionary defines a latent defect as a hidden defect not dis-

coverable upon reasonable inspection. Defect, BLACK’S LAW DICTIONARY

(11th ed. 2019), available at Westlaw. A patent defect is a defect that is apparent

to a normally observant person. Id. Florida courts define latent defects as defects

that are “not apparent by use of one's ordinary senses from a casual observation

of the premises.” Kala Investments, Inc. v. Sklar, 538 So. 2d 909, 913 (Fla. 3d

DCA 1989); Alexander v. Suncoast Builders, Inc., 837 So. 2d 1056, 1058 (Fla.

3d DCA 2002) (“Latent defects are generally considered to be hidden or con-

cealed defects which are not discoverable by reasonable and customary inspec-

tion, and of which the owner has no knowledge.”). Reasonable care is key — a

defect is latent if it is hidden from knowledge and sight and could not be discov-

ered through the exercise of reasonable care. Grall v. Risden, 167 So. 2d 610,

613 (Fla. 2d DCA 1964).

To determine whether a defect is patent or latent, the court must examine

whether the defective nature of the construction was obvious and apparent. In

Kala, a child fell through a screened window in an apartment building, and the

parents proceeded to sue the building owner, and multiple construction entities

associated with the window installation. 538 So. 2d at 912. The parents alleged

the window installation did not comply with the building code, which required

that windows less than 32 inches from the floor have either a guardrail or protec-

tive screening capable of withstanding a certain load of weight. Id. The trial

court held the defects were patent. Id. The appellate court disagreed and rea-

soned, “the test for patency is not whether the object itself or its distance from

the floor was obvious to Kala, but whether the defective nature of the object was

obvious to Kala with reasonable care.” Id. at 913 (emphasis in original). The ap-

pellate court reasoned that if the window screening was of a certain strength and

able to withstand a certain load, then the low placement of the window without a

guardrail would not have violated the building code and would not have been a

defect. Id. The appellate court held that genuine issues of fact remained as to

whether the defect was obvious to the owner and whether the owner should have

known that the window screening was insufficient. Id.

If a professional contends additional testing or investigation of a condi-

tion is required in order to determine the existence or nonexistence of defective

conditions, then in such circumstances, the engineer is describing a latent defect.

Saltponds Condo. Ass'n, Inc. v. McCoy, 972 So. 2d 230, 231-32 (Fla. 3d DCA

2007). In Saltponds, a condominium association sued the architect for alleged

latent construction defects. 972 So. 2d at 231. The condominium association at-

tached a 2005 engineering report to its complaint against the architect. Id. In

some parts of the report, the engineer noted he could not reach a conclusion and

recommended further testing and investigation. Id. at 232. The architect argued

to the trial court that the defects were patent because the engineer’s report noted

he based his conclusions on a visual inspection of the buildings. Id. The appel-

late court rejected this novel argument and noted the fact that defects were obvi-

ous to a trained professional engineer does not mean the defects are automatical-

ly obvious to the condominium association, thereby making them patent. Id. The

court also noted that the defects, to which the engineer recommended further

testing for, were by definition, latent defects—meaning a visual examination was

(Continued from page 1)

(Connued on page 3)

Article: The Low-

down on Latent

Defects

1-4

Case Law

Update

5-8

Construction

Law Committee

Meetings

Info and Upcom-

ing Events

C O N S T R U C T I V E T A L K

2 0 2 0 V O L . V I

I S S U E I I P A G E 3

not enough and further investigation was required to ascertain the existence or

absence of suspected defects. Id. at 232. The appellate court reversed the trial

court’s dismissal and held the engineering report did not conclusively establish

the defects were patent. Id.

When Will the Court Infer an Owner Had Notice of a Latent Defect?

In Florida, “where there is an obvious manifestation of a defect, notice

will be inferred at the time of manifestation regardless of whether the plaintiff

has knowledge of the exact nature of the defect.” Hochberg v. Thomas Carter

Painting, Inc., 63 So. 3d 861, 862 (Fla. 3d DCA 2011). In Hochberg, on their

first night in their newly constructed home, the owners recognized the over-

whelming smell of mold, triggering an allergic reaction in the wife. 63 So. 3d at

862. In November 2003, the owners hired an engineer to evaluate the issue and

the engineer found significant issues with the construction of the house. Id. In

July 2008, the owners sued the construction team for negligent work and argued

the statute of limitations should not have tolled until they knew that it was the

negligence of the subcontractors that caused the defects. Id. at 863. The trial

court held the statute of limitations began running when the owners discovered

the manifestation of the defects and did not begin running when the owners dis-

covered the subcontractors were responsible for the defective construction. Id.

The appellate court affirmed. Id.

The statute of limitations begins to run once a latent defect is discovered,

not once the cause of the defect is known. Havatampa Corp. v. McElvy, Jenne-

wein, Stefany & Howard, Architects/Planners, Inc., 417 So. 2d 703, 704 (Fla. 2d

DCA 1982). In Havatampa, ever since plaintiff took possession of the building

from the construction team in April 1972, the roof leaked. Id. In April 1976, four

years after moving in, plaintiff hired a consultant to assess the roof. Id. The con-

sultant determined the cause of the leak was very complex and that it was not

reasonably possible for the owner to have known the full extent of the specific

nature of the defects that caused the leaks. Id. In August 1976, the owner sued

the designer and construction team for the roofing leaks. Id. The trial court held

that the owner’s claim was time barred because the four-year statute of limita-

tions began to toll when the plaintiff learned of the roof leak, upon taking pos-

session of the building, and not when the plaintiff knew what caused the defect.

Id. The appellate court affirmed the trial court’s holding that plaintiff’s action

was time barred, noting “plaintiff cannot rely on a lack of knowledge of the spe-

cific cause of the problem to protect it against expiration of the four year statute

of limitations.” Id. Similarly, in Almand Const. Co., the owners discovered their

home was settling and causing structural damage. Almand Const. Co., Inc. v. Ev-

ans, 547 So. 2d 626, 627 (Fla. 1989). Plaintiffs later retained an engineer that

opined the unsuitable and defective fill used caused the structural damage. Id.

The court held the owner’s knowledge of the settling and structural damage trig-

gered the statute of limitations to run. Id. The engineer’s report about the unsuit-

able fill did not trigger the four-year statute of limitations since the owners were

already on notice that their home was settling. Id.

However, notice is not inferred simply because there is a leak in a building.

When the manifestation of the defect is not obvious and could be due to causes

other than an actionable defect, the court will not infer the plaintiff had

(Connued on page 4)

(Continued from page 2)

C O N S T R U C T I V E T A L K

2 0 2 0 V O L . V I

I S S U E I I P A G E 4

knowledge at that time. Performing Arts Ctr. Auth. v. Clark Const. Group, Inc.,

789 So. 2d 392, 394 (Fla. 4th DCA 2001) (refusing to infer plaintiff was on no-

tice after discovering a puddle of water inside a commercial building); Snyder,

813 So. 2d at 217 (holding plaintiff’s discovery of several small building cracks

in 1989/1990 did not put plaintiff on notice of his right to a cause of action)

thought one Tampa federal district judge sitting in an appellate capacity in In re

Colony Beach & Tennis Club Association, Inc., 456 B.R. 545 (2011).

Key Considerations for Practitioners

• An owner could forfeit his right to sue if he waits until he can determine

whether the issue is a design or construction defect.

• There are legally significant consequences of a professional’s report that

recommends further testing or investigation into a condition.

• Whether a defect is latent is typically a question for the factfinder to re-

solve.

• The fact that defects were obvious to a trained professional engineer does

not mean the defects are obvious to a layperson and should be considered

patent defects.

_________________________

Kristen E. Gray is a second year law student at Pepperdine Caruso School of Law who assisted

with the preparation of this article while she was a summer associate at GrayRobinson, P.A.

(Continued from page 3)

C O N S T R U C T I V E T A L K

Broward County, Florida v. CH2M Hill, Inc., 4D18-3401, 2020 WL 4197936,

at *1 (Fla. 4th DCA July 22, 2020)

Owner, Broward County (“Owner” or “County”) contracted with Triple

R Paving (“Contractor”) for construction of the Fort Lauderdale/Hollywood Air-

port (“Project”). CH2M (“Engineer”) contracted with the Owner to perform en-

gineering services for the Project. URS would serve as the County’s on site rep-

resentative. Bureay Veritas North America (“BV”) provided quality assurance

materials testing. Taxiway C was opened to traffic in November 2007 and in

June 2008 the Owner noticed rutting and indentations in the asphalt. Contractor

reached final completion in November 2008. Owner withheld portion of final

payment due to the asphalt rutting. Contractor sued Owner for breach of contract

and sued Engineer for professional negligence. Owner brought counterclaim for

breach of contract against Contractor and Engineer and indemnification from

URS. URS and BV settled at mediation. After expert testimony was presented at

the nonjury trial, the trial court entered final judgment in favor, of County and

against Engineer and Contractor. The court also assessed 60% of the damages to

URS, 25% to Contractor, and 15% to Engineer.

The appellate court affirmed the trial court and found that the court

properly allocated fault under the Comparative Fault Statute Section 768.81(c),

Florida Statutes, which provided a “negligence action” is “without limitation, a

civil action for damages based upon a theory of negligence, strict liability, prod-

ucts liability, professional malpractice whether couched in terms of contract or

tort.” The appellate court reasoned the Owner’s breach of contract claim against

Engineer was a professional malpractice action with its basis in the standard of

care established by contract—therefore the breach of contract claim against the

Engineer would be subject to the comparative fault statute, a departure from the

previous rule which imposed joint and several liability. Although the Contractor

was not a professional like Engineer, the court found that the claims against

Contractor fell under the umbrella of the “negligence action” against Engineer,

noting the causes of action against Contractor and Engineer were intertwined.

The appellate court also held that the trial court erred in computing damages be-

cause it computed damages based on Owner’s expenditures for redesign and re-

construction—which was a substantially more robust design.

S.-Owners Ins. Co. v. MAC Contractors of Florida, LLC, 20-10840, 2020 WL

4345199, at *1 (11th Cir. July 29, 2020)

Plaintiff, the estate of decedent who was killed when he fell through the sky-

light of Defendant’s building, sued Building Owner for failure to obtain permits

that created a dangerous condition that led to decedent’s death. Building Owner

listed the County’s Building Official as an expert witness and Plaintiff sought to

depose him. The County, a nonparty, filed a protective order and contended the

Building Official was neither an expert witness or proper fact witness. Trial

court denied the protective order. The appellate court noted the Miami Code of

Ordinances does not permit a county official to testify as an expert without coun-

ty authorization and further reiterated the rule that an expert witness who has not

(Connued on page 6)

Case Law Update

By: Natalie M. Yello,

Esq.

GrayRobinson, P.A.

Orlando, FL

2 0 2 0 V O L . V I

I S S U E I I P A G E 5

C O N S T R U C T I V E T A L K

(Continued from page 5)

been retained and doesn’t have personal knowledge of the facts would not be

permitted to testify as an expert, therefore, the Building Official could not testify

as an expert. The court also rejected Plaintiff’s argument that the Building Offi-

cial could testify as a fact witness with specialized knowledge pertaining to

county procedure. Because the Building Official did not have personal

knowledge of the facts he could not testify as a fact witness. Appellate court de-

termined trial court department from the essential requirements of the law by

denying the County’s motion for protective order.

BBG Design Build, LLC v. S. Owners Ins. Co., 19-14508, 2020 WL 4218108,

at *1 (11th Cir. July 23, 2020)

BBG served as the general contractor for the renovation of a domestic

violence resource center in Fort Walton Beach. Southern Owners Ins. Co.

(“Insurer”) issued a commercial general liability policy (“Policy”) that provided

Insurer would defend and indemnify BBG for covered losses during the policy

period. The Policy also contained a provision denying coverage for bodily injury

or property damage resulting from pollution. Plaintiff, an employee of the re-

source center, sued BBG for bodily injuries she incurred from contact with con-

struction debris and fiberglass particles due to BBG’s failure to manage the con-

struction site. Insurer refused to defend or indemnify BBG due to the pollution

exclusion. Plaintiff sued Insurer for breach of the Policy. Insurer argued it owed

no duty to defend to BBG because the four corners of the First Amended Com-

plaint alleged facts that fell squarely within the policy exclusion.

The district court noted the four corners rule provides “courts generally

determine the existence of a duty to defend based solely on the allegations in the

complaint, with all doubts resolved in favor of the insured.” However, the court

also noted, “in special circumstances, a court may consider extrinsic facts if

those facts are undisputed, and, had they been pled in the complaint, they clearly

would have placed the claims outside the scope of coverage.” The district court

granted summary judgment to Insurer, thereby agreeing with Insurer that these

facts permitted the court to apply the exception to the four corners rule. The dis-

trict court determined it could look to extrinsic evidence outside of the allega-

tions in the First Amended Complaint, including Plaintiff’s presuit demand

package, initial complaint, and medical records. The appellate court noted the

First Amended Complaint omitted a “crucial, undisputed fact in a patent attempt

to ‘plead into coverage,’” namely, uncontroverted facts that placed Plaintiff’s

claims outside the scope of the Policy’s coverage due to the pre-suit allegations

that fiberglass particles, debris, and dust irritated Plaintiff’s eyes, lungs, and skin

when it contaminated the air she breathed. The extrinsic evidence shows the un-

controverted facts establish that the pollution exclusion bars Insurer’s duty to

defend BBG. The appellate court affirmed the district court’s grant of summary

judgment to Insurer and the district court’s analysis that looked to extrinsic evi-

dence.

Case Law Update

2 0 2 0 V O L . V I

I S S U E I I P A G E 6

C O N S T R U C T I V E T A L K

Security First Insurance Company v. John Czeslusniak, 45 Fla. L. Weekly

D1151 (Fla. 3rd DCA 2020).

Where water damage to insured home was caused by water entering

home through walls and windows, an excluded cause, and by water entering

through door, a cause which was not excluded, trial court erred in granting di-

rected verdict in favor of insured on basis of concurrent cause doctrine because

policy contained an anti-concurrent cause provision. Due to the fact the evidence

of water entering through the walls and windows was undisputed and expressly

excluded by policy, entire loss is excluded from coverage due to anti-concurrent

cause provision.

South Winds Construction Corp. v. Preferred Contractors Insurance Company

Risk Retention Group, LLC, 45 Fla. L. Weekly D1152 (Fla. 3rd DCA 2020).

Insurer had no duty to defend construction company in action alleging

that company's employee or agent caused damage to condominium building

where the damage occurred above the third story of the condominium building,

and the policy contained an exclusion for construction damage to a building

more than three stories in height.

Lazaro Hernandez v. Citizens Property Insurance Corporation, 2020 WL

2549534 (Fla. 3rd DCA 2020).

The 3rd District Court of Appeal agreed with the trial court that the dam-

age caused to plaintiff’s home consisting of cracks in walls and floors caused by

vibrations created by blasting operations on a neighboring property is excluded

from coverage by an earth-movement/settlement exclusion in policy. The court

determined that the policy excluded indirect damage to property as result of

earth movement if that damage was triggered by off-site activities.

Edwin Taylor Corp. v. Mortgage Elec. Registration Sys., Inc., 45 Fla. L.

Weekly D1447 (Fla. 2nd DCA 2020).

The appellate court held that a notice of commencement that was not

signed by the property owner, but was instead signed by the general contractor

with the authority of the owner, would not be rendered a nullity as a matter of

law in a lien foreclosure action brought by a subcontractor if the subcontractor

relies on the notice of commencement and otherwise strictly complied with

Chapter 713. The appellate court indicate the notice of commencement must oth-

erwise be in substantial compliance with section 713.07, holding the homeowner

may not use the fact that the notice of commencement was signed by the general

contractor as a sword against a subcontractor due to the fact the subcontractor

does not have a duty to ensure the accuracy of the notice of commencement.

(Connued on page 8)

Case Law Update

By: Brett Henson,

Esq.

Shumaker, Loop &

Kendrick, LLP

Sarasota, FL

By: Joseph Herbert,

Esq.

Norton, Hammers-

ley, Lopez &

Skokos, P.A.

Sarasota, FL

2 0 2 0 V O L . V I

I S S U E I I P A G E 7

C O N S T R U C T I V E T A L K

(Continued from page 7)

Kokhan v. Auto Club Ins. Co. of Fla., 2020 WL 2550087 (Fla. 4th DCA 2020).

The Insured brought an acon against the Insurer for breach of the in-

surance contract alleging the homeowner’s pool suered a leaking drain pipe

which caused damages to the property. The appellate court found the trial

court erred by awarding summary judgment against the homeowner indicang

the all risk policy excluded coverage for the damage under a water damage ex-

clusion. The appellate court looked to the language of water damage exclusion

provisions in the policy, which excluded coverage for naturally-owing water

and waterborne material exisng outside of the plumbing system. An argument

regarding the policy's “wear and tear” exclusion, was not presented for review

by the trial court and was not preserved for appeal.

Case Law Update

2 0 2 0 V O L . V I

I S S U E I I P A G E 8

C O N S T R U C T I V E T A L K

SUBMISSIONS

Do you have an article, case

update, or topic you would

like to see in CONSTRUCTive Talk?

Submit your article, note, or

idea to:

pkapsales@milnelawgroup.com

adsander@mdwcg.com

Editor’s Corner:

Peter J. Kapsales, Esq.

Co-Editor

Milne Law Group, P.A.,

Orlando, FL

Avery D. Sander, Esq.

Co-Editor

Marshall Dennehey

Jacksonville, FL

2 0 2 0 V O L . V I

I S S U E I I P A G E 9

Construction Law Committee Meetings

Join us for our upcoming Construction Law Committee meetings. Benefits of

the meetings include 1 hour of CLE each meeting, a timely update on devel-

oping case law, statutes and administrative rulings, and informative reports

from our subcommittees.

The CLC meetings occur the second Monday of every month beginning

promptly at 11:30 a.m. EST. The meetings are conducted via Zoom, which

is now our standard meeting format. If you wish to attend by Zoom vid-

eo, the link, meeting ID and password are below. If you do not, there is a

toll-free conference call number below the link . You may call that num-

ber to hear the audio only. We will not be using the traditional confer-

ence call-in number.

Join Zoom Meeting

https://carltonfields.zoom.us/j/94765808241?

pwd=Nnp6UTBxMnE0L2RMU1dXbWlxVjFRUT09

Meeting ID: 947 6580 8241

Password: RPPTLCLC

Toll Free:

888 788 0099 US Toll-free

877 853 5247 US Toll-free

Meeting ID: 947 6580 8241

Password: 79471039

C O N S T R U C T I V E T A L K

Subcommittee Practice-Get On Board

Interested in getting involved? Contact one of the persons listed below.

ABA Forum Liaison - Claramargaret Groover ([email protected])

ADR - Deborah Mastin ([email protected]) and Giselle Leonardo

(gleonardo@gl-legal.com)

Certification Exam - Joe Dill ([email protected])

Certification Review Course - Mindy Gentile ([email protected]) and

Elizabeth Ferguson ([email protected])

Construction Law Institute - Jason Quintero ([email protected])

Construction Litigation - Brett Henson (bhenson@slk-law.com) and Natalie

Yello (natalie.yello@gray-robinson.com)

Construction Regulation - Chris Cobb ([email protected])

Construction Transactions - Claramargaret Groover ([email protected])

Contractor’s University - Lee Weintraub ([email protected]) and Cary

Wright ([email protected])

CLE Subcommittee - Katie Heckert ([email protected]) and Frank

Moya ([email protected])

Legislative Subcommittee - Sean Mickley ([email protected])

Membership Subcommittee - David Zulian ([email protected])

Newsletter - Peter Kapsales ([email protected] ) and Avery Sand-

er ([email protected])

Small Business Programs - Lisa Colon ([email protected])

Website Subcommittee - Jade Davis ([email protected]) and Hardy Rob-

erts (hroberts@caryomalley.com)

Info & Upcoming Events

Interested in joining the

Construction Law Com-

mittee?

It’s as easy as 1, 2, 3:

. Become a member of the

Florida Bar.

2. Join the Real Property

Probate and Trust Law Sec-

tion.

3. Email Reese Henderson at

reese.h end erson@ gra y-

robinson.com advising you

would like to join the CLC

and provide your contact

information.

2 0 2 0 V O L . V I

I S S U E I I P A G E 1 0