Summary
The Supreme Court of Florida answered a certified question from the Eleventh Circuit concerning whether Florida Statutes section 627.428 permits attorneys' fees exceeding a performance bond's face amount without proof of independent misconduct by the surety. The court held that, because no applicable statute limits attorneys' fee liability under a performance bond, such fees may exceed the bond amount. The court distinguished its prior decision involving a statutory limitation on guardianship bonds.
Topics
Practice areas
Questions Presented
- Whether section 627.428, Florida Statutes, authorizes recovery of attorneys' fees in excess of a performance bond's face amount from a subcontractor's surety when the fees claimant has not shown independent misconduct by the surety.
- Whether the limitation recognized in Nichols v. Preferred National Insurance Co. for guardianship bonds should apply to construction performance bonds.
Holdings
- Yes. Section 627.428 authorizes an award of reasonable attorneys' fees against a performance-bond surety that may exceed the bond's penal amount, even absent proof that the surety independently engaged in misconduct.
- No. Nichols is distinguishable because its limitation on fee recovery rested entirely on the statutory limitation applicable to guardianship bonds, which does not apply to performance bonds.
Key quotations
“The plain language of that statute fails to address the effect, if any, of penal sums under bonds and is silent regarding whether proof of independent misconduct is necessary for an award to exceed such penal sums.” (at 726)
“The Nichols decision, however, rests entirely on section 744.357's limit to total recovery under guardianship bonds.” (at 727)
“Therefore, we answer the Eleventh Circuit's certified question in the affirmative.” (at 727)
Factual background
David Boland was the prime contractor on a United States Navy training-facility project in Key West, Florida, and subcontracted roofing work to Trans Coastal Roofing. Trans Coastal furnished a $167,800 performance bond naming Boland as obligee and Intercargo Insurance Company as surety. After disputes over the roofing work, Boland obtained a verdict against Trans Coastal and Intercargo, and the district court awarded $276,950.33 in attorneys' fees while limiting Intercargo's fee liability to the bond's $167,800 penal amount.
Procedural history
David Boland obtained a jury verdict against Trans Coastal Roofing and, after a new trial, a second verdict against both Trans Coastal and its surety, Intercargo Insurance Company. The United States District Court for the Southern District of Florida awarded attorneys' fees but limited Intercargo's liability to the $167,800 face amount of the performance bond. Boland appealed, and the Eleventh Circuit certified to the Florida Supreme Court whether fees under section 627.428 could exceed the bond amount absent independent misconduct by the surety.
Remand instructions
The certified question was answered in the affirmative; the opinion does not state a separate remand instruction to the Eleventh Circuit.