Skip to main content

Appellate Court Narrowly Interprets Subcontract’s Venue Selection Provision in Payment Bond Lawsuit Against Surety

Analysis of Southeastern Concrete Constructors, LLC v. W. Sur. Co., No. 2D20-2475, 2021 WL 2557297, (Fla. 2d DCA June 23, 2021)

One frequent consideration on the minds of those drafting construction contracts is the actual reach of contract provisions that use broad, expansive language, including the often-used phrase “relate to.” Cf. California Div. of Labor Standards Enforcement v. Dillingham Constr., NA, Inc., 519 US 316, 335 (1997) (Scalia concurring) (“…the ‘relate to’ provision according to its terms was a project doomed to failure, since, as many a curbstone philosopher has observed, everything is related to everything else.”). The Second District Court of Appeal recently faced a provision with similar language in narrowly interpreting a subcontractor’s venue selection clause in Southeastern Concrete Constructors, LLC v. Western Surety Co., 2D20-2475 (June 23, 2021). There, a subcontractor brought a payment bond claim against a surety in Hillsborough County, Florida. The surety filed a motion to transfer venue to Levy County, citing the venue selection clause in the subcontract between the subcontractor and general contractor. That clause stated, “[a]ny suit relating to the Subcontract, or the performance of Prime or Subcontractor shall be commenced in the state court of competent jurisdiction in Levy County, Florida, and shall remain there until its conclusion.” The trial court agreed with surety, and ordered that the case be transferred to Levy County. The Second District Court of Appeal reversed the trial court, setting forth multiple reasons, including that: 1) the general contractor was not a party to the lawsuit brought by the subcontractor, 2) the complaint did not bring any counts related to breach of the Subcontract, 3) the venue provision in the Subcontract did not mention either the surety or the surety bond, 4) the payment bond and the subcontract were “separate and distinct”, and 5) the surety agreed to the payment bond without a venue selection clause. Also, in discussing its reasoning, the Court looked to the opinion of Insurance Co. of North America v. Jetstar Dev., 515 So. 2d 272 (Fla. 4th DCA 1987), which applied a venue selection clause in a subcontract to a subcontractor’s suit against a surety. The Court pointed to different facts of Jetstar, including that the subcontractor also brought suit against the contractor, in addition to the surety; moreover, the subcontract at issue contained a more detailed venue selection clause that specifically mentioned the particular parties it applied to, including the surety.

Although the decision is likely limited to the facts of this particular case, authors of construction contracts should be aware of how courts may, in certain circumstances, narrowly interpret such venue selection provisions.

Related Practices
YOU MIGHT ALSO LIKE
Speaking Engagement May 24, 2023
Michael Larmoyeux, Jr. participates in a panel titled Analyzing South Florida's Development Pipeline: Major Projects, Active Job Sites And Beyond at Bisnow's South Florida Construction and Development Summit.
Client Alert May 12, 2023
On April 13, 2023, governor Ron DeSantis signed Senate Bill 360 (“SB 360”) into law, which drastically reduces the time limit for property owners to file suit against builders and construction professionals for construction defects and imposes a more stringent standard for bringing a cla...
Speaking Engagement April 14, 2023
Joy Spillis Lundeen participates in a panel titledTrends in Design-Assist and Design Delegationat the ABA Forum on Construction Law, where panelists tackle the important questions that arise in contractual relationships concerning the allocation of risk and liability and responsibility for producing...
VIEW MORE