Court Reverses Leave to Assert Punitive Damages Against Road Contractor Over Improper Use of Property as a Staging Area
JVA Engineering Contractor Inc v. Doral 10 LLC arises from claims of improperly using a third party’s property to stage road construction. In January 2019, a roadway contractor entered into a contract with a municipality to work on a road construction project. Two properties next to the project were considered for staging areas for the work. While the contractor and municipality met with one of the property owners and agreed to use that property as the staging area, the contractor ultimately used the second property as a staging area for two months without the owner’s consent. The contractor removed its materials from the property shortly after the property owner gave it notice to do so.
The property owner then sued the city, the roadway contractor, and the supervising engineer for damages it claimed to have suffered by the use of the property. After several years of litigation the property owner sought leave to amend its complaint to seek punitive damages against the contractor on the basis that the contractor intentionally trespassed on the property and had negligently contaminated the property as a result. After a hearing, the court granted the motion, finding that the property owner had made a reasonable showing of evidence for the recovery of punitive damages as a result of intentional misconduct or gross negligence. The contractor appeals.
On appeal, Florida’s Third District Court of Appeal reversed the trial court’s decision. First the court noted that in order to establish a claim for punitive damages against a corporation, the party seeking those damages must meet the following criteria set forth in 768.72(3), Florida Statutes:
(3) In the case of an employer, principal, corporation, or other legal entity, punitive damages may be imposed for the conduct of an employee or agent only if the conduct of the employee or agent meets the criteria specified in subsection (2) and:
(a) The employer, principal, corporation, or other legal entity actively and knowingly participated in such conduct;
(b) The officers, directors, or managers of the employer, principal, corporation, or other legal entity knowingly condoned, ratified, or consented to such conduct; or
(c) The employer, principal, corporation, or other legal entity engaged in conduct that constituted gross negligence and that contributed to the loss, damages, or injury suffered by the claimant.
The court noted that in the property owner’s motion it made no reference to any conduct that would satisfy the criteria of the statute, and in deed that the motion made no mention of the roadway contractor’s corporate conduct that would trigger the application of the statute.
While the opinion does not go into the details of the alleged conduct that the property owner claimed should trigger entitlement to punitive damages, the motion for leave to amend in the trial court docket goes through an extensive description of unauthorized use of the property, the items stored there, and the issues caused by the use of the property as a staging area. You can read the motion by clicking here.
The key takeaway for contractors from this case should be to make sure that proper authorization is obtained before crossing another’s property, and to be aware that even corporations can be sued for punitive damages where certain criteria are met.
Jason Lambert is a Florida Board Certified Construction Attorney and Partner in the Construction Industry Practice Group at Hill Ward Henderson, in Tampa, Florida. He is also the founder and chief contributor to the Hammer & Gavel construction law blog. Jason focuses his practice on representing contractors, subcontractors, and materials suppliers throughout the state of Florida. Before law school, Jason spent a decade working in the construction industry, primarily as a project manager and operations director for both new construction and remodeling. He can be reached at jason.lambert@hwhlaw.com or 813-227-8495.
