In 2001, ContractPoint Florida Parks, LLC wanted to build cabins in Florida state parks, but ended up in a legal battle with the Florida Department of Environmental Protection. They nearly lost their ability to make contracts with the government. Florida often works with private companies for services, but without a law to protect them, private companies could risk not getting paid for their work. Luckily, Florida courts have allowed private companies to sue the government for breach of contract. In Florida, state contracts are usually enforceable, but there is a law that says the state agency can’t pay a judgment against them unless the legislature sets aside money for it. ContractPoint had a contract with the Department of Environmental Protection and won a lawsuit for breach of that contract, but the DEP refused to pay because of this law. This section says that if you want to sue the state or a state agency for money, you have to prove they did something really bad to you. And even if you win the case, you might not get the money unless the legislature gives the okay for it. It’s a lot harder to make the state pay up compared to a regular person or company. F.S. §11.066 could make it impossible to enforce contracts against the state. This would make contracts with the state risky for the other party, and could lead to less competition for state contracts and higher prices. ContractPoint petitioned the court for a writ of mandamus to force the Department of Environmental Protection (DEP) to pay a judgment it owed. The circuit judge refused, saying that the law didn’t allow for payment without a specific appropriation by the state legislature. The appeals court disagreed, saying that the law didn’t intend to overturn previous cases holding the state accountable for breach of contract. The Florida Supreme Court ultimately sided with the appeals court, ruling that the law didn’t prevent the state from being held accountable for contractual judgments. DEP argued that the law meant what it said, but the court disagreed, saying that the state should still be responsible for paying judgments for breach of contract. ContractPoint argued that the court couldn’t agree with DEP’s position without changing existing law and making all state contracts void. They also pointed out that the law in question was originally intended for Florida’s citrus canker eradication program, and had only been cited in one other case before. So, they believed it wasn’t meant to apply to state contract actions. The Supreme Court looked at a law about the state’s power and said that it doesn’t protect the state from having to pay for breaking contracts. They said that if the state doesn’t pay, the court can make them. Some judges disagreed, but in the end, it looks like if the state breaks a contract, they have to pay up. The Supreme Court made a decision that said public entities (like the government) have to pay if they break a contract with a private company. This decision confirmed what people already thought was true. But it could have been a big problem if just one judge had voted differently. It could have meant that all contracts between the government and private companies in the state might not have been valid anymore, and companies might not have wanted to make deals with the government. The law that caused this issue had been around for a long time, but nobody had really paid attention to it before. It’s a good thing the Supreme Court made the right decision, because it could have been a disaster. Mike Piscitelli is a lawyer in Ft. Lauderdale who focuses on construction and public contracts law. W. Robert Vezina III is also a lawyer at the same firm in Tallahassee and works in the same areas of law. Megan Reynolds, another lawyer at the firm, helped with this article. The article was submitted on behalf of the City, County and Local Government Section.
Source: https://www.floridabar.org/the-florida-bar-journal/public-private-contracting-in-florida-survives/
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