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Case Law Alerts

General Contract May Be Entitled to Award of Attorneys’ Fees Against Subcontractor, Despite Jury’s Apportionment of Damages

Babin Builders and Development Inc. v. Quinones, Fla. 1st DCA, No. 1D2022-4103, February 12, 2025

April 1, 2025

by Lindsay G. McCormick

For construction defect litigation, many times we are called into action to defend a subcontractor who has been included as a third party to the primary dispute between an owner and a general contractor. Through the use of third-party complaints, general contractors are consistently including their implicated subcontractors within the primary litigation with the owner in an effort to “pass-through” any determined liability to its subs.

An interesting issue that was recently brought up on appeal was whether a general contractor is entitled to an award of attorneys’ fees against its subcontractor based on contractual prevailing party language if the jury apportions a greater percentage of damages to the general contractor rather than the implicated subcontractor. 

In Babin Builders and Development Inc. v. Quinones, the trial court rejected the general contractors’ motion for attorneys’ fees against its stucco subcontractor because the jury had apportioned 60% of damages to the general contractor and 40% of damages to the stucco subcontractor. Therefore, the trial court determined that the general contractor was not the prevailing party and was not entitled to attorneys’ fees.

On appeal, Florida’s First District Court of Appeal reversed the trial court’s ruling. The appellate court, instead, focused on the third-party claims asserted by the general contractor and whether there was a finding of breach of contract. It was determined that the jury did issue a finding for both breach of contract and violation of building code counts on behalf of the stucco subcontractor and, further, there was no finding that the general contractor contributed to these breaches. Therefore, despite a greater percentage of damages being allocated to the general contractor, that was not the controlling factor. Instead, the issue of attorneys’ fees was limited to the third-party claims only. Because the general contractor prevailed in the breach of contract and building code violations claims, the District Court reversed the trial court’s order and remanded the matter for an entry of attorneys’ fees incurred on the third-party claims only. 

It is important to pay attention to such nuances in interpretation of contract language, including attorneys’ fees provisions in considering risks and exposure. 

 

Case Law Alerts, 2nd Quarter, April 2025 is prepared by Marshall Dennehey to provide information on recent developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2024 Marshall Dennehey, all rights reserved. This article may not be reprinted without the express written permission of our firm.

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On July 23, 2026, the Ohio Supreme Court issued a rare opinion on the binding effect of an appraisal award in a property insurance policy.  The Court in One Church held: A binding appraisal award will not be set aside unless an error is so palpably wrong that it undermines the intent of the agreement, such as corruption or gross mistake, not a mere error of judgment—To plead a claim of mistake with particularity as required by Civ.R. 9(B), facts alleged in a complaint must constitute the elements of mistake—Allegation that additional, hidden damage was discovered after appraisal award failed to state a claim of mistake that could justify setting aside binding appraisal.  The case arose out of a claim brought by One Church against its insurer, Brotherhood Mutual Insurance Company for roof damage from a storm. Pursuant to the terms of the insurance policy, the parties agreed to submit the matter to appraisal. The two appraisers inspected the building, and both appraisers agreed that the damages were $313,271.98. The insurer paid the agreed appraised amount.  Thereafter, the insured submitted a claim for an additional $206,663.09 in damages. The insured argued that these additional damages were not discovered until after the repairs began, and that they should be permitted to submit an additional claim, even though there had already been a binding appraisal of damages. The insurer refused to pay the additional damages, and the insured sued for breach of contract and bad faith.  In the trial court, the insurer moved to dismiss for failure to state a claim, arguing that the binding appraisal award barred any further claims. The insured took the position that additional hidden damages could not be discovered until after the repairs began, and therefore there was a mutual mistake. The trial court dismissed the case on the insurer’s motion, because there was no “evidence of fraud, misfeasance, or mistake”. The Court of Appeals agreed that appraisal awards are generally binding, but noted that an appraisal award can be set aside for fraud or manifest mistake. The Court of Appeals reversed and remanded the case to the trial court, finding that the insured had pled mistake with sufficient particularity. The insurer appealed to the Ohio Supreme Court. On appeal, the Ohio Supreme Court reversed the Court of Appeals, and reinstated the trial court decision dismissing the case for failure to state a claim upon which relief can be granted. The Supreme Court found that since the insured had already demanded appraisal, and the appraisal award was binding, “something more than error of judgement, such as corruption in the arbitrator, or gross mistake” must be pled with particularity, and proven for the insured to override the appraisal award. Since the complaint did not allege fraud or manifest mistake with sufficient particularity, something more than a mere error of judgment, the complaint was insufficient to state a claim.  The complaint in this case did not challenge the appraisal award. It pled that additional damages were discovered that were not apparent when the appraisal was done. It did not specify “who discovered the damages, how they were discovered, where they were found, why they were previously hidden, or why they rise to the level of a manifest mistake that the “appraiser would have corrected...had it been called to his attention”. Id at ¶22 citing Lakewood Mfg. Co. v. Home Ins. Co. of New York, 422 F.2d 796, 798 (6th Cir. 1970). Cases deciding the effect of appraisal awards are unusual. The Ohio Supreme Court’s decision in One Church relies primarily on 19th century case law for its conclusion. This emphasizes the fact that there is minimal case law deciding the effect of binding appraisal clauses in property insurance policies, and makes this case all the more significant. A lengthy dissent was written by Justice Fisher, who would have affirmed the Court of Appeals decision reversing and remanding the case for a decision on the merits. Of course, the decision works both ways, and an insurer dissatisfied with a binding appraisal award will likewise be without further recourse absent evidence of corruption, fraud, misfeasance, or manifest mistake, which must be pled with particularity. To constitute manifest mistake, “the mistake must be of such character that the arbitrator or appraiser would have corrected it had it been called to his attention.”  Lakewood Mfg. Co. v. Home Ins. 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