Legal Updates for Construction Litigation
Florida’s 1st DCA Deals Major Blow to Defendants in Construction Defect Cases
In June 2013, Heron’s Landing Condominium Association filed a complaint against D.R. Horton, Inc., Jacksonville, the developer and general contractor of the project in Duval County, Florida. The project consisted of 240 residential units in 20 buildings. In its amended complaint, the condominium association alleged that D.R. Horton violated the Florida Building Code, breached warranties, and was negligent in its construction of the project.
Prior to trial, D.R. Horton filed a motion in limine, seeking to preclude the testimony of the association’s construction defect expert. In the expert’s report, it was recommended that all of the stucco on the project be replaced, based on a limited number of stucco samples. D.R. Horton alleged that the expert should not be allowed to testify about the defects or repair recommendations as his opinions were inherently unreliable and based on improper extrapolation.
During the hearing, the association’s expert testified he had performed “hundreds of building condition assessments and building condition surveys over the years.” The expert also testified that he recommended all 220,000 sq. ft. of stucco needed to be replaced based upon “200 something feet of testing.” The expert explained his opinion was formed based on “[a] lot of visual observation, a lot of indications of problematic conditions with the stucco that we have seen many times on other projects that have led to a need to remove those and the unpredictability of where water actually comes in…” He also testified that a professional engineer performed a peer review of his report for accuracy.
The trial court held the extrapolation by the association's expert was “scientifically reliable,” and the case went up on appeal to the 1st DCA in Florida. The appellate court upheld the trial court’s ruling that the expert used a scientifically reliable and peer-reviewed methodology that was the industry standard that was neither new nor novel.
At trial, D.R. Horton had moved for a directed verdict on two causes of action: violation of the Florida Building Code and breach of the warranty of habitability, both of which were denied.
On appeal, D.R. Horton argued that the association had failed to demonstrate actual damage, as required for a claim of violation of the Florida building code, per Section 553.84, Florida Statutes. The appellate court disagreed, ruling the association's expert had testified regarding defects in the units that needed to be remedied in order to avoid additional loss and damage. The appellate court upheld the denial of the motion for directed verdict, in essence upholding the use of speculative damages as a basis for the award of damages.
D.R. Horton also argued on appeal that the association had failed to establish a breach of the implied warranty of habitability as there was no evidence any of the units were uninhabitable. D.R. Horton argued that, based on the Supreme Court's ruling in Maronda Homes, Inc. of Fla. v. Lakeview Reserve Homeowners Ass’n, 127 So. 3d 1258, 1268 (Fla. 2013), because no units were uninhabitable, no breach of the warranty of habitability had been proven.
The appellate court again disagreed, noting that, although the defects did not force the homeowners to abandon their homes, there was testimony that the units did not meet the ordinary, normal standards reasonably expected of living quarters of comparable kind and quality, which was enough to support the claim.
This ruling out of Florida’s 1st DCA is a major blow to defendants in construction defect cases. Expert witness opinions, which are based on opinion, more than fact, will now be judged as “scientifically reliable.” Coupled with the recent move in Florida from Daubert to the Frye standard, the bar for allowable expert testimony is nonexistent. We do anticipate this ruling will be appealed, but in the meantime, working toward an early resolution of construction defect cases is more important than ever before.
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