In July, Suffolk Construction lost a breach-of-contract lawsuit against a former drywall subcontractor’s bond, and damages could rise dramatically if the judge allows all of the bond’s $3 million in fees sought attorneys and court costs.
Berkley Insurance Co., which prevailed against Suffolk in the federal court case, now faces potential trial costs nearly double the base $4.1 million in damages Suffolk owes the bond.
Most US states, including Florida, require each party to a civil lawsuit to pay their own attorney fees and court costs. But Florida makes an exception if a contract between the plaintiff and the defendant provides for the winning party to recover court costs or the case is decided on the basis of a statute that provides for the winning party to recover those costs.
Charles Comella Jr., an associate attorney at the law firm Chesser & Barr, wrote earlier this year that determining the winner in a civil lawsuit is not as simple in a civil lawsuit because it often involves several different claims and the parties a lawsuit can be won by some but not others.
“It may not be clear which party should be considered the dominant party,” he wrote.
One way to collect attorneys’ fees, he wrote, is if the plaintiff’s opening statement explicitly seeks fees and if the judge decides that one party “prevailed on the most important issue or issues,” Comella wrote .
The Met Square project dispute
The dispute between Suffolk and Berkley involves a five-year dispute over payments that drywall subcontractor Titus Construction Group said was owed on a high-rise, mixed-use project in Miami called Met Square. In July, a federal court judge ordered Suffolk to pay Berkley $4.1 million plus $1.2 million in prejudgment interest.
Typically, a surety indemnifying a contractor can make claims for the contractor and collect any money owed to the contractor while seeking to recover its own costs.
Suffolk attorneys described Titus Construction Group of Fort Lauderdale, a framing, insulation and drywall contractor, as insolvent.
Calls to its Fort Lauderdale phone listing and responses from two attorneys representing the company were not returned by ENR’s press time.
Berkley had sued Suffolk for breach of contract in 2019, alleging that Suffolk owed Titus money for his work at Met Square.
The matter was decided in Berkley’s favor after a non-jury trial in November 2023. In her verdict for Berkley, Judge Kathleen Williams cited a lack of evidence regarding Suffolk’s disputed schedules.
Berkley is now seeking $2.1 million in attorney fees and expert witness fees, in addition to damages and interest, according to a motion filed by the bond in September.
Seven attorneys who worked on the case earned $225 to $250 an hour each, and paralegals earned $125 an hour, Berkley reported in his motion for costs.
Berkley is also asking for $501,000 for expert testimony.
Berkley and Titus are also asking for an additional $391,000 for “database services” related to producing the necessary documents and printing many of them with another $15,000 for technology needed to manage the case and documents, and plus another $15,000 for travel. the costs of lawyers and witnesses.
Suffolk wins in previous lawsuit
Suffolk has asked Judge Williams to offset the costs of his losing verdict, when it’s over, with the amount he was awarded in the state court case.
In that case, Titus sued Suffolk in state court alleging cost overruns and delays in a $1.9 million plastering subcontract signed in 2016 for work on the Miami Central Overbuild, a building of high-rise offices built over the main Brightline train terminal. A judge in March 2023 ordered Titus to pay Berkley $7.7 million.
This verdict was entered as a default judgment, meaning that Titus, who was the plaintiff, did not proceed with its claims against Suffolk or defend against Suffolk’s counterclaims.
To alleviate some of the financial sting of the verdict in federal court, Suffolk is asking Judge Williams to allow Suffolk to deduct whatever Berkley is ultimately ordered to pay from what Titus owed Suffolk from the state court case.
But while Suffolk is arguing for compensation, Berkley argues that it deserves all of the high attorney fees and court costs.
This particular argument hinges on some legal twists and turns.
Berkley notes that Titus’ subcontract with Suffolk required the subcontractor to pay attorney’s fees and court fees if Suffolk prevailed in a legal dispute. But Berkley said Florida statutes require that any contract with such a one-way provision be automatically construed as a two-way obligation. Berkley also claims it is entitled to court costs and attorney fees under its bond agreement with Titus.
Ultimately, Berkley argues, “the court rejected all of Suffolk’s defenses and sought to reduce Titus’ damages.”
“There is no way to describe the outcome of this case other than a complete victory” for Berkley and Titus, the underwriter concludes.
A final decision by the judge on both final court costs and whether the compensation can be used is still likely to be weeks or months away.
