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Lexon Insurance Co. v. City of Cape Coral

Florida Court of Appeals, Second District

November 29, 2017

LEXON INSURANCE COMPANY, Appellant,
v.
CITY OF CAPE CORAL, FLORIDA; and COCO OF CAPE CORAL, LLC, Appellees.

         NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED

         Appeal from the Circuit Court for Lee County; Jay B. Rosman, Judge.

          John H. Pelzer of Greenspoon Marder, P.A., Fort Lauderdale; Victor Kline of Greenspoon Marder, Orlando; Robert E. Ferencik, Jr. and Laura A. Baker of Ferencik Libanoff Brandt Bustamante and Goldstein, P.A., Fort Lauderdale; and Bruce L. Mass. of Harris Beach PLLC, Pittsford, New York, for Appellant.

          Edmond E. Koester and Alex R. Figares of Coleman, Yovanovich & Koester, P.A., Naples, for Appellee Coco of Cape Coral, LLC.

          E.A. "Seth" Mills, Jr. and S. Jordan Miller of Mills Paskert Divers P.A., Tampa, for Amicus Curiae The Surety and Fidelity Association of America.

          Debbie Sines Crockett of Cheffy Passidomo, P.A., Tampa; and Lisha Bowen of Lisha Bowen, P.A., Tampa, for Amicus Curiae United Policyholders.

         No appearance for remaining Appellee.

          MORRIS, JUDGE.

         Lexon Insurance Company appeals a final judgment entered in favor of Coco of Cape Coral, LLC (Coco), in Coco's action for breach of $7.7 million surety bond contracts in connection with the development of a subdivision in Cape Coral, Florida, by Priority Developers, Inc. (Priority). On appeal, Lexon argues, among other things, that Coco's claims are barred by the five-year statute of limitations, which Lexon argues began to run in 2007 when Priority abandoned the project and thus breached the surety bonds.[1] We agree, and because this issue is dispositive of the action, we decline to further comment on the other issues raised in this appeal. Accordingly, we reverse the decision of the trial court.

         I. Facts

         On January 31, 2005, the City of Cape Coral adopted Ordinance 14-05, a development order that governs the commercial and residential development of 446.09 acres. The project at issue in this appeal consists of the development of a single-family subdivision called the Village at Entrada. Priority hired contractors who began work on the subdivision improvements in 2005. The site plan permit authorizing the development of the subdivision was scheduled to expire on September 8, 2007.

         Ordinance 14-05 required Priority, as the developer, to "provide a surety bond or certified check in an amount of the estimated cost to complete all required site improvements, as determined by the City." In June 2006, Lexon issued two subdivision bonds totaling $7.7 million. This amount represented the cost to complete the remaining work on the subdivision at the time the bonds were issued. The bonds provided as follows:

NOW, THEREFORE, THE CONDITION OF THIS OBLIGATION IS SUCH, that if the said Principal [Priority] shall construct, or have constructed, the improvements herein described, and shall save the Obligee [the City] harmless from any loss, cost or damage by reason of its failure to complete said work, then this obligation shall be null and void, otherwise to remain in full force and effect, and the Surety, upon receipt of a resolution of the Obligee indicating that the improvements have not been installed or completed, will complete the improvements or pay to the Obligee such amount up to the Principal amount of this bond which will allow the Obligee to complete the improvements.

         The City stopped completing inspections on the project in late 2006 and the contractor stopped work on the project in March 2007, both due to nonpayment by Priority. Photographs taken by the City's inspector on June 13, 2007, confirmed that the contractor was no longer working on the project, and the City's computer system indicated "that the site plan was closed" on that date. ...


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