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Florida Statute Chapter 558: Changes are Brewing
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Florida Statute Chapter 558: Changes are Brewing

March 23, 2015 Construction Industry Legal Blog

Reading Time: 3 minutes

By: James O. Birr, III, Esq.

Florida Statute Chapter 558 was adopted to serve as an alternative method to resolve construction and design disputes in order to reduce the need for litigation, while protecting the rights of property owners.   While the nuances of Florida Statute Chapter 558 are outside the focus of this post, there are some proposed changes making their way through the Florida legislature. See House Bill 87 and Senate Bill 418. These changes include specific information to be included in the notice of claim, frivolous claims, sanctions, and the exchange of documents.

Notice of Claim under Section 558.004

The notice of claim gets the Chapter 558 process started, by providing potentially responsible parties with information regarding the construction and/or design defects. In some cases, this notice lists many construction and/or design defects, but provides little or no indication as to the location or factual basis for the defect. Thus, this lack of specificity can leave responsible parties guessing as to the nature and/or basis of the defect. The proposed legislative changes to Chapter 558 requires the property owner to “sufficiently identify” the specific location of each alleged defect to enable responsible parties to locate all of the defects without “undue burden.” Under the proposed changes to section 558.004, the notice must also identify the specific building code provisions, project plans, specifications, project drawings or other documentation that serves as the basis for each of the alleged defects.   The failure to include this information in the notice of claim is prima facie evidence of a defective notice of claim.

Response to the Notice of Claim

After receiving the notice of claim, the responsible party has various options in response. Among other options, the responding party can dispute the claim or it can offer to make repairs. If the responding party is willing to settle all or a portion of the claims, the proposed legislative changes to Chapter 558 requires a statement of the party’s willingness to settle through a monetary offer, the amount of the settlement offer, as well as a timetable for payment of the settlement funds.

Frivolous Claims and Sanctions

Florida law provides a mechanism for monetary sanctions for frivolous claims and lawsuits. See Fla. Stat. 57.105. The proposed legislative changes to Chapter 558 include a similar provision for frivolous claims. According to the proposed legislation, sanctions will be imposed for claims that have been resolved prior to suit and claims the owner or its counsel knew or should have known were not supported by material facts to establish the claim or would not be supported by the application of then-existing law to those material facts. If deemed frivolous, the court shall award sanctions that can include attorney fees, inspection, testing and related costs.

Document Exchange

During the Chapter 558 process, the parties are required to exchange documents to the extent they exist. This document exchange includes photographs, videos, plans, specifications, and expert reports. The proposed legislative changes to Chapter 558 required the claimant to provide maintenance records and other documents related to the discovery, investigation, causation and extent of the alleged defects identified in the notice of claim.

While the proposed changes to Chapter 558 have not yet been signed into law, it appears the Florida legislature is intent on making some changes that could have significant impact on the pre-suit process of resolving construction and design defect claims.

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