Insurance Co. of North America v. Metropolitan Dade County
| Decision Date | 29 October 1997 |
| Docket Number | No. 97-1050,97-1050 |
| Parties | 22 Fla. L. Weekly D2499 INSURANCE COMPANY OF NORTH AMERICA, Appellant, v. METROPOLITAN DADE COUNTY, Florida, Appellee. |
| Court | Florida District Court of Appeals |
Kimbrell & Hamann and James F. Crowder, Jr. and Kenneth C. Borden, Miami, for appellant.
Zelle & Larson and Lowry Barfield and Jeffrey S. Lapin, Miami; Colson, Hicks, Eidson, Colson, Matthews, Martinez & Mendoza, and Joseph Matthews, Miami, for appellee.
Before NESBITT, COPE and FLETCHER, JJ.
In 1984, Metropolitan Dade County hired Interamerican Engineers and Constructors Corporation (Interamerican) to do certain construction work at Opa Locka Airport. Insurance Company of North America (INA) issued a common law performance bond for the work, therefore the provisions controlling the enforcement of a statutory bond are not at issue here. In October 1993, Dade filed a lawsuit for breach of contract against Interamerican, claiming the company had failed to properly attach the roofs on two airport buildings. The complaint alleged that the defects had been discovered in August of 1992, when portions of the roofs blew off during Hurricane Andrew. In October of 1994, Dade obtained a default judgment of $272,339.00, plus pre-judgment interest, against Interamerican. In May of 1996, Dade filed the present lawsuit against the surety, INA. The surety's subsequent motion for summary judgment was denied. Some month's later, on Dade's motion, the trial court adopted the county's position, and entered final summary judgment in Dade's favor for $272,339, plus pre-judgment interest. We reverse.
Dade argued that the INA bond incorporated the terms of the Interamerican contract and that the bond provided that it would remain in effect for such time after the county's acceptance of the project as was set out in the Interamerican contract. Included in that contract was the provision that the contractor would be liable for latent defects, when discovered. Dade alleged that the surety breached the bond terms by refusing to pay for the county's claimed damages or the judgment against Interamerican which followed.
Initially INA argued that the action was time-barred. We disagree with this contention. As the parties both agree, the trial court correctly determined the bond was a "common law" bond. It contained additional language in a number of areas that made the bond's coverage more expansive than a statutory bond. See Martin Paving Co. v. United Pacific Insurance Co., 646 So.2d 268 (Fla. 5th DCA 1994). Therefore, as provided in section 95.11(2)(b) Florida Statutes (1995) the proper limitations period for bringing this action was five years. However, because the bond by its terms tracked the language of the construction contract and because that contract assumed liability for latent defects, as discovered, the limitations period did not bar the instant claim, brought in 1996 on a defect discovered in 1992.
We do however conclude that INA should prevail based on the second argument that it advanced. INA maintained that it was discharged from liability by the county's failure to notify the surety when the defects had been discovered, as required in the bond. The bond provided that upon notification,
the Surety shall:
1. Complete the Contract in accordance with its terms and conditions, or at the county's sole option,
2. Obtain a Bid or Bids for submission to the county for completing the contract in...
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