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Pre-Suit Mediated Settlement Agreement and Mutual Release With New Vista Builders Group, LLC, Regarding Florida Prompt Payment Act Dispute Pertaining to Contract No. 21-C0008 for Constructions of Fire Station No. 5
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BRIEF OVERVIEW
In 2021, Hernando County entered into Contract 21-C0008 with New Vista Builders Group, LLC for the construction of Hernando Fire Station #5. On February 27, 2024, New Vista Builders Group, LLC submitted payment application #19 in the amount of $317,493.74, of which $291,301.78 was retainage. The County’s project manager certified the pay app on April 18, 2024, 21 days after the deadline to accept or reject the pay app under the Florida Prompt Payment Act. It is noteworthy that at this time, the County was experiencing a network outage. Believing pay app #19 was for final payment, the County emailed Lazaro Fernandez of New Vista Builders Group, LLC on April 29, 2024, asking him to review, sign and return the final completion acceptance form. Mr. Fernandez did not return the form to the County until July 26, 2024. During this time period, the County also advised New Vista Builders Group, LLC that it would be assessing liquidated damages against New Vista Builders Group, LLC in the amount of $22,000.00. New Vista Group Builders Group, LLC disputed the liquidated damages, and the County decided to withdraw the liquidated damages assessment.
On or about August 27, 2024, New Vista Builders Group, LLC inquired of the Procurement Department regarding the delinquent payment on pay app #19. It was then that the Procurement Department realized that pay app #19 was improper; it should not have included the retainage amount because it was not the final pay app. The Procurement Department directed New Vista Builders Group, LLC to submit a corrected pay app #19 excluding the retainage amount. New Vista Builders Group, LLC submitted the corrected pay app #19 for $24,948.86 on September 4, 2024.
On September 6, 2024, New Vista Builders Group, LLC submitted a claim to Hernando County under the Florida Prompt Payment Act (“PPA”), demanding full payment of pay app #19, plus $31,749.37 interest, for a total of $349,243.11. On September 13, 2024, the County paid New Vista Builders Group, LLC’s corrected pay app #19 ($24,948.86).
Furthermore, on September 4, 2024, New Vista Builders Group, LLC submitted pay app #20 for final payment and which properly included the retainage amount. The Procurement Department requested New Vista Builders Group, LLC submit all the required final completion documents, which New Vista Builders Group, LLC submitted on October 16, 2024. The BOCC approved final payment on November 19, 2024, and it was paid on November 22, 2024, ($293,044.87).
New Vista Builders Group, LLC contends that the County owes New Vista Builders Group, LLC interest in the amount of $47,821.78, because it did not pay the totality of its original pay app #19 until November 22, 2024. The County disputes that pay app #19 was a payment request as defined by the Florida Prompt Payment Act because it improperly included the retainage amount. Additionally, even though the County may have exceeded the Florida Prompt Payment Act’s deadline for rejecting the payment request, New Vista Builders Group, LLC delayed in submitting the necessary documentation to process final payment for a total of 4-1/2 months.
The purpose of this Mediated Settlement Agreement is to avoid litigation expenses associated with a lawsuit on the Florida Prompt Payment Act or any other matters related to the Project.
FINANCIAL IMPACT
The financial impact to the County is $30,000.00, which payment will settle all potential actions related to the Project or the Florida Prompt Payment Act.
LEGAL NOTE
The Board is authorized to consider this Mediated Settlement Agreement pursuant to Ch. 125, Fla. Stat.
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RECOMMENDATION
It is recommended that the Board consider this Mediated Settlement Agreement between Hernando County and New Vista Builders Group, LLC as a means to foreclose all potential actions related to the Project or the Florida Prompt Payment Act as it relates to the Project.