Justice Can Be Empty And Expensive

JUSTICE CAN BE EMPTY (AND EXPENSIVE)

By: Larry Leiby, Esq. and Robert S. Tanner, Esq.

About the Authors: Larry Leiby, Esq. was the founder and first chairman of the Florida Bar Construction Law Committee in 1976. He is the author of the Florida Construction Law Manual. He is Board Certified in Construction Law and was on the Construction Law Certification Committee that creates and grades the tests for construction law board certification. He was awarded the lifetime achievement award by the Florida Bar Construction Law Committee and teaches construction law at the Florida International University College of Law. He can be reached at leiby@mkpalaw.com. For more information, please visit www.mkpalaw.com. Robert S. Tanner, Esq., has worked with Mr. Leiby in construction matters since 2006, occasionally covers Mr. Leiby's classes at FIU law school, and has been litigating commercial cases for more than 10 years. He can be reached at rob@mkpalaw.com.

The law can be tricky, with its innumerable rules, exceptions to the rules, and exceptions to the exceptions. Then, whether the rule or the exception applies, or the exception to the exception, a dispute shaded in grey almost certainly will require a significant investment of green that ultimately may yield a result in the red. This is why we strongly endorse the idea of preventive legal measures and planning. That route usually costs much less.

You can add to the mix that in some cases a contractor can win - and at the same time lose. A good example is found in Peter A. Basile Sons, Inc. v. Manatee County, 18 Fla. L. Weekly Supp. 451a (12 th Jud. Cir., Appellate, Feb. 25, 2011). In that case, Peter A. Basile Sons, Inc. ("Contractor") had a contract with the local government ("Owner") for earth moving in a road project. In calculating his bid, Contractor planned to offset his costs by using some of the dirt that was onsite and selling the rest.

As it turned out, the dirt was contaminated with arsenic and could not be used at all. Owner had notice about it years before the project but had unintentionally failed to inform Contractor. Contractor submitted a request for additional compensation for the unforeseen costs. Owner's purchasing director denied the claim. Contractor obtained review by the local hearing officer. At the hearing, Owner reconsidered Contractor's claim and conceded to a higher rate ($4.05 per cubic yard) for the excavated, contaminated dirt. When the hearing officer issued his order, he did not mention the price agreement by the Owner. In fact, he disregarded it and, instead, "extrapolated" from the evidence to determine independently the appropriate rate ($2.58 per cubic yard) to be paid to Contractor. Contractor appealed.

On appeal, the Court found that Owner had in fact stipulated to the higher rate. The Court also found that the hearing officer's disregard for Owner's stipulation constituted a violation of a clearly established principle of law. But, the Court latched onto the rule that, "in the administrative context . . . an adjudicator may disregard a stipulation if the adjudicator's finding is based on competent substantial evidence." The Court found that the hearing officer's calculations were based on competent substantial evidence, but observed that "where an adjudicator disregards a stipulation, procedural due process requires that the unfavorably affected party be given an opportunity to present evidence on the stipulated issue. . . . Without notice and hearing, the party may be unfairly blindsided by the adjudicator's decision." Thus, the Court's concern was that the hearing officer had disregarded Owner's stipulation without giving Contractor an opportunity to present evidence and argument on the issue.

The Court's review of the record, however, disclosed that Contractor had, in fact, presented evidence to the hearing officer concerning the stipulated rate. And, because Contractor failed to show the Court that it had additional facts or argument that it would have but did not present to the hearing officer, the Court concluded that there had been no "miscarriage of justice."