Litigation and Appeal – Creative Argument for Condo Assoc

After a general contractor abandoned a condominium project mid-construction, we helped the owners association win a settlement that was double their stated goals.

Situation

This dispute arose from an ocean front condo project in Northwest Florida. The original general contractor abandoned the project during construction and its surety that posted a performance bond refused to fund the project’s completion. Later, the completion contractor hired by the developer went out of business. Ultimately, the developer self-performed the completion of the project. Subsequent to completion, the developer filed an arbitration against the original contractor’s performance bond which included estimated costs to repair construction defects. Unfortunately for the association, the developer and surety settled their arbitration, the developer disappeared with the settlement funds, and the construction defects were never repaired. Before retaining our firm, the association met with other major law firms but most advised that the association had no viable legal recourse.

Outcome

Existing reported case law held that the association does not have standing to sue by a performance bond. Rather than concede, Kirwin Norris filed suit against the surety on the bond under the novel theory that the associate was the successor of the developer. The surety filed a motion for summary judgment arguing that because the association was not a named oblige under the bond, the association could not assert a claim against the bond. The surety won that summary judgment at the trial level. Unwilling to give up, Kirwin Norris was able to successfully draft and argue a victory on appeal. Not only did the appellate court reverse the trial court, it also adapted Kirwin Norris’ argument that the association was the successor to the developer with rights under the bond. Faced with this reported decision, the surety agreed to fund a settlement in exchange for the association’s consent to the

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