The lawsuit arose over claims of defective work asserted against a general contractor and its HVAC subcontractor. After a default judgment was entered against the HVAC subcontractor, and paid by the HVAC subcontractor, the general contractor attempted to have judgment summarily entered in its favor. Though successful at the trial level, the judgment was reversed on appeal by Florida’s Sixth District Court of Appeal.
Pickell v. Lennar Homes, LLC arises from claims over deficient construction between a homeowner, general contractor, and HVAC contractor. After purchasing a newly built home from the general contractor, the homeowner separately sued the general contractor and the HVAC contractor. The claims and damages sought in each lawsuit were substantially similar. The homeowner obtained a default judgment against the HVAC contractor, who subsequently paid and satisfied the judgment.
The general contractor moved for summary judgment in its lawsuit with the homeowner, arguing that under the principles of res judicata, the judgment against and satisfaction of it by the HVAC contractor barred any further claims against the general contractor. The trial court granted the motion and entered judgment in favor of the general contractor. The homeowner then appealed.
On appeal, the general contractor argued that due to the contractual relationship between it and the HVAC contractor, they were effectively the same entity for the purposes of the homeowners’ damages, and that this barred the homeowner from seeking the same relief against the general contractor that it had sought and obtained from the HVAC contractor. While Florida’s Sixth District Court of Appeal acknowledged that this type of identity between parties can arise where the contractual relationship effectively binds one party to a judgment obtained against the other (for example between insurers and insureds, or an assignee or successor in interest), it does not apply to a contractor and subcontractor relationship, even where the subcontractor must indemnify the contractor. However, the court also noted that in any future judgment, the contractor would be entitled to a setoff of any amounts already paid to the homeowner by the HVAC subcontractor. The court concluded by reversing the judgment in favor of the general contractor.
The key takeaway from this case for contractors is that the relationships between them and their subcontractors can be complicated, especially where both have been sued for similar claimed defects or damages. While many subcontractor agreements contain indemnification provisions, and those give contractors certain rights, it may not always preclude a judgment against the contractor, or eliminate the need for litigation to establish the right to indemnification.