Earlier this year, the Miami Beach Convention Center was home to Super Bowl LIV. Fans who attended were able to see the convention center’s recently completed $620 million renovation, which includes an added 253,000 square feet of space, 10 new meeting rooms, and LEED Silver certification. Although the Super Bowl went off without a hitch, the Miami Beach Convention Center will now host another conflict: a $90 million lawsuit.
Below, we discuss the ongoing legal dispute between the City of Miami and the construction firm that worked on the renovations. Hopefully, with a little insight from our Miami construction lawyers, your company will be able to avoid conflict like this, reach project completion, and secure a sizable profit.
“Refused to Provide Compensation”
As reported by the Miami Herald, a construction firm has filed a lawsuit in Miami-Dade Circuit Court claiming that the city “refused to provide compensation” to the firm or its subcontractors. The construction firm is seeking over $90 million for retainage and extra work following design changes.
Take it from our Miami construction attorneys: always review your construction contracts to ensure that they clearly define how change orders are to be delivered and handled. Contract review is vital for defining scope of work, payment schedules, and project expectations — some of the leading causes of litigation when not clearly laid out in the contract.
Tensions have been rising on this project for some time now. In their lawsuit, the firm alleges that the city was still changing design plans while refusing to allow for time extensions even as the project fell behind and missed its Aug. 23, 2018, scheduled date of completion. They further argue that the city failed to pay for delays caused by Hurricane Irma in 2017 and pressured them into speeding up work in anticipation of planned events — work that the firm alleges has not been paid for.
Pushback from the City
Thanks to a statement released by city manager Jimmy Morales, it’s clear that this conflict will not be resolved amicably. “I find it shocking, given that [the construction firm] has delayed this project for nearly 1.5 years and has yet to finish, that they have the gall to file a lawsuit against us.” Morales continues, “Frankly, the city is the one entitled to damages, not [the construction firm]. We are not going to litigate this through the newspapers, and look forward to our day in court.”
Morales further argues that the construction firm in question has yet to reach substantial completion on the project, leading to the city withholding retainage. Despite the apparent surprise of the city manager, litigation is inevitable when delays, change orders, and withheld payments affect a project.
What Can Construction Companies Take Away from This?
It’s never enjoyable to see construction firms and local governments enter into a dispute, especially when the end product is set to be enjoyed by so many people. From the construction firm’s perspective, they were left with little choice but to file a lawsuit. We hope that the dispute described throughout this article is resolved swiftly, and we would like to see other construction firms avoid similar disputes by helping them be prepared, stay informed, and avoid conflict altogether.
We’ve already discussed change orders and the importance of contract review. Next, you should be aware of retainage laws that apply to your projects. In Florida, HB 101 aims to lower the maximum retainage amount on public projects from 10 percent to 5 percent. If signed into law, it will go into effect Oct. 1, 2020. Funds must still be released 30 days after substantial completion of a project (60 days on projects valued over $10 million).
Related: How to Navigate Retainage Challenges
Alternative Dispute Resolution
Litigation is a last resort that should only be explored when construction companies have exhausted all other options. At Cotney Construction Law, our Miami construction lawyers offer alternative dispute resolution (ADR) services that resolve disputes quickly, amicably, and privately. ADR methods like mediation and arbitration can be far more time- and cost-effective than litigation. If you’ve found yourself embroiled in an escalating dispute, explore our dispute resolution services.
A Team to Help You Avoid Disputes
At Cotney Construction Law, we offer a number of services designed to help construction companies avoid situations like the one experienced on the Miami Convention Center renovation. We offer contract review, dispute resolution services, and legal insight that can not only help you resolve costly disputes but help you avoid them. Before your company breaks ground on its next big project, be sure to have an experienced Miami construction lawyer with Cotney Construction Law on your side.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.