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Pace Const. Corp. v. OBS Co., Inc.

Florida Court of Appeals, Second District

September 9, 1988

PACE CONSTRUCTION CORPORATION, a foreign corporation, Transamerica Insurance Company, a California corporation, and Seaboard Surety Company, a New York corporation, Appellants,
v.
OBS COMPANY, INC., Appellee.

Rehearing Denied Oct. 5, 1988.

J.M. Crowder and John B. Grandoff, III of Allen, Dell, Frank & Trinkle, Tampa;

Page 738

J.D. Humphries, III of Varnes, Stephens, Wingfield, McIntyre & Humphries, Atlanta, for appellants.

David E. Gurley and Donald D. Clark of Abel, Band, Brown, Russell & Collier, Chartered, Sarasota, for appellee.

SCHOONOVER, Judge.

The appellants, Pace Construction Corporation, Transamerica Insurance Company, and Seaboard Surety Company, challenge a final summary judgment in favor of the appellee, OBS Company, Inc. We find that the trial court erroneously interpreted a subcontract between Pace and OBS and, accordingly, reverse.

Pace, a general contractor, entered into a contract with Shumann Investments, Inc. (the owner) for the construction of "Outlet World of Pasco County." Transamerica and Seaboard provided the labor and material payment bond on the project. Pace subsequently entered into a subcontract with OBS whereby OBS was to perform the framing, dry wall, insulation, and stucco work on the project.

After satisfactorily completing the work described in the subcontract agreement, OBS was unable to collect final payment from Pace and unable to collect against the payment bond and, therefore, filed a two count complaint against the appellants. Count I sought damages against Pace for breach of contract, and count II sought damages against the payment bond issued by Transamerica and Seaboard. The appellants asserted as an affirmative defense that final payment was not due to OBS because Pace had not received final payment from the owner for OBS's work.

The parties all agreed that no genuine issues of material fact existed and respectively moved for summary judgment. The dispute centered upon the following provision of the subcontract between Pace and OBS:

6.3 In addition to any other requirements of this Subcontract and the Contract Documents, Final Payment shall not become due unless and until the following conditions precedent to Final Payment have been satisfied: ... (c) receipt of Final Payment for Subcontractor's work by Contractor from Owner....

The trial court determined that the foregoing provision did not clearly shift to OBS the risk of nonpayment by the owner and entered summary judgment in favor of OBS holding the appellants jointly and severally ...


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