Case Law Update : Setoffs and the “ Prevailing Party ” Determination
By Jacob C . Duval , Carlton Fields 813-229-4238
The Diaz Fritz Group , Inc . (“ DFI ”) was the general contractor for the construction of an addition to the University Community Hospital in Tampa , Florida . DFI hired a subcontractor , Hayward Baker , Inc . (“ HBI ”), to perform foundation work on the project in exchange for $ 290,000 . When HBI completed its work , DFI refused to pay claiming that HBI was responsible for damage caused to the hospital ’ s existing building . HBI denied responsibility and filed a claim of lien in December 2009 for the amount of the subcontract . The lien was transferred to a payment bond held by the surety , Westfield Insurance Company (“ Westfield ”), and three lawsuits subsequently ensued :
■ 2010 Case — HBI sued Westfield to enforce its claim of lien against the bond .
■ 2011 Case — DFI sued HBI for breach of contract , seeking to recover the cost of remediating the damage to the hospital , totaling $ 581,437.38 .
■ 2012 Case — DFI sued HBI ’ s insurance carrier (“ Zurich ”) for the same damages claimed in the 2011 case .
The 2012 case settled and Zurich paid DFI $ 450,000 . The 2010 and 2011 cases were consolidated and tried before a jury . Before trial , the parties stipulated that HBI was entitled to the full amount of the subcontract —$ 290,000 . At trial , the jury found that HBI was responsible for $ 266,569.32 of the damage caused to the hospital . HBI then moved to set off the $ 450,000 DFI had received from Zurich against the damages entered against HBI in the jury trial . The trial court granted HBI ’ s setoff motion , which resulted in DFI
10 DITCHMEN • JANUARY 2021