[DO NOT PUBLISH] IN THE UN ITED STATES COURT OF APPEALS FOR THE ELE VENTH CIRCUIT

__ __ __ __ __ __ __ __ __ __ __ __ No. 1 1- 11 19 1

__ __ __ __ __ __ __ __ __ __ __ __ D. C. Dock etNo. 1 :0 6- cv -2 15 98 -PCH CC-AVENTURA, INC., Pl ai nt iff - Co un te r Defen da nt- App el le e, CLASSIC RESIDENCE MANAGEMENT LIMITED PARTNERSHIP, Pl ai nt iff - App el le e, etal., ve rs us W EITZ COMPANY, LLC, Defen da nt- Cro ss Defen da nt- Cro ss Cla im an t - Co un te r Cl ai m an t - Th irdParty Pla in ti ff - Co un te r Defen da nt- App el la nt .

__ __ __ __ __ __ __ __ __ __ __ __ App eal fro m

th e Uni te d S ta te s Di st ric t Co ur t fo r th e So ut he rn Dis tri ctof F lo rid a

__ __ __ __ __ __ __ __ __ __ __ __ _ (Oct ob er 1 1, 2 01 2) Befo re DUBINA, Ch ie f Ju dg e, an d P RYOR an d ANDERSON, Ci rcu itJu dg es .

Case: 11-11191 Date Filed: 10/11/2012 Page: 1 of 7PER CURI AM:

In th is su rety

cas e, ob li ge e/ co nt ract orW ei tz co nt en ds th atth e d is tri ctco ur t
erre d b y fai li ng to pro pe rly fol lo w th e m ajor it y op in io n i n Do ol ey

& Mac k Co ns tru ct or s, In c. v. Dev el op ers Su ret y & In de m ni ty Co., 97 2 S o. 2 d 8 93 (Fl a. Dis t. Ct . App . 20 07 ). The d is tri ctco ur t co nc lu de d t ha t t he su ret y Fid el it y was n ot li ab le on a su ret y

bo ndbe cau se W ei tz ha d fa il edto gi ve no ti ce t o F id el it y of t he
subc on tra ct orAero ’s def

au ltbe fo re Weit z u nd ert oo k t o re m edy th e d efau ltit se lf. In Doo le y , th e su bc on tra ct orde fau lt edon it s o bl ig at io ns . Id. at89 4. Ra th er th an no ti fy

th e su rety , th e o bl ig ee/ co nt ract orrem ed ie d t he de fau ltit se lf a ndth en br ou gh t s ui t ag ai ns t t he su ret y . Id. The m ajor it y in Doo le y

in te rp ret edth e su ret y bo nd(whi ch in cl ud edby inc or po rat io n t he subc on tra ctbe twee n the ob li ge e/ co nt ract oran d t he subc on tra ct or ) to ha ve two alt ern at iv e ro ut es by whi ch th e su ret y co ul d fa ce l iabi li ty if th e su bc on tra ct orde fau lt edonit s o bl ig at io ns : (1 ) th e b on d i ts el f st at edth atth e o bl ig ee/ co nt ract orco ul d n ot ify the su ret y of t he de fau ltan d re qu ire th atth e su ret y rem edy th e d efau lt ; o r (2 ) th e su bc on tra ct (in co rp or at edin to th e b on d) st at edth atth e o bl ig ee/ co nt ract orco ul d re m edy th e de fau ltit se lf a ndth en lat er s ue th e su rety to co ve r th e sh or tfa ll
. The Do ol ey

m ajor ity co nc ed edth atif t he ob li ge e/ co nt ract orha d p ro ceed ed
un de r th e fi rs t ro ut e, th en itwou ldha ve be en requi redto fir stgi ve no ti ce t o t he
2 Case: 11-11191 Date Filed: 10/11/2012 Page: 2 of 7su ret y , bec au se th atpro vi si on was i nc lu de d wi th “ st an da rd ” su ret y bo ndlan gu ag e th atrequi res th e o bl ig ee/ co nt ract orto fir stgi ve no ti ce. Id
. Butth e co ur t 1
co nc lu de d t ha t the sec on d ro ut e (wh ere t he ob li ge e/ co nt ract or co ul d re m edy

th e de fau ltit se lf) di d n otin cl ud e an y of t he “ st an da rd ” su rety

lan gu ag e th atrequi res
no ti fic at io n, i d. at89 5, an d i t al so di d n otin cl ud e an y othe r la ng ua ge ex pl ic it ly requi rin g n ot ic e to be gi ve n, i d. (c it in g R LI In s. Co . v. St . Pat ric k’s Ho m e fo r th e In firm & Age d, 4 52 F. Sup p. 2 d 4 84 (S.D.N.Y. 20 06 ), fo r th e p ro po si ti on th atth e

“ ab se nc e o f [an ] ex pl ic itno ti ce re qu ire m en t o f pr in ci pa l’s d efau ltto su ret y di st in gu is he s ca se s fi nd in g t ha t n ot ic e is co nd it io n p rece de ntto su ret y ’s paym en t
un de r bo nd .”). Sin ce t he ob li ge e/ co nt ract orpro ceed edun de r th is sec on d ro ut e, it di d n otha ve to gi ve pri orno ti ce t o t he su rety . In th e cas e su b ju di ce, t he bo nd(an d, b y in co rp or at io n, t he subc on tra ct ) si m il arl y ha s t wo ro ut es by whi ch th e su rety co ul d b e ex po se d t o l iabi li ty if th e
subc on tra ct orde fau lt ed : t he su ret y co ul d u nd ert ak e to rem edy th e d efau lt , or t he ob li ge e/ co nt ract orco ul d u nd ert ak e to rem edy th e d efau lt . Butun li ke th e sc en ari o in Doo le y , th e rec or d i n thi s ca se sh ows th atbo th rou te s d idin cl ud e an ex pl ic it

The Doole y

majority noted that “[u]nder a familiar term of a ‘standar d’ sure ty 1 bond, which is included in this one, such a failure [t o first provide notice to the surety] would indeed r esult in a termination of the sur ety ’s obliga tions.” Dooley , 972 So. 2d at 894. The “fa miliar term” of

a “sta ndard” surety

bond in Dooley

was quoted a s: “Whenever subcontrac tor shall be, and de clar ed by

Oblige e to be in def

ault under the Subcontrac t, . . . the Surety may promptly reme dy the def ault . . . .” I d. at 894 n.1 (e mphasis in origina l).

3 Case: 11-11191 Date Filed: 10/11/2012 Page: 3 of 7requi rem en t t ha t n ot ic e fi rs t b e g iv en to th e su rety , an d i t al so was i nc lu de d a lo ng 2 wit h t he same pro vi si on as t he “ st an da rd ” la ng ua ge th atwou ldrequi re n ot ic e to fir stbe gi ve n (a s Do ol ey

it se lf a ckno wled ge d)
. In ot he r wor ds , th e la ng ua ge of t he rel ev an t d oc um en ts in Doo le y was di ffer en t fr om

th e rel ev an t l an gu ag e h ere. In Doo le y , th e su bc on tra ctga ve th e ge ne ral co nt ract or“ th e o pt io n, b utno t t he ob li ga ti on , to no ti fy .” Inco nt ras t, t he
subc on tra ctin th is cas e m ad e ref eren ce t o Weit z’s ab il it y

to rem edy

th e d efau lt , bu t
on ly after Weit z te rm in at edth e su bc on tra ct or ’s per fo rm an ce fo r cau se , andth us
on ly after r eas on ab le no ti ce. Read in g a ll th e la ng ua ge inth e rel ev an t d oc um en ts 3 The pe rtinent part of

the bond stated: 2 Whenever

Principal shall be, and be decla red by Oblige e to be in def

ault under the subcontrac t, the Oblige e havingperf ormed Oblig ee’ s obligations thereunder : (1) Sure ty may promptly reme dy the def ault subject to the provisions of par agraph 3 here in, or; (2) Oblig ee a fter r easona

ble notice to Surety

may , or Surety

upon demand of Oblige e may

arr ang e for

the per formanc e of Principa l’s obligation under the subcontrac t subject to the provisions of para graph 3 he rein; . . . . Doc. 1173- 3 (empha sis added).

Section 10.1 of the subcontr act pr ovided: 3 I f [Aero] fails or neg lects to ca rry out [ its] Work in strict compliance with the Subcontrac t Documents or is otherw ise in defa ult of any of its obligations under the Subcontrac t Documents, and f ails to commence and continue c orre ction of such def ault or neg lect with dilige nce a nd promptness, [W eitz] may , afte r 48 hours followingdelivery

to [ Aer o] of written notice there of and w ithout prejudice to any other re medy

[W eitz] may

have, ( i) supplement [Aero’s] perf ormanc e with 4 Case: 11-11191 Date Filed: 10/11/2012 Page: 4 of 7he re h arm on io us ly in o rd er t o g iv e eff ectto all pro vi si on s, as Flo rid a la w requi res , itis cle ar i n t hi s ca se th atth e su ret y , Fid el it y , hada ri gh t t o re as on ab le no ti ce be fo re Weit z u nd ert oo k t o arran ge forth e p erfo rm an ce o f th e work t o c ur e th e de fau lt
. In Do ol ey , th e o bl ig ee/ co nt ract orpro ceed edun de r a ro ut e th atdi d n ot

4

additional materia l, supplies, equipment or labor, pa y for same and de duct the amount so paid from a

ny money then or ther eaf

ter due [Aero] (if such offse t is not sufficie nt, [ Aer o] shall pay any defic iency

promptly upon demand) , or (ii) terminate [Aer o’s] continuing per formanc e under the Agree ment. Termination of perf ormanc e may

be immediate ( without prior notice) in the e vent of c onditions hazardous to per sons or proper ty . Such termination of per formanc e shall be deeme d for c ause, a

nd Section 10.4 [C onsequenc es of Te rmination for Cause ] shall apply

there to. Section 10.4 provided: Upon a ter

mination of [Aero’s] continuing per formanc e under the Agree ment for cause , [W eitz] may , without lim itation to any other available r emedies, pr ocee d as follows: (i) direc t [ Aer o] t o immediately leave the site, but to give possession of all completed mate rials and supplies at the site or stored off

-site, to [W eitz] for use in completing[Aero’s] W ork; . . . [W eitz] shall also provide or c ause to be provided such othe r mater ials, supplies, tools, equipment, machinery , labor, service s and other items ne cessa ry to complete [Aero’ s] W ork; or (ii) by reg istered or

cer tified mail addre ssed to [Fidelity ] . . . require [Fidelity ] t o provide such mater ials, supplies, tools, equipment, machinery , labor, ser vices a nd other items as may

be nec essar

y to complete [Aero’ s] W ork in strict compliance with the Subcontrac t Documents. [W eitz] shall apply any unpaid balanc e of the Subcontrac t Sum t o pay

for suc h completion costs; provided, that [W eitz] may first requir e [Aero] or [Fidelity ] . . . t o fund any anticipated e x cess c ompletion costs. In all such eve nts, if the unpaid balanc e of the Subcontrac t Sum ex cee ds the costs of completing[Aero’s] W ork tog ether with interest on such c osts and toge ther with any

offse ts and deduc tions available to [W eitz] , such excess shall be paid to [Aero]. However , if such costs, intere st deductions and off sets exceed suc h unpaid balanc e, [Aero] or [Fidelity ] shall pay the diffe renc e to [W eitz] upon demand. See note 2, supra
. 4 5 Case: 11-11191 Date Filed: 10/11/2012 Page: 5 of 7requi re n ot ic e to fir stbe gi ve n t o t he su ret y , andso th e su ret y was n otrel ie ve d o f it s o bl ig at io ns jus t b ecau se th e o bl ig ee/ co nt ract orfai le d t o g iv e n ot ic e b efo re
un de rta ki ng to rem edy

th e d efau ltit se lf. Bu t i n o urcas e, th e co nt ractlan gu ag e was writ te n d iff

eren tl y , anditdi d re qu ire th atW ei tz fir stgi ve no ti ce t o t he su ret y be fo re Weit z u nd ert oo k t o re m edy th e d efau ltit se lf. W ei tz ’s arg um en t h as be en th atitdi d n otne edto gi ve no ti ce b efo re
un de rta ki ng to rem edy

th e d efau ltit se lf. Acc or di ng ly, W ei tz ha s n otch al le ng ed th e d is tri ctco ur t’s co nc lu si on itne ve r se nt“ reas on ab le no ti ce” t o F id el ity . 5 Bec au se W ei tz was re qu ire d t o g iv e rea so nabl e n ot ic e to Fid el it y be fo re W ei tz un de rto okto rem edy Aero ’s def

au lt , andbe cau se W ei tz ha s fa il edto ch al le ng e th e d is tri ctco urt’s co nc lu si on th atW ei tz ne ve r ga ve reas on ab le no ti ce, we ag ree wi th th e d is tri ctco urt t ha t Fi de li ty is n otli ab le on th e su rety bo nd . As Doo le y st at ed , un de r Fl or id a la w, a su ret y is rel ie ve d o f it s o bl ig at io n i f th e ob li ge e/ co nt ract orfai ls to gi ve th e n ot ic e th atis requi redby the bo nd . See Do ol ey , 97 2 S o. 2 d a t 8 94
. Fo r th e fo reg oi ng reas on s, t he jud gm en t o f th e d is tri ctco ur t i s

Weitz ’s reply

brief sug g ests that failure to thus noti fy a sure ty of def ault 5 (trig g eringthe surety ’s right to cure the defa ult) would discharg e a sur ety only upon a showingof prejudice . We decline to addr ess that argument beca use it was ra ised for the first time in the reply brief. 6

Case: 11-11191 Date Filed: 10/11/2012 Page: 6 of 7AFFIR MED.

7 Case: 11-11191 Date Filed: 10/11/2012 Page: 7 of 7