Dec. 6, 2017 – A Greenspoon Marder team secured the reversal of a final judgment entered in favor of Coco of Cape Coral, LLC against Lexon Insurance Company in Coco’s lawsuit for breach of $7.7 million surety bond contracts related to the development of the Village at Entrada subdivision in Cape Coral, Florida.
In 2005, a developer began work on a residential subdivision. Lexon issued two subdivision bonds totaling over $7.7 million in June 2006 “to complete all required site improvement, as determined by the City” in the event the developer defaulted in doing so. The City stopped completing inspections on the project in late 2006 and the general contractor stopped work on the project in March 2007, both due to nonpayment by the developer.
In October 2010, the City of Cape Coral contacted Lexon stating that the City “would like to place a claim to have the outstanding work on this project completed.” However, the City did not move forward with the claim because of potential interest from other buyers of the project. In March 2012, Coco purchased the project for $6.2 million.
On October 23, 2012, the City filed a lawsuit against Lexon for breach of contract and for declaratory relief. The City then assigned its claims to Coco. After a bench trial in November 2015, the court entered judgment on the bonds for Coco and against Lexon on March 1, 2016.
On appeal, the Greenspoon Marder team argued that Coco’s claims are barred by the five-year statute of limitations which began in 2007 when the developer abandoned the project. On November 29, 2017, the Second District Court of Appeal of Florida reversed the trial court’s judgment against Lexon and remanded for entry of judgment in Lexon’s favor, stating, “The City’s action filed in October 2012 was filed beyond the five-year statute of limitations and was therefore time-barred.” As a result, the firm successfully reversed a $7.3 million compensatory damages judgment. This ruling will also result in the reversal of a companion judgment awarding Coco over $1.2 million in prejudgment interest, and avoids liability for attorneys’ fees and other potential statutory claims.