Triple R Paving, Inc. v. Broward County
774 So. 2d 50, 2000 WL 1584452 (2000)
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Rule of Law:
A 'no damages for delay' clause in a construction contract is enforceable, but it will not bar a contractor's recovery of delay damages if the delay was caused by the owner's (or its agent's) fraud, bad faith, active interference, or willful concealment of foreseeable circumstances that impact timely performance.
Facts:
- Broward County entered into a road construction contract with Triple R Paving, Inc. ('Triple R'), using a project design prepared by the engineering firm Frederic R. Harris, Inc. ('Harris').
- The contract included a 'no damages for delay' clause, stating that a time extension was the sole remedy for delays, unless a delay was caused by the County's 'fraud, bad faith or active interference.'
- Prior to the project, Harris, the County's agent, was aware of a significant horizontal sight distance design flaw in the bridge plans.
- During the project, Triple R proposed a design change. In reviewing it, a Harris representative agreed to personally check the sight distance against standards but did not disclose the known, pre-existing flaw to Triple R.
- The sight distance flaw was discovered mid-construction, which impeded Triple R's ability to proceed efficiently and caused significant delays while a solution was developed.
- Two other unrelated delays also occurred: one from a utility company's (FP & L) equipment problems and another from a previously unknown design flaw related to a detention pond's elevation.
Procedural Posture:
- Triple R Paving, Inc. ('Triple R') sued Broward County in a Florida trial court for monetary damages arising from construction project delays.
- Broward County filed a third-party complaint against its design engineer, Frederic R. Harris, Inc. ('Harris'), seeking indemnification.
- Following a trial, a jury returned a verdict awarding Triple R damages for loss of efficiency but denied its claim for home office overhead damages.
- The trial court denied Triple R's motion for pre-judgment interest on its damage award.
- Harris, as a third-party defendant, appealed the judgment to the District Court of Appeal of Florida, Fourth District, arguing the 'no damages for delay' clause barred Triple R's recovery.
- Triple R cross-appealed to the same court, challenging the denial of its home office overhead damages and pre-judgment interest claims.
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Issue:
Does a construction contract's 'no damages for delay' clause bar a contractor from recovering monetary damages for delays caused by the owner's design agent knowingly concealing a design flaw?
Opinions:
Majority - Stone, J.
No, a 'no damages for delay' clause does not bar recovery when the delay is caused by the owner's agent knowingly concealing a design flaw. While such clauses are generally enforceable to bar damages for ordinary delays, they are vitiated by fraud, bad faith, or active interference. The court found that Harris's prior knowledge of the design flaw, combined with its failure to disclose it to Triple R while simultaneously agreeing to verify the flawed design, constituted 'willful concealment of foreseeable circumstances' and a 'failure to cooperate in the other party's performance.' This conduct provided sufficient evidence of bad faith or active interference to create an exception to the 'no damages for delay' clause, allowing Triple R to pursue damages for that specific delay. However, the delays related to the utility company and the unknown pond flaw were not attributable to the County's bad faith and were therefore barred by the clause.
Analysis:
This decision clarifies the high threshold for overcoming a 'no damages for delay' clause in Florida construction law. It establishes that while mere negligence or bureaucratic inefficiency is insufficient, 'willful concealment' or a 'knowing delay' by an owner's agent can constitute the bad faith or active interference required to void the clause's protection. The ruling reinforces that owners and their agents cannot hide behind exculpatory clauses when they possess and conceal critical information that will inevitably cause project delays. This precedent provides a pathway for contractors to recover damages not just for overt, malicious acts, but also for a knowing and silent failure to cooperate.
